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Jeff Gundlach: "If Oil Drops To $40 The Geopolitical Consequences Could Be Terrifying"
In a recent interview with FuW, DoubleLine's Jeff Gundlach explained his concerns about the oil market not being "unequivocally good" for everyone...
Question: The crash in the oil market is already causing jitters in the financial markets around the globe. What is your take on that?
Gundlach: Oil is incredibly important right now. If oil falls to around $40 a barrel then I think the yield on ten year treasury note is going to 1%. I hope it does not go to $40 because then something is very, very wrong with the world, not just the economy. The geopolitical consequences could be – to put it bluntly – terrifying.
What would that mean for stocks?
Gundlach is right historically...
Large and rapid rises and falls in the price of crude oil have correlated oddly strongly with major geopolitical and economic crisis across the globe. Whether driven by problems for oil exporters or oil importers, the 'difference this time' is that, thanks to central bank largesse, money flows faster than ever and everything is more tightly coupled with that flow.
So is the 45% YoY drop in oil prices about to 'cause' contagion risk concerns for the world?
* * *
Of course Gundlach is not alone in this rational concern...
"In its November 14, 2014 Daily Observations ("The Implications of $75 Oil for the US Economy"), the highly respected hedge fund Bridgewater Associates, LP confirmed that lower oil prices will have a negative impact on the economy.
After an initial transitory positive impact on GDP, Bridgewater explains that lower oil investment and production will lead to a drag on real growth of 0.5% of GDP.
The firm noted that over the past few years, oil production and investment have been adding about 0.5% to nominal GDP growth but that if oil
levels out at $75 per barrel, this would shift to something like -0.7% over the next year, creating a material hit to income growth of 1-1.5%."
-- Mike Lewitt, The Credit Strategist
Source: Bloomberg
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Terrifying to all dictatorships and fantastic for all other countries.
I don't think Kim and Fidel are all that worried. Obozo and the Frau on the other hand....
Seems to me the Castros just won big.
Bought plenty of soap over the weekend.
Gold Bitchez....Take that to the BOAT.
Isn't this whole "broke ($40) oil price" argument just a slight variation of the broke window fallacy? I mean the investment that formerly went to oil will now just migrate to some other area.
Are the Saudi's going to have USA invade all the oil rich countries and protect their oil... I mean freedom and democracy?
This price war reminds me of Walmart.
No, they'll just stop selling it in US Dollars.
@Patriot Eke: I don't know how that makes sense (cents).
The world could not continue the way it was going.
The world needed a shake-up.
Gutting the oil patch is the optimal strategy and may work.
If I were in the oil patch, I wouldn't worry about getting gutted so much as there being only positive consequences after it happens.
Oil below $40. Soon.
This isn't going to be a shake up. Reality is about to drag the world outside and beat the stupid out of it.....
Terrifying consequences like gold going to $10k/oz?
I hope Putin is learning a good lesson from this, not to mess with Barry ... or we'll force oil down to $20 and really teach him!
When he sees how many merikan companies go bankrupt and peeples get laid off, he'll reel from the pain we're causing him.
Oil was less than $40 a barrel throughout the 1990s, and went over $40 a barrel in 2004.
This oil price drop is a correction.
"This oil price drop is a correction."
No, it is not correction, it is something else... The cost of extraction/production has gone up a lot since 94 (in real terms EROEI) and quality?
oops--factor in the new price of oil and refigure your cost of extraction /production---duh??
Oil will drop to $35 BANK ON IT. It won't go much lower than that but it *will* goto $35.
Remember it costs much less to send a 100,000 GI Joes with all their toys and tanks over to bomb Iran if Oil is at $35 versus $135..
Problem is it is also cheaper for Putin to send over his Ruskies too.
This will not end well.
Omar deflation being baked in. The Ponzi is hurting. So are the over drafted producers trying to pay back loans with stronger $$.
I have a feeling the country with the reserve currency and a printing press will prevail in this predicament.
https://www.youtube.com/watch?v=VI6tBwVjyOY
Every country (except for a few suckers in Europe) has a printing press. As for " reserve currency", it's all in the eye of the beholder...
