Oil's energy contribution has declined by about 12% since 1999. The world's economies have also declined by about 12%. (Using conventional metrics, which are time delayed determinations, this will only be seen in hind sight). The massive destruction of asset values now occurring testifies to it happening.
Peak is well behind us, world economies have peaked and will continue to decline.
Joined: Apr 27, 2007 Posts: 4351 Location: The Great Sonoran Desert
Posted: Mon Sep 15, 2008 10:46 pm Post subject: It's BUNKER time !!!
Really folks... Read these two pages on AIG: TF Now you understand why I said your FICO means squat...and you should buy food.
For all you morally superior fvcks who think a 750 is going to do you any good, Write it on the back of a match book - grab your last loaf of bread and smugly enjoy your own personal fade to black. _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Joined: Dec 02, 2005 Posts: 6786 Location: Oil-addicted Southern Californucopia
Posted: Mon Sep 15, 2008 11:29 pm Post subject: Re: It's BUNKER time !!!
Why are you so anxious and eager to see a total, ultra-catastrophic, overnight collapse of all systems? You've been wishing and hoping for it since you first started posting here. _________________ "Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
Joined: Sep 25, 2004 Posts: 4725 Location: Boston, MA
Posted: Mon Sep 15, 2008 11:30 pm Post subject: Re: It's BUNKER time !!!
Here's your problem:
Quote:
Credit-default swaps on AIG, the biggest U.S. insurer, soared on concern that it may be the next big financial firm to run short of capital after $587 billion in contracts guaranteeing home loans, corporate bonds and other investments plunged in value. Standard & Poor's and Moody's Investors Service have said AIG's credit ratings may be cut if its mortgage assets fall further or if potential capital needs aren't addressed. AIG may have to post more than $13 billion of collateral following a downgrade, it has said in regulatory filings.
Turnaround Plan: Credit-default swap sellers demanded 12.5 percentage points upfront and 5 percentage points a year to protect AIG bonds from default for five years, according to broker Phoenix Partners Group. That means it would cost $1.25 million initially and $500,000 a year to protect $10 million in AIG bonds for five years. Yesterday, it cost $688,000 a year with no upfront payment, according to CMA Datavision.
AIG's market value shrank by 46 percent this week on concern its credit ratings will be cut. Chief Executive Officer Robert Willumstad has promised to deliver a turnaround plan on Sept. 25 after the firm posted three straight quarterly losses totaling $18.5 billion. The plan may be announced sooner, a person familiar with the company said. "As distressed as they are, raising new capital could be extremely hard,'' said Tim Backshall, chief strategist at Credit Derivatives Research LLC in Walnut Creek, California, today in an e-mail.
Investors no longer trust AIG to pay its debt on time (or at all). That means they won't be able to borrow money at favorable rates. If they can't borrow money, they're screwed.
AIG has over a trillion dollars in assets. If they try to sell a small fraction of those to raise capital, the value of the remaining assets will fall. This leads to a cascading effect. AIG is too big to liquidate without causing the price of some of these more exotic financial assets to plummet.
The ripple effects could be huge. _________________ "www.peakoil.com is the Myspace of the Apocalypse."
Posted: Mon Sep 15, 2008 11:35 pm Post subject: Re: It's BUNKER time !!!
Zardoz wrote:
Why are you so anxious and eager to see a total, ultra-catastrophic, overnight collapse of all systems? You've been wishing and hoping for it since you first started posting here.
I admit occasionally I have the same wish, just to get it over with. Of course, then I stop drinking and realize that this would suck even more than the anticipation.
Posted: Tue Sep 16, 2008 12:13 am Post subject: Re: It's BUNKER time !!!
Yeah that was what I got out of it. A prudent banker thing to do would to do would be not to lend at all. If I knew you were about to be unemployed and you needed a loan there is no way I would lend you $1000 in cash.
