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Wednesday, July 27, 2011

MLPS down 7 points on the index and at the lows of the day. Treasury auctions weren't that good today and bonds are selling off.
Even though the MLP index is down 5 points there are 2 notable winners today. Sunoco Logistics (SXL) is up 2 dollars as it blew away earnings and announced an acquisition. And Alliance Resource (ARLP) after a slow start is up 1 and change on its blowout quarter and payout hike.Crosstex (XTEX) Eagle Rock (EROC) Martin Midstream (MMLP) and Calumet (CLMT) are all up small fractions. Otherwise lots of losses of major fractions to 1 point across the rest of the MLP universe. Suburban Propane (SPH) TC Pipelines (TCLP) and Transmontaigne (TLP) are all down 1 or more as the days biggest losers.

On the debt ceiling charade, the speaker is getting tough with those revolting against the house bill. You have Paul Krugman crying over the lack of a centrist and calls Obama a "conservative" president. All fun and games in the debt ceiling charade!

Whether you agree with his politics or not you have to agree that Rick Santelli of CNBC really understands the bond markets. And he said something yesterday that made a lot of sense to me. He said that if US debt is downgraded to AA from AAA, bond funds who, for example, need to keep a portfolio with an average grade of say AA, will probably hold their treasuries and sell lower grade bonds to keep their funds in balance. In other words they will change the rules. And in the end money will continue to go to US bonds as the country of choice. So this fear of spiking interest rates in US treasuries is probably overblown. However if selling emerges in lower grade corporate bonds and high grade junk, i will bet there will be selling in MLPS. And should that happen in size, we may be handed a pretty important buying opportunity. Im thinking of laying in some buy orders and prices say 10 to 15% below whatever the Friday close is. And btw yesterday's 3 point decline in the index could be due to this idea.

This morning we have earnings from TC Pipelines (TCLP) which the company says are pretty good. Alliance Resource (ARLP) keeps hitting the cover off the ball and hikes the payout. And Amerigas(APU) has a good quarter and nudges guidance higher for the rest of the year. As usual with mlps i would expect a buy the rumor sell the news reaction. Not much in the premarket. TCLP has stock for sale below yesterday's close.

No upgrades or downgrades on the tape this morning. Stock futures are pointing for a lower open. Rates are higher. Oil is lower and nat gas is higher.

Tuesday, July 26, 2011

The New York Times & The Wall Street Journal live in parallel universes.

Maybe if she were president.!

Back from Saratoga where the day day at the track could not have been worse. I had one winner in a chalk fest that included rain, races taken of the turf, numerous scratches, and a hole in my wallet. I somehow hoped that i would wake up with money in my wallet but no such miracle. Now its back to the sideshow in Washington where the circus continues and the clowns continue to display their acts over each other. Conservatives are revolting against the House Speaker. The president says we have to something to prevent a crisis. And on and on it goes. Markets are still behaving as though disaster will be averted and it probably will be. In which case this is nothing but a whole lot of noise. And in the event that they can't sign a deal, maybe the markets will start exerting arm twisting toward week's end. But for now we trade on.

MLPS lost a couple of points yesterday and this morning we have Regency Partners boosting the distribution and Chesapeake Energy (CHKM) is also boosting their payout. Energy Transfer Partners (ETP) announces its payout. Energy Transfer has struggled as their payouts have gone nowhere and neither has its stock price.

No upgrades or downgrades. Stocks and bonds are flat. Nat gas is a little lower na d crude is a little higher this morning.

Sunday, July 24, 2011

First ticks are down 130 on the dow and 15 S&P points. The dollar isn't doing much so we'll wait for bonds to start to trade later this evening.

The so called 4pm deadline has come and gone and no deal from the children in DC. So now we see what markets will do. Futures trading begins at 6pm for stocks. The dollar is always trading so for the latest on futures you can check CNBC. Btw if you check before 6pm you will see Friday's close and not the Sunday night trades.

I have been trying to think of the impact on MLPS if we go into the abyss with this debt ceiling charade. First off you will probably see the short end get piled into and the long end sell off. What is unknown is how long rates will go. Do they spike higher significantly? Do they spike initially and then rally back as traders figure we may not be AAA rated anymore but we're still better than everyone else. I think we should watch the German 10 year bund to see if that becomes the new flight to quality benificiary. And if the selling really gets out of control this could be a great buying opportunity for MLPS. Or this could be much ado about nothiing from a markets perspective after initial reactions. I sold out of my nat gas Wednesday and made a nice trade and am sitting with a little pile of money. And btw there are still a week to go before we get to the supposed drop dead date of August 2nd.

Saturday, July 23, 2011

I know i said i would be gone until Tuesday but i think this is interesting commentary. The debt talks have collapsed yet again. Markets may start taking notice though i still think they are convinced that a deal will get done.

