"Brain Gain: A Person Can Instantly Blossom into a Savant--and No One Knows Why"

From Scientific American:

Some people suddenly become accomplished artists or musicians with no previous interest or training. Is it possible innate genius lies dormant within everyone?

Savant syndrome comes in different forms. In congenital savant syndrome the extraordinary savant ability surfaces in early childhood. In acquired savant syndrome astonishing new abilities, typically in music, art or mathematics, appear unexpectedly in ordinary persons after a head injury, stroke or other central nervous system (CNS) incident where no such abilities or interests were present pre-incident.

But in sudden savant syndrome an ordinary person with no such prior interest or ability and no precipitating injury or other CNS incident has an unanticipated, spontaneous epiphanylike moment where the rules and intricacies of music, art or mathematics, for example, are experienced and revealed, producing almost instantaneous giftedness and ability in the affected area of skill sets. Because there is no underlying disability such as that which occurs in congenital or acquired savant syndromes, technically sudden savant syndrome would be better termed sudden genius....MUCH MORE

So you're saying there's still hope?

"Amazon ad sales top $2 billion, its fastest-growing segment" (AMZN)

This is becoming a nice little business in its own right.
From AdAge:

Amazon's advertising business continued its ascent last quarter, hitting $2.2 billion in revenue, a growth rate outpacing even optimistic forecasts for the company.

On Thursday, Amazon reported second-quarter results and advertising was again the brightest spot for the e-retailer, growing at 132 percent, its fastest-growing segment by far. Amazon's total sales hit $52.9 billion, an increase of 39 percent year over year.

Meanwhile, profits were $2.5 billion, which was up from $200 million at the same time a year ago. Advertising is helping Amazon hit the new levels of profitability.

In the first quarter, Amazon ad sales topped $2 billion for the first time. In the second quarter 2017, ad sales were $945 million.

According to eMarketer's latest forecast, Amazon was expected to only do $3.8 billion in digital ad sales this year. However, the earnings report suggests Amazon is on pace to do between $4 billion and $5 billion in ad sales for the full year, overshooting even that rosy projection.

Brian Olsavsky, Amazon's chief financial officer, expanded on the company's advertising fortunes during a conference call with analysts....MUCH MORE

The stock is changing hands at $1,820.09 up 12.09 (+0.67%).
Previously:
July 16 
"Jeff Bezos and Amazon have the advertising industry looking over its shoulder" (AMZN)
January 2018 
Platforms: Amazon Could Make Billions From the Ad Business (AMZN)
April 2017
Media: Google and Facebook's ‘Digital Duopoly’ and What Role Advertising Plays in All of It (plus Jeff Bezos and Izabella Kaminska stop by) GOOG; FB; AMZN
November 2016 
Google, Facebook And a Deep Dive Into The Future of the Future (GOOG; FB)
October 2012 
Amazon’s Next Big Business Is Selling You (and your data) AMZN

And many more.  

I Am So Close To Going Full-On Luddite

Daisy, Daisy... 
First up, from Threat Post:

Bugs in Samsung IoT Hub Leave Smart Home Open To Attack

Researchers found 20 flaws in Samsung’s SmartThings Hub controller – opening up supported third-party smart home devices to attack.

Researchers found 20 vulnerabilities in Samsung’s SmartThings Hub, allowing attackers to control smart locks, remotely monitor the home via connected cameras and perform other alarming functions.

Cisco Talos researchers, who published a technical breakdown of the vulnerabilities on Thursday, said each of the flaws are located in Samsung’s centralized controller, a component that connects to an array of IoT devices around the house – from light bulbs, thermostats, and cameras. SmarThings Hub is one of several DIY home networking devices designed to allow homeowners to remotely manage and monitor digital devices....MORE

And at Business Insider:

Uber and Lyft are creating more traffic and congestion instead of reducing it, according to a new report

Oh, and back to Threat Post, July 19:

IoT Robot Vacuum Vulnerabilities Let Hackers Spy on Victims

All of which was, of course, foreseen by the prophetess.
(I'd go with "sybil" but that might be misinterpreted as either a young lady with multiple personalities or the woman who picked up the pieces on Fawlty Towers)

The Daisy ref. is an homage to an homage to an homage.

In 2014's "Internet of Things: In Which Izabella Approaches Escape Velocity Edition" we linked to FT Alphaville's Ms. Kaminska's speculative (and grin-inducing) piece:

Cybersecurity dispatches: Managing the IoT poltergeist threat

Imagine the scene in the not too distant future.

An Uber self-driving electric car has just dropped you home. Your front door has recognised your face, and your fingerprint has authenticated that it’s definitely you. You get into your house, not a key in sight, kick off your shoes, and happily discover that the 3D printing feature in your fridge has already printed the food you plan to consume for dinner. All the appliances you need are on. And everything you don’t need is off, nice and efficiently saving power.

You decide to treat yourself to a quick 30-minute Netflix holographic update, only to get a nudge from your wearable tech that you’ve still got a 10 minute exercise deficit to meet your daily exercise quota. It’s a problem because you happen to have signed up to the extreme health management option which shuts down ApplePay access — without which Netflix won’t work — if you fail to meet your objectives. You quickly get busy on your smart-grid connected treadmill (which conveniently sells off the energy produced by your system back into the grid).

When all of a sudden… your utility door flings open and your iRobot Roomba begins singing Daisy, Daisy....MORE

I'm guessing she was riffing off 2001: A Space Odyssey:

But HAL's song was itself an homage:

Why HAL 9000 sang 'Daisy' in 2001

... It turns out that in 1961, the IBM 7094, among the earliest and largest mainframe machines developed by the computing giant, became the first computer to sing, and the tune it warbled was—you guessed it—"Daisy Bell." The vocals were programmed by John Kelly and Carol Lockbaum, while the musical accompaniment was programmed by Max Mathews. It seems certain that Kubrick used this as the inspiration for HAL's signoff in his movie.

A recording of the IBM 7094's rendition is below....blastr

And there you go.
And people still don't see a compelling need for connected homes.

Here are a few dozen of our IoT posts.

The list of Uber posts is five times as large.

