$128 Billion In Debt -- Petrobras -- November 20, 2015

Updates

November 21, 2015: the reader who posted the first comment about Petrobras (see below) may have been right on target. Reuters/Rigzone is reporting that shares of Petrobras steadied, reversed, and rose yesterday on news that the Brazilian government is ready to "bail them out."

Petrobras was leading LatAm credit markets higher on Friday following news that the Brazilian government was considering a plan to inject fresh capital into the beleaguered oil company. 

The issuer's 2024s were extending Thursday's late-day rally to trade at 83.50-84.00 on Friday, marking a five-point leap for the week. 

The company's Century bond was up at 72.75, or 5.5 points higher on the week. 

Under the plan, the Brazilian Treasury would transfer hybrid securities to Petrobras (Ba2/BB/BBB-), which would count the securities as equity until it sold new stock, according to Reuters citing a local report. 

November 20, 2015:  Sometimes I post something, not always asking the next obvious question. I bring that up because shortly after posting the note below about Petrobras' massive debt, there is now talk that Petrobras might be forced to declare bankruptcy. The question is: who would benefit? On business talk radio in the local area -- just north of where ExxonMobil is headquartered, Irving, TX -- the talk is that ExxonMobil would likely benefit. ExxonMobil has lots of "dry powder." According to Yahoo!Finance, ExxonMobil has about $4 billion in cash, and about $33 billion in annual operating cash flow.
 

Original Post

 

This story is being reported "everywhere." This link takes you to Bloomberg/Rigzone:

The debt clock is ticking down at Brazil’s troubled oil giant, Petrobras.

Next up: $24 billion of repayments over 24 months.

That’s a towering hurdle for a company that hasn’t generated free cash flow for eight years and whose borrowing rates are soaring. Annual debt servicing costs have doubled to 20.3 billion reais ($5.4 billion) in the past three years. 

Petrobras has a massive $128 billion in debt.

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The Gift That Keeps On Giving

November 20, 2015: HHS says "government is obligated to bailout insurance companies" who take losses under ObamaCare. This story is starting to snowball. I can't wait to see the ObamaCare supporters lobbying to bailout the insurance companies. But this was certainly crazy: between 2014 and 2016, insurance companies losing money on ObamaCare will be "reimbursed" for those losses -- the money coming from the insurance companies that did "well."

November 20, 2015: wow, this is really getting bad. Over at Bloomberg:

This was part of a terrible, horrible, no good, very bad news cycle for Obamacare; as ProPublica journalist Charles Ornstein said on Twitter, “Not since 2013 have I seen such a disastrous stream of bad news headlines for Obamacare in one 24-hour stretch.” 

Thank goodness the GOP did not defund ObamaCare; all of this would have been blamed on the GOP.

November 20, 2015: CNBC --

For anyone involved with the Affordable Care Act, yesterday was a big day.

It's the day any vestige of the notion that the Obamacare insurance exchanges have a chance of being successful in their current form lost whatever credibility was remaining.
The nation's biggest insurance company, with more than half of its earnings tied to its relationship to the federal government, just announced that it has had enough of Obamacare and if it isn't fixed in the next few months it is going to bail.

It's not just UnitedHealth Group that is having very serious red ink problems over Obamacare.

Goldman Sachs just reported that the thirty not-for-profit Blue Cross plans are expected to lose money as a group for the first time since the 1980s—with the Obamacare exchanges being the key driver.

Already, 12 of the 23 Obamacare created health insurance co-ops have become insolvent with almost all of the rest losing money—100 percent of their business is Obamacare business.

The Obama administration itself has reported that in its risk corridor reinsurance program, the carriers losing money are doing so at a rate eight times larger than the few carriers that are making money.

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"S"

I doubt anyone will want it, but "S" might soon be available as a NYSE ticker symbol.  Reuters is reporting that Sprint is borrowing more money, has lowered its guidance, and its share price dropped another 4% on a day that the market went up about a 100 points.

Disclaimer: this is not an investment site. Do not make any investment or financial decisions based on what you read here or think you may have read here. I have never invested in Sprint -- well, maybe 20 or 30 years ago, I forget -- and have no plans to do so now. I follow Sprint because I have a Sprint phone account (Samsung flip phone). See Huffington Post on the flip phone.

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Sing it, George!

Just How Bad Is It? ObamaCare Premiums In Tennessee Up 36%; Iowa Up 29% -- NY Times -- October 31, 2015

While reading this, remember that nearly half of all non-profit healthcare co-ops created under ObamaCare in 2011 have collapsed due to inadequate Democratic funding. 

There is no possible way to spin this and The New York Times does not:

In Tennessee, the state insurance commissioner approved a 36 percent rate increase for the largest health insurer in the state’s individual marketplace. In Iowa, the commissioner approved rate increases averaging 29 percent for the state’s dominant insurer.

Health insurance consumers logging into HealthCare.gov on Sunday for the first day of the Affordable Care Act’s third open enrollment season may be in for sticker shock, unless they are willing to shop around. Federal officials acknowledged on Friday that many people would need to pick new plans to avoid substantial increases in premiums.

Wow. 36%. 39%.

Those are just the premiums. And what do these premiums get you? $5,000 deductibles.

“It really shocks me to see these plans with $5,000 deductibles,” Belinda Greb, 56, of Vida, OR, said in an interview. “It becomes an area of stress as opposed to making me feel secure.”

Federal subsidies for low- and moderate-income consumers will keep pace with premiums for a benchmark plan, the second-lowest-cost “silver” plan, Mr. Frank said, and consumers who choose that plan can protect themselves and their wallets.

These, of course, would be the policies that provide the least benefits, the least coverage, the highest deductibles. 

But again, the premiums are the least of their problems, and just the start of their problems.

Imagine thinking you have health care insurance and then finding out you have $5,000 of out-of-pocket deductibles before the benefits kick in.  

The GOP is so fortunate it did not defund ObamaCare. 

The article simply gets worse and worse as it goes one:

Ms. Greb said she was too upset to finish a letter she got recently from her insurer, Moda Health, that said her “bronze” health plan, for which she pays $213 a month after a subsidy of $175, would not be offered through the exchange in 2016.

The company offered her a similar plan that would cost $265 a month if her subsidy stays the same.

The new plan recommended by Moda has a deductible, the amount she must pay for care before the insurance begins to pay, of $5,500, up from $4,250 in her current plan, she said. “People are putting off care because of the expense.”

And insurers are dropping out resulting in less competition, higher premiums and higher deductibles:

But, an administration report said Friday, only one insurer is offering coverage in the marketplace in Wyoming, and consumers have a choice of just two insurers in Alaska, Hawaii, Oklahoma, South Dakota and West Virginia. And that data, current as of Oct. 19, did not reflect the recent collapse of nonprofit insurance cooperatives in South Carolina and Utah.

And this is from The New York Times.

Nearly half of all non-profit healthcare co-ops created under ObamaCare in 2011 have collapsed due to inadequate Democratic funding.  

Friday, July 31, 2015 -- Part III

 Updates

August 1, 2015: the wing has arrived at a French facility.  The linked story is dated August 1, 2015, but no time-stamp was placed.

Original Post

 

Is it just me or does it seem we are being slow-rolled on the investigation of that piece of wing found off Madagascar (Reunion Island), thought to be part of a Boeing 777? Only one Boeing 777 has ever been lost. This morning, a news story on the radio reported that the wing part is being flown to some military installation where it will be studied.

Call me naive, but you can't tell me that Boeing couldn't have had a team on the ground by now, and verified "yes/no" it was part of a Boeing 777?

This seems to be dragging out much longer than seems reasonable.

