Economy 52,837 Posted December 16, 2014 Share Posted December 16, 2014 http://www.counterpunch.org/2014/12/12/will-falling-oil-prices-crash-the-markets/ I posted this on my daily economic thread, but since so few people check it daily (which im sad about :( ) and i think this is a major thing, im also making a thread for it Basically everyone is going on about how consumers will save all this money and businesses will have lower operating costs ect. But many experts warn of the dark side of low oil prices many everyday people are over-looking More specifically were talking about North America. Both Canada and the US have had major growth in oil. Canada with its oil sands and the US with its shale boom. Now we all know this is expensive oil to produce and current prices make many companies unprofitable. But is their bankruptcy and job losses that could soon follow the only threat? unfortunately not These companies took massive amounts of loans to expand, both from banks and everyday investors. If they go bankrupt they will default. All these loans banks and people gave to oil companies will become bad loans and both people and banks will loose a lot of money Lots of defaults by big corporations such as these will unfortunately cause a chain reaction in the over-all bond market causing all types of credit to go up in cost from other corporate bonds, to government bonds and even mortgage rates to spike which could threaten even real estate Enjoy the lower gas prices. But if you are from North America, you might wish they dont stay this low for too long Link to post Share on other sites More sharing options...
Dayum 240 Posted December 16, 2014 Share Posted December 16, 2014 I like your threads! You deserve much love. What do you think people (government, public, corporations etc.) should do? Would the bank stop lending or start withdrawing loans from companies if their bankruptcies are imminent? That could prevent the speculated spike. Link to post Share on other sites More sharing options...
Gagaloo911 12,959 Posted December 16, 2014 Share Posted December 16, 2014 Idc so long as I can fill my tank up for $30 or less Not to mention all the road trips I can take now cause of how cheap gas is. :jinglebell: Link to post Share on other sites More sharing options...
ALX 170 Posted December 16, 2014 Share Posted December 16, 2014 I remember everyone said it was because of the upcoming elections in early Nov and I was like lol no Link to post Share on other sites More sharing options...
Economy 52,837 Posted December 16, 2014 Author Share Posted December 16, 2014 I remember everyone said it was because of the upcoming elections in early Nov and I was like lol no ppl like that are so ignorant. they know NOTHING of economy oil companies will lower prices cause of elections? thats so stupid today someone i know said they lowered prices to make ppl spend more on christmas. like seriously? oil companies dont make childrens toys. why on earth would they lower prices to make u spent more on christmas? Link to post Share on other sites More sharing options...
Economy 52,837 Posted December 16, 2014 Author Share Posted December 16, 2014 I like your threads! You deserve much love. What do you think people (government, public, corporations etc.) should do? Would the bank stop lending or start withdrawing loans from companies if their bankruptcies are imminent? That could prevent the speculated spike. well the loans have already been made in the billions and the bonds have already been bought. even if ppl sell the bonds early at a loss to get their money back before risking a default, that would still stabilize the market either way by forcing yields higher even without defaults because so many corporate bonds have been in the enrgy sector, and so much bank lending as well, their defaults would certainly rock the entire financial system the amount of money u save on gas would not even begin to cover the higher mortage payments ud be making if this caused a destabilization in the debt market and general credit rose as a result of course, prices would have to remain this low for some time for many companies to shut down. only the really small and new less efficient companies are at real risk at this time. but if this continues for say 6-12 months, we could start to get into trouble Link to post Share on other sites More sharing options...
Altair 2,003 Posted December 16, 2014 Share Posted December 16, 2014 Lower prices in oil will also impact the environment. which also worries me :( Link to post Share on other sites More sharing options...
Economy 52,837 Posted December 16, 2014 Author Share Posted December 16, 2014 Lower prices in oil will also impact the environment. which also worries me :(oh yeah that too I always forget about the environment :sweat: Link to post Share on other sites More sharing options...
Altair 2,003 Posted December 16, 2014 Share Posted December 16, 2014 oh yeah that too I always forget about the environment :haha: Link to post Share on other sites More sharing options...
Economy 52,837 Posted December 16, 2014 Author Share Posted December 16, 2014 :haha:i know i know i should care more. If i were the worlds dictator we wouldnt have an ecosystem left tbh lmao :sweat: Link to post Share on other sites More sharing options...
hausofmike 127 Posted December 16, 2014 Share Posted December 16, 2014 I hope they go lower tbh Link to post Share on other sites More sharing options...
Economy 52,837 Posted December 16, 2014 Author Share Posted December 16, 2014 I hope they go lower tbhi dont mind a temporary drop. Good to give consumers and manufacturers a bit of a boost I dont want a prolongued slump tho or the north american oil industry will get killed and when prices rebound we willl be stuck importing everything :shrug: Link to post Share on other sites More sharing options...
Better Day 5,766 Posted December 16, 2014 Share Posted December 16, 2014 Economy, I am guessing you're a capitalist (scum). This is one of the many problems with capitalism, the business men only care about the falling oil prices because they are losing money. It shouldn't be like that #GreedySwines Together You And I! Link to post Share on other sites More sharing options...
Mr Josh 3 Posted December 16, 2014 Share Posted December 16, 2014 Economy, I am guessing you're a capitalist (scum). This is one of the many problems with capitalism, the business men only care about the falling oil prices because they are losing money. It shouldn't be like that #GreedySwines Control yourself sweetheart :clausney: Link to post Share on other sites More sharing options...
Economy 52,837 Posted December 16, 2014 Author Share Posted December 16, 2014 Economy, I am guessing you're a capitalist (scum). This is one of the many problems with capitalism, the business men only care about the falling oil prices because they are losing money. It shouldn't be like that #GreedySwines ok i dont own an oil company. im talking about the major down sides it COULD have to the economy if these prices persist for a long period of time. did u not read the OP??? unless ur one of those ppl that has such little knowledge of the economy that u only see things from your point of view (what saves u money etc) and are completely incapable of looking at the effects on the economy as a whole do u have any idea what the major implications of many defaults would be on the bond and credit market if many small oil companies went bankrupt and defaulted on payments? im guessing you probably dont :roll: And for the record, Capitalism has its flaws but so does socialism. dont make me write an essay Link to post Share on other sites More sharing options...
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