Veteran’s Day Wednesday

Print Friendly, PDF & Email


Sincerest Thanks To All The Veteran's and Active Servicemen Out There.

Market Sentiment Watch: Today expect mostly quiet, melting up action in the equity markets, with occasional bouts of restlessness. The bond market is closed. The stock market should be.

Since yesterday's close, the Fed, via a number of comments, has reiterated its low rates for an "extended period" policy and its lack of fear of inflation. In a speech late yesterday, Federal Reserve Bank of Dallas President Richard Fisher basically said that while this low rate policy was hurting the dollar he didn't want to do anything to help the greenback and that it's descent had been orderly. Futures are solidly higher early this morning.

I used yesterday's directionless action to get a bit more work done on my Gulf of Mexico Shelf players pick (s) for 2010. There's no rush here and I'm not finished deliberating but the results so far are in the Stuff section below.  


In Today's Post:

  1. Holdings Watch
  2. Commodity Watch
  3. Oil Inventory Preview
  4. Stuff We Care About Today - Gomex Shelf Players.
  5. Odds & Ends

Holdings Watch:

  • $10KP II:

    • $23,800
    • 50% Cash
  • Yesterday's Trades:
    • None.

Commodity Watch:

Crude oil eased $0.38 to close at $79.05 yesterday in a rudderless market. It did however fight off one intra day attempt at collapse back into the mid $70s. After the close, the API released bearish looking numbers which I doubt will have much impact in the crude and crude products markets. We don't get the EIA's oil inventory report until Thursday. This morning crude is trading up slightly on strong equity futures and data out of China signaling continue strong industrial growth.

  • OPEC Watch: Demand Forecast Increased. The Cartel increased its 2010 global demand to rise 750,000 bopd, up 50,000 bopd from last months estimate.
  • EIA Watch: Demand Forecast Increased. EIA also boosted its forecast, now looking for a 1.26 mm bopd rise over 2009 levels.

Early Read on Oil Inventories:

  • Crude - UP 1 mm barrels
  • Gasoline - DOWN 0.35 mm barrels
  • Distillates - DOWN 0.7 mm barrels

API Watch:

  • Crude - UP 1.217 mm barrels
  • Gasoline - UP 1.403 mm barrels
  • Distillates - UP 0.640 mm barrels

Natural gas fell $0.20 to close the day at $4.47 due to continued mild weather and a lack of real impact from Ida. This morning gas is trading up slightly.


Stuff We Care About Today

Shelf Player Watch - Part II - Just the numbers, more on the stories in tomorrow's piece.



All of these are not entirely Gulf of Mexico Shelf (shallow water) players, but they are substantially focused there. Some have some U.S. onshore or deepwater or N. Sea production but the comparisons are still valid.

  1. Long reserve life on the Shelf is a rarity with most discoveries only lasting 3 or 4 years. The Shelf is a treadmill requiring constant reinjection of cash flow or, in times such as these, reinjection of new capital to continue drilling to replace, let alone grow reserves. The longer your reserve life, as measure by your proved reserves divided by your annual production, the slower your treadmill.
  2. Low costs are key on the Shelf, again, especially now with low natural gas prices. Lower costs mean higher margins and give you the flexibility to carry more debt, and less hedges.
  3. The other metrics above are pretty obvious. Higher reserves per share and lower valuation in the market of your reserves both speak to a stock's cheapness.
  4. Just on the metrics above, (MCF) is the easy standout in the group. Their ultra low operating costs would be top 5% amongst E&Ps onshore, let alone off shore. Reserves per share and a lack of debt make them better and different as well. I'm not a $0 debt guy, as I believe in an appropriate capital structure and debt leverages returns as commodity prices recover so I'd actually like to see them add some if they have the need in terms of drilling but still, it's both a low cost and safe name and I'm not surprised they don't have any hedges on at the current time.
  5. Tomorrow I'll add company hedges and a bit of operational color on each of these names. As I said before, I'm in no rush to buy the names but want to be in front of what I think will be a bit of risk extension in next year's market in the Energy group. As such, I'm doing my home work now with an eye towards an entry for a common stock position on the Shelf (or two or three of them) beginning sometime this Fall and going through next year.


Odds & Ends

Analyst Watch:

  • Canaccord initiates coverage on some oil service names: (SWSI) and (NBR) at Buy, (PTEN) at Hold.
  • (CAM) started at Positive at Susquehanna.

Housekeeping Watch: I switched from being a long term Blackberry user to the Iphone about 2 weeks ago. I have to say, and I'm not paid to say this you folks at the FTC, that for what I do the Iphone is hands down better than the Blackberry, after making a few tweaks to the device. If you are a crackberry addict as I was, you'll miss the absolute instant email notifications vs Iphone's slightly more lazy up to five minute lag time. Get the mail notifier ap and that goes away. Pre market action is live on indexes, currencies, commodities via the CNBC ap which comes with the added bonus of easily being able to ignore the talking heads. Good news and charting there as well. The MarketWatch ap allows you to convert stories from text to speech which is a nice feature if you are reading something else but want the gist of a story shot into your subconcious. BBC, AP, and even the NPR aps all work well for getting more than just energy news. Finally, my site looks really good on the thing. Have a great Veteran's Day. 

175 Responses to “Veteran’s Day Wednesday”

  1. 1
    skimo Says:

    response to tues 108 on Bolt
    I read all filings for last 2 years. Looks like you nailed it-no analysts, small company. Management looks like they made money taking public a while ago and are keeping low profile. I don’t really expect price movement until mgt decides to get out of Dodge. They have a nice little company, though.

  2. 2
    zman Says:


  3. 3
    BirdsofpreyRcool Says:

    GS chocked on their “buy Macy’s calls before earnings” recommendation… 3Q not so hot… stock down almost 5% pre-mrk.

  4. 4
    BirdsofpreyRcool Says:

    #3 was a test… had problems posting earlier… will try posting reponse to Skimo now…

  5. 5
    Nicky Says:

    Morning all.

    Looks like the gap up on the open today will likely end iii of v up. Resistance at 1101, 1105.
    Then we need a wave iv pullback likely to the 1088 area. Yesterday’s pullback was not as deep as I expected – had thought we may see 1084 and we only saw 1087.
    I continue to believe this is going to end very badly.

  6. 6
    BirdsofpreyRcool Says:

    wow… totally blanks out, when I try to post my Bolt comments… will send to z to post

  7. 7
    Nicky Says:

    Chanos thinks China’s a fraud

    11/10/09 Stockholm, Sweden – Billionaire hedge fund investor Jim Chanos, the famous Enron short seller, is in the camp of professionals who view China as headed toward a crash. The China bears suspect that the economy is not as healthy as portrayed, and that many of its components that are actually stronger have become overheated. Basically, they believe that the “entire system is teetering toward collapse.”

