Posted on 12/11/2015 3:30:25 PM PST by Lorianne
Brace for a wave of defaults in the oil patch.
Energy companies that loaded up on debt during the oil boom are likely to have trouble paying back those loans. Oil prices have collapsed over 65% since the middle of last year to below $37 a barrel this week and there's no recovery in sight.
It's fueling financial turmoil on Wall Street with Standard & Poor's Ratings Service recently warning that a stunning 50% of energy junk bonds are "distressed," meaning they are at risk of default.
Overall, about $180 billion of debt is distressed. It's the highest level since the end of the Great Recession and much of it is in energy companies.
(Excerpt) Read more at money.cnn.com ...
Bring it on!
A related story is many folks in western ND over bought on credit. I’m talking building huge homes, apartments to buying pickups with all the aftermarket trimmings. We are talking pickups worth over $100,000.
My daughter works out there and these people are suffering, but I do not feel sorry for them. Western ND has gone through at least 3 booms, each went through a cycle that ended with low oil prices causing layoffs.
In a few months to a couple years those homes will likely go quite cheap.
Warning: Half of oil junk bonds could default
http://www.freerepublic.com/focus/f-news/3370668/posts
I’ve never personally understood the desire to buy mansions or the most expensive vehicles you can, just because you can. I’m still waiting for my lottery win to show how I would live differently.
Could this be related to the reason why they are called junk?
Agreed. I worked the boom that ended in the early 80’s. I blew every dime I made, but bought things in cash. Save a few thousand, go pay cash for a new Bronco XLT. Save up again, get a camper. Everything was paid off, home too. When the boom was over I still got to keep the toys.
Wife and I tried to tell these people that. They don’t listen, truckers made well over $100,000 starting pay this last boom with $500 monthly bonuses just to show up on time. They thought it would never end. I fault the banks as much as I do the fools that got loans.
Are saying a truck / pickup going for 100K?
Ha!!
Oh yes. We are looking for a pickup now. Several day ago I found a 2013 Ford for $89,000. According to my daughter there are several of these right now out in western ND for sale.
Buy yourself a 2016 F250, the most expensive one Ford makes, all the options. Then go buy the most expensive aftermarket stuff, such as rims & tires, lift kits, exhaust, grille guard, rear bumper, head ache rack, etc. The list is endless. Then hire someone to put it all on. And yes, it will get to $100,000.
The grille guards they are buying aren’t these cheesy chrome tube jobs. They probably weight 500 pounds or more.
To give you an idea, my daughter is using my old chevy now with a good grille guard. She hit a deer going 70. Deer flew into the air 8 feet. The grille guard pushed into one headlight and broke it and the bezel, dented the fender a little.
You will see a huge blood splatter on a highway with what looks like hamburger scattered about and enough fur to know it’s a mule deer. The bigger trucks splatter a deer like a bug on a windshield.
I need to bring my vehicles up there!!
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.