Monday, May 2, 2016

The Mercedes AA EV -- MuskMelon's Latest Nightmare -- May 2, 2016


May 3, 2016: the "Fiorina Flop"? Yup

Later, 9:42 p.m. Central Time: literally, less than ten minutes after posting the original post below regarding the new Mercedes AA+ EV, Tesla sent me the following link to their blog: More on this later, perhaps. To the best of my knowledge I have never, ever received an e-mail directly from Tesla. I have no idea how I got on their mailing list. But I have my suspicions.
Original Post
I was gone most of the day, so very little blogging. And then I spent more time with Sophia than usual, so my evening blogging was delayed. This evening, I rode my bike to the new Starbucks. For an evening ride, it's perfect. I can get here in 20 minutes. It looks like it may be less busy than most Starbucks in the evening, or folks just haven't discovered it yet.

As usual, so much to post, I can never keep up.

I don't even know what "oil" or "the market' did today. Last time I looked early this morning, oil was down 3% said to be due to various factors, but as much to do with profit taking as anything,  I suppose. I don't worry about it. It is what it is.

[I just looked: wow. The market was up almost 120 points, and I don't know what oil did during the day, but it's right at $44.79 and slightly "green." Of course, the stories originating from Berkshire Hathaway's shareholder meeting are more annoying than stories of Ted Cruz "taking" delegates without "the common folk" voting. Cruz is making the GOP nominating process look like something we would expect in a banana republic. 

I think the biggest story I was sent today was the Blue Cross' announcement that they will no longer take credit cards for health care premiums. Speaks volumes. Say what you want, ObamaCare is not working out well for any one. I still argue that the GOP needs to stay as far away from ObamaCare as possible. Let the party of Obama sort it out.

I guess the other story that I was sent was a video of the Mercedes new EV. Huge competition for MuskMelon. Folks have to remember that cars are cars and batteries are batteries. And once the luxury car business starts competing with MuskMelon, it's "game over, set, and match." The video is here, but it might take awhile to load. Unfortunately, the video is the only way to access news of this new Mercedes EV.

There really wasn't any other news that caught my eye.

The Political Page

It's very possible the establishment DEMS are getting very, very worried about grandma:
  • nobody, and we mean nobody, is showing up to vote
  • now, polls show that Trump can actually beat Grandma mano a femano 
  • Cruz is about to implode -- it's not just Indiana but his dad is going nuts (calling out to "the body of Christ") and after tonight Cruz' funding dries up
  • now it's the DEMS talking a "brokered convention"
  • once the Indiana results are in tomorrow night, it's all over for CarlyCruz regardless of what the latter says
When Peggy Noonan wrote a couple of weeks ago that this was a very, very strange presidential primary, she had no idea how accurate she would turn out to be.

Statoil With Another Huge Skarston Well -- May 2, 2016

Active rigs:

Active Rigs2986186190209

No wells come off the confidential list Tuesday.

One (1) new permit --
  • Operator: SM Energy
  • Field: Burg (Divide)
  • Comments:
Ten (10) permits renewed --
  • Liberty Resources (5), four ND State wells in Williams County; one Leon permit in Williams County
  • Whiting (2), one Kostelecky permit and one Kessel permit; both in Stark County
  • Hunt (2), one Weflen permit, one Austin permit, in Mountrail County
  • MRO, one TAT USA permit in McKenzie County
Whiting canceled a P Thomas permit in Williams County.

One (1) producing well completed:

Production Numbers -- May 2, 2016

I'm not interested in the price movement per se in this story. I'm posting it because it has some great "benchmark" numbers that might be useful down the road. Reuters is reporting:
OPEC's crude production climbed in April to 32.64 million barrels per day, close to the highest in recent history, a Reuters survey showed.
Iraq's April exports from southern fields increased, as did seaborne exports from Russia, the biggest exporter outside OPEC.
Traders also cited market intelligence firm Genscape's report of a 821,969 barrel rise in stockpiles at the Cushing, Oklahoma delivery point for U.S. West Texas Intermediate (WTI) crude futures during the week to April 29.

The Saudis Know Something About Oil That Most Of Us Don't -- Rick Newman -- Yahoo!Finance -- Nomination For Geico Rock Of The Year Award -- April 2, 2016

Another "fluff" article from Yahoo!Finance with an eye-catching headline: The Saudis may know something about oil the rest of us don’t. Considering they produce 10 million bopd and most of the rest of us don't, I would hope the "Saudis" know something about oil that the rest of us don't. What an incredibly lame headline / thesis.

The writer seems to be overly excited about the "Saudis" monetizing their assets. In fact, they will be monetizing less than 5% of the implied value of Saudi Aramco and they are pretty much monetizing downstream assets. This has nothing to do with selling their oil in the ground, except marginally --- and an incredibly tiny margin at that.

