Saturday, October 20, 2018

The Science Behind the U.S. Military's Super Sandwich

From Mental Floss, Oct. 11:
The U.S. military has a fraught history with food. During the Civil War, soldiers munched on tooth-cracking hardtack and salt pork. By World War II, it was SPAM and M&Ms. During the Cold War, the military introduced the world to survival crackers, a.k.a. Doomsday Biscuits.

But there’s always been one problem with most of the items on the menu: Few tasted very good. Hardtack regularly contained worms. Soldiers liked to call SPAM “ham that failed the physical.” The Chicago Tribune once claimed that survival crackers were “better as weapons.”

The challenge facing battlefield rations—called “Meal, Ready-to-Eat,” or MREs—has always been multifaceted. The Seattle Times explains it nicely: "To qualify for MRE duty, a food item has to be able to survive years of storage in a dank ship’s hold or a sun-baked shipping container, withstand Arctic freezes and tropical monsoons, stave off assaults by insects, and remain intact through a parachute airdrop or a free fall from 100 feet.” Taste, as a result, has been woefully neglected.

In 2002, researchers at the U.S. Army Soldier Systems Center in Natick, Massachusetts took the first tangible steps toward fixing that by concocting the world’s first “Super Sandwich.” Resembling a hot pocket, the prototype—which contained fillings like pepperoni and chicken—could last up to two or three years in temperatures of 78 degrees without spoiling or getting soggy. (At 100 degrees, its shelf life dropped to six months.)

For the food scientists working on the problem, the enemy in the battle to make the Super Sandwich was water—specifically, water activity. Put simply, water activity is a measurement of how easily moisture migrates from one food product to another. The higher a food item's water activity, the more likely it’ll give away moisture. The lower the water activity, the more likely it’ll absorb water.
Water activity is a huge hurdle for foods that contain multiple components. Take Raisin Bran, for example: Raisins are moist and have a relatively high water activity. The flakes, on the other hand, are crunchy and have a low water activity. Under normal circumstances, these two components will trade moisture, with the raisins turning hard and the flakes soggy.

The same problem faced the Super Sandwich....MORE

"Does China have the ENERGY to be a 21st century superpower?"

Here's where the geopolitics of all that Russian Arctic natural gas comes into play.
You didn't think we were going on about icebreakers and LNG for grins and giggles did you?

Okay maybe a little. As noted previously:
I like big boats and I can not lie
You landlubbers can't deny

That when a ship sails in with an itty, bitty tug
And a round thing in your....ahem...don't know where that came from, moving on.
From Spear's Magazine, October 5:

With President Xi Jinping announcing China's arrival as the new economic superpower, Robert Amsterdam charts the serious impact this realignment will have on energy markets and investment
When it comes time to look back upon the most pivotal events in global politics in 2018, there will be no shortage of choices for us to debate. Will it be the historic US-North Korea Summit? President Donald Trump’s embarrassing Helsinki debacle?  Or will it be some yet-unknown (at time of writing) twist of fate in the approaching no-deal Brexit?

I’d actually put forward a much quieter, less disruptive date of 10 April as having greater weight. That was when President Xi Jinping addressed the Boao Forum in Hainan with a speech that seemingly announced to the world that China had not only ‘arrived’, but that it would now be the one taking over the duties of defending and upholding the postwar global economic order.
During that speech, Xi was overtly signalling towards the developing world with a message of inclusive trade, cooperative prosperity and, most importantly, heaping amounts of investment, in the form of its Belt and Road Initiative.

‘We must refrain from seeking dominance and reject the zero-sum game,’ Xi said. ‘We must refrain from beggaring-thy-neighbour and reject power politics or hegemony with the strong bullying the weak. Instead, we must properly manage differences and work together for enduring peace.’
Perhaps it’s difficult to take China’s peaceful internationalist pitch too seriously, especially when everything else it is doing points to the seeking of dominance. Beijing is aggressively expanding and militarising territory in the South China Sea, sponsoring widespread corporate espionage and IP theft, and ravaging Africa and Latin America with dodgy debt deals. But what’s the other option? Compared to the tarnished brand of the Trump doctrine – that of trade wars, Muslim bans, walls, and ‘sh*thole’ countries – it’s a pretty easy choice for the leaders of a developing nation looking to grow their economy.

But there is still one major factor standing in the way, and it has to do with how China is going to continue to power its rise to the top of the world order. This massive realignment is going to have a serious impact on energy markets and investment, though it is not clearly understood how. One the one hand, China’s capacity to impact global energy markets directly is undeniable. With a population nearing 1.5 billion, and a rapidly growing middle-class to boot, the country’s critical role in this market is defined by the enormity of its consumption, rather than by its contributions to the global supply.

More specifically, the Asian behemoth consumes about 23.3 per cent of the world’s energy and accounted for 33.6 per cent of global energy demand growth in 2017. It’s the largest net importer of crude oil and the second largest importer of liquefied natural gas (LNG), and it faces an expected 27 per cent increase in energy demand by 2040.

This size of market grants Beijing an unmatched ability to influence global energy markets. And when political factors begin distorting natural supply and demand, weird things begin to happen.
In early August, as a response to the Trump administration’s expanding tariff regime, China announced it was considering a 25 per cent tariff on US LNG exports, drawing a very important line in the sand. Should China impose tariffs on US energy exports, the entire landscape of global supply routes would have to adapt to major change, weakening the Trump administration’s attempts to get other countries to pledge greater imports....MORE

"How Europe's taxpayers have been swindled of €55 billion"

From The CUM - EX Files: A Cross-Border Investigation:
The vast so-called cum ex tax scandal which has rocked Germany in the past decade has already cost the country an estimated €30 billion. It was assumed that a change in the law in 2016 definitively outlawed such trades. But as a cross-border and undercover investigation now reveals, the trade is still flourishing and has targeted far more countries and has cost far more than was previously thought, affecting nearly all of the biggest economies in Europe. Is this the heist of the century?

London, 7 August 2018: the sting

They’ve turned the AC in the hotel suite down to 18ᵒC. Any hint of sweat on their foreheads would betray them. They can’t appear nervous. That’s how they want their guest to feel.
The air is heavy with the smell of orchids arranged in a crystal vase, a bottle of Veuve Clicquot stands cooling in an ice bucket on the low glass table.

The spectacular glass-wall vista on the 37th floor of the European Union’s tallest building, the Shard, takes in many of London’s most famous sights: the River Thames, St. Paul’s Cathedral, Tower Bridge and to the east, Canary Wharf. The glass fronts of the City, London’s financial district, reflect the sun’s rays. A glance down to street level makes one’s head spin. Without the telescope thoughtfully provided by the hotel, the people appear absolutely tiny, like an army of worker ants scurrying about their business. But the two men aren’t here for the view.

Nor are they part of this world of the super-rich. They’re here to understand how it feels to look down not only on London but an entire continent. They’re here to figure out the methods and mentalities of the bankers, brokers, lawyers and investors who have plundered billions from the treasuries of Europe.

There are five cameras in the set-up. One is concealed in a designer label shopping bag seemingly carelessly left on the table. Another is inside a hollowed out book on a shelf. Three more are strategically placed to record what is about to happen next. All pointed at the one empty place on the sofa.

The phone rings at 1:51pm, nine minutes early. Their assistant from Singapore says: “He’s here.”
"Tell reception that we’ll go and get him in five"
The two men look at each other and smile. It’s on.
One is Oliver Schröm, editor-in-chief of the German non-profit newsroom CORRECTIV, and the other Christian Salewski, a reporter from the German public sector broadcaster ARD TV’s Panorama programme.

