Big Oil's "Obscene" Profits

[philhos]

Does big oil really have obscene profits?

According to Glenn Beck, oil company's have a profit margin of 8.7%.

To put it in comparison, Glenn listed the profit margins of the following (transcript from the show he mentioned this http://www.glennbeck.com/content/articles/article/198/11200/ ):
Hedge funds 87% <- something many politicians partake in
Healthcare facilities 48%
Publishing, periodicals, magazines 34%
Information delivery services 23%
Silver is 22%
Application software industry 22%
Shipping 21%
Copper 19%
Tobacco products 19%
Drug manufacturers 17%
Insurance brokers 16%
Beverages, wineries, distilleries 15%
Long distance carriers 15.8%
Railroads 13.9%
Steel and iron 13.8%
Cigarettes 13.7%
Integrated circuits, semiconductors 13.6%
Money center banks 10.8%
Hotel/motels 10.6%
Asset management 10.5%
Beverage, Brewers 10.5%
Resorts and casinos 10.5%

All those have greater profit margins than oil companies. So if we need to do something about oil's profits, then we need to look at all these other businesses first.

[CloeHokie]

Does big oil really have obscene profits?

According to Glenn Beck, oil company's have a profit margin of 8.7%.

To put it in comparison, Glenn listed the profit margins of the following (transcript from the show he mentioned this http://www.glennbeck.com/content/articles/article/198/11200/ ):
Hedge funds 87% <- something many politicians partake in
Healthcare facilities 48%
Publishing, periodicals, magazines 34%
Information delivery services 23%
Silver is 22%
Application software industry 22%
Shipping 21%
Copper 19%
Tobacco products 19%
Drug manufacturers 17%
Insurance brokers 16%
Beverages, wineries, distilleries 15%
Long distance carriers 15.8%
Railroads 13.9%
Steel and iron 13.8%
Cigarettes 13.7%
Integrated circuits, semiconductors 13.6%
Money center banks 10.8%
Hotel/motels 10.6%
Asset management 10.5%
Beverage, Brewers 10.5%
Resorts and casinos 10.5%

All those have greater profit margins than oil companies. So if we need to do something about oil's profits, then we need to look at all these other businesses first.

I dont have a problem with those 2 at least! :lol:

If this is the case why do I keep hearing the oil companies made more money than ever last year? Is that just bs?

[philhos]

I dont have a problem with those 2 at least! :lol:

If this is the case why do I keep hearing the oil companies made more money than ever last year? Is that just bs?

No, it's probably that this is the highest profit margin they ever had.

The problem is people look at just the total monetary amount of profit. So, for oil, the monetary amount of their profits probably exceeds just about everything I listed. But, when you take into consideration what makes up a profit (net income, net sale revenue, expenses, etc.) then you'll see that oil, while probably record breaking for the oil companies, still only had a profit margin of 8.5%

[BANJAXED]

No, it's probably that this is the highest profit margin they ever had.

The problem is people look at just the total monetary amount of profit. So, for oil, the monetary amount of their profits probably exceeds just about everything I listed. But, when you take into consideration what makes up a profit (net income, net sale revenue, expenses, etc.) then you'll see that oil, while probably record breaking for the oil companies, still only had a profit margin of 8.5%

It's made my personal "Profit Margin" become nonexistant and that's the one I care about at the end of the day. :angry:

You make a good point - from a margin perspective it doesn't come close then any other product or service in your list - but it is by far the most criticized and obviously affects more people on a global scale then any your list too. I think a lot has to do with people's low level of understanding of how business actually works. I agree they focus too much Gross and not enough on Net.

[barryllium]

This all leads me to two thoughts:

1) Way too much profit is being made by the CEO's and other higher-ups in pretty much every industry here in the US, with not nearly enough being passed on to the average worker.

2) So where is all the extra oil money going?

[TheBengals]

I don't agree with some politicians who want to take these oil company's profits. To me, that's stepping over the line, and against the principles of Capitalism. However, something has to be done about this. They're not making record profits for no reason; while we suffer from super high prices.
I'm stuck on this one. I don't want the government to take control of oil companies, but I also don't want them to run rampant with greed. Where is the middle ground?

[jmccracky]

This all leads me to two thoughts:

1) Way too much profit is being made by the CEO's and other higher-ups in pretty much every industry here in the US, with not nearly enough being passed on to the average worker.

2) So where is all the extra oil money going?

I was going to say the exact same thing. Kudos! Glenn Beck makes a good point. And it's a point to stick up for the oil companies. But we cannot just pretend that there is nothing wrong. Barry........are we related? We think too much alike. :rotf::hmm::p

[Danno]

I dont have a problem with those 2 at least! :lol:

If this is the case why do I keep hearing the oil companies made more money than ever last year? Is that just bs?


Well its a margin. Which means its a percent. So if your 6 or 8% before was only 12 - 16 cents with $2.00 gas, but now its $4.00 for gas... thats about 24 - 32 cents per gallon. So the higher the price, the higher the profit. They may have never changed their margins... still working in the same area.

Thats why you are seeing the higher profits :thumbsup:

side note: they could presumably drop the cost about 10-20 cents to cut their margin, but thats a small cut into it. The federal government makes far more on a gallon of gas than an oil company. If the gov really wants to help us in gas prices, they need to cut that tax. Lord knows they aren't spending that money they get wisely.

[thefo0]

I don't agree with some politicians who want to take these oil company's profits. To me, that's stepping over the line, and against the principles of Capitalism. However, something has to be done about this. They're not making record profits for no reason; while we suffer from super high prices.
I'm stuck on this one. I don't want the government to take control of oil companies, but I also don't want them to run rampant with greed. Where is the middle ground?

But, if you think about it, the principles of true capitalism have gone away for many big corporations. We are basically seeing a variety of large corporations avoiding operating within the free market system that is the basis of capitalism and operating in a nearly Soviet economic model.

There are a variety of means through which the government has created an unfair playing field for many large companies.

Here is a short list:

1. Subsidies
2. Tax breaks
3. Financial incentive packages to move a plant to a new city (you see this a lot in the news with the automobile industry)

Here is an interesting (slightly albeit outdated) article I found regarding the oil industry: http://www.ucsusa.org/clean_vehicles/fuel_economy/subsidizing-big-oil.html

My personal favorite non-free market industry is the Student Loan Industry. The Student Loan Industry has been able to operate in a nearly risk free environment since the passing of the Higher Education Act of 1965. The government backs many of the loans that these companies give out, so even if a student defaults, they get the money from the government and can still pursue the money from the student through heavy handed tactics such as garnishing wages. It is also impossible now to do away with student loans through bankruptcy -- a method only seen elsewhere with alimony payments and tax debt.

Sorry for rambling. But, this is a pet project of mine at work. I now pass on my spot on the soapbox.

:SoapBox:

[xxlt]

Well its a margin. Which means its a percent. So if your 6 or 8% before was only 12 - 16 cents with $2.00 gas, but now its $4.00 for gas... thats about 24 - 32 cents per gallon. So the higher the price, the higher the profit. They may have never changed their margins... still working in the same area.

Thats why you are seeing the higher profits :thumbsup:

side note: they could presumably drop the cost about 10-20 cents to cut their margin, but thats a small cut into it. The federal government makes far more on a gallon of gas than an oil company. If the gov really wants to help us in gas prices, they need to cut that tax. Lord knows they aren't spending that money they get wisely.

Well, most countries in Europe tax gas far more heavily than America does. I'm all for a free lunch just like the Republicans are. Of course, I am happy eating soup and a salad and they want free surf and turf. At some point, though, the bills of the government have to be paid. You know what? Cutting taxes has this strange way of making sure they aren't paid. And while every Republican dreams each night of smaller government, they wake up each morning holding a wet fish. Meanwhile by day under their watchful eye the government gets bigger and bigger, outpaced only by the deficit spending that is their true love.

