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> the future of GM...
Rob Hood
post Jul 15 2008, 03:06 AM
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http://www.autoextremist.com/current/2008/7/8/rants-453.html

Was listening to some newsradio today - many analysts are painting a bleak picture. Heard that Hummer and Saab were going to be let go, maybe more. I've already seen where Chevy is not sponsoring several NASCAR races next year.

Rick Wagoner is supposed to deliver an announcement tomorrow morning at 0830 EST. Should be worth listening to.

This post has been edited by Rob Hood: Jul 15 2008, 05:59 AM
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poSSum
post Jul 15 2008, 09:31 AM
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Tough times for sure.
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sgarnett
post Jul 15 2008, 11:56 AM
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I hate to say this, but it seems like a terrible time to be on the verge of reintroducing the Camaro. Keeping an existing production line going is one thing, but introducing a heavy, powerful pony car at this time seems like dooming it to an early death. They might be better off holding it back for now.

Sure, WE know the highway gas mileage of the 4th gens is actually better than many cars perceived as more economical, but nobody else knows that, and the city mileage is nothing to get excited about. Dunno how the new one will fare, but heavier, more powerful, more drag (at least it looks that way, but I might be wrong), and giant rims certainly stack the deck against it. Regardless, the perception will be that it's a gas hog, and that's going to make it a tough sell.

On a related note, I was in the customer service center of my local UPS hub yesterday. All three employees were sitting around bored with nothing to do. The air conditioning was working great. It's the first time I've ever been in there in the middle of a Summer day and not sweated in a long line as the AC struggled to keep up with the sliding door traffic.
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trackbird
post Jul 15 2008, 02:32 PM
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http://money.cnn.com/2008/07/15/news/compa...dex.htm?cnn=yes

QUOTE
GM to cut jobs, suspend dividend
Beleaguered automaker also plans asset sales, aiming for $10 billion in 'cash improvements' by 2009. CEO Wagoner says 'difficult decisions' necessary for survival.
By Aaron Smith, CNNMoney.com staff writer
Last Updated: July 15, 2008: 9:42 AM EDT

High gas costs stall GM

NEW YORK (CNNMoney.com) -- General Motors Corp. said Tuesday it will suspend its dividend, sell off $4 billion to $7 billion worth of assets and cut 20% worth of salaried cash costs in an overall plan to save billions of dollars.

"We need to take some very tough actions to ensure our survival and success," said Chief Executive Rick Wagoner, in a press conference, referring to the current market conditions as an "unprecedently difficult time."

In an earlier broadcast to employees, Wagoner said that these were "difficult decisions," but necessary for the company to prevail in the weak economy beset by high oil prices, which he called GM's "greatest concern."

Wagoner said the cost-cutting actions should help GM generate $10 billion in "cash improvements" by the end of 2009. Overall, the company plans to beef up liquidity by $15 billion through 2009.

At the end of the first quarter, GM said it had $23.9 billion in liquidity and access to $7 billion worth of U.S. credit, which is enough funding to get through 2008. But the company said it is gathering more liquidity to protect itself from a "prolonged U.S. downturn."

"Our plan is not just a plan to survive; it's a plan to win," said Wagoner, noting that raised cash could aid the company in shifting from trucks and SUVs to more fuel efficient cars.

"Our stated goal is to become the fuel economy leader in every sector in which we participate," said Robert Lutz, GM's vice chairman of global product development.

As part of its cost-cutting, GM plans to eliminate health care coverage for U.S. salaried retirees older than 65, effective Jan. 1. Wagoner said the company will increase pensions for affected retirees and their surviving spouses to "defray the impact."

GM (GM, Fortune 500) has lost about one third of its 107,000 U.S. hourly workers since 2004. GM offered buyouts to its entire remaining U.S. hourly workforce of 74,000 in February, in a bid to unload its more experienced, higher-paid employees.

The Detroit-based automaker has been hard-hit by record-high gas prices, economic weakness, and a waning consumer interest in trucks and sport utility vehicles. The company has not made a profit since 2005.

