Thursday, February 22, 2018

San Francisco: "UN expert decries homeless conditions in Bay Area as ‘cruel,’ ‘unacceptable’"

You may have seen the story.
The UN's special rapporteur on Adequate Housing has been jet-setting around, Mexico City, Mumbai, S.F., documenting what she sees:
“In Mexico City, I visited a low-income settlement that had been moved by the city onto empty land near a railway line,” [Farha] said. “They had no running water. They stole electricity.” The camp was noisy and dangerous. She noted that the camp in Mexico is virtually identical to those she visited in Oakland, including the Wood Street and 23rd Avenue encampments....
The above snip is from the East Bay Express reprinted in Curbed San Francisco.

Curbed has had one of the most impressive series on the situation of any major media.
There's the January 22 piece  we used for the headline which wraps up with:
After her trip to the Bay, Farha headed out to assess conditions in LA, an errand she told the East Bay Express she dreaded after observing encampments here.
Additionally they had coverage a week later with "How SF tourism industry deals with the homeless crisis":
“I actually think it’s the worst it’s ever been”

February 12's "San Francisco backs new law to intervene with severe homeless population":
“This is a public health issue and needs to be treated as such”

February 19's "Some SF streets filthier than world’s poorest slums, says UC Berkeley professor"
So kudos to Curbed.

Someone else who's been pointing out various aspects of the culture that is San Francisco is Elaine Ou who we linked to last summer in: San Francisco's Dirty Little Secret
And again in November's "Elaine Would Prefer That Amazon Not Move to San Francisco (AMZN)".

As I noted the first time we linked to the Curbed headliner:
It's a deliberate policy decision by the municipal and county government. More on that point next month....
Still not ready to do that but I thought we should update with the nod to Curbed.

Daily Mail Schadenfreude: Man's Ferrari Is Impounded, Towed

Granted, if you (or dad) can afford the car you can afford the £25K insurance premium so not having it is stupid but the DM seems to be taking quite a bit of pleasure in this story.

Moment limited edition Ferrari is towed away in front of stunned onlookers in Mayfair after police seized £500,000 supercar because it wasn't insured
    • Ferrari 458 Speciale Aperta, one of only 499 made, seized off Berkeley Square in London on Sunday afternoon
    • The incident attracted 20 to 30 onlookers who watched the £500,000 be towed away by police officers
    • Police said the driver was reported on suspicion of using the vehicle without insurance
      This is the moment a rare £500,000 Ferrari was towed away in front of stunned onlookers in Mayfair after police seized it for having no insurance.

      The Ferrari 458 Speciale Aperta, one of only 499 ever made, was stopped just off Berkeley Square in London on Sunday at around 2pm.

      The incident attracted a crowd of around 20 or 30 onlookers with people filming the moment the Ferrari was lifted onto a towing vehicle. Police said the driver was reported on suspicion of using the vehicle without insurance....MORE
      http://i.dailymail.co.uk/i/pix/2018/02/07/19/48F6D8C800000578-5363263-image-a-4_1518031096871.jpg

      The Porsche in front of the Ferrari is dad's 918.

      "China overtakes US in AI startup funding with a focus on facial recognition and chips"

      NVIDIA watches.
      And yours truly writes stuff like Jan. 15's "'Can Chinese AI Chip Makers Compete with Nvidia?' (NVDA)":
      Not yet.
      However...the fact China not only built the world's fastest supercomputer but did it with chips they designed and manufactured themselves, see 2016's "Milestone: China Builds The (NEW) World's Fastest Supercomuter Using Only Chinese Components (and other news) INTC; NVDA; IBM" combined with our first hit of the three cities named in: November 21, 2016 "Artificial Intelligence: What Could Derail NVIDIA? A Lab in Shenzhen; A Basement in Moscow; An Office in Bristol (NVDA)", albeit a year later:

