Global Shale Reserves -- December 30, 2017; Another Win For Trump

From The Wall Street Journal, global shale reserves as estimated by the EIA:

One can see how conservative these estimates are. Some have suggested with 10% primary recovery (which now appears to be low) and 500 billion bbls original oil in place, the Bakken alone has 50 billion bbls recoverable shale oil. Yes, I know. Don't get me started.

Also: "The numbers from the rather dated US Energy Information Administration-commissioned study are estimates of technically recoverable RESOURCES, NOT RESERVES. One might expect a financial paper to know the difference.." -- Comment at the linked article.

The earliest the Russians will start seeing significant shale oil production is the mid-2020's according to the linked article, at which time it will account for about 2.5% of Russian crude oil production.

Bottom line: a story well ahead of its headlights.

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ObamaCare: Another Win For Trump

From The Wall Street Journal today:

A federal judge in Washington ruled the Trump administration can make sharp cuts to subsidies Medicare pays some hospitals for pharmaceuticals, a blow to the American Hospital Association and others fighting in court and Congress to halt the reductions.

The hospital association and two other health-care trade groups had filed a lawsuit against the Department of Health and Human Services in an attempt to stop the cuts. But U.S. District Judge Rudolph Contreras on Friday dismissed the case, saying the plaintiffs cannot sue before exhausting other avenues to challenge the cuts, as required by law. The other trade-group plaintiffs were the Association of American Medical Colleges and America’s Essential Hospitals.

Judge Contreras’s ruling means Medicare can proceed with the cuts, scheduled to start Jan. 1. The administration estimates the cuts will reduce annual drug spending by Medicare and beneficiaries—who pick up some of the cost of certain drugs—by about $1.6 billion.

“Flat out, this is a win for patients,” said Rena Conti, a University of Chicago associate professor who studies health policy.

The Energy And Market Page, Part 2 -- September 28, 2017 -- The Trump Rally Broadens; ObamaCare, Bye, Bye? Nope, Buy, Buy; Health Insurer Pulls Out Of North Dakota -- Cites Uncertainty Of Government Bailout

Hitting new records:

• Russell 2000 (small cap) -- this is huge -- up until today, this was the one major indice that had not set new records
• S&P 500 -- barely, but it closed at a new high today
• Dow Transportations -- also set a new high; Dow Theory comes to mind

Others:

• Dow 30: not a new high, but a good day
• NASDAQ: not a new high, but a good day
• "Yields" are up.

WTI: solid move down today -- helps refiners.

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Bye, Bye? Nope, Buy, Buy

Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on anything you read here or think you may have read here. But having said that ...

I've said this repeatedly, so instead of writing de novo, I will simply cut and paste from an earlier post:

Longest running reality show/soap opera continues. These summer re-runs are getting a bit boring. No real need to post / link the most recent update. I will simply copy/paste what I wrote September 19, 2017.

Bye-bye? Nope, buy-buy. 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. Bottom line for the contributor regarding health care investments: buy-buy. Buy if ObamaCare is "repealed" (wink, wink); buy if ObamaCare survives a GOP vote to repeal. I've said the same thing for months.

For investors: thank Paul Rand and John McCain for scuttling ObamaCare Lite. Rand and McCain insure that the big insurance companies will be the big winners, and for investors, that's good news.

So, what's new?

Senator Schumer says the Senate is very, very close to bailing out the major, publicly held insurance companies. The story is here.  ObamaCare, bye, bye? Nope, buy, buy.

By the way, from CNBC:

• regional insurer Medica is pulling out of the North Dakota's health exchange for 2018 at the last minute
• state regulators denied the health insurer's request for a rate increase to account for uncertainty over funding for Obamacare cost-reduction subsidies
• Wednesday was the deadline for insurers to commit to offering plans on the exchanges for 2018
• senators Lamar Alexander and Patty Murray say they will try to revive their bipartisan effort to approve funding for CSRs and stabilize the health insurance exchanges for the next two years

Miscellaneous List Of Items Under-Reported By The Mainstream Press -- September 9, 2017

For the archives. A list of miscellaneous data points that seem to get less attention in the mainstream media than they deserve.

Democrats in the US Senate appear that they don't want Catholics in the Federal judiciary. The press barely reported this.

End of crude oil exploration. Perhaps the most stunning news in the oil sector this past week was the announcement by France that exploration of crude oil is coming to an end for that country. The announcement was stunning. The reality is unchanged. The implications are staggering. It's not because France does not have oil (it does, and it has a lot of oil); it's a political decision. Imagine if the US had banned fracking ten years ago. This is going to be huge for US distillate exports (see graph at same link.)

Venezuela is imploding (will become a failed nation). Venezuela crude oil imports (into the US) have reached a new low. Likewise, imports from Saudi Arabia have dropped to half that we saw in 2003. Combing that with $45 oil and some suggest that Saudi Arabia could deplete its cash reserves in less than five years.

Easy money. 10-year-Treasury-bond yields have "never" been so low. Just look at that graph at this post. Staggering. The low was last year (1.51%, August 8, 2016); currently, 2.04%. The yield hit 5.03% on  June 25, 2007 and has been on a downward trend since then. One has to go all the way back to the 1960s when the yields were below 5%. From 1962 - 1966, yields ranged between 4% and 5%.

Economic indicators: folks seem a bit more optimistic with regard to GDP than might be realistic, but at least we're trending toward 3% growth rather than 1% growth. During the last few years of the Obama administration there was a fair amount of chatter worried about the US sliding into another recession; that talk ended after November 8, 2016.

• Investor optimism is now at record highs.

• The 30-year mortgage rate hit another 2017 low, now down near 3.75% (same link as above).

