Author: admin

India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues

Authored by Zainab Calcuttawala via OilPrice.com,

Venezuela’s Indian, Chinese, and American clients are complaining that crude shipments from PDVSA are poor in quality and are resulting in demands for discounts and returned shipments, according to a new report by Reuters, including interviews with over a dozen sources and supporting documents.

The disputes involve the contamination of crude with water, soil, and other minerals that make it difficult for refineries to effectively process crude for mass consumption. 

But the sources speculated that the low quality of shipments was due to lack of upkeep at PDVSA facilities as officials try to cut corners to save operating costs.

In addition, the state-owned company lacks the resources to buy chemicals that aid in the long-term storage of crude before shipment. 

American refiner Phillips 66 has cancelled at least eight shipments totaling 4.4 million barrels in the first half of the year due to the low quality of crude coming in from Venezuela, official PDVSA documents show. 

The China National Petroleum Company (CNPC) complained this year that Venezuelan shipments had been excessively diluted with water, while India’s Reliance Industries complained of other quality issues, according to current and former PDVSA employees. 

“We’re refitting chemical injection points, recouping pumps and storage tanks,” one worker told Reuters.

 

“But without chemicals, we can’t do anything.” 

Another employee indicated the deterioration of Venezuelan crude quality began as early as two years ago, but acute budget shortfalls in recent months accelerated the issues.

PDVSA’s issues are twofold: logistical and political. In the U.S., Senators have been pressing the Trump Administration to review the chances of Russia’s Rosneft acquiring Venezuela’s PDVSA and its U.S. business, Citgo. Marco Rubio and Bob Menendez believe a change in the ownership of Citgo’s assets would constitute a security risk, Reuters reported last month.

The White House has already authorized sanctions against Caracas and PDVSA, based on the continuation of President Nichols Maduro’s regime despite severe protests by Venezuelans over the past year.

via http://ift.tt/2yAous7 Tyler Durden

Politicians—Unsurprisingly—Want to Regulate Political Ads on Facebook

Sen. John McCainThe obsession with the idea that the Russians are responsible for President Donald Trump’s election is now being used to push for more regulation of social media.

Sens. Mark Warner (D-Va.) and Amy Klobuchar (D-Minn.) are being joined by Sen. John McCain (R-Ariz.) to make their effort to regulate online political advertising a bipartisan affair.

Today they plan to introduce what they’re calling the Honest Ads Act, which aims to introduce ad disclosure regulations similar to those for television. The text of the bill is not yet available, but here’s a summary of the contents via Quartz:

  • Make public digital copies of any advertisement these groups purchase, including the dates and times published.
  • Include a description of the audience and political ad target, and the number of times it was viewed.
  • Disclose contact information for the ads’ purchaser, and how much they paid for the ad.
  • Make “reasonable efforts” to ensure that any political ads or messaging isn’t purchased by a foreign national, directly or indirectly.

The justification for the bill is the discovery that a Russian company linked to the Kremlin spent $100,000 on Facebook ads, which is chump change when compared to domestic campaign advertising spending.

But let’s be clear here: Russian meddling is just being used as an excuse to do what politicians and federal agencies have wanted for a long time—to regulate how people campaign online. As The New York Times notes, the Federal Election Commission has been attempting to regulate online political advertising for years, and tech companies have been resisting.

As is often the case when lawmakers attempt to regulate campaign advertising, there’s very little thought about how these lawmakers are not exactly disinterested parties. I mean, it’s not terribly surprising that McCain, in a permanent feud with Trump, might want to find ways to work with the Democrats to control online political ads.

Restrictions on campaign advertising pretty much always benefit incumbents and powerful parties, because they already have a significant amount of money, influence, and media access. Challengers have an uphill climb, and anything that controls campaign expenditures and advertising methods makes that climb steeper.

And in the end, all that Russian advertising “meddling” was about taking advantage of Americans’ dissatisfaction with choices made by established political interests.

