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  1. #181  
    Quote Originally Posted by surur
    Sorry, I missed the explanation. Can you put it in layman's terms?

    Surur
    ROI - return on investment.
    Freedom of some speech in the US, through someone in the UK.
  2. #182  
    Quote Originally Posted by KRamsauer
    I was watching the sunday talk shows today, and something finally dawned on me: all this talk about profit margins is absolute garbage. The profit margin of a company doesn't mean anything. That is a function of the market and the goods it sells. Newspapers, for instance, have HUGE profit margins. Likewise for software companies. That doesn't mean that they are bad firms (and since oil company figures are lower, that doesn't mean they are good either).

    The big question is return on capital. If a given industry has a higher return on capital and yet is not attracting investment, that would appear on the face of it to smack of collusion and market protection. In our system, capital finds its home in the best place, as measured by profitability per unit of capital. If the oil industry has astronomical returns on capital, more capital will be put to use, increasing production and lowering prices.

    I haven't done an exhaustive study, but I did hear that over 20 years the returns in the energy industry are around the average for U.S. businesses (I don't know if they are above, below or equal to).

    So there you have it. When the politicians complain about absolute profit (X billions of dollars a quarter), that is a useless number as I'm sure we can all agree (afterall, if a company is large, then shouldn't its income be large?). But when the industry retorts "but our profit margin is below average" that is equally useless.

    Unfortunately the persuasive power of this explanation is nothing compared to sound bites that each side throws out as I'm sure we'll see when someone replies to this in three, two, one...
    now Im all in favor of recycling garbage -- particularly texas garbage (which because of its uniquely high percentage of bullsht makes it an especially valuable source of methane) but could any of the expert number crunching capitalists here explain to a ignorant neophyte like me how it is that oil -- which was profitable to evacuate from the colon of the earth at $25/barrel -- does not increase the profitability of a corporation when that same oil from that same well gets to be sold for $75/ barrel ??

    Or how that same mega corporation, evacuating oil from that same well -- and not paying any royalties on that oil -- is no more profitable than, oh say P&G -- but can be able to afford a $350 million dollar gold watch for their fat cat retiring chairman.

    That seems to be some kind of magical new math -- perhaps these energy companies may well have captured and harnessed Cold Fusion -- in the service of their accounting departments.

    But maybe like any leader (your former governor for example) i'm surrounded by advisors who are all a bunch of yesmen toadies who simply tell me what they think I want to hear -- I dont get the real truth -- so hopefully one of yall can explain it to me ...
    Last edited by BARYE; 04/30/2006 at 03:29 PM.
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  3. #183  
    Quote Originally Posted by geatches
    Can you tell me where the jab was? Quit being a sissy.
    My bad.

    Quote Originally Posted by hoovs
    paraphrasing ... something about gas prices being driven up by all the illegal immigrants using up all our gas
    Quote Originally Posted by theBlaze
    god that's disgusting
    Quote Originally Posted by geatches
    And your God is?
    Your usual schoolyard namecalling aside, I thought i got the humor, but if it wasnt a jab, i must have misunderstood the meaning.

    Please explain.
  4.    #184  
    Quote Originally Posted by KRamsauer
    I was watching the sunday talk shows today, and something finally dawned on me: all this talk about profit margins is absolute garbage. The profit margin of a company doesn't mean anything. That is a function of the market and the goods it sells. Newspapers, for instance, have HUGE profit margins. Likewise for software companies. That doesn't mean that they are bad firms (and since oil company figures are lower, that doesn't mean they are good either).

    The big question is return on capital. If a given industry has a higher return on capital and yet is not attracting investment, that would appear on the face of it to smack of collusion and market protection. In our system, capital finds its home in the best place, as measured by profitability per unit of capital. If the oil industry has astronomical returns on capital, more capital will be put to use, increasing production and lowering prices.

    I haven't done an exhaustive study, but I did hear that over 20 years the returns in the energy industry are around the average for U.S. businesses (I don't know if they are above, below or equal to).

    So there you have it. When the politicians complain about absolute profit (X billions of dollars a quarter), that is a useless number as I'm sure we can all agree (afterall, if a company is large, then shouldn't its income be large?). But when the industry retorts "but our profit margin is below average" that is equally useless.

    Unfortunately the persuasive power of this explanation is nothing compared to sound bites that each side throws out as I'm sure we'll see when someone replies to this in three, two, one...
    This is exactly along the lines of thoughts, but you stated a heck of a lot better than could have.

