Word: sectoral
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...Prices got to an insane level," Texas economist M. Ray Perryman says, "but they are equally insane now." With the price of a barrel of oil hovering in the $45 range and natural gas cut in half from a high of $14 per thousand cubic feet, the domestic energy sector is now at a critical "tipping point," Perryman says. If prices dip lower, he adds, the pace of the slowdown will quicken as domestic oil and gas fields that demand expensive, high-technology drilling methods will be shut. (See pictures of the remains of Detroit...
...that could soon change as the economics turn dark for the energy sector. High prices bankroll high-cost production and fund technology improvements that make hard-to-reach minerals accessible, while low prices mean wells with high production costs are shut in. The threshold price for oil-operations expansion is around $50 a barrel, according to Combs. "This constant roller coaster [in prices] is something the industry is really getting sick of," Ingham says. (Read "Web-Savvy Homeowners vs. Landmen...
...accounting and consulting firm. The No. 1 concern of 57% of the CFOs was access to capital. While the industry is not as capital-intensive as it once was, Perryman says, it is still intertwined with the health of the financial system. However, in Amarillo, where the energy sector is about 25% of the economy, the talk around the coffee shop is still dominated by the price of a barrel of oil, Ingham says. The view from Amarillo is that the economy would be much better off with "some kind of stability in the energy markets," Ingham says...
...commonly heard in Asia: "Too big to fail." There was a time when politicians, bankers and bureaucrats in Asian countries thought that certain large enterprises were simply too important to go bankrupt, no matter how miserable their performance. The resulting unemployment would be unacceptable, the impact on the financial sector and economic growth too great. That, in effect, is the same argument being used today by supporters of a government rescue for the cash-burning U.S. auto industry. The consequences of allowing a manufacturing giant like GM to collapse would, their thinking goes, be too onerous for an economy already...
...consequences of a Daewoo failure looked catastrophic. Daewoo, it turned out, had about $75 billion in debt and other liabilities - a hit the Korean banking sector could ill afford. The banks had just been yanked from the abyss by a government bailout (sound familiar?) made necessary by the 1997-98 Asian financial crisis. And the timing also could not have been worse: the economy was emerging from its deepest recession since Korea's accelerated growth began in the early 1960s. Arguably, a Daewoo collapse was more threatening to Korea than, say, a GM bankruptcy would be to the U.S., simply...