If it seems like you’re going backward financially, it may be because you actually are. The Consumer Price Index rose 1.1 percent in June, the largest increase in 17 years. The new report follows Tuesday’s bleak analysis by Federal Reserve Chairman Ben Bernanke and the announcement that General Motors is laying off thousands of workers. “No matter how one slices and dices,” one economist said, “the bottom line is that U.S. workers are falling farther and farther behind.”
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105 Comments
Oh Yea, give the whiners some ammuntion. Bet they wish they could afford cheese with that whine.
Sen. Gramm
Told ya so and it’s just starting…still time to write in Ron Paul.
If you think times are bad now, just wait until you have to purchase carbon credits.
That’s an annual inflation rate of more than 13%!
But according to the McBush campaign, it’s all “psychological” and you’re all a bunch of “whiners.”
Four more years!
Four more years!
Four more wars!
The economist “Grynbaum” from the New York Times??
There is an unbiased source for you!
You bring up auto industry layoffs. No mention that those layoffs are largely the result of energy prices. No mention that it is the Democrat party that will not let us drill enough domestic oil wells to bring down the price of oil.
No mention of all the mortgage companies that are in trouble, mortgage companies with a large number of prominent, well know Democrats at the helm.
It is amazing how well the economy is doing, with the housing bubble bursting, mortgage problems and the high price of gasoline.
The New York times wants us to worry about the economy, but they want us to blame Bush.
Big surprise!
Legislation to fight “global warming” will cause higher prices, which is INFLATION.
Legislation to fight “global warming” will increase energy prices, which is INFLATION.
Legislation to fight “global warming” will cause even more unemployment.
Ron Paul vs Bernanke this morning.
http://www.youtube.com/watch?v=aT0txlTod8w
Franklin,
Your definition of Inflation is very confusing to me.
A rise in prices is a cause of inflation. Not inflation itself.
Inflation is an increase in the money supply.
Improving efficiency does not cause inflation.
“You bring up auto industry layoffs. No mention that those layoffs are largely the result of energy prices. No mention that it is the Democrat party that will not let us drill enough domestic oil wells to bring down the price of oil.”
More dishonesty from Paul. Oil companies have numerous permits for oil wells which they refuse to use. They want more permits so they can lock up more oil resources and engage in more price fixing. The Democratic Congress has already said it will gladly provide more drilling permits if the oil companies agree to either use the ones they have or return the ones they refuse to use.
Paul also forgets it was a Republican President who first implemented the drilling ban, and it’s no surprise that two Republican Florida governors opposed offshore drilling. It may have something to do with the numerous oil spills that resulted from natural disasters. Florida has more to make off clean beaches than oily ones.
As for the rising costs of consumer goods that can only please the neo-cons who engage in disaster capitalism. Wasn’t moving so many jobs overseas and eliminating tariffs (there is a 23% tariff to send an American car to China but only a 2% tariff to send a Chinese car to America) supposed to result in ubercheap goods? I can buy American made clothing for the same price as foreign made clothing.
“Legislation to fight “global warming” will cause higher prices, which is INFLATION.
Legislation to fight “global warming” will increase energy prices, which is INFLATION.
Legislation to fight “global warming” will cause even more unemployment.”
More dishonesty from Paul. Never mind the fact that Lieberman’s bill to combat global warming never passed so America currently has no “global warming” legislation. Investment in infrastructure to be more energy efficient will improve the economy. It’s no surprise that European nations are investing heavily in alternative energy and their economies are doing quite well compared to America’s.
If Paul’s observation is correct then the more inefficient American automobiles should be selling better than the more efficient Japanese cars. However, Honda and Toyota have gained huge increases in market share with increased sales of smaller, more efficient cars while American manufacturers are shutting down, or cutting back, constructions of SUVs and large trucks. Had America invested in greater fuel efficiency in the past we’d be more competitive to foreign companies.
If there is one thing that I wish America’s youth were learn from German youth is to save their money. German’s are quite disciplined saving their money for the future.
Learning to be economical with yourself goes a long way turning the economy into one of risky misadventure into a comfortable stance of economic security.
Economics starts at home, not at the market place.
I thnk Franklin’s definition is right on. With Congress pushing for “carbon emission friendly” automobiles because of this Global Warming lie, the more it puts us behind financially.
The farmers plant corn instead of wheat to produce ethanol. This caused not only the corn prices to grow but the wheat prices too. In addition, farmers can have bad years which we saw with all of the floods in the Midwest. Drilling oil just makes more sense.
