WRONG - SALES TAX IS CHARGED ON THE NET PURCHASE PRICE OF THE GASOLNE COST, IN CHICAGO SALES TAX IS 10.5% SO THE PRICE OF A GALLON SAY WAS $5.00 6 MOS. AGO,
$5.00 - (FED & STATE EXCISE TAXES) = NET PURCHASE PRICE
MULTIPLY NET PURCHASE PRICE TIMES 10.5% WHICH IS ADDED.
Illinois (Gas19, 21.5 Diesel, 7.35 other) “Other Taxes” include a 6.25% local sales tax (local sales tax can vary between 6.25-10.5%, or higher) and a 1.1 cpg UST. The sales tax calculated off the retail price less federal and state excise taxes.
10 GALLONS AT $5.00 = $50 PURCHES Federal & State Excise Taxes are per gallon fixed and subtracted from total purchase to figure NET PURCHASE FOR ST-1 (Sales Tax for State w/incl. local and county sales tax rate per dollar amount) In Chicago it is 10.5% (6.25% for state and 4.25% for City & Local)
$50 TOTAL RETAIL PURCHASE = $50 - EXCISE TAXES = NET PURCHASE X SALES TAX FOR CHICAGO 10.5% =
$50 - Excise Tax = (NET PURCHASE) x 10.5% Sales Tax
It is an algorithm..
EXCISE TAX is one tax and it is charged per gallon for Federal Excise and State Excise Tax.
SALES TAX is another tax varies by locality within state of Illinois the varies 6.25% -10.5% on the Net Purchase Price less excise taxes.
It changes daily recently or when gasoline cost change and pumps are reset to charge a fixed amount per gallon, part is for excise taxes the other part is variable sales tax based on the actual selling price per gal. less excise taxes, it is computed on the dollar amount.
Price Per Gallon = Daily Gas Cost (DGC) + Excise Taxed( ET)/gal. + Sales Tax Rate (ST) times Daily Gas Cost (DGC)
June 2014 , DGC = $4.00, ET= .215/gal., ST = 10.5%,
Price per Gallon: DGC +ET + ST x DGC = $4.00 +.215 + .42 = $4.635 Pump Price
December 2014, DGC =$2.60, ET=.215/gal., ST = 10.5%
Price per Gallon: DGC + ET + ST x DGC = $2.60 +.215 + .273 = $3.088
Hence, the Excise Tax stays same, but Sales tax drops from .42/gal. to .273/gal from June to Dec., a 35% drop in state ST.
I would like to add, none of my close neighbors went shopping on Black Friday, we locked up the credit cards in the vault in our safe room and we went Xmas tree hunting in the forest preserve at the end of our block. We forced the kids to do the same and explained to them we are doing our part to end QE and Zero % Interest policies which are blantant discrimination against minorities, since passbook savings is the only investment they can make, with a stagnant income going on 7 years. We had candle lites wrapped in bags (paper and plastic) tied around them and then staked into the ground and hanging on the Evergreen trees, we go out around 3:30-4:00 PM daily to light them, with the whole family. Mind you the more modern folks are waiting in lines shopping at mall stores fighting over more garbage that gets thrown away or donated 3 months later. We don't even buy desert anymore at Jewel, we make double chocolate cake from scratch with REAL BUTTER and chocolate chip cookies with real macadamia nuts with BUTTER. This is the closest to the Christmass' my parents had in the 1930's and it is the best, I was just reading over one of my mothers letters, that she wrote to her sister asking what size was her brothers shirt size for a sweater she was knitting him for Xmas in 1934, she bought real expensive 100% black cashmere, his favorite color, and was puting a black 100% silk lining on the inside. This gift was priceless, I wish I could get a handmade item like that today, but the letter that I saved is worth billions more, because it reminded me what a Klumps Traditional Christmas is all about. BEST XMAS EVER........me and my family will not visit a mall or from Thanksgiving Eve to Christmas Day at all, every meal every gift will be home made....They kids were disappoint at first, but they really turned around when we chopped some addl. evergreens down and gave them to a middle class neighborhood a few miles away. Oh the smile on those kids faces.
I use corn as an ancillary indicator for fuel type commodities, like natural gas, oil, ethanol, etc. Corn isn't just for human consumption, corn ethanol is used in gasoline as an additive, one of the largest one % wise. Corn is also used as a feedstock for the cattle, chicken, pork and alot of others as feed. Hence, when demand drops & prices follow it is an indicator of many commodities. I am surprised you don't watch symbol CORN. CORN is mathematically correlated with non-commodity trades, the economy, productivity, etc.
