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Four US Firms With $4.8 Billion In Debt Warned This Week They May Default Any Minute

Tyler Durden's picture




 

The last 3 days have seen the biggest surge in US energy credit risk since December 2014, blasting back above 1000bps. This should not be a total surprise since underlying oil prices continue to languish in "not cash-flow positive" territory for many shale producers, but, as Bloomberg reports, the industry is bracing for a wave of failures as investors that were stung by bets on an improving market earlier this year try to stay away from the sector. "It’s been eerily silent," in energy credit markets, warns one bond manager, "no one is putting up new capital here."

 

The market is starting to reprice dramatically for a surge in defaults...

 

Eleven months of depressed oil prices are threatening to topple more companies in the energy industry. As Bloomberg details,

Four firms owing a combined $4.8 billion warned this week that they may be at the brink, with Penn Virginia Corp., Paragon Offshore Plc, Magnum Hunter Resources Corp. and Emerald Oil Inc. saying their auditors have expressed doubts that they can continue as going concerns. Falling oil prices are squeezing access to credit, they said. And everyone from Morgan Stanley to Goldman Sachs Group Inc. is predicting that energy prices won’t rebound anytime soon.

 

The industry is bracing for a wave of failures as investors that were stung by bets on an improving market earlier this year try to stay away from the sector. Barclays Plc analysts say that will cause the default rate among speculative-grade companies to double in the next year. Marathon Asset Management is predicting default rates among high-yield energy companies will balloon to as high as 25 percent cumulatively in the next two to three years if oil remains below $60 a barrel.

 

 

“No one is putting up new capital here,” said Bruce Richards, co-founder of Marathon, which manages $12.5 billion of assets. “It’s been eerily silent in the whole high-yield energy sector, including oil, gas, services and coal.”

 

That’s partly because investors who plowed about $14 billion into high-yield energy bonds sold in the past six months are sitting on about $2 billion of losses, according to data compiled by Bloomberg.

 

And the energy sector accounts for more than a quarter of high-yield bonds that are trading at distressed levels, according to data compiled by Bloomberg.

Barclays said in a Nov. 6 research note that the market is anticipating “a near-term wave of defaults” among energy companies. Those can’t be avoided unless commodity prices make “a very large” and “unexpected” resurgence.

“Everybody’s liquidity is worse than it was at this time last year,” said Jason Mudrick, founder of Mudrick Capital Management. “It’s a much more dire situation than it was 12 months ago.”

Charts: Bloomberg

 

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Wed, 11/11/2015 - 15:39 | 6778378 El Vaquero
El Vaquero's picture

BOND CRISIS!  BOND CRISIS!  BOND CRISIS! 

RAH RAH RAH!

LETS GO BOND CRISIS!

Wed, 11/11/2015 - 15:59 | 6778484 NoDebt
NoDebt's picture

Maybe we're all over-thinking this.  Maybe this IS the place the next debt crisis starts.  

It's an obvious bubble, it's DEEPLY tied in to the banks, has been rehypothecated, repackaged and resold to "investors" and now it's backing up on them mere months or WEEKS after it was sold.  By itself, not big enough to bring the system down, but as a TRIGGERING EVENT, possibly enough to start the big boys thinking about "counterparty risk" once again.

This is sounding awfully familiar.  (Subprime mortgages)

Maybe we should stop looking at the size of this problem in and of itself and start thinking more about how it's interconnected to the rest of the debt ponzi.  Maybe we've gotten so jaded we're staring the obvious right in the face and denying it's existence.

Wed, 11/11/2015 - 16:02 | 6778513 El Vaquero
El Vaquero's picture

It has been my belief for many months now that there is a decent chance that the next crisis would start in the junk bond markets due to oil prices dropping.  I have been saying 12-18 months after the price initially dropped.  Maybe out to 24 months.  That is assuming, of course, that the price of oil does not go back up.

 

Leverage works both ways, BITCHEZ!

Wed, 11/11/2015 - 16:37 | 6778694 Tom Servo
Tom Servo's picture

Easy solution, issue bonds and have the ECB buy them at par...

 

Wed, 11/11/2015 - 17:04 | 6778818 Boris Alatovkrap
Boris Alatovkrap's picture

This is canary in coal mine. What economy is so weak unstable that decrease in energy price is causing of collapse!? Economy is built on available resource of energy, labor, and material. Thank you Mr. Bankster and Mrs. Politician for decouple economic reaility.

Wed, 11/11/2015 - 17:14 | 6778876 Surviver22
Surviver22's picture

Obama will not finish his second term! Current Events Linked to Ancient Biblical Prophecy!

http://motivationdose.com/is-america-babylon/

Wed, 11/11/2015 - 18:18 | 6779145 Oldballplayer
Oldballplayer's picture

Why do you come here just to tease us?

Wed, 11/11/2015 - 19:17 | 6779343 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

This is going to trigger a bond crisis which moves to a stock crash. There will be a panic while the big boys short it all and make a killing. When it bottoms out they will pick up assets on the cheap. Same as in 2008-2009. Wash, rinse and repeat. Disgusting!!

Wed, 11/11/2015 - 19:23 | 6779364 Save_America1st
Save_America1st's picture

I'm sure the shadow QE program can easily bail out all too big to fails.  Janet Fellen will become the buy of last resort for everything there is, even muni-bonds just like was said earlier today about the Euro CB buying Euro muni-bonds.

There will be no real fail as long as these CB scumbags have the CTRL-P buttons at their beck and call. 

