Monday, June 30, 2014

With One Full Month in the History Books, Hurricane Season Gets Off to Slowest Start Since 2004 But...

That's the good news.
The bad news is: It's a long season:
THE ATLANTIC HURRICANE SEASON

NOAA had forecast an average to slightly below average season.
First up, the Baltimore Sun:
With tropics quiet, hurricane season could get latest start since 2004
The tropics are quiet nearly a month into the Atlantic hurricane season, and that could eventually mean the season's latest start since at least 2004. No tropical cyclones have formed yet this year, whereas in each of the past nine years, a tropical storm has developed in May or June.

The National Hurricane Center does not forecast any cyclone development within the next 48 hours, and there are no areas it is eyeing for storm development within the next five days, either. Last year, Tropical Storm Andrea formed June 5, while in 2012, Tropical Storm Alberto came before the season's official June 1 start, on May 19. In 2011, tropical storm Arlene formed June 28, a mark we are sure to surpass this weekend. It has been since 2004 that a named storm did not develop until July -- and Hurricane Alex, in that year, didn't form as a tropical storm until July 31.

Though that season got a late start, it was nonetheless a costly one, including hurricanes Charley, Francis and Ivan. Strong wind shear, which occurs when wind speeds and directions vary at different altitudes, has been the strongest factor inhibiting storm development, AccuWeather.com hurricane expert Dan Kottlowski said in a post Wednesday. AccuWeather notes that there have been 1-2 storms in May and June in each of the past nine years, except 2012, when there were four in that period. On average, going back to 1966, the first Atlantic tropical storm doesn't form until July 9, however. The first hurricane forms by Aug. 10, on average, and the first major hurricane doesn't typically form until Sept. 3.... 
And from Wunderblog:

91L Near Tropical Depression Status; Entire SE U.S. Coast Could be Impacted
An area of disturbed weather over the warm waters of the Gulf Stream, located about 130 miles east-northeast of Melbourne, Florida on Monday morning (Invest 91L), has grown more organized this morning. Surface pressures are falling, and 91L is close to tropical depression status. Satellite loops on Monday morning showed 91L had a well defined surface circulation, with heavy thunderstorms building and steadily organizing into spiral bands. Long-range radar out of Melbourne, Florida showed these bands were already affecting the coast of Central Florida. Sea surface temperatures in this region were about 1°C above average, 27 - 28°C. The counter-clockwise circulation of an upper level high pressure over Florida was bringing northerly winds over 91L at high altitude, and these winds were creating light wind shear of 5 - 10 knots. However, water vapor satellite loops show that the atmosphere has dried noticeably to the north of 91L since Sunday, and the northerly winds are driving this dry air in the heart of the storm. This dry air is interfering with development and keeping any heavy thunderstorms from developing on the north side of the circulation. The Hurricane Hunters will investigate 91L on Monday afternoon.

Figure 1. Water vapor satellite image of 91L taken at 10:45 am EDT Monday June 30, 2014. A large area of dry air (black colors) was to the north of the system, and was interfering with development. Image credit: NOAA/NESDIS.


Figure 2. Wind forecast for 11 am Thursday, July 3, 2014, as made by the 06Z Monday June 30, 2014 run of the GFS model (left) and 00Z Monday run of the European model (right.) Both models are predicting that 91L will become a tropical storm and threaten the South Carolina coast on Thursday.
Forecast for 91L
Steering currents are weak off of the Southeast U.S. coast, but the models are in good agreement on the track of 91L. The disturbance should continue a slow southward to southwesterly motion on Monday, which would bring the storm very close to the coast of Florida by Tuesday.....MORE 

Gazprom Asks Europe If They've Checked the Weather Forecast For January

From MoneyBeat:

Gazprom Warning Heralds Changing of Seasons
GAZPROM USHERS IN WINTER
A new week begins with an old message from Gazprom.

The Russian natural-gas behemoth says Europe may not be feeling the effect of Russia’s spat with Ukraine right now but boy, just wait until the weather turns.

The Wall Street Journal’s Alexander Kolyandr explains that Gazprom stopped supplying gas to Ukraine earlier this month as both sides failed to reach a compromise on price. Russia’s state-owned gas giant said it would only sell natural gas to Ukraine if it pays for deliveries in advance and stumps up $4.5 billion it owes for past deliveries.

Although Ukraine has reduced its gas consumption, Gazprom believes that when summer turns to autumn and temperatures drop, the gas that transits Ukraine from Russia to Europe will begin to be siphoned off.
This is an accusation that has been made before, in the particularly cold winter of 2009. Gazprom then cut the flow completely....MORE

Trying to Time The Warning From the Bank For International Settlements

As mentioned in yesterday's BIS: "Overall, it is hard to avoid the sense of a puzzling disconnect between the markets' buoyancy and underlying economic developments globally", the BIS made their 2007 warning:
THE risk of a 1930s-style economic slump has been heightened by "euphoric" markets tapping cheap global credit, one of the world's pre-eminent financial institutions has said.
In its annual report, the Bank for International Settlements noted that the conditions that led to the Great Depression of the 1930s and the Asian crises in the 1990s reflected the current environment....
in the Annual report released 24 June 2007.
Here's that 77th report and here's the 78th (2008)

In August 2007 the market and in particular the funds suffered what came to be called the "Quant Quake".
As the Financial Times reported on Aug. 13, 2007, Mr. Viniar said one of the dumbest things of his life:
“We were seeing things that were 25-standard deviation moves, several days in a row” 
That was only prelude. So six weeks give or take. More than enough time to get to 1999.99 on the S&P.

Here's the Financial Times with their take on the latest warning:
‘Euphoric’ capital markets are out of step with reality, warns BIS
The Bank for International Settlements has warned that “euphoric” financial markets have become detached from the reality of a lingering post-crisis malaise, as it called for governments to ditch policies that risk stoking unsustainable asset booms.
While the global economy is struggling to escape the shadow of the crisis of 2007-09, capital markets are “extraordinarily buoyant”, the Basel-based bank said, in part because of the ultra-low monetary policy being pursued around the world.

Leading central banks should not fall into the trap of raising rates “too slowly and too late”, the BIS said, calling for policy makers to halt the steady rise in debt burdens around the world and embark on reforms to boost productivity. 

In its annual report, the BIS also warned of the risks brewing in emerging markets, setting out early warning indicators of possible banking crises in a number of jurisdictions, including most notably China.

“Particularly for countries in the late stages of financial booms, the trade-off is now between the risk of bringing forward the downward leg of the cycle and that of suffering a bigger bust later on,” it said....MUCH MORE  
'Euphoric' capital markets are out of step with reality, warns ...

Financial Times, June 30, 1914: Austrian News Priced In

Via ZeroHedge:

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/06/20140630_WW11.jpg

Ignore the DJIA chart at ZH, they make a rookie mistake, I'll explain in another post.

Amount of Corn in Storage Sharply Bearish

September down even further 422'0 down 20'2.
From Ag.com:

Soybean Acreage, Corn Stocks Numbers Sharply Bearish -- USDA
U.S. farmers have planted a whale of a soybean crop this year, and if that crop reaches fruition, it'll keep the bears fed for some time, analysts and traders say after soaking up Monday's USDA Quarterly Grain Stocks and June Acreage reports.

USDA pegged soybean acres for 2014 11% higher than last year at 84.8 million. That's more than 2 million higher than previous trade estimates, analysts say.

