Friday, January 30, 2015

"Boston Beats Seattle in Venture Capital Bowl With Biotechs as MVPs "

Seattle isn't really known for its VC scene, more of a BA, MSFT; AMZN vibe whereas Boston had the ashes of the Route 128 VC community to build on.
And some schools.

From Xconomy Boston:
It’s Super Bowl Friday—Super Blue Friday, here in Seattle, where the sun shines in January. Time for a good old fashioned venture capital showdown between Seattle and New England.

It’s not much of a contest, unfortunately. Venture investors did 390 deals in the greater Boston area last year, compared to 173 in Seattle, according to Seattle-based PitchBook.

By dollar value, the final score was New England, $4.8 billion, Seattle, $1.9 billion.

Interestingly, PitchBook counts 24 venture firms or angel groups that made investments in Seattle last year compared to only 19 in the Boston area.

The top-five most-active investors in each market, with the number of deals they did:

Boston
Atlas Venture, 36
TechStars, 14
Start Tank Boston, 12
General Catalyst Partners, 12
.406 Ventures, 12

Seattle
Madrona Venture Group, 20
WRF Capital, 10
Ignition Venture Partners, 8
Maveron, 8
Vulcan Capital, 7

The top deals in each market were in biotech. New England wins again with Moderna Therapeutics’ $450 million round. Intarcia Therapeutics $200 million raise came second. In Seattle it was Juno Therapeutics, which closed two venture rounds in 2014, raising some $310 million, before going public to raise $265 million more. Adaptive Biotechnologies raised more than $200 million, also over the course of two rounds....MORE

"Crude Oil Prices Are Spiking (Again)"

Crude is up 6.78% on the day at $37.55.
From ZeroHedge:
Because - everything is awesome again. So the machines run the stops for the week but fail to hit $47, and no news, no catalyst, but naturally stocks decide to inch higher on this latest algorithmic idiocy.


Here's the close-up into the NYMEX close.. and drop...

And here's why... and how - this happened, and has happened so many times before, courtesy of your friendly, stop-hunting neighborhood algo:
...In early 2007, Defendants Optiver US, LLC ("Optiver"), Optiver Holding BV C'"Optiver Holding"), and Optiver VOF C'Optiver VOF") - the U.S. and Netherlards branches of a global proprietary trading fund headquartered in the Netherlands - developed and, in March 2007, implemented a scheme to manipulate the price of futures contracts in Light Sweet Crude Oil, New York Harbor Heating Oil, and New York Harbor Gasoline on the New York Mercantile Exchange ('"NYMEX").

... least 19 separate instances during the month of March 2007, Optiver, Optiver Holding, and Optiver VOF, led by head traders, Defendant Chrstopher Dowson C'Dowson") and Defendant Randal Meijer ('"Meijer"), repeatedly attempted to manipulate market prices - or in Dowson's own words, "'bully the market" - for the above-referenced energy futures contracts towards the end of the trading day.

... On at least five of the nineteen instances, Defendants succeeded in their manipulative scheme by causing artificial prices in certain of these energy futures contracts, resulting in serious harm to other market participants and, ultimately, to the public at large
...MORE

"The Coming Shelter Dog Shortage"

I should note that children, women and dogs seem to like me, cats and some men, not so much.
From Out the Front Door:
It is becoming more and more obvious that supply and demand for shelter dogs in the United States is coming into balance. For example, the entire state of Colorado had a live release rate for dogs of 92% for 2013, and that was with over 17,000 dogs imported from kill shelters in other states. Dog transports have become big business, with dogs being moved from areas where they are not getting adopted to areas where they go out the door quickly. Generally speaking, New England and parts of the northeast, upper midwest, and Pacific northwest now have shortages of shelter dogs. With the spectacular progress that No Kill is making in places like Jacksonville, Atlanta, Baton Rouge, and other cities and counties in the southeast, the sending shelters may not be needing to send dogs for much longer.

If these trends continue – and it certainly seems like they will – we will have a shortage of shelter dogs for people wanting to adopt. What happens then? If the usual laws of supply and demand apply, commercial breeders will step up the number of dogs they breed to take advantage of the shelters who no longer have enough dogs to challenge them for market share. (Note: I’m talking about commercial, for-profit breeders here, not show breeders. Show dogs have their own set of problems, but most show breeders take reasonably good care of their breeder dogs and puppies and many of them do an outstanding job, including helping with rescue.)

So is there anything wrong with commercial breeders increasing their output? After all, the United States was built on commerce. I think commercial breeding is bad, though, for several reasons. First, dogs are not widgets. Commercial breeding has long been associated with puppy mills, where breeder dogs (who often have heritable health problems) are kept in terrible conditions and puppies are poorly socialized. The puppies are shipped, sometimes for long distances, to pet stores where they are kept in less than ideal conditions, which makes them more vulnerable to illness and trauma. They are then sold by people who may make little or no effort to match puppy temperament to the temperament of the purchaser. The puppies will likely be sold intact. Then, after the sale, there will be little or no follow-up to make sure the puppy is settling in with no problems....MORE
There's always a trade, somewhere.

Chartology: Silver Support and Resistance

Most active (Mar,) futures $17.18 up 40.7 cents
From Nifty Charts:
 

...MORE

EIA Natural Gas Supply/Demand Report: Rise in Power Burn Offset By Flat Out Production

Repeating, for new readers, our natural gas thesis for this heating season:
Average temperatures swamped by record supply. We're going lower.
Most active March futures  $2.676  -0.043 last.
The market is in backwardation with March 2016's at 3.233.
20.8% for one year if you have the storage.

From the Energy Information Administration:
Led by growth in Texas, the Southeast, and Northeast, power burn is headed for a January record

Regional natural gas consumption for electric power generation, January 1-28, 2010-15Natural gas consumed in electric generation (power burn) has generally increased over the past 10 years, and power burn during the first 28 days of January is at record levels this year, according to data from Bentek Energy. So far in January 2015, power burn is more than 6% greater than the same period in 2014, and 16% higher than the five-year (2010-14) average for this period.

Regional growth for power burn is strongest in Texas, which increased its power burn so far this January by 17.5 billion cubic feet (Bcf), an 18% increase over 2014. Strong power burn growth this January also occurred in the Northeast and Southeast, which had power burn increases of 10% (12.5 Bcf) and 7% (13.5 Bcf), respectively. These three regions are among the largest users of natural gas for power generation in the country.

Contributing to this growth is an increasing share of natural gas-fired capacity and relatively low natural gas prices. From January through November 2014, 66 power plant units, with a total net summer capacity of 3,787 megawatts (MW), were retired in 19 states. The primary generation fuels for these plants were coal and petroleum liquids. More than half of the generating capacity retired during this period came from the Southeast and Northeast. In the Southeast, this included the 200-MW W. S. Lee power plant in South Carolina and the 444-MW Widows Creek facility in Alabama, both coal-fired. And in the Northeast, the Salem Harbor 744-MW coal-and-oil-fired facility in Massachusetts was retired. Additionally, in December, the 604-MW Vermont Yankee nuclear power plant was closed.

