Thursday, December 12, 2019

Boris Back? In A Blowout? -- December 12, 2019

Futures Mean Squat

After a record-setting day today -- and an incredible day by any standard, Dow futures tonight up an amazing 87 points. This is mostly a "hangover" from the close. We'll have to wait until 5:30 a.m. to see if the surge holds.

The Sports Page

Going into the second day of the President's Cup: US is trouble.

TNF: Jets vs Ravens.
Brexit Or Bust!
First polls suggest Boris will win by a landslide in UK. If so sayonara, EU.

Trump Controls The Timeline

China-US tariffs. I am absolutely convinced Trump is out-playing Ronaldus Magnus. Bringing down the Berlin Wall is hard to beat, but taking out #1 and #2 (ISIS) pretty good. Just before he blew himself up, blowing up three innocent children at the same time:

Impeachment, St Greta, And All That Jazz

Powerline, the week in pictures.

Fuzzy Math
What a doofus!

Dems Blame White Supremacists f For Latest Mass Shooting

African-Americans ambush / kill Orthodox Jews in New Jersey. Dems blame white supremacists. Okay.

Meager Report Today; No New Permits; Six Permits Renewed -- December 12, 2019

Active rigs:

Active Rigs5368514165

No new permits today.

Six permits renewed:
  • Bruin (4): three Fort Berthold permits, Dunn County; and, one Storhaud permit, Williams County;
  • MRO: one Regina USA permit in Dunn County;
  • Slawson: one Bazooka Federal permit in Mountrail County
Whiting cancels another permit:
  • One Periot permit in Williams County
ND Supreme Court News

From wiki:
Gerald Wayne VandeWalle (born August 15, 1933) is the Chief Justice of the North Dakota Supreme Court.
Justice VandeWalle was born in Noonan, North Dakota and graduated from the University of North Dakota in 1955 with a bachelor of science degree in Commerce. While attending the University of North Dakota he joined the Lambda Chi Alpha fraternity. He then received a juris doctor degree from the University of North Dakota School of Law in 1958.
He has served on the Supreme Court since 1978 and has been the Chief Justice since 1993. He is the longest-serving incumbent Chief Justice in the United States. He is also the longest-serving Chief Justice in North Dakota history.
Now this:
ND Supreme Court Justice Jon Jensen will be the court’s next chief justice, effective January 1, 2010. He was appointed to the court by Gov. Burgum in 2017, and plans to run for a full 10-year term in 2020. He garnered 39 votes to Justice Lisa Fair McEvers’ 16.

Notes From All Over, Part 3 -- December 12, 2019

India's huge carbon footprint, not getting any smaller: link here.

In the U.S. Energy Information Administration’s International Energy Outlook 2019, India has the fastest growing rate of energy consumption globally through 2050.

By 2050, EIA projects in the IEO2019 Reference case that India will consume more energy than the United States by the mid-2040s, and its consumption will remain second only to China through 2050.

Long-term energy consumption projections in India are uncertain because of its rapid rate of change magnified by the size of its economy. The Issue in Focus article explores two aspects of uncertainty regarding India’s future energy consumption: economic composition by sector and industrial sector energy intensity. When these assumptions vary, it significantly increases estimates of future energy consumption.

FOMO -- December 12, 2019

FOMO: fear of missing out. Panic buying? All three indices hit new all-time highs based on a single tweet from President Trump. Someone has to ask: is he abusing his power?

Impeachment? What impeachment? Bring it on. US to meet with China. Markets surge.

Recession right around the corner: survey of US CFOs predict recession in 2020 -- CNBC crawler earlier this morning. It would be interesting to see if they are buying or selling today.

Tesla: third general counsel in last year calls it quits. The story sounds bad but when reading between the lines, it's a nothingburger.
While Tesla's stock price is holding up well into year end, the company's notorious insider defections continue. Jonathan Chang - Tesla's third general counsel in the past year - has now left the company. According to the Detroit News, Chang had just been promoted to the role in February and is leaving Tesla to take on the GC role at startup company SambaNova.
Chang joined Tesla back in 2011 and was put into the GC role after Dane Butswinkas, who was the "adult in the room" hired to help clean up Tesla's legal mess, lasted only two months (~60 whole days) at the company. Preceding Butswinkas was Todd Maron, Elon Musk's former divorce attorney, who had the role since 2014.
Jobs, first time unemployment claims, link here: two year high. Thanksgiving week.
Initial claims for state unemployment benefits surged 49,000 to a seasonally adjusted 252,000 for the week ended Dec. 7, the highest reading since September 2017, the Labor Department said on Thursday. The increase was the largest since August 2017.
Jobs, link here:
  • prior: 203K
  • forecast, consensus: 213K
  • actual: 252K
Natural gas, weekly fill rate: link

Notes From All Over, Part 2 -- December 12, 2019

Santa Claus rally: all three major indices hit new all-time highs. 

Canada:Chevron's LNG exit adds to Canada's energy struggles -- Bloomberg. Canada: closed for business. I'm not being snarky about this but what can one say, when Bloomberg writes this: The move comes after several large multinational energy companies have either left or reduced their presence in Canada in recent years. From the linked article:
Abundant natural gas resources, an all-electric plant and just a nine-day hop to energy-hungry Asian markets were not enough to convince Chevron Corp. to pursue its Kitimat gas export project in western Canada, marking a further blow to the country’s beleaguered fossil fuel industry.
The U.S. oil giant called time on the liquefied natural gas plant on Wednesday, saying it plans to sell its 50 percent stake and that the project “will not be funded by Chevron and may be of higher value to another company.” Woodside Petroleum Ltd., its partner, is also seeking to sell a share in the project.
For Chevron, it’s a decision to write off years of planning as the global LNG industry gets crowded, gas prices keep slumping and the San Ramon, California-based company focuses on areas like the Permian Basin in Texas. But for Canada, it’s a bigger hit: billions of dollars of potential investment, and a much-needed long-term outlet for its gas to foreign markets.
The move comes after several large multinational energy companies have either left or reduced their presence in Canada in recent years, including Norway’s Equinor ASA, France’s Total SA and ConocoPhillips. Independent producers such as Devon Energy Corp., Apache Corp. and Marathon Oil Corp., as well as pipeline giant Kinder Morgan Inc., have gotten in on the act, too. Even Encana Corp., a Canadian company born out of the nation’s 19th-century railway boom, plans a move to the U.S.
San Ramon, CA: by the way, when does Chevron announce it's exiting California altogether. Do a google search. Chevron moved from out of San Francisco to San Ramone back in 1999 or thereabouts. Since then, Chevron has moved more and more operations to Houston. They are about to complete (it may be completed) one of the tallest buildings in Houston -- it will be the first 50-floor building in Houston built in many, many years. Thirty years? I don't recall. But do a google search. Chevron's California footprint continues to get smaller while it grows in Texas.

CNBC: we've talked about this before. In real time, incredibly fast-moving day today. Dow up almost 300 points. And yet, CNBC is sticking to their "agenda." Producers set the "theme for the day" about two weeks in advance; start lining up interviews. About a week later, last major tweaking. Day of production: almost impossible to change "theme." We won't hear about thoughts on the market moving today until late in the day.

Case in point: extended interview with WeWork founder right now 9:49 a.m., December 12, 2019, on a day when the Dow popped almost 300 points. WeWork: already an old story. Interview, story lined up a week ago.

Clearing the in-box:

Notes From All Over, Part 1 -- December 12, 2019

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

Are you kidding me? The Dow is up almost 300 points. Where did that come from? I have no idea. Possibilities: news out of China? The craziness in DC? USMCA? [Later, sitting in Schwab, watching CNBC  -- there it is -- US negotiators offer to cut existing tariffs -- that's a twofer -- not only not add new tariffs, but cut current tariffs. At least that's how I'm reading the television crawler.]