"Mattis Rejects Viral Australian Report On Impending US Iran Strikes"

Well that's the last time we listen to the ABC.
Following up on "Oil: Could Iran really close the Strait of Hormuz? (what if the U.S. bombs Iranian nuke facilities?)".

From ZeroGedge:

A day after an Australian ABC report went viral with the claim that the White House has drawn up plans to strike Iran's alleged nuclear facilities as early as next month, Defense Secretary James Mattis said on Friday morning it's a "complete fiction".

The Australian Broadcast Corporation report cited high level defense and intelligence figures: "Senior figures in the Australia's Turnbull government have told the ABC they believe the US is prepared to bomb Iran's nuclear capability," and perhaps most alarmingly added, "The bombing could be as early as next month."

Fox News national security correspondent Jennifer Griffin questioned Mattis about the report on Friday:

I asked Mattis about report US preparing strikes against Iran. 

MATTIS: "I have no idea where the Australian news people got that information. I am confident it is not something that is being considered right now. I think it is a complete, frankly, it's fiction."

...MORE

Wait—He would say that wouldn't he!
Mandy Rice-Davies!

WARNING: Click the AMZN Link In Yesterday's "Peak Hipster: Nordic miniature shaving axe" At Your Own Risk

All I wanted to do was check the link for:

 

Peak Hipster: Nordic miniature shaving axe

I came to mock hipsters, not to praise them.

So this morning when I went to Amazon to grab the earnings release for the post immediately below, "Every major Wall Street analyst on the internet giant's earnings report (AMZN)"
I was greeted with:

Inspired by your browsing history

Cold Steel (CS90WVBA-BRK) Viking Hand Axe 90WVBA, Polished

---

And: 

Viking Wooden Beard Comb Odin Pocket Comb FREE SHIPPING Celtic Nordic Gift for Him

And:

Red Deer Ragnar Lodbrok Viking Bearded Carbon Brown Oak Steel Axe w/ Drop point edge wood handle

And: 

Bushcraft hammer Quality blacksmith Viking Nordic hammer tool Carpentry woodwork building Thor hammer Father brother husband gift

Who the hell does Amazon think I am?
Thor's hammer? Ragnar's axe? Odin's Celtic/Nordic fusion beard comb?
And they're now showing up on every site I visit. Yikes.

My favorite tech guy, Siva a streetwise Hindu boy (CalTech post-doc), says there are two ways to deal with this:

1) clear the browser cache so Amazon doesn't recognize me as some sort of hirsute Viking wannabe.
2) override the AMZN cookies with cookies from another site whose ads you don't mind. Bingo, Sotheby's. Ooh, Irish art, September 11th.

"Every major Wall Street analyst on the internet giant's earnings report" (AMZN)

We'll be back with more about why we focused on the cloud stuff in yesterday's "Ahead of Amazon's Earnings: I've Looked at Clouds From Both Sides Now (AMZN; GOOG)". For now this segment information from the Q2 press release is the TL;DR:

Operating income: AWS  $1.642 billion
Total operating Income  $2.983 billion

Yes, the cloud business accounted for 55% of the company's operating income.

Here's CNBC with the analysts:

Amazon shares rallied after the e-commerce giant reported a second-quarter profit that doubled Wall Street's expectations.

Amazon's stock jumped more than 4 percent in premarket trading Friday.
"Amazon continues to perform at a level well-above its mega cap internet peers," Barclays said in a note.

"In a critical time, Amazon's stellar sales and burgeoning margin expansion helped decouple it from its FANG peers," said Nomura Instinet.
Here's a wrap of all the major analyst opinions.

J.P. Morgan (Overweight):

"Overall, Amazon remains one of our top picks and is on our Analyst Focus List. Amazon has now shown significant profit upside two quarters in a row, and while revenue and unit growth were modestly below expectations, 26 percent year over year FXN growth ex-Whole Foods Market is still strong, and only a 50 basis points of sequential deceleration off a large base. Importantly, we believe any revenue softness will be overshadowed by the profit upside. We reiterate our Overweight rating & are establishing a 2019 price target of $2,200 based on our SOP analysis."

Barclays (Overweight):

"Amazon continues to perform at a level well-above its mega cap internet peers, with revenue and operating income that was in-line and 68 percent above consensus respectively. Amazon Web Services revenue accelerated once again for the third quarter in a row. Operating income growth of 79 percent was the stand-out once again, and retail margins are also expanding at the highest rate in recent years. Valuation and sentiment continue to push the upper limits, but we believe the execution is justifying further upside for shares, as our operating income increases another 20 percent or more in the out year on this result. Amazon remains one of our favorite ideas in mega cap."

Bank of America (Buy):

"No change to our thesis view that strong growth of Amazon's higher-margin businesses (cloud, advertising, 3P) will be the key sentiment drivers for 2018 and can continue to drive profitability upside. We view Amazon as having the least amount of long-term disruption risk in the FANG (Facebook, Amazon, Netflix and Google) group. We reiterate our Buy rating and raise our PO to $2,200 from $1,840 based on higher estimates and multiples in our sum of the parts analysis."

Credit Suisse (Outperform):...

...MUCH MORE

The stock is up $62.14 (+3.44%) at $1,870.14.

"Twitter Shares Crash 17% After Users Drop, Company Warns More Declines Expected" (TWTR)

Good.
I'm starting to think Twitter is just another chance to look like a moron and quite honestly we all have more than enough of those sorts of opportunities. As Abe Lincoln said:

It is better to remain silent and be thought a fool, than to open your mouth and remove all doubt*

From ZeroHedge:

It's deja vu all over again as Jack Dorsey pulled a Zuckerberg and reported a miss - and a drop - in user growth, while warning of even greater declines in the coming quarter.

Looking at the financial results, they were not that bad, with the company reporting Q2 adjusted EPS 17c, just beating the estimate of 16c, with Q2 adjusted Ebitda of $265 million also beating estimates of $261.5 million, on Q2 revenue of $711 million, higher than consensus $697 million, of which ad revenue was $601 million, up 23% y/y, however a slowdown in US ad growth is starting to become obvious, with US ad revenues rising only 9%.