But today, they’re brothers. Oliver is ‘Otto’, the elder of the two. Christian is ‘Felix’, his younger sibling. ‘Otto’ and ‘Felix’ are heirs to a German steel fortune worth billions, here to discuss a grey-area investment scheme running into the hundreds of millions of euros. Their supposed assistant, ‘Munirah’, dressed in a neat black dress, is actually the wife of one of their colleagues.
They let their guest sweat in the lobby for another 15 minutes.

The guest, let’s call him ‘Amal Ram’, will have 45 minutes to sell his financial product to the ‘billionaires’. That is 45 minutes for the two journalists to obtain proof for a suspicion they’ve been trying to validate for over a year now: that the biggest tax fraud of all time is not over yet.
If ‘Amal Ram’ is up to what they think he is, then the next phase of the cross-border mega-swindle is about to begin.

‘Otto’ retires to the suite’s bedroom. The elder of the billionaire ‘brothers’ will enter the discussions only later on.

‘Amal Ram’ finally enters the hotel suite at 2:20pm.

Germany 2017: The First Scoop  

€31.8 billion. This is how much a network of equity traders, tax advisors, bankers, lawyers, and investors has removed, many - including prosecutors - say stolen, from the German state’s tax coffers, said a team of eight journalists from Panorama and newspaper Die Zeit after analysing data leaked to them on a USB drive.

Cum-ex – this is the name German media have given to this scam. Internationally the different variants of these trades are known as dividend arbitrage.

Cum-ex and its variant cum-cum were highly complex share deals with no economic purpose other than to receive tax ‘reimbursements’ from the state – but for tax that had never in fact been paid. This is how it went. The participants would lend each other shares of major corporations, creating the appearance for the tax authorities that there were two owners of the shares when in fact there was only one. The bank which settled the trades would then issue a ‘confirmation’ to the investor that tax on the dividend payment had been paid to the tax office – when in fact it had not. With this confirmation in hand, the investors were then ‘reimbursed’ by the state. It’s a bit like parents claiming a child benefit for two – or more – children when there is only one child in the family.

The federal German government only called a stop to the practice in 2012 by making adjustments to the tax code, then making another adjustment in 2016 after one variant of the trade had continued. Its response had been so slow that a parliamentary inquiry was set up. Some critics think the finance ministry was fully aware of cum-ex all along but hesitated to close it down as it was one of the few profitable business lines of banks after the 2008 financial crisis.

Either way, cum-ex has been one of Germany’s biggest scandals in recent years, involving virtually the entire banking sector and many high-profile individuals and companies. But strangely it has gone largely unnoticed outside of Europe’s biggest economy.

What drives the traders and bankers behind this scandal? So far none of them has broken their silence. Schröm and Salewski wanted to know how far they went – and what they might be up to next.

Capital markets are global; trades cross borders in milliseconds. It is simply impossible for a single country’s media to investigate what’s happening. To overcome national barriers, CORRECTIV decided a year ago to coordinate a team of journalists from twelve European countries. 38 journalists have followed the traces that cum-ex, cum-cum and similar trades have left across Europe.

And that is why on 7 August 2018, Schröm and Salewski disguised themselves to try to discover the negotiations behind these trades and to understand the psychology of the people who created it. They’ve assumed false identities, helped by one of the trade’s insiders. They have also found a former major player who has decided to talk. For the interview, which is broadcast on Panorama, they had to disguise him as well. He offered to tell the story, exclusively on camera for the first time, of how the traders create their own belief system and build the “devil machines”, as he calls the trades. But only from behind a mask.

But first, back to the beginning....
...MUCH MORE

HT: FT Alphaville's Further Reading post

Roman Abramovich And The Last Days Of Londongrad

From Bloomberg Businessweek, September 24:

Has Anyone Seen Roman Abramovich? The Last Days of Londongrad

The Russian billionaire has avoided Britain for months and is preparing his finances to skirt the threat of American sanctions.
In late August, as supporters of Chelsea Football Club assembled at Stamford Bridge stadium to watch their team beat London rival Arsenal, a group in the upper deck unfurled a 40-foot blue-and-red banner. “The Roman Empire,” it shouted, beside an image of the team’s owner, Russian billionaire Roman Abramovich. Just below, another banner trumpeted “15 Years, 15 Trophies.” Abramovich didn’t attend the game that day. In fact, he hasn’t been seen in London since the U.K. government failed to renew his visa in the spring, not long after it accused Russia of using a deadly nerve agent on British soil and relations between London and Moscow plunged into crisis.

Abramovich bought Chelsea out of near-bankruptcy in 2003 for £140 million (about $223 million at the time) and has since loaned the club more than £1.1 billion. Until he came along, Chelsea hadn’t won the top domestic trophy, the Premier League title, since 1955. His big spending changed all that and set off a kind of arms race in English football. In some ways, it was similar to the U.S. model: Buy talent, buy titles, and sell merchandise and media rights. But unlike owners of American sports teams, Abramovich didn’t seem bothered by racking up huge losses. (And he didn’t have to contend with caps on spending, until new rules came into force in 2010.) At the Arsenal game, Chelsea supporters taunted their rivals with the chant “We’ve won it all!” to which Arsenal fans sang in response, “You’ve bought it all!”

Chelsea fans still love their high-rolling owner, even as the U.K. government hits back at the Kremlin. Now Abramovich is mulling a sale of Chelsea, frustrated by his British visa problems and concerned about the potential fallout should the U.S. expand sanctions against wealthy Russians and target him. He’s already rejected bids for the club in excess of $2.3 billion—which would be a world-record price for a sports team—according to people familiar with the talks. Earlier this year, Abramovich hired Raine Group LLC, a merchant bank in New York, to advise on the possibility of a full or partial sale of the club. A person familiar with the discussions says Abramovich wants £3 billion. Abramovich’s representatives declined multiple requests for comment for this story and insisted all communication go through his lawyers, who also declined to comment.

With a $14.7 billion fortune derived from oil and metals, Abramovich holds his enormous wealth at the pleasure of Russian President Vladimir Putin, a status that’s put him in the crossfire of the Cold War 2.0 that’s been brewing. It’s not only his visa that’s been effectively stonewalled: In seeking ways to punish Putin, British officials appear to be slow-walking most Russian visa applications, according to immigration lawyers in London. At the same time, the government is scrutinizing the wealth of Russians using London as their base, and lawmakers have begun calling the influx of Russian cash a national security issue.

“We should have been asking tougher questions, and we’ve started to do that over the last 12 months,” says Ben Wallace, the U.K.’s minister of state for security and economic crime. “We always reserve the right to revoke any of these visas. We have the power to simply say, ‘No, thank you. You’re not welcome.’ ”

Arguably the most secretive Russian billionaire, Abramovich hasn’t given an interview in more than a decade. “To be exact, it’s been 12.5 years!” his spokesman, John Mann, wrote in an email. Having bought homes in Aspen, Colo., the south of France, Moscow, New York, St. Barts, and Tel Aviv, Abramovich is almost constantly on one of his jets. Nonetheless, he’s the very avatar of Londongrad, the nickname given to the British capital because of the high number of wealthy Russians there. He paid a reported £90 million for a mansion a few doors down from the Russian embassy in Kensington. In almost a caricature of over-the-top Russian spending, he won permission in 2016 to expand it to 20,000 square feet, filling in what he called a “miserable” pool and adding a new underground pool and “staff accommodation.” He’s educated five of his seven kids largely in the U.K.

