A Band Without a No. 1 Hit Is Outselling Bruno Mars and Ed Sheeran – Trending Stuff

An old New Wave rock band that’s never released a No. 1 song in the U.S. is selling more concert tickets than the biggest pop stars in the world.

Depeche Mode, the British synth-pop group formed in 1980, is having one of the most remarkable tours in modern music and its most-successful concert run ever. The band sold 1.27 million tickets through the first nine months of 2017, more than Ed Sheeran, Justin Bieber or Bruno Mars — much younger pop acts at the peak of their fame.

In October, the band became the first act to sell out four consecutive shows at the Hollywood Bowl, an open-air theater in the hills of Los Angeles that’s hosted everyone from the Beatles to Luciano Pavarotti. Now Depeche Mode is back on the road for its second tour through Europe this year and will head to Latin America in 2018. Not bad for a group whose album sales peaked more than 20 years ago.

“Every time we go out and tour, we’re playing to more people,” said Martin Gore, 56, the band’s guitarist and lead songwriter. “It’s just incredible at this stage in our career.”

Old Rockers

Depeche Mode’s success speaks to the enduring power of old rock groups, which accounted for a big chunk of the $7.3 billion North American concert industry last year. The best-selling festival of 2016 was Desert Trip, a bacchanal in California’s Coachella Valley featuring acts that came to prominence half a century ago. According to researcher Pollstar, the top tours of 2017 are Guns N’ Roses and U2, which released their best-selling albums 30 years ago.

Yet Depeche Mode’s late-career surge is also a tribute to a band that has carefully nurtured and expanded a loyal army of fans known as the Black Swarm (or Devotees) who follow it all over the world. The mania for the group’s dance pop is strongest in Germany, where the last seven albums have topped the charts, but it reaches every corner of the globe.

Delly Ramin Moradzadeh was just 14 when she developed an obsession that has gripped teenagers from Munich to Buenos Aires. Listening to Los Angeles radio station KROQ in 1984, she heard the song “People Are People,” and immediately asked her mom to take her to Tower Records to buy Depeche Mode’s new album.

She had to wait two years before seeing the band at Irvine Meadows, an experience that cemented her devotion. Moradzadeh has seen Depeche Mode live more than 30 times since that fateful first taste, including seven times on this latest tour. She estimates she has spent more than $2,000 on tickets and merchandise this year alone.

“I warned my husband before we got married that I have this obsession you have to deal with once every little while,” Moradzadeh said.

She praises the band for constantly rewarding fans with shows at small venues and special releases. While other groups have reunited after years apart for a big payday, Depeche Mode has released a new record about every four years since the mid-1980s and devotes much of its current set to music from its latest album, “Spirit,” the band’s 14th.

Never Stopping

The group has never stopped touring, even during a drug-addled era that manager Jonathan Kessler dubs “the experimental years.” Lead singer Dave Gahan, whose distinctive baritone is one of the band’s signatures, has grown more confident as a performer with each tour, strutting across the stage like a man possessed. Where the band once struggled to sell more than a couple thousand tickets in Nashville, Tennessee, it now plays before crowds more than triple that size in the cradle of country music. 

Periods between tours give band members time to recharge and leave fans wanting more, especially because the group doesn’t venture to the same cities every tour. Salt Lake City was the first stop on the 2017 U.S. tour, a place that hadn’t hosted Depeche Mode since 2009. Eight years is also enough time for devotees to inculcate their children with a love of songs like “Personal Jesus” or “Enjoy the Silence.”

Depeche Mode doesn’t sell records like it did in the 1990s, nor has it ever reached the heights of fellow British rockers Coldplay or Oasis. But a group whose musical genre was once derided has earned long-overdue respect. Critics raved about the latest tour, while Marilyn Manson, Trent Reznor of Nine Inch Nails and Rihanna all cited the band as a major influence.

“They weren’t appreciated before,” said Kessler. “People didn’t get who they were or why they mattered musically. It’s one of the first electronic bands.”

Fighting Label

While Metallica and Taylor Swift have fought new ways of distributing music, Kessler has urged Depeche Mode to embrace new technologies, be it Apple’s iTunes or Spotify. Inspired by the Grateful Dead, which allowed fans to make their own recordings of live shows, Depeche Mode has often fought its record label and publisher to leave unlicensed videos on YouTube. 

Searching for the proper way to promote this latest tour, Depeche Mode opted to let a different fan take over its Facebook page every day to share stories and photos. Facebook is an ideal medium for Depeche Mode, whose core audience is between the age of 35 and 60. Fans have already created more than a dozen different fan pages and groups for Depeche Mode on the social-media platform.

This project gave those fans control of the band’s official page for the first time. Devotees from all over the world have shared their favorite memories, including some who say they’ve seen the band more than 40 times just this year. The page has 7.3 million “likes.”

While a single TV advertising campaign would cost millions, the Facebook promotion is free.

Read more: http://www.bloomberg.com/

Tesla Unveils Worlds Fastest Production Car and Electric Big Rig – Trending Stuff

Elon Musk pulled off a Steve Jobs-ian “one more thing” surprise at the unveiling of Tesla Inc.’s Semi model, rolling a new Roadster sports car out of the back of a big rig on stage.

The Semi truck going into production in 2019 will boast 500 miles of range, a battery and motors that will last 1 million miles and cheaper total operating costs than diesel models, Tesla’s chief executive officer said. The Roadster, available a year later, will be the fastest production car ever made, he said.

“The point of doing this is to just give a hardcore smack-down to gasoline cars,” Musk told the crowd gathered at Tesla’s design studio near Los Angeles, touting the Roadster’s 1.9-second 0-60 miles per hour time and 620 miles of range. “Driving a gasoline sports car is going to feel like a steam engine with a side of quiche.”

It was crucial for Musk to wow watchers of the Semi event. Tesla has stumbled out of the gate with the Model 3 sedan, the first car it’s trying to mass produce and sell to more mainstream consumers. With battery bottlenecks undercutting output, the CEO and master pitchman regenerated hype about future products capable of hauling in more revenue even as he struggles to get existing cars out of the factory.

 

Tesla’s new Roadster.

Source: Tesla Inc.

“Elon’s showmanship remains intact, even as his customers’ patience for Model 3 delivery wanes,” Karl Brauer, executive publisher of Kelley Blue Book and Autotrader, wrote in an email. “The specs on the new semi truck and sports car would put both vehicles at the top of their segments, assuming they can be produced and sold as part of a sustainable business plan. So far that final element has eluded Tesla.”

Tesla shares climbed as much as 4.5 percent Friday and were trading up 2.8 percent to $321.30 as of 9:48 a.m. in New York.

The truck is vital to Musk’s mission to electrify all the major forms of “terrestrial transport.” While battery-powered passenger cars generate much more buzz, electrifying big rigs would make a material difference in cleaning up the transportation sector.

The urgency to shift from emissions-spewing diesel engines is particularly acute in California, where the ports of Los Angeles and Long Beach plan to phase them out in favor of natural gas or zero-emission powertrains. Adding autonomous features like Autopilot — an enhanced version of which will be offered as standard on the Semi — may also help operators save on labor costs and spur major upheaval to the commercial trucking industry.

Tesla’s target market for the Semi is both fleet operators and independent owner operators. The company will be its own first customer, using the truck to transport parts from its battery gigafactory in Nevada to its auto assembly plant in California.

Read more: Tesla Takes Semi Orders From Retailer, Freight Shipper

The Semi boasts what Musk called a “thermonuclear explosion-proof” windshield that won’t shatter. The cab features a centered seat flanked by two 15-inch screens for navigation and blind-spot monitoring. And the truck integrates several components of the Model 3, including the screens, motors and door handles.

Tesla is far from alone in trying to electrify semi trucks. Mercedes-Benz maker Daimler AG has shown several battery-powered prototypes this year. Paccar Inc. is working on electric, hybrid, hydrogen fuel cell and natural gas-powered models, Chief Executive Officer Ron Armstrong said in April, though he cautioned it’ll be about 10 years before electric trucks pose a credible threat.

Volvo AB has been testing a hybrid concept truck for long-haul applications, while Navistar International Corp. and Volkswagen AG’s truck division have said they’ll jointly develop a battery-powered medium-duty truck for as soon as 2019.

“It is a highly competitive market among established truck manufacturers,” Consumer Edge Research analyst James Albertine wrote in a report Thursday. While many — if not all — are working on their own electric trucks, Tesla’s competitive edge lies in its battery-manufacturing and autonomous-software capabilities, he said.

For more on Tesla, check out the   podcast:

Read more: http://www.bloomberg.com/

The Marijuana Machine Rolls Ahead – Trending Stuff

Since Colorado legalized recreational marijuana in 2012, seven other states and the District of Columbia have followed suit. Next year, California, Maine, and Massachusetts will begin sales, potentially tripling the size of the legal pot market. By the end of 2018, 20 percent of Americans will live in a state where adults can legally buy and sell cannabis. Yet big problems remain unresolved, including a persistent black market that legalization was supposed to help undermine. There are also fights between states in favor of legalizing weed and localities that oppose it. And of course marijuana remains illegal under federal law, casting a shadow over the industry.

State tax revenue from marijuana sales exceeds $1 billion. California alone anticipates another $1 billion in annual tax revenue from legalization. But with an impending January 2018 deadline to begin issuing permits, there are signs that growers and retailers may not join the state-regulated system. Hezekiah Allen, executive director of the California Growers Association, estimates that just 3,500 of 40,000 farmers have signed up for permits but says that’s primarily because local governments haven’t issued them or have banned marijuana businesses outright.

This creates problems for state regulators. “We have to work with over 500 different cities and counties over the state,” says Lori Ajax, chief of California’s Bureau of Cannabis Control. “For us to issue a license, we have to make sure it’s not in violation of a city or county ordinance, and because of our size, that’s a challenge.”

California grows 13.5 million pounds of marijuana annually; less than 20 percent of it is consumed there. Growers may have to downsize as new rules ban out-of-state exports. If California’s markets open in January and many existing growers are left out, tax revenue could fall short, and a robust black market will persist. To become legal, marijuana businesses have to secure building permits and water rights and establish record-keeping protocols unfamiliar to an industry that’s long operated in the shadows. “It’s going to take decades for California to regulate its cannabis industry,” says Allen. “It’s been decades that we’ve been making this mess, and it’s going to take us a while to clean it up.”

In Maine, where a legalization ballot measure passed in 2016 by less than 1 percentage point, localities retain broad power to ban marijuana cultivators and retailers, potentially hindering the growth of the state’s cannabis industry. Massachusetts has a July 2018 deadline to issue its permits. That’s already been delayed once. In July state lawmakers established the independent Cannabis Control Commission to develop regulations. Even with the extension, the commission’