Print

Please login or register.
1 Hour 1 Day 1 Week 1 Month Forever
Login with username, password and session length

[iski]

iski, as a watcher of commodities, you should model how ethanol requirements distort food/energy prices and look at the secondary effects on the poorer nations in the world. Its scary the damage our economically ignorant governments can do.

MB am now retired.  My last job was with a food company that traded significant amounts of sweeteners.  The impact of ethanol on food markets is incredible. Bad, depending on one's perspective.  As a nation we chose ethanol from corn, which has created an artificial market that is wasteful, stupid, consumer hated, extremely complex & a tax lawyer's paradise.  In other words a GREAT federally mandated program, juged by that standard.  If we had chosen cane instead some poorer nations around the world would have greatly benefited.  Nutrition vs fuel is not much of issue here, but it is elsewhere.  But we did not, we chose corn, and the price of my Doritos went up.  I blame the evil that calls itself Frito Lay instead of the government that caused it.  Why?  Chester Cheetah is not to be trusted, he lives a lavish lifestyle & I think he now dates a Kardashian.  Despicable.   

[Keats]

The main difference between gas and Iski's doritos is Iski can live without doritos (at least I think he can)

nobody really complains about dorito pricing because you do not have to buy them. Not so for Gas.

Just like any product that must be purchased, it is scrutinized to the highest degree.

[J-Carr]

I'll agree with everything you said guys.  Even the big oil is evil.  I think that because they hire accountants.  Accountants are the evil telling lawyers how manipulate the money that the lawyers are robbing.   

Ok, seriously, none of it explains to me why prices spike up to .40 on a perceived crises but take months to come back down if the crisis proves to be non existant or other factors come into play like a surplus in oil production etc.  Since the taxes aren't being adjusted (they remain criminally high) and I know the local guy selling me the gas at the pump isn't making money on it, its got to be somewhere in between.  Maybe its the distributors.  I know much of the gas you buy that's branded this or that all comes from the same storage tank.  If the price jumped up and down at the same rate I'd say commodity market, that's how the free market works. But to me it has all the signs of price gouging.

For the record: Absolutely agree that ethenol is the worst thing in the world in our fuel supply both as a product and a concept.  It cause more pollution, damages equipment, decreases mileage, raises fuel prices and proportionality penalizes the poor at a higher rate by making both their fuel and food non affordable.  Punitive taxes that are not used to facilitate or improve the travel infrastructure or further the fuel supply add an extreme burden to the cost as well.  On a cost per share, cost per gallon basis the government is making it hand over fist and that's ultimately responsible for the high prices overall.

[iski]

Can semi live without Doritos Keats.  Cheetos, nope.  I blame Frito Lay & the cracker stacker at the local grocery whose name is Melvin.      Consider a map of US gas prices, averaged, & many areas that are the highest price are special, because they have special gas.  How lucky it is to be spec.... nevermind.

JC there is a lag time on commodity pricing.  As an evil bean counter sucking the very marrow of life from the companies upon which you preyed accountant you are familiar with replacement cost & opportunity cost. Storage cost of product at the station (in the ground) & cost of product in distribution channels are factors,   Gas & diesel pricing do not follow a simple straight line formula.  In my food biz, a crop shortage, spike in demand, or glut in supply were 'triggers' that set in motion +/- pricing scenarios.  Grocery stores & restaurants try to soften the price swings by contracting or just absorbing a price increase & will try to delay a price decrease, so the consumer has less sticker shock.  Gas companies do not operate the same way & price swings can appear quickly at the pump. Commodities pricing structures may be worse to explain than Willie's sock drawer.  Because oil companies are big & evil, of course.  Just continue to believe that, rinse, & repeat.  Life is simpler that way.   


True story, somewhat.....the Spousal Unit found a cooked string in a bag of Doritos this week.  Called Frito Lay 800#.  The CEO is flying out to personaly apologize & grovel & we get to ride on the corporate jets free for a year.  Maybe, not confirmed.    Even better, we got coupons for free Doritos & Grandmas Cookies!  I still hate Frito Lay with the heat of a thousand white hot suns on Unicorn Rainbow Sparkles Day, of course.  Because. It. Makes. Life. Simpler.   

