zugzwang Posted December 9, 2014 Share Posted December 9, 2014 Drop in monetary velocity, or money unable to support the price of every bloated asset class out there? Something has to give. Stock-markets at such heights (ex Russia), house prices with Medusa-style asking prices on Rightmove for younger people/renters,... £25Bn new BTL lending last year to surpass the £24Bn BTL lending year before (according to a Property-Tribes Shawbrook Bank video discussion I watched last night), US housing markets like SoCal in crazy house-price bubble. Aberdeen has so many 'HPI-forever' fanatical home-owners/investors. It won't be pretty if Aberdeen house prices slide, and the sentiment change that could occur quickly. (For sake of others who have waited for better value, bring it on!). This time it's the same: The subprime shale bubble in plain sight. http://davidstockmanscontracorner.com/this-time-its-the-same-like-the-housing-mania-the-subprime-shale-bubble-is-in-plain-sight/ As the global boom cools, oil demand withers, the junk market craters, and the shale patch tumbles into depression, someone might actually note the chart below. Its been another central bank parlor trick. The job count in the 45 non-shale states last Friday was 400,000 lower than it was at the end of 2007. That’s right, not one new job—even part-time or in the HES complex—- for the last seven years. All the new jobs have been in the 5 shale states. That is, they were manufactured by the Fed’s tidal wave of cheap capital and the central bank fueled global recovery which created the illusion that $100 oil was here to stay. But it isn’t and neither is the shale boom, the shale jobs or the shale investment spike, which counts for a good share of overall CapEx growth since the crisis. Yes, indeed. The monetary politburo did it again. Quote Link to comment Share on other sites More sharing options...
rollover Posted December 9, 2014 Author Share Posted December 9, 2014 Does US still want to start exporting oil next year? Healthy competition and oversupply. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 10, 2014 Share Posted December 10, 2014 Petrol to fall £1 a litre if oil stays low Goldman Sachs economist Kevin Daly says fall will boost consumer confidence as thinktank criticises deficit drive Quote Link to comment Share on other sites More sharing options...
Rare Bear Posted December 10, 2014 Share Posted December 10, 2014 Petrol to fall £1 a litre if oil stays low Goldman Sachs economist Kevin Daly says fall will boost consumer confidence as thinktank criticises deficit drive I read somewhere yesterday that jet fuel, no tax rememeber, can be found in some parts of America for $3.50 per US GALLON. Quote Link to comment Share on other sites More sharing options...
R K Posted December 10, 2014 Share Posted December 10, 2014 Vuvuzela looking vulnerable Bond Vigilantes @bondvigilantes 3h3 hours ago Risk of Venezuela default now greater than post Lehmans. Is one of the biggest EM debt issuers Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 11, 2014 Share Posted December 11, 2014 Finland Rejects Oil as Recovery Lever as Economic Pain Persists One of northern Europe’s weakest economies can’t rely on cheaper imports driven by a slump in oil to kickstart a recovery, according to Economy Minister Jan Vapaavuori. Finland not reading the oil price collapse is good for the economy narrative. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 11, 2014 Share Posted December 11, 2014 Oil Plunge Rips Through Markets as Investors Seek Bottom Oil Trades Near 5-Year Low as Saudis Question Need to Cut Output Oil Price Hit by OPEC Numbers as Saudis Stand Firm on Output It certainly looks like the new year will be interesting. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted December 11, 2014 Share Posted December 11, 2014 (edited) Can't wait for the CPI stats. On the downside sub 1% CPI is basically interest rates kicked into the 2016 or 2017 long grass. I guess the BOE will do everything it takes to ensure that debtors don't get ball crunching deflation Japanese style. What a cataclysm deflation would be for those with large mortgages. Edited December 11, 2014 by crashmonitor Quote Link to comment Share on other sites More sharing options...
Venger Posted December 11, 2014 Share Posted December 11, 2014 Can't wait for the CPI stats. On the downside sub 1% CPI is basically interest rates kicked into the 2016 or 2017 long grass. I guess the BOE will do everything it takes to ensure that debtors don't get ball crunching deflation Japanese style. What a cataclysm deflation would be for those with large mortgages. Prefer to think what it would do for saver renters, for once. Only 1 in 3 owners with a mortgage, according to BoE yesterday.... fewer than 2 in 5 with mortgage from Guardian last year. Too many outright/equity rich. It is always the same thing. Outright owners/equity rich and BTLers, placing those with large mortgage on pedestals, coming up with the excuses for them, simply because they want their own hpi protected. Those expecting hpi and waiting for the ripple where bungalows around Nottingham are only valued at around £360,000 - and expecting more HPI ripple to Sheffied where Wally paid £450,000 for a fairly standard house, can try on the deflation some non-owners renters have saved towards finally getting some position toward buying. Quote Link to comment Share on other sites More sharing options...
R K Posted December 11, 2014 Share Posted December 11, 2014 Fall in oil price has a temporary effect on cpi. Theyll look thru it as they do on the upside. It has a +ve effect on growth Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 11, 2014 Share Posted December 11, 2014 http://www.bloomberg.com/news/2014-12-11/fed-bubble-bursts-in-550-billion-of-energy-debt-credit-markets.html The danger of stimulus-induced bubbles is starting to play out in the market for energy-company debt. Since early 2010, energy producers have raised $550 billion of new bonds and loans as the Federal Reserve held borrowing costs near zero, according to Deutsche Bank AG. With oil prices plunging, investors are questioning the ability of some issuers to meet their debt obligations. Research firm CreditSights Inc. predicts the default rate for energy junk bonds will double to eight percent next year. “Anything that becomes a mania -- it ends badly,” said Tim Gramatovich, who helps manage more than $800 million as chief investment officer of Santa Barbara, California-based Peritus Asset Management. “And this is a mania.” The Fed’s decision to keep benchmark interest rates at record lows for six years has encouraged investors to funnel cash into speculative-grade securities to generate returns, raising concern that risks were being overlooked. A report from Moody’s Investors Service this week found that investor protections in corporate debt are at an all-time low, while average yields on junk bonds were recently lower than what investment-grade companies were paying before the credit crisis. I wonder what the next bubble will be to generate returns to exit this imminent collapse. Quote Link to comment Share on other sites More sharing options...
R K Posted December 11, 2014 Share Posted December 11, 2014 Oooh. Oooh. Ooooh. Sub $60. Fire up the Bentley! Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 11, 2014 Share Posted December 11, 2014 Transitioning to a world with cheaper energy11 December 2014 The uncertain road of getting to a new equilibrium of cheaper oil prices is what's causing market gyrations. Oil steadies on U.S. economic data; U.S. crude near $60 support | FXpert 7:29pm GMT U.S. crude below $60, first time in five years, on oversupply fearsHow low can it go? Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted December 11, 2014 Share Posted December 11, 2014 Fall in oil price has a temporary effect on cpi. Theyll look thru it as they do on the upside. It has a +ve effect on growth Saves an IR rise. Quote Link to comment Share on other sites More sharing options...
rollover Posted December 11, 2014 Author Share Posted December 11, 2014 US Congress passes bill to impose Venezuela sanctionshttp://www.bbc.com/news/world-latin-america-30426439 To keep prices of oil high by pumping less Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 11, 2014 Share Posted December 11, 2014 WTI Crude Crashes Into The $50s Zee overnight stabilitee (and brief dead-cat-bounce this morning) has turned into a renewed bout of selling pressure and for the first time since July 2009, WTI has broken below the $60 level. Canada Heavy is trading $42.10 (down almst $4 today!), its lowest since April 2009. As Deutsche Bank warned last month, a drop in the oil price to $60 a barrel "is likely to push the whole HY energy sector into distress," and sure enough - Energy credit spreads are wider once again, now at +952bps. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 11, 2014 Share Posted December 11, 2014 Norway Central Bank, Slammed By Oil Plunge, Warns Of "Severe Downturn", Unexpectedly Cuts Rates New oil projects are being scrapped in Norway amid falling production and low oil prices. The governor of Norway’s central bank says western Europe’s biggest oil producer is facing a major economic slowdown as crude prices continue to plunge. As Bloomberg reports, Oeystein Olsen said today after unexpectedly cutting rates and shocking markets to a new 5 year low in NOKEUR, "our job now is that we need to prevent a severe downturn in the economy... that is presently the major concern of the board." Quote Link to comment Share on other sites More sharing options...
rollover Posted December 11, 2014 Author Share Posted December 11, 2014 While crude oil plummets, the price of olive oil is skyrocketing. Too little rain and a nasty fruit fly are doing heavy damage to the world’s olive crop. http://www.marketwatch.com/story/while-crude-oil-plummets-the-price-of-olive-oil-is-skyrocketing-2014-12-10 Quote Link to comment Share on other sites More sharing options...
R K Posted December 11, 2014 Share Posted December 11, 2014 Saves an IR rise. We'll have to wait and see. Not sure it'll make any/much difference to the FED at least. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted December 11, 2014 Share Posted December 11, 2014 Zerocred got this one right. Crashing Crude's First Casualty: One-Time Commodities Giant Phibro Liquidating While we were expecting that one-time "god of crude oil trading" would have a poor year as a result of his consistent bullishness on the crude space, we were quite astounded to learn, as Bloomberg first reported yesterday, that Andy Hall - the man whose name was for a decade legendary in the commodity space - would call it a day. And yet that pales in comparison to the WSJ report overnight than Phibro itself, Andy Hall's 113 year old employer currently owned by Occidental Petroleum after its sale by Citigroup, would liquidate in the US after it failed to buy a buyer, marking the end of an era. http://www.zerohedge.com/news/2014-12-10/crashing-crudes-first-casualty-one-time-commodities-giant-phibro-liquidating Quote Link to comment Share on other sites More sharing options...
rollover Posted December 12, 2014 Author Share Posted December 12, 2014 Miracle' tech turns water into fuel German cleantech company Sunfire GmbH has unveiled a machine that converts water and carbon dioxide into synthetic petroleum-based fuels. http://www.cnet.com/uk/news/miracle-tech-turns-water-into-fuel/ Quote Link to comment Share on other sites More sharing options...
rollover Posted December 12, 2014 Author Share Posted December 12, 2014 California Shale Oil Bonanza Suffers Major Setback The U.S. government says it has overestimated--by 96 percent--the amount of recoverable shale oil California has. In the 2013 Outlook, EIA figured California's Monterey Shale formation had 13.7 billion barrels recoverable with today's technology. The new Outlook thinks the state has 600 million barr The news has invigorated the state's opponents to fracking, the process for extracting shale oil. The revision, says Kassie Siegel, director of the Climate Law Institute, shows "there is no gigantic treasure trove that can be recovered any time soon. It underscores how little is known about these new and ever more damaging forms of fossil fuel extraction." The easy money and jobs that had been promised to California by fracking advocates, "have now been proved a myth." http://abcnews.go.com/Business/california-shale-oil-estimate-off-96-percent/story?id=23828490 Quote Link to comment Share on other sites More sharing options...
Giraffe Posted December 12, 2014 Share Posted December 12, 2014 U.S. government says it has overestimated--by 96 percent--the amount of recoverable shale oil California has You've got to allow a little leeway in these estimates, don't you know. Quote Link to comment Share on other sites More sharing options...
Errol Posted December 12, 2014 Share Posted December 12, 2014 The U.S. government says it has overestimated--by 96 percent--the amount of recoverable shale oil California has. lol? In a similar way they underestimated the number of people they had tortured. Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted December 12, 2014 Share Posted December 12, 2014 California Shale Oil Bonanza Suffers Major Setback The U.S. government says it has overestimated--by 96 percent--the amount of recoverable shale oil California has. An excellent guess. That has to be the quote of the day! Quote Link to comment Share on other sites More sharing options...
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