• The US is now at "full employment" and has been for quite some time; there is little evidence of wage inflation. Politico noted that US tightening of work visas meant that US companies had to hire more Americans at higher pay during this past summer. And somehow that was seen as "bad." At full employment, it appears "underemployment" will get increased emphasis.

Strange bedfellows. The "sweet spot" for investors may occur when an alt-right president starts cutting deals with the alt-left. I do not recall in modern history how quickly and how quietly the US debt limit was lifted; government shutdown was averted; and, a huge amount of infrastructure federal money was approved by Congress -- all in two days, this past week. Expect another huge amount of infrastructure money to be released two weeks from now once Hurricane Irma is history.

ObamaCare: death by a thousand cuts. Regulatory rollbacks by the Department of HHS; minor tweaks by Congress; the end of "advertising" by the White House; insurance companies pulling out of states across the US. In everything but name, the program is essentially over. There is still much to do with regard to costs, but the market will take care of that.

Mideast:

• the end of ISIS is near; the speed of its demise was staggering once the US ROE changed
• Saudi is in deep financial trouble; did the unthinkable when it met with Iraq to discuss common enemy
• the current issue of The London Review of Books has an incredibly good analysis of what's going on inside Saudi politics; hopefully I'll find time to post highlights

The Red Queen is dead: the number of onshore US rigs is trending down; crude oil production continues to increase; in the natural gas arena, it appears to be the same, perhaps more so. Mike Filloon is one of the very few analysts are talking about new completion strategies and how that will be the next shale story.

Re-balancing supply / demand crude oil: re-balancing has occurred much more quickly than I expected but a) we're still talking 30 weeks, which puts us well into 2018; and, b) there's not guarantee the situation will improve for the oil companies.

The Keystone XL is back in the news.

EVs: the jury is still out but California scrapped a $3-billion-EV-subsidy bill. Tesla missed August deliveries by 25% and no one noted that. Tesla guidance: 100 Model 3 vehicles in August, up from 30 in July, but, in fact, delivered only 75 Model 3 vehicles in August. Next milestone: 1,000 vehicles/week. If Tesla is unable to meet their goal, it suggests that those who talked about the wiring complexity in manufacturing EVs were right. The "real" price of the Tesla Model 3 is being under-reported.

EVs: the jury is still out but the graphic at this link is not reassuring for the EV industry. 

Wind energy: the just is still out, but the excitement seems to be over, at least in California. Iowa has more installed wind energy capacity than a state many times larger.

A bridge too far? We already know that Saudi Aramco is selling 2% - 5% of its "assets" as an IPO in the near future to shore up its financial situation. Is this a bridge too far: PDVSA - Rosneft - CNOOC with a 50% - 25% - 25%.  Or more likely, PDVSA, 51%; CNOOC, 49%. One can find many links to others suggesting this may not be "crazy thinking."

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.

The Political Page, T+215 -- The Train Has Come Off The Tracks -- August 23, 2017

Max called it a train wreck, even though he voted for it, and then promptly left the US Senate. We've been watching that train wreck in slow motion. The Republican-led US House and US Senate who sent up "repeal and replace" bills on a regular basis to a Democratic president were unable to replicate those actions when they had a president who promised to sign any such bill to "repeal" ObamaCare.

The result?

The train has come off the tracks.

The most recent state that has taken action to save some passengers is Iowa. From The Wall Street Journal:

Iowa asked for federal permission to alter major provisions of the Affordable Care Act next year, a proposal that will be closely watched by officials in other states who hope to rewrite parts of the health law as Republican efforts to do so in Congress have stalled.

Iowa’s plan, which state officials said they are already preparing to implement pending federal approval, would go further than proposals that other states have made so far to revamp the health law’s rules. The Iowa setup would offer just one type of insurance plan in the individual market and reshape the subsidies that help people buy coverage, among other changes.

State officials, who are formally filing for federal approval under a special waiver setup allowed by the ACA, argue they need to repair an exchange market that is expected to be down to just one insurer that has requested sharp rate increases for 2018.

States including Idaho, Minnesota and Oregon have submitted applications for less-sweeping waivers that aim to blunt insurers’ expense for covering the claims of people with costly health conditions.

In total, 13 states have passed laws authorizing state officials to craft ACA waiver requests, according to the National Conference of State Legislatures. At least six others are considering such legislation.

“The most urgent thing for states is to stabilize the markets,” said Rosemarie Day, a health strategist and former chief operating officer of the Massachusetts exchange. But the waiver process also “opens the door to trying to accomplish some things Republicans are trying to do,” like limiting benefits currently required under the ACA. “This could be a backdoor way.”

OMG, a backdoor way. Well, if Schumer and McCain are blocking the front door ... 

Some states, such as Oklahoma, have signaled they intend to seek waivers that, like Iowa’s, could make big changes to the ACA. If those proposals proceed and are granted by the Trump administration, the upshot could eventually be a patchwork of different insurance setups across the country. However, the ACA includes firm conditions that such waivers must meet, including that coverage must be as affordable and comprehensive as it is under the federal law’s setup.

"Must be as affordable...." Don't make me laugh. That's an easy bar to meet. And as comprehensive as the federal law -- look at the bronze plans -- about the only thing they guarantee is family planning and end-of-life counseling, also easy bars to jump.

Iowa Insurance Commissioner Doug Ommen, a Republican, said the state has worked with the federal Centers for Medicare and Medicaid Services and that it hoped to get its new system up and running before individual-plan enrollment kicks off in November.

“We’re doing everything that’s needed to start it up as though we already had a yes,” he said. Iowa is also asking federal officials to move faster than the 180-day waiver review timeline designated by the ACA.

The founding fathers, even if some were slaveholders, had great sense when it came to states' rights.

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Fox Business 

Provides background to the two September, 2017, deadlines. 

