November 10, 2008
The State of Conservatism
November 10, 2008
Kling on Financial Markets
November 10, 2008
Lectures on Macroeconomics, No. 3
November 9, 2008
Lectures in Macro, No. 2
November 8, 2008
Unpresidential Remarks
November 8, 2008
Lectures in Macroeconomics, No. 1
November 8, 2008
More on Autos
November 8, 2008
The Economics of the Auto Industry
November 7, 2008
Why the Left Should Not Forgive the American Voter
With your confidence you can get all the bets you want at the Mercantile Exchange!
However, I agree that we will see $3.25 gas at the bottom of the recession, but it won't last.
My point is that current market prices for oil in 2016 are pretty close to what I need to win my bet. So why would I want to bet against the market, especially considering transactions costs and my inexperience in short-selling?
P.S. Futures markets don't seem to think that oil prices (and gas prices by extension) are going to fall much in the next few years. So there's not much reason to expect the $3.25 price you predict anytime soon.
Bryan,
Every futures contract has a long and short side, much like every stock trade has a buyer and seller. So for transaction costs you shouldn't think of the analogy as shorting, rather think of it as selling - costs are about the same as buying. Relatively cheap, easy, and with built-in leverage, which is why if you want to speculate in either direction, you like the futures market.
How much is the bid/ask spread on the contract 8 years out?
why don't you take a position on the 8 years futures markets NOW and hedge your bet against tyler and david?
The basic problem is that even if you think you'll make 30% in 8 years on your futures contract, there are a lot easier and more sure ways of making a lot more than 30% on your money over the course of 8 years.
So that leads to a thin market as people put their money in more lucrative ventures.
In a competition for investment capital, an 8 year futures market would have to give you some pretty serious returns to justify the time period.