[MIKEYTEE]

This subject is like :beatdeadhorse:as we know why and how we are getting the shaft.
What we don't see are alternative answers to cheap fuel. Weather it be for cars, heating, generating electricity, planes, trains, ships/boats, ect.
For every action there is a reaction is so very true, and a lot of the reaction is knee jerking at best.
Now before you start with the solar, wind, hydro ( including wave/current ), hydrogen, and ethanol all take special equipment to extract electricity. I don't claim to have the answer, but if we could convert Kudzu into feed for cattle and harness the methane. Or use Kudzu to make ethanol we could have a renewable source
of vegetation and it is cheaper than corn and grows much quicker. We would have to keep the likes of Monsanto and their cronies out of the loop. Also the government.
Mike
 








This is meant as a non-political post so don't make it something it is not!
 

[J-Carr]

Mike, you and I are friends.  But if you ever call me the A word again I will send a strongly worded PM!  I was an IT geek forced to support accountants, I have not and never shall be an accountant good sir!   

So, what your saying is the corporations manipulate prices on commodities.  Got it.  Isn't that I what I was saying?    (We really need a hysterical laughing guy).

Over all the take away from this meeting is that we need to stop and get Doritos on the way home.  Cool ranch for me. 

Oh... And we're screwed.

[iski]

Mike, you and I are friends.  But if you ever call me the A word again I will send a strongly worded PM!  I was an IT geek forced to support accountants, I have not and never shall be an accountant good sir!   

So, what your saying is the corporations manipulate prices on commodities.  Got it.  Isn't that I what I was saying?    (We really need a hysterical laughing guy).

Over all the take away from this meeting is that we need to stop and get Doritos on the way home.  Cool ranch for me. 

Oh... And we're screwed.

A misunderstanding of epic proportions,  my apologies JC!  You were using magical electrical switches set in mystical random patterns in weird boxes with flashing lights to royally screw up the data keeping as well as internal communications for a group of Money Juggling A-Clowns an IT guy for accountants. Understood, thanks for the clarification.

Of course oil companies set prices, as best they can to maximize profit.  All the companies I worked for in food did more or less the same.  Pricing is whatever the market will bear.  All for profit business, in one way or another, does the same.  All business is evil, because of greed.  Some pretend to be less greedy & do Happy Dances to make certain folks think they are not profit - greed- driven.  If they are non profit, sometimes they are even more evil, but that is a dead horse to beat in another thread.

Yes, evil.  And big.  Have said this consistently all along.  Not that it bothers me...... except for today, Frito Lay, because today, I picked them.

Yes, Doritos are an important food group, part of a well rounded nutritional diet, because of..... spray dried cheese!  Yum!


  

 And yes, we are screwed.   

[Keats]

This is not rocket science it is just free market in play.

if you can sell your product for more at opportune times and get away with it, go for it

The food industry is not that far in business models from the petroleum industry. The big difference is the Petroleum industry has not found a way to sell you a gallon of gas that is only 3/4 of a gallon.

The food industry has perfected that model with  creative (deceptive) packaging. I wonder at times does the food industry sell more food than air.

[Keats]

At least with the rabid eco terrorists the oil companies are only poisoning you indirectly, but the food industry has a direct line.


according to 1 percentile of eco terrorists



LOL


Do not get me started on GMO's

[grc]

Earlier this week the largest refinery here in the Midwest, BP-Whiting, shut down the largest of it's three crude distillation units due to breakdown of the equipment.  It originally went down many months ago when it was being operated by replacement workers, but I won't go into that at the moment other than to say it broke down due to their actions and or lack thereof.  Not an act of god like a tornado, but something they are directly responsible for.  Within 24 hours of this latest shutdown, gas prices here jumped $0.75, and the predictions are it will rise another $0.50 over the next week.  Now while they are the largest refinery, they are definitely not the only refinery in this area.  We are back to school in much of the area, so heavy travel vacation season has already been wound down for the most part.  Demand is still relatively low, and supply is still relatively high.  So what is the justification for such a huge instant price increase? 

