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This is absolutely garbage, and doesn't belong on HN. From their 'analysis': "Record profits on petroleum and mining activities (reinforced by a spike in glob

by Khaine 4y ago

This is absolutely garbage, and doesn't belong on HN. From their 'analysis': "Record profits on petroleum and mining activities (reinforced by a spike in global oil and gas prices following the invasion of Ukraine) led this surge, but the overall corporate sector experienced the most rapid growth in profits of any comparable period in 35 years." So because of global shortages, commodity prices reached record highs, and companies most of which are price takers benefited from that, is now suddenly corporate greed? BHP doesn't set the price for Iron Ore, the market does. BP doesn't set the price for Oil or Natural Gas, the market does. When you cut off Russia who are a key supplier of those goods, that creates shortages and causes prices to spike. This means companies which extract those goods will make more money as long as costs remain the same. Most companies aren't making record breaking profits, their profits are rebounding to pre-COVID levels. Of course they look good compared to COVID times, when demand was suppressed.

sander27home 4y ago
[flagged]
telchar 4y ago
It’s so wrong to pretend that sellers don’t have a say in how much they ask for their goods that it borders on disingenuous. To blame the market (as if that existed apart from buyers and sellers) is to ascribe agency to something which is wholly responsive in fact. If buyers are willing to pay $80 for a barrel of oil, must BP ask for $80 and not a cent less? Of course not. You may claim they are right to do so, but don’t pretend they have no choice and therefore no blame if there are ill effects to such pricing.
- gruez 4y ago
  >If buyers are willing to pay $80 for a barrel of oil, must BP ask for $80 and not a cent less? Of course not. You may claim they are right to do so, but don’t pretend they have no choice and therefore no blame if there are ill effects to such pricing. Since we're talking about commodities, prices are most likely set by bids/asks from all participants, rather than your model of a shopkeeper deciding what to write on price tags. If the current bid/ask for crude is at $90/$91, then there's no reason why BP should sell their oil at $80. Doing so would just end up giving $10 worth of value to whomever accepts BP's offer. In fact, you can even make it a business, by beating everyone else to the punch, buying oil at $80, then selling it back to the market at $90. The only way to avoid this is to sell the oil at market prices.
- kaushikc 4y ago
  During drought, I can sell a glass of water to people dying of thirst for a bag of gold.
stephen_g 4y ago
In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. I think the report definitely could have been better written, because a lot of the inflation is more due to passing on external cost increases, or domestic businesses raising their prices to account for inflation, and all keeping the same margins, hence resulting in larger profits in nominal terms. So I think it would have been more accurate if they’d put it that way. The important thing is that it’s not demand driven - the RBA talks every update how scared they are and how important it is for them to avoid a “wage-price spiral”, which is nonsense. Median wages here have barely kept up with inflation for 10 years, and now they have gone strongly backwards. Absolutely no sign of any kind of spiral…
- gruez 4y ago
  > In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. As someone who isn't from Australia, can you provide some actual figures, preferably with historical comparison? Without specifics "record profits" doesn't mean much. The most banal interpretation is that profits in nominal dollars went up, which is totally expected given that the economy grows and there's inflation, making it almost guaranteed that each year has "record profits" even if all else was equal.
  - naasking 4y ago
    I won't speak to Australia, but Rep. Porter did a decent job of that here: https://youtu.be/udITRL9-t08 https://youtu.be/udITRL9-t08
    - gruez 4y ago
      I'm not sure whether youtube is broken for me, but the linked video caps out at 480p resolution and on top of that it's letterboxed. As a result it's impossible to see what the chart is actually saying, or where the data is sourced from. Reading the transcript, the date range for the figures is "pandemic period" and "recent period", which means the comparison is probably bunk as a result of cherry picking.
bboygravity 4y ago
Yeah. Im sure global inflation has nothing to with cheap almost unlimited credit created by central banks around the world all around the same time. Including the one responsible for the world reserve currency: the USD. I mean, if a large group of people with income x, suddenly have access to 2x more credit for a mortgage that would do nothing to say... housing prices right? It blows my mind how media so succesfully can completely steer away everybody from the quite obvious root cause with essentially "hey look, Putin, covid and a Chinese balloon".
PYTHONDJANGO 4y ago
Please explain how "the market" does set a price. Please do not do that in a symbolic, abstract way, please describe based on facts who writes a number into a computer that will be the price. How does this happen? Do you believe that there is a mythical "market" entity that "creates prices"? Then please explain how it works. Thanks!
- drekipus 4y ago
  > please describe based on facts who writes a number into a computer that will be the price. The person selling the goods, with a limited but sole-focused understanding of the competitors, stock coming in, stock going out, and forecasting does the best job he can to set the price that maximizes his individual profits

