US households are learning to cope with inflation in basic necessities, such a food and energy. Even though the recent CPI report was encouraging, the rising cost of living is a political issue. Fawlty Towers, the brilliant twelve episode British comedy series with John Cleese as the eponymous hotel owner Basil Fawlty, has a scene […]
The Fed has a problem with long-term yields. They are remaining stubbornly low, in willful defiance of steadily increasing short term rates. Slowing the economy so as to raise unemployment will be hard unless bond yields move high enough to impede some capital investment and debt issuance. There were signs of this in the spring […]
The theme to pipeline earnings for 2Q22 is one of positive surprises. It reminds me of Don Layton, former vice chair at JPMorgan and more recently CEO of Freddie Mac, when I told him I’d hired a new derivatives trader with a perfect Math SAT. Don, not easily impressed, responded by recounting a class he […]
To the twin certainties of death and taxes, the energy investor might add increased US exports of Liquefied Natural Gas (LNG). The outcome of Russia’s invasion of Ukraine is far from certain, but it’s hard to envisage Europe ever relying on Nord Stream 2 for natural gas. Moreover, once the flows from Nord Stream 1 […]
Making eurodollar futures interesting is not among Fed chair Jay Powell’s goals, but he’s achieved it nonetheless. From just after their June FOMC meeting through Thursday, the market has lopped over 0.50% off the projected rate cycle. The cycle peak has even been brought forward, from March 2023 to this coming December. The FOMC’s Statement […]
I spent the last couple of days at LPL’s Focus event in Denver, meeting a good number of clients and prospects. Denver’s enormous conference center was teeming with LPL financial advisors. CEO Dan Arnold gave an inspiring talk. Human contact is roaring back. On the flight out to Denver, a couple of recent conversations reminded […]
The other day a White House spokesman offered familiar criticism of oil companies for not reducing gasoline prices to match the recent drop in crude. It’s easy to manipulate charts to make a point, and the example used in the press briefing does that. Gasoline prices have fallen recently, but is their relationship with crude […]
Higher prices for traditional energy are supportive of increased use of renewables. The point of a carbon tax is to create price signals for users and producers of coal, oil and gas that reflect society’s assessed cost of the burden imposed by rising CO2 emissions. Uncertainty over long-term public policy has led to years of […]
Earnings season for the pipeline sector kicks off Wednesday 20th with Kinder Morgan. Crude oil prices have slid over the past several weeks, reflecting increased fears of recession and China’s ongoing efforts to eliminate Covid through regional lockdowns. Sharp moves in oil affect energy sentiment and the consequent drop in midstream energy infrastructure reflects these […]
On Monday Nord Stream 1 was shut down for annual maintenance, cutting off the remaining Russian natural gas exports to Germany. Europe’s biggest economy continues to provide lessons to the rest of us on what a flawed energy strategy looks like. German industry anxiously waits to see whether some contrived additional repairs will extend the […]
