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Is fast crash likely? Pt. 2

General discussions of the systemic, societal and civilisational effects of depletion.

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Re: Is fast crash likely? Pt. 2

Unread postby marmico » Wed 13 Sep 2017, 11:44:40

recalculated the Maximum Affordability Function


The abracadabra abacas at work.
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Re: Is fast crash likely? Pt. 2

Unread postby asg70 » Wed 13 Sep 2017, 12:04:27

GHung wrote:So you discount that oil is a fundamental/foundational underlying resource for that growth/debt paradigm?


Jesus do you come across as a Spanish inquisitor here or what?

Image

Resources drive the economy. Fossil fuels are a big driver, of which oil is one. But it's not the only one. There's also natural capital (soil, freshwater, etc...) Peak oilers kind of get limits to growth but they fixate on only one of all of the inputs of civilization.
Hubbert's curve, meet S-curve: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Is fast crash likely? Pt. 2

Unread postby shortonoil » Wed 13 Sep 2017, 12:08:39

Seadrill Ltd. just filed for bankruptcy. The bond holders may get back 25¢ on the dollar.

http://www.zerohedge.com/news/2017-09-1 ... ease-rates

"Of course, Seadrill is just the latest bankruptcy filing in an industry that has been devastated by persistently weak commodity prices.

In late July, Ocean Rig UDW Inc. filed for bankruptcy protection in the U.S. Hercules Offshore Inc., GulfMark Offshore Inc., Toisa Ltd. and Vantage Drilling Co. have also spent time in bankruptcy court since oil and gas prices cratered."


This is just the beginning for an industry that not long ago defined the meaning of the the word wealth for the world.
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Re: Is fast crash likely? Pt. 2

Unread postby shortonoil » Wed 13 Sep 2017, 12:15:21

There's also natural capital (soil, freshwater, etc...) Peak oilers kind of get limits to growth but they fixate on only one of all of the inputs of civilization.


You should be quit comfortable with your new future; the south end of a north bound mule.
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Re: Is fast crash likely? Pt. 2

Unread postby GHung » Wed 13 Sep 2017, 12:18:16

asg70 wrote:
GHung wrote:So you discount that oil is a fundamental/foundational underlying resource for that growth/debt paradigm?


Jesus do you come across as a Spanish inquisitor here or what?

Image

Resources drive the economy. Fossil fuels are a big driver, of which oil is one. But it's not the only one. There's also natural capital (soil, freshwater, etc...) Peak oilers kind of get limits to growth but they fixate on only one of all of the inputs of civilization.


Gosh, I was just asking. Seems you can't resist being an asshole about it.

Goes to character.......

BTW: You skipped the part where the economic usefulness of virtually all of those other "drivers" is utterly dependent upon the availability of affordable oil.
Blessed are the Meek, for they shall inherit nothing but their Souls. - Anonymous Ghung Person
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Re: Is fast crash likely? Pt. 2

Unread postby onlooker » Wed 13 Sep 2017, 12:31:20

Okay, then take your pick of other limits to growth. AS Ghung stated we at now fixed unto a contraction trajectory. But since this is a peak oil debate we are focusing on energy. And what about the fact that without sufficient energy our modern economies wither and die, do you not understand?
“"If you think the economy is more important than the environment, try holding your breath while counting your money"”
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Re: Is fast crash likely? Pt. 2

Unread postby donstewart » Wed 13 Sep 2017, 12:34:19

assets and debt

(1)
There's also natural capital (soil, freshwater, etc...)

The 'natural assets are severely degraded, to the point that they are virtually useless without fossil fuels. For example, nobody lives near a stream from which you can safely drink. And farmland in Iowa is useless without fossil fuels.

(2) This article from everyone's favorite, Zero Hedge, which uses a Bank of America study as a platform, discusses the tremendously over -leveraged global financial system:

http://www.zerohedge.com/news/2017-09-1 ... on-problem

Please note down toward the end of the article the analysis of how much in the way of real assets supports the superstructure of debt. Now assume that oil starts becoming much less available, and make a wild guess about how much those real assets will actually be worth without a way to fuel transportation.

