Wednesday, October 9, 2013

Wednesday, Day 9 Of The Government Shutdown; Wars Never Go As Planned; Megyn Beats Piers And Rachel -- Combined

As we enter day 9 of the government shutdown, things are starting to become a big clearer on the grand strategy that is beginning to play out. More on that later, perhaps, over the weekend.

Regular readers of the blog will recognize this name: Tallgrass Energy Partners. The partnership will more than double its distribution, from 14 cents to almost 30 cents. Futures are slightly higher on news that "Yellen is the one."

Coolest story of the day: Peter Higgs shares Nobel prize in physics.
Peter Higgs and Fran├žois Englert shared the Nobel Prize in physics for independently proposing a particle, now known as the Higgs boson, that confers mass to all other particles and whose recent discovery stands as one of the seminal moments of modern science.
Nearly a half-century after predicting the existence of the particle, the pair's work was confirmed last year, in a nail-biting experiment undertaken at the atom-smashing machine built by the European particle physics laboratory at CERN in Switzerland. That July day, in a packed hall in Geneva, Drs. Higgs and Englert met for the first time.
After further analysis, physicists at the Geneva laboratory said earlier this year they are confident that the particle they had discovered was in fact the one Mr. Higgs and his colleagues had predicted.
Meanwhile, in the Bakken:

Active rigs: 184 (nice)

RBN Energy:  Wow, talk about a timely post from RBN Energy today. The lead story in Section B of The WSJ today: US refiners export more fuel than ever.
U.S. refiners are selling more fuel abroad than ever before, effectively exporting the American energy boom to the four corners of the world.
As crude production soars in places like the Eagle Ford shale formation in Texas, U.S. refiners along the Gulf Coast are increasingly using local oil, which is less expensive than the North Sea crude that European refiners use. That often means diesel and other fuels made in the U.S. are a bargain abroad even after adding the shipping costs.
While federal law bars overseas shipments of most U.S.-produced oil, refiners can export petroleum products created from that crude, including gasoline, diesel and jet fuel.
In July, U.S. refiners shipped a record 3.8 million barrels of products a day to places as far flung as Africa and the Middle East, according to the latest monthly data from the Energy Information Administration. That volume is nearly 65% above the 2010 export level, when the U.S. oil boom was still in its infancy.
And then this from RBN Energy:  This is the third in a series on the fuel oil industry in Houston. This sounds like a niche industry, and seems a bit unrelated to the Bakken, but it doesn't take many dots to connect what is going on. To put some of the numbers in the linked article in perspective, remember that Cushing has about 35 million bbls of storage capacity, and that the southern leg of the Keystone XL, due to open next month, will flow 5 million bbls/week.
The BOSTCO Terminal started operations this week on the Houston Ship Channel. By early next year (2014) the terminal will have 6 MMBbl of storage capacity. This $500 Million investment by two midstream companies is designed to meet the expanding needs of fuel oil blenders at the Gulf Coast. Before the first phase could be completed, 900 MBbl of additional refined product storage planned for phase two, was snapped up by Morgan Stanley for distillate fuels. Today we describe the terminal facilities and ownership structure
This is the third installment in our series covering fuel oil infrastructure on the Gulf Coast.
See also: KinderMorgan expands footprint in the Eagle Ford.

Disclaimer: this is not an investment site, and I constantly remind folks not to make any investment decisions based on what they read here, or what they think they may have read here, but it is incredibly clear what is happening in the US. The center of gravity for global energy has moved to the US. Saudi and Russia have oil and natural gas, but the US now outproduces both Saudi Arabia and Russia, but equally important is the entrepreneurial spirit; free market capitalism; banking resources; free flow of capital; in America.

The Wall Street Journal

This story will be missed by both folks but it is another data point when trying to sort out the president's Islamic upbringing. When the Muslim Brotherhood had taken control of Egypt, US aid continued to flow to Egypt. Now that the Muslim Brotherhood has been declared illegal by the new government in Egypt, the US will stop financial aid to Egypt.

