US shale oil hitting the skids, page-118

There is a huge knock on effect from shale failing in the USA and the oil sands in Canada.

Everyone is concentrating on the exposure of the bond holders and the banks directly in the oil space but what about the periphery.

A lot of towns expanded or sprung up over the past years and I am sure they all didn't have a spare $500K to set up house. And what about businesses eager to cash in I'm sure there were a few loans drawn down to facilitate the boom.

This cycle has not matured enough for a lot of these people at oil's periphery to have fully serviced the loans.

Probably no where as big as the subprime but big enough to have a material effect on the economy.

The next documentary out of the US will be about the aftermath of the oil boom with all the unfortunate hard luck stories and the ghost towns that are left in its wake. It will look like a moonscape.

We still haven't learnt anything from history.

In the meantime the talkers talk, the spruikers spruik, the shorters short and the traders trade until something breaks and round and around we go.

Cheers
BW