diadochi

diadochi
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  • The Risks Continue To Mount For Energy MLPs  [View article]
    I also like the "average" price of oil cited for 1998, in the depths of the Asian crisis, at $12 dollars a barrel, as if it wasn't an extreme, which it was. Inflation adjusted, that's $17.50 today, and was lower in inflation adjusted terms than oil pricing in the depths of the Great Depression. It represented the Mother of all buying opportunities in the oil patch. We are less than twice that inflation adjusted low now...can we go lower? Possible, but it sure seems that there is a bottom near here somewhere.
    Jan 14, 2016. 11:42 PM | 3 Likes Like |Link to Comment
  • Is A Restructuring Of The Williams/Energy Transfer Equity Deal In The Works?  [View article]
    Now that would be interesting, in the price at a 13 handle was most of the argument. Does it still hold at 18? :)
    Jan 14, 2016. 11:24 PM | Likes Like |Link to Comment
  • Energy Transfer-Williams merger deal looking shaky, reports say  [View news story]
    While I don't like his conclusions, cdocubed makes good points and very much adds to the discussion. Ad hominish references to crack does not. If you disagree, tell the rest of us why.
    Jan 14, 2016. 12:23 PM | 1 Like Like |Link to Comment
  • Energy Transfer-Williams merger deal looking shaky, reports say  [View news story]
    Since the market cap is currently $10b for WMB, the previously agreed upon and allocated $6b cash offer from ETE for WMB is already offering to buy 60% of all shares of WMB in existence up. If WMB gets to $8 then all. And if you order then, as they used to say on those late night tv offers, you would get 1.57 ETE (C) shares absolutely free. Closer to $4 even now at $14.5, IF the merger goes through, roughly half the current quote of ETE. So the market is betting the merger is off.

    I'm guessing that if WMB maintains its distribution in the next 10 days there will be quite a pop, and of course even more in March if the deal goes ahead, pushing WMB to roughly $20, or about 30% above the current level.

    Here's to seeing lower prices so I can get those ETC shares for nothing!
    Jan 14, 2016. 12:07 PM | Likes Like |Link to Comment
  • Energy Transfer-Williams merger deal looking shaky, reports say  [View news story]
    The fear is so extreme it seems that either a cut in distribution is such an unmitigated disaster for income oriented investors that they will sell at any price, or there's a growing concern over bankruptcy, no matter how irrational. The drops are so crazy that they are faith shaking. Nevertheless, I bought more WMB today. Hope I'm not proven a fool.
    Jan 14, 2016. 11:37 AM | 2 Likes Like |Link to Comment
  • Energy Transfer-Williams merger deal looking shaky, reports say  [View news story]
    Well, the new CHK post bankruptcy will be stripped of debt, making it a cash machine for the new equity owners (the current bondholders), so there will be a significant incentive to continue business as usual, and CHK will not have its back to the financial wall like they do now.
    Jan 14, 2016. 11:32 AM | Likes Like |Link to Comment
  • Oil hits 13-year low; energy leads reversal in averages  [View news story]
    Not to mention the 50% conversion and transmission losses to electricity. In fact, compare piped natural gas used at the consumer's home vs electricity as to amount of carbon produced per mm btus and electricity comes out as the dirty fuel by far. It would be interesting to see carbon intensity of CNG vehicles vs electrics to see the full cycle carbon costs.
    Jan 11, 2016. 12:42 PM | 2 Likes Like |Link to Comment
  • China, The End Of History And The Last Great Commodities Boom  [View article]
    All those empty Chinese freeways and apartments will probably eventually be filled and heated as China makes a probably painful (especially for the Party, who will find the micromanagement of a consumer society an impossiblity) transition away from a command economy.

    The US made a similar transition somewhat after WWII; lots of command economy-like infrastructure investments during the Great Depression and post war like roads, dams, power infrastructure. (It seems that not just a few people morn the passing of such certainty about the economy even now. ) But energy consumption leapt in those early consumer led years as infrastructure investments paid off and roads filled with cars...and then flattened out as effeciency and environmental goals kicked in.

    I suspect something similar will happen in China, unless they do indeed get caught in the middle income trap, which may be a function of how quickly the Party adapts to changing conditions and cedes power.

    So hard times in many commodities; energy not so much, although investors in the later may be in for a long wait.
    Jan 10, 2016. 12:47 PM | 9 Likes Like |Link to Comment
  • Oilprice.com's four big energy stocks to watch in 2016: XOM, DVN, RIG, KMI  [View news story]
    No, it's real enough. Most people move every 7 years on average, so they miss the changes in their local climate. I've been in the same area for 28 years, and do quite a bit of work at a site that is at 5k' AMSL, and I've seen a dramatic change in the amount of snow at that location (or the lack thereof) over the decades, and I see it at my home at 2400' AMSL which used to be at the snow transition zone which is now above us.

    That said, I'm very bullish on Natgas as a really great, low carbon fuel for heating, and turning turbines in the dead of windless nights. And the fracking revolution brought us lots of that; it's just a matter of building out the pipelines to get this low entropy, environmentally friendly fuel to consumers. The light oil produced from the same wells will be used in lesser amounts for transportation, especially aircraft where CNG cannot be economically used.

    Eventually, we will transition to low carbon energy sources, but the journey will be halting and long.
    Jan 9, 2016. 10:22 PM | Likes Like |Link to Comment
  • Realty Income Corp.: Historically Expensive At $51, But I'd Go All In Before $44  [View article]
    REITs sound an awful lot like MLPs, in that they sell equity to buy assets and use the cash flow from those assets to pay dividends; or is it sell equity to fund dividends, and cash flow to buy assets...I get so confused. :) Anyway, anyone that owns KMI or any other MLP knows how that movie is playing out, as the market is suddenly done with the selling equity part of the equation, causing a spiral in equity pricing, followed by a fairly draconian dividend cut, as the MLP has to now operate with cash thrown off by assets only. Anyone want to explain how REITs are different?
    Jan 9, 2016. 03:30 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: The Year Stocks Went Nowhere  [View article]
    Ignite inflation. That will get sleeping money out of bed! That has been the stated goal of many CB's since 2009.
    Dec 31, 2015. 07:41 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: The Year Stocks Went Nowhere  [View article]
    Probably would just inflate prices by the same amount. So the $1000 wouldn't create a permanent increase in the standard of living.
    Dec 31, 2015. 07:38 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: The Year Stocks Went Nowhere  [View article]
    But this doesn't apply to the inherited rich, does it? It's OK to give them all sorts of non-earned money.

    Agreed that it creates dependency...which is an issue for the families of the wealthy as it saps initiative.

    Expanding the Earned Income Credit on a temporary or permanent basis would be better than just helicoptering it in. Or perhaps we could pay for some public amenity and spread it that way a la the CCC.
    Dec 31, 2015. 07:35 PM | Likes Like |Link to Comment
  • Wall Street Breakfast: Oil Glut Weighs On Global Markets  [View article]
    Have you ever grown a garden? Brussels sprouts, for example, are usually covered with aphids. Good luck getting them all off.

    Bonus App├ętit!
    Dec 11, 2015. 12:14 PM | 4 Likes Like |Link to Comment
  • Kinder Morgan: A Crude Awakening Awaits Bottom Fishers Of The Dividend Cut  [View article]
    So, divi investors have now seen their KMI investment hop from divi to value/growth portion of their portfolio. No big, unless the divi is required to keep the lights on.

    Hold for five or ? years and you will at least be made whole or perhaps much more. The alternative would have been to seen a big fat goose egg where the KMI value would have been if the company had continued to be drained by an excessive dividend. (And, yes, I got lulled too...I looked way too much at the dividend and too little at other metrics.)

    My plan has aways been to hold this company until all the screaming and hair pulling of the last couple of months is a distant memory, then assess.
    Dec 8, 2015. 09:09 PM | 3 Likes Like |Link to Comment
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