Truck sales were down 21% in the first six months of 2008, while car sales were down 9% and Hummer sales plunged 40%. Overall, GM's vehicle sales were down 16%: worse than the industrywide vehicle sales decline of 10%.

In June, GM said it would shut four SUV and truck plants, would shift to more fuel efficient vehicles and discontinue its Hummer brand.

The stock price for GM, the world's largest automaker, has plunged 62% this year, to 50-year lows. GM shares were up 3 cents to $9.41 in premarket trading.

Despite the doom and gloom in America, GM's sales edged up in Europe by 3% in the first six months of 2008, including a 58% increase in Eastern Europe and a 60% surge in Russia. This includes a 21% increase in Russian Hummer sales.

"Frankly, we're very well positioned outside the U.S. now, and will be in [the U.S.] too, when this cycle concludes," said Wagoner.

GM is the fourth-largest American company in terms of annual sales, competing with Toyota Motor ™ and Ford Motor (F, Fortune 500).

First Published: July 15, 2008: 8:41 AM EDT
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Rob Hood
post Jul 15 2008, 02:39 PM
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I think what surprises me is that the price of oil even caught the manufacturers off-guard. I would have thought that they would have been in some type of communication with the oil companies and attempted to avert or slow down the price increase. (That's just my conspiracy hat...) That only leads me to believe that either speculators or OPEC are controlling the cost of oil now.
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trackbird
post Jul 15 2008, 03:03 PM
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QUOTE (Rob Hood @ Jul 15 2008, 10:39 AM) *
That only leads me to believe that either speculators and OPEC are controlling the cost of oil now.



Fixed that for you.

I was originally trying to believe it was supply and demand, but I've spoken to my friends in investment banking and I've been reading anything I can about the current situation. From what I'm seeing, we don't have a shortage. We have supply that may be barely keeping up with demand, but we have no rationing and there are not lines around the block. However, as the value of the dollar slides, crude gets more expensive. As the value of the dollar slides, hedge fund managers buy commodities because they tend to resist the losses associated with a sliding dollar. So, they buy oil to fight the slide of the dollar which runs the price up, which helps promote inflation which causes the dollar to slide. This is turning into a vicious cycle that may take something "signifigant" to climb out of. And, no, I surely don't know what that event will be...

Of course, I've been wrong before.

On the other hand, if I'd realized that we were going to wind up here, I'd have kept my 2002 Z28 as a driver and skipped buying a truck and a dedicated track car. Guess they weren't the only ones caught off guard.
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Rob Hood
post Jul 15 2008, 03:23 PM
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So drilling our way out of this really isn't going to fix the problem, which is a weak dollar. And with China and India buying more and more oil, there is now a line at the counter, so to speak, which also drives up the cost. And what about all the manufacturing and other services that have gone overseas....including GM.
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marka
post Jul 15 2008, 03:48 PM
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Howdy,

Not to mention, "drilling our way out of this" won't do a freaking thing for the next seven years or whatever it is before the oil comes on line from the new wells.

Though it might help whack the speculators I guess.

This was interesting in GM's thing that Kevin quoted:

"As part of its cost-cutting, GM plans to eliminate health care coverage for U.S. salaried retirees older than 65, effective Jan. 1. Wagoner said the company will increase pensions for affected retirees and their surviving spouses to "defray the impact." "

Can they do that? Presumably they've got a contract with those folks, right?

Unrelated... I'm being pretty "glass is half full" here with this but... this could end up helping peformance minded folks as much as it hurts them... I'm really hoping that we see more emphasis on saving weight, plus more dedication on the part of the domestics toward smaller / funner cars (as a small segment of the "smaller / more fuel efficient" car market they're being forced to go into).

I think I've said it before, but in 2006 we were looking for a car with very good fuel economy that we'd like to drive. The only domestics that got good fuel economy were shitty econoboxes. Rode like crap, felt like crap, etc. It was worth it to us to pay more for a Civic, which felt _way_ more refined (and got better mileage to boot). Perhaps now the domestics will see that there's a market for people like us... Wanting a car that gets good fuel economy but is also sporty and/or nice to drive and/or whatever.

