Monday, March 31, 2014

"Gold, silver prices trend sideways but Platinum Group Metals outperform" (PPLT; GLD)

Our mantra continues to be: "Gold to $875 and if you insist on exposure to precious buy platinum".
Not as widely known as 'Om mani padme hum', but it serves.
From Mineweb:
The gold and silver price were trending sideways in early European trading on Monday at the start of a potentially busy week. 
The spot gold price was last 95 cents lower than Friday's close at $1,292.75/1,293.55 per ounce, while sister metal silver added nine cents to $19.87/19.93. 

"Over the weekend there have few developments to move the markets but there is still unease over the situation in Ukraine and concern over the potential for defaults in China," FastMarkets analyst William Adams said. 

"Gold is still looking for support that holds - it spiked down again on Friday but found buying around $1,285 and is attempting another rebound. Silver seems to have also found some support," he added. "If support on gold is in, we would look for further bargain hunting to give the complex some lift."...MORE
Kitco spot gold $1284.20 down $10.70, spot platium $1411.00 up $5.00.
Our dirty hedge (long PPLT ETF, short GLD ETF) over the last six months, via Yahoo Finance
Chart forETFS Physical Platinum Shares (PPLT) 

"Corn futures hit $5 after US curbs supply hopes"

Top tick $5.0360, $5.0300 last.
Following up on Friday's "Ag Commodities: Ahead of Monday's Big USDA Reports, One Number to Watch".
From Agrimoney:

Corn futures rebounded to $5 a bushel for the first time since September after the US eroded ideas of ample domestic supplies of the grain, saying that inventories are a little lower than thought and that sowings will fall significantly this year. 

The US Department of Agriculture, in a much-anticipated report on domestic grain stocks as of March 1, said that inventories of corn had risen by 30% year on year to 7.01bn bushels.
However, the figure was more than 90m bushels below market expectations, with traders expecting inventories to have shown a bigger rise after last year's record harvest.

And the USDA, in a separate closely-watched report, curtailed expectations of corn harvest prospects for this year by estimating sowings at a four-year low of 91.7m acres, down some 3.7m acres year on year.
The estimate was more than 1m acres short of the figure that investors had expected.

˜Bought back some demand'
The stocks figure implied use of 3.45bn bushels of US corn during the three months to March 1, up from 2.63bn bushels a year before, when consumption was squeezed by a dearth of availability following the drought-hit 2012 harvest.

"Lower prices have bought back some demand," said Steve Kahler, chief operating officer at Teucrium Trading, the New York-based issuer of commodity exchange-traded products....MORE
And the hourly chart via FinViz:

"Climate Report Warns of Death, Flooding and Economic Loss"

Climateer predicts: The developing El Nino results in highest-in-a-century temperatures November 2014-May 2015. This will be a bit too late for the September 2014 NYC Climate Summit which, although intended to build momentum for the 2015 conclave in Paris ends up being a bit of a snoozefest.

The massive heat belch from the oceans sets the stage for a continuation of 'the pause' which turns into actual cooling when the AMO joins the PDO in its cool phase and the Sun quiets to a 'Dalton' (if not Maunder) minimum.

As we've seen, the majority of crop failures in Ukraine and Western Russia occur with the PDO cool. Wheat crop failure leads to reliance on Rye which because of the cooler (and wetter, see Finnish famine 1866-68 or Baltics 1315-1317) climate become infected with ergot leading to mass LSD-like love-ins.

As did the Moche civilization during 535-595, the weather related agricultural stress leads to the complete overturning of the social order, revulsion with and rebellion against the political class and the disappearance of an entire society.

Or Something.

From Bloomberg BusinessWeek:
It’s hard to read about climate change. By that I mean, it’s literally difficult to decipher the latest summary from the Intergovernmental Panel on Climate Change (IPCC). The IPCC  is the international body set up in 1988 to assess the evidence, impacts and future risks of climate change. Its latest report focuses on impacts, adaptation and vulnerability, a topic it would behoove us all to understand better.

The executive summary, made public today in Yokohama Japan, is a slog to read, as one might expect of a document that lists 70 “drafting authors,” but the message is pretty clear: The effects of climate change are already being felt everywhere, and no one will remain untouched. Here are five key points:
1. Climate change is already having a negative impact on wheat and corn yields. While some colder climes may benefit in higher yields as they warm, overall crop yields for wheat, rice and corn are likely to fall, and to vary more widely year to year, because of rising temperatures, even as demand rises rapidly.

2. Deaths related to heat have increased, and deaths related to cold have decreased as a result of warming. The report mentions heat-related deaths as one of the key risks for North America and Asia.

3. For North America, the other big risks highlighted in the report are: deaths, property loss and ecosystem damage from wildfires; flooding in urban areas on coasts and near rivers that will lead to property and infrastructure damage; and lower water quality related to a rise in sea levels, extreme precipitation and cyclones.

4. Fisheries are likely to get redistributed as the oceans warm. Tropical countries are expected to experience a drop in catches, hurting food security, income and employment in affected countries. The worst hit areas, clustered around the equator and also in polar regions, could see a decline in catch potential of more than 50 percent from 2051 to 2060, compared with the period from 2001 to 2010....MUCH MORE
You'll note our forecast is falsifiable within a decade, most folks alive right now will know whether it comes to pass or not.
Exactly what they teach you not to do in junior prognosticator school.
Here are the Moche in our April 2008 post "Food Riot Watch: Haiti. Just Wait for the Moche Climate*":
*From Wikipedia:

...There are several theories as to what caused the demise of the Moche political structure. Some scholars have emphasised the role of environmental change. Studies of ice cores drilled from glaciers in the Andes reveal climatic events between 536 to 594 AD, possibly a super El Niño, that resulted in 30 years of intense rain and flooding followed by 30 years of drought, part of the aftermath of the climate changes of 535–536.[3] These weather events could have disrupted the Moche way of life and shattered their faith in their religion, which had promised stable weather through sacrifices.

The BBC had a show on the Moche a while back. Here's what they say happened:

...If the weather on the coast was the opposite, then it suggested a 30-year El Nino - what climatologists call a mega El Nino – starting at around 560 AD, which was followed by a mega drought lasting another 30 years. Such a huge series of climatic extremes would have been enough to kill off an civilization – even a modern one. Here, at last, was a plausible theory for the disappearance of the Moche. But could it be proved?...It turns out that the Moche adapted to the 30 years of floods and the 30 years of drought which followed.
They ended up killing themselves after surviving all that:

...Dillehay now put together a new theory. The Moche had struggled through the climatic disasters but had been fatally weakened. The leadership - which at least in part claimed authority on the basis of being able to determine the weather – had lost its authority and control over its people. Moche villages and and/or clan groups turned on each other in a battle for scare resources like food and land. The Moche replaced ritual battles and human sacrifices with civil war. Gradually they fought themselves into the grave....

"Where Will Natural Gas Prices Go? Look to the Rigs"

From MoneyBeat:
Natural-gas traders are returning to a neglected data point to predict where prices will head next: the weekly rig count.

