Pages

Friday, June 30, 2023

Week 26: June 26, 2023 -- July 3, 2023

Locator: 44851B. 

Top story:

  • The stock market, Friday, June 30, 2023
  • Three US Supreme Court rulings

Top international non-energy story:

  • Russian-Ukraine war continues.
  • Prigozhin / Wagner Group in exile in Belarus 
  • Wagner Group says they won't continue to fight in Ukraine
  • META, Google block links to Canadian news outlets

Top international energy story:

  • Tesla: "owns" the EV supercharger story.

Top national non-energy story:

  • AAPL: $TTT — market cap
  • NVDA: first chip company to join $T club

Top national energy story

  • WTI breaks $70 at end of week, but just barely.
  • EIA appears to be intentionally reporting incorrect data; demand data consistently revised upward; never reported
Focus on fracking: most recent edition.

Top North Dakota non-energy story:


Top North Dakota energy story:


Geoff Simon's top North Dakota energy stories:

Bakken economy:

Commentary:

Entertainment: Wes Anderson's Asteroid City

Worn Out -- It's Been A Long Day -- June 30, 2023

Locator: 44850B. 

I am burned out. I've lost the energy to blog about anything.

I will do the end-of-day report and maybe the top stories of the week, but I am overwhelmed with so much to blog. I have so much in the queue but I just don't have the energy to complete the process.

Sorry.

I'm at Jiu-Jitso with Sophia until 5: 30 and then family commitments, but eventually some time to rest, relax, re-set, chill.

So, we'll see. 

****************************
Back to the Bakken

Active rigs; 37.

WTI: $70.64.

Two new permits, #40014 - #40015, inclusive:

  • Operator: Crescent Point Energy
  • Field: Blue Ridge (Williams);
  • Comments:
    • CPE has permits for two Chase Doublas Chase wells; lot 2 section 5-158-1000;
      • to be sited 350 FNL with one 1735 FEL and the other 1685 FEL

One permit canceled:

  • 38029, Slawson, Ripper Federal 1 SLHHPNC,

Recurring Theme On The Blog: No Evidence Of Any Supply Shortfall Near Term -- June 30, 2023

Locator: 44849OIL. 

Link here.

WTI: gained 1.2%; up 83 cents; trading at $70.69. A long way from $80, much less $100. For investing, my buy point:

  • WTI "surges" through $75
  • fundamentals suggest possible upside at $100-WTI within six months.

From Bloomberg today:

Google And Meta Play Hardball With Canada -- The Fourth Industrial Revolution -- June 30, 2023

Locator: 44848TECH. 

So, how does this play out.

Google will now block links to Canadian news outlets. Wow. 

We'll see how long "Canada" news outlets want to remain irrelevant.

Folks will find a way around this, of course, but in the big scheme of things, now, when I do a google search, hits from Canadian news outlets won't appear.

I can already think of work-arounds.

However, let's say the outcome is what folks think it will be: google searches from now on won't include hits from Canadian news sources.

What if the US did the same thing? Of course, the US won't but let's say it did.

What's the fix? ChatGPT

The "internal" links / searches won't be blocked. Folks will simply go to ChatGPT and ask for daily summary of Canadian news.

**************************
The Book Page

The Mystery Of Lewis Carroll, Jenny Woolf, c. 2010.

Notes


Kafka: The Years of Insight, Riener Stach, c. 2013. 

Notes.

Off The Net -- June 30, 2023

Locator: 44847B. 

Where I'm headed today at three.

I guess YouTube automatically makes them "shorts" if under a minute or so. I don't know. I don't like shorts but it is what it is.

Holy Mackerel -- When It Rains, It Pours -- College Loans -- June 30, 2023

Locator: 44846SCOTUS.  

SCOTUS rules against Biden on college loans.

Opinions here.

