09
Apr

Thursday Oil Review and Natural Gas Preview

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The market is closed for Good Friday so if I don't talk to you in comments today have a great holiday and Easter Weekend!

Sentiment Watch: Look for a light volume trading day with upward bias due to bad but not as bad as expected retail sales data (except for WMT), word from Wells Fargo that their first quarter was pretty good for lending, word from the Bank of England that further cuts in interest rates "aren't necessary", and jobless claims that were also less bad than expected.  A dearth of news continues from the energy sector and I'd think of that as the calm in a holiday light week before the storm of pre-announcements and operations updates over the next two weeks as 1Q09 earnings season for energy begins.

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In Today’s Post:

  1. Holdings Watch - covered BHI puts, added EOG and CLR calls.
  2. Commodity Watch
  3. Natural Gas Preview
  4. EIA Oil Inventory Review
  5. Stuff We Care About Today - HAL, SWN, deepwater rigs
  6. Odds & Ends

 

Holdings Watch: Busy day yesterday. The wiki tab is updated.

  • Sold the BHI April $30 Puts (BHIPV) for $2.15, up 51%, with the stock at about $28.30 and just before the EIA numbers. Continuing to hold the HAL puts.
  • Bought $10KP 10 EOG $60 April calls (EOGDL) for $0.75 on the oil numbers with the stock off worse than the group.
  • CLR - $10KP added (5) April $25 calls (CLRDE) for $0.40 with the stock at $22.35 as oil goes green on the day after a more bullish report. See comment 31 on today’s post.

Commodity Watch

Crude oil rallied after a better than expected oil inventory report from the EIA (see breakout below). Oil retook $50 following the EIA data but only closed up $0.23 at $49.38 after an afternoon sell off following the Fed minutes. This morning crude is trading up about $1.70 flirting with $51.

Natural gas accompanied oil higher but also was lifted by word of the Sable Island shuttering and cold weather in the nation's mid section and New England. Gas closed up $0.07 at $3.63. This morning crude is trading slightly.

Natural Gas Preview

  • My number: 5 to 10 Bcf Injection.
    • History:
      • Last Week:  Unchanged
      • Last Year:  16 Bcf Withdrawal (the trough of the season)
      • 5 Year Average: 22 Bcf Injection
    • Weather: 118 heating degree days vs 125 in the prior week (which yielded that unchanged storage result) and 129 a year ago (which got us that 16 Bcf withdrawal). When you break down the numbers by region, the areas that needed to be cooler to stave off injections (New England, Mid-Atlantic, South Atlantic) were too warm. That may reverse this week (next week's number).
    • Imports: Continue to run soft to prior week and last year. On a year over year basis, imports from Canada are down 2 Bcfgpd, LNG is up 0.4 Bcfgpd; together this accounts for a 10 Bcf swing year over year.
  • Street Consensus: 12 Bcf Injection

ZComment: We're at trough storage. Cool weather will help keep us here or close to here for another week or so. Then, as both HDDs (heating) and CDDs (cooling) are at a minimum, the pace of the refill will be closely watched.

EIA Oil Inventory Review

CRUDE OIL - "In Line" build to stocks but smaller than one would have construed from Tuesday's API crude data. Imports fell and refinery inputs crept higher.  I continue to look for an increase in inputs and a further decline in imports in the coming weeks and months of summer.

 

 

 

GASOLINE - Two words: Weak Demand. Ten More Words: Stocks Will Bloat Quickly If Demand Does Not Rally Soon.

 

 

DISTILLATES - Production will ramp soon as refiners come back on line since they can't just make one product (gasoline) or the other (diesel) but can only tweak the mix slightly depending on the season (a little more gas in summer, a higher % distillates in winter, (still well under half)). This combined with a weak exports market and demand that while not dead is tepid will make a bad situation for stocks worse. Demand, demand, demand.

 

 

Stuff We Care About Today

Goldman Recommend Buying HAL Put Spreads

  • Recommend buying puts to hedge HAL positions prior to April 20th 1Q09 press release
  • Wrote in the note that HAL is exposed to geographic risk, more than SLB. True enough.
  • Says attractive valuation is offset by declining rig activity in NAM and pricing pressure in key markets. Also a fair statement.
  • Says the North American Market will put "severe pressure on revenues and margins"
  • They say options are implying more of a swing in the stock price than has been produced by the past 8 quarters of earnings reports.

SWN Extends Rights Plan

  • New plan in place through 2018
  • Essentially a poison pill triggered when anyone takes 15% of the company or someone deemed to have less than the best interests of the company in mind takes 10%
  • These usually result in weak-ish performance for a day or two following their adoption as they are seen as taking the company "out of play". I would suspect this one will have less of an impact as the company has been trading at more than is usual premium to the group so I doubt they were really in play at present. It's simply cheaper to drill on Wall Street in so many other names.
  • I'll reposition my calls here shortly

 

PBR Rig Tender

  • 28 Rigs, mostly sub-salt off Brazil, which is going to be primarily deepwater
  • Good news for (RIG), (DO), potentially for (NE) and (ATW) as it keeps demand tight as new builds are delayed and canceled in the deepwater market.

 

Odds & Ends

Analyst Watch: CIBC raising target for (CNQ) from $54 to $60, cutting (ECA) target from $68 to $60, (TK) target cut from $30 to $25 at Lazard.


151 Responses to “Thursday Oil Review and Natural Gas Preview”

  1. 1
    Sambone Says:

    By Nick Heath
    Of DOW JONES NEWSWIRES

    LONDON (Dow Jones)–Nymex crude oil futures climbed more than $2 to back above
    $51 a barrel Thursday, boosted by stronger regional equity markets and as
    traders adjusted positions ahead of a long weekend.
    Crude prices traded back firmly into the heart of their recent ranges
    Thursday, the last day of a trading week marked by another series of volatile
    prices moves. Gains across European and Asian equity bourses mirrored a higher
    close on Wall Street Wednesday, helping brighten some financial market
    sentiment.
    However, question marks continue to hover over demand for crude, with U.S.
    Energy Information Administration data Wednesday offering no strong indication
    that consumption is improving.
    “I think opinion among oil market participants is quite divided,” said Michael
    Wittner, head of global oil market research at Societe General in London. “The
    bears are looking at current fundamentals which are: we’re still in a steep
    recession, demand is contracting, stocks are still high. Bulls are perhaps
    looking a bit further down the road at the various economic stimulus programs
    that, maybe in the second half of the year or beyond, should have a positive
    impact.”
    At 1153 GMT, the front-month May Brent contract on London’s ICE futures
    exchange was up $1.31 at $52.90 a barrel.
    The front-month May light, sweet, crude contract on the New York Mercantile
    Exchange was trading $1.38 higher at $50.76 a barrel, having earlier hit an
    intraday high of $51.46 a barrel.
    The ICE’s gasoil contract for May delivery was down $2.50 at $455.00 a metric
    ton, while Nymex gasoline for May delivery was up 363 points at 147.59 cents a
    gallon.
    Rather than outright bullish, Wednesday’s EIA numbers were construed as being
    less bearish than had been anticipated, with the 1.7 million barrel build in
    crude stocks far less than the 6.9 million-barrel increase reported by the
    American Petroleum Institute Tuesday. A large draw in distillates helped
    support prices, but total supplies in storage remain historically high, diesel
    stocks a sizable 39.7% above the five-year average level. That prices rose
    Wednesday and again Thursday may owe more to exogenous markets, some said.
    “Currently the least you know about oil fundamentals the better off you are to
    trade crude oil,” said Olivier Jakob, managing director of Swiss consultancy
    Petromatrix. “Trading the flat price of crude oil remains a tripartite trade,
    working the correlations to the dollar index and the equity indices.”
    Despite the recent large swings in crude prices, they have been limited to a
    relatively well-defined trading range. Prices could remain hemmed into those
    ranges over the near-term, underpinned by Organization of Petroleum Exporting
    Countries’ output cuts, and obstructed on the upside by depressed demand
    stemming from the weaker global economy.
    “I think we will remain between $45 and $55 – that looks pretty reasonable,”
    said Christophe Barret, global oil analyst at Calyon. “I think everybody is
    happy with that. OPEC looks satisfied with that in the short term, nobody wants
    it much higher. If it goes much higher, we’d have to look carefully at
    fundamentals, and what’s happening on the demand side.”
    An update on global crude demand is expected Friday with the release of the
    International Energy Agency’s monthly Oil Market Report. However, with both the
    New York Mercantile Exchange and ICE Futures closed for the Good Friday
    holiday, market participants will have the weekend to digest its contents
    before they are able to trade on any developments.
    -By Nick Heath; Dow Jones Newswires
    Dow Jones Newswires
    04-09-09 0819ET

  2. 2
    BirdsofpreyRcool Says:

    PRE-MRKT OVERVIEW

    · Equities rally around the globe Thurs morning ahead of the holiday weekend; Euro Stoxx up 1% amid choppy trade, US futures better bid +7pts, while Japan outperformed overnight up nearly 4%. USD & JPY both weaken again as stocks rally. A decent amount of news out this morning…

    · BOE decision as expected: Bank of England Maintains Bank Rate at 0.5% and continues with £75 Billion Asset Purchase Program; The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with the programme, announced on 5 March, of asset purchases totalling £75 billion financed by the issuance of central bank reserves. http://www.bankofengland.co.uk/publications/news/2009/032.htm

    · More signs today of ‘stabilization’ in worldwide eco data: Japanese machinery orders unexpectedly rose for the first time in five months in February, German industrial production came in above economists’ forecasts, U.K. global goods deficit narrowed sharply, China’s business confidence index recovers from an 8yr low, and China´s passenger car sales rose 10 percent in March. South Korea’s central bank held interest rates steady at 2% for a second consecutive month on Thursday, as expected, saying the economy was leveling off after a rapid decline.

    · In financials, the WSJ reports that Morgan Stanley (MS) could report a loss in the Q due to a rise in the value of the co’s own debt.

    · For the life insurers, there are a couple skeptical articles concerning the TARP and if, when, and to what extent, the industry will receive financial assistance from Washington (the WSJ says the TARP only has ~$19B left for financial institution capital injections).

    · Stress Tests: NYT has a somewhat positive article on the bank stress tests; says that after reviewing the nation’s 19 largest banks, regulators have concluded that the industry is healthier than many think, although a few banks will still need further capital injections (banks can attempt to raise private capital although the Times thinks many will end up getting the incremental cash from Washington).

