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Crude Crash Set To Continue After Arab Emirates Hint $40 Oil Coming Next
In space, no one can hear you scream... unless you happen to be Venezuela's (soon to be former) leader Nicolas Maduro, who has been doing a lot of screaming this morning following news that UAE's Energy Minister Suhail Al-Mazrouei said OPEC will stand by its decision not to cut crude output "even if oil prices fall as low as $40 a barrel" and will wait at least three months before considering an emergency meeting.
In doing so, OPEC not only confirms that the once mighty cartel is essentially non-existant and has been replaced by the veto vote of the lowest-cost exporters (again, sorry Maduro), but that all those energy hedge funds (and not only) who hoped that by allowing margin calls to go straight to voicemail on Friday afternoon, their troubles would go away because of some magical intervention by OPEC over the weekend, are about to have a very unpleasant Monday, now that the next oil price bogey has been set: $40 per barrell.
Luckily, this will be so "unambiguously good" for the US consumer, it should surely offset the epic capex destruction that is about to be unleashed on America's shale patch, in junk bond hedge funds around the globe, and as millions of high-paying jobs created as a result of the shale miracle are pink slipped.
According to Bloomberg, OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5.
“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.
And with OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their collective target for a sixth straight month, according to data compiled by Bloomberg. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production.
The above only focuses on the (unchanged) supply side of the equation - and since the entire world is rolling over into yet another round of global recession, following not only a Chinese slowdown to a record low growth rate, but also a recession in both Japan and Europe, the just as important issue is where demand will be in the coming year. The answer: much lower.
OPEC's unchanged production level, a lower demand growth forecast from the International Energy Agency further put the skids under oil on Friday, raising concerns of possible broader negative effects such as debt defaults by companies and countries heavily exposed to crude prices. There was also talk of the price trend adding to deflation pressures in Europe, increasing bets that the European Central Bank will be forced to resort to further stimulus early next year.
And while the bankruptcy advisors and "fondos buitre" as they are known in Buenos Aires, are circling Venezuela whose default is essentially just a matter of day, OPEC is - just in case its plan to crush higher cost production fails - doing a little of the "good cop" routing as a Plan B.
According to Reuters, OPEC secretary general tried to moderate the infighting within the oil exporters, saying "OPEC can ride out a slump in oil prices and keep output unchanged, arguing market weakness did not reflect supply and demand fundamentals and could have been driven by speculators."
Ah yes, it had been a while since we heard the good old "evil speculators" excuse. Usually it appeared when crude prices soared. Now, it has re-emerged to explain the historic plunge of crude.
Speaking at a conference in Dubai, Abdullah al-Badri defended November's decision by the Organization of the Petroleum Exporting Countries to not cut its output target of 30 million barrels per day (bdp) in the face of a drop in crude prices to multi-year lows.
"We agreed that it is important to continue with production (at current levels) for the ... coming period. This decision was made by consensus by all ministers," he said. "The decision has been made. Things will be left as is."
Some say selling may continue as few participants are yet willing to call a bottom for markets.
There is some hope for the falling knife catchers: "Badri suggested the crude price fall had been overdone. "The fundamentals should not lead to this dramatic reduction (in price)," he said in Arabic through an English interpreter. He said only a small increase in supply had lead to a sharp drop in prices, adding: "I believe that speculation has entered strongly in deciding these prices.""
Unfortunately for the crude longs, Badri is lying, as can be gleaned from the following statement:
Badri said OPEC sought a price level that was suitable and satisfactory both for consumers and producers, but did not specify a figure. The OPEC chief also said November's decision was not aimed at any other oil producer, rebutting suggestions it was intended to either undermine the economics of U.S. shale oil production or weaken rival powers closer to home.
"Some people say this decision was directed at the United States and shale oil. All of this is incorrect. Some also say it was directed at Iran and Russia. This also is incorrect," he said.
Well actually... "Saudi Arabia's oil minister Ali al-Naimi had told last month's OPEC meeting the organization must combat the U.S. shale oil boom, arguing for maintaining output to depress prices and undermine the profitability of North American producers, said a source who was briefed by a non-Gulf OPEC minister."
And as Europe has shown repeatedly, not only is it serious when you have to lie, but it is even worse when you can't remember what lies you have said in the past. That alone assures that the chaos within OPEC - if only for purely optical reasons - will only get worse and likely lead to least a few sovereign defaults as the petroleum exporting organization mutates to meet the far lower demand levels of the new normal.
In the meantime, the only question is how much longer can stocks ignore the bloodbath in energy (where there has been much interstellar screaming too) because as we showed on Friday, despite the worst week for stocks in 3 years, equities have a long way to go if and when they finally catch up, or rather down, with the crude reality...