Update

Later, 5:51 p.m. CT: I was completely wrong. After reading ACB's "explanation,"it turns out it was not a "constitutional question." It was all about the size of the loan forgiveness. On that basis, I think Biden was within his rights. The minority position was probably the correct position. So, now, Biden just comes back with a new executive order trying to guess how "much forgiveness" ABC would accept. That's crazy. 

Original Post

This was a no-brainer. "Everyone" expected this outcome.

Bottom line: presidents don't have authority to increase / decrease taxes // set tax rates // do anything with taxes unilaterally. US constitution clearly states that authority begins with the US House, must be agreed to by the US Senate, and signed by the president. 

Again, it appears three justices don't understand (or don't want to understand) the US constitution. These three keep ruling like they are politicians running for office, not justices appointed for life.

Link here

From an earlier post:

College debt forgiveness: link here.

  • update here, nothing new.
  • apply the law; money should not be an issue.
  • if the "new" law passed by Congress gave Biden the authority, Biden wins;
  • if the law passed by Congress was unconstitutional --- whoa, Nellie -- or Katie -- bar the doors!
  • I have no dog in this fight. If SCOTUS says "okay," it opens the door to a lot of presidential mischief
    • and that's fine, if you like presidential mischief.

This is a double whammy for those affected. Folks were "betting on the come," as they say in Vegas, and they "crapped out," as they also say in Vegas. From an earlier post:

I've lost the bubble on this, but if I understand this correctly, there are two college loan issues:

  • interest payments on existing federal loans pause / to resume
  • federal loan forgiveness, $10,000 (federal loan) to $20,000 (Pell grant)

Known: interest on loans:

  • interest payments on federal loans will resume in October, 2023
  • interest starts to accrue again in September, 2023

Still unknown: full loan/partial loan forgiveness:

  • US Supreme Court decision within next month or so
  • to decide whether a presidential executive order to grant loan forgiveness is constitutional
    • the "betting" is that the US House of Representatives holds the strings to the purse, not the president,
      • if so, the President cannot unilaterally cancel federal loans

Regarding interest payments on existing loans:

  • first link: Insider: June 15, 2023: interest starts to accrue again in September, 2023; "first" payments begin again, Octobdr, 2023.
  • second link, Forbes: May 15, 2023: at that time, still not know when interest payments would resume.

Regarding loan forgiveness, $10,000 to $20,000, US Supreme Court case

  • one link, Newsweek: June 15, 2023
    • it's a political issue
    • it's a money issue
    • it's a "fairness" issue
    • if it's a constitutional issue -- it was not addressed at the Newsweek link, except in passing.
  • for me, it seems fairly straightforward.

How many affected:

  • 20 million students would have their loans erased in their entirety;
  • 20 million students would have their loans lowered.

 

Holy Mackerel -- When It Rains, It Pours -- Web Design -- June 30, 2023

Locator: 44845SCOTUS.  

Opinions here.

Updates

Later, 2:00 p.m. CT: I cannot reconcile "free speech" for a web designer but not for Harvard. Both are offering products and/or services to the general public, but the web sit designer can choose whom he / she serves, but Harvard cannot.

Original Post 

Link here.

All but guarantees the 2024 presidential election.

This is the right decision. But the ruling against Harvard and UNC -- affirmative action -- was not. 

Again, the vote, 6 - 3.

I've never understood the "cake" thing. Why would you have your wedding cake baked by someone who doesn't want to bake you a cake in the first place. Certainly, there's more than one option.

How about no cake, but a fruit plate instead? Or a veggie plate? Or a table full of McDonald's hamburgers. All viable options.

Clearly a first-world problem but it is/was incredibly important that there were adults in DC who settled this once and for all. LOL. Children know that rules were made to be broken.

I'm Off My Meds -- Heading Into A Five-Day Weekend -- June 30, 2023

Locator: 44844ECON.  

This is a great, great article. It is dated July 3, 2020 (scroll to bottom of article). Sent by a reader, thank you.

