Friday, July 21, 2017

Greylock’s Reid Hoffman and SoftBank are leading a $159 million round into a driverless-car tech startup

From recode:

Greylock’s Reid Hoffman and SoftBank’s Shu Nyatta will join Nauto’s board as part of the investment.
Greylock Partners and SoftBank are leading a $159 series B round into auto-tech startup Nauto. As part of the investment, Greylock partner and LinkedIn co-founder Reid Hoffman as well as SoftBank partner Shu Nyatta will be joining the board. 

While Nauto is currently primarily focused on making professional drivers safer with its aftermarket device that uses an inward-facing camera to detect things like distracted driving, the company has already started working with its automaker partners to begin developing the deep-learning algorithms that will enable the cars to drive autonomously. 

The company wouldn’t go into much detail about exactly what that development effort with the automakers entailed. 

However, some of the automaker partners include Nauto’s previous investors — that have also participated in this round — General Motors Ventures, BMW iVentures, Toyota AI Ventures and a few others, Nauto CEO Stefan Heck told Recode. Andy Rubin’s Playground Global also previously led a $12 million round into the company. 

In partnership with Nauto, these companies will use the driver behavior, accident, road and safety data that the devices — which have been deployed in “dozens of fleets” and some of the automakers’ development cars or car-sharing fleets — are collecting to eventually inform the autonomous system....MORE

Loot From World's Biggest Art Heist Probably In Ireland-Investigator (plus the 'catalogue' of the Hermann Göring collection)

That's "biggest" if you don't count the Nazis.
The value of the "Hermann Göring collection" alone was pegged by the NYT at $200 million in 1945.
To get to current valuations you should probably add a couple zeros.
And maybe multiply that by five. We've been meaning to post something on Fat Hermann for a while, the inventory that came out in 2015 is linked after the jump.

From CBS News:

Investigator "100 percent sure" stolen art from legendary heist is in Ireland
Twenty-seven years later, it's still a mystery.

The biggest art heist in history, thieves targeted some of the highest-value art from Boston's Isabella Stewart Gardner Museum, leaving behind empty frames, tied-up security guards and few clues.
The 13 stolen masterpieces valued at around half-a-billion dollars included a Rembrandt and a Vermeer, reports CBS News correspondent Seth Doane.

"I'm 100 percent sure that they are in Ireland. Hundred percent sure. No doubt in my mind," art investigator Arthur Brand said. He's described as the Indiana Jones of the art world.
It's an audacious claim to make after nearly three decades. But Brand alleges his leads point to the Irish Republican Army, or the IRA.

"We have had talks with… former members of the IRA – and after a few Guinnesses, after a few talks – you can see in their eyes that they know more," Brand said.
"How do we believe you?" Doane asked.

"Well, I have a track record. We have found some pieces back before. So let's give this a shot," Brand said.

Brand's highest-profile find to date came working with German police to recover bronze horse statues which stood in front of Adolf Hitler's Grand Chancellery building. He also helped recover Salvador Dali's "Adolescence."

"How is this stolen art used?" Doane asked.

"They use it as payment for drug deals, for arm deals," Brand said. "Sometimes they use it for, like, art-napping. They kidnap paintings and they use it as – to get a lesser sentence."...

HT: Marginal Revolution

Inventory of Hermann Göring art collection at Unterstein, Germany, 1945

Renoirs, Rubens', Monets, Corot, Tintorettos, van Goghs, Botticellis, a bunch of Cranachs and on and on.

Previously on the Izabella Stewart Gardner Museum theft:
June 2017
"Cracking the Biggest Art Heist in History"

At the museum "Thirteen Works: Explore the Gardner's Stolen Works"

May 2016
Risk: Stolen Gardner Museum Masterpieces Probably Destroyed
The author, James Ratcliffe, is director of recoveries & general counsel at the Art Loss Register, London  
August 2015
New Video May Show $500 Million Gardner Heist Perps
June 2011
What does Whitey Bulger know about the 1990 Gardner Museum art heist?

Possibly also of interest:
Duveen, The Greatest Salesman in the World: Isabella Stewart Gardner, Bernard Berenson and the Boston Connection Pt. IV

The courtyard of Mrs. Gardner's home, now the museum and site of the $500 million art theft

"EU’s antitrust ‘war’ on Google and Facebook uses abandoned American playbook" (GOOG; FB)

From The Conversation:

The casual observer could be forgiven for thinking that European antitrust regulators have declared war on American tech giants.
On June 27, the European Union imposed a €2.4 billion (US$2.75 billion) fine on Google for giving favorable treatment in its search engine results to its own comparison shopping service. And Germany’s antitrust enforcer is investigating Facebook for asking users to sign away control over personal information.

In contrast, American antitrust enforcers have shown little interest in these companies. The Federal Trade Commission (FTC) did open an investigation into whether Google has a search bias, but closed it in 2013, despite recognizing that it “may have had the effect of harming individual competitors.”
Anti-Americanism, however, does not explain these starkly different approaches. Europe targets homegrown companies with the same ferocity. Last summer, for example, the EU fined a cartel of European truck-makers even more than it did Google.

Instead, the divergence is explained by America’s abandonment in the 1980s of the theory that competition promotes innovation, which is still embraced by Europe today. America now seems to operate under the theory that competition threatens innovation by denying companies that develop a superior product the rewards of monopoly.

My research suggests that embrace of this new theory has led to under-enforcement of America’s antitrust laws, which may in turn have actually held back innovation.

Betting on competition
The mission of antitrust law, first articulated by the framers of the Sherman Act in 1890, is to ensure that markets contain large numbers of equally matched competitors. That’s why Europe calls its own antitrust rules “competition law.”

The Sherman Act implemented this goal by prohibiting two things: “restraint of trade,” such as price fixing, and monopolization, the attempt of a powerful company to keep competitors out of its markets. European competition laws have a similar bipartite structure.

The EU case against Google falls under the second category, monopolization, or as Europeans dub it “abuse of dominance.”

One of the most important and difficult areas of the law of monopolization involves infrastructure, which can be anything from the roads that crisscross America to the engineering standards that mobile phones use to communicate. Great innovations, such as Google’s search engine, often become the infrastructure that the next generation of competitors need to access in order to create their own, innovative products. But the infrastructure owner will often shut those competitors out, to maximize profits.

The goal of antitrust law would seem to require that its enforcers – the Department of Justice and the FTC in the U.S. – sue to force owners to share their infrastructure on reasonable terms with competitors.

