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Thursday, July 14, 2011


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

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