The count — a survey of the number of rigs drilling for gas released each Friday by oilfield services firm Baker Hughes Inc.BHI +2.63% — is key to estimating U.S. production. This winter, the rig count played second fiddle to weather reports, as freezing temperatures sent gas demand — and prices — sharply higher.
But now, with gas stockpiles at an 11-year low, the count is a key part of the analyst’s arsenal once again. Gas producers typically replenish inventories each spring, when mild temperatures keep demand down. If producers can’t refill storage by next winter, gas prices could rise. Gas for May delivery ended Friday at $4.485, up 4% this week though down from above $6 in February.

This Friday’s Baker Hughes count shows gas drillers operated 318 rigs, compared to 326 a week earlier and 389 a year ago.

That’s a concern for some traders who question whether drillers can replenish supplies by November, when heating demand begins to pick up. The country would need to see a 10 to 15 percent increase in rigs operating this summer to get storage levels to 3.9 trillion cubic feet of natural gas by November, about where it’s been entering previous winters, said Kevin Petak, vice president of fuel markets analysis for ICF International Inc. The U.S. Energy Information Administration reported 896 bcf in stockpile as of Thursday.

“If we don’t see an increase in rigs it’s only going to lead to more reasons for higher prices,” analyst Jim Ritterbusch said....MORE
See also:
March 7
Natural Gas: EIA Weekly Supply/Demand 
...A current backlog of natural gas wells, or wells that have been drilled but not yet completed so they can produce natural gas, will be a major contributing factor to future growth in production, particularly in the Marcellus Shale. A Barclays report on February 28 estimated that more than 1,300 wells in Pennsylvania remain backlogged. Backlogs are often the result of inadequate pipeline infrastructure in a region to support production. As new infrastructure becomes available, these wells can quickly begin producing....
Jan. 31
Natural Gas Producers Not Yet Taking the Bait of Higher Prices: Rig Count For Gas Drillers Hits Multi-decade Low
...You have to go back to 1995 to see that small a number of rigs directed at gas:
In October the EIA pointed out, in "Rethinking rig count as a predictor of natural gas production", that because of horizontal drilling and fracking the numbers aren't directly comparable but a trend is still a trend.
See also the intro to "Natural Gas Prices Strongly Higher on Arrival of Cold Spell" for some discussion of the interplay between prices and drilling.
Also the discussion in Jan. 22's "Natural Gas Prices Strongly Higher on Arrival of Cold Spell".

EIA: "Crude oil inventories at Cushing, Oklahoma, hub down 32% over the past two months"

Following up on Saturday's "Barron's Cover: 'Here Comes $75 Oil'", things are not as they might appear.
$101.40 off 27 cents.
First up the Energy Information Administration, March 27:

graph of Cushing crude oil inventories, as explained in the article text
Source: U.S. Energy Information Administration, Weekly Petroleum Status Report

Crude oil inventories at Cushing, Oklahoma, the primary crude oil storage location in the United States, decreased 13 million barrels (32%) over the past two months. On March 21, Cushing inventories were less than 29 million barrels, more than 20 million barrels lower than a year ago and the lowest level since early 2012. Cushing is the delivery location for the New York Mercantile Exchange (Nymex) West Texas Intermediate (WTI) crude oil futures contract.

The recent drawdown of stocks at Cushing resulted from three factors:
  • The startup of TransCanada's Cushing Marketlink pipeline, which is now moving crude oil from Cushing to the U.S. Gulf Coast
  • Sustained high crude oil runs at refineries in Petroleum Administration for Defense Districts (PADD) 2 (Midwest) and 3 (Gulf Coast), which are partially supplied from Cushing
  • Expanded pipeline infrastructure and railroad shipments that have made it possible for crude oil to bypass Cushing storage and move directly to refining centers in PADDs 1 (East Coast), 3 (Gulf Coast), and 5 (West Coast)
Despite the considerable decline in Cushing inventories, crude oil stocks remain above the top of the 2005-08 range. Over the past several years, much of the crude oil production growth from tight oil formations in the Midcontinent was delivered to Cushing storage. Because takeaway capacity from Cushing storage was insufficient, inventories there rose. Currently, Cushing inventories have fallen to levels that reflect current market conditions, and although they are reduced, the levels remain consistent with crude oil supply requirements to meet regional refinery demand. 

And from RBN Energy:
Texas Bound and Flyin’ – The Cushing Crude Stockpile Heads to the Gulf Coast 
Cushing crude oil inventories have fallen by 28 percent from 42 MMBbl on January 24 to less than 30 MMBbl on March 14, 2014 according to Energy Information Administration (EIA) data. Since the startup of TransCanada’s Cushing Marketlink pipeline at the end of January, outgoing crude pipeline capacity has exceeded inbound supplies at Cushing and the surplus has been headed to the Gulf Coast. Backwardation in the futures market has also encouraged shippers to move supplies out of storage. Today we begin a new series looking at the Cushing exodus and the resultant growing Gulf Coast stockpile.

We have previously blogged about Cushing crude inventory levels – most recently in August of 2013 (see “The Cushing Floodgates Open”). Cushing is the largest crude storage hub in the US (excluding the strategic petroleum reserve) with a nameplate capacity of about 76 MMBbl (source: Genscape) owned by 14 different private companies. Cushing is also the most active oil trading hub and the delivery point for the CME NYMEX West Texas Intermediate (WTI) Futures contract. WTI also acts as a benchmark for US domestic crude pricing (see The Cost of Crude at Cushing Part 1 and Part 2). There are significant flows of crude into Cushing along pipeline routes from Canada, Chicago, the Rockies, the Anadarko basin and the Permian Basin and significant outbound flows on pipelines to refineries in Ohio, Oklahoma, Kansas and Texas as well as major trunk lines to the Gulf Coast.

The dramatic increase in US domestic crude oil production in the past 3 years meant the Cushing hub became the center of an inventory roller coaster as new supplies searched for routes to market. Figure #1 below shows EIA Cushing crude stocks over the period from the start of 2012 through last week (March 14, 2014). At the start of that period Cushing inventories increased from 28 MMBbl in January 2012 to a record 52 MMBbl a year later (green dotted oval on the chart), largely as a result of an excess of supply over refinery capacity in the Midwest.  Those excess supplies came from new domestic production in North Dakota and the Rockies as well as increased Canadian output. The crude surplus could not find it’s way to Gulf Coast refineries because of a lack of pipeline capacity south from Cushing.

