Oil's Endless Bid: Taming the Unreliable Price of Oil to Secure The Economy

OK - I'm a fan of Dan Dicker...follower of his columns on TheStreet.Com and very happy to say we have traded a few emails from time to time.This is not a book that will help anyone develop or tune a trading system. It may help you evaluate investment opportunities if you're someone who provides funding for capital investments.I found the focus in Oils Endless Bid to be on peeling back the operating mechanics and providing a historical reference of the energy markets evolution. The introduction of technology and discussion of the congressional moves help explain the energy markets transformation along with the consequences, some of which are being felt today. The personal accounts are interesting and are structured similar to the story Jim Cramer outlined in Confession (a fine read): chapter 16 The Trading Goddess Returns.A book like this needs 2 reads. The first to get your feet wet...and the second to peel the finer details back.As someone who runs a PropDesk, I would never expect any "secrets" to have been revealed so don't buy this thinking you're going to get such insights. But if you want a broader understand of the mechanics and a foundation from which you can understand the viewpoints of talking heads. Book is worth a place on your shelf.

Day after day our news media report to us on skyrocketing oil prices and endless environmental, geopolitical side stories. Why is the price of oil going up an endless spiral? Dicker provides an autobiographical, commodities "trading pit" account of what is happening. He uses plain old street language in an attempt to clarify what is hedging, trading, investing, and speculating. And this uncovers the problem he sees with the oil industry. Oil producing companies that might appear to be hedging are actually trading, and Goldman Sachs mysteriously makes oil appear to be something that can be managed like a stock equity. How can they be allowed to do that at the expense of the consumer? Decker teaches readers how to place a "crack spread" bid in all the yelling in your face language on the trading floor. He offers a fully developed theory on why the rules of online, ETF, investment bank commodities trading are no longer on a level playing field.

In a word, this is a fantastic book. Its subject matter, basically what's wrong with the oil market and, to some extent, the rest of the energy industries, is told from the perspective of one who has been in the middle of the trading pits. That's a position from which few such books have been written. The author not only describes how the oil market (literally, the market, not the industry) but also embeds stories of his own career within it. Those stories are not always with Dicker coming out on top and they ring true. Many of the problems in the oil market that Dicker describes, and the order in which he discusses them, facilitate the reader's understanding. The changes in the market wrought by the introduction of the investment banks are thoroughly documented. Dicker's writing style is relaxed and uncomplicated, allowing the reader to focus on the content rather than mere verbiage. His proposed solutions to the problems in the oil market are provocative. I don't know how quickly they could be implemented, but they seem reasonable, well-considered, and full of the insight present in the rest of the book.Of particular note is the chapter on trading. It might seem to be a chapter only for those trading in the oil market. Wonderfully writtten, this chapter should be required reading for all traders, whether in the oil or any other (including equities and bond) markets. The philosophy behind trading, which is quite different from that for long-term (or even short-term for that matter) investing, is explained and the means by which those literally in the market had a built-in edge over anyone outside that market is discussed. One thing not discussed in depth is the impact of electronic trading on this imbalance. Hopefully, that matter will be considered in Dicker's follow-up exposition. I look forward to it, and I'm sure other readers of this insightful description of the machinations of the oil industry will too.A 5 star treat. Perhaps not beach reading, but certainly good for summer's afternoons in the hammock.

I recieved the book on Saturday and it was rainy and cold here in Chicago. So when I took it out of the Amazon box I figured I would puruse it to get some insight on what it contained. Well after five hours I was half way throught the book and could not stop reading it, what a wealth of information. In my humble opinion it is superlative.... For anyone seeking knowledge and wisdom on this subject including our own government officails this is the manuscript to obtain and read; not like the legislation they seem to continue to pass which they know nothing about its consequences such as the "Futures Moderization Act" passed by Clinton. I especially like the way you wrote the book with your wit and your anecdotes. The cover is also very creative with the oil rig serving as one of the letters.. excellent job. I must admit that I did not go to the Wharton School of Business, but none the less the mantra of "commodities are not stocks" will continue to serve me well when trying to explain to individuals who constantly think that it is the greedy oil companies that are forcing the price of oil upwards; but instead as you eloquently point out it is the investment banks, the asset managers and the quest for higher portfolio returns from these individuals and the financial instruments used to "get in on" the oil's endless bid which is a self fullfilling prophecy which will result in the country's demise... in essence we are "eating our own." The book once again is fantastic not at all a typically written dry and boring piece of "academia" with endless statistics and formula's... this is exacly the complete opposite with an insight into the oil world that is truly eye opening and sobering. As you well point out this country can not become properous due to our reliance on this commodity if it is endlessly going to be bid upwards without any ties to the laws of supply and demand.