Posted on 01/15/2016 12:10:20 PM PST by Citizen Zed
The selloff comes down to two simple Economy 101 forces: Increased supply and decreased demand. High prices prompted U.S. companies to start drilling for oil in shale formations using unconventional methods like hydraulic fracking and horizontal drilling. This "American Oil Renaissance," which began to gain traction in 2010, has extended from the Eagle Ford in Texas to North Dakota's Bakken Shale, Ohio's Utica, and Pennsylvania's Marcellus Shale, as U.S.-based oil & gas companies started pumping out oil and natural gas. To put it in perspective, the U.S. overtook Saudia Arabia and Russia as the top oil and gas producer.
As prices slid, many waited to see whether the Organization of Petroleum Exporting Countries (OPEC) - a collection of oil-producing countries that pumps about 40% of the world's oil - would cut back on production to push prices up. OPEC did nothing. Ever since Saudi Arabia's decision to maintain output in late 2014 - a decision it upheld at the end of 2015 - prices have kept tumbling. And U.S. drilling production has just started to decline, but the decline has been far less severe than originally predicted.
Then there's demand. Demand for oil globally began tapering off, driven most notably by a slowdown in China's economy.
(Excerpt) Read more at finance.yahoo.com ...
“Test run for the late 2016 super crash, engineered so the POTUS can stay in office.”
The POSOTUS now has a giant new basement under the rainbow mosque...
Anyone else remember how Arafat retreated to HIS until “we” finally got Israel to stop knocking at his door?
The Fraud has queered up up the military and now does anything he wants with them already....
I think the markets are tanking because all of America’s major companies have sold out to China, and now Donald Trump is leading and he says “bring back American jobs”.
Our entire business sector, has been sold out.
All of it. Now Trump is saying we need to build up right here in America once again, and our entire business sector is scared they might just have to.
That is my view, anyway.
Modern America is just financially stupid. A Clue they do not have about how to live frugally but with stability.
I read the other day that 67% of American households cannot handle a $500.00 emergency. That is shocking to me. We've lost our freaking minds.
Agree 100%
It’s got what plants crave. :-)
One year from now I don’t think ANY of us will have the ability to sign on to FR. Yes, THAT’S how bad it’s going to be.
“Well, I’ve never seen no plants grow out of no toilet.”
Just let us know when we hit bottom, so we can get back in!
Found this video last night
It’s from 1991 but parts seem very relevant ti what is happening to today’s exonomy
It’s long but worth the time
http://www.freerepublic.com/focus/f-news/3384013/posts
The why is always a good question, but it is also important to consider *what* is happening first.
1) The Baltic Dry Index. Not restricted to just the North Atlantic, “the index provides “an assessment of the price of moving major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers a range of commodities including coal, iron ore and grain.”
Right now, the BDI is close to zero. This means that there are almost *no* ships at sea, carrying cargo. Hundreds or even thousands of *empty* ships are either docked in port or anchored offshore.
Bottom Line: Every day ships are not shipping, hundreds of billions of dollars are lost.
2) Inventories/sales ratio for merchant wholesalers is approaching the high last set in the recession of 2008. This means too many products “on the shelves”, and customers are not buying.
3) Market indices have been artificially sustained for too long by central banks and the FED. By preventing corrections, they have guaranteed much greater corrections. The bubbles must burst.
They expect to have to pay for the next war.
Wars start when oil prices get this low. Very dangerous.
A week later I get a phone call from the buyer saying.... we got our uncle henry to "off the books" loan us 20k and it's now in our checking account. So how long do we have to wait to get a new lender statement?
That’s a worldwide halt - has nothing to do with Obama, more to do with profit of which there is precious little in shipping these days - consider containers coming to the US are full, containers when they are returned (many are not) are empty.
I'm certainly not going to tell YOU.
Not enough “easing”.....
Either that or OPEC is trying to bankrupt US domestic producers.
“n January 2009, those of us who are awake to the facts were shocked when Chief Justice John Roberts gave OZero the Oath of Office.
Didn’t he screw up the wording a little when he administered the oath?”
The rumor PERSISTS that Obama was not sworn in on the Bible, but on the Quran.....!
Yes. And I like to think that was intentional.
Simple, long tried and true answer:
The sitting President goes on TV with any kind of speech that includes the economy. The common reaction is to see what Wall St. does the next day. Stocks go up, it was a bully speech, and good information received. Stocks go down, becomes a vote of no confidence in that President and his announced actions.
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