Posted on 11/13/2008 8:13:52 AM PST by Graybeard58
In July, when heating oil was approaching $5 a gallon and the so-called experts were saying crude was headed to $200 and beyond, millions of homeowners were flipping coins. Heads, they'd commit to pay $4.50 to $4.75 a gallon for heating oil this winter; tails, they'd gamble it wouldn't going to $6 as predicted.
In Connecticut, heads came up about 200,000 times. And as soon as those homeowners signed contracts with their suppliers, crude prices crashed 60 percent in less than four months.
Today, heating oil can be had for as little as $2.40, c.o.d. As awful as those contracts are, they were signed by willing sellers and willing buyers. Legally binding contracts are fundamental if we are to have faith in our economy and the rule of law.
Heating-oil contracts have an excellent track record. In the last 20 years, for example, customers of Wesson Oil of Waterbury who signed oil contracts saved money in every year but two, including one in which they broke even. Last winter, when the average retail price was $3.31, those who reserved 700 gallons saved about $500.
The Independent Connecticut Petroleum Association and eight other energy associations want Treasury Secretary Henry Paulson to redirect some of the $700 billion allocated to ease the credit crisis to allow them and their customers to get out of their contracts.
Their hearts may be in the right place, but the feds already have bailed out the lending, financial and insurance industries.
Congress is poised to spend billions more to rescue borrowers who through stupidity or duplicity got mortgages they couldn't afford.
The auto industry got $25 billion and this week was back in Washington for $25 billion more. Spendthrift states are asking for upward of $30 billion.
The list goes on. The retail, construction, electronics and tourism industries are reeling. The service sector is shedding jobs left and right. Should the feds bail them out, too? Where are they getting the money? Between deficits, long-term debt and unfunded entitlement liabilities, they (present and future taxpayers) are in hock for nearly $100 trillion.
Comparatively speaking, no person or company is in worse financial shape than the government, yet pain-averse Americans continue to go to the government for handouts or bailouts to indemnify their mistakes.
We don't doubt that heating-oil retailers and customers would love to get out of their costly contracts. But what about investors who bought stock in AIG this year for $62 a share, people who three years ago purchased flat-screen TVs for twice what they're selling for today, and millions of Americans who suffer buyer's remorse every day?
Where does it end?
Ping to a Republican-American Editorial.
If you want on or off this list, let me know.
I was waiting for this.
How many of these people voted for Obama? We have four times the Saudis oil reserves in the lower 48 in shale oil, coal diesel and ND oil. Democrats have blocked any access because most of it is on federal land. Let these people in CT eat cake.
Am I the only person NOT currently in a bailout line?
I would like to form a new Tax Payer Union (TPU for short) and we need a bailout
I gambled poorly and paid a ridiculous amount for propane in August because in the fall it turns down hard.
Now I regret that decision, but I can’t see into the future.
Wonder when I’ll get my check for my oil!
I am not in line either. I think that makes a total of 2 of us in PA.
Better get in line now, that way when they come up with something you qualify for, you are already in line.
Get in one of the existing lines. After all, the government demanded this money under one pretense and changed after the ink was dry.
In the future, salaries will be called “worker contributions” and your net pay will be called “change”
Me too....but fortunately it was only to fill my barbecue's tank.
If you assume the price was manipulated, then it may be grounds to give some relief.
Count me as three.
Don’t forget to hurry up and wait in that big, long line.
I am buying premium gasoline now, but before the depressed prices I was buying regular.
These bailouts are a no win situation. Heads we bailout the customers, tails we bailout the supplier.
My heating oil company let me switch contracts for the same $250.00 they would have charged me to sign up for the price cap plan to begin with. They understand, heck they own homes, too.
I have a quote for 3800 for a Quadrafire pellet stove fireplace insert that I am interested in getting, however, they are now backordered until January and the pellets are getting harder to find.
He said they shpuld say we are cutting employees unless we get a billion from Paulsen. Then he said Intel isn't a growth company anymore anyway.
When pressed what is now he said whiskey.
Then said nothing since the bailout.
How many of these people voted for Obama? We have four times the Saudis oil reserves in the lower 48 in shale oil, coal diesel and ND oil. Democrats have blocked any access because most of it is on federal land. Let these people in CT eat cake.
::::::::::::
The treason of the radical far left comes home. Yes, let these dolts eat it -— and maybe a freezing winter might sober up their American history and patriotism.
What the hell? And, Congress thinks they can appease us middle class by giving us a measly $600-$1200 incentive check?
Great way to destroy an entire economy...start rewriting contract law.
This is completely immoral.
My son locked in his propane in July for $2.65 for a year.
I’m not sure what it is today. I was ticked because they forgot to send me a lock-in contract this summer, but I may come out ahead now without it. I paid $1.99 last spring and still have a half tank.
“Where does it end?”
Wonder if we can get a bailout for not selling this year’s corn crop on the futures market last summer when it was going for $7 instead of the $3.40 they are offering now?
Shoot! What about the $200/b oil futures we got?
Current west coast price per gallon for propane is $0.94; retail nationwide average is $2.50 gallon.
Shouldn't that be HOPE? %^)
And they will concentrate their effort to keep America dependent for Obama's new friends. Wake up America. Lets hope Palin drills the heck out of Alaska. We will need some source when the foreign takeover of our oil economy happens. Watch in about 6 months gasoline will be 7 buck a gallon.
“and the pellets are getting harder to find.”
