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"Houston, You Have A Problem" - Texas Is Headed For A Recession Due To Oil Crash, JPM Warns
It was back in August 2013, when there was nothing but clear skies ahead of the US shale industry that we asked "How Much Is Oil Supporting U.S. Employment Gains?" The answer we gave:
The American Petroleum Institute said last week the U.S. oil and natural gas sector was an engine driving job growth. Eight percent of the U.S. economy is supported by the energy sector, the industry's lobbying group said, up from the 7.7 percent recorded the last time the API examined the issue. The employment assessment came as the Energy Department said oil and gas production continued to make gains across the board. With the right energy policies in place, API said the economy could grow even more. But with oil and gas production already at record levels, the narrative over the jobs prospects may be failing on its own accord.... The API's report said each of the direct jobs in the oil and natural gas industry translated to 2.8 jobs in other sectors of the U.S. economy. That in turn translates to a total impact on U.S. gross domestic product of $1.2 trillion, the study found.
Two weeks ago we followed up with an article looking at "Jobs: Shale States vs Non-Shale States" in which we showed the following chart:
And added the following:
According to a new study, investments in oil and gas exploration and production generate substantial economic gains, as well as other benefits such as increased energy independence. The Perryman Group estimates that the industry as a whole generates an economic stimulus of almost $1.2 trillion in gross product each year, as well as more than 9.3 million permanent jobs across the nation.
The ripple effects are everywhere. If you think about the role of oil in your life, it is not only the primary source of many of our fuels, but is also critical to our lubricants, chemicals, synthetic fibers, pharmaceuticals, plastics, and many other items we come into contact with every day. The industry supports almost 1.3 million jobs in manufacturing alone and is responsible for almost $1.2 trillion in annual gross domestic product. If you think about the law, accounting, and engineering firms that serve the industry, the pipe, drilling equipment, and other manufactured goods that it requires, and the large payrolls and their effects on consumer spending, you will begin to get a picture of the enormity of the industry.
Another way of visualizing the impact of the shale industry on the US economy comes courtesy of this chart from the Manhattan Institute which really needs no commentary:
The Institute had this commentary to add:
The jobs recovery since the 2008 recession has been the slowest of any post recession recovery in the U.S. since World War II. The number of people employed has yet to return to the 2007 level. The country has suffered a deeper and longer-lasting period of job loss than has followed any of the ten other recessions since 1945.
There has, however, been one employment bright spot: jobs in America’s oil & gas sector and related industries. Since 2003, more than 400,000 jobs have been created in the direct production of oil & gas and some 2 million more in indirect employment in industries such as transportation, construction, and information services associated with finding, transporting, and storing fuels from the new shale bounty.
In addition, America is seeing revitalized growth and jobs in previously stagnant sectors of the economy, from chemicals production and manufacturing to steel and even textiles because of access to lower cost and reliable energy.
...
The surge in American oil & gas production has become reasonably well-known; far less appreciated are two key features, which are the focus of this paper: the widespread geographic dispersion of the jobs created; and the fact that the majority of the jobs have been created not in the ranks of the Big Oil companies but in small businesses, even more widely dispersed.
Fast forward to today when we are about to learn that Newton's third law of Keynesian economics states that every boom, has an equal and opposite bust.
Which brings us to Texas, the one state that more than any other, has benefited over the past 5 years from the Shale miracle. And now with crude sinking by the day, it is time to unwind all those gains, and give back all those jobs. Did we mention: highly compensated, very well-paying jobs, not the restaurant, clerical, waiter, retail, part-time minimum-wage jobs the "recovery" has been flooded with.
Here is JPM's Michael Feroli explaining why Houston suddenly has a very big problem.
* * *
- In less than five years Texas’ share of US oil production has gone from around 25% to over 40%
- By some measures, the oil intensity of the Texas economy looks similar to what it was in the mid-1980s
- The 1986 collapse in oil prices led to a painful regional recession in Texas
- While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession
The collapse in oil prices will create winners and losers, both globally and here in the US. While we expect the country, overall, will be a net beneficiary from falling oil prices, two states look like they will bear the brunt of the pain: North Dakota and Texas. Given its much larger size, the prospect of a recession in Texas could have some broader reverberations.
By now, most people are familiar with the growth of the fossil fuel industry in places like Pennsylvania and Ohio. However, that has primarily been a natural gas story. The renaissance of US crude oil production has been much more concentrated: over 90% of the growth in the past five years has been in North Dakota and Texas; with Texas alone accounting for 67% of the increase in the nation’s crude output over that period.
In the first half of 1986, crude oil prices fell just over 50%. At the end of 1985, the unemployment rate in Texas was equal to that in the nation as a whole; at the end of 1986 it was 2.6%- points higher than the national rate. There are some reasons to think that it may not be as bad this time around, but there are even better reasons not to be complacent about the risk of a regional recession in Texas.
Geography of a boom
The well-known energy renaissance in the US has occurred in both the oil and natural gas sectors. Some states that are huge natural gas producers have limited oil production: Pennsylvania is the second largest gas producing state but 19th largest oil producer. The converse is also true: North Dakota is the second largest crude producer but 14th largest gas producer. However, most of the economic data as it relates to the energy sector, employment, GDP, etc, often lump together the oil and gas extraction industries. Yet oil prices have collapsed while natural gas prices have held fairly steady. To understand who is vulnerable to the decline in oil prices specifically we turn to the EIA’s state-level crude oil production data.
The first point, mentioned at the outset, is that Texas, already a giant, has become a behemoth crude producer in the past few years, and now accounts for over 40% of US production. However, there are a few states for which oil is a relatively larger sector (as measured by crude production relative to Gross State Product): North Dakota, Alaska, Wyoming, and New Mexico. For two other states, Oklahoma and Montana, crude production is important, though somewhat less so than for Texas. Note, however, that these are all pretty small states: the four states where oil is more important to the local economy than Texas have a combined GSP that is only 16% of the Texas GSP. Finally, there is one large oil producer, California, which is dwarfed by such a huge economy that its oil intensity is actually below the national average, and we would expect it, like the country as a whole, to benefit from lower oil prices.
Texas-sized challenges
As discussed above, Texas is unique in the country as a huge economy and a huge oil producer. When thinking about the challenges facing the Texas economy in 2015 it may be useful, as a starting point, to begin with the oil price collapse of 1986. Then, like now, crude oil prices collapsed around 50% in the space of a few short months. As noted in the introduction, the labor market response was severe and swift, with the Texas unemployment rate rising 2.0%-points in the first three months of 1986 alone. Following the hit to the labor market, the real estate market suffered a longer, slower, burn, and by the end of 1988 Texas house prices were down over 14% from their peak in early 1986 (over the same period national house prices were up just over 14%). The last act of this tragedy was a banking crisis, as several hundred Texas banks failed, with peak failures occurring in 1988 and 1989.
