Saturday, March 10, 2012
rubaiyat redux
Thursday, March 1, 2012
Whatever happened to OPEC?
I will quickly show I know just enough (and maybe not even that much!) to be dangerously stupid but what are blogs for?
I was having lunch with a couple of friends and of course briefly we bemoaned the rising prices of gas.
My pet peeve has been what I call “self-fulfilling prophecy”; i.e. some speculator somewhere thinks gas might be higher in a few months or hears that a middle eastern dictator has a cold, then buys some sort of commodity derivative or something at a certain price and off we go. The media reports prices are going up and sure enough, drive by your friendly local station and the guy will be out there with a ladder, suction cups and numbers in hand, changing the price.
Made me wish for OPEC. I remember something about the days when OPEC were the bad guys, a group of Arab Sheiks who met in Switzerland or some such ritzy place to determine who was going to produce how much and for what price. Then I figured – surely they couldn’t have been setting prices for the world market but then …
“One of the most common misconceptions about OPEC is that the Organization is responsible for setting crude oil prices. Although OPEC did in fact set crude oil prices from the early 1970s to the mid-1980s, this is no longer the case. OPEC's Member Countries do voluntary restrain their crude oil production in order to stabilize the oil market and avoid harmful and unnecessary price fluctuations, but this is not the same thing as setting prices.” source OPEC
So who exactly DOES set the prices for Oil and indirectly gas?
Then I read this: “In today's complex global markets, the price of crude oil is set by movements on the three major international petroleum exchanges. They are the New York Mercantile Exchange (NYMEX, http://www.nymex.com), the International Petroleum Exchange in London (IPE, and the Singapore International Monetary Exchange (SIMEX, http://www.simex.com.sg). source OPEC
Please refer back to my earlier statement about a speculator. Wonder where those people go to work everyday?
Again my faulty memory of the bad OPEC days is that the Sheiks would meet, and because at the time the Saudis were the biggest and baddest OPEC dudes, they could call the shots, raise or lower their own production so the smaller guys wouldn’t get hurt too much and in general keep the flow of crude somewhat stable (because it benefited their own economies and countries) which had the effect of keeping gas prices somewhat stable.
Note I didn’t say low but think back to those earlier days when we started feeling the pinch. I do remember when gas went over a $1 a gallon. I remember when it broke $1.50. What I don’t remember are times when it was up a dime today, down a penny or two tomorrow and then back up a nickel again the next day. It seemed like there were longer periods of the same price and not the day-to-day volatility in the market. Buying gas now is like watching an auction on eBay!
Wonder who the OPEC members are? Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia (2nd largest known reserves of OPEC countries) United Arab Emirates, Venezuela (largest known reserves of any current OPEC country)
We used to complain that higher gas prices were just making a bunch of spoiled Saudi Princes richer and richer. That may still be true but who is really profiting by the rising prices? I found these folks on a list of the 20 most profitable U.S. companies:
#1 Exxon ($30.5 bil.), #3 Chevron #3 ($19 bil.), #16 Conoco/Phillips ($11.4 bil.) Two int’l cos. are Shell ($28.6 bil.) and BP (a measly $5.3 bil. in the year after the big spill)
Can you see where this is going?
The next little bit of research is to see who of these folks are paying taxes. I found an article where Exxon was whining to CNN about how they paid out more in taxes than they took in, in profit. But it turns out they were counting sales taxes collected at the pump as taxes they paid! So the 25-50 cents per gallon tax that you and I pay at the pump, Exxon was telling reporters THEY paid those taxes. All their stations did was collect them and pass them on. Those taxes were OUR nickels and dimes and DOLLARS, not Exxon’s. But in fairness I did find that Exxon paid about 29% of those profits as actual corporate income taxes – still below the 35% that our tax code requires (can you spell tax subsidy?)
All I set out to do here was find the bogeyman for the daily price rises at the gas pump. We can hate the Arabs all we want (and Chavez too) but it seems there are plenty of our own villains to go ‘round!
I don’t really understand the futures market. I sort of get that if I want to buy a share of Apple stock, I’d pay $532 today (give or take). What I don’t understand is that as a speculator I can presume Apple’s stock price might be $750 (they wish!) and then buy up options or futures based on that assumption. What I further don’t get is how this option purchase today can affect the stock price tomorrow or next month? Shouldn’t that be based more on performance, the long-term market for the products etc.?
Bottom line, low or high, gas is always going to be profitable. Oil companies weren’t going broke when I paid less than 30 cents a gallon back in college. In fact for many, those days were the hay-days of big oil in Texas.
