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News What's going on with the US/Global economies?

  1. Jan 20, 2016 #1

    Astronuc

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    The Dow 30 are getting hammered during the first three weeks of 2016.

    Code (Text):
    Dec 31, 2015 Close 17425.03

    Jan 20, 2016  Open 15,989.45
                  Low  15,450.56
                Close  15,766.74 Down 249.28(1.56%)
    It was down about 2000 points from the closing on Dec 31, 2015, before recovering about 250 pts this afternoon.

    China is buying less commodities. The world is saturated with oil. There are fewer places to store oil that is produced, and oil prices have plummeted to lows seen in 2003.

    So, all as well and normal. There has to be bargains out there.


    Coal Companies Are Hurting. But the Coal Industry Is Not Dying.
    http://www.slate.com/articles/busin...awks_should_not_be_too_gleeful_about_the.html

    Coal equities are down much more than the demand for coal. Some companies took on too much debt, and subsequently (and perhaps consequently) declared bankruptcy.
     
    Last edited: Jan 20, 2016
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  3. Jan 21, 2016 #2

    Borg

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    I have been watching as many others. The oil stocks are really low right now but, with Iran coming on to the market, they will be headed even lower. I didn't think that I would see $20 oil but it's looking like that will be the bottom. :wideeyed:
     
  4. Jan 21, 2016 #3

    m k

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    I've read that $10 is the bottom.

    China has guite a lump of infra that is not paid yet.
    They are also shifting towards a consumer society.

    Maybe we get our jobs back.
     
  5. Jan 21, 2016 #4
    To sum it up.
    Neoclassical economics or modern capitalism (which is not really based on the original capitalist ideas, btw) is based on permanent growth that never ends. But our planet= resources, number of people and their needs are NOT eternal and cannot increase all the time.
    Inevitable results= current system is doomed to failure and something else needs to be invented.
    I won't even start writing about moral dimensions of the current system that calls itself capitalism.
    The end :)
     
  6. Jan 27, 2016 #5

    Astronuc

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    China shares tumble again, taking 2016 losses to $2 trillion
    http://finance.yahoo.com/news/china-shares-struggle-global-markets-020228777.html

    That's a lot for one month, which is not yet over.

    Ya think?!


    "In the first six months of 2014, $26 billion left China."
    http://finance.yahoo.com/news/not-even-darkest-minds-imagined-192833192.html
     
    Last edited: Jan 27, 2016
  7. Jan 30, 2016 #6
    The China bubble had to pop sometime. Building all those office buildings that stood empty. Those sort of things never end well.

    A photo of a potato sold for one million plus in Silicon Valley. Crash ahead.
     
  8. Jan 31, 2016 #7

    Astronuc

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    For Mining Chiefs, Doomsday Scenarios Could Become Reality
    http://www.msn.com/en-us/money/comp...day-scenarios-could-become-reality/ar-BBoQt5f

    From the commodities side, things are looking somewhat bleak. In addition to a surplus of oil, there is a surplus of iron ore and copper, so some mines are being shutdown and new projects deferred.

    Meanwhile in coal country -
    U.S. Coal Company Alpha Natural Resources Files For Bankruptcy
    http://www.forbes.com/sites/nathanv...iles-for-bankruptcy/#2715e4857a0b6f1aaedb443c

    Coal Companies Are Hurting. But the Coal Industry Is Not Dying
    http://www.slate.com/articles/busin...awks_should_not_be_too_gleeful_about_the.html

    Patriot Coal in August announced a prospective deal whereby the Virginia Conservation Legacy Fund, a nonprofit that works on sustainability issues, would acquire some of Patriot’s West Virginia mines. The fund would keep operating the mines while simultaneously reclaiming and reforesting land. If it could lash together carbon credits it receives for reforestation with coal production, the VCLF says it could create a form of coal that utilities could burn while still complying with new emission standards.

    http://www.conservationlegacyfund.org/ [Broken]

    I've been wondering for a while now if the production of CO2 could be offset by reforestation. It would seem that forestry/lumber companies could encourage reforestation projects especially in heavily harvested areas. It would be slow at first since saplings take time to grow to where they are capturing large quantities of CO2. I often reflect on an oak tree on my property. I was growing in the shadow of a fir tree (likely a squirrel had buried an acorn under the cover of the fir tree) that was knocked down in a storm. Once the oak tree got sun and rain, without competition, its growth took off. Sadly, I had to remove it, since it was too close to the well and garage.
     
    Last edited by a moderator: May 7, 2017
  9. Mar 3, 2016 #8

    Astronuc

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    Natural gas futures for April were trading at $1.64 per million BTUs Thursday, the lowest level since late February 1999.
    https://finance.yahoo.com/news/shale-gale-crushing-natural-gas-192108995.html

    Halliburton is laying off 5000 people (8% of workforce) in latest round. They have laid off 22,000 (25% of workforce) since 2014.
    http://www.cnbc.com/2016/02/25/halliburton-to-cut-5000-jobs-in-new-round-of-layoffs.html

    Looking back to September 2015 - just 6 months ago, it was looking bad then, and it only go worse. Then Halliburton had only laid off 12.5 K. Now it's 22K.
    http://money.cnn.com/2015/09/03/investing/cheap-oil-job-cuts/

    Not a good time to be looking for a job in oil or gas.
     
