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  • Don't Tax Oil Companies - Nationalize Them! 14 comments
    May 19, 2011 9:50 PM

    Here's Phil's plan for lowering oil prices.  What do you think - agree, disagree, agree there's a problem, have a better solution?  - Ilene 


    Don't Tax Oil Companies - Nationalize Them!

    Courtesy of Phil of Phil's Stock World

    I would like to report a crime

    Yesterday, $112M was stolen from US consumers.  It will happen again today and probably tomorrow and that is on top of the $800 Million PER DAY that is being overcharged by oil companies in America alone, ACCORDING TO EXXON'S CEO.  

    That's right, Rex Tillerson himself just testified to Congressthat "based purely on supply and demand- should be in the $60 to $70 a barrel range." The reason it’s above $100 a barrel, Tillerson explained, is due to the oil majors using futures contracts to lock in current high prices, and speculation that is engineered by the high-frequency trading of quantitative hedge funds.

    Other disclosures were made in last week's testimony that may interest you:  

    • The average cost of producing 1 barrel of oil was $11 (THAT IS ELEVEN, NOT A TYPO!); the average price of the oil in the marketplace–$92– some 8.5 times the cost of getting the oil out of the ground.
    • The profits for the big 6 oil companies was $36 billion in the year’s first quarter. A large part of the $36 billion was used to buyback shares or pay dividends to shareholders.
    • The deduction for intangible drilling expenses was given to the oil industry in 1960 when a barrel was worth about $15-17. So, why do they need this favor when oil is $100 a barrel?  

    Clearly there is no shortage of oil, the US has 1.75Bn barrels of oil in storage, enough to offset 186 days of imports (9.4Mbd) and 60% of those imports come from Canada and Mexico, not OPEC so our 1,750 MILLION barrels of storage would offset over 500 days worth of imports from the Middle East and Africa - even if it was TOTALLY cut off.  

    Florida GOP Lawmakers Live For Big Oil ImageNonetheless, oil shot up from $95 on Tuesday to $101 this morning, costing US consumers an additional $112M per day but that's an UNDERSTATEMENT - when we buy gasoline at $4, we are paying $168 for a 42-gallon barrel and, of course, rising oil prices also impact our home energy bills and even our food. The cost, in fact is more like $250M PER DAY per $5 increase in oil - and that is just for the US.  Globally we're over $1 Billion per day that is removed from consumer's pockets for each $5 over that $60-70 range that the CEO of Exxon says (under oath) is the correct price of oil.

    Fortunately for Mr. Tillerson, I wasn't a US Senator because I might have said "Gee Rex, you own the reserves, you build the wells, you own the refineries and you own the gas stations - it's nice to blame HFT Bots and Hedge Funds but have you looked in the gold-plated mirror of your 1,500 square foot bathroom lately?"  There used to be such a concept, under Capitalism, of an excess profits tax as well as awindfall profits tax - Big Oil's situation is a little of both but it's also something far more sinister - it's market manipulation!  

    Oil jumped yesterday, as it often does, on a draw-down in oil inventories which Criminal Narrators Boosting Crude play off as an indication that demand is picking up.  This could not be further from truth! What CNBC, the WSJ or any kind of real journalist COULD do, in roughly 30 seconds, is LOOK at the ACTUAL EIA Report.  Doing that, they would see that the net drawdown of 100,000 barrels (yes, really, 100,000 barrels is what's now causing us to pay another $112M a day, which happens to be enough money to buy another 1.1M barrels PER DAY - are you not outraged by this?) was caused by Net Imports of crude dropping from 10.62Mbd last year to 9.42Mbd this year.  

    Perhaps it would take more than 30 seconds to have teams from MIT and Harvard pour over this data but, if they did, they would eventually discover that the reason our inventories are down 100,000 barrels in a week is not because demand increased but because they are shipping us 1.2 Million barrels per day LESS than last year EACH DAY or (and here's where the MIT guys really come in handy) 8.4 MILLION barrels a week less oil.

    That is (and I cannot emphasize this point enough) 8.4 Million barrels LESS oil PER WEEK (11.3%) being imported than this time last year, WHEN OIL WAS $67.15.  $67.15 is, of course, right in Mr. Tillerson's sweet spot, the other $34 a barrel IS YOU BEING RIPPED OFF.  When I say you - I mean you, me and every other US and Global citizen who consume 88 Million barrels of oil per day.  That is an overcharge of $3Bn PER DAY or over $1Tn per year - JUST FOR THE OIL. Add in refining costs, home energy costs, food costs and other items and we are talking about a $2.5Tn global rip-off (See "Goldman's Global Oil Scam Passes the 50 Madoff Mark!,Fake-Out Thursday - Oil Scam Continues Unabated," and "The scam behind the rise in oil, food prices.")  

