Thursday, May 25, 2017

Nine of the World's Biggest Packaged Food Companies Have Launched Venture Capital Units

Not our favorite industry.
As noted in the intro to last March's "M&A In European Food":
I'm not sure that consumer packaged goods is the area to be in, at least not in the U.S. and not based on names like Kellogg or General Mills.

For a quarter-century those manufacturers ratcheted prices as though they were tobacco companies but people find it easier to give up their Cheerios than their cigarettes.

The managements milked that approach for pretty much all it was worth so, as operating entities, they aren't all that attractive but someone will decide the only thing left to do is to asset strip or dividend recap the life out of the former cash cows....
Who know though, maybe they've bottomed, see charts after the jump.

An extensive piece from Reuters, May 24:
Food and drink megabrands are seeing their sales chewed away by smaller, nimbler, cooler rivals. They can't beat them - so now they're joining them.

Nine of the world's biggest industry players, including Danone (DANO.PA), General Mills (GIS.N), Campbell Soup (CPB.N) and Kellogg (K.N), have launched venture capital units over the past 18 months, a Reuters analysis of the sector shows. 

The aim of the strategy, according to interviews with executives, is to buy into - and learn from - the kind of start-up innovation that has become their nemesis, from micro-distilled spirits and cold-pressed juices to kale chips and vegan burgers.

Food and drink multinationals spend far less on R&D than their counterparts in many sectors like tech and healthcare. They have been wrongfooted over the past five years by the shifting habits of consumers who are increasingly shunning established brands in favor of small, independent names they regard as healthier, more authentic and original.

This is forcing the companies to take a leaf out of Silicon Valley's venture capital playbook - and their success or failure in harnessing promising new trends at a very early stage could help determine how well they adjust to the changing landscape, and whether they ultimately emerge as winners or losers.
"It's difficult for companies to have the persistence and to replicate the energy and the passion that these early-stage entrepreneurs have," said John Haugen, head of General Mills' venture capital arm 301 Inc, adding innovation was extremely tough because of how quickly market trends were changing.

"We're just a year or a little more than that into these investments," he said of 301, where his team of about 15 sits down twice a month to pass around dozens of samples from start-ups. "For me it's part of a total long-term growth strategy for our company."

In the United States - the world's biggest packaged food market - small "challenger" brands could account for 15 percent of a $464 billion sector in a decade's time compared with 5 percent now, according to Bernstein Research.

he researchers point to successful upstart brands like Chobani Greek Yogurt, which they say has stolen more than half of General Mills' market share in yogurt, and Kind Snack Bars which have taken a big bite out of Kellogg's snack bars.

The nine companies to recently launch venture capital arms also include Hain Celestial (HAIN.O), Tyson Foods (TSN.N) and Pernod Ricard (PERP.PA). Typically, their funds range in size from about $100 million to $150 million.

While it is still early days for them, the experiences of the handful of food and drink firms that have had funds for several years - Nestle (NESN.S), Unilever (ULVR.L), Coca-Cola (KO.N), PepsiCo (PEP.N) and Diageo (DGE.L) - could offer some guide to the future....MUCH MORE 
HT: Quartz, whose piece, "Giant Food Brands are Coming for Your Kale Chips and Craft Whiskeys" contains a sentence I guarantee I've never seen before:
These venture capital units are allowing moves like Kellogg’s first investment, on Kuli Kuli, which makes snack bars out of the nutrient-rich moringa plant
And on to the charts of the two companies mentioned in that March 7 post:

GIS General Mills, Inc. daily Stock Chart

K Kellogg Company daily Stock Chart

Risk: Ahead of Next Week's Official Start of Hurricane Season Forecasts Getting Bumped Up

We'll have more next week but for today here's Artemis:

2017 hurricane season forecast upped to above average by Weather Co.
The Weather Company has revised its forecast for the 2017 Atlantic tropical storm and hurricane season, saying that the latest indications and data now suggest a year with activity levels a little above average.

The Weather Company now forecasts that the 2017 season will see a slightly above average 14 named tropical storms, 7 hurricanes and 3 hurricanes that reach major status of Category 3 or higher, which should be noted by reinsurance interests.

It’s previous forecast from April had been for 12, 6 and 2, which was an average for  a year.
The forecaster says that the latest observations show warmer sea-surface temperatures in the North Atlantic, which tend to correlate with more active tropical seasons. There are indications that further warming is also possible, which could add to increased activity.

“The historically strong North Atlantic blocking event in early May also suggests the possibility of continued increases in North Atlantic sea-surface temperature anomalies, so it would be no surprise if we increased our forecast numbers again,” explained Dr. Todd Crawford, chief meteorologist with The Weather Company.

The Weather Company also says that it forecasts “a reduced potential for the development and strength of El Niño later this summer.”

El Niño can have a strong influence on hurricane and tropical weather activity levels, and the forecaster notes that there is “plenty of uncertainty regarding El Niño’s possible development, and therefore, how much of an effect it could have on the hurricane season.”

El Niño had previously been cited by forecasters as the main reason for below-average forecasts for the 2017 tropical season, but with the chances of an El Niño now seen as a little lower this is factoring into the latest updates.

As ever the reinsurance and insurance-linked securities (ILS) community are most concerned about landfalls in the United States, the source of major catastrophe loss events....MUCH MORE
Here's our last (April 20) visit to Artemis:

Insurance: "2017 hurricane forecasts suggest below average season due to El Niño" 
A number of forecasts have been released for the 2017 Atlantic Tropical Storm & Hurricane Season and so far all are calling for activity levels just below the long-term average, with the expectation that we will see a weak El Niño by the typical peak of the season suggesting a slower year....
2017 Atlantic hurricane season forecasts

And on The Weather Company:
IBM's Watson Gets A Real Job: Big Blue Closes Purchase of The Weather Company

IBM Says Their Newly Purchased The Weather Company Is An IoT Platform 
And here I was thinking* the purchase was just a fancy way to mobilize Watson as a crop-insurance salesman along the lines of Google funded The Climate Corporation
The Weather Company (Weather Channel) to Pay $600 Mln Dividend to Sponsors, Including Bain and Blackstone

And if interested:
Ha! Monsanto Buys Crop Insurer/Data Co. for $930 Mil. (MON)

Shrinking The Federal Reserve's Balance Sheet

As noted in last week'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....
And going back to the FT well, from FT Alphaville:

Snap AV: Here’s the Fed’s balance sheet shrinkage plan
From the Fed’s May meeting minutes, with our emphasis:
Under the proposed approach, the Committee would announce a set of gradually increasing caps, or limits, on the dollar amounts of Treasury and agency securities that would be allowed to run off each month, and only the amounts of securities repayments that exceeded the caps would be reinvested each month. As the caps increased, reinvestments would decline, and the monthly reductions in the Federal Reserve’s securities holdings would become larger. The caps would initially be set at low levels and then be raised every three months, over a set period of time, to their fully phased-in levels. The final values of the caps would then be maintained until the size of the balance sheet was normalized.
Let’s not forget that the New York Fed’s definition of “normalized” is still pretty big. Their baseline projection is that it’ll fall just below $3tn, with $1.5tn of that in Treasuries and slightly less in mortgage-backed securities...

