Marathon Petroleum to acquire MarkWest Energy Partners: $16 billion.
Greek deal. The Greeks walked away from $8.1 billion a couple of weeks ago. Greece held out for $100 billion.
The big story in southern California this morning is the skyrocketing price of gasoline. It's gone up almost a dollar / gallon in the minds of the folks sitting around the tables here at Starbucks. Actually, I don't think it's gone up that much. It's only gone up about 30 cents / day each of the past three days.
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The Black Hills Deal
I posted that yesterday. My concluding paragraph: It costs about $500,000 to lay a mile of pipeline across easy prairie, upwards of $2 million/mile under water. And that's assuming Tom Steyer will let you build a new pipeline.
And that's what the deal was all about. It's easier to buy existing pipeline than to fight the environmentalists.
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The Marathon Petroleum Deal
From the link above:A Findlay, Ohio-based energy asset firm owned by Marathon Petroleum Corp. reached a deal to acquire Denver-based midstream natural gas firm MarkWest Energy Partners in a deal valued at about $15.8 billion, officials said Monday.
MarkWest will become a wholly owned subsidiary of Marathon's MPLX LP following the close of the deal, which is expected to take place in the fourth quarter of 2015.
MPLX's assets include ownership of crude oil pipelines in the Midwest and Gulf Coast regions and a butane storage cavern in West Virginia. MarkWest is the No. 2 player by market share in processing of natural gas from the Marcellus Shale and Utica Shale.
The combined company will have a total market capitalization of $21 billion, purportedly making it the fourth-largest limited master partnership.
MPLX is making a one-time $20 billion payment to acquire MarkWest and will assume $4.2 billion in debt.
Marathon Petroleum is kicking in $675 million in cash to support the acquisition.
The deal reflects a 32% premium of Friday's closing price of MarkWest shares.
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Greek Deal
The i's are not dotted and the t's are not crossed ... oh, and a few other things:
- Finland has to agree
- Tsipras has to step down
- Greek parliament must capitulate, lose face, feign remorse
- Greek people have to hold back on celebrations until after the deal is closed
You all recall that Greek told the IMF to suck eggs; Greek said they wanted the New York bankers out of Europe. The Greeks telegraphed the world and the IMF they were not going to pay back the $2 billion loan they owed the IMF. The Greeks kept their word; they defaulted and did not pay the IMF. After that, we heard nothing more from the IMF; they were nowhere to be found in the newspaper articles or internet articles that followed.
But then this, as part of the bailout deal:
The loan will come mainly from the European Stability Mechanism (ESM) - the eurozone bailout fund. But the International Monetary Fund will also be asked to make a contribution from March 2016.LOL. I can't make this up. After being stiffed, the IMF is going to be asked to contribute to the $100 billion bailout plan. I can't wait for this story to develop.
If the deal goes through, this was the why: Tsipras used the old "divide and conquer" strategy. France wanted to hold the EU together at all costs. Remember, Hollande and Tsipras are cut from the same swath of liberal -- very, very liberal -- cloth. Hollande was going to do anything he could to save Tsipras, the Greeks, the EU. (By the say, if the deal goes through, this puts the "socialist" stamp on EU in almost indelible red ink.)
On the other hand, the Germans had had enough of the Greek tragedy and were ready to walk.
Tsipras knew he simply had to scare the heck out of the EU with a huge French-German rift. Even Angela Merkel knew that. If Germany and France couldn't come together on an agreement, that was effectively the end of the EU. Merkel blinked. Hollande stood his ground. Tsipras smiled. The iliad, the odyssey, the deal.
Later, 11:29 a.m. Pacific time: same story but from MyWay:
The deal includes commitments from Tsipras to push a drastic austerity program including pension, market and privatization reforms through parliament as soon as possible.
In return, the 18 other eurozone leaders committed to start talks on a new bailout program.
"The Greeks have to show they're credible, show that they mean it," said Jeroen Dijsselbloem, president of the eurogroup of eurozone finance ministers and a longtime critic of the Tsipras government.
A Cypriot official said the creditors would look into bridge financing for Greece later Monday, suggesting that the deal could pave the way for the European Central Bank to extend emergency liquidity assistance to Greek banks.
Without it, they risk running out of cash this week. The official spoke only on condition of anonymity because he was not authorized to discuss the deal publicly."... as soon as possible."
"... show that they mean it."
"... look into bridge financing for Greece later Monday (today) ... "
Wow, talk about some nebulous phrases, " ... as soon as possible..." and "... show that they mean it ..."
And that bridge financing. Can you imagine how the Germans feel sending cash -- real cash -- to Greek banks to hand out to their citizens? Especially after the Greeks resoundingly voted to thumb their noses at the IMF, EU, EC, and Germany.
At the end of the day, this is about two socialists: Hollande and Tsipras.
Update, July 14, 2015, 12:25 a.m. Pacific Time: remember the $2 billion Greece still owes the IMF. I think a lot of folks forgot because the mainstream press hasn't said anything about it. The IMF hasn't forgotten. The Financial Times is reporting:
The delay in reaching a deal tested to the limit the European Central Bank’s capacity to keep providing Greek banks with emergency finance. But, following the announcement of the agreement, the ECB said it would maintain Greek banks’ €89bn lifeline.
The IMF, however, said late on Monday that Greece had missed a second payment, meaning it now needed to clear €2bn in arrears before the institution could lend to Athens again.Reading the linked Financial Times story suggests this deal is not yet a "done deal."
The prospect of a collapse of Mr Tsipras’s government was weighing on decision makers in Brussels, where finance ministers were wrestling with how to rush €7bn in bridge financing to Athens so that it does not default on a bond owed to the European Central Bank on Monday.
One EU official said that with Mr Tsipras’s status so unclear, ministers were likely to wait to see if he survives Wednesday’s vote before finalising any bridge financing deal. And some finance ministers, who gathered again in Brussels on Monday night to consider their options, gave warning that Mr Tsipras could face even more conditions to get the desperately needed cash.
“I foresee very difficult negotiations on bridge financing,” said Alex Stubb, the Finnish finance minister. “I certainly have no mandate to give unconditional money.”I still have trouble seeing German citizens willing to send $100 billion (or thereabouts) in real cash to the banks in Greece. They know that a lot of the cash will be used to pay the salaries of the bank directors and will never reach the pensioners or other account holders. The Germans could very well be asking why are we paying the salaries of all those bankers and bank employees, and then with the rest, handing our cash over to Greek pensioners?
Update, July 14, 2015: as part of "the deal," Greece promises to do a better job collecting taxes. LOL. This is what is going to happen: to show good faith, the Greek government will budget a gazillion dollars for a new "tax collection and enforcement" branch putting a gazillion more civilians on the state payroll, with a great pension. The new tax branch won't be any better than the present system. What amazes me is that the Germans, and the Finns are willing to participate in this charade.
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