Wednesday – Oil Inventory Preview

148 thoughts on “Wednesday – Oil Inventory Preview”

1. Addax out with their biggest well yet in Iraq.

   http://biz.yahoo.com/cnw/090318/addax_welltest_taqtaq.html?.v=1

   I don’t talk about them often but I wrote this play up long ago and probably should add it to my long term ideas list.

2. Levels at 7amET:

   · SP Futures near overnight lows, dn 3pts.

   · Europe off overnight highs, +1%.

   · Credit: IG CDX11 out 3bps to 239/241, HY dn ¼.

   · US Treasuries are higher across the board. 10yr yielding 3.001%

   · USD (DXY) dn 0.1%.

   · Crude dn a buck to $48.30/bbl (we broke thru to ~50 y’day only to pare gains back to the key $48 resistance level)

   · Spot Gold dn four bucks to $911/oz

   · Base Metals Complex is quiet this morning: aluminum up 1%, copper dn small

   · Baltic Dry Index fell >4% y’day, its fifth straight decline

   Today’s Top Stories

   · MSCI World Index rose 0.3% to its longest stretch of gains since June ’07 as Asia closed higher, although Europe is off its highs after worse than expected UK unemployment data (DJ Stoxx up ~1%) and SP futures are dn 4pts.

   · Tone of the market remains more confident than last week, w/sentiment shifting towards a “glass half full” outlook; The fear of imminent bank nationalizations, sub-$40 SP500 earnings, and a dour punitive Washington that was so prominent just a couple weeks back has been replaced by a discussion of potential upside risks.

   · There is optimism around the TALF, which opened the Mar subscription Window Tues – Nissan is pricing a ~$1B+ ABS deal through the Fed facility and saw “very strong demand” on Tues according to Reuters (4-5x oversubscribed in the first 8 minutes). The TALF window closes at 5pmET on Thursday.

   · The World Bank cut its ’09 China growth forecast, although said the country was showing signs of economic stabilization.

   · The volume of M&A deals continues to explode higher – so far, most of the transactions were confined to health care (which didn’t seem to impress the market all that much), but the WSJ today is reporting that IBM is in talks to buy JAVA in a ~$6.5B deal that would mark IBM’s largest ever deal if consummated.

   · The newsflow out of financials continues to have an improved tone – Unicredit, Italy’s largest bank, is trading up ~6%+ in Europe today after posting better-than-expected earnings and RBS gave an upbeat interview to the FT about its YTD results.

   · On the Washington front, the outcry over the AIG bonus payments isn’t abating, w/lawmakers from both parties demanding repayment and introducing legislation that would clawback the money or impose substantial taxes on it. The Washington Post says bank execs, and Treasury officials, are worried that the firestorm over AIG will scare away private sector participants from the TALF and the public/private bad bank just as those two programs are trying to get off the ground (Geithner may outline the bad bank as early as this week according to the WashPost); a bill introduced yesterday in Congress would tax all bonuses paid out by a TARP bank at a 70% rate (35% from the employee and 35% from the company).

   · A huge battle could be brewing in Congress over the Obama budget – some White House officials and Congressional leaders are pushing to include Obama’s health care and cap-and-trade plans into the budget reconciliation process, which could mean only a simple majority is needed to pass (i.e. Republicans wouldn’t be able to filibuster).

   · In tech, ADBE reported last night pretty much inline w/its Mar 4 preannouncement although said it had seen stabilization since the start of Feb; Digitimes is reporting that TXN is ramping up orders to its Taiwan partners after seeing a recent surge in business.

   · The FT says Hedge funds have started opening up again and are returning cash to investors earlier than previously expected; “By the end of June we anticipate that the vast majority of funds which suspended will have moved to the slightly better category of gated, which means that they’ve started making pay-outs” (FT).

   · A report on Bloomberg says China’s copper purchases could send the market into deficit in ’09 from the current surplus.

   · Credit Update — A strong day in stocks with secondary bond and CDX market spreads lagging but the primary market performing strongly. $14.25B un-guaranteed debt was issued yesterday. The HG primary market continues to benefit from positive technicals on both the issuer and investor side. the TLGP program is absorbing almost all issuance from Financials, leaving stronger demand than would otherwise be the case for Industrial and Utility issuers. This morning, CDX is out 3bp to 239-241 (as of 7:03amET).

   Catalysts

   · Eco numbers today: MBA mortgage apps (7am), CPI (8:30amET), FOMC (2:15pmET)

   · Earnings – ORCL and NKE report tonight; FDX reports tomorrow morning.

   · AIG hearing in the house today – Wednesday, March 18, 2009, 10:00 a.m – The Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises will hold a hearing entitled: “American International Group’s Impact on the Global Economy: Before, During, and After Federal Intervention”.

   · GE Capital analysts meeting on Thurs morning

   · UK financial regulations – The U.K. financial-services regulator is expected to roll out Wednesday a blueprint for the most radical rethink of the U.K.’s financial rules in more than a decade (WSJ); will raise the possibility of an outright ban on instruments like ‘collateralized debt obligations’ (CDOs) (The Telegraph).

   · Washington – investors are looking forward to potential news out of DC…..Some of the bigger events on the horizon: 1) FOMC (decision due 2:15pmET Wed) – there is increased speculation (inc on Bloomberg today) that the Fed may raise its MBS/agency debt buyback program (which now stands at $600B) given how its balance sheet has been on the decline since Dec (people think the Fed needs to start growing its B/S again); 2) TALF – subscription for the Mar funding are due this Thurs….reports indicate that funds and Washington continue to haggle over contract terms w/certain private sector participants reluctant to jump into bed w/the gov’t at the moment; it will be interesting to see how many people eventually come on board; 3) insurers & the TARP – the market is still waiting to hear whether certain insurers will be allowed to access the TARP; 4) bank stress tests – the Treasury has said this process could be wrapped up by the end of Apr. That’s not to say the market loves everything from Washington – the rhetoric around bonuses – is raising some worries and potentially scaring participants away from the TALF.

3. Wow Bird, thanks! I saw the China news too, kind of a glass half full feeling there.

   On AIG, didn’t the company already say it would pay taxpayers back for the bonuses?

4. My original write up of Addax from about 2 years ago.

   http://zmansenergybrain.com/2007/03/01/addax-petroleum-a-good-old-fashioned-growth-story/

5. The whole AIG thing is truly a sorry episode. But, it’s along the lines of the fraud in the Katrina payments, the fraud that will sap the Stimulus Bill, and the fraud that was the Fannie/Freddie support. Frankly, we need to move on to more important things.

   The govt unilaterally changing contracts to clawback or tax bonus money is far more scary in its implications than the idiots at the AIG CDS division receiving bonuses. Govt provided the bailout money and then was lax in its oversight. Now govt is mad at AIG for govt’s lax oversight. Please, let’s just move on.

6. BOP – too true, need to move on to more important things.

   Did you see VLO scooped up some Verasun assets out of bankruptcy. Might be interesting.

7. Gotta miss the open, back in 20 minutes.

8. z — i have an e&p valuation approach I want to run by you… if you have the data base to do it, I would love to see the results… but, let’s get past open first. Later.

   Tech Trader has no colour today. Tech Trader drank way too much green beer last night.

   Head Trader’s gut says, opening sell-off, tries to rally, closes lower (red).

9. z — We knew VLO was looking at the Verasun assets. Someone else on this board had some pretty knowledgable comments on the topic a while back. Perhaps that person can weigh in again. Basically, they thought it was a positive move… and had some good arguments to back it up.

10. BDI -113 1861 UGH

    TED 106.64

11. Ok – I’m back.

    BOP – can you send it to me via email? I’ve set up 2 databases before, with and without interns … a lot of the answer to the question will depend on how much data and how it gets populated.

12. Elduque

    – I’ve been watching an interesting move up in day rates for the smaller supramax/handymax class ships releative to the bigger panamax ships. If this keeps up the day rates on the smaller (and less costly to run) ships will overtake the biggest Capesize ships. Gives one hope for a breakout of the base formed in names like GNK that have more of the small ships as a % of their portfolio than their peers.

13. That GNK is speaking at a JP Morgan conference this morning.

14. That VLO ehtanol story:

    http://www.marketwatch.com/news/story/Valero-leads-bids-993-million/story.aspx?guid={BB3A0D63-8245-4131-9A12-E2ED940A6B94}

    In the long run this makes a lot of sense for them. I have little doubt they can do a better job of managing input costs.

15. z — ok. Here’s the concept.

    I have been spending a lot of time thinking about valuations, downside scenarios, bank redeterminations, and distressed investing in the E&Ps. I’ve gone back to an old heuristic I used to use in high yield bond valuations… namely, utilize the information embedded in the bank valuations.

    Banks spend a lot more time and have a lot more access to company reserve and asset information. They are not “smarter” per se, but with all that additional information, they have a better idea what the assets might bring in a burn-down analysis. The old heuristic was — liquidation (or burn-down) value of the company’s assets was equal to about 2x what the banks would lend the company. In the current environment, that number might be closer to 3x. Don’t know. We don’t have any liquidation data points yet… but, my gut (and dealings with banks) tells me it could be something like 3x now.

    Now, here is where the analysis comes in. I am only interested in looking at E&Ps that will make it through this downtrough. In that case, I can put aside subordinated debt’s claim on the assets and make the assumption that all the net value of the assets accrues to equity.

    [i am going to post this now, and continue in a sec… ]

16. z, any opinion on the 40 bcf number for tomorrow? are we looking at a build next week?

17. Gaamblor – numbers very squishy this time of year when you get hit with abnormal early warmth, I show it a bit bigger but not by much. Next week probably not a build but a smaller draw down. Market has priced in long range recession and a high start point to gas already. Next real catalyst point for gas will be the supply numbers at the end of March (for January production).

18. Add to 17

    A little bird just sent me a note saying the Bloomberg survey has been revised to show a drawdown of 25 Bcf. So the bar has been set pretty low.

    Oil inventories in 4 minutes. Crude imports is probably the most important number of the day, followed by gasoline demand.

19. FSLR – stock trying to start a bounce again. They should use it in an add for channeling stocks dot com.

20. Crude: up 2 mm barrels (a bit big)
    Cushing stocks inched up from 33.6 to 33.9 mm barrels
    Gasoline: up 3.2 mm barrels (wrong direction to estimates)
    Distillate: up 0.1 mm barrels

    Refinery utilization: 82.1%, down 0.6 from last week. Crude inputs actually rose slightly.
    Crude Imports: 9.2 mm bopd – still running low
    Gasoline Demand: 8.995 mm bpd – ok, not great.

    Oil down $1 at time of report

21. ugh — lots of purple (low of day) on the screen now.

22. Oil hit 47.50 and is trying to hold, down $1.60.

23. Oil moving off its lows. It really needs to hold round number levels, especially $47 or it will be retesting mid $40s quickly.

    Wonder what new and exciting the Fed notes have in store for us at 2 EST.

24. BEXP looks to be contemplating a PQ-esque move now. Not saying its warranted but interest is starting to build and they are talking up interest in their Bakken acreage sale.

25. z — ok, back to the valuation discussion.

    As banks go through their semi-annual redetermination, I think it would be useful to see how much burn-down value per share some of our targeted E&Ps offer. The analysis would be very simple, and go like this —

    Total bank availability (revolver + term loans, if any) X 3 = Base asset value.

    Ignore sub-debt claims on the assets, as that is only valid in a Ch11 situation. And since we are only looking at companies we think can make it through the trough, the more debt a company can “manage,” the more that leverages returns to equity. So, “manageable debt levels” are actually a good thing.

    So, 3x Bank lending levels divided by the fully-diluted shares o/s.

    Presented with the ratios of Total Leverage (debt/EBITDA) and Coverage (EBITDA/total interest), that would be a helpful way of looking at asset values per share, combined with a sense of leverage risk.

    What do you think?

26. Thinking …

27. Financials really trying to go green. Mrkt liked BAC’s comments re paying back TARP money. FAS is green now.

    Where goeth the financials, there goeth the mrkt.

28. Give me 30 minutes to think on that one.

    Am very close to taking BEXP common for a quick trip.

29. z — i’m going to try that on KOG right now. Only, KOG is a bit more complicated, due to the rig liability they have combined with the fact that they are micro-mini-teeny small. So, have to take that into account. But, will start there.

30. z — no hurry on answering the valuation question. Just wanted to throw it out there. Banks have a lot of info the rest of the mrkt doesn’t have… we should be able to use that, somehow.

31. Tried and failed to add HK $20 calls for $0.10

32. Comments from the fixed income desk on some of the topical E&Ps we have been following —

    BEXP – S&P lowered Brigham Exploration’s corporate credit rating to CCC+ from B- and its senior notes to CCC from CCC+. The outlook is developing. The rating change and outlook reflect BEXP’s limited liquidity. The Company reported in its earnings call that it had violated a debt incurrence covenant in its senior notes and would not be able to incur additional bank debt until 2010. BEXP fully-drew its $145mm revolver prior to violating the covenant.

    CPE – Callon Petroleum reported that it will delay filing its 10K while it continues to seek a waiver from the bank group of its revolver. CPE seeks to confirm that a default under its nonrecourse Entrada term loan would not constitute a default under the bank agreement. The Company does not believe that the suspension of operations at Entrada has caused a default under the Entrada term loan. The bank group has ensured CPE that it will provide the waiver, but has not been able to do so by CPE’s 3/16/09 deadline to file its 10K.

    EPL – Energy Partners reported that it will not file its 10K on time. As previously reported, the Company is in discussions with both its bank group and bondholders regarding a possible restructuring. The Company noted that its forecast 2009 cash flows are not sufficient to cover the required reduction in principal of its bank debt and interest on its senior notes. Earlier this week, the Company announced that its borrowing base was reduced to $45mm from $150mm. With $83mm drawn, EPL has a $38mm deficiency. EPL also noted that due to a lower capex program in 2009, the Company expects production to decline significantly. In addition, there is 2mboed of hurricane-affected production that was expected back on-line in late February that has not yet been returned to service.

33. BOP – just so everyone knows, the BEXP news is not new as I consider buying in there.

34. BOP – What do you think about SD as a candidate for that exercise?

    Basic premise of 3x is that the banks are willing to lend less relative to asset value? Is this a pre or post redetermination exercise?

35. Definitely post-redetermination. And quickly. While the “news” is still fresh.

    And you are correct, on the 3x basic premise. Banks are being overly conservative. No surprise.

    You should see what banks are doing here in automotive-supplier land. They have involked the MAC clause to cease lending to companies… even though those companies are in FULL COMPLIANCE with their bank agreements. THAT is going to cause a cross-default event that is going to have very sad consequences. But, it’s a sad situation, any way you look at it.

36. SD – that would be a perfect candidate! Banks would have already taken into account the need to sell assets… and the debt level makes for very attractive leveraged returns to equity… assuming they can manage to sail through the rocks.

37. Ok, first step, we need a list, some will be more on the bubble as to survive / liquidate than others of course. Thanks for the push on this, I was meaning to do a post redet list after the long term list.

    My current list has less than a dozen names on it but I haven’t really gone looking beyond the ones like BEXP and CPE etc we talk about frequently

38. hearing banking arbs are driving the financial market higher…

    apparently, lots of arb guys were shorting C down to 1 while buying prefereds…. hearing that those guys are getting killed right now. seeing about half of them covering and half determined to ride it out.

    Makes for very volatile dynamics. But, what else is new.

39. just to clarify, the coverage and leverage ratios would have to be forward-looking, for 2009. but, would love to help with this analysis.

40. reef — would like to hear your thoughts on this, when you have a sec.

41. Re 39. Right, mine are on the orange charts, rule of thumb use last quarter, multiple interest charge by 4x unless debt structure has changed. EBITDA I use street typically although with the unhedged names this is likely high given what gas is doing. For a handful of companies I can model EBITDA pretty quick though.

42. BOP – want to put odds on helicopter ben spiraling in to the rescue this afternoon?

43. BEXP ran too fast for my slow trigger finger to grab…that’s a big run.

44. BOP my list so far:
    Tier 1
    CPE
    SD
    XCO
    PQ
    BEXP
    PVA – maybe
    BRY

    Tier 2
    There are also some micro caps out their like END, KOG, …

    Tier 1 I’m pretty interested in owning the common if they work, Tier 2, could be worth a trade.

45. EOG = profit taking.

46. z — Ben has been the only voice in this administration who has been able to calm the market fears. The rest are all just shooting gattling guns, randomly, at american business. So, the mrkt feels like they have a much-needed ally in Uncle Ben.

    Just guessing here, but Ben could spark a recovery rally.

47. gotta scoot for an hour or so… back to pick up the valuation thread later. But, that list is a great start.

48. http://www.rigzone.com/news/article.asp?a_id=74065

49. Thanks for posting Wyoming, still reading it. I was around for the last 2 big down turns mentioned and this is faster and will definitely be deeper and likely longer than either one of those due to the global situation. Therefore, very destructive to U.S. natural gas production.

50. Crude went through $47, bounced and is back to holding that $47.50 level I mentioned earlier. When you look out about 4 weeks, the pickup in demand from refiners is likely clockwork. Utilization may have been down but they are already starting to produce more mogas and that will take more crude, as much as 750,000 to 1 mm bopd of incremental demand. Demand is really not off that much from year ago levels at this point while imports are lower leading to a “peaking” in the near term of U.S. oil inventories.

51. … and that is what is behind the lack of a big fall in oil on the bigger than expected oil inventory and gasoline inventory builds. Oil coming back up towards $48.

    Wow did I brick not taking my BEXP trade.

52. One bit of oil policy that myself and the new administration agree on is refilling the SPR now with prices being as low as they are. SPR saw a 1.8 mm barrel increase last week.

53. re SD – They have stated that they are going to sell off their mid stream assets. This can’t be done in secrecy can it? Or maybe a better question is how do they market those assets and who would know how successful they are?

    If they sell them off doesn’t that make a material difference in their debt ratios.

54. ELd – they will announce it once its done. It will be a material change for them on the balance sheet, will be a minor detriment on the income statement thereafter.

55. Someone pointing out GST as a list for the redetermination/”I will survive yeah, yeah” list. Have to agree with that.

56. Congress is expanding TALF to include distressed assets. Market likes that.

57. FSLR rebound continues

    HK recovering well off lows now, going to hang out for another day here, will then move to Aprils.

58. z — that is great. If we can put together a “I Will Survive” list, this could be a very insightful (profitbable) exercise.

    Even KOG will survive. But, they have to make something happen. If the wells they drilled prove economic, KOG will have no problem striking a few land deals and/or partnerships. As long as 1)they stay out of their revolver, and 2) the wells prove the acreage is valuable, then the stock should be worth a lot more than it is right now… even crippled as it is, the bank is willing to extend them $4mm… so, 3x that is $12mm. Divide that by 18mm shares outstanding. That gives you 67¢/share.

59. RE SD- Can’t we find out who is marketing them?

60. KOG — lemme double check something on my prior statement… don’t know if all $4mm is avail. Give me a sec.

61. Eld – I would think they would be. They probably have a data room open on it… I just don’t recall the asking price. Timing is one of those things that will be up to the buyer. I do recall they have had what they call “good interest”. Will snoop about.

62. KOG — ok, it’s a $20mm facility with $3mm (not $4) available as its borrowing base as of 12/31/08.

63. Oil back over $48 now, would like to see it close over $49. It appears to me we are seeing a bit of a last bump for crude inventories before they roll lower with increased utilization.

64. z — i haven’t looked at the SD midstream assets… but, could they drop them into an MLP structure? Of course, that assumes they could borrow the debt to support the MLP. But, is that something they have talked about?

65. Forgot to put GMXR on the Tier 1 list as well from #44.

66. BOP – I thought I hear sale for those assets.

67. Midday Overview

    · Stocks took a breather in the morning, but the firm bid remains for equities and sp500 well off its lows heading into mid-day (led up by financials and tech); Equities off lows (SPX -3pts) as industrials and energy are leading to the downside; financials are leading to the upside (banks & insurance again helping). Commodities are weak (crude -$1.50 to $47.67, gold -$25) despite the USD moving lower (DXY -0.6%) and the Baltic Dry Index today suffered its worst decline since October (dropping 113pts or 5.7%). Not any one reason for the sell-off, other than some healthy profit taking on back of yesterday’s 3%+ rally in the sp500 (a Bloomberg headline today: “U.S. Stocks Fall on Concern Fed Will Fail to Boost Confidence”). The Fed statement will hit @ 2:15pmET today.

    · Credit – CDX is out again today (as of 11:45am, out ~3bp to 240-241 on CDX11); very quiet action in credit. Credit continues to lag equities for the most part, although recall it had been outperforming earlier in Mar.

    · Earnings – DRI and ADBE both trading higher after earnings reports; GIS is selling off 9% on back of its report. For the rest of the week: ORCL & NKE come tonight and FDX is tomorrow morning.

    · M&A – speculation of a deal between IBM and JAVA is the latest very large strategic deal; in the past couple weeks, there have been a bunch of very large health care transactions (worth well north of $100B in aggregate) but today’s IBM/JAVA news in the Journal is the first hint that activity may be picking up in other sectors.

    · Economics – Inflation numbers out today assuaging concerns about deflation in the US; there were some ugly employment figures out of the UK this morning. From M Feroli on inflation: “The Consumer Price Index (CPI) increased 0.4% in February and the ex-food and energy core category rose 0.2% (0.186%). Consumer inflation in the first two months of the year is starting to look more normal than the extremely depressed numbers that printed in the fourth quarter of last year”

    · Euro is strong today – in part b/c the inflation numbers in US are weighing a bit on the buck but also due to some decent numbers out of certain European banks (Unicredit in Italy and National Bank of Greece – note both are in countries that are members of the PIIGS so any decent news is relieving market concerns about health of Eurozone). In addition – Germany’s Deputy Economy Minster Walther Otremba made some relatively sanguine comments on the outlook for that economy, saying the first signs of recovery could become evident starting in H2:09….”said that he doesn’t share the pessimism of those who estimate the economy will shrink as much as 5 percent this year. The economy may show expansion, albeit for technical reasons, as soon as the second quarter after growth plummeted in the first three months of 2009″

    · The UK’s FSA issues a new stringent regulatory overview for the UK banking industry…..the market is taking the report as a negative as it could hit industry profitability; there are fears that more countries may adopt a similar blueprint ahead of the G20 meeting Apr 2. See link for the full FSA/Turner Report on new UK bank regulations: http://www.fsa.gov.uk/pubs/other/turner_review.pdf

    · Hedge funds – a record number of hedge funds liquidated in Q4 according to HFR; 778 funds liquidated in Q4, more than 2x the level of Q3 (344); for the year, 1471 funds liquidated, 70% higher than the prior record (which was in ’05).

    · FASB Issues Proposals on mark-to-market accounting this morning; the comment period is pretty brief (comment period ends Apr 1) and the FASB board will meet Apr 2 to potentially approve the new rules. The adjusted rules will apply to periods ending after Mar 15, so banks would theoretically get to apply them to their Q1 reports (bank earnings season starts week of Mon Apr 13). The rules are for “Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, provides guidelines for making fair value measurements more consistent with the principles presented in FASB Statement No. 157, Fair Value Measurements”

    · Gold – spot prices are dn twenty bucks to $895/oz, the first major sign of volatility this week; the 895-905 level is huge support (was tested multiple times in Feb and even early last week). prices don’t seem to be inversely correlated w/ US$ action anymore (note the DXY dollar index is off big today), and haven’t been for a while now. also concerning is the fact that prices didn’t get a lift y’day following reports of Paulson & Co’s purchase of an 11% stake in Anglogold Ashanti (this follows the trend of prominent hedge funds piling into gold). Note JPM Metals analyst Jansen is bearish short term on gold, expecting scrap sellers to follow market down, notes investment demand has also moderated due to stabilization in outside influences.. says look to cover shorts and initiate longs towards ~$850/oz.

    · Treasuries are higher across the board ahead of this afternoon’s Fed announcement. Our desk has seen a little selling in the front-end of the curve but overall flows are light (expected to pick up a bit this afternoon). Key focus in the announcement will be whether the Fed announces a plan to buyback treasuries. 10yr bounces off 3% yield level again (currently 2.96) and 30yr is at 3.76%.

    SP500 Performance Breakdown (source: Bloomberg)

    · Best performing stocks in SP500: JAVA, AIG, ETFC, C, DRI, GNW, PLD, HIG, BAC, HBAN.

    · Worst performing stocks in SP500: COF, GIS, LNC, JEC, EOG, FCX, UNP, ISRG, PXD, HES, DVN.

    · Contributing the most to SP500: BAC, C, JAVA, WFC, MET, BK, VZ, AIG, ADBE, EMC.

    · Weighing the most to SP500: XOM, IBM, PG, HPQ, MSFT, CVX, GIS, KFT, GOOG, SLB.

68. Greening of the group in progress.

69. Good to the recovery off the lows on HK with the group, not a one day wonder as long as oil can go off the board today close to $48. Retest of Tater’s resistance at $19.10 going to be pretty important.

    Also, nice to see CHK bobbing up here, I own common only but the Haynesville group will take a cue on leadership from them.

    EOG pullback wasn’t enough to drive me into the options given the high premiums, will await the next big market red day to go long again there. I think the oil side is really starting to have a positive impact on their low debt, getting oilier and oilier story.

70. #6 – VLO and Verasun. Great deal long term for VLO. I will be curious to see what VLO has to say about this in their next conference call. Transportation of ethanol is the one remaining question i would have for VLO. They can now produce all that they need but they have to move it effectively.

    I have a call into Verasun to see if they are selling any rolling stock in the VLO deal. For a while ethanol tank cars have been hard to come by. Not sure where that stands at the moment – but if VLO got some tank cars in the deal that is a kicker. New tank cars are about $100,000 a pop. Usually ethanol folks lease cars from the railroad = premium price.

    the Aurora SD plant is one of the original large scale ethanol plants in the US. they also produce feedstock for biodiesel there too.

71. Thanks 1520. I think the gasoline build has put the breaks on the group today or we’d be seeing a move out of VLO. I’m quite confident that VLO is better equipped to manage that business than Verasun was.

72. #71 – agreed – VLO certainly has an advantage in managing a commodity input oriented business. Absolutely the best way to buy giant plants that are already operational is via bankruptcy/fire sale. Should be interesting for VLO.

73. 1520 – while I’ve got you, are any of the cellulosic ethanol public companies still in business?

74. VLO buying the 2 verasun plants- $477mln

75. re: #73… BFRE stock still trades with 4 letters…

76. So if stocks were off early on a perceived failure of the Fed to boost confidence in the markets, who thinks they rally this when Ben, who has been on spin control for 2 weeks now, turns it up another notch with this statement. I’d like to think he could add another statement to propel the market a little further.

77. Thanks BOP, do they have a commerical scale entry or a science project in the lab?

78. Good Afternoon,
    I love the I will survive idea-how about a basket with probability/weights put together to balance risk?

    On another note Mr K went long the SKF-
    (a trade)if anyone has been trading the financials

79. z — met with BFRE about 2 yrs ago… impressed. But not enough to actively follow the company. I think they had a coupla little sites up and running, tho. So, more than just a science project. Thing is, they claimed they could be profitable w/o the govt subsidy b/c they used “trash,” not food (corn), as input. That was “key” in my opinion.

80. #73 – AVentine Renewable is close to bankruptcy.

    I think there was a BP – Verenium deal to build a plant in Florida that i think is well off the rails and in need of more capital.

    POET is the best chance i think to get a cellulosic large scale plant up and rolling. POET is privately held and is the largest ethanol producer at the moment. http://www.poetenergy.com is their site – some very interesting stuff there.

81. Verenium was one of the ones I was thinking of.

    Thought someone was opening a straw and corn stalk plant in the South.

    Thanks for that link. I try to keep up with the stuff but generally just refresh my memory every six months as there hasn’t been as investment worth touching in the space.

    Makre

82. hmmmm…. Mr. Market likkee Fed Meeting results.

83. 750 billion in agency mortgaged back securities.

84. http://www.iogen.ca/ was bought by Shell last year and they talked about it as their preferred alternative energy.

85. Added a few more HK $20 calls, had to pay $0.15.

86. Thanks V – didn’t Shell say yesterday they were scaling back their green efforts to keep oil production targets intact and to help them out of their under funded pension status?

87. HK through the $19.10 resistance.

88. API: Shell abandons wind, sun, hydrogen for biofuels
    2009-03-18 17:12:39.838 GMT

    http://www.smartbrief.com/news/api/storyDetails.jsp?issueid=CD922E28-F305-4BA9-971E-9F7A773B6A6A&copyid=9F98E637-0204-423B-80E2-856AAC7C7D6D&brief=api&sb_code=rss&&campaign=rss

89. Mr K not likkee Fed Meeting results…

    Actually, the Fed purchasing MBS has been a key to stabilizing this entire “distressed asset class” mess. So, great news for the financials.

90. Thanks BOP, I see so many headlines go across, but don’t read them all. So they quite the solar and wind IN FAVOR of biofuels.

91. I don’t think Shell has ever been a big proponent of green technology. I think they said they spent 1.7 billion in the last 2 years. I know they are trying to cut costs aggressively similar to Exxon.

92. Unlike the last coupla days, the credit market is buying into this stock market rally.

    IG gapped tighter, to 233 bps

    HY jumped higher, to 70.25

    a sigh of relief was heard across the fixed income desks of the world.

93. http://www.poet.com/news/showRelease.asp?id=156

    I’ll keep an eye on this one – corn cobs are better than switchgrass or trash.

94. Fed to Buy $300 Billion of Treasuries, Increase Other Purchases
    2009-03-18 18:17:15.452 GMT

    By Craig Torres
    March 18 (Bloomberg) — The Federal Reserve said it will buy $300 billion in Treasury securities and increase its purchases of mortgage and agency debt in an effort to bolster housing and hasten the end of the recession.
    “To provide greater support to mortgage lending and housing markets, the committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage- backed securities,” the Federal Open Market Committee said in a statement in Washington today. “Moreover, to help improve conditions in private credit markets, the committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.”
    Chairman Ben S. Bernanke is becoming more aggressive after unemployment climbed to 8.1 percent and economists forecast the economy will shrink through the middle of the year. Fed officials also kept the benchmark interest rate at between zero and 0.25 percent. The central bank also said it will consider expanding the Term Asset-Backed Securities Loan Facility to include “other financial assets,” the statement said.
    The Fed added that it will “increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion.
    Federal Reserve Chairman Ben S. Bernanke is trying to prevent the credit contraction from deepening what already may be the worst recession in 60 years. The U.S. jobless rate jumped to the highest level in more than a quarter century last month.
    Industrial production fell 1.4 percent, the fourth consecutive decline, while factory capacity in use slumped to 70.9 percent, matching the lowest level on record.

    Shrinking Economy

    The global economy will contract this year for the first time since World War II, the World Bank predicts, forcing central banks to keep pumping money into their economies when conventional interest rates are at, or close to, zero. The Bank of England is buying government bonds and corporate debt, the Bank of Japan is snapping up government notes and making subordinated loans to banks, and the Swiss National Bank is intervening to weaken the franc.
    The Fed has cut the benchmark rate from 5.25 percent, beginning in September 2007, as credit froze and the economy buckled. Policy makers are now focused on how to further channel money to the economy.
    The Fed has already committed to buying $600 billion of mortgage-backed securities and bonds sold by government- sponsored housing agencies.

    Home-Loan Rates

    The Fed’s actions pushed the average rate on a U.S. 30-year fixed rate mortgage to 5.03 percent on March 12, down from 5.15 percent the previous week. Still, rates are high relative to benchmark Treasury issues: Prior to today’s meeting, the difference between rates on 30-year fixed mortgages and 10-year Treasuries is 2.1 percentage points, Bloomberg data show. That’s up from an average of 1.75 percentage points in the decade before the subprime mortgage market collapsed.
    Through emergency loans and liquidity backstops, U.S.
    central bankers have expanded Fed credit to the economy by an unprecedented $1 trillion over the past year. At the same time, forecasters at Macroeconomic Advisers LLC in St. Louis predict a
    5.2 percent decline in first-quarter gross domestic product, following a 6.2 percent drop in the fourth quarter.
    “It is the worst credit crunch since the Great Depression,” Laurence Meyer, a former Fed governor and vice chairman of Macroeconomic Advisers, said before the decision.
    “The banking system is reeling, credit is being choked off, it is dramatic in size.”
    Banks worldwide have posted $1.2 trillion in write downs and credit losses on mortgage loans and other assets. U.S.
    Treasury officials will put the largest 19 banks through “stress tests” and decide whether they need more capital. The banks can raise equity privately or seek more government funds.
    Officials are also looking at ways to remove bad assets.

    ‘Green Shoots’

    Bernanke, 55, told CBS Corp.’s “60 Minutes” on March 15 that he sees “green shoots” in some financial markets, and that the pace of economic decline “will begin to moderate.”
    The Standard and Poor’s 500 index is up 11.5 percent this month. Chief executive officers from Bank of America Corp., JPMorgan Chase & Co., and Citigroup Inc. said their banks made money in the first two months of the year.
    Coca-Cola Co., health insurer WellPoint Inc. and more than 30 other companies are tapping longer-term credit markets and paying down their short-term IOUs, a sign of some investor confidence.
    Sales at U.S. retailers in February fell less than forecast and a gain in January exceeded the previous estimate, indicating the biggest part of the economy may be starting to stabilize.
    Housing starts in the U.S. unexpectedly snapped the longest streak of declines in 18 years in February, adding to the series of data that suggest the pace of the economy’s decline may be easing.
    Consumer prices rose 0.4 percent in February from a month earlier, the Commerce Department reported today. The annual core inflation rate increased to 1.8 percent, within the range most Fed officials say is their objective, easing concern about a deflationary spiral.
    “There are always going to be some signs of revival; this is a resilient country,” said Julian Mann, who helps manage $4 billion in bonds at First Pacific Advisors LLC in Los Angeles.
    “But consumers are fearful, and when they are fearful they aren’t going to spend.”

95. gold turned on a dime-from mid 880’s to 926 in a matter of minutes-dollar down

96. Oil closed the regular session over $48. Pretty good indication that traders are looking out a few weeks and seeing falling inventories as there was nothing in today’s data that didn’t call for a bigger sell off.

97. Dollar down should help our friend crude. One of the reasons besides demand slipping since August has been the Dollar rallying from 72 to 87.

98. Choices – hear ya, dollar looks weaker with fed increased spending…actually makes sense.

99. Seems like oil should rise as inflation might be anticipated?

100. Credit market rally tried to pull back… but was met with buyers. So, positive moves in credit sticking. Fingers xx’d for a close on the IGs with a 220’s handle. Still at 232 bps.

101. Mr. K usually early says S&P met his expected 800-805 target

     Also lots of indicators suggesting were oversold very soon (Friday ish)

     Of course expiration playing havoc

102. Crude over $49 in the after market, down a dime. Much ado about nothing kind of trading day there.

     SU down a buck still. hmmm.

103. SP500 broke that resistance at 780 and was off like a shot, 796. Gap in the chart at 825.

104. Not sure which I’m happier about, another green market day or pandora available for blackberry. Naahhh, the market wins that one.

     Crude green and going for $50.

105. HK. Prudent thing to do is to split the bid, take 30 cents and a double on those March 20s.

106. NG just not playing nice. $3.68, down 13 cents. The snap back to higher levels here is going to be vicious.

107. Big bump in March call activity in HK post the Fed in the 17.50s until you look at the CHK $17.50 … 16,000 contracts today.

108. CRZO — hearing they were the target of a bear raid… like PQ. In redetermination right now. But, huge reserve base + will lobby banks to remove preferreds from credit measures (it shouldn’t be included as “debt”), means could see a post-redetermination bounce back into the teen’s. Hearing this from the same boys who brought you the “buy” PQ” at 90 cents. FWIW.

     comments, z??

109. From the credit desk strategist —

     Do not look at the CDS market for confirmation as to whether the Fed’s announcement of quantitative easing is good for credit – the IG and HY indices did tighten – but only moderately. Confirmation that the move is good for corporate credit is obvious, but it will take a couple of days for the entire effect to be felt by corporate bonds. Why? First, the spread difference between corporate bonds and duration equivalent CDS is relatively wide. Therefore it is difficult for CDS to rally without corporate credit to rally as well. (2) The FED’s actions have the possibility to increase overall credit trading and liquidity in the entire credit markets – this will help reduce corporate bond liquidity premiums. (3) The decrease in LT treasury yields will force companies with LT liabilities (Pension Funds and Insurance Companies) back into the market – especially for NEW ISSUE CORPs. (4) The possible reduction in MBS yields associated with the purchases makes corporates look cheaper on a rel val basis.

110. BOP – you caught me look at the drybulks and watching the stupid minute chart on HK.

     I like CRZO, don’t actively follow as the options have been poor traders in the past and I didn’t want the stock. Is it convertible preferred? Otherwise I call it debt. Need to look at their budget vs their balance sheet which I have not done. Will have to get back to you as I’m about 20x as current on PQ as I am on these guys, but again, I ’em.

111. Market just went sham ugly

112. Bud Brigham put his money where his redetermination is at.

113. i respectfully disagree with you on treating staight preferred as debt. Under no circumstances can preferreds force a company into BK. The only teeth they have is grabbing board seats, in the event the coupon is skipped for a quarter or two. Only stuff that can push you into a chapter 11 should be considered as debt (unless there is a weird bank covenant that says non-payment of preferred constitutes an event of default… but, in that case, why would the company issue preferred vs debt? preferred coupons are not tax-deductible, debt is).

     Of course, you should throw the pref’d coupon payments into “fixed payments” if you want to be conservative (which you should be) in a credit analysis. But, preferreds are toothless, compared to what real debt can do to a company.

114. make that “dividends” on preferreds… not “coupon.”

115. I wasn’t thinking of it from that perspective. I was thinking you might as well add it into the capital structure from a TEV standpoint. Its out there, you need to pay dividends on it so if its not debt, what is it, equity with a required dividend? Sounds like an obligation that takes away from my cash flow to me. I’ve seen people skip preferred payments and by the time they do that they are in trouble.

116. Does anyone know if you can plot implied volatility on think or swim?

117. well… having waded through this argument with the rating agencies in my past life… i can tell you for a fact that Moody’s does not consider preferred stock (convertible or not) to be debt. It is thrown into the equity basket. Don’t think you get a 1-for-1 treatment like straight equity, but it is a flavor of equity, nonetheless.

     I agree, tho, it IS part of the TEV, of course. But preferred should not be included in the “debt basket” for bank line determinations.

118. Let me run this by you. Do you consider capitalized interest and cap G&A to be part of the process for determining ability to support debt payments, or just the cash components that show on the income statement?

119. z — what option do you want hist vol plotted?

120. Thanks BOP – just trying to find a free source for plotting implied volatility, nothing in particular now, just had a feeling about something earlier and want to see for myself but I’d need to key in a bunch o names.

121. definitely include cap interest… that is a fixed payment. g&a… well, you can always fire people.

122. z — i am told BB can do it. i know i can pull up implied vol… but, haven’t tried graphing it.

123. Thanks BOP, I do appreciate it. Are we talking past each other on the preferred, ability to service debt issue? I like to look at everything the company pretty much has to do create cash flow and see preferred divs as one of those things. Don’t pay them and it seems you pretty much shut down an avenue of finance and tick people off and end up renegotiating something that may have been straight preferred into something that is dilutive to the common.

124. Call volumes running out the wazoo on hk, chk into the close, maybe others have not looked. My sense is with a green equity market we take a shot at $50 Thursday or Friday on crude and if that level holds for any length of time it will cause 3 to 4 month highs in the E&Ps.

125. Z – still learning the thinkorswin platform, but I think the answer will be yes. Get back to ya.

126. Dman – do they make you open an account to play with those features. Can do but wanted to try out first. My Streetsmart people have no interest in charting option values let alone the greeks.

     Pretty decent close. Beeeeerthiiirttyy

127. Z – I just pulled up a chart of HK option vol & will email it to you. You have to set up an account to get the platform, but you don’t have to fund the account.

128. Dman – specifically I was looking for implied volatility of the HK March 17.50 option but if it can do that I will do as you say and get set up, thanks much.

129. Been off line, CRZO is on my list BOP…Back on manana

130. Z – I had some gmail problems, only just sent the chart to you.

131. Thanks Dman, got that IV email. That’s pretty neat. Would like to see if they can take a look at the IV of one strike, plotted over time.

132. reef — CRZO… is that the “Still Standing” list? or the “Bye, Bye Birdie” list?

133. Market Summary:

     SP500 closes +2% to 794; financials +10%; Huge afternoon for the Fed, although stocks close off their best levels; Commodities rose (gold up $25 to $944 after surging $50 in the afternoon, crude up 26c to $49.42 after being down over $2 earlier) as the USD (DXY) fell 3.2%. Treasuries surged (10yr up over 4 full points and 30yr up over 5 full points) and Credit tightened (IG was 6bps tighter to 229/231 and HY was 1/8th lower to 69¾). 50day MA (~803) on sp500 cash proved a very tough level to get through this afternoon. Note that since its intra-day lows (666 on 3/6), the Sp500 has climbed 18% while the SP500 Financials index is up 48% in the same time period (many individual financials have more than doubled from their recent lows) = things had become pretty overbought (3-day e-mini RSI @ very elevated levels this afternoon at 95+). The broader markets have been in rally mode really since 3/9 (financials since the Fri before, 3/6) and have started to become a bit fatigued. Bit of profit taking setting in (case of “sell on the news”) and some worry that the market is “running out of catalysts” (people already optimistic heading into Q1, esp. on banks, Fed has taken substantial action, the TALF is funding deals, etc; GE’s meeting tomorrow the last major event of the week); also – there is an expiration this Fri as well as an S&P rebalance. That said, we held above key technical level @ ~775 and equities continue to have a different tone to them.

     · Two big earnings after-hours NKE, ORCL ORCL looks strong across the board and shrs are up 7% (co paying first ever dividend too); NKE has a big headline beat, but looks like low quality.

     It was all about the Fed this afternoon. A lot of big news from the Fed/Washington today: 1) the Fed statement (see below for full recap) – expansion of MBS/agency debt buys somewhat expected, but huge news that Fed will start buying $300B worth of Treasuries next week; 2) expanding the TALF – the Fed said in its statement that the Talf will prob. be expanded to include other asset classes; Bloomberg reported today (prior to the Fed release) that officials were considering expanding TALF to toxic legacy assets (the Fed statement wasn’t clear about which assets it was being expanded for); 3) the Mar TALF funding window closes tomorrow @ 5pmET – last night we saw somewhat pos. news on a Nissan deal pricing through the vehicle (Reuters says was very strong demand for the issue) and Reuters today said Ford was marketing a ~$3B ABS deal via TALF.

     · What else is expected from Washington?? We are still waiting on details for the public/private “bad bank” (a Treasury source told Reuters this weekend that an announcement could hit this week), the TALF funding window closes Thurs night (will actually fund Mar 25), an announcement on the auto industry from the White House task force is due next week, and the bank stress tests are expected to be wrapped up by Apr. We are also still waiting to hear about whether insurers will be granted access to the TARP.

     · Bonuses & regulation – the outcry over AIG’s bonuses is getting louder, w/CEO Liddy speaking before Congress for much of the afternoon today on the subject; leaders from both parties continues to fall on the company and Treasury to take action (The House Judiciary Committee approved a bill that would grant the U.S. Department of Justice the right to claw back the bonuses paid to execs at AIG, one of several actions coming from Congress on this issue – DJ). Meanwhile, in the UK the FSA (that country’s financial regulator) published a new regulatory/capital blueprint for the banking industry (which imposes tough new capital requirements, among other restrictions). The Apr 2 G20 meeting in London is expected to focus a great deal on enhanced worldwide financial regulations.

     Fed decision – key highlights

     · Bottom Line – the Fed announced a huge expansion of its balance sheet today; recall the Fed’s balance sheet hit a peak of ~$2.35T on 12/17 and has since been declining (as of last week it stood @ $1.929T). To put this into perspective, the B/S was in the $800B range for most of the middle of this decade prior to the credit markets imploding. Today, the Fed made new commitments to its balance sheet which would expand it a further $1.15T (a 60% increase from the current levels) and this is before the TALF is accounted for (recall that the Treasury/Fed have said the TALF could be expanded up to $1T in size).

     · MBS purchases expanded – the Fed has committed to buying back up to $750B incremental of MBS, on top of the $500B already announced (so now has $1.25T total authorization for these purchases)

     · Agency debt purchases expanded – Fed has committed to buying up to $100B incremental of agency debt this year for $200B in total

     · Treasury purchases – the Fed has decided to purchase up to $300B of longer-term Treasuries over the next 6 months (the Fed has been talking about doing this, but not many people expected them to make the move at this meeting). The NY Fed published a separate release w/the details of the Treasury purchases – says will concentrate purchases in 2-10 sector of curve…sys will make purchases 2-3x per weeks….plans first buy next wk

     · TALF – The Fed says the TALF “is likely to be expanded to include other financial assets”

     · Inflation – language sounds similar to prior meeting – “the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term” (note that the CPI report today showed an increases in prices, the second consecutive month this reading has been more normalized vs. the depressed levels of late ’08).

     · Eco growth – maybe a touch more positive than the prior language….says that evidence continues to point towards contraction, but adds this: “Although the near-term economic outlook is weak, the Committee anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth”

     · http://www.federalreserve.gov/newsevents/press/monetary/20090318a.htm

     SP500 Performance Breakdown (source: Bloomberg)

     · Best performing stocks in SP500: JAVA, AIG, ETFC, AFL, XL, HIG, C, BAC, DDR, RF.

     · Worst performing stocks in SP500: GIS, KFT, YHOO, ISRG, JEC, CELG, TMO, ESRX, GILD, AMGN, HES.

     · Contributing the most to SP500: WFC, BAC, JPM, BK, MET, C, GE, JAVA, CVX, VZ.

     · Weighing the most on the SP500: GIS, HPQ, KFT, AMGN, IBM, GILD, ABT, MO, PM, YHOO.

     Upcoming Events

     · Corporate Events – ORCL and NKE report earnings tonight; Thurs Mar 19: earnings (FDX, China Mobile, Prudential PLC, DFS, NWY, BKS, PLCE, PALM, ROST, PRGS, BBI, COMS), analyst meetings (GE, ES, TS). GE Capital analysts meeting on Thurs morning

     · Economics: Thursday, Mar. 19th: US (Jobless Claims, Philadelphia Fed, Leading Indicators); Eurozone (UK – CBI Industrial Trends); Other (Australia – Vehicle Sales, Switzerland – Trade Balance, ZEW Survey, Canada – CPI).

     · Washington – Investors are looking forward to potential news out of DC…..Some of the bigger events on the horizon: 1) TALF. – Yesterday’s Nissan deal was oversubscribed 4-5x, but investors are looking to looking ahead to how many other deals get done and what the participation level will be, 2) Insurers & the TARP – the market is still waiting to hear whether certain insurers will be allowed to access the TARP; 3) bank stress tests – the Treasury has said this process could be wrapped up by the end of Apr.

     · S&P and Nasdaq quarterly share rebalance Friday after the close.

134. Z – I’ve found how to chart IV over time for a stock, but I’m not sure if it’s based on front month (guessing so, but not sure). Haven’t yet found a way to chart a specific call’s volatility. New screen grab on way…

135. Dman – thanks much, if you send it I should be able to quickly figure out which month it is. Default should be March / front month.

136. Thanks Dman – that’s interesting, seems to just apply to the common. Got sent a Bloomberg screen of it so I know I could get it there but was looking for a free source…will keep looking. Thanks for your help.

137. Saw Matt Simmons on Bllom when I got home but unable to find it on the net. Obviously, he was bullish. Ran across this:

     http://www.bloomberg.com/apps/news?pid=20601207&sid=a6xI8v8a_Cyo&refer=energy

138. Thanks Wyo – the early read was 14, so they are notching it back a little. When it rains it pours. In general, I find the numbers to matter less than the one or two that come in and hit just right. The Katrina season was off the chart but the storms last year saved gas’ bacon.

139. You can post charts and screens with this. It is a free install that can deliver things like this:

     http://screencast.com/t/bhSzPSPLeI

     Took me about 3 steps once I had the chart set up.

     Or something totally stupid like this:
     http://screencast.com/t/z0vkGPLOq7

140. Forgot the install link

     http://www.jingproject.com/

141. Wyoming – ya know you put this on the site the other day and I was like, that’s cool. But now I see the power of it. Anytime Nicky or anyone else has a screen they want to put on the site they can established a screencast link to it. Sorry, me slow. That is very cool. Will put in the odds and ends of the post for tomorrow so people can save typing a 1,000 words for their pictures.

142. No, cool is Cat Norris. Respect the CAT.

143. The Cat Norris is cool as a concept. Doesn’t work on real dogs. I have three Australian Cattle Dogs that hunt as a pack and would turn Chuck into tennis racket material.

144. Those dog’s don’t know Cat, err Jack.

145. 3 ACD’s = 1.5 dogs and 1.5 dingos. 2 are blues so they actually pay attention. The other is a red and he’s essentially a warm hearted tasmanian devil.

146. Now I know why you were looking for the 1/2 side beef from Cattleman … where did he go?

147. Cattleman had an accident and quit the site.

148. Thanks.

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