KMI is about logistics and transportation. We are still the biggest energy consumer and one of the largest producers ... KMI is in the middle. Relax!
Whatsamatter dogdoo? You seem to have your knickers in a knot ... or are they riding you? Maybe better to go commando for next week if you're still short.
These are just a few of the things I respect about RK and KMI. I have no qualms at all about putting my $ behind them. They will be repaid by a trusting and resilient group of stockholders that won't run for the hills with every little blip.
The shorts have been quiet. A couple of them were frothing at the mouth and calling us morons a few days ago. I love disappointed shorts!
I hope you're wrong. That will not solve the problems with Iran. If nothing happens change will come once the current generation of leadership passes. It is a young country (average age) and the youth are not in favor of what they have. They will not be able to be suppressed for too much longer. Iranians are really not at all like most of us think they are here. They are very intelligent and cultured people and for that country to have normalized relations with the world would be a benefit to everyone. Their whole nuclear stance is part of another dynamic that will play out soon. Their reality is that if they used nukes their whole country would be destroyed by the response. That is a matter of certainty.
Like you, I have been beaten up every which way. I've been at this since the late 70's ... Once bitten, twice shy is natural and normal but what matters more is perspective.
Within change there is always continuity and so when others discount the value of that continuity because they are viewing it through the lens of today's change and the associated uncertainty those who see through it get a bargain.
We are still one of the world's biggest consumers and producers of oil and energy. If you think that our government (even as inept and distracted as they have been of late) would allow our domestic industry to be strangled by a price war, you are wrong. We could create a trading block with Canada and Mexico and impose a $20/ barrel import tax ... it is the only thing we would need. For them to undercut the price to fight it would be budget suicide, even for Saudi.
That suggests a pretty strong 'floor' at the $40 level. Sweet! I feel like you are panicking. Don't .... just make sure you don't have more than 20% in this. Relax .... this is a multi year process and it will look very different by the time the energy markets are once more in equilibrium.
Yes, I see it. It's called ammunition. You know my views on KMI and why RK went down this road. He intends to grow KMI and will use this shelf stock as currency. He is cunning and experienced and has before him a smorgasbord of tastiness to snack on. Sit tight, enjoy the ride. He won't buy what won't strengthen and the distribution system. Perhaps NG properties to feed LNG .... who knows. His $ is right in there with ours. This is nothing to be alarmed about in fact it fits perfectly into what I have been saying all along.
Why is it that you feel that oil "needs to hit 40 or less before a permanent rebound"? There is no certainty or requirement. I am not saying that we have seen the bottom ... I would just point out that the current price is meeting the purposes of those that initiated it and that driving it lower will not bring a proportionate return and will create cracks in the OPEC relationship.
Perhaps Saudi claims to protect their market share but what they actually do is another matter entirely.
Averaged down quite a bit .... will sit tight for now. If someone took us out I would doubt that they could do it for less than $4. It would be a shame but you take your chances ....
Me too. I figured that the divy was gone. Kept averaging down. Was a little early but will sit and wait. I love these sell offs.
Supply has grown and the Saudis don't really have the control they once had. OPEC will likely fall apart as the central purpose of it no longer applies. High cost producers will not support OPEC if they can't benefit from doing so and will break away. Saudi is still the 'price maker' because their production is large and recovery costs low (direct costs of pumping and transporting to port is reported to be $4) but that is where their power ends. They are punishing Russia for Syria and we and Europe support it because of Putin's stance in the Ukraine (which seems to be softening). It hurts our energy industry but we will continue to build out our infrastructure and we will continue to pump and drill but at a slightly slower pace. The harm is short lived if prices recover to at least the mid $80's within a year. I expect that to happen.
I hear you on your concerns and share them. However we are talking about the Fed. They have a rather limited set of tools and can't be held responsible for the lack of 'depth' to the recovery, which is what you reference. Indeed, I will never again have what I had prior to 2008 and probably never will. More than that there is nothing in my life that I can identify as being better as a result of actions taken by all of our political / legal / financial leadership. As for the structural unemployment. Congress is most responsible for that. They facilitate the export of jobs and the import of workers (special visas) whenever their masters need it. Should it be any surprise that US workers are priced out of the market. In most of this country you would be living in a cardboard box if you were to undercut foreign labor. Their cost structure is different. The problem is that we practice 'free trade' and no one else does. So, they use our markets while shielding theirs, manipulate currencies to price our exports out of the market and undercut us world wide. Well, if we started standing up for our own people then this would all change. It is just that the people are a distant 3rd priority when decisions are made .... after satisfying their masters and getting reelected. If this continues we will lose more industries.
Thus I guess the bottom line is that given the constraints they live under, the Fed has done the best they could to keep the ship afloat. As for the unwind, my guess is that as soon as we see the world firmly in recovery (that may exclude those that rely on natural resources for their budgets) we will see inflation. That will allow them to unwind a lot cheaper and if we see good growth it will not be too bad.
We have so many positives .... huge oil and gas producer, relatively cheap social overhead ... the economy will be fine even as more than half of us are not and are not likely to find much improvement going forward.
That is certain, not conjecture. Saudi is the 'price maker' and Russia's actions in Syria and Eastern Europe scared everyone so this is designed to calm him down. His message was defiant but he also opened the door. Coming from him that is a sign of desperation. He knows that his support will evaporate if things remain as they are for too long.
To like or not like what the Fed has done is one thing but to argue that it didn't work is quite another. We recovered faster and more comprehensively than anyone else and are arguably keeping the world afloat right now by calming what might have become a panic. Yes, the balance sheet is frightening but at this stage there is nothing productive to be done about it. Especially with the rest of the world being in a shambles with many in or bordering on recession. Our Fed has done a masterful job. Lets all hope that the reset isn't an invitation for politicians to carve out angles for their buddies that create another problem.
My guess is that they want to eventually inflate us out of it. How and what is anyone's guess.
I am less concerned with Iran than others on this board. I don't believe that the support or appetite exists in the population for conflict with the west. They have a very young population that is looking outward and increasingly dissatisfied with the status quo. As for Israel, they have enough problems and should sit tight and concern themselves with trying to reduce conflict in the neighborhood. If the ISIS style of warfare were to spread to the Palestinians it would make a bad situation magnitudes worse.