I wonder if the “big guy” pays taxes on his 10% kickback?
Yes, that’s obvious, but you made it sound like a bad thing, which is why I didn’t get what you were trying to say.
Not my fault, gas price edition.
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BIDEN CHIDES OIL EXECUTIVES FOR CUTTING REFINING CAPACITY, SAYS THEY ARE DRIVING UP CONSUMER COSTS IN LETTER SEEN BY REUTERS
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BIDEN CALLS ON OIL REFINERS TO DELIVER ‘CONCRETE IDEAS’ TO INCREASE SUPPLY OF GASOLINE AND EXPLANATION FOR REFINERY CAPACITY ISSUES
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U.S. ENERGY SECRETARY SAYS “WE’RE ON A WAR FOOTING” WITH HIGH PRICE OF OIL, GAS PRECIPITATING INFLATION AROUND THE WORLD -MSNBC INTERVIEW
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U.S. ENERGY SECRETARY GRANHOLM SAYS WE’RE NOT AGAINST OIL PROFIT BUT 225% INCREASE IN PROFIT OVER A YEAR MEANS SOMETHING IS WRONG
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GRANHOLM SAYS WE KNOW PEOPLE ARE HURTING, HAVE TO INCREASE GLOBAL OIL SUPPLY
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GRANHOLM: NO TOOL IS OFF THE TABLE WHEN ADDRESSING GAS PRICE
Just to point out how wholely stupid Biden’s comments are about refining capacity, check out the utilization rates in the major regions of the US -
https://www.eia.gov/dnav/pet/PET_PNP_WIUP_A_(NA)_YUP_PCT_W.htm
Nearly everywhere is already 90-95%, which is pretty much maxxed out since you’re expected to have some downtime for occasional maintenance. East Coast for his voting base, PADD 1, is at 99.2% so surely they just need to do another 0.8% more refining and that’ll get gas prices down by half to Trump levels, right?
On the other side of the pond, they’re in trouble too. Called an emergency meeting of the EU Central Bank.
- ECB’S CENTENO SAYS WE EXPECTED SOME INFLATION BUT NOT SO MUCH INFLATION, WE ALL HAVE TO ADAPT POLICIES
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an unsuccessful series of rate hikes could fail to reduce prices while dramatically slowing the economy, experts said. Such an outcome would bring about stagflation — a mix of the words stagnation and inflation — which describes an economy with low growth and high prices. In other words, the high prices remain, but the lifeline of elevated income disappears.
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Investor fears of stagflation are at the highest since the 2008 financial crisis, while global growth optimism has sunk to a record low, according to Bank of America Corp.’s monthly fund manager survey.
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The ballyhooed ECB announcement was a nothing burger. The stock market thinks the Fed will act more forcefully but I have my doubts.
Edit. By The way, the weak retail figures were due to people being unable to buy cars because they’re not available
D espite very weak US Retail Sales figures for May (inflation-adjusted sales were down 1.3% MoM), EUR/USD has been under pressure in recent trade and is currently probing session lows in the 1.0400 area. Traders are attributing recent downside in the pair to euro weakness after the ECB announced that it would apply flexibility to its PEPP reinvestments to ease “fragmentation” in the transmission of monetary policy (essentially, to close yield spreads between Eurozone nations).
S eemingly, markets do not think the ECB went far enough in addressing fragmentation risk (German/Italian yield spreads jumped, for example) and this seems to have hurt the euro. With these two big catalysts (US data and the ECB) out of the way, attention has turned to the upcoming Fed meeting at 1800GMT and follow-up press conference with Fed Chair Jerome Powell.
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This was a fairly short and excellent video by Einhorn, big time hedge fund manager. Macro commentary on US debt, Fed, inflation, and historical perspective. Well worth a quick watch. Lots of good joke slides too, so it’s entertaining as well.
You dont think that a chunk of our current inflation problems is attributable to the vast number of minimum wage workers who have gotten raises to $15-20/hr over the past couple years?
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I didnt realize there was a shortage of gasoline? Certainly havent seen any indication of this anywhere around here, gas prices are high due to record(?) oil prices. Doesnt cutting refining capacity lower the cost of gasoline, due to having less facilities to maintain, as long as it isnt causing shortages?
Of course it means something is wrong - you’ve stiffled the production of oil. It’s not like the oil producers profiting off the higher prices have any control over those prices, they’re just pumping oil regardless of where the market has set the price. The 225% increase in profits is because of the 225% increase in oil prices.
Either replace Russian oil production or return Russian oil to the market, and oil profits (and gas prices) will be back down to previous norms in a matter of weeks.
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interesting talk but somewhat contradictory. At the beginning he says his hedge fund does not hold gold but he ends with a big pitch to buy gold. I own a fair amount of gold but I have not been buying recently since it has gone nowhere in the face of the inflation.
Einhorn does give a good historical perspective and how the current conditions such as our debt to GDP ratio over 120% constrain the fed’s actions.
speaking of constraints, look at the video at the link of Powell’s response to a question about what caused the current inflation. He admits that he does not know what caused it or how to fight the inflation. To me Einhorn’s discussion is the unspoken background to his answer.
What’s the reasoning here that “everybody” knows? It wasn’t explained by the article.
I know your questions are rhetorical, but for the folks that don’t actually know why Biden is full of it, here is the answer.
It is true there is no shortage of gas. However, it is true that oil production is not meeting demand. And that is something that can be put fairly on Biden’s shoulders. Because - current demand is the SAME as 2019 demand. And 2019 oil supply/demand equilibrium was ~$60 barrel. With the same demand, oil prices are $120/barrel because supply is way down. And Biden TOLD EVERYONE the moment he came into office that he did not want US supply to go back to pre-pandemic levels and would use his executive powers to make that happen. And he did! And he has not reversed course on that policy, even though everyone who knows anything about the energy sector would tell you we would see futures prices on oil DECREASE if he reversed his policies and said he was committed to bringing US oil production back up to pre-pandemic levels.
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nice little recap. promises made
https://twitter.com/gurgavin/status/1536395725231243265
promises kept:
Oh, now he wants to boost refining? Good luck with that.
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How?
And …
I’ll add to the expected response: ignore or provide excuse to why it can’t be done.
IIRC, this was initially called Carterflation. 
The basic point is that the national debt of these countries is so large that the added interest expense from higher rates is unsustainable. The example used above is the United States with $30 trillion national debt. For every 1%, 100 basis point, increase in the average interest rate, there is an added interest expense of $300 billion per year.
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Right, although to be fair our average debt is 5 years so only 1/5 of that increase shows up each year for the next 5 years as some matures and we have to reissue new replacement debt at prevailing higher rates.
Our average debt cost is like 1.6% last I saw, so if the 5 year treasury at 3.4% is indicative of where things go, maybe we end up doubling our interest expense. If inflation is worse and rates rise more than that, the costs will be worse.
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Yes. There is no chance that Powell will be able to pull a Volcker. It would bankrupt the country.
But the Biden administration is pouring gasoline on the inflation fire. I just saw a news report that they are very proud they reduced the deficit from $2.5 trillion to only $1 trillion this year.
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But when it comes to breaking down where CPI inflation really comes from, the answer is more complicated.
In fact, the biggest component is what the Bureau of Labor Statistics calls “services less energy services.” Think big-ticket items such as shelter but also more obscure ones such as lawn care companies, veterinarian bills and car rentals. Together, that group amounts to 57% of CPI and has risen 5.2% over the past 12 months.
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Free market? Bah, Biden says we need export controls so we can’t sell our oil or gas abroad and the captive local market might get lower prices.
Top Biden administration officials are weighing limits on exports of fuel as the White House struggles to contain gasoline prices that have topped $5 per gallon.
Discussions around capping gasoline and diesel exports have picked up in recent days, as President Joe Biden intensified his criticism of soaring oil company profits, said
There is no apparent explicit presidential authority to ban oil products exports, but the president could tap vast emergency powers
Never stopped him before.
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At least this one could have some effect. At least if domestic supply can fulfill domestic demand, so we can withdraw from the global market. I don’t know if we are at that point right now or not.
Isn’t the notion of exporting oil kind of a farce anyways? Isn’t it all sold on the global market, with export volume mostly dependant on who happens to end up buying which barrel? Doesn’t this lead to nearly as much oil being imported as is exported?
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