I live in a gated community in a real nice suburb of Chicago. Every year every really lights up the houses, people are loaded with money and many buy new cars, those commercials you see with a new car with ribbon on, it is common here. I don't think much of those Xmas's. I long for the simple frugal Xmas my parents would always talk about. The snow was cleaner and whiter in those days. There was only one or two cars on the block. Now on my block, I am considered falling behind because you have a 3-car garage not a 4-car garage. And all the money spent on lights and decorations. Most of my neighbors benefit from the QE and "Zero Interest" policy, bankers, investment managers, sports figures, ponzi-businesses, politicians, all making 20-40% increases this year. But the working class folks who can't keep up with inflation in Chicago burbs (prices up 11% in 2014) yet working people wage income stagnant, less than 1% increase. The working people have no mututal funds, stocks dividends, the few hundred or thousand they manage to save is in a savings account getting ,01% interest, many passbook folks who only have a savings account as there only investment are minorities, a good %. Many of those who have 401(k)'s and IRA's, stock accounts are mostly white. So QE and Zero Percent policy is really descrimination and it has grown obscene under the Obama administration. So this year, my block decided not to decorate, not to buy new cars in December, to use candles not electric lights, use free evergreens in the wild for trees and not spend any money for gifts, except for NEGATIVE OIL ETF funds for Xmas gifts to our loved ones, no more material things. I love it, the whole family loves it, we stayed home and roasted chestnus in the firplace and drange how Tradewinds tea and applecider, and had a candlelite lighting with Christmas Caroling with our neighbors. We all imagined about the gold treasures of our Negative ETF's value on Christmas Eve, BEST XMAS EVER.
This is so bad, that if you were any of the people who went and spent too much on Black Friday, I would take the stuff back, take down the Christmas Tree and have a Old Fashion 1930's style Christmas, don't even use electricity, use candles, cut down a neighbors Evergreen or one from the park and hand bake or make gifts. My parents told me before they died, that the happiest times of their lives was the 1930's, there was so much to do, so much leisure time and so much time to spend with family and friends doing fun things. There was very little work or worry and just about any stock you bought at the lows made you a millionaire a decade later.
White Paper on the vertical air pocket descent of Oil prices. Oil affects everything, it is used in everything, it is used to manufacture, transport goods to market, etc. Whole industries are devoted to this commodity, not just the production, but final product industries, manufacturing, utilities, etc. Everyone has economic exposure to the price of oil, even Mortgage REIT's have huge exposure and don't even know it, because these stocks should have dropped 10% or more today. On top of this, many of the Mortgage REIT CEO's are one dimensional, in a radically changing and dynamic world. Mortgage REIT strategies are one dimensional also, invest long and borrow short and use alot of leverage,,.........RADICAL CHANGE is like kryptonite to Superman.
I don't want to single out M-REIT's but they have bought alot of 2-3% mortgages from people who are directly affected by the OIL PATCH CRASH. I am not talking just oil and gas companies, but the people who buy the equipment, who lent them the money who built infra-structure with debt and borrowed money and then the retirement funds who invested retirement portfolios to chase yield in Oil Related industries and yes the CITIES, THE MUNICIPALITIES, THE STATES who built a Road Construction Monopoly with no-bid contracts and borrowed money with taxpayers guarantees who no longer have the revenue guaranteed in the loan crontracts (spelled correctly crontracts are Political Crony Contracts with covenants etc. that will put some minicipalities in liquidation or bankruptcy, i.e., if Gasoline drops from $5 to $2.50, the Federal, State and Local taxes got HALVED. Estimated revenue is halved hence debt service is materially affected.
JUST BASED ON THIS SIMPLE KNOWLEDGE, THE STOCK MARKET SHOULD CRASH 50-70% by XMAS.
Correction, JAPAN, SAUDI ARABIA and CHINA have the least debt to GDP, I put USA by mistake for SAUDI ARABIA. But you guys should have caught that real fast.
SORRY, I WANT TO KEEP MY PERFECT RECORD GOING.
On snap back rallies. Reason, Citi, Chase, BAC are exposed big time to debt and leverage in oil industry clients. Hence, they will do anything to stop the free fall, like today. In 1929 the House of Morgan did the exact same thing, within few days it all sputtered out and collapsed.
LETS SEE IF HISTORY REPEATS, mind you the names have change but the games haven't, i.e., "CITI CALLS A BOTTOM IN OIL".. ...........I believe they made this same call in October when it was 82. It now is 65 -67. I would get in negative oil ETF's on any rallies.
