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September/October 2012 • vol. 22.5
PERFORMANCE REPORT
PERFORMANCE REPORT
PERFORMANCE REPORT
“We have met the enemy and he is us.” Pogo
Every morning, all across the country, in small towns and
large towns, groups of retired men gather in local co ee
shops to swap stories, gossip and good-natured ribbing.
After the usual exchanges and jokes about surgeries, aches
and pains, and
even erectile
dysfunc-
tion, the talk
often turns
to  nancial
matters in
general, and
incomes in
particular.
Talk ranges
from griping
about high
gasoline and
utility prices
to the exor-
bitant costs
of groceries
and medi-
cal services.
Let’s sit in on
the daily cof-
fee klatsch
at Ken’s
Kafe for a
 rsthand
look at some
revealing
insights pertaining to speculation and the impact it has on
petroleum pricing.
“On the way here, I put gas in my Focus and it cost me
nearly seventy bucks to  ll up!” The speaker was O’Brien, a
retired cop.
“Greedy, blasted oil companies,” exclaimed Jones, a for-
mer trucker now living on a nice Teamsters pension. “There
ought to be a law against their greediness.”
“It’s not just the greedy oil companies, although they
certainly pro t hugely from the high prices,” added Smith,
a retired machinist for a large automaker. “Speculators also
play a large part in driving prices up.”
“You bet your life,” said O’Brien. “Last quarter’s pro ts
were up nearly 400%! I read somewhere that speculators
add as much as 90 cents to the price of every gallon of
gasoline.”
“It’s a darn good thing
my pension is secure,
otherwise I’d never
make it with these
high petroleum
prices,” interjected
Schmalz, a retired
teacher. “I wish
the oil people and
those darn specu-
lators would cut us
some slack!”
“Ain’t gonna
happen,” said
Smith. “The
speculators are
too well funded.
They get piles of
money from all
kinds of invest-
ment institutions
like those big
Wall Street banks.
Heck, in the last
 ve years alone,
money that used
to go to the stock
market went to the
commodities market instead, primarily petroleum commodi-
ties. Those investments went from $13 billion to over $300
billion!”
Schmalz interjected, “Yeah! I heard that 27 barrels of
crude are traded by speculators for every one we actually
use. Imagine that!” He continued, “In fact, I read the other
day that those barrels of crude are bought and sold in name
only...most often no actual oil ever changes hands, only
large amounts of money.”
“Something they call ‘futures’,” said O’Brien. “They sign
contracts to buy or sell crude oil at some date in the future,
(Continued on page 2)
The Motor State Performance Report is compiled and published bi-monthly by the Motor State Distributing Advertising Department StaɈ :
John McLellan • John Berglund • Matt Hauch • Jim Kaekel, Jr. • Michael Kalling • Robin Beachy • Chad Harris
Speculation And Fuel Prices Part II by John McLellan
2011 SEMA Warehouse of
The Year Award Winner
INSIDE INFORMATION
• Information and Viewpoints •
Speculation And Fuel Prices Part II .......1, 2
• Allstar •
New Allstar Product ................................2,3
• Manufacturers Spotlight •
Eastwood ...............................................3,4
• New Product Showcase •
TechMate, Husky Liner, Loctite, JBA, FST . 5,6
• Charlie Jobber •
Five Types I Can Live Without ...................7,8