      "Sequoia Backs Graphcore as the Future of Artificial Intelligence Processors" (NVDA; INTC)
      November 13, 2017
      BRISTOL, England, Nov. 13, 2017 — Graphcore has today announced a $50 million Series C funding round by Sequoia Capital as the machine intelligence company prepares to ship its first Intelligence Processing Unit (IPU) products to early access customers at the start of 2018....
      makes one think the lab in Shenzhen idea is not as far out as it had been....
      And today's headliner from The Verge:
      The competition between China and the US in AI development is tricky to quantify. While we do have some hard numbers, even they are open to interpretation. The latest comes from technology analysts CB Insights, which reports that China has overtaken the US in the funding of AI startups. The country accounted for 48 percent of the world’s total AI startup funding in 2017, compared to 38 percent for the US. 

      It’s not a straightforward victory for China, however. In terms of the volume of individual deals, the country only accounts for 9 percent of the total, while the US leads in both the total number of AI startups and total funding overall. The bottom line is that China is ahead when it comes to the dollar value of AI startup funding, which CB Insights says shows the country is “aggressively executing a thoroughly-designed vision for AI.”

      China’s natural advantages in AI are well-documented. Compared to the US, it has a huge population (1.4 billion), which offers a wealth of data and opportunity for companies to scale quickly. Its AI sector also has the backing of a central government that’s able to quickly shift resources (as opposed to the missing-in-action White House), and the country’s looser approach to digital regulations means companies can experiment more freely....MORE 
      https://cdn.vox-cdn.com/thumbor/eKCNvcJ-yini1zfqN-bKgcYZls8=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/10276127/Screen_Shot_2018_02_22_at_1.32.35_PM.png


      Now, about that basement in Moscow...
      More to come. 

      Dollar Index: Rejected at 90 (DXY)

      What Had Been Support (the 90-line, Feb. 7-13) Is Now Resistance?

      Not really, those terms only apply to instruments that are actually traded, where chart memory comes into play: "When I get to breakeven I'll get out" and all that. But his is what the floor becoming the ceiling looks like:


      If you see that set-up in an individual currency or perhaps more profitably in an equity, you'll have that flash of pattern recognition that makes you think: "I should look into this."

      And with a more rational focus, for today at any rate, Marc Chandler from Brown Brothers Harriman with his personal blog Marc to Market:

      All Eyes on Equities
      The dramatic reversal of US shares yesterday in the last hour of trading has once again pulled the proverbial rug beneath the feet of investors. The turn down, moreover, occurred near important technical levels, seemingly adding to the significance.

      Global equities have followed suit. The MSCI Asia Pacific Index fell 0.8%, despite a 2% rally in Chinese markets re-opening after the holiday celebration. European bourses have been market down and the Dow Jones Stoxx 600 is off by little less than 1% in late morning turnover. That said, European shares opened lower still but have stabilized, perhaps waiting for fresh cues from the US markets. The S&P 500 is straddling unchanged levels.

      The S&P 500 traded on both sides of Tuesday's range yesterday and closed below its low. The outside down day is bearish price action. The S&P 500 was unable to take out Monday's high and it just nicked the 2743-level we have identified as key. The S&P 500 had bounced from 2532.7 to 2754.4 since February 9. Before anticipating a return to the lows, there are some mile markers on the way that will be watched. First, the 2669.7 area is a 38.2% retracement of the bounce and 2643.5 is 50%. Similar levels for the Dow Industrials are found at 24640.8 and 24396.3 respectively.

      The VIX actually closed a little lower yesterday (20.02 vs. 20.60). It is slightly firmer today but it is below the 21.6 high seen at the start of the week or even the 21.0 seen yesterday. Meanwhile, the Treasury market has steadied. Yields are off 1-3 bp through coupon curve. It has a great deal of new supply to digest, and there is another $29 bln (seven-year notes) that will be raised today. When looking at the price action closely, it as if the S&P 500 made its highs about 25 minutes after the FOMC minutes were released, and did not slip to new lows for a little more than half an hour. The 10-year yield initially slipped a basis point, but then climbed. Yields peaked a little before the S&P 500 made new lows for the day.

