Auto Gas Prices: Are Canadians Getting Ripped Off?

Canada is a producer and Net exporter (to the USA, etc.) of oil which is used to producer gasoline to run our car and auto vehicles. Car and auto gas prices are set on oil prices, as measured by the "barrel of oil". It costs us in Canada about $40 to produce a barrel of oil in Canada, on average, and the world price of a barrel of oil is about $110. That’s why we see the price at the pump for gas to fuel our car and autos so high > gasoline prices are set based on the underlying cost of the commodity, in this case its a barrel of oil. But if our cost is only $40 a barrel, why then are Canadians paying gasoline at the equivalent of $110 a barrel? Yes, this is ridiculous.

It’s been a few years since I wrote about this last, and thought we were long overdue for this debate. Well, it’s really not much of a debate any longer, thanks to facts coming to surface this time around.

The issue here is the lack of initiative of our federal government to step in and come up with some form of "fair" pricing policy to Canadians. And they don’t have to think or look very far and hard to come up with what policy is used in most other countries around the globe, countries like Canada that are net exporters of oil.  Some countries like Venezuela and Columbia produce oil at a lesser rate than Canada, and the governments in these respective countries have a national pricing policy that brings the average price per litre of car gasoline to about 25 cents!

More likely, the norm for pricing around the globe is as follows:  domestic users (that is, residents of the home country) pay a domestic market price, which is somewhere around cost plus 20% profit margins. Pretty fair. That would put Canada at $40 per barrel cost plus 20% gives us about $48, call it $50 a barrel. That’s still 60% less than the global price of a barrel of oil at $110!  If we enacted this pricing policy, we would be paying about 60 cents a liter at the pump to fill our car and auto vehicles. 60 cents!!! And what we don’t use is sold to the world at global prices, currently at $1.40 a liter or $110 per barrel of oil.

Wake up Canada! This is our country, our natural resource, our commodity.

Written by: Saverio Manzo

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Things To Be Concerned About Regarding This Market

Man this guy is sharp....heed his words...

Thanks Barry R. (The Big Picture)

Whenever we are nearly fully invested (like we are now), my cognitive biases become acutely aware of all the things that could go wrong. (When we are short or in cash, the focus is what could go right)

It is the opposite of confirmation bias I write about so often.

What is it that makes me concerned about our investment posture over the short term — say, the next 30-90 days?

• Hot money seems to be rotating from speculation to speculation, rather than inflows accumulating longer term holdings;

• Traditional measures of Stocks (P/E, return on capital) suggest stocks are no longer cheap; Longer term measures of valuation — Q ratio, Shiller’s 10 year P/E — show stocks are actually pricey; 

• China is on the verge of rolling over, falling nearly 8% in a single session; That wiped out 3 months of gains;

• Defensive sectors — especially health care, but also staples, telecom and utilities — have found a bid. Often telegraphing a reduction of buying by fund managers;
• Way too much cap weight is tied up in a handful of stocks. Apple (AAPL) is responsible for far too much of the Nasdaq gains than is healthy.

• The rally that began March 2009 — now well over 2 years old –  may have gotten ahead of itself;
• The rampant speculation in Silver and its collapse is a reminder that money that piles into a sector very quickly heads out the door ever faster;

• Assumptions about earnings seem to project double digit gains forever;

• The end of QE2 removes a significant bid under equities and bonds. It also will allow the dollar to rally, potentially  punishing  commodity traders;

• While earnings have been good, future guidance from companies is starting to moderate. This does not bode well for earnings supporting SPX 1400-1500 future levels;

• Speaking very generally, the low volume Markets just feel tired here.

What is keeping us long?

None of the usual technical or internal signs of a major correction are present (yet). Supply continues to be constrained, selling pressure is light to moderate, breadth and liquidity are strong.

Giving the markets the benefit of the doubt has been the winning play so far. We expect this to continue to work until it doesn't.

Hopefully, I will be able to warn you in advance before markets get too far gone.

saverio manzo

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A Biblical Prospective on Matters of Finance

A very well written piece with excellent ties to history and religion...on all matters concerning money and wealth...from our good friend Peter Grandich...

The Bible contains over 700 direct references about money, including the
majority of the Parables, and one out of every six verses in the Gospels
concerns itself with the right and wrong use of material possessions. It
clearly states that spirituality goes hand in hand with matters of money. It
teaches us that God is our only true provider and to honor him by being
good stewards with what he has given us. It teaches us that debt in most
cases is not wise and a prosperous life is not measured by what we have in
the bank, but what is in our hearts.

An exclusive AARP-Modern Maturity survey of a random number of
North Americans 18 and over had some very interesting results. The first question
asked was: Do you want to be wealthy? 65% of all people surveyed said
they wanted to be wealthy. By race, caucasians answered ‘yes’ to the
question more than other races. By generation, those ages 18-35 answered
positively more frequent than their older counterparts. And by gender, men
answered ‘yes’ 72% of the time compared to women’s 58%.

When asked what can money buy, the percentage of who chose the answers
is below:

71% - freedom to choose
29% - self-fulfillment
68% - excitement
23% - self-esteem
56% - less stress
19% - happiness
47% - peace of mind
8% - love
34% - good health

When asked Why do you need money?, the results were:
74% - to provide for my family
27% - contribute to worthy causes
68% - get good medical attention
18% - buy more stuff
64% - stay healthy 18% - to travel
34% - have more free time


What Is Money?
Money was created simply to be a means of exchange of work for goods or
service of equal value needed to survive. It is acquired by means of a job,
by investing, owning a business, buying and selling products of labor,
lending money at interest, renting property, etc. In 1891, Pope Leo XIII
promoted the need of a “living wage”. In the era of whoever ends up with
the most toys wins, the living wage has gone the route of the horse and
buggy. Profits are obtained at virtually all costs to individuals.
God had commanded us to “earn your bread by the sweat of your brow”
(Genesis 3:19.) The world today seems “hell” bent on earning as much
money with as little sweat as possible—at least your own.



Is More Money the Answer to Your Problems?

An employee of Henry Ford’s once said his number one goal was to make
a million dollars. Ford gave the man a pair of glasses made of two silver
dollars. When asked what he saw, the man replied, “nothing, the dollars are
in the way.” Ford replied, “When dollars are your only goal, you miss a
host of greater opportunities.”

Jesus Christ said, “You cannot serve both God and money”. No one can
have two masters. It took me a long time and almost cost me my life to
learn money is a wonderful servant, but a terrible master. The more money
we try to possess, the more the money ends up possessing you. It can and
will possess you. Many other problems arise from this obsession, including
willingness to sacrifice our health. The results are virtually the same for
everyone—we spend our newfound wealth trying to get back our health.
Year after year, people cite financial issues as the chief cause of marital
disputes and admit to more worry over wealth than health or any other
facet of their lives, even love! Is it any wonder then why there are more
Bible verses on the subject of money and possessions (16 of the 38 Parables
deal with the use of money) than any other topic including salvation itself.

History is full of people who did just about anything to obtain wealth....


Again, Jesus Christ gave the best advice (he always does) when he told us

the Parable of the Rich Fool (Luke 12:13-21). He never implied the man
was bad or even crazy—only foolish. From all we can make of the Parable,
the man was a cautious, careful investor who came by his wealth honestly.
He didn’t cheat, lie or steal. Jesus also never suggested he was evil. This is
a critical point, as Jesus doesn’t suggest that having money is wrong. First
Timothy is perhaps the most misquoted scripture. We often hear it quoted
as “money is the root of all evil”, when in fact it says, “the LOVE of money
is the root of all evil”. Here too, St. Paul does not condemn money; rather
he condemns our losing perspective regarding its true value.
Having money is okay. In fact, both Jesus and Paul clearly tell us the most
foolish thing we do regarding money is to deny its importance. Jesus clearly
was telling us the rich man was foolish because he “mishandled” money.
“What shall I do?” the rich man thought to himself. “Since I have no place
to store my crops, I will tear down my barns and build bigger ones, and
there I will store all my grain and my goods. And I’ll say to myself, you
have plenty of good things laid up for many years. Take life easy; eat drink
and be merry.”
This is exactly what most financial institutions advertise in their quest to
capture you as a client. They suggest that they can help you obtain the good
life by not having to worry anymore and instead live off your wealth and
relax. THIS IS CLEARLY WRONG FOR TWO REASONS:
• Most financial institutions do not have our best interests at heart
• The pursuit of wealth for the sole desire of personal pleasure is not
what God intends for us.
If you haven’t learned already, you will find that financial security alone
will never bring you real peace. Genuine happiness only comes when we
make a deep commitment to the network of all creation. Happiness comes
from sharing what we have with others. No one proved this more to me
then Jean Paul Getty. In his day, he was one of the richest men in the world.
Yet he was certainly not a happy man. How do I know this? One of his
grandsons was once kidnapped. Getty refused to give the kidnappers a one
million dollar ransom. It wasn’t as if one million would seriously impact
his life, but he stated money would be wasted on any ransom. He also felt
paying would give reason for others in his family to be kidnapped. Forgetting
for the moment he could pay for all his families’ ransoms and still be quite
wealthy, Getty simply ignored the first ransom. Only after the grandson’

ear was cut off and mailed to Getty did he agree to pay. Did the story have
a happy ending? Not really. Oh the grandson was released, minus one ear.
But the fact that Getty demanded his son pay him back for the ransom of
his grandson, suggests strongly Getty was a prime candidate for a Parable.



see attached for full piece....

A Biblical Prospective on Matters of Finance

thanks Peter!

saverio manzo



About me: I give Economic, Social and Global trend briefings from some of the world's brightest minds at my blog http://saveriomanzo.com/ and http://saveriomanzo.blogspot.com/. I also provide true and tested financial planning and wealth advice. Most recently, over the past few years, I have become socially conscious and have been attempting to practise ways in which I can live my life more environmentally friendly.   Along with some truly exceptional friends, we provide consulting and business development for small-medium sized businesses.  In addition, I truly believe in being philanthropic, giving and doing unto other as we would have them do unto us. Some of my fondest resources are from Barry Ritholtz of The Big Picture, David Rosenberg and what Warren Buffett of Berkshire Hathaway is up to behind the scenes, as an example. saverio manzo

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