MASTER LIMITED PARTNERSHIPS

Wednesday, November 19, 2008

Just want to point out US Shipping (USSPZ) which was once a $15 dollar MLP then went wrong and now sits...are you ready for this....5 cents a share and trades on the pink sheets. Market cap of around 5 million! And you thought only internet stocks in the year 2000 went to zero.

Speaking of going to zero Citigroup doesn't have far to go with a 6.47 close. Dow down 427. MLP index down 12 points. That 150 low looms large and we could be there in the morning if tomorrow we see some sort of cataclismic dow sell off. Sunoco Logistics (SXL) was down 4.50 as the biggest mlp loser.

Buckeye Holdings (BGH) was among the smallest losers down 16 cents as they have a 17.50 offer on the table...lucky them.

And speaking of lucky...you might want to say..Jehovah!

3 comments:

Unknown said...: There is no good news.

It looks like the big 3 Automakers won't get help, and GM and Chrysler may fail before January.

Citibank might not make it through the weekend.

BAC looks weak.

HIG and several other insurers look like they are at risk of failing as well.

REITs are being priced for BK.

MLPs aren't much better.

Paulson's TARP was 1/2 sized, and we may have to wait for Pres. Obama to spend the rest.

Paulson has no creditibility, and neither does Congress.

Well I have to ask:

Is all the Bad News out?

HS; 11/19/2008 4:55 PM
Unknown said...: http://www.minyanville.com/articles/C-Paulson-Credit-WB-volatility-wfc/index/a/19434/p/1

This article from OCT 10, 2008 explains Bush/Paulson/Bernankes "Nuclear" option to eliminate speculative CDSes.

With GM, Chrysler, and perhaps Citi at grave risk for bankruptcy
( which would generate more CDS losses for AIG ( That means US as we're backing up AIG ) and others ),
perhaps the only viable solution is to NUKE all naked credit default swaps.

-------------------------
"Along those lines, I’ll share a conversation I had last night with one of the more astute professors in the Minyanville community. He offered:

“Under our Constitution and/or the International Emergency Economic Powers Act, the President has the right to suspend constitutional rights – including the Contract Clause of the Constitution – and to block transactions and assets.

In my opinion it is becoming rather apparent that the actual and pending debt defaults are growing large enough that the CDS liabilities triggered by these defaults will overrun the world financial system. We can argue whether from a philosophical standpoint the current financial markets should be allowed to disappear, but considering the social upheaval of such an event, philosophy will likely fall on deaf ears.

I suspect that Bush / Paulson / Bernanke may have no choice but to use their power to invalidate all Credit Default Swap contracts not held by holders of the underlying debt securities. These specs could then be given a right to assert claims against the under a statutory structure. This would re-establish parity between assets and liabilities and deleverage the system on the back of a few people who probably would be burnt at the stake if they were identified.”; 11/19/2008 5:21 PM
Unknown said...: The financials were hit today in part because of exposure to real estate loans. About 334 million in RE loans may shortly go into default. Even in Default there may be substanial recovery of principal, yet this was a contributary cause to tens of billions of market cap being wiped out today.
HS

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A $209 million commercial mortgage for Westin hotels in Tucson, Ariz., and Hilton Head, S.C., and a $125.2 million loan for the Promenade Shops at Dos Lagos in southern California were transferred this month to a special servicer "due to imminent default," analysts at Credit Suisse said on Tuesday.
That sparked concern that a slump in the commercial mortgage market is beginning. Spreads on AAA-rated commercial mortgage-backed securities tracked by Markit's CMBX index soared to more than 500 basis points on Tuesday after the report. That's a record.
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Bank exposure to commercial real estate
Bank shares also fell, led by Citi, which lost 23% to close at $6.40.
Banks are also exposed to commercial mortgage-backed securities and commercial real estate loans.
In its latest quarterly filing with the Securities and Exchange Commission, Citi disclosed more than $30 billion of commercial real estate exposures.
Bank of America (BAC:bank of america corporation com
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BAC 13.06, -2.13, -14.0%) had almost $64 billion in commercial real estate loans at the end of September, according to that bank's latest quarterly SEC filing.
Merrill Lynch (MER:Merrill Lynch & Co., Inc
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Last: 9.60-1.80-15.79%

4:00pm 11/19/2008

MER 9.60, -1.80, -15.8%) , which Bank of America agreed to acquire, had roughly $12.8 billion of third quarter net exposures related to commercial real estate. That excludes the firm's First Republic Bank unit.
J.P. Morgan Chase (JPM:JPMorgan Chase & Co
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Last: 28.47-3.67-11.42%

4:01pm 11/19/2008

JPM 28.47, -3.67, -11.4%) had exposure to $8.3 billion of commercial mortgage-backed assets at the end of the third quarter, according to that bank's SEC filings.
Goldman Sachs (GS:Goldman Sachs Group, Inc
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Last: 55.18-6.85-11.04%

4:01pm 11/19/2008

GS 55.18, -6.85, -11.0%) had almost $15 billion of long positions in commercial real estate at the end of August. That included loans of $11.63 billion and commercial mortgage-backed securities of $2.99 billion, the firm said in its quarterly SEC filing.
Morgan Stanley (MS:morgan stanley com new
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Last: 10.25-1.78-14.80%

4:03pm 11/19/2008

MS 10.25, -1.78, -14.8%) had net exposure to $7.7 billion of commercial mortgage-backed securities at the end of August, according to a recent presentation by the firm.
Bank of America, Merrill, J.P. Morgan, Goldman and Morgan Stanley all lost at least 11% on Wednesday.

http://www.marketwatch.com/News/Story/insurers-slump-concern-about-commercial/story.aspx?guid=%7B6AA4C4EA%2D0285%2D471F%2DB0FD%2DA44CF01C337A%7D; 11/19/2008 7:02 PM