      We do not see much new news in the FOMC minutes. The January meeting was seen in real time as a hawkish hold and the statement reflected an upgraded economic assessment and greater confidence that inflation would move toward target. It seems clear that the fiscal stimulus helped boost the near-term confidence. While much attention has been devoted to debating whether the March dot plots will point to four hikes this year instead of three, which was the case in December, seems, the fact is that the Fed funds futures are not fully pricing in three hikes this year. That gap between the market and the Fed is closing gradually, but remains and it is that adjustment that seems key for the investment climate.

      We have argued that there is an accumulation of evidence that the US economy is showing some classic sign of being late in the expansion cycle. These included, metrics like the 12-month moving average of non-farm payrolls, auto sales, credit card delinquencies, and financial speculation (cyber-currencies?). The eurozone economy in contrast was seemingly accelerating. However, after softer PMIs, Germany reported softer ZEW and weaker IFO survey, and France reported all its February business confidence readings decline in February. Of note, the German IFO expectations component fell the most in two years (105.4 from 108.3) and is at its lowest level in five months. ....MORE...   

      Cambridge, Oxford Uni's, Electronic Frontier Foundation Report: "The Malicious Use of Artificial Intelligence:..."

      It's all about risk.

      First up, Engineering & Technology, Feb. 21: 

      AI is a threat to global stability, warns Cambridge University report
      Artificial intelligence (AI) could be used by rogue states to cause havoc and disruption, according to a new report from Cambridge University’s Centre for the Study of Existential Risk. 

      In a report titled The Malicious Use of Artificial Intelligence: Forecasting, Prevention, and Mitigation, the university body warns that malicious manipulation of AI could create a destabilising effect and calls on governments and corporations worldwide to ensure that this does not happen.
      It also warns of the rise of “highly believable fake videos” impersonating prominent figures or faking events to manipulate public opinion around political events.

      The 100-page report identifies three security domains (digital, physical and political security) as particularly relevant to the malicious use of AI. It suggests that AI will disrupt the trade-off between scale and efficiency and allow large-scale, finely-targeted and highly-efficient attacks.
      The authors expect novel cyber-attacks, such as automated hacking, speech synthesis used to impersonate targets, finely-targeted spam emails using information scraped from social media, or exploiting the vulnerabilities of AI systems themselves (e.g. through adversarial examples and data poisoning).

      Likewise, the proliferation of drones and cyber-physical systems will allow attackers to deploy or repurpose such systems for harmful ends, such as crashing fleets of autonomous vehicles, turning commercial drones into face-targeting missiles or holding critical infrastructure to ransom....MORE
      At the EFF, Feb. 21, their particular interest:

      The Malicious Use of Artificial Intelligence: Forecasting, Prevention, and Mitigation
      ...At EFF, one area of particular concern has been the potential interactions between computer insecurity and AI. At present, computers are inherently insecure, and this makes them a poor platform for deploying important, high-stakes machine learning systems....  
      From GigaOm (yes, they're still alive) some additional thoughts:

      What’s missing from the Malicious Use of Artificial Intelligence report?
      Only a fool would dare criticise the report “The Malicious Use of Artificial Intelligence: Forecasting, Prevention, and Mitigation,” coming as it does from such an august set of bodies — to quote: 
      “researchers at the Future of Humanity Institute, the Center for the Study of Existential Risk, OpenAI, the Electronic Frontier Foundation, the Center for a New American Security, and 9 other institutions, drawing on expertise from a wide range of areas, including AI, cybersecurity, and public policy.”
      Cripes, that’s quite a list. But let me at least try to summarize its 100 pages of dense text.
      – There’s a handy executive summary and introduction
      – 38 pages cover all the things that could go wrong
      – 15 pages describe ways to not let them happen
      – 33 pages cover the people and materials referenced
      It’s difficult to argue with any of it, on the surface at least. Particularly the overall message: there could be bad things, and we should not sleepwalk into them. While this is welcome advice, one factor is noticeable by its absence. Strangely, as the report comes from groups for whom the scientific method should be as familiar as brushing one’s teeth in the morning, it lacks any discussion, or indeed conception, of the nature of risk.