The Political Page, T+210 -- August 18, 2017

ObamaCare: Iowa's only insurer seeks 57% rate increase. The good news? Only affects about 14,000 Iowans and most of the "shock" will be absorbed by taxpayers across the US who will provide subsidies pretty much making the premiums moot for those who qualify.

The Political Page, T+195 -- August 3, 2017

Updates

August 17, 2017: source -- http://joannenova.com.au/2017/08/australia-denmark-germany-vie-to-win-highest-global-electricity-cost-its-the-nobel-price-prize/.

Later, 3:44 p.m. Central Time: see comments. For Australian pricing, see http://aemo.com.au/. I just looked -- yes, the pricing is insane. Check the spot price in about 45 minutes -- about 4:30 p.m. Central Time to get an idea. Right now, South Australia spot price is about $AUS 130/MWh, compared to the outrageous price of $60/MWh right now in New England. $1AUS = 0.8 USD. So, I assume AUSD $130/MWh works out to about 83 USD.

Later, 3:41 p.m. Central Time: see comments. Connecticut proposing "conservation fee" (aka, a new tax) on heating oil for those who use heating oil to heat their homes.

Original Post

If I did not blog, I would not have known this: the highest electric rates in the world are in Denmark.

For new plants/farms:

• coal/natural gas: $1 million/MW or less
• wind, on-shore: $3 million/MW
• wind, off-shore: $5 million/MW
• solar: $6 million/MW

Who has a lot of off-shore wind? Denmark.

Which country has the highest electric rates? Oh, I already noted that.

Now this: South Australia now has the highest electric rates in the world. Absolutely crazy; Australia is energy-rich; why in the world did it get sucked into this fad? Musk Melon said he could solve Australia's problem in less than 100 days. From the linked source:

As of July 1, 2017, electricity prices in the state of South Australia are the highest in the world, exceeding Denmark’s due to price increases of between 15.3 and 19.9 percent by its three major electric utilities.

In nearby New South Wales the problem is not much better, with more than 60,000 households at risk of having their power cut off because they cannot afford the bills.

Further, South Australia is faced with the possibility of brownouts and blackouts due to the intermittency of wind power. During a power outage last September, electricity prices rose to 200 cents per kilowatt-hour—about 20 times higher than the average U.S. electricity price. The blackout, which impacted 1.7 million people, started when a wind farm suddenly stopped providing 200 megawatts of power and destabilized the grid. Despite the blackout and high prices, South Australia plans to invest another $100 million in renewable energy.

South Australia’s reliance on wind power makes large blackouts more likely because the electricity generated is intermittent and does not coincide with the times of day when power is needed most. Intermittent renewable energy, wind and solar power, represent 53 percent of South Australia’s electricity mix. What’s more, the state closed its last coal-fired power station, thereby providing less back-up power during peak demand.

The shut down of the coal-fired generator at Port Augusta last year destroyed a supply of affordable energy for the state’s households and businesses.

Major businesses in South Australia have threatened to suspend operations entirely until the electricity price is lowered and some smaller operations have already closed.

There is so much more at the link, but this is a good start.

EDI.

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Aetna Reports Great Earnings -- Pulling Out Of ObamaCare

Huge interview with the Aetna CEO on CNBC. Something tells me the mainstream media is starting to see the failure of ObamaCare.

Aetna will pull out of ObamaCare in all states by 2018.

ObamaCare Repair -- July 13, 2017

What sanctions? U.S. Boost to Oil Drilling Will Barely Dent Russia’s Energy Monolith. From The WSJ --

But some industry observers say the U.S. shale boom—which reshaped world markets for crude oil and natural gas before Mr. Trump took office—has only limited impact on Russia’s standing as a major energy provider to Europe and Asia.

Sounds like a Euro-centered article. I'm not exactly sure why The WSJ would even publish this story. The tone almost sounds like something I would expect to see in the most liberal "national" newspaper, The LA Times. Maybe I'm missing something.

ObamaCare: On June 30, 2017,  I said that it was Medicaid that was THE sticking point for the US Senate regarding ObamaCare. Today on CNBC the talking head said the very same thing. ObamaCare is now all about Medicaid for the US Senators. I think it's a most interesting spectacle.

Feds caved to CAVE: that was easy -- Federal Agency Drops Rail Plan in Connecticut and Rhode Island. From The WSJ:

The Federal Railroad Administration released Wednesday its final version of a $153 billion plan to speed up service and improve reliability on Amtrak’s busy Northeast Corridor, dropping a controversial plan to build a new rail segment through Connecticut and Rhode Island.

The federal agency said its plan will shave off 45 minutes of travel time for Amtrak riders between New York and Boston and 35 minutes from Washington, D.C., to New York. The project for the nation’s busiest passenger rail segment—which stretches 457 miles from Washington to Boston—still needs funding from Congress.

Travel, Scotland. A Keats-Inspired Tour of Scotland, From Pubs to Peaks From The WSJ -- 

An hour's drive from Glasgow, on the banks of Scotland’s misty Loch Fyne, the Cairndow Stagecoach Inn makes an unlikely home for poets.

At the tartan-carpeted bar, locals gather for themed dances, complete with fog machines and pulsing laser lights. It’s easy to miss a small frame on the wall, which carries a quote from the poet John Keats, who spent a weary night at the roadside stop-off in 1818.

In a letter to his younger brother Tom, Keats wrote of the stay: “We were up at 4 this morning and have walked to breakfast 15 miles through two tremendous Glens.” He described taking a bath in the saltwater lake, opposite the Inn’s windows.

“Quite pat and fresh but for the cursed Gad flies,” he wrote. One thing or another had dogged the 22-year-old Keats since leaving London that summer on an epic walking-tour which would stretch over 600 miles.

From June through August, he and his friend Charles Brown wound their way through the Lake District up to Scotland, where they trekked the muddy Isle of Mull and climbed the U.K.’s highest peak, Ben Nevis. They began in Lancaster, England, and parted at Scotland’s tip, Inverness, where Keats felt too sick to go on.

