matt levine's explanation is pretty accesible (and sound afaict):
https://www.bloomberg.com/opinion/articles/2020-04-20/there-s-nowhere-to-put-the-oil
― π ππ’π¨ (caek), Monday, 20 April 2020 19:35 (four years ago) link
what if they leave it in the ground
― silby, Monday, 20 April 2020 19:36 (four years ago) link
costs too much to cap a well! not worth the bother! (this is why i live in one of the most expensive residential cities in america, and there's an active oil field 1/2 a mile away)
― π ππ’π¨ (caek), Monday, 20 April 2020 19:37 (four years ago) link
i would like michael bloomberg to buy all the oil while it's essentially free, and then not use it
― let me be your friend on the other end! (Karl Malone), Monday, 20 April 2020 19:39 (four years ago) link
i don't ask for much
excited for the entire middle of the country to become west virginia btw
― π ππ’π¨ (caek), Monday, 20 April 2020 19:41 (four years ago) link
in what sense? abruptly drained bereft of economic activity?
― silby, Monday, 20 April 2020 19:42 (four years ago) link
probably being hyperbpolic there. to the extent that happens, it's going to happen in very underpopulated/temporarily populated areas and fracking will be profitable again soon. but if this weird financial artificat propagates into real prices (which it will do to some extent) then this is going to be a pretty big economic shock to some very badly run state and local governments. state services in west texas are fucked, for example.
― π ππ’π¨ (caek), Monday, 20 April 2020 19:45 (four years ago) link
can they perhaps put it back in the ground, and then take it out again later
― silby, Monday, 20 April 2020 19:46 (four years ago) link
yes, or they could stick it in here https://www.youtube.com/watch?v=XuKF1-c1YsE
― π ππ’π¨ (caek), Monday, 20 April 2020 19:49 (four years ago) link
That's what the US Strategic Oil Reserve does. But that would take some planning and infrastructure to put in place and no one was planning for this.
― A is for (Aimless), Monday, 20 April 2020 19:49 (four years ago) link
i'm pretty sure that if this glut continues there will be huge ramifications for the middle east, and also i'm pretty sure that i don't really have a good idea of how that would happen. seems like a destabilizer for a very unstable region, though
― let me be your friend on the other end! (Karl Malone), Monday, 20 April 2020 19:56 (four years ago) link
Balmorhea is awesome. A fun day trip from Marfa.
― dan selzer, Monday, 20 April 2020 20:04 (four years ago) link
this glut will continue for several more months at a minimum. it will crash and burn US and Canadian producers much further and faster than the middle east producers.
― A is for (Aimless), Monday, 20 April 2020 20:05 (four years ago) link
We should make a bunch of Oil Rooms (like in the Saatchi Gallery) everywhere.
― Yerac, Monday, 20 April 2020 20:06 (four years ago) link
it will crash and burn US and Canadian producers much further and faster than the middle east producers. why
― Mordy, Monday, 20 April 2020 20:09 (four years ago) link
North American producers probably employ fewer impoverished guest workers?
― silby, Monday, 20 April 2020 20:14 (four years ago) link
(for oil production I mean. obviously impoverished guest and undocumented workers are employed elsewhere)
oil makes up a shocking % of total exports for a lot of countries:
https://i.imgur.com/PjAweYx.jpg
not only that, in some of those countries it's also a huge source of government revenue
― let me be your friend on the other end! (Karl Malone), Monday, 20 April 2020 20:15 (four years ago) link
Wasn't it ME and Russian producers that Trump was so desperately trying to prop up for some unknown reason? (Pee tape)
― Mario Meatwagon (Moodles), Monday, 20 April 2020 20:16 (four years ago) link
US oil may be predicated on market making more expensive extraction techniques feasible (my guess why aimless made his comment but i don't want to assume and i'm curious what he's thinking) but middle eastern countries heavily rely on oil to a greater degree by gov and comprising more of their economy a decline would be far more severe in that regard.
― Mordy, Monday, 20 April 2020 20:21 (four years ago) link
why
Fracked oil and shale oil are much more expensive to produce than middle east oil. These make up a very large share of US and Canadian production. US and Canadian oil producers include numerous small-to-mid-sized companies that have limited capital resources compared to middle east producers, which are run by national governments with sovereign wealth funds. The big multi-national oil companies will not crash, but the small-to-mid-sized ones always have folded in droves during past gluts.
It seems to me that instability is so endemic in the majority of the middle east that this one added instability will be absorbed much like the other crises that arise so frequently. The armies will be fed, therefore the governments will stand, albeit shakily.
― A is for (Aimless), Monday, 20 April 2020 20:27 (four years ago) link
harder to feed ppl when oil revenue is dry tho
― Mordy, Monday, 20 April 2020 20:30 (four years ago) link
They know enough to feed the army before feeding anyone else.
― A is for (Aimless), Monday, 20 April 2020 20:33 (four years ago) link
Word
― π ππ’π¨ (caek), Monday, 20 April 2020 21:08 (four years ago) link
that bloomberg article is great!
