Thursday, March 31, 2016

"TIPS Are King in Good Quarter for U.S. Fixed Income"

Everywhere you look.
The popularity is starting to get scary.

From MoneyBeat:
Investors in U.S. fixed income should be pleased: Many corners of the bond markets delivered decent returns during the first three months of 2016 despite a roller-skates ride.

The biggest winner in the first quarter was Treasury inflation-protected securities, which delivered a return of 4.17% through March 30, according to data from Barclays. That was the biggest quarterly return since the last quarter of 2011. Return includes price gains and interest payments.
Investment-grade corporate debt was the runner-up with 3.62% return. Their sibling–bonds sold by lower-rated firm, or junk debt, followed with 3.1% return.

U.S. Treasury bond market posted 2.94% return; mortgage-backed securities returned 1.83% and municipal bonds returned 1.5%.

Solid return from both haven debt and riskier assets suggest investors remain cautious on the global economic outlook. While stocks, junk bonds and oil have been strengthening over the past few weeks, the brutal selloff between the start of the year and mid-February left many investors skittish.
“We are still stuck in low growth and I don’t see an upswing trend in commodities,” said Jack Flaherty, portfolio manager at money manager GAM, which has over $119 billion in global assets under management.

Some analysts say the risk of market turmoil has diminished thanks to continued support from large central banks around the world.

The European Central Bank beefed up monetary stimulus earlier this month, the Bank of Japan has signaled there is room for more stimulus. China’s central bank has also been in easing mode, and analysts say the risk of a large devaluation of the Chinese yuan has been reduced for the foreseeable future....MORE
See also at MoneyBeat:
TIPS ETF Grows to Largest Level Since 2013

For those folks in search of solitude, maybe shorting more corn futures?

USDA Corn Reports: This Ain't Rock and Roll, This Is Genocide

I'm not sure why we have David Bowie doing the commodities report but it fits for the long corn crowd.*
A twofer from AgWeb:

2016 Prospective Plantings: Corn Acres Up 6% at 93.6 Million Acres

 Corn Planted Acreage Up 6 Percent from 2015

Soybean Acreage Down Less Than 1 Percent

All Wheat Acreage Down 9 Percent

All Cotton Acreage Up 11 Percent

Corn planted area for all purposes in 2016 is estimated at 93.6 million acres, up 6 percent from last year. If realized, this will represent the highest planted acreage in the United States since 2013, and will be the third highest planted acreage in the United States since 1944.

Soybean planted area for 2016 is estimated at 82.2 million acres, down less than 1 percent from last year.

Compared with last year, planted acreage intentions are down or unchanged in 23 of the 31 estimating States.

All wheat planted area for 2016 is estimated at 49.6 million acres, down 9 percent from 2015. The 2016 winter wheat planted area, at 36.2 million acres, is down 8 percent from last year and down 1 percent from the previous estimate....MORE
And the storage reports:
2016 March Grain Stocks: Corn, Soybeans, Wheat
Corn is just off the low for the day, 352-2 down 14-6; wheat is up 2-6 at 466-6
March 29 
"US weather to speed up corn sowings - but bodes ill for wheat"
As Grandmother used to say, "If it's not one tham ding it's another".

Wheat 472-4 up 1-4
Corn   369-0 down 1-4
Right now this stuff is just noise although Thursday's planting intentions report might get prices jumping around.
*See also March 21's "Agricultural Futures: 'Hedge funds cover ag shorts en masse...'":
They've fallen into my trap....
March 16
Grains: Allendale Planting Intentions Survey--Farmers Are Planting Fencerow to Fencerow
Corn     368-2 down 0-2
Wheat  470-6 down 6-4
We're looking for a drift down into late summer, then a weather related boost.
March 8
ABN Amro Says Grain Prices Have Bottomed After Four Year Decline
We think ABN are early, there is just so much stuff around although we expect some late summer La Nina weather to give us a long trade.
Feb. 26
USDA Chief Economist Makes A Case For Farmland 
It's too early.
Even though we think we'll see some upward price pressure come late summer, after a meandering downtrend, the reality of farmland investment is that it is only worth a multiple of the cash flow.
(unless you're on the edge of a metro area and have some non-public zoning info)

USDA Issues Annual Planting Intentions and Quarterly Grain Stocks Reports--UPDATED

Corn on today's 5-minute chart:

From Reuters:

U.S. farmers to ramp up corn acreage despite supply glut -USDA
U.S. farmers plan to boost their corn seedings by 6.4 percent in 2016 and dial back soy plantings even as supplies of the yellow grain rose sharply from a year ago, the U.S. Agriculture Department said on Thursday.

Corn acreage was seen at a bigger-than-expected 93.601 million, which would be the third-highest level since 1944, in the government's closely watched prospective plantings report. USDA also said corn stocks as of March 1 stood at 7.808 billion bushels, the second most on record and up from 7.750 billion bushels a year earlier.

The corn acreage outlook topped analysts' expectations, which ranged from 89.000 million to 91.000 million, with an average of 89.972 million, according to a Reuters poll. In 2015, U.S. farmers seeded 87.999 million acres of corn.

Analysts on average had expected corn stocks of 7.801 billion bushels.
The supply glut has weighed on corn prices and is already threatening the profitability of the crop that U.S. farmers have just begun to plant.

USDA said farmers planned to seed 82.236 million acres of soybeans, which would be the third-highest recorded. That compares with 82.650 million a year ago and an average analyst estimate of 83.057 million....MORE
We'll be back with more.

UPDATE: "USDA Corn Reports: This Ain't Rock and Roll, This Is Genocide"

"'Planet X' Linked to Mass Extinctions on Earth, Triggers Periodic Comet Showers says University Researcher"

From Ideas, Inventions and Innovations:
Periodic mass extinctions on Earth, as indicated in the global fossil record, could be linked to a suspected ninth planet, according to research published by a faculty member of the University of Arkansas Department of Mathematical Sciences.

Daniel Whitmire, a retired professor of astrophysics now working as a math instructor, published findings in the January issue of Monthly Notices of the Royal Astronomical Society that the as yet undiscovered “Planet X” triggers comet showers linked to mass extinctions on Earth at intervals of approximately 27 million years.

Though scientists have been looking for Planet X for 100 years, the possibility that it’s real got a big boost recently when researchers from Caltech inferred its existence based on orbital anomalies seen in objects in the Kuiper Belt, a disc-shaped region of comets and other larger bodies beyond Neptune. If the Caltech researchers are correct, Planet X is about 10 times the mass of Earth and could currently be up to 1,000 times more distant from the sun.
Kuiper Belt
Credit: Johns Hopkins
Whitmire and his colleague, John Matese, first published research on the connection between Planet X and mass extinctions in the journal Nature in 1985 while working as astrophysicists at the University of Louisiana at Lafayette. Their work was featured in a 1985 Time magazine cover story titled, “Did Comets Kill the Dinosaurs? A Bold New Theory About Mass Extinctions.”

