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Subject:  Re: first linn now KMP,KMR,KMI Date:  9/6/2013  5:23 PM
Author:  JustMee01 Number:  16026 of 25354


You wrote:

Spreads look low right now compared to 2008-2009.

Do you mean KMP yield spreads to Treasuries? Yes, they are below 2008-9 peaks, but they are still above normal levels. Its also wider than peers like EPD, PAA and MMP.

As far as 2008-9 collapsing MLPs, they certainly did feel significant pain. But what didn't? KMP fell 30% in the crash and 20% as the bubble burst. Neither are catastrophic from my perspective given their economic context.

In contrast, through 2 short year-long stretches of rising rates in the 2000s, losses were actually just as bad as during those corrections. Those were both 1%ish moves on the 10 year. The 10-yr right now is flirting with 3% and who knows how far it will push up after close to half of decade of manipulation. It's rising rates that worry me more than market corrections with KMP.

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