rogermunibond

http://blog.mpettis.com/2013/11/will-debt-derail-abenomics/ Highly recommend Michael Pettis on this subject as well as China matters. Abenomics success creates problems with debt and interest servicing. Either cuts, new taxes, or asset sales would balance Tokyo's books. This is a medium term situation.

NVGS is a large mid size LPG carrier company that Wilbur Ross took out of the old Lehman. They are on a major fleet expansion. The idea is that petrochem liquids production is going to spike from NGLs in the wet gas plays as well as from increased refinery export of LPGs that are derived from the refining process. It's not cheap though.

dpetrescu - I followed NSR but not so much of late. There is a stickiness to these TLD registry contracts. NSR has bid on the .com TLD but has not been awarded. There is a tendency to favor the incumbent vendor in these things. NSR itself is dealing with a perceived slap on the wrist from its customers for the Number Portability database. The contract expires in 2015 and NSR submitted a bid that the vendors did not like. They returned it unopened. Some analysts are calling it a disaster whereas others are saying its procedural.

Can you explain this more? I've registered domain names with namecheap and godaddy, I don't think either used Verisign. Verisign operates the authoritative registry for .com and .net, so namecheap and godaddy have to go through Verisign. That's what I was wondering. In that case Verisign has an enviable position, a moat for sure! Verisign has this monopoly only through a contract with the Dept of Commerce and in their most recent contract there were limits placed on price increases for domain name registration. There's a similar company called Neustar. They've bid on the dot com registry contract in the past and hold various country TLDs and .biz registry. I think with all the various TLD registries you will see some very competitive bidding. Neustar runs the number portability database. Similarly, the telcoms aren't stupid and put in restrictions on how much price increase Neustar can pass on. So why there is a moat it's not permanent and the depth (pricing) is controlled by someone other than the company (govt).

http://www.canadianbusiness.com/companies-and-industries/forward-fast/ Pretty amazing transformation. Despite the painful staff cuts, still bears notice that there are some huge inefficiencies lurking in some large cap stocks.

These aren't the droids you're looking for. Too bad Achuthan ain't no Jedi.

uccmal - I have no dog in this fight. But my guess is that since we transport most if not all of our refined products like gasoline and diesel by truck and do it relatively safely, it is really just a matter of having the right safeguards and practices in place to make rail accidents with oil and NG products infrequent. PS adding comments about politics and the Keystone pipeline simply make my question meter go off. Maybe that was cardboard and not you.

San Bruno California gas pipeline exploded killing 8 in 2010. Qingdao China oil pipeline exploded killing 52 in 2013. Care to qualify that?

Interesting since I think the origin of the PSX stake comes from the COP shares WEB owned from back in 2007/2008.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/12/18/the-shale-gas-boom-is-saving-americans-money-but-how-much BCG study says cheap NG is saving Americans between $425 to $725 per year; with that savings estimate rising to a high of $1,217 by 2020.

I think LED candelabra bulbs are a big engineering problem (small form factor, high lumen requirement). I have some 60 watt candelabra bulbs in a dining room and it is nearly impossible to replace the lumens from 3 of those bulbs with LED or CFL. Maybe Cree has a solution to this.

http://www.businessweek.com/news/2013-12-11/berkshire-railway-names-ice-ceo-with-rose-executive-chairman-1 http://www.businesswire.com/news/home/20131211006363/en/BNSF-Railway-Announces-CEO-Executive-Chairman-Transition Carl Ice to become CEO; Matt Rose moving to executive chairman. Does this spell Rose's first step to get ready for taking on the CEO role at BRK?

Excellent article! Thanks for sharing.

The DB note and Chanos have essentially the same point w/r//t replacing reserves. That is XOM is too big to grow organically and when you rely on acquisitions you may lose your low cost producer advantage. XTO acquisition for example looks to be quite expensive in a $3-4 mcf environment. Probably this changes when LNG takeaway capacity improves in 2018-2020.