Fed rate hike in December???!!!???

It is to laugh.  Anyone who actually believes that would happen is just Charlie Brown thinking this time he's actually going to kick the football. 

Wed, 11/11/2015 - 19:39 | 6779421 Clockwork Orange
Clockwork Orange's picture

LOL.

This has been EXACTLY the plan all along.  The same two vampires named, MS & GS, have underwritten vast amounts of junk debt at 5% yields to Granny and Gramps who in turn were forced to reach for that yield by Ben & Janet.

Now, under the premise of 'deflation', MS & GS are, with JPM of course, beating the living snot out of every REAL asset.  Once successful, they will acquire all said real assets for pennies on the dollar ... along with XOM and the rest of their crony TPP-sucking pals.

And, if it all fails?  Off to the bug-out villas in New Zealand, complete with panic rooms and vaults of heavy.

Soon there will be nary a peasant left.

Suckers!

Wed, 11/11/2015 - 20:08 | 6779532 new game
new game's picture

link cause/effect = qe/centrals banks. moar fucking bubblenomics cause common people pain. fucking sickening and disgusting shit...

Wed, 11/11/2015 - 22:53 | 6780278 Son of Loki
Son of Loki's picture

Very Robust!

 

" Yes we can! "

Wed, 11/11/2015 - 23:22 | 6780403 xavi1951
xavi1951's picture

You say it over and over, for ever and ever, it may actually happen.  So many triggers and NO bullets!

Thu, 11/12/2015 - 05:41 | 6781076 rocker
rocker's picture

Think of all the Suckers who bought "Peak Oil Theory".   LOL

At least I tried to warn most of them.

Thu, 11/12/2015 - 08:24 | 6781226 OceanX
OceanX's picture

"Peak Oil Theory"

Could you please explain why it is necessary to keep drilling new wells,  if the old ones don't stop producing.

 

The Hubbert curve is an approximation of the production rate of a resource over time. It is a symmetric logistic distribution curve, often confused with the "normal" gaussian function.

https://en.wikipedia.org/wiki/Hubbert_curve


Wed, 11/11/2015 - 21:08 | 6779748 DisasterCapitalist
DisasterCapitalist's picture

The US can EASILY handle a rate hike in December..as long as it's around .125%. Any more than that would be politically unpleasant, as the minions are supposed to vote for Hillary next year. Everything is awesome!

 

Thu, 11/12/2015 - 00:59 | 6780729 Calling Elvis
Calling Elvis's picture

Save America First - I think your CharlienBrown ananlogy is spot on.

Wed, 11/11/2015 - 20:02 | 6779513 BlindMonkey
BlindMonkey's picture

"Obama will not finish his second term! Current Events Linked to Ancient Biblical Prophecy!"

 

 

If this is biblical prophecy, are the jews excused from participation?   I hope they get to play collapse too but thought I would check with you before getting my hopes up.

Thu, 11/12/2015 - 00:37 | 6780661 techpriest
techpriest's picture

If America is mentioned in Bible prophecy at all, it's in one fairly obscure reference to some distant nations that are pretty powerless during a war that's going on just north of Israel. America is not Babylon from the perspective of those prophecies, but making a buck by stretching religious teachings has been around for a few thousand years and isn't leaving anytime soon.

Now if you do want to get a good idea from the old prophecies, it's to beware the man offering world peace if you just follow his government, religion, and cashless economy based around a mark of loyalty. Helping the rebels who refuse is a good idea too.

Wed, 11/11/2015 - 17:28 | 6778942 agent default
agent default's picture

It's not just the oil.  The oil is convenient to point at because the US can pretend that they got SA to cause the drop in order to stick it to Russia.  Makes the US look really smug.  Meanwhile the truth is, copper  down, zinc down, iron ore down, you name it down.  Baltic Dry almost crashing, soft commodities gone to hell.  I guess SA can also influence these markets as well.  

Wed, 11/11/2015 - 18:57 | 6779247 fockewulf190
fockewulf190's picture

This is just another Black Swan in the ever increasing flock. 

Glencore is still clipping wires trying to disarm the debt bomb of it´s own making.  Greece will be back in the news again soon because it can´t pay it´s upcoming debt obligations.  The ME is still an inferno.  Europe is flying apart.  One nation after the next has exploding debt levels and unfunded liabilities.  Fukushima is still blasting radiation into the Pacific Ocean.  Each of these Black Swans (and there are many more) are capable of starting the Great Reset either outright, or can start the domino chain leading to the same event.

The world financial system is a total disaster.  These four businesses in the article are consequently just the early casualties.  They will be joined by many more.

Wed, 11/11/2015 - 19:32 | 6779401 1033eruth
1033eruth's picture

fockewulf190 - We should start a ZH deadpool.  I really like Venezuela as a winner.  Only China can bail them out.

Wed, 11/11/2015 - 20:48 | 6779667 backwaterdogs
backwaterdogs's picture

Wow!  Those English classes are really helping Boris.  Good work keep it up

Wed, 11/11/2015 - 23:48 | 6780493 zeroaccountability
zeroaccountability's picture

I'm sure it has something to do with the translator. /s!

Wed, 11/11/2015 - 22:17 | 6780110 stocktivity
stocktivity's picture

It's all Bullshit!!!

Wed, 11/11/2015 - 18:23 | 6779158 Antifaschistische
Antifaschistische's picture

Reporting from  Houston.

