Global Economy Bursting?

[Randolph Kinney]

California Gas Stations Begin to Shut on Record-High Spot Prices

http://www.businessweek.com/news/20...ions-begin-to-shut-on-record-high-spot-prices

Gasoline station owners in the Los Angeles area including Costco Wholesale Corp. (COST) are beginning to shut pumps because of supply shortages that have driven wholesale fuel prices to record highs.

 

[Terrel L. Shields]

The fires in the refineries created the shortage, it was predicted weeks ago. To get the plants back up every vacant vessel has to be purged of the fumes and those fumes flared off. That could take days or weeks.

The real problem is that California has its own special blend. No refinery in the U. S. not specifically set up to run California blended gasolines can provide that fuel to them. The rest of the nation is awash in supply as the latest number indicate.

This is basically a California only problem. It is a problem the greenies in CA created for themselves....look on the bright side. Maybe more people will buy those Chevy Volts now since they have so many of them. Remember GM cut the price and Uncle Sam is subsidizing the purchase of same.

 

[Couch Potato]

Countrywide: It's baaack

http://finance.fortune.cnn.com/2012/10/02/countrywide-is-back-pennymac/

The Federal Reserve's recent decision to buy mortgage bonds until the economy recovers has made home lending more attractive than it has been in years. The spread between what it costs to fund a mortgage loan and what borrowers actually pay is nearly three times as large as usual. So it's perhaps no surprise that one of the first firms to rush into this profit-filled fun house is headed by the former executives of the most notorious subprime lender of the era that led to the financial crisis.

Last month, PennyMac (PMT), a finance company run almost entirely by alumni of Countrywide Financial, opened its first retail branch. The company expects to hire as many as 100 employees for the office, which is in Pasadena, California, including loan officers and underwriters.

"There's free money on the table and you don't have to work that hard to get it, especially if you are the former executives of Countrywide," says Michael Widner.

PennyMac's stated business plan was to buy up delinquent mortgage loans on the cheap, offer modifications and make some money in the process.

In the past year, though, PennyMac has morphed into something that more resembles Countrywide. The company's unit that finances new mortgage loans made by outside brokers and small banks was launched a year ago, and now accounts for about a third of the company's profits.

PennyMac's odd corporate structure has worried some Wall Street analysts. PennyMac runs a public mortgage REIT, but not all of the company's business and profits go to the REIT. Shares of the REIT have risen nearly 50% in the past year. It doesn't hurt that PennyMac has a 9.3% dividend yield at a time when investment income is hard to come by.

PennyMac has funded over $9 billion in mortgages this year, up from less than $1 billion in 2011. Executives say they hope to be on pace to finance $30 billion in mortgage loans next year. That would make the PennyMac the 12th largest mortgage lender in the country, according to trade publication Inside Mortgage Finance.

That'a the thing about a good scam. You can run it over and over to make all the money you want.:new_all_coholic:

 

[Terrel L. Shields]

That'a the thing about a good scam. You can run it over and over to make all the money you want

Gee, maybe they can get little Mikey Perry to join and bring up so old IndyMac folks to join them...maybe Mozilo will come out of retirement....a little chump change for his retirement.

 

[JSmith43]

Did anyone notice if the Bureau of Labor Statistics had an ad in the Jobs forum for appraisers?

Wanted, part time skippy position for job survey. Great pay through Nov. 6.

 

[Randolph Kinney]

California Refiners Ration Gasoline as Prices Near Record

Exxon Mobil Corp. (XOM) and Valero Energy Corp. (VLO) are rationing gasoline deliveries to customers in California as refinery halts cut into the state’s supplies, driving pump prices toward record highs.

Valero stopped spot sales in southern California and is allocating the rest of its deliveries to customers. Exxon is also rationing to buyers at West Coast terminals. Retail prices in the state jumped to an average $4.486 a gallon, according to data published today by AAA, the nation’s biggest motoring organization.

California’s gasoline markets are particularly susceptible to refinery outages because the state is mostly cut off from oil-products pipelines spanning the rest of the country, according to the U.S. Energy Information Administration. The latest shortage forced retailers in the Los Angeles-area, including Costco (COST) Wholesale Corp., to run out of supplies, shut pumps and, in some cases, charge their highest prices ever.

“We’re really sort of shell-shocked,” said Tom Robinson, president of Santa Clara, California-based Robinson Oil Corp., which operates 34 Rotten Robbie convenience stores. “If you’ve been in California long enough, you know how volatile our market can be. But to see prices go up $1 a gallon since Monday -- I’ve never seen that before.”

 

[Restrain]

New BLS unemployment figures out showing 7.8% unemployment. They got there by counting part-time jobs and reducing the labor force. Hard figures show a U_6 at 14.6% and a labor participation below 64%, a level not seen since the Carter Administration.

 

[Terrel L. Shields]

Some California stations ran out because they couldn't find unbranded gasoline (spot market gasoline). Valero and Exxon are going to supply their own franchises first, then their contracted ones, so the shortage is only in the unbranded fuel which typically is the cheapest. It is now the most expensive.

While it will work itself out in the next week or two, the real problem is government regulations which are totally inflexible in the state.

 

[gregb]

Excuse in local media is that an Exxon refinery in Torrance was down due to lack of electrical power.

 

[Terrel L. Shields]

I believe they did have a problem with the power. But the real problem is that this is the time of the year that California mandates the WINTER blend of gas for the refiners which is not simply pouring a can of STP in the refiner stack.

So the crunch hits at the wrong time, the state mandates they convert over, and you get what you get. It will straighten out but the solution is to abolish the "boutique" gasolines from California and then you can import gasoline from across the state line.