MASTER LIMITED PARTNERSHIPS

Wednesday, November 19, 2008

Maxine Waters is enough to make the auto companies just shut down and be done with it. She wants her pound of flesh.

Speaking of shutting down MLPS are in going out of business mode. Prices are so low and they just continue to fall. There isn't a bidder out there. Nustar (NS) down nearly 2. Oneok (OKS) down nearly 3. Lots of 1 to 2 point losses across the board. Might as well just take'em to zero!

Dow down 200 points. The mlp index is down nearly 8 and approaching 175.

Keep your eyes on nat gas over the next 2 weeks as the weather patterns if correct will favor much below normal temperatures in the northeast and great lakes. Nat gas is up 20 cents today along with heating oil up a penny. Crude is down and gasoline futures are at 1.10.

Hoping for another high power reversal this afternoon as we are back to that 8100 area and the S&P nears 830.

8 comments:

SHK said...: As we approach another test of the bottom range of the major averages, it is worth noting that my MLP portfolio has already made a low below the October 10th low. And, that is with CEP being the only issue trading at a new 52-week low. I have 11 MLPs and two canroys in this portfolio.

steve; 11/19/2008 11:54 AM
Unknown said...: It's not just MLPs.

Reits and Banks ( and GE ) are trading like they are going out of business.

PLD 3.77 -.87

FR 5.64 -.81

DDR 4.75 -.51

AIV 9.60 -.56

C 7.43 -.92

BAC 13.79 -1.40

MS 10.59 -1.43

GE 15.06 -1.00

We're in deep trouble.

HS; 11/19/2008 12:29 PM
SHK said...: So, is this the time to sell everything and go to cash? I have pondered that question and in fact I have liquidated some non-MLP holdings to raise some cash. If I thought my portfolio would drop another 20%, I would sell everything today.

steve; 11/19/2008 12:42 PM
Unknown said...: Steve,

I wish I could give advice, but recently I haven't done well by my judgement.

Certainly we are in for tough times, Certainly markets are pricing tough times in, if there's some hint that the outlook isn't as dire as we feared... we may have a strong rally from these levels.

Take PLD ($4.00 a share ). On Sept 30, 2008 it closed at $41.27 a share. Why hasn't anyone made a bid for it at even $6.00 a share?

DPM is trading at $7.97 a share. Dpm on Sept 30, 2008closed at $16.92 a share.

DPM's GP is half owned ( I believe ) by Chevron and Spectra, why hasn't either of them seen enough value to by Spectra at $9.00 a share?

HS; 11/19/2008 1:08 PM
Anonymous said...: Maxine Waters is the quintessential icon for the captainless, rudderless ship that our Congress really is. Our elected officials are so far over their heads in this crises that I honestly wonder what will be left of our free market economy when the fat lady finally sings Cum-ba-ya. This ridiculous auto industry fish fry on Capital Hill is just a lot of show-boating. With upwards of 3 million jobs on the line (translated: 3 million VOTES), those idiots would bailout al Qaeda if they asked real nice. Hell, it's only money and Bennie and the Inkjets can always print more of that!

What I'd be interested in knowing is just how the boys from Flint propose they'll be profitable during an extremely tight credit market with rapidly rising unemployment and hyperinflation right around the next bend, when they couldn't do it when banks were throwing cash at anyone who could fog a mirror. But, don't worry, after all the photo-op superficial hand-wringing from our representatives, the checkbook will be wide open.

Sorry, this crap puts me in a very foul mood. And to keep the matter on subject, maybe as MLP unitholders we should petition LP management to restructure as banks so they, too, can get theirs while the gettin's good.

Lee; 11/19/2008 2:13 PM
HighEnergy said...: Comments from Tortoise's 3Q report:

"Investors should examine whether the elevated yields of the MLP Index represents the market’s pricing of investment risk. If fundamental risk has changed, or market pricing of risk has changed, then these yields may be appropriate for the business conducted by MLPs. However, we are of the view that market prices of MLPs reflect a temporary dislocation from transitory MLP ownership by highly leveraged funds to more permanent investors who seek the long term benefits of dividend stability with modest growth."

http://tygd.client.shareholder.com/common/download/download.cfm?companyid=TYGD&fileid=244265&filekey=885D0223-301C-4EF9-9219-07FE64E96D77&filename=TYG_3rd_Qtr_2008.pdf

It's a little ironic considering they were leveraged too (though not nearly as much as the hedgies). Actually, I wonder how TYG is doing on their leverage ratio. Haven't seen an update since 10/30 and MLPs have cratered since then.; 11/19/2008 2:18 PM
Unknown said...: The Fed hasn't been able to keep us from deflation, let alone push us into hyperinflation.

There's no velocity of money, Banks are afraid to lend, borrowers are afraid to borrow.

Deflationary expectations are taking hold ( why buy now, when it will be cheaper tommorrow ).

My parents generation were "Depression Children",
their attitudes re: spending and savings may very well be adopted by those who live through these hard times.

The Fed's Lacker claims that the banks have money, but there is a lack of creditworthy borrowers.

So corporate America ( which is cut off from credit ) isn't creditworthy?

HS; 11/19/2008 3:10 PM
Anonymous said...: HS,

Yes, but our illustrious leaders are propping up the weak by transferring assets to them from the strong. And in the case of the banks, even the strong are beneficiares of enormous capital infusions to keep us all from knowing which is strong and which is on a deathwatch. The only problem is, our leaders forgot to caveat the handouts with requirements that the banks use the cash to do what TARP was intended for it to do, namely LEND. Instead, we now find instances of what? Strong banks using the money instead to buy FOREIGN assets!

Here's my prediction in four-part harmony: 1) The auto boys will get their cash, 2) they'll be back looking for more before the end of Q1:09, 3) they'll get more, and 4) they'll be bankrupt with 12-months anyway. I'm so confident about that scenario, I'll put money on it (or I would if I had any left). To take a little poetic liberty with Lloyd Bentsen's famous quote, "I knew Lee Ioccoca, and these guys are no Lee Ioccocas."

Lee; 11/19/2008 4:34 PM