"Big bear surprise in bean acres! Record size bean crop," says Bob Linneman, Market Analyst with Kluis Commodities LLC. "Now the questions becomes yield -- watch the Monday crop condition reports. Also, corn was neutral, but beans are so bearish that we may see the beans keep the corn down."
Corn stocks are almost 40% higher than they were a year ago, while soybean stocks are slightly lower, according to Monday's USDA-NASS Grain Stocks report.

The report shows corn on hand in the U.S. on June 1 was 3.85 billion bushels, up 39% from a year ago. Corn on hand on farms is even higher than it was a year ago, the report shows.

"Of the total stocks, 1.86 billion bushels are stored on farms, up 48% from a year earlier. Off-farm stocks, at 1.99 billion bushels, are up 32% from a year ago. The March-May 2014 indicated disappearance is 3.15 billion bushels, compared with 2.63 billion bushels during the same period last year," according to Monday's Stocks report.

"Area for harvest, at 84.1 million acres, is up 11% from 2013 and will be a record high by more than 7.4 million acres, if realized. Record high planted acreage is estimated in Michigan, Minnesota, Nebraska, New York, North Dakota, Ohio, Pennsylvania, South Dakota, and Wisconsin," according to Monday's Acreage report....MORE
And via Deutsche Börse:
USDA: Corn Stocks Up 39% In June Vs A Year Ago

Corn Gets Rocked on USDA Report: Acreage Planted Down 4%, Market Had Expected Lower

So much for the post immediately below:
Starting to get that long-ish ain't wrong-ish feel but too chicken to make declarative statements.
Corn $4.3660 down 5.60 cents, CME Sept. wheat 587'2 down 6'4.
Corn 424'6 down 17'4.
And that boys and girls is why we don't do public pre-announcement guesses. As with natural gas the object isn't to figure out what the number will be or even the Keynesian Beauty Contest: figuring what the other fella thinks the number will be. Rather the object is to discern how the third guy will trade the info he thinks hombres a and b have.
Now if you'll pardon me it's time for a trade.

From AgWeb:
Acreage: Corn Down 4%, Soybeans Up 11%, Cotton Up 9%
Corn Planted Acreage Down 4% from 2013
Soybean Acreage Up 11%
All Wheat Acreage Up Less Than 1%
All Cotton Acreage Up 9%

Corn planted area for all purposes in 2014 is estimated at 91.6 million acres, down 4 percent from last year. This represents the lowest planted acreage in the United States since 2010; however, this is the fifth largest corn acreage in the United States since 1944.

Soybean planted area for 2014 is estimated at a record high 84.8 million acres, up 11 percent from last year. Area for harvest, at 84.1 million acres, is up 11 percent from 2013 and will be a record high by more than 7.4 million acres, if realized. Record high planted acreage is estimated in Michigan, Minnesota, Nebraska, New York, North Dakota, Ohio, Pennsylvania, South Dakota, and Wisconsin.

All wheat planted area for 2014 is estimated at 56.5 million acres, up less than 1 percent from 2013. The 2014 winter wheat planted area, at 42.3 million acres, is down 2 percent from last year but up less than 1 percent from the previous estimate. Of this total, about 30.4 million acres are Hard Red Winter, 8.50 million acres are Soft Red Winter, and 3.41 million acres are White Winter. Area planted to other spring wheat for 2014 is estimated at 12.7 million acres, up 10 percent from 2013. Of this total, about 12.0 million acres are Hard Red Spring wheat. The intended Durum planted area for 2014 is estimated at 1.47 million acres, down slightly from the previous year....MORE

Possibly Market Moving News In This Morning's USDA Grain Report

Starting to get that long-ish ain't wrong-ish feel but to chicken to make declarative statements.
Corn $4.3660 down 5.60 cents, CME Sept. wheat 587'2 down 6'4.
From Agrimoney:
What will key US data show? History gives some guidance...

If ever there is a time to expect volatility in commodity prices, it is one of the days, four a year, that the US unveils estimates for its grains stocks.
These inventory reports have a habit of producing surprises. And these in turn have a tendency to feed swings in grain and soybean prices.
The stocks report that the US Department of Agriculture produces on Monday has the extra kicker of being accompanied by revised estimates for sowings too.
That is not straightforward either, with persistent rains in the north west Corn Belt and the northern Plains provoking late doubts over planting estimates.
These are only being enhanced by a debate over whether the land will be counted as unplanted, or abandoned - meaning it was lost after seeding, and will be accounted for in a separate line of the balance sheet.
'Provided the surprises'
Still, it is the stocks report which is being anticipated with most concern....MORE

Here's corn via FinViz:

"Five-month China HK gold imports flat y-o-y, but again trending down"

With the blow-up of the fictitious finance biz I would not be surprised to see some of the comps go negative this fall.
From Mineweb:
Somewhat coincidentally the latest figure for net Chinese gold imports through Hong Kong for the month of May, as reported by Reuters, suggest that imports for the year to the end of that month are now at almost exactly the same level as a year ago, with the exceptionally high January and February figures now countered by lower levels for the following three months. As we pointed out when writing about the previous month’s net import figures, the latest data do indeed suggest that the market for gold in China has been cooling, at least for the time being – and there is nothing to suggest that there is any turnaround yet and the probability now looks to be that overall Chinese gold imports this year through Hong Kong at least will indeed fall from last year’s record levels.

But even so China remains a huge importer of gold through officially recorded channels (Hong Kong), although imports through other routes (notably Shanghai and Beijing to name but two) will be adding to the total – but unannounced. Indeed with new regulations it is indeed possible that imports through these other ports of entry m ay be rising. Add to all this China’s own gold production  - reported at 430 tonnes last year and likely a few percentage points higher this = and we still will likely see China consuming well over 1,000 tonnes again in 2014....MORE

UPDATED--New York Real-estate As the New Swiss Bank Account

Update: I forgot the fargin' HT, Alphaville's Further Reading post, juxtaposing which had triggered the six word intro.
Arrgghh
Original post:
Nothing left on offer in London?
A major piece from New York Mag:
Stash Pad
The New York real-estate market is now the premier destination for wealthy foreigners with rubles, yuan, and dollars to hide

One57, on West 57th Street, where a penthouse is reportedly in contract for $90 million.
PART I.
THE BUYER
The buyer, an Italian, was in town for a week, with a million or so dollars to spend. We met one Sunday morning at 20 Pine, a Financial District condo building. She wore a red scarf, jangly jewelry, and a pair of lime-green sunglasses perched atop her curly hair, and she told me she would prefer to remain anonymous. Working through a shell company, she was looking to anchor some of her wealth in an advantageous port: New York City.

The building’s lobby, designed in leathery tones by Armani, swirled with polylingual property talk. As the Italian and I waited for her broker, an Asian man sitting on a couch next to us asked, “You see the apartment?” But he didn’t wait for an answer, leaping up to join a handful of women speaking a foreign language heading toward the elevators.

After a few minutes, a fashionably stubbled young man swung through 20 Pine’s revolving door: Santo Rosabianca, a broker with Wire International Realty. The firm, run by Rosabianca’s brother Luigi, an attorney, specializes in catering to overseas investors. A first-generation American, Santo greeted the buyer with kisses and briefed her in Italian. She was searching for a property that would generate substantial rental income. “Wall Street is not my favorite place,” she told me. “But he says it is very good for rent.”