Abramovich’s situation has sent a chill through the ranks of wealthy Russians in London. “It’s like a grenade has been dropped inside the government, and no one knows what the outcome will be,” says Dmitry Gololobov, a Russian lawyer living in London who worked for Yukos Oil Co. “Everyone is minimizing their U.K. risk. No one knows how they will be scrutinized.”

Faced with delays, Abramovich withdrew his visa application. On May 28, his Gulfstream G650 touched down in Tel Aviv, where he owns a home in the exclusive Neve Tzedek neighborhood. A major donor to Jewish causes in Russia and a funder of more than a dozen Israeli tech startups and venture capital companies, Abramovich left two days later with an Israeli passport in hand, allowing him to travel to the U.K. for up to six months visa-free. (It’s unclear when he applied for citizenship.) The move immediately made him Israel’s richest man. The day after he left Israel, Chelsea announced it had put on hold a £1 billion plan to expand the club’s stadium, citing the “current unfavorable investment climate.”

“Abramovich spent money to buy himself a certain entree or cachet into British society, but some of the social expectations about being big in British football have not quite played out,” says Mark Galeotti, a Russia expert and senior fellow at the Institute of International Relations in Prague. “He’s high-profile and Kremlin-connected enough to be a useful poster child for this new campaign against Putin. He may decide it’s not worth it to stay.”...MUCH MORE

Friday, October 19, 2018

"This Is the World's Most Expensive Bottle of Wine"

From Food & Wine:

A 1945 Burgundy smashed the record at a Sotheby's auction. 
Whiskey has been grabbing plenty of headlines for its record-breaking auctions as of late. From million dollars bottles of The Macallan Scotch to a 50-year-old Yamazaki that managed to break the Japanese whiskey record by selling for about a third of that price, the collectors’ market has been paying a premium for coveted bottles. But it turns out it isn't just brown spirits having all the fun. Over the weekend, a Sotheby’s auction in New York set a new record for the most expensive wine ever sold.

A bottle of 1945 Romanee-Conti, a red Burgundy from Cote de Nuits, sold for an astounding $558,000. Though Romanee-Conti is a renowned producer to this day, this particular wine is especially coveted because reportedly only 600 bottles were produced in 1945, and the vines were removed and replanted after this vintage. “Rare and wonderful,” Serena Sutcliffe, head of Sotheby’s international wine department, wrote on the auction site. “The best bottles are so concentrated and exotic, with seemingly everlasting power—a wine at peace with itself.”

If half-a-million dollars for a bottle of wine seems surprising, you’re not alone. Sotheby’s presale estimate for the vino put the top of the range at $32,000. The wine sold for 17 times that amount. And the run wasn’t over: Later, a second bottle from the same vintage sold for $496,000. Both bottles easily broke the record for the most expensive standard-sized bottle of wine ever sold—a title previously held by a bottle from Chateau Lafite Rothschild sold for $233,000 in 2010 in Hong Kong....MORE
Previously on the big buck booze beat:
April 2017
Questions America Wants Answered: "Why is Domaine de la Romanée-Conti So Expensive?"

"Vineyard-Raiding Baboons Favor Pinot Noir"
What a bunch of wine snob poseurs.
Merlot is just fine, especially if it's dolled up as Chateau Petrus.
Berry Bros. & Rudd is running a special case price, "Buy 6 and save £ 2667.37".
A Romanée Conti (pinot noir) will cost you double or triple. BB&R is price on request.
Either way, possibly more than the average baboon has in petty cash.  
News You Can Use: "The Weird World Of Expensive Wine "
Prof. Dimson: "New research reveals that wine outperformed art, stamps and bonds throughout the 20th century"
Dimson et al: "The impact of aging on wine prices and the performance of wine as a long-term investment"
Are collectibles good long-term investments? "The Investment Performance of Emotional Assets"
Alternative Investments With Liquidity: "Fine Wines, Best Value"

Questions America Wants Answered: How Does Brexit Affect the Bordeaux Wine Market?
By-the-bye I just checked a link to a 2005 Bordeaux page at Berry Bros. & Rudd I had bookmarked and this is their 404 message:
We're terribly sorry but you seem to have reached a dead end.
For a nudge in the right direction, please use the search box below, or continue to our home page. If you lose your way again please do let us know.
"The 6 Most Statistically Full of Shit Professions"

#6. Stock Market Experts
#5. Wine Tasters
#4. Art Critics 

Hmmm...

"America is drowning in milk nobody wants"

From Bloomberg, Oct. 19:
A decade ago, Greek yogurt was ascendant in America. In New York state, the hope among farmers and politicians was that their fortunes would benefit as well.

In 2005, Hamdi Ulukaya spent less than $1 million buying an old Kraft yogurt processing plant in New Berlin, 150 miles northwest of New York City. Within two years, the native of Turkey was already a success. His yogurt brand Chobani was in supermarket refrigerators everywhere, pushing aside older, big-name brands while making Greek yogurt a staple of the American diet. Rich but also healthy, it made its way into recipes for everything from smoothies to muffins and even popsicles.
“Greek yogurt was a very big innovation in the yogurt market,” says Caleb Bryant, senior drink analyst at Mintel. For decades, yogurt was runny and high in sugar. “Then Chobani comes onto the scene and changes the idea of what yogurt can be.” With sales on the rise, New York Governor Andrew Cuomo convened the state’s first Yogurt Summit in 2012. In 2013, after the state became the top U.S. yogurt producer, he changed state law to allow farmers to have up to 299 cows instead of just 199 before they had to comply with certain environmental regulations.
https://img-s-msn-com.akamaized.net/tenant/amp/entityid/BBOv76e.img?h=409&w=636&m=6&q=60&o=f&l=f
The dairy industry in New York expanded rapidly. Yogurt production in the state peaked that year, triple what it was in 2007.

But in the years that followed, Greek yogurt began to suffer the same fate that’s bedeviled the broader dairy industry—changing tastes.

Between April 2017 and April 2018, sales of Chobani products grew by only 1 percent while sales by all companies in the segment slipped by 2.2 percent. Chobani’s growth is largely coming from Chobani Flip, a mixable yogurt product, and yogurt drinks, according to Bryant. (While the company’s New York facility still produces significantly more total yogurt, those products are both made in the its Idaho plant.) Meanwhile, Chobani’s bonds are among the worst performers in the global food and beverage sector.

New York dairy farmers who jumped at the chance to expand their herds five years ago are now wondering whether it was the right move. “We were told we needed to expand,” says Deb Windecker, a dairy and beef farmer in the Mohawk Valley, and a former Chobani supplier. “’Yogurt capital, grow, grow, grow.’ And now everybody’s turned their back on us.”...MUCH MORE

"10 Winning Intros to Solve That Boring Cover Letter"

Résumé?
Report?

Get that reader's attention, fast.

From McSweeney's, July 31, 2017:

10 Winning Intros to Solve That Boring Cover Letter
by CHARLES MORRIS
1. “The Confederacy’s biggest problem was messaging.”

2. “I write this as I feel the chemo seep deeper into my body — how can something heal me and kill me at the same time?”

3. “Hey Fucklord, you think you’re better than me?”
...MORE

Just watching NVIDIA race Tesla back to $200 and poking around in the link-vault, reminiscent of Adam Smith's classic vignette:
 “…For, after all, I had been into cocoa a bit myself. That was back when The Great Winfield had discovered cocoa trading. Occasionally in those more leisured days I would sit with him lazily watching stocks move, like two sheriffs in a rowboat watching catfish in the Tennessee River….”
-'Adam Smith', Supermoney 

Life is good. 