    · “War bond”-like vehicles: Also in the NYT, regulators are discussing creating “war bond”-like vehicles that would allow taxpayers to participate in the ongoing financial bailouts – the White House wants to allow individuals to profit alongside institutional investors and also thinks this effort could blunt political criticism that is rising against the bailouts.

    · BoE looking to split retail/broker ops? The London Times is reporting that the BOE is considering whether to force large financial institutions to split brokers from retail banking operations….the article notes that the Fed is also considering a similar move. Also on the Fed – the Washington Post has a very long profile on Bernanke and the “revolution” currently underway at the Fed.

    · North Korea’s Kim appointed to 3rd term as leader. AP

    · Overseas, Sumitomo Mitsui Financial Group says it will post a loss for the year and unveiled plans to raise US$8B of incremental capital. Moody’s downgraded hybrid debt at Barclays and S&P downgraded most of the major US Mis last night (S&P will be hosting a call today to discuss its actions).

    · In tech, Digitimes is reporting that Apple has started to make massive NAND buys from Samsung and that Nokie and Sony are also ramping up their purchases. Compal, the world’s second largest notebook vendor, reported Q2 notebook shipments ahead of its guidance.

    · Hot dogs: A semitrailer overturned Monday morning on a highway in Wis, spilling an estimated 20 tons of hot dogs. AP

  3. 3
    BirdsofpreyRcool Says:

    Apple, Bank of America, Costco, Excel, GM: U.S. Equity Preview
    2009-04-09 12:49:33.245 GMT

    By Rita Nazareth
    April 9 (Bloomberg) — Shares of the following companies may have unusual moves in U.S. trading. Stock symbols are in parentheses, and prices are as of 7:17 a.m. in New York.

    Financial shares rallied after the New York Times reported all 19 banks examined by the government to determine their viability if the recession deepens will pass the review.
    Bank of America Corp. (BAC US) rose 2.8 percent to $7.26.
    Citigroup Inc. (C US) added 3.7 percent to $2.80. JPMorgan Chase & Co. (JPM US) gained 1.3 percent to $27.80.

    Apple Inc. (AAPL US): Credit Suisse Group AG raised its fiscal second quarter earnings estimate for the company by 12 percent to $1.09 per share, citing better-than-expected demand for both Macintosh computers and iPhones. The firm also raised its price target for the stock by 11 percent to $133

    Berkshire Hathaway Inc. (BRK/A US): The investment and holding company run by Warren Buffett had its top-level Aaa credit rating cut by Moody’s Investors Service on the falling value of stock markets and the impact of the recession on profit. The rating was cut two levels to Aa2.

    California Pizza Kitchen Inc. (CPKI US): The Los Angeles- based casual-dining chain said first quarter-profit per share profit will be between 9 cents and 10 cents, compared with a February forecast for a profit of no more than 5 cents.

    Charlotte Russe Holding Inc. (CHIC US): The retailer of clothing for young women said it had a fiscal second-quarter per-share profit of 2 cents to 5 cents excluding costs to pay severance and conduct a strategic review. The company had previously said it would have a loss of at least 10 cents on that basis.

    Costco Wholesale Corp. (COST US): The largest U.S.
    warehouse club reported its weakest monthly sales performance since November as gasoline prices declined and a stronger U.S.
    dollar ate into international revenue. Sales at stores open at least a year fell 5 percent in the five weeks ended April 5.

    Excel Maritime Carriers Ltd. (EXM US) surged 20 percent to $7.11. Profit from operations excluding some charges and one- time items, was $75.4 million, or $1.71 per share. On that basis, Cantor Fitzgerald LP analyst Natasha Boyden expected the company to earn $1.66 per share.

    General Motors Corp. (GM US) jumped 7.3 percent to $2.07.
    The biggest foreign automaker in China said it expects to double its annual sales in the country to over 2 million vehicles over the next five years.

    Hot Topic Inc. (HOTT US): The teen clothing and music retailer said first-quarter per-share profit will be between 1 cent and 2 cents, up from a prior estimate for a profit of no more than 1 cent, because of higher-than expected sales.

    Morgan Stanley (MS US): First-quarter results at the fifth- biggest U.S. bank by assets may be hurt by $1.2 billion to $1.7 billion on accounting for recent gains in bonds valued at about
    $29 billion, the Wall Street Journal reported, citing people familiar with the situation.

    Shaw Group Inc. (SGR US): The builder of power plants said
    2009 per-share profit will be between $2.10 and $2.30, excluding Westinghouse results. The Baton Rouge, Louisiana-based company had previously forecast a profit of $2.50 to $2.70.

    WD-40 Co. (WDFC US): The maker of lubricants and hand soap said fiscal 2009 per-share profit will be no more than 1.55 cents, compared with a January forecast for earnings of at least $1.60.

  4. 4
    zman Says:

    Crude over $52.

    Listened to Gartman on CNBC poo-poo the natural gas and oil trade in favor of copper and aluminum this morning. He said $52 above or around with a top of $55 maybe possible. Said that there is way too much oil supply around and the fundamentals for natural gas are very bearish. No mention was made of anything but current supply vs demand. Nothing about investment at these prices. Said he expects the economy to begin improving and that it will take the metals up but not oil and gas. Respectfully have to disagree on that one and say that if the market rallies, so too will oil to some degree.

  5. 5
    BirdsofpreyRcool Says:

    CRT comments on SD this morning —

    High debt per producing barrel of reserves, outsized undeveloped asset support and project execution risk have us cautious on SandRidge securities.

    The note features comments on both the equity and debt securities.

    SandRidge Energy (SD, “Fair Value”, $9 target, $7.50 recent trade)

    Appeal of Unproved SandRidge Energy Assets May Erode into Less Certain Out-year Gas Markets

    CRT’s $9 target reflects giving SandRidge less credit for the large tranche of undeveloped assets that the market is currently paying for, and is also defined by a 3.25x 2009-2010 operating cash flow multiple, muted by higher debt and relatively weak coverage and leverage metrics vs the group.

    In CRT’s view, SD’s share price already rewards planned gas production growth rates for the next two years (of 25% to 30% each year), driven by completion of a large CO2 removal facility now under construction.

    With less price hedging support next year, 2009 and 2010 operating cash flows may be similar at around $2.75 per share, taking away from a cash flow growth thesis as support of share price appreciation.

    Given their view of improving gas prices into late 2009 and suspecting a continued quorum of investors keying in on both management reputation (SD’s CEO was the co-founder of Chesapeake Energy) and cash flow multiples as a primary value driver, they are reluctant to recommend a more negative view of the shares, assuming they will remain relatively expensive, but less so over time.

    In CRT’s view, SandRidge securities feature an interesting tension between “reasonable sounding” cash flow multiples and undeveloped asset support of value.

    They think it will be difficult for SD shares to continue being paid ahead for growth in the uncertain but likely challenged gas market of the next two years.

    In addition to gas market uncertainties, SandRidge debt securities are exposed to unique risks to the project development outlook for that collateral. By definition, SD Notes are collateralized by mainly non-productive reserves.

    Indeed competitive with some of the best gas projects in the country, SD’s fully loaded and debt levered cost structure still needs price realizations of over $6 per mmbtu to be commercial.

  6. 6
    elduque Says:

    BDI +15 1478

    TED 95.37

  7. 7
    BirdsofpreyRcool Says:

    U.S. Stock Futures Gain on Wells Fargo Earnings, Stress Tests
    2009-04-09 12:44:51.764 GMT

    By Adria Cimino and Rita Nazareth
    April 9 (Bloomberg) — U.S. stock futures rose, indicating the Standard & Poor’s 500 Index may trim its first weekly drop in a month, on better-than-estimated earnings at Wells Fargo & Co. and speculation banks will pass government stress tests.
    Wells Fargo, the second-largest U.S. lender, jumped 23 percent. Bank of America Corp. and Citigroup Inc. gained as the New York Times reported all 19 banks examined to determine their viability if the recession deepens will pass the review. General Motors Corp., the biggest U.S. automaker, climbed 7.3 percent after saying it expects to double annual sales in China. Futures also advanced as initial jobless claims fell more than economists estimated and the trade deficit unexpectedly shrank.
    Futures on the S&P 500 expiring in June added 2.1 percent to 840 at 8:43 a.m. in New York. Dow Jones Industrial Average futures rose 1.7 percent to 7,923 and Nasdaq-100 Index futures increased 1.5 percent to 1,317.75. Stocks in Europe and Asia gained.
    “We’ve had nothing but good news on the financial industry,” said Jacques Porta, a fund manager at Ofi Patrimoine in Paris, which oversees about $615 million. “If the speculation on the stress tests turns out to be true, we certainly will have another rally.”
    The S&P 500 has climbed 22 percent since reaching the lowest level in a dozen years on March 9 as banks from Citigroup to JPMorgan Chase & Co. said they made money in the first two months of the year and Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets. The index is still down 8.7 percent in 2009 after tumbling 38 percent last year, its worst annual return since the Great Depression.

    ‘Corrections’

    The measure will likely fall to about 780 from last week’s 842.50 close, said JPMorgan’s New York-based strategist Thomas Lee, who cited historical market “corrections” since 1900.
    U.S. stocks gained yesterday, snapping a two-day losing streak, as life insurers jumped on prospects of a government bailout and Pulte Homes Inc. agreed to buy Centex Corp. to create the nation’s largest homebuilder.
    Europe’s Dow Jones Stoxx 600 Index increased 1.1 percent as the Bank of England left its key interest rate at a record low of 0.5 percent. The MSCI Asia Pacific Index rallied 3.1 percent.

    Stress Test

    Wells Fargo jumped $3.36 to $18.25. First-quarter net income was about $3 billion as results at Wachovia Corp., acquired about three months ago, were exceeding expectations.
    The profit, of about 55 cents a share, compares with net income of $2 billion, or 60 cents, a year earlier, the San Francisco- based lender said today in a statement distributed by Business Wire.
    Bank of America gained 2.8 percent to $7.26 and Citigroup climbed 3.7 percent to $2.80. JPMorgan Chase & Co. added 1.3 percent to $27.80.
    Some of the largest lenders may still need additional capital infusions from investors or taxpayers, the New York Times said, citing unidentified officials involved in the research. Regulators may use the findings of the examinations, likely to be completed this month, to push some companies to sell distressed assets, according to the report.
    Federal Reserve officials are conducting an internal review of bank supervision aimed at improving regulators’ response to stress in the financial system, according to people familiar with the process. The evaluation focuses on speeding information flows and clearing up lines of communication for bank examiners who now report to both regional Fed bank officers and the Board of Governors in Washington.

    GM Jumps

    GM rose 7.3 percent to $2.07. The biggest foreign automaker in China said it expects to double annual sales in the country to over 2 million vehicles over the next five years.
    China’s passenger car sales rose 10 percent in March from a year earlier after tax cuts and government subsidies boosted demand, according to the China Association of Automobile Manufacturers.
    Robert Doll, global chief investment officer at BlackRock Inc., told financial news network CNBC he is advising investors to shift money from safer assets such as U.S. Treasuries into equities.
    “The worst of the recession is in the rear-view mirror,”
    Doll said on CNBC.
    He recommended that investors buy energy companies to benefit from a cyclical recovery, technology companies for growth and health-care companies for a defensive investment.
    Profits at S&P 500 companies probably fell 38 percent on average in the first quarter, according to analysts’ estimates compiled by Bloomberg. The stretch of seven straight declines in quarterly earnings is the longest since at least the Great Depression, data compiled by S&P and Bloomberg show.
    Exxon added 0.4 percent to $69.23, while ConocoPhillips increased 0.6 percent to $39.75. Crude oil rose for a second day after a government report showed a smaller gain in U.S.
    inventories than the industry indicated a day earlier.
    Treasuries declined for the first time in three days as global stocks advanced and the U.S. prepared to sell $18 billion of 10-year securities.
    The yield on the 10-year note rose as much as three basis points and was two basis points higher at 2.87 percent as of 6:42 a.m.

  8. 8
    BirdsofpreyRcool Says:

    On the back of the encouraging news from the financial services sector (banks), credit is showing a nice rally this morning.

    IG 185

    HY 74.625

  9. 9
    john11 Says:

    From Simmons re SD
    SandRidge Energy (SD – $7.51 – Overweight) – Company Update: SD continues to do all the right things to traverse both the challenging commodity and broader markets. Looking forward, we continue to feel SD is positioned to dramatically outperform the group as liquidity concerns that led to an 83% decline in the equity in 2008 seem over stated. More specifically, with the increasing likelihood of a sale of their midstream assets (SCI estimate $300 MM) in 2Q’09, SD should have more than enough liquidity to support their estimated $500 and $700 MM capital spending program in 2009 and 2010, respectively. Further, with attractive hedges and locked in basis during those two years (85% of natural gas hedged @ $8.42/Mcf for 2009 and an SCI estimated 75% of natural gas hedged @ $7.70/Mcf for 2010 as well as basis of ~70c or less in 2009 and 2010), we feel they will have ample liquidity to continue to grow production from the Pinon field until they are expected to be cash flow neutral in 2011. Finally, with reduced service costs and projected F&D in the Pinon field of less than $1/Mcfe and an upstream valuation of $1.34/Mcfe vs. the SCI Story Stock Universe of $2.42/Mcfe, SD looks exceedingly well positioned going forwar

  10. 10
    BirdsofpreyRcool Says:

    Catalysts to watch

    · Retailers will be reporting Mar sales this coming Wed night and Thurs morning.

    · Larry Summers to speak @ 12:40pmET (CNBC), Fed’s Stern to speak 12:15pmET, and Fed’s Hoenig to speak 1pmET

    · Obama is expected to seek congressional approval of $75.5 billion for the wars ongoing in the Middle East, perhaps as early as today; “Obama Risks Liberal Backlash on War Funding” – WSJ

    · Obama will get an update on banks & the ongoing stress tests by his eco team tomorrow Apr 10. Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben S. Bernanke and Sheila Bair, chairman of the Federal Deposit Insurance Corp., will attend the session. The group also will have a “significant discussion about other aspects of the economy,” Bloomberg

    · Eco #s today: trade balance 8:30amET, import price index 8:30amET, jobless claims 8:30amET.

    · Short interest will hit after the close today

    · Autos – according to DJ, the White House sent a team of government officials and experts to Detroit on Wednesday to accelerate the restructuring of GM. The 15-member team landed in Detroit on Wednesday to work with GM officials on the company’s restructuring plans – DJ

    · Citi pref/common swap – update from David Faber on CNBC – Citi expected to refile S4 by today…..filing will address minor concerns from SEC review….S4 expected to be cleared by next week….NYSE will create WI market next week when the 4 is officially cleared – Faber says this will relieve some of the shortage in shrs

    · The Treasury will be selling $18 billion in 10-year notes on April 9

    · US markets will be closed Apr 10 for the Good Friday holiday (bond markets close early Thurs and will also be shut Friday).

    · Earnings – big volume of reports kick off next week…..NEXT WEEK – In financials, we get GS Tues and C/BBT Friday. In tech, INTC/LLTC comes Tues, INFY/PLCM Wed, GOOG/NOK/FCS on Thurs. GE reports Fri morning. JNJ starts things off for health care on Tues and ABT is on Wed. In transports, CSX is Tues and LSTR is Wed.

  11. 11
    choices Says:

    PBR-saw a brief note yesterday after close that a BP group with PBR owning 60% made key discovery-cannot find this morning but did see a note that Iraq wants PBR to build refinery.
    The note on discovery may explain intense call activity.

  12. 12
    BirdsofpreyRcool Says:

    BG, Petrobras to Dig Deeper in Brazilian Well After Finding Oil
    2009-04-09 10:20:25.460 GMT

    By Eduard Gismatullin and Heloiza Canassa
    April 9 (Bloomberg) — Petroleo Brasileiro SA, Brazil’s state-controlled oil company, and Britain’s BG Group Plc will dig deeper into a well off the South American coast after finding oil.
    The partners discovered oil in the Corcovado-1 field in the Santos Basin, located off the coast of the southeastern state of Sao Paulo, BG said in a statement posted today on its Web site.
    BG, the U.K.’s third-largest natural-gas producer, operates the exploration project and holds 40 percent of the BM-S-52 block where the oil was found.
    The companies “intend to continue drilling to deepen Corcovado-1, and further evaluation of the well will be undertaken once this is complete,” BG said. “A second exploration well on the block is also planned in 2009 to comply with the National Petroleum Agency commitments.”
    BG rose 3.5 percent to 1,067 pence at 10:30 a.m. in London, valuing the company at almost 36 billion pounds ($52.7 billion).
    While the shares are up 11 percent this year, they fell almost 7 percent in the last four days, underperforming the 40-member Dow Jones Stoxx Oil & Gas Index in Europe.
    “With BG shares having underperformed the European integrated oils by 5 percent over recent days, this news event, although hardly definitive on resources potential, should be taken positively by the market,” wrote David Thomas, a London- based analyst at Citigroup Global Markets Inc., today in an e-mailed report.

    Pilot Projects

    Reading, England-based BG will invest between $4 billion and $5 billion through 2012 to develop pilot projects in the Tupi, Iara and Guara fields in Brazil’s so called pre-salt basin, which has reservoirs beneath as much as 3,000 meters of water and 7,000 meters of seabed.
    BG’s net share of output from the fields will reach 400,000 barrels of oil equivalent a day by 2020, the company said in its annual report.
    The U.K. company plans to drill five exploration wells in Brazil this year. Two wells will be at the BM-S-9 on the Iguacu complex, “which is a multi-billion barrel prospect,” Chief Executive Office Frank Chapman said Feb. 5. Two wells also are planned in Corcovado, including Corcovado-1, in the BM-S-52 area, “another multi-billion barrel prospect,” and a well on Sagittario in BM-S-50, he said.

  13. 13
    zman Says:

    Thanks for all the data BOP, had to step out for the open which I can’t complain much about.

    Thanks John for #9, obviously I fall in with that camp of thought on SD.

  14. 14
    BirdsofpreyRcool Says:

    SD — good to have both sides to the story, of course.

    One caveat: if SD does any sort of deal, Simmons & Co is likely to be on the cover. CRT is likely not.

    Always something to keep in mind.

  15. 15
    BirdsofpreyRcool Says:

    LOL… not that BANKING and STOCK RECS have ANY influence over each other… right? 😉

  16. 16
    zman Says:

    All the charts now have gaps in them. Great.

    SD just broke above its highs from last week. Hear ya on the deal, the only thing I think they do down here is an asset sale.

    DJIA retaking 8,000

  17. 17
    zman Says:

    Ha, I remember a time in the energy division of a brokerage in New Orleans when the Chinese wall separating banking and research was the hallway in the middle of the same floor. They eventually moved bankers up a floor but I don’t think they lost the research guys’ phone numbers.

  18. 18
    BirdsofpreyRcool Says:

    Just to be clear, I like SD and think they do what it takes to survive the downturn. But their debt level + uncertainty around doing some sort of deal just makes it a volatile, event-driven, rumor-prone stock. Which means, if you do the work and understand the risks, you can evaluate the rumors and play the stock price movement. Something you’re pretty good at, z.

  19. 19
    john11 Says:

    Z..awesome calls on near term CRK and EOG plays, many thanks.

  20. 20
    BirdsofpreyRcool Says:

    Yeah…. Old chinese proverb — “Chinese Wall have many many ears.”

  21. 21
    zman Says:

    J – Glad they worked for ya. Fair warning, EOG on the bubble for sale today with a reposition into May calls soon.

  22. 22
    elduque Says:

    CHK – breaking well above 20. Seems to me the new trading range will be 20-26.

  23. 23
    BirdsofpreyRcool Says:

    IG 182 -7bps big gap, tighter. huge positive move.

  24. 24
    zman Says:

    CHK feels like something is up, two days of outperforming the group with lackluster moves in NG. Hmmm. If Simmons likes SD, they probably should be liking CHK for the same metrics on valuation and the same logic on the oversold due to leverage angle.

  25. 25
    BirdsofpreyRcool Says:

    HY 74.75 up almost a point. Again, another huge, positive move.

  26. 26
    elduque Says:

    I am thinking of buying some UNG before the number. What do you think?

  27. 27
    BirdsofpreyRcool Says:

    If HY continues to rally, that will lift the debt value on both SD and CHK’s balance sheet… pushing equity higher too (as debt becomes “less risky”). So, well worth watching the movements of HY if you’re playing SD and CHK and the other leveraged kids.

  28. 28
    zman Says:

    Eld – Its the should season. I think there will be time to play post number unless its a draw. Numbers very squishy this time of year in a normal year so not a high degree of confidence either way. The imports give one some reason for bullishness in the near term but the HDD mix was poor. Could see my number, but could also see 20 Bcf injection.

  29. 29
    zman Says:

    Thanks BOP, very good point. We are reaching the point where you may want to start embracing those balance sheets that only a mother could love. As long as the sheet’s not too ugly that is.

  30. 30
    elduque Says:

    Thanks BOP. Is JNK still a viable way to monitor the HY market?

  31. 31
    BirdsofpreyRcool Says:

    elduque — yes. But follow the NAV of the JNK etf (and not the price itself), as the fund price swings from premium to discount. It’s almost a better monitor of the SENTIMENT of people who don’t normally trade high yield bonds, than it is a solid indicator.

    But, it’s what we have. Unless you can monitor individual bonds.

  32. 32
    zman Says:

    ZTRADE:

    Out half EOG $60 April Calls (EOGDL) for $2.20, up 187% since yesterday, lightening up prior to the gas numbers and happy to play through them with House money.

  33. 33
    choices Says:

    copper has been strong last couple of weeks, up again today.

    dollar off a tad, gold has been weak

  34. 34
    zman Says:

    20 Bcf injection.

  35. 35
    zman Says:

    ZTRADE:

    Out CRK April $35 Calls for $2, up 207%.

  36. 36
    zman Says:

    Natural gas is bleeding off now on that bigger than expected injection but really not down very badly, not quite as much as it was up yesterday. Interesting.

  37. 37
    john11 Says:

    LNG active and strong..anything out there?

  38. 38
    gaamblor Says:

    interesting spike up 1 min before the release, that had to hurt the chasers

    UNG trying to make a lower low but not yet.

  39. 39
    zman Says:

    Re LNG. I’d guess its just the market strength and energy strength. I’ve got a lot of names up 3 to 9% today. The lower the dollar value the easier they are finding it to prop the names for big %s on days like today.

    CNBC didn’t bother to cover the release of the gas number.

  40. 40
    zman Says:

    Gaam – yep, they bet the wrong way to play the release. Weather this week is cooler which seems to be containing the downside in natural gas, now off only 3 cents.

  41. 41
    Dman Says:

    Z – both crude and copper are well above their lows. If demand for base metals picks up, this can only happen with an increase in energy demand also. Both crude and metals are capacity constrained if the economy is humming and both will be constrained if the economy is just waffling for long enough. i.e. only a continuous collapse in the economy can avoid the capacity crunch.

    So I’d really like to see Gartman’s reasoning on how metals could go up without energy. Maybe he’s making a nuanced case … some of the base metals (eg Nickel) have not recovered as much as copper. I bought some JJN recently for that simple reason. But lets face it, analysts have been wrong forever about the extremes of crude’s movement & now they again are saying that the beast will behave tamely.

    Sure it would be nice if it stayed in a nice trading range & we could trade it predictably … but I think it is a wild & crazy beast & will behave accordingly.

  42. 42
    BirdsofpreyRcool Says:

    Energy news… of a different sort.

    Ahmadinejad Opens Iran’s First Nuclear Fuel Plant (Update1)
    2009-04-09 14:49:17.646 GMT

    By Ladane Nasseri
    April 9 (Bloomberg) — President Mahmoud Ahmadinejad inaugurated Iran’s first nuclear fuel plant, the state-run Islamic Republic News Agency said, a day after he insisted that the Persian Gulf country doesn’t aim to develop atomic weapons.
    Ahmadinejad cut the ribbon at the facility in the central province of Isfahan during a ceremony marking National Nuclear Technology Day.
    Iran’s inauguration of the Isfahan plant indicates that the country is pushing ahead with construction of a nuclear research reactor in Arak, which the United Nations Security Council has demanded stopped. Uranium pellets like the ones produced in Isfahan will be fed into the Arak reactor after its completion, producing plutonium as a by-product. Plutonium can be used to make atomic bombs.
    The Obama administration said yesterday it plans to join China, Russia and European allies in talks with Iran on the country’s nuclear program, marking a shift in U.S. policy.
    Former President George W. Bush made U.S. participation in such talks conditional on Iran suspending its nuclear work.
    Ahmadinejad said yesterday he would welcome a genuine overture from President Barack Obama, while underlining Iran’s stance that its nuclear work is solely civilian. The U.S. and several major allies have said the Iranian program is cover for weapons development.
    The UN’s International Atomic Energy Agency said Feb. 19 that Iran had already begun producing uranium pellets and fuel rods. IAEA inspectors haven’t had access to the Arak facility, about 150 miles (240 kilometers) southwest of Tehran, since August, after Iran denied investigators access to plant.
    Iran has 7,000 centrifuges operating at its uranium enrichment plant at Natanz in central Iran, Gholam Reza Aghazadeh, head of the country’s Atomic Energy Organization, said today on state television. Centrifuges are fast-spinning machines that enrich nuclear fuel by separating uranium isotopes. Iran aims to have 50,000 centrifuges in the next five years.

  43. 43
    zman Says:

    Dman – I’d like to see it too. He’s a smart guy, no doubt. But he made some glib comment about “if crude goes higher than $55 it can do so without me, be traded by guys smarter than me”. That’s glib. They had the head of American Barrick on early this morning and he was talking about limited ability to find more gold. Said their costs had risen to something link $400 an ounce this year from $180 to $200 early in the decade. Said that was energy, labor, tougher to get at deposits. Sounds kind of familiar. Other than the fact that almost all of the gold mined is still around. Unlike oil, where you burn it and it is no more.

  44. 44
    Dman Says:

    Unloved balance sheets: BRY ?

  45. 45
    Sambone Says:

    By Steve Gelsi

    ConocoPhillips (COP) Chief Executive Jim Mulva didn’t mince words with Wall
    Street analysts when, in the face of a slowing economy and lower oil prices, he
    outlined the oil major’s nearly $2 billion cut in capital spending for 2009 and
    other belt-tightening measures.
    “We believe our decisions, actions and plans will enable us to live within our
    means,” Mulva said following the company’s fourth-quarter results in February.
    ConocoPhillips is far from alone in its effort to scale back spending to deal
    with the harsh economic realities, as energy-infrastructure projects around the
    world are put on hold in the wake of oil’s slide to $50 a barrel from more than
    $100 last year.
    U.S. petroleum inventories sit at about 360 million barrels, their highest
    level since 1993, and natural-gas supplies remain at 1.65 trillion cubic feet,
    some 32% more than a year ago and 22% above the five-year average.
    Against this backdrop, experts and energy company officials are now debating
    whether the cutbacks in production and infrastructure spending could lead to
    energy shortages and to another price spike down the road.
    Oil’s 40% rise from multiyear lows of $35 a barrel in December to about $50
    now – with just a whiff of economic recovery on the horizon – illustrates how
    quickly prices could resume their climb toward last year’s record of $147.
    “Every bull market in oil is really born in the zenith of a bear market,” said
    Phil Flynn, vice president at Alaron Trading in Chicago. “The cutbacks we see
    today are going to lead to a spike somewhere in the future. The big question is
    when it’s going to happen.”
    Energy traders are keeping an eye on production cuts by the Organization of
    Petroleum Exporting Countries, as well as scaled-back capital projects by the
    Western oil majors and state-run oil giants such as Saudi Aramco or Russia’s
    Rosneft.
    “If the economy comes back and they don’t ramp up quickly, prices could spike
    up,” Flynn added.
    Still, he said he’s not expecting oil to touch $100 a barrel again this year
    or the next.
    Gene Shiels, assistant director for investor relations at oil-field service
    giant Baker Hughes Inc. (BHI), said since late last summer, energy companies
    have scaled back the number of drilling rigs actively looking for oil and gas
    in the U.S. by about 50%.
    The reduced activity reflects not only from depressed prices and demand, but
    also the lending structure between banks and independent oil and gas producers.
    The borrowing base for energy companies is typically determined by the value
    of their reserves – which has fallen drastically – coupled with estimated
    production volume, and assumed prices of commodities going forward.
    Many energy producers now face the prospect of red ink after a flurry of
    spending during last year’s oil boom.
    Outside the U.S., large deepwater-drilling projects have been slower to scale
    back, because they require years to complete and are funded by consortiums of
    big oil companies and overseas governments. But even some of these major
    undertakings may soon feel the pinch, according to Shiels.
    “If oil stays at $40 or even $50 a barrel, a lot of heavy oil projects in
    Canada or deepwater projects may not continue,” he said. “We could we setting
    the stage for an oil spike if capital spending is cut for a long time.”
    Roger D. Read, managing director of Natixis Bleichroeder Inc., said current
    petroleum supplies would take many months to burn through once demand picks up,
    lending less urgency for national oil companies and other major players to
    maintain their projects.
    Saudi Arabia late last year planned to add 900,000 barrels a day of heavy
    crude production from the massive offshore Manifa field, which had been
    mothballed in 1985.
    “It’s very expensive,” Read commented. “They have to build artificial islands
    and causeways to get the oil out. They decided to have contractors and service
    companies rebid for the work after the drop in commodity prices and the lower
    cost of labor after last fall, effectively delaying the start-up of the project
    past its original date of mid-2011.”
    Saudi Arabia remains the world’s biggest oil producer and dominant player in
    the Organization of Petroleum Exporting Countries, which has warned of a
    possible price shock when oil demand picks up in coming years. OPEC has said as
    many as 35 of its new projects may be delayed by 2013.
    Meanwhile, OPEC has been able to orchestrate one of the most effective
    production cuts in its history as its members cooperate to get world oil
    supplies back in line with lower demand.
    Not all big oil companies are cutting back projects, according to Read. Exxon
    Mobil Corp. (XOM), for example, plans to increase capital spending by about $3
    billion this year.
    But even those ambitious plans could run into trouble if Exxon’s partners on
    various megaprojects decide to lay out less cash this year.
    Read said oil prices staged a relatively steady climb from $10 a barrel in the
    late 1990s to around $80 in 2007, before accelerating in the last eight months
    of last year when “it went absolutely nuts.”
    The current rebound in oil prices may take a more gradual path, he contends,
    as it did through most of the last cycle. “The ending moves tend to be rather
    dramatic.”
    Last year’s record run of oil prices also came about because of factors
    outside supply and demand for oil, such as currency fluctuations and money
    fleeing the troubled financial sector, just as developing economies in China
    and India started to signal greater need for energy. Such a perfect storm may
    not happen again any time soon, Read added.

    Gauging Demand

    At the same time, a fresh report by the McKinsey Global Institute Demand
    suggests that energy demand may snap back more quickly than many observers
    project, driven by strong demand growth from developing countries.
    If the world economy returns to moderate growth, energy demand will increase
    about 2.3% a year between 2010 and 2020, nearly a full point faster than the
    period from 2006 to 2010, according to the McKinsey report. Developing regions
    will account for more than 90% of the growth, led by the Middle East.
    While few experts call for a sharp price jump or oil shortage in 2009 or 2010,
    some warn that the collapse in prices could cause a big supply cut over the
    next few years.
    Experts at Cambridge Energy Research Associates, or CERA, a unit of IHS Inc.
    (IHS), asserts that current scale-backs could hamstring the pace of future
    growth in crude stocks.
    The group’s new “Long Aftershock” study concludes that about 7.6 million
    barrels of oil per day, out of total potential future net growth of 14.5
    millions of barrels a day from 2009 to 2014, are at risk. If all “at risk”
    supply fails to materialize, the world’s oil production capacity five years
    from now could reach 101.4 million barrels a day, down from the precollapse
    CERA projection of 109 million.
    Peter Jackson of CERA said world oil demand will likely fall in 2009 by about
    1 million barrels a day – faster than last year’s decline. Demand could start
    picking up again in 2010. If project cutbacks continue, the flow of new oil may
    prove to be inadequate by 2014.
    “If the recovery is gentle, there shouldn’t be a problem, but if it’s faster
    than expected and companies have cut back multiyear projects, we could see a
    return to the conditions that we saw last year,” Jackson commented.
    Energy producers face the double challenge of a current supply glut, coupled
    with relatively high costs of building energy projects. While oil prices are
    half of what they are a year ago, the price tag for building deep-sea oil rigs
    and other infrastructure remains about double what it was a decade ago, and
    hasn’t fallen that much since energy prices burst last year.
    “All oil companies are different – the largest ones are very well funded with
    lots of resources and significant portfolios to carry them through,” Jackson
    said. “Some [smaller] companies are saying we’re spending twice as much money
    to do the same amount or work, we’re not going to keep doing this.”
    For its part, ConocoPhillips’ Mulva said the oil giant remains committed to a
    multiyear liquid natural-gas project in Qatar, as well as the Shah natural-gas
    field in Abu Dhabi. Others will continue, but the company will defer upgrades
    of some refineries, as well pare down some of its drilling in the lower 48
    states and Canada. The chief added: “We have to look at what we think the
    prices and the returns are.”
    -Steve Gelsi

    Dow Jones Newswires
    04-09-09 1008ET

  46. 46
    zman Says:

    Yes, it would be on that list.

    Big cap unloved would include CHK and APC

    Small mids can best be found on the E&P tab, simple rule would be the ones above 50% debt to cap AND with sub 3x EBITDA to interest coverage.

  47. 47
    BirdsofpreyRcool Says:

    Today’s column, from a cross-asset class strategist. Good information and good education on securities other than just equities. Pls let me know if this is helpful info for people.

    http://www.capmarkets.com/ViewFile.asp?ID1=115115&ID2=312538865&ssid=1&directory=6571&bm=0&filename=04.09.09_Investors_to_Benefit_from_CDS_Curve_Steepening.pdf

  48. 48
    BirdsofpreyRcool Says:

    File under — “Oh, Those French!!”

    Lance Armstrong May Have Violated Doping Rules, Agency Says
    2009-04-09 14:07:14.953 GMT

    By Stephen Taylor
    April 9 (Bloomberg) — Lance Armstrong, the record seven- time winner of the Tour de France cycling race, may have violated drug-testing rules and might face disciplinary action, France’s antidoping agency said.
    The 37-year-old Texan, who came out of retirement in January to raise awareness about cancer and plans to race in this year’s Tour, was tested by a doctor from the organization in the south of France, where the cyclist was training, on March 17, the Agence Francaise de Lutte Contre le Dopage, or AFLD, said today in a statement on its Web site.
    Armstrong “didn’t respect the obligation to remain under observation of the person in charge of the doping control,”
    the agency said. The group’s report was sent to the International Cycling Union, which in turn gave the French organization authority to open a disciplinary enquiry, it said.
    Armstrong, who rides for the Astana team, said in an April 7 statement on the livestrong.com Web site that reports that he “misbehaved” during the control were “outrageous.”
    “I find it amazing that I have been tested 24 times without incident, and the first test I do in France results in more outrageous allegations and negative leaks to the press,”
    he said in the statement.
    “This is just another example of the improper behavior by the French laboratory and the French antidoping organizations,” Armstrong said. “I am sorry that they are disappointed that all the tests were negative, but I do not use any prohibited drugs or substances.”
    AFLD didn’t say whether Armstrong failed any of the tests or if it had decided to open a disciplinary investigation.
    Philippe Maertens, a spokesman for the Astana team, said in an interview that the AFLD statement is “nothing new.”
    “Lance didn’t do anything wrong, nothing has changed,”
    he said by telephone. “If any action is taken, then we’ll see, but there is no problem. We’re not worried about anything.”

  49. 49
    Dman Says:

    Z – #43 OK, so it sounds like he was talking about gold, but yeah that is glib & it certainly isn’t an argument with any content.

    But if he means gold, then his case is even stranger. Commodities obsessives follow the crude to gold ratio & it is about half what it was in early 2007 (but it has kicked up lately, since gold has been waffly while crude was strong).

  50. 50
    Dman Says:

    Z – glib commentary on CNBC? Shocker.

  51. 51
    elduque Says:

    BOP- I find all aspects of the market helpful. We are not trading in a vacuum, although it has certainly felt like that a times during the last 6 months.

  52. 52
    BirdsofpreyRcool Says:

    CHK bond update — The 9.5% 5-yr notes that CHK issued in February at 97.75 are currently offered at 100.5 for a yield of 9.38%. These notes traded as low as 90, at the end of Feb thru early March. As I recall, some people bought a few of those bonds. Nice yield vehicle.

  53. 53
    BirdsofpreyRcool Says:

    thanks, for the feedback, elduque.

  54. 54
    john11 Says:

    re 52, yes got some here BOP, your contributions are very much appreciated and always value-add, thank you.

  55. 55
    BirdsofpreyRcool Says:

    john11 — those were very attractive bonds at the time. Glad you got some. Very liquid, too… so good ones to watch, as an indication of the HY mrkt + sentiment about the energy sector. Good proxy bonds.

  56. 56
    BirdsofpreyRcool Says:

    Reminder — It ain’t over yet (not that we thought it was). Need to see the manufacturing sector stabilize.

    3M Offers 3,600 US Employees Early Retirement
    2009-04-09 15:18:07.67 GMT

    MAPLEWOOD, Minn. (AP) — 3M Co. is offering early retirement packages to 3,600 employees, or 11 percent of its U.S. work force, to reduce costs even further amid the economic slowdown.
    The voluntary buyout offers follow the manufacturer’s recent moves to cut 3,600 jobs, defer merit pay raises and adjust vacation allowances.
    Company spokeswoman Jacqueline Berry said eligible nonunion employees — either at least 59 years old with five or more years of service, or at least 55 years old with 30 years or more of service — will be notified of the early retirement package on Thursday. They will have until May 31 to make a decision.
    3M has not said how many employees it hopes will take the voluntary package, or how much it could save if employees opt to retire earlier than planned.
    Those who take the package will receive an additional year of service credit and have a year added to their age in calculating their pension benefits.
    Earlier this month, 3M cut its worldwide work force by 1,200 jobs. The company, whose operations span office supplies, transportation and health care, also cut 2,400 jobs mainly in the U.S., Western Europe and Japan in the fourth quarter to save
    $235 million this year.
    It has also deferred merit pay increases for another $100 million in annual savings, and modified its policy on banking vacation days to get an additional $100 million in savings over the next two years. The company plans to cut capital spending by about 30 percent this year and conserve cash aggressively.
    3M, the maker of Scotch tape, Post-It Notes and other products, has operations in more than 60 countries that employ 79,000 people, and generated about two-thirds of its revenue outside the U.S. last year.
    Shares of 3M rose $2.29, or 4.5 percent, to $53.67 in morning trading.

  57. 57
    Dman Says:

    BOP – always good to get perspectives from outside the equity universe

  58. 58
    zman Says:

    ETSWD, please check your email.

  59. 59
    BirdsofpreyRcool Says:

    U.S. Economy: Trade Gap Narrows to 9-Year Low as Imports Plunge
    2009-04-09 15:20:54.41 GMT

    By Timothy R. Homan
    April 9 (Bloomberg) — The U.S. trade deficit tumbled in February to the lowest level in nine years as collapsing demand from consumers and companies reverberated around the globe.
    The gap shrank to $26 billion, less than anticipated, from a revised $36.2 billion in January, the Commerce Department said today in Washington. Imports plunged for a seventh consecutive month, leading to declines in the deficits with Japan and China, while exports climbed from a two-year low.
    The report showed some U.S. trading partners may not bypass the recession unscathed as American demand for Asian cars, toys and electronics plunged. The improvement in exports, the first since July, is likely to be short-lived as economies shrink worldwide.
    “It’s an indication of the extent to which we’ve been passing on some of our demand decline to the rest of the world,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “That is why we’ve seen such disastrous declines in growth numbers in Asia. They have been relying on U.S. spending, and U.S. spending just isn’t there any more.”
    Separate figures from the Labor Department today showed the cost of goods imported into the U.S. in March rose less than forecast as companies in China and Japan cut prices to stem the slump in overseas sales. Other figures from Labor showed the number of Americans filing first-time claims for unemployment insurance exceeded 600,000 for a 10th consecutive week.

    Stocks Jump

    Stocks rallied, propelled by better-than-estimated earnings at Wells Fargo & Co. The Standard & Poor’s 500 index was up 2.6 percent at 846.85 at 11:03 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 2.92 percent from 2.86 percent late yesterday.
    The trade gap was smaller than the lowest estimate of economists surveyed by Bloomberg News. The median of 70 projections called for an unchanged reading at $36 billion.
    Forecasts ranged from deficits of $30 billion to $38.9 billion.
    February’s gap was the smallest since November 1999.
    Imports fell 5.1 percent to $152.7 billion, the lowest since September 2004. Demand for foreign-made cars slumped to the lowest level since October 1996, as purchases of Japanese autos were cut almost in half. The trade gap with Japan was the smallest since 1984.
    American demand for imported consumer goods other than automobiles fell by $1.4 billion in February as purchases of toys, furniture, clothing, appliances and televisions all declined.

    Gap With China

    The trade gap with China decreased to $14.2 billion, the smallest in three years.
    The cost of goods imported into the U.S. climbed 0.5 percent in March, reflecting an 11 percent jump in petroleum, the report from Labor showed. Excluding oil, prices fell 0.7 percent for a third consecutive month as goods from China cost
    0.6 percent less and those from Japan fell 0.1 percent.
    “What’s bad news for Asia is good news for the American economy,” said David Sloan, a senior economist at 4Cast Inc. in New York. “We are seeing Asian exports fall off a cliff.”
    U.S. exports climbed 1.6 percent to $126.8 billion as sales of pharmaceutical supplies, autos and telecommunications equipment improved, today’s trade report showed.
    Federal Reserve officials last month said, “it was widely agreed that exports were not likely to be a source of support for U.S. economic activity in the near term,” according to minutes of the March 17-18 meeting released yesterday. “Several participants said that the degree and pervasiveness of the decline in foreign economic activity was one of the most notable developments since the January meeting,” the minutes showed.

    Trade Slump

    Forecasts are calling for a decline in global trade, sapping overseas demand for American-made goods. The World Bank last month projected trade will fall 6.1 percent worldwide.
    Earlier in March the World Trade Organization predicted a 9 percent drop.
    After eliminating the influence of prices, which are the numbers used to calculate gross domestic product, the trade deficit dropped to $35.6 billion, the lowest level since May 2001.
    The narrowing prompted economists at Morgan Stanley to project the world’s largest economy contracted in the first quarter at a 5 percent annual pace, less than the 5.9 percent drop they projected before the report. The economy shrank at a
    6.3 percent rate in the last three months of 2008, the most since 1982.
    Weak sales are contributing to job cuts as firms rein in labor costs to weather the recession, now in its second year. 3M Co., the maker of more than 55,000 products from Post-it Notes to electronic road signs, said it cut 1,200 workers, or about
    1.5 percent of its workforce, from its payrolls in the first quarter.
    Employers cut 663,000 workers from payrolls in March, and the jobless rate surged to 8.5 percent, the highest level in more than a quarter century, the Labor Department reported last week.

  60. 60
    Dman Says:

    Z – more on the gold issue. If gold does resume its historical role as universal hard currency , instigated by the current debasement of fiat currencies, then the sky is the limit for gold priced in $.

    But only a year ago, a huge amount of investment dollars went into crude for much the same reason. I don’t see why gold has to be the only hard store of value, although admittedly it is nice and compact. But I’d feel safer owning barrels of crude in a tank farm than owning a bar of gold in the basement. The very fact that crude is low density makes it much harder to steal (!) and the fact that it is an essential product offsets the inconvenience of needing gigantic tanks.

    I think gold will begin to act more like money (in German, the word for money is “geld”) but I expect all scarce commodities to do likewise.

  61. 61
    zman Says:

    Dman – you’re a funny guy!

  62. 62
    Dman Says:

    BOP – Marc Faber advises that there’s no point reading reports if you don’t make notes or at least file them for future reference. Not wanting to argue with Marc, I’ve opened a folder called “BOP” and saved that report. Keep ’em coming …

  63. 63
    Dman Says:

    Z – the other day on Bloomberg, Marc Faber advised people to buy a little gold every month but “don’t worry too much about the price: the weight stays the same”.

    Now that’s a funny guy!

  64. 64
    BirdsofpreyRcool Says:

    Dman — OK. Will do. BTW, that MSH stategist called the bottom in corporate bond spreads in early March. He was 2 weeks early on stocks, but he took a brave, educated stance at the time. Makes him worth following, until proven wrong.

  65. 65
    zman Says:

    Dman – Gartman went on and on about copper, then aluminum.

  66. 66
    BirdsofpreyRcool Says:

    When the camel gets all the way into the tent, the camel gets to call the shots and change the rules of the game. Note to self — beware the camel’s nose in the tent… swat it!

    TARP Recipients Will Be Required to Modify Loans, Donovan Says
    2009-04-09 15:04:42.237 GMT

    By Dawn Kopecki
    April 9 (Bloomberg) — U.S. banks that receive federal aid from the Troubled Asset Relief Program will be required to modify troubled loans under the Obama Administration’s Making Home Affordable program, Housing and Urban Development Secretary Shaun Donovan said.
    “We’re also going to require as a condition of participation in TARP going forward that banks do participate in this plan,” Donovan said in an interview on Bloomberg television today.

  67. 67
    choices Says:

    Thanks, BOP-your input is valued and helpful-the credit angle for equities is something which I sorely need and virtually ignored up until the current calamity.

  68. 68
    zman Says:

    CLB tempting to play via puts on this breakout. Its gotten pricey for the group, announces April 23. Mulling.

  69. 69
    BirdsofpreyRcool Says:

    choices — in good mrkts, it’s almost enough to follow just your target asset class. But, in bad markets, you have to pay attention to Ground Zero. Credit was the nuclear bomb that blew up the mrkts… so, we will watch credit (and the bond market) until we can ignore it again. But, cross-asset-class knowledge and experience will make anyone a better investor. There are very few people that knowledgably have a foot in both the debt and equity markets. So worth developing an edge there.

  70. 70
    Dman Says:

    OK, JJU (aluminum) is only 15% above lows, so there’s a pure price angle there. But more aluminum demand means more energy!

  71. 71
    Dman Says:

    BOP – so I guess the tent is the government and the Goldman camel is sitting at the head of the banquet table, accepting obsequious bows from assorted government minions … along with tens (or is it hundeds?) of billons of taxpayer $$ from said minions (most of whom were actually employees of said camel in former lives).

  72. 72
    BirdsofpreyRcool Says:

    Dman — the leveraged pure play on aluminum is CENX. Moody’s just downgraded them to toxic waste level. S&P still has them as investible. (Ca / B)

    Glencore owns about 40% of the equity in CENX now. I don’t like ’em personally, but those Swiss boys do know what they are doing in the physical commodity mrkt.

  73. 73
    BirdsofpreyRcool Says:

    Dman — the tent is anything the impacts me. The camel is anything with bad breath and a tendency to change the rules.

  74. 74
    BirdsofpreyRcool Says:

    “anything that impacts me.” sloppy typing.

  75. 75
    BirdsofpreyRcool Says:

    #71 — that’s FUNNY! Good one.

  76. 76
    zman Says:

    As we look to the rest of earnings season its time for the Thursday movie quote watch:

    “Difficult to see. Always in motion is the future.”

  77. 77
    BirdsofpreyRcool Says:

    z — just a wild guess… but that sytax sounds like that little wrinkly guy from the star wars series. what was his name again? Oh, yah… Yoda.

  78. 78
    zman Says:

    gotta get the episode number or there is no prize.

  79. 79
    BirdsofpreyRcool Says:

    sheesh. it’s the FIRST TIME i EVER got one of those things… without looking. But that’s about as far as I can take it. Someone else will have to walk home with the prize, it seems.

  80. 80
    choices Says:

    BOP-re #72-as you know, Glencore is Marc Rich and you are correct, they DO play hardball in commod mkts.

  81. 81
    Dman Says:

    BOP – wow, CENX up 336% from March 9. That’s some leverage.

    I picked Yoda too, but no idea which film.

  82. 82
    zman Says:

    ZTRADE:

    Out CLR April $25 Calls (CLRDE) for $0.85, up 111%.

  83. 83
    choices Says:

    A couple of days ago, Gartman was pumping Alcoa, which just posted a $480 mil loss for 1st qtr-now trading at $8.65, up over 7% for the day, off of mid-March lows of $5.50.

  84. 84
    BirdsofpreyRcool Says:

    choices — Yeah. Marc Rich. I know. Only part of the reason I don’t like ’em. The other part involves a coupla Western Australian nickel/cobalt bankruptcies… but, water under the bridge now. They are smart guys and worth watching in the commodity area, as you noted.

  85. 85
    zman Says:

    Choices – he did well with that trade then as he said he had gotten long non-hydrocarbon based commodities in early March (about a month ago to use his words).

  86. 86
    jat Says:

    I feel like that is Empire Strikes Back.

  87. 87
    jat Says:

    So that would be episode 5

  88. 88
    zman Says:

    Jat wins the prize.

  89. 89
    BirdsofpreyRcool Says:

    jat PEEKED.

    Or else jat knows Dr. Spock’s first name too.

    😉

  90. 90
    BirdsofpreyRcool Says:

    make that MR. Spock. oops.

  91. 91
    Dman Says:

    BOP – some people can use the Force to remember which episode things are in. Mustn’t assume they peeked.

    Z – any indication of LNG volumes in the Gazprom deal.

    BOP – got any other crazy-leveraged plays in your back pocket?

  92. 92
    BirdsofpreyRcool Says:

    Dman — lots o’ leveraged plays. That’s what I do for a living. Buy equities of high yield issuers. Only works in an up mrkt, tho. Tears your lungs out in a down market.

  93. 93
    zman Says:

    Re LNG – no, have not seen a number yet. That is a massive project so it would not be all the volumes. They have 3 LNG tankers dedicated to it plus spot ships. Its billed as 5% of the world’s LNG supply. Depending on what their number is for global liquefaction capacity that probably means 1.5 Bcfgpd, again not all coming to the U.S. Am still working on my LNG piece.

  94. 94
    zman Says:

    Make that 1.3 Bcfpgd, for Sakhalin, just found it in my notes. Part of that is contracted to Japan.

  95. 95
    zman Says:

    SD – sneaking up, nice scoopy looking chart there.

  96. 96
    Nicky Says:

    Afternoon all.

    Quick question – does anyone know anything about a broker called Trade King- my neighbor is asking if they are any good and I have never heard of them.

    I thought Gartman was strangely quiet on energy – felt to me like he may have lost money on it. He sort of said I will leave it to those who know what they are doing!

  97. 97
    zman Says:

    SWN off = rights extension, not NG action.

  98. 98
    Nicky Says:

    850 finally hit on spx this morning in real time. If we can get through then next resistance is 854 followed by 860. Its not out of the question that we could get to the 880 area on this run but I am feeling like we are breathing fumes up here!

  99. 99
    jat Says:

    Not to get off topic, but I’m definitely a huge nerd / bigger SW fan than ST (I could even tell you what scene in Episode 5 it was… Luke is floating rocks on Dhagoba, envisions Han/Luke, drops all the rocks and R2), etc. Just to prove the cred further, the animal Luke rides in the opening scene is a Tan Tan and Boba Fett has Mandalorian armour. While I don’t know Spock’s first name (his dad’s is Sarek) I am looking forward to the new JJ Abrams Star Trek, looks 10x better than anything George Lucas has done in the last 20 years.

  100. 100
    BirdsofpreyRcool Says:

    jat — that is all SO COOL. Thanks for sharing. And I looked up Mr. Spock’s first name. Turns out, he has one. But it’s unpronounceable… to us humans, anway.

  101. 101
    jat Says:

    Re NOV, does any one have confirmation that PBR is discussing launching those 28 additional rig tenders soon? Think that’s what’s ripping the stock.

  102. 102
    zman Says:

    Jat – I used to live in Austin. Of the many things I miss, Alamo Drafthouse (where you can get dinner and a beer while watching a movie), is at the top of the list. Monday they were screening Wrath of Khan, broke the film, owner comes out, says wait on minute while I get to the bottom of this, runs off stage. Leonard Nimoy walks in, says how bout we watch the new movie, one month early, I brought a copy. All staged by Paramount but crowd went nuts as you can imagine.

    Wow, its good to get your inner geek out from time to time.

  103. 103
    zman Says:

    Jat – Re PBR, all I saw was an article in Upstream. Its got the deeps flying today as well.

  104. 104
    BirdsofpreyRcool Says:

    z — i know this is a bit non-professional today. But, the mrkt’s up, the weekend’s long, and the banks are not going to blow up today**. So trashing your board with non-energy stuff. Sorry.

    (**Next week could bring a different picture, tho.)

  105. 105
    zman Says:

    BOP – In this market, if you don’t have your sense of humor what do you have. I applaud the levity.

    Been low balling some more puts on HAL fyi. I think Goldman is right. I think there is reason to be concerned there. I suspect that will manifest itself in the shares prior to the release on the 20th. If the market goes up gangbusters that’s negated but more number drops are in the offing daily and gas is inspiring less enthusiasm for budgets at the E&Ps than ever. The warnings may not come in the form of service companies as they are in process of talking numbers down but they may come instead from the 1Q earnings releases of the producers some of whom will take the opportunity to cut capex again.

  106. 106
    Garyinhou Says:

    Z.. how about this.. I lived in Austin during return of the jedi, went to opening show at midnight after having dropped ____. That was interesting…. Hey,.. I was 19 and a student.

  107. 107
    zman Says:

    Gary – now see that’s a whole new twist on the subject. Turning Jedi into 2001. hmmm.

    ZTRADE:

    Added (30) HAL April $15 puts for a dime, bidding some $16s now with the stock at $17.

  108. 108
    Dman Says:

    See BOP, it was the Force, like I said.

    I just sat through the Gartman segment. I thought it was pretty reasonable except for energy. He was positive on copper, aluminum, platinum & palladium, cautious on gold. Basically he’s saying to buy the ones that are still near the lows, so hence the caution on gold. I find it hard to argue that copper is still quite the bargain but he pointed out it is still down 70% (and I’m just sore that I sold my JJC 6% ago).

    But his entire argument was that there are “green shoots” sprouting in the economy. That was it (and the fact that commodity prices are acting as though it is true).

    Now if that is the reasoning, you *have* to be bullish on energy. But instead he said that the contango in crude indicated lots of supply overhead. I have no clue why you would view contango as bearish.

    As for grains, he said he wanted to warm up to them but mentioned some seasonal uncertainties. Again, not much meat in the sandwich there, but at least he wasn’t arguing against them.

  109. 109
    zman Says:

    Dman – well said in 108. I think a lot of guys, guys who’ve been around the block, are pissed at oil. They are scared of the administrations stance on it and they are rightly concerned about the supply surplus OPEC now has on hand. Those would have been reasonable complaints although I agree, you can’t grow commodity demand without growing oil. It seemed to me he just didn’t want to talk about. And the contango argument was what I was thinking of when I said short sighted somewhere above. Cheap front month curve indicates oversupply relative to demand. Backwardation indicates lower out months a pinch on supply now. So he’s looking at the contango, which is pretty normal state for a commodity to be in and sees the oversupply. But the contango has been much sharper back just a couple of months ago. As OPEC enforced quotas, the delta from front month to out month narrowed. If trucks start rolling and ships start sailing moving all those metals around we are going to quickly beat down inventories of distillates that are now bloated with refineries at current levels. As the refineries come back on line that adds crude demand and like I write so often, should add 750,000 to 1 mm bopd of demand to the U.S. picture alone.

  110. 110
    Dman Says:

    Z – on the contango: a few months back, when contango was very steep, Simmons & co put out a statement saying that extremes in contango usually mark a bottom in price. They were right, give or take a few weeks, and in price terms they were pretty close to nailing it.

    So whilst I realize that contango isn’t necessarily predictive, it hardly constitutes a bearish case. Particularly when Gartman was explicit (in the metals) that you have to buy in *before* demand turns up strongly. So applying this, you would expect to be buying when there *is* excess near-term supply.

    Just had a look at the copper curve: very flat with slight contango. If we could look at how the curve was back in December we might see if the “contango = bearish” theory holds up.

    I do think those pesky fundamentals need to get a look in too (although secretly, just between us, I think they are in fact driving the back months up).

  111. 111
    Sambone Says:

    By Chip Cummins
    Of THE WALL STREET JOURNAL

    DUBAI (Dow Jones)–Maersk Line Ltd., the owner of the American-flagged ship
    attacked by pirates Wednesday, said the ship is now underway, heading to its
    next port of call.
    The ship was commandeered by pirates Wednesday morning. The American crew
    regained control of the vessel, but the pirates held onto a single hostage, the
    ship’s captain. They disembarked from the ship with the hostage in one of the
    vessel’s life boats.
    Maersk said Thursday the captain remains in the custody of the pirates, and
    that the U.S. Navy warship Bainbridge is on-site and in contact with the
    lifeboat. The company said it believes the captain is unharmed.
    Maersk said its plans are to transit the Maersk Alabama safely to its next
    port of call, and fly its crew back to the U.S. For security reasons, it didn’t
    disclose where the ship was headed.

  112. 112
    BirdsofpreyRcool Says:

    Just checked in with Head Trader… he thinks we drift here for a while, then close at the HOD.

    Asked him about next week…

  113. 113
    BirdsofpreyRcool Says:

    Sambone — didn’t they used to hang pirates by the yardarm? (Whatever that is.) Seems like the world hasn’t taken the Somalian pirates seriously enough.

  114. 114
    Jay Reynolds Says:

    BOP, If head trader began with “HAL Plummets” then I’m going to put you on my Christmas list.

  115. 115
    jat Says:

    rig count doesn’t seem to be getting a lot of attention, we’re another 38 rigs down.

  116. 116
    BirdsofpreyRcool Says:

    I’m going to be out, for much of next week… so, wanted to share Head Trader’s thoughts with y’all —

    Head Trader thinks Monday will set the mood for the week. Two important earnings bookend the week too. GS reports pre-mrkt on Tues. GE on Friday. GE has already said their GECC is profitable, so GE’s earnings should actually be pretty good. And we know GS wants to pay back the TARP, so earnings can’t be hurting. 1Q was very very good to companies with debt-trading operations.

    So, if Monday is down, and GS reports good earnings, will only take mrkt back up to Friday’s closing levels. If Monday is good, and GS is good, we shoot for new highs (900, before seeing 800 again). If GS is bad, then all bets for a new high are off the table. But, we don’t think that will be the case.

    No comments from Tech Trader. Will post them if I get them.

  117. 117
    BirdsofpreyRcool Says:

    Jay — one less Christmas Card for me… sadly.

  118. 118
    zman Says:

    Rig Count

    Oil down 20 to 204 vs 355 a year ago. Where’s Pelosi when I need to yell at her about $35 being enough to inspire oil drilling.

    Natural gas down 18 to 790 vs 1,451 rigs one year ago.

    Horizontals up 1 rig.

  119. 119
    BirdsofpreyRcool Says:

    KOG — if that stock trades with a 2-handle again (as in 20-something cents), I will add to my position. Mngmt knows they have to do something… and they are out there doing it (whatever “it” might end up being). Mngmt owns a lot of stock too, so whatever “it” is, will be shareholder-friendly. I don’t think $1.25/share is out-of-the question here.

    Wouldn’t expect anything to be finalized until after the results from well pad #1 are released (around April 24th, guesstimating)… and, if they are smart, until after they complete the wells on pad #2… roughly 40 days later. So, end of May, will know what the acreage on the Rez is worth. Think KOG is a June or July bride.

    JMHO.

  120. 120
    ram Says:

    Industrial metals need Manufacturing to expand. Manufacturing is still contracting. Where will the demand for metals come from? So Wellsfargo makes $3B this quarter vs. $2B last year after they receive $25B from the Feds. Wow.

  121. 121
    zman Says:

    I’m getting more bearish on the broad market as well. The consumer is in hiding other than some aberrations like BBBY which I’m sure if you did the math is just the death of their biggest competitor. Same will hold true for BBY. This is a holiday hobbled market and doesn’t really count for much but we do seem to be out of steam. Next week we get a dose of reality as another wave of earnings hit.

  122. 122
    zman Says:

    SD continuing to break out. I doubt it makes me much on the April 10s but the Mays are going to have a good shot.

  123. 123
    ram Says:

    SAMB – I was stopped out of my SKF trade. Are you still hanging on?

  124. 124
    zman Says:

    ZTRADE:

    $10KP – Added 10 HAL $16 Puts (HALPX) for $0.23. Been bidding most of the day and they finally hit. This is the last of the HAL puts unless I get some new data or have another thought about why I should add more. Risky with only a week to expiry but same reasons/cautions as with last trade apply to these.