I guess the Republican plan for eliminating the deficit (which they created when controlling both houses of Congress and the White House) would be forcing middle class people to buy a ticket once a week for $100 to watch homeless people and union members be fed to lions. Of course, admission would be free to the corporate suites and if you make over $500,000 a year you wouldn't have to attend. The objective would be to remind everyone who had to buy a ticket that "Arbeit macht frei."

Back to gas taxes, not everyone taxes gas as heavily as they do in the EU. In Venezuela gas sells for 20 cents a gallon. Of course, that is because those evil Venezuelans have nationalized gas. The horror, the horror! A national resource that everyone needs isn't being exploited for profit by a multinational corporation. AAAAAAAAAAAAAAAAAAHHHHHHHH!!!! Scary stuff indeed!

[Danno]

Well, most countries in Europe tax gas far more heavily than America does. I'm all for a free lunch just like the Republicans are. Of course, I am happy eating soup and a salad and they want free surf and turf. At some point, though, the bills of the government have to be paid. You know what? Cutting taxes has this strange way of making sure they aren't paid. And while every Republican dreams each night of smaller government, they wake up each morning holding a wet fish. Meanwhile by day under their watchful eye the government gets bigger and bigger, outpaced only by the deficit spending that is their true love.

I guess the Republican plan for eliminating the deficit (which they created when controlling both houses of Congress and the White House) would be forcing middle class people to buy a ticket once a week for $100 to watch homeless people and union members be fed to lions. Of course, admission would be free to the corporate suites and if you make over $500,000 a year you wouldn't have to attend. The objective would be to remind everyone who had to buy a ticket that "Arbeit macht frei."

Back to gas taxes, not everyone taxes gas as heavily as they do in the EU. In Venezuela gas sells for 20 cents a gallon. Of course, that is because those evil Venezuelans have nationalized gas. The horror, the horror! A national resource that everyone needs isn't being exploited for profit by a multinational corporation. AAAAAAAAAAAAAAAAAAHHHHHHHH!!!! Scary stuff indeed!


Um.... Ok. Wasn't really talking about republicans and all that. I think this is a problem on both sides.

As for cutting the taxes. Well, its a valid point. You need to pay the Bills. I am not denying that. The problem is that, and you have to agree with me on this, there is a LOT of wasteful spending in the government. I personally would like to see this get cleaned up and have to pay less, rather than keep it at the same levels or pay even more. Like SS. It is already doomed; they bankrupted it. So every paycheck I get to throw away money for a program that won't be there for me when I retire. I'd like to have the option to take some of that money and invest it myself. But lord knows congress won't support such a privatizing effort; that would mean more personal responsibility on the part of the citizens and less money for them to waste.

As far as how other countries are handling oil and taxes. I only care a slight bit, because while there might be some things we can learn, we have to remember we are not those other countries. Not everything translates perfectly over cultures / nations.

[sloppy lombardi slaps]

Does big oil really have obscene profits?

According to Glenn Beck, oil company's have a profit margin of 8.7%.

To put it in comparison, Glenn listed the profit margins of the following (transcript from the show he mentioned this http://www.glennbeck.com/content/articles/article/198/11200/ ):
Hedge funds 87% <- something many politicians partake in
Healthcare facilities 48%
Publishing, periodicals, magazines 34%
Information delivery services 23%
Silver is 22%
Application software industry 22%
Shipping 21%
Copper 19%
Tobacco products 19%
Drug manufacturers 17%
Insurance brokers 16%
Beverages, wineries, distilleries 15%
Long distance carriers 15.8%
Railroads 13.9%
Steel and iron 13.8%
Cigarettes 13.7%
Integrated circuits, semiconductors 13.6%
Money center banks 10.8%
Hotel/motels 10.6%
Asset management 10.5%
Beverage, Brewers 10.5%
Resorts and casinos 10.5%

All those have greater profit margins than oil companies. So if we need to do something about oil's profits, then we need to look at all these other businesses first.

sure the profit margin is only 8.7, but when you're making billions and billions and billions thats still a great deal of money to buy legislation.

[xxlt]

Um.... Ok. Wasn't really talking about republicans and all that. I think this is a problem on both sides.

As for cutting the taxes. Well, its a valid point. You need to pay the Bills. I am not denying that. The problem is that, and you have to agree with me on this, there is a LOT of wasteful spending in the government. I personally would like to see this get cleaned up and have to pay less, rather than keep it at the same levels or pay even more. Like SS. It is already doomed; they bankrupted it. So every paycheck I get to throw away money for a program that won't be there for me when I retire. I'd like to have the option to take some of that money and invest it myself. But lord knows congress won't support such a privatizing effort; that would mean more personal responsibility on the part of the citizens and less money for them to waste.

As far as how other countries are handling oil and taxes. I only care a slight bit, because while there might be some things we can learn, we have to remember we are not those other countries. Not everything translates perfectly over cultures / nations.

I think we essentially are in agreement. I just don't think privatization is a panacea. And, I think SS can be "un-bankrupted" but it will take bipartisan work. Shrinking some, but not all, government programs is certainly in order. Your last point - everything doesn't translate over is a good one, but I think the previous one that we can learn from others is more significant.

[barryllium]

I think we essentially are in agreement. I just don't think privatization is a panacea. And, I think SS can be "un-bankrupted" but it will take bipartisan work. Shrinking some, but not all, government programs is certainly in order. Your last point - everything doesn't translate over is a good one, but I think the previous one that we can learn from others is more significant.

You misspelled pancake...
http://www.bfeedme.com/wp-content/uploads/2007/02/berry-pancakes-recipe-2-21-07.jpg

In the end, I agree with what I think you and Danno agree on - decrease wasteful government spending, look at what has worked for other countries, and then start figuring out which governmental programs (like SS) need drastic changes made to them. Afterall, it's really hard to figure out how to fix econimic issues when such drastic things are happening (Iraq war, record government budget deficit) are in the way of seeing the real problems, as well as causing other problems (devaluing the dollar, losing foreign investors, etc.).

[DennyG2]

Does big oil really have obscene profits?

According to Glenn Beck, oil company's have a profit margin of 8.7%.

To put it in comparison, Glenn listed the profit margins of the following (transcript from the show he mentioned this http://www.glennbeck.com/content/articles/article/198/11200/ ):
Hedge funds 87% <- something many politicians partake in
Healthcare facilities 48%
Publishing, periodicals, magazines 34%
Information delivery services 23%
Silver is 22%
Application software industry 22%
Shipping 21%
Copper 19%
Tobacco products 19%
Drug manufacturers 17%
Insurance brokers 16%
Beverages, wineries, distilleries 15%
Long distance carriers 15.8%
Railroads 13.9%
Steel and iron 13.8%
Cigarettes 13.7%
Integrated circuits, semiconductors 13.6%
Money center banks 10.8%
Hotel/motels 10.6%
Asset management 10.5%
Beverage, Brewers 10.5%
Resorts and casinos 10.5%

All those have greater profit margins than oil companies. So if we need to do something about oil's profits, then we need to look at all these other businesses first.
Interesting post philhos, nice work:hmm:

[Joe from Florence]

Does big oil really have obscene profits?

According to Glenn Beck, oil company's have a profit margin of 8.7%.

To put it in comparison, Glenn listed the profit margins of the following (transcript from the show he mentioned this http://www.glennbeck.com/content/articles/article/198/11200/ ):
Hedge funds 87% <- something many politicians partake in
Healthcare facilities 48%
Publishing, periodicals, magazines 34%
Information delivery services 23%
Silver is 22%
Application software industry 22%
Shipping 21%
Copper 19%
Tobacco products 19%
Drug manufacturers 17%
Insurance brokers 16%
Beverages, wineries, distilleries 15%
Long distance carriers 15.8%
Railroads 13.9%
Steel and iron 13.8%
Cigarettes 13.7%
Integrated circuits, semiconductors 13.6%
Money center banks 10.8%
Hotel/motels 10.6%
Asset management 10.5%
Beverage, Brewers 10.5%
Resorts and casinos 10.5%

All those have greater profit margins than oil companies. So if we need to do something about oil's profits, then we need to look at all these other businesses first.
the question is this philos....what is he comparing their profit margin to? last years profits? or profits from 10 years ago?

