USCHO Fan Forum
This is a sample guest message. Register a free account today to become a member! Once signed in, you'll be able to participate on this site by adding your own topics and posts, as well as connect with other members through your own private inbox!
-
The USCHO Fan Forum has migrated to a new plaform, xenForo. Most of the function of the forum should work in familiar ways. Please note that you can switch between light and dark modes by clicking on the gear icon in the upper right of the main menu bar. We are hoping that this new platform will prove to be faster and more reliable. Please feel free to explore its features.
Business, Economics, and Taxes 2: That's Why We Fight to Take the Means Back
- Thread starter Kepler
- Start date
Kepler
Si certus es dubita
Brent is all over the map. In 16 hours, 110 --> 90 --> 98 --> 90 --> 94. Maybe it's a dead cat bounce to 92 and then it stays there.
But how can it? If the Strait is still taking 12 ships a day instead of 120, the price is going north. And if a quote stray unquote Iranian or Israeli missile shuts down a production or refinement or transport facility in the GCC or Iran, that damage takes months to repair. I may be a dirty Marxist but I know when demand is stable and supply is physically cut, price goes up.
But how can it? If the Strait is still taking 12 ships a day instead of 120, the price is going north. And if a quote stray unquote Iranian or Israeli missile shuts down a production or refinement or transport facility in the GCC or Iran, that damage takes months to repair. I may be a dirty Marxist but I know when demand is stable and supply is physically cut, price goes up.
Kepler
Si certus es dubita
Actually, because I am a dirty Marxist I do have a question. These crude prices we see are all future contracts for May or June. So the actual oil going into gas tanks right now was bought at prices that are lagging 1-2 months. Does that mean the at pump price lags too and we are due for a bump even if the futures prices drop, or do those futures get priced into sales right now so the companies pay themselves first?
My cynical guess is the companies do whatever maximizes their cash reserve. If the price is going up they charge the future cost at the pump to compensate for higher costs. If the price is going down they charge the current cost at the pump and pocket the future windfall. Cause that's what I'd do. Theoretically the market should correct the line, but this is a cartel with a manageable number of colluding parties that have bought off government where it isn't actually the de facto government itself.
My cynical guess is the companies do whatever maximizes their cash reserve. If the price is going up they charge the future cost at the pump to compensate for higher costs. If the price is going down they charge the current cost at the pump and pocket the future windfall. Cause that's what I'd do. Theoretically the market should correct the line, but this is a cartel with a manageable number of colluding parties that have bought off government where it isn't actually the de facto government itself.
ticapnews
Never graduate.
Plus each tanker has an extra $2,000,000 toll to pay Iran, so factor that into the prices.
aparch
Acetaminamerican
My oil industry knowlege comes from a 30+ year industry guy from Oklahoma who posts on TikTok as Mr. Global. (He also has longer form talks on YouTube.) That said, you figured out what he's been posting about for a month now.
Futures market is just paper. Monopoly money and titles. Its a theoretical value on an estimated number of barrels of oil.
Actual cost of oil is the Spot Price and that is what the oil producers are actually buying that tanker of oil at. So yes, there is a lag.
BUT, prices jump at the station because we pay the replacement cost of gasoline. When Wawa raises their price $0.75 overnight, they're expecting their next tank to be expensive. (Funny how slow the price drops when the replacement price is lower.)
Also for how it's all related, Mr. Global has been adamant about the spot price being $40(ish) higher than futures prices. The longer the strait is reduced/closed to shipping, thats going to make the spot price for existing oil rise. Being a big, lagging chain, you are again correct that we are not out of the woods just yet.
Had the cease fire allowed the strait to free-flow oil tankers again, there may still have been enough slack in the entire chain to absorb Trump's stupidity. The longer this drags out, the less slack in the supply chain.
Kepler
Si certus es dubita
This is great, thank you!
aparch
Acetaminamerican
Slap Shot
I got nothing
Those companies exist but they're few and far between and likely average less than 50 employees each so the footprint is small.
Kepler
Si certus es dubita
FadeToBlack&Gold
Microlot Marxist
Yeah, I've been fortunate enough to work for 2 of those companies. In both instances, they became standard corporate America after they grew past 200 employees and the original founders left or (in one case) prematurely died.
MissThundercat
Are the cis okay?
*checks retirement plan*
Yep, still alien invasion, societal collapse, or post apocalyptic scenario.
Yep, still alien invasion, societal collapse, or post apocalyptic scenario.
ScoobyDoo
NPC
I got boned the whole way so I never had it good.
FadeToBlack&Gold
Microlot Marxist
The day your HR department hires an actual manager and becomes more than just a pair of glorified recruiters who never gave a crap about processes or policies, is generally the day you cease being a cool, nimble startup/scale-up and become a standard corporation protecting itself.
ScoobyDoo
NPC
I worked for smaller companies early in my career. I still got boned. I worked for very very very greedy men who felt they were God's gift and never really needed anyone else. I was just a number, just like what happens in a large company. I never really had the "small" company vibe.
ticapnews
Never graduate.
The original owners for most of these older companies are usually pretty cool. LL Bean (the man) got started because he wanted to make some boots for him and his friends to wear hunting. He designed, manufactured and mailed out 100 pairs of boots. 88 were returned. He asked what people didn't like about them, took their feedback and what he made is still largely the shoe they build down the road 114 years later. My grandmother told me about visiting when she was a kid and LL sent an employee home because his wife had given birth.
"What are you doing here?"
My job?
"Your job is at home taking care of your wife and bonding with your son. I don't want to see you back here for a week."
And he paid the man.
A century later we're still fighting for parental leave.
When employees got married he bought them a bedroom set as a wedding present.
He introduced profit sharing. There were years when you got 20% of your annual salary in a bonus. One year was really bad and there were no profits to share. LL used his own savings to pay a bonus and apologized that it couldn't be more.
It was a point of pride for him that people wanted to work there because he paid so well and the benefits were legendary.
It's not like that anymore. Still a decent place to work, but not like it was. A corporate CEO from outside the family runs the business now. Almost all the merchandise is made overseas (only select items are still made over in Brunswick) and the return policy (while still good) isn't what it was.
It's a long way from when it was a single, two-story building on Main Street, but I guess if you're going to grow into a billion dollar business you have to change.