      Risk, as security and continuity professionals know, is a mathematical construct, the product of probability and impact. The report itself makes repeated use of the term ‘plausible’, to describe AI’s progress, potential targets and possible outcomes. Beyond this, there is little definition.

      We can all conjure disaster scenarios, but it is not until we apply our expertise and experience to assessing the risk, that we can prioritise and (hopefully) mitigate any risks that emerge.
      So, without this rather important element, what can we distil from its pages? First we can perceive the report’s underlying purpose, to bring together the dialogues of a number of disparate groups. “There remain many disagreements between the co-authors of this report,” it states, showing the reality, that it is a work in progress: to coin an old consultancy phrase, “I’m sorry their report is so long, we didn’t have time to make it shorter.”...MUCH MORE
      And the report via the EFF (101 page PDF)

      Wednesday, February 21, 2018

      Questions America Wants Answered: "How can I optimise my wardrobe?"

      From The Economist's 1843 Magazine, Feb. 6:

      An economist’s guide to dressing well
      Captain Samuel Vimes, denizen of Terry Pratchett’s “Discworld”, posited the “Boots” theory of socioeconomic unfairness: the rich were rich because they could afford to buy boots that cost $50 today but lasted a decade, while poor Vimes (with his copper’s coppers) was stuck buying $10 boots that wore through in a year. The seemingly cheaper boots would cost him twice as much in the long run, and leave his feet wet most of the year to boot (if you will). Banerjee and Duflo might phrase it differently, but the general concept of capital constraints preventing long-term optimal spending is familiar to any economist.

      In theory, then, buying costlier clothes might be prudent in the long run. After all, the actual value of an item of clothing is the purchase price divided by the number of times you wear it: an expensive jacket that you wear every day is ultimately better value than a sale-rack shirt that you only wear once. However, that logic depends on whether your $50 boots are truly going to last a decade. The savings evaporate if you’re liable to lose them, or if you’ll be embarrassed to wear them once fashions change, or if, heaven forbid, some expensive items of clothing are not actually better quality, but just charging for a logo.

      That said, a further consideration is whether by dressing to impress you can, for example, acquire a better job that will get you to a higher salary bracket, far exceeding the cost of your fancy threads. “Costly thy habit as thy purse can buy…For the apparel oft proclaims the man,” advised Polonius, a figure of noted acuity. Many economists have similarly suspected that, in the world of business, a fine wardrobe and bland opinions will get you further than the inverse.

      However, this is the kind of tricky signalling question where causality is very hard to establish. Do people do well in business because, to quote the economist J.K. Galbraith, they successfully “articulate the currently fashionable cliché”, or because they’re the kind of person with the social and financial capital necessary to climb the greasy pole and to stay on top of fashion trends (without getting too much grease on their outfit)? If you buy a $1,000 dollar suit, will your bosses be impressed, or mortified that you paired last-season’s shirt with the wrong brand of cufflinks? As Marge Simpson once discovered, a $28,000 suit can get you invited to the country club, but once you get there someone will notice that you always wear the same suit. Almost by definition, the kind of class-based signalling that expensive clothing aims to achieve is hard to get right; if it weren’t, it wouldn’t be an effective signal.....MORE
      Somehow related at Going Concern, February 2014:
       
      Turns Out Your Non-Diverse Wardrobe Probably Makes You a Better CPA
      Guys in public accounting, how many blue shirts do you own? For the ladies, how many of the same cardigan in different colors do you own? I get it, I rotate the same few suits when I actually have to appear in public for work in Washington, with the scarf I tie around my neck the most exciting and varying part of my sensible outfit.

