After being put on the ropes by an OPEC strategy that forced the price of oil down below $30 a barrel in 2016, U.S. shale oil producers are back, and they are producing at record rates. Christopher Alessi reports: U.S. shale companies are churning out crude oil at a record pace that could overwhelm global demand and reverse the oil market’s fragile recovery, a top energy-market observer said Tuesday. U.S. shale production is growing faster in 2018 than it did even during the boom years of $100 a barrel oil prices from 2011 to 2014, said the International Energy Agency in its closely … [Read more...]
Archives for February 2018
Bitcoin: Bubble, Ponzi Scheme, and Environmental Disaster
Bitcoin is a “combination of a bubble, a Ponzi scheme and an environmental disaster,” a top central-banking official recently cautioned, referring to the large amount of electricity needed to create bitcoin. You don’t have to tell that to the residents in Wenatchee, Washington, where a bitcoin invasion is under way. Why? Because the electricity is cheap. “Home to hydroelectric dams that harness the flow of the Columbia River, north central Washington has some of the cheapest power in the U.S. That has made the largely rural area best known for its apple orchards a magnet for bitcoin … [Read more...]
Shale Oil Production Booming
The WSJ reports here that shale oil production is growing faster this year than it did when oil was at $100 per barrel. The breakeven price for shale producers is now much lower than it was in 2014. Shale producers “cut costs dramatically” during the nearly three-year-long oil industry downturn, the IEA said. They then took advantage of the Organization of the Petroleum Exporting Countries cartel’s decision to cut its own output, which helped prices rise from the low $40s to over $70 a barrel as recently as late last month. “All the indicators that suggest continued fast growth in the U.S. … [Read more...]
Amazon Will Begin Deliveries from Whole Foods
Amazon is beginning to incorporate Whole Foods into its Prime Now delivery program. Prime Now offers one and two hour delivery options in certain cities. Laura Stevens reports for The Wall Street Journal that Amazon plans to expand its efforts. The online retail giant will add Whole Foods to its one- and two-hour delivery option, Prime Now, in the grocer’s hometown of Austin, Texas, as well as Dallas, Virginia Beach, Va. and Cincinnati, Ohio. Stephenie Landry, the Amazon vice president who oversees Prime Now, said it plans to expand the effort, but declined to say how quickly. She noted … [Read more...]
Stand with Rand: Spending Matters
“I simply asked for one thing in this broken process: a 15-minute vote on whether those caps should or should not be broken. The furor this request set off among leadership, the wailing and screeching among Big Government advocates in Congress and in the media — well, you would think I had asked them to shut down forever,” writes Senator Rand Paul in Time. He wanted them to act like spending matters, “Like the process matters.” “The sad irony is that December’s Republican tax cut is supposed to save Americans $1.5 trillion over 10 years. But the new spending is essentially a $1.5 trillion … [Read more...]
Could Amazon Ever Replace UPS or FedEx?
Does Amazon have a sliver of a chance of amassing the scale necessary to replace UPS or FedEx? The two shipping companies have a global reach built up over decades. The Wall Street Journal reports that it may be hard to beat the two big players in the industry. Amazon has only leased up to 40 planes and has roughly 300 warehouses in the U.S., including fulfillment centers, sortation centers and delivery stations, according to supply-chain consultancy MWPVL International Inc. The company today mostly contracts and leases with delivery couriers rather than owning its own assets, a limiting … [Read more...]
Steam Rolled
Shorting volatility was a wildly profitable strategy over the last two years…until it wasn’t. Inverse VIX investors were wiped out in about a week. I can think of more than a few strategies that are employed widely by investors that have a similarly skewed risk profile. … [Read more...]
Meet the Man Behind the Largest Private Investment Fund, Part II
When the 59-year old head of Softbank, Masayoshi Son, met with the 31-year old deputy crown prince of Saudi Arabia, Mohammed bin Salman (MbS) for 45 minutes in Tokyo, MbS committed $45 billion to Son’s Vision Fund. "Forty-five minutes, $45 billion," Son said in September. "One billion dollars per minute." That caught the attention of the investment industry—where your value is measured by your next deal—the fear of missing out is a powerful emotion....Read the rest of this story by clicking here. … [Read more...]
There Were Red Flags for Volatility Traders
Back in September of last year I pointed out the one-time Target manager who was starting his own hedge fund to wager against volatility. He had lined up $100 million to bet invest. I said that there had been many disturbing trends during this bull market, but that one took the cake. Now you can see why. The VIX index has spiked, and those who have persistently been betting against volatility are getting hammered. … [Read more...]
Amazon to Directly Compete with UPS and FedEx
Amazon is ready to launch its own delivery service to businesses that will compete directly with UPS and FedEx. The new service will be called Shipping with Amazon, and will retrieve packages from businesses and ship them directly to consumers. The service will begin operations in Los Angeles and grow from there. Laura Stevens reports for The Wall Street Journal: While the program is being piloted with the company’s third-party sellers, it is envisioned to eventually be opened to other businesses too, according to some of the people. Amazon is planning to undercut UPS and FedEx on pricing, … [Read more...]