Jason Monastra

My life and thoughts out on the web

First and foremost, let us place our prayers to all of those that suffered through the storm.  It was a terrible event for all of those that stayed, as well as those who have been displaced.  Our thoughts and prayers are with them during this time.  I cannot imagine the event myself as I never been through one.

Fortunately, more so than not, the reports of the damage and interruption of refining capabilities due to the storm have been moderate.  Hurricane IKE, though one of the largest storms in recent memory, did not bring the certain death and destruction our liberal friends in the media were so desperate to report.  I think that there real focus was somehow to disparage the current administration in a hope to bring down GOP’s recent surge in acceptance, somehow showing their inability to understand the common man and acting in similar step to the Bush’s blunder of the Hurricane Katrina situation.

Gas prices have been rising her locally at a feverish pace however with no economic basis for the rise.  Threat and fear have allowed the gas stations and their respective puppet masters to raise the costs per gallon to an extraordinary amount to secure increased profits.  Now I will be the first to say, I understand price and demand and have no issue with companies making money.  My issue with this current situation is the use of a weather condition that caused no substantional  impact to line the pockets of some of the most wealthy companies on the planet.  Oil has come down at an alarming rate with gas inching down so slow in comparison, no one really knows why.  Look at the price of oil, in overseas markets, trading below 100 dollars a barrel with gas still hovering around 4 dollars.  Come on people, if there was ever a manipulation of the market for the benefit of the big players - it is now.  I operate more in the tech space, so lets look at the guerrilla in our market.  Microsoft.  They have been under more legal litigation and scrutiny for locking out competition than anyone.   Yet their pricing is not that bad.  This monopoly that has been created by the oil companies is the same however impacts more people and drives the cost of living up.  Computers are optional at the home level, and if not - there are options for purchasing.  People need to go to work - and that requires gas in almost all cases. 

Lets look at the history.  Prices at the pump have hit everyone causing an economic slow down.  Oil prices dropping should reflect at the pump but have not.  The last time oil was below 100 dollars was March of this year.  At the time, the cost of oil was on the rise and gas with it.  Gas prices were set at a record of 3.22/gallon.  OK.  So lets say that is the base.  Why are we not at that level now?  Currently sitting nearly 25% higher due to no economic force other than the increased greed of oil/gas companies to reap a profit.  I am not one for government interference but I do think there needs to be some checks and balances to ensure that the customer is not overtly leveraged to a point of despair.  Most people are hurting from the current sector prices and are getting no relief.  And why should they?  Our President and his buddies have a vested interest in ensuring the cost does not come down as they have their hands heavily leveraged in such resources and companies.  So who is to blame?  Not sure but there needs to be a better way of figuring out fair pricing policy.

What if there was simply a % increase effected into law that let the price of oil determine the overall cost of gasoline to the customer.  If oil costs A, then the price of gas is B.  The key here would be to keep normal economic factors in play for oil, so that price increases were not distorted by companies trying to make more money.  One of the largest contributing factors to this issue is speculation and the fact that oil companies drive the cost through this medium.  The more people I speak to, the more I notice that do not understand the trading of these contracts and the cost associated.  The oil costs that we see in the news is not the cost of oil now, but down the road - months ahead.  These contracts are set in place to secure pricing, understand the need of the domestic and international community, and therefore determine a host of other logistical factors based upon those contracts.  The need for this sort of forecasting I appreciate.  However, it comes with a twist.  Guess who is buying the oil contracts and therefore increasing the demand - yes, that would be our good friends and the oil companies.  Purchasing their own product, showing high demand, limited production and therefore driving cost.  WOW.  If there was ever a manipulation of the market - well that is plain as day.

So where do we go from here.  The system is broken and it requires leadership at the micro and macro levels to put in place a market system that spurs innovation, keeps costs at a reasonable level, and allows companies to make a healthy bottom line.  What that exact model looks like - well I do not have the magic answer.  But I do believe that if people that lead these companies looked farther than one SEC report down the road, they could determine a way to make this work for everyone.