REELING FROM THE ETHANOL VOTE

While markets stablized and closed a little higher yesterday MLPS began selling off yesterday afternoon and finished at the lows of the day. The sell off i believe can be directly linked to the Senate vote to kill the ethanol subsidy. Now you may ask why is this important? Well the perception in my view is that this was considered untouchable. And if the Senate is willing to stand up against the farm lobby and get rid of this, whats to stop them from doing the same to the MLP tax structure? Now granted the 2 are not the same but in nervous markets its sell first and ask questions later. There is more here from the Hill and note in this piece that it focuses on niche subsidies. If they can take away credits on the tax side, they can do much more. Although going after the partnership structure means going after lawyers which makes the prospect of tax changes here rather dim. Still the symbolism is enough to get sellers to give up their shares.

Meanwhile stock futures this morning are sharply higher as word comes from Euroland that they are going to (once again) kick the Greek debt can down the road. MLPS will probably open higher but i wonder just how much of a rally we will be able to muster. One big winner yesterday was Energy Transfer Equity (ETE) which was up over 4 dollars on its purchase of Southern Union making the largest nat gas pipeline system in the US. The purchase highlights the sea change in nat gas where places that used to import nat gas are now exporting it. And of course we have an energy policy that is focusing on developing wind while we have more nat gas then we know what to do with. This is of course another wonderful accomplishment of the Obama Administration and their ridiculous energy policy.

There are no other corporate news items this morning and no upgrades or downgrades. Crude oil is down another dolalr after a big hit of 4 bucks yesterday. Nat gas was down yesteday and its a little lower today. Interest rates are higher as the flight to quality trade from the Greek mess gets unwound. Im looking for mlps to open higher with the tape and then we will watch to see if sellers overwhelm.