United Airlines says it will lay off 950 pilots
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No gouging huh?
http://www.nytimes.com/2007/02/01/bu...IrByfsmpfCUayg
I wish my airline was also a "vertical monopoly" capable of doubling the fares and posting a quarterly ten billion dollar profit under the facade that: "It's just supply and demand everybody; can't help it!" But then, silly me..... We don't have airline CEO's in the administration......
Opec puts out only about 25% of world oil, but dictates prices to everybody. This is a free market?
http://www.nytimes.com/2007/02/01/bu...IrByfsmpfCUayg
I wish my airline was also a "vertical monopoly" capable of doubling the fares and posting a quarterly ten billion dollar profit under the facade that: "It's just supply and demand everybody; can't help it!" But then, silly me..... We don't have airline CEO's in the administration......
Opec puts out only about 25% of world oil, but dictates prices to everybody. This is a free market?
Thread Starter
Good post L-38, I think you're right. Any country that tries to flood the world with cheap oil, and who won't take worthless dollars for it can expect an aircraft carrier with ill intent to anchor offshore. Venezuela and Sudan may wind up on the radar the way they're going...
Bloomberg.com: News
Opec puts out only about 25% of world oil, but dictates prices to everybody. This is a free market?
You guys sound like you hate the US system of capitalism, you should rejoice, its how America works.
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Precisely - OPEC upstream is half the problem, but largely it is demand (see the bottom of your article where it mentions - "Production rose 4.1 percent to 3.65 million barrels of oil a day in the fourth quarter").
Exxon downstream (retail) makes little cash - hence them selling the petrol forecourt operations at the moment, and many other oil majors getting out of refining and retail operations.
Why would you want to be vertically integrated anyway? If you were an airline that owned Exxon - for example - if you could sell the fuel for a higher cost elsewhere, then you would do so - why would you sell at a lower cost to your own operation, lowering your own profits overall (unless you were trying to defeat all other airlines and create an airline monopoly - which would incidentally be illegal).
Gouging, or monopolising as it might be termed, would be indicated by falling production and increasing prices. We have increasing production and increasing prices.
Capitalism is brilliant, as pricing is doing exactly as it should - signalling a shortage and changing behaviours. You hardly want to end up as a communist planned economy with no development!
Exxon downstream (retail) makes little cash - hence them selling the petrol forecourt operations at the moment, and many other oil majors getting out of refining and retail operations.
Why would you want to be vertically integrated anyway? If you were an airline that owned Exxon - for example - if you could sell the fuel for a higher cost elsewhere, then you would do so - why would you sell at a lower cost to your own operation, lowering your own profits overall (unless you were trying to defeat all other airlines and create an airline monopoly - which would incidentally be illegal).
Gouging, or monopolising as it might be termed, would be indicated by falling production and increasing prices. We have increasing production and increasing prices.
Capitalism is brilliant, as pricing is doing exactly as it should - signalling a shortage and changing behaviours. You hardly want to end up as a communist planned economy with no development!
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Good posts everybody. Economics is my weak subject so feel free to correct me on anything.
Opec influence: isn't that what a cartel really does? Manipulate price by adjusting output and coercing it's members not to sell below the agreed to price?
(Whether it's a drug cartel or an oil cartel?)
• CARTEL (noun)
The noun CARTEL has 1 sense:
1. a consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service
It's not a matter of loving or hating the 900 lb wall street gorilla. It's there and we have to deal with it. I just don't want to be under King Kong when he falls. But since most of my income is tied to the health of my airline it's getting pretty dark under his growing shawdow....
enjoyed the banter.
pac - out
Opec influence: isn't that what a cartel really does? Manipulate price by adjusting output and coercing it's members not to sell below the agreed to price?
(Whether it's a drug cartel or an oil cartel?)
