"Wall Street Journal to cut staff as it consolidates print edition"

This follows on yesterday's story that a young lady at Reuters had to write:

Thomson Reuters to cut 2,000 jobs; profit tops estimates

From Politico, who seem to be developing a specialty in the business of news:

The Wall Street Journal will debut an overhauled and slimmed-down version of its print product on Nov. 14 in an effort to make the paper more financially viable "for the foreseeable future," Journal editor Gerard Baker announced in an internal memo to staff Wednesday.

The changes, which mostly consist of consolidations and combinations of sections, will come with staff cuts, Baker warned. One section to be hit hard is the newspaper's Greater New York coverage, which will be consolidated to a "more concise, focused daily report on life and business," Baker said.

"All newspapers face structural challenges and we must move to create a print edition that can stand on a sound financial footing for the foreseeable future while our digital horizons continue to expand," Baker wrote in the memo. "As I previously mentioned, there will unfortunately need to be an elimination of some positions as part of this process."

To give a sense of what the section consolidations could mean in terms of staff reductions, consider that Greater New York currently has a team of roughly three dozen, including reporters, editors and production people. The staff was informed in a meeting Wednesday afternoon that since Greater New York will be moving to two pages in the main section of the paper, the number of positions will be trimmed to 16, including 12 reporters, and that everyone will have to reapply to secure one of those jobs.

The announcement comes less than two weeks after the Journal offered all of its 1,500 employees voluntary buyouts to reduce the number of layoffs that Baker said would be inevitable. The move also comes amid anxiety and uncertainty stemming from the publication's financial woes and the way the Journal is handling the changing newspaper industry.

Other sections will also be consolidated. The Journal's Business & Tech and Money & Investing sections will be combined into a new Business & Finance section; similarly, the Journal's Personal Journal and Arena sections will be combined into a section called Life & Arts....MORE

First Solar, Inc. Announces Third Quarter 2016 Financial Results (Beat; Miss; Neutral) FSLR

Earlier:

Analysts surveyed by FactSet are projecting GAAP earnings of 77 cents per share on revenue of $989.7 million.
During the same quarter last year, the Tempe, AZ-based solar energy solutions company reported GAAP earnings of $3.38 per diluted share on revenue of $1.27 billion....

From the press release:

• Net sales of $688 million
• GAAP earnings per share of $1.49
• Non-GAAP earnings per share of $1.22
• Cash and marketable securities of $2.1 billion, net cash of $1.3 billion
• Maintain 2016 EPS guidance; Revenue guidance lowered for revised project sale timing

First Solar, Inc. (Nasdaq: FSLR) today announced financial results for the third quarter of 2016. Net sales were $688 million, a decrease of $246 million from the prior quarter, due to the completion of multiple systems projects during the quarter, partially offset by higher module-only sales. 

The Company reported third quarter earnings per share of $1.49, compared to $0.13 in the prior quarter. The third quarter was impacted by pre-tax charges of $4 million, related to previously announced restructuring actions. Restructuring related charges in the second quarter were $86 million. Third quarter non-GAAP earnings per share, adjusted for restructuring charges and a foreign tax benefit, were $1.22, compared to $0.87 in the second quarter. Net income was higher versus the prior quarter as a result of lower restructuring charges and the aforementioned foreign tax benefit.

Cash and marketable securities at the end of the third quarter increased to $2.1 billion, primarily due to borrowing under the Company’s revolving credit facility. The short-term borrowing is a result of the ongoing construction of large scale projects which have not yet been sold. Cash flows used in operations were $76 million in the third quarter.

“In the third quarter our operational and financial results were solid,” said Mark Widmar, CEO of First Solar. “Our entire fleet module efficiency for the past quarter was 16.5% and our lead line efficiency exited the quarter at 16.9%, demonstrating continued execution on our technology roadmap. We are pleased with our current year financial performance; however, current market conditions are extremely challenging and require us to carefully assess our short and long-term strategic response.”...MORE

We'll be back with more. In early pre-market trade the stock is up 14 cents at $40.72 after a knee-jerk 2.5% drop as the machines mis-read the revenue forecast as a miss.  

Earnings Call

First Solar, Inc. 2016 Third Quarter Financial Results

11/02/2016
4:30 PM ET

Webcast

UPDATED--Ahead of First Solar's Q3 Earning's Report (FSLR)

Update below.
Original post:

How things have changed.
Back in the day (2007-2008) we'd have a ritual on FSLR report date including digging up a GoGo's video and wait with that fear/greed frisson for the appointed second.

No more, the stock just doesn't react the way it did when it was the shiny new thing , ripping 20-25 bucks after hours as everyone tore into the minutiae of cost per watt and reading forward guidance like Kremlinologists watching the May Day reviewing stand to see who's in and who's out.

Back in the day First Solar was at the top of the short interest lists. Now the short interest doesn't even make the top 50.

Last week Goldman reiterated their neutral rating. Neutral!
Twas a time when just a whisper that it was going on the "Conviction Buy List" would be good for a 5% bump.
Now their target price is $1.34 higher than at present, $40.66 last

And instead of hype-n-tout we have this:

Analysts surveyed by FactSet are projecting GAAP earnings of 77 cents per share on revenue of $989.7 million.
During the same quarter last year, the Tempe, AZ-based solar energy solutions company reported GAAP earnings of $3.38 per diluted share on revenue of $1.27 billion....

-The Street.com

And this for short interest:

Settlement Date	Short Interest	Avg Daily Share Volume	Days To Cover
10/14/2016	14,496,697	2,261,994	6.408813
9/30/2016	13,442,761	3,337,060	4.028325
9/15/2016	12,684,852	3,086,399	4.109920

-Nasdaq

Yeah, up 7.8% from September but only 21% of the company’s float.

Well, we still have We Got the Beat:



More after the report. 
First Solar, Inc. To Announce Third Quarter Financial Results on November 2, 2016

UPDATE:  First Solar, Inc. Announces Third Quarter 2016 Financial Results (Beat; Miss; Neutral) FSLR

Serfing USA: The Rental Economy

From FT Alphaville:

In the future, we will all be rental serfs

Alternative title: When “smart” is a euphemism for vassal.
It’s probably a sweeping statement but we’re going to go with it. The technology which made the 20th century great did so because it empowered and liberated people, giving them greater autonomy over themselves, not less.