So again remind me. In 2008 when gas cost $4+ we had a horrible correction that lasted for years. But now that gas is $2 we are near apocalypse?
What does he mean "if oil drops to $40"... That's a foregone conclusion... Meh, make some fiat on the way down...
"sucker" here agrees. printing does not solve problems, it just procrastinates them
Don't know about 35 but it will definately go down to at least 40 in the next two months, I know this because I am short a mess of /CLH5 puts on the 45 line.
already 48$ the 06/01/15.. you wont have to wait february to see it loose 8 box....
i expect 39$ end of month.
Yup, and a correction that was long over due. The world didn't end in the 90s when gas/oil was reasonably priced. Anyone with common sense knows that lower prices is a good thing, not sure when zero hedge became Keynesian hedge with everyone clamoring for higher oil prices. That is unless the people commenting have some sort of interest in higher oil prices. Fuck that, I'm gonna enjoy my savings at the gas pump while I can. If you're a one trick country whose only source of income is oil, then I would start diversifying. You know who you are out there...
I think many of us are just surprised by the speed and pace of decline - which brings it's own adjustment problems. But yes, it's reality hitting hard ultimately, in many of these areas we've been following. It's going to be shocking to see other areas succumb to it.
i think the most surpsing thing is the prica at the pump falling so fast......costco has been 25- 40 cents a gallon cheaper in maryland than regular stations. in maryland dealers are not allowed to sell fuel under cost. the great schaffer did that to protect ma and pop stations which didnt exist...long story..but my point is, i use costco as a accurate street price and it is falling daily....prices used to fall like a feather and rise like a rocket..not this time...
if you believe that money get spent/or saved (and I do) and that money not spent on oil (and associated extractions) will be spent somewhere else (and I do) I just don't see how it leads to a collapse in the economy.
I do see how it can be a byproduct of collapsed economic activity.
Sure....if we don't invest in more fracking, why doesn't that just free up investment opportunities elsewhere. Or is the fake FED induced economy so artificial to begin with, rationale no longer applies anyway?
I think you answered your own question.
I think the ZH take is basically twofold:
1 - from the Keynesian's perspective, this won't help since it will mostly extinguish debt and lead to less borrowing from oil interests, and
2 - it happened very quickly and will have effects throughout the already fragile system.
Working against treasuries is the dollar which is debt. Why hold ANY debt when simple FRN's will do?
Also since when is free energy an encumbrance to a recovery? Only if you're larded up on debt and overhead and even that can be fixed since there is no liquidity crisis.
So go long the chemical business as they have had free energy for some time now. That says to me if I want to launch a rocket it could be really inexpensive to do that here. I've got an entire war effort as a backstop....what's the problem?
A thousand bucks for an ounce of gold...why not grab ten tons from outer space?
Has the US stopped minting silver dollars? Nope.
Have refining costs collapsed? Yep....
I wish I could up-arrow this 1209...1210...1211x.
By definition, the next crash will be horrific beyond the scope of our understanding of the concept of what 'horror' really is. To be frank,
genocide seems to be the end result rather than a mere beating which might leave society still intact. If the nxt crash is ten times what 08 was the consequences will be dire on the level of civilization itself. The next crash will not be absorbed like previous crashes IMO. This time things are a bit different and much more frightening to think about as CANADAs dollar drops 15% in just over one year. I have lost much
over the last four quarters and the fear level is too much for moi of late.
Remember this - the prophecies of old refereneced that after this <yet> event there will be much talk about the market coming back. It will start to come up - and people will start to invest thinking it was a really good buy! Don't be fooled! It will then crash down to nothing and be gone - forever.
yea, yea 1934 bubble. You really must be a scream at a party right?
the 08 crash HAS NOT BEEN ABSORBED....
only financial fancy gfx to display dreamy days, the reality is unemployment explode all around the world, ppl got less and less to live, the populations are self tightening more and more every day.
average of 20.000 per month ppl losing job in france,when frog president say stop bashing, we are winner country, ie : stop panic, trust us.
remember 2012 ? " when they say to not panic, generally, it is time to panic "
this decade is prolly the last before physical change on the globe surface occurs.
https://www.youtube.com/watch?v=djwPqAJ_3GY
Here you go, explains it.