More than 300 utility-scale generating units, with a net summer capacity of 9,656 MW, were brought online in January-November 2014, with 46 being natural gas-fired units representing 48% (4,624 MW) of the total added capacity....MUCH MORE
And from FinViz a graphic depiction of supply/demand:

Russian Bombers Intercepted Over English Channel

bomber russia
A photo taken in October and provided by Britain’s Royal Air Force shows a Russian “Bear” bomber 

From The Guardian:
Russian ambassador summoned to explain bombers over the Channel 
British Typhoon fighter jets were scrambled to intercept the two Russian planes, which were flying close to UK airspace

The Foreign Office summoned Moscow’s ambassador to London this afternoon to complain about a flight by two Russian bombers over the Channel, which Britain says posed a potential danger to civilian flights.

The Ministry of Defence confirmed that RAF Typhoon jets were scrambled to intercept a pair of Tupolev 95 “Bear” planes on Wednesday, as they flew along the south coast. A spokeswoman said: “The Russian planes were escorted by the RAF until they were out of the UK area of interest. At no time did the Russian military aircraft cross into UK sovereign airspace.”

A FCO spokeswoman said: “While the Russian planes did not enter sovereign UK airspace and were escorted by RAF Typhoons throughout the time they were in the UK area of interest, the Russian planes caused disruption to civil aviation. That is why we summoned the Russian ambassador to account for the incident.”...MORE
RAF Fighter Command was unavailable for comment.

Charting the Divergence Between Oil and Energy Sector Equities

It's too early for the equities.
March WTI $45.15 up 0.62; XLE $74.26 down 0.85%; XOP $44.88 down 0.64%.
From Hard Assets Investor:

Despite Oil Price Collapse, Valuation Of Energy Stocks Surge 
A rebound in oil and natural gas is already priced into shares.

“The plunge in crude oil and natural gas prices has spurred a sell-off in energy stocks, making it a good time to buy the beaten-down sector.”

That's the thesis that many investors are embracing, with billions of dollars flowing into oil and gas stocks and exchange-traded funds in recent weeks. Nearly $10 billion has flowed into energy-related ETFs since late November.

But are energy stocks really a bargain, or is there more downside to come? A look at the sector earnings reveals that energy companies are actually trading at their most lofty valuation in years, a reflection of investors' expectations that the drop in oil prices will be short-lived.

Not Falling As Fast As Oil
While oil's decline has been swift and relentless since peaking above $107 in mid-June, the decline in oil stocks hasn't been as nearly as dramatic. In that period, WTI crude oil, the U.S. benchmark, has fallen 58 percent, while the energy sector within the S&P 500 has shed about 24 percent.

Oil Performance Since Peak

Some of the divergence can be attributed to the fact that the S&P energy sector is heavily weighted in integrated oil giants. Big Oil like Exxon Mobile and Chevron are conceivably benefiting from oil's slide in their downstream (refining) operations at the same time their oil-price-dependent upstream (exploration and production) operations suffer.

But that's certainly not the whole explanation. Exxon's earnings-per-share estimate for 2015, for example, has fallen from nearly $8 in August to $4.32 today, a decline of 46 percent. Analysts have been slashing earnings estimates for energy companies left and right, yet they are still using price decks well above the current market.

The analyst estimate consensus for WTI crude oil prices is $62 for 2015 and $75 for 2016, down from $94 for both years just three months ago, but above current prices near $44. At the same time, analysts have sliced their natural gas price estimates to $3.71 for 2015 and to $4 for 2016, down from a few months ago, but well above current prices near $2.70/mmbtu.

Oil Rebound Already Priced In
Yet even at analysts' price deck of $62 for oil and $3.71 for natural gas, energy stocks are trading at their highest valuation since 2002. Based on current 2015 estimates, the sector has a forward price-to-earnings ratio of more than 23. That compares with the 10-year average of 12.3....MORE

"Is China Moving to Control the Indian Ocean?"

From The Diplomat:
Is China Moving to Control the Indian Ocean?
USS Carl Vinson and the Indian navy oiler INS Shakti
Your Friday China reading:

Two fascinating pieces on China’s military strategy emerged this week. First, Abhijit Singh takes up the question of China’s naval ambitions in the Indian Ocean as part of the PacNet series hosted by CSIS. Singh points to China’s recent naval deployments in Sri Lanka as “evidence that Beijing has its sights set on dominating the Indian Ocean.” Particularly worrisome for Singh is the fact that China’s submarine did not dock with the Sri Lanka Port Authority in Colombo, but chose instead to dock “at the Colombo South Container Terminal (CSCT), a deep-water facility built, controlled and run by a Chinese company.” That and other dockings at the Chinese-built port, Singh explains, have strengthened “Indian suspicions that PLA-N assets are being allowed privileged access to Sri Lankan ports funded by Chinese investments.” Given China’s major push to invest in ports throughout Southeast and South Asia (and even Africa) as part of its Maritime Silk Road, the question of how (if at all) the PLA Navy plans to use these assets will only gain in importance....MORE
Previously:
Shadow War: We Told You the Indian Ocean Would Be Hot
In our November 2010 post "India Orders Firms to "Scour the Earth" for Energy Supplies as President Obama Heads Over" I mentioned:
I have a hunch that American schoolkids today will be hearing a lot about the Indian Ocean before they graduate and might even be able to find it on a map.*...
...*I mean come on, just look at the land masses that border it:





Map of Indian Ocean
Here's the latest, from Wired's Danger Room blog...
See also:
Indian Ocean Geopolitics: China Goes to the Maldives

"The Secret to Getting a 99,766 Percent Return in the Art Market"

From Bloomberg:

<p><em>Salisbury Cathedral from the Meadows</em> by John Constable</p>
Near the end of the Old Master Paintings sale at Sotheby’s New York today, a small painting of a church steeple and fields by the British artist John Constable flashed on the screen.

Bidding for the painting began slowly—it started at $1 million and went upward in $100,000 increments—but the pace picked up when two anonymous phone bidders faced off, driving the price well past its presale estimate of $2 million to $3 million. By the time it hit $4 million the room had become totally silent, and it was then that one untraceable male voice in the back muttered, “Someone at Christie’s is going to get fired.”

Normally, when a painting does well at Sotheby’s, the only reaction from its archrival Christie’s is off-the-record disdain (or at most, professional jealousy for missing out on the consignment in the first place). In the case of the Constable, titled Salisbury Cathedral from the Meadows, the problem for Christie’s is that it had in fact been consigned to them just two years ago. And they’d sold it, too … for just $5,212, or approximately 57,559 percent less than Sotheby’s presale high estimate.

