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kmi

kmi
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  • Eurozone ministers ponder 'Plan B' for Greece [View news story]
    This is correct. One resolution for the current issue at hand would be a strong default and significant haircut of the official sector debt being carried by Greece. The collateral damage would be tremendous but Greece has already borne that burden, and for 5 years at that, so perhaps it is time for the rest of Europe to share.
    Apr 26, 2015. 05:16 PM | 2 Likes Like |Link to Comment
  • Eurozone ministers ponder 'Plan B' for Greece [View news story]
    " You could actually just cut Greeks pay 50% without Greek exit"

    Recent analysis indicates that Greece has already seen over 30% decrease against the Euro average in wages already. Which is part of the reason the economy has shrunk, the debt burden has increased, and a resolution is becoming less likely. Austerity and shrinking wages/ gdp/ growth aren't going to work.

    Greece should have been allowed to default in 2012. Principal writedowns from the official sector then would have been smaller. If Greece defaults now principal writedowns will be significantly larger.

    When people talk about reforms and adjustments as if they haven't *yet* happened in Greece, I wonder if they are really watching this as closely as they think.
    Apr 26, 2015. 05:12 PM | 5 Likes Like |Link to Comment
  • Eurozone ministers ponder 'Plan B' for Greece [View news story]
    "Even if there is a Grexit reforms would need to be made which a Grexit would force, but reforms could be made without a Grexit."

    Reforms *have* been made. The perspective being brought by Varoufakis/Syriza/Tsipras is that *austerity* is not pro-growth, and that many of the reform programs enacted thus far have served to shrink the economy, increasing its debt and reducing its chances of a successful completion of the reform programs in the process.

    Varoufakis and Syriza are looking to take control of the reform program and go with a US-style pro-growth agenda that short term will be more expensive but long term will have a higher chance of actual success.

    "The most likely outcome remains a referendum which Tsipras loses"

    Highly unlikely this ends in referendum. The Syriza government enjoys tremendous popularity and is a make or break last straw deal for Greeks. The outcome of a Syriza failure to reach accommodation with the Institutions will be a Grexit, not elections and not a referendum.
    Apr 26, 2015. 05:06 PM | 1 Like Like |Link to Comment
  • Eurozone ministers ponder 'Plan B' for Greece [View news story]
    "From the economic perspective, everyone knows that Greece needs to have its own currency to become competitive. "

    Not a single reputable economist in the world would agree with you. This should be rephrased as "one of Greece's many options is switching to its own currency" or the entire previous paragraph loses 100% credibility.

    Also, a coerced ejection of Greece from the EMU would lead to a dissolution of the political union as well, guaranteed. If you can't see how that would play out, take a minute and think it through.

    A unilateral default on Greece's side would annihilate Greece's economy as certainly as a forced ejection of Greece would collapse the entirety of the EU.

    A soft default via a coordinated cooperative program is a million times more likely.
    Apr 26, 2015. 04:52 PM | 2 Likes Like |Link to Comment
  • 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]
    cparmerlee

    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 http://nyti.ms/1ySmHLn

    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 | 1 Like Like |Link to Comment
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