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Shale Company Defaults On $175 MM In Bonds Without Making A Single Interest Payment
Update: And just to prove that people are indeed, idiots, moments ago this hits:
- ENERGY XXI GULF COAST, INC. PRICES UPSIZED PRIVATE OFFERING OF $1.45
BILLION OF 11.000% SENIOR SECURED SECOND LIEN NOTES DUE 2020
We set the odds at 75% that not even odd coupon payment will be made in this case either.
* * * * *
It was just this past June when a report on Seeking Alpha quizzically asked, "Can American Eagle Energy Corporation Fly High Like An Eagle Over The Next Months?"
The answer, it turns out, is no.
According to a Bloomberg report, the Colorado oil producer, whose stock is now trading at a very sub-eagle $0.20, or about $6MM in market cap (the stock was at $6.00 when the Seeking Alpha report came out) has announced it will not make even one coupon payment on its bonds issued less than seven months ago.
Bloomberg reports that after raising $175 million in a junk-bond offering, American Eagle Energy Corp. said Monday that it wouldn’t make its first interest payment on the debt. And instead of fulfilling its naive bondholders dreams that they will collect an 11% annual coupon for the next 5 years and then get repaid in full, the company hired bankruptcy advisers, Canaccord Genuity and Seaport, to negotiate a restructuring plan with the bondholders. Said bondholders now have two options: give the company more time to try to become profitable (i.e., hope that oil somehow soars from here) or push it into default, and become the new equity holders following a debt for equity.
None of this should be a surprise to anyone, and certainly not our readers, whom we warned on October 14 that "If The Oil Plunge Continues, "Now May Be A Time To Panic" For US Shale Companies." We should have added bondholders of shale companies to the list of panickees.
“American Eagle Energy’s small scale and relatively high drilling costs made it the one of the first victims of the drop in energy prices,” said Spencer Cutter, a credit analyst at Bloomberg Intelligence. “It was also unfortunate that oil prices dropped so much soon after the bond was issued, causing it to skip its first-ever interest on the debt.”
It won't be the last. Recall that just over a month ago we laid out a matrix created by Goldman showing which shale companies will be the next to pop. AEE wasn't even on the list:
As for AEE, its existing shareholders are now wiped out, while the yield-scrambling debt investors instead of pocketing a solid 11% yield for 5 years are now looking at an 80% loss - the $175MM 11%s of 2019 were trading at 20 cents of par at last check.
And since the company won't have any cash to repay anyone, the bondholders will end up with the equity, the problem is that this is equity in a company which even post restructuring, will be unviable absent oil returning back to the $80+ ballpark (the first-lien debt trades at 40 cents on the dollar).
Marty Beskow, a spokesman at American Eagle Energy, didn’t respond to e-mailed messages and telephone calls seeking comment. Scott Davidson, a spokesman at Canaccord, and Tanya Alvear, a spokeswoman at Seaport Global, declined to comment.
It is somewhat ironic that Canaccord was also one of the bond deal underwriters...
The Littleton, Colorado-based company stopped drilling in
November and suspended its 2015 capital plan because of the drop in oil
prices, according to a statement Monday. West Texas Intermediate crude,
the U.S. benchmark, traded near $51 a barrel on Thursday, down from more
than $107 in June.
What is perhaps most odd is that American Eagle Energy actually had downside oil hedges: the only problem, they were not nearly enough!
The driller’s financial problems became apparent to lenders in December when its ability to borrow on a revolving line of credit, which was initially as much as $60 million, was canceled, according to a company statement on Dec. 31. To raise cash, American Eagle Energy closed out hedge positions that protected it from falling oil prices, raising $13 million that represented 414,000 barrels of oil at an average of $89.59 each, according to a Dec. 31 filing.
The company was insolvent 2 months later.
And since AEE is effectively in default without making a single coupon payment, all those bond traders who were alive in a happier and far less centrally-controlled time and recall the infamous case of Movie Gallery, which was the last such instance to issue debt only to go bankrupt without making even one payment (Goldman was the underwriter) can raise a toast to happier times and recall how that snowy day in early 2007 during the Movie Gallery roadshow which coincided with the peak of the last credit bubble, was the true harbinger (before even the subprime blow up) of the financial system collapse that would ensue just over a year later.
The question now is: is American Eagle Energy this generation's Movie Gallery?
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Hey, I already SAW this movie!