Like several other buildings she was being shown, 20 Pine was developed at the height of the real-estate bubble. After the crash of 2008, it became an emblematic disaster, with the developers selling units in bulk at desperation prices, until opportunistic foreigners swooped in with cash offers. The salvage deals are long gone, but 20 Pine retains its international appeal. The one-bedroom the Italian was looking at, on the 27th floor, had a view of the Woolworth Building, sleek finishes, a bachelor-size kitchen, and access to an exclusive terrace reserved for upper-floor residents. It was first purchased by an investment banker in early 2008 for $1.3 million, was resold in 2011 for $850,000, and was now back on the market for close to its prerecession price. Rosabianca told the Italian it would rent for more than $4,000 a month, enough to assure a healthy cash flow while its value appreciated. “There’s really no safer way to get that kind of return,” he said, “than in New York City real estate.”

This is not exactly true—there’s plenty of risk in real estate, as the original crop of purchasers at 20 Pine discovered—but that hardly dampens the enthusiasm of foreign buyers, who have become an overpowering force in New York’s real-estate market. According to data compiled by the firm PropertyShark, since 2008, roughly 30 percent of condo sales in large-scale Manhattan developments have been to purchasers who either listed an overseas address or bought through an entity like a limited-liability corporation, a tactic rarely employed by local homebuyers but favored by foreign investors. Similarly, the firm Corcoran Sunshine, which markets luxury buildings, estimates that 35 percent of its sales since 2013 have been to international buyers, half from Asia, with the remainder roughly evenly split among Latin America, Europe, and the rest of the world. “The global elite,” says developer Michael Stern, “is basically looking for a safe-deposit box.”
The influx of global wealth is most visible on the ultrahigh end, as Stern and other builders are erecting spiraling condo towers and sales records are regularly shattered by foreign billionaires, like the Russian fertilizer oligarch Dmitry Rybolovlev, purchaser of the most expensive condo in Manhattan’s history ($88 million), and Egyptian construction magnate Nassef Sawiris, who recently set the record for a co-op ($70 million). But much of the foreign money is coming in at lower price points, closer to the median for a Manhattan condo ($1.3 million and rising). In fact, if you’ve recently been outdone by an outrageous all-cash bid for an apartment, there’s a decent chance that, behind a generic corporate name, there’s a foreign buyer and an offshore bank account.

“A decade ago, it was just a small number of elite investors,” says Andrea Fiocchi, a lawyer at Reinhardt LLP, which caters to an international clientele. But now the market is broad and diversified: Fiocchi’s firm handled not only two of the ten most expensive residential sales in the city last year, but also a large volume of transactions at more mainstream prices. Buildings around Times Square and the Financial District are being marketed heavily overseas. One development project on John Street is “crowdfunding” $50,000 financing shares via the Prodigy Network, a marketing firm with offices in New York and Bogota. The Related Companies is using a federal program that promises green cards to foreign investors to raise cheap capital for its Hudson Yards project. (A website features a rendering and the slogan “Your Gateway to the U.S.A.”) Shortly before departing on a road show to Monte Carlo and other redoubts of European wealth a couple of months ago, one broker told me about his most adventurous strategy: buying, emptying, and renovating brownstones in Crown Heights. An Australian investment fund has done something similar in Bushwick.
Additional reporting by Michael Hudson of the International Consortium of Investigative Journalists.

UPDATED--"Las Vegas about to run out of water, go ‘out of business’"

Update, a couple prior posts on the subject:
August 2007
Clock is Ticking on Las Vegas' Water Supply and The Elvis Portfolio
So much for Viva Las Vegas.
February 2009 
Las Vegas Running Out of Water Means Dimming Los Angeles Lights
 The Las Vegas metro population is approximately two million.
Building cities in the desert is stupid.
The extent of the arid region is even larger than this map portrays (from DesertUSA):


Original post:
Yeah, that building-big-cities-in-the-desert thing might have some downside.
From News Australia:
The majestic fountains in front of the Bellagio hotel in Las Vegas.
The majestic fountains in front of the Bellagio hotel in Las Vegas. Source: Supplied
ONE of the most striking memories for anyone who has visited US sin city Las Vegas is of the fountains outside the Bellagio hotel, which shoot droplets hundreds of metres into the air. 
 
But this majestic image — and indeed the viability of the city itself — could be a thing of the past if an expert’s predictions turn out to be correct.

The Telegraph reports that desperate attempts to save the Nevada casino city are under way after a brutal, 14-year drought ravaged the reservoir that supplies 90 per cent of the city’s water.
Climate scientist Tim Barnett says the situation in the desert city is “as bad as you can imagine”.
“It’s just going to be screwed. And relatively quickly,” Mr Barnett, of the Scripps Institution of Oceanography, told The Telegraph .

“Unless it can find a way to get more water from somewhere, Las Vegas is out of business. Yet they’re still building, which is stupid.”
Are the sin city’s days numbered? … Las Vegas. Picture: Getty
Are the sin city’s days numbered? … Las Vegas. Picture: Getty Source: Supplied
The decadent destination relies completely on a lake created by the Hoover Dam, which was considered a major engineering feat when completed in 1936.

Vegas’s population, which has grown from 400,000 to 2 million, has slowly drained 4 trillion gallons from the lake, and it now sits well below half-full.

The city receives only about 100mm of rain per year, and Mr Barnett said the lake would provide no water by 2036 if nothing was done to alleviate the crisis.

Engineers are now building a new, lower pipe that will allow water to continue to flow to the city as the water level continues to drop.

The $817 million rescue mission is expected to be finished by the end of next year, but is only a Band-Aid solution.
The engineering feat that is the Hoover Dam.
The engineering feat that is the Hoover Dam. Source: News Limited
An alternative plan, to build a new pipelines to pump water from an aquifer the rural Nevada, was scuttled by environmentalists, who said it would ruin meadows and animal habitats.

Vegas-based scientist Rob Mrowka told The Telegraph that the city was wasting water, citing the mega resort Lake Las Vegas, where Celine Dion performs, as one of the “most egregious examples”.

“As the water situation becomes more dire, we are going to start having to talk about the removal of people (from Las Vegas),” Mr Mrowka said....MORE

The Return of London's Palaces

First up, one of the best first lines of the month:
 I was born in 'The Towers' in The Bishop's Avenue Hampstead London. This is the only photograph that I could find of it I'm afraid . It had 28 rooms, a bathroom for each bedroom, an island with palm trees in the middle of its indoor swimming pool, a staircase fit for a Queen and a huge ballroom....
Continues after the headline story
This piece is a year old but may have most breathless sub-head we've seen in a while.

From City AM:
How the super-rich are breathing new life into the grand old houses at the heart of London 
 
THE Queen is your neighbour, St James’ Park is your garden and Fortnum and Mason is your grocery shop – where do you live? With an illustrious Regency history and a host of nine figure properties, Carlton House Terrace is one of the most desirable streets in the world. Residential properties this big in central London are rare, since most of the largest houses were sold off by their ailing aristocratic owners during the first half of the 20th century and turned into flats or offices.

Now they’re being bought up and changed back into palatial residences by luxury developers eager to capitalize on a super-rich elite unaffected by the straitened economic climate of the past five years. A 2011 survey of the 20 most expensive homes in Britain found that Bernie Ecclestone was the only Briton among the owners. As Peter Wetherell, managing director of Wetherell’s estate agent says, in the days of the British Empire “the world was ruled from the great houses of Mayfair. These days, the people who rule the world want to buy houses in Mayfair.”