The new Mustang SVO I've heard some folks talk about seems like a great idea as a performance car for this transistion period we seem to be coming into (transistioning from gas powered cars to something else). Put some controls in the driver's hands and let them dial up the boost / decrease fuel economy when they want it, and otherwise sip the dino juice.

But the big potential win to me would seem to be that weight is going to matter more and more and more. Perhaps we can get away from 4k lb performance cars? :-)

Mark
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sgarnett
post Jul 15 2008, 03:53 PM
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If you think about it though, gas(oline) prices have not even kept up with oil prices, and we've had much cheaper gas than much of the world for a long time. I'm afraid I view this as an inevitable correction that is long overdue and all the more violent for it.

I've never been much of a conspiracy theorist. I've never encountered a large organization that was remotely efficient, organized, or coordinated enough to pull off a good conspiracy, not matter how badly they may want to.
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CamaroFS34
post Jul 15 2008, 03:55 PM
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I don't buy the "gas costs" argument either. The unfortunate truth is that this has been a long time coming. How many of us have had to defend our cars from the pony-car haters who automatically class them as "crap boxes" (due to GM's less-than-stellar build quality) and/or gas guzzlers (because of the V8, when they get as good of mileage as many of the Accords/Mazdas/etc out there)? GM did this to themselves years ago, through crappy cars -- build and design -- and poor marketing, and now it's all building to a head.

My mom owns a new Saturn Aura XR. This is the same platform as the Chevy Malibu, and is actually an Opel. When I drove the car, the only thing that told me it was a GM was the Saturn emblem. Seriously, the fit/finish and overall interior is not the stereotypical GM that we've all tolerated in our F-bodies. It is very much BMWish, and considering the car is actually an Opel, that really isn't a surprise. The GTO is the same way -- but, hey! it's a Holden. Why is it that GM is going to it's European and Australian branches for cars to sell in America? I think it's because they are finally realizing that their reputation for crappy cars is a major part of the reason that sales are down. The unfortunate thing is that even though they have started to make a turnaround with the cars, that legacy is still keeping people out of the sales room.

When I was looking at the Mazdaspeed 3 earlier this year, I was appalled by the gas mileage the car was rated at. While I know the EPA ratings are an average, it was still literally no better than the EPA ratings on my 1996 Camaro. That's really sad. My 2006 WRX gets pretty much the same mileage as my Camaro, especially on the highway (it's marginally better in city driving). Plenty of people have smirked to me about the gas prices, "Guess you're not driving the Camaro very much now!" and when I ask them what their mileage is, and then I tell them mine, unless they are in a hybrid or a sub-compact like an Aveo, they aren't doing phenomenally better than me (for the record, even with the A/C on, the green car was getting 27-29mpg on the trip to/from Atlanta last weekend, and it did 30mpg with the A/C off).

Of course, GM's union workers don't help the situation any either.
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trackbird
post Jul 15 2008, 04:04 PM
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QUOTE (marka @ Jul 15 2008, 11:48 AM) *
This was interesting in GM's thing that Kevin quoted:

"As part of its cost-cutting, GM plans to eliminate health care coverage for U.S. salaried retirees older than 65, effective Jan. 1. Wagoner said the company will increase pensions for affected retirees and their surviving spouses to "defray the impact." "

Can they do that? Presumably they've got a contract with those folks, right?


Salaried usually means "management" and not union. I don't think they have much of anything approaching a "contract" with retired management. They have a requirement to provide pension and probably "some" health care. I'm betting that the terms of the healthcare are not spelled out specifically. So, as long as you have some type of insurance (it may have a $10k a year deductible before they pay anything, but it's insurance), you're probably getting what you're owed.

I could be wrong.

And I do agree that we need to have the government stop pushing the crash standards that are creating 4,200 lb cars. Some years ago, a 4,200 lb vehicle was a truck, not a GTO (they may be a touch lighter than that, but still). I think they have been pushing much of the increases to help cars stand up to impacts with the large quantity of SUV's on our roads. However, now that the SUV craze has come to an end, it seems reasonable to relax some of those rules and allow manufacturers to lighten their cars a bit. You can always run into something larger than you on the road (tractor trailers, commercial trucks, pick up trucks), but now that we are seeing the "great SUV revolt", we should see less of them on the road over time. So, relaxing the crash standards seems logical to me.

