Sunday, May 31, 2015

What We Will Be Talking About Monday -- May 31, 2015


June 1, 2015: the Greek story? I was spot on

June 1, 2015: so how did we do? I was wrong when I said we wouldn't be talking about California today, although when I said that, I did mention that California will provide us many subjects to discuss throughout the month, including ObamaCare, the drought, and the minimum wage. It turns out there is a minimum wage story today. It turns out a child care center employee had her hours cut by 25% from eight hours to six hours/day; from 40 hours to 30 hours. The Los Angeles Times reports that the employee had her hours cut by 25% when the minimum wage kicked in, and that may be just the start. Her employer says that the day care center may have to close, and re-open as an after-school center. All because of the minimum wage. Regular readers know that The Los Angeles Times op-ed after op-ed asking for any examples where minimum wage hikes less to job losses or to businesses having to shut down. I guess we have our first example. Surprised to see The Los Angeles print this story.

June 1, 2015: so how did we do? Yup, 8 hours ago, Reuters posts the story on rig count -- whether drillers should crouch or pounce There are several stories on Greece but that was a no brainer. The big story I forgot: there are only six states that currently ban "open carry" outright. Texas is was one of those six. Today, the governor will sign the bill allowing open carry in Texas. It will get a lot of play in the east, but the stories will fail to mention that the six "states" that ban open carry include District of Columbia and New York -- and we've seen how that works out.

Original Post 

Greece heads the list. Everything points to things getting crazy as we get closer to default. Great political theater. At a minimum, the creditors will find a way to delay another 30 days.

Mideast: there are no embedded US journalists within ISIS and that's why we are getting such little news here in the states regarding "shock and awe" and the JV team, but it's clear things are building for a summer offensive. The torching of Iraq's largest refinery this past month does not bode well for the country. That one refinery was responsible for producing one-third of Iraq's domestic fuel supplies. The most interesting development: the White House clearly stating that the US is no longer responsible for Saudi Arabia's security.

Rig count: the number of active rigs in North Dakota will start the week at a record post-boom low. Some readers have suggested the number could go (much?) lower. I'll never find the post, but I think I once said 75 would be the lowest it would ever go, but maybe I'm thinking I said that.

Politics: except for those who live for politics, I don't think anyone else cares. All politics is local and the local races haven't begun for 2016. At the national level, the Democrats will coronate Hillary at the end of July, 2016, in Philadelphia. The Republican national convention will be held about 10 days earlier in Cleveland, Ohio, no doubt the home of the 2015 NBA champions. It's hard to believe but the 2015 championship series has not yet begun and it's already June. Carly and Scott will be the GOP nominees for P and VP. Not necessarily respectively.

ObamaCare premiums for 2016 will grab the headlines in November, 2015, now that we're starting to see trial balloons being released. New Mexico regulators will never allow a 50% increase in premiums.

California we won't be talking about tomorrow unless there's a big earthquake, but with big corporations leaving the state (most recently, Broadcom), ObamaCare, the drought, and the minimum wage in Los Angeles, there will be plenty to talk about over the next few months.

The Obama-Asian Trade Bill no one cares about will not be on the agenda at Williston's Cash Wise deli tomorrow morning, but it will be interesting to see how it plays out.

Waylon Reminisces

Cable News Ratings

For the archives:
According to Nielsen “most current” estimates for the Dec. 29, 2014-March 29, 2015 quarter, Fox News cruised to a primetime victory in the key news demo of adults 25-54.
Fox News averaged 328,000 viewers nightly (up 9% vs. a year ago) and was followed by CNN (192,000, up 11%), MSNBC (136,000, down 40%) and HLN (130,000, up 11%).
CNN has now beaten MSNBC in primetime for four consecutive quarters. And for MSNBC, whose “Rachel Maddow Show” and “Last Word with Lawrence O’Donnell” had their worst showing on record, this is its lowest-rated quarter since Q2 in 2006.
Fox News was again especially dominant on weeknights, where its average audience of 409,000 adults 25-54 was larger than CNN (207,000) and MSNBC (131,000) combined.
I'm not surprised Fox News won by a landslide, I'm surprised, that CNN beat MSNBC, and even worse, HLN almost beat MSNBC. HLN is simply a video loop. 