However, what spooked the market is that monthly active users were 335 million, a decline of 1 million from the prior quarter largely in the US (where MAUs dropped from 69MM to 68MM), and a miss of the average analyst estimates of 337.8 million.

Macquarie's Benjamin Schachter put it well in a note before the earnings came out:

"Despite Trump being perhaps the most high-profile user possible, usage has not dramatically improved over the past couple years. We simply don't see the product improvements having a dramatic impact on Twitter's ability to attract new users.''

He's right: the following long-term chart of user growth shows just how much it has slowed down in recent quarters....

...MUCH MORE

In pre-market action the stock is down $5.45 (12.69%) at $37.49 

*Maybe it wasn't Lincoln. From The Quotations Page:

...It's been attributed to many persons, but seems to have its roots in the Bible:

It is better to remain silent and be thought a fool, than to open your mouth and remove all doubt . -- George Eliot
Better to remain silent and be thought a fool than to speak out and remove all doubt.-- Abraham Lincoln (also attr. Confucius)
It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.-- Mark Twain (1835-1910)
Even a fool, when he holdeth his peace, is counted wise: and he that shutteth his lips is esteemed a man of understanding. -- Bible, 'Proverbs' 17:28.

There are no citations for Lincoln or Twain. I have my doubts about Confucius.

Oil: Could Iran really close the Strait of Hormuz? (what if the U.S. bombs Iranian nuke facilities?)

From Deutsche-Welle:

Iran's president has warned the US that he could close the Strait of Hormuz after Washington threatened to halt Iranian oil exports. But could Tehran really block the most critical choke point for global oil trade?

Donald Trump's latest threat — to halt Iranian oil exports — has been met with defiance by Tehran.

Iran's president, Hassan Rouhani, threatened to order the closure of the Strait of Hormuz, a major oil shipping waterway in the Persian Gulf, in a move that would cause substantial disruption to oil shipments, and cause a massive spike in the price of oil.

Washington initially planned to shut Iran out of global oil markets after Trump abandoned the 2015 deal that limited Iran's nuclear ambitions, and demanded all other countries stop buying Iranian crude by November.

But on Sunday, US Secretary of State Mike Pompeo unveiled Washington's tougher line, under which he warned of additional financial penalties against Tehran. But in equal measure, the US said it would lift the new sanctions if Iran ended its ballistic missile program and interventions in regional conflicts.

In his speech, Pompeo sought international support for an economic "pressure campaign" on Tehran, but so far the only reaction has been an angry one from Iran.
"America should know that peace with Iran is the mother of all peace, and war with Iran is the mother of all wars," Rouhani said at the weekend.

More than 85 percent of crude exports that pass through the Strait of Hormuz go to Asia.

A third of sea-traded oil passes through
The Strait of Hormuz lies between the Persian Gulf and the Gulf of Oman, providing the only sea passage for crude oil from many of the world's largest oil producers — including Kuwait, Bahrain, Iran, Iraq and the UAE — to the Indian Ocean.

Just 34 kilometers (21 miles) wide at its narrowest point, the shipping lane is only 3 kilometers wide in either direction.

With OPEC's top five exporters inside the Gulf, the volume of oil crossing the Strait has been constantly increasing each year, underlining its status as the most important maritime trade route for black gold....MORE

This might be a very timely question.
From the Australisn Broadcasting Corp., July 27:

Donald Trump could be ready to order a strike against Iran, Australian Government figures say

Senior figures in the Turnbull Government have told the ABC they believe the United States is prepared to bomb Iran's nuclear facilities, perhaps as early as next month, and that Australia is poised to help identify possible targets.

It comes amid intense sabre-rattling by US President Donald Trump and his Iranian counterpart Hassan Rouhani.

The ABC has been told Australian defence facilities would likely play a role in identifying targets in Iran, as would British intelligence agencies.

But a senior security source emphasised there was a big difference between providing accurate intelligence and analysis on Iran's facilities and being part of a "kinetic" mission.
"Developing a picture is very different to actually participating in a strike," the source said.
"Providing intelligence and understanding as to what is happening on the ground so that the Government and allied governments are fully informed to make decisions is different to active targeting."

Prime Minister Malcolm Turnbull said this morning he had no reason to believe the US was preparing for a military confrontation.

"President Trump has made his views very clear to the whole world, but this story … has not benefited from any consultation with me, the Foreign Minister, the Defence Minister or the Chief of the Defence Force," he said.

The top-secret Pine Gap joint defence facility in the Northern Territory is considered crucial among the so-called "Five Eyes" intelligence partners — the US, UK, Australia, Canada and New Zealand — for its role in directing American spy satellites.

Analysts from the little-known spy agency Australian Geospatial-Intelligence Organisation would also be expected to play a part.

Canada would be unlikely to play a role in any military action in Iran, nor would the smallest Five Eyes security partner New Zealand, sources said.

Iran is a signatory to international agreements such as the Non-Proliferation Treaty and is not known to currently possess any weapons of mass destruction, but Mr Rouhani has recently boasted his nation's nuclear industry is advancing at a fast pace.

Last month Iran's nuclear chief opened a new nuclear enrichment facility that he said would comply with the nuclear deal Tehran signed with world powers in 2015.

Any US-led strike on Iranian targets would be fraught for a region bristling with tensions. Israel would have reason to be anxious about retaliation, given Iran rejects Israel's right to exist....

...MUCH MORE

"Gold Bears Press Bets In Record Numbers"

Noooooo...
What we want is death by boredom, like that 1999 - 2002 period when Britain sold its gold:

FinViz

We've been babbling about an ultimate bottom of $875 for the shiny stuff, ever since the Financial Times' Izabella Kaminska pointed out an interesting correlation in her post dated December 7, 2012: "Capping the gold price" which we finally caught up to in January 2013's "Spot Gold Down $21.80 as HSBC, Credit Suisse Lower Forecasts (GLD)".

