Is the government letting speculators do the same thing to oil that happened to the housing market.?

Question

Ok, we know we are being ripped off by the big oil companies. The question is 'Are they doing the same thing to oil that they did to the housing market?' Our country cant afford it and if they are they should be punished.

Answer 1

In case you forgot, WE are the government. I suggest we all exercise our power and boycott vacations for one year. Just think about it: Everything shut up tight! Disney and Six Flags would raise h**l! We don't have to visit Mexico either until they get their borders under control and the drug cartels annihilated.

How about we all bury the congress and the house in letters?!! Just imagine if we all wrote two letters, one each to the congressman and to the senator of our states, and let them know how we feel about (place the topic here). Do it one month a year every year. It would be fun. They would like to know that they are being paid because we want them to do what they were voted into office to do.

The government is investigating the reasons of oil prices being so high, but it is up to the citizens to encourage the government to do more, and the best way to do that is to let the big taxpayers (the Disneys and the amusement parks and others that depend on our dollars to pay the big taxes or generate the big profits) put the pressure on those that can enact power over those that manipulate the systems in place.

Answer 2

"Ok, we know we are being ripped off by the big oil companies."

Urban legend #1284.

"...if they are they should be punished."

Ever ask yourself why those periodic show trials conducted by Congressional committees into the atrocities committed by The Evil Oil Companies have NEVER, EVER produced one iota of evidence of wrongdoing on the part of said Evil Oil Companies?

I mean, really, haven't you wondered just the littlest, tiniest bit as to why wacky, far-left wing, pandering "liberals" with the power of Congress behind them can find NOTHING WHATSOEVER to hang on The Evil Oil Companies?

Well, knowing that you (obviously) haven't, let me do your thinking for you: There is NOTHING wrong with operating a business that produces that most evil of all evilness: PROFITS. Now, son, how's that for a most controversial and radical idea?

P.S. If you really and truly believe in Urban Myth #1284 then I suggest that you begin a campaign against The Evil Software Giants as their profit (there's that evil word again!) margins make those of The Evil Oil Companies look like that of children who have no idea how to run a business. Translation: Let's just nationalize ALL The Evil Businesses and THEN everything will be WONDERFUL!

Answer 3

Let me try to explain - these are two very different situations.  Oil, like other commodities (foods, etc) are traded on the commodities market.  People buy and sell by speculating (guessing) what they think the price will be in the future (they're called 'futures').   Because of supply and demand, the prices are driven upward or downward.  The companies who produce the commosities do not set the prices.  They either benefit or lose money depending on a variety of things, including natural disasters which affects the supply.

The mortgage situation was caused when people borrowed money from companies who offered 'sub-prime' or variable rate mortgages.  The 'fine print' in these contracts was overlooked by the borrowers, and when the interest rates rose, their payments rose.  Also, when the companies who originally lent the money started to lose too much money, they sold the mortgages to other companies, (many of them foreign owned), and they, in turn, raised the rates even more.  That's why you see people being investigated and mortgage companies going out of business.  The borrowers were the "speculators" and 'guessed' that interest rates would go down or remain the same.  That was their mistake.

Not everything in economics is directly related. The other answerers' responses regarding other 'giants' like Microsoft, etc., are correct.  But we don't usually complain about them because in a free enterprise, they set the prices of their products due to supply and demand, but they are not 'traded' on commodities markets, like oil. However, it is the same principle, but it is very different from lending and borrowing.

I hope this explains it a little better for you.  Like I always say, "you learn something new each day", right?

Answer 4

Yes