If I had all the money in the world, I would have a home in Scotland. A friend I met some years ago offered me the use of his summer home on a southwestern Scottish peninsula but I was never able to take advantage of that invitation. 

The Political Page, T+159 -- June 28, 2017

Irrelevant. The fact that the Dow 30 surges 150 points in an already over-extended market tells me all I need to know about the relevancy of the US Senate; the stalled health care bill; and, the much-talked-about-seldom-seen tax reform bill: all irrelevant.

Fake News settles: in another win for "truth and honesty," ABC has settled with a South Dakota meat producer over an inflammatory, libelous, and, ultimately, a fake news story. The suit was for $1.9 billion. The terms of the settlement not disclosed but something tells me ABC was not prepared to lose $2 billion. LOL. 

Say what: Just the other day the mainstream press wrote that this year's grain harvest will not be as good as previous years because of global warming. Today. EIA says that ethanol capacity has actually increased year-over-year, apparently not concerned about corn production. One wonders how much grain was taken out of production so farmers could plant grass (corn). Just saying. From the EIA today:

Fuel ethanol production capacity in the United States reached 15.5 billion gallons per year, or 1.01 million barrels per day (b/d), at the beginning of 2017.

Total capacity of operable ethanol plants increased by about 4%—or by more than 600 million gallons per year—between January 2016 and January 2017…Of the top 13 fuel ethanol-producing states, 12 are located in the Midwest. The top three states—Iowa, Nebraska, and Illinois—contain more than half of the nation’s total ethanol production capacity. --- EIA

Octane capacity. Based on a story yesterday, ethanol is NOT the concern. Rather, octane is the concern going forward; there could be a shortage sometime in the out years. I hope farmers start planting more octane.

Global warming: Algore brought inconvenient truths about global warming to the American public back in the early 1990s. Inquiring minds want to know when record low temperatures were set in the US by state? 

• Alabama, 1996
• Illinois, 1999
• Indiana, 1994
• Iowa, 1996
• Kentucky, 1994
• Maine, 2009
• Minnesota, 1996
• Wisconsin, 1996
• all records, I do believe, were set in the post-industrial age.

Record hot temperatures? Almost all records were set before 1994.

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ObamaCare

Discussions about ObamaCare take place in two different arenas. One arena is the political arena, the argument between states' rights and national health service. The second arena is in the money arena. In the "money" arena, there are three legs to this three-legged stool: a) taxes on medical devices; b) corporate mandate; and, c) the individual mandate. But what does the big round seat that sits on the three legs represent? Medicaid. Right now, my hunch is that the US congress and US Senate could get together on the three legs, but the big obstacle is where one's butt sits -- Medicaid.

From Ballotpedia:

Between fiscal years 2014 and 2015, total government spending in Illinois increased by approximately $10.8 billion—from $58.6 billion in fiscal year 2014 to an estimated $69.4 billion in 2015. This represents a 15.52-percent increase.

• in Illinois in fiscal year 2014, 51.9 percent of total tax revenues came from income taxes
• sales taxes and gross receipts accounted for 40.2 percent of total state tax collections.
• education accounted for 18.7 percent of state expenditures in fiscal year 2015, 
• Medicaid accounted for a whopping 26%, almost 40% more than that spend on education

Illinois cannot afford a cut in US federal Medicaid support. Period. Dot.

The Literature Page -- Nothing About The Bakken -- June 22, 2017

ObamaCare

The three-legged stool: As the health care debate picks up again, keep this in mind: ObamaCare has only three legs:

• employer mandates
• individual mandates
• medical device taxes

My betting:

• elimination of the medical device tax: 99% likelihood these taxes will be eliminated
• individual mandates: 95% likelihood these taxes will be eliminated; if not eliminated, by executive order President Trump will direct Treasury (IRS) to not take action against any individual who does not comply
• employer mandates: 95% likelihood the employer mandates will not be eliminated, but a) the mandates will be "watered down"; and, b) penalties for not complying will be lessened

Other issues:

• Medicare: absolutely nothing in any current health care debate about Medicare (seniors have a huge voting bloc)
• Medicaid: states will be given relief -- a compromise to get the bill passed

Political note:

• there will no "repeal" of ObamaCare -- this is the gift that keeps on giving
• this will simply be a continuation of the process

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MSG

From Super Sushi Ramen Express: One Family's Journey Through the Belly of Japan, Michael Booth, c. 2009, 2016, chapter 9: "MSG: An Apology"

• "Chinese Restaurant Syndrome": phrase coined in a 1968 letter to The New England Journal of Medicine
• world's largest producer of MSG: Ajinomoto, a Japanese company; "ajinomoto" - "essence of taste"
• company founded by Professor Kikunae Ikeda; discovered MSG in 1908
• konbu seaweed: natural source of the particularly delicious amino acid called glutamate
• glutamate - nature - seaweed - MSG - umami
• MSG played an important role in adding flavor and mouth-feel to processed foods when these were lost during their industrial preservation
• critics allege: a few years ago Ajinomoto made the hole in the top of the MSG shaker larger so that people would use more
• from transcript of interview recorded with the company's scientific affairs spokeswoman
• MSG: no more processed than salt or sugar; comes from konbu, seaweed
• umami receptor discovered in 2000 (joined the other four taste receptors)
• made the hole in the shaker larger about 30 years ago; reason? steam from the soup was clogging up the smaller hole
• now the rest of the story
• US FDA, UN, and EU: have all given MSG the "all clear"
• merely a man-made glutamic acid produced by fermenting carbohydrates and sugars
• umami and MSG are inextricably linked but are by no means the same thing
• umami: usually referred to as the fifth taste, after salty, sweet, bitter, and sour
• some neurologists now claim there are fifty or more tastes
• Ikeda: noted something common in the complicated taste of asparagus, tomatoes, cheese, and meat; this taste is quite peculiar and cannot be classed under any of the other well-defined four taste qualities
• cheese -- parmesan in particular -- and tomatoes have a powerful umami flavor (quick, name the primary components of pizza; yes, cheese and tomatoes, LOL)
• other foods with strong umami component: air-dried ham, veal stock and Worcestershire sauce
• mother's milk is far richer in umami than cow's milk
• the crust on grilled meat: high in umami flavor
• savory and meaty: words most often used to describe umami
• Japanese most often use words delicious and tasty for umami
• evolutionary explanations
• sweet: tells you sugar is present; therefore an energy-giver
• salt: a bodily requirement
• bitter and sour: useful as warnings of toxins or unripeness (or spoilage)
• so why umami? lets you know the food contains glutamic acid
• glutamine indicates that protein is in the food; protein is essential to our survival, and so it makes sense that we identify something as food
• unlike salt or sugar, there are no obvious go-to foods to get your hit
• glutamine: supports other flavors; add body; enhances other flavors
• umami is an indicator of ripeness and therefore tells us when vegetables and fruits are at their most nutritious
• tomatoes are at their most umami-ish when they are at the peak of ripeness
• konbu (seaweed) has more glutamate than any other foodstuff on earth
• #1 food associated with Japanese umami: miso soup
• katsuobushi, the other main base ingredient of the dashi used to make miso soup (along with water)
• shiitake mushrooms: also extremely rich in guanylate and are often added to miso soup as well
• miso soup: a triple whammy -- konbu, katsuobushi, shiitake
• the Italians were particularly good at generating this synergistic umami effect (think pizza)
• parmesan: second-highest amount of glutamate of all common foodstuffs
• French: veal stock
• British: Marmite, or yeast extract
• health benefits to umami -- you will have to get the book to learn about that; I need to move on

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The Literary Page

One of my favorite posts this past year was not about the Bakken (say what?). It was about color.

Crayola will be phasing out "dandelion yellow" this year. I bought several 24-count Crayola boxes as an investment since these will probably become priceless once "dandelion yellow" is completely phased out.

At the time of the announcement, Crayola did not say what color was going to replace "dandelion yellow." They have now made the announcement that it will be shade of blue but the actual color has not yet been named.

There were a flurry of stories yesterday about this new blue crayon. From USA Today: Crayola's newest crayon color is a shade of blue that was just discovered.

A brilliant blue color, discovered accidentally by Oregon State University chemists, will soon be the newest addition to Crayola’s box.

The crayon color, inspired by the blue pigment known as “YInMn” blue," is the replacement for the recently retired Dandelion crayon. The vibrant blue was discovered by Oregon State University chemists who were heating up chemicals in hopes of finding new materials that could be used in electronics. In what the university calls a "serendipitous discovery," one of the chemical mixes came out of the furnace a striking blue. The "YInMn” moniker comes from the elements that comprise it: yttrium, indium, manganese and oxygen.

“With the discovery of YInMn brand new pigment, who other than Crayola would be best to bring it to life?” said Leena Vadaketh, Crayola’s VP of Research & Development, North America.

Possibly / probably because of that story, I was attracted to this book at the Grapevine library today: Color: A Natural History of the Palette, Victoria Finlay, c. 2002. Again, a British author; I've always argued that writers from the UK (to include Ireland and Scotland) are consistently very, very good.

Perhaps more later, but I have to get back on my bike to get home in time to take Sophia swimming.

Good luck to all.

Death Spiral: Add Iowa To Kentucky -- June 12, 2017

On June 11, 2017, WSJ reported that Kentucky was "killing" ObamaCare.

Today, another state cries "uncle." Or better said, "cries for help from Uncle."

Bloomberg reports: Iowa asks US for ObamaCare help facing "collapse" of market. The lede:

Facing what it called a “collapse” of its Obamacare market next year, Iowa is asking the Trump administration to let it reallocate millions of dollars and create a stopgap program that would provide health insurance options for 72,000 Iowans covered by the Affordable Care Act.

Under the proposal made public on Monday, the state would use $352 million in federal money to provide backup funding for insurers and overhaul Obamacare’s subsidies for consumers next year. 

The state would also create a single standardized plan that insurers would offer.

So many story lines. 

WSJ: Before "Repeal And Replace," Kentucky Is Already Dismantling ObamaCare -- June 11, 2017

From The Wall Street Journal:

As Congress works to repeal President Barack Obama’s signature health law, Kentucky Republican Gov. Matt Bevin is already at work unwinding some of its provisions in his state.

Mr. Bevin has dismantled the state’s health-insurance exchange, moving patients to the federal website last year. He has proposed introducing new conditions for recipients of Medicaid, the federal-state health program for the poor, that would require patients to pay premiums of up to $15 a month and perform employment-related or community-service activities, among other provisions.

His administration is waiting for the federal Centers for Medicare and Medicaid Services to decide whether to approve the plan. The agency’s new head, Seema Verma, helped craft Kentucky’s proposal, but said she would recuse herself from the decision-making process.

Better or worse, I've always maintained health care was better handled by the states than the federal government.

All politics is local. US Senate may be doing the right thing by being very careful in acting.

It Never Quits -- June 6, 2017

Platts: US crude #oil production will, for first time in nearly 50 years, climb to 10 mil b/d by March 2018 -- US EIA. The previous record was 9.6 million bopd in 1970.

Priceless! What a doofus!
EIA: global oil oversupply could return in 2018.  Well, duh.

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Homer Simpson

We now know what happened to British Airways when the entire system went down for 72 hours.

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Ohio's Out

From The Washington Post:

One of the nation’s biggest health insurers says it will not return to Ohio’s public insurance exchanges next year, a decision that could open more holes in the Affordable Care Act’s increasingly thin system for helping people buy coverage.

The move announced Tuesday by Anthem Inc. could leave shoppers in 20 counties without an option for buying individual coverage on the exchange unless another insurer steps in, according to data compiled by The Associated Press and the consulting firm Avalere.

The Political Page, T+118 -- May 18, 2017; The Sea-Road To Scotland

Nice jobs report:

• consensus forecast: 240K
• actual: 232K -- wow
• change: down 4,000 from previous report of 236,000 (unrevised)

Wind: the sea-road to Scotland. Another wind disaster. From Bloomberg.  Bottom line: off-shore wind can't "make it" without government subsidies. Meanwhile, these ventures put budgets of small countries at great risk.

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Ryan Disarray

One is beginning to wonder if "Ryan" has the experience necessary to "run" the US House. Now we learn that "Ryan" has not sent the "repeal and replace" ObamaCare bill that the US house passed (wink, wink) to the US Senate. Wow. A tweaking of the bill might require another vote. LOL.

I think it's time for President Trump to issue an executive order that the IRS and/or the Justice Department will not take action against any state or any corporation or any person that does not follow the "employer mandate" guidelines. ObamaCare would still be the law of the land but like "sanctuary cities and illegal immigrants," states, corporations, and CEOs would not be held liable if they were not able to meet the ObamaCare guidelines.

The Political Page, T+104 -- May 4, 2017

But the ads are funny. A talking head made an interesting point about millennials yesterday: it had to do with "accident forgiveness" that is now a marketing gimmick for car insurance companies. It turns out someone noted this two years ago. It also explains why so many folks are excited about "driverless cars." (Hint: think parallel parking.)

First time unemployment claims: posted.

• prior: 257,000
• consensus: 246K
• consensus range: 245 - 250,000
• actual: a huge beat -- dropped 19,000 to 238,000  
• 4-week moving average: 243,000
• it will be interesting to see how the mainstream media reports this

Buy on the rumor; sell on the news. Hope spring eternal. Bait and switch: some suggest that futures today reflect a "repeal and replace" bill in the US House. LOL.

Similarities: timing of the US House vote is like NASA launches -- "T-minus three hours and holding." I wouldn't be surprised if there's a "whether" delay -- "whether or not it's worth holding the vote."

Death spiral: Aetna will exit Virginia in 2018. 

The Political Page, T+69 -- March 31, 2017

Updates

April 4, 2017: Knoxville could be first US city where ObamaCare fails. CNN reports that Humana, the only insurer left on the Affordable Care exchange in the Knoxville area, is set to exit the market in 2018.

Original Post

 

Penal shock! Maybe it's just me but I find it amazing/striking/depressing/surprising (all of the above) that more than 20% of federal prisoners are non-citizens.  Link here.

Health Shock! ObamaCare stalwart Anthem seen likely to retreat for 2018. Data points from Bloombergsupports Trump's narrative -- Bloomberg:

• Anthem likely to "pull back"
• Anthem is "leaning toward exiting a high percentage of the 144 rating regions in which it currently participates"
• Anthem was one of the few big insurers that stuck with ACA
• UnitedHealth Group and Aetna Inc. have already exited most states
• Humana planning to stop offering individual ACA plans entirely for 2018

Surrendering! Fox Business News hypes fight between Trump and the GOP faction that killed the Ryan-TrumpCare bill. Spokesman for the latter appears to have gotten the message. Says new bill will be passed before Easter. If that happens, speaks volumes about presidential tweets.

ND Budget. UND may cut women's hockey, and both men's and women's swimming programs in response to "state's bleak financial picture." I think Rob Port over at SayAnythingBlog will discuss this at length. It's only a matter of time before the state legislature taps the untappable Legacy Fund.

Legacy Fund. Through March, 2017, total deposits to the Legacy Fund were $3,833,534,676. Deposits to the fund do not equal value of assets in the Legacy Fund. According to the state's annual budget report released June 30, 2016, data points for the Legacy Fund (and this is why the fund's investment strategy is not talked about much):

• fair value: $3,809,485,184
• rates of return (for fiscal year ending 6/30):
• 2016: 1.06%
• 2015: 3.31%
• 2014: 6.64%
• 2013: 1.15%
• 2012: --

Could The GOP Come Out Looking Good With Regard To ObamaCare -- The Political Page, T+52 -- March 13, 2017

Declare victory and shut down Congress for all of April, instead of staying in session just eight days as it is.

Fact: everyone knows ObamaCare will die one way or the other. Some advocate doing nothing and letting ObamaCare simply die on its own.

Alt-left: Pelosi, Schumer, et al think they are in a win-win situation. If ObamaCare implodes and the GOP has done nothing to prevent the debacle, the GOP will be blamed. If GOP assumes the mantle of US healthcare, by definition the GOP has lost.

It's all about the narrative: the GOP should simply say that too many folks -- including the "Deep State" and the mainstream media love ObamaCare so the GOP will leave it alone. Declare victory and move on. Continue to call US healthcare ObamaCare and it will be the gift that keeps on giving. The only ones reminding us of the Trump/GOP pledge to "repeal and replace" will be the alt-left media (which will blame Trump/GOP regardless) and the randites. [The randites are not to be confused with the Ronettes.]

Fallout: the fallout of "declaring victory, moving on" can hardly be any worse than stepping into this pile of manure.

Walking In The Rain, The Ronettes

American Apparel Begins Laying Off 2,400 Workers In Southern California -- January 16, 2017

The California Page

From The Los Angeles Times:

• final chapter as America's largest garment maker
• the company has about 3,500 factor works in southern California
• Canadian clothing maker Gildan Activewear, at auction, won the right to buy the American Apparel brand and some manufacturing equipment; it will not assume AA's leases on its factories
• AA's 110 stores and website will remain open until at least April
• Gildan Activewear has yet to decide where it will make AA goods; most of its hubs are in Central America and the Caribbean

Let's see if Trump tweets.

