THE IRRITATED AMERICAN An energy loan officer at a leading midwestern bank prepares for a quarterly meeting. (PHOTO: airnation.net) Ripple effects, ripple effects. Ripple effects of ripple effects. Every little thing in the world from aviation to bubble gum takes a ripple from the bump and grind of fuel prices, as everything must be delivered, and deliveries require fuel. Today the story--as Brent crude fell to $48 after 1) a bump of 10.1 million barrels in inventory (larger than expected), and 2) the Euro Central Bank announced it would start gobbling government bonds, a move sure to see the US dollar pump even more iron versus flagging international currency--is about banks with portfolios heavily soaked in energy-related loans, and their fear of the pen of the ratings agencies. In a Tuesday report, S&P's analysts announced that they are reviewing "banks with large concentrations of energy related loans." The obvious repercussion is a downward adjustment in ratings for those banks like Comerica with excessive exposure (7%) in these kinds of loans. The Wall Street Journal reports in the above article that 13 regional banks with more than 5% of their holdings in the energy sector have experienced a drop in stock share value of more than 20% since mid-2014 when oil was at its price peak. It rightly points out that those bankers who were in the game in the mid-1980's are getting a wretched case of deja vu which they pray does not unfold as it did those three decades ago: as the dominoes tumbled from the oil-price drop by more than half in the late 1980's, the number of banks that folded was astronomical. Texas alone lost over 700 banks/thrifts between 1986-1990. After the banking and mortgage fiascoes of 2008 forwards, the sector is naturally curling its toes, flat out panicked from the idea of another gigantic sized industrial purge. Those with heavily exposed portfolios have already bought eyeglasses for their eyeglasses, so closely must they watch how the current scenario unfolds . . . and survive. Preston Clive 1/22/2015***