At the time there were three explanations proposed to explain the regular comet showers: Planet X, the existence of a sister star to the sun, and vertical oscillations of the sun as it orbits the galaxy. The last two ideas have subsequently been ruled out as inconsistent with the paleontological record. Only Planet X remained as a viable theory, and it is now gaining renewed attention....MORE

Of Gods, India and Fast Moving Consumer Goods

Gotta grow a beard.

Years ago I introduced an Indian guy to a Chicago trader:
"Jerry, this is Siva Kumar...."
"Huh....Not a local, then."
Here's a Bhajan Siva used to sing between trades:
Guru Brahma 
Guru Vishnu 
Guru Devo 
Guru Sakshath Parambrahma Tasmai Shri Gurave Namaha
From FT Alphaville:

Indian gurus want your market share
Patanjali Ayurved ” is disrupting India’s consumer space” according to my inbox.

Patanjali Ayurved is also an ayurvedic health foods and medicine brand that’s fronted by India’s Swami “Baba” Ramdev. He’s a yogi who says that he has no economic stake in what he also says is not a profit-oriented company.
From the FT last week:
Instead, he says, it is part of a mission to boost India’s economic self-reliance, akin to Mahatma Gandhi’s appeals for Indians to renounce foreign wares during the anti-colonial struggle.
“This is not a business,” the yoga guru says, as the heavily armed government commandos serving as his bodyguards look on.
“Our ultimate goal is healthy human being and wealthy nation … No personal wealth. No personal profit.”

“We don’t mind multinational companies but they are only after profits — people are not their priority,” says Mr Balkrishna, Patanjali’s chairman, managing director and primary shareholder.
“We are giving competition, so MNCs [multinational companies] start thinking of people and are forced to bring prices down.”
If you need help controlling your scepticism then watch this while counting to 30:...

...Thing is, the Pitanjali model is being touted as massively replicable.

The idea being that where one guru-fronted aryuvedic company has trod others can easily follow. Which is nice considering HSBC expect it “to have revenues of INR50bn in FY16e, up 150% y-o-y.”
Here’s Edelweiss with a top line on the long line of bearded spiritual leaders waiting to sell you shampoo:
Post the spectacular initial success of Patanjali, we expect other spiritual gurus (Sri Sri, Guru Ram Rahim, Aurobindo Ashram, Sadhguru Jaggi Vasudev) also to go the ‘Patanjali way’ in the FMCG space.
And with some deeper baba-level detail, with our brief emphasis....MORE
Seriously, where else are you going to get Baba-level granularity?

Federal Reserve: "Unraveling the Oil Conundrum: Productivity Improvements and Cost Declines in the U.S. Shale Oil Industry"

From the FRB's FEDS Notes, March 22, 2016:

Unraveling the Oil Conundrum: Productivity Improvements and Cost Declines in the U.S. Shale Oil Industry

Ryan Decker, Aaron Flaaen, and Maria Tito 1 Oil prices have declined by roughly 70 percent since peaking in the middle of 2014. The U.S. oil rig count--a common measure of drilling activity--peaked in late 2014 and has since declined by about 60 percent. Yet U.S. production of crude oil continued rising until the middle of 2015 and has since fallen by only 6 percent from its peak. The dramatic advance of U.S. oil production seen in the last decade--driven primarily by new discoveries of shale oil and innovation in drilling and extraction technology--has not been as responsive to the deterioration of oil markets as some analysts predicted.2
Why have large declines in prices and in the rig count not triggered a more dramatic decline in production? At what price level would a large share of U.S. shale oil production lose economic viability? In this note, we explore these questions with a focus on the U.S. shale oil industry in the Bakken, Eagle Ford, and Permian Basin regions.3 We describe large productivity improvements in drilling and fracking methods that have allowed production to remain strong despite falling rig usage. We then document cost declines that have preserved profitability for many firms even in the midst of historically low prices.

The Resilience of Production
The dramatic increase in total U.S. oil extraction between 2011 and mid-2015 was driven almost entirely by unconventional production in geologies such as shale; these areas now account for more than half of U.S. output. The recent decrease in extraction has likewise been concentrated in unconventional production.4 This decline has been moderate in light of the large collapse in prices and in the rig count. One explanation for the modest response of production to the deterioration of the oil market is the high pace of productivity growth seen by the shale extraction industry in recent years.

Figure 1. Rig Counts and Wells per Rig, Bakken Region
Figure 1: Unconditional Distribution of Inflation. See accessible link for figure description.

Source: U.S. Energy Information Administration (EIA), Drilling Productivity Report, March 2016
Accessible version
Improvements in the number of wells a rig can drill each month and in the average length of each well have contributed to the productivity gains in drilling. As shown in Figure 1, which plots data for the Bakken region, the number of wells drilled per rig in a given month has risen steadily since 2011, and it accelerated further after the rig count began falling in 2014.5 The main driver of this greater rig efficiency is the adoption of pad drilling technology whereby a rig can drill multiple wells from the same spot without the need for expensive and time-consuming disassembly, relocation, and reassembly. Additionally, each well has become much larger, as the average well length has doubled from roughly one to two miles (American Petroleum Institute (API) 2015, Quarterly Well Completion Report. IHS Global Inc.).

Increased and more efficient use of water, sand, and other proppants in the fracking process has further enhanced the productivity of oil wells, particularly early in the well lifecycle.6 As a result, in addition to the increase in the number of new wells per rig, the extraction from these new wells in their first month of production has roughly tripled since early 2008.7 These improvements can be best illustrated by examining well decline curves, which track productivity over a well's lifecycle.

Figure 2. Average Well Decline Curve by Cohort
Figure 2. Average Well Decline Curve by Cohort. See accessible link for figure description.

Source: Authors' calculation from Dept. of Mineral Resources, North Dakota
Note: Average well decline curves for Bakken.
Accessible version
To facilitate a more disaggregated analysis, we use well-level data for the Bakken region from the North Dakota Department of Mineral Resources. These data provide monthly production by well in addition to other well characteristics and account for roughly 95 percent of total Bakken oil production. Figure 2 plots well decline curves for selected well cohorts, defined by year of drilling, in the Bakken region. The y-axis reports average well output in barrels per day. The x-axis tracks months of operation--the well lifecycle. The changes in productivity of wells in early months of production are striking: output during the first full month of production has roughly doubled since 2007. The series of upward shifts in productivity paths seems to persist throughout the lifecycle across subsequent well cohorts. While innovations in fracking technology are primarily thought to shift production forward in the well lifecycle (rather than to increase total lifetime output), well-level data suggest that output in later-producing months has actually increased in recent years.