How appropriate is it to compare the challenges Texas faces today to the ones they faced in 1986? The natural place to begin is by getting a sense of the relative energy industry intensity of Texas today versus 1986. Unfortunately, the GSP-by-industry data have a definitional break in 1997, but splicing the data would suggest a similar share of the oil and gas sector in Texas GSP now and in 1985: around 11%. Employment in the mining and logging sector (which, in Texas, is overwhelmingly dominated by the oil and gas sector) was around 3.7% in 1985 and is 2.7% now. This is consistent with a point we have been making in the national context: the oil and gas sector is very capital-intensive, and increasingly so. Even so, as the 1986 episode demonstrated, there do seem to be sizable multiplier effects on non-energy employment. Finally, there does not exist capital spending by state data, but at the national level we can see the flip side of the increasing capital intensive nature of energy: oil and gas related cap-ex was 0.58% of GDP in 4Q85, and is 0.98% of GDP now.
Given this, what is the case for arguing that this time is different, and the impact will be smaller than in 1986? One is that now, unlike in 1986, natural gas prices haven’t moved down in sympathy with crude oil prices, and the Texas recession in 1986 may have owed in part also to the decline in gas prices. Another is that, as noted above, the employment share is somewhat lower, and thus the income hit will be felt more by capital-holders – i.e. investors around the country and the world. Finally, unlike 1986, the energy industry is experiencing rapid technological gains, pushing down the energy extraction cost curve.
While these are all valid, they are not so strong as to signal smooth sailing for the Texas economy. Financially, oil is a fair bit more important than gas for Texas, both now and in 1986, with a dollar value two to three times as large. Moreover, while energy employment may be somewhat smaller now, we are not talking about night and day. The current share is about 3/4ths what it was in 1986. (Given the higher capital intensity, there are some reasons to think employment may be greater now in sectors outside the traditional oil and gas sectors, such as pipeline and heavy engineering construction).
As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession. Such an outcome could bring with it the usual collateral damage that occurs in a slowdown. Housing markets have been hot in Texas. Although affordability in Texas looks good compared to the national average, it always does; compared to its own history, housing in some major Texas metro areas looks quite dear, suggesting a risk of a pull-back in the real estate market.
The national economy performed quite well in 1986, in spite of the Texas recession. We expect the US economy will perform well next year too , though some regions – most notably Texas – could significantly underperform the national average.
* * *
So perhaps it is finally time to add that footnote to the "unambiguously good" qualified when pundits describe the oil crash: it may be good for everyone... except Texas which is about to enter a recession. And then Pennsylvania. And then North Dakota. And then Colorado. And then West Virginia. And then Alaska. And then Wyoming. And then Oklahoma. And then Montana, and so on, until finally we find just where the new equilibrium is following the exodus of hundreds of thousands of the best-paying jobs created during the "recovery" offset by minimum-wage waiters, bartenders, retail workers and temps.
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Double dip. The banksters screw Russia first. Then they destroy the US oil and gas industry, buy up their assets on the cheap, and force oil prices again. This is how things are done in a crony capitalist aka fascist society.
Fuck the Fed..... Fuck the House of Saud..... And Fuck the EU.
In my mind, this is all due to escalating EROEI. Oil prices were too high for the economy and the economy has adjusted, partially through substitution and partially through loss of other sectors of the economy. The supply/demand equilibrium needs to be reached but in a market as huge and complex as oil and so many people on the planet this is not going to be a smooth process. Add the money signal manipulation of the central banks and geo-political machinations of governments to the mix and it is hard to know what the true picture is.
All us peak oil types have been expecting "demand destruction" as part of the next stage in the big collapse. Now the really interesting thing to watch will be what happens to prices in two or three years and what projects will be taken off line in that time period?
Here’s an interesting piece of useless news.
Ukraine is considering George Soros to head the NBU (National Bank of Ukraine).
Another interesting name on the short list of five is (pull-up your diapers, boys and girls) Dominic Strauss Kahn!!!
I wonder who the other three “short-listers” are. Carl Icahn? Ken Lay? Charles Ponzi himself? ;-)
Looney
The cancer spreads.
Que the "Desperate" phase...
The big, fat bloated two-ton tyrant, will now become even heavier and more difficult to roll off of you. Hopefully you won't be smothered during that process.
North Dakota will be hit hard. Boom town does not even come close to the real estate nonsense up there. Texas is much more diversified than it was in the 1980's. Lots of small to medium sized drillers and rig service companies will feel the brunt of the drilling slow down
There is no mention of how long the Saudis can continue to distort the supply of oil. Maybe a year, if that. Once they get hungry we are right back to $100 oil. If TX real estate does crash I for one will be buying the dip.
I'm saying this for sometime now, something big is going to happen soon.
There will be plenty of work with all the new Obama immigration Taco stands.
The interesting thing about that 'jobs in america' chart is after the financial crash the non-shale states have apparently had much better job growth. If you were to start the chart at '09 the shale states would look like shit respectively.
The API's report... total impact on U.S. gross domestic product of $1.2 trillion, the study found.
The Perryman Group estimates that the industry as a whole generates an economic stimulus of almost $1.2 trillion in gross product each year
Almost like the biggest oil lobby is reading from the same script as the perryman group! How mysterious!
So what is the american petroleum institute after with all these 'studies' they and their comrades are publishing lately? A giant ass bailout perhaps??
Crude is still TRIPLE what it was in the 1990s.
When crude hits $10 a barrel, then wake me back up.
yer maybe, but triggered derivatives wont wait a year to be called in
If this continues construction in ND will come to a halt and builders will follow pink slipped employees out the door. The overbuilt rental market in ND will founder as apartments cant be rented to the people left and property owners go belly up when the commercial mortgage can't be repaid.
Maybe Putin will give NovoRussia heroes Givi, Motorola and Mosgovi what they need to go to Kiev and kill the oligarch snakes.
Givi and Motorola have become youtube rockstars.
https://www.youtube.com/watch?v=8l4mvWzO1dE
Why not Jeff Skilling, asshole?
To many analysts?
Johnny Corzine is on his way to Kiev.
