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Daniel R Moore  

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  • Jobs Up, Interest Rates Up - Buy Energy Stocks [View article]
    Chart pattern on STO looks very similar. I would say it is an option. May be a laggard until the European policy of "extended period" catches up.
    Jul 5, 2013. 10:28 PM | Likes Like |Link to Comment
  • Jobs Up, Interest Rates Up - Buy Energy Stocks [View article]
    I didn't exclude Chevron for any reason; I am certain it fits the profile as well. I didn't write the article to promote one stock over another in the sector. There is plenty of information about the stocks on an individual analysis basis, and investors should be comfortable with their individual picks before investing. .
    Jul 5, 2013. 04:06 PM | Likes Like |Link to Comment
  • Bernanke's Real Problem - Owners Of The U.S. Debt [View article]
    The sentence is as I intended "...if government spending is unleashed with a newly nominated dove Fed Chairperson..." - but let me explain. If you review the past 70 years on when inflation actually was a problem in the U.S., it is highly correlated to the following set of circumstances - a rapid rise in fiscal government expenditures, (1941-45, 1960's, 1970's) and sometimes accompanied by a rapid rise in energy prices (1973, 1979-80) and the Federal Reserve is monetizing the increased level of government spending (1941-45, 1970s). They Fed has not been able to do this for mare than very brief time spans in recent years (early 1990s, 2006-07). Monetary velocity is stagnant currently. And, the federal government although spending levels are high right now - the past three years the growth rate in expenditures has not been high - and it is currently negative. Energy prices are stable. We have no threat of CPI inflation right now based on history. All the Fed policy does in its current form is create financial instability by inflating security prices without any economic under-pinning.

    If the federal government truly does unleash so form of government spending (not the Fed - Congress), and there is a "dove" in the Fed chair position, then inflation fears might once again become truly warranted. This is what I am waiting for given the circumstances that are building - it is only a small spark in current discussions - not a real debate yet.
    Jun 22, 2013. 05:39 PM | Likes Like |Link to Comment
  • Bernanke's Real Problem - Owners Of The U.S. Debt [View article]
    I have studied both 1994 and 1998 as Fed reversal points in one of my recent articles (http://seekingalpha.co...) - and I agree the market could be in a set-up similar to1994. But there are much stronger parallels with 1999-2001 with what is happening right now all variables considered.
    Jun 22, 2013. 05:21 PM | Likes Like |Link to Comment
  • Bernanke's Real Problem - Owners Of The U.S. Debt [View article]
    Thanks for your comment - and you are very correct that the dollar shortage problem for many of many emerging market trading partners is a very real reason that countries are being forced to sell Treasuries. But it doesn't explain why Japan would be selling. That I still have to point to the G-7 and jack Lew statements as reflective of a direct policy initiative to break the cycle of trade dependency that I speak about in the article. The side affect of this policy, whoever, triggers what one might view as the poison pill in the U.S. Treasury debt ownership structure - the very dollar shortage trade that we are witnessing in the emerging markets. Maybe you are right and the cycle can reverse itself and rates will peak and reverse soon - but the odds don't look good to me. As for your comment about expecting a reversal of sequestration - that is not my premise. What I expect is that pressure will mount for some new government fiscal policy initiative. It probably isn't a conspiracy - just reality. The countries that are selling Treasuries will definitely be somewhere in the background behind any initiative that favors U.S. consumer consumption. This is my 2014 election cycle prediction as it relates to the stock market. Any big fiscal policy shift at the moment I believe requires some form of panic sell-off in the market - otherwise I expect a status quo stalemate in congress.
    Jun 22, 2013. 05:12 PM | 1 Like Like |Link to Comment
  • Bernanke's Real Problem - Owners Of The U.S. Debt [View article]
    I have an indicator I watch in the market for a recession signal - and we are not close to it at the present time. So the short answer is no - I don't see a recession yet. At this point in time I just see the market being re-valued closer to where it began the year plus a factor reflecting nominal GDP growth - as rates rise. Depending on how quickly rates rise, and then how the true fundamental expectations change as rates rise as we move into 2014, then my recession indicator may be tripped. At that point, I suspect the smart money that is trading out of long duration bonds and calling for everyone to move to stocks, will have shifted tune and will be heading in the other direction.
    Jun 22, 2013. 04:44 PM | Likes Like |Link to Comment
  • Interest Rates Up - Variable Loan CEFs And BDCs Down, What's Up? [View article]
    The long term rates went up well ahead of the short rates in 2004 as well, much as they are doing today. The rise in rates that allowed the CEFs to get out from under the earnings pressure that JRO is experiencing right now will not come until the short end of the curve is "allowed" to go up by the Federal Reserve and/or LIBOR goes up. There is some debate about whether the Fed will actually be able to keep a lid on the short end of the curve (see recent Greenspan interview last Friday). My view is short rates will definitely lag any move up in rates on the long end, possibly by up to a year. Not a good position for holders of variable rate bank loan funds to be in - they essentially have to leverage an asset that is likely to depreciate in the near term because of the Fed interest rate policy. JRO has made a sound call to reduce leverage in my opinion - but it is painful in terms of the distribution level of the fund.
    Jun 11, 2013. 08:24 PM | Likes Like |Link to Comment
  • Interest Rates Up - Variable Loan CEFs And BDCs Down, What's Up? [View article]
    Thanks for the insight on the legislation; I will be on the look-out.
    Jun 11, 2013. 08:09 PM | Likes Like |Link to Comment
  • Interest Rates Up - Variable Loan CEFs And BDCs Down, What's Up? [View article]
    Look at the UNII for a signal; if it is negative, there may be a cut upcoming.
    Jun 11, 2013. 08:07 PM | Likes Like |Link to Comment
  • Interest Rates Up - Variable Loan CEFs And BDCs Down, What's Up? [View article]
    Thanks for your comment. I think all market sell-offs generate fear, and also opportunity. In this case, I think the sell-off is rational based on the way these assets are structured. It probably will be punctuated through time with bounces to the upside. The trading pattern is very similar to what I experienced in the 2005 time frame. These issues all survived, but it was painful until the variable rate loans actually did start working in favor of the investor.
    Jun 10, 2013. 08:09 PM | 1 Like Like |Link to Comment
  • Interest Rates Up - Variable Loan CEFs And BDCs Down, What's Up? [View article]
    You make an excellent point, and it goes along with the point I am trying to get across in the article. If you read the FSC 10-K closely, the management team clearly documents that the variable rate feature of their loans is not advantageous until rate rise more than 1%. For the first 1%, they actually see a drain on net interest margin. It is a phenomenon that goes across the sector. FSC has also had a history of having solid lending standards, but not the best timing.
    Jun 10, 2013. 08:00 PM | Likes Like |Link to Comment
  • Interest Rates Up - Variable Loan CEFs And BDCs Down, What's Up? [View article]
    PSEC in my analysis is growing at a very high rate, and has add substantial risk to it's balance sheet that will be subject to downward valuation adjustments to NAV as rates rise. Although I do not have an issue with the company, their aggressive strategy will be subject to a correction as rates go up. If the rate rise ends in a U.S. recession, then the correction in a company like PSEC will be particularly hard felt. The PSEC balance sheet is a mix of variable and fixed, with the fixed rate loans being subject to a net interest margin squeeze as rates rise. So they are not just going to feel a wait for squeeze because the variable rates don't kick in immediately, they will feel a more permanent hit to net interest margin until they can roll their portfolio over. The other risk on the PSEC balance sheet is the collateralized loan obligation. These are all manageable risks, but throw 2:1 leverage on top of the company, and it becomes a very risky asset which will exhibit a high degree of volatility in your portfolio. At this point in the business cycle, my recommendation is to hedge your bets in the debt and wait for some time in the future to buy low.
    Jun 10, 2013. 07:54 PM | 2 Likes Like |Link to Comment
  • Interest Rates Up Round 1 - Sorting Through The Data [View article]
    I will preface my thoughts on TBT am not short the Treasury market. The reason I am not is that the cost of shorting the market is very high - insurance always comes at a cost. If you time the move just right, you can make a big gain in a short period on the move up. But this is likely to be an erratic and long-term climb up for the interest curve. So, I am more interested in trying to find the best ways to get into positions where assets can be swapped into assets that will perform relatively better as the rates move up through time. The way to do this is to find the assets that are not as correlated to the interest rate move as it happens. Right now it is more equity based assets, or even equity like bonds. This will work as long as the economy does not tank.
    Jun 9, 2013. 10:20 PM | Likes Like |Link to Comment
  • SandRidge Permian Trust - Shares Recovering After Differential Disaster Last Quarter [View article]
    The estimated target distribution at termination was $3.93. I estimate it is 5-10% of proven reserves.
    Jun 6, 2013. 09:31 PM | 1 Like Like |Link to Comment
  • SandRidge Permian Trust - Shares Recovering After Differential Disaster Last Quarter [View article]
    Here is the legal verbage used for the Termination of the Trust - the term royalties revert back to SandRidge and the Perpetual are retained by the Trust and sold.

    The trust will dissolve and begin to liquidate on the Termination Date, which is December 31, 2031, and will soon thereafter wind up its affairs and terminate. At the Termination Date, the Term Royalties will revert automatically to SandRidge. The Perpetual Royalties will be retained by the trust at the Termination Date and thereafter sold, and the net proceeds of the sale, as well as any remaining trust cash reserves, will be distributed to the unitholders in accordance with their interests. SandRidge will have a right of first refusal to purchase the Perpetual Royalties after the Termination Date.

    The PDP Royalty Interest and the Development Royalty Interest will each consist of two separate royalty interests conveyed by SandRidge to the trust: (a) a term overriding royalty interest for a period of 20 years commencing on January 1, 2012 and ending on December 31, 2031 (the "Term Royalties") and (b) an overriding royalty interest in all oil and natural gas that may be produced from the subject properties (the "Perpetual Royalties").
    Jun 6, 2013. 09:28 PM | 1 Like Like |Link to Comment
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