So, reducing the Fed’s balance sheet at the same time they are raising interest rates.
And since this is uncharted territory we aren't quite sure how, exactly, the shrinkage will affect...stuff.
Should be interesting.

Currencies: "Euro Strength more than Dollar Weakness"

From Marc to Market:
The Dollar Index is heavy, just above the lows set earlier this week set near 96.80. However, this exaggerates the dollar's weakness because the weight of the euro and currencies that shadow it, like the Swiss franc and Swedish krona.

As the North American session is about to start, the dollar is higher against the dollar-bloc currencies and the Japanese yen. The Scandi's are flat and sterling is turning lower. That leaves the dollar weakness limited to the euro and Swiss franc.

The euro reached a high earlier this week just shy of $1.1270. It has run out of steam today near $1.1250. Between $1.1175 and $1.1200, there are nearly 1.4 bln euros in options expiring. Sterling was sold in response to the downward revision in Q1 GDP to 0.2% from 0.3%. The UK economy had expanded by 0.7% in Q4 16. Services and production were revised lower and net exports took 1.4 percentage points off GDP, a record drag. There are nearly GBP270 mln options struck at $1.2940 that roll-off today. Sterling has not closed below its 20-day moving average (~$1.2940) since April 10. We note that the technical condition for sterling may be deteriorating. The MACDs and RSI show bearish divergence.

Separately, when US President Trump began this extended trip, many thought that Israel would object to the Administration's handling of intelligence, but it turns out the British seem more concerned. The BBC reports that Prime Minister May will raise the issue at the highest levels following the British police have stopped sharing information with US officials.

Minutes from the FOMC meeting seems to confuse some. To be sure, the market continues to believe that a hike next month is as done of a deal as these things can get. Our calculations suggest fair value for the June Fed funds futures contract, assuming a hike and some softness at the end of the quarter, is about 1.04%, while the contract currently implies 1.015%.

Some are trying to explain the pullback in US bond yields as a response to the FOMC statement that more evidence that weakness in Q1 was transitory before removing more accommodation. We read this as a justification for not hiking rates this month, rather than change in forward guidance. The December Fed funds futures contract implied yield was 1.215% at the end of last week. It closed yesterday at 1.23%.

The Fed's balance sheet strategy is evolving. The minutes confirmed expectations that the Fed is thinking to begin the process of not replacing maturing issues slowly and then increasing them. It is a rolling start that was one of the common scenarios discussed by investors. However, the FOMC did not how much it may begin with, though subjectively we thought $5-$10 bln divided, even if not evenly, between Treasuries and MBS. The other important question is what size balance sheet does the Fed eventually want. Bernanke recently suggested $2.3-$2.8 trillion....
... MORE
Here's the last year of the euro from FinViz:

Wednesday, May 24, 2017

The Brain Predicts Whether You Want It To or Not

From The Verge:

Our brains predict events in fast-forward
Your brain on autocomplete
What happens when you look up and see a ball headed toward you? Without even thinking about it, you flinch. That might be because our brains are constantly living our lives in fast-forward, playing out the action in our head before it happens. 

Humans have to navigate, and respond to, an environment that is always changing. Our brain compensates for this by constantly making predictions about what’s going to happen, says Mattias Ekman, a researcher at Radboud University Nijmegen in the Netherlands. We’ve known this for a while, but these predictions are usually associative. An example: if you see a hamburger, your brain might predict that there will be fries nearby. In a study published today in the journal Nature Communications, Ekman and other scientists focused instead on how the brain predicts motion. So they used brain scans to track what happened as participants observed a moving dot. 

First, 29 volunteers looked at a white dot the size of a ping-pong ball. The dot went from left to right and then reversed directions. The volunteers watched the dot for about five minutes while scientists scanned their brains with ultra-fast fMRI. This way, the researchers know what pattern of brain activity was activated in the visual cortex while they watched the dot. 

After these five minutes, the researchers showed only the beginning of the sequence to the volunteers. Here, the scans showed that the brain “autocompletes” the full sequence — and it does it at twice the rate of the actual event. So if a dot took two seconds to go across the screen, the brain predicted the entire sequence in one second. “You’re actually already trying to predict what’s going to happen,” says Ekman. “These predictions are hypothetical, so in a way you’re trying to generate new memories that match the future.”

In fact, “twice as fast as real-time” might not be the actual number because it’s limited by the brain scans, notes Ekman. An electrode placed directly in the brain might find that the rate of compression is even faster. (It’s worth noting here that the brain scan they did use, called fMRI, can sometimes be unreliable. It measures brain activity by recording how blood oxygen levels change, not by directly measuring what’s happening. And sometimes there are false positives, like when one study showed brain activity in a dead salmon.)...MORE
I might be willing to bet on the dead salmon's brain activity over that of the Russian demolition audience:
Although, on the other hand, he has an insouciance that even the salmon (deceased) would be hard-pressed to match.

Shillong the Indian Town Obsessed With Bob Dylan

And a slightly less doomy-and-gloomy piece than the post immediately below.
From the Independent:
In the little visited state of Meghalaya lies India’s self-styled rock music capital. Charukesi Ramadurai visits Shillong, where Bob Dylan is worshipped above all others

Bob Dylan is on my mind this balmy winter afternoon in Shillong – just as I’m sure he is on a million other minds all over the world. It’s just over a month since the big news about Dylan’s controversial win of the Nobel Prize for Literature, but that’s not the reason I am thinking of the man behind “Mr Tambourine Man”.

Shillong, the capital city of the scenic northeast Indian state of Meghalaya, thrives on music. The town has earned itself the moniker of India’s rock music capital – even if cynics say the title is self-anointed – thanks to its various music festivals and local bands like Soulmate, which have now made a name for themselves across the country.

But it’s not all about rock – more than anything, Shillong loves Bob Dylan. Dylan has never visited – in fact, he’s never performed in India and is thought to have visited only once, for a wedding – but the people of Shillong don’t care. For several decades now, the city has hosted an informal celebratory concert every year on his birthday: 24 May.

What began as a small meeting of friends to celebrate an idol’s birthday has now turned into a major event in the regional music calendar. And although there are no celebs on offer, musicians and fans from all over India now trudge into Shillong for this. The annual tradition was started in 1972 by local celebrity Lou Majaw – known as the grand old musician of Shillong, and homegrown Dylan fan – some say fanatic. But there is no doubt that he is good at what he does.

This 70-going-on-17-year-old musician regularly performs Dylan’s songs at some of the most popular pubs and cafés in town. Majaw does have other music to his credit, including his own songs, but it is the Dylan impressions that have won him acclaim – and these days he mostly sticks to them. He’s so famous in Shillong that he’s even had a documentary made about him almost a decade ago....MUCH MORE
Here's the vid: 
Forever Young (Documentary - 59 mins)

"India vs. Pakistan: Which Army Would Win?"