Last year oil companies, everyone of them recorded RECORD profits....if you compare their profits this year to last year of course it will be a low number because your comparing it to their record year......it's just like this, do you compare the bengals winning pct last year compared to 2006 or do you compare it to 2002?

[philhos]

the question is this philos....what is he comparing their profit margin to? last years profits? or profits from 10 years ago?

Last year oil companies, everyone of them recorded RECORD profits....if you compare their profits this year to last year of course it will be a low number because your comparing it to their record year......it's just like this, do you compare the bengals winning pct last year compared to 2006 or do you compare it to 2002?

He's comparing the profit margins of oil companies from THIS YEAR to these other companies' profits margins from THIS YEAR.

[EatonFan]

Dang. Healthcare facilities at 48%? If I understand, this is their profit MARGIN and does not take into account fixed costs such as writedowns of uncollectible accounts which are enormous in the healthcare industry?

Where is this article P?

[philhos]

Dang. Healthcare facilities at 48%? If I understand, this is their profit MARGIN and does not take into account fixed costs such as writedowns of uncollectible accounts which are enormous in the healthcare industry?

Where is this article P?

Well, "E", read the original post. It was from Glenn Beck's radio show and the link is the transcript of the show.

[Hazmat Tiger]

This all leads me to two thoughts:

1) Way too much profit is being made by the CEO's and other higher-ups in pretty much every industry here in the US, with not nearly enough being passed on to the average worker.

2) So where is all the extra oil money going?

If the average worker wants to make more, then do something, like go back to school and get some more eduction, or come up with a great idea and start your own business, instead of complaining about people who are ambitious and deserve the money they are making!

[barryllium]

If the average worker wants to make more, then do something, like go back to school and get some more eduction, or come up with a great idea and start your own business, instead of complaining about people who are ambitious and deserve the money they are making!

That seems like it would be the easy answer, right? Unfortunately, it's not. Let's break down a few reasons why:

a) The cost of education is continually rising at a pace the average worker (aka middle class) has a hard time affording - because only the rich can afford it, and only the lower class gets financial aid.
b) The time commitment of school, while working full time as well (is there really another option for most?) is huge - and that goes up when you are talking about an advanced degree - as the average worker already has a 2 or 4 year college degree.
c) In 1992, CEO's made 42x what the average worker made. In 2004, that number was 431. Tell me, are CEO's working 10x as hard? Is the average worker making 10x as much? I don't doubt that CEO's put in more hours per week than the average worker, but since 2001 wages for the average worker have been stagnant (if not going down), while production has gone up, and only the precious few at the top of companies are reaping the benefit. For a little more info, check out this post (http://boards.bengals.com/showpost.php?p=454677&postcount=9).

In the end, the average worker does deserve more money, and CEO's in particular (although this applies to all higher management) is getting more than they deserve, at the cost of the middle class.

[Danno]

That seems like it would be the easy answer, right? Unfortunately, it's not. Let's break down a few reasons why:

a) The cost of education is continually rising at a pace the average worker (aka middle class) has a hard time affording - because only the rich can afford it, and only the lower class gets financial aid.
b) The time commitment of school, while working full time as well (is there really another option for most?) is huge - and that goes up when you are talking about an advanced degree - as the average worker already has a 2 or 4 year college degree.
c) In 1992, CEO's made 42x what the average worker made. In 2004, that number was 431. Tell me, are CEO's working 10x as hard? Is the average worker making 10x as much? I don't doubt that CEO's put in more hours per week than the average worker, but since 2001 wages for the average worker have been stagnant (if not going down), while production has gone up, and only the precious few at the top of companies are reaping the benefit. For a little more info, check out this post (http://boards.bengals.com/showpost.php?p=454677&postcount=9).

In the end, the average worker does deserve more money, and CEO's in particular (although this applies to all higher management) is getting more than they deserve, at the cost of the middle class.


I am not really arguing your points, we talked about it yesterday. I am just touching on it to make another point. In fact, really just talking in general; not targeting you...

With all that said and done... so why does that make it impossible to do what Hazmat said? The possibilities are still out there. Opportunities for anyone to improve their lives. Are they easy? Probably not. And as I live some myself, definitely not (go to school full time, lots of debt, and work). But Dang it, we are Americans. What made this country great was people willing to do whatever they needed to do to make their lives better; all they wanted was the opportunity. And while many of us to this day complain about how hard something is, there are still millions of immigrants coming to this country to seize opportunities many of us take for granted. Too many people in America have lost that sense, and sometimes it seems like its not worth it unless its on a silver platter. Where has that roughneck / pioneer spirit gone?

/end pet peeve

[Jumbro]

This all leads me to two thoughts:

1) Way too much profit is being made by the CEO's and other higher-ups in pretty much every industry here in the US, with not nearly enough being passed on to the average worker.

2) So where is all the extra oil money going?


AMEN! Whether a car manufacturer or a school district, this is definately the case. How does this get changed though?

[barryllium]

I am not really arguing your points, we talked about it yesterday. I am just touching on it to make another point. In fact, really just talking in general; not targeting you...

With all that said and done... so why does that make it impossible to do what Hazmat said? The possibilities are still out there. Opportunities for anyone to improve their lives. Are they easy? Probably not. And as I live some myself, definitely not (go to school full time, lots of debt, and work). But Dang it, we are Americans. What made this country great was people willing to do whatever they needed to do to make their lives better; all they wanted was the opportunity. And while many of us to this day complain about how hard something is, there are still millions of immigrants coming to this country to seize opportunities many of us take for granted. Too many people in America have lost that sense, and sometimes it seems like its not worth it unless its on a silver platter. Where has that roughneck / pioneer spirit gone?

/end pet peeve

I don't disagree with a thing you've said here - many Americans could be doing more to help themselves/improve themselves. But, it's important to recognize it's a two way street - the average person can only do so much if the people they are dependent upon (bosses, etc.) are not allowing them to advance beyond a certain point in many cases. For instance, I'm halfway through a masters (stopped a few years ago due to clinical depression), and I've received a fair share of certifications, and done a lot of self study. But none of these things have garnered a raise in any way shape or form from my job - and part of the reason I have not finished my masters is because unless I want to teach and get a PhD, a masters means pretty much nothing in my field.

In the end, I'm not saying you don't/haven't agreed with this idea, I just wanna be right, too ;)

[barryllium]

AMEN! Whether a car manufacturer or a school district, this is definately the case. How does this get changed though?

Rather than just answer myself, I'll let a few people answer:

GoldenArm9: By letting Christianity set laws, duh
Sloppy Lombardi Slaps: By realizing there is no god, and let science rule the day!
Philhos: By getting the government out of corporations completely
Danno: By bringing back that roughneck/pioneer spirit!
EatonFan: My flat tax system. I've posted it in almost as many threads as Barryllium has posted his damn productions chart. Shouldn't we be using my system by now?
Barryllium: Set restrictions on corporations based upon the pay levels of other countries, like the UK, France and Germany. Remove tax loopholes for corporations and the extreme upper class, and provide some sort of incentive (maybe even a tax incentive) for companies that use a certain percentage of their profits to their own non-upper level employees. See, it's so easy, there clearly can't be any problem here! [This post followed by everyone pointing out all the things I've failed to think of, thus making me realize it's not "so easy"]

[pookdogg7]

I am not really arguing your points, we talked about it yesterday. I am just touching on it to make another point. In fact, really just talking in general; not targeting you...