By mid-2013 as new pipeline capacity opened up from Cushing to Houston and direct from the Permian Basin in West Texas to Houston (bypassing Cushing) and as increasing volumes of crude were shipped to Gulf Coast refineries by rail and barge, the Cushing stockpile drained to less than 33 MMBbl between January and September 2013 (orange dashed oval on the chart). Then Cushing inventories increased again by about 10 MMBbl in the final quarter of 2013 and early 2014 as producers increased shipments into Cushing ahead of the opening of the southern leg of the Keystone Cushing Marketlink pipeline (purple dotted oval on the chart).
Figure #1 Source: EIA data from Morningstar (Click to Enlarge)
But ever since the Marketlink pipeline came online at the end of January 2014 and began to ship about 300 Mb/d of crude to the Nederland terminal at Port Arthur, TX on the Gulf Coast, stocks at Cushing have fallen again sharply. They fell by 12 MMBbl from 42 MMBbl on January 24, 2014 to less than 30 MMBbl on March 14, 2014 (red arrow in Figure #1). And there is general agreement about the destination of diminishing Cushing supplies – the Gulf Coast. As Cushing inventories have fallen since the start of the year, so Gulf Coast crude stocks have increased - by 33 MMBbl or 20 percent from 161 MMBbl on January 10, 2014 to 194 MMBbl on March 14. We will cover that increase in Gulf Coast crude stocks next time in this series but today we concentrate on why Cushing inventories are draining away....MUCH MORE

Sunday, March 30, 2014

Federal Reserve Board FEDS Notes: "Using big data in finance: Example of sentiment-extraction from news articles"

From the FRB's FEDS Notes:

March 26, 2014
Using big data in finance: Example of sentiment-extraction from news articles
Nitish Sinha
There is much discussion and research in finance on using "big data" to understand market "sentiment." In this note, I will draw on some of my own research in behavioral finance--Sinha (2010) and Heston and Sinha (2013)--to share my perspective the current state of affairs in this area, particularly on the meaning of "sentiment" in the context of big data research.1
The Meaning of "Sentiment" among Finance and Computer Science Researchers
Let me start with some possible confusion that might be caused by how a simple word is used quite differently in two disciplines that meet in this particular area--Finance and Computer Science. In finance, the word "Sentiment" is generally understood to be irrational belief about future cash flows.2 The key test of sentiment is outlined in Tetlock(2007) where he points out that "The sentiment theory predicts short-horizon returns will be reversed in the long run, whereas the information theory predicts they will persist indefinitely." In other words, "sentiment" is a good short-term contrarian indicator. In finance, sentiment has been measured using sunshine days in New York City, and wins in soccer games among others.3 The common feature these measures share is that short-term positive returns associated with these sentiment measures tend to be reversed over next few days.

Computer scientists and computational linguists use the word "sentiment" differently. For example, Pang and Lee (2008) explain that over time "sentiment" has morphed into opinion or subjective information. It is not clear, whether market participants' opinion should be non-informative. There are many places where investors express their opinions. Of course, traded price is where the rubber meets the road and people vote with their bank accounts. But it is possible that somebody with informed opinion, and perhaps thinner wallet might lose to somebody else with uninformed opinion and a thicker wallet.4
The other venues where investors express opinions are newspaper articles, news wires, op-eds, and now twitter feeds. In "Underreaction to News in the U.S. Stock Market," I explore "opinion-extraction" and find that market prices tend to under-react to textual information appearing in news articles. This finding differs from other related findings in the finance literature such as Tetlock(2007) and Laughran and McDonanld(2010). In "News versus Sentiment", a co-authored paper with Steve Heston at University of Maryland, we set out to find why it is that some evidence points to the market under-reacting to information contained in news articles, while other evidence points to the market properly reacting to the same type of information, and still other evidence suggests a tendency for the market to overreact. I will talk a little bit more about this paper since it also provides a window into an approach to working with big data.

One reason for apparently disparate results on the reaction of market prices to textual information could be that researches have used different texts to start with. Press releases are written by firms themselves and might not be impartial. Journalists are trained to write in impartial fashion and could blunt the opinions in a deliberate manner. Tweets are small in length, although can be quite opinionated dense in information. Tweets also present a challenge in parsing since tweeters often use a different vocabulary. We use common corpus of news articles for all text-processing techniques that allows us to specifically identify the effect of text-processing technology. In my research with Heston, we chose all news articles written by Thomson Reuters journalists because news from a wire-service news has some distinct advantages. First, wire-services cater primarily to the investment needs of their subscribers; stories do not appear because they are catchy but because they are economically relevant.5 Also at a wire-service, news does not need to out-compete all the other news articles to get published, a potential source of trunctation of information in newspapers. Comedian Seinfeld is attributed to have said, "It's amazing that the amount of news that happens in the world every day always just exactly fits the newspaper." It is also somewhat surprising the news that does not find its way into the newspaper since the newspaper was already full.6 Given all these conditions, we expect wire-services to have fewer of these biases. Thomson Reuters itself provides a measure of the tone of the news articles based on a neural network application on top of some linguistic analysis. (Please consult Sinha(2010) for the methodological details.) 
A Machine-Learning Algorithm for Classifying News
Perhaps a digression into the area of "machine learning" might be useful here, since it is potentially relevant to extracting "sentiment" from big data. I will somewhat oversimplify some of the issues, at the risk of maintaining brevity. Machine learning used in the context of big data is really a method for classifying data into different categories. Machine learning can be further subdivided into supervised and un-supervised learning. In an unsupervised learning method, the researcher lets the data dictate the categories, the data will be classified into. A trivial example would to let as many categories as there are observations. The methodology of supervised machine learning can be thought of as comprising three steps--"Tag", "Train," and "Classify." In the case of classifying the textual information in news articles, the first stage, "Tag," requires the researcher to carefully select some articles considered likely to representative of the broader group that will need to be classified for the project. Then she tags the articles into desired categories, "good news" and "bad news" for example. There is some temptation to tag the article as positive, if the return following the article's publication is positive, and negative if the return following the article's publication is negative. Similarly, one may want to identify some article as pertinent, if there was any market reaction following the news article's publication and not relevant if there was no reaction to the news article. Those tags would capture how market reacted to the news article, in light of all of the other information the market had at the time of news article release. For example, if a news article was written on a Friday or a day in which the market was otherwise engaged with thoughts of sunny days or Super Bowl, the research would likely run the risk of classifying the article as not even pertinent.7 In our case tagging was done by humans, one of the many reasonable classifiers. The second step or Training follows the tagging; the scientist feeds these tagged articles to the classifier while holding out some tagged articles. The classifier "learns" or establishes a relationship between article attributes and its category. The researcher tests the classifier on the held-out tagged articles till she is satisfied with the learning process. Once the machine has learned the relationship between document attributes and document category, it is ready to classify all the articles in the corpus in the final, "Classification" stage....MORE
HT: The Big Picture

Flash Boys and the Future of High Frequency Trading

Abnormal Returns took a look at Michael Lewis' latest on Saturday:
This is a big week for Michael Lewis and fans of his work. First it was reported that his book The Big Short is going to be made into a feature film by Adam McKay of Anchorman fame. We noted the reaction to the book when it came out in 2010.
On Monday his latest book Flash Boys: A Wall Street Revolt will be released. Only recently was it confirmed that the book focuses on high-frequency trading. From the publisher’s web site we can get a better sense for the book’s theme:
FlashBoys 0314 Flash Boys and the future of HFTFlash Boys is about a small group of Wall Street guys who figure out that the U.S. stock market has been rigged for the benefit of insiders and that, post–financial crisis, the markets have become not more free but less, and more controlled by the big Wall Street banks. Working at different firms, they come to this realization separately; but after they discover one another, the flash boys band together and set out to reform the financial markets. This they do by creating an exchange in which high-frequency trading—source of the most intractable problems—will have no advantage whatsoever.
After what had been an extended “quiet period” the full-PR press is now on. Lewis is set to appear on 60 Minutes tomorrow. He also took some time to talk with Boris Kachka at NY Magazine about the lead up to the book....MORE

"Facebook, Oculus, And Businesses' Thirst For Virtual Reality"

One of the least talked about aspects is the use of VR in education. Because the mind has trouble distinguishing between virtual reality and the outside world you should be able to get people to believe almost anything you want them to accept, given enough repetition and an engaging story line. Whether the learner has deep understanding is pretty much immaterial.

