Where are the calls for a Windfall Tax?

[Fern]

No, I don't think that fuel in the storage tank is paid for at delivery. More likely it is made in installments funded by revenue from sales. Gas delivered, signed for, $sales, $payment made.

I had a client that was in the business, for those interested this is how it worked for them:

Gas paid for by credit card goes directly to the gas supplier's account, not the gas stations.

When the gas tankers/suppliers come to fill the gas station's tanks they will record how much it took to refill the tanks. This is comunicated back to supplier home office.

Supplier H.O. calculates cost for gas to refill tanks, compares to amount of $ received vis CC payments and settles up. If CC purchases were higher, gas station gets a check. If gas station sold a lot of gas for cash, they will be billed and check sent to supplier.

And Darwin333 is right, most gas stations make very little money on the gas they sell.

Fern

 

[WackyDan]

I think it's outrageous that speculation can drive prices up so high so fast.

It's insanity, to be sure.

There hasn't been any change in ACTUAL supply of oil yet, and prices have skyrocketed.

What's worse, though, is that retail prices seem to be going up for no reason. They change daily, but I know the supply in the tanks didn't magically change in price overnight...they'd already bought it. And neighborhoods always seem to go up at about the same time for about the same amount, despite being wholly different companies. Isn't that called price fixing or price gouging? Wasn't there a massive lawsuit about that in the DRAM market 10 years go?

Yet.. Oil is bought at least one month in advance of it's actual delivery... They have to hedge. Welcome to commodity trading 101.

 

[Craig234]

During the Bush years, we had a government of pro-oil politicians. Bush and Cheney both come from oil backgrounds; Bush for generations, in the Texas oil baron world, his early businesses about oil, bailed out by Saudi 'friends' of his politically powerful family, long close relations with the Saudis - heck, the original name for the Iraq war was, in an overstep, 'Operation Iraqi Liberation'. It was very natural to look at this most profitable industry in world history and want corrections to the corruption.

Something that has changed now is that it's becoming clearer that the major culprit in the 2008 oil price spikes was not the oil industry, but Wall Street.

Their speculation markets appear to have caused the massive spike primarily.

It's not just oil that it's happened, but that's the topic here. Take a look at this 2009 column citing Matt Taibbi exposing this, 'which few had realized':

http://trueslant.com/justingardner/...-lid-off-oilgas-speculation-by-goldman-sachs/

Another issue before we get to a 'windfall tax', is the large subsidies the taxpayers are giving the oil industry even as it has record profits.

Obama wants to end those in the next budgets; Republicans voted 100% not to.

Here's a good Rachel Maddow clip on the topic:
http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/#41880026

And what did oil companies do in the face of the issue of their subsidies being raised? They increased the spending on lobbying, again Rachel Maddow:
http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/#41790410

Ed Schulz has a week-long special series on this topic of Wall Street speculation this week, here's a segment where he introdues it:
http://www.msnbc.msn.com/id/21134540/vp/41898907#41898907

 

[Zebo]

Press still has Obama's dick down their throat.

 

[Craig234]

Yet.. Oil is bought at least one month in advance of it's actual delivery... They have to hedge. Welcome to commodity trading 101.

Commodity trading 101 explains the futures market. It does NOT explain the ABUSE of the futures market that does nothing to help with its intended purpose, but instead to crush the market under massive speculation driven by Wall Street schemes, doing nothing but taking massive sums out of the economy for the Wall Street players.

 

[Darwin333]

US passes rules against no naked futures speculation and persuades England to go along with it-it's in both countries' general interest to reign this in (but Wall Streeters will absolute hate it). That's the lion's share of the world market right there. If speculators want to play on the Dubai market there's not much we can do about that.

So all the speculation money moves to markets that have an even bigger motive for higher prices?

 

[jhu]

Oil is headed to $120 faster than a caffeine-laden jackrabbit. Dems are in power, even if they don't have the House. The cause of the spike surely has nothing to do with Libya (they only supply one half of one percent of US oil). It must be the oil speculators and Exxon, that evil, evil Exxon. Yet there is ABSOLUTE SILENCE from the left on a oil-based Windfall Tax; something we heard constantly during Bush's years.

Hell, there's not even a peep about ethanol.

What gives?

Have the oil companies reported earnings yet? As I recall, the last time this happened, Exxon reported earnings first. Then oil prices dropped and everything was forgotten.

 

[Londo_Jowo]

Have the oil companies reported earnings yet?

Companies normally report earnings quarterly. 1st quarter earnings will be posted some time next month.

 

[blackangst1]

I'd much rather have a decent set of regs in the futures market to prevent this sort of wild gyrations.