In the last week we've seen the Financial Express on May 17 say "War threats from China, Pakistan! India to deploy Rafale fighter jets in Haryana, West Bengal: Report", and from Strategy Page:
May 23, 2017: In northwest India (northeast Pakistan) Kashmir border violence continues to spiral out of control. A local hotline was established, apparently more for publicity than peace, but on the Pakistani side of the hotline the message was the same; we are not at fault. This is mainly about the Pakistani military needing a justification for their wealth (much of it gained via corrupt practices) and power (to overthrow a government they see as a threat to themselves)....MORE
And from dozens of other sources, ditto.

The headline story, from The National Interest (U.S.) dropped out of one of the feedreaders a few days ago and reminded me we haven't seen this recent level of saber-rattling for quite a while.
The quick and dirty answer is India wins but only if China stays out.

From The National Interest:
The Indian subcontinent is home to two of the largest armies on Earth. Not only are the armies of India and Pakistan both larger in personnel than the U.S. Army, but they have stood at alert facing one another since the dissolution of the British Indian Army in 1947. The two armies have clashed four times in the past seventy years, and may yet do so again in the future.

The Indian army is the primary land force of the Indian armed forces. The army numbers 1.2 million active duty personnel and 990,000 reservists, for a total force strength of 2.1 million. The army’s primary tasks are guarding the borders with Pakistan and China and domestic security—particularly in Kashmir and the Northeast. The army is also a frequent contributor to United Nations peacekeeping missions abroad....MORE
...If the two countries went to war, a major clash between the two armies would be inevitable. Outnumbered and under-equipped, the Pakistani army believes it is in a position to launch small local offensives from the outset, before the Indian army can reach its jumping-off points, to occupy favorable terrain. Still, the disparity in forces means the Pakistanis cannot hope to launch a major, war-winning offensive and terminate a ground war on their own terms. As a result, the Pakistani army is increasingly relying on tactical nuclear weapons to aid their conventional forces.

For its part, the Indian army plans to immediately take the offensive under a doctrine called “Cold Start.” Cold Start envisions rapid mobilization followed by a major offensive into Pakistan before the country can respond with tactical nuclear weapons. Such an offensive—and Pakistan’s likely conventional defeat—could make the use of tactical nuclear weapons all the more likely....
A half-decade ago it seemed we had an India-Pakistan war threat every six months or so.
Here's October 2014: "The India-Pakistan Border Appears to Be Heating Up"
January 2013: "In Other News: 'India Warns Kashmiris to Prepare for Nuclear War'"
May 2012: "A Possible (nuclear) Water War Between Pakistan and India"
And even back to 2008: "Pakistan: We're ready for war with India . And: Pakistan, India troops exchange fire at Chakoti sector".

In most of the posts we would embed the Wagah Crossing flag lowering ceremony:

Palin at the India-Pakistan border ceremony - BBC 
And hope his bit never got tested:
Problem Solved: "Small Nuclear War Could Reverse Global Warming for Years"

Just this morning Quartz India disagreed on a war outcome but illustrated their story "For all the chest-thumping, India cannot win a war against Pakistan" with a big ol' picture of Wagah:

Hedge Funds: "Crispin Odey cites Hitler's Russia invasion to explain bearish outlook"

I believe Mr. Odey has either stopped or even reversed the fund's losses but the last couple years have been brutal for the old boy.
From City AM:

Crispin Odey has used the logic of one of Adolf Hitler's ministers to explain his bearish outlook for UK stocks.
Odey's main hedge fund lost 50 per cent last year due to failed bets on falling asset prices.

But, he has told investors won't be changing his stance, and justified his position by comparing the UK to Germany near the end of World War Two.

In particular, he wrote about Fritz Todd, Hitler's armaments minister, who predicted Germany would fail in its effort to invade Russia in 1942.

In an investor letter seen by Bloomberg News, Odey said: "What he could see was that the lines of supply were at breaking point.

"Success was the necessary ingredient of failure."

And, in the UK, Odey predicts that people are starting to borrow money they won't be able to pay back....MORE
Also at City AM: "This billionaire hedge fund manager's wealth dwindled to millions last year"

I can't help thinking of a bit o' "Holy Grail" dialogue:
Black Knight:     I am invincible! 
King Arthur:       You're a loony! 
Crispin Odey: "It Feels Lonely Being Bearish"
Crispen Odey’s Hedge Fund Announces Its Worst Ever Annual Loss

And last year:
Dec. 29
Crispin Odey Doesn't Sound Crazy But...
Dec. 9
In Which FT Alphaville's Bryce Elder Shreds Former Big Wheel Hedgefunder Crispen Odey
Nov. 3
Follow-Up: "Odey Hedge-Fund Assets Dip 60% as Clients Shun ‘Bitter Pill’"
Nov. 2  
The Stress May Be Getting To Hedgie Crispin Odey--UPDATED
Oct.4 ZeroHedge
For Crispin Odey This Is The Endgame: Hedge Fund Billionaire Goes All In Betting On "Violent Unwind" Of QE Bubble
Sept. 16 
Crispin Odey Is Getting Crushed
Aug. 13 Zerohedge
Billionaire Crispin Odey, Who's Had A Pretty Terrible Year, Is Betting Everything On Gold
May 23 
Hedge Funder Crispen Odey Has Become a Parody of.....Crispen Odey   

The Cloud Panopticon: Google, Cloud Computing and the Surveillance-Industrial-Complex

In answer to Ms Kaminska's question:
We've been sitting on this link for going on two weeks, this seems an appropriate time to post.

From CounterPunch, May 12:
In June 2007, Privacy International, a U.K.-based privacy rights watchdog, cited Google as the worst privacy offender among 23 online companies, ranking the “Don’t Be Evil” people below Microsoft, Apple, Amazon, eBay, LinkedIn, Facebook and AOL. According to the report, no other company was “coming close to achieving [Google’s] status as an endemic threat to privacy.” What most disturbed the authors was Google’s “increasing ability to deep-drill into the minutiae of a user’s life and lifestyle choices.” The result: “the most onerous privacy environment on the Internet.” Indeed, Google now controls an estimated 70 per cent of the online search engine market, but its deep-drilling of user information – where we surf, whom we e-mail, what blogs we post, what pictures we share, what maps we look at, what news we read – extends far beyond the search feature to encompass the kind of “total information awareness” that privacy activists feared at the hands of the Bush Jr. administration’s much-maligned Total Information Awareness program.

Kevin Bankston, a privacy expert and attorney at the Electronic Frontier Foundation, a nonprofit advocacy group engaged in questions of privacy, free speech, and intellectual property in the digital age, warns of the possibilities. “In all of human history,” he says, “few if any single entities, other than the National Security Agency, have ever possessed such a hoard of sensitive data about so many people.” This is the sort of thing that should make the intelligence agencies, says Bankston, “drool with anticipation.” And drooling they are. Stephen Arnold, an IT expert who formerly worked at the defense and intelligence contractor Booz Allen Hamilton Inc. and who once consulted for Google, addressed this in a speech before a conference of current and former intelligence officials in Washington, D.C., in January 2006. According to an audio recording in our possession, he reported Google was increasingly sought out by the U.S. intelligence services because click-stream data – and everything else Google archives – “is a tremendous opportunity for the intelligence community.” Google, he said, “has figured out everything there is to know about data-collection.” The relationship with the government had become intimate enough, Arnold said, that at least three officers from “an unnamed intelligence agency” had been posted at Google’s headquarters in Mountain View, Calif.