Oil is the more efficient way, it is better and it can be used for many products. If we started drilling here, we would bring down the price immediately because the competition would start to bring down their prices. Then we would also have jobs because we would start opening up more oil wells and refineries. Then our automobile industries wouldn’t have to lay off their workers. With prices going down more people could afford to buy more products. Just the other day, they were saying that some of our airlines might have to close down. If we had more money and fuel costs less, we could afford to fly. That goes for a lot of businesses.
By the way, have you ever read Atlas Shrugged? It is a very good case on why socialism doesn’t work. It’s been great so far.
The definition of inflation is an increase in the money supply. Prices rising are a cause of inflation.
You would be better off to understand this basic economic concept. You can then go after the problem.
The BorgHunter sounds like a Sean Hannity sound bite.
The rise in prices is because we have increased the money supply. The value of the commodity has not fluctuated that much. It is the price that is manpulated.
Learn the difference between value and price.
Reducing our dependance on foreign energy should be the number one goal. We have existing technology.
check out: http://www.pickensplan.com
He is only trying to get us dependant on ourselves for energy. He is absolutely correct here. Any argument against this is only feeding the current disaster we face.
Don’t come on here repeating media puppet sentiments because I will chew them up and spit tem out.
Good points objectivist. With the dollar down so much against the Euro it should come as no surprise that imported commodities cost more.
Pickens is right – we can and should develop alternatives. That would be anti-inflationary as would be improved efficiency.
“No mention that it is the Democrat party that will not let us drill enough domestic oil wells to bring down the price of oil.”
Oil is placed on the world market – oil companies being international and all that. The world demand for oil is increasing so that any new supply obtained from U.S. sources will have little to no effect on the price of oil. Paul probably knows this, but chooses to lie for partisan benefit. How do you know when econ is lying? His keyboard is making clicking sounds.
By the way, have you ever read Atlas Shrugged? It is a very good case on why socialism doesn’t work. It’s been great so far.
__________________________________________________
Atlas Shrugged is a great book. It is a great case for individualism. It is proving our men in Washington wrong more and more everyday.
When trying to degrade a Democrat with Atlas Shrugged, don’t forget to mention the Republicans as well. THere is no difference between the two parties.
Do a wiki search on neoconservatism. The Republican party has been highjacked by paleoliberals. Both believe in Socialism. Just look at how the Republicans support democratic programs and departments.
Fact is just mean sometimes, isn’t it?
By the way, have you ever read Atlas Shrugged? It is a very good case on why socialism doesn’t work. It’s been great so far.
__________________________________________________
Atlas Shrugged is a wonderful book. It is a great case for individualism. All kids should be reading this book in our schools, but we wouldn’t want to raise any critical thinkers would we.
When trying to degrade a Democrat with Atlas Shrugged, don’t forget to mention the Republicans as well. There is no difference between the two parties.
Do a wiki search on neoconservatism. The Republican party has been highjacked by paleoliberals. Both believe in Socialism. Just look at how the Republicans support democratic programs and departments.
Fact is just mean sometimes, isn’t it?
Sorry for the double post
Regular
Posted July 16, 2008 at 2:30 pm | Permalin
Economics starts at home, not at the market place
===================================================
For once I agree . . .partially.
The savings rate in this country is a -1.2%, down from 8% in the 90’s. People are using their credit cards as “emergency” funds. The average person in this country owes over $9000 on credit cards. Consumerism is out of control, and it is partially the fault of the lenders.
One deep look at the mortgage industry, and one finds lenders approving loans to people with credit ratings as low as 620, borrowers lying about their income, and the lenders failing to verify the info. Outfits like Countrywide buying CDO’s by putting as little as 1% down on billion dollar CDO’s. Countrywide should be required reading for anybody in, or getting into, finances. They had $58 billion cash on hand, owed an outstanding 520 billion on the CDO’s. A 3% drop in the market would wipe them out. Hedge funds backed them up. Why? Hedge fund managers wanted Countrywide to fail: they could then own it for less than 58 billion.
Business as a whole is out of control. With the energy prices the way they are, it will soon cost more to ship products from overseas, then it would be top continue making them here. The world is catching up to the states in both wages and energy costs. Sending jobs overseas just got a lot more expensive. The so-called free trade agreement ain’t free no more. (okay, a bit off topic)
It boils down to: people saving, government regulation of the mortgage industry, and lending institutions looking at who they’re lending to. Gee, wouldn’t that be something?
