Tuesday, December 12, 2017

We May Have Found An Actual "...company for carrying on an undertaking of great advantage, but nobody to know what it is”"

First though, some housekeeping on the famous line in the headline. It's probably apocryphal.

Not the sentence itself, that's in Mackay's "Extraordinary Popular Delusions and the Madness of Crowds", number 17 on the list of bubbles (companies) on page 57 of the 1852 edition (later editions have further embellishments). Rather the story itself probably isn't true.
Trust me, I encouraged smarter people than I to do their archival-researcher best looking for either an advertisement or prospectus to no avail. Zip, zilch, nada.

I made mention of this in the outro from a March 2016 post: "Dropbox May No Longer Be A Decacorn: Company Okays a Secondary Transaction At A 34% Discount To the Last Round's Valuation"
...Even the eager Uber investors going into Morgan Stanley's New Riders L.P. got a bit more than Business Insider, not that there's anything wrong with Axel Springer's newest acquisition, but still, a blind pool is a blind pool and if there was any truth to the hoary old South Sea Bubble story first promoted by Mackay in Extraordinary Delusions: "A company for carrying on an undertaking of great advantage, but nobody to know what it is." I'd trot it out right here, but alas there is no contemporaneous mention of that speculation nor any offering document ephemera so I'll have to be satisfied with a:
But this skepticism isn't unique to me. It turns out others trod the same ground before I and found no sign. Here's Jason Zweig at the Wall Street Journal in 2011:
The Extraordinary Popular Delusion of Believing What You Read
And at his personal blog:
...Readers should bear in mind that Mackay was a storyteller, and that modern researchers have been unable to confirm some of his best-known anecdotes—and have disproved others altogether.
Mackay describes what investors today would call a “blind pool,” an initial public offering, or IPO, that raises capital for undisclosed purposes:
…the most absurd and preposterous of all [stock offerings], and which [showed], more completely than any other, the utter madness of the people, was one started by an unknown adventurer, entitled, “A company for carrying on an undertaking of great advantage, but nobody to know what it is.”
Bloggers frequently cite this example when they want to declare something a bubble-in-the-making; a quick Google search turns up nearly 13,000 hits on “a company for carrying on an undertaking of great advantage.”...MUCH MORE
This has been a much longer than usual introduction to what is actually a short story. From ZeroHedge:

Not A Bubble?
Meet The Crypto Company - up almost 20,000% since inception in September..
To a market cap of over $12.6 billion...
Grant's Interest Rate Observer drew the world's attention to this 'company' yesterday...
Shares in over-the-counter name The Crypto Company, which listed in May and traded around $20 as recently as Dec 1st, have gone on a parabolic run in the last ten days - trading as high as $642.

That gives the Malibu, California-based business a market capitalization of $12.6 billion.

Valuing the Crupto Co. is somewhat difficult, as the only public filing on Edgar (the SEC website), is its securities offering document, in which it ticks the box "decline to disclose" under revenue range.

The company's website does note that it's in the business of providing "institutions and individuals direct exposure to the growth of global blockchain developments."..MORE
Ah yes, the 'ol "providing institutions and individuals direct exposure to the growth of global blockchain developments but no one to know what it is" business.

Earlier Today Internet Traffic To Apple, Facebook and Google Was Being Re-routed Through Russia

Things that make you say hmmm...
The source, BGPmon, is a network monitoring company owned by OpenDNS:
From their blog:
Early this morning (UTC) our systems detected a suspicious event where many prefixes for high profile destinations were being announced by an unused Russian Autonomous System.

Starting at 04:43 (UTC) 80 prefixes normally announced by organizations such Google, Apple, Facebook, Microsoft, Twitch, NTT Communications and Riot Games were now detected in the global BGP routing tables with an Origin AS of 39523 (DV-LINK-AS), out of Russia.

Looking at timeline we can see two event windows of about three minutes each. The first one started at 04:43 UTC and ended at around 04:46 UTC. The second event started 07:07 UTC and finished at 07:10 UTC.

Even though these events were relatively short lived, they were significant because it was picked up by a large number of peers and because of several new more specific prefixes that are not normally seen on the Internet. So let’s dig a little deeper.

