by Bill Bonner
Get your Wife an Oil Rig
BALTIMORE – What do you get your wife for her birthday? Here’s a suggestion for the woman who has everything: Get her an oil rig. The daily rental rate was about $500,000 in 2014. Now, you can get it for half off.
[…] And the price could go lower. When the industry was flush and foolish, drillers put in their orders for new rigs. Those rigs are still being delivered, even though the number of idle rigs is now the highest in history.
Unfortunately, many of the companies that ordered the rigs borrowed the money to pay for them. That’s what you do when it looks like the sky is the limit. Then, when the sky falls on your head, you don’t have any way to pay your loans. Borrowers default. If enough loans go bad… lenders go broke, too.