Central Banks around the world have been active this morning as they inject the money (de monet') in order to stablize markets so we have stock futures up this morning but they have pulled back off the highs as news of Morgan Stanley is in talks with Wachovia. Now if you ask me, why would the feds even allow this. Suddenly Morgan Stanley's balance sheet will part of Wachovia's balance sheet. And who will be responsible for this if Wachovia goes down? The tax payer and the Fed. Maybe that's why Morgan Stanley's stock is 2 dollars lower.
Now on to mlps. Energy stocks are catching a bid this morning with crude up 5 dollars to 101 this morning. A dead cat bounce is certainly in order but remember we are tied to the market and especially the fear spreads we're seeing in Libor and in treasuries. When you have negative interest rates...you loan money to the government and pay them for taking your money...things are really in a mess.
Watch what happens to Constellation Energy (CEG) and if it gets taken over. Might provide some clarity to Constellation Partners (CEP) and that stake that CEG holds. Yields in mlp land are making all time highs. You have to pay 15 to 20% in order to get someone to take risk. These are extremes we may never see again folks in our lifetime. But we won't know that until we get through the market crisis and that still needs lots of time to get through. No other corporate developements and no upgrades or downgrades.
Please be sure to read last night's post on Fear. Enjoy the dead cat bounce!
joseph cioffi's Source Page - Associated Content
2 comments:
The causes of the fear you're describing have been predicted with uncanny accuracy for a long time now by people like Julian Robertson, Peter Schiff, and Jim Rogers, to name a few. We all want to believe we are just passing through a period that will naturally self-correct so we can all go back to sleep. But my fear is that we are witnessing a paradigm shift of seismic proportions that could cause fundamental changes to our entire financial infrastructure.
Sorry to rain on the dead cat bounce parade we’ll probably enjoy today. By the way, today is Thursday.
Lee
Well looks like Mid American Energy about 80% plus owned by Buffett is going to buy CEG. To me this is an affirmation of the values in MLP's today.
Ron
Texas
Post a Comment