{"id":29672,"date":"2008-06-25T01:01:01","date_gmt":"2011-05-19T03:40:27","guid":{"rendered":""},"modified":"2011-05-19T03:40:27","modified_gmt":"2011-05-19T03:40:27","slug":"a_short_course_on_speculation","status":"publish","type":"post","link":"https:\/\/admin.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/","title":{"rendered":"A Short Course on Speculation"},"content":{"rendered":"
\n

RUSH: If you have time, take a gander at just a roster of news stories on any site. Look at Drudge, if you find the AP page, look at the AP page, or any of them, and look at how many stories are not about what\u2019s happening, but on what might happen, from global warming, to 25% of the world\u2019s oil under the North Pole, to what Hugo Chavez might do, to what Cuba might do. Everything is speculation, 90% of it is speculation. None of it is news. None of it is what is happening. It\u2019s all polls. McCain may lose in this field, and Obama is picking up ground here. It\u2019s all meaningless because it\u2019s all speculation. Speaking of speculation, how many miles do you get on a gallon of Harry Reid? How many miles do you get on a gallon of Nancy Pelosi? Here\u2019s the problem for the liberals in Congress. Gasoline prices are soaring. I saw a statistic out there the other day. Gasoline demand is down 2.7%. People are using it less. Diesel prices are soaring. Everybody in America is feeling the pain of this. The rich, the poor, black, white, brown, young, old, red, blue, religious and secular, everybody\u2019s feeling this. <\/p>\n

The Democrats are feeling the pressure, the no-drill Democrats, the no-nuclear Democrats, the no-coal Democrats. And they need a demon. They need a demon to demonize. They can\u2019t blame this one on Ken Starr. They can\u2019t blame this one on Donald Rumsfeld or Karl Rove or Tom DeLay. They need a demon, and they need this demon fast. So, my friends, the demon has become speculators. All of this, the price rise in oil and the accompanying rise in gasoline is the fault of the speculators. So once again, my friends, it falls to me, becomes my responsibility to give you a short course on speculators and speculation. We\u2019ve done this a couple of times before, but let me try a different tack. What is speculation? What is the commodities market? It\u2019s the futures market, by definition, speculating on what\u2019s going to happen in the future, which means that people are betting on the price of whatever commodity in the future is going to be, be it soybeans, be it corn, be it oil. <\/p>\n

Now, in the futures market you buy and sell contracts. No one can buy a futures contract without finding somebody to sell a contract. Same as stock. If you want to go out and sell some of your stock, somebody\u2019s gonna buy it. You don\u2019t just turn it in and get the money. Somebody\u2019s buying your stock. Same thing when you buy stock, you\u2019re buying it from somebody selling it. You may not know who they are, but somebody selling. The government can print money, but the commodity exchanges cannot print contracts. They are genuine and they are real. You can\u2019t buy an oil contract without somebody willing to sell it to you. And if there aren\u2019t any sellers, then you have to bid a higher price to find one. This is no different than any other transaction that takes place except we\u2019re dealing with the out years, or the out months. We\u2019re dealing with the price of a commodity before it\u2019s available. Speculators are just bettors, and they make money both ways if they\u2019re right. If they bet the price is going to go down and they sell their contract and it goes, they\u2019ve made money. If they bet it\u2019s going to go up and they buy a futures contract, they make money. <\/p>\n

Every time somebody makes money in the speculation market, somebody loses. Speculation does not distort the value of anything. It establishes the value, and this is why so many people in the commodities business, or have businesses related to commodities, enjoy the speculation market because it helps establish certain costs of doing business in the years ahead. If you run your own business, you know, you try to get a big a handle on your fixed costs, you try to get them established for as long a period of time as you can so you can plan other aspects of the business around those costs. You might even say that speculation is one of those rare real examples of a zero-sum game. The reason I say that, and I might get some economists argue with me on this, but for the sake of illustration, for everybody speculating that prices are going to go up, say in oil, somebody is speculating prices are going to go down. There is heavy speculation in the heavily regulated corn market. Prices are going up, and in the US dollar, where future price is going down. Either your congressman and your senator know this and is feeding on your lack of understanding, or your congressman has too little understanding of the economy to be in Congress. <\/p>\n

