Browsing: Commodities

Commodities

Oil & Gas: Where is the Capital Flowing?

Jul 7th, 2019 | Filed under: Newly Added, Private Equity, Commodities, The A.I. Industry, Investing in Commodities, Equity Types of Private Equity, oil, Commodities, Other Issues in Private Investments, Private Investments

The last two years have seen record low levels of mergers and acquisitions activity in the oil and gas sector in the United States. There are other signs of lassitude in the field: a record low volume of PE deals, (more of that in a moment), and only six initialRead More


Crop Protection and Inputs Management: Growing Investments in AgTech

Jun 20th, 2019 | Filed under: Newly Added, Private Equity, Commodities, Agriculture, The A.I. Industry, Investing in Commodities, Debt Types of Private Equity, Venture capital, Farmland, Equity Types of Private Equity, Natural Resources and Land, Angel investing, Commodities, Private Investments

The agricultural sector is under pressure from several directions, including depressed commodity prices, increased regulation, climate change, and changes in consumer tastes. This pressure creates a demand for technological progress, and that in turn creates a market for agtech. Two years ago, Finisterre Ventures and Pitchbook combined their data gatheringRead More


The Value of Speculation Limits, or Lack Thereof

Jun 18th, 2019 | Filed under: Newly Added, Commodities, Derivatives, The A.I. Industry, Commodity Forward Pricing, Commodities

CFTC Commissioner Daniel Berkovitz recently spoke to the FIA Commodities Symposium, in Houston, Texas, about the reduction of systemic risks and the strengthening of market integrity under the Dodd-Frank Act. He gave the usual disclaimer, that the views he expressed in this address were his own not those of theRead More


ICE Futures Gets Its Speed Bump

Jun 4th, 2019 | Filed under: Newly Added, Commodities, Algorithmic and high-frequency trading, The A.I. Industry, Commodities, Business News

On Feb. 1, ICE Futures US Inc., informed the Commodity Futures Trading Commission that it was instituting a new “speed bump,” formally called the Passive Order Protection (or POP) Functionality for its gold daily and silver daily futures markets. The idea of POP is to limit the advantage that canRead More


Bart Chilton: A Career of Regulating Commodities, Futures and Cheetahs

May 7th, 2019 | Filed under: Newly Added, Commodities, The A.I. Industry, Investing in Commodities, Commodities

Bart Chilton, a senior adviser at DLA Piper who was from 2007 to 2014 a Commissioner of the Commodity Futures Trading Commission, passed away April 27. Chilton had a colorful reputation in the largely grey-hued world of commodities regulation. President George W. Bush appointed Chilton to the CFTC at aRead More


Backwards to the Future

Apr 16th, 2019 | Filed under: Newly Added, Commodities, The A.I. Industry, Investing in Commodities, Commodity Forward Pricing, Commodities

Oliver Wyman, the international consulting group, has posted a white paper about commodity trading in the face of the “relentless erosion in trading margins” since 2014. The paper estimates, moreover, that margins will continue to decline for at least the next five years because commodity markets will continue to becomeRead More


Commodities are Beginning to Resemble Equities

Apr 7th, 2019 | Filed under: Newly Added, Commodities, The A.I. Industry, Investing in Commodities, oil, Commodities, Energy, Gold

Observers have long noticed that the relationship between return shocks and equity price volatility is asymmetric. That is, positive shocks do not have a marked effect on volatility; negative shocks do. Fischer Black wrote on the subject more than 40 years ago. Recently there has been a good deal ofRead More


Green Bonds: The Future of Infrastructure Investing

Feb 24th, 2019 | Filed under: Newly Added, Commodities, Infrastructure, Investing in Commodities, Debt Types of Private Equity, Institutional Investing, Socially responsible investing, Hedge Funds, Commodities, Operationally Intensive Real Assets, Climate change, Institutional Asset Management, Private Investments, Real Assets, SRI and Clean Energy, Other Topics in A.I.

Two scholars affiliated with the Centre for International Governance Innovation, Waterloo, Canada, have taken a look at the future of green bonds, that is, bonds whose proceeds are employed to fund environmental initiatives. The paper, by Olaf Weber and Vasundhara Saravade, begins with a guesstimate as to the amount ofRead More


Do the Capital Markets Reward Low-Carbon Business Models?

