Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: ripple effect

Ending Crude Oil Export Ban Already Helping U.S. Economy

This article appeared online at TheNewAmerican.com on Friday, July 8th, 2016:  

English: Crude oil tanker SAFWA moored off Rot...

Crude oil tanker SAFWA moored off Rotterdam.

Since the 1970s ban on exporting crude oil was lifted last December, the oil industry has given statists and anti-growth politicians a lesson in free markets: exports increased seven times their previous levels in just the first three months of 2016. And this in the face of an economy that is still suffering from the dregs of the Great Recession.

This was predicted by IHS (Information Handling Services), located near Denver, two years ago when the group stated that

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Revolving Credit Lines to Oil Industry Pose New Hazards to Banks

This article appeared online at TheNewAmerican.com on Tuesday, April 12, 2016:  

One Wells Fargo Center – Charlotte, North Caro...

One Wells Fargo Center – Charlotte, North Carolina

As earnings season on Wall Street starts, investors in the big banks are just now learning about unfunded revolving lines of credit (revolvers) that those banks extended to oil and energy related companies when times were better.

Ten of the largest U.S. banks, including JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, just disclosed that they have $147 billion in unfunded revolvers, which are likely to expand their exposure to the energy industry just when they would rather reduce it.

Those banks have been setting aside loan loss reserves amounting to billions in anticipation of the inevitable:

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Will Glencore’s Financial Troubles Trigger an International Collapse?

This article appeared online at TheNewAmerican.com on Wednesday, September 30, 2015:  

Investors in the stock of Glencore, the giant commodities mining and trading company founded by Marc Rich (disgraced friend of Bill Clinton), lost almost a third of their portfolios’ value on Monday, only to see the company’s stock price rebound strongly the next two days. The company’s statement seemed reassuring to those unwilling to dig deeper:

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The Ripple Effect of Rising Interest Rates

This article appeared online at TheNewAmerican.com on Wednesday, September 9, 2015:  

With financial talking heads now convinced that the Federal Reserve will finally increase interest rates as a result of the record-setting job openings report, few are asking about the “ripple effect” those increases might mean for individuals, for the auto and the housing industry, for companies and corporations, and, most importantly, for the debt-laden federal government.

If and when the fed announces upcoming interest-rate increases, in the short run, individuals might be tempted to accelerate their buying decision on cars and houses to take advantage of low rates before increases start flowing through to lenders in those sectors. In the longer run,

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Export-Import Bank’s Charter Expires, for the Moment

This article appeared online at TheNewAmerican.com on Wednesday, July 1, 2015: 

English: Export-Import Bank of the United Stat...

Visitors to the Export-Import Bank’s website on Wednesday would have found a terse notice that its charter had “lapsed” effective midnight, June 30, meaning that “the Bank and any of its delegated authority lenders cannot authorize any new transactions.” However, the bank is likely to have a very long life even after its death:

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China’s Economic Bubble Ready to Burst?

This article first appeared online at TheNewAmerican.com on Friday, March 13, 2015: 

 

The latest numbers out of China no longer mask its economic decline. Chinese industrial production “slowed at its sharpest rate in the first two months of the year since the global financial crisis” shouted the Financial Times on Wednesday.

Wang Tao, UBS’ chief economist on the Chinese economy, was dour: “Today’s disappointing data release highlights just how quickly domestic demand is deteriorating as the ongoing [real estate] downturn continues to spread its negative impact through the economy.”

In China that impact is huge,

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Oil Patch Activity Is Starting to Slow

This article first appeared online at TheNewAmerican.com on Friday, January 9, 2015:

U.S. Steel

In a letter to his union workers at U.S. Steel’s pipe and tube plant in Lorain, Ohio, Tom McDermott, president of United Steelworkers local 1104, was blunt:

The company has suddenly lost a great deal of business because of the recent downturn in the oil industry. What appeared just a few short weeks ago as being a productive year … has most abruptly turned sour.

So sour that U.S. Steel is idling 614 or its 700 workers in Lorain, along with all 142 of its workers in its Houston, Texas plant.

This is likely to be just the beginning. Even as U.S. Steel poured hundreds of millions into its gamble that producing “oil country tubular goods,” or OCTG, would reverse years of losses, other steel makers have done the same:

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New Jersey Driving Away Businesses

This article first appeared at The McAlvany Intelligence Advisor on Friday, January 9, 2015: 

Mercedes-Benz

On Tuesday, when Mercedes-Benz’s North American Chairman Stephen Cannon finally confirmed the rumors swirling around his company’s headquarters in Montvale, New Jersey, that he was going to move it to Atlanta, Georgia, he didn’t tell the whole truth:

New Jersey has been a wonderful home to our U.S. operations for our first 50 years, and still is today. The state has worked tirelessly with us as we evaluated our options.

 

Ultimately, however, it became apparent that to achieve the sustained, profitable growth and efficiencies we require for the decades ahead, our headquarters would have to be located elsewhere.

 

That brought us to Atlanta.