They have doubled the Hotel capacity in Houston in the last 6 years, and STILL rates are THREE TIMES what they were 8 years ago.   I bring a lot of consultants into Houston and my travel costs have gone full retard...I don't get it.   The industry is "bracing" for the coming storm....well no one told Houston.   Sure, there has been layoffs but the malls continue to be packed, and traffic is far worse than it has ever been....EVER.

Wed, 11/11/2015 - 19:00 | 6779280 jcdenton
jcdenton's picture

LIVING in Houston ..

6th generation Texan ..

Resident of both Houston and Austin since 1980 ..

It is not  just Houston. It is the entire state of Texas. There are jobs here. There is hiring. However, there is not enough jobs to go around ..

Everyone is coming to TEXAS for SAFE HARBOR ..

ExxonMobile in The Woodlands is on hiring freeze, since they got kicked out the Kara Sea and have lost billions. Royal Dutch Shell the same since closing shop on the north slope of Alaska. Only what left is viable is in West Texas (fracking, etc.) I was laid off from my part time IT job at a very cash rich private high school in Tomball, last March, just down the street, Baker Hughes laid off half of its workforce ..

What you see in Houston, and most of Texas is still a grand facade ..

Wed, 11/11/2015 - 21:46 | 6779951 Cruel Aid
Cruel Aid's picture

good post, yea the '85 crisis is setting up again. opec got it together and caused major pain, this cause is different but will be painful. Texas was hit hard then and we have the carpetbaggers to deal with now.

Wed, 11/11/2015 - 22:38 | 6780208 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

We need to kick the carpet baggers out. The good news is they will leave once the jobs stop because there is no welfare here. 

Wed, 11/11/2015 - 23:29 | 6780430 booboo
booboo's picture

Carpet baggers are there to pick through the bones and they will come later, I think you mean yankee's,

Thu, 11/12/2015 - 02:39 | 6780888 Cruel Aid
Cruel Aid's picture

Ok then locusts leaving the decimated wasteland. Bringing their green bullshit to the land of endless windmills and recycling. Back the f__k off, we got this, fix your own mess. Activist parasites pouring in. Assimilate.
We dont like all the barbecue smoke(whiney ass voice). Yea i'm hearing that shit...

Thu, 11/12/2015 - 08:36 | 6781245 OceanX
OceanX's picture

"... Houston, and most of Texas is still a grand facade .."

Lived in Houston '91 to '96 and Austin '96 to '13  Only thing bigger in Texas is the BullShit!

I graduated from UT in 2000 and still have UT calling me and asking me to donate money to the school,

 

Full disclosure, I still have a love/hate relationship with Houston ...I'm intrigued by the mystique of the city and simutaneouly repulsed by the pollution.  It's a toxic wasted dump ...some of the most beautiful women ever,

Thu, 11/12/2015 - 08:45 | 6781256 lakecity55
lakecity55's picture

You seem to be ahead of the curve on your thinking. I also wondered HOW MUCH $$ was tied up in these bonds? Enough to strain liquidity even more? At least I am not the only person who wondered about this. I just had a guy razz me a week or so back-- he remembered I was questioning what would happen when all these bonds came due.

I thought it would happen sooner, but I was wrong.

Wed, 11/11/2015 - 17:12 | 6778859 ThroxxOfVron
ThroxxOfVron's picture

China is papering over thier commodities crash and exporting ourrageous overcapacity into the rest of the world.

The United States isn't.  -Well, at least not yet..

This is economic warfare and although the big visible battle is in oil there is mad violence in a slew of commodities and products sectors includeing steel, aluminum, plastics. 

It's called dumping and it is one of the ways that the boogeyman of deflation is doistered upon us.

Prices for commodities and goods produced in the US that are sold in the US merely circulate the currency reslulting in healthy monetary velocity.  Dumping foreign goods into the domestic markets caused prices to drop drastically and damages domestic production, domestic debt dynamics, leaches currency out of the domestic markets resulting in a collapse in monetary velocity, and ultimately causes unemployment and economic malaise.

China is a command and control economy.  It's imports are being subsidized and in some cases fully funded by phony debt aka money printing by the Chi-Coms.   Nothing remotely resembling captialistism can compete with the economic warfare of unrestricted counterfeited production and export merchantilism.

The question to ask is: WHY is the Obama Administration allowing the Chinese Government to print money specifically to fund production of materials for dumping into US markets when the obvious outcome of allowing this is the destructon of the domestic commodities and manufacturing base and the domestic economy that this commodities and manufacturing base supports?

Wed, 11/11/2015 - 17:20 | 6778906 Nage42
Nage42's picture

 

"The question to ask is: WHY is the Obama Administration allowing the Chinese Government to print money specifically to fund production of materials for dumping into US markets when the obvious outcome of allowing this is the destructon of the domestic commodities and manufacturing base and the domestic economy that this commodities and manufacturing base supports?"

 

Is that really a serious question?

 

Let's see... if someone else is debasing their currency faster then you are, then your shirt looks less stinky, thus strong dollar.  No domestic manufacturing base left to destroy, as the US is way down the road of being a producer to become a consumer of iCrap, and the cheaper the iCrap the happier the iSlaves are, and as long as China prints faster, US can print just a cunt-hair less fast and maintain the illusion that USTs (US Toilet notes?) have some value in relative respect to RimB (sounds like a variant of a dirty sanchez!), and the freeshit army can keep getting new iCrap and thus continue to vote for MOAR.

 

simple, right?