With all that said and done... so why does that make it impossible to do what Hazmat said? The possibilities are still out there. Opportunities for anyone to improve their lives. Are they easy? Probably not. And as I live some myself, definitely not (go to school full time, lots of debt, and work). But Dang it, we are Americans. What made this country great was people willing to do whatever they needed to do to make their lives better; all they wanted was the opportunity. And while many of us to this day complain about how hard something is, there are still millions of immigrants coming to this country to seize opportunities many of us take for granted. Too many people in America have lost that sense, and sometimes it seems like its not worth it unless its on a silver platter. Where has that roughneck / pioneer spirit gone?

/end pet peeve

The roughneck/pioneer spirit has been outsourced to foreign workers seizing our opportunities for lower wages :)

[Danno]

I don't disagree with a thing you've said here - many Americans could be doing more to help themselves/improve themselves. But, it's important to recognize it's a two way street - the average person can only do so much if the people they are dependent upon (bosses, etc.) are not allowing them to advance beyond a certain point in many cases. For instance, I'm halfway through a masters (stopped a few years ago due to clinical depression), and I've received a fair share of certifications, and done a lot of self study. But none of these things have garnered a raise in any way shape or form from my job - and part of the reason I have not finished my masters is because unless I want to teach and get a PhD, a masters means pretty much nothing in my field.

In the end, I'm not saying you don't/haven't agreed with this idea, I just wanna be right, too ;)


I keep saying that to my girlfriend, lol. Apparently I am wrong whether I agree or disagree. Just just wanna say the words "You are right". LOL :lol:

[barryllium]

I keep saying that to my girlfriend, lol. Apparently I am wrong whether I agree or disagree. Just just wanna say the words "You are right". LOL :lol:

After my wife and I had been together for about 4-5 years, we were in a heated discussion about something, and after I fully explained myself, she looked at me and said "you're right". I just looked at her and started laughing (which was a huge change from having just been mad), and when she asked what was going on, I told her "Sorry I'm laughing, you've just never said that to me before!".

[pookdogg7]

http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/ (http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/)

FORTUNE 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/index.html)

Our annual ranking of America's largest corporations (http://money.cnn.com/magazines/fortune/fortune500/2008/index.html)

2008
Fortune 1000

Rank Company (http://money.cnn.com/magazines/fortune/fortune500/2008/companies/) Revenues ($ millions) Profits($ millions)
1Wal-Mart Stores (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2255.html)..378,799.00................12,731.0
2Exxon Mobil (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/387.html).........372,824.00................40,610 .0
3Chevron (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/385.html)..............210,783.00................1 8,688.0

A quick scan of the entire list reveals that in terms of profits of all U.S. companies Exxon Mobil is #1 with over $40 billion in profits and Chevron is #3 at over $18 billion just behind GE at $22 billion. Exxon's profit margin was over 10% with Chevron nearer to the oil industry average of 8.5%. Also of note, the largest company in the U.S. - Walmart, enjoyed a profit margin of around 3%.

[Danno]

http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/ (http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/)

FORTUNE 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/index.html)

Our annual ranking of America's largest corporations (http://money.cnn.com/magazines/fortune/fortune500/2008/index.html)

2008
Fortune 1000

Rank Company (http://money.cnn.com/magazines/fortune/fortune500/2008/companies/) Revenues ($ millions) Profits($ millions)
1Wal-Mart Stores (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2255.html)..378,799.00................12,731.0
2Exxon Mobil (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/387.html).........372,824.00................40,610 .0
3Chevron (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/385.html)..............210,783.00................1 8,688.0

A quick scan of the entire list reveals that in terms of profits of all U.S. companies Exxon Mobil is #1 with over $40 billion in profits and Chevron is #3 at over $18 billion just behind GE at $22 billion. Exxon's profit margin was over 10% with Chevron nearer to the oil industry average of 8.5%. Also of note, the largest company in the U.S. - Walmart, enjoyed a profit margin of around 3%.


Well yeah, I mean the majority of their revenue model (and image) is selling items they acquire as low as possible for the consumer. Doesn't really help in making large margins... Heck, the margins might not be as high as that if they hadn't found ways to streamline their supply chain.

[Danno]

The roughneck/pioneer spirit has been outsourced to foreign workers seizing our opportunities for lower wages :)

Damn they are outsourcing everything these days!

*note- this message was written by a Malaysian boy highered to post for Danno. :lol:

[pookdogg7]

Damn they are outsourcing everything these days!

*note- this message was written by a Malaysian boy highered to post for Danno. :lol:

http://static.flickr.com/39/84794196_1ffc979d41.jpg

http://thumbnail.search.aolcdn.com/truveo/images/thumbnails/AC/9C/AC9CD51292422F.jpg (http://www.idkwtf.com/videos/latest-videos/thumbnails/they-took-our-jobs-south-park-small.jpg)

They Took Our Jobs!!!! :lol:

[Danno]

http://static.flickr.com/39/84794196_1ffc979d41.jpg

http://thumbnail.search.aolcdn.com/truveo/images/thumbnails/AC/9C/AC9CD51292422F.jpg (http://www.idkwtf.com/videos/latest-videos/thumbnails/they-took-our-jobs-south-park-small.jpg)

They Took Our Jobs!!!! :lol:




Dude that episode was hilarious! I know this will be blurred, but its a quote: "Dude, this is gayer than the pile..." :lol:

It never ceases to amaze me how many movies Trey and Matt can reference.

[pookdogg7]

Dude that episode was hilarious! I know this will be blurred, but its a quote: "Dude, this is gayer than the pile..." :lol:

:lol: - That was one of the best ones.

[felis tigris]

http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/ (http://money.cnn.com/magazines/fortune/fortune500/2008/full_list/)

FORTUNE 500 (http://money.cnn.com/magazines/fortune/fortune500/2008/index.html)

Our annual ranking of America's largest corporations (http://money.cnn.com/magazines/fortune/fortune500/2008/index.html)

2008
Fortune 1000

Rank Company (http://money.cnn.com/magazines/fortune/fortune500/2008/companies/) Revenues ($ millions) Profits($ millions)
1Wal-Mart Stores (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/2255.html)..378,799.00................12,731.0
2Exxon Mobil (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/387.html).........372,824.00................40,610 .0
3Chevron (http://money.cnn.com/magazines/fortune/fortune500/2008/snapshots/385.html)..............210,783.00................1 8,688.0

A quick scan of the entire list reveals that in terms of profits of all U.S. companies Exxon Mobil is #1 with over $40 billion in profits and Chevron is #3 at over $18 billion just behind GE at $22 billion. Exxon's profit margin was over 10% with Chevron nearer to the oil industry average of 8.5%. Also of note, the largest company in the U.S. - Walmart, enjoyed a profit margin of around 3%.

I've got to question the utility of comparing margins across companies/industries and over time since this doesn't really take into account the capital required to generate those margins. Return on capital employed (or more simply, return on equity) will probably give a better indication of the extent to which consumer are "being taken advantage of". I haven't really looked across industries, but a comparison of "big oil" ROE's over the last decade is pretty interesting.

During the four year's from 1999 through 2002, "big oil" generated an average simple return-on-equity of 16.9%. Given that the usual target is somewhere in the neighborhood of 15%, this is pretty good from an investor's point of view, but not outrageous from the consumer's. For the past four years (2004 through 2007), simple return-on-equity has averaged 29.4%.

Over the same periods, average net margins have increased by a similar proportion, moving from 3.7% to 6.1%. Note this number is different from the 8.5% cited elsewhere (I'll explain further on). Interestingly, non-income taxes (sales, excise, production and other duties) as a component of revenues fell from 24.2% of revenues to 18.0% revenues for the same periods. This includes all non-income taxes globally but does indicate that governments share of the take is not really a significant culprit (except inasfar as government are generally wasteful pits of excess).