      As it turns out, those of you with fewer wardrobe choices might actually be at least as smart as our own president, at least according to this Fast Company piece:
      As he told Vanity Fair:
      "You'll see I wear only gray or blue suits," [Obama] said. "I'm trying to pare down decisions. I don't want to make decisions about what I’m eating or wearing. Because I have too many other decisions to make."
      This is because, the Commander in Chief explained, the act of making a decision erodes your ability to make later decisions. Psychologists call it decision fatigue: it’s why shopping for groceries can be so exhausting and judges give harsher rulings later in the day....MORE

      "Six factors driving Iran’s sudden currency devaluation"

      Following up on last week's "Iran’s police step in to contain foreign currency debacle".

      From Al-Monitor:
      A major and unexpected devaluation of the rial on the free currency market has taken many in Iran by surprise. Analysis of the behavior patterns in the Iranian foreign exchange market suggests that six main parameters need to be assessed to understand what has contributed to recent events.

      First is the application of the inflation differential between Iran and the global inflation levels. This factor has previously been discussed by Al-Monitor, and there have been strong signs that the Rouhani administration has sought to maintain a degree of stability in order to contain the inflationary impacts of a devaluation. If one would have applied the inflation differential, the free market rate of the US dollar would have been around 48,000 rials in October 2016, meaning it would have theoretically far surpassed 50,000 rials by now. Based on statements by top officials, the Central Bank of Iran (CBI) and the administration remain committed to managing the value of the national currency. However, there is continued inflationary pressure on the rial, especially as Iranian exporters wish to see a weaker currency that makes their products more competitive. The ongoing ambiguity surrounding exchange rate policies, and especially the guessing game about the long-promised unification of the official and free market rates, continue to unsettle the market, which enters into panic mode whenever there are sudden fluctuations.

      Second is the CBI’s intervention in the currency market. The free currency market is fully managed by the Central Bank, which intervenes to balance supply and demand. Evidently, if the CBI fails to inject enough funds, the demand side will push up the price. This seems to have occurred in recent weeks — both due to a shortage in CBI injections as well as the sudden hike in demand as a result of panic buys. One can speculate whether the CBI’s actions were intentional or due to operational limitations. Respected economist Farshad Momeni has speculated that the Rouhani administration is manipulating the foreign exchange market to benefit from the arbitrage between the official and free market rates in order to compensate for its budget deficit. Others have reported that the CBI has faced difficulties in repatriating hard currency, thus the shortage on the domestic market. But both these explanations would only justify parts of the problem as the Rouhani government and the CBI always have alternative plans in place. As such, it is more likely that a chain of events and rumors, and especially talk of that the CBI would allow the rial’s value to slide, led to unexpectedly high demand for which the CBI was not operationally prepared.

      Third is the ability of the CBI to repatriate external funds. Besides managing the foreign currency market, the CBI is also clearing the overall transactions between international and Iranian banks — a process that is growing in volume due to the gradual normalization of banking relations between Iran and international second- and third-tier banks. The CBI’s ability to handle the growing volume of transactions has also been a factor in the recent hiccups in the market. Some explain the operational shortcomings as a function of international, and especially Emirati, banks not cooperating with the CBI. But it is also conceivable that there are some internal shortcomings, taking into account new compliance standards to which all Iranian banks have to adhere. Such operational hiccups are immediately understood as unsettling factors that lead to rumors that the CBI is short of funds. Thus, it is evident that the CBI and Iranian banks need to further upgrade their systems to manage the growing financial flows in order to prevent such bottlenecks....
      ...MUCH MORE

      Central Banking: "The Powell Fed Is Starting to Take Shape"

      From the WSJ's MoneyBeat blog:
      Wall Street has had a long list of questions for new Federal Reserve Chairman Jerome Powell since his nomination last November. It may finally be about to get some answers.

      Minutes from the Fed’s last meeting, on Jan. 30-31, are due out Wednesday afternoon. Those are expected to shed light on the last conclave under the stewardship of former Chairman Janet Yellen, but may also offer some early hints about how her successor is thinking.

      “The FOMC minutes should give financial markets a good idea of the tone of Chair Powell’s formal remarks,” said NatWest Markets economists in a research note.

