Thursday, September 7, 2017

Why I Love To Blog -- Reason #476 -- September 7, 2017

Earlier today I posted:
ObamaCare bailout: insurers have nothing to worry about. Now that Trump is cutting deals with Pelosi and Schumer, the health insurers will do just fine, thank you. It appears the insurers will continue to get their money from DC to fund ObamaCare, but at the same time, the insurers will reduce coverage, cut and run.
I wrote that tongue-in-cheek. I surmised it was going to happen but did not have a link, nor was I even interested. Now tonight, while reading today's on-line edition of The WSJ this story: a plan to fund health insurer payments coalesces. A deal to fund insurer payments critical to the health law took shape, even as conservative lawmakers and the White House push an alternative.
The contours of a deal to fund insurer payments critical to the Affordable Care Act took shape Thursday, even as conservative lawmakers and the White House pushed an alternative plan to repeal parts of the law.
Senate Health Committee Chairman Lamar Alexander (R., Tenn.) said he hoped to reach an agreement with Democrats by the end of next week on the insurer payments, which offset subsidies they provide low-income consumers.
At a hearing Thursday, Mr. Alexander suggested he would be willing to authorize the subsidy payments for multiple years, as Democrats are demanding, in exchange for “structural changes” to the ACA, also called Obamacare.
And so it goes.

For the record, I've lost all interest in ObamaCare. I still post updates but however it turns out, I no longer care. From an investor's point of view, it's another open book test. Perhaps the most interesting question is whether RINOs will even dare bring this issue up in the 2018 mid-term elections.

Thursday Night News Dump; The End-Of-Day Market, Energy, And Political Page, T+230 -- September 7, 2017

Florida nuclear plants shutting down: link here, data points:
  • two nuclear plants: Turkey Point; St Lucie
  • Florida Power & Light
  • Florida's only operating nuclear power plants
  • can you say Fukushima? not too worry -- 
    • the nuclear sites are among the strongest in the United States and are designed to withstand heavy wind and storm surge. Turkey Point's nuclear reactors are enclosed in six feet of steel-reinforced concrete and sit 20 feet above sea level. Nuclear plants also have significant redundancies that serve as back-ups to back-ups
  • specific information as to when plants would be shut was not provided by the company, but US NRC said:
    • Turkey Point should shut down Friday evening;
    • St Lucie would go off-line 12 hours later
And then I guess Florida will need to rely on solar and wind energy (and there will be a lot of wind energy -- just not particularly useful). I know Algore would go with solar and wind.

Hartford, CT, ready to declare bankruptcy. WSJ story here. $50 million pales in comparison to what is about to happen in Florida, what happened in Texas. Wouldn't it be great if Amazon selected Hartford for HQ2. "Doomsday: US cities" tracked here.

Amazon HQ2: to employ up to 50,000 people. Sounds like a lot. On the other hand, the Foxcconn facility that will be built in Wisconson with a $3 billion taxpayer price tag might hire 3,000 people. Quick, how many people does Foxconn employ at their Zhengzhou ("Pat, is there a "z"? I would like to solve the puzzle.")? Answer: 250,000 people are employed at one plant. Source: WSJ.

The Mideast.  Rules of engagement (ROE) have changed. I don't know if folks recall this story. But some years ago when ISIS celebrated the taking of some Iraqi/Syrian city, they had a huge "parade" of scores (hundreds?) of Toyota military vehicles. The USAF could have taken out 100's of military vehicles but President Obama's ROE ruled it out. Not this time. Stripes is reporting that "US warplanes picked off ISIS fighters drawn to a stranded convoy like moths to the flame."

Ah, yes, here it is. It was in West Anbar province where ISIS held a massive parade celebrating victory in Ramadi, May 18, 2015. See photographs below: USAF could have taken out this whole group with little collateral damage but the administration said "no."

