Tuesday, September 15, 2015

The Storm We Call Hillary Dissipates, Saturday's Note, Part I -- August 29, 2015


September 15, 2015: at the very bottom of the original post (below), GE snookering Connecticut was mentioned. GE said it was looking at moving headquarters to Texas (because of high Connecticut taxes) but changed its mind because the Texas Senators were "against" the Export-Import Bank. GE now says it will move 500 jobs overseas because the Export-Import Bank remains "closed."
Original Post

This is likely to be a meandering note that will go nowhere, almost none of it about the Bakken directly but years from now some of this, hopefully, will put the Bakken into perspective. Some of it, but not very much.

The Obama administration did all it could to keep the dream alive, but the fact is, it has still been a decade since we've had any hurricanes in the Gulf of Mexico. The warmists really, really needed Erika to turn into something, but it never did. Even the Weather Channel hung on long as it could, trying to keep the dream alive, but even now the Weather Channel concedes Erika has dissipated, though they hold out some hope it could re-form yet as it heads toward Florida. (I don't know if that's a dynamic link or not.)

After this last week, one could say the storm we call "Hillary" is much like Erika. First, they both have unusual names, barely feminine, and both roll off the tongue. It's very possible Hillary herself will become a tropical depression before the Florida primary some months from now, but my hunch is she will get the DNC nomination, regardless. If not, it's Joe Biden and some of the best one-on-one presidential debates we will ever see. I think folks will be surprised how well Joe will banter with the Donald. It looks like Jeb Bush will dissipate faster than Erika at this point. I've never really paid much attention to good ol' Jeb, but now that I've seen some Vanity Fair photos of him, he appears to be the quintessential definition of a "suit."

Suit, slang: a business executive or white-collar manager. 

Another storm that dissipated almost as fast as Erika this past week was the Chinese storm. That storm may not be over, but at least no one can say they weren't warned. The US stock market crashes, oil drops below $39 but then the market comes up a bit and finishes the week a lot lower than it started, but certainly, back in territory that provides a sense of relief, warranted or not. Oil surged 10% and finished the week well above $40.

I'm inappropriately bullish on oil and not a bit concerned. The tea leaves suggest folks will still be using oil and natural gas and gasoline and jet fuel (made from crude oil) and coal five years from now. It looks like Warren Buffett thinks the same. I don't know if folks remember, but Warren really got burned in energy a few years ago when he bought COP "high" and ended up selling it "low." At the time he joked about what a bad decision that was and vowed never to repeat it. I had the feeling he was going to stay away from the majors. But then it turns out, he has a huge stake in COP refining, now called Phillips 66. Warren owns 10% of PSX at a current value of $4.5 billion. That speaks volumes. Let me count the ways:
  • first, as mentioned earlier, he got burned in COP and probably thought long and hard about PSX before buying, holding, and accumulating;
  • second, Warren says he's a warmist, believes strongly in global warming, and here he is, buying an oil refiner;
  • third, if the government okays oil exports, the refiners aren't going to look quite as good as they do now;
  • fourth, unless Warren has turned into a trader at age 85, he is a value investor, a long term investor, someone who holds stocks for a very, very long time, suggesting he sees refiners as a good long-term investor.
Of the four, point #3 is most interesting -- something tells me Warren took out a yellow legal pad and summarized the pros and cons of the US sanctioning crude oil imports -- just kidding, too much work; he simply phoned the president and they had a friendly little chat. Then, after promising her a few dollars for her presidential campaign, he had the same chat with Hillary. Both reassured him there was no way that the US would "across-the-board" okay oil exports.

Meanwhile, in other areas there was also some big energy news. Schlumberger will buy Cameron for almost $15 billion, assuming the regulators and the EU okay the deal. I think SLB is still a French company so they have that on their side. HAL and BHI are American companies. The EU pretty much killed the HAL-BHI merger.

GE snookered Connecticut. Of course, we don't know the sweetheart deal got from Connecticut but there was no chance GE was leaving Connecticut for Dallas. Too many reasons. Not enough time to elaborate. GE simply used the Dallas threat to get some tax breaks. 

End of Part I. 

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