It’s telling how much of the coverage of Russian interference is unwilling to look at the reasons it may have worked, and instead revolves around how to stop it. When the discussion does explore the meaning of the meddling, the coverage almost always announces that Russia is “taking advantage” of cultural divisions. At The Washington Post, Casey Michel breathlessly declares that a Russian-run group on Facebook encouraged Texas to secede from the union, and that Facebook allowing that to happen represents “one of the greatest frauds in recent American history.” But the Texas secession movement is absolutely not new, and that fact that this particular effort wasn’t a real thing means nothing in terms about how many Texans feel about their relationship to the federal government.

Remember, the official report from our national intelligence agencies on Russia’s involvement on the presidential election, a summary of which was released back in January, focused heavily on how the country, via RT, was giving voice to Americans who were dissatisfied with the government. One of its examples was that RT brought in third-party political candidates and pointed out that many Americans were unhappy with the two parties.

As I noted then:

I don’t dispute the findings here about RT, but look at those examples and they could apply not just to Reason but to media outlets of varying ideological positions within America. Americans are abandoning the two political parties. People are genuinely upset about surveillance and police brutality. If this is an attempt to sway the public to be concerned about RT, it’s not terribly persuasive.

The problem isn’t that the Russians attempted to influence the election. The problem was that many Americans found this “fraud” to be compelling. Michel suggests that Americans who fall for these frauds are “gullible.” But that, again, is a way of just dismissing the political fractures themselves.

from Hit & Run http://ift.tt/2yApFbh
via IFTTT

How Niger Is Kind of Like Benghazi

It’s always exciting to watch a partisan talking point emerge in real time. Take the tortured analogy between the 2012 attack on the U.S. consulate in Benghazi and the ambush that just killed four American soldiers in Niger. As the talking point metastasizes on Twitter, it’s already being echoed by a member of Congress, with Rep. Frederica Wilson (D-Fla.) declaring that Niger “might wind up to be Mr. Trump’s Benghazi.”

It isn’t what she means, but there is one fundamental similarity between the two attacks: Both were the foreseeable effects of aimless intervention. The best way to prevent such meaningless deaths is to stop such meaningless interventions before they get off the ground.

President George W. Bush first sent U.S. troops to Niger in 2005. President Barack Obama sent an additional 100 special forces there in 2013. About 800 American troops there now. The U.S. is building a second, $100 million drone base in the country.

With so much military activity in Niger, American fatalities were bound to happen. A lot of questions remain about this particular ambush; the Senate Armed Services Committee, chaired by Sen. John McCain (R-Ariz.), is likely to seek more details about how the attack occurred. What McCain will almost certainly not address is the point of the U.S. mission in Niger in the first place, just as none of the investigations into Benghazi bothered to reflect on how the U.S.-backed intervention in Libya destabilized the country and created the environment in which Benghazi could take place.

The ranking Democrat on the committee, Sen. Jack Reed (D-R.I.), signaled that he might look at the broader issues at play. “I think the administration has to be more clear about our role in Niger and our role in other areas in Africa and other parts of the globe,” Reed said on CNN. “They have to connect it to a strategy. They should do that. I think that the inattention to this issue is not acceptable.”

That’s true. But Reed isn’t exactly innocent of inattention himself. He has been in the Senate since 1997, but he didn’t raise concerns about the U.S. presence in Niger before this week.

In the immediate aftermath of the Niger ambush, I predicted that most Americans would forget about the U.S. troops in Niger soon enough. I was almost right—the issue had in fact receded into the background again before Trump blasted it back into the news cycle by making what should’ve been routine condolences into the latest episode of the Trump Show.

The four American troops killed in Niger are not the first U.S. service members killed outside of the battlefields of Afghanistan and Iraq since 9/11. They are not even the first American fatalities outside the two major wars since Trump took office.

A Navy SEAL was killed in action in Somalia in May to little fanfare. Trump did not remark on the death, either adeptly or boorishly. So the U.S. presence in Somalia, which Trump has expanded, did not make a major impression on the American news cycle. This weekend’s truck bombing in Mogadishu, Somalia, killed nearly 300 people, but it quickly fell off the news cycle as well. Revelations that the bombing may have been a retaliation for a failed U.S. operation did not substantively register either.

