Posted on 02/12/2015 10:25:53 AM PST by alexmark1917
Moody's Say's Cheaper Oil WILL NOT Boost Global Growth...
What have I been saying all along...
Someone should tell the morons at CNBC...
Lower oil prices will fail to give a "significant boost" to global growth in the next two years, Moody's has said.
The ratings agency said any boost from cheaper oil would be offset by the eurozone's economic woes as well as slowdowns in China, Japan and Russia.
As a result, Moody's said it would not be revising its growth forecasts for the G20 countries.
"For the G20 economies, we expect GDP growth of just under 3% each year in 2015 and 2016."
Say goodbye to 6400 good paying jobs...
SNIP
US oilfield services firm Halliburton has said it will cut up to 8% of its global workforce of 80,000, citing a "challenging market environment" as the oil price continues to tumble.
Halliburton says the cuts will be across all operations of the company.
Shares in Halliburton - the world's second-largest oilfield services company - fell nearly 3%...
Personally I could give a shit about Halliburton stock, if and when I play the Stock Markets I play indexes and ETF's, rarely individual stocks...
The point is, if Halliburton is any example to the rest of the oil industry (which it is), you can expect to see massive layoffs coming out of the U.S. Energy Sector through the next two Quarters, somewhere between 6 and 10% of the workforce...
The U.S. economy’s growth rate in the fourth quarter is looking worse than initially thought
The U.S. economy’s growth rate in the fourth quarter is looking worse than initially thought http://t.co/PmKsQOo5rC pic.twitter.com/mmYMeOwWVz
— Real Time Economics (@WSJecon) February 11, 2015
Headlines:
Puerto Rico Governor Garcia Padilla Proposes Value-Added Tax Puerto Rico lawmakers remove interest cap from $2 bln bond deal Billion-dollar problem brewing for Medicaid in Florida Brazil's Congress hands president setback in fiscal push French 2015 deficit target at risk: audit body head Louisiana officials try to keep state from credit downgrade Japan Deficit Would Continue in 2020 Even If It Relaunches Economy Local Missouri doctors will soon feel Medicaid pay cuts Atlantic City debt balloons due to casino tax appeals Brazil drought: water rationing alone won't save Sao Paulo Venezuela bonds tumble as investors spurn new forex system
Say’s?
Energy drives the world’s economies. If we could suddenly acquire unlimited free energy the world’s economies would explode. The discovery of oil as an energy source is why we expanded so fast in the first place.
Cheaper oil, indeed will not
“boost” the world economy. The fall in oil is, in part, a reflection of the economic slowdown. It is part of it. Separating out the components and considering them singly, cheaper oil, at best, keeps the economy from contracting as fast as it would were oil not cheaper.
Yeah, at first I didn’t understand that headline. And then the author goes on to rant about the morons at CNBC...
Sounds like another variation on “Drill, drill, drill? We can’t drill our way out of this.”
Good point. Under Moody’s logic, oil at $ 500/bbl will not inhibit growth. Hmmm. Do you suppose some of Moody’s employees hold oil stocks?
we expect GDP growth of just under 3% each year in 2015 and 2016.”
Which is NEGATIVE, any GDP that is not greater than inflation(deficit spending) is negative. we are running 6% now.
Just trying to be logical here....I’d think stable oil prices would be best for the world economy.
Justice Department probing Moody’s for mortgage deal grades: WSJ
http://www.reuters.com/article/2015/02/01/us-moody-s-investigation-idUSKBN0L51T820150201
IMO, that kind of thing is glaring in a FR headline.
No doubt. ;-)
The statement was so patently ludicrous I just had to respond.
The problem is the use of “global”.
By definition, there are economies that are net sellers of oil and economies that are net buyers of oil.
A halving of the price of oil helps the latter and damages the former, but globally it’s close to a zero sum, at least in the first year.
But as far as US and European and Japanese growth? It’s a HUUUGE net positive for each. Halliburton is not a good proxy for the global economy, by the way.
Cheaper oil may not boast global growth, I don’t know, but this I do know, it sure is helping me get through this winter in Maine.
Cheaper oil means more money in consumer’s pockets that will boost GDP. Technically you have to consider the marginal propensity to save ...money can be either spent or saved, but additional spending for consumer goods should boost GDP
The oil is cheaper in part because the dollar has gotten stronger, meaning is takes fewer of them to buy a barrel of crude. That and the greater supply of oil.
Now if you can explain to me how having people p!ss away less money filling their gas tanks every week is going to hurt the economy, instead of freeing up money they can spend on consumer goods, services, rent, etc... well, then I’d give this article some credence.
It is not. It points out the fall in oil prices is partly driven by slowing demand of the global economy. Cheap oil prices are a symptom of a economy that was shedding jobs in the first place, mostly Europe and Asia this time around. On top of that, tens of thousands of jobs lost in the oil sector and the loss of demand for pipes, valves, cables, switchgear etc contributes to other industries.
It is not just oil down in price. Iron, copper, some other metals, lumber, propane, ethane, etc are all down from last summer.
In the US, any boost from cheaper oil is being offset by the sky rocketing cost of obamacare!
Thank you for pointing out what should be obvious for anyone who thinks about it for a moment. I am NOT being a smart a$$.
Who cares what the economy of the UAE does. Same for Iran, Saudi Arabia, Bahrain, Nigeria, Venezuela, etc. I feel a little bad for Canada(I like Canada, they are our best ally). I am sorry if someone just built a new apartment building in Midland, TX or Williston, ND.
However, the US is a NET importer of oil. Cheaper oil is generally GOOD for us. If you are an employee of the oil industry, you have seen ups and downs before. I would also bet the last 5-10 years have been great for people in the oil industry. I hope you did not spend it all.
I am sorry if Halliburton has to law off people. However, almost every other industry is hiring now. The transportation industry, construction industry, retail, all are looking.
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