Posted on 08/15/2008 12:49:17 AM PDT by TigerLikesRooster
I forgot all about the airlines. Oil is on the way down but it may not come fast enough to prevent the insolvency of some air carriers. Ouch!
Hedge fund collapses will bring $65 oil and the Russians and Iranians have playing the futures markets too. To jam energy prices skyward
The reason the US auto industry has been destroyed is unions. They all came south to non-union shops. I’m ok w/that. now the liberals from the north are coming down south and screwing up what works.
All you have to do is look at the red/blue map to figure out where government policy/taxes have killed industry. they are flocking from the NE states, Ohio, Michigan and California because of Unions and outrageous tax rates.
GM and Ford also tend to be behind the curve when it comes to technology in the auto-industry.
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The reason the US auto industry has been destroyed is unions.
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In the main I agree.
But management was their dance partner in this death-spiral.
A couple of years ago, The Wall Street Journal “named names” in
mentioning who came up with the “jobs bank” idea at GM.
(for other readers, “the jobs bank” is a place where union workers
go to sit, watch TV, read magazines during their “work day”, drawing
full pay...instead of just being laid off or re-assigned to another plant).
It was GM that proposed the “jobs bank” as an inducement to the unions.
The managements of The “Big” Three were too complacent and spineless.
But when dealing with extortionist thugs, I can sympathize with their plight.
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I suspect you are kidding, but during the oil crisis I was scratching my
head at all the people dumping their SUVs for pennies on the dollar
and buying fuel efficient cars.
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Some folks really did make irrational moves based on a staightforward
dollars-and-cents analysis.
But I suspect that some of those moves were based on fear...of the
“what-ifs” if the price of oil/gas/diesel kept climbing (however unlikely).
They were probably afraid of where they’d been if we’d actually ended
up with gas at $10-$12 per gallon.
And looking “across the pond”, they know that $10/gallon fuel
does exist in part of the civilized world.
Also, a significant advance in alternative technology immediately is if we discover a way to sell solar panels cheaply (maybe $5,000 per unit) so that way we can power up Chevy Volt.
Otherwise, its a waste of time and resources to build electric cars.
The split between crude oil prices and gas prices from August 2007 to now is fascinating. It looks like the oil companies have been artificially keeping gas prices down rather than pushing them up. If the trend lines from 2006 and early 2007 had been followed, pump prices would have peaked at nearly $6/gallon.
Gas is essentially the same price in the US and Europe. Taxes make up the difference in retail pump prices.
I am the SUV type and have been grinning ear to ear. I understand the economics of getting cheap used Suburbans from Clinton voting soccer moms panicked by Henny Penny types only to watch the bubble burst and not only pay pennies on the dollar for the truck, but enjoy the benefits of lower fuel at the same time.
I totally agree.I meant the truck and suv divisions were still producing until the oil bubble hit.Aso, I understand
being behind the tech curve. We have a year old Saturn Aura that we love and our second car is going to be a Chevy Malibu. However, I see twenty Accords for every one of either car. Detroit lost many car consumers and can’t get themback even with a better product.
There is nothing like buying low...
You make my point. If people are truly afraid of double digit gas prices, then they have more emotion than intelligence and to that extent, they get what they deserve. Anybody with eyes to read a chart could see that oil prices went parabolically vertical, which is a certain bubble pattern. Does it mean oil had to drop from $140. Not necessarily. I mean some people believe in ghosts and UFOs too.
But when a curve loses all resemblance to market driven patterns and goes ballistic, with prices soaring skyward, it is a bubble and prices MUST retrace. Period. Of if there has ever been a meteoric rise in the price of a commodity that went parabolic and then held for the long term, I really wish someone would post the chart or cite the event.
People who thought oil would stay at $140 seem terribly naive to me, and the people who took an upside-down hit on their SUVs to bail out and buy an economy car, when the gas premium over 8 years is less than the loss they took on the SUV, strike me as doubly naive.
No doubt you are right that people feared $10 a gallon gas. I’m just baffled by their complete lack of common sense to think it was even possible, let alone that $4 would stick after such a meteoric rise in price.
The Russian and Islamic controlled energy cartel have the devious capabilities to push oil well over $150, upward to $200+, based on their brazen, unchallenged aggression & market jolting threats against the civilized world.
Yup........That's my take.
All this started with a few real supply issues, as there was and still is increasing demands from the new world, and the Russians have been having production problems, so they say (if a Russian is moving his lips, he is likely lying) and there is unrest in some oil producing countries where we get a lot of our sweet stuff. Add to that, a big spike in China demand that seems to be slowing a bit and it set the stage for a big run up.
When the financials crashed as a result of the sub prime mess, the big institutions and hedge funds had no where to go. They lost money trying to short financials on a couple occasions, and this prompted them all to jump into oil and commodities. The volume dried up in the equity markets, and this further exacerbated the problem.
All this has unwound, The financials are recovering and the money is going back.......but.........
There is a tendency to do these thing again and again until they don't work anymore. The fundamentals have not really changed and when U.S. demand perks back up, we could repeat the process and likely will.
“Dropping? We had a $0.21/gal jump in prices yesterday to $4.09/gal of regular unleaded. NW Indiana (about 6 miles from BP’s Whiting refinery)”
Wow, $4.09? I’ve never seen it that high. Yesterday I saw it drop again to $3.46.
No transparency in the commodities markets is a problem with investors never intending at all to ever take possession......nothing like it use to be.
All would make a decent ROI on oil / gas / refining with the $45-$55 / brl range.
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