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http://www.zerohedge.com/news/2016-02-08/chesapeake-plummets-over-20-report-it-has-hired-bankruptcy-attorneys

 

Chesapeake Plummets Over 20% On Report It Has Hired Bankruptcy Attorneys

 

In a few weeks we will see just how many banks were properly "provisioned" for this now imminent bankruptcy that may just unleash the default wave so many have been waiting for.

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Ok so some were predicting 500 USD oil and some saying it would go lower but surely nobody could have thought we would be looking at current levels and at the moment it can only go lower until somebody stops producing it.

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Have you seen the Gold/Oil and Dow/Oil ratio?

Both at once-in-a-generation extremes.

 

Only a fool thinks that the elastic band will get even more stretched. Today demonstrates how violent the snapback will be.

 

Some truly once-in-a-generation levels in relative asset prices:

 

Dow:oil almost at 600

http://stockcharts.com/h-sc/ui?s=%24INDU%3A%24WTIC&p=W&b=1&g=0&id=p89360179444

 

Gold:oil at 46

http://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24WTIC&p=W&b=1&g=0&id=p42489684112

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Have you seen the Gold/Oil and Dow/Oil ratio?

Both at once-in-a-generation extremes.

 

Only a fool thinks that the elastic band will get even more stretched. Today demonstrates how violent the snapback will be.

 

There is a possibility that new energy technologies will be deployed - so be careful

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This is not a demand issue! Absolute demand is remarkably stable, and in fact I the world is using more oil than ever, it is just that supply increases that were set in motion when oil was $100pb are now coming online, but as sure as that high price led to the current oversupply, this current unprofitable level will clear out the glut, destroy future production capacity and create the next bull market.

 

Market psychology is such that when a trend has run so long that people cannot imagine any other trajectory than the one it is currently on, is the time that it is most likely to turnaround.

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