Uranium
Dear Liz,
Why is the uranium market so illiquid?
-Phillip Old Man’s Apartment, NY
Dear Phil,
Back in November of 1985, Doc Brown was forced to broker with Libyan terrorists to power his flux capacitated DeLorean. Though he was trading plutonium, uranium fuel bundles aren’t bundles easier to trade.
As Phil points out, everyone is aware that the uranium market is not liquid. No one says it is. No one makes that mistake.
But why??
For one thing, it’s not traded in a commodity exchange, it’s bought and sold by crazy, wild-eyed old scientists for time machines, so there are scant speculators ensuring liquidity. Sometimes, the buyer may be a kid who shows up asking questions about this Sports Almanac, and if that ever happens… he’s going to unhinge the market and unravel the very fabric of space-time.
A commodities exchange would attract market makers, hedging uranium without handling it, increasing market stability. We‘d all want to get in on it. Enron never traded uranium. Nobody mentions that when they talk about Enron.
Why aren’t there uranium futures contracts?
I don’t know.
This may be the narrow view.
Listen, I’m an insider. I call uranium U when I need to make a point and I’m short on time. I say, U needs to be like the other markets. U needs an exchange. It’s like drugs. If you legalize drugs, only law abiders will have drugs — where law abiders applies to drug possession. The point is, we will all have some. So someone (Phil: you) should take preliminary measures and call People magazine or US magazine saying U is a fun shade for spring 2007.
Back to uranium futures.
Yellowcake is a fun cake for spring,
-Me