The washing machine. The vacuum cleaner. The dishwasher. The car. The record player. All these technologies increased personal autonomy rather than decreased it, whilst also endowing people with leisure time. We became masters of our domains and kings of our very own castles.

There was, nevertheless, one downside.

The profit opportunities associated with these technologies were subject to diminishing returns. A continuous pipeline of newer, better, brasher and more gimmicky products was thus needed to ensure profits could be sustained into the long-term. In no time, this gave way to the planned obsolescence phenomenon — making products purposefully disposable — in a bid to keep customers captured and dependent.

But with the normalisation of disposable culture, the environmental costs of purposeful inefficiency became self evident. This was not long-term sustainable.

So how did the techno-capitalist community respond? Was it by going back to high-quality manufacturing processes focused on creating long-term durable goods for the masses? Not really. Such policy would have slowed production cycles and increased upfront costs, and led to a major descaling of the global economy. Where it did occur it could only ever cater to a privileged and increasingly shrinking luxury-consuming elite.

Or did they, as Carlota Perez — the tech industry’s most beloved economist — has long argued, focus on creating business models which service, maintain or insure long-term durable goods, as as to extend their durability further? Perhaps a little bit. But not much, because servicing stuff is a low productivity activity which involves high-touch skilled labour which in and of itself is difficult to scale, and (if done well) ends up being a self-defeating activity....MORE

Thanks for the hat tip Ms. K.
I could go on and on about recurring revenue business models but it all comes down to three words:

 "You own nothing!" 

(I fear I may be channeling Willie Wonka's: "You get... NOTHING!!! You lose! GOOD DAY, SIR!")

Attention Collectors: A Potential Mispricing In the Art Market

From Art Market Monitor, Nov. 1:

The Baffling But Tireless Tamara de Lempicka Market

Bloomberg’s James Tarmy wonders why Tamara de Lempicka’s portrait of a man, Guido Sommi, is priced so much lower than her private market?

The Sommi portrait hung in a private collection for more than 40 years; now it’s coming to Sotheby’s New York, carrying an estimate of $4 million to $6 million. While that range places the work firmly within Lempicka’s top 10 prices at auction, it’s well below her record, which was achieved five years ago when a smaller, later painting sold for $8.5 million at Sotheby’s in New York.

The Sommi portrait’s estimate is, moreover, a pittance compared to what Lempicka’s art has reportedly sold for on the private market....MORE

"Oil futures drop after EIA reports a whopping 14.4 million-barrel climb in U.S. crude supply"--Corrected

Holy crap!
Even bigger than yesterday's American Petroleum Institute number: "Crude, Gasoline Tumble After Biggest Inventory Build In 8 Months"
And a draw in gasoline versus the API's build. (there's that 'opposite sign' thing we've been rattling on about)

Yours truly had a brain spasm when typing the above, both reports showed a draw in gasoline and varied in the magnitude, not the direction:

• API: Gasoline -3.5mm (-1mm expected)
• EIA: Gasoline  -2.2mm (-1mm expected)

Regret the error.

From MarketWatch:

Oil futures dropped Wednesday after the U.S. Energy Information Administration reported that domestic crude supplies rose by 14.4 million barrels in the week ended Oct. 28. Analysts polled by S&P Global Platts expected a 1.9 million-barrel climb, while the American Petroleum Institute late Tuesday reported a rise of 9.3 million barrels, according to sources....MORE

December WTI is down another $1.40 at $45.27. Brent is down in sympathy at $46.62.

FinViz

"Can California transition to next tech wave?"

From the Orange County Register:

The consumer technology boom, largely responsible for a resurgence in California’s economy after the tech wreck of 2001, seems to be coming to an end. The signs are widespread: slowing employment, layoffs from bell-weather social media companies, the almost embarrassing difficulty of finding buyers for Twitter, the absorption of Yahoo by Verizon and the acquisition by Microsoft of LinkedIn.

This is not to minimize the great things which have been accomplished over 15 years of massive investment in these technologies. Mark Zuckerberg founded Facebook in 2004, and is now worth some $55 billion, up $15 billion from last year. In 2015, more than 1 billion people globally used Facebook applications every single day. The “app economy” created by Steve Jobs and Apple is equally impressive. What would we have done with our free time if it were not for Farmville, Angry Birds and Pokemon Go?

The tech boom has changed the face of wealth in America. Tech oligarchs, mostly clustered in the Bay Area, which dominates some 40 percent of employment in search and web publishing, now account for one quarter of the wealth of the Forbes 400 richest Americans. This tilting of wealth is not going away, and may shape the business world for a generation.

Concentration and contraction

Overall though, the economic impact of these technologies has been limited. Google’s Alphabet Inc. and Facebook Inc. together employ fewer than 75,000 people, one-third fewer than Microsoft, worth only a fraction its value. Snapchat, the star of Silicon Beach, employs several hundred people, hardly enough to reverse a long-term decline in Southern California tech employment.

More troubling still are changes in the Bay Area tech culture. In its 1980s heyday, Silicon Valley was a Wild West of start-ups, new companies and ideas, and lots of jobs. Today, it resembles increasingly the cozy and fundamentally uncompetitive world of Detroit’s Big Three — Ford, Chrysler and General Motors. The Valley is increasingly dominated by a handful of companies — Google, Facebook and Apple — while conditions for startups, even well-funded ones, have deteriorated markedly.

Despite the hype surrounding the possible IPO for Snapchat, new firms raised $15 billion in venture capital during the third quarter of 2016 — ending in September — down 28.6 percent from $21 billion for the same period one year ago. The third quarter of 2016 marked the fifth straight quarterly decline in completed financings and the lowest number recorded by PitchBook since the fourth quarter of 2010, signaling that investors are writing bigger checks for fewer deals.

Rather than the Wild West, we are seeing consolidation in social media, which depends largely on advertising revenue. Google and Facebook claimed 64 percent of that revenue, according to Pivotal Research. Google scooped up $30 billion and Facebook gathered $8 billion, while other smaller companies have lost market share over the last five years.

