Big banks are cringing as crude oil is crumbling.
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.
Three of America's biggest banks warned last week that oil prices will continue to create headaches on Wall Street -- especially if doomsday scenarios of $20 or even $10 oil play out.
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."
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2 comments:
Have we learned nothing from 2008. Let the Banks and businesses go bankrupt. Yeah...it sucks and there are negative connotations that go along with it, but that is business. They all got PAID when they pulling oil out of the fields hand over fist, but now they hit the end of the easy payday and are now out of business. I dont feel sorry for them or their banks. I have a plan in place for losing my job or going out of business. Where is their plan? The banks can go too. They are just too big and too greedy. it is time they pay the piper.
Unfortunately, 2008 should have marked the death of many banks and companies. Yes it would have hurt, but with all the bailouts and money printing have done nothing but push this coming recession back a couple years and probably doubled it in size. If you think 2008 was bad. You have not seen anything yet!! Time for the greedy to go. And that may take the US dollar as a fiat currency with it
This is why the rich get and stay rich because us taxpayers always footing the bill.
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