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LOL Miffed what do you think the dinner and movie dates were all about while you were in high school and college etc.
If the guy didnt pay for those dates I doubt you and millions of other girls would of gotten in the back of the car with him.
I agree Miffed....but also remember, there aren't many like you running around out there, so some just have to make do.
remember, there aren't many like you running around out there, so some just have to make do.
make do ? -lol
ya mean.... those with bad breath, bad manners, hard core criminals, ugly as donkey's dung, politicians, religious zealots.... or ekonomists ?
well... i suppose... but still....
if you are for real, not too shy, and are not afraid to.... be bold... you can pick a few flowers from the 'forbidden garden' -lol
(there are still many willing)
What's your view on leasing it instead for, say, a 2-50 year contract?
With said Contract involving an Exit Strategy that provides at least 50% of Assets going to the 'weaker' Party?
Miffed.....while on its face your comment has merit in the WASP/HRCC sense it is essentially a superficial judgement, culturally biased and does not account for the typical westernized marriage contract foundation. Within the confines of the wesern cultures I would tend to agree with the position that the sex trade is seedy to say the least for the vast majority of the participants though I credit the teachings of our corrupt western religions for laying the ground work for such conditions to exist. Looking at the sweedish attitude toward sex is something that would euphemistically make the majority of the women in our western cultures heads turn completely around a la Linda Blair of Exorcist fame.
Looking further east you will find very interesting views, with everything from the viper girls that live up to the cold as a whores heart ideology to the girls having fun crowd to the Asian wife experience available; the client demographic is similarly diverse. Generally speaking of the Asian countries I've visited the attitudes toward paying for sex seem similar and a universe away from our holier than thou BS; and I have seen first hand more than a few Southern Baptist fire and brimstone types completely lose themselves within seconds of having an Asian beauty take their hand and speak kindly to them in very broken english. - though I have known men that have gone on work assignment in areas like Baku and even Poland and gone completely native within weeks due to the overwhelming attention they receive - one guy lasted one trip in country came home went straight to the family lawyer signed everything over to his too busy to kiss wife and said have a good life - I guess you could call that paying for sex too in both directions.
Western men know full well that sex is a commodity that has to be purchased, it seems the wives often suffer an identity crisis however.......
Do you know why western women look so happy when they are walking down the aisle on their wedding day?
- they know they have given thier last blowjob
How do you get an american woman to stop having sex
- put a gold ring on her finger
some of us laugh at such jokes while fighting back the tears of knowledge in their truth.....
Western men know full well that sex is a commodity that has to be purchased, it seems the wives often suffer an identity crisis however.......
for the most part of your post... i do not disagree....
HOWEVER... in the very narrow focus of the original comment you are responding....
"paying for sex = losers"
remains valid.
because even if i were to agree 100% with your response (which i do not)....
miffed's comment is true....
"sex a commodity" ? as far as i am concerned.... = no
MOST marriages would fall under.....
'fair trade' -lol sex for security
but there are true stories of actual and real marriage for love (on both sides)
so.... the part that i agree is.... on the real world.... i think your comment holds water.
but there are notable exceptions.... and depending on one's personal views and stances...
still....
paying for sex is completely moronic....
regardless of the justifications, which i may add..... that is what you are referring to....
- 'make love not war'
~ anonymous [sweedish] hippie
:)
to all of you hooker users.....
you failed to include into your equation of your 'economic analysis' of the price of hookers relative $/gal. price... not only the risk of getting some STD... but the potentially ACTUAL cost of getting it...
this is an indication that you those who posted in such fashion must be either:
1.- ekonomists
2.- supporters of the legalization of prostitution
... hmmm in thinking further.... i think there is a common denominator there....
~lmao...
p.s. those down arrows may be further proof i am into som'thng...
O¿O
........ well the bus stop girls outside the four floors can be had for about 20 USD, but if a full set of teeth and both breasts are important to you then head NW to the kingdom you should be able to find something around Soi Cowboy or Nana in an economy model for about 500-600 THB though during periods of political unrest the price falls faster than the linen........ why anyone would want to drive american is beyond me.....
Thai Baht exchange rate is 32.8 to the dollar. 600/32.8 is $18.29 so I guess I'll go with the full set of teeth and tits for a $1.70 less. But maybe I'm looking at this wrong?
Speaking of teeth. Someone on freecycle made a post in need of false teeth.
;)
Depends on your geography.
I've read stories about desperate hookers in Greece offering their services for as little as 5 euro.
Book a plane ticket, spend a week with a $100 in your backpocket and you'll come home dry as a bone.
A pack of smokes would get you a quickey in WWII france
You paid more ?
A silver coin could get you a BJ in 1913.
15 silver GRAIN could get you a BJ all night long in 1913. Easier than plucking chickens all day.
