Financial Markets Meltdown

[Jim Blake]

Air Canada has announced 15,000 people will be layed off because of Covid- 19 spread.

I really feel sorry for that and the devastation to families affected.

Much more to I am afraid.

[sillyak]

I think we are currently looking at a bull trap.

[Jigsalot]

https://www.spglobal.com/marketintel...virus-57822659
Not good news for the oil sector. Hope alberta is not next to shutdown.

[fishtank]

Originally Posted by Jigsalot

https://www.spglobal.com/marketintel...virus-57822659
Not good news for the oil sector. Hope alberta is not next to shutdown.

everything will be ok... Trump said he's going to give Putin a call.

[thenaturalwoodsman]

Originally Posted by fishtank

everything will be ok... Trump said he's going to give Putin a call.

I have to admit the run up in oil stocks since this surprises me!

[fishtank]

TC energy announce keystone XL to go ahead
https://ca.finance.yahoo.com/news/tc...l?guccounter=1

[elkhunter11]

Originally Posted by thenaturalwoodsman

I have to admit the run up in oil stocks since this surprises me!

Low oil prices, yet oil stocks are climbing, someone is predicting that the industry will recover.

[thenaturalwoodsman]

Originally Posted by fishtank

TC energy announce keystone XL to go ahead
https://ca.finance.yahoo.com/news/tc...l?guccounter=1

Originally Posted by thenaturalwoodsman

I have to admit the run up in oil stocks since this surprises me!

Well makes sense for the run up on CNRL and Suncor the last 2 days. Obviously some must have known yesterday already (news was announced today), they both ran up yesterday as well.....

[MooseRiverTrapper]

Storage is full, no where to put it, WCS is worthless, most Canadian energy stocks up 20% today.

[thenaturalwoodsman]

When do the oil inventories come out? I think it's tomorrow an hour after the open? Could be interesting.

[straight]

Originally Posted by fishtank

everything will be ok... Trump said he's going to give Putin a call.

This is wrong, no negotiation with those bloody Russians. It is free market, we should just enjoy the ride.
Oops, forgot to attach a smile...

[KGB]

Originally Posted by fishtank

everything will be ok... Trump said he's going to give Putin a call.

And he actually did! I guess we will see sooner rather than later what comes out of it.

[Zip-in-Z]

March 31st, what today looked like ...

D.












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[Full Metal Jacket]

Couple points to keep in mind...

Oil market contango spread is as big as it has ever been...nobody sees the current prices as sustainable...Saudi is trying to re-vamp their economy/society from oil revenues (hence the Aramco IPO)...they need money...Russia are just plain greedy...they want money too but will sacrifice people/capital to advance their position...definitely more scary than the Saudi's.

IMO the Keystone XL announcement is huge...the oilsands and the LNG, on the gas side, are the only viable hydrocarbon industries in Canada...the mom and pop oil and gas co's are boned...remember coal bed methane!

In regards to overall markets, remember that markets are forward discounting mechanisms...that is they are less concerned with where things are at today versus 9 months down the road...this is why so many aren't pulling the pin right now...we didn't suffer a financial crisis that crippled the credit markets, as in the past,...we suffered a crisis event...plus as someone else mentioned, good luck getting anything out of fixed income with what the interest rate environment will look like for the foreseeable future.

Steel yourselves ladies and gentlemen...we'll be alright.

[Jim Blake]

Inter Pipeline is has already shut down some smaller infrastructure, and is preparing shutdown programs for additional larger infrastructure.

Not sure what the other players are doing.

[straight]

Originally Posted by Full Metal Jacket

Couple points to keep in mind...

...Saudi...they need money...Russia are just plain greedy...they want money too but will sacrifice people/capital to advance their position...definitely more scary than the Saudi's.

So, Saudi are good guys and they NEED money, and Russians are bad guys and they WANT money and they really don't need it. Correct?
What about Canada and US?
Could you, please, stop painting world black and white.

[Full Metal Jacket]

Originally Posted by straight

So, Saudi are good guys and they NEED money, and Russians are bad guys and they WANT money and they really don't need it. Correct?
What about Canada and US?
Could you, please, stop painting world black and white.

You said 'good' and 'bad', not me...grow up.

Canadian and U.S. companies compete in a 'manipulated' hydrocarbon market with players such as OPEC and Russia. Those two worked together to establish an extension of the cartel commonly referred to as OPEC+.

Look up the word cartel, put it into the context of the recent actions of OPEC+ and hopefully you can grab a clue.

[Jigsalot]

Originally Posted by Full Metal Jacket

You said 'good' and 'bad', not me...grow up.

Canadian and U.S. companies compete in a 'manipulated' hydrocarbon market with players such as OPEC and Russia. Those two worked together to establish an extension of the cartel commonly referred to as OPEC+.

Look up the word cartel, put it into the context of the recent actions of OPEC+ and hopefully you can grab a clue.

Hey maybe you should look up the word OPEC.
Players such as OPEC and Russia. ? What are you talking about
OPEC consists of multiple nations and maybe you are the one that needs to grab a clue

[thenaturalwoodsman]

Oil inventories Due tomorrow.
New quarter starts tomorrow.
USA death tolls rising.

Also the last 2 days with short coverings before month end to book profits and make bonuses on Bay Street, tomorrow could definitely look a lot different than the last few sessions. But who knows.!.!.!.

[Full Metal Jacket]

Originally Posted by Jigsalot

Hey maybe you should look up the word OPEC.
Players such as OPEC and Russia. ? What are you talking about
OPEC consists of multiple nations and maybe you are the one that needs to grab a clue

Seriously?...google OPEC+...wow.

[straight]

Originally Posted by Full Metal Jacket

You said 'good' and 'bad', not me...grow up.

Canadian and U.S. companies compete in a 'manipulated' hydrocarbon market with players such as OPEC and Russia. Those two worked together to establish an extension of the cartel commonly referred to as OPEC+.

Look up the word cartel, put it into the context of the recent actions of OPEC+ and hopefully you can grab a clue.

Who manipulates oil marked? Who is a #1 oil producer in the world? Who puts sanctions against other oil producing countries? Answer these questions and you don't need to ask another.

[Austin]

What about thoughts on Chevron and Exxon as a buy?

[Full Metal Jacket]

Originally Posted by Austin

What about thoughts on Chevron and Exxon as a buy?

If you are willing to endure some short/medium term pain...they are ridiculously cheap, will be bargain shopping the busted shale companies and pay a nice dividend. Oil is far from dead and will be a key commodity for decades to come.

[Justfishin73]

Lets keep her on track boys.

[MooseRiverTrapper]

100% negative news surrounding air canada and the world. Yet share price goes up.

[Jigsalot]

Originally Posted by Justfishin73

Lets keep her on track boys.

👍. All good. I’m sticking to my plan and waiting to get back in.

[Map Maker]

I'm starting to look at the balance sheets of the smaller oil/drilling companies.
I know there can be some manipulation of the numbers but some companies are a lot strong then others even though the % drop is the same.

[260 Rem]

Originally Posted by MooseRiverTrapper

100% negative news surrounding air canada and the world. Yet share price goes up.

Maybe Air Canada hauls a lot of freight? They are well managed and positioned to bounce back in a space that will have weeded out the weak.

[Deer Hunter]

There has been speculation of help for energy companies coming from Ottawa over the past few days. This would inject big dollars into a struggling sector with no immediate dilution to the shareholders.

https://www.theglobeandmail.com/busi...a-promised-is/

The oil patch is getting twitchy as it waits for Ottawa to deliver a much-anticipated aid package while the value of its main oil sands-derived product approaches zero.

According to Finance Minister Bill Morneau, a multibillion-dollar aid package, including guarantees that will allow banks to keep lending to energy companies, will be announced any time now – “I’m talking about hours, potentially days,” he said last Wednesday.

But five days later, Mr. Morneau’s boss was tight-lipped on substance and timing when asked about it during his daily briefing on the COVID-19 crisis.

Prime Minister Justin Trudeau pointed out workers will be eligible for emergency wage subsidies being offered across the economy and acknowledged that the oil and gas industry is particularly hard hit because of the coincidental and calamitous drop in crude prices. He said the government “will be doing more.”

But time is growing short. Energy demand is plummeting and oil is quickly filling up any and all available storage, raising the likelihood of deep cuts in production. Cash flows in the industry have dried up as the price of a barrel of Western Canada Select heavy oil has drooped to below US$4 for the first time. This means that most operations, save those hedged at higher prices, are pumping out far more red ink than oil.

As the industry waits, energy-focused private equity firm JOG Capital has gone public with its suggestion for lifting the small and medium-sized oil companies that are most vulnerable to the crash from the abyss. It made the proposal last week after the government made a call for suggestions from the industry.

Under JOG’s proposal, the federal government should focus on the $75-billion in tax deductions that junior and mid-sized oil companies have on their books. These so-called tax pools stem from such things as non-capital losses and exploration credits. The deductions are used when profits are fat, which the industry has not generated a lot of in the past half decade.

Investors generally value tax pools on corporate books at 10 per cent to 20 per cent of face value, which could mean a cost to the government of $7.5-billion to $15-billion, according to JOG.

“A financial injection of this magnitude would be a massive positive for the small and mid-cap sector,” JOG executives Kel Johnston and Craig Golinowski said in their letter to Natural Resources Minister Seamus O’Regan.

Meanwhile, the industry could resume being taxable and contributing to the public purse when conditions improve.

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The proposal, and others on the table, will anger critics who say the industry has already benefited from subsidies in the form of tax breaks over the years, and has not kept its environmental house in order.

But the tax pool buyout could come with conditions to prevent a similar public backlash to the U.S. Treasury bailout of the financial industry in 2008 and 2009, when some executives pocketed lavish bonuses. The energy companies could, for instance, commit to limiting executive pay and keeping workers on the payroll. They could also agree to use, say, 10 per cent of the funds for cleaning up old oil and gas wells, JOG suggests.

So far the industry has responded to the twin threat of coronavirus and the oil price collapse with about $6-billion in reductions in planned capital spending and dividend cuts. Some companies have reduced executive pay. So it is not a case of the industry just sitting on its hands and waiting around for a bailout.

Last week, Mr. Morneau said aid would include backstops for the banks that lend to oil and gas companies as a way to keep credit available when it is needed most. He mentioned the risk to the smaller players being particularly acute. He has also talked about some form of funding for abandonment and reclamation of aging wells is under consideration. This could address both.

Aid for the energy sector is drawing scorn from many Canadians who have said the government should not prop up a polluting industry that is in its twilight years, or that any help should be bestowed only on the condition that companies commit to much deeper emissions cuts.

The problem is that this would be negotiated under duress and would use the tens of thousands of livelihoods that depend on the industry as leverage. The result could hardly be a bargain both sides would be happy with.

Now it is a matter of survival first, then dealing with the old long-term problems when the ground stops shaking.

[elkhunter11]

Originally Posted by 260 Rem

Maybe Air Canada hauls a lot of freight? They are well managed and positioned to bounce back in a space that will have weeded out the weak.

Or perhaps people are aware that the government won't let Air Canada fail?