Where's the fuel scare?

[The Goose]

I agree, and earmark the funds for the development of domestically produced green alternates such as wind, solar, hydrogen etc.

Earmarking money for the benefit of the citizens would not sit well with politicians, regardless of their party affiliation. If money moves around, these SOBs believe some or most of it is theirs.

C'mon, Bob - you know that.

 

[frontline]

The company definitely spins these things in a way that benefits HQ relative to us (that's their job, after all) but there is some truth in there, too. Most big airlines are going to lose lots of money this year because they hedged too high (AA included). It's easy to say that was a dumb call now, but when oil was $147 people at Goldman were predicting $200. It's not as easy as it looks.

And with the economy in a major recession, weaker demand is going to offset some of the gains from cheaper oil.

 

[The Goose]

The company definitely spins these things in a way that benefits HQ relative to us (that's their job, after all) but there is some truth in there, too. Most big airlines are going to lose lots of money this year because they hedged too high (AA included). It's easy to say that was a dumb call now, but when oil was $147 people at Goldman were predicting $200. It's not as easy as it looks.

And with the economy in a major recession, weaker demand is going to offset some of the gains from cheaper oil.

You may have believed the spin, but it was rather difficult to stomach the run-up to $147/barrel - there had to have been some shenanigans going on.

It's just as hard to believe to "supply and demand" crap when there was a 60% drop in the price. Did oil usage drop that much that quickly? Rather doubtful.

The major thing that happened was, due to Wall Street's gambling and the sudden disappearance of mortgage bets that had no intrinsic value, the deflation of the USA currency. Look at the dollar's value relative to other currencies in the past few months and you'll see this easily. With Paulson having his printing presses in high gear you would think there would be an inflationary trend - guess what? There ain't one.

The treasury is as busy as a cat covering crap trying to fill the vacuum left in the financial system by those bad bets - those dollars on account were not real but were used in the banking system as assets, the basis of which a bank calculates how much it can have out in loans. With that disappearance of the funny money, every bank involved to any degree in the funky securities was immediately undercapitalized and subject to immediate FDIC seizure. Why else would Paulson and Bush wet themselves trying to recapitalize the banks? Finger pointing, byhaps?

Long rant, but - the run-up in oil pricing due to demand was another in a long list of government lies.

Now, Arpey is whining because he wants the airlines to get some aid also, he says.

 

[FWAAA]

Now, Arpey is whining because he wants the airlines to get some aid also, he says.

Seriously? Why not? Every other capital-intensive business now seems to have its hands out. Perhaps the airlines could split $10 or $20 billion according to market share (how the $5 billion was split post-September 11).

On a related note, this might help explain part of the oil price freefall:

In its short-term outlook released Tuesday, the U.S. Energy Information Administration said it expects global oil consumption to decline by 50,000 barrels a day this year and by 450,000 barrels a day in 2009, well below earlier forecasts on both counts.

Just last month, the EIA projected global consumption to increase by 100,000 barrels a day in 2008 and to remain flat in 2009. Total world consumption is between 85 million and 86 million barrels a day, according to the EIA.

Should the projections prove true, it would mark the first time in three decades that world crude consumption declined in consecutive years, the EIA said.

http://biz.yahoo.com/ap/081209/oil_prices.html

 

[FWAAA]

Now, Arpey is whining because he wants the airlines to get some aid also, he says.

I wouldn't call it "whining:' but others may disagree:

The chief executive of American Airlines says any federal plan to boost the economy should include help for the aviation industry, including more spending on runways and a better air traffic control system, but not necessarily direct aid to the carriers themselves

I tend to agree with him on this one.

Airlines received grants after the 2001 terror attacks, but Arpey ruled out similar help now for major U.S. carriers, all of whom except Southwest Airlines Co. are expected to lose money this year.

Early in 2008, airlines were hammered by fuel prices that peaked at record levels in July. Since then, fuel prices have tumbled but so has the economy, causing air travel to slump.

"We seem to have experienced almost a seamless transition in which our fuel-cost crisis was replaced by a potential air travel-demand crisis," Arpey said. "I would have preferred a little down time between crises."

Life's boring if not full of challenges, Mr Arpey.