• CARTEL (noun)
The noun CARTEL has 1 sense:
1. a consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service
It's not a matter of loving or hating the 900 lb wall street gorilla. It's there and we have to deal with it. I just don't want to be under King Kong when he falls. But since most of my income is tied to the health of my airline it's getting pretty dark under his growing shawdow....
enjoyed the banter.
pac - out
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What is wrong in the US, with that kneejerk laying off people.
I've been laid off before and have great empathy for those being laid off. While I think airline management in general has been screwed up for years, United really has no choice in this matter.
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Yes, OPEC does control output and tries to be a cartel, but it does not by any means control all output - it has 66% of the reserves and 36% of production, so there is still significant scope for others to sell.
Furthermore, the largest problem OPEC - and all cartels have - are members cheating. Output of the 13 OPEC states is actually higher than their "agreed" output.
Yes, it is a contributor to high prices, but it is not by any means what has driven $140 oil.
Furthermore, the largest problem OPEC - and all cartels have - are members cheating. Output of the 13 OPEC states is actually higher than their "agreed" output.
Yes, it is a contributor to high prices, but it is not by any means what has driven $140 oil.
Thread Starter
The only OPEC member with spare capacity is Saudia Arabia. So they are hardly forcing prices up as they are over producing already. Demand will keep increasing (95% of Chinese don't own cars and price increase will only mildly affect public transport users, India car owners are already heavily taxed).
Oil Production hasn't increased in 3 years and it probably won't increase for a at least 5 years. Russia, for example, taxes oil so heavily that oil companies cannot afford to invest in new production. Other producers are producing less, e.g. UK is past peak and falling fast.
DA7X
Absolutly. The housing crash was predicted and described in detail 5 years ago in the New York Times.
Soros has been predicting it for years
MoneyNews - America's Money News Page
Its simple logic - perpetual growth is fundermentally impossible.
Oil Production hasn't increased in 3 years and it probably won't increase for a at least 5 years. Russia, for example, taxes oil so heavily that oil companies cannot afford to invest in new production. Other producers are producing less, e.g. UK is past peak and falling fast.
DA7X
Could this happen?
Soros has been predicting it for years
MoneyNews - America's Money News Page
Its simple logic - perpetual growth is fundermentally impossible.
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From peter we
Yes, dropping the dollar is inevitable as the camels' nose is now under the tent!
What will America do when the dollar invested nations of the world no longer tolerate America's reckless printing of money (printed mainly to finance expensive US political agendas - Iraq war, ect. .)?
America's fiscal recklessness may be history repeating itself. - Back in the 1960's, the USA had somewhat also printed money to help finance the Vietnam war. France in suspecting this, had called Nixon's bluff and demanded that French debt be paid in gold. The result was that Nixon then un-pegged the US dollar from the gold standard, and later replaced it with a kind of oil standard . . .(world oil to be sold in US dollars).
America (and mainstay dollar based economies) are now in for quite an economic ride!
. . Then you might want to add Saudi Arabia, Kuwait, United Arab Emirates and Qatar to the list of countries to threaten as they have, or are about to, drop the peg to the dollar. . .
What will America do when the dollar invested nations of the world no longer tolerate America's reckless printing of money (printed mainly to finance expensive US political agendas - Iraq war, ect. .)?
America's fiscal recklessness may be history repeating itself. - Back in the 1960's, the USA had somewhat also printed money to help finance the Vietnam war. France in suspecting this, had called Nixon's bluff and demanded that French debt be paid in gold. The result was that Nixon then un-pegged the US dollar from the gold standard, and later replaced it with a kind of oil standard . . .(world oil to be sold in US dollars).
America (and mainstay dollar based economies) are now in for quite an economic ride!
Last edited by L-38; 27th Jun 2008 at 17:34.
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The following text was taken from the press . .
"The next time you hear a politician use the word 'billion' in a casual manner, think about it.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of it's releases.
A billion seconds ago it was 1959.
A billion minutes ago Jesus was alive.
A billion hours ago our ancestors were living in the Stone Age.
A billion days ago no-one walked on the earth on two feet.
A billion dollars ago was only 8 hours and 20 minutes, at the rate that the US government is spending it."
