Mederlock posted:could it be... that you're a tragically hip fan? All these articles talking about crude oil prices being $50 (or $46 now) when discussing Canadian oil sands production is a bit like talking about the price of flawless diamond jewelry when discussing the profitability of industrial grinding diamonds. Western Canada Select crude oil prices are much lower than Brent or West Texas Intermediate crude prices. Currently WCS is going for about $38 per barrel.
|
|
# ? Jan 13, 2015 19:10 |
|
|
# ? May 23, 2024 16:56 |
|
quote:Important Bank of Canada speech coming in 20 minutes: Deputy Gov Lane on "Oil Prices and Impact on Economy" http://t.co/E2v6YIMbHo https://twitter.com/ParkinsonGlobe/status/555068242650468353?s=09
|
# ? Jan 13, 2015 19:30 |
|
Coylter posted:Negative interest rates. eXXon posted:Hmm? There's still another 1% that could be cut, and then why not go negative if you can? efu Coylter. Interest rates that are below inflation effectively are negative though. We passed that threshold a while back, too. That's why low interest rates work so well as a stimulus, we are paying people to take and spend money. Actual negative rates make this obvious to the less financially aware, but anybody in the banking biz knows there is a threshold for interest rates where it makes more sense to borrow money than to invest it. Play the markets right (and have enough initial capital) and you can borrow money to invest it.
|
# ? Jan 13, 2015 19:57 |
|
LemonDrizzle posted:Central banks can do QE at will, and if the government wants direct stimulus it could just take a leaf out of dubya's playbook and cut everyone in the country a check. The problem with a dubya style stimulus is Canada is pretty broke and it would make the Harper government look like they failed (which they did).
|
# ? Jan 13, 2015 20:06 |
|
sbaldrick posted:The problem with a dubya style stimulus is Canada is pretty broke and it would make the Harper government look like they failed (which they did). What do you mean by "pretty broke"?
|
# ? Jan 13, 2015 20:33 |
|
LemonDrizzle posted:Central banks can do QE at will, and if the government wants direct stimulus it could just take a leaf out of dubya's playbook and cut everyone in the country a check. It's not "at will" easy when you don't have a reserve currency everybody is interested in owning, no. Then you're just printing buttwipe.
|
# ? Jan 13, 2015 20:43 |
|
Franks Happy Place posted:It's not "at will" easy when you don't have a reserve currency everybody is interested in owning, no. Then you're just printing buttwipe. Except that inflation is super-low which means this is exactly the kind of situation where printing should be able to do some good.
|
# ? Jan 13, 2015 21:22 |
|
Sweden did QE with a population of like ten million, and I can't imagine anyone's using SEK as a reserve currency.
|
# ? Jan 13, 2015 22:50 |
|
Xoidanor posted:Except that inflation is super-low which means this is exactly the kind of situation where printing should be able to do some good. True, especially with oil prices falling, which should reduce inflation even more. The bigger issue is that all of those shiny new Canadian dollars will likely be sticking around in our tiny economic kiddie pool, which leads to... LemonDrizzle posted:Sweden did QE with a population of like ten million, and I can't imagine anyone's using SEK as a reserve currency. I didn't say it was impossible, I just said it's not consequence-free. See: the massive Swedish housing/credit bubble. The problem with QE in a non-reserve currency is that all of those dollars won't leave to go sit in some nice Saudi guy's vault. Instead they stick around the domestic economy and turn into a Sudbury McMansion. Still better than deflation (I'm not some Paulite dipshit), but, again, not consequence-free.
|
# ? Jan 13, 2015 23:34 |
|
|
# ? Jan 14, 2015 00:07 |
|
https://twitter.com/dbcurren/status/555110122880778242?s=09quote:
|
# ? Jan 14, 2015 01:25 |
|
Cultural Imperial posted:What do you mean by "pretty broke"? I mean the government hasn't redone the budget since the drop in oil prices, maybe someone in finance or the BoC has real numbers but I'm guessing at least 15 billion down from the last restatment
|
# ? Jan 14, 2015 01:44 |
|
Suncor to layoff 1000 workers and start a hiring freeze for certain departments. The 2015 capital budget also got a 1 billion dollar cut http://www.cbc.ca/news/business/sun..._medium=twitter also lol: etalian fucked around with this message at 02:10 on Jan 14, 2015 |
# ? Jan 14, 2015 02:08 |
|
Adding to bank of Canada chat http://business.financialpost.com/2015/01/13/blame-oil-ottawas-promised-1-6b-surplus-to-morph-into-deficit-for-the-next-two-years-td-says/ quote:
Here's my tool to respond namaste friends fucked around with this message at 02:20 on Jan 14, 2015 |
# ? Jan 14, 2015 02:16 |
|
It's why having a majority of your country's economy focused in a cyclical industry is always good idea.
|
# ? Jan 14, 2015 02:29 |
|
Am I alone in feeling like economic recovery is a carrot on a stick, which we'll still be seeing used to justify garbage economic twenty years from now? :/
|
# ? Jan 14, 2015 02:46 |
|
I hope the economic collapse will lead to creation of Canadian mail order brides service. Much better than russian option since they like hockey, have western university education and don't turn into Baba Yagu after 30.
|
# ? Jan 14, 2015 02:51 |
|
etalian posted:Baba Yagu after 30. Lol
|
# ? Jan 14, 2015 03:48 |
|
It's like the price of being hotter than most of the women on the planet is that it's all front loaded in their 20s. The western university education sucks compared to the Russian one. I watched a Latvian Russian come into my university and completely toast the entire program Summa Cum Laude. Then she went off and passed all 3 CFA exams on the first try, got an MBA and now works for a private equity firm making 100k+ a year.
|
# ? Jan 14, 2015 03:55 |
|
Alberta is going to go into recession kicking and screaming...quote:Alberta Premier Jim Prentice says he disagrees with a new Conference Board of Canada report that says Alberta faces the possibility of slipping into a recession this year because of the drop in oil prices. Alberta has a rock-solid economy.
|
# ? Jan 14, 2015 04:05 |
|
I also wonder how long the oil price bust will last? Given the lethargic performance in the world economy especially in the Eurozone/emerging markets, it's not like their will be explosive growth and demand over the next few years.
|
# ? Jan 14, 2015 04:14 |
|
etalian posted:I also wonder how long the oil price bust will last? I think the point is to starve out the tar sands and the newer upstarts in russia etc. It will be a while.
|
# ? Jan 14, 2015 04:23 |
|
Wow, PE and you only make 100k. That right there is why we need to burn Canada down.
|
# ? Jan 14, 2015 04:23 |
|
Whiteycar posted:I think the point is to starve out the tar sands and the newer upstarts in russia etc. It wasn't so much a cunning Saudi scheme, as rage quit and also admitting that OPEC is a hilariously ineffective cartel. The much bigger reason is also how the extraction costs decrease over time due to better technology or how the commodity bubble led to a big oversupply situation.
|
# ? Jan 14, 2015 04:30 |
|
etalian posted:also lol:
|
# ? Jan 14, 2015 04:33 |
|
etalian posted:It wasn't so much a cunning Saudi scheme, as rage quit and also admitting that OPEC is a hilariously ineffective cartel. It appears I have more reading to do. drat commodities markets!
|
# ? Jan 14, 2015 04:33 |
|
THC posted:Low vacancy and high rent. Why am I not feeling the urge to move to Alberta I like low vacancy as a positive; when Montreal had some of the lowest vacancy in the country, it was rightly called a housing crisis.
|
# ? Jan 14, 2015 04:37 |
|
Whiteycar posted:It appears I have more reading to do. This is good fly on the wall short interview from the Saudi perspective: http://www.usatoday.com/story/money/columnist/bartiromo/2015/01/11/bartiromo-saudi-prince-alwaleed-oil-100-barrel/21484911/ Basically it not like oil producing country like Saudi Arabia would get excited over a 50% drop in oil prices. OPEC was also never a effective price point controlling organization due to bickering and backstabbing between members quote:Q: Should the Saudis cut production if they get an agreement with other oil producing countries to take oil off the market?
|
# ? Jan 14, 2015 04:37 |
|
etalian posted:It wasn't so much a cunning Saudi scheme, as rage quit and also admitting that OPEC is a hilariously ineffective cartel. Yo if you guys are really interested in oil, check this poo poo out: http://ftalphaville.ft.com/2015/01/12/2084942/a-capital-contango-and-why-oil-storage-economics-may-be-dead/ TL;DR, back in 2008, motherufckers with shitloads of money lying around were making money off of renting out oil tankers to hold oil while prices...um...tanked. This is called contango. Now it looks like it's so easy to ramp up the extraction of oil, the same motherfuckers are hoarding money because it's not worth it to store oil. I have no idea what this means!!!
|
# ? Jan 14, 2015 04:42 |
|
It's why I don't invest in commodities.
