"Fannie, Freddie Shares Plunge" (FNMA; FMCC)

Just like old times eh?
From MoneyBeat:

Ugly day for the common stock of Fannie MaeFNMA -30.76% and Freddie MacFMCC -26.81%.

Fannie shares dropped as much as 44% Tuesday and Freddie’s stock fell 39% at its low after the top Democrat and Republican on the Senate Banking Committee said they had reached agreement on the broad outlines of a bill to overhaul the nation’s $9.9 trillion mortgage market.

The bill will call for replacing Fannie and Freddie with a new system of federally insured mortgage securities in which private insurers would be required to take initial losses before any government guarantee would be triggered.

Of course, considering these issues relate to Washington and the housing market, the bill most likely has a long road ahead before getting passed. But that hasn’t stopped investors from fleeing the stocks Tuesday.

Both stock declines–which occurred on more than seven times their average daily volume, according to FactSet–represent a major reversal from the sharp gains registered over the past 12 months. Fannie shares, which traded as low as 29 cents a year ago, peaked at $6.35 on Tuesday before falling sharply....MORE

"Here’s Who Owns Plug Power" (PLUG; FCEL)

Lifted in toto from Barron's Focus on Funds:

It was a blackout kind of day for Plug Power (PLUG), which fell about 40% after Citron Research panned the company, comparing the stock to a casino bet.

A quick look at the biggest institutional owners of this stock via FactSet Research System turns up a slew of private investors and highly quantitative hedge funds. Figures to the right mostly reflect Dec. 31 filings, so there’s no guarantee they’re up to date.

The group includes Heights Capital Management, Masters Capital Management, Renaissance Technologies, and Two Sigma Investments.
You’ve also got several private wealth managers, including Robert W. Baird & Co.’s and Evercore Wealth Management.

Also at FoF:
‘Smart Beta’: Watch Out for Bandwagoners, ‘False Alpha’ … and Yourself

Fuel Cell Stocks Decline After Short Seller Ridicule, Plug Power Down 41.5% (PLUG; FCEL)

Following up on this morning's "As The Dead Come Back to Life: Watching the Fuel Cell Stocks and Looking for Ideas".
Plug Power gap-opened the day at $11.50 (from $10.31), traded as high as $11.72 and closed at $6.03.
From MarketWatch:

Plug Power plunges as short seller ridicules stock
Fuel cell sector’s rapid ascent prompts some analysts to cry ‘bubble’

Fuel-cell supplier Plug Power Inc. reversed earlier gains to plunge 42% Tuesday after a famed short seller labeled the stock a “casino” stock and described it as the “lowest form of moonshot.”

Andrew Left of Citron Research issued a nine-page report that predicted that once the hype dies down, the stock will trade at 50 cents again . 

“Who is behind PLUG, and what do they do? This is simple: Plug Power sells fuel cell-powered forklifts...with fuel cells they acquire from Ballard Power. Nothing fancy here, folks,” Left said. 

Plug Power  had risen steeply since announcing last week that it won a contract to work with six distribution centers for Wal-Mart Stores Inc. Ballard Power Systems Inc., which jumped more than 17%, is now down 26%. FuelCell Energy Inc., a designer and operator of fuel-cell plants, slumped 17%.

The climb in fuel-cell stocks had prompted a number of market experts to declare that the sector is approaching bubble territory ....

Here's the Citron report (9 page PDF)

"New York Magazine Stirs the Pot on the Sotheby’s Board Fight" (BID)

From Art Market Monitor:

New York Magazine’s story about the board battle involving Sotheby’s is oddly off. Not only does it come out the week that New Yorkers are recovering from an art hangover of monstrous proportions but it misses the central fact that on the key issue of the Contemporary art market last week saw Sotheby’s manhandle the competition. Although the sales around the Armory Show are hardly big-money affairs, they do take place at the heart of active collecting.

Last week Sotheby’s not only raised their total year over year by a third but they sold as much as Phillips and Christie’s combined. The low double-digit million-dollar sales won’t close the gap between Sotheby’s and Christie’s in Contemporary but to ignore the stride is unfair.

More to the point, the story gets some simple things wrong. Here’s New York’s take on the activists’ stock gains:

Sotheby’s has adopted a “poison pill” takeover defense, preventing Loeb from amassing more than the roughly 10 percent of shares he currently holds, but last week Marcato, which owns 6.6 percent of the company, announced it would be supporting Loeb’s nominations. Sotheby’s stock has remained fairly flat since the activists disclosed their positions over the summer, so they have every incentive to make some noise.

But the chart above shows that the big gains in the stock came after Marcato’s 13-D filing in June and there were still substantial gains after late September when the Summer ended....MORE

New York Fed on Algo's: "Has Automated Trading Promoted Efficiency in the FX Spot Market? "

From the Federal Reserve Bank of New York's Liberty Street Economics blog:

The relative merits of algorithmic and high-frequency trading are most often discussed in the context of equity markets. In this post, we look at the foreign exchange (FX) spot market. The growth of algorithmic and high-frequency trading in this market has introduced new entrants as well as new complexities and challenges that have important implications for the liquidity landscape and the risk management framework in FX markets. This post focuses narrowly on an important measure of FX market efficiency, absence of arbitrage opportunities, to discuss the improvements in this particular measure of efficiency that have coincided with significant growth in algorithmic and high-frequency trading.

    The FX spot market is often considered one of the deepest and most liquid markets in the world; the Bank for International Settlements (BIS) estimates global average daily volume of $2.0 trillion in April 2013. Activity is dominated by trading in the three major currencies—the U.S. dollar (USD), the euro (EUR), and the Japanese yen (JPY). While there’s a broad diversity of players in the FX spot market—including corporations, official institutions, and pension funds—the latest data show that activity is most concentrated among the large FX dealers and other financial institutions. Indeed, dealers are often the conduit through which nondealers access the market, for example, via prime brokerage relationships. The FX spot market is an over-the-counter market and differs importantly from other liquid markets like equities or futures, which are exchange traded and therefore feature a centralized counterparty. FX spot trades, in contrast, are bilateral transactions that rely on credit arrangements between the two parties involved, which means that each participant only sees, and can act on, quotes posted by counterparties with whom a bilateral credit arrangement is in place. Accordingly, there’s no concept of a universal best bid and offer price, as is the case with U.S. equity markets....MORE

See also:
Lloyds Currency Trader Front-Ran Himself
Jobs the Robots Will Do: Foreign Exchange Traders Facing Extinction as Computers Replace Humans
Jobs That Robots Won't Do: Clown Shortage

William Randolph Hearst's Penthouse Comes on the Market For $38 Million

From RealEstalker:

The Old W.R. Hearst Penthouse in NYC Officially Lists for $38 Million 

 

SELLERS: Benedict Silverman
LOCATION: New York City, NY
PRICE: $38,000,000
SIZE: 7,000-ish square feet, 7 bedrooms, 7.5 bathrooms

YOUR MAMAS NOTES: Listen, children, Your Mama has the in-laws in town so we're a bit ocupado for most of the day but before we trot off to watch a whole bunch of professional tennis players whack a yellow ball around a green court we thought we'd offer the children a few snaps and the floor plan for a quardruplex penthouse in New York City that was once part of a much larger quintuplex penthouse created in the late 19-teens by lavish living newspaperman William Randolph Hearst.