There are also a number of important differences between the ambush in Niger and the attack in Benghazi, most of which serve to display the craven opportunism at work in tying the two together.

In Niger, hundreds of U.S. troops are on the ground to help local forces fight terrorists. It’s not surprising some terrorists would shoot back, and that sometimes they’d hit. It’s remarkable that there have not been more casualties.

Benghazi was not the same kind of war zone. The U.S. government had spent a year at that point insisting its intervention in the Libyan civil war had not destabilized the country, despite all the evidence to the contrary. Clinton herself pushed the idea that the attack on the consulate in Benghazi was a spontaneous one, linked to other protests, some of which were violent, at embassies across the Muslim world that day. The Obama administration ended up trying to blame a video.

Obama himself eventually expressed regret about the way the intervention in Libya (whose aftermath saw weapons and fighters flow throughout the region) was handled. But Clinton insisted until the bitter end that she was not to blame for what happened in the country.

The ambush in Niger ought to serve as a clarion call to reevaluate the war on terror in Africa and around the world, and to push Congress to assert its constitutional role in U.S. foreign policy. If instead it just becomes another tool for berating political opponents, it will be as much a failure as the post-Benghazi debate—and a greater disservice to the troops than any boorish comment Trump makes to a grieving widow.

from Hit & Run http://ift.tt/2xRq0Ta
via IFTTT

The Last Time Stocks Were This Calm, England Won The World Cup

1966 was a big year... Miranda Rights came into being in America, Vietnam War protests raged, the US department of Transportation was created, the mini skirt was invented, Batman and Star Trek debuts, NASA launches Lunar Orbiter 1 – the first U.S. spacecraft to orbit the Moon, race riots raged in Atlanta, Ronald Reagan entered politics becoming Governor of California, and (for some) most importantly, England defeated Germany to win the 'Football' World Cup.

However, there is one more thing – 1966 was the last time that the stock market 'calmness' was as low as it is today…

To put that into context…

 

Furthermore, as New River Investments notes, "It's difficult to overstate how low S&P500 realized volatility has been and how rare it is for it to be low for so long."

This is the longest period for realized vol to be below its historical media since the '90s…

This is the longest period with volatility below 10% since the 1960s…

The reason we bring this up is simple – we have been noting the massive decoupling in the last month between stock price levels and implied risk levels…

This has been shrugged off by some with simpleton statements like "well, vol doesn't go much lower than 10" – but of course that is all relative. With realized volatility collapsing to near record lows, the risk premium for future volatility is actually notably high…

In other words – that gaping chasm between prices and risk is 'real' – which perhaps explains why professionals have never been more relatively long 'crash risk'…

via http://ift.tt/2yUeFXE Tyler Durden

Former FEC Chair Demands Internet “Disinformation” Crackdown In Major Threat To Free Speech

Authored by Jonathan Turley via JonathanTurley.org,

In one of the most reckless and chilling attacks on free speech, the former chair of the Federal Election Commission (FEC) and Berkeley lecturer Ann Ravel is pushing for a federal crackdown on “disinformation” on the Internet – a term that she conspicuously fails to concretely define. 

Ravel is pushing a proposal that she laid out in a a paper co-author with Abby K. Wood, an associate professor at the University of Southern California, and Irina Dykhne, a student at USC Gould School of Law.  To combat “fake news,” Ravel and her co-authors would undermine the use of the Internet as a forum for free speech. 

The regulation would include the targeting of people who share stories deemed fake or disinformation by government regulators.  The irony is that such figures are decrying Russian interference with our system and responding by curtailing free speech – something Vladimir Putin would certainly applaud.

In addition to new rules on paid ads, Ravel wants fake news to be regulated under her proposal titled Fool Me Once: The Case for Government Regulation of ‘Fake News.” If adopted, a “social media user” would be flagged for sharing anything deemed false by regulators:

“after a social media user clicks ‘share’ on a disputed item (if the platforms do not remove them and only label them as disputed), government can require that the user be reminded of the definition of libel against a public figure. Libel of public figures requires ‘actual malice,’ defined as knowledge of falsity or reckless disregard for the truth.

