Posted on 07/31/2008 7:57:46 AM PDT by edcoil
I wish I could do that in my business, just the 11 biliion part.
OTOH, better make that just a million lest I be accused of gouging and corporate greed from some of our fellow freeper posters ;^)
Gouging is exactly the appropriate word for the example I gave and what’s been happening every time these record profits have occured under the circumstances I described. Your knowledge has blinded you to the real world.
If you’d get the pancake off your head, you might hear better!
Free markets work every time they're tried. Do they seem fair sometimes, no. But if you examine them logically without emotion, you will see that they work for everyone.
The price of oil is set in a market controlled by supply and demand.
There has been an increase in WORLD WIDE demand. That mean more people in places like China and India are working in factories to make crap that is sold in Walmart and earning a living for the first time and wanting the car and refrigerator and TV that you have had for all these years. Those things use power. Power requires fuel. Oil is still the most common source of power, so more people are using more oil. Got it so far?
Supply is the oil companies. They are GLOBAL companies that drill around the world. LARGE amounts of oil are located in areas controlled by the USA, but Democrats and environmentalists will not let the oil companies drill there. Thus, there is RESTRICTED supply. Still with me?
Speculators control the price of oil. There are companies, like airlines and freight companies, that need to know what the price of oil will be, say, six months from now. Speculators guess, based on projected supply and demand, what the price will be in the future. Stay focused, here comes the tricky part.
Events happen that cause the speculators to change their guesses. Prices will go up if their are signs that demand is going up (like China holding the Olympics), or if their are signs that supply is going down (like a hurricane taking out some offshore drilling rigs). Prices will go down if their are signs that demand is going down (like American's conserving) or that supply will go up (like the President pushing for offshore drilling).
Understand - THE OIL COMPANIES DO NOT DIRECTLY SET THE PRICE OF OIL!
They are having “record profits” because they are selling A LOT of oil world wide (remember that demand is up). They have a low (compared to many other companies) NET profit. If they were showing record NET PROFIT PERCENTAGES then you would be justified in accusing them of gouging.
Here's an exercise for you:
As a business owner, would you rather sell 10 widgets for $50 each and make $40 (80% profit) per widget or would you rather sell 100 widgets for $14 a widget and make $4 (28.6%) per widget? Which would make for happier customers?
When I was in sales we sold widgets at $1 loss each. My boss said we would make it up on volume.
lol...I've heard every excuse in the book for rising prices of fuel. Some you wouldn't believe.
Don’t you have one with pictures?
When you get some life experience, you'll see how the real world works.
Didn't go, poisons the mind.
Have you ever heard of limit on number of items?
Sure have. So has the seller....thats why he'll charge $10.00. Thats the real world, get used to it
ping
Exxon Posts Record $32.36 Billion TAX Payment
istockanalyst.com | July 31, 2008 | Mark J. Perry
Posted on 07/31/2008 11:23:58 PM PDT by bugseye
http://www.freerepublic.com/focus/f-news/2054731/posts
[snip] Although the way CNN reported it is “Exxon posts record $11.68 billion profit.” [end]
and...Microsoft I believe was over 27% in 2007.
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