From the article:

I wonder if the writer ever got back into FANG-STAN-QB?

Since that article was written, after the dot-com bust:


This graphic will always haunt me, this ten-year period covers the 2020 debacle:

My two favorite graphs:

WTI: $70.31.

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them

Again, all my posts are done quickly. There will be typographical and content errors in all my posts. If any of my posts are important to you, go to the source.

Breaking -- June 30, 2023

Locator: 44843ECON.   

Without comment:





Just Saying -- June 30, 2023

Locator: 44842ECON.    

I might have to get a fact-check on this but my portfolio seems to be doing much better in this administration than the previous administration. Just saying. And certainly better than under both the Obama and the Bush administrations. I'm trying to figure out what investors don't like about Bidenomics. Yes, I'm trolling, but it sure is fun.

There may be a reason there's not a lot of pushback by the GOP in the US House. 

Speaking of which, I assume they will leave in droves today, not return for two weeks, and then begin their August vacation. Their version of a Michelob weekend.

Whoo-Hoo! WTI Just Went Over $70 -- June 30, 2023

Locator: 44841WTI.    

We are going into a five-day weekend that starts today. After 12:00 noon EDT the floor-walkers aren't coming back -- they're on the train back to New Jersey or Westchester to start their July 4th weekend. We'll see max activity between 11:00 a.m. and 1:00 p.m. EDT today.

Expect no volatility.

Traders are taking advantage of the recent sell-off.

Fund managers are planting their seed corn for 3Q23 bragging rights.

Pre-market:



Either:

  • fundamentals matter, or,
  • FOMO --> short squeeze --> a Friday blowout.

A reader sent me a note that a well-known fund manager sold "her" NVDA the other day. She's a trader and should have made a killing. She did the right thing as a trader, taking her profits. She was taking Cramer's advice: bulls and bears both make money. Hogs get slaughtered.

NVDA: today, pre-market:

NVDA: one year.

NVDA: max.


Trending right now:

Katie/Katy, if this holds bar the doors -- FOMO --> short squeeze --> gamma squeeze --> stratosphere. 

If there's a sell-off this afternoon, the short-sellers held, and the profit-takers moved in.

If this goes to/through the stratosphere, we'll bee talking about a gamma squeeze.

I assume a lot options expire on a Friday going into a five-day weekend.

Bidenomics -- We All Have An Opinion -- Here's One From Greg Ip -- June 30, 2023

Locator: 44840ECON.   

I posted my opinion earlier.

From The WSJ today:

I share his pain. Seriously.

By the way, I share his views on affirmative action, also. Very, very counterintuitive. I may or may not elaborate later. But I digress.

Back to the linked article:

President Biden kicks off a national campaign Wednesday pitching his economic record to a deeply skeptical public.

The challenge: Biden really has two economic records. One of them begins in late 2021 and consists of a series of legislative wins on infrastructure, semiconductor production and renewable energy, which he then preserved in a debt-ceiling deal with Republicans. These policies could shape the economy for years to come.

That record, though, is overshadowed by the record of his first months in office, when his American Rescue Plan pumped $1.9 trillion of demand into a supply-constrained economy. The result was the tightest job market in memory and a surge in inflation that still hangs over Biden’s approval ratings and his prospects for re-election.
I really don't have much interest in this article right now, but it's important for the archives.

However, having said that, this is excellent:

 If Biden’s early agenda was all about macroeconomics—unemployment and inflation—his subsequent agenda has been about microeconomics, i.e., the composition of economic growth. Trump’s frequent “infrastructure weeks” never actually led to new infrastructure. Biden, by contrast, got a massive infrastructure bill through Congress in 2021 and it went beyond roads to water treatment and high-speed internet. The Chips and Science Act last year was the largest federal commitment to industrial policy in recent history. The Inflation Reduction Act offered game-changing incentives for renewable energy and electric vehicles.

