Slog News & Arts

Line Out

Music & Nightlife

« YouTube, MeTube, EveryoneTube,... | What to Wear to a Stampede? »

Thursday, July 3, 2008

No Mo’ Money

posted by on July 3 at 15:03 PM

From Time/CNN:

In a week when oil prices shot to $143 a barrel, the mood at the World Petroleum Congress in Madrid is surprisingly somber. Perhaps the oil company CEOs and OPEC ministers, gathered for the biggest conference in the industry’s calendar, are feeling besieged by the relentless drumbeat of public outrage. Perhaps they have been worn down by their ongoing efforts to blame each other for spiraling prices. Or maybe they just think it in poor taste to gloat about their record profits.

Which do you think is the source of the somber mood: feeling besieged? worn down from blaming each other? or out of a sense of decency?

While you think about that, have a look at this old (now dead) lady and her dog:
The story:

The late US real estate tycoon Leona Helmsley reportedly wanted her estimated $8bn fortune spent on dogs.

She left instructions that her estate go towards dog welfare, according to the New York Times, and animal welfare groups are elated.

The newspaper said that while her wishes were not part of her will courts do consider expressions of intent.

Mrs Helmsley, who died last August aged 87, was dubbed the “Queen of Mean” during a trial in 1989 for tax evasion.

One of the most common products of wealth is an iron misanthropy.

Money is, of course, the substance of a wonderful article by Trisha Ready:

We have reached the end of what author Philip Cushman in a 1990 article in American Psychologist called the “post World War II empty self” era. Cushman writes about the change in America from the Victorian era of saving money and restricting impulses (sexual and otherwise) to the consumer self who is “soothed, organized, and made cohesive” by being filled up with food, objects, and celebrities. Cushman blames psychology and advertising as tools of the financial power structure that created the consumer self by preying on humans’ abiding feelings of insecurity and doubt. Credit made us more interesting and glamorous and more competitive with one another even if the things we purchased never did deliver the promised redemption of saving us from our limitations.

What’s fascinating about her article is it’s attempt to locate (or define) the new American thinking, feeling, and being—the American that is no longer saved from its limitations. An American with limits is something new (or renewed) in the world. This new thing might actually be the “flattening” effect of globalization. Not a flattening of access to new technologies and the competition of international companies and markets, but, instead, a flattening of citizenship. No citizenship in the near-future world will save an ordinary person from a life with limits.

RSS icon Comments


No, what's fascinating about her article is that she's using an 18-year-old article by a damn fool, and some repulsively nativist sentiments about dang furriners owning our banks and beer companies to stir up panic where none naturally exists.

In fact, having foreign companies and governments buying companies in the US is a measure of confidence -- people don't buy stuff they think is going to fall apart. Having foreigners own those things actually means that they now have a stake in their success. So it's a sign that America has value, not that it faces ruin.

But, you know, if y'all want to run up into the hills and dig a hole and pull the lid over after you, go ahead.

Posted by Fnarf | July 3, 2008 4:15 PM

Or maybe the mood is somber because refineries and stations have not been able to pass the full cost of the increase onto consumers and are facing lower profits. Even the oil companies themselves are facing decreased, not increased profit margins.

Posted by Giffy | July 3, 2008 4:50 PM

LOL, Giffy, then why do all the latest quarterly and YTD results for resource extraction firms, including oil funds, show massive profits while all other sectors (other than utilities) are down?

(source: WSJ, print edition, today, get your own fucking subscription-required link)

If refineries were stand alone firms and not indirectly and directly owned by the oil firms themselves, you might have a point, but sometimes you can make more money by reducing profit factors in areas that are more highly taxed (refineries versus exploration/drilling/shipping) to artificially reduce your tax exposure - and, bonus points, use this as leverage to force Congress to expedite permitting for US refineries under the (LIE) proposition that we need subsidies for refineries.

Posted by Will in Seattle | July 3, 2008 5:07 PM

@3, Record profits are not all the remarkable when coupled with record revenue. The key is the profit margin.

Ans sure, money gets moved around in these conglomerates, but overall oil companies, writ large, are not all that happy about sky high prices. Now if your say OPEC and actually own a good chuck of the worlds reserves and subsist mostly on pumping and selling, then you sitting pretty.

Also you have the increased pressures to tap more reserves and develop alternatives. Neither really bodes all that well for oil companies. Mostly because while high prices are not the greatest the price crash that would accompany say more capacity coming online would be worse.

From what I've gathered most in the business see 60-80 a barrel as a good price, with a stable increase form then on. And that's probably were we will be by the end of the year.

Posted by Giffy | July 3, 2008 5:23 PM

@# addendum. I would add that the biggest fear for oil companies is the future. Thing right now are not that bad, but if high prices depress demand or encourage non-oil/SOV transportation option, things look quite bad for them.

Posted by Giffy | July 3, 2008 5:27 PM

Is that Heath Ledger or Jack Nicholson as "The Joker"?

And what do you mean, "(now dead)", Charles? She was alive for that picture? Oh wait, she must be, the dog isn't nipping at her rotting flesh.

Posted by CP | July 3, 2008 6:44 PM

@4 you're thinking FCF (free cash flow).

Profit margins are so 80s.

Posted by Will in Seattle | July 3, 2008 9:42 PM

Think cycles. The next president is either going to make things worse ala Jimmy Carter or better ala Reagan. Either way, it looks bad for the average schlub for some time. But the one bright spot is labor unrest in China and India.

Posted by Vince | July 4, 2008 2:59 PM

Comments Closed

Comments are closed on this post.