Warren, How Could You Let This Happen?

I'm pretty disappointed in one of my favorite business icons, Warren Buffett.  He's putting out plenty of spin right now to let the public really know that he had reservations all along about David Sokol's financial interests.  He's been around long enough to know how to play this game.  He must never have thought he'd have to play it himself.

Mr. Buffett has long bragged about how thoroughly he conducts due diligence before making an acquisition.  He's been doing that so long that he probably has shorthand rules and heuristics that help him focus on the value of a good deal.  The problem with old habits is that they can breed laziness, especially when they allow you to develop blind spots in your inner circle.  Trust is the ultimate shortcut.  When you trust someone, you tend not to second-guess their agenda or even look into their recent past.  

Warren Buffett trusted David Sokol and was betrayed.  Here's hoping the Oracle of Omaha doesn't wait too long to find another heir apparent.  I'm certainly available to fill those shoes if needed. 

Full disclosure:  No position in Berkshire Hathaway. 

The Haiku of Finance for 04/29/11

Reverse of empires
Chinese yuan hits a high
Dollar takes a drop

Kirby Beats On All Counts

Kirby Corporation (KEX) has hit its numbers out of the park this quarter.  They've beaten expectations on EPS and have raised their earnings guidance for the rest of 2011.  The high price of oil may be a factor in pushing up earnings for this oil products carrier, but a stronger factor may be Kirby's overwhelming dominance of Mississippi River barge traffic. 

KEX's surging share price gives it a strong currency it can use for all-stock acquisitions if it wishes.  This one bears watching for the right entry point. 

Full disclosure:  No position in KEX. 

Kinder Morgan And The Smart Transportation Of Ethanol

It's nice to see common sense in the energy industry, where there is often very little margin for error (just ask BP and Transocean).  Kinder Morgan Energy Partners (KMP) does ethanol transport the right way.  Railcars take it to ports, with a small amount of proprietary pipeline for the last hurdle.  Minimizing the distance ethanol must travel by pipeline is crucial given its propensity for water solubility and pipeline corrosion.  Kinder Morgan has had a handle on those problems for some time now. 
Ethanol is part of America's energy future provided its feedstocks are grown organically.  That's the only way it can have a positive EROEI.  The entire energy sector is well aware of the challenges posed by transporting ethanol, but it's good to see at least one company showing leadership in developing a transport approach that makes sense. 

Full disclosure:  no positions in BP, RIG, or KMP.

Please, No More Oil Subsidies At All

Washington is slowly drifting toward fiscal sanity, more by accident than by design.  There is now semi-serious talk of curtailing or eliminating subsidies to the oil exploration industry.  The gentle defense of tax credits for small explorers is disingenuous.  Small explorers who hit a big find would immediately achieve a size that makes them ineligible for such an oil depletion allowance, so such a distinction could easily disincentivize smaller explorers. 

The simple economic fact is that only one incentive matters to oil explorers:  the market price of oil.  America would be better off getting rid of the oil depletion allowance in its entirety.  This would effectively "bunker" America's remaining high-cost oil resources until the market needs them.  It would also immediately make renewable energy more cost-competitive.  Sanity awaits.  It's ours for the taking. 

Latin American Minerals Goes Gold Digging

Latin American Minerals is a long-shot exploratory gold play.  It's drilling for gold and other minerals in fairly unexplored areas in Paraguay and Argentina that bear geological similarities to producing properties elsewhere.  Several of their top execs have exploratory experience, which is of course nice to have in an exploration-focused company. 

Photos of the company's Paso Yobai site look interesting from an exploration standpoint, but profitable extraction is of course another story.  Visible gold mineralization at the surface implies heap leaching will meet with success, provided local environmental considerations are amenable. 

The hard part to review here is the paucity of financial data.  A company that's been active since 2003 should have some financial results as well as geological results.  Searching Yahoo Finance and Reuters reveals no financial data or even analyst coverage.  Shareholders can only hope that LAM.V shows enough exploratory promise to interest a major producer someday. 

Full disclosure:  No position in LAT.V at this time. 

YRCW Creditors Prepare For Bad News In April

YRC Worldwide is really pushing its luck.  Years without profits have put it perpetually on the brink of insolvency.  Its high debt load makes it unattractive as a takeover target.  Its creditors have little choice but to accept another restructuring deal that gives them the short end of the stick, unless one of them is willing to force YRCW out of business.  A new deal will make YRCW extremely fragile if the expected dilution puts it at risk of delisting. 

The end of April will reveal which creditors will feel the worst pain.  Hey Teamsters, are your board reps ready to vote for a deal that gives you more concessions in exchange for future promises of diluted shares?  That's the kind of representation your union dues have bought. 

Full disclosure:  No position in YRCW at all, ever. 

Container Spot Rates May Show Inflationary Pressure

All other things being equal, container spot rates should reflect trade balances between seafaring trade partners.  Consumer spending should feed demand for imported goods and drive shipping rates up.  With the American consumer flat on his back, you'd expect demand for finished goods from Asia to slacken.  The problem is that the Drewry Trans-Pacific spot rate for containers went up 6% this week.  How much of that is due to increased costs isn't clear, but it would be fruitful to examine whether commodity inflation (esp. in energy prices) is now showing up in transportation costs. 

The index only captures a small minority of the Pacific's traffic, but signs abound that other shippers need to cover increased costs.  Carriers are hiking their rates all across Far East lines.  Hanjin explicitly states that it must hike rates to cover increasing costs.  Things could get ugly for American consumers over the summer if retailers have to eat these costs. 

Nota bene:  No positions in any companies referenced in this post.

The Limerick of Finance for 04/24/11

The global recovery is doomed
The West's economies are marooned
They're not going to grow
Future growth will be low
Thanks to debt levels that have ballooned

Hedge Funds Back To Taking Dumb Money In Overvalued Market

It must be great to be a hedge fund manager. You can lever up at rock-bottom rates thanks to ZIRP and reinvent yourself in a brand new guise no matter how many times you've crashed.

Never mind the massive fines flying for traders who sank their commodity funds.

Never mind the continuing parade of money managers indicted for running Ponzi schemes.

Never mind the hedge fund managers who continue to trade even after they're convicted of money laundering. 

Despite these and more systemic problems, new hedge funds launched at breakneck pace in 2010.  Accredited investors with more money than smarts show a never-ending willingness to entrust poor-performing money managers with even more money.  People who should know better are too credulous for words.  Specialists in behavioral finance need to research this phenomenon.  I suspect Bayes' Theorem comes into play.  Go look that one up. 

Shameless Labor Activists Plan To Harrass Port Employers

Port operators and managers have enough to deal with - environmental requirements for truck emissions, chassis parking and storage, security inspections, and other stuff.  They certainly do not need the headaches of harassment from anti-business union activists.  That's precisely what they'll face if a local union goes through with its plan for a protest at the headquarters of the Pacific Maritime Association.

The union might have a case if the protest were related to work rules, safety violations, pay negotiations, and other things that unions hold out to their members as justification for paying dues.  This protest is radically different from the norm.  It's about a court decision that prevented a one-day union walkout at Bay Area ports to express solidarity with greedy public sector employees in Wisconsin. 

Port union leaders have lost their minds.  They are blind to the frustration taxpaying Americans feel with public employee unions that demand endless pay and benefits for less performance.  Behavior like this by port workers makes America less competitive.  China and India are laughing at America for tolerating union stunts like this one. 

New Comment Policy For Alfidi Capital Blog: No Comments At All

I've reviewed the comments some of my readers have posted over the years and I've decided that enabling comments on this blog is more trouble than it's worth.  Many of the people leaving comments have engaged in juvenile, defamatory insults that contribute nothing of substance.  Other comments are just mindless spam.  I have disabled the comment feature for this blog and deleted all previous comments.  I have taken this action to maintain the professional quality of this blog. 

This is my blog and I make the rules.  There will be no more comments here at all. 

Gold Action Breaking Above $1500 Today

Gold is on the move . . . to price levels far higher than we've ever seen in modern times.  It's helped by zero interest rates in the U.S. that make bonds unattractive and force risky equities to become far riskier in response. 

Investors who seek to partake in serious gold action must proceed with caution when selecting a vehicle.  Search the web on GLD and you'll find plenty of questions about whether there's really gold or paper in there.  I can't blame the University of Texas for safeguarding $1B in physical gold with a custodian.  IMHO the safest place for gold is in mining companies' recoverable ore; it's pretty hard to fake it or steal it. 

Full disclosure:  Long GDX with covered calls.