In a report Tuesday, the Treasury Department said those initiatives are making an imprint on the economic data. Factory construction, for example, has shot up, particularly for electronics. Not all of this is due to legislation: Semiconductor companies were increasing their U.S. footprint already in response to growing demand and pressure to diversify away from Asia. Nonetheless, comments of business leaders make it clear that federal incentives are having a palpable effect on their plans.

This newly assertive role for the federal government in shaping private investment isn’t without controversy. It is bulking up deficits, its “buy American” provisions have upset allies, and it has lowered the bar to interventions of questionable merit.

MAGA. 

Biden's problem. He can't force himself to say, "we're going to make America great again."

Greedflation: They're Reading The Blog -- June 30, 2023

Locator: 44839ECON.  

On June 15, 2023, I first mentioned "greedflation."

"Greedflation":

The true reason for these elevated prices could have more to do with expanding margins and keeping investor sentiment high than with increased input costs.
"It's using excuses," Donovan said. "It's using a cover."

Since then, I've discussed it on the blog four different times, including using really, really cheap white bread and Kroger as an example.

Today, of all things, it ("greedflation") pops up again. This time in The WSJ. Whoo-hoo.


And what does the writer use as an example: obscene profit / greed by supermarkets using "inflation" as a cover.

The next phase in the war against inflation is taking shape in Europe, where governments are actively cajoling businesses to cut prices on everything from pasta to chicken.
Their argument: Profits are too high.

The European Union’s statistics agency Friday said consumer prices in the 20 countries that share the euro were 5.5% higher than a year earlier, a decline from the 6.1% inflation rate recorded in May, and the slowest increase since the start of 2022.

However, that slowdown in inflation has largely been due to falling energy prices.
The core rate of inflation—which excludes volatile items such as energy and food—rose to 5.4% in June from 5.3% in May.
More worryingly for households, food prices continued to rise at a rapid pace, albeit more slowly than in recent months. After last year’s steep energy-price rises normalized, sharp increases in food bills this year have alarmed European governments. Now they are pushing back by putting pressure on grocery stores and food producers to limit or reverse price rises.

Those moves fall short of the price controls that governments introduced in the early 1970s, but edge Europe toward a more interventionist approach on inflation than the U.S., where the pace of price rises has slowed more sharply over recent months.

In France, where food prices have increased by more than 14% over the past year, the government is trying to persuade the country’s largest industrial companies to lower their prices.

“We will not allow big industrial companies to make undue margins,” French Finance Minister Bruno Le Maire said recently, adding that he was ready to name and shame companies unwilling to pass on lower costs to consumers, or even create a special tax on the profits of those companies.

Wow, greedflation. Ya gotta love it.

Let's look at two paragraphs from the above story.

First:  

More worryingly for households,food prices continued to rise at a rapid pace, albeit more slowly than in recent months. After last year’s steep energy-price rises normalized, sharp increases in food bills this year have alarmed European governments
Now they are pushing back by putting pressure on grocery stores and food producers to limit or reverse price rises. 

We lived in Europe for thirteen consecutive years. With regard to European grocers, this is what I noticed, two things:

  • a reliance on small mom-and-pop grocery stores; few large supermarkets (the norm in the US); and, 
  • little competition, so little opportunity for price comparison.

Here, in an urban area in which I live, two minutes apart from each other: Tom Thumb, Albertson's (also owns Tom Thumb), Target, and Walmart. HEB is moving in. Huge competition. Across town, ten minutes by car: Costco. Where they still have $4.99 rotisserie chickens. And, then, of course, best deal for everyone: Amazon for non-perishables.

American grocery shoppers are very, very good at cutting back when prices get too high. I'm seeing that in potato chhips right now where Target has cut prices in half going into the July 4th weekend.

Second paragraph:

“We will not allow big industrial companies to make undue margins,” French Finance Minister Bruno Le Maire said recently, adding that he was ready to name and shame companies unwilling to pass on lower costs to consumers, or even create a special tax on the profits of those companies.

Yes, that will bring prices down at the counter for the average shopper. LOL.  

Again, back to this:

"Greedflation":

The true reason for these elevated prices could have more to do with expanding margins and keeping investor sentiment high than with increased input costs.
"It's using excuses," Donovan said. "It's using a cover."

Parse those two sentences:

  • the need to keep investors happy
    • expand margins
  • use "inflation" as a cover

Could We See $70-WTI Today? Two Wells Coming Off Confidential List -- June 30, 2023

Locator: 44838WTI. 

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Back to the Bakken

WTI; hallelujah! We may see $70 today.

Sunday, July 2, 2023: 45 for the month; 153 for the quarter, 408 for the year
39425, conf, CLR, Bice Federal 8-32H,
37898, conf, BR, Lillibridge 2A MBH,
35679, conf, Liberty Resources, Albertson E 158-93-27-34-3MBH,

Saturday, July 1 2023: 42 for the month; 150 for the quarter, 405 for the year
39424, conf, CLR, Bice Federal 7-32H1,
35678, conf, Liberty Resources, Albertson E 158-93-227-34-2MBH,

Friday, June 30, 2023: 40 for the month; 148 for the quarter, 403 for the year
39423, conf, CLR, Skachhenko Federal 11-3HSL,
38855, conf, Whiting, Littlefield 11-21TFHU;

RBN Energy: the new Appalachian gas producer playbook in a pipeline-constrained world.

The Fiscal Responsibility Act (FRA) revived Mountain Valley Pipeline’s (MVP) prospects of being completed this year, but the outlook for new, large-scale natural gas takeaway projects in the Northeast beyond MVP hasn’t changed. What has changed, however, is how Appalachian natural gas-focused producers respond to pipeline constraints and lower prices. Gone are the days of drilling with abandon, crushing supply prices and assuming the necessary pipeline capacity will eventually get built.
Instead, producers have demonstrated a willingness to slow drilling activity, delay completions and choke back producing wells in the short-term to manage their inventory during periods of lower gas prices. In today’s RBN blog, we lay out our view of what that shift in producer behavior will mean for Northeast supply, demand and pricing trends in the long-term.

Good Morning -- June 30, 2023

Locator: 44837B. 

Some days I have a very difficult time knowing where to start.

Today?

Not.

There's so much to blog I won't get to it all. 

So, some quick memos to myself on which I will expand later.

AAPL: we're in the stratosphere based on pre-market trading. FOMO.

Greedflation: it's real. LOL.

Stayflation: it's real. LOL. 

Military recruiting: same story, recycled every few years. Is it different this time? 

RIDE? Done? Wait! There's more.

Photo of the week: Deere.

T: Huh? 

Hornet

ERCOT: the grid failing? So far, not even close. Record demand day-after-day -- how many "e's" in "relentless"? And the reserves have held up very, very well. Amazing, and a quick "thank you" to Governor Abbott and his folks is in order. Thank you.


Norway: maybe we will even get to Norway's demand. But I doubt it. Not today. Way too much other stuff going on.

Grammar: depending no my mood, I might even respond to a grammar issue sent it by my reader, but then again, perhaps not.

Really irritating headlines.

Margot Robbie: hot. Really hot. So hot, that she wasn't even mentioned / shown in a movie trailer -- "they" didn't want to upset their audience. LOL. On this one, I may or may not provide the spoiler alert.

Asteroid City: saw it for the second time last night. Tickets are not discounted for seniors: $11.23 with tax. Saw things I had missed before. Seemed better the second time around. Remember Taranino's Sin City? I swear on a hand of bibles Wes Anderson even "stole" a scene-idea from that movie. And even more dots connect. What a devious mind (that Wes Anderson has).

