Prices.... Going Up!!!

[invaderzim]

Its always some lame excuse as to why prices are going up, the most accurate explanation is always the same...GREED. Here is how much profit the top 5 oil companies made last year..... Saudi Aramco $110 BILLION, PetroChina $106 BILLION, China Petroleum & Chem $103 BILLION, Exxon $20 Billion,, TotalEnergies $16 Billion.

The greed this year is getting worse, Saudi Aramco made $40 billion in the 1st quarter of this year and these other companies have made over $100 billion combined in first quarter of this year which doesnt even include the Chinese and Russian held companies. https://www.theguardian.com/business/2022/may/13/oil-gas-producers-first-quarter-2022-profits

Well, when you are the crack dealer, and everyone is addicted to crack, you get to charge what you want. Especially when one of your big addicts decide that they should make less of their own and then act confused as to why they price is going up.

 

[hjames]

Saw this graphic the other day as a sign of the ongoing greed ...
Its the kind of thing that would make you pretty angry ...



I did a quick search a few minutes ago and have hit these numbers with links to the corporate sites ..

Not sure what the Exxon/Mobile disparity is - deeper search would indicate why

ExxonMobil - IRVING, Texas – April 29, 2022 – Exxon Mobil Corporation today announced estimated first-quarter 2022 earnings of $5.5 billion, or $1.28 per share assuming dilution. First-quarter results included an unfavorable identified item of $3.4 billion associated with our planned exit from Russia Sakhalin-1, or $0.79 per share assuming dilution. First-quarter capital and exploration expenditures were $4.9 billion.
https://corporate.exxonmobil.com/Ne...xonMobil-announces-first-quarter-2022-results

Shell - In its earnings report for the first quarter of 2022, Shell reported a net income of $9.13 billion—nearly triple of the $3.2 billion reported in the same quarter last year—beating out its previous record from 2008.
Forbes: https://www.forbes.com/sites/siladi...uarterly-profit-as-oil-and-gas-prices-surged/

BP - Underlying replacement cost profit* was $6.2 billion, compared with $4.1 billion for the previous quarter. This was driven by exceptional oil and gas trading, higher oil realizations and a stronger refining result, partly offset by the absence of Rosneft from the first quarter underlying result.
https://www.bp.com/en/global/corpor...ress-releases/first-quarter-2022-results.html

CHEVRON - San Ramon, Calif., April 29, 2022 – Chevron Corporation (NYSE: CVX) today reported earnings of $6.3 billion ($3.22 per share - diluted) for first quarter 2022, compared with $1.4 billion ($0.72 per share - diluted) in first quarter 2021. Included in the current quarter were pension settlement costs of $66 million. Foreign currency effects decreased earnings by $218 million. Adjusted earnings of $6.5 billion ($3.36 per share - diluted) in first quarter 2022 compares to adjusted earnings of $1.7 billion ($0.90 per share - diluted) in first quarter 2021. Sales and other operating revenues in first quarter 2022 were $52 billion, compared to $31 billion in the year-ago period.
https://www.chevron.com/newsroom/2022/q2/chevron-announces-1q-2022-results

ConocoPhilips - HOUSTON – ConocoPhillips (NYSE: COP) today reported first-quarter 2022 earnings of $5.8 billion, or $4.39 per share, compared with first-quarter 2021 earnings of $1.0 billion, or $0.75 per share. Excluding special items, first-quarter 2022 adjusted earnings were $4.3 billion, or $3.27 per share, compared with first-quarter 2021 adjusted earnings of $0.9 billion, or $0.69 per share. Special items for the current quarter were primarily comprised of a tax benefit related to closure of an audit, a gain associated with the Indonesia divestiture and a gain on Cenovus Energy (CVE) equity.
https://www.conocophillips.com/news...end-and-variable-return-of-cash-distribution/

 

[Jeffery]

Saw this graphic the other day as a sign of the ongoing greed ...
Its the kind of thing that would make you pretty angry ...

Yeah, not sure why they'd make up numbers to put in their handy graphic.

https://corporate.exxonmobil.com/Ne...xonMobil-announces-first-quarter-2022-results

FWIW, American taxpayers just shunted considerably more money than the total of that graphic away without even getting a receipt for what it was to be spent on.

 

[quiet]

Lumber is dropping. 2x4 is down to 4.99 here from 9.99. OSB 24.99 from 52.99. I don't think the price of a house will drop though.
And gas is 4.29.

 

[Mystic]

Lumber is dropping. 2x4 is down to 4.99 here from 9.99. OSB 24.99 from 52.99. I don't think the price of a house will drop though.