It was the location that sealed the deal, according to Cannon:

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Mercedes-Benz Latest to Leave New Jersey Owing to High Taxes

This article first appeared online at TheNewAmerican.com on Thursday, January 8, 2015:

Mercedes-Benz HighPerformanceEngines

The rumors swirling around the Mercedes-Benz headquarters in Montvale, New Jersey were confirmed by the company’s U.S. president, Stephen Cannon, on Tuesday: It would move its U.S. headquarters from Montvale to Atlanta, starting in July. The move would affect about 1,000 employees, about half of whom would likely be offered the opportunity to move with the company.

The decision to move was based on the high-cost and high-tax environment in New Jersey compared to Georgia, although one had to read between the lines of the company’s official statement to ferret that out:

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Crude Oil Prices: The Politics, Implications, and Backlash

This article first appeared online at TheNewAmerican.com on Tuesday, January 6, 2015:

With the price of crude dropping significantly below $50 a barrel, prognosticators have come out of the woodwork predicting drops to $40, $30, $20 a barrel, and even lower before it rebounds.

Jon Ogg, writing at 247Wall St.com, noted that the precipitous drop in crude oil prices “has serious implications for consumers and companies alike,” and not all of them are unblemished blessings. On the surface the winners are

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Energy Junk Bond Investors Heading for the Exits

This article first appeared online at TheNewAmerican.com on Sunday, December 14, 2014:

English: Oil well An oil rig used for training.

An oil rig used for training.

As crude oil prices continue their breath-taking fall, the ripple effect is beginning to reach far beyond the gas pump. On Friday crude oil dropped below $60 a barrel, causing some experts to predict $55 a barrel the following week and $40 a barrel within a few months.

That is putting pressure on oil producers to service their massive debts — some $550 billion incurred in the last five years — and scaring bond investors who are now looking to sell.

It’s a mania, said Tim Gramatovich of Peritus Asset Management who oversees a bond portfolio of $800 million: “Anything that becomes a mania — ends badly. And this is a mania.”

Bill Gross, who used to run PIMCO’s gigantic bond portfolio and now advises the Janus Capital Group, explained that “there’s very little liquidity” in junk bonds. This is the language a bond fund manager uses to tell people that

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Gun Accessories Maker Keeps its Promise to leave Colorado

Just when some of its customers were beginning to question the company’s sincerity about moving out of Colorado in response to anti-gun legislation passed last summer, Magpul Industries announced it has finalized its moves to

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Walmart’s Two New Stores in Washington DC Embarrass a Preacher

This article first appeared at The McAlvany Intelligence Advisor on Monday, December 9th, 2013:

 

When the Rev. Graylan S. Hagler, pastor of the Plymouth Congregational United Church of Christ, saw the two new Walmart stores opening in DC this past week, he admitted that some of his people were going to shop there despite his protestations:

I know some of my congregants are going to be shopping there. I have not called for a boycott or anything like that.

But … when you make this corporation richer, it’s at the expense of making somebody [else] poorer.

Not according to the shoppers, hundreds of whom voluntarily

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The Bubble in the Caribbean: Puerto Rico

This article was first published at The McAlvany Intelligence Advisor on Wednesday, October 30, 2013:

The complacency of municipal bond holders ended in July with the filing for bankruptcy by Detroit, an unhappy town of just 700,000 owing more than $18 billion to investors. Haircuts there have variously been estimated to be between 15 and 60 percent.

Since then, those holders have been looking around to find the next shoe to fall, and they have found it:

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As Obamacare Kicks In, Hospitals are Forced to Reduce Budgets, Cut Jobs

Just as the economy appears to be improving slightly, one of the prime drivers – the healthcare industry – is faltering, according to John Howser at Vanderbilt University Medical Center: “While the rest of the U. S. economy is stabilizing or improving, health care is entering into a recession.”

Vanderbilt is in the process of eliminating 1,000 jobs by the end of the year as it trims its operating expenses, thanks to cuts in reimbursements and employee mandates under Obamacare.

Indiana University Health has already

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The Far-reaching Consequences of the Fracking Boom

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, September 25th, 2013:

Even the people at IHS, Inc. (one of the world’s preeminent global consulting and forecasting firms) missed perhaps the most important impact the fracking boom is likely to have: it just might dampen the enthusiasm for the empire builders in Washington to continue to

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The North Dakota ripple effect

The Minneapolis Fed has analyzed unemployment and wage rates in North Dakota and surrounding states and have discovered – eureka! – that there is a definite ripple effect that extends outward for hundreds of miles. They even have a graph showing their results:

Weekly wages in the Bakken oil fields have risen by an amazing 140% in just the last decade, while unemployment has dropped to under 2 percent. The impact, however, isn’t limited just to the immediate area. As far away as Rapid City, South Dakota, unemployment is dropping and wages are rising (albeit more slowly than unemployment is dropping).

The farther away from Bakken, however, the more other more local factors are felt:

As distance increases, many  other factors likely explain wage gains or unemployment rates relative to  distance from the Bakken. For example, more agriculture-intensive counties are  also benefiting from the strong farm sector.

Just imagine the impact in California, for example, if the greenies there would like developers explore the newly discovered oil shale opportunities there. And if the greenies relent and let Colorado develop its resources, the same ripple effect would like occur.

Come to think of it, wouldn’t this happen all across the country, if governments (national, regional and local) would just get out of the way?

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.