The Economy

True, but the government should not pay people to make buggy whips any more than they should pay $800 billion for our "defense" (as if 6,000 nuclear warheads weren't "defense" enough).

Pay for what's needed.

 

Today won’t be as good as yesterday. In its daily economic news email, Politico notes that a bunch of economic data will drop today and that most of it is expected to be negative. Third quarter GDP is likely to hit the initial 33.1% estimate, with the fourth quarter estimate expected to be much worse and the first quarter of next year possibly going negative. The hed on it is “Wall Street rocks as food lines grow."

 

everyone has a share!


- milo minderbinder

 

Is it Schwab offering cheaper "slices" of shares, so anyone can get in on the fun?

 

For two bucks you can own half of Lee Enterprises.

 

When I was younger I told myself when I had a child I’d buy one share of Amazon for him or her every year.

I had my first child in 2019, looked at the price of Amazon stock... and Baby Hermes now owns a third of a share of Amazon.

 

You’d still end up losing $1.50 in the long run.

 

I have to be honest here: Although I feel terrible for the people at the bottom of the Exxon food chain, I do not feel terrible for the company as a whole. I am very curious about what the collapse of the fossil fuel sector will do for the global economy, though.

(Ragu, that’s your cue.)

The economic fallout of the covid-19 pandemic has hit the oil industry hard, and Exxon in particular is feeling it. Internal documents show the company’s not expecting to make a grand recovery any time soon despite putting on a good face for shareholders.

Exxon is expecting oil prices to fall over most of the next decade. The firm has lowered its projections for future oil prices for each of the next seven years by between 11% and 17%, the Wall Street Journal reported on Wednesday, citing a report composed at September financial planning meetings it obtained.

The documents show that last year, the company forecasted that Brent oil prices—which the world uses as the benchmark for the price of oil—would run an average of $62 per barrel for the next five years, then jump to $72 in 2026 and 2027. But now, company analysts believe the price of a barrel won’t exceed $55 on average through 2025, and that in the two years after, it will only go up to $60. One analyst told the Wall Street Journal that “Exxon’s break-even is the worst among its peers and that, at current spending levels, its oil and gas production is poised to shrink.”

The new outlook comes amid a wildly awful year for the fossil fuel giant, which has lost more than $1 billion since the pandemic began. Last month, Chevron overtook Exxon as the biggest energy company in the U.S., and soon after, Exxon analysts said it is facing financial losses for the third quarter in a row. ​

This next graf is why I don’t feel much sympathy for Exxon as a corporation:

Even as far as energy giants go, Exxon is truly despicable. Troves of evidenceshow that for decades, it knew that its products were causing dangerous global warming even as it waged a misinformation campaign to keep the public confused. The company has also faced a number of lawsuits for misleading shareholders and climate damages as well, though it has yet to be held accountable in those cases.

Still, Exxon’s new forecast isn’t exactly great news, because as much as I’d like to dance on the failing oil company’s grave, it’s not the most evil people at the firm who are suffering most. In typical corporate fashion, workers have seen the worst impacts from the downturn as the company lays off a wide swath of its workforce, while Exxon shareholders have gotten paid hefty sums.

The crash is also expected to leave the company with stranded assets, or oil and gas reserves that end up being worth less than anticipated when they were purchased and developed. That’s especially true because Exxon plans to continue to dig itself deeper into economic ruin by producing more and more oil. In fact, last month, another leaked document showed that Exxon plans to produce an additional 1 million barrels of oil a day over the next seven years, and thereby increase its carbon pollution by 17% by 2025. Some oil wells are falling into complete disrepair, and rather than spending the necessary funds to wind them down safely, some companies have merely left them to spew out planet-warming greenhouse gases. That means that as company’s abandon their projects, the public is suffering the damages and paying the cost of cleanup.

Now, it looks like things could get even worse for Exxon. The company plans to reduce its spending, but even if it makes dramatic cuts, analysts expect it would need oil prices above $55 a barrel next year in order to cover its capital expenses and dividends. Without those prices, it will likely make even bigger cuts to its workforce—in fact, it’s said it could lay off 15% of its staff, totaling some 14,000 jobs lost.​

Brent crude is currently trading at $47.88 per barrel.

Secret Exxon Documents Show the Firm May Never Recover

 

Perhaps they should stop producing oil and start looking at renewables.

 

Netflix used to mail DVDs.

Big oil had every resource in the world to adapt, and if they chose not to, fuck em.

 

And when Netflix shifted to focus on streaming instead of DVDs people went nuts and their stock dropped 30%.

Kinda looks like an OK move in retrospect.