RIPS
Thanks, good to know. Confirms silver is on sale big time right now.
Oh yeah. Lots and lots moar!
To the ex-wife fucking whore!
Cromnibus this you thieving congressional b*stards.
If this would be the catalyst for a black swan ....then bring it on. End this madness.
While I echo your sentiment I only hope we will be able to handle the storm before us. I suspect it will rock society to its core.
You can pay me now, or you can pay me later.
I'll gladly pay you Tuesday, for a hamburger today.
I suspect few of us thought we would be looking at far lower oil prices as we enter 2015. Many people were looking for prices to ratchet up because of unrest across the globe. Dropping oil prices add a new surprising new dimension to the stability of the world financial system.
While often heralded as a godsend to the economy and the end consumer we must remember lower prices hurt both producers and those in the business of oil exploration, drilling, and sales. When financial problems occur in the energy sector it is often accompanied by political instability and sometimes her ugly sister war. As a rule the economy loves stability, bottom-line dropping oil prices means more risk for an already shaky world economy. All this is being complicated by the recently strong dollar.
The dollars strength and the rising American stock market could also be taken as a sign of an unstable global economy. The money flowing in from other countries in search of a safe home screams of a bigger problem! When a strong shift in currencies occurs someone usually gets hurt and this can lead to bankruptcy, default, or contagion.
http://brucewilds.blogspot.com/2014/11/dropping-oil-prices-increase-risk-to.html
Damn deflation.
Mr. Yellen, get to work!
Tbonds up, precious metal cheaper.
HO, HO, HO!
Who believes that suddenly Saudi Arabia wants to declare war against US shale producers as some claim? Saudi Arabia is totally beholden to US power. So it has to be on the instructions of Washington that OPEC/Saudi Arabia is orchestrating this fall in oil (as done in 1986 to destroy USSR). It is full spectrum war against Russia and Putin with Venezuela and Iran as bonus victims.
War Drums Beat Louder and Faster Between the U.S. and RussiaOn Saturday, December 13th, Russian media reported that U.S. President Obama evidently can’t wait to sign the congressional authorization for war against Russia (which has already been passed in draft form by 98% of U.S. House members and 100% of U.S. Senate members), and that he is already shipping military supplies into Ukraine for use against Ukraine’s ethnic Russians that the Ukrainian Government is trying to eliminate.
Mikhail Emelyanov, a leading Russian parliamentarian, was quoted as saying on Saturday, Russia “cannot calmly watch as the US arms Ukraine with the most modern lethal weapons. In this regard, we should not appear weak. The situation is very alarming. Judging by US intentions, they want to turn Ukraine into a fighting platform against Russia.”
The popular Russian website “Colonel Cassad” reports that the reason why Ukraine’s airports in Zaporozyhe, Kharkov and Dnepropetrovsk mysteriously shut down for other traffic on Saturday was to unload weapons-shipments from the U.S. Specifically, it said that, at Zaporozyhe,
Always solid input, JO.
Yes, me thinks they're playin' for all the marbles.
Time is the enemy of Western strategy, hence now is go time.
Be ready for anything.
I believe that's the crux of it JO. "Get Moscow."
Raise the Reich.
Speaking of the Reich, the painters of history now make Hitler a junkie; while his people would have understood and fought against this NWO shit much more than the idiot N/Miggers we must now support without choice.
This summarizes the oil situation well- JO is spot on- http://www.inclusivedemocracy.org/journal/vol10/vol10_no1-2_Economic_war...
It is go time- having the fuel delivered to the bug out tomorrow and just had the back up well completed last week. Just glad the kids are home from college and can be close if it happens over the next 5 weeks.
Agreed
Israel just bombed Syria, a country its not at war with, because of a cargo they felt threatened by. the western media and even Syria didn't complain much about it.. these cocksuckers are itching for a fight.. the restraint being show by the victims of this shit is breath taking..
These weapons being provided to Ukraine threatens Russia, maybe they should take a page out of the jew playbook exorcising their right to pre-emptive self defense, wonder how those headlines would read...
Time is the enemy alright. the provocations are increasing, desperate for a distraction big enough to hide their treason, the miscalculations are mounting...
I'm thinking the world is closer to mega collapse than most believe..
"Time is the enemy alright. the provocations are increasing, desperate for a distraction big enough to hide their treason, the miscalculations are mounting..." and Obomber is in charge. Can't get much worse.
"These weapons being provided to Ukraine threatens Russia, maybe they should take a page out of the jew playbook exorcising their right to pre-emptive self defense,"
Agree totally. Russia lost 30 million in World War Two. 5 times the kill rate of Jews. So Russia should openly proclaim the same rights as the Jewish State. The headlines next day would make interesting reading.