Skeptics emerge
But in the 1960s, skeptics – particularly antitrust economists and lawyers associated with the University of Chicago and led by Robert Bork – started to argue that forcing a business to share its infrastructure on an equal basis with competitors reduces the rewards a company can expect to generate from innovation, potentially discouraging technological progress....MUCH MORE

You Can Tell If Someone’s Rich or Poor by Looking at Their Face

From New York Magazine's Science of Us:
Throughout the late 1960s and 1970s, the English artist David Hockney painted a series of “double portraits,” two subjects depicted side by side — of the fashion designer Ossie Clark with the textile designer Celia Birtwell; of the author Christopher Isherwood with the artist Don Bachardy; and one of his own mother and father, among others. For nearly all of them, critics especially applauded Hockney’s ability to convincingly paint faces, capturing both emotion and a sense of mysterious intimacy.

The one exception to these sympathetic, evocative depictions, however, is a painting titled “American Collectors (Fred and Marcia Weisman),” in which the Weismans’ faces are slightly blurred and blunted to appear similar to the statues behind them. It’s not an obviously negative portrayal, exactly, but to most viewers, it seems clear that Hockney perceived his subjects as flat and dull, their faces signifying their well-bred background and high social class but also their utter lack of original artistic discernment.

The ability to convincingly and subtly depict social class through one’s face alone is a rare skill — not everyone can be David Hockney — but the artist was also tapping into something more universal: Research suggests that the face alone might provide clues to someone’s social class, especially for those who know how to look.

Generally speaking, we pick up hints on a person’s socioeconomic status by looking for more obvious markers, things that are buyable or learnable —clothes, watches, comportment, manner of speech. (Just think of the line in The Great Gatsby when Jay Gatsby turns to Nick to proclaim that Daisy’s “voice is full of money.”) There are subtler, academically proven cues, too, like the fact that someone from a higher class tends to be more disengaged and aloof when dealing with someone from a lower one.

But a study recently published in the Journal of Personality and Social Psychology posits that we really don’t need any of these clues to know someone’s social class: The face alone can be our guide.
“We know that people use facial information for a lot of other things,” says lead study author Nicholas O. Rule, a psychology professor at the University of Toronto. We look at the face to make judgments on “someone’s race, someone’s sex, someone’s age, and even more subtle things like sexual orientation, political affiliation, or religion. It seemed very logical to us, actually, that people would be able to get social class information from people by looking at their faces.”...MORE
The 'cues' paper is:
Signs of Socioeconomic Status A Thin-Slicing Approach

Thursday, July 20, 2017

Risk:Today's 6.7-Magnitude Turkish Earthquake Was Not The 'Big One'

From Reuters:
Turkey quake to cause small tsunami: EMSC
A 6.7-magnitude earthquake off the southwestern coast of Turkey could cause a small tsunami in the area, European quake agency EMSC said, although Turkish officials said large waves were more likely than a tsunami.... 
From the U.S. Geological Service via the New Straits Times:

The epicenter is just offshore southwestern Turkey while  the 'big one' is expected in Istanbul's backyard.

As the Daily Sabah reminds us:
... Turkey is among one of the world's most seismically active countries as it is situated on a number of active fault lines, with the most potentially devastating one being the Northern Anatolia Fault (NAF), where the Anatolian and Eurasian plates meet.
The NAF, a strike-slip fault formed as the Anatolian plate was being pushed northwestwards by the Arabian plate, has produced devastating earthquakes throughout history, with the most recent ones being magnitude 7.4 and 7.2 earthquakes in northwestern Izmit and Düzce provinces in August and December 1999. The 1999 earthquakes killed thousands in Kocaeli, Adapazarı, Istanbul, Yalova and nearby towns in the northwest, which serve as Turkey's economic and industrial heartland....

...Scientists have warned that the epicenter of Turkey's next big earthquake is likely to occur under the Sea of Marmara, where the NAF passes.
For which see: May 20's "Risk: Massive Earthquake Could Hit Istanbul at any Moment with just SECONDS Warning, Say Scientists".

"Amazon Prime and other Subscription Businesses: How do you Value a Subscriber?"

This might be pertinent not just for Prime and others, but for Tesla, should it survive the model 3 ramp-up. More on that next week.
From 25iq, July 15:
Businesses increasingly don’t just sell products and services in a single transaction. Subscription and other businesses that focus on recurring sales have existed for a very long time. What is new is that many more businesses have adopted a subscription approach, which makes them look a lot more like a company in the the cable television business than an auto parts manufacturer.

Successfully implementing a subscription business model can be particularly hard since the customer acquisition cost (CAC) happens up front and the revenue appears over time. These subscription businesses have a revenue profile that is more like an annuity. This revenue profile is not like the manufacturer’s business that many people learned about from a college introduction to accounting class. Unlike an annuity, the revenue stream of a subscription business is subject to risk, uncertainty and ignorance. The good news is that it is precisely because there is risk, uncertainty and ignorance that an opportunity for profit exists. The bad news is that it can be hard to capture. The reality is that if you do not capture this profit your competitors may do so.

Someone may ask: Why should I worry about this? Will it be on the test? The answer is: Yes and yes. Charlie Munger says it best: “The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.” The text in bold in the Munger statement is critical with a subscription service like Amazon Prime- you can’t understand the value of the business by looking at just one month or even a few months since it is lifetime value that matters.

Why are these new subscription businesses being created more often? The economics of a subscription business can be very favorable if you get it right. A lot of financial leverage can be generated if the customer does not need to be acquired repeatedly. Customer acquisition cost is lower for a well-run subscription business even though it is more front loaded. Yes, subscription business models can have more predictable revenues, but that is not caused by the tooth fairy. More predictable revenues are a byproduct of lower overall CAC and some operational approaches and investments in customer retention. The trade-off is that a subscription business model can also be deadly if you get it wrong. Each of the key variables in a subscription business can be either: (1) many angels working together to build something wonderful, or (2) a pack of hungry wolves that can tear the business to shreds. Propelling more businesses to adopt a subscription business  model is a simple truth: if your competitors or competitors get this model right your business may be doomed.