Good video,rehashes most of what I already know but explains it better than I can. Thank you.
Civilization
https://www.youtube.com/watch?v=1wiRhVzsXFM
The best explanation of Petrodollar is below. And it’s a ‘Quick’ reading.
http://ftmdaily.com/preparing-for-the-collapse-of-the-petrodollar-system/
The best explanation of Central-Banks (bubble for the rich and bogus jobs for the elites and their cronies) is below.
https://www.youtube.com/watch?v=p5Ac7ap_MAY
I highly recommend both!
If you watch the news closely, it looks far more likely the US is prepping to invade the Saudi's.
14 years afer 9/11 and suddenly in the past six months they're pushing to get a suppressed part of the report out that blames... guess who?
Well when we had the majority of the Hijackers that were Saudi's. Some of them are still alive today, but we won't hear a peep about that on the news. I still don't understand how that their passports survived the building collapse and were found... The whole thing stinks but that would be a conspiracy theory now.
Ask a ten-year-old: Could a paper booklet survive an explosion that obliterated two 100+ story steel and concrete buildings?
They will tell you 'no'.
And now you understand that the average American TV viewer (and un-clearanced policy maker) is dumber and more gulliable than a ten-year-old.
The USSA: an Empire too stupid to survive.
To me it was always how on earth could two guys who could'nt even fly pilot a 767 with pinpoint precision into the ground floor of the Pentagon,no ground scar no photo evidence just not possible.
The only credible evidence that jetliner hit the Pentagram, er Pentagon, is that a friend of Fred Reed says he actually saw a passenger jet hit the building.
Yes, and let me add that the Pentagram, errr, Pentagon has absolutely no security cameras surveying the perphery of their building. Where is the footage? .gov wouldn't recognize the truth if it bit them on the proverbial ass. ;-D
Seek
I will toot my horn here and say I told you so a year ago when every one was speculating on the origin and purpose of ISIS.
As seen on Greg Hunter's .....Rob Kirby talks about the impact on 500 Billion in Oil bonds defaulting.
http://usawatchdog.com/oil-derivatives-explode-in-early-2015-rob-kirby/
I can think of a buyer for all that garbage. It will be bought and laundered by the fed just like the rest of the shit piles from the banks.
And flushed down the memory hole...
Define "laundered". To my knowledge, every piece of shit/junk that the FED bought over the last 6 years is still on their balance sheet...
Citi?
Oil bonds defaulting. Oil and energy derivatives and US$ currency derivatives going nuclear. $billions and $billions are on the wrong side of these bets. The huge movements will trash the losers. Who is exposed? Who is it going to be? Citi? Deutsch Bank? JPM? Hedge funds? There will be blood on the streets.
And somehow I'm thinking that blood is going to be yours and mine, not the banks.
Just a hunch - at least until that frickin' asteroid plows into Elizabeth, New Jersey. It sure could use an asteroid or two. I'm pretty sure that's where it would WANT to hit earth. Wouldn't you?
Well, except that energy was the last "productive" place to seek yield. Also, "investment" is built not upon savings, but leveraged collateral that becomes more and more worthless by the day, as there's not any sort of sustainable demand for it.
That's true. But that migration (reallocation of resources) can be painful for those in that sector. I doubt there are a lot of good prospects for workers as things go further into the toilet. I imagine repurposing all the capital is insanely expensive. Then you've got all the ridiculous financialization built on this shaky edifice that will crumble soon. Then politicians will swoop in to save the day (dig an even bigger hole). Lather-rinse-repeat.
0b1knob Isn't this whole "broke ($40) oil price" argument just a slight variation of the broke window fallacy? I mean the investment that formerly went to oil will now just migrate to some other area.
---
Yeah, it's a bit confusing to me as well. In general, lower priced oil ought to be a boon for the economy and for economic growth.