"Russia claims same defense rights as Israeli Jews".
Imagine the hysteria!
jack burton - i don't deny the 'holocaust' - but at this point the '6 million' is known to be a big lie. it was horrible, but much, much less than that.
Israel's new theme song:
https://www.youtube.com/watch?v=oB738malgK4
No New Friends: "Fuck All Y'all Niggas, except my Niggas" from the linked tune.
Check it out.
Dat Nigga rayciss.
Blee dat!
Ya herd me?
Israel just bombed Syria, a country its not at war with, because of a cargo they felt threatened by.
yeah... a lesson for USA poiticians.... to follow the israelies example...
i wonder WHERE those 'innocent' palestinans and/or terrorists are harbored, or get support... i wonder WHEN are the terrorists going to declare "official" war on israel...
an eye for an eye.... they say...
I'm thinking the world is closer to mega collapse than most believe..
well... i admit i used to think that....
but the US political system (and markets) are convincing me otherwise... simply because of the
greed factor, complacency by most, and the growing F$A not only in the USA but around the globe...
time is absolutely the enemy, and baked into vlad's strategy.
You seem to be implying aggression on Putin's part. I'm watching NFL right now and a blurb shot by that military personel are able to follow this football game at bases in 175 countries around the world. You support this US policy? It changes, but I think there are less than 200 countries worldwide.
It's orchestrated alright.....
"Saudi Arabia is totally beholden to US power."
Not so much right now. It's more like the 'U.S.' is beholden to whatever cabal of sociopath globalist that actually creates the script for this madness.
The Saudi's are most assuredly not acting on behalf of the people living under USG jurisdiction.
If they were, the USG would be bombing the shit out of them
It is full spectrum war against Russia and Putin with Venezuela and Iran as bonus victims
you missed these victims...
Norway
Great Britain
United States
The entire continent of Africa
A good portion of South America
And pretty much everyone else except China
So pretty much shit all over your kitchen to spite your cranky wife.
The US has never cared about "collateral damage".
Oh, and 'fuck the EU".
What about the tar sands and Canada? At $40, there will be some serious problems.
Time to short RBC, CIBC & TD. Oil + house bubble + largest personal debt = ...
Yeah, you'll short the banks, but you'll short the banks from your investment account held by the banks. If you really thought things through you might realize shorting the banks while continuing to keep your money in the banks might not be the wisest of ideas.
Tar sands ........ I am so sick of hearing about tar sands can we not just say near surface hydrocarbon bearing silica matrix or somethin along those lines....... and 40 dollar oil might be a good thing........ to put that loonie in its rightful place........
........ yes I mean the globullshitist harper
I want to see Vlad so frustrated by the dribble of revenue coming in that he begins posting multiple daily videos of him judo-flipping compliant, flacid men to the canvas and long bouts of flatulence next to a map of the US.
Yuck.. flacid men, who fart alot, should they also be hairy? not my viewing cup of tea, but what ever...
Vlad didn't start it, he will just finish it...
You must reallly hate that Russian wife of yours.
You must reallly hate that Russian wife of yours.
could it be .... she has a russian husband ?
just saying....
She's not a fan of Vlad or Russia's policies either, Bob.
I for one would be opposed to war with Russia. I would consider getting off my ass and demonstrating in Washington DC.
Of course, we no longer "officially" declare war on anyone, the Emperor just orders troops to go, and then gets Congress to give him the money. What a circus.
But what about the 98% of the U.S. House of Representatives, and the 100% of the U.S. Senate, who have now voted for the U.S. to donate lethal weapons to this Ukrainian Government. Do they know? Who paid ‘our’ Congress-people for this vote? Was it Lockheed Martin? Was it Boeing? Was it Raytheon? Was it all of them and others, all of whose stocks have been soaring since Obama’s overthrow of Yanukovych?
The U.S. public were asked in a 4 April 2014 Pew poll, whether they backed “sending arms/military supplies, to Ukraine govt.” 30% said yes. 62% said no. 8% were undecided. The ratio of those who had an opinion, 62%/92%, was 67% against, 33% for.
http://www.globalresearch.ca/americas-war-on-russia-u-s-congress-virtual...
.
"The U.S. public were asked in a 4 April 2014 Pew poll, whether they backed “sending arms/military supplies, to Ukraine govt.” 30% said yes. 62% said no. 8% were undecided"
And people wonder why/if the US populace is a target of terror of domestic origin in order to move public opinion.
Fear and Terror are the best tools for controlling a populace:
The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.
H. L. Mencken
Shorthand: Terrorism is theatre - the greatest organizing principle ever.