 Discretion is a priority for security obsessed billionaires. Often it’s difficult to ascertain whether or not the properties are really for sale as they are often sold without public listings. Take the mansion that Saudi Arabia’s Prince Abdul Aziz bin Fahd recently put up for sale in Kensington Palace Gardens (otherwise known as Billionnaire’s Row) – potential buyers reportedly had to sign a confidentiality agreement before looking around the property. And when Elena Franchuk bought her Upper Phillimore Kensington villa in 2008 for a then record-breaking figure of £80m, the property was shown only to a select group of international potential buyers. Meanwhile Rinat Akhmetov made headlines in 2011 when he paid £136.4m for three apartments in the Richard Rogers designed One Hyde Park.

The grand old houses of Mayfair and Knightsbridge possess the one luxury feature you can’t build – history. Here City A.M. Bespoke looks at the stories behind some of the residential properties set to break records in the near future.

CAMBRIDGE HOUSE 94 PICCADILLY This property was built for Charles Wyndham, 2nd Earl of Egremont between 1756 and 1761 and went on to be passed between various aristocrats before eventually falling into the hands of Prince Adolphus, Duke of Cambridge. Because Adolphus was a royal, the name stayed with the property, which was bought by the Naval and Military Club in 1865. The house became known as the “In and Out” club thanks to the prominent signs on the front gate. Cambridge House was bought from the Naval and Military Club in 1996 by billionaire Simon Halabi for £50m but fell into disrepair. The famous “in and out” sign remained, though, even after an imaginative graffitist changed it to “anarchy in and Tories out”. Cambridge House lay neglected, its white facade grubby from years of disuse. Set back slightly from the rumbling traffic of Piccadilly, it was as if the grand old house were stepping away, respectfully declining to participate in a world too fast and loud for it to understand. It lay abandoned and forlorn, a ghost of aristocratic op- ulence like the wreck of the Titanic. That is set to change after billionaire property tycoons the Reuben brothers acquired the property for £130m in 2011. The siblings are planning a transformation that will turn the building back into a single 48-room palace. Upon completion the property will have a gym, an underground swimming pool and a 35,000 bottle wine cellar, and has been speculatively valued at £250m....MORE
And back to the lady's story:
Now, before you get the wrong idea that we were 'loaded', 'The Towers' used to be the home of Gracie Fields.  Dame Gracie Fields was an English born actress, singer and comedienne. She donated her house ' Tower'  in London's The Bishops Avenue, to a maternity hospital and that is how I came to be born in a road that is a favourite with the 'uber-rich' and was often referred to as  ' Millionaires Row' but, because of inflation, is now referred to as ' Billionaires Row' !!!!
...MORE


News From Dusseldorf: Ray the (robot) Parking Valet

We have to conserve our 'gee whizz's' for the truly creative stuff, this ain't it.
From the AP via USNews:
Uncanny valet: Robot to park travelers' cars at German airport

The Associated Press
Parking robot "Ray" transports a car in Duesseldorf, Germany, Monday, 23 June 2014. The parking robot will see service for the first time at Duesseldorf Airport. (AP Photo/dpa, Federico Gambarini) 
Plane to catch and don't feel like hunting for parking?

Travelers at Duesseldorf airport in Germany can soon leave the job to a robot valet.

An airport spokesman says the robot, nicknamed Ray, starts work Tuesday and can be booked using a smartphone app.

Thomas Koetter says all travelers need to do is leave their car in a designated area and confirm it's empty and ready to go.

Then Ray or one of its cybernetic colleagues will take the car to one of 249 parking spaces reserved for robots....MORE
Auto-auto parking has been around for a while:

Some of the tech looks a bit SciFi, for example VW's Autostadt in Wolfsburg:

Sunday, June 29, 2014

Fails-to-Deliver In the Treasury Market Rising Sharply

From ZeroHedge:
As Barclays' Joe Abate warns, delivery fails in the Treasury market have surged recently. While not at the scale of the 2008 crisis yet, we suspect the spike is what is panicking the Fed to say "the market is wrong", talk up short-end rates, and implore the public to sell-sell-sell their bonds. The Fed's market domination has meant massive collateral shortages (as we have detailed previously) and now more even that during last year's taper-tantrum, the repo market is trouble.

The fails are greater than during last year's taper tantrum.
But well below the 2008 crisis levels (for now)
Which is why The Fed is in panic mode to get everyone selling bonds.
As Abate write in his note,

Delivery fails in the Treasury market have surged recently. On Monday, the DTCC reported that incomplete deliveries reached a 52-week high at $120bn (Figure 1). And a week earlier, Treasury fails – as measured by the Federal Reserve – exceeded 6% of daily dealer Treasury transactions volumes. By contrast, usage of the Fed’s securities lending program has been relatively constant at around $15bn/day. Recall that each day the Fed auctions securities from its securities portfolio (at a 5bp fee) for dealers to borrow overnight to cover their shorts. In effect, the securities lending program is a backstop source of specific issue supply that dealers can access temporarily to prevent market disruptions caused by fails or incomplete deliveries.

But what if the Fed does not own any of the issues that dealers need? Indeed, this appears to be driving the surge in recent fails, which have been concentrated in the OTR 5s and 10s. Operation Twist and the sale of all the Fed’s <3y 2016.="" also="" any="" are="" at="" auctions.="" avoids="" buy="" buying="" diminishing="" does="" early="" fact="" fed="" has="" in="" is="" issues="" its="" market="" mature="" maturing="" means="" meant="" not="" otr="" own="" paper="" purchases.="" qe="" repo="" securities="" span="" special="" that="" the="" these="" to="" trading="" treasury="" unable="" until="" without="">
...MORE

BIS: "Overall, it is hard to avoid the sense of a puzzling disconnect between the markets' buoyancy and underlying economic developments globally"

We take the Bank for International Settlements very seriously, links below.
From the Wall Street Journal:

Global Markets' Strength Doesn't Reflect Economic Outlook, Central Banks Say
Investors Could Be Unprepared for Interest-Rate Rises, Says BIS
BRUSSELS—Buoyant financial markets are out of kilter with the shaky global economic and geopolitical outlook, the Bank for International Settlements said in its annual report published Sunday.

The warning from the BIS, a consortium of the world's top central banks, comes as financial markets—from stocks to bonds to commodities—have been enjoying a broad-based rally in the first half of 2014, reflecting investor optimism over expansionary central-bank monetary policies.

"Overall, it is hard to avoid the sense of a puzzling disconnect between the markets' buoyancy and underlying economic developments globally," the report read.

Investor jubilation stems partly from the commitment by the world's largest central banks, such as the U.S. Federal Reserve and European Central Bank, to keep interest rates low while economies continue to recover from recession. Markets have been resilient in the face of uneven growth in the U.S. and Europe, as well as political and economic unrest in Ukraine, the Middle East and elsewhere.

"Financial markets are euphoric, in the grip of an aggressive search for yield…and yet investment in the real economy remains weak while the macroeconomic and geopolitical outlook is still highly uncertain," said Claudio Borio, the head of the BIS's monetary and economic department.

Central bankers meet around every two months at the BIS's headquarters in Basel, Switzerland. The group doesn't set policy, but rather serves as a forum for central bankers to exchange views about financial markets and the global economy.

While global growth has firmed, the BIS said, it is still below its precrisis levels. The world economy was up 3% in the first quarter of 2014 compared with a year earlier—weaker than the 3.9% average growth rate between 1996 and 2006. In some advanced economies, output, productivity and employment remain below their precrisis peak....MORE
Here are the BIS':
Press Release  
Annual General Meeting presentations
Annual Report

In 2011 I tried to communicate my thinking on the BIS, note the dates:
Why You Really, Really Want to Listen to the Bank for International Settlements
On June 26, 2007 (i.e. pre-"Quant-quake", pre-Bear Stearns, pre-ought-eight-near-catastrohe) we posted a short little piece:
"(Off-topic) Banks' banker warns of downturn":
THE risk of a 1930s-style economic slump has been heightened by "euphoric" markets tapping cheap global credit, one of the world's pre-eminent financial institutions has said.
In its annual report, the Bank for International Settlements noted that the conditions that led to the Great Depression of the 1930s and the Asian crises in the 1990s reflected the current environment.
From The Age
On April 28, 2010 it was Greece: "Exposure fears weigh on French, German banks"
From MarketWatch:
Banks with local subsidiaries, government-lending exposure most at risk
Banks in France and Germany have the biggest exposure to Greece of non-Greek lenders are also heavily exposed to other potentially at-risk countries, with those firms that operate local subsidiaries or with big local-authority funding activities likely to face the heaviest losses, analysts said.

The latest figures from the Bank for International Settlements show French banks have $75.2 billion of exposure to Greek borrowers, while the industry in Germany has an exposure of $45 billion. The U.K. trails a relatively distant third, with exposure of $15.1 billion....
There is a reason the BIS is known as the "Central banker's central bank".
Here's their website. I try to visit a couple times per month.
See also:
Dec. 2012
BIS: "Global safe assets"
June 2008
BIS: Don't Worry, Inflation Not a Problem Because Global Economy Will Crash

"Summer in England, 1914"

Yesterday I mentioned the weather and how it shaped recollections of the summer of 1914:
The memory expressed in so many contemporary accounts of England in that last summer of peace was the "picnic-perfect weather".
This has somehow morphed into an idyllic fantasy of a time when everyone was upper-middle class or above, the boys were handsome and sporty, the girls beautiful and witty with not a care in the world, which would be silly except that, with the benefit of hindsight, we know it is a saner remembrance than thinking about most anything that was to come....MORE
Here's an example via Exeter's Professor Kendell.
Summer in England, 1914
Alice Meynell
On London fell a clearer light;
Caressing pencils of the sun
Defined the distances, the white
Houses transfigured one by one,
The 'long, unlovely street' impearled.
O what a sky has walked the world!

Most happy year! And out of town
The hay was prosperous, and the wheat;
The silken harvest climbed the down:
Moon after moon was heavenly-sweet,
Stroking the bread within the sheaves,
Looking 'twixt apples and their leaves....

...MORE 

King George Has Commanded A Week of Mourning

Following up on yesterday's "First World War Centenary: the Assassination of Franz Ferdinand, as it Happened" we have a bit of historical ephemera:
https://o.twimg.com/2/proxy.jpg?t=HBgtaHR0cDovL3N0YXRpYy5vdy5seS9waG90b3Mvb3JpZ2luYWwvNVdUc2UuanBnFNAJFNAPABYAEgA&s=t6rfCMZLBKGShCuAktOppdb9r-Z-3KE6d_ZJWIXGVtM
Although most of the European royals were related, the familial connections between George and F.F. escapes me so this is probably just an empire to empire thing. See also, from our April post "1914: The Gold Standard Is A Dying Regime":
1914 marked the end of the 100 year Pax Britannica, the régime best exemplified  in this very, very rare photograph from a few years earlier:
Nine Kings 1910*

 
*Probably the only time in history the protocol peeps were able to get this many roi boy** types to agree to the order of precedence.
**(pronounced rwa bwas)

May 1910: Nine Kings assembled at Buckingham Palace for the funeral of Edward VII, the Father of George V (centre). From left to right, back row: Haakon VII of Norway, Ferdinand I of Bulgaria, Manuel II of Portugal, Wilhelm II of Germany, George I of Greece and Albert I Of Belgium. Front row: Alphonso XIII of Spain, George V and Frederick VIII of Denmark. The funeral on  20th May was the largest gathering of the European royalty–and its last hurrah, too. Also present at the funeral was Archduke Franz Ferdinand of Austria, whose assassination four years later would spark the WWI–which collapsed many royal dynasties of Europe. Manuel of Portugal would be driven from his throne by revolutionaries within months of this picture. George would be assassinated.  Alphonso, Wilhelm and Ferdinand lost their thrones.-Source
...MORE

Of Sexual Irregularities by Jeremy Bentham – review

From The Guardian:
Jeremy Bentham's revolutionary views on sex have been kept hidden for too long
rowlandson high spirits
Rowlandson's The Devonshire Photograph: Royal Collection Trust
As he lay dying in the spring of 1832, the great philosopher Jeremy Bentham left detailed directions for the preservation of his corpse. First, it was to be publicly dissected in front of an invited audience. Then, the preserved head and skeleton were to be reassembled, clothed, and displayed "in the attitude in which I am sitting when engaged in thought and writing". His desire to be preserved forever was a political statement. As the foremost secular thinker of his time, he wanted to use his body, as he had his mind, to defy religious superstitions and advance real, scientific knowledge. Almost 200 years later, Bentham's "auto-icon" still sits, staring off into space, in the cloisters of University College London.

Nowadays Bentham is hardly a household name. Yet his ideas have proved extraordinarily influential in law, economics, philosophy and politics. Among other things, he was the inventor of the modern doctrine of utilitarianism, the foundational theorist of legal positivism, and the first exponent of cost-benefit analysis. If you've ever weighed up the pros and cons of doing something, you're treading in his footsteps.
In his own time he was celebrated around the globe. Countless practical efforts at social and political reform drew inspiration from him and his disciples (the most famous of whom was John Stuart Mill). From the 1790s on, in Britain, France, Spain, Portugal, Greece and across Latin America, liberal governments and politicians sought his advice and assistance. He was made an honorary citizen of revolutionary France, while the Guatemalan leader José del Valle acclaimed him as "the legislator of the world". Never before or since has the English-speaking world produced a more politically engaged and internationally influential thinker across such a broad range of subjects. The first constitutions of the independent republic of Colombia owed as much to Bentham as do modern theories of animal rights.

After his death, the keepers of his memory invariably sought to portray him as a man whose intellect and concern for the public good were so all‑consuming that there had been no place for sexual passion in his life. As Mill put it, "knowing so little of human feelings, he knew still less of the influences by which those feelings are formed": even in his 80s, "he was a boy". Leslie Stephen thought him "all his life both a philosopher and a child … he was not only never in love, but looks as if he never talked to any woman except his cook and housemaid".

This was a travesty of the truth. In his 20s, Bentham fell deeply in love with Polly Dunkley, the orphaned daughter of an Essex doctor. He wanted to marry her, but because she didn't have enough money, his rich and overbearing father prevented it, and after several years their relationship came to an end. Later in life, after his father's death had made him independently wealthy, Bentham loved and proposed marriage to the clever and radical young aristocrat Caroline Fox, niece of the Whig leader Charles James Fox. When the vivacious Irish painter Amelia Curran, a friend of the Shelleys, came to paint Bentham in the early 1810s, the two of them appear to have had some kind of entanglement. And among his surviving manuscripts are some remarkable notes on sexual techniques, toys and positions whose explicitness would have made Mill blush....MORE
HT: Marginal Revolution

We've looked at Bentham a few times, most recently in "Why Didn't Anyone Tell Me The Dessicated Corpse of Jeremy Bentham Attended A Board Meeting At University College London?":
 Bentham's corpse attends UCL board meeting
181-year-old corpse of Jeremy Bentham attends UCL board meeting
Many board meetings are so tedious that members often end up looking like waxwork dummies.
But at this gathering, the well-dressed gentleman in the corner can be forgiven for looking a little out of it – Jeremy Bentham died 181 years ago....

r>g? A Major Trend Change In Recent Labor Compensation and Corporate Earnings

From The Money Illusion:

The sickening plunge in corporate profits
Here is the evolution of labor compensation and corporate after-tax profits over the past 9 quarters:

Total labor compensation:  $8315.3b.  —->  $9049.5b.  Up 8.8%
After-tax corporate profits:  $1184.6b.  —->  $1099.5b.  Down 7.2%

So why have workers been doing so much better than corporations in recent years?  And why did corporate after-tax profits plunge from $1.3 trillion in 2013 Q4 to $1.1 trillion in 2014 Q1?

I know what you are thinking.  ”I don’t believe those numbers.  Where did you get them?”  I got them from the BEA.  And I don’t believe them either.  And that’s why I don’t believe that nominal GDI fell 1.4% rate in Q1.  Because if you look at components of gross domestic income, you get the following:
Compensation plus depreciation (reliable data):  Up at a 3.7% rate in Q1.

That’s more than 2/3rds of national income.  So basically the unusual (1.4%) plunge in NGDI was a story of plunging corporate profits.  I know of no other data confirming that plunge. Stock prices are soaring.
Corporations have been reporting very strong earnings.  If someone can find non-government data supporting the claim that workers are far outperforming corporations in recent years, I’d love to see the evidence....MORE
HT: Askblog 

Saturday, June 28, 2014

What's Up In the Middle East? Drones Over Baghdad, Saudi Arabia Mobilizes

From Debka:

Mid East is sizzling: Armed US drones over Baghdad, Saudi, Jordanian tanks deploy
http://www.debka.com/dynmedia/photos/2014/06/28/src/iraqsyriaFull.jpg
The Obama administration announced Friday, June 27, that unmanned aerial vehicles flying over Baghdad would henceforth be armed in order to defend the US Embassy in the Green Zone. The embassy was originally assigned the tasks of guardian of Iraq’s central government and symbol of post-Saddam national unity. These roles have remained out of reach ever since the Americans invaded Iraq in 2003. Today, the armed drones overhead are reduced to holding back the Islamic State of Iraq and the Levant (ISIS) and its local Sunni allies from overrunning the Green Zone and seizing the embassy, most of whose 5,000 staff were evacuated as a precaution.

President Barack Obama has again decreed that no US soldiers will take part in combat in Iraq. Therefore, American military personnel on the ground will be there to guide the drones to their targets.

Those targets were defined Saturday, June 28, by Gen. Martin Dempsey, Chairman of the US Joint Chiefs of Staff, as striking at ISIS leaders and defending Iraq’s strategic facilities. He did not elaborate.
debkafile reports that he was referring to the Haditha dam on the Euphrates. ISIS fighters have been battered the town of Haditha on and off for some days.

Its dam is the key to the water supply of most of Iraq, including Baghdad. With its capture, Al Qaeda’s affiliates will have gained control of northern Iraq’s oil refineries and pipeline networks.

US Secretary of State John Kerry in Jordan Friday laid out another piece of the Iraq-Syria imbroglio. He estimated that the Syrian rebel recruits enlisted from among the nearly one million Syrian refugees sheltering in Jordan could be deployed in Iraq for fighting ISIS....MORE
Meanwhile America's Finest News Source is reporting
‘To Defeat Them, I Must Become Them,’
John Kerry Says While Putting On Black Face Mask

Quants: The 'Mad Scientist' of Shroders Likes Emerging Markets

Putting "likes" in the headlines is a mis-usage on my part. Quants don't like or dislike anything.
From Barron's:

Top Quant Buys Emerging Markets
Justin Abercrombie's computer-intensive strategy has posted top-notch returns for Schroders. He likes emerging markets, but is short Tesla. 

Justin Abercrombie is known as "our mad scientist" in the halls of Schroders, the big London-based asset manager that oversees $447 billion in stock and bond funds around the world. 

Abercrombie is the head of the firm's quantitative equity group, which he created when he joined Schroders in 1996. His group runs $42.5 billion in stocks, using a strategy he developed with a sophisticated computer program that employs several different investment models capable of running 90 different metrics to distinguish among 15,000 stocks. In July 2008, he took the reins of the $555 million Schroders Global Value Extension hedge fund, which he revamped with his quant strategy. Remarkably, the moderately sized, strong-performing value fund is long 1,015 stocks and short 244 others. 

Even with that computer firepower, Abercrombie and his team of 30 analysts in London, Sydney, and New York rely on their own judgment at times in guiding their fund. If they detect a number of stocks falling or rising together, they try to figure out if there's a connection. Then they turn on the power -- about 30 value-oriented and roughly 60 quality-oriented screens -- to help them build an investment theme around those stocks. They've recently been buying emerging-market shares because they could identify high-quality stocks that investors were selling for what the researchers believed were the wrong reasons. Similarly, if a bunch of seemingly low-quality or overvalued stocks are rising, Schroders Global Value can short them. One short sale earlier this year was the hugely popular electric-car maker Tesla (TSLA), whose shares sell at a forward multiple of 135 times earnings.

All of the analytics give Abercrombie "an industrialized version of fundamental investing," says the Briton, 44. "That doesn't mean we meet loads and loads of companies. We make sure the processstays on track, and we don't drive into a ditch with excess concentration in financials or another type of stock," says Abercrombie, who spent part of his childhood in Zimbabwe. His father was an engineer.

The fund limits its risks by not allowing a single stock to represent an entire theme. (It shorted Twitter as well as Tesla.) As a result, individual positions are tiny: A stock pick will start off as 0.2% to 0.4% of Global Value's assets; from there it might grow to 0.7% or 0.8%. And yet, since many of these small stakes may be tied to the same theme, they allow Global Value to perform more like a concentrated equity fund than an index fund.  

This system of nano-like parts has worked well to date. From its inception on July 31, 2008, to April 30 this year, Schroders Global Value is up 10.64% annualized net of fees, while the MSCI AC World Index is up only 5.48%. The fund's human override helped it through the financial crisis. The analysts tweaked their models to keep all but the strongest banks out of the portfolio even though the stocks were cheap. Global Value dropped sharply in the crisis but beat the market and then surged 54.5% in 2009, topping the MSCI's 34.6% rise. Most quant funds didn't do nearly as well. 

Abercrombie, who got his masters in econometrics from London Metropolitan University and worked at foreign-currency specialist Pareto Partners before joining Schroders, offers another unusual feature. Global Value doesn't charge performance fees. For American investors in the ultrahigh-net-worth version of the strategy, the management fee is 95 basis points (0.95 percentage point). These investors tend to keep large sums at the fund. 

SO WHERE ARE ABERCROMBIE, his analysts, and their computers finding opportunity? They like emerging markets, which he says move through economic cycles too fast for most investors to time them. By his calculation, emerging markets trade at a discount of about 35% to developed markets, having fallen from a recent premium of about 10%....MUCH MORE

First World War Centenary: the Assassination of Franz Ferdinand, as it Happened

The memory expressed in so many contemporary accounts of England in that last summer of peace was the "picnic-perfect weather".
This has somehow morphed into an idyllic fantasy of a time when everyone was upper-middle class or above, the boys were handsome and sporty, the girls beautiful and witty with not a care in the world, which would be silly except that, with the benefit of hindsight, we know it is a saner remembrance than thinking about most anything that was to come.

And just for for the record, the weather was was pretty nice:
http://www.metoffice.gov.uk/media/pdf/o/t/Jun1914.pdf
http://www.metoffice.gov.uk/media/pdf/o/j/Jul1914.pdf
http://www.metoffice.gov.uk/media/pdf/p/n/Aug1914.pdf

From The Telegraph:
On Sunday June 28 1914 in Sarajevo, Gavrilo Princip fired the shot that killed the Archduke and started the train of events that led to global war. Here is a step by step account of how the dramatic day unfolded
Murder of Archduke Franz Ferdinand Telegraph headline
The Daily Telegraph, June 29 1914 
Our journey starts with an extremely promising omen. Here our car burns, and down there they will throw bombs at us.

Archduke Franz Ferdinand comments wryly on the fact that his journey to Bosnia in June 1914 begins with his car overheating
 
The Archduke: Franz Ferdinand, the bumptious, little-loved 51-year-old nephew of the ailing Emperor Franz Joseph, was heir presumptive to the Austro-Hungarian throne. In 1913 he was made inspector general of the armed forces of Austria-Hungary; it was this role that took him to Bosnia in June 1914, to inspect the army’s summer manoeuvres.
The Duchess: Franz Ferdinand married Countess Sophie Chotek for love, for which both paid a price. She was from a Czech noble family but was deemed unfit to be a Habsburg bride; she had been a lady-in-waiting to Archduchess Isabella, whose sister Franz Ferdinand was expected to marry. Their marriage was morganatic, meaning their children were excluded from the line of succession. Although she was made Duchess of Hohenberg in 1909, the slights were constant at functions such as imperial banquets, where she had to enter the room last.
[Sophie] could never share [Franz Ferdinand’s] rank ... could never share his splendours, could never even sit by his side on any public occasion. There was one loophole ... his wife could enjoy the recognition of his rank when he was acting in a military capacity. Hence, he decided, in 1914, to inspect the army in Bosnia. There, at its capital Sarajevo, the Archduke and his wife could ride in an open carriage side by side ... Thus, for love, did the Archduke go to his death.
AJP Taylor

The family: Three much-loved children, aged between 10 and 12 – Princess Sophie von Hohenberg (1901-1990), Maximilian, Duke of Hohenberg (1902-1962), Prince Ernst von Hohenberg (1904-1954); there was also a stillborn son (d. 1908). On the morning of his death, the Archduke sent a telegram to his children, congratulating Max on his recent exams. 

The empire: 11 nationalities lived under the dual monarchy of Austria-Hungary, with as many grievances – 50 million people across modern-day Austria, Slovakia, the Czech Republic, Hungary, Croatia, Bosnia-Herzegovina, parts of Poland and northern Italy. Bosnia-Herzegovina was the most recent addition, having been annexed in 1908. Franz Ferdinand had opposed the annexation, not from any love for the southern Slavs, but as a pointless provocation of them and of Russia.

The grievance: The formal independence of Serbia had been recognised at the Congress of Berlin in 1878. Bosnian Serbs dreamt of joining it in a Greater Serbia. While Franz Ferdinand had no personal liking for the Serbs, he was not hostile to them: in fact he was thought to be a ‘federalist’ who supported giving more autonomy to Slavic lands. This alarmed the Serbs, who foresaw the creation of a third crown in the Austro-Hungarian empire with Zagreb the possible capital – if that happened the chances of creating Greater Serbia would vanish.

The targeting of the Archduke thus exemplified one abiding strand in the logic of terrorist movements, namely that reformers and moderates are more to be feared than outright enemies and hardliners.
Christopher Clark
 
The martyr: Bogdan Žerajić, a 22-year-old Serb medical student from Herzegovina, resolved to kill Emperor Franz Joseph at the opening of a new parliament in Sarajevo in June 1910. In the event, he fired at Marijan Varešanin, the governor of the province, missed, then killed himself with his final bullet. Vladimir Gaćinović, a driving force behind the liberation movement Mlada Bosna – Young Bosnia – wrote a pamphlet celebrating Žerajić and made a hero of him; his grave became a shrine. Among those inspired by his memory was Gavrilo Princip.

I often spent whole nights there, thinking about our situation, about our miserable conditions... and so it was that I resolved to carry out the assassination.

Gavrilo Princip, the eventual assassin, explains at his trial how he was drawn to Žerajić’s grave
The Black Hand: The annexation of 1908 helped radicalise Serb nationalist groups. On March 3 1911, in a Belgrade apartment, Ujedinjenje ili smrt! – Union or Death! – was formed, the secret society that came to be known as the ‘Black Hand’.
 

 Gen Potiorek and Dragutin Dimitrijevic - 'Apis'
The plot: Just as they were intended to be, the details of the plot are difficult to nail down. The prime mover was Dragutin Dimitrijević, nicknamed ‘Apis’ (after the Egyptian bull god), 36-year-old head of Serbian military intelligence. In May 1903, he had led Serbian officers in overthrowing King Alexander I and his wife Queen Draga, who were murdered. The conspirators installed Peter I as the new king. Apis was present at the founding meeting of the Black Hand in 1911, as was his co-conspirator from 1903, Vojislav Tankosić, who was one of the handlers of the Sarajevo assassins....MUCH MORE
The lie that started the First World War
7:10AM BST 28 Jun 2014

The Telegraph has been doing a daily series:
In yesterday's Travel section:

First World War centenary: Franz Ferdinand’s final journey
100 years ago, Archduke Franz Ferdinand was assassinated, an event that triggered the First World War. Adrian Bridge traces his final journey from Vienna to Sarajevo
First World War centenary: Franz Ferdinand’s final journey Archduke Franz Ferdinand arriving in Sarajevo in 1914 
Daily Telegraph June 25 1914
25 Jun 2014

Friday, June 27, 2014

Breakfast With Bezos

I owe someone a hat tip on this as D is not one of the 1300+ feeds and terminals we use. If we figure it out we'll do the right thing with links, shoutouts etc.
From D (as in Dallas) Magazine:

This Internet Millionaire Has a New Deal For You
The breakfast with Jeff Bezos started awkwardly and ended with an indignity that Matt Rutledge didn’t even catch at first. The waitress at Lola, a trendy Seattle restaurant owned by celebrity chef Tom Douglas, didn’t recognize Bezos. But she sensed she should have. When she stumbled over his name, he explained that his father was Cuban, which, in terms of making a positive ID, probably wasn’t as helpful as saying, “I’m the guy who founded Amazon.” 

Also seated at the table that Monday morning in 2010 were Bezos’ shadow, an up-and-coming Amazon executive who follows Bezos everywhere, watching how the CEO makes decisions; and the corporate development guy who’d put together Amazon’s recent $110 million purchase of Rutledge’s company. Bezos is better at business than he is at small talk. Rutledge would claim he himself has been lucky in the first field and is incompetent in the second. The breakfast unfolded with all the ease and grace of a tango danced by two beginners on painter’s stilts. The development guy did his best to keep things moving while the shadow looked on, learning God knows what.

Rutledge, a charmingly awkward man in his early 40s, had met Bezos more than once prior to the acquisition, each time figuring his job had been to answer questions and be liked. Now that the deal had closed, he saw his role differently. He wanted to have a good meeting, sure, but he didn’t feel the need to impress the billionaire. Bezos asked how Rutledge’s day was going, which struck him as surreal. He’d flown to Seattle on a Sunday just to have breakfast with Bezos on Monday. After breakfast, he would return to Dallas. All that time and travel, and Bezos didn’t have an agenda? Rutledge, having agreed to remain an Amazon employee for three years, had hoped that the meeting would usher him into an inner circle. Bezos would give him the secret scroll of incantations and explain how the two men together would rule the world. Instead, Bezos was idly asking how Rutledge’s day was going? Rutledge wanted to answer, “I don’t know, Jeff. You tell me how my day is going so far.”

At length, after a bit of business talk that maybe resembled a cousin of an actual breakfast meeting, Rutledge blurted out a question that had been troubling him: “Why did you buy Woot?”

For the uninitiated, the term “woot” is an expression of joy that sprang from online role-playing games, a portmanteau of “wow” and “loot.” Rutledge had bought the web address Woot.com in 2003 for $6,000, and the next year launched a site that sold stuff in a way no one had ever tried. Woot offered only one item per day, usually a gadget but maybe a wheel of cheese, and priced it so low that it oftentimes sold out in a matter of hours. When the items didn’t sell out, Woot put them in a Bag of Crap, a bundle that users bought blindly. Customer service pretty much began and ended with the suggestion that the customer put any unwanted or defective item on eBay.

Woot violated nearly every precept of retail. And it was wildly successful. Each weekday just after midnight Central Standard, a new item went up. It was an event. The site attracted a community of geeks who once flooded its discussion forum with 452 comments about a power adapter. At its height, Woot attracted 1 million daily visitors, to whom Rutledge was something of a rock star. By 2008, annual sales had eclipsed $164 million, and Inc. magazine named Woot the fastest-growing private retailer in the country (and the fastest-growing private company in North Texas)....MORE

"How to save $400,000, raise 14 children and buy a $1.3 million farm"

Regular readers know we aren't really into the "Financial Secrets..." thing, although I did do one as part of a "Revealed" obsession, links below.
The reason for posting this piece is to show how important it is to keep outgo lower than income, regardless of what the latter number is.
From MarketWatch:

Financial secrets of the Amish
When the Great Recession hit, the Amish barely blinked. “They put aside 20% of their earnings — most of them were just fine,” says Lorilee Craker, author of “ Money Secrets of the Amish: Finding True Abundance in Simplicity, Sharing, and Saving .” Craker, a Mennonite who grew up in Winnipeg, Manitoba, and now lives in Grand Rapids, Mich., spent several weeks with the Amish and says the experience changed her life.
MarketWatch spoke with Craker about what financial lessons we can learn from the Amish. 

MarketWatch: The Amish didn’t have subprime mortgages, did they?
Craker: No, they did not. I met this one farmer, Amos, near Bird-In-Hand, Pennsylvania. He had saved $400,000 over the course of 20 years while raising 14 children and renting a farm for around $1,800 a month. He was about ready to put down $400,000 on a down payment on his own $1.3 million farm. They’re big on big down payments and being in as little debt as possible. 

MarketWatch: How did he save all that money?
Craker: It’s this incredible bone-deep thrift, which is not really stinginess. It’s a generous frugality. They will go to great lengths to re-use, re-cycle and re-purpose. They don’t do it to be green, they do it to be thrifty. 

MarketWatch: Where do those you interviewed put their savings? Do they invest?
Craker: They only invest in real estate and owning their businesses (carpentry, boat covers, quilts et cetera). They don’t buy stocks and bonds....MORE 
Tangentially related: 

I think it all started with:
...That headline, "Revealed" reminded me of my two post fling with scandal headlines last year:
Darkest secrets, EXPOSED!

“Do you have a moment for the environment, sir?”
“No,” I barked as I evaded her, “I don’t!”...

S&P 500 First Half vs. Second Half Performance Since 1928

From Bespoke Investment Group:
....Throughout this bull market going back to 2009, we've only seen the index fall in the second half in one year -- 2011.  Every other year has seen pretty nice second half gains....MORE  

What's New In News: General Electric Becomes a Content Provider (GE)

From Digiday:

GE becomes legitimate online news publisher
After a very entertaining stunt with Jimmy Fallon, GE, an early adopter of content marketing, has been putting a focus on hard news of late.

GE has used sites like The Economist and Quartz for native advertising to promote itself as a supporter of innovation. But its biggest and most visible effort to date came in March with the introduction of Pressing, a policy news hub that pulls in content from millennial-aimed Vox, where Pressing made a splash as a launch sponsor.

Other content partners are CNN, Politico, NBC News, Slate and Fox News. Pressing is supplemented by articles that are created expressly for GE by Atlantic Media Strategies, Atlantic Media’s custom content arm. The site is labeled “presented by GE,” but the branding is otherwise subtle.

Alexa Christon, manager of global media development for GE, said the goal of Pressing was to promote policy discourse by presenting high-quality editorial content representing a range of views (although except for Fox, the partners skew left). “It’s really about raising that national conversation, right, left, center,” she said.

High-minded talk aside, it’s all part of the evolution by brands to change consumer perception without turning them off with traditional ads. Ultimately, Pressing hopes that by giving people an editorial experience they like, they’ll develop a stronger affinity for the company. Such hubs also allow for constant communication with consumers, rather than one-off campaigns, which is why they’ve been tried by other marketers like Dell, with Tech Page One; Xerox (Real Business) and American Express (Open Forum).

Partnering with existing publishers “keeps the creative bar relatively low,” when the number one issue for companies in doing branded content is actually coming up with content, said Rebecca Lieb, analyst at Altimeter Group.

It’s easy distribution for the publishers, too. They get additional visibility for their content through Pressing ads that are running across the group of sites, as well as the Pressing hub itself. The publishers, in turn, are pushing their Pressing-featured content on Twitter with the #pressing hashtag. Publishers are getting “multiple millions of impressions” through the exchange, according to Christon.

“It’s almost like a traffic exchange, but by GE through ad servers,” said Paul Berry, CEO of Rebel Mouse, which created and manages the Pressing hub....MORE

...Scholes: Kurt, to begin with, I am curious myself about how you got involved in this business of writing. Did you always mean to be a writer?

Kurt: No, well, I think it was the only out for me. I had a very disagreeable job at General Electric, and this was an out.

Scholes: Are there agreeable jobs at General Electric?

Kurt: Oh yes, I think there are. I think president of General Electric is a very agreeable job, and also chairman of the board.

Scholes: And the rest of them, though, are more or less disagreeable.

Kurt: Well, I was quite low on the rungs of advancement there, and I was selling stories to Collier's and The Saturday Evening Post and was very happy to leave rather than to get to the top the hard way....

-A Talk with Kurt Vonnegut, Jr.
Robert Scholes/1973
In The Vonnegut Statement, ed. Jerome Klinkowitz and John Sorrier.
New York: Delacorte/Seymour Lawrence, 1973, pp. 90-118.
Reprinted with the permission of Delacorte/Seymour Lawrence
Copyright © 1973.