John Corzine
We Corzined some folks
http://www.urbandictionary.com/define.php?term=corzined
http://themoscownews.com/international/20140313/192607256.html
Ukraine’s parliament has called on the United Nations to help resolve the crisis in Crimea as the region heads for a referendum on Sunday to secede from Ukraine and join Russia.
Ukrainian lawmakers adopted a resolution Thursday requesting an emergency special session of the UN Security Council in an appeal to the international community for what they say is a violation of international law by Moscow.
“We refer to the unprovoked act of aggression against Ukraine by Russia and its attempt to annex a part of the territory of a sovereign state,” said the resolution backed by 250 lawmakers, 24 over the required minimum of 226 votes.
Ukraine's parliament declared that under the principle of self-defense, acknowledged by the UN Charter, the country has a right to request help from other states or collective security organizations to restore its territorial integrity.
Any decision by the Security Council would be subject to approval by Russia, which, as an allied victor of World War II holds a permanent veto on the council.
The parliament of the majority Russian-speaking Crimea declared independence from Ukraine on Tuesday, adding in its statement that if the popular vote passes the country will become independent and will immediately request annexation by Moscow.
In Thursday’s resolution, Ukraine’s Supreme Rada said that despite attempts to resolve the conflict peacefully the situation in Crimea is deteriorating amid a flurry of activity by Russian military personnel operating in the country.
Troops lacking official insignia but carrying weapons and wearing uniforms used by the Russian military and understood to be under Russian command have taken control of military bases and key infrastructure on the peninsula in recent weeks.
Russian President Vladimir Putin denied the troops are Russian, calling them local militia.
Crisis? The people of Crimea told the scummy gangsters in Kiev to go f**k themselves. Just like the South told the North.
What about Corizine? Should his name be in the running?
PS
Fuck Goldman Sachs of crap!
silent weapons
Supply and demand for the oil industry is a big pile of bullshit. The major oil producers like OPEC can control supply anytime of the day at their will. They can create a surplus or deficit. Just like the peak oil propaganda- one big pile of bullshit to drive prices upwards just like it did. Now prices are falling and not a whimper about peak oil.
This oil price drop is about 2 issues: crush the shale industry and control non compliant countries.
I don't think Peak Oil means what you think it means.
Peak oil to me means we are at the top and can not climb higher with production. Hey I may be wrong and always willing to learn.
Good, here is what the world is running on (unless i missed somthing, mexico/north sea/brazil/venezuela easy) http://www.theoildrum.com/node/9263
And nobody tells what the real number is.
Its FINITE
but
when
Will check it out. Thanks
Yep. You have a 'flawed' concept of peak oil....there are multiple sources so please reread the concept and THEN report back.
case in point.
saints51
The price is going low and lower because The Industrial Age is about to start its collapse….. Temporarily delayed by $20 dollars oil.
No nation has extra oil capacity, beside, maybe, Iran and United Arab Emirates.
Once The Industrial Age collapses starts, prepared for an exponential collapse….
Let me give you an example:
By Steven Kopits: Between 1984 and 2005 the world had a 25% oil surpluses. Since 2006, global oil production is declining.
From 2005 to 2013, the world spent $4 trillion dollars on upstream [not including pipelines, refinery, transportation, wholesale] exploration and production. And another $3.5 trillion dollars to maintain current legacy [fields]. Result: Oil production has fallen by 1 million barrels per day [mbpd].
For Comparison: Between 1998 and 2005, $1.5 trillion dollars spent added 8.6 mbpd.
To put into perspective: Germany GDP: $3.5 trillion dollars. So if you compare to 1998/2005 period, the world ‘vaporized’ the GDP of Germany on oil production. And the world still came up short 1 million barrels a day.
How challenging is the situation: 2014 Capex [upstream] Expenditures Trend: About $300 billion. Current forecast Capex: $193 billion. Over 30% decline. Shell, 2nd largest oil company in the world, not only cut capex by 20% but, since 2013, it has been borrowing money to pay dividends.
https://www.youtube.com/watch?v=dLCsMRr7hAg
By the way: My first job was for Zapata Marine Service, in Brazil.
I +1 ya but what if production is declining as indicated by your example due to more people are unemployed? The jobs are not their so the individual may not have vehicles to fuel. We know for a fact that the unemployed numbers released by .gov are bullshit in the US. Europe and Japan are in the same boat.
saints51
We bloggers build elaborate theoretical models not better than our current economic models.
We bloggers pay little attention that “Money-Power” won’t go away. That there is NO more growth, besides running government deficit and monetary policy (free money, otherwise people will go jobless and hungry).
We do not study the railroad bubbles. To this day, most don’t understand that deregulation led to the 30’s Great Depression. Heck. Most people still think that subprime led to 2008 financial meltdown.
We won't see Hyperinflation this decade. We will see is less and less purchasing power.
There won’t be Hyperdeflation. You will see QE for the lucky ones and Bread and Circuses for the masses.
Of course, there will be a break point: When there won’t be enough energy for everyone. The QE people will afford it.
So the question left to answer is: When will the Bread and Circuses flow to the streets?
I believe America, and the dollar, will be the safest place to be at the beginning of the meltdown (2019). Then, America will become the least prepared place to be (2025).
“This obliteration of “false hopes,” requires an intellectual knowledge and an emotional knowledge. The first is attainable. The second, because it means that those we love, including our children, are almost certainly doomed to insecurity, misery and suffering within a few decades, if not a few years, is much harder to acquire.” – Chris Hedges
Well to the poster below that is complete fucking bullshit propaganda from a source like cnbc. I look around my state and see hardly any solar,wind or other form of overprice and deliberate low tech alternative energy. Celebrities and other liberals drive a prius but nobody else. Those dumb fucks do not realize all the petroleum products in their electric cars.
@Escrava - You said no more growth. I agree with you. There is no more growth and people are losing jobs which in my opinion is why oil price is going down due to lack of demand of fuel. You need wars for the price to increase again. And that war must start in an OPEC nation to use the main stream media for reporting major oil disruptions which will be total bullshit.
to Escrava Isaura
Fine anaysis but you are ignoring history. The meltown won't be allowed to happen. Just like there were 2 tiems during the 20th centiory when the meltdown was stopped via a world war, this meltodwn will be stopepd with a war on the Eurpean continent. And I can even predict when this war will start: spring 2015. By summer 2015 NATO will be attacking Russia.
First: I am not ignoring history; and I am not ignoring our reality
Second: There will be a WW-3 ‘Starting’ before US economic meltdown that I have for 2016. So, I will go with yours 2015 date.
Keep in mind: US will need trillions of trillions of dollars yearly to sustain their lifestyle and over 20 million barrels a day of oil. US elites know that those are impossible tasks to achieve.
I live in DC and the people here that are starting realizing our precarious situation are scare to death.
So, a US perfect scenery is a war in Europe, and against Russia. As well as a revolution in China. NOTE: This war CAN NOT come to America soil, because it will turn into a nuclear war.
The US financial and commercial collapse, as well as political and social meltdown will happen. And it will go globally. I have all four by 2027. US will be blaming the war and the world by implementing a global currency for their collapse.
Lea,
Growth is over. Next war will be the nail on the coffin.
Humanity will be facing our final decline. We are going back to the 16th century. You and I, like it, or not.
"I don't know (how WW-3 will be fought). But I can tell you what they'll use in the fourth. They'll use rocks!" – Albert Einstein
Humans are pretty creative. For example, we could use the cyclone engine which uses supercritical steam. We could fuel this engine for a long time using coal dust.
http://www.cyclonepower.com/
Also as technology moves forward, we will create bioorganisms that can make ethanol, probably out of celluosic hardwoods. It is not beyond the realm of possiblilty that we will create more advanced fuel cells and cheaper methods of hyrdogen production.
Yes, we are a species that is energy dependent. But, even more critical is the usury issue that demands ever more from futurity as increasing debts to pay debts from the past.
Get rid of the usury and we can build highly insulated homes (no more paying bankers the extra 200K or so on a home loan - instead we build good homes.) Get rid of private banker directed economies and we can vector our labor energy into being more sustainable on the planet.
So, it is a crap shoot as to whether or not we can shake off the banker parasites and their banker credit money system. If we can, then we will be able to direct our future politically rather than at the behest of an unelected psychotic pathological group caught in the grip of diabolical Kaballah and Zohar mysticism.
Oli consumption has been gradually falling in the West due to substitution (gas and wind and solar), more insulation, more vehicle economy and lower mileage. Not a lot to do with unemployment, mainly its the gas impact where oil has become much more expensive than gas over the past 10 years.
JohninMK
Sorry, your post is not correct.
First: Wind and solar takes oil. Wind and Solar are not substitute for oil. There ARE NO substitutes for oil.
Second: Natural gas only counts for about 3% of transportation in the US.
Third: Largest increases happened on Ethanol and Biodiesel. Both counts for 4% of the transportation. But, ethanol is heavily dependent on oil. And most of biodiesel is recycled diesel, which is oil to begin with.
http://www.eia.gov/EnergyExplained/?page=us_energy_transportation
Without boring you too much; and because I have posted this before:
US gasoline 2007
Produced: 3.3 billion barrels
Imported: 173 million barrels
Exported: 1.5 million barrels
US gasoline 2013
Produced: 3.2 billion barrels
Imported: 16.1 million barrels
Exported: 4.4 million barrels
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mgfupus1&f=a
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFIMUS1&f=A
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFEXUS2&f=M
Conventional Oil
Consumption 2006: 21.7 million barrels a day
Consumption 2014: 18.4 million barrels a day
http://www.eia.gov/countries/country-data.cfm?fips=US
http://www.eia.gov/countries/index.cfm?view=consumption
Produced 2006: 5.1 million barrels a day
Produced 2014: 7.4 million barrels a day
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=A
Unconventional Oil
Shale 2014: 3.3 million barrels a day
http://peakoilbarrel.com/eia-petroleum-supply-monthly/
Other Liquids
Palm oil, ethanol and other biofuels came to 2,354,000 barrels per day
Note: These are mostly produced outside of the USA
http://peakoilbarrel.com/eia-update-march-production-numbers/comment-page-1/#comment-45269
I upvoted you, but now feel like I need to take a shower.
Do you think you can get OPEC mambers to agree? The Arab states are in a war with the rest of the OPEC producers. The Iranians and Venezuelans are taking it up the ass with lower oil prices while the Kuwaitis and Saudis are laughing.
You make some good points but need to let go of the "peak oil" idea ... substitution, drastically increased efficiency of energy use, and technological development are why peak oil has been just around the corner for nearly 150 years now ... the only thing that might really result in peak oil is the massive poliical distortion (perhaps obliteration is better word) of valid market signals by the fed and others, together with the economc suicide of states like New York that refuse to develop the riches under their own feet to please the green religious beliefs of Manhattan elites.
"economc suicide of states like New York that refuse to develop the riches under their own feet to please the green religious beliefs of Manhattan elites."
ace im no green but i dont want that shit operation in NY - the water shed is worth more to me -i can pay more for gasoline - screw the money
fuck up Iraq, TX and SD -
I have a little list ... they'll none of them be missed.
Mr. Putin:
Any time your ready to blow the Saudi's off the map.
GREEN LIGHT...............
Vlad's back-up plan is to fart real loud. Or possibly to judo-flip a few flacid, compliant men to the mat.
There's a list where you can sign up to be one of those men.
Sorry Bob. Calling your dumbass out. I've been watching you, Bob.
You've been posting MSM/Bankster drivel on here since you got your acct here a few weeks ago.
Suddenly, you see a piece about AN IMPENDING TEXAS economic disaster, and you still see this as ammo for your anti Putin Bankster shilling?
Sorry, Bob. Somewhere high on the Russian plains, a shirtless man is riding a tiger and laughing at the west. We set a fire that burned our own house down. That's not even checkers, Bob.
You are the absolute weakest troll I've ever seen here, Bob.
May be bad for US Fracking sector, but cheaper energy is good for everyone else. Ask the Texas farmers is they hate paying less for gas, diesel and perhaps fertilizer. Or anything else made from oil (plastics...). Or those who are concerned about their ground water.
Sure, Russia may be a big part of it, but it's not the only part, IMO. Could also be the Saudis fighting for market share. Or both. I do not buy the "Lower Demand" pretext, because if Demand is down, you simply pump less, not more. Anyone who uses the Demand reason, is uninformed or a shill.
There are many knock-on affects.
'So Guvna Perry, your state, Texas, has absolutely collapsed economically in the past year and a half. Every single economic metric is showing bright red - wages are down, unemployment is way, WAY up, the housing market is awful, you get the picture. If you are elected President how do you expect the voters to believe you won't destroy the economy of the whole country in a similar fashion?'
It make a great narrative.
Hot weather or climate areas have less energy requirements for survival. So northern areas will suffer most IMHO
More watts of energy are actualy required to cool a home than heat it. So hot places are at the most disadvantaged. Mild places where its consistantly 50 to 70 degrees are most efficient. Cold places have the opportunity for better insulation, or just wear a thick sweater costing zero. The scandanavians do thst and have hot blonds for body warmth as back up.
You don't need an industry to implode in order to derail Perry. Just ask him to count to three on stage, or distract him with a shiny object.
Noben,
why the down arrows? Must be the picture. Your thoughts look logical to me.
I would like to add what I believe, as not only market manipulation by big oil, but also the bankers have aligned themselves to do some scalping of investers. The real money is made in big up or down swings of the stock market. Then include the Feds currency inflation/devaluation program still in full swing. Only those on the inside will be the winners. BTW what happened to all that "Peak Oil" talk just a few years ago? Was that more massaging of investers to go all in?
Simple. Because this oil illusion was built on credit.
It's not a question of oil- it's a question of credit.
The idiots borrowed based upon the price of oil above $65- revenue based debt.
Lenders lined up 12 deep to finance production in bumfork north dakota, certain that oil would never drop in price again- after all, it's oil......
See 2008.
Whoops.
Because he ignored the entire article. All of the job gains and GDP growth since 2009 has been from the energy sector. Now that it is collapsing there is no effect on the economy?
Of course lower energy prices are good for the consumers. That doesn't mean it's good for the economy and GDP. Does How do stocks and GDP look like in a deflationary environment? What happens to debt? That is the situation at hand.
What if the price of autmobiles dropped 50% in a few months? Good for consumers, right? What effect will it have on the auto industry? Slower sales because people will expect prices to drop furth, so they stop buying. Assembly plants shut down, laying off tens of thousands of workers paid $40/hr. Suppliers shut down, laying off more. Transportation feels the pain from less activity.
What if the price of food dropped 50%? Farmers go bust. Loans go unpaid.
You don't buy that demand is down? China crashing, Japan in recession, EU in recession, Russia in recession. Sure demand must be way up in a global recession. But then again, there couldn't be a recession because stocks and bonds are up.
Then this must be the answer:
Real middle class and working class incomes over the years have gone fucking backwards people can only take on so much debt.Concentrated wealth in so few individual hands does'nt do much for sustained growth or money velocity.
"What if the price of autmobiles dropped 50% in a few months?"
Zacharia Sitchen used to always ask us, :what if?"
hummm..ponders for a second...what if the prices for everything any one would use the money-god to buy went down 90%? So like now, ten dollars can buy one a hundred dollars of materials or foods that were low in cost because of the lowered costs to manufacture and grow them? And yet even with low earnings, say four or five hundred a week, every one could still have plenty of everything they really need because of the sudden investment of the manufacturing segments of America, and everyone had moar money than they knew what to do with?
Suppose this opens a door to all kinds of good input around this ponderation, but go ahead, take a stab at real solutions that benefit every soul on board, and not just a few.
Here is one idea that is working well in the surrounding community. People Trade. People are trading their services for other peoples services. If some one is a Doctor, and another is a gardener, then they can trade organic veggies for dr services when, and if needed. Speaking from experience, of course. Have not had to see them drs for years. Good foods and what limited protections from the babylonian created killing environment world-wide one can do, makes it is easy to stay healthy in this ever growing polluted world.
Soon, besides thousands of soup kitchens that will be created and if not only because they will be the best four star restaurants in town, but also People Trade(c) will become the center in these high traffic free food places popular and everyone will trade skills and services in mutually verbally agreed upon trades, and other folks services rendered. Quite easy, really. No one is set on stage to profit from the ideas that emanate from a Higher Power. They are for ALL!
Reckon, this opens the door for moar come the words of many. It is true, the wagon circle grow larger.
Wagon Train!
https://www.youtube.com/watch?v=qCRae5mRoRE
logically possible
Funny, how a subprime bubble, blown up by the Fed through its creation of CDO and MBS, comprised of all the worthless subprime mortgages it allowed Freddie Mac and Fannie Mae to write, sell and poison all mortgage backed securities with, can create a financial global disaster, worse than any preceding it, except for the printing of money the way a football stadium pops popcorn for a big game.
Funny, how a severe global recession can shut down demand so effectively that an imminent short fall in crude oil looks like a glut in 4 or 5 years.
(make sure that you repeal Glass-Steagall first.)
You had me at "bankers have aligned themselves to do some scalping of investors."
I've also wondered about that... i.e. the smallish, entrepreneurial types getting short squeezed and screwed by Big Bankers.
That's correct, screw the guys that did the work and took the risk, take their assets on the cheap through blatant manipulation of the market.
its callled a win win - Bankers get the bonds and stock cheap domestically and eventually have a shot at Russia as well unless the Russian people stand the test
which is why you cant assume SA directed the attack at Shale or Iran multiple parties have a stake in the outcome
Fascism is exactly what is happening. Use that term instead of crony capitalism. Maybe it will make the sheeple remember Mussolini and other despots and open their eyes to the destruction of free markets
if texas is headed for a recession, alberta is headed for depression. while the province may believe it has learned from previous drops in price and broadened its business base, alberta, and therefore canada, is highly reliant upon oil revenues. RE through BC, alta and sask will only remain high so long as chinese buyers are players in the market.
did it take you all night to nail the headline or was it on the tip of your tongue?
JPM provided that.
Hey maybe the Saudis finally figured out that the people running the USA are psycho...thus the crude crushing oil production on their part.
Russia was merely collateral damage in Saudi Arabia's drive to collapse world prices. The real target was their new North American competitors in the Bakken formations of the Dakotas. The break-even point for this new found oil is somewhere in the $60bl range, so it's easy to see this bonanza, which has become nearly one third US GDP, is expected to be short lived. How the over-bought U.S. stock market reacts to the reduction of one third GDP is anyone's guess, but more importantly, how many over-leveraged banks to this latest speculative bubble in the US go belly up?
BTFD. Bailouts on the horizon.
Only if Wall Street made the loans or made the wrong bets on CDO's CDS's and whatever other financial junk they gamble on these days.
It's all orchestrated by the Saudis but not only to screw the US. They are Machiavellian bastards.
http://blogs.reuters.com/great-debate/2014/12/15/saudi-arabia-is-playing-chicken-with-its-oil/
I've seen 20-yr-old kids working warehouse jobs making $100k base for 65hrs a week. Not sustainable. Sorry, back to school; I hope you like math.
Where are these jobs that pay 100k?
Dallas, San Antonio, and Houston are exploding and it isn't all oil. There are more and more out of state plates. Traffic in Houston, which sucked before REALLY blows now. Homes going up.... prices up also.
I'll just watch. Up or down, it's going to be interesting.
Many of the smaller towns have started to count on that income. The home prices in those towns have gone up largely due to the boom, the bust is going to be more dramatic for them. Everything could be affected, new truck sales, restraunts, apartment complexes, the entire segment of support companies for the industry and so on.
I didn't know that Mexican cars had license plates.
I knew they had no suspension though!
FU oBUMmer
Dallas is an economy in and of itself. It will always be a safe place to find a job. Housing prices are more insulated than the rest of the country and technology is becoming a major sector. Oh, and most people own guns and gold.
There is not one place in corporate america insulated from a fraudulent propped economy.
It seems to me that Texas has been the holdout bright spot in this economic disaster. Who thinks Texas can go down and the rest does not? Silicon Valley going to save us?
Well maybe theres work in the Pittsburg steel mills or Detroit. They make lotsa stuff there, right?
Oh man, it is going to be the shit! I guess I will till me a garden now....
Of course its Silicon Valley...seriously what other component of the economy do think has propped us up for almost a decade...housing...service industry...manufacturing...? Government spending,shale oil in the last few years and SILICON GODDAM VALLEY
Yes Brockhardman, everything you wrote about Dallas is true, but I can't stand the place and would never want to live there.
we won't miss you
Not one bit.
That's unfortunate that you don't like Dallas. But I can assure you one thing, when it all goes down (and it will), a large portion of patriots will be moving to or coming from Dallas. It's the place you want to be. Now.
Guess you missed the fun back in 1985, when literally every other house in Dallas was for sale for pennies on the dollar.
Without oil, Dallas dries up like any other cow.
What about 08 when oil prices hit the floor? Texas was still better, especially in housing, than just about everywhere else.
only Park Cities and Preston Hollow..lol
True dat. Eventually, nowhere to run, nowhere to hide.
Dallas always makes me think of this-
https://www.youtube.com/watch?v=pFN-LHYNYWU
@Ima : I lived in Texas back in the 70's and 80's through the previous oil boom and bust. They've done their best to diversify but way too much of the economy hinges on oil especially in West Texas and Houston. These type of prices destroy the real estate economy, home prices will plunge, home sales will plunge, mass layoffs, etc.
I saw this happen back in the 80's and already know what happens when oil plunges in Texas. It won't be pretty is all I can say. I'm sure the local press is spinning this every direction possible stating it's not going to hurt much but this is all wishful thinking. Just wait and watch if these prices stay down in this area for several years then go back and re-read this post. As the sayin' goes, been there, done that!
@ima... Have you noticed the amount of inner-loop upper-end homes going up for sale? Folks are splitting because of the number of new apartment complexes going up, and the really smart folks are splitting because they see the bubble about to pop.
The amount of construction going on around the city is staggering. Too bad that most of those construction workers will lose most of their hard-earned pay when the banks steal it back.
I'm north of Humble. I try not to venture into THE BEAST unless I absolutely have to. I've been here a long time. I've seen it all before. People come and go..... I just hang on as best I can.
Great opportunity to buy fully loaded, big trucks in shale states real cheap and sell them to non shale states with low gas pump prices....
Buy low, sell high. ..or inflate then deflate..whatever works
In 2009 a friend of mine bought a hummer for $15,000 and he looks very happy now a days.
Win win for Obama.
Slam Putin & Cruz. Twofer: Texas & Russia.
http://www.globalresearch.ca/what-putin-is-not-telling-us-the-raid-on-th...
Even facing what under any circumstances is a perfect storm; President Putin delivered an extremely measured performance at his annual press conference and Q&A marathon.
The perfect storm evolves in two fronts; an overt economic war – as in siege by sanctions – and a concerted, covert, shadow attack to the heart of the Russian economy. Washington’s endgame is clear: impoverish and defang the adversary and force him to meekly bow to the ‘Empire of Chaos’s’ whims. And bragging about it all the way to “victory.”
The problem is Moscow happens to have impeccably deciphered the game – even before Putin, at the Valdai Club in October, pinned down the Obama doctrine as “our Western partners” working as practitioners of the “theory of controlled chaos.”
So Putin neatly understood this week’s monster controlled chaos attack. The Empire has massive money power; a great deal of influence over the world’s GDP at $85 trillion, and the banking power behind that. So nothing easier than using that power through the private banking systems that actually controls central banks to create a run on the ruble. Think about the ‘Empire of Chaos’ dreaming of driving the ruble down by 99% or so – thus wrecking the Russian economy. What better way to impose imperial discipline on Russia?
The “Nuclear” Option
Russia sells oil in US dollars to the West. Lukoil, for instance, would have a deposit in US dollars in an American bank for the oil they sell. If Lukoil has to pay wages in rubles in Russia, then they will have to sell the US dollar deposits and buy in Russia a ruble deposit for their bank account. This in effect supports the ruble. The question is whether Lukoil, Rosneft and Gazprom are hoarding US dollars overseas – and holding back. The answer is no. And the same applies to other Russian businesses.
Russia is not “losing their savings”, as Western corporate media gloats. Russia can always require foreign companies to relocate to Russia. Apple, for instance, may open a manufacturing plant in Russia. The recent Russia-China deals include the Chinese building factories in Russia. With a depreciated ruble, Russia is able to force manufacturing that might have been located in the EU to be located in Russia; otherwise these companies lose the market. Putin somewhat admitted that Russia should have been demanding this much earlier. The – positive – process is now inevitable.
And then there’s a “nuclear” option – which Putin didn’t even have to mention. If Russia decides to impose capital controls and/or imposes a “holiday” on repayment of larger debt tranches coming due in early 2015, the European financial system will be bombed – Shock and Awe-style; after all, much of the Russian bank and corporate funding was underwritten in Europe.
Exposure to Russia per se is not the issue; what matters is the linkage to European banks. As an American investment banker told me, Lehman Brothers, for instance, brought down Europe just as much as New York City – based on inter-linkages. And yet Lehman was based in New York. It’s the domino effect that counts.
Were Russia to deploy this “nuclear” financial option, the Western financial system would not be able to absorb a shock of default. And that would demonstrate – once and for all – that Wall Street speculators have built a ‘House of Cards’ so fragile and corrupt that the first real storm turns it to dust.
It’s Just a Shot Away
And what if Russia defaults – creating a holy mess out of the country’s $600 billion debt? This scenario reads as the Masters of the Universe telling Janet Yellen and Mario Draghi to create credits in the banking systems to prevent “undue damage” - as in 2008.
But then Russia decides to cut off natural gas and oil from the West (while keeping the flow to the East). Russian intel may wreak non-stop havoc in pumping stations from the Maghreb to the Middle East. Russia may block all the oil and natural gas pumped in the Central Asian ‘stans’. The result: the greatest financial collapse in history. And the end of the ‘Empire of Chaos’s’ exceptionalist panacea.
Russia will never default. China has their back if necessary. Default talk serves only the Ruble/muppet rip-off
You're making it personal, when it's not. A default is a money-making proposition. It has nothing to do with honor.
Sure, the distress in Russia is just our imagination and this is really an example of the great chess playing by Putin. He could destroy the western financial system today but he doesn't because suffering in Russia is a great chess move.
And Russia could stop selling gas to the EU and instead sell it all to the east using additional pipelines that have not been built. And not building them and being dependent on the EU was a master chess move.
Moscow "impeccably deciphered the game" so well they had no idea it was coming and were unprepared. (Although everyone else could see it coming.)
Putin may punish the EU by selling Russia's gas to it at a discount, just like Putin sells gas to WUkraine (Russia's enemy and the country who has been killing civilians in EUk) at a nice discount.
Putin and the Russian elite want to maintain their profit margins and will do so while using the Russian peoples sacrifices. They will not do anything that destroys their hope to get a seat at the west/zionist big table (for themselves not Russia)
unless they get the rubles back in the country, back with gold/oil/college age pussy, and continue leading the de-collarization charge as China stops buying US sovereign debt?
Given the array of Anglo-American/Zionist and banking and media forces arrayed against him, Putin has done rather well.
And fwiw I'm less pro-Putin than I am anti the forces acting against him.
Does anyone seriously contend that the well-being of the people of Ukraine, or Russia, is what is motivating the United States?
Putin has not done anything but get bitch slapped over and over again and take another step back. He has asorbed the abuse well and with dignity and I admire his public presence. But he does not act or counterpunch.
All Putin does is sells liimited arms to allies in the process of being destroyed by the west. And watches the bloodbath hoping the ally enough damage to slow the advance on Russia.
The facts do not care which team you root for and the intent of the US is not for the well-being of any but the rulers of the US (even the EU).
The fact is that the Russian economy is diversified. The error in thinking that it is not is caused by not understanding that it is diversified as any normal country (or more), but on top of that diversification there is a huge oil and gas wealth. (Name, 10 more diversified economies). Now, people confuse these things. What they are actually saying is that because Russia is number one with oil & gas wealth it has failed cause it is not also number one industrial nation in the world. From Soviet bankruptcy and 1990s anarchy, Putin should have been able to make Russia number one industrial nation in 10 years (which will happen in an additional 10 years). - That's the logic of those people. - But zim zala bim, now in 6 month Russia has become diversified, 50% of value of oil wealth is gone, so it makes anymore 8% of the GDP. Great diversification! Everybody should be happy with the results now. - Oil disappeared, but everybody kept their jobs. Sounds like diversified economy to me.
The boomerang effect will be a bitch for the Saudis.
Like I keep saying, they are just pissing up a rope. Stupid, stupid, stupid................
Falling oil prices are a global problem that will add to the pressures of global economic collapse.
http://www.globaldeflationnews.com/oil-light-sweet-crudeelliott-wave-upd...
http://www.globaldeflationnews.com/whats-really-happening-with-oilthe-la...
http://www.globaldeflationnews.com/has-the-u-s-secret-deal-with-saudi-ar...
There is something I don't understand about that chart above that zerohedge posted.
If the jobs lost resulting from the bust in oil prices that has recently occurred is the concern than why do the oil jobs not drop from the 2008 to 2009 period when oil fell even more precipitously?
I mean we were talking $140 to $35 and you couldn't tell by the chart posted in the article.
(I am talking the shale states)
And that chart looks like roughly 200,000 jobs were created in each state over a four year period or 75,000 per state per year (being generous, it's actually even less than that (I excluded W. Virginia in my calc and added the jobs to the other 4 states)
That's a good question and the answer from someone who has looked at the data is that there was no new E&P activity in the US at the time as a result of the price spike because it didn't last. Furthermore, that old conventional oil isn't worth so much and no one was going back to punch holes in the chalk for 50 bbl/day at $40/bbl. So when the prices moved up, there was some marginal increase in drilling but it wasn't like it has been with the shale because the conventional oil just isn't worth going for given the low volume produced, at least not in a big way that would attract much capital. The latter is what produces more jobs and that is what has happened with shale no matter what you believe about it being easy money that was thrown at nothing or you believe shale is a viable way to bring significant oil production back on line in the US.
Good question and see below.
There is not enough space here or anywhere to discuss the complexity of "Houston" (yes I have driven in it and through it and it is huge) suffice to say HOUSTON might have a liquidity crisis but ENERGY does not.
Now back to your reguarly scheduled "building binge" and whatever supports that thing....
If you look at both the employment and unemployment charts for Texas you will see the slight dip in employment around 2008-2009. Slight dip, not disaster. And that will be the same this time, even slighter, though.
There is no glut.
Unless wages and equipment (for retooling and building) are highly negotiable I can't see how this is possible.
It's a commoditiy that can go from boom to bust with almost no change in unemployment in the underlying industry(ies) associated with it? That would be like a Central Banks wet dream. They need to find out how to replicate this model.
You wish
I hope . .
At least they're getting $4.00+ for nat gas...oh wait
It was 2 with a high of fifteen.
Wow...look at that production collapse.....
Actually NG also includes NGLs which brings the price per mcf to around $5.50 even with $3.50 at the HH. Of course if you are just producing dry gas up in the Marcellus then you are well and truly hosed.
But But we want to bring Russia down .
A lot of the oil related activity in Texas is refining which is doing well with the cheap imported oil so it's going to pick up the slack that the E&P sector produces. This is my guess as a native Texan who has lived through both cycles in his adult life. In 1986 everybody was a landman and every dentist and doctor was in a LP drilling for oil. Lot's of those folks got killed on those deals and ended up bankrupt even though they were solvent on an individual basis without their LP investment. This time around I don't think people have that kind of personal exposure except at the job level. True there are tons of landman jobs that will be lost if the price stays low for very long which I doubt. The other jobs lost will be those on the rigs but they weren't there in 2010 anyway so they are relatively new and haven't contributed to the economy so much. Most of the drilling is in places where those guys are not buying homes, they are renting temporary shelter and commuting from wherever they already lived. Texas is a very diversified economy and the US is very dependent on it so if Houston has a problem then too does the US.