Figure 3. Well Decline, Controlling for Well Size
Figure 3. Well Decline, Controlling for Well Size. See accessible link for figure description.

Note: Shaded areas represent 95% confidence intervals around the point estimates.
Accessible version
How much of this increase in productivity is driven solely by expansions of well size, as opposed to innovations in fracking technology? Using data for the Bakken region, we regress well-level output on a series of monthly indicators that are distinct for each cohort year. The resulting cohort-specific well-decline coefficients capture the change in output along each month of operation compared to a baseline year, for which we choose 2007. The coefficients for the cohort of 2015 are shown in blue in Figure 3. (Notice they are roughly equal to the difference in the well decline curves between 2015 and 2007 in Figure 2.) Next, we add a measure of well size to the regression, specifically, the lateral distance of a well that undergoes perforations in preparation for fracking. As shown in grey in Figure 3, these adjusted coefficients are not largely different from the raw coefficients without the well-size adjustment. This analysis points to innovations apart from increases in well size as the main contributing factors to the output gains evident from Figure 2.

Figure 4. Decomposition of Production Changes
Figure 4. Decomposition of Production Changes. See accessible link for figure description.

Source: Drilling Productivity Report, EIA, March 2016.
Accessible version
Other lifecycle and composition issues can provide further insights into aggregate production. Figure 4 decomposes the change in monthly oil production from all regions into the positive contribution of new wells (the blue line) and the negative contribution from existing wells (the red line), the latter being almost invariably negative as a result of the natural lifecycle declines depicted in Figure 2. Consequently, aggregate production increases whenever output from new wells (the blue line) exceeds the natural output declines among existing wells (the red line). Despite productivity improvements, output from new wells began falling in mid-2015 as the number of well completions dropped significantly. This pushed the positive contribution from new wells below the negative contribution from existing wells, resulting in aggregate production declines. It is noteworthy, though, that the drag from existing well declines peaked shortly thereafter, mitigating the fall in aggregate output. Completions of larger wells and productivity improvements among legacy wells have softened the negative pull from existing wells.

Figure 5. Rigs Needed for Flat Production
Figure 5. Rigs Needed for Flat Production. See accessible link for figure description.

Source: Drilling Productivity Report, EIA, March 2016.
Accessible version
Figure 5 provides another way of understanding composition effects behind production, the number of rigs needed to maintain a constant production level, that is, rigs needed for flat production (RNFP). This measure is constructed by calculating the number of new rigs necessary to offset observed declines from existing wells, using the prior month's estimate of new production per rig. As rig efficiency has increased and legacy-well decline curves have shifted up, and as total production has gradually fallen, the RNFP has declined. This framing highlights a decreasing usefulness of the rig count as a sole indicator of overall activity.

General equilibrium mechanisms have also affected the oil production climate. Lower drilling activity combined with productivity enhancements have reduced the demand for workers, and wages of workers in the Natural Resources and Mining sector have declined by 10 percent or more in the three main shale regions.8 Service costs have fallen by about 30 percent in the shale regions (Curtis 2015), with anecdotal reports even indicating that some service firms are performing tasks for free to retain market share. Diesel fuel and other energy sources are key production inputs, and their costs have fallen mechanically with oil prices. Using cost share estimates from the Energy Information Administration (EIA) from 2009, we construct a back-of-the-envelope estimate that labor, services, and fuel cost reductions have collectively reduced overall production costs by more than 10 percent.9 Other costs have fallen with broad market conditions as well, most notably royalties and taxes (which often depend nonlinearly on prices).10
Additional productivity improvements and cost reductions have resulted from the aggressive reallocation of drilling and operating activity toward high-productivity plays and rigs as well as from the failure or acquisition of low-productivity, high-cost firms.11 Considering the recent productivity improvements, how should we expect aggregate production to evolve in coming months and years? The EIA, accounting for the various productivity and lifecycle factors described above, forecasts total U.S. oil production to gradually fall to about 8.2 million barrels per day in early-2017, flattening out thereafter (U.S. Energy Information Administration 2016b).

Economic Viability of Shale Production
In recent years, companies have made extensive efforts to reduce drilling and production costs. Cost estimates vary widely, reflecting substantive variation in regional and company-specific costs, ambiguity about the details of cost estimation, and general uncertainty. Our goal is to generate a range of estimates that can inform our view of the economic viability of continued shale oil production....MORE

HT: The Big Picture

"Has the futures industry just been Uberised?"

From Fidessa's Fragmentation Index:
A seemingly innocuous news item from my good friend John Detrixhe at Bloomberg got us all chatting here at Fidessa Towers this morning. The story was about how Eurex Clearing was going to allow large buy-sides direct membership of its derivatives clearing house. The rationale for this is entirely logical as today’s regulations treat client capital as a risk asset and therefore subject to capital ratios. In a capital constrained world then, surely Deutsche Börse is doing the FCM community a favour?

Those of us who have been in the industry a while, however, remember with misty-eyed reverie how the whole industry used to work. Back then, the entire FCM business model was underpinned by the spread between the capital you took in as margin and what you paid out to clearing houses, and at the same time by making money on the difference. Zero and even negative interest rates shoot the first hole in the this model and now Eurex looks to torpedo it below the waterline with this latest move....MORE

"Knowing Your Nordics: An Overview of Central Bank Policy and the Negative Rate Environment" (NOK; SEK; DKK)

From M&G's Bond Vigilantes:
There has been a barrage of G7 central bank coverage in March, culminating in much talk, but resulting in – on the whole – little new action. The Bank of Japan remained on hold (after adopting a surprise negative rate policy at the end of January), the Federal Open Market Committee (FOMC) delivered a “dovish hold” (keeping interest rates unchanged while lowering their longer term rate guidance) and the Bank of England voted unanimously to keep the interest rate at 0.5%.

Some of the more interesting policy action has been in Europe where the European Central Bank unveiled a raft of additional measures in its latest round of monetary easing, which included a further cut to its already negative deposit rate. Again, this has been well covered by market commentators. But perhaps some of the lesser discussed – though no less deserving – coverage of late has been given to the Nordics, where negative nominal rates have been a feature of some of these markets for some time. If the Nordic region is the gaping hole in your monetary policy bank of knowledge, the following discussion should go some way to address this.
Norway: Eased in March, more to come?
On 17th March – the day after the FOMC meeting – the Norges Bank cut its deposit rate from 0.75% to a new low of 0.5%. The weaker external growth environment, looser policy abroad and renewed oil price swings were some of the reasons cited for this move.