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Lost Decade

From AEIdeas: Lost Decade? The US is about to have its first 10-year period since World War II without at least one year of 3% growth. [Another reason, no doubt, the Obama administration decided a few months ago to revise the formula for calculating the nation's GDP.] This will be the legacy President Obama leaves us. 

If you read the Bloomberg article, which I doubt any will do, just remember that President Obama presided over the second lost decade. (The first lost decade, 1998 - 2008; the second lost decade, 2008 - present).

`This has been a uniquely slow period of growth that's delivered very little for low- and middle-income households,'' said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities in Washington and former chief economist for Vice President Joe Biden. ``We need to grow faster and more equitably.'' 

The last time America expanded at 3 percent-plus for the year was 2005, according to Commerce data.  That means the nation is on track to miss such growth for an entire decade, a first in the post-World War II era. Why?

Notice the words that were not seen in the linked article: TrainWreck, ObamaCare, Keystone, wind energy, solar energy, Solyndra, trillion-dollar stimulus, Fed rate.

Notice the phrase in the linked article: " ... a uniquely slow period of growth." Unique = one.

And this phrase: "... that's delivered very little for low- and middle-income households." Very little? How about nothing?

At the same that story was being read, Reuters reported that GE may ship $10 billion in work overseas as U.S. trade bank languishes. Not much more needs to be said. 

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Native Americans Didn't Read The Act Either

NativeAmericans on the hook for big fine from US government for "avoiding" OabamaCare.

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American Pie, Don McLean

A 25 Percent Increase In Health Care Premiums; Don't Fret, It Could Be Worse -- 33 Percent; 54% In Minnesota; Reality Bites; It's Just Beginning -- July 3, 2015

It turns out those early predictions are turning out to be correct. (A huge "thank you" to a reader for sending me the link.)

Three to six months ago there was talk that ObamaCare premiums were going to be significantly higher in 2016.

Then, in the past couple of weeks, there was some chatter suggesting 2016 healthcare premium increases would not be all that significant. That surprised me because the tea leaves and common sense suggested just the opposite. Even President Obama, I believe, in a recent speech said the 2016 premium increases would not be that severe. Of course, he also told us we could keep our same health plan if we liked it.

Reality bites. Pundits can talk about what-if's all day, but it's already starting. Look at these premium increases already approved in the state of Oregon. The New York Times is reporting:

The Oregon insurance commissioner, Laura N. Cali, has just approved 2016 rate increases for companies that cover more than 220,000 people. Moda Health Plan, which has the largest enrollment in the state, received a 25 percent increase, and the second-largest plan, LifeWise, received a 33 percent increase.

Jesse Ellis O’Brien, a health advocate at the Oregon State Public Interest Research Group, said: “Rate increases will be bigger in 2016 than they have been for years and years and will have a profound effect on consumers here. Some may start wondering if insurance is affordable or if it’s worth the money.”

Minnesota? How about a 50% increase?

Blue Cross and Blue Shield plans — market leaders in many states — are seeking rate increases that average 23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota, according to documents posted online by the federal government and state insurance commissioners and interviews with insurance executives.

The more you read, the worse it gets:

“Healthier people chose to keep their plans,” said Amy L. Bowen, a spokeswoman for the Geisinger Health Plan in Pennsylvania, and people buying insurance on the exchange were therefore sicker than expected. Geisinger, often praised as a national model of coordinated care, has requested an increase of 40 percent in rates for its health maintenance organization.

Wow. All that money individuals are saving on gasoline will go toward health care premiums. Do you think employers are looking to hire more employees with healthcare cares increasing by 50%? The best news in the article above:

“People are getting services they needed for a very long time,” Ms. Williams, a spokesperson for one health care insurer, said. “There was a pent-up demand. Over the next three years, I hope, rates will start to stabilize.”

Over the next three years! You mean folks can look forward to 30% increases each of the next three years in their healthcare premium?

One last note:

“Because of the Affordable Care Act,” Mr. Obama told supporters in 2013, “insurance companies have to spend at least 80 percent of every dollar that you pay in premiums on your health care — not on overhead, not on profits, but on you.”

In financial statements filed with the government in the last two months, some insurers said that their claims payments totaled not just 80 percent, but more than 100 percent of premiums. And that, they said, is unsustainable.

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Drought In California

I've been out here for about one week now; it is interesting how quickly we adapt to a water shortage. I don't know if folks outside California caught this statistic but the state used 29% less water in May, 2015, than they did in May, 2013. The governor had mandated a 25% decrease.

The biggest residential cutback, of course, has been outside watering, and things are starting to turn brown. But even there, there are ways to minimize the damage. My wife puts buckets in the shower, and we now collect all waste water from the sinks, watering outside plants with the water from the shower buckets and the sink water.

We use a minimum amount of water for washing dishes, and our frequency and duration of showers has changed dramatically. Although we haven't gone this next step, families with at least two bathrooms have additional options to really decrease water usage/waste from toilet use. One toilet could be reserved for water waste only, and bricks placed in the toilet tank to decrease the amount of water to a minimum.

But a 30% decrease in water usage by residential customers is quite remarkable, and I doubt -- except for outside watering -- not much has changed for most Californians.

We Have Another Pocahontas -- June 12, 2015

This is almost too funny to post. The quotes are, well, judge for yourself. FoxNews is reporting:

Controversy erupted around a local NAACP leader in Washington state Thursday after family members told a local newspaper that she had misrepresented herself as black. 

Rachel Dolezal is the head of the NAACP's chapter in Spokane and is also a part-time professor in the Africana Studies Program at Eastern Washington University.

The Spokane Spokesman-Review says that Dolezal described her ethnicity as white, black, and American Indian in an application to be the volunteer chairwoman of the city's Police Ombudsman Commission, a position to which she was duly appointed. 

But Dolezal's mother, Ruthanne, told the paper that the family's actual ancestry is Czech, Swedish, and German, along with some "faint traces" of Native American heritage.

One can see the photograph of this young, should we say "blonde" woman, at the linked article.

I particularly like the "faint traces" of Native American heritage. No doubt she is referring to her "Elizabeth (Pocahontas) Warren high cheek bones."

Additional quotes:

Rachel Dolezal did not immediately respond to her mother's claim when contacted by the Spokesman-Review, first saying "I feel like I owe [the NAACP] executive committee conversation" about what she called a "multi-layered issue."

After being contacted again, Dolezal said, "That question is not as easy as it seems. There's a lot of complexities ... and I don’t know that everyone would understand that." Later, she said, "We're all from the African continent," an apparent reference to scientific studies tracing the origin of human life to east Africa.

Hillary and the entire GOP presidential slate are writing these phrases down as quickly as they can. These are priceless.

• "I owe them a conversation."
• "That question is not as easy as it seems."
• "There's a lot of complexity."
• "We're all from Africa."

 My favorite:

• "Say what?"

More from the story:

Ruthanne Dolezal said that her daughter began to "disguise herself" in the mid-2000s, after the family had adopted four African-American children.

About the time Elizabeth Warren was making history.

How can I go on?

How Can I Go On, Freddy Mercury and Monseratt Caballe
Memo to self: insert "The Great Pretender" here.

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ObamaCare

From The Wall Street Journal, another huge ObamaCare myth. Those promises of annual spending caps. Absolutely false.

Saudi Setting "Us" Up For $200 Oil? -- May 18, 2015

From Seeking Alpha:

• More than $100B of spending on at least 26 major projects by the world’s energy companies has been slowed, postponed or canceled in the wake of plunging oil prices, including Royal Dutch Shell, BP, ConocoPhillips, and Statoi, according to a Financial Times analysis.
• One of the biggest developments to be shelved, Shell’s Arrow liquefied natural gas plant in Australia, accounted for almost a quarter of the planned spending reduction.
• Western Canada is suffering the most from the retrenchment, with nine Canadian oil sands projects pulled back, each ranging from $1B-$10B in planned expenditure, the analysis says.
• According to Morgan Stanley, which looked at capex guidance for 2015 from more than 120 companies, investment is expected to drop by a quarter this year to $389B from $520B.