Entertaining reading all these desperate attempts by Texans to convince themselves they won't suffer from this.
Texas may well suffer, but if it does, it will have plenty of company. Having lived here 35 years and predominantly working for corporate interests, especially growing ones, there is a lot of diversification. On the other hand, about 80% of this years revenues have come from oil related industries, so I am nervous. Falling oil WILL HURT, we just don't know how much.
abcdefg
yeah, we'll have to fill our pools with $100 bills instead of $1000 bills when we want to swim in our money like Scrooge McDuck... don't worry about us, though, we're made from tougher stock than your typical bi-coastal metrosexual so we'll be just fine, bless your heart...
Grover Cleveland and I don't circulate anymore. Better stick with the Benji's.
"Why so happy, Munchkins?"
"I wiped out the US Oil industry, Reggie!"
"Don't we need oil an' stuff?"
"The Celestials have made me a deal. And everyone thought I was trying to hurt our top-secret BFF Vlad!"
"Hmmph!"
"Jealousy does not become you, Reggie."
"What 'deal' did you make with the Chinese?"
"I sold them California. All of it! Wait until they find out it's radioactive!"
Rick Perry takes all the credit for the boom with his deregulation (or should I say decriminalization) "Corporations can do whatever they want" = Jobs theory. Who wants to bet he'll take the blame for the bust?
I'm sure Toyota and StateFarm are moving their headquarters here because of the close proximity to oil. The Texas economy was better than most even when oil prices fell in 2008 and 2009. It will hurt, but other factors including business climate will always play a role. You can live a healthy life and still die in a car crash. I think most of us see a crash coming and Texas will be the least of it.
oddly enough, most politicians do their best in helping an economy along when they decide to keep their goddamned mitts out of it and let it take care of itself... so yeah, Perry can take credit for leaving well enough alone I figure... not that I'm a fan of ol' Helmet Hair, but the numbers speak for themselves... you can't throw a rock down the street without hitting some damned California or other coastal neo-carpetbagger who came here hat in hand to find a job... now if we can just ban them from voting, maybe we can keep central TX from turning into a bigger hippie shithole than it already is...
Yeah, and Austin smells funny too.
Personally, I'd like to have an open season on CA carpetbaggers. I've seen first hand what they can do with their more-money-than-sense way of going through life.
"... you can't throw a rock down the street without hitting some damned California or other coastal neo-carpetbagger who came here hat in hand to find a job... now if we can just ban them from voting, maybe we can keep central TX from turning into a bigger hippie shithole than it already is..."
Thank you for that. We are in for some tough times.
I fully understand why people want to move to Texas from the various other states. It's much easier to be welcoming when the people who arrive don't try to make Texas into where they came from. That goes for Californians, New Yorkers and Mexicans.
As it is, I wish I could take a big pair of scissors and cut Austin off the map and fling it towards the left coast.
they don't call it the People's Republic of Travis County for nothin'...
I'm lucky where I live as most of the Northeastern refugees who are escaping the socialist/fascist hell of NJ and NY are not like that so they are not trying to turn my area into a clone of South Florida or NJ/NY City.
Now, the Massholes are a different story.
Maybe Obama's war on shale is not targeted at Putin or saving the environment - but rather is revenge on Texas for their challenges over border and immigration.
Obama's war on shale?
That's just crazy!
We all know Obama has been screaming for more development of oil, gas and coal....and don't forget pipelines!
And considering his excellent record for economic and job production, who in their right mind would imply he would desire any destruction of such an integral part of our economy?
US Crude Oil Production
Interesting occurrence around 1970. In fact, some might call it a "peak".
Just throw some more money, debt, and derivatives at it - problem solved.
Oil is not as big in Texas as it used to be. Still big in South and West Texas. Houston is more of a refinery area. Dallas is mostly NG. Texas has more fortune 500 companies than any other state. Low taxes and warm weather attracts people and businesses. Yes the traffic is getting bad
Oil south of $60bl may or may not kill Keystone, but it will certainly be the coup de grace to shale oil production in the Dakotas. With energy production now being one third of US GDP, it's time to pull those DOW 10k hats back out.
kleptos/SA decided it was time to get the "house" in order. do we let them get away w/it? will vlad do a lil orderin' of his own?
Where clandestine government agencies and Big Oil meet at the dinner table to blow up the financial World. Got to hand it to Brennan at Langley. He's busier than a fucking one arm wallpaper hanger...
If he's not orchestrating the deaths of thousands at the border of his most dangerous opponent he's creating economic terrorism on the World with the most important oil producers!
When you start wishing you had Henry Kissinger as either CIA Director or Secretary of State you know you're fucked!
http://www.strategic-culture.org/pview/2014/12/20/how-cia-launched-the-f...
https://www.youtube.com/watch?v=330t23ZfRsQ
http://investmentwatchblog.com/russia-rejects-syrias-plea-for-3-billion-...
That strategic culture article is interesting.
Cutting to the chase...
It's a shared role of Brennan and Clapper as the "Commander-in-Chief"...
Obama is the House Nigger that is allowed to read what they give him!
Yeah but, Texas will still be on top in a recession. Always has. Always will. We are the cleanest dirty shirt.
Looks more like you're the first to bite the dust from my standpoint
Ha ha ha a ha ha ha ha ha! Bwa ha ha ha ha ha ha ha! I'm in advertising!
So goes the rest of the economy
Boom...Bust..Bitchez!
Shale was always bullshit.
The Texas Partee is coming to an end. Houston was especially depressing during the previous oil busts. It's heavily dependent on high oil prices. My two chem engineering friends there are already bracing for long-tern layoffs. The different with this coming Energy Bust will be it will hit the fairly well-educated Middle Class private sector esp hard.
I suspect their construction/housing Bubble is about to get some reality shot into it.
Oil City Prepares for PainAlthough it’s early days for the oil glut, Houston is starting to feel the pain. Energy companies have begun announcing cuts to their 2015 capital budgets of as much as 25 percent. Rig counts are falling in Texas as companies shut down drilling operations. At $60 a barrel, by a rough calculation, companies producing oil in Texas have collectively seen their monthly cash flow fall from $6.4 billion in June to $3.6 billion.
http://www.businessweek.com/articles/2014-12-18/houstons-energy-industry...