Seeking Alpha

Michael Fitzsimmons

 
View as an RSS Feed
View Michael Fitzsimmons' Comments BY TICKER:
Latest  |  Highest rated
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    Hi Ben - I am not sure any Chinese and Russian military alliance comes close to the tight US-Japanese alliance. Those two countries have a strong distrust of each other. Remember, as the US was bombing Japan in WWII, Russia invaded China in 1945. While this was done mainly to fight the Japanese there, I doubt China has ever forgotten its vulnerability to both the Japanese and the Russians:

    http://bit.ly/10mYlms
    Mar 29, 2013. 09:45 AM | 1 Like Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    I didn't mean to imply that current events are new, they are historical in nature. What is new is NK has a new leader, and he is out to prove himself. Besides, just because something has been done for a long time doesn't necessarily mean it is wise. The US has been the world's policeman and oil delivery agent for decades, and what have we gotten in return? Many wars, lost lives, and mountains of debt. Meantime, other countries who take advantage of the US's actions own our bonds, have foreign reserves, and are in much better shape financially to take care of its citizens.
    Mar 29, 2013. 09:42 AM | 1 Like Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    Amvet - I understand the point you are making and it is a good one, although I would quibble a lil bit with the numbers. Here is a cut-n-paste from wiki which appears to be more in line with what I have read in the past (I will admit these #'s are from 2 years ago):

    http://bit.ly/ZsqaaH

    "As of January 2011, foreigners owned $4.45 trillion of U.S. debt, or approximately 47% of the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion. The largest holders were the central banks of China, Japan, Brazil, Taiwan, United Kingdom, Switzerland and Russia. The share held by foreign governments has grown over time, rising from 13% of the public debt in 1988 to 25% in 2007."

    But of course it is the net foreign owned bonds that are a problem in that, were a foreign country to simply put all those bonds on the market at the same time, regardless of the actual %, it would severely cripple the US credit market. I would submit that a total of $4 billion could do that. At the present time, such a move would hurt Russia & China as much as it would hurt the US. However, in some kind of conflict, it is simply a card they have that the US does not have. And it is a most powerful card. I must say, this is exactly why I have been such a strong proponent of natural gas transportation. The huge debt the US has incurred, is usually blamed as "spending by the gov" by the US media. However, the US's decade long reliance on foreign oil, and the military conflicts as a result, are the #1 reason behind the US's weakened financial position. Natural gas transportation could solve this problem and the US could become a large exporter of oil and refined product to reverse the trade imbalance that has had such a huge negative impact on the US economy and the standard of living for Americans.
    Mar 29, 2013. 09:39 AM | 2 Likes Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    I agree to that: the majority of policymakers in China are engineers, which is a very respected profession there. In America, we often have lawyers making policy. And of course they are controlled by SuperPACs. Is it any surprise then that Chinese policy appears to be much more strategic and long-term oriented? Take natural gas transportation for instance. China has a strategic energy policy to prioritize it. Yet here in the US, SuperPAC control of Congress prevents the US from doing so, even though we have the production, reserves, pipeline distribution system and a price that is only 30% of what the Chinese are paying for it!
    Mar 29, 2013. 09:31 AM | 1 Like Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    I agree Rina - I have wrote several times that I believe the wars in Iraq and Afghanistan were very misguided, led to severe debt levels, and reduced the US's standing on the world stage. In no way did they make us safer. A much better response to 9-11 would have been to secure the borders, adopt natural gas transportation, and get our financial system in order. Instead of building hospitals, roads, schools, and power generation infrastructure in Iraq & Afghan (which were often blown up after completion), the US should have concentrated on its own infrastructure. The amount of wasteful spending in those two theaters is beyond comprehension considering the troubles back home....
    Mar 29, 2013. 09:28 AM | 3 Likes Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    I think oil is the world's reserve currency. And more and more countries are trading oil in non-US dollar terms and agreements. Especially these Russia/China deals.
    Mar 29, 2013. 09:23 AM | 1 Like Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    All good points. Wrt to #4, I suspect that is a bigger issue for Russia. I would add a #5: with the slim returns on Iraqi oil deals, there is talk that China and Russia may be the ultimate winners there as American and western oil companies reduce their stakes there. Indeed that has already happened in a couple cases.
    Mar 29, 2013. 09:22 AM | 2 Likes Like |Link to Comment
  • The Phillips 66 Partners' IPO [View article]
    Hi okie: the best document i know of on this matter is the actually S-1 filed with the SEC that Lou Gray linked to, which I will repost here:

    http://1.usa.gov/YhuGNE
    Mar 28, 2013. 06:25 PM | Likes Like |Link to Comment
  • The Phillips 66 Partners' IPO [View article]
    i am not trying to be a wisenheimmer, but i think current shareholders are benefiting already (stock up $1.89 at the moment). seriously though, there are several comments to the article which express the tax and distribution benefits better than i could (no expert on MLP's as my initial comment to the article certainly proved).
    Mar 28, 2013. 03:57 PM | Likes Like |Link to Comment
  • The Phillips 66 Partners' IPO [View article]
    I second Derek's comment - thank you for the insightful rmerrick.
    Mar 28, 2013. 03:54 PM | 2 Likes Like |Link to Comment
  • The Phillips 66 Partners' IPO [View article]
    Interesting point about DCP - thank you LaMarque.
    Mar 28, 2013. 12:39 PM | Likes Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    Amvet - I agree with much of what you say. China has a strategic long-term comprehensive energy policy and the US does not. China is prioritizing natural gas transportation and the US is not - despite abundant nat gas production and reserves and prices that are 30% of Chinese nat gas price. No wonder the US is printing money and China owns trillions of US bonds.
    Mar 28, 2013. 12:30 PM | 2 Likes Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    Thank you Popano. I think Russia needs Chinese cash as much as China needs Russian energy. Its a very symbiotic relationship, or could be. Wrt Chinese military, it's hard to tell if it is a response to overwhelming US military activity the world over, or simply the US's stated position to "pivot" from the ME to Asia. For instance, the military exercises the US and South Korea are holding, as I write this, with 40,000 troops has already prompted a response from North Korea - they cut a key communication channel with South Korea. And the US spends more than 2x on military spending than China and Russia combined:

    http://bit.ly/w1w2Ei

    The difference of course is that the US is printing money to do this, and the other two have foreign reserves.
    Mar 28, 2013. 12:25 PM | 2 Likes Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    Yes, Russia is huge. One big advantage the US has over Russia from a geographic perspective is its advanced river transportation system in additon to numerous warm weather ports. I bet your trip was an experience you will never forget. As for CH4, I would imagine less.
    Mar 28, 2013. 12:18 PM | 1 Like Like |Link to Comment
  • Russia Could Become The Backbone Of China's Energy Supplies [View article]
    Very good analogy Ben Gee. I would, however, note one very important difference: the Chinese have foreign reserves (i.e. the money), and the US is still printing it. And that is one thing I didn't touch on (the article was already pretty long): this energy deal is done completely Russian and Chinese currencies, which will validate both from an international perspective. It is well known the BRICS want an alternative to the US dollar.
    Mar 28, 2013. 12:15 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
9,050 Comments
11,402 Likes