 

Sharing an item that has been flagged as untrue might trigger liability under libel laws.”

Without clearly defining “disinformation,” Ravel would give bureaucrats the power to label postings as false and harass those who share such information.  Of course, this would also involve a massive databanks of collections ads and discussions by the government.

The authors of the proposal see greater government regulation as the solution to what they describe as “informational deficits” in the largely free exchanges of the Internet.  There is a far dosage of doublespeak in the article.  Rather than refer to the new regulation as guaranteeing greater government control, the authors insist that “government regulations . . .  improve transparency.” Rather than talk of government controls over speech, the authors talk about the government “nudging” otherwise ignorant readers and commentators.  Here is the worrisome section:

Government regulations to help voters avoid spreading disinformation

 

Educate social media users. Social media users can unintentionally spread disinformation when they interact with it in their newsfeeds. Depending on their security settings, their entire online social network can see items that they interact with (by “liking” or commenting), even if they are expressing their opposition to the content. Social media users should not interact with disinformation in their feeds at all (aside from flagging it for review by third party fact checkers). Government should require platforms to regularly remind social media users about not interacting with disinformation.

 

Similarly, after a social media user clicks “share” on a disputed item (if the platforms do not remove them and only label them as disputed), government can require that the user be reminded of the definition of libel against a public figure. Libel of public figures requires “actual malice”, defined as knowledge of falsity or reckless disregard for the truth. Sharing an item that has been flagged as untrue might trigger liability under libel laws.

 

Nudge social media users to not view disputed content. Lawmakers should require platforms to provide an opt-in (or, more weakly, opt-out) system for viewing disputed content and periodically remind users of their options. We think the courts should uphold this as a constitutional regulation of political speech, but we acknowledge that it is a closer question than the more straightforward disclosure regulations above. The most analogous cases are to commercial speech cases (AdChoices and Do Not Call Registry, which was upheld). Commercial speech receives less protection than political speech.

I have been writing about the threat to free speech coming increasingly from the left, including Democratic politicians.  The implications of such controls are being dismissed in the pursuit of new specters of “fake news” or “microaggressions” or “disinformation.”  The result has been a comprehensive assault on free speech from college campuses to the Internet to social media.  What is particularly worrisome is the targeting of the Internet, which remains the single greatest advancement of free speech of our generation.  Not surprisingly, governments see the Internet as a threat while others seeks to control its message.

What Ravel and her co-authors are suggesting is a need to label certain views as “false” while giving not-so-subtle threats of legal action for those who share such information.  Once the non-threatening language of “nudges” and “transparency” are stripped away, the proposal’s true meaning is laid bare as a potentially radical change in government regulation over free speech and association.

via http://ift.tt/2xR3v0F Tyler Durden

Do Psychedelics Make People Less Likely to Commit Crimes?

People who have used psychedelics are less likely to commit property and violent crimes than people who haven’t, according to a new analysis of data from the National Survey on Drug Use and Health (NSDUH). A press release from the University of Alabama at Birmingham, where three of the study’s four authors work, says these findings “suggest that treatments making use of classic psychedelics like psilocybin could well hold promise in reducing criminal behavior.” Although I agree that psychedelic-assisted therapy looks promising based on other studies, this interpretation of the survey data seems dubious to me, mirroring the faulty logic of prohibitionists who assume that associations between drug use and antisocial behavior are causal.

UAB psychologist Peter Hendricks and his colleagues looked at 13 years of NSDUH data and found that “lifetime classic psychedelic use [i.e., use of ayahuasca, dimethyltryptamine, LSD, mescaline, peyote or San Pedro cactus, or psilocybin mushrooms] was associated with a 27% decreased odds of past year larceny/theft, a 12% decreased odds of past year assault, a 22% decreased odds of past year arrest for a property crime, and an 18% decreased odds of past year arrest for a violent crime.” That is after controlling for sex, race, education, income, marital status, religiosity, and several other potential confounding variables.