As promising start-ups are swallowed up at an alarming rate, the likely scenario, as we have seen in other industries, may be secular stagnation. With less competition and innovation, the track record of oligarchies, particularly regionally incestuous ones, is not a great one, as anyone who deals with new Microsoft or Apple operating systems, can attest. Even Sergei Brin, a co-founder of Google, recently suggested that start-ups would be better off launching somewhere else....MORE

Shipping: "Maersk Shares Sink After Profit Hit by Weak Freight Rates, Oil Prices"

From the Wall Street Journal:

Danish shipping-and-oil giant posts 43% fall in third-quarter profit

Shares in A.P. Moeller-Maersk A/S fell as much as 9% on Wednesday after the Danish shipping-and-oil giant reported a 43% drop in third-quarter net profit amid sustained weak freight rates and persistently low oil prices.

Net profit dropped to $429 million from $755 million a year earlier, missing analysts’ forecast of $496 million. Revenue declined 9% to $9.18 billion, compared with expectations of $9.39 billion, according to FactSet estimates.

The results are the latest sign of how both of the company’s main business areas have been buffeted by industry pressures in recent years, prompting it to pursue a major transformation as it searches for growth.

Its energy unit has struggled against a backdrop of nearly two years of low crude-oil prices, while its container-shipping business is under pressure from tumbling freight rates amid a capacity glut that has prompted price wars between operators.

Such pressures led Maersk to announce in September that it would split its operations into two separate divisions focused on energy and transport in what is the biggest shake-up in the group’s 100-year plus history. The company said Wednesday that implementation of the plan is progressing and that it would provide further details at its capital markets day next month.

Maersk’s third-quarter earnings underscore the company’s struggle.

Group underlying profit, which strips out one-off items, dropped to $426 million from $662 million a year earlier, and would have been worst had it not been for a strong performance from its drilling operations. Maersk Line, the world’s biggest container operator in terms of capacity, swung to an underlying loss of $122 million, from an underlying profit of $243 million a year ago. Maersk Oil contributed an underlying profit of $146 million, up from $32 million a year earlier.

The company said average container freight rates were 16% lower year-over-year in the quarter, while the oil price was down 8%.

For the full year, Maersk is forecasting an underlying profit below $1 billion, compared with $3.1 billion last year, citing developments in the global economy as well as container freight rates and weak oil prices....MORE

The Stress May Be Getting To Hedgie Crispin Odey--UPDATED

Update below.
Original post:

His behavior the last few years has gotten increasingly strange.
And his timing, which is critical when playing the game he plays (British gentleman swashbuckler) has been atrocious.

From Bloomberg: 
Hedge Fund Manager Odey Says U.K. Stocks Could Plummet 80%

Crispin Odey, whose main hedge fund has lost about 43 percent this year, says U.K. stocks could slump 80 percent as the economy is roiled by a recession and higher inflation following the vote to leave the European Union.

Shares will come under pressure after the FTSE 100 share index climbed 30 percent over five years even as earnings fell by 80 percent, the money manager said in a letter to investors last week seen by Bloomberg News. Odey Asset Management has short positions -- bets the stocks will fall -- in companies including Tullow Oil Plc, Intu Properties Plc, and ITV Plc.

“We are now destined to have a recession in the U.K. as well as inflation,” Odey wrote. “It will be difficult for the stock market to remain above all of this.” An official at the $8.8 billion London-based investment firm didn’t respond to a call and e-mails seeking comment.

Odey, who spoke in favor of Brexit before the vote in June, hasn’t made money at his main Odey European Inc. fund since 2014, when it gained 5.5 percent. He was down almost 13 percent last year....MORE

A couple of the recent stories at ZeroHedge, starting with the above:

...From his latest letter to investors:

These times are getting interesting. The FTSE 100 share index is now up 30% over five years, whilst earnings have fallen by 80%. On an earnings yield of 1.6%, the stock market could fall by 80% and, provided profits did not fall, would be on a 13x P/E multiple. The Bank of England is proud that they have engineered such a pleasant result but there is now increasing evidence that this is unsustainable.

On the back of the uncertainty for overseas investors in UK PLC following on from the Brexit result, the current account deficit is ballooning and the budget deficit is following. Carney, the Governor of the Bank of England, has responded by flooding the money markets with more cash, QE, and in the process supporting the government 10yr bond at a current yield of 1.2%. However, as sterling falls against all its trading partners’ currencies, it is mechanically ensuring that inflation rises up through 3.5%....MORE

For Crispin Odey This Is The Endgame: Hedge Fund Billionaire Goes All In Betting On "Violent Unwind" Of QE Bubble
Billionaire Crispin Odey, Who's Had A Pretty Terrible Year, Is Betting Everything On Gold

Previously at Climateer Investing:
May 2014
Hedge Funder Crispen Odey Has Become a Parody of.....Crispen Odey
September 2012
Palladio is Turning Over in His Tomb

And a fine tomb it is.*

I saw the story yesterday under the FT Alphaville headline "Crispin Odeyous".

It wasn't until I saw the DealBreaker link to the Telegraph that I realized what a pig this guy is:
UK Hedge Fund Manager Sets Unreachably High Bar With Resplendent Private Residence For Chicken Friends

…Odey has upped the ante for poultry accommodation – he’s building a temple for his chickens for which the stone alone costs £130,000. The Palladian-style chicken house, designed by Christopher Smallwood Architects, has won planning approval from the Forest of Dean District Council...

...(For those who can appreciate the news without worrying about what it’s going to cost them, here’s a blueprint of the chicken mansion, courtesy of FT Alphaville):

 

Drawings for Crispin Odey’s “chicken house” depicted a structure with a three-sided stairway

 and two dozen columns.

Crispin Odey’s chickens come home to (a luxury) roost [Telegraph via FT Alphaville]
*And the lives of all deep-pocketed animal owners thinking a bedroom and half-bath are gonna cut it....

August 2009
Crispin Odey's Apocalyptic Worldview

Five months after the start of the bull market.

UDDATE: Follow-Up: "Odey Hedge-Fund Assets Dip 60% as Clients Shun ‘Bitter Pill’"

Blackstone's "Byron Wien’s Key Fears About the Stock Market"

From Barron's Wall Street's Best Minds column:

The veteran strategist discusses the looming negatives that could undermine his bullish case for stocks.

When the presidential election is over, investors can focus on what is going on in the world economy and what future investment opportunities are lurking out there. If Donald Trump were to win, the outlook would be very uncertain because of his maverick ideas on both domestic and foreign policy. Though Hillary Clinton’s victory is likely, we should not assume a seamless transition from the policies of the Obama administration. She will focus on infrastructure, improving the Affordable Care Act, job creation, revising the tax code and immigration. The question will be how much of her agenda will she be able to get passed by a Republican-held House of Representatives. 

Probably the most important lesson of the last six months is the importance of populism in the political process. A large segment of the population in the United States and Europe believes that their future economic opportunities are limited, and they want change from the path being followed by their governments. This discontent fueled the political success of Bernie Sanders and Donald Trump. Populism and immigration reform were the key factors abroad, influencing U.K. voters to leave the European Union. Most observers would agree we are in a period of secular economic stagnation, but the equity market in the United States is near an all-time high and initial unemployment claims are at a 43-year low. If Hillary Clinton wins the presidency, it may not be because a plurality of American voters embraced her policies, but because many were adverse to the prospect of a Donald Trump–led White House. A majority of voters actually distrust her, and she might have lost to John Kasich, Marco Rubio or even Jeb Bush had they been nominated.

While we all support the concept of improving infrastructure, the Obama administration actually got very little done, despite being committed from the beginning to “shovel ready” projects. To get infrastructure work implemented effectively and quickly is hard. Although Larry Summers believes infrastructure should account for 1% of GDP, we can’t count on fiscal spending to contribute in a major way to overall economic growth in the United States anytime soon, even if these programs get through Congress. There is also the question of how many new jobs would be created by increased government spending. Given the doubts that exist about the benefits of revising the tax code and modernizing immigration policy, these challenges reinforce the futility of looking to the new administration to get the economy on a much stronger growth path right away. 

We do know we are facing some headwinds. The Federal Reserve and other central banks are beginning to doubt the effectiveness of continued monetary expansion as a way to stimulate the economy, despite increased liquidity having been an important factor in driving the equity market higher since the end of the recession in 2009. We are also seeing the early signs of inflation. Both the Consumer Price Index and the Personal Consumption Expenditures indicators are still below 2%, but average hourly earnings are up 2.6%, the availability of skilled workers is getting tighter and inflation could become a negative factor some time during the next year. Rising rates and more inflation are likely to be interpreted negatively by equity investors.

The question puzzling investors is whether equities can continue to move higher when the economy is struggling. Real GNP has been growing at less than 2% and both short and long term interest rates are likely to rise, dampening price earnings ratios. The price of oil is moving higher, taking some money out of the pockets of consumers. Data on housing have generally been favorable to growth, but recent reports on starts were disappointing. The oil drilling rig count has increased (as the price of oil has come off its lows), and there is the prospect of improved capital spending from the energy sector, but it hasn’t appeared yet. 

Fracking has picked up but it is not as vigorous as it was when oil was above $70 a barrel. There are, however, countervailing winds. Commodity prices are rising, which should be good for emerging markets. The producer price index is rising in China, which usually coincides with improved growth there. No “hard landing” talk any more. Earnings for the Standard & Poor’s 500 have been essentially flat since 2014, but analysts believe they will be up sharply next year. That echoes their optimism in previous years.

While I believe we are in a period of secular stagnation where valuations are high and profits are likely to be disappointing, I do think there is a bull case out there: Hillary Clinton is elected president by a wide margin and at the top of her agenda is infrastructure spending. She persuades Paul Ryan to rally Republicans in Congress to pass an ambitious program to upgrade our roads, bridges, airports and tunnels. Her argument is that a bipartisan effort will benefit both political parties. Jobs are created as the projects get underway. 

Consumer spending improves because the infrastructure workers now have the resources to buy what they had postponed. The price of gasoline edges up and inflation moves above 2% but this gives companies some pricing power which had been lacking. The Federal Reserve begins to raise rates, putting more money in the hands of retirees. Energy companies are heartened by the improvement in the economy and the rise in oil prices and they begin to spend money on capital projects, creating more jobs. The minimum wage begins to rise across the country. With real growth above 2%, corporate profits begin to rise, justifying higher stock prices. Investors become enthusiastic about opportunities in equities. Entrepreneurship flourishes and the initial public offering market becomes strong again. 

You could also argue that historical multiples that indicate the market is expensive don’t apply because interest rates were much higher in earlier cycles. At these yields, equities should sell at somewhere between 25 and 30 times earnings. The public has been selling equity mutual funds and buying bond funds for several years. Hedge funds also have a low equity exposure compared to historical levels. Even long only investors are cautious. This kind of negative market mood generally creates opportunity. Another positive is the fact that no recession seems to be in sight even though the present expansion is 88 months old. Excesses like an inverted yield curve, investor euphoria, a hostile Federal Reserve and bloated inventories do not appear to be present. Even so, some prominent economists think there is a 70% chance of a recession in 2017. I would estimate the probability of the bull market continuing into 2017 at something like 35%.

My principal worry is earnings disappointment....MORE

U.S. State Department Spokesman John Kirby is a Moron

From the Washington Free Beacon:

State Dept Embarrassed During Debate With Reporter Over Asian Countries Aligning With China

Washington Free Beacon by Jack Heretik 3:35 pm

State Department spokesman John Kirby struggled Tuesday when he debated Associated Press reporter Matt Lee over the number of Asian countries that are now aligning with China instead of the United States.

After Malaysia signed multiple new deals with China this week, including the purchase of ships and a railroad line, questions began to swirl if Malaysia was aligning more with China. The Philippines announced last month its intention to forge closer ties with China and move away from the U.S.

“I don’t want to get too conceptual here, but what do you mean it’s not born out by the facts that countries in greater numbers in Southeast Asia are becoming friendlier with China?” Lee asked at the State Department daily press briefing. “I mean it’s completely born out by the facts.”

“Name them,” Kirby said.

“Well, the Philippines for one,” Lee said before reciting a list that included Thailand, Cambodia, Laos, and Malaysia.

“Okay, so we have two or three, four, whatever,” Kirby said. “There’s a lot of nations in the Asian-Pacific region.”

“There’s only ten in ASEAN,” Lee said.

ASEAN, an acronym for the Association of Southeast Asian Nations, is a regional economic organization that seeks to promote better coordination between the ten member states. All five of the countries that Lee mentioned are ASEAN members.

Kirby then said he did not deny that countries were reaching out more to China but said it was not a bad development for the United States....

