Eggheads vs. “real world nitty-gritty”
I am getting burned out dealing with endless complaints about the way I think about markets. Thus I thought it might be useful to compare my views to what I hear from those down in the trenches. Those who actually know how auction-style markets work. Bob supplied a typical complaint:
The financial instability caused a huge demand for commodities as investment – just look at the USO holdings of futures contracts last spring. Airlines don’t buy ETFs to get their oil.
I’m increasingly coming to the conclusion that academic economists have pretty close to 0 comprehension of how commodity futures markets actually function (this is really not even directed at you Scott). They don’t even understand the theory of futures pricing, let alone the real world nitty-gritty.