Mr. Yukos'  Instablog

The Present Value of Waste Management, Inc.'s Production Tax Credit can be seen below. It is not currently reflected in the stock price, which is undervalued in relation to its peers even beofre taking into account the tax credit.

WMI quotes its electrical production in "home units" - or homes it could power with that electricity. It also quotes its electrical production in kWs.

(1) RSG Maintenance FCF is ($71) million; (NI 110 + D&A 503 – D NWC (684))

Mr. Yukos says buy or be left in the trash. WMI gets paid to get paid - paid to pick up your trash - then paid to sell it....wasting waste or wasting time?  

Without discussing the recent housing data, we have a ways to go till housing prices stablilize, much less recover to previous levels.

Market participants need to take a deep breath when they are trying to call bottoms in markets in general, particularly the housing market.

When demand returns to housing and the "buyer-to-seller&... ratio-or whatever you want to call it-begins to increase, prices will fall faster for a breif period of time due to heavy negotiation on behalf of the buyer. How exactly are banks and consumers coming up with their home values at the moment?...Comps - NO, Liquidation Value - NO, maybe what it would cost to build the home...

Anyone who tries to argue the market price of their home - with firm knowledge - is in denial. Consider the following scenario:

If there are ten houses in a small subdivision for sale and one sells, there is one less buyer in the market. Considering the overall economy, job and "net worth market", that could have possibly been the ONLY buyer. So that home sale price cannot be used as a comp.

When you finally think housing prices have hit their bottom, are you just going to go into the market and pay the great asking price? No. You are going to negotiate harder than you have even negotiated before because you know that sellers and real estate agents are begging for a deal to come there way. You also know that you are one of few buyers (hypothetically).

The point is, when we see this housing data month to month, whether it be existing home sales or median sales price, the data needs to be taken with a BLOCK of salt. The demand  implied in this data can simply disappear month to month because of the hemoragging in the job market and overall level of distressed sellers.

Housing is going to be one of the last markets to stabilize in this recession and the earlier you come to terms with that fact the better off you will be. It is a large asset, ill-liquid, and overall a challenge and headache to "get into". It's easy for equities to be seeing green shoots by way of speculation - but that simply doesn't exist  in the housing market. Homes are not worth what the bank is using for an equity loan, nor are they worth what the median data says. When buyers return to the market, prices will fall further from heavy negotiation. Upon stabilization, we will see an uptick in existing home sales - but prices will acutally fall further than they are now...

For Earth's sake, I hope that the market participants who are saying "the housing market will lead the economic recovery" are not right.

In light of crude's recent rise, along with global equity markets, it'd be in the best interest of consumers to lock in gasoline prices with PowerShares DB Oil Fund, not  USO or OIL, at the next meaningful pull-back in crude. Out of these three highly correlative ETF's that track crude, DBO provides the highest monthly correlation, the second lowest management fee, and the most favorable tax application. There are quite a few articles floating around the web, some on Seeking Alpha, addressing the idea of hedging gas prices with ETF's, but none have been taken that seriously. Of course it's not a "perfect" hedge but it is an optimal hedge, and if you catch it right, you might be able to lock in a profit, even if gas prices stay flat.  From time to time, DBO get's out of line with crude and by buying it you can actually hedge a larger about of crude at a cheaper price. I'll let you do the math on this one, just consider that DBO trades at a ratio to crude, as does gasoline to crude - just take a look at historic monthly and weekly prices.

Mr. Yukos is writing a proposal to six members at three different municipalites about this idea and will send it to whomever requests to see it once the paper is complete.

The idea is to hedge municipal fuel expenses with DBO; since they are quite enormous as you can imagine.