But there\u2019s nothing about futures or options that makes it any more attractive to bet that commodities will go up than to bet they will go down. If you guess wrong on the direction, you lose money. That\u2019s all you need to know about speculation. When you speculate on the price of a commodity, what you\u2019re doing is betting on whether the price will rise or whether it will fall. You\u2019re not betting on whether you want it to rise or fall. This is the difference. Everybody thinks that the speculators are trying to drive the price up or trying to drive the price down, that\u2019s not what they\u2019re trying to do. They\u2019re guessing. They\u2019re betting. It may be educated guessing, educated betting, but they still are. You\u2019re not betting that you want what you\u2019re doing will cause the price to rise or fall, not whether you hope it will rise or fall. Your money is going to do nothing to cause the price of oil to rise or fall. It\u2019s gonna base itself, all the results on the good old laws of supply and demand. <\/p>\n

Let me give you another example of speculation. Oh. I should point this out. Oil inventories were reported late yesterday, early this morning, oil inventories — supplies, for those of you in Rio Linda — have been reported to have increased sharply. And guess what? I haven\u2019t checked since the program began but right before the program began the price of oil per barrel was down about five bucks, a little under five dollars. There haven\u2019t been any gasoline lines. The oil price fell five dollars not because of the visible hand of Congress, not because of some nefarious action by some wizard behind the curtain pulling the strings. Now, you might be thinking, good, if the price came down to speculators, why they lost big time. No. No, no, no. Some did, but other speculators won. The speculators who were long lost. The speculators hoping for the price to go up, they lost. Speculators who were short, who were betting on the price to come down, they won. <\/p>\n

Now, if we\u2019re going to outlaw long speculation, if we\u2019re going to say you can\u2019t speculate on the price of oil to go up, then we\u2019re going to have to outlaw speculating the price is going to go down. The only thing that Congress can\u2019t or won\u2019t allow is the spectacle of them blaming speculators. It\u2019s just economics 101 and it all will come down to the basic laws of supply and demand in the long run. Those are always the determining factor. <\/p>\n

Now, let me bring Tiger Woods into this equation for just a second, because one of my favorite sports columnists is Phil Mushnick of the New York Post. Phil is an old curmudgeon when it comes to the Drive-By sports media on television. He\u2019s a critic and so forth, and he\u2019s pretty spot-on. Over the years Mr. Mushnick has duly noted that all of the networks that televise golf have been totally in the tank for Tiger Woods, that when Tiger is playing, even if he\u2019s not in the lead, even if he\u2019s way off the lead, even if his round is finished, they still show Tiger Woods, at the expense of showing any other golfers that are out there playing. The US Open, NBC televising, you would have thought even before the playoff on Monday that Tiger Woods was the only guy on the course. They would spend time watching Tiger put his tee in the ground. They would then spend time with Tiger selecting his club. All the while, other people are playing golf. But you didn\u2019t see it. We saw Tiger walking down the fairway after his shot. We saw Tiger communicating with his caddy in the meantime. We saw all Tiger, all the time. All the networks do this. He\u2019s a ratings grabber. <\/p>\n

But in the process of doing this, a lot of other players on the tour have not been exposed on television, and so when Tiger doesn\u2019t play, nobody cares. But they all know that Tiger is coming back, he mostly plays 15, 16 tournaments a year. He plays all the majors, but he doesn\u2019t go to many other tournaments, a couple that Buick sponsors and some others, but you can go five weeks on the PGA Tour and not see Tiger Woods. And you can see what happens to TV ratings when he\u2019s not playing. Now, the networks — CBS and NBC and throw the Golf Channel in there, ESPN on Thursday and Fridays in some tournaments — have bet the ranch in their golf coverage on Tiger Woods. They have speculated that Tiger Woods is going to be their cash cow ratings-wise, advertising-wise, for who knows how many years in the future. They have so invested in Tiger Woods that they haven\u2019t taken the time to establish other personalities and celebrities on the tour, other than perhaps Phil Mickelson. <\/p>\n

Aside from that, whenever anybody else does well, they\u2019re shocked. My man Rocco Mediate is one example in the US Open. That\u2019s right, Rocco Mediate. I met Rocco the first time I played in Bob Hope. It was during a practice round when I was out there with Fuzzy Zoeller and his gang, John Daly, Joe Pesci, and we\u2019re taking our time, and Rocco and his gang came up in golf carts and they were just taking practice, and they\u2019re going to various holes and practicing various shots, they were not playing a round and they interrupted us on the 18th and they started from about 280 yards trying to hit a shot over the water to the green in what would have been two shots. And I had my Stogie Vise on the golf cart, Rocco said, ‘What\u2019s that?\u2019 I said, ‘Stogie Vise,\u2019 and I showed him how it worked, put the cigar in it, he was mesmerized. So I gave it to him, and I haven\u2019t seen Rocco since. (laughing) I\u2019ve seen him in tournaments. My point is that all of this speculation on Tiger Woods, they looked into the future, they risked their capital, that Tiger Woods was going to be healthy. They put it in writing that Tiger Woods was professional golf. Nothing against Woods, now, don\u2019t anybody misunderstand here. Trying to make a point. And now they are panicked \u2019cause Tiger is out for the season. <\/p>\n