UPDATE, September 14, 2017: apparently the US blinked. The Wall Street Journal is reporting that the ISIS convoy reached militant-held Syria after US-led coalition stops strikes. The US-led coalition ceased airstrikes at the request of the Russian government. Wow. Since much of the convoy was made up of wives and children perhaps it was the right thing to do. Apparently the convoy was made up of buses. Even US warriors have (moral, ethical) trouble taking out yellow school buses.
Islamic State militants stranded in the Syrian desert for two weeks have reached ISIS-controlled territory in eastern Syria after the U.S.-led coalition ceased its airstrikes on the convoy’s route, according to opposition activists.
The convoy of buses traveled across Syria as part of a controversial deal brokered in August by the Lebanese militia group Hezbollah that allowed 600 people—Islamic State fighters and their families—to withdraw from the Lebanese border in southwestern Syria and head toward its border with Iraq.
Following News That SRE-Oncor Deal Remains On Track

Around $102/share in January, 2017; now closing in on $120/share.

In 1998, the quarterly dividend was 39 cents/share; this year, the dividend is running around 82 cents/share. During that time period, the dividend has dropped as low as 25 cents/share.

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

Active Rigs Continue To Trend Down -- September 7, 2017

Active rigs:

Active Rigs543675196184

Three new permits:
  • Operator: Oasis
  • Field: Alkali Creek (Mountrail)
  • Comments: permits for a 3-well Dawson pad in SWSSE 12-154-94
Two permits canceled:
  • Lime Rock (2): two Raphael Stroh permits in Dunn County
Dry hole:
  • 30951, dry, EOG, Van Hook 70-1411H;

US Crude Oil Inventories INCREASED SIGNIFICANTLY -- September 7, 2017

This will extend the time to re-balance for a few more months.

From the weekly petroleum report.

US commercial crude oil inventories (excluding the SPR) increased by 4.6 million bbls. In the past 19 weeks, there have only been three weeks in which crude oil inventories rose, and, by far, this was the greatest increase ... and the US summer driving season has come to an end.

At 462.4 million bbls, US crude oil inventories are in the upper half of the average range for this time of year (the report did not say over how many years the "average" was determined). The average was pulled up significantly by the Saudi surge between 2014 and 2016, so saying US inventories are in the upper half is not good news for oil bulls.

Following the report, the price of WTI reversed its upward trend, and is now trading below $49 again, down about one-half percent.

Interestingly, total motor gasoline inventories decreased 3.2 million bbls last week despite the fact that Texans were not driving because they had run out of gasoline, post-Harvey. Regardless, gasoline inventories remain  near the upper limit of the average range, so if you think you are over-paying for gasoline ... guess what, you probably are.

Weeks to re-balance (to see how this works, previous "re-balancing" links will explain it:

Weeks to RB
Week 0
Apr 26, 2017

Week 1
May 3, 2017
Week 2
May 10, 2017
Week 3
May 17, 2017
Week 4
May 24, 2017
Week 5
May 31, 2017
Week 6
June 7, 2017
Week 7
June 14, 2017
Week 8
June 21, 2017
Week 9
June 28, 2017
Week 10
July 6, 2017
Week 11
July 12, 2017
Week 12
July 19, 2017
Week 13
July 26, 2017
Week 14
August 2, 2017
Week 15
August 9, 2017
Week 16
August 16, 2017
Week 17
August 23, 2017
Week 18
August 30, 2017
Week 19
September 7, 2017

At the current average rate of decline, it will still take 32 weeks to re-balance.

Other data points of interest from the weekly petroleum report:
  • refinery inputs averaged 14.5 million b/d; about 3.3 million b/d less than the previous week's average (due to refineries shut down due to Hurricane Harvey)
  • refineries operated at 80% capacity vs usual 97%+ 
  • crude oil imports hardly decreased at all -- testament to a lot of hard word, American ingenuity
Refinery runs: hit record low due to Hurricane Harvey - link here. Data points:
  • refinery utilization rates dropped 16.9 percentage points to 79.7 percent of total capacity
  • lowest level since data started being kep in 1992
  • crude oil inventories rose 4.6 million bbls; forecast for 4 million bbl
 Alan Turing: The Enigma
inspired the film, The Imitation Game
Andrew Hodges
c. 1983, 2014

As mentioned earlier, I am in my Margaret Sanger phase. I had not expected this phase to last long, but I may be surprised.

