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  1. #111
    ^^^ (Cont'd)


    This idea is related to task-shifting — in fact, it’s the main reason task-shifting is effective: we often underestimate what ordinary people can accomplish and succumb to stereotypes about low-income people or minorities. Look at the Springboard Collaborative, a summer reading program in Philadelphia, for example. Springboard uses the public school system’s most underemployed resource: low income, predominately African-American or Latino parents, a group usually falsely written off as unable or unwilling to help their children.

    Alejandro Gac-Artigas, Springboard’s founder, wondered whether low-income parents didn’t get as involved with their children’s education as more affluent parents because they didn’t believe they had much to offer. So Springboard’s system gives parents an easy-to-use curriculum that mainly involves asking questions of the child before, during and after reading — even parents who can’t read can use it. Parents average over 90 percent attendance at the weekly training sessions — and instead of falling back several months over the summer, which is standard for low-income kids, their children gain more than three months in reading. “In our experience, people want to do things they’re good at and avoid things they’re bad at,” said Gac-Artigas.

    A world away, nine million women in villages in Mali and some 40 other African countries are living better by using savings groups. Women make small deposits at each meeting, and members can borrow from the pool of funds.

    It’s sort of like microcredit — except there’s no money from outside and no bank, just a locked box. No outsiders at all, in fact, except to facilitate spreading the word and getting things started, and not always then. These groups go on for years and years with no intervention.

    The advantages are obvious: women who live too far away from anything to be served by a bank or traditional microcredit can benefit, which means they are less likely to experience food shortages during the year. After the initial training, these groups cost nothing to run. And they last. Projects NGOs bring in from outside often fall apart when the NGO pulls out. Not savings groups, because they truly belong to the women themselves. (The Family Independence Initiative in the United States uses a similar model of self-organized problem-solving led by families, and has also produced surprising results.

    We usually define “helping people” as doing things for them. But often, it should mean asking them to do things for others. People like to feel competent, useful, needed — they benefit greatly from that feeling. That’s the insight behind the work of The Mission Continues, which asks veterans — a highly service-oriented group — to continue serving at home, working with chronically homeless veterans, building playgrounds or mentoring young people.

    Another example is the Homeless World Cup, a series of local, national and international soccer leagues for homeless people. If you listed what homeless people need, a soccer league probably wouldn’t figure high on that list. And yet it can be a catalyst, a painless way to for a homeless person to build the confidence, trust and relational skills to be able to go after all the other things they need.

    It can also work for depression, the world’s second most burdensome disease — for women, it’s first. In Kampala, Strong Minds is testing cost-effective ways to treat depression, with the goal of eventually getting to self-sustaining peer groups. Peer support groups do successfully treat depression. They can be doubly effective, in fact, because people get more out of helping others than being helped. Helping others reinforces their own behaviors, and being useful is in itself a depression-fighter. In Alcoholics Anonymous, the very model of a self-sustaining peer group, research shows that sponsors benefit more than the people they sponsor. But it’s best to do both — and in peer support groups, people do.


    A medical mystery: A child lands in the hospital with asthma. The doctor prescribes medicines. The child uses them — properly. Yet two months later, she is back in the hospital.

    Maybe the problem is that the child lives alongside mold, insects and rats. That child doesn’t need a doctor — she needs a lawyer, who can persuade, or threaten, the landlord to clean it up. And at more than 230 medical clinics around the country, lawyers are on hand to help.

    Health isn’t just a medical problem. Health is undercut by substandard housing, air pollution, food deserts, dangerous streets, trauma and toxic stress — the social determinants of health. Being poor can make you sick, and doctors can’t always help.

    Education, too, has social determinants. “Zero tolerance” has become the fashion in American schools — kids who act up are suspended and then expelled, even in preschool, and sometimes arrested.

    This policy succeeds only in sabotaging the education of the children who need it most — mostly low-income African-American or Hispanic boys, many of whom have already faced daunting, often overwhelming, problems. When a 6-year old is aggressive, uncontrollable or violent in class, the question shouldn’t be “What’s wrong with him?” but “What happened to him?” The answer, too often, is that he experienced homelessness, divorce, family violence, incarceration, drug use, neighborhood violence, sudden separation or loss — or typically a combination of the above. Researchers now call these things ACEs or “adverse childhood experiences.” Increasingly, they are measuring them and discovering how drastically they can decrease the chances of a successful life if parents, educators or doctors fail to recognize them and respond. But parents and teachers can learn new, and better ways of helping these children — far more effective than reflexive punishment — and the kids themselves can learn ways to calm themselves and manage their strong emotions.

    Social determinants follow students all the way through their educations. Community colleges have become the colleges of the poor in this country. And six years after enrolling, only one-third have completed a degree or transferred to a four-year college.

    Why do students drop out? Overwhelmingly, it’s that they can’t afford school, and can’t afford to take time off from work to study.

    One response is Single Stop, which has offices now spreading through community colleges that help people find out if they qualify for benefits such as food stamps, child care subsidies, federal financial aid or the earned-income tax credit — and if so, Single Stop helps clients to get them.