“Learning to be economical with yourself goes a long way turning the economy into one of risky misadventure into a comfortable stance of economic security.”
this from a man )I use the term very loosely here) who has no children (or 1 depending on what name he is using today) —– hard to save money when you can barely get by because the WPE who’s i;;egal war spending has put us in this position — don’t forget
MCCAIN = BUSH
REGULAR = LOSER
The American economy is just plain broken because of terrible governance leading to the US importing way more than it exports, real wages way down, personal debt up and Bush is still negotiating free trade deals! Deals that have made the top % in all the countries involved rich beyond their dreams. Now the largest debtor nation ever, has seen incomes rise but only with the top 1% as the gap between them and the rest of the workers has widened. The auto, oil, coal and finance lobbyist have had their way eased by such rulings that allowed SUV’s to be considered a truck rather than a car so as to skirt the lower emission standards demanded from pure automobiles. America spends hugely in Iraq and gave the biggest tax cut ever to only the top % of vested interests. Wall St. has made billions from unsupervied transactions propped up by promises to do their own policing and got way with deregulating everything they could get their hands on leaving “guess who” to pick up the tab. Face it folks America is the Emperor with no clothes, the world knows it and they will react in the Good Old American Way, they will make money off the predicament. Ever wondered why European (and other) airlines are not hurting like American carriers? Same oil costs, same capital investment, higher wages (with health care), way more vacation time and a stronger safety net for the the unemployed. hmmmmm
Greenspan is an Objectivist, look at the wonderous way he managed to screw up the economy by promoting the real estate collapse. Such is the result when religious nuts are in charge of the economy.
“The American economy is just plain broken…”
Gramm was right.
“Consumerism is out of control, and it is partially the fault of the lenders. ”
J Walker don’t dispute much of what you say — but this president told us to go shopping after 9 11 — so all the war supporters did just that —- no one (except for the military – and defense contractors) was asked to make any sacrifice to support the war — just think mif he had said he’d like voluntary participation to cut oil consumption
—- but no that would irritate the bush co allies in Saudi Arabia (who had more involvemnt in 911 than Iraq) and we wouldn’t that …
What OUR 4.00 dollar gas is buying —- for Muslims and Saudi’s :
http://www.dubaicityguide.com/index1.asp
I am glad that most folks think they have to have the newest and best everything. It helps the economy when you spend yourself into debt.
But if you want some common sense personal financial advice on how to get out of the hole and stay there. And no, you can’t spend your way out of the hole.
http://www.daveramsey.com/
…. and what about bushes friends the saudi’s / muslims —- why no criticism of him and his muslim / saudi connections —— hypocrisy has a firm foothold in the White House …….
But if you want some common sense personal financial advice on how to get out of the hole and stay there. And no, you can’t spend your way out of the hole.
BUSH diasagrees
Legislation to fight “global warming” will decrease the number of US dollars going out of the country to buy oil.
Legislation to fight “global warming” will create more jobs in new green industries.
Legislation to fight “global warming” will make business more profitable.
Waste is not a conservative value. Far too much of our energy is wasted.
see http://www.rmi.org
Don’t fail to note that this drill / not drill is a phony wedge issue created by the Republicans, because they ain’t got nothing else.
General Motors has been ignoring the writing on the wall concerning gas mileage for decades. I always buy the highest quality and highest mileage vehicle I can find. Those criteria always leads me to buy imports.
Americans are buying cars, just not the gas guzzlers. Sell us greener transportation. European cars – even those made by American companies – get 50 – 60% better gas mileage.
Someone tell me why we are offered send rate technology.
Conserve now, drill later – much later.
“Those criteria always leads me to buy imports”
I used those criteria and bought an American-,ade car. A Honda Civic.
American-made
can’t type this late …
“I always buy the highest quality and highest mileage vehicle I can find.”
Oh, brother. Just what do the buy-here, pay-here places offer?
Maggot
On oil lease issues, you are out of your league. You clearly do NOT know what you are talking about.
There is already a “use it or loose it” rule, as far as leases on Federal land is concerned.
More over, every state that I am aware of requires that a lease be turned into productive property, within some time limits.
Otherwise, property owners would have no ability to “fire” a lease holder that did not produce.
Furthermore, a lease on land that has no oil is of absolutely no value. Such a lease will terminate, on its own, but nobody will care.
A lease on land that might have oil will still require testing, maping, seismic and other start up functions, prior to drilling.
If you see a rig, currently drilling, today, I guarantee you that the “work” on that well started a long, long time ago. However, the well is not officially “productive” until it strikes oil.
Maggot
The unemployment rate, in Europe, is higher than our current unemployment rate, the last time I checked.
Economic growth, in Europe, has generally lagged growth in the United States, most of the time, for most of the last 50 years.
The socialism of Europe tends to “tax” growth.
That is what a “tax” does, it slows the economy.
If something is “taxing” it is harmful.
By the way, England and France and other European countries are tending to get more conservative, in recent elections.
Obectivist,
Come on, dont get pedantic about inflation.
We have energy inflation, food inflation, medical inflation, etc, which is simply a measure of the price increase in certain sectors.