    Due to the larger numbers, it is easy politicize it. It also draws attention. And is certainly worthy of looking at to see if it is legit, manipulated, illegally influenced, monopolized, etc.... Or simply they may be all on the up and up with business practices, but simply on a larger scale than nearly any other industry (except for maybe certain cases with pharmaceuticals. )

    It is just so hard for the average person, like myself, to really get a grip on this issue because of so many ways to spin the numbers, different reporting to different groups (i.e. investors, IRS, public, etc..).
  5. #185  
    Quote Originally Posted by theBlaze74
    My bad.

    Your usual schoolyard namecalling aside, I thought i got the humor, but if it wasnt a jab, i must have misunderstood the meaning.

    Please explain.
    I was simply inquiring what God you worship. In most religions, it's frowned upon to say things like...

    Quote Originally Posted by theBlaze74
    My god thats disgusting.
    and like most questions, you refused to answer. I sense that my questioning you makes you uncomfortable, you don't seem to enjoy the hit and run statements that you employ so often.
    Freedom of some speech in the US, through someone in the UK.
  6. #186  
    Quote Originally Posted by HobbesIsReal
    This is exactly along the lines of thoughts, but you stated a heck of a lot better than could have.

    Due to the larger numbers, it is easy politicize it. It also draws attention. And is certainly worthy of looking at to see if it is legit, manipulated, illegally influenced, monopolized, etc.... Or simply they may be all on the up and up with business practices, but simply on a larger scale than nearly any other industry (except for maybe certain cases with pharmaceuticals. )

    It is just so hard for the average person, like myself, to really get a grip on this issue because of so many ways to spin the numbers, different reporting to different groups (i.e. investors, IRS, public, etc..).
    To say it is hard for the average person to "get a grip", on the recent Exxon profits is itself an EXTREME viewpoint.

    $3 dollars a gallon, 8.4 billion dollars, the largest EVER in corporate history

    And allowing Exxon to make the decision as to when and how to expand production is like asking the Fox when he feels you should close the hen house door.
  7. #187  
    Does anyone here really think fuel prices are not related to supply and demand?

    Surur
  8.    #188  
    Quote Originally Posted by theBlaze74
    To say it is hard for the average person to "get a grip", on the recent Exxon profits is itself an EXTREME viewpoint.

    $3 dollars a gallon, 8.4 billion dollars, the largest EVER in corporate history

    And allowing Exxon to make the decision as to when and how to expand production is like asking the Fox when he feels you should close the hen house door.
    When you are talking about profit margins, ROI - return on investment, 4 different methods of reporting nearly every figure to multi authoritative bodies, etc... it is not an "extreme point of view" to ask these questions. Not to would be turning a blind eye to developing solutions to deal with it.

    I am in no way defending them, simply trying to understand the situation.

    I know 8.4 billion is the largest in corp history, but was their investment also the largest? Was their profit margin or ROI out of whack of when they did poorly? Is the supply & demand profit ratio in historical alignment? etc....

    It is not about just the profit earned, though that can be a separate issue all together even if everything was in the clear, simply because of the amounts we are talking about.
    Last edited by HobbesIsReal; 04/30/2006 at 06:44 PM.
  9. #189  
    Quote Originally Posted by BARYE
    uniquely high percentage of bullsht...evacuate from the colon of the earth at $25/barrel...350 million dollar gold watch for their fat cat retiring chairman...But maybe like any leader (your former governor for example) i'm surrounded by advisors who are all a bunch of yesmen toadies ...one of yall can explain it to me ...
    I will explain nothing unless you start acting a little more mature and quit the childish name calling.
  10. #190  
    Quote Originally Posted by theBlaze74
    $3 dollars a gallon, 8.4 billion dollars, the largest EVER in corporate history

    And allowing Exxon to make the decision as to when and how to expand production is like asking the Fox when he feels you should close the hen house door.
    Why is having the largest profits in history a bad thing? Is it a matter of jealousy? Part of me thinks it is, but I'm open to evidence of wrongdoing. Please note, I didn't say "allegations."
  11. #191  
    Quote Originally Posted by KRamsauer
    I will explain nothing unless you start acting a little more mature and quit the childish name calling.
    I'm aghast -- without qualification I'm really sorry that you were offended by what I wrote -- it wasn't my intent, not have you ever written anything that would cause me to name call or insult you.