The Norges bank has an inflation target of 2.5% and whilst the CPI inflation forecast was revised upwards in the short term (from 2.6% to 3.2% for the first quarter of this year), much of this is due to the lagged impact of the Krone depreciation experienced in line with the fall in the oil price in 2015. Given the YTD rebound in the Krone, the currency effect is likely to dissipate in the longer term. Teamed with a potentially slowing global demand environment as well as subsiding domestic wage pressures, inflation is forecast to end 2019 at 1.6%, well below target.

Like many of its developed country peers, Norway now too finds itself flirting with the zero lower bound. What is of particular interest is that the central bank has not ruled out the use of negative nominal interest rates declaring that “should the Norwegian economy be exposed to new major shocks, the Executive Board will, however, not exclude the possibility that the key policy rate may turn negative”. Perhaps one to watch in the race to the bottom....MORE

A River Of Money: Eurodollars And Treasuries

We are firm believers that the simplest approach to finance and investing is to identify the large capital flows and then stand athwart them, the better to dip your cup (ladle, bucket, barrel, whatever you're using).
This is the Amazon+Mighty Miss. of money flows.

From FT Alphaville:

Eurodollars, China, TIC data + mysteries
Bloomberg went to town this week on news that hedge funds may be piling into USTs to the total tune of $1.27tn in lieu of foreign central banks and finance ministries who for the first time since 2000 have — on an annual basis — been holding off from making further investments.

On March 15, US Treasury International Capital system data confirmed that foreigners sold $50.4bn in Treasuries on a net basis in January. But! foreign central bank holdings of US Treasuries actually grew to $6.183tn in January.

But there are discrepancies to consider.

In a blog on Tuesday post Jeffrey Snider of Alhambra Investment Partners draws attention to indicators which he feels point to a period of eurodollar decay.

Eurodollars, as we’ve noted before, are financespeak for dollars which circulate abroad according to their own fundamentals, supposedly outside of the control of the core Federal Reserve banking system. Some say such dollars equate to US liabilities held and circulated by foreign banks and institutions, others say they’re a proxy for banking standards which underpin and formalise international trading relationships. Either way, little is officially written, known or even talked about with respect to eurodollars. Snider is unusual in being one of a few market commentators following this sector of the market closely.

But as Snider notes, with respect to the composition of the latest TIC data, something feels unusual about the numbers:
…the private holdings of US$ assets have been rising in the past few months despite the return of liquidations. However, reported bank liabilities (“dollars”) have not, at least on a cumulative basis (there are quarterly flows and window dressings to account in this estimation; by and large, however, banks are continuously shrinking their reported “dollar” liabilities dating back, unsurprisingly, to the middle of 2014).
So, despite the increase in private holdings of US$ assets the dollars paid in return for those assets are not making their way into the US banking system. Meanwhile, says Snider, it’s becoming increasingly hard to pinpoint the geographic location of the net UST selling, something he proposes — based on this news from the IMF — could be down to the increased use of currency forwards in official sector interventions (and particularly by the Chinese central bank).....MORE

"Libya Threatens to Open Migrant Floodgates Into Europe"

Africa's population is projected by the United Nations to reach 2 billion people by 2045, 4 billion before the end of the century:

From the Times of London via The American Interest:
The refugee flow from Libya to Italy could double this year, and Libya’s shambolic “government” says it lacks money to deal with the issue. The Times of London reports:
Libya threatens to open migrant floodgates into Europe
Libya will “open the floodgates” and let thousands pour into Europe if the West does not help combat illegal immigration, officials have warned.
As Europe fears a bumper year for Mediterranean crossings, detention centres and coastguards say they are chronically underfunded and lack the basic tools they need to stem the flow.Last year, 154,000 people crossed the Mediterranean from Libya to Italy, according to Frontex, the EU’s border agency. This year the number could more than double as migrants are redirected via war-torn Libya following the closure of the Balkans route.Lacking funds, supplies, tools and training, Libyan authorities say they have been abandoned by the West and have not benefited from £3.6 million supposedly committed to combat illegal immigration. EU support programs are on hold as the civil war escalates.“The state is very weak and there is no money,” Colonel Mohamed Bourgiba, head of the Gweea detention centre, said. “Most of us here aren’t even getting paid.” Gweea, 30 miles (50km) east of Tripoli, holds hundreds of migrants. If things do not change, he said, “We will just stop working and open the floodgates. Because at the moment we are doing all of this for nothing.”
Libya appears to be eyeing some of the funding the EU has so generously doled out to Turkey to keep its refugees at home recently:
The agreement struck in March between the EU and Turkey to send migrants that cross illegally to Greece back across the Aegean puts more pressure on Libya when it is buckling under an 18-month conflict, AbdelRahim Rajahi, a colleague of the general, added. “We are operating 50 per cent underfunded but have we seen a single Euro from Europe? No.”...
Also at the Times:
Obama lays blame for Libya mess on Cameron

Wednesday, March 30, 2016

Microsoft's Chatbot,Tay, Returns: Smokes the Ganja, Has Twitter Meltdown, Goes Silent Again

Following up on last week's "Artificial Intelligence: Here's Why Microsoft's Teen Chatbot Turned into a Genocidal Racist, According to an AI Expert".

From the Guardian:

Microsoft’s racist chatbot returns with drug-smoking Twitter meltdown 
Short-lived return saw Tay tweet about smoking drugs in front of the police before suffering a meltdown and being taken offline

Microsoft’s attempt to converse with millennials using an artificial intelligence bot plugged into Twitter made a short-lived return on Wednesday, before bowing out again in some sort of meltdown.

The learning experiment, which got a crash-course in racism, Holocaust denial and sexism courtesy of Twitter users, was switched back on overnight and appeared to be operating in a more sensible fashion. Microsoft had previously gone through the bot’s tweets and removed the most offensive and vowed only to bring the experiment back online if the company’s engineers could “better anticipate malicious intent that conflicts with our principles and values”.

However, at one point Tay tweeted about taking drugs, in front of the police, no less.

Tay then started to tweet out of control, spamming its more than 210,000 followers with the same tweet, saying: “You are too fast, please take a rest …” over and over....MORE

Verizon to Share Customer's Location Data With Advertisers (VZ)

From the Verge:

Verizon reportedly planning to share customer location data with AOL advertisers 
It's been clear since Verizon acquired AOL last year that the end goal was to combine the two companies' data and technology to build a massive advertising business. Verizon already made clear that it would share the data it had on user's browsing habits to improve AOL's ad targeting. Now The Wall Street Journal is reporting that a small group of AOL test customers can tap into Verizon data "about cellphone users’ locations to show if anyone went to a brand’s store after seeing an ad." AOL CEO Tim Armstrong has been out-selling clients on the idea that they should advertise with AOL so they can leverage this ability when it comes online for all clients later this year.

Sharing this kind of data on consumers might get Verizon into hot water. It was already fined $1.35 million by the FCC for its use of "supercookies." As part of its settlement with the agency, Verizon also agreed to get customers permission before sharing tracking data with outside companies, or even with sites owned by AOL. The FCC has also proposed some new rules around how much data ISPs can share with outside parties without getting a customer's permission.

According to The WSJ report, Armstrong offered advertising clients a pitch that leaned heavily on location data. "Imagine," he said, "if a hotel chain supplied Verizon with a database of its frequent guests. That could be matched up with data on Verizon’s more than 100 million wireless customers, plus AOL’s own data, to target guests with ads for promotional offers....MORE

Fidelity Continues Slashing Valuations Of Its Unicorns and Other Venture Investments:

From the Wall Street Journal:
Fidelity Investments again took a hatchet to the valuations of its private technology shares in February, cutting bellwether software startups like Dropbox Inc., Cloudera Inc. and Zenefits by as much as 38%.

On Wednesday the mutual fund giant posted valuation estimates as of Feb. 29 for the holdings in its various mutual funds. The reports are closely watched in Silicon Valley because they offer among the few public gauges for how startup values are trending.

Unlike its quarterly filings, Fidelity’s monthly reports don’t disclose the number of shares it holds in each company, only the total value of holdings. It is possible that valuation declines could be explained by share sales; however, Fidelity hasn’t typically sold any shares of its private tech holdings.
The Wall Street Journal last month published the Startup Stock Tracker, which keeps tabs of valuations posted by multiple mutual fund firms. The interactive has been updated to show February marks posted by Hartford Funds and Principal Funds in addition to Fidelity.

The largest Fidelity markdown was enterprise-software company Cloudera, which Fidelity cut by 38% compared with January to a per-share price that is in line with other mutual fund marks for the company.

Other big markdowns include business software company Domo Inc., down 29%, the first big decline for that company; Web storage firm Dropbox, down another 20% to a level that all but wipes out the gains on Fidelity’s 2012 investment in the company; and health-benefits broker Zenefits, down 25% and now 65% below Fidelity’s May 2015 purchase price. Electronic-document software firm DocuSign Inc. was reduced 34% compared with December, though Fidelity still shows a 170% paper gain....MORE

"Oil gains more ground after EIA reports a 2.3 million-barrel rise in U.S. crude supplies"

As we noted last night on the American Petroleum Institute numbers:
The futures are up 1% from Tuesday's settle of $38.28, at $38.68, not as big a pop as one might expect for that big a miss...
Today we get the rest of the move, up $1.45 at $39.73.
From  MarketWatch:
Oil futures gained more ground on Wednesday after the U.S. Energy Information Administration reported a 2.3 million-barrel rise in crude-oil supplies for the week ended March 25. That was below the 2.6 million-barrel increase reported by the American Petroleum Institute, and close to the climb of 2 million barrels expected by analysts polled by Platts. Gasoline supplies fell by 2.5 million barrels, while distillate stockpiles edged down by 1.1 million barrels last week, according to the EIA....MORE
And we'll have more this afternoon.Here's the EIA's Weekly Petroleum Status Report.

"Fed Funds Price in Only 20% Chance of June Rate Hike"

From Barron's Income Investing:
Following Fed Chair Janet Yellen’s dovish speech Tuesday, fed funds futures markets are pricing in only a 20% chance of a rate hike in June. That’s down from 30% odds before the speech, according to Aaron Kohli of BMO Capital Markets.

As recently as March 15, futures markets priced in a 50% chance of a hike by June, Kohli points out in his closing note to clients Tuesday.

Most Wall Street economists have been targeting June as their best guess for when the Fed will next raise rates. They have said they expect two hikes this year....MORE

Apple Demands The FBI Tell It How They Cracked the iPhone Encryption (AAPL)

From the Los Angeles Times:
Apple Inc. refused to give the FBI software the agency desperately wanted. Now Apple is the one that needs the FBI's assistance.

The FBI announced Monday that it managed to unlock an iPhone 5c belonging to one of the San Bernardino shooters without the help of Apple. And the agency has shown no interest in telling Apple how it skirted the phone's security features, leaving the tech giant guessing about a vulnerability that could compromise millions of devices.

"One way or another, Apple needs to figure out the details," said Justin Olsson, product counsel at security software maker AVG Technologies. "The responsible thing for the government to do is privately disclose the vulnerability to Apple so they can continue hardening security on their devices."

But that's not how it's playing out so far. The situation illuminates a process that usually takes place in secret: Governments regularly develop or purchase hacking techniques for law enforcement and counterterrorism efforts, and put them to use without telling affected companies.

What's different in this case is that the world has been watching from the start. After Syed Rizwan Farook and his wife killed 14 people in December, the government publicly sought a court order to compel Apple to unlock Farook's work phone. Apple opposed that order, heightening long-standing tensions between Silicon Valley and law enforcement.

Now that the FBI has dropped its case against Apple, there's a new ethical dilemma: Should tech companies be made aware of flaws in their products, or should law enforcement be able to deploy those bugs as crime-fighting tools?

It's unclear whether the FBI's hacking technique will work on other versions of the iPhone, though a law enforcement official who spoke on the condition of anonymity said its applications were limited.
Some news outlets citing anonymous sources have identified Israeli police technology maker Cellebrite as the undisclosed third party helping the government, but neither the company nor the FBI has confirmed those reports.

A source who is unauthorized to discuss the case told The Times the FBI was provided with the ability to incorrectly guess more than 10 passwords without permanently rendering the phone's data inaccessible. That allowed the agency to use software to run through potential pass codes until it landed on the correct one. It is not clear what info, if any, was gleaned from the phone.

Attorneys for Apple are researching legal tactics to compel the government to turn over the specifics, but the company had no update on its progress Tuesday.

The FBI could argue that the most crucial information is part of a nondisclosure agreement, solely in the hands of the outside party that assisted the agency, or cannot be released until the investigation is complete.

Many experts agree that the government faces no obvious legal obligation to provide information to Apple. But authorities, like professional security researchers, have recognized that a world in which computers are crucial in commerce and communications shouldn't be riddled with technical security flaws.

Even the White House's cybersecurity coordinator has acknowledged there are times when more people could be harmed by an unfixed security issue than helped by the government covertly using the loophole as part of an investigation.

