Friday, April 28, 2006

For what it's worth

Examples of global gasoline prices per gallon and in dollar terms as of April 10: Germany, $5.60; U.K., $6.43; France, $5.80; and U.S., $2.88. (Japan was $4.30 one year ago and is likely in the $5-6 range today). Countries with gasoline prices significantly below(50% below) the U.S. are Saudi Arabia, Kuwait, Indonesia, and Venezuela among other oil producers.

Exxon Mobil's(XOM) ten year stock performance has appreciation of 210%: versus the S&P of 112%; Russell 2000 130%; technology 210%; oil and gas composite 230%,; and broker/dealers 1100%.
So Exxon Mobil, in a vital commodity, has performed on average in the stock market slightly below the level of its industry, at the level of aggregate technology over ten years, and radically below the results of the financiers who don't do the heavy lifting that keeps this country from European prices for gasoline.

This windfall profits rhetoric by the politicians is misguided and dangerous pandering for attention. Apple Computer had a huge year. So let's take some of their profits away because our teens were listening to their I-Pods in class(just joking, I must say, in case a member of congress or one of their minions reads this). Let's take companies that have long term perspectives and finally get their day and penalize them. Free enterprise? Capitalism? Oil company margins are the same over many years. We want them to take their profits and plow them back into research and development don't we.

Nigeria has civil unrest, Iran is bellicose, Iraq is in disarray, Venezuela is a dictatorship, Katrina disabled production and refineries, China and India's demand for energy grows and SUV's still rule the roads in America. Who do the politicians and the New York Times focus on when it comes to high oil prices? Exxon Mobil, it makes money, now that's an easy target.


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