The American public polled over 70% against amnesty, how'd that work out for us? These fuckers couldn't care less about what we think. They sit around and decide who will be allowed to vote against something depending on horse trading and who is next up for election. The rest bite the bullet and apologize for not understanding the language of the bill. It's just sickening.
and the public also opposed the TBTF bailout
There is one good thing when Russia does a nuclear strike against America , the American people have enough guns and ammo to keep killing each other for years untill we get our 90% die off.
redress: baskets full of heads.
Oh. So you're saying we're being taxed without representation?
Oh ok. NFL is on. I'll think about that after the game.
Since when public opinion matters ? Especially in USA ?
What the US controllers lose by the self-inflicted injury of clobbering their own shale industry is more than made up for by the gains from conquering Russia, stealing its energy resources and suppressing the only serious force on the planet with a chance of stopping their globalist agenda, namely the BRICS, SCO and EEU (all coordinated by Russia).
Worth taking the risk? Can they afford not to at this desperate juncture?
Russian rouleete with five chambers loaded is very messy,and ends quickly.
"conquering Russia"
My money is on General Winter.
Russia is merely one target. Isis is more immediate threat. Once Saudi discovered them in their own backyard, the next decision was clear
caviaar emptor: as isis is a zioDC creation, it's possible the only thing SA finds threatening about isis is that it was/is selling oil stupidly cheaply, and that it had many buyrers, even zioreal. surprise. it is possible that SA's dropping the retail price of oil has as much to do with countering and destroying isis' wholesale dumping as gutting the ussa or russia---although it may be a long run benefit. it's possible SA is finding the creation of isis to be having a greater more unpleasant impact/blow back than zioDC had intended?
More confirmation of nutcase Russian statements.
The Russians are concerned about Ukraine being supported as the Ukraine has forces on the march to take Moscow?
It will not be much longer until someone from the inner circle puts the knife to Putin.
I know right. Because anybody who doesn't believe the US government is insane.
Right?
And it is interesting to think about a world on the otherside of that. What will things be like in a world where Russia and Iran have capitulated? Will there be PEACE and SECURITY?
No Peace or Security but instead unquestioned dollar dominance which is the true goal
Which OPEC country has a fiscal break-even of oil @ $40 p/b? 0 that's how many.
I guess everyone is going to have to pump 2 or 3 times as much to balance their budgets.
In the mean time, all the leverage in the financial markets balanced on the back of crude oil is about to evaporate and all the wealth the consumers save is going to be wiped out by stock market losses.
Though with the cost of crude down and the shale miracle decimated the US deficit will rise and qe (whatever round it is now) will be rationalized into existence and we can start this shenangian alllll over again. But 'til then sell everything and seek shelter in the tza/faz/dug bunker.
Yes, everyone has to pump and dump and this is a vicious feedback loop.
We shall see what the market dictates based on supply and demand as opposed to artificial production targets.
My guess is that the NY Fed makes a deposit into the Saudi account anytime the kingdom asks for some dough. This is an orchestrated move against Russia and the US is going to backstop whomever helps it, IMO. In other words, the Saudi's are not going to suffer from a lack of income due to reduced oil sales $.
Phuck oil.
OT but relevant:
http://nypost.com/2014/12/14/stuyvesant-hs-student-nets-72m-on-the-stock...
...it's even worse than the CNN bit.
Loosen those sphincters, Boys and Girls; the Market will crash hard!
This is nothing more than a "free steak dinner" to herd more sheep into the casino.
Let the history books reflect: the great crash of 201_ was spurred on by OPEC and the falling barrel price...and no one else is to blame, according to the" facts".
No, its George Bush's fault because torture. (sarcasm)
don't give credit too much to opecs...
arabs sit on oil world needs, fine, but if whites find others way to get powered, what remain for the one sat on oil ? ....sand and oil.... they know it is a 50-50 deal, when i say opec is pawns, it is just coz the man who gor tressources is no longer the one who got power to control, because when nobody consume, well, you keep your stock in your arms... :)
market weakness did not reflect supply and demand fundamentals and could have been driven by speculators
"supply and demand fundamentals" ha ha! good one! Well I'm really glad that the supply and demand fundamentals are still intact for YELP, CMG, TSLA,TWTR, BABA, NFLX. I just hate when speculators mess up the fundamentals.
PS: Oh and over the last weeks I kept wondering how many people will buy a Tesla Model S in 2015?!? I'm sure a market cap of 26 billion USD is totally justified....
26 Billion is entirely reasonable.
It's a nice looking car.
And we all know in the New World, appearances are not only everything, they're the only thing.
As long as The Greater Fool can be relied on to show up in time. Lots of folks are counting on him.
Using an OPEC oil minister to call the direction of the market seems sketchy to me. He is a politician after all.
LEAVE. THE. RUSSIANS. ALONE.
Haha.