According to “Frankie” everything will be just hunky-dory if we were just to “believe” in the Bush economic plan.
You know, the plan to steal from the poor and give to the rich.
Object
Are you serious?
The “Pickens Plan” is ok, to a point.
However, it is nearly impossible to drill for natural gas without “liquids” or OIL being produced, in the process.
Also, there IS no “alternative” for oil. There are some “substitutes” which can help. There are also “substitutes which hurt, such as corn based ethanol. However, there is NO long term “alternative” for oil, anytime soon.
Shale oil is possible, if we can figure out how to extract it, we have huge reserves.
Frozen Methane is also a strong possibility. Japan is way ahead of us in exploring for Methane Ice reserves.
Coal gassification or coal liquification is also a strong possibility in the futre.
No matter what we do, fossil fuel will remain a primary source of energy for at least 50 years.
Wind and solar can not power automobiles. Natural gas is a possibility, but it has drawbacks.
Wind can only supplement current grids. Wind is too unpredictable to be a major source of electricity.
Again, liberals want to TAX carbon, which will increase the cost of EVERYTHING.
We will pay “inflated costs” due to the global warming hoax.
Steven
You are wrong, price is determined by supply and demand and more supply will work to keep prices lower.
However, even if drilling more, here, did not help with price (and it will) “Drill here Drill NOW!” absolutely will produce jobs and huge tax revenues for the state, local and federal governments.
“Again, liberals want to TAX carbon”
And CONservatives want to give tax credits and tax cuts to the already wealthy and corporations because they are so “benevolent and generous to the ‘poor folks’ and they just ‘love’ America and would do ANYTHING for our country.”
Yeah, right.
Yeah, these folks would sell their own mothers into prostitution if they thought they could make a buck off of her ass.
“You know, the plan to steal from the poor and give to the rich.”
Aside from the silliness of “stealing from the poor” (what’s to steal?), what is “rich”?
We are drilling here and we are drilling now. I suspect every available rig is working. That is why the president’s recent move was purely political.
http://intelligencepress.com/features/bakerhughes/
“Drill here Drill NOW!”
So why haven’t you dickheads been drilling?
You have 69 million unexplored acres under permit and you hypocrites haven’t drill a single hole.
Drill or STFU.
Dickheads.
You silly Libs don’t understand.
Corporations aren’t taxed. They are the middle folks (Unpaid collectors, really).
Economics 101: Who really pays the taxes?
Answer: This is easy. You may discuss.
Drill the Leases! Or We’ll repeal the Leases!
I think Globalization is the buzzword for the Elitist of every country to come together and screw the masses, this is The New World Order ( same as the Old World Order, just globalized).
You are wrong, price is determined by supply and demand and more supply will work to keep prices lower.
The price of oil, however, is determined by a futures market, which buys and sells more oil than there is on the planet. The oil price we pay reflects the demand for futures contracts, or greed demand, not the demand for oil. The market was intended so that oil users could lock in a future price, but the largest holder of oil in the world, I read recently, is a New York brokerage firm, which has no more use for petroleum than an Eskimo.
“You have 69 million unexplored acres under permit and you hypocrites haven’t drill a single hole.”
Economics 101: Why haven’t they drilled? Aren’t they the “greedy” bastards?
Class: Why haven’t they drilled? Do they hate profit?
Class: Please define “greed”.
“New technology” can not be legislated.
The royalty of the dark ages told their alchemists to turn lead into gold.
No matter how much money was spent, no matter how much was promised, no matter what laws were passed — in NEVER happened.
There is no “new technology” to replace oil.
If you truly believe that oil will be replaced, anytime soon, you should DEMAND that we “drill here, drill now” — because that oil will soon be worthless, if you truly believe an alternative is possible.
There is NO alternative. We need oil, period.
Alternatives will only supplement our needs. Alternatives will not replace or need for oil, alternatives can only reduce our need for oil.
Paul, I’ll remember that you are one of those who still think China is drilling off the Florida shores, so pardon me if I don’t take your word for anything.
If the case was that the leases could be revoked by oil companies that aren’t drilling on land already leased to them then Congress wouldn’t need to introduce a bill to do that very thing. Yet they are:
http://uk.reuters.com/article/oilRpt/idUKN1532790420080716
Paulie, perhaps you should inform Congress that such legislation is unnecessary. The Democrats are just following good old family values and telling the oil companies to finish what’s on their plate before asking for seconds. If the land which already has been leased for isn’t profitable then it would be no problem for the oil companies to sell them off to independent wildcatters.
