THE CRAZINESS
JUST DOESN'T STOP
It seems like the one long day that started last week continues as we wait for so many uncertainties to work themselves out. Some like the final bailout bill from Congress will be resolved in the very short term. The final outcome will take months and years to play out. Yesterday we added the 30 dollar oil short squeeze on the expiring October contract. I don't know what was funnier..the short squeeze or the idiots in the main stream media who ran with the oil headline with no understanding of the technicals that caused it. Oil begins the day at 107 on the Novemeber futures contract. Any bets on headlines that oil dropped 20 dollars today? Don't hold your breath. And btw CNBC did a great job yesterday pointing out exactly what was happening at settlement.
This morning we have no corporate news and no upgrades or downgrades so every mlp tick today will be tied to the overall market. Crude is down 2 dollars this morning. Nat gas is a little higher. Stocks are lower. Today has the potential for another reversal day but things are so volatile that i really have low confidence on trying to trade this mess.
joseph cioffi's Source Page - Associated Content
21 comments:
OGE + ETP NEWS:
-----------------------------------
UPDATE 1-OGE, ETP to form natural gas asset partnership
Tue Sep 23, 2008 8:44am EDT
NEW YORK, Sept 23 (Reuters) - OGE Energy Corp (OGE.N: Quote, Profile, Research, Stock Buzz) and Energy Transfer Partners LP (ETP.N: Quote, Profile, Research, Stock Buzz) said they would put their natural gas assets together in a joint venture to create a master limited partnership.
OGE will contribute its Enogex midstream assets, which include its natural gas gathering lines, 2,300 miles of transportation pipelines and two storage facilities.
Energy Transfer Partners will contribute its Transwestern Pipeline Co, ETC Canyon Pipeline and its 50 percent stake in Midcontinent Express Pipeline.
The companies will launch a public offering of the business after the creation of the MLP.
Energy companies have long used MLPs to house assets that generate steady cash flow, such as pipelines and midstream gas properties, since they pay out nearly all their operating cash flows to investors and provide tax advantages to corporations.
The new venture, to be called ETP Enogex Partners, will initially be led by an executive management team including OGE Chairman and Chief Executive Pete Delaney and ETP Chairman and Chief Executive Kelcy Warren, as well as the chief operating officers from both companies.
OGE was advised by UBS Investment Bank and ETP by Credit Suisse. (Reporting by Matt Daily; Editing by Lisa Von Ahn)
http://www.reuters.com/article/marketsNews/idINN2336508620080923?rpc=44
This "merger" idea sucks. What is in it for current ETP holders? We lose great assets and the GP gets units in a new company, is that correct?
Do current ETP holders receive anything in exchange for the transfer of assets? This deal could benefit ETE holders, but I don't see how ETP holders gain anything from this?
Was the purpose of the JV to ensure that ETP's new and existing pipelines run at full capacity?
Bruce
Sen. Schumer talked of taxpayer "warrants " ahead of Bondholders and shareholders.
A killer for any hope for banks to raise new capital in capital markets.
The more the Senators talk, the less confidence markets have that there will a workable solution enacted.
It is really sad that our country is run by such ignorant windbags.
This market is just "uninvestable" right now. Look at BPL, -8% in 2 days. Why risk capital trying to pick the bottom. Yes you can clip coupon, but at what cost?
Does anyone here really believe that we are going higher? We are all trapped longs, hoping for the market to go up. Hope doesn't make money.
Bruised
We have the best Congress...That money can buy.
As an eternal glass-half-full guy, I now find myself on a narrow ledge high above the concrete earth hoping someone can talk me down.
Here's the question: Since we know MLPs are a) caught in this nonstop deleveraging spiral, b) thinly traded and therefore subject to violent price swings on low volume, and c) will continue their march downward until we truly reach the end of the credit meltdown, then why not sell MLP positions now, take the tax writeoffs, and wait for confirmation that the markets are rebounding?
I don't mean to sound negative, but Jeeze Louise, I've had too many days of tension headaches strung together in a row to ignore the cause.
Lee
Honestly, the MLPs are the biggest pieces of shit I have ever owned. There are NO circumstances where they actually go up and stay up. We have one day rallies, which always reverse and see us give the gains back. These things are just yield traps.
Suprisingly REITs, which have a similar structure are outperforming the market.
MLPs just suck.
Bruised
"then why not sell MLP positions now, take the tax writeoffs, and wait for confirmation that the markets are rebounding? "
Lee,
Believe me, I feel your pain!
The problem I have always had with such maneuvers is that you must be right twice; once when you sell and again when you buy. That is tough to do--particularly in today's market where so much rides on non-fundamental factors, where volatility is so high and predictability so low.
The time to have followed your proposed strategy was many months ago. Given the decline we have already experienced I think the safer long-term approach is to just ride it out. We will get to the other side. I just don't see selling at today's levels as anything but a pretty risky bet.
My 2 cents.
Bruce
The volumes yesterday and today are pretty light in the MLPs. My sense is the "forced" sellers are done and wiped out. Now we just need to go through a distribution phase. If we start to breakdwon then all bets are off and head for the hills.
I have 0% confidence in this market, our govt, MLPs or anything else related to finance and govt.
BPL -3% on 25,000 shares. C'mon the liquidty has always been bad, but this thing has dropped 9% on less than 100,000 shares in two days.
The MLPs must implement share buybacks and debt retirement plans, even if it means distributions stagnate for awhile. This is getting ridiculous.
The market has spoken: this ETP/OGE deal sucks for unitholders.
It's not just MLP's, it's all yield vehicles. Equity closed end funds are down on an up day; retail investors are bailing out.
"The market has spoken: this ETP/OGE deal sucks for unitholders."
I don't think that one can attribute anything to hourly, daily, or even weekly swings in specific MLPs in today's market.
In this case, ETE is being hit harder than ETP--which does not strike me as consistent with the notion that the market is saying that the JV will be bad for ETP unitholders.
Bruce
Bruce,
For the last few weeks it seems like everything has been bad for ETE.
Ramius
One or two more days like this and Friday's gains will be gone. We are just being swamped with sellers.
I am sure that every MLP related fund management company is facing massive redemption requests right now. When your benchmark index has fallen by double digits, investors will want out. We will have to batten down the hatches, the storm is far from over.
One of the major features of MLP's that hinders stocks is these companies are too small and are too thinly traded. REIT's are larger and have more active trading profiles.
We need mergers and acquisitions!
Dave
Post a Comment