space_cowboy
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Re:Its a GAS GAS GASsssssssss
2011/06/02 21:52:25
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bapu
End of thread?
Wasn't trying to be a d!ck. I just like the facts.
Some people call me Maurice SPLAT Pro lifetime, ADK 6 core 3.6Ghz with 32 GB RAM, SSD 1TB system drive, 3 3TB regular drives for samples, recordings and misc. Behringer X Touch, UAD Apollo Quad. 2 UAD2 Quads PCI (i think - inside the box whatever that is), Console 1. More guitars (40??) and synths (hard and soft) than talent. Zendrum!!!
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bapu
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Re:Its a GAS GAS GASsssssssss
2011/06/02 21:54:01
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space_cowboy
bapu
End of thread?
Wasn't trying to be a d!ck. I just like the facts.
I meant it in a good way. Like: all the facts are here. Speculation by the masses is usually wrong in a complex equation like this.
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bapu
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Re:Its a GAS GAS GASsssssssss
2011/06/02 21:55:20
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bapu
space_cowboy
bapu
End of thread?
Wasn't trying to be a d!ck. I just like the facts.
I meant it in a good way. Like: all the facts are here. Speculation by the masses is usually wrong in a complex equation like this.
IOW, no need to beat a dead horse!?!
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Beagle
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Re:Its a GAS GAS GASsssssssss
2011/06/02 21:55:44
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space_cowboy
Beagle
as long as the oil companies are allowed to price gasoline based on oil futures we will never have peace in the market. no other high volume consumer product is based on futures because the public supply and demand will not allow it. I find it absolutely inexcusable to pay for gasoline based on what someone thinks the price of oil will be in the future. absolutely asinine.
Beagle
That is not correct. These are traded on the various futures exchanges
Corn
Oats
Rice
Soy
Wheat
Cocoa
Coffee
Cotton
Sugar
Orange Juice
Hogs
Pork Bellies (BECAN!)
Cattle
That is just part of it.
I gladly stand corrected by a more knowledgable person! I still think that basing prices on futures is a very bad policy.
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Guitarhacker
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Re:Its a GAS GAS GASsssssssss
2011/06/02 22:00:00
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+1 to post 27 by Space Cowboy....
excellent points, and great charts that explain it very well.
My website & music: www.herbhartley.com MC4/5/6/X1e.c, on a Custom DAW Focusrite Firewire Saffire Interface BMI/NSAI "Just as the blade chooses the warrior, so too, the song chooses the writer "
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space_cowboy
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Re:Its a GAS GAS GASsssssssss
2011/06/02 22:00:25
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Guitarhacker
Although futures prices come into play but I believe the greater market mover is the old supply and demand factor.
Unrest in the middle east affects the supply. Wars and revolutions tend to disrupt the supply chain. Demand continues to rise, and with limited supply, the price will rise with unrest and potential supply disruptions.
The futures traders are simply taking all this into consideration as they try to guess the price of oil in 2 months or 6 months down the road.
As long as we continue to set on our hands and do nothing to increase our own supply, the price will continue to rise. China and India are both starting to come on line as huge oil users. China has deals with several of the South American oil producing countries and are also talking with Cuba about drilling the gulf. We currently produce about 20% of our own oil, down quite a bit from a few decades back.
we have the ability and the oil fields within our borders to supply ALL the oil, gas, and coal needs of America for the next 100+ years, and be an exporter at the same time. My guess is that by the time we begin to run out in 80 to 100 years from now, cold fusion, solar, and geothermal will be developed and able to supply the needs of the fossil fuels we now need. There may even be other sources of power that we can not imagine now. 100 years ago who would have seen the technological advances we now take for granted.
For now, we should use what we have.
As a note.... notice that when the Libyan invasion began, Saudi Arabia commented that they would increase the output to "keep the prices down" ....so.... if they can do that.... it begs the question why don't they pump to capacity ALL the time to lower the world's energy prices? If you know that YOU are one of the only sources of oil (OPEC) you can pretty much set the prices as you wish.
You got it right. Except at the current consumption of natural gas, we have nearly 400 years of supply. This chart floors me. Why we are not switching to Natural Gas for everything is beyond me. Wind and solar and nuke dont get it. 