In the early part of the 20th century Mister Hearst leased the top three floors of 137 Riverside Drive to use as a private residence overlooking the might Hudson River. He later requested the building's owner for more space but he was rebuffed. So, like any self-respecting captain of industry with more money than he knows what to do with, he went ahead and purchased the entire building for $950,000 and—so the story goes—proceeded to add a copper mansard to the building's top that was 100 feet long and 30 feet tall where displayed his vast collection of medieval tapestries and suits and armor and such. Mister Hearst, who b lost the building (and his five floor penthouse) in 1930 to foreclosure—by then the magnate had relocated to Hearst Castle in San Simeon, CA—and the super-sized urban aerie was eventually broken up into smaller apartments....MORE

Companies That Will Benefit From The Internet of Things

From Barron's Tech Trader Daily:

ARMH, BRCM, INVN Among Pac Crest ‘Internet of Things’ Beneficiaries

Pacific Crest Securities chip analyst Michael McConnell today reflects on the phenomenon of the “Internet of Things,” much in vogue these days, and concludes that while it is “still early days” for that market, nevertheless investors should be alert to opportunities for several chip makers, including ARM Holdings(ARMH), Atmel (ATML), Broadcom (BRCM), Freescale Semiconductor (FSL), Microchip Technology (MCHP), Maxim Integrated Products (MXIM), NXP Semicondutor (NXP), Silicon Labs (SLAB), and InvenSense.

McConnell describes having talked with ARM, along with startups Apigee, Impinj, Kionix, and Mtell, at a recent Pac Crest “Emerging Technology Summit,” and taking away the impression that the “IoT” is in its “infancy,” and that “plenty of devices are still not connected and represent a lot of opportunities once they are connected to the Internet,” but that “lack of common standards and platform-based solutions is the primary bottleneck to enable the end-to-end ecosystem, not to mention the security issues in the whole system and short battery life of end devices. “For chip makers, this is likely to be a high-volume, lower price kind of market:

From a semiconductor perspective, ARM indicated that the low chip ASP would be not necessary for the whole IoT market given the long tail of IoT from very high-end industrial applications to low-end and high- volume devices. Despite that, we think a large portion of IoT applications, particularly in the consumer segment, would present a low-ASP and high-volume opportunity for semiconductors. In addition, all panelists appeared to agree and embrace pricing decline in IoT devices and semiconductors, which could stimulate adoption and demand of IoT applications. In our view, it might be too early to call if low ASPs and pricing declines would limit the revenue opportunity in IoT and potentially impact gross margin, while we believe sufficient scale would be required to win in terms of profitability.

The “wearables” category is over-hyped, McConnell observes....MORE

"Eleven Questions About Explainer Journalism"

From The Awl:

What is an “explainer”?

There are a lot of things out there to read. Some of them are long. Many involve complex, nuanced ideas. That doesn’t have to be the case. When it is the case, it’s a failure of journalists to make news engaging and accessible. An explainer is an article that breaks down an important topic into just the things you care about and need to know. It's unlike all other kinds of articles in that way. If you still can’t understand it, that’s on us. That’s our bad.

How do I know what I care about and what I need to know?

Explainers tell you. We are all over this. All you have to do is read words and then click a button to share with your friends. (Facebook is better than Twitter.) Don’t like words? There will be simple charts and neat vids. It’s that simple.

Huh I don’t get it?

That’s fine! We didn’t think you would. Traditional media outlets aren’t equipped to explain most topics to people like you. Let’s see if we can break it down further—just the basics now. What is it you really need to know about explainers.

I don’t know.

Oh, sorry! That was rhetorical. I mean, that was a statement that might have sounded like a question, but it was not. Okay. Now, try and remember the last time you read a news article in its entirety. See, you can’t. You never have. Or the last time you thought, “I understand what’s happening in the Ukraine well enough to make a smart comment about it at a party.” You can’t. Obviously nobody explained to you not to say "the" Ukraine either. Understanding all you need to understand would take literally hours of reading about history. You’re going to click away to watch dogs on treadmills. Who says you can’t have both? Can dogs on treadmills explain international conflicts?...

...MORE

As The Dead Come Back to Life: Watching the Fuel Cell Stocks and Looking for Ideas

The biotechs achieved escape velocity a couple weeks ago and are probably shortable. The Fuel Cell stocks are still heading up and are quite dangerous.
From iBank Coin:

Zombie Investing

Alternative energy names, like PLUG, BLDP, CPST, SCON and FCEL, are the latest craze on Wall Street. This is a sector that was considered to be a joke, a laughing stock teetering on bankruptcy. Now it’s all the rage.

Before that, the shippers came back to life, eating the brains of short sellers from here to China. Before that the biotech sector surged and before that solar stocks skyrocketed, alongside Chinese burritos and education related names.

If there is one thing that is bankable in this market it is this:

ALL DEAD STOCKS COME BACK TO LIFE, LIKE ZOMBIES, TO AVENGE THEIR DEATHS UPON THE SKULLS OF THE SHORTS WHO KILLED THEM.

And that’s it folks. All you have to do, mind you, is isolate a sector that has been bludgeoned, position accordingly, and wait.
What’s next? Is anything still down?

LNG fuel plays: CLNE, WPRT

Steel and Iron: CLF, MTL, SIM, GGB, VALE

Retail: VSI, GNC, JCP, SHOS, TLYS, ARO, LULU, FRAN, AEO, URBN, ETH

Ag Chem: MOS, POT, SQM, IPI, AVD, TNH

...MORE

"White House’s Technology Push a Double-Edged Sword for Low-Wage Workers"

Be careful what you wish for.
And for our legislators, quit favoring capital over labor in taxation if your goal is jobs. However, if your goal is to make money when you leave Congress, don't change a thing.
From Real Time Economics:

The White House’s annual Economic Report of the President pushes a raft of proposals designed to make the U.S. economy stronger and more productive in the long run. Some of them run the risk of making a subset of U.S. workers, who have been front and center for the White House lately, more vulnerable in the short run.

The report, released Monday by the White House’s Council of Economic Advisers, puts a heavy focus on technology investment (alongside research and development, a patent-system overhaul and more) to boost productivity. It frames an entire chapter about productivity gains around the larger debate about widening income inequality, a concern that has propelled the White House’s movement to raise the minimum wage and boost other programs designed to help low-wage workers.

Boosting productivity through technology has long been a double-edged sword for some American workers. Modern factory floors require fewer people to produce more goods. More robots and fewer humans now roam through warehouses. Call centers rely increasingly on computers to field calls and process payments. The displacement of lower-skilled workers in those roles has been a leading factor in the widening inequality seen since the 1970s.

Nobody would argue seriously against the benefits of technology to the overall economy in the long run. But are White House officials worried about the risks to low-wage workers?

“I think you absolutely have to worry,” Jason Furman, chairman of the White House Council of Economic Advisers, told reporters Monday. “Technological change offers an enormous opportunity for our economy. But it also, if done the wrong way, could lead to a big increase in inequality and potentially even a reduction in absolute wages for some.”

