Financial Markets Meltdown

[fishnguy]

Originally Posted by AndrewM

Biggest unknown is what the corona virus does the the world economy.

I think one can take a pretty good guess. I am more of a realist and I really don't see how any of it can have a “happy ending” in the near future. In spite of the fact that many don’t or refuse to see it, it is pretty obvious what this virus is going to do: there will be a ****load of infected, more country wide shutdowns (things will be worse if the shutdowns don’t occur), then it will probably come back in China to some degree, etc. It’s going to be a long and heavy haul. And again, I hope I am wrong.

[AndrewM]

Originally Posted by raab

OPEC already controls the price, that doesn’t change.

And opec makes money off oil so low oil prices makes zero sense to them.

[KinAlberta]

Originally Posted by fishnguy

Russian ministry of energy stated today that they are expecting oil prices to rebound to about $45 by the second half of this year and remain there abouts. In 2021 they are forecasting $45-50 a barrel.

There is your story. They will kill shale and keep the price just low enough to keep it killed. They are fine with a $45 barrel; at $50 they are laughing.

They may also be taking a short term hit for Trump.

It may kill some of the US shale sector but overall it could spur on the US economy with the lower oil price and the now lower interest rates. Once Trump gets re-elected in the fall, then work a deal and spike up oil prices to make up for the losses this summer.

[AndrewM]

Originally Posted by fishnguy

I think one can take a pretty good guess. I am more of a realist and I really don't see how any of it can have a “happy ending” in the near future. In spite of the fact that many don’t or refuse to see it, it is pretty obvious what this virus is going to do: there will be a ****load of infected, more country wide shutdowns (things will be worse if the shutdowns don’t occur), then it will probably come back in China to some degree, etc. It’s going to be a long and heavy haul. And again, I hope I am wrong.

It might or there will be a vaccine. No happy ending in the near future, that's for sure.

[AndrewM]

Originally Posted by KinAlberta

They may also be taking a short term hit for Trump.

It may kill some of the US shale sector but overall it could spur on the US economy with the lower oil price and the now lower interest rates. Once Trump gets re-elected in the fall, then work a deal and spike up oil prices to make up for the losses this summer.

That would require way too much trust. Who knows for sure but I do not see this as likely.

[raab]

Originally Posted by KinAlberta

They may also be taking a short term hit for Trump.

It may kill some of the US shale sector but overall it could spur on the US economy with the lower oil price and the now lower interest rates. Once Trump gets re-elected in the fall, then work a deal and spike up oil prices to make up for the losses this summer.

Oil prices will naturally rise as inventory depletes due to companies shutting in. The fact is we have a lot of companies who are still producing even though it’s unprofitable. Until these guys shut down you can expect low prices.

[raab]

Originally Posted by AndrewM

That would require way too much trust. Who knows for sure but I do not see this as likely.

You see what you want to see. Good chance Trump is fine with 30-45 dollar oil for the next 3-4 years.

[AndrewM]

Originally Posted by raab

Oil prices will naturally rise as inventory depletes due to companies shutting in. The fact is we have a lot of companies who are still producing even though it’s unprofitable. Until these guys shut down you can expect low prices.

As long as you can pay your variable costs, it is worth continuing to produce. If you cannot pay your fixed cost then it isn't sustainable for long. If this lasts more than a few months, companies will be shutting their doors really quick as many were hanging on by a thread prior to this.

[AndrewM]

Originally Posted by raab

You see what you want to see. Good chance Trump is fine with 30-45 dollar oil for the next 3-4 years.

There is more to the oil industry than just producers. Banks, services, manufactures, etc. Shale needs 45-50 just to break even. Trump can't show that he is reliant on other countries as that looks weak. Narcissist's can't handle weakness.

[raab]

Originally Posted by AndrewM

There is more to the oil industry than just producers. Banks, services, manufactures, etc. Shale needs 45-50 just to break even. Trump can't show that he is reliant on other countries as that looks weak. Narcissist's can't handle weakness.

Of course there’s a lot dependent on the energy industry. Look at the beating the Canadian banks are taking for this. It will hurt some in the short term, but the economy as a whole will be booming off cheap energy, and cheap credit. As it is 30 year bonds are basically nothing. Meaning they expect to keep interest rates low for the next 30 years. It’s crazy times right now

[AndrewM]

Originally Posted by raab

Of course there’s a lot dependent on the energy industry. Look at the beating the Canadian banks are taking for this. It will hurt some in the short term, but the economy as a whole will be booming off cheap energy, and cheap credit. As it is 30 year bonds are basically nothing. Meaning they expect to keep interest rates low for the next 30 years. It’s crazy times right now

I just don't see an even more booming US economy, than what is was before oil prices fell and the Corona scare, prior to the election. I see their economy hurting between now and the election.

[fishtank]

corona is just the trigger for the domino effect ... it only the begining , the credit market is getting tight all the central banks are planning easing its their only move cheap money, but inflation is going to be up as well, things cost more and let not forget about debt that are mounting and need servicing. how long will it be able to withstand it .

[Deer Hunter]

No one is going through 30$ oil to expect it to last for any length of time. If this small period of 30$ oil is successful, and corona virus doesn’t kill us all, you will see much much higher oil prices than we did going into this mess.

I am waiting to see how long the saudis can pump in excess of 12mm barrels per day. Personally I don’t think they have it for more than a few months.

[fishnguy]

^ I disagree.

Here is what mentioned earlier in the man’s own words.

Reuters: Exclusive: Russia to OPEC: deeper oil cuts won't work

[fishnguy]

To add, the collapse of the US shale will make the required cut to supply to bump the price to the break-even or just below point, which is exactly what the dude in the above interview is indirectly saying going to happen in the second half of the year, more or less. I think he is optimistic price wise.

[The Elkster]

Cheap interest rates aren't going to mean squat when people are facing massive job losses. Travel, conventions, sports, retail is all going to take a hammering and ultimately that scale of effect will hit everyone in some way. This is going to have a lasting impact.

Next thing to watch is going to be China returning to work. Most of their citizens are still not immune to the virus and as they try to get back up to speed I expect they will encounter more infection. We'll likely have to watch physical supplies hitting out shores because they aren't likely to be honest about the conditions there. I highly doubt they can avoid the virus in the physical manufacturing sector where lots of people in close proximity are required. There is evidence this virus is airborne and able to travel much farther than 1-2meters. They have found evidence in air conditioners and have anecdotal evidence of it travelling +10 meters and staying in the air up to 30minutes after someone has left an area. If China continues to stumble with manufacturing this thing is going to get real ugly over the next year or two as supply chains continue to falter. Stay tuned.

[Deer Hunter]

The question is how many barrels of the world oil supply has been shut in this week? And what is the global demand?

I'd suggest that oil dropping from the 50's to the 30's shut in more production than did the scare of coronovirus.

[fishtank]

Originally Posted by The Elkster

Cheap interest rates aren't going to mean squat when people are facing massive job losses. Travel, conventions, sports, retail is all going to take a hammering and ultimately that scale of effect will hit everyone in some way. This is going to have a lasting impact.

Next thing to watch is going to be China returning to work. Most of their citizens are still not immune to the virus and as they try to get back up to speed I expect they will encounter more infection. We'll likely have to watch physical supplies hitting out shores because they aren't likely to be honest about the conditions there. I highly doubt they can avoid the virus in the physical manufacturing sector where lots of people in close proximity are required. There is evidence this virus is airborne and able to travel much farther than 1-2meters. They have found evidence in air conditioners and have anecdotal evidence of it travelling +10 meters and staying in the air up to 30minutes after someone has left an area. If China continues to stumble with manufacturing this thing is going to get real ugly over the next year or two as supply chains continue to falter. Stay tuned.

not to mention who paid for the hospital bill ... right now treatment cost with insurance about 50-100% of their yearly salary .

[raab]

Originally Posted by AndrewM

It might or there will be a vaccine. No happy ending in the near future, that's for sure.

That would be wrong, we could have good news as early as next week.

[AndrewM]

Originally Posted by raab

That would be wrong, we could have good news as early as next week.

Hope that’s true but I very highly doubt they will have a treatment throughout the world by next week or even within a few months. Takes time to test and then deploy unless it’s something they already had and already tested. So not sure where I was wrong saying there is no solution to ending this in the near future. I think sometimes you like to argue just to argue.

[elkhunter11]

Trump just gave a big speech, and announced huge money going toward dealing with the corona virus. He also announced more travel restrictions.We will see how this effects the markets tomorrow.

[fishnguy]

Plus NBA suspending the season. I would guess other leagues to follow.

Straight down is my guess.

[Zip-in-Z]

Not a good day .....





Most active today all down.





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[Justfishin73]

Futures down 1000....

[elkhunter11]

Originally Posted by Justfishin73

Futures down 1000....

WHO declaring corona virus pandemic, and the Trump speech, things could get really ugly.

[fishnguy]

Oil is down over 5%, at around $33. April futures are at $30.

[fishtank]

Stay away until May ...

[Deer Hunter]

https://calgaryherald.com/opinion/co...on-says-kenney

Kenny looking to Trudeau to help canadian energy companies...

[elkhunter11]

Originally Posted by Deer Hunter

https://calgaryherald.com/opinion/co...on-says-kenney

Kenny looking to Trudeau to help canadian energy companies...

Then Kenney is looking to be disappointed. This situation is a dream come true for Trudeau, a chance to finish off the Canadian oil and gas industry.

[Deer Hunter]

Originally Posted by elkhunter11

Then Kenney is looking to be disappointed. This situation is a dream come true for Trudeau, a chance to finish off the Canadian oil and gas industry.

Kenney knows this but needed to make this federal appeal public so that he can take credit for the bailout he will be forced to give to our energy sector. It won't go down without a fight. Alberta without oil is unimaginable to the provincial govt.
Let's hope