The Oil Crash Has Caused a $1.3 Trillion Wipeout

[marmar]

(Bloomberg) It’s the oil crash few saw coming, and few have been spared as it erased $1.3 trillion, the equivalent of Mexico’s annual GDP, in little more than a year.

Take billionaire Carl Icahn. When crude was at its peak in June 2014, the activist investor’s stake in Chesapeake Energy Corp. was worth almost $2 billion. Today, oil has lost more than half its value, Chesapeake is the worst performer in the Standard & Poor’s 500 Index and Icahn has a paper loss of $1.3 billion. The S&P 500, by contrast, is up 6.9 percent in that time.



State pension funds and insurance companies have also been hard hit. Investment advisers, who manage the mutual funds and exchange-traded products that are staples of many retirement plans, had $1.8 trillion tied to energy stocks in June 2014, according to data compiled by Bloomberg.

“The hit has been huge,” said Chris Beck, chief investment officer for small- and mid-capitalization companies for Delaware Investments, an asset management firm in Philadelphia with $180 billion in assets under management. “Everybody was thinking that oil would stay in the $90 to $100 a barrel range.” ................(more)

http://www.bloomberg.com/news/articles/2015-08-04/the-oil-crash-has-caused-a-1-3-trillion-wipeout

[villager]

1. It may have "erased" it for the ownership class, but how much did the savings *put back*

...in the pockets of "ordinary" consumers?

[OnlinePoker]

4. My gas is down a whole 2 cents per litre since May. n/t

[villager]

5. Actually here in California, it's still near $4.00 a gallon

That's because no one challenges the official cover stories here allowing them to routinely gouge us -- which I suspect they view as necessary "profit taking" from a market that will tolerate it, when prices are "too low" elsewhere...

[OnlinePoker]

9. Here in Victoria, we're paying about $3.50 U.S. per U.S. gallon

That's if you take into account the exchange rate. $1.26 Cdn per litre.

[villager]

10. I'd love it drop to $3.50 here...

Oil companies aren't quite through dipping into our pockets out here, though...

[OnlinePoker]

11. A large portion of our gas price is taxes

Wikipedia has the Victoria rate at $1.33 per U.S. gallon, but I'm pretty sure it's a little higher than that right now. I don't know if they include the carbon tax in that or not.

[magical thyme]

13. heating oil is down to $2.19 here. Between that and el nino I may be pretty

decently warm this winter.

[Rod Beauvex]

2. Ummm...

Why are state pensions tied to oil?

[louis-t]

3. I love the "everybody was thinking" part.

Investments go up, they go down. Especially in a market that is allowed to be manipulated by speculators, has been de-regulated, and has only a few groups that control so much of the market. "Everybody was thinking" the Titanic would make it to New York....

[Gothmog]

6. The oil and gas market has been affected

The oil field services market have really been hammered by the decline in the value of oil.

[Wellstone ruled]

7. And while everyone is reading this story,

there is another one know one is talking about and this one will smack those whom think the demise of Oil or the readjustment in the true value of oil relates to cheaper Gas and Refined Oil prices. Whoa Nellie,just caught the Grain Market Quotes at close a few minutes ago. Here is the real disaster that is occurring in real time and the so called Biggees are keeping a lid on it. Commodities are being dumped almost in panic mode. It's called rotation and the Monied are heading to Equities and the big loser with become the Growers and Farmers. Look for a ton of Grower and Farmer Bankruptcy Petitions in and around New Years. Stress levels in the Corn and Bean Belt are going off the charts,and with commodity prices lower than what is called replacement costs,we as consumers will have to pick up the tab again just like the Eighties. There is and never was a real cheap food idea with out any side effects.

[procon]

8. My grandpa lost money when the buggy whip industry crashed.

Sorry, but making bad investments in an industry with a dwindling future that is already in jeopardy from warring political and military factions in oil producing countries, and is under growing attacks from alternative fuel developers, and barraged with negative public pressure and constant criticism around the globe, is a poor excuse for losing that amount of money.

Maybe these big investors should avoid the high risk gambling adventures in fossil fuels for the big payoff, and look elsewhere for innovative companies that are expanding to meet the demands of the future.

[magical thyme]

12. few have been spared? really?

half the US doesn't own any stocks or have a pension.

I was totally spared; my pension cashout is sitting in a money market fund waiting for me to have time to decide what to do with it.

So sorry Icahn lost himself a billion. Cry me a river.