      Even stronger clues on his thinking about everything from tighter monetary policy to U.S. inflation are likely to come from Mr. Powell’s first testimony as chair before Congress next week, as The Wall Street Journal’s Morning MoneyBeat newsletter noted on Wednesday.

      Mr. Powell previously has stressed continuity and indicated he will maintain the slow-and-steady approach toward interest-rate moves that Ms. Yellen stuck to during her four years at the helm.
      The worry among many investors is that the Fed turns more hawkish as the U.S. economy and inflation begin to pick up after years of sluggishness. “​The most likely surprise in the Fed minutes…is that they may be leaning to four hikes in 2018,” said Steven Englander, head of research and strategy for Rafiki Capital Management. The Fed had previously penciled in three rate-increases for 2018.

      Expectations that the Fed will tighten policy more aggressively have helped drive up U.S. Treasury yields. The yield on the 2-year U.S. government note rose to its highest level since 2008 on Tuesday, while the 10-year yield is nearing 3% for the first time in four years....MORE

      "US companies might be liquidating their offshore bond hoards"

      Alexandra seems to be one of the few journos bulldogging what for market operators is a pretty important story. As noted in the intro to Feb. 4's "Bonds: 'Apple, Alphabet and Microsoft... — might consider borrowing some bond-market manoeuvres from the Federal Reserve.'":
      If the companies simply repatriate the dollar amount they will only have to sell enough  assets to pay the tax. If they plan to distribute/invest the cash they will have to sell into already weakening markets.
      I haven't seen this point raised anywhere in the media other than...

      From FT Alphaville, Feb. 1:...
      And from FT Alphaville, Feb. 20:

      Something odd has been happening to short-term bank bonds.
      So far this month, spreads on banks' two-year bonds have widened by more than 15 basis points, according to Bank of America Merrill Lynch. For all US corporate debt maturing in 1-3 years (which includes bank bonds), spreads have widened 8bps, according to BofAML ICE's index. Spreads on three-year and four-year securities have widened by about 11bps and 12bps, respectively:
      https://www.ft.com/__origami/service/image/v2/images/raw/http%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fdafabaff-7559-4678-b826-b9d1990c1fa4.jpg?source=Alphaville
      This is more likely a sign of selling from big multinational companies, rather than a change in traders' beliefs about bank creditworthiness. Many multinationals had said they would liquidate savings they had invested offshore after tax reform. Companies that invested primarily in corporate bonds, such as Apple, were large buyers of short-term bank bonds, Zoltan Pozsar wrote in a note last month.
      Bank of America strategists wrote in a note today that they expect the short-term funding pressures to continue:
      The other aspect of overseas cash repatriation we have pushed for this year is that financial markets are losing one of the biggest providers of funding in the front-end... We think liquidations the past two weeks of 1-3 year paper in the corporate bond market is to some extent driven by this story. We are also seeing stress in the commercial paper market, 2-year swap spreads and LIBOR-OIS and one of the drivers we think is the overseas cash repatriation story... We continue to expect wider credit spreads in the front end of the curve.
      Maybe companies are going by the two-year timeline estimated by Pozsar:...MORE

      Monkeys Are Transcribing The New York Times, Typing Hamlet at 12 Words Per Minute

      If it makes anyone feel better they're Stanford monkeys.

      Note: we're aware these are either bonobos or chimps. (you try finding a pic of monkeys at the keyboard)

      From Engineering & Technology, Sept. 13: 
      Monkeys transcribe Hamlet with new brain-reading tech

      Monkeys equipped with a brain implant, which reads their thoughts in order to move a cursor, have been able to transcribe passages from Hamlet or the New York Times at 12 words per minute. 
      The technology, developed by Stanford University researchers, has been hailed as a major breakthrough for people suffering from severe paralysis such as physicist Stephen Hawking.

