Friday Morning Links, News, And Views; US "Dismayed" With Chinese Tariffs -- Just Remember Who Started The Tariff War

Active rigs: 190 (finally a change, up 1)

RBN Energy: the market for Canadian LNG; not a very optimistic report, but more to follow

Unemployment: rose in 28 states; that would be more than 50% of US states

Earnings: Schlumberger beat estimates; shares surge almost 4%; nice; SLB increases dividend:

A day before it's to release its latest quarterly results, Schlumberger has declared a fresh dividend. The company announced it will hand out a $0.3125 per share common stock distribution on October 11 to shareholders of record as of September 4. That maintains Schlumberger's dividend policy, as it has paid that amount in both of its preceding quarters. The most recent of the pair was disbursed last Friday. Prior to that, the firm paid $0.275 per share.

Wells coming off the confidential list have been posted. 

Oil nearing $110. Up $1.10 in early trading. An astute analyst has suggested the fast and furious rise in oil prices will hurt the consumer. Can anyone say "Keystone XL"?

Microsoft falls almost 10% in early trading; takes a $1 billion write-off for the Surface.

WSJ Links

Mansion: --

Arena: maybe later

Money & Investing:

Ahead of the tape: Schlumberger holds world of opportunity.

It is getting more challenging for global oil majors and national oil companies to tap complex fields, and Schlumberger is the firm they turn to for help. Bill Herbert of Simmons & Co. International rightly points out that even the majors are having to sell assets and borrow to cover bloated investment budgets. Even so, the imperative to keep drilling just to maintain current production levels won't disappear easily.

Schlumberger's model has proved its mettle over time. Since 2006, profit margins have averaged between two and five percentage points higher than the industry, according to RBC Capital Markets. Over the past decade, Schlumberger's free cash flow of $21.9 billion was almost five times the combined amount for Halliburton and Baker Hughes, according to S&P Capital IQ.

Natural gas prices jump as heat wave fuels demand.

Marketplace:

So, what's the matter with shale gas?  

Sometimes it seems as if the environmental movement has been left behind by the sheer speed of America's shale energy revolution. That may be because a resource—natural gas—that environmental groups once saw as part of the solution has become part of the problem, at least as they see it.

Shale gas and oil are widely viewed as one of the biggest forces to hit the U.S. economy in modern history. Total U.S. gas production has rocketed 33% since 2008 and oil 46%, driving down energy costs. The expanding shale industry supported 1.7 million jobs in 2012 and produced $62 billion in state and federal tax revenue, according to IHS/CERA, the energy consultancy.

"The new narrative about shale gas is about jobs, economic growth, global competitiveness, and a U.S. manufacturing renaissance," says Dan Yergin, the energy expert and author of "The Quest."

The public gets the narrative. A Pew Research poll found 48% of respondents favor increased use of hydraulic fracking of shale; 38% are opposed.

Where does this leave the environmental movement? Trying to change the conversation about shale gas.

Microsoft: another big miss. Tablet weighs on results. Even excluding the write-down of the tablet, Microsoft earnings of 66 cents was well below forecasts of 75 cents:

Microsoft took a $900 million charge on its high-profile Surface RT tablet, contributing to fourth-quarter results that sharply missed revenue and profit expectations.

The software giant also cited the effects of the soft personal-computer market in its quarterly report Thursday.

Excluding the Surface write-down, it posted earnings of 66 cents a share, well below Wall Street estimates of 75 cents, while revenue came in at $19.9 billion, compared with analyst expectations of $20.7 billion.

And no repercussions for Steve Ballmer? Steve Jobs would have been pummeled.

China fights back in solar panel war.

China on Thursday announced tariffs on imports of raw materials from the U.S. and South Korea used to make solar panels, in the latest volley in a global trade fight that has ensnared Beijing, Washington and the European Union.

China's Ministry of Commerce said Thursday it would enact preliminary tariffs on imports of solar-grade polysilicon after a yearlong probe into whether the raw material was sold at below-cost prices. The polysilicon tariffs could be as high as 57% for U.S. suppliers and as high as 48.7% for South Korean suppliers, according to the ministry.

U.S. officials said they were dismayed at the Chinese decision. "We are very disappointed at China's announcement of duties to be imposed on U.S. exports of polysilicon," said a spokeswoman for U.S. Trade Representative Michael Froman. The spokeswoman added that the U.S. will review China's order for any possible violations of World Trade Organization rules.

Oil boom heats up the rails (where have these guys been? under the Geico rock?)

Trains of black tanker cars full of crude oil aren't uncommon sights these days in Texas or North Dakota. Since the use of these cars to convey crude is so recent, the tank cars themselves look new and don't have the weathering or graffiti common on other freight cars. These trains rumble across the flat landscapes and can be found parked in sidings, waiting to pull into a loading station and be filled with oil.

Most tank cars that carry crude and other liquids on U.S. and Canadian rails aren't owned by a railroad or an oil company, but by specialized leasing companies. The leasing companies have quietly become one of the biggest beneficiaries of the current boom in oil production in the U.S. and Canada—thanks to soaring demand that is allowing them to extend the length of contracts and jack up prices.