My daughter was a big Brittney fan. I know that one.
https://www.youtube.com/watch?v=kHmvkRoEowc
Where will Vlad seek asylum after his time is up, Bob?
Print a copy of this HYT chart, tip it upside-down against a window, and see if it isn't a screaming buy. But right side up, its going immediately to 10, 9, and eventually the final double bottom at 5. Earth to Congress: Who 'ya gonna call when the bond and commercial paper markets are locked up?
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hyt&insttype=&freq=2&show=&time=13
If you are a banking loan officer call me.
I'm willing to do my part to save the oil industry and reduce the oil glut.
For a small fee. The banks can use my name to pretend to lend me some new printed money and I promise to let the bank use the money to build large storage tanks and fill them up with oil.
They can then seize all of the assets that they have built up and sell them when the price of oil improves.
Damn it! Fuck it!! The bad news just keeps coming!
How can we consumers assist the Fed by being confident and optimistic that our prices are going to go up and up and up if we are forced to pay less for gas?
If you were a stockholder in:
RIG
SDRL
CXO
DO
CHK
APA
APC
COP
XOM
XLE
OIH
...and tons of others (the rest of the stock market will follow suit)
Tell me what just happened to your discretionary income. Household networth dipped $140 billion in Q3 due to stock market losses and that was just a teaser of what is to come.
A lot of Public Sector Pensions hold those stocks whether or not the employees know it.
Everyone with a 401(k) holds those stocks and ETFs. Fuck the saudis, bombs away Putin!
the market will rise on narrow leadership, thats what it always does in this part of the cycle, buy APPLE
When the tide goes out all ships go with it and the tide is going out.
Thats not the tide, thats the water receding in front of a Tsunami.
Not to mention all the layoffs in energy jobs straight down the middle of America and up to Canada.
One and only; OGZPY heads that list. The most frustrating thing is, nothing short of wwIII will stop that stock but wwIII is what the ZOGs appear more than happy to ignite.
It's like owning Mitsubishi or Krupp Werke in 1939.
$40 ??? So they are optimistic.
I call 36... It hit that in 2009 and government forces are trying to manipulate something... So you know it is going to overshoot.
why are people worried about good news
How is this good news? They are exporting deflation. Businesses are not going to benefit, the waterfall will soak everyone.
Because the shale boom was financed by selling $550 billion in junk bonds at 4% yields, which have now gone up to over 9%, meaning that the frackers are now facing increased costs of financing their debts while simultaneously facing decreased revenue on businesses that required debt at $100/bbl. It's good news until reality kicks in and all of the production that is not sustainable at these prices starts to go offline while we get several Enrons at the same time. How many CDSs are tied to those junk bonds? What other OTC derivatives are somehow tied to them? What happens to other junk bonds if you get a massive and sudden string of defaults in one major sector of junk? If by good news, you mean the makings of another financial disaster, you know why people are worried about good news.
The price decline on the Oil Junk bonds is enough to move the whole junk sector lower.
That triggers ETF exits and cash requirements to redeem the ETFs.
Now everything in Junk is underselling pressure for stuff that is illiquid in best markets.
More decline in Junk ETFs and more redemptions. Those redemptions require selling at any price to get the cash.
That spiral can go pretty deep.
And that's just on the surface. I'm not even sure if the information on what OTC derivatives are tied specifically into this shit show is avaliable. Either way, I hope it hits and hits so hard that we are forced to stop with our meddling in other countries' affairs before we start WWIII. As I stated in another post above, I'd rather deal with riots and starvation than mushroom clouds.
EDIT: And since junk bonds were used as a lot of the funding for the stock market, should the entire junk bond market get whacked, there goes stocks. I think that we're probably looking at widespread contagion here.
this is good for usg, their costs go down the deficit shrinks, there might even be enough money to start a new war someplace. on the other hand the feds balance sheet goes on the ropes, as the entire asset class comes down, which implies higher interest rates, in the current QE cycle higher interest rates have been one tool they use to cool off speculative investment (the talk about ending QE has cooled gold off a lot) just turn the spec trade to risk off, that means higher interest rates (if you believe the fed is really just following rates, and they are for the moment anyway. this fed is out of the drivers seat, if they raise rates it will seem llike the right thing to do, but it wont take much to seriously impair their balance sheet) then they go to congress so see if they can dump that crap onto the treasury, ie taxpayer, (cromnibus was just a warmup ducklings)
The US deficit will rise not shrink.
The reason the US deficit has been going down has been because of the explosive growth in US oil and gas production and the tax revenue associated with it.
The growth in US oil production has almost been a fairytale. In 5 years we caught up to Saudi Arabia in-terms of production. I can't even believe I can say that with honesty but I can.
Plus you can tack on the newly unemployed shale workers along with 5 million illegals signing up for Obamacare, SNAP, etc. Yeah, this is going to work out swell for the US.
How much of an output can Saudi-Arabia give to the world exactly? I don't know much on the subject and it is pure speculation on my part, but what would happen if all the other OPEP member get together and decide to sell there oil at an higher price. Can Saudi-Arabia keep up with the exploding demand?
What exploding demand?
Well if Saudi-Arabia is the only selling oil at 45$ a barrel while all the other country set it at 80$ a barrel for exemple, then everyone will want to buy from them. Thus exploding demand. But could they keep up with the demand?
Yeah buddy, $20 hookers with no extra charge for swallowing will be back!!!...
Next time you lamet about the decline of America, remember you're part of the cause.
Looks like nature is about to solve the global warming problem at a stroke by wiping out a large proportion of the oil industry.
Yes, and after this is over the Saudi's will remain in-control.
How can it be over, If the Saudis raise the price then shale comes back. Shale oil the best thing that ever happened for the motoring public.
Igor Girkin (Strelkov) believes he and Putin may end up at the International Military Tribunal in the Hague
According to Girkin, this will happen if the Russian government pursues a peaceful approach in the Ukrainian conflict. He believes that Ukraine is using the ceasefire to “renew its army at a frantic pace so that no ‘holiday’ warriors will be able to shift the balance of power on the battlefield. (In August Alexander Zakharchenko, the so-called “prime minister of DNR [Donetsk People’s Republic]” explained that the Russian troops fighting with the separatists were there on holiday — Ed.)
“This winter sanctions may seriously undermine the willingness of the Russian public ‘to protect the Russian world,’ and especially the loyalty of our officials (which is already much in doubt). NATO, meanwhile, will complete preparing the general opinion of its citizens on the necessity of direct military aid or even armed intervention in the conflict for ‘the sovereignty of Ukraine,'” Girkin said.
In his view, by spring, the residents of the ‘devastated’ Donbas will view Putin with ‘hatred,’ since the numbers of refugees will increase by hundreds of thousands. The Ukrainian army, including NATO forces, will mount an ‘attack,’ which in the absence of “large-scale, direct intervention by the armed forces of Russia will bring about the rapid defeat of the demoralized militia, which has fallen behind 5-7 times in numbers and order.”
Girkin also warned that a “Moscow Maidan” may rise up against the background of “economic collapse” and the “obvious betrayal of the Russian population (of the Donbas).”
“If he (Putin) continues in the same spirit as now, then we will become neighbors in prison cells in the Hague. If they manage to take us there still alive, of course,” the former “defense minister of the DNR” said.
In mid-August 2014, after the dismissal of the “prime minister of DNR” Alexander Borodai, Igor Girkin was removed from the post of “commander in chief of the armed forces of the separatists.” Later, in early September, Girkin gave a press conference in Moscow where he made it clear that he was not happy with developments in Eastern Ukraine, where a ceasefire had been declared. However, he expressed his willingness to submit to the decision of Russian President Vladimir Putin, whom he considers “the only legitimate supreme leader.”
http://tvrain.ru/articles/igor_strelkov_dopustil_vozmozhnost_popadanija_...
http://rusila.su/2014/12/12/igor-strelkov-rasskazal-o-svoem-videnii-rezh...
What does that have to do with oil at forty bucks?
Well the crushing of oil prices is directly realted to Russia and what the NWO is doing in the Ukraine. Strelkov was the guy who turned it around in the Eastern Ukraine. Kiev was the one who wanted a cease fiire because the NovoRussia guys were ready to go to Kiev.
Here comes the emegency that can only be stopped by stealing them pensions and bank accounts. In three months at sub 60$ oil China will be all stocked up on oil. What is to keep them interested in trading anything for usd? At that point dumping treasuries leaving the US tits up?
If this goes all sucky we in the US will be way beyond flat broke and rioting. With our own government going feral.
Produced oil cannot really be stored for any long period. China may be able to increase some "buffer" inventory but that has little value over the longer term of a year or more. The real Chinese game should be to acquire the bankrupt producers and reserves in the ground.
Yep. China is not going to play around with energies. Sitting on all them usT looking for a good way to offload them. Well I doubt they will ever get a better chance than this.
Hopefully. Then the Great Reset.
Interesting. I had not thought of that angle. The Chinese using its UST holdings as a form of capital to hover up a lot of the leases and equipment of the soon-to-be bust US oil producers. They won't get what they pay for if they do that, but it would be a much less obvious way of dumping those USTs than a fire sale. In fact, in the long run, they'll only get whatever equipment they ship back to China if they do that, because good fucking luck holding onto the land sitting atop the shale when social order breaks down here, especially with some of the financial shenanigans that they've pulled, making them just as vulnerable financially as us.
But I could still see them making that play.
