#Shale Oil Peak Signals Serious #Economic Decline

"It will severely impact the world economy because with U.S. shale oil accounting for 66% of the rise in global oil production over the past decade, it was the leading driver for economic growth"

Global Economic Growth In Serious Trouble When U.S. Shale Oil Peaks & Declines

The global economy would be in serious trouble if it weren’t for the rapid growth of U.S. shale oil production.  Since the 2008 financial crisis, U.S. shale oil production has increased by more than 6 million barrels per day.  Without these additional barrels of oil, the massive money printing and asset purchases by the central banks would not have been as successful in propping up the economy and markets.

We must remember this simple fact; energy drives the markets, not finance. Finance steers the market.  So, for the economy to expand, there must be oil production growth.  However, it would be unwise for the market-economy to rely upon the U.S. shale industry as the leading driver of global oil production growth for the foreseeable future.

Why?  Well, there are several reasons, but let’s first look at how much the increase in U.S. shale oil production has accounted for the rise in global oil supply since 2008. Of the 9.6 million barrels per day (mbd) of global oil production growth 2008-2017, the United States supplied two-thirds or 6.3 mbd of the total:

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THE FALSE PROMISE OF SHALE OIL

#MarketWatch: Massive Corporate #Bond Losses Expected With #Recession

“Corporate debt isn’t going to cause the next recession, but it’s where the pain will be in the next recession.”

 By Peter Vercoe, 

Yvonne Man, and 

Rishaad Salamat

U.S. Recession Would Spur ‘Massive’ Corporate Bond Losses, Eisman Says

The U.S. corporate debt market will suffer “massive losses” if the world’s biggest economy falls into recession, said Steve Eisman, the Neuberger Berman Group money manager who famously predicted the collapse of subprime mortgages before the 2008 financial crisis.

While the U.S. financial system is strong, “that doesn’t mean we won’t have a recession,” Eisman said in a Bloomberg Television interview in Hong Kong on Thursday. “And in a recession I think there will be massive losses in the bond markets because there’s a lack of liquidity.”

“You will see big losses in things like triple-B corporate debt, high-yield etcetera, but you need a recession first,” he said. “Corporate debt isn’t going to cause the next recession, but it’s where the pain will be in the next recession.”

Eisman’s early bets against the housing market before the 2008 crisis were chronicled in Michael Lewis’s 2010 book “The Big Short,” which highlighted money managers who profited from the market turmoil. A character based on him was played by Steve Carell in the movie adaptation of the book.

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