One of the interesting things about this incident is the prefixes that were affected are all network prefixes for well known and high traffic internet organizations. The other odd thing is that the Origin AS 39523 (DV-LINK-AS) hasn’t been seen announcing any prefixes for many years (with one exception below), so why does it all of sudden appear and announce prefixes for networks such as Google?...MORE

"Sources and court documents shed light on Uber's massive data scraping program to monitor its competitors, spearheaded by its Marketplace Analytics team"

A major piece from Gizmodo:
For years, Uber systemically scraped data from competing ride-hailing companies all over the world, harvesting information about their technology, drivers, and executives. Uber gathered information from these firms using automated collection systems that ran constantly, amassing millions of records, and sometimes conducted physical surveillance to complement its data collection.

Uber’s scraping efforts were spearheaded by the company’s Marketplace Analytics team, while the Strategic Services Group gathered information for security purposes, Gizmodo learned from three people familiar with the operations of these teams, from court testimony, and from internal Uber documents. Until Uber’s data scraping was discontinued this September in the face of mounting litigation and multiple federal investigations, Marketplace Analytics gathered information on Uber’s overseas competitors in an attempt to advance Uber’s position in those markets. SSG’s mission was to protect employees, executives, and drivers from violence, which sometimes involved tracking protesters and other groups that were considered threatening to Uber. An Uber spokesperson declined to comment for this story.
It’s possible Uber’s data gathering did not violate any laws—much of it occurred internationally, and the data was often collected from publicly-available websites and apps—but the work of Marketplace Analytics and SSG has attracted the attention of federal investigators and the judge presiding over ongoing civil litigation against Uber for theft of trade secrets.
Marketplace Analytics and SSG’s work was dragged into the sunlight in recent weeks as part of Waymo’s lawsuit against Uber, which alleges Uber stole trade secrets from the self-driving car company for use in its own autonomous vehicles. In a pair of letters written earlier this year, Richard Jacobs, a former Uber employee, accused the company of using its competitive intelligence teams to steal trade secrets from Waymo and other companies; those letters became central in Waymo’s lawsuit after they were disclosed to Waymo in late November. 

The trial, initially scheduled to begin this month, has been postponed until February to allow Waymo to investigate the claims included in the letters—that members of the Marketplace Analytics and SSG teams used secret servers, devices that couldn’t be traced to Uber, ephemeral messaging services, and physical surveillance to extract secrets from other ride-hailing companies and keep the information hidden from the prying eyes of competitors and the courts. 

Uber’s intelligence agency
The Marketplace Analytics team traces its roots to a previous group within Uber that was known as Competitive Intelligence, or COIN. COIN also set up non-attributable servers to store information on competitors, and oversaw Hell, a program Uber used to track the location of Lyft drivers and offer them deals to switch to Uber. By scraping data from Lyft’s app, Uber was able to collect driver ID numbers and therefore track Lyft drivers’ locations. The existence of Hell, and COIN’s role in deploying it, were first reported in April by The Information....

USDA World Agricultural Supply Demand Report for Dec. 12, 2017 (WASDE)

It's a subdued bounce but a bounce it is.

Symbol Last Chg
Corn 350-6+1-6
Soybeans 982-6+0-2
Wheat 416-2+2-6

From Agrimoney:

Corn futures revive as US cuts inventory forecast, citing strong ethanol use 
Corn futures recovered, after the US made a deeper-than-expected cut to its estimate for domestic stocks, citing increased use of the grain in making ethanol.

But soybean and wheat futures fared less well, with the estimate revisions, made in the US Department of Agriculture’s much-watched Wasde crop report, bringing downgrades to expectations for US exports of both crops.

Chicago wheat futures for March, which had stood marginally higher ahead of the briefing, retreated to stand unchanged at $4.13 ½ a bushel in the aftermath, while soybean futures remained marginally in negative territory, at $9.80 a bushel.

Corn futures for March, however, rose as high as $3.52 ¾ a bushel after the briefing, a gain of 1.1% on the day.

