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Oil at $89 a barrel is VERY bad. Very inflationary. The Fed will not be lowering rates any time soon, which translates into a big selloff in the market, followed by an ugly recession. AND, looming is the big budget battle. Expect a prolonged Government shutdown. I can almost guarantee it. Three weeks or more. The House Republicans aren't going to blink because Kevin McCarthy is a weak sister and the alt-right will run over him. IMO, the best place to be is in Government Securities mm's. With 20-20 hindsight, putting everying in a big oil company like XOM a month or so ago would have been very smart. As littlejohn says, "and so we watch". As skillz1 says, "I could always be wrong". But if oil prices stay high, I won't be wrong.
Lee is working his magic on the price of oil. VTLE still cannot hit $60. When the price reaches my cost on the first lot I purchased, $65 and change. so long, adios, au revoir, sayonara. I am beginning to think it will not reach $65 until oil is $120 a barrel, which might be never!
The stock is a dog. The opportunity cost of owning 100 shares, $6500 outlay, is about $250 before taxes (4 percent yield on a MM). Then there is inflation decay. Owning an oil stock with no dividend was not a good decision. With 20-20 hindsight, XOM would have been the better choice.
VLO continues to look smart. DVN has proven to be another poor choice, even though it pays a nice dividend. However, it is very near my cost, and I was paid to wait for it to get back there. Paid handsomely. Enough whining.
NYBob: I don't think so.
lj: What about oil from offshore Gabon and Egypt. Is it being shipped? Apparently it is.
Once again VTLE has proven to be an underperforming stock.
Right now, Lee's biggest threat still seems to be the Canadian Maritime Provinces.
(I remain bored with Lee. Wednesday should put the picture in focus.)
VLO still up. Is the rise in the price of gasoline going to help keep the crack spread the same.
Pump prices have not risen at the same rate as the price of oil. Only a glut of gasoline would explain the fact that prices did not shoot up in tandem with the strong rise in the price of oil over the past few weeks.
Are we at the point at which pump prices affect driving patterns? Do people even care about rising gasoline prices?
If even 20 percent of the at-home workforce were required to go back to the office. . . There is a lot of noise on financial programs about that happening by early 2024.
So we watch. . .a jet-lagged President make a fool of himself.
https://www.dailymail.co.uk/news/article-12506245/US-makes-deal-Iran-swap-five-American-prisoners-6billion-frozen-funds.html
lj: I'd love to see RFK, Jr. go third party. That would split the Dem vote.
Haley quit her job at the U.N. I wouldn't vote for a quitter.
And I don't think she is a Christian, which is a big problem for any candidate that wants the Republication nomination.
Even if Trump were in jail, he'd win the election with a write-in vote.
They take him down, all conservatives would be doomed. Think 72K IRS agents.
That would be the Marxist's Gestapo.
Ayock and arizona1--two real prize packages.
littlejohn: Sandy has crossed my mind more than once when thinking about Lee's path.
Hurricane Lee currently Cat 2, but expected to strengthen.
By the way, petrol prices are still rising here, as I expected.
al44: Years ago, lunatics left San Francisco for Portland. That is who has run the city into the ground.
Gmenfan: Excellent.
lj: VTLE has stalled once again. After the move in oil this week, those hedges don't look so smart.
I might start selling $65 calls, which is approximately my cost on part of my position. On a $6,500 investment, the yield from a Government securities MM would be at least $260 a year at the going rate. Here comes the broken record: VTLE doesn't pay a dividend. I am telling you, no matter how well management runs the company, investors run the stock, and they want a stock that pays a dividend. Enjoy your college games today!
lj: The wind field is interesting news--a 50 percent increase. Didn't expect it to replace the eye wall so soon.
Lee is a poke-i-cane. It won't be out in the Atlantic parallel to the Mid-Atlantic region for at least a week, assuming, of course, that is the course it takes. After seeing Ivan's track, my uneducated opinion is that hurricanes can go anywhere.
It is hard to take any track seriously until after the next 72 hours--canes stall, and a new set of meteorological conditions change a storm's itinerary. Unless you believe, as do conspiracy theorists, that the weather is controlled by evil humans!