As for your claim that unemployment is higher in Europe, well that’s just false. Europe happens to count all unemployed, America fudges its numbers. America doesn’t not count those who have not worked in a year as unemployed but labels them “discouraged workers”. Also, if you have two jobs then you are counted twice, and no consideration is taken for those who are underemployed. If you have a job where you work only five hours a week then you are considered fully employed. Actual U.S. unemployment is between 9 and 12%.
http://www.blueoregon.com/2008/07/myth-busters-un.html
The current oil market is another classic bubble, I suspect. I believe that in my economics class, the rise in price due to demand was a lineal equation. We’ve had in the entire world in the past year, I heard on Bloomburg today, a one percent increase in the demand for oil.
WS
The greens want to give all kinds of “corporate welfare” —
Wind and solar will not work without subsidies, just like ethanol production would stop tomorrow, without subsidies.
Oil PAYS taxes. HUGE amounts of local, state and federal tax revenues are generated by oil and gas production.
Enviromentalism requires huge subsidies, or huge WELFARE to the green movement.
I doubt if the oil companies are even asking for any additional leases. The recent demand to drill in Alaska and offshore is just pure politics, meant to fool the stupid public. It worked.
Solar for home use has a long pay out period, but it works right now, with no government help.
beber
you are a conspiracy kook.
Speculation can not dictate, long term, the value or price of anything.
Speculators can make the market more volatile.
Many speculators just got BURNED today, however.
When the price of oil comes down, it comes down RAPIDLY.
Supply and demand determine price.
Futures contracts simply try to predict future prices, and only serve to speed price movements in one direction or the other.
The rule of economics is:
Better, faster, cheaper.
The greenies don’t have those yet.
You forgot “cleaner” fleettwood.
WS
You are wrong.
“Unproductive” and “Unexplored” are two entirely different things.
There might be 69 million acres under lease.
Those leases expire, AUTOMATICALLY, if not produced.
Most of those acres, the overwhelming majority of acres, contain NO oil.
They have been explored, and there is NOTHING there.
On the acres that do contain oil?
It takes several months, even years, before testing, piplines, maps etc can be done, even if explored.
There is noone out there that has an accurate, perfect figure for how those 69 million acres break down.
However, it is ignorant or dishonest to claim that NOTHING is being done on those current leases.
It is also ignorant to demand that the leases expire, since that will happen on its own, on the worthless leases.
“Supply and demand determine price.”
Of course. Anybody remember the day traders?
They didn’t drive the price.
Fleetwood, if coal, oil and nuclear are so cheaper then why do they need so many subsidies and tax breaks?
Franklin. I don’t argue with idiots. The fact that the price dropped x dollars today with no change in supply or demand argues for itself.
“You forgot “cleaner” fleettwood.”
No I didn’t. That’s in better.
“Fleetwood, if coal, oil and nuclear are so cheaper then why do they need so many subsidies and tax breaks?”
You are forgetting the first rule. Businesses don’t pay taxes. The customers do.
“You are forgetting the first rule. Businesses don’t pay taxes. The customers do.”
So why do they demand their taxes to be reduced if they don’t actually pay any? If you are right then we can increase the taxes like they were back before Reagan.
beber
The price dropped due to reports that inventories rose.
You are a kook.
“Few Americans paid much attention last year when Cuban President Fidel Castro announced China would help explore potentially large oil reserves off Cuba’s northwest coast – not far from the Florida Keys.
But now – with gas prices climbing above $3 a gallon – the prospect of China drilling near the United States has become a hot political issue as two of the world’s largest economies vie for new sources of energy.
Some members of Congress warn that China and other countries could lock up oil supplies at a time when U.S. companies are barred from doing business with Cuba because of a 43-year-old trade embargo.”
http://www.sptimes.com/2006/05/08/Worldandnation/Cuba_seeks_oil_near_K.shtml
I did not ever say that China flew its flag from the rigs and that only China was in charge of the rigs. China is in a joint venture with Cuba.
Castro said so HIMSELF!
Maggot
Tell me what you think those “subsidies” are, would you please?
You do not know what you are talking about.
The oil and gas and coal industries pay billions of dollars in tax payments.
The only thing different, in calculating their taxess, is that they are not required to “expense” equipment costs over several years, since that would not be fair to investors and joint venture partners who put their money into dry holes or bad wells.
In the end, the net profits are figured pretty much the same way as in any other business.
And, there is a small “depletion allowance” on production revenues. That simply takes into account the fact that, unlike interest on a CD, the oil will will run out some day, while the CD can continue generating revenues forever.
Paul, China isn’t drilling off Florida’s shores. Can you find anything beyond 2006 to actually support your lie? Nah, of course you can’t. You revel in your dishonesty.
You are a conspiracy kook.
http://tpmelectioncentral.talkingpointsmemo.com/2008/07/breaking_goper_retracts_bogus.php
“So why do they demand their taxes to be reduced if they don’t actually pay any?”
