Recession just around the corner?

[ZRrrr]

Good video on what happened with Quantitive Easing in Europe, how it props up bank p[rofits and how there are groups looking to change the way the financial system works.

https://www.youtube.com/watch?v=4l06RhFoLE4#t=314

If one digs deep enough, you can find out why our banks are not loaning so readily with the low interest rates.
They can't, and neither can any in the USA. They are however lending overseas.

The Canadian and American gov't printed massive amounts to 'save' the economy with QE. If the banks started reinvesting ALL that money they were given back into the North American economy, inflation would be through the roof, on a scale that most can't comprehend, let alone believe.

Added Edit
The truth is out: money is just an IOU, and the banks are rolling in it | David Graeber | Comment is free | The Guardian

Some reading for those that are interested.

 

[pistoncontracting]

Good watch. Not just Europe though, US and Canada as well.

When people discover they can vote themselves free money, it's all over. Most think of that, as welfare voters wanting a free lunch for the Libs or NDP. Thats is a SMALL problem, compared to elected officials making policy to fill there own pockets.

 

[teeroy]

my bud in Red Earth owns and runs a potable water hauling business. one of the big oil companies he services has asked him to lower his rates by 25%....that's f'n crazy. he is livid

 

[TylerG]

my bud in Red Earth owns and runs a potable water hauling business. one of the big oil companies he services has asked him to lower his rates by 25%....that's f'n crazy. he is livid

guess they go without potable water!

 

[pistoncontracting]

my bud in Red Earth owns and runs a potable water hauling business. one of the big oil companies he services has asked him to lower his rates by 25%....that's f'n crazy. he is livid

I feel bad for him. So what does a guy do??
I know what I did, but that road is definitely no for everyone.

 

[X-Treme]

guess they go without potable water!

No shyt!!!

 

[teeroy]

guess they go without potable water!

some other company with lower rates will get the work if he doesn't play ball.

 

[TylerG]

some other company with lower rates will get the work if he doesn't play ball.

sad how absolutely everything has become a cut throat market, Company A undercutting Company B by 2% and getting the jobs even though Company A has worked with the group for 100 years.........

Sickening really.

 

[Puba]

my bud in Red Earth owns and runs a potable water hauling business. one of the big oil companies he services has asked him to lower his rates by 25%....that's f'n crazy. he is livid

All of the Major Oil Players have done this to contractors, started a week and a half ago. If you don't follow suit you know your not going to get the work.
And all while the price of gas is going up!!!

 

[ZRrrr]

GDP numbers are really a poor indicator of a countries economy as they do not take into account many other factors, however it seems to be the standard used. GDP of the US is retracting whereas 2015 will the year that the GDP of China exceeds that of the USA. Their middle class is set to grow the most of any country. This has HUGE implications to any manufacturing sector outside of Asia, and the economy of those countries. Not to mention that the cost of cheaply manufacturerd goods could start to rise....which in turn hurts those countries whose middle class is retracting.

As the above video indicates, if these stimulus monies were put back into the hands of actual people, economies could thrive!

 

[800HMX]

my bud in Red Earth owns and runs a potable water hauling business. one of the big oil companies he services has asked him to lower his rates by 25%....that's f'n crazy. he is livid

Happening across the board. Oil and Gas price is down around 50% and that means 50% less cashflow. Vendors will be asked/required to reduce rates so that supply costs (cost to produce oil or gas) get closer in line with commodity prices. Each vendor will need to make their own decision, some will reduce their rates, some won't, some will continue working, some won't. Right now, for most properties, supply cost exceeds the commodity price and that means oil and gas is being sold at a price less than it costs to produce. Eventually, this will exhaust any savings that might be in the bank for the next program. So to slow the "bleeding," you lower supply cost (and associated rates) and try to wait out the cycle.

When supply cost exceeds commodity price, the simpliest thing to do "economically" is to stop capital activity. Sometimes it is cheaper to pay a penalty than continue with the operation (starting to see some of this now). The majors can wait longer than some service companies because there is still income coming in from existing production. For most service companies, no activity equals no income and that equals layoffs and equipment sales. But layoffs are not just limited to service companies, the majors are reducing expenses and that includes laying people off. The longer the supply cost exceeds the commodity price the deeper the cuts.

Oil price needs to get to $70 and gas to $4.00 before there is any profit/savings for the next program. The longer the down cycle, the deeper the cuts, the longer it will take to recover. Historically, borrowing has been used to shore up the difference, but that really isn't an option anymore (banks, priviate equity firms are really hesitant to lend money). When the price recovers, and it will, it may take several months for any program to start. Best case is probably some activity in Q4.

 

[rzrgade]

After a few years of reading on here, many times over on how the BIG OIL COMPANYS are ripping everyone off,you would think there would be some happy campers...........lol .
Guess 175 k a year jobs were not that bad after all..............

 

[deaner]

Im sorry but I dont feel that bad for the contractors that are now having to bring their prices into line. It has been ridiculous how high rates have got, its about time there was a correction. What would the hourly rate be for a potable water truck in the patch? Im guessing 75% of that is still pretty good money. Plus the fuel prices are a lot less, and if things are still that tight they can always reduce the driver's wage to under 40 bucks an hour.

I think for the most part the correction will be a good thing. And for the bleeding hearts that are going to come on and wishing bad things upon people........the economy has been in absolute ridiculous runaway mode for how long now? You seriously cant have a nest egg set aside to prepare for something like this?

 

[Bnorth]

Im sorry but I dont feel that bad for the contractors that are now having to bring their prices into line. It has been ridiculous how high rates have got, its about time there was a correction. What would the hourly rate be for a potable water truck in the patch? Im guessing 75% of that is still pretty good money. Plus the fuel prices are a lot less, and if things are still that tight they can always reduce the driver's wage to under 40 bucks an hour.

I think for the most part the correction will be a good thing. And for the bleeding hearts that are going to come on and wishing bad things upon people........the economy has been in absolute ridiculous runaway mode for how long now? You seriously cant have a nest egg set aside to prepare for something like this?

Yup, I work in another industry and when you compare rates to O&G it seems like they are close to 25% over valued anyway. It sucks yes but a lot of these companies did it to themselves by being greedy and jacking their rates over the last few years. The gravy train has come to an end.

 

[deaner]

And I dont begrudge anyone that was able to get while the getting was good. At 140 dollar oil the contractors might as well have got a piece of the pie and passed it on down the line. But to say that you just cant afford to operate a water truck for less that 200 an hour (or whatever going rate is) is just ridiculous.

 

[ABMax24]

Funny thing is so many people think they are God's gift to the oil-patch and won't take a pay cut because they are irreplaceable, sad part is 90% of us working in it are just glorified laborers, most of it ain't rocket science by any means, we are all replaceable, and the people with this attitude are often the first let go.

 

[moto.racerx]

my bud in Red Earth owns and runs a potable water hauling business. one of the big oil companies he services has asked him to lower his rates by 25%....that's f'n crazy. he is livid

Why would he be livid?

 

[teeroy]

Why would he be livid?

if he goes by what they want he'll be under 100/hr for a tri drive.

 

[teeroy]

no to mention their rates never came back up from the last "recession" in 2008

 

[ABMax24]

no to mention their rates never came back up from the last "recession" in 2008

Trucking rates (all rates for that matter) are just like oil prices, its supply and demand, if there are 20 trucks in line for 18 jobs then rates will lower accordingly until 2 give up and find work in another field.