"The next time you hear a politician use the word 'billion' in a casual manner, think about it.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of it's releases.
A billion seconds ago it was 1959.
A billion minutes ago Jesus was alive.
A billion hours ago our ancestors were living in the Stone Age.
A billion days ago no-one walked on the earth on two feet.
A billion dollars ago was only 8 hours and 20 minutes, at the rate that the US government is spending it."
Last edited by L-38; 27th Jun 2008 at 17:36.
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L-38 said:
My micro/macro economics is coming back to me now. I remember the professor saying that the answer was then to take it off oil and peg the dollar to Uranium.
The Royal Family will like this since they control what? >50% of the worlds Uranium mines? The U.S. now says it will switch to nuke energy in a big way (never mind the gov/subsity/huge infrastructure costs,) and already contractors are falling all over themselves to position themselves at the gov trough. Makes sense again, from a banker baron perspective, since here's a tightly controlled source of energy that can be manipulated price-wise to hook us on the electric grid (which we're woefully short of right now in the states.) So instead of petro-dollars going to the mid-east, we'll see "nuke-dollars" going to Africa? (Probably the only place left that will take them?) In exchange, those countries will be allowed to become rich as long as they agree to only take play money for their rocks.
But big oil's greed maybe delayed that sneaky little scheme. What's it going to take in years to build the new set of plants? Five-ten years? Nevermind, Uranium is already soaring.
You see, solar works good in the southern U.S. but we can't be extorted for that supply of energy. The source isn't containable and it's free.
It's all becoming clear to me now.....
Yes, dropping the dollar is inevitable as the camels' nose is now under the tent!
What will America do when the dollar invested nations of the world no longer tolerate America's reckless printing of money (printed mainly to finance expensive US political agendas - Iraq war, ect. .)?
What will America do when the dollar invested nations of the world no longer tolerate America's reckless printing of money (printed mainly to finance expensive US political agendas - Iraq war, ect. .)?
The Royal Family will like this since they control what? >50% of the worlds Uranium mines? The U.S. now says it will switch to nuke energy in a big way (never mind the gov/subsity/huge infrastructure costs,) and already contractors are falling all over themselves to position themselves at the gov trough. Makes sense again, from a banker baron perspective, since here's a tightly controlled source of energy that can be manipulated price-wise to hook us on the electric grid (which we're woefully short of right now in the states.) So instead of petro-dollars going to the mid-east, we'll see "nuke-dollars" going to Africa? (Probably the only place left that will take them?) In exchange, those countries will be allowed to become rich as long as they agree to only take play money for their rocks.
But big oil's greed maybe delayed that sneaky little scheme. What's it going to take in years to build the new set of plants? Five-ten years? Nevermind, Uranium is already soaring.
You see, solar works good in the southern U.S. but we can't be extorted for that supply of energy. The source isn't containable and it's free.
It's all becoming clear to me now.....
Last edited by pacplyer; 28th Jun 2008 at 00:09.
How terrible it is that most if not all of these same United pilots were already laid-off for 2-5 years or so. Good luck to United's junior pilots and those at other carriers here. I'm wondering which airlines overseas will want to lease their grounded jets (?), assuming that creditors refuse to allow a much lower lease per plane outside of another 'Chapter 11' filing.
I've flown with not only several new-hires lately but also numerous First Officers who were gone for several years and returned about a year ago. At various airlines many were tempted to not return while many others said "no thank you". One guy told me this week that he finished IOE only two weeks ago, but is reporting to Initial Training in one month on another aircraft which has almost disappeared from the operation. I can not tell the most junior pilots what is going to happen to them, but they must already know or at least suspect. The only question is when. Many might return to previous jobs knowing that so many regional FOs have far too little experience to upgrade for years.
Even FEDEX mgmt. has discussed the possibility of hoping for early pilot retirements in order to avoid their first ever (!) furlough of pilots-and they have been around since about 1973.
This is difficult to imagine, knowing the gigantic past success of Fedex and their "people culture".