Very Few Wells Coming Off Confidential List Monday -- June 1, 2015

Monday, June 1, 2015
  • 29788, drl, Enerplus, Cactus 149-92-35B-05H TF, Heart Butte, no production data,
Sunday, May 31, 2015
  • None.
Saturday, May 30, 2015
  • 29271, 690, Hess, EN-Cvancara-155-93-1522H-8, Alger, t4/15; cum --
  • 29604, drl, Hess, GN-Helen M-158-96-3229H-1, South Meadow, no production data,
  • 29915, SI/NC, EOG, Fertile 73-0905H, Parshall, no production data,
  • 30050, 116, Enduro NSCU Q-712-H2, Newburg, a Spearfish/Charles well, application says 14567 acres in spacing unit, t1/15; cum 2K 4/15;


We Should Know By The End Of July, 2015 -- May 31, 2015


June 18, 2015: WSJ front page article on relationship between Israel and Saudi Arabia with regard to Iran.  
It isn’t just about Yemen. Saudi Arabia—like Israel—is also concerned by Tehran’s pending nuclear deal with the U.S. and five other world powers. Fearing that the agreement, and the accompanying lifting of economic sanctions, would embolden Iran to expand its regional sway, some Saudis even hope—not so secretly—that Israeli Prime Minister Benjamin Netanyahu would use his country’s air force to destroy Iran’s nuclear installations.
“Israel is an enemy because of its origin, but isn’t an enemy because of its actions—while Iran is an enemy because of its actions, not because of its origin,” said Abdullah al Shammari, a Riyadh academic who served as a senior Saudi diplomat.
“This means that Iran is more of a threat. If I were a Saudi decision maker, I would not hesitate for a second to coordinate with Israel against Iran’s nuclear program.”
While Israeli officials are equally eager and say that secret contacts have taken place, this doesn’t mean that a diplomatic breakthrough will happen soon.
Original Post

I think we'll know by the end of July which way the price of oil will be headed by the end of the year (well, duh). One can find talking heads on both ends of the continuum: oil could still fall to $40; oil will be at $80 by the end of the year.

Two huge data points yet to be sorted out: gasoline demand in the US once the driving season begins, and the ISIS offensive that will begin this summer in the Mideast.

We've already had indications that gasoline demand in the US will hit new records this summer.

The other data point will come out of the mideast. The stories are starting to come out fast and furious with regard to the summer, 2015, ISIS offensive.

First, we had that excellent Telegraph story just the other day.

Now, we have another London newspaper story, this one in The Guardian suggesting all is not well in the kingdom:
Reports from Dammam described a car bomb explosion at the entrance to the al-Anoud mosque, despite security measures put in place because of last Friday’s incident near Qatif, in which 21 people were killed and 120 injured in the worst attack in Saudi Arabia in a decade.
The latest attack was quickly claimed by Isis, which said the “blessed martyrdom operation” had been carried out by a “soldier of the caliphate” it named as Abu Jandal al-Jazrawi. General Mansour al-Turki, spokesman for the Saudi interior ministry, said the terrorist was dressed in women’s clothes.
Analysts have described “lone wolf” initiatives encouraged by Isis, though the speed of the claim of responsibility suggested planning and coordination.
Isis has been paying special attention to Saudi Arabia since a speech by its leader, Abu Bakr al-Baghdadi, excoriating the royal family as the “head of the snake and stronghold of disease”.
And then perhaps the most bizarre story: Iran accusing Israel of assisting Saudi Arabia, or Iran accusing Saudi Arabia of requesting assistance from Israel to help fight terrorism in Yemen. International Business Times is reporting.

ObamaCare Premiums Could Rise 50% In New Mexico -- An Outlier; Minnesota To Feel The Strain -- May 31, 2015


From The Billings Gazette -- watch for ObamaCare premium hikes, in Montana:
Health insurers selling individual policies on Montana’s Internet “marketplace” are reporting substantial losses for last year — and saying rate increases on marketplace policies are likely in store for next year.
Health-insurance companies had to guess at the cost of this new market, and it appears they guessed low, leading to losses in 2014.
“You’re shooting in the dark on your rates; you really don’t know,” said Jerry Dworak, CEO of the Montana Health Co-op. “You try to guess at what that rate will be, when you do that underwriting. … And you try to be aggressive, to get some (customers).”
“We made a deliberate attempt to expand access to coverage across all lines of our business, and as expected, it impacted our earnings in the short term in 2014, as compared to prior years,” added John Doran, spokesman for Blue Cross and Blue Shield of Montana.
Blue Cross’ parent company, Health Care Service Corp., reported losses of $282 million for 2014 — almost $1 billion less than its $684 million net gain for the previous year.
Politico is reporting ObamaCare premiums could rise sharply in 2016:
The cost of Obamacare could rise for millions of Americans next year, with one insurer proposing a 50 percent hike in premiums, fueling the controversy about just how “affordable” the Affordable Care Act really is.
The eye-popping 50 percent hike by New Mexico insurer Blue Cross Blue Shield is an outlier, and state officials may not allow it to go through. But health insurance experts are predicting that premiums will rise more significantly in 2016 than in the first two years of Obamacare exchange coverage. In 2015, for example, premiums increased by an average of 5.4 percent, according to PwC’s Health Research Institute.
Breitbart: ObamaCare premiums to rise in 2016:
Major insurers in some states are proposing up to 51 percent premium increases for health plans sold under the Affordable Healthcare and Patient Protection Act, commonly referred to as Obamacare. Despite single digit increases for 2015, insurance companies are seeing their costs jump and are demanding to be compensated with dramatically higher rates.
When insurance plans proposed 2015 rates last summer, they had only a little information about the health of the new customers they expected to sign up during the fall Obamacare expansion. Big insurers tended to ask for increases of less than 10%, while some smaller insurers tried to under-cut pricing by the major’s to take market share, according to the Wall Street Journal.
Meanwhile, The Los Angeles Times reports almost half of the state's ObamaCare "customers" report difficulty paying current premiums:
A new survey shows that 44% of Covered California policyholders find it difficult paying their monthly premiums for Obamacare coverage.
And a similar percentage of uninsured Californians say the high cost of coverage is the main reason they go without health insurance.
The issue of just how much people can afford will loom large as the state exchange prepares to negotiate with health insurers over next year's rates.
Many analysts are predicting bigger premium increases for 2016 in California and across the country. Insurers have more details on the medical costs of enrollees, and some federal programs that help protect health plans from unpredictable claims will be winding down.
And as President Obama has so eloquently said in the past: this will be the next president's problem.

And it may be even worse. In another Los Angeles Times story: amid slower growth, California's ObamaCare exchange cuts proposed spending:
After using most of $1 billion in federal start-up money, California's Obamacare exchange is preparing to go on a diet.
That financial reality is reflected in Covered California's proposed budget, released Wednesday, as well as a reduced forecast calling for 2016 enrollment of fewer than 1.5 million people.
The recalibration comes after tepid enrollment growth for California during the second year of the Affordable Care Act. The state ended open enrollment in February with 1.4 million people signed up, far short of its goal of 1.7 million.
A number of factors contributed to the shortfall, but health policy experts said that some uninsured folks still find health insurance unaffordable despite the health law's premium subsidies.
Those pocketbook issues make holding the line on costs an imperative for state officials. Covered California can't draw on the state general funds, and its primary source of revenue is a $13.95 monthly fee tacked onto every individual policy sold.
Minnesota Will Feel The Strain

Regular readers understand this issue, why Medicaid enrollment is surging. The StarTribune is reporting:
Minnesota’s Medicaid rolls have soared past the 1 million mark for the first time, driven by two years of explosive growth in government insurance programs in the wake of federal health reform.
The enrollment surge — one of the largest in the country and the biggest for the state in 35 years — helped push Minnesota’s uninsured rate down to about 5 percent and has enabled more low-income families to receive regular medical care, doctors say.
But it also means that Medicaid and its sister program, MinnesotaCare for the working poor, now rank among the state’s largest health insurers, which could place long-run strains on the state budget. Fully one in five Minnesotans now receive health insurance from public programs, up from one in 10 just five years ago.
While unprecedented, the spurt was not unexpected after the administration of Gov. Mark Dayton made an ambitious push to cover more of Minnesota’s uninsured population.
And Mr Dayton loves to solve challenges by increasing personal income taxes.