Come again?

Even in today’s white-hot art market, the only way for a painting to realize that percentage increase in value in so short a time is if it’s “discovered” as a painting by a different artist entirely, and that’s exactly what happened with the Constable.

It was sold in a 2013 estate sale of Hambleden Manor in Buckinghamshire by Maria Carmela Viscountess Hambleden, then 83, who had decided to liquidate the contents of her house and move into a nearby cottage. The painting was auctioned as a “Follower of John Constable” and carried an estimate of £500 pounds to £800. Its final sale price was £3,500.

Sotheby’s catalogue states that at the time of the purchase, the painting was “heavily retouched with a dark and opaque pigment which probably dated to the late 19th or early 20th century, in a misguided attempt to ‘finish’ the painting.” After the painting was cleaned by the new buyer, Sotheby’s says, “the Constable’s original and brilliant conception has been once again revealed.”

Christie’s, however, has a different take on things. In statement today, a spokesperson said, “We are aware that Sotheby’s have sold this work as by Constable. We took the view at the time of our sale in 2013 that it was by a “follower of.” We understand that there is no clear consensus of expertise on the new attribution.”...
Also at Bloomberg:
You Can Own a Banksy for Only $5,317 

Venture Capital: "Quantum" Computing Co. D-Wave Raises $29 Mil From Goldman, Bezos, CIA

The usual suspects. although technically In-Q-Tel is distinct from the CIA.
From PE HUB:
D-Wave Systems Inc, a quantum computing company headquartered in Burnaby, British Columbia, has secured C$29 million in funding. The investors in this round were not named; however, D-Wave’s previous backers include Bezos Expeditions, BDC Capital, DFJ, Goldman Sachs, Growthworks, Harris & Harris Group, In-Q-Tel, International Investment and Underwriting and Kensington Partners Limited.

PRESS RELEASE
Burnaby, British Columbia – January 29, 2015 – D-Wave Systems Inc., the world’s first quantum computing company, today announced that it has closed $29 million in funding from a large institutional investor, among others. This funding will be used to accelerate development of D-Wave’s quantum hardware and software and expand the software application ecosystem. This investment brings total funding in D-Wave to $174 million (CAD), with approximately $62 million raised in 2014.

“The investment is a testament to the progress D-Wave continues to make as the leader in quantum computing systems,” said Vern Brownell, CEO of D-Wave. “The funding we received in 2014 will advance our quantum hardware and software development, as well as our work on leading edge applications of our systems. By making quantum computing available to more organizations, we’re driving our goal of finding solutions to the most complex optimization and machine learning applications in national defense, computing, research and finance.”

The funding follows a year of strong growth and advancement for D-Wave. Highlights include:
• Significant progress made towards the release of the next D-Wave quantum system featuring a 1000 qubit processor, which is currently undergoing testing in D-Wave’s labs.
• The company’s patent portfolio grew to over 150 issued patents worldwide, with 11 new U.S. patents being granted in 2014, covering aspects of D-Wave’s processor technology, systems and techniques for solving computational problems using D-Wave’s technology....MORE

"AP's 'robot journalists' are writing their own stories now"

Gets hired on Monday….Laid off on Friday…

 From The Verge:
Minutes after Apple released its record-breaking quarterly earnings this week, the Associated Press published (by way of CNBCYahoo, and others) "Apple tops Street 1Q forecasts." It's a story without a byline, or rather, without a human byline — a financial story written and published by an automated system well-versed in the AP Style Guide. The AP implemented the system six months ago and now publishes 3,000 such stories every quarter — and that number is poised to grow.

Quarterly earnings are a necessity for business reporting — and it can be both monotonous and stressful, demanding a combination of accuracy and speed. That's one of the reasons why last summer the AP partnered with Automated Insights to begin automating quarterly earnings reports using their Wordsmith platform.

You wouldn't necessarily know it at first blush. Sure, maybe reading it in the context of this story it's apparent, but otherwise it feels like a pretty standard, if a tad dry, AP news item. The obvious tell doesn't come until the end of an article: "This story was generated by Automated Insights." According to AI's public relations manager James Kotecki, the Wordsmith platform generates millions of articles per week; other partners include Allstate, Comcast, and Yahoo, whose fantasy football reports are automated. Kotecki estimates the company's system can produce 2,000 articles per second if need be.

"I wouldn't expect a good journalist to not be skeptical."

Philana Patterson, an assistant business editor at the AP tasked with implementing the system, tells us there was some skepticism from the staff at first. "I wouldn't expect a good journalist to not be skeptical," she said. Patterson tells us that when the program first began in July, every automated story had a human touch, with errors logged and sent to Automated Insights to make the necessary tweaks. Full automation began in October, when stories "went out to the wire without human intervention." Both the AP and Automated Insights tell us that no jobs have been lost due to the new service. We're also told the automated system is now logging in fewer errors than the human-produced equivalents from years past....MORE
Yeah, but can the robots balance three cups of coffee?
Or do photojournalism?

Journalisming like a boss #partylikeajournalist 

P. Murphy?
More links at "Robot Writing Moves from Journalism to Wall Street"

"Unconscious thought not so smart after all"

Apparently scientific journals have changed since I was in school.

From Nature:
Study on decision-making stokes controversy over power of distracted mind.
John Springer Collection/Corbis

Under debate: can solving an unrelated puzzle help someone make a complex decision?
If you have to make a complex decision, will you do a better job if you absorb yourself in, say, a crossword puzzle instead of ruminating about your options? The idea that unconscious thought is sometimes more powerful than conscious thought is attractive, and echoes ideas popularized by books such as writer Malcolm Gladwell’s best-selling Blink.

But within the scientific community, ‘unconscious-thought advantage’ (UTA) has been controversial. Now Dutch psychologists have carried out the most rigorous study yet of UTA — and find no evidence for it.
Their conclusion, published this week in Judgement and Decision Making, is based on a large experiment that they designed to provide the best chance of capturing the effect should it exist, along with a sophisticated statistical analysis of previously published data1.

The report adds to broader concerns about the quality of psychology studies and to an ongoing controversy about the extent to which unconscious thought in general can influence behaviour. “The bigger debate is about how clever our unconscious is,” says cognitive psychol­ogist David Shanks of University College London. “This carefully constructed paper makes a great contribution.” Shanks published a review last year that questioned research claiming that various unconscious influences, including UTA, affect decision making2.

A typical study probing UTA asks subjects to make a complex decision, such as choosing a car or a computer, after either mulling over a list of the object’s attributes or viewing the list quickly and then engaging in a distracting activity such as a word puzzle. However, such studies have drawn different conclusions, with about half of those published so far reporting a UTA effect and the other half finding none.