This passage from Andrew Hodges' biography of Alan Turing seems to dovetail exactly with excerpts from the biography of Margaret Sanger and the biography of "the pill." From Alan Turing: The Enigma, page 259:
In the spring of 1941 Alan developed a new friendship. It was with Joan Clarke, a fact which presented him with a very difficult decision. First they had gone out together to the cinema a few times, and spent some leave days together. Soon everything was pointing in one direction. He proposed marriage, and Joan gladly accepted.
Many people, in 1941, would not have thought it important that marriage did not correspond with his sexual desires; the idea that marriage should include a mutual sexual satisfaction was still a modern one, which had not yet replaced the older idea of marriage as a social duty. One thing that Alan never questioned was the form of the marriage relationship, with the wife as housekeeper. But in other ways he took a modern view, and above all was honest to a fault. So he told her a few days later that they should not count on it working out, because he had "homosexual tendencies."
And then several pages of most fascinating reading about a wonderful relationship.

By the way, in the movie The Imitation Game, Keira Knightley plays Joan Clarke, "who became engaged to Turing." 

Reminds me of Tinker, Tailor, Soldier, Spy.

The Proudest, Loneliest Fool, Charlie Rich

From wiki:
Charlie Rich and his wife were driving to Florida for a vacation after seeing their son Allan perform with Freddy Fender at Lady Luck Casino in Natchez, Mississippi when he experienced a bout of severe coughing.
After visiting a doctor in St. Francisville, Louisiana, and receiving antibiotics, he continued traveling until he stopped to rest for the night. Rich died in his sleep on July 25, 1995, in a Hammond, Louisiana motel; he was 62 years old. The cause of death was a pulmonary embolism. He was buried in the Memorial Park Cemetery in Memphis, Tennessee.
1995, he died. I saw him in concert in 1974, or thereabouts. Spectacular show. Incredible seats. 

The Market And Energy Page, Part 2, T+230 -- September 7, 2017

Disclaimer: this is not an investment site. In addition, the mixing of facts and opinions is a recurring feature on the blog. If something on the blog seems wrong, it probably is. If this information is important to you, go to the source.

Whiting has announced a reverse stock split, any whole number between 1:2 and 1:6.  They better go 1:6 so they don't have to do it again any time soon.

Wow, catching a wave. US "final estimate" of 2Q17 productivity rose 1.5 percent vs the 1.3 percent increase expected. This is leaving the CNBC crowd perplexed; not supposed to happen. The government also revised up a 2Q17 GDP growth to 3.0 percent from a 2.6 percent pace. Labor costs: barely budged: up a paltry 0.2 percent. Compare with ObamaCare costs. LOL. A bunch of numbers at the link but bottom line: output per worker surged at a 4.0 percent rate, the fastest since the third quarter of 2014, after rising at a 1.8 percent at the start of the year.

GDP Now: Latest forecast: 2.9 percent — September 6, 2017.
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 2.9 percent on September 6, down from 3.2 percent on September 1.
The forecast of third-quarter real consumer spending growth declined from 3.0 percent to 2.7 percent after yesterday's light vehicle sales release from the U.S. Bureau of Economic Analysis (BEA). The forecast of the contribution of net exports to third-quarter real GDP growth increased from -0.24 percentage points to -0.14 percentage points after this morning's international trade release from the U.S. Census Bureau and the BEA. 
30-year mortgage rate hits another 2017 low. Previous low was reported August 24, 2017; now, less than a month later, another low. Data points:
  • 30-year fixed-rate mortgage: 3.78% with 0.5 point
  • down from previous week: 3.82% 
  • one year ago: 3.44%
10-year Treasury: apparently it also hit a new 2017-low
  • for the second consecutive week, a new low
  • today: so low, I included the link (dynamic link): 2.06%
  • I couldn't believe it; and now it's being reported the 10-year Treasury is below 2.05%
  • this will really confuse Goldman Sachs
What's the market doing with all this good news? Futures went from "red" to "green."

