Could Plummeting Oil Prices Spell Disaster For Banks?

Could rapidly falling oil prices trigger a nightmare scenario for the commodity derivatives market?  The big Wall Street banks did not expect plunging home prices to cause a mortgage-backed securities implosion back in 2008, and their models did not anticipate a decline in the price of oil by more than 40 dollars in less than six months this time either.  If the price of oil stays at this level or goes down even more, someone out there is going to have to absorb some absolutely massive losses.  In some cases, the losses will be absorbed by oil producers, but many of the big players in the industry have already locked in high prices for their oil next year through derivatives contracts.  The companies enter into these derivatives contracts for a couple of reasons.  Number one, many lenders do not want to give them any money unless they can show that they have locked in a price for their oil that is higher than the cost of production.  Secondly, derivatives contracts protect the profits of oil producers from dramatic swings in the marketplace.  These dramatic swings rarely happen, but when they do they can be absolutely crippling.  So the oil companies that have locked in high prices for their oil in 2015 and 2016 are feeling pretty good right about now.  But who is on the other end of those contracts?  In many cases, it is the big Wall Street banks, and if the price of oil does not rebound substantially they could be facing absolutely colossal losses.

It has been estimated that the six largest “too big to fail” banks control$3.9 trillion in commodity derivatives contracts.  And a very large chunk of that amount is made up of oil derivatives.

By the middle of next year, we could be facing a situation where many of these oil producers have locked in a price of 90 or 100 dollars a barrel on their oil but the price has fallen to about 50 dollars a barrel.

In such a case, the losses for those on the wrong end of the derivatives contracts would be astronomical.

At this point, some of the biggest players in the shale oil industry have already locked in high prices for most of their oil for the coming year.  The following is an excerpt from a recent article by Ambrose Evans-Pritchard

US producers have locked in higher prices through derivatives contracts. Noble Energy and Devon Energy have both hedged over three-quarters of their output for 2015.

Pioneer Natural Resources said it has options through 2016 covering two- thirds of its likely production.

So they are protected to a very large degree.  It is those that are on the losing end of those contracts that are going to get burned.

Of course not all shale oil producers protected themselves.  Those that didn’t are in danger of going under.

For example, Continental Resources cashed out approximately 4 billion dollars in hedges about a month ago in a gamble that oil prices would go back up.  Instead, they just kept falling, so now this company is likely headed for some rough financial times…

Continental Resources (CLR.N), the pioneering U.S. driller that bet big on North Dakota’s Bakken shale patch when its rivals were looking abroad, is once again flying in the face of convention: cashing out some $4 billion worth of hedges in a huge gamble that oil prices will rebound.

Late on Tuesday, the company run by Harold Hamm, the Oklahoma wildcatter who once sued OPEC, said it had opted to take profits on more than 31 million barrels worth of U.S. and Brent crude oil hedges for 2015 and 2016, plus as much as 8 million barrels’ worth of outstanding positions over the rest of 2014, netting a $433 million extra profit for the fourth quarter. Based on its third quarter production of about 128,000 barrels per day (bpd) of crude, its hedges for next year would have covered nearly two-thirds of its oil production.

Oops.

When things are nice and stable, the derivatives marketplace works quite well most of the time.

But when there is a “black swan event” such as a dramatic swing in the price of oil, it can create really big winners and really big losers.

And no matter how complicated these derivatives become, and no matter how many times you transfer risk, you can never make these bets truly safe.  The following is from a recent article by Charles Hugh Smith

Financialization is always based on the presumption that risk can be cancelled out by hedging bets made with counterparties. This sounds appealing, but as I have noted many times, risk cannot be disappeared, it can only be masked or transferred to others.

Relying on counterparties to pay out cannot make risk vanish; it only masks the risk of default by transferring the risk to counterparties, who then transfer it to still other counterparties, and so on.
This illusory vanishing act hasn’t made risk disappear: rather, it has set up a line of dominoes waiting for one domino to topple. This one domino will proceed to take down the entire line of financial dominoes.
The 35% drop in the price of oil is the first domino. All the supposedly safe, low-risk loans and bets placed on oil, made with the supreme confidence that oil would continue to trade in a band around $100/barrel, are now revealed as high-risk.

In recent years, Wall Street has been transformed into the largest casino in the history of the world.

Most of the time the big banks are very careful to make sure that they come out on top, but this time their house of cards may come toppling down on top of them.

If you think that this is good news, you should keep in mind that if they collapse it virtually guarantees a full-blown economic meltdown.  The following is an extended excerpt from one of my previous articles

—–

For those looking forward to the day when these mammoth banks will collapse, you need to keep in mind that when they do go down the entire system is going to utterly fall apart.

At this point our economic system is so completely dependent on these banks that there is no way that it can function without them.

It is like a patient with an extremely advanced case of cancer.

Doctors can try to kill the cancer, but it is almost inevitable that the patient will die in the process.

The same thing could be said about our relationship with the “too big to fail” banks.  If they fail, so do the rest of us.

We were told that something would be done about the “too big to fail” problem after the last crisis, but it never happened.

In fact, as I have written about previously, the “too big to fail” banks have collectively gotten 37 percent larger since the last recession.

At this point, the five largest banks in the country account for 42 percent of all loans in the United States, and the six largest banks control 67 percent of all banking assets.

If those banks were to disappear tomorrow, we would not have much of an economy left.

—-

Our entire economy is based on the flow of credit.  And all of that debt comes from the banks.  That is why it has been so dangerous for us to become so deeply dependent on them.  Without their loans, the entire country could soon resemble White Flint Mall near Washington D.C….

It was once a hubbub of activity, where shoppers would snap up seasonal steals and teens would hang out to ‘look cool’.

But now White Flint Mall in Bethesda, Maryland – which opened its doors in March 1977 – looks like a modern-day mausoleum with just two tenants remaining.

Photographs taken inside the 874,000-square-foot complex show spotless faux marble floors, empty escalators and stationary elevators.

Only a couple of cars can be seen in the parking lot, where well-tended shrubbery appears to be the only thing alive.

I keep on saying it, and I will keep on saying it until it happens.  We are heading for a derivatives crisis unlike anything that we have ever seen.  It is going to make the financial meltdown of 2008 look like a walk in the park.

Our politicians promised that they would do something about the “too big to fail” banks and the out of control gambling on Wall Street, but they didn’t.

Now a day of reckoning is rapidly approaching, and it is going to horrify the entire planet.

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37 Comments

  1. if you don’t want to believe what you googled that i told you about (The truth) that’s not my problem my friend, I will just chalk it up to blue colored glasses you have on. Have a nice day

  2. WHEN YOU GOOGLE SOMETHING, AND STORY OR DATA RELATED TO WHATEVER YOU ARE LOOKING FOR WILL COME UP…. EVEN IF IT IS TOTAL RIGHT WING BALONEY! So…. it is best to google up a number of stories and sets of data relevant to your search… AND THEN WEIGH ALL THE INFORMATION YOU CAN FIND!!! If you right wingers did THAT, you would discover that most of the garbage you believe in just ain’t true… or is merely a big ball of lies wrapped around some small grain of truth…. or deliberately misinterpreted facts. NO DOUBT DEMOCRATS BLUNDERED IN THEIR HANDLING OF THE WHOLE OIL CRASH AND HOUSING MARKET CRASH GENERATED CRISIS… but then, pretty much EVERYONE DID!!! If I had ben able to clearly se what was happening, I could have made a fortune shorting the stock market back while Bush was sabotaging the US economic system…. and so could all of those Democrats you like to bash… BUT THEY DIDN’T, BECAUSE THEY HAD NO IDEA WHAT WAS HAPPENING, OR WHY!!! But a lot of Republicans knew,,, because they were in on the whole big SCAM!!!

  3. 1st you need to read what i said better! SECOND GOOGLE WHAT YOU DON’T BELIEVE IN MY FRIEND AND READ FOR YOURSELF

  4. YOU RIGHT WINGERS WILL BELIEVE WHATEVER YOUR MASTERS TELL YOU, WON’T YOU… EVEN WHEN THERE IS NO TRUTH WHATSOEVER TO IT!!! JUST FOR AN EXAMPLE…. HOW COULD BUSH TRY TO CHANGE AN ACT… AND FAIL… WHEN HIS OWN PARTY CONTROLLED BOTH HOUSES OF CONGRESS FOR THE FIRST 6 OF HIS 8 YEARS IN OFFICE… AND THE 2 YEARS THAT DEMOCRATS CONTROLLED CONGRESS WAS AFTER THE SUB PRIME CRISIS STARTED!!! How do you explain THAT??? Oh yeah… with even more right wing lies and baloney!!!

  5. The liar loans you are talking about are called sub-prime and Franks (who over seen Freddy Mac, And Fanny May) was pushing them along with other progressives to people that could not repay them. The law that gave them the extra push was the Community Reinvestment Act. That Act was changed while slick Willy (Bill Clinton) was in office to make it easier to sue if a non white person did not get a loan. The bill signed in to law by Clinton.
    Bush Jr. tried three times to change that Act, was called Racist, by both the press and the Demacraps/progressives, in other words he tried to stop what was later called the great recession. Bush Jr. was just the president holding the bag at the time. So what Brylo Betto was right on what he said for the most part.
    Post note: Obama when he was playing the part of a Lawler he
    and the law firm he was working for sued some banks using the Community Reinvestment Act, forced those banks to give
    sub-prime loans to people that the banks knew could not repay, he got a cool $500,000 for the lawyers fee when he won the case. So Demacraps are very much in the witch’s brew that caused it.

  6. YOU OBVIOUSLY HAVE NOT GOT A CLUE ABOUT WHAT SOCIALISM ACTUALLY IS!!! READ THIS, THEN GO HIDE IN SHAME BECAUSE OF YOUR ABYSMAL IGNORANCE AND BLATANT STUPIDITY… AND BECAUSE OF YOUR DEEP HATRED OF AMERICA AND ITS PEOPLE!!!
    Eight myths about socialism—and their answers

    Over the last few years, the word socialism has become more and more common. Usually, it’s used in an extremely negative way and in almost all situations the politician or commentator uttering the word either has no idea what it means or is being intentionally misleading. We publish the following to set the record straight.

    Myth #1: Socialists want to take away your property

    This myth confuses private property with personal property. When socialists talk about the abolition of private property, they are referring to the socialization of the means of production—the resources and equipment that create wealth. Working people do not own this type of property—which is why we have to work to survive.

    Right now, the wealth of the 2,300 billionaires is greater than that of the 5 billion poorest people on the planet. In order to provide everyone with more, that wealth must be commonly owned, and not the property of those few capitalists.

    Socialists have no interest in taking away one’s home, car or individual items intended for personal use. In reality, as the foreclosure crisis has shown, under capitalism the banks own most of this property as well—and will take it away as they please.

    Myth #2: Socialists are against democracy and for a dictatorship

    The two-party “democratic” system under capitalism is in fact a dictatorship of the rich. Under it, working people create all the wealth, but capitalists—who own the corporations and banks—have all the economic power and use it to control politics. That fact never changes, even if we have the right to vote. We get to vote on who will oppress us next, while all the important decisions are made in executive boardrooms.

    Under socialism, society’s vast resources cannot be privately hoarded. They are used and distributed according to a plan that the working class and its organizations decide. Because wealth will not be concentrated in the hands of a tiny elite, it creates the basis for genuine democracy — real “rule of the people” — for the first time.

    Historically, there have been various political forms to defend the rule of the working class. In U.S. schools, they teach us that the Soviet Union, China and Cuba are evil dictatorships because of their single-party systems. But we never learn that they developed such governments to prevent counter-revolutions that would have brought back the dictatorship of the rich.

    Myth #3: Under socialism, there is no incentive to work

    Socialism rewards hard work, while under capitalism the richest people are the ones who do no work at all. In a socialist society, the working class controls the means of production and the fruits of its own labor and therefore has a real stake in the realization of its full capacity to produce. The main incentive to work under capitalism is the threat of being fired and starvation.

    Under socialism, a person is paid according to the work they do. Under capitalism, the least productive members of society—the bankers and CEOs—grow obscenely wealthy while working class people live paycheck to paycheck.

    Myth #4: Socialism is against human nature

    Human “nature” changes depending on the type of society you are living in. Marx explained that the ruling ideas and behaviors of a society are those of its ruling class. We are taught to believe that humans are naturally violent, exploitative and selfish because those are the principles on which our society is built. Looking through human history, including thousands of years of communal, class-less societies, we can see that another “nature” exists. Even in our present society, we can see in our daily lives tremendous examples of shared sacrifice and solidarity—even if those don’t make the evening news.

    Myth #5: Socialists don’t respect freedom of religion

    Socialists consider religion a private matter, and actively fight against discrimination on the basis of religion.

    Marx never called for the banning of religion. He pointed out how historically religious institutions have discouraged people from fighting against oppression. They instruct poor and working people to wait instead for a better after-life.

    There are many examples, however, of movements that have used religious ideology while struggling for a better world. While many socialists are atheists, the PSL whole-heartedly welcomes people of all faith backgrounds that want to fight to make that world a reality.

    Myth #6: Socialists only care about class oppression—not other forms of oppression

    PSL members are tireless fighters against all forms of oppression. We believe that racism, sexism, anti-immigrant bigotry, homophobia and all other kinds of discrimination divide poor and working people and must be fought if we ever want to move forward. We put ourselves in that revolutionary tradition of socialists who take up the banners of Black liberation, women’s liberation and LGBT liberation.

    Myth #7: Socialism collapsed when the Soviet Union collapsed

    Socialism as a concept is not dependent on any single state. It will exist as long as the exploitative system of capitalism exists. It existed before the Soviet Union and therefore exists after it. It is a theory of how to organize society in a way that eliminates scarcity and puts the producers in control.

    A few governments do exist that are trying to build socialism. Cuba, a country that had been impoverished by colonialism, is an example of what can be accomplished when the resources of society are used to meet the needs of the people, as opposed to enriching the capitalist class.

    The Soviet Union was the first experiment of poor and working people taking power. Despite its own contradictions, it provided universal health care, free education, the right to a job, free childcare, as well as guaranteed maternity leave and vacation days for all workers. Since the Soviet Union’s overthrow, life expectancy and living conditions have plummeted in Russia.

    The Soviet Union also developed a privileged, bureaucratic leadership that departed from revolutionary socialism. But it must be remembered that it inherited a legacy of underdevelopment. For its entire existence, the world’s most powerful countries worked to weaken and overthrow it.

    Myth #8: Socialism has no historical roots in the United States

    Socialists have been consistent and dedicated participants in all the major struggles the U.S. working class has engaged in. Some of the main socialist holidays—International Worker’s Day and International Women’s Day—began in the United States. The first unions were established by radicals who wanted to abolish capitalism. During the Great Depression, socialists were leaders in the labor movement and organized the unemployed. In the 1960s, leading figures of the struggles against racism, war and sexism recognized that only socialism could put a final end to these injustices. (Click here to read about socialists’ historic role in the U.S. labor movement.)

  7. U.S. employers ramped up hiring in November, keeping the economy on track to record its strongest year of job creation in 15 years.

    Nonfarm payrolls rose a seasonally adjusted 321,000 in November, the strongest month of hiring since January 2012, the U.S. Labor Department’s Bureau of Labor Statistics reported Friday.

    The economy has now added at least 200,000 jobs for 10 consecutive months, the longest such stretch in more than 30 years. A similar increase in hiring in December would result in the largest annual gain in employment since 1999. Through November, the U.S. economy has generated 2.63 million new jobs in 2014.

    The unemployment rate, which is obtained from a separate survey of U.S. households, was 5.8 percent in November, unchanged from the prior month and remaining at its lowest level since mid-2008.

    The bulk of the new jobs were concentrated in white-collar professions, retail, health care and manufacturing. The business sector led the way again, creating 86,000 jobs. Retailers also added 50,000 workers to gear up for what is expected to be the best holiday shopping season since the recession ended.

    The heath care industry added 29,000 personnel. Manufacturers created 28,000 jobs, the largest increase in a year. Financial companies such as banks and brokerages hired 20,000 employees, and the construction trade generated 20,000 jobs.

    Chad Moutray, chief economist for the National Association of Manufacturers, was impressed with the gains.

    “These data show that the more-robust growth in new orders and output seen in other indicators are beginning to translate into healthier hiring figures,” Moutray said. “Indeed, manufacturing leaders remain mostly upbeat in their outlook, which should bode well for hiring in the sector as we move into 2015.”

    The U.S. Labor Department reports for September and October were revised to show 44,000 more jobs created than previously reported, adding more sparkle to the report.

  8. U.S. employers ramped up hiring in November, keeping the economy on track to record its strongest year of job creation in 15 years.

    Nonfarm payrolls rose a seasonally adjusted 321,000 in November, the strongest month of hiring since January 2012, the U.S. Labor Department’s Bureau of Labor Statistics reported Friday.

    The economy has now added at least 200,000 jobs for 10 consecutive months, the longest such stretch in more than 30 years. A similar increase in hiring in December would result in the largest annual gain in employment since 1999. Through November, the U.S. economy has generated 2.63 million new jobs in 2014.

    The unemployment rate, which is obtained from a separate survey of U.S. households, was 5.8 percent in November, unchanged from the prior month and remaining at its lowest level since mid-2008.

    The bulk of the new jobs were concentrated in white-collar professions, retail, health care and manufacturing. The business sector led the way again, creating 86,000 jobs. Retailers also added 50,000 workers to gear up for what is expected to be the best holiday shopping season since the recession ended.

    The heath care industry added 29,000 personnel. Manufacturers created 28,000 jobs, the largest increase in a year. Financial companies such as banks and brokerages hired 20,000 employees, and the construction trade generated 20,000 jobs.

    Chad Moutray, chief economist for the National Association of Manufacturers, was impressed with the gains.

    “These data show that the more-robust growth in new orders and output seen in other indicators are beginning to translate into healthier hiring figures,” Moutray said. “Indeed, manufacturing leaders remain mostly upbeat in their outlook, which should bode well for hiring in the sector as we move into 2015.”

    The U.S. Labor Department reports for September and October were revised to show 44,000 more jobs created than previously reported, adding more sparkle to the report.

    Wall Street is taking note of the robust job creation rates. The Dow Jones Industrial Average gained 84 points this morning 17,985, inching ever closer to the 20,000 mark.

    Read Next Article »

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  9. That is why odumber is trying to give millions of illegals amnesty. Socialists believe every one should get to vote. That is why they are against voter ID. Only American citizens should get a single vote. You are confusing socialism with the constitutional republic that the founders set up for the USA. The socialists have bastardized the republic into screwed up government that we have now. If you want to go back to the constitution and the bill of rights as the founders set it up I will agree with you 100%. Socialists want to take over everybody’s life and take away their personal freedoms. The founders set up the constitution for a small central government with very limited powers. NOT THE MONSTROSITY THAT THE SOCIALISTS HAVE BASTARDIZED IT INTO. Where they can redistribute wealth and government makes everyone equal kinda sorta. With a two class system. The elites and the slaves.

  10. Yet the socialists take credit for clinton’s balanced budget and welfare reform. They got odumbercare passed with out a single vote. The bill has been altered any time it was a political advantage. Odumber is giving amnesty to more than 5 million illegals. This against the majority of American will. Yet the useful idiots keep believing what the elites tell them.

  11. Odumber and the socialists are the job killers. The over regulation and high taxes is what is pushing corporations over seas. GE is closing factories in America and moving to china. The CEO of GE is odumber’s job czar. So the socialists don’t even believe in socialism. It is just the tool to keep the useful idiots in line.

  12. Wow you seem to be proficient with cut and paste on your computer. Now you need to learn how to research and do critical thinking. You talk in circles like all socialists. You can’t argue straight argument because the facts don’t work for socialism. You can’t even admit that the ACA is a turd. Even chuck schumer said it was a mistake for the democraps to pass odumbercare. He was one of the top lairs to get it forced down the American throats. America is the greatest and most generous country on the planet. The socialists want to tear it down. What will happen if you succeed? Russia, china and Iran will be in control. Look at how good they treat their people. There is no welfare. The ruling class don’t care if the slaves starve to death. That is what the useful idiots are pushing for in America. Good luck with that.

  13. I’ve worked with and debated Douglas Elmendorf, the current director of the non-partisan Congressional Budget Office, who right-wing Republicans want replaced as soon as his term ends January 3 by someone more accommodating to supply-side economics. Elmendorf was installed by Republicans when it was still possible to be conservative and sane. But now a veritable Star Wars barroom of right-wingers including Grover Norquist, the denizens of the Heritage Foundation, and assorted… Tea Partiers are gunning for him because he won’t use “dynamic scoring” (that is, won’t assume that tax cuts generate economic growth and therefore pay for themselves) and he once issued a positive report on the Affordable Care Act.

    Since its founding in 1974, the CBO has been a critical component of honest government, but the right doesn’t care about honesty; it wants to be told it’s correct. I haven’t always agreed with Elmendorf but he calls it as he sees it, and if Republicans replace him with a hack who calls it as they want it, that will say more about the dangerousness of this new crowd than whether they shut down the government when they don’t get their way.

    ROBERT REICH… FORMER SECRETARY OF LABOR UNDER BILL CLINTON… AND ONE OF THE BEST AND MOST EFFECTIVE CRITICS OF RIGHT WING REPUBLICAN ECONOMIC ANS SOCIAL POLICIES!

  14. I feel for the homeless and poor people. In the great utopia of California this should not be happening. Why is it happening? OH THAT’S RIGHT THE SOCIALISTS HAVE HAD CONTROL OF CALIFORNIA FOR DECADES!!!!! If you want proof that socialism does not work look at California. HMMM… WIKIPEDIA REVEALS THAT REPUBLICAN GOVERNORS HAVE RULED CALIFORNIA FOR 24 OF THE LAST 32 YEARS!!! AND BEFORE THAT, REAGAN WAS GOVERNOR FOR 8 YEARS!!! ARE YOU TELLING US THAT REAGAN AND ALL THOSE REPUBLICANS GOVERNORES WERE LIBERALS??? THAT WOULD BE NEWS TO AN AWFUL LOT OF PEOPLE!!!

  15. REPUBLICANS ARE CLEBRATING THE NEWS THAT THEIR CLOSEST ALLIES… THE COMMUNIST CHINESE… ARE NOW A BIGGER ECONOMY THAN THE USA!!! 40 YEARS OF REPUBLICAN EFORTS TO ENRICH AND EMPOWER COMMUNIST CHINA AND RIGHT WING BILLIONAIRES AND OTHER CRIMINALS HAVE PAID OFF… AS HAVE THEIR NEVER ENDING EFFORTS TO DESTROY JOBS AND DRIBVE DOWN WAGES HERE IN THE USA!!! We can expect Republicans to run on their wonderful record in the next elections in 2016. The Kock brothers will soon announce their hand picked puppet… um… er… uh.. PRESIDENTIAL CANDIDATE, who they will spend billions to get elected, so he can complete the right wing Republican agenda… MAKE COMMUNIST CHINA THE MOST POWERFUL NATION ON EARTH, AND TO IMPOVERISH AND ENSLAVE ALLTHE WORKING PEOPLE IN AMERICA… AND USE THE FEDERAL, STATE, AND LOCAL GOVERNMENTS AS TOOLS TO IMPOSE THEIR RIGHT WING AGENDA ON THE USA!!!

  16. Always ready with a tale of woe and an excuse, aren’t you? You’re sitting on ideas worth billions and aren’t willing to do what it takes to cash that check? While I don’t believe that your ideas are worth billions, the fact that you believe that you have something of value but are not willing to go to work to make things happen does not surprise me at all. Like your president, making excuses and alibis seems to be your strength. That and making stuff up and putting it in the mouth of others. I have never posted that I believe that corporate America is sweetness and light. Big business fornicating government is one of the biggest problems infesting our society. I saw the light years ago and chose not to be part of the infestation, leaving for the world of small business, which has treated me well. So go on blaming everyone else for your misery – let others take their ideas and turn them into wealth – you don’t seem up to the task.

  17. AS I HAVE SAID SEVERAL TIMES BEFORE, I TRIED… AND TRIED… AND TRIED TO START SEVERAL BUSINESSES… but doing that takes money… and I do not have much of that, nor do I have any friends or relatives who have money. AND ALMOST AS BAD… IN TRYING TO START BUSINESSES, I OPENED MYSELF UP TO BEING ROBBED BY CORPORATE AMERICA… they stiole two of my product plans… one of them A VERY GOOD product and detailed description thereof. I AM SITTING ON INVENTIONS AND PRODUCT IDEAS WORTH BILLIONS… but the ONLY interest that has ever been shown is… SEVERAL COMPANIES ARE WILLING TO TAKE MY PRODUCT IDEAS AND INVESNTIONS…. IF I SIMNPLY SIGN THEM OVER TO THEM… TOTALLY FOR FREE!!! And idiots like YOU think that corporate America is all sweetness and light!!! MY LONG EXPERIENCE WITH BIG BUSINESS IS THAT THEY ARE RUN BY SHORT SIGHTED NARROW MINDED IDIOTS AND BY CRIMINALS IN FANCY OFFICES AND THOUSAND DOLLAR SUITS!!!

  18. GEE… AND HERE I ALWAYS THOUGHT THAT SOCIALISM WAS THE RIGHT FOR EVERYONE TO VOTE, THE RIGHT OF EVERYONE TO HAVE A FAIR TRAIL, THE RIGHT OF ALL PEOPLE TO SAY AND THINK AND DO PRETTY MUCH ANYTHING THEY WANT, AND ALL OF THOSE SORTS OF THINGS… So I guess that THAT means that YOU ARE OPPOSED TO THE CONSTITION OF THE UNITED STATES… AND MOST ESPECIALLY OPPOSED TO THE BILL OF RIGHTS THAT GUARANTEES ALL OF THOSE SOCIALIST STYLE FREEDOMS!!! And here I just thought that you were an idiot who merely wanted rich people to be able to crap all over the rest of us without allowing the rest of us to fight back!!!

  19. FEDERAL TAXES ARE MORE THAN A THIRD LOWER THAN THEY WERE BEFORE REAGAN TOOK OFFICE!!! So, what lie will you use NOW to justify your stupid opinions???

  20. DEMOCRATS HAVE HAD MINIMAL CONTROL OVER THIS NATION SINCE ABOUT 1972… NIXON’S LANDSLIDE WIN IN THAT YEAR EFFECTIVELY HANDED CONTROL OF THE FEDERAL GOVERNMENT OVER TO REPUBLICANS… AND THEY HAVE KEPT AND EXPANMDED THAT POWER DRAMATICALLY OVER THE LAST 40 PLUS YEARS. Which you would know if you knew ANYTHING AT ALL!!!

  21. WHAT ARE YOU BLATHERING ON ABOUT??? It was giant financial institutions that sold all the liar loans and other such stupid products. GOVERNMENT HAD NOTHING TO DO WITH ANY OF THAT… except that… while Bush was in office… government regulators mostly looked the other way as the giant financial; institutions broke the law with total impunity!!!

  22. WHERE HAVE I EVER CRITIZED HOW THE MARKETS WORK??? MY BEEF IS WITH THE CRIMINALS WHO MANIPULATE THE MARKETS TO ACCOMPLISH HARMFUL ENDS… Republicans who use the political and economic power to drive down wages and to make life miserable for working people all over the planet… and those kinds of criminals!!! IF IT WAS NOT FOR ALL THE CRIMINALS WHO USE FREE MARKETS TO ACCOMPLISH EVIL AND CORRUPT THINGS, I WOULD BE A TOTALLY FREE MARKET SORT OF GUY!!! It is the evil people BEHIND THE SYSTEM… not the system itself, that I despise!!!

  23. the rich do buy votes. odumber has spent more money to get elected than anybody else ever. The MSM also lied and covered up for this guy .Explain that! You use this story to make your point for socialism. What it does is show the failure of socialism. I feel for the homeless and poor people. In the great utopia of California this should not be happening. Why is it happening? OH THAT’S RIGHT THE SOCIALISTS HAVE HAD CONTROL OF CALIFORNIA FOR DECADES!!!!! If you want proof that socialism does not work look at California. The once great state was over ran by liberals and now it has to pay the price. Even before odumber was elected the state was a sanctuary for illegals. Wages are kept low by the abundance of cheap labor for unskilled workers. These are people like you. You were competing with the illegals for jobs. California has become a nanny state under the democrap/socialist control. Over tax the rich and over regulate to give to the poor. Redistribute the wealth. Legalize pot so all the dopes can sit around and get stoned the state will take care of you no worries. Socialism has worked so well in California that the state is broke and can’t take care of themselves. Sane people have moved out and left the free loaders and illegals. The socialists are trying to make America into California. Giving amnesty to illegals, redistribution of wealth, nanny state and be divisive. This is how the socialism works.

  24. there you go again! too stupid to know that you are chasing your tail in circles by arguing both sides.First you say that the democraps have no control and then you say they forced the big business to do what is right for the country. Make up your mind and stick to it. Just to recap what you said. Business had the economy going great. In other words capitalism was working. Then the democraps got into power and bastardized capitalism into the crony capitalism that we have now. In other words socialism has ruined the American way of life and the economy. I agree with you socialists/democraps have destroyed capitalism and the economy. Could it be that you are starting to grow a brain and see how wrong thinking you have been. Naw that is not happening. Today it was announced that china has the largest economy on the planet. America is #2. Under odumber’s watch the socialists are succeeding in destroying the greatest country on the planet. I bet this is a proud day for you useful idiots. The down fall started with Wilson and then FDR. It took many years for the socialists to take down America. carter clinton and odumber has driven the car over the cliff. Now it will be up to the republicans to clean up the mess again.

  25. looking at aquaponics and chineese style green house .
    if my dream of true politician allowing capitlism truly happened , i could be up an running in 4 months , aquaponics , and a couple more for the greenhouse ..

  26. If you could just open your eyes, you would see that it is the government’s excessive control and the excessive taxes to support the excessive control and then the added control to get more tax money that causes lack of investment and motivation, that causes people to not be able to find employment. It is most politicians, primarily democrats that have perpetuated thus problem.

  27. There is very little that the president can do about oil futures derivatives. The prices are driven by big institutional players such as Southwest Airlines, which has the biggest trading desk in the country. Those businesses whose bottom line are dependent upon he price of oil whether its up or down will be in the futures market.

    You rant and rave about Big Oil. What about the soybean farmer who purchases futures contracts at a specific price for soybeans? I don’t hear a peep out of you about that. Same is true with corn, wheat or coffee. You can bet your last dime that Starbucks, who buys 5% of the world’s coffee also has a trading desk for coffee futures. This is the way the market works. And it works this way whether the Democrats are in control or the Republicans. If the Big banks want to be a market maker then they are obligated to take the other side of the trade and if they play hanky panky with the futures market the they deserve to get their butts kicked just like the retail trader who enters the futures market with no prior trading experience.

  28. I, for one, am impressed with your cut & paste skills. Bored but impressed. It’s always easy to cherry pick a story to back up your tale of woe. Seems like your recurring theme is that you have a complete lack of accountability, love to blame everyone else for your lack success in life, have never had the stones to even attempt to start a business so you despise everyone who has, have fallen prey to the mythology of the two-party political system, and are generally a miserable, wannabe know-it-all. Now you can yell and scream at me all you wish, but, as noted on another forum, I am surrounded by business owners of varying political ideologies, whether they be democrat, republican, libertarian, none of the above, or political atheism. We all had the spine to take control of our lives rather than playing the blame game, have created businesses with varying degrees of success, and continue to move forward regardless of the barriers constructed by various government entities, while you and yours wallow in an amusing pool of self-pity, imaginary enemies, imaginary heroes, and complete disconnect.

  29. Housing crash was caused by libs like barney frank that thought how wonderful it would be to get unqualified people into houses. This boost made housing prices rise…and when they bailed on their payments the whole thing came crashing down! This made a normal recession a bad one. Oil is a supply and demand commodity.

  30. THEY LOST CONTROL BECAUSE THE RICH CAN BUY CONTROL OF ALL THE MEDIA AND ALL THE BEST PROFESSIONAL LIARS, AND THOSE FOLKS CAN GET GUYS LIKE YOURSELF TO BELIEVE WHATEVER BALONEY THEY WANT TO GET YOU TO BELIEVE!!! but… enough of that… consider THIS story….

    SAN JOSE, Calif. (AP) — Police and social-service workers on Thursday began clearing away one of the nation’s largest homeless encampments, a cluster of flimsy tents and plywood shelters that once housed more than 200 people in the heart of wealthy Silicon Valley.

    Al Palaces, a former truck driver who moved in about eight months ago, was among those ordered to leave the camp known as the Jungle, which city officials have been trying to eliminate for years.

    “I just grabbed whatever I could because I don’t want to go to jail,” he said, standing next to an overloaded shopping cart stuffed with muddy plastic bags.

    On Monday, people living in the camp were given until dawn Thursday to leave or face arrest for trespassing. By Thursday morning, about 60 people were left at the muddy, garbage-strewn site.

    Nancy Ortega sobbed as she watched tractors load garbage into trash trucks. A passing motorist shouted at those who had just been evicted.

    “People drive by and look at us like we’re circus animals,” she said.

    Many people had trouble dragging their belongings out of the camp through ankle-deep mud.

    “It’s junk to everyone else. But to us, these are our homes,” said Ortega.

    By midmorning, dozens had been moved out after abandoning most of their possessions, but some of the homeless remained.

    Valentine Cortes, who said he was a journeyman construction worker, had no plans to leave his makeshift shelter built into a steep, muddy slope.

    The words “welcome to the jungle” are inscribed on the post of a flooded dwelling at the Silicon Val …

    “I don’t know why people got all chaotic today,” he said. “We don’t have to go.”

    Asked about the warning that anyone who stays could be jailed, he shrugged and said, “Then I guess I’ll be arrested.”

    A few dozen protesters gathered at the site holding signs reading “Homeless people matter” and “Stand with The Jungle.”

    The encampment stands in stark contrast to the surrounding valley, a region that leads the country in job growth, income and venture capital.

    Palaces said he liked the Jungle better than the streets because people would bring food but not bother the residents.

    “Even a job wouldn’t give me a house” because housing prices are so high, he said.
    I MENTION THIS STORY BECAUSE I SYMPATHIZE… DEEPLY… WITH THOSE FOLKS… BECAUSE NOT ONLY WAS I HOMELESS MYSELF FOR OVER 2 YEARS… BUT ALSO BECAUSE THE VERY PLACE MENTIONED IN THE STORY WAS WHERE I MYSELF LIVED FOR SEVERAL WEEKS… UNTIL I FOUND A MUCH BETTER PLACE TO CAMP OUT A MILE OR TWO AWAY. That was an unfisinished highway overpas… and I lived there… totally by myself… for 5 months… WHIKLE I TRIED AND TRIED AND TRIED AND TRIED TO FIND AN ACTUAL JOB!!! I worked at least 3 or 4 days a week… BUT AT 5 TO 10 DOLLARS A DAY, IT WAS IMPOSIBLE TO SAVE UP ENOUGH TO EVEN THINK ABOUT RENTING A PLACE TO STAY… and that was then… 40 years ago… IT WOULD BE EVEN MORE IMPOSIBLE TODAY, ESPECUIALLY CONSIDERING THAT JOBS ARE HARDER TO FIND, AND PAY MUCH LES THAN THEY DID BACK THEN…. when Republicans were just beginning to destroy the EXCELLENT system that Democrats had created. REPUBLICANS HAD A BIG HEAD START IN CALIFORNIA, BECAUSE BACK THEN, REPUBLICANS TOTALLY CONTROLLED CALIFORNIA… until they hired too many illegals… then moved out of the state to get away from the mess that they had created there, NOW THEY HAVE DONE THE SAME THING TO THE ENITRE COUNTRY… BUT THERE IS NO PLACE FOR THEM TO RUN AND TO HID… SO NOW REPUBLICANS ARE FINALLY DECIDING THAT THEIR MASSIVE HIRING OF ILLEGALS WAS NOT SUCH A GREAT IDEA AFTER ALL!!!

  31. So the democrats had the power and control and had created an economic utopia, but they were so competent that they lost control? It is fun to watch you unknowingly mock the very party to which you whack off.

  32. BECAUSE DEMOCRATS WERE SOLIDLY IN CONTROL OF THE POLITICAL SYSTEM, HAD THE SOLID SUPPORT OF A SOLID MAJORITY OF THE PEOPLE OF THIS COUNTRY, AND COULD USE THAT ECONOMIC AND SOCIAL POWER TO KEEP THE MOSTLY REPUBLICAN CAPITALISTS IN LINE!!! Democrats FORCED big business and the rich to DO STUFF THAT BENEFITTED THE WHOLE NATION, AND MOST EVERYONE IN IT… AND THE WHOLE NATION RAPIDLY BECAME MUCH MORE PROSPEROUS AND MORE FREE THAN IT HAD EVER BEEN BEFORE.. It was THE GOLDEN AGE of America, and that DEMOCRAT CONTROLLED America was the most powerful nation on Earth… by far!!! Then along came Republicans who dismantled that whole wonderful system… AND THEIR PUPPET SUPPORTERS HELPED BY PUTTING REPUBLICANS IN POWER, AND BY KEEPING THEM IN POWER WITH THEIR VOTES… AND THEIR RIGHT WING PUPPET STYLE THINKING!!! And here I am, 40 and 50 years later, defending that OLD DEMOCRATIC SYSTEM… and here you are… oblivious to the fact that that system ever even existed… I LIVED THROUGH THOSE YEARS AND SAW HOW THINGS WERE WITH MY OWN EYES… You WOULD HAVE READ ABOUT IT IN YOUR HISTORY BOOKS… but you never actually read those history books…. did you??? Or you just read the REPUBLICAN VERSION OF HISTORY… which was written by the puppets of the rich who did not like the Democratic version of America BECAUSE THOSE DANG DEMOCRATS WOULD NOT LET REPUBLICANS AND OTHER CRIMINALS CONTROL THIS NATION LIKE THEY WANTED TO CONTROL IT… and like they control it now and for most of the last 40 years or so!!!

  33. Sure comrade. Please explain then, how, during the earlier part of the 20th century, when free market capitalism was much freer than it is now, that we had so many small banks, S&L’s, credit unions, etc…

  34. , maybe the politicians will let capitalism happen this time , and the smaller banks can move up . IF THE POLITICIANS DO NOTHING, AND LET THE FREE MARKETS WORK THEMSELVES OUT, THE RESULTING DEPRESSION WILL LAST FOR DECADES, AND MOST OF THE SMALL BANKS WILL DISAPPEAR FOREVER!!!

  35. THIS WRITERS DOES NOT SAY IT… even though he surely might think it… AND REPUBLICANS WILL NEVER ACKNOWLEDGE OR ADMIT IT…but there is a VERY GOOD chance that the LAST ECONOMIC CRISIS was caused as much by falling oil prices as by the housing market bust. AFTER ALL… OIL PRICES HIT 147 A BARREL… about $ 175 a barrel if adjusted for inflation…. BACK IN THE SUMMER OF 2007 OR THEREABOUTS… and the derivatives and energy related markets worked pretty much the same then as now. SO IF A DERIVATIVES DRIVEN CRISIS CAN BE GENERATED BY FALLING OIL PRICES TODAY….THEN AN EVEN BIGGER CRISIS HAPPENED IN 2007 THROUGH 2009 BECAUSE OIL PRICES WERE 50 TO 60% HIGHER … if adjusted for inflation…WHEN THEY BEGAN TO FALL BEFORE THAT LAST CRISIS!!! But, of course, the author does not want us to know that we had a REPUBLICAN PRESIDENT in charge back then! HE WANTS TO PANDER TO ALL THE RIGHT WINGERS WHO BLAME OBAMA FOR THE MESS THAT BUSH CREATED… AND WHO WILL BLAME OBAMA FOR THE CRISIS THAT THE BIG ENERGY AND BIG BANKING COMPANIES MAY WELL BE CREATING EVEN AS WE SPEAK!!! As for the author’s analysis of what MIGHT happen…. he is spot on! The global energy related markets… if you count ALL players, including the big banks and other financial players… IS TENS OF TRILLIONS OF DOLLARS IN SIZE… and a LOT of it is highly leveraged…. though probably not nearly as leveraged as back when Bush was President, AND WHEN THE PRICE OF OIL WAS FAR FAR HIGHER, AND WHEN THE REGULATORY AGENCIES LET THE BIG BANKS AND OTHER SUCH COMPANIES DO PRETY MUCH ANYTHING THEY WANTED!!! Things are STILL pretty hairy, today… but NOWHERE NEAR as dangerous as they were back then… I WOULD GUESS… but cannot say for certain!!! But in any case, if the stuff does hit the fan, Right wingers will blame Obama… even though he will have had almost nothing to do with the whole crisis… JUST AS BUSH DID NOT HAVE ALL THAT MUCH TO DO WITH THE LAST CRISIS…. EXCEPT THAT his invasion of Iraq allowed and encouraged the oil bubble to form…as did his MASSIVE TAX CUTS FOR THE RICH AND FOR GIANT CORPORATIONS… most especially oil and other energy companies and all the tax breaks that they were given. BUSH AND CHENEY WERE BOTH FORMER BIG OIL EXECUTIVES, AFTER ALL!!!

  36. Good luck with that. The pols will undoubtedly decide to tell a tall tale of global financial disaster so they can once again provide handouts to their friends in high places. As far as locking up any of the grifters? Well, we have seen how serious the current administration is about backing up it’s bluster by the zero indictments brought against any of them. Too bad our “leaders” didn’t have the stones of those in Iceland, who opted not to play favorites.

  37. well since the banks and politicians did not learn from the housing bubble , maybe the politicians will let capitalism happen this time , and the smaller banks can move up . And maybe the justice system will lock up the banksters who inform their rich clients right before they go belle up.
    The fact that most people do not have much $$$ to lose an that FDIC can pay the guareented part off as easily as it cost to save the banks last time { ie Cyprees let the banks fail ] It only cost the bank employees and their rich stock holders .

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