The "THANKSGIVING DAY OIL MASSACRE is real and three big guns are pullings the strings, RUSSIA, SAUDI ARABIA AND CHINA which have very little debt. JAPAN, the USA and CHINA have the least debt to GDP. Hence, who do you think will collapse, the levered to the hilt countries with oil businesses levered on top of the FEDERAL BANKS debt., or the SAUDI's or Russian's who have no debt. gov. or private and are drowing in their own natural oil.
THE GREAT THANKSGIVING DAY OIL CRASH is just a picnic for the Santa Day Massacre coming in 30 days.
What does that have to do with the Trillions of assets that will be gotten at fire sale prices. Some of these Oil Barrons in USA have lost 50% of their wealth in 6 months, there is a lot of redistribution of wealth going on as we speak. Hamm, Icahn, Buffet all loosing $10's of billions of dollars in stock wealth as the everyday average Joe, who slogs to work 6 days a week, who has stagnant income and who gets a measely .01% yield on the few hundred dollars he manages to save for his future in his passbook savings account. This is all natural, it is a cycle of ups and downs.
The Saudi's will probably get Ford this time around and the Russian's will probably walk away with GM. China already got the Hummer Division and Germany got Chrysler in the last recession. People who borrow too much ussually end up loosing everything. I wonder how much leverage the M-REIT business has?????? I believe this will be a very very very Black December, like I predicted, it will go down in the history books.
The IEA, International Energy Association says this:
“While falling prices may well trim investment in US light tight oil, such potential cuts should not be misconstrued as a production drop, and indeed would likely pale in comparison with recent gains in LTO productivity,” it said.
“Cost reductions and efficiency gains in LTO production have been constant, and price pressures would only provide more impetus for producers to cut costs further.”
In other words, the US shale boom is not going away, and unless there is supply disruption elsewhere in the world, it is hard to see where any upward price correction could come from.
So, the IEA thinks this represents a permanent shift in oil market dynamics.
“Economic development no longer spurs oil demand growth as it once did, especially in the absence of wage gains. China, the top source of incremental oil demand in recent years, has entered a less oil-intensive stage of development, while years of high prices have let innovative technologies unlock untold resources in North America and likely soon elsewhere,” it said.
“The steeper they are, the less sustainable oil price swings tend to be. But a return to previous price highs may not be a close prospect, as it is increasingly clear that we have begun a new chapter in the history of the oil markets.”
If you look at historical charts, BP fell 60-65% from the charts in early 1980's. Hence, I can see this happening again, A REVERSION TO THE MEAN during glut times. Hence, take 60% off of 54, we come up with $22.00 TARGET PRICE within two years. This definately is not a time to own this or buy this. It is a good time to short oil stocks, all of them. Reversion to the mean.
Not for 6 years jack wagon. You had better wake up to facts. High oil prices only induce allocation of capital to production, like the late 1970's and early 1980's, which led to a 6 year "Oil Patch Recession" that took oil stocks down 75-90%, Big Banks went under (Continental Bank of Chicago, Bank of New England, Big one in Texas). Oil states defaulted on muni-bonds and pension funds lost huge amounts, some even went under. The price war lasted 6 years and the USA was the worst hit since all the mid-eastern oil producing countries had no debt, the USA was loaded with debt. This time the USA IS REALLY REALLY REALLY LOADED WITH DEBT BIG TIME and this will be history making. I am being conservative in estimating 6 years, it could end up like Japan with a 25-30 recession.
Remember the Alamo.......Remember the Oil Patch Recession of the 1980's........capital was misallocated to oil production due to high prices, markets became more efficient and usage plummetted as supplies swelled. WELL GUESS WHAT.......HISTORY HAS REPEATED AGAIN..........HA HA HA HA HA........we have only seen half of the curve or cycle the last five to six years, the next 6 years will be like the "Oil Patch Recession" of the 1980's, it will take down banks, send whole states into insolvency, except this time their is godzillions more debt and leverage. I do think the Saudi's and Russia are doing the right thing, Saudi Arabia and Russia are debt free, it is ussually the debtor nations like Europe and USA and JAPAN that will be going down in this recession and the countries with cash will have opportunities of a lifetime to clean-up the mess.
The next six years will be very similar to the 1980's "Oil Glut Recession". This time, there is six times more overproduction or supply was artificially increased with "Zero % Interest Rates" and QE Fed. Policies. Capital misallocated to oil production for yield.
The 1973 and 1979 energy crises had caused petroleum prices to peak in 1980 at over US$35 per barrel (US$100 in today's dollars). Following these events slowing industrial economies and stabilization of supply and demand caused prices to begin falling in the 1980s. The glut began in the early 1980s as a result of slowed economic activity in industrial countries (due to the 1973 and 1979 energy crises) and the energy conservation spurred by high fuel prices. The inflation adjusted real 2004 dollar value of oil fell from an average of $78.2 per barrel in 1981 to an average of $26.8 in 1986.
In June 1981, The New York Times stated an "Oil glut! ... is here"[ and Time Magazine stated: "the world temporarily floats in a glut of oil," though the next week a New York Times article warned that the word "glut" was misleading, and that in reality, while temporary surpluses had brought down prices somewhat, prices were still well above pre-energy crisis levels. This sentiment was echoed in November 1981, when the CEO of Exxon Corp also characterized the glut as a temporary surplus, and that the word "glut" was an example of "our American penchant for exaggerated language." He wrote that the main cause of the glut was declining consumption. In the United States, Europe and Japan, oil consumption had fallen 13% from 1979 to 1981, due to "in part, in reaction to the very large increases in oil prices by the Organization of Petroleum Exporting Countries and other oil exporters," continuing a trend begun during the 1973 price increases.
After 1980, reduced demand and overproduction produced a glut on the world market, causing a six-year-long decline in oil prices culminating with a 46 percent price drop.
Excuse me once again, this is not even the facts, it is just another title with some propositions, rough draft with spelling arrors. What will cause the trend of new highs to change, my proposition is that Funds will want to make up losses from their energy investments, they have pushed up Blue Chips to record highs while selling into the dumb new high momentum money, but this trade is very stretched, I believe sometime around Christmas or after, they will throw in the towel on new highs and start shorting to make up for extreme energy margin losses. The Hedge Funds will be just as dilligent on the ride down as there were with the vertical ascent up, it is like a Ferris Wheel, what goes up must come down. It worked with gold, silver, oil, commodities, oil stocks, debt, and now.................YOU DRAW YOUR OWN CONCLUSIONS..........IT IS REALLY YOUR MONEY.
Not made up and not that simple. My analysis is too big to put on a message board, my executive summaries are too big. My one - ten sentence titles like what you read are just that a descriptive title of some conclusion with maybe an inference of a proposition. The probability of STOCKS falling hard is very high based on very accurate data and probabilities. I talk about oil and commodities alot for past 12 mos., gold, silver, oil all falling, linear trend down. The aggregate affects on hundreds of vaiables are calculated and then probability distributions to predict outcomes. Some of my specific conclusions with 100% degree of confidence will be listed, you tie them together and draw your own conclusions:
1. Central Bank of OIL, OPEC - Is Popping the Bubble in Crude Prices, this is very similar to the Easing of Real Estate Prices in mid to late 2000's. They want to see what the market will take and who can survive. Its a Free Market.
2. Russia is slipping into RECESSION, it was starting after Obama's sanctions, now with dropping oil prices it will be a 'GREAT RECESSION". Venezuela, Saudi Arabia, Brazil, Nigeria, Iran, Iraq, Norway, Japan, China, too many to list are going into or are in recession.
3. Energy stocks just started falling, January will see emergency debt issues at double digit yield fail, and reorganization and insolvency of the loaded with debt and leverage ENERGY IMPLODES.
4. HEDGE FUNDS AND INSTITUTIONS loaded with stocks won't be able to raise cash, no one left to buy, will go into SHORT ETF's in droves to hedge against losses, EVERYTHING CRASHES, FREE MARKETS WILL REIGN ONCE AGAIN.
The biggest opportunity right now is this, from my perspective. I got ERY at $14, it is $21 and it will be 40-50 by Xmas. That is the biggest gain from my mathematical calculation, with high degree of confidence. Questioning why a sell-off occurs, like the one we hace in June, July August Sept, and Oct and now Nov., why would you question a trend, backed up with lots of good data and facts, supply/demand is on the shorts side, I mean the probability of gain is sky high. I am not going to question something that is a golden goose. Also, is energy collapse occurs, that means many many oil cos. and debt issues will default, this could take down banks big ones like mid 1980's, remember Continental, Bank of New England, and thatbig Savings and Loan, I think it was American S&L in Texas, and the OIL PATCH RECESSION, yes sir, sharp drops in oil do bring on RECESSIONS. This time it will be worst, becasue banks lent to oil companies 5X what they did in 2009 and everyone thought oil was the safest asset ever. I am going to really enjoy watching everything unwind, the next two years are going to be a big moneymaker. PS, so many funds and hedge funds go stuck with oil investments, that they are buying ERY to short ALL ENERGY as a hedge to unsaleable oil shares, the float is too thin or energy common stocks.
Why buy common stocks, the bonds have fallen and yields will approach 20% when oil hits $50/barrel at Xmas, the bonds will yield higher and will get all the oil assets at BK court. Common is too risk and divy could be cut, bonds will always pay.