DawgTalkers.net Forums DawgTalk Palus Politicus Sigh…the economy... Part 2

Inflation is definitely one of those sectors where corporations are taking advantage. Which actually sucks because a lot of businesses - mostly small - are actually suffering, but that doesn’t stop the megacorps from jumping on the train.

A lot of the larger sole source defense contractors are trying to price gouge by citing inflation but none of them - that I work with at least - are actually opening up their books to show us. It’s even worse at the subcontractor level.

On the other hand, the funny thing is there was one company I am working with now that pushed like crazy to get a firm fixed price contract (where you pay them a lump sum and they have to deliver no matter what, as opposed to a cost contract where you reimburse their actual costs incurred and give them a separate fee). With fixed price, the company has the highest potential profit margin and it’s easy to drive up the price if you’re the only one who makes the product. Now that this company has been a little burned by inflation, they are asking for an equitable adjustment for recently negotiated contracts to maintain their profit margin because of inflation. I asked if they would be willing to reopen other past contracts where they got windfall profit and reimburse us for those. You can guess what the answer is.

And you’re right, both parties have enabled this poor, entitled behavior for decades now.

Good posts. I don't agree with everything, but we're not that far apart...

I'd like to go back to this, because I missed it the first time:


Many people will look at this as some silly cop-out, or a way to excuse blame... it's not, it's part of the solution. On the surface it's easy to compare to the "every vote counts" dichotomy. On one hand, no election will change because "I" didn't vote... on the other, what if everyone had that mentality and didn't go to the polls? WE all need to speak with our wallets individually to have any effect collectively; and let's face it, it's really our only hope. This crap isn't changing in DC, and it won't change on Main St either, if we all just wallow in our misery and keep doing the same thing over and over.

I've come to the conclusion that most of this inflation is a product of greed, pure and simple. And if I think you're being greedy -- I ain't payin'.

Cheez-its, 6.99? No thanks. Found a knock-off at Aldi's at half the price. My mentality? I'll never buy Cheez-its again. Silly? Childish? Maybe. But that's my mentality with everything; every company, every restaurant, every service that I feel is taking advantage.

I have a buddy in the restaurant biz, sorta. Through the whole pandemic his attitude became "Eff 'em, they're paying it". He made a habit of changing everything from hours to pricing with the excuse "because covid" whether it was true or not. His employees got sick of a Russian-roulette schedule, his customers alienated him. He's closed. After 20+ years of hard work, great product at a fair price... done. The place up the street that always played second fiddle? Packed, day in and day out, their prices marginally higher than they were two years ago.

At the risk of making this sound like "Hints from Heloise", I'll expose another part of my mindset. My shopping habits have changed to "buy in bulk, stock-up, take advantage when on sale" to the point that my wife makes fun of me. When the "Dollar Store" (whatever their name is, the everything's a dollar store) said they were raising prices to $1.25, I stocked up.

"You crack me up! You just spent $90 on a bottle of Mezcal last week, now you're racing out to save a quarter!"

"First, I spent $90 on Mezcal because I love it, and I've earned it. Second, it's not a quarter, it's 25%! Lastly, that Mezcal is the same price as it was last year, $110... I waited 'til it was 20% off!" (Anyone else notice how liquor prices have remained stable at a time when we need them most? Now this is an industry I can throw some extra support!)

Anyway, I'm rambling... This is what happens when I'm trying to pass a kidney stone and visit Dr. Mary Jane in the morning.

Thanks, OCD, for some real insight.

Just be careful listening to me, I might radicalize you.

I do. This is usually your response when you can't find anything of substance to come back with. If oil companies are signing leases where the express purpose of those leases are oil and gas exploration, they should be required to use them for that purpose in order to acquire more leases. Not just be able to hoard millions of acres and expect even more. If you're not drilling on lands you obviously decided was oil or gas rich, it's you who are holding production down.

Well then, talk to the gov't. about it.

excellent breakdown on what's going on with the gas and oil prices.

I blame them for not using these leases for their intended purpose. I also blame the system that allows them to do so. But I'm not sure how any of that changes the fact that they have decided these lands are oil rich enough to lease but not oil rich enough to drill on. They're certainly not building houses on or farming these lands. So what other purpose besides oil exploration could they use them for?

So yes, I expect our government to hold them accountable to drill on the current leases they have before giving them even more leases. Oil companies exploiting these leases is no more or less wrong than our government allowing it to happen.

