Banks and hedge funds losing big time by the dropping oil prices.

[dixiegrrrrl]

8. Banks loan $$$ and then sell the debt.

Here...from the article:
[..] if Barclays and Wells attempted to syndicate the $850m loan now, it could go for as little as 60 cents on the dollar.

That means they turn the debt into bonds, which they cannot sell at face value now because the underlying debt has lost value.

It is what the banks did with mortgages. They turned the loans into bonds which they sold, the buyers of the bonds were to use the repayment of the loans as the interest they earned on the bonds they held.
If you lose your job and can't pay the mortgage, you are foreclosed on, the banks sell your house to try to get some money back,
assuming the house has any value in a changed economy.


If an oil well or oil venture suddenly loses the value of its market, it can't pay back the loans and the bank will be stuck with a well or oil field or whatever that it cannot sell.So, in effect, has to put a loss on its books, which affects the banks stock.
Bank stocks are going down because of all this.