Im sure you understand this is not possible, right?

 

[MovingTarget]

US passes rules against no naked futures speculation and persuades England to go along with it-it's in both countries' general interest to reign this in (but Wall Streeters will absolute hate it). That's the lion's share of the world market right there. If speculators want to play on the Dubai market there's not much we can do about that.

This. It would go farther to mitigate oil speculation and unnecessary price spikes - much more so than a windfall tax would. Besides, even with $5/gallon gas, it floated with the general public like a ton of bricks.

 

[blackangst1]

During the Bush years, we had a government of pro-oil politicians. Bush and Cheney both come from oil backgrounds; Bush for generations, in the Texas oil baron world, his early businesses about oil, bailed out by Saudi 'friends' of his politically powerful family, long close relations with the Saudis - heck, the original name for the Iraq war was, in an overstep, 'Operation Iraqi Liberation'. It was very natural to look at this most profitable industry in world history and want corrections to the corruption.

Something that has changed now is that it's becoming clearer that the major culprit in the 2008 oil price spikes was not the oil industry, but Wall Street.

Their speculation markets appear to have caused the massive spike primarily.

It's not just oil that it's happened, but that's the topic here. Take a look at this 2009 column citing Matt Taibbi exposing this, 'which few had realized':

http://trueslant.com/justingardner/...-lid-off-oilgas-speculation-by-goldman-sachs/

Another issue before we get to a 'windfall tax', is the large subsidies the taxpayers are giving the oil industry even as it has record profits.

Obama wants to end those in the next budgets; Republicans voted 100% not to.

Here's a good Rachel Maddow clip on the topic:
http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/#41880026

And what did oil companies do in the face of the issue of their subsidies being raised? They increased the spending on lobbying, again Rachel Maddow:
http://www.msnbc.msn.com/id/26315908/ns/msnbc_tv-rachel_maddow_show/#41790410

Ed Schulz has a week-long special series on this topic of Wall Street speculation this week, here's a segment where he introdues it:
http://www.msnbc.msn.com/id/21134540/vp/41898907#41898907

Commodities markets are speculative by nature, Craig. Trying to spin it into something evil is disingenuous at best. Not to mention your swipe (however unsurprising) at Bush/Cheney. I suppose next youre going to tell us they are also responsible some how in the even larger spike in gold and silver when they were in office too?

Oh, and Taibbi's poke at Goldman is LAUGHABLE. Have you seen the list of Obama's paid personnel from Goldman?

(condensed from http://www.nachumlist.com/goldmansachsobama.htm )

Lael Brainard: Brainard is the United States Under Secretary of the Treasury for International Affairs in the administration of Obama​