The benefits of this new way of doing business was chronicled well in the book The Outsiders by Thorndike. One of the major innovators of this way of doing business model was John Malone in the cable television industry. Here is John Malone talking about the model he used to build many of his businesses:

“We decided… to go on a cash flow metric very much like real estate. Levered cash flow growth became the mantra out here. A number of our eastern competitors early on were still large industrial companies — Westinghouse, GE, — and they were on an earnings metric. It became obvious to us that if you were going to be measured on earnings, it would be real tough to stay in the cable industry and grow.” “I used to say in the cable industry that if your interest rate was lower than your growth rate, your present value is infinite. That’s why the cable industry created so many rich guys. It was the combination of tax-sheltered cash-flow growth that was, in effect, growing faster than the interest rate under which you could borrow money. If you do any arithmetic at all, the present value calculation tends toward infinity under that thesis.” “It’s not about earnings, it’s about wealth creation and levered cash-flow growth. Tell them you don’t care about earnings..” “The first thing you do is make sure you have enough juice to survive and you don’t have any credit issues that are going to bite you in the near term, and that you’ve thought about how you manage your way through those issues.” “I used to go to shareholder meetings and someone would ask about earnings, and I’d say, ‘I think you’re in the wrong meeting.’ That’s the wrong metric. In fact, in the cable industry, if you start generating earnings that means you’ve stopped growing and the government is now participating in what otherwise should be your growth metric.”

The more you understand about what John Malone has accomplished in his business the more you will understand what companies like Amazon are doing in their business....MUCH MORE

"Why on earth is India’s most famous yoga guru building an army of security men?"

I think the FT had the story first:

Indian guru Baba Ramdev expands into private security
Yoga-televangelist has shaken up consumer goods sector with ‘natural’ products
July 12, 2017 by: Amy Kazmin in New Delhi 
Baba Ramdev, the Indian yoga guru turned entrepreneur who has been challenging consumer goods giants Nestlé, Colgate and Unilever, is diversifying into another of his country’s fastest-growing business areas: private security services. Mr Ramdev, a popular yoga-televangelist and high-profile backer of Prime Minister Narendra Modi, has recruited former army and police officers to help train guards for his new venture, Parakram Suraksha (Valour Security) Private Ltd. The new security business will “help develop military instinct in each and every citizen of the country so as to awaken the spirit and determination for individual and national security,” the Hindu holy man said in a statement announcing the company’s formal launch....MUCH MORE 
But Quartz had the better picture (and the headline which we lifted):
India’s most famous yoga guru-turned-businessman is building an army of security guards.
On July 12, fifty-one-year-old Ramdev, whose Patanjali Ayurved has taken on India’s reigning consumer business giants, announced the launch of Parakram Suraksha (Valour Security) which will supply guards and provide security services. The company says it has recruited former Indian Army personnel and police officers to train youngsters....

... “Maybe the baba feels the need for protecting his own assets,” Kunwar Vikram Singh, chairman of Central Association of Private Security Industry (CAPSI), said. “There is a huge need for private security…particularly to protect infrastructure, women, homes, and airports. Of course, the opportunity is massive.”

Lucrative private security...

Accounting: "Egad, Pharma Bro Martin Shkreli Was an Insufferable Client"

From Going Concern:
Everyone who works in public accounting experiences a bad client or two. But then again, there are bad clients, and then there are the Martin Shkrelis of the world. It’s really a disservice to the bad clients out there to lump Martin Shkreli in with them.

This CNBC report details the testimony of Corey Massella, who was a partner at Citrin Cooperman, the firm helping Shkreli’s company, Retrophin, get ready to go public. Shkreli is currently on trial for securities charges. According to Massella, Shkreli’s business is the stuff clients from hell are made of. Highlights include:
  • Retrophin’s accounting described as “very chaotic.”
  • Shkreli repeatedly sending “changes in the stock ownership tables,” that caused an exasperated Massella to write “WTF?” in an email.
  • Shkreli getting testy over Citrin Cooperman’s questions about contractors and their requests for Retrophin’s agreements with them.
  • Numerous head-scratching debit card transactions for “iTunes, Starbucks and travel expenses.”
  • Compensation payments to Shkreli that didn’t run through payroll, including “a $575,000 transfer from Retrophin to Shkreli’s personal bank account” that was explained as “back pay and ‘bonus pay.'”
Then there’s this doozy....

Hey Kids, You Can Bring Back the Pox For a Measly Hundred Grand!

Well this doesn't sound good.

From Futurism:
Researchers Brought Back a Pox Virus Using Mail-Order DNA and it Only Cost $100,000
Reviving Extinct Viruses
Canadian researchers revived an extinct horsepox virus last year on a shoestring budget, by using mail-order DNA. That may not seem like a big deal, until you consider that this relatively inexpensive technique could be used by anyone — perhaps even to bring back something like smallpox, one of the most feared diseases in humanity’s history. The team’s research — which remains unpublished — was intended to create better vaccines and even cancer treatments.

Though David Evans of the University of Alberta, the research lead, admitted that he also undertook the project to prove that it could be done. And, that it wouldn’t necessarily require a lot of time, money, and even biomedical skill or knowledge. As he told Science, “The world just needs to accept the fact that you can do this and now we have to figure out what is the best strategy for dealing with that.” Thus reigniting a powerful debate in the biomedical science community.

The researchers bought overlapping DNA fragments from a commercial synthetic DNA company. Each fragment was about 30,000 base pairs long, and because they overlapped, the team was able to “stitch” them together to complete the genome of the 212,000-base-pair horsepox virus. When they introduced the genome into cells that were already infected with a different kind of poxvirus, the cells began to produce virus particles of the infectious horsepox variety. While horsepox doesn’t infect humans, other pox viruses do: and if the technique works to recreate one kind of pox virus, it could likely work for others as well. This technique was first demonstrated by another group of researchers in a Proceedings of the National Academy of Sciences paper in 2002.

Possible Implications
The idea that it would someday be possible to synthesize poxviruses is nothing new. In 2002, virologists assembled the poliovirus from scratch.....MORE

"Sears + Amazon=Bad News for Whirlpool, Home Depot?" (AMZN; SHLD)

"Now I am become Death, the destroyer of worlds."*

From Barron's Stocks to Watch:

Sears' announcement that it would be selling appliances on Amazon has hit competitors...hard. (AMZN) has done it again. Today, Sears Holdings (SHLD) announced that it would start selling its Kenmore appliances on Amazon, and that some of them would even be able to use Alexa.

And just like after Amazon announced that it had agreed to buyWhole Foods Market (WFM), the news is hammering every company competes with Sears in the appliance space, including Whirlpool (WHR), Home Depot (HD), and Lowe's (LOW).