“I think it also contains the solution to the challenge if done the right way,” he added.
The productivity of U.S. workers has grown for decades, despite the challenges of globalization. The trouble for the economy is that the gains of that improved productivity have accrued disproportionately to higher-income Americans, as the White House showed here:

...MORE

Natural Gas: Straddle!

If you know which way the pattern breaks you are better at this than I.

 

I'm betting we get some hint at which way this resolves on Thursday morning but until then your guess is as good as mine.
$4.65 UNCH

Turn That Hedge Fund Into An ETF!

Just as volume and spread are the two variables that matter to a market maker...
From Reuters via CNBC:

Hedge funds look to put strategies into ETFs to lure more investors

More client-hungry hedge fund managers are looking to put their investment strategies to work in exchange-traded funds, a move that could exponentially expand their pool of investors but requires them to slash investment management fees.

That is a tradeoff many managers of smaller hedge funds are willing to make, hoping Mom and Pop investors can fuel their growth. Smaller funds are often less able to attract assets from large pension funds and institutions that prefer the biggest hedge funds with billions in assets and long track records.

"It's a matter of access," said Mebane Faber, chief investment officer at California-based Cambria Investments, whose global tactical hedge fund was shuttered and reinvented as the Global Tactical ETF in October 2010.

His ETF now holds some $40 million in assets. He declined to discuss how much growth that represents over his former hedge fund, but he has found it worthwhile enough to consider converting another of his two remaining private funds.

Such moves may become more common because of changes occurring in the $2.4 trillion global ETF space. Exchange-traded funds were originally conceived of as passive index-tracking investments, but more are now actively managed and use alternative strategies like arbitrage and short selling of stocks....MORE 

HT: DealBreaker, whose very next link is about widening tick size!

"El Niño warning puts farmers and commodities investors on alert"

The Pacific Decadal Oscillation decisively entered its cool phase in 2007. During the cool phase the odds of an El Niño event are only about half what they are during the warm phase but they do happen.

If interested, we have a few dozen posts on the El Niño/Southern Oscillation (ENSO) and its interplay with the PDO, drought, famine etc.

From the Financial Times:

Commodities investors and farmers are on alert after the third official warning in a week of an El Niño weather phenomenon emerging that could affect food and energy markets already reeling from extreme weather in many parts of the world.

El Niño refers to a warming of Pacific sea surface temperatures that occurs naturally every few years and can trigger drought in some parts of the world and floods in others, depending on its strength.

Australia’s Bureau of Meteorology said on Tuesday the tropical Pacific subsurface had “warmed substantially” over the past few weeks, meaning sea surface temperatures were likely to rise in coming months.

A recent burst of westerly winds over the far western Pacific was also the strongest seen since at least 2009, the last time an El Niño developed, the bureau said.

Its warning comes a week after the US weather forecaster said there was a 50 per cent chance of an El Niño developing this summer and days after Japan’s weather bureau raised its forecasts of such an event....MORE

Our last couple El Niño posts:

El Nino Won't Come Quick Enough To Break the California Drought
"An El Niño Coming in 2014?"

The most recent plume forecast has all the models at either "El Niño Conditions", a positive anomaly of .5 degree or greater in the Nino 3.4 zone of the Pacific or a full blown El Niño which is the same anomaly but recorded in three rolling three-month periods i.e. five consecutive months:

"23 Commodity, Equity, and Currency Markets since the 2009 Low"

From Attain Capital Management:

It seems like only yesterday we had 700 point down moves in the Dow, Lehman going bankrupt, and billions and billions in bailouts being handed out as the stock market made new lows seemingly every week, dragging down most commodity markets with it. But can you believe it’s actually been 5 years, with the low of the crisis happening 5 years ago yesterday – March 9, 2009. The first 3 years sure went by quickly… as we didn’t really know we were in the clear, and now the last two have been a blur of new highs in the stock market seemingly every week.  My how things change in a hurry.

Now, that was the low in the US stock market – other markets like Crude Oil bottomed before then, and some like Wheat bottom after that – but it’s hard to find many losers among the basket of markets we track since that fateful day 5 years ago. Everything on our list is up since then besides the US Dollar and Japanese Yen (imagine that, the two economies which went nuclear in terms of providing capital to the markets).

Some items of note include Copper outpacing Gold almost 2 to 1… (funny we don’t recall any stories about Copper vending machines over the past 5 year); Cotton surging over 140%, and Crude Oil the only other market not a stock index having more than doubled with gains of 124% (of course that would have been tough to realize with the cost of carry and negative roll yield.)...MORE

Attain are CTA's i.e. Managed Futures.

London in the Algarve: Figs, Almonds and Bankers

And Tawny for dessert
Here's the headline at ZeroHedge:

Europe Weakens Again As Investors Seek The Safety Of... Portuguese Stocks!

From Atlantic Cities:

 

...MORE

It Turns Out That Investing in http://ponzicoin.co/ Wasn't Such a Good Idea

Via Economic Policy Journal:

Bookstore Prowler writes:

This is pure comedy gold. Operator of a bitcoin ponzi website has decided to pull a runner without paying people out: 

http://ponzicoin.co/ 

Reactions: https://bitcointalk.org/index.php?topic=474730.1240

I usually don't laugh at other people's misfortune but it's kind of hard not to laugh when someone knowingly invests in a ponzi scheme, loses money and then gets upset.

USDA World Agricultural Supply Demand Estimates (WASDE)

From AgWeb:
WASDE: U.S. Grain Stocks Reduced on Higher Corn Exports

COARSE GRAINS: Projected U.S. feed grain ending stocks for 2013/14 are reduced with higher corn exports and lower oats imports. Corn exports are projected 25 million bushels higher on stronger world imports and the rising pace of shipments in recent weeks. Continued strong export sales also support the higher figure. Projected corn ending stocks are lowered 25 million bushels. Oats imports are projected 10 million bushels lower as Canadian logistical problems reduce the availability of importable supplies. Small reductions in U.S. oats domestic use and ending stocks are projected. The season-average farm price for corn is narrowed 5 cents on both ends of the projected range to $4.25 to $4.75 per bushel. Price ranges are similarly narrowed for sorghum and oats. The barley farm price is raised 10 cents on the low end of the range to $5.95 to $6.25 per bushel based on recently higher reported prices for feed barley....continued

The reaction since the report was issued at 12:00EDT:

 

10 Years On, The Cunard Liner Queen Mary is Still a Big 'ol Boat

Via qCaptain here's Captain Kevin Oprey with his ship:

...MORE

The ship is currently underway from Adelaide to Melbourne as part of a 119 day cruise.

When Newspapers Do Wealth Management: BestInvest and The Times

From Wealth Manager:

Bestinvest teams up with The Times for new wealth service 

The Times and Sunday Times have teamed up with Bestinvest to launch a wealth service.
The new firm, named Times Wealth Management, will open up an execution-only white-labelled service to readers of the national newspapers.

