Implode-Explode Heavy Industries news feed

Oil Drillers ‘Going to Die' in 2Q on Crude Price Swoon

Mon, 26 Jan 2015 19:49:52 GMT

``Oil drillers will begin collapsing under the weight of lower crude prices during the second quarter and energy explorers who employ them will shortly follow, according to Conway Mackenzie Inc., the largest U.S. restructuring firm. ''

Venezuela and China close $20 billion deal

Fri, 23 Jan 2015 04:36:51 GMT

``Maduro said that, as part of the agreements, the Asian giant will increase its participation in the projects of the Orinoco Hugo Chavez oil belt, where the largest crude reserve in the world is situated. According to official sources, the funding mechanisms between the two countries amount to over US $ 50 billion through 256 programs.''

Jim Rickards interview: Fed Won't Raise Rates Anytime Soon; Gold Resuming Role As Money

Fri, 23 Jan 2015 04:31:04 GMT

Great interview over at SovereignMan on the current situation and where we are headed in the near future.

Abdullah of Saudi Arabia, a wily king who embraced limited reform, dies

Fri, 23 Jan 2015 00:23:34 GMT

``At the end of his reign, Saudi Arabia was a different country from the one in which he came to power -- much more open to economic entrepreneurs, more receptive to public discussion of its many problems, and even courting tourists. But in another sense, the country was unchanged: All power ultimately lay with the royal family, supported by a compliant religious establishment, and ordinary citizens still were disenfranchised.''

Poroshenko's Emergency Return to Kiev

Thu, 22 Jan 2015 19:22:01 GMT

``Poroshenko hastily ended his three-day visit to Switzerland and returned to Ukraine on the day Davos forum opened. Ukraine's leader hoped for political and economic successes, but received only frustration.''

Shadow banking now poses top risk to US stability, warns IMF

Thu, 22 Jan 2015 19:18:54 GMT

``While the explosion of China's shadow banking is well-known, Zhu Min said there has been a surge of lending by asset management funds and others non-bank players to US companies. This is outside normal control and is hard to track... The IMF estimates that contingent liabilities of these shadow forms of lending have reached $15 trillion in the US, using a "broad" measure of activities that captures new forms of risk. This is higher than in China. It is roughly 180pc of banking assets and is rising rapidly towards its pre-Lehman peak. It is particularly worrying since it was a "run" on the interlinked world of structured finance that caused the global crisis to metastasise in 2008.''

Distortions, lies and omissions: The New York Times won't tell you the real story behind Ukraine, Russian economic collaps - Salon

Thu, 22 Jan 2015 04:27:59 GMT

``President Obama and Secretary of State Kerry wanted Middle East peace to stand as their legacy on the foreign side. Now they propose restored relations with Cuba as the bronze monument. Forget about it. The devastation of ties with a global power, the dissolution of Ukraine and very possibly the ruination of Europe's barely beating economic recovery will be what we live with after this administration makes its exit.''

50,000 Wall Street jobs cut

Mon, 19 Jan 2015 23:12:07 GMT

``The fourth quarter saw thousands more workers fired. Total reductions for 2014 were about 20,000 at Brian Moynihan's Bank of America; 10,000 at Citigroup led by Michael Corbat; and 10,000 at Jaime Dimon's JP Morgan. Morgan Stanley reports on Tuesday.
...
By Mayo's calculations, bank revenues are the weakest in eight decades, a shocking throwback to the Great Depression. And the carnage is ongoing as global growth slows and commodity prices and currency movement roil the markets.
"I think there have been heavy potential and paper losses at this point. Clearly, nobody bet properly on oil -- nobody thought it was going to be below 50 a barrel," said Tim Quast, president of market analytics firm ModernIR.

China Pledges $35 Billion to Latin America

Sun, 18 Jan 2015 14:48:14 GMT

With relatively little fanfare, China has taken over the inside lane of economic development in Latin America with an ambitious 10-year regional investment plan on the scale of the Marshall Plan. China's support for a $250 billion fund for largely infrastructure investments in Latin America was announced by President Xi Jinping at a summit meeting in Beijing last week of the Community of Latin American and Caribbean States (CELAC), which represents 33 countries. China has already pledged $35 billion for the fund, which will also require financial inputs from multilateral development banks and contributions from host countries. To coordinate this, CELAC and China will create a forum to design the partnership with the goal of unifying Latin America as a regional economy.
Beijing's aim is to double the level of trade between China and Latin America from the current level of $300 billion reached in 2014 when China become the second-largest market for Latin American exports, mainly commodities like petroleum, soybeans, iron, and copper. This trade is the basis for a mutual dependence that is evolving into cooperation in development investment. China has the capital to invest and wants to secure future supplies of food and energy as its society becomes more urbanized and consumers seek better quality products, such as wines and seafood from Chile and Peru or beef and poultry from Brazil. The possibilities are enormous if Latin America can achieve efficient, cost-competitive production, now hobbled by inadequate infrastructure in transportation and energy. The Chinese have advanced experience in railroad construction and are eager to become involved in new oil and gas fields in Brazil, Argentina, Ecuador, and Venezuela, all of which have received large financial advances from China in exchange for future oil.

What game is the House of Saud playing?

Sat, 17 Jan 2015 17:13:40 GMT

``Rumbles from ‘Masters of the Universe' territory indicate that the CIA sooner or later might move against the House of Saud. In this case the only way for the House of Saud to secure its survival would be to become friendly with none other than Moscow. This exposes once more the House of Saud's suicidal present course of trying to hurt Russia's economy.''

Russia Threatens Ukraine With Forced Default Over $3 Billion Loan

Sat, 17 Jan 2015 17:03:00 GMT

Russia is threatening to call in its $3 billion loan to Ukraine early in a move that could push the war-torn country into default... The timing couldn't be worse. Ukraine is set to hand over $19 billion over the next three years ($7.5 billion in 2015, $4.7 billion in 2016, and $6.6 billion in 2017) in debt payments that its ailing economy can ill afford.
Indeed its economic crisis has become so deep that at the end of last year the International Monetary Fund (IMF) identified a $15 billion shortfall in government funding that will need to be plugged "within weeks," according to the Financial Times . That figure comes on top of the $17 billion programme that has already been arranged by the IMF.

The initial deal was deemed sufficient to ensure that the immediate funding needs of Ukraine would be met and, once the country had stabilized government debt would be left on a sustainable footing. These forecasts now look wildly optimistic. The government in Kiev has effectively lost control of regions accounting for some 16% of Ukraine GDP to rebels, while the costs of fighting continue to mount.

Mutiny in the Ranks: EU Split on Maintaining Russian Sanctions

Sat, 17 Jan 2015 15:50:15 GMT

``At least eight EU countries are reported to be against renewing EU economic and financial sanctions when they automatically expire between May and June this year. The discussion is also likely to continue at the G7 meeting in June where Germany and Japan are expected to clash with the US''

Steepest Drop in U.S. Oil Rigs Shows OPEC Prevailing

Fri, 16 Jan 2015 20:25:01 GMT

``U.S. drillers have taken a record number of oil rigs out of service in the past six weeks as OPEC's sustained production sent prices below $50 a barrel. The oil rig count has fallen by 209 since Dec. 5, the steepest six-week decline since Baker Hughes Inc. (BHI:US) began tracking the data in July 1987. The count fell by 55 this week to 1,366. Horizontal rigs used in U.S. shale formations that account for virtually all of the nation's oil production growth fell by 48, the biggest single-week decline.''

Von Greyertz, Who Predicted SNB Capitulation Last Dec., Says Massive ECB QE Programme, Gold Breakout Coming

Fri, 16 Jan 2015 18:23:12 GMT

``The SNB was probably aware of a massive QE program about to be announced by the ECB next week. This is probably why they pulled the trigger now on the peg because they would have lost a lot more money next week. This is why they decided to cut their losses now at the 80 -- 100 billion Swiss franc level... Investors in the West now have a last chance to protect their wealth before the carnage starts because wealth destruction will be massive and unprecedented. When the more than one quadrillion dollar derivatives time bomb explodes it will be too late to do anything.''

Russia to Shift Ukraine Gas Transit to Turkey as EU Cries Foul

Thu, 15 Jan 2015 14:58:57 GMT

``Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey, a surprise move that the European Union's energy chief said would hurt its reputation as a supplier... "Transit risks for European consumers on the territory of Ukraine remain," Miller said in an e-mailed statement. "There are no other options" except for the planned Turkish Stream link, he said.''

Did Russia Just Pull Itself Out Of The Petrodollar?

Wed, 14 Jan 2015 18:59:39 GMT

``Russia "may unseal its $88 billion Reserve Fund and convert some of its foreign-currency holdings into rubles, the latest government effort to prop up an economy veering into its worst slump since 2009." These are dollars which Russia would have otherwise recycled into US denominated assets. Instead, Russia will purchase even more Rubles and use the proceeds for FX and economic stabilization purposes. ''

The US Hasn't "Decoupled" And There Ain't No Giant "Oil Tax Cut" | David Stockman

Tue, 13 Jan 2015 14:01:54 GMT

``This prospect marks a sharp change from the oil price plunge at the time of the 2008 financial crisis. Back then, net imports totaled 11 million bbls/day and accounted for nearly 60% of domestic consumption. Accordingly, if the oil price collapse last time was mainly "off-shored", this time it will be predominately "on-shored''

Enjoy The Ride On The Inflation/Deflation Rollercoaster

Tue, 13 Jan 2015 13:47:20 GMT

``We have now reached the point where central banks can never stop buying bonds because they cannot risk the normalization of interest rates. The best example of this is Japan. Allowing interest rates to mean revert would now cause nearly all of Japanese government revenue to be used for debt service. Once a market becomes aware that all of a nation's revenue must be used to pay interest on current outstanding debt, it becomes a mathematical certainty that it must default on the principal. This condition has always led to a currency, bond, equity and economic crises.''

Gold climbs to 4-week high as oil rout continues

Mon, 12 Jan 2015 19:43:03 GMT

``Gold rose to the highest level in more than four weeks on Monday, as investors sought shelter from steep losses in the oil market and amid speculation the Federal Reserve will keep rates on hold for longer.''

Russia says Ukraine has violated loan terms: agencies

Sat, 10 Jan 2015 15:38:33 GMT

``Ukraine has violated the terms of a $3 billion Russian loan but Moscow has not yet decided whether to demand early repayment, Russian Finance Minister Anton Siluanov was quoted on Saturday as saying. Russia lent the money in December 2013 by buying Ukrainian Eurobonds, two months before Ukraine's then-president, the pro-Moscow Viktor Yanukovich, fled the country amid mass protests against his rule.''