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from Counterparties:

MORNING BID – Crypto-sale of the Century

Details on the sale of about 30,000 bitcoin have been spare, but what can be inferred by reading through the lines is that the sale of about $18 million went a lot better than many expected - particularly those who expected to get the coins on the cheap somehow. The prevailing market rate at the end of Monday was about $639, according to Coindesk, currently the leader in the pricing world, and the chatter trickling out was that the unsuccessful bidders - including hedge fund Pantera and SecondMarket's Barry Silber, who put together a consortium of more than 40 bidders - aimed too low in one of those "Price is Right" moves but without the warmth of Bob Barker to confront you when you lose on these things.

With that in mind the speculation on just where the auction ended up can run wild - did it go for $650? $700 for the lot? Perhaps; those commenting on twitter and to Reuters in a story from Gertrude Chavez and Nate Raymond on Monday were suggesting that there were plenty of newer bidders in the process, firms that have been just getting going in the bitcoin world and probably wouldn't mind to get their hands on a large stake even at a somewhat elevated price.

Either way, it points to the possibility of more sales from the U.S. Marshals, who are still hanging onto another 144,000 bitcoin that it obtained off a hard drive from Ross Ulbricht, who is accused of running the Silk Road online drug ring, which was shut down last year. (Keep in mind of course the Marshals Service hasn't released any results.)

Whatever its inauspicious beginnings, that the USMS was able to stage such a successful sale of the crypto-currency means the product has been given real legitimacy as it sold with substantial demand, and leads to more sales later. So there's only so many times one can say this is fake before one has to think somewhat differently.

from The Great Debate:

Why the shift to alternate energies continues, despite shale boom

Thousands of solar panels are pictured generating electricity used at Nellis Air Force Base in Las Vegas

Oil prices are rising as uncertainty grows over the fate of major producers like Russia and Iraq. Everything from transportation to manufacturing to a petroleum-intensive agricultural system is a puppet flailing on the strings of this volatile commodity.

Meanwhile, increased production of alternative power is finally making prices more competitive, particularly for solar energy, as former Vice President Al Gore recently pointed out in Rolling Stone. Costs have declined dramatically -- 20 percent a year since 2010. This is not yet reflected in energy prices, however, largely because of the major tax breaks still extended to the dirty technology of the past.

from Breakingviews:

Iraq troubles are unlikely to bring new oil crisis

By Fiona Maharg-Bravo

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The continued violence in Iraq looks like a harbinger of a sharp cutback from the world’s seventh-largest oil producer. But the bulk of Iraq’s production is still secure. Even though the Middle East has clearly become less stable, it will still take a cascade of problems to create a big oil price shock.

from Counterparties:

Oil shock

The violence in Iraq continues as radical Islamist militants from the Islamic State of Iraq and the Levant (ISIL) try to seize more territory in the northern part of the country. Iraq is the second largest oil producer in OPEC (after Saudi Arabia) and the conflict is likely to affect production in the region. The price of brent crude oil climbed from just over $108 per barrel last Monday to more than $113 today, closing at $112.94. Mark Shenk reports for Bloomberg that analysts expect the price to average $116 by later this year, although prices won’t necessarily go too much higher if the fighting stays in the north of the country, where comparatively little oil is produced.

While ISIL was fighting in Mosul, the independence-minded Kurds seized the opportunity to take control of Kirkuk, an oil-rich city in northeast Iraq (great background on that in Al Jazeera). “This crisis is a lifeline for the Kurds”, political risk analyst Kirk Sowell says in Vox. Earlier this year, Baghdad cut off money to the semi-autonomous Kurdish region because of a political dispute over exporting oil to Turkey. By May, the region was nearly insolvent. However, now that they’ve taken control of Kikurk, the Kurds can pump oil directly to Turkey without intervention from Baghdad. In the short term, though, the Kurds still have problems. A major pipeline to Turkey was destroyed in the fighting last week, and “the violence will doom attempts to repair the pipeline anytime soon, delaying major Kurdish oil exports”, says Nick Cunningham.

from Counterparties:

MORNING BID – Oil and trouble

Riskiest markets saw their first hiccup in a while in the last couple of days, with a 100-point loss in the Dow Thursday that has raised a bit of concern for the first time in ages, it seems. Of course, 100-point drops in the Dow aren't really what they used to be, but that doesn't mean this nascent selloff should be ignored. Worldwide issues - the sudden rise in oil prices on the growing insurgency in Iraq - have investors backing away from equities and shifting a bit into safer assets like the Treasury market. The indirect bidders in Thursday's auction of 30-year notes took the highest amount of the auction since 2006, perhaps as a way to offset worries about weak growth worldwide and the uncertainty in the Middle East.

The declines translated directly to the transportation stocks, where a confluence of factors have conspired to knock down the likes of airlines (just when they stopped seeming so horrible as investments). Lufthansa's warning earlier in the week brought some fresh worries about discretionary spending, while the rise in oil prices translated directly to a falloff in the airlines.

from Breakingviews:

Russia puts gas-hungry China in a bear hug

By Ethan Bilby
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Russia has signed a long-awaited gas pipeline deal with China, and it leaves the People’s Republic in a bear hug. Russia gets a new market outside the increasingly frosty European Union. Oil major PetroChina gets to balance out some losses from low regulated prices at home. But the optics of the deal shred Beijing’s pretensions to political neutrality.

from Global Markets Forum Dashboard:

Billionaire fund managers pick stocks amid scarce macro investing themes – Sohn Conference

Billionaire hedge fund managers are still feeling a polar vortex-like chill even as spring emerges. One by one, they lamented the lack of “macro” ideas that investors can pin their returns on this week at the annual Sohn Investment Conference in New York.

Mike Novogratz, Fortress Investment Group

Mike Novogratz, Fortress Investment Group

larry_robbins.03

Larry Robbins, Glenview Capital

Volatility is at “generational lows,” Michael Novogratz, the principal of Fortress Investment Group told the audience. This year and next year will feel a lot like last year, Larry Robbins of Glenview Capital told investors, as central banks maintain low interest rate policies.

from Breakingviews:

Anadarko’s $5.1 bln settlement adds up in market

By Kevin Allison
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Stock investors seem to have a firm grip on Anadarko Petroleum’s toxic waste settlement. The record $5.15 billion settlement on Thursday, covering years of environmental claims, was at the low end of a court-defined range which had a midpoint of $9.8 billion. The 15 percent jump in the oil company’s market capitalization is mostly explained by those numbers. And it brings Anadarko’s 12-month stock performance nearly back in line with the S&P 500 after a bumpy ride.

from MacroScope:

A question of energy

After two days in The Hague, Barack Obama moves on to Brussels for an EU/U.S. summit with Ukraine still casting the longest shadow.

Europe’s energy dependence on Russia is likely to top the agenda with the EU pressing for U.S. help in that regard while the standoff with Russia could give new impetus to talks over the world’s largest free trade deal.

from Global Investing:

Iran: a frontier for the future

Investors trawling for new frontier markets have of late been rolling into Iran. Charles Robertson at Renaissance Capital (which bills itself as a Frontier bank) visited recently and his verdict?

It's like Turkey, but with 9% of the world’s oil reserves.

Most interestingly, Robertson found a bustling stock market with a $170 billion market cap -- on par with Poland - which is the result of a raft of privatisations in recent years.  A $150 million daily trading volume exceeds that of Nigeria, a well established frontier markets. And a free-float of $30 billion means that if Iranian shares are included in MSCI's frontier index, they would have a share of 25 percent, he calculates.

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