I developed these figures based on the SEC filings of Exxon, BP, Royal Dutch Shell and Chevron as proxies for the industry. I left out Conoco Phillips and Total SA, not for any selection purposes, but just because I didn't feel like running any more numbers. That's why I get a different average margin than was referenced earlier. Also, because the companies report non-income taxes differently, those figures are not really useful as numbers unto themselves. For instance, taxes were not segregated for BP and Chevron independently reported sales tax only. Other taxes appear to be buried in the purchase and production costs. Treatment by each company was the same over time, though, so comparisons on this axis should be valid.

For companies like Exxon, the impact of a higher ROE is further compounded by the fact that their dividends have not grown in proportion with their income. Back in the mid/late 90s, Exxon's dividend was 50%-75% of their net income. For the last four years, it has been less than 20% of net income. Consequently, these "excess" earnings sit in equity and require Exxon to charge higher prices in order to generating the returns on that equity to which their investor's have grown accustomed. The same is true to some degree for all of the oil companies.

Anyway, just some more food for thought. I'm generally about as capitalist as one can get, but it sure looks like the oil companies are taking the consumers for a ride here.

[Jumbro]

If the average worker wants to make more, then do something, like go back to school and get some more eduction, or come up with a great idea and start your own business, instead of complaining about people who are ambitious and deserve the money they are making!


I know that this post may not be entirely on topic, but it is in direct response to the post made by Hazmat Tiger. I've been thinking about this post all day and it has me bothered so I wanted to reply.

While there are lazy poor people and lazy middle class people who just complain about where they are, but don't try to improve it, there are also those who try like mad, or have no choice but to try, and yet get no where.

Look at teaching for example. The state of Ohio REQUIRES a teacher who has graduated college in the last 8 years to receive their masters degree to continue employment. They are generous, I suppose, in the amount of time they give you to do this. You must start your masters degree within your first 5 year license and finish it by the end of your second 5 year license. So in other words, if a teacher doesn't obtain their masters degree within their first 10 years of licensure, they do not get re-licensed. The best part of all of this is that the state of Ohio does not help the teacher make this happen (from my understanding, most corporations who require a masters degree will either help pay for it, or pay for it entirely). So, in essence, teachers in Ohio must have their masters degree (no choice if they want to teach). So, they are requiring you be more qualified to do the same job for the same pay (Again, in most arenas, the more qualified you are the higher your pay).

I look at the pay scale where I teach now. First, after 4 years of work I have finally broken the $30,000 mark!!! How exciting:thumbsup:. Looking at the pay scale handed out for the upcoming school year, if I had my masters degree I would make a whopping $1500 more on the year. Yeah, sure does pay to try making a better life for one's self doesn't it?

I will say, I am in process of getting my masters degree as is my wife (both teachers, her pay scale is worse). While the State doesn't help pay for the college education, our schools are, THANK GOD. I get up to a whopping $500 a year to help pay for any college courses I may take (yeah, exactly...basically I get 2/3 of a class paid for). My wife wasn't going to get any, and when she mentioned she was looking for a new job the principal went outside the school and found a benefactor to pay for her summer courses ($2,500 which pays for 3 summer courses).

Now, when I decided to go into teaching, I knew I would not be breaking the bank with my paychecks. I didn't do it for the money, I did it for the students. I had some incredible teachers in my life, a couple of which probably saved my life in many ways. I felt I needed to repay society for that. Anyways, I wasn't expecting big bucks, but there are many in this society who have been trained quite well for the very important service they provide. They constantly earn "continuing education credits" through conventions, seminars, college courses, etc. They are constantly working hard to advance themselves....and in the end, they get no reward. That is why I was slightly offended by the above quoted post in this thread.

[Stewy]

But, if you think about it, the principles of true capitalism have gone away for many big corporations. We are basically seeing a variety of large corporations avoiding operating within the free market system that is the basis of capitalism and operating in a nearly Soviet economic model.

There are a variety of means through which the government has created an unfair playing field for many large companies.

Here is a short list:

1. Subsidies
2. Tax breaks
3. Financial incentive packages to move a plant to a new city (you see this a lot in the news with the automobile industry)

Here is an interesting (slightly albeit outdated) article I found regarding the oil industry: http://www.ucsusa.org/clean_vehicles/fuel_economy/subsidizing-big-oil.html

My personal favorite non-free market industry is the Student Loan Industry. The Student Loan Industry has been able to operate in a nearly risk free environment since the passing of the Higher Education Act of 1965. The government backs many of the loans that these companies give out, so even if a student defaults, they get the money from the government and can still pursue the money from the student through heavy handed tactics such as garnishing wages. It is also impossible now to do away with student loans through bankruptcy -- a method only seen elsewhere with alimony payments and tax debt.

Sorry for rambling. But, this is a pet project of mine at work. I now pass on my spot on the soapbox.

:SoapBox:

I have one question for you and everyone else who wants to take the energy companies profits.......

If you remove incentives and tax breaks, this will make energy more expensive to produce for the big corporations, so......who do you think will make up for lost profits? The Company or hte consumer?

Recently Washington has been speculating about limited Oil speculators. While many here may have overlooekd this, it is essentially the key point that could help drive down the oil price. Oil Companies have NO CONTROL over the price of oil - none - zero - nada. Like all raw commodities like soy, bacon, OJ, corn, wheat, oil, gasoline, etc. the prices are controled by Wall Street.

Punishing Big Oil for their profits is like telling farmer Brown in Kansas that his property tax (farmers don't pat property tax) incentive is being repealed because he makes too much money. Guess what will happen? He'll quit farming which will drive down supply and increase costs OR he'll charge more for his product. Either way the consumer pays and it's the same with any commodity. And even if Big Oil can't charge more for their product after losing their incentives, a secondary effect is that they will just produce less oil because THEIR costs will go up, and when costs go up in the O&G business it means projects lose profitibility and become uneconomic. So if prospects/projects become uneconomic it means fewer wells are drilled and less oil is found and supply goes down AND prices go up.

And ask yourself this, if all these incentives and tax breaks go away, it means the govt gets more money. Do you really think the govt is going to give it to you? lol

I wonder if some people even think about these things or just sit around and parrot the media's stupid big bad Big Oil stories. Here's a little fact for you. ExxonMobil is the biggest of the evil Big Oil, yet they produce less than 1% of the worlds total oil. LESS THAN 1%!!!!! There is no way they can change the oil price up or down controlling only 1% of the market.

Anyway you look at it removing incentives and take breaks on big Oil will only hurt the US because all the lost profits and extra costs will all get handed back to the consumer.

If you want to control prices - control Wall Street.

[xxlt]

I've got to question the utility of comparing margins across companies/industries and over time since this doesn't really take into account the capital required to generate those margins. Return on capital employed (or more simply, return on equity) will probably give a better indication of the extent to which consumer are "being taken advantage of". I haven't really looked across industries, but a comparison of "big oil" ROE's over the last decade is pretty interesting.

During the four year's from 1999 through 2002, "big oil" generated an average simple return-on-equity of 16.9%. Given that the usual target is somewhere in the neighborhood of 15%, this is pretty good from an investor's point of view, but not outrageous from the consumer's. For the past four years (2004 through 2007), simple return-on-equity has averaged 29.4%.

Over the same periods, average net margins have increased by a similar proportion, moving from 3.7% to 6.1%. Note this number is different from the 8.5% cited elsewhere (I'll explain further on). Interestingly, non-income taxes (sales, excise, production and other duties) as a component of revenues fell from 24.2% of revenues to 18.0% revenues for the same periods. This includes all non-income taxes globally but does indicate that governments share of the take is not really a significant culprit (except inasfar as government are generally wasteful pits of excess).

