1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

The Economy thread

Discussion in 'Members' Lounge' started by Briansol, Jan 19, 2016.

  1. Briansol

    Briansol Admins Admin VIP

    Messages:
    21,455
    Likes Received:
    2,117
    Joined:
    Nov 18, 2007
    Location:
    CT
  2. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

    Messages:
    11,939
    Likes Received:
    1,059
    Joined:
    Apr 21, 2003
    Location:
    Washington State
    Haven't people been saying we are in a recession for 5-6 years now?
     
  3. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

    Messages:
    11,939
    Likes Received:
    1,059
    Joined:
    Apr 21, 2003
    Location:
    Washington State
  4. corvetteguy78

    corvetteguy78 Well-Known Member VIP

    Messages:
    3,520
    Likes Received:
    290
    Joined:
    Feb 19, 2007
    Location:
    CT
    Is this exactly the opposite of what Obama's own news station, CNN, was saying in November?

    The U.S. economy is humming again
    October was a month of strong jobs gains. Since President Obama took office, the economy has added 8.7 million jobs.
    On many fronts, there's a lot to cheer. More people are getting back to work. Gas prices are extremely low. The stock market is back near its all-time highs. Home prices have rebounded in most parts of the country.

    Even wages and consumer spending are finally starting to show signs of a pickup.

    Unemployment is now down to 5% -- a healthy level that the U.S. hasn't seen since before the financial crisis of 2008.

    A stronger economy is a problem for Republicans

    "With low unemployment and rising wages, the Republicans' job gets a lot harder," says Doug Holtz-Eakin, president of the American Action Forum and a former economic adviser to John McCain's presidential campaign.

    Of course, there are still challenges. Economic growth is good, but not great. The U.S. has been expanding at about 2% a year. That's a lot slower than the usual growth of 3% that America has averaged over the past several decades.

    "We've been recovering at 2.2%. The question is will we see something that is faster?" says economist Holtz-Eakin.

    He adds that Friday's strong jobs report "is promising but is by no means definitive" that growth will pick up.
     
  5. lswhitecivic

    lswhitecivic Senior Member

    Messages:
    774
    Likes Received:
    37
    Joined:
    Aug 4, 2003
    Location:
    DFW, TX
    The drop in oil in last 18 months has been insane. The company I work for now is on the brink of bankruptcy, but they've sort of put themselves here by not being more fiscally responsible during the good times of high oil prices. Right now they're losing something like 50 million dollars a quarter.

    But even companies with a much better balance sheet haven't fared well. The company I worked at in Colorado always had a very strong balance sheet and had a good mix of 50% oil and 50% gas. But I left there in September of 2014 and shares of their stock were about $90. Since then they've lost 90% of their value and as of yesterday their shares are under $10.

    I'm trying to get in with another O&G company in the Dallas area that is one of the much bigger players and is in a much better position to weather the storm until prices come back.

    I think we're going to see the number of independent players drop significantly in the coming years. Rather than spending money on new drilling, larger players are just going to go purchase smaller companies that already have producing wells with additional proved reserves. These smaller companies have lost so much value in the last 2 years that its going to be a buying frenzy once prices start to come back slightly and larger companies stop hoarding cash.
     
  6. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

    Messages:
    11,939
    Likes Received:
    1,059
    Joined:
    Apr 21, 2003
    Location:
    Washington State
    I feel like the oil crisis is going to be like the housing crisis. Oil companies have been raping us for profits for years, and now they are storing all that money offshore. Profits will tumble and they'll be screaming that they need saved. Just to screw us all again in the future while keeping their own profits offshore and still not paying taxes.
     
    reckedracing likes this.
  7. Briansol

    Briansol Admins Admin VIP

    Messages:
    21,455
    Likes Received:
    2,117
    Joined:
    Nov 18, 2007
    Location:
    CT
  8. BigJ

    BigJ I'm just about that action Boss. VIP

    Messages:
    11,091
    Likes Received:
    408
    Joined:
    Oct 4, 2002
    Location:
    Washington
    This is pretty interesting. I'm not sure if its long term.... I think a pile of it is awful speculation. $AAPL is at 93.XX right now. Freaking A. The times we live.

    Think its bad in the US, look at Canada. They lived on the alberta oil sands for too long. They're in a gigantic recession. We're a major exporter there and the price of our product is tied directly to the currency. Freaking nuts seeing the exchange rate skyrocket to 1.458.
     
