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Linn Energy, LLC Message Board

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  • g1r2p3 g1r2p3 Nov 21, 2008 3:34 PM Flag

    10Q on Counterparty Risk

    is polite buttcovering. It's the equivalent of "past performance etc etc...The risk may or may not be palpable..the statement protects them legally because it recognizes a possibility before it occurs.
    In this environment EVERYTHING is questioned and counterparty risk is grabbing liquidity by the throat.
    I'm investing in PWE..LINE..EPD..LGCY..even if the distributions are cut every negative factor has already been built into the low prices....

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    • Given what is going on they have to put that footnote in there. They have already had one coutner party (Lehman) go belly up so of course any auditor is going to make them disclose this risk. I don't know how likely it is to happen I guess it depends on who the hedges are with. You wouldn't have thought Lehman was going to go belly up but they did. The market seems to be pricing in a chance that the hedges won't hold. Otherwise there is no reason for the stock to be where it is oil prices dropping have no real affect on LINE if the hedges hold. Lower oil prices should actually help them by increasing demand from where it would be otherwise as long as the hedges hold. If we can get through the next month or with no majors financial instituation blow ups I think LINE will start to go up as people realize the financial system is stable.

 
LINE
0.18+0.03(+16.13%)May 23 4:00 PMEDT