They won't hire until at least 2010 due to a financial loss.
More than several small 'low-cost' US airlines are gone, and many more have swords hanging over their heads. Frontier just announced plans to park many jets. It is quite possible that few of the many small airlines have any real equity and have limited cash reserves.
Pilot groups and other staff at most US major airlines accepted such draconian pay cuts along with numerous benefit cuts that they will give no more.
The US has had a mortgage melt-down all over the land (due to ballooning interest rates recently), and the flooding around the upper Miss. River (barge traffic stopped) combined with increasing food/fuel prices will hurt airlines and other industries even more than most people realize.
A single military strike in the Arabian/Persian Gulf will spike fuel prices through the roof (I'm glad we have no SUV car-soon you will not be able to give them away).
The US has a good bit of offshore and other oil deposits, but various environmental groups exert large political pressure to keep it
out of reach-many using the extra excuse that it will take 20 years to extract much of it...
I've flown with not only several new-hires lately but also numerous First Officers who were gone for several years and returned about a year ago. At various airlines many were tempted to not return while many others said "no thank you". One guy told me this week that he finished IOE only two weeks ago, but is reporting to Initial Training in one month on another aircraft which has almost disappeared from the operation. I can not tell the most junior pilots what is going to happen to them, but they must already know or at least suspect. The only question is when. Many might return to previous jobs knowing that so many regional FOs have far too little experience to upgrade for years.
Even FEDEX mgmt. has discussed the possibility of hoping for early pilot retirements in order to avoid their first ever (!) furlough of pilots-and they have been around since about 1973.
This is difficult to imagine, knowing the gigantic past success of Fedex and their "people culture".
They won't hire until at least 2010 due to a financial loss.
More than several small 'low-cost' US airlines are gone, and many more have swords hanging over their heads. Frontier just announced plans to park many jets. It is quite possible that few of the many small airlines have any real equity and have limited cash reserves.
Pilot groups and other staff at most US major airlines accepted such draconian pay cuts along with numerous benefit cuts that they will give no more.
The US has had a mortgage melt-down all over the land (due to ballooning interest rates recently), and the flooding around the upper Miss. River (barge traffic stopped) combined with increasing food/fuel prices will hurt airlines and other industries even more than most people realize.
A single military strike in the Arabian/Persian Gulf will spike fuel prices through the roof (I'm glad we have no SUV car-soon you will not be able to give them away).
The US has a good bit of offshore and other oil deposits, but various environmental groups exert large political pressure to keep it
out of reach-many using the extra excuse that it will take 20 years to extract much of it...
Last edited by Ignition Override; 28th Jun 2008 at 06:43.
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Not the only aging fleet of midrange A/C, United has some 100 runout airframes, as does American.
Thread Starter
The US has a good bit of offshore and other oil deposits, but various environmental groups exert large political pressure to keep it out of reach-many using the extra excuse that it will take 20 years to extract much of it...
pacplyer
My micro/macro economics is coming back to me now. I remember the professor saying that the answer was then to take it off oil and peg the dollar to Uranium.
The Royal Family will like this since they control what? >50% of the worlds Uranium mines? The U.S. now says it will switch to nuke energy in a big way (never mind the gov/subsity/huge infrastructure costs,) and already contractors are falling all over themselves to position themselves at the gov trough. Makes sense again, from a banker baron perspective, since here's a tightly controlled source of energy that can be manipulated price-wise to hook us on the electric grid (which we're woefully short of right now in the states.) So instead of petro-dollars going to the mid-east, we'll see "nuke-dollars" going to Africa? (Probably the only place left that will take them?) In exchange, those countries will be allowed to become rich as long as they agree to only take play money for their rocks.
But big oil's greed maybe delayed that sneaky little scheme. What's it going to take in years to build the new set of plants? Five-ten years? Nevermind, Uranium is already soaring.
You see, solar works good in the southern U.S. but we can't be extorted for that supply of energy. The source isn't containable and it's free.
The Royal Family will like this since they control what? >50% of the worlds Uranium mines? The U.S. now says it will switch to nuke energy in a big way (never mind the gov/subsity/huge infrastructure costs,) and already contractors are falling all over themselves to position themselves at the gov trough. Makes sense again, from a banker baron perspective, since here's a tightly controlled source of energy that can be manipulated price-wise to hook us on the electric grid (which we're woefully short of right now in the states.) So instead of petro-dollars going to the mid-east, we'll see "nuke-dollars" going to Africa? (Probably the only place left that will take them?) In exchange, those countries will be allowed to become rich as long as they agree to only take play money for their rocks.
But big oil's greed maybe delayed that sneaky little scheme. What's it going to take in years to build the new set of plants? Five-ten years? Nevermind, Uranium is already soaring.
You see, solar works good in the southern U.S. but we can't be extorted for that supply of energy. The source isn't containable and it's free.
The world is not short of Uranium, neither is the US and its basically extremely cheap in any case.
You can't blame 'Big Oil' for the lack of nuclear power station - its the general public and Politicians fear of the safety issues after Three Mile Island.
And there is absolutely no hindrance to anybody, installing Solar power, except cost. The economic change has now made it viable. This has been 80% increase in installations last year, projected to be 80% again this year and probably every year from here on. Several companies are investing billions of dollars making new solar manufacturing plants. Qatar for instance, is investing $2billion.
Market Watch News
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Great to read this, thanks to everyone.
I believe that as a society at large we're in denial of the "problem" and the diffused well-being of the Western countries will be seriously challenged.
Anyway I do not want to enter a sociological or economic rant, as I admit my essential ignorance on that.
I don't know in percentage how much we can blame demand/supply, weak dollar, or use of derivatives on oil.
I just wanted to point that today just as before, every investor from $1000 to 1 trillion is allowed to to speculate on the downturn by shorting stock, trading derivatives, or trading currency with a 400:1 leverage. All with the clear signals of a definite trend that has no signs of inversion whatsoever in the near future.
Pick your choice, travel/tourism, transportation, non-essential goods and services, just leave energy alone. You're more likely to make money being bearish on these than giving it to the sanctified names that will handle it the way you saw in recent news.
As a citizen (with some money) of the first world you're entitled to profit from the global information age, and play with almost the same tools like the big boys. A cynic act? Apparently profits made out of your money in this society don't require justification but only tax payments.
We even go to war to defend all this.
I believe that as a society at large we're in denial of the "problem" and the diffused well-being of the Western countries will be seriously challenged.
Anyway I do not want to enter a sociological or economic rant, as I admit my essential ignorance on that.
I don't know in percentage how much we can blame demand/supply, weak dollar, or use of derivatives on oil.
I just wanted to point that today just as before, every investor from $1000 to 1 trillion is allowed to to speculate on the downturn by shorting stock, trading derivatives, or trading currency with a 400:1 leverage. All with the clear signals of a definite trend that has no signs of inversion whatsoever in the near future.
Pick your choice, travel/tourism, transportation, non-essential goods and services, just leave energy alone. You're more likely to make money being bearish on these than giving it to the sanctified names that will handle it the way you saw in recent news.
As a citizen (with some money) of the first world you're entitled to profit from the global information age, and play with almost the same tools like the big boys. A cynic act? Apparently profits made out of your money in this society don't require justification but only tax payments.
We even go to war to defend all this.
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The world is not short of Uranium, neither is the US and its basically extremely cheap in any case.
You can't blame 'Big Oil' for the lack of nuclear power station - its the general public and Politicians fear of the safety issues after Three Mile Island.
Texas is big oil. Bush was ceo of an oil company and Cheney ceo of oil infrastructure support co haliburton, so I can and do blame big oil greed for the misdirection of U.S. energy policy. The influence, for example, of oil company ties to this administration’s decision not to increase federal mpg standards or lower the nations speed limit has had a huge impact on consumption and hence it’s demand. The decision not to build any new refineries (e.g. in California) the last twenty years causes a bottleneck that defies gravity and keeps avgas and car gas prices artificially high and not in concert at all with the actual oil market.