DaVita seems to be a perfect hedge for longevity and morbidity risk of retirees in pension funds. That's my guess why Ted was buying previously for his biggest hedge fund investee, WR Grace, and why he continues to buy for Berkshire and increasingly in the pension funds that Berkshire controls. It's much better than any pharma or medical device company.

http://www.sec.gov/Archives/edgar/data/1581804/000119312513430440/d622542df1a.htm Wilbur Ross owned Navigator Holdings is filing for an ipo. LPG and other NG liquid products should be busy maritime markets with lots of US and Middle East NG liquids looking for markets in Asia and Europe.

http://www.sequoiafund.com/Reports/Transcript13.pdf Always a good read from thoughtful analysts.

http://www.project-syndicate.org/commentary/the-democratic-roots-of-india-s-economic-slowdown-by-raghuram-rajan Why India Slowed 30 April 2013 NEW DELHI – For a country as poor as India, growth should be what Americans call a “no-brainer.” It is largely a matter of providing public goods: decent governance, security of life and property, and basic infrastructure like roads, bridges, ports, and power plants, as well as access to education and basic health care. Unlike many equally poor countries, India already has a strong entrepreneurial class, a reasonably large and well-educated middle class, and a number of world-class corporations that can be enlisted in the effort to provide these public goods. Why, then, has India’s GDP growth slowed so much, from nearly 10% year on year in 2010-11 to 5% today? Was annual growth of almost 8% in the decade from 2002 to 2012 an aberration? I believe that it was not, and that two important factors have come into play in the last two years. First, India probably was not fully prepared for its rapid growth in the years before the global financial crisis. For example, new factories and mines require land. But land is often held by small farmers or inhabited by tribal groups, who have neither clear and clean title nor the information and capability to deal on equal terms with a developer or corporate acquirer. Not surprisingly, farmers and tribal groups often felt exploited as savvy buyers purchased their land for a pittance and resold it for a fortune. And the compensation that poor farmers did receive did not go very far; having sold their primary means of earning income, they then faced a steep rise in the local cost of living, owing to development. In short, strong growth tests economic institutions’ capacity to cope, and India’s were found lacking. Its land titling was fragmented, the laws governing land acquisition were archaic, and the process of rezoning land for industrial use was non-transparent. India is a vibrant democracy, and, as the economic system failed the poor and the weak, the political system tried to compensate. Unlike in some other developing economies, where the rights of farmers or tribals have never stood in the way of development, in India politicians and NGOs took up their cause. Land acquisition became progressively more difficult. A similar story played out elsewhere. For example, the government’s inability to allocate resources such as mining rights or wireless spectrum in a transparent way led the courts to intervene and demand change. And, as the bureaucracy got hauled before the courts, it saw limited upside from taking decisions, despite the significant downside from not acting. As the bureaucracy retreated from helping businesses navigate India’s plethora of rules, the required permissions and clearances were no longer granted. In sum, because India’s existing economic institutions could not cope with strong growth, its political checks and balances started kicking in to prevent further damage, and growth slowed. The second reason for India’s slowdown stems from the global financial crisis. Many emerging markets that were growing strongly before the crisis responded by injecting substantial amounts of monetary and fiscal stimulus. For a while, as industrial countries recovered in 2010, this seemed like the right medicine. Emerging markets around the world enjoyed a spectacular recovery. But, as industrial countries, beset by fiscal, sovereign-debt, and banking problems, slowed once again, the fix for emerging markets turned out to be only temporary. To offset the collapse in demand from industrial countries, they had stimulated domestic demand. But domestic demand did not call for the same goods, and the goods that were locally demanded were already in short supply before the crisis. The net result was overheating – asset-price booms and inflation across the emerging world. In India, matters were aggravated by the investment slowdown that began as political opposition to unbridled development emerged. The resulting supply constraints exacerbated inflation. So, even as growth slowed, the central bank raised interest rates in order to rebalance demand and the available supply, causing the economy to slow further. To revive growth in the short run, India must improve supply, which means shifting from consumption to investment. And it must do so by creating new, transparent institutions and processes, which would limit adverse political reaction. Over the medium term, it must take an axe to the thicket of unwieldy regulations that make businesses so dependent on an agile and cooperative bureaucracy. One example of a new institution is the Cabinet Committee on Investment, which has been created to facilitate the completion of large projects. By bringing together the key ministers, the committee has coordinated and accelerated decision-making, and has already approved tens of billions of dollars in spending in its first few meetings. In addition to more investment, India needs less consumption and higher savings. The government has taken a first step by tightening its own budget and spending less, especially on distortionary subsidies. Households also need stronger incentives to increase financial savings. New fixed-income instruments, such as inflation-indexed bonds, will help. So will lower inflation, which raises real returns on bank deposits. Lower government spending, together with tight monetary policy, are contributing to greater price stability. If all goes well, India’s economy should recover and return to its recent 8% average in the next couple of years. Enormous new projects are in the works to sustain this growth. For example, the planned Delhi-Mumbai Industrial Corridor, a project with Japanese collaboration entailing more than $90 billion in investment, will link Delhi to Mumbai’s ports, covering an overall length of 1,483 kilometers (921 miles) and passing through six states. The project includes nine large industrial zones, high-speed freight lines, three ports, six airports, a six-lane expressway, and a 4,000-megawatt power plant. We have already seen a significant boost to economic activity from India’s construction of its highway system. The boost to jobs and growth from the Delhi-Mumbai Industrial Corridor, linking the country’s political and financial capitals, could be significantly greater. To the extent that democratic responses to institutional incapacity will contribute to stronger and more sustainable growth, India’s economic clouds have a silver lining. But if India’s politicians engage in point-scoring rather than institution-building, the current slowdown may portend stormy weather ahead.