The announcement, however, raises more questions than answers....MORE
*Robert Oppenheimer's thought upon the successful detonation of the first atomic bomb, using the Christopher Isherwood-Swami Prabhavananda translation of the Bhagavad Gita.

LOW   $72.94 -3.89  (-5.07%)
HD    $147.00 -6.30  (-4.11%)
WHR  $189.54-8.80  (-4.44%)

Recent use of the image:
"Amazon Is Pure Madness: It's Going to Destroy Almost Every Industry Alive and It Must Be Stopped", Bezos Denies Being Satan's Minion

More Troubles For DryShips Economou (DRYS)

Sure he's got securities attorneys chasing him on DryShips and sure he's got creditors trying to nail down the location of Ocean Rig's drillships but this could be a problem.
From the New York Post:

Billionaire’s ex-gal pal claims she was cheated out of $240M
A filmmaker who says she was “instrumental” in turning her ex into a billionaire shipping magnate claims he cheated her out of a $240 million settlement.

Angela Ismailos met George Economou in 1994. They started dating and Economou moved into her $1.8 million Park Avenue pad, according to her Manhattan ­Supreme Court suit.

At the time he “was a struggling ship owner with five old vessels co-owned by a bank,” the suit says.
Over the next two decades, Ismailos “was instrumental in Economou’s rise to becoming a billionaire shipowner,” her suit says.

They never married, but Economou signed agreements in 2012 promising Ismailos a 50 percent stake in assets, court papers state....MORE

Société Générale's Albert Edwards: Just One Aberration Prevents A "Petrifying Bear Market"

Every time I am asked why we post on Mr. Edwards "when he's been wrong so often" I debate whether to explain or just give a glib answer.
The flippant rationale would be we get to go with headlines such as:

Société Générale's Albert Edwards Descends Into A Nightmare World of Dream Demons and Market Depravity
Société Générale's Albert Edwards: "Many Think I am Mad..."  
Société Générale's Albert Edwards Sees Blue Skies, Sunshine, the Lame Shall Walk Again
Of course it's possible I have misinterpreted the meaning of:
"the US economy is on crutches, and they are about to be kicked away"
Société Générale's Albert Edwards Has Some Troubling News He Reluctantly Shares
Société Générale's Albert Edwards Not His Usual Jolly Self (II)
Société Générale's Albert Edwards: "I Have Been Wrong – I’ve Been Too Bullish"
It May Be Time To Put Société Générale's Albert Edwards On Suicide Watch
Société Générale's Albert Edwards: Cry Havoc and Let Slip the...Ah Screw it

And many, many more.
The straight-up answer is: I can't think of anyone else who nailed the deflationary bias in credit markets as well as he has for as long as he has, pretty much the last 15-20 years.
And as far as equities go, absent the extraordinary measures of the world's central banks the landscape would look very, very different.

The biggest criticism you can lay on the guy is he didn't realize what he was up against re: the powers that be.*
Plus that whole Albert-in-the-bathtub period was just stupid.

From ZeroHedge:
One month after he shared his preview of the endgame of this current centrally-planned economic regime (expect no happy ending there, as "citizens will soon turn their rage towards Central Bankers.") Albert Edwards is out with a new note asking whether "H2 2017 will undo the trend of lower inflation, bond yields and the dollar?" and - if the answer is no - he cautions that "investors might give some thought to the fact that we are now just one recession away from Japanese-style outright deflation!"

The creator of the "deflationary ice-age" concept starts off by noting that equities have risen to new all-time highs as weak US inflation data have reduced expectations of further Fed rate hikes. This has driven both bond yields and the dollar lower and in turn EM and commodity prices higher. But, Edwards warns, the trend might easily reverse as the second half of this year progresses.
"This might dampen the impact of recent compelling evidence that core CPI and wage inflation seem destined to remain curiously weak throughout the remainder of this cycle."
But as the SocGen strategist concedes, a far bigger question is how the recent equity highs sit with our Ice Age thesis – is it dead or just sleeping?"

Before he answers that question, Edwards first reminds us that with the latest inflationary print, US core CPI and wage inflation have surprised on the downside for four successive months and argues that "only two data points are sufficient for most of us to be able to draw a trend, but four data points surely provide clear evidence of the decisive re-emergence of a deflationary trend. At the very least this recent data is grounds for a dismissal of the argument that ‘end of cycle’ inflationary pressures might make a brief appearance, before the long-term deflationary secular trend reasserts itself in the next downturn."

Which brings us to the first key question posed by Edwards:
If inflationary pressures are indeed ebbing in the US economy, this begs the question that if the third-longest cycle in US history cannot produce a cyclical uplift in wages and prices, what on earth will happen in the next recession! Investors might give some thought to the fact that we are now just one recession away from Japanese-style outright deflation!
The US is not alone however in failing to spur inflation: as Gerard Minack shows in the chart below, although the number of OECD countries in absolute deflation at the core CPI level has receded, those undershooting a typical core CPI target of 2% are at an all-time high. This, Edwards says, "is quite amazing given where we are in the global economic cycle."
None of the above should come as a surprise: recall that the primary driver of global inflation in the past decade has been - without fail - China, the same China that as we showed recently has seen its credit impulse collapse, and is therefore once again no longer exporting inflation.
Assuming that Edwards is right, and that China will be stuck exporting deflation for the foreseeable future, and that the latest wave of inflation is about to be submerged, that means that Edward's patented deflationary "Ice Age" scenario is about to become the dominant topic again.

As a quick reminder,  Edwards' big Ice Age call was that the tight positive correlation between equity yields and bond yields that market participants had enjoyed since 1982, driven by ever-lower inflation, would break down....

 March 17, 2017
*Société Générale's Albert Edwards: Winter Is Coming
Yes, Albert has been forecasting the arrival of the economic ice age since at least 1996 (our links go back to 2010 and probably earlier), but the House Fed has thwarted his House Stark at every turn.
Now he's getting ready to roll but it may be too late for him.
"I fought. I lost. Now I rest. But you, Lord Snow… you'll be fighting their battles forever."
Albert addressing another standing room only investment conference crowd

Okay, that's enough Game of Thrones references for now.... 

Welcome to Short-Attention-Span Television: "Inside Jeffrey Katzenberg’s Plan to Revolutionize Entertainment on Mobile Screens"

From Variety:

Inside Jeffrey Katzenberg’s Plan to Revolutionize Entertainment on Mobile Screens
When Jeffrey Katzenberg touched down in Sun Valley, Idaho, last week, it extended a streak of appearances at the annual conference going back more than 30 years, nearly to the time Allen & Co. first launched its event in 1983.

But for Katzenberg this year wasn’t just another elite gathering for captains of industry; it represented a critical juncture in a journey he quietly embarked on last August after leaving DreamWorks Animation, the studio he sold to Comcast’s NBCUniversal for $3.8 billion.

His ambitious goal at this year’s conference: getting one of the myriad tech and telco giants he’d been talking to in the intervening months to leverage its infrastructure and reach for his latest venture. The entry fee for the interested company: $2 billion to help bring his vision to fruition. While he declines to specify which executives he spoke to in Idaho, Katzenberg was spotted meeting with a wide range of power brokers from Apple’s Tim Cook and Eddy Cue to YouTube’s Susan Wojcicki to Verizon’s Lowell McAdam, Marni Walden and Tim Armstrong.

“Is this a gigantic undertaking? The answer is yes,” says Katzenberg in an exclusive interview with Variety in which he lays out the full scope of his plans. “Is it bigger than DreamWorks? I hope so.”
Katzenberg’s plan involves nothing less than the creation of a whole new species of entertainment targeting 18- to 34-year-olds: short-form video series produced with budgets and production values you might expect from primetime TV, along with top-shelf creatives on both sides of the camera. For example, imagine a drama akin to “Empire” or “Scandal” but shrunk to 10-minute episodes made for mobile consumption. Or a five-minute talk show, or a two-minute newscast — all with high-profile talent attached....MORE

Wednesday, July 19, 2017

"'The Most Dangerous Moment': Why Every Bank Is Suddenly Talking About Q3 2018"

I'll just wheel out the introduction to June 25's "QE-Unwind may start in September" which itself refs an earlier intro. It's self-reverence self-reference all the way down:
Our intro to May 16's "Gavyn Davies: 'The consequences of shrinking the Fed’s balance sheet'":
This has the potential to be the most important econ/finance/market story of the second half of this year.... 
A no-brainer, and I'm just the person to say it....
Cosmologically regressive but it saves on the typing.

From ZeroHedge:
By now everyone is probably familiar with one of the scariest financial charts created recently by Bank of America: it shows that not only have central banks injected a record $15.1 trillion in liquidity since the crisis, but in 2017 alone - a time when the global economy is supposedly improving - they added a record $1.5 trillion, or as BofA's Michael Hartnett calculated, $3.1 trillion annualized.
Or maybe not: in a little noticed comment from Hartnett made later in June, Hartnett observed that "central banks in aggregate still printing: bought $350bn in April, $300bn in May, <$100bn in June…big 5 central banks buying less but not yet selling."

And while the ECB quietly tapered from €80 to €60BN last December (even though Mario Draghi went to great lengths to described the tapering as a non-event) and is expected to announce a formal tapering again, most likely during Jackson Hole , nowhere is this quiet slowdown in central bank purchases more evident than in the balance sheet of the BOJ, whose average purchases have declined sharply in recent months from a JPY80trillion average to a far lower level:
Indeed, it is safe to say that the topic of the liquidity injection by central banks, or rather its removal, has become one of the most discussed topics within the financial community. Case in point, in a note from last week, Credit Suisse's Andrew Garthwaite wrote that "on a year-on-year basis, the aggregate balance sheet of the big 4 central banks is set to continue expanding through 2018, although the pace of expansion will steadily slow, as shown in the second chart below. Our estimates, which include our economists' assumptions on ECB, Fed and BoJ buying and keep current FX rates constant, suggest that it is Q3 2018 when the contraction in the Fed's balance sheet on a monthly basis (which at that point will be $40bn a month) will start to exceed the purchase of assets by the ECB and BoJ."

Or, as he puts it in easily digestible format: "The inflection in central bank balance sheets comes in Q3 2018."...

Shipping: "DryShips Believes Class Action Lawsuit Is Without Merit" Says Neener-Neener, Declares 1:7 Reverse Split (DRYS)

The stock is down 0.3129 (-37.56%) at 0.5201.
Two Tuesday press releases from the company via MarketWired (a Nasdaq company, WTH) [2nd WTH today]:

July 18, 2017 09:00 ET
DryShips Inc. Believes That Recently Filed Purported Class Action Lawsuit Is Without Merit and Intends to Defend Itself Vigorously 
ATHENS, GREECE--(Marketwired - Jul 18, 2017) - DryShips Inc. (NASDAQ: DRYS) (the "Company" or "DryShips"), a diversified owner of ocean going cargo vessels, announced today that on July 14, 2017, a purported class action complaint was filed in the United States District Court for the Southern District of New York (No. 1:17-cv-05368(JFK)) by Maxime Hodges on behalf of himself and all others similarly situated against the Company and two of its executive officers. The complaint alleges that the Company and two of its executive officers violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
DryShips and its management believe that the complaint is without merit and plan to vigorously defend themselves against the allegations....MORE 
And a bit later:

July 18, 2017 16:05 ET
DryShips Inc. Announces Reverse Stock Split 
ATHENS, GREECE--(Marketwired - Jul 18, 2017) - DryShips Inc. (NASDAQ: DRYS) (the "Company" or "DryShips"), a diversified owner of ocean going cargo vessels, announced today that its Board of Directors (the "Board") has determined to effect a 1-for-7 reverse stock split of the Company's issued common shares. At the Company's annual general meeting of shareholders on May 2, 2017, the Company's shareholders approved the reverse stock split and granted the Board, or a duly constituted committee thereof, the authority to determine the exact split ratio and proceed with the reverse stock split....MORE
HT's: Markets Live for the heads up on the split; Professor Stephen William Hawking, B.A., Ph.D, Hon. Ph.D x12, CH, CBE, FRS, FRSA, in conversation with Dr. Sheldon Lee Cooper, B.S., M.S., M.A., Ph.D., Sc.D., for the neener-neener.

Shipping: More On the Scam That Is Dryships AND a Tiny Treasure From The Past (DRYS)
Shipping: There Are Scams, Mega-Scams and DryShips (DRYS)

Aetna's App Will Monitor Your Behavior In Real Time (AET)

This seems a bit creepy but since they say it's for security I guess.....WTH?
From the Wall Street Journal, July 12:

Aetna Adds Behavior-Based Security to Customer Application
App will monitor user behavior in real time; passwords optional
Insurance giant Aetna Inc. is rolling out a new security measure to its mobile and web applications that will monitor user behavior in real time.