Some people call me Maurice SPLAT Pro lifetime, ADK 6 core 3.6Ghz with 32 GB RAM, SSD 1TB system drive, 3 3TB regular drives for samples, recordings and misc. Behringer X Touch, UAD Apollo Quad. 2 UAD2 Quads PCI (i think - inside the box whatever that is), Console 1. More guitars (40??) and synths (hard and soft) than talent. Zendrum!!!
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space_cowboy
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Re:Its a GAS GAS GASsssssssss
2011/06/02 22:08:05
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auto_da_fe
1) Oil companies make huge winfall profits and then get billions in tax breaks and credits. (Blame lobbying and the cost of getting elected)
2) Gas prices ratchet up very, very fast based on speculation and never really ever go back down. (Blame #3)
3) We Americans would rather drive short distances than walk or ride. My son and I ride bikes to little league all the time. Other kids ask my kid if our car is broken or we are too poor to own a car. (Blame the fact that from a very young age we are taught that our self worth is wrapped up in how much we wastefully consume....kind of a life long Potlatch)
In short we are addicted and the pusher man knows it.
JR
Again, the facts are that national oil companies like Saudi Aramco and Gazprom and Venezuela's PDVSA own like 97% of the world's reserves of crude oil. Point 1 does not hold up to that.  And Windfall compared to what? Your beer, your pills? Oil company profit margins are abysmal. The thought that they are raking in windfalls is not correct. I do not know of many businesses that could routinely run on 5% or so profit margins.  And the tax breaks - they are exactly the same tax breaks given to other manufacturers - merely depreciation allowances - not subsidies. http://news.yahoo.com/s/csm/20110512/ts_csm/383661_1 $44Billion??? When the national debt is $14 Trillion? It is below the noise level. GE alone had tax savings of nearly that much and they are totally aligned with the Obama administration.
Some people call me Maurice SPLAT Pro lifetime, ADK 6 core 3.6Ghz with 32 GB RAM, SSD 1TB system drive, 3 3TB regular drives for samples, recordings and misc. Behringer X Touch, UAD Apollo Quad. 2 UAD2 Quads PCI (i think - inside the box whatever that is), Console 1. More guitars (40??) and synths (hard and soft) than talent. Zendrum!!!
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Starise
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Re:Its a GAS GAS GASsssssssss
2011/06/02 22:10:04
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Intel 5820K O.C. 4.4ghz, ASRock Extreme 4 LGA 2011-v3, 16 gig DDR4, , 3 x Samsung SATA III 500gb SSD, 2X 1 Samsung 1tb 7200rpm outboard, Win 10 64bit, Laptop HP Omen i7 16gb 2/sdd with Focusrite interface. CbB, Studio One 4 Pro, Mixcraft 8, Ableton Live 10 www.soundcloud.com/starise Twitter @Rodein
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space_cowboy
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Re:Its a GAS GAS GASsssssssss
2011/06/02 22:10:54
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One other thing - we tax corporations too much. We are losing corporations to other countries where taxes are much lower. Those jobs are going and the tax income is going too. 
Some people call me Maurice SPLAT Pro lifetime, ADK 6 core 3.6Ghz with 32 GB RAM, SSD 1TB system drive, 3 3TB regular drives for samples, recordings and misc. Behringer X Touch, UAD Apollo Quad. 2 UAD2 Quads PCI (i think - inside the box whatever that is), Console 1. More guitars (40??) and synths (hard and soft) than talent. Zendrum!!!
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Starise
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Re:Its a GAS GAS GASsssssssss
2011/06/02 23:07:32
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Thanks for sharing all of that info....very helpful!!
One thing I was attempting to say but successfully failed in saying is that we Americans are always talking about going green and conservation. Saving the planet and protecting our environment.
How are we putting our words into actions when we buy cars that only one person will ride in that guzzle gas? No matter what the world markets are doing or if oil is up or down,we are missing the point.The ability to waste something doesn't mean we should just because its the thing to do or because the herd does it IMO.
When you always have something it is easy to take it for granted. Will it take going without it for some to realize how precious it all really was?
Remember the buffalo slaughters in the 1800's in the midwest? The traders shot literally thousands of buffalo because they wanted the hides. A lot of them were shot just because they could be.
Is this how we want to be remembered? We wasted everything until it was all gone or became hard to come by.We never considered tomorrow or thought about the implications of what we did?
Intel 5820K O.C. 4.4ghz, ASRock Extreme 4 LGA 2011-v3, 16 gig DDR4, , 3 x Samsung SATA III 500gb SSD, 2X 1 Samsung 1tb 7200rpm outboard, Win 10 64bit, Laptop HP Omen i7 16gb 2/sdd with Focusrite interface. CbB, Studio One 4 Pro, Mixcraft 8, Ableton Live 10 www.soundcloud.com/starise Twitter @Rodein
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craigb
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Re:Its a GAS GAS GASsssssssss
2011/06/03 02:50:52
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Beagle
space_cowboy
Beagle
as long as the oil companies are allowed to price gasoline based on oil futures we will never have peace in the market. no other high volume consumer product is based on futures because the public supply and demand will not allow it. I find it absolutely inexcusable to pay for gasoline based on what someone thinks the price of oil will be in the future. absolutely asinine.
Beagle
That is not correct. These are traded on the various futures exchanges
Corn
Oats
Rice
Soy
Wheat
Cocoa
Coffee
Cotton
Sugar
Orange Juice
Hogs
Pork Bellies (BECAN!)
Cattle
That is just part of it.
I gladly stand corrected by a more knowledgable person!
I still think that basing prices on futures is a very bad policy.
I was going to comment about your original post Beagle, but Space Cowboy beat me to it. I used to trade commodities for a few years and there are literally hundreds of them, though I would focus on 28 that were the most liquid for speculators. Some markets, like amonia gas for example, are only filled with sellers of the gas and end buyers, but others like wheat and soybeans only have about 3% of actual sellers and buyers with the other 97% being speculators hoping to make a buck (most won't). Personally, I think if you were to really find out more about how the action takes place and why, you'd probably flip your opinion around 180 degrees. Sure, it's popular to blame the futures market right now, but without it all prices would be dictated behind the scenes and you would have much wilder extremes in the end costs. Speculators are why you can buy a loaf of bread today for $2.49 (as an example) and tomorrow, or next week, it will probably be about $2.49. Without speculators, you might find a loaf of bread today for $4.12, then tomorrow for $2.25, then next week for $3.61, then who knows! One extra aspect about the price of gasoline is that original commodity (sweet crude for example) makes up a relatively small portion of the price. After that you need to get the oil to the refinery, refine it, then distribute it - along with a bunch of added taxes. Ironically, the price of gas going up helps cause the price of gas to go up because the extra cost of shipping it gets passed on! On a separate note, one thing that's become a bit of a pet peeve of mine is having to see that extra "9" at the end of the price for a gallon. Really? The stuff goes up and down by 3 and 8 cent jumps now-a-days and we still have to see that 9/10's of a penny? It's not like you EVER see "3.927 per gallon" anywhere. Not sure who they're trying to fool anymore, I just think it's dumb.
Time for all of you to head over to Beyond My DAW!
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Guitarhacker
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Re:Its a GAS GAS GASsssssssss
2011/06/03 08:25:28
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In many states, due to the level of gas/highway taxes on a gallon of gas at the pump, the STATE is making a much larger profit on that gallon then the oil company or the gas station, and easily both combined. Supposedly this tax is supposed to be used to pay for maintaining the roads......
My website & music: www.herbhartley.com MC4/5/6/X1e.c, on a Custom DAW Focusrite Firewire Saffire Interface BMI/NSAI "Just as the blade chooses the warrior, so too, the song chooses the writer "
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Beagle
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Re:Its a GAS GAS GASsssssssss
2011/06/03 08:41:25
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craigb
Beagle
space_cowboy
Beagle
as long as the oil companies are allowed to price gasoline based on oil futures we will never have peace in the market. no other high volume consumer product is based on futures because the public supply and demand will not allow it. I find it absolutely inexcusable to pay for gasoline based on what someone thinks the price of oil will be in the future. absolutely asinine.
Beagle
That is not correct. These are traded on the various futures exchanges
Corn
Oats
Rice
Soy
Wheat
Cocoa
Coffee
Cotton
Sugar
Orange Juice
Hogs
Pork Bellies (BECAN!)
Cattle
That is just part of it.
I gladly stand corrected by a more knowledgable person!
I still think that basing prices on futures is a very bad policy.
I was going to comment about your original post Beagle, but Space Cowboy beat me to it. I used to trade commodities for a few years and there are literally hundreds of them, though I would focus on 28 that were the most liquid for speculators. Some markets, like amonia gas for example, are only filled with sellers of the gas and end buyers, but others like wheat and soybeans only have about 3% of actual sellers and buyers with the other 97% being speculators hoping to make a buck (most won't).
Personally, I think if you were to really find out more about how the action takes place and why, you'd probably flip your opinion around 180 degrees. Sure, it's popular to blame the futures market right now, but without it all prices would be dictated behind the scenes and you would have much wilder extremes in the end costs. Speculators are why you can buy a loaf of bread today for $2.49 (as an example) and tomorrow, or next week, it will probably be about $2.49. Without speculators, you might find a loaf of bread today for $4.12, then tomorrow for $2.25, then next week for $3.61, then who knows!
One extra aspect about the price of gasoline is that original commodity (sweet crude for example) makes up a relatively small portion of the price. After that you need to get the oil to the refinery, refine it, then distribute it - along with a bunch of added taxes. Ironically, the price of gas going up helps cause the price of gas to go up because the extra cost of shipping it gets passed on!
On a separate note, one thing that's become a bit of a pet peeve of mine is having to see that extra "9" at the end of the price for a gallon. Really? The stuff goes up and down by 3 and 8 cent jumps now-a-days and we still have to see that 9/10's of a penny? It's not like you EVER see "3.927 per gallon" anywhere. Not sure who they're trying to fool anymore, I just think it's dumb.
maybe my mind would be changed if I were more educated, but maybe not. I'm still not convinced at this point that pricing of commodities based on futures is a good idea. I'm certain that the fluctuation of gas prices is not solely based on futures, it's way more complicated than that, but I'm also not convinced that it's not a major factor for gasoline. even if futures pricing is good for bread (based on your comments only), that doesn't mean it's good for everything. and as you say, even the shipping of gas causes the price to raise simply because the price is going up! that's a self-perpetuating drive! and there's no real way around that - but again -that's another variable in the cost fluctuations. I do agree with you about the 9/10 cent. that's ridiculous. always has been. makes me feel like those in charge of setting the price have greasy slicked back hair, an obnoxiously loud necktie, a cheap 2nd hand suit, a mouthful of gold plated teeth, rings on every finger and platform shoes. and inside his coat are "Rolex" watches for sale.
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bapu
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Re:Its a GAS GAS GASsssssssss
2011/06/03 08:53:28
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Beagle
greasy slicked back hair, an obnoxiously loud necktie, a cheap 2nd hand suit, a mouthful of gold plated teeth, rings on every finger and platform shoes. and inside his coat are "Rolex" watches for sale. Man, I'm going to have to change my look now. And here I thought having a coat lining of Rolex's was a cool thing.
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UbiquitousBubba
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Re:Its a GAS GAS GASsssssssss
2011/06/03 09:17:38
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Does a greased bald head count? If so, then I'm stylin'.
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Guitarhacker
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Re:Its a GAS GAS GASsssssssss
2011/06/03 09:31:39
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The futures/commodities markets do serve a purpose. They bring stability and liquidity (as mentioned above) to the markets in question. The main question would be are the speculators driving the prices up or down, or are they simply reacting to market conditions? I think, the speculators can obviously affect the markets but they (the specs) are mostly driven by market conditions of perceived supply and demand factors as they see it from their data and sources. A weather forecast for hot dry weather in Brazil will cause fears of drought and a reduced wheat supply so they will hedge their bets on prices rising. As more and more get in to the trades, the price will rise some based on what the traders are doing. The smaller the market, the more pronounced that trader herd mentality effect will be, and the larger the market the less impact it will have. At some point, the traders realize the product is over/under priced for the current market conditions and risk, and the price reverses. Even in extreme cases where the herd mentality takes over and runs prices up or down beyond market/real world factors, at some point, reality sets in, supply and demand take over and the price returns to the "real market value". Unless there are some sort of extenuating circumstances, prices will typically remain in a "trading range" until an event triggers the beginning of a move up or down. Nothing ever stays low or high for long, especially when the movement is extreme. It happens time and time again. Last time the gas prices rose so high, they suddenly crashed to the lowest they had been in years.... we went from $4+ to around $1.60 in a matter of a few months. Basically from one extreme to another, then they settled out and began a rise again based on the real world factors of supply and demand. I have seen this happen over the years with corn, orange juice, soybeans, and gas..... a freeze or a drought or a war triggers real world shortages and the race for the top begins. One thing I'm watching with morbid curiosity is the price of Gold. It has never been this high before in recorded history. Will it continue to climb or has it reached the top this time? Last time when it hit $800 back in the 80's it plunged from those prices rapidly once the economy was stabilized a bit. All the way down to $300 or so.... ( don't have exact numbers) It could possibly go higher if the world economy and especially the US economy continues to do poorly. If the dollar collapses or gets replaced by some other currency as the world reserve currency ( as is being discussed by several major financial players now) we could easily see it double or triple from where it is today (around $1500/ounce) BUT..... if someone figures out how to stabilize the dollar and get this economy moving again...really moving..... the price of Gold will collapse overnight back to a "more normal" price value. It would not be out of the question to see it again at $300 an ounce for a short period of time as the market over corrects on the lower side.
post edited by Guitarhacker - 2011/06/03 09:32:49
My website & music: www.herbhartley.com MC4/5/6/X1e.c, on a Custom DAW Focusrite Firewire Saffire Interface BMI/NSAI "Just as the blade chooses the warrior, so too, the song chooses the writer "
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Danny Danzi
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Re: Its a GAS GAS GASsssssssss
2011/06/03 09:36:12
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SteveStrummerUK
The pump price of regular unleaded petrol around here is currently the equivalent of $10.11 a gallon (£1.36 per litre) 
I would absolutely love to be paying $4 (£2.45) a gallon 
I dunno Steve, doesn't it all come out to about the same when both countries include other stuff? Like for example, you guys don't pay for health care, right? I was $4.13 per gallon at the pumps last week, and $560 per month for my health insurance. Property taxes and car insurance (no matter what you drive or what house you own) are pretty incredible here. I'm sure you guys have some stuff over there that makes 10 quid per litre horrible...but we're probably all in the same boat at the end of the day. I sure would love to stop paying for my health care and would STILL be saving money if I were paying $10 per gallon. My car is actually fabulous when driven like a car instead of a rocket ship and I fill up once per week using the best gas at $45.00 per tank. The 6th gear makes a huge difference doing 65 MPH at like 1400 on my tach. So even if it went up to $10 per gallon and it cost me $100 per week, I'd still have $160 left over from not paying for health insurance. :)
My Site Fractal Audio Endorsed Artist & Beta Tester
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craigb
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Re:Its a GAS GAS GASsssssssss
2011/06/03 16:09:43
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Guitarhacker
One thing I'm watching with morbid curiosity is the price of Gold. It has never been this high before in recorded history. Will it continue to climb or has it reached the top this time? Last time when it hit $800 back in the 80's it plunged from those prices rapidly once the economy was stabilized a bit. All the way down to $300 or so.... ( don't have exact numbers) It could possibly go higher if the world economy and especially the US economy continues to do poorly. If the dollar collapses or gets replaced by some other currency as the world reserve currency ( as is being discussed by several major financial players now) we could easily see it double or triple from where it is today (around $1500/ounce) BUT..... if someone figures out how to stabilize the dollar and get this economy moving again...really moving..... the price of Gold will collapse overnight back to a "more normal" price value. It would not be out of the question to see it again at $300 an ounce for a short period of time as the market over corrects on the lower side.
Me too - I love all these commercials telling everyone to buy gold. If I have my trading account and software still going I'd probably be watching to short it soon. I was controlling several million dollars worth of gold back in 1999 when the price was down around $300 as you said. I got in at either 310 or 320 on all my lots and made quite a bit (would have been more but my target price, 406 I believe?, was too greedy - missed it by only a couple of dollars and that cost me about $800k in profits because, after the spike, the price settled lower...). The main point about commodities versus stocks is that each commodity is backed by a real item (at a specific quantity and quality) - not human fear and greed and, as such, it can not be worth zero. That said, when any of the metals start to get really low (like gold did around $300), the world stops mining it because they can't make any money. Needless to say, that reduces the supply and the price has to go up.
Time for all of you to head over to Beyond My DAW!
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Guitarhacker
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Re:Its a GAS GAS GASsssssssss
2011/06/03 16:27:06
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when everybody says buy... the smart man should be looking to sell. don't be greedy. leave some on the table and get out with what you have. a profit is a profit. Like Steve Miller says: Go on take the money and run!
post edited by Guitarhacker - 2011/06/03 16:28:50
My website & music: www.herbhartley.com MC4/5/6/X1e.c, on a Custom DAW Focusrite Firewire Saffire Interface BMI/NSAI "Just as the blade chooses the warrior, so too, the song chooses the writer "
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craigb
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Re:Its a GAS GAS GASsssssssss
2011/06/03 16:33:11
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You know what they say... Experience is something you think you have until you get more of it!
I got some serious experience from that lesson...
Time for all of you to head over to Beyond My DAW!
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space_cowboy
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Re: Its a GAS GAS GASsssssssss
2011/06/03 17:04:25
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Danny Danzi
SteveStrummerUK
The pump price of regular unleaded petrol around here is currently the equivalent of $10.11 a gallon (£1.36 per litre)
I would absolutely love to be paying $4 (£2.45) a gallon
I dunno Steve, doesn't it all come out to about the same when both countries include other stuff? Like for example, you guys don't pay for health care, right? I was $4.13 per gallon at the pumps last week, and $560 per month for my health insurance. Property taxes and car insurance (no matter what you drive or what house you own) are pretty incredible here. I'm sure you guys have some stuff over there that makes 10 quid per litre horrible...but we're probably all in the same boat at the end of the day. I sure would love to stop paying for my health care and would STILL be saving money if I were paying $10 per gallon. My car is actually fabulous when driven like a car instead of a rocket ship and I fill up once per week using the best gas at $45.00 per tank. The 6th gear makes a huge difference doing 65 MPH at like 1400 on my tach. So even if it went up to $10 per gallon and it cost me $100 per week, I'd still have $160 left over from not paying for health insurance. :)
That's a vet, right Danny? I have a 67 Shelby Cobra GT500 in my garage - 427 police interceptor with dual 4bbl hollies. It gets about 7 MPG when you drive it normally (which I never do). It has a 14 or so gallon tank. It was meant to eat leaded gasoline.
Some people call me Maurice SPLAT Pro lifetime, ADK 6 core 3.6Ghz with 32 GB RAM, SSD 1TB system drive, 3 3TB regular drives for samples, recordings and misc. Behringer X Touch, UAD Apollo Quad. 2 UAD2 Quads PCI (i think - inside the box whatever that is), Console 1. More guitars (40??) and synths (hard and soft) than talent. Zendrum!!!
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space_cowboy
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Re:Its a GAS GAS GASsssssssss
2011/06/03 17:15:09
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craigb
Guitarhacker
One thing I'm watching with morbid curiosity is the price of Gold. It has never been this high before in recorded history. Will it continue to climb or has it reached the top this time? Last time when it hit $800 back in the 80's it plunged from those prices rapidly once the economy was stabilized a bit. All the way down to $300 or so.... ( don't have exact numbers) It could possibly go higher if the world economy and especially the US economy continues to do poorly. If the dollar collapses or gets replaced by some other currency as the world reserve currency ( as is being discussed by several major financial players now) we could easily see it double or triple from where it is today (around $1500/ounce) BUT..... if someone figures out how to stabilize the dollar and get this economy moving again...really moving..... the price of Gold will collapse overnight back to a "more normal" price value. It would not be out of the question to see it again at $300 an ounce for a short period of time as the market over corrects on the lower side.
Me too - I love all these commercials telling everyone to buy gold. If I have my trading account and software still going I'd probably be watching to short it soon.
I was controlling several million dollars worth of gold back in 1999 when the price was down around $300 as you said. I got in at either 310 or 320 on all my lots and made quite a bit (would have been more but my target price, 406 I believe?, was too greedy - missed it by only a couple of dollars and that cost me about $800k in profits because, after the spike, the price settled lower...).
The main point about commodities versus stocks is that each commodity is backed by a real item (at a specific quantity and quality) - not human fear and greed and, as such, it can not be worth zero. That said, when any of the metals start to get really low (like gold did around $300), the world stops mining it because they can't make any money. Needless to say, that reduces the supply and the price has to go up.
I have no idea how to value gold. I own some shares in a South American gold mining company that i got for free (complicated story) and I have never sold them. Got them at $1/share. it is about $1/share now. Last month they started producing gold. For the last 8 years, they just issued more and more stock. I was counting on this being $10 by now. Instead, there are 10x as many shares out. I cannot deal with speculation like there is in Gold. At least with Silver, there is a consumption cycle. You bring up a good point on $300 and less - stopping mining. I have a chart somewhere on Oil. Now that we are at 90MM BPD worldwide, we need $75/Bbl to deal with that last 1MM BPD of consumption. Below $75, the Canadian Oil Sands, certain deepwater off Africa, a few of the oil shales - nobody replaces production. My basic model is this--> if the market were ever in equilibrium, you need $75/Bbl to replace the most expensive barrel produced. Anything above that is speculation. So at $100/Bbl, what justifies the $25 premium? For those of you that are math savvy Assume that there is an 80% probability that there will be no political or violence issues in the major oil producing countries. With equilibrium, oil has to be $75 to replace that last barrel. Assume there is a 20% probability of violence or political instability in Nigeria, Venezuela, Libya, Iran, Iraq, ... add any countries you want... Weather related disruptions in the US, West Africa Permit delays in the US impacting production Whatever factors that are risks. And if those risks would drive oil to $200 (I am making this up right now, but you can get the flow) The expected value is $75*80% + $200 * 20%. That =$100. Speculators and traders do nothing more than assign those probabilities and the upside prices. If the world were at peace, there would not be a premium. Gold is being valued as a hedge against the further fall of the dollar. Those of you who do not read financial and political stuff, the dollar has collapsed and seems poised for much worse times than better. That means higher oil too.
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auto_da_fe
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Re:Its a GAS GAS GASsssssssss
2011/06/03 19:44:12
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If a 5% gross margin makes me 10 billion profit in a quarter, I will take some of that action everytime. I think Walmart has even lower gross margin but they make billions too, so gross margin or profit margin is not really an indication of much.
And "the corporate tax rate" does not mean very much. If my tax rate is 50% and at the end of the day I hand 0.00$ over to the governement because of credits or loopholes (or in most cases get credits I can use against future income) than is my tax rate really 50% ??? So tell me how much a company made (income) and how much they actually handed over to uncle sam and then we can talk tax rates.
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space_cowboy
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Re:Its a GAS GAS GASsssssssss
2011/06/04 08:33:43
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According to Exxon Mobil's financial results, they paid $5.7 billion in CASH income taxes and $7.9 billion in sales-based and other taxes in Q1 2011. This is not what they REPORTED on their income statement, but what they PAID out in taxes. This is on file with the SEC on XOM's 10q from the quarter ending 3/31/11. Every publicly traded company is required to file both the effective taxes on their income statement and the actual taxes paid on their statements of cash flows. THis is one of those areas where popular beliefs and reality are very different. As I said earlier, I work in energy economics. I do this stuff for a living. It pays for my gear. There is this belief that somehow everyone is entitled to cheap gasoline and if it is not, then oil companies must somehow be punished. I find it amazing that nobody feels the same about their beer, tobacco, food.... 2 years ago, many of the companies in the oil and gas business were losing their a$$e$. Nobody came out then and said "prices are too low - lets help these guys".
post edited by space_cowboy - 2011/06/04 08:38:36
Some people call me Maurice SPLAT Pro lifetime, ADK 6 core 3.6Ghz with 32 GB RAM, SSD 1TB system drive, 3 3TB regular drives for samples, recordings and misc. Behringer X Touch, UAD Apollo Quad. 2 UAD2 Quads PCI (i think - inside the box whatever that is), Console 1. More guitars (40??) and synths (hard and soft) than talent. Zendrum!!!
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Jonbouy
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Re:Its a GAS GAS GASsssssssss
2011/06/04 08:56:38
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2 years ago, many of the companies in the oil and gas business were losing their a$$e$. Nobody came out then and said "prices are too low - lets help these guys". +1 Much like over here where most supermarket chains offer cheaper fuel than the bona fide oil company operated gas stations for example by giving money off fuel for every £50 spent in the supermarket. Everybody thinks that is OK today and will suggest going to the supermarket for gas, until of course they've made every other gas station close down then these same people will complain because the supermarkets then have a monopoly and can charge what they like. Who will have caused that, the Supermarkets, the oil companies, the money markets or the 'herd'? There's so little margin selling gas these days that gas stations have to sell groceries to get by, and when one of those closes down guess who buys up the land dispenses with the gas station totally and opens up a convienience store in it's place. Yup the supermarket chains, who already have proven an excellent record for marshalling the 'herd' out of diverse local stores and operating a monopoly in malls and out of town Mega stores where nowadays you can only buy what they want to stock at whatever prices they set.
post edited by Jonbouy - 2011/06/04 09:11:56
"We can't do anything to change the world until capitalism crumbles. In the meantime we should all go shopping to console ourselves" - Banksy
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Starise
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Re:Its a GAS GAS GASsssssssss
2011/06/05 12:52:17
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Ah, Jonbouy the Wal Mart strategy to a tee................lower prices and large selection force smaller local business under. I personally witnessed that happen when one went up about 10 miles from my house.
Can't blame a guy for wanting to save a buck but THEN when there is no longer any competition. They can afford to gradually RAISE prices because they have monopolized the area.
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Jonbouy
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Re:Its a GAS GAS GASsssssssss
2011/06/05 13:04:24
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Starise
Ah, Jonbouy the Wal Mart strategy to a tee................lower prices and large selection force smaller local business under. I personally witnessed that happen when one went up about 10 miles from my house.
Can't blame a guy for wanting to save a buck but THEN when there is no longer any competition. They can afford to gradually RAISE prices because they have monopolized the area.
Embrace, extend and extinguish I believe it is called...  It's that part in a capitalist society, corporate dictatorships, that need keeping in check by at least some elected governmental intervention, as we've seen time and again the money men and bankers will cover themselves in a crisis without compassion whatsoever to whatever general populous has been providing their 'boom' times when the bubble bursts. And without fail whenever greed is involved the bubble will always burst. Free trade is a great thing, exploitation is quite another animal.
post edited by Jonbouy - 2011/06/05 13:19:10
"We can't do anything to change the world until capitalism crumbles. In the meantime we should all go shopping to console ourselves" - Banksy
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jamesg1213
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Re:Its a GAS GAS GASsssssssss
2011/06/05 13:05:40
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Jonbouy
There's so little margin selling gas these days that gas stations have to sell groceries to get by
Indeed - I had no idea just how little margin there was until I asked our local garage/filling station; 0.01p per litre.  Lynne who runs the place says she only has the pumps as a service to the community, and relies on vehicle repairs for her income. By the time she's filled someone's tank and had a little chat about the weather, she's actually losing money by serving them.
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Jonbouy
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Re:Its a GAS GAS GASsssssssss
2011/06/05 13:43:58
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2 years ago, many of the companies in the oil and gas business were losing their a$$e$. Nobody came out then and said "prices are too low - lets help these guys". Likewise, since the height of the 'British Empire' nobody said "prices are too low - lets help these guys" when nations have been plundered and their inhabitants have been paid a pittance to manufacture the 'toys' we enjoy in our 'fair' societies. Now nations like China have learned how to play the same market, have a highly motivated work force that we've made used to doing much for very little and a fantastic manufacturing infrastructure we built there in order they could produce our luxury goods dirt cheap. Yet we cry foul when they emerge looking good at playing the very games we taught them and it must seem real funny to them when we get on the moral high ground about 'human rights' issues when we've had clear policies of keeping them on the poverty line for decades. These times call for some serious thinking about our futures, the times of making up policy to suit the times and spinning our way out of trouble with sound bites and short term gains has been over for a long time now, yet few seem to have cottoned on to it yet.
post edited by Jonbouy - 2011/06/05 14:15:01
"We can't do anything to change the world until capitalism crumbles. In the meantime we should all go shopping to console ourselves" - Banksy
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Jonbouy
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Re:Its a GAS GAS GASsssssssss
2011/06/05 14:12:19
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2 years ago, many of the companies in the oil and gas business were losing their a$$e$. Nobody came out then and said "prices are too low - lets help these guys". Also excuse me while I don't shed a tear over this either. I'm old enough to remember the demise of our own Coal industry and many in the communities here lamented the demise of those communities and the people that worked in them that depended on the very fuel that founded the industrial revolution, all the while some fat Oil men were now famously, proudly displaying their wealth and fluffing up it's bushy tail. None of them said "let's help these guys because that could happen to us one day". Man, Dallas was even on TV during the that time, that is, if you could watch an episode all the way through without a power cut happening (I'm not joking either!)... Oil workers here today also have that hard working ethic and community based structure (although on a much smaller scale) that the miners used to have, I think many of us here have a history of respect for our fuel workers, although those that speculate on their fortunes we are perhaps more cynical toward. Is that a bad thing?
post edited by Jonbouy - 2011/06/05 14:17:14
"We can't do anything to change the world until capitalism crumbles. In the meantime we should all go shopping to console ourselves" - Banksy
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