That's brilliant.
Posted on 09/29/2005 11:36:23 AM PDT by JZelle
Wrong. Housing appreciation is only a reflection of market demand -- i.e. more people equals more willing buyers. Go to an area that is losing population or has a stagnant population, and home prices do not appreciate in real dollars, and sometimes do not even keep up with inflation, no matter how much you take care of that home. Go to a high growth area, and a falling down shack that has never been maintained grows in value just as fast as a well cared for house.
The amazing thing to me is that gas prices, when measured for inflation, are about the same as they were 50 years ago while we have more than twice as many cars on the road and those cars are on average logging nearly twices as many miles driven per year as the average car did 50 years ago. It's the oil industry, not some assclown politician or consumer advocate that have invested billions to explore, transport, refine and deliver that fuel that has allowed prices to remain so low in real terms.
They all buy from the same suppliers.
Under current law and regulations, it would be much easier to build a new nuclear plant in the US than it would be to build a new refinery. In fact, the US Government has offered incentives for the power industry to build new nuclear plants. There is no such offer on the table for new refineries.
I'm sure the oil companies would love to build new refineries if for no other reason than to utilize new technology to lower their marginal costs per barrel of product. But no one in the industry is stupid enough to play "bet your corporation" on projects that under existing rules would never get past endless court cases. If you think $10 billion would build a refinery (probably less than $2 B would do it) then double or tripple that cost for the effect of endless construction delays and compounding interest charges resulting from those delays which can be instigated by one single "concerned citizen" and one idiot Federal judge.
The oil industry saw what the idiotic legal/regulatory system did to the nuclear industry back in the 70s and 80s, and they aren't going to make the same mistake. They will build refineries, but they won't be in the US unless something changes.
In the area where I am from, the homes ARE taken care of and APPRECIATE in value. 10 years ago, these homes were new and cost $150,000 to $275,000. Now you cannot buy in here for under $350,000 because we all take pride in our homes. Not everybody lives in a stagnantly populated area just as not everyone lives in a well kept area. If I had bought my home in a sewer like some of New Orleans, I would not expect it to appreciate in value. You missed my point completely.
In high demand areas like Southern California and South Florida, people are paying over a million dollars for homes that in my stagnant growth area wouldn't even get $50,000 or might even be condemned as hazards. People will pay a million for those shacks in rapidly growing areas and bulldoze them so they can spend another million building another house. The demand is in those areas and that demand determines price. While that might be cool for people who have owned a house for 20 years, it's poison for people first starting out who can't even afford a starter shack.
As for gasoline, the demand is up globally --- way up! If not for some damn good engineering and technology and a massive investment driven by competition in the oil industry, we would be paying a hell of a lot more for gas than we are now.
Let's just agree to disagree ok? Have a great day.
Well, if you're right about a refinery costing about $2 billion, then Exxon could use the other $8 billion it made last quarter lobbying Congress for environmental law reform.
Exxon would still have the other 9 months of the year to show as profit.
$8 billion would definitely buy some votes...
Heck, they could use the $8 billion to raise a small army and take over one of the islands in the Caribbean (Haiti?) for the refinery, if they wanted to.
Wow. K-street would just love that. But that means that the billions Exxon has to spend in capital investment for plant & equipment just to keep the current platforms, wells, refineries, pipelines, computer systems etc going won't be there. That stuff can just grind to a halt. What the hell. There won't be any dividends. There won't be any R&D money. Nothing for new exploration. There won't even be any charity money or ExxonMobile Theater on TV. It will just all go to making K-Street even richer than the parasites already are and inspire the professional extortionists to hold out for even more!
Great idea. You are really good at spending other people's money. You must be a Democrat.
How's this for an idea. We just do like Mexico or Venezuela or Cuba and just take the company away from those greedy bastards and let Congress run it! That way, congress can build a refinery with your money, and maybe in your front lawn, anytime they feel like it. And Congress will even promise you cheep gas, but take the money out of your other pocket with taxes. You won't have to worry about them making to much money either. They will gurantee you they will lose money every quarter -- just like Amtrack.
BTW. Did you catch the news from Indonesia today? State owned oil industry (no greedy capitalists for those good socialists) --- doubled the price of gasoline today to guess what? $1.80 gal. Guess what the reaction was? Riots in the streets.
Please detail these "subsidies" for me. Be very specific.
Where do they get the money for that investment for the next quarter?
My area too! 2 weeks ago it was 2.59 everywhere except for the usual gougers, today it's 2.79 almost everywhere. Think something is up here?
From the revenues earned during that quarter?
Or else from money set aside from the previous quarter, money that as being earmarked for future use, couldn't be labeled 'profit'.
What do you call it then?
Expenses.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.