Ethanol boom

The headway reflected a downgrade of 50m bushels to 2.44bn bushels in the USDA’s forecast for US corn inventories at the close of 2017-18.

Investors had expected a more modest downgrade, of 9m bushels.

However, the USDA raised by 50m bushels, to 5.525bn bushels, the forecast for use of corn in making bioethanol....MORE, with more to come.
Here's the complete report at the USDA WASDE page:

"Global Conflicts to Watch in 2018"

One area we keep an eye on is Democratic Republic of the Congo which (coincidentally?) Izabella Kaminska indirectly flagged earlier today by pointing out FT commodities editor Neil Hume's tweetstorm on Glencore and cobalt.
We'll be back with more on both.

From Defense One:

The U.S. is now the most unpredictable actor in the world today.
As conflicts ignite and burn and flicker out around the world, U.S. officials assess the dangers they represent back home. Not all of these conflicts directly threaten American interests, which is why the Council on Foreign Relations conducts an annual survey to help U.S. leaders prioritize threats in the year ahead. For the past decade, this survey has focused on the risks posed to America by foreign actors. Now it’s reckoning with the risks America poses to the world—and to itself.

“The U.S. is now the most unpredictable actor in the world today, and that has caused profound unease,” said Paul Stares, the director of CFR’s Center for Preventive Action, which produces the annual survey. “You used to be able to pretty much put the U.S. to one side and hold it constant, and look at the world and consider where the biggest sources of unpredictability, insecurity are. Now you have to include the U.S. in that. … No one has high confidence how we [Americans] would react in any given situation, given how people assess this president.” This president might welcome the development. “I don’t want people to know exactly what I’m doing—or thinking,” Donald Trump wrote in 2015. “It keeps them off balance.”

America’s newfound unpredictability is most evident in two scenarios that emerged as the highest-priority risks identified by this year’s report, which drew on the feedback of 436 government officials and foreign-policy experts: 1) military conflict involving the United States, North Korea, and North Korea’s neighbors, and 2) an armed confrontation between Iran and the United States or a U.S. ally over Iran’s involvement in regional conflicts and support of militant groups.

“They’re the two most volatile, brewing crises at the moment,” Stares said. “Some would say it’s a good thing that people are guessing and this is all a concerted effort to increase [America’s] bargaining leverage with North Korea or with Iran. I think most professionals would say that is not a smart strategy: It can backfire, or lead to miscalculation, misunderstanding, and so on.”
In the survey, which was conducted in the first half of November, during a temporary pause in North Korea’s nuclear and missile testing, the consensus assessment was that a conflict with North Korea would have a “high” impact on U.S. interests but was only “moderately” likely. (To say a conflict with North Korea would be high-impact is quite the understatement—most experts believe it could lead to the most ferocious fighting since World War II.) Stares noted that while last year’s poll had flagged “a severe crisis in North Korea” over its nuclear-weapons program as a first-tier risk, displacing the Syrian Civil War as the premier conflict to watch in the survey, what’s new this year are serious worries about direct military hostilities between North Korea and the United States—and implicitly about those hostilities escalating to the first exchange of nuclear weapons in history....MUCH MORE

"Hey, we've toned down the 'destroying society' shtick, Facebook insists" (FB)

Following up on yesterday's "Climateer Line of the Day: Neurotransmitters and Facebook Edition".
From The Register:

The Social Network rises to criticism from former exec

Facebook has taken the unusual step of responding to comments by former VP Chamath Palihapitiya that the social media giant was "destroying how society works".

Palihapitiya said that executives ignored cautionary instincts when creating Facebook, and he now regretted the consequences. The Sri Lanka-born investor who grew up in Canada joined Facebook in 2005 and was VP of user growth until he left in 2011.

"The short-term, dopamine-driven feedback loops that we have created are destroying how society works. No civil discourse. No cooperation. Misinformation. Mistruth. And it's not an American problem. This is not about Russian ads. This is a global problem."

He bans his children from using social media, he added. You can view his remarks here.
Facebook's first president, Sean Parker, made a similar mea culpa last month, using similar rhetoric.

Parker said Facebook grew by "exploiting a vulnerability in human psychology", the "social-validation feedback loop"...MORE

Electric Vehicles: "Inside Faraday Future’s financial house of cards"

A deep dive from The Verge:

Burn Out
When Faraday Future emerged from stealth mode in 2015, it promised to transform the car industry with an American-made luxury electric vehicle that would someday be fully autonomous, maybe even sold through a subscription service. As we learned at CES 2017, the company was taking aim at Tesla with a car — the FF91 — that was designed to dazzle, with a 0–60 time of 2.4 seconds as jaw-dropping as the proposed $180,000 price tag. 

Since then, though, Faraday Future has been more focused on survival than speed. The Verge has learned from multiple sources about the nature of the company’s financial plight. While Faraday Future posed as the newest California electric car startup that attracted top auto industry talent, 10 former employees and one person close to the company say the behavior and business practices of its chief investor have brought business to a halt. The former employees, most of whom left Faraday Future at different points within the last 15 months, requested anonymity due to nondisclosure agreements with the company. The other requested anonymity out of fear of litigation.

Their accounts support and build on previous reports, and paint a more comprehensive picture of unusual financial management by the two people most directly in charge of the company’s finances: Jia Yueting, the main investor and shareholder, and Chaoying Deng, who has held many different titles at the company, but lists herself as the company’s vice president of administration on LinkedIn.

Where the company stands financially is unclear. Four high-level former employees with knowledge of the company’s finances told The Verge as recently as early December that, barring a new cash infusion, Faraday Future only has enough funds to keep its payroll afloat through the end of the year. But Yueting, who is known as YT, is still meeting with potential investors to keep the company alive, and may have secured a new round of funding, according to one of these people. 

Either way, according to multiple sources, many remaining employees are planning their exits, or have left. Others are simply no longer showing up for work; when YT arrived at the company’s Gardena, California, headquarters on the morning of Monday, November 20th to meet a group of potential investors, he found so few employees on site that an email, which was obtained by The Verge, was sent to staff by Faraday Future’s head of go-to market strategy that reinforced the company’s work hours.

The majority of these sources say YT inflated financial promises to the company, and they believe his ambitions overmatched the company’s waning cash flow. Their accounts suggest he insisted on keeping money, intellectual property, and employees fluid between Faraday Future and the electric car effort of LeEco, a tech conglomerate he founded in China. And many sources say that he left Deng, who had little experience running the accounting of a company this large, in charge of the money. 

Reached for comment on the issues brought up in this report, a spokesperson for the company issued a singular response: “As a private company, Faraday Future will not discuss its finances, nor will we discuss the finances of our investors.”

Representatives for Faraday Future admit that YT is the main financial backer of the company, but have maintained that the company was independent from his Chinese conglomerate LeEco, which is currently mired in controversy. YT himself once said on Twitter that he is “just an investor and strategic partner of FF.”

His involvement runs deeper than that of a typical investor, according to these former employees. And his influence started at the company’s inception, when he came together with Lotus and Tesla executives Tony Nie and Nick Sampson in 2014 to help start Faraday Future, these people say. The company was incorporated in the spring as “LeTV ENV Inc.,” according to documents filed with the California secretary of state, and later that summer, the name was changed to Faraday&Future Inc.
That same year, Los Angeles County property records show, a company called Ocean View Drive, Inc. bought a six-bedroom, eight-bath mansion in the tony Los Angeles County neighborhood of Rancho Palos Verdes for $7 million. One year later, the company bought two additional homes on the same street for just over $7 million each. In documents filed with the California secretary of state in 2016, YT was listed as the CEO of Ocean View Drive, Inc. (News of Ocean View Drive, Inc. and the first mansion were first reported by Jalopnik in November.)....


"Faraday Future issues bombastic statement accusing former CFO of ‘malfeasance and dereliction of duty’"
Uh oh (see after the jump)

“Fake it till you make it”: The Dark Side of Bro Culture In Silicon Valley
"Tesla Now Faces a Billionaire-Backed Competitor Staffed by Its Former Engineers" (TSLA)
"The Future of Driving Is Now a Gold Rush" 

"Here’s How Andreessen Horowitz & Union Square Ventures Are Betting On Blockchain"

From CB Insights:
We took a closer look at these top VCs' blockchain investments, which range from private enterprise blockchains to cryptocurrency hedge funds

This year’s blockchain craze has pushed a huge amount of new money into cryptocurrencies, private blockchain projects, and companies holding initial coin offerings (ICOs). As of now, the total market capitalization of cryptocurrencies stands at more than $340B — a huge leap from where it started the year at $18B.

Two of the top early-stage tech VCs, Andreessen Horowitz and Union Square Ventures, have placed bets on blockchain technology since 2013. Below, we show how their approaches to the sector have evolved, from traditional equity investments to investments into ICOs and cryptocurrency hedge funds.
Key Takeaways
USV initially focused on bitcoin, making its first bet in early 2013 on popular cryptocurrency exchange Coinbase.

Since then, USV has expanded its strategy to bet on more novel blockchain use cases: OpenBazaar is a blockchain-based, decentralized e-commerce platform, while Filecoin is a tokenized file storage protocol. Filecoin raised upwards of $200M in its ICO held earlier this year.

Andreessen Horowitz’s early investments highlighted an interest in both bitcoin (Earn, Coinbase) and private blockchains for financial services (Axoni, Ripple).

Notably, Earn was founded by Balaji Srinivasan, a former general partner at Andreessen Horowitz, and has pivoted from bitcoin mining to building a social network where users can earn money by replying to e-mails. Andreessen Horowitz has participated in two rounds to Earn totaling $116M....MORE

"ETF Disrupters Set Sights on Insurance Industry"

I had a friend who was deconstructing and reconstructing equity indexed annuities fifteen years ago; he was like a mad scientist with his formulas and all, and waaay too happy doing what seems like a rather mundane task.
And like many mad scientists he couldn't sell* the low-fee result to any of the big marketers (looking at you Allianz)

Here's Institutional Investor:
PowerShares’ co-founders are re-entering asset management, this time with the first exchange-traded fund lineup that will mimic annuities and bank structured products.

Bruce Bond and John Southard, who co-founded Invesco’s PowerShares, are returning to the exchange-traded fund industry with the first ETFs to offer benefits found only in bank structured products and annuities.

The ETFs, which have not yet been approved by the Securities and Exchange Commission, are so-called defined outcome products, which are rules-based and have pre-determined returns on the upside and capped losses on the downside.

Structured notes offered by banks and insurance company annuities provide similar benefits, but charge hefty fees and contractually lock up investor money. Bond and Southard’s new ETFs, which will be subadvised by Milliman Financial Risk Management, will be priced at under 1 percent, a fraction of the cost for similar insurance and bank products. The ETFs will all track the Standard & Poor’s 500 stock index....MUCH MORE
*Back in 2010 we had a mad scientist anecdote in "CME Group expands dairy complex with cheese futures" which I intro'd with:
Years ago I heard of a Chicago company that made a whey-based artificial cheese.

Apparently the operation was headed by a mad scientist type who had come up with the formula but had no marketing ability.

He was producing the stuff and not selling any, converting all the investors cash into this "analog" goop and storing it in Chicago area warehouses.

Then the Chernobyl reactor blew, the price of whey skyrocketed, I've no idea what the connection was, the company went broke and the receivers opened the warehouses to find tons of this 'cheeze', semi-molten in the summer heat.

That's what I thought of when I saw this story, tons of the stuff oozing out of bonded warehouses. No connection of course, just a visual....

It's All About the Protein: "Bakers, farmers struggle to make any dough on poor wheat crop"

Ahead of today's USDA report a look at what's up with wheat.
From Reuters:
Chicago’s iconic sandwiches - Italian beef heroes dripping with gravy, and hot dogs loaded with pickles and hot peppers - wouldn’t be such culinary institutions without the bread.

But this fall, bakers faced a crisis getting the right kind of bread to delis and sandwich shops locally and across the United States.

Gonnella Baking Co - which supplies the buns to Major League Baseball’s Wrigley Field - faced an unusual problem in October when flour from this year’s U.S. wheat harvest arrived at their factories containing low levels of protein.

That meant bakers couldn’t produce bread with the airy texture customers demand, setting off two weeks of tinkering with temperatures and the mixing process, and the eventual purchase of gluten as an additive. By the time the alchemy was done, Gonnella had thrown away more than $20,000 worth of substandard bread and buns, said president Ron Lucchesi.
“That really was a headache,” Lucchesi said.

The problem spans the $23 billion U.S. bread market and highlights a paradox in the global wheat trade. Despite a worldwide grains glut, high-protein hard wheat is scarce after two years of poor U.S. harvests. The shortage hurts bakers and millers who prize high-protein wheat, along with the farmers who grow it.

Wholesale bakers such as Grupo Bimbo, Flowers Foods Inc and Campbell Soup Co’s Pepperidge Farms are feeling the squeeze on margins, said Stephen Nicholson, senior grains and oilseeds analyst with Rabobank. All three companies have seen their stock prices fall over the last two years, a period when the benchmark S&P 500 index gained more than 26 percent.

Millers such as Archer Daniels Midland Co, Ardent Mills, General Mills Inc have been able to pass on much of their higher wheat costs in sales of flour to bakers, he added. But bakers have not been able to pass those costs to grocers, who have been unwilling to pay higher prices because of increased competition and price deflation.

 Global wheat inventories have risen to record-high levels due in part to heavy production from Russia. Meanwhile, U.S. per capita consumption of wheat flour in 2016 fell to its lowest level in nearly three decades, and U.S. farmers planted their smallest winter wheat crop in more than a century....MUCH MORE
"Wheat Nerds and Scientists Join Forces to Build a Better Bread"
Along the same lines—and focusing on Jones and the Bread lab but a bit more science-y— is October 2015's "The Bread We Eat Is Junk Food: Blame the Wheat".
Worth a look for nutrition wonks.

Monday, December 11, 2017

Climateer Line of the Day: Neurotransmitters and Facebook Edition

Via The Verge:
 "The short-term, dopamine-driven feedback loops we've created are destroying how society works.  No civil discourse, no cooperation; misinformation, mistruth. And it's not an American problem — this is not about Russians ads. This is a global problem."
—Former Facebook Vice President for Addicting Users, Chamath Palihapitiya
And the rest of the story:

Former Facebook exec says social media is ripping apart society
‘No civil discourse, no cooperation; misinformation, mistruth.’
Another former Facebook executive has spoken out about the harm the social network is doing to civil society around the world. Chamath Palihapitiya, who joined Facebook in 2007 and became its vice president for user growth, said he feels “tremendous guilt” about the company he helped make. “I think we have created tools that are ripping apart the social fabric of how society works,” he told an audience at Stanford Graduate School of Business, before recommending people take a “hard break” from social media. 

Palihapitiya’s criticisms were aimed not only at Facebook, but the wider online ecosystem. “The short-term, dopamine-driven feedback loops we’ve created are destroying how society works,” he said, referring to online interactions driven by “hearts, likes, thumbs-up.” “No civil discourse, no cooperation; misinformation, mistruth. And it’s not an American problem — this is not about Russians ads. This is a global problem.”...MUCH MORE, including video
"The Neurochemistry of Smartphone Addiction"
As stated in the introduction to last month's "Early Facebook investor compares the social network to Nazi propaganda, likens its workers to Goebbels and claims it is creating a climate of 'fear and anger'":
We visited Elevation Partners' Managing Director Roger McNamee on Sunday for a TL;DR version in: "Climateer Line of the Day: Bono's Guy Talks Regulating Facebook and Google".

In that piece I noted our point of attack has been the neurochemistry of deliberately trying to addict your users. The thinking being, this is where the giants are most vulnerable and is the argument most amenable to soundbite journalism/attention - grabbing/framing. Turnabout being fair play and all that....

Electric Vehicles: China, China Uber Alles...

They actually named the thing the Weltmeister? The World Master?

From Reuters:

Chinese electric car maker to put 'Weltmeister' on road next year
WM Motor Technology Co, one of a new breed of Chinese electric car companies, will use its company name “Weltmeister” as its brand and plans to start taking orders for its first product, a sport-utility vehicle, from April.

The Shanghai-based startup plans to start producing its first car at a new plant in Wenzhou during the second quarter of next year, Freeman Shen, WM Motor’s founder and chief executive, told Reuters ahead of a media event.

The exterior design for the SUV was presented at the event in Shanghai on Monday. WM Motor also unveiled a logo for the brand that will adorn its cars....MORE
Seriously, Worldmaster? Anyone else feel like a little Horst-Wessel-Lied? Too much? We'll go with Lili Marlene.
Here's the Wehrmacht choir version::

Market Structure: "Bitcoin Futures Tumble As Spot-Arbitrage Collapses"

From ZeroHedge:
Update: The Bitcoin Futures-Spot arb spread has collapsed to around $600 in the early evening trading (led by Futures selling more than spot buying)...
From a premium of over 13% last night, Futures now trade at just 4.5% above spot as the arb-spread tumbles.
On a side note, we se that the Bitcoin Trust premium to NAV has also collapsed in recent days from over 140% to around 10%...
...Something we would expect to close:
“Arbitrage will close that gap, but it will be days and weeks,” Cboe Chief Executive Officer Ed Tilly said on Bloomberg Television Monday, less than a day after launching the product.

“If you’re doing a cash-settled future, it’s just a bet,” said Aaron Brown, a former managing director at quant hedge fund AQR Capital Management who invests in the cryptocurrency and writes for Bloomberg Prophets.

“If that’s not related to any underlying physical transaction, the only people who want to do it are gamblers.”

The wide arb spread is “a big issue. It’s an illiquidity, it has to go away.” The price gap between bitcoin and bitcoin futures won’t last forever, said Dave Weisberger, CEO of CoinRoutes, a cryptocurrency data and order routing company.

“The futures will ping-pong between premium and discount,” he said. “I suspect at some point, potentially triggered by a negative event, it will flip. Markets go up and down, and bitcoin has been no different. It’s just been fast.”...

"Rush for Ruthenium Has Metal Soaring 375 Percent in 2017: Chart"

Following up on June's "The Cobalt Trade Worked Out, On To Ruthenium":


From Bloomberg Quint:

(Bloomberg) -- Demand for hard drives and for electrochemical applications has driven little-known ruthenium to the highest price in more than seven years. Soaring to $190 an ounce, according to Johnson Matthey Plc, it’s more than quadrupled this year, outperforming all major commodities -- and it may have more to run. “This rally has legs,” Jonathan Butler, a precious metals strategist at Mitsubishi Corp. in London, said by email. “There’s good industrial buying out there.”
So, one might be asking oneself, what's next, how do I find what moves after cobalt and ruthenium?
It's easy, you can do it at home.

First gather up your tools: some darts and a periodic table:

Oops, wrong periodic table.
Here's one from Science Notes:


Throw your darts, note where they land,  invest away and survive, thrive & save civilization!

Past success in not a guide for future civilization performance
The information provided in Climateer Group webinars and accompanying material is for informational purposes only.  It should not be considered civilizational or societal advice.  You should consult with a technologist or other qualified professional to determine what may be best for your individual needs. 
Climateer Group does not make any guarantee or other promise as to any results that may be obtained from using our content. No one should make any survival decision without first consulting his or her own survival advisor and/or deity and conducting his or her own research and due diligence. 
To the maximum extent permitted by law, Climateer Group disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any deaths or other losses. 
Your mileage may vary, close cover before striking, not all civilizations thrive, good luck.

Fairness, Capuchin Monkeys and Wall Street

The speaker, Frans de Waal, is one of the heavyweights of the primate world. Actually, we all are among the heavyweights of the primate world but he's up there with Jane Goodall in the study of primates.
A quick hit via TED:

The Futures Ecosystem

From RCM Alternatives:

HT: Barry Ritholtz, The Big Picture

Crypto: The Intangibles that go into Valuation With a Look at Contango in the Market for Water from the Grotto of Massabielle in the Sanctuary of Our Lady of Lourdes, France

I believe I shall begin referring to the contango in Bitcoin futures as "The Learning Curve™".