Flesh wound m'lord?
Previously:

Dec. 28, 2015
UPDATED--"State Department Lists 'Bringing Peace, Security to Syria' Among Top 2015 Accomplishments"
Cool, peace in our time, I can roll with that....

...Update-
It's all in the conjugation! You have your Present participle - bringing vs your Past participle - brought.
And the whole present (continuous) progressive tense and the gerund and you can see where I jumped to conclusions can't you?

From The Hill's blog briefing room:

State Department defends naming 'bringing peace' to Syria as 2015 win

The State Department is defending naming "bringing peace" to Syria as one of its 2015 accomplishments.

The claim was made in a Dec. 24 blog post written by John Kirby, the assistant secretary of State for the bureau of public affairs.

Deputy spokesman Mark Toner on Monday called it a "truthful claim."

"Now look, the operative word there is bringing, not brought, so we're bringing peace and security to Syria," he told reporters, adding that it's a "mistaken impression" to think that Kirby is implying that the country's multi-pronged conflict has been resolved. 

Kirby, in the blog post, noted that while the Syrian conflict "has continued to unfold in tragic ways," the United States has given humanitarian aid and pushed for a political transition....MORE

On Saturday I happened to mention (Admiral) John Kirby:

The spokeswoman for the Russian Foreign Ministry, Maria Zakharova, has become a bit of a favorite among the connoisseurs of foreign ministry spokespersons.* 

Current U.S. spokesman, Admiral Kirby, is a very dim bulb in comparison.**

She can kick ass on Secretary Kerry's minion in Russian, English or Chinese....

Now if I verb the noun 'bullshit', can I demand the spokesman rotate on the pluperfect as he spins and spins?

For good fun here's the reverso conjugator.

*The Moscow Times doesn't approve of her rather blunt and undiplomatic style but gives a pretty good flavor of what's changed since she took the top spot:
Russian Foreign Ministry Gets New, Outspoken Mouthpiece

**Kirby's predecessor, Marie Harf always came across as though she was doing an SNL sketch.

Do click the Harf link and see if you don't agree.
And the reverso conjugator? It's just awesome.

"Crude, Gasoline Tumble After Biggest Inventory Build In 8 Months"

We've been waiting for the Wednesday EIA numbers before posting ever since the API numbers started not just disagreeing with EIA but some weeks actually having opposite signs. However...

This is nuts, from ZeroHedge:

Following last week's inventory draws across the entire energy complex, API was expected to report a seasonally 'normal' 1.54mm barrel build but instead printed a massive 9.3mm build - the biggest since March. Distillates saw a 6th straight week of draws but Cushing saw the biggest build in 3 months. Gasoline saw the biggest draw in 2 months (-3.5mm) but RBOB prices are sinking along with WTI.

API

• Crude +9.3mm (+1.54mm avg. exp)
• Cushing +1mm (-250k exp)
• Gasoline -3.5mm (-1mm exp)
• Distillates -3.1mm

As a reminder, crude stockpiles are still 29% above seasonal norms and perhaps today's surprise build reminded a few of the seasonal tendencies from here....MORE

Here's the crash:

WTI $46.33 down another 53 cents after the drop during the daytime session.

Tesla's Financial Q&A Begins At 5:00 pm EDT

Via the MarketWired press release:

October 31, 2016 22:13 ET

Question & Answer Webcast to Discuss Tesla's Pending Acquisition of SolarCity

PALO ALTO, CA--(Marketwired - Oct 31, 2016) - Tesla (NASDAQ: TSLA) will post additional information about the pending acquisition of SolarCity after market close on Tuesday, November 1, 2016, on the Tesla blog and IR website. Tesla and SolarCity management teams will also hold a 30-minute live question & answer webcast that day at 2:00pm Pacific Time (5:00pm Eastern Time) to discuss the additional information.

What: Question & Answer Webcast to Discuss Tesla's Pending Acquisition of SolarCity
When: Tuesday, November 1, 2016
Time: 2:00pm Pacific Time / 5:00pm Eastern Time
Blog: http://ir.tesla.com
Webcast: http://ir.tesla.com (live and replay)
Approximately two hours after the webcast, an archived version of the webcast will be available on the Company's website.

For additional information, please visit http://ir.tesla.com. 

Afterhours the stock is up 71 cents at $191.50. We'll be back to this tomorrow morning.

Commodities: The Next Big Thing Is Sand

We have experience with this stuff from the fracking/oil services angle and from the time the first sand miners came public in 2012.
Unfortunately it didn't help the timing all that much. Our last post on sand was on September 22, 2015. Note that date as you look at the chart:

Signposts: The Bull Market In Sand Is Over

Ineffable, inconsolable sadness.

 

U.S. Silica Holdings, the first publicly traded vehicle

From Bloomberg:

The Surprisingly Big Market for Sand Just Collapsed...

It gets worse than calling the bottom within a few bucks of the low ticks, albeit 3-4 months early and not coming back to the stock, more after the jump but first the headline story from/via Next Big Future:

Sand Wars - China and developing countries need tens of billions tons of sand for urbanization and economic growth

Sand is one of the world’s most highly-coveted commodities and is mined extensively as a construction material. Mixed with water, cement, and gravel, sand is used as a fine aggregate in the production of concrete. Rapid economic growth in Asia drives global demand, straining supplies of a nonrenewable resource

U.S. policy towards the Asia Pacific overlooks how sand may influence regional security dynamics. Sand, an essential component of concrete, has become a highly sought-after commodity in Asia because infrastructure development is critical to economic growth. Pressures on sand resources have grown exponentially over the past three decades, especially due to rapid urbanization in China. However, finite inland resources cannot sustain China’s demand. The scarcity of sand will spark a competition for deposits in the South China Sea (SCS)

Global consumption of concrete aggregates exceeds 40 billion tons annually, which is twice the amount of sediment transported by all rivers worldwide every year. As natural sand deposits are increasingly depleted from inland rivers and lakes, the demand for fine aggregate will exceed available supply. Population growth and urbanization in China, especially, will place increased pressures on sand resources

In 2013, China’s demand for construction-grade sand reached approximately four billion metric tons. Cement and concrete can also provide proxies for aggregate demand. For example, cement consumption in China increased by 437.5 percent in the past 20 years, whereas use in the rest of the world increased by 59.8 percent. China also used more concrete over three years (2011-2013) than the United States used throughout the entirety of the twentieth century

Global cement production may reach 5 billion tons in 2030

With constraints on both traditional inland sources and regional trade, China will seek potential substitutes for fine concrete aggregate. Both natural and artificial alternatives to river and lake sand are available, but many of these are not sufficient in structural applications (see Appendix A). For example, dune sand taken from desert sources does not bind well in concrete mix and may only compose a small percentage of aggregate. Similarly, recycled sand may only be used at a ratio of 20 to 30 percent. Dredging sand from beaches is problematic due to coastal erosion and is an illegal practice in China. Crushed stone and offshore marine sand deposits present the most viable substitutes for fine aggregate, although each of these are not without limitations

Fine concrete aggregate may be produced artificially by crushing stone to a standard size. Manmade sand is expected to gain market share as the country’s inland rivers and lakes are further depleted, although natural sand remains the most highly consumed construction aggregate in China. Manufactured sand is a promising substitute for fine concrete aggregate, but has not yet gained a strong foothold in Asia. Specifically, the use of crushed stone in concrete mix is not commonly accepted in China’s construction industry for the following reason...MUCH MORE

The link that starts this piece goes to Sand Wars: Beijing’s Hidden Ambition in the South China Sea a 22 page PDF, hosted at the College of William & Mary.

Now back to my secret shame. After the jump to the Bloomberg sand story my commentary continued:

We were on the story from the publicly traded get-go (almost), going back to April 2012's "What the Frack? U.S. Silica Up 24% since Feb. 1 IPO (SLCA)". Followed by "Commodities: "Midwest Sees a Sand Rush"". In 2013 growth was so good that a little Ouroboros turnabout was fair play, "More Natural Gas Needed For Frack Sand Suppliers"

By 2014 they were fine, strapping businesses:
"Sand: The Hot New Investment Opportunity" (SLCA)
State of Sand, 2014 
What the Frac: "The Past Year’s Hottest IPO Is… " (EMES; SLCA)

From MoneyBeat:

The hottest initial public offering from 2013 isn’t a cloud technology stock, or a biotech company with a promising cancer drug.

The company behind the top-performing IPO in the past 18 months digs sand.

Through Friday, sand-mining company Emerge Energy Services LP has rallied 462% since its debut on May 8, 2013, for the biggest share-price gain since its IPO among companies that went public last year, according to Dealogic....

Having concluded that oil and gas were just a passing fad, this is what we were posting the month Emerge came public:

The Internet of Things: Huggies App Sends You a Tweet Whenever Your Kid Pees...
The Ethics of Torturing Robots
British Psychologists Bashing British Psychiatrists

Shaman               Witch Doctor

Psychologist            Psychiatrist

I so wish I were kidding.

By January of this year we knew it was ending:

What the Frack: "Good Times Run Out for Sand Producers"

with, maybe a bit of forced jollity in March:

Basic Materials: What's New In the Sand Business? (SLCA; EMES)

But there was nothing new, it's sand.

FinViz

Great timing eh, posting stupid pictures of shamans and witch doctors when the hottest IPO of the year came out and then later calling the bottom, at...the...bottom, and just a few months before the group started a run to a triple,

Fortunately the stock we've been pitching, NVIDIA also a bit better than tripled but still, doing this stuff out in public can be a little embarrassing.

See also: Equities: "Being fluent at swearing is a sign of healthy verbal ability"--UPDATED" from the same British Psychological Society that supplied the Shaman/Witch Doctor pics.

Or maybe "Feeling Like You're an Expert Can Make You Closed-minded" also from the BPS and which we linked to a month after the Death of Equities Sand post.

Tesla, SolarCity Tumble Ahead Of New Merger Financials (TSLA; SCTY)

Attentive reader may have noticed we didn't cover Mr. Musk's press conference on the roof tile solar panels last Friday. We've been at the market long enough to recognize a master magician's "hey, look at this" misdirection. The tiles aren't going to matter to anyone for at least a year, probably two, and by then I would expect the market to have changed to the  point that they will be recognized as a niche at best.

The oohing and ahing from the assembled journos was kinda funny though; in a naïve, never had to bet real money sort of way.
TSLA $189.85 down $7.88 (-3.99%); SCTY $19.00 down 0.60 (-3.06%). Nasdaq down 1.05%.
After last Wednesday's earnings announcement the stock (very) briefly traded as high as $216.48 (16:18:30 PM).
That's down 26 bucks in four trading days. As the retail guys say "And Mr. Bigg, if you annualize that..."

From Investor's Business Daily:

Tesla Motors (TSLA) and SolarCity (SCTY) on Tuesday will release more financial information related to their planned merger ahead of Nov. 17 shareholder-approval votes.

The company will post "additional information about the pending acquisition of SolarCity" after the market close with a Q&A at 5 p.m. ET, Tesla said in a statement.

CEO Elon Musk still has to convince shareholders that a Tesla-SolarCity merger makes sense, amid criticism that Tesla is engaging in a de facto bailout for SolarCity, with the latter run by two of his cousins. Musk is the top shareholder of Tesla and SolarCity, but he says he'll abstain from the vote.

Late Friday, Musk announced a solar-tile roof that would be a joint Tesla-SolarCity offering. The photovoltaic cells would be hidden from view, but key figures — such as cost and solar efficiency — were notably absent.

Also last week, Tesla reported a surprise third-quarter profit. But the stock gain was short-lived as some analysts said one-time factors and an all-out push by Musk were unsustainable....MORE

Recently:
Tesla: "After All Is Said and Done, More Is Said Than Done" (TSLA)
JP Morgan Talks Tesla (TSLA)
Just A Reminder: "Musk Urges Tesla Workers to Cut Costs Ahead of Fundraising Round" (TSLA)
"Tesla Earnings Smash Expectations After Dramatic Change In Reporting Methodology" (TSLA)
Tesla Motors Plans to Change How it Reports its Earnings (TSLA)

That gets us to Oct. 26. For more, going back to the IPO, use the search blog box if one is so inclined. 

Rebel, Rebel: Some Thoughts On Being A Contrarian

From 25iq:

Why Investors Must Be Contrarians to Outperform The Market

1.  Bill Gurley: “Being ‘right’ doesn’t lead to superior performance if the consensus forecast is also right.”

Andy Rachleff elaborates on the point made by Gurley: “What most people don’t realize is if you’re right and consensus you don’t make money.” It is a bit strange that most people don’t realize this truth and yet it is common sense: you simply can’t be part of the crowd and at the same time beat the crowd, especially after fees and costs are imposed. Nobel Laureate William Sharpe famously provided the mathematical proof in a paper entitled “The Arithmetic of Active Management.” As restated by John Bogle the conclusion is: “In many areas of the market, there will be a loser for every winner so, on average, investors will get the return of that market less fees.” Of course, the part about the investors collectively getting the return of the market is key. Being a long term investor in the progress of the economy is a very good thing. As life runs its course, some investors get more of that financial return of the market than others.

A key point in all of this is that you can decide not to try to outperform a market and instead to match it as closely as you can a very low cost. Warren Buffett describes the motivation for this approach well: “By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals. Paradoxically, when ‘dumb’ money acknowledges its limitations, it ceases to be dumb.”

2. Jeff Bezos: “You just have to remember that contrarians are usually wrong.”

This point made by Bezos is the reason why most people follow the crowd. Michael Mauboussin explains this tendency with a simple example:

“Being a contrarian for the sake of being a contrarian is not a good idea. In other words, when the movie theater’s on fire, run out the door, right? Don’t run in the door…. Successful contrarian investing isn’t about going against the grain per se, it’s about exploiting expectations gaps. If this assertion is true, it leads to an obvious question: how do these expectations gaps arise? Or, more basically, how and why are markets inefficient?”

Mauboussin explains why some investments get mispriced so badly:

“Because if the crowd takes something to an extreme, either on the bullish side or the bearish side, that should show up in your disconnect between fundamentals and expectations. And that is what allows you to make a good investment… Again, the goal is not to be a contrarian just to be a contrarian, but rather to feel comfortable betting against the crowd when the gap between fundamentals and expectations warrants it. This independence is difficult because the widest gap often coincides with the strongest urge to be part of the group. Independence also incorporates the notion of objectivity—an ability to assess the odds without being swayed by outside factors. After all, prices not only inform investors, they also influence investors.”

This blog has repeatedly profiled great investors who have acquired skill in knowing when to be contrarian. Buffett’s famous admonition is: “be greedy when others are fearful and fearful when others are greedy.” One of the best times to invest is when uncertainty is the greatest and fear is the highest. This contrarian admonition is fully consistent with the Mr. Market metaphor. Make the market your servant and not your master. For example, Jeffrey Gundlach puts it this way: “I want fear. I want to buy things when people are afraid of it, not when they think it’s a gift being handed down to them.” There aren’t many people like Charlie Munger: “We have a history when things are really horrible of wading in when no one else will.”


Bucking the crowd’s viewpoint in practice in the real world is not easy since the investor is fighting social proof. Robert Cialdini: “social proof is most powerful for those who feel unfamiliar or unsure in a specific situation and who, consequently, must look outside of themselves for evidence of how best to behave there.” I discussed social proof in a recent blog post on Cialdini’s book Influence. In many cases, following the crowd (social proof) makes sense. Sticking with the warmth of the crowd is a natural instinct for most people. Many people would rather fail conventionally than succeed unconventionally. But doing the reverse is easier said that done for most people.

3. Andy Rachleff: “Investment can be explained with a 2×2 matrix. On one axis you can be right or wrong. And on the other axis you can be consensus or non-consensus. Now obviously if you’re wrong you don’t make money. The only way as an investor and as an entrepreneur to make outsized returns is by being right and non-consensus.”...

...MORE

"Fibonacci Flim Flam"

This is a repost from 2012:

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

From Lock Haven University:

...Footnote on dubious investment schemes.

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

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

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

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

More Fibonacci Fakery.

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

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

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

HT: Maoxian

Also at Dr. Simanek's LHUP webpage:

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

For the Next Two Years Auto Manufacturers Can't Have You Arrested...

...for trying to repair or modify the software on your own car.

From IEEE Spectrum:

It's Now (Temporarily) Legal to Hack Your Own Car

You may own your car, but you don't own the software that makes it work: that still belongs to your car's manufacturer. You're allowed to use the software, but in the past, trying to alter it in any way (including fixing it by yourself when it breaks or patching security holes) was a form of copyright infringement. iFixit, Repair.org, the Electronic Frontier Foundation (EFF), and many others think this ridiculous, and they've been lobbying the government to try to change things.

A year ago, the U.S. Copyright Office agreed that people should be able to modify the software that runs cars that they own, and as of last Friday, that ruling came into effect. It's only good for two years, though, so get hacking.

The legal and technical distinction between physical ownership and digital ownership is perhaps most familiar in the context of DVD movies. You can go to the store and buy a DVD, and when you do, you own that DVD. You don't, however, own the movie that comes on it: instead, it's more like you own limited rights to watch the movie, which is a very different thing. If the DVD is protected by Digital Rights Management (DRM) software, the Digital Millennium Copyright Act (DMCA) says that you are not allowed to circumvent that software, even if you're just trying to watch the movie on a different device, change the region restriction so that you can watch it in a different country, or do any number of other things that it really seems like you should be able to do with a piece of media that you paid twenty bucks for.

Cars work in a similar way. You own the car as a physical object, but you only have limited rights to the software that controls it, because the car's manufacturer holds the copyright on that software. This prevents you from making changes to the software, even if those changes are to fix problems or counter obsolescence, as well as preventing you from investigating the security of the software, which can have very serious and direct consequences for you as the owner and driver. It's also worth pointing out that (especially in older vehicles like the 1995 Volvo 940 Turbo belonging to a certain anonymous journalist) relatively simple computerized parts can cost a ridiculous amount of money to replace, because there is no legal alternative besides buying a new one from the manufacturer, who hasn't made them in 20 years and would much rather you just bought an entirely new car anyway.
Hrmph.

The fundamental point is this, as The Repair Association and iFixit point out in their most recent filing with the United States Copyright Office: "it should not require extensive litigation to make clear that purchasing a product gives you basic property rights to do things like repair and modify the thing you’ve bought."...MORE

Previously:
John Deere Tells Patent Office That Purchasers Don't Actually Own the Machine They Paid For (DE)
"John Deere Clarifies: It's Trying To Abuse Copyright Law To Stop You From Owning Your Own Tractor... Because It Cares About You" (DE)

One of the heroes of this stuff was Thai native and U.S. student Supap Kirtsaeng who won his case, Kirtsaeng v. John Wiley & Sons, Inc., wherein he argued he should be able to re-sell textbooks he had lawfully purchased. The Supreme Court upheld the First Sale Doctrine that "you bought it, you own it".

