Monday, April 20, 2020

What Just Happened?

The phone was buzzing today!  The oil industry just had its 9/11 moment with much more likely to come. Many traders had been stating that today could happen as the oil contracts approached their expiration point.  The experts can explain what happened much better than I can. I've provided a link below to a good thorough explanation.

Many don't realize that the industry had major issues prior to the Saudi/Russia price war and the coronavirus.  Fifty dollars per barrel was going to be a problem due to our massive debt load.  My prior posts cover that topic in detail. 

Well beyond our industry, we have an interesting road ahead where "debt and derivatives" will cause much chaos.  I call them the "Two D's".  The world's financial system is now very complex and when people use the term "complex instruments", be worried.  Watch the movie "The Big Short" tonight to refresh your memory of what can go wrong when the derivatives "canoe" tips.

Be safe.  Be smart.  Be kind.  Be patient.  Stay healthy.

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