Frackers Prospects in a Cheap Oil World

Frackers Prospects in a Cheap Oil World


The fracking industry has been a hard industry to follow for many investors, especially those focused entirely on investing in energy. What was quickly a boom in the United States has turned out to be on its way to be a fast bust. The boom was in part due to a low interest rate environment. Many of these new companies were able to secure easy financing and none of the lenders really cared because of how much money frackers were making. As oil has fallen to the mid $30 range the conditions that were once set in motion have changed drastically and are going to affect the future prospects of frackers everywhere.

It was announced by the International Energy Agency (IEA) that the over abundance of supply has outpaced the demand already by 1.5 million barrels on a daily basis, just starting from the start of this year. IEA went on record to say that the oil market could drown itself in its only supply. The question on everyone’s mind is just what happened?

The Overview of the Situation

In terms of the oversupply it is partly due to the frackers pumping out all of this U.S. crude oil into production, already doubling the amount produced in the past five years. Not only that but Saudi Arabia has been attempting to out maneuver U.S. frackers and get them out by flooding the market. In just Iraq alone the output was upped to 4 million barrels per day, something that is more than double their previous output for production. Libya increased as well followed by Iran getting out of their long sanctioned ties and looking to start producing oil again.

It was common knowledge over a year ago that in order to remain profitable, frackers needed oil prices to be at around $55 to $60 a barrel. It’s a wonder that any of these fracking companies are still even in existence with the absurd price drop as of late. Some of the reasons these companies are holding on have to do with frackers gaining new technology that is cutting costs and would allow them to profit on a minimum of $40 a barrel instead. That isn’t to say that some companies have been weeded out because that is still the case.

There is a dilemma at hand though. If prices to go back up then frackers are going to start producing more and then inadvertently drive the prices back down again. There is no way right now to justify the price increase since it comes down to basic economics and there is no increased demand right now. There have been large layoffs paired with bankruptcies and companies collapsing under the market pressure. If demand would somehow increase for some reason then there would be an argument for prices to reach the higher levels they once reached. There are a lot of factors that came into play that included China’s rapid growth and the Federal Reserve stimulus, both putting up the price of oil a few years ago.

Growth Concerns, Financials Push Wall Street Lower

Growth Concerns, Financials Push Wall Street Lower


wall street

On the one hand, the European financial sector is facing erratic profitability crisis, while; at the same time, the U.S. stocks are dropping at a rapid pace, as well. Global growth is being highly impacted by the ever – increasing dropping market shares and expensive monetary policies imposed by banks. Signs of stress can be seen in all major nations and future of the financial sector seems unpredictable and uncertain.


Due to numerous factors, even the U.S. Federal Reserve has been slightly secretive about their decisions. No one can be absolutely certain anymore regarding the future of rates. The situation has further worsened, especially taken into account the sudden drop of 2.6 percent in S&P financial index. This is undoubtedly the worst performing year as far as S&P sectors are concerned.


Investors are adapting to a laid – back kind of an attitude. This is as a result of the increasingly uncertain monetary policies. This subsequently is leading to question of whether the next big recession is in order to follow.


“I think that’s what financials are reflecting – that their net interest margins are going to be further compressed under collapsing bond yields,” said Mark Luschini, Chief Investment Strategist at Janney Montgomery Scott in Philadelphia.


Stocks of leading internet forums such as Facebook and Amazon had been marked as a form of strength in the previous year. In fact, fund managers have even said that last year’s gains, especially of the internet stocks such as Facebook have resulted in an increase of thirty – seven percent. Netflix can also be soaring with a total of 144 percent. This has naturally led people to choose internet shares as their first preference. However, their shares also face slight drops of 4.2 percent and 2.8 percent, respectively.


However, Chesapeake Energy faced a downfall of 33.3 percent at $2.04. They are hammered to such an extent that they are forced to opt for an alternative restructuring option with the help of their existing adviser, Kirkland & Ellis.


At the same time, the Dow Jones closed down at 177.92 points alongside the S&P 500 that lost 26.62 points. Nasdaq Composite too further dropped 79.39 points.


Fluctuating oil prices are also to a certain extent, adding tension to the already existing barriers that lay toward achieving a global growth in terms of finance and economy.


The technology sector is not spared either. Tech Company, Cognizant resulted in a drop of 7.7 percent to 54.05 dollars. The IT services also issue a weak sales forecast.


According to Thomson Reuters data, “Approximately 10.6 billion shares changed hands on U.S. exchanges, above the 9.4 billion daily average for the past 20 trading days.”


Declining issues outnumbered advancing ones on the NYSE by 2,484 to 618, for a 4.02-to-1 ratio on the downside; on the Nasdaq, 2,029 issues fell and 804 advanced for a 2.52-to-1 ratio favoring decliners. The S&P 500 posted 7 new 52-week highs and 97 new lows; the Nasdaq recorded 4 new highs and 495 new lows.

Goldman Joins Hands With America’s Premier Financing Groups As Its Co-head Bids Adieu

Goldman Joins Hands With America’s Premier Financing Groups As Its Co-head Bids Adieu

Goldman Sachs Group Inc (GS.N), a multinational investment banking firm, has decided to merge their leveraged and structured finance groups in America as the co –head of leveraged finance firm, named Craig Packer bids adieu.


The leading firm offers an extensive range of financial services to a diversified and substantial client base that includes financial institutions, corporations, governments and high-net-worth individuals.


The company holds a reputation of engaging in productive global investment banking, security and investment management services in addition to the institutional clients, and with the new initiative, it seems to be striving toward achieving the motive, furthermore.


Founded in 1869, Goldman Sachs provides several other financial services as well, including mergers and acquisition advices, underwriting services, asset management services, prime brokerage to their clients.


Headquartered at 200 West Street in the Lower Manhattan area of New York City, the company’s clients primarily include corporations, institutionalized individuals and sometimes even government bodies. The firm also further engages in market making and other private equity deals. They are also known to the world as a primary dealer of America’s treasury security market.


The new credit finance group will be led by the former co –head of leveraged finance in the America’s Christina Minnis. She is reported to be leading the new establishment along with the head of structured finance in America, Vivek Bantwal, who has run structured finance since 2015.


One of the spokesmen from Goldman Sachs confirmed the contents of the memos.

Thomson Reuters data says that the moves arise right after Goldman Sachs decided to build up its debt underwriting capabilities. The firm had obtained the 6th rank in 2015 for U.S. bond underwriting, behind banks with larger balance sheets such as JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N).


After being hit hard by the 2008 economic crisis, Goldman Sachs has been constantly coming up with ways to avoid such an incident from occurring ever again. Although their involvement with subprime mortgages was majorly the reason why they were impacted in such a negative manner, their policies have been well – structured and designed with deep thought ever since. They were hit so hard that the U.S. government had to bail them out as a part of their rescue. They certainly don’t want to face such a situation ever again.


Moreover, they are in constant connection with the governmental bodies too. For instance, there are numerous former Goldman executives that have moved on to government positions after their term of service at Goldman Sachs. Some of them include Robert Rubin and Henry Paulson, who have served as United States Secretary of the Treasury under Presidents, Bill Clinton and George W. Bush, respectively.


Their four major aspects of focus in the years to come have been: investment banking, institutional client services, investing and lending and investment management, as per what is mentioned on their website. Over the years, they have raised an enormous amount of revenue.

Merger Talks Intensify Between Large Cooperative Banks in Italy

Merger Talks Intensify Between Large Cooperative Banks in Italy

italian bank

The Banca Popolare di Milano is a small lender located in Italy, but it could be making some big changes in the near future. The bank is in talks to potentially merge with the Banco Popolare SC or UB Banca SpA. While no definitive answers have been given as to whether or not the merger will take place or as to all that the merger could mean for the companies involved, most are speculating that a merger will take place in the very near future and that it will mean major changes for everyone involved.

The most likely merger, at this point, appears to be between the Banca Popolare di Milano and SpA, which is Italy’s fifth largest lender when assets are factored in. The other potential partner in the deal, The Banco Popolare SC, is just ahead of it as the fourth largest lender by assets.

Recently, shares were rising among all three lenders, however, as everyone anxiously awaited the news of whether a merger would occur and tried to stake some kind of claim in the deal. They weren’t just waiting to see if a merger would happen, however; they were also waiting to see, if it did, which of the companies it would be between . Unfortunately, answers have been slow in coming, and everyone with a stake in the potential dealings is waiting with bated breath.

If a merger does occur, and it’s likely that it will, the partnership could be a huge and business-changing deal for the companies involved and all who are invested in them. It would also mark the realization of a recently passed Italian law that changed the governance rules as they relate to banks.

Under the new law, shareholders of some banks are allowed to agree upon and make big decisions, regardless of how small or distant their stakes in the banks may be. This law only applies to moderate banks, with $8.7 or less in assets, and the aforementioned Banca Popolare di Milano fits the bill. As such, those involved in this deal have until July of 016 to adjust principle amounts, vote, and make a final decision.

As one might expect, the new law is affecting other banks as well. Now, all moderate banks, not just the ones involved in this deal, are more subject to takeovers, though many banks, including the three involved, have planned defensive mergers to protect themselves. Thus, a merger between these three banks or between just two of them could serve quite well as a protective mechanism.

In fact, no matter what ultimately happens, one can assume that it will definitely be what the banks involved consider to be in their best interest when it comes to protecting themselves. There is a lot of speculation about what will happen and what should happen, as well as a lot of disagreement about what the best course of action is for all involved. No matter what does happen, however, it’s practically guaranteed that this merger will set an example for other banks in the same position to follow, meaning that this deal won’t just affect these three banks, but all banks who have become more vulnerable as a result of the new law.


5 Key Business Tips that Every Veteran Should Know

5 Key Business Tips that Every Veteran Should Know


Starting a business may look easy, but it is not easy to predict whether you will succeed or not. The key is to put your special skills and do your best. Take for instance, the veterans and training they receive in the military, which help them hone up their entrepreneurial skills and lead their small businesses instantly to a successful path. Though these veterans do have the entrepreneurial skillset and mindset to get succeeded as business owners, it is not essential all of them can have the same traits, and know about everything.


However, in the article below, there are a few tips that every veteran needs to know:-


1)  Plan well


There are many factors involved in bringing a business together. Business elements such as finances, resources, risks, liabilities and other possibilities are some of the things that you should consider at length before actually starting your business. Efficient business planning is essential for a successful long-term business flourishing. You need to think objectively about your business goals, and accordingly plan, develop and sketch out strategies for the future. Creating a roadmap that will lead you towards success make you feel a step closer to your objectives.


2)  Get verified


Being verified as a veteran business person will open many doors for you. Government agencies and many other similar corporations are bound to buy a certain percentage of their goods and services from veteran-owned ventures. Therefore, make sure you are verified as a veteran-owned business since it may be the stepping stone towards your ultimate success.


3)  Stick to one niche

While you may think that expanding your products and services will help you generate more sales, you are wrong. Businesses, no matter how solid they may be, tend to face trouble during their attempt of broadening their offerings to reach a greater target market. Specialize in the kind of product or service that you are best at, and deliver it to your customers qualitatively. This is a better strategy that is bound to increase your profitability and even reduce your marketing expenses.


4)  Marketing tactics


Work effectively in searching for marketing tactics that are both, cost-effective and highly profitable in nature. It is important that you stay firm and focused in order to ensure a stable future for your business. Discovering innovative ways to reach out to your target audience is one of the most important steps towards the durability of your business in the market. Since digital platforms are popular among the mass, making use of the same will be a wise decision.


5)  Choose the right team


What will help transform your vision into reality are the skills and capabilities of your fellow employees. It is important that you find and select employees who are skilled enough, and have the capabilities to deliver the products or services within the deadline.


Do not rush while hiring employees for your organization. It is, after all, a big commitment for your business. Moreover, you must not neglect investing in their training and development. The better training you provide them the better results you will get.


Thus, make the best and most efficient use of your business knowledge. Not only will it lead you towards a path of success, but also ensures a long-lasting life for the same.