Figuring and Fretting Over Obama's Next Move

 | Nov 15, 2012 | 6:58 PM EST
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It's like a disease. It starts with regular common stocks. Then it extends to master limited partnerships and now the junk bond funds have caught it. The sell disease. It feels right now that it can't be cured and we just want to stay inside and avoid it. But the only way to get inside is to SELL FIRST!

We all see the degradation in the common. That's plain enough to see with six out of seven down days. But have you seen these master limited partnerships? We own Energy Transfer Partners LP (ETP) for the charitable trust and it caught three different huge upgrades this week and the stock is down for heaven's sake.

What's causing it?

First, these companies need capital and it is almost as if the junk bond spigot that they tap into has gone dry. When you look at the declines in the publicly traded junk bonds you can only wonder whether there is any capital at all for high-yield right now.

Second, nobody wants a secondary right now but many of these companies pay their bills with equity. So the deals get sprung and even though they might be in the hole, like the deal MarkWest Energy (MWE) did the other day, they can't seem to get their sea legs. The 8.5 million shares sold at $46.50 seem like they are all for sale!

Which brings me to still one more fiscal cliff issue. There is no doubt in my mind that people are sizing up the tax breaks of the mlps and thinking they have to go come 2013. Others are figuring out or are fretting that President Obama is going to slam on a carbon tax and make exploration for oil so much more expensive.

Whatever, the chaos is palpable perhaps because it is impossible to have conviction in what you own because what you own is secondary to what is unfolding in Washington. And Washington simply makes you want to do one thing: sell.

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