    While the top 10% may not care much whether a gallon of gasoline is $2 or $4 or whether our home electric bill is $300 or $500 or whether a bag of groceries is $100 or $200 - those of us in the business of selling something to consumers other than oil should be outraged!  Those are OUR customers that are being robbed!  That is $2.5Tn of precious discretionary spending money that they could be giving to US instead of burning it up in our customers' gas tanks. 

    What we need to do is organize EVERY OTHER business into a lobby to put a stop to this outrage. We are being impacted by this every day - not just in what we pay for oil-related products in our business and personal lives, but the energy sector is sucking $2.5 TRILLION dollars out of our customer's pockets every year.

    That would be as much money as ALL US Corporations reported in profits last year and, if you take out the $1Tn of profits in the energy sector and $800Bn of profits in the financial sector (their partners in crime) - that leaves only $700Bn in profits for the rest of us.  So, to be clear - that money is being stolen from every business owner in America because if they steal it from our clients at the gas station - they don't have it to spend when they walk into our stores!

    The effect on GDP is worse because that money is being removed from the bottom of the chain and being spent on a consumable item of no lasting value (we literally buy it and burn it up). Had my customer not spent $60 for a tank of gas, they might have spent $49 for my newsletter (you can subscribe here) and then I might have taken that $49 and gone out for pizza and Kim, my waitress would have had $5 more to spend tomorrow, and Mina, the owner, would have had $30 to buy some more bread, and the baker would have had $20 to buy some wheat and flower and maybe go out for some pizza himself.  OR - my customer could have burned that $45 driving back and forth to work.  What do you think is better for our economy?  

    High oil prices give us trade imbalances, they weaken the dollar by flooding the World with them as we exchange them for oil at the rate of $1.8Bn per day or $657Bn per year.  That is the ENTIRE GDP of Turkey, the 17th largest economy in the World and, keep in mind, that is just 40% of what the oil ultimately costs us as it pushes through to other items we use every day.  Now my business is global so I look at the US consuming just 1/5th of the World's total and I want to cry. $3.2 Trillion a year spent on oil alone!  That's 65 Million newsletter subscriptions!  That's right, I'm a Capitalist so I worry about how things affect me - even when they are global tragedies that are causing hundreds millions of people to live in poverty so one man can have a 1,500 square-foot bathroom (allegedly).   

    And, if you think giving $45 to the gas station puts money into the economy, you are wrong. The local gas station makes very little on each transaction (it's a volume business, that's why they sell food) and half of that money goes directly overseas to pay for our imports and the other half goes to Exxon or whatever big oil company owns your gas station or supplies it.  

    Now, if you have a business that makes gold-plated mirrors for executive bathrooms (with the cool TV screens behind the glass) - you will be thrilled or, if you are Exxon stock you will be thrilled because XOM bought $19Bn of their own stock back in 2009 (it was a rough year for all of us) and paid out $8Bn in dividends but what they didn't pay was one penny of US taxes on $310Bn in sales. 

    That's right, although XOM paid $34.7Bn in taxes in 2009, that was only paid to foreign governments who know how to collect money from Big Corporations - the United States Government is either too stupid or too corrupt to tax corporations properly so a company like Exxon can do 65% of their business in the US and make 70% of their profits in the US but pay no taxes in the US.  Oh, sorry, I forgot to mention - AND WE PAY THEM SUBSIDIES - so they can pollute our air and our water (anyone in Alaska or the Gulf may know what that means) and use our roads and our electrical grid and our police protection locally and our military protection globally ($1Tn a year for US to keep that up to protect Exxon's interests overseas) and we educate their employees and we fund their retirement, so Exxon doesn't have to and XOM gives us - NOTHING.  Sorry, not nothing, they give us a $300Bn bill for their service.  

    Although I encourage you to send this post (and "like it" in Facebook and Twitter it, and whatever) - to people to make them aware of this scam - including Congresspeople and especially those turncoat Democrats who refused to vote against oil subsidies on Tuesday - I am not saying that any change in policy is going to help. This situation is too far gone, the energy industry has it's hooks too deeply in our politicians and they have WAY too much control over our daily lives.  That means the logical thing to do, when faced with an out-of-control vital service that is gouging consumers and damaging our economy, our environment and working against our national interests - is to NATIONALIZE THEM.  

