Down the Ratholes of the Future
The new year now upon us has brought out the usual quota of predictions about what 2016 has in store, and I propose as usual to make my own contribution to that theme. I’ve noted more than once in the past that people who make predictions about the future really ought to glance back at those predictions from time to time and check how well they’re doing. With that in mind, before we go on to 2016, I’d like to take a moment to look back over the predictions I made last year. My post on the subject covered a lot of territory in the course of offering those predictions, and I’ve trimmed down the discussion a bit here for the sake of readability; those who want to read the whole thing as originally published will find it here. In summarized form, though, this is what I predicted:
“The first and most obvious [thing to expect] is the headlong collapse of the fracking bubble […] Wall Street has been using the fracking industry in all the same ways it used the real estate industry in the runup to the 2008 crash, churning out what we still laughably call “securities” on the back of a rapidly inflating speculative bubble. As the slumping price of oil kicks the props out from under the fracking boom, the vast majority of that paper—the junk bonds issued by fracking-industry firms, the securitized loans those same firms used to make up for the fact that they lost money every single quarter, the chopped and packaged shale leases, the volumetric production agreements, and all the rest of it—will revert to its actual value, which in most cases approximates pretty closely to zero.
…click on the above link to read the rest of the article…