First time jobless claims: spike to nearly 300,000. Data points:
  • at 298,000 -- the number jumped 62,000
  • highest in five years
  • driven by Hurricane Harvey
  • the 4-week average rose to 250,250 but this week's number and the post-Irma number will eventually pull the 4-week average to new records 
XOM CEO: our distribution systems are as full as they can be. Link here to a CNBC video. We'll know in a couple of hours if EIA numbers confirm that -- when the weekly petroleum data is reported. Interestingly enough, in our area (DFW, TX), the XOM station in our neighborhood has been without gas since September 1, 2017, Friday, when Hurricane Harvey hit landfall. The Shell station across the street was back in business almost immediately, though with intermittent supply outages. 

The Political Page, Part 2, T+230 -- September 7, 2017

Sweet spot for investors: when an alt-right President starts cutting deals with the alt-left. It's very possible, investors may be talking about the "sweet spot" six months from now. Now that Trump is making deals with Pelosi and Schumer, it's hard to say where this will end. Trump has always had big plans; now he is working with idiots who think the country has the deep pockets to pay for these things. [Later, I see the European Central Bank is "keeping the door open" to even more stimulus. If this is not an open-book test, I do not know what is.]

Payback: I don't think I will post the link -- I'm really not all that interested -- but for the archives:  the Dems in the US Senate are looking to stop a Federal judge nomination of a UND (Notre Dame, not North Dakota) law professor because she's ..... a Catholic. I can only assume US Catholics (and, of course the Pope) are watching with horror. Haven't we seen this movie before? I guess that separation of church and state was just so much talk. Heaven forbid a Catholic on the Federal bench. For the Dems, Antonin Scalia was was a bridge too far.

Perhaps a Tibetan priest?

Zen, Twin Peaks

Warning: I'm in my Twin Peaks phase. Bear with me. It won't last more than a few days. But something about Washington (DC) has brought me full circle to the series.

The Market, Energy, and Political Page, T+230 -- September 7, 2017; France Will Ban All Oil Exploration By 2040

ISIS defeated: edge goes to Syria's President Bashar al-Assad; next up: the American-led Kurds. From The WSJ:
The Syrian regime’s successful offensive in Deir Ezzour this week pushed it ahead in the race against America’s Kurdish-led allies over who will inherit Islamic State’s remaining Syrian real estate.
With the extremist group losing ground fast, President Bashar al-Assad has emerged in his strongest position since the Syrian uprising began in 2011. Yet large parts of the country remain outside his reach, including an American-protected zone run by the Kurds in northeastern Syria and a smaller Turkish occupation zone nearby.
The question now is where precisely the line between regime and Kurdish areas will be drawn after Islamic State’s defeat and whether it will solidify into a semi-permanent partition of the country or spark a new bout of violence that could force the U.S. to make difficult choices.
Death by a thousand cuts: what Congress could not do, the marketplace will. From The WSJ:
ObamaCare insurer in Virginia to scale back planned expansion.  Optima Health says it's plan to expand is tied to other insurers' withdrawals from Virginia's exchange as well as key policy questions in Washington.
ObamaCare bailout: insurers have nothing to worry about. Now that Trump is cutting deals with Pelosi and Schumer, the health insurers will do just fine, thank you. It appears the insurers will continue to get their money from DC to fund ObamaCare, but at the same time, the insurers will reduce coverage, cut and run.

Road to Paris: France plans to end oil output by 2040 with exploration ban. Link at Bloomberg. Data points and comments:
  • will stop granting new permits next year
  • the move will turn down 40 exploration requests already made
  • this actually includes where France has oil, like French Guiana where Total has a stake
  • big deal? Not. France pumped 6 million bbls of oil in 2015, covering just 1% of its demand
  • this is France's Macaroni simply confirming the obvious: France is unable to meet its own crude oil needs when oil trades at $45
  • this was predicted back on May 18, 2013, at "Europe at a Tipping Point" over at "Big Stories": on that date, first line at that original post: Europe may be the only continent in the world to depend on imported energy -- EU Council President.
  • it looks like France is leading the way 
How bad is it for Europe? from the link above, 2013:
European council president Herman Van Rompuy has voiced concern about Europe's "energy dilemma".

Opening the European business summit in Brussels on Wednesday, he said, "It's now becoming clear; eventually Europe may well be the only continent in the world to depend on imported energy.

"Already by 2035 our dependence on oil and gas imports will reach more than 80 per cent."
2040: EU and California are fighting climate change on their own; China and US have moved on.

FWIW: Libya's Sharara oil field reopens after pipeline blockade lifted. No link; no longer interests me.

Down To 55 (Again) -- September 7, 2017

Active rigs:

Active Rigs553675196184

RBN Energy: Plains All American targets transportation and facilities growth the counter market volatility.

The Daily Note

The Trump Presidency (201 - 300)
The Third 100 Days
The Third 30 Days + 10 (261 - 300)
The Second 30 Days (Days 231 - 260) -- this page
The First 30 Days (Days 201 - 230)

The Trump Presidency (201 - 300)
The Second 100 Days
 The Third 30 Days + 10 (161 - 200)
The Second 30 Days (Days 131 - 160)
 The First 30 Days (Days 101 - 130)

The Trump Presidency (101 - 200)
The First 100 Days
The Third 30 days + 10
The Second 30 Days 
The First 30 Days

Between Election And Inauguration (1 - 100)
The Third 10 Days

October 8, 2017, T+260: it appears Trump will roll back contraceptive requirements mandated by ObamaCare. Not sure how this stands up legally but will speak to his base.

October 7, 2017, T+259: it looks like Trump will de-certify Iran's compliance with the Obama agreement. Further upheaval in the Mideast. Saudi buys US THAAD missile defense system for $15 billion. Saudi in existential crisis.

October 6, 2017, T+258: sounds like North Korea is starting to get spooked; now trying to justify its need for a nuclear program.

October 5, 2017, T+257: tea leaves suggest that if SecState Tillerson continues to negotiate with the North Koreans, Haley could be the next SecState -- before the end of September. It didn't take long for Trump to fire Tom Price once he tired of him.

October 4, 2017, T+256: it turns out the Las Vegas shooter broke the law, according to the mainstream media when he used a "assault rifle" that has been banned by the US since at least 1986. Congress is now looking to see how the law can be improved. Maybe make it illegal for a mass murderer to take his own life. 

October 3, 2017, T+256: three points regarding the Las Vegas shooter --
  • a) the individual did not just "snap"; he obviously planned this for years
  • b) the gun he used was banned in 1968; more gun laws would not have stopped this
  • I don't see a need for a "silencer/suppressor" bill -- but that issue has nothing to do with the Las Vegas shooting -- how Hillary can connect the two is beyond me
October 2, 2017, T+255: sniper/shooter in Las Vegas injures at least 400; kills at least 50.

October 1, 2017, T+254: the Puerto Rico meme -- a destroyed island. The major shows up in a custom-made t-shirt emblazoned with "We Are Dying." Apparently the political machine is working in Puerto Rico. Also turns out that that "the unions" in Puerto Rico refuse to drive trucks to deliver life-saving water and food.

September 30, 2017, T+253: Puerto Rico recovery efforts continue. Making incredible progress considering. No major disease outbreak reported yet; have not heard much regarding deaths from the storm. US Department of Defense taking charge. Trump doesn't waste time. Fired Sec/HHS Tom Price: failed in his job to repeal/replace ObamaCare.

September 29, 2017, T+252: Looks like NFL players will stand for the national anthem. Tom Price slinks back home -- resigns as HHS secretary. Had nothing to do with government flights; all about ObamaCare. Tom Price, a congressional insider, was hired to "repeal ObamaCare." He failed. He was fired. Talk that he might be fired started yesterday; less than 24 hours later, he's out. Trump doesn't waste a lot of time. North Korea, others are watching. 

September 28, 2017, T+251: For the book tour --

September 27, 2017, T+250:

September 26, T+249: huge NCAA scandal. Black lives matter. LOL.