Readers will be offered four services:

* A non-advised online service with access to more than 2,000 funds

* Personal financial advice from a Bestinvest adviser, which involves an annual portfolio review and asset allocation advice

* Model portfolios run on a discretionary basis

* A full wealth planning service, including advice on pensions and inheritance tax, and regular reviews

The charges levied are the same as the main Bestinvest service, with all proceeds split between the papers’ parent company News UK & Ireland and Bestinvest.

Bestinvest chief executive Peter Hall (pictured) said the service aimed to fill the void left by banks exiting advice....MORE

"Hedge funds raise bullish Brent crude bets by 5 percent"

From SaxoBank's Trading Floor blog:

Hedge funds and other money managers raised their bullish bets on Brent crude oil by 5 percent during the week of March 4, according to data from the ICE Europe Futures Exchange. Gas oil net long was cut by 6 percent.

Source: ICE Exchange, Bloomberg and Saxo Bank
In Brent crude only a small amount of new longs were added despite the concerns related to Ukraine with the bulk of the rise in net-long coming from some additional short-covering. The net-long position remains much less elevated than the one currently seen in WTI crude which leaves the US variety more exposed to weakness.

Source: ICE Exchange, Bloomberg and Saxo Bank

Chartology: Make or Break Time For Copper (and maybe the economy)

$3.0450 last.
Following up on "Uh Oh: Bank Lending Appears to Have Peaked", immediately below.
From All Star Charts:

Paging Doctor Copper

Not all commodities are created equal my friends. As great as this space has been all year and as bulled up as I am, Copper is simply not one of them. Down over 10% so far for 2014, what the heck is up with Copper?

The charts actually look a lot like emerging markets. Which isn’t good. The numbers agree as well – the 3 and 4 year correlations are 0.73 and 0.79 between Emerging Markets and Copper (EEM/JJC). That’s pretty high and the charts tell that story well.

Here is a weekly bar chart going back to the lows put in at the end of 2008. After a monster rally, prices started to peak in early 2011, right around the same time that the MSCI Emerging Markets Index made its highs:

...MORE

Uh Oh: Bank Lending Appears to Have Peaked

The interest rate on the 10-year is not yet flashing deflation signals at 2.79%, down a bit from the 3.04% multi-year high last December but decidedly above the 1.61% all-time low.
From The Capital Spectator:

Has Commercial Bank Lending Peaked?

One of the concerns that inflation hawks continue to discuss is the potential for trouble when banks start lending out all that liquidity that’s sitting on their balance sheets. At that point, we’re told, inflation will return with a vengeance and the Fed’s great monetary stimulus will become a burden. But inflation remains subdued, with consumer prices rising less than 2% lately, or near the lowest levels in modern history. But some analysts say that if the economic growth picks up this year, the inflation threat will finally start to bite. By some accounts, one of the warning signs that this tipping point is here will be rising levels of commercial loans. Actually, bank lending to businesses has already revived in a meaningful degree. But it looks like the trend has peaked. That throws cold water on the idea that inflation is about to roar skyward. A decelerating rate of commercial lending also raises questions about the health of the economy.

Consider the year-over-year percentage change in the value of commercial and industrial loans (C&I). Using monthly data, the pace of growth is decelerating. C&I lending grew 7.1% in January vs. a year ago, according to the latest monthly release from the Fed. In fact, the chart below shows that C&I lending’s annual rate peaked in July 2012 at 13.4% and has been edging down ever since. Instead of threatening higher inflation, this trend seems to imply the opposite.

There are some dark undertones lurking as well. History reminds that a sharply decelerating rate of business lending is often associated with recessions. Granted, it’s always dangerous to use one indicator to model the current state of the business cycle, and that caveat certainly applies to C&I data....MORE

Happy Anniversary Baby: Fourteen Years Ago Today, The Nasdaq Closed at 5048.62

That was its all-time high.
It closed Friday at 4336.22.
So fourteen years later we still need a 16.4% gain from here to hit the nominal all time high.
Any thoughts on how old an analyst, who was 25 in 2000, will be when the Nas regains it's old high?
Inflation adjusted?

Here's a press release that has to rank with the Death of Equities cover as a contrary indicator:

INTERNET.COM'S ISDEX, THE INTERNET STOCK INDEX, BREAKS 1,000, A GAIN OF 1000% IN LESS THAN FOUR YEARS

(New York, NY-March 10, 2000)-internet.com Corporation's (Nasdaq: INTM) ISDEX(r), the Internet Stock Index (http://www.isdex.com), rose above 1,000 for the first time last week. Since its inception in 1996, ISDEX has posted a 1,012% gain, outpacing the Dow and S&P 500, which have only increased 104% and 120%, respectively, during the same period. The ISDEX has also outpaced these indices for this year, with the ISDEX up 29% and both the Dow and S&P down 13% and 5%, respectively. "With a gain of more than 29% since January 1 alone, it is clear that Internet stocks continue as one of the overall economy's strongest sectors," said Alan M. Meckler, chairman and CEO of internet.com Corporation....

Linked at our April '07 post "Indexes, ETF's and Global Warming"

Lyft assembles massive funding round to take on Uber

From Recode via The Verge:

4
inShare

Documents filed last week reveal that ridesharing service Lyft has started work on a $150 million round of funding, amassing $80 million of it so far from big names including Andreesen Horowitz. Though Uber has unquestionably grabbed the top slot in the burgeoning car dispatch industry, Lyft's pink mustaches — attached to the front of drivers' cars — have grabbed enough attention in many big cities to become well-known. Uber competes directly with Lyft through its UberX service, which employs private drivers with their own cars to effectively serve as cabs at a lower rate....MORE

Setlist, Climateer Investing Market Bottom 2009

Some cherrypicked posts from March 2009:
March 3
Marc Faber: Stocks Poised to Rally

Mar. 4
Schork: Seeds Being Sown For Oil Rally
Keynes The Money Manager
China stocks surge 6.1 pct on data, policy pledge (There's Infrastructure and Infrastructure)

March 5
Zimbabwe del Sur: Chavez tightens state control of food amid rocketing inflation and food shortages
I Wanna Be Sedated: Top Strategists Still Expecting a 46% Gain From Here
GE Wrapup: "Treated Like a ‘Leper’ as Investors Punish Shares"; Closing Price; Valuation

GE - General Electric Company (NYSE)
6.66 -0.03 (-0.45%) Mar 5 4:00pm ET
Open: 6.75 High: 7.17 Low: 6.53		Volume: 444,582,156 Avg Vol: 179,604,000 Mkt Cap: 70.33B
Disclaimer

I Wanna Be Sedated: Feels a bit Like September '08
I've posted this song a few times, including September 19, 2008. That was the Friday of the week that saw Lehman Brothers fail, Merrill Lynch merge with Bank of America and AIG become a subsidiary of the U.S. Treasury.
Twenty-four hour days.
The market's swings this week aren't as large, more like a damped harmonic of six months ago but it feels similar.


Citigroup now Deer Nuts (C)

Under a buck.

March 6
Who’s Really Being Propped Up in the A.I.G. Bailout?
Stimulus Spending by State
Early Rally Peters Out: U.S. Markets Down $11 Trillion in 17 Months
Part of the reason the massive bailouts and money creation haven't lit the inflation fuse yet. Between deleveraging, credit writedowns and worldwide wealth destruction we might be looking at a $30 Trillion hit to the world's balance sheet.
Manipulating the Dow Jones Industrial Average

Mar. 8
Rising sea levels from global warming 'could wipe out Norfolk Broads'

Cherchez la femme*.

