Wednesday Morning Ramblings -- Not Much To Do With the Bakken

Updates

May 16, 2012: John Deere/CEO visits Bismarck (regional links break early and break often); huge distributor is in Bismarck, ND. 

A booming economy is attracting a lot of attention to North Dakota and a lot of officials.

A busy oil patch and a nation leading Ag industry brings the CEO of John Deere to western North Dakota.

Ag Reporter Sarah Gustin visits with this top official about John Deere's presence in North Dakota's 2 largest industries.

(Ron Offutt / RDO Founder) "It doesn't get any higher in Moline, Illinois than who's here today. So Sam, chairman of John Deere, would you come say a few words to this great team, because we are proud of it.

The CEO of John Deere, Sam Allen is stepping out of the office and into the shop to get a 1st hand look at the equipment he oversees.

RDO Ag and Construction is the largest independent dealer for John Deere.

RDO has 60 locations in 9 states.

Bismarck is the largest store.

Original Post

1. The Feds won a huge battle with the banks over the housing debacle. The Feds earmarked that money to be returned to homeowners to help them with their mortgages. Unfortunately, the Feds sent the money to the states to distribute. In many cases, the money never left the states' coffers. Instead of being used as intended, to help homeowners, states are using the huge windfall to plug state deficits. Link here.

2. Remember an earlier post about oil-farmer-millionaires who can now afford to farm? A reader noted that North Dakota farmers are buying farm machinery to offset their royalty income for tax purposes. So, any evidence that story is more than anecdotal? Deere reports this morning that earnings exceeded expectations by almost 20 percent; raises profit forecast; share price jump. More evidence that North Dakota farmers doing well? Willie Nelson has no "Farm Aid" concerts scheduled for the state (at least as far as I am aware).

3. It looks like the iPad is going to morph into the iPhone. The iPhone is getting bigger and the iPad is getting smaller according to rumors.

4. A viewer of CNBC asks Jim Cramer on Continental Resources; mentions that North Dakota is now #2; mentions that Bakken (could be?) bigger than Prudhoe. Not sure if he said "could be" or "is." Cramer not investing in oil companies right now due to price of oil. Hmmmm.  Buy high, sell low?

5. On Monday, May 14, 2012, I posted this: On CNBC today they are talking about a run on the banks in Greece. This is hugely old news. Googld "Greece run on banks" and you will see that there has been a "silent" run on banks since last autumn, with the first peak perhaps in December. The next rumor / bit of news to watch for: printing presses in Greece (or wherever they might be) printing "new" drachmas. Well, today, Don sent me this link:

Investors searching for clues in this crucial debate should consider closely watching shares of British printing company De La Rue. That’s because the London-listed company is the world’s largest commercial currency printer and could be tapped to help bring back the drachma if Greece finally throws in the towel on the eurozone.

So, there you have it. Shares in this company have risen 13% in the past few days.

6. Speaking of Greece, the folks there withdrew almost a billion dollars in one day, and then MSNBC asks the question, is this a beginning of a run on banks in Greece. As I posted earlier, if one googles "Greece run on banks" one will find that the run on banks in Greece began silently starting last August. Most of the big money has been taken out. This is a train wreck. The only question is the size of the oncoming train and the speed of the Greek train. Wow, talk about Greek tragedies.

7. My hunch: a community organizer only a few years ago, now worth in excess of $10 million and hobnobbing with George Clooney and the rest of Hollywood will have trouble convincing voters that his opponent cannot identify with America's middle class.

8. Energy supplies expected to increase. Up by 2.1 million barrels; less than what API reported last evening (6 million barrels) but almost double what analysts expected. I do not know the explanation for the difference between government figures and the API figures, but 2 million vs 6 million bbls seems like a significant difference. The build will decrease as a) Americans start driving this summer; and, b) Canada slows down production due to drop in price of oil.

9. Illinois: twice the number of homes in foreclosure than California. So, the good news? California is digging itself out of the hole. The bad news: California is not a swing state; Illinois is. (With regard to the election.)