Finally just read this: Obama is considering revoking some tax subsidies for oil companies because of the high prices at the pump. I’m no economist and I really don’t think any of them need subsidies but … taking them away will mean their operating costs go up – right? And if their costs go up, what will happen to the price of gas?
What goes around, comes around I guess.
Thursday, February 9, 2012
Only if you like poetry
If you don't like poetry then just skip this. But if you are willing to take a chance, spend a few moments, please read the short composition below. At the end I will tell you something about it.
"She skipped childhood like a stone
Skimmed the surface straight into adulthood
Never gave thought to her youth, it rippled softly before it disappeared
It was never dolls and make believe
It was babies and a real house to tend
she woke up one day and realized that she hadn’t played outside in years
And that she had nothing to show for her toil
except her children, who barely see her anymore
But she keeps working because she must
She is wise
And wiser still each day
You can see it in her face and in the movements of her hands
Hands not dealt an easy deck
And hands that know the cost
Of skipping rocks"
This is not a vanity thing. The above was written by my daughter. The one who keeps saying she wants to write, wishes she could write etc. Well guess what? I think she can and I'm proud of her. I had to get her permission to re-publish this. I just hope there is more where this came from. Keep it up Bean!Thursday, December 22, 2011
Not a Christmas letter
Monday, October 17, 2011
Just wondering
That’s where we read the more familiar accounts of the annunciation, Jesus’ birth, etc. One part of this always bothered me (are we allowed to be “bothered” by something in Scripture? Not sure, but that’s the word that fits.)
The angel Gabriel comes to Zacharias and tells him about his son-to-come who of course became John the Baptist. In their conversation Zacharias questions the angel “Whereby shall I know this?” and for this he was struck dumb (for awhile at least.)
Later on Mary is also greeted by Gabriel who tells her about the coming birth of Christ – her child and the son of God. Mary’s response: “How shall this be?” Gabriel didn’t chide or punish her in any way for asking essentially the same question.
Always wondered why Zacharias got dinged for asking questions.
Maybe because I like to ask lots of questions!
It (almost) happens
Coming off the state highway (speed limit 60) to our town road where it drops to 35 pretty quick.
I usually coast in and by the time I hit the 35 mph sign I’m doing between 35-40.
Saturday I crested a small hill in our town when I saw the unmarked Police car sitting behind a small church. As is my habit, I looked down to my speed which I’m pretty sure was 35. (yeah, right, you say!)
The officer in the car thought otherwise and pulled out behind me and turned on his lights – no siren in our dinky little town I guess.
At first, since I had just looked at my speed, I wasn’t sure he was coming after me so I drove on down the road another block, turned off onto our road. I looked back and saw he had also so I knew he wanted me.
By the time he got to the car I had my license and registration out. He asked me if I knew why he had stopped me to which I honestly answered “no.” (yeah, right, you say!)
He said City Council was really asking them to stop anybody going over 35 and that I was doing 40. He asked me how fast I thought I was going and I told him 35. He took my license (gave me back my reg. card right then). He was in his car a long time, which made me start to worry.
Observation: when they shine that light into your mirror – you can NOT see anything. It is sooo very bright that it almost hurts! I’m sure that is intentional so you can’t see them or what they are doing.
After a bit, he came back, handed me my license and said, “Mr. Crunk, you have a good evening.” I said thank you and drove home.
Even if I was going 40 (and my wife says I always drive too fast thru town) I doubt many folks get stopped for 5 over. I’ve heard the off-the-record number was +7. Mind you I don’t try to push that envelope, I’m just sayin’.
Later that night I had to go back thru town again to pick up another daughter at work and rest assured, I never even broke 30 on the way out and the way back in. Not taking any chances!
Monday, October 10, 2011
Location, location, location
At three intersections I pass through almost every day, are (or were, or will be) small restaurants – a pizza place, a former Italian rest. and a drive-thru coffee shop.
I can’t keep up with how many different businesses have gone in and OUT of each of these in the last few years. In a couple of cases the businesses may have lasted 2- 3 years, which in this economy might be doing pretty good. But the third one has turned over more times than I can recall.
I feel sorry for these small business-people who I’m sure lost their collective shirts (or more!) on these failed ventures.
To my title – it would seem that none of these locations can support a food related business. You’d think after awhile, folks would recognize that. For whatever reason this intersection etc. just is not going to work.
Before I forget – one of the locations held a small independent church for awhile but even that was short-lived.
I’ve heard the joke (or maybe serious statement) that Walmart and McDonalds aren’t in the retail or food business but rather in the real-estate business. They do traffic counts, demographic surveys, scope out the competition etc. for perhaps years before they go in and buy property for a future location.
Maybe these small business owners need to do the same type of research.