Monday, March 9
N. Korea threatens war if satellite shot down
Markets: Now Is it a Bottom? What About Now? Ok, Now? (or is it Dow 5000)
Dress Like the Great Depression
Top 10 headlines that could signal a market bottom

March 10, 2013
S&P 500 5% Days
Oil: Contango smashing

March 11
NASDAQ Soars to Levels Not Seen Since.... Last Wednesday 
Did AIG's London Office Lose Half A Trillion Dollars?
Death of the American Dream? (nah)

Friday March 13, 2009
Markets: Where Do We Go From Here?

And many more. March (220 posts)

Barron's Cover: "Beware 3-D Printing!" (DDD; VJET; XONE; SSYS; AMAVF:

Regardless of the insight of the analysis you can count on a "Barron's effect" on Monday.
For the record we are not fans of DDD, VJET or XONE. Arcam and Stratasys have better technology.
If you want to remain exposed to the group short DDD/long SSYS may be an acceptable dirty hedged pair trade.
From Barron's:

The new technology may hold great promise, but the stocks do not. Why the industry darling could tumble 80%.

It was meant to be the moment science fiction finally met reality. This past January, makers of 3-D printers reserved 7,000 square feet worth of space at the Consumer Electronics Show. At their introductory press briefing, CES organizers described how 3-D printing was driving a new industrial revolution. The Las Vegas show floor was littered with small boxes spitting out plastic figurines and minimalist jewelry. Not exactly the stuff of a new world order in manufacturing, perhaps, but the tech world nevertheless declared 2014 the year of the 3-D printer.

Wall Street has been well ahead of the hype. Shares of 3D Systems (ticker: DDD), the industry's largest pure-play stock, are up 370% over the past two years. Stratasys (SSYS) is up 231%. And since their 2013 initial public offerings, ExOne (XONE) and Voxeljet (VJET), are up 140% and 166%, respectively. Each of the companies has a slightly different focus, with 3D Systems increasingly tied to consumers and Voxeljet strictly focused on large-scale industrial machines.

In each case, though, investors are missing the point -- and overpaying in the process. Yes, 3-D printing holds vast potential; it could eventually reshape U.S. industry. But that's because of its applications in industrial manufacturing, which the publicly traded 3-D outfits don't address as effectively as some private companies. The systems of those private firms have been embraced by the likes of General Electric (GE). The industrial conglomerate is currently using 3-D printers to manufacture key parts for its next-generation jet engines.

Pure plays in 3-D printing, meanwhile, seem more interested in consumer novelties and the hobbyist market. Consider Rock Hill, S.C.–based 3D Systems, with a market value of $7 billion. At CES, the company unveiled a dozen new printers, including a sub-$1,000 version of its entry level Cube printer. A few days after the show, 3D issued a press release touting a partnership with Hershey (HSY) to create an in-home chocolate factory. The plan, 3D said, is "to explore and develop innovative opportunities for using 3-D printing technology in creating edible foods, including confectionery treats."

The day of the announcement, 3D Systems shares closed up 3%. The company has a ChefJet sugar and chocolate printer slated for delivery in the second half of the year.

But lately, 3D Systems has grown better at printing press releases than profits. The company has repeatedly missed its own earnings forecasts, while lowering the bar for the future. Early last month, shares fell 20% after management warned about fourth-quarter earnings, blaming higher spending on research and development.

The stock recovered, before falling to a recent $69. Investors have made a habit of overlooking bad news from 3D Systems. A year ago, analysts thought the company would generate $1.31 a share in earnings for 2014. Today, the forecast stands at 82 cents per share. The 37% haircut has been accompanied by a 110% gain in the stock, and Wall Street remains as bullish as ever. Fourteen analysts rate 3D Systems a Buy and four a Neutral. Just three rate the stock as Sell or Underperform.

3D Systems is expected to earn $85 million on revenue of $702 million this year. It currently trades at 84 times earnings, a wild multiple for a company likely to see per-share profit decline by three cents this year.
The hot story for investors is 3D Systems' 37% sales growth. But even on that basis, the valuation looks stretched. At 13 times last year's revenue, 3D Systems is the third most expensive technology stock in the Standard & Poor's 1500, behind only Facebook, at 23 times, and Visa, at 15. Investors are pricing all of the 3-D pure plays at premium valuations; Stratasys, ExOne, and Voxeljet all carry double-digit sales multiples.
Facebook and Visa have unique networks and some power to dictate pricing on its products. 3D Systems is driving down the price of its printers, trying to compete with a wave of upstarts.

FOR ALL THE ATTENTION ON 3D Systems, Stratasys boasts the world's largest installed base of 3-D printers, with roughly 65,000 systems. In 2010, Stratasys partnered with Hewlett-Packard to manufacture 3-D printers under the HP brand. By mid-2012, the companies had canceled the deal, offering little explanation. HP recently said it plans to enter the market, though details are scant.

In 2014, Wall Street sees Stratasys revenue growing 39%, to $674 million, with profit of $117 million, or $2.21 a share, a 20% gain.

As for Germany-based Voxeljet, which has a market value of $540 million, it sold a total of three printers in its most recent quarter, for $2.5 million. This was actually better than a year earlier, when the company sold two used printers. For 2014, analysts expect Voxeljet to earn $1.1 million, or seven cents a share, on revenue of $18 million. The stock recently traded at $35.

"Investors love organic revenue growth," says Whitney Tilson, manager of hedge fund Kase Capital and co-founder of the Value Investing Congress. "The problem is that you really have to differentiate between organic revenue growth and profitability."

Tilson calls 3D Systems a "dream short," and he has been adding to his own short position of late. He's betting against four other 3-D printing names, as well, which he declined to name. "These stocks are being valued as if this is the next coming of the iPhone and iPad combined," he says. He describes walking around CES seeing dozens of companies hawking essentially the same thing. "There was booth after booth of companies with very similar products to 3D Systems. And at lower prices."

He thinks 3D Systems would be generously valued at three times revenue, which would put the stock at $15, 80% below its recent close.

WHILE CES ATTENDEES were gawking at the 3-D showcase in Las Vegas, game-changing developments were taking place 2,000 miles away in Cincinnati, the home of GE's aerospace unit....MORE

Here's the 1-year spaghetti chart of the five stocks, note VJET did not come public until October, 2013.
From Yahoo Finance:

How a Chicago Heiress Trained Homicide Detectives With an Unusual Tool: Dollhouses

From Smithsonian Magazine:

Frances Glessner Lee's miniature murder scenes are dioramas to die for

Frances Glessner Lee (1878-1962) was a millionaire heiress and Chicago society dame with a very unusual hobby for a woman raised according to the strictest standards of nineteenth century domestic life: investigating murder. And she did this through a most unexpected medium: dollhouse-like dioramas. Glessner Lee grew up home-schooled and well-protected in the fortress-like Glessner House, designed by renown American architect H.H. Richardson, but she was introduced to the fields of homicide investigation and forensic science by her brother's friend, George Magrath, who later became a medical examiner and professor of pathology at Harvard Medical School. Instantly captivated by the nascent pursuit, she became one of its most influential advocates. In 1936, she endowed the Department of Legal Medicine at Harvard and made subsequent gifts to establish chaired professorships and seminars in homicide investigation. But that’s not all.

As architect and educator Laura J. Miller notes in the excellent essay “Denatured Domesticity: An account of femininity and physiognomy in the interiors of Frances Glessner Lee,” Glessner Lee, rather than using her well cultivated domestic skills to throw lavish parties for debutantes, tycoons, and other society types, subverted the notions typically enforced upon a woman of her standing by hosting elaborate dinners for investigators who would share with her, in sometimes gory detail, the intricacies of their profession. Glessner Lee oversaw every detail of these dinners herself, down to the menu and floral arrangements. She could probably tell you which wine goes best with discussion about a strangled corpse found in a bathroom. But the matronly Glessner Lee -- who may have been the inspiration for Angela Lansbury’s character in "Murder She Wrote"– wanted to do more to help train investigators. She wanted to create a new tool for them....MORE

Now the NSA Infiltrates the Internet To 'Manipulate, Deceive And Destroy Reputations'

Imagine having to sit through these PowerPoint presentations:

"...Do I press this button here? Function-F7? No, that's not right. Hmmm. Maybe I'll have to reboot...." 
"Where'd you do your graduate work?"

I'll take waterboarding thank you.

From Techdirt:

A few weeks ago, Glenn Greenwald, while working with NBC News, revealed some details of a GCHQ presentation concerning how the surveillance organization had a "dirty tricks" group known as JTRIG -- the Joint Threat Research Intelligence Group. Now, over at The Intercept, he's revealed the entire presentation and highlighted more details about how JTRIG would seek to infiltrate different groups online and destroy people's reputations -- going way, way, way beyond just targeting terrorist groups and threats to national security.

Among the core self-identified purposes of JTRIG are two tactics: (1) to inject all sorts of false material onto the internet in order to destroy the reputation of its targets; and (2) to use social sciences and other techniques to manipulate online discourse and activism to generate outcomes it considers desirable. To see how extremist these programs are, just consider the tactics they boast of using to achieve those ends: “false flag operations” (posting material to the internet and falsely attributing it to someone else), fake victim blog posts (pretending to be a victim of the individual whose reputation they want to destroy), and posting “negative information” on various forums.

For years, people have said that the purpose of groups like the NSA and GCHQ were merely "signals intelligence," which were about understanding and decoding signals, not about taking any sort of offensive standpoint. However, as the Snowden docs have repeatedly revealed, the mandate of these organizations has long been much more offensively based, and they seem to have little problem with using questionable tactics to destroy people's lives. As Greenwald notes, is this really a power you trust a totally secretive government agency with almost no real oversight to use without it being abused?

There's a lot more in Greenwald's writeup, which you should read, but just a few of the key slides are worth reading to get a sense of what's going on here. This isn't just about infiltrating terrorist organizations. They seem to be using these kinds of techniques on just about anyone they dislike, which harkens back to the Hoover-era FBI infiltrating and seeking to discredit anti-war groups. It also raises very serious questions about whether these efforts are being used to stifle political expression.

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The full presentation is embedded below. The cover slide is really something....MORE

Fibonacci Flim Flam

This is a repost from a couple years ago.
You have to be careful with this stuff. If someone presents a complicated explanation for their technical analysis my B.S. detectors start flashing, it doesn't mater it it's Elliot Wave alternate wave counts or flipping between point-and-figure and candlestick charts to show the chart "predicted" a move. There is a fine line between genius and madness.
[don't I know it. -ed]
From Lock Haven University:

...Footnote on dubious investment schemes.

I remarked that stock traders and investment counsellors these days often use Fibonacci ratios as a guide to guessing their predictions. There is even computer software for making market predictions that claims to use "Fibonacci methods". This is one of the methods used in "technical trading". Using numbers and charts to make predictions justifies the label "technical", though the results would be just as good had the patterns of tea-leaves been used. One only has to eavesdrop on the websites and forums these people frequent to discover that many of them still believe in the "magic of numbers". Whole books tout these methods, with testimonials to their success, and these do make money, for those who write the books. One fellow who uses Fibonacci ratios frankly admits that they may not be "magic" but they do make his presentation charts look more impressive to clients. Of course the efficacy of such methods has never been scientifically tested. And why should anyone waste the effort? 

 
One such fellow emailed me, complaining about my negative comments. I soon discovered that this fellow was a sucker for all sorts of pseudoscientic numerology. He even tried to tell me how valuable was the Martingale system, popular in 18th century France and still used by some gamblers. It's simple. Each time you win you make the same size bet the next time. When you lose, you double the size of your bet the next time. Of course, any "system" can seem to work in the short run, once in a while. But in the long run (when played for a long time, or many times) it has no advantage, and while your chance of winning in the short run may seem to be improved, your chance of losing big increases the longer you play. Statisticians have analyzed such systems and concluded they are deceptions, but gamblers are often susceptible to such deceptions. And what is the stock market, but a gambling game with confounding variables, and with the players themselves affecting the odds?

Then this guy tried to tell me that Fibonacci numbers show up more often in winning lottery numbers. He could provide no data supporting that. Then he claimed Fibonacci numbers show up more often in the digits of phone numbers in the phone book. Well, duh? Of the digits 0 through 9, six are Fibonacci digits (0, 1, 2, 3, 5, 8) and four are not (4, 6, 7, 9), so Fibonacci digits should show up about 60% of the time. No great mystery there. The only example he could produce, from his own "extensive research", was a set of 200 phone numbers, 65% of the digits being Fibonacci digits. That's well within the limits of error for that small size sample. [3]

Some say that you can increase your success in the stock market by rolling dice or throwing darts to make your choices. Such investments will, in the very long run, averaged over many investors, do as well as if you used a broker, and you won't have to pay the broker's fee. I am sure there are brokers who shun mystical and magical formulas, but I remain unconvinced that even they earn their large fees.

More Fibonacci Fakery.

This picture was emailed to me by someone who could not remember the source. It is a clever piece of deception. I suspect the picture was delibrately embellished to make fun of Fibonacci foolishness. If the person who created this would like credit, please get in touch. 

The water path isn't a Fibonacci spiral, but someone has cleverly superimposed the golden rectangle on part of it that at first glance looks like it is. Look carefully. That large inner rectangle should be a square, but it is in fact wider than high. The rectangle in the upper right corner is almost a square. If you tried to cheat by reducing the horizontal magnification, you could make the large one square, but the smaller one would no longer be nearly square. I think that's clear forensic evidence that someone was deliberately cheating, probably to make fun of what I call "Fibonacci Foolishness". The "hand-drawn" appearance of the rectangles seems contrived to disguise the cheating. (They should have used computer drawn clean straight lines and perfect geometry.) Such cheating is often done with the pictures of Nautilus shells seen in books (see above). A physicist would conclude immediately that this can't be a golden spiral, nor any of the textbook spirals common in physics. Textbooks of important mathematical spirals show pictures and equations for the Spiral of Archimedes, the logarithmic or equiangular spiral, the hyperbolic or reciprocal spiral, the parabolic spiral, and my favorite, the involute of a circle. The reason is simple. Such spirals are radially unbiased. In this picture gravity provides a bias (and distortion) compared to a similar process happening in a horizontal plane. Also, the source of the water, her wet hair, isn't stationary. She produces this dramatic picture by flinging her head and body rapidly upward and backward. 