Wed, 11/11/2015 - 18:44 | 6779224 Antifaschistische
Antifaschistische's picture

So, can we conclude that the US effort to maintain the PETRO dollar, which provides GREAT strength to the dollar and world status...at the cost of the US manufacturing base since we are priced out of the international labor market from a competitive perspective?  (This is a real question fo mine...)

Wed, 11/11/2015 - 18:27 | 6779174 Antifaschistische
Antifaschistische's picture

Has China really stolen our manufacturing base?   I'm not an expert on these issues....I'm not even highly informed...but there's not much I buy that is "manufactured" and made in China.   Sure, 2/3rd of everything sold at every mall in America is from China....and 90% of everything from Wal-Mart (minus TVs and food) but....America's problem in manufacturing started 40 years ago when the Chinese were still full blown third world.

Wed, 11/11/2015 - 19:07 | 6779300 jcdenton
jcdenton's picture

You want to see a reversal in manufacturing? Start milling rail for 50,000+ miles. Then overhaul the electrical grid ..

Trickle down effect?

http://www.veteranstoday.com/2014/01/05/the-wanta-reconstructing-america...

Yes, it can be done. Starting this January ..

https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)

Wed, 11/11/2015 - 23:24 | 6780412 pitz
pitz's picture

Railway stocks would have to significantly exceed the replacement value of their assets in order for the market to commit serious new investment to the sector.  As it stands, its not hard to pick up railway stocks at 1/2 to 1/3rd of their long-term replacement cost. 

Thu, 11/12/2015 - 01:54 | 6780812 not dead yet
not dead yet's picture

Even with all the stuff the 1%ers sent overseas, so as to line their pockets with big salaries and bonuses while doing less work for it, the US was the #1 manufacturer in the world until China passed us in 2010. We make plenty of planes, trains, automobiles, machinery, construction materials, steel, auto parts, and so much more but most of the small stuff and electronics is gone. Can always tell someone who does not shop at Walmart by their comments about Walmart sells only stuff made in China or your 90% comment. It is far less than that. A great many of those overseas industries flourished because US manufacturers, such as cars and electronics, were making junk so consumers gravitated to foreign products. Plenty of people have commented in many places that they haven't owned an American car for over 40 years and will not consider buying one because they got burned so bad and still hold a grudge.

Thu, 11/12/2015 - 08:49 | 6781266 lakecity55
lakecity55's picture

I still like my Ford trucks. Fix or Repair Daily: but at least I can work on them. Thank God I learned mechanics at a young age via Triumph and BSA ownership.

Wed, 11/11/2015 - 17:22 | 6778919 oklaboy
oklaboy's picture

yoooo Debt, save me some..""""""""llllllllllllll

Wed, 11/11/2015 - 17:39 | 6778991 Panafrican Funk...
Panafrican Funktron Robot's picture

Don't forget, low oil prices affect sovereign wealth funds too, they're already in process of drawdowns to support budget holes / social services.  I think this will actually be one of the prime mechanisms for contagion into unrelated sectors.  

Wed, 11/11/2015 - 18:31 | 6779188 Mojeaux18
Mojeaux18's picture

Except that there is a lot of money in energy and always a demand.  Already some big players are moving to aquire some of these smaller and in trouble players.  There will be loses (how can there not be), but it isn't a subprime.  Subprime included people who could never qualify for loans and never paid.  In MLP's and the like I don't think there is any of that.  

Wed, 11/11/2015 - 20:21 | 6779573 azusgm
azusgm's picture

IIRC, Karl Denninger went over a little trick that seemed to be endemic among the MLPs. Borrow money and pay dividends.

For instance, look at the debt picture here:

http://finance.yahoo.com/q/ks?s=KMI+Key+Statistics

KMI is a C corp now but was an MLP until recently.

Might want to check into what the traffic is through the pipelines. Demand down soon equals transmission down.

Thu, 11/12/2015 - 02:00 | 6780821 not dead yet
not dead yet's picture

Plenty of the stock buybacks and aquisitions by all kinds of corporations was done with borrowed money even if they had plenty of cash to do it. One consequence of rates being so low. Buy back stock to line the pockets of big investors and managment instead of investing in their business.

Wed, 11/11/2015 - 22:57 | 6780293 Iam_Silverman
Iam_Silverman's picture

"This is sounding awfully familiar.  (Subprime mortgages)"

I'm sure that just as Hank Paulson had declared that the subprime housing issue "was contained", so will his predecessor on this matter.

Thu, 11/12/2015 - 10:37 | 6781664 Apocalicious
Apocalicious's picture

Bank lending in this space is about to crater. The energy guys I'm talking to aren't even discussing the redetermination rates, because their banks are going to shut down reserve based lending entirely in Q4 to these firms, switching to pure cash flow underwriting. And I'm not talking about dinky banks either, I'm talking about the biggest corporate lenders in the country will be turning off the spigot.

 

 

Wed, 11/11/2015 - 21:41 | 6779925 sun tzu
sun tzu's picture

It's time to package up some EBS for the Fed to buy. 

 

Energy Backed Securities

 

Bankers can lend billions to these companies like the NINJA loans for the housing bubble. These will be NISBSCFS bonds. No income statement, balance sheet, cash flow statement loans. These will be at 2% interest. The banks can turn around and sell them to the Fed. The losses disappear in the Fed balance sheet just like Maiden Lane I & II. 

Wed, 11/11/2015 - 23:25 | 6780419 tempo
tempo's picture

add subprime car and student loans and you have a real issue.