Besides, you can't save everyone... (IMG:http://www.frrax.com/rrforum/style_emoticons/default/nutkick.gif)
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marka
post Jul 15 2008, 04:11 PM
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Howdy,

QUOTE (trackbird @ Jul 15 2008, 12:04 PM) *
Salaried usually means "management" and not union. I don't think they have much of anything approaching a "contract" with retired management. They have a requirement to provide pension and probably "some" health care. I'm betting that the terms of the healthcare are not spelled out specifically. So, as long as you have some type of insurance (it may have a $10k a year deductible before they pay anything, but it's insurance), you're probably getting what you're owed.


Wow, that sucks.

Can we move to universal health care yet please? You know, like all the other civilized countries where it seems to work pretty well, particularly in comparison to "no health care for you, sorry about your bad luck"?

Mark
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00 Trans Ram
post Jul 15 2008, 04:22 PM
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One problem (certainly not the only, and maybe not the main) is in Washington. Now, I work in politics, so I'm not saying "Washington" as a bad thing. But, the culture in Washington is that my side is right, and your side is wrong. Republicans want to drill more - Democrats want alternative sources. The problem is that both sides label the other as wrong.

Each side is right. Oil prices are driven by speculators. Yes, the weak dollar plays a role, but look at the volatility of the price of a barrel of oil during a single 8-hour trading session - it can vary by over $20! These are human beings who hear some good news (OPEC is producing more!) and start selling, thereby lowering prices. Then, they hear some bad news (Israel invades Iran), so they start buying, thereby raising prices. This all happens in a single day. It's not like either the supply of demand changes that rapidly. So, they're humans who make human decisions and react with some emotions.

Now, we get back to my point of both sides being right. If Congress were to lift the moratorium on OCS (Outer Coastal Shelf) drilling, then that would signify that there will be an increase in supply in the future. Because the speculators are trading on futures, then they will be inclined to start selling (before the price drops). Thsi selloff will lower prices on its own - long before supply hits. Will it be over night? Nope - but it will happen in the next few years, long before the physical oil hits markets.

However, we all know that oil will become scarce, no matter where we drill. So, we must invest in alternative sources. Again, Congress must mandate these investments, as a capitalistic market will not do so if they see oil prices going down. This is the long-term (25+ year) solution.

So, when you combine the Democrat and Republican answers, you get a solution that both works in the short and long term! Unfortunately, the two sides cannot hardly agree on anything. And, this being an election year, they won't agree until 2009.
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00 Trans Ram
post Jul 15 2008, 04:54 PM
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QUOTE (marka @ Jul 15 2008, 11:11 AM) *
Can we move to universal health care yet please? You know, like all the other civilized countries where it seems to work pretty well, particularly in comparison to "no health care for you, sorry about your bad luck"?

Mark


Whoa, Mark. I mentioned above that I work in politics. Specificall, I specialize in government relations for a health system. Be careful for what you wish, you just might get it.

A universal health care system in our country would be wildly expensive. Medicare is already the single largst grant program of the US government. However, Medicare doesn't even pay a hospital 100% of COST when taking care of a paitent. It pays about 85% of cost. So, that means for every patient that comes in with Medicare, the hospital is losing 15% of it's money. Medicaid is the same way - we lose money on every patient. Then you have the uninsured, from whom we get about $0.

So, who pays? Responsible people with health insurance. You and me. We end up footing the bill for everyone who does not have private insurance. That's why our rates are so jacked up.

Now, let's say that government starts paying for all health care. That means that, again, you and me will be paying. Except this time, the government will be paying on our behalf. Same result (money goes out of your wallet, through a middle man, and into a hospital), just a different middle man.

Now, if you're thinking that the hospitals can afford to make a little less profit, think again. Our hosptial makes about a 3% profit. And, we have the 2nd highest profit margin in southeast Louisiana. Most hospitals nationwide would KILL to make 3% profit, as the average profit margins for hospitals hover around 2%. So, if you want to keep a hospital's doors open, you're going to have to pay them roughly what they're making now.

