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US banks lend frackers over $200 billion. https://www.nytimes.com/2018/09/01/opinion/the-next-financial-crisis-lurks-underground.html https://www.nytimes.com/20

US banks lend frackers over $200 billion. https://www.nytimes.com/2018/09/01/opinion/the-next-financial-crisis-lurks-underground.html https://www.nytimes.com/2018/09/01/opinion/the-next-financia... They were squeaking by oil fell from $110 to $40 in 2014. Many will go belly soon triggering bank failures.

enraged_camel 7y ago
Tomorrow morning will be a bloodbath for US securities.
- csomar 7y ago
  Nikkei already down more than %5.
- MR4D 7y ago
  Tomorrow??? The S&P futures already stopped out limit down tonight! ("limit down” = 5% down)
InTheArena 7y ago
I think this statement dramatically underestimates the scope and the size and the banking industry, as well as how much debt banks keep on their books. 200 billion will be a ton of pain in localized areas for banks, but they will not be writing off the whole loan, and will have assets - the same oil fields - come over. This happens every ten year or so. On the other hand, if this oil war really does do enough damage to hurt shale, it will also bankrupt Saudi Arabia and Russia. Given both of their recent actions on the world stage, even a 200 billion dollar write off might not be the worst thing in the world.
- jeffdavis 7y ago
  Marginal costs are lower for Aramco, right?
jdhn 7y ago
Honestly, they'll probably do some sort of term extension, or even suspension of payments in order to avoid any sort of default. Plus, there was a fair amount of fracking consolidation around 2014 due to the price crash.
lawrenceyan 7y ago
That doesn't seem like much of an issue though. $200 billion isn't very much if you look at the actual size of the banking industry. I think the real problem here is more the issue of Russia and myriad of Middle Eastern countries being so dependent on their oil exports in order to stay afloat economically.
nickik 7y ago
No it want. A supply shock to one industry even a big one does not lead to banking failures. The fracking industry is incredibly dynamic and can operate cheaper incredibly fast, and if price rise can start producing again quickly as well.

enraged_camel 7y ago

Tomorrow morning will be a bloodbath for US securities.

csomar 7y ago
Nikkei already down more than %5.
MR4D 7y ago
Tomorrow??? The S&P futures already stopped out limit down tonight! ("limit down” = 5% down)

InTheArena 7y ago

I think this statement dramatically underestimates the scope and the size and the banking industry, as well as how much debt banks keep on their books. 200 billion will be a ton of pain in localized areas for banks, but they will not be writing off the whole loan, and will have assets - the same oil fields - come over. This happens every ten year or so. On the other hand, if this oil war really does do enough damage to hurt shale, it will also bankrupt Saudi Arabia and Russia. Given both of their recent actions on the world stage, even a 200 billion dollar write off might not be the worst thing in the world.

jeffdavis 7y ago
Marginal costs are lower for Aramco, right?

jdhn 7y ago

Honestly, they'll probably do some sort of term extension, or even suspension of payments in order to avoid any sort of default. Plus, there was a fair amount of fracking consolidation around 2014 due to the price crash.

lawrenceyan 7y ago

That doesn't seem like much of an issue though. $200 billion isn't very much if you look at the actual size of the banking industry. I think the real problem here is more the issue of Russia and myriad of Middle Eastern countries being so dependent on their oil exports in order to stay afloat economically.

nickik 7y ago

No it want. A supply shock to one industry even a big one does not lead to banking failures. The fracking industry is incredibly dynamic and can operate cheaper incredibly fast, and if price rise can start producing again quickly as well.