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Monday, July 18, 2011

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.

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