Friday, July 22, 2011


Its 100 degrees here in NYC at 11 am! Saratoga opening day. Im heading up there with the boys so we will see you on Tuesday when it should be cooler and richer!

Thursday, July 21, 2011

Inergy LP (NRGY) is down 1 on a Citigroup downgrade to sell and a 31 target. Seems like propane use is down this summer as detailed in the E.I.A report. Global Partners (GLP) is down 1.76 as the days biggest loser on guidance that wasn't encouraging. The mlp index is up just under 1 point. EV Partners (EVEP) is the big winner up 1 and change and btw this one now yields 5% which is a far cry from the 20+% it yielded during the meltdown.
Global Partners announces a distribution but also tells us that things aren't going so well. In fact they are planning to report a loss for the quarter. The stock is the biggest loser in MLP land this morning down over 1.

MLPS on the whole are higher with the index up 1 point in the early going and most mlps showing fractional gains.

This morning the market is reacting on breaking news that the ECB will backstop Greece and who knows what else. That news has futures moving higher this morning. Of course our debt ceiling charade continues this morning as the the clock ticks and the prospect that the "gang of 6" proposal is slowly withering away. Full coverage and opinion on Memeorandum.

The overall tape is reacting to news events on the political side and the earnings that have been coming out which have been very good for the most part. Kinder Morgan boosts to $1.15 as it has another good quarter. Transcript of the conference call indicates the company seems to firing on all engines. Suburban Propane (SPH) is giving you the 85 1/4 cent payout. Its that 1/4 cent that can really add up over time! More payout and earnings news will be hitting the tape over the next few days.

No upgrades or downgrades on the tape this morning so far. Stocks and interest rates are higher as the 10 year inches back toward 3%. Nat gas is up this morning ahead of inventory numbers while crude is flat at 98 bucks and change. Heatwave spreads east this week as we're looking at mid 90s to near 100 here for the next few days. Heading to the pool to cool off and swim laps.

Tuesday, July 19, 2011


Among the most damaged MLPS during 2008 was Crosstex Energy (XTEX,XTXI) which pretty much lost it all and was circling the drain at a buck a share but that seems like a million years ago. The company has done all the right things and they are hiking the distribution to 31 cents on the LP and 10 cents on the GP. Both stocks have rallied into this number so im not sure if there is more upside on the news. However when the company announces earnings in a few weeks, should they continue to indicate further recovery and more payout hikes, the stock could have room to run.
Kinder Morgan (KMP) will start the earnings parade tomorrow after the close. Meanwhile we have stock futures higher this morning as Italian and Spanish bonds rally. The debt charade here continues but it continues to have absolutely no impact on bond yields. The latest news and commentary is on Memeorandum as we move toward August 2nd.

No other news and no upgrades or downgrades. However there has been attention to EV Partners (EVEP) off the Petrohawk (HK) takeover. The stock has broken out above 60 and continues to make new 52 week highs. The company has risen 6 fold since the 2008 bottom.

They should all have behaved this way! Crude is up this morning but nat gas is a touch lower ahead of the open. Rates are flat.
sorry guys but i was having problems with blogger today and i could not post my monday morning post until now!

Monday, July 18, 2011

Jim posted in comments about me voting for the messiah! A momentary judgement lapse. Won't happen again.

To default or not to default remains the question of the moment and over the weekend nothing new was accomplished. This morning we have Tim Geithner telling us that the congressional leadership recognizes that the debt ceiling must be raised. The Hill has a coverage on this and of course there is continuous coverage on Memeorandum where you can get news and commentary.

MLPS had a down week last week although they did finish up on Friday. The index is above support but it looks like we're in the middle of a wide trading rage from 350 to 390. We will begin the earnings and distribution announcements parade this week with Kinder Morgan (KMP) usually among the first. Seldom do we see surprises here and most of the time the stocks tend to sell off a touch when they announce the payout increase. No other corporate news and no upgrades or downgrades so far. Crude is down a buck. Nat gas is off a tick or two. Stock futures are lower and yields are hovering just above all time lows. Again let me point out that the bond market either doesn't care about the debt ceiling or has pretty much decided that congress will raise it by August 2nd and that the probability of default is zero. If there is going to be a massive run on bonds i would think we should start to see it happen soon. But again the bond market is telling us that its not worried.
Nat gas had a very good week last week and im getting the sense that 5 bucks might be doable soon. Nat gas continues to build this long (and seemingly endless) base around 4 bucks which held (again) last week and nat gas closed at the week's highs. The heatwave in the midwest and south will spread to parts of the east coast this week so that should put a floor under prices.

Thursday, July 14, 2011

Thought this was an interesting perspective on the "Don't call my bluff" line uttered by the president yesterday.

Markets are moving higher and mlps are up 1 point on the index so far in early trading. Genesis Energy (GEL) is up nearly 1 point as the day's biggest winner. Most mlps are fractionally higher.

More coverage on the Washington stupidiy that passes for leadership and the debt ceiling charade! President know it all either stormed out or walked out or whatever while Representative "Wally" Cantor apparently said there will be no deal from Republicans. Meanwhile Moody's has put the US on review for possible downgrades (GASP!) which is so laughable considering their performance in 2008 on the housing crisis. All of this has the bond market doing a collective yawn with the 10 year up 1.9 basis points to 2.91% which leads me to ask the following. If the bond market seriously thought that the government would default on its debt, don't you think yields would have been moving up already in response? The bond market is telling us that the probability of a default is zero. That's probably why the stock market has held up as well as it has. Lots of coverage and opinion via Memeorandum for those of you interested.

In mlp land the battle for Southern Union (SUG) is getting fierce. Williams Partners (WPZ) has now raised the ante by 500 million bucks to $44 a share all cash which beats Energy Transfer Equity (ETE) bid of $41. Othewise it is quiet on the mlp front today after yesterday's slightly lower close. Stock futures are higher this morning after inflation numbers which usually shows no inflation after you strip all the inflation out. But this time we have core down 0.4 on PPI and the stripped out number at 0.3 which was a little above expectations. None of this is leaving the bond market impressed btw. MLPS continue to benefit from the record low yields and favorable spreads and nat gas which seems to be holding its bottom around 4 dollars pretty well these days. Nat gas inventory numbers will be out at 10:30am.

Energy news in a non mlp this morning as Conoco Philips (COP) is going the route of splitting in two. The stock is up 7 dollars on the news. They seem to be following the steps of Marathon Oil which did the same thing.Link

Wednesday, July 13, 2011

Somebody just posted a comment that I should refrain from partisanship. My blog buddy. I write what I please. And for the record I voted for the Messiah!

Do you get the feeling that we're in the middle of a game of charades. And im not talking about the guessing game here. We have the charade of the Euro crisis as everyone tries to pretend that Greece can somehow be saved with bailouts. Then of course there is our debt ceiling charade which just goes on and on in Washington. The latest on all of that can be found here in one place. This includes lastet news and opinons. Read this Wall Street Journal editorial because it really gets to the heart of the matter of what this is all about.

The entitlement state can't be reformed by one house of Congress in one year against a determined President and Senate held by the other party. It requires more than one election. The Obama Democrats have staged a spending blowout to 24% of GDP and rising, and now they want to find a way to finance it to make it permanent. Those are the real stakes of 2012.

Charlie Gasparino, formerly CNBC and now Fox Business, has this perspective on the DC circus.
So the clock continues to tick. Markets to me still seem to want to go up on any positiive developments. Euro stocks are firm this morning. Crude is down and nat gas is up. Stock futures are up ahead of the open but off the morning highs.

MLPS closed a little lower yesterday and continue to perform fairly well in the midst of all this mess. Oneok Partners (OKS) splits 2 for 1 today. If you bought it in 2004 at 40 bucks you would have twice as many shares at the same price plus all those fabulous distributions along the way. No other corporate developements and no upgrades or downgrades.

Nat gas this morning us up 1 1/2% as most of the south burns in a summer heatwave with no break in sight. No hurricane activity going on yet but July typically is a rather inactive month for hurricanes until we get toward the end of the month.

Tuesday, July 12, 2011


Crosstex Energy (XTEX,XTXI) has been putting itself back together slowly since the 2008 unravel. The stock has held up pretty well latetly as the LP hovers in the upper teens. Crosstex the GP has made its way to a teenage price and there is more news for them this morning as they are getting together with Apache (APA) to develop the Permian Basin.

How much is this baked into the cake remains to be seen but the company continues to do all the right things and it is paying a distribution again which is the bottom line. The stock may be pricing in a distribution hike coming in a week so we will know soon enough. No other headlines so far this morning and no upgrades or downgrades.

Volatility seems to the word of the morning as markets are watching Italian bond auctions among other things and we went from being down over 100 in the futures this morning to break even. The euro is around 140 after trading below it so it appears stocks catch a bid when the euro turns. Crude is a little lower and nat gas is higher heading into the open. And for all the talk of the debt ceiling and the consequences of not raising it, bond markets are acting is if they simply don't care about it and are looking at Europe instead. So rates continue to trade near all time lows which keeps MLPS with a favorable yield spread.

Monday, July 11, 2011

We have the dow down 160 and mlps down 3 on the index which really is not too bad. Falling yields to near record lows again probably is supporting MLPS to some degree. Also a rally in nat gas doesn't hurt. Most mlps are down fractions with Enterprise (EPD) and Kinder Morgan (KMP) down less than 50 cents apiece. So far in mlps the selling is pretty routine.