    Looking for the social determinants is not the same as looking for root causes, which can sometimes become an excuse for inaction — the idea that you have to solve everything before you can solve anything. Both concepts recognize that poverty causes interlocking problems. But targeting social determinants is specific and practical. A medical clinic doesn’t have to lift a child out of poverty to treat her asthma. But it must get the landlord to do mold abatement. Schools can’t reduce adverse childhood experiences. But they can manage their impact.

    You don’t have to solve everything to make progress on social problems. But what needs to be solved may be hidden from view. Finding it, attacking it and measuring the results — that’s a big idea in social change, this year and every year.

    Tina Rosenberg won a Pulitzer Prize for her book “The Haunted Land: Facing Europe’s Ghosts After Communism.” She is a former editorial writer for The Times and the author, most recently, of “Join the Club: How Peer Pressure Can Transform the World” and the World War II spy story e-book “D for Deception.” She is a co-founder of the Solutions Journalism Network, which supports rigorous reporting about responses to social problems.

  2. #112
    How OPEC Weaponized the Price of Oil Against U.S. Drillers

    By Grant Smith Jan 10, 2015 4:53 AM GMT+0800

    If there ever was doubt about the strategy of the Organization of Petroleum Exporting Countries, its wealthiest members are putting that issue to rest.

    Representatives of Saudi Arabia, the United Arab Emirates and Kuwait stressed a dozen times in the past six weeks that the group won’t curb output to halt the biggest drop in crude since 2008. Qatar’s estimate for the global oversupply is among the biggest of any producing country. These countries actually want -- and are achieving -- further price declines as part of an attempt to hasten cutbacks by U.S. shale drillers, according to Barclays Plc and Commerzbank AG.

    Crude fell 48 percent last year and has declined 35 percent since OPEC affirmed its output target on Nov. 27. That decision, while squeezing revenues for OPEC members in 2015, aims at preserving their market share for years to come.

    Oil Prices

    “The faster you bring the price down, the quicker you will have a response from U.S. production -- that is the expectation and the hope,” said Jamie Webster, an analyst at consultants IHS Inc. in Washington. “I cannot recall a time when several members were actively pushing the price down in both word and deed.”

    Holding Out

    U.S. crude production totaled 9.13 million barrels a day last week, up about 1 million barrels from a year ago and 49,000 from the OPEC meeting in November. Horizontal drilling and hydraulic fracturing in underground shale rock have boosted output by 66 percent over the past five years. Exports, still limited by law, reached a record 502,000 barrels a day in November, according to the Energy Information Administration.

    The four Middle East OPEC members are counting on combined reserve assets estimated by the International Monetary Fund at $826.4 billion to withstand the plunge in prices. Petroleum represents 63 percent of their exports. At least 10 calls and several e-mails to the oil ministries of all four countries on Jan. 7 and yesterday weren’t answered.

    The price decline will cost all 12 OPEC members a total of $257 billion in lost revenue this year, according to the EIA. Venezuela has a 93 percent chance of defaulting on its debt over the next five years, according to CMA, a data provider owned by McGraw Hill Financial Inc. President Nicolas Maduro said Dec. 13 that “there is no possibility of default” and on Jan. 7 that the country has “the capacity to obtain the financing” it needs.

    Maintain Course

    OPEC won’t reverse course even if oil prices fall as low as $20 a barrel or non-OPEC countries offer to help with production cuts, Saudi Arabian Oil Minister Ali Al-Naimi said in an interview with the Middle East Economic Survey on Dec. 21. The kingdom may even bolster output if non-OPEC nations do so, he said. The global oversupply is 2 million barrels a day, or 6.7 percent of OPEC output, Qatar estimates.

    The group will stand by its decision not to cut output even if prices fall and wait at least three months before considering an emergency meeting, U.A.E. Energy Minister Suhail Al-Mazrouei said Dec. 14. He said clearing the surplus may take years, Abu Dhabi-based newspaper The National reported Jan. 6.

    OPEC has no plans to meet before its next scheduled conference in June, Kuwaiti Oil Minister Ali al-Omair said on Dec. 16. Prices will recover in the second half as oil producers with the highest costs are compelled to scale back operations, he said.

    ‘Swift Fall’

    It wouldn’t be the first time U.S. drillers are caught up in an OPEC battle for market share. In 1986, Saudi Arabia opened its taps and sparked a four-month, 67 percent plunge that left oil just above $10 a barrel. The U.S. industry collapsed, triggering almost a quarter-century of production declines, and the Saudis regained their leading role in the world’s oil market.

    “It seems in their interest to have a swift fall rather than a slow, grinding fall,” Miswin Mahesh, an analyst at Barclays in London, said by phone. “A swift drop in prices would bring more changes to non-OPEC supply,” while a more gradual decline would let companies in other oil nations “merge and become more efficient.”

    Not all share this view. UBS Group AG analysts said that hastening a price slump isn’t a practical strategy because oil demand and supply respond too slowly to price changes.

    Undermine Prices

    “I doubt that they target a lower price,” Giovanni Staunovo, an analyst at UBS in Zurich, said by e-mail on Jan. 5. “Supply and demand are quite inelastic in the short-term.”

    Brent for February settlement decreased 85 cents, or 1.7 percent, to $50.11 a barrel on the London-based ICE Futures Europe exchange. It’s the lowest close since April 28, 2009.

    Saudi Arabian oil ministers sought to undermine prices in the 1980s and 1990s with their public comments, according to Amy Myers Jaffe, executive director of energy and sustainability at the University of California-Davis. The tactic was used to pressure other OPEC members into agreeing to quota changes, she said.

    There are signs that OPEC’s approach is starting to work. Rigs targeting oil in the U.S. declined for the sixth time in seven weeks, by 17 to 1,482 last week, Baker Hughes Inc. said on its website on Jan. 5. There will be a serious decline in U.S. shale oil investment in 2015, Fatih Birol, chief economist of the International Energy Agency in Paris, said on Dec. 22.

    “Some OPEC countries, most specifically Gulf states, obviously think that it’s best to get unpleasant things over and done with,” Eugen Weinberg, head of commodities research at Commerzbank AG, said by e-mail from Frankfurt. “The recent wordings showed they are still firm about this strategy.”

  3. #113
    The Most Entitled Generation Isn't Millennials


    JAN. 8, 2015, 12:00 PM 1,465,126 573

    For the first time in America’s history, an entire generation of her citizens are poorer, more indebted, and less employed than the preceding generations.

    That generation is the millennials – our generation.

    The culprit, say some social commenters, are millennials themselves. In this telling, we are a lazy cohort of entitled and narcissistic brats — the proverbial Generation Me. But this is a classic case of blaming the victim.

    The true cause of this unfortunate situation is clear: It’s the economy. The Great Recession stymied economic growth, halted job creation, kept older Americans in the workforce longer, and encouraged younger Americans to continue debt-financed schooling.

    Moreover, the Great Recession was not merely a one-off calamity — it was a symptom of economic ills long perpetuated and ignored. And the criticism and labels that have been heaped upon millennials bear much more resemblance to the type of intergenerational stereotyping that has always existed (“darn kids these days”) than to any measurable reality.

    The truth: The economic tragedy of the Millennial generation was written before many of us had even learned to read — Baby Boomer parents and grandparents who, at once, genuinely love and care for us, but have also created or perpetuated institutions, policies, and economic realities that have now hobbled us.

    Our generation has been called “entitled.” We beg to differ. If any generation is entitled, it’s our parents’ and grandparents’ generation: the baby boomers.

    True entitlement is tripling the national debt since the 1980s and using the proceeds to spend lavishly on tax cuts and government programs that primarily provided short-term economic boosts, while refusing to raise the Social Security age of retirement or to reduce benefits, even as the gluttonous program careens toward unsustainability.

    True entitlement is allowing the reasonable minimum wage that Baby Boomers enjoyed when they were our age to deteriorate while opting to cut taxes on the gains from stocks and bonds that they accrued during periods of debt-driven economic and stock-market surges — creating an economy where wage earners at all income levels, as of 2012, receive a smaller portion of economic output at any time since 1929.

    True entitlement is, for decades, enjoying the benefits of the lowest energy costs in the world while refusing to price-in the external costs of carbon emissions, exacerbating the real changes to our planet that pose profound risks to the environment and economy for which millennials will soon be the primary stewards.

    These grave consequences were entirely foreseeable — but they happened. Young Americans have been fleeced in order to fund the transient excesses of the old — and yet millennials are labeled “entitled” because we were given “participation trophies” and “personal tutors” before we were old enough to vote ... ?

    Give us a break. Millennials are not entitled. But we are frustrated.

    We’re frustrated, because the same baby-boomer bloc that created or tacitly perpetuated the policies that have hamstrung millennials now makes up almost a third of the American voting-aged population and holds nearly two-thirds of the seats of the US House of Representatives and Senate. This, during a decade-long span when incumbent House and Senate members are richly rewarded for being the most unproductive legislators in US history, respectively winning reelection 94% and 87% of the time.

    Granted, many members of our generation need to learn how to vote every two years, not just every four. And we need to begin to fulfill the civic-minded label — “The Next Great Generation” — which social scientists have bestowed upon us. When we do begin to regularly share our opinions in the voting booth, not just on Twitter, you can be assured that we’ll act to keep this country great. We’ll make the “hard” choices the baby boomers have refused to make.

    Already, we’ve learned how to be fiscally responsible — with the most student debt of any generation in history, we’ve had to. More than any other generation, we eschew expensive possessions like cars and large houses, opting instead for bikes and shared living spaces. Sure, we would like to own all that fancy stuff someday, but we realize that we can’t have everything we want.

    We know that our government would be better off spending more of our tax dollars on jobs and education, and not just on Social Security and defense. We overwhelmingly recognize that the war on drugs has been an embarrassing waste of money and lives, and that anyone should be able to marry whomever they love.

    Perhaps we millennials are entitled: We seemed to think that baby-boomer politicians would enact much-needed changes while we fiddled with our smartphones. We were definitely wrong on that one.

  4. #114
    Lee Kuan Yew’s Mixed Legacy in Singapore


    MARCH 23, 2015

    Lee Kuan Yew, the founding leader of Singapore who died Monday morning, was a towering figure on the global stage who helped transform his small city-state into an economic powerhouse. President Obama went so far as to describe Mr. Lee as a “true giant of history.”

    But praising Mr. Lee, who was 91, for his vision, as many have, would be incomplete. His leadership undoubtedly helped make Singapore one of the richest and least corrupt countries in the world. His “Singapore model” of economic development inspired other leaders, including Deng Xiaoping of China, toward free-market policies. He was also an autocrat who silenced critics and sent opposition leaders to jail, suppressing dissent and intimidating the press.

    Mr. Lee did not deny these tactics and, indeed, reveled in them. “Nobody doubts that if you take me on, I will put on knuckle-dusters and catch you in a cul-de-sac,” he said in 1994. And that was after he had ostensibly stepped aside as prime minister to become senior minister, a position from which he continued to exercise significant influence. People on the receiving end of those dirty tricks like the opposition politicians J.B. Jeyaretnam and Chee Soon Juan were ruined financially after losing defamation suits brought by Mr. Lee and his family.

    By the standards of Southeast Asian autocrats, Mr. Lee was hardly a tyrant. He did not brutalize and impoverish his country, unlike military leaders in Myanmar and Cambodia. And he has been far more successful at turning Singapore into a developed nation than other strongmen in neighboring Malaysia and Indonesia. Nevertheless, he and his protégés in the ruling People’s Action Party — including Lee Hsien Loong, his eldest son and the current prime minister — maintained tight control over politics and speech long after other fast-growing Asian nations like South Korea and Taiwan became competitive democracies, and long after Singapore had achieved the kind of prosperity that Mr. Lee had cited as a reason to limit free expression and multiparty democracy.

    If there ever was a moment for Singapore to embrace democratic principles fully, it is at hand. The country’s 5.6 million people appear to be increasingly unhappy with one-party rule and growing income inequality. In an election in 2011, despite formidable obstacles, opposition parties got 40 percent of the vote, though a much smaller share of seats in Parliament. And, in recent years, poorly paid migrant workers from China and South Asia have held protests and, in late 2013, rioted in the streets.

    As Singapore reflects on Mr. Lee’s legacy, in seven days of national mourning, many people will focus on the country’s economic growth under his rule. But a leader’s accomplishments should not be measured by material achievements alone. The next generation of leaders should make Singapore a political model, not just an economic one.

  5. #115
    A New Saudi Arabia Is in a Hurry in Era of Cheap Oil

    Ben Holland

    January 8, 2016 — 1:01 PM CST Updated on January 11, 2016 — 5:57 PM CST

    Saudi Arabia, one of the most tradition-bound societies on the planet, where family structure and tribal patriarchy differ little from a century ago, is suddenly in a hurry. It has done more in the past week than in most years.

    Over eight days, it has executed dozens of militants, severed ties with Iran and announced numerous steps for a radical rollback of the state that may include privatizing oil giant Saudi Aramco, among the world’s largest companies.

    The flurry of action, a result of tumbling oil prices, shifting U.S. interests and regional turmoil threatening rulers across the Middle East, appears to be the largely the work of Prince Mohammed bin Salman, the 30-something son of King Salman, in office less than a year. And while his ambition to modernize has drawn praise, some fear he is in over his head.

    “The Saudis had a reputation of being kind of cautious, secretive,” said Eckart Woertz, a senior researcher at Barcelona Centre for International Affairs. “Right now there are some concerns about rash decisions.”

    Thatcherite Revolution

    The biggest bombshell this week: Prince Mohammed’s announcement, in an interview with the Economist, that an initial public offering in Saudi Aramco may form part of the kingdom’s privatization plans. A decision will be taken in the coming months, he said.

    He called his plans a Thatcherite revolution, like the overhaul of the U.K. economy in the 1980s, saying private investors will be invited to play a bigger role in health care, education and some defense industries; state land will be sold off; and sales taxes introduced on consumer goods.

    In a single day last week, the government announced and implemented a cut in fuel subsidies, sending drivers speeding to gas stations and spurring a spate of company statements on how the change would affect them. In November, an annual fee on undeveloped urban land intended to transform the kingdom’s property market was approved by the cabinet after years of talks.

    Some of the reforms “bode well for the long-term health of Saudi Arabia, in the sense that they have shown a willingness to cut subsidies, to implement taxes, to cut spending,” said Allison Wood, Middle East and North Africa analyst at Control Risks in Dubai. “But on the other hand, these do increase risks for investors in the sense that they’re often unpredictable and implemented, as we saw, overnight.”

    State-run Saudi Arabian Oil Co. confirmed on Friday that it was considering an initial public offering, which could see the producer leapfrog Apple Inc. as the world’s biggest listed company.

    Embassy Burned

    Among the Sunni-ruled kingdom’s 47 executions, many of which included convicted terrorists and which were strongly supported at home, was Nimr al-Nimr, a Shiite cleric and activist on behalf of the Shiite minority.

    Protests erupted throughout the Shiite world, especially in Iran where a mob set the Saudi embassy on fire. The Saudi foreign ministry sent a text message to reporters in Riyadh on Sunday calling a press conference 30 minutes later to announce it was cutting ties with Iran. It thus escalated years of verbal sparring between regional powers on opposing sides of wars in Yemen and Syria.

    Alarms went off in the U.S. and Europe, concerned that efforts to end those conflicts were set back. Some analysts noted, however, that the move was aimed partly at the U.S., that the new muscular Saudi style results from its feeling abandoned.

    “The U.S. is and remains their primary security patron,” Reva Bhalla, a geopolitical analyst at the strategic advisory firm Stratfor in Austin, Texas, said by phone. But the Iran nuclear deal “meant Saudi Arabia would have to take more matters into its own hands, knowing they couldn’t rely on the U.S. exclusively to back up their interests.”

    Plunging Reserves

    Pressure for change is coming from a budget deficit that reached 15 percent of economic output last year, as oil fell by about two-thirds from mid-2014 levels. Saudi Arabia has dipped into its savings to cover the shortfall -- reserves declined for 10 straight months through November, sometimes at an unprecedented pace.

    Investors began to question whether the Saudis would be forced to devalue their currency, or make an about-turn at OPEC and sanction production cuts that would push oil prices back up. Saudi credit-default swaps spiked this week to the highest since the global slump of 2009, and riyal futures have weakened on speculation about the dollar peg.

    Some wonder whether the economic changes will occur. A few weeks ago, Prince Mohammed made an unexpected announcement, telling a hastily assembled press conference that Saudi Arabia would head an Islamic military coalition of 34 nations to combat terrorism. Several of the countries knew nothing about it.

    Meanwhile, war in Yemen -- still largely under the control of the Shiite rebels the Saudis are fighting -- is set to drain the same budget that the kingdom is seeking to shore up. And tensions over Yemen and Syria, now heightened by al-Nimr’s execution and the severance of ties, won’t help efforts to attract the cash that Prince Mohammed’s ambitious plans will require.

    Unprecedented Powers

    Prince Mohammed came to power with little experience, yet has titles that put him in control of the army, the oil industry and most other areas of the economy.

    “We’ve seen fairly unprecedented consolidation of power in the hands of a fairly young prince,” according to Wood at Control Risks.

    Saudi Arabia’s new stripped down decision-making process, with power taken away from a finance ministry that had previously delayed or blocked reforms, is more attuned to the nation’s needs, said Mohammed al-Sabban, a Saudi economist and former oil ministry adviser.

    “The Ministry of Finance is now basically a treasury ministry. It used to be the ministry of ministries,” al-Sabban said.

    The other leading figure among the younger generation of Saudi royals is Prince Mohammad bin Nayef, who as heir to the throne outranks the other. Prince Mohammed Nayef is a longtime point-man for the U.S. on counter-terror issues and is in charge of internal security. Primarily, that means the fight against al-Qaeda and Islamic State, which have sought recruits in the kingdom and carried out attacks there.

    So far there’s been no public indication of disagreement between the kingdom’s two rising stars, though there have been mutterings of unrest among some more junior royals at the changes since King Abdullah’s death a year ago.

    ‘Disconcert People’

    But opening up the economy in the ways proposed by the young prince may be anathema to Saudi conservatives. The kingdom’s clerics enjoy an exalted status in return for their backing against radical Islamists such as al-Qaeda who have challenged the Al Saud family’s legitimacy.

    “People used to express frustration about how things weren’t happening fast enough but at the same time these radical changes disconcert people,” said Crispin Hawes, managing director of Teneo Intelligence. “There is a more aggressive attitude about this government on certain issues, which has created a lot of unease among people used to a certain ways of doing things.”

  6. #116
    Oil prices fall below $30 a barrel


    Agence France-Presse

    08:32 AM January 13th, 2016

    NEW YORK, United States—US crude prices fell below $30 a barrel for the first time in 12 years on Tuesday as OPEC member Nigeria called for an emergency meeting to address collapsing prices.

    New York’s benchmark West Texas Intermediate (WTI) for February delivery fell to $29.93 a barrel, a level last seen in December 2003.

    Prices pulled back slightly at the end of trade to end 97 cents lower at $30.44 a barrel.

    In London prices plunged as well, with the benchmark Brent North Sea crude for February ending down 69 cents at $30.86 a barrel.

    The continued plunge in prices, with some analysts now seeing a $20 price in sight, spurred more turmoil in exporters, many feeling a deep squeeze on revenues from the collapse of the market.

    The Nigerian petroleum resources minister, Emmanuel Ibe Kachikwu, declared that he expects an extraordinary meeting of the oil cartel in “early March” to discuss nosediving crude prices.

    “We did say that if it hits the $35 (per barrel level), we will begin to look (at)… an extraordinary meeting,” Kachikwu said at the Gulf Intelligence UAE Energy Forum.

    Nigeria, Africa’s largest economy and foremost oil producer, has been ravaged by collapsing oil prices because crude accounts for 90 percent of the nation’s export earnings and 70 percent of overall government revenue.

    Still, with Saudi Arabia and Gulf allies like the United Arab Emirates set on keeping prices down to run competitors—especially in the United States—out of the market, there remained doubts about whether the Organization of the Petroleum Exporting Countries could act.

    “Nigeria’s call for an early OPEC meeting would be a constructive factor if it were to lead to an actual meeting and shift in policy,” said Tim Evans at Citi Futures.

    “But it’s far from clear that Saudi Arabia and its nearest allies like the UAE are open to even talking about it.”

    Andy Lipow of Lipow Oil Associates noted that a UAE representative at the oil conference quickly had dismissed the idea of an OPEC meeting.

    “As a result the market continues to look for something to support the prices, but actually there’s nothing out there right at the moment.”

    More oil company cutbacks

    The carnage in the crude trade saw Britain’s BP and Brazil’s Petrobras both announcing more cutbacks. BP said it would axe 4,000 jobs globally and Petrobras slashed its five-year investment plan by 24.5 percent.

    Mark Thomas, regional president for BP North Sea, said that “given the well-documented challenges of operating in this maturing region and in toughening market conditions, we need to take specific steps to ensure our business remains competitive and robust.”

    Analysts saw continued downward pressure on crude prices.

    The markets will be eyeing this week the status of US stockpiles, which have remained at near-record levels in part because of a late onset of winter that kept demand down for heating oil.

    For those hoping for a rebound, the US Energy Information Agency forecast that US crude production would fall to an average 8.7 million barrels a day this year from 9.4 million in 2015.

    It estimated output fell by 80,000 barrels a day in December, a sign that low prices are hurting some drillers.

  7. #117
    $10,000 in sight for bitcoin as it rockets to new record high


    Posted at Nov 28 2017 01:10 AM

    LONDON - Bitcoin's vertiginous ascent showed no signs of abating on Monday, with the cryptocurrency soaring to another record high just a few percent away from $10,000 after gaining more than a fifth in value over the past three days alone.

    The digital currency has seen an eye-watering tenfold increase in its value since the start of the year and has more than doubled in value since the beginning of October, lifted by the prospect of crossing over into the financial mainstream, amid a flurry of crypto-hedge fund launches.

    It surged as much as 4.5 percent on Monday to trade at $9,721 on the Luxembourg-based Bitstamp exchange, before easing back to around $9,600 by 1155 GMT.

    Data compiled by Alistair Milne, the Monaco-based manager of the Altana Digital Currency Fund, showed U.S. bitcoin wallet provider Coinbase added 300,000 users between Wednesday and Sunday, during the U.S. Thanksgiving holiday. The total number of Coinbase users globally now stands at 13.3 million.

    "The Coinbase data is evidence that adoption is not slowing down," Milne told Reuters. "Breaking $10,000 seems inevitable following the recent price action."

    Bitcoin's price has been helped in recent months by the announcement that the world's biggest derivatives exchange operator CME Group would start offering bitcoin futures. The company said last week the futures would launch by the end of the year though no precise date had been set.

    So far, institutional investors have largely stayed away from the market, viewing it as too volatile, too risky and too complex to invest other people's money into. But some say the launch of the CME futures could lure in more mainstream investors.

    "Promises of bitcoin futures opening the door to institutional money are supercharging the price," said Charles Hayter, founder of cryptocurrency data analysis website Cryptocompare.


    The latest price surge brought bitcoin's "market cap" - its price multiplied by the number of coins that have been released into the system - to more than $163 billion, according to industry website Coinmarketcap.

    The market cap of all cryptocurrencies, meanwhile, topped $300 billion for the first time, the site said, making their estimated market value greater than that of Wal-Mart.

    The staggering price increases seen in the crypto-market have led to multiple warnings from central bankers, investment bankers and other investors that it has reached bubble territory.

    Some say that this could prompt regulators in the West to crack down on the market in a similar fashion to China, where bitcoin exchanges were shut down earlier this year.

    "Regulators know the rewards of cryptocurrency and blockchain could be huge but (they) have more than one eye on the catastrophic ramifications if good governance, stability and control are not preserved," said David Futter, a fintech partner at law firm Ashurst, in London.

    "If the carrot of self-regulation proves insufficient, the regulators will not hesitate to use their stick."

    Bitcoin's biggest rival, ether - sometimes referred to as Ethereum, the name for the project behind it - has seen even more stratospheric gains this year, up more than 6000 percent. It hit an all-time high just below $500 on Monday, with its market cap nearing $50 billion.

  8. #118
    Global stocks tumble as Wall Street braces for more losses

    Associated Press / 10:03 PM February 06, 2018

    LONDON - Stock markets around the world took a battering Tuesday, following a dramatic sell-off on Wall Street that triggered concerns that a potentially healthy pullback from record highs could morph into a more protracted crash.

    Hopes that Wall Street won't repeat the scale of Monday's losses helped limit the selling during European trading hours.

    Futures markets suggested another, but more moderate drop, in the US, with the Dow and S&P 500 futures down 0.8 percent and 0.2 percent.

    The market mood turned decidedly fearful on Monday when the Dow Jones industrial average posted its biggest percentage decline since August 2011, driven by fears the US Federal Reserve will raise interest rates faster than expected due to a pick-up in wages.

    That has fed into widespread concerns that markets were stretched following a strong run over the past year that pushed many indexes to record highs.

    Some also question the possible role of computer-driven algorithmic trading in the precipitous declines or even the ramifications of the rise and fall in the value of virtual currencies, notably bitcoin.

    "If investors look at underlying earnings growth and the fundamentals of the global economy, there is reason for optimism," said Neil Wilson, senior market analyst at ETX Capital.

    "However once this kind of stampede starts it’s hard to stop."

    Among the biggest fallers Tuesday was Tokyo’s Nikkei 225 stock average, which ended 4.7 percent lower at 21,610.24, having earlier been down a massive 7 percent.

    All other Asian markets tanked, too, including the Shanghai Composite index, which closed 3.4 percent lower at 3,370.65 and Hong Kong's Hang Seng, which skidded 5.1 percent to 30,595.42.

    Australia's benchmark S&P ASX 200 slid 3.2 percent to 5,833.30 and South Korea’s Kospi declined 1.5 percent to 2,453.31.

    The selling has persisted into European trading hours, though at a more moderate pace. The FTSE 100 index of leading British shares was 1.9 percent lower at 7,194 while the CAC 40 in France fell 2.4 percent to 5,160. Germany's DAX was down 2 percent at 12,433.

    Though many stock indexes are close to where they started the year, the losses mark a reversal of fortune following a sustained period of gains, a pullback that some market pros have been predicting for some time.

    Stephen Schwarzman, the chairman and CEO of financial firm Blackstone, warned recently of a potential "reckoning" in markets.

    A 10 percent drop from a peak is often referred to as a "correction" while a bear market is generally defined as a 20 percent or so drop in indexes. The S&P 500, for example, is one of the major fallers, declining 7.8 percent since its latest record high on Jan. 26.

    "Seemingly the only hope for the markets at the moment is that investors suddenly decide that the sell-off has been a bit overdone," said Connor Campbell, a financial analyst at Spreadex.

    Despite the sea of red in global stock markets, there are hopes that the retreat won't last long given that global economic growth has picked up and the financial system is more robust since the financial crisis.

    "That is not to say that we won’t see further falls in coming days, but in an environment where growth is good and earnings are expected to rise globally, there are decent underpinnings," said James Knightley, chief international economist at ING.

    The catalyst for the latest sell-off came in jobs figures last Friday showing that wage growth in the US was creeping higher. For many traders, that was a sign that the Fed will have to pick up the pace of its rate hikes - higher wages have the capacity to fuel inflation.

    On Monday, the Dow finished down 4.6 percent at 24,345.75, while the S&P 500 sank 4.1 percent, to 2,648.94. Falls like this have not been registered since August 2011 when investors were fretting over Europe's debt crisis and the debt ceiling impasse in Washington that prompted a US credit rating downgrade.

    Still, while some financial assets became more attractive to investors as perceived havens of value. Gold, for example, was up 0.4 percent at $1,343 an ounce.

    The US dollar remained resilient despite the stock market sell-off, which at one stage Monday saw the Dow shed 1,597 points. The euro was up 0.3 percent at $1.2435 while the dollar rose 0.3 percent to 109.38 yen.

  9. #119
    What Bitcoin Is Really Worth May No Longer Be Such a Mystery

    It’s somewhere between $20 and $800,000, according to economic theory and a night of drinking.

    April 19, 2018, 5:01 PM GMT+8

    It took two economists one three-course meal and two bottles of wine to calculate the fair value of one Bitcoin: $200.

    It took an extra day for them to realize they were one decimal place out: $20, they decided, was the right price for a virtual currency that was worth $1,200 a year ago, flirted with $20,000 in December, and is still around $8,000. Setting aside the fortunes lost on it this year, Bitcoin, by their calculation, is still overvalued, to the tune of about 40,000 percent. The pair named this the Côtes du Rhône theory, after the wine they were drinking.

    “It’s how we get our best ideas. It’s the lubricant,” says Savvas Savouri, a partner at a London hedge fund who shared drinking and thinking duties that night with Richard Jackman, professor emeritus at the London School of Economics. Their quest is one shared by the legions of traders, techies, online scribblers, and gamblers and grifters mesmerized by Bitcoin. What’s the value of a cryptocurrency made of code with no country enforcing it, no central bank controlling it, and few places to spend it? Is it $2, $20,000, or $2 million? Can one try to grasp at rational analysis, or is this just the madness of crowds?

    Answering this question isn’t easy: Buying Bitcoin won’t net you any cash flows, or any ownership of the blockchain technology underpinning it, or really anything much at all beyond the ability to spend or save it. Maybe that’s why Warren Buffett once said the idea that Bitcoin had “huge intrinsic value” was a “joke”—there’s no earnings potential that can be used to estimate its value. But with $2 billion pumped into cryptocurrency hedge funds last year, there’s a lot of money betting the punchline is something other than zero. If Bitcoin is a currency, and currencies have value, surely some kind of stab—even in the dark—should be made at gauging its worth.

    Writing on a tablecloth, Jackman and Savouri turned to the quantity theory of money. Formalized by Irving Fisher in 1911, with origins that go back to Copernicus’s work on the effects of debasing coinage, the theory holds that the price of money is linked to its supply and how often it’s used.

    Here’s how it works. By knowing a money’s total supply, its velocity - the rate at which people use each coin - and the amount of goods and services on which it’s spent, you should be able to calculate price. Estimating Bitcoin’s supply at about 15 million coins (it’s currently a bit more), and assuming each one is used an average of about four times a year, led Jackman and Savouri to calculate that 60 million Bitcoin payments were supporting their assumed $1.2 billion worth of total U.S. dollar-denominated purchases. Using the theory popularized by Fisher and his followers, you can - simplifying things somewhat - divide the $1.2 billion by the 60 million Bitcoin payments to get the price of Bitcoin in dollars. That’s $20.

    So far, so straightforward. It turns out, however, that when it comes to putting a price on Bitcoin, the same equation can yield many different answers. In September, Dan Davies, an analyst at financial research firm Frontline Analysts Ltd., wrote up a “guesstimate” of Bitcoin’s value that he’d originally conducted in 2014 using—again—the quantity theory of money. He plugged in estimates for each variable and got about $600.

    On Dec. 10, Mark Kirker, a high school math teacher in California, published an analysis online using the same equation for the same purpose. He concluded that Bitcoin should be way above then-current levels. He’s since revised the number. Contacted by Bloomberg, he says it could be $15,000.

    How can something be worth $20, $600, and $15,000 within the same theory? One key reason stems from what we don’t know about cryptocurrencies rather than what we do know. We know Bitcoin’s maximum supply is 21 million, and we know the velocity of most commonly used currencies. We don’t know how widely Bitcoin will be adopted tomorrow, how frequently it will transact, or what it will be used for. In Davies’s example, a guide to Bitcoin’s future potential was the illicit drugs market, an obvious home for more-or-less-untraceable digital cash. The United Nations has estimated this market at $120 billion. Plugging in that number helped Davies get to $600.

    For Kirker, though, drugs and criminals are only part of the story. He imagines including the output of some developing countries where cryptocurrencies might have better takeup than traditional banking. But with so much up in the air, the equation starts to look less like algebra and more like alchemy. Even in the non-Bitcoin world, the velocity of money and its price can fluctuate in ways not predicted by fundamental analysis. “I am not wholly surprised it doesn’t pin down a price target to within a factor of 100 either way,” Davies says.

    Some believe the cloud of confusion has to do with the simple fact that cryptocurrency is something entirely new—it needs a fresh school of economic thinking to go with it. A quantity theory of cryptomoney, perhaps.

    John Pfeffer, formerly a partner at KKR & Co., has written several papers to this effect, arguing that technology is turning the centuries-old equation on its head. Bandwidth and computing resources are the fuel of cryptocurrencies, and they need their place in quantity theory, he argues. His version of the equation imagines a world in which more powerful computers and faster connection speeds combine to lower the cost of maintaining a crypto-economy over time, while the same forces radically increase the availability and speed of its digital coins. There already exist hundreds of tokens other than Bitcoin, pointing to a world where digital currencies are, well, a dime a dozen.

    In a future where cryptocurrencies become a form of economic resource (like fuel, water, or electricity) that’s computerized and commoditized, would anyone get rich from hoarding them in her trading account? No, says Pfeffer. In his view, the more widely used a particular brand of digital cash becomes, the higher the probability its value tends toward zero. In quantity theory terms, cryptocoins’ velocity could go way, way up, while the cost of many services within the crypto-economy could go way, way down. Crypto could change the world and still leave a lot of people with worthless tokens.

    Pfeffer dangles one hope in front of the Bitcoin faithful who dream of riches: the possibility there’s one cryptocurrency out there that will serve as a store of value for the digital world. Like gold, a metal seen by investors as a haven in times of crisis or when the purchasing power of cash is eroding, whichever coin wins that crown will have a completely different use—and price—than the rest. Applying this thinking to Bitcoin, Pfeffer explains, would yield a price target of $260,000 to $800,000.

    Such a value would be not too far off $1 million—where the frequently mocked, frizzy-haired self-help guru James Altucher expects Bitcoin to be in 2020. Software entrepreneur John McAfee has said it will hit $500,000. “If not, I will eat my d--- on national television,” he tweeted. He later doubled his target price. Pfeffer has been more careful than most in warning of significant risk of investment loss. “This could all go substantially to zero for various reasons,” he wrote in December.

    Putting a price on Bitcoin is therefore less about crunching numbers and more about deciding just what it is and what it could be, if anything. That’s appetizing for risk-hungry optimists in the venture capital world, who are accustomed to their investments turning into big hits or big flops. Ride-hailing service Uber Technologies Inc., for example, has lost an eye-watering amount of money, yet it’s one of the most highly valued companies in the world. It’s a bet that more traditional investors would have difficulty justifying using traditional metrics.

    But it also means science and snake oil sit side by side. Quantity theory is one example of how an equation can be remodeled to fit different scenarios or different wishes about where the price will land. And it’s not the only one: Network adoption, the cost curve of Bitcoin mining, and transaction volumes have all been bundled into marketable literature advising traders and investors on what to buy. It’s a thick numbers soup. At least Uber has financial accounts to review.

    Those with long memories also remember the quantitative analyses that underpinned the hot new asset classes of the past, from dot-com stocks to securitized art. These were often sold to investors as new metrics and radical investment theses, only to be ditched when a recession or panicked sell-off hit. “They’re always talking about a new paradigm, but I say it’s the same meat, different gravy,” says Côtes du Rhône theorist Savouri, who maintains traditional economic theory should be embraced rather than ignored by the Bitcoin faithful.

    For Savouri, the easiest way to understand the efflorescence of theories and valuations being bandied about is to opt for a simple, overarching one: the greater fool theory. It says that one fool buys in the hope that there’s an ever-bigger sucker willing to pay more. “The problem,” he says, “is that we don’t breed fools geometrically.”

    Lionel Laurent is a reporter for Bloomberg Gadfly.

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