Proponents of the theory claim that the effect is exquisitely sensitive to experimental variations, and often attribute the negative results to the fact that many research groups varied elements of the set-up, such as the choice of puzzle used for the distraction3. Critics say that the positive results came from having too few participants in the experiments....MORE
HT: Marginal Revolution

Ya gotta love the deeper dive:

Related stories

Thursday, January 29, 2015

London’s FTSE 100: Battling 15 year Resistance Level

Thursday close: 6810.60 down 15.34.
But that was before today's big reversal in the U.S. markets,
From See It Market:
With London’s FTSE 100 Index, the current price area has stood as particularly durable resistance for more than a decade. We are watching to see whether the index can leave a lower high at the start of 2015.
The FTSE includes the top 100 stocks on the London Stock Exchange based on market capitalization. Together, the 100 companies represent more than 80% of the market capitalization of the entire exchange. Thus it has a role similar to those of the S&P 500 Index.
Market bulls have been unable to push the index above the two sets of prior highs — the most recent in 2007 at 6754.10 and the all-time high in late 1999. If the resistance area holds again, the index could start a new retracement process that lasts several months or even persists for years, taking price back to the lower edge of the 15-year range.
FTSE 100 Index Monthly Chart
FTSE resistance levels_ftse 100 index monthly chart
The weekly chart below shows how frequently the index has probed the resistance line during the last two years. Also, since last autumn, price has spent a considerable amount of time below the lower boundary of the weekly channel. This is not something one should see if there is still much appetite for buying.
FTSE 100 Index Weekly Chart
FTSE resistance levels_ftse 100 index weekly chart
The silver lining of a downward forecast is that a retest of the lower price areas around 4,300 or 3,650 could become the platform from which another advance is built — one lasting several years or even a decade....MORE

Shipping: "Baltic Dry Index Death Spirals to Near 30-Year Low"

From Reuters via gCaptain:
The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry bulk commodities, spiralled downwards to its lowest level in nearly three decades as rates for all the four vessel types continued to flounder.

The overall index, which gauges the cost of shipping resources including iron ore, cement, grain, coal and fertiliser, was down 34 points, or 5.11 percent, at 632 points, the lowest since August 1986. The index is also seen by investors as an indicator of global industrial activity.

Brokers said the dry bulk market was expected remain in the doldrums due to weak commodity demand at present especially from top global importer China.

“Dry bulk remains under pressure across all segments on the back of very thin spot demand,” Omar Nokta of Clarkson Capital Markets, said.

Weak demand for commodities, such as iron ore, has put pressure on smaller, higher-cost producers and this has taken its toll on the dry freight market.

“We believe that despite softer prices/margins, low cost Australian producers will continue to meet targeted production with negative implications for dry bulk tonne-mile demand,” Wells Fargo Securities analyst Michael Webber said, referring to producers such as Rio Tinto and BHP Billiton....MORE

Venture Capital: "Investors Think Business Insider Doubled Its Value in Less Than a Year"

From re/code:
Last March, Jeff Bezos and other investors who put money into Business Insider thought the news site was worth $100 million.

Now they think it’s twice as valuable. Sources say Business Insider’s newest funding round, led by German publisher Axel Springer, pegs the company’s value at $200 million*. Business Insider’s backers invested $25 million in this round, which means the company has raised more than $55 million since 2007.

The company won’t comment on its valuation or financials, but a person familiar with Business Insider said it generated $30 million in revenue last year, up from around $18 million in 2013.

For context: Lots of digital publishers are raising lots of money! Last summer Vice raised $500 million in a round that valued the company at $2.5 billion, and BuzzFeed raised $50 million at an $850 million valuation. Last fall Vox Media raised $46.5 million in a round that valued that company at $380 million. Oh! And Mashable just raised $17 million as well. No word on that valuation.

Business Insider says it will use the new money to grow in the U.S. and internationally. Last year, the company launched a U.K. edition, and people familiar with the company expect it to look at a German version, likely in conjunction with Axel Springer. The German publisher is already in a joint venture with Washington, D.C.-based Politico and plans to launch a European version of Politico this spring....MORE

It's The Internet, Stupid: "The Real Problem with Public Discourse"

For readers too young to remember, "It's the economy, stupid" was a variant of the line Bill Clinton's #1 strategist for the '92 campaign, James Carville, came up with to motivate and focus the campaign's workers.

From Drexel University's The Smart Set:

"the stamp act sux thanks obama"
From Humphrey Ploughjogger to plowjag666
I distinctly remember when I stopped reading online comments about my essays. For some time I had been reading them on a website of a magazine that published me and allowed unedited comments. To my disappointment, no knowledgeable critic had pointed out errors in my work that I could correct, or made informed arguments that forced me to rethink my position. The commenters seemed more interested in insulting one another. 

Mrpoophispants, for example. The avatar that went with the name showed a wailing baby in diapers. (I have changed the name and image slightly, to protect the guilty). In the comments section under my essay, Mrpoophispants accused the Incredible Hulk (again, I have slightly changed the name) of being like Hitler. No, the green and musclebound Hulk told the baby in diapers, you are like Hitler. It went downhill from there.
I remember thinking: Really, who insults people online while hiding behind the screen name of Mrpoophispants? Around that time I had read about the case of a well-respected dentist who was outed as a notorious online troll. (And you wonder what your doctors are doing, while they keep you waiting — they are writing snarky comments about newspaper columnists and TV anchors). I had also read that online commenters are disproportionately middle-aged and elderly men. This information helped me to imagine my online commenter’s alter ego, his Clark Kent or Bruce Wayne:
Bob Anderson, 64, chuckled to himself, as he settled down in his Snuggies behind his computer, having returned from picking up his arthritis meds at the drugstore. A whole afternoon of anonymous online vituperation against famous authors and other online commentators awaited him. And the best thing about it was, nobody in his life — not his parents, his adult children, his grandchildren, not his neighbors nor the members of his church congregation—knew that Bob Anderson, retired accountant, family man, churchgoer and pillar of his suburban community, was really the infamous scourge of the Internet, that dreaded and admired titan among trolls, Mrpoophispants.
I thought of Mrpoophispants when I read Jonathan Chait’s widely-discussed essay for New York magazine, “Not a Very P.C. Thing to Say,” and Glenn Greenwald’s response, “The Petulant Entitlement Syndrome of Journalists.” For what is worth, I think both get a lot right — but they also get some things wrong.
Unlike Chait, I think that public discourse is threatened less by a resurgence of 1990s-style political correctness than by Internet-enabled anonymity (yes, Mrpoophispants, I’m talking about you). Wearing a mask tends to liberate repressed impulses; that was the whole point of Venetian costume ball masks and the white robes and hoods of the Ku Klux Klan. Allowed to hide their identities, progressives, conservatives, and centrists alike are liable to abandon self-restraint and hoot and shriek from the safety of anonymity in an online mob. Anonymity turns the Internet into the Id Net....MORE

A moral case for bank money

From Magic, Maths and Money:
Finance is a skeleton that supports the development of a healthy society, not a utility that plumbs the economy together. The justification for this observation is historical. Richard Seaford has argued that the culture that emerged in Greece some two and a half thousand years ago, creating a unique approach to science and democratic politics, was a consequence of a peculiar Greek invention; money, a token that signifies trust between citizens. The flowering of European culture, and the genesis of modern science, in thirteenth century Europe followed, and some argue was a consequence of, a period of rapid monetisation of society that initiated the end of feudalism. Similarly, western Europe’s development accelerated ahead of the rest of the world in the seventeenth century powered by financial innovations in the Netherlands and Britain.

