Overnight, the price of oil started to jump. I did not know why. This morning we have the reason and the reason suggests just how fragile the supply is.
Yahoo!Finance is reporting that a Canadian wildfire is the reason (hopefully the wildfire was not started by an overturned CBR Bakken oil spill). Based on the comments at the link, most folks think this story is bogus. I agree. But what is oil doing in futures? Up 4% to about $45.50. Okay.
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Busy, busy day, so let's get started.
This story and derivative spin will be reported for the next sixty minutes across the media: holy baloney, Batman! Today's seasonally adjusted
274K new claims was up 17K from last week's 257K and above the forecast of 260K. Wow, wow, wow:
- last week: 257,000
- forecast this week: 260,000
- actual: up 17,000 from last week to 274,000 new claims; 14,000 more than forecast
The good news: the rolling 4-week average? Ooohhhh -- not so good -- it was up also, at 258,000, up 2,000 from last week's unrevised 256,000.
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Headlines
Syncor soars! ATT drops Yahoo; signs with Synacor instead. Fifteen-year partnership between ATT and Yahoo comes to an end: $100 million account. One wonders who at Yahoo gets the blame for losing this account. Wow!
It turns out those wind turbine gearboxes need "replacing" every five years.
WSJ is reporting that the oil and gas industry is cutting back on billions of dollars worth of "cutting-edge" projects.
WSJ is reporting that health insurers are struggling to offset new costs; companies will propose
big premium increases for coverage next year under ObamaCare. The gift that keeps on giving. The best advice for the GOP:
run, don't walk, away from this trainwreck.
From Politico a couple of days ago:
The list of troubles for the exchanges remains long. Health plans
competing in the overhauled individual market lost more than $3 billion
in 2014, the first year of exchange operations, according to financial
filings.
Profits at Blue Cross Blue Shield plans, which dominate many
state exchanges, plummeted 75 percent from 2013 to 2015.
More than half of the 23 nonprofit startup health plans seeded with
Obamacare loans have collapsed after hemorrhaging red ink. And a pair of
federal programs that were supposed to protect insurers from big losses
during the first three years of exchange operations have instead
exacerbated the turmoil, many health plans complain.
Few analysts are predicting an Obamacare “death spiral,” in which
soaring premiums scare away all but the sickest customers and the
marketplaces implode, but the path forward is rockier than initially
forecast.
Analysts at Standard & Poor’s now predict that the
Obamacare markets won’t stabilize until 2018, two years later than
previously anticipated.
WSJ is reporting that Turkish leaders threaten ties to the west. I think the Turks have pivoted; since WWII, the Turks have looked west; since "shock and awe," they have looked south and southeast.
WSJ is reporting that Tesla's losses widen on
lower-than-expected deliveries. Now we know why the vice president for manufacturing
and the vice president for production are both departing. Yesterday it was a bit unclear.
Meanwhile,
MuskMelon is trying to achieve something the manufacturing world has never seen before:
produce 500,000 vehicles per year by 2018, a target that was moved up from 2020.
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Tesla: One Man's Opinion
Over at Seeking Alpha:
- Loss per car sold at near-record high: $19,059
- negative net margin at record high: Minus 24.6%. Yes, that’s with a MINUS sign ahead of it. A year ago: Minus 16.4%
- gross margin at near-record low: 22%, down from 27.7% a year ago
- Tesla promises 500,000 cars for 2018, but guides June 2016 to 17,000 cars, below the 19,438 consensus.
- absent
any incremental government help (subsidies, mandates etc.), Tesla will
likely lose almost $20,000 per car for as far as the eye can see
For newbies, generally companies like to have a positive margin, the bigger the better. For example, Apple Inc's margin is about 46% and if it drops to 45% the stock gets hammered. I am aware of very few companies whose net margins are a) negative; b) growing; and, c) the CEO is promising record-breaking results in the
manufacturing business.
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ISIS And Turkey
From RT (it may take a few moments to load):
An RT Documentary crew
filming in northern Syria has seen Islamic State (IS, ISIS/ISIL)
documents abandoned by retreating terrorists and found by the Kurds
that, along with captured IS recruits, provide a stunning insight into
the ISIS oil trade.
Only
ten days after the town of Shaddadi in Syrian Kurdistan was liberated
from the ISIS militants, an RT Doc film crew followed Kurdish soldiers
around houses that had been abandoned in haste by fleeing jihadists.
There, they found documents shedding light on the ISIS oil trade,
jihadist passports with Turkish entry stamps, an instruction booklet -
printed in Turkey - on how to wage war against the Syrian government,
and more.
The areas
surrounding Shaddadi has large natural oil reserves, and until recently,
ISIS militants profited from it, forcing members of the local
population to work in their oil industry. Piles of detailed invoices
used by ISIS to calculate daily revenues from selling oil were found on
the site. Local residents attested that intermediaries from Raqqa and
Aleppo arrived to pick up the oil and often mentioned Turkey, while a
captured ISIS recruit admitted on camera that the terrorist group sells
oil to Turkey. He and another foreign fighter from Saudi Arabia also
revealed that it had been easy to cross the Turkish border.