  9. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

    Messages:
    11,939
    Likes Received:
    1,059
    Joined:
    Apr 21, 2003
    Location:
    Washington State
  10. lswhitecivic

    lswhitecivic Senior Member

    Messages:
    774
    Likes Received:
    37
    Joined:
    Aug 4, 2003
    Location:
    DFW, TX
    I honestly can't imagine a bailout for the oil industry. First off, with everyone talking about global warming and fossil fuels being dirty energy, I feel like there's no way congress would act on something like that.

    Plus I don't imagine many producers would want to have the government involved with them. They'd rather go bankrupt than get together with the government.
     
  11. BigJ

    BigJ I'm just about that action Boss. VIP

    Messages:
    11,091
    Likes Received:
    408
    Joined:
    Oct 4, 2002
    Location:
    Washington
    Who do you think Congress works for? Not you or me pal. These guys live on the government and the government lives on them. Why do you think there are global warming deniers? It's Big oil and it'll strangle everything in its path to sweet sweet black gold.
     
  12. Briansol

    Briansol Admins Admin VIP

    Messages:
    21,455
    Likes Received:
    2,117
    Joined:
    Nov 18, 2007
    Location:
    CT
    Yeah, there was 47 cent gas in some parts of michigan i heard last week, but that wasn't 'national average'.

    What is big oil, though?
    exonmobil is the only US company that comes to mind.
    most the other's are not US based. BP, Valero, citgo, etc are all non-us.

    texaco isn't relevent anymore (at least around here...l haven't seen a taxaco in 20 years)
     
  13. invisibledemon

    invisibledemon Bored Moderator VIP

    Messages:
    7,402
    Likes Received:
    626
    Joined:
    Jan 15, 2007
    Location:
    Tn
    For some reason, and this is mainly blind speculation on my part because I havnt done too much reading into things, I kind of get the feeling that the prices of oil are being pushed down in order to financially cripple a lot of the middle eastern countries, especially the ones that always seem to be brought up as doing business with ISIS in some form or another. Also, as stated above, the lower prices will make a lot of the rising stars in the industry unable to sustain and have to sell to larger corps, its a cleansing of possible future competition. once certain countries are on their knees and a lot of the companies are gone then we will probably see a sharp increase in the price of oil once its better controlled by fewer large players.

    It really amazes me how many companies are unable to plan for slumps and full on falls like this. It's like they think that it will always be a rise in profits and they shouldnt have to bank anything to use when things stop going up. The mindset of worrying about this quarter and this quarter only is what is finally going to kill a lot of companies and everybody knows it but anybody that tries to change that path gets sacked because the stock holders want profits now now now. and congress will always bail out the large corporations that fund all of their habits, they would scramble to save big oil much faster than they did the auto companies.
     
    Briansol likes this.
  14. get_nick

    get_nick These snozzberries taste like snozzberries... VIP

    Messages:
    11,939
    Likes Received:
    1,059
    Joined:
    Apr 21, 2003
    Location:
    Washington State
    They can't "prepare" because it shows weakness in their strategy. It is much more cost and revenue efficient to ride out a bubble and collapse than it is to prepare for a drop and slow your gains. It's even worse when individuals push the process and the corporations take the fall. Take mortgage lending for example. Why would a broker cut back on loans when he can make $10,000 per loan? He doesn't care if Countrywide collapses as long as he's getting paid today. Especially if Countrywide is going to collapse regardless. Individuals response to individual stimulus. Doing something "for the greater good" when you can profit yourself is stupid and foolish.
     
  15. BigJ

    BigJ I'm just about that action Boss. VIP

    Messages:
    11,091
    Likes Received:
    408
    Joined:
    Oct 4, 2002
    Location:
    Washington
    Big oil has little to do with where the companies are domiciled but where its products are derived from and where they're sold. The idea is that there are a pile of companies attached to them and so many economies are built on their production and taxes that the effects will ripple bad. Even the last frontier, Alaska, is in dire straights and is thinking of an income tax. The lobbying groups for Big Oil go hand in hand with the military industrial complex.

    Demand isn't accelerating at the same rate it was, while production is through the roof and more efficient than ever. Huge issue. Somehow we will continue to prop up oil.
     
