The "R" Word: From Minyanville, Some Interesting Stories -- Crude Oil on the Cusp

Updates

Later, 11:40 a.m.: I posted the original post a couple of hours ago; note the reference to a possible recession in the US -- mentioned by me, not others. Now I see this story: factory orders suffer largest drop in three years. It's already agreed that the housing industry won't turn around for years. Throw in the EU recession. And the unemployment numbers in the US. I don't think I was being premature in my use of the "R" word.

New orders for U.S. factory goods in March recorded their biggest decline in three years as demand for transportation equipment and a range of other goods slumped, government data showed on Wednesday.

The Commerce Department said orders for manufactured goods dropped 1.5 percent after a revised 1.1 percent rise in February.

Economists had forecast orders falling 1.6 percent after a previously reported 1.3 percent increase in February.

But the report is "complex" -- go to the link; it's hard to sort out all the data points. It's not clear cut.

Original Post

Crude oil on the cusp, from yesterday:

Tuesday’s open had already firmed up to fresh highs at the 105.25 buy signal. ISM’s surprise triggered a surge that eventually tested 106.40. Now a second consecutive higher close would confirm 112.00 in-play.

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Unemployment:

There are some signs that the cleanest shirt in the European basket, Germany, is faltering. The biggest economy in Europe had its first drop in factory output this year in April, with PMI falling to a 33-month low of 46.2. German unemployment also unexpectedly rose by 19,000 last month.

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Minyanville didn't report it, but are we going to start seeing stories on CNBC of the possibility of the US headed toward another recession? Talking heads on CNBC did start using the word "stagnation" throughout the day yesterday. (We lost cable after 3:00 p.m. yesterday and still don't have it so I won't be following CNBC for awhile.)

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Why is Delta buying a refinery, really? That link will take you to another link, or you can go directly to the story at SeekingAlpha.com.  The summary at Minyanville (the first link) is shorter and to the point.

Delta Airlines' agreement to buy a ConocoPhilips refinery in Pennsylvania is all about Southwest Air.

Delta's ongoing battle with Southwest is about costs. Delta's hub-and-spoke system is inherently less efficient than Southwest's network of short flights that just go back-and-forth. But because Southwest has now been around for a generation and accepted unions, while Delta has always pushed back against workers, it may actually have an advantage in labor costs.

The deal is for a refinery near Philadelphia, plus pipelines and other assets that reach its New York hubs. There are $30 million in government incentives on the deal, and Delta has already made deals with BP and Phillips for sourcing oil and selling products other than jet fuel.

Delta figures it can handle 80% of its U.S. jet fuel needs through the deal, saving up to $300 million/year. Put those savings onto its bottom line and profits rise 15%.

There's much more at the second link.