Posted Oct 31, 2013 by Martin Armstrong
The famous Brazilian tycoon Eike Batista’s flagship company has filed for bankruptcy protection. Batista’s oil and gas explorer OGX applied bankruptcy protection (“judicial recovery” in Brazil) after debt restructuring talks collapsed. The debt is about $3.6 billion in bonds out of a total $5.1 billion distressed debts at the company.
This marks the end of Commodity boom. OGX’s demise is Latin America’s largest corporate default in history and it signal the shift in trend. To create the bottom, producers must go bust because that is part of the cycle that reduces supply and is a necessary component to reset the stage for the next performance. This ends the goal that Batista publicly stated he wanted to become the richest person in the world. How the mighty do fall. Hello! It’s a cycle! (see Mining).