The huge spike in the BofAML High Yield CCC’s that we noted last week is proving to be a real event, real trading and possibly a wholesale reset of the whole funding and liquidity environment. This is far, far more serious than just oil trading below $40 once more.. and brings the death of "transitory."
With prices below $50, what is a stripper to do?
FCX announced today that its Board has suspended its annual common stock dividend of $0.20 per share. This action will provide cash savings of approximately $240 million per annum and further enhance FCX’s liquidity during this period of weak market conditions. FCX’s Board will review its financial policy on an ongoing basis and authorize cash returns to shareholders as market conditions improve.
The day of reckoning has arrived for the oil price. After a year of "Oil Price Crash" in October the world managed record production of 97.09 Mbpd. Production momentum built in the period of high price, 2007 to 2014, is proving very difficult to switch off. It must be switched off and it seems to me the most likely scenario is sharply lower oil price in the near term.
Over the weekend, in its latest quarterly presentation, the Bank of International Settlements made what may have been a very premature assessment that China is now contained. Judging by events in the past 24 hours, the reality is anything but.
The Keystone Pipeline debate isn`t really about the environment at all, but rather money.
With at least 83 percent of these companies' operating cash being spent on debt repayments - the highest on record - the renewed collapse in crude oil prices of the last month has renewed focus on the tidal wave of defaults that the credit market is increasingly pricing in (and stocks not).
"On The Cusp Of A Staggering Default Wave": Energy Intelligence Issues Apocalyptic Warning For The Energy SectorSubmitted by Tyler Durden on 11/27/2015 21:24 -0500
The US E&P sector could be on the cusp of massive defaults and bankruptcies so staggering they pose a serious threat to the US economy. Without higher oil and gas prices — which few experts foresee in the near future — an over-leveraged, under-hedged US E&P industry faces a truly grim 2016. "I could see a wave of defaults and bankruptcies on the scale of the telecoms, which triggered the 2001 recession."
According to Graves & Co., an industry consultant, oil and gas companies have laid off more than 250,000 workers around the world, a tally that will rise if oil prices remain in the dumps. “I was surprised it’s gotten this far,” Graves & Co.’s John Graves told Bloomberg in an interview. In an eye-catching statistic that highlights who exactly is bearing the brunt of the downturn, Graves says that oilfield service companies account for 79 percent of the job losses.
The Western media will tell you that Gazprom cannot afford to cut Turkey off in retailiation for Ankara's attack on a Russian warplane. While that may be true, it's important to remember that Turkey's fallback option when it comes to replacing lost supply is Iran and under the circumstances, it seems exceptionally unlikely that Tehran would be willing to make things easier on Erdogan.
Some have suggested Vladmir Putin's first retaliation for the Turkish shooting down of a Russian fighter jet would be to cut off gas supplies (which represent 57% of Turkey's supply). With Russia Defense Minister stating that the "downing of the Russian warplane is a 'hostile act'," adding that the defense ministry is "devising a set of measures to respond to the incident," it seems taking the 'nuclear option' of cutting off 20% of Erdogan's entire energy supply would be a strong first non-lethal non-World-War-3-starting step.
As a result of the global commodity weakness, global stocks have fallen for the first time in six days as the sell-off in commodities continued, dragging both US equity futures and European stocks lower. However, putting this in context, last week the MSCI All Country World Index posted its biggest weekly gain in six weeks: alas, without a coincident rebound in commodity prices, it will be merely the latest dead cat bounce.
The global economic order is shifting beneath the feet of Washington and Tokyo as Xi marches ahead with "One Belt, One Road" and prepares to extend the first loans from the China-led development bank that embarrassed the Obama administration earlier this year.
It seems it is high time for a strategic rethink in the Global War On Terror, but powerful forces are arrayed against it. Apart from the fact that a truly huge racket is at stake, the situation is also reminiscent of the proverbial guy with the hammer – everything looks like a nail to him. So we should reasonably expect more of the same, only in even grander style (as the so-called “surge” has shown, any successes tend not only to be temporary, but have a habit to soon give way to even greater disasters).