Charles Mackay in his classic comparison of England’s South Sea Bubble and France’s, almost simultaneous, Mississippi Bubble, emphasises the different reactions in France and Britain to the credit bubbles. In the aftermath of the crises, the French inhibited the development of private banks but maintained the autocratic political system, whereas the British reformed the political system and enabled the development of finance. The results of Britain’s Financial Revolution were Agricultural and Industrial Revolutions along with the eclipse of France as a global power. For France, dependent on taxation to fund the state, there was the ultimate collapse of the political system in bloody revolution.

Getting the structure of our financial system right is not a trivial matter.

One argument gaining support is that the root of recent problems in finance is the private creation of money by banks, and so the solution is to strip banks of this ability. What this would entail is not clear but a core theme is that transactions would involve minted cash (physical or electronic), not paper money. We can visualise the practical consequence of this in little brown envelopes on pay-day containing coins and Bank of England notes. No bank transfers, certainly not in the foreseeable future, meaning no debit cards at the supermarket checkout and the replacement of cyber-crime by good old-fashioned robbery. This makes concrete part of the problem  Martin Wolf identifies when he makes the observation that "The transition to a system in which money creation is separated from financial intermediation would be feasible, albeit complex."   It might prove impossible to get through the Christmas binge, when there is widespread short-term demand for cash.  Could a computer system cope with the funds transfers associated with Black Fridays and Cyber Mondays without the ability to create money? Banks, in this environment, would come to resemble peer-to-peer lending facilitators and the consequence would be that people who have wealth, or are connected to wealthy networks, could buy expensive things, but for the majority it would be harder to get a mortgage.  While this might sound a bit draconian to the British, Germans still have a preference for cash and traditionally live in rented accommodation, having long connected debts (schulden) and guilt (schuld) and, after all, they have done well economically.

Unfortunately it is not certain that German economic success rests on the German preference for cash. An equally plausible explanation is the structure of the German banking system, which, unlike the British and U.S. systems, is not dominated by private profit seeking banks but has a significant sector of not-for-profit, regional, financial institutions. An IMF paper highlights how countries with this type of financial system, including France and Spain, did not require the massive government bailouts that British and U.S. banks did in 2008-2009. Mutuals and public banks create money in the same way as privately owned banks and so preventing banks from creating money seems to be a rather extreme solution when the problem might be elsewhere.

Calls to prevent banks from creating money to ensure financial stability resemble calls to ban the internal combustion engine to prevent climate change. It would clearly go a long way to solving the problem, in theory, but is totally impractical. One group who would like to see the debate on banking reform focus in on money creation are the banks themselves, because they can be confident that if this is where the debate is centred, nothing will change. Most voters need bank credit just as they need cars....MORE

Fed Tells Markets It Will Be A Patient and Gentle Lover, Markets Puke a Little

From Real Time Economics:

7 Takeaways From the January Fed Statement: ‘The Committee Judges That It Can Be Patient’ 
What caught our eye in the Federal Reserve’s January policy statement released Wednesday.

No Rate Hikes Until at Least June as Fed ‘Patient’
Fed officials have reaffirmed their assurance they are likely to remain patient in considering the timing of the first interest rate increase since 2006. That, according to Yellen, means no lifting rates from zero for at least another two policy meetings.—Pedro Nicolaci da Costa

Fed Upgrades its Assessment of Job Gains, Economic Growth
The Fed is feeling a little better about the state of the job market and economic growth more broadly. The statement says economic activity has been expanding at a “solid pace,” versus December’s description of a “moderate pace.” The statement calls recent job gains “strong,” an upgrade from last month’s “solid” job gains. But the Fed also added language about inflation heading lower due to falling energy prices. —Ben Leubsdorf

Fed a Bit More Worried About Inflation Outlook
Fed policy makers still believe U.S. inflation will return to the central bank’s 2% target after dipping further in the near term due to oil’s slump. But their confidence is showing signs of fraying. In particular, the Fed today flags a substantial decline in market-based inflation compensation. In December, they had described those expectations as having fallen “somewhat further.”—Pedro Nicolaci da Costa
...MORE
 
You can probably figure out the time the release came out:

Looking for a Replacement for SkyMall?: Oh Wow Tao Bao

From Tao Bao via the OhWowTaoBao tumblr (once seen, it can't be unseen):




HT: I think it was Mark Andreessen

Smart Talk On Oil Stocks

I'm getting bored with saying "It's Too Early" to mess with oil stocks but if you must have exposure...
From Barron's Stocks to watch:

Chevron & ExxonMobil: Time For Plan B?
Citigroup’s Alastair Syme and team worry that big-oil companies like Chevron (CVX), ExxonMobil (XOM), and ConocoPhillips (COP) might betting too much on a return to higher oil prices. They explain:
Until now the industry’s Plan A to restoring profitability has been to rely on a return to higher oil prices. The industry now looks to be adopting a variant – Plan A-star – which emphasises some capex cuts and cost-control but still with a fundamental view that higher oil prices will come to the rescue. We think investor’s interests will only be achieved if the industry commits to full self-help action – a Plan B – where the underlying principle is that oil prices may not recover any time soon…
Within this context we think the equity market’s focus on Big Oil dividend yield as a valuation tool is an unhealthy obsession. The truth is that dividend cover for the group remains poor (the marginal income investor – the bond investor – we think continues to shy away due to the lack of security) and cutting capex will not pay dividends forever. Getting return-on-equity back above cost-of-equity is paramount. If spot oil prices persist then we think the group needs to push through a minimum of 20% cost-reduction in the E&P business to achieve this....MORE

The Astonishingly Clever Ways the Chinese Launder Money and Move Assets

As long time readers know, I have a morbid fascination with the underbelly of the markets, in all its permutations.
Following up on (and linking to) yesterday's "China Cracks Down on Using Art for Corruption" David Keohane spots the larger story.

And no, we didn't link simply because he gave us the HT, this is quite amazing stuff and if one can figure out how to interposition one's self in the flow, there is money to be made.

As it is, I'll have to wait a couple hours before my ace translator can tell me the Mandarin for "Would you like to come up and see mein Klimt?"

