The 2020 Financial Crash

QuakerOats Senior Member
11,701 posts 52 reps Joined Nov 2009
Wed, Mar 18, 2020 5:14 PM
posted by O-Trap

Umm ... were you not around for 2008?  A huge chunk of the problem there was the credit approval given to borrowers who had no business borrowing.

 

Lord.  We are not talking about throwing money at new borrowers who are not credit-worthy.  We are talking about guaranteeing existing credit lines of businesses so they have the liquidity to weather the storm; otherwise many will become insolvent immediately and then the shit will hit the fan.  This is a completely different situation than ’09.

O-Trap Chief Shenanigans Officer
18,909 posts 140 reps Joined Nov 2009
Thu, Mar 19, 2020 1:09 AM
posted by QuakerOats

 

Lord.  We are not talking about throwing money at new borrowers who are not credit-worthy.  We are talking about guaranteeing existing credit lines of businesses so they have the liquidity to weather the storm; otherwise many will become insolvent immediately and then the shit will hit the fan.  This is a completely different situation than ’09.

There's certainly some nuanced differences, which I've already alluded to.  However, it's more similar that you're trying to make it seem.

FatHobbit Senior Member
9,058 posts 68 reps Joined Nov 2009
Tue, Mar 24, 2020 2:54 PM

So, if I had cash to throw into the market now to try to catch the rally, how would I do that?  Where would you all invest it? 

Spock Senior Member
5,271 posts 9 reps Joined Jul 2013
Tue, Mar 24, 2020 2:59 PM

Depends on if you want long term growth or you are looking for a quick money grab.

 

 

like_that 1st Team All-PWN
29,228 posts 303 reps Joined Apr 2010
Tue, Mar 24, 2020 3:45 PM
posted by FatHobbit

So, if I had cash to throw into the market now to try to catch the rally, how would I do that?  Where would you all invest it? 

Should've thrown some cash in last week. 

SportsAndLady Senior Member
39,070 posts 231 reps Joined Nov 2009
Mon, Apr 20, 2020 12:20 PM

Crude oil down over FIFTY percent today. It’s under $9 a barrel. Crazy, crazy crash of the oil industry. 
...And I just bought a ton of oil drilling stocks. Buy low

O-Trap Chief Shenanigans Officer
18,909 posts 140 reps Joined Nov 2009
Mon, Apr 20, 2020 12:43 PM
posted by SportsAndLady

Crude oil down over FIFTY percent today. It’s under $9 a barrel. Crazy, crazy crash of the oil industry. 
...And I just bought a ton of oil drilling stocks. Buy low

Good lord.  I remember the days back in 2014 when it was topping out over $100.  This is crazy.

like_that 1st Team All-PWN
29,228 posts 303 reps Joined Apr 2010
Mon, Apr 20, 2020 1:03 PM
posted by SportsAndLady

Crude oil down over FIFTY percent today. It’s under $9 a barrel. Crazy, crazy crash of the oil industry. 
...And I just bought a ton of oil drilling stocks. Buy low

Which ones?

SportsAndLady Senior Member
39,070 posts 231 reps Joined Nov 2009
Mon, Apr 20, 2020 1:09 PM
posted by like_that

Which ones?

DO and HP

SportsAndLady Senior Member
39,070 posts 231 reps Joined Nov 2009
Mon, Apr 20, 2020 1:12 PM

Bought OXY, too

iclfan2 Reppin' the 330/216/843
9,465 posts 77 reps Joined Nov 2009
Mon, Apr 20, 2020 1:41 PM

Almost below a dollar. Holy shit

justincredible Honorable Admin
37,969 posts 178 reps Joined Nov 2009
Mon, Apr 20, 2020 1:58 PM

What does this mean long term? I'm completely ignorant on this kinda thing.

iclfan2 Reppin' the 330/216/843
9,465 posts 77 reps Joined Nov 2009
Mon, Apr 20, 2020 2:11 PM
posted by justincredible

What does this mean long term? I'm completely ignorant on this kinda thing.

S&L probably knows more, but this is just for the May futures. June is still above $20.

O-Trap Chief Shenanigans Officer
18,909 posts 140 reps Joined Nov 2009
Mon, Apr 20, 2020 2:12 PM
posted by justincredible

What does this mean long term? I'm completely ignorant on this kinda thing.

It means we're about to see how much of each gallon is determined by fixed rates of taxation as opposed to barrel prices.

iclfan2 Reppin' the 330/216/843
9,465 posts 77 reps Joined Nov 2009
Mon, Apr 20, 2020 2:15 PM

This thread gives some explanation. 

https://twitter.com/gilbeaq/status/1252293724215762950?s=21

SportsAndLady Senior Member
39,070 posts 231 reps Joined Nov 2009
Mon, Apr 20, 2020 2:22 PM
posted by justincredible

What does this mean long term? I'm completely ignorant on this kinda thing.

I don’t know how much of a long-term effect this shows, as these prices are only short term (May) futures contracts. In the short term, it means drillers aren’t drilling, and will need to find other ways to make money. These companies better have a lot of cash on hand or else you’ll see bankruptcies. 
It also means Russia, Saudi Arabia, and countries that rely on oil exporting are completely fucked. Particularly Russia who really doesn’t export anything else. 
China is a clear winner here. They don’t drill any oil, so they’re only importing their oil and right now are getting it at an incredible rate. 
 

Also, and this could be wrong as there are a lot of abnormalities in the market right now, but I doubt this effects your cost of gas price at the local gas station. Gas stations aren’t going to drop their cost to .50 cents a gallon because they’re getting it for practically nothing. They’re hurting too, and aren’t going to just give it away to those who are still buying right now.  
 

QuakerOats Senior Member
11,701 posts 52 reps Joined Nov 2009
Mon, Apr 20, 2020 2:24 PM

 

The sudden crash in demand has led to a major storage problem; there is nowhere to physically put the oil right now, so the prompt month (May) has cratered. I look for June to also drop from $22, probably into the mid-teens, until supply gets cut more and some demand comes back from air traffic and beyond.

justincredible Honorable Admin
37,969 posts 178 reps Joined Nov 2009
Mon, Apr 20, 2020 2:25 PM

Got it. Thanks. 

8,788 posts 21 reps Joined Nov 2009
Mon, Apr 20, 2020 2:28 PM
posted by O-Trap

It means we're about to see how much of each gallon is determined by fixed rates of taxation as opposed to barrel prices.

 

posted by SportsAndLady

I don’t know how much of a long-term effect this shows, as these prices are only short term (May) futures contracts. In the short term, it means drillers aren’t drilling, and will need to find other ways to make money. These companies better have a lot of cash on hand or else you’ll see bankruptcies. 
It also means Russia, Saudi Arabia, and countries that rely on oil exporting are completely fucked. Particularly Russia who really doesn’t export anything else. 
China is a clear winner here. They don’t drill any oil, so they’re only importing their oil and right now are getting it at an incredible rate. 
 

Also, and this could be wrong as there are a lot of abnormalities in the market right now, but I doubt this effects your cost of gas price at the local gas station. Gas stations aren’t going to drop their cost to .50 cents a gallon because they’re getting it for practically nothing. They’re hurting too, and aren’t going to just give it away to those who are still buying right now.  
 

Yeah, at least for the short term, it looks like now the price of gas will be the federal gas tax plus whatever is your state and local gas tax. 

 

 

8,788 posts 21 reps Joined Nov 2009
Mon, Apr 20, 2020 2:32 PM

On a related note, nearly every state funds their transportation projects through gas tax and toll revenue. The lack of gas being sold and the lack of people on the road way is killing transportation projects now. 

I know Ohio, PA, Virginia, and North Carolina have pretty much scaled back all of their transportation projects. North Carolina went so far as to cancel most of all the projects that were going to be awarded this year. 

Sure companies are enjoying less traffic to get the current roadway projects done, but the pipeline of work is drying up now. 

The long touted infrastructure bill from Trump would be great right now....

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