"Where Saudi Arabia Is Investing In Tech"

Just a heads-up, although we've found CB Insights to be generally reliable, the number for the Kingdom's investment in Uber doesn't look right, even if you were to count a flow-through from the Saudi investment in Softbank's Vision Fund which CB says they don't do.

Here's CrunchBase's latest tally which shows total investment into the Ubester at $24.2 billion.
If the $16.8 billion figure for Saudi's investment was correct it would mean they've contributed two-thirds of all the loot Uber has burned received.

From CB Insights, October 16:

Saudi Arabia has been ramping up its tech investments in recent years, but the disappearance of a US-based Saudi journalist is causing tension with international businesses.
Saudi Arabia has made headlines in recent weeks, following the disappearance of Saudi journalist Jamal Khashoggi.

This has led a number of major corporations to back out of the country’s global investment conference, the Future Investment Initiative.

The controversy comes at a time when the Kingdom’s investment activity has picked up substantially, mainly driven by the country’s plans for economic diversification away from oil and into the broader tech space.

Most recently, the country’s sovereign wealth fund, the Public Investment Fund of Saudi Arabia (PIF), has garnered media attention with its investments in two electric vehicle manufacturers, Tesla and Lucid Motors.




Below we outline the Kingdom’s investments over the past five years including not only PIF but also the Saudi Royal Family, the Kingdom of Saudi Arabia, and Kingdom Holding Company, the investment arm of Prince Alwaleed Bin Talal Alsaud.

That said, PIF has been the most dominant investor representing the country’s leadership, with its $3.5B bet on Uber in June 2016 as well as participating in billion-dollar investments in Noon, Virgin Galactic, and most recently Lucid Motors.

In addition to these investments, it’s worth noting that PIF also has strong ties with SoftBank, contributing $45B to the company’s $100B Vision Fund in October 2016 and then agreeing to invest another $45B for the fund this year.

The Vision Fund is SoftBank’s tech-focused investment fund that’s invested in high-profile startups such as Slack and WeWork. (We do not include Vision Fund investments in the table below.)

WHERE THE SAUDI KINGDOM IS INVESTING (2013-2018TD)
Company Date Total funding ($M) Round
Lucid Motors 9/17/2018 $1,131 Unattributed
Tesla 8/8/2018 PIPE
Deezer 8/2/2018 $441.8 Series F
ACWA Power 7/5/2018 Corporate Minority
QuantCube 5/29/2018 $5 Series A
Endeavor 3/19/2018 $1,805 Corporate Minority – III
Magic Leap 3/7/2018 $2,353.5 Series D – III
Penske Media Corporation 2/28/2018 $200 Corporate Minority
Virgin Galactic 10/26/2017 $1,390 Unattributed – III
Careem Networks 6/15/2017 $571.7 Series E – II
JetSmarter 12/12/2016 $155 Series C – II
Noon 11/14/2016 $1,000 Unattributed
Uber 6/1/2016 $16,858.74 Series G – III
 
...MORE

ICYMI: "The Onion’s Guide To Blockchain Technology"

From America's Finest News Source (AFNS):
Blockchain technology forms the foundation for cryptocurrencies such as Bitcoin, Dogecoin, and Ethereum, but it can be difficult to understand how it actually works. The Onion answers common questions about blockchain technology.

Q: How does blockchain work?
A: Do you want to talk science shit or do you want to make some fucking money?

Q: Who uses blockchain?
A: Ordinary folks in charge of million-dollar cryptocurrency accounts and diamond supply chains....
...MUCH MORE

Ha! "Wall Street Loves These Three Letters. The Rest of Us Should Be Wary."

I've heard that the news business is competitive but this is, to coin a phrase, nuts.

Here's Matt Phillips, formerly of the Wall Street Journal and honcho at the Journal's MarketBeat blog, and whom we thought was a lock for the 2010 Bulwer-Lytton Award for:
"Like a rottweiler on a slightly undercooked leg of lamb, MarketBeat refuses to let go of its probe of the depths of Thursday’s Flash Crash, particularly the momentary trades that priced ostensibly healthy companies such as Accenture at one cent....
That makes "It was a dark and stormy night" read like Blake in comparison...

Anyhoo, following on the post immediately below*, more on leveraged loan packages.

From the New York Times:

The C.L.O., a cousin of the mortgage-related product that malfunctioned a decade ago, has become one of the hottest investments on Wall Street.
A financial assembly line that went haywire a decade ago and contributed to an economic crisis is gearing up again on Wall Street.

Back then, one of the products the banks churned out — bondlike investments based on thousands of mortgages — proved far riskier than most had understood when it turned out that the borrowers couldn’t pay. The banking system froze, a financial panic ensued, and the country experienced its worst recession in decades.

This time around, a similar kind of investment, called C.L.O.s, are at the heart of the boom. And that’s not the only parallel: The loans are being made to risky borrowers, lending standards are dropping fast, and regulators are easing the rules.

While it isn’t necessarily destined to end in a 2008-style collapse, the situation today is eerily familiar. Even top Federal Reserve policymakers cited the surging growth of this market as a reason to “remain mindful of vulnerabilities” and possible risks to the financial system.

“If there turns out to be an issue, this is where the unfinished business of the post-crisis financial reform efforts is going to be revealed,” said Daniel K. Tarullo, a professor at Harvard Law School and a former oversight governor for bank regulation at the Fed.

Here’s what you should know about one of the busiest lines of business on Wall Street.

A different set of risky borrowers, and slipping standards
The process of issuing loans, packaging them together and carving them into investments has many names: securitization, structured finance, even shadow banking.

The last shadow-banking frenzy on Wall Street centered on home loans, which were repackaged into investments used to build collateralized debt obligations, or C.D.O.s.

Banks pooled millions of mortgages — some of them to borrowers with a shaky ability to repay — to create C.D.O.s. They kept some, and the rest they sold off to a slew of other investors: in-house hedge funds, European banks, large American pension plans and more.

The investments at play now are C.L.O.s, for collateralized loan obligations. But this time, the underlying loans aren’t going to high-risk homeowners. They’re going to high-risk companies.
These C.L.O.s are made up of loans to between 100 and 300 already indebted corporate borrowers. Sears, which filed for bankruptcy this week, was among the companies that took what are called leveraged loans.

Such loans to companies with junk-level credit ratings hit a record of more than $550 billion last year, eclipsing levels in the last years before the financial panic.

Most of the borrowers with junk-level credit ratings are already carrying a debt load. (Other low-rated borrowers might just be small or new.) But demand for C.L.O.s has been so strong that investors aren’t placing as many requirements on the loans being made to these risky borrowers.
Traditionally, such loan contracts would have all sorts of protections, known as covenants, aimed at providing investors an early warning that borrowers were getting in trouble.

These covenants keep debtor companies from acting in ways that put payments to investors at risk. They restrict things like paying out dividends to owners, and put limits on additional borrowing.
Nowadays, the vast majority of leveraged loans contain much weaker protections. So-called covenant lite loans now account for roughly 80 percent of the new leveraged loans on the market.
And when loans are repackaged and sold, most of the money effectively comes from the investors, not the banks....MUCH MORE
*Although the NYT article is not time-stamped I'm pretty sure that Alphaville's Colby Smith beat the old pro to the punch with her piece, linked in Next Big Short? "Warnings mount for leveraged-loan market"
Additionally, because she is writing for the Financial Times audience, she comes at the story from a different angle.