You can also use shelled corn in them as long as the moisture content is low enough.
“I have a quote for 3800 for a Quadrafire pellet stove fireplace insert that I am interested in getting, however, they are now backordered until January and the pellets are getting harder to find.”
Make sure it is dual fuel (burns corn too). The bottom is dropping out of the corn market.
“I am not in line either. I think that makes a total of 2 of us in PA.”
Why are you on Free Republic? Get to work! You and the other guy have to increase your productivity to pay for the million PA folks standard of living.
We’ll be watching you.
Logged by the Change Team Taxpayer Slacker Squad (A division of ACORN)
There isn’t an oil shortage, not today, not 6 months ago, or a year ago.
Did you screw up?
Please call 1-800-GOV-BAILOUT
"Welcome to the Department of Mulligans (formerly known as the US Treasury). All our assistants are currently busy helping other customers. Please press "1" if your estimated bailout request is more than $1 billion but below $500 billion ....."2" if your request is greater than $500 billion.......if your estimated bailout cost is less than 6 figures please remain on the line and an operator will assist you shortly."
I demand a pants bailout immediately. I demand reparations for the poor quality pants that were sold to me in the past.
>> Am I the only person NOT currently in a bailout line?
COL, I’m too busy digging a hole.
Do I have to get in a line ? Can’t I just get things delivered to the house?
I’m a native Floridian, and even though as a child we used a fuel oil heater, ever since I’ve been an adult, we’ve used reverse cycle AC. So I have no idea how an oil contract works for an individual homeowner. When are these contracts negotiated, and are they negotiated just for price, or for a minimum of oil that will be purchased? Why are they used...do you risk not getting oil if you don’t sign a contract? When I was a child and we used fuel oil, we just called the supplier when the tank got empty. Anybody care to explain to a Floridian how these contracts work?
You are in the bailout line.
Well, actually, you are standing on the other side of the table from the bailout line, handing your money to these people.
They went to the casino and lost.
Don’t expect me to provide for them!
“If you assume the price was manipulated, then it may be grounds to give some relief.”
The legitamate price for any item is whatever the traffic will bear!
No one but a fool runs a business out of charity or feelings.
Pay whatever the asking price or do without.
What happens is, that when you sign a contract early on in the season, the heating fuel provider then adds up the amount of contracts and expected fuel oil quantity, and buys a futures contract for that amount.
Thus, they lock in a price and are guaranteed delivery at that price, no matter how the fuel oil prices might change during the season. If you don't sign a contract, you have to pay whatever the going rate is on the day that the truck comes around and adds oil to your tank.
Now what has happened here is that unlike other seasons where the oil price went up during the winter, and the person who signs a contract saves money, the person who signed a contract with the heating oil provider will now be paying $4 a gallon while others pay $2.50 a gallon. Therefore they are crying to the govt because each person might be out $500-$1500 depending on house size over the course of the winter.
I hope I have explained this adequately.
Where does it stop, actual we know it started with paulson saving his retirement, where it stops no one knows.
Congress will bailout both, a win win situation.
DrudgeReport headline: Bailout Lacks Oversight Despite Billions Pledged
Congress has yet to the fill Oversight Committee, but why should they worry it's their money to spend. (/s)
Or we can bailout nothing
Thanks for the explanation.
I don’t see why they want a bailout though. Lots of contracts we make for long term service end up costing us more. For instance, I may sign a contract with my cell phone company for 2 years, and in the meantime, they come out with a better deal. Too bad, so sad, I have to stick with what I contracted for until my 2 years are up.
I am one of those who “locked in” in May at $4.24 / gallon. I made a decision based on the situation at the time, and would do so again given the same situation. I can’t stand hearing from the whiners who made a lock in decision in their own best interests and then complain when it goes against them ! Based on CT’s results I am one of the few people who didn’t vote for the Obamanation. I have never voted Democratic in in 40 years of voting, although this was the first time I voted against a candidate rather than for one (Sarah did, though, make it easier to vote RINO). I am concerned that with the lowering of gas prices the American Sheeple will forget about developing our own resources, while the environmental whacko lobby continues to block all efforts. And yes, Frantzie, the whiners in CT can eat cake..they’ll get what they voted for !!
you know what? screw it, if i HAVE to have these federal idiots help me, ill take my so called "bailout" too... jeez!
makes me sick!
there ought to be some way to arbitrage this. Swap it for a futures contract when prices should be higher again or some such.
Tough. Someone is always getting a better deal down the line.
There have been years when the price of fuel has gone the other way, too.
The in-laws have a propane tank to fill for heating. Many years they’ve crowed about how “cheap” they got gas (paid for ahead of time that heating season) as the prices went UP and retailers took it in the shorts in the fall.
One of the smartest things ANY of us can do is “dollar cost average” any commodities we need to buy during the year.
Milk and butter and eggs are on sale this week? Stock up! Buy gasoline at the same station on the same day each week. Last week it was $2.89, this week it’s $2.69, next week it’s $2.09. Over a month of fill-ups you’re paying $2.55/gallon.
If you’re in the habit of “dollar cost averaging” your stock purchases, you are getting AMAZING deals right now on cheap stock that will most likely go up again sometime in the future. Just get in the habit of applying that to everything you NEED to buy during a month. (I didn’t say WANT, I said NEED. :) )
It all evens out in the end for the most part.
Too bad Congress can’t figure out these simple ways to make ends meet. Dorks.
testing
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