I still have my Blockbuster member card.
Cannacord Genuity, which was hired as restructuring adviser, was also one of the company's original underwriters....
http://finance.yahoo.com/news/american-eagle-energy-announces-completion...
A return of .20 per share is not much equity to brag about, and that's before the law firms cut.
They can redeem their coupon for cash at the Fed.
"The answer, it turns out, is no."
Pulitzer's law: Whenever a headline is a question, the answer is ALWAYS NO.
and its gone.
Didn't MF Global also pull this trick of issueing debt and defaulting before the first interest payment? Why yes they did.
http://www.bloomberg.com/news/articles/2011-11-01/mf-s-corzine-key-man-b...
At least we had the satisfaction of seeing Jon Corzine go to jail. Oh wait....
Here's an Onionesque bit of humor:
Bond underwriter's return all fees earned in the issuance defaulted bonds. Managing underwriter says: "Really, we're just ashamed of ourselves."
"We're not deadbeats!"
~ Barry, Sept. 2013
sg: if they raised $175M and now are broke, where did that money *go*??
pawpaw: well now, sonny boy, you see .. you're thinking about it all wrong
sg: I am?
pawpaw: sure. it's not like that money is sitting in a safe
sg: it's not?
pawpaw: of course not! they put that money to work!
sg: they did?
pawpaw: your darn tootin! why, that money is in mister johnson's house and in missus smith's soda shop ..
sg: wow! that money has really been put to work!
pawpaw: plus, it's helping extract shale oil. and that means more energy for everybody
sg: wow, pawpaw. I didn't know
pawpaw: now run along and put some more of your pennies in that savings account!
sg: yes sir!
More defaults to come I'm sure.
Ahahahahahahahahahahahahahahahahahahaha........
hahahahahahahahahahaha........wooooooo.......
hahahahahahahaha (deep breath) hahahahahahahaha.........
ahhhhhh....hahahahahaha.......
hehehehehehehehehehe
Ya think?
SUCKERS!!!!!!!!
EDIT: And no one could see it coming. Least of all the ANALcysts and Banksters.
Whocoulda noed?
You can't make this stuff up. Amazing taking con-artist to the artistic level.
It's like your dad looking at you with a straight face telling you he blew your college fund on blow and hookers..
Or where the guy rents the car declining insurance in the Jackass movie takes it to the crash up derby and brings it back on a flat deck..
Or your girlfriend telling you she sold your stuff had a gang bang and doesn't know who the father is but is going to take you to court to pay for the child anyways and if you say no she'll blackmail you for rape.
Or the president of the United States going on national TV telling the nation 'fuk-it-all I pushed the button' and standing there with his erkel-ears grinning away while making kaboom sounds while the nukes come sailing in on your city..
It looks like something out of a Mad Comic book.
They might as well send instagrams of themselves snorting coke off some hooker it wouldn't be any more offensive if they did.
Honestly I don't know why the members of Zerohedge themselves do not just start some shell company full of rhetorical Hillary like promises and the sky is blue crap. Get a billion dollars in funding in the IPO - give each other $1 million dollars raises (should cover a 1000 members), then tell the lenders with dead pan faces 'sorry the company is broke talk to the attorneys' - stiff the attorneys leave the country and just run Zerohedge from some sandy beach..
I've watched the Enron Shell Co's for the last 1.5 decades. Think Larry Summmers/DE Shaw/UPC. Colorado is front and center with them and Jim Mogg has the answers.
FREE JON CORZLIME!!!!!!!
11%...99-1...obama doesnt take it up the ass.....all sure things....
Arthur Berman:
If you look at third quarter earnings…. on shore (shale oil) companies—and I follow about 50 of them—what you find is that their third quarter results say that they got negative free cash flow of about $5 billion. You know, the price of oil in third quarter was $93 a barrel, so you can just imagine what fourth quarter is going to look like. It is going to be a total train wreck if they were losing money back then.
http://www.peakprosperity.com/podcast/91722/arthur-berman-why-todays-shale-era-retirement-party-oil-production
At the $50 price, they planned to make it up in volume I guess.
Whatever happened to Movie Gallery? There is no place I can rent VHS movies anymore. Bummer
It is a total bummer. I used to like going to the local Video store and renting, whatever. Sometimes, it was an old flick, I've seen a few times, but still enjoyed here and there. Now, you either have to buy it, find it, so you can download it (if you're lucky), or worse, use the fucking 'Red Box', which I absolutely despise, because, all of a sudden, I'm feeling subservient to the machines. The Robo Red Box only has so many movies and that's it. They make the choices, not you and worse, you have to stand in a line and wait to pick out some crap, that you're reluctant to watch anyways, then pick the movie and wait for the machine to dispense it to you. Returning it, is worse. You used to drop off the movies in the mail slot at the video store, but now, you have to stand in line again, to wait for the machine, to take them back, one at a time and verify that indeed, you, the account holder, did indeed drop off a movie.
And that's only one example of submission. How does everyone like those electro actuated faucets and paper towel dispensers? You wave your hands repeatedly sometimes without success and finally, the faucet or the dispenser will reluctantly turn on for a few precious seconds. And worse, they've gone cheap on the faucets they install and it seems, that many public bathrooms have faucets that are so short, they barely protrude from the back surface of the sink. So that when you wash your hands, you're having to cramp and clench your hands, so that you don't touch the porcelian on the sink!
Drill baby drill! Right into the unlubed rectums of those bond "investors"!
Too bad they don't have a printing press. Ctrl-P Problem solved.
Well they did for 7 months, all good things come to an end just like what goes up, must come down.
NCAA >>> No coupon at all.
"Hey, I already SAW this movie! "
Shhhh! Some of us haven't or weren't paying attention the last time it played or whatever.
Besides. The movie might end differently if we watch it again!
The airlines have been playing it repeatedly for decades.
The shareholders, trade creditors and unsecured creditors get screwed. The senior bond-holders become the new shareholders. The company issues new bonds, dividends out the cash, and runs up trade debts. The new shareholders then sell out to the next set of suckers. Rinse and repeat.
The financial system did not collapse, that was a planned and staged heist.
STEALING...American business at its finest.
-----------------------------
The Economy is doing AWESOME. Everything is just splendid. Why aren't you?
Hugs
CNBC
Everything is AWESOME, when you're part of the tribe. Everything is AWESOME, when you're on the INSIDE!
Damn it. I was going to save this one for a more impactful place.
But...I guess that I can reuse it.
----------------------------------
The Economy is AWESOME, Everything is splendid. Why aren't you?
Is it because you are goyim that is here to service...er...serve us, the Masters?
Yes it is awesome, awesome for us.
Remember. The weath of sinners is just stored up for the use of the redeemed chosen.
Hugs,
Your pals at the ADL
Pocket change.
Wait until the muni defaults start cascading in.
Better save some superlatives, Tylers;)
Not for those particular investors...NOT AT ALL.
------------------------------
The Economy is doing AWESOME. Everything is just splendid. Why aren't you?
Hugs,
Fox Business News
I can see it already - sorry Grandpa we know you busted your ass to keep the roads clean and maintained -but times are changing. We are gonna cut your pension 80% because the muni is broke, and well the roads will not be getting fixed either. But don't worry if you have an issue with it the local police department has a new fancy LRAD's and when they fire it at you - you won't have to worry because you already lost most of your hearing.
SheepDog-One
Congratulations. You nailed it in one sentence.
But, with one important caveat: The heist did not collapsed, yet.
Actually, the real heist is yet to come. We ain't seen nothin’ yet.
It is ALL a wealth transfer you maggots!
Come here Private so I can skull fuck you!
This is such good (Zerohedge) news! Tasty hors d'oeuvres or collapse you all love so well.
Same shit...seems like the same day
he meant to say "Dow 20,000..."
Please go look at the "other" news, nothing to see here.
I'm so glad I didn't invest with one of these jagoff oil play companies that called me weekly, for a 100K min. investment, they claimed, would see me realize a 40% profit the first yr.
No doubt the same oil well companies that Bloomberg News ran, still runs ads for occasionally.
I also like the ads that some clown touts on how to "invest other people's money"....after you put up $40k of your own :)
Still stackin' here.
hairball
Peak junk bonds?
Junk to treasury debt yield spread has been on divergent paths for 8 months or so. The occurrence of defaults should accelerate. Back in 2007 this divergence preceded the begining of the 2007-9 stock market dive by 6 months.
Even longer if you ask me.
As soon as Taper was announced...yes, treasuries got slammed initially...but then as junk debt got annihilated treasuries got annihilated and the dollar has never looked back.
YOU GET NOTHING!