Hendricks et al. say their results “were consistent with a protective effect of psilocybin for antisocial criminal behavior” and “contribute to a compelling rationale for the initiation of clinical research with classic psychedelics, including psilocybin, in forensic settings.” They argue that the associations they found bolster the evidence from three studies conducted in the 1960s indicating that psychedelics might help rehabilitate criminal offenders: two LSD studies with tiny samples and one psilocybin study with a larger but still small sample. The latter study, known as the Concord Prison Experiment, was conducted by Timothy Leary. Hendricks et al. note that a 1998 review of the Concord Prison Experiment by Rick Doblin, executive director of the Multidisciplinary Association for Psychedelic Studies, “concluded that these findings were overstated, inadequate support was provided outside of psilocybin sessions, and that serious methodological flaws preclude any conclusions.”

It is certainly worth trying to replicate those early, tentative findings. But so far the evidence that psychedelics curb criminal tendencies is thin, and the NSDUH results do not make it much thicker, because they could be due to pre-existing differences in the sort of people who are inclined to try psychedelics. Only 15 percent of Americans say they have tried psychedelics, and they are bound to be different from the 85 percent who haven’t in ways that a) cannot be readily measured and b) may affect their propensity to commit crimes. In seems plausible, for instance, that they are, on average, more introspective, more patient, more tolerant, and more open to alternative perspectives, even before they have dropped acid, drunk ayahuasca, or eaten magic mushrooms.

Hendricks et al. concede that cross-sectional data like the NSDUH results “limit causal inferences,” that “a number of shared underlying or ‘third’ variables may be responsible for the associations reported here,” and that “we could not evaluate potential mechanisms of action underlying the associations of classic psychedelic use with criminal behavior.” The importance of those points becomes clearer when you consider what NSDUH tells us about people who use other illegal drugs, who unlike the psychedelic fans are more likely to commit property and violent crimes.

Hendricks and his colleagues found that people who had tried heroin were almost twice as likely to be arrested for property crimes as people who hadn’t. You might assume that association has something to do with heavy users who steal to support their habits (a problem magnified by prohibition-inflated prices). But marijuana users were also about twice as likely to be arrested for property crimes, which is probably not due to habit-financing theft.

Prohibitionists might argue that marijuana makes people lazy, unemployable, and therefore financially stressed. But as with psychedelics, there are alternative explanations. Maybe marijuana use and theft are both related to a general disrespect for the law, or maybe they both reflect pre-existing social, economic, or psychological difficulties.

People who have tried marijuana are also twice as likely as people who haven’t to be arrested for a violent crime—more likely than people who have used heroin, PCP, cocaine, or “other stimulants,” including methamphetamine. In fact, people who have tried “other stimulants” are not significantly more likely to report an arrest for a violent crime than people who haven’t. These findings seem inconsistent with current beliefs about how different drugs affect people’s behavior.

In any case, it is surely risky to assume that the association between marijuana use and crime reflects a cause-and-effect relationship. It is equally risky to make the same assumption about the negative correlation between psychedelic use and crime.

from Hit & Run http://ift.tt/2x8BBh8
via IFTTT

This “Female Libertarian” Costume Will Blow Your Mind

When Halloween costumes are in the news, it’s usually because they are igniting semi-riots on college campuses or being mocked for their misguided “sexiness” (click here, but what is seen can’t be unseen).

Now, thanks to web developer to the stars P.J. Doland, there’s a great new way to look at Halloween costumes, or at least those getups that flip the bird to repressive intellectual property laws. “I love the names of these shady unlicensed Halloween costumes—particularly Katniss Everdeen as ‘Female Libertarian,'” tweets Doland.

