Oooooh, I can’t wait til Maxine Waters gets to the bottom of this with Senate hearings.
This is a multi-moving part phenomenon and I can’t claim to see more than a modest portion of it.
It’s oddly very Reaganesque in the sense that it is probably very oppressive to Russia, but that, too, is a different set of factors with the very weak president we have and the heightened aggression of Russia. It will probably drive Russia to export more weapons and cement further their budding alliance with China.
It will probably bolster the increasing strength of the US dollar and continue the story of “very low inflation” which will make bonds more attractive and allow the US to persist in neverending debt as bonds, despite how low a coupon they pay, remain very attractive.
It’s a massive, massive boost for the US consumer, very probably the most in-your-face and most widespread same-kind-of-thing as a tax cut but it is instantaneous.
Probably quite bearish for gold. Very bullish for the stock market.
What else?
"Recently we posted the following article commenting on the impact of USD appreciation and dollar circulation among oil exporters, as well as how the collapsing price of oil is set to reverberate across the entire oil-exporting world, where sticky high oil prices were a key reason for social stability. Following today's shocking OPEC announcement and the epic collapse in crude prices, it is time to repost it now that everyone is desperate to become a bear market oil expert, if only on Twitter..."
NO kidding.... I filled up today and I only paid $2.67 per gallon.
This might have the effect of forcing shale developers to slow or stop operating for a while, but the black juice is still sitting there under the ground, patiently waiting for the day that it is needed. And OPEC can’t get their hands on it.
A lot of my clients work in the oil fields and (like my business) it is either feast or famine for those guys.
Sure I’d like lower gas prices at the pump, but if my income drops because clients can’t pay then it’s a net negative.
Maybe this is a sign the Obama era is pretty much over. The havoc he has been wreaking upon the world is slowly being overcome by market place forces and individual initiative in the face of unbearable regulatory burdens.
Oil isn’t crashing, it is being manipulated by the Arabs to force out oil produced through fracking, which has a higher cost to produce than oil from the middle east.
Two questions if anyone wants to educate me:
1) what is causing this? Is it oil drilling in the US (North Dakota)?
2) gas prices are falling in US (it’s 2.36 where I live) is it also falling in countries where it is/was very expensive? (ie Europe)
Paid $2.42/gal last night of regular unleaded. Gotta admit, it felt really nice.
I like paying less at the pump as much as anybody. However, there is a ton of debt out there that has financed the tight oil (fracking) boom. Much of this was already junk rated, and just between two recent merger deals, banks have been caught with north of $1 billion in loans that they have not been able to syndicate. I’m not sure anyone has really quantified just how big this debt bubble has grown in the last five years, but it looks like there is going to be some defaults. Enough to have wider, systemic, consequences ? Not sure.
Nicolas Maduro just had a Big Mac Attack in his diaper.
Bttt!