Names: some folks go by one name. Cher. Madonna. Trump. Others always go by two names: ElvisPresley; WesAnderson. Some go by three: SonnyandCher; LewisandClark. JanandDean.

  • Add Wes Anderson to those who always go by two names.
  • And, then, of course, there are those whose names are always backwards: "Bond. James Bond."
  • The current president goes both ways. Confusing. Perhaps fitting. Biden. Joe Biden.

Bidenomics -- We All Have An Opinion -- Here's Mine -- June 30, 2023

Locator: 44836ECON. 

Yesterday a reader sent me this:


.. and the reader's comment: "... another reason for the Fed to raise rates 50 bp in July.

My not-ready-for-prime-time reply:

You are absolutely correct. I was thinking the same thing.

With regard to the economy, I think my best blog to date is from Jun 22, 2023:


Journalists have to come up with a headline, a catchy lede, a superficial article, fit the space allotted, all against a 1:30 p.m. deadline for the "evening" edition" or a 5:30 p.m. deadline for the morning edition.

Or the 4:30 / 5:30 p.m. Friday night news dump knowing even if they're wrong,
  • no one is going to read it; or,
  • it will be forgotten by Monday.
And.

It's interesting to see what conclusions business writers reach (within the constraints above) based on a single speech by someone who lives, breathes economics and has been in the business twice as long as most of these journalists have been around. 
 
And if you note the surname of most of the journalists writing these articles about the US economy, most of them seem unlikely to be Daughters of the Revolution or Sons of the Pioneers.

My goodness, all these business writers and talking heads talk about is the incredibly low unemployment rate, this really tight labor market, which they suggest is the only thing that matters to JPow.

The numbers today causing all the hand wringing?  The weekly -- weekly, are yo kidding me -- 239,000 actual vs 264,000 predicted, for initial unemployment claims.

[I used to track the weekly unemployment claims -- did it for years -- I finally quit -- after seeing that those numbers had zero correlation with my investing results. But I digress.]

Had the "number" been 265K (instead of 264K) the headline would have been: unemployment claims rise more than forecast; JPow and the Fed on the right track; inflation down; Bidenomics working.

And the market would have exploded on that headline. [It appears they didn't explode yesterday but will explode today.]

Instead the number comes in at 239,000. [Population of Shanghai: 30 million. One city. 239,000 is about a fourth of one million. Another 29 million and you get Shanghai.]

The US civilian labor force in May, 2023 was 166 million (that's the official number; the real number is probably greater -- prostitutes and gangsters probably don't get counted -- and then add in non-civilian labor force.

264K-239K = 25,000.

25,000 / 167 million = 0.00015 = 00.015%. And that's going to drive JPow to 50 bp?

LOL.

But that's what the 29-year-old journalists are telling us.

I plan to use my June 22, 2023, posting as the basis for such postings through the end of the year (updating monthly). Exactly the same posting but editing to fit new data each month.

My thesis remains:
  • the current inflation has little (do I dare say, nothing) to do with government spending or tight employment
  • the current inflation is due to too few goods being chased by too much money
    • exhibit A: a $35 million 1960's vintage fixer-upper on Lake Tahoe being sold with an asking price of $35 million
    • exhibit A: the price of used cars
  • too much money: "my two favorite charts"
    • area under the curve;
    • money market funds.
  • too few goods:
    • supply chain shortages 
    • fourth industrial revolution
For me, a Goldilocks economy.

If companies don't want to see their share prices go the way of General Mills, they better do better with earnings; and, they better increase their dividends if they don't want folks to bail on stocks and put their money in money market funds. Every widow I talk to is doing that and at my age, I talk to a lot of widows.

I'm happy as a lark. Focused on dividends. Re-jiggering my portfolio to reflect the fourth industrial revolution. Maintaining the #1 subscription-free, ad-free, password-free, daily blog on the Bakken with literature and musical interludes to give it a bit of class.

Best "news": I have a monthly posting on the economy/investing that will need minimal editing.