In an article that's not new, but new and more relevant than ever to me, Macleans's Jason Kirby provided a reminder of his magazine's December project where they asked a number of industry experts for charts they believed were the most important for Canadian investors. The results were terrific even though they didn't ask me for a contribution (yes, I'm feeling a little slighted. Miffed even).
There are 35 charts in total, and virtually all provide interesting insights. For my money, the most poignant were from McGill University's Mike Veall (on domestic productivity), Ben Rabidoux on debt and housing, and Glen Hodgson on Canada's soon-to-be-shrinking labour force.
"The charts every Canadian should watch in 2015" – Macleans
State-owned Saudi oil giant Aramco is providing U.S. energy workers with a ruthless lesson in global capitalism, advertising jobs for those made redundant by the falling oil prices they helped create by not cutting crude production.
"Saudi Arabia Wooing Fired U.S. Shale Workers to 'Join Our Team'" – Bloomberg
Start-up company Orbital Insights has a novel method of generating an information advantage while investing in the energy sector – satellites,
"Jimi Crawford – an AI expert who has worked for NASA and Google – …[analyzes] massive numbers of photos of oil tanks with floating lids. As a tank is depleted, the lid sinks, and [how] the sun casts shadows on the inside of the tank changes. By detecting patterns in how those shadows change, analysts can estimate how much oil is available in all the tanks it monitors."
"How AI can calculate our oil surplus…from space" – Wired
The maddeningly brilliant (if you're in the same industry) Izabella Kaminska discussed the ramifications of widespread negative bond yields with help from his economic eminence Paul Krugman. For Ms. Kaminska, negative yields makes cash analogous to the storage trade in oil which is a fascinating comparison.
"A fundamental point behind all this is that you never engage in a contango (storage) trade until the rate of return compensates you for your cost of storage/insurance over the period in question… The very same point applies to cash storage. If the costs associated with negative rates are larger than the costs of storage, cash investors receive the equivalent of a free lunch – something that is unlikely to be tolerated by the market for long."
"On the limits of negative rates" – Kaminska, FT Alphaville
See also: "The Ultimate Financialization/Storage Play" – Climateer Investing
The Economist published a highly interesting report suggesting that the combination of computing power and data collection threatens significant portions of insurance companies' business.
"…The uncertainty that underpins the need for insurance is now shrinking thanks to better insights into individual risks. The growing mountain of personal data available to individuals and, crucially, to firms is giving those with the necessary processing power the ability to distinguish between low-risk and high-risk individuals (and those in between). Thanks to technological innovation, sensors that monitor our every move are becoming cheaper, cleverer and more ubiquitous."
"How technology threatens the insurance business" – The Economist
The FT's John Authers identifies the top-yielding asset class in the world and it's likely to surprise – shipping financing. Stay tuned for highly-priced structured product to provide retail exposure.
"Shipping finance ahoy!" – Authers, Financial Times (video)
Tweet of the day: "@reformedbroker Hey look, Starbucks CEO just came up with the single worst idea in American history! http://t.co/6UjmayubqM http://t.co/BE71hcDxnm"
Diversion: "Rare video captures volcanic lightning from an exploding volcano." – Sploid
Scott Barlow