“Female Libertarian” is indeed great (there’s a reason it’s sold out!), but the whole collection is an embarrassment of riches which, if I can push it a bit, seems to have been curated by someone with movement sympathies. Hence the “Condescending Online Man” sporting a popular-among-annoying-libertarians Guy Fawkes’ mask, casting Uma Thurman’s Pulp Ficton character as a “heroin diva,” and the naming of Doc from Back To the Future as “‘The Better Future’ Bernie Sanders.”

I haven’t been able to find the actual source catalog for this or other knock-off costumes and thus presume them to be fakes. But then again, we’re only in it for the laffs, right?

from Hit & Run http://ift.tt/2yA0cgp
via IFTTT

The World’s Largest ICO Is Imploding After Just 3 Months

Earlier this summer, Tezos smashed existing sales records in the white-hot IPO market after the company’s pitch to build a better blockchain for cryptocurrencies made it one of the buzziest ICOs in the world. As we noted at the time, the company capitalized on that buzz by courting VC firms and other institutional investors with a $50 million token pre-sale. After the company opened up selling to the broader public, demand soared as investors greedily bought up tokens in spite of glitches that threatened to derail the sale early on. By the end of its weeks-long token sale in July, Tezos had sold more than $230 million.

Now, Tezos is proving that authorities in the US and China were on to something when they decided to crack down on the ICO market, which has become a cesspool of fraud and abuse. To wit, the company's management revealed this week that progress on its vaunted product has stalled as it has struggled to recruit engineering talent, and an acrimonious dispute between several of the company’s leading figures has spilled out into the open.

As WSJ’s Paul Vigna reports, “a battle between the founders of the company and the head of the Swiss foundation they installed to give it more independence has put most trading of Tezos coins on ice, possibly until early next year.”

The shakeup started after Tezos founders Arthur and Kathleen Breitman reported the delays in a blog post published Wednesday. But even more alarming, the pair accused Johann Gevers, the head of a Swiss foundation which oversees their funds, of attempting to overpay himself using the massive pot of investor capital – despite the fact that the company will likely blow through its promised deadline of allocating tokens to buyers by December (the tokens have yet to be created).

In early September we became aware that the president of the Tezos Foundation, Johann Gevers, engaged in an attempt at self-dealing, misrepresenting to the council the value of a bonus he attempted to grant himself. We have been working with the Tezos foundation to resolve the matter and have advocated for his removal from the foundation council. We are confident in the council’s ability to handle this sensitive matter with care and diligence. In the meantime, Johann’s operational role in the foundation has been suspended, pending an investigation by the council’s auditor.

The news sent Tezos futures contracts trading on BitMex, an exchange known for its cryptocurrency futures products, tumbling more than 50% as traders unwound bets the project would be launched before the end of the year, as Bloomberg pointed out.

Tezos’s struggles underscore the biggest flaw in the ICO market: Investors keep throwing capital at companies hoping to luck into the next bitcoin, even though most companies don’t have a working product and many have relied on “white papers” fleshing out their ideas to market their tokens, a strategy that has been surprisingly (or perhaps unsurprisingly) successful. To wit, ICOs have raised more than $3 billion this year according to Bloomberg, far surpassing Pitchbook analysts’ expectations for $1.7 billion by the end of the year.

The ICO was run by the Tezos foundation, which is based in Zug, Switzerland. Most ICOs are built on top of Ethereum’s platform. However, the impact on ether tokens was fleeting, with ether seeing a slight dip before moving higher early Thursday.

Under Swiss law, the Tezos foundation is supposed to be independent of the company that owns the nascent Tezos software. Because of this, the foundation holds all of the funds raised, which have mushroomed to more than $400 million in value because the contributions were made in two cryptocurrencies – bitcoin and ether – which have appreciated sharply in the past few months. But the battle between the Breitmans and the Gevers is threatening to derail the whole project, according to Reuters.

Reuters is also reporting that the Breitmans, who first opened a corporation in Delaware to work on the Tezos code, failed to make certain regulatory disclosures made necessary by Arthur Breitmans’ employment at Morgan Stanley.

