Wall Street closed up again today despite generally bad economic news but hey the oil companies are doing really swell. Their sector was had quarterly profits rise by 45% to 36 billion. That’s works out to 400 million per day in profits.
Wall Street bankers and hedge funds (that’s where the really wealthy go down to the well) are taking their own separate cut off the top of gasoline. Estimated by Reuters to be at least 50 cents a gallon. Americans use 378 million gallons a day so that’s a cool 189 million in profits every day for the bankers with no real investment or contribution to society of any kind. Oil companies for their part do at least produce oil, don’t mind the occasional spillage disaster or that global warming.
People are outraged that the oil companies are making so much money that even the Orange Speaker of the House is pretending to be concerned. But Wall Street is taking $1.89 in profits for every $4.00 the oil companies are taking and nobody mentions that on the news. And the Reuters estimate is probably low, plus the speculators are using the run up in gas prices to boost the prices in other commodities as well, taking god knows how much profit there. This bubble will burst eventually and prices will fall. Don’t worry about the Wall Street bankers, they make money on the way down too. (that also comes out of your pocket)
Meanwhile the economic damage is starting to have an effect as weekly unemployment claims were up again. The USD set new post crash record lows against other major currencies and gold set a new record as more people continue trying to hedge. But gold could be a bubble too as the Fed plans to end the QE2 on schedule in June and the printing presses will grind to a halt.
Cries of hyperinflation aren’t really supported by these price rises as the rest of the economy continues to sag. Stagnate or falling wages and 20 million jobless are simply to big of a drag on the economy to trigger any real lasting inflation. The extra you pay at the pump is just your lord and master collecting a tax to maintain his lifestyle.
Should the Republicans accidentally get what they claim to want and slash spending the economy would take a turn for the cliff in a matter of months. In the old days out on the prairie, the root cellar in the back yard doubled as a tornado shelter. These days you are increasingly more likely to need a tornado shelter thanks to the damage done to the atmosphere by big oil and it had better be stocked with canned goods thanks to the damage done to the economy by Wall Street bankers. www.prairie2.com