by Khaine 4y ago

sander27home 4y ago

[flagged]

telchar 4y ago

It’s so wrong to pretend that sellers don’t have a say in how much they ask for their goods that it borders on disingenuous. To blame the market (as if that existed apart from buyers and sellers) is to ascribe agency to something which is wholly responsive in fact. If buyers are willing to pay $80 for a barrel of oil, must BP ask for $80 and not a cent less? Of course not. You may claim they are right to do so, but don’t pretend they have no choice and therefore no blame if there are ill effects to such pricing.

gruez 4y ago
>If buyers are willing to pay $80 for a barrel of oil, must BP ask for $80 and not a cent less? Of course not. You may claim they are right to do so, but don’t pretend they have no choice and therefore no blame if there are ill effects to such pricing. Since we're talking about commodities, prices are most likely set by bids/asks from all participants, rather than your model of a shopkeeper deciding what to write on price tags. If the current bid/ask for crude is at $90/$91, then there's no reason why BP should sell their oil at $80. Doing so would just end up giving $10 worth of value to whomever accepts BP's offer. In fact, you can even make it a business, by beating everyone else to the punch, buying oil at $80, then selling it back to the market at $90. The only way to avoid this is to sell the oil at market prices.
kaushikc 4y ago
During drought, I can sell a glass of water to people dying of thirst for a bag of gold.

stephen_g 4y ago

In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. I think the report definitely could have been better written, because a lot of the inflation is more due to passing on external cost increases, or domestic businesses raising their prices to account for inflation, and all keeping the same margins, hence resulting in larger profits in nominal terms. So I think it would have been more accurate if they’d put it that way. The important thing is that it’s not demand driven - the RBA talks every update how scared they are and how important it is for them to avoid a “wage-price spiral”, which is nonsense. Median wages here have barely kept up with inflation for 10 years, and now they have gone strongly backwards. Absolutely no sign of any kind of spiral…

gruez 4y ago
> In Australia businesses like supermarkets, banks, the largest airline etc. have just announced huge profits in their latest reports. As someone who isn't from Australia, can you provide some actual figures, preferably with historical comparison? Without specifics "record profits" doesn't mean much. The most banal interpretation is that profits in nominal dollars went up, which is totally expected given that the economy grows and there's inflation, making it almost guaranteed that each year has "record profits" even if all else was equal.
- naasking 4y ago
  I won't speak to Australia, but Rep. Porter did a decent job of that here: https://youtu.be/udITRL9-t08 https://youtu.be/udITRL9-t08
  - gruez 4y ago
    I'm not sure whether youtube is broken for me, but the linked video caps out at 480p resolution and on top of that it's letterboxed. As a result it's impossible to see what the chart is actually saying, or where the data is sourced from. Reading the transcript, the date range for the figures is "pandemic period" and "recent period", which means the comparison is probably bunk as a result of cherry picking.

bboygravity 4y ago

Yeah. Im sure global inflation has nothing to with cheap almost unlimited credit created by central banks around the world all around the same time. Including the one responsible for the world reserve currency: the USD. I mean, if a large group of people with income x, suddenly have access to 2x more credit for a mortgage that would do nothing to say... housing prices right? It blows my mind how media so succesfully can completely steer away everybody from the quite obvious root cause with essentially "hey look, Putin, covid and a Chinese balloon".

PYTHONDJANGO 4y ago

Please explain how "the market" does set a price. Please do not do that in a symbolic, abstract way, please describe based on facts who writes a number into a computer that will be the price. How does this happen? Do you believe that there is a mythical "market" entity that "creates prices"? Then please explain how it works. Thanks!

drekipus 4y ago
> please describe based on facts who writes a number into a computer that will be the price. The person selling the goods, with a limited but sole-focused understanding of the competitors, stock coming in, stock going out, and forecasting does the best job he can to set the price that maximizes his individual profits