He had his ACL surgery yesterday. He\u2019s gone for the year. He\u2019s not going to play. I mean this is an ACL, folks, you know, two stress fractures there in the left tibia. As a football player, it\u2019s a year. I don\u2019t know about a guy who has to walk golf courses, but it\u2019s going to be calendar 2009 and somewhere far into calendar 2009. So we\u2019ve got the British Open coming up, no Tiger. We\u2019ve got the PGA Championship coming up, and we\u2019ve got the FedEx Cup, no Tiger. He won\u2019t commentate. Tiger won\u2019t commentate. But even if he commentated, that\u2019s not going to increase ratings. They want to see Tiger play. What\u2019s the way around this? Well, they speculated and they threw it all in on Tiger, or 80% of it. So now they\u2019re going to have to go back to the drawing board, they\u2019re going to have to establish that there are other guys out there that are worth watching. They could have been doing this the whole time Tiger is playing by not only televising him, but also televising some of these other players. Speculation happens all over the place, and sometimes you lose as well as win. <\/p>\n

BREAK TRANSCRIPT<\/p>\n

RUSH: I wonder, folks, should I propose a bailout for CBS and NBC? Maybe we can find a way for them to get some of the money back they paid the PGA Tour? After all, Tiger is not there; their ratings are going to be down. Their advertising revenue is going to be down. Should we have a bailout? I mean, just like we\u2019re bailing out members of Congress because they had sweetheart mortgages with Countrywide. We\u2019re bailing out the mortgage industry. We\u2019re bailing out all these other people that speculated and bet. Have you ever bet on a professional football game with a bookie? Have you ever? They have the line. The odds makers make the line. Let\u2019s say Patriots-Steelers is coming up Sunday; it\u2019s at Foxboro, and let\u2019s say they make the Patriots say a six-point favorite. A lot of people say, ‘Six points on the Patriots? They\u2019re going to cream the Steelers.\u2019 The worst thing you can do when you get involved in betting the points in a football game is worry about your favorite team. You\u2019re making a bet. <\/p>\n

You are making a bet! The people that make the odds don\u2019t care who wins. They\u2019re trying to get equal amounts of money on both sides so that no matter who wins, they win. And they\u2019ve gotta set a line that\u2019s going to attract much money. So if Steelers fans think their team is going to get blown out by ten, and the line is six, they\u2019ll take the six. If the Patriots fans think the opposite: ‘Wow, six points? We\u2019re going to blow these people out by ten, 15. Sure, I\u2019ll lay the six,\u2019 and they\u2019ll take it. So the bookies are doing just what happens in the oil speculation market. They\u2019re trying to get both sides. There\u2019s as much money on both sides of this, and everybody is speculating on what\u2019s going to happen at the end of the game. And it is no different in the oil speculation market, in the commodities markets. When you put your money on the Steelers versus the Patriots, you know your money is going to have no impact on the Steelers winning, and it\u2019s the same thing in the oil futures market. <\/p>\n","protected":false},"excerpt":{"rendered":"

