The Terrible, Horrible, No Good, Very Bad Falling Gas Prices

[heisenburrr]

The even bigger myth is this gas situation is somehow going to dig the economy out of this hole

 

[Futuristic Eskimo]

The even bigger myth is this gas situation is somehow going to dig the economy out of this hole

The myth must not be as big as you say because I haven't heard anyone making this argument

 

[heisenburrr]

The myth must not be as big as you say because I haven't heard anyone making this argument

You know the rhetoric..

"Gas is cheaper! More consumption! Revitalize the economy!"

Maybe I should've stuck "help" in there. Of course nobody thinks this is gonna "save" anyone but take this clown here as an example

http://www.bloomberg.com/news/2014-...ng-oil-prices-as-tax-cut-for-u-s-economy.html

Lew Cheers Plummeting Oil Prices as ’Tax Cut’ for U.S. Economy

 

[heisenburrr]

 

[Futuristic Eskimo]

You know the rhetoric..

"Gas is cheaper! More consumption! Revitalize the economy!"

Maybe I should've stuck "help" in there. Of course nobody thinks this is gonna "save" anyone but take this clown here as an example

http://www.bloomberg.com/news/2014-...ng-oil-prices-as-tax-cut-for-u-s-economy.html

It's an economic driver like any other macroeconomic trend. How is the idea that lower gas prices lead to more discretionary consumption rhetoric? There wasn't anything in that article that was out of line or ridiculous at all.

 

[heisenburrr]

It's an economic driver like any other macroeconomic trend. How is the idea that lower gas prices lead to more discretionary consumption rhetoric? There wasn't anything in that article that was out of line or ridiculous at all.

In reality, low gas prices mean increased mobility which in turn should promote the economic recovery that has been stalled for six years by Obama’s central planning.

I just think that's a little bit naive.

 

[Futuristic Eskimo]

I just think that's a little bit naive.

I meant the article you posted where you called the author a clown. The article in the OP isn't written very well.

 

[heisenburrr]

I meant the article you posted where you called the author a clown. The article in the OP isn't written very well.

So you think the currently unprofitable over-leveraged shale business is a "success story" ?

 

[Futuristic Eskimo]

So you think the currently unprofitable over-leveraged shale business is a "success story" ?

Not all firms in shale E&P are over-leveraged. If crude stays in a bear market, the weak will die out and the firms with strong balance sheets will stick around and thrive when the market rebalances and their costs continue to fall. Shale production is here to stay. The only question is at what pace will it reach full capacity.

Do I consider it a success? Tough to say as its an ongoing process. Breaking away from OPECs domination of the crude market is certainly a positive and the industry has been a significant source of economic growth in recent years. Other than from an environmentalists perspective, I don't see what the issue is. Sounds like you're getting caught up in the rhetoric yourself.

 

[heisenburrr]

Not all firms in shale E&P are over-leveraged. If crude stays in a bear market, the weak will die out and the firms with strong balance sheets will stick around and thrive when the market rebalances and their costs continue to fall. Shale production is here to stay. The only question is at what pace will it reach full capacity.

Do I consider it a success? Tough to say as its an ongoing process. Breaking away from OPECs domination of the crude market is certainly a positive and the industry has been a significant source of economic growth in recent years. Other than from an environmentalists perspective, I don't see what the issue is. Sounds like you're getting caught up in the rhetoric yourself.

The issue is a very dangerous % of private and public capital stranded into junk energy bonds. This economy cannot afford all of the weak to "die out" without taking a serious hit.

Not all are over-leveraged sure. Unfortunately an important amount are dangerously so.

 

[Futuristic Eskimo]

The issue is a very dangerous % of private and public capital stranded into junk energy bonds. This economy cannot afford all of the weak to "die out" without taking a serious hit.

I'm aware. There's going to be a lot of restructuring going on in 6 months if things continue down this path and some firms with valuable acreage might get bought out at a big discount as well. I don't think it has gotten to the point of being systematic yet though.