Pearson, the edu/testing co. with the Financial Times and Economist attached will be moving in this direction.
Think deeply immersive multiplayer gaming as an example, then put on some virtual reality goggles.
Quite amazing.

From Forbes:
Facebook’s $2 billion acquisition of Oculus VR is just one sign of the growing business thirst for using virtual reality technology to change ways of working and improve customer experiences.

The acquisition – which was made this week and swiftly followed by polarized reactions from Oculus’ Kickstarter backers and the stock markets – brings Facebook a brand new way to enable people to communicate and share experiences. Experts note that it also demonstrates the growing opportunity for revenue gain through the technology in other industries.

The potential of virtual reality, an interactive digital 3D image or environment which can be experienced through special helmets or glasses, has clearly not been overlooked by Facebook.

Mark Zuckerberg, the social media network’s founder and chief executive, said this week that while mobile is the key platform of today, virtual reality will be one of the major platforms of tomorrow.

It can “change the way we work, play and communicate”, he explained, with potentially strong applications in communications, media, entertainment, and education, among other sectors. “Imagine enjoying a courtside seat at a game, studying in a classroom of students and teachers all over the world or consulting with a doctor face-to-face, just by putting on goggles in your home.”

Virtual reality has been around for decades as a gaming technology, and there has been mixed success with its adoption in business, notes Mark Little, principal analyst at Ovum. But he says that as the technology advances and businesses seek new opportunities, there is plenty of potential for it to benefit niche areas.

It is already being used in the medical world, for example, with Conquer Mobile and VRcade partnering to introduce immersive medical simulation. “High-tech manufacturers of spacecraft, aeroplanes, and cars have also used VR to simulate and test product design and assembly for many years”, he says – and in retail, U.K. fashion chain Topshop has experimented with VR, letting shoppers see the runway show of its latest clothing lines....MORE
And from Silicon India some names to be aware of:

Beyond Oculus VR, 5 Tech Cos Working On 3D Virtual Reality  
BANGALORE: “Virtual-reality could emerge as the next social and communications platform,” said Mark Zuckerberg, CEO Facebook. He also finds that the technology will go beyond its current boundaries of gaming to make great impact in the areas like architecture, automobiles, marketing and education. Finding huge future in 3D virtual-reality, Facebook is to acquire Oculus VR, the makers of virtual reality headset Oculus Rift for a whopping $2 billion. On the occasion where the virtual reality is making headlines around the world, read on to know 5 tech companies that are working on 3D virtual reality as compiled by Mashable.

#1 Sony’s ‘Project Morpheus’

Sony recently  unveiled its immersive virtual reality device for its Playstation 3. Codenamed  ‘Project Morpheus’ , the device creates presence by sound, sight, tracking and much more.

Sony has worked for more than 3 years on the virtual experience device. The device features a head mounted 1080p display, with a 90 degree viewing angle. Accelerometer and gyroscope sensors are built into it and has a Playstation camera which tracks head orientation and its movements, which means the virtual display turns along with the head in the real time. It also has 3D sound technology which has stereoscopic sounds to give real time effects when the head moves. It also works with the DUAL SHOCK 4 wireless controllers and the Playstation Move.

#2 Microsoft Kinect
The Kinect was the device which had both the worlds together, the virtual and the augmented reality . The virtual one was shown to us on the monitor or on a wall by the Kinect may not on par with Oculus Rift, but it is pretty awesome.

For the augmented reality, Microsoft researchers have created a concept which uses virtual simulator reactions based on the physical world. It has a sensor called the Kinect Fusion, which makes the projections of objects react differently. The device which connects the Kinect sensor and the projector called the Beamatron is connected to a rotary head on the ceiling and it scans and maps the whole place.

 It has realistic motion sensors and projects the image anywhere in the room. Even if it bumps into obstacles in the room the image is never distorted. It also  shows virtual objects interacting within the physical objects like never before and the projector can sense what is happening in the room and shows changes in seconds....MORE

Saturday, March 29, 2014

Jim Rogers Talks Sanctions at Voice of Russia

From Voice of Russia:
No sanctions will hurt Russia more than people imposing them - financial analyst
There is no reason for Russia to worry about the western sanctions it is facing now over the Ukrainian issue since Moscow has too many other trade partners to work with, Jim Rogers, financial analyst and co-founder of the Quantum Fund, said in an interview with the VoR.

Could China’s decision to purchase superjet planes be viewed as a gesture of support following a series of sanctions imposed by the West against Moscow over the Ukrainian issue?
Of course it is. I’m an American, so I hate to say this, but America is shooting itself in a foot getting the most of our world to pushing China and Russia closer together. And you are going to see more and more trade between the two. And that makes the sanctions against Russia almost impossible, because there are other people who will not play.

And are there chances for the Russia Sukhoi Superjet planes to compete with other major plane-makers?
I don’t think that the Russians have enough to compete with Boeing planes yet. But you are certainly getting better. I mean, as far as cargo planes, you are probably better than anybody else. And if people are forcing you or forcing other people to buy from you, then, of course, your costs will go down, your quality will get better and it will only benefit Russia, but not benefit Europe or America.
I think that’s one reason Europe and America are a little hesitant to do too much about the sanctions, because they know that they may lose more than they will gain.

And there are some articles on the Internet right now where different experts say that the sanctions imposed by the EU and the US could be bad only for them. What do you think about this sanctions strategy that the US and the EU are using with respect to Russia?
I don’t see any sanctions strategy that they can use that will hurt Russia worse than it will hurt the people imposing those sanctions. You have many people who will trade with you – China, Iran, many of your neighbours. America cannot patrol all of those borders. You can get just about any products you need. Plus, some of the products that you sell, other people need them very-very badly, such as natural gas and some of the metals.

I think Mr. Obama is making the fool of himself yet again. After all, Mr. Obama is the one who instigated the coup in Ukraine where there was an elected Government. Mr. Obama, his diplomats are recorded and we have recordings of them saying – we’ve got to do something about this Government. And then, when it went against him, he got angry. And I’m afraid he is going to shoot himself in the foot yet again....MORE
 HT: Zerohedge

Barron's Cover: "Here Comes $75 Oil"

There is a lot of the stuff sloshing around.

Throw in the geopolitical angles (US/EU v. Russia; Saudia v. Persia) and a bit of downside protection may be in order.

Plus, we've been calling for it since $106-107, seven months ago and frankly I'm getting tired of the répétition, know what I'm sayin'?