    That's right, we HAVE TO Nationalize the energy industry. Oil should no more be a profit center than water (and they are trying to privatize water, so soon you will know what a gallon of that costs too!) or air. It is necessary (some form of energy) for life in the modern World and that is why these greedy, bloated, corrupt organizations are able to hijack our economy and siphon of 50% of the planet's disposable income in order to mark up a barrel of oil (according to Exxon's own CEO) 850% and that ends up being 1,360% at the pump.  

    Clearly the current situation does not lead to oil companies developing safer, cleaner, renewable means of energy - they've had 100 years to do it and we're still using oil.  In fact, their massive profits lead them to undermine those developments when they occur and to lobby against sensible measures like conservation or pollution controls.  The oil scam is just too damned profitable and the money is too corrupting so, if the American people want to stop losing this game day in and day out - WE HAVE TO END THE GAME!  

    While the Big 6 oil companies may claim not to have a monopoly, they clearly have an oligopoly and prevention of a monopoly is the strongest argument in favor of nationalization of an industry. Clearly there is no price competition when Tillerson admits he can pull a barrel of oil out of the ground for an average of $11 but, by the time it gets to the refiner's door - it costs $101!  Sure, you have to put it in the barrel and you have to drive the barrel to the refiner (or ship it from overseas) but that's about it. To claim that "speculators" are entirelyresponsible for the $90 mark-up is obvious BS.  

    Meanwhile, back to business.  We are, of course, speculators (indirectly) in the energy market.  I called a top yesterday at $99 and, so far, so wrong, but we are just making short-term covers on our long bets because - until someone does put a stop to these criminals - the scam WILL continue.   

    Back in December, I wrote a post (available to all subscribers on Christmas Day) called "Secret Santa's Inflation Hedges for 2011" and, in that post I said:  

    Gasoline prices are once again creeping up and, if you are the average family, you buy about 1,000 gallons of gas per year ($2,500) and spend another $1,500 heating your home. That’s $4,000 a year spent on energy and it’s already up over $1,000 from last year – pretty annoying, right?

    XLE is the ETF for the energy market and it’s currently trading at $67.41. If you want to guard against another $1,000 increase in the price of fuel next year, buy 2 Jan 2012 $55/60 bull call spreads for $2.60 ($520) and offset that cost with the sale of 1 2013 $50 put for $4 ($400) for a total outlay of $120. If XLE simply maintains $60 for the year (11% lower), you make $880 (733%).

    We're only in May but XLE is already at $74, and the Jan $55/60 bull call spread is now $4.40 ($880) and the 2013 $50 put is down to $2.60 ($260) for net $620 - up 416% and up $500 on the $120 investment so far, with another $380 expected if this trade plays out. These ridiculous, out-sized returns on speculation are why the investing class does not give a crap about the suffering inflicted on the bottom 90% by higher energy prices. We don't just buy 2 contracts, we buy 200, and we make enough money to buy a yacht and put 1,000 gallons into it for a weekend cruise. That increases demand and makes the little people pay even more for fuel, and WE MAKE EVEN MORE MONEY -Muhahaha!  

    If this seems fair to you - then congratulations, you are "one of us" but, if you have no way of taking an XLE bull call spread offset by selling 2013 puts short - then you are the guy whose pockets XOM is reaching into and stealing the money from on our behalf.  Where do you think that $500 profit came from - it came right out of your wallet at the pump!  It came out of mine too and, since you are reading this, then you are either a customer or a potential customer, so I will either teach you how to play so you can profit from the oil scam or tell you what needs to be done to put a stop to this obscenity.  

    Don't worry about us, we'll make money whether oil goes up or down, but let's all worry about our country and our planet, which has been taken over by bankers and commodity pushers, who have organized against us to take every penny out they can get their hands on.  If all you do is read this and feel mildly upset - then you are just a mark - the kind who comes back to the con again and again until you have nothing left to lose. It's high time we stood up as a country and said - NO MORE!  

    Please - send this around - let's get a conversation going and make this an election-year issue.  It has to stop....

