Excessive Spending - Investment Exceeds Earnings

The American Petroleum Institute has run a full page ad showing a graph that compares oil industry investment versus "earnings" since 1992.

This ad shows that investments exceeded "earnings" in most years... except for 2004. 2005 is not shown.

The basic question here is what is meant by the term "earnings". Is that gross revenue, gross profit, net profit... what? Most people may not know that the term means:

The net income of a company during a specific period. Generally, but not necessarily, referring to after-tax income.

Notes:

Earnings are perhaps the single most studied number in a company's financial statements. They show how profitable a company is.

See also: Bottom Line, Core Earnings, Earnings Estimate, Earnings Surprises, EBITDA, Earnings Per Share (EPS), Net Income

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So, it is not surprising that "earnings" are less than investment. In fact, it is astounding that "earnings" exceed investment. The automobile industry invests billions of dollars to earn millions. So the oil industry seems pretty lucrative by comparison.

Exxon's return on investment (ROI) is about 32%; GM and Ford are about 0%; Toyota is about 5-1/4%. THAT should put things into a little better perspective. (Source: www.money.cnn.com).

ROI=((Benefits-Costs)/Costs)*100%
for example: Earnings of 500, Cost of 5000 gives a 10% return

Excessive Spending - Cost of Gasoline

Back on September 21, 2005 (and a few other times) I wrote about the issue of the state sales tax on gasoline and how the State of Michigan really had no incentive to see the price of gasoline decrease.

In The Detroit News today, there was an editorial about the subject:

Fuel prices rise and fall according to supply and demand. There's not a shred of evidence that price increases reflect anything other than that age-old dynamic.

But if state lawmakers want to give Michigan motorists a break, they have the power to do so by suspending, modifying or eliminating the state sales tax on gasoline.

We're generally not in favor of tinkering with taxes in reaction to commodity prices because the chase becomes an endless game. But if lawmakers are worried, they have options beyond petitioning Washington, a tinker-toy scheme proposed by the governor.

The femeral artery is cut... get the iodine!

Come on guys, nothing has changed since September when I wrote:

Let's see, here's the math:

• 15 gallons @ $3.00 per gallon is $45.00
• eliminate the sales tax and save $2.70
• eliminate the poor signal progression and make that 15-gallon purchase a 12 gallon purchase for the same distance traveled and save $9.00

Okay, let's not solve the problem; let's cut tax revenue for schools.

Gosh, and I thought our government didn't understand.

Okay, maybe it doesn't....

Happy Easter

Christians will celebrate the resurrection of Jesus from the dead today. Some truly believe that; others believe something happened, but they are not sure; still others don't really believe Jesus physically rose from the dead, but his spirit lives on in his followers. Despite the differences, the impact of Jesus' life continues to be profound for both believers and non-believers.

Easter may be secularized with chocolate bunnies and egg hunts, but the message is clear: the human spirit, the soul, is unbounded by death. Love does not die, but lives on.

Happy Passover

My youngest son is celebrating his first Passover Seder dinner with the family of his girl friend.

He was raised in a non-religious family but with many of the Christian traditions, so this is a new experience for him. I hope all goes well. He read up on the Passover so that he could be a good guest and show respect. I'm proud of his effort.

Ethnic Divisiveness - Power or Prayer?

Several times, I have commented that Islam (as practiced in some countries) is not too dissimilar from Christianity as practiced in Europe about 700 years ago. My son made the same observation recently. It's as if there is a natural progression regarding mass belief systems:

1. Revelation - a "new truth" is revealed to a "prophet"
   
2. Conversion - new followers spread the "new truth"
   
3. Persecution - existing powers are threatened by the growth of the "new truth" and attempt to eliminate the followers causing the followers to rally around their "new truth"
   
4. Adoption - the old powers reach an accommodation with the "new truth" by adopting it and adapting it
   
5. Growth - rapid expansion of the "new truth"; however, many followers are in name only
   
6. Corruption - the "new truth" becomes secularized and gains ascendency in political power which it focuses on rather than the original message of the "new truth"
7. Regrouping - the followers of the "new truth" become so fragmented that political power is disrupted and lost, forcing the followers back to a formalized approximation of the original followers
8. Secularization - the "new truth" becomes the "tradition" of the secular society, but without most of the original energy or importance to the followers; there is a "place" for the "new truth" in ritualized gatherings, but the secular society is the focus of the followers.
   

Islam is somewhere between stage 6 and 7. Christianity is well into stage 8. Judaism achieved a much more restricted period of power and a small geography because it was sandwiched between the Egyptians and Romans. It has jumped back and forth between stages 3 and 8 and that may be why it has endured as both a faith and social structure so long.

Ethnic Divisiveness - Law or Lawless?

Thousands demonstrate in support of ... I'm not sure.

From GIOVANNA DELL'ORTO, Associated Press Writer

"People of the world, we have come to say this is our moment," said Rev. James Orange of the Georgia Coalition for the People's Agenda in Atlanta, where police estimated that at least 50,000 people marched Monday morning.

At the Mississippi Capitol, 500 demonstrators sang "We Shall Overcome" in Spanish. In Pittsburgh, protesters gathered outside Sen. Arlen Specter (news, bio, voting record)'s office to make their voices heard as Congress considers immigration reforms.

Groups in North Carolina and Dallas called for an economic boycott by immigrants to show their financial impact.

So what's this about?

• Unfair immigration laws that make immigrants actually go through a legal process?
• Borders... you know, their existence?
• Deportations for those who don't follow immigration law?
• Not having the right to vote because you're an illegal alien?
• Not being eligible for free social services?
  

Does this apply to Canadians? (of course not)

West Wing Ending

Now that the final season of West Wing is drawing to a close, do you wonder if NBC will attempt a spin-off?

How about Southwest Wing?

Excessive Spending - The Big Picture

Reserve Chairman, Ben Bernanke, is focusing on the big picture as he raising the prime interest rates. That, despite the concerns that some have expressed.

Well, Mr. Chairman, sometimes the economy that is growing too fast which you see in the "big picture"

















Isn't what you see on closer inspection.

Excessive Spending - Down and Out

In response to yesterday's post regarding interest rates and the economy in Michigan, one of my friends suggested reading this article.

In response to that article, I suggest that all read this article.

As I have told my sons, "Nothing is ever as simple as it first seems."

When the rich are regrouping, imaging what is happening to the rest of the people in the area. Mr. Bernanke? Mr. Poole?

Letter sent to the Federal Reserve

As a 33-year resident of Michigan, I have seen economic cycles come and go. This one is different. There is a structural dislocation occurring in Michigan (and probably Ohio) that is being exacerbated by the actions of the Federal Reserve.

Ben Bernanke is focusing on how he has to take action to keep inflation in check. Rather than raise the prime rate and make everything more expensive here, Michigan businesses need to have a lowered borrowing rate. It's time to declare Michigan a disaster area and treated as such by the Federal Reserve.

One size does not fit all. I suggest that the members of the board re-acquaint themselves with the basic economic data of Michigan before dismissing this suggestion. Inflation is not the concern here; survival is.

Fake Fossil Used by Evolutionists

The New York Times reported that a fish fossil has been discovered that is supposed to be the long- sought "missing link" between sea and land animals.

Well....

It's obvious that this so-called "fossil" is a fake. These so-called "scientists" took a crocodile head and front legs and stuck them on the body of a catfish and called it a "missing link." Well... anybody can do that. A bunch of kids I knew once made a "pig that flew" by sticking a pig's head on a goose's body. Man, that didn't fly!

It's time these liberal, commie newspapers stopped trying to undermine the traditional values of our society. We need to repeal the 1st Amendment! It's time we have Biblical Law!!! Stone the bastards.