Three months later, April 2013 we followed up witth "Gold Hammered to 15 Month Low on Heavy Technical Selling, Weak Long Liquidation": 

Woulda, coulda, shoulda.
If I had been paying attention when Izabella Kaminska wrote "Capping the gold price" , I'd have more chips to play with.
Alphaville posted it on December 7, 2012, five days before the $1715 intermediate term top.
Instead it took me four weeks to get to it, Jan. 3, with "Spot Gold Down $21.80 as HSBC, Credit Suisse Lower Forecasts (GLD)"
Here's the trading from that day:

As you can see, my thought process was something akin to "Saaaay, something appears to be happening with gold". We just hadn't been paying attention.
On Feb. 15 with "Gold Is Approaching a Waterfall Decline" at $1627.90 I finally got around to posting the next target:

The next area of support is all the way down at $1525 from May 2012.

Better late than never, right? Right?

Well, gold got down to that $1525 and quite a bit lower, working from memory $1050 in December 2015 rings a bell and we pop up from time to time with the $875 target. Here's July 2015's
Commodity Investors And the Kübler-Ross Model of Grief (or why gold could go lower than our $875 target)

And December 2015's
"More Gloom & Doom For Gold & Silver In 2016 – Deutsche Bank Outlook"
We've been looking for $875 since 2012 and frankly, the delay is cutting into annualized returns....

December 2014 
"Strong Second Half Of 2015 For Gold - Financial Astrologer Mahendra" 
Most active (Feb) futures $1177.50 down $2.30. We continue to target $875 although it is getting boring to continue typing this....

March 2014 
Gold On Its Way to $875 
$1311.20 last.
We've been blowing this horn for a while*:

So, we're not some ursa-come-lately, no sirree. But enough of the past, on to the headline story which scares the short out of me:

ZeroHedge, July 26, 2018:

Gold Bears Press Bets In Record Numbers
Gold shorts are near a record high as saturating bearishness sets in.

The Wall Street Journal reports Gold Market’s Slide Brings Out the Bears.

Investors are placing a record number of bets that a protracted slump in gold prices will continue as the metal is punished by a strengthening U.S. dollar and rising interest rates.
Hedge funds and other speculative investors have increased wagers that gold prices will fall over the past five consecutive weeks, pushing them to their highest level ever during the week ended July 17, according to Commodity Futures Trading Commission Data going back to 2006.
As speculative investors have turned bearish, money managers began pulling money from gold-backed exchange traded funds. Investors yanked more than $2 billion out of gold-backed ETFs in June, the largest monthly outflow since July 2017, World Gold Council estimates show. Demand for American Eagle gold coins, a proxy for physical demand, has also been weak.
“This suggests that short sellers are pressing their bets,” Sundial Capital Research’s Jason Goepfert wrote in a note to clients last week. Typically the opposite happens when gold prices are bottoming out.

Horse in Front of the Cart

That article is an accurate assessment of what is happening....MORE

Front futures $1224.30 down $7.50.

For more on Chancellor of the Exchequer Gordon Brown and the so-called "Brown Bottom" here's 2010's: 

This is How a Competent Central Bank Does it: Swiss National Bank Seen Selling Euros (EUR/CHF) 

It sure beats the hell out of the Gordon Brown approach.
On May 7, 1999 Britain's Chancellor of the Exchequer, decided to sell 60% of the country's gold reserves. The price of the shiny stuff had been in decline for nineteen years, falling from it's January 1980 high fix of $850 (I seem to remember an $875 print in Hong Kong, but it was a long time ago) to $282.40 on that May Friday.
Not only did Brown decide to sell after a 67% decline, HE ANNOUNCED HIS INTENTIONS IN ADVANCE.

And 2012's
"Revealed: Why Gordon Brown sold Britain's gold at a knock-down price"

"Ten years left to redesign lithium-ion batteries"

This time frame is not too restrictive.
Tesla and their battery partner, Panasonic, have removed a lot of the cobalt (60%) from their battery recipe and are on their way to zero cobalt over the next couple years.

So, more interesting than any time pressure is the potential spur to creativity on the question of alternative chemistries.

From the journal Nature, July 25:

Reserves of cobalt and nickel used in electric-vehicle cells will not meet future demand. Refocus research to find new electrodes based on common elements such as iron and silicon, urge Kostiantyn Turcheniuk and colleagues.

Electric vehicles need powerful, light and affordable batteries. The best bet is commercial lithium-ion cells — they are relatively compact and stable. But they are still too bulky and expensive for widespread use.

The performance of rechargeable lithium-ion batteries has improved steadily for two decades. The amount of energy stored in a litre-sized pack has more than tripled, from around 200 watt hours per litre (Wh l^–1) to more than 700 Wh l^–1. Costs have fallen by 30 times, to around US$150 per kilowatt hour (kWh). But that still exceeds the $100 per kWh goal for affordability set by the US Department of Energy. And batteries that are powerful enough for an electric car (50–100 kWh) still weigh around 600 kilograms and take up 500 litres of space.

The pace of advance is slowing as conventional technology approaches fundamental limits. The amount of charge that can be stored in gaps within the crystalline structures of electrode materials is nearing the theoretical maximum. Projected market growth will not lower prices substantially — the markets are already large.

Worse, the materials used in electrodes, notably rare metals such as cobalt and nickel, are scarce and expensive. Surging battery production has almost quadrupled wholesale prices of cobalt over the past two years, from $22 to $81 per kilogram.

High demand and prices are already encouraging some producers to cut corners and violate environmental and safety regulations. For example, in China, dust released from graphite mines has damaged crops and polluted villages and drinking water¹. In Africa, some mine owners exploit child workers and skimp on protective equipment such as respirators. Small artisanal mines, where ores are extracted by hand, often flout laws. Some companies, including BMW, follow strict policies to verify their cobalt suppliers². Many do not.

Alternative types of electrode based on cheap, common metals such as iron and copper need to be developed urgently. In our view, the most promising candidates involve ‘conversion materials’, such as copper or iron fluorides and silicon. These store lithium ions by bonding chemically with them. But the technology is still at an early stage. Problems with stability, charging speed and manufacture must be overcome.

We call on materials scientists, engineers and funding agencies to prioritize the research and development of electrodes based on abundant elements. Otherwise, the roll-out of electric cars will stall within a decade. 

