Exxon Is The Government’s New Whipping Boy!
I’ve been trying to find out whether we’re going to see an increase in interest rates over the next few years. It’ll depend on whether we have inflation and go into a recession or not. While reading on this topic, I’ve read a lot of interesting stuff.
Here’s something interesting from http://www.financialsense.com/stormwatch/2005/1028.html
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On the day this was written ExxonMobil, ConocoPhillips and Microsoft all reported third quarter profits. Exxon Mobil reported sales of $100 billion and profits of $9.9 billion. ConocoPhillips reported sales of $49.7 billion and profits of $3.8 billion. Microsoft reported that sales rose to $9.7 billion and profits rose to $3.14 billion. ExxonMobil earned a 9.9% return on sales; ConocoPhillips earned a net return on sales of 7.65%. Microsoft’s profits reflect a return of 32.2% on sales.
Company Sales (B) Profits (B) Return on Sales
ExxonMobil $100 $9.00 9.90%
ConocoPhillips $49.7 $3.80 7.65%
Microsoft $9.7 $3.14 32.2%The rise in ExxonMobil’s and ConocoPhillips’ profits promptly called for a windfall profits tax to be imposed on the oil companies. Microsoft’s profits of 32.2% on sales called for no similar action nor were there calls for windfall profits taxes on homebuilders, banks, and other technology companies who all reported higher profits on sales. The oil companies have become the government’s new whipping boy for government-created inflation. The object of course is distraction and shifting the blame.
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July 26th, 2006 at 8:21 pm
As you know software is a very different product than oil. It doesn’t cost Microsoft much more than a penny to make 1 billion CDs or 1 CD. Oil is a consumed resource unlike software.
And people don’t really have a choice not to buy oil either directly or indirectly. Sure you can ride your bike to work (if it’s close), but higher oil prices effect the whole economy.
I don’t know, I haven’t seen Microsoft raise it’s prices some 30% in the last year for it’s record profits. It probably makes a few people wonder if gas could be lowered by 20 cents a gallon and they could just make 3.0 billion or something. If you are on a fixed income that 20 cents can make a big difference.
July 26th, 2006 at 11:24 pm
first i think its wrong to punish a company for making a profit.
secondly and more to the point, asking exxon to take a cut on its measely 9% profit margin is sticking it to its shareholders. That should be illegal. [its definitely un-capitalistic and thus un-american].
The problem is not with the oil refinaries or distributors but with 1. the jump in global demand and consumption.
2. the fact that american’s are used to hogging 4-10 times more of the earth’s natural resources than everyone else.
the price of oil per barrel is set on the global markets, sort of like stocks are. its not in any company’s hands. its just demand thats increasing the price of oil from $25/barrel to nearly $70.
I found it hard to believe that 20 cents would hurt someone financially. Assuming people drive 12000 miles per year and their compact car[they're on fixed income so no suburban's for them] gets 30 miles/gallon, they fill 400 gallons/year. thats a $6.50 difference per month!!!!
If $6.50 is hurting someone on a fixed income, its a symptom of something much worse!!!!!
if 20 cents is hurting someone financially, there is something fundamentally. Asking Exxon to take a hit to save someone $6.50 isn’t the solution to that.
July 26th, 2006 at 11:32 pm
Else where in the world people spend upto $7/gallon. Does it affect their economy. Yes, but not as much as ours because theirs leaders don’t drive the country into $65 trillion dollars worth of debt.
Thats the real problem – our absurd debt levels.
If we weren’t in such bad shape, the raise in gas prices wouldn’t affect us so much.
The government’s just trying to shift the blame onto someone else.
And the unsuspecting public will buy it. What else are they like to us about????
if you want to beat oil prices, invest in Exxon or directly in oild rilling programs.