Why they are doing it is anyone's guess. We've talked about this before. But just the fact that they are doing it speaks volumes.

Regardless, Rick Newman, noting that the Saudis probably know something about oil that you and I do not know about has nominated himself for the 2016 Geico Rock of the Year Award. Congratulations.

The Politics Page

The Weekly Standard is reporting:
Hillary Clinton has a very complicated opinion of coal. In March, she proudly declared, "we are going to put a lot of coal miners and coal companies out of business."
Now, she says she wants to see coal "continued to be sold and continued to be mined."
Which is it?
But what is it about the progressives that want to put Americans out of work. She wants to ban fracking, also.  Although her position on fracking is probably complicated, too.

US Unions

Page 2

February 15, 2017: South Caroline Boeing employees reject opportunity to form union

November 12, 2016: from The Wall Street Journal, the fall of the unions paved the way for Donald Trump Working-class whites once had a political home at the union hall; now they've found solidarity in a new populist movement. So much irony in the article. GOP supporting unions, now?

May 2, 2016: Detroit public school teacher sick-out.
A mass of teacher sickouts has shut down 94 schools in Detroit Public Schools today, as teachers protest the news Saturday that the district won't be able to pay them past June 30.
The district enrolls about 46,000 students in 97 schools.
The Detroit Federation of Teachers on Sunday called for the mass sick-out of the district's 2,600 teachers.
And then we wonder why students do poorly on standardized testing.

May 2, 2016: from the WSJ -- unions lose sway over Verizon as landline business shrinks.
Not long after the 2000 merger that formed Verizon Communications Inc., Denny Strigl rushed to Boston to talk wireless employees out of joining a union.
“We fought it tooth and nail,” said Mr. Strigl, who ran Verizon’s wireless operations until retiring in 2009. “There’s a mentality that builds up in a unionized workforce that pits the union against its management. And that’s not the kind of culture that you want in a new startup.”
The episode was one of many over the years in which Verizon sought to keep unions out of its fast-growing wireless business.
The result: the company has avoided work stoppages at operations that employ about 75,000 and generated about two-thirds of its $132 billion in revenue last year.
Of the nearly 40,000 Verizon employees who went on strike April 13, only about 160 worked for the company’s wireless unit.
And, as the company’s landline business has shrunk, so too has unions’ influence on it.

Making The Rounds Today -- May 2, 2016

I have no idea where this came from -- I found it in my e-mail this morning; I have no idea whether it's accurate. It sounds like there's a bit of hyperbole but there's probably a bit of truth in this somewhere:
In advance of the G7 summit later this month, member country’s energy ministers are meeting today in Japan and there is an urgent “real” agenda according to a leading U.S. Oil & Gas expert.
Hint - It’s not Paris climate change accord implementation or phasing out of fossil fuels in favor of solar and wind energy.
Energy ministers (US, UK, Japan, Italy, France, Canada, Germany) are urgently meeting to discuss:
  • an immediate need for G7 members to ramp up investments in oil and gas production capacity to meet the expected rise in oil and gas demand; (current economics have choked all capital investment – companies struggling to survive)
  • how to cope with the “Great Crew Change” as 50% of the oil and gas workforce age out and new tech savvy millennials are needed; (a dwindling group of skilled workers attracted to an industry in turmoil)
  • no new technology development. (needed to bring energy industry into modern era)
“Even Saudi Arabia has repeatedly warned that more investment in projects for future oil and gas production is necessary to keep up with future demand, to provide more stability/continuity to global markets. When the supply and demand balance shifts back to reveal an undersupplied global oil market, we will begin to experience dramatic price increases.”
All's Well That Ends Well
And This Will End Well 
After All, It's RomneyCare, ObamaCare, HillaryCare

From The Boston Globe: arithmetic errors from small rural hospital in Massachusetts will cost the state 10% of its Medicare funding; state loses $160 million.

The background to this story goes back to at least 2013.

This is the story:
  • a Medicare rule that says a state’s urban hospitals must be reimbursed for wages paid to doctors and staff at least as much as rural hospitals
  • Since Massachusetts has only one rural hospital, Nantucket Cottage sets the floor for wage reimbursements. Typically, rural hospitals have lower wages than urban ones.
  • But wages on Nantucket are high because of its remote location and high cost of living. Thus, the rural wage floor established on Nantucket has become a boon for hospitals in the rest of the state.
  • Massachusetts, Connecticut, New Hampshire, and Rhode Island are among only nine states that win under the current system, negotiated in part by Senator John Kerry as part of the national health reform law. Massachusetts is by far the largest beneficiary, followed by California, which receives half as much money
Okay. So, even under the "best" of circumstances, Massachusetts wins (Medicare is a zero-sum game).

But now this, in today's story, back to the first link
  • Nantucket Cottage, the only rural hospital in Massachusetts has nineteen (19) beds
  • someone made a mistake calculating the cost of running that hospital (cost was based on number of employees; number of  hours worked; overtime; etc)
  • that resulted in extraordinary reimbursement from Medicare to this little 19-bed hospital
  • but by law, all hospitals in a state must be reimbursed no less than that paid to rural hospitals
From the linked story:
Simple math errors at a tiny Massachusetts hospital have created big problems for other hospitals in the state, contributing to a potential $160 million drop in federal Medicare payments over the next year.
A loss that steep — 10 percent of Medicare funding for the hardest-hit hospitals — could force layoffs of 2,000 staff, with cuts concentrated outside Boston, according to estimates by the Massachusetts Council of Community Hospitals. 
The quaint 19-bed Nantucket Cottage Hospital, owned by Partners HealthCare System and considered the state’s only rural hospital, has for years had an outsized impact on hospital finances statewide — but usually for the better.
Under nearly impenetrable hospital payment rules, Medicare must reimburse a state’s urban hospitals for employee wages at least as much as it reimburses its rural hospitals. As a result, Nantucket sets the floor for wage reimbursements at hospitals across the state. And because Nantucket’s wages are high, due to its remote island location and steep cost of living, that has created bonuses for many other Massachusetts hospitals in recent years. [See above.]
Not this year. Consultants hired by Partners made several errors that led to lower wages being reported to Medicare for Nantucket Hospital. They overestimated hours, thereby reducing the hourly rate, and did not include enough higher-paid physician hours and overtime pay.
Those mistakes, combined with another smaller adjustment to Nantucket’s wages, would result in a “steep and extraordinarily serious’’ decline in Medicare payments. [General counsel said “the situation is further complicated by the fact that the [Medicare] deadline for corrections has passed.’’
The rates affect the next fiscal year, beginning in October.
It's hard to believe this was a "mistake." My hunch is that in this election year, this will be resolved in Massachusetts' favor: in the Obama administration there is no such thing as a "deadline" that can't be extended or a "red line" that can't be crossed.

And here it begins:
Partners, the largest hospital and physician network in the state, acknowledges it did not catch the consultants’ mistakes when it submitted the data to Medicare in September.
Spokesman Rich Copp said the organization recognized a problem in mid- to late March and sent corrected numbers April 5 — almost two months after the deadline for corrections.
Regardless, he said, Medicare has a responsibility to use the corrected data. “Any other course of action will hurt hospitals in every corner of the state,’’ Copp said.
Hospitals have enlisted the state’s congressional delegation in their appeal.
I can't make this stuff up.

How Lutheran Social Services Benefits From Refugee Influx

It costs "an agency" about $500 to complete the paperwork and provide the initial support for an illegal minor, or some such number. I don't recall the exact number that's been reported, but it's much less than what the agency will ultimately get in return for that initial investment. The Obama administration is budgeting almost $20,000 for every new illegal minor. My hunch is that the administration has a different term for "new illegal minor" but that's another story for another time.

To put that $20,000 in perspective, social security recipients get, on average, around $15,000/year. Female spouses who worked fewer years because of child-rearing get significantly less than their male spouses who had no work interruptions over the years. 

Now, Back To Our Regularly Scheduled Program

Active rigs:

Active Rigs2886186190209

RBN Energy: New England gas pipeline update.
More than 3,000 MW of new, natural gas-fired generating capacity is either under construction in New England or will be soon, but some of the gas pipeline projects that would ease long-standing constraints into and through the six-state region have hit rough patches. Kinder Morgan in mid-April suspended plans for its Northeast Energy Direct project, a “greenfield” pipeline across Massachusetts and southern New Hampshire, and a few days later the state of New York denied the co-developers of the already-delayed Constitution Pipeline—a key link between the Marcellus and New England--a needed water quality permit. The fates of some other major projects in the Northeast are uncertain too. Today, we provide an update on pipelines in the land of Yankees and Red Sox.
We’ve written often about gas pipeline constraints to and through New England, a region with less than one-third the area of Texas but nearly 15 million people, the vast majority of whom believe that Fenway Park is heaven on earth.
New England has been adding a lot of new gas-fired generating capacity, but only modest enhancements have been made to the gas pipeline network that serves the region.
In the unusually cold winter of 2013-14, the lack of sufficient pipeline capacity to meet demand during periods of very high demand sent natural gas prices soaring as local distribution companies (LDCs) with firm transportation contracts took most of the gas and owners of many gas-fired power plants either scrambled for deliverable, high-priced gas or switched to firing their units with fuel oil.