Gregory Craig: Former White House Counsel, Recently hired by Goldman Sachs
Thomas Donilon: Deputy National Security Adviser(despite having a career that is mostly involved with domestic politics). Donilon was a lawyer at O’Melveny and Myers and made almost $4 million representing meltdown clients including Penny Pritzker (of Chicago) and Goldman.
William C. Dudley : president and chief executive officer of the Federal Reserve Bank of New York, partner and managing director at Goldman, Sachs and was the firm’s chief U.S. economist for a decade
Douglas Elmendorf: Obama Director of the Congressional Budget Office in January 2009, replaced Furman as Director of the Hamilton Project (Note that the Hamilton Project was funded by Robert Rubin and Goldman Sachs)
Rahm Emanuel: Obama Chief of staff, on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to “introduce us to people,” in the words of one Goldman partner at the time.
Dianna Farrell: Obama Administration: Deputy Director, National Economic Council, Former Goldman Sachs Title: Financial Analyst
Stephen Friedman: Obama Administration: Chairman, President’s Foreign Intelligence Advisory Board, Former Goldman Sachs Title: Board Member (Chairman, 1990-94; Director, 2005
Michael Frohman: Robert Rubin’s Chief of Staff while Rubin served as Secretary of the Treasury and an Obama “head hunter” according to “Rubin Proteges Change Their Tune as They Join Obama’s Team” in the New York Times.
Anne Fudge: appointed Fudge to Obama budget deficit reduction committee. Fudge has been the PR craftsman for some of America’s largest corporations. She sits, according to the Washington Post, as a Trustee of the Brookings Institution within which the Hamilton Project is embedded.
Jason Furman: directed economic policy for the Obama Presidential Campaign, served as the second Director of the Hamilton Project after Peter Orszag’s departure for the Obama administration
Mark Gallogly: Sits on the Hamilton Project’s advisory council. He is also, according to Wikipedia, currently a member of Obama’s President’s Economic Recovery Advisory Board.
Timothy Geithner: Secretary of the Treasury, a former managing director of Goldman Sachs
Gary Gensler: Obama Administration: Commissioner, Commodity Futures Trading Commission, Former Goldman Sachs Title: Partner and Co-head of Finance
Michael Greenstone: the 4th Director of the Hamilton Project. Just as attorney Craig went from advising Obama to defending Goldman Sachs against the SEC complaint, Greenstone has used the revolving door to go from went an economic adviser position to Obama to one of the Goldman Sachs outlets, in this case its think tank embedded in the Brookings Institution and funded by Goldman and Robert Rubin. All 3 previous Directors of the Hamilton Project work in the Obama administration.
Robert Hormats: Obama Administration: Undersecretary for Economic, Energy and Agricultural Affairs, State DepartmentFormer Goldman Sachs Title: Vice Chairman, Goldman Sachs Group
Neel Kashkari: served under Treasury Secretary Paulson and was kept on by Obama after his inauguration for a limited period to work on TARP oversight, former Vice President of Goldman Sachs in San Francisco where he where he led Goldman’s Information Technology Security Investment Banking practice.
Karen Kornbluh: (sometimes called "Obama’s brain") Obama Ambassador to the OECD, was Deputy Chief of Staff to Mr. Goldman Sachs, Robert Rubin
Jacob (AKA "Jack") Lew: the United States Deputy Secretary of State for Management and Resources. According to Wikipedia, Lew sits on the Brookings-Rubin funded Hamilton Project Advisory Board. He also served with Robert Rubin in Bill Clinton’s cabinet as Director of OMB.
David Lipton: now at Obama’s National Economic Council and the National Security Council. Lipton -worked with Larry Summers and Timothy Geithner, on the US response to the Asian financial crisis of the 1990’s. MergeFoundations reports that Lipton worked closely with Robert Rubin:
Emil Michael: White House Fellow, former investment banker with Goldman Sachs
Philip Murphy: Obama Administration: Ambassador to Germany, Former Goldman Sachs Title: Head of Goldman Sachs, Frankfurt
Barack Obama: Obama owes his career to Goldman Sachs which was not only his biggest financial contributor when he ran for the presidency but also his biggest contributor when he ran for the Senate
Peter Orszag, Obama Budget Director, founding director of the Hamilton Project, funded by Goldman Sachs and Robert Rubin. Wikipedia indicates that Robert Rubin, Goldman’s ex-head, was one of Orszag’s mentors.
Mark Patterson: Obama Administration: Chief of Staff to Treasury Secretary, Timothy Geitner, Former Goldman Sachs Title: Lobbyist 2005-2008; Vice President for Government Relations
Mark Peterson: Chief of staff to Timothy Geithner, Goldman Sachs vice president and lobbyist
Steve Ratner: the shady billionaire financier who Obama appointed as his “car czar” and who resigned after it was revealed that his company, the Quadrangle Group, was apparently involved in “pay to play” for a billion dollars or so of New York State pension funds, and was under possible indictment by the New York AG and the SEC, also sits on the Advisory Council of the Goldman funded Hamilton Project
Robert Reischauer: a member of the Medicare Payment Advisory Commission from 2000-2009 and was its vice chair from 2001-2008. He too sits on the Hamilton Project’s advisory board.
Alice Rivlin: Obama named Alice Rivlin to his so called deficit reduction commission.
James Rubin: Son of Robert Rubin. Served as a headhunter for Obama per the New York Times article, "Rubin Proteges Change Their Tune as They Join Obama’s Team"
Gene Sperling: advisor to Timothy Geithner on bailouts, Sperling paid by Goldman Sachs for one year of consulting work.
Adam Storch: Obama Managing Executive of the Security and Exchange Commission’s Division of Enforcement Vice President in the Goldman Sachs Business Intelligence Group
Larry Summers: Obama chief economic adviser and head of the National Economic Counsel, Worked under Robert Rubin at Goldman Sachs
John Thain: Obama Administration: Advisor to Treasury Secretary, Timothy Geitner, Former Goldman Sachs Title: President and Chief Operating Officer (1999-2003)

Where's your outcry for this?

 

[tk149]

If that were the case then there would be the same outcry as there was during the last price spike.

I think that was the point of the original post.

 

[Linflas]

I think that was the point of the original post.

Yes it is which is why I don't think it is "meet the new boss, same as the old boss". That implies that given similar circumstances the reactions are similar when clearly what is happening here reaction-wise is totally dissimilar to the way the media portrayed this in 2007. I would agree that what is taking place in the oil markets are very similar so if that is what you were referring to then I would agree with you.