General Electric Co.'s rail unit, Chicago-based GATX Corp., GMT and CIT Group's CIT rail arm, each of which owns fleets exceeding 100,000 rail cars, are the giants of the trade. They own thousands more cars than railways such as Norfolk Southern Corp., NSC Burlington Northern Santa Fe LLC and Union Pacific Corp., according to data from Progressive Railroading, a trade publication. Other, smaller players include the leasing units of manufacturers Union Tank Car Co., Trinity Industries Inc., and Wells Fargo & Co. unit First Union Rail Corp. Union Tank and Canadian affiliate Procor Ltd. are part of Marmon Group, which is part of Warren Buffett's Berkshire Hathaway Inc.

The Front Section:

The lead story, of course, was the Detroit bankruptcy. One city official "demands" a federal bailout. No link; story everywhere. 

Op-Ed:

O'BamaScare: Democrats are voting against provisions of the bill, dismantling it bit by bit.

Recently elected Senate Democrats have enthusiastically joined efforts to kill portions of the law, such as the medical-device tax, the better to suggest to angry constituents that they are "flexible" about "fixing" it.

Recent Democratic candidates are harsher. Elizabeth Colbert Busch, who ran in May's special House election in South Carolina, declared ObamaCare "extremely problematic, it is expensive, it is a $500 billion [higher] cost than we originally anticipated, it's cutting into Medicare benefits and it's having companies lay off their employees because they are worried about the cost of it."

She finished: "It needs an enormous fix." This was a call for repeal in everything but name.

Alison Lundergan Grimes, who recently declared against Kentucky Sen. Mitch McConnell, declined to even voice support of the health law. At the event announcing her candidacy, the second question was about her support of ObamaCare. Her response was nearly incoherent: "I will tell you, regardless of the vote that is issued in this race, we cannot change who our president is. But we can change who we have in Washington representing Kentuckians." With that, she ended the event. 

And more: 

Democrats for three years have comforted themselves with the thought that 2014 would be the year they broke free of the ObamaCare night sweats. Their political washout in 2010, their failure to take back the House last year, all was the result of their having to defend a law that had yet to take effect. Once the law was up and running, Americans would wake up to its benefits. Or so they believed.

Instead, it is Democrats who are waking up—to a horror film. Every morning brings fresh news of terror: missing deadlines, programs running of money, premiums set to soar, flailing technical implementation. And this week Republicans nimbly forced them to choose between abandoning core provisions of the bill or renewing ownership of what may prove to be one of the biggest political liabilities in decades.

What makes this story line particularly horrifying for Democrats is that it is happening despite their best-laid plans. The architects of ObamaCare wrote its timeline with politics in mind. The law's most popular freebies—the bar on pre-existing conditions, parental coverage for children up to age 26—went into effect quickly to give the party some immediate credit. The law's more unpleasant provisions and trickier technical components were slated to begin ramping up in 2013—a non-election year. That way Democrats could get past any hiccups and start handing out subsidies in time for the next midterm election. Nobody counted on the hiccups turning into cardiac arrest.

My hunch: the "entire" bill will be delayed sometime in late 2013/early 2014 (before the mid-term elections) to allow time for "new" Congress to study the impact. 

A book worth reading re: flying the unfriendly skies -- 

Why, when the idea of flying seems so liberating, does the act itself feel like incarceration?

Most of us know the routine: the security ritual, complete with full-body scan and pat-down; the queuing up; the seat backs that crush your knees; the plastic trays (on international flights, at least) of less-than-appetizing food.

Recall how pilots occasionally used to stroll through the cabin. Now they stay locked behind steel-reinforced doors.

In his fact-packed and engaging critique of air travel, "Full Upright and Locked Position," Mark Gerchick cites a credible-sounding estimate that 15% of them carry firearms. "Flying today," he notes, "is a jarring contradiction—amazing and god-awful at the same time." 

Prison analogies abound in Mr. Gerchick's zippy rundown of the state of commercial air flight. The author, a former chief counsel for the Federal Aviation Administration, picks through his topic one problem area at a time, in chapters with titles like "The Hassle Factor," "The Margin" and "Fares, Fees, and Other Games."

The past decade has seen nostalgia grow for the supposed golden age of flying—the age of gourmet meals and friendly flight attendants—evident in television shows and films such as "Mad Men" and "Catch Me If You Can." But we might also recall with fondness what it was like to fly a mere 12 years ago, before the security lockdown that followed 9/11 and before the mid-2000s spike in fuel costs and the triumph of low-cost airlines.

These factors, according to Mr. Gerchick, are the "big three" that have reshaped air travel today. Some of the past decade's most extreme security measures—children frisked, nail clippers confiscated—have been rolled back, but the fuel panic that reached its peak in 2008 may have had more lasting effects. Fighting to stay afloat, airlines jettisoned everything from unpopular routes to hot meals and magazines. They also added the fuel surcharges that paved the way for other costly add-ons. Jam-packed flights, ubiquitous fees and "a tough new focus on profitability and the bottom line" are now the norm.