Over in the competitive arena where I worked for 35 years, when one of our automotive plants had to shut down or curtail production due to a facility or equipment failure, we didn't get to go out and add a surcharge to all those cars and trucks we had already produced.  Any losses just flowed to the bottom line, and the stockholders and employees bore the loss.  Now switch to the oil industry and companies like BP, where no matter how many times they screw up the costs just get passed to the consumers and the corporation still nets $20 billion or more a year, no matter if they blow up a refinery, blow up an oil rig and fill the Gulf with crude, or just fail to keep their equipment maintained and repaired.  Have to love an industry that can't fail to make a profit, no matter how poorly they run the show.  Sounds like a pretty sweet racket to me.

Jerry 

[iski]

This is not rocket science it is just free market in play.

if you can sell your product for more at opportune times and get away with it, go for it

The food industry is not that far in business models from the petroleum industry. The big difference is the Petroleum industry has not found a way to sell you a gallon of gas that is only 3/4 of a gallon.

The food industry has perfected that model with  creative (deceptive) packaging. I wonder at times does the food industry sell more food than air.

Cheaters - 15 ounces instead of a pound, a 1 1/2 quart "half gallon", etc. used to be rare, now are common.  Candy bar sizes shrink or grow.  All of that & more brings many millions to bottom lines.  Frito is in the air biz, with some brightly colored grain product inside.  Best margin in food is air.  Pure evil.  With air.   

Of course each & every food company is doing their very best to poison all their customers.  Why would they do otherise?  Maybe sick/dead people eat more? Maybe not....  Yes PLEASE buy all the organic, natural, GMO free, etc. food types instead of the "poison" varieties.  Do not pay any attention to the price points that are 50% to 200% higher in some cases for organic & all.  Spend more for food, it MUST be better for ya.  We loved organic, etc. long time in my biz.  Not because pofits were 100% or more higher & nutritionally there was zero difference.  Must have been another reason, I forget. Oh yeah, we enjoyed poisoning people or something. Tht is good for biz. 


Car pricing as a business model for others to follow?  Car pricing structures to the buyer from the sales lot? Yep, I only  wish it was that much fun to buy a tank of gas or a bill of groceries or  toaster as it is to buy a car. Yep, yessiree! I really like this thread.  A lot.  A smile for the end of my week.   

[Masterblaster]

I suggest you guys that think it is a racket stop buying gas and petroleum products. This will increase supply and lower prices for the rest of us.

BP's problems up there took out the largest refinery in the midwest, 300,000 barrels a day. There is no easy quick way to supply that area, the infrastructure is running at 96%, 365. There is no fat to shift from one local to another, you can go look up the data at the energy department on inventories and demand for each area if you want to get nervous. I know its futile to defend this industry but from what I have seen in almost 30 years I can tell you I have never seen anything questionable of even suspect.

Jerry if the industry got a trillion dollar bail out when they didn't make money maybe they could do something about pricing and make everyone happy,,, well except tax payers, and our grand kids who will be left with the debt.

[FlaHeatWave]

Masterblaster, yes and oil is not the only industry that avoids Cali, for some very good business sense reasons.  I live in NoFl.  Years ago became aware of a number of farmers relocating in this area, mostly south Georgia.  Have spoken with more than a few, same basic story - they left a high tax anti biz climate for greener pastures, literally. Go to AZ, NV, TX and others & this is no fad - for many industries is a trend.