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ObamaCare to the States: Gotcha!

This story started as a small story posted at a nondescript site either yesterday or early today. I don't recall how I came across. I elected not to post it simply for that reason: it was hardly news and it was posted at a nondescript site.

However, the story is now being picked up by some major outlets, and will grow legs through the 2016 presidential race. One party will use the Iraq implosion to try to take our minds off the implosion of ObamaCare.

Politico is reporting:

Medicaid enrollment under Obamacare is skyrocketing past expectations, giving some GOP governors who oppose the program’s expansion under the health law an “I told you so” moment.

More than 12 million people have signed up for Medicaid under the Affordable Care Act since January 2014, and in some states that embraced that piece of the law, enrollment is hundreds of thousands beyond initial projections. Seven states have seen particularly big surges, with their overruns totaling nearly 1.4 million low-income adults.

The federal government is picking up 100 percent of the expansion costs through 2016, and then will gradually cut back to 90 percent. But some conservatives say the costs that will fall on the states are just too big a burden, and they see vindication in the signup numbers, proof that costs will be more than projected as they have warned all along.
Obamacare originally expanded Medicaid — which traditionally served poor children, pregnant women and the disabled — to all childless low-income adults with incomes up to 138 percent of the federal poverty level (about $16,250 for an individual) across the country. But the Supreme Court made expansion optional in 2012. And 21 states, mostly with GOP governors, have resisted.

“The expansion of Obamacare will cost our state taxpayers $5 billion,” Florida Gov. Rick Scott said in an interview with POLITICO last week, referring to the 10-year cost. “Name the health care program — I think the only one is Medicare Part D — that cost less than what they initially anticipated…Historically, if you look at the numbers, with the growth in Medicare costs, Medicaid costs, it’s always multiples.” A bitter critic of Obamacare, Scott at one point surprisingly backed expansion, but withdrew his support earlier this year. His state legislature is deeply split on Medicaid policy.

You simply wonder what Florida's Governor Rick Scott was ever thinking. 

The White House provides us the list of the 22 states that resisted this scam. According to the White House, North Dakota supported the president on this one, along with Minnesota and Iowa, and the entire west coast (Washington, Oregon, and California).

Montana and Texas voted for sovereignty, as did Warren Buffett's state of Nebraska.

A Look At 2016 ObamaCare Premiums -- May 16, 2015

Investor Business Times is reporting:

Those who think their current health insurance plans are too expensive should brace themselves for 2016, at least based on the recent predictions of one healthcare executive. Health insurance companies are likely to demand even more money in the coming year from people seeking to buy healthcare.

"You cannot have every doctor in your network, very low copays, broad benefits and lower costs. It just can't work that way," [an analyst] said, calling such demands, including for insurance companies to charge lower premiums or monthly fees that people pay for to have insurance coverage, "unrealistic."

Under the Affordable Care Act, landmark legislation frequently referred to as Obamacare, more than 14 million people in the United States gained health insurance. Nearly 12 million people signed up for health coverage plans on exchanges created under Obamacare, and the law, despite being controversial, has been widely credited with making health insurance and medical care more affordable and accessible to millions across the country. Nearly nine out of 10 adults in the U.S. have health insurance, a Gallup poll published in April showed -- the lowest-ever rate of uninsured people in the United States.

Costs were likely to go up because a high percentage of those who had newly bought health insurance through the Affordable Care Act needed expensive medical care that, until they bought insurance, had been delayed. As a result, health insurers were finding they had to spend more to cover the expensive medical bills, and because fewer younger -- and presumably healthier -- people had signed up for coverage, companies had smaller pool of funding to draw on.

Even as premiums might be about to go up, a study published Thursday by the consumer healthcare nonprofit group Families USA showed that one out of four adults who bought health insurance through exchanges created under the Affordable Care Act skipped necessary medical treatment because the care was too expensive. These adults had paid monthly premiums, some of them subsidized by the government, for health insurance but were nevertheless unable to afford the very care it was supposed to provide.

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ObamaCare: The HealthCare Act That Keeps On Giving

The AP is reporting:

The Health Insurance Providers Fee was aimed at insurance companies. The thinking went: Because insurers would gain a windfall of customers, they ought to help pay for the expansion of coverage. Insurers say they have raised prices for individuals and small businesses to cover the new tax.

As it turns out, they are raising their prices to state Medicaid programs, too.

The federal government issued guidance in October requiring states to build the tax into what they pay for-profit Medicaid health plans that serve low-income people. The first year's tax was due to the IRS in September, and state governments are now settling up with insurance companies.

It works like this: State governments pay insurers for the tax. The insurers then pay the tax to the federal government. The federal government then reimburses part of the cost to the states.

It may sound absurd, but it's not amusing to state governments, which wind up losing 54 cents for every dollar of the insurance tax. State taxpayers end up the biggest losers, without any added benefit to their state's low-income Medicaid patients.

Remember: the health care industry wrote the law. And folks still write to tell me how wrong I am on ObamaCare. Some folks aren't paying attention. 

Too lat now, but the mainstream media is finally paying attention. 

Catching Up -- April 24, 2015; ObamaCare Could Be Dead -- Financially -- In California

I have about one hundred links waiting to be looked at, read, posted at the blog -- links sent to me by readers.

This is the first such link; it will take awhile to catch up.

Disclaimer: this is not an investment site. Do not make in investment or financial decisions based on what you read here or what you think you may have read here.

From Seeking Alpha:

• Denbury Resources has a very low operating cost of $22.64 a barrel, and this has allowed the company to remain profitable despite weak energy prices.
• Denbury's top line has dropped in the past year, but that could change as tensions in the Middle East and increasing oil demand could push prices to $80 a barrel.
• Denbury has hedged 75% its production for 2015 at $85 a barrel, which will shield the company in case of a drop in oil prices.
• Denbury's interest coverage has increased significantly and its debt-equity ratio has dropped, signifying that the company is strengthening its balance sheet. 

Also from the story:

Looking ahead, the trend is expected to continue as industry experts are of the opinion that Brent crude might trade at $78-$80 a barrel by the end of the year. This target does not look entirely out of reach, as several factors will support the improvement in oil pricing going forward, namely production cuts in the U.S. and an increase in demand across the globe.

More importantly, Saudi Arabia's war on Yemen could disrupt supplies from the region, lending more support to oil prices.

If Saudi continues to carry on airstrikes against Yemen, crude oil prices can rise further as "the Bab el-Mandeb Strait on Yemen's southern coast controls access to the Red Sea, Suez Canal and the ports of western Saudi Arabia, the world's biggest crude exporter."
Meanwhile, demand for crude oil is also anticipated to increase in the coming months as per OPEC's latest monthly market report. According to a Saudi Gazette report:

"OPEC forecasts demand at an average of 29.27 million barrels per day in the first quarter 2015, a rise of 80,000 bpd from its previous prediction made in its March report. At the same time, it said, OPEC's own total output will increase by only 680,000 barrels per day, less than the previous expectation of 850,000 barrels per day, due to lower US and other non-OPEC production."

Now, an increase in demand, coupled with lower supply, will mitigate the supply glut in the oil industry to some extent. In addition, tensions in the Middle East are another factor that could drive oil prices.

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House Of Cards

The OC Register is reporting:

After two previous extensions, the open enrollment period for Covered California ends April 30. That deadline just might prove to be the tipping point for the state’s two-year-old health insurance exchange.

That’s because this is the year Covered California is supposed to become completely self-sustaining.

Indeed, there’s no more money coming from Washington after the state exhausts the $1.1 billion it received from the federal government to get the Obamacare exchange up and running. And state law prohibits Sacramento from spending any money to keep the exchange afloat.

That presents an existential crisis for Covered California, which is facing a nearly $80 budget deficit for its 2015-16 fiscal year. Although the exchange is setting aside $200 million to cover its near-term deficit, Covered California Executive Director Peter Lee acknowledged in December that there are questions about the “long-term sustainability of the organization.”

This is why the GOP is pretty much ignoring ObamaCare.

The OC Register is a very, very conservative newspaper. The Los Angeles Times now appears to be the most liberal major newspaper in the US, far more left-leaning than even the New York Times. I assume the Los Angeles Times will have a different perspective. More from the linked story:

Mr. Lee’s disquieting assessment actually jibed with a 2013 report by the state auditor, which stated that, until the state’s health insurance exchange actually started enrolling Californians in health plans, its “future solvency” was ”uncertain.” Thus, Covered California was listed as a “high-risk” issue for the state.

The state auditor’s warning appeared prescient as of Feb. 15, which was supposed to be the close of open enrollment for 2015: Covered California had fallen 300,000 enrollees short of the goal set by Mr. Lee and the agency’s board of directors.

Indeed, Covered California’s enrollment growth for 2015 was a mere 1 percent, according to a study this month by Avalere Health. That was worst than all but two other state exchanges.

Meanwhile, California’s Obamacare exchange managed to retain only 65 percent of previous enrollees, the nation’s fourth-lowest re-enrollment rate.

We look forward to next week’s enrollment numbers from Covered California; to see if there is another near-miraculous, 11th-hour spike in enrollments enabling Mr. Lee to claim a successful enrollment period (and for opinion writers around the country to once again hail California as prima facie evidence that Obamacare is working.

I would assume the 65% retention rate -- fourth lowest in the country has much to do with early enrollees learning that the IRS was cross-checking past federal tax filings with estimated income for the years folks enrolled in ObamaCare.

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House Of Cards

The Telegraph is reporting: Top scientists start to examine fiddled global warming figures.

Last month, we are told, the world enjoyed “its hottest March since records began in 1880”. This year, according to “US government scientists”, already bids to outrank 2014 as “the hottest ever”. The figures from the US National Oceanic and Atmospheric Administration (NOAA) were based, like all the other three official surface temperature records on which the world’s scientists and politicians rely, on data compiled from a network of weather stations by NOAA’s Global Historical Climate Network (GHCN).

But here there is a puzzle. These temperature records are not the only ones with official status. The other two, Remote Sensing Systems (RSS) and the University of Alabama (UAH), are based on a quite different method of measuring temperature data, by satellites. And these, as they have increasingly done in recent years, give a strikingly different picture. Neither shows last month as anything like the hottest March on record, any more than they showed 2014 as “the hottest year ever”.

Back in January and February, two items in this column attracted more than 42,000 comments to the Telegraph website from all over the world. The provocative headings given to them were “Climategate the sequel: how we are still being tricked by flawed data on global warming” and “The fiddling with temperature data is the biggest scientific scandal”.

My cue for those pieces was the evidence multiplying from across the world that something very odd has been going on with those official surface temperature records, all of which ultimately rely on data compiled by NOAA’s GHCN. Careful analysts have come up with hundreds of examples of how the original data recorded by 3,000-odd weather stations has been “adjusted”, to exaggerate the degree to which the Earth has actually been warming. Figures from earlier decades have repeatedly been adjusted downwards and more recent data adjusted upwards, to show the Earth having warmed much more dramatically than the original data justified.

So strong is the evidence that all this calls for proper investigation that my articles have now brought a heavyweight response. The Global Warming Policy Foundation (GWPF) has enlisted an international team of five distinguished scientists to carry out a full inquiry into just how far these manipulations of the data may have distorted our picture of what is really happening to global temperatures.

Meanwhile, based on the weather report for the weekend, the Kennedys may be in Colorado skiing this weekend.

Catching Up -- Part II -- March 9, 2015; Widening The Moat -- Apple; ObamaCare Premiums About To Surge -- Congressional Budget Office; The New MacBook Pro Is Thinner Than The Mac Air -- Incredible

Reporting tomorrow:
Emerald Oil, forecast 4 cents; after market close;

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Non-Bakken News
Apple 

I am now just catching up on the Apple presentation today -- AppleWatch, MacBook, and Mac Air -- and I am really, really impressed. Pundits often refer to Apple innovations as revolutionary or evolutionary. Without question, pundits will call today's announcements "evolutionary" but in the big scheme of things, they continue to be revolutionary (and few, if any, will agree with me). 

First the Apple Watch. Investors were not impressed with the Apple Watch (presentation). Two quick points (I missed the presentation; haven't seen television, heard radio, or done much internet surfing yet today because I was out and about with the granddaughters all day, so I don't "know" much about the presentation or the investors today). Yahoo!Finance is reporting:

• the investors already knew "everything" about the Apple Watch before the presentation today (the price, the Sports Model, etc); Apple share price had already "baked" the Apple Watch in; the fact that Apple's share price did not fall was the big news
• the Apple Watch adds a new layer to the Apple ecosystem; mangling metaphors, it widens the moat

Then the new MacBook. Note: this is a MacBook -- not an Air and not a MacBook Pro. Years ago I had the white "plastic" MacBook; I loved it, but it was showing its age when my family bought me a new MacBook Pro as a gift. Now the MacBook is back. The new MacBook is the lightest one yet—and is thinner than the Air. Consumer Reports is also reporting: 

Tim Cook announced a new, 12-inch MacBook that weighs just 2 pounds. That's half a pound lighter than the current 11.6-inch MacBook Air.

The new laptop is very thin at 13.1 mm, and unlike the Air, it has a Retina display with a resolution of 2304x1440. Prices start at $1,299 for a machine with a 1.1-Ghz Core M processor, 256GB of SSD storage, and 8GB of RAM. It launches April 10.

Apple's new laptop extends the company's tradition of jettisoning ports and drives that most people still use and like. The computer will have a single USB Type C port for both charging and handling wired connections. Many people will appreciate USB C because there's no wrong way to plug in the cable—the connector is symmetrical. More significant, perhaps, is that the connection allows for much faster data transfer.

Apple Watch could be Apple's first flop of the century. Fiscal Times is reporting:

By the way, all of these options [other Smart Watches] are significantly cheaper than the Apple Watch, which begins at a hefty $350. Snazzier versions will presumably cost more.

Sure, Apple has the brand, the audience, and the status, but is that enough to keep it off clearance shelves? Only time will tell.

Several comments:

• it may very well flop
• Apple is not expecting to sell very many; first production run is very thne; limited editions are limited
• money is no object for the Hollywood crowd
• the Apple Watch is not competing with watches; it's a fashion statement; as I said earlier, every mistress / kept woman in Hollywood will have a limited edition Apple Watch by Christmas

[Update, March 14, 2015: Holman Jenkins, Jr., who has been reporting most on Apple for the WSJ comes close to why Apple developed the Apple Watch -- he mistakenly calls it the iWatch.]

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Washington Times is reporting: ObamaCare premiums are about to spike. And this is before the Supreme Court ruling --

Obamacare exchange customers are about to see spikes in their premiums, the Congressional Budget Office predicted Monday, saying insurers that offer plans are facing twin pressures from the government and the marketplace that will mean hikes of more than 8 percent a year through 2018.

Now in the second year of full operation, the exchanges are critical to the success of the law. The government is using tax subsidies to attract more customers to help offset costs for the rest of the system.

Nearly 11.7 million Americans bought plans on the exchange in the second enrollment period, Health and Human Services Secretary Sylvia Mathews Burwell announced Monday afternoon, hours after the CBO’s analysis was released.

The CBO said premiums for the key “benchmark” exchange plans will rise an average of 8.5 percent per year from 2016 to 2018, faster than the rest of the health care market.

The law was written in such a way that this was all but inevitable, and predictable. 

Halcon's Proved Reserves Up 60% YOY; Surprise Is Bakken Vs Eagle Ford -- February 17, 2015

Tweeting now: DC federal offices closed today because of winter storm - @cnnbrk.

Pretty good article on what's going on with Greece: over at Yahoo!Finance. Key dates and comment:

• loans from 2010 bailout have come due
• without extension, Greece runs out of collateral in about 14 weeks (February, March, April, May)
• Yahoo!Finance says late March is day of reckoning -- that seems much short of 14 weeks
• Europe feels in a much better position now that Spain, Portugal, and EU are all improving

Proved reserves, Halcon's annual update (link here):

The Company's estimated proved reserves as of December 31, 2014 were approximately 189.1 million barrels of oil equivalent (MMBoe), representing approximately 60% reserve growth.

Year-end 2014 estimated proved reserves were 82% oil, 9% natural gas liquids (NGLs) and 9% natural gas on an equivalent basis. Of total estimated proved reserves, 74% were in the Williston Basin, 22% were in the East Texas Eagle Ford ("El Halcon") and 4% were in other areas.

Year-end 2014 estimated proved reserves were approximately 93% Company-operated and 41% proved developed.

Active rigs:

	2/17/2015	02/17/2014	02/17/2013	02/17/2012	02/17/2011
Active Rigs	136	185	181	197	172

RBN Energy: update on the Seaway.

Since December the first significant volume of Canadian heavy crude - an average of 240 Mb/d - has flowed to the Gulf Coast on the Seaway Twin pipeline. It’s been a rocky road to the Gulf Coast for Canadian heavy crude producers – beset with delays and congestion that they probably never envisioned when they planned their oil sands projects (including the wider political battle over Keystone – currently back in the President’s hands.)

And Canadian crude that does make it to Gulf Coast refineries faces stiff competition from incumbent suppliers. Today we chart the progress of the Seaway Twin and Flanagan South pipelines and look at price competition for heavy crude at the Gulf. The opening up in December, 2014, of the Enterprise/Enbridge joint venture 450 Mb/d Seaway Twin pipeline from Cushing to Freeport, TX, in conjunction with the Enbridge 585 Mb/d Flanagan South line from Pontiac, IL, to Cushing has enabled significant pipeline flows of heavy Canadian crude to reach the Texas Gulf Coast.

According to our friends at Genscape, average daily flows on Flanagan South since December 19, 2014 have been 389 Mb/d and average flows on the Seaway Twin have been 240 Mb/d. As we described last year the two new pipelines are part of an extensive expansion project by Enbridge of their Western Gulf Access system, that delivers Western Canadian heavy oil sands crude as well as Canadian conventional crude and shale crude from the northern portions of the Williston Basin into the U.S. Midwest.

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Reuters Spin -- ObamaCare

This from a Reuters article published today ...

 "...Republicans are opposed to ObamaCare..." 

... in an article about the case to be argued before the Supreme Court beginning March 4, 2015.

In fact, a Gallup poll last November, 2014:

Support for Obamacare continues to decline, with the law hitting a new low in approval, and a new high in disapproval, as the second enrollment period has opened for Americans.

Just 37 percent approve of the Affordable Care Act, 1 percentage point less than the previous low recorded in January.

The pollster notes the approval results are a “new numerical low” for Obamacare.

Now that folks are "losing" their annual tax refund because of ObamaCare it is unlikely that the approval rating for ObamaCare is increasing. 

Less then 37% of Americans support ObamaCare and yet Reuters implies that it is only the Republicans who are opposed to ObamaCare.

This explains, by the way, why Texas Democrats are meeting with Jeb Bush in his run to be the 2016 GOP presidential nominee.

This may very well be the video of the ObamaCare Trainwreck if the Supreme Court rules against the federal websites:

ObamaCare TrainWreck If Supreme Court Rules Against Federal Websites

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A Geography Lesson For The Granddaughters

Imagine the Sea of Marmara (Propontis) as a somewhat "squished/flattened" elephant, walking towards the right. The tail is the "Hellespont," now known as the Dardanelles, connecting the body of the elephant (the Propontis/Sea of Marmara) to the Aegean Sea (eastern sea of Greece); the trunk of the elephant extends toward the east (right). But above the eye, this peculiar elephant has a horn, the Bosphorus (a strait) which connects this peculiar elephant, the Sea of Marmara, to the Black Sea. The Bosphorus also has a smaller horn that protrudes into the heart of Istanbul, the "Golden Horn."

Incidentally, the peninsula to the west of the Dardanelles is the Gallipoli peninsula. The Gallipoli Campaign, a notable failed offensive by the Allies in World War I, took place on the Gallipoli peninsula in 1915. The Turkish hero: Mustafa Kemal Atatürk.

Gotcha! There Goes Your Tax Refund -- ObamaCare -- TrainWreck -- Administration Will Expand Exemptions -- January 31, 2015

It should be noted that this story broke on Super Bowl weekend when no one was paying attention and by next week it will be old news.

The New York Times is reporting.

Obama administration officials and other supporters of the Affordable Care Act say they worry that the tax-filing season will generate new anger as uninsured consumers learn that they must pay tax penalties and as many people struggle with complex forms needed to justify tax credits they received in 2014 to pay for health insurance.

The White House has already granted some exemptions and is considering more to avoid a political firestorm. Mark J. Mazur, the assistant Treasury secretary for tax policy, said up to six million taxpayers would have to “pay a fee this year because they made a choice not to obtain health care coverage that they could have afforded.”

But Christine Speidel, a tax lawyer at Vermont Legal Aid, said: “A lot of people do not feel that health insurance plans in the marketplace were affordable to them, even with subsidies. Some went without coverage and will therefore be subject to penalties.”

The penalties, approaching 1 percent of income for some households, are supposed to be paid with income taxes due April 15. In addition, officials said, many people with subsidized coverage purchased through the new public insurance exchanges will need to repay some of the subsidies because they received more than they were entitled to. 

All those folks looking forward to income tax refunds aren't going to be happy. The interesting thing: we're talking about a handful of people in the big scheme of things, but they are going to be very, very vocal when they don't get their income tax refund.

Looks like ObamaCare will be deferred, waived, whatever for another year. I doubt the middle class will get any of those tax breaks. 

Joe Biden can probably explain this better than I can.

The Red Queen Is Running Faster And Faster -- Average Production Per Well Per Day -- December 21, 2014; ObamaCare Re-Enrollment Apparently Not Required; Enrollees Will Be Automatically Re-Enrolled

The following data, through 2010, was posted back on January 11, 2012. I was curious what the numbers show now. These are the updated annual NDIC numbers -- year, daily oil per well (annual production) -- # of wells (change from previous year):

• 2013: 83 (314 million) -- 10,301 wells (change: 1,932 wells)
• 2012: 80 (243 million) -- 8,369 wells (change: 1,808 wells)
• 2011: 64 (153 million) -- 6,561 wells (change: 1,261 wells)
• 2010: 58 (113 million) -- 5,300 wells (change: 700 wells)
• 2009: 48 (80 million) -- 4,600 wells (change: 400 wells)
• 2008: 41 (63 million) -- 4,200 wells (change: 400 wells)
• 2007: 33 (45 million) -- 3,800 wells (change: 300 wells) -- the first year of the Bakken boom
• 2006: 31 (40 million) -- 3,500 wells
• 2005: 29 (36 million) -- 3,400 wells
• 2004: 26 (31 million) -- 3,400 wells
• 2003: 24 (29 million) -- 3,400 wells
•  
• 2000: 27 (33 million) -- 3,300 wells
• 1990: 28 (37million) -- 3,600 wells
• 1980: 46 (40 million) -- 2,400 wells
• 1970: 37 (22 million) -- 1,600 wells
• 1969: 37 (23 million) -- 1,700 wells
• 
  
• 1960: 39 (22 million) -- 1,500 wells
• 
  
• 1951: 72 (26,196 bbls) -- one (1) well, by the way

By the way, currently the average amount of oil per well per day, as of October, 2014: 103 bbls (the record was set in September, 2014, at 104 bbls/well/day. In October, 2014, 11,507 producing wells produced a total of almost 37 million bbls of oil, or, on average, 1,182,174 bbls of oil per day.

On another note, the Peak Oil folks just cannot give up. For the archives: it is now confirmed, the IPs of new Bakken wells are declining. It should be noted that the study only went back to November, 2013. The author if of the belief that the "initial 24-hour production number" strongly correlates with how well that well will do. I wouldn't give the author's conclusions much credence. It should be noted that there at least three new issues affecting production: a) new flaring rules; b) new conditioning rules; c) the plummet in oil prices. These issues are relatively new but oil companies have seen them coming (at least the first two) for several months now. I take the study with a grain of salt. That, and $1.89, will get you a Starbucks coffee.

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Another ObamaCare "Gotcha"

Back on December 3, 2014, I posted:

This is actually pretty clever; I did not see this one coming.

There must be at least a dozen telephone carriers with whom I can contract for cellular service, including Verizon, ATT, Sprint, several regional carriers, and probably even over the internet (TimeWarner or Dish) if I was that clever. But I contracted with Sprint twenty (20) years ago and never switched. I still use Sprint.

We have two options for internet and television here in the DFW area: TimeWarner and Dish (there may be others; I'm not aware). I signed up with TimeWarner when I got here, the same carrier I had had for 13 years in San Antonio. I will probably stay with TimeWarner forever; I don't even look at Dish offers.

In Texas, electric utilities are de-regulated; consumers can switch utilities willy-nilly every month if they want. I have been with one utility since I arrived and have no plans to switch.

It turns out that consumers of health care insurance share the same behavior. Even though there is an annual "open season," very few consumers switch health care once they have a policy. Sure, they have to re-enroll, but usually they just get a note (electronic or snail mail) that says they are automatically re-enrolled if they do nothing. 

Now, just a few days later, this is being reported as BIG news. In fact, it's not BIG news (see above). It's hardly news; it's simply a wrinkle on what BIG HEALTH CARE already does. If you are currently enrolled in ObamaCare and for any reason "fail" to re-enroll for calendar year 2015, DO NOT DESPAIR: apparently, the government is going to automatically enroll you in the program they feel is best for you depending on whatever data they already have on you. I cannot make this up. The Washington Times is reporting:

ObamaCare sign-up trap: Sign up at healthcare.gov one time in your life and we will never let you go. If you don’t continually re-enroll each and every year, CMS will keep you on the plan that it chooses because, after all, CMS knows what’s best and they always make the best decision. Oh, and if you don’t believe that, please go to the 600 million dollar website that will give you all kinds of testimonials handcrafted by MIT professors.

Zavanna To Build 45-Million CFD Natural Gas Processing Plant Seven (7) Miles Northeast Of Williston; To Be On-Line Before End Of Year (2014) -- November 21, 2014

 Updates

January 10, 2015: The Bismarck Tribune is reporting:

A temporary exemption from state natural gas flaring rules was granted Friday by the North Dakota Industrial Commission to an operator completing work on a natural gas processing plant and gas-gathering system.

Commissioners unanimously voted in favor of the exemption for Denver, CO-based Zavanna LLC. The company is the majority partner in a joint venture with Westminster, CO-based Flatirons Field Services, called 1804 Ltd. 

Helms said 1804 Ltd. has nearly completed a natural gas processing plant about 7 miles northeast of Williston. The plant has a 64-mile underground natural gas gathering system in place.

The reason for the exemption, Helms said, is to allow the company to purge its gas-gathering system prior to starting the $90 million gas plant.

Helms said the exemption would allow the company to flare until March 31 or until the plant starts up, whichever comes first.

The plant was originally scheduled to come online by the end of September but delays in the delivery of some parts for the plant pushed back the gathering system purge, according to Helms, who said, once the plant goes online, wells flaring in a six township area around the plant would all be able to connect to the gathering system. The amount of gas being flared in the area is approximately 33 million cubic feet per day.

 Original Post

Somehow I missed this, reported back in October, 2014. Petroleum News is reporting:

Meeting gas capture targets is taking center stage for many oil and gas operators in North Dakota, and one small operator in the Williston Basin chose to tap into a venture to tackle the flaring challenge.

As part of its strategy, Denver-based Bakken operator Zavanna LLC has developed a joint venture with Flatirons Field Services to build a 45 million cubic feet per day gas processing plant seven miles northeast of Williston.

Flatirons Field Services, a midstream company also based in Denver, was formed in 2012 by founders of the former Western Gas Resources which serviced North Dakota when vertical wells were being drilled in the state.

This is Flatiron’s first project in the Bakken and the company expects the plant to be operational by December. Capacity could expand beyond 45 million cubic feet per day based on Zavanna’s processing needs.

As Petroleum News Bakken reported in the Oct. 19 edition, Zavanna is an anchor customer for ARM Midstream’s planned Williston Basin crude oil gathering system.

In August, Zavanna ranked 24th among the top 50 Bakken oil producers in North Dakota for operated, non-confidential wells with an average output of 6,410 barrels per day according to the latest data available from the North Dakota Department of Mineral Resources. 

It's hard to believe that Google has a satellite view of something so recent, so I have my doubts this is it but it is about seven (7) miles northeast of Williston. Based on satellite views  of 100-million cfd NG plants, this seems about the size one would expect for a 45-million cfd facility:

This is on 131st Avenue Northwest, just south of the intersection of 131st Avenue NW and 57th Street Northwest (County Road 6). If you want to explore the map on your own, plug in coordinates: 48.229952, -103.519264.

A big "thank you" to a reader for sending me the link.

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For Investors Only

Trading at new highs today: AAPL, BRK.A, BRK.B, EEP, EEQ, UNP.

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Watch That First Step (Their Headline, Not Mine) -- Deductibles Will Getcha

CNBC is reporting:

The often-steep Obamacare deductibles, which are on top of monthly premiums that customers have to pay to have insurance, can come as a surprise to enrollees. [Especially since many folks a) don't understand insurance [any kind of insurance]; and, b) don't know how to spell or pronounce "deductible."

"You're paying a lot of money for health insurance and then you go to use it, and then you say, 'OK, until this deductible is satisfied, I might be paying completely for doctor and specialist visits?'" he said.

The average deductible for an individual enrolled in a bronze plan in 2015 will be $5,181, or $100 more than 2014 limits. For families in bronze plans, the deductible next year will be $10,545, or $159 more than this year.  

Yes, you read that correctly. A family paying monthly premiums for health care with the "most affordable ObamaCare plan" will have to pay more than $10,000 before their health care kicks in. I haven't read the small print, so there may be different interpretations, but that's how I define a "deductible" and that's what the author of the article suggests.

The good news: it's easy to sign up for ObamaCare. 

ObamaCare's official name, I am often reminded by readers, is the Affordable Care Act.

As noted earlier, investors in health insurance companies are going to do very, very well. This is another article, by the way, that was not published before the election. But mainstream media is now setting the stage to move POTUS off-stage (he's already STAGE LEFT) to make room for the newly annointed.

Remember: This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.

It would be interesting know what the deductibles are in the National Health System (British).

***********************************

Switching Gears

Now that the unnamed autumn 2014 polar vortex is winding down, time to move to the next subject that will last about as long, and generate as many headlines: the Ferguson Fiasco.

And so we begin:

• FBI sends 100 agents to Ferguson ahead of grand jury decision
• Prosecutor preparing news conference to announce
• Safeguards in place to protect identity of jururs
• School district cancels classes
• US Attorney General Eric Holder tells "law enforcement to behave"
• Ferguson protestors erupt, want officer Wilson dead
• Police families go into hiding
• Michael Brown's father asks for calm

How long will Ferguson/St Louis burn? Human behavior is fairly predictable. I doubt we've changed much in the past 2,000 years. The Great Fire of Rome was an urban fire that started in the morning of 16th July in the year 64 AD. It caused widespread devastation before being brought under control after six days. Differing accounts either blame Emperor Nero for initiating the fire or credit him with organizing measures to contain it and provide relief for refugees (Wiki).

In the Ferguson case, we already know who will get credit for containing it. 

Saudi Oil Imports Into The United States (US) -- November 13, 2014; Nancy With Signs Of Early Alzheimer's?

I've been waiting six months to post this screen shot. Finally (actually two screen shots) -- the most recent data -- August, 2014 -- was released October 30, 2014.  First (this is the amount of oil imported into the US from Saudi Arabia, in thousands of bbls of oil per day):

You have to go all the way back to the 1980's to see numbers this low:

How does this look graphically? The link is here.

For newbies: the most recent number is 894,000 bopd imported into the US from Saudi Arabia for the most recent month data is available, August, 2014. The Bakken is producing in excess of one (1) million bopd. Imports dropped to this level back in 2009 but it was due to the Great Recession, not due to US roughnecks in the Bakken.

I forget the CEO who uses this phrase but it is a better phrase: we should be looking for energy flexibility, not energy independence. Saudi oil imports will never go to "zero" for this simple reason: the world's largest refinery is in the US, and is co-owned by Saudi Arabia.

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Wal-Mart To Match Prices With Amazon

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Politics

One of the best "things" to have come out of the mid-term 2014 elections is this: maybe we won't see Ms Pelosi as much as we have in the past few years. Ms Pelosi has been #2 in Congress (House of Representatives) for quite some time but one would think she was the Speaker of the House based on how often networks and the mainstream media feature her in photographs and videos. But she is featured in the ménage à trois photo ops only because she accompanies POTUS and Harry Reid, the Senate majority leader.

I assume that in the future, we will see less of the liberal ménage à trois now that the Senate majority leader is M&M. At least I hope so. Her fifteen minutes were up a long, long, time ago.

For newbies: ménage à trois is French for "household of three." Wow, what an apt word for Barry-Harry-and-Nancy.

Speaking of Nancy -- early signs of Alzheimer's? In recent press conference she stated she did not know who Jonathan Gruber was, suggesting she had not heard of him before. Back in 2009, she relied on Jonathan Gruber's analysis to "sell" ObamaCare:

When Nancy DID Know Who Mr Gruber Was

July 28, 2014 -- A Very, Very Quiet Monday Morning -- Except For Those Holding Family Dollar (Being Bought By Dollar Tree); Buffett Buys Canadian Utility (AltaLink); Pending Home Sales Post First Drop In Four Months

Active rigs:

	7/28/2014	07/28/2012	07/28/2011	07/28/2010	07/28/2009
Active Rigs	193	207	181	139	40

RBN Energy:

In 2013, refineries in Eastern Canada imported 642 Mb/d of light crude. Today there are no pipelines connecting western Canadian crude supplies to the East Coast. By the end of 2014 the Enbridge Line 9 pipeline will link Canadian supplies from Alberta and Bakken supplies from North Dakota to refineries in Montreal. By 2018 the Energy East pipeline could be flowing 1.1 MMb/d to Canada’s Atlantic Coast and beyond.

Today we begin a new series on eastern Canadian transport options by reviewing existing crude supply.

There are 9 refineries in Eastern Canada with combined capacity of about 1.3 MMb/d.

Although Canada produces far more crude than it consumes, much of this output is heavy crude from Western Canada.  

Eastern refineries are not configured to process this type of crude but instead mostly consume light crude supplied from a mixture of offshore Atlantic seaboard production, imports from international suppliers and increasingly – imports of light crude from the US. Offshore eastern Canadian production averaged 240 Mb/d in 2013 and East Coast refiners processed about 47 percent of that - mostly light sweet crude. Eastern refiners have also traditionally processed imports from the Atlantic basin – particularly light crudes from West Africa.  

But imports of US crude into Canada – primarily used to supply Eastern Canadian refineries reached a record 268 Mb/d in April 2014, double the level a year earlier, according to the Energy Information Administration (EIA). As we described last December, eastern Canadian refiners have been importing US crude even as exports of local offshore production have increased.

The blog discusses the Canadian refineries (three "buckets") and what the Enbridge 9A reversal means.

The Wall Street Journal

US push for Gaza truce yields little. Hamas starting firing rockets as soon as the truce ended.

The Los Angeles Times

How much water do golf courses use? This is an interesting bit of trivia.

Then there is San Juan Capistrano, which the state said had a 37% increase in water use. City officials, however, note that May was an outlier. A new golf course opened in the city, and there was an unusual amount of construction.

Los Angeles Metro (subway; light rail) uses "honor system" for riders; wondering why they are losing money. Last year: 115 million riders; 70 million paid.

Reducing fare jumping as much as possible has become increasingly important to Metro, which is under pressure to boost ticket revenue as its rail network rapidly expands.

Income from fares covers just 26% of Metro’s bus and rail system operating expenses, one of the lowest rates of any major world city. That ratio must increase in the next few years or the agency risks losing crucial federal funding needed to continue building and operating the train network.

“This isn’t Chicago or New York, where you can’t get through unless you pay,” Fields said.

I can't make this stuff up.

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Non-Bakken Stuff; For Investors Only

AAPL flirting with $100 ($700 pre-split). 

WTI crude oil at $101 -- trending toward $100. Again.

Pending home sales: first decline in four (4) months. Analysts had expected an increase:

The pending home sales index slipped 1.1% from an index reading of 103.8 in May to the June reading of 102.7. That is 7.3% lower than in June 2013, when the index reading was 110.8. The consensus estimate called for a month-over-month increase of 0.3% in pending sales. The index reflects signed contracts, not sales closings. An index reading of 100 equals the average level of contract signings during 2001.

About 30 companies -- much longer list than usual -- announce increased dividends.

Warren buys Alberta (Canada) utility:

The federal government [Candad] has signed off on the controversial $3.2-billion sale of Alberta’s largest electricity transmission provider to a company owned by U.S. billionaire Warren Buffett.

The approval, however, comes with a long list of conditions, including the guarantee that buyer Berkshire Hathaway Energy must reinvest every penny it earns from AltaLink in the company, the province or Canada, if it is allowed to complete the purchase from Quebec-based SNC Lavalin.

AltaLink president Scott Thon said the approval should reassure Albertans who fear the image of a big American company milking the province’s infrastructure for its enrichment.

Samson Oil & Gas provides Q2 update: Co files its Q2 quarterly report.

• 72% increase in oil production in the June 2014 quarter over the March 2014 quarter
• 75% increase in estimated oil revenue in the June 2014 quarter over the March 2014 quarter.

Investors dumped this stock (data from Yahoo!Finance which might lag a quarter)

• market cap: $148 billion
• enterprise value: $145 billion
• annual revenue: $82 billion
• total cash: $8 billion
• total debt: $3 billion
• operating cash flow: $5 billion
• forward P/E: 149; trailing P/E: 500

Darling of Wall Street (data from Yahoo!Finance which might lag a quarter)

• market cap: $4.2 billion
• enterprise value: $6.5 billion
• annual revenue: $1 billion
• total cash: $15 million
• total debt: $2.3 billion (almost as much as the company above with a market cap of $148 billion)
• operating cash flow: $600 million
• forward P/E: 15; trailing P/E: 28

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The 20:15 Train Wreck

The AP is reporting, two data points from this article on ObamaCare:

• Automatic enrollment for ObamaCare enrollees for 2015I could be a new twist on an old public relations headache for the White House: You keep the health plan you like but get billed way more.
• Even with such generous subsidies [see below -- monthly premiums as low as $82 are too onerous for many], about 4 in 10 who bought a health law plan say they have trouble paying their premiums, according to a poll by the nonpartisan Kaiser Family Foundation.

But much more serious:

In the 36 states served by the federal insurance exchange, the tax credits average $264 a month, reducing the average monthly premium of $346 to just $82.

The most recent court ruling says that subsidies paid by the "federal insurance exchange" (in 36 states, by the way), is unlawful. [Update: A three-judge panel for the U.S. Court of Appeals in Washington ruled Tuesday that subsidies may not be offered in the federal health exchange. That was the ruling I was referring to. It turns out that "hours later the Fourth Circuit Court of Appeals offered its own decision, which upholds the Obama administration's arguments that subsidies can be applied in the federal exchange." I assume this will head to the Supreme Court; regardless, it puts the few million that are actually enrolled into more turmoil. A huge "thank you" to a reader for alerting me to the "most recent" ruling. That explains the "split ruling" that hit the news about the same time. For now, the subsidies remain in effect.]

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Ignorance Is Bliss

Easy Come, Easy Go

Almost Half Of ObamaCare Enrollees Receiving Subsidies Don't Even Know They Are Receiving Subsidies -- Think How Much They Would Like The President If They Only Knew

I make so few errors when blogging that when I do make an error it bothers me for days. I will be upset for a month on how I wrote the ObamaCare update above before a reader caught an error. But I'm in very good company it seems. I can't make this up.

I just now received this next link from another reader. CNBC is reporting:

Nearly 40 percent of Obamacare enrollees who receive federal financial assistance to help pay for insurance sold through HealthCare.gov don't even know they're getting any such aid, a survey stunningly found. [Really, stunningly?] (UC-Irvine -- really?]

That finding means that about 2.1 million people—at the very least—are unaware that they stand to lose thousands of dollars worth of aid that makes their health insurance affordable if the Supreme Court upholds a new court decision that said such subsidies are illegal under the Affordable Care Act. [I think that's almost exactly what I wrote. Memo to self: send a note to CNBC: hey, look at the Fourth Circuit Court of Appeals ruling.]

Ignorance is bliss.

Easy come, easy go, if the subsidies are lost.

I can't make this stuff up.

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A Note for the Granddaughters

Virginia Woolf remains my favorite author, or perhaps better said, the author that is most important for me.

I have transcribed -- completely, word for word -- two of her novels: Mrs Dalloway and The Waves. In transcribing Mrs Dalloway I discovered on my own that it was a "prose poem," something I did not know existed until then, and then discovered I had "re-invented the wheel," as they say. Having said that, it was one of the best "literature" things I have ever done, transcribing Mrs Dalloway in free verse.

I transcribed The Waves for a number of reasons. It is perhaps the most difficult to follow, and yet it is considered by many to be her best novel. In addition, closer to home, a close family friend, Ellen, considers it her favorite novel.

Mostly because I could not understand it, I transcribed The Waves.

Today I added the following to that transcription:

Perhaps somewhere else I tried to correlate the Greek party-goers and the characters in The Waves with Virginia Woolf’s circle, but if I did not, a couple of thoughts:

Jinny: serial lover of men, can only be Nessa, (Vanessa, Virginia’s sister; who had at least three lovers)

Percival: can only be Thoby; a he-man who died falling off a horse; Virginia worshipped her brother Thoby

Neville: homosexual; could only be Clive Bell, Nessa’s husband

Susan: possibly Virginia – Jinny’s life partner through extension of Greek counterparts

Socrates: could Virginia’s husband Leonard Woolf be Socrates?

Bernard is the storyteller in The Waves which is most likely Lytton Strachey. From wiki: he is best known for establishing a new form of biography in which psychological insight and sympathy are combined with irreverence and wit. His biography Queen Victoria (1921) was awarded the James Tait Black Memorial Prize. He was perhaps best known for his Eminent Victorians.

Rhoda is the youngest; I can’t think of a third woman in Virginia Woolf's circle; it was just Virginia and Vanessa, and many men: Leslie, Thoby, Adrian, Clive, Duncan Grant, Lytton Strachey. Roger Fry was also one of Vanessa’s lovers – she had at least three lovers: Clive, whom she married; Duncan Grant, whom she probably loved most, if I remember correctly; and, Roger Fry. There were several women in the group, but less well-known: Dora Carrington, Angelica Garnett, Julia Strachey, Molly (Mary) MacCarthy, Lydia Lopokova. Based on the linked essay below, Mary MacCarthy. 

A superb essay, by the way on The Waves and the Bloomsbury Group: Utopian Wholes: Virginia Woolf's The Waves and the Bloomsbury Group. 

This Is Really Cool -- No Pun Intended -- A Two-Fer For The Kennedy Clan

Trading at new highs today: AXAS (again), BK (again), BP, CFN, CHK (hmmm?), DVN, EPD (nice), LNg, NOV, OKE, PAA, PSX. 

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here.

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For the Kennedy children and grandchildren who might never get to see snow again, here's another opportunity, and as a "two-fer": a skiing vacation in Australia. What's not to like?

News.com.au is reporting:

It's here. The megablizzard. Snowpocalypse now. This baby has been on the weather charts all week and it’s howling its way through the Australian Alps as you read this.

Experienced weather watchers are calling it the storm of the century. They’re saying it could snow on and off, but mostly on, for the next 10 days. And now the megablizzard has arrived.

The NSW resorts of Thredbo and Perisher received 40cm and 50cm respectively overnight. Hotham, Falls Creek and Mt Buller (pictured at the linked site) in Victoria all reported similar totals.

A spokesman for Thredbo confirmed to news.com.au that as of about 3:30 p.m. (local time), 80cm of snow had now fallen in the past 24 hours. “It’s an incredible amount for June, I’m not sure it’s a record, but it has set us up for the rest of the season,” he said.

By the way, 80 cm of snow = 31 inches of snow.

I can't make this stuff up. Ah, yes, global warming. Ya gotta love it.  And speaking of global warming, I gotta get on my bike and get home before it starts raining again.

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Train Wreck

 Over at The Daily Signal, Sharyl Attkisson has an incredible, in-depth story on the "train wreck" some refer to as ObamaCare.

With a fist pump, President Obama hoped to have 26 million newly insured for healthcare. It turns out that the number is probably 4 million, and many of them will make not make monthly premium payments past the first six months. Of those, even fewer will renew if the premiums are higher as expected. And then, of course, there is "the big sting." The IRS computers have identified thousands of ObamaCare applications that do not match other federal data bases (a euphemism for "IRS Forms 1042"). The IRS will send a nice letter to these folks for an explanation.

This tells me all I need to know about how successful the program was in signing up paying customers:

Nobody from the White House responded to repeated requests for comment. A spokesman for CMS said there were no plans to release figures on paid enrollment, even though health policy analyst Robert Laszewski says the administration could provide the number in days or even hours if it wanted to.

The nice thing: folks living healthy life-styles who used to qualify for less expensive health insurance will not subsidize those who live unhealthy life-styles. If you fall into the former group, the next time you visit Wal-Mart, take a look around to see all the folks your health care premium dollars are subsidizing.  Even The Los Angeles Times is reporting that ObamaCare subsidies are on track to cost billions this year.

A streetcar known as Desire. A trainwreck known as Obamacare.