Re: Futures Markets and Y2K

Peter C. McCluskey (pcm@rahul.net)
Sat, 20 Feb 1999 17:44:13 -0800

mark@unicorn.com (mark@unicorn.com) writes:
>Peter C. McCluskey [pcm@rahul.net] wrote:
>>Oil futures and other futures contracts provide as good an estimate as any
>>of the risks of major disruptions. The oil futures market is saying quite
>>clearly that there is no problem.
>
>The problem with trusting futures markets for predicting the future is that
>you implicitly assume they have all the neccesary information; if they don't,

I assume they reflect more information than any other publicly available indication of oil prices. Would you care to suggest a better way of making predictions?

>Also, I've read that there's at least one contract out there for more than
>a hundred tons of gold in December at around 30% more than current rates.
>That's a pretty big bet someone's making on gold price increases over
>the next few months. Don't have a URL handy.

Either the contract was made when gold was near $400/oz., or it was made by someone who was too stupid to buy at the market price. Futures prices at Friday's close said:

Oct 99  293.10
Dec 99  294.90
Feb 00  296.10
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