From FT Alphaville:
Remember Roubini going off about the art market in Davos? About how “Whether we like it or not, art is used for tax avoidance and evasion” and “While art looks as if it is all about beauty, as a business it is full of shady stuff”?
Well here are two bits of related Chinese art market shenanigans for you.
The first, from the Epoch Times, is about corrupt officials who peddle their works of calligraphy to disguise bribes (via Climateer and The Art Market Monitor)....

... The second is part of a motley assortment of ways in which dodgy money in China gets moved about. Check out “Hard-to-value assets” about half way down and then realise how art is just a small part of this.
From the ever reliable Anne Stevenson-Yang of JCapital:
In a series of meetings with the anti-money-laundering offices of banks, brokerages, and insurance companies a couple of weeks ago, I learned about the channels through which the big money passes. The business is enormous. Banks and insurers typically flag roughly half of large transactions, over RMB 10 mln, for eyeball review, after which around 10% of all large transactions are reported to the PBOC as potential laundering. Channels for moving the money are astonishingly varied, and household-level transactions, under 10 million RMB, would have a similarly eclectic list. Major takeaways:
  • Insurers: Insurance companies are the biggest channels for money laundering. This is because settlements do not match premium income and therefore become virtually impossible to audit. Likewise, insurance payouts are often directed to inheritors, companies, or other parties who are not the premium payer. Recent liberalization of insurance company capital investment rules abets their participation in large money transfers of all sorts....
...MUCH MORE 

Speaking of Klimts, Here's the one Ronald (Thanks Mom)  Lauder dropped $135 mil. on (NYT), #5 on the world's most expensive paintings list.

Portrait of Adele Bloch-Bauer I (1907)

Wednesday, January 28, 2015

"DoubleLine’s Gundlach is Bullish on Gold"

This is not making me happy.
We know that by the year 2160 gold will be trading hands for pennies, but between now and then...
$1284.60 last.

From Barron's Focus on Funds:
The King of Bonds is buying gold.

Jeffrey Gundlach told attendees at the Inside ETFs conference on Tuesday that he added to his position in the yellow metal in recent weeks amid a “cyclone of major events” unfurling across the globe. Gundlach also said that Treasury bond yields could fall farther in 2015 and that oil prices are likely to remain stubbornly low for the rest of this year.

Gundlach, chief investment officer at $64 billion investment firm DoubleLine Capital, voiced optimism for gold in a sprawling presentation punctuated with nursery-rhyme analogies (pat-a-cake, pat-a-cake = European Central Bank monetary easing).
“Gold remains a safe haven in times of turmoil,” Gundlach said. “People have given up because [it was] boring and painful.”
He added that gold price gains typically are reasonably good at predicting market volatility and quipped gold’s yield (zero) is higher than that of Swiss bonds. Payouts on Swiss government bills recently turned negative.

Gundlach said that the Federal Reserve is likely to raise interest rates this year, but also that uncertainty about the future of the European monetary union will drive demand and suppress yields. That’s a reiteration of what Gundlach told Barron’s in an interview last month. Gundlach was among the only market forecasters to predict that yields would fall in 2014. Still, he cautioned against flip-flopping this late into the bond price move:
“Buying bonds now, when you hated them last year, can only be called performance chasing.”
Fallout from tumbling crude oil prices likely hasn’t manifested everywhere in the U.S. economy yet, Gundlach said, keeping him leery about junk debt in spite of recent price declines...MORE 
See also:
"The Price of Gold in the Year 2160"
Chartology: Silver Just Crossed A Very Important Level (SLV)

We changed direction with the Swisscapades of Jan. 15 in:
Chartology: A Possible Trend Change as Gold Rises Above Its 200-Day Moving Average (GLD)
Following up on my earlier reasoned analysis, "*#$ @! Swiss".
Feb. gold $1262.10 up $27.10....
Here's the recent action via FinViz:

Chartology: Oil Support at $40, $35, $32.50, $27...

This is the Line of Death.


This is the new Line of Death.

From Dragonfly Capital:

The Longer Outlook in ….. Crude Oil
Crude Oil had a log flume like ride lower over the last 7 months. Except that the water at teh bottom has not splashed yet. This has many experts talking about the sustainable price of drilling via fracking and oil sands, as well as the break even cost for many Middle Eastern countries. There are discussions about how the drop is somewhat intentional to stick to Putin and Russia, or how the Saudi’s are trying to reassert themselves on the global energy scene following the US becoming energy independent. Lot of talk. And with every move lower in the black liquid come lower price targets from those same professionals and analysts. Nothing new here.

But for technical analysts talk is cheap. Oh, now all the narratives out there can have some value, but stories do not come with a timestamp and price move. The actual price data has a whole lot more to offer and then chart of Crude Oil below has a lot to say.
crude oil
The first thing that stands out in this chart is the weighted volume at price bars on the left hand side. There was a lot of price history to work through between 85 and 105, and then still large history all the way down to 65/barrel. But since then the price history has hit a pot hole and that pot hole gets deeper until the price reaches 32.50/barrel.

The second thing to notice is that the price has broken the rising 16 year price trend support line, and unless it rises back over 48/barrel by month end (3 trading days as I write, I will revise this section Saturday) will close under it. That would be a major breakdown....MORE

Oxford's Bodleian and the University of Michigan Libraries Release 25,000 Early English (1473-1700) Books to the Internet

Via MetaFilter: 
January 28, 2015 7:12 AM   Subscribe
The University of Michigan Library, the University of Oxford's Bodleian Libraries and ProQuest have made public more than 25,000 manually transcribed texts from 1473-1700 — the first 200 years of the printed book. Full text access. Multiple format downloads, including ePUB. Or just download the entire corpus.

The texts represent a significant portion of the estimated total output of English-language work published during the first two centuries of printing in England.

The release via Creative Commons Public Domain Dedication marks the completion of the first phase in the Early English Books Online-Text Creation Partnership (EEBO-TCP). An anticipated 40,000 additional texts are planned for release into the public domain by the end of the decade.
posted by Bobby Rijndael (17 comments total) 21 users marked this as a favorite
 
Great stuff there! A few nuggets for fans of Sam Pepys.
posted by beagle at 7:23 AM on January 28 [2 favorites
...MORE

Oil Collapse: Build In Inventories Double Estimate; Goldman Says Sell

March WTI $45.25 down 98 cents after trading down to $44.52.
We're going lower.
From ZeroHedge:

Crude Supplies Surge To Highest Since At Least 1982
EIA Inventory build was double expectations at 8.87 million barrels...

With Total Crude Supply at its highest since at least 1982...

