{"id":16741,"date":"2016-01-20T14:15:12","date_gmt":"2016-01-20T19:15:12","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16741"},"modified":"2016-01-20T14:15:12","modified_gmt":"2016-01-20T19:15:12","slug":"a-glimpse-of-things-to-come-bankrupt-shale-producers-cant-give-their-assets-away","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16741","title":{"rendered":"A Glimpse Of Things To Come: Bankrupt Shale Producers “Can’t Give Their Assets Away”"},"content":{"rendered":"

A Glimpse Of Things To Come: Bankrupt Shale Producers “Can’t Give Their Assets Away”<\/a><\/h3>\n
Over the course of the last several weeks, we\u2019ve spent quite a bit of time sounding the alarm bells on America\u2019s growing list of bankrupt oil and gas drillers.<\/p>\n
\n

We\u2019ve also been keen to point out that the long list of cash flow negative US producers has only managed to stay in business this long because Wall Street has thus far been willing to plug the sector\u2019s funding gap with cheap financing thanks to ZIRP and investors\u2019 insatiable demand for anything that looks like it might offer some semblance of yield.<\/p>\n

It is not a matter of \u201cif\u201d but rather a matter of \u201cwhen\u201d the entire complex goes under and when that happens, the relatively paltry sums banks have set aside against losses in their energy books will balloon as everyone on Wall Street simultaneously\u00a0pulls a BOK Financial<\/a>.<\/p>\n

Indeed, we\u2019re already hearing the not-so-distant rumblings of this oncoming default freight train as JP Morgan\u00a0raises its net loan loss reserves<\/a>\u00a0for the first time in 22 quarters,\u00a0Wells Fargo discloses<\/a>\u00a0$17 billion in \u201cmostly\u201d junk energy exposure, and Citi\u00a0dodges questions<\/a>\u00a0about the reserves it\u2019s holding against a $58 billion energy book that the bank may or may not be marking to market depending on what the\u00a0Dallas Fed “didn\u2019t” tell banks<\/a>earlier this month.<\/p>\n

M2M or no, higher provisions or not, the end of America\u2019s oil \u201cmiracle\u201d is coming and there\u2019s nothing Wall Street can do to stop it. At this point in the game, no one is going to finance these companies\u2019 cash flow deficits and the fundamentals in the oil market are laughably bad. Storage is overflowing, demand is withering, and supply is, well, \u201cdrowning\u201d us all, to quote the IEA.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A Glimpse Of Things To Come: Bankrupt Shale Producers “Can’t Give Their Assets Away” Over the course of the last several weeks, we\u2019ve spent quite a bit of time sounding the alarm bells on America\u2019s growing list of bankrupt oil and gas drillers. We\u2019ve also been keen to point out that the long list of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2,3],"tags":[11860,1718,4333,3730,200,303,8857,7131,588,1068,846,860,3892,4318],"class_list":["post-16741","post","type-post","status-publish","format-standard","hentry","category-economics","category-energy-2","tag-bank-of-america-bank-of-america","tag-citigroup","tag-crude","tag-dallas-fed","tag-default","tag-fed","tag-funding-gap","tag-jpmorgan-chase","tag-oil","tag-swift","tag-us-shale-oil","tag-wall-street","tag-wells-fargo","tag-zerohedge"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16741","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16741"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16741\/revisions"}],"predecessor-version":[{"id":16742,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16741\/revisions\/16742"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}