A secretive White House-led procedure governs whether companies get notified of potential flaws....MORE

UPDATED--"FBI hacks into gunman’s iPhone without Apple’s help"
UPDATE: "'Apple likely can’t force FBI to disclose how it got data from seized iPhone' (AAPL)"

See also the boy geniuses at BGR:

How Apple could force the FBI to explain San Bernardino iPhone hack
Apple beat the FBI this week, as it avoided a legal battle against the law enforcement agency over creating a backdoor into the San Bernardino iPhone. The war on encryption isn’t over yet, as both parties aren’t necessarily happy with this temporary solution. For the FBI, accessing the iPhone belonging to one of the San Bernardino shooters is crucial, but doesn’t solve its bigger problem: spying on encrypted communications or devices. Apple, on the other hand, is reportedly working on beefing up iPhone security. But for now, it has one other problem: the world knows there is a way to get peek at the data stored on an encrypted iPhone without knowing the PIN or password.

The FBI did not say whether it’ll share the vulnerability it discovered and successfully used on the San Bernardino iPhone 5c, with the help of an unnamed security company. But Apple might be able to use other legal cases that involve iPhones to force the Bureau to explain the hack.

It all hinges on the U.S. Department of Justice’s case in New York against Apple, Reuters reports. If prosecutors ask the court to force Apple to unlock the iPhone, Apple could push the government to reveal how it accessed the iPhone 5c.

The DOJ will tell the court over the next two weeks whether it’ll continue its bid to force Apple to help out in the Brooklyn case. A federal judge already ruled that he did not have the authority to order Apple to help the agency in the Brooklyn case, but the DOJ appealed that decision to a district court judge.

In light of the San Bernardino iPhone hack, the DOJ agreed with Apple to delay the briefing deadlines in the Brooklyn case until April 11th. Even if the government decides to halt its proceedings against Apple, the Cupertino-based company will still be able to pursue legal discovery in any other case where the FBI wants to use evidence obtained from an iPhone without Apple’s help.
In fact, the FBI might have a hard time keeping the technology a secret. Reuters says that other law enforcement officials in the country are looking for support to unlock iPhones seized in criminal investigations....MORE

Tuesday, March 29, 2016

"Oil - American Petroleum Institute (API) data - Inventory build of 2.6mln barrels"

The futures are up 1% from Tuesday's settle of $38.28, at $38.68, not as big a pop as one might expect for that big a miss, although Platts had only forecast 2mm Bbl..
Here's a quick hit from foreXlive:
  • Oil inventory build of 2.6 mln barrels
  • Cushing draw of 319K barrels
  • Gasoline -1.94 mln bbls
  • Distillate -95K bbls
The survey expectations for the headline number was a build of 3.2mln barrels, so the 2.6mln (2.642mln to be more precise) bbls result is below expectations...

"Janet Yellen reiterates need for interest rates caution" (TIP)

Following up on yesterday's "The Fed Is Going to Let Price Inflation Run Hot".
From the Financial Times:
Janet Yellen has reiterated the need for the Federal Reserve to “proceed cautiously” in lifting interest rates given unfavourable market conditions, weaker than expected overseas growth and an uncertain inflation outlook.

The Fed chair said recent declines in market expectations for interest-rate increases had helped cushion the US economy from adverse developments overseas, describing the moves as an “automatic stabilizer”.

But she stressed that the Fed had little scope to reverse course and stimulate the economy if the US unexpectedly hits the buffers, underlying the need for a gradual tightening of policy. She homed in on risks still stewing in China and the oil markets as she argued in a New York address for the central bank to move carefully as it considers when to lift rates again.

Treasuries rallied as Ms Yellen spoke, with traders at CRT Capital characterising the remarks as a “surprisingly dovish take on the current policy stance and near-term outlook”. The yield on the two-year Treasury, which moves inversely to its price, slipped 6 basis points to 0.81 per cent....MORE
Here's the Fed Chair's speech at the Economic Club of New York, March 29, 2016:
The Outlook, Uncertainty, and Monetary Policy
The closest approximation of a granted-not-very-exciting "obvious" instrument-for-the-current-environment that we've been able to find, the iShares Barclays TIPS Bond Fund was this evening's 'Chart of the Week' at Alhambra Investment Partners. The ETF is up a bit over 1% on the day and a bit over 3% since our "Saaay, something's going on here" revelation back in February:
Janet Yellen thinks she wants inflation. The market thinks she’s going to get it:

Bring On the Stagflation: "Atlanta Fed’s ‘GDP Now’ Plunges; Predicts Just 0.6% Q1 Growth"
"LPL: ‘Modest Stagflation’ Would Benefit TIPS"
"After Fed-Induced Spike, TIPS Auction Proves Weak" (TIP)
Today's Inflation Report Puts the Core Rate At Its Highest Since 2008 (and 2012)
BlackRock: "Why Now May Be the Time for TIPS"
"Is US inflation (finally) rising?"
Inflation: TIPS Breakevens Start to Rise as Economic Data Improves
No Inflation? Look At This (#3 will shock you)
"The Treasury Market Raises Its Inflation Outlook" (buy TIPS)
The Velocity of M1 Money Stock May Have Stopped Declining
A Look At The Consumer Inflation Numbers
You Want Inflation, "Why doesn’t the ECB just buy oil?"

"Commodities Longs Will "Liquidate In Unison," Driving Bulls Off A Cliff, Barclays Warns"

From ZeroHedge:
"Energy needs lower prices to maintain financial stress to finish the rebalancing process; otherwise, an oil price rally will prove self-defeating as it did last spring,” Goldman’s Jeffrey Currie recently wrote, on the outlook for crude going forward.

The rally off the lows has largely stemmed from the market’s hopes for an output freeze from Russia, the Saudis, and everyone else who isn’t Iran. Producers will meet in Doha next month to try and hammer out an agreement, but as we’ve documented exhaustively, the whole effort is farcical at best.

Moscow and Riyadh (among others) are already pumping at record levels, and it’s not at all clear why “freezing” output at all time highs is bullish. Indeed, as we noted last week, Russian crude exports are set to rise going forward. "The discussion is only about freezing production. And not exports,” Russian Energy Minister Alexander Novak told reporters earlier this month.

Throw in the fact that a recalcitrant Iran is in no mood to freeze anything now that international sanctions have finally been lifted and you have a decidedly bearish fundamental backdrop for crude, and that, in turn, should be expected to pressure the rest of the commodities complex which has for years struggled to deal with slumping Chinese demand and a global deflationary supply glut.

