19 January 2016

Financial Crisis 2016

9 Shevat 5776

And oil is at the heart of it. Oil - that resource that endowed Yishmael with so much power.

The Oil Crash Of 2016 Has The Big Banks Running Scared

Last time around it was subprime mortgages, but this time it is oil that is playing a starring role in a global financial crisis. Since the start of 2015, 42 North American oil companies have filed for bankruptcy, 130,000 good paying energy jobs have been lost in the United States, and at this point 50 percent of all energy junk bonds are “distressed” according to Standard & Poor’s. As you will see below, some of the big banks have a tremendous amount of loan exposure to the energy industry, and now they are bracing for big losses. And the longer the price of oil stays this low, the worse the carnage is going to get.

...the price of oil does not need to go down one penny more to have a catastrophic impact on global financial markets. If it just stays right here, we will see an endless parade of layoffs, energy company bankruptcies and debt defaults. Without any change, junk bonds will continue to crash and financial institutions will continue to go down like dominoes.

We are already experiencing a major disaster.

...All over the planet, big banks are absolutely teeming with bad loans. And to be honest, the big banks in the U.S. are probably in better shape than some of the major banks in Europe and Asia. But once the dominoes start to fall, very few financial institutions are going to escape unscathed.

...However, just like with the last financial crisis, you never quite know where the next “explosion” is going to happen next.

But one thing is for sure – the financial crisis that began during the second half of 2015 is raging out of control, and the pain that we have seen so far is just the beginning.

Related: With wave of Iranian oil imminent, a shudder in Saudi Arabia


  1. Homework: http://oilprice.com/Energy/Oil-Prices/Did-The-Saudis-And-The-US-Collude-In-Dropping-Oil-Prices.html

  2. The "pain" of all this is, like others we are experiencing, is a birth pang. Europe and Asia have made greater strides to get off the global oil addiction. Not so North and South America. The mess that will ensue will be the messy reality of the transition from overvaluing a resource that would have run out within 50 years anyway. And, as always, the working poor will pay a much bigger price than the rich. The wealth propped up by printing money and over-valued oil had to come to an end. The question I have is, will there be a new bubble after this one, or will this be the final bursting of the capitalistic/imperialistic bubble before we have an authentic "economy" not based on private accumulation of wealth but on participation and achievement for the sake of global social welfare. Will we remake our values to encourage mass participation in production and distribution of material goods and services for the well-being of all as only one way we serve the Creator with justice and compassion.

  3. Erev Tov
    Not exactly the subject but connected to your previous posts about Planet X Etc. Fresh news: the approach seems to start to be official.
    Bessorot Tovot
    Itzhak. Yerushalaim.

    1. That's tremendous Itzhak! Thanks for bringing it to my attention. This deserves its own post.