This is a unique commodity in that it literally falls from the sky. I don’t believe we have any tradable commodities that can be obtained, rather easily, for free. Yes, I know we’re talking about massive amounts of water and aquifers, but I can picture Wall Street banks setting up huge rain catchers and desalination plants to try and profit from this market.
CME, Nasdaq to Launch Water Futures Contract
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Re: CME, Nasdaq to Launch Water Futures Contract
#12Oh goody! Nothing like the financialization of life-necessities to warm the cockles of the heart of big capital.
This might make it easier to quantify the effects of groundwater depletion and climate change. If we see that futures priced further out are more expensive, that says something. In general, by the time something gets to being turned into financial instruments like this, the actual step from whatever state it was in prior to a regulated, standardized, liquid, public contract is generally good. Light is an excellent di…
Except the market will lack perfect information, likely not price in long-term environmental damage, and encourage wealth hoarding via the literal pooling of wealth. Then you'll get crazy speculation, with the markets experiencing adverse liquidity events resulting in spectacular splash crashes afterward.
Markets quite often do not help usher in eras of rationale and logic. A lot of that goes out the window when "there's money to be made".
Re: CME, Nasdaq to Launch Water Futures Contract
#13This is a unique commodity in that it literally falls from the sky. I don’t believe we have any tradable commodities that can be obtained, rather easily, for free. Yes, I know we’re talking about massive amounts of water and aquifers, but I can picture Wall Street banks setting up huge rain catchers and desalination plants to try and profit from this market.
Potable water and desalination is a very expensive problem.
Re: CME, Nasdaq to Launch Water Futures Contract
#14Re: CME, Nasdaq to Launch Water Futures Contract
#15This is a unique commodity in that it literally falls from the sky. I don’t believe we have any tradable commodities that can be obtained, rather easily, for free. Yes, I know we’re talking about massive amounts of water and aquifers, but I can picture Wall Street banks setting up huge rain catchers and desalination plants to try and profit from this market.
That isn’t how commodity markets (which aren’t on wall st btw) work. The traders don’t now frames or, except by mistake, barges fill of coal; they sit in the middle and rarely touch it.
A farmer can sell their crop before it has grown to improve cash flow, chocolate companies can buy cocoa that they will need next year so they have a predictable price and these guys sit in the middle.
Re: CME, Nasdaq to Launch Water Futures Contract
#16Oh goody! Nothing like the financialization of life-necessities to warm the cockles of the heart of big capital.
Because (heating) Oil and Pork Belly weren't life necessities?
Re: CME, Nasdaq to Launch Water Futures Contract
#17Michael Burry was way ahead on this too.
Also, fun to see the expected seething at anything related to finance here :)
Re: CME, Nasdaq to Launch Water Futures Contract
#18Earlier quoted context omitted.
This might make it easier to quantify the effects of groundwater depletion and climate change. If we see that futures priced further out are more expensive, that says something. In general, by the time something gets to being turned into financial instruments like this, the actual step from whatever state it was in prior to a regulated, standardized, liquid, public contract is generally good. Light is an excellent di…
Except the market will lack perfect information, likely not price in long-term environmental damage, and encourage wealth hoarding via the literal pooling of wealth. Then you'll get crazy speculation, with the markets experiencing adverse liquidity events resulting in spectacular splash crashes afterward. Markets quite often do not help usher in eras of rationale and logic. A lot of that goes out the window when "the…
I do not understand your point as these contracts are settled in cash. Do you care to elaborate?
Re: CME, Nasdaq to Launch Water Futures Contract
#19Oh goody! Nothing like the financialization of life-necessities to warm the cockles of the heart of big capital.
The previous situation where almond farmers got unlimited water for free and some cities couldn't get enough water at any price was worse.
Re: CME, Nasdaq to Launch Water Futures Contract
#20Earlier quoted context omitted.
Except the market will lack perfect information, likely not price in long-term environmental damage, and encourage wealth hoarding via the literal pooling of wealth. Then you'll get crazy speculation, with the markets experiencing adverse liquidity events resulting in spectacular splash crashes afterward. Markets quite often do not help usher in eras of rationale and logic. A lot of that goes out the window when "the…
I do not understand your point as these contracts are settled in cash. Do you care to elaborate?
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