I guess what it boils down to is this. We keep hearing about how Biden isn't giving out new oil leases. Which in and of itself is factually untrue. Portland's articles made that quite clear. They blame nobody but government for high fuel prices even when it's a global issue. What we never seem to hear about is the millions of acres of leases the oil companies currently purchased for the express purpose of exploration but refuse to drill on. So pointing out that there are two issues here and not simply one I think is quite appropriate.

There are certainly several other factors to be sure. This isn't the only one. However it's one that never seems to be touched upon that certainly deserves to be IMO.

Yeah, lets never hold big business accountable for anything. Because I mean "they can do it so that makes it okay".

I know, right? I wonder how long it will be until she's staring at an eclipse with no eye protection?

jc

guys, please start investing into REITs if you haven't already. we all know no matter what happens, who's in charge, or what the political leanings may be, the stock market is inevitable.

nobody is gonna do anything about these investors buying up land that's supposed to be zoned for residential development, nobody is gonna do anything about these super small ass parcels of land these housing developers "sell" for construction in subdivisions, etc. i continue to vote for people who want (read: pretend) to fix these problems, but we all know the wealthy and corporations are gonna win out anyway. so vote for people who at least have. good intentions, but don't be dumb by not investing into REITs and emerging market ETFs, cause they're gonna make their money whether or not us everyday americans invest in them or not.

stocks are cheap, and probably gonna get cheaper. just buy and save yourself the headache in the long term.

One could argue that they are... locking up land at dirt-cheap prices for possible exploration. With the icing on the cake being that they are a tax deduction... basically making $1.50 per acre just $1 per acre.

Really, the whole argument about land leases is a little silly. At least for either side to make it some big deal that it is not. But let me ask you this...

If you go to a garage sale and there are giant boxes of baseball cards for $1 each, are you buying them? Can't look inside and see what's there before the purchase, you only know that they are as described -- baseball cards. Who wouldn't, right? Worst case scenario, they're all trash and you're out a buck. Best case? Well, the sky's the limit.

Some may rush home and start diligently going through the boxes, listing them on ebay, making a few (or a lot more) bucks on their investment. Others may just stack them in the garage, because they know, no matter what, those cards will always be worth more than the purchase price and always go up in value.

So, the real question (to me) becomes... What kind of idiot sells giant boxes of baseball cards for a buck??

I'm about to look into them as it is time to move some money around. Any links or inside (read: personal experience) info would be appreciated.

I find it odd that just earlier today you posted this......


Yet when oil companies do the exact same thing you seemingly do not hold them to the same standard. As I said, I blame both the oil companies and the system that allows this to happen. I don't see it as an either/or situation.

If every family and person in America depended on the price of baseball cards to help curb inflation I could understand your point. But that's a different issue all together. So yes, I blame the way the system is set up and since our economy hinges on fuel costs and everyone seems to blame production for the cause, I also blame the oil companies.

for sure.

so Purp and the refs, i believe this isn't considered insider trading because we're on a public message board, just like those Reddit users did with AMC and all that.

if anybody doesn't want to put their bread into anything somewhat risky, just stick with Vanguard index funds and ETFs and call it a day.

for real estate specifically, VNQ is the best. its a REIT ETF by vanguard and that holds a lot of other REITs publicly traded on the market. so with REITs, just like any stock they pay quarterly, but some actually pay monthly, as by law they have to pay 90% of their revenue back to shareholders. you have some that do residential investment, some that do commercial real estate, and some that do both. you can also find capital management companies that deal with debt securities and all that, like OXSQ and BKCC

So a few that I have is ORC, GOF, O, and NHI. NHI pays quarterly, but it's a dope one to have because they deal with investing into health care facilities. and since we all know the US and good health don't mix, the medical industry will continue to grow for the foreseeable future.

there's plenty of others out there, some high risk that pay 12-15% yields, some less risk that pay around 4-6% yields. some monthly, some quarterly. just research REITs and make sure you read up before buying, and obviously try to diversify the volatility out of your portfolio as best as you can.

other than REITs, stick to ETFs that track the index like normal, and if you're hellbent on investing into individual companies, stick the too big to fail corporations. we all know there's absolutely a such thing as too big to fail in this country, so the more corrupt and scum-baggy the corporation is, the safer your investments will be.

and FYI for everyone, i dont do any of that day trading nonsense. i just buy and hold.

Swish… I’m invested in Ellington Residential Mortgage REIT. They pay out a fat 14% dividend. My small investment with them alone pays all my fees on my trading platform, and then some.

You find it odd?

I didn't say it was right, just reporting the news, it's not that hard to wrap your mind around what's at play here.

How the hell can I "hold them to a standard", anyway?

Thanks bro.

ooo that's nice. ORC pays like 16% or something like that. imma jump into ellington. right now my REIT portfolio is pulling about 13% overall. i'm on Etrade as my platform and been with them since forever now. but the REITs is paying a little over half of my monthly subscriptions already (netflix, youtube, etc) and some utility bills. imma keep dumping residual income in REITs and see i i can get all my everyday expenses covered, and then keep it going after that as well.

The same way you said you hold every other business to that standard. I know you can't stop using fuel, but if everyone suddenly started cutting their consumption as much as possible it would be following the example of the standard you seem to propose holding every other business to. And let me ask you, when you hold those other businesses responsible for greed, do you blame it on every government loophole that allows them to game the system too?

https://digg.com/money/link/global-inflation-rates-last-two-years-2020-2022-rise-increase-nVYqXp7y3o

We started in on this topic in the last thread. Stumbled on the link just now.

https://www.google.com/amp/s/www.cn...n-the-hard-way-not-to-fight-the-fed.html

Look for more selling pressure next week as investors learn the hard way not to fight the Fed

The S&P 500 is on its way to its 10th down week in the last 11, and is now well into a bear market. On Thursday, all 11 of its sectors closed more than 10% below their recent highs. The Dow Jones Industrial Average fell below 30,000 for the first time since January 2021.

i swear i seen the exact same articles in 07-08, 2018, and in 2020.

hey investors, don't buy the dip....cause only we're allowed to!! and then in a couple years, guess what the articles are gonna say?

OMG ANOTHER LARGEST TRANSFER OF WEALTH IN US HISTORY! but somehow, this time it's different.

I agree. Real Estate trusts are a pretty good bet.

these oil and gas companies man....sitting on record profits, piles of cash, stock values up AND they paying decent dividend yields.

BP, Exxon, Valero, etc all shooting through the roof.

Please tell me what Biden is supposed to do about that? is he supposed to force the gas companies to lower their prices? aren't some of you just gonna call that communism?

yall love the free market, until the free market starts raising prices for no other reason than "cause you gotta pay anyway". then you STILL find a way to blame the government for what the free market does.

so i ask all you guys who blame biden for this: what is he supposed at the federal level that you won't turn around and call socialist, marxist, woke policies?

i've asked that multiple times, still didn't get an answer. i'm sure if some of you bother, it'll be some roundabout way to blame biden, offer no solutions, and just be mad to be mad.

oh well. the best i can do is care, but if y'all don't want anything meaningful done, then im starting to wonder why bother caring at all? i'm not hurting at the pump, and i have to fill up on 93. can't help people who won't help themselves.

I'm not on the side that is fighting against you and I am not blaming most of this on Biden, but I have a few suggestions. I don't want to argue, though. Just some brainstorming that I was thinking about while reading on the subject awhile ago. Wanna hear? No fighting, though.

Duplicate post. Not sure what happened.

only if you stop labeling everything as a fight. good lord bro...

A few things:

--Suspend the climate accounting rules.

--Give approval for more export facilities.

--Speed up the process for leases and permits for the oil companies, whether they are on or off-shore.

--Get rid of the dated Jones Act.

--Make it easier to get pipelines approved.

I am not saying these are all good ideas or that many will be in favor of them, but they do exist.

By Devika Krishna Kumar and Chunzi Xu (Bloomberg) —

Waiving a century-old shipping law to let foreign-flagged vessels transport fuel between U.S. ports — a favorite talking point of a US refinery sector trying to get the White House off its back — would only save East Coast drivers about 10 cents a gallon at the pump, JPMorgan said.

A potential waiver of the Jones Act is one of several tools the Biden Administration is weighing to reduce the effects of record energy costs for Americans. However, like most moves being considered by lawmakers, it’s unlikely to bring sustained relief.

A 10 cent per gallon cut would be about 2% of the current average New York state pump price, according to auto-club AAA. Pump prices in the US mounted a record rally since the beginning of the month until they dipped slightly this week. At $5 a gallon, the national average is still more than 60% higher than a year ago.

American Maritime Partnership Slams Calls for Jones Act Waivers to Help Lower Gas Prices

“Unfortunately for US drivers looking forward to hitting the road this summer after two years of lockdowns, the tools at the Administration’s disposal which might help lower fuel prices are likely limited in both number and potential impact,” JPMorgan Chase & Co. analysts including Natasha Kaneva said in a note.

It currently costs around $4.66 per barrel to move fuel from the US Gulf Coast to New York Harbor on a Jones Act-compliant vessel, according to data from price reporting agency Argus Media. A non-Jones Act ship for a similar route is nearly $1 per barrel cheaper as of earlier this week, according to Argus.

Waiving the Jones Act — as suggested by Exxon Mobil Corp. as a means to lower pump prices — will make regions like New York Harbor more competitive against overseas buyers in Latin America, who are currently sucking up a massive amount of US fuel to the detriment of suppliers trying to bulk up inventories on the East Coast.

But a blanket Jones Act waiver could alienate some of the biggest shipbuilders, vessel owners and organized labor in the country. Waivers for routes where Jones Act vessels currently dominate — such as from the US Gulf Coast to Florida — would be “toxic,” Andy Lipow, president of Lipow Oil Associates, said in a phone interview with Bloomberg.

https://gcaptain.com/jpmorgan-says-waiving-the-jones-act-unlikely-to-ease-pain-at-the-pump/

so the waiver would MAYBE save americans 10 cents at the pump. it's an ok idea, but that requires the gas companies to actually implement the savings.

oil companies already have tons of land that is already approved for drilling. the oil companies are the ones who decided not to ramp up drilling, Vers. remember, they straight up won't do it, which is why Biden had to start releasing an extra million barrels a day in our reserves, which still didn't make a dent.

you have to remember that half of what you suggested are long term policies, but that money would be better spent diversifying our energy sector overall. that will do nothing to lower prices in the short term, and damn near everybody is worried about the 'now'.

even a holiday gas tax is a gimmick, because the cost of gas was naturally gonna rise anyway do the fact that its summer, so gas companies always raise prices around this time.

the offshore drilling isn't gonna do anything, because oil companies already have the means to produce more oil onshore, but they refuse to do it.

look at the stock price and yields of the oil companies. they are prioritizing spending their profits on stock buybacks and giving money back to shareholders. and they SHOULDVE ramped up production due to the war in ukraine, but won't because now they get to charge more per barrel. oil companies don't want to drill more because if the demands goes down, they have excess oil and thus lose profit.

i'm not knocking the options, but you gotta realize that its basically glorified bribery to the oil Gods, who are already rolling around in cash. right now there is zero reason for oil companies to ramp up production, so other than maybe announcing this as a state of emergency and taking direct action (which will have conservatives screaming their lungs out), all biden - or any president - can do is WISH that the oil companies do the right thing.

which as corporations, they are under no obligation to do so. and if they're ever told/forced to, Biden will be called a communist and republican voters will demand that republicans do everything to stop him.

i was told that presidents dont control gas prices. so i'm trying to understand why oil companies don't take the same level of heat for causing this crap in the first place like biden is.

Vers, lets sit back and imagine yourself as an oil exec.

you're seeing massive profits, massive returns, and you're shareholders are happy. you are obligated to do what's in the best interest of the shareholders, and are under no legal, moral, or ethical obligation as a corporation to do what's in the best interest of consumers (the public). no matter what the president says or tries to do, and no matter how ticked off the public is, you know that they have no choice but to pay the outrageous price at the pump, and all they can do is be mad.

so knowing that the government can't make you drill more, even though you can if you want, why would you?

Swish, I am not on that side. I'm not blaming Biden for all these issues at all. I understand the greed of the oil industry. It's like the greed in most industries. I was just answering the question about possible things Biden could do to help. I am not even sure how practical they all are. I read your article about the Jones act. Ten cents? LOL...Anyway, I just like to educate myself and I remember reading about this a couple of months ago and those things are from memory. I probably left some out and maybe I worded some of them wrong.

Declare inflation an emergency and use the Defense Production Act to make them supply gas at a reasonable price with minimal profit. If you do that to a handful of price gouging corps, they will all get the message relatively fast.

i feel you. i'm just pointing out that the free market (big oil) decided to do this. if the free market decides not to do anything to reverse course, what can we do that wouldn't be called socialism?

Sounds like a GOPer wishlist.

will they? or will that be another excuse to storm the capitol building?

Who cares if it's called socialism, they need to be reined in. Unbridled capitalism looks more and more like financial fascism every damn day. Nationalize production until the corps learn to stop playing games.

If Big oil cries that they can't make a profit, the minions will rise.

again, i dont care what they call it. but government power has been so eroded over that last 30 years that any sort of government action is considered a threat to freedom.

Well if GOPers don't like it, they can pay their 5, 6, 7, 8, or 9 dollars a gallon. Many economists are expecting this inflation to last until late 23-early 24. Supply chain disruption and no regulations are killing us.