Is Kinder Morgan The Next Enron/Bear Stearns?

I’m not saying that Kinder Morgan is a bundle of fraud, like Enron, and I’m not saying that KMI is about to impale itself on subprime mortgages, like Bear Stearns, but this graph is almost identical the graphs of Enron and Bear Stearns before they they went belly-up:

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A stock does not have the chart pattern because it’s being attacked by short-sellers. It has the price pattern because there is something extraordinarily wrong with the business model and/or the balance sheet.

KMI has $40 billion in debt on top of $35 billion of stated book value.  That book value in no way can possible reflect the plunge in the price of oil.  KMI’s asset values have to be written down to some degree, at the very least.  There’s is something else going on.  I recommend getting out this stock ASAP.  I may be wrong, but it’s not worth taking the risk on a stock with a graph that looks like that.

2 thoughts on “Is Kinder Morgan The Next Enron/Bear Stearns?

  1. So far, I’ve been amazed that there hasn’t been a large number of dead bodies floating to the surface for all to see. This commodity collapse can only be described as epic. In the past, ZH has published a number of posts discussing intricate shadow banking financing in China, using commodities (particularly copper) as collateral. With the collapse of copper, these deals must have gone tits-up a long time ago.

    You’d think by now that the shadow banking system, using enormous leverage, and utilizing the same collateral multiple time over, must be imploding. The fact is, there is no good, unencumbered, collateral left, period. And the Fed wants to remove even more by reverse repos so they can move interest rates up a measly .25%.? Good luck with that.

    As an aside, I’d recommend that new hires, showing up for work at the Fed, wear a hard hat – I’ve heard they like to ensure retarded thinking (Keynesianism) by drilling a hole in your head, sucking out your brains, and filling it full of shit.

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