Jan 15th, 2019 | Filed under: Newly Added, Commodities, The A.I. Industry, Investing in Commodities, Socially responsible investing, Natural Resources and Land, Emerging Alternative Investments, oil, Alternative energy, Commodities, Commodities: Examples, Climate change, Real Assets, SRI and Clean Energy, Other Topics in A.I.

A new study by two scholars, an American and an Italian, presents evidence that financial markets are pricing the risk of reliance upon carbon, penalizing carbon-intensive assets and rewarding low-carbon assets. Irene Monasterolo and Luca de Angelis, respectively of Boston University and the University of Bologna, begin with the ParisRead More


Financialization and the Volatility of Commodity Prices

Dec 20th, 2018 | Filed under: Newly Added, Commodities, The A.I. Industry, Industry Size & Managers, Investing in Commodities, oil, Commodities, Energy, Risk Management Strategies & Processes, Risk Management & Operations

A recent article in the Journal of Risk and Financial Management  takes a fresh look at a familiar issue:  whether the development of exchange-traded funds (ETFs) and related instruments tracking the commodities industry (or, in short, the financialization of commodities) has had an impact on the volatility of the pricesRead More


Using the Variance Risk Premium to Predict Futures Markets

Jul 15th, 2018 | Filed under: Newly Added, Commodities, Hard metals, Risk management, oil, Commodities, Risk Metrics and Measurement, Commodities: Examples, Energy, Risk Management Strategies & Processes, Gold

A new study of volatility in commodity prices indicates that both the total and the decomposed variance risk premiums of at least certain commodities markets contain information with predictive power. The variance risk premium is the pay-off of the synthetic variance swap contract. Specifically, it’s the difference between the floatingRead More


Stein’s Law and Rising Production Costs

Jun 26th, 2018 | Filed under: Newly Added, Commodities, Investing in Commodities, Insolvency, Commodities, Business News

Herbert Stein, who was President Richard Nixon’s chairman of the Counsel of Economic Advisors, is often quoted as saying, “If something cannot go on forever, it will stop.” This statement, known as “Stein’s Law,” has the right ring of profundity about it, a mixture of tautology and empirically verifiable generalization.Read More


Oil Price Shocks and Economic Growth

Apr 19th, 2018 | Filed under: Newly Added, Commodities, Investing in Commodities, oil, Commodities, Commodities: Examples

The U.S. is withdrawing from a multilateral agreement with Iran that was aimed at dissuading the Iranian regime from further progress toward nuclearization. In the meantime, the U.S. and its allies have bombed Syria in retaliation for that country’s chemical attacks on its people, and a shake-up in the topRead More


Eurekahedge: Greater China Mandates Pay Off for January

Feb 20th, 2018 | Filed under: Newly Added, Hedge Fund Industry Trends, Commodities, Hedge Fund Strategies, The A.I. Industry, Investing in Commodities, Indexes, Hedge Funds, Emerging Alternative Investments, oil, Digital currencies, Commodities, Commodities: Examples, Energy, Gold, Other Topics in A.I.

A new Index Flash Update from Eurekahedge says that hedge funds are off to a positive start to 2018. The industry globally gained 2.26% in January. Among developed world mandates, North American hedge funds were up 1.89%, followed by those of Japan and Europe, which gained 1.28% each. Higher numbersRead More


Gold as a Strategic Asset

Feb 11th, 2018 | Filed under: Newly Added, Commodities, Investing in Commodities, Commodities, Commodities: Examples, Gold

The World Gold Council has recently posted its analysis of the continued relevance of gold. As one might expect from the source, the WGC finds that gold is a strategic asset that can play several valuable roles in a portfolio. Toward this end, the paper offers a chart of gold’sRead More


Below the Black: A Review of Risk Reduction Strategies

Sep 13th, 2017 | Filed under: Newly Added, Commodities, Hedge Fund Strategies, Investing in Commodities, Risk management, Hedge Funds, Commodities, Risk Metrics and Measurement, Macro and Managed Futures Funds, Risk Management Strategies & Processes, Risk Management & Operations

Excerpted from the Alternative Investment Analyst Review, Volume 1, Issue 4 The Alternative Investment Analyst Review is the official publication of the CAIA Association. Access to the most current issue is an exclusive benefit of CAIA Membership while archived issues are available to the public in the Perspectives section atRead More


Til and Heckinger on Commodity Debacles, Part I

Aug 3rd, 2017 | Filed under: Newly Added, Commodities, Investing in Commodities, Commodities, Commodities: Examples, Energy

A new paper available at SSRN looks at two infamous commodity industry melt-downs: Amaranth and MF Global. It offers a diagnosis of each. Hilary Till, of the EDHEC – Risk Institute, and Richard Heckinger, of the Federal Reserve Bank of Chicago, share the by-line. They acknowledge research assistance from KatherineRead More


Dakota Access and the Army Corps of Engineers: An Odd Mistake?

Nov 13th, 2016 | Filed under: Newly Added, Commodities, Infrastructure, oil, Commodities, Operationally Intensive Real Assets, Commodities: Examples

On November 7, the U.S. Army Corps of Engineers put out a statement that said that the Dakota Access Pipeline (DAPL) had agreed to halt its controversial ongoing construction in North Dakota. The following day, which happens to have been Election Day, [so non-election news went largely uncovered], the ownersRead More


Eurekahedge: Redemptions Exceeding New Investment for HFs Worldwide

Sep 5th, 2016 | Filed under: Newly Added, Commodities, Hard metals, Hedge Funds, Commodities, Commodities: Examples, Energy, Relative Value Hedge Funds

Hedge funds have now seen three consecutive months in which redemptions have exceeded new investment, for a net outflow. The net outflow for July alone was $5.7 billion. Fortunately, July also saw performance based gains of $10.5 billion, so the total assets under management grew slightly. The table below adaptedRead More


The Shale/Fracking Revolution: 1998 to 2011

Aug 23rd, 2016 | Filed under: Newly Added, Commodities, Investing in Commodities, oil, Commodities, Commodities: Examples

A critical revolution in the crude oil and natural gas markets began 18 years ago. Gary Sernovitz, who has given the world his thoughts on this revolution in the new book The Green and the Black, has had some convenient seats whence to observe, most recently as a managing directorRead More


2016 Allocator Trends Report: Consensus and Dissension

Apr 7th, 2016 | Filed under: Newly Added, Commodities, Investing in Commodities, Commodities

Context Summits has published a detailed report on the views of those who allocate money into hedge funds. Almost everybody they talked to is in on the act. Ninety-six percent of investors expect to allocate to two or more hedge funds in 2016.  A majority (57%) were prepared to investRead More


Proposed Reg AT: Comments Pile Up at the CFTC

Mar 22nd, 2016 | Filed under: Newly Added, Commodities, The A.I. Industry, Regulatory Environment, oil, Commodities, Commodities: Examples, Energy

The CFTC received a last-minute pile-up of comments on proposed rule 80 FR 78824, on automated trading. The commenters generally are not in a mood to pat the agency on its intangible back and congratulate it on a job well done. Quite the contrary. The notice of proposed rule-making (NPRM)Read More


FCStone Financial on Grains and Volatility

Mar 10th, 2016 | Filed under: Newly Added, Commodities, Investing in Commodities, Forex, The Global Economy & Currencies, Commodities, Commodities: Examples, Finance & Economics

A new white paper written by Arlan Suderman, chief commodities economist for INTL FCStone Financial, discusses the consequence of the strong dollar of the last two years on the volatility of grain prices, focusing especially on corn. Before this period, there was the global financial crisis, and the “quantitative easing”Read More


More about Arch Coal and the Dusty Trail Ahead

Jan 24th, 2016 | Filed under: Newly Added, Commodities, Investing in Commodities, Socially responsible investing, Commodities, Commodities: Examples, Energy, SRI and Clean Energy, Other Topics in A.I.

I wrote here last week about the demise of Arch Coal.  I was reminded of the incompleteness of my treatment there by the commenters on that piece, and I’ve been reminded again by subsequent developments. More then: in December 2013 Arch made a tender offer for its $600 million ofRead More


Arch Coal: Another One Bites the Coal Dust.

Jan 13th, 2016 | Filed under: Newly Added, Commodities, Investing in Commodities, Alternative energy, Commodities, Commodities: Examples, Energy, SRI and Clean Energy, Other Topics in A.I.

Arch Coal, one of the biggest coal companies in The United States, entered Chapter 11 Monday morning, Jan 11. A prominent law firm, Davis Polk & Wardwell, will be taking it through the process, as will financial advisor PJT Partners. Arch (NYSE:ACI) hit its recent high stock price on AugustRead More


A Perennial Gale Hits the Coffee Industry

Jan 11th, 2016 | Filed under: Newly Added, Commodities, Agriculture, Investing in Commodities, Farmland, Natural Resources and Land, Commodities

The popularity of the drip coffee maker is in decline, or at least it has passed its peak.  In 2013. 58% of coffee drinkers had used such a coffee maker on the day before the day they were asked, that is, “yesterday.” That number was down to 54% in 2014,Read More


The Canary in the Coal Stocks and Fossil Fuel Divestment: the Portfolio You Save May Be Your Own

Sep 14th, 2015 | Filed under: Commodities, Energy, Climate change

A Wall Street analyst recommends bottom fishing in fossil fuel stocks and does an excellent job in analyzing all the market forces EXCEPT the primary one, rapidly increasing climate change. If he is typical of Wall Street expert analysis on fossil fuel stocks, be afraid. Be very afraid. Read More


CFTC Exempts ASX Clear from DCO Registration

Aug 25th, 2015 | Filed under: Hedge Fund Industry Trends, Commodities, Alpha Hunters, Alpha Seekers

The CFTC has issued its first exemption from the CDO registration mandate under 5b (h). The successful petition for that exemption, from ASX Clear, has the additional merit of having inspired an idiosyncratic seeming, but concise, comment letter, quoted in full here. Read More


Eurekahedge: The Markets are Reading the Headlines

Aug 18th, 2015 | Filed under: Commodities, Hedge Fund Strategies, Currencies, CTA, Alpha Strategies, Alpha Seekers

In the three month period that ends with July, Eurekahedge’s Greater China Index (which has 85 constituents) is down 9.39%. That has come about for precisely the reasons that a reader of the pertinent headlines would guess. Read More


Commodities & Currencies From May to August: How Much Has Changed

Aug 12th, 2015 | Filed under: Commodities, Currencies, Insolvency

What a difference a summer makes! In May of this year it was still taken for granted that the "normalization" of Federal Reserve policy and so of U.S. interest rates approached. Now, that cannot even remotely be taken for granted.Read More


Overtrading and the Danger of Pro Rata

Jul 30th, 2015 | Filed under: Commodities, Algorithmic and high-frequency trading, Currencies, Derivatives, Forex

Guest columnist Ginger Szala looks at pro rata and what happens if...Read More


Vindication for Pirrong and Irwin: Why Are Trafigura’s Profits Up?

Jun 22nd, 2015 | Filed under: Media Coverage of Hedge Funds, Commodities, Derivatives, Indexes

Trafigura has done quite well from the decline in crude oil prices in recent months. So well, in fact, as to throw a harsh light on a story that appeared in The New York Times in December 2013. Read More


House of Saud Retains Plenty of Clout

Jun 11th, 2015 | Filed under: Commodities, Macroeconomics

A measured view of the underlying reality of the world market in crude oil suggests that the price may have gone as low as the Saudis want it to go. For traders there may be little if any further gain on the downside. Read More


Are CTAs mumbo jumbo or additive for a diversified hedge fund portfolio?

Jun 9th, 2015 | Filed under: Hedge Fund Industry Trends, Commodities, Hedge Fund Strategies

Guest columnist Don Steinbrugge looks at the value of trend-following CTAs in a portfolio.Read More


Copper Prices: Why the Downslope?

May 26th, 2015 | Filed under: Commodities, Hard metals, Risk management, Technology

How long will it take before the world again sees copper at around $10,000 a ton, the going price it touched (though briefly) in early 2011? Perhaps several more years and another full business cycle. There may be a lot of down before an upturn gets us there. Read More


Down Memory Lane: That WTI-Brent Divergence

Feb 18th, 2015 | Filed under: Commodities, Infrastructure, oil

For one professor, the surprising divergence in the prices of WTI/Brent crude in the period 2010-2012 was a case study in how commodity prices can teach us about supply chain conditions. Faille looks back at his article, and forward past today's calmer but still-fluctuating spread. Read More


ECB Beats SNB in race for the Bottom

Jan 19th, 2015 | Filed under: Commodities, Algorithmic and high-frequency trading, Currencies

An SNB announcement caused wild market moves Jan. 15th, not only in Forex but in commodity and equity prices as well. In the wake of the commotion, one key question has to be: why the announcement? Why this sudden change in the policy of Switzerland's central bankers? Read More


Top 5 Alpha Stories of 2014

Dec 30th, 2014 | Filed under: Commodities, Alpha Hunters, Emerging markets

In the middle of the year now ending, the U.S. Supreme Court delivered as complete a victory as it could manage to the hold-out bondholders in the Argentine-default dispute. Enforcement efforts plod on, and it seems likely a related story could make our top five list next year, too. Read More


Case study: Straits gives managed futures a facelift

Dec 18th, 2014 | Filed under: Retail Investing, Commodities

As alternative investments become more mainstream, managers who traditionally have operated in the alternatives arena face a number of questions, including what is the right offering, the proper structure and how do we market the new vehicle. Guest columnist Ginger Szala examines the thought processes of one group as they made the leap to retailization.Read More


Qatar and the QIA: When the SWF Is Also a Family Office

Dec 10th, 2014 | Filed under: Commodities, Institutional Investing, Technology

The royal family in Qatar, the House of Thani, just took direct control of the emirate's sovereign wealth fund. Also, that fund just invested big in Uber, confirming its reputation as perhaps the worlds most aggressive deal-hunting institution. Read More


Don’t Blame the Swiss: Results Discounted Days Before Vote

Dec 8th, 2014 | Filed under: Commodities, Currencies, Hard metals, Forex, Gold

The price of gold took a swan dive as November ended, just as Swiss voters formally nixed an initiative that would have required the central bank to buy a lot of the stuff. Faille argues that this is not a matter of cause and effect. It is, on the other hand, a fascinating case study in the discounting machinery that is a market. Read More


The Building of an Infrastructure for Renewables: A Report

Nov 5th, 2014 | Filed under: Private Equity, Commodities, Infrastructure, Socially responsible investing, Alternative energy

In 2012, [as the crude oil price was settling in to $110 and low vol,] the renewables’ infrastructure space for private funds reached an aggregate estimated deal value of $132 billion. In 2013, that fell to $95 billion. It now seems unlikely that 2014 will match last year. Read More


The Undead Enron Model Returns to the World above Ground

Nov 2nd, 2014 | Filed under: Commodities, Regulatory, Legislation/Court rulings, Energy

Enron was once the leader in a category of merchant traders that mediated in the world of energy commodities. Enron died, and banks largely took it over. Yet in spirit, at least, Enron is back. Read More


Central Clearing and the Bank of England

Oct 29th, 2014 | Filed under: Commodities, Risk management

A Bank of England paper discuses the "cover 2" standard for the adequacy of the default funds of central clearing houses, an issue of increasing importance as the push to centrally-clear everything picks up steam. One question it raises somewhat incidentally is the proper pronunciation of the acronym SLOIM, for "stressed losses over initial margins." Read More


The Bubble This Time: Oil & Gas Energy Stocks?

Oct 15th, 2014 | Filed under: Commodities, Indexes, Energy

If we look for the recent peak in Dow Jones U.S. oil & gas stocks we’ll look to the start of the summer. In June of this year the energy sector got above $850. The fall from that height puts the size of our correction in the neighborhood of 16%. It is possible these stocks are leading the rest of the market down. Read More


Exemptions and Pools: CFTC Harmonizes with the JOBS Act

Sep 17th, 2014 | Filed under: Hedge Fund Regulation, Commodities

Two rules within the CFTC rulebook that offer exemptions for certain CPOs from certain regulatory requirements mirrored the original pre-JOBS Act Reg D on the SEC side. But of course we are now in a post-JOBS Act world, and the CFTC staff has now acted, not through a rule change but by staff letter, to harmonize with its sister agency and with the JOBS Act mandate. Read More


Producing Energy: The Closest Thing to a Perfect Asset

Jul 7th, 2013 | Filed under: Commodities, Alpha Seekers, Energy

Guest columnist Paul Thomas looks at the energy markets.Read More


After You Go as Low as You Can Go

Jul 2nd, 2013 | Filed under: Commodities, CTA

Welton has modeled an investment approach, specifically a multi-asset class trend following approach, and has measured how it would have performed if back-fitted into certain periods of sustained and sharp interest rate increases in the decades since the death of Bretton Woods. Read More


Marc Rich: A Life, Not Just a Pardon

Jul 1st, 2013 | Filed under: Commodities, Currencies

We pause to mark the death of a man who, more than any other, was responsible for the creation of a spot market in crude oil in the hectic period after the Yom Kippur War. Read More


Rice Elucidates Views on Managed Futures, Retail Investors

Jun 24th, 2013 | Filed under: Hedge Fund Industry Trends, Commodities, CTA

To encourage further exchange and understanding, I went back to Mr. Rice, after reading a comment from our reader, and asked him to expand on managed funds and their noncorrelation with traditional (largely equity) investment strategies. Tags, Agriculture, Commodities, Derivatives Read More