Why Inflation Isn’t What You Think
The Federal Reserve has long wrestled with stubbornly low inflation. A decade ago few would have expected this to be a problem, but Personal Consumer Expenditure (PCE) inflation, the Fed’s preferred measure, is coming in at 1.8% this year. Federal Open Market Committee (FOMC) members have been considering allowing inflation to overshoot their target of “around 2%”.
Should Closed End Funds Use Leverage?
When Will MLPs Recover?
Elections Usually Boost Earnings
California’s Altruistic Carbon Policy
Pipeline Stocks Are Quietly Recovering
Pipeline Earnings in a Market Focused Elsewhere
Earnings season for midstream energy infrastructure kicks off with Kinder Morgan (KMI) on Wednesday. In April we identified growing free cash flow (see The Coming Pipeline Cash Gusher) as the most important catalyst for higher security prices. We’ll be reviewing quarterly earnings for evidence that the sector remains on track to generate increasing amounts of excess cash that can be used to reduce debt, increase payouts and buy back stock.
Energy Transfer’s Weak Governance Costs Them
MLPs No Longer Represent Pipelines
Another Gripping Episode of Brexit
For constitutional observers, each weekly Brexit installment leaves viewers on the edge of their seats, pondering what further twists in the drama remain. Most recently, England’s Supreme Court ruled against Conservative Prime Minister Boris Johnson’s suspension of Parliament.
America Offers Safer Energy
Saturday’s surprise attack on Saudi Arabia’s Abaqaiq oil facility in Buqyaq has sent crude oil prices sharply higher. There are estimates of up to 5.7 Million Barrels per Day (MMB/D) of lost output. For perspective, the last two big drops in crude oil, in 2008 and 2014-16, were caused by around 2% excess supply. The lost Saudi output, half of what that country produces, represents around 5% of world demand.
Saturday`s Attack Is A Game Changer
Climate Promises from Politicans: America Will Do Better
Blackstone and Tallgrass Further Discredit the MLP Model
The recent offer from Blackstone (BIP) to acquire the 56% of Tallgrass Energy LP (TGE) it doesn’t already own at $19.50 per share has revealed an ethical gulf between prevailing standards at the providers of capital versus the users. No SEC-registered asset manager could do to its investors what TGE management is doing to theirs.
Hopes for a Trade Deal Slipping
Bond Buyers Should Buy Pipeline Stocks
Art of the Tariff
Trade friction threatens global growth. The IMF recently called for a quick resolution between the U.S. and China. It’s blamed for the continuing drop in bond yields, with some investors openly contemplating whether the U.S. could soon join other developed country sovereign debt with negative interest rates.
Stocks Offer Bond Investors an Opening
Fed Ponders Multiple Uncertainties
Ten year U.S. treasury yields are low by most measures at 2.05%, but they’re the highest in the G7, and even higher than Greece’s. The President has criticized Fed policy as creating unnecessary headwinds to the economic boom his policies have created.
Brexit Meets the Shale Revolution
Still Fearing Another Financial Crisis
Real Returns On Bonds Are Gone
Texas Reconsiders Flaring
Nothing exemplifies America’s low natural gas prices more than its flaring where takeaway infrastructure is inadequate. In the Permian basin in West Texas and New Mexico, from where most of the growth in crude production originates, associated natural gas is more often a disposal problem, like wastewater.