*  *  *
Remember how exuberant yesterday's small gains in Crude Oil were perceived to be? Yeah - that's all over, with WTI back near a $44 handle - following a large 12.7 million barrel inventory build according to API (EIA reports the 'main event' at 1030ET today - which Saxo Bank warns "a bigger-than-expected build would likely push the mkt over the cliff edge.") Additional weakness overnight is also likely due to Goldman's shift to a 'sell' for the next 3 months.
...MORE

"As Big Data and AI Take Hold, What Will It Take to Be an Effective Executive?" or Keeping the C-suite With Algos at the Gate

From Irving Wladawsky-Berger:
Big data, powerful analytics and AI are everywhere.  After years of promise and hype, technology is now being applied to activities that not long ago were viewed as the exclusive domain of humans.  Our digital revolution had led to amazing applications, but also to considerable pain for many workers who’ve been experiencing declining employment and wages.  Mid-skill jobs have been particularly threatened.  Many of these jobs, - which include blue-collar production activities as well as information-based white-collar ones, - are based on well understood procedures that can be described by a set of rules that machines can then follow. 

But, what will be the impact of our increasingly intelligent machines on senior management positions?  In principle, such jobs deal with non-routine, cognitive tasks requiring high human skills, including expert problem solving, complex decision-making and sophisticated communications for which there are no rule-based solutions.  “As artificial intelligence takes hold, what will it take to be an effective executive?” asks a recent McKinsey article - Manager and Machine: The new leadership equation.  “What would it take for algorithms to take over the C-suite?  And what will be senior leaders’ most important contributions if they do?” 

After asking these questions to senior managers across a broad range of industries, McKinsey  concluded that two key things need to happen for technology to more deeply transform their jobs.  First, much still needs to be done to create the proper data sets that would enable intelligent computers to assist in decision-making.  Garbage in, garbage out applies as much to data analysis today as it has to computing in general since its early years.  Organizations must have a data-analytics strategy that cuts across internal informational silos and properly incorporates external information sources like social media. 

And most important, senior managers must learn to let go, something which is quite difficult because it runs counter to decades of organizational practices.  Given our rapidly rising oceans of data, the command-and-control approach to management, where information flows up the organization and decisions are made at high levels, would sink the senior executive teams.  As data science and AI permeate the organization, it’s important to delegate more autonomy to the business units that hopefully have the proper skills, the advanced tools and the necessary information to make better decisions on their own.

While difficult, these changes will eventually happen, providing leading-edge companies with a competitive advantage that others will emulate.  But, if top managers do their job, - enabling data-driven decision-making and devolving decision-making authority across the organization, - what will be left for them to do?  “A great deal,” notes the article, suggesting that “ironically enough, executives in the era of brilliant machines will be able to make the biggest difference through the human touch,” including:
Asking questions.  “Asking the right questions of the right people at the right times is a skill set computers lack and may never acquire…  In fact, there’s a case for using an executive’s domain expertise to frame the upfront questions that need asking and then turning the machines loose to answer those questions.  That’s a role for the people with an organization’s strongest judgment: the senior leaders.”
Attacking exceptions.  “An increasingly important element of each leader’s management tool kit is likely to be the ability to attack problematic exceptions vigorously.  Smart machines should get better and better at telling managers when they have a problem…  Executives can therefore spend less time on day-to-day management issues, but when the exception report signals a difficulty, the ability to spring into action will help executives differentiate themselves and the health of their organizations."...
...MORE

"China Cracks Down on Using Art for Corruption"

From Art Market Monitor:
http://1uyxqn3lzdsa2ytyzj1asxmmmpt.wpengine.netdna-cdn.com/wp-content/uploads/2015/01/BN-GN089_maowri_G_20150120030303.jpg
China is getting serious about cracking down on abuses in the art market. One of the government’s official outlets has this story railing against corrupt officials who peddle their works of calligraphy to disguise bribes:

Hu Zhangqing, former deputy governor of southeast Jiangxi Province, was executed in March 2000 on a charge of corruption. In 1998, Hu’s works of calligraphy were sold in the price range between 3,000 yuan and 6,000 yuan (about US$480 to US$961). One of his calligraphy works even had a price tag of 90,000 yuan (about US$14,425), reported state-run People’s Daily on October 2014.

In 2010, during the trial of Wen Qiang, former deputy chief of police in Chongqing in the southwest, one of the biggest debates was over the authenticity of one of the paintings in his possession—said to be the work of Zhang Daqian, considered one of the extraordinary Chinese artists of the twentieth century. If it were authentic, the painting would fetch a market price of 3.64 million yuan (about US$583 thousand)...MORE

"A Warren Buffett Utility Looks to Beat Tax Expiration"

With the new congress in place it's time to start watching for "Political Capitalism" 2015-style.
President Obama has been the best friend Wall Street-and Silicon Valley- ever had. How this trend plays out against the backdrop of a Republican Senate and House should bring us some significant opportunities.

From Roll Call:
Berkshire Hathaway’s Nevada utility company NV Energy is doubling down on efforts to boost its renewable generation resources in order to ensure that projects qualify for tax incentives.

The company announced this week that it would be seeking bids for 200 megawatts of renewable projects within a month, following an order from the Nevada Public Utilities Commission that urged the company to move faster because of uncertainty over incentives like the investment tax credit which will be reduced at the end of 2016. The company originally had requested bids for half that capacity this year with the expectation it would ask for an additional 100 megawatts for next year.

To comply with Nevada’s requirement for utilities to rely on 25 percent renewable energy resources, NV Energy touts 1 gigawatt of capacity from geothermal, solar, hydro facilities and wind facilities as well as biomass, methane and waste-heat recovery projects.

Spanish company Abengoa said last week it could not move forward with a solar project in California without greater certainty about the investment tax credit.
And remember, There was a reason for the choice of the first winner of the Climateer "Our Hero" award back in April 2007:
The 26th Secretary of War, the Democrat and Republican (!) Senator from Pennsylvania, Simon Cameron:
Our Hero
Simon Cameron
"The honest politician is one who 
when he is bought, will stay bought."

Robbing ATM's The British Way

From Bloomberg:
Boom
No American ATM has ever been robbed with explosive gas. The same was true in Britain — until 2013. Now there have been more than 90. Inside the birth of a bomb spree.
Along the western coast of England, under a half-moon hidden by clouds, a dark Audi sports car with fabricated plates followed an empty road toward a Barclays bank. Inside were five men, dressed all in black, and their gear: crowbars, power tools, coils of flexible tubing, and two large tanks of explosive gas. It was 1:51 a.m. The job would take just under seven minutes.

This particular Barclays was just waiting to be robbed. Located at the rear of a shopping mall in a town called Birchwood, it was secluded from the street by 300 feet of parking lot and faced a creek, a railway, and acres of cropland. Early on this Friday in September 2013, the area was deserted, and the walk-up ATM glowing Barclays blue onto the brick forecourt was likely filled with cash for the weekend crowds. For six months, the gang had been targeting cash machines across a 150-mile swath of the country, from Oxford to Liverpool, with a technique never before used in the U.K.
Two men exited the Audi, balaclavas covering their faces, and with professional calm attacked the face of the machine. One pried open the cash slot with a 3-foot gorilla bar, then worked it like a lever, hopping up and down with a two-handed grip. A third man knelt to assist, a fourth stood watch, and the fifth remained behind the wheel of the car, idling at a short distance behind a perimeter of security bollards. After several minutes one of the team walked up trailing a wire and two lengths of hose, which he fed a short distance into the ATM, as a doctor might intubate a patient’s mouth. The hoses carried oxygen and acetylene, and the men took cover as the gases began to mix in the pit of the machine.

