MASTER LIMITED PARTNERSHIPS

Tuesday, September 09, 2008

I really wonder as one poster suggested whether this is all Lehman related. The stock is getting killed as it is now below 10 and down 4 on the day.

22 comments:

Anonymous said...: Joe,

There may be something to your LEH logic. LEH is in a death spiral now, its -30% today and they will be liquidating everything that isn't core to its survival.

There is definitely somthing wrong in MLP land, beyond the obvious bear market reasons.

Mr. Pipes (reporting from the bunker); 9/09/2008 11:07 AM
Anonymous said...: Let's just make the broad assumption that LEH is dumping...; 9/09/2008 11:08 AM
Anonymous said...: I agree withg Mr. Pipes. The MLP market is discounting some as yet unseen event.

When prices plunged with a lot of momentum through the moving averages, it signified more downside to come. That doesn't make it any easier accept, but I can't say I'm surprised by it. At this rate our pain will be shortlived because we will be at $ in another few weeks.

Steve; 9/09/2008 11:14 AM
Anonymous said...: The more I think about it, the more I'm sure of it.

Paulson's bailouts, while necessary were incomplete.

Paulson while reducing moral hazard in the distant future, has created a " bubble " in risk avoidence.

Why buy or hold bank stocks if common and now preferred shares are going to be sacraficed on the alter of "moral hazard".; 9/09/2008 12:11 PM
Anonymous said...: This just feels like capitulation selling to me. Someone is dumping and does not care if they get the best price, they just need to get out.; 9/09/2008 12:14 PM
Anonymous said...: CEP is bad, but it isnt this bad. This is a dump job going on. CEP is still producing natgas, still drilling, tc. Why the panic?; 9/09/2008 12:15 PM
Anonymous said...: Jim Cramer
SHORTS
9/9/2008 12:14 PM EDT

The shorts want to crush this market--particularly the black holes.,.LEH/AIG/WM/C---i cannot believe these companies dont get how they can be wrecked...; 9/09/2008 12:17 PM
Anonymous said...: End of the Gunslingers

By Jim Cramer
RealMoney.com Columnist
9/9/2008 11:46 AM EDT

Are we witnessing the end of the hedge funds that are run by young guns who don't know how to trade and don't know what it is like to have redemptions?

As you will soon see by a piece I wrote this weekend, we are repealing the entire move in commodities. More important, we are doing it at lightning speed because there have to be some funds that are just going under right now.

Consider this: Natural gas and oil -- the futures -- have gone down, but the stocks have basically accomplished something I would never have thought: they are forecasting natural gas at $5. FIVE DOLLARS! Perhaps the endless ads by T. Boone Pickens have convinced us that there is a huge amount of gas and there's no place to put it!

These breathtaking declines, though, aren't occurring with this speed without the help of fund managers who simply can't control their investors or their positions. They are occurring because many firms are just shutting down and returning whatever capital is left of their money.

It is happening because the losses are just too great.

And it is happening now.; 9/09/2008 12:19 PM
Anonymous said...: I hate to point this out, but a case can be made for future earnings ( because of demand destruction ) and the need for credit facility rollovers ( or equity financing ) are a "black hole" for mlps.

BTW I'm not short, just worried.

long tpp, dpm, EP ( not a MLP ); 9/09/2008 12:37 PM
Anonymous said...: you would think someone would know
for sure it is the hedge funds selling; 9/09/2008 12:57 PM
Anonymous said...: Someone does know who's selling, but knowledge destroys inefficiency in the markets, therefore removing any advantage a seller might believe he has. So, why talk about it?

steve; 9/09/2008 1:01 PM
Anonymous said...: Boys:

1). LEH is the ticker for "Lehman Brothers Holdings Inc" a publicly traded holding company for many different lines of business.

LEH has an ownership interest in various public and private investment conduits including a large MLP fund. Collectively this is known as Lehman's funds management business.

The MLPs held in that large Lehman-run MLP fund *ARE NOT OWNED BY LEH*.

The LIMITED PARTNERS of that fund (and not LEH) own the _vast_ majority of the MLPs in that fund. Very few of the MLP units in that fund are owned by the GENERAL PARTNER aka LEH.

If (make that WHEN) Lehman Brothers Holdings Inc. aka LEH finally finishes the last of its horrible slow motion death convulsions in the coming week(s), that failure will have almost no impact on the MLPs that are owned by investors in the Lehman-managed large MLP fund.

Lehman's creditors cannot attach assets that are not owned by Lehman. Assets held in the LEH managed MLP fund are owned by the investors, not by Lehman.

2). The LEH MLP fund and the rest of LEH's fund management business is collectively the only substantial asset left at LEH. LEH's asset management business is worth at least $8 Billion and will be sold very soon. Or it might be transfered in a buy-under/rescue arranged by the NY Fed, Treasury, etc. Either way, LEH's funds management business will continue to prosper under new ownership very very soon.

3). The investors in LEH's large MLP fund are locked up into well into 2009. They cannot redeem their LP interests, so you also cannot validly argue that LEH is being forced to sell because of investor redemptions.

4). You might be able to argue that LEH's MLP fund is a net seller because the fund was levered and is under pressure in a declining market to raise cash to meet margin calls. Such argument is speculative at best and is highly improbable. The LEH MLP fund managers have never employed enough leverage for anyone to take this suggestion seriously.

4). When you look at a list of MLP holders and see LEHMAN BROTHERS HOLDINGS INC, you should be aware that LEH is typically holding those assets as a swap counterparty. LEH owns those MLPs legally, but the economic benefit of such ownership inures to their counterparty.

It is incorrect to assume that changes in reported LEH holdings of MLPs on swap has anything at all to do with LEH buying or selling for their own account. All such changes would reflect underlying changes directed by their swap counterparties.

If a swap counterparty thought LEH was about to fail and moved the exposure, you would see LEH's ownership decline in one period and another swap counterparty's ownership rise in exactly the same amount. Such change would have no significant effect on MLP pricing levels.

5). There is a record amount of cash in held in retail brokerage accounts.

6). There are minimal numbers of large blocks of MLPs trading now.

One should conclude that almost all the selling in MLPs is from retail holders who are afraid of equity markets.

LEH is not a net seller, nor are any of the large MLP institutions.

MLP markets are illiquid. If you are long this market, you do yourself and other MLP holders a grave harm by arguing that failing institutions like LEH are dumping MLPs. That is absolutely not the case.

Sincerely,

Miss Tippi Hedren; 9/09/2008 1:11 PM
joewxman said...: Miss Tippi Hedren!!!!

Soon we'll see the birds picking out the eyeballs of all MLP holders! Long live Hitchcock!; 9/09/2008 1:15 PM
Anonymous said...: Tippi, Thanks for the post, not to mention all the wonderful movies !; 9/09/2008 1:28 PM
Anonymous said...: Awesome movie!; 9/09/2008 1:29 PM
Anonymous said...: Tippi,

Retail money is dumb money.

Alfred; 9/09/2008 1:31 PM
Anonymous said...: I DON'T RECALL MISS T POSTING HERE BEFORE.

I GUESS, BASSED ON HER POSTING WE CAN CONCLUDE THAT, WITH THE DOW UP 300 POINTS YESTERDAY, ONLY MLP RETAIL FOLKS WERE SELLING THERE SHARES, BECAUSE THE WHOLE WORLD WAS BUY EVERYTHING OTHER THAN MPL'S YESTERDAY; 9/09/2008 1:36 PM
Anonymous said...: Congratulations to TEPPCO for trading at its 2002 price today. Great work on destroying 6 years of work and turning back the clock to the good ol' days of Enron.

Brilliant stroke of genius on doing a secondary at 5 year lows. You guys suck ass. Please resign.; 9/09/2008 1:39 PM
Anonymous said...: The managing boards of these MLPs and GPs are a joke. Why the f*ck aren't they doing some mergers? This is a damn disgrace. If the MLPs aren't cheap enough to be bought by competitors why should you buy them? Ask yourself that?

The MLP market is a stinking blackhole.; 9/09/2008 1:42 PM
Anonymous said...: TO MR BLACK HOLE.

I FEEL YOUR PAIN

FYI: ATN IS BUYONG BACK SHARES; 9/09/2008 1:48 PM
joewxman said...: Just for laughs...i have to ask...are you the real Tippi Hedren?

You never know!; 9/09/2008 1:49 PM
Anonymous said...: YES I AM

I HAD TO COME OUT OF THE CLOSET

AT SOME POINT; 9/09/2008 2:03 PM