September 25, 2017, T+248: Wow, I've never felt so liberated. For the past several years I've always looked forward to SNF and MNF. It was becoming an obsession to watch the NFL. But no more. I have no desire to watch professional football any more. And last night I felt so incredibly liberated. It as really quite weird how liberated I felt. I actually had more time with Sophia because I did not watch the football game.

September 24, 2017, T+247: NFL Sunday -- let's see if the players, coaches, owners unify on this -- as the commissioner suggested -- and they all turn their backs on the US flag or simply remain sitting. I assume many, many US veterans of foreign wars will remain sitting -- those in wheelchairs.

September 23, 2017, T+246: a couple of days old --

September 22, 2017, T+245: a couple of days old -- at least five terrorist attacks in London in the past year; "Rocket Man" is lobbing ICBM's over Japan; and, Theresa May has the audacity to tell us that Donald Trump is the world's worst enemy. Or at least that's what we're being led to believe.

September 21, 2017, T+244: a couple of days old --

September 20, 2017, T+243: CNBC contributor had it exactly right today -- whether GOP repeals ObamaCare or whether it doesn't, investing in US health care companies is a no-brainer.

September 19, 2017, T+242: Hillary says she is considering challenging the 2016 election results. LOL. Will this lady ever leave the stage?

September 18, 2017, T+241: the Brits are telling us that Trump's comments on the most recent London terror incident were based on speculation. Pretty good speculation. Today we learn that "authorities" had arrested this terrorist two weeks ago and let him go. From the linked story, "it also emerged police allowed the first suspect to slip through their fingers just a fortnight earlier." We've seen this movie before.

September 17, 2017, T+240: two notes --
  • London pail bombing: Trump said Scotland Yard had the suspect "in their sights"; PM Theresa May didn't exactly contradict that, but said Trump had no way of knowing; the suspect was caught in less than 12 hours; something tells me that Trump was correct
  • Triangulation: with regard to "Dreamers" and DACA, Trumpsters stand behind their man; Democrats, meanwhile turn on Pelosi and Schumer. LOL. So, exactly who should the "Dreamers" be supporting? The Dems or Trump? LOL. Open book test.
September 16, 2017, T+239: how much did President Obama hate the US? He pardons an individual given 35 years prison time for treason. Wow. He must have gotten a huge "donation" from some wealthy donors for that pardon.

September 15, 2017, T+238: Special counsel Mueller worked on Middle East / Russian project pushed by Flynn. Mueller investigating Flynn. Mueller never listed this on his resume prior to getting the job to investigate Flynn. One big incestuous swamp.

September 14, 2017, T+237: alt-left Congressional leaders and alt-right president come to agreement on "Dreamers." That's what happen when GOP Congress won't support their own president.

September 13, 2017, T+236: US Supreme court continues to block lower-court rulings, after lower-court judges usurp legislative branch of state governments, and even block US executive actions that had been "okay" under President Obama.

September 12, 2017, T+235: all three major indices set new records yesterday. No mention of the Trump rally.

September 11, 2017, T+234: Hurricane Irma not as bad as predicted but Algore will make the most of it. Trump rally continues, Dow futures up 120 points. Hillary continues to whine. Later: a US Supreme Court justice re-instated Trump's travel ban; says lower court wrong; US Supreme Court will hear arguments beginning October 10, 2017.

September 10, 2017, T+233: Hurricane Irma hits west coast of Florida.

September 9, 2017, T+232: I'm watching thousands of terrified Floridians who will probably lose everything trying to find shelter and Hurricane Irma hasn't already hit them yet, and then I think of the seventeen GOP senators that voted against helping Texas who are struggling to recover from Category 5 Hurricane Harvey. One wonders if these 17 will vote against helping Florida after this is all over? Trump gives $1 million of his own fortune to help Texas, and 17 GOP senators wouldn't even spend other people's money to help Texas. Pretty cold-hearted. Reptilian.

September 8, 2017, T+231: some say Trump is teaming with Dems to permanently eliminate the "debt ceiling" so as to get it "off the table" in preparation for tax reform. It's my understanding that Paul Krugman has always favored removing the debt ceiling.