Thursday, September 1, 2016

Thursday Notes And Comments -- September 1, 2016

It appears the entire NDIC website is down. Posted at 4:33 p.m. Central Time. 

Remains down, 7:59 p.m. Central Time.  

One can watch the "hurricane winds" at this site. It looks like the hurricane is coming ashore tonight. Category 1: 75 mph.


Two Amazon stories I might come back to later:
No Transmission Lines, No Pipelines -- Iowa

Court says "no" to wind farm transmission line -- ChicagoBusiness. Data points:
  • high-voltage transmission line
  • Texas-based utility, Rock Island Clean Line
  • $1.8 billion project
  • Iowa wind farms to Illinois
  • 500-mile transmission line 
  • would have moved 4,000 MW, enough to power 1.4 million homes
  • suit brought by landowners
  • three-judge panel unanimous: "the developer did not qualify as a "utility" under state law, and the developer had not met the test that the public would  have beneficial use of the project (like lower CO2 emissions, I guess)
  • project had been in the work for years
  • would have "moved" electricity from the Dakotas, Minnesota, Kansas, and Iowa
  • also, a win for ComEd/Exelon who sees subsidized wind energy as a threat to nuclear energy in Illinois
And, no, it's unlikely the Supreme Court will take the case, regardless of what the developer says.

Meanwhile, the anti-Dakota Access Pipeline movement continues to gain momentum in both North Dakota and Iowa.

Amazon: e-Walmart With FedEx Attached 

See link above.
Starting in September 2015, people in [Wilmington, Ohio] noticed more planes flying in and out of the airport, loading and unloading those black-wrapped boxes. This March, Amazon announced that it was leasing 20 Boeing 767s from Air Transport Services Group, a cargo company that operates out of the air park. Amazon had also negotiated an option to buy nearly 20 percent of the company. “We’re excited to supplement our existing delivery network with a great new provider, ATSG, by adding 20 planes to ensure air cargo capacity to support one- and two-day delivery,” Dave Clark, Amazon’s senior vice president for worldwide operations, said in a statement at the time. Amazon denies wrapping its boxes in black during the trial period.

Two months after the Ohio announcement, Amazon leased 20 more jets from Atlas Air, an air cargo company based in Purchase, N.Y. Amazon has also purchased 4,000 truck trailers. Meanwhile, a company subsidiary in China has obtained a freight-forwarding license that analysts say enables it to sell space on container ships traveling between Asia and the U.S. and Europe. In short, Amazon is becoming a kind of e-commerce Walmart with a FedEx attached.
With any other company, an expansion like this would be preposterous. But Amazon’s growth has been preposterous. In 2010 its annual revenue was $34 billion; last year, $107 billion. In 2010 the company employed 33,700 workers. By this June, it had 268,900. To have enough office space for its swelling headquarters staff, Amazon has swallowed Seattle’s South Lake Union neighborhood, and it’s building three tree-filled biospheres in the city that will allow workers to take contemplative breaks, like so many Ralph Waldo Emersons in Jetsonian luxury. The company is the fifth-most valuable in the world: Its market capitalization is about $366 billion, which is roughly equal to the combined worth of Walmart, FedEx, and Boeing.
Amazon’s ambitions depend on the continued success of its Prime service. For $99 a year, Amazon Prime customers get two-day delivery at no extra charge. Those who sign up tend to spend almost three times as much as their non-Prime peers. The company zealously guards its numbers, but Consumer Intelligence Research Partners estimates that Amazon had 63 million Prime members as of late June—19 million more than the year before.
Amazon keeps subscribers in the fold by lavishing them with perks such as free access to Amazon Video, the Kindle Owners’ Lending Library, and trial subscriptions to the Washington Post, which Bezos, a billionaire many times over, purchased for $250 million in cash three years ago.
But more than anything, Prime members sign up for that fast shipping, which keeps getting faster. In many large cities, subscribers can now get free two-hour delivery on more than 25,000 items they might otherwise have bought at Walgreens or 7-Eleven. For an additional $7.99, orders arrive within an hour.
Some company executives joked that the service should be called Amazon Magic; they went with Prime Now.
I accidentally subscribed to Amazon Prime and love it. In the old days, I would wait until "my cart" reached the number of items necessary for free shipping, buying "stuff" at Walmart if it couldn't wait. With Prime Amazon, it's just like buying at Walmart -- except cheaper and delivered to the door in two days, sometimes in one.

Walmart Cutting High-Paying Jobs

See link above.
Walmart will cut some 7,000 accounting and invoicing positions within its U.S. stores as the discount retailer redeploys workers to improve in-store customer service.