Exxon alone made over 40 billion dollars profit last year. Why isn’t more of this put into exploration? The South China sea is rumored to have more oil under it than Saudi Arabia but there’s no political will to strike a compromise with china and do more test drilling in those disputed waters.
Some see market coincidence, whereas I see gov and big oil in unholy collusion trying to robb what’s left of the middle class. Cheers.
pac "park the toys" plyer
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DA7X
U could not have said it better - we read about these experts telling us what is wrong in the world, but u hit the nail right bang on the centre of the head>
The new system will emerge but it aint gonna be easy and we all need to make sacrifices to get there. Only the strong and those that can plan properly and buget and adapt will survive
U could not have said it better - we read about these experts telling us what is wrong in the world, but u hit the nail right bang on the centre of the head>
The new system will emerge but it aint gonna be easy and we all need to make sacrifices to get there. Only the strong and those that can plan properly and buget and adapt will survive
Thread Starter
Well, I'm no expert on grades of uranium needed to fuel a plant, but the argument made by opponents of nuclear power is that if we switched entirely to it for power generation in the U.S, all known world sources of it would run out in something like fifteen years. Crude was cheap at one time also, Uranium may be the next hot commodity (but who knows, maybe my professor had it wrong.)
Nuclear Fusion is another level altogether. One Kg of water will produce the energy equivalent to 10,000,000kg of coal with far less radioactivity than Fission. You will be pleased to hear the US government tried its best to delay the building of the prototype rector in France (which is still 15 years away)
Well I can't argue with that: Three Mile Island killed nuclear power, however, gov investment in alternative energy development has been practically non-existent when you compare it against the costs of a 300 billion dollar oil war to keep us topping off at Exxon. That kind of money could have been spent in a variety of better ways, like re-tooling detroit to produce efficient mpg technology or developing more efficient solar techs.
Why do we continue to have oil priced in US Dollars? Why not GBP or EUR? Surely that would bring stability at least to prices?
Its priced in dollars for stability and convenience.
Until 1945 all commodities were priced in British Pounds, however the UK was bankrupted by the war and needed a loan. The US offered a loan with the additional condition that the UK gave up pricing in pounds and switched it to the US dollar. The British pound then started its long collapse (from $5/£1 to almost $1/£1) in the decades that followed.
The Dollar as the worlds reserve currency has massive advantages - the US can print as much paper it wants and swap it for real commodities. It can borrow at the best rates and benefits for masses of paper held around the world.
The US, however has completely blown it by abusing its position (borrowing and spending). There is now viable alternatives to the Dollar (Euro) and countries can switch. Iraq switched to the Euro before being invading and being forced to switch back to the Dollar. Iran switched to the Euro and is now under threat of invasion. That is how serious the threat and importance of the Dollars position. You can't invade everywhere and the problem is so bad even Kuwait has dumped the dollar - other oil countries are looking to do so.
Its my opinion that the jump in oil price and 100% rise in commodities is hidden devaluation in the dollar by countries with currencies linked to it. Paper dollars have lost half their value and therefore only worth half the weight of oil, copper or food etc.
A switch to the Euro or a basket of currencies is probably going to happen because of the American mismanagement. How low the dollar and how high oil goes before that is anyone's guess, but it will be very, very messy.
Last edited by peter we; 30th Jun 2008 at 08:47.
Thread Starter
Ignition Override
And its the smartest thing your government has done on energy security- its better to leave the oil in the ground for future use. The excuse of 'environmental concerns' is a smokescreen that allows both sides of the political spectrum to blame the other and feel good about it. Off shore drilling has been very clean for decades and nothing like transport oil by sea tankers and the hazards they cause when sinking.
On second thought, true,
It has been a bipartisan long-term process.
I stand corrected.
It has been a bipartisan long-term process.
I stand corrected.