Reuters reviewed a copy of a “Tezos Business Plan” from early 2015, which listed Breitman as chief executive. The plan projected that if the company survived 15 years, it would be worth between $2 billion and $20 billion. The budget called for paying Breitman $212,180 in salary by year three. In August 2015, Breitman, who was still working at Morgan Stanley, set up a company in Delaware called Dynamic Ledger Solutions Inc, or DLS, to develop Tezos. He listed himself as chief executive.

The U.S. Financial Industry Regulatory Authority (FINRA) requires registered securities professionals to provide prior written notice to their employer to conduct outside business activities if there is “reasonable expectation of compensation.” According to FINRA records, Breitman was registered and did not report any “other business activities.” Morgan Stanley and FINRA declined to comment.

Reuters also revealed that Tezos exaggerated its progress in its early days, following a seed investment by noted VC and blockchain enthusiast Tim Draper.

In pitching the story to Reuters, John O’Brien, a principal of Strange Brew, had made claims about Tezos’ progress. He wrote: “The applications of Tezos, ranging from derivatives settlement to micro-insurance, are real and recognized by industry giants. Ernst & Young, Deloitte, LexiFi, etc. have adopted Tezos in their development environments and labs.”

On Oct. 3, a spokeswoman for the accounting firm Ernst & Young told Reuters: “The statement is not correct. EY has not adopted Tezos.” A spokesman for Deloitte said Tezos’ code is “one of many technologies we’re considering” with blockchain, but it’s “still early stage and we haven’t used the technology for a client project.”

With the SEC already having filed the first civil charges against a man who launched two ICOs that the agency claims were completely fraudulent. If Tezos were the subject of regulatory action – the company’s founders said they chose to base the project in Switzerland because it didn’t have “too much oversight” – or even if it were to collapse in a heap of broken promises, its collapse has the potential to crash the whole ICO market.


Kathleen Breitman

Then again, given the resilience of other cryptocurrencies, it’s difficult to discern whether Tezos might become the ICO equivalent of Mt. Gox, or whether it will ultimately be remembered as a blip.

At this point, only one thing is certain: Tezos investors who’d hoped to receive their coins by the end of the year are bound to be disappointed.

via http://ift.tt/2l0OOqQ Tyler Durden

What Dennis Gartman Remembers Most From “Black Monday”

Excerpted from the latest Gartman Letter, and presented without commentary (but with some highlighting).

ON THIS HORRIBLE ANNIVERSARY AND WHAT WE REMEMBER MOST:

Everyone seems to be writing about what they remember about the Crash of ’87 and we remember it well… very… and breaking with our common use of the “royal we” in our commentary and using the personal pronouns instead, from this point onward…what I remember is the sheer irrationality of the day in question; the utter and sheer panic by those who had in the past never panicked and the effect it had upon me.

On the Friday before the “Crash” I was in Raleigh, North Carolina with close friends from my days at the CBOT of several years earlier: Brian O’Doherty, who played football for our beloved NC State University and who traded in the bond pit… and Carl Boraiko… one the best floor traders in T-notes, Bonds and the NOB spread I’ve had the privilege of knowing… and several others. We were there to go to the NC State v. lemson game on Saturday and  were playing golf at the Duke University Golf Course on Friday when one of us noticed that the Dow was “Down a hundred!!” that afternoon as we checked our phone pagers that were suddenly paging us all, for there were not Iphones then. The Dow had never been down 100 point before… ever! It was shocking, to say the very least. As a former floor trader and having been writing TGL for three years at the time, and having warned previously about the dangers of “portfolio insurance” I was fearful… very… about what might happen on Monday’s opening as a result.

Going into Monday’s opening, I’d written myself a note to buy KC Value Line Futures and to sell S&P futures in equal dollar sums, knowing/believing that the real selling by the portfolio insurers would be in the S&P futures. Normally I traded only 5-10 “lots” when trading net open positions, however I chose that morning to buy 50 Value Line futures and to sell about 50 of the S&P futures because the “risk” on the spread was obviously less than the risk on outright positions… usually.

