What We're Reading

Indeed, I've read much concern over this area as oil collapsed so it does merit a warning.  From ZeroHedge:

The S&P 500 Energy sector stocks are down over 12% year-to-date, tumbling over 3% today to fresh 20-month lows. The spread (or risk) of high-yield energy credits surged again today, breaking above 850bps for the first time... The overall high-yield credit market is being dragged wider by this contagion as hedgers try to contain the collapse that is possible. For now, the S&P 500 remains entirely ignorant of the fact that over a third of its CapEx was expected to come from this crushed sector...

According to DB

US private investment spending is usually ~15% of US GDP or $2.8trn now. This investment consists of $1.6trn spent annually on equipment and software, $700bn on non-residential construction and a bit over $500bn on residential. Equipment and software is 35% technology and communications, 25-30% is industrial equipment for energy, utilities and agriculture, 15% is transpor

As the price of oil extends a free fall that began this summer, countries around the world that rely on oil revenues are bracing for an imminent economic and budget hit.  The drop is widening budget gaps in the Gulf states like Saudi Arabia, the United Arab Emirates, Qatar, Oman and Bahrain that rely heavily on oil to pay government services.

With oil and gas production accounting for some 70% of Russia's government spending, Moscow also faces a big shortfall—after budgeting based on $100-a-barrel oil for 2015. Russia's economic growth was already slowing before the plunge in oil prices. Trade sanctions imposed by the U.S. and Europe—in response to the invasion of the Ukraine—will further crimp growth and government spending.

The impact of budget gaps among big producers like Saudi Arabia and Russia, though, will be softened somewhat by large reserves built up during boom years. But a protracted era of cheap oil would force them to undertake serious belt-tightening.

Note:  Click on a c