Eric Shafer

[Eric Shafer @edgeiseric]

@vxunderground If I call it "virtual intelligence" instead of "artificial intelligence" or "super intelligence", does that make me a double enemy? Or less of an enemy?

Either way, hello fellow enemy!

[Eric Shafer @edgeiseric]

And that gap is from the input costs (to the refiners) and the output sale price (finished fuel from the refiners), correct?

So, oil went up X, but cost of finished fuel is now up Y, and Y > X.

The gap between Y and X is the excess profit. That's what I'm specifically talking about.

[Eric Shafer @edgeiseric]

I said, "Correct. Supply & demand do." regarding pricing in the market. Supply is down, due to the Iran war, which was argued by this administration as being an emergency. Demand at the same (or arguably higher) levels, with diminished supply, results in prices rising. Oil refiners have raised prices higher than their input costs, which is why they have record profits. Which, under normal economic circumstances, is fine. Under an emergency situation, it's not. It's price gouging, and it's illegal under federal law.

[Eric Shafer @edgeiseric]

No, the fact that it's happening during an emergency is what makes it gouging. Same as if a hurricane was going on. During a hurricane, demand for gas increases. Therefore, price would normally increase. Emergency declaration means stations can't raise prices. Trump invoked emergency regarding Iran to obtain the funding and authorization to transfer weapons.

Somehow, you managed to miss that premise which is the most important part.

[Eric Shafer @edgeiseric]

If it was supply chain only, why are the refiners reporting record profits?

It gets very tiring dealing with disingenuous arguments. Yes, everyone is aware there’s a war and supply chain disruptions. That’s why the administration has floated an export ban. Which would specifically address the supply chain by increasing domestic supply and removing foreign demand.

But none of that explains increased refiner profits, as constrained supply leading to higher costs would lead to lower profitability if refiners didn’t raise prices to market. But they not only raised prices, they raised prices more than the input supply increase which is why profits went up.

I welcome any explanation as to the record profits other than this.

[Eric Shafer @edgeiseric]

@GasBuddyGuy That's correct, supply & demand do. But Valero, Exxon Mobil, Conoco Phillips, etc. are reporting record profits. That's the evidence that they're price gouging. If they were maintaining profitability, that would be evidence of stable pricing.

[Eric Shafer @edgeiseric]

If you think we have free market capitalism in the USA oil industry, you're dumber than your username (which is saying something).

If you'd read my other response, you'd have seen that I favor deregulation and free market capitalism. But we don't have that, and aren't getting it, so in the meantime, allowing an unchecked cartel to price gouge is the wrong move.

[Eric Shafer @edgeiseric]

No, because in communism, the means of production are owned by the state. In this instance, the means of production are owned by a regulatory-capture monopoly of a handful of refiners, which enables them to engage in anticompetitve cartel behavior.

"In a true free market, economic cartels can temporarily form, but they are notoriously unstable and tend to collapse without government enforcement. Individual members can undercut the cartel price to steal market share. High cartel prices attract new competitors into the open market. Contracts fixing prices are legally unenforceable without state backing."

So, big government enabling regulatory capture = anticompetitive cartel. Big government invokes emergency measures to engage in military operation that drives oil and gas prices higher. Cartel sees opportunity to derive record profits (see recent earnings reports). I'd prefer true free market capitalism, but there is zero chance at that, so this measure at least would rectify the immediate harm of the cartel.

Great question though, important to remind X users that communism and corporate cronyism are much more similar to each other than free market capitalism.

[Eric Shafer @edgeiseric]

@ekwufinance Stop. Letting. Oil & Gas Companies. Price. Gouge. During. Emergencies.
https://t.co/vNEMTInwiz

[Eric Shafer @edgeiseric]

The simplest way for the @realDonaldTrump administration to get oil, gas and diesel prices down is not an export ban. It's to use have @ToddBlanchvv at DoJ to send letters to oil & gas companies ordering them to disgorge excess profits derived from price gouging during a national emergency.

Gas stations can't raise prices during a hurricane because it's an emergency. If the Iran operation was important enough to engage in, it was a national emergency, which prohibits companies from deriving profits from the emergency.