The Battle Between Walmart and Amazon Will Be Epic (AMZN, WMT)

From Forbes:

There is an epic battle brewing between Amazon and WalMart, and  online marketplaces will be the main street where the showdown takes place.

Amazon and Walmart are growing online marketplaces where other merchants and brands can sell goods in a single place. In a marketplace, the platform, technology management, order processing and fulfillment are all handled by the operator. Third parties get access to more shoppers and are relieved of some of the risk associated with back-end fulfillment and the operational expenses.

In the U.S., retailers are building out marketplaces as a way to expand inventory and product offerings, gain revenue from new sources through fees from third party vendors, and build loyalty as shoppers come to think of that marketplace as their primary retail destination.

There are many – Alibaba, eBay, Etsy and even Sears are marketplaces. But the biggest in the U.S. are shaping up to be Amazon and Walmart.

Why would a retailer open a store and allow a competitor that kind of access to their data or control over operations? It seems insane, or so was the consensus at a small retail conference I attended just two years ago.

Not so much now.

At a retail conference last month in Dallas, Greg Buzek, founder and president of IHL Group said something that changed my mind completely, and is likely changing the minds of those companies signing up to sell on Amazon as part of Prime.

Consumers already turn to Amazon first to look for products and reviews. Some 30% of shoppers begin their searches on Google while 49% start on Amazon, according to Buzek. The vast majority of shoppers in total begin a search on a marketplace, when you include sites such as Etsy, eBay and Shopify.

Specifically, they will search the assortment available to Amazon Prime members, making eligibility there a priority, as well.

Amazon has not reported the number of Prime members, but there are scads of independent researchers crunching numbers and putting this figure between 50 and 60 million active users.
Even at the low end of this scale, that’s impressive.

And it’s the impetus for retailers that otherwise compete with Amazon to become marketplace sellers. Because Amazon Prime members are among the most coveted consumers around.

Close to 70% of U.S. households with a household income of $112,000 or higher have an Amazon Prime account, according to Buzek and IHL.

“If I told you that 70% of the country moved to one city, wouldn’t you open a store there?” mused Buzek....MORE

The Gimmick Economy and a Wide Ranging Interview with FT Alphaville's Izabella Kaminska

I've been waiting for Ms Kaminska to do at least a little victory lap after last week's London employment tribunal ruling in the two test cases that a couple of Uber's drivers were indeed employees.

I'm aware this thing is a long way from settled, appeals have already been filed, the ruling only applies to the two plaintiff drivers, no precedent outside the UK etc. but it is a big deal (and the ruling is a cracking good read) and it ties in perfectly to the fact Izabella was one of the only journos to focus on the shaky structure of the Ube's business model.

And in contrast to the more headline-making links that yours truly found giggle-worthy, stuff like:

UPDATED--"Uber Executive Suggests Digging Up Dirt On Journalists"

Or God View which they used to stalk their customers in real time as a party trick:

UPDATED--Here's the Real Problem With Uber: You Can't Trust Them

Or the time they tried to destroy the life and business of Sarah Lacy, founder and editor-in-chief of tech website Pando:

The moment I learned just how far Uber will go to silence journalists and attack women

Or the rather blunt:

 "Uber has an asshole problem"

That's not to say we didn't link to the financial stuff, it's sort of the raison d'être of the blog and we have a few hundred posts on Uber* but Izabella was out ahead on the unsustainability of the business should any of the moving parts, from the lobbying to the fundraising, to the lawfare, to the misclassification of the drivers to the affinity marketing crap including of cars and insurance, should the wheels come off any of those the whole enterprise is at risk.

So I thought she might write something on Uber at Alphaville that we could link to and do the acknowledgement above, but last week she only posted the follow-up, "Who really benefits from the growth of self-employment?", to Joseph Cotterill's "Uber in ‘minicab company’ shocker".
And this week, nada.

Anyway, a few weeks ago we posted "Anthropic Capitalism And The New Gimmick Economy" by one of the mathematicians-slash-economists working for Peter Thiel and I thought I would look him up and see what else he did. Before I got that far though I saw Cory Doctorow at boingboing had linked to the same piece we had but under the headline "The Gimmick Economy: how central banks pretend software isn't eating the world".

And that "Gimmick Economy... Central Banks" reminded me of an interview Izabella had done with the proprietor of the Macro and Other Market Musings blog, who, as a side gig teaches economics at Texas State. I had initially decided against linking to the interview because the sound levels were crappy for the first five or so minutes but after playing it again on Saturday I thought it covered so much ground that patient reader would be rewarded for putting up with the first few minutes.

Professor Beckworth sandwiches his talk with Izabella in-between ones with the BIS' Claudio Borio the previous week and former regional Fed head Narayana Kocherlakota the next. They are in good company.

From Macro and Other Market Musings:

My latest Macro Musings podcast is with Izabella Kaminska. Izabella is part of Financial Times Alphaville, where she has been since 2008. She has written extensively on monetary policy, fiscal policy, financial technology, and is key force behind the Financial Times Festival of Finance. As a longtime follower of her work, it was a real treat to have her on the show.

We started our conversation by talking about blockchain technology and its implications for the payment system. Izabella is not optimistic about blockchain's future and wonders whether it will fulfill the expectations and hopes many observers have set out for it.

Next, we move on to the topic of universal banking. This is the idea that a central bank would open its balance sheet to anyone, including households and non-financial businesses. Doing so would solve the bank run problem and reduce the probability of a financial crisis. There are already movements in that direction with introduction of the Fed's overnight reverse repo program (RRP)  and derivative houses opening accounts with the Chicago Fed. In the limit, universal banking would mean individuals could have personal checking accounts at the Fed. While this might solve the bank run problem, it would also mean a much larger government role in financial intermedation. We discuss why this would probably end very badly.

Izabella then discusses her take on unconventional monetary policy, especially the use negative interest rates....MORE

*If interested, here's the Google search of the blog: site:climateerinvest.blogspot.com uber