Tuesday, November 24, 2009
More From Experts
(click on image to enlarge)
Here is a link for those brutes for punishment:
Risk management is promoted to get a handle on prices (farm milk) rising or falling. In a real market price moves because of information. How can this be, in a situation where there are so few players.
All of the papers in the above link promote the idea (as if there can be no other thought) of supply/demand. Fine but, where farm milk is priced, on the CME, one day a powerful player behaves as if farm milk prices are too high. Then for reason which are not obvious, the same player behaves as if prices are too low.
That is the cash market and those traders largely determine Class III futures. http://www.cftc.gov/dea/futures/deacmelf.htm So about half of all trades are held by 8 or fewer players.
Some market? This activity is closer to economic activity in the former Soviet Union than to any concept of a real market.