RUSH: If you have time, take a gander at just a roster of news stories on any site. Look at Drudge, if you find the AP page, look at the AP page, or any of them, and look at how many stories are not about what\u2019s happening, but on what might happen, from global warming, […]<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","ngg_post_thumbnail":0},"categories":[],"tags":[],"yoast_head":"\nA Short Course on Speculation - The Rush Limbaugh Show<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:title\" content=\"A Short Course on Speculation - The Rush Limbaugh Show\" \/>\n<meta name=\"twitter:description\" content=\"RUSH: If you have time, take a gander at just a roster of news stories on any site. Look at Drudge, if you find the AP page, look at the AP page, or any of them, and look at how many stories are not about what\u2019s happening, but on what might happen, from global warming, […]\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/live-rush-limbaugh.pantheonsite.io\/wp-content\/uploads\/01125109.Par.89380.ImageFile_579144e6f279e.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"12 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/admin.rushlimbaugh.com\/#website\",\"url\":\"https:\/\/admin.rushlimbaugh.com\/\",\"name\":\"The Rush Limbaugh Show\",\"description\":\"Excellence In Broadcasting\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/admin.rushlimbaugh.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/live-rush-limbaugh.pantheonsite.io\/wp-content\/uploads\/01125109.Par.89380.ImageFile_579144e6f279e.jpg\",\"contentUrl\":\"https:\/\/live-rush-limbaugh.pantheonsite.io\/wp-content\/uploads\/01125109.Par.89380.ImageFile_579144e6f279e.jpg\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#webpage\",\"url\":\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/\",\"name\":\"A Short Course on Speculation - The Rush Limbaugh Show\",\"isPartOf\":{\"@id\":\"https:\/\/admin.rushlimbaugh.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#primaryimage\"},\"datePublished\":\"2011-05-19T03:40:27+00:00\",\"dateModified\":\"2011-05-19T03:40:27+00:00\",\"author\":{\"@id\":\"https:\/\/admin.rushlimbaugh.com\/#\/schema\/person\/911066e449df26406b107ca78cbbde0b\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.rushlimbaugh.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"A Short Course on Speculation\"}]},{\"@type\":\"Person\",\"@id\":\"https:\/\/admin.rushlimbaugh.com\/#\/schema\/person\/911066e449df26406b107ca78cbbde0b\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/admin.rushlimbaugh.com\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/f18195e0073013fa0e16b040686c2924?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/f18195e0073013fa0e16b040686c2924?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"url\":\"https:\/\/admin.rushlimbaugh.com\/daily\/author\/admin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"A Short Course on Speculation - The Rush Limbaugh Show","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/","twitter_card":"summary","twitter_title":"A Short Course on Speculation - The Rush Limbaugh Show","twitter_description":"RUSH: If you have time, take a gander at just a roster of news stories on any site. Look at Drudge, if you find the AP page, look at the AP page, or any of them, and look at how many stories are not about what\u2019s happening, but on what might happen, from global warming, […]","twitter_image":"https:\/\/live-rush-limbaugh.pantheonsite.io\/wp-content\/uploads\/01125109.Par.89380.ImageFile_579144e6f279e.jpg","twitter_misc":{"Written by":"admin","Est. reading time":"12 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebSite","@id":"https:\/\/admin.rushlimbaugh.com\/#website","url":"https:\/\/admin.rushlimbaugh.com\/","name":"The Rush Limbaugh Show","description":"Excellence In Broadcasting","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/admin.rushlimbaugh.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"ImageObject","@id":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#primaryimage","inLanguage":"en-US","url":"https:\/\/live-rush-limbaugh.pantheonsite.io\/wp-content\/uploads\/01125109.Par.89380.ImageFile_579144e6f279e.jpg","contentUrl":"https:\/\/live-rush-limbaugh.pantheonsite.io\/wp-content\/uploads\/01125109.Par.89380.ImageFile_579144e6f279e.jpg"},{"@type":"WebPage","@id":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#webpage","url":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/","name":"A Short Course on Speculation - The Rush Limbaugh Show","isPartOf":{"@id":"https:\/\/admin.rushlimbaugh.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#primaryimage"},"datePublished":"2011-05-19T03:40:27+00:00","dateModified":"2011-05-19T03:40:27+00:00","author":{"@id":"https:\/\/admin.rushlimbaugh.com\/#\/schema\/person\/911066e449df26406b107ca78cbbde0b"},"breadcrumb":{"@id":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.rushlimbaugh.com\/daily\/2008\/06\/25\/a_short_course_on_speculation\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.rushlimbaugh.com\/"},{"@type":"ListItem","position":2,"name":"A Short Course on Speculation"}]},{"@type":"Person","@id":"https:\/\/admin.rushlimbaugh.com\/#\/schema\/person\/911066e449df26406b107ca78cbbde0b","name":"admin","image":{"@type":"ImageObject","@id":"https:\/\/admin.rushlimbaugh.com\/#personlogo","inLanguage":"en-US","url":"https:\/\/secure.gravatar.com\/avatar\/f18195e0073013fa0e16b040686c2924?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/f18195e0073013fa0e16b040686c2924?s=96&d=mm&r=g","caption":"admin"},"url":"https:\/\/admin.rushlimbaugh.com\/daily\/author\/admin\/"}]}},"_links":{"self":[{"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/posts\/29672"}],"collection":[{"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/comments?post=29672"}],"version-history":[{"count":0,"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/posts\/29672\/revisions"}],"wp:attachment":[{"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/media?parent=29672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/categories?post=29672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/admin.rushlimbaugh.com\/api\/wp\/v2\/tags?post=29672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}