     

    Try out Phil's Stock World here > 

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Comments (14)
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  • pwatsonascc
    , contributor
    Comments (5) | Send Message
     
    Oh thats brilliant, never mind that these are multinational companies and oil is a world commodity and fungible. Lets take a look at Mexico where they nationalized oil , Pemex hows that working for them? Google Pemex and do some reading its been in a multi year decline do to government monopoly and graft. They are trying to bring in God help them Capitalist to help modernize the company. And how about all those Greek government run operations the IMF is asking them to privatize and sell. Sure lets Nationalize the oil companies.Funny I don't see the Communist Chinese nationalizing many things these days...
    19 May 2011, 10:18 PM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » How much is gas in Mexico? $2.60 a gallon. Also, all the Chinese oil companies are national as are many other global oil companies and they manage to do business in other countries quite well (in fact they are outbidding US companies for assets on a regular basis because they value long-term energy security over short-term profits).

     

    Want another example? Indonesia has little oil but lots of nat gas (like the US) and Pertamina is the government's energy company. They pay $2.48 a gallon as the profits from gas offset the price of oil for the people who live (and pay taxes to) in the country where the fuel is extracted.

     

    The US is the World's 3rd largest PRODUCER of oil, behind Saudi Arabia, where gas is 61 cents a gallon through their state-run oil company. We produce 9Mbd, Russia 10Mbd, Saudis 9.2Mbd and behind us is Iran at 4Mbd and the list drops rapidly and by 20 you are at Quatar with 1.2Mbd. We have the most natural gas in the World and we also have the most coal but we are unable to come up with a viable energy policy for less than 5% of the World's population???

     

    It's corporate greed, not government incompetence that causes this - think about that next time someone hand delivers you a letter for 45 cents or you take an entire bath in 10 cents worth of clean, fresh water.
    20 May 2011, 05:24 AM Reply Like
  • Rookie IRA Investor
    , contributor
    Comments (2585) | Send Message
     
    Since Obama wants to end our dependence on foreign oil and we have lots of gas, why are we not moving full speed ahead to power our vehicles with Liquefied Natural Gas, propane etc.?

     

    I have seen lots of vehicles in Haiti and the Dominican Republic running on propane and the conversion is very cheap, the propane tank goes in the trunk of the car, and you can switch back and forth between gasoline and propane by flicking a switch. It is cheaper and cleaner than gasoline and you get much better mileage.

     

    The US seems to be approaching perilously close to being a failed state, not because the people are ungovernable but because the legislature is either completely inept or completely corrupt. This story about gridlock between the parties does not wash, because the two parties are like peas in a pod.
    20 May 2011, 07:08 AM Reply Like
  • davidshelton
    , contributor
    Comments (310) | Send Message
     
    @Philip Davis : My hat off to you for saying what needed to be said. The internet is a wonderful thing for increasing awareness despite it´s flaws. Let´s make it so!!
    20 May 2011, 09:33 AM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    What's next? Nationalizing banks? Auto companies? What else? Following your advice, GULAG is not that far away. Because after nationalizing companies, you need to nationalize labor force.
    20 May 2011, 10:45 AM Reply Like
  • Henry Buttal
    , contributor
    Comments (407) | Send Message
     
    I assume this is a Swiftian tirade designed to engender a reaction. Or that somebody was on the wrong side of an oil trade recently...or drives a SUV.

     

    The Chavezing of the U.S. energy sector is not the way to go. That theft would be from citizens who own shares or work for oil companies. Do you advocate the elimination of pari passu, ala the political carve up of GM? It is ludicrous to think your proposal would result in less political corruption and apportioning.

     

    The profits XOM make don't evaporate - XOM is not Apple, they pay dividends to shareholders. Who in turn (largely) pay taxes to the U.S. You also inaccurately state that XOM "pay no taxes in the U.S." .

     

    In short, an interesting tirade, but not an interesting article.
    20 May 2011, 12:54 PM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » So Henry (and yes, meant to provoke conversation but yes, we were happily short at $99, which I mentioned in the post and the drop to $96 was just peachy) - If the Mafia were to issue stock would the drugs, murder, racketeering and extortion be good for you because they have shareholder who pay taxes?

     

    Looking out for top 10% shareholders while bleeding money from the bottom 90% is not a business model that is good for society. I know that's not a popular opinion here as, obviously, people reading this are investors and likely in the top 10% and so are my own clients but I'm willing to bite the hand that feeds me once in a while because I am that kind of dog.

     

    If profits are paid as dividends (as opposed to hidden) and the dividends go out at a 15% tax rate then the people who can afford to own XOM not only charge double the fair price for gas to the bottom 90% but then they also pay 1/2 the tax rate on their income - and this is all good with you?

     

    I think it's a broken system and there's no way it's going to change through minor reform. You mention Chavez, which I didn't as I know how much Americans blindly hate Chavez but his people don't hate him when they pay 9 cents a gallon for gas.