This sort of cheating is what I object to. If one wants to be honest one might say this picture "suggests" a golden spiral. The "fact" of it being "something like" a golden spiral tells us nothing useful about it. Deeper inquiry might lead to design of a water hose rotating about a fixed vertical axis to experimentally investigate whether this process could produce something closer to the Fibonacci spiral. I have no reason to predict that outcome with certainty. It might just be an involute of a circle. I've challenged some mathematicians with this problem, but they don't take the bait. 

HT: Maoxian

Also at Mr. Simanek's LHUP webpage:

The Museum of Unworkable Devices. Perpetual motion machines
as physics puzzles.
Intelligent Design Creationism: Fraudulent Science, Bad Philosophy.
Myths and Mysteries of Science. Removing the mystery.
Cutting Edge Science. Profundity or parody?
Illustrated Lectures on these subjects.
Uncle Don's Notebook. | Bob Schadewald's Corner.
Physics and Astronomy. | Physics Abused.
History and Philosophy of Science.
Skepticism, pseudoscience, urban Legends.
Humor, satire, parody, mostly about science.
Hoaxes. | The Ed-Biz. | Quotes. | Illusions and 3-D photography.
Articles written for print publication.

"Former NASA Engineer Makes Mind-Boggling Cake Creations"

File under: Things I can't do.
From My Modern Metropolis:

...If you're a Food Network fan, you may already know the name BethAnn Goldberg. She's the two time gold medal champion on the show "Challenge" and the owner of Studio Cake, a custom-order bakery in Menlo Park, California. The Stanford alum and former NASA engineer uses her masters in engineering and work experience from NASA to construct incredible works of edible art. As she tells us, "Engineering school set me up for being an amazing problem solver. Whether it is the challenge of owning a small business and weathering an economic downturn or making supports for a 3-foot tall cake, it all comes down to problem solving and planning to make the best outcome possible."

Though she spends a majority of her time making beautiful wedding cakes (they regularly appear on the popular wedding blog Style Me Pretty), it's her special, sculpted cakes that will have you talking. As she states about them, they're "cakes that look like anything but! If you can dream it, we can create it in cake!" Who wouldn't be fooled into thinking they're looking at a humongous sandwich? "The stacked sandwich cake is actually a four tiered cake in disguise," Goldberg says. "It is a large column of cake with sandwich fixings on the perimeter. It took the better part of a work week to create, but who's counting?"...MORE

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"As Tesla Cools, A Few Brave Shorts Creep Back In" (TSLA)

The stock closed at $246.21, down $6.73. Here's the last month's action via Yahoo Finance:

From MoneyBeat:

After a 32% rally in the past month, Tesla Motors Inc.TSLA -2.66% shares finally seem to have found their plateau, at least for the moment. The stock is little changed in the past five sessions, up just 1%, at around $247.

Also finding their level: Traders betting against Tesla. Short-selling of the stock plunged over the course of the past year, as Tesla’s persistent rally has made it harder to justify betting against it. Now, it is beginning to tick up again, though just a smidge.

Last March, nearly 25% of Tesla shares available to be borrowed by shorts were loaned out, according to Markit. (Short sellers borrow stock to sell it, hoping to buy it back later at a lower price.) The measure fell through 2013, and went from 17% at the beginning of 2014 to just 11% in February. Now, in the past week, it has edged back up to just under 13%, Markit data showed.

That drop in short-selling was critical, because it played a part in enabling Tesla to complete a giant convertible bond offering last week, according to traders and people familiar with the company’s thinking.

The link between the two lies in how some traders play the convert market. These traders, often hedge funds, want to get a pure-play exposure to Tesla’s credit, which is the interest-paying component of the convertible. What they don’t want is exposure to the stock price, which is the part of the convertible that can be exchanged for shares....MORE

There's one more wrinkle in the convertible story we'll get to next week.

London Listed Miners Also Whupped (GLEN; RIO)

Following up on the hits to U.S. miners in "It Doesn't Matter What They Mine: "The Miner Massacre...."".
From the Financial Times:

China’s first onshore default sent London-listed miners plunging on Friday, with Anglo American leading the fallers.

Miners dropped in tandem with metals prices on rumours that the default of Shanghai Chaori, a small solar power company, was prompting banks to call in loans to the private steel industry. Iron ore producers were weakest, with Glencore down 4.4 per cent to 324.9p, Rio Tinto off 3.3 per cent to £32 and Anglo losing 6.6 per cent to £14.63.

Analysts also highlighted risks around South Africa’s approval of amendments to its mineral development act. The act gives South Africa’s mines minister the power to restrict exports of minerals by classifying them as “strategic”.

Anglo currently sells thermal coal for just $17 a tonne in South Africa, against $74 to export markets, and iron ore for $62 a tonne against $115 internationally, according to Liberum....MUCH MORE

Like Intel, Tesla Has No Plans To Build Manufacturing Facilities in California, Ever Again (TSLA)

As we've pointed out over the years, Intel has publicly stated they will never again build a manufacturing plant in California (Arizona says thanks for the new $5Billon plant), Google and Microsoft will not pay California utility rates when they build server farms, the entire aerospace industry has adiosed, and on and on and on.
From the Los Angeles Times:

California positively gets a negative from Tesla on battery factory
Tesla has already ruled out California for the plant costing as much as $5 billion and employing 6,500 workers. Arizona, Nevada, New Mexico and Texas are in the running. 

California loves Tesla Motors.

The Palo Alto electric car maker's Model S sedan is the state's new eco-luxury status symbol. Californians bought more than a third of Teslas sold globally last year. Residents of the state pack the order list for Tesla's next offering, a sport utility vehicle.

California pollution-control policies enable Tesla to rake in tens of millions of dollars each year from selling environmental credits to other automakers — a key source of Tesla's revenue.
But is this a case of unrequited love? When it comes to building a $4-billion to $5-billion battery factory that will employ 6,500 workers, Tesla is shunning the Golden State.

The automaker is looking at 500- to 1,000-acre sites in Arizona, Nevada, New Mexico and Texas. Although the location hasn't been determined, Tesla has crossed California off the list. The company declined to comment on the reasons.

State officials aren't saying much either. A spokesman in Gov. Jerry Brown's administration said the state presented a proposal to the automaker with several possible sites, but that the automaker didn't bite.
Brown's office provided no other details.

"The Governor's Office of Business and Economic Development maintains a strong partnership with Tesla and continues to work with them on future opportunities in California," the office said in a statement....MORE

Of course they'll tell you the lack of plans may change but just you watch.