The violence of the opening caught everyone wholly off guard and the position moved against me by several thousands of dollars initially but was moving back in my favor quickly by 9:30 a.m. as the NYSE was about to open. However, I got a frenzied phone call from my clearing firm at the time wanting 100% margin on both sides of the trade by 10:00 to be wired to them or they were going to sell me out… immediately! They did not want regular futures spread margins; nor did they want full futures margin on each side; they wanted full 100% payment for the face value of both sides of the trade… in effect about $5 million or so, which of course I did not have. I was sold out… at 10:01 when I phoned to say I could not meet their demand. I lost several thousands of dollars that day… a meaningful sum of money then..

A few hours later as the panic truly began in earnest and as the selling in the S&P futures reached a frenzy, the trade was “worth” several hundred thousand dollars… or would have been worth several hundred thousand dollars… in my favor for what I had expected to happen was in fact happening. The spread between the S&P futures and the Value Line moved violently in the latter’s favor. By Tuesday morning’s panic opening it would have nearly doubled again, but it made no difference to me. I was out!

In retrospect, the clearing firm in question was doing what it needed to do to make certain that its own solvency was assured and in retrospect this was rational.

What did I learn? I learned that markets can indeed be irrational; I learned that one has no choice but to expect the irrational and to prepare for it. I learned that amidst panic anything… absolutely ANYTHING… is possible and I learned to be prepared. Oh, and I learned that I never, ever, EVER want to go through that sort of day again… ever!

via http://ift.tt/2xTh2ty Tyler Durden

GDP Is Bogus: Here’s Why

Authored by Charles Hugh Smith via OfTwoMinds blog,

Here's a chart of our fabulous always-higher GDP, adjusted for another bogus metric, official inflation.

The theme this week is The Rot Within.

The rot eating away at our society and economy is typically papered over with bogus statistics that "prove" everything's getting better every day in every way. The prime "proof" of rising prosperity is the Gross Domestic Product (GDP), which never fails to loft higher, with the rare excepts being Spots of Bother (recessions) that never last more than a quarter or two.

Longtime correspondent Dave P. of Market Daily Briefing recently summarized the key flaw in GDP: GDP doesn't reflect changes in the balance sheet, i.e. debt.

So if we borrow money to pay people to dig holes and then fill them with the excavated dirt, GDP rises to general applause. The debt we took on to fund the make-work isn't accounted for at all.

Here's Dave's explanation:

Once I learned about accounting, I figured out why the GDP metric wasn't sufficient. What is missing?

 

The balance sheet.

 

Hurricanes are a direct hit to your nation's balance sheet. The national income statement goes up because of increased spending to replace lost assets, but the "equity" part of the national balance sheet ends up taking a hit in direct proportion to the damage that occurred. Even if you rebuild everything just the way it was, your assets remain the same, while your liabilities have increased.

 

We know this because we use the balance sheet equation: equity = assets – liabilities. Equity is another word for wealth.

 

Before hurricane:

 

wealth = (house + car) – (home debt + car debt)

 

After hurricane, you rebuild your house, and buy a new car, using borrowed money:

 

wealth = (house + car) – (2 x home debt + 2 x car debt)

 

Wealth (equity) has declined by the sum (home debt + car debt)

 

So when you see pictures of a hurricane strike, you can now look through all that devastation and see the impact on the balance sheet. National equity (wealth) just dropped by the amount of damage inflicted by the hurricane. Whether it is ever rebuilt doesn't actually matter; that equity is just gone. Destruction is always a downside for equity – even if there is a temporary positive impact on the income statement.

 

Isn't it interesting that the mainstream economists, who don't use banks, debt, or money in their models, largely ignore balance sheets and instead just looks at the income statement alone? Its almost as if the entire education system was organized so that people paid no attention to banks, debt, and money. Who do you think might benefit from our flock of PhD economists ignoring the extremely profitable debt-elephant in the room, and its purveyors, the banks?

Thank you, Dave, for an explanation we never see in the mainstream. And here's a chart of our fabulous always-higher GDP, adjusted for another bogus metric, official inflation:

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

 

via http://ift.tt/2x8Apdz Tyler Durden