Think about it from the decision makers side stipulating a few parameters. ie, oil has peaked, prices are unstable, financial collapse possible. For most businesses out there, there isn't any "preparing" that is realistic; and a cost / benefit analysis gets the most value into the hands of the shareholders by continuing as currently running, until the running becomes impossible. Basically a capital pivot plan, DoomedEnterpriseA dumps value to owners, owners use that capital to act on new opportunities as the situation unfolds.
Now, if you could come and say, "In Nov 2013, the US will officially monetize its debt, and the world will be struggling along with half of current oil production"; you'd have a target that one could use to make some competitive business decisions that would in turn place your company at the top of the heap; but without a very specific future time to work with, getting value into the hands of owners as quickly as possible is much more effective. And I think this is exactly what has been happening over the past decade or so; check out "concentration of wealth" articles.
1910 Buggy Whip example... Don't upgrade your buggy whip plant to high efficiency processes when five years from now, no one will be buying buggy whips.
The heavy CEO's know about, understand, and have been acting for years in response to collapse possibilities. Problem is that you guys don't understand who the CEO's work for. They don't work for the GLORY OF CORPORATION #1698345. No. They work for the size of Joe Owner's balance sheet. If collapse kills off #1698345, the employees and dependent community wail and nash teeth; the owners and CEO's wipe their brows in relief thinking, "thank divinity we got our money out in time." Quiet second thought then pops up, "wonder if we can start corp #1832701 and hire these desperate, unemployed slobs at quarter of what the previous corporation was paying! I hear tell, Chinese kids like plastic toys.
Stop believing you have special knowledge. You don't. The people that you would like to influence on the other hand, have a completely different set of objectives that they are pursuing than what you would like them to pursue.
PeakOil is You
Why Aren't Businesses Preparing?
54 posts
• Page 2 of 3 • 1, 2, 3
Re: Why Aren't Businesses Preparing?
by AgentR » Mon 17 Aug 2009, 12:01:34
Yes, we are. As we are.
And so shall we remain; Until the end.
And so shall we remain; Until the end.
-
AgentR - Heavy Crude
- Posts: 1946
- Joined: Fri 06 Oct 2006, 03:00:00
- Location: East Texas
Re: Why Aren't Businesses Preparing?
by The Lorax » Mon 17 Aug 2009, 14:05:43
pstarr - of course you can share with your father. And, I absolutely agree that our monetary system is part of the problem. I would argue that we started confronting resource depletion in the 1970's, and only through exploiting cheap labor in developing countries and through taking on trillions in debt have we managed to maintain the level of growth we have over the past few decades.
Perhaps those actions could be seen as the initial plan of business and government leaders to deal with resource depletion. But what happens when neo-colonialism and debt have exhausted their plausibility?
Perhaps those actions could be seen as the initial plan of business and government leaders to deal with resource depletion. But what happens when neo-colonialism and debt have exhausted their plausibility?
- The Lorax
- Wood
- Posts: 4
- Joined: Mon 17 Aug 2009, 09:23:14
Re: Why Aren't Businesses Preparing?
by AgentR » Mon 17 Aug 2009, 14:14:13
$this->bbcode_second_pass_quote('The Lorax', 'B')ut what happens when neo-colonialism and debt have exhausted their plausibility?
Silver coinage and high median income taxation. Who do you think has more gold and silver in physical possession? The governments and banks, or Joe Average?
Yes, we are. As we are.
And so shall we remain; Until the end.
And so shall we remain; Until the end.
-
AgentR - Heavy Crude
- Posts: 1946
- Joined: Fri 06 Oct 2006, 03:00:00
- Location: East Texas
Re: Why Aren't Businesses Preparing?
by pup55 » Mon 17 Aug 2009, 19:41:35
$this->bbcode_second_pass_quote('', 'W')hat action would that be exactly?
It is pretty funny how this corporate governance thing is working nowadays.
Ostensibly, publicly traded companies are supposed to be like mini-democracies, where the owners, that is the stockholders, each get a vote, and they get to choose the board of directors, who then chooses the CEO...The directors are supposed to be fairly objective in evaluating the performance of the CEO, setting his or her salary, and in general, keeping an eye on how the whole thing is running.
That might have been how it worked back in the mesozoic era, but nowadays, it is not that way.
For one thing, a high percentage of the stock in any of these companies, sometimes up to 80%, is controlled by institutional investors and/or insiders. What that means is that in reality, a dozen or so mutual fund managers own enough shares so that they can effectively control all of the proxy votes, and can vote in who they want....
I will give you an example: Arch Chemical is a producer of miscellaneous chemicals that go into plastics, paints, swimming pools, and a variety of other household uses. they are a fairly boring company, their market capitalization is about 600 millon, and their stock is only down 25% over the last year.
91% of the outstanding shares are held by institutions, such as mutual funds, and of those, 10 mutual funds own more than 50% of the company. So, in essence, the managers of those funds can put who they want on the board. If you want to know what one of these fund managers is like, one need only tune in to Kramer, who is no doubt typical.
These guys want to pick someone they know to run the company (can't really blame them) and needless to say, this is nothing but a good old boy network, where the CEO is handpicked, the CEO then selects his college roommate, his former yes man at his previous gig, a couple of dimwitted college professors, a former US Senator or cabinet member, and any of a number of rubber stamp people to be on the board....
The CEO frequently also sets his own salary.
The qualifications? Well, the 10 or so mutual fund managers are interested in one thing, and one thing alone, which is price appreciation of the stock, and the best way to get the stock to appreciate is to grow....or failing that, to buy back the company shares so it looks as if they are growing....
So as long as things are going fine, the economy is growing, the company is growing, and the stock price is going up, all is well. This is where all of the big CEO bonuses come in.... and where all of the lack of accountability on all of the big bailout TARP scandals has happened.... these cretin boards of directors invariably lack the courage to fire the CEO.... and it takes a shareholder revolt, or revolt of more than 5 of the mutual fund guys to get the guy out the door. This is why Nardelli was fired at Home Depot.... He expanded the company, borrowed a lot of money in the process, and it resulted in zero price appreciation....a faction of the fund managers that own HD hated the guy, and had him run out of town, albeit with a huge severance package...
So, the short answer is: if the company's stock price does not increase, eventually these fund managers will have the CEO fired (if they think it's his fault)....
There are a lot of problems with this approach, not the least of which is that the CEO tends to be some idiot financial guy, who did not come up through the business, and invariably knows nothing about how the business runs. Example: the guy that is now in charge of General Motors has no automotive experience at all.
Another problem is, as we were saying, it's all about growth..... the people involved in this system have no concept whatsoever of a chronically shrinking economy. Most of the mutual fund managers are young people who were not around during the last serious recession, they no idea how to run a business in a stinking economy..
In the specific case of Arch Chemicals, that company was put together in 1999 from spinoffs and castoffs from other companies and the boss, Campbell, has been in place since then. Newsweek has listed the board of directors, and their "relationships" most of which were connections to one or more of the companies that spun them off (Olin and Exxon) and/or people from the mutual fund companies that run the whole thing.
The conspiracy people that inhabit this forum will be delighted to see someone from Rothschild on here....
So many questions...
Is this necessarily good for the economy, the company, the environment, PO preparedness or anything else? I will leave it for you to decide, but to make a long story short, it is clear that this system of corporate governance is completely unable to adapt to a change in the basic, fundamental system because it is being run by a lot of people who do not know or care about the long-term functionality of the business.....
http://investing.businessweek.com/resea ... sp?ric=ARJ
Is there a better way? Well in Europe, one or more of the board of directors spots is sometimes run by the government, and/or one or more of the labor unions that are operating the place. There are strict limits on CEO pay, and it is preferred that the CEO have spent many decades within the business....
-
pup55 - Light Sweet Crude
- Posts: 5249
- Joined: Wed 26 May 2004, 03:00:00
Re: Why Aren't Businesses Preparing?
by Ferretlover » Mon 17 Aug 2009, 19:47:33
One business that is beginning to prepare:
Our credit union's membership has always been based on people who were involved with aviation, or membership acquired by referral from a member. In today's mail, we got a letter and a voting card--the credit union wants to allow the general public in as members.
Guess they're beginning to realize their base is going to get smaller and smaller.
Our credit union's membership has always been based on people who were involved with aviation, or membership acquired by referral from a member. In today's mail, we got a letter and a voting card--the credit union wants to allow the general public in as members.
Guess they're beginning to realize their base is going to get smaller and smaller.
"Open the gates of hell!" ~Morgan Freeman's character in the movie, Olympus Has Fallen.
- Ferretlover
- Elite
- Posts: 5852
- Joined: Wed 13 Jun 2007, 03:00:00
- Location: Hundreds of miles further inland
Re: Why Aren't Businesses Preparing?
by TheDude » Mon 17 Aug 2009, 20:54:41
I won't fire back at this cavalcade of strawmen arguments and blanket suppositions, except for a couple of points:
$this->bbcode_second_pass_quote('peakoilcritic', '2'). The financial collapse is very different to peak oil. A financial collapse cannot be predicted as no one knows what decisions will be made by banks and finance companies in the future, and this is what triggered it.
$this->bbcode_second_pass_quote('peakoilcritic', '2'). The financial collapse is very different to peak oil. A financial collapse cannot be predicted as no one knows what decisions will be made by banks and finance companies in the future, and this is what triggered it.
Aside from puzzling over the idea of a development of a crisis being affected by decisions made in the future, there's a surefire way to tell whether you're in a financial bubble, which is to pull one's head of one's posterior. Watch a video like this one of Peter Schiffon CNBC 4 years ago, being roundly criticized for suggesting that housing prices could ever go down. Or read Galbraith's Short History of Financial Euphoria. This isn't exactly tricky.
As for businesses being unconcerned with peak oil, there's one rather prominent example that has taken the idea seriously. They're called the Toyota Motor Corporation. Energy Tribune - Energy Tribune Speaks With Bill Reinert, Designer of the Toyota Prius
As for other businesses, and also politicians, they have to be aware there's a problem before you can expect them to act. US Representative Roscoe Bartlett has spoken in Congress about peak oil - to a mostly empty chamber. In the US at least the standard response to the idea, if anyone by chance is introduced to it, is that we can drill in areas of the country that are off limits, or exploit corn ethanol and oil shale - the Rush Limbaugh Right Wing posture. Alternatively...literally, we can build enough windmills/solar panels/electric cars in 10 years to wholly shed ourselves of the need to dirty our hands with petroleum in any form - the Al Gore Left Wing posture. Suggesting that things aren't that simple, never mind deluded grotesquely over simplified fantasies, is considered gauche, or alarmist.
Incidentally you could read the work of economists like James Hamilton or Jeff Rubin, who advance the case of oil being of quite serious consequence for the global economy. Also Robert Hirsch, who was commissioned by the Department of Energy to investigate whether a liquid fuels shortfall could be mitigated succesfully; Google Hirsch Report. His conclusion that two decades would be necessary to seamlessly transition to a non-petroleum energy source for transportation is often repeated here.
Cogito, ergo non satis bibivi
And let me tell you something: I dig your work.
And let me tell you something: I dig your work.
-
TheDude - Expert
- Posts: 4896
- Joined: Thu 06 Apr 2006, 03:00:00
- Location: 3 miles NW of Champoeg, Republic of Cascadia
Re: Why Aren't Businesses Preparing?
by rangerone314 » Mon 17 Aug 2009, 22:04:17
$this->bbcode_second_pass_quote('pup55', 'I')s this necessarily good for the economy, the company, the environment, PO preparedness or anything else? I will leave it for you to decide, but to make a long story short, it is clear that this system of corporate governance is completely unable to adapt to a change in the basic, fundamental system because it is being run by a lot of people who do not know or care about the long-term functionality of the business.....
http://investing.businessweek.com/resea ... sp?ric=ARJ
Is there a better way? Well in Europe, one or more of the board of directors spots is sometimes run by the government, and/or one or more of the labor unions that are operating the place. There are strict limits on CEO pay, and it is preferred that the CEO have spent many decades within the business....
http://investing.businessweek.com/resea ... sp?ric=ARJ
Is there a better way? Well in Europe, one or more of the board of directors spots is sometimes run by the government, and/or one or more of the labor unions that are operating the place. There are strict limits on CEO pay, and it is preferred that the CEO have spent many decades within the business....
Pah! What do the Europeans know?
Don't forget, we're American's and our s**t doesn't stink and we're so much smarter and wiser and stronger and hung than those Euroweenies right? I mean surely the sissy Europeans could never bend over and take it up the "ha-ha" from the corporations as forcefully as us tough Americans can. We should consider our hemorrhoids a badge of honor!
An ideology is by definition not a search for TRUTH-but a search for PROOF that its point of view is right
Equals barter and negotiate-people with power just take
You cant defend freedom by eliminating it-unknown
Our elected reps should wear sponsor patches on their suits so we know who they represent-like Nascar-Roy
Equals barter and negotiate-people with power just take
You cant defend freedom by eliminating it-unknown
Our elected reps should wear sponsor patches on their suits so we know who they represent-like Nascar-Roy
-
rangerone314 - Light Sweet Crude
- Posts: 4105
- Joined: Wed 03 Dec 2008, 04:00:00
- Location: Maryland