The largest U.S. retailer, also the country’s largest private employer, plans to eliminate those jobs over the next several months. Those jobs are typically occupied by long-term and often higher-paid store employee. [Long term -- think higher paid due to annual salary increases; and, higher cost of health benefits; and pension payments about to begin.]

The benefit for Walmart is that it could then put more workers on the floor helping customers, something infinitely more valuable to the retailer as it looks to give people a reason to shop at its stores rather than on A company spokesperson confirmed that Walmart expects the affected employees are likely to find customer-facing roles at the Walmart store. [This is less likely to have an effect on Amazon, and a greater effect on Target.]

The move follows a test earlier this summer at 500 stores, mostly west of Colorado, to eliminate three administrative jobs related to accounting and invoicing at each store and see if those functions could be replaced by workers in the home office and by machines. The jobs being eliminated involve counting cash or managing invoices for suppliers. Invoicing will be handled by a central office at company headquarters in Arkansas, while money will be counted at each store by a “cash recycler” machine.

Elon Musk Faces Cash Squeeze ... And An Explosion On The Pad -- Let's Call It A Billion-Dollar-Loss -- WSJ -- September 1, 2016

It's possible I will be off the net most of the day, later today. Blogging may be delayed. I may be delayed responding to e-mail and posting comments.  Today's schedule is still in flux. 

Jobs: same spin -- "jobless claims rise, but still near lows."
  • new claims: 263,000, up from 261,000 previous week
  • 4-week moving average: 263,000, down from 264,000 previous report
Buzz on Wall Street: Janet Yellen will base decision on:
  • bank profits; currently "soaring"
  • Friday's August jobs report: mixed reporting; some sites suggest good report; others say differently
  • 3Q16 GDP
With that in mind, what is the current forecast for 3Q16 GDP?
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2016 is 3.5 percent on August 29, up from 3.4 percent on August 25.
The forecast for third-quarter real personal consumption expenditures growth increased from 3.5 percent to 3.8 percent after this morning's personal income and outlays release from the U.S. Bureau of Economic Analysis.
This was partly offset by a decline in the forecast of the contribution of inventory investment to third-quarter real GDP growth from 0.78 percentage points to 0.65 percentage points after Friday's Advance Economic Indicators Report from the U.S. Census Bureau.
For the record, my thoughts on the Fed:
  • at most, "one and done"
  • most "traders" have baked in a Fed rate increase sooner than later
  • the announcement will create six hours of huge market swings (up or down, hard to say)
  • two days after the Fed announcement, the market will have re-set 
  • one week after the Fed announcement, the market will be trending the same direction as before the announcement; Fed rate action will have been "forgotten"
  • it still amazes me how a very small "one and done" rate increase can result in so much chatter
  • by the way, headline in today's WSJ: money continues to leave EU markets (Brexit, et al); for European investors pulling money out of European markets, there are few alternatives; European equity funds have seen outflows for a record 29 consecutive weeks, amid poor earnings, struggling banks, and political risk (Great Britain, by the way, is doing fine); this duration of this outflow eclipses the 27-week run of outflows that ended in February, 2008.
Hanjin Hangs It Up

Being reported everywhere: South Korea's Hanjin Shipping, one of the world's largest shipping lines, stopped taking new cargo, and US ports began turning away its ships after it filed for bankruptcy protection in Seoul. Hanjin is the majority owner of the biggest Long Beach terminal. Something tells me this story may have long legs, stretching well past the US Christmas season, 2016. I'm not sure this will impact dock workers: there is always a long line of ships waiting to get into the Long Beach port. One would think that dockworkers will be greatly affected, but hard to say.

Active rigs:

Active Rigs3376194184192

RBN Energy: update on US condensate.

It Never Quits

Elon Musk faces cash squeeze a Tesla, Solar City. Big story over at The Wall Street Journal.
Meanwhile, there is a very, very small update on electric rates in Nevada reported by Reuters, where the current problems apparently began (or at least became more transparent):
SolarCity Corp said on Wednesday it was disappointed with a decision by Nevada regulators to exclude the company from a proceeding to decide how existing customers would be compensated for the excess energy their rooftop solar panels sent back to the power grid.
Nevada's Public Utilities Commission had voted unanimously in February to require households with solar panels to move to a new, less generous rate structure.
NV Energy, a Nevada utility owned by billionaire investor Warren Buffett's Berkshire Hathaway Inc, asked the commission in July to maintain previous rates for customers with solar systems installed before Dec. 31, 2015. SolarCity last week requested permission to take part in the proceeding on whether or not to grandfather these customers.
Same day, later: An explosion rocked a SpaceX launch site in Florida this morning, shaking buildings several miles away. The company was preparing for a test firing, considered routine, in advance of a planned Saturday launch from Cape Canaveral Air Force Station. Elon Musk says Falcon 9 blast happened during fueling. First, chariots on fire, now this.

In addition to everything else, the SpaceX explosion also destroyed a $200 million Facebook satellite.

Later, Israel also lost a satellite:
Israel's Space Communication Ltd said on Sunday it could seek $50 million or a free flight from Elon Musk's SpaceX after a Spacecom communications satellite was destroyed last week by an explosion at SpaceX's Florida launch site.
Officials of the Israeli company said in a conference call with reporters Sunday that Spacecom also could collect $205 million from Israel Aerospace Industries, which built the AMOS-6 satellite.
SpaceX has more than 70 missions on its manifest, worth more than $10 billion, for commercial and government customers.
Let's call it a billion. MuskMelon says all-in-all about $779 million.

Later, September 5, 2016, now the WSJ weighs in -- this SpaceX story has legs, and it has huge implications for the US space program. Wow:
The explosion of a Space Exploration Technologies Corp. rocket during ground tests last week has added urgency to a key question for NASA: When will U.S. spacecraft be ready once again to carry astronauts into orbit?
The accident involving billionaire Elon Musk’s company turned its roughly 15-story-tall Falcon 9 rocket into a fireball, destroyed a commercial satellite on board and damaged the launchpad at Florida’s Cape Canaveral Air Force Station.
It is too early for investigators to conclude exactly what caused the accident or what it means for SpaceX, as the Southern California company is called, or its commercial customers, who already are fuming about launch delays.
But the incident has space experts questioning projections that U.S.-built boosters and capsules, including the Falcon 9, are likely to start ferrying U.S. crews to the international space station in less than two years.
If that forecast turns out to be too optimistic, top officials of the National Aeronautics and Space Administration might decide to reserve extra seats, costing more than $81 million each, on Russian space vehicles as a stopgap.
 SpaceX: too big to fail?

September 7, 2016: Tesla self-drives Dutch passenger into tree and then catches fire. Tree/Tesla, 1; passenger, 0.

September 8, 2016: SpaceX could be placed on the injured reserve list for 9 - 12 months according to its chief competitor. And that's an unbiased opinion, no doubt. LOL.


Afternoon trading: market flat to down 10 points. It looks like we're at risk of a market correction. Fewer and fewer companies hitting new highs, but then again, very few new lows. NYSE --
  • new highs: 88 -- BRK-B (a big whoop);
  • new lows: 18
The Open: up a bit on the opening, up about 20 points. 

This is not an investment site. Do not make any investment, financial, travel, job, or relationship decisions based on what you read here or think you may have read here.



September 2, 2016: Encana up another 4% today. 

Original Post 

Motley Fool advice. On June 13, 2016, Motley Fool clearly said stay away from Encana.  Since then Encana has been hitting new 52-week highs. On June 13, 2016, shares in Encana were trading for $8.00. Yesterday, Encana was trading for $9.54. At the time, Motley Fool noted that Encana's debt exceeded Encana's market cap. Today, Encana's market cap is $8 billion; its debt is $6 billion (Yahoo!Finance). In its most recent corporate presentation Encana, the company reports successful efforts to retire debt. I have never invested in Encana, and never plan to invest in Encana (simply because I am overweighted in energy and very happy with my current holdings), but I report the story to help me understand US energy industry and help put the Bakken into perspective. Following this story, by the way, reminded me of the size of the Piceance; and the major players involved.

The Political Page

Two things are striking at the moment: one is not seeing much of Hillary lately. She is simply not on the campaign trail. And when she is heard, it is usually in "reaction" to something Trump has said or done.

The second thing that is interesting is the degree of negativity each candidate arouses. It's always been a story for both. Large numbers of Americans have difficulty with both candidates. But the "negative" ratings for Trump have been slightly more remarkable. Barbara Streisand, for example, promises to leave the US if Trump is elected president.

The USC - LA Times poll has recently shown slippage for Hillary; improvement for Trump.

With all that in mind, it was not surprising to see another poll in which Trump leads Hillary among likely voters. What was surprising was the percentage of likely voters showing support for both candidates: the total adds up to .... drum roll ... 79%. Wow. Seventy-nine percent. That leaves 21 percent undecided or favoring another candidate.

The other eye-opener: Hillary's support among "likely-to-vote" Americans: 39%. Less than 70 days until the election.

A few last thoughts:
  • the debates will hit all-time viewing records
  • the debates will sway the undecided; have minimal effect on the current Hillary/Trump supporters (they are both "cult" personalities)
  • the huge African-American support that propelled / kept Obama into / in office will not be there for Hillary
  • a lot of folks responding to these polls are "embarrassed" to say they are going to vote for Trump; not so much for those saying they would vote for Hillary