Taking the time with an open mind to understand complexity of issues as nowhere near as easy as one of my favorite sayings - Stereotypes are real time savers.  Big Oil be bad, easy mindset.  At a somewhat different level than you ( ) I was pumping gas & managing a small 2 pump station in the evenings in Willie Nelson's home town in Texas for 4 years.  Just happened to be during the 70s oil crisis, an earlier cost "gift" from government.  Prices had spiked in short order about 20 cents.  Me, the attendant, was cursed, spat at, yelled at, & had money thrown on the ground instead of handed to me from angry customers blaming me (less than $2 an hour pay). Troubled me, so I began to pay attention instead of eating the media oil "news" pablum. All the bad stuff was from interestate travelers, not one incident from locals  Had friends then in distribution, then several went to the oil fields all around the world.  Considered it myself as college wound down but passed.  Anyway my career did not encompass oil except as an investment, but did have the opportunity to observe many commodity markets and the factors that drive them.  Mostly in the food biz.  A beetle or fungus infestation on a cocoa field in Africa combined with a weak US dollar & an out of whack import quota on sugar driving the retail price of brownies or chocolate chip cookies, nah let's blame Kroger instead of the real reasons.  It's human nature.  Not going to change.  Cali sits on untold but untouchable by law oil reserves wealth, as do a number of other areas.  Must be Big Oils fault. 

Well at least you weren't a returning serviceman from Viet Nam getting spit on, after being drafted and serving your country...

If FL is so anti biz towards farmers, then why is FL the #2 State in the Union for agriculture / cattle production???

If big oil is so great and always looking out for us, then why did BP skimp on the blowout preventers (yea, I know it's a 1/2 million dollar piece of equipment, but that's peanuts compared to the rig costs and $10B / qtr profits) in the Gulf oil spill of 4/20/2010, causing loss of life, and millions of gallons of oil to be spilled in the Gulf?

On the other hand, fossil fuels and the related infrastructure is crucial to our civilization (all civilized countries, not just the US) as we know it for the last 100+ years...

I'm not against profit, that's what makes the world go 'round, and these (big oil) companies have billions in overhead, but in trying economic times wouldn't 4-5 $billion / quarter be enough??? Remember the price of diesel affects the price of everything...   

As far as Cali, it's a different place than any other in the US, very dense population centers on the coast with prevailing Westerly winds holding the smog over LA against the mountains, so maybe the special fuels are a solution to the smog???... 

Cali is a nice place to visit, no way I would have my only residence there... You can't drink a beer on the beach

As for food for fuel, I never quite figured that one out... Big Ag lobbies maybe

[Para Bellum]

when one of our automotive plants had to shut down or curtail production due to a facility or equipment failure, we didn't get to go out and add a surcharge to all those cars and trucks we had already produced.  Any losses just flowed to the bottom line, and the stockholders and employees bore the loss.  Now switch to the oil industry and companies like BP, where no matter how many times they screw up the costs just get passed to the consumers and the corporation still nets $20 billion or more a year, no matter if they blow up a refinery, blow up an oil rig and fill the Gulf with crude, or just fail to keep their equipment maintained and repaired.  Have to love an industry that can't fail to make a profit, no matter how poorly they run the show.  Sounds like a pretty sweet racket to me.
Jerry

I have complained about those instant price increases and slo-o-o-w decreases for years.  It still gripes me, but after reading Thomas Sowell's textbook on economics (written for the interested layman; not a dry, stilted, undecipherable mass of gobbledygoop), the difference is that most everybody can put off the purchase of a car for awhile, but not so on gasoline, drinking water, or food.  When shortages hit, prices skyrocket because demand for food, etc. is inelastic in economist's terms, while demand for cars is elastic.

In the old days, when a hurricane hit, entrepeneurs would drive a truck of water to the area and charge $5/bottle.  People grumbled, but paid and were glad to get it.  The high price encouraged people to use the resource wisely, and, more importantly, caused businesses to send more water to the area, since the higher price would cover the higher costs.  Now, with the entitlement mentality, that same entrepeneur is likely to get tarred and feathered, have the water stolen, then get charged with a crime.  Businesses have no incentive to disrupt their normal routine to provide more, as they know they'll be accused of price-gouging, get bad publicity, and might be fined.  So why bother?  The result is no water, food, or gasoline for victims of Hurricane Sandy or other disasters.  They just have to wait until the gubmint gets around to it.