Charlie's made the point before on natural gas that it is an essential feedstock for creating nitrogen fertilizers. To that point it does sound as if Charlie has been reading Grantham's work on resource shortage over the long haul.. Next 100-200 years.

Their new cfo's background would be useful less with a BRK deal and more if DVA went on a Valiant Pharma path.

Call us when things go bump in the night, not just Warren, the Kochs implore... Koch Brothers Angle for Bigger Role in Wall Street Deals By JAMES R. HAGERTY Charles Koch, shown, and brother David want Koch Industries to be considered alongside Berkshire Hathaway. . WICHITA, Kan.—The billionaire brothers Charles and David Koch get lots of attention for bankrolling conservative causes. They would like more notice for another passion: buying and developing companies. Koch Industries Inc., their closely held industrial conglomerate with annual sales of $115 billion, made a splash last month by acknowledging an interest in buying newspapers. But Koch Industries also is looking at other possible investments, particularly in energy and agriculture-related businesses. Despite the scale of their business holdings, including the makers of Lycra fibers and Angel Soft toilet tissue, the Koch brothers have long been overshadowed as deal-makers by their folksy neighbor in Omaha: Warren Buffett. "He's done a great job of having a brand that if you want to sell your business and continue to run it, come here," Charles Koch, the 77-year-old chairman and chief executive of Koch Industries, said in a rare interview at the company's brown-granite headquarters on the edge of Wichita. Another difference is that the Koch brothers, unlike Mr. Buffett, use their wealth in a high-profile way to support conservative political causes. The brothers co-founded the limited government think-tank Cato Institute. Mr. Koch said he doesn't think his political views and activity hurt Koch Industries. There are few people, he said, "who live their lives by only a political dimension as opposed to, 'I like this product, it's really satisfying my needs.'" Steve Feilmeier, chief financial officer of Koch Industries, said some sellers have made pitches to Mr. Buffett alone "because he was viewed as the only person who could write a hefty check [and] could do it very quickly." But Mr. Feilmeier said Koch Industries can do that too, and improve management of firms it acquires. Mr. Buffett didn't respond to requests for comment. Mr. Buffett made handsome profits by buying stakes in such blue chips as Goldman Sachs Group Inc. GS -0.19% and Dow Chemical Co. DOW -0.96% to shore up their balance sheets during the 2008-09 financial crisis, a Koch spokeswoman noted, adding: "Our goal would be to participate in similar transactions." "We've been actively talking to Wall Street about making sure there are at least two phone calls placed on those situations going forward, not just one," Mr. Feilmeier said. The company also does its own research on possible investments and often has more than 100 on its watch list, said Dave Robertson, chief operating officer. One reason Mr. Buffett may get more calls is that his Berkshire Hathaway Inc. BRKB -0.19% has invested in a wider variety of businesses, including financial services and retailing, areas generally shunned by Koch Industries. Berkshire also publishes its financial results, so its investment power is readily apparent. While Koch executives say they aren't chasing blockbuster deals, they insist they are bounded only by their "capabilities," not by their current array of mostly industrial assets. The U.S. oil and gas boom plays to Koch Industries' experience in moving energy through pipelines and processing crude oil. Koch executives also believe a growing world population will require heavy investments in U.S. food production. That may lead to more Koch investments in fertilizer, already a core business, and irrigation-related businesses. In the past, Koch Industries tended to buy and absorb entire companies, including the paper towel, tissue and packaging giant Georgia-Pacific in 2005 and the Stainmaster carpet-fiber business in 2004. Lately, however, Koch has been settling for minority stakes. Earlier this year, Koch agreed to buy $240 million of preferred stock in American Greetings Corp., AM -0.21% which is helping finance the card company's proposed plan to go private. In an age when it's easy—and free—to post greetings on social media, the print card business has been shrinking. A Koch spokeswoman said American Greetings is well-managed and creates value for people "who need a little extra help with just the right words." Late last year, Koch Industries paid $1.5 billion for a 44% stake in Guardian Industries Corp., the world's fourth-largest maker of glass. Koch also is preparing to help finance a new steel mill in Arkansas. Koch Industries has pursued minority investments partly because executives think the cost of buying 100% control has risen too high in many cases. "You need to go fish where the fish are," Mr. Feilmeier said, and lately that has meant reeling in minority stakes. Koch Industries executives count investments in oil refining, fertilizer and Georgia-Pacific as some of their biggest successes. They admit to failures as well, and insist they learn from those mistakes. One instructive flop was the purchase of a polyester business from Hoechst AG in 1998. Mr. Feilmeier said Koch Industries acquired dated production technology and failed to see the threat of growing competition from China. "In this case, we didn't have a clue what was going on inside China," he said. Since that "wake-up call," he added, the company has cultivated more expertise in global business trends. Though Charles Koch abhors what he considers excessive U.S. government regulation, he lists expertise in compliance as one of his company's strengths, and as a skill it can offer to firms it acquires. Koch Industries got an expensive lesson in compliance in 2000 when the U.S. Environmental Protection Agency fined it $30 million for oil spilled from pipelines and oil facilities in Texas, Oklahoma, Kansas, Missouri, Louisiana and Alabama. Many of the spills came from remote oil-gathering pipelines so small "you can't run a pig [pipeline cleaning and inspection device] through them," Mr. Koch said, "so you can't know when you're about to have corrosion, so you have leaks." Since then, he said, Koch Industries has vastly improved its environmental and safety efforts.