I developed these figures based on the SEC filings of Exxon, BP, Royal Dutch Shell and Chevron as proxies for the industry. I left out Conoco Phillips and Total SA, not for any selection purposes, but just because I didn't feel like running any more numbers. That's why I get a different average margin than was referenced earlier. Also, because the companies report non-income taxes differently, those figures are not really useful as numbers unto themselves. For instance, taxes were not segregated for BP and Chevron independently reported sales tax only. Other taxes appear to be buried in the purchase and production costs. Treatment by each company was the same over time, though, so comparisons on this axis should be valid.

For companies like Exxon, the impact of a higher ROE is further compounded by the fact that their dividends have not grown in proportion with their income. Back in the mid/late 90s, Exxon's dividend was 50%-75% of their net income. For the last four years, it has been less than 20% of net income. Consequently, these "excess" earnings sit in equity and require Exxon to charge higher prices in order to generating the returns on that equity to which their investor's have grown accustomed. The same is true to some degree for all of the oil companies.

Anyway, just some more food for thought. I'm generally about as capitalist as one can get, but it sure looks like the oil companies are taking the consumers for a ride here.

Wow. Thanks for this post. I found it helpful.

[xxlt]

I know that this post may not be entirely on topic, but it is in direct response to the post made by Hazmat Tiger. I've been thinking about this post all day and it has me bothered so I wanted to reply.

While there are lazy poor people and lazy middle class people who just complain about where they are, but don't try to improve it, there are also those who try like mad, or have no choice but to try, and yet get no where.

Look at teaching for example. The state of Ohio REQUIRES a teacher who has graduated college in the last 8 years to receive their masters degree to continue employment. They are generous, I suppose, in the amount of time they give you to do this. You must start your masters degree within your first 5 year license and finish it by the end of your second 5 year license. So in other words, if a teacher doesn't obtain their masters degree within their first 10 years of licensure, they do not get re-licensed. The best part of all of this is that the state of Ohio does not help the teacher make this happen (from my understanding, most corporations who require a masters degree will either help pay for it, or pay for it entirely). So, in essence, teachers in Ohio must have their masters degree (no choice if they want to teach). So, they are requiring you be more qualified to do the same job for the same pay (Again, in most arenas, the more qualified you are the higher your pay).

I look at the pay scale where I teach now. First, after 4 years of work I have finally broken the $30,000 mark!!! How exciting:thumbsup:. Looking at the pay scale handed out for the upcoming school year, if I had my masters degree I would make a whopping $1500 more on the year. Yeah, sure does pay to try making a better life for one's self doesn't it?

I will say, I am in process of getting my masters degree as is my wife (both teachers, her pay scale is worse). While the State doesn't help pay for the college education, our schools are, THANK GOD. I get up to a whopping $500 a year to help pay for any college courses I may take (yeah, exactly...basically I get 2/3 of a class paid for). My wife wasn't going to get any, and when she mentioned she was looking for a new job the principal went outside the school and found a benefactor to pay for her summer courses ($2,500 which pays for 3 summer courses).

Now, when I decided to go into teaching, I knew I would not be breaking the bank with my paychecks. I didn't do it for the money, I did it for the students. I had some incredible teachers in my life, a couple of which probably saved my life in many ways. I felt I needed to repay society for that. Anyways, I wasn't expecting big bucks, but there are many in this society who have been trained quite well for the very important service they provide. They constantly earn "continuing education credits" through conventions, seminars, college courses, etc. They are constantly working hard to advance themselves....and in the end, they get no reward. That is why I was slightly offended by the above quoted post in this thread.

Jumbro, you disappoint me. The real teachers on here don't cry about the money, they'd work twice as much for half the money. Just ask Beaker. He'll set you straight. :sarcasm:

[xxlt]

I have one question for you and everyone else who wants to take the energy companies profits.......

If you remove incentives and tax breaks, this will make energy more expensive to produce for the big corporations, so......who do you think will make up for lost profits? The Company or hte consumer?

Recently Washington has been speculating about limited Oil speculators. While many here may have overlooekd this, it is essentially the key point that could help drive down the oil price. Oil Companies have NO CONTROL over the price of oil - none - zero - nada. Like all raw commodities like soy, bacon, OJ, corn, wheat, oil, gasoline, etc. the prices are controled by Wall Street.

Punishing Big Oil for their profits is like telling farmer Brown in Kansas that his property tax (farmers don't pat property tax) incentive is being repealed because he makes too much money. Guess what will happen? He'll quit farming which will drive down supply and increase costs OR he'll charge more for his product. Either way the consumer pays and it's the same with any commodity. And even if Big Oil can't charge more for their product after losing their incentives, a secondary effect is that they will just produce less oil because THEIR costs will go up, and when costs go up in the O&G business it means projects lose profitibility and become uneconomic. So if prospects/projects become uneconomic it means fewer wells are drilled and less oil is found and supply goes down AND prices go up.

And ask yourself this, if all these incentives and tax breaks go away, it means the govt gets more money. Do you really think the govt is going to give it to you? lol

I wonder if some people even think about these things or just sit around and parrot the media's stupid big bad Big Oil stories. Here's a little fact for you. ExxonMobil is the biggest of the evil Big Oil, yet they produce less than 1% of the worlds total oil. LESS THAN 1%!!!!! There is no way they can change the oil price up or down controlling only 1% of the market.

Anyway you look at it removing incentives and take breaks on big Oil will only hurt the US because all the lost profits and extra costs will all get handed back to the consumer.

If you want to control prices - control Wall Street.

But by your logic if regulatory action is taken on Wall Street it will just shut down. The bankers and brokers will just all take their balls and go home.

I am tired of that disempowered thinking. Everyone seems to say, "Yeah (fill in the blank with the government, Wall Street, the labor unions, the poor, the Muslims, the media) are screwing us blind, but what are you gonna do?"

[Jasonew6]

Does big oil really have obscene profits?

According to Glenn Beck, oil company's have a profit margin of 8.7%.

To put it in comparison, Glenn listed the profit margins of the following (transcript from the show he mentioned this http://www.glennbeck.com/content/articles/article/198/11200/ ):
Hedge funds 87% <- something many politicians partake in
Healthcare facilities 48%
Publishing, periodicals, magazines 34%
Information delivery services 23%
Silver is 22%
Application software industry 22%
Shipping 21%
Copper 19%
Tobacco products 19%
Drug manufacturers 17%
Insurance brokers 16%
Beverages, wineries, distilleries 15%
Long distance carriers 15.8%
Railroads 13.9%
Steel and iron 13.8%
Cigarettes 13.7%
Integrated circuits, semiconductors 13.6%
Money center banks 10.8%
Hotel/motels 10.6%
Asset management 10.5%
Beverage, Brewers 10.5%
Resorts and casinos 10.5%

All those have greater profit margins than oil companies. So if we need to do something about oil's profits, then we need to look at all these other businesses first.

You forgot one. Or, Glenn did.

US Government - 100%.

[xxlt]

You forgot one. Or, Glenn did.

US Government - 100%.

Now I understand how your mind works and why you vote Republican. You don't understand that when government expenditures exceed taxes collected the government is not making any money, not to mention a 100% "profit." Don't stop believin'...

[Jumbro]

Jumbro, you disappoint me. The real teachers on here don't cry about the money, they'd work twice as much for half the money. Just ask Beaker. He'll set you straight. :sarcasm:

I try very hard not to complain about the money.....it was the idio...I mean, slightly off based comment made previously basically stating that those who are middle/lower class just don't work hard enough to improve themselves to get more money--that just kinda threw me off the deep end a bit.

I enjoy my job. If I didn't enjoy my job I wouldn't have the accomplishments to hang my hat on in such a short career that I do. It isn't about the money to me, at all. Unfortunately the lack of money just makes other portions of life a little more difficult (Starting a family, having a car to get to work, being a Bengals fan, etc).

[Stewy]

But by your logic if regulatory action is taken on Wall Street it will just shut down. The bankers and brokers will just all take their balls and go home.

