http://www.msnbc.msn.com/id/24863925/
Until I read this article I did not realize oil has doubled in price in less than a year.

5/28/2008 9:26:01 PM

can I say it's a bubble?

and that it's going to burst?

LOLOLOLOLOLOLOL

if and when it does it's going to be hilarious seeing the oil companies explain why gas prices have not bottomed out as well

5/28/2008 9:35:13 PM

so does this mean stocks go up or down?

5/28/2008 9:55:12 PM

i cant tell if the original post is sarcasm or serious(about prices doubling in the past year)

5/28/2008 9:57:03 PM

^^ I'll make it easy for you. with the possibility of

5/28/2008 9:59:30 PM

in before the lock

5/28/2008 10:01:10 PM

Why would this get locked?

5/28/2008 10:04:10 PM

idk based on the last response you had and not answering my legit question i thought this thread was bogus...maybe not

5/28/2008 10:08:09 PM

Well first of all you edited your post after i posted mine. Second of all, I didn't see anything that could possibly be misconstrued as sarcasm in my OP. Third, I don't really make BS threads in TSB.

This is serious. Dow is raising prices on all their products by 20% and oil has more than doubled in less than a year.

5/28/2008 10:11:57 PM

Quote :

"Well first of all you edited your post after i posted mine. Second of all, I didn't see anything that could possibly be misconstrued as sarcasm in my OP. Third, I don't really make BS threads in TSB. This is serious. Dow is raising prices on all their products by 20% and oil has more than doubled in less than a year."

well first of all i didnt take anything away and just added whats in parenthesis, since you ignored it

second of all, how did you not know price of oil has doubled in the past year?

i mean yeah, dow is raising their prices...whoopty do...dont see u making a thread for everything else thats going up

5/28/2008 10:13:50 PM

i'm about to fuck off to a country with a strong currency and stable prices if this shit doesn't slow down

5/28/2008 10:14:51 PM

^^ You do realize that Dow makes, quite possibly, the widest assortment of products in the world? This isn't just food and gas that is going up now. This is basically everything that contains any kind of plastic or chemical in it. We are about to be royally fucked dude.

5/28/2008 10:19:11 PM

ummmmm dude...gas going up makes it way to all sectors pretty much

idk you seem "totally shocked" when this is like "common sense"

5/28/2008 10:27:25 PM

Dude, I don't think you realize that it's only been affecting transporting costs up until this point. It's literally about to send at least a 20% increase in consumer price to nearly every product in existence.

5/28/2008 10:31:06 PM

cap n trade environment policies will fuck this economy, n china cant wait

5/28/2008 10:33:37 PM

^^if you didnt see this coming you are an idiot, no offense...with that i will leave so this thread a serious discussion can ensue


oh and one final thing before i leave....in a way this is good...its gonna be harder for poor countries to pay the extra prices, which means they will have to succumb to the United States

[Edited on May 28, 2008 at 10:35 PM. Reason : .]

5/28/2008 10:34:22 PM

^^China can't wait until the country they export a majority of their goods and services to is economically ruined?



TSB gets dumber every day.

[Edited on May 28, 2008 at 10:36 PM. Reason : 2]

5/28/2008 10:35:51 PM

Quote :

"with that i will leave so this thread a serious discussion can ensue"

so he knows he's a total fool?

^^^ what does can and trade have to do with any of this? we're fucked either way. you're an idiot.

5/28/2008 10:39:28 PM

Quote :

"TSB gets dumber every day."

5/28/2008 10:42:24 PM

This thread.

It needs more LoneSnark.

5/28/2008 10:47:27 PM

I don't get how there are people that think peak oil is a myth with stats like that.

Either there is collusion, or there is a problem with the supply of oil.

5/29/2008 12:01:29 AM

Evidently everyone read a different article than I did. DOW is increasing prices on its chemicals which are used in most household products by 20%. This in no way means consumer prices are going to increase 20%.

Think about it: the primary ingredient in these chemicals is often petroleum, which went up 100%. In response DOW increases the price by 20%. These chemicals are bought by others to make your consumer products. Their inputs did not increase in price 100%, but only 20%. If we assume DOW to be a reasonable approximation for these other businesses, they have a 1/5th relationship between input prices and output prices. As such, we should expect end consumer prices to go up 4% in response.

People forget that when it comes to the costs of production, employee compensation tends to dominate everything, especially petroleum energy, even for specialized companies such as DOW chemical, which in 2002 spent only a quarter of its revenues to cover all energy purchases including electricity, whose price has not changed much. And the vast majority of companies spend even less on energy as a percentage of the retail price.

5/29/2008 12:18:21 AM

I realize most of what you said. But Dow has been eating the costs of oil going up up until this point. They refuse to do that any longer. Before now, most things had simply seen higher shipping costs, but now it's actually going to cost more money to make them instead of just transporting.

You're right about employee costs dominating expenses, but this is still going to raise prices on just about everything. Before now the main things had been fuel and food rising. Now anything that contains plastic or some manufactured substance is going to cost 20% money to make. That's a fairly large increase overnight. Prices may not go up 20% but we should see a very noticeable increase in prices in things across the board. Not to mention that the price of oil is not really slowing down its upward trend right now. It just seems like the economy is on its last leg already with gas being so high and this could provide the kick it needs to make it all come crashing down.

Obviously, I don't WANT that to happen because it would definitely be a bad thing for everyone, but it doesn't mean I'm a bad person for voicing my opinion on what will happen. Shit's looking grim right now.

[Edited on May 29, 2008 at 12:48 AM. Reason : ]

5/29/2008 12:48:04 AM

Quote :

" It just seems like the economy is on its last leg already with gas being so high and this could provide the kick it needs to make it all come crashing down."

Actually with the exception of rising energy prices, economic indicators have been mostly positive in the past month or 2. It looks like the financial crisis as a result of the subprime loan mess is mostly behind us, and inflation has been at manageable levels despite the escalating cost of fuel.

Hell, the stock market gained 50 points today in spite of the announcement from Dow.

5/29/2008 12:57:06 AM

I understand that they don't take fuel and food prices into account when judging inflation. But if they did, fuel is going at over 100% inflation on an annual basis right now. That alone is something to worry about. A lot.

5/29/2008 12:59:44 AM

*carlface*

5/29/2008 1:11:52 AM

Wow.

I agree with DnL's last post.

5/29/2008 3:18:48 AM

^^^ no... no they do include that. They include all that in inflation. Generally, they look at inflation by looking at a basket of common goods purchased by the average citizen. One of the benchmarks for this is called the consumer price index.

http://www.inflationdata.com/Inflation/Consumer_Price_Index/CurrentCPI.asp

Man that was handy. Google search does wonders sometimes. Anyway, the economy is not fucked. It's actually shown to be quite robust with all the bullshit that's been going on with energy prices and international politics and such. It's not to say that things aren't getting a little tough for the individual consumer, but it's not really getting tough enough for most people that they can't continue to live their lives (they just have to make some changes and make some serious choices about what's important to them). The poor however, are getting fucked. People who were borderline are getting fucked.

5/29/2008 3:43:54 AM

i agree with the entire second paragraph(first paragraph is kinda stating the obvious so i dont want to agree with it like its some new concept ) i kinda view it like this...the more money drug users spend toward gas and food the less money drug users will have to waste on drugs, and therefore our society will be filled with less drug users...it basically makes people not have so much fucking money to waste and actually causes people(oh the horror) to BUDGET...

5/29/2008 3:51:46 AM

Quote :

"I realize most of what you said. But Dow has been eating the costs of oil going up up until this point. They refuse to do that any longer."

I think you misunderstand how capitalism works. DOW is not a charity, they do not avoid price increases because they are being nice; they do it because they fear losing market share to their competitors. Now, for whatever reason DOW believes it can finally make such large price increases stick through the use of the news media to induce their competitors follow suit given enough warning. In other words, DOW is using rising oil prices as an excuse to create an implicit cartel with its competitors to make a sudden jump in prices stick. It is a good idea, profits are made in such ways.

Quote :

"It just seems like the economy is on its last leg already with gas being so high and this could provide the kick it needs to make it all come crashing down."

It seems like that to you because that is what you want to believe. In reality, we are not even sure the U.S. is going to have a recession. As such, I can only assume your "it all come crashing down" scenario is just another recession like all the others that occur in a free economy from time to time. Recessions may suck, but only relatively; the benefits of capitalism do not go away during a recession. Only a small fraction of us lose our jobs, and even those that do get unemployment benefits. Overall, they are no big deal: a year or two of uncertainty and then comes recovery and prosperity again.

5/29/2008 9:07:42 AM

because america will last forever

5/29/2008 11:07:46 AM

Quote :

"Mindstorm: They include all that [food, gas] in inflation."

In core inflation?

You know...the figure bandied out whenever figures are released? The one included in all official economic data?

5/29/2008 12:25:15 PM

Right now I would peg the increase in oil over the last year more to speculation/need for a "safe haven" to put investments than to supply & demand issues, although both are influencing it, as is a weak dollar.

The outcome I expect/predict will be for:
1) demand for oil will wane in the face of higher costs and weakening global economies
2) the dollar will strengthen (most of the rest of the world is more or less in the same economic boat as the U.S, especially Europe),
3) the mass wave of new institutional investors into commodities will large move out/move on
4) the price will more or less plummet in the short-term, probably to about 75-80% of what the actual price should be (my guess, $60 barrel as a bottom), and then the price will edge upwards from there.

I would expect a PR backlash against peak oil when the prices drop, although that will be overdone, just as the expectation for continued hockey stick increases in prices is overdone now.

5/29/2008 12:44:07 PM

^^^^personally i dont think we are gonna hit the technical definition of recession at all...once i saw first quarter gdp was STILL positive after pretty much the neverending flow of negative news from the media, i was like well damn the economy cant be THAT bad

\/ i dont think they are going to sell less product...if they do it will be marginal at best as they supply so many companies, these companies are not going to just not use what they need....in addition, its not like its just DOW raising prices...now that DOW did they ALL will

[Edited on May 29, 2008 at 1:22 PM. Reason : .]

5/29/2008 12:55:34 PM

Quote :

"I think you misunderstand how capitalism works. DOW is not a charity, they do not avoid price increases because they are being nice; they do it because they fear losing market share to their competitors. Now, for whatever reason DOW believes it can finally make such large price increases stick through the use of the news media to induce their competitors follow suit given enough warning. In other words, DOW is using rising oil prices as an excuse to create an implicit cartel with its competitors to make a sudden jump in prices stick. It is a good idea, profits are made in such ways."

Dude, that's exactly why I said that before now Dow had been eating the costs (aka, not passing it on to the consumer). I understand very well how capitalism works. Literally the very first thing I thought when I read that article was, "hey, they don't really want to do this because it's going to make them sell less product but they have to or else they're going to lost money."

5/29/2008 1:18:40 PM

DOW would not be the first company in history that lost money. If their attempt to organize an implicit cartel fails and their customers simply flee to other suppliers then that is exactly where they will be, losing money. They don't shut down, they will simply re-lower their prices and carry on praying for better days when either their customers or their suppliers are more desperate. The fact is, if DOW could have raised prices before now they would have; and just because oil prices fall does not mean DOW will lower its prices. The two markets are only indirectly linked through wallstreet (bankruptcy and new-entrants).

5/29/2008 4:28:21 PM

No, they're directly linked because Dow requires oil to make lots of their products. That market directly affects how Dow can do business in the plastic and petroleum based chemicals market.

5/29/2008 4:34:00 PM

if they are directly linked then DOW will never ever lose money. That we know DOW has and will lose operate at a loss then we are forced to admit oil prices can move without plastic prices following suit, and vise versa.

5/29/2008 11:54:10 PM

^ wat?

