Anyway, remember how I'd say I'd much rather buy Exxon debt than US debt? The CDS for 10 year US debt is higher than on 10 year Exxon debt now... Peak oil is not an energy crisis. It is a liquid fuel crisis.
Exxon has a negative credit spread? That's wild. A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
Uh, maybe that's whay you just said? Damn finacial lingo. :) Peak oil is not an energy crisis. It is a liquid fuel crisis.
You'd probably better off computing the stripped-bonds spread, which has ample liquidity in both cases I think. But again, it may not be meaningful right now, with mass stampedes in the money markets.
Wait a few more months to draw conclusions. I don't think Exxon could have a better rate than the US, at least no for very long, because of the following macro-arbitrage argument: if the liability is in USD, exxon will pay it in the US, where its legel entities would be seized/taxed to death if they still had an oil rent there, and the federal government was broke. liabilities denominated in other currencies / from non-US subsidiaries are another matter, but I don't think the pool of exxon bonds has many like these. Pierre
its legel entities would be seized/taxed to death if they still had an oil rent there, and the federal government was broke.
(Only half joking... sigh.) Peak oil is not an energy crisis. It is a liquid fuel crisis.
But with multinational companies, this is no longer so simple... In the long run, we're all dead. John Maynard Keynes
Holding (watching) money is not "neutral"... In the long run, we're all dead. John Maynard Keynes
Sure, liquidity might be bad, but if you are going to hold the bond to maturity that doesn't matter. Peak oil is not an energy crisis. It is a liquid fuel crisis.