It would obviously be a crimp in the budget of oil producing countries, and likely in companies helping them to produce that oil, but in and of itself a drop in the price of oil shouldn't be an easily observable bad thing.
I could see where it could possibly be a harbinger of bad things with respect to being the canary in the coal mine type of thing... ie. a result of a collapse in world economic activity, but not a cause of that economic collapse.
I could also see it being a major disruption on the political scene.
It also seems reasonable that it could cause major disruptions in the financial markets if some of the big players (read TBTF) have made some very bad gambles with other people's money.
I could also see some very bad to catastrophic damage to the oil producing companies and suppliers, shipping companies and so on. In fact, that almost seems a given.
But the authors of this article haven't clarified the relationships involved and how they're predicting the actual dynamics of the risks involved.
Are they predicting failures of some of the TBTF banks or financial institutions because of this? Or that some oil producing countries with lash out militarily because of the economic strains? Or what? ...
If the would be competitor to the usd has a portfokio comprised of gold and oil andnid merika can somehow drive the price of gold and oil lower...then this price drop could simply be a usd protectionist move. Now the "unintended" consequences could be interesting to say the least...
Yes, gold!
All that "investment" was paid for with borrowed money which now can't be paid back.
Not sure where they can find any other area to generate another equally huge debt build up.
Gold normally buys about 12 barrels of oil. It's way over priced right now.
Wow, LOL. You really are on a roll today.
Isn't that similar to an ounce of gold buys a good mens suit? What are good mens suits going for right now? Men's Wearhouse sells them for $200 I think.
The key work is good, fuck knuckle.
Not that Chinese produced crap the asshole running MWH sells.
That shit might be fine for Johnny to wear to homecoming.
+1 for fuck knuckle!!!
a handmade shirt in Houston will run you $150 - $300 depending on the material you select. That's just a shirt made from about 20 measurements. So, MW prefab clothing with cheap material, etc...no comparison.
And could someone please short Tesla?
Gold normally buys about 12 barrels of oil. It's way over priced right now.
These are not normal times
The world is still turning, the sun is shining, people are posting on the internet as always, seems normal to me.
Everything is fine, life goes on, but the oil patch is fucked...
so which one is the bargain? trick question-both, ha...
Guys, when TSHTF people are going to sell whatever assets they have to cover margin calls and other obligations owing. Gold will have a bid but with the volume that will hit the market the price WILL drop until the overhang has been taken off the market. Only then will it rise.
Will you be strong enough to hold on until the dump has been absorbed? That is the contingency you have to plan for and no other. If you have US Dollars it will be good buying for the stackers.
Why not bankruptcy?
Just default already....
too true---back about the time Blackberry was the "S&P mini" of day traders -- gold and oil got crossed-- I remember some talk about oil becoming the "new" gold--- interesting in that they are both commodities, futures traded. -----just saying
soap for coke?
long
bilge pumps....
Terrifying to all. I don't recall many billionaires or millionaires in the soup lines or frequenting soup kitchens.
Dictatorships come and go. One just replaces another. It is always us serfs that suffer and pay the price.
I've never heard of a dictator starving. Does anyone think Castro, Kim, Mao, Pol Pot, Stalin, etc ever missed a meal?
None of those guys ever had to fill up a gas tank.
not really and lenin had a rolls royce...
Oh it's not a dictatorship in Texas where our oil is held in private hands, speak for yourself. It's also not fantastic for you if you are employed in some part of the oil E&P industry since your job is now at risk and you have to worry about getting laid off. So it's not fantastic at all for the US, it's actually pretty damn bad.
Not terrified, but hopeful... Got a pocket full of cash and looking to buy some property in Houston. In a market that saw a +20% increase in real estate prices, this time I hope to pounce on a major downturn in area. I have seen it several times in my life... Boom to bust on real estate in Texas.
Maybe I should be careful for what I wish far... But for now I'm pulling for $40 oil.
If your cash is in the bank you might not have it if your bank is at risk for lower oil prices. The FDIC backstop saved a few people back inthe 1980s but lot's of people lost their life savings when the banks in Texas went broke in the 80s. You also cannot buy real-estate with cash, it's illegal, you have to use a check.....................