|
# ? Jan 14, 2015 04:55 |
|
Cultural Imperial posted:Yo if you guys are really interested in oil, check this poo poo out: I was going to login to ask how everyone is enjoying the first wave of a balance sheet recession. And if any goons are starting to buy property, or have been laid off yet. On cargo trading: - Futures are the process when you place a bid for something, in this case an oil cargo, and your promise to deliver it. Think like anything, be it a 10bux or a gif. you go to the goon market, and offer to make a funny gif for someone. That person shows up, and you promise to deliver that gif to him by XYZ date. - That person now has a future contract to be delivered a Gif, and you will get a forum upgrade for 10 bux. So we would say in futures land, you are expected to deliver a cargo of lolcats, for 10bux at the location of the SA mart, within 10 days. Because we're keeping the math simple for goons, who may have failed all math and are starving communist artists who post in D&D all day. - Now lets say you really can't draw, or dont want to risk a full day drawing a lolcat gif, so you notice you can subcontract out the drawing of the gif to someone who is willing to draw it, in 1 day, and does it for 5 bux. So in futures world, we would call this an arbritage, since you can take a contract for 10 bux, hire someone to do it for you for 5 bux, and the counterparty would be none the wiser when he accepts delivery of his lolcat gif for his SA avatar, and you not only pocked a 5 bux profit, but you also had 9 days to also pocket profits, since that 1 schmuck who is drawing lolcats for 5 bux a day, can work for 9 days, and he thinks he's getting really good cash flow by you delivering him steady work. - SO: your storage trade would be to arbitrage the time to deliver, by taking advantage of production and storage costs, and then waiting for the price of a same day delivery (5 bux) to approach that of the market price (10 bux). - And voila, you are now a billion dollar oil fund manager. - Eventually others recognize that 1.) they can get lolcat gifs for 1 day and 5 bux, or the 2) artists realize they are working too hard and demand a raise. In either case, either the market demands faster delivery and the price comes down to below 5bux as more people undercut the 10bux futures trader, or the more likely case the artists working and selling their product for 5 bux per gif. per day recognize they are being screwed by the market, and simply slow down their own production, which forces less delivery to the trader, which in our simplified model; will lead him to be stopped out of the market, at 1 picture for 10 bux, every 10 days; and the market moves back into normal backwardation, where supply takes care of itself, and normal cost producers are given their true, time value adjusted rate of return (100% of the profits and a full value capture; much to the bitter salty tears of traders and socialists everywhere). This is critically important, because not just oil markets have supply backlogs. Copper and Iron ore for example have been tripping balls on so much inventory, they were using it as a barter method in China for the last 3 years, since Copper was a better inflation proxy for industrials than the Chinese currency which had all sorts of loan and inflation concerns due to bad central banking in China. If you were around in the 1990's, or you google some old sperglord called Phil Verleger, many of the huge commodity funds were started in the 90's by simply buying oil, sitting on it offshore for 3 years and then waiting around until the price went up again. Because lets be honest, with 40% of the US energy companies now trading at twice their equity value (meaning if the debt was called today, or next month, there literally is not enough assets to pay out the bond holders), and Norway's Soverign Wealth Fund likely going bust, much like everyone feared the Alberta Heritage Fund would; suddenly we will see a snapback to 80/bbl crude. Thats also not discounting a horrible and very violent revolt and total bloodbath in Venezuela, Iran, Nigeria or Russia. All countries which are about 4 months away from a total 1989 style and 1998 style currency crisis. So now that you know, go forth and buy some oil from Suncor, dig a hole in your backyard and bury it next to your gold bars and anime doll. Who knows, you too may be an oil baron in 10 years. Or more. In the meantime, I remember growing up, in the 1994 oil crash a bumper sticker was very popular. It was a sendup to the "let the bastards freeze" and read: "thanks for working in Alberta, dont let the door hit your rear end on the way out you ungrateful PEI Fucks". Prentice should print these out and give every Albertan 10 of them starting 2016, right before the transfer payments which eastern Canada, Ontario and Quebec rely on start to reverse and Alberta becomes a net recipient province. I bet Winn and the liberal elite will just love that when Alberta starts claiming 4.1 billion in transfer special drawing rights on Bell Canada and the union pensions. Hal_2005 fucked around with this message at 07:36 on Jan 14, 2015 |
# ? Jan 14, 2015 07:25 |
|
lmao when add up all the capital cost cuts for canadian energy companies it's already billions of dollars.
|
# ? Jan 14, 2015 07:34 |
|
etalian posted:lmao when add up all the capital cost cuts for canadian energy companies it's already billions of dollars. expect it to double by the spring to well over 31 billion. It's already around 108 billion for north america, and the oil companies and sell side research shops are only pricing in the drop from 105 to 74 as of Monday. You all still have yet to enjoy the plunge from 75/74 (with currency) all the way down to 40/bbl (tonight); plus the currency move from 105 CAD, to 79 as of tonight, and 73 which is what the futures are pricing in for 2016. Enjoy all the savings windfall from 'cheap oil' which is going to come from a stealth 30% hike in everything imported from the USA. That includes poo poo purchased off Amazon and consumer goods, like Mountain Dew. Oh, and I should mention, a good follow up to this thread would be someone to research the windfall carbon tax Obama is thinking of making mandatory for all NAFTA; since clearly you all are not spending your new found wealth fast enough on the new found savings from cheap gasoline fast enough on US consumer poo poo at Target. This is 100% serious, sadly.
|
# ? Jan 14, 2015 07:39 |
|
Hal, what's an example of one of these us energy companies which aren't worth the money theyre printed on?
|
# ? Jan 14, 2015 07:44 |
|
Yeah weaker currency can stimulate exports but on the flip side all imported foreign products become more expensive in terms of local buying power. Will probably have to wait a few months until the real fun occurs.
|
# ? Jan 14, 2015 07:45 |
|
If the Saudis wield so much power in the oil market, and have the ability to price out the oil sands and shale operations - why wait till late 2014 and not nip it in the bud way sooner?
|
# ? Jan 14, 2015 07:47 |
|
Cultural Imperial posted:Hal, what's an example of one of these us energy companies which aren't worth the money theyre printed on? Well, this is a very easy question to ask and by observing the total debt vs the fully diluted enterprise value of the company, you can come to that answer on your own. I can say that if you check out the Permian, the Tuscaloosa Marine, or some Canadian companies in the Cardium and Bakken, then you may be able to imply that for yourself. Giving out specific companies is something I can't do, for the same reason if you watch BNN or CNBC you are not allowed to direct people (see the other thread). But literally a simple google at companies which have fallen more than 87% of their market cap since October should figure that out for you. Many companies defer their layoffs until the next year, because as I explained earlier in the thread, you don't want to report huge end of year tax losses, or pay out the severance packages which will affect your annual credit reviews or cash flow metrics for credit syndicate reviews. See below why this is important. Peak layoff season for the oil & gas world is Feb to April, during the "spring breakup". For downstream, everything from the pipe fitters from PEI to the losers pumping gas in Carstairs Alberta? Those guys get the axe around June, because thats when the non-farm payrolls need to show a "seasonally adjusted" layoffs, which enable you to claim help from the federal government for layoffs due to downturns in seasonal needs. Like rig work and fluffing beds. Since many of these companies on an accounting profits basis are profitable, but on a cash flow basis, just like refineries and airlines are hopelessly unable to meet their cash flow needs, and are thus, cash flow bankrupt; working from their credit syndicate or as we say, net working capital lines. Think like goons who live credit card payment to card payment, and sometimes they get an equity infusion (a handout) from mom & dad, only mom & dad are investors with a dilutive equity raise and/or stock dividend at negative production per share growth. Hope that helps Hal_2005 fucked around with this message at 07:52 on Jan 14, 2015 |
# ? Jan 14, 2015 07:48 |
|
Hal_2005 posted:Well, this is a very easy question to ask and by observing the total debt vs the fully diluted enterprise value of the company, you can come to that answer on your own. I can say that if you check out the Permian, the Tuscaloosa Marine, or some Canadian companies in the Cardium and Bakken, then you may be able to imply that for yourself. Giving out specific companies is something I can't do, for the same reason if you watch BNN or CNBC you are not allowed to direct people (see the other thread). But literally a simple google at companies which have fallen more than 87% of their market cap since October should figure that out for you. Many companies defer their layoffs until the next year, because as I explained earlier in the thread, you don't want to report huge end of year tax losses, or pay out the severance packages which will affect your annual credit reviews or cash flow metrics for credit syndicate reviews. See below why this is important. Peak layoff season for the oil & gas world is Feb to April, during the "spring breakup". For downstream, everything from the pipe fitters from PEI to the losers pumping gas in Carstairs Alberta? Those guys get the axe around June, because thats when the non-farm payrolls need to show a "seasonally adjusted" layoffs, which enable you to claim help from the federal government for layoffs due to downturns in seasonal needs. Like rig work and fluffing beds. I think I sort of understand now. Thanks. Love your posts. <3
|
# ? Jan 14, 2015 07:53 |
|
Lexicon posted:If the Saudis wield so much power in the oil market, and have the ability to price out the oil sands and shale operations - why wait till late 2014 and not nip it in the bud way sooner? Maybe it's got something to do with how they manage their own cash flow?
|
# ? Jan 14, 2015 07:55 |
|
|
# ? May 23, 2024 16:56 |
|
Hal_2005 posted:Norway's Soverign Wealth Fund likely going bust...
|
# ? Jan 14, 2015 10:11 |