Wed, 11/11/2015 - 15:40 | 6778384 TheBeatles
Wed, 11/11/2015 - 15:41 | 6778398 aliki
aliki's picture

fed raising rates, dollar moving higher, oil exporting countries pumping like crazy, oil on the cusp of breaking-down thru 40.00 should definitely help this

Wed, 11/11/2015 - 15:41 | 6778399 KnuckleDragger-X
KnuckleDragger-X's picture

Gee, nobody wants to put their dick in that particular blender, I wonder why???

Wed, 11/11/2015 - 15:44 | 6778411 El Vaquero
El Vaquero's picture

Because junk that looks like a partially chewed 3 Musketeers Bar is not considered attractive. 

Wed, 11/11/2015 - 17:10 | 6778855 AustrianJim
AustrianJim's picture

I upvoted you for the colorful metaphor.

Wed, 11/11/2015 - 15:43 | 6778408 aliki
aliki's picture

i can just see janets next excuse not to raise "we need to take rates negative in-order to preserve high oil prices"

i swear democrats have a serious screw loose: they complain about the high price of stuff yet they vote-in those who want to keep the price of stuff elevated

Wed, 11/11/2015 - 15:49 | 6778439 El Vaquero
El Vaquero's picture

Both Ds and Rs do what the highest bidder wants them to do.  The only difference is what they bitch about when pandering to their voter bases. 

 

Remember, they're competing crime families.  They both pull roughly the same shit, screech at each other for it, but if you don't pay your protection fee, they'll send the thugs in to collect. 

Wed, 11/11/2015 - 15:58 | 6778488 aliki
aliki's picture

dude, i give u a ^^^ for "competing crime families"

lol - good 1 mon'

givin me flashbacks to my roots in da bronx :)

Wed, 11/11/2015 - 16:08 | 6778549 El Vaquero
El Vaquero's picture

I still remember Romney's son getting on the radio back in 2008 railing on about how Republican voters needed to have loyalty to the party.  Not the USA, not the American people, but the fucking party.  I was thouroughly disgusted. 

Wed, 11/11/2015 - 17:09 | 6778844 Deathrips
Deathrips's picture

The "highest bidder" isnt the peolpe their supposed boss, its the printing press...any questions?

 

Thats called treason ...right?

 

RIPS

Wed, 11/11/2015 - 17:30 | 6778953 ThroxxOfVron
ThroxxOfVron's picture

It's the lowest form of treason.

They haven't changed allegiance to another country or over to some compelling religious or ideological construct.

..It's just that their prices have been met.  

They have been bought into betraying their country, their people, their oaths, etc..

Wed, 11/11/2015 - 19:09 | 6779308 jcdenton
jcdenton's picture

And what you probably don't know about Romney and Dr. Paul ..

https://app.box.com/s/769a4o7oixga7au2iz0a7nnxouicngrq

Wed, 11/11/2015 - 17:31 | 6778922 ThroxxOfVron
ThroxxOfVron's picture

The only reason that prices are perceived as high is because of unsound monetary, trade, and taxation policies.

IF your wages/compensation kept pace with perceived price inflation you wouldn't care much.

High prices are not a problem if wages are high and taxes are low.

There was a time when the US Gov't funded itself via tariffs.  Ridiculously cheap oil or steel could be shipped to the US and .GOV would slap a tax on it to keep US industries from being hollowed out by foreign govenments employing their printing presses to increase production capacity for the explicit purpose of keeping their peasants at work generating exports goods..

These prices aren't natural, they are contrived.  

The Chi-Coms are rolling huge volumes of bad debt to keep their export machine churning at higher and higher output capacities.  

Saudi Arabia is borrowing money even as it drops the price of oil.

These are both examples of nations printing or borrowing in order to subsidize their output with the explicit purpose of depressing prices in foreign markets in attempts to out print/borrow their competitors since they simply cannot compete on level terms of actual production costs, delivery costs, and/or quality...

IF Saudi or China could win on the simple basis of the quality and deliverability of their products there would be no printing and borrowing to fund a capacity/pricing war and no capacity/pricing war..

 

Wed, 11/11/2015 - 17:55 | 6779062 FreeMoney
FreeMoney's picture

It really is the same thing the Rockafellers did with Standard Oil that was countered with the Marshall and Clayton acts.

Foreign governments are lowering the cost of their exports to put local business out of business.

There is no question in my mind that our long term employment and lifestyle would be better if we dropped the income tax and returned to an import tax.

Wed, 11/11/2015 - 15:44 | 6778413 Sudden Debt
Sudden Debt's picture

The funny part will be that all those companies had time to buy protection against a crumbling oil price and actually did it so if it keeps crashing, quite a few derivatives will be triggered :)

Wed, 11/11/2015 - 15:45 | 6778416 Dr. Engali
Dr. Engali's picture

Default? WTF is a default? $4.8 bil? Pfftt, Janet can print that with her eyes closed.

Wed, 11/11/2015 - 18:03 | 6779085 arby63
arby63's picture

She did that on the shitter this morning looking for her toupee.

Wed, 11/11/2015 - 15:45 | 6778421 DetectiveStern
DetectiveStern's picture

Who issuing the CDS? Squeaky bums somewhere.

Wed, 11/11/2015 - 17:41 | 6778999 Tom Servo
Tom Servo's picture

The CDS will never be triggered... *jedi hand wave*

You can go about your business.... move along... 

Wed, 11/11/2015 - 19:10 | 6779319 markar
markar's picture

True, but hedges expire and someone is on the losing side of those.

Wed, 11/11/2015 - 15:46 | 6778424 arbwhore
arbwhore's picture

Seemed like there was plenty of easy credit in June of last year. How did that work out? I wonder how a wave of defaults will affect the supply?

Wed, 11/11/2015 - 15:52 | 6778452 El Vaquero
El Vaquero's picture

Somebody will swoop in and snap up all of those already drilled wells for pennies on the dollar.  If there is a dollar left, that is. 

Wed, 11/11/2015 - 17:17 | 6778889 Prophet of Rage
Prophet of Rage's picture

Precisely. Since last year when the price dropped dramatically, I knew it was the big boys getting together and putting the squeeze on the small companies/startups. The big companies can afford to take a hit on price for a few months or a year or more, while the smaller companies cannot. In the meantime all the suckers get swept away letting the big companies buy thier equipment, wells and leases on the cheap.

Monopoly 101.

Wed, 11/11/2015 - 23:35 | 6780455 azusgm
azusgm's picture

Happens everytime oil crashes.

Wed, 11/11/2015 - 23:47 | 6780486 azusgm
azusgm's picture

The royalty buyers are circling. Got another unsolicited offer in the mail last week. They upped their ante from their previous unsolicited offer. Guess they hadn't heard that the new horizontal well in that unit has been cancelled.

Wed, 11/11/2015 - 17:27 | 6778936 HowdyDoody
HowdyDoody's picture

By an amazing coincidence, Netanyahu is demanding an increase in the tithe the US pays - from $3.1 billion to $5 billion per year. A couple of billion extra a year will buy an awful lot of stuff at pennies to the dollar.

 

Wed, 11/11/2015 - 17:45 | 6779022 Paveway IV
Paveway IV's picture

Since they have a clandestine nuclear program, the U.S. is not allowed to give them a dime in aid - congress passed a law that said so.

Except the laws don't apply to congresses' Israeli pimps, so $5 billion? No problem...

Wed, 11/11/2015 - 17:53 | 6779054 Hohum
Hohum's picture

The Israeli nuclear program is clandestine?  I thought it was obvious.

Thu, 11/12/2015 - 09:53 | 6781499 dreadnaught
dreadnaught's picture

but ...but...but-they NEED them to protect themselves FROM THE WORLD! I so wish that place was now a glass parking lot

Wed, 11/11/2015 - 18:38 | 6779206 USSLiberty
USSLiberty's picture

https://www.youtube.com/watch?v=NsjbV23cto8

Watch "our" leaders stonewall or stumble around the "Israel nuke program" question.

 

Wed, 11/11/2015 - 18:57 | 6779264 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Allah's prostitutes are getting greenbacks to fund jihad for the Sunnis at the same pace as those little lying suckers. Only time either of the scumbag groups do not mind being in the same city , D.C..

Thu, 11/12/2015 - 09:36 | 6781425 1033eruth
1033eruth's picture

foreign military aid, Israel is #1 recipient, Egypt #2.  That hasn't changed.  

Thu, 11/12/2015 - 09:52 | 6781495 dreadnaught
dreadnaught's picture

More guns and bombs to kill Palestinians and steal their homes/farms-and murder a few more Rachel Corries should they show up

Thu, 11/12/2015 - 00:05 | 6780557 silverer
silverer's picture

That's how you really need to own those properties:  with no debt.  Then you can shut them down without getting hauled to the cleaners. 

Wed, 11/11/2015 - 15:56 | 6778475 I am a Man I am...
I am a Man I am Forty's picture

this is incredibly bullish for oil long term

Thu, 11/12/2015 - 00:05 | 6780558 silverer
silverer's picture

Sort of.

Wed, 11/11/2015 - 16:21 | 6778608 Testiclese
Testiclese's picture

Time for the NY FED to buy oil futures

Wed, 11/11/2015 - 16:23 | 6778622 Grandad Grumps
Grandad Grumps's picture

Why can't they get more free money, just like the internet social spy companies?

Wed, 11/11/2015 - 17:36 | 6778927 bigkahuna
bigkahuna's picture

The wrong team is in orifice.

Ds no like big oil.

Thu, 11/12/2015 - 00:03 | 6780543 Iam_Silverman
Iam_Silverman's picture

"Ds no like big oil."

Except when they are major contributors to a "charity" you run - example:The Clinton Foundation.

As long as you keep paying your tribute, you can even be a "climate change denier".  Once you stop though, the New York State Attorney Generals office will investigate your company.  To wit: Exxon Mobile.

Wed, 11/11/2015 - 16:26 | 6778636 Omega_Man
Omega_Man's picture

Just issue new bonds and stocks... and have the BoJ and the FED buy them... after all zios want to own everything at the end.

Wed, 11/11/2015 - 16:31 | 6778665 matinee55
matinee55's picture

this is massive bullish!

Wed, 11/11/2015 - 16:45 | 6778740 WillyGroper
WillyGroper's picture

Very telling Rottenfellar dumped XOM.

As TPTB have systematically de-industrialized the USSA, destroyed coal etc., my spidey senses tell me once the implosion in oil is complete...it ain't comin back.

If it does, it will be sky high made scarce on porpoise. 

Then comes the Agenda21 shove to Blade Runner cities complete with those Bi-cycle roundabouts. 

What a grand time we're in for!

Wed, 11/11/2015 - 17:25 | 6778930 Mark Mywords
Mark Mywords's picture

Grand indeed! Glad we both own bicycles. And are fit enough to ride them.

Wed, 11/11/2015 - 16:57 | 6778792 Hohum
Hohum's picture

Are you saying that we need more debt to keep oil and gas production increasing?  Will pegging the dollar to gold help?

Thu, 11/12/2015 - 00:04 | 6780548 Iam_Silverman
Iam_Silverman's picture

"Will pegging the dollar to gold help?"

Not as much as pegging it to a barrel of oil would.

Wed, 11/11/2015 - 17:06 | 6778827 WTFUD
WTFUD's picture

Breaks my Heart, NOT!

Wed, 11/11/2015 - 17:10 | 6778853 Atomizer
Atomizer's picture

How is your indoctrination to endorse low IQ students within the Ivory Tower schools? 

Modern Educayshun

https://m.youtube.com/watch?v=iKcWu0tsiZM&time_continue=440


Wed, 11/11/2015 - 17:43 | 6779007 ToSoft4Truth
ToSoft4Truth's picture

It’s all good.

And Detroit is on a Comeback, really!   Can’t get much further left behind than this….

Detroit Public Schools: 93% Not Proficient in Reading; 96% Not Proficient in Math

October 28, 2015

http://www.cnsnews.com/news/article/terence-p-jeffrey/detroit-public-sch...

Wed, 11/11/2015 - 18:01 | 6779080 arby63
arby63's picture

University of Missouri will soon show worse stats! Ha! I just must laugh at what I see..........we are DOOMED. Oh, well. I will go down with a fight.

Wed, 11/11/2015 - 17:21 | 6778909 Bill of Rights
Bill of Rights's picture

And yet no mention of that other silent fragile event....housing.

Wed, 11/11/2015 - 17:21 | 6778913 Atomizer
Atomizer's picture

^^^^^^^^^^^^^^^^

What a laughing ghastly bullshit being edged to pull off for society reforming.

 

Wed, 11/11/2015 - 17:31 | 6778966 Atomizer
Atomizer's picture

¡Jeb needs morons to cross the border. It will make him look smart. 

Mi Nombre Es ¡JEB. This idiot is crashing the legal immigration process. 

Wed, 11/11/2015 - 17:43 | 6778985 Demdere
Demdere's picture

https://thinkpatriot.wordpress.com/2015/10/27/ignoring-the-absolutely-in...

https://thinkpatriot.wordpress.com/2015/11/11/dynamics-of-national-colla...

We should be optimistic : the world has plenty of resources to pull through this and come out a greater civilization than ever.  We have an internet to share ideas.  This is human ingenuity against the world, just like always, but this time our social quotient and cooperation indices are off the scale of any previous time.

This is easy, except, as uusal, we have this infrastructure that is obsolete. Armies and governments and mega corporations and ... The Status Quo, basically.  They are in the way, as they always are at this time in history.

Simple choice guys in the Status Quo (you know who you are, you are going to oppose the needed changes in political power relationships) : do you want the rude boys with the pitchforks and burning brands to replace you and administer justice, or can we talk like rational and civilized creatures?  You are going to give up a very great deal, but you will keep your lives, that is what 'civilization' means to me. Cheap price for us all staying so wealthy as compared to a Syrian Civil War landscape as the winner's share.

Oh yes, also a guaranteed loss for their side and so many of their bloodlines being extinguished.  The German General staff didn't believe it, either, although it was also obvious from the insanity of the politics.  Win a war with Adolf Hitler at your back? As if you could build anything in a world of easy money and stupid ideology.

Parallels everywhere.

Wed, 11/11/2015 - 17:39 | 6778990 ToSoft4Truth
ToSoft4Truth's picture

Wait until spring to finance the boat??

Thu, 11/12/2015 - 00:07 | 6780559 zeroaccountability
zeroaccountability's picture

No...just hope the boat doesn't spring a leak while you're out there on the lake admiring your shiny.

Wed, 11/11/2015 - 17:53 | 6779053 Flying Wombat
Flying Wombat's picture

 

The Silent Scream Of Crashing Stocks - Dave Kranzler

http://thenewsdoctors.com/?p=538630

Wed, 11/11/2015 - 18:24 | 6779163 Soul Glow
Soul Glow's picture

Get ready for the biggest debt default in history.

Wed, 11/11/2015 - 18:45 | 6779227 Fuku Ben
Fuku Ben's picture

For those employed in this sector that didn't listen to me as far back as 16 months ago and as recently as 4 months ago let me be more direct.

Get out now! Although waiting almost until the holiday season to look for another job wasn't an ideal decision. You could always gamble and ride it out until early next year and in the mean time wait to see if you're on any guaranteed soon to be released layoffs announcements.

As I've mentioned repeatedly it was unnecessary for those at the top to let this happen. However, in the end egos and avarice won out over better judgement. And it quite likely will get worse with what is really at stake. Now not only will the millions in the middle east pay for it with their lives ruined or ended. So too you and your families will be negatively impacted.

If you think losing a job is a bad outcome of what's currently happening just wait until you see what the decision makers have in store for everyone in the very near future unless there are some significant changes. Each of you have the ability to assist in preventing a negative outcome not just for yourselves and your families but for everyone.

Wed, 11/11/2015 - 18:51 | 6779241 Last of the Mid...
Last of the Middle Class's picture

TBTF 2.0!

 

Wed, 11/11/2015 - 19:00 | 6779278 Motorhead
Motorhead's picture

Not US, of course, but how's ole Deutsche Bank doin'?