      According to the team behind the invention, directly reading brain signals to interpret thoughts and drive a computer cursor would allow users to communicate faster than existing technologies allow. For example, the system developed for Hawking by Intel and SwiftKey relies on tracking the movement of facial muscles. Alternatively, eye movement tracking can be used but this doesn’t always work. For example in Hawking’s case, eye movement tracking didn’t work because of droopy eyelids.

      "Our results demonstrate that this interface may have great promise for use in people," said Paul Nuyujukian, postdoctoral fellow at Stanford, who developed the system together with professor of electrical engineering Krishna Shenoy. "It enables a typing rate sufficient for a meaningful conversation."

      Surprisingly though, the researchers estimate humans will be typing more slowly using the technology than the monkeys involved in the experiment. While the monkeys were just transcribing given passages, humans will be slowed down by thinking about what they actually want to communicate and will also think about how to spell words correctly.

      "What we cannot quantify is the cognitive load of figuring out what words you are trying to say," Nuyujukian said....MORE
      Here's the Stanford press release, Sept. 12, 2016.

      In other primate news:
      Chimps begin to grow embarrassed by their close relation to humans 
      Today In History: Swedish Chimpanzee, Ola, Wraps Up Investing Career
      What Monkey Pornography and Celebrity Worship Tells Us About Human Nature  
      Commodity traders superior to chimpanzees, research shows 
      Jim Cramer beats Monkey in Stock Picking Contest!
      UPDATE-Jim Cramer Beats Monkey in Stock Picking Contest
      What Jim Cramer Does After Beating the Monkey

      Batteries: "Apple in Talks to Buy Cobalt Directly From Miners"

      From Bloomberg, Feb. 20:
      • iPhone maker is one of the largest end users of the metal
      • Cobalt is a key ingredient in mobile phone batteries
      Apple Inc. is in talks to buy long-term supplies of cobalt directly from miners for the first time, according to people familiar with the matter, seeking to ensure it will have enough of the key battery ingredient amid industry fears of a shortage driven by the electric vehicle boom.

      The iPhone maker is one of the world’s largest end users of cobalt for the batteries in its gadgets, but until now it has left the business of buying the metal to the companies that make its batteries.
      The talks show that the tech giant is keen to ensure that cobalt supplies for its iPhone and iPad batteries are sufficient, with the rapid growth in battery demand for electric vehicles threatening to create a shortage of the raw material. About a quarter of global cobalt production is used in smartphones.

      Apple is seeking contracts to secure several thousand metric tons of cobalt a year for five years or longer, according to one of the people, declining to be named as the discussions are confidential. Its first discussions on cobalt deals with miners were more than a year ago, and it may end up deciding not to go ahead with any deal, another person said.

      An Apple spokesman declined to comment. Glencore Plc Chief Executive Officer Ivan Glasenberg late last year named Apple among several companies the miner was talking to about cobalt, without giving further details.

      Securing Supplies
      The move means Apple will find itself in competition with carmakers and battery producers to lock up cobalt supplies. Companies from BMW AG and Volkswagen AG to Samsung SDI Co. are racing to sign multiyear cobalt contracts to ensure they have sufficient supplies of the metal to meet ambitious targets for electric vehicle production.

      Australian Mines Ltd., developing the Sconi mine in Queensland state, this week agreed a cobalt and nickel supply deal with SK Innovation Co., South Korea’s top oil refiner, that’s worth about A$5 billion ($3.9 billion) at current prices, the Perth-based company said Wednesday in a presentation.
      SK Innovation, which plans to use the raw materials at an EV battery manufacturing plant in Hungary, agreed to buy all of the project’s planned output for up to 13 years, according to the filing.
      BMW is also close to securing a 10-year supply deal, the carmaker’s head of procurement told German daily FAZ in early February....MORE

      Slow-Moving Drought Returning to California, Expanding in Midwest

      We've mentioned a preference for the Palmer Drought Index presentation of conditions for some applications, despite a somewhat justified concern the methodology behind it is 'simplistic' when compared with the University of Nebraska U.S. Drought Monitor.
      Here they are side by side: