Monday, December 22, 2014

Gold & Silver Tumble As USDJPY Hits 120 and Hitler Gets a Margin Call

Mare and more it's looking as though the mid-October guess* was accurate.
$1174.70 last. Here's the recent action via FinViz:
From ZeroHedge:
Despite stocks ignoring the momentum ignition efforts, USDJPy just briefly broke 120 once again. That appears to have been the flash signal for 'someone' to dump vast quantities of precious metals in the futures markets... "unrigged"
USDJPY insta-smashed to 120 and backed off...MORE
Also at ZH:
Bloomberg's Commodity Index Drops To Lowest Since 2009: What Does It Mean?

* "Gold: Huh. It Looks Like $1240 WAS the Top For This Go-round"

And from 2008:

"Coming soon: Forget the Sony hack, this could be the biggest cyber attack yet"

Oh my fargin'...
From Quartz:
...But according to cyber-security professionals, the Sony hack may be a prelude to a cyber attack on US infrastructure that could occur in 2015, as a result of a very different, self-inflicted document dump from the Department of Homeland Security in July.

2015: The year of Aurora?
Here’s the background: On July 3, DHS, which plays “key role” in responding to cyber-attacks on the nation, replied to a Freedom of Information Act (FOIA) request on a malware attack on Google called “Operation Aurora.”

Unfortunately, as Threatpost writer Dennis Fisher reportsDHS officials made a grave error in their response. DHSreleased more than 800 pages of documents related not to Operation Aurora but rather the Aurora Project, a 2007 research effort led by Idaho National Laboratory demonstrating how easy it was to hack elements in power and water systems.


The Aurora Project exposed a vulnerability common to many electrical generators, water pumps and other pieces of infrastructure, wherein an attacker remotely opens and closes key circuit breakers, throwing the machine’s rotating parts out of synchronization causing parts of the system to break down....MUCH MORE

Something Very Odd Is Going On In the Arctic

No, not Santa.

Alphaville's Izabella Kaminska linked to an interesting story in this morning's Further Reading post.
From The Guardian:
Hopeful holiday skiers pray for snow as Alps resorts feel the effects of warmer weather 
Lift pass prices are slashed as weather forecasters warn that there’s more sun to come on the pistes 
Head high or stay at home and, if you go, definitely wear a helmet. That is the message for skiers looking to hit the slopes this week after one of the worst starts to a season in living memory.

As many of Europe’s leading ski resorts scramble to lure in skiers over the all-important Christmas period, there are fears some operators could be in grave financial difficulties if, as meteorologists suggest, the current lack of snow persists.

Hopes that the poor start was coming to an end were dashed after a snowfall across much of the Alps last Wednesday petered out. Now forecasters are predicting several days of sun across many European resorts, according to the Ski Club of Great Britain (SCGB)....MORE
The reason I found it interesting was the shape of the Daily Mean Temperatures in the Arctic (north of 80° N latitude) chart from the Danish Meteorological Institute:

You'll note that in the depths of Arctic winter -days 0-100 and 300-present- temps averaged over 5° Kelvin above the 40-year average but because this occurred at a time when temps are below freezing anyway, and because during the melt season, days 160-240 temps were below average, the net result is that current arctic sea ice extent is at a ten year high (also from the DMI):

Now the question becomes: "Does the expanded sea ice cause the the warmth we're seeing in Switzerland?"
I don't know.
More to come

"Adam Smith on Speculation as Witchcraft" (now with Voodoo Beach Bunnies)

A repost from March, 2012.
Original post:
I've had a few rambles on the topic, link below.
[rambling? you? -ed]
From Streetwise Professor:
In a post earlier this evening, I said that anti-speculation frenzies dated from the 19th century.  But they in fact date back much further. In Book IV, Ch. 5 of Wealth of Nations, Adam Smith analyzed the irrational attacks on commodity speculation:
The popular fear of engrossing and forestalling [types of speculative activity outlawed in England] may be compared to the popular terrors and suspicions of witchcraft. The unfortunate wretches accused of this latter crime were not more innocent of the misfortunes imputed to them than those who have been accused of the former....MORE
HT: FT Alphaville

From "This is What a Bear Market Looks Like Folks (now with Voodoo Beach Bunnies)":
One etymology of the word speculation:
c.1374, "contemplation, consideration," from O.Fr. speculation, from L.L. speculationem (nom. speculatio) "contemplation, observation," from L. speculatus, pp. of speculari "observe," from specere "to look at, view" (see scope (1)). Disparaging sense of "mere conjecture" is recorded from 1575. Meaning "buying and selling in search of profit from rise and fall of market value" is recorded from 1774; short form spec is attested from 1794. Speculator in the financial sense is first recorded 1778. Speculate is a 1599 back-formation.
That is not the etymology grandmother taught me. Hers had to do with Italian merchants keeping watchtowers manned to spot sails over the horizon, enabling those who could see furthest to sell off inventory before goods-ladened ships made harbor and crashed the market. More like this etymology at Wictionary:
From Latin speculātus, past participle of speculor (look out), from specula (watchtower), from specio (look at)
Either way, the current market does not lend itself to either contemplation or seeing over the horizon....
If you are curious about the Voodoo Beach Bunnies I was answering the question posed in "Death of the American Dream? (nah)":

What can I say, it was the 80's.

It's Been a Lousy Year For Solar Stocks (FSLR; TAN)

They're going lower so we'll stick with the comments from early November:
The only part of solar we're interested in at the moment is the financing and even this offers lower expected returns than, say, shorting shiny rocks....
Here's the largest U.S. domiciled solar company, First Solar down 17.59% year-to-date:

And the Guggenheim Solar ETF, down a less brutal 2.76% ytd:
The headline at Yahoo Finance is pretty funny:
Solar stocks sucking wind, why you should steer clear
because the writer conflates the crash in oil prices with the decline in solar stocks even though there is no overlap in their markets and almost no substitution of one for the other.

Mixing-up stuff just because their output can be measured in BTU's or joules or whatever really can be amusing especially if you recall that SunEdison's big news in November was that they were getting into wind:
Solar: SunEdison Saves the Day (SUNE; FSLR; TSL; TAN)

Here's the Yahoo story:
As consumers cheer cheaper oil prices, the perceived need for so-called alternative energy has become less urgent and so has the desire to own those stocks. “People are going to run from solar.” observes Jon Najarian, co-founder, of OptionMonster and Yahoo Finance Contributor.
Some investors already have. Shares of First Solar (FSLR) are down more than 18% this year and SunPower (SPWR) nearly 15%. SolarCity (SCTY) shares have faired better, falling just 5%. This month the company secured $400 million in financing from Bank of America (BAC) to fund residential projects. Elon Musk, best known as Tesla’s (TSLA) CEO, is also chairman of SolarCity.

As oil becomes more affordable, Najarian thinks the solar industry may be facing fewer government subsides. “There is a direct correlation with crude, I believe, and that kind of energy. Without government subsidies increasing a lot of those companies are going to be in trouble.”...MORE
The solars are going lower but not because of oil.

FSLR   44.11 Down 0.92
SPWR 25.57 Down 0.18
TAN    34.03 Down 0.18 

Watch the Chinese stocks, Trina or Canadian Solar for example, for signs of a turn.
TSL      8.26 Up 0.17
CSIQ  21.81 down 0.10

Natural Gas Hits Two Year Low (CHK; APC)

Sometimes you get lucky.
On Friday it was just a casual comment:
UPDATED--Natural gas: EIA Weekly Supply/Demand Report
While some desks are betting on a cold snap around the New Year it looks as though supply has the upper hand unless there is one heck of a cold snap. $3.598 down 0.044....
Repeated in that afternoon's "Natural Gas Futures Drop to Lowest Point in Over a Year":
Most active (Jan.) $3.481 down 0.161 (4.42%); low 3.464....
The country's largest independent gas producer, Chesapeake, is down 6.70%, the Revere natural gas ETF is down 4.07%, and front month futures are down 8.14% on the day and 12% since Friday.
Here's the hourly chart for the last two weeks from FinViz:
From the Wall Street Journal:
Natural Gas Slides to Nearly Two-Year Low on Slow Stockpile Drain
Natural gas prices fell to nearly a two-year low Monday as a slow stockpile drain eases investors’ concerns about supply shortages during the winter heating season.

Natural gas for January delivery was down 33.1 cents, or 9.5%, at $3.133 a million British thermal units on the New York Mercantile Exchange. It was the biggest one-day percentage loss since February, and the lowest intraday price since January 2013.

The contract slid about 10 cents as soon as electronic trading opened Sunday evening, but losses have continued throughout the morning.

Prices are now down more than 15% in three straight losing sessions. Natural gas has moved into a bear market during that streak and is down 30% from the six-month high closing price of $4.489/mmBtu it hit just a month ago.

Weather has been unseasonably warm for December, limiting demand for home heating and allowing relatively low stockpiles to catch up to where they were a year ago. That has encouraged the belief that supply is relatively healthy and emboldened traders to sell, even with meteorologists predicting a colder-than-normal January and February are on the way....MORE

On Futurology and Strategic Planning


The Official Dilbert Website featuring Scott Adams Dilbert strips, animations and more

"The Greatest Tax Story Ever Told"

From Bloomberg:
The only operetta ever written about Subpart F of the Internal Revenue Code made its debut on a rainy Sunday evening in May 1990, in a Fifth Avenue apartment overlooking Central Park. In bow ties and spring blazers, partners of the law firm of Davis Polk & Wardwell dined on lobster prepared by a Milanese chef. Then everyone gathered around a piano, and a pair of professional opera singers, joined by the few Davis Polk men who could carry a tune, performed what sounded like a collaboration of Gilbert & Sullivan and Ernst & Young.

The 13-minute operetta, Charlie’s Lament, told how the party’s host, John Carroll Jr., invented a whole category of corporate tax avoidance and successfully defended it in a fight with the Internal Revenue Service. The lawyers sang:
The Feds may be screaming,
But we all are beaming
’Cause we’ll never pay taxes,
We’ll never pay taxes,
Never pay taxes again!
The first corporate “inversion,” as Carroll’s maneuver came to be known, was obscure then and is all but forgotten now. Yet at least 45 companies have followed the lead of Carroll’s client, New Orleans-based construction company McDermott International (MDR), and shifted their legal addresses to low-tax foreign nations. Total corporate savings so far: at least $9.8 billion—money that otherwise would have gone to the U.S. government.

This year, inversions have received more attention than ever, as well-known companies such as Burger King (QSR:CN) and Pfizer (PFE) announced plans to change their addresses. (Pfizer didn’t follow through.) In July, President Obama called the practice an “unpatriotic tax loophole” and urged Congress to put a stop to it. In September, the Department of the Treasury tightened regulations to discourage the deals. “My attitude is, I don’t care if it’s legal,” Obama said in July. “It’s wrong.”...MORE
HT: FT Alphaville's First FT column, Dec. 19, 2014.

"Roubini’s Unsettling Scenarios: Five Faces of Doom"

We continue to believe it's a bull market for the larger universe of equities but saw enough gloating, from folks who should know better, at the most recent downturn and v-shaped recovery* that we're starting to believe we may be beyond complacency and are approaching hubris. We will be dancing a bit closer to the fire door even as the band plays on.
From Barron's:

Nouriel Roubini, the economist who foresaw the housing bubble, has published a report highlighting potential economic dangers for 2015.
Dr. Gloom: The economist who foresaw the housing bubble is focusing on economic dangers for 2015. Illustration: William Waitzman for Barron's
Dr. Doom is at it again. Nouriel Roubini, the New York University economist who foresaw the housing bubble that triggered the financial crisis, has published a special report highlighting what he sees as the five serious economic dangers for 2015 and beyond.

The report comes amid the launch of a Website, called Roubini’s Edge, that offers a free economic newsletter. Although Roubini worries about the eventual risk of asset and credit bubbles in another few years, at the moment, he says, “There’s lots of geopolitical risk of contagion that is more economic rather than financial.”
According to Roubini, Europe is facing the prospect of a triple-dip recession, with anti-euro sentiments rumbling through Greece, Italy, Spain, and even Germany. Because of the euro zone’s size, such a development would be more damaging than Japan’s lost decade....MORE
*5.1% in seven trading days. Jason Zweig at the WSJ called it the Petro Panic.

JP Morgan: "Texas Could Be Headed for an Oil-Fueled Recession"

From Economic Policy Journal:
“As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession,” Michael Feroli,  J.P. Morgan Chase’s chief U.S. economist, said in a note to clients.

Texas has seen strong growth in recent years, outpacing the U.S. recovery in part thanks to a boom in domestic oil production. The state’s unemployment rate in October was 5.1%, below the national rate of 5.8%, according to the Labor Department. Gross domestic product in Texas expanded 6.9% in 2012 and 3.7% in 2013, beating national GDP growth of 2.5% and 1.8% respectively, according to the Commerce Department....MORE

Sunday, December 21, 2014

Scots Dodge Bullet: "North Sea oil industry 'close to collapse'"

I believe the first part of the headline came from a Financial Times reader/commenter but I can't locate the story.
From the BBC:
The UK's oil industry is in "crisis" as prices drop, a senior industry leader has told the BBC.
Oil companies and service providers are cutting staff and investment to save money.

Robin Allan, chairman of the independent explorers' association Brindex, told the BBC that the industry was "close to collapse".

Almost no new projects in the North Sea are profitable with oil below $60 a barrel, he claims.
'Everyone is retreating'
"It's almost impossible to make money at these oil prices", Mr Allan, who is a director of Premier Oil in addition to chairing Brindex, told the BBC. "It's a huge crisis."

"This has happened before, and the industry adapts, but the adaptation is one of slashing people, slashing projects and reducing costs wherever possible, and that's painful for our staff, painful for companies and painful for the country.

"It's close to collapse. In terms of new investments - there will be none, everyone is retreating, people are being laid off at most companies this week and in the coming weeks. Budgets for 2015 are being cut by everyone."

Mr Allan said many of the job cuts across the industry would not have been publicly announced. Oil workers are often employed as contractors, which are easier for employers to cut....MORE

"Saudi Arabia says won't cut oil output"

From Reuters:

(Reuters) - Saudi Arabia said on Sunday it would not cut output to prop up oil markets even if non-OPEC nations did so, in one of the toughest signals yet that the world's top petroleum exporter plans to ride out the market's biggest slump in years.

Referring to countries outside of the Organization of the Petroleum Exporting Countries (OPEC), Saudi Oil Minister Ali al-Naimi told reporters: "If they want to cut production they are welcome: We are not going to cut, certainly Saudi Arabia is not going to cut."

He added he was "100 percent not pleased" with prices but they would improve, although it was unclear when. 

He blamed the fall in prices to half their levels of six months ago on speculators and what he called a lack of cooperation from non-OPEC producers.

His remarks at a conference in Abu Dhabi marked the second time in three days that the kingdom has signaled that it would not alter output levels, preferring to allow the market to stabilize on its own.

The determined tone of his comments was echoed by some other Arab oil ministers at the conference in the United Arab Emirates (UAE) capital.

UAE Oil Minister Suhail Bin Mohammed al-Mazroui urged all of the world's producers not to raise their oil output next year, saying this would quickly steady prices. He did not elaborate.

The world is forecast to need less OPEC oil in 2015 because of a rising supply of U.S. shale oil and other competing sources, with no significant increase in world demand growth....MORE

HT: ZeroHedge

Spaceweather: After Today's Hit From the Coronal Mass Ejection, 40% Chance of X-Class Solar Flares

From SolarHam:
CME Impact
Earth based Magnetometers reacted to an incoming coronal mass ejection around 19:15 UTC, initially first observed by the ACE spacecraft at 18:24 UTC. Although the solar wind increase to near 460 km/s is not all that impressive, characteristics of the interplanetary magnetic field (IMF) carried within it could still help enhance geomagnetic activity. The Bz component of the IMF is currently pointing south. Sky watchers at high latitudes should remain alert once it is dark outside. More details to follow if necessary.

And from SpaceWeather:
CME IMPACT: As expected, a coronal mass ejection (CME) hit Earth's magnetic field on Dec. 21st at approximately 1900 UT. The impact does not appear to be particularly strong. Nevertheless, polar geomagnetic storms are possible in the hours ahead. Aurora alerts: text, voice

X-FLARE (UPDATED): Big sunspot AR2242 erupted on Saturday, Dec. 20th @ 00:27 UT, producing an intense X1.8-class solar flare. NASA's Solar Dynamics Observatory captured the explosion's extreme ultraviolet flash:...
NOAA Forecasts
Updated at: 2014 Dec 20 2200 UTC
0-24 hr
24-48 hr
85 %
85 %
40 %
40 %
Geomagnetic Storms:
Probabilities for significant disturbances in Earth's magnetic field are given for three activity levels: active, minor storm, severe storm

A Look Inside the International Tinsel Cartel

Making OPEC and DeBeers look like glee clubs, the tinsel trade maintains a brutal price discipline that would be the envy of the Sinaloa or the Worldwide Parsley Producers cartels.
From Popular Science:

The Innovative Chemistry Of Tinsel
Plus, tinsel experiments you can perform at home
Have you ever wondered what tinsel is made of? Me, neither.

But at one time, it was a big deal. Until 1972, many mass-produced tinsels were made using lead, Chemical & Engineering News reports. The U.S. Food & Drug Administration put a stop to that, for obvious reasons. Yet lead-based tinsel was so beloved, the FDA didn't publicize the change at first.

"The decision was made internally not to publicize it because we feared that many people preferring the lead variety would stockpile it," Malcom Jensen, then the FDA's director of product safety, told the Associated Press in November 1972.

Chemical & Engineering News has a great history of the chemical makeup of tinsel. The site includes details about real gold and silver tinsels, flammable tinsel (that was an unintentional side effect), and tinsel patents. We would have never guessed the cheap, sparkly stuff was once such a focus of chemical innovation. But then we searched our own archives and found many, many references to tinsel, often for home experiments. Some highlights:

September 1892: Attach tinsel to the ends of a tuning fork to visualize the fork's vibrations. This experiment is just one of 120 designed to teach people about the physics of sound.
In the same issue, the magazine published a 14-page story about mica, a silicate material that creates shiny flecks in granite and other rocks. "Considerable amounts" of mined mica go into Christmas cards and tinsel, the magazine reports.

September 1924: "Fine threads of spun glass, as is used for sparkling tinsel on Christmas trees, are being made into wigs for women by a newly discovered process, which may set a new style." There's no further explanation....MORE
From the linked Chemical & Engineering News story:

What Is Tinsel Made Of, And How Has It Changed Over The Years?
From silver to lead to plastic, this Christmas decoration has evolved with the times
South Philadelphia takes tinsel seriously. You won’t find artisanal pine-cone garlands in this neighborhood. The tinsel here is locally sourced from Brite Star Manufacturing Co., a family-owned business that is one of the only remaining U.S. producers of the shiny stuff. Lest you think that decking your halls with tinsel is passé, third-generation Yuletide purveyor Judy Kinderman says her family’s company has been doing brisk business since the Great Recession. “Whenever there’s an economic downturn,” she says, “people turn to less expensive ways to decorate.”...MORE

What Happens When Your Smart Phone Tells Your Auto Insurer Everything? (AAPL; GOOG)

From the Chicago Tribune, Dec. 5:
Car insurance industry, meet potential disrupters Google and Apple.

Currently, nearly all mainstream insurers that offer driver-monitoring programs use relatively expensive devices that plug into a portal under the dashboard.

Usage-based insurance programs, also called telematics, are a small but growing segment of the auto insurance business.

Developing Android and iPhone smartphone apps, in contrast, would cut carriers' upfront costs when they offer telematics insurance programs, which track policyholder habits such as mileage and braking in exchange for potential savings on insurance.

The prospect of smartphones becoming the central nervous system of usage-based insurance could disrupt the property and casualty industry, which historically has gathered its own loss data and kept that information in-house.
Google and Apple also have other advantages, including being ubiquitous in the lives of many consumers and having been accepted as big data collectors.

"Because of what Google and Apple can do, they are in the position to gather so much data, and that data may be more insightful than traditional variables," such as credit scoring and motor vehicle records, said Sandeep Puri, a Deloitte consulting director and co-founder of D-rive, the firm's auto insurance telematics business. He offered his insights while participating in a Telematics Update panel discussion titled "Big Impact Disrupters Enter the Market" in Chicago.

The balance of power in driver-monitoring programs could shift to Google and Apple if smartphones catch on as usage-based insurance policies, Puri and other speakers at the event suggested.

They also raised questions such as: What happens when, say, Google has the data about losses to insurers? Does it charge insurers for it?...MORE

Saturday, December 20, 2014

"The Dominant Life Form in the Cosmos Is Probably Superintelligent Robots"

From Motherboard:
If and when we finally encounter aliens, they probably won’t look like little green men, or spiny insectoids. It’s likely they won’t be biological creatures at all, but rather, advanced robots that outstrip our intelligence in every conceivable way. While scores of philosophers, scientists and futurists have prophesied the rise of artificial intelligence and the impending singularity, most have restricted their predictions to Earth. Fewer thinkers—outside the realm of science fiction, that is—have considered the notion that artificial intelligence is already out there, and has been for eons.

Susan Schneider, a professor of philosophy at the University of Connecticut, is one who has. She joins a handful of astronomers, including Seth Shostak, director of NASA’s Search for Extraterrestrial Intelligence, or SETI, program, NASA Astrobiologist Paul Davies, and Library of Congress Chair in Astrobiology Stephen Dick in espousing the view that the dominant intelligence in the cosmos is probably artificial. In her paper “Alien Minds," written for a forthcoming NASA publication, Schneider describes why alien life forms are likely to be synthetic, and how such creatures might think.

“Most people have an iconic idea of aliens as these biological creatures, but that doesn’t make any sense from a timescale argument,” Shostak told me. “I’ve bet dozens of astronomers coffee that if we pick up an alien signal, it’ll be artificial life.”

With the latest updates from NASA’s Kepler mission showing potentially habitable worlds strewn across the galaxy, it’s becoming harder and harder to assert that we’re alone in the universe. And if and when we do encounter intelligent life forms, we’ll want to communicate with them, which means we’ll need some basis for understanding their cognition. But for the vast majority of astrobiologists who study single-celled life, alien intelligence isn’t on the radar.

“If you asked me to bring together a panel of folks who have given the subject much thought, I would be hard pressed,” said Shostak. “Some think about communication strategies, of course. But few consider the nature of alien intelligence.”

Schneider’s paper is among the first to tackle the subject....MORE

California Drought Improving Dramatically with Third Storm System This Month

You probably saw the headlines: "11 trillion gallons of rain still needed to end California drought".
The geek denizens of Slashdot did the math for us: 
11 Trillion Gallons of Water Needed To End California Drought
It is about 10cm or 4 inches spread over the entire state.
There are 264 gallons per cubic meter. So 11 trillion gallons is 4.16e10 m^3. California has an area of 424,000 km^2, or 4.24e11 m^2. So divide the volume by the area, and you get the depth = 4.16e10/4.24e11 = 0.098 m or 9.8 cm or about 4 inches.
From Reuters:
California's winter storms spark hope for recovery from three-year drought

The wet weather that has soaked California for the past few weeks may be a sign that the state is beginning to pull out of its devastating three-year drought, climate experts said on Friday.

With precipitation already higher than normal for this time of year and rain in the northern part of the state on Friday, experts are "cautiously optimistic" that the dry cycle may be starting to ease, said Courtney Obergfell, a meteorologist with the National Weather Service in Sacramento.

Part of the reason is that a weather pattern that had blocked storms from reaching California since the winter of 2012-2013, dubbed the "ridiculously resilient ridge," by meteorologists, has dissipated.

"We're seeing periods where storms can make their way into California," Obergfell said.

Rain was forecast for the northern part of the state throughout the day on Friday, with showers continuing into Saturday, Obergfell said. Another storm system could bring more rain starting Christmas Eve, she said....MUCH MORE

Always remember: "California: The Last 200 Years Were The Happy Time For Weather, Get Ready For A Return to The West Without Water". 

Dec. 17
Some Improvement In the California Drought
Dec. 11
Big Storm For San Francisco Means Uber Jacks Prices to Highest Ever
Dec. 10
El Niño: "The ARkStorm Scenario Could Flood California's Central Valley like a Bathtub and Cost $725 Billion"

See also:
Straight Talk on Weather and Climate: "Will California's Drought Bring About $7 Broccoli?"
Two quick points:
1) The Great American Desert was called that for a reason. The weather of the U.S. over the last 150 years is an anomaly in the longer history.
2) The subsidization of row crops, corn in particular, is a political decision that severely distorts investment and thus nutrition outcomes....
Finally, a graphic representation from the U.S. Drought Monitor maintained by the University of Nebraska-Lincoln and the National Drought Mitigation Center:

Friday, December 19, 2014

Farmland Price Index Down For 13th Month In a Row

From Agrimoney:

Crop price weakness blamed for sliding farmland prices
The drop in land prices in Iowa, the top US corn and soybean growing state, identified by university research may be more widespread, another survey has revealed, showing drops in other major agricultural states too.
Creighton University said that a farmland price index it updates monthly had shown value falls for a 13th successive month, coming in with a figure of 38.6 for December.
While above November's 30.0 reading, it remained below the 50.0 level which indicates a flat market.
The reading reflected "much weaker crop prices", which "continue to take the air out of the bubble in agricultural land prices", said Ernie Goss, the Creighton economics professor in charge of the survey, which showed prices falling in a range of states, including Iowa, Kansas and Nebraska.
However, a few states, notably Missouri and North Dakota, had escaped the downward trend, and were showing accelerating price growth, the data showed.
'We have seen a peak'
The Creighton data followed hours after Iowa State University estimated average farm prices in the state falling by 8.9% to $7,943 an acre this year – the biggest decline since 1986.
Iowa State University also attributed the drop in state values, only the fourth annual decline since the 1982-86 US land price crash, to lower crop prices....MORE

"Natural Gas Futures Drop to Lowest Point in Over a Year"

Most active (Jan.) $3.481 down 0.161 (4.42%); low 3.464.
From the Wall Street Journal:

Booming U.S. Production Creates Surplus
Natural gas futures fell to their lowest price in over a year on Friday in the wake of data showing the U.S. is beginning to develop a surplus of the fuel thanks to soaring domestic production.

In the selloff, the market looked past forecasts for a return to more normal winter temperatures in the coming days, with a cold blast expected to settle over much of the U.S. heading into the new year. This could boost demand for natural gas to heat homes and businesses.

Natural gas for January delivery was down more than 9 cents, or 3.5%, at $3.5513 a million British thermal units, its lowest point since Nov. 14, 2013. The selloff extended Thursday’s loss and put the futures in bear market territory after losing roughly 20% in the last month.

Though the U.S. has begun to draw on natural gas supplies for fall and winter heating needs, continued booming production from shale fields is helping to replenish supplies. As a result, withdrawals have been running less than average....MORE

Natural gas: EIA Weekly Supply/Demand Report 
While some desks are betting on a cold snap around the New Year it looks as though supply has the upper hand unless there is one heck of a cold snap. $3.598 down 0.044....

Oaktree's Howard Marks: "The Lessons Of Oil"

Following up on "Oaktree's Howard Marks On Lessons From the Oil Crash, Russian Crisis".

From ValueWalk:

Howard Marks Latest Memo: The Lessons Of Oil
Howard Marks Latest Memo, which he recently mentioned he was working on. Contains a shoutout to Jeff Gundlach, behavioral finance, and all the latest good stuff.
Check it out below:
I want to provide a memo on this topic before I – and hopefully many of my readers – head out for year- end holidays. I’ll be writing not with regard to the right price for oil – about which I certainly have no unique insight – but rather, as indicated by the title, about what we can learn from recent experience.

Despite my protestations that I don’t know any more than others about future macro events – andthus that my opinions on the macro are unlikely to help anyone achieve above average .performance – people insist on asking me about the future. Over the last eighteen months (since Bernanke’s initial mention that we were likely to see some “tapering” of bond buying), most fact that their fixed income holdings have been too short in duration to allow them to benefit from the decline of interest rates. While this has nothing to do with oil, I mention it to provide a of the macro questions I’ve gotten have been about whether the Fed would move to increase interest rates, and particularly when. These are the questions that have been on everyone’s mind.

Since mid-2013, the near-unanimous consensus (with credit to DoubleLine’s Jeffrey Gundlach for vocally departing from it) has been that rates would rise. And, of course, the yield on the 10- year Treasury has fallen from roughly 3% at that time to 2.2% today. This year many investing institutions are underperforming the passive benchmarks and attributing part of the shortfall to the………….MORE

Here's a PDF version of the memo

Previously on the Oaktree channel:
Oaktree's Howard Marks On Lessons From the Oil Crash, Russian Crisis
Bull and Bear Markets, According to Oaktree’s Howard Marks
Oaktree's Howard Marks: "Dare To Look Wrong, It's Not Supposed To Be Easy"
Knowledge@Wharton Visits With Oaktree's Howard Marks

"The Conventional Wisdom On Oil Is Always Wrong"

For the record, Izabella Kaminksa at FT Alphaville was suspicious of the price signals commodities including/especially crude oil were sending, going back at least two years if not further, and I said "there's a lot of oil sloshing around" so many times I got bored with myself.

From FiveThirtyEight:
In 2008, I moved to Dallas to cover the oil industry for The Wall Street Journal. Like any reporter on a new beat, I spent months talking to as many experts as I could. They didn’t agree on much. Would oil prices — then over $100 a barrel for the first time — keep rising? Would post-Saddam Iraq ever return to the ranks of the world’s great oil producers? Would China overtake the U.S. as the world’s top consumer? A dozen experts gave me a dozen different answers.

But there was one thing pretty much everyone agreed on: U.S. oil production was in permanent, terminal decline. U.S. oil fields pumped 5 million barrels of crude a day in 2008, half as much as in 1970 and the lowest rate since the 1940s. Experts disagreed about how far and how fast production would decline, but pretty much no mainstream forecaster expected a change in direction.

That consensus turns out to have been totally, hilariously wrong. U.S. oil production has increased by more than 50 percent since 2008 and is now near a three-decade high. The U.S. is on track to surpass Saudi Arabia as the world’s top producer of crude oil; add in ethanol and other liquid fuels, and the already on top.
The standard narrative of that stunning turnaround is familiar by now: Even as Big Oil abandoned the U.S. for easier fields abroad, a few risk-taking wildcatters refused to give up on the domestic oil industry. By combining the techniques of hydraulic fracturing (“fracking”) and horizontal drilling, they figured out how to tap previously inaccessible oil reserves locked in shale rock – and in so doing sparked an unexpected energy boom.

That narrative isn’t necessarily wrong. But in my years watching the transformation up close, I took away a lesson: When it comes to energy, and especially shale, the conventional wisdom is almost always wrong.
It isn’t just that experts didn’t see the shale boom coming. It’s that they underestimated its impact at virtually every turn. First, they didn’t think natural gas could be produced from shale (it could). Then they thought production would fall quickly if natural gas prices dropped (they did, and it didn’t). They thought the techniques that worked for gas couldn’t be applied to oil (they could). They thought shale couldn’t reverse the overall decline in U.S. oil production (it did). And they thought rising U.S. oil production wouldn’t be enough to affect global oil prices (it was)....MUCH MORE
HT: Barron's Read This, Spike That column.

One lesson from the last couple years:  Life is easier if you have deliverable physical.
Then you can play all kinds of financialization and other reindeer games.

First Round Capital's 2014 Holiday Video

Following up on last week's reprise of 2012's oddly genius offering.*
From First Round Capital:

*Still Anticipating First Round Capital's 2014 Video Holiday Card So, As We Wait...

Perversity and Credit Default Swaps

Following up on "It's Time to Regulate Credit Default Swaps Using State Gambling Laws".
There's a reason you are required to have an insurable interest in a person on whom you take out a life insurance policy. Incentives and motives.
From Matt Levine at Bloomberg:
RadioShack Is Running on Credit Derivatives
A good general principle in thinking about derivatives is that real effects tend to ripple out from economic interests. This is not always true, and not always intuitive: If you and I bet on a football game, that probably won't affect the outcome of the game. But most of the time, in financial markets, it is a mistake to think of derivatives as purely zero-sum, two-party bets with no implications for the underlying thing. Those bets don't want to stay in their boxes; they want to leak out and try to make themselves come true.
Here is a Bloomberg News story about RadioShack credit derivatives that I enjoyed. The basic background of RadioShack is:
  • It is in some financial distress, having lost money in each of the last 11 quarters and having recently hired a restructuring consultant as its interim chief financial officer.
  • It is a small company, these days, and it has only $841 million of debt as of November ($325 million of bonds and the rest in three bank loans). Being in distress, those bonds trade at, oh wow, under 20 cents on the dollar.
  • For idiosyncratic reasons, having to do with indexes, there are a lot of credit default swaps outstanding on RadioShack's debt, now about $26 billion gross and $550 million net notional.
So in the near future, RadioShack either will or won't default on its debt, with the market odds implying that it will. If it does default, people who own the debt will lose money; if it doesn't, they'll make money.  Same with the credit default swaps: If RadioShack defaults, and you had previously bought CDS for like 60 points upfront -- paying $6 million for $10 million of CDS notional -- then you make a lot of money. (Like $2.5 to $4 million of profit on your $6 million investment. ) But if RadioShack doesn't default, and you had previously sold credit default swaps for $6 million, then you get to keep the $6 million when your swaps expire.
This creates incentives. Here are the incentives:
  1. If you bought a lot of CDS (long protection/short credit), then  you should try to get RadioShack to default.
  2. If you sold a lot of CDS (short protection/long credit), then you should try to get RadioShack not to default.
Thing 1 is sort of a famous thing, and often thought of as Bad. The idea is that you can buy some of RadioShack's debt (long credit), buy even more CDS (giving you a net short credit position), and then be a meanie with your debt, refusing to negotiate with the company to avoid a default because your incentives are dominated by the CDS position. So instead of being a constructive lender trying to help your borrower survive, you're an evil "empty creditor" trying to burn down the house to collect the insurance, in the more or less officially sanctioned metaphor.

But Thing 1 can also be Good. I mean, there is some debate over the goodness of the Codere trade, but I hope there's none over its beauty. It is objectively beautiful. It even made the "Daily Show." A reminder: GSO Capital Partners (the credit unit of Blackstone) and Canyon Partners owned a bunch of Codere debt, and a bunch of credit default swaps on Codere, a Spanish gaming operator. And they did in fact drive Codere into default so they could get paid out on their swaps, as Thing 1 predicts. But they didn't do it by being meanies with the debt. Quite the reverse: They agreed to refinance Codere's debt on favorable terms, in exchange for Codere agreeing to be two days late on an interest payment to trigger the CDS. GSO and Canyon made money on the CDS, and used some of that money to, in effect, subsidize the loan to Codere to keep it afloat. Everyone wins! Except the CDS sellers. Who lost. How unfair for them....MORE

35 Year Old 'Minecraft' Billionaire Buys a $70 Million House, Makes An Astute Comment

From Forbes:
'Minecraft' Billionaire Markus Persson Buys $70 Million Beverly Hills Contemporary With Car Lift
‘Minecraft’ creator Markus “Notch” Persson has just closed on a $70 million home on tony Hillcrest Drive in Beverly Hills.

The 23,000-square-foot, Contemporary-style home, with a wall of glass that provides a 280-degree view of the City of Angels and the Pacific Ocean below, triggered a bidding war between four buyers. Persson quickly decided he wanted the home, paid all cash, and closed in six days, according to the agents who sold him the property.

Persson, a 35-year-old Swedish video game designer, became a billionaire in September when he sold his company, Mojang, to Microsoft for $2.5 billion, as my colleagues Max Jedeur-Palmgren and Ryan Mac reported in September. According to postings on Reddit, Persson says that he grew up in a “relatively poor family” with a mother who was a nurse and a father who struggled with drug addiction. Persson only began to make a steady living when he became a video game programmer. He developed ‘Minecraft’ and released it in 2009, then founded Mojang in 2010.

“Once I got a decent job, I never really had to worry about money,” he wrote on Reddit last year. “Now, all of the sudden, as a result of how modern society works, I managed to somehow earn a shit-ton of money.”...MORE

Natural Gas: EIA Responds To Journal Nature, Says Nature is As Shoddy as the New York Times

The EIA refrained from saying Times publisher 'Pinch' Sulzberger dresses funny but did say:
From the EIA's perspective, the situation has an element of what Yogi Berra, the American baseball player famed for his catchy phraseology, once described as "deja vu all over again." In June 2011, the New York times (NYT), published two articles "Insiders Sound Alarm Amid a natural Gas Rush" (June 26) and "Behind Veneer, Doubt on the Future of Natural Gas" (June 27). The NYT's public editor, who acts as an ombudsman on behalf of readers, responded to these articles with two columns (July 16 and July 30, 2011) that found both the content of the articles and the reporting methods to be deeply flawed, in many instances for the same reasons that motivated this response to Nature's December 4 article....
Howard Gruenspecht
Deputy Administrator 
Energy Information Administration
From UPI:

Nature fires back at EIA shale gas critique
EIA says article reminiscent of faulty New York Times article on natural gas prospects.
WASHINGTON, Dec. 18 (UPI) -- The journal Nature stands by the accuracy of a feature questioning the longevity of the growth in U.S. shale natural gas, the features editor said Thursday. 
The U.S. Energy Information Administration took issue this week with an article published by Nature, in which Texas researchers said a detailed analysis of U.S. shale plays may be "bad news" for forecasters.
Policymakers on Capitol Hill have said the glut of natural gas means the United States should transform itself as a major exporter of liquefied natural gas, arguing such deliveries may contribute to the rise of the country as an "energy superpower."

Tad Patzek, director of petroleum engineering at the University of Texas at Austin, said in the Nature report EIA assessments of shale were setting U.S. policymakers up "for a major fiasco."
In a Dec. 15 retort, EIA countered the Nature article was filled with "inaccurate and distorting reporting." It further questioned Patzek's role in the research supporting the article, saying he had only a limited role in the actual studies.

"It might also be appropriate for the article to inform readers that Patzek is a leading figure in the peak oil community, which emphasizes concerns related to limitations on the availability of hydrocarbon resources," EIA Deputy Administrator Howard Gruenspecht said in his response.

Richard Monastersky, features editor for Nature, told UPI the journal stands by the accuracy of its reporting. Before publication, editors discussed the data and the feature itself with researchers at the University of Texas Bureau of Economic Geology as well as EIA....MORE

Nature | News Feature 
Natural gas: The fracking fallacy

BEG/UT has also responded to the article in their own letter to the editor.
Read BEG/UT response

It's Time to Regulate Credit Default Swaps Using State Gambling Laws

This is nuthin but straight up gambling, know what I'm sayin?
There is no reason to own a CDS with a greater notional value than the face value of a debt except for the purpose of gambling. Got that? There is NO OTHER REASON.
From Bloomberg:

RadioShack Kept Alive by $25 Billion of Swaps Side Bets
RadioShack Corp. (RSH) is finding an unlikely ally in its efforts to stay out of bankruptcy: credit derivatives traders who amassed more than $25 billion of trades speculating how much longer it can keep paying its bills.
After a 60 percent surge this year, the amount of credit-default swaps tied to RadioShack is 28 times its debt, more than any other U.S. company. When the retailer’s biggest shareholder arranged $585 million of funding in October to help it survive the holidays, much of the money came from hedge funds wagering on the company to avoid default, said people with knowledge of the trading. Those included DW Investment Management and Saba Capital Management, the people said.
The derivatives are amplifying the stakes on a company with less than $1 billion of debt that’s running out of cash and struggling to compete with online competitors. By injecting the 93-year-old electronics retailer with new money, swaps traders, more often blamed for pushing companies toward bankruptcy, have been preserving big payoffs if they can delay or prevent a default.
“The sellers of the protection built up quite a large war chest, and it took a relatively small amount of money to keep the company going,” said Peter Tchir, a former credit-swaps trader who is now head of macro strategy at Brean Capital LLC in New York. “They have huge incentives to keep the company alive to not trigger the swaps.”

Motivated Lenders
That provided RadioShack’s biggest shareholder, Standard General LP, a potential pool of lenders when it arranged the loans in October. The financing gave the retailer enough cash to stock up for the holiday season while negotiating with other creditors that are blocking a plan to close underperforming stores. RadioShack has struggled to keep up with a migration of sales to the Internet, losing money for 11 straight quarters.

As part of the October funding, DW Investment, run by David Warren, bought more than $100 million of a $275 million first-lien loan, the people with knowledge of the deal said this month. Saba, founded by former Deutsche Bank AG credit-trading head Boaz Weinstein, also bought a piece of the debt, they said. Both firms have swaps investments that would benefit from RadioShack’s solvency, the people said.
Representatives of DW Investment, Saba Capital, Standard General and Fort Worth, Texas-based RadioShack declined to comment.

Rare Situation
Among U.S. non-financial companies, only one has more swaps tied to its debt than RadioShack: casino operator Caesars Entertainment Corp., according to the Depository Trust & Clearing Corp. The $28.3 billion of contracts on that company’s biggest unit is 1.5 times its $18.4 billion of obligations....MORE
Side bets are a description of what bucket shops do and there are anti-bucket shop laws on the books of just about every state. Federal pre-emption you argue? Nothing a one-line tweak of the Commodity Futures Modernization Act wouldn't solve.

The ideas are not original to me. Former New York Insurance Superintendent Eric Dinallo said:
“It’s legalized gambling. It was illegal gambling. And we made it legal gambling…with absolutely no regulatory controls. Zero, as far as I can tell,”

A couple of our prior posts:
July 2010
Financial Reform: Enforce New York's 1908 Bucket Shop Law and trash the 2,319 Page Dodd-Frank Bill
It is time to dispense with this congressional foolishness and enforce the 1908 Bucket Shop law.
Throw in some state anti-gambling statutes and you would have prevented the financial meltdown....
November 2011
Are Derivatives Contracts Nothing More than Unenforceable Gambling Debts?
...Here's the U.S, Senate testimony of Eric Dinallo, then-Superintendent of the New York State Insurance Department on October 14, 2008 (8 page PDF).
...I have argued that these naked credit default swaps should not be called swaps because
there is no transfer or swap of risk. Instead, risk is created by the transaction. Indeed, you
have no risk on the outcome of the day’s third race at Belmont until you place a bet on
horse number five to win....

...“Bucket shops” arose in the late nineteenth century. Customers “bought” securities or
commodities on these unauthorized exchanges, but in reality the bucket shop was simply
booking the customer’s order without executing on an exchange. In fact, they were
simply throwing the trade ticket in the bucket, which is where the name comes from, and
tearing it up when an opposite trade came in. The bucket shop would agree to take the
other side of the customer’s “bet” on the performance of the security or commodity.
Bucket shops sometimes survived for a time by balancing their books, but were wiped
out by extreme bull or bear markets. When their books failed, the bucketeers simply
closed up shop and left town, leaving the “investors” holding worthless tickets....

Uber Competitor Lyft Phasing Out the Moustache

My takeaway from this Vox post:
Lyft says its drivers can make $35 an hour. I spent a week driving to see if that’s true.
My first day as a Lyft driver wasn't going well. After dropping off a passenger in Arlington, Virginia, I forgot to tap the "drop off" button in the Lyft app to indicate that the trip was over.
I didn't discover my mistake until 90 minutes later. As a result, the customer got a nasty surprise: a $44 bill for a ride that should have cost about $7 (a Lyft administrator corrected the charge a few hours later, after I pointed out the problem). This was bad for me too, because during those 90 minutes I couldn't pick up a new passenger.

Oh, and I had one other problem: the woman had left her keys in my car.

Lyft drivers don't have access to the full names or phone numbers of passengers, but I was able to figure out my passenger's work number based on where I had dropped her off. By the time I called her, it was 5:30 on a Monday afternoon. After four hours on the clock, I had gotten only three customers. And now, instead of picking up customers during the busy rush-hour period, I had to drive back out to Arlington in bumper-to-bumper traffic to drop off the keys.

My experience left me skeptical that drivers will be able to make anywhere close to $30 per hour
I would pick up two more passengers before finally calling it a night around 7:30 pm. All told, I spent five and a half hours on the clock and made $48. That's less than Washington DC's minimum wage — even before you subtract money for gas.

Things got better later in the week. I wound up working 50 hours, earning almost $600 in fares. And I actually made a lot more than that. Lyft paid me $1,500 (which I'll be donating to DC Central Kitchen) under a program that guaranteed drivers would make $30 per hour if they worked 50 hours. In other words, Lyft paid me more than $2 for every dollar in revenue I generated for them.

That absurdly generous compensation, funded by millions in venture capital, is part of Lyft's strategy to expand its roster of drivers in order to better compete with Uber. Obviously, these deals can't last, and my experience left me skeptical that drivers will be able to make anywhere close to $30 per hour without them....MUCH MORE
Nor did I get one of those famous Lyft mustaches for my car. My mentor told me that the giant pink mustaches on the front of the car were being phased out. He had a smaller and more tasteful pink mustache on his dashboard, but I didn't even get one of those.

UPDATED--Natural gas: EIA Weekly Supply/Demand Report

Update: "Natural Gas Futures Drop to Lowest Point in Over a Year"
Original post:
While some desks are betting on a cold snap around the New Year it looks as though supply has the upper hand unless there is one heck of a cold snap. $3.598 down 0.044.

From the Energy Information Administration:
Natural gas storage exceed year-ago levels, and production is higher
According to this morning's EIA Weekly Natural Gas Storage Report, natural gas storage levels for the Lower 48 states, as of December 12, are slightly above 2013 levels for the first time this year. Inventories totaled 3,295 billion cubic feet (Bcf) as of December 12, compared to 3,289 Bcf in the same week of 2013. Stock levels fell sharply in early 2014 because of extremely cold weather, and remained at or below the five-year minimum level up until this week.

Despite concerns raised about the storage deficit going into the 2014-15 heating season, the year-over-year gap in inventories has been continually falling since April, when it was nearly 1,000 Bcf. Storage levels are still 258 Bcf lower than the five-year (2009 – 13) average, but this gap has also narrowed substantially since April.

At the start of the heating season, the storage deficit was 238 Bcf, but a combination of strong year-over-year production growth, and relatively moderate temperatures compared to last winter, has helped erase this deficit. From November 1, 2014 through this most recent storage report (December 12), storage withdrawals averaged 6.1 Bcf per day (Bcf/d), compared to 12.4 Bcf/d over the same period in 2013.

In the past several weeks, natural gas production levels have risen to record highs, according to production data from Bentek Energy, LLC. Dry natural gas production averaged 70.8 Bcf/d since November 1, which is an increase of 4.8 Bcf/d over that same period in 2013, according to Bentek. A contributing factor to lower production levels in 2013 was production freeze-offs that occurred in December 2013. In the current Short-Term Energy Outlook (STEO), EIA forecast that production will continue to increase through 2015. 

According to Bentek data, consumption has averaged 78.1 Bcf/d since November 1, 2014, compared to 83.0 Bcf/d over the same time period last year. More moderate temperatures in 2014 are supporting the decrease in consumption; heating degree days since the start of November have been 7.2% lower in 2014 compared to 2013. EIA forecasts that natural gas consumption for the remaining months of the winter will be much lower than last year's historically cold winter, driven by closer-to-average NOAA temperature forecasts from the National Oceanic and Atmospheric Administration (NOAA)....MUCH MORE
U.S. Consumption - Gas Week: (12/10/14 - 12/17/14)

Percent change for week compared with:
last year
last week
U.S. Consumption
Total Demand
Source: BENTEK Energy LLC

Thursday, December 18, 2014

"Amazon Not as Unstoppable as It Might Appear" (AMZN)

From the New York Times' Personal Tech column:
Thanks to its ugly spat with book publishers, Amazon has lately been cast as the abominable boogeyman of American commerce.

As hundreds of authors took up arms against the giant, The New Republic declared in a cover article this fall that “Amazon Must Be Stopped,” insisting that the company’s unbounded retail ambitions would end up “cannibalizing the economy.”

But there’s another theory about Amazon’s future, one for which evidence began to mount this year: Despite fears of Amazon’s growing invincibility, the company’s eventual hegemony over American shopping is not assured. It might not even be likely.

That’s not just because investors began to question the company’s aggressive spending this year, or because its big new thing, the Fire Phone, turned out to be about as unwelcome as the flu.

Amazon may face a deeper problem. Like many of the local and big-box retailers it has displaced over the last decade and a half, Amazon could itself become increasingly vulnerable to the threat of technological upheaval.
Credit Stuart Goldenberg
The key to its vulnerability is the smartphone, a device whose scope and significance Jeff Bezos, the chief executive, has not yet managed to corral.

Phones have already radically altered both the way Americans shop and how retail goods move about the economy, but the transformation is just beginning — and it is far from guaranteed that Amazon will emerge victorious from the transition.

Phones are at the heart of the service offered by Postmates, one of several start-ups that are working with retailers and helping to change shopping experiences. “Everything that we’re doing is anti-Amazon,” said Bastian Lehmann, the co-founder of Postmates.

Postmates runs a network of couriers who, like Uber drivers, are dispatched by phones to deliver food, apparel, toothpaste and other goods from local stores in 18 American cities. The company recently announced a plan for retailers to build Postmates’ technology into their own technology systems, a way to give small stores the kind of logistical efficiencies that were previously available only to giants like Amazon.

 As local retailers adopt such mobile innovations, customers will be able to search stores’ inventories, purchase goods for same-day delivery, and navigate and search for help and reviews inside a crowded store. None of these technologies pose an existential threat to Amazon, but by giving physical stores some of the conveniences that Amazon has long had, they may limit its potential reach....MORE
HT: Value Investing World's linkfest
Also via VIW:
How levered was John Maynard Keynes' portfolio? (LINK)