Enough about money.
Here's Bulwer-Lytton:
"It was a dark and stormy night; the rain fell in torrents--except at occasional intervals, when it was checked by a violent gust of wind which swept up the streets (for it is in London that our scene lies), rattling along the housetops, and fiercely agitating the scanty flame of the lamps that struggled against the darkness."
--Edward George Bulwer-Lytton, Paul Clifford (1830)
That's pretty awful eh?
It's genius compared to some of Bill Gross' stuff.
I should dig up the post Izabella Kaminska did on his scribbling; just brutal.

Corrected—Next Big Short? "Warnings mount for leveraged-loan market"

Correction: Someone (hmmm) linked to the wrong FTAV post, regret the error, etc.
Good now.

We've looked at the practice of bundling garbage in a bright, shiny wrapper and calling it Christmas many times, usually in the context of CDOs and CLOs and CCOs:
As Carnegie Mellon Financial Engineering prof. Dogbert explains, we are dealing with aggregates here:
 - Dilbert by Scott Adams
This, however, leads to a whole new set of problems that come from physically bundling the cows into the Collateralized Cow Obligation wrapper.
The cows ask questions like "Does this CCO make my butt look big" and seriously, how can you answer that without incriminating yourself?
For this reason some practitioners prefer to stick with synthetic livestock, not to be confused with....ummm..., where was I?...
The transformative power of a bright shiny wrapper being used in the leveraged loan business is the latest "product" from the structured product crowd.

From FT Alphaville:
At the most recent meeting of the Federal Open Market Committee in September, Federal Reserve officials debated the usual topics. Is inflation running hot? How tight is the labour market? And of course, what's the future path of interest rates? This time around, however, policy makers raised concerns about something else as well: leveraged loans.

It was not the first set of meeting minutes in which Fed officials have devoted time to talking about leveraged loans, those extended to heavily-indebted companies and individuals at floating rates. In August and June, the Fed mentioned that issuance was picking up. It was the first time, however, that the Fed has flagged leveraged loans as a potential risk to financial stability.

The warning comes at a time when multiple agencies and international organisations have issued their own about the ballooning $1trn-plus leveraged-loan market. This week, the Bank of England (BoE) drew parallels to the growth of sub-prime mortgages in 2006 that triggered the global financial crisis. Earlier this month, the IMF cautioned about the breakneck pace of leveraged lending, which has been largely driven by non-banks, and the sliding standards of many of these loans. And in September, the Bank of International Settlements (BIS) flagged the global boom, and deteriorating credit quality, as potential risks as well.

Let's start with the first concern.

In six short years, the outstanding value of leveraged loans in the US has doubled to $1.1trn, according to S&P Global Market Intelligence's LCD. Europe's share is smaller but it is growing quickly as well. As a share of new corporate issuance in the United States, highly-leveraged loan deals—where debt is at least 5 times ebitda —make up roughly half, surpassing levels seen in the lead-up to the financial crisis. In Europe, the ratio is even higher, at approximately 60 per cent. Here's a chart from the IMF's Financial Stability Report published earlier this month, which shows the growing dominance of leveraged loans:
https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F5039619c-c036-430b-b366-a17774d6943c_FINAL.png?source=Alphaville 
...MUCH MORE

See also July's "Structured Products Are Back Baby!" wherein Alphaville's Dan McCrum introduces us to the
"Auto-Callable Contingent Coupon Barrier Notes Linked to the Lesser Performing of Four Equity Securities, Due July 1, 2021."
As noted at the time: "How can anyone look upon this and not weep tears of joy?"

Thursday, October 18, 2018

Shipping: "Another two ice-breaking LNG carriers are on their maiden voyage in Arctic waters"

As can be seen on the sea ice thickness map the Russian coast is still navigable while the North American - Greenland side of the basin is already almost impenetrable to even heavy icebreakers with ice up to 4.5 meters (14.5 feet) thick:

 http://ocean.dmi.dk/arctic/icethickness/anim/plots_uk/CICE_combine_thick_SM_EN_20181017.png

And as a side note, the U.S.and Canada do not have icebreakers powerful enough to break through 4.5 meter ice and only a handful of the Russian nuclear ships can do it.
By comparison the Eduard Toll was encountering 1.8 meter thick ice on its maiden run last January and the ARC - 7 class is supposed to be able to handle the 2.1 meter thick stuff which makes them pretty good icebreakers in their own right.

From The Barents Observer:
The «Vladimir Vize» and «Rudolf Samoylovich» will boost the Arctic out-shipment capacity of natural gas producer Novatek by almost 30%. 

The two powerful ships are now both on the Northern Sea Route en route to and from natural gas terminal Sabetta. While the «Vladimir Vize» has picked up LNG in Sabetta and is on its way towards Asian markets, the «Rudolf Samoylovich» early this week passed the Kara Gate south of archipelago Novaya Zemlya, information from the Northern Sea Route Administration says.

The ships are owned by companies Teekay and MOL and COSCO respectively and both built by the Daewoo Shipbuilding & Marine Engineering (DSME) in South Korea. They are the 6th and 7th vessels in a total fleet of 15 vessels that for the next decades will shuttle to Sabetta, the terminal serving the Yamal LNG project.

They add almost 30 percent out-shipment capacity for Novatek and its partners in the liquified natural gas project.

«Good luck and fair seas to Captain Ceprasovs and the crew in delivering a continued service of operational excellence to our customer for many years ahead,» Teekay says in a press release. The «Rudolph Samoylovich» is the company’s second of six Arc-7 carriers to be provided to the Yamal LNG project by 2020. Teekay’s first project carrier, the «Eduard Toll», set a new Arctic shipping record when it in early January 2018 sailed through the Bering Strait and all the way to Yamal.
According to Teekay, the «Rudolph Samoylovich» was delivered almost three months earlier than plans following a request from Novatek. It transited the Northern Sea Route after its delivery from the yard in Korea at the end of August....MORE
Previously:
October 10 
Shipping/Natural Gas: "China Blinks First In LNG Face-Off With U.S."
...See for example Teekay who just took delivery of their second ice-breaking LNG carrier, the Rudolf Samoylovich which joins their Eduard Toll.
Mitsui Osk Lines (MOL) just took delivery of a similar ARC 7 class making seven or eight of these ships capable of breaking 1.8 metre ice hauling Yamal gas. There are two more on the way.

Sept. 17
China Launches Its First Domestically Built Icebreaker

Feb. 4, 2018 
Arctic Doings: "Teekay’s New Icebreaking LNG Carrier ‘Eduard Toll’ Makes Historic Northern Sea Route Passage"

Meanwhile in India: "Fire erupting from cracks in the ground, Andhra Pradesh"

From The Hans India:

Eruption of fire from cracks in earth causes panic in Kurnool
Kurnool: Panic spread among people in Marrikunta Thanda, a hilly area in Owk mandal of Kurnool district on Saturday as fire errupted from crack that developed on earth. 
Cracks in ground were seen up to a depth of about 200 metres and flames were seen spreading from the gaps. 

An electric pole was melted due to heat generated in the earth. The news spread in the surrounding villages and people in large numbers flocked to witness the fire from earth at the hamlet.  

Owk Tahsildar Sanjeevaiah, rushed to the spot and made inquiries. He later informed the matter to the officials of Oil and Natural Gas Commission (ONGC) and  Mines and Geology department. 

The officials of the departments arrived the spot and trying to find out the reasons for the fire from ground.  

It is learnt that, in the past, the ONGC had conducted a survey at Marrikunta Thanda and confirmed the presence of gas reserves.
The February 2017 report:

ONGC strikes huge gas hydrate reserves. Is India's energy future secure? Nope
India's largest oil producing company, the Oil and Natural Gas Corporation (ONGC), has struck gas hydrate reserves in the deep sea off the Andhra Pradesh coast.

The reserves are located in the Krishna-Godavari basin, which came into the limelight about a decade ago, when Mukesh Ambani's Reliance Industries struck natural gas in the region.
The fresh reserves are estimated to be around 134 trillion cubic feet (tcf), about one-third of the gas reserves of the United States, which is the largest producer of natural gas in the world.
Such a huge quantity of gas can turn India's fortunes in the future, by making the country self-sufficient in the energy sector, which currently imports 80% of its consumption requirements....MORE

"Bond King Gundlach predicts yields are headed much higher before this move ends"

Note the issuance number,* that is important. The jawboning between the President and Chairman Powell, not so much.

From CNB, October 12:

There's another big reason why Trump could blame the Federal Reserve for rising interest rates
  • President Trump has criticized the Fed for raising interest rates in a period of low inflation, but it's another Fed policy move that is helping drive interest rates higher.
  • The Fed is unwinding its balance sheet, which ballooned during the financial crisis, and in the process is buying less Treasury securities, just as the federal government is issuing much more debt.
  • The fact the Fed has stepped back as a buyer, combined with the increased debt issuance, has been a topic of discussion in the bond market as interest rates were on the rise this month.
President Donald Trump has been unabashedly vocal in his criticism of the Fed's interest rate hikes, but the president has been quiet on another important Fed policy that may also be a big factor behind the rise in longer-term rates that influence all sorts of loans, including home mortgages.

On the surface, the Fed's slow and steady approach to raising short-term interest rates once a quarter is less aggressive than it's been in past cycles. But it's the the Fed's parallel balance sheet moves that have gone under the radar, except in the bond market where it is closely monitored.

That's because the Fed has stepped back as a buyer in the Treasury market, at a time when the Federal government is also issuing a mountain of new debt. Since last year, the Fed has been gradually reducing the purchases it makes to replace Treasury and mortgage securities on its balance sheet as they mature.
"Investors are starting to realize just how many bonds are coming at us in the year and two ahead. And I've talked about this repeatedly over the last couple of years. We had a budget deficit in the United States that went up from around $600 billion a couple of years ago to now the official number for fiscal '18 in now over $900 billion. But that doesn't really capture how much debt is really being added to the national debt in the United States," said Jeff Gundlach, DoubleLine CEO on CNBC.
Gundlach said there is also a loan to the Social Security system that takes the figure to $1.27 trillion. There are also pension liabilities and veterans benefits.

"On top of that you have the Fed now cranking up quantitative easing [sic. he meant tightening] to $50 billion a month, which is another $600 billion for fiscal 2019 if they continue on that course. Which takes you to around $2.25 trillion of debt increase. And this is at a time where we're supposedly in a good economy," he said. The Fed's $50 billion a month reduction includes both Treasurys and mortgages....
...MORE
As self-referenced in October 3's "Bonds: It's The Long End That Gets You":
We'll probably  be droning on about 10 and 30 year action for a few more months.*
*As we mentioned a couple months ago, the Fed mucking about at the shorter end isn't where you want to focus, rather it will be the dramatic increase in Treasury issuance, and participants reaction to same that will determine the course of events.

From a September 21 post, acknowledging we didn't nail everything but caught enough to be on the right side of the equity up-move:
Not exactly the scenario we were looking for back in July but close on a couple particulars, more after the jump....

Our July post was "Signals From the Yield Curve: It's the Long End That Gets You" :
This forecast is so close to our thinking that I did a double-take when I first saw it.
The only thing I can add is to point out that these are dynamic systems, that any changes to the trajectory have implications for where we end up so this scenario is not preordained.
But that's the way to bet. At the moment.

It's possible that the tariff-and-currency war of 2018 slows things down enough that the Fed pauses, stops bumping up the short end or that Treasury issuance is large enough to drive the long end higher but for right now, this is where we're at....
The combo of a rising long end combined with a slowdown due to tariff concerns has proven accurate only for the first half of the combo. We reiterated it in August's "10Y Treasury Yield Tops 3.00% After Surprise Supply Increase":
As foretold by the prophesy:
"..It's possible that the tariff-and-currency war of 2018 slows things down enough that the Fed pauses, stops bumping up the short end or that Treasury issuance is large enough to drive the long end higher but for right now, this is where we're at..."
I know we've gotten a bit obsessive with the whole "the yield curve does not matter" but it is important. The recession chatter is early, if not flat wrong.
We'll have some ideas if and when the curve matters for equities and the economy but right now there are more pressing concerns.

Natural Gas: Russian Media Downplays Poland's Latest Moves

Two from Sputnik which, while not as rah-rah as RT should still be considered as speaking for the Kremlin.
First up, and following on this morning's "Natural Gas: Polish Oil and Gas Company (PGNiG) confirms US LNG supply deal":

US LNG Imports 'Not a Game Changer' for Poland – Specialist
Polish company PGNiG has inked two long-term contracts for the annual supply of about two million tons of liquid natural gas from the US for the next 20 years, which is equivalent to 2.7 billion cubic meters of natural gas after regasification.
Poland will buy the LNG under the Free on Board (FoB) formula, meaning the seller pays for loading and the buyer pays other costs to the destination.

In an interview with Sputnik, Rafal Zasun, Editor-in-Chief of the website “Wysokienapiecie.pl” (“High Voltage”), said that even though the price for the US liquefied gas has not been announced, it is clear that it will be higher than pipeline gas.

“What is important, however, is that the contract has been signed for 20 years. As far as I know, the contract which Poland currently has with Gazprom expires in 2022. How much Russian gas will cost in 2022 is anyone’s guess. It makes no sense comparing the price written down in the contract signed years ago with the current one,” Zasun said.

He added that the price should be compared with the one now listed on European exchanges, where it has gone through the roof. Additionally, the two million tons will not be that important for the Polish market in comparison to the “reverse” gas the country is getting from Germany.
“If someday we want to stop getting gas from Russia, we’ll have to fill the void with ‘reverse’ gas from the West. It will be the same Russian gas, but provided though different arrangements, not on a long-term basis. It’s strange that Gazprom still sticks to long-term contracts,” Rafal Zasun said.
When asked whether the US LNG would be able to meet Poland’s growing demand, which is now in the ballpark of about 18 billion cubic meters a year, compared to the 2.7 billion it is going to receive from the US, Zasun said that regardless, Poland one way or another will get gas....MUCH MORE
Also at Sputnik:

Denmark Deciding Nord Stream 2’s Fate
The Nord Stream 2 gas pipeline to Europe will double Russian natural gas supplies to Germany via the Baltic Sea and reduce transit across Ukraine.
On August 10, the operator of the Nord Stream 2 gas pipeline construction project was forced to apply for an alternative pipeline route in Denmark, Sputnik contributor Dmitry Lekukh wrote.
The application and environmental impact assessment report to Denmark's Energy Agency requested permission to build through the country's 200 nautical mile exclusive economic zone northwest of Bornholm, thus bypassing Danish territorial waters (i.e. waters 12 nautical miles off the country's coast).

The company stressed, however, that it was not withdrawing from the ongoing procedure for the preferred route as applied for in April 2017.
Construction Permits

For Nord Stream and Nord Stream 2, permits from Russia, Germany and Finland were crucially important because there is no way either pipeline could possibly circumvent their territorial waters.
Permits from Sweden and Denmark are important, but not critical: in the case of Sweden, the pipes could be laid differently, although with some cost markups, and in the case with Denmark the same could be done without any additional cost.