Masterblaster had a great line:  I suggest you guys that think it is a racket stop buying gas and petroleum products. This will increase supply and lower prices for the rest of us.

[iski]

Well at least you weren't a returning serviceman from Viet Nam getting spit on, after being drafted and serving your country...

If FL is so anti biz towards farmers, then why is FL the #2 State in the Union for agriculture / cattle production???

If big oil is so great and always looking out for us, then why did BP skimp on the blowout preventers (yea, I know it's a 1/2 million dollar piece of equipment, but that's peanuts compared to the rig costs and $10B / qtr profits) in the Gulf oil spill of 4/20/2010, causing loss of life, and millions of gallons of oil to be spilled in the Gulf?

On the other hand, fossil fuels and the related infrastructure is crucial to our civilization (all civilized countries, not just the US) as we know it for the last 100+ years...

I'm not against profit, that's what makes the world go 'round, and these (big oil) companies have billions in overhead, but in trying economic times wouldn't 4-5 $billion / quarter be enough??? Remember the price of diesel affects the price of everything...   

As far as Cali, it's a different place than any other in the US, very dense population centers on the coast with prevailing Westerly winds holding the smog over LA against the mountains, so maybe the special fuels are a solution to the smog???... 

Cali is a nice place to visit, no way I would have my only residence there... You can't drink a beer on the beach

As for food for fuel, I never quite figured that one out... Big Ag lobbies maybe

First, thanks for your service.  Several older friends were spit upon and treated poorly/atrociously by the public upon their return from VN.  Infuriated me then, inexcusable.  I graduated high school in 1973, was too young to go.  Anyway, my being spit upon & treated badly by an ignorant public blaming me as a poor teenaged gas attendant working to help support his family (my Mom had 2 jobs then) since his Dad died when he was 16 is just the way it was.

As for Florida agriculture - perhaps you misunderstood my earlier post?  The farmers I was referring to earlier were fleeing CA for greener pastures.  Those include FL greener pastures, because in those former CA farmer's opinion, as well as mine, FL is a business friendly climate.  My family up until my generation - both sides including my wife's family - were farmers.  We still have a farm in our immediate  family & quite a few in our family still farm. CA - from what  I have learned from former CA farmers - is a high tax, unfriendly to business environment. Water is scarce in areas.  That is why they left. Florida has great ag biz, I worked in FL for the last 20 in the food biz. 

Never said BP was great. I keep saying how evil Big Oil is..... BP paid billions in fines & restitution, as they should have.  The spill was preventable, a tragedy that should not have happened.  Also, due to a government decision that was ill advised, oystering in Appalchee Bay area was wrecked. Not by any spilled oil, it never reached there.  Needlessly hurt a lot of good very hard working folks in a dangerous industry - offshore fishing.  Anyway, as a transplanted Texan, would like to see some more rigs in the gulf where there are none, to further increase domestic oil supply.  In truth, I do not see that happening.

Ok, I know this thread is supposed to be about how greedy & evil Big Oil is & how we, the consumer are taken advantage of by these compnies who only rsise prices because they feel like it. Market conditions, supply/demand, oil refinery shut downs - of course those could never be the real reasons  I get that, gas price increases are inexcusable, it is Conventional Wisdom.  In a real world, oil company profit margins are what investors look at.  Maybe GM & Ford & all the Big Auto companies (safety recalls where people die, poor workmanhip, high priced, etc.) should be thrilled with a $10 million profit?  Sure. It does not work that way. Oil company net profit margins are lower than a lot of industries. Verifiable.  Big Oil, Big Auto, Big Food are dominated by a small group of powerful companies that we the consumers, as long as we are "on the grid" support by our consumption.  That is why at different times we fling arrows of discontent at all of these 3, and others.  Of course all 3 industries are Big & Evil & as a consumer I am just taken advantage of blah blah......of course I read that on the internet plus media tells me this so it must be true.     I do a bit of reading & research, & know others opinions differ greatly & am ok that they do.  As Mongo so wisely said in a movie a long time back, paraphrased: Iski only pawn in game of life.