I am tired of that disempowered thinking. Everyone seems to say, "Yeah (fill in the blank with the government, Wall Street, the labor unions, the poor, the Muslims, the media) are screwing us blind, but what are you gonna do?"

It's not disempowered thinking if it's the truth. It's basic capitolizism. Retailers/wholesalers pass on their costs to the consumer. No company sits backs and says, "Aw shucks! I guess we'll just post a smaller profit this year and **** up these extra costs." They pass on their costs to the consumer. It's just the way it is.

Wall Street doesn't make anything or sell anything. They won't pick up their toys and go home, because they have only overhead, but no capital investment. Their risk is very low. Explain to me how a Wall Street Oil speculator would transfer their loss of income on to you? He can't. He owns nothing and makes nothing. They SPECULATE with others goods. What's their finding costs? What's their ROI? Do they even have an ROI?

Controlling speculation vs. controlling Wall Street prices are two entirely different things. Washington is proposing controlling speculators, which will reduce volatility. They are not proposing controlling the Oil price. Reducing volatility means reducing uncertainty which means less stress and prices will fall. It is the correct long term solution to the problem. Penalizing Big Oil will only hurt the consumer.

[thefo0]

It's not disempowered thinking if it's the truth. It's basic capitolizism. Retailers/wholesalers pass on their costs to the consumer. No company sits backs and says, "Aw shucks! I guess we'll just post a smaller profit this year and **** up these extra costs." They pass on their costs to the consumer. It's just the way it is.

Wall Street doesn't make anything or sell anything. They won't pick up their toys and go home, because they have only overhead, but no capital investment. Their risk is very low. Explain to me how a Wall Street Oil speculator would transfer their loss of income on to you? He can't. He owns nothing and makes nothing. They SPECULATE with others goods. What's their finding costs? What's their ROI? Do they even have an ROI?

Controlling speculation vs. controlling Wall Street prices are two entirely different things. Washington is proposing controlling speculators, which will reduce volatility. They are not proposing controlling the Oil price. Reducing volatility means reducing uncertainty which means less stress and prices will fall. It is the correct long term solution to the problem. Penalizing Big Oil will only hurt the consumer.

I know he's not well liked anymore, but Ralph Nader wrote something on this yesterday, you might find it interesting:

http://nader.org/index.php?/archives/1323-Corporate-Complacency.html

[xxlt]

I try very hard not to complain about the money.....it was the idio...I mean, slightly off based comment made previously basically stating that those who are middle/lower class just don't work hard enough to improve themselves to get more money--that just kinda threw me off the deep end a bit.

I enjoy my job. If I didn't enjoy my job I wouldn't have the accomplishments to hang my hat on in such a short career that I do. It isn't about the money to me, at all. Unfortunately the lack of money just makes other portions of life a little more difficult (Starting a family, having a car to get to work, being a Bengals fan, etc).

Stay in school! Hard work pays! Arbeit macht frei!

Brother, you are far from alone in how you feel. But to some you are just lazy, selfish, undisciplined, and uneducated. "Eat your rations and shut up," is their message to you.

My message? "Solidarity."

[xxlt]

It's not disempowered thinking if it's the truth. It's basic capitolizism. Retailers/wholesalers pass on their costs to the consumer. No company sits backs and says, "Aw shucks! I guess we'll just post a smaller profit this year and **** up these extra costs." They pass on their costs to the consumer. It's just the way it is.

Wall Street doesn't make anything or sell anything. They won't pick up their toys and go home, because they have only overhead, but no capital investment. Their risk is very low. Explain to me how a Wall Street Oil speculator would transfer their loss of income on to you? He can't. He owns nothing and makes nothing. They SPECULATE with others goods. What's their finding costs? What's their ROI? Do they even have an ROI?

Controlling speculation vs. controlling Wall Street prices are two entirely different things. Washington is proposing controlling speculators, which will reduce volatility. They are not proposing controlling the Oil price. Reducing volatility means reducing uncertainty which means less stress and prices will fall. It is the correct long term solution to the problem. Penalizing Big Oil will only hurt the consumer.

Man, you probably know infinitely more than me (and John McCain) about economics. But "controlling speculation" sounds quite similar to "controlling prices" to me. You seem to suggest speculators don't have any capital invested in the market. Really? So I can just show up on the floor of the NYSE (or send my proxy to do it) and start screaming "I want 10 million dollars, no 20, no 50!" and I walk out at the end of the day with 10 - 50 million dollars? I don't think it works that way. The speculators have the same objective as the producers - making money. As I understand it, both production and speculation also require money before they can be undertaken.

You say if you tell a producer his profit margin is controlled he will stop producing. But if you tell a speculator his profit margin is controlled he will do what? Presumably he will stop speculating. That is, he withdraws his capital from Wall Street and puts it in the EU or Asia or somewhere else. Isn't that the same thing as a producer stopping production. Doesn't it "shrink the economy?" Again, you probably know more about it than me but they sound like quite similar interventions.

[Stewy]

Man, you probably know infinitely more than me (and John McCain) about economics. But "controlling speculation" sounds quite similar to "controlling prices" to me. You seem to suggest speculators don't have any capital invested in the market. Really? So I can just show up on the floor of the NYSE (or send my proxy to do it) and start screaming "I want 10 million dollars, no 20, no 50!" and I walk out at the end of the day with 10 - 50 million dollars? I don't think it works that way. The speculators have the same objective as the producers - making money. As I understand it, both production and speculation also require money before they can be undertaken.

You say if you tell a producer his profit margin is controlled he will stop producing. But if you tell a speculator his profit margin is controlled he will do what? Presumably he will stop speculating. That is, he withdraws his capital from Wall Street and puts it in the EU or Asia or somewhere else. Isn't that the same thing as a producer stopping production. Doesn't it "shrink the economy?" Again, you probably know more about it than me but they sound like quite similar interventions.

Ok you don't know what capital investment is, so here ya go.

The term Capital Investment has two usages in business. Firstly, Capital Investment refers to money used by a business to purchase fixed assets, such as land, machinery, or buildings.

Secondly, Capital Investment refers to money invested in a business with the understanding that the money will be used to purchase fixed assets, rather than used to cover the business' day-to-day operating expenses.

If you are seeking investors for your business, you will most likely find that interested investors prefer to make a Capital Investment, specifying what the money will be used for.
Speculators do not purchase assets to enhance them, they purchase them to turn around and sell them immediately. They are not investing, they are speculating. They use other peoples money to try and make money by buying low and selling high.

Wall Street won't shut down because oil will be sold on the commodities market because people need energy. Most people working in the commodities markets are NOT speculators. Most are investors who actually work for Oil Companies that purchase oil to refine into products we use. If you control the speculators, you will not be hurting the true users of that product who are trying to purchase the product as a capital investment. Speculators are not investors and that is the difference.

But you don't have to believe me - here is a great article on this very subject - I got this from googling the following: capital investment vs speculate
http://www.progressive-economics.ca/2008/04/25/speculation-vs-investment/

[Jasonew6]

Now I understand how your mind works and why you vote Republican. You don't understand that when government expenditures exceed taxes collected the government is not making any money, not to mention a 100% "profit." Don't stop believin'...

Yes, I know the government spends taxes, and all too often exceeds. I am a Republican because I believe the government should do less.

But relative to the oil industry, the government is making cash hand over fist off of gasoline, and not doing anything to earn that money, and is preventing the American oil industry from being more efficient.

[EatonFan]

Man, you probably know infinitely more than me (and John McCain) about economics. But "controlling speculation" sounds quite similar to "controlling prices" to me. You seem to suggest speculators don't have any capital invested in the market. Really? So I can just show up on the floor of the NYSE (or send my proxy to do it) and start screaming "I want 10 million dollars, no 20, no 50!" and I walk out at the end of the day with 10 - 50 million dollars? I don't think it works that way. The speculators have the same objective as the producers - making money. As I understand it, both production and speculation also require money before they can be undertaken.