Keep pulling for someone elses loss to be your gain. That is the same system people on here love to hate but they cheer for it if it works for them.
JUst another thought, you will not find a property in a good area for low money, you will find stuff in places you wouldn't want to live for low money. Real estate is all about location, location and location. For example, I am sure you can pick up a cheapie in Pasadena or Pearland and maybe Cypress or Katy but not Memorial or River Oaks or anywhere inside the loop.
Euro just busted 1.19...from what people posted earlier, 1.20 was a major level.
119 Euro
119 Yen.
91 USD
They have both to acheive 100 so that the new currency can be equitably distributed.
Ther idea is to bring everything to parity.
The Yen must strengthen.
The USD must strengthen from 91 to 100
The Euro still needs some devaluation.
That is what it seems that they are up to.
Including GBP, CHF, AUD and NZD? We are in for a ride! :-)
Yeah...right to the NWO Slaughterhouse.
WTI Oil busted through $50, is trading in the $49 handle, and is currently trading at $49.95.
How long will it be until we realize another 20% decline from current levels to realize that terrifying $40 benchmark?
The reset is being manifested.
Let it go to par then convert and plan for the exit from the US.
Life in Europe is comfortable and soon cheaper than anywhere else. Not a bad place to live out the rest of our miserable lives.
good plan except i like to blow shit up with guns...
Guns? Whom needs a gun....when Bombs are so much easier to blow shit up with?
If you can speak the lingo and are fairly young, fine.
But most of us don't and aren't.
Home isn't a place; it's people.
I guess I'll have you losers for company wherever I go, though, as long as I have an internet connection ;-)
Horse-shit... I can buy with a cashiers check, have done it before. I don't need cash in the bank or a check from my account. And as for only buying in the less desirable areas... A low tide exposes the naked swimmers. I live in the Heights. Have watched prices flux over 20% several times. So I'm not worried about only shit properties being exposed.
Oil executives come and go... I just want to help them pack, this time.
I've bought three properties with frogskins, not even a cashier's check.
So I should be forced to overpay for oil so you can have a job? Sounds like a form of socialism to me.
Maybe you are overpaid? What's your job?
Tell me again about peak oil, the price of extraction is $100 and all the other bullshit. The price will certainly rebound from these lows, but don't expect me to feel bad for an industry that raped people for the last 7 years. The puppetmaster giveth and the puppetmaster taketh away.
What's your industry? I don't have any preconceptions about oil, just that I have a lot of it and I want to sell more if the price is lower so I am looking for lower prices on rigs and field hands.
You said that the oil industry was never bailed out. Is that not a preconception? Your thinking, like your industry, is heavily subsidized.
In what way is it subsidized?
QE and ZIRP, just like everything else. :P
+100. while your statement should put the final nail in this ass hat's coffin, i'm afraid its like talking to somebody that doesn't fully grasp the ability of logical thought. Like the guy that hand signed for Obama at Mandela's funeral- all the signers in the audience.....wait....fuckin what?
Oh well then that includes gold and all zh posters right?
It does. Anyone who has bought anything using credit or because they felt there wasn't a downside given that not spending the money seemed an even worse idea.
Most ZH Posters did not sell their limited stockpile of Gold into a falling market.
They have been busy BUYING while the price has been declining.
But that concept somehow eludes you, and most muppet investors in the USA.
That is why the theives at Goldman Sachs reap a windfall. People panic and sell when they need not.
One buys into declining markets and sells into advancing markets if one wants success..
But you can ascribe to the BUY THE FUCKING DIP YOU FUCKING IDIOT in the Stock Market if you please. That is more your speed..
Haven't you ever watched that video?
https://www.youtube.com/watch?v=0akBdQa55b4
It works until it does not. The reason that it is so damned humorous is that if you had followed that strategy since March, 2009 then you'd have gained.
The woman is absolutely rational. But the market has been absolutely irrational.
So, personally, I refused to participate in that market.
I will not deal with the irrational....AS YOU SEEM TO BE.
