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Showing posts from March, 2017

Scottish Independence Helps With Big Oil

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Fears that taking Scotland out of the EU would make growth and diversification of the Scottish economy impossible only help the fact that Scotland has a chance to make it on their own. This month they began the march towards a second referendum. Despite the UK vote to leave, Scotland's votes were 62% in favor of remaining, with a well represented voter base in every local authority area.

Despite the usual hospitality and whisky exports, Scotland's major exports include: Aerospace & Naval Systems, Barley, Automobiles, Business & Financial Services, Chemical Products, Computers, Computer Software, Electricity, Electronics, Fish, Confectionery, Oil & Gas, Pharmaceuticals, Renewable Energy, Scotch, Ships, Textiles, Timber, Water. There is a wide a diverse industry here. That aside Scotland supplies the UK with a tremendous amount of oil. Scotland also gets cut out of a lot of the oil revenues. Recent offshore oil findings maybe the largest discovered yet and deep wate…

UPS Goes Long With Eurasia Rail (Investing.com)

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UPS is adding more intermodel stations to China's mega Europe-Asia railway. The Atlanta-based parcel shipping giant recently added stations in China, Poland and Germany to its intermodel rail service between Europe and China. The London to Yiwu trip runs 12,000 km in 18 days. Rail is half the cost of air and take half the time as sea transport and the span is incredable. The railway crosses Belgium, France, Germany, Russia, Kazakhstan, Belarus and Poland, before coming through China. According to Railway Gazzettee: Changsha, Chongqing, Suzhou and Wuhan have been added in China, joining Zhengzhou and Chengdu. The additional locations have been chosen for their proximity to manufacturing, commercial and cultural centres in inland China. Duisburg and Warszawa have been added to the European end. The industrial Ruhr area of Germany provides access to rail, river, road and air transport, while Poland is a centre for e-commerce fulfillment, research and development and manufacturing. U…

Prime Minister’s letter to Donald Tusk triggering Article 50

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On 23 June last year, the people of the United Kingdom voted to leave the European Union. As I have said before, that decision was no rejection of the values we share as fellow Europeans...









Prime Minister’s letter to Donald Tusk triggering Article 50
Published 29 March 2017

The process in the United Kingdom

On 23 June last year, the people of the United Kingdom voted to leave the European Union. As I have said before, that decision was no rejection of the values we share as fellow Europeans. Nor was it an attempt to do harm to the European Union or any of the remaining member states. On the contrary, the United Kingdom wants the European Union to succeed and prosper. Instead, the referendum was a vote to restore, as we see it, our national self-determination. We are leaving the European Union, but we are not leaving Europe – and we want to remain committed partners and allies to our friends across the continent.

Earlier this month, the United Kingdom Parliament confirmed the result of th…

Coal Jobs Are Not Returning

Total US Coal Jobs: 65,971 (Total in 2015) & 74,931 (Total in 2014). Representing a -12.0 change. Source: EIA Coal Job Survey. I am not the bad guy here, just the voice of economic realism. Coals jobs are not coming back. If you see that as a downside then the upside is that coal is at least back in the vocabulary of the American news media. That should lend to more activity in the industry.



source: tradingeconomics.com

• The Economics Are Against The Jobs: Coal is simply not cost-competitive with other fuels in generating electricity — primarily cheap and plentiful natural gas as a result of the shale gas revolution, which has resulted in massive displacement of coal-fired generation by highly efficient, natural gas-fired combustion turbines. Coal has declined from its historically dominant position — from 2000 to 2008, coal supplied about 50 percent of U.S. power generation — to the point where, this year, for the first time, natural gas (with 33 percent of electricity generati…

High Grade Copper Insight

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High Grade Copper (Prices Since '67)
The whisper is turning into a loud clapping sound...Copper is back. Fine. Granted. Will it propel oil? Seems the answer is yes. As of 1:37PM we are at $2.6310 (F:HG). Gold is ticking higher from the POTUS GOP healthcare snafu.







Last Chart from Ole Hansen, Sako Bank

A Look Back At The Billion Dollar Leveraged Loans To Uber and Airbnb

In this day and age you can burn and lose cash at alarming rates, while breaking laws (not just breaking, out right colluding) and still take out a loan larger than most can comprehend and pay a coupon at 5% a year. That is America. That is capital markets. God bless it so long as it does not explode and effect anyone.

Uber Technologies Inc. has raised $1.15 billion from a new high-yield loan, according to a person familiar with the matter, as the ride-hailing company stockpiles cash to ward off regulatory and competitive threats around the world. The new leveraged loan, Uber’s first, brings the amount raised in debt and equity to more than $15 billion and helps its existing shareholder base avoid stock dilution. Uber will pay a yield of about 5% on the leveraged loan, this person said. The Wall Street Journal first reported last month that Uber hired banks to issue debt of up to $2 billion with a yield of 4% to 4.5%. Uber’s loan was arranged by four banks, with Morgan Stanley leadin…

Housing Drags Down Economy By $300M

Home ownership rates are below normal. Demographically things are askew, but the planning of demographics and economic spending should not surprise anyone. It never allowed for much of a change in spending patterns, and it assumed too much similarity without choices - and a rigid age bracket. An article from August 2016 highlights issues going into Q4 and 2017 - which they blamed on student loans, tighter credit and a basket of demographic spending patterns in flux...


- The homeownership rate stood at 63.7% in the fourth quarter of 2016, according to the U.S. Census Bureau. That was down from a high of 69.2% during the housing boom and below the 65% economists say is a normal level. Strict mortgage lending standards, younger households putting off marriage and children and a lack of inventory of homes for sale are combining to depress homeownership - @ WSJ





source: tradingeconomics.com





- The housing recovery that began in 2012 has lifted the overall market but left behind a broad swath …

Middle East Oil Producers Pre-Selling Oil

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In the face of long term low prices for oil, Middle East producers are pre-selling their oil and future produced reserves. Export finance deals and trade finance arrangements are being made with Oman and other sovereigns in the Middle East. This approach allows producers to lock in profits and provides fast cash. 

"Oil importers are experiencing uneven and fragile growth, and need to adjust to the challenges of spillovers from their oil-exporting neighbors and the threat from conflicts" - IMF 



This happens in many commodity lines but it is quite a turn from the gold-filled days of $100 oil.
Oil is such a core part of MENA economies and Middle East economics so leveraging the oil for finance is not the normal - yet. Arab producers have used bonds to finance their trade in addition to profits from record high oil prices. Today Arab producers and their countries are seen developing serious credit risks unless changes are made. Despite what one may think - these countries have low…

A Look At: Natural Gas

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Weekly Natural Gas ReportRegion17-Mar-1710-Mar-17Net Change (Bcf)Implied Flow (Bcf)Stocks (Bcf)% ChangeStocks (Bcf)% ChangeEast309368-59-59453-31.8355-13Midwest506557-51-51572-11.539727.5