― Li'l Brexit (Tracer Hand), Monday, 20 April 2020 21:15 (four years ago) link
If you donβt already get Levineβs newsletter then you should. Heβs very good and very funny!
― π ππ’π¨ (caek), Monday, 20 April 2020 21:17 (four years ago) link
Do you have to pay for it? I used to read it all the time when I had a Bloomberg account but am too cheap to pay for one just for Levine's newsletter.
― o. nate, Monday, 20 April 2020 21:51 (four years ago) link
Not if you give them your email address.
― π ππ’π¨ (caek), Monday, 20 April 2020 22:13 (four years ago) link
Found this CNN headline amusing:
"What does it mean when oil prices go negative? No, it doesn't mean the gas station will pay you to fill up."
I'd like to think there were at least a few people out there who were deeply disappointed when they read that.
― clemenza, Tuesday, 21 April 2020 17:31 (four years ago) link
It was may delivery oil down yesterday. Today itβs June (now in single figures)
― π ππ’π¨ (caek), Tuesday, 21 April 2020 18:02 (four years ago) link
hey on the bright side all that cheap gas will get people back to work... right? right???
:P
― maura, Tuesday, 21 April 2020 23:20 (four years ago) link
it's sad when the People put such pressure on a small business! Sorry Mordy.
(I wonder if HARVARD is giving back their $9 million)
ABC News reports:
Ruthβs Chris Steak House will return the $20 million coronavirus small business loan it procured from the governmentβs $350 billion Paycheck Protection Program, the company announced Thursday.
The PPP was designed to throw a financial lifeline to the millions of small businesses who have seen revenues plunge due to social distancing lockdowns β but the hastily conceived program left thousands of applicants high and dry, after funds were snapped up in less than two weeks.
― brooklyn suicide cult (Dr Morbius), Thursday, 23 April 2020 21:43 (four years ago) link
Shake Shack, another large restaurant chain that got a loan under the program, said earlier this week it would be returning the $10 million it had received, after it was able to raise more than that amount in the equity market.
https://www.nbcnews.com/business/business-news/facing-furor-ruth-s-chris-high-end-steak-chain-returns-n1190606
― brooklyn suicide cult (Dr Morbius), Thursday, 23 April 2020 21:47 (four years ago) link
Harvard is on my top two list of US enterprises to be seized by the state, up there with Boeing
― silby, Thursday, 23 April 2020 23:24 (four years ago) link
the end of harvard will be some conservative think tank purchasing it somehow and then installing milton friedman professors of truth
― let me be your friend on the other end! (Karl Malone), Thursday, 23 April 2020 23:35 (four years ago) link
xp - did you go there or ...?
― sarahell, Friday, 24 April 2020 19:51 (four years ago) link
no they just have too many billions of dollars, it's uncouth
― silby, Friday, 24 April 2020 20:45 (four years ago) link
also the library isn't open to the public, preposterous
Harvard has an endowment fund of $41 billion, the largest in the world, and larger than the GDP of roughly half the nations on earth.
― A is for (Aimless), Friday, 24 April 2020 21:15 (four years ago) link
Ban Harvard. Theyβre the Yankees of universities
― Joey Corona (Euler), Friday, 24 April 2020 21:15 (four years ago) link
nationalize all universities, make application solely meritocratic and level off tuition at 10k per year flatten the curve imo
― Fuck the NRA (ulysses), Friday, 24 April 2020 21:55 (four years ago) link
make education more bureaucratic and white!
― sarahell, Friday, 24 April 2020 23:33 (four years ago) link
Like considering the current federal government, do you really want universities nationalized? Really?
― sarahell, Friday, 24 April 2020 23:36 (four years ago) link
I'd clarify "nationalize" as "state/locally mediated," stipulate preferential placement through affirmative action and make college a student opt-in right / continuation of public school in general; turn old malls and prisons into colleges.next let's discuss my thoughts on gun control.
― Fuck the NRA (ulysses), Saturday, 25 April 2020 01:10 (four years ago) link
If you're talking about nationalization, the current federal government isn't really a consideration.
― Greta Van Show Feets BB (milo z), Saturday, 25 April 2020 01:14 (four years ago) link
also having an endowment is v. nice but it's not like they're sitting on $41B in cash. much of that money is legally restricted to certain very specific purposes (that prop up our excellent current political/economic system, but hey)
― mookieproof, Saturday, 25 April 2020 02:45 (four years ago) link
it's not like they're sitting on $41B in cash
yup. there's equities, bonds, REITs, silent partnerships, and a wide variety of other negotiable assets, some of which are comparatively illiquid. I doubt they could raise more than, say, $10 billion in cash if they only had a couple of weeks of lead time to lay their hands on that much.
― A is for (Aimless), Saturday, 25 April 2020 03:17 (four years ago) link
lol i'm curious just how many non-governmental institutions on earth could raise $10B in cash in two weeks
― mookieproof, Saturday, 25 April 2020 03:42 (four years ago) link
Welcome to Apple University
― Fuck the NRA (ulysses), Saturday, 25 April 2020 03:43 (four years ago) link