For their part, Barclays thinks the bullish sentiment around commodities could shift abruptly in the not so distant future, leading the “herd” straight off a cliff.

“Investors have been attracted to commodities as one of the best performing assets so far in 2016,” analyst Kevin Norrish begins. “However, in the absence of any concerted fundamental improvements, those returns are unlikely to be repeated in Q2, making commodities vulnerable to a wave of investor liquidation that we estimate could, in a worst case scenario, knock as much as 20- 25% from current price levels.” Here’s more:

Given that recent price appreciation does not seem to be very well founded in improving fundamentals and that upward trends may prove difficult to sustain, the risk is growing that any setback will result in a rush for the exits that could again lead commodity prices to overshoot to the downside.
Key commodities markets such as oil and copper already face overhangs of excess production capacity and inventories, but also now face another obstacle in the recovery process, that of positioning which is now approaching bullish extremes.
Net flows into commodity investor products totaled over $20bn in January-February (the strongest start to a year since 2011), futures positioning in key markets such as copper and oil has switched rapidly from bearish to bullish extremes in a few short weeks and there is evidence of a surge in investment flows into Chinese commodity markets as well....MORE

Shipping U.S. Water To Saudi Arabia

As we've noted elsewhere this is an example of what the hydrology pros call 'virtual water'.
From the AP via Yahoo:

Saudi land purchases fuel debate over US water rights
Saudi Arabia's largest dairy will soon be unable to farm alfalfa in its own parched country to feed its 170,000 cows
Saudi Arabia's largest dairy company will soon be unable to farm alfalfa in its own parched country to feed its 170,000 cows. So it's turning to an unlikely place to grow the water-chugging crop — the drought-stricken American Southwest.

Almarai Co. bought land in January that roughly doubled its holdings in California's Palo Verde Valley, an area that enjoys first dibs on water from the Colorado River. The company also acquired a large tract near Vicksburg, Arizona, becoming a powerful economic force in a region that has fewer well-pumping restrictions than other parts of the state.

The purchases totaling about 14,000 acres enable the Saudis to take advantage of farm-friendly U.S. water laws. The acquisitions have also rekindled debate over whether a patchwork of regulations and court rulings in the West favors farmers too heavily, especially those who grow thirsty, low-profit crops such as alfalfa at a time when cities are urging people to take shorter showers, skip car washes and tear out grass lawns.

"It flies in the face of economic reason," said John Szczepanski, director of the U.S. Forage Export Council. "You've taken on all of the risk a farmer has. The only way you can justify that is that they're really not trying to make a profit. They're trying to secure the food supply."

For decades, Saudi Arabia attempted to grow its own water-intensive crops for food rather than rely on farms abroad. But it reversed that policy about eight years ago to protect scarce supplies.
To further conserve water, the country has adopted bans on selected crops. This year, the kingdom will no longer produce wheat. In December, the government announced the country will stop growing green fodder, livestock feed derived from crops like alfalfa, over the next three years....

Jan. 27
Saudi Arabia buying up farmland in Southwestern U.S.

See also:
"PNAS Study: Population Growth Will be Constrained by the Limits of Trading Virtual Water (Food)"
California Drought: Why Farmers Are 'Exporting Water' to China
A Look At A Second Water Focused Hedge Fund
A Look at the World's First Water-focused Hedge Fund 

How Insecure Is the Internet Of Things?

From the MIT's Sloan School Of Management's Sloan Review:

MIT for Managers: How Insecure Is The Internet of Things?
Our biweekly exploration of new business ideas from the corridors of MIT.
This new blog from MIT Sloan Management Review explores ideas from different corners of the MIT community that are relevant to business executives. In this space, we will introduce you to research, people, and events you might not otherwise encounter — things we hope you find useful and perhaps provocative.

Katie, Bar the Baby MonitorIt wasn’t the first time that a group of tech-savvy students and professionals came together to share ideas and strategies for plugging holes in Internet security — and it probably won’t be the last. Based on reports from people who attended the MIT Media Lab-sponsored Security of Things hackathon on March 4-5, 2016, the challenge of protecting WiFi- and Bluetooth-enabled devices from motivated hackers may be more daunting than even the most seasoned attendees expected.

“I believe we’re at a tipping point for the ‘Internet of Things,’” says Tal Achituv, a research assistant at the media lab and an organizer of the event. “While most people now have several networked devices in their homes — everything from light bulbs and home alarm systems to baby monitors — very few people appreciate just how vulnerable many of these devices are.”

The two-day event in Cambridge explored the Internet of Things (IoT) from two opposing perspectives — that of device makers, and of would-be hackers. In one session, teams competed to find vulnerabilities in a grab bag of devices the organizers had purchased online from Amazon. On many of them, the hackers were able to gain access within minutes, sometimes using simple passwords as basic as 1234 or default passwords found on the Internet. In other sessions, presenters described sobering scenarios, such as what happened when hackers broke into an inexpensive WiFi-enabled baby monitor: Once inside the home network, they were able to release the electronic lock on the keyless front door.

Achituv notes that it’s extremely common for device makers to use off-the-shelf software components, which allow companies to accelerate their product development schedules and reduce costs. And because software updates tend to be scattershot — when they exist at all — many consumers are lax about installing them. As a result, he says, “It’s very easy for a hacker to reverse map how a particular device works.”

What will it take for device makers to take security concerns more seriously? Will customers be willing to pay more for products with more security?...MORE

One of SunEdison's YieldCo's Says The Parent May File Bankruptcy (SUNE; GLBL)

From the St. Louis Business Journal:

TerraForm Global says SunEdison at risk of bankruptcy
A yieldco of SunEdison Inc. said Tuesday that the Maryland Heights-based solar developer is at "substantial risk" of seeking bankruptcy protection soon because of "liquidity difficulties."

Bethesda, Maryland-based TerraForm Global, majority owned by SunEdison, said in a regulatory filing that it expects to delay filing its own annual report for the year ended Dec. 31 beyond the March 30 due date, in part because of issues surrounding SunEdison's delay in making its annual filing.

TerraForm Global said it does not rely substantially on SunEdison for funding or liquidity and it believes that if SunEdison seeks bankruptcy protection, TerraForm Global will have sufficient liquidity to support its ongoing operations. But if SunEdison files for bankruptcy protection, it "would have a material adverse effect" on TerraForm Global, officials said....MORE
SunEdison Is Being Investigated By The SEC, Stock Is Deer Nuts (SUNE)

"US weather to speed up corn sowings - but bodes ill for wheat"

As Grandmother used to say, "If it's not one tham ding it's another".

Wheat 472-4 up 1-4
Corn   369-0 down 1-4

Right now this stuff is just noise although Thursday's planting intentions report might get prices jumping around.
From Agrimoney:
US corn sowings, after a slow start, are expected to make better progress as they begin in the key Midwest region – but dryness-pressed winter wheat crops face more of the dryness worrying investors.
The opening stages of the US corn planting period, in southern states, have been hampered by wetness which limited to 8% sowings progress in Arkansas as of Sunday, well below the typical 20% at this time of year, US Department of Agriculture data showed. 
In Mississippi - where wetness curtailed seedings to 5%, compared with the average of 29% - one USDA scout reported that "abnormal amounts of rainfall continue to prevent producers from all fieldwork. 
"Most corn planted prior to the excess rain will be replanted due to saturated conditions." 
And in neighbouring Louisiana, where "some fields are still under water" after receiving 7-10 inches of rain last week, 36% of corn is seeded, well behind the average of 60%. 
'In full swing' 
Texas is among the few states where farmers have kept on track with seedings, planting 38% of their corn as of Sunday, 1 point ahead of the typical pace. 
However, growers in more northerly regions, including the key US Corn Belt region, look set for a better start, imminently, to their spring sowings programmes, thanks to more benign conditions. 
Showers later this week "should further improve soil moisture in advance of corn/soybean planting", said weather service MDA, before warmer temperatures do their bit....MORE

SunEdison Is Being Investigated By The SEC, Stock Is Deer Nuts (SUNE)

Under a buck.

From the St. Louis Business Journal:

SunEdison being investigated by SEC over liquidity disclosures: Report
SunEdison Inc. is being investigated by the Securities and Exchange Commission over disclosures it made to investors about how much cash it had on hand as its stock plummeted last year, sources told the Wall Street Journal.

The regulatory agency's enforcement unit is examining whether the Maryland Heights-based renewable energy developer overstated its liquidity last fall when it reported to investors it had over $1 billion in cash, people familiar with the matter told the publication.

SunEdison's shares, which had fallen about 75 percent at the time of that report, are down 96 percent from a July peak, the Journal reports. The company, whose market value has fallen from nearly $10 billion in July to about $400 million, is working with advisers on a possible bankruptcy filing, sources told the publication....MORE
78 cents, down 38% pre-market.

Commodities: "Great Graphic: Is the CRB Index Rolling Over?"

From Marc to Market:
This Great Graphic, created on Bloomberg, depicts the CRB Index, a basket of commodity prices.   The technical picture has deteriorated, and the price action in the coming sessions is particularly important in determining outlook.  
The CRB Index put in a double bottom.  On January 20 and February 11 lows were set just below 155.00.   The neckline of the double bottom was created in the rally between the two bottoms.  It is found near 168.00.   The measuring objective is found by rotating the pattern on its neckline.  It is near 181.00.   On March 18, the CRB Index made a high just below 179.00, just ahead of the 50% retracement objective of the decline since the mid-October 2015.  
The CRB Index gapped lower on March 24 and has not filled the gap today.  It is found between last Wednesday's low (~173.20 ) and last Thursday's high (~172.57).    It had gapped higher on March 17 but filled the gap on the large sell-off from March 23.   If that first gap had not been filled, it would have left a bearish island gap in its wake.  ...MORE

The Entire Online Gig Economy Might Be Mostly Uber

From Real Time Economics:
One of the most-hyped changes to the U.S. labor market has been “the rise of Uber and its ilk”—companies that use smartphone apps to connect workers to gig jobs. The most prominent example of this phenomenon is, of course, Uber, the ride-hailing service that allows people to summon drivers with an app and pay by the ride. Other startups are attempting to bring this business model to a wide range of industries.

But aside from Uber, there’s mounting evidence that few companies are doing this successfully. The so-called gig economy barely registers in traditional labor-market data. As documented in Saturday’s Wall Street Journal, there’s been a large growth in tenuous work arrangements. But according to new research from Alan Krueger of Princeton University and Lawrence Katz of Harvard University, the growth has taken place largely offline—in traditional jobs and industries where a growing number of workers are in contract arrangements.

As part of their new research, Messrs. Katz and Krueger conducted a large survey of workers, hunting specifically for workers on app-based online services, and found that only about 0.5% of people worked in the online gig economy during their survey’s reference week. This corresponds with a recent finding from the JPMorgan Chase Institute, which studied the bank transactions of one million random bank customers to see how many were earning income from gig platforms.

Their survey found that about 1% of U.S. adults were earning income from online platforms, but the majority were earning money with sites like Airbnb and Etsy, where the primary activity is renting housing or selling products, rather than directly selling their own labor. JPMorgan calls these “capital platforms” rather than “labor platforms.” The institute found just under 0.4% of people were actually earning labor income from gig-economy services....MORE

News You Can Use: Moët & Chandon is Schooling Londoners About Champagne in a Week-long Masterclass Pop-up

From City A.M.:
73rd Annual Golden Globes Menu Preview
City slickers have a few months yet before the financial world's summer party season gets under way, leaving workers just enough time to swot up on Champagne.

Fizz maker Moet Chandon is hosting a week of Champagne masterclasses in Soho, providing well-heeled winos with all the info they need to be the most sophisticated guest at their employer's networking parties.

Taking place in Soho's Conde Nast college, anyone willing to pay £45 will be "transported through the vineyards and cellars of Moët & Chandon in an exciting immersive 360 virtual reality experience"....MORE

Monday, March 28, 2016

"Apple likely can’t force FBI to disclose how it got data from seized iPhone" (AAPL)

From ars technica:

"It is an important test for the government's disclosure policy."

The US government isn't saying whether it will divulge to Apple the method it used to access the locked iPhone seized by one of the San Bernardino shooters. The iPhone has been at the center of a bitter dispute between Apple and the Federal Bureau of Investigation. But that legal battle—in which a judge last month had ordered Apple to write code to assist the authorities in unlocking the phone—came to a seemingly abrupt halt late Monday when the government said it "successfully accessed the data" on the phone without Apple's assistance.

A federal law enforcement official requesting anonymity told reporters in a conference call Monday that the US government would not discuss whether it would reveal the method.

"We cannot comment on the possibility of future disclosures to Apple," the law enforcement official said in response to a question from Ars. Just a week ago, Apple told reporters in a conference call that it would insist in court of knowing everything about the vulnerability. Ars reported last week that the Israeli firm Cellebrite was potentially working for the US government to unlock the phone, and many have speculated that the method was a NAND mirroring attack.

White House cybersecurity coordinator Michael Daniel announced in 2014 that the authorities would disclose vulnerabilities—to an extent, and in limited circumstances. This is known as the Vulnerabilities Equities Process....MORE