This is something that I don't understand. Oil speculation does give rise to a lot of problems not only in US but also throughout all economies. But what about housing or real estate speculations? They are part of the major forces driving US into the housing crisis and credit crunch for more than one year and yet, I don't hear any news that US Congress is going to curb such speculations to prevent repeating the crises.
One may argue that many speculators whether in oil or real estate or other assets have made so much money that no legislation may effectively deter them. Do you think regulating the banks and mortgage brokers, etc., would help? Well, you don't need to regulate their lending now since they are in trouble and can hardly lend to cause another bubble at least not in the next 6-9 months. So what makes you think that regulating or ending oil speculations may be effective?
One very funny question is why is the legislature always act so late? We have seen the housing bubble for years in US and we have seen oil prices rising for years too. No legislature takes any real action to prevent the dire consequences that we are bearing today! And when we are all getting poorer everyday, we start to hear that the legislature is considering enacting laws to control speculations. What is the use now?
Again, I must pay great respect to our Central Government in Beijing. Immediately after the earthquake in May, our Central Government started to prohibit market speculations on fuel, food and other resources supplies to ensure and safeguard the provision of relief and livelihood of our people. This is what we need from a reliable and competent government.
I must take this chance to pay great respect to our Central Government for curbing the stock speculations in Shanghai and Shenzen. Foreign speculators and inexperienced local speculators have been playing a deadly game in such speculations. Good men have issued warnings against such irrational exuberance many times but people always ignore. Remember our richest man in Asia, Mr. Li Ka Shing, has also warned you speculators against the risks and consequences. So there is no reason why our Central Government should bail out these speculators. If we allow them to go on like that in China, our Chinese economy will be ruined by them at the end! We are Chinese and we don't want our stock markets to be manipulated by ruthless gamblers and speculators.
Hong Kong is a very good example of the price you must pay for stupidity. Last August when the Hong Kong Stock Casino suffered a stock disaster, people should stop speculations and shed everything. But speculators were not stupid; they invented a story that our Central Government had approved to allow all Chinese in Mainland China to directly buy stocks in the Hong Kong Stock Casino. As a result, many victims climbed up the falling ladder thinking that they would all go to heaven. Yes, they did but it turned out that heaven did not allow speculators and their victims to enter the Gate! Now these clever guys are drifting in the Inferno waiting for their purgatory and may be salvation. Only God can have mercy on them.
Despite all my painful experience in investments, what I can't understand is why can't Mr. Market be more rational? Why does he live on speculations? A healthy growth of our stock market is something that can guarantee all investors good returns and capital gains but this is something that Mr. Market hates. What he wants is to get rich within ONE night! Don't be so childish! Ask Warren Bufffet and you will understand there is no such dream! But may be it is human nature to hold on to such dream and perhaps history has given us the answers. The Great Crash in 1930s, Black Monday in 1987, the Asian financial crises in 1997-98, the explosion of the Hi tech bubble in 2000, the housing and credit crises since 2007....I suppose the list will go on.
God bless us all.
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