RE:RE:The private credit market is deteriorating rapidly …Frank yup he does. I've been reading some blogs that say where we have the conditions forming for a "perfect storm" in credit defaults. 1) something like 75% of Canadian mortgages have to be renewed by the end of 2026. Many won't be able to renew and may simply let the banks have their homes. 2) Bank of Montreal really dissapointed on earnings because of defaults in personal loans, credit cards. The bankruptcy rate in going way up. 3) Now we're seeing trouble in the private credit markets.
Add to this that Bloomberg reports that we're starting to see growing scarcity in commodities, like copper right now on a global scale. That will add to inflationary pressures and the need for high interest rates. An economist with Desjardines Group said that high interest rates by themselves is feeding inflation. He said that tight money policy works only when supply is greater than demand. Reduce demand by making money tighter then prices come down. But in times when supply is getting scarcer faster than demand is decreasing then prices go up as interest rates go up because producers' production costs go up because of the higher interest rates that they pay so they pass on those costs to the consumer driving up inflation. Positive feedback. The more that you raise rates, then the more inflation that you cause that feedbacks into needing to raise rates even more and so on in a vicious cycle.
Anyway, how it affects this play may be minimal if fec has it's own cash to forge ahead. But a drop in oil prices because of global recession would constrain their ability to do that. XOM has plenty of cash. But knowing XOM's history, Rockerfeller's Standard Oil of New Jersey and Standard Oil of New York they didn't become behemoths by being nice guys. Ole John D drove his competitors out of business then picked up their assets at steep discounts. I think that de Alba et al had better move this thing along before they end up being swallowed up by a whale.