Americans Want National Bankruptcy

The S&P has blasted its alarm in America's debt-ridden face and our citizens are responding as expected.  They want the deficit cut but don't want to cut the unfunded middle-class entitlements that are doing the most fiscal damage.  That would have been funny twenty years ago when we could afford deficit spending.  It's not funny anymore.  We've become addicted getting more from the government in cash than we pay in taxes. 

The public education system has done a wonderful job of preparing us all to handle budget math.  The consequences of this preparation will become apparent when the bond market forces our country into receivership.  The drama over whether federal spending hits the debt limit next week is a sideshow.  Washington will raise that limit and then the S&P's competitor rating agencies will start planning their own outlook downgrades (if they haven't written them already, just waiting to time the release). 

My fellow Americans are asking for everything and will get nothing - except economic pain.   

Debt-Based Malaise Creeps Up On America

It didn't take long at all for the S&P's downgrade of the U.S. debt outlook to creep into our zeitgeist.  The stock market fell yesterday in response.  That was the warm-up for whatever awaits the end of the Fed's quantitative easing policy.  Fears about sovereign debt haven't left Europe either, driving up yields over there. 

Joe Six Pack is now getting queasy about his government's profligacy.  Voters don't think either party has the chops to solve America's economic woes.  That won't stop them from voting for one of those parties in 2012 but it's nice to see some honesty leak out every once in a while.  JSP will have even more to worry about once he learns that U.S.-based multinationals continue to move American jobs abroad. 

Man, things aren't looking so good anywhere.  It's time for a stiff drink. 

The Haiku of Finance for 04/18/11

U.S. debt outlook
S&P:  "Watch out below!"
Rating gonna slide

Those Wild And Crazy Peak Oil Contingencies and Indicators

Spiking oil prices are a walk in the park compared to what America's Joe Six Packs will be smacked with if Peak Oil turns out to be real.  Tune in here for a sneak preview. 

Peak Oil may be hard to time precisely but its precursors are numerous.  The Saudis say they're cutting back production due to oversupply.  It's true that recent surges in the prices of energy and other commodities are primarily due to the Fed's quantitative easing, with all those excess trading dollars from money-center banks needing release somewhere.  It still gives us a good image of what will happen when Saudi Arabia finally concedes that it can't increase production even if it wants to once its fields pass their peaks. 

China's quest for the emerging world's resources has now prompted countermoves from Uncle Sam.  The U.S. wants to subsidize the expansion of a Colombian oil refinery.  There should have been a quid pro quo, like a requirement to sell the refinery's products to American distributors.  So where's that deal?  Did we not think this through?  China's going to be the only player left standing if we don't step up our game. 

Presidential wanna-be Donald Trump lets it be known that his ego is a suitable substitute for good judgment and international law.  He wants to seize oilfields in Iraq and Libya.  I hope he's the first one to volunteer for military service if he doesn't get elected.  If he thinks it doesn't take hundreds of thousands of troops to guard Iraqi oil infrastructure then he's welcome to go and find out firsthand just what level of security that requires.  That kind of ignorant, irresponsible, inflammatory rhetoric will become more common in America once our middle class realizes it has been permanently priced out of motoring at will.  It will be an unfortunate day if such rhetoric is taken seriously enough to elect its sponsors. 

Updating The Alpha-D For April 2011

This month's updates after options expiration weekend were easy once again.  My FXI shares were exercised away when they went through their covered calls' strike price, so I bought almost all of them back in a wash sale and let some go to capture a long-term capital gain.  I renewed my covered calls on what remained.

I also renewed my covered calls on the shares of TDW and GDX in my taxable account.  The GDX shares I hold in my IRA were exercised away; like FXI, I let some go and repurchased the rest (with renewed covered calls).

I continue to hold ATHR with covered calls and cash-covered short puts in anticipation that its merger will be completed as planned. 

I am still long some California muni bonds that will mature in a few months.  I will not buy any more this month.  The S&P outlook warning on U.S. government debt that came out today is an admission that debt levels are unsustainable. I expect interest rates to rise at some point, maybe sooner than we'd all like. 

I hope the rest of you filed your income tax returns by today.  My covered call writing (as described above) provided a big chunk of my capital gains in 2010.  Happy Tax Day, America.

The Limerick of Finance for 04/17/11

The debt limit will soon be raised
And the bond market will be amazed
Bond buyers will run
Debt default won't be fun
Citizens ignore this, they're unfazed

The Haiku of Finance for 04/16/11

Global finance talk
"Yes, we really must act now"
Nothing will be done

The Haiku of Finance for 04/15/11

China growth still hot
Inflation coming up fast
Which one will break first?

Algae Biofuels' Promise Deserves Serious Scrutiny

The green energy revolution was supposed to have arrived by now.  That's what we were promised back in the 1970s or so by the Whole Earth Catalog and other friends of sustainable development.  Renewable energy gets sidetracked whenever wishful thinking and pipe dreams distract public policymakers from the most promising technologies.  Algae-based biofuels may or may not be one of those promising technologies, depending on where and how it's produced.

Mainstream scientific thought endorses algae-based biofuels but with realistic expectations.  People who've done the math know that replacing a small portion of America's liquid fuel would require devoting enormous amounts of farmland to algae crops with very low yields.  This does not mean algae-based biofuel should never be produced under any circumstances.  It means there is a niche somewhere for limited production that doesn't crowd out food crops.  Seaweed-based biofuel may avoid a food vs. energy tradeoff.

People who haven't done research take the easy way out and seek government subsidies.  The algae-fuel industry is pushing for federal tax incentives that will put it on the same footing as the ethanol industry.  That is very premature and probably a poor use of public money.  Ethanol is a controversial energy source because it does not always produce a positive EROEI.  Factoring in energy used in fertiliser added to crops gives ethanol a negative EROEI.  Growing it organically gives it a positive EROEI but, like all things organic, limits the yield.  Algae-based fuel must not fall into the same trap if it is to be viable. 

Full disclosure:  No investments in biofuel companies at this time. 

Geothermal Looking Good In 2011 (Maybe)

Industries always tout their health, but I pay attention to touting in an industry I like.  The Geothermal Energy Association released its annual report featuring greenfield development in the Western U.S.  It's hard to find a good way to invest in geothermal players.  They're either big but underperfoming like Ormat Technologies (ORA) or small and risky like U.S. Geothermal (HTM) and Nevada Geothermal Power (NGLPF.OB).  The sector bears watching but something extraordinary will have to happen to give it powerful growth.  Black swans like a sharp rise in prices for coal or natural gas would make other baseload energy sources look great. 

Full disclosure:  No positions in companies mentioned above. 

IMF Says US Headed For Deficit Trouble

This should elicit groans from credit analysts at the major rating agencies who will now be asked by their supervisors if they've factored enough outliers into their rating models.  The IMF has a new warning out about U.S. budget deficits:

The U.S. shortfall will reach 10.8 percent of gross domestic product this year, ahead of Japan and the U.K., the Washington-based agency said in a report released today. It estimates that President Barack Obama will need to cut the deficit by 5 percentage points of GDP in the next two fiscal years, the largest adjustment in “at least half a century,” to meet his pledge of halving it by the end of his four-year term.

Let's not forget that Congress is the other half of any potential deficit-cutting partnership.  Both sides will be hard-pressed to come up with a more substantial path to balanced budgets given the difficulty they had reaching an agreement last week.  Substantial deficit cuts will of course destroy the phony economic recovery and bring on the second leg of a long-overdue depression. 

Hey America, have you noticed that some banks like JPM are doing exceptionally well while your own disposable incomes have stagnated?  Don't forget that GS is getting another public tongue-lashing from the same class of people who take its campaign contributions in exchange for no real change.  The phony recovery benefited Wall Street and you paid for it with TARP and toothless new regulations.  I just thought you'd like to know. 

Full disclosure:  No position in JPM or GS at this time. 

Rail Making Waves On Land

Rail's resurgence is evidence for some recovery given rail traffic's usefulness as a leading indicator.  Railcar owners are putting more idle cars into service from their unused fleets in anticipation of more orders.  RailAmerica thinks it can get more mileage out of short-haul rail lines in Alabama, although the interfaces with CSX now make RailAmerica more dependent on a much larger carrier.  Even rail container traffic in Russia is seeing good times.  Rail looks a lot more attractive than its main competitor - trucking - with diesel costs rising across the U.S.  What could go wrong with this rosy rail picture? 

Macroeconomic black swans could derail this surge, at least in the U.S.  IMF predictions of minimally stable growth are probably too optimistic in the midst of a double-dip in housing.  Massive spending cuts needed to bring the U.S. federal deficit down have yet to be made.  Rail's surging volume may be a mere echo of the asset inflation pumping the stock market. 

Full disclosure:  No positions in any rail stocks at this time. 

YRCW Just Couldn't Keep Up With The Pack In 2010

LTL truckers had mostly good results in 2010, growing revenue by 9.4%.  One notable exception was YRCW, which saw its revenue decline by 11%.  All those fat union behinds cost more to haul around.  Those losers will really get a run for their money now that the FMCSA is ready to approve its pilot program for Mexican truckers to operate north of the border.  A little competition is great for those truckers who can handle it and not so great for union drivers who abhor competition. 

Speaking of competition, trucking schools are enrolling huge numbers of potential drivers.  Driving a truck isn't so difficult after all if so many people can learn to do it so quickly.  That's great news for carriers and not so great for union drivers who think their limited skills are indispensable. 

Speaking of driving skill, trucking's safety record is better than ever in 2011, with the fatality rate down by 14.1% from last year.  There's a hidden factor behind those statistics besides better training, supervision, and regulation.  That hidden factor is the declining number of union drivers on the road along with fewer union workers in general.  Fewer incompetent drivers steering big rigs means safer roads for the rest of us. 

These are all welcome trends and positive developments.  Today is a day to celebrate good news!  :-)

Full disclosure:  No position in YRCW at this time. 

The Limerick of Finance for 04/10/11

It's time to mine U.S. tar sands
Available in widely known bands
It's there to be had
We should all be so glad
We don't have to dig with our hands

The Haiku of Finance for 04/09/11

No shutdown this time
Parties agreed on some cuts
Problem solved?  No way

No Federal Shutdown After All

Well, how do you like them apples?  The mandarins of Versailles-on-the-Potomac took a tiny step toward fiscal sanity today:

Perilously close to a government shutdown, President Barack Obama and congressional leaders reached a historic agreement late Friday night to cut about $38 billion in spending and avert the first federal closure in 15 years.

The heavy lifting can wait for another day.  Let's face it, when you've been binging on junk food (deficit spending) for three decades and you're 400 pounds overweight (unfunded middle class entitlements), the first time you refuse to overeat can take the wind right out of you.  That $38B is about 2.3% of the $1.65T deficit for FY2011, so at this rate of cutting we'll have the deficit zeroed out in 43 years or so.  The wave of Baby Boomer retirees will crest long before then, so this overweight patient's heart attack (from a bond market meltdown) is still a foreseeable near-term event. 

Mall Vacancies At Dot-Com Crash Levels

Check out just how badly commercial real estate is faring in this so-called recovery:

Mall vacancies hit their highest level in at least 11 years in the first quarter, new figures from real-estate research company Reis Inc. showed. In the top 80 U.S. markets, the average vacancy rate was 9.1%, up from 8.7%.

I guess all of those job seekers who've left the workforce (according to the government's figures citing an "improving" job picture) shouldn't waste time sending resumes to mini-mall owners.  The U.S. hasn't seen vacancy rates like those since the dot-com recession of 2000-2002 or so.  Developers built too many mini-malls in unsustainable exurban areas that will someday be farmland again. 

This kind of market is terrific for investors seeking bargain properties but horrible for mortgage note investors.  Note holders will be left holding the bag if mall owners default.  PIMCO doesn't agree and intends to launch a REIT focused on CMBS.  That may be the wrong move in this environment.  Instead of throwing my money at PIMCO, I'd rather watch the foreclosure listings in my area to see if any desirable properties are coming up for auction. 

Nota bene:  No positions in real estate or PIMCO products at this time. 

Possible Oil Price Spike Should Prompt Cheaper Transport

It just doesn't get any clearer than this. When Saudi Arabia's former oil minister says potential unrest in his country can lead to a serious oil supply shock, even casual observers should realize that the global economy is on thin ice.  Pursuing new hydrocarbon production can help mitigate supply shocks, and oil producers recognize the potential for unconventional oil sources to add to their proven reserves.  Note that healthy M&A activity in the oil sector now includes a big dose of unconventional resource plays. 

More production isn't the only way to keep the global economy on track.  More reliance on the most energy-efficient means of cargo transport - rail and barge movement - is in order.  Federal grants to improve passenger rail lines will likely have spillover benefits for freight rail.  The U.S. DOT has a plan to make America's waterborne "highways" strong enough to accommodate more container traffic.  These efforts are absolutely critical to keeping goods moving, since the trucking industry is unable to meet the current surge in demand for new trucks to carry freight. 

Speaking of demand for transportation, here's a related observation.  The most recent Cass Freight Index shows that monthly shipping activity rose 6.9% (13.8% yoy) while monthly freight payments rose by 6.3% (33.6% yoy).  Those yearly numbers are an alarming indication that the price of transportation is increasing faster than delivered volumes.  That's inflationary!  Rising fuel costs are undoubtedly a big factor in pushing rates up, and evidence is mounting that higher fuel costs are impacting service sector growth.  More focus on energy exploration and cheaper transportation can't come fast enough. 

Full disclosure:  Long TDW with covered calls.

Nuclear Paranoia Grips West

Europe is getting slow in its old age.  Italy has unilaterally approved a one-year moratorium on the construction of new nuclear plants.  That country had a token amount of nuclear power but got spooked by Chernobyl.  The EU is getting timid too, calling for stress tests at the rest of the world's nuclear plants.  If those stress tests are anything like the tests conducted for Europe's banks, they won't mean much.

Hopefully such fears will not infect the U.S.  New nuke approvals here are inching ahead.  Meanwhile, Turkey is undaunted in its plan to build its first-ever nuke plant.  Kenya has an ambitious plan to power 90% of its energy needs with nuclear energy.  It's cool that less-developed countries see nuclear power as the key to their continued development and energy independence. 

The West needs to get over its fear of nuclear power.  The emergency in Japan will pass.  The world's need for baseload power will not. 

Nota bene:  No positions in nuclear-related companies at this time. 

The Haiku of Finance for 04/04/11

Gov shutdown looming
No agreement on spending
That's one way to cut

The Limerick of Finance for 04/03/11

Bailout aid means you don't get a raise
Your results fell far short of "amaze"
These execs hardly work
They do less than a clerk
Their paychecks have seen better days

The Haiku of Finance for 04/02/11

Dividends' big jump
No projects useful for cash
Might as well pay back

Goldman Sachs CEO Makes $14 Million More Than You

What financial services CEOs do to "earn" their ginormous compensation packages is beyond the comprehension of mere mortals.  Only those who already live on mount Olympus can truly understand the lives of fellow Olympians.  The CEO of Goldman Sachs, for example, is no garden variety globetrotter.  This titan absolutely must make at least eight figures per year, with much more waiting for him in deferred compensation, or else he won't be motivated to do whatever it is that he does. 

It takes a great deal of focus, stamina, and business acumen to keep those proprietary hedge funds churning their books several trillion times per day.  That can be exhausting just to watch, so imagine how tuckered out it makes the poor CEO who has to engineer the whole thing.  One can only marvel at the superhuman abilities of CEOs who manage to squeeze billion-dollar deals in between golf rounds and martinis.

Here's a personal note to Goldman's board.  I'll do the same amount of work for one-tenth what it's costing you to pay the current guy to run around Davos and Jackson Hole.  Feel free to fire me after a year if I can't deliver the exact same results.  You know where to reach me. 

Horizon Lines Doesn't Want You To Read This

Corporate double-speak is hilarious, especially from companies that can't take back facts they've put into the public domain.  Horizon Lines is in serious financial trouble.  They just hope you won't notice.  They really hope you'll listen to their PR spin claiming bankruptcy talk is speculation when their own financial statements project defaults this year on their convertible notes and senior credit facility. 

Exchanging debt for equity is a nice pipe dream that will put them on the same path to dilution that YRCW faces if it executes another swap of its own.  YRCW's last swap shows HRZ shareholders the kind of dilution they can expect; in YRCW's case, it was significant in December 2009.  Like that troubled trucker, HRZ will risk delisting with an equity dilution as its stock is currently trading around a buck-oh-five. 

HRZ has better options that don't require balance sheet games.  The company can sell its recently launched China route, which is no longer viable thanks to a plummeting trans-Pacific spot rate and price cuts from larger carriers.  This will signal to the maritime market that HRZ remains focused on its core competency as a Jones Act carrier, leaving the West Cost to China lanes for more experienced Asian shippers. 

HRZ isn't completely out of options yet, but its best-case scenario is gradually slipping away from renewed health and toward outcomes like forced asset sales.  The company admits its troubles in its own regulatory filings.  Read the fine print and ignore the spin. 

Full disclosure:  No positions in HRZ or YRCW. 

The Haiku of Finance for 04/01/11

Mexico's Peak Oil
Needs tech, skill, and foreign cash
Production still slides