Price gouging: Shortages real or are some fabricated?

[hobbyguy]

Canada is not the only country that questions the effect of a significant increase in corporate profits and their affect on inflation. Now people in Australia are questioning corporate profits.

“Australia Institute executive director Richard Dennis added: "What the data says is that profits are rising across Australia. Collectively, firms have never had it so good."

The latest look at businesses around the nation shows corporate profit leapt 28 per cent last year.

Wages grew too, but by less than 2 per cent…

That might seem a predictable answer from a union leader, but probably not from the chief economist of UBS Global Wealth Management…The gigantic global firm's Paul Donovan wrote in the Financial Times that, outside of commodity prices, inflation is rising around the world because of corporate profits, not wages. ”

In Australia, corporate profits, as a share of key costs (known as factor income) hit 32.9 per cent in the June quarter – a new record. Wages hit a new low of 48.5 per cent. Inflation is a world wide problem, it is not Justinflation. However, what is also world wide is the fact that increased corporate profits are contributing to inflation and wages are not keeping pace.

https://www.abc.net.au/news/2022-11-15 ... 101631802

When you print too much money, people have too much of it and they have more to spend on crap. When the government spends too much money, this has a drastic effect on the delicate balance of the money supply. This is exactly why it is Justinflation. The corporate profits are just a symptom of too much money and too much demand in the system.

Again, why is a self proclaimed conservative all over these message boards spouting liberal talking points and defending liberal policy. Does proclaiming yourself small-C provide some cred?

Simple calculation answers the realities. 1/2 a trillion $ in extra profits (annualized) taken by corporations versus 2019 which was a very good year for corporate profits in Canada. https://tradingeconomics.com/canada/corporate-profits

While the profit level is likely to decline and come down to a more reasonable level, the difference at that annualized rate of current profit taking is roughly 12,000,000 per year per person in Canada. Assuming (I know, there's that word) the accumulated actual total extra profit taking by corporations will work out to about $6,000 per person in Canada. Not sure about you, but for me, an extra $6,000 in my family pocket would even me out relative to inflation - but I don't drive much. If I was not retired and commuting every day etc. then it would likely be closer to the $12,000 mark.

The "money printing" argument is daft. QE is not "money printing" in the simplistic way that you are presenting it, especially as QE has been followed by QT - as is the regular practice. "Money printing" implies a permanent change in the money supply, and that is not the case with QE followed by QT. What QE does, by freeing up credit markets, is lower the costs of borrowing.

The real issue is that the "excess demand" implied by the "money printing" argument is simply not there in most sectors, housing excluded because housing demand is very sensitive to borrowing costs. Perhaps some extra demand for automobiles as well, but reality is that auto price increases have been and are being driven primarily by supply shortages like the well publicized chip shortage - which is a temporary pandemic induced thing.

People aren't driving more. People aren't eating more. People aren't heating their homes more. There is no excess demand in those areas, yet they are the drivers of inflation. With no excess demand, there is no simplistic "money printing" argument, as real excess money creates excess demand.

People were buying homes at at a very rate, as were investors who had access to "cheap money". The "cheap money" is pretty much gone, and the inflationary cycle in real estate is, for all intents and purposes, kaput. That's the portion of demand that the BOC effects, and it has been fixed.

The rest is down to essentials: food, fuels and energy.

Companies like Cenovus and Chevron haven't seen their costs rise much, they aren't paying significantly higher wages etc. but are reporting quarterly profits between 4 and 11 times higher. Companies like Cargill haven't seen their operating costs rise too much, some because of fuels, but not a huge amount, and have been reporting profits at all time record levels (in Cargill's the highest by far in their 152 history as a company).

It is all about price manipulation and profiteering. Think about this: shipping costs for a container were about $2,500 yet we saw the price spike to $30,000 without anywhere near that kind of increase in costs.

Yes, there are specific areas where shortages are creating apparent "excess demand" like lettuce, fruits and fresh vegetables which is, in effect, a climate change "tax" that nobody collects.

Think about it. Canada is an oil and gas exporter. There is no shortage. There is no "excess demand". Not in Canada. Qui bono?

This article, although obviously done from the perspective of a different but similar country is informative: https://www.abc.net.au/news/2022-11-16/ ... /101326768

What has really gone up is corporate profits, and it is coming straight out of ordinary folks pockets. Yes, some costs are going to be up, but nowhere near the price spiking we see from the big monopolistic corporations of greed.

One way or another, these big monopolistic corporations are taking $6-12,000 out of your pocket for no viable reason. And worse, many of them don't even contribute much to Canada. Cargil, a Minnesota company with big presence in Canada, registers itself as a Delaware company and reports its profits there for a lower tax rate! Pffft!

[Gone_Fishin]

Companies like Cenovus and Chevron haven't seen their costs rise much, they aren't paying significantly higher wages etc. but are reporting quarterly profits between 4 and 11 times higher.

We've examined your statement and found it to be a lie.

CVE 9 months ending September 30, 2022:

Production volumes 2022 were 779.2 versus 2021 of 780.1 MBOE/D, basically flat.

Operating costs 2022 were $41,353,000,000 versus 2021 of $25,859,000,000.

$15.5 billion more in operating costs for the same production in 2022 versus 2021.

Stripped operating expenses per BOE increased 20.9% year over year from $11.44 to $13.83.

[hobbyguy]

Companies like Cenovus and Chevron haven't seen their costs rise much, they aren't paying significantly higher wages etc. but are reporting quarterly profits between 4 and 11 times higher.

We've examined your statement and found it to be a lie.

CVE 9 months ending September 30, 2022:

Production volumes 2022 were 779.2 versus 2021 of 780.1 MBOE/D, basically flat.

Operating costs 2022 were $41,353,000,000 versus 2021 of $25,859,000,000.

$15.5 billion more in operating costs for the same production in 2022 versus 2021.

Stripped operating expenses per BOE increased 20.9% year over year from $11.44 to $13.83.

You are struggling to try to make data fit a bs partisan position. https://www.cenovus.com/News-and-Storie ... 22/2487587

2021 2nd quarter net earnings: 224 million. 2022 2nd quarter net earnings: 2,432 million. 2432/224 = 10.85

There it is in black and white from Cenovus themselves. Rounds up to 11 times the profits!

And here is Chevron: https://www.chevron.com/newsroom/2022/q ... 22-results

2022 reported 2nd quarterly earnings $11.6 billion. 2021 reported 2nd quarter earnings: $3.1 billion. 11.6/3.1=3.74 however, Chevron also took a "charge" in that quarter to pay $600 million for an early contract termination, so for all intents and purposes the real earning for 2nd quarter were 12.2 billion. Rounds up to 4 times the profits.

Best check your facts more carefully. There they are in black and white = and directly from the greedy corporations getting even wealthier by hosing us ordinary folks.

[Gone_Fishin]

We've examined your statement and found it to be a lie.

CVE 9 months ending September 30, 2022:

Production volumes 2022 were 779.2 versus 2021 of 780.1 MBOE/D, basically flat.

Operating costs 2022 were $41,353,000,000 versus 2021 of $25,859,000,000.

$15.5 billion more in operating costs for the same production in 2022 versus 2021.

Stripped operating expenses per BOE increased 20.9% year over year from $11.44 to $13.83.

You are struggling to try to make data fit a bs partisan position. https://www.cenovus.com/News-and-Storie ... 22/2487587

2021 2nd quarter net earnings: 224 million. 2022 2nd quarter net earnings: 2,432 million. 2432/224 = 10.85

There it is in black and white from Cenovus themselves. Rounds up to 11 times the profits!

And here is Chevron: https://www.chevron.com/newsroom/2022/q ... 22-results

2022 reported 2nd quarterly earnings $11.6 billion. 2021 reported 2nd quarter earnings: $3.1 billion. 11.6/3.1=3.74 however, Chevron also took a "charge" in that quarter to pay $600 million for an early contract termination, so for all intents and purposes the real earning for 2nd quarter were 12.2 billion. Rounds up to 4 times the profits.

Best check your facts more carefully. There they are in black and white = and directly from the greedy corporations getting even wealthier by hosing us ordinary folks.

Thanks for showing us that you have no idea what operating expenses are.

You claimed that operating expenses haven't gone up. The facts are that they have risen dramatically. You then post net income figures when challenged by facts.

Liberals don't know the first thing about financial statements. They don't think about monetary policy. And the budget will balance itself.

[Gone_Fishin]

“Canada’s top three grocers all posted higher profits this year compared with their average performances over the last five years, new research from Dalhousie University has found.” However, those of us who regularly shop have seen prices rise weekly. I was in the cheese section today.The woman beside celebrated that she had just found what she was looking for, but the feta had increased almost a dollar since she had purchased it two weeks ago. Staples like eggs, milk, bread, and even peanut butter have increased dramatically.

“ It’s quite possible that consumers are spending more money on products that have a higher gross profit margin like cosmetics and apparel, Taylor said.
“It’s also possible grocers have increased their margins on food. We just don’t know.”
The report comes as food inflation in Canada continues to spiral higher. Grocery prices jumped 11.4 per cent in September compared with a year before, the biggest increase since 1981, according to Statistics Canada.
Surging food prices have prompted the Competition Bureau of Canada to launch a study on competition in the grocery industry.
But the grocers defended their profits, saying their margins haven’t changed.”

https://www.thestar.com/business/2022/ ... port.html

If the grocery sectors quarterly reports were more transparent it would be easy to convince the public and shareholders alike that Loblaws and others are not the bad guys. But then that transparency would have to extend to compensation packages.

It's okay, your hero Justin Trudeau just awarded a $570 million contract to Loblaws.

There will be LOTS of cash to bonus out those fat cat executives, thanks to Justin. Somehow I think there will be a bit left over for Justin, too.

[Babba_not_Gump]

From the above quote,
. Staples like eggs, milk, bread, and even peanut butter have increased dramatically.
I'm under the impression that dairy, poultry are controlled by marketing boards.
To protect consumers?
Or is it to protect the producer?

[the truth]

on and on it goes food cost going up another $1,000 https://www.castanet.net/news/Business/ ... t-predicts safe bet stolen food will be a real thing in 2023
yet we see this https://www.cbc.ca/radio/thecurrent/can ... -1.6629854

[George Orwell 1984]

Just what is justin and his gang of thieves( supported by Jimmy Dhaliwall ) doing about it? Hit the public harder , increase taxes, heave more money at the likes of Loblaws and Cbc to garner support.While they are at it it’s best to take the guns away because you just never know what people that are starving in the dark are capable of. SUNNY WAYS INDEED

[Bsuds]

safe bet stolen food will be a real thing in 2023

It's a real thing now and has been for awhile.

[Nugget44]

Coincidence....I think NOT

Grocery Inflation:
https://www.castanet.net/news/Business/ ... cts#399901

Grocery Store Profits:
https://globalnews.ca/news/9098447/cana ... s-profits/

Just don't be an arm chair critic:
https://financialpost.com/news/retail-m ... -inflation

[the truth]

safe bet stolen food will be a real thing in 2023

It's a real thing now and has been for awhile.

yes i know that, i just think it will now go to the next level

[Bsuds]

It's a real thing now and has been for awhile.

yes i know that, i just think it will now go to the next level

Yes it could get much worse.

[hobbyguy]

You are struggling to try to make data fit a bs partisan position. https://www.cenovus.com/News-and-Storie ... 22/2487587

2021 2nd quarter net earnings: 224 million. 2022 2nd quarter net earnings: 2,432 million. 2432/224 = 10.85

There it is in black and white from Cenovus themselves. Rounds up to 11 times the profits!

And here is Chevron: https://www.chevron.com/newsroom/2022/q ... 22-results

2022 reported 2nd quarterly earnings $11.6 billion. 2021 reported 2nd quarter earnings: $3.1 billion. 11.6/3.1=3.74 however, Chevron also took a "charge" in that quarter to pay $600 million for an early contract termination, so for all intents and purposes the real earning for 2nd quarter were 12.2 billion. Rounds up to 4 times the profits.

Best check your facts more carefully. There they are in black and white = and directly from the greedy corporations getting even wealthier by hosing us ordinary folks.

Thanks for showing us that you have no idea what operating expenses are.

You claimed that operating expenses haven't gone up. The facts are that they have risen dramatically. You then post net income figures when challenged by facts.

Liberals don't know the first thing about financial statements. They don't think about monetary policy. And the budget will balance itself.

Ummm... "net earnings". Total revenues minus total costs = net earnings. Operating expenses are included in the total costs.

Partisan nonsense from PPCPC pumpers is so transparently silly.

[hobbyguy]

On the general subject of inflation and price gouging, and where things are headed, this perspective from another country is worth reading: https://www.abc.net.au/news/2022-12-05/ ... /101732578

"The global economy is in the midst of an epochal shift as 2023 looms: Here are the five things shaping our future"

SNIP

"Back in the 1970s, what was known as Keynesianism died as inflation ran rampart across the world. In the post-war era, governments controlled the economy through spending, taxation and income redistribution policies.

That was replaced by monetarism, a system where central banks controlled the economy through interest rates and governments largely absented themselves from economic management.

The spark for that change came from an energy crisis after oil-producing countries, led by Saudi Arabia and other Middle Eastern producers, formed a cartel and jacked up prices, sending inflation into orbit.

Once again, we have an energy crisis that has fed into an inflationary breakout. And it has just happened to coincide with the end of monetarism or at least a point where the limits of monetary policy have been reached.

SNIP

Here at home, similar moves are afoot. For a nation swimming in vast pools of fossil fuels, we have found ourselves facing shortages and extreme price rises as multinational companies reap mega profits from the political and economic fallout of Putin's war on Ukraine."

[George Orwell 1984]

You know , I know it and the entire world knows these increases were well underway BEFORE Putin went anywhere near Ukraine