What they are doing there, Arnold did not reveal.

“We don’t comment on rumor or speculation,” said Google spokesperson Christine Chen. When asked separately how many former intelligence agency officials work at Google, she responded, “We don’t release personnel information.”

The conference, under the aegis of the Open Source Solutions Network, was hosted and organized by Robert David Steele, a former Central Intelligence Agency officer who left the agency 20 years ago and is now the founder and CEO of Open Source Solutions Network Inc., otherwise known as OSS.Net, an educational corporation that has worked with more than 50 governments to “advance the use of open source intelligence.” Steele considered Arnold’s item to be a bombshell. U.S. intel was now seated in the heart of the “Googleplex,” learning all it could from the masters in the private sector. Among Google’s critics, Steele who, since leaving the CIA, has spent 20 years promoting the digital commons, is about as fierce as they come. “Google would have been an absolutely precious gift to humanity,” he says. “But Google is positioning itself to take over the digital commons. I personally have resolved that unless Google comes clean with the public, the company is now evil.” The question today is whether Google, in fact, will be forced to change its ways – and whether Congress and the intelligence agencies want it to.

Google’s powers of data-collection depend on consumer choice – how much of your computing you put in Google’s hands. The more you choose Google applications, the more Google can know about you. At the extreme end of the spectrum, your every move can be tracked by some feature of Google. When you use the Google search box, as tens of millions of people do daily (with Google handling roughly 11,000 searches per second), the company can track all your search queries and the websites you visit as a result of those queries. If you use Google toolbar, the company can watch the amount of time you surf a website – the three minutes or three hours you spend on every page of that website. With Google’s acquisition of YouTube in 2006, viewing habits can be tracked. Google’s FriendConnect and Orkut archive your social networks. Google News, Books, Feedburner or Blogger log your reading habits. The writing you produce is stored on Google Docs, and your purchase habits and credit card numbers are captured by Google Checkout. Also gathered are voiceprint and call habits, through Google Voice; travel interests, patterns and place associations, through Google Maps, Google Earth and Google StreetView; medical conditions, medical history and prescription drug use, through Google Health; photos of friends and family, through Google’s Picassa images; and general activities, through Google Calendar. Then, there’s Google Desktop, which, at one point, offered what appeared to be an innocuous feature called “Search Across Computers.” This allowed Google to scan your computer to archive copies of text documents. In other words, just about everything on your PC – love letters, tax returns, business records, bad poetry – was duplicated on a remote Google server. (This function was discontinued on all platforms in January of this year.)

Taken alone, the Google search box is an exquisitely intimate repository of user information. “People treat the search box like their most trusted advisors,” says Kevin Bankston, the Electronic Frontier Foundation (EFF) attorney. “They tell the Google search box what they wouldn’t tell their own mother, spouse, shrink or priest.” Think about your most recent queries, say, about your “anal warts” or “inability to love in marriage,” or “self-hatred,” or your interest in the mechanics of “making a pipe bomb.” The search box is as good a place as any to understand how the Googleplex keeps tabs on its users. When you do a search, “cookies” installed on your computer record your IP address (a series of unique numbers that may be used to identify your computer), so Google can, in many contexts, identify a user. And it can do so with any of its applications.

All this, one would think, ceases once your PC is shut down and you leave home. However, Google released a “geo-location” application in 2008, Gears Geolocation API, that can “obtain the user’s current position,” “watch the user’s position as it changes over time,” and “quickly and cheaply obtain the user’s last known position.” According to a Google tech blog, the Gears application “can determine your location using nearby cell-towers or GPS for your mobile device or your computer’s IP address for your laptop.” A 2006 Technology Review article reports that Google’s director of research, Peter Norvig, even proposed the use of built-in microphones on PCs to identify television shows playing in the room, in order to display related advertising. Such data, it seems, could be processed as an audio fingerprint, which might aid in geolocation and profiling of users. (“Google had no plans to develop this,” Google spokesperson Christine Chen responded by e-mail. “And we haven’t.”)

Google’s data-mining interests go even deeper, to the core of our physical and mental being. Google co-founder Sergey Brin and his biotech specialist wife, Anne Wojcicki, according to The Economist, have “brainstormed” with at least one prominent human genome researcher and approach genetics as a “database and computing problem.” This would tie in nicely with Google Health, launched in 2008 to take advantage of the growing trend of storing health records online, for easier access among diverse health care providers. Google has invested $3.9 million in Wojcicki’s biotech firm, 23andMe, whose “mission is to be the world’s trusted source of personal genetic information,” and which offers a basket of genetic tests to allow its customers to uncover ancestry, disease risks, and drug responses. Speaking before a Google “Zeitgeist” conference in 2008, Brin revealed that he carried a Parkinson’s gene and then advocated the recording of individual genetic codes to enhance health maintenance and medical research. Taken to its logical conclusion, this suggests the prospect of your body’s blueprint registered with an eventual “Google Genome,” perhaps with the help of the databases gathered at 23andMe. To drill further into the mind, Google has teamed up with marketing giant WPP to fund $4.6 million for research into online advertising, including one grant in the emerging field of “neuromarketing”: tracking everything from online navigation behavior to biofeedback metrics like heart rate, eye movement and brain wave activity in response to advertising stimuli. Google’s Chen points out that the results of this research will be available to industry as a whole and that “Google has no special right over, nor plans to use, any of the research funded by these grants.”...

"Whole Foods Would Look a Lot Different If It Were Science-Based" (WFM)

After flatlining around $30 since late 2015 the stock seems to have been anticipating something the last six weeks:
From New York Magazine's Science of Us:
Whole Foods used to be my idea of grocery heaven. Once upon a time, I shopped at the California Street location in San Francisco — it was light and airy with produce for miles. I knew the cheesemonger. I had philosophical conversations with the butcher. I stared longingly at the Le Creuset bakeware. The soap aisle smelled like lavender. Heaven.

But eventually, I fell out of love. Or, to be more specific, I changed my mind about organic food after reading the research: It turns out organic isn’t more nutritious or even necessarily better for the planet. So I pretty much stopped shopping at Whole Foods altogether.

I’m not the only one. Whole Foods may have once revolutionized the organic-food industry, but it’s no longer the only game in town. These days, many consumers are now buying their organic groceries at less expensive stores, including Costco and Walmart. Whole Foods’ sales are on the decline, driving many observers and even their own investors to suggest that in order to survive, the chain has to make a drastic change.

Well. I have a suggestion as to what that change might be. It’s pretty drastic, but, hear me out, Whole Foods. This could be good for both of us. Here it is: Why not revolutionize grocery shopping all over again? Only this time, the revolution should be powered by science and agronomy, and not misleading marketing.

