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Wednesday, November 09, 2011


Looking at Italy this morning it appears that the buzzards are circling as italian bond rates surged a whopping 75 basis points to well over the 7% threshold which is the level where everything starts circling the drain. Where the problem lies is in margin calls and they have begun and if you have to raise money to cover one position, you might have to do it by selling something else. European markets are down 2 to 3% across the board and stock futures here are down 2 1/2% pre open. The euro is down 2 cents against the dollar which is a big move. So at least for the open we will be under quite a bit of pressure.

MLPS were down yesterday while the market rallied. Much of that was the equity offering of Energy Transfer Partners (ETP) which has some weighting in the index. Plains All American (PAA) is next in line to sell shares and perhaps this recent rush to sell shares is telling us something about the short term. Perhaps there is a feeling that the MLP may have run its course for awhile. And since we are not far from all time highs on the index, it really isn't a bad place to sell. Plains is down 2.18 this morning in the pre market.

Transmontaigne (TLP) is a case that is very interesting as it was down over 2 dollars yesterday. The reason is that Morgan Stanley owns a chunk of the GP and the problems that M.S. had whether real or imagined, has impacted Tranmontaigne's ability to grow. Morgan Stanley is down 4% in the pre market. Lets see if there is follow through selling today.

No other news and no upgrades or downgrades so far. Its all about the markets today and its all about Italy. Has the final circling of the drain finally begun?

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