Realizing the legal and technological impossibility of countering the project and hating to alienate the project’s main beneficiaries, Germany and Austria, the Swedes granted the requited permission.
The Danish authorities dug in their heels even though they officially recognized the impossibility of derailing the project as a whole.

And now the Danish Energy Agency says it will hold a public hearing on the environmental assessment of the alternative route for Nord Stream 2 on Bornholm Island slated for November 14.
By the way, the new route runs away from the country’s territorial waters, but still inside its exclusive economic zone to the north-west of Bornholm.

Yetl, from the point of view of international maritime law, Denmark cannot block it, except only under the pretext of some “ecological concerns.”...
...MORE

"This Is How Amazon Loses" (AMZN)

From NewCo Shift, Oct. 10:

Algorithmic merchandising leaves a bad taste in my mouth. Slowly but surely, it will erode trust for all the tech giants.
Yesterday, I lost it over a hangnail and a two-dollar bottle of hydrogen peroxide.

You know when a hangnail gets angry, and a tiny red ball of pain settles in for a party on the side of your finger? Well, yeah. That was me last night. My usual solution is to stick said finger into a bottle of peroxide for a good long soak. But we were out of the stuff, so, as has become my habit, I turned to Amazon. And that’s when things not only got weird, they got manipulative. Sure, I’ve been ambiently aware of Amazon’s algorithmic pricing and merchandising practices, but last night, the raw power of the company’s control over my routine purchases was on full display.

There’s literally no company in the world with better data about online purchasing than Amazon. So studying how and where it lures a shopper through a purchase process is a worthy exercise. This particular one left a terrible taste in my mouth – one I don’t think I’ll ever shake.

First the detail. Take a look at my search results for “Hydrogen Peroxide” on Amazon. I’ve annotated them with red text and arrows:
Amazon Hydrogen P.png
As you can see, the most eye catching suggestions – the four featured panels with large images – are all Amazon brands. Big red flag. But Amazon knows sophisticated shoppers like me are suspicious of those in house suggestions, so it’s included a similar product in the space below its own brands (we’ll get to that in a minute).

Above the featured items are ads: sponsored listings that are not Amazon brands, which means the advertiser (a small player named “Blubonic Industries”) is paying Amazon to get ahead of the company’s own promotional power. Either way, Amazon makes money. Second red flag.

By now, I’ve decided I’m not interested in either the sponsored brands at the top, or Amazon’s four featured brands, because, well, I don’t like to be so baldly steered into buying Amazon’s own products. Then again, before I move down to the results below, I do notice something rather amazing – Amazon’s familiar brown bottle of peroxide is really, really cheap – as in, $1.29 cheap. There’s even a helpful per oz. calculation next to the price, screaming: this shit is eight pennies an ounce cheap!

Well, I’m almost sold, but because I hate to be directed into purchases,  I’m still going to consider that similar brown bottle below, the one with the red label. Amazon knows this, of course. It’s merchandising 101 – make sure you give the consumer choices, but also, make sure the most profitable choice is presented in such a way as to win the day.

So my eye moves down the page to check out the second bottle. It’s from Swan, a brand I’ve vaguely heard of. Then I check its price.

Nine dollars and sixty nine cents.

Which would you buy? After all, this is a staple, a basic, a chemical compound. And you trust Amazon to get shit right, don’t you? I mean, a buck and change – nearly nine times cheaper? What a deal!
So…my eyes revert to Amazon’s blue labeled bottle. It wouldn’t have a four-star plus review if it burned your skin, right? And that’s when I notice the tiny icon next to it, which looks like this:
What’s this? Is this yet another annoying subscription service?  Ever since we moved to New York, my wife and I have tried to figure out Amazon’s subscription services (Fresh? Pantry? Prime Now? Whole Foods Delivery? Who knows?!). I’m already deeply suspicious of any attempt by Amazon to lure me into paying them monthly for a service that I don’t understand.

But…a buck twenty nine! So I click on the bottle, and the landing page is super clean, and there’s no obvious Prime Pantry mention. Plus, it turns out, that bottle from Amazon is the Whole Foods generic brand, which for whatever reason seems a bit better than a generic Amazon brand.  Did I just get lucky? Maybe  I can just get some super cheap chemicals delivered in a day to my door, and my annoying hangnail will be a thing of the past soon enough….Right?
...MORE

Possibly related: yesterday's ""Secret Amazon brands are quietly taking over Amazon.com" (AMZN)".

With All the Recent Market Turbulence It's Time To See How The Fly Is Holding Up

First the backdrop, three from Investor's Business Daily this morning:
8:34 AM ET
Dow Jones Futures: 3 Reasons To Stay In Cash As Bulls, Bears Battle For Stock Market Control 
9:40 AM ET
Stocks Veer Lower As Oil Prices Slump; This Dow Giant Gets An Upgrade
10:21 AM ET 
Tech Stocks Sell Off, These 2 Top Stocks Fall On Analyst Actions
DJIA down 361.34 (-1.41%) at 25,345.34.

And from The Fly at iBank Coin:

Thu Oct 18, 2018 11:34am EST 
I’M A CHINESE DRUG DEALER OVERLORD NOW

Excellent. 
Or at least, as well as might be hoped.
 

Climateer Line of the Day: Carpe Creditum Edition

Today's contribution comes from the rabble at the Financial Times' flagship online property, FT Alphaville's Markets Live.

An explanatory note: although ringmaster Bryce Elder can sometimes get the commenters to focus on the issue at hand, usually it's like herding cats with a couple of the Toms wandering off to do whatever Toms do and the fat calico going on about Glastonbury tickets and...

Today it was a little of both:

...BE On Johnston Press .....

Johnston Press PLC (JPR:LSE): Last: 1.82, down 0.6775 (-27.15%), High: 2.65, Low: 1.50, Volume: 14.86m
estrangedcapitalist greetings chaps. morning @be

BE
............... Live price is down 47% at the middle, 1.65p,

estrangedcapitalist I'm adding a little leverage this morning
estrangedcapitalist Life's too short not to

So there you go, add a little leverage.

"Man Terrified of Palantir, More Terrified to Explain What Palantir Is"

With news of an IPO being valued at $41 billion (WSJ) it's probably time to bust out one of the strangest Palantir stories we've seen bobbing on the river of news.

From Fortune:
He knows it’s bad. It’s Palantir after all. But there is one fear greater than one man’s fear of the ever-evolving data surveillance state: explaining what exactly Palantir is.

A 38 year-old accountant, Morgan Watts’s fear of Palantir is all-consuming. He’s covered his MacBook’s webcam, and installed the Signal messaging app. He’s even started browsing the web exclusively in Incognito mode.

“Palantir, man.” said Watts, when asked why he’d taken these privacy measures. However, when asked what Palantir is, or does, Watts had a decidedly less definitive answer.

“I have a full-time job, a family, and a thriving tomato garden. I can’t be expected to explain the inner workings of Peter Thiel’s brainchild. I just don’t have the time for a such a thing,” Watts said, lying.

As Watts described his style of news consumption, it became clear how one man can be so fearful of a company without understanding its purpose.

“I like to read headlines without reading the accompanying stories. Reading several headlines and drinking two cups of coffee give me just enough general anxiety to start my day,” Watts explained.
It is unlikely that reading more about Palantir Technologies would quells the fears held by Watts. In a 2017 report, the company’s multimillion dollar project with the Immigrations and Customs Enforcement Agency (ICE) came to the public’s attention. Technology companies have come under fire for their work with ICE, especially when they’ve been accused of facilitating the separation of families.