    Here are three factors that suggest serious problems in China…

    * First, they claim the huge $900 billion spent by the government on economic stimulus to support the $4.3 trillion economy is underperforming.

    * Second, China could be cooking its books. There are notable inconsistencies in official statistics. They highlight that car sales are rising dramatically but gasoline consumption is flat, one of many unexplained economic phenomena.

    * Third, the Chinese potentially face problems with overcapacity. For example, China uses more cement than the rest of the entire world combined, and it increased production by an amount greater than US, India, and Japan’s combined consumption. It’s one example, but the concern is that China will not be able to find a market for many of the goods it is producing in massive amounts.

    A collapse of the Chinese economy would send shockwaves worldwide, certainly to include the US. A crippled China could find itself with a destabilized government and would be less able to support purchases of US debt… both are serious concerns. To read more of the full story visit Politico, and view its coverage of China headed toward collapse.

  8. 8
    bondbuddha Says:

    Go GS, chocked or choked?

  9. 9
    BirdsofpreyRcool Says:

    “chocked” = a shockingly public choking… 😉

  10. 10
    zman Says:

    Oil up 80 cents, NG up 8 cents, erratic trading, just marking time most likely.

  11. 11
    Wyoming Says:

    Is / Was a jack up rig.


  12. 12
    zman Says:

    Wyoming – is that the one that caught fire off Australia? Montara?

  13. 13
    Wyoming Says:

    Don’t know, but usually these things circulate from fresh incidents. Like the CT unit I posted a couple weeks ago from East Texas. Nobody pulls out old photos for nostalgia. All I know is that it is not ours; beside we purged our GOM stuff a couple quarters ago, and I am thankful for that too.

  14. 14
    Nicky Says:

    9:21 AM Advanta (ADVNA), a large issuer of credit cards to small businesses, files for bankruptcy after massive customer defaults led to an unsustainable capital shortfall. It said it has almost $100M in cash, but cannot meet all its obligations.

  15. 15
    zman Says:

    BOP’s comment to Skimo:

    skimo — BOLT really IS a nice little company. And the “Bolt” name has been around a looooong time, in the offshore seismic acqtn area. They make the equipment that makes the underwater >>BOOM<< that acts like a sonar >ping< to map out the layers of sediment, below the ocean floor. Don't know if they have much (any?) competition in that area. Question is, how do they grow? What innovations can they make customers pay for? I don't know the answers to that. Impressed that they remained EPS positive thru the downturn, tho. Guess they do some other "highly-engineered machining" to keep the factory floor occupied. Anyway, BOLT's Balance Sheet just screams "LBO ME!!" I would expect a nice little company like that would fetch 8.0x (unsolicited bid) or maybe even close to 10.0x (competitve bidding process) when M&A really heats up again. Would venture to guess it will take about 2 yrs, to get to that frenzy level again... but, we shall see.

  16. 16
    TEXWS6 Says:


    That was my CTU you posted a pic of…LOL!

  17. 17
    zman Says:

    Analyst Watch: Coals by Dalhman Rose:

    PCX price target cut to $3 from $5

    WLT price target raised from $68 to $75

  18. 18
    zman Says:

    Tex – ouch.

    This guy on CNBC this morning:


    Saying commercial real estate somewhere between a massacre and a disaster. Says developed and undeveloped land down 75% or more from the peak, then hotels, then office and commercial (strip malls), with best hold up being multi-family.

    Says to improve we need consumer confidence come back. For that we need:
    1) Jobs – have one and feel that could get one – not yet but decelerating.
    2) Home values not falling, starting to rise – this is happening.
    3) Access to credit – not yet
    4) Value of 401K rising on a monthly basis – this is happening too.

    So 1 and 3 are real problems. I don’t know about 3, maybe next year but Fed has been ineffective in getting the banks to lend. #1 will take a long, long time to come back.

    Mack went on to say government has been easy on the banks, via “extend and pretend” … so loans that are crap don’t look like it. That will come back to bite us in the butt I think. He went on to say we need $500 to $700 B of re-equitization in U.S. real estate to right the ship. Sounds tough without foreign investment and for that you need congress to change some laws making it easier for China to invest here.

  19. 19
    zman Says:

    Movie quote Wednesday Watch:

    “And then … boredom set in”

  20. 20
    BirdsofpreyRcool Says:

    SFY priced their offering. The deal was upsized from $200 to 225mm and placed at a yield of 9.125% (564 bps spread to 10-yr UST). But, mngmt had to prove once again that they have a certain “squirreliness” to them… they just couldn’t BEAR to think that their public bonds would sport a 9-handle. That is just TOO embarassing, it seems. So, they slapped a 8.975% coupon on then priced the bonds at a discount to par (98.389%). That stuff always makes me LOL.

    By the way, very strange dichotomy on ratings… Moody’s thinks SFY’s bonds are B3 type risk… S&P rated them 3 full notches higher, at BB-. The yield on the bonds tells me that more investors listen to Moody’s, than S&P. Unusual to see that type of ratings split… usually has to do with how Moody’s views the corporate structure and obligations vs the view S&P takes. So, less about operational risk, more about corporate structure/legal risk. Just fyi.

  21. 21
    zman Says:

    Thanks BOP

    Profit taking set in the group, minor, drifting action.

  22. 22
    zman Says:

    Thanks for your market comments Nicky, just saw.

  23. 23
    zman Says:

    Law of unintended consequences watch:

    AIG CEO threatening to step down over salary cap issue.

    GM says it can’t find a qualified CFO and meet the cap.

  24. 24
    BirdsofpreyRcool Says:

    z — disagree. It’s not “unintended consequences” at all. It’s Stupid Congressional Pet Tricks.

    Idiots. How many of them have actually RUN a business? Anyone? Anyone? Bueller??

  25. 25
    zman Says:

    Seems to be a definite preference amongst E&P investors for the oilier names last week or so.

    BEXP in full breakout mode now.

    WLL about to be.

    WLT – oh way a difference two weeks makes. Stock still fairly cheap on fwd earnings for the coal space:
    2008A $4.37
    2009E $2.63 @ 26.6x
    2010E $6.48 @ 10.8x
    2011E $8.39 @ 8.3x

  26. 26
    zman Says:

    Re 24 – Don’t make me turn you off again ;->

  27. 27
    zman Says:

    Jerome – how’s WLT look from a near term perspective?

  28. 28
    BirdsofpreyRcool Says:

    PXD also did a debt deal yesterday… much higher up the food chain from SFY, but still in High Yield land. Seems there is a fair amount of appetite for risky assets, tho… as PXD upped their deal from $300 to $450mm. wow. Like SFY, the notes were also 10 yr and priced at a slight discount to yield 7.625% (with a 7.5% coupon… a nice round number). Bonds were issued at a +414bps spread to 10yr UST and rated Ba1/BB+, just one notch below investment-grade.

  29. 29
    RMD Says:

    got MCF’s 6/30/09 10-K. Updated #s are:
    total proved 355,046 mmcfe (292.8 producing) = $2.20/fd share on 16.1mm shs.
    PV-10 $889.9mm = $55.25/fd share.
    Used 3.89 gas and 69.89 oil price.
    Still reading….

  30. 30
    AAA Says:

    Re 23, maybe they should try unqualified people in those jobs, considering how the well-qualified people did. Seriously, it shows why the government should not be in the bailout business.

  31. 31
    Jerome Blank Says:

    #27, WLT has been screaming higher without any material retrace (three box reversal, col of 0’s) since bouncing off long term P&F support at $58…near term, you gotta think it may try to fill the gap created this morning breaking above the daily ascending triangle, if bullish, a buy near $68.50 might be the ideal place to consider, but so far its not pulling back much on the 30 minute chart, also the run up to resistance was on fairly noticible decreasing vol which is a little bit of a concern…

  32. 32
    zman Says:

    Thanks J – tried to punt and just missed my price after I asked. Will do again on a re rally and then reload with longer dated calls on next market related weakness.

  33. 33
    cargocult Says:

    Bill, what’s up with drybulk?

  34. 34
    bill Says:

    more history on mcf


    the only negative i can see is current ng prices and will they ever recover

  35. 35
    bill Says:

    drybulk stocks ripping today as the bdi has improved somewhat as off late

    todays newsletter


    Navios maritime reports soon which i own

    they have been using conv pref security that pays 2 % and converts at 10, with the stock at 5 to pick up distressed assets (capes in the lows 60’s) then putting the shiips on 10 yr charters

    Earnings wont move with spot rates as they have locked in the revenue but the avg daily rate will increase 5 k per day next year as the new additions come on line

    I think in time the stock recovers to 10

    I like dsx too as it has zero net debt but not in in or any others

  36. 36
    zman Says:

    WLT – timber. All market related, energy getting punted across the board now. Volume is very light.

  37. 37
    bill Says:

    one final thing on mcf is their production rates are steadily increasing and now running a 32 bcfs per year. With the last qtr cash flow rate of 4 dollar a mcf in an unhedge low price enviroment, there is good upside if and when prices recover.

    With crappy rates they are making 10 m a month , 30 m a qtr on 16 m share o/s

  38. 38
    TEXWS6 Says:


    Can you pass along one of those free Iphone’s you got for the advertisement?


  39. 39
    zman Says:

    Hear ya Tex.

    Dahlman Rose is getting sold into hard on the WLT coal call. Last time they upgraded their opinion on the drybulks they immediately spiked and then sank much further. Hmmm.

  40. 40
    zman Says:

    I may take some $70 strike WLT’s and punt the $60s I hold now, watching the market which is all over the place.

    BOP – did HT and TT have any comments today?

  41. 41
    bill Says:

    Most shippers have violated their debt covenants as assets values have fallen. Firmer rates stops that downtrend.

    i agree, too soon, to call a turn

  42. 42
    bill Says:

    ng 5 yr strip down 10 % in last month, sitting at 5.13


  43. 43
    bill Says:

    meant to say 1 yr strip

  44. 44
    zman Says:

    We get the oil inventory numbers tomorrow

    We get the gas inventory numbers on Friday. Current consensus is for an injection of 16 Bcf. That’s a little high to my thinking given the weather. I would bet that expectation falls between now and Friday morning.

  45. 45
    Jerome Blank Says:

    WLT making a valiant effort to hold that gap…$68-$68.50

  46. 46
    zman Says:


    BEXP – Sold 20 (all) November $10 Calls (QBJKB) for $1.20, up 19% with the stock at $11.13. I continue to hold the November $12.50s (although they are likely to go out worthless) and the common here.

  47. 47
    tomdavis12 Says:

    Z: PBR new ’09 high @ today’s open. Maybe non US$ ( or as I like to call it US peso ) assets a place to keep our eyes on.

  48. 48
    BirdsofpreyRcool Says:

    TT is on the beach and HT is still laughing over the US loss on that Bear Stearns “fraud” case, they tried to prosecute. It’s funny, when the scapegoat turns around and bites you in the @ss! Almost as good as watching Eliot S getting his comeuppance.

  49. 49
    Wyoming Says:


    Yea, I know, I was just seeing if you were hanging around. 🙂

    I wish I could give you something to gig me on but I have not drilled a well in over 1 year, prepping for some so I may be able to have a mia culpa photo in the future. Heading home for dinner, glt.

  50. 50
    zman Says:

    Tom – thanks, maybe so. CEO there has a big mouth, likes to make wild claims unexpectedly, can really swing the stock. Outside of it and the U.S., PTR and other China energy sort of interesting now. China keeps bumping up product prices which is a big help to bottom line at stocks like SNP.

  51. 51
    BirdsofpreyRcool Says:

    make that “when the scapegoat turns around and bites Uncle Sam in the….”

    That was persecutory prosecution, at its worse.

  52. 52
    BirdsofpreyRcool Says:

    Sectors that are most up today = Homebuilders (thank you Toll), Steel, Fert&Ag, Airlines

    Sectors that are most down today = Dept Stores (oops, GS), Application Software, Healthcare, Internet… and O&G

  53. 53
    zman Says:


    SWN – Added (10) SWN $45 November calls for $1.00 with the stock down 2.4% at $44.40 on a weak day for the group.

  54. 54
    BirdsofpreyRcool Says:

    z — your column above “$/Mcfe/’08 proved”… what is the $? Equity value? Enterprise value? sorry to ask… know it’s a stoopid question… thx.

  55. 55
    zman Says:

    Not stupid, its TEV defined as Mkt Cap + Debt less working capital.

  56. 56
    zman Says:

    Not a lot of fans of energy today out there, red and very red on lowish volumes. Weird day.

  57. 57
    cargocult Says:

    Thanks Bill, I continue to value your insight on drybulk shippers.

  58. 58
    BirdsofpreyRcool Says:

    (i know what TEV is… just didn’t know that was what the “$” referred to.) thanks for clarifying!

  59. 59
    BirdsofpreyRcool Says:

    z — you know what is is? it’s a beautiful day in the NE… energy traders were wearing their Hawaiian Shirts on the Train Platform this morning… and feeling like taking a vacation, in the balmy weather. Hence, airlines UP, energy DOWN.

  60. 60
    zman Says:

    Tex – sent I went all flowery on the Iphone earlier here’s a product to avoid. Thomson One service. The last word in that sentence is an oxymoron. Such a cobbled together POS (piece of software) should only be destined for case studies on how not to design a research platform (or to integrated 10 different acquired platforms together). In the dictionary under Craptastic you will find a picture of a Thomson screen.

  61. 61
    zman Says:


    WLL – Added (10) WLL $65 November calls for $0.90 with the stock at $63. I will likely punt the $60 strikes on the bit of group or stock strength and hold these along with the other $65s I already hold into next week.

  62. 62
    zman Says:


    WLT – Added 3 WLT $70 November calls (WLTKN) for $1.60, will likely punt my $60 strike calls and add to this position if the stock advances back towards this mornings highs with a market rally. Stock continues to be cheapish on 2010 through 2011 earnings ($6.48 and $8.39 respectively).

  63. 63
    VTZ Says:

    Dollar at fresh lows earlier in the morning are probably a good sign for our cause.

  64. 64
    zman Says:

    Hear ya on that VTZ – not a pretty day in energy land but I don’t think it means all that much. Dollar still heading lower despite these frequent mini bounces.

  65. 65
    Wyoming Says:


    Friend of yours?


  66. 66
    zman Says:

    Wyoming – Nope. Phil’s an acquaintance. He’s savvy about the market, hasn’t a clue regarding oil or energy stocks, which he commonly refers to as evil. Nice attitude but I happen to know he drives a gasoline powered car and lives in a natural gas heated home with electricity provided by a number of sources including hydrocarbon based ones. Won’t even bother to read that drivel.

  67. 67
    Wyoming Says:

    Does he have a cousin who has a display stand at the grassy knoll, talking about conspiracy theories?

    Probably need to buy up some AA calls.

  68. 68
    zman Says:

    Wyoming – he just might, you can ask the gang here as many of them have memberships over there. I noticed he started a $100KP after I started the $10KP – compensating? Hmmm. Anyway, didn’t partner with him on this site in large part because of his views on oil companies.

  69. 69
    baylor3217 Says:

    HK really having a bad day. Missed my opportunity to get out of those options a couple of days ago.

    Holding on for now to see if another opportunity presents itself, otherwise they go in the scud bucket.

  70. 70
    zman Says:

    Baylor – having a down 2% day along with most other gassy names, SWN, RRC, UPL, CRK all down 2% ish. Don’t see a reason for it.

  71. 71
    zman Says:

    Analyst Watch: Weil coming with a Buy rec on SFY

  72. 72
    zman Says:

    Dollar story – amazing how the writers flip back and forth between the “risk trade is on” and “the risk trade is over”


  73. 73
    Wyoming Says:

    I remember, just picking mess.

  74. 74
    VTZ Says:

    When the euro breaks out against the USD, the dollar will clearly be in the next leg down to 72.

  75. 75
    BirdsofpreyRcool Says:

    From Cross-Asset Class Strategist #1 —

    Since the middle of May we have been discussing the likelihood that credit was likely to begin expanding by the end of this year, and most likely in time for the beginning of the holiday Christmas season…i.e. Black Thursday. We began asserting this opinion when the recession was beginning to give way to the current economic recovery. Our conviction was further bolstered earlier today by a CNN Money report indicating that JPM was in the process of hiring MBS specialists in order to capture a greater portion of new MBS origination volumes. These are essentially outside sales representatives that attempt to network with real estate agents and builders, etc. Their job is to find and generate business and DEMAND ….not sit in a bank branch waiting for the next sucker to walk through the door.

    This is a big deal and an indication that banks are getting back to their knitting. The announcement also tends to fit within the context of numerous company earnings calls in which many financial companies indicated that they were increasing their credit card marketing efforts. Companies also announced that they were attempting to re-establish their auto financing new origination pipelines. The GSEs have also stated that they were attempting to help re-establish the non-bank mortgage origination industry. The establishment of these efforts will begin to generate demand…but it also means that there is a baseline of demand that companies are beginning to compete to get….

    Some other reasons we expect credit will begin to expand include:
    (1) the economic recovery has strengthened;
    (2) US Consumers behavioral models;
    (3) Bank executive are becoming confident that they could achieve higher ROEs through new loan origination volumes rather than purchasing secondary assets on the market;
    (4) Peak Unemployment is close to being reached
    (5) When banks were confident they would not need existing capital to cover unexpected RMBS and CMBS losses
    (6) Securitization loss curves indicate that firms and banks are leaving profitable revenue on the table
    (7) AXP, MA and VISA reporting materially higher transaction volumes
    (8) Increases in Auto Finance marketing efforts by the banks and traditional sub-prime auto finance companies
    (9) UPS and AXP seeing improving shipping volumes
    (10) Government priming of the pump is in full swing

  76. 76
    zman Says:

    We get WMT earnings and their look at the Christmas season tomorrow, should be a tone setter for the next several sessions and determine whether or not the S&P breaks on out of the 1,100 mark or bounces lower from it.

  77. 77
    zman Says:

    Thanks BOP for 75, good stuff.

  78. 78
    zman Says:

    You can watch UUP and the S&P 500 on the same page on a minute chart to understand what’s going on. UUP pops and the S&P drops and vice versa.

  79. 79
    zman Says:

    I knew it was fake only when I saw the part about congress Cutting funding:


  80. 80
    tomdavis12 Says:

    Z: Do you have a guess when WLL will announce their drilling results?

  81. 81
    PackMan Says:

    BOP: There’s your credit rally – $327 BILLION inflows into Bond funds.

    But, $13 BILLION OUTFLOWS in US Equity Markets.

    That’s Year To Date !

    Party on !

  82. 82
    zman Says:

    Tom – you remembered Lewis and Clark. I read nor heard nothing to change my mind that it will be mid November so next week or the week after that. No change from when I wrote this late Oct.

    Catalyst Watch:

    * Lewis & Clark Prospect: Second well at TD, not yet fraced (first well was completed in the Three Forks for 1,000 BOEpd). Expect to hear more questions on the call on this one.
    o Three Forks Well in Golden Valley County, North Dakota
    o See county map here.
    o WLL has assembled 107K net acres in this area
    + Note that most of the activity we normally focus on is to the north in Montrail, Dunn, McKensie counties.
    + There are numerous existing vertical wellbores in this area that can be re-entered to save costs (casing exit opportunities). This shaves about 20% off the completed well cost.
    o Results expected mid November (8,550 foot lateral with 16 stage frac)

  83. 83
    zman Says:

    Pack – that only means there’s firepower for equities yet to come!

  84. 84
    PackMan Says:

    Nicky #7 — China cooking their books ? Say it ain’t so !! LOL.

    20 years after the fall of the Berlin Wall there is still a very large illegitimate communist government that will ultimately collapse; and the cause will likely be an economic one; so I would have to say that Chanos may well be onto something.

  85. 85
    PackMan Says:

    18 – Bill Mack is the real deal when it comes to Real Estate.

  86. 86
    PackMan Says:

    59 … BOP aren’t you in the midwest ? What do you have, MetroNorth CAM ? LOL.

  87. 87
    PackMan Says:

    Z – What’s HK’s problem lately ?

    (I did note the other day the large open interest at the 23 put and 25 call strikes, so I guess I should not be surprised that its stuck in that band).

  88. 88
    zman Says:

    Pack – I doubt options are controlling the action. More likely its natural gas prices and the upped capex on the 3Q call causing some to fear that their is another equity deal looming, even though they about signed in blood that there isn’t. Today it’s just moving with the gassy names but yeah, its been stuck.

  89. 89
    VTZ Says:

    The markets seem to be at a crossroads here… making a decision on whether the rally is going to take off again or start a pullback. Not just based on today’s action but just in general. Lots of the technicals and trendlines on the indexes seem to be at decision points.

  90. 90
    BirdsofpreyRcool Says:


  91. 91
    PackMan Says:

    75 –

    A lot of hope vs. fact from cross asset strategist in that piece IMO.

  92. 92
    AAA Says:

    Re #65, I wasted three minutes of my life that I’ll never recover reading that crap. I’ve lost all respect for Seeking Alpha. I guess they will publish anything.

  93. 93
    PackMan Says:

    89 — Follow the Dollar …. I have UUP ticker running vs. everything else.

  94. 94
    Jerome Blank Says:

    HK had a huge reversal “hammer” on the daily chart on 11/5 at the 50 SMA, the last four days, including today, have traded well within the range of that reversal hammer, nothing significant…Hk has major support at the P&F trendline, $21-$22 with the 200 day daily SMA right there as well, not worried about HK stock at this point at all , the only issue will time run out on the Nov calls…

  95. 95
    PackMan Says:

    Z – those equity outflow numbers show you how the equity markets won’t see any fuel for quite some time.

    Which is why we see no value at Dow 10,300 and S&P 1,100.

    They can’t sucker anyone in.

  96. 96
    zman Says:

    Pack – I understand no equity inflow dollars pretty much all year. My point is at some point money comes back in to equities because it’s tired of making so little and watching the markets rise during that time.

  97. 97
    PackMan Says:

    Let me ask you all here:

    Are you putting any NEW money into the stock market ? Or are you investing / trading what you have ? Or are you taking profits out ?

    Me; no new money in; taking some out as I make some coin.

  98. 98
    zman Says:

    And last time I checked, markets are priced on P/E and not price P/S. I expect earnings to outstrip fwd estimates next year as revenues tick up slightly and this leverages the cost cutting already made. Combine that with a bottoming in jobs in 2Q10 and the market will look to go higher.

  99. 99
    PackMan Says:

    96; that is certainly an issue.

    My checking account gets 0.
    My JPM HIGH YIELD Savings gets 0.02%.
    My Fidelity US Govt Reserves gets 0.03%
    My Fileity Cash Reserves gets 0.15%
    My ING Direct gets 1.3%.

    I can see why Corp Fixed Income is attractive to many. I don’t think ordinary folks look to stocks for their “yield” especially as high yielding stocks such as REITs have gotten crushed; along w/ their yields.

  100. 100
    VTZ Says:

    Pack the only new money I added was to gold on the breakout above 1034. My gold represents almost 50% of my portfolio now. My energy money is still trading around but I haven’t been doing well and I have ~35-40% cash.

  101. 101
    VTZ Says:

    91 – I agree with you Pack about 75. I was going to comment on their 10 points and banks getting back to their knitting but decided not to.

  102. 102
    zman Says:

    Pack I constantly recycle dollars back into the market from prior trades and have added money during the year, my hedge is cash at the greenest times and less cash at the red. I don’t bother with the IMHO stuff by the way as obviously everything I say is my opinion.

    Another opinion I would espouse is not to fight the tape. You can disagree with the direction of the market or the level (which is tougher) but it may take longer for you to be right than you like, like Kass with his string of this is the top, this is the highest we will be this year so go short calls. If he just rehashes known data, I don’t get why the market will suddenly wake up, tell the man how smart he is, and sell off to appease his puts and shorts.

  103. 103
    baylor3217 Says:

    Where’s Nicky been lately?

  104. 104
    BirdsofpreyRcool Says:

    From Howard Marks Newsletter (Oaktree, Nov 10, 2009)

    The Opposite of a Bubble

    On the heels of the lessons regarding the run-up to the crash, the latter part of 2008 provided several lessons about behavior in times of crisis. With the fundamental outlook terrible,
    psychology depressed and technical conditions featuring a great deal of forced selling, that period represented one of the greatest buying opportunities I’ve ever seen.
    I expressed my view that, having been too optimistic before the crash, people were now taking things too far on the downside. It’s not easy to resist emotional excesses at highs and lows, but
    it’s by doing so that the best investment decisions can be made:
    . . . it’s improbable events that brought on the credit crisis. Lots of bad things happened that had been considered unlikely (if not impossible), and they happened at the same time, to investors who’d taken on significant leverage. So the easy explanation is that the people who were hurt in the credit crisis hadn’t been skeptical – or pessimistic – enough.

    But that realization] triggered an epiphany:
    Skepticism and pessimism aren’t synonymous. Skepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive. (“The Limits to Negativism,” October 15, 2008)

    The swing of the pendulum to one extreme or another is a constant in the investment world: from optimism to pessimism, from credulous to skeptical, from sanguine to panicked, from wide-open
    capital markets to windows slammed shut, from more buyers than sellers to more sellers than buyers and, consequently, from overpriced to underpriced. Thus I was thrilled when an article by my friend James Grant provided a quotation that beautifully sums up the end result of this process:
    To the English economist Arthur C. Pigou is credited a bon mot that exactly
    frames the issue. “The error of optimism dies in the crisis, but in dying it gives
    birth to an error of pessimism. This new error is born not an infant, but a
    giant.” (The Wall Street Journal, September 19, 2009, emphasis added)

    Optimism thrives in bubbles. That’s what they’re built on, with optimism and rising prices reinforcing each other. Likewise, crises are brought on by an extreme turn toward pessimism.
    Falling prices and pessimism contribute to each other on the way down. In the years just before the crash, no view was considered too optimistic. There were few
    skeptics around to point out that a notion might be too good to be true. And then, as Pigou says, the opposite became true post-Lehman Brothers. There was no scenario of which someone wouldn’t suggest, “But what if it’s worse than that?”

    Now no idea was considered too negative
    to be true. The error is clear. The herd applies optimism at the top and pessimism at the bottom. Thus, to benefit, we must be skeptical of the optimism that thrives at the top, and skeptical of the pessimism that prevails at the bottom.

    Pigou makes an excellent additional point. Bubbles usually build gradually over time, the result of a steady accretion of logical basis, favorable developments, high returns being achieved, platitudes taken to extremes, willing suspension of disbelief, rising optimism and the recruitment of new buyers. But when the bubble’s faulty underpinnings are exposed, it tends to collapse in a rush. The excess of pessimism does arrive quickly, “born a giant.” Or as my partner Sheldon Stone puts it, “the air goes out of the balloon a lot faster than it went in.”
    A recent report by Ian Kennedy and Richard Riedel of Cambridge Associates, entitled “Behavioral Risk,” provides an excellent explanation for this process and describes its effect:
    [During good times,] we suffer from what James Montier characterizes as “the
    illusion of control: the belief that if things go wrong, we will be able to sort them out.” When that illusion is shattered during a selling panic, we don’t know where to turn or what to think. . . .
    What happens when we humans (and, indeed, other animals) are slammed by
    shock? Unless trained otherwise, our instincts tell us to retreat, conserve, seek the comparative safety of groups, and search for a path out of danger. These are ancient survival instincts, hard-wired. Slammed by financial shock, the same instincts result in heightened risk aversion (gimme cash!), a dramatic
    foreshortening of our normal investment time horizon, an overwhelming impulse
    to flee with the herd, a tendency to extrapolate current trends all the way to
    Armageddon . . .
    In times of crisis, when risk aversion spikes, panicked investors tend to stampede for the exits. The temptation to join them is well-nigh irresistible because the whole financial edifice seems to be collapsing. Carefully wrought models are rendered irrelevant overnight, as correlations converge on 1.0, and “fat tail” risk wags the dog. . . .
    When markets are falling, we instinctively feel that risk is rising, and when markets are rising, that risk is ebbing. In the short term, this instinct may be right since markets often run on momentum in the short run. But for longterm investors it is dead wrong. . . . As equity markets plummet, investors’ risk aversion rises even as the fundamental risk is in fact declining. In other words, our instincts and emotions conspire to make us do the wrong thing at the wrong time: to trust at the top and worry at the bottom, and to think something’s riskier at $10 than it was at $100, as if the emotion-fed price decline is correct in suggesting that something’s wrong.

  105. 105
    zman Says:

    re 103 – comments 5 and 7 today, otherwise I guess she’s been busy. I can relay questions if you like.

  106. 106
    choices Says:

    Today seems to be the day the commercial real estate is on the list of talking points-follow on the theme in #18.


  107. 107
    Jerome Blank Says:

    RE: #104, BOP, I was thinking of Nat gas, the commodity, reading the essay…

  108. 108
    zman Says:

    Thanks. I’ve been running these commercial real estate pieces by a friend in the business who used to own a bank, will let you know if he has anything useful on the topic.

  109. 109
    RMD Says:

    Bob Toll (TOL) on conf. call, if I heard it correctly: jumbo mtg rates were 4.875% of 10 yrs, and the Gov’t would likely be paying 200BP more than that in 2 yrs.

  110. 110
    Jay Says:

    VTZ –

    All other things being equal, do you have dollar vs crude price in your head?

    Ie, Dollar fall from 75 to 72 would equal X $ uptick in oil?



  111. 111
    zman Says:

    That essay is a large part of how I look at the world. I always have a thesis (30 second elevator speech or 10 minute spiel if I’ve been around it for awhile) and therefore I don’t worry much about noise in the names. I get on the wrong side of a trade from a short term perspective often enough but something going down doesn’t generally make me want to sell unless I’ve got to to protect profits or reduce losses due to time. As always, most of my biggest winners were once losers. On the flip side, investing without a thesis, because something is going up and has a nice chart is not something you will see me do more than a couple of times a decade.

  112. 112
    milepost_43 Says:

    #76 WMT …ran across this on RealMoney
    Rev Shark
    11/11/2009 11:54 AM EST
    Wal-Mart (WMT) is on the wires saying it “expects a very difficult Christmas selling season.” Retailers are under pressure on that news.

  113. 113
    VTZ Says:

    I don’t really have a good feel for it Jay, sorry. It would be at least 10 dollars in crude.

    IKeep in mind that it would depend on the relative outflows from the USD to crude, gold and other currencies. Also consider that the USD market is MASSIVE so a breakdown in that market has a lot of $$ looking for a place to hide. The physical crude market (and the gold market) is WAY smaller in dollar terms so I would expect a 4% change in the dollar to have a multiplier (5 times? more? less?) on that 4%.

  114. 114
    PackMan Says:

    102 — Z, I agree with not fighting the tape. I TRY not to; I TRY to be balanced Long and Short. It is tough to achieve. I think I have commented many times that my bias is still to the short side. The higher we have gone, the more true it is. I do play longs; but I am only renting; try to pick my spots.

    IF this upside grind stalls or fails; there is a nice payoff for me.

    Its just frustrating b/c it is totally contrived and out of hand at this point (and I know BOP will disagree with that !)

  115. 115
    PackMan Says:

    And energy names have been good long. that’s why I’m here (in addition to all the good company !)

  116. 116
    jat Says:


    Is that the entire essay from Oaktree? Usually Mark’s memos are lengthier, would be interested in reading the whole thing if a link is available.

  117. 117
    PackMan Says:

    112 … WMT has been saying that for quite some time. Its amazing that people will not listen. I would pay attention to what WMT says.

    Look how aggressive and promotional they have been (and early).

  118. 118
    PackMan Says:

    Jerome … thanks for the HK take earlier.

  119. 119
    zman Says:

    MP 43 – thanks, I don’t show that on my wires, anyone else? I do show them saying they will keep stores open 24 hours on Black Friday to help with stampede issues.

    Also, under WMT headings I see UBS taking their 2010 S&P 500 EPS # from $74 to $81, and raising their 2009 estimate by $2 to $63.50.

  120. 120
    VTZ Says:

    Keep in mind that the reason why a defacto gold standard HAS to return is that the crude market cannot support all the inflows of USDs and crude cannot be stored except in paper form. I expect crude to increase more once real demand returns. The gold market is the only way to store that many USDs but because the amount of gold is finite it’s the same reason the price HAS to increase.

    If the crude market could support the inflows and the storage medium existed I’m sure it would work but the reason why it can’t is that the market is too small to support all the inflows and the price increases would cripple demand.

  121. 121
    choices Says:

    One of the concerns I have about the dollar is the carry trade as discussed in this article-similar to the yen carry trade when it unwound, it got ugly. But as noted in the article, no one knows when the dollar carry trade will unwind or what the catalyst would be-maybe an increase in interest rates which is not going to happen anytime soon.


  122. 122
    VTZ Says:

    The carry trade isn’t a 12 month phenomenon, it’s a multi-year phenomenon… see Japan. The Fed for the past two weeks has essentially told the world to short their dollar into oblivion.

  123. 123
    VTZ Says:

    Someone give me one bullish statement for the dollar that doesn’t involve technicals or talking about being overbought.

  124. 124
    VTZ Says:

    Oversold I mean.

  125. 125
    BirdsofpreyRcool Says:

    VTZ — imho, there is only one bullish event out there… it involves stopping the Federal Govt’s continued monetization of the US Taxpayer base. A CFO friend emailed me this morning, asking when I thought the USD would stop falling… here is my response (fwiw)

    I did not think the USD would fall this far. But I think it’s a Global Report Card on where the world thinks our deficit is going. I think it’s a lot less about where the Fed is holding interest rates right now and managing monetary policy… and a lot more about Stupid Govt Programs and fiscal policy that will weaken the US Balance Sheet. The US govt is busily “monetizing” the LAST independent asset this country has… the US Taxpayer. There are fewer and fewer taxpayers, who are getting leaned on more and more. This is not a good trend. Until the US can been seen to control the growth in Govt debt, i think the dollar continues to fall.