    I've always tried to keep my playful sarcasm away from personal offence -- clearly my love for the cleverness of my own words in this case exceeded our mutual familiarity and trust --

    KRamsauer -- really sorry ....
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  12. #192  
    Quote Originally Posted by BARYE
    ...I've always tried to keep my playful sarcasm away from personal offence -- clearly my love for the cleverness of my own words in this case exceeded our mutual familiarity and trust --

    KRamsauer -- really sorry ....
    Now that contains a "uniquely high percentage of bullsh t..."
    Well behaved women rarely make history
  13. #193  
    Quote Originally Posted by clairegrrl
    Now that contains a "uniquely high percentage of bullsh t..."
    ahh clairegrrl...

    no one loves, appreciates, and understands me more than you -- what happened to us ??? ...
    Last edited by BARYE; 04/30/2006 at 09:44 PM.
    755P Sprint SERO (upgraded from unlocked GSM 650 on T-Mobile)
  14. #194  
    Quote Originally Posted by BARYE
    -- what happened to us ??? ...
    Geez...it's your f?,/&# breath
    Well behaved women rarely make history
  15. #195  
    Quote Originally Posted by KRamsauer
    Why is having the largest profits in history a bad thing? Is it a matter of jealousy? Part of me thinks it is, but I'm open to evidence of wrongdoing. Please note, I didn't say "allegations."
    Without getting too phillosophical, that depends on what you mean by "a Good thing" or "a Bad thing".

    Is it good for Exxon? Yes probbably. Is it good for consumers? Not so much. Good for the United States? I would say no. Good for planet Earth? Perhaps.

    How about if Exxon were to shut down another refinery? Or 2? And we saw fuel prices hit 7 or 9 dollars a gallon, and profits almost double? Would it be just my jealousy talking if that were to happen?

    And Hobbes, do we really need to get that deep in to the issue to see what is going on? We are paying $3 dollars a gallon when not long ago we were paying $2. Where did that extra dollar go? It has no relationship to the 8 billion dollar largest profit in history?
  16. #196  
    Quote Originally Posted by theBlaze74
    I dont remember saying the President heard voices in his head. I am sure he could get the messages from god by carrier pigeon, or a burning bush, or yahoo messenger.
    More games.
  17.    #197  
    Quote Originally Posted by theBlaze74
    And Hobbes, do we really need to get that deep in to the issue to see what is going on? We are paying $3 dollars a gallon when not long ago we were paying $2. Where did that extra dollar go? It has no relationship to the 8 billion dollar largest profit in history?
    Again, you ask tough questions about complicated subjects but want an easy answer, single paragraph answer, with no sources or facts to support it to limit any reading and discovery.

    There is no easy answer, and rarely is when talking about the global oil industry that hinges on international politics, world economy, every individual country's stability, terrorism threats and acts, supply and demand of every country in the world, OPEC manipulation, Venezuela Dictator (2nd or 3rd top supplier to the US) threatening to stop all oil to the USA, China & India & Russia oil dealings with Iran, weather disasters, taxes imposed by gov / state / county / city, conservation (or lack of), politicizing politicians, etc.... Just a single one of these (or countless other factors) goes south and the whole industry can be on it's head with $8 a gallon gas at the pump.

    So I actually thought I was keeping it basic by only focusing the relational perspective of the profits to see if they line up with when they were doing bad as well. If they do, that would be a good, and only a, indication that they might not be cooking the books as bad as one might think. But if there is a huge influx of profits margins, ROI, etc... then that is certainly a HUGE indication that something is diffidently up and needs to be addressed.

    The question is do you want to try to address any possible abuse of obtaining that profit, or simply limit the amount of profit they can make, even if it is legit, just because it was more than anyone else has done?
  18. #198  
    Quote Originally Posted by theBlaze74
    Without getting too phillosophical, that depends on what you mean by "a Good thing" or "a Bad thing"....And Hobbes, do we really need to get that deep in to the issue to see what is going on? We are paying $3 dollars a gallon when not long ago we were paying $2. Where did that extra dollar go? It has no relationship to the 8 billion dollar largest profit in history?
    Of course it has a relationship and the relationship is this: investments made in prior years (going back decades in cases) have resulted in a service that the american consumers increasingly value. Remember, you can't just compare $2 gasoline to $3 gasoline. You have to compare $3 gasoline to no gasoline as well.
  19. #199  
    All this talk about gas prices makes me think of "real" gas: natural gas, not gasoline. It is chiefly used by industry (though many houses use it to heat their homes). It is currently in the $6-$7 range, but has been as high as $15. And that's compared to historical range of $1-$3. Now that's a run up!
  20. #200  
    Quote Originally Posted by KRamsauer
    Of course it has a relationship and the relationship is this: investments made in prior years (going back decades in cases) have resulted in a service that the american consumers increasingly value. Remember, you can't just compare $2 gasoline to $3 gasoline. You have to compare $3 gasoline to no gasoline as well.
    American consumers would increasingly value $8 dollar or $12 dollar or even $100 dollar gas as well because as you said, there is no alternative is no gasoline.

    But certainly you are not saying that we should just stand by and accept whatever price and whatever profit margin comes our way.
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