GM bankruptcy!

[GTAHVIT]

Originally Posted by stovt001

Speak for yourself. Only people who don't know what oil futures are think that would help. Let me give everyone a brief overview of the process: when an investor ("speculator") buys an oil future they are essentially betting on what direction the value of oil will go from the time they buy the future to the time the future matures. The future matures when it is sold from the investor to someone who takes delivery of the oil (refineries, etc). By buying a future, the investor is betting the price of oil will go up. By not buying the future immediately, the refinery is betting the price will go down. Because the investor takes possession of no oil, they cannot take it off the market and therefore they have no impact on the price. So if oil costs $130 a barrel now, and their future matures in 1 month, and in 1 month oil costs $135 a barrel, they earn money at the expense of the people who didn't buy earlier. If the price goes down, they lose to the people who held off. Yes they do benefit from rising oil prices, but they don't cause rising oil profits. This is not a case of post hoc ergo propter hoc and that is the real misunderstanding. For reference consider the onion market. They have no futures because it was falsely believed that futures were raising the price. Laws were passed banning onion futures, and recently onion prices have risen faster than oil prices. Another way to think of it (though this is a weak analogy) is like stock in a company- by buying stock you are not raising the revenue of that company, but instead are betting that revenue will increase (or whatever other factor causes the stock price to rise).

Also to the people who say innovation is good, but we should demand unfairly cheap oil in the meantime, my argument is that we haven't made much energy progress in the past few decades because gas was so artificially cheap. If gas dropped to $1 a gallon tomorrow (heck even $3 a gallon) would anyone care about alternative fuels, efficiency, or any of that? Heck no. The Volt would be scrapped, the genius pioneers working to create new, clean, sustainable energy mediums would be sent to the poor house, and our freeways would be jammed solid with soccer moms and lone commuters driving Hummer H12s the size of extra-wide semis. Then gas would creep back up to market levels again, and all the sheep would be screaming bloody murder and we'll repeat this whole idiotic process all over again. Or we could just deal with a few uncomfortable years, make reasonable adaptations, and then reap the rewards of our new smarter energy projects, sustaining us on a much more long-term basis.

AWSOME post. I sent a letter to both senators here in florida. And one of them replied with the quoted email. No I personally think he is off his rocker and is in no way moving our country towards energy independance but I thought his point on regulating the price of oil was interesting. In reality I think he is full of crap but I don't know enough about the oil futures/commodities market to dispute his plan. Please respond with your thoughts...

Thanks!

... To lower gas prices now by an estimated 25 to 50 percent, we must reign in the real culprits: speculators who are able, because of legal loopholes, to bid up the price of oil to unrealistic and shocking highs. Oil now costs about $140 per barrel, but recent congressional testimony from a leading industry executive showed that the price of crude should only be $55 per barrel given the laws of supply and demand. That means gas prices should be about $2.28 a gallon-- not more than $4.

This is why I have introduced legislation-- S. 3134-- that would ban unregulated speculative trading in oil futures. If Congress will pass this bill, we can bring gas prices back down to earth....

Americans are being gouged, and now is not the time to allow the administration to give away the store before it leaves office. It's time to do what's really necessary to lower the price of gas: reign in profiteers and speculators. I hope you will be able to support passage of S. 3134. Should you have any questions, please do not hesitate to contact my office again.

He made some other statments about how we don't need to expand drilling. If you want the entire email I will post it. But I've been able to contradict his other statements. I don't completely understand how he can regulate futures in a global market???

[The_Blur]

You cannot stop speculation. This is ridiculous. Speculators in this country will call their friends in another country and speculate there instead when we shut them down. In effect, Americans will miss out on the potential economic gains of speculation while foreigners get all the dough from it. Over time, a successful policy of shutting down American speculation would weaken the US economy. Most of the time, speculation is a good thing for the economy. Now you want to shut it down because they want to make a buck betting on something you don't like. Well I want to shut down the police department because I got a ticket but that isn't going to happen either.

On a side note, speculators do not control the price of oil. Companies do based on the speculation. Mr. Billy Speculator does not have direct price control over all of the major oil companies, so don't blame Mr. Bill Speculator when it costs you more to fill up your car. Blame Exxon, Shell, BP, and all of your other favorite wallet-robbing oil companies.

[GTAHVIT]

Originally Posted by The_Blur

You cannot stop speculation. This is ridiculous. Speculators in this country will call their friends in another country and speculate there instead when we shut them down. In effect, Americans will miss out on the potential economic gains of speculation while foreigners get all the dough from it. Over time, a successful policy of shutting down American speculation would weaken the US economy. Most of the time, speculation is a good thing for the economy. Now you want to shut it down because they want to make a buck betting on something you don't like. Well I want to shut down the police department because I got a ticket but that isn't going to happen either.

That's how I felt about speculation. Seems like the senator is talking out of his butt.

Originally Posted by The_Blur

On a side note, speculators do not control the price of oil. Companies do based on the speculation. Mr. Billy Speculator does not have direct price control over all of the major oil companies, so don't blame Mr. Bill Speculator when it costs you more to fill up your car. Blame Exxon, Shell, BP, and all of your other favorite wallet-robbing oil companies.

This conversation we've had already. All I'll say is: The oil companies make 4% profit on a gallon of gas while the government makes a minimum of 16% on a gallon of gas....... Who's ripping us off???

[The_Blur]

Originally Posted by gtahvit

That's how I felt about speculation. Seems like the senator is talking out of his butt.



This conversation we've had already. All I'll say is: The oil companies make 4% profit on a gallon of gas while the government makes a minimum of 16% on a gallon of gas....... Who's ripping us off???

A lot of Senators talk out of their butts. In studying politics, I've learned more about talking butts than anyone. It's good to see some consensus here. And the government does make way too much on gas.

[GTAHVIT]

^

[ROE]

THE WORD IS THAT BUICK AND PONTIAC ARE THE NEXT TO GO?????????

CHEV AND CADI WILL BE THE ONLY ONE LEFT FOR GM

[boxmonkeyracing]

Originally Posted by ROE

CHEV AND CADI WILL BE THE ONLY ONE LEFT FOR GM

from what I understand pontiac isn't doing half bad compared to buick. and what about GMC? I like the whole GMC thing but it's kind of redundant for the work force. they generally are a few hundred more then a chevy and aimed solely at companies. . .

[Mr. Wyndham]

The official word is that Hummer is the only brand under formal review.
No others are planned to be cut.

GM, which has eight brands, announced last month that it was reviewing Hummer for possible sale. The company on Monday denied that other nameplates are under review.
Link

[stovt001]

Hummer is the only one officially acknowledged to be under review. Given that there are very few stand alone GMC dealers (if any) and that their entire product line is redundant and truck based, I would be completely flabbergasted if GM kept it alive for more than a few years. Pontiac is doing surprisingly well so I still think it is safe. Whether it gets the products it deserves is another story. Buick is not doing well now, but its future product lineup is so promising I would hate to see it go. I hope GM keeps the life support on a little longer. Seeing how Saturn has completely turned from its mission to build innovative, absolutely unique cars, competes directly with Chevy, and hasn't ever turned a profit, I'd love to see it go, but since many of its dealers are stand-alone I doubt it would happen.

[DGthe3]

Originally Posted by ROE

THE WORD IS THAT BUICK AND PONTIAC ARE THE NEXT TO GO?????????

CHEV AND CADI WILL BE THE ONLY ONE LEFT FOR GM

Not even close my friend. Even if you meant the only two left, after Hummer, Pontiac, and Buick disappear.

There is also:
Saturn
Saab
GMC
Daewoo
Opel
Vauxhaul
Holden

[PA FAST]

If I was GM I would go down to 4 brands in North America:

Chevy: Everyman's economy cars, mid-larger cars, trucks, suv's.
Buick: Near luxury cars, and crossover suv's. A Lexus/Acura Competitor.
Pontiac: Affordable Performance, RWD/AWD cars, 4,6,8 cylinders, super/turbo chargers.
Cadillac: Full out luxury vehicles. The best.

As for people who still want a GMC, offer a GMC Denali trim on the trucks/suv's Chevy sells. Then GM might save a ton of money trying to develop vehicles, and they can get totally away from rebadging.

Suggestions?

[stovt001]

Originally Posted by PA FAST

If I was GM I would go down to 4 brands in North America:

Chevy: Everyman's economy cars, mid-larger cars, trucks, suv's.
Buick: Near luxury cars, and crossover suv's. A Lexus/Acura Competitor.
Pontiac: Affordable Performance, RWD/AWD cars, 4,6,8 cylinders, super/turbo chargers.
Cadillac: Full out luxury vehicles. The best.

As for people who still want a GMC, offer a GMC Denali trim on the trucks/suv's Chevy sells. Then GM might save a ton of money trying to develop vehicles, and they can get totally away from rebadging.

Suggestions?

That is exactly what they need to do if they could. Sadly franchise rules make life hard for GM.

[PA FAST]

Originally Posted by stovt001

That is exactly what they need to do if they could. Sadly franchise rules make life hard for GM.

Right now thats the case, but if worse came to worse and GM went chapter 11 could they trim the excess brands and come back with just 3-4 brands?

[stovt001]

Yup they probably could. Hopefully it won't come to that and conditions will allow them to peacefully and quietly kill off excess brands. The good news for GM is that more and more dealerships are multi-brand dealerships, making it easier to kill a brand without totally killing a dealership.