Friday, February 12, 2016
The End Is In Slight: One of the main reasons that low prices have not dried up the production of profitless petroleum is simple – many if not most fracking operations operate on borrowed money – not on capital raised from equities. And borrowed money has to be paid back from cashflow if there is no capital to tap. Thus they keep pumping so they can keep paying and hopefully hang on until prices rise. A very few may survive, but the simple math suggests most will not. They will eventually fail and default on their loans. Then the question becomes how badly will these bankruptcies impact the banking system?
The Money Quote: “Who wants billionaire Michael Bloomberg to run for president? People like Michael Bloomberg.”
Publicity Stunted: Germany has opened a TAFTA/TTIP Reading Room to give German legislators access to the text of the treaty. They have 2 hours to read the 300 page document (on a computer assigned by the secret-keepers), which is available only in English and is full of typos like “annd” for 'and' and 'teh' for 'the' and allowis any copying of the text be traced back to a specific person. You'd almost think that the public and its representatives don't have the right to know what their corporate overlords are up to, and you'd be right.
Interpretation: A 40-year longitudinal study has found that defiant children are more likely to succeed as adults than more compliant suck-ups. This does not mean they are nicer or better people; maybe their success reflects psychopathy.
Motto: We kill because we can.
Truth In Packaging: Obama wants to stop decades of hypocrisy and explicitly exempt Egypt from having to meet the human rights conditions required under US law for countries receiving US aid.
… And Call Me In The Morning: Willem Buiter, Citi’s global chief economist, told investors that it is ‘likely’ that a global recession is underway, and that the current weak economic growth is not enough to avoid a serious global recession.
Links: The CDC has found physical evidence linking the Zika virus to microcephaly in four Brazilian cases, strengthening the suggestive but non-proven statistical correlation.
Firedwall: Members of the Congressional Black Caucus are insisting that the endorsement of Hillary Clinton by the Congressional Black Caucus PAC does not constitute an endorsement by the caucus itself and was done without input from the CBC membership.
Water Is Wet: S&P finds that “the low interest rates and quantitative easing used to rescue the economy after the 2008 crash have handed extra wealth to the richest households by propping up stock markets and supporting booming house prices.”
Porn O'Graph: Don't bank on it.
The Parting Shot:
Posted by Charles Kingsley Michaelson, III at 8:20 AM