"Revived" A123 is shifting its focus to hybrids.
Advanced battery maker A123 Systems LLC is shifting its focus to small, hybrid-cars and away from fully-electric vehicles in a reflection of the slowly developing market for electric vehicles, the company's new chief executive said on Tuesday.
The company expects electric vehicles won't now become a major part of global auto demand for many years. However, new batteries for start-stop systems and hybrids is forecast to grow quickly as auto makers seek inexpensive ways to improve fuel economy in gasoline-powered cars, said Chief Executive Jason Forcier.
A123 was the first company to open a plant in the U.S. to build batteries for electric vehicles under a government-back program to seed the U.S. electric-car industry. A123's automotive and electric grid storage businesses were purchased by China's Wanxiang Automotive Group from bankruptcy court in January for $256.6 million.
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I don't particularly like to post these stories: they are simply Polaroid snaps that are lost by the end of the day, but sometimes one finds something worthy for the family album: natural-gas futures rise again.
Natural-gas futures climbed for a third session in a row Tuesday amid forecasts for temperatures to turn colder in key markets, potentially increasing demand for the heating fuel.
Natural-gas futures rose 2.4%, or 8.7 cents, to $3.716 per million British thermal units, the highest close since Sept. 17. Prices have climbed 6.2% on the New York Mercantile Exchange since Thursday's settlement.
Temperatures could drop to below-average levels later in October, particularly in regions of the U.S. that are the biggest consumers of natural gas, according to some weather forecasters.
Demand for natural gas usually increases in cold weather, as furnaces burn the fuel to heat buildings. But mild weather in the densely populated Northeast and Midwest regions have reduced demand for gas in recent weeks, which allowed stockpiles of the fuel to build up and kept futures prices under pressure.
There are several stories lines here, of course. 


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There were so many other stories in today's Journal I would like to post/link, but I simply don't have enough time. There are some huge things going on right now -- I think the government shutdown and the debt ceiling debate are bigger stories than folks realize. 

One of the reasons military leaders don't want to go to war is because wars seldom go as planned. Unintended consequences become the norm. 

The government shutdown and the debt ceiling debate is as close to war as the government gets (even more so than an impeachment, which is personal, and a battle, not a war). No one knows where the current war would lead once it started, but its outcome is starting to become clearer. 

I did not post this story from The Journal up above, but the headline -- well, actually two stories. Put these two stories into your databank; the headlines tell me exactly how this could play out:
  • heard on the street: markets shouldn't rely on the notion that the president can pull a rabbit out of the debt-ceiling hat
  • ome lenders are talking with U.K. regulators and drawing up internal plans on how they would cope if the U.S. fails to increase its borrowing limit
If one thinks President Obama is winning in the left-leaning mainstream media, search out the CNN story reporting how Ms Sebelius was "shredded" by John Steward on The Daily Show. 

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Later, 8:03 a.m. same day: shortly after posting the above, I noted that the Drudge Report linked an NPR story that buried the fact that the president's approval rating has dropped to 37%. Of course, the NPR folks led with the story that "most" Americans are blaming the GOP and the Tea Party. "Most" Americans can blame the GOP and the Tea Party all they want, but neither the GOP nor the Tea Party are running for anything. Individuals run for office, not the GOP and not the Tea Party. But a 37% approval rating for a Nobel-winning president is shocking, especially considering this is a man-made crisis that could have been avoided.

Even during the Cuban Missile Crisis, JFK continued to negotiate with the Russians.

Meanwhile,
President Obama held an off-the-record meeting with five conservative journalists on Tuesday afternoon.
Present at the meeting were Charles Krauthammer, the Washington Post columnist and Fox News contributor; Paul Gigot, the Wall Street Journal editorial page editor; Robert Costa, the National Review's Washington editor; syndicated columnist Kathleen Parker; and Washington Examiner columnist Byron York, according to a source with knowledge of the meeting.
And this was what got the president's attention:
Fox News Channel’s “The Kelly File” handily beat rivals in total viewers, an auspicious start for the network’s first new primetime program in more than a decade, as well as its host, Megyn Kelly.
According to early Nielsen totals, Fox News Channel’s “The Kelly File” lured nearly 2.1 million viewers between 9 p.m. and 10 p.m,. Monday evening, compared with 997,466 for MSNBC’s “Rachel Maddow Show” and 529,946 for CNN’s “Piers Morgan Tonight.” The figures could change slightly.
And before I get any comments about the demographics, remember: the demographics advertisers want and the demographics pols want are mutually exclusive. [Update: 2nd night: Megyn added to her lead; this time she beat everyone in every demographic. She beat Piers and Rachel combined:
Has Fox News Channel found the new queen of primetime cable news? In her second night on Fox News’ new primetime lineup, Megyn Kelly clocked the highest adults 25-54 rating across all of cable news, building on her Bill O’Reilly lead-in. Kelly averaged 623,000 demo viewers and 2.8 million viewers overall — and did it without Sen. Ted Cruz, her premiere-night big “get.” Compared to her maiden voyage in primetime the previous night Kelly’s show jumped 116% in the demo and 34% in overall audience. In so doing, she beat CNN’s Piers Morgan and MSNBC’s Rachel Maddow combined — in both metrics. Morgan logged 590,000 viewers, 169,000 of them in the demo; Maddow logged 1.1 million viewers, 291,000 in the demo.]

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