Juggling Dynamite

Danielle was a guest on Money Talks radio with Michael Campbell today at 9 am PT (noon ET).  You can listen to an audio clip of the segment here. The play bar below starts with 14 seconds of silence.

Danielle was a guest today on Talk Digital Network with Jim Goddard, talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here.

**Postscript correction: I incorrectly stated in this discussion that the UK Telegraph was purchased by Barclays Bank. In fact it is owned by the Barclay brothers. See: Who are the Barclay brothers, for more. Much thanks to Anthony in London, for correcting my error.  The assertion that the paper’s business dealings with HSBC and other banks curtail their investigative reporting on illegal practices, still stands.  See also:  Telegraph owners’ 250m HSBC loan raises fresh questions over coverage.

Oil is certainly not the only asset looking perilous at present prices…

Nasdaq: like you’ve been propelled into space only to find your out of fuel & waiting for the uncontrolled re-entry. pic.twitter.com/uiIzcOmXfw

— Cory Venable CMT (@CoryLVenable) February 19, 2015

You have to chuckle at the consensus of financial commentators. The same crowd who confidently and incorrectly predicted rising inflation, rising commodities, falling US Treasury bonds and a falling US dollar are now busily morphing their forecasts on all these things in real time with the price of oil. Very helpful (not).

The latest round has several previous bulls now talking about the prospects of oil at $10-$20 a barrel. As shown in my partner Cory’s chart below, $10-$20 is a possibility driven by the mean reversion of crazy leverage that has been directed into the energy (and other commodities) sector over the past decade.  But we have been making that, previously, wildly contrarian, observation since global demand peaked and turned down in 2011.

Moreover, there is a similarly strong probability of knock down effects to other highly levered asset classes such as equities and corporate debt, as commodities deflate. Of course, almost none of the now capitulating inflation bulls are forecasting downturns in these other assets.  Yet.  Investment sales needs to keep selling its bread and butter products after all…