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hat_trick3

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  • U.S. Oil Tells A Tale Of Futures Past [View article]
    when you think about it, this is not dissimilar to the MBS/CDO players of 2004-2007.

    basically, we have hundreds (if not thousands) of operators taking out permits getting loans and hoping/praying that prices either stay buoyant or go up to keep them out of trouble.
    This is a classic boom bust story and the red herring are the Saudis who these jackasses will blame squarely when they have to declare BK
    This is going to end badly for a lot of people if past is prologue.
    Dec 16, 2014. 10:24 PM | Likes Like |Link to Comment
  • Oil & Gas Stocks: Pain, Then More Pain... When Is The Gain? [View article]
    We have relations who literally had to leave their house unoccupied and unsold when they just couldn't find work after the last bust. They moved back east and never returned.
    They did eventually sell their house at a minor loss nearly a decade later.

    People opining about how it's all going to get better in no time and that this just an inconvenience are in the process of paying for a very expensive education.
    These boom bust cycles are multi year in the making, not multi-month
    Dec 16, 2014. 10:04 AM | Likes Like |Link to Comment
  • Oil & Gas Stocks: Pain, Then More Pain... When Is The Gain? [View article]
    Don't know, but we're going to find out soon enough. I would expect to see hundreds of companies large and small, public and private go belly up by summer if this is the new reality for pricing.
    From what I've been reading, very few can make money at current prices.
    The question is who can handicap this? I sure as heck can't. Especially when we have so many non-GAAP measures for F&D and what not. None of this is audited or can be relied upon to my knowledge.
    Dec 15, 2014. 12:21 PM | Likes Like |Link to Comment
  • Oil & Gas Stocks: Pain, Then More Pain... When Is The Gain? [View article]
    the Tisch family. They own over 50% of the common and take the long view, say decades. they've been buying ALOT of shares down here.
    Dec 14, 2014. 11:06 PM | Likes Like |Link to Comment
  • Oil & Gas Stocks: Pain, Then More Pain... When Is The Gain? [View article]
    great point freed.
    We're going to see massive goodwill writedowns in the coming quarter(s) as many of these "plays" (don't you just loathe that word) will be marked down substantially.
    And I'm sure some will be recognized at zero.

    This has such a long ways to play out. There is no hurry to buy anything.

    mark my words, you're going to see a whiplash snapback in the coming days or weeks which is going to ensnare a lot of hopeful reckless speculators. They're going to jump aboard with both feet not wanting to miss the ride only to watch hopelessly as it plumbs back down even deeper. Then they will sheepishly say "but I'm looking at the long term, I'd not concerned about the next couple months, I'm looking at 2-3 years out"
    This happens like clockwork.
    Dec 14, 2014. 10:59 PM | 7 Likes Like |Link to Comment
  • Saudi Arabia: Do The Math [View article]
    the author was talking about opportunity cost, not real cost.

    But this is all theoretical. The claim is being made on something they didn't do, NOT something they actually did.

    It makes no sense in the world why Saudi Arabia out of the goodness of their hearts would throttle back production and absorb ALL THE COSTS while the U.S captures all the gains. This is an agreement without proper consideration, which if you've studied contracts, is not a valid contract.

    The way I see it, unless the N.A. producers are willing to cut back, why should they? It is totally and completely illogical.
    Dec 14, 2014. 10:05 AM | 1 Like Like |Link to Comment
  • What Does This Week's Big Twist In The U.S. Treasury Market Mean For The Next 10 Years? [View article]
    Got it. Thanks for your work you've put out here for us to read. Basically you have modeled 3 different scenarios that tell us that we are heading toward an inverted yield curve?
    I've noticed of late that the long end has rallied and short rates have actually gone up of late.
    Can you explain why this is happening in plain speak?
    These models remind me of the models we did in college where "ceteris paribus" was always given as a disclaimer, because afterall, in the real world we're going to have exogenous shocks that can and will have dramatic effects on rates, but as you point out, will eventually smooth out.
    Do I have this right?
    My only criticism is it would be helpful to put a 5 sentence conclusion recapping the essence of your article for us slower on the uptake.
    thanks again.
    Dec 14, 2014. 09:07 AM | 1 Like Like |Link to Comment
  • What Does This Week's Big Twist In The U.S. Treasury Market Mean For The Next 10 Years? [View article]
    Aside from ascertaining whether a bond is a good credit or not, you build a portfolio of bonds based on maturity schedule and where you want to be. Now, if you are high yield guy, that is an entirely different discipline, and has everything to do with undertanding the issuer and nearly nothing to do with bond forecasting.

    I contend this is pretty simple. I've been buying bonds for many years and this notion or idea that one can predict interest rates or how they are interrelated with macroeconomic themes is a colossal waste of time in my opinion.
    They are never right.
    Every once in awhile you come across a savant like Gundlach, but otherwise, you have nothing more than a group of highly educated people just getting it wrong all the time. The very fact that most cannot even beat the LIPPER benchmarks (after they pick the one they think is most favorable as opposed to most relevant) is all the proof I need.
    Dec 13, 2014. 01:12 PM | 2 Likes Like |Link to Comment
  • What Does This Week's Big Twist In The U.S. Treasury Market Mean For The Next 10 Years? [View article]
    Holy crap, that was complicated. Perhaps this is why interest rate forecasting is about as accurate as a coin flip (but usually worse)

    rates will stay low and get lower indefinitely for several reasons:

    1) The long term technical trend going back several decades says so.
    2) MV is low and getting lower all the time
    3) labor participation at a multi decade low
    4) demographics
    5) European sovereigns at or below 100bps, means those looking for yield will flock FROM these bonds to UST's.
    There, that is much more simple.
    I say, and have been saying since last winter that 10Y UST's will fall toward 150bps next year. My prediction for this year was 220-240, which was off, but a heck of a lot closer than the "experts" who were predicting rates about 100bps higher.
    Dec 13, 2014. 11:49 AM | Likes Like |Link to Comment
  • Still Waiting For A Little More Value At Canadian Western Bank [View article]
    I got out of this bank on Monday which in hindsight is already a good move. (I held for about 8 years)
    This bank's growth is heavily dependent on the western Canada oil complex, and right now, it is in utter chaos. I would expect to see NPL's a problem down the road.
    If we get back to the teens, I will be a buyer again.
    Dec 13, 2014. 11:33 AM | Likes Like |Link to Comment
  • Saudi Arabia: Do The Math [View article]
    BTW, the reciprocal of this trade is to buy the airlines. It is out there for the taking.
    I like AAL and DAL
    Dec 12, 2014. 09:33 AM | Likes Like |Link to Comment
  • Saudi Arabia: Do The Math [View article]
    well at least someone agrees with me!

    One is beginning to wonder if many of these "plays" are a lot like the old adage that many a gold mining company is simply a liar standing next to a hole in the ground.
    FWIW, Cramer yesterday was very very adamant about selling pretty much every name out there.
    Dec 12, 2014. 09:31 AM | Likes Like |Link to Comment
  • Saudi Arabia: Do The Math [View article]
    Yeah, I saw it.
    Just remember that F&D and D&C estimates are not GAAP. They can mean almost anything and I can assure you, there is no way that you sitting in front of your computer know what is B.S. and what is not.
    I'll stick with Bernstein and other skeptics who are warning there is little to no margin at these prices for most shale plays. The raison d'etre for this whole "revolution" was $90 at the wellhead, not $50.
    Bottom line is, with a $40 cut from the expected selling prices you shouldn't be so naive with what is about to happen to this industry.
    Dec 11, 2014. 10:51 AM | 2 Likes Like |Link to Comment
  • Saudi Arabia: Do The Math [View article]
    The Bernstein report (widely followed) says fully 1/3 of all U.S. shale production is uneconomic at $80/bbl.

    Break even in Bakken is about $63/bbl and the “average” point forward breakeven is estimated at $68/Bbl (at a 7% discount rate and at the wellhead).
    Break even in Eagle is about $68 and $74 point forward.

    Bottom line is the entire U.S. shale revolution is in peril. This is not the time to start placing bets.
    Buy Airline stocks.
    Dec 10, 2014. 01:43 PM | Likes Like |Link to Comment
  • Saudi Arabia: Do The Math [View article]
    lots of topic drift here. I'm not interested in politics, I'm interested in making money.
    I say buy the airlines hand over fist and stay away from all energy co's until at least the week between Christmas and New years.
    Dec 10, 2014. 01:19 PM | 4 Likes Like |Link to Comment
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