Chinese sell-off spooks oil traders

China knows with a liberal in the Whitehouse with no experience and a liberal DEMOCRATS running Congress they know they have them both right by the balls.

The institutional traders that bid up China's market for quick profit came to the conclusion last month that the recovery hasn't really materialized and they bid Chinese corporations far higher than the merits of earnings.

Exactly the same scenario we have in the USA. The S&P is perhaps trading at its highest level vs earnings in the history of the market.

You can't expect to be able to bid the market up based on BS forever. At some point reality has to set in. The Chinese practice better capitalism than we do. What we have in the United States is a multibillion dollar industry built on trying to con people into parting with thier money for stocks. TV networks, online brokerages, the press all telling you to buy stocks.

The little people aren't buying. That is why there is all the recovery news, talk of green shoots, talk of future jobs. It is all to get the little people to trade thier cash for shares of stock. A ponzi scheme needs bit players to keep going. You also need the lure, the promise of massive return. Every person on TV is telling you that you missed out on a once in a lifetime opportunity. All while prvately questioning the validity of the rally. There isn't a single pundit who can give a real market based reason fort the extent of the rally.

Institutional brokers are sitting on huge profits if they can sell the shares they own. The problem is that if you look at the trading volume the small investor is not buying shares. These are people that have been wiped out with no form of equity to raise cash in order to buy stocks.

You bet people would have liked to buy corporations at $1 that climbed 700% for no real reason since march. However when you are trying to figure out how you are going to keep your house, buying stock is the last thing on your mind.

The oil manipulators are in the same boat. They have more or less cornered the oil market preventing the actual consumers of oil from buying the commodity at a fair market price. These traders are hoarding oil in an attempt to create more revenue from thier trade. Many bought oil at $35 and are trying to force the price higher before they sell. The original stops came and went because they feel they can drive the price higher before they must capitulate to the market reality. All it would take is one trader to hit the mass sell button and the price of oil will plummet.

The problem is that just a few massive accounts hold the majority of the contracts. These accounts don't want to be the one that gets caught during the massive selloff and lose profit. Instead smaller traders are selling off oil contracts and locking in profit. WHen they do the large broker is buying thier contracts in full driving the price back up.

The refusal to sell is driving up inventories and actually creating a supply shortage. Demand is so weak that production can keep up with the shrinking level of true supply. This has been engineered to keep a price floor on a barrel of oil. There would be no way to maintain the current price if all of the excess supply hit the market at once.

The current selloff is due to smaller oil manipulators getting scared by reality. By thursday oil will be back to $75 just like every week for the past month. Unless one of the big traders finally lets loose.

It would be interesting to see just how much oil is owned by the big traders. Last year you had up to 75% of the contracts owned by three trading groups. My bet is you may have up to 90% held by two groups right now. The oil market has been cornered and we all are paying the price.

Who going to reap the benefits on this one. Sure wont be me.

Nothing like a bunch of carpet bagging thieves manipulating a market to the detriment of the masses. Time for some real reform...like removing oil from the trader as a tradable contract. Time to tell Opecers to shove it where the sun don't shine. Time to tell our polashitans to do thier job as representatives of the people and not of special interest groups...time to tell progressives like Obuma that his traitoress acts in concert with his crooked cronies is a hangable offense. Time to tell the likes of market manipulators like T.Dumbass Pickens to shit in someone elses soup...like his own for awhile. If you get by my rhetoric a sense of displeasure at the greed and lack of fudiciary responsibility in our governing bodies as well as those who are allowed to manipulate crucial markets, like oil...you would be spot on and deserve a gold star. A little tar and feather routine on the specushiters would go a long way in restoring a balance in the market place. Of course a rail ride out of town, meaning out of the country would be the next logical step because it is way past time for the USA to begin to protect itself from the criminal element that is undermining this country.

IRIDIUM, YOU ARE A VERY VERY SMART PERSON WHO HAS IT FIGURED OUT....