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Investment Insights are written by Angeles' CIO Michael Rosen
Michael has more than 30 years experience as an institutional portfolio manager, investment strategist, trader and academic.
DOUBLE LEVERAGE?
Published: 10-29-2014Oil prices are down about $30 from their highs; great news for consumers and the big oil importers (China, Korea, India). Not so good news for the big producers (Saudi, Russia, Venezuela).
Oil companies have been borrowing more, but most of the major multinationals have very strong balance sheets and generate a great deal of cash. But the biggest oil companies in the world are state-owned, and they have been especially thirsty for debt. The Latin American giants stand-out:
- Petrobras has $147 billion of sales and $123 billion of debt
- PDVSA has $127 billion of sales and $120 billion of debt
- Pemex has $127 billion of sales and $134 billion of debt
So not only are these companies levered to the price oil, they are levered to interest rates as well. Double down?
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Earthrise or Earthset: Thoughts on a Post-Pandemic World (Part 3) 06-02-2020
Source: NASAWeak economic growth and low investment returns are the prospects we discussed in the first two parts of ...
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I'm Swiss 10-13-2015
No question, this has been a challenging year. Virtually every financial asset class is struggling. Stocks are down, ...
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Après moi le déluge 01-05-2016
In more ways than one.We greeted the new year with an actual deluge, at least here in California, as the long-promised ...
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