  125. 125
    BirdsofpreyRcool Says:

    early close for bond mrkt… equities are flying solo now.

  126. 126
    zman Says:

    From Jat on the Wednesday post:

    Z,

    Before we all head for the hills on this holiday weekend, any quick thoughts on the importance of the IEA report this Friday? My guess is not terribly much aside from a headline.. IEA will still be behind the curve on total oil demand destroyed (IEA still looking for global GDP growth in 2009, I think) and also will lower non-OPEC supply further? Don’t have any thoughts other than that, would appreciate your opinion.

  127. 127
    zman Says:

    re 126:

    I think its of passing importance. I think they take Non-OPEC supply down, probably less than they take down demand. EIA will likely due the same next week as well. My best guess is that it take oil down a buck or two that day and then we move on to the next shiny bauble to watch, undoubtedly the equity market will be more important.

  128. 128
    BirdsofpreyRcool Says:

    by the way, the bond market is open tomorrow… but it will be sloooooooooooooowwwwww.

  129. 129
    zman Says:

    Out for 20 minutes; back before close.

  130. 130
    BirdsofpreyRcool Says:

    UPDATE On those Pirates…

    Pirates Sending Backup to Kidnappers, Group Says (Update1)
    2009-04-09 18:54:23.292 GMT

    By Hamsa Omar
    April 9 (Bloomberg) — The band of pirates whose members hijacked a U.S.-flagged ship yesterday in the Indian Ocean is sending reinforcements to the kidnappers holding the captain hostage, said a member of the group who spoke from Somalia.
    The man, who called himself Da’ud and identified himself as one of the pirates, spoke by phone from the area of Eyl, Somalia. He said he had been in contact with the four pirates who boarded the Maersk Alabama and who then took the captain hostage on a lifeboat that has stalled off the coast.
    Any new pirates arriving at the scene will be confronted by the destroyer USS Bainbridge, which has moved into the area and is getting images fed to it from a drone flying over the lifeboat, an American official said. A second warship, the frigate USS Halyburton, is en route, a U.S. official said today.
    The U.S. crew regained control of the Alabama yesterday and CNN reported it is sailing for Mombasa, Kenya, its original destination. The captain, Richard Phillips, surrendered himself to the pirates to secure the safety of his crew, the Associated Press reported.
    “We sent reinforcement men to help them,” said Da’ud, who declined to identify himself further or give a contact for the pirates on the scene. The reinforcing pirates are going to the area in two groups, one of which is already at sea, he said.

    End Predicted Soon

    “The last information we received from them was that American small airplanes and helicopters are flying over them while the lifeboat’s fuel is running out,” Da’ud said. “The situation will end soon. Either the Americans take their man and sink the boat with my colleagues, or we will soon recover the captain and my colleagues in the coming hours.
    “But if they, Americans, attempt to use any military operation I am sure that nobody will survive,” he said.
    Sailors on the Alabama, which was carrying food aid and had a crew of 20 U.S. citizens, regained control of the ship after it was attacked yesterday about 500 miles (800 kilometers) south of the Gulf of Aden in the Indian Ocean.
    Maersk Lines is the Norfolk, Virginia-based U.S. unit of A.P. Moeller-Maersk A/S, whose headquarters is in Copenhagen.
    The freed ship is on its way to Mombasa with armed guards aboard and the crew will be swapped out and be able to return home, the father of crew member Shane Murphy told CNN.
    Secretary of State Hillary Clinton said the U.S. was “deeply concerned” about the incident and called on the world to “come together to end the scourge of piracy.”

    FBI Negotiators Called

    The lifeboat “has run out of gas,” Clinton said today.
    FBI negotiators have been called in by the U.S. Navy to assist with negotiations and are “fully engaged in this matter,” Federal Bureau of Investigation spokesman Bill Carter said today. He declined to comment further.
    A Boeing Co. drone has been monitoring the lifeboat since the USS Bainbridge entered the vessel’s vicinity, the U.S.
    official said.
    “There is no way the Bainbridge is going to allow that lifeboat to go anywhere,” said Rear Admiral Richard Gurnon, president of the Massachusetts Maritime Academy in the Cape Cod town of Bourne. “The pirates are going to quickly realize they have two options: Surrender Phillips, maybe you get in jail for two years, or harm Phillips and face instant death.”
    Phillips graduated from the academy, as did Shane Murphy.
    Yesterday’s seizure sparked the second foreign-affairs challenge for President Barack Obama in less than a week. On April 5 North Korea launched a ballistic missile in defiance of international demands that it cease such actions.

    New Hunting Grounds

    Pirates in the region have taken more ships this week than in the first three months of the year. They’re operating outside their usual hunting grounds in the Gulf of Aden to avoid naval patrols. The Alabama is the first U.S.-flagged vessel to be hijacked since a Maritime Protection Corridor was set up in the region in August, according to the U.S. Navy.
    The pirates began following the Alabama on April 6 and boarded it yesterday, sinking their own ship, AP reported.
    Da’ud said the pirates who boarded the Alabama were from a group of seven who had hijacked a German ship.
    After the four pirates took over the Alabama, they were holding the captain at gunpoint when one of the U.S. crew overpowered a pirate and snatched his machine gun, Da’ud said.
    The other three pirates then took the captain and fled in a lifeboat. They later contacted the Alabama to discuss an exchange, which the two sides agreed on, he said.
    During the handover, “my colleague, the hostage, jumped into the sea while the three others suddenly refused to free the captain and the four pirates with the captain together fled the scene with the lifeboat” he said.

    Hostage ‘Unharmed’

    The pirate’s account jibes with that of a crew member, Ken Quinn, who told CNN in a broadcast phone interview yesterday that the crew released the captured pirate after 12 hours in what may have been a botched hostage exchange.
    The captain “remains hostage but is unharmed,” Kevin Speers, a spokesman for Maersk Lines Ltd., said in a televised statement from Norfolk, Virginia, the ship’s home port.
    “The safe return of the captain is our foremost priority and everything we have done has been to increase the chance of a peaceful outcome,” Speers said.
    Most of the recent attacks have been to the south of the Gulf of Aden. About 25 warships from the European Union, the U.S., Turkey, Russia, India and China have concentrated efforts to protect the Gulf of Aden, one of the world’s most-traveled trade routes and where most attacks have previously occurred.

  131. 131
    choices Says:

    PBR continues to ramp up but that boy is volitile.

  132. 132
    Nicky Says:

    So nobody has heard of Trade King??? Sorry to ask again!

    Copper has resistance at 210.00. Ag (soybeans, wheat, corn) are likely to turn lower too looking at the charts.

    Oil is rangebound either 4 or b – will eventually turn lower again. Cycles point to a turn in April so I am watching to see whether that turns out to be a high or a low and we should then trade the opposite into June.

  133. 133
    Nicky Says:

    Gold – I see 890 is (maybe a touch higher), then 850.

  134. 134
    BirdsofpreyRcool Says:

    Nicky — I just asked Head Trader for you… will let you know

  135. 135
    Nicky Says:

    Just to add re oil that the cycle turn is due next week and the way it looks right now that cycle will be a high and turn lower into mid June.

  136. 136
    Nicky Says:

    Thanks BOP

  137. 137
    BirdsofpreyRcool Says:

    Head Trader hasn’t heard of Trade King. But went to look at the website… says it looks like a Scottrade-type brokerage, except with lower fees. Says “probably works as well as any of the discounters.” But he doesn’t know them.

  138. 138
    Nicky Says:

    Indices – diagonal resistance resistance – looks like v of 3 completing with 4 to come. I don’t think they push this much higher.

  139. 139
    Nicky Says:

    Thanks again BOP.

  140. 140
    Sambone Says:

    Ram, Oh yea. Bght more at 70 today. I guess Wachovia and Golden West don’t exist anymore for WFC. FASB = Cookin da books. It shows “Mr. Market” is desperate for any postive news with gusto.

  141. 141
    BirdsofpreyRcool Says:

    Hearing a lot of retail money flowing into stock mutual funds. Anybody else seeing that?

  142. 142
    zman Says:

    ZTRADE:

    Adding more HK. $10KP – Added (10) May $25 Calls (HKEE) for $0.70 with the stock at $21.30.

    Also added 15 more of the April $22.50 calls for $0.40.

    Expecting an operations update in the near future here as with several names.

  143. 143
    zman Says:

    Ok, I’m done, Beerthirty. Have a great weekend everyone!

  144. 144
    zman Says:

    Interesting to note they add option strikes in between the regular ones on HK. Don’t think they were there yesterday. Now seeing a $19, a $21 and a $24 strike.

  145. 145
    Nicky Says:

    Very bullish close. Confirms that we will be seeing 9000 and higher on the Dow before all is said and done. That said I am still expecting a pullback for 4. It is 5 that will take us there likely into June.

  146. 146
    Dman Says:

    Nicky – I’ve never heard of Trade King & the fact that nobody here had heard of them seems like a bad sign to me. Brokers vary dramatically in the quality of trade fills, so why wouldn’t your friend go with a good one?

    BTW, for stock trades, thinkorswim charges $0.015 per share with minimum $5. So you pay $5 per trade unless you trade more than 333 shares. I don’t know if there are brokers that do it cheaper, but it’s pretty cheap & trade execution is first rate.

  147. 147
    Dman Says:

    Cramer is sore about the NG stocks doing well.

  148. 148
    Wyoming Says:

    Have a good weekend

    http://biz.yahoo.com/ap/090409/la_chimp_haven.html?.v=1

    Found the monkey.

  149. 149
    BirdsofpreyRcool Says:

    Dman — for my personal accounts, I pay $7.95/trade at Scottrade and $8.95/trade at Schwab. Schwab has some great software. Scottrade is just plain cheap. And since I sometimes play in very low-priced stocks, I sometimes trade in 20k share lots. Same price for 20k as for 20. I also have a Fido account. Of the 3, I recommend Schwab, if you trade a lot… and Scottrade if you don’t. And I always use limits, never buy/sell at market.

    Never tried TOS, but hear very good things about it.

  150. 150
    Wyoming Says:

    Russian Production

    http://www.platts.com/podcasts/news/archive/2009/apr/spotlight040809.mp3

  151. 151
    Jay Reynolds Says:

    re 150

    How entirely refreshing and realistic that the interviewer begins with the stated assumption that among other reasons, “Russian oil production is falling due to low prices.” Now to get him a post w/ the DOE..

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