But, the universal healthcare system is not usually touted as saving money. Its big arguement is that everyone will have access to care. Well, here is where a cold dose of reality sets in. Right now, these people are not receiving the care they need. They can get emergency care, but preventative care is non-existant for most. Plus, the culture of America is to not take care of a problem until it the last possible minute (in health care, this means you have a heart attack instead of not eating fried foods).

So, under a universal system, we've got more people to care for. This will increase the costs of the system - costs that you and I are paying in taxes.

How do countries with this system in place pay for it, you ask? They refuse services to people. Let's say there is this drug that will reduce the risk of strokes by 50%, but it costs $500 per pill. With universal healthcare, the government can't afford to pay for everyone in the country to start taking this pill, so no one gets it. But, with the current system, most people still don't get it - but some (those who can afford it) do get it.

Ultimately, it's a system that would either a) bankrupt the American government, or (IMG:http://www.frrax.com/rrforum/style_emoticons/default/cool.gif) force Americans to accept that they can no longer expect the level of service to which they have become accustomed.

BTW, it's interesting that most people in the healthcare industry who understand the situation oppose universal healthcare. These are hosptial executives who would benefit because they'd get paid for every patient that shows up for services. But, most in the healthcare industry are against it. Why? Because they realize that it would be too expensive and would regulate a part of American life that should not be regulated.
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Rob Hood
post Jul 15 2008, 05:11 PM
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Universal health care will bankrupt the country faster than the oil crisis. Medicare is the biggest joke on the planet. My Mom cannot afford all of her required medicines with her fixed income because she is currently experiencing the "donut hole," a situation where you have exceeded a set amount of prescription drug costs through your copay and the government's payment for the drugs, and now you must pay the drug's full cost until you reach another predetermined cost level, at which time the co-pay returns. This is MEDICARE folks - and oh BTW, CONGRESS voted in their OWN health care plan, so they wouldn't have to deal with this.

I was surprised to read that GM actually had a funded health care plan for its retirees. Blame the Union on that one...(IMO) No wonder the cars cost so much. GM has stated that their health care costs are costing them approximately $1500 PER CAR.

The cars would weigh alot less if they didn't have to have all the safety equipment installed. Imagine a more comprehensive driver's ed program, instead of the currently irresponsible government-sponsored ones. I learned more from my parents than the six weeks' driver's ed class I took in high school. I would actually be in favor of mandatory annnual driver's training - no pass, no license. Might get rid of some of the highway congestion....
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trackbird
post Jul 15 2008, 05:11 PM
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QUOTE (trackbird @ Jul 15 2008, 11:03 AM) *
This is turning into a vicious cycle that may take something "signifigant" to climb out of. And, no, I surely don't know what that event will be...


Oddly, I think we are finding our answer.

http://money.cnn.com/2008/07/15/markets/oi...dex.htm?cnn=yes

QUOTE
Oil tumbles on Fed chief's bleak outlook
Bernanke indicates inflation and high fuel prices will cut in to U.S. demand for oil.

NEW YORK (CNNMoney.com) -- Oil prices plummeted Tuesday, down as much as $9.26 a barrel, as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke.

Light, sweet crude fell $7.37 to $137.81 a barrel in electronic trading on the New York Mercantile Exchange. Earlier, prices dipped as low as $135.92, nearly $11 below the day's high.

"There's more demand destruction than people first perceived," said Neal Dingman, senior energy analyst at Dahlman Rose & Co.

Prices began to fall after Federal Reserve Chairman Ben Bernanke warned that high energy prices, coupled with serious problems in the financial sector, have sapped the purchasing power of U.S. households.

The mortgage crisis and high energy costs will remain a drag on the U.S. economy for the rest of the year, Bernanke told the Senate Banking Committee Tuesday.

Businesses may start pushing a greater percentage of their high fuel and commodity costs through to consumers, warned Bernanke.

Gasoline prices in the U.S. maintained record highs at $4.109 a gallon Tuesday, according to a daily survey from motorist group AAA.

Inflation: The weakened dollar, which Bernanke named as one of the reasons Americans can't spend as much, has been blamed for much of crude's runup.

Investors have been buying oil and other commodities to hedge against inflation, but that behavior may be changing as many begin to see it weighing on demand.

There's "definitely a reverse of what the rationale was even 2 to 3 weeks ago," said Peter Beutel, oil analyst with Cameron Hanover.


Federal Reserve: The Federal Reserve, which has the power to quell runaway inflation by raising a key interbank lending rate, has its hands tied, since the banks and other institutions that prop up the U.S. economy need the liquidity, according to Tom Orr, head of research at Weeden & Co.

In recent days, the government has unveiled a plan to bolster mortgage financing companies Fannie Mae and Freddie Mac, and has taken control of mortgage lender IndyMac Bank.

"They've got to keep rates as low as they can, though they really should be tightening... They know they need to tighten, but they just can't," said Orr.

"This is starting to feel like Jimmy Carter and the 1970s all over again," he added, describing a time when inflation was high due in large part to soaring energy prices.

OPEC demand: Internationally, the Organization of Petroleum Exporting Countries mirrored Bernanke's concerns. The oil cartel lowered its demand forecast for 2008 to an increase of 1.2% from 1.28%, blaming economic strife and high fuel prices.

Concerns about lower demand even overshadowed the tight supply picture, which has been at the forefront of oil's price surge.

Brazil: The five-day strike by Brazilian oil workers in the Campos basin at 33 offshore rigs operated by state-run oil company Petrobras entered its second day, cutting into supply.

Petrobras stated that only two rigs had been totally shut down, but that production had been reduced by 4%, according to the Associated Press.

Iran: Investors also remained concerned about tensions between Iran, the second-largest exporter in OPEC, and the United States and Israel over its nuclear program.

Iranian president Mahmoud Ahmadinejad blamed high oil prices on threats from the West in an interview with state television, according to reports. However, he said that talks with the United States were possible.

First Published: July 15, 2008: 9:22 AM EDT


So, they are finally getting smart enough to know that they can't keep pushing oil prices up (and impacting the dollar and inflation) indefinately. And, they are starting to see the end where they are about to wind up owning a bunch of oil they paid too much for and they can't easily sell (thus decreasing its value). Once the cycle collapses, it will have to eventually break. The bubble may be starting to pop based on this report and with any luck a slide will ensue. If that were the case, inflation should begin to ease (though I think much of the cost has yet to be passed on and we're still going to be on the hook for that much inflation already). Once the prices slide and inflation eases, the fed can begin to raise interest rates which will start to push the value of the dollar higher, which will ease prices, etc. We will wind up with higher interest rates, but a dollar that's back to being worth something. Getting the cycle to turn around is going to be key and this might be the first round of change.

Of course I'm not an economist and this information is worth just what you paid for it (even with the value of the dollar today).
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Rob Hood
post Jul 15 2008, 05:16 PM
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Oil price fell about 9 bucks last week too, then spiked right back up.

I really thought this was going to cycle like the housing industry, but so far haven't seen anything to support that. Of course, the housing industry really wasn't a cycle, but a combination of greedy banks loaning money to people who shouldn't have qualified in the first place.
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CMC #37
post Jul 15 2008, 05:20 PM
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Eugenio, what can you tell us about Canadian health care? So far every Canadian I have spoken to has no complaints and no big Dr. bills. I am sick, sick of our health care system! I am self-employed and it looks like I'll have to get a second job just to pay for health insurance. That's not right.
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roadracetransam
post Jul 15 2008, 05:27 PM
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QUOTE (00 Trans Ram @ Jul 15 2008, 09:54 AM) *
QUOTE (marka @ Jul 15 2008, 11:11 AM) *
Can we move to universal health care yet please? You know, like all the other civilized countries where it seems to work pretty well, particularly in comparison to "no health care for you, sorry about your bad luck"?

Mark


Whoa, Mark. I mentioned above that I work in politics. Specificall, I specialize in government relations for a health system. Be careful for what you wish, you just might get it.

A universal health care system in our country would be wildly expensive. Medicare is already the single largst grant program of the US government. However, Medicare doesn't even pay a hospital 100% of COST when taking care of a paitent. It pays about 85% of cost. So, that means for every patient that comes in with Medicare, the hospital is losing 15% of it's money. Medicaid is the same way - we lose money on every patient. Then you have the uninsured, from whom we get about $0.

So, who pays? Responsible people with health insurance. You and me. We end up footing the bill for everyone who does not have private insurance. That's why our rates are so jacked up.

Now, let's say that government starts paying for all health care. That means that, again, you and me will be paying. Except this time, the government will be paying on our behalf. Same result (money goes out of your wallet, through a middle man, and into a hospital), just a different middle man.

Now, if you're thinking that the hospitals can afford to make a little less profit, think again. Our hosptial makes about a 3% profit. And, we have the 2nd highest profit margin in southeast Louisiana. Most hospitals nationwide would KILL to make 3% profit, as the average profit margins for hospitals hover around 2%. So, if you want to keep a hospital's doors open, you're going to have to pay them roughly what they're making now.

But, the universal healthcare system is not usually touted as saving money. Its big arguement is that everyone will have access to care. Well, here is where a cold dose of reality sets in. Right now, these people are not receiving the care they need. They can get emergency care, but preventative care is non-existant for most. Plus, the culture of America is to not take care of a problem until it the last possible minute (in health care, this means you have a heart attack instead of not eating fried foods).

So, under a universal system, we've got more people to care for. This will increase the costs of the system - costs that you and I are paying in taxes.

How do countries with this system in place pay for it, you ask? They refuse services to people. Let's say there is this drug that will reduce the risk of strokes by 50%, but it costs $500 per pill. With universal healthcare, the government can't afford to pay for everyone in the country to start taking this pill, so no one gets it. But, with the current system, most people still don't get it - but some (those who can afford it) do get it.

Ultimately, it's a system that would either a) bankrupt the American government, or (IMG:http://www.frrax.com/rrforum/style_emoticons/default/cool.gif) force Americans to accept that they can no longer expect the level of service to which they have become accustomed.

BTW, it's interesting that most people in the healthcare industry who understand the situation oppose universal healthcare. These are hosptial executives who would benefit because they'd get paid for every patient that shows up for services. But, most in the healthcare industry are against it. Why? Because they realize that it would be too expensive and would regulate a part of American life that should not be regulated.



Couldn't agree more!
I used to live in a country with universal healthcare. The quality of care goes straight down the drain, and the cost to taxpayer goes sky high. Remember someone has to pay for the crappy service, and it will not be the person whom is reciving the care. It will be the 20 to 65 year old "working" taxpayer. How would you like to see an additional 35% taken from your pay. Regardless if you live a healthy lifestyle or not.
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firehawkclone
post Jul 15 2008, 05:41 PM
Post #20


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QUOTE (marka @ Jul 15 2008, 08:48 AM) *
Howdy,

Not to mention, "drilling our way out of this" won't do a freaking thing for the next seven years or whatever it is before the oil comes on line from the new wells.


Most new land base wells in my area come "online" within 2 to 5 days after casing is set in place. Sometimes sooner! I'm drilling as I type (IMG:http://www.frrax.com/rrforum/style_emoticons/default/2thumbs.gif) on a lease that been around for 100+ years (IMG:http://www.frrax.com/rrforum/style_emoticons/default/blink.gif)


QUOTE (trackbird @ Jul 15 2008, 10:11 AM) *
QUOTE (trackbird @ Jul 15 2008, 11:03 AM) *
This is turning into a vicious cycle that may take something "signifigant" to climb out of. And, no, I surely don't know what that event will be...


Oddly, I think we are finding our answer.

http://money.cnn.com/2008/07/15/markets/oi...dex.htm?cnn=yes

QUOTE
Oil tumbles on Fed chief's bleak outlook
Bernanke indicates inflation and high fuel prices will cut in to U.S. demand for oil.

NEW YORK (CNNMoney.com) -- Oil prices plummeted Tuesday, down as much as $9.26 a barrel, as investors feared a further decline in U.S. demand after hearing comments from Federal Reserve Chairman Ben Bernanke.

Light, sweet crude fell $7.37 to $137.81 a barrel in electronic trading on the New York Mercantile Exchange. Earlier, prices dipped as low as $135.92, nearly $11 below the day's high.

"There's more demand destruction than people first perceived," said Neal Dingman, senior energy analyst at Dahlman Rose & Co.

Prices began to fall after Federal Reserve Chairman Ben Bernanke warned that high energy prices, coupled with serious problems in the financial sector, have sapped the purchasing power of U.S. households.

The mortgage crisis and high energy costs will remain a drag on the U.S. economy for the rest of the year, Bernanke told the Senate Banking Committee Tuesday.

Businesses may start pushing a greater percentage of their high fuel and commodity costs through to consumers, warned Bernanke.

Gasoline prices in the U.S. maintained record highs at $4.109 a gallon Tuesday, according to a daily survey from motorist group AAA.

Inflation: The weakened dollar, which Bernanke named as one of the reasons Americans can't spend as much, has been blamed for much of crude's runup.

Investors have been buying oil and other commodities to hedge against inflation, but that behavior may be changing as many begin to see it weighing on demand.

There's "definitely a reverse of what the rationale was even 2 to 3 weeks ago," said Peter Beutel, oil analyst with Cameron Hanover.


Federal Reserve: The Federal Reserve, which has the power to quell runaway inflation by raising a key interbank lending rate, has its hands tied, since the banks and other institutions that prop up the U.S. economy need the liquidity, according to Tom Orr, head of research at Weeden & Co.

In recent days, the government has unveiled a plan to bolster mortgage financing companies Fannie Mae and Freddie Mac, and has taken control of mortgage lender IndyMac Bank.

"They've got to keep rates as low as they can, though they really should be tightening... They know they need to tighten, but they just can't," said Orr.

"This is starting to feel like Jimmy Carter and the 1970s all over again," he added, describing a time when inflation was high due in large part to soaring energy prices.

OPEC demand: Internationally, the Organization of Petroleum Exporting Countries mirrored Bernanke's concerns. The oil cartel lowered its demand forecast for 2008 to an increase of 1.2% from 1.28%, blaming economic strife and high fuel prices.

Concerns about lower demand even overshadowed the tight supply picture, which has been at the forefront of oil's price surge.

Brazil: The five-day strike by Brazilian oil workers in the Campos basin at 33 offshore rigs operated by state-run oil company Petrobras entered its second day, cutting into supply.

Petrobras stated that only two rigs had been totally shut down, but that production had been reduced by 4%, according to the Associated Press.

Iran: Investors also remained concerned about tensions between Iran, the second-largest exporter in OPEC, and the United States and Israel over its nuclear program.

Iranian president Mahmoud Ahmadinejad blamed high oil prices on threats from the West in an interview with state television, according to reports. However, he said that talks with the United States were possible.

First Published: July 15, 2008: 9:22 AM EDT


So, they are finally getting smart enough to know that they can't keep pushing oil prices up (and impacting the dollar and inflation) indefinately. And, they are starting to see the end where they are about to wind up owning a bunch of oil they paid too much for and they can't easily sell (thus decreasing its value). Once the cycle collapses, it will have to eventually break. The bubble may be starting to pop based on this report and with any luck a slide will ensue. If that were the case, inflation should begin to ease (though I think much of the cost has yet to be passed on and we're still going to be on the hook for that much inflation already). Once the prices slide and inflation eases, the fed can begin to raise interest rates which will start to push the value of the dollar higher, which will ease prices, etc. We will wind up with higher interest rates, but a dollar that's back to being worth something. Getting the cycle to turn around is going to be key and this might be the first round of change.

Of course I'm not an economist and this information is worth just what you paid for it (even with the value of the dollar today).


Damm! I should have sold my Halliburton stock last week (IMG:http://www.frrax.com/rrforum/style_emoticons/default/banghead.gif)
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