Speculation
on Sep 30 in Financial Market tagged by Trevor HicksI’ve written at length in the past why the idea that evil speculators were responsible for jacking up oil prices seemed silly to me. Bryan Caplan is quite succinct:
Speculators’ goal is to buy low - which keeps prices from falling even more - and sell high - which keeps prices from going even higher. And while a speculator can try to drive prices to his advantage, other speculators are usually around to meddle with his plan.
Fear of speculators is yet another example of what I call “Underpants Gnomes” thinking. That is, I often see a cause linked to an effect but without any explanation of the mechanism of causation. The important details get omitted. This is based on an episode of the TV show “South Park” that parodied the dot-com bubble. The Underpants Gnomes stole little boys underpants with the expectation that somehow they would lead to massive profits.
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I am an IT and software development leader with extensive experience in oil and gas exploration and production software technology. My passions are in process design and execution as well as employee recruitment, development, motivation and retention and in collaborating with business partners and translating business needs into engineering and technology plans.
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