Apparently contradicting the 'sloshing around' statement is the forward curve for WTI, currently in pretty steep backwardation from May 2014 at $101.67 to June 2016 at $84.73. That's a simplistic view however and does not account for above ground oil entangled in financing deals (Hi Izzy) and in situ storage. Remember July 4, 2008?

Oil began its historic decline from the previous day's all time high with the curve backwardated.

From Barron's:
Lower energy costs will have a salutary effect on the U.S. economy. Not so Russia, where oil provides 50% of government income.

The long-term outlook for global oil prices is lower, perhaps much lower, giving a strong boost to the U.S. economy while potentially crippling the economy of Vladimir Putin's Russia. Vast new discoveries of oil and natural gas in the U.S. and around the globe could drive the oil price to as low as $75 a barrel over the next five years from a current $100.

The demand side, too, will put pressure on the supremacy of petroleum. For the first time in its 150-year history, the internal combustion engine can be run efficiently on alternative fuels from a number of sources, including natural gas. As these alternatives are increasingly introduced, global consumption of oil will slow its growth and flatten out.

Citigroup's head of global commodity research, Edward Morse, believes the combination of flattening consumption and rising production should mean that "the $90-a-barrel floor on the world oil price over the past few years will become a $90 ceiling." Within a new trading range with a $90 ceiling, Morse sees an average of $75 as plausible.

That's a far cry from the old paradigm, promoted in the past 40 years, which posited ever-greater demand for petroleum as developing economies grew, and a slowdown on the supply side -- the looming prospect of "peak oil," whereby global production maxes out and falls into decline. To the contrary, unconventional sources of crude oil totaling more than a trillion barrels -- the equivalent of more than 30 years of extra supply -- have been discovered in the past five years. The majority is recoverable at $75 or less, and much is now being tapped.

Within the next five years, growth in U.S. production of oil should make this country a net exporter, ending a pattern that has persisted since World War II. "While this country will still be importing plenty of medium and heavy crudes, most of the imports will come from Canada and Mexico," says Morse. "So the U.S. will no longer have to worry about disruptions in supply that might disrupt economic activity. That's why we call it the era of North American energy independence."

British economist Alfred Marshall famously likened supply and demand to the blades of scissors, and the blades are also poised to cut oil prices in the rest of the world. On the supply side, unconventional sources of oil are being tapped in countries that include India, Bahrain, and Uganda. On the demand side, a third of the auto fleet in Brazil can already run on fuel other than petroleum.
THE RECENT AGGRESSION by the oil-and-gas exporting nation of Russia reminds us of the fragility of global energy supplies. At the same time, the oil-and-gas abundance in this country has influenced concrete proposals for dealing with Russia. Energy consultant Philip Verleger has publicly proposed as a "meaningful response to Russian aggression" that the U.S. sell the nearly 700 million barrels in its Strategic Petroleum Reserve as a way to "drive oil prices down and impose significant harm on Russia," since the SPR is "no longer needed for national security." And an editorial in The Wall Street Journal recently proposed that the Department of Energy "approve immediately the 25 applications for liquefied natural gas…export terminals," since "every dollar of U.S. gas is one less dollar flowing to Mr. Putin's economy."

Such proposals would have been unthinkable as recently as five years ago, when the old paradigm was still dominant and domestic supplies of oil and gas were a source of worry.

Over the next five years, the effects of the global oil-and-gas boom should prove a grim object lesson for the Russian economy on the downside of the "resource curse." Russia's economy "largely depends on energy exports," according to a study from the U.S. Energy Information Administration. That works well when prices are high, but quite badly when prices fall.

Oil-and-gas revenues account for 70% of Russia's total exports and more than half the income of its federal government. Russia exports more than seven million barrels of oil a day, second only to Saudi Arabia. One key difference between Russia and the No. 1 exporter is that more than 60% of Russian oil is produced in Siberia, where costs are much higher. A fall in the world price to $75 from $100 would therefore have a much greater impact on the net revenues that Russia earns from oil than is earned by the Saudis.

The downside of the resource curse could also be felt in Russia's reliance on sales of natural gas. About 75% of Russia's natural gas exports go to Western Europe, providing 30% of its requirements, at prices that are two and three times the price in the U.S. That enormous premium stems from the fact that there is no world market for natural gas, given the prohibitive cost of shipping it in its unaltered state. Hence, the argument for accelerated approval of liquefied-natural-gas export terminals. With abundant natural gas now available in so much of the world -- including Australia, South Africa, Brazil, and Argentina -- within the next five years, something resembling a global market in liquefied natural gas will likely develop. That would break the local monopoly of the Russians in their market, enabling Europeans to buy from other sources, and weighing on the premium Russian gas now commands.

AMY JAFFE, EXECUTIVE DIRECTOR for energy and sustainability at the University of California, Davis, co-authored a recent study with Rice University economics professor Mahmoud El-Gamal predicting that barring a "war that destroys physical installations for the production and/or transport of oil," the oil price will "fall precipitously over the medium term of three to five years."

Jaffe believes the average price could fall below $75, based in part on her view that oil-production costs are not fixed. "Research shows that costs track oil prices and not the other way around," she observes. As oil prices move lower, demand for drilling rigs and related equipment falls, lowering the cost of drilling. And that's bad news for Putin....MUCM MORE 

Friday, March 28, 2014

The Largest Bitcoin Miner on the Planet Uses Rasberry Pi

From Ars Technica:

Meet the manic miner who wants to mint 10% of all new bitcoins
1.4 million chips and 5,000 Raspberry Pis power absurdly large mining operation.

As Bitcoin mining chips crunch numbers, a Raspberry Pi directs traffic.
In a couple of large buildings near the Columbia River in Eastern Washington, where hydroelectricity is cheap and plentiful, Dave Carlson oversees what he says is one of the largest Bitcoin mining operations on the planet.

At any given time, Carlson's goal is to account for seven to 10 percent of the entire world's Bitcoin mining as measured by processing or hashing power, he said. At the moment, he's slightly below that target but doesn't expect to remain below it for very long. The operations are fueled by thousands of mining rigs containing more than 1.4 million BitFury mining chips, while Raspberry Pis loaded with custom software direct traffic on each rig.

"We were looking for the lowest cost, highest volume production, tiny computer controller that had the ability to integrate with another electronic board design. There are many out there, but the Raspberry Pi is something like 40 bucks," Carlson told Ars.

Carlson's company, MegaBigPower, does the biggest portion of its mining on behalf of its primary investor, the BioInfoBank Institute in Poland. Carlson takes a cut in bitcoins and rents capacity to other people who want to mine without running their own hardware and software.

"We surface about half of our US mining power as something you can purchase as a leased hash product," he said.
"GH" is one billion hashes per second, and "TH" is one trillion hashes per second.
If you really want to get into Bitcoin mining, it may well be better to run your own hardware than lease hashing power from someone else. Not having any desire to handle the specifics of mining could be a good reason to pay someone else to do all the work. But if Carlson can make money by leasing out mining capabilities and taking a percentage of mined bitcoins, someone who's willing to research the appropriate hardware and configurations themselves should probably just go it alone and reap all the Bitcoin profits....MORE
 Previously on the Rasberry Pi channel:
UPDATED--"Build your own supercomputer out of Raspberry Pi boards"
"What Are People Doing With the Raspberry Pi Computer? Wired UK on Sale May 30"

"El Niño forecast to produce less active hurricane season in 2014"

From Artemis:
ImpactWeather has released its first 2014 Atlantic hurricane season forecast today and says that it expects the development of an El Niño by July or August to produce a less active hurricane season, with a below average number of storms forming.

