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.
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.
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.
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.
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.
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.
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.
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
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?
Most of the import export is related to refining needs. We have refineries that are optimized for certain fuel inputs and making certain fuel outputs, but since we hate refining and environmental regulations have prevented most new ones for decades, most of the refining capacity is in other countries with lower standards. So we ship our raw fuels over to them, and then ship refined products back. We don’t have the internal capacity to refine all the fuels we need within the US.
So this export ban would just piss off our trading partners, who would turn to Putin to get their supplies needed for refining.
Another brilliant 2D chess move by Bidens advisers. “Who knows if it will work,probly not, but it sounds good in a 10 sec clip”
And I can vouch for the accuracy of each of those.
Lawn care (not mowing, just weed/fert/plug/lime/grub) has almost doubled in the last 18 months.
With the Covid pet surge, a lot of veterinarians, instead of closing to new patients, just increased their rates until enough people stopped using them. Additionally, consolidation of veterinary practices/hospitals is continuing at a decent pace.
As for car rentals, by shopping around, my pre-covid “all in” rate for a full size car was $22/day or less. Now, I can’t get close to that rate for any size vehicle.
The PA average for diesel is now $6.19 per gallon, up about 75% from a year ago , the report notes. It is a “huge, huge expense” for farmers, Kotzmoyer told state legislators.
One farmer who works on about 3,500 acres burns through about 2,000 gallons of diesel per month, he said.
I guess there is going to be lots more farmland available for Bill Gates to buy.
I’ve recently seen lots of comments about inflation reducing demand. How does that
work with food? Are we going to be a less obese country?
I don’t hold the corn farmers responsible for this, in any way, shape or form.
ETA: not to imply that’s what you’re doing.
ETA2:
I’ve learned from personal experience (and heard from professionals), that weight/gain loss is a factor of intake, MUCH more than exercise/expenditure.
The article isnt relevant to this topic, except for one throw-away paragraph:
American’s move to pare back regional connectivity comes just days after all three of the airline’s wholly-owned regional subsidiaries (Piedmont, Envoy and PSA Airlines) announced massive pay increases for pilots, with hourly rates now starting at $90 for new-hire first officers and climbing to $146 for first-year captains.
$146/hr to start, based on a 40-hour week (which may or may not fairly represent a pilot’s schedule) equates to over $300,000 per year. And that’s just for these regional carriers.
I know commercial pilot is a relatively exclusive job, but can there be any doubt that wages is a significant driver of the inflation we’re seeing? The only way interest rate increases are going to help curb this portion of inflation is by causing people to get laid off from their newly high-paying jobs.
