i just cant get too enthused about the short side.  why did cash go out trading +5 for a weekend when there was zero power gen demand.  the easy answer is that pipes were short and everybody playing catchup from this week.  fine.  what's it going to trade next week.  the gas daily swap implies flat, but it's lagged the actual spread all month.  i think cash surprises by trading positive next week with no power gen.  this market is not trading like we run out of injection space.  so either the market is wrong (maybe but a dangerous assumption to make) or I don't see why sep is so overvalued relative to the rest of the curve.  you can certainly argue that the winter and cal 2 are too high, but those certainly don't seem to be going down very fast.  march is off 8 cents since jun 29.  so if the market wants to say that march is worth 354, then why is sep too high at 298?

 -----Original Message-----
From: 	"Lafontaine, Steve" <steve.lafontaine@bankofamerica.com>@ENRON [mailto:IMCEANOTES-+22Lafontaine+2C+20Steve+22+20+3Csteve+2Elafontaine+40bankofamerica+2Ecom+3E+40ENRON@ENRON.com] 
Sent:	Friday, August 10, 2001 6:54 AM
To:	Arnold, John
Subject:	RE: HEY JOHNNY

timing-i think if we come in monday and normal weather actually shows up
they wack this thing

-----Original Message-----
From: John.Arnold@enron.com [mailto:John.Arnold@enron.com]
Sent: Thursday, August 09, 2001 7:48 PM
To: LaFontaine, Steve
Subject: RE: HEY JOHNNY


sorry sorry sorry:
things back to normal around here, which unfortunately is boring.  tired of
my apartment, tired of my girlfriends, a few more weeks like this and I'll
be tired of my job.  need something to juice up my life.  vacation was
good.  took a few days in belize to get certified for scuba.  very cool.
then a weeklong finance class at wharton.  good to learn something new for
a change.

very few views of the market here.  not sure that all the bearishness is
not already built into the market.  problem is the bearish sentiment is
still tremendously pervasive.  everybody, everybody, everybody, is short
but wants a rally to 315 to sell more.  just not sure what the downside
target is.  cash isnt behaving like we're gonna run out of injection space
in october.  if i owned a proprietary storage field and thought we'd
approach shut-ins in late oct and be at a much lower level, i either would
not inject now or better yet, i'd withdraw now to have room for all that $2
gas later.  but hell, the cash market is trading over prompt.  not just
because it's hot, it's been doing so for about 3 weeks now.  thus i could,
in fact the storage economics tell me i should, withdraw gas or definitely
not inject so i could have flexibility later.  something doesnt add up.
the spec market is convinced we're going to shut in but the phys market is
not telling the same story.  so let's assume we're not at shut-ins or have
trouble placing gas in october.  is the market overpriced?  don't think it
necessarily is considering the winter will have a risk premium associated
with it regardless of the fundamentals after last winter until we get the
first weather forecast of the winter.  i think we could stay at this price
level for a while and then have the next move down late oct early nov when
people try to withdraw gas and nobody wants it.  i think it was in 99 when
the first 3 weeks of nov were injection.  can you imagine going into dec
with 3.15?   but if there is injection capabililty through oct 31, and the
winter is going to stay relatively high due to risk premium, how far are
the storage spreads going to widen?


 biggest position right now is short jv and short a ton of u vol.
producers are waiting for any move up in cal 2 to give it a spanking.
falling back in love with longer term gas though.  think 2/3 and 2/4
spreads are golden.

thoughts?

-----Original Message-----
From: "Lafontaine, Steve" <steve.lafontaine@bankofamerica.com>@ENRON
Sent: Fri 8/3/2001 2:42 PM
To: jarnold@enron.com
Cc:
Subject: HEY JOHNNY



   how it goes my man. its all good here. finally getting settled into my

   personal life-got the family moved ,in the new house etc. john paul was
   up

   this past weekend and he came over to my place to sy hi. good guy-has a
   cool

   chic.ive been meaning to email you but as always busy as hell. i had
   dinner

   with bo collins last nite and a few cocktails-funny to see him changing

   roles. i enjoy talking to him but hes being quite the diplomat now.
   seems

   the new role fits him actually and he seems to be enjoying it.still hard
   for

   me to believe hes not gonna miss trading.

       hows business/life and the vaca? what are your thos ont he mkt?

      demand has come back a great deal but im not sure its gonna
   help-maybe

   too little too late. ive been trading this a little mroe actively now
   that

   the mkts been leaning mosrtly one say but fortuntely sold early in the
   week

   on the rally before the aga-and after.biggest problem for muchlower
   prices

   in the short term is it seems now the whole mkt has the same supply and

   demand view. but if we can believe that production is up 3% which seems
   to

   be the implication we'll have no problm moving about 3.1 tcf(3.2 basis

   doe).economic growth will be at best flat to last year thru 2001 and i'd
   say

   that means the winter will struggle to get much bullishness--ie our
   biggest

   concievable draw would be in the order of 2.2 tcf-leaves us around 1 tcf
   end

   march, hard to get too excited about that. sprds? not much of clue-i
   tend to

   think inverses cont to errode like feb/apr-but maybe not until mkt gives
   up

   on winter. prepensity for us to stay contango maybe accelerates.that
   this

   year.

      you think we get to shut in levels? since so much prod growth appears
   to

   be from independents does that raise the avg shut in value from say 1.60
   to

   $2.00 or higher??

       anyway-be cool,hope all is well. enjoy the weekend. are you going to
   be

   in NYC anytime soon?






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