The firms 2014 Seasonal Outlook for Atlantic Hurricanes factors in a developing El Niño influence to produce a less active than normal hurricane season this year.
An increasing number of meteorologists are forecasting the development of El Niño conditions in the Pacific Ocean within a few months. El Niño typically results in a below average hurricane season in terms of the number of storms that form.
Based on averages of past seasons, ocean temperature trends and elevated wind shear across the Tropical Atlantic, ImpactWeather Senior Meteorologists Fred Schmude and Chris Hebert forecast the development of 10 named storms, with 4 achieving hurricane status and 1 reaching severe hurricane status of Category 3, 4 or 5.
Of course recent Atlantic hurricane seasons have shown that the number of storms that form is not the main threat. We’ve seen record seasons for tropical storm formation with little in the way of landfalls to create loss events. Conversely some hurricane seasons in the late 90′s and early 00′s saw lower numbers of storms but multiple landfalls resulting in heavy insurance and reinsurance losses....MORE

"Windfall for hedge funds and Russian banks as IMF rescues Ukraine"

From the Telegraph:
Ukraine has secured an emergency bail-out of up to $18bn (£10.9bn) from the International Monetary Fund to stave off imminent default but will see no debt relief and will be forced to slash spending amid dangerous civil conflict.
Critics say the package may be too small to stabilise the country as it spirals into depression with wafer-thin foreign reserves, and braces for a fuel shock as Russia’s Gazprom doubles the cost of energy in a move described by Washington as political harassment.
Arseny Yatseniuk, Ukraine’s premier, said his country was “on the edge of economic and financial bankruptcy”, yet vowed to comply with demands for drastic austerity – including a 50pc rise in fuel prices – even if this proved a “kamikaze” mission.
There will be no haircuts for creditors under the deal, unlike the EU-IMF formula in Greece and Cyprus. This amounts to a bail-out for Russian state banks and Western funds accused of propping up the previous regime and for vulture funds that bought Ukrainian debt cheaply for quick gain. 
Tim Ash, from Standard Bank, said: “Ukraine has been the ultimate moral hazard play and it’s cavalier to expect taxpayers to cover this.”

Mr Ash said it has been obvious since 2011 that Ukraine was heading for the rocks, yet funds continued to snap up its bonds, betting that the country was “too big and geopolitically important to fail” and would always be bailed out in the end by Russia or the West.

Franklin Templeton, the global asset group, held $7.3bn of Ukrainian bonds at the end of 2013. Mark Mobius, the group’s chief, said last month: “Our belief is that Ukraine is in somewhat of a sweet spot... We believe they are going to keep friendly/good relations with Russia.”...MORE

How Can You Tell When the Unemployed Retire?

They appear to be happier.
From Marginal Revolution:
They become much happier, or so it seems in a new paper by hetschko, Knabe, and Schoeb, “Changing Identity: Retiring from Unemployment.” (Ungated versions here.)

Catherine Rampell reports on the research here. Part of her summary is this:

The paper is based on German survey data and finds that self-reported “life-satisfaction” increases by around 0.3 points on a scale from 0 to 10 for people who transition from unemployment to retirement. That’s about twice the increase in happiness that newlyweds experience. The average person who transitions from employment to retirement, on the other hand, does not experience a bump in life satisfaction.


Rather ironically, it is hope that keeps people unhappy while unemployed…

Ag Commodities: Ahead of Monday's Big USDA Reports, One Number to Watch

The scheduled reports:

  Mon 03/31/2014
    12:00 PM Grain StocksThis is an external link or third-party site outside of the United States Department of Agriculture (USDA) website. NASS
    12:00 PM Rice StocksThis is an external link or third-party site outside of the United States Department of Agriculture (USDA) website. NASS
    12:00 PM Prospective PlantingsThis is an external link or third-party site outside of the United States Department of Agriculture (USDA) website. NASS
    3:00 PM Egg ProductsThis is an external link or third-party site outside of the United States Department of Agriculture (USDA) website. NASS
    4:00 PM Oil Crops Yearbook ERS

And, via Agrimoney:

One number key to negotiating big day for USDA crop reports
There is good news and bad news for grain and oilseed investors preparing for what, on Monday, may well prove one of the most momentous days of the year.
The good news is that, out of the all the important data that the US Department of Agriculture will release in a double bill of big reports – one on prospective crop areas this year in the US this year and the other on quarterly grain inventories – there is one that really stands out as important.
Bill Tierney, chief economist at Chicago-based AgResource, says: "You have got old crop information and information and new crop information coming at the same time.
"But what prices seem to respond to is the stocks report, and in particular for what is going on in corn.
"Even for soybeans, what appears to have more impact on prices than soybean data is what is happening in corn, which seems to be driving price response."
So investors attempting to position ahead of the report need only look at the US corn balance sheet to guide their strategy.
Price behaviour
And correct positioning is important. Quarterly stocks reports have a habit of producing big price swings.
Forecasts for US corn data, March 31 USDA reports, (change on last year)
2014 sowings: 92.748m acres, (95.365m acres)
Range of estimates: 90.50m-94.0m acres
March 1 stocks: 7.099bn bushels, (5.40bn bushels)
Range of estimates: 6.861bn-7.540bn bushels
Sources: USDA, ThomsonReuters
At the last one, on January 10, corn prices soared 5.0% on the day as the data signalled that livestock feeders had switched to the grain from wheat, encouraged by discounts of more than $2 a bushel, to a far greater degree than investors had expected.
Soybeans actually managed that time to gain only 0.5%. (Wheat tumbled 2.6% in Chicago.)
A year ago, the row crops did perform in line, undertaking a synchronised dive, with the March stocks report sending corn down 5.4% and soybeans plunging 3.4%. Wheat tumbled 6.7%.
A year before that, in March 2012, the contracts bounced in harmony, with corn futures soaring 6.6%, soybeans 3.5% and wheat 7.9%.
Big range
The bad news is that, as can be inferred from the extent of the price moves after the reports, guessing the corn stocks figure right is a tricky business....MORE

Thursday, March 27, 2014

Economist Tyler Cowen's Attacker Identified as John Pendleton

From Reason's Hit and Run blog:
The man who attacked economist and George Mason University professor Tyler Cowen with pepper spray yesterday has been identified as John Pendleton. Economic Policy Journal points out that Pendleton has previously commented on Cowen's blog, Marginal Revolution, accusing Cowen of hacking his computer and sexually harrassing him for several months. 
In a comment posted March 17, 2014, Pendleton wrote:
What better place to do prison research than inside a prison?

If the police and FBI won't arrest you for hacking my computer and sexually harassing me over the past several months, I will do it myself—in the next couple weeks before school starts again. Either way, one of us is going to prison

I will entertain settlement offers at the email address provided.

