It’s been a while since we’ve featured a dose of eloquent gloom from James Howard Kunstler’s wonderfully named blog Clusterfuck Nation, so here it is:
Did a few loose strands of Ebola seep into the organs and tissues of global finance last week? The US equity markets sure enough puked, the Nikkei bled out through its eyeballs, all the collagen melted out of Greek bonds, and treasuries bloated up grotesquely on a putrid stream of terrified “liquidity” that led two Federal Reserve proctologists to maunder about the possibility of a QE-4 laxative, out of which, in due time, will surely gush explosive bloody fluxes of deeper financial sickness.
The oil price fell on its face so hard it crashed through the floorboards. One particular idiot at NPR wrote that this means peak oil was a hoax (Predictions Of ‘Peak Oil’ Production Prove Slippery). I guess she didn’t notice that the junk financing associated with shale oil capex is also dissolving like the poor late Thomas Eric Duncan’s circulatory system. That is, expect a whole lot less drilling in the Bakken and the Eagle Ford in the months ahead, and a substantial fall in production. Unless the US government finds a back door to shovel money at shale (a possibility considering the crucial myth of “Saudi America” to Wall Street psychology), the investment will not be there for the relentless drilling and re-drilling. As other savants on the web have pointed out, it’s not so much that the world is awash in surplus oil as the world is a’glut in people too broke to buy oil. And anyway, the shale oil companies have never made a buck at any price on anything but the real estate shenanigans entailed in their racket, buying and selling leases and so forth, just more paper games. In short, there is plenty of reason to believe that the shale endeavor may founder altogether at $80-a-barrel.
eats shoots 'n leaves 