The construction boom of corona-times is seemingly winding down, @ least insofar as new residential housing and (especially) new commercial structre construction goes. This translates into fewer units on the market, which would usually support prices @ present level or even exert upward movement. However, coinciding as it is w/ advancing overall price inflation, wage stagnation, and upward movement of mortgage interest loan rates, the cost of housing will sag. Evidence of this is well supported by yesterday's actions by the so-called REAL ESTATE TECH sector firms, especially among the Big Four in the sector, i.e., Redfin, Compass, Opendoor, and Zillow -- two of which announced significant staffing layoffs and all four of which witnessed share values plummet to all-time low PPS. I'll gin up a piece replete w/ graphics on the collapse of the REAL ESTATE TECH sector later today.

PS: and none of this ^^^ factors in the impact that a genuine recession will exert on all markets, including RE, by Q1 2023. But that, too, is for a later analysis.

 

[Mystic]

France's (up till now) "good luck" w/ inflationary tendencies has seemingly run out.

Per yesterday's official report compiled and released by Insee France (https://www.insee.fr/fr/accueil),
the rate of YoY (i.e., annual) inflation rate in France was confirmed at 5.2% in May 2022, the highest level since September 1985, and compared to 4.8% in April 2022. Cause attributed to the following:

- increase cost in NRG overall (+27.8%)
- increase cost re: all petroleum products (+36.7%)
- increase cost re: fuels i.e., diesel (+35.2%) and gasoline (+24.2%)
- increase cost of natural gas (+55.0%)
- increase costs of services (+3.2%)
- increase cost of manufactured goods (+3.0%)
- increase cost of food (+4.2%)

Anything re: goods and/or services that did not increase between April and May 2022? Only this:

- decrease cost of electricity (6.5%, down -- slightly -- from April's 6.9%)

Overall impact on the state's economy: Consumer Price Index rose by 0.7% ...

Bad as this ^^^ looks, it looks a LOT better than the economic data emerging from neighboring states, e.g., Germany, Luxembourg, Belgium, Holland (Netherlands), as well as the (1) EU-member Zone and (2) European Area (inlcuding United Kingdom and the states of Eastern Europe).

 

[Mystic]

Saw this graphic the other day as a sign of the ongoing greed ...
Its the kind of thing that would make you pretty angry ...

View attachment 2592671

Yeah, angry to say the least.

Here's the PPS story for these five Big Oil players (presented in alpha order) since May 2021, i.e., YoY, as of 14 JUNE 2022 @ 3:43AM EASTERN TIME:







Sources: S&P 500 / FTSE 100

Note that the two top-performing firms in the Petroleum Sector, YoY, are:


Source: S&P 500

In the past week's blood-letting across bourses worldwide, only CONOCO-PHILLIPS saw a PPS decline among these players, but given a YoY increase in PPS of 82.26, I imagine "CP" will weather the decline valiantly.

PS: Your comment about BP, i.e., "the absence of Rosneft from the first quarter underlying result" is evident in BP's PPS increase, YoY, of "only" 30.73%, the lowest among the big players cited above.

 

[Mystic]

Saw this graphic the other day as a sign of the ongoing greed ...
Its the kind of thing that would make you pretty angry ...
View attachment 2592671

Unless, of course one, as an investor, happens to hold a significantly large stake in (1) this sector and especially (2) these firms. Members of my immediate family -- myself not included -- still residing in USA Inc made a killing re: their financial positions @ ExxonMobil and Royal Dutch Shell over the last 12 months. I reckon that they, despite the direct contribution to -- and thus overall negative impact on the world economy -- near record-high producer and consumer inflation of their petroleum investments, are not angry but rather elated.

 

[Mystic]

I don't think the price of a house will drop though.

PS: Before I go into the REAL ESTATE TECH sector deal, a quick reply re: house prices declining.

Last night I chatted w/ my cousin and his wife, who manage a prominent RE brokerage in San Francsico (CA). Asked about this, they told me that the market in SF proper and SFBA generally is, for residential properites, turning downward faster than anyone (there) had expected. The commercial sector had apready been decimated by the VIRUS deal, but residential values actually strengthened through the same period, i.e., January 2020 to around mid December 2021. But starting in approximately mid December 2021, the wheels started coming loose on the residential property wagon. @ their own "practice" they have, on their advice or demands of their clients, routinely reduced asking prices for existing residential properties both in the city and in adjacent communities by, on average, six figures. In fact, only yesterday they reduced, per a client demand, the asking price of a unit by ~ 20% (from $2.4M to $1.92M).

But that's in NoCal.

Their practice in SoCal (offices in Santa Monica, Anaheim and Torrance) reports prices holding up a bit better, w/ reductions just starting to hit the market but modest levels, say 5-8% range. Will it stay that way or trend to where NoCal is @ this time?

We'll see.

 

[Mystic]

Price Going Up (even more): Natural Gas @ The European Area

Overnight, @ the European Area trading centers, on the news that Russian federation will immediately reduce by 40% and, in time, as much as 60%, the volume of Natural Gas piped to Germany, the price of NG @ both the UK Index and the (EU) Title Transfer Facility (TTF) Index surged:

NATURAL GAS - UK (GBp) - 16 JUNE 2022 @ 4:38AM EASTERN TIME



Comment:

The cost of UK natural gas futures surged towards the 300-pence-a-therm mark, a level not seen in two months, following news that (1) supply from Gazprom (Russian Federation) to Germany via Nordstream I will be immediately reduced by 40% and eventually up to 60% and (2) the damaged LNG export terminal in Texas could remain offline for longer than previously anticipated.

NATURAL GAS - TTF (EURO) - 16 JUNE 2022 @ 4:38AM EASTERN TIME



Comment:

Gas futures linked to TTF soared above the €130-per-megawatt-hour mark. Gazprom (Russian Federation) cut gas supplies to Germany through the key Nord Stream I by 40% with a statement that flow will eventually be cut by as much as 60%. Alternative sources are already tight, given a drop in US capacity to export gas to Europe following an explosion at a key LNG export terminal in Texas.

This persists into autumn~winter, the European Area will -- if it isn't already by then, enter into a full-blown economic recession attended by massive labor force cuts (socialism or not), reductions in the value and number "social recipiency program" benefits transfers, and (likely) more.

NOTE: While it is the case that I chose to move to and reside in France, a fully "EU" member state, my opinion of EU-oriented economic and political management can be neatly summed up as callow, cowardly, effete, myopic, unimaginitive, and remarkably ~ almost willfully ~ subservient. How'd the refrain go in that number by The Sex Pistols? Oh yeah: "No future, no future, no future for you."

 

[Mystic]

Meanwhile back in the USSA... prices (still) going up but consumer spending also up during May 2022

US Bureau of the Census (Census) reported yesterday that Consumer Spending during May 2022 increased Month-over-Month (i.e., since April 2022) by 8.2% ($698B).

Just a couple of drawbacks to this 8.2% increase in consumer spending: Fuel For Vehicles (diesel and gasoline) and Food At Home accounted for more than 60% (i.e., 60.6%) of the increased spending:

Fuel For Vehicles: +48.7%
Food At Home: +11.9%

Regarding the other 39.4% of the pie, consumer spending was up in every category of Goods and Services except these two:

Consumer Electronics & Software: -7.1%
Electronics Products Including TVs: -5.2%

CONSUMER SENTIMENT GOING DOWN

According to the University of Michigan's Consumer Sentiment Survey (CSS), conducted monthly under a contract managed by the St Louis Federal Reserve Bank, consumers, despite sustained record spending (owing largely to huge increase in the cost of fuels for vehicles and groceries), are disgusted with spiralling cost increases, expressed in data collected by the UM CSS during May 2022:

CONSUMER SENTIMENT INDEX (1978 - MAY 2022)

Source: University of Michigan ~ St Louis Federal Reserve : Consumer Sentiment Survey (May 2022)

This is the lowest score @ the CSS since Q2 1980. It is, in fact, even lower than the lowest point in Q2 1980.

 

[Mystic]

My Cousin Laurie just got 69K over asking price on their three story apt house in Fall River Mass

I don't think the price of a house will drop though.

Incuded also in yesterday's report from the US Bureau of the Census are data pertaining to Housing in general and, in the instance presented below, Housing Starts Year-over-Year (YoY), i.e., start of April 2021 through end of April 2022.

First, a general comment (by CENSUS) regarding the content of the report.

Housing starts in the US declined 0.2% mom to an annualized 1.724 million units in April of 2022, after a revised 2.8% drop in March and below market forecasts of 1.765 million. Single-family housing starts dropped 7.3% to 1,100,000 while the rate for units in buildings with five units or more jumped 16.8% to 612,000. Sales fell in the Northeast (-23.2%) and the Midwest (-22%) but rose in the South (10.6%) and the West (3.3%). The housing market is showing signs of cooling as inflation soars, mortgage rates are at 12-year highs, building material costs remain elevated, supply constraints persist and a general economic uncertainty weigh on consumers' affordability.

GRAPHIC REPRESENTATION, HOUSING STARTS, YoY APRIL 2021 - APRIL 2022

Source: US Bureau of the Census (15 June 2022)

@NH-MAN : With house sales -23.2% in the Northeast, I'd say "cousin Laurie" came away rather fortunate. God must be hearing her.

@quiet : In fact the price of houses decreased, substantially, in two of the four regions tracked by the Census Bureau, i.e., a combined decrease of 45.2% in the Northeast and Midwest.

Further, the reported increase of 10.6% in the South is modest at best, and the reported increase of 3.3% is indication of a market that is just "holding on" ... from the viewpoint of economists and real estate investment strategists.

The element of this report I find troubling is the following portion:

Single-family housing starts dropped 7.3% to 1,100,000 while [starts] for .... buildings with five units or more jumped 16.8% to 612,000.

This phenomenon, in my estimation, presages a shift -- perhaps deliberate? -- on the part of community developers away from single-family dwelling units (SFDU) to multiple-family dwelling units (MFDU), i.e., the "Europeanization" of USA's residential communities.

Am I off base to draw such an inference from these data?

We'll see if data collected over next few~several months supports (or not) my hunch.

 

[YY1]

"Big multi-family" has been en vogue around here (semi-rural central FL) for a few years.

There's also been a trend to build them right in the same parcel as minor and even some major shopping developments.

...and almost all of them are chipboard "25 year" construction.


However, single family has picked up even more than those in the past 2-3 years.

There are nine new developments, most advertising "from the low 300's" within 7 miles of my house.

The last development before the boom was "from the 210's" for the same size (roughly 1500 sf) house on the same, dinky (less than .25 acre) lot.

Of those nine, four are just breaking ground and grading with no utilities installed yet.

 

[Mystic]

(ASIDE: My favorite example of PRICES NOT GOING UP: CRYPTO GENERALLY AND BITCOIN SPECIFICALLY)

BITCOIN / USD - YoY JUNE 2021 THROUGH 16 JUNE 2022 @ 7:39AM EASTERN TIME


TRADING FUTURES FORECAST - BITCOIN - Q2 2022 THROUGH Q1 2023



All -- all -- of the big Crypto players are down today and predicted to decline further by Q1 2023.

Some noteworthy examples:




There are several others whose value "per coin" (???) is > One USD, so I did not bother to include them in this table.

Anyway, comparing Current Value to Future Value: By Q1 2023 all are predicted to have declined, most of them substantially -- by 30%-50% -- and a couple dramatically, e.g., BINANCE: 215.5 on 16 June 2022 but predicted to be 13.3 by Q1 2023.

We shall see, we shall see.

 

[Mystic]

"Big multi-family" has been en vogue around here (semi-rural central FL) for a few years.

There's also been a trend to build them right in the same parcel as minor and even some major shopping developments.

...and almost all of them are chipboard "25 year" construction.


However, single family has picked up even more than those in the past 2-3 years.

There are nine new developments, most advertising "from the low 300's" within 7 miles of my house.

The last development before the boom was "from the 210's" for the same size (roughly 1500 sf) house on the same, dinky (less than .25 acre) lot.

Of those nine, four are just breaking ground and grading with no utilities installed yet.

Re: the +10.6% increased starts in the South reported by US Census, I wonder what portion of that 10.6% are "starts" in Florida? And/or Texas?

 

[NH-MAN]

@NH-MAN : With house sales -23.2% in the Northeast, I'd say "cousin Laurie" came away rather fortunate. God must be hearing her.

The reason I don't look at charts or graphs as prices being down here is false, just trying to find an apartment can take a month or more.

 

[Mystic]

The reason I don't look at charts or graphs as prices being down here is false, just trying to find an apartment can take a month or more.

Acceptance of ~ trust in federally-collected data isn't mandatory, but I have come to trust data from two US federal sources, i.e., Bureau of the Census and Bureau of Labor Statistics. Both have proved to be quite reliable and precient over the last 30+ years during which I have been using their datasets.

 

[orsen]

heinz brown beans
used to go on sale 4 cans $5.00
today's price was $3.19 for a 14oz can!

Bush Baked beans are sale priced at $2.00/can

 

[OBMG74]

All -- all -- of the big Crypto players are down today and predicted to decline further by Q1 2023.

It appears Warren Buffet may have been correct.

 

[usedto]

I prefer to be part of the solution instead of the problem. I own two rentals - one residential, and one commercial. Both are rented well under the going rate, and I've turned down better offers. The commercial rental has provisions for slight increase to cover increase in property taxes. The residential lease expired two years ago, and is evergreen now. Military man, school teacher wife, and two small children.

Both tenants are solid as a rock, and glad that I'm not jacking the rent. Hard to find good folks like that.