Our headline is a sentence from a September, 2013 post "Are collectibles good long-term investments? "The Investment Performance of Emotional Assets", a rather rambling look at oddball things people pay money for (and which some, for better or worse, call asset classes).
It begins:
...On Monday we posted a short bit on collectibles, riffing off a Quartz piece:
Cars, coins and stamps are now more profitable luxuries than art, wine and jewelry (there's an ETF for that)

Which we got timestamped just before Izabella Kaminska had three FT Alphaville posts:
A classic car bubble?
The art of myth-making
The growing scarcity of scarce markets
Addressing respectively 1) the Knight Frank luxury investment index; 2) the intangibles that go into valuation with a look at contango in the market for water from the Grotto of Massabielle in the Sanctuary of Our Lady of Lourdes, France and 3) a meta-analysis of the attributes of markets in non-standardized goods.

She is such a show off.

So today we visit with Elroy Dimson, one of the few economists I've ever come across who has the market feel of a trader and the soul of a poet intellectual chops to be the Chairman of the Strategy Council for the Norwegian Government Pension Fund, you know, the big one.

In his spare time he is part of the hot new boy band Dimson, Marsh and Staunton who do the Global Investment Returns Yearbook for Credit Suisse....
Looking back I believe I was still suffering some sort of market PTSD, five years after the beginning of the grins-n-giggles phase of the 2008 unpleasantness. Or something.
Izabella's "Art of myth-making" post begins:
In this post, we consider the roles of narrative and myth in value creation.
We’ll start with the argument that a powerful enough narrative or myth can turn even abundant commodities into stores of value in their own right.
Case in point, this bottle of water from Lourdes:

This is a great example of how myth alone can turn a bottle of ordinary water — abundant in the part of France it comes from — into an object of value (and additional utility). Whether you consider the object valuable or not is dependent entirely on whether you are a believer in the underlying myth or not....MORE
That whole post is a quick primer on some of the psych features that go into the shape of the futures curve.

This short stroll down memory lane was prompted by Ms. Kaminska's most recent post, "Bitcoin contango" which links to a couple of earlier market structure posts and has at least two informed comments from the cheap seats.
Definitely worth a visit, if one is so inclined:

Ag Commodities Ahead of Tomorrow's USDA WASDE Report

From Blue Line Express at Inside Futures:

Corn, Beans, & Wheat Ahead of Tomorrows USDA Report
CORN (March)
Last Weeks Close: March corn futures finished Friday up 1 cent, trading in a range of 2 cents. Funds were estimated to have been buyers of 3,500 contracts. On the week, March corn futures finished 6 cents lower and traded in a 10-cent range for the week. Fridays commitment of traders report showed that funds hold a net short position of 160,519 contracts, this versus laws weeks -196,763; a reduction of 36,244. Keep in mind that this data is compiled through Tuesday. We saw the funds holding a record net short position of 230,556 in the middle of November, that position has decreased 70,037 or 30%.

Fundamentals: Tomorrows USDA report will likely be the highlight of the week in terms of new news coming across the wire that doesnt involve weather forecasts. The average analyst estimate for US corn carryout is at 2.478 billion bushels with estimates ranging from 2.394-2.517billion bushels. The average estimate for world ending stocks is 202.72mt with the range being 195.7-205mt. Once we get through the USDA report the attention will shift back to weather and crop development in South America.

Technicals: Corn has been range bound for the better part of the last three months which has presented some great opportunities for traders who recognized a sideways trend and werent sidetracked from the hope of a breakout. First technical resistance we will be watching this week comes in from 358-360 . On the support side of things, we are watching 348 -350. Until we get a fundamental catalyst to provide the market with a breakout or a breakdown we will continue to trade the range.

Bias: Neutral

Resistance: 358-360 ****, 369 -370 ***, 375****
Support: 348 -350**, 334-335 ***, 323-325 **

The grains are down from a quarter to three quarters percent. 

Saxo Bank's 'Outrageous Predictions' For 2018

From Saxobank: