So you believe that corps have the best interest of the US in mind? I
thought they had the best interest of their shareholders and CEOs in
mind first.
Nobody is talking about nationalizing companies, but you'd rather
deflect any discussion about reasonable regulation.
It's corporations uber alles, nothing less. Wayne wants us to think
corporations don't talk to each other because there are virtually
unenforced regulations against doing so. He obviously spent his working
life working for a large corporation and is rationalizing it.
I honestly don't know why I continue to give you investment advice and
an education in basic economics. Obviously none of it fits in with
your preconceived view of how the world should work, so why bother.
It turns out however that corporations don't really need to collude
(talk to each other secretly) because they, and we, all share in the
same basic information. Most corporations, virtually all of the
successful ones, have a lot of smart people working for them who know
how to act on that information and position their strategy. There is
nothing illegal or unethical about that. Stockholders (us), and the
board of directors (our elected representatives), expect nothing less.
Here's an example: Civil unrest breaks out in a major oil producing
country, in this case Libya. A major European country, which you may
have heard of, Italy, gets most of their oil from Libya. Italians
like to heat their homes in cold weather, and drive their cars just
about all the time, so the thought of losing their oil supply is
somewhat distressing. What do they do to ensure an uninterrupted
supply? Simple, you go to the spot market where unallocated oil is
auctioned, usually by the tanker load. Anyone can bid, no collusion
required. How many tanker loads would you like, and when would you
like it delivered? At the same time that the Italians are ensuring
their future supply, refineries in Texas and Louisiana are booking
their upcoming shipments, but suddenly they are being outbid every now
and then. No responsible refinery operator wants to run out of crude
so they bid a bit higher for the next couple of loads. Meanwhile the
refinery accountants are trying to figure out what they have to charge
in order to cover their costs and make a modest profit to cover
investments in equipment, etc. As soon as they hear that they are
going to be paying more for crude next week, prices for the product
(gasoline and others) are increased. So that's collusion, pretty
much the same thing you'd do with your lemonade stand if the price of
lemons was going up.
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