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  • Greece offers concessions? [View news story]
    Or Nazi reparations, right?
    Apr 24, 2015. 07:28 AM | 1 Like Like |Link to Comment
  • Crude inventory builds more than expected [View news story]
    I wrote, at the top of this comment segment, who the global producers experiencing declines are. Your assumption is that their output has declined because of maturing fields or declining output, but that is neither what I suggested or stated. My point was that these are the producers losing *global market share*, and that they would be quite happy to fill in any gaps in supply. My point, again, is that there is a lot of global supply slack, which has nothing to do with the tack taken in your comment, about declining production.
    Apr 22, 2015. 04:52 PM | Likes Like |Link to Comment
  • Crude inventory builds more than expected [View news story]
    With our crude locked inside our borders, the only swing the US is swinging is in domestic demand. The rest of the world can't buy WTI, so the question that arises is:

    How much production must come offline in the US before int'l producers can no longer keep up with US demand?
    Apr 22, 2015. 01:48 PM | 2 Likes Like |Link to Comment
  • Tesla to unveil home, utility batteries in rollout next week [View news story]

    Interesting point on utilities installing them themselves; Also, works either way for me as my primary interest is in lithium (and will continue to be as long as that is integral to the most popular battery technologies).
    Apr 22, 2015. 01:36 PM | 2 Likes Like |Link to Comment
  • Crude inventory builds more than expected [View news story]
    How is it not true when it's already in the data?

    US shale has already displaced ~2m barrels of Nigerian product already. And post elections the new Nigerian government is very favorable to expansion in the industry. That's just one producer.

    3m barrels is nothing in this environment.

    In the meantime the volume of temporarily shut down and drilled but not pumping wells just keeps increasing in the US.
    Apr 22, 2015. 01:31 PM | Likes Like |Link to Comment
  • Crude inventory builds more than expected [View news story]
    Decreasing production has primarily been concentrated in US, Mexico and LatAm, and Sub Saharan Africa, with almost no loss of market from other producers.

    I've been making the comment that any slack in US will immediately be filled by other producers and that US production alone doesn't make the bullish case for a while, but people just keep staring at the US rig count looking for clarity.

    Also, the same day SA declared it was done intervening in Yemen, ships picked up crude cargos.
    Apr 22, 2015. 11:25 AM | 1 Like Like |Link to Comment
  • Sinopec sells $6.4B in bonds, Asia's third-largest on record [View news story]
    Everyone is borrowing in Europe these days.
    Apr 22, 2015. 10:51 AM | Likes Like |Link to Comment
  • Greece reform list gets delayed again [View news story]
    Free ride? Really?

    First, on the fiscal side, Greece has made an adjustment of close to 20 percent of potential GDP, or the U.S. equivalent of about $3 trillion per year (not our usual 10-year calculation) in spending cuts and tax hikes.

    Second, Greece has accepted roughly a 25 percent cut in nominal private-sector labor costs, or more than 30 percent relative to the euro average, far more than anyone else.

    From nyt a couple days ago

    Next up, you will tell me the numbers are lies, and the source is making things up, and you will go about your life continuing to believe whatever you choose to believe.
    Apr 22, 2015. 10:40 AM | 1 Like Like |Link to Comment
  • Tesla to unveil home, utility batteries in rollout next week [View news story]
    "Long term, no utility will leave that kind of arbitrage for the little guy to play."

    The reason there is such an arbitrage is because of the way power generation works. Baseload production is both hard to raise as well as hard to decrease. Baseload is usually nuclear, coal, hydro, wind. Peak generation used to be covered in large part by diesel but diesel has been so badly overpriced for so long a lot of that has been eclipsed by other options, notably natural gas.

    The nice thing about natural gas is that its cheap enough and plentiful enough for baseload now, but the important thing to note is that because of fluctuations in the grid peak load production is still important and 'overproduction' does indeed occur and frequently. Utilities want that over production absorbed, and during night time when overall use is lower so they can reduce the variance between peak and base.

    Batteries are a fantastic buffer for real deal current scenarios and will be so for the forseeable future.
    Apr 22, 2015. 10:32 AM | 2 Likes Like |Link to Comment
  • Tesla to unveil home, utility batteries in rollout next week [View news story]
    Lithium producer investors do care.
    Apr 22, 2015. 10:26 AM | 4 Likes Like |Link to Comment
  • EU debt levels surge to records [View news story]
    People need to stop repeating that creditors will be left holding the bag. I don't agree with most of your comment 11146471 because it presents the fiction that Greece in a *unilateral* default could proceed without issue. A banking collapse is nothing to scoff at, and, even though Greece's economy was very insular pre-2001, it most certainly no longer is. Interbank lending would most certainly collapse in the scenario you describe and the economy would revert to cash only. Since there simply cannot be enough cash on hand at any given moment to transact in any meaningful way it is simply not a scenario that has any reason to be discussed.

    Further, although the entities hurt by the default would indeed primarily be institutions, and not private sector investors, because Greece debt was reissued in 2012 under English law and not under Greek law, the chances of Argentina style problems would emerge (a long, laborious, drawn out process of renegotiating the debt and most likely.... holdout creditors). It would be extremely onerous and painful. Creditors would not walk away with nothing, it just can't happen.

    The point in Greece's favor is that the amount of money already invested in Greece is significant and that the collateral damage from its default would be just dramatic on its EMU partners (massive losses on the private sector from fixed investments for one).

    This is why a unilateral default on one hand, or a push and ejection by the Eurozone partners on the other, is just so far fetched and unlikely, and why a new Greek credit event is most frequently being described by informed observers as a potential 'accident'.

    The only likely real hard default possible would be Greece missing a payment after running out of cash and misreading its bank account, while at the same time the EMU restrains its access to emergency funding. Realistic scenarios all revolve around a soft default or a rolling default with capital controls.
    Apr 22, 2015. 08:14 AM | Likes Like |Link to Comment
  • EU debt levels surge to records [View news story]
    Fair enough but the distinction is meaningful in that the two types of events lead to significantly different endings.

    Had Greece indeed defaulted in 2012 it is arguable that it would have exited said default with a significantly better debt-gdp ratio than it ended up with when it exited the restructuring. Official sector holders of Greek debt took no losses on their actual principal since they were the ones providing the new financing and they could dictate terms.

    Greece would be in a completely different place today had a real default occurred, although I have no idea if that would be a better place or worse considering I am a big proponent of regulatory environment reform in Greece.
    Apr 21, 2015. 06:12 PM | 3 Likes Like |Link to Comment
  • EU debt levels surge to records [View news story]
    "a unilateral default would only be feasible if Greece first introduces an alternate currency."

    I agree in a unilateral default that would be the case.

    There have been, however, multiple suggestions as to how Greece would survive an "accidental", say, default, including the pharma IOUs of 2009 or other similar IOU type products.

    Further, it is conceivable that Greece could 'soft default' by starting with capital controls and go from there.

    It is however rather unlikely as it is far more likely that Greece can survive to June 20 as described in this Bloomberg article

    and subsequently make it all the way through 2015. That article is in interesting take.
    Apr 21, 2015. 05:52 PM | Likes Like |Link to Comment
  • EU debt levels surge to records [View news story]
    ""effectively," they have already "defaulted" and "negotiated" new arrangements, more than once... Money sent to Greece is "foreign aid," not loans, no matter what they call it."

    How do you reconcile that with the fact that the reforms have been dictated by its lenders? Or the fact that the official sector ignored its own advisors and didn't participate in the debt restructuring?

    Also, Greece didn't default. In Greece's 2012 credit event what occurred was Greece enforcing a retroactively inserted collective action clause in order to restructure its debt:

    "The EMEA DC resolved that a Restructuring Credit Event has occurred under Section 4.7 of the ISDA 2003 Credit
    Derivatives Definitions (as amended by the July 2009 Supplement) (the 2003 Definitions) following the exercise by
    The Hellenic Republic of collective action clauses to amend the terms of Greek law governed bonds issued by The
    Hellenic Republic (the Affected Bonds) such that the right of all holders of the Affected Bonds to receive payments
    has been reduced."
    Apr 21, 2015. 05:45 PM | 2 Likes Like |Link to Comment
  • JPMorgan: Worst is over for oil [View news story]
    Oh wow. The run-up has been on pure speculative buying. There's huge momentum pumping oil up and it can hold it up for a while - and probably will. There's some increase in fundamental demand but the slack on the supply side is still growing.

    Someone's setting up some T-Ball.
    Apr 21, 2015. 12:46 PM | 3 Likes Like |Link to Comment