This goes all the way back to Ross Perot, doesn't it? 1992. Pretty prescient.

And all this time we have been focused on global warming.

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California's Deficit Is Back

From The Los Angeles Times:

Less than four years after declaring California’s budget balanced for the foreseeable future, Gov. Jerry Brown on Tuesday said the state is projected to run a $1.6-billion deficit by next summer — a noticeable shift in the state’s fiscal stability that could worsen under federal spending cuts championed by President-elect Donald Trump.

“The trajectory of revenue growth is declining,” Brown said in unveiling his $179.5-billion plan for the fiscal year that begins in July.

The bullet train will still be funded; not sure about K-12 education.

California Dreamin', Mamas and Papas

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Not To Worry

California governor proposes 42% gasoline tax hike to bail out CALPERS.  No major mainstream media outlet reported this; it was reported over a 3-day weekeknd.

Gov. Brown’s willingness to try raising gasoline taxes by 17 cents a gallon, and on vehicle registration fees by $65, is a sign of the insolvency risk from the exploding cost of California Public Employees’ Retirement System (CalPERS) public  pensions.

Brown’s draft 2017-2018 budget already includes a $524 million increase for the public pension contribution. That amounts to an 11 percent increase over this year’s $5.3 billion cost.

The CalPERS contribution increase would have actually been another $516 million more next year, but the world’s biggest pubic pension is allowing the State of California to “smooth” the higher pension funding cost by reducing its projected investment return expectation from 7.5 percent to 7 percent. But that smoothing will lock California into about a $524 million CalPERS contribution increase for each of the next four years.

And all this time we've been focused on the "never-ending" drought (it's over) and global warming.

By the way, much more at the link. Much more than David Muir over at ABC News would ever tell you.

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31 States Bought Into This Including California

Medicaid provides health insurance for lower income folks. Cost is shared between US government and the states.

States historically have been given great latitude in determining who is eligible for Medicaid. However, under ObamaCare, the federal government determined eligibility. States, through a court decision, are not required to accept Medicaid expansion under ObamaCare.

Thirty-one states did accept this expansion and have greatly expanded Medicaid enrollment under ObamaCare.

If ObamaCare is repealed, the states are left holding the bag with the greatly increased enrollment. At least that's how I understand it. But it's probably more complicated than that. From NBC:

States such as California, New Jersey, Kentucky and Arkansas, which have expanded their Medicaid programs, have seen sharp decreases in their uninsured rates. States that didn't expand Medicaid, such as Texas, Florida and Virginia, did not experience as much of a drop in the number of people without health insurance. So far, 31 states and the District of Columbia have expanded their Medicaid programs under the ACA to cover adults who earn up to 138 percent of the federal poverty level — or $16,394 per year. 

By the way, remember that vote in the Senate that was the first step in repealing ObamaCare? I never understood it, but this is what it was all about. From Michale Hiltzik in The Los Angeles Times before the  vote:

More than political risk stands in the way. Numerous provisions of the Affordable Care Act are subject to filibuster in the Senate, which the GOP doesn’t have 60 votes to avoid. According to healthcare expert Timothy Jost, an emeritus law professor at Washington and Lee University, those may be safe from repeal. As it happens, they include many consumer-protection reforms that are very popular, including the ban on exclusions or higher premiums for preexisting conditions, and caps on annual and lifetime benefits.

The Senate voted to end filibusters on any part of ObamaCare -- at least, again, that's how I  understand it. Could be wrong.

Later: see first comment. A reader explains it in less than a paragraph. Much appreciated.

Scorecard -- Top Ten Predictions For 2016 (Last Year) -- RBN Energy -- January 2, 2017

Natural gas: Arctic blast, huge draw, and prices falling. What gives? Richard Zeits over at SeekingAlpha. 

RBN Energy:  RBN Energy takes a look at its 2016 "prognostications" and evaluates how well they did.

Active rigs:

	1/2/2017	01/02/2016	01/02/2015	01/02/2014	01/02/2013
Active Rigs	39	60	171	183	183

For those interested in the Bakken, nothing that follows has anything to do with the Bakken. 

I think it's time for waffles. And another pajama day here in north Texas. Cold, wet, dark, loud.

By the way, speaking of waffles, we were introduced to the Waffle House phenomenon when we returned to the United States following a 13-year tour of Europe and Asia, courtesy of the United States Air Force.

We thought moving back to the states after being gone for thirteen years was going to be a shock. We had lost a decade of US "culture." I am still catching up to all the music that hit the charts from 1984 to 1997. But our return was less than a shock than it could have been. Our first stateside assignment after two years in Turkey was Alabama. Our teenage daughters (and my wife, for that matter) noted a lot of similarities between Turkey (the country) and Alabama (one of the 57 states).

Our biggest shock, and I think that's the correct word, was Waffle House. If you northerners have not had the chance to experience the Waffle House experience you are in for quite a treat. Even the Coen brothers were taken aback by the experience (video clip not shown due to language).

Waffle House is ubiquitous in the Deep South, but not as many here in north Texas. I am aware of two (and I assume there are many, many more). One is north of Ft Worth, near the Texas Motor Speedway (which seems fitting). The other, I keep forgetting, except I noted it yesterday when bicycling, is just down the hill from our nearby Wal-Mart.

Speaking of Wal-Mart. A lot of folks, me included, have problems with some  refugees coming to America wearing their native dress, suggesting there is little interest by some to become part of the American culture (which might be understandable). After seeing some of the body shapes and "un-dress" in Wal-Mart, I'm beginning to think the US would be well served if a certain segment of the population would start wearing the abaya. Just saying.

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Too Big To Merge

Although the Washington Post slanted the story a different way, the fact is the merger between Blockbuster video and Hollywood Video was nixed by acknowledgement that the US government would probably not allow it based on anti-competition (monopoly) grounds.

I was always quite surprised that Cabela's thought it could buy Bass Pro Shops. Can anyone name any other national hunting and fishing mega-retail that can possibly come close to what Cabela's or Bass Pro Shops offer?

It turns out the FTC is taking a "second look."

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Last "Man" Standing

I sent this in an e-mail to a reader, with some slight editing. It's not ready for prime time, but I want to post it before I forget it:

It looks like the GOP House is serious about ObamaCare being first thing on their agenda.

It will be fascinating to watch. If they can kill it, regardless of what health insurance looks like in is place, the ONLY thing that Obama has for a legacy is gone. The textbooks will NOT have one PROGRAM that they can point to that Obama accomplished in his administration (that lasted).

I still think the GOP runs huge risks on this, but if they get this behind them within the first six months, the public might forget, but if this drags on and whatever replaces it is even worse, the media will have a field day. As it is, the media is going to be all over this.

The good news: I don't think anyone with any money or power supports ObamaCare. The health care industry does not support it; neither Trump nor 50%-plus of Congress supports it, and I doubt Schumer wants to stake his career on an Obama program. Pelosi may be the last "man" standing.

Update On Natural Gas Pipelines To New England -- RBN Energy; Trump With 10-Point Lead Among Those Who Say They Have Definitely Decided -- November 3, 2016

Gotta love them Norwegians: nearly 15,000 Norwegians apply to hunt 47 wolves in controversial culling that will slash population by 70% - VRT -- from "Breaking News." #WolvesLivesMatter; and, the movie, "No Country For Old Wolves."

Poll: I've always wondered if Trump might actually go over 50%. When I saw the USC-Los Angeles Times poll yesterday, I thought it might be possible. I haven't followed the Rasmussen poll very closely so I don't know if this has happened before, but Rasmussen is reporting that Trump is polling 50%+ among those who say they have definitely decided. In the "overall" poll, Trump leads Hillary, 45% - 42%. But look at this:

Eighty-eight percent (88%) of voters say they are now certain how they will vote. Among these voters, Trump has a 10-point lead over Clinton – 53% to 43%. Johnson gets two percent (2%) and Stein one percent (1%). This is the first time any candidate has crossed the 50% mark. Among those who still could change their minds, it’s Clinton 36%, Trump 36%, Johnson 22% and Stein six percent.

Russia's Northern Fleet: it appears the fleet is loitering just east of Crete. Its position has not changed much in the past 24 hours -- again, just off-shore from Crete suggesting there may be some re-supply activity. 

ObamaCare: as if it's not bad enough, another insurer has said it will leave ObamaCare if results don't improve. Anthem says it may exit ObamaCare. 

Health insurer Anthem Inc., which has so far stuck with the Obamacare markets as rivals pulled back, said it may retreat in 2018 if its financial results under the program don’t improve next year.

Anthem’s comments up the stakes for the Obama administration as the enrollment season for 2017 Affordable Care Act plans begins, with consumers already facing fewer choices and higher premiums in many markets.

Earlier this year, in Forbes: Anthem Gains Obamacare Customers And Sees Profits, Expansion Ahead.

Anthem’s first quarter earnings were better than expected as the company welcomed 1 million new customers across its businesses since the end of last year, including 184,000 who signed up for coverage on public exchanges under the Affordable Care Act.

In contrast to UnitedHealth Group, which is scaling back to a handful of public exchanges to sell individual policies, Anthem ANTM sees the so-called Obamacare business as a growth opportunity. Anthem, which sells policies under the Blue Cross and Blue Shield brand in 14 states, expects to remain in those markets next year with the potential for expansion should its merger with Cigna be approved. [Earlier this year, BC/BS pulled out of Arizona, ground zero for ObamaCare.]

“I think a sustainable model can be built,” Anthem chairman Joe Swedish said of public exchanges in an hour-long conference call this morning with analysts. “This remains a dynamic marketplace. Over time, we do believe we are well positioned for sustained growth.”

So what happened between April, 2016, and November, 2016?

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Back to the Bakken

Active rigs:

	11/3/2016	11/03/2015	11/03/2014	11/03/2013	11/03/2012
Active Rigs	35	69	186	181	188

RBN Energy: New England keeps lid on new natural gas access.

Natural gas utilities and power generators in southern New England will have access to additional gas supplies this winter as Spectra Energy brings its 342-MMcf/d Algonquin Incremental Market (AIM) project into service. But Kinder Morgan’s planned 72-MMcf/d Connecticut Expansion has been set back a year (to November 2017) due to permitting delays and, more important, a multi-state effort to enable electric distribution utilities (EDUs) to contract for gas pipeline capacity for generators appears to have died, and with it prospects for at least one major project.

Is New England destined to remain gas-supply constrained for years to come?  Today we consider recent developments regarding gas supply in the northeastern corner of the U.S., and what they may mean for Marcellus/Utica producers.

Saudi Aramco: McDermott adds a new office, 300 additional workers, increasing its engineering capacity in Saudi Arabia. Data points:

• In-Kingdom Total Value Add (IKTVA) -- established by Saudi Aramco to support increased levels of localization inside the kingdom
• McDermott added three new projects for Saudi Aramco, 2Q16
• Saudi Aramco still on track for IPO in 2018

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The Trainwreck

First it was The Wall Street Journal, then The Washington Post, and now CBS: "customers" shocked by high ObamaCare 2017 premiums.

GOP needs to run, not walk, away from this debacle. By March, 2017, ObamaCare will be dead. Its only cheerleader will most likely be out of office.