Stock Market Discussion

comountaingolf · Wed Jan 20, 2016 10:54 pm

hax0n wrote:Oil has bottomed tho right?

Put it this way. Koch Industries is charging $.50 per barrel for ND-Bakken Sour Crude to 'take it off your hands.' Close to 12 months ago it was around $100 a barrel for the same. It's going to be an interesting '16.

natepachl · Wed Jan 20, 2016 11:29 pm

Crude hasn't hit the floor; stocks are high....the Saudis are pumping it out to keep the markets depressed. It slows down domestic investment in oil and nat gas infrastructure in the US and other parts of the west. For domestic production to be profitable/attractive for investment in 'Murica we need oil at 60-70 bucks a barrel. Oil may climb that high if production is cut in the Middle East; or if demand spikes, but won't sustainably rise above $65-70 p/barrel for a long time. Demand has to increase 1mm barrels to even get to a balanced market.

A lot of investment has been made to support cracking light feeds (nat gas). When you crack light feeds ethylene and propylene are produced in ratios that are significantly disproportionate to cracking heavy feeds (oil). Something like 20:1 ethylene to propylene with nat gas, as opposed to 1:1 ratio cracking heavy feeds. Many companies had begun reformulating away from propylene derivatives anticipating ethylene derivatives to be lower cost long-term. A shitton of steel is in the ground in the gulf to support this too. Have to imagine this plays a roll in the Saudi's desire to keep oil depressed.

sidewaysscott · Wed Jan 20, 2016 11:48 pm

natepachl wrote:For domestic production to be profitable/attractive for investment in 'Murica we need oil at $40+ bucks a barrel. Oil may climb that high if production is cut in the Middle East; or if demand spikes, but won't sustainably rise above $65-70 p/barrel for a long time. Demand has to increase 1mm barrels to even get to a balanced market.

fixed.

and i'm not sure or rather, it'll be a loooooong time before it get's near $60+/bbl. IMO. I'm thinking that we'll see it continue to free fall due to emotions and will make a slow climb up to low $40s and then dance in the 40s for the next period.

Tell you what though, I'd hate to be the banks that loaned all that money. These re-determinations are killer. Thankfully, we've got plenty of assets to back it, but there's a couple companies I'd call "competitors" that I'm guessing they're be filing here shortly. Many companies are once again having "lay-off" events.

Regardless of your views and opinion of oil, seeing people lose jobs is never fun.

hax0n · Thu Jan 21, 2016 2:06 am

RIP Canada. Without $100 barrels of tar-sand to sell they'll be broke within a year.

1000steps · Thu Jan 21, 2016 10:21 am

I wonder what endgame the Saudis are playing toward? Obviously they want to smite the OPEC cheaters (done), crush US fracking (done), and wage economic war on Iran (heating up). All have been documented at great length. But I believe the Saudis have gamed out the cheap oil scenario for the long term, probably using cutting-edge supercomputers. They know they gain some sort of advantage by pumping their precious national resource and dumping it for pennies in a terrible market. That is quite obvious by now. But they can't run everyone else out of the oil business permanently - US fracking will come right back, as soon as it is financially viable. Many other nations would fall back to the Stone Age if they weren't taking in oil revenues.

So something else is up, in a big way. Is Jim Chanos correct when he advises producers to 'pump the oil now before it becomes valueless?'

http://www.businessinsider.com/jim-chan ... ec-2015-12

pvecchi · Thu Jan 21, 2016 11:30 am

Good....the tar sands people can go frack themselves as far as I'm concerned

Hopefully low priced oil/natural gas combined with sanctions will hurt Putin and the Russian oligarchs and force him out of foreign affairs like Syria (I'm thinking the Saudis know this too)

So glad we are not talking about the Keystone pipeline any more.

1000steps · Thu Jan 21, 2016 11:57 am

I think alternative energy will benefit in some ways from ultracheap oil, and will be hurt in other ways. The sea change here is this time I don't hear anyone saying "cheap oil will kill solar power" etc., which was reflexive in the financial media a mere decade ago. Alternative energy is established now, a critical part of the national infrastructure. And we will be better off for it

Give a point to the federal government for incubating the alternative energy/cleantech industry...

Thu Jan 21, 2016 1:23 pm

comountaingolf wrote:
hax0n wrote:Oil has bottomed tho right?
Put it this way. Koch Industries is charging $.50 per barrel for ND-Bakken Sour Crude to 'take it off your hands.' Close to 12 months ago it was around $100 a barrel for the same. It's going to be an interesting '16.

Lol, wtf

1000steps · Thu Jan 21, 2016 2:43 pm

And it is not just oil. All commodities markets are chaotic right now, and equities markets too. Oil is propelling a lot of that volatility.

1000steps · Tue Jan 26, 2016 3:27 pm

No one has a crystal ball, but I don't think the current equities bull is dead. Taking a long nap maybe, but not dead.

Why? No climax top, no frenzied panic buying quickly shifting to panic selling.

Who knows, maybe high-speed trading has changed the game that much. But I doubt it.

kotopa4 · Fri Jan 29, 2016 11:40 am

1000steps wrote:No one has a crystal ball, but I don't think the current equities bull is dead. Taking a long nap maybe, but not dead.

Why? No climax top, no frenzied panic buying quickly shifting to panic selling.

Who knows, maybe high-speed trading has changed the game that much. But I doubt it.

lsmith55 · Fri Jan 29, 2016 3:25 pm

all i know is people love overpriced coffee no matter how shitty the economy is- SBUX still holding strong for me even through the turmoil...

1000steps · Tue Feb 16, 2016 10:07 am

The world has formally entered the era of "Too Big to Fail". Too Big to Fail banking policies have been around forever, but this government clarification of Chinese banking policy will eventually force a retooling of the entire global banking system. With a population of 1.5 billion savers to absorb the losses, this gives Chinese banks an enormous competitive advantage.

http://www.businessinsider.com/china-ba ... out-2016-2

mrsippycups · Tue Feb 16, 2016 10:17 am

But don't freak out, Wang says. The China "super bears" are wrong, and everything will be just fine.

Man, there is nothing scarier then someone telling you "Don't freak out"

1000steps · Fri Feb 19, 2016 12:19 pm

Government bail-outs transform moral hazard into moral failure, at the expense of the responsible. You can quote me on that one.

I just found out Udemy has online investing and trading courses for as low as $24. This one seems intriguing, although I am skeptical of the "double your money every year" sales pitch.

https://www.udemy.com/create-your-own-h ... o#/reviews