Of course, there are plenty of people here who think that the world revolves around fiat money, and we can simply print our way out of this box- canyon.

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Re: Is fast crash likely? Pt. 2

Unread postby onlooker » Wed 13 Sep 2017, 12:35:35

You skipped the part where the economic usefulness of virtually all of those other "drivers" is utterly dependent upon the availability of affordable oil.---- I vote this statement as statement of the year on Peak oil.com
“"If you think the economy is more important than the environment, try holding your breath while counting your money"”
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Re: Is fast crash likely? Pt. 2

Unread postby rockdoc123 » Wed 13 Sep 2017, 12:51:11

Seadrill Ltd. just filed for bankruptcy. The bond holders may get back 25¢ on the dollar.


This is just the beginning for an industry that not long ago defined the meaning of the the word wealth for the world.


Classic misunderstanding of what is going on.

They haven’t gone bankrupt, what they have done is file prearranged Chapter 11 cases in TX along with an agreed restructuring plan. The comment from management:

We have more than $1 billion in cash which is more than sufficient to run our day to day operations. Filing for chapter 11 does not mean that Seadrill is out of money, we are using this process to implement a balance sheet restructuring and position the company for future success.


Key points from their press release:

The agreement delivers $1.06 billion of new capital comprised of $860 million of secured notes and $200 million of equity

The Company's secured lending banks have agreed to defer maturities of all secured credit facilities, totaling $5.7 billion, by approximately five years with no amortization payments until 2020 and significant covenant relief.

 the Company's $2.3 billion of unsecured bonds and other unsecured claims will be converted into approximately 15% of the post-restructured equity with participation rights in both the new secured notes and equity, and holders of Seadrill common stock will receive approximately 2% of the post-restructured equity

The agreed plan comprehensively addresses Seadrill's liabilities, including funded debt and other obligations.

By extending and re-profiling the secured bank debt, reducing leverage and delivering a significant amount of new capital, this agreement provides Seadrill with a five-year runway.  Post-restructuring, Seadrill will have a strong cash position and good liquidity to take advantage when the market recovers.

Additionally, the Company expects it will pay all suppliers and vendors in full under normal terms for goods and services provided during the chapter 11 cases.  At the point of filing, Seadrill has over $1 billion in cash and does not require debtor-in-possession financing.

This is a very classic restructuring incorporating Chapter 11 provisions for creditor protection. By completing the restructuring the company can pay off all its vendors and suppliers and get extension on its debt facilities in return for which the lenders end up with equity in the company.

And it needs to be pointed out this is an oil and gas service company. This is not the first time a number of them have been struggling as they are always the first to get hit in an industry downturn cycle. They epitomize the boom bust cycle in the industry, unlike upstream companies which have means of streamlining for survival.

At this point Rockman should show up and educate you about his thread on Oil and Gas Chapter 11 restructuring. :wink:
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Re: Is fast crash likely? Pt. 2

Unread postby onlooker » Wed 13 Sep 2017, 12:59:25

Good link Don. It is telling how immersed in economic dogma some people are that they fail to see the increasing disconnect between the world of economics and especially the fiat money aspect of it and the dwindling natural capital available per capita and in totality. The financial ledger sheets that is at odds with the reality of the world around us. We are awash in worthless paper even as real valuable natural capital is being reduced and degraded. And so governments and corporations seek ever more loans to maintain viable industries affected by depressed consumer purchasing power and higher costs.
“"If you think the economy is more important than the environment, try holding your breath while counting your money"”
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Re: Is fast crash likely? Pt. 2

Unread postby marmico » Wed 13 Sep 2017, 13:02:31

... "drivers" is utterly dependent upon the availability of affordable oil


Gasoline spending relative to wages has been relatively affordable since 1985. You must pine for the Beaver Cleaver days.

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Re: Is fast crash likely? Pt. 2

Unread postby asg70 » Wed 13 Sep 2017, 13:07:01

onlooker wrote:You skipped the part where the economic usefulness of virtually all of those other "drivers" is utterly dependent upon the availability of affordable oil.---- I vote this statement as statement of the year on Peak oil.com


#1) we're in a glut, so no problem there
#2) "utterly dependent" is too vague. What about coal? Natural gas? Etc...

So again everything just degrades into platitudes about this or that being "utterly dependent".
Hubbert's curve, meet S-curve: https://www.youtube.com/watch?v=2b3ttqYDwF0
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Re: Is fast crash likely? Pt. 2

Unread postby GHung » Wed 13 Sep 2017, 13:08:50

marmico wrote:
... "drivers" is utterly dependent upon the availability of affordable oil


Gasoline spending relative to wages has been relatively affordable since 1985. You must pine for the Beaver Cleaver days.

Image


Did I say that oil wasn't currently affordable, Marmaduke?
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Re: Is fast crash likely? Pt. 2

Unread postby Yoshua » Wed 13 Sep 2017, 13:56:14

marmico wrote:
... "drivers" is utterly dependent upon the availability of affordable oil


Gasoline spending relative to wages has been relatively affordable since 1985. You must pine for the Beaver Cleaver days.

Image


As the value of petroleum declines as an energy source, the price of petroleum declines and the petroleum industry files for bankruptcy protection...
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Re: Is fast crash likely? Pt. 2

Unread postby marmico » Wed 13 Sep 2017, 14:09:25

You "oil is not affordable" people are idjits. Can you not see the 2 bull markets in oil in the 58 year history of the chart?
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Re: Is fast crash likely? Pt. 2

Unread postby shortonoil » Wed 13 Sep 2017, 14:14:14

As requested:

1986...117.18
1987...121.38
1988...125.16
1989...128.52
1990...132.30
1991...135.60
1992...138.60
1993...141.54
1994...144.48
1995...147.00
1996...149.10
1997...150.78
1998...152.04
1999...153.30
2000.. 153,72
2001...153.72
2002...153.30
2003...152.46
2004...150.78
2005...148.26
2006...145.32
2007...141.96
2008...137.34
2009...132.30
2010...126.42
2011...119.28
2012...111.72
2013...102.90
2014....93.66
2015....83.16
2016....71.40
2017....58.80
2018....45.36
2019....30.66
2020....15.12
2021...-1.68
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Re: Is fast crash likely? Pt. 2

Unread postby marmico » Wed 13 Sep 2017, 14:29:05

What a fookenstoopidretard. The maximum affordable price of oil is $1.68 in 2021.
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Re: Is fast crash likely? Pt. 2

Unread postby shortonoil » Wed 13 Sep 2017, 14:40:55

What a fookenstoopidretard. The maximum affordable price of oil is $1.68 in 2021.


It all stops when investments can only produce negative returns.
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Re: Is fast crash likely? Pt. 2

Unread postby Yoshua » Wed 13 Sep 2017, 14:45:19

marmico wrote:What a fookenstoopidretard. The maximum affordable price of oil is $1.68 in 2021.


The entire petroleum industry will have filed for bankruptcy before that day.

Any suggestions on how to save the petroleum industry and our civilization?
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Re: Is fast crash likely? Pt. 2

Unread postby onlooker » Wed 13 Sep 2017, 14:49:08

shortonoil wrote:
What a fookenstoopidretard. The maximum affordable price of oil is $1.68 in 2021.


It all stops when investments can only produce negative returns.

And the General Economy and consumers are so starved of Net Energy that little economic activity can take place. When that happens the paper money or computerized digits will be shown for what they have always been ie. worthless.
“"If you think the economy is more important than the environment, try holding your breath while counting your money"”
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