Wed, 11/11/2015 - 19:26 | 6779381 LawsofPhysics
LawsofPhysics's picture

Perhaps, but there is plenty of evidence that this time around we are dealing with a global currency crisis.  A global Weimar. This is something very very different indeed...

Wed, 11/11/2015 - 19:25 | 6779376 jomama
jomama's picture

So you're saying that these four firms are going to file chapter 11 by Friday?

Wed, 11/11/2015 - 20:05 | 6779522 Roscoeknows
Roscoeknows's picture

The one thing that always conviently overlooked, is these operators were alive via junk bonds. The banks knew this was never a viable business. Junk Bonds, what better way is there to say, this business is a crap operation. Poisened ground water, Wells with no longevity past 18 months and people selling their homes with OGM rights. Opps, no more checks. Nation done lost their minds.

Wed, 11/11/2015 - 23:25 | 6780416 xavi1951
xavi1951's picture

Let's all blame the JEWS!  It works for everything else.....

Thu, 11/12/2015 - 01:22 | 6780764 inosent
inosent's picture

considering commodity prices are denominated in the crap for currency jews God only knows how they managed to tie us up with, and the entire financial system is all f*ed up with their fiat fractionalized money system, controlled by jews (of dubious origin, btw, so we really don't know who these people are, except they are of a peculiar race, alien demons for all I know, but they sure don't behave like the 'chosen ones of God', more like the chosen ones of evil), yeah, a reasonable argument can be made to pin it on them as well.

Shalom

Wed, 11/11/2015 - 23:27 | 6780424 xavi1951
xavi1951's picture

Ooor.  Blame the weather.

Thu, 11/12/2015 - 00:02 | 6780542 silverer
silverer's picture

Cheerful news indeed.  Now imagine interest rates at 4%.

Thu, 11/12/2015 - 00:04 | 6780549 Atomizer
Atomizer's picture

Unfortunately you banking fuck's never explain the truth about a depositor to bank relationship. You get hacked, good. You are still operating under British Law (follow the cunts: http://www.bankofengland.co.uk/Pages/home.aspx). That's the joke in Wall Street. FDIC doesn't hold the money to protect bank accounts. Enjoy below link. 

Money Confiscation Legal? Keep YOUR Money OUT of the Banks ...

 

Thu, 11/12/2015 - 00:11 | 6780575 Atomizer
Atomizer's picture

Once you understand the scam, keep little deposits into 2015 bank accounts. 

Thu, 11/12/2015 - 00:12 | 6780577 Atomizer
Atomizer's picture

FYI only!

Thu, 11/12/2015 - 00:20 | 6780578 zeroaccountability
zeroaccountability's picture

Anecdotal: For the 1st time I've seen there's an advert on craigslist for 2 bed 1 bath housing units in sunny Dickinson, ND (just south of Williston)

http://denver.craigslist.org/rvs/5310986290.html

Note: These are probably mobile trailers that the fleeing roustabouts are unable to purchase.

Edit: 'roughnecks' vs 'roustabouts'

Looks like real estate is gonna get a WHOLE LOT CHEAPER up there real soon!

Thu, 11/12/2015 - 00:41 | 6780678 Atomizer
Atomizer's picture

Good luck. I have to watch out for hurricanes. You need to avoid tornados. 

Real estate will get cheap again. Wait until the Federal Reserve has to raise rates. You'll be able to buy a double wide for $250 bucks. 

/humor. 

Thu, 11/12/2015 - 00:53 | 6780709 Atomizer
Atomizer's picture

Start paying your corporate taxes. Reinvest your money back into the United States of America. We will not bail you out. Repeat, no bailout. 

Take that rewards points card, and shove it up your data mining asshole. Blows a kiss.  

Thu, 11/12/2015 - 02:26 | 6780862 NoBillsOfCredit
NoBillsOfCredit's picture

"free trade" will prevent this.

Thu, 11/12/2015 - 00:55 | 6780715 Atomizer
Atomizer's picture

My rant is done. Going back to bed to admire my lovely wife. 

Thu, 11/12/2015 - 03:08 | 6780930 kaboomnomic
kaboomnomic's picture

Shits from the BEGINNINGS (1.5$ capitals for 1$ income? That's pretty much FUCKED UP business model)? Of course it would be shits at the ENDS...

Thu, 11/12/2015 - 05:06 | 6781039 JailBanksters
JailBanksters's picture

Shame they can't do the same as US Treasuries, you pay off one bond by selling the next Bond. Which works great as long as somebody buys it. If nobody buys it the FED buys it, so the FED ends up buying their own money.

 

Thu, 11/12/2015 - 06:19 | 6781093 theprofromdover
theprofromdover's picture

The interest rate is basically inconsequential, since they'll hold it at zero as long as they want.

The real issue is when the Feb stops buying the re-parcelled debt off the banks and their evil foolish friends.

If Old Yellen had any guts at all, that's what she would do. She has to crush the banks, they gave them a second and third chance, and all they did was fund internal share-buying by the big corporations.

Thu, 11/12/2015 - 08:47 | 6781253 mademesmile
mademesmile's picture

What happens to the price of oil when it's not priced in dollars?

Thu, 11/12/2015 - 10:13 | 6781566 nathan1234
nathan1234's picture

The answer to that question should worry only Americans and the TBTF who manipulate oil prices using US$.

The rest of the world will be very happy at not having to store and use US$.

 

 

 

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