Re: [Marxism] Zero-sum?

["JoaquÃn Bustelo" <jbustelo@xxxxxxxxx>]

I'm not sure this article by someone with some connection with Oxford
is all that useful.

For example,

> The current market-related oil-pricing regime is based on formula pricing, in
> which the price of a certain variety of crude oil is set as a differential to 
> a
> certain marker or reference price.

We know from the FT article from mid-June that this is false. The
"differential" varies as a function of market conditions. Either the
author did not understand how pricing actually works or was so
mesmerized by the form in which it is expressed (a reference benchmark
crude +/- a differential) that he failed to appreciate the
significance of the fact that the differential is a VARIABLE
differential for a given type of crude, and NOT a set amount. The
significance is that these are real distinct markets, however
inefficient and untransparent, and the fluctuations of benchmark
crudes do NOT by themselves set the price, but rather a combination of
the overall general crude oil market and specific conditions in the
particular market segment occupied by a specific type of crude.

As for the rest of the discussion, I'd like someone to try to
illustrate with a simplified example like the one I gave for future
trading in  bushels of wheat just how one would accomplish driving up
the price of the physical commodity by speculation in the futures
market. I can explain in very simply and straightforward terms how
this would be accomplished in manipulating a physical market, but I
just can't see how it could possibly be done in a futures market where
prices inevitably converge with the physical market for each
successive month as the delivery date for the contract approaches. I
just can't wrap my head about how this would be accomplished in a
futures market. Someone please enlighten me.

Joaquin

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