Yeah, that's how I read. Net whatever commission they are paying Aon. I wonder what the Markel guys think.

http://www.ft.com/intl/cms/s/0/f2d23474-e239-11e2-a7fa-00144feabdc0.html#axzz2XikbXkBW Aon deal with BH criticized by Lloyds. Sounds like an index or tracking fund of Lloyds syndicate underwriting.

CMS proposes 9.4% cut for dialysis providers By Rich Daly Posted: July 1, 2013 - 8:00 pm ET Dialysis service providers would see a 9.4% cut to their Medicare pay in 2014 under a proposed CMS update (PDF) issued late Monday. Under a provision of the last-minute fiscal deal reached on New Year's Eve, the CMS proposed recalculating payments to dialysis providers to obtain $4.9 billion in savings. Dialysis provider shares lost value in afterhours trading on word of the proposed rate cut. For instance, DaVita HealthCare Partners, the country's second-largest dialysis provider, dropped 5.5% Monday night. The new rate stems from rebasing Medicare's bundled payments to dialysis providers to bring the reimbursement in line with lower use of a costly group of anti-anemia drugs, which represent Medicare's largest drug expenditure. The current rate is based on 2007 treatment protocols, and the use of them has dropped significantly in recent years due to safety concerns. The agency compared treatment costs for end-stage renal disease in 2007 and 2012 and concluded that a $29.52 reduction in the $246.47 base rate per treatment was in order. That cut would provide a 2014 dialysis base rate of $216.95, or down 12%. That blow is mitigated somewhat by an adjusted marketbasket update of 2.5%. The proposed rule sought comments over whether the phase-in period should occur over longer than one year. In 2011, the CMS spent $10.1 billion on 365,000 beneficiaries with end-stage renal disease, according to the Government Accountability Office The legislative requirement for Medicare to change the dialysis payment—folded into the American Taxpayer Relief Act of 2012—followed a December GAO report that argued Medicare has overpaid for end-stage renal disease treatment by relying on 5-year-old drug use trends that are no longer accurate. The proposed rule also includes changes to the ESRD Quality Improvement Program, which could cost dialysis providers as much as 2% of their Medicare payments if they fail to meet performance targets. The CMS will accept comments on the proposed rule until Aug. 30.

Bravo txlaw. I'd also be more inclined to go with Bass if he was pasty faced instead of bronzer spray tanned and if he wore thick glasses like some of my heroes. Call it my cognitive bias. ;)