Busy, busy, busy. What a miserable day to have an appointment with my Schwab broker. LOL. Simply to make a deposit. I would rather be blogging. I would rather be watching the naysayers on CNBC. More on this later.

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

Buffett: that $130 billion in cash is looking more and more foolish every day.

Deficits don't matter. Debt doesn't matter. Japan's debt: 235% of GDP. Greek debt: 180% of GDP. US debt, 103% of GDP. Not sure about those.

Jobs: the Fed was/is unable to explain where all the folks are coming from. We've discussed this before.

Recession right around the corner: there it is -- a survey of US CFO's -- consensus -- a recession in 2020. Okay. 

  • AAPL:  new all-time high; up another dollar; trending toward $272; hit an intra-day high of $272.55;
  • D: down slightly;
  • SRE: down a half a percent; a trend? let's check MDU and BKH --
  • MDU: up a quarter; I hold no MDU but that was going to be my next purchase but then I went elsewhere;
  • BKH: up half a percent; long-time holder;
  • PCAR: up 1.5%; LOL;
  • TSLA: up $7; up 2% after Jim Cramer goes all in; he as much told his viewers last night, "Back up the truck; bet the farm on TSLA." If I remember, I'll talk about this later, but too much going on today to talk about it nw
  • T: up a percent; wow; 
  • Hess: up 2.45%; up $1.51
  • OKE: up 1%
  • ENB: down a dime; down 0.2%;
  • EPD: up over 1.5%; paying 6.51%; 
  • UNP: up a percent; up $1.60; trading over $176
  • BRK-B: up $2.45; up over one percent; trading at $225
  • OXY: up over 2%
WTI: trending toward $60;

Just Sittin' And Watchin' Tankers Roll In And Roll Away, Again -- December 12, 2019

Peak oil? What peak oil? The only problem now? Not confusing Ghana (west coast of Africa) and Guyana (east coast of South America).

Ghana: 1.5 billion bbls of oil discovered offshore Ghana. Meanwhile, the Bakken will produce 1.5 billion bbls of oil in less than 2.5 years.

Guyana: why Exxon's stock could hit $100 in 2020. Bank of America Merrill Lynch has tapped XOM as its top 2020 stock pick, arguing that the stock could surge 47% as production ramps up and growth accelerates.

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

Timeless, sittin' and watchin' the oil tankers roll in and then I watch them roll away again :s

Sittin' On The Dock Of The Bay, Otis Redding

This tells me all I need to know about how serious folks take global warming: European Central Bank will likely decide "reviving" inflation is more important than fighting climate change. From Bloomberg. The news organization that has banned investigative reporting on some candidates.

From Yesterday
Re-Posting With Expansion

Two big observations regarding the news yesterday. Like him or hate him, Trump is proven right (again).

First: Trump was right about James Comey. He had every right to fire him. Should have been done sooner.

Second: Trump was right about "the Fed." The chairman said as much during the press conference Q&A  when he said he/they made a mistake by raising rates earlier; not cutting them soon enough. That's exactly what Trump had said all along. 

Pretty remarkable. I doubt mainstream media will pick up on these two observations.

In addition, three comments on this story, why one investor is not concerned about Warren Buffett sitting one $130 billion in cash.  One observation regarding the story; and two observations regarding the comments. Fifty comments at the linked story so far.
  • malarkey: that he's sitting on $130 billion in cash to cushion a possible implosion of the stock the day it's announced he or Charlie Munger is in the hospital
  • foolish: if that $130 billion is only earning money market rates, he is an incredible foolish investor; he always says he "bets" on America and there are plenty of great American companies paying much more than money market rates
  • idiots: I can't believe all the folks commenting about preparing for the recession that's right around the corner. A recession can't possible happen any earlier than 2H20, and does anyone really think Trump will let the economy contract during his re-election campaign; he controls the timing of the Chinese tariffs and that's the third pillar of the three-legged stool driving this market. [Later, there is it -- on CNBC this morning, December 12, 2019 -- survey of US CFOs -- consensus -- recession in 2020. Okay.]
Liquidity, the banks, and the Fed: what sector needs more cash than ever? And what sector is least likely to get more cash from banks. Hint: same sector in both cases. 

Trading. On another note, I've never had so much fun as now, after Schwab lowered commission fees .... to $0.

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

Person Of The Year -- 2019

This was a no-brainer and Time magazine blew it.

First, the wiki link -- it is incredibly interesting. And then this:
It has grossed $928 million worldwide, had the highest all-time worldwide opening for an animated film, and is the thirteenth highest-grossing animated film of time and the eighth highest-grossing film of 2019.

If there's any question, visit Walmart, Barnes and Noble, or Target this holiday season. 

Two Wells Come Off The Confidential List Today -- December 12, 2019

Ustoppable? Palladium is now more expensive than gold has ever been

Most under-reported business story in recent months: the implosion of the automobile industry. Another example: Daimler to lay off at least 10,000 workers worldwide. This comes at a time when automobile manufactures have been forced to make multi-billion-dollar bets on EVs, and my hunch: this will not end well.

Tesla: speaking of trucks, Tesla Cybertruck was dead last in truck survey.

NGLs: folks may recall that the Bakken is rich in NGLs. This from a reader late last night:
Earlier today, I went over a short presentation from Antero Resources, the largest NGL producer in the country, based out of West Virginia.
They stated that the average price for their NGLs (excluding ethane) was now just over $30/barrel with the most valuable - the pentanes - fetching ~$54/bbl. Not too shabby.
There are processing fees taken out of those revenue numbers, but the global demand for propane, the butanes and pentanes continues to grow. American shale production is especially rich in NGLs and global refineries and consumers (think residential heating/cooking with propane) are seeking out these relatively low cost products.  
Progane: see RBN Energy's blog today. See below.

Back to the Bakken

Active rigs:

Active Rigs5368514165

Wells coming off the confidential list today --  Thursday, December 12, 2019: 37 for the month; 242 for the quarter:
  • 36436, SI/NC, Crescent Point Energy, CPEUSC Claire Rose 30-31-159N-99W MBH, Burg, no production data,
  • 32412, SI/NC, CLR, Polk Federal 12-33H1, Banks, no production data,
RBN Eenrgy: can PADD2 propane consumers count on Canada to save the day?
Propane stockpiled in Canada has often been a mid-winter godsend for propane consumers in the U.S. Midwest and Great Plains states. If supplies in PADD 2 ever got tight due to unusually cold weather, greater-than-normal crop-drying demand and/or kinks in the U.S. supply chain, the higher prices spurred by the shortfall would incent more Canadian propane to be piped, railed or trucked south.
This winter may be different, though. A new propane export terminal in British Columbia and steady-as-she-goes exports from the U.S.’s northern neighbor to PADDs 2 and 5 have left Canadian propane inventories nearly one-third lower than a year ago, and propane in the Edmonton, AB, hub is selling at a far-from-typical premium to propane at Conway, KS, and Mont Belvieu, TX. Today, we explain why a supply-demand imbalance in the U.S. heartland this winter might be harder to fix.
As we said a couple of weeks ago, cold weather and spiking demand from Midwest and Great Plains farmers trying to dry their late-maturing, soggy crops have sent the regional propane market into a tizzy. Supply is not a major issue, at least not yet — propane inventory levels within PADD 2 are only a little below average, and stocks are plentiful along the Gulf Coast in PADD 3. But distributing propane by rail and truck for crop-drying use in PADD 2 has been a headache.
As a result, farmers have been scrambling to get more of the fuel, and propane prices in the U.S. heartland have been on the rise. We also hinted that, if things get even worse, Canadian suppliers may not be able to come to the rescue as they have in the past.