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:
2 comments:
If being a quadrillion, er, units [although it's safe to use $ because they are the world's 'reserve currency'] out of whack didn't sink the 'global economy' it's a pretty safe bet that a collapse will be a deliberate thing, somewhat akin to what they did in Zimbabwe.
Is anyone else disturbed by chillingly accurate description of the capitalist game plan seen in the Rocket Mortgage commercials by Quicken? [Sort of redefines the term 'check writing software'...]
It is the perfect (albeit simplified) explanation of how life under capitalism is supposed to work...but it leaves out the income part of the puzzle. In order to borrow the way Quicken wants you to you have to have a lot more disposable income than you have at the moment.
More alarming are the prices being bandied about by the 'Home Improvement Shows that anchor HGTV. Wrecked/dated homes are selling for a half a million dollars and will cost another quarter of a million to rehab.
Considering the 50% point of the wage scale is STILL hovering around $25k a year, who can afford this?
Short answer, nobody...but we can forgive them because, after all, it's television. A place where everybody lives in homes the rest of us can only dream of.
Turning back for a moment to today's headline (rhetorical if you didn't live through what has gone before) it seems HillBilly is the gift that just keeps giving.
Take one of the youngest presidents ever and plant him at the head of the faux opposition and they've had what, 30 years of 'wagging the dog'?
No irony should be lost on the fact that they're still around, long after their 'sell by' date. One would think they had to promise them a lot considering how effectively they dismantled the New Deal for the oligarchs...and now the shadow masters must be regretting their decision...but the future co-operation (of the young and gullible) depends on using this pair as an 'example'.
Re fracking. The economics are one-part ponzi scheme and one-part subprime lending boom. If they stop moving forward they will sink.
In addition, the big money is presumably made by the principals in the initial stages, after which it's moved to syndicated investment trusts to be foisted off on pension funds and retirees, Glengarry Glen Ross style.
So, they will indeed keep drilling as long as they can scrape together the capital and vendor financing to do so. And when it collapses, well, don't blink.
Post a Comment