Gripenfelter

Buy electric. Its the only way oil will go down.

cjmatt

Buy American, its the only way the oil will go down. Oil is expensive right now due to the weak dollar, and every dollar we send overseas weakens it further.

indieaz

The article doesn't stress that those vehicles are alreayd low volume. If GM sells 5,000 avalanches per year in China, a 40% inrease in sales in the next 3 years is nothing. I would be interested to see what current sales actually are to put these big percentages into context.

guionM

Buying American isn't going to do anything regarding oil.

Two things to drop the price of oil:

1. Strengthen the US dollar.

Oil prices outside the US is comparatively stable, indicating the drop in value of the US dollar has a very large part of oil prices to us. This isn't going to happen because it requires us to pay for what is spent, in short taxes that match spending. Tax cuts and billions of dollars every month going to Iraq and early this decade when congress ending the requirement of matching spending increases & tax cuts with equal reductions in spending don't help.

2. Cut our usage.

Talking about ones so-called God given right to drive Suburbans and Tahoes whether they need them or not, and chatter about letting the marketplace dictate what vehicles are made doesn't reduce fuel usaage. Higher fuel taxes is a non-starter (despite being the most effective way to cut usage and having not been raised in over 15 years despite inflation), so the only thing left is higher CAFE standards.


Oil supplies are relatively stable. Global oil prices are relatively stable (via Canadian dollars, Euros, Aussie dollars, and even Russian Rubles, oil prices increased at far lower rates than in US dollars). Saudi Arabia basically told us to take a hike when Cheney visited there recently to try to get them to increase production, and they were right. We aren't going to solve our problems with our economy unless we take some responsibility to fix it.


When Bush and congress jacked up CAFE standards last year and everyone started predicting gloom and doom of the US auto industry, I said that new CAFE standards would be moot well before CAFE started kicking in because of rising fuel prices. We're starting to see this play out already.

ProudPony

Spot-on.

* We HAVE BEEN reducing our consumption rate over the last 2 years, and most significantly in the last 8-12 months, but the results are just the opposite wrt/ the pump prices.

* There is a glut of crude on the market for the last few months. OPEC and the oil-producing nations are all cutting back on barrels pumped because of a lack of storage and consumption.

* There is no unusuall or severe weather anywhere in the world that is causing any shipping delays or refining issues (i.e. hurricanes, typhoons, etc).

* There is no abnormally high terrorist activities that are threatening pipelines, distribution channels, or transport of crude or processed fuels.

In short, we are doing everything right as consumers and there are no global catastrophies to augment the cost-rise, so why is it still going up?

BECAUSE IT CAN. There are a small group of people in powerful places that are riding this wave, and have no interest in seeing it stop. If you were personally making $1.2-million/month into your private checking account, would you really care if it cost you another $60/week to fill-up the tank in your limo?

It is my personal opinion that private investors, hedge-fund managers, and "poer-players" in the industry are controlling the crude like any other commodity and simply doing what capitalism allows them to do - charge what the market will bare. Problem is, oil is not a commodity like rice or corn that any person with a bit of dirt can grow themselves. It's not like electricity that we can generate ourselves with the purchase of a windmill or waterwheel. It's not like gold or silver where any person can go panning or digging for it. And it is certainly not like clothes, shoes, or widgets that we can make ourselves at home. Oil - and even moreso the gasoline we need for transportation - is tightly monitored by laws and regulations, and refining requires permits and controls that are financially out of reach to most every private individual - hence we are dependent on those who can supply it. It is a monopoly... From Meriam-Webster's...
Main Entry: mo·nop·o·ly
Pronunciation: \mə-ˈnä-p(ə-)lē\
Function: noun
Inflected Form(s): plural mo·nop·o·lies
Etymology: Latin monopolium, from Greek monopōlion, from mon- + pōlein to sell
Date: 1534
1 : exclusive ownership through legal privilege, command of supply, or concerted action
2 : exclusive possession or control
3 : a commodity controlled by one party

There are just a few key players in the field of extracting crude from the ground, and they are legally directed by the nation(s) in which they are operating their process. Those countries or cartels DICTATE to the extractors how much they are allowed to produce. I'd say that the legal control of the process covers the "legal privilege" part of the definition, dictating the amount allowed to be extracted sounds like "command of supply" to me, and we all know that the "C" in OPEC stands for "Cartel" which is a group organized to control oil production... sounds like a "concerted action" in my book.
So why does oil and gas NOT appear to be a monopolistic issue to so many?

We have covered this before. Capitalism works and works well - ONLY if everyone plays by the rules. One of those rules is that there must NOT be a monopoly existing. Our government is responsible for preventing such situations in our domestic economy - hence the SEC and our nation's anti-trust laws. THe page for anti-trust laws on Wiki is a decent read for the average Joe. United States Antitrust Law.
"United States antitrust law is the body of laws that prohibits anti-competitive behavior (monopoly) and unfair business practices. These competition laws make illegal certain practices deemed to hurt businesses or consumers or both, or generally to violate standards of ethical behavior."
"A distinction between single-firm and multi-firm conduct is fundamental to the structure of U.S. antitrust law, which, as noted antitrust scholar Phillip Areeda has pointed out, "contains a 'basic distinction between concerted and independent action.'"[1] Multi-firm conduct tends to be seen as more likely than single-firm conduct to have an unambiguously negative effect and "is judged more sternly."
"Antitrust laws prohibit agreements in restraint of trade, monopolization and attempted monopolization, anticompetitive mergers and tie-in schemes, and, in some circumstances, price discrimination in the sale of commodities."
"U.S. antitrust law thus does not attack monopoly power obtained through "superior skill, foresight and industry."

What bothers me the most is seeing the pinch that is being put on small businesses in the US right now, and the pinch that lower-income families are getting put on them too. Kids are doing with less so their parents can have gas to go to work... some are struggling to pay for groceries and gas... and small business owners are folding-up all over the place because of their own loss of profits due to fuel increses and also due to the decrease in shoppers/travelers physicaly coming out to retail stores.

I'm sorry - I don't hold anything against a company making a good profit, but there is something FUNDAMENTALLY WRONG with ONE INDUSTRY making record profits while every other sector in the economy is losing ground, and we know where everyone else's lost revenue is going.

Z28x

$119.50 today seems like only yesterday it broke $100 for the first time ever.

92RS shearn

I wonder if this will cause a comeback in popularity for manual transmissions? The new Cobalt XFE is only applicable for ones with a manual.

guionM

Seriously doubt we'll ever see manuals come back.

They simply aren't available in most all cars. The Ford Fusion and the Pontiac G6 are pretty much the only US midsize sedans that offer a manual. Next, the primary buyer of subcompacts (young females) overwhelmingly choose automatics. Crossovers, which are on the fast track to passing SUVs in short order if they already haven't are all automatics. Many pickup trucks have also dropped manual transmission options.

Actually, I think we'll see an increase in the popularity of automatics. With manumatics, tap-shifts, the ease of programing automatics to get high fuel economy, the ease of certifying one transmission instead of 2, I think manuals are becoming an endangerd species.

ProudPony

Agree re: manuals.

CVTs are the way-in to max fuel economy until we go electric drive motors at the wheels.

shock6906

Eric Bryant

I'd argue that DCT is a better alternative from several standpoints.

R377

The weakened US dollar isn't as responsible as many folks make it out to be. For example, compared to the Canadian dollar, we've been basically at par since last October. In that same time period, oil has gone from ~$75/bbl to $115/bbl. That's a 50% increase in the price of oil with virtually no change in the currency exchange.

As noted above, the supply/demand equation is also not responsible for the increase, with demand slightly down and supplies constant or even increasing.

The biggest factor in the increase in oil prices is speculation. With the credit crisis and the shaky US dollar, investors have been searching for a safe haven for their money. At the moment, that safe haven is commodities like oil, gold, copper, etc. I can't find a link to the article so this is an approximation from my memory that you'll have to take on faith, but 15 years ago the amount of money invested in oil futures was something like $8 billion. Today, it's something like $250 billion. Throw that much money into anything (say, tech stocks or real estate ...) and you cannot escape a huge run-up in the prices. And as long as the prices keep going up, more money is going to flow in and the bubble is going to keep bigger. Of course bubbles eventually burst, but almost never as soon as people think, and in this case probably not as loudly as the housing bubble because (unlike housing or tech stocks), overall demand will continue to rise and soften the blow of a bursting bubble.

bossco

Yup, IIRC 2007+ for TPMS, just like stability control for all 2012+ vehicles (IIRC).

90rocz

I see a lot of this going back to the lost manufacturing base, and middle class, at least working middle class.

Which to me, helped trigger the so called mortgage crisis, people earning half what they used to, couldn't afford mortgages that were straning them already. Or new vehicles or any other pricey neccessities.

Then the interest cuts to help the slowed spending from the mortgage crisis, only weakened the dollar more and boosted inflation. As well as borrowing trillions for the war.

Now the high gas prices, as well as the price of everything else it raises with it, will probably be the nail in the coffin for many middle class people, knocking them back into a lower class.

Seems like everything right now seems to be stuck in a catch 22 loop of lower wages, higher fuel prices, and weaker dollars, and bargain shopping...

I'd like to see more effort go into alt.fuel sources, like the cellulous etc, than mandating cars get 36mpg. Cutting our dependence would have a larger, longer lasting impact of crude prices, I think.

(edit: Oh yeah, I paid the most , for reg unleaded gas today, in my life...$3.59/gal.!!!)

GTOJack

I filled up a few days ago at $3.45 and yesterday it was up to $3.65. Some people are predicting civil disobedience as many working people wont be able to support their families.