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Firms on Wall Street helped bankroll America's energy boom, financing very expensive drilling projects that ended up flooding the world with oil.
Now that the oil glut has caused prices to crash below $30 a barrel, turmoil is rippling through the energy industry and souring many of those loans. Dozens of oil companies have gone bankrupt and the ones that haven't are feeling enough financial stress to slash spending and cut tens of thousands of jobs.
For instance, Wells Fargo (WFC) is sitting on more than $17 billion in loans to the oil and gas sector. The bank is setting aside $1.2 billion in reserves to cover losses because of the "continued deterioration within the energy sector."
JPMorgan Chase (JPM) is setting aside an extra $124 million to cover potential losses in its oil and gas loans. It warned that figure could rise to $750 million if oil prices unexpectedly stay at their current $30 level for the next 18 months.
originally posted by: Ghost147
The price of gas two years ago was about $1.39 (per liter), it is now $0.69 (per liter) here.
Admittedly, I wasn't paying attention to gas prices when I was younger, but I have never seen it that low.
originally posted by: MOMof3
Of course they are working up to bailout why let it leak out otherwise. Do colleges make financiers dumb or do they become so blinded by greed?
No bailouts anymore, certainly in Europe, governments have just signed up to Bail Ins, meaning any depositors money can and will be used to keep the banks afloat ...
originally posted by: UnBreakable
a reply to: xuenchen
That's ok. I'm sure they'll get bailed out by taxpayer money again. They're too big to fail.
originally posted by: xuenchen
a reply to: markosity1973
Saudi Arabia has enough open desert to power the world.
All they need is solar panels.
Total Surface Area Required to Fuel the World With Solar