    Last edited: Mar 3, 2016
  10. Mar 5, 2016 #9

    mheslep

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    Plant some Azolla in the pond. Azolla might have gobbled up some 3000 ppm of CO2 once upon a time.

    https://en.m.wikipedia.org/wiki/Azolla_event
     
    Last edited by a moderator: Mar 5, 2016
  11. Mar 24, 2016 #10
    Stocks go up and down, but the news generally only reports when they're going down, creating the illusion that the market is getting worse and worse.

    For the past few years, the numbers have stayed around the same ballpark.
     
  12. May 17, 2016 #11

    Astronuc

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    US Energy sector deep in debt will struggle to pay interest on debt.

    For most of the last decade, interest payments were in the 10 to 20% of operating income. In 2015, the interest jumped to about 50% of operating income, and in 2016, interest payments have soared to about 86% of operating income.

    Fracking is capital intensive, and the over-production has caused prices to drop, which mean debt is consuming more of the operating income.

    https://finance.yahoo.com/news/oil-debt-interest-payments-122155505.html

    Unless prices recover, or folks refinance, one may expect a surge of bankruptcies in 2017, or perhaps starting in the second half of 2016.
     
  13. May 17, 2016 #12

    mheslep

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    Started.

    http://www.wsj.com/articles/sandridge-energy-files-for-bankruptcy-protection-1463404621

    Oil and gas development is capital intensive in general, but I don't think it is correct any longer to say that fracking shale is more expensive than traditional reservoir exploration.
     
  14. May 17, 2016 #13

    jim hardy

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    I watched a documentary the other day on Rockefeller and his oil empire.Those old guys played a rough game !
    Makes me wonder if the cheap oil is an OPEC ploy to snuff out US competitors .
    Or maybe a joint US-Saudi ploy to bankrupt Putin .

    I bought Peabody Coal on the way down . Stock Tip of the day - watch me and do the opposite.
     
  15. May 17, 2016 #14

    mheslep

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    I don't think there is any need for secret Saudi plan; OPEC was losing huge US market share to US domestic production. Soon the US was going to start exporting crude (and now has done so); the US was already exporting gasoline. So they did what any producer would do, they cut the price (by keeping production high).

    But it's too late. The Saudis will never again export oil to the US at the levels of 10 years ago. Yes many over extended US frackers have or will declare bankruptcy, but the remaining companies have become extraordinarily efficient, tripling the production rate from a well today over one drilled 3 or 4 years or go, while continually lowering the cost to drill. As the price slowly recovers, there will be no lag to increasing production due to the time to explore offshore and build some enormous offshore platform as the past, all subject to blessing from federal regulators. A bankrupt oil company doesn't mean their drilling rigs are necessarily sold for scrap metal, nor their land leases forgotten.
     
  16. May 17, 2016 #15

    SteamKing

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    Rumors of crude oil's demise have been greatly exaggerated.

    While crude hit bottom at about $26 / barrel as recently as February 2016, the price currently has rebounded to $48.31 a barrel for West Texas Intermediate and $49.28 for Brent crude as of May 17, 2016. The general expectation is that crude prices will climb to about $55 a barrel in a year's time. The anticipated $10 per barrel floor was never quite reached.

    http://www.oil-price.net/

    A lot of the drilling equipment and rigs are durable goods which can be stacked until crude prices reach higher levels. Some older rigs are going to be scrapped anyway because it is no longer economical to keep them in operation even if crude prices were higher. Some new rigs which were planned during the last oil price spike will not be built, as the owners cancel construction contracts with the shipyards.

    Other drillers which are in better shape financially can go bargain hunting as companies with high debt accumulations on their books go to sell surplus equipment, either voluntarily or as a result of a bankruptcy auction. One drilling company picked up a 5 year old drill ship at a bankruptcy auction recently for $65 million cash. The vessel was built for an estimated $600-$700 million.

    http://gcaptain.com/ocean-rig-pays-just-65-million-for-ultra-deepwater-drillship-at-auction/

    The Saudis and the rest of OPEC, not to mention independent producers like Russia, are in a major economic jam. They have grown dependent on being able to set and get the price of their crude on the world market, and this has fueled an extravagant lifestyle for those living in the Gulf states which cannot be sustained for long when crude oil prices drop and remain low for an extended period. Other states (Venezuela) squandered their oil revenues in ill-advised forays into setting up a socialist economy, so much so that this particular country has needed to import oil to sustain what industry and utility infrastructure which hasn't been nationalized or shut down completely as their economy shrinks to typically flat-lined socialist growth levels.
     
  17. May 18, 2016 #16

    1oldman2

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    Are you familiar with "The Age of Oil" ? Highly recommended and relevant as well.
    http://www.abc-clio.com/ABC-CLIOCorporate/product.aspx?pc=C1498C
     
  18. May 18, 2016 #17

    russ_watters

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  19. May 18, 2016 #18

    1oldman2

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    It's more concerned with the history of petroleum altogether, fracking does get mentioned but only as an up and coming technology. The book explains in great detail the boom/bust cycles as well as the politics and economics of oil, One other thing that sets it apart from other pieces I've read on petroleum is the authors credentials, he really knows his subject being VP of one of the worlds larger oil companies. Very informative reading. (I would love to get an updated copy though)
     
  20. May 18, 2016 #19
    Not true.
     
  21. May 19, 2016 #20
    why not? Population growth?
     
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