Good riddance!
Bullish for us stocks
Actually this has been bullsih for equities because they can borrow in euro's for next to nothing.
XOM just announced a massive debt offering...and indeed they had to raise the dollar amount because demand was so high.
I'm bearish on the market overall (why raise debt XOM if you're bullish?) but that is not a distressed debt offering.
wonder how many bond funds are holding this pig ...
Not that many at 175 million face value. It would be funny if a couple of Hedgies loaded up, trying to get rich on a high leverage trade.
Sad for them if they did. They needed to have OPTED OUT.
That is the message needed to be heeded...OPT OUT. Divorce yourself from this train wreck if you have not already you short sighted myopic dumbfucks.
__________________
The Economy is AWESOME. Everything is just splendid. Why aren't you?
Hugs,
Janet Yellen
That's a real life.... and its all gone .... POOF !!!
shouldn't the lawyers and bankers on this one...GO STRAIGHT TO JAIL?
No, they go straight to CONgress instead.
Probably free parking at the courthouse though. No doubt lawyers will collect the remaining crumbs as payment for services rendered.
Only a complete fucktard would down vote you for saying that. Just goes to prove there is no stopping stupid.
No, of course not; one of the bankers, Canadcord Genuity, is acting as a receiver of the company.
Nice work if you can get it.
We sandbagged some folks.
and a$$ b&nged a few others along the way.
we love dem folks.
they should have btfd
they shoulda bought property, farming equipment and seed with that $175M ... heck they're out of CO - they coulda been in the green at this point, with pet deer running around and smiles on their faces
Pet deer?? Since when do people make pets out of venison??
Sabine Oil and Gas is next. They bent their bond holders over in the merger with FST. Also in top 5 over leveraged small operators to boot.
Unhappy thought. Those little (very little) royalty checks they send me are quite welcome. Also, they operate a wet gas well on my mother's property. Just refracked that well this fall.
I can feel their pain. More Silver.
But but but... they (the billhill gang) took 4 mm of gold and left 5mm of silver behind!
How many others are waiting in the wings to default. The line could get very long.
LOL, just the starting of the pain.
Gosh, I sure hope so.
Sadly it will be ordinary oilfield workers and associated trades who will see their incomes drop from "much higher than average" down to zero.
I hope they were saving instead of spluging.
Sorry, but somehow I doubt even a good minority of the average Joe's in busting ass in the oil patches were saving. I'm sure it was heard by most that the work would never end.
Springtime for Hitler.
Move along....
...in Germany!
Them truck nuts are gonna get a bit dull.
You can give a fucknut a million dollars and he'll still be broke at the end of the day.
Different breeds of men.
You see,
You have men that can keep wealth, and you have men that don't/can't.
"The devil's in the ways we live."
Damn! First, the Beefstake Mine stock - and now, this...
Russian sanctions are a bitch.
Barry, how does it feel to punish yourself?
Who gives a fuck about the lack of coupons, 80% loss on principal stings!
It was all money created out of thin air, so what the hey.
double post
Better stacking than fracking.
Last go around, the crash resulted in the banks owning the lions share of all the real estate in the country.
This go around, the crash will result in the banks owning the lions share of all the resources in the country.
Both go arounds have pushed an ever greater proportion of the population into essentially permanent debt slavery.
Time to 'circumcise' some zio throats.
Bullish...
dup?
bullish
175 million, psshhh, whatever...
LOL Seeking Alpha - come and get your latest pump and dump.
I wonder if they will trade for my Tulip bulbs...????
But you can bet some little pension advisor got his bonus by showing his 11% return last year...on paper of course...
In the new normal, an 80% "haircut" is high yield.
What 80% off looks like:
http://www.swapmeetdave.com/Humor/Cats/SheSaidTheLineCut.jpg
Gee the issued the bonds at the top of the market and this happens, what a surprise. More people here lost money buying silver at $45 and then $40 and then $30 and then $25 all the while expecting it to go to $50 and higher.
Still have the silver.
wrs1, and your point is what? we hedged our bets and won't be holding the bag when you won't even have a pot to shit on?
Video stores were dying even in 2007. Anybody crazy enough to lend to a chain of video stores in 2007 deserved to lose every cent.
Oil isn't going out of style any time soon, so American Eagle Energy naively borrowed the money assuming that they would continue to get a fair price for their product. They didn't count on the House of Saud's opening the spigot to sabotage the Russian economy to get back at Putin for opposing the Kiev junta---plans the banksters were already making with Riyadh while the American Eagle Energy deal was being made.
So, no, this isn't the next Movie Gallery. Movie Gallery was bankster fraud. American Eagle was collateral damage of the banksters' war with Putin.
"Anybody crazy enough to lend to a chain of video stores in 2007 deserved to lose every cent."
Not in a fed centralized economy. In a Fed Reserve world, you make some mistakes, don't worry about it, the financially retarded win. They will boost an economy so that even a Movie Gallery can win. Meanwhile, the smart guys are scratch their head looking at each other like, WTF is going on here.
Pop quiz - what do Blockbuster Video, AutoNation, Boston Chicken and Waste Management have in common?
Down vote - please explain
didnt down you...let me take a crack at it...same board of directors?
Bingo!
Tell the man what he won Don...
A new Caaaaaar! too bad it's a Yugo, ugh.
Can I play Jeoprody now?
I'll take The rapists for $1000 Alex
Jane, you ignorant slut, that is Therapists!
Oh, okay, is the Therapist hot?
Why did Yugo finally add rear window defrosters?
So your hands could stay warm as you pushed.
LOL, good one!
http://www.corporations.org/wmi/huizenga.html
Same directors same IPO issuer Morgan Stanley and...... wait for it .......same result Bankrupt. Coincidence?
The bankers and the brokers got paid. What's not to like?
What is movie gallery? I'm lost... oh look Dancing with the stars is on. I wonder if a football game is on too. I need entertainment so I don't have to think!!!!!!!!
BTW, the "if you see something buy something" was good, but not as good as the homeless guy holding the sign that says "need money to BTFD" Tyler, come on, bring it back.
Just make sure to protect your credit score…. Carry debt and make payments. LOL
Tyler, you're embarrassing yourself. American Eagle Energy???
Last night it was the economic power house that is...Kazakhstan! The place is turning into a farce of a parody attempting satire.
Wait a minute, BO's dog has mange!
Obviously a false flag ;-)
I have to agree nmewn, been reading here a long time and it has become a joke, along with a lot of the posters who live in mama's basement and don't know squat...they believe they're infallible too! Amazzzzzzing...
Yeah, its a trip through La-La Land some nights...lol...no doubt about it.
But we do have the solace of seeing all the tards who screamed False Flag! at the drop of a hat and taxes are completely voluntary and Snowden is a CIA spook and Obama is "some sort of god" and "You didn't build that!" finally have to find new haunts.
So...there is that ;-)
indeed...
You two should get a room.
awww, you seem....butthurt, poor lassie? wanna make it three? bwahahhahahahahaarg! No soup for you, one year!
Where's the MONEY?
Surely they didn't blow $175M in 7 months.
So what? All investments carry a risk. Its not illegal for a business to fail. Same thing applies to sovereign bonds, the risk of default is real, it is baked into the interest rate, and you are stupid if you invest in a stupid business.
People act as if losing money on bad investments is legally equivalent to being robbed.
"Its not illegal for a business to fail." -- Unless it is a primary dealer bank of course...
Oh, it's legal for a Primary to fail, and prosecutable, it's just that it doesn't matter whether it is or not.
If the Attorneys General decide not to investigate, gather evidence, indict, prosecute or otherwise look under the panties of banks, then, Viola!
When the 'business' is sold to investors is based on BS - you are correct - it's not robbery. The correct legal term is fraud. get a fukin clue
"Welcome to the oil patch, Yankee nitwits."
" Robust! "
From bond holder to bag holder - Wha happen'd?...
Who owns the CDS's and CDO"s ?????
In other words.....who is really screwed?
Awww, maybe they can give those shareholders a courtesy credit towards the auction of the office equipment...
It's only right.
Ha...what office.
That will certainly make the captial losses easier to calculate.
Update on the N.C gold heist...
http://www.breitbart.com/big-government/2015/03/05/gold-mine-hillary-clintons-brother-granted-super-rare-mining-permit-from-haiti-after-state-dept-sent-country-billions/
The tiny North Carolina company, VCS Mining, also included on its board Bill Clinton’s co-chair of the Interim Haiti Recovery Commission (IHRC), former Haitian Prime Minister Jean-Max Bellerive.
==========
I am watching the energy sector too. I wonder who the getaway driver was?
Was just a few million. Bill and his buddies probably split it since they know the whole card game is about to shit the bed.
They salt the hole and rehypothecate it. 4mm in gold taken and 5mm of silver left. I would imagine the son in law has some special shorts going on. I hope they are not Bill's or even worse, Hill's. But it might be a short blue dress.
edit: /S
Let me guess, Hitlery Cankles? I wonder if their McMansion can hold that much gold? oh wait, yes, in their walk in closets...
If they paint their roof white they can.
http://wattsupwiththat.com/2011/07/18/clintons-solution-for-the-jobs-cri...
Or salt the mine with rehypothecated gold dust... Real manure matters.
Sort of like like "blue blanket's that blind the eye of god". Won't elaobrate on that, but for the record, I am skeptical of religion and political 'progress' based on all this horseshit. Nuff said.
Bar Tend, I need another scotch...
i can agree on the progressivism part...you may not want to hear this, but I put my whole faith in Jesus Christ.
I am a fool for Christ, who are you a fool for?
Christ, acccording to to all the material that was written, was quite the pain in the ass, Therefore, he has my vote.
There ya go my man! He was a pain in the devils arse for sure, not to mention the pharisees!
Couple of Cushing tanker farms will catch fire due to 'terrorist' activities and all will be well. Or some old tankers will sink or ( insert scenario here).
Blame the rating agency. It was Moody's that enabled this bullshit. We've seen this stuff before ourselves. We were doing a deal and the S&P reps came out to do a site visit. They were two girls in their late 20's who didn't have the foggiest idea of what they were looking at. It was comical. One of them wore the same skirt 3 days in a row (it had a stain on it so we knew it was the same one) and neither of them ever asked even one question that a real pro would want the answer to. Sure enough it got rated too high and we pulled out. That deal will take a shit in the near future. The bond managers/underwriters are also whores just like the rating agencies. I am ashamed of what my industry has become.
It's a sad fact right there, I hate to read that shit...
The only thing wrong with this is that I can't form a company, go out and borrow a billion dollars, promise an 11% return, and then declare bankruptcy after paying myself a half a billion as CEO and COB.
Life is unfair.
maybe you can't but plenty of others have...
Hey bitchez, am I driving ok?
since you asked...what's the number we call to report you to the NSA? lol /s
Perhaps Barry could socialize these losses with our insolvent treasury. Hillary might even back him up. At this point " what difference does it make".
"could?" bwahahhaaahahahhaaarg
He is transfroming Amerika into a wasteland! Epic wealth redistribution has been in progress for some time, didn;t you notice?
You mean "upward," right? Because if you mean anything else, you're wrong.
'forward soviet' style baby...that MF'er is an idiot! oh, you mean the .01%, yeah that too! Oligarchies tend to be that way! He also spreads it downward to the FSA, let's not forget that part.
"My name is Junk, Junk Bond."
Dr. No, would be proud of you!
Goldfinger could save the day?
I'm odd, but on the job!
The corporate fleecing machine strikes again. Money always moves from dumb hands to smart (and dishonest) ones, as water always flows downhill. In fact the mission of the entire financial press is to obfuscate that immutable fact.
The upcoming epic fleecing will very likely be the most spectacular in human history.
Not quite.....
That 175M went to Money heaven, its gone.
They blew it on slaries, drill rigs, road building,...operations.
People got paid, stuff got done and the operations that were supposed to produce the revenue to pay the bonds back.....
died.
The money is gone, poof!
One wonders what will happen in hundreds of billions in private capital start going poof!
Squid
Gosh I hate to interrupt some of these mind numbing tirades, but like the little brown bear who saw his brother eaten alive by another brown bear, I am alive to correct some economic illiteracy on this board. And this thread is the epitome of revenge thoughts and feelings with no clue as to what is really happening.
MONEY IS NEVER GONE!!! POOF!!! NEVER!!!!
U say it yourownself, to wit, ......."slaries, drill rigs, road building,...operations."
That means it is still in circulation not in some Oil Patch prostitutes mattress. (OPPM). It was or is used to buy food, buying a new Ram 2500 Diesel, which truck dealer gave some of it to his salesman who bought some Angry Apple Hard Cider for the whole bar in Abilene.
Don't mistake a market condition---- contrived or happenstance-----for disappearance of FRNs.
They are alive and well and thriving. They just split for where it is needed most.