Rather than relying solely on a password or fingerprint entered at a single point in time, Aetna apps will continuously monitor security based on user behavior and a number of contextual clues, such as location.

Customers will be able to add biometric authentication factors, such as a fingerprint or other options available on their mobile device,that use the FIDO security standard. Aetna also is introducing a feature that allows users to swipe their finger across the screen to verify their identity.
The move toward behavior-based authentication, a field that seeks to identify unique patterns in the way people perform various activities, comes as cybercriminals grow sophisticated both in tactics and the tools they use, says Jim Routh, Aetna’s chief security officer.

“The reality is the industry is getting more and more account takeover attempts,” he said. About 3.3 billion user credentials across industries were reported spilled in 2016 alone, according to Shape Security.

Security chiefs increasingly are looking for more sophisticated ways to monitor security beyond a one-time authentication measure, said Andras Cser, vice president and principal analyst for Forrester Research Inc. While a fingerprint or password can provide a snapshot, real-time behavior monitoring can allow security teams to monitor apps while users interact with the device.

In Aetna’s case, attributes such as how a person holds their phone, the device configuration or the apps used most frequently, will be fed into a risk engine. That engine uses machine learning to create an individual risk score for each user. When a user’s actions deviate significantly from their baseline normal behavior, the risk level increases, and the app may restrict access to certain functions or request another form of authentication before allowing a customer to proceed.

'Ultimately, we want to protect consumers' health information better than their credit card information,' says Aetna CSO Jim Routh.

If a customer gave their phone to a friend, for example, the app may recognize them as a different person and ask for another form of authentication. “We start to reduce your access to your functionality in the app until you convince us this is actually you,” Mr. Routh said....MORE

Incipient Turf War Between Bloomberg and the Financial Times

Not the Institutional Investor story, Pearson blew that opportunity years ago—see after the jump—but rather Alphaville's David Keohane strolling insouciantly close to Matt Levine's "People are worried about bond market liquidity" 'hood.
First the set-up. Y'all ready for this?

From FT Alphaville:

Bond crash fear ascendant
This month’s competition to see who tops the table of definitionally problematic ‘tail risks’ in Bank of America’s fund manager survey has been won by “fear of a crash in bond markets”....

As I was reading "Can Anyone Bury Bloomberg?"  what kept coming to mind was something Paul Murphy posted Dec.1, 2015, the day of the Nikkei/FT announcement, last seen in January's  "Possibly The Funniest (Profitable) Stock Recommendation of All Time".
BE is Bryce Elder, the world's greatest straight man:
(If you look back to the late 90s, the FT had all the bits to construct Bloomgerg. )
( Had a world class consumer offering in the form of the paper )
(But it also had a newswire, and an online markets business — Market Watch.)
Should we move on to other matters?
(It had data, in the form of IDC)
(Had Extel. Had what became factiva.)
(Had a huge EM news business.)
Okay …………. I think I have to do a quick bit of de-RAW here.
Coincidentally, we were chasing the same story from a slightly different angle.
The rumour that reached us was that National Grid was working on a bid of around $45 a share for ITC …
(People here complained of a lack of investment from Pearson. Investment??? They were sucking the life-blood out of the thing. )


Tuesday, July 18, 2017

Finally, In Google News:

"Google Fiber loses CEO after five months; it’s unclear why — but at his introductory meeting to the staff, he was said to have said that every man was entitled to a mistress, which prompted complaints to HR...."
From the Mercury News' SiliconBeat blog's Tech News to Know Now post.

"Bill Ackman Sold The Wrong Restaurant Shares"

The man is snakebit.
Or tarantula-drone-flying-burrito-of-love-bit.
From DealBreaker:
Last week, Bill Ackman sold off $610 million worth of shares in a fast-food chain. Today, a Chipotle in suburban Virginia closed after allegedly giving norovirus to a lucky 13 customers. Any chance the two are related? Of course not, because Bill Ackman’s luck has long since run out: The shares he sold were of booming Burger King—whose stock price only goes down when Ackman sells $610 million worth of them—and not of Chipotle, whose shares are particularly sensitive to reports of food poisoning for some reason....

This Guy's Too Smart To Be A Derivatives Analyst: Information and Wetware Edition

Via ZeroHedge, July 2:
...When information becomes a commodity, it takes very little time for it to lose its value. Unlike other (physical) commodities whose price is driven by diminishing supply, information markets are exact opposite -- their essence is captured by diminishing demand. On one side, there is nothing to slow down its supply – it costs nothing to produce it. On the other, demand for information is biologically constrained by our capacity to absorb a limited amount of it. So, sooner or later, we have to reach a state of semiotic inflation where more information buys less meaning. The rate at which we reach this point depends only on the efficiency of the media. It is safe to say that in the last decade, especially the last five years, we have witnessed an accelerated approach to the state of super- fluid information flows.

This is when the positive feedback begins. When we operate under informational overload, we tend to defend ourselves by filtering excess information. It means that we are deliberately underplaying the importance of its content and implicitly questioning credibility of its sources. This can be perceived by those who observe us (our parents, guardians, parole officers, risk managers…) as troubling. And the more we ignore their warnings, the more they will be warning us. This is an example of disappearance due to proliferation: Filtering of the information forces its proliferation which is further ignored (we can’t absorb any more) and its production further reinforced until it is completely ignored and, therefore, invisible....
-Aleksandar Kocic
Managing Director, Deutsche Bank
As quoted in "Deutsche: The Market Broke In 2012, 'This Is What Everyone Is Talking About'"

A note on the headline: as one of the original popularizers of the term, Rudy's going to be pissed at me for misusing it:

"In its original, intended meaning, wetware is the underlying generative code for an organism, as found in the genetic material, in the biochemistry of the cells, and in the architecture of the body’s tissues." -Rudy Rucker

Torture the Numbers Long Enough and They'll Say What You Want to Hear

From Dilbert:

Unethical Assumptions - Dilbert by Scott Adams

The headline is a rewording of econ Nobelist Ronald Coase's famous dictum:

"If you torture the data enough, nature will always confess." 
  •  Coase states that he said this in a talk at the University of Virginia in the early 1960s and that this saying, "in a somewhat altered form, has taken its place in the statistical literature."
    • Alternative: "If you torture the data long enough, it will confess."
      • Cited in: Gordon Tullock, "A Comment on Daniel Klein's 'A Plea to Economists Who Favor Liberty'", Eastern Economic Journal, Spring 2001.

