The Market is not Enough to end Fossil Fuel use

In recent years, proponents of clean energy have taken heart in the falling prices of solar and wind power, hoping they will drive an energy revolution. But a new study co-authored by an MIT professor suggests otherwise: Technology-driven cost reductions in fossil fuels will lead us to continue using all the oil, gas, and coal we can, unless governments pass new taxes on carbon emissions.

"If we don't adopt new policies, we're not going to be leaving fossil fuels in the ground," says Christopher Knittel, an energy economist at the MIT Sloan School of Management. "We need both a policy like a carbon tax and to put more R&D money into renewables."

While renewable energy has made promising gains in just the last few years -- the cost of solar dropped by about two-thirds from 2009 to 2014 -- new drilling and extraction techniques have made fossil fuels cheaper and markedly increased the amount of oil and gas we can tap into. In the U.S. alone, oil reserves have expanded 59 percent between 2000 and 2014, and natural gas reserves have expanded 94 percent in the same time.

"You often hear, when fossil fuel prices are going up, that if we just leave the market alone we'll wean ourselves off fossil fuels," adds Knittel. "But the message from the data is clear: That's not going to happen any time soon."

This trend -- in which cheaper renewables are outpaced by even cheaper fossil fuels -- portends drastic climate problems, since fossil fuel use has helped produce record warm temperatures worldwide.

The study concludes that burning all available fossil fuels would raise global average temperatures 10 to 15 degrees Fahrenheit by the year 2100; burning oil shale and methane hydrates, two more potential sources of copious fossil fuels, would add another 1.5 to 6.2 degrees Fahrenheit to that.

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Google Launching Experimental Patent Market Place

Google announced this morning the launch of an experimental program that will allow it to purchase patents from businesses and other patent holders who wish to sell. The company says its new “Patent Purchase Promotion,” opening next month, is an effort to “remove friction” from a patent market that currently fraught with patent trolls, lawsuits and other wasted efforts.

On its new online portal, patent holders will be able to essentially list the patents they have for sale, and set their own prices. The marketplace will not remain open indefinitely, however – instead, Google says that it will go live on May 8, 2015, and will be available through May 22, 2015. The decision to keep it open only for a limited time means Google will have to work quickly to determine which patents it wants to buy, which benefits sellers in need of a more immediate decision.

If Google decides to buy a patent, it says it will work through due diligence with the company, and close the transaction “in short order.” In fact, the company says it anticipates that all patent sellers will be paid by late August by way of ACH bank transfer.

The portal is only open to U.S. patent submissions, it should be noted.

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Tablet Market Contracting, Phablets, Apple to Blame?

Did Apple just murder the tablet market?

That’s the conclusion reached by Boy Genius Report, based on data assembled by analytics firm Flurry. That data suggests that Apple “won” the holiday season, with the company’s hardware accounting for 51.3 percent of device activations worldwide (followed by Samsung with 17.7 percent, Nokia with 5.8 percent, and Sony with 1.6 percent).

Much of those activations came from oversized phones. “As we reported in September (pre-iPhone 6 Plus), phablets were gaining share,” Flurry wrote in a blog posting accompanying its data. “This Christmas, it appears even more consumers are switching to the larger phone now that there is an iOS option.”

According to Flurry’s numbers, full-sized tablets accounted for only 11 percent of new devices in 2014, a decline from 2013, when that form-factor totaled 17 percent of the new-device market; small tablets experienced a smaller decline, falling from 12 percent to 11 percent of new devices between 2013 and 2014. Meanwhile, phablets expanded from 4 percent of new devices in 2013 to 13 percent this year.

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Oil Prices Should Worry Putin More Than Western Sanctions

This week, as falling oil prices have hammered the Russian economy, President Vladimir Putin has warned repeatedly that his country, a nuclear superpower, must not be "blackmailed." He was talking about economic sanctions, but there is a different lesson he should be drawing right now and it has nothing to do with the U.S. or the European Union.

Putin's response to the sanctions, imposed to dissuade him from further aggression in Ukraine, has been to shore up the big state companies and banks most affected. To compensate these businesses for their losses, as sanctions have squeezed them out of international credit markets, the government has raided the state budget, the pension fund and privately held companies. Smaller businesses are being crushed, accelerating a long-term trend under Putin in which Russia's economy has become ever more concentrated in state hands and reliant on natural resources -- especially oil and natural gas.

When times are good, these resources are a source of immense power and wealth. They were the engine that drove Russia's extraordinary 7 percent average annual growth from 2000 to 2008, cementing Putin's popularity. An abundance of natural gas, in particular, has also allowed Russia to punish or reward other countries by imposing high or low prices, or by simply cutting them off.

That pipelines game continues unabated. On his way to today's talks on the Ukraine crisis in Milan, Putin attended a military parade in Serbia celebrating Belgrade's liberation from German occupation in World War II. He used the occasion to discuss building the South Stream gas pipeline, which the EU has blocked since the Ukraine crisis developed but is popular in Serbia and other countries that would gain by hosting it. He also warned that the European Union may lose its gas supply this winter.

The flipside to all this energy wealth, however, is that Russia's economy has remained too dependent on energy prices: The sector accounts for about half of government revenues and a quarter of gross domestic product.

Russia's annual budget loses about $2 billion for every dollar fall in the price of oil -- a hit that couldn't come at a worse time. Sanctions, a falling ruble, rising inflation and rapid capital flight are already helping to push the economy toward recession. Although Putin himself will survive -- he has $450 billion in reserves and a population thrilled by his annexation of Crimea -- Russia is not getting any stronger. No wonder Finance Minister Anton Siluanov recently said Russia "simply cannot afford" its ambitious $500 billion rearmament program.

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26,000 Bitcoins Dumped Over Weekend, Dropping Price

After buyers snapped up $7.8m worth of bitcoins that were selling for $300 each on exchange Bitstamp on Monday, bitcoin’s price appears to have found a hard floor in what has been a largely unpredictable trading period recently.

On Sunday, bitcoin’s price dropped through the 18-month average purchase price of $337.60, signalling uncertainty to many traders in the market. Then, in the early hours of the Asian morning on Monday, a sell order of 26,000 BTC at $300 that was placed on exchange Bitstamp brought a temporary halt to the volatile price and narrowed bid-ask spreads between the four exchanges in CoinDesk’s Bitcoin Price Index (BPI).

By the time of the European morning however, buyers had snapped up the entire order and the BPI jumped up into the low-to-mid-$320s.

“When the sell order for 26,000 BTC came onto Bitstamp, the price dropped from $317 to $300 in two seconds. I’ve just bought back in now that block has been lifted,” said Adam O’Brien, CEO of BTC Solutions, a Canada-based provider of ATM exchanges and leveraged trading services for bitcoin.

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One interpretation is the investor is purposefully trying to force down the price of BTC so they can buy back at a much lower price.  Call it something of a confidence scam.  The other possibility is someone has been holding for a long time and has lost confidence in BTC going to reclaim the $1k+ mark.  Alternately, it was an early adopter who found they needed the $.

Popular online: Chinese Killing Bitcoin's Price (really, guys? really?)

AntiChinese Theory #1: Alibaba IPO Sucked Them Away!

The price of bitcoin has plummeted in the past few days, and some are blaming the Alibaba IPO for the virtual currency's fall.

Touching as low as $381.17 earlier Friday, bitcoin is trading at a far cry from its position around $513 less than a month ago or nearly $650 in July. And while the cryptocurrency has been languishing for several weeks, it's seen an increasing slide from Monday's open around $470.

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AntiChinese Theory #2: Too Many Chinese Miners!

Bitcoin is getting hammered, marking the culmination of a rather gloomy summer in the market for the digital currency. After a 7.35% fall on Thursday, it is now down another 6% since that overnight close and has traded Friday at its lowest level since April, according to Coindesk’s Bitcoin Price Index.

The clearest explanation for this latest collapse is more technical than fundamental: essentially, there’s been an absence of big new buyers over the past three months, which has given sellers an excessive impact on the price. It is now down more than 30% since June 19 and while the decline has been more gradual, it is now running into automated triggers that are exacerbating the slide. Other fundamental explanations are offered up as well, the most interesting theory being that Chinese bitcoin miners are dumping the digital currency for dollars.

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San Francisco Open Exchange Intends to be Kayak for Bitcoin Exchanges

One of the remarkable – and perhaps most confusing – aspects of bitcoin is the fact that every bitcoin exchange seems to have a different price for the cryptocurrency.

Of course, no two exchanges are ever alike because they all serve different markets. When it comes to how much it costs to buy or sell bitcoin, this is especially true.

The reasoning for this has to do with bitcoin being a global and largely unregulated market. Because it is bought and sold all over the world, there are numerous prices for it – with no centralization dictating any one.

A new startup called San Francisco Open Exchange aims to fix that. Or, at the very least, its platform will allow users an opportunity to potentially capitalize on the spread across different bitcoin exchange markets.

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Bitcoin Stable, DogeCoin Surges

Bitcoin has continued its uncharacteristic streak of stability over the weekend, with its price never straying far from $478 (£294, €370).

Most other major cryptocurrencies have followed in the example set by bitcoin, as litecoin, peercoin, darkcoin and namecoin all shifted by less than 2% in value since Friday.

The only big player to see any significant movement was dogecoin, which saw its market capitalisation surge to £40m.

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First Cryptocurrency (bitcoin) Derivative Launches

Good news for Bitcoin enthusiasts: TeraExchange today launched a swap based on the cryptocurrency.

It is the first financial product based on Bitcoin to receive approval from the Commodity Futures Trading Commision, as Reuters’ Douwe Miedema reports:

The derivative allows clients to protect the value of their bitcoin holdings by locking in a dollar value, offering an insurance against the astronomical price swings that have plagued the computer-generated currency.

“For a merchant to take bitcoin, there wasn’t until this product a regulated way for them to put on a hedge to manage the risk … and now with this product they can,” Christian Martin, who heads TeraExchange, told Reuters.

The launch comes nearly six months after TeraExchange announced plans for the swap this spring. As Miedema writes, “The Tera Bitcoin Price Index was based on information from six different exchanges, the company said, a number it expected to grow. It had agreed with the exchanges to share information if there were suspicious price moves.”

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Has Agora Replaced Silk Road as the new Dark Net Bitcoin Market?

For two and a half years, the Dread Pirate Roberts and his Silk Road black market ruled the Dark Web. But last year’s FBI’s takedown of that narcotics smorgasbord opened the underground trade to competitors. Now those sites have a new leader, one that’s bigger than the Silk Road ever was and continues to grow explosively.

The online bazaar for contraband known as “Agora” now has more product listings than any other online black market, according to a report released last week by the Digital Citizens Alliance, a nonprofit focused on internet safety. The analysis counts 16,137 products for sale on the site, which is protected by the anonymity software Tor and accepts only bitcoin. That’s about 200 more listings than Silk Road 2.0, a reincarnation of the original Silk Road launched earlier this year by several of the same administrators. It’s also several thousand more than were offered on the first Silk Road before its seizure in October of last year.

“Just as on the rest of the internet, users on the dark net are very quick to move on to new things and move away from those products and websites that seem stale and old,” says Adam Benson, communications director at Digital Citizens Alliance. “Maybe that time has come for Silk Road.”

The latest numbers for Agora, whose name alludes to an ancient Greek meeting place or market, represent a dramatic shift from just four months ago, when it had only 7,400 product listings. That’s half as many as Silk Road 2.0 hosted at the time. The biggest factor explaining the shift, perhaps, has been the misfortune of Agora’s competitors. In February, Silk Road 2.0 claimed to have been hacked and lost about $2.7 million worth of users’ bitcoins. The market since says it’s repaid 83 percent of the victims of that hack, which affected 40 percent of the site’s active users.

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Bitcoin Supply too Large for Demand

Bitcoin’s price is poised for “acute instability” due to an oversupply of coins from miners and large merchants, along with a weak growth in demand, according to a new research note from financial giant Citi.

The Citi analysis points to the increased sophistication and cost of mining as a major driver for growth in bitcoin supply.

As mining costs rise, miners come under pressure to sell their freshly unearthed bitcoin to recoup the costs of their investment in equipment. Citi notes that about 3,500 BTC are mined daily, against a backdrop of 60,000–10,000 BTC in daily trading volume in recent months.

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What Caused the Recent Bitcoin Price Crash?

The price of bitcoin on the CoinDesk Bitcoin Price Index (BPI) has declined more than $60 today (by the time of publication), falling to a low of $435.60. However, a more serious decline was observed at one major bitcoin exchange.

The development is the latest blow to the price of bitcoin, which had slumped to its lowest level since May late last week. The decline has since been largely attributed to a worsening short-term news outlook, as well as the industry’s margin traders, though alternative theories have been proposed.

At press time, at least one notable industry analyst, along with a host of exchange users are suggesting that margin trading may have once again played a factor in today’s decline, as a flash crash observed on popular bitcoin trading platform BTC-e caused the price of bitcoin on its exchange to decline sharply to a low of $309.

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Why has Bitcoin's Price Stabilized?

Bitcoin opened July with a value of circa $640 and by the end of the month it settled at just under $590. During the month of July several events occurred that should have had an effect on the value of, what is recognized as, a volatile commodity (all currencies can be thought of as commodities in economics). During the month of July the proposed New York regulations for traders that accept bitcoins, as well as those that store them, were announced (BitLicense). This announcement happened on July 17th, yet the Bitcoin value remained stable until July 20th. Why did the market not act on news that would have adversely affected price only two or three months before?

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Ukraine: Not Yet Conquered

 

The battles for the East are continuing.  It appears the Pro Russian groups have been completely ousted in Kharkov: 70 arrests were made.  However, that is not the case in Lugansk and Donetsk.  In Lugansk, the pro russian forces have taken hostages (most have been freed).  These guys are starting to cross into the terrorist category.

I suspect that with Kharkov cleared, the next city to be is Lugansk.  Donetsk is the hardest of the lot with so many having shown up in support of the 'People's Republic of Donetsk': I've seen claims of up to two thousand.  The picture above is from the admin building the pro russian folks have barricaded themselves in.  Earlier in the day, a human chain of women - babuschkas really - 'blocked' access until the barricade was in place. 

Timoshenko has arrived in Donetsk.  I am sure this will completely help the situation.  Good grief.  That woman is poison.

 Everyone in the West is stating the Russians are behind the latest attempts at seizing the east's admin buildings and whatnot.  US Secretary of State Kerry even called it a pretext for an invasion.

There was a fight in the Rada in Kiev.  The communist rep Symonenko running for president who is actually from Donetsk accused government in Kiev of playing into Russia's hands by removing the "protestors" in the east.  One of the Right Sector twits attacked him.  Whether he's right or a Russian puppet, fist fights in the Rada?  Really?

The US has moved another Burke class destroyer into the Black Sea officially in support of Ukraine.  NATO is increasing troops and planes on the border of Ukraine.  (C'mon Obama, just say '173rd')

NATO is apparently supplying Ukraine with nonweapon supplies for its military.  Fuel, trucks, food, etc.  This may make a difference.  You can't convert over an entire army in a month to new weapons, but trucks can definitely help.  They need to supply ATGMs and SAMs for the Ukrainian soldiers next.  That will make another difference.

There is a rumor (of course there is!) the pro Russian forces are supposed to make a lot of blood shed tonight to provide the pretext for Russia's intervention.  We'll see.

The EU, America, Russia and Ukraine were supposed to meet over the crisis.  I suspect Russia will obstruct or obfuscate and delay.  

Russia, btw, was forced to cancel a bond sale.  No one wanted to buy at the prices they wanted to offer.  The market DOES care what Russia is up to.