Because they don’t hate the American consumer.
“Between 1948 and 1998, the federal government spent $111.5 billion on energy research and development programs. Of this amount, 60 percent, or $66 billion, was dedicated to nuclear energy research, and 23 percent, or $26 billion, was directed to fossil fuel research.”[PIRG]
“Management Information Services, Inc. (MISI), conducting a study of the cumulative effects of energy subsidies, found that by 1997 Federal subsidies for energy had amounted to $564 billion (1997 dollars) over the last five decades, roughly half of which went to the oil industry in the form of tax expenditures. MISI considered eight categories of Federal activity and quantified subsidies in six. In contrast to other findings, MISI found that subsidies to renewable sources ($90 billion) outpaced those to natural gas ($73 billion), coal ($68 billion), or nuclear energy ($61 billion).”
[eia.doe.gov]
“Because they don’t hate the American consumer.”
Could you provide documentation of that claim?
“Could you provide documentation of that claim?”
That’s weak.
You made the claim. Enron didn’t sound very respectful when they were talking about robbing a grandma of her money.
Franklin: If the European economies are lagging why has the Euro gained so well against the dollar? The war which devastated Europe, forced them to lag behind American numbers, but not any more nor has it been so for some years. The Eastern European countries are now just shaking off the dust of Communism, dragging down the average numbers offsetting the brilliant, western part of the EU. The bechmarks we set to determine unemployment are different than Europeans whose taxation (VAT)is based on consumption not production hence aiding not hurting producion of goods and services. Australia and Canada switched to a similar taxation system and their economies are in good shape last time I looked. Look how their currencies rose from about .62 to par against the greenback because all money or currency is a medium of exchange, based soley on confidence ergo the buck has tanked, as it should. Have you seen what they get for their taxes which is around 34% vs the US which is around 28%? How much of your net income goes to health insurance? Now add that to your overall taxation bill. Then throw in 5 weeks + of paid vacation and one years’ maternity leave. They get what the want and have though taxation, with no complaints for they vote there you know and if they weren’t happy they’d change governance! Finally, Conservative and Liberal outside the US does not have the same connotation, ie. their Conservatives would be left-Liberals here and their Liberals akin to Labor Party or Socialists as in the UK.
Enviromental lawsuits, another reason we have trouble drilling HERE:
http://www.daily-times.com/ci_9893504?source=most_viewed
“Group challenges another oil, gas lease sale
By Cornelia de Bruin The Daily Times
Article Launched: 07/16/2008 12:00:00 AM MDT
FARMINGTON — Western Environmental Law Center is challenging today’s sale of 80 parcels of federal land in New Mexico and three other states.
It’s the second protest filed by the Environmental Law Center on behalf of numerous environmental groups and individuals, and affects 80 parcels totaling 62,777 acres of federal land in New Mexico, Oklahoma, Kansas and Texas. Fifty-one parcels, or 43,169 acres, are in New Mexico.
The Bureau of Land Management tossed protests filed in April 2008 by Western Environmental Law Center and WildEarth Guardians to its April sale of 61 natural gas leases.
The result is the leases sold during the April 16 sale will be awarded effective Aug. 1 to the bidders who purchased them.
The two pro-environment organizations alleged —”
Oil companies drill where they think they can make money. If they are not drilling, it is because Congress or the Courts will not let them, or it is because THERE IS NO OIL on that lease!
(Or, they are planning to drill, but it takes a long time from decision date to drill date.)
Maggot
There is a JOINT VENTURE between China and Cuba.
I never said that China was running the entire venture.
Maggot
Nope, your answer is weak.
Your left wing group calls it a “subsidy” if you take a tax deduction for research and development.
Taking a legal expense write off is not a subsidy.
Moreover, the oil industry pays a huge amount of money, in taxes.
Maggot
I posted a link to a news article on China and Cuba’s joint oil venture that was only 2 years old.
you wanted something more recent.
However, on your bogus, “subsidy” issue, you give me something from 1997??
You are a strange guy.
The Department of Energy is a liberal group Paul? That’s interesting.
I see you can’t present anything past 2006 to support your China lie. Not like that is unusual with you. Funny how I can present recent news to support my claim. I guess I’ve just outclassed you yet again. Are you addicted to being pwnd?
No Franklin, the market dropped because speculators, seeing that there was a small increase in gasoline in storage, sold off contracts. In other words, the price of contracts decreased. Unless a contract was actually delivered, no one bought any oil and no one sold any oil. They traded some paper. That’s why participation in futures markets ought to be limited to people who actually use or have a demand for the raw product. Then the price of oil would actually reflect demand.
The commodities markets distort the absolutely proportional classic supply and demand curves by allowing speculators whose only motive is profit to enter the market.
Another distortion is the deterioration of our dollar, directly attributable to the Bush administration, especially the endless expense of war, and the unbalancing of the budget caused by tax cuts.
Exxon had income of $20 billion on total world-wide revenue of $116 billion. Its earnings statement shows that the company paid $9.3 billion in income taxes to governments here and abroad. This amounts to an effective tax rate of more than 46 percent, 10 percentage points higher than the U.S. statutory rate of 35 percent.
“However, on your bogus, “subsidy” issue, you give me something from 1997??”
Did I? That’s interesting. Since the report mentioned 1997 dollars they were clearly using those figures to measure for changes in inflation. But I suppose that would take some reading comprehension, not your strong suit.
Franklin, until you drill you can’t know whether there is any oil. The oil companies used to drill nine times where there was “no oil” to one time where there “was oil.” With the new seismography, that’s improved spectacularly, which is one reason fewer rigs are running during this oil boom than during the one in the 80s. It takes only one or two rigs to recover as much oil as ten did in the past. Then tanks, pipelines and infrastructure have to be built.
The reason the oil companies aren’t drilling their current offshore leases is that there are no deep sea rigs available, although many are now being built. Wasn’t it Linda Links who revealed that in all the world, there is only 17 such rigs, and most of these are leased to Petrobras.
Just how many of the new deep sea drilling rigs are scheduled to work on American leases? Unless you know that, you’re just spewing b.s.
There are “implied covenants” in ANY oil and gas lease or any mineral lease.
Even if NOT included in the lease contract, the courts have held than ANY lease holder has the right to terminated a lease for lack of production, after a period of time:
http://www.mosburgoil-gas.com/html/mosburg_primer_ogl4_11_96_2a.html
“What Are These “Implied Covenants”? The covenants that are generally implied in the modern Oil & Gas Lease — again, absent an express provision in the lease nullifying such an implied covenant or otherwise expressly covering its subject matter — are as follows:
The Implied Covenant to Protect Against Drainage (the Implied Covenant to Offset)
The Implied Covenant to Further Develop
The Implied Covenant to Market
The Implied Covenant of Prudent Operations.
Each of these covenants imposes an obligation on the Lessee to act as a reasonable prudent operator in each of these areas. This imposes a three-fold obligation: to act in good faith, to act competently, and to take into account (though not as a “fiduciary”) the legitimate interests of the lessor.
Under this standard:
The Lessee is required to offset a well which is draining the leased premises if a prudent operator would drill an offset (i.e., if it appears that the offset would likely be profitable). 3
The Lessee is required to drill additional locations and to drill to other formations if a prudent operator would take that action . 4
The Lessee must make reasonable efforts to market the production. 5
The Lessee must conduct operations in a diligent and proper manner . 6
Remedies for Breach.Damages are nearly always available for breach of the Implied Covenants, with the measure being the amount of royalties that the Lessor would have received if it were not for the improper conduct.7 However, in most states, cancellation of the lease will also be allowed as an alternative remedy.
When cancellation is being sought, the Lessor must give the Lessee notice, and an opportunity to correct. If the court orders cancellation of the lease, the order will usually be in the form of an alternative decree, under which the Lessee will be given an opportunity to correct the breach.
—–
This is true even if NOT stated in the contract.
The BLM or Federal Bureau of Land Management is in charge of virtually all mineral leases, on federal land.
BLM contracts generally contain a production clause and a forfeiture clause, in writing.
Even if they don’t — the courts have held that the oil company MUST produce, or forfeit the lease.
BLM has the same right, today, under the law, as any farmer or rancher to terminated a lease for lack of production, no further Act of Congress is necessary.
Maggot
You fail again.
MISI INC ? does that sound like the Department of Energy?
MISI INC gave you your bogus “subsidy” figures, not the Department of Energy.
If I buy stamps, and write that stamp purchase off of my taxes, is it a “subsidy” that I took an expense write off on my taxes?
beber
Futures markets can operate anywhere in the world.
If you outlaw them here, they will just “outsource” overseas.
Supply and demand are still at play.
Higher inventory reduced price.
That this happened in the futures markets does not change the fact that supply and demand are at work.
I should have said “lease grantor” rather than “lease holder” above.
If any of you libs understood this subject, you would have corrected me by now.
Of course supply and demand are at work, Franklin. But the demand for oil did not double in the past year as the price did.
We’ll see what happens tomorrow. I suspect the market will slide for a while, that is, until the next “crisis.” And I didn’t say outlaw the futures marked. I said regulate it. It was deregulation that got us into the housing pickle. What do you think the federal gvmt. under Bush will do when a bunch of New York brokerage house are rendered insolvent because they hold too many futures contracts.
Obama is an Arab – at least 44% – so he should be able to find oil – you know – it’s in their blood.
/sarcasm/
beber
What economics text book is it that informed you (falsely) that supply and demand impact price in a linear fashion?
Price is always determined at the margins, at the last unit sold for the day.
A very small imbalance in supply or demand will often have an exponential impact on price.
It is not simple addition or subtraction. It is not even simple multiplication or division.
In simple terms, the “spot price” indicates how much the market is, that day, willing to pay, in order to make sure that the “last buyer” does not RUN OUT of oil.
Demand in just about any commodity could go up by 1% and, with no increase in supply, impact price by several magnitudes above that number.
beber
Actually, Freddie Mac and Fannie Mae have both had quite a few high powered Democrats and/or Clinton cronies in top management.
However, to answer your question directly: To date, there has not been a “bail out” in the true sense of the word, in the finanial mess this last several months.
It is not the corporate share holders that were protected at Bear Stearns. They got screwed.
At IndyMac, I think that bank could have made it, if Chucky Shumer had not grandstanded so much. Shumer caused the run on the bank. No bank can survive a run. In that case, the shareholders of the bank got screwed.
Savings banks, commercial banks and investment banks perform vital services that must be replaced, by someone, if those firms stop doing business. Moreover, a general “run” on financial assets must be avoided, at all cost, no matter what.
The general health of the economy, and the general peace of mind of the average American, would not be shaken by the failure of a commodities or futures market trader.
The “general welfare” would not be as greatly impacted.
If the government let an investment bank, commercial bank or savings bank go under without protections being granted to the CUSTOMERS of those businesses, we would have a general panic on our hands.
“Actually, Freddie Mac and Fannie Mae have both had quite a few high powered Democrats and/or Clinton cronies in top management”
As usual, Rosseel blames it all on the Democrats.
Cox Ucker.
Vote for Obama so it can get worse…he will make sure it does
Like I said Franklin, I don’t argue with idiots.
I hear Paul’s keyboard clicking.
There must be lying going on.
Rossell is shilling,
Has to be profit taking, making its way, and gone.
Paul is full of sh*t,
He lies everyday and we won’t forget
Republicans are pure according to his writ,
We all know differently and we won’t forget…
Paul is a lying bastard,
That we all know, he has never had a clue.
Paul is only the last turd,
We can only hope he’s the end of the poo.
Chorus:
Paul’s keyboard cliks,
The result is lying kicks.
All lies are for the GOP,
Never to be considered the SOP.
Imagine this song as done by Guy Clark, it would be a laugh:
http://www.countrymusichalloffame.com/site/multimedia-video.aspx?cid=1741
Steven you are like a Gremlin. You shouldn’t be allowed to post after midnight.
Thanks, Nathan.
Define Gremlin.
I’ll help you:
A gremlin is a folkloric creature, commonly depicted as mischievous and mechanically oriented with a specific interest in aircraft. Although their origin is found in myths among airmen, claiming that the gremlins were responsible for sabotaging aircraft, one authority in folklore states that “some people” derive the name from the Old English word gremian, “to vex”.[1] In later times, different fantastical creatures have been referred to as gremlins, bearing varying degrees of resemblance to the original gremlins.
http://en.wikipedia.org/wiki/Gremlin
I am not especially interested in aircraft. So, you might be wrong one more time. Your being wrong so many times, over and over, gets old, doesn’t it?
Good night…
Chas
Posted July 17, 2008 at 3:39 am | Permalink
Good night; good luck; God bless —-
Whatever you conceive God to be!!
Blessings ALL!!
So mote it be!!
Last thought: WHY is it that when one reads a large bit of content on the Blog, that Franklin is always right, and everybody else is WRONG?? (As Franklin interprets it, of course) LOL
Must be nice on that top branch…. oooops what out for the squirrrrrrrrrreeeeellllllllllll!!!
My Father-in-Law has hauled crude for 35 years. He told me the other day that every refinery around here is running at 120%. There’s plenty of oil. This is price control at best and the end of our economy at worst. And it’s the latter that is the goal.
Pleefer
How in the hell does your father in law know what world wide supply is?
How in the hell does your father in law know what world wide demand is?
How in the world does your father in law know what projected supply, next year, will be?
How in world does your father in law know what projected demand will be, a year from now?
He does not, of course.
Nobody knows for sure.
But the futures market does provide clues, based on real money and real risk taking by real experts on the subject.
Exxon, our largest domestic oil company, is not even in the top 10 oil producers in the entire world.
Who is “fixing” prices?
How is this accomplished?
Why would any American risk “price fixing” which would put them in prison, if caught? After all, they could make just as much money by this strategy:
Drill HERE Drill NOW!
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