  16. invisibledemon

    invisibledemon Bored Moderator VIP

    Messages:
    7,402
    Likes Received:
    626
    Joined:
    Jan 15, 2007
    Location:
    Tn
    how is it weakness to show that your company has longevity as well as profits as their goals? It just doesnt make sense to me. It has nothing to do with slowing the gains but putting more in reserve and not earmarked as profit to be distributed, this would lower the payout for investors and bonuses for whoever is tied to profits but if used as a long term plan that is implemented properly the loss would be marginal when spread out over the life of a company. then they would be able to ride out any bubble burst or even full on depression while still being viable.

    I understand it completely from an individuals perspective, the company gives zero fucks about the guys actually doing the work and wouldnt skip a beat to screw the little guys over. So, naturally if theres no level of actual loyalty going both ways then people are going to get what they want without regard to the company as a whole. But, this is something that falls onto the shoulders of the higher-ups that allowed those things to go through without giving a damn. nobody thinks long term about anything now, people are only concerned with the here and now which results in all kinds of skewed and odd speculations.
     
  17. Briansol

    Briansol Admins Admin VIP

    Messages:
    21,455
    Likes Received:
    2,117
    Joined:
    Nov 18, 2007
    Location:
    CT
    Every industry is like this.
    Every Vice President is like this.

    The strategy is a 3 year or less plan to make money, get their bonus, and retire with a severance of $20m plus. I see it every day. High turn over, new Vp's coming in, all short-sighted strategy to be first to market or first to something, but never anything that is sustainable or good for the company. There needs to be more balance in business here. They make their rev, they leave, and now the company has to figure out how to scan 500,000 pages of sales orders a day instead of building an application and computer data entry. They created twice the work, but got the profit on the books while they were here, and now they are gone and there's no f'ing historical data to query against because it's all on paper.
    One of hundreds of real-world examples I could give at the fortune 50 i work at....
     
  18. invisibledemon

    invisibledemon Bored Moderator VIP

    Messages:
    7,402
    Likes Received:
    626
    Joined:
    Jan 15, 2007
    Location:
    Tn
    Trust me, i get the whole reason people do this, but the fault lies with whoever owns/has controlling votes in the company. People keep allowing this to happen because they just want more more more then wonder why all of a sudden a company that was worth 50 billion is bankrupt and the stocks are worthless. the whole greater good argument isnt even really a good one. not doing stuff like that, or investing in companies that run like that is not so much about the greater good, it about the personal individual good of longevity and reliability. I'd much rather take a slightly lower payout knowing that the company has a solid plan and reserve that ensures that I will have a strong investment over the next 20 years than getting a little more and always wondering if this quarter is going to be the last.

    Whoever it is that hires the CEO's, VP's, etc. are the ones to blame for things continuing on that path. and i know that they are doing it for the same reason that the guy on the lowest level does it: to get as much as they can as fast as they can. nothing will be learned until complete collapse happens though, but even then people will always buy into the I can make you rich quick schemes.
     
    Briansol likes this.
  19. lswhitecivic

    lswhitecivic Senior Member

    Messages:
    774
    Likes Received:
    37
    Joined:
    Aug 4, 2003
    Location:
    DFW, TX
    At this point the drop in oil price is due to several influential factors...first off, demand has gone down globally, and especially in China as their economy slows. But at the same time that demand has gone down, you've got OPEC producing at a high level and not wanting to cut production because they want to drive prices down to get a lot of the US shale players out of business. I don't know that most people know this, but as of 2014 the US is biggest oil producer in the world.

    Those same US shale companies need to keep producing in order to have cash to pay their debts, so they're not going to stop production either. At this point a lot of them are starting to slash drilling budgets for 2016, but I haven't heard of a single company that's starting to shut-in wells. Its basically a game of chicken between OPEC and the US shale industry to see who cracks first. Even OPEC itself has a rift in it related to price. Several of the smaller countries that have a large portion of the country budget based on oil revenue are begging Saudi Arabia to cut production so that prices start to rise, but Saudi Arabia won't do that because they don't want to give up any more market share.
     
  20. Briansol

    Briansol Admins Admin VIP

    Messages:
    21,455
    Likes Received:
    2,117
    Joined:
    Nov 18, 2007
    Location:
    CT
    ww3 will be about oil. We always knew that.

    What we didn't think would happen would be that the reason would be that we have too much of it and it's too cheap.
     
    reckedracing likes this.
Verification:
Draft saved Draft deleted

Share This Page