Tuesday, April 29, 2008

 

Big Oil Profits Don't Add Up

While my college economics is a bit rusty and possibly outdated, I fail to comprehend the market forces at work in this period of economic turmoil and new record high crude oil prices that continually lead to atypical profit figures for the world's big oil companies.

Is there any other industry that directly benefits from the cost increases of their raw materials? I think not. Typical forces as a result of increases in material cost result in lower margins, at least temporarily before prices can be increased, as concurrently, marginal supply quantities are reduced or dropped off due to the new (higher) cost prohibitions for these supply sources; also driving up prices to a new equilibrium of supply and demand quantities. These higher prices force consumption cutbacks by consumers, investment in alternatives and the like, which add the the pressures of lowering demand - which in turn must (you would think) also effect profits negatively [at least in the short term].

So while I have no specialized insight into the petroleum industry and their ability to "print money" in a logically suppressed economic scenario, I still am troubled by how - even logically this increase in raw material cost, not only has no ill effects, but that it results in the opposite anticipated effect. Additionally I would love to be able to apply this "inverse cost effect" to other industries, there's a fortune to be had in consulting fees alone.

So let us over simplify the model; at $3 a gallon, let's assume that $1 a gallon is material and $1 a gallon is processing and overhead, for a net profit $1 (way over simplification, but hang with me). If my material cost instantly go up to $1.25 and my processing and overhead remains the same - they have some variable cost here, but not THAT variable in the short term [less than 6 months], so my profit is directly reduced by that $0.25 increase. Even if I could directly tie my pricing to my material cost and immediately charge $3.25 a gallon, that would leave my profits identical only assuming the demand was the same. Which in aggregate seems unlikely.

So in this simple model how do I get my profits to rise, when material costs increase, and make up for the lower sales (however small that may be)? Logically - and mathematically, if I have this right - I would have to IMMEDIATELY increase the price by a greater amount that the increase in my material cost. Isn't his price gouging? This of course only works in a product with a very inelastic demand curve - such as gasoline.

But there is something inherently 'wrong' about this from a society perspective, there is certainly no incentive for the big oil companies to work to negotiate lower material costs (unless they maintain the higher pricing levels - which increase their profits - that is gouging, isn't it?), nor are they incentived to increase efficiency or develop alternate raw materials or sources...they're already making RECORD PROFIT.

My economic understanding has passed the way of the rotary phone. Man I wish I owned a oil company.

Monday, March 31, 2008

 

Baseball as Religion

This is no attempt to diminish or admonish the traditional religious conviction and beliefs, nor is it a treatise to analyze the influence and importance on the human race; supported or unsupported by the deities of faith. It is simply an assertion that Baseball for those that are devout, is a religion.

Baseball has its rituals, repeated and expected with fervent piety; whether its the throwing out of the first pitch, the singing of the national anthem, or the simplified benediction of 'Play Ball!' The drawing of the faithful, through promise of deliverance is the message to the masses and the faith in that belief that sustains them.

The cycle of renewal that begins each spring and is celebrated each 'opening day' in each parish of green and brown, of sun and wind; a veritable cathedral to the game they love. Their faith in their collective ability to influence the fate of the results and triumph through the long tribulations leading to the crowning of champions of cold October days.

And those left less fortunate can take solstice in the support from their fellow man - if in nothing else but a tax distribution - and believe again that anything can happen when the cycle begins again. Even though the colors and the allegiance make for distinctions among this congregation, it is all still baseball and makes us all brothers and sisters in this pastime.

Saturday, March 08, 2008

 

Death, Taxes & Microsoft

The triad of the inevitable. The source of great frustrations and consternation. The banes of our very existence. In a fit of 'compfrustration' through attempting to deal with the, oft put off, tax preparation and the being put off through near continuous and Illogical hindrances, permission denials, and cryptically or ‘holier than thou’ error messages from my Vista operating system, reminding me that no matter how much I knew; I knew nothing.

I cannot explain all of the technical details about my problem but I'll summarize it as:
I am running Vista Home Premium, as purchased (no upgrade), in attempting to load a tax software [adding tax frustrations on top of computer frustrations: a defensible insanity plea if there ever was one] the load kept failing with error 1935. Tax Software's support group had no resolution.

Separately I had a problem around "Windows Update" failing for some time with an error 80073712. A search through windows support for this particular error yielded nothing, a veritable random number, a false crumb on a trail that lead nowhere. My fellow bloggers and messages posters detailed challenges and horrors of no resolution, no fix from Microsoft. Others suggested removal of secret or hidden files, that make one wonder how much time this problem had cost people to even find these files, let alone the desperation to see what happens when they delete them.

The logical nature of my thinking surmised that there must, nay; had to be, a link between these two problems and if there was a life and death god, or a tax god, or even a OS god, that this deity would show mercy on the suffering to resolve two problems with the resolution of one. Which one would be the next logical question?

Clearing the windows update folder did nothing for me. A few other suggestions tried, all sounding riskier and riskier. I was venturing into destructive territory I felt like the astronaut in the movie 2001 trying to disconnect HAL by being where I should not be, nor should have to be. The frustration boiling my blood and pressing to my face as the steam inside seeks its escape. The course of last resort, the apparent last act of desperation that those before had gone, and seemingly Microsoft’s permanent answer to the problem, was to reinstall Windows.

I had one more thing yet untried. Through some cryptic command line code I had to remove a pending.xml file in winsxs folder (not an easy task) and the windows update program had to be reloaded (which could be done previous due to another 1935 error). In an act of mercy, or display of a miracle, or simply the alignment of the universe, it worked. This fixed MY 1935 error and my error 80073712.

This for me highlights the true power of the internet. Message boards and blogs to share information, catalog possibilities, highlight the unmentionables, and help people get on. So until the next ‘compfrustration’, I was down to the more reasonable two inevitables to overcome. And at least only one of them has a known deadline date.

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Friday, December 14, 2007

 

Mitchell Report Effect and Expectations from a Fan

The Mitchell Report is out. This does pull the covers back a little on what we have all lived in a little denial about. The laying out of details and the naming of names was needed for the blunt reality effect of it. Even the conjecture and innuendo of the differences between accuser said versus what the accused says in retort, is needed. Before it could easily be dismissed as 'the other guy' whoever he was. The anonymous obscurity of its participants masked the extent and significance of performance enhancing drug on the integrity, the competition and dare we say it; the haloed results and records of the game - but by how much?

Likely it is impossible to be measured, just like we can not know if an athlete that did take performance enhancing substances could have been successful and achieved the record without them. I would worry about the true guile of a professional athlete that had taken that route, if that very question didn't echo insistently in their thoughts over and over again. Like the protagonist from Poe's Tell Tale Heart, tortured by this unknowable truism and the guilt of the means and the sacrifice of morality and ethics needed to achieve what they achieved uncompetitively.

Just as in life I think that the report highlights that the instance of use spreads through a social network, not necessarily an evil intent but a clandestine one none the less. Athletes as individuals need to identify and avoid these 'bad influences' and the baseball organization - Owners, Commissioner, and Player's Union needs to dedicate continuous effort and action to identify these social viruses that bring about a negative progress to the general integrity and assumptions of the game. And then have the autonomy and courage to eradicate them from their midst as quickly and efficiently as possible.

I also agree with Mitchell that the past is the past and we need to move on. Negative assumptions and doubt will forever linger with this period of the sport and further investigations will only prove it worse not better than perceived at this point. And hasn't it already been proven significant enough that further and more decisive action to eliminate this threat to the sport is needed. Sometimes knowing it is bad is more than enough to take action without knowing completely how bad.

As for the player themselves, denial and excuse is a likely reaction to accusations, but when does the players effort turn toward proactive acts and taking extreme measures to distance themselves from the remoteness of these assumptions to ensure that their good name - because in life and certainly in baseball, a person's 'good name' still means something - remains untarnished.

And specifically to those implicated in this report: Maybe you didn't take it or maybe you only tried it, but by that you are associated with it and instead you should be working as hard or harder to be as far from that association as you can be - not writing proverbial checks that your character and integrity can't cash.

Monday, November 26, 2007

 

Chargers Light Coming On?

As a Chargers fan, I have been struggling with understanding how this San Diego team with so much talent can be playing so listlessly - and I know I'm not the only one. I think I discovered it in a quote by Shaun Phillips: “We play better off emotion, ... we realize we're a better team when we play emotionally. " His statement rings true when watching a game, you practically see the energy and a frantic precision as the ball is snapped.

Look at the contrast within the Eagles vs Pats game, New England is a team is more comfortable in a steady rhythm, an almost sterile precision. With emotion and a few less timely interceptions the Eagles QB, Freely, would have become known as a Pats killer.

I have yet to be a Norv Turner fan, - that awful regular season record - coaching some pretty good teams -, but Norv and the Chargers brass need to recognize this answer disguised as a post game comment. Norv the quiet and reserved one and AJ Smith the one of sterile precision need to borrow a little emotion from the exiled Marty. It takes too long to change a team in the short term, here the coach needs to change a little and be more emotional, and accept and expect more emotion in the play of his team.

To coach and achieve, everyone needs to recognize what fuels the organization. You must know first what type of team you are, and then design the solution around that team charisma and chemistry. This is why formulamatic solutions do not work with consistency, even teams must learn and adapt solutions and ideas to their Entity Identity. To change results you change an approach, to change a character you have to change personnel. This applies to sports teams as well as business teams. People and teams have a hard time being something they are not. If you have the right people to be successul then approaches are a lot easier to change than the team.

Friday, November 09, 2007

 

Updates and Upgrades

Aggravation pays me a visit regularly. As I begin work, or play. When I turn it on and even when I turn it off. The pop-up, the reminder, and 'message box of incompatibility', buzz me like the swarm of mosquitoes poking at me to suck the time right out of me.

As we move further into the information age and further remove ourselves from being the physical attendant of the mechanical tool, we still seem to be headed toward an unsustainable burden of maintenance. Not the logical prediction of too much information, I can't get to the information highway through the speed bumps of software upgrades and updates.

Every day my virus software has to consume resources to get updates, my operating system has a regular schedule for updates, if I use more than a handful of software applications I have to go through a yearly upgrade expenditure and adventure, usually multiple times before its working like it did before I had to touch it.

I don't have to worry about computer zombies, or my system gaining a intelligence to take over the world, most of its up time and resources are consumed by this near endless maintenance. Its like a compulsive cat that has to constantly lick itself clean so its too busy interact with the world around it. Welcome to the 21st century.

Monday, November 05, 2007

 

Dodgers Rip Heart out of New York, Again!

1958, the New York neighborhood of Brooklyn lost its heart and maybe its identity in the migratory move of the Dodgers baseball team to Los Angeles California.

Now, and again, in 2007 the Dodgers - more by default on the part of the Yankee's management - are migrating the heart and soul of a familiar and successful New York Yankees team out to the west coast. First the skipper, much loved among his coaches and players; Joe Torre is hired by the Dodgers and with that, an apparent siphon of talent and experience if not of champions.

Mattingly and Bowa flesh out a western Yankees coaching staff. What of the players that can in their power follow that lead and their hearts to a westward way - Rivera, Pettite, Posada. Who knows maybe even Joe can get Don Zimmer back.

A championship with the Yankees replanted in sunny southern California is not likely to change dispositions or results. We're in for a period of well made dynasties with core young players which teams are built around or the hot young upstarts that can keep it going through the world series. Not aging stars in active retirement to sun and comfort.

This just may be a crumble of the walls of the evil empire with an exodus of blood and guts that put the performance on the field.

Let's hope so. I'm an Orioles fan, what else do I have to hope for?

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