Hurricane Lee: Another nothin' muffin NOAA report. This storm is moving like a snail.
https://www.nhc.noaa.gov/text/refresh/MIATCDAT3+shtml/090240.shtml
lj: The weather networks are going to make big money off of this storm selling advertising. There is too much hype, as usual.
At least it gives people up the entire East Coast enough warning so they can prepare to prepare.
getmoreshares: I believe it 100 percent.
lj: I bought in the call and that is that. By the bye, in these here parts petrol went up 7 cents a gallon since Monday at the lowest-priced stations--$3.54 on up!. At this time next week, the cheapest price will be $3.65.
OT: There is a LOT of high-priced real estate along the rivers that are tributaries of the Chesapeake Bay.
Thankfully, the next full moon is not until the 29th, and the storm will be long gone by then.
lj: VLO up $6 the last time I looked due to the fact that I sold a $140 call for today. The media is hyping the storm now.
The big factor that will affect its path north by northwest is its speed. The Canada Atlantic provinces are hoping that it slows down to a crawl; the U.S. East Coast below New England is hoping it keeps up its pace. Vacationers to the East Coast beaches next week will not be in the water jumping waves. Very interesting but very scary. I hope the storm loses a lot of intensity when it hits that cooler water caused by Franklin.
lj: Over and out. Time to put on a podcast and get some work done before hitting the hay.
lj: VLO is still surprisingly strong, by the way.
After listening to that excellent hurricane report, Lee is starting to give me the creeps a little. The incredibly high surf is really going to tear up the beaches along the Outer Banks on up. Still, it is early days. At least the U.S. east coast will be on the west side of the storm. Canada should be very worried.
SSKILLZ1: BGS
Thank you for giving us the benefit of your macro view of the food industry. I do think $85 oil is inflationary because oil is needed to make almost everything, and to transport goods to market. I think it is important that BGS limit their offerings, because their list of products is staggering, almost crazy! Paring down their products range should improve margins.
IMO, any dividend yield makes a stock relatively attractive. It is hard to take money out of a Government-securities money market at a brokerage to buy a stock with no dividend or a dividend that is significantly below the going yield on these MM's, about 4.9 percent, give or take a few tenths of a percent.
A friend has owned CAG for years. I think they might be the company that spun off Lamb-Weston, which has appreciated nicely since the spinoff. I might be wrong about it being a CAG spinoff. I doubt that BGS has a product line they could spin off. If they did, they could dump debt on the new company!
In any event, I have BGS back on my radar thanks to your very informative posts.
Thank you again.
lj: That was excellent. Thank you. He is the best meteorologist I have ever seen on TV. I guess when you work for a station in the heart of the oil industry, U are going to be top notch. And he is.
skquared: DeSantis walks the walk, but he isn't ready for prime time. Trump couldn't accomplish half of the things he set out to accomplish during his Presidency due to (1) COVID and (2) the constant attacks, the worst of which were the impeachments. He has many flaws, but Trump a man of iron and he really is standing between us and the Marxists who are after us.
Gmenfan: They could use Hunter's face to promote it!
Gmenfan: That is a scream! But U might get a false positive if U try it with Bud Light!
SSKILLZ1: BGS
I have owned this in the past. Recently, I was trying to remember the name of the company when I saw Don Pepino pizza sauce in the grocery store. Like Flowers Food, it has a ton of debt but a decent cash flow.
What worries me is the rise in the price of oil in recent weeks, which is very inflationary. How much pricing power do these food companies have left? The price of the smaller can of their pizza sauce was $3, which used to be the price of the larger can. This is just one of a vast number of their products, I know, but it is cheaper now to buy a frozen pizza than make your own. Also, do people steal their products? A grocery store in Washington D.C. is taking named branded products off of their shelfs due to "shrinkage", which the media's euphemism for thievery. Since they are a wholesaler, I guess theft is not their problem, but if, say, thieves like Don Pepino sauce, stores might stop buying it.
lj: Oil price rises as China slows down is counterintuitive, but that is what is happening, thanks to the Shieks of Araby. If China's economy becomes a big mess, if oil prices stay higher, look out below in the U.S. stock market.
lj: And, this info from a reporter on the ground. A friend in Jacksonville told me that a gas station there (a chain? don't recognize the name)--Crystal? is discounting gasoline 30 centes a gallon today. I might drive down I-95 and fill up!
Oil futures up again today.
My uneducated forecast: Once the gasoline glut is over, imo, late next week as the weather improves in the highly populated Mid-Atlantic region, and Mr. Lee disrupts Atlantic shipping, especially if he moves up the deep blue sea as Old White Joe makes his way across a stage, the rise in the price of petrol will shock people. Of course, we won't be shocked but others might me.
NOAA update on Lee, 11:00 p.m. EDT. A whole lotta nothing.
https://www.nhc.noaa.gov/text/refresh/MIATCDAT3+shtml/070245.shtml
al44; The MAGA movement needs to educate people starting next summer on how to submit a write-in candidate on a ballot.
It has to be done with care. If the candidate's name is not spelled correctly, the ballot can be disqualified.
lj: "Trump tried big tariffs on China like
Lincoln liked and the world had covid
spread everywhere in retaliation..."
Glad that I am not the only one who understands that. Before Covid was known in the U.S., a Chinese-American private school or organization canceled its Lunar New Year celebration due to the virus. They obviously knew it was widespread in China. With 20-20 hindsight, after reading that in the newspaper, I should have rushed out to the store and bought up all of the toilet paper. Or not.
lj: I know what U mean, Vern. I had IPGP put to me at $100 a share a couple of weeks ago, and it moved up about 8 points, and now has lost 2 of those points.
lj: Well fellow peon, as always, U are on to something. I topped off both of my vehicles this week. I have two full tanks. The next time I fill up, gasoline will be over $4 a gallon. On the highway near here, gasoline is $3.47 a gallon. Four miles up the highway, in the next county, gasoline is $4.70. Go figure.
littlejohn: OT
I never checked to see whether they tore down A. P. Hill's statute. His remains were moved from the cemetery where he originally was interred (Hollywood Cemetery in Richmond) and re-interred at the base of his statue. If I lived in Richmond, I would have checked the laws to find out whether it was legal to remove what amounted to a headstone (the entire statute).
Funny that the black residents of Richmond weren't the one behind the removal of the Confederate statue. The entire thing was as sick as it gets.
lj: OT
They should not allow swimming at North Carolina beaches until the surf returns to normal.
I remember a summer in the 1990s in Ocean City, Maryland, when the surf was so rough you weren't allowed in the water for a month or more. The lifeguard approached my sister and I and said, "I do not want U going in above your ankles!".
I believe there was a drowning at Rehoboth Beach Delaware this week. The problem with the Outer Banks is that there are no lifeguards. I assume there are beach patrols, but it can take a while to reach a swimmer in trouble.
lj: If she gets her way, Marjorie Taylor Greene will make it very clear what he has done wrong--in articles of impeachment.
By the way, the media is starting to cover Lee. Saw it on Yahoo!'s homepage, showing it tracking toward Florida.
My money is on the Carolinas. But, it is way too early to tell.
lj: The White House is going to feel like warehouse stock is falling on them if Marjorie Taylor Greene succeeds in getting an impeachment moving in the House.
lj: Lee
I wouldn't give credence to any tracking yet. He is just moving along north/northwest.
By Friday, I'll be all ears on tracking. The Category should be interesting.
I didn't see Idalia on the map.
lj: Fuel demand here is distorted due to the weather. I don't think we'll get an accurate picture until the week after next.
lj: Paid $3.47 today at Royal Farm. Due to temps in the mid- to high 90's, people are staying indoors, decreasing demand.
That will change next week.
pequenojuan: I guess U are referring to AL95, in the middle of the tropical Atlantic, which will morph into a cane within days. Another storm system is forming off the coast of Africa. FInally, the fat lady Franklin fancies has not sung, because he is in the warm waters between the Azores and Portual. Is he on his way to see her?