Perhaps it has something to do with the ten-year anniversary of the Lehman crash, but we seem to be seeing more financial crisis stories in the media lately. Today's version comes to us from The New York Times in a column by Bethany McLean, headlined "the next financial crisis lurks underground." The subhead tells us the basic story:

"Fueled by debt and years of easy credit, America’s energy boom is on shaky footing."

The piece looks to be a very reasonable discussion of the fracking boom and points out that most fracking operations are not profitable. It describes fracking as essentially a Ponzi scheme, where fracking companies are able to survive by finding suckers to buy their stock. Most frackers don't actually make enough money to repay their debts and generate a profit.

All of this sounds very plausible, although a jump back to 2014 type oil prices ($100 a barrel or higher) would presumably change this picture. (That's not a prediction, just noting the arithmetic.) But the problem is that if the Ponzi game ends, where is the financial crisis? We are told:

"Amir Azar, a fellow at the Columbia University Center on Global Energy Policy, calculated that the industry’s net debt in 2015 was $200 billion, a 300 percent increase from 2005."

Okay, so suppose two-thirds this debt goes bad and investors get back fifty cents on the dollar, both pretty extreme assumptions. That comes to $67 billion in losses on $134 billion in debt, an amount equal to 0.34 percent of GDP. Perhaps there is a world where this gives us a financial crisis, but not this one.

Just to be clear, The New York Times picks the headline, not the author of the column. The column is a perfectly reasonable piece on fracking, the headline is not.