You say if you tell a producer his profit margin is controlled he will stop producing. But if you tell a speculator his profit margin is controlled he will do what? Presumably he will stop speculating. That is, he withdraws his capital from Wall Street and puts it in the EU or Asia or somewhere else. Isn't that the same thing as a producer stopping production. Doesn't it "shrink the economy?" Again, you probably know more about it than me but they sound like quite similar interventions.

Speculators typically take advantage of short term price imbalances between markets. It's a high risk business and you can get burned heavily, but if you know what you are doing you can make a ton of money. For instance, let's say the European market is selling wheat at $2.00 and the American market (which hasn't opened yet) sold it at the close for $2.20. A speculator would buy the EU wheat and on open in the American market sell like mad making $.20 per trade. Now $.20 per trade is not much if you are only buying and selling one unit, but try 1M units and it becomes $200,000. But let's say that wheat does not open at $2.20 and plummets before the open and goes down to $1.95. Then you are stuck with 1M units of wheat and lose $50,000. Thus, the term speculator. I'm not sure you really could regulate this activity?? How would you? Limit the amount of profit on any given transaction? BTW this is just an example, this happens in currency, oil, gold, etc. Any commodity. Obviously to make any appreciable sum, it takes a decent amount of $$$. It's a high risk, high reward game.

[xxlt]

Ok you don't know what capital investment is, so here ya go.


Speculators do not purchase assets to enhance them, they purchase them to turn around and sell them immediately. They are not investing, they are speculating. They use other peoples money to try and make money by buying low and selling high.

Wall Street won't shut down because oil will be sold on the commodities market because people need energy. Most people working in the commodities markets are NOT speculators. Most are investors who actually work for Oil Companies that purchase oil to refine into products we use. If you control the speculators, you will not be hurting the true users of that product who are trying to purchase the product as a capital investment. Speculators are not investors and that is the difference.

But you don't have to believe me - here is a great article on this very subject - I got this from googling the following: capital investment vs speculate
http://www.progressive-economics.ca/2008/04/25/speculation-vs-investment/

Your position is beginning to appear more clear and more meritorious. Question: I hear "flat tax," "smaller government," "extend the Bush tax cuts" etc. bandied about all the time. Why are you the only person (at least here) talking about speculators? And, aren't they going to be tough to take on because aren't their interests often closely aligned (same people, in some cases) with some of the large corps? I mean, even if it is not "big oils" fault prices are where they are, are they going to want to see prices come down? Nope. So who is going to lead the charge against speculators? If it is you, take plenty of extra diapers(allusion to your avatar)! I think it will be a protracted battle.

[xxlt]

Speculators typically take advantage of short term price imbalances between markets. It's a high risk business and you can get burned heavily, but if you know what you are doing you can make a ton of money. For instance, let's say the European market is selling wheat at $2.00 and the American market (which hasn't opened yet) sold it at the close for $2.20. A speculator would buy the EU wheat and on open in the American market sell like mad making $.20 per trade. Now $.20 per trade is not much if you are only buying and selling one unit, but try 1M units and it becomes $200,000. But let's say that wheat does not open at $2.20 and plummets before the open and goes down to $1.95. Then you are stuck with 1M units of wheat and lose $50,000. Thus, the term speculator. I'm not sure you really could regulate this activity?? How would you? Limit the amount of profit on any given transaction? BTW this is just an example, this happens in currency, oil, gold, etc. Any commodity. Obviously to make any appreciable sum, it takes a decent amount of $$$. It's a high risk, high reward game.

And is it not to some degree "essential?" I don't know - I am asking. But it sure seems to be a big part of our system... If not essential, then yes, how is it eliminated or regulated? The free market advocates surely wouldn't want to hear of either. They would label you and Stewy commies the second you offered a plan to eliminate or regulate this. But I would still like to hear more from both of you...

[Joe from Florence]

He's comparing the profit margins of oil companies from THIS YEAR to these other companies' profits margins from THIS YEAR.exactley which was my point.....what do you think they are comparing the profits with this year against?
i'd bet last year

now if you want to make it fair, lets compare the profits of oil companies this year to their profits 20 years ago....i bet they'd be more than 8%

[Danno]

exactley which was my point.....what do you think they are comparing the profits with this year against?
i'd bet last year

now if you want to make it fair, lets compare the profits of oil companies this year to their profits 20 years ago....i bet they'd be more than 8%

I am not sure I follow what you are saying. This is comparison of the margins, which are usually in percentages. It doesn't really have anything to do with the past margins.

Why do you think their is a comparison to last year? If that would be a growth comparison.

[warsteiner138]

Well I think when 1% percent of the world owns 40% percent of the worlds wealth than somethings has to be wrong with the system.

How to fixed that is a tough question?

In USA; I think getting rid of the Federal Reserve and reduce government spending would help rich and poor.

To have borrowing rate of 2% of every American dollar makes no sense to me.

At the very least the US government should take full control(buy it out if you need to) of the Federal Reserve.

That way any profit made off of borrowing the money would at least be fueled back to the US budget.

Instead of taxing people to repay the borrowing rate.

I think America should try to get off oil in the long term.

Which means we need to start now because the long term takes awhile.

Just like any off shore drilling would take at least 5-10 years before help out gas cost.

The same is the with alternative options.

The good thing is it should create some new jobs and help the environment at the same time.

This does not have much to do with "Big Oil" but I woould love for the government to get out of the corporate welfare business.

If a company can not run it self properly let the market take care of it.

That is what free enterprise is all about.

And it would save a lot more money than extra taxing on so called "Obscene Profits"....

[pookdogg7]

http://imgcash4.imageshack.us/img501/8893/gashr1.jpg

[felis tigris]

And is it not to some degree "essential?" I don't know - I am asking. But it sure seems to be a big part of our system... If not essential, then yes, how is it eliminated or regulated? The free market advocates surely wouldn't want to hear of either. They would label you and Stewy commies the second you offered a plan to eliminate or regulate this. But I would still like to hear more from both of you...

Are speculators "essential"? Probably not. They are advantageous under normal circumstances to the extent that professional speculators (ie. those that are successful over time and have therefor proven themselves to have some degree of foresight with respect to the markets they trade) tend to act as dampeners to price oscillations. For more illiquid markets, they also add valuable liquidity for those who do actually need to move product.

Issues (primarily in the form of "bubbles") arise when speculators begin to act on where they believe that others will allow a price to go rather than where it actually "ought" to be. Because they are able to (and do) move in and out of positions relatively rapidly, they are willing to continue "betting" a commodity in a particular direction. Of course, when a correction does eventually come, some of them do lose (those that weren't able to get out quickly enough).

This effect is exacerbated by the low margin requirements imposed on commodity speculators. Whereas individual stock investors have margin requirements of 50% for initial investments and 33% for maintenance positions (set by the Federal Reserve), commodities traders have substantially lower requirements, often around 10% (set by the individual commodities exchanges). Consequently, they don't have nearly as much of their own "skin in the game", especially if they are relatively frequently turning their positions over and taking out their profits. When a crash does come, it will be the financial institutions which have financed the speculators' positions which take the real hit.

Sidebar: Is this beginning to sound like mortgage lenders and the housing bubble? Similar phenomenom with respect to reduced down payment requirements, though there were certainly a number of other factors involved.

Increasing the margin requirements on commodities trading is one form of regulation which may very well be viable. It would reduce the size of the positions that many speculators could take and would likely reduce the extent to which speculators will look at their projected "psychological price" rather than "objective price" simply by virtue of having more capital exposed when any correction eventually does come. The government already regulates margins on equities, so extending this to commodities would not be that great a leap.

[xxlt]

Felis Tigirs: Prepare to be called a communist, a socialist, un-American, a thief, an advocate of class warfare etc. "How dare you take a speculators hard earned money!" "How dare the government regulate speculation!" I can hear it coming now...