5/30/2008 1:30:27 AM

hes basically telling you why you are wrong; sounds like he is saying if they are directly related, every small increase in oil will lead to a small increase in the cost of plastics(which is why he says they would never lose money under your situation, because they would constantly recover the cost of increasing oil), which is not what happens....as you stated, oil has doubled in price over the past year, and plastics haven't...with DOW being the main player in the plastics/petroleum products market, them raising prices doesnt mean they are going to sell less product...because most of the other smaller players will up their prices as well...if they dont, the demand for their product will rise, and with rising demand comes (surprise) higher prices, so either way the market corrects itself

idk i'm not an economist or anything but thats what i got out of his last couple of posts...in addition, dont you think if the prices of pretty much everything "literally went up 20%"...dont you think consumers and the media would be flipping out???

5/30/2008 4:08:40 AM

Well, that's what I've been trying to tell you people from the beginning of the article. They haven't been raising their prices at all lately. They've been eating the costs and losing profit. Now they're done with that and they're going to raise prices. If you had read the article it says that all the other companies raise prices on an individual basis, but Dow makes such a wide variety of products that they just balance it all out across all their products. But now all those products are going to be 20% more expensive. Read the article.

5/30/2008 11:56:51 AM

we did and we have told you what that means, and it does not mean what you think it does. Read what we have written.

5/30/2008 2:21:47 PM

^^whatchu talkin bout "you people" lol

5/30/2008 6:45:48 PM

Oil is a key input to Dow. Oil goes up 100% and Dow increases their prices only 20%.

Dow products are key inputs to some businesses/consumers and not such key inputs for others. If the cost of an input that may or may not be key to a business goes up by 20% then it is ridiculous to think all of that will be passed along to the consumer. I'd hesitate to say DOW products are completely inelastic. This isn't oxygen we're talking about.

The news of DOW products going up isn't that much of a net difference in the economy. It even says in the article DOW has been a shock absorber for the energy crisis. They are just passing along part of the increase.

5/31/2008 9:07:21 AM

tell your democratic congress to stop blocking drilling for oil. that would gauranteed drop the price even in the short term b/c of all the damn speculation


oh well. you're right. if you don't get rid of the plug in the wall (the damn democrats blocking any progress) we might avoid a recession.

6/6/2008 5:14:37 PM

largest single-month unemployment rise since the mid-1980s this past month. also largest rise in oil prices in a single day today.

6/6/2008 5:19:55 PM

You can blame Israel for that one (oil prices)

One idiot shoots off his mouth and oil jumps $10 in a single day.


Thanks a lot, Asshole.

6/6/2008 5:52:28 PM

Quote :

"One idiot shoots off his mouth"

wait, who? srsly want to know

if we'd fuckin start drilling this shit would end.

[Edited on June 6, 2008 at 9:33 PM. Reason : ]

6/6/2008 9:33:25 PM

Quote :

"Prices shot higher on Friday after comments that an Israeli attack on Iranian nuclear sites looks 'unavoidable' from one of Prime Minister Ehud Olmert's deputies. Speculation has mounted in recent weeks that Israel could be planning a pre-emptive strike against Iran due to its refusal to bow to Western pressure to abandon uranium enrichment projects, which could be used to make nuclear weapons. 'If Iran continues with its programme for developing nuclear weapons, we will attack it. The sanctions are ineffective,' Transport Minister Shaul Mofaz told the Yedioth Ahronoth newspaper. 'Attacking Iran, in order to stop its nuclear plans, will be unavoidable,' said the former army chief who has also been defence minister. Any attack on Iran would likely see the Islamic regime retaliate by witholding crude exports and targeting key oil transport routes in the Straits of Hormuz -- where some 30 percent of global crude supplies pass through, analysts said. 'The reports of the Israeli comments have seen a huge spike in oil prices,' said Bank of Ireland (nyse: IRE - news - people ) analyst Paul Harris, though he argued any Israeli attack remained a remote possibility. 'Any attack would have to be sanctioned by the U.S. and they are facing political pressure already because of the gas prices topping $4 a gallon. A move against Iran would see that push through $5 a gallon, which is politically unviable with the election coming up.' "

http://www.forbes.com/afxnewslimited/feeds/afx/2008/06/06/afx5089523.html

6/6/2008 9:48:40 PM

God Damn. if they attack iran i'll fuckin go apeshit. they have no right to go in there.

[Edited on June 6, 2008 at 10:26 PM. Reason : v]

6/6/2008 10:26:39 PM