Las Vegas-"This is one of the biggest new opportunities that I've seen in years," said Rico Imbroglione, when asked about the why and wherefore of the new "Oil Book" at Caesar's in Las Vegas. "This is how it works, my little inexperienced-in-the-ways-of-the-gambling-world friend.
"Now follow me, OK? Oil prices are not rising because of market pressures' as some of these slimeballs in New York are saying. They're rising because of rampant speculation.
Traders at the New York Mercantile Exchange are bidding up the prices on futures contracts for oil. 'Futures' simply meaning that we're talkin' about contracts for oil to be delivered in the near future, like May or June. They don't plan on taking delivery for themselves, OK? It's all a turn-around game.
"And when these slimeballs have already bought their futures contracts, they can make scads of money by continuing to pressure the price of the same futures contracts higher and higher. Capiche?"
"How do they do that?" I said, feigning ignorance. He went on. "It's just like any thing else-if I buy something for X dollars, and then I find some sucker to buy my contract from me at X plus 100 percent then I get rich. The more buzz' there is about it, the more the price goes up. Like the other day-one analyst' says that the price of a barrel can go up to $105. The next day the price goes up more and more. Who do you think won that day?"
"Seems too obvious," I said. "But what happens if the price starts heading south?"
"Simple, chump. God you're dense! Then these same slimeballs solicit even more suckers-calling them and saying Hey! Look at how much these contracts have gone up in the last week! You better buy right now!' and thems that do get stuck with a contract that has already turned south-continues going down, and down, till they lose out. The guys that made all the money on the uptick cash out' on suckers like you who think they're about to cash in-but it's already over by then."
"Sheesh. That's kind of sad in a way," I said. "Now how does Vegas come in to play here?"
"Simple. Every day people bet on oil going up, or oil going down. In order to win say on an uptick they have to beat the spread say 50 basis points per barrel. Every day that changes. Same on oil going down-say for example, they bet on a downward tick, but have to beat the spread of say, 25 basis points. Got it nerd?"
"I think so. But isn't that wrecking our economy?" said I.
"Since when has that ever kept any one from trying to make money?" he said. "You know you just make me sick. Just get out, OK? Out!"