Here’s my first problem. Labels like “organic” and “conventional” are too broad, and too black and white, to really be all that helpful. A more specific, more informative approach could fix this: If Whole Foods listed all of the pesticides used on every fruit and vegetable, whether natural or synthetic, consumers might begin to understand that both conventional and organic produce are grown with pesticides, and what matters more is the toxicity of the pesticide used. Copper sulfate, for example, a pesticide allowed in organic produce in the U.S., is more toxic than some conventional pesticides.
Chlorpyrifos, an insecticide used in conventional agriculture, is more toxic than glyphosate, the active ingredient in the herbicide Roundup. It’s worth noting that Whole Foods took a step in this direction once before with its Responsibly Grown program, which recognized that conventional produce can be more sustainable than organic, but organic farmers loudly objected and the company eventually undercut those standards. It’s time to bring them back.

This new science-based labeling system should also make it crystal clear that trace pesticide residues aren’t dangerous for consumers — as long as the residues measure below the tolerance levels set by the U.S. Environmental Protection Agency (and they do, year after year), then they aren’t a cause for concern. If there is a concern about a pesticide’s toxicity, it’s the health risk to farm workers and their families, and that’s something to consider before buying those perfect-looking strawberries.
We’ll also want to know the pesticide’s environmental impact, like how it affects the bees or the surrounding water supply. Many people believe pesticides alone are killing off the country’s bee population, but if you dig a little deeper, you discover that pesticides aren’t actually the biggest culprit. Iida Ruishalme, a biologist who writes the blog Thoughtscapism, has published several in-depth posts examining the different hazards to bee health. She says even though “neonicotinoid [pesticides] steal most of the thunder,” there are graver threats to be concerned with: “The Varroa mite, disease, habitat loss, and invasive species (such as the European honey bee itself) play a far greater role.”

But pesticides are only one piece of the broader sustainability puzzle. Consumers should also be able to know whether the farmer who grew their produce uses practices like cover-cropping and conservation tillage, two things that improve soil health and mitigate the impact of climate change by increasing the sequestration of carbon in the soil. Both organic and conventional farmers can and do incorporate these methods....MUCH MORE
It won't happen of course. Here's Bloomberg on one of the reasons why: 

The Future of Whole Foods Isn’t About Groceries
  • CEO Mackey tries to boost profits without losing brand cachet
  • Wall Street grows restless after almost two-year sales slump
Inside the Whole Foods Market in midtown Manhattan at lunchtime, it’s easy to forget that the organic supermarket chain is suffering its biggest crisis since going public in 1992.

A line 20-people deep waits at a juice and espresso bar near the bustling store entrance across from Bryant Park. In the food hall upstairs, the tables are packed with customers noshing on superfood salads and sushi. Too harried to stop for oysters, many shoppers order Nashville-style fried chicken sandwiches from digital kiosks and sample cold brew from Stumptown Coffee Roasters.

Whole Foods Market Inc., facing pressure from restless shareholders after nearly two years of sliding sales, still has cachet in New York and other pockets of the U.S. That unique foodie appeal is key to a turnaround if Chief Executive Officer John Mackey is able to improve operations, said Charles Kantor, a managing director at Neuberger Berman, one of the grocery chain’s 10 biggest investors. 
“He got all the hard things right over the years, but he didn’t get the easy stuff right,” Kantor said. “There hasn’t been laserlike focus in a long time.”

As grocers fight for traffic amid an intense price war and the threat of e-commerce, Whole Foods stands out among its peers with its prepared foods and in-house restaurants that make its stores destinations. The challenge for Mackey, who co-founded the company in 1980, is how to assuage Wall Street by boosting profits without ruining what made Whole Foods wildly popular in the first place.

“They have to do two things at the same time that are diametrically opposed,” said Roger Davidson, a former Wal-Mart grocery executive who works as a consultant. “They have to make sure they don’t dumb it down.”

Brand Loyalty
The hubbub at newer Whole Foods locations like the one in midtown Manhattan illustrates a brand loyalty that most retailers would envy, especially when brick-and-mortar stores are closing at a record pace. Neuberger Berman increased its stake in the company in 2015 because of its rare ability to “connect in an emotional way” with shoppers, said Kantor. The firm owns about 2.7 percent of Whole Foods shares, according to data compiled by Bloomberg....MUCH MORE

Agriculture: Agrimoney LIVE Conference--Diary

This is Monday's blog, Tuesday after the jump. Pics here.

Agrimoney LIVE as it happens - day one conference diary
8.45am The conference has not kicked off proper, and already Agrimoney LIVE has a (minor) scoop – that one of the major speakers used to be a motorbiking fiend, and indeed rode a Honda around the UK in 1981, reaching Land's End.
He (it is a he, and not a UK national) still has a moped.
Which speaker? Guesses (and other comments) to 
11.06am India, Africa trump China
Is China really such a big, and positive, theme for commodities and agriculture?
Many observers seem to think so. But Erik Norland, senior economist at CME Group, takes a more jaundiced view.
"A further slowdown in the Chinese economist will likely negatively impact commodity prices, including iron ore, of which China consumers two thirds of the world supply," he says.
"This in turn could put downward pressure on the economics of commodity-producing nations like Australia."
In ags, the zeitgeist is "no longer going to be about China.
"India looks very interesting. And Africa is going to huge population growth."
11: 37am 'Scary sugar short'
Agricultural commodities are a boon for momentum traders, says Fiona Boal, director, commodities at Fulcrum Asset Management.
This is because of the lag between markets signalling a supply imbalance, and producers' being able to respond by raising or lowering output.
"It needs time for higher prices to work back to production," or for lower prices to turn the supply taps down, Ms Boal says.
"This makes agricultural markets are particularly well suited to momentum strategies."
The "scary" shorting for instance, in sugar, prices of which have tumbled on expectations of a potential return to a production surplus ahead, has produced "positive" results, she says.
12:18 Weather outlook
Lots of interesting snippets from Kyle Tapley, of MDA Weather Services.
On El Nino, it looks like if one does develop this year, it will be a weak one, and will "probably come too late to have a big impact on northern hemisphere growing conditions", he says.
That is not necessarily a positive for northern hemisphere farmers, given that El Nino gives a 4.2% boost to US corn yields, compared with trend, and a 3.3% lift to soybean yields, on MDA estimates. (It is La Nina which is the danger to the Corn Belt.)
Indeed, the US looks set this summer for "widespread above-normal temperatures that could lead to heat stress", with dryness looking an issue for the southern Plains and southern Midwest.
…but not that much of an issue. MDA sees the US corn yield coming in at a very respectable 170.8 bushels per acres this year, and the soybean yield at 49.0 bushels per acre.
Where Mr Tapley sees a bigger threat is to the Black Sea, where dry conditions in the summer may "stress corn and sunflowers", but likely come too late to affect wheat potential.
In Europe too, "dry weather this summer in Spain, Romania, and Bulgaria may stress corn and sunflowers", with – importantly – France, the bloc's most important corn grower, being mentioned in dispatches too.
13.55 'Fake' beef strides ahead
Synthetic proteins are a bigger threat to the meat industry than the growing popularity of vegan diets.
According to Marc Sadler from the World Bank, the main issue with synthetic proteins has been their texture.
"This has always been the issue with meat substitutes, as 60-70% of the experience of eating is to do with texture.
"Some companies are breaking through - in their blind tastings it has been impossible to tell the difference between real and synthetic meat."
14.30 'Spend more on tech'
More money needs to be spend on developing artificial intelligence in agriculture, said Arnaud Petit, director commodities and trade at farmer co-operative body Copa-Cogeca.
Speaking at a session at Agrimoney LIVE he said farmers already had technology which could tell them how much fertiliser to apply or where to apply pesticides, but that they needed something which connected all of these and provided interlinked advice.
He also talked of big losses in winter grains in northern Europe (Scandinavia) – maybe 20%. Copa Cogeca will produce quarterly estimates in a few weeks' time....MORE
Agrimoney LIVE as it happens - day two conference diary

09:00 What to make of Glencore approach to Bunge?
For some reason, big news in ag always breaks when Agrimoney is having a conference.
This time, it is Glencore's revelation that its part-owned ag division has made an "informal approach" to trading giant Bunge. (What made it informal? Were the Glencore suitors not wearing ties?)
To one senior delegate at Agrimoney LIVE, this looks like the latest episode in the consolidation wave that started in seeds and chemicals, with the rash of tie-ups with DuPont-Dow, ChemChina-Syngenta, Bayer-Monsanto and BASF, um…
And could it be a sign that the ag sector is on the up again?
"It looks a sign that sector valuations are attractive, if there is all this consolidation going on," the delegate says, flagging the dent to profits in sector from the decline in crop prices.
There is more on sector M&A scheduled in the Agrimoney LIVE programme. Stay tuned....

The Wild West of Deep-Sea Mining

From Hakai Magazine:
The International Seabed Authority is racing to draft regulations for the nascent deep-sea mining industry.

In the coming years, a new gold rush will begin. Deep beneath the ocean’s waves, from scalding hydrothermal vents to the frigid stretches of the abyssal plain, ocean processes have deposited vast quantities of valuable minerals on the seafloor. Now, the convergence of technological development and political will has placed this ore within reach. But like the gold rushes of old, the deep-sea-mining industry is emerging on the frontiers of society, far from legislatures and law enforcement.

Officially, the nascent deep-sea-mining industry is governed by the International Seabed Authority (ISA), an intergovernmental organization established in 1996 by the United Nations Convention on the Law of the Sea (UNCLOS)*. The authority’s critical task is to coordinate its 168 member nations in establishing and enforcing regulations for the developing deep-sea-mining industry.

But the ISA’s teeth are just coming in, says Duncan Currie, a legal advisor to the Deep Sea Conservation Coalition, an advocacy organization. At the moment, the authority still hasn’t created an enforcement agency. In addition, “they won’t and they can’t force countries to comply with ISA regulations when drafting their own laws,” says Currie.**

Back in 1982, when UNCLOS was still under development, US president Ronald Reagan and British prime minister Margaret Thatcher introduced an agreement guiding how the treaty would operate—a provision that also applies to the ISA. According to that agreement, once the ISA receives an application for a mining permit, it has two years to develop regulations. If the ISA does not finalize its rules after two years, it has to give the country provisional approval with whatever rules it has in place.

So far, the ISA has yet to finalize its regulations for deep-sea-mineral extraction. It has, however, already granted 26 permits for deep-sea-mineral exploration in international waters, though none yet for mineral extraction.

Though there appears to be little likelihood of a country bypassing the ISA’s permitting process, “there’s very little to stop them,” Currie says. At the moment, deep-sea mining in international waters is sufficiently far in the future that the regulatory situation has not yet made any country itchy enough to jump the gun, he says....MORE

Tuesday, May 23, 2017

Can it Be? "A Bearish Positive Carry Trade" (Bund/US T-Note)

Forget Betteridge and his law of headlines on this one. The answer to the headline query would be "Yes" (for now).
From the Macro Tourist:
The Eurostoxx outperformance of the past month has garnered a lot of attention, but there is another similar trade many investors are missing. Not only that, but it has a positive carry, something that is sorely lacking in this day and age of NIRP.

Since early April, the German Bund / US T-note 10 year yield spread has rallied 35 basis points, rising from negative 220 bps to 185 bps.
For all those who think quantitative easing is long end fixed income friendly, this move makes no sense. After all, the ECB is busy buying bunds by the bucketful while the Federal Reserve is preparing the market for the eventual winding down of their balance sheet, reducing the rate of reinvestment (and therefore bond buying). Yet, for me, this move makes complete sense. What is a bond investor’s worst nightmare (after default)? Inflation. What is quantitative easing suppose to create? Inflation. Why then does the market expect QE to cause bond prices to rise? If Central Banks are successful, it should actually create the exact opposite reaction....MORE

Think You Can Guess/Forecast Notional GDP? Here's The new Hypermind NGDP Futures Market

Was it just a couple years ago NGDP targeting was on every commentator's  lips?
(I can never see that word without thinking of the old potato pun-must try to get out more)

From the Library of Economic Liberty:

The new Hypermind NGDP futures market
I am pleased to announce that a new Hypermind NGDP market is up and running. Back in 2015, we ran an annual NGDP prediction market and 4 quarterly markets. Because only the annual forecast has much macroeconomic significance, this time around we are only running that one market. Traders will forecast the NGDP growth rate from 2017 Q1 to 2018 Q1.

Last time we had about $5000 in prize money for the annual market, and that is what we are starting off with this time. However I expect the prize money to rise dramatically before the contract expires, as we are involved in a major fundraising operation. If you want to contribute, there is information over at my post at TheMoneyIllusion:

Emile Servan-Schreiber at Hypermind has provided me with some useful information for those who want to participate in the Hypermind NGDP market, or just watch the action:
To follow the market's prediction in real time, go here:
(Note that the initial price in the history chart is all wrong, but that will matter less and less as time goes on.)
To participate, one just needs to register to Hypermind at

And finally, a quick review of my current views on NGDP futures: 
1. This is not a policy market. For policy, I propose 3% and 5% "guardrails", where the central bank promises to buy unlimited NGDP futures at 3% growth and sell unlimited futures at 5% growth. That policy does not even require the creation of an NGDP prediction market; the central bank can create the contracts....MORE
HT: Marginal Revolution

"Whisky Dividends Anyone?" Constellation Brands Made An Offer to Buy the Jack Daniel's Distiller Brown-Forman (BFA; BFB)

The stock is down $0.60 (-1.05%) at $56.32. UPDATE: Make that $54.69 down $2.23 (-3.92%) That dividend idea is looking better by the minute.
From CNBC:
Constellation Brands made offer to buy Jack Daniel's owner Brown-Forman
  • Constellation Brands has made an approach to acquire Jack Daniels' owner Brown-Forman
  • The Brown family owns a majority of the voting power and has indicated historically that they do not want to sell their company
Constellation Brands, the owner of Corona and Svedka Vodka, has made an approach to acquire Jack Daniel's owner Brown-Forman, people with knowledge of the matter said.

Brown-Forman said it was not interested in selling, but informed the board of Constellation Brands' interest, said the people, who asked not to be named discussing private information.

Terms of any potential offer could not be learned, but Brown-Forman's market cap is hovering around $22 billion. There are no ongoing talks, one of the people said. But Constellation remains interested in a potential merger.

The Brown family, who are fifth-generation owners of Brown-Forman, own a majority of the voting power and have indicated historically that they do not want to sell their company....MORE
Yesterday the stock was the #1 gainer in the S&P 500 and Barron's Ben Levisohn was as puzzled as I:
The Hot Stock: Brown-Forman Flies 7.5%
...I wish I could tell you what's going on, but I have no clue. All I can offer is this chart, which shows you strong Brown-Forman has been this month:... 
I checked Modern Drunkard for comment but saw nothing. However we can guess what their reaction will be, they want nothing to change. When Brown-Forman lowered the alcohol content of their flagship booze Modern Drunkard accused them of watering the whisky.

Jack Daniel’s: A Legacy Betrayed 
"Jack Daniel’s Old No. 7 is a simple reminder that some things just never change. And shouldn’t. This is the old-time whiskey made as our fathers made it. Remaining true to Jack Daniel’s original recipe and charcoal-mellowed character means folks today enjoy the same sipping whiskey awarded seven international gold medals."
So says Jack’s Daniel’s web site. Rather inspiring, isn’t it? Such noble sentiments should warm the cockles of the most cynical drunkard’s heart.

Unfortunately, not a word of it is true. For the second time since the Brown-Forman Corporation acquired the distillery in 1956, they have lowered the proof of Jack Daniel’s Black Label Tennessee Whiskey. Fifteen years ago they dropped its original 90 proof to 86, and very recently, and might I say with zero fanfare, they degraded it to 80 proof.

Alert drunkard Chris Sharp brought this unfathomable blasphemy to my attention and I feel it my sworn duty to bring it to yours.

“I was outraged,” says Sharp, a once avid Jack drinker. “They continue to claim in their ads that they stick to tradition. Tradition, my ass. If they think that people will take this sitting down they are sadly mistaken.”...MORE
Oh, and the whisky divi idea?
A repost from 2013:

"Whisky Dividends Anyone?" 
From Global Financial Data (we are fans):
In 1933, a precedent was set for paying whisky as a dividend on common stock.  As I have discussed in an earlier blog, entitled The Famous Whiskey Dividend, companies can invent creative ways to pay out dividends.  In fact, when the going gets tough, the tough go drinking.

After Prohibition was repealed in 1933, National Distillers Products Corporation distributed a dividend of one case of whiskey for each five shares that were owned. This pulled out the stops with paying dividends.  Twenty years later, Park & Tilford provided a more sobering saga.

Originally founded in 1840, Park & Tilford had a long history of being a family-owned operation run by the Schulte’s.  For decades, the company produced a broad line of whiskey and related products until it formally incorporated in 1923 in order to list on the NYSE.

In 1943, in the middle of World War II, whiskey was scarce.  Most companies that produced whiskey had their factories diverted to manufacturing more important goods – in the opinion of some folks – making whisky a hot product to the public.  Since Park & Tilford owned a drug store in New York and went public during prohibition; the company diversified into cosmetics, perfumes and other drug sundries.  Though Prohibition had been repealed in 1933, the diversion of resources to the production of war materiel had some people worried that Prohibition was being reintroduced de facto if not de jure.

On December 15, 1943, D.A. Schulte, the President of Park & Tilford announced that the company was contemplating a distribution of whiskey to its shareholders.    The announcement by Schulte had its effect.  Based on these rumors, the stock advanced roughly 40 points over the next five months, as new shareholders tried to get access to scarce whisky to sell on the black market.  This advance was an aggressive move in any market....MORE 
Another oddball dividend story last seen in Living La Vida Cocoa: Warren Buffett, Berkshire Hathaway and the Chocolate Wars (BRK.A; BRK.B; CBY; KFT; HSY):

...*Copied out of the 1988 Annual Report for our November 2007 post "How Buffett Made a Killing in Chocolate, And Warren's Letters to Shareholders":

Warren on arbitrage:

Some offbeat opportunities occasionally arise in the
arbitrage field. I participated in one of these when I was
24 and working in New York for Graham-Newman Corp.
Rockwood & Co., a Brooklyn based chocolate products
of limited profitability, had adopted LIFO
valuation in 1941 when cocoa was selling for
50 cents per

In 1954 a temporary shortage of cocoa caused the price to
soar to over 60 cents. Consequently Rockwood wished to
unload its valuable inventory - quickly, before the price
dropped. But if the cocoa had simply been sold off, the
company would have owed close to a 50% tax on the proceeds.

The 1954 Tax Code came to the rescue....MORE

El Niño: Where We're At and What's Forecast

A quick note on terminology for normal people who don't obsess about this stuff:
  • ENSO = the El Niño/Southern Oscillation
  • ENSO Neutral = the ocean surface temperature anomaly in the ENSO 3.4 region is between +0.5°C and -0.5°C.
  • El Niño/La Niña conditions exist when the anomaly is greater than (Niño) or less than (Niña) the half-degree cut-off for neutral.
  • A full blown El Niño/La Niña is declared when the conditions persist for three overlapping three-month periods i.e. five consecutive months.
From IRI/Columbia University:
IRI ENSO Forecast
2017 May Quick Look
Published: May 18, 2017

A monthly summary of the status of El Niño, La Niña, and the Southern Oscillation, or ENSO, based on the NINO3.4 index (120-170W, 5S-5N)

Use the navigation menu on the right to navigate to the different forecast sections
By mid-May 2017, the tropical Pacific remained in an ENSO-neutral state, with above-average SSTs present in the eastern Pacific Ocean, and near-average SSTs across the central and east-central part of the basin. The collection of ENSO prediction models indicates increasing chances of El Niño into the summer and fall of 2017....MORE

Historically Speaking

    El Niño and La Niña events tend to develop during the period Apr-Jun and they
  • Tend to reach their maximum strength during October - February
  • Typically persist for 9-12 months, though occasionally persisting for up to 2 years
  • Typically recur every 2 to 7 years

"Farming the World: China’s Epic Race to Avoid a Food Crisis"

From Bloomberg, May 22:
But China’s efforts to buy or lease agricultural land in developing nations show that building farms and ranches abroad won’t be enough. Ballooning populations in Asia, Africa and South America will add another 2 billion people within a generation and they too will need more food.

That leaves China with a stark ultimatum: If it is to have enough affordable food for its population in the second half of this century, it will need to make sure the world grows food for 9 billion people.
Its answer is technology.

China’s agriculture industry, from the tiny rice plots tended by 70-year-old grandfathers to the giant companies that are beginning to challenge global players like Nestle SA and Danone SA, is undergoing a revolution that may be every bit as influential as the industrial transformation that rewrote global trade.

The change started four decades ago when the country began to recast its systems of production and private enterprise. Those reforms precipitated an economic boom, driven by factories, investment and exports, but the changes down on the farm were just as dramatic.

Land reforms lifted production of grains like rice and wheat, and millions joined a newly wealthy middle class that ate more vegetables and pork and wanted rare luxuries like beef and milk.

When Du Chunmei was a little girl, pork was a precious gift only for the elders of her village in Sichuan during the Lunar New Year holiday. The family pig would be slaughtered, and relatives and neighbors would pack their house for a feast.

“Meat used to be such a rarity,” said Du, now 47 and an employee of state oil company PetroChina Co. whose family celebrated the holiday this year at a restaurant. “Now it’s so common we try to cut back to stay healthy.”

But the breakneck pace of the country’s development brought some nasty side effects. Tracts of prime land were swallowed by factories. Fields were polluted by waste, or by farmers soaking the soil in chemicals. The country became a byword for tainted food, from mercury-laced rice to melamine-infused milk powder.

So how can China produce enough safe food for its growing population if they all start eating like Americans?

The simple answer is it can’t.

It takes about 1 acre (half a hectare) to feed the average U.S. consumer. China only has about 0.2 acres of arable land per citizen, including fields degraded by pollution.

So China’s Communist government has increasingly shifted its focus to reforming agriculture, and its approach divides into four parts: market controls; improving farm efficiency; curbing land loss; and imports.

In each case, technology is the key to balancing the food equation. The nation is spending billions on water systems, seeds, robots and data science to roll back some of the ravages of industry and develop sustainable, high-yield farms.

It needs to succeed quickly, because China’s chief tool during the past decade for boosting domestic production is backfiring.

China has a goal of being self-sufficient in staple foods like rice, corn and wheat. To ensure farmers grew those crops, it paid a minimum price for the grains and then stored the excess in government silos.

Farmers responded, saturating their small plots with fertilizers and pesticides to reap bumper crops that filled government reserves to bursting....MUCH MORE

"Vegetable oil markets hold secret to crude oil values, says CME expert"

From Agrimoney:
Want to know what is going to happen to crude oil prices?
Just look at values of the likes of palm oil and soyoil, according to Erik Norland, senior economist at CME Group.
While crude has a reputation for being a leader of raw materials, the commodities queen, it is actually a follower in prices terms of what goes on in markets for edible oils, from which biodiesel is made.
'People have it backwards'
Comparison of price charts shows that soyoil "peaked before crude oil in 2008, it bottomed out before crude in 2009," Mr Norland said.
"It peaked again before crude oil in 2011, and preceded the collapse more recently."
"I think people have it backwards," Mr Norland told Agrimoney LIVE.
"I think crude oil traders should be looking at biofuel markets, rather than the other way round."
Reason behind the dynamic
And there is a fundamental reason why edible oil markets, via biodiesel, might be price leaders, Mr Norland added.
"It is fairly simple. When markets perceive there is too much fuel around, the first thing they push back on is biofuel.
"When crude is scarce, they become very enthusiastic for biofuels....

Monday, May 22, 2017

Italy is giving away over 100 castles for free – there’s only one catch

Over the years we've gathered a few tips for castle buyers, some of those links after the jump.
From CNBC:
Italy is giving away more than 100 historic castles, farmhouses and monasteries for free in an effort to breathe new life into its disused public buildings.

Under a new scheme unveiled by the country's government run State Property Agency, 103 ancient buildings will be up for grabs to entrepreneurs who promise to transform the locations into tourist destinations.

The disused properties are situated along eight historic routes running the breadth of the country and the nearby islands of Sicily and Sardinia. It is hoped that the initiative will create a series of new facilities for the hundreds of hikers, cyclists and pilgrims who use the routes each year.

"The project will promote and support the development of the slow tourism sector," Roberto Reggi from the State Property Agency told The Local Italy. "The goal is for private and public buildings which are no longer used to be transformed into facilities for pilgrims, hikers, tourists, and cyclists."
The scheme, which is backed by Italy's Ministry of Tourism, calls on applicants to submit a proposal outlining how they intend to transform their preferred building into a tourist attraction. Specific preference will be given to those aged under 40.

Successful applications will then be awarded rights to the property for nine years, with the option to extend for an additional nine years.

The deadline for applications is June 26 and work will be expected to commence next summer....MORE, including application information
The first thing to look for in your new castle are crenels.

This building in County Wicklow from March 2017's "You Can Either Buy A Round of Guinness For Four Million Of Your Pals Or You Can Buy A Guinness 'Castle' and 5000 Acres", despite obviously not being a real castle (note garden level windows allowing too-easy access to wannabe pillagers, has its value enhanced by crenelated battlements:

The 5000 acres probably bump the price a bit as well.

We made the same points regarding another Irish place, Lismore Castle:
Despite the crenelated battlements, and although the central keep looks real enough, the windows set into what should be curtainwall give away the fact that this is less castle and more comfy house.
This is what happens when upstarts like the Cavendish clan get their hands on stuff.  
(just kidding Your Grace)
The next thing to pay attention to is verticality.

This is from last June's "For Sale: English Tower That Rich Guy Built to Imprison Wife":

Again. not a true castle but as noted at the time:
And a fine tower it is.
Very vertical. 
The linked pictures lead to our third consideration, your spiral stairs. From the (maybe) adulterous wife tower above:

The first thing you notice is the spiral is correct.
Your men-at-arms retreating from the attackers will have their right hand free to thrust, parry and chop while the swing of the interlopers is impeded by the outer wall.

On newel-post spiral stairs the tactics are different:
And then there's the whole issue of the left-handers who can ruin your day:

Anyhoo, here's a snappy little (62 page) monograph from the Castle Studies Group Journal, no. 25 that says this may all be moot:
The Rise of the Anti-clockwise Newel Stair
The traditional castle story dictates that all winding, newel, turnpike or spiral staircases in medieval great towers, keep-gatehouses, tower houses and mural wall towers ascended clockwise. This orthodoxy has it that it offered a real functional military advantage to the defender; a persistent theory that those defending the stair from above had the greatest space in which to use their right-handed sword arm. Conversely, attackers mounting an upward assault in a clockwise or right-handed stair rotation would not have unfettered use of their weaponry or have good visibility of their intended victim, as their right sword hand would be too close to the central newel.

Whilst there may be other good reasons for clockwise (CW) stairs, the oft-repeated thesis sup-porting a military determinism for clockwise stairs is here challenged. The paper presents a corpus of more than 85 examples of anticlockwise (ACW) spiral stairs found in medieval castles in England and Wales dating from the 1070s through to the 1500s...MUCH MORE
Moving on to a couple of the Italian offerings.

Castello di Montefiore has pretty much everything you are looking for in a castle including machicolations under the battlements at the top of the towers for dropping your flaming pitch or whatever on the besiegers:

Castello di Blera on the other hand is what is known in the trade as a "fixer-upper":

Either way try to remember the lessons from March 2013's "Heartache: Owning a Castle Can Be Such a Hassle":