Jonathan E Pendleton 
Yesterday afternoon, Pendleton made good on these threats, busting into Cowen's classroom as Cowen was teaching a class (on vigilante justice, ironically enough). According to Arlington County Police spokesman Dustin Sternbeck, Pendleton entered the classroom, stood up on a desk, and announced that he was placing Cowen under "citizen's arrest." Pendleton then attempted to handcuff Cowen and, when Cowen resisted, sprayed him in the face with pepper spray....MORE

Why Gold Bounced (a little) Today (GLD)

I had intended to mention the "Golden Cross" of the 50 and 200 day in the earlier post, "As Gold Dips Below $1300 Barclays Sees Gains For Platinum Group Metals (GLD; PPLT; PALL)".
We don't agree with the analysis but the chart is clear and simple.
 Gold has been falling for about two weeks straight. It is now into a solid support level. This level is not only a gap fill on the SPDR Gold Trust (ARCA:GLD)) but also the 20 and the 50 moving averages. These two moving averages make up a necktie, which is a strong technical support level. The signals are saying a bounce in gold is coming. This is a short term trade, not a long term investment. Lock and load.
 GLD Daily
I know GLD is not gold and that some of the more rabid advocates of the metal could bend your ear for an hour on the differences but for our purposes on this 27th day of March 2014 it makes a handy proxy with the added advantage over bullion that you can follow volume flows. GLD $124.38, down $1.03; April futures $1293 down $10.40, the soon to be front future May's: $1292 down $11.50.

Here's FinViz showing the move from 5am to 9:00-1:00:

"Airbnb Is Worth $10 Billion Because The Sharing Economy Is a Farce"

"First you talk about how much you're helping the little guy, then you break the rules and launch everywhere, then you're indispensable, then regulators shrug, then you win...."
-Valleywag on another 'sharing economy' poster child, Uber.

There is a profound point that Izabella Kaminska has been making for a while now, that as much as she wants to believe in the sharing economy, the way it's being done means there is no there, there.

She's gone into a number of the issues, from intellectual underpinnings to the pseudo-competitive advantage highlighted by the pull-quote. Here's her latest at FT Alphaville: 

Unscaling is made possible by the number of Internet-based platforms and cloud-based services and tools now available to startups and small businesses in general. New companies can now be launched without a massive investment in personnel and IT infrastructure. They can quickly get to market, and compete effectively with far larger companies. Mobile Internet platforms, in particular, make it easier and cheaper to experiment in the marketplace. While most such experiments will likely fail, some, like Airbnb, will succeed and can then quickly scale up their capabilities as their businesses grow.
That’s from the blog of former IBMer Irving Wladawsky-Berge[r], who is riffing on the back of a Newsweek piece by Kevin Maney on the “end of mass production”.

The basic premise is that information technology is enabling the niche and the unique to find a market like never before, and as a result the end of mass production is nigh.

Airbnb is used as a key example of the “unscaling” or “decentralized production” process. The piece argues that the only reason impersonal hotel chains grew to prominence in the first place was because there was a lack of information in the marketplace about smaller, more personal offerings.
As Maney writes:
In the middle of last century, cars and highways made the world far more mobile. Many more people traveled to towns they didn’t know, and they needed places to sleep. They had no way to know which hotel or boarding house might be nice or offer amenities they wanted. Travel guides, like Mobil’s, popped up in the 1950s, but for the most part information remained scarce. Chains took advantage of that data deficit. If you knew a Holiday Inn in one town, you knew the Holiday Inn in the next town would be roughly the same. The brand’s motto played off this: “The best surprise is no surprise.” The uniformity and comfort of a chain trumped the risk of an unknown, independent place.
Much of this reasoning neglects a key issue.

It’s not so much that internet platforms are revolutionising the production process. It’s that the scaled up production process has oversaturated the world with perfectly reasonable but impersonal services, and in many cases supply has simply outpaced demand....MUCH MORE
See also her comments on her personal blog, Dizzynomics, one of whose posts we linked to in last week's "On Airbnb's $10 billion Valuation and the 'Sharing' Economy in General". 


Natural Gas Required Reading: "Should I Store or Should I Burn—Will Power Burn Jeopardize Gas Injection Season?"

Required that is by anyone who hopes to have a chance of understanding what's up with the coal/natural gas/electricity matrix as currently(!) constituted.
$4.4210 last.
From RBN Energy:
Several key factors point to a gradual increase in natural gas power burn over the next few years. More gas-fired units are coming online, and more coal-units are being retired.   But with gas prices trending higher this spring and summer than in the same periods last year, 2014 gas use by the electric sector may end up unchanged from 2013--unless this summer is a scorcher. The stronger pricing is good news for producers, of course, as is the very real need to replenish depleted gas stocks. Today, in the first episode of a new series on power burn demand for natural gas, we look back at 2013 and forward to prospects for 2014.
The amount of gas consumed annually for power burn is a zig-zaggy thing, of course, due to factors like the strength (or weakness) of the economy, temperature, gas and coal prices, and even precipitation levels in hydro-dependent regions. After a very mild winter and with gas prices at 10 year lows (encouraging unprecedented levels of coal to gas power switching), 2012 was something of an anomaly as gas burn increased 6 Bcf/d over 2011 to 24.9 Bcf/d. In 2013 – a more normal year – natural gas consumed for power was down 2.6 Bcf/d from 2012 to 22.3 Bcf/d, in part due to higher natural gas prices and also because a milder summer reduced demand for air conditioning. Over the longer term the trend has been gradual gains in the amount of gas-fired power generated and gradual declines in the amount of power produced by coal-fired units.
(Click to Enlarge)
As we did in our gas power burn analysis last spring (see 2012 Natural Gas Power Burn—Was That a Wild and Crazy Year?), let us turn first to the latest data from the U.S. Energy Information Administration (EIA) and its nifty Electricity Data Browser  - an application that allows users to browse through power generation statistics and select data, report types and charts interactively. Figure # 1 shows the amount of power generated (in thousand MWh) by coal (brown line) and natural gas (green line) over the past five years. You can see major peaks each summer and minor peaks each winter in both the gas and coal power generation data, with—as we said earlier—that special situation in the spring and summer of 2012 when gas prices plummeted and the electric sector (which dispatches or runs the units with the lowest costs) ramped down its coal use and ramped up its use of natural gas (red dotted circle on the chart).

The summer peaks of coal- and gas-fired generation sagged lower than previous years in 2013 with the unusually cool temperatures. But look at the trend of coal and gas generation, dismiss the anomaly of 2012, and consider two things. First, the general trend since 2009 is that the gap between coal and gas has been narrowing, with coal’s contribution falling and gas’s on the rise. Second, even with the very mild weather last summer, the output of gas-fired units in July and August of 2013 (at just under 120 million MWh each month) was almost identical to their output in those months in 2011—a typically hot, high-demand summer.  So if we get back to normal summer weather in 2014, you would expect an increase in power demand generally and probably in gas-fired generation too....MUCH MORE

Bloomberg's Attempt to Use Data to Predict Who The Next Generation of Tech Founders Will Be

From Pando Daily:
Can data predict a future founder?

