Bitcoin Is The New "Gold"; CLR With Five New Permits; Thirteen Permits Renewed; Rig Count Jumps -- October 11, 2021

Stagflation: Jim Cramer takes contrarian view on "stagflation." His views are in line with mine which I have posted. Bottom line: neither he nor I are concerned about "stagflation." 

Stagflation: headline story today Goldman lowered GDP projections. Scary headline. But did anyone report the numbers? Here they are. Be sure to sit down before looking at this huge Goldman Sachs cut when they revised their 2021 / 2022 GDP forecast:

• for 2021: previous, 5.7%; revised, 5.6% -- give me a break; that's a headline story?
• for 2022: previous, 4.4%; revised, 4% -- ditto.

Color me cynical: I saw the Goldman Sachs headline; several readers sent me the headline link; makes me wonder if the readers even read the story -- a revision of 5.7% to 5.6% gets the headline -- from a trading house that is consistently bearish, and if not bearish, tends to speak out of both sides of its collective mouth. A revision from 4.4% to 4% is a bit more bearish but what GDP was Trump seeking? What did he get?

Color me really cynical: compare those revisions with GDP growth under Trump (less than 1%); Obama (1.6%); Bush II (2.2%); Bill (3.88%) ; Bush I (2.3%); the actor (3.5%); and the worse president in modern times (3.3%). If Biden hits 4% he's going to be #1 among the most recent eight presidents. Yes, I know it's all relative. But anyone acting on Goldman's revision for 2021 ... well, what can I say. I have too much faith in free market capitalism to worry about a revision of 5.7% to 5.6%. 

Jim Cramer: there's always a bull market somewhere. And with a projected GDP of 5.6% there should be a lot of opportunities for investors.

Bitcoin: trading over 57,000 is at its highest in five months. Jamie Dimon has aged. He still says Bitcoin is worthless. 

• For me: Bitcoin is the new "gold." Karen Finerman and Jamie Dimon will have to agree to disagree on Bitcoin. 

Trends: I missed it; I'm not sure I'm the only one. It hit home last weekend at Family Weekend at Vanderbilt University, Nashville, TN. 

Horse troughs filled with cold non-alcoholic drinks -- water and sodas. In the past, the water would have been in plastic bottles for sure, and many of the Coke products would have been in plastic. But this time: no plastic whatsoever. Everything was in aluminum cans, most cleverly camouflaged and crafty. But everything was aluminum. Does this suggest to me that the "plastic straw" "woke" crowd finally reached the C-suites in the RTD industry?

If this is accurate: a win for Alcoa?

Another interesting observation: the standard "Coke" can was 12 ounces; if I recall correctly, the standard size "Coke" aluminum can to look like a beer bottle was 16 ounces. Bloomberg must be really, really frustrated.

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Back to the Bakken

Small jump in number of active rigs in North Dakota! But there is a typo: one well is listed twice.

Active rigs, is updated at the end of the day on non-holiday weekday; not sure if Indigenous Peoples Day is a holiday for NDIC or not:

$80.52	10/11/2021	10/11/2020	10/11/2019	10/11/2018	10/11/2017
Active Rigs	29	13	58	68	59

Active rigs:

• CLR (10): Flint Chips FIU, Dolezal FIU, Jack, Whitman FIU, Thorp Federal, Clear Creek Federal, Charolais South Federal, LCU Reckitt Federal, LCU Reckitt Federal, LCU Ralph,
• MRO (3): Seidler USA, Porter, Ermina,
• Hess (3): AN-Norby; BL-Olson; CA-E Burdick; 
• Enerplus (2): FB Leviathan 16B, FB Leviathan 17T,
• Whiting (2): Platt, Ark;
• Crescent Point Energy (2): Reed, CPEUSC Pankake
• Hunt: Halliday,
• Petroshale: Crockett Federal
• Oasis: Swenson Federal,
• Ovintiv: Bernice,
• Sinclair: Grasslands Federal,
• Slawson: Rainmaker Federal,
• Kraken: Alamo

Five new permits, #38606 - #38610, inclusive:

• Operator: CLR
• Field: Cedar Coulee (Dunn County)
• Comments:
• CLR has permits for five wells in SESE 4-146-96, Cedar Coulee
• four of the wells will be sited 551 FSL and between 562 FEL and 652 FEL; one well will be sited 550 FSL and 427 FEL (assuming there was no typographical error)

Thirteen permits renewed:

• Crescent Point Energy (8): one Dorothy permit; four Narcisse permits; and, three Austin permits, all in Williams County
• Grayson Mill Operating(5): five Tufto permits, all in Williams County;

Notes From All Over -- Part 2 -- The Road To New England -- October 11, 2021

From New Hampshire Business Review: New Hampshire electric rates to jump due to spike in natural gas cost. Sixty percent hike in rates seen for Unitil customers.

Is anyone paying attention? How did that pipeline action work out?

Again, utility rates will jump sixty percent. 

Link here. 

Look at this:

Electric rates for the winter are going up a lot, and two utilities have announced rate hikes that take into account the dramatically higher cost of natural gas: Unitil and the New Hampshire Electric Cooperative.

Unitil’s winter rates will rise 60 percent for a household that uses around 650 kWh per month, while the New Hampshire Electric Cooperative customers can expect a 17 percent increase compared to summer rates.

In both cases, the reason for the dramatic increase in the cost of electricity is tied to the spike in the cost of natural gas.

See comments: from a reader, this link. 

ISO NE is tracked here. At the moment, 87% of energy demand supply by the two "n's" -- natural gas (75%) and nuclear (12%).

The Energy Crisis -- Trolling -- October 11, 2021

This sudden energy crisis is absolutely fascinating. I've still not seen a good analysis.

It would be interesting if anyone can come up with the "single event" that precipitated the whole crisis.

Remember Richard Feynman's explanantion for the Challenger disaster? That's what I'm looking for. I'm looking for a Richard Feynman who can show in one simple graph how this energy crisis seemed to have happened overnight.

I have an idea and will post it later but it will be posted deep in the blog so I have the time/date stamp for bragging rights, but I want to bury it so I don't have to put up with a lot of push back from readers before some time has passed to see how this has played out.

 

The answer will be in two graphs -- technically four graphs but only two are needed, but I had to expand those two to make it clear. 

 

Some hints:

• the answer is not "under investment" in fossil fuel production;
• the cause of the crisis is not related to supply chain issues;
• to some extent the cause might be geopolitical but that's only part of it;
• some will argue the cause was all about renewable energy, it was not, but there is a connection;
• the explanation is incredibly simple; because it is so simple, the explanation will result in a lot of push back; it's human nature not to accept a simple explanation for something that seems complicated (see the Fehnman link above);
  
• but again, the challenge is to find the "one thing" that precipitated the current energy crisis

Off The Net For Awhile -- Need To Recollect My Thoughts -- Some "ME" Time --- October 11, 2021

Lego Stuntz are out of stock. 

I saw these for the first time at a Lego Store in Nashville, TN. Most interesting Lego concept in a long time. Can't keep them in stock. 

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At The Wave
Kanab, UT

Readers in southwestern United States will be able to explain this phenomenon. This is Olivia running across the "non-Newtonian fluid."

Perhaps: 

... a mixture of fine sand, very fine micron-sized particles of clay, and water. ... liquid mixtures with these properties are known as 'shear-thinning thixotropic non-Newtonian fluids' as they don't seem to follow the normal liquid/solid rules.

They had me at "thixotropic." 

When Olivia's dad attempted to cross, he sunk in three feet deep, mid thigh, had a devil of a time getting out. Soles of hiking shoes separated from the shoes due to strong "suction" of sand-fluid pulling against shoes. 

They came across similar patches without knowing how deep the mixture went. 

Notes From All Over -- Part 1 -- October 11, 2021

William Shatner: age 90; oldest man to go into space; launch Wednesday morning, this week, from west Texas. Jeff Bezos' Blue Origin. True space trip, though short, not like Virgin Galactic.

NFL:

• yesterday: Tampa Bay Buccaneers, 45 -- Miami Dolphins, 17 -- close game until Dolphins fell apart in fourth quarter;
• yesterday: Kansas City Chiefs and Mahomes, lose
• tonight: Indianapolis Colts, 1-3, at Baltimore Ravens, 3-1;

Underinvestment in fossil fuel: maybe the story for the rest of the year?

I had/have a reader that has written me often over the years about this very subject. I tended to ignore that observation, but more and more analysts are saying the same thing. One can agree that there has been underinvestment but that doesn't necessarily mean that explains the current situation.

Really?

"I'm concerned hydrocarbon demand is not falling fast enough to match the potential under-investment in fossil fuels," said Jason Bordoff, dean of the Columbia Climate School and a former senior energy official in the Obama administration. Link here.

NASCAR: the Harvick, Elliott feud. Gonna make the last four (?) races very, very exciting. The former has nothing to lose; first time he did not advance to field of eight. Elliott, everything to lose if this feud doesn't end. Gonna be fascinating to watch. Google Rick Hendrick, Harvick, Elliott, Fox News.

Bitcoin: holy mackerel! Is anyone paying attention? 

Up 4% today; up over $2,000; now trading over $57,500. Remember: just a week or so ago, it was trading around $42,000. You can fact check me on this; I don't follow Bitcoin very closely but this seems to be what I recall.

Japan and nukes: the island country is re-starting its nuclear facilities. Says they are doing it to lower emissions. Okay. Link here. 

All US indices: up nicely today.

• trading volume down?
• bond market closed?
• commodities drive

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Airline Cancellations

Re-posting:

Big story: I was wrong. I thought this would be a huge story in the media today with regard to Southwest Airlines canceling flights over the weekend. 

It is incredibly obvious what's going on. Most analysts seem to be playing checkers with regard to this while the Biden administration is playing chess. Truly, truly enlightening. The ATC issues and the weather issues apparently only affected Southwest Airlines and American Airlines. By the way, I had forgotten something pretty basic when it comes to flight medicine: pilots go DNIF if placed on a new medication. This vaccine would be a "new medication."

Classic game of "playing chicken." Who will blink first?

Most interesting: media is avoiding this story. 

Football in America: college football yesterday -- link here.