The last order of business for the panel dealt with the stunning drop in global oil prices since mid-year 2014. Bernstein said companies in the sector built themselves for $100 oil, and in the process loaded up their balance sheets with gobs of debt, particularly among small- and mid-cap operators.
“There will have to be a whole wave of asset write-downs that will be coming,” he predicted. “I don’t think people have thought through the risk of MLPs (master limited partnerships). Everyone is thinking these are the greatest things since sliced bread [and believe they are] uncorrelated to the commodity. Nothing could be farther from the truth.”