Thursday, July 31, 2008
This does not compute
by Larry Geller
What is wrong, wrong, wrong with this picture?
ExxonMobil Profit Record: Investors Unimpressed
Shares fall 3% even after the oil giant broke its own quarterly profit record. Investors are concerned about future growth
ExxonMobil (XOM) beat its own record for the highest profits ever by a U.S. company, but that wasn't good enough for Wall Street, which traded down the company's shares July 31. The trouble in part was expectations: Analysts surveyed by Thomson Reuters (TRI) thought Exxon would report earnings of $2.52 a share for the second quarter, but the $2.22-per-share profit announced was 12% below that. In all, Exxon reported profit of $11.68 billion, 14% more than the $10.3 billion, or $1.83 a share, in the same period last year.
Indeed, it was the second consecutive quarter in which ExxonMobil has missed analysts' expectations. In mid-afternoon trading, the company's shares were down around 4.7%, to 80.43. [Business Week, 7/31/2008]
What's wrong is that high oil prices are wrecking the US economy and endangering the viability of families across the country.
Exxon soaks us at the pump, makes world-record profits, and Wall Street would have them soak us for even more?
Now, it's not "supply and demand" keeping prices up. You can google for discussions debunking that argument, which is a mantra of the commercial media.
Exxon and other oil companies have chosen to hold back on research and exploration and instead take profits. Hey, it works for them. So they are the winners. In fact, the biggest winners in the whole wide world.
And we are the losers.
If corporations really run this country, how come they're not hopping mad also, and banging on politicians' doors to control these obscene profits and get the oil market under better control?
This does not compute.
This is "disaster capitalism," pure and simple.
I think we should take seriously the idea that this is just part of an extension of the Milton Friedmanesque economic ideas that were tested in Chile and Argentina in the seventies.
I highly recommend reading Klein's "The Shock Doctrine."