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jelrod3

 
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  • Oil, Contagion And Equities: U.S. Equities Are The Next Shoe To Drop [View article]
    @kappaseek

    It is sad indeed that many people have been duped by the "global warming" hoax. It is distressing that this indoctrination is being spread continuously on our college campuses and in our public school systems by teachers and academics that have been snowed by the "feel good" green movement.

    The belief that we in America can affect the earth's climate if we will only reduce our so-called "carbon footprint" and reduce our use of fossil fuels is sheer lunacy.

    If one wants to assume that human activity relative to carbon can make a truly beneficial difference in our climate, it is unlikely that developing economies throughout the world will reduce their carbon footprint. Meanwhile, the political elite is determined to cripple our society and our economy with wild eyed rules and regulations. This is foolhardy, in my opinion.
    Dec 15, 2014. 10:19 AM | 21 Likes Like |Link to Comment
  • A Growing Black Cloud Over The Market [View article]
    Think in terms of "putting the squeeze" on Russia. Is it possible that the USA and OPEC are in cahoots to punish Russia?

    Yes, U.S. producers stand to suffer, but consumers get a "gasoline dividend" while Russia really takes it on the chin. And if the "important" U.S. producers get into real trouble, there is always a government bailout lurking around the corner. The name General Motors rings a bell for starters.
    Dec 13, 2014. 11:41 AM | 1 Like Like |Link to Comment
  • A Growing Black Cloud Over The Market [View article]
    This article reports that China is stockpiling crude oil in record quantities:

    "The number of supertankers sailing to China jumped to a record in ship-tracking data amid signs that the oil-price crash is spurring the Asian nation to stockpile. There were 83 very large crude carriers bound for Chinese ports, according to shipping signals from IHS Maritime compiled by Bloomberg at about 8:30 a.m. today in London. The ships would transport 166 million barrels, assuming standard cargoes, the largest number in data starting in October 2011. The cost of hiring the vessels surged to the highest in almost five years, according to Baltic Exchange data. ...China has to buy at least another 50 million barrels of crude in 2015 for its strategic petroleum reserve, according to Amrita Sen, chief oil market analyst at Energy Aspects Ltd., a London-based consultant. Plans to expand commercial crude inventories could raise that total above 100 million barrels, depending how quickly the country can build new storage units, she said.

    “China filling up big parts of its SPR essentially helps to absorb the oversupply” on international oil markets, Sen said by telephone today. “You’re not going to get China slowing down on filling before 2016.”

    Here is the link:

    http://bloom.bg/12COFLH

    It looks like China may get a bargain price on the next 100 million barrels!
    Dec 12, 2014. 04:39 PM | 3 Likes Like |Link to Comment
  • A Growing Black Cloud Over The Market [View article]
    Nice article, Eric.

    I disagree that UPL should be grouped with companies that may be in danger of a credit default as the price of oil drops.

    UPL is primarily a natural gas producer, and the price of natural gas is thus critical to its revenues and profit. While the price of natural gas has been falling, and stands at $3.77 at this moment, one should not overlook that UPL is the low cost producer in the group of companies in the natural gas business.

    During a recent conference call, UPL’s president alluded to an “all in” cost for natural gas of around $2.00. Reference to UPL’s most recent 10Q shows that the “all in” cost for both oil and natural gas in the quarter ending 9-30-2014 was $1.49/Mcfe excluding depletion, depreciation and amortization. Adding this non-cash item to this number brings the “all in” cost to $2.71 for both oil and gas. This number will probably fall a bit, as UPL elects the shut in its small crude oil production due to falling crude prices. But the point is that natural gas prices can fall a long way, and UPL will still make money gathering and selling natural gas.

    Will UPL be able to meet its debt obligations over the next 4 years? A review of the company’s most recent 10-Q contains extensive information about UPL’s debt situation. The following points are notable: (1) The first indebtedness falling due occurs in March 2015 in the amount of $100 million; (2) Then comes $62 million in “high yield” notes due in March 2016; (3) Then comes $116 million due in 2017, followed by a total of $650 million in 2018. In October 2016, the company’s credit facility with $516 million outstanding will be due. As of September, $434 million in borrowing capacity remained available under this credit facility. The credit facility can be expected to be renewed, I would think.

    Where will natural gas prices be 4 years from now? I don’t know. Will prices have recovered? I don’t know. But logic tells me that the answer is “yes.” Natural gas is not going away. And while revenues can be expected to be lower for the foreseeable future due to falling prices, UPL will still make money due to their low cost producer status. Thus, I believe that this puts them outside of the group of those producers who “might” default on their indebtedness.

    Thanks again for a nice article, as always.


    Dec 12, 2014. 12:19 PM | 4 Likes Like |Link to Comment
  • Kinder Morgan: Don't Throw Out The Baby With The Bathwater [View article]
    Investors in KMI might do well to review KMI's discussion of "Risk Factors" in their 10-K.

    http://1.usa.gov/1pD77yk
    Nov 30, 2014. 05:21 PM | 1 Like Like |Link to Comment
  • 3 Critical ETF Trends That Require Monitoring [View article]
    Excellent article.
    Nov 22, 2014. 01:15 PM | Likes Like |Link to Comment
  • John Hussman: These Go To Eleven [View article]
    "Warning lights are flashing down at Quality Control
    Somebody threw a spanner and they threw him in the hole..."

    ~Industrial Disease
    Dire Straits
    Nov 17, 2014. 05:12 PM | Likes Like |Link to Comment
  • Watch Excess Reserves Post QE3 To Gauge Stock Market Risk [View article]
    Excellent article.

    Thanks for the analysis. The quest for yield has been the prime mover of the equity market IMHO. Once rates go up, the house of cards will tumble. I agree with the author's statement that most of us will not be nimble enough to get out of the way before damage is done to one's portfolio.
    Nov 7, 2014. 11:43 AM | Likes Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    It's not a question of "whether" there will be a downturn, it is a question of "when."

    Bounces and Santa Claus rallies may be good opportunities to exit stage right, but they will not forestall the inevitable downturn that is coming.

    Eric has done a marvelous job of acquainting us with what has been happening with some very reliable indicators of rough water ahead. There is a consistency of "decline" across multiple indicators, as Eric has so vividly illustrated for all to see (XLI, HYG, $RUT, $MID, $NYA200R, EFA, EZU and others). Ignoring these indicators of trouble ahead is like ignoring an iceberg in the path of the Titanic.
    Oct 12, 2014. 04:59 PM | 1 Like Like |Link to Comment
  • About That Friday Bounce [View article]
    Eric, your articles and comments are well received by investors like myself. I cannot thank you enough for them!

    Please continue to keep us posted and apprised of what's on your mind.
    Sep 27, 2014. 03:16 PM | 3 Likes Like |Link to Comment
  • 3 Keys To Watch In The Week Ahead [View article]
    Excellent article all around!

    Many thanks for sorting out some trees from the forest.
    Aug 3, 2014. 09:46 AM | 1 Like Like |Link to Comment
  • AT&T: Potential To Unlock Huge Value By Creating REIT [View article]
    Don't forget the tax impact of "qualified dividends." My understanding is that REIT dividends are generally not eligible for "qualified dividend" treatment, but I could be wrong.
    Jul 29, 2014. 03:47 PM | Likes Like |Link to Comment
  • Growth phase starts for E-cigarettes [View news story]
    "Not so fast, Rodriguez"... goes the punch line to a joke.

    Current data is showing that "vaping" using VTM (vaping tanks/mods) devices is taking share from the eCig categories. Here is a quote from a recent CSP Dailey News article :

    "A new survey of convenience store retailers shows almost 92% of respondents believe vaping products and tanks are overwhelmingly taking share from electronic cigarettes. The Wells Fargo Securities LLC survey of tobacco retailers and wholesalers representing more than 30,000 convenience stores in the United States concludes that convenience retailers are excited about VTMs (vapor/tanks/mods)."

    Convenience store retailers are reporting that vaping devices are "hot" sellers, and are becoming more popular than eCigs.

    Reynolds is rolling out its Vuse product nationally next week. Here's a video all about this and the Vuse product http://bit.ly/1pfx3v5.
    Jun 18, 2014. 08:32 AM | Likes Like |Link to Comment
  • What Does The VIX Now Say About The Stock Market? [View article]
    If you really want to get a sense of what is coming, and also "storm test" what your stocks may face, go to StockCharts.com and create a chart that shows the price action for each stock for the period July 1, 2007, through January 1, 2009. Be sure to click the "price" indicator. Clear the other overlays and indicators.

    This will give you an idea how a given stock held up starting in 2007 when the you-know-what hit the fan.

    I think Mark Twain is credited with saying that history doesn't always repeat itself, but does tend to rhyme.
    Jun 11, 2014. 02:40 PM | 1 Like Like |Link to Comment
  • Timing Is Everything [View article]
    Eric, excellent comments. Particularly your statement that "And this outcome has come to pass at the expense of those that acted responsibly by favoring savings over debt, focused on disciplined investment over rife speculation, and prioritized prudence over recklessness."

    Fed policy drove down interest rates to levels that forced many people into the equity markets. Chasing yield became a necessity for many who had previously relied upon interest on their savings and CD's for income. There was no place else to go.

    Authors, like yourself, are doing a public service to highlight the downside risk. The downturn will catch many off guard, and it will culminate with a sudden and deep savagery that will produce outrageous losses for many. To quote John Hussman, "it strikes me that the repeated belief that a crowd can exit through a mouse hole is really one of the wonders of human psychology."

    Thank you for your thoughtful insight.
    Jun 6, 2014. 08:51 AM | 8 Likes Like |Link to Comment
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