The Palo-Alto based company, founded by Peter Thiel, with solutions ranging from “Cyber” to “Law Enforcement” to “Skywise” responded with the following statement. “There is nothing to worry about. We don’t recommend anyone reads more about Palantir.” 
Okay, just kidding. The above is satire, fāke news, from a major business publication that risked provoking the hordes.
Here's the Wall Street Journal story, October 18:

Secretive Data Company Palantir Weighs Giant Public Offering
Data-mining giant Palantir Technologies Inc., one of Silicon Valley’s most secretive companies, is weighing an initial public offering likely to be among the largest in recent years, people familiar with the matter said.

Palantir is discussing with investment banks Credit Suisse and Morgan Stanley plans to go public as soon as the second half of 2019, the people said. Some bankers have told the firm it could go public with a valuation of as much as $41 billion—depending in part on the timing—or twice what it was most recently valued by private investors, the people said.

People familiar with the plans said they remain in flux, and that Palantir could ultimately decide to stay private or offer shares at a lower price to what is being discussed.

The discussions come amid a gusher of technology giants charging toward newly volatile public markets. The Wall Street Journal reported earlier this week that ride hailing firms Uber Technologies Inc. and Lyft Inc. are eyeing public debuts. Uber received proposals to go public at a staggering $120 billion valuation, nearly double its value in a private fundraising round just two months ago.

Other well-known startups considering IPOs in the months to come include messenger Slack Technologies Inc. and delivery service Postmates Inc., The Journal has reported.
Anything close to $41 billion would be a lofty valuation for a company of Palantir’s current size. The company has told investors it expects around $750 million in revenue this year, up from roughly $600 million a year earlier....MORE
Now pricing at 55 times sales, that's terrifying.

Previously:
Sept. 2018 
"Morgan Stanley's long romance of Palantir pays off as IPO nears" (also Thiel on dope)
April 2018 
"Palantir’s New Patents Shed Rare Light On Its Data Methods"
Sept. 2017
"Forget Wall Street – Silicon Valley is the new political power in Washington"
August 2017
Palantir: the ‘special ops’ tech giant that wields as much real-world power as Google
Sept 2016
A Deep Dive Into Spooky City: Peter Thiel and Palantir
Sept. 2016 
Palantir Is Demanding The U.S. Army Give It Some Business
Aug 2016

Unicorns: How Palantir Invaded Washington And Played The Lobbying/Influence Procurement Game Better Than The Incumbants
July 2016
"Pokémon Go Is a Government Surveillance Psyop Conspiracy"
May 2016
Inside Palantir, Silicon Valley’s Most Secretive Company
February 2016
Venture Capital: "Morgan Stanley Marks Down Its Stake In Palantir, Dropbox" 
August 2015
Peter Thiel’s Pursuit Of Technological Progress; It’s Not About Democracy and It’s Definitely Not About Capitalism – Part 1 
June 2013
Venture Capital: "Tech Companies And Their Love Affair With NSA and CIA" (GOOG)

And perhaps most alarming of all:
Robot Writing Moves from Journalism to Wall Street

The level of alarm is of course directly related to one's perspective. 

Softbank pushes link-ups as insurance strategy takes shape

Just as the old-timey Kremlinologists got paid pretty big money for explaining Soviet policy based on positioning on the May Day reviewing stand, so the next big opportunity in financial analysis will be discerning Softbank's plans by interpreting the shadows cast by various deals.
And then there was the time it looked like Chernenko was ascendant but what really happened was Ustinov was just late because he had to pick up the uniform at the dry cleaners.

From Reuters:
Softbank’s Vision Fund plans to pump more money into insurance, a sector it sees as both ripe for disruption and a potential booster for its bigger bets in cars, health and financial services, a Vision Fund executive told Reuters.

In the past year, the world’s biggest private technology investor has backed China’s largest online insurer ZhongAn (6060.HK) as well as PolicyBazaar, India’s biggest online insurance distributor, and app-based U.S. home insurer Lemonade.

And these and other insurance bets totaling nearly $3 billion are just the start, Vision Fund dealmaker David Thevenon said. The Vision Fund has raised nearly $100 billion, almost half of it from Saudi Arabia’s sovereign wealth fund.

“We believe that technology and how data is used, processed and collected is going to transform insurance,” Thevenon said.

Softbank believes a new breed of “insurtech” companies can work with other firms within its portfolio such as local transport juggernaut Uber and office sharing firm WeWork to roll out new products and services to their massive base of clients.

Three of the 10 biggest investments in new digital insurance firms over the past year — PolicyBazaar, Lemonade and Nauto — were led by Softbank, according to data from Willis Towers Watson and CB Insights.

Including its stakes in ZhongAn and two units of China’s biggest insurer, Ping An (601318.SS), it made half the dozen biggest insurance investments in the year to June.

“We are going to have to place several bets,” said Thevenon, a former Google executive. “The nice thing about insurance is that this is so big, it’s not exactly a market where you make one investment and you suddenly have 90 percent market share.”

Insurtech will represent just under 10 percent of the global insurance market by 2023, or more than $400 billion in premiums, against just 4 percent in 2018, according to a recent Jupiter report....MORE

Natural Gas: Polish Oil and Gas Company (PGNiG) confirms US LNG supply deal

Ramping up the use of the new (and already being expanded) President Lech Kaczyński LNG Terminal. Qatar is currently Poland's largest LNG supplier with the next step in the diversification away from reliance on Russia to be increasing Norwegian gas via the Norway-Denmark-Poland Baltic Pipe by October 2022.

From LNG World News, Oct. 17:
 Polish Oil and Gas Company (PGNiG) said it has executed two liquefied natural gas supply deals for the delivery of chilled fuel from Venture Global’s Calcasieu Pass and Plaquemines projects.

The long-term binding deals were signed late September following the corporate approvals, PGNiG said in a statement. The preliminary deals have been signed in June.

Each contract provides for the purchase by PGNiG of approximately 1 million tonnes of LNG annually for 20 years.

The deliveries may be further traded by the company on international markets and will be made on a free-on-board basis, PGNiG’s statement reads.

The contracts are in line with PGNiG’s strategy to expand its LNG trading business on global markets....MORE

"Regional EU GDP Per Capita 2004 vs 2014"

Following up on Tuesday's "GDP per Capita in Europe in 1890 (in 2017 $)".

From Brilliant Maps:

https://libraryeuroparl.files.wordpress.com/2016/07/1.png

The map above shows the relative GDP per capita of the EU-28’s NUTS 2 Regions in Purchasing Power Standard (PPS) in 2004 and 2014.

And if you’re wondering just what exactly PPS is, Eurostat explains that it:
is an artificial currency unit. Theoretically, one PPS can buy the same amount of goods and services in each country. However, price differences across borders mean that different amounts of national currency units are needed for the same goods and services depending on the country. PPS are derived by dividing any economic aggregate of a country in national currency by its respective purchasing power parities.
Therefore, the map above shows the relative wealth of each region in comparison to the EU-28 average for each year. Those in green have a GDP per capita at least 5% greater than the EU average in that year, whereas those in red have a GDP per capita that is no more than 75% of the EU average.
Inner London (UK) was the EU’s richest region in 2014 with a GDP per capita of 539% of the average.

Severozapaden (Bulgaria) was the poorest with a GDP per capita of just 30% of the EU-28 average....
...MORE