Watch the markets today in the last hour to see if buyers step up to the plate. Otherwise the "double top" experts may be heard from.
Nat gas is up 3% pre open. Stock futures are at the lows of the morning.

Over the weekend it became clear that the bozos in Washington are going to take this to the last hour as far as a budget deal. There is a roundup of news and commentary on this on Memeorandum. The drop dead date apparently is now July 22 given the time needed to write the bill. This and looking European problems now swirling around Italy has stock futures down 100 points pre open.

LinkWhen we look at the Dow Industrials chart it seems we've come up to the new recovery high and got reversed on Friday with the awful employment numbers. Still the markets held up quite well Friday closing off just 70 points. And the mlp index which was on a 12 day winning streak showed a small fractional loss. So even with this morning's selling we are still in a pretty good place in here. And all the nervousness about the news this morning is driving everyone into...ta da..bonds! US treasuries are rallying this morning in a flight to quality. The dollar is also rallying sharply higher this morning agains most major currencies.

Not much going on news wise this morning on the corporate side. We have insider buying going on in Energy Transfer Partners (ETP) which has been a chronic underperformer this year for a number of reasons. Energy Transfer Equity (ETE) remains in the take over battle with Southern Union (SUG) and there is nothing new there other than news that the company has been talking to potential grooms since 2008. Williams Partners (WPZ) may be getting ready to counter offer again.

Crude is down nearly 2 bucks this morning but nat gas is up 1.5% pre open after another trip down to the bottom of the base.

Back to the budget deal, the Wall Street Journal editorial page outlines most of the proposed tax increases the White House wants in the budget deal. Of note is that there is no mention here of MLPS and changing the tax structure which is a good thing for the group. Meanwhile the talks will continue as they go back to square one with the Biden 2 trillion deal.

Thursday, July 07, 2011

MLPS moving higher int he afternoon up nearly 3 points on the index and near the highs of the day with the dow up a few points over 100. Nat gas is off the lows but still sharply lower and crude has pulled back from the highs of the day which were near 100 bucks. Not much individual action to speak of as most of the moves remain fractional but higher among the individual mlp names.

We're up 1.77 on the MLP index this morning and near 376 which puts us 4% under all time highs at 390. It looks like that we are headed for at least a test of 390 eventually as long as the overall market trend remains higher. And that seems to be the path of least resistence lately.

Most mlps are higher by fractions. Energy Products Partners (EPD) is selling some of its stake in Energy Transfer Equity (ETE). Both stocks are fractionally higher on the news. No other news of consequence this morning. Nat gas inventory numbers were bearish and we're down nearly 3% on the news and it looks like we're heading for a re-test of the 4 dollar level on nat gas. Nothing is more frustrating than the nat gas market.

No other corporate drivers this morning. Wunderlich is downgrading Energy Transfer Partners (ETP) but the stock is a little higher in spite of this. Dow up nearly 100 points. S&P is up 12 and crude oil is closing in on 100 bucks.

Tuesday, July 05, 2011


Now that we are back from a long weekend we can begin focusing on what the second half of 2011 will bring us. Last week we saw a reversas of falling interest rates which took the 10 year from 3.70 to 2.85% and the 30 year from 4.80% to 4.10%. And MLPS went from market leader to market follower.

Judging from the mlp chart it appears that 350 has held up beautifully and we have now begun and upleg that has cleared the moving averages..which btw are beginning to cross again to a positive slope. Markets overall seem to want to rally even with all the nonsense with the debt ceiling looming ahead. I guess the market's view is they will raise the debt limit in time to avert any sort of default of US debt. I would have to agree that these political fools will eventually give in on the debt limit and either raise it or kick the can down the road.

The 30 year has held the December low of 4.10-4.15 and at least we are getting a tradable contratrend rally here but so far there is no evidence that its anything more than that. 4.80% is the top and we need to take that out before i would get worried that we are headed into a world of higher rates on the long side. Certainly any debt ceiling worries could cause us to get there in a hurry. And rising rates at lease for now will not produce a headwind for mlps. The other potential headwind is the tax threat which seems to have been laid aside for the time being. But remember that it was the news item that turned the group lower when it hit 390.

News this morning on the Energy Transfer Equity (ETE) Southern Union (SUG) Williams Partners (WPZ) saga as Energy Transfer is raising its bid for Southerin Union that is 4% higher than the Williams offer. ETE is also doing the necessary divesting of assets as it's dropping them into Regency Partners (RGNC). Southern Union is up 1 on the news. Western Gas (WES) is getting assets from Anandarko (APC) and the company is announcing a 4% distribution increase. No premarket moves so far.

Stock futures are basically flat this morning. Rates are a little lower while oil and nat gas start the day higher. The tape has a firm feel to it so my guess its that we should trend higher as the morning moves on.