Scarce and expensive
Lithium-ion batteries work by shuffling lithium ions between two electrodes. Ions flowing from the anode to the cathode discharge a current, which powers the car. The lithium ions flow back when the battery is recharged.

In commercial cells used today for electric vehicles, the lithium ions are held in tiny voids within the crystals that make up the electrodes (these are known as intercalation electrodes). The anodes are typically made from graphite and the cathodes from metal oxides. Common oxides include lithium nickel cobalt aluminium oxide (NCA, commonly LiNi_0.8Co_0.15Al_0.05O₂) or lithium nickel cobalt manganese oxide (NCM, often LiNi_0.6Co_0.2Mn_0.2O₂ or LiNi_0.8Co_0.1Mn_0.1O₂). A lithium-ion car battery with a 100 kg cathode requires 6–12 kg of cobalt and 36–48 kg of nickel.

The prices of metals reflect demand, supply and the costs of extracting them from ores. Cobalt is pricey because it is rare and highly sought after. It requires capital-intensive processes to produce it, involving roasting, flash smelting and the consumption of poisonous gases³. Cobalt is often a by-product of copper and nickel mining, and can also need separating from other metals.

Few cobalt mineral deposits are concentrated enough to be worth mining. Most deposits contain just 0.003% of the metal; more than 0.1% is needed to achieve prices of $100 to $150 per kg (ref. ⁴). Production costs jump for poor ores because more rock must be processed (see ‘Metal prices’). Thus, only 10⁷ tonnes of cobalt out of 10¹⁵ tonnes potentially available in Earth’s crust are profitable to extract⁵. Similarly, only 10⁸ of 10¹⁵ tonnes of nickel reserves are commercially viable⁵. 

Source: London Metal Exchange

Cobalt-rich minerals are found in just a few places⁶. The Democratic Republic of the Congo (DRC) supplied more than half (56%) of the 148,000 tonnes of the metal mined worldwide in 2015 (ref. ⁶). Most of this goes to China, which holds stockpiles of 200,000 to 400,000 tonnes⁶. Australia hosts 14% of the world’s cobalt reserves but has yet to exploit them fully. Cobalt has been extracted from the deep sea floor, but mining here would be too expensive, ecologically and economically....MORE

Ahead of Amazon's Earnings: I've Looked at Clouds From Both Sides Now (AMZN; GOOG)

One quick note on Facebook's horrendous guidance.
Good.
I know it whacks the stock and thus the indices of which it is a part, S&P 500, Nasdaq and Nasdaq 100; throwing a bit of delay in the march higher but I can put up with a slight change of schedule in the Climateer plan for world domination. Here's the weighting of the top 9 stocks in the S&P (10 symbols), number 3 reports today:

Rank	Company	Symbol	Weight
1	Apple Inc.	AAPL	3.964014
2	Microsoft Corporation	MSFT	3.455751
3	Amazon.com Inc.	AMZN	3.077697
4	Facebook Inc. Class A	FB	2.151135
5	JPMorgan Chase & Co.	JPM	1.623780
6	Berkshire Hathaway Inc. Class B	BRK.B	1.595816
7	Alphabet Inc. Class C	GOOG	1.582882
8	Alphabet Inc. Class A	GOOGL	1.569816
9	Exxon Mobil Corporation	XOM	1.468268
10	Johnson & Johnson	JNJ	1.449517

And because Amazon's cloud business, AWS, is the profit generator that AMZN uses as the starting point when deciding how much profit to show each quarter

(it's not as bad as GE's "beat by a penny" accounting in the '90's but still something to behold)

we'll took at what Google had to say recently.

Bows and flows of angel hair

And ice cream castles in the air...

First up, Business Insider

Sundar Pichai strayed from Google's typical rhetoric as he touted the growth of Google Cloud

• Google has touted the growth of Google Cloud Platform for years, but on Monday CEO Sundar Pichai acknowledged that rivals are also faring well.
• That didn't stop him from taking a veiled shot at competitors by saying that companies considering cloud adoption face a real danger of getting "on the wrong platform."
• Analyst Dan Ives said Google has little chance of "knocking off" Amazon or Microsoft but the cloud represents a growth area for the company.

For years, Google managers have talked up the growth of the company's cloud services and tried to undermine the quality level of their rivals' offerings.

Nearly every time Diane Greene, Google Cloud Platform's CEO, speaks publicly she trash talks Amazon and Microsoft's clouds. But on Monday, CEO Sundar Pichai sounded a very different note — if only briefly.

Alphabet Inc., Google's parent company, issued the company's second-quarter earnings report on Monday and afterwards, Pichai took questions on a conference call with analysts.

Mark Mahaney, managing director at RBC Capital noted that while Google Cloud Platform (GCP) appears to be growing, so does Amazon's AWS and Microsoft's Azure. He wanted to know how Pichai explained that.

Speaking on the night before the start of "Next 2018, " GCP's annual showcase for cloud services and products, Pichai conceded that all the players in the segment are faring well — not just Google.
"That's why it feels far from a zero-sum game," Pichai said. "All the major players are definitely seeing traction."

That's not Google's typical narrative on the subject and the reason is obvious. The statement raises awkward questions. Are GCP's business gains the result of its superior expertise and technology as managers have suggested, or are all the players benefitting from a deluge of money flowing into the sector as cloud adoption in the business world expands?

Cloud computing is supposed to be one of the next hot growth areas for Google and management continues to devote more resource to developing the business. The company doesn't break out GCP's financial numbers but rolls them into its "other" category, which generated $4.425 billion in the second quarter, slightly above analyst expectations of $4.4 billion. So, the stakes are high .

Back on the offensive
Maybe that's why it didn't take long for Picahi to go back on the offensive. In his response to Mahaney, he cautioned that though much of the sector is growing, there's still a real danger for cloud customers to get "on the wrong platform." The CEO also said he believes more businesses will begin to trust their information to multiple platforms....MORE

From The Register:

Google answers 'Why Google Cloud?' with services and spectacle
Cloud Services Platform debuts, mixing containers, monitoring, AI, management, etc

...Diane Greene, CEO of Google's cloud business, was delivered to the stage via a rotating booth, rather more theatricality than the usual executive walk-on.

Her mission was to answer the question, "Why Google Cloud?"

For those in the audience who looked over their shoulders, Greene's remarks were easy to anticipate, thanks to visible teleprompter screens suspended from the middle of the hall. Consider it a step toward transparency.

Why Google Cloud? Greene brought Target CIO Mike McNamara on stage to answer that question. The retail giant has become a Google Cloud Platform (GCP) customer....MORE

From GeekWire, something the commenters will be tearing into for Amazon (and the source of that earnings recognition magic):

Google nearly doubles spending on capital projects as it continues major cloud investment

Google parent Alphabet spent a whopping $5.5 billion on capital expenditures in the most recent quarter, nearly doubling that output from a year ago as the company continues to expand its cloud business.

That figure is way down from last quarter when Google spent $7.67 billion, a number that was juiced by the $2.4 billion purchase of the Chelsea Market building in New York. The jump from $2.8 billion in capital expenditures a year ago to $5.5 billion this quarter comes from increased spending on data center construction, facilities and production equipment to support the Google Cloud business, add capacity to handle more YouTube subscribers and investments in machine learning, CFO Ruth Porat said during a call with investors.

The rise in spending on capital projects didn’t stop the tech giant from posting huge numbers for the quarter, beating analyst expectations and sending its stock soaring in after-hours trading. However, the massive $5 billion fine (€4.3 billion Euro) levied by the European Union for forcing manufacturers to pre-install Google Search and other apps on Android devices was a major drag on the company’s bottom line in the second quarter....MORE

Finally, also from GeekWire (July 10), something that may not get as much play but which NVIDIA is keeping track of

Amazon Web Services’ Peter DeSantis sheds more light on the cloud giant’s custom chip strategy

Evolving cloud workloads are going to require evolving hardware strategies to anticipate those future demands, and Amazon Web Services continues to lean on its 2015 acquisition of Annapurna Labs to create custom chips that will give customers a wide range of performance options.

AWS vice president of infrastructure and customer support Peter DeSantis closed out the 2018 GeekWire Cloud Tech Summit with a discussion of the custom chips that AWS is developing that deliver the specific type of horsepower needed to address challenging workloads that are moving onto the cloud, such as drug discovery, oil and gas exploration, and artificial intelligence.
“This ability to go all the way — to putting your infrastructure into custom design — has truly allowed us to take a bunch of customer requirements that excite us and invest in really large efforts to deliver this value,” DeSantis said.

During the early days of cloud computing, customers were content to have familiar standard-issue hardware at their fingertips through cloud providers like AWS and Microsoft Azure. In essence, they were building software the same way they always had; they were just running it on general-purpose Intel processors and virtual machines on servers managed by someone else, rather than setting up racks and racks of their own equipment....MORE

We'll be back with more after the numbers come out this afternoon.
The consensus EPS guess is $2.48, up from 40 cents last year.

"Peak Hipster: Nordic miniature shaving axe"

We've passed the peak haven't we?
Please tell me we've passed the peak, seeing faux lumberjacks in the city is still jarring even after a half-decade.
Anyway, from Amazon via The Truth About Knives:

I will refrain from gratuitous hipster-bashing here, having faced a fair deal of criticism for having done so in the past. Instead, I will sit here quietly and let folks tee off in the comments themselves. In fact, there might well be a prize for the funniest comment relating to this latest item from the Depths of Uselessness – The Viking Celtic Nordic style straight razor warrior axe.

From the description on Amazon:

Straight razor warrior axe in Viking Celtic Nordic style is an original men’s gift.

Axe Razor is made by hand with the handcarving wooden box. The old world axe razor can become unforgettable present.
It is a real straight razor. It is sharp. It is made of tempered steel
This men’s present will not remain unnoticed since this item is not only hansome [sic] souvenier but also practical and useful stuff for everyday care....

...MORE

Previously on the tats-and-beards channel:

February 2017
Brexit: "Berlin to Send Back Thousands of British Hipsters"
January 2013
"The Hipster Techie Mental Map"
February 2013
Sir Mick Jagger: David Bowie is 'kind of weird' (how 'bout Bowie as a Weimar Gigolo?) 
November 2013 
"Too lazy to start a real startup? Play 'Hipster CEO' instead" 
June 2015 
Mathematical Model Explains Why All Hipsters Look the Same
October 2013
How Hipsters Ruined Berlin 

Shipping: "Tankers—Is There Hope from Brazil"

From Hellenic Shipping News, July 24:

A potential recovery of Brazil’s crude exports could soon offer newfound hope for tanker owners. In its latest weekly report, shipbroker Gibson said that “for some time now, Brazil has been a major source of demand for the tanker markets, both from a crude export perspective and as an outlet for refined products (notably from the US). It’s fair to say that Latin America’s largest economy has had a pretty tough ride in recent years, having to contend with the oil price collapse and ‘car wash’ scandal. Things are, however, now looking better. Upstream, the nation has a continuous pipeline of new offshore oil projects scheduled to come online, whilst downstream, Petrobras is edging closer to achieving the foreign investment necessary to finish its stalled refining projects”.

According to the London-based shipbroker, “both upstream and downstream developments will have far reaching implications for the tanker sector. On the crude side, the main positive demand driver is that the growth in crude production is projected to accelerate, at least in the short term. However, so far in 2018, production growth has failed to meet expectations. Accelerating declines in mature fields have seen production in the Campos basin fall to a 17 year low according to a recent Reuters report. These declines have, to a certain extent, masked output increases from new projects, primarily in the Santos basin. Overall, slower production growth, field maintenance and mature field declines have seen crude exports running 300-350,000 b/d below 2017 levels over the first six months of year. Nevertheless, new project start-ups are expected to offset declines from mature fields in the coming years, with higher growth expected over the second half of 2018 and beyond. Recent IEA data suggests that Brazilian crude production will grow by nearly 900,000 b/d between 2018-2023. On the face of it, positive for crude exports from the country”.

Gibson said that “in recent months, utilisation of existing refining capacity also appears to be on the up. These higher refining runs have restricted crude exports, whilst at the same time negatively impacting product trades. Petrobras reported refined products output of 1.679 million b/d in Q1 2018, the lowest level since at least 2007. However, unofficial data suggests runs may have risen by 200,000 b/d since then, assuming a utilisation rate of 85%. Higher oil prices have forced the government to introduce fuel subsidies, making it more difficult for traders to import refined products, such as gasoline and diesel, into the country. This has of course negatively impacted the product tanker market, most notably those vessels loading in the US Gulf. The lack of export demand has been accentuated by similar developments in Mexico. Despite this,future downstream capacity additions in Brazil remain uncertain. Most newrefining projects in Brazil have failed to materialise. Petrobras has halted work at its 150,000 b/d Comperj plant, whilst the 130,000 b/d expansion at Abreu e Lima has also stalled. The company has been courting investors to assist in the commissioning of these plants, but even so, it is likely to be a number of years before any major capacity additions come online in the country”....

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"U.S. open to lifting sanctions off aluminum giant Rusal - Mnuchin"

This is very odd, I thought the current U.S. administration loathed Deripaska. I know the oligarch gave up control but he still has "control", if you know what I mean.
From Reuters, July 20:

The U.S. Treasury is open to removing Russian aluminum producer Rusal from a U.S. sanctions list, Treasury Secretary Steven Mnuchin said on Friday, adding the objective was “not to put Rusal out of business.”

Mnuchin’s comment was the latest indication the Trump administration was trying to aid sanctions-hit Rusal, which has taken a series of steps to try to appease the U.S. government and get the restrictions lifted.

The U.S. Treasury in April imposed sanctions against billionaire Oleg Deripaska and the eight companies in which he is a large shareholder, including Rusal, in response to what it called “malign activities” by Russia. But the sanctions caused havoc in the global aluminum market, prompting several countries and companies to successfully lobby Treasury for a softening of the terms on Rusal....MORE

Ho-hum, Space-X Lands Another Rocket Booster on Drone Ship After Successful Launch of 10 Satellites

From Space.com:

SpaceX Lands Rocket in Harshest Conditions to Date and Attempts to Catch Fairing

SpaceX launched 10 Iridium satellites today (July 25) in the seventh and penultimate launch required to complete the communications company's new constellation.

The Falcon 9 rocket carrying the satellites took off from California's Vandenberg Air Force Base at 7:39 a.m. EDT (1139 GMT, 4:39 a.m. local time). The launch had a 1-second window because of the precision needed for the satellite insertion, company spokesperson John Insprucker said during the launch broadcast. The launch went smoothly, even though fog obscured the view of the rocket until after liftoff.

SpaceX hoped to complete two separate marine tasks in addition to the launch itself: landing the first stage of the rocket on the drone ship "Just Read the Instructions" and catching the rocket's fairing with a second boat, which, to date, no launch has accomplished. The company knew both boat maneuvers would be tricky today. "The weather in the Pacific is bad," Insprucker said. "We have choppy seas."

"[The conditions are] the worst that we've ever had for trying to get a first stage on the drone ship," he said later in the broadcast. Nevertheless, the company soon confirmed in a tweet that the rocket successfully landed on the drone ship — despite some initial confusion due to a lack of lighting on the landing platform....MUCH MORE, including pics and vids.

Regarding the attempt to recover the fairings:

Spectators had hoped the company would attempt to catch the rocket's fairing with "Mr. Steven," a boat equipped with a giant net. Earlier in July, the company tweeted photos of the boat with an upgraded net four times larger than the previous version and stated that it was targeting another recovery attempt for later in the month, and today's launch was the company's last of the month.

Mr. Steven—now with more net. SpaceX’s fairing recovery vessel has been fitted with a 4x larger net ahead of its next recovery attempt targeted for later this month. https://t.co/cjXvzg1H70 pic.twitter.com/AdAwPP30OU

— SpaceX (@SpaceX) July 13, 2018

SpaceX was not able to specify at launch when it would know whether Mr. Steven was successful, but a later update confirmed the weather was too harsh for the maneuver. "They did see the payload fairing coming down, but they were not able to catch it in the net," Insprucker announced shortly after 8:30 a.m. EDT (1230 GMT).

San Francisco To Vote On Corporate Tax to Help Homeless

Seattle did the same but reversed course on their "head tax" within a month after Amazon started making noises about leaving.

From The San Francisco Business Times:

San Francisco’s corporate tax to tackle homelessness added to November ballot

A homeless encampment under the 101 Freeway overpass.

Todd Johnson | San Francisco Business Times

A measure that would levy taxes on San Francisco’s largest companies to combat the city’s rampant homelessness has landed on the November ballot.

Dubbed the “Homelessness Gross Receipts Tax Ordinance,” Article 28 aims to raise around $300 million from a 0.5 percent gross receipts tax on businesses taking in more than $50 million in annual revenue. The measure would double the city’s annual homelessness budget....MORE

And across the bay, from KGO Radio 810:
Oakland proposes ‘landlord tax’ as homeless crisis solve

What the hell happened to the U.S. west coast?

"Business students more likely to have a brain parasite spread by cats"

From NewScientist, July 25:

An analysis of students in the US has found that those who have a certain type of brain parasite are more likely to be majoring in business studies.

Toxoplasma gondii is a protozoan parasite carried by cats. It can infect people through contact with cat faeces, poorly cooked meat, or contaminated water, and as many as one-third of the world’s population may be infected. The parasite doesn’t make us feel sick, but it forms cysts in the brain where it can remain for the rest of a person’s life. Some studies have linked infection with the parasite to slower reaction times, schizophrenia, bipolar disorder, suicidal behaviour, and explosive anger.... 

...MORE

And from Proceedings of the Royal Society - B:

Risky business: linking Toxoplasma gondii infection and entrepreneurship behaviours across individuals and countries

"GRAINS-U.S. wheat futures jump as global harvest expectations fall"

Following on yesterday's "As wheat harvest heads to parched north, Europe braces for more losses".

FinViz

 543.00 up 32.60 (+6.39% )

From Reuters via Successful Farming:

CHICAGO, July 25 (Reuters) - U.S. wheat futures surged to eight-week highs on Wednesday, supported by concerns about crop shortfalls in key production areas around the globe, traders said.

The strength in wheat lifted corn futures to their highest in more than three weeks. Corn also received support from concerns about dry conditions limiting harvest yields in parts of the U.S. Midwest.

Soybean futures were slightly lower, with the market technically weak after failing to break through Tuesday's high.

The most-active Chicago Board of Trade soft red winter wheat contract jumped 5.2 percent, on track for its biggest daily percentage gain since July 3, 2017. Prices topped out at $5.39-1/2 a bushel, their highest since May 29.

MGEX spring wheat and K.C. hard red winter wheat futures also posted strong gains.
Consultancy Strategie Grains has again cut its estimate for this year's EU soft wheat crop, which is now expected to be below 130 million. This would be the lowest soft wheat harvest in the 28-member bloc since 2012, analyst Laurine Simon told Reuters.

In Russia, the world's top wheat exporter, yields are around a three-year low, according to agriculture consultancy SovEcon.

In the United States, scouts on annual tour found below average yield prospects for hard red spring wheat in the southern half of North Dakota and adjacent areas of South Dakota.

"That contrasts with crops ratings and USDA's July estimate showing much better yields following last year's drought on the northern Plains," Farm Futures analyst Bryce Knorr said in a note to clients....MORE

Also from Reuters, July 25:

GRAINS-EU wheat prices climb to 3-year high as crop outlook dims

Financial investors increase net long position in Euronext wheat 

"Rural Mainstreet Economy Declines for July: More Than 3 of 5 Bankers Report Negatives from Trade Skirmishes"

From Creighton University:

July Survey Results at a Glance:

* For a sixth straight month the overall index rose above growth neutral.
* Almost one-third of bank CEOs recommended that the Federal Reserve leave short-term interest rates at their current levels for the rest of the year.
* More than three of five, or 78 percent, of bank CEOs reported that current trade skirmishes and rising tariffs have had a negative impact on their local economy.
* Approximately 75.6 percent of bankers reported negative impacts of trade rifts and tariffs on grain farmers in their area.
* Economic confidence plummeted among bankers for the month.

OMAHA, Neb. (July 19, 2018) – The Creighton University Rural Mainstreet Index climbed above growth neutral in July for a sixth straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. This is the first time since the July 2014 survey that the overall index has risen above growth neutral for six straight months.
Overall: The overall index slid to 53.8 from 56.1 in June. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Surveys over the past several months indicate the Rural Mainstreet economy is solid but with less positive economic growth. However, the negative impacts of recent trade skirmishes have begun to surface with the weakening of already anemic grain prices,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Pete Haddeland, CEO of the First National Bank in Mahnomen, Minnesota, said, “Grain prices are at, in some cases, 10-year lows. Not good.”

According to Fritz Kuhlmeier, CEO of Citizens State Bank in Lena, Illinois, “The trade issues/tariffs have been devastating on our local dairy industry when tacked on top of already below cost or breakeven milk prices.”

Farming and ranching: The farmland and ranchland-price index for June rose to a weak 44.7 from June’s 42.7. This is the 56th straight month the index has fallen below growth neutral 50.0.

The July farm equipment-sales index increased to 38.8 from June’s 36.3. This marks the 59th consecutive month the reading has moved below growth neutral 50.0.

Many bankers reported good, or above average rainfall, with crop production off to a good start. Furthermore, in portions of the region, the recreation industry was boosting the economy.

Banking: Borrowing by farmers expanded for July as the loan-volume index rose slightly to 76.9 from 76.3 in June. The checking-deposit index slumped to 37.8 from June’s 41.7, while the index for certificates of deposit and other savings instruments slid to 43.9 from 47.6 in June.

This month bankers were asked, “How many times should the Federal Reserve raise interest rates for the rest of 2018?”

“Almost one-third, or 30 percent of bank CEOs recommended keeping rates at their current level, 45 percent suggested one additional interest rate increase, 20 percent supported two additional rate hikes and 5 percent recommended three more rate increases for 2018,” said Goss....MUCH MORE

Some Stuff To Think About When Thinking About the Yield Curve

From Barron's, July 24:

 ***

...1. The yield curve may not be signaling a weakening U.S. economy. While the short-end of the curve is mainly driven by Fed policy that reflects domestic economic strength, the long-term yields are increasingly influenced by the global bond market, explains Jonathan Golub, U.S. equity strategist at Credit Suisse. The near-zero yields on 10-year German bunds and Japanese JGBs, for example, make the U.S. 10-year Treasury look much more attractive on the international market and therefore lead to the rising price and lowering yields on the long end of the curve.

At the same time, the U.S. Treasury is issuing fewer long-term notes and bonds than it used to in favor of short-term bills, writes Vincent Deluard at INTL FCStone Financial. Higher issuance means more supply, lower price, and higher yields for the short-term Treasuries. The narrowing yield spread might just be a result of the supply imbalance in the bond market rather than expectations about the economy, Deluard says.

2. There are no other signs of a looming recession. Historically, an inverted yield curve has always been accompanied by a group of other ominous signals before the economic downturn. But we are not seeing those yet this time. The year-over-year growth of the Leading Economic Index (LEI), which includes 10 major economic indicators such as unemployment claims, consumer confidence, manufacturers’ new orders, and stock price, has turned negative before every recession since the 1970s. The index is up by 5.8% compared to 12 months ago and certainly isn't sounding a recession alarm.

3. The Fed can keep the curve from inverting if it wants to. Traditionally, the long-end of the curve—the 10-year Treasury and out—is thought to indicate bond investors' long-term vision of the market, free from manipulation by central banks. That might not be the case any longer, writes INTL FCStone's Deluard. He argues that the slope of yield curve nowadays can be easily controlled by central banks' policy such as the Operation Twist and isn't the organic market indicator it once was. "The yield curve is no longer the careful judgment of wise long-term investors, but the Frankenstein-like creation of central bankers," Deluard explains....

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