    Sadly, we all have to pay a lot more attention to Washington these days, than we should. If you see HealthCare “reform” fail in the Senate, then I think you will have seen the bottom to the USD. However, then there’s cap-and-trade… if that passes, the dollar will be good for mulching your flowers, and that’s about all. I have read where some non-US-based banks have advised their clients to exit all US investments, if cap-and-trade looks like it is going to pass. Obviously, that would cause more USD selling.

    So watch the political winds. It is dictating where the USD is heading these days. Fear of “inflation” is just a sideshow. Dodd’s attack on the Fed yesterday and today is not helping either. As I said, you want to know why the USD is weak? Look no further than the idiots in Washington DC.

    Will they (the Democrats) support the dollar here? No. It’s not on their agenda. But, perhaps they can be defeated in their efforts to turn the US into the next Venezuela.

  126. 126
    zman Says:

    Oil inventories tomorrow:

    Still the chance of a larger than expected build in the crude inventory number due to imports returning to more normal levels. That will put crude in the penalty box early but imports are less important than demand and product demand should tick up on the diesel side. If product demand is up and crude refinery through put is flat I expect less of a dent in crude.

    If imports don’t move back to normal then people really have to ask where all the crude is going. This would mark the sixth weak of really poor import levels. With the recent uptick to high $70s / low $80s pricing, you would expect volumes stored at sea to storm ashore. With OPEC output having risen steadily for the last several months as prices have risen, with Mexico’s output stabilized (sort of), with Nigeria’s on the rebound, and with Russia hitting all time highs and producing more oil now than Saudi Arabia is, you have to ask where all of these barrels are going. And the U.S. is producing more itself along with biggest import neighbor Canada. On the demand side, things from parts of the world we can see are firming at best. Australia is doing well economic but that’s rounding error. Word from Europe and Japan is that demand has firmed but not really improved that much. Third world demand volumes are ticking up a smidge. That leaves S. America – unknown but producing more of its own, and China and India. If the numbers come in at the low end again I’ll start birddogging this will a little more vigor.

  127. 127
    BirdsofpreyRcool Says:

    HT, popping by with a comment — “not sure if it’s true, but a prog trader just said that the Spoos are currenlty positive on the day… if they close positive, that will be 8 days in a row. The Spoos have never closed positive 9 days in a row. Never.”

  128. 128
    PackMan Says:

    HUGE open interest in UUP calls $23 Nov strike. UUP at 22.50.

    put interest at $22 strike is small.

    UUP is dollar up ETF. If we get a move to $23 or higher in next 7 days, the down move in market should be pretty sharp.

    Plus, didn’t Turbo Tax Timmy say last night in Japan that US wants a strong dollar (LOL !)

    Just saying …

  129. 129
    PackMan Says:

    Forget fear of inflation. It should be fear of the taxpayer !

  130. 130
    zman Says:

    U.S. wants a strong dollar like the POTUS wants to throw a retirement party in 3 years. Dallas Fed president said he didn’t care about the dollar now, that the descent had been orderly.

    Re 128 – or max pain would have all those calls expire worthless, lol.

  131. 131
    VTZ Says:

    125 BOP – Well, I see that as bearish for the dollar too because they are saying they are going to stop and when they have to admit that they aren’t the dollar will fail more.

    The dollar is 100% going to be at least 20% lower when this is done… my target is around 50 on the USD index.

  132. 132
    VTZ Says:

    Ok fine – I’ll amend my statement in 123 to exclude things that the govt says is going to happen but won’t.

  133. 133
    VTZ Says:

    BOP – If the US stops monetizing then the long bond auctions are going to get scarier and scarier and the USD will respond negatively to that as well.

    There is NO bullish news on the foreseeable horizon.

  134. 134
    zman Says:

    Wonder if the dollar rallies if the HC reform bill fails.

  135. 135
    VTZ Says:

    I think a very small chance of health care reform is priced in, but maybe that’s bullish I guess.

  136. 136
    VTZ Says:

    Way to keep me in line though Z! My weekly rant about the USD is over anyways.

    Just putting it out there for ideas.

  137. 137
    Jerome Blank Says:

    HDY is up almost 16% thus far today,but on below avg vol…

  138. 138
    zman Says:

    See I knew I could come with something. Maybe the uptick in the dollar today is the stalling of the plan to provide deductions for pets.

  139. 139
    zman Says:

    Jerome – yep, had been watching it take a beating of late. All the W. African hoopla has settled out of the stocks in the region. PBR drilled a nice well off Angola today but you don’t see anyone in that part of the world taking any notice.

  140. 140
    zman Says:

    WLT getting a nice rally off that attempt earlier at a gap closure.

  141. 141
    zman Says:


  142. 142
    PackMan Says:

    Some fun reading for tonite about CA and other states going broke.


  143. 143
    zman Says:

    HPQ acquiring 3coms

  144. 144
    ram Says:

    How is it funny, when States go broke?

  145. 145
    BirdsofpreyRcool Says:

    Actually, I think that will be the next wave of lay-offs. Govt (state) employees. Not pretty. But, they continued to add jobs, while the rest of us were losing ours and tightening our belts. Never like to see anyone lose their job… but, there’s lots of jobs we just can’t afford anymore.

    Hiring needs to come back in the private sector. Until Washington decides how much blood they are going to try to extract from that turnip, businesses are not going to hire en masse. Just simple fact.

  146. 146
    BirdsofpreyRcool Says:

    ram — i don’t think PackMan meant it as “funny.”

  147. 147
    AAA Says:

    BOP, re #125, great stuff. We face a nightmare future of wealth taxes, exchange controls and politically directed investment.

  148. 148
    BirdsofpreyRcool Says:

    AAA — according to Warren Buffett, “the rich” can afford to pay more taxes.

    Got to say, that statement really BUGS the sh*t out of me. Makes people think there is this well of OPM… and if they can just vote to get their hands on some of it. Well…. wells have a funny way of drying up and leaving us all thirsty.

    Of course, Warnie can stand to pay a LOAD of taxes before he feels any pinch. No… WAIT. HE put all his wealth in a non-taxable FOUNDATION.

    I could go on… but, i’ll try to stop now.

  149. 149
    BirdsofpreyRcool Says:

    Hey… as I was telling z, offline, earlier… I’m not all Sunshine and Cotton Candy. There is a dumptruck-full of cr@p out there, no argument from me.