They could just buy up stuff they can defend.
That boils down to raw material and equipment that they can ship back to China. They won't be able to defend much here once people get desperate.
In a third world banana land they could? Hilery would help.
In a third world banna land with 300,000,000+ privately held firearms weilded by a bunch of people who are rapidly losing their status as land whales and fantasy football stars? (Circenses et panem will be gone at some point.) Add to that that China would have to fund and supply the troops from across the Pacific Ocean and I'd bet that they wouldn't be able to very much at all.
I didnt say it was a good plan. The USA is a logistical fn disaster. High powered shooters will bitchslap any invaders.
It may not be a bad plan, so long as they are willing to cut their losses. It provides cover for unwinding from the USD at a time that might otherwise cause some serious tensions between the US and China.
Can they get the guns? If yes then yeppers its a good plan.
Considering that they are members of Dollar, INc and own about 12% of the FED banking syndicate, why would they do that?
They want to sit at the head of the table of the new world coin?
How about a vote?
Top click upvote for: US /Saudi Axis of Evil trying to take out Russia and Iran
bottom clic downvote for: Any other reason or natural market forces.
I vote for #1 because I'm a tinfoil hat kind of guy.
I downered it because the US government dont work for us.
Since 9/11 oil has become increasingly a financialized "asset" with an increasing negative correlation to the USD. There is nothing "natural" about the pricing of oil.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2269027
I'm waiting for oil to get so cheap they start giving it away with a tank of gas...For quarts of crude to start showing up on the "impulse rack" at the supermarket checkout.
Buy one barrel, get one FREE! (limited quantities-some restrictions may apply...)
How about we start watering our crops with it to save water? I'll bet it's cheaper than Gatorade...
Safer than Roundup too...
"How about we start watering our crops with it to save water? I'll bet it's cheaper than Gatorade..."
If you go to a gas station and buy a bottle of water and do a little conversion you'll find you're paying two to three times what you're paying for gas. And water is free.
Drink more Brawndo!
by the end of 15 watch the federal gas tax rise, and many states as well. Pennsys up to 52 cents a gallon January 1, on top of the federal 18.4, that could be a 30 percent or so tax....
Good guess. They can raise taxes through the roof without the consumer even noticing.
But they will inevitably fall into the same trap as many oil producers: they become dependant on that imcome, and forget how to function without it.
I haven't seen a good riot in ages. Going to be fun to see what happens in Venezuela and Nigeria when oil breaks 50, or better 40. Serves those dumb fuck "dicktators" in both countries right.
Toilet paper to the moon!!!!!!!!!!!
hairball
Include Wall Street there. We are ready.
My new byline.
Buy time. Dump the losses on the taxpayer. They can't pay. The taypayer defaults. Time was bought.
"Two generalisations can still be made. First, in the very near term, the shale industry’s economics are good at almost any price. Wells that are producing oil or gas are extraordinarily profitable, because most of the costs are sunk. Taking a sample of eight big independent firms, average operating costs in 2013 were $10-20 per barrel of oil (or equivalent unit of gas) produced—so no shale firm will curtail current production. But the output of shale wells declines rapidly, by 60-70% in their first year, so within a couple of years this oil will stop flowing.
Second, it is far less clear if, at $70 a barrel, the industry can profitably invest in new wells to maintain or boost production. Wood Mackenzie, a research consultancy, estimates that the “break-even price” of American projects is clustered around $65-70, suggesting many are vulnerable (these calculations exclude some sunk costs, such as building roads). If the oil price stays at $70, it estimates investment will be cut by 20% and production growth for America could slow to 10% a year. At $60, investment could drop by as much as half and production growth grind to a halt." The Economist
Of course, a halt in production growth is exactly what is needed right now since there is a large world over supply of oil.
One can only hope $40 oil becomes a reality. It's better for consumers everywhere and it's far worse for Russia, Iran and Venezuela, those bastions of backwardness.
Bravo $40 oil!!!
Bravo for collapsing USA's shale oil and your 500B junk debt (your next sub-prime crisis around the corner :). Bravo for Norway eating up her pension fund to fund her unsustainable welfare state !
Bravo for the consumer getting fucked anally because he won't see the decrease since fuel is taxed like hell and politifuck will increase tax because of their chronic unbalanced budget (and some FSA to feed of).
There will be some dislocations and enterprises that fail as a result of cheap oil, but everybody else wins.
The wings are coming off the Fed inspired asset pump.
I notice some of you are in the habit of referring to the ruble/rouble as the 'rubble'.
Your prescience is duly noted and appreciated!
Yes but the $ is the "pig".
That pig wears lipstick though.
Wouldn't be surprised to see a few of the sheiks get whacked by the Russkies if this goes on. I'd really like to se that, actually.