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Thread: Systemic Risk

  1. #81
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    Quote Originally Posted by Wireline View Post
    Not gonna get into the global side...or any side. Like I said, I only get info from people that do this for a living, and judging from their lifestyles, aren't going by the same data you are. And that is fine - I don't pretend to know anymore than I do here. I DO know the people making >$1M a quarter are really nervous. I'll give em your number so you can calm them down.
    Globally? Well, on a global scale, per capita oil consumption in developed countries peaked in 2005 and has been steadily declining ever since. On a per capita basis, global oil consumption sits today where it sat in 1982. The demand there has slowed down as well.

    You seem to continually equate wealth with knowledge. From my side of the table that is not always the case. You say these guys are up to their eyeballs in debt and running their operations on margin yet you inherently trust the information they give you because they make a lot of money. There seems to be a disconnect there. Additionally, there is a disconnect with the information because it is not accurate. I do love the 1970's viewpoint of it all hinging on the "Arabs" though, and the fear that the "Saudis" are going to suddenly just start selling oil at $50/barrel. Not gonna happen.

    I read this book 5 years ago and still reference it from time to tome. It is still relevant today:
    http://www.amazon.com/dp/0982039204
    Last edited by Todd Robbins; 10-25-2014 at 03:38 PM.
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  2. #82
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    Quote Originally Posted by PookyNR View Post
    Lots of room for that number to grow!
    If our idiot president would just build a simple pipeline...
    Todd Robbins
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  3. #83
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    http://fortune.com/2014/10/27/oil-pr...ashes-outlook/

    pretty much echoes my predictions.
    Todd Robbins
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  4. #84
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    Seems we are saying the same thing, but looking at it thru different glasses. When the price of oil drops to a certain level, new drilling pretty well slows to a crawl. The result will be fine for the nation (for a while) but devastating for this area. The cause of it all is pretty much irrelevant when the majority of businesses are operating almost exclusively on credit and futures - people aren't interested in why, other than why the company they worked for Friday is out of business on Monday.

    Like I said, one had to have lived thru the last short term reduction or the last bust to see the impact on the average person, the average neighborhood, etc. It was a great time to buy some REALLY nice audio gear (or anything else) at below-liquidation pricing, but I can't even do that anymore. Doesn't matter what happens in January when you can't cash your last paycheck, pay your mortgage, etc...

    THAT is the position I've been talking about - how it affects my immediate neighborhood.
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    Quote Originally Posted by Wireline View Post
    the majority of businesses are operating almost exclusively on credit and futures
    The majority of the oil business in West Texas is operating exclusively on credit? And futures? Futures of what? Could you point to something that would back you up on that?
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    Quote Originally Posted by Todd Robbins View Post
    The majority of the oil business in West Texas is operating exclusively on credit? And futures? Futures of what? Could you point to something that would back you up on that?
    http://www.mrt.com/business/article_...c0e2cb49a.html
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    We're talking 2 different aspects I suppose. Small independents as a whole make up a small percentage of the total market share, but yes, these are the speculators and the leveraged guys with not much of a net and these are the guys getting shaken out < $75/b. As the article states however, "most tight oil [shale] production in the U.S. can remain profitable at prices as low as $45 per barrel", meaning a majority of the oil business in Texas (total market share) is making a profit to the point where they can ride this wave out. I was at the DUG Eagle Ford Conference in San Antonio last month, and this was certainly the sentiment; however, I would LOVED IT if that conference could've been just one month later to hear the presentations in light of late-Oct pricing versus late-Sept. pricing of oil… Coincidentally DUG is scheduled for this weekend, 2015.
    Todd Robbins
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    True...they can ride on holes already working - while (as I understand it) pulling unit crews and such can keep a working well operating, the $45 mark is well below the actual cost of putting new wells in place. The majority of what goes on in the actual oil patch is drilling, and when drilling slows/stops, it affects every other element of the chain from ground to refinery. When the over-credited folks go, they tend to take out the peripheral businesses, then the support (restaurant/hotels/food stores) next...property values and other tax-based things don't change for years, and those adjustments are very slow.

    So yeah - I'm just looking at it from the "what happens where I live" aspect, as the futures price has a very real impact on me and mine - even though I loath the whole mess....

    Today's close 80.67, down .41%
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    I can't help but to think about Todd's original post and concerns when hearing about the current snowfall in Buffalo. While highly unlikely for a similar storm to affect eastern NC, if it did, 99.9% of us would be unprepared in almost EVERY capacity.
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