I want to sell more if the price is lower...
LMAO. That is a damned good business model. Buy high and sell low.
Now that may be the mindset of the typical American Stock Investor. They always want to buy more at the top and sell more into the declines.
Personally I'd want to sell less when the price is lower and sell more when the price is elevated. But...But that is just me. I happen to do one of those idiotic stupid thing...like PROFITTING from my efforts.
I know...I know I am an idiot.
But I am sure that you will make it up on volume.
I have this friend whom wants to take out an SBA Loan and then go Bankrupt.
Perhaps you'd like to partner with him. He comes up with the same type of brilliant plans as you.
Do not mind his compulsive Gambling Addiction. He is actually quite nice. Just don't loan him any money...especially at the casino.
My business model is I own land with oil under it, I want to sell the oil, how is that buy high and sell low? No matter what I paid for the land, selling the oil produces revenue for me.
You should watch "There Will Be Blood", esp. the scene where the oilman talks about milkshakes.
https://www.youtube.com/watch?v=s_hFTR6qyEo
He will not get it.
who has the long straw now ?
The USA has had the long straw for quite awhile. We still do. Our straws have spanned oceans.
Next the Europeans have shorter straws. But they haven't any reserves.
Japan has some long straws without reserves.
We are still burning the imported ME Venezula Oil and, now, we are not using what little Oil which we have left.
But China is really reaping rewards. And Russia can supply herself with an abundance.
In the long run the ME is going to be one fucked up place to live...without Natural Resources.
I'd sell less if the price were low. I'd sell more when the price is high.
But that is just me. After all I am just foolish. You have an unlimited supply, right?
I will be more than pleased to burn up all of your Oil while the price is cheap.
Then when you run out and the price subseqently rises, you will have none left to sell.
But others will.
Price discovery can be a bitch. Can't wait until it happens to the rest of the economy starting with the government.
especially the government...
That may be true if we didn't all realize how fantastically manipulated oil has been for the past several decades. There hasn't been a real meaning to the "price" of oil since 1975 probably. It's all fake. It's all manipulated and traded without the slightest concern for price discovery (except the financialization type).
what is it that we realize about how fantastically manipulated it's been? Is your salary manipulated?
Holy fuck! WTFU man! It's like you've put a 500 piece puzzle together with - oh about 40 of the pieces missing AT BEST and then stood back and emphatically exclaimmed - THERE .....DONE!!
I actually don't disagree. I am not necessarily sure oil's being manipulated, or that this drop is due to manipulation. As world oil runs out, it wouldn't make sense that oil would always go up in price, or that oil companies would be great investments. If a forest were running out of trees, would you invest in lumberjacks? Obviously not. You'd buy a tree.
This is reality asserting itself. 90% of those shale wells never would have been drilled were it not for conjured up bogus money looking for anywhere to roost. I don't relish your particular troubles, I just want to see cause and effect return to the world.
YOu know this because you have any experience with the oil business or you just read it on the internet? Shale wells are fantastically more productive than "conventional wells" are.
I get the sarc! +100 Saudi oil is produced at 10% the cost of Tar Sands, at 15-20% the cost of Frack Oil.
some is, most is not. There are only 9.5mmbbl/day Saudi production, the world uses 77mmbbl/day I think and much of it is produced at far higher prices.
You are right. The liquidity surplus was massive and at record low rates, making even Junk bond issues at low interest. Lets say interest rates were at market valuations, then Junk bond yields would have been 10%. Could frackers afford to borrow for ponzi drilling at 10%? No, of course not. Saudi produces oil at less than 20% the cost of the best fracking wells.
They only sell about 7-8mmbbl/day and produce about 9.5mmbbl/day and worldwide consumption is around 77mmbbl/day, hell even the US consumes 15mmbbl/day which is nearly triple the Saudi exports. So tell me why the Saudi's mater in the long run?
Because sweet light crude is fungible.
Because your bonanza well will be dry in about 2 years at full speed... Their wells will last way longer.
ponzi drilling - this is exactly what it is and how everyone will call it in two years.
Funny how 'dictators' only applies for guys who rise from the masses, and never seems to apply to establishment type, i.e. to Monarch.
E.g. The Saudis. No Rock & Roll (freedom). Just 'Heads will roll'.
Even many 'enlightened' libertarians on ZH seem to fall for that old 'Dictator' meme. Ah, "It's good to be king", eh?
All monarchies are dictators. You can't possibly think any differently unless you actually believe that god him/herself declared that person the leader of a land with an arbitrarily drawn border. If so, tell the easter bunny and Mr. Claus I said hi!
In a way , you are right when applied to all those countries that have a Western CB Dictatorship installed.
There is nothing really "wrong" with the World Economy ...
... just the Puppet Masters that distort realities for their own advantage and profit.
Get rid of these Extorters , and we could have fair trade again ...
... which the World has always thrived on for thousands of years ...
... until CBs monopolized and manipulated the "currencies" of Trade since 200+ years.
Bill Still and Shirazdeen Adam Shah : Skip the music .. go to 12 Seconds
https://www.youtube.com/watch?feature=player_embedded&v=EmoagHqCxkU
Why does the diagram not reflect anything about the Financial crisis where the Banksters stole the world?
Is that not important? Less important than some WS arbitraging the Ruble for a few days?
There's nothing wrong with the global economy that a full on monetary reset won't fix.
Baloney. Citing cheap oil as your End of Days justification? Sure.
If the fed is shorting paper gold, isn't it also possible they're shorting paper oil now? Did anyone else notice that the oil drop started right around the time QE ended? Is it possible one caused the other?
Terrifying shmerrifying. Whatever. Bring it. We need a 'reset' anyway from all this idiotic ineptitude.
The reset after it's conclusion i fear will be alot worse.
I'm not terrified in the least.
Strangely, neither am I. I guess the point of the article is that I SHOULD be, but I'm still not. There must be something wrong with me.
I cared for years. Now I don't care anymore. My fate is settled.
banker lend to small E&P co's ..while oil is high, then the rug gets pulled, and those co's that live on debt and cash flow go under, and guess who then owns the oil......ok the banks..almost like a plan or sumthin.
so you say the banks are the winners, doubt that. just like when they end up with a home. ever sold a million dollar top drive in a 40/bbl market. what an idiot. another poster that should put his head back up his ass and cuff his hands behind his back so he can't type or jerk off..
Precisely. At some point there must be real consequences for bad behavior.
Our own treasury secretary admits that certain "arsonists brought down the financial sysrtem and profitted from doing so".
How many of these arsonists are now bankrupt and in prison?
This is the only thing that matters, full faith and credit motherfuckers.
or is arson supposed to be a "good" thing now?
THe reset will be in your lifestyle, hope you like it.
Maybe so. That would depend on how you prepare for the 'reset'. I would think having a source of food, shelter and water that can be protected would be a good start. We may have to go into survival mode for a generation or two. I think the 'good old days' are behind us for now. Such is life -- this is how civilzations rise and fall and we have to roll with the punches. Leeches will die or be killed off, survivors will live to populate the next civilization.
Yeah people have been saying that for a long time and it hasn't happened. Kind of like jeebus returning.
I think you have a point with the serious ripple effect of the lower oil prices that most people don't realize, yet. My friend is an engineer for Big Oil in Big H and just got a notice he'll be 'laid off' from his $220k job effective Feb 1st. We talked about his situation and he said he's telling some of his creditors [like his doctor and hospital] tough luck. Of course, his priority is his fat mortgage, kids, and food. He's cutting back on everything out of necessity.
So this is the type of local trickle effect I see. The derivative thingy is another, bigger issue for financial markets.
Ouch, maybe he should offer to work for $120k?
This fucking hump has been making $220k and he is already starting to beat people out of his debts before he even loses his job. What an ill-prepared scumbag!
if you're living a lifestyle where you make $US 220k a year in Houston and the shit you buy isn't fucking paid for on the spot... man oh man, you are doing it wrong... sounds like someone has a wife & kids who want to show off on daddy's money...