Population Statistic: Read. React. Repeat.
Thursday, August 24, 2021

Analyst Ben P. Dell’s unconventional theory of a commodities-trading bubble fueling today’s inflated gas prices is gaining some traction. In what serves as a follow-up and fleshing-out of the concept, Hal Varian invokes storage arbitrage and spot pricing to give backbone to Dell’s analysis:

Mr. Dell’s report specifically cited the rush of new and inexperienced traders into commodities markets as the cause of the current problems. [In 1953, Milton] Friedman’s argument was a long-run argument: speculators who bought high and sold low would be driven out of business.

But there is no reason speculators cannot lose money in the short run, particularly if they are inexperienced. Mr. Dell says that storage facilities are now close to capacity, which will make it more difficult to play the arbitrage game in the future. Indeed, crude oil prices have declined nearly 8 percent in the last two weeks.

If speculators start to worry that the price of oil could soon be significantly lower, some of that stored oil would come back on the market, pushing spot prices down, and offering welcome relief to consumers.

It’s not an outright endorsement of a bubble theory accounting for gasoline’s price rise, but it certainly verifies the contributing factors. Looks like Varian’s on board.

The amateurs are to blame for price inflation at the pumps. It looks like they’ll be responsible for the expectant pop.

by Costa Tsiokos, Thu 08/24/2006 11:37:39 PM
Category: Business
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I can only assume that Rite Aid’s agreement to absorb the Brooks/Eckerd drugstore group for $2.6 billion will result in the disappearance of both the Brooks and Eckerd store brands.

If so, as an alumus of Eckerd College, I’m happy as a clam. Not that I encountered many instances when someone would ask, upon finding out where I went to school, why I decided to go into pharmaceuticals. And the withdrawal of Eckerd stores from Florida, combined with their rather thin presence in New York (as far as I’ve seen), pretty much eliminated that possibility anyway. Still, I’d rather there be one, and only one, Eckerd brandname out there.

Now, I’ve got to cross my fingers that my alma mater doesn’t pull a fast one and rename itself “Rite Aid Tech” or something…

It was questionable that the Jean Coutu Group persisted with the Eckerd brand after buying the remains of the operations in 2004, when CVS simply assimilated its half under its own banner right away (including in Florida, where Eckerd Drugs started its life). The chain’s expansion up the East Coast didn’t build much equity, and ultimately put the company in a position where it had to sell itself off. Now, less than a decade later, it’s about to be snuffed out completely.

by Costa Tsiokos, Thu 08/24/2006 08:17:27 AM
Category: Business, College Years, Florida Livin'
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c for sea
Mucho kudos go to the anonymous headline writer at the otherwise rinky-dink Beaver County Times & Allegheny Times. While every other news outlet ran this AP story about Sid Crosby ascending to a leadership position with the Pittsburgh Penguins, with the team captaincy a possibility this season, with the staid hed “With Lemieux gone, Penguins are clearly Crosby’s team”, the BCT&AT got creative with:

Young man and the ‘C’

A pun on Ernest Hemingway’s “The Old Man and the Sea”. I love it.

But maybe I have a soft spot for this particular literary reference. I also dug it when it was used for the title of Sheila Finch’s alternate history short story “The Old Man and C”, about Albert Einstein’s early life decision to pursue musical instruction instead of physics.

by Costa Tsiokos, Thu 08/24/2006 08:08:07 AM
Category: Creative, Hockey, Publishing
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