To execute the disgorgement, oil & gas companies would be required to use the excess profits derived to this point to buy down the price at the pump for Americans, thus returning the unjust enrichment to the consumer. Failure to disgorge would result in DoJ sanctions against the companies that fail to comply.

Simple, straightforward, legal and effective, without extra downsides.

[Eric Shafer @edgeiseric]

@Kalshi Meanwhile, Conoco Phillips and Valero are making record profits...
https://t.co/vNEMTInwiz

[Eric Shafer @edgeiseric]

The simplest way for the @realDonaldTrump administration to get oil, gas and diesel prices down is not an export ban. It's to use have @ToddBlanchvv at DoJ to send letters to oil & gas companies ordering them to disgorge excess profits derived from price gouging during a national emergency.

Gas stations can't raise prices during a hurricane because it's an emergency. If the Iran operation was important enough to engage in, it was a national emergency, which prohibits companies from deriving profits from the emergency.

To execute the disgorgement, oil & gas companies would be required to use the excess profits derived to this point to buy down the price at the pump for Americans, thus returning the unjust enrichment to the consumer. Failure to disgorge would result in DoJ sanctions against the companies that fail to comply.

Simple, straightforward, legal and effective, without extra downsides.

[Eric Shafer @edgeiseric]

@realMAG1775 @WhiteHouse And yet, Conoco Phillips and Valero are making record profits...
https://t.co/vNEMTInwiz

[Eric Shafer @edgeiseric]

The simplest way for the @realDonaldTrump administration to get oil, gas and diesel prices down is not an export ban. It's to use have @ToddBlanchvv at DoJ to send letters to oil & gas companies ordering them to disgorge excess profits derived from price gouging during a national emergency.

Gas stations can't raise prices during a hurricane because it's an emergency. If the Iran operation was important enough to engage in, it was a national emergency, which prohibits companies from deriving profits from the emergency.

To execute the disgorgement, oil & gas companies would be required to use the excess profits derived to this point to buy down the price at the pump for Americans, thus returning the unjust enrichment to the consumer. Failure to disgorge would result in DoJ sanctions against the companies that fail to comply.

Simple, straightforward, legal and effective, without extra downsides.

[Eric Shafer @edgeiseric]

@lawyer4laws @SteveGuest @ScottJenningsKY And yet, Conoco Phillips and Valero are making record profits...
https://t.co/vNEMTInwiz

[Eric Shafer @edgeiseric]

The simplest way for the @realDonaldTrump administration to get oil, gas and diesel prices down is not an export ban. It's to use have @ToddBlanchvv at DoJ to send letters to oil & gas companies ordering them to disgorge excess profits derived from price gouging during a national emergency.

Gas stations can't raise prices during a hurricane because it's an emergency. If the Iran operation was important enough to engage in, it was a national emergency, which prohibits companies from deriving profits from the emergency.

To execute the disgorgement, oil & gas companies would be required to use the excess profits derived to this point to buy down the price at the pump for Americans, thus returning the unjust enrichment to the consumer. Failure to disgorge would result in DoJ sanctions against the companies that fail to comply.

Simple, straightforward, legal and effective, without extra downsides.

[Eric Shafer @edgeiseric]

@haditaheri Make them disgorge the windfall:
https://t.co/vNEMTIo487

[Eric Shafer @edgeiseric]

The simplest way for the @realDonaldTrump administration to get oil, gas and diesel prices down is not an export ban. It's to use have @ToddBlanchvv at DoJ to send letters to oil & gas companies ordering them to disgorge excess profits derived from price gouging during a national emergency.

Gas stations can't raise prices during a hurricane because it's an emergency. If the Iran operation was important enough to engage in, it was a national emergency, which prohibits companies from deriving profits from the emergency.

To execute the disgorgement, oil & gas companies would be required to use the excess profits derived to this point to buy down the price at the pump for Americans, thus returning the unjust enrichment to the consumer. Failure to disgorge would result in DoJ sanctions against the companies that fail to comply.

Simple, straightforward, legal and effective, without extra downsides.

[Eric Shafer @edgeiseric]

@spikeballchris Messaged you - badged META business partner + performance marketing agency owner, would be a great fit to discuss.

[Eric Shafer @edgeiseric]

Alternately, the US government could get out in front of the problem and announce DoJ investigations into all the fraud, misrepresentations, astroturfed PR campaigns and circular Enron-style financing.

The AI trade is part of the reason that US government bond yields are surging, and the AI trade is based on a lot of fraud, so it might be a wise decision to get that fraud under control and also help Treasury bonds in the process.

[Polymarket @Polymarket]

JUST IN: Trump reveals the U.S. government may take financial stakes in OpenAI & Anthropic, similar to its deal with Intel.

[Eric Shafer @edgeiseric]

@HenrikZeberg what do you expect when the Fed is managed by people who haven't experienced the real world economy in years, if not decades, or ever?

Economics 101 - raising rates can't conjure up barrels of oil, so the only way to get oil prices down is to crush demand - price follows S&D curve.

Economics 201 - raising rates means more cost on debt service, means more money printing, means inflation, means another market pump until...

Economics 202 - rapid market crash with contagion of fear + algo driven selling + nonexistent fundamentals = deflation due to wealth wipeout.

https://t.co/GJiJ1Yh2ft

[Eric Shafer @edgeiseric]

At this point, it's quite clear that the Federal Reserve board needs to be replaced in its entirety by people who have actually worked in the real world economy. The current Fed looks in the rearview mirror to see where we're going. That's not how you drive forward.

Fundamentally, outside of the AI trade and the top 10 S&P companies, the US (and global economy) is borderline nonfunctioning at the moment.

In 2022, the Fed said inflation was "transitory" despite having evidence of 2 different types of inflation (supply shock-driven, and liquidity-driven). Unsurprisingly, when you print a ton of money, hand it to the economy, at 0% interest rates, you will get massive inflation growth from too much liquidity that is too cheap.

In 2026, the Fed hiked back into a "higher for longer" narrative despite the fact that only 1 type of inflation (supply shock) is plaguing the economy, and hiking rates does not magically conjure up barrels of oil or gallons of gasoline.

In order for higher rates in 2026 to drive prices down, the Fed would have to cause demand destruction (read: recession, delinquencies, bankruptcies), otherwise the supply & demand curve from Economics 101 tells you that prices will not come down (because rates can't increase supply, so prices can only come down if demand drops. But demand for oil and gas is largely non-discretionary, so demand doesn't just easily cut back).

Meanwhile, the bond market (which is quite a bit more intelligent than the people working at the Federal Reserve, apparently), correctly sniffed out the reality that the Fed hiking rates and not working in tandem with Bessent to get yields DOWN, simply results in the US Government having to print more and more money simply to pay the debt service on the national debt, which of course, drives yields even higher as they anticipate more financial instability caused by this process, making it a vicious cycle.

Not to mention it became clear that Warsh at Fed is working directly against the goals and plans of Bessent at Treasury. Signaling miscommunication and incompetence is unlikely to lead to market confidence, and obviously bonds reacted.

The correct courses of action would be the following:
1. Look in front of where we are, not backwards. Past performance doesn't guarantee future results.
2. Warsh should convene an emergency meeting, state that the data has changed and the Fed is adjusting their analysis of data going forward, and reverse the rate hike he just did (and quite franky, cut rates another 25 basis points on top).
3. Warsh should then issue a statement that he will be having regular meetings with @SecScottBessent to enact policies to meaningfully drive yields lower.
4. Warsh should state as well that the Fed will not begin QE, as this will avoid the pitfall from the COVID years where not only were rates low, but liquidity was too high and therefore there was too much cheap money.

This policy will allow the yields to come down globally, with the world's largest central bank working in tandem with the most powerful government and economy, while not flooding the market with liquidity that could accidentally drive prices higher.

[Eric Shafer @edgeiseric]

Funny enough I posted about this exact phenomenon - if it's illegal to price gouge during a hurricane, it's illegal to price gouge during a "war" that was sold as a national emergency situation.

Valero is obviously price gouging, because their profits increased massively during the war.

I wrote about what DoJ should do here:
https://t.co/wSBOD8qhzw

[Eric Shafer @edgeiseric]

The simplest way for the @realDonaldTrump administration to get oil, gas and diesel prices down is not an export ban. It's to use have @ToddBlanchvv at DoJ to send letters to oil & gas companies ordering them to disgorge excess profits derived from price gouging during a national emergency.

Gas stations can't raise prices during a hurricane because it's an emergency. If the Iran operation was important enough to engage in, it was a national emergency, which prohibits companies from deriving profits from the emergency.

To execute the disgorgement, oil & gas companies would be required to use the excess profits derived to this point to buy down the price at the pump for Americans, thus returning the unjust enrichment to the consumer. Failure to disgorge would result in DoJ sanctions against the companies that fail to comply.

Simple, straightforward, legal and effective, without extra downsides.

[Eric Shafer @edgeiseric]

At this point, it's quite clear that the Federal Reserve board needs to be replaced in its entirety by people who have actually worked in the real world economy. The current Fed looks in the rearview mirror to see where we're going. That's not how you drive forward.

Fundamentally, outside of the AI trade and the top 10 S&P companies, the US (and global economy) is borderline nonfunctioning at the moment.

In 2022, the Fed said inflation was "transitory" despite having evidence of 2 different types of inflation (supply shock-driven, and liquidity-driven). Unsurprisingly, when you print a ton of money, hand it to the economy, at 0% interest rates, you will get massive inflation growth from too much liquidity that is too cheap.

In 2026, the Fed hiked back into a "higher for longer" narrative despite the fact that only 1 type of inflation (supply shock) is plaguing the economy, and hiking rates does not magically conjure up barrels of oil or gallons of gasoline.

In order for higher rates in 2026 to drive prices down, the Fed would have to cause demand destruction (read: recession, delinquencies, bankruptcies), otherwise the supply & demand curve from Economics 101 tells you that prices will not come down (because rates can't increase supply, so prices can only come down if demand drops. But demand for oil and gas is largely non-discretionary, so demand doesn't just easily cut back).

Meanwhile, the bond market (which is quite a bit more intelligent than the people working at the Federal Reserve, apparently), correctly sniffed out the reality that the Fed hiking rates and not working in tandem with Bessent to get yields DOWN, simply results in the US Government having to print more and more money simply to pay the debt service on the national debt, which of course, drives yields even higher as they anticipate more financial instability caused by this process, making it a vicious cycle.

Not to mention it became clear that Warsh at Fed is working directly against the goals and plans of Bessent at Treasury. Signaling miscommunication and incompetence is unlikely to lead to market confidence, and obviously bonds reacted.

The correct courses of action would be the following:
1. Look in front of where we are, not backwards. Past performance doesn't guarantee future results.
2. Warsh should convene an emergency meeting, state that the data has changed and the Fed is adjusting their analysis of data going forward, and reverse the rate hike he just did (and quite franky, cut rates another 25 basis points on top).
3. Warsh should then issue a statement that he will be having regular meetings with @SecScottBessent to enact policies to meaningfully drive yields lower.
4. Warsh should state as well that the Fed will not begin QE, as this will avoid the pitfall from the COVID years where not only were rates low, but liquidity was too high and therefore there was too much cheap money.

This policy will allow the yields to come down globally, with the world's largest central bank working in tandem with the most powerful government and economy, while not flooding the market with liquidity that could accidentally drive prices higher.

[Eric Shafer @edgeiseric]

@barbra652637 And it will continue until that changes. It won't stop me from calling it out though.

[Eric Shafer @edgeiseric]

"If the IRS Criminal Investigation (CI) unit establishes that a business or a third-party promoter willfully falsified employment duties or worker data to claim R&D credits, the responsible individuals can face severe criminal penalties:

Criminal Tax Evasion & Fraud: Under IRC Section 7201 (Tax Evasion) or Section 7206 (Fraud and False Statements), willful tax fraud can carry prison sentences of up to 5 years per offense and substantial criminal fines."

[Watcher.Guru @WatcherGuru]

🇺🇸 $META classified Mark Zuckerberg as a "researcher" to claim a $355,000,000 tax break on his $4 billion compensation in 2013, NYT reports.

The IRS is now trying to recover the $355 million in tax savings.