The strongbox inside an ATM has two essential holes: a small slot in front that spits out bills to customers and a big door in back through which employees load reams of cash in large cassettes. Criminals have learned to see this simple enclosure as a physics problem. Gas is pumped in, and when it’s detonated, the weakest part—the large hinged door—is forced open. After an ATM blast, thieves force their way into the bank itself, where the now gaping rear of the cash machine is either exposed in the lobby or inside a trivially secured room. Set off with skill, the shock wave leaves the money neatly stacked, sometimes with a whiff of the distinctive acetylene odor of garlic.

In Birchwood, the oxyacetylene bomb exploded immaculately at 1:57 a.m.—a single concussive thunderclap that sent a minimum of dust and debris raining onto the sidewalk. Only now did the men hustle. Smashing a low window to the left of the ruined ATM, they crawled inside with more tools, shoved the cash into a black duffel, and exited on their hands and knees. One gently helped another to his feet, and the Audi made a neat three-point turn to begin their getaway. Details of the heist, and other events in this story, come from security camera footage, police files, court records, and interviews with investigators, prosecutors, bank representatives, security experts, and defense lawyers.

The ATM bombers were getting better, bolder, and bigger. The Birchwood heist was their 28th in the U.K.—and No. 27 had gone down just minutes earlier in Wirral, 40 miles west, carried out by a second team of five. The combined take of almost £250,000, or about $375,000, was the group’s biggest score in a single night yet. Their MO, using cheap, common, and legal gas, was nearly impossible to trace, and they left precious little forensic evidence for the police. To stop the rampage, there was little Britain’s banks could do....MUCH MORE

Tuesday, January 27, 2015

What It Takes to Make the Top 1% of Incomes In Each State

From Vox:
This is how much you need to earn to join your state's top 1 percent
It takes around $385,000 of annual income to get into the US's top 1 percent. But if you really want to count yourself among the 1 percent in some way, you could always move to Arkansas. There, it takes only $228,000.

new report from the left-leaning Economic Policy Institute illustrates what inequality looks like from state to state. Perhaps not surprisingly, it takes a lot to get into the top 1 percent in the area near Wall Street — Connecticut has the highest bar to getting into the top, at $678,000. New York and New Jersey are close behind. 

Here's what it takes to be in the top 1 percent in your state:
Inequality by state
(Economic Policy Institute)

...MORE

Polish Swiss-Franc Mortgages May Sink Austrian Bank

Following up on "Poland To Help Holders Of Swiss Franc Denominated Mortgages".

From ZeroHedge:

The Bonds Of The Third Largest Austrian Bank Are Crashing
Last year Austria's largest bank, Erste Bank, sent shudders of Credit Anstalt through the European Banking System. This year it is Austria's 3rd largest bank that is scaring investors senseless. On the heels of the Swiss National Bank's decision to un-peg from the Euro, Raiffeisen Bank's Swiss-Franc-Denominated mortgage worries have resurfaced (along with Russian/Ukraine writedowns) and nowhere is that more evident than the total collapse of the bank's bonds (from over 95c to 65c today). Even after the ECB Q€ (and some apparent intervention to weaken the Swissy) bonds kept free-falling. Perhaps, The Freedom Party's demands for a bailout will grow louder as the contagion concerns across Europe's banking system explode...
RAFI bonds are collapsing...

As Bloomberg reports, Raiffeisen had a total of 4.3 billion euros of Swiss franc loans outstanding as of September 2014, according to estimates by Moody’s Investors Service.
The largest part of these are in Poland, where the franc has appreciated 17 percent against the zloty since Jan. 14, threatening to push up defaults on the bank’s 2.9 billion euros of mortgages in the Swiss currency.

“There’s a lot of people worried about the bank’s Swiss-franc mortgages in eastern Europe,” said Gregory Turnbull Schwartz, who helps oversee the equivalent of about $82 billion at Kames Capital in Edinburgh and doesn’t hold Raiffeisen bonds....
...MORE

The collapse of Credit Anstaldt  brought on the second, nastier, phase of the Great Depression. From a pre-bull market post:
Feb. 16, 2009:
Creditanstalt Redux?: Failure to save East Europe will lead to worldwide meltdown

I've been feeling far too chipper so I decided to check in with Ambrose Evans-Pritchard. Yikes.
From the Telegraph:
The unfolding debt drama in Russia, Ukraine, and the EU states of Eastern Europe has reached acute danger point.
If mishandled by the world policy establishment, this debacle is big enough to shatter the fragile banking systems of Western Europe and set off round two of our financial Götterdämmerung....
Well, other than that Generalfeldmarschall Paulus, how's the weather?
Creditanstalt
failed in May 1931. From Kindleberger's "World in Depression: 1929-1939":
In 1929, the Bodenkreditanstalt was fused overnight with the Creditanstalt. The Bodenkreditanstalt brought to the Creditanstalt large loans to industrial concerns which could be maintained only by the device of ignoring market values...
Hmmm, sounds familiar.
Unicredit now owns Creditanstalt.
After the rescue of the bankrupt corpus and a couple mergers CA became part of Italy's Unicredit in 2006....

Online Food Delivery Is A Thing (sorry Webvan): China Co. Raises $350 Million from CITIC PE, Tencent, JD.com, Others

From PE Hub:
Chinese online food delivery service Ele.me said on Tuesday it has raised $350 million from investors including CITIC Private Equity, Tencent Holdings Ltd (0700.HK), JD.com Inc (JD.O), Dianping and Sequoia Capital.

The delivery firm, whose name roughly translates as ‘Hungry Now?’, is part of a trend in China for what is known as online-to-offline (O2O) services. These include taxi hailing and restaurant review apps that link smartphone users with offline businesses.

Ele.me said it would continue to operate independently after the fundraising round. It declined to disclose its current valuation.

As more Chinese use their phones for everything from shopping to booking restaurants, China’s internet giants Alibaba (BABA.N), Tencent and Baidu Inc (BIDU.O) are increasingly investing these services to attract more users to their own platforms....MORE
Previously:
Grocery Delivery Service Instacart Raises $220 Million
"The Biggest European Venture Capital Rounds Ever" (we just saw one)
Where does the $350 million raised by Berlin-based online food-delivery company Delivery Hero rank among the top venture deals ever for a Europe-based company?
As it turns out, it was the biggest in years....