When I was roofing we did very many government jobs. One happened to be a PA. Turnpike building. There was a very nice older guy from the state that stopped in to check progress, inspect the work etc. He would stop by and after checking the progress, we would BS a bit about everyday stuff, money etc.
One discussion we had was govnmt spending & Turnpike tolls. He stated that the Turnpike could never show a profit. If they did, they would have to lower tolls, which would never be allowed to happen. Then he explained how the TP does make alot of money. And to keep the tolls up and also keep the tax funding growing each year there was many ways the TP alone would facilitate this. One such particular event he told about was the TP had a bunch of brand new snow plows for the TP trucks. Never used, the end of the TP fiscal year was coming up and the next years funding plan along with it. They took those brand new, never used plows and cut them up with torches, and scrapped them. He didn’t go into every way they made a need for more funding. But did say the TP made sure next years funding package would always grow higher than the previous years.
You may be happy that fuel & fuel tax keeps going up so that you stocks value rises. But keep in mind that as fuel prices & taxes rise, so does the cost to ship goods & transportation related services. So some of those dividends your making are going right back towards paying for the rise in transportation related goods & services every time you purchase something.
And it does have a domino effect. Those driver’s are making less & less, consumer goods costs rise, just to get back & forth to work gets more & more expensive, even petroleum based products, plastics, lubricants, etc, etc, etc raise in cost. and on & on & on.
Now yes this is normal to a point, its business. But when taxes rise faster or higher then normal, and as we all know pay raises do not even come near to even make a dent. Thats where the problem lies.
So while your thinking of your dividends, think about the effect it has on citizens in the larger picture.
Capitalism is the way of the country, but falsely inflating things & bilking the public is a bit too far.
The so called electric shortage in CA a few years ago is prime example. And if you don’t think the oil co’s are doing the same, you should pull your head out of the sand and do some more research.
Theres no easy answer to the problem(s). But if things are let to go the way they are, sooner or later the bottom will drop out and more & more citizens will be losing houses, jobs etc. While big corps, CEO’s & substantial stock holders continue to make ungodly amounts of money that the average Joe is paying.
All the last few years exposure of false filings, Enron being a prime example, but not the only example, and surely not the only company in that game......
are prime examples of whats going wrong these days. And still nothing is being done, or very little & just enough to make it look like something is being done, when in reality its sweeped under the rug.
Yeah, you are right in that even positive things (making $$ in stocks) can have negative consequences. But then again, I am simply harvesting the spilled coal by the side of the RR tracks. I have absolutely no effect on the market.
You are also right in that ALL of these changes affect the poor much more than the wealthy. Again, there is little effect I can have on that except to be a progressive, meaning that I think we SHOULD have national health care and such things to provide for each other, as opposed to the theory that each person should sink or swim. I also try to help others with money, time and advice to prevent their sinking.
As I mentioned before, I recently put some $$ into a Green (renewable and efficiency) energy fund, which BTW is beating the pants off the oil stocks.
But, for our purposed of general discussion here, I think the Big Picture is that higher energy prices will encourage conservation, efficiency and less use of fossil fuels (and associated pollution, problems, wars, etc.) - and that is why I have that viewpoint. In terms of the stocks, I am simply putting my chips down onto the players that I think benefit from these trends.
At $80 for a 42 gallon barrel, the dead wholesale price of unrefined oil is about $2.00 - as BB will explain, you don’t get 42 gallons of gasoline out of this, so when you think that we pay $3.00 a gallon, that is $1.00 a gallon for:
1. Intital transportation
2. Refining and refinery profit
3. Transportation of finished goods
4. Retail markup at gas station
5. State and federal taxes.....
I can’t imagine it being done for less.....the road system in this country is something we take for granted, but think about the costs associated with keeping all those roads in some sort of decent shape.....such a deal.
I thought Hugo Chavez gave you North easterners cheap heating oil?
Yeah, the Kennedy thing is a partnership with Citgo (Chavez).
I’m glad that someone cares about the poor. Bush is giving our (tax) money to ethanol makers instead of helping the poor -” let ‘em eat cake and freeze!” is the message.
Truth is, when we buy gas we finance terrorism (Saudis,Iran,Etc.) and also dictators (Putin, Russia) as well as all kinds of other chit. Chavez, by comparison, is a nice guy.
Still, the $3.00 does not figure the “real” cost of wars, security, pollution, roads, traffic and other aspects. I suspect closer to $5.00 or more would cover a more sustainable situation that didn’t involve human sacrifice.
I’d agree with that, but high prices are actually good as they encourage investment in alternative energy.
Our government needs to get out of the business of controlling the market and worrying about things like price gouging (which simply doesn’t exist). They need to go back to performing a few limited functions and let the market work.
Still, the $3.00 does not figure the “real” cost of wars, security, pollution, roads, traffic and other aspects. I suspect closer to $5.00 or more would cover a more sustainable situation that didn’t involve human sacrifice.
I’d agree with that, but high prices are actually good as they encourage investment in alternative energy.
Our government needs to get out of the business of controlling the market and worrying about things like price gouging (which simply doesn’t exist). They need to go back to performing a few limited functions and let the market work.
TMonter… Very good of you to “point this out” ....BUT I would also like to point out…
High prices of oil and (and the notion of) it will “lead towards conservation and foster alternative develeopment”???
WHEN and where have we heard that before??? In the 1970’s,1980’s,1990’s??? YES TO all those years. While I’m not a big fan of ‘government involvement’ some sort of legislation should be in place to FINALLY move this country in the right direction. If alternatives do make any ‘headway’...don’t be surprised if big OIL counters with keeping oil at artificially low prices (like in years past) to drive down economic incentives to advance alternatives.
All Americans should advocate that the playing field should be ‘tilted’ AGAINST big oil to make up for the years lost and the costs associated that “we have all paid for”...IMHO
Speaking of tolls......I was on the toll road outside of Denver last week and was shocked that they dinged me $2 about every 5 miles. That’s an expensive way to get into the city!
I would be inclined to agree with Hogwildz about tolls never going down, except I can remember when you had to pay the toll on I-90 between Stockbridge and W. Springfield, MA. But not no more! So occasionally, for whatever reason, the tolls do go down. Unfortunately, NY State never followed suit.
Well, oil is certainly not tolls - and either are stocks! Both of them do go down, although the very long term trend may be up. Still, all in all, energy remains cheap and is perhaps the best bargain available to us.
It is usually impossible to get companies or people to pay for “years lost”. However, my dad used to always enforce that rule - “This punishment is for all the times you DIDN’T get caught!”
Well, oil is certainly not tolls - and either are stocks! Both of them do go down, although the very long term trend may be up. Still, all in all, energy remains cheap and is perhaps the best bargain available to us.
It is usually impossible to get companies or people to pay for “years lost”. However, my dad used to always enforce that rule - “This punishment is for all the times you DIDN’T get caught!”
Web..
That is very subtle and eloquent analogy...perhaps the best way for America to view Big OIL… a child that is misbehaving… and should be addressed accordingly.
Speaking of tolls......I was on the toll road outside of Denver last week and was shocked that they dinged me $2 about every 5 miles. That’s an expensive way to get into the city!
I would be inclined to agree with Hogwildz about tolls never going down, except I can remember when you had to pay the toll on I-90 between Stockbridge and W. Springfield, MA. But not no more! So occasionally, for whatever reason, the tolls do go down. Unfortunately, NY State never followed suit.
They built the toll road between Dallas and Ft. Worth in 1955 and said that when it was paid off the tolls would go away. I always said “Yeah, right.”. I was amazed when the thing was paid off in December of 1977 and on January 3, 1978 they demolished the toll plazas.
Of course the next day, since the various sections jurisdiction passed from the State to the localities along the road, every three or four miles a different town’s radar traps appeared and started slinging tickets. I drove down it that afternoon and had never seen so many different cop cars and radar guns in my life. It was a circus.
I think the lack of U.S. refinery capacity may have been an issue in the recent years, but the larger problem now is that oil producing countries are pumping as much oil as they can, which is about 84 million barrels a day, and world daily demand is at that level and growing. Add to that the fact that a good deal of the world’s oil reserves are locked up in politically unstable places like Iraq and Nigeria. I believe the ugly truth is that we are at or near the Peak Oil producing point and slowly but steadily from now on less oil will be pumped from the world’s oil fields, while demand will continue to rise. The North Sea’s production has been decimated, the Mexican oil field in the Gulf is declining, Iran and Venezuala are ekeing out every drop they can Of course while richer nations like the US will be able to buy oil for a good while longer, we can expect to pay increasingly higher prices. I suspect that in a couple of years from now we will look back on the days of $75/bbl as the good old days.
OPEC is holding back about 1.5 or 2 MBD of capacity at the moment right? And the nigeria and iraq situations aren’t helping anything, but that’s another couple MBD that could be online if we could all just get along.
One of these days it’ll start to really hurt, and we’ll open up more off shore drilling and ANWR. In the meantime, let’s keep burning someone elses oil… Seems like I heard there were some big reserves in the Arctic - if we could just figure a way to get that ice to melt, we’d be in good shape.
I think the lack of U.S. refinery capacity may have been an issue in the recent years, but the larger problem now is that oil producing countries are pumping as much oil as they can, which is about 84 million barrels a day, and world daily demand is at that level and growing. Add to that the fact that a good deal of the world’s oil reserves are locked up in politically unstable places like Iraq and Nigeria. I believe the ugly truth is that we are at or near the Peak Oil producing point and slowly but steadily from now on less oil will be pumped from the world’s oil fields, while demand will continue to rise. The North Sea’s production has been decimated, the Mexican oil field in the Gulf is declining, Iran and Venezuala are ekeing out every drop they can Of course while richer nations like the US will be able to buy oil for a good while longer, we can expect to pay increasingly higher prices. I suspect that in a couple of years from now we will look back on the days of $75/bbl as the good old days.
OPEC is holding back about 1.5 or 2 MBD of capacity at the moment right? And the nigeria and iraq situations aren’t helping anything, but that’s another couple MBD that could be online if we could all just get along.
One of these days it’ll start to really hurt, and we’ll open up more off shore drilling and ANWR. In the meantime, let’s keep burning someone elses oil… Seems like I heard there were some big reserves in the Arctic - if we could just figure a way to get that ice to melt, we’d be in good shape.
Steve
I think the Russians just laid claim to the majority of the vast Artic area. At least someone is thinking ahead.
I think the lack of U.S. refinery capacity may have been an issue in the recent years, but the larger problem now is that oil producing countries are pumping as much oil as they can, which is about 84 million barrels a day, and world daily demand is at that level and growing. Add to that the fact that a good deal of the world’s oil reserves are locked up in politically unstable places like Iraq and Nigeria. I believe the ugly truth is that we are at or near the Peak Oil producing point and slowly but steadily from now on less oil will be pumped from the world’s oil fields, while demand will continue to rise. The North Sea’s production has been decimated, the Mexican oil field in the Gulf is declining, Iran and Venezuala are ekeing out every drop they can Of course while richer nations like the US will be able to buy oil for a good while longer, we can expect to pay increasingly higher prices. I suspect that in a couple of years from now we will look back on the days of $75/bbl as the good old days.
OPEC is holding back about 1.5 or 2 MBD of capacity at the moment right? And the nigeria and iraq situations aren’t helping anything, but that’s another couple MBD that could be online if we could all just get along.
One of these days it’ll start to really hurt, and we’ll open up more off shore drilling and ANWR. In the meantime, let’s keep burning someone elses oil… Seems like I heard there were some big reserves in the Arctic - if we could just figure a way to get that ice to melt, we’d be in good shape.
Steve
I think the Russians just laid claim to the majority of the vast Artic area. At least someone is thinking ahead.
Sandor I know you research this but tell me if I’m right or wrong I believe Mexico reached peak I know long ago we did the North sea seems to gone past peak.
What are the current places peak has arrived or gone past how bad is it
I thought Hugo Chavez gave you North easterners cheap heating oil?
Yeah, the Kennedy thing is a partnership with Citgo (Chavez).
I’m glad that someone cares about the poor. Bush is giving our (tax) money to ethanol makers instead of helping the poor -” let ‘em eat cake and freeze!” is the message.
Truth is, when we buy gas we finance terrorism (Saudis,Iran,Etc.) and also dictators (Putin, Russia) as well as all kinds of other chit. Chavez, by comparison, is a nice guy.
Speaking of CITGO??? Whatever became of the attempted legislation to have the huge Citgo sign behind the green monster at Fenway park removed???
That one ‘quietly’ disappeared didn’t it??? Do you think people said ‘enough is enough’ bashing of Venezuala...you’re not gonna tear down a landmark just because the Pres. doesnt like the other Prez.??? Or do you think all the people getting helped out with the winter bills spoke up???
Both Maybe???
Or perhaps the lawyers’ chimed in??? Would be a bad precedence don’t ya think??? Pull down the Citgo sign in Boston because of a countries’ political views...next thing ya know the ‘Golden Arches’ start fallingall over the world???
How much you want to bet the first occurence would be in Paris??? ROFLMAO;)