Infographic: A Timeline of Future Technology

From Futurism:

Technology-Things-to-Come best infographics best infographic examples

36 More years at Futurism

HT: Visme's 101 Best Infographic Examples

Flipping Coins For a Million With The Donald

From The Real Deal:

Donald Trump once offered to seal a deal with a $1M coin flip
Before Ken Moelis was running one of Wall Street’s top boutique investment banking firms, Moelis and Company, he served as a banker to Donald Trump.

In the early 1990s, when the newly opened Trump Taj Mahal was floundering and in need of financing, Moelis hopped a red eye to New York to take a meeting with the real estate magnate, he recounted in an interview with Institutional Investor’s Julie Segal.

The meeting was unorthodox, according to Moelis, then an emerging star with Donaldson, Lufkin, & Jenrette (DLJ).

After stopping at 7/11 for three Big Gulps of coffee, he met with Trump, who caught him off guard by wanting to cut a deal after talking for less than an hour.
Here’s Moelis (emphasis added):
“We got in there and had a great meeting for about 45 minutes about what I thought I could do. And he said, ‘Alright, I want to hire you.’
“I’m thinking ‘Really? We’ve only been talking for about a half hour.’
“And he asked me what the fee would be. And I hadn’t come prepared for any of this. So I mentioned a number, and Donald of course came back at about half the number or a third of the number. Which, knowing Donald now as well as I do, I should’ve just doubled the number.
“But anyway, we went back and forth for 10 minutes. And I’ll never forget, we’re sitting at his conference room table, and he looks at me and he goes — we’re a million dollars apart — and he said ‘I tell you what, I’ll flip you for it.’ And he reaches into his pocket and pulls out a coin.”...

Grantham Mayo Van Otterloo on Emerging Markets

From Grantham Mayo Van Otterloo:

GMO White Paper July 2017
Revisiting the Traditional Emerging Market Equities Allocation Framework
Introduction and key points
  • As an asset class, Emerging Market (EM) equities have evolved considerably in the last 25 years, but traditional valuation metrics have remained static and should not be relied upon solely to guide allocation decisions.
  • A thorough assessment of risk grounded in analyzing macroeconomic vulnerability, currency risk, and political risk should be a key determinant for your EM allocation.
- Combining valuation with an explicit risk assessment can significantly improve EM allocation decisions. Since 2002, an allocation to EM guided simply by Shiller P/E would have delivered robust median annualized returns of 14%. However, combining risk assessment tools with this simple valuation measure would have resulted in annualized returns of about 30% with fewer drawdowns over the same period.
  • Our overall assessment of EM today is constructive: We believe risks are significantly lower and valuations are fair.
Most of our investors are familiar with (and hopefully appreciate) the multiple lenses through which GMO analyzes an asset class. Given our two-plus decades of experience in investing in EM, this paper focuses on complementing a traditional valuation-based framework with a risk-based approach that is designed to assess the attractiveness of the EM asset class. In GMO’s 1Q 2017 Quarterly Letter, Ben Inker states that the most important decision in determining long-term returns investors can earn is how much risk the investor is prepared to take . 1 While the relationship between risks and expected returns is linear, he cautions that too much risk can also spell disaster for investors. We agree with the broad set of risks 2 he identifies, and as dedicated, experienced EM investors we believe Ben’s warning is particularly relevant in the context of EM investing.

Traditional approaches to determining an optimal EM allocation have remained static 2017 marks the 37th year since Antoine van Agtmael referred to a selection of developing countries as “emerging markets,” and the 29 th year since MSCI first devised an EM equities index. To state the obvious, much has changed in these past few decades. In 1993, the MSCI EM index had an investable market value of $300 billion. Today, the Chinese internet sector alone is valued at $820 billion, and several other country-specific sectors – the Taiwanese technology sector and Indian private banking sector, to name two – surpass the value of the asset class in its infancy. However, when it comes to the consensus view on analyzing the EM asset class, the more things change, the more the industry and its insufficient analysis appear to remain mired in the past.

In our conversations over the last 20 years with asset allocators, we have noted that consensus has guided them toward a top-down approach to EM valuation. The three most common and seemingly robust metrics for valuations are:
1. Asset class valuations relative to history;
2. Absolute valuations; and
3. Asset class valuations relative to developed markets. 
Aggregate metrics are a classic example of reliance upon heuristics – easy-to-understand rules and principles that simplify complex decision-making processes. Given the evolution of the asset class, we believe each of these three metrics – once perhaps an optimal set of heuristics – now result in an inadequate assessment of fair value.

First, measuring valuations relative to history has some merit, but we must acknowledge that the composition of the asset class has changed drastically over the last 20 years. The approach relies on comparing a current valuation metric such as the Shiller P/E to a historic average and extrapolating whether the asset class is cheap or expensive on this basis. For instance, financials contribute 35% of earnings today vs. 15% in 2003, while earnings from commodities have shrunk from 44% to 15%. Unsurprisingly, regions such as Latin America and CEMEA (Central and Eastern Europe, Middle East, and Africa) have been replaced in importance by Northeast Asia, whose contribution has grown from 40% to over 57.5% of earnings....
...MUCH MORE (6 page PDF)

HT: Value Investing World

"Can Anyone Bury Bloomberg?"

From Institutional Investor, July 17:

Inside the decades-long quest to bring down a financial information giant.
In 1989, Reuters — the legendary international news agency based in London — launched an ambitious and secretive project.

Bloomberg, a relatively young New York–based company, had been eating into Reuters’ market, providing analytics and data to Wall Street’s Masters of the Universe via proprietary terminals. Dubbed Decision 2000, the project’s goal was no less than the destruction of Reuters’ competitor and its terminals.

But to beat Michael Bloomberg’s brainchild, the legacy brand first needed to rival it. Reuters tasked Capital Market Decisions, a firm led by ex-Smith Barney executive J. Stephen Levkoff, with developing an investment analytics system on par with the one luring away clients. Reuters played hardball — but it also played dirty, evidence suggests: In the late 1990s, federal prosecutors obtained more than 100 communications between Reuters officials and a consulting company that investigators believed was hired to steal information from Bloomberg, according to The New York Times. But the alleged Watergate tactics failed, as would Decision 2000.

“It was the first product to be dubbed a Bloomberg killer, and that was unfortunate,” says Douglas Taylor, a former Reuters executive who worked on the project. “It wasn'’t a bad product, but it wasn’'t a Bloomberg killer.”

In 1993 relations between Reuters and Capital Market Decisions soured. The project collapsed; lawsuits ensued; accusations of intellectual property theft were lodged.
And Bloomberg remained.

Since then a handful of other products have taken on the mantle of Bloomberg killer. So far none has succeeded. “Up to this point, any so-called Bloomberg killer has ended up as roadkill itself,” says Taylor, who now runs his own firm, Burton-Taylor International Consulting.

Yet large-scale shifts in banking and money management — including compressed margins and, correspondingly, shrinking information-service budgets — are causing a mature Bloomberg more pain than copycats ever did. Its terminal count has barely risen over the last five years, according to Burton-Taylor. And last year, for only the second time in the company’s 35-year history, the terminal total shrank. (Bloomberg doesn’t have physical terminals anymore, but rather a software package officially named Bloomberg Terminal.) At the same time, another generation of upstart competitors, including and Symphony, has emerged.

Can anyone finally bury Bloomberg?

The basic complaint about Bloomberg is its price — always, forever, infuriatingly, the price.
Whether Ray Dalio or Ray Daytrader, everyone pays the same price: $25,000 a year for one terminal and $22,600 a year per terminal for more than one. No discounts are available.

“I'’ve been a Bloomberg user for close to 25 years,” says Seth Shalov, a partner and portfolio manager at $4 billion MAI Capital Management in Cleveland. “And for 24 years, I have been frustrated with their pricing.” Bloomberg declined to comment for this story.

Banks, of course, have faced economic struggles since the financial crisis, making Bloomberg terminals an onerous expense. And many money managers are seeing less revenue amid the shift to passive investing and general pressure for lower fees, putting their budgets for information services under pressure too.

JPMorgan Chase & Co. CEO Jamie Dimon complained in a recent letter to shareholders that his bank paid $9 billion for its technology services in 2016 — a sum about twice the gross domestic product of Fiji. For many financial services firms, information technology is the biggest expense after personnel costs.

It’s no wonder, then, that Bloomberg’s terminal volume climbed only 0.7 percent annualized over the last five years, and that it shrank 0.96 percent last year, to 324,485, according to Burton-Taylor.
But a large number of financial market participants see Bloomberg as an absolute necessity, regardless of the cost. “It’s basically a way of life for many people,” says Bloomberg user David Gilmore, a partner and currency analyst at Foreign Exchange Analytics in Connecticut.
Bloomberg provides one-stop shopping for data, analytics, news, and trading. Bruce Falbaum, who invests in high-yield bonds and leveraged loans as a senior portfolio manager and principal at $1.6 billion Cohanzick Management in Pleasantville, New York, has used Bloomberg for 20 years. He’s not looking to make a change now.

“For the things it does, I don’t find anything that really compares — though, honestly, I haven’t looked,” Falbaum says. Market makers post high-yield bond prices and send traditional communications to customers like him over Bloomberg’s messaging system. “I see the entire market going on in front of me on Bloomberg. I’m not aware of any other place where I can do that.” Cohanzick has six Bloomberg terminals and would love to trim the expense. “That’s real money for a firm like ours,” Falbaum says. But a replacement would have to include the same capabilities he and his colleagues enjoy on Bloomberg.

And just as important, the other players in his market would have to adopt the new service as well, so he could continue to communicate with them. “We have relationships with about 100 broker-dealers,” Falbaum says. “I can use a scraping function to see their quotes that are contained in messages, and then I can contact them to potentially do a trade. That’s all on Bloomberg.” It would be very difficult for a competitor to gain a critical mass of users, he says.

One complaint lodged against Bloomberg by competitors such as CEO Morgan Downey is that the terminal is difficult to use — “clunky,” as Downey puts it, citing outdated software and the lack of touchscreen capability....

Possibly also of interest:
August 2014 
A Deep Dive Into Goldman's Chat Platform (GS)
August 2014 
"Can the Bloomberg Terminal be “Toppled”?"
...And now Mr. Turck (*"Partner at FirstMark Capital. Previously, Managing Director at Bloomberg Ventures and before that, co-founder of TripleHop Technologies, acquired by Oracle....")
October 2016 Hires Former Bloomberg Honcho to Take On Bloomberg Terminals With Machine-Generated News Bulletins and Stories

Ag Commodities: "Corn Leads Grains Higher as US Crops Deteriorate"

Symbol Last Chg
Corn 398-6+10-6
Soybeans 1011-0+13-4
Wheat 515-0+9-0

From Agrimoney:
The market volatility that many traders have been missing, and was mentioned most lately by Cargill as a setback to profitability prospects, remains back in the markets.
This time, it was the turn of the bulls to take control, after a previous session when bears had the best of it, helped by worries over huge hedge fund long bets spelling selling ahead, and somewhat by more benign US weather ideas.
The hedge fund selling appeared to have a reduced influence this time, at least in early deals, although there was still some evidence of investors reacting to it.
Protein premium
…as in wheat, for instance.
The woes of the US spring wheat crop - underlined by a further drop of 1 point to 34% in the proportion rated "good" or "excellent" by the US Department of Agriculture, in a weekly condition report overnight – would appear to dictate a strong premium for protein.
(Spring wheat has a higher protein level than Kansas City hard red winter wheat which in turn has a higher level than Chicago-traded soft red winter wheat.)
And indeed, Minneapolis spring wheat for September, in gaining 2.8% to $7.81 a bushel as of 09:55 UK time (03:45 Chicago time), pressed home its advantage of Chicago winter wheat, which added a more modest 1.2% to $5.12 ¼ a bushel.
The Minneapolis premium of nearly $2.70 a bushel is well below levels around $1.00 a bushel or below which reigned until three months ago, when worries over dryness in the US northern Plains perked up.
'Too long'
However, Chicago wheat in turn performed better than Kansas City wheat, which added 1.0% to $5.11 ¾ a bushel – so falling into a discount despite a higher protein profile.
This shift appeared a reflection of the fact that funds had built a record net long position in Kansas City wheat futures and options as of last week, compared with "just" a three-year high net long in Chicago.
Benson Quinn Commodities mulled whether funds were "too long in Kansas City", although it did also mull whether shorts in Chicago may be increased too....

The last couple weeks action via FinViz: