Crash And Burn Up In Flames – Wall Street Underground

By Nick Guarino | March 5, 2016

The Wipe Out Has Started


Aubrey McClendon, considered a big player in the energy industry, died in a suspicious fiery single-car crash Wednesday, less than 24 hours after he was indicted by a federal grand jury for conspiring to rig bids for oil and natural gas leases. Some people one should not trifle with. As Aubrey learned the hard way. The former CEO of Chesapeake Energy, was forced to relinquish his position as chairman of that company in 2012 following a shareholder revolt led by activist investor Carl Icahn.

He built Chesapeake Energy into the nation’s second-largest producer of natural gas, (when gas was over $8.00) amassing massive debt and wealth to become part owner of the Oklahoma City Thunder basketball team and a renowned collector of antique maps and rare wines. Chesapeake came under scrutiny after it was disclosed that McClendon, 56, had borrowed more than $1 billion against his personal stake in company wells.

What you need to understand is the fact that the whole oil and gas business especially in the US was/is a house of cards. Built on massive debt and banker oil price manipulation. Here is a chart of natural gas. You can see why the players in the natural gas business are hitting the wall, crashing and burning:

Now let me show you what is going on in the crude oil part of the business. This chart shows you despite all the blow and go crude oil prices are still stuck in wipe out mode:

From a peak of $115 a barrel to the investment hysteria investment binge when crude was over $100 a barrel. To today’s haha “recovery” of $35 a barrel. The low at $27 was a disaster. But crude oil at $40 or even $50 does not save our banker buddies and oil companies. They need $75 a barrel oil at least. Yes, yes, I know they are spinning that they have cut costs… Economized… You smell that funny smell… Why it’s Wall Street banker/oil industry desperate for survival… Bullshit!!

When was the last time you bought a barrel of crude oil? Other than natural gas which requires no refining. Oil products have to be refined. This is where the revenue that is derived makes it up the supply chain. Let’s look at the end products and see what prices have done. The first chart is gasoline:

From $3.00 a gallon to under $1.50. No business can survive its gross revenues cut in half. Don’t be fooled, this rally back will not last. Prices will soon peak and crash again. Reality is even with the slight recovery in prices, it’s still a disaster de Jour in the energy business.

Now I want you to see the chart of heating oil which I use as a proxy for diesel fuel:

Again the price cut by more than half… A unmitigated disaster. I repeat, don’t be so easily fooled by the spin. All rallies in oil, oil products, the stock market and especially financial company shares of stock are doomed. And are a selling opportunity.

Even when oil producers come to a production agreement it will do no good. The need for revenue is too great. Oil producers and oil producing nations are the most desperate people in the world. The temptation to cheat is too great. This is all about a desperate and hopeless bid for survival. One that will doom the US oil industry, economy and financial system and bring crude oil prices to under $10 a barrel.

You need to understand the commodity price crash is a wreck still in progress. It’s a banking and a colossal financial economic crises. It would be really stupid to not see the coming depression that has already started. You have eyes to see, use them. Of course the politicians, central bankers, stock market players and dead broke bankers are going to blow blue sky up our butts. I would expect nothing less from the lying scum bags.

Look at the news flow. Oil crashes from $115 a barrel to $27 and you here little about the economic side of the crises. There is certainly little publicity about the bankruptcies or the 100,000 people losing their jobs. No losses by the financiers publicized. Hidden losses are still losses.

Oil climbs from $27 to $36 and they declare the crises over… Really? That’s a fools game. Like I pointed out earlier, I expect this rally back in oil could go to $50. And it will be a great selling opportunity.

Look at the chart of bankruptcies. See how they have spiked. And this is just the tip of the iceberg.

As I have pointed out to you before, there is a time lag. The bigger the balance sheet the longer they can hide the losses. And the greater the losses when they ultimately fail. No, they cannot hide losses forever.

Think about the 2007/8 financial crises and wipe out. If they could hold on forever we would have never gotten the wipe out. This proves that there is only so much rope before they hang themselves.

The greatest depression the world has ever seen has not been put off. It’s not even been delayed. In fact, it’s right on schedule. Stay tuned for trades that should make a killing.

We’ve got them hooked, let them run out a little bit of line before we reel them in again.

Thank you,
Nick Guarino




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