    But, the next credit expansion cycle started in earnest last April. Only Stupid Govt Tricks can melt it, at this point. (NB: not saying there won’t be periods of sustained down… )

  150. 150
    bill Says:

    I want to thank our friends in Washington for all the work they are doing to constrain new ng supply

    A coalition of 89 House Democrats led by Rep. Maurice Hinchey (D-NY) sent a letter to Interior Secretary Ken Salazar Tuesday urging him to take administrative action to protect energy-rich Bureau of Land Management (BLM) lands in Utah from development while Congress continues to work on legislation to designate them as wilderness.

  151. 151
    bill Says:


    thats because govt’s dont know how to cut spending

    Calif could have billions if they open up oil drilling…but we can’t have that!


    When govt debt blows up it will make what we have been going thru the good ole days

  152. 152
    RMD Says:

    The power of nat gas prices on MCF:

    6/30 reserves 355Bcfe PV-10 $899mm
    9/30 348Bcfe $1,4000

  153. 153
    RMD Says:

    LINE and VNR: no growth in production/share: using RBC ests, ’08-’11 for LINE production /sh is
    .70, .65, .64, .60
    and for VNR is
    .51, .52, .53, .55.
    Now, about those accretive offerings…

  154. 154
    zman Says:

    RMD – is RBC showing raw production growth or just assuming LINE goes with a maintenance capital budget and suffers slow declines? And holding the share count flat. Analysts don’t typically model undisclosed future acquisitions or exploration. So can’t tell if if you have a numerator or a denominator issue.

  155. 155
    RMD Says:

    The analyst #s stink; that said, RBC ’08-’11:
    production 78.5,78.0, 78.6, 78.9
    shares(avg.114.2, 119.9, 130.8,131.8
    RAJA shows production down to 78.8 in ’09, 83.2Bcfe in ’10.

  156. 156
    PackMan Says:

    11:58 AM ET Former Wal-Mart CEO Expects ‘Very Difficult’ Christmas Selling Season>WMTDow Jones

    11:58 AM ET Former Wal-Mart CEO Expects 2010 To ‘Look A Lot Like’ 2009
    Dow Jones

  157. 157
    PackMan Says:

    144; 146 … yes not meant as funny; but as interesting and relevant to our ongoing discussions about the economy and the challenges we still face.

  158. 158
    zman Says:

    Thanks Pack. Well that’s probably what hacked the market back from the highs on the day. Reuters news didn’t pick it up and neither did the crud Schwab calls news.

  159. 159
    zman Says:

    Pack – for the record I didn’t think you meant it that way either.

    You’ll get this quote “Frankie Say Are The Unemployed”

  160. 160
    VTZ Says:

    Don’t worry all the dollar strength from today has already evaporated to go buy aussies.

  161. 161
    VTZ Says:

    I say “strength” tongue and cheek.

  162. 162
    PackMan Says:

    The public sector, which is the most inefficient and bloated sector of the economy; has been protected by the trading of votes and money between unions and politicians.

    In NY City and State, it is absolutely crazy; most of our spending is related to these public sector employees and ever expanding benefits to their retirees who have super crazy generous plans that are riddled with corruption (like firefighters who max out on overtime in their last year, at age 40 or 45, to end up with nice 6-figure pensions for life).

    The pols spend like crazy; the public sector benefits being untouchable; and they think they can keep soaking the private sector wage earners.

    Net result we are seeing all over the country; states keep spending more; tax reveunues declining massively; the pols won’t cut; high income people leave for lower tax states; states will end up going broke unless Obama bails them out with borrowed money that the govt does not have.

    That’s why CA is going broke; why NJ is as well; why NY’s Patterson says NY won’t be able to pay its bills in 4 weeks.

  163. 163
    zman Says:

    I see it slumping, oil up slightly and gold up $5 buck as we speak. Strength = LOL.

  164. 164
    PackMan Says:

    148 … yes, Buffet is one of the biggest hypocrites when it comes to taxes.

  165. 165
    PackMan Says:

    159 — Huh ?

  166. 166
    PackMan Says:

    Like Frankie Say Relax ?

  167. 167
    West Says:

    From today’s Bakken Shale discussion group site……….a summary of wells featured in bexp’s 10-30-08 press release:

    eog austin 25-25h,25%wi, ip 1706 boepd, 140,715 bbls 12 mos.
    eog wayzetta 13-1h,25%wi,ip 1797boepd,125,930 bbls 13 mos.
    slawson payara 1-21h,18%wi,ip 622 boepd,75,718 bbls 14 mos
    bexp kvamme 2#1h, 50%wi,ip 150 boepd, 17,279 bbls 14 mos.
    hess cvancara 155-73, 30%wi,ip 740 boepd, 51,271 bbls 12 mos
    bexp adix 25-1h, 32%wi,ip 892boepd, 73,044 bbls 12 mos
    bexp carkuff 21-1h,57%wi,ip 1110 boepd, 78,078 bbls 15 mos

  168. 168
    West Says:


  169. 169
    zman Says:

    Pack – I hear ya. I want to know who they think will fill the IRS coffers if we start limiting everyone’s earnings and there has been talk of that. And who’s going to shop and go out to restaurants. And who is going to hire people when the proposed surtax hits. The list goes on and on.

  170. 170
    zman Says:

    166 = yes, used to have a great t-shirt of that one.

  171. 171
    zman Says:

    Re 168 – seems to be a lot of opinion there, no decisive fact, some obvious shorts, some obvious longs.

    re 167 – if the 12 to 15 month cums. are accurate and I assume they are state data, they back the claim that BEXP has been making about 12 to 18 month payouts on their wells at about $60 oil.

  172. 172
    West Says:

    On BEXP’s Brad OLSON 10-15 1-H
    Cum Oil: 75927 Cum MCF Gas: 48479 Cum Water: 72134, it is making about 200 bopd and also selling 214mcfpd into the line. It looks like they have been able to hook up most of their reported wells in the Rough Rider area to the gas lines within a couple of months. There are 5 rigs running in this area of North Dakota and I think at least 4 rigs turning right due west in Montana. It looks like the horizontal wells with the mutli stage fracs are going to work in most of the Middle Bakken and Three Forks formations of the Williston Basin. This is an additional huge area of prospective acreage for the play. EOG,NFX, Zavanna (private co related to Zenergy somehow) are also active in this area , but all their wells are on confidential status as far as I can tell from the records.

  173. 173
    zman Says:

    Thanks for the updates West.

  174. 174
    bill Says:

    # 152

    The power of nat gas prices on MCF:

    6/30 reserves 355Bcfe PV-10 $899mm
    9/30 348Bcfe $1,4000


    the 6/30 number is point in time pricing
    the 9/30 number is 1 year strip

  175. 175
    Brendon Tallent Says:

    Plus Earn $5 for Everyone

Leave a Reply

Zman's Energy Brain ~ oil, gas, stocks, etc… is is proudly powered by Wordpress
Navigation Theme by GPS Gazette