I don't think anybody is wishing for an ultra catastrophic melt down. It isn't any anybody's best interest no matter how much they really want to be right about the whole thing.
The bad thing is that he is right about the whole thing. This isn't a melt down anymore. The powers to be are managing the fall out. The last few weeks have been like watching the Twin Towers go down in slow motion.
Joined: Oct 18, 2004 Posts: 2130 Location: kiwibush
Posted: Tue Sep 16, 2008 12:28 am Post subject: Re: It's BUNKER time !!!
Zardoz wrote:
Why are you so anxious and eager to see a total, ultra-catastrophic, overnight collapse of all systems? You've been wishing and hoping for it since you first started posting here.
Presumably he has the right to express his disdain for the system? Or should he fall in line? So much for democracy! _________________ Bugger me, I hear oil's runnin out mate!
Sept. 16 (Bloomberg) -- American International Group Inc.'s credit ratings were downgraded by Standard & Poor's and Moody's Investors Service, threatening efforts to raise emergency funds to keep the company afloat.
The ratings reductions occurred after two people familiar with the situation said that the biggest U.S. insurer by assets is seeking $70 billion to $75 billion in loans arranged by Goldman Sachs Group Inc. and JPMorgan Chase & Co. to replenish capital.
Also this little item from the same article:
Quote:
"I don't know of a major bank that doesn't have some significant exposure to AIG,'' said Kenneth Lewis, chief executive officer of Bank of America Corp., in a CNBC interview. An AIG collapse would "be a much bigger problem than most that we've looked at,'' he said.
It's lookin' more and more like 2008 may not be a very merry Xmas... _________________ "It means buckle your seatbelt, Dorothy, because Kansas? Is goin' bye-bye... "
Joined: Jun 23, 2007 Posts: 112 Location: Australia
Posted: Tue Sep 16, 2008 12:39 am Post subject: Re: It's BUNKER time !!!
It's funny you mentioned bunkers, it's the next thing on my list of preps.
The Australian markets are down 2% here. Our major banks aren't too entrenched with lehman but AIG is another story.
I think peak oil.com should start writing fortune cookies or perhaps we could travel around in a circus and tell fortunes for $5. _________________ This story will be told for generations!
Posted: Tue Sep 16, 2008 12:47 am Post subject: Re: It's BUNKER time !!!
It's BUNKER time ?? it really isn't IMHO, ask your self do you still have your health, your friends and family, if so then all is not lost.
money can be made, money can be lost and money can made back again! Unlike oil which once its lost that it, unless of course the abiotic theory of oil really is responsibe for "reserve replacement" _________________ "I'm 100% sure that unsustainable conspicuous consumption of natural basic resources will eventually lead to a proverbial hell on earth for those people who get stuck with the mismanagement mess of mankind not being stewards of the environment!"
Joined: Sep 03, 2007 Posts: 640 Location: Sunny Virginia, USA
Posted: Tue Sep 16, 2008 4:20 am Post subject: Re: It's BUNKER time !!!
americandream wrote:
Zardoz wrote:
Why are you so anxious and eager to see a total, ultra-catastrophic, overnight collapse of all systems? You've been wishing and hoping for it since you first started posting here.
Presumably he has the right to express his disdain for the system? Or should he fall in line? So much for democracy!
You need to learn more about the differences between democracy, censorship and peer pressure. _________________ When somebody makes a statement you don't understand, don't tell him he's crazy. Ask him what he means. -- Otto Harkaman, Space Viking
Posted: Tue Sep 16, 2008 6:37 am Post subject: Re: It's BUNKER time !!!
The government will do anything and everything possible to preserve the status quo. As long as the Colonial pipeline is down, they will use it to pump cash if they have to.
The money will keep moving for a while, and in ever increasing volume. We still have inflation extremes, extreme unemployment, factory shutdowns, and military action ahead of us. _________________ If you want a picture of the future, imagine a boot stamping on a human face--for ever."
-George Orwell, 1984
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