"OPEC oil output: a big jump, lifted by Iraq"

From Platts:

Platts Survey: OPEC Pumps 30.11 Million Barrels of Crude Oil Per Day in February
Up 240,000 b/d from January, Driven by Surge in Iraqi Oil Exports

London - March 7, 2014

Crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) climbed by 240,000 barrels per day (b/d) to 30.11 million b/d in February from 29.87 million b/d in January following a surge in Iraqi exports and despite new setbacks in Libya, a just-released Platts survey of OPEC and oil industry officials and analysts showed.

“These are the sorts of output numbers that not long okago, when combined with the rising production from North America, looked like they might weigh on the market and cause a fall in prices,” said John Kingston, Platts global director of news. “In particular, the Iraq numbers are surprising, given that output there has been troubled in recent months. And yet, West Texas Intermediate crude is solidly above $100, Brent prices are up near $110, and world inventories have been drawing sharply. With all of this supply at the ready and prices greater than $100 per barrel, it might be time to review some of that conventional wisdom.”

The February total is the highest since August 2013, when the Platts survey estimated output at 30.28 million b/d.

With the Basrah terminal in full operation and weather conditions good throughout the month, Iraq's southern export average of 2.5 million b/d was the highest rate since 1979....MORE

It Doesn't Matter What They Mine: "The Miner Massacre...."

From Barron's Stocks to Watch Today:

The market is playing whack-a-mole with miners of all stripes today. There are the coal miners, with Alpha Natural Resources (ANR) and Peabody Energy (BTU) getting smacked. There are the base-metal miners like Freeport-McMoRan Copper & Gold (FCX), which have been hammered. And even gold miners like Newmont Mining (NEM) and Agnico-Eagle Mines (AEM) are down hard.

Sterne Agee’s Michael Dudas and Satyadeep Jain explain why:

Broadly, metals and mining shares down 3%-4% while met focused names pressured 7-9%. While this morning’s release of the February employment report has generated possible marginal confidence in a more hawkish Fed, and a dollar bounce, recent Chinese credit market concerns caused industrial commodity spot prices in copper, met coal and iron ore to retreat around 5%....MORE

Yikes! "Hedge Fund Short Interest In Europe Surges; Lansdowne Shorts Near $5B"

Any "not-as-bad" news, say Germany getting their energy act together, or France not being so French and the short covering would blow the lid offf the bourses.
From ValueWalk:

12% rise in new shorts is "significant," leading to $31 billion total short position across EU, most held by prominent hedge funds located in the UK.

Short interest in European shares has surged to nearly $31 billion, up $3 billion from last month, according to new research from Novus Partners, a research and analytics provider to institutional investors.
February was the most “significant” jump in short EU stock interest since Novus has been tracking European short interest, according to Stanley Altshuller, Co-Founder and Chief Research Officer at Novus.  He attributed the rise partially to those complying with regulations put in place in 2012 but more significantly increased short positions across Europe.

Tiger Cubs and Chanos short Gemalto

Among the more interesting positions was a short in Gemalto, a European digital security.  The stock garnered shorts from known Tiger Cub disciples at Blue Ridge Capital, Lone Pine Capital and Maverick Capital, which all share a similar investment style, as well as garnering a short from Kynikos Associates.  Maverick Capital, run by Tiger Cub Lee Ainslie, had the largest short at $173 million, followed by Blue Ridge Capital’s John Griffin at $163 million and Lone Pine Capital Management’s Steve Mandel....MORE

Mercuria: "Behind the $100 Billion Commodity Empire That Few Know"

From Bloomberg:

In less than a decade, Marco Dunand and Daniel Jaeggi have turned a 10-person company supplying oil to a pair of Polish refineries into the world’s fourth-largest commodity trader with revenue topping $100 billion last year.

Now Dunand, 52, and Jaeggi, 53, are executing a plan to propel Geneva-based Mercuria Energy Group Ltd. nearer to the top independent traders, Glencore Xstrata Plc (GLEN), Trafigura Beheer BV and Vitol Group. After entering exclusive talks last month to buy JPMorgan Chase & Co. (JPM)’s $3.3 billion commodities unit, Dunand and Jaeggi will probably announce a deal within the next week, according to two people with knowledge of the situation.

“This gives them a strong opportunity for growth and puts them close to the top players in the league,” said Roland Rechtsteiner, a partner at management consultant Oliver Wyman, who’s published a series of reports on the industry written with Trafigura co-founder Graham Sharp. “Scale is going to be more important than ever.”

Mercuria, named for the Roman god of trade, is targeting a JPMorgan business that includes energy trading and storage assets in North America, where a boom in shale oil and natural gas has transformed the flow of commodities worldwide. The unit has generated $750 million in annual operating profit before compensation costs, according to people who have seen documents circulated in relation to the sale.

Asset Shift
Banks including JPMorgan and Morgan Stanley (MS) are exiting or reducing their commodities businesses as regulators crack down on risk. Revenues for the 10 largest investment-bank commodity businesses fell to $4.5 billion in 2013 from $14 billion in 2008, according to London-based analytics company Coalition.
Independent traders including Mercuria are filling the void. Owning businesses that produce, store, transport or process raw materials can provide an advantage in trading at a time when expanding populations have pushed global commodity demand to a record.

A deal with JPMorgan would further challenge Dunand and Jaeggi, who each own 15 percent of Mercuria’s equity, to integrate the operations into a company that is already growing rapidly. Benoit Lioud, a Mercuria spokesman, declined to comment on talks with JPMorgan.

From 2011 to 2013, Mercuria hired 570 people, including key executives from investment banks as it expanded beyond energy. That took the headcount to 1,200 from about 10 in 2004.

Goldman Vets
The hires include Houston-based Shameek Konar, a former managing director with Goldman Sachs (GS) Group Inc. who is chief investment officer overseeing Mercuria’s corporate development, including the JPMorgan negotiations. Victoria Attwood Scott, Mercuria’s head of compliance, also joined from Goldman Sachs.

Roger Jones, the former head of commodities at Barclays Plc (BARC) who has spent more than a quarter-century trading, was hired in 2012 to head its non-oil business and join the board.

Commodities other than oil now represent more than 50 percent of revenue, which totaled $98 billion in 2012 and generated $343 million in profit, according to financial statements seen by Bloomberg.
“What really makes them different is their growth,” said Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland. “They have grown at a very fast pace in the oil markets, and now they are expanding into other commodities.”

Oil Trading
Mercuria traded 182 million metric tons of oil or oil equivalent in 2012, according to its website. Vitol, the largest independent oil trader, handled 261 million and Trafigura traded 102.8 million tons of oil and petroleum products. Brent crude rose 3.5 percent that year in a fourth annual advance. It slipped 0.3 percent in 2013 and is down 2.6 percent this year at about $108 a barrel.

With more trading companies trying to gain an edge by owning businesses that produce, store or process commodities, Mercuria followed suit. It now has stakes in a coal mine in Indonesia, oil and gas fields in Argentina, oil storage in China and a biodiesel plant in Germany. In June, it invested $50 million in a Romanian gas producer.

The JPMorgan unit employs about 600 and represents a range of assets assembled over decades by firms including Bear Stearns Cos. and RBS Sempra, which the bank bought during an acquisition binge beginning in 2008.....MORE