If I were Trump, I'd "bailout/stimulate" shale producers.

Sig said:
Think of it this way. You make widgets. It costs you $10 per widget to make them. You've got a competitor who can make them for $8. But your widget machine was cheap and that particular widget is only 8% of your company's business while it's 50% of your competitors business. Your competitor loses his mind and starts selling widgets for $1.

Do you:
A. Turn off your widget machine for a while and let him self-immolate losing $7/widget; or
B. Commit to losing vast sums of your own money, at a rate higher than your competitor, in order to hop in the fire with him, to exactly what end?

The answer is pretty clear, isn't it?
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I agree with you, but I worry about more than first derivative effects with this one. Banking scares me.
 
IAS_LLC said:
I agree with you, but I worry about more than first derivative effects with this one. Banking scares me.
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If you only knew what the derivatives market entailed. That's another entity in itself, if that market went upside down the entire world would be in a gigantic deep dark cold depression for years!!!!!
 
S2007S said:
If you only knew what the derivatives market entailed. That's another entity in itself, if that market went upside down the entire world would be in a gigantic deep dark cold depression for years!!!!!
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Oh I get it. Hard reset.
 
wartrace said:
Let them fail. Capitalism 101. Let me guess; you are long oil equities? :D
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I have far dated crude contracts, as of today, in one of my discretionary accounts. No direct equity exposure, outside of s&p 500.
 
So you would like the taxpayers to bail you out? I assume you are long crude oil and are worried your "far dated" contracts were a bad trade? There is risk in holding futures contracts overnight.
 
Shale producers already get tax break incentives via the MLP partnership structure.

IAS_LLC said:
This is a half baked thought...but may spur interesting conversation:

Wouldn't be popular and may lose him an election....but Russia declared war on U.S energy sector by refusing to cut production, and Saudi took the bait. It would be interesting if the u.s govt stimulated/proped up domestic oil and gas companies. Would make Russias plan backfire, and eliminate any doubts over Russian collusion...
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wartrace said:
So you would like the taxpayers to bail you out? I assume you are long crude oil and are worried your "far dated" contracts were a bad trade? There is risk in holding futures contracts overnight.
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I'm not at all worried. If it ends up being a bad trade...owell. I'm not even negative on it yet (i do expect to be in the near term). I have more than enough to cover the trade, and many like it, even if oil goes to zero. This is just another trade...one of the hundreds I make every day. But admittedly one of the few I take with a long term bias.

All of that to say...this thread has nothing to do with my own positions. I just think it would be an interesting geopolitical strategy to counter Russia. Conversation.

The way I see it...crude is going to rebound one way or another. The question is when, and how deep of a gash do the low prices cause to u.s industry
 
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