That’s the question that Bloomberg Beta and Mattermark set out to answer in June, driven by the desire of Bloomberg’s new venture capital arm to develop relationships with these future belles of the ball.
“Part of it was driven by my own personal experience,” says Bloomberg Beta head Roy Bahat. “No one wants to talk to you until suddenly everyone wants to talk to you. It’s nice to get to know people before we want anything from them or they want anything from us.

Leave it to Mattermark, a company that analyzes data like LinkedIn profiles and tweets to deduce startup performing, to take on the seemingly impossible the task of identifying these future founders. It started by modeling out a couple hundred well-known venture-backed founders, the “whales” and the “unicorns” according to Mattermark co-founder Danielle Morrill. Morrill created a database listing attributes of these people like their age, college education, what job titles they’ve held, and where they worked before, and if they have experience working on a venture-backed startup.

The company analyzed the trends in this data set, and compared the findings against a pool 1.5 million people currently working in tech. Mattermark initially came up with a list of 70,000 potential future founders, and then further narrowed it down to the 350 most likely to take the plunge and start their own companies.
Morrill claims that these people are 25-times more likely than a random individual working in tech to one day found their own companies.

Here’s where it gets weird: Today, Bloomberg Beta emailed these 350 people — none of whom have ever founded a company before — to say, basically, “Hey we think there’s a good likelihood you might found a company in the future. So, we want to meet you and invite you to a selective year long series of networking events.”

Ah, to be a fly on one of those 350 people’s computer screens.

Bloomberg Beta wouldn’t release the names of the chosen ones, given that these people had no idea they were being compiled into a master list....MORE

As Gold Dips Below $1300 Barclays Sees Gains For Platinum Group Metals (GLD; PPLT; PALL)

$1295.00 down $8.40 last.
From Kitco:

Barclays Revises Up 2014 Gold Forecast; Sees Gains For PGMs
 Barclays has revised its 2014 gold forecast higher although analysts say they still look for the metal to fall back some from current levels.

However, the bank expects platinum group metals to rise.

“We have revised our gold price forecast for 2014 up to $1250/oz from $1205/oz, after taking into account gold’s year-to-date performance,” Barclays said in a report Wednesday. “That said, we have not changed our overall view and still believe that its next move will be lower.”

“Palladium has similarly outperformed so far this year, hitting several year highs, due to possible supply concerns. However, we still expect market fundamentals to push palladium even higher by year-end,” the analysts added.

Other average price forecasts for 2014 include silver, $19 an ounce; platinum, $1,539; and palladium, $768. The latter two are seen gaining momentum as the year wears on, with Barclays listing fourth-quarter forecasts of $1,610 for platinum and $810 for palladium....MORE
Overnight, via FinViz:

Troubled Russian Aluminum Giant Stops LME Warehousing Rule Changes

Rusal is trying to restructure $10 bil. in debt. The LME rule changes would have been a serious hit to the world's largest producer's cash flow. ("tens of millions of pounds")
From Reuters:

Rusal legal win makes London Metal Exchange halt warehouse reform
The London Metal Exchange (LME) will not implement reforms to cut logjams in its global warehousing network as scheduled next month after it lost crucial elements of a legal case brought by Russian aluminium giant Rusal.

"The LME is disappointed with the outcome of the judicial review," the exchange said in a statement on Thursday. "The implementation of the rule will not take place on 1 April 2014."

The LME, the world's biggest marketplace for base metals, had planned to implement reforms designed to cut long queues to access metal from warehouses, but Rusal argued the measures would damage prices of its products.

United Company Rusal, the world's largest producer of aluminium, sought court permission last month for the review on grounds including human rights.

"We welcome this decision by the High Court and look forward to working closely with the LME, and indeed all key stakeholders," said Rusal's Chief Executive Oleg Deripaska.

A new consultation should "serve to increase the integrity of price discovery and transparency across the market", he added.

The LME, owned by Hong Kong Exchanges and Clearing , said it was taking legal advice on its options, including launching an appeal or a re-consultation on its reforms.

In court last month, the LME voiced "serious concerns" over its ability to maintain an orderly base metal market if forced to repeat the consultation....MORE

Wednesday, March 26, 2014

Serious Datawhack on the Techno-Optimists: "Technology shakes up US economy"

The headline is a bit of an homage to 'Adam Smith' (George J.W. Goodman) who used "Digital Datawhack" as one of his exemplar investments.
From the Financial Times, a timely look at one of the most interesting sources of agglomerated econ data:
New technologies are transforming the structure of the US economy but creating only modest numbers of jobs, according to the biggest official survey of businesses, conducted only once every five years.
The 2012 economic census shows how technology is creating a boom in output for new industries – such as shale gas and internet retail – but only a modest increase in their payrolls.

It highlights concerns that recent innovations in information technology tend to raise productivity by replacing existing workers, rather than creating new products that demand more labour to produce....MUCH MORE
...The economic census is the business equivalent of the decennial survey of the population, covering the US in precise industry and geographic detail, and provides the basic structure for the national accounts. Only the national summary was released on Wednesday.

Over this year and next, the Census Bureau will publish detailed reports on each industry and geography. “We will be putting out about 40bn data cells in total,” said Mr Bostic....
HT: FT Alphaville's The Closer post

"...Gold Ends Lower, Hits 6-Week Low, on More Chart-Based Pressure "

From Kitco:
Gold prices ended the U.S. day session moderately down and fell to a six-week low Wednesday, on more technical selling pressure and amid a dearth of fresh, bullish fundamental news for the yellow metal. The gold and silver bears remain in near-term technical control of their markets. April gold was last down $7.00 at $1,304.40 an ounce. Spot gold was last quoted down $6.80 at $1,305.40. May Comex silver last traded down $0.174 at $19.805 an ounce.

This week has not seen any major, markets-moving geopolitical developments and few major economic data points. That has left the chart-based traders to have a heavier influence on many markets, including gold and silver. Early-morning short-covering and mild bargain-hunting gains in gold succumbed to technical selling pressure at mid-morning.

In overnight news, Federal Reserve Bank of St. Louis president James Bullard said the U.S. economy continues to improve and said he sees U.S. unemployment below 6% by the end of this year. Amid the lack of major headline economic data points so far this week, focus of the market place has been on world central banks and their monetary policies. European stocks rallied in part Wednesday on ideas the European Central Bank will soon embark on further monetary policy stimulus due to concerns about deflation. And recent downbeat economic data from China has the market place buzzing that China monetary officials could also loosen money policy to help stimulate the world’s second-largest economy. Traders and investors were caught off guard last week when the U.S. Federal Reserve issued a report that was deemed as less dovish than expected given that new Fed chair Janet Yellen is generally believed to be fully in the dovish camp on monetary policy.

The London P.M. gold fixing was $1,304.00 versus the previous P.M. fixing of $1,313.50.
Technically, April gold futures prices closed nearer the session low Wednesday and hit a six-week low. Serious near-term chart damage has been inflicted recently. The bears have the near-term technical advantage....MORE
Today's action via FinViz: