A Brown New World, It’s All Marginal, and The Blahs
Finally, we close with brief comments on A Brown New World, Its All Marginal, and The Blahs. First, China continues to add massive amounts of coal fired capacity for electric generation. This capacity will swamp more than 100% of all the coal capacity being closed elsewhere in the world. Despite the push for tighter environmental regulation and the actions around the world to limit CO2 emissions, it is A Brown New World. Second, US Shale Production growth appears to be slowing. After drilling the most prolific locations over the past decade, which drove US production to over 12 million barrels a day, the productivity of wells may have peaked in a number of geographic areas. This is leading to slower US production growth. For the oil and gas companies, It’s All Marginal. And third, Bank loan growth for Commercial & Industrial Loans collapsed over the past year, dropping from 8% year over year growth in January to less than 1% in December. For the US Banks lending to corporations, we see them Feeling the Blahs.
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