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  • Is Citigroup Jumping Into The Fire? [View article]
    "Just because derivatives are complex doesn't mean they are risky."

    Nor does it mean they are NOT risky. In light of events of the last decade, we should be worried. We do not know (and I wonder if anyone at the big four firms knows), just how much of their derivatives are for hedging and how much are part of trades fraught with risk.

    No one claims they are doing anything illegal, but so what? And, say, if Chase is using a derivative to hedge, the counterparty may be taking a great amount of risk. It's possible that both parties are hedging, but we just do not know.

    And if some of the big four have handed off the risk through buying credit default swaps, that only hands off the risk to someone else.

    If the last decade hadn't happened, maybe I wouldn't be concerned. The conundrum is that investment houses should be able to run their own business, but we saw how government had to get involved in 2008.

    And we're assuming there aren't any rogue traders and that the firms are fully compliant with all the regulations.

    Thanks for the article.
    Jan 8, 2015. 11:56 PM | 1 Like Like |Link to Comment
  • Seadrill Shareholders Should Be Patient [View article]
    A good perspective to have.
    Jan 8, 2015. 04:22 PM | 1 Like Like |Link to Comment
  • Seadrill: Perfect Storm In Offshore Drilling Market Provides Perfect Buying Opportunity [View article]
    Short and sweet.

    And thanks Tankerat for the article. It's a sign.
    Jan 8, 2015. 04:13 PM | 3 Likes Like |Link to Comment
  • Seadrill Hopes Combination Of New Floaters And Competitive Dayrates Enough To Win [View article]
    If everything CNBC said was silly, then be a contrarian and do the opposite. Some of what they say is okay.

    I don't know just what Anthony heard, but to trash all CNBC commentary is a bit harsh.
    Jan 8, 2015. 01:54 PM | Likes Like |Link to Comment
  • Annaly: I Am Seeing More Reasons Not To Own This Stock Right Now [View article]
    You makes sense to me. Mreits do well in a stable or slow-moving interest rate environment, and there’s too much uncertainty about that environment now.

    In 2012, the spread narrowed a lot and mReits went down. In 2013 the ten-year rate skyrocked and mReits went down again. I kept thinking the spread was what mattered most, but I don’t think that anymore.

    Still, the FED doesn’t want to tank the economy, and for a long time now, that’s meant ZIRP. But manufacturing activity is rising, which puts pressure on short-term rates. Even if you think that low inflation gives the FED room to maneuver, inflation could rear it’s ugly head at any time. For example, low oil could end for a number of reasons, sending gas prices up quickly. Do we want to depend on low oil prices? Again, there’s too much uncertainty about short and long term rates.

    My question is whether this possible upcoming environment will affect the adjustable rate mReits too. If the interest rate environment is shaken again, I think the entire sector will go down. So the likely answer is yes there, too.
    Thanks RS, for putting this on my radar screen again.

    As for Jeffrey Gundlach, who is standing in the wings for a possible run at being the new bond king, he isn't predicting an inversion, but if the rate on the 10 year plummets as he thinks it will, the damage to Annaly will come quickly.
    Jan 3, 2015. 03:57 PM | 1 Like Like |Link to Comment
  • Annaly: I Am Seeing More Reasons Not To Own This Stock Right Now [View article]
    I forgot to add that the options are thinly traded, so the spreads are horrendous.
    Jan 3, 2015. 03:49 PM | 3 Likes Like |Link to Comment
  • Annaly: I Am Seeing More Reasons Not To Own This Stock Right Now [View article]
    Since collars are intended to protect your position, usually after a substantial gain, I view them as devices to buy time. But in this case, how much time? There's too much uncertainty, so buying time makes little sense to me.
    Jan 3, 2015. 03:08 PM | 1 Like Like |Link to Comment
  • Annaly: I Am Seeing More Reasons Not To Own This Stock Right Now [View article]
    Seadrill, of course, now has no yield at all. But that's another story.
    Jan 3, 2015. 11:49 AM | 1 Like Like |Link to Comment
  • Understanding Seadrill's Forward Financial Needs [View article]
    This article is the second I've read today that said, in effect, SDRL would not have to pay for any completed ship if they choose not to. If true, then in a worst case scenario, their income would drop from fewer contracts, but the threat of the debt overhang would vanish.

    Since numerous articles have mentioned the plague of having to pay for ships now under construction, I must say I'm confused. Power Hedge doesn't seem confused about this, so maybe he could clarify this critical point: Is the company obligated, or not?
    Jan 3, 2015. 02:06 AM | Likes Like |Link to Comment
  • Seadrill Limited: Complete Fleet Status As Of December 30 After Acquisition Of The West Polaris [View article]
    Impressive
    Jan 2, 2015. 01:31 PM | Likes Like |Link to Comment
  • Seadrill Limited: Complete Fleet Status As Of December 30 After Acquisition Of The West Polaris [View article]
    Wow, that's about halfway between the east coast of Scotland and the west coast of Norway. If they can station a platform there, can the Arctic be far behind?
    Jan 1, 2015. 02:26 PM | Likes Like |Link to Comment
  • Seadrill Limited: Complete Fleet Status As Of December 30 After Acquisition Of The West Polaris [View article]
    I doubt it. If JF shuffles around assets like you say, then he's more likely to loan Seadrill any needed money himself, or continue buying stock. I don't think either one will happen, though.

    Lower oil prices either increase the demand for oil or decrease the supply. Lower oil prices make for higher oil prices, other things being equal. This says nothing about WHEN this will happen—only that eventually it will.

    But Keynes said the market can stay irrational longer than you can stay solvent. So some might ask whether Seadrill can hold on before they can’t make a debt payment (bankruptcy). I ask it a little differently – who will be the last man standing? Not all drillers can go under, so which one is best? Seadrill is. They have the newest fleet, and oil companies want the best in these liability-prone times. Also, newer rigs are less likely to have down time.

    So will Seadrill’s debt catch up with them? Nothing is certain but I think Seadrill can survive. They already took a huge step in eliminating the dividend. The purchase of the West Polaris from SFL will help their cash flow. Their ships are almost all contracted through 2015, and 10 year rates have fallen a lot and short term rates aren’t going anywhere for another year. If it comes down to it, Seadrill will be the last man standing.
    Jan 1, 2015. 02:23 PM | Likes Like |Link to Comment
  • Taking A Closer Look At Seadrill's Debt [View article]
    So the way I look at it, a figure above 198K is better than not contracting it out at all. Of course, that ties the rig up at a low price for a long time, which is where management comes in. Should they take a lower figure now or wait for a better price later?
    Dec 31, 2014. 01:36 PM | 1 Like Like |Link to Comment
  • Seadrill Limited: Complete Fleet Status As Of December 30 After Acquisition Of The West Polaris [View article]
    Thanks for the information, Fun Trading. Look forward to future updates.
    Dec 30, 2014. 04:20 PM | Likes Like |Link to Comment
  • Taking A Closer Look At Seadrill's Debt [View article]
    Thanks Dave and Saratogahawk, for your discerning, ear-to-the-ground comments. (Make that last one "fathoming the depths of the situation.")
    Dec 30, 2014. 03:25 PM | Likes Like |Link to Comment
COMMENTS STATS
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