     

    Nationalizing the labor force/Alex - I'm sure the people who work there wouldn't mind. Don't you guys always complain how great those government benefits are?

     

    I am in favor of nationalizing or regulating public necessities and that includes food, energy, college education and health care. Things people require to live should not be sold at maximum profits. Investors are free to invest in companies that sell plastic shoe for 300% mark-ups and smart-phones with $1,200 a year connection plans - those are optional items. What we have now is the industries I mention all vying to see who can force the consumers to pay the most and they will keep picking at that carcass until there is nothing left.
    20 May 2011, 03:02 PM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    > am in favor of nationalizing or regulating public necessities and that > includes food, energy, college education and health care.

     

    Impossible without GULAG. Proven in all communist countries. In many cases, GULAG was created even without providing necessities (China) or as a machine for extermination of people (Cambodia), which kinda makes sense, from communist point of view: less people to feed...
    20 May 2011, 03:10 PM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » As you may not be aware, we already have several "nationalized" companies right here in the US:

     

    Tennessee Valley Authority (TVA)
    National Railroad Passenger Corporation (Amtrak)
    Consolidated Rail Corporation (Conrail)
    Resolution Trust Corporation
    Transportation Security Administration
    US Postal Service

     

    You can argue about efficiency or whatever but they mainly get the job done and, last I heard, no gulags and Capitalism has not been destroyed by their existence. If you can deliver mail faster - go for it. If you can run a better railroad - no problem.

     

    If you were in California around 1999 then you saw firsthand what happens when Capitalists (Enron) get hold of a public utility system.
    20 May 2011, 03:27 PM Reply Like
  • Rookie IRA Investor
    , contributor
    Comments (2585) | Send Message
     
    Right on! And to that you might add the VA health system. If private insurance companies can really do such a superior job of financing and delivering health care, why are they not agitating to take over the VA too?

     

    I recently retired from state employment, which had a lower salary than private employers but excellent benefits.Primarily I had two pensions, one from the state pension system and one from a commercial company, which I funded myself.

     

    Since retiring I have found dealing with the folks at the state pension fund to be nothing but a pleasure. You don't have to call them back, because they will call you. Ask them a question and if they don't know the answer, they will find out and get back to you.

     

    On the other hand, dealing with the commercial company it is all deception, lies, bullshit, sneakiness, and evasiveness. Maybe my state is an exception, but I doubt it.

     

    Incidentally, I have heard of people refusing to fill their gas tank with BP on ethical grounds, but I have never heard anyone complaining about Citgo.
    20 May 2011, 03:48 PM Reply Like
  • Henry Buttal
    , contributor
    Comments (407) | Send Message
     
    Amtrak
    - ongoing losses that are repeatedly recapitalized by the American tax payer. If you're argument for XOM is that you need to redistribute the economic benefits to a more diverse population, then Amtrak REALLY IS your poster child. U.S. tax payers outside the NorthEast corridor subsidize the ridership there.
    Conrail
    - lets see, overbearing government regulation bankrupts numerous railroads in the 70s. Government takes over railroads, stranding many debt holders. Regulatory regime changes under Reagan, railroads are freed to operate, government then can spin out assets they bankrupted to new, politically favored owners. Ahh, now I understand what government efficiency is...

     

    US Postal Service
    - vastly improved in recent years, but still has not consistently been operationally positive. The big negative is the willingness to spend your tax dollars to provide loss leaders to compete with private sector companies like UPS and FedEx.

     

    Enron
    - California legislature passes bill urging utilities to deal with stranded asset costs and dirty and/or low performing generating plants as part of the "opening up" of retail electrical in CA. However, they also retain a cap (!) on wholesale electrical prices! This is what Sacramento considers deregulation. California utilities get rid of older, dirty, high cost/maintenance plant that provided reserve capacity, and sell other plants at high prices, and essentially lose control of the high margin rolling reserve. When you combine this with a cap on Wholesale prices, you get the 1999 problems (this doesn't excuse Enron, but they didn't start the problem, the legislature, coupled with NIMBY did. And Enron was a generator and a wholesaler broker, not a public utility).

     

    An added bonus - the famed Raptor funds of Enron were partially funded by CALPERS! Yes, folks, Californians screwing Californians!
    20 May 2011, 04:24 PM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    Nationalized companies which compete on the market is one thing. Again, I'm not talking about efficiency (killing Amtrak would be and act of mercy IMHO). But if you nationalize the whole industry, it's another picture altogether. Sooner rather than later that industry becomes black hole consuming all allocated resources (British coal industry in 1960s-1980s is a great example). And industry and those working in industry would demand destruction of everything which has a chance of competing with it: some Amtrak supporters are calling for sharp reduction of domestic air travel. Full nationalization of agriculture was successfully done in most communist countries with the same results: famine, deficit of food and GULAG. Everywhere it was attempted.
    Most of US government companies you listed do not produce anything (Amtrak and US Post are exceptions) and none of them is a nationalized industry. Let's keep it this way, bureaucracies have the habit of uncontrolled growth.
    Funny you mentioned Enron. People living in California are paying about 80% more for electricity now than they did when Enron robbed them. Looks like government is much more efficient in one area: robbing own citizens. Nobody can compete here. Besides, some Enron crooks got jail time, I wonder if anybody is even talking of jailing CA officials? If not, why?
    20 May 2011, 05:44 PM Reply Like
  • Philip Davis
    , contributor
    Comments (1336) | Send Message
     
    Author’s reply » Come on Alex, do the math - oil was $20 a barrel in 1999 and now it's $100 and you say people in California are ONLY paying 80% more for electricity now. I wish I were only paying 80% more!

     

    The same goes for Amtrack, the Post Office etc. - they are not trying to make money and the fact that they error on the side of not overcharging the consumers may make them end up taking losses but those losses are part of a public service that benefits all citizens (even if you don't take a train, people who do save us from importing more oil, ease road congestion, etc.) so it's no big deal if we, the taxpaying citizens, have to kick some back in to balance the books.

     

    This process has been villainized/stigmatized by Conservatives and private enterprise who want nothing more than to see any Government endeavor fail so they can "privatize" it (ie. make profits from it).

     

    The Post Office, for example, lost about $2Bn on $65Bn in revenues last year delivering 177Bn pieces of mail. They lost $8.5Bn this year which means they can raise stamp prices 5 cents to cover the deficit but Congress (the Republican one, pre-election) screwed them over completely in 2006 by passing two laws that crippled them:

     

    One rule only allows them to raise rates along with the CPI, which we all know is BS and they have to have it approved by Congress who, obviously, haven't done it so the broadcasters on Fox News can tell you how inefficient the post office is (surely Alex, you understand how Government can use the media to manipulate public opinion).

     

    www.usatoday.com/money...

     

    Even worse than not allowing the post office to collect a fair rate for their service, is another burden placed on them by 2006 Congress, which obligates the Postal Service to make annual payments of $5.5 billion to pre-fund future retiree health benefits. No other institution in America, public or private, has to do this; moreover, the plan is already highly funded. Without this unnecessary burden, the Postal Service would be profitable most years, and in fact would have netted a $4.6 billion profit from 2006 to 2009.

     

    In fact, there was a study this year showing that the postal system has now OVER-funded (forcibly) their retirement system by $75Bn AND Congress overcharged the Postal Service $27Bn for CSRS military service credits, money the current Congress refuses to return because it would net the Post Office a one-time PROFIT of about $20Bn but which Congress does use as a reason to say there is no need to raise their fees.

     

    www.uspsoig.gov/foia_f...

     

    Maybe you are right Alex, Nationalization won't work until we have a gulag - for politicians.
    21 May 2011, 05:26 AM Reply Like
  • Alex Filonov
    , contributor
    Comments (1412) | Send Message
     
    GULAG actually started for politicians. After that it's service is easily expanded for general population. It's not a fantasy, it's history.

     

    I don't understand what price of oil has to do with price of electricity. Here in US electricity is produced mostly from coal, nuclear energy and natural gas. Prices for coal are up, but not 80%, same for natgas. Cost of nuclear generation is actually down compared to 1999. BTW, it's illegal to build new nuclear power plants in CA and almost illegal to build coal plants. I think this is the major part of energy price increase.
    Post Office is interesting case, don't want to discuss it here, because it's going to be very long discussion. In short, mail services were run by governments since Medieval times because only government could establish reliable and relatively safe service. Not a case anymore, some people call for privatization here, I'm not so sure.
    Amtrak is an ugly political child. Should not exist. If rail can't compete for passenger service (and it can't in US), then it shouldn't provide it. I really don't see where rail can be rationally used in US, with exception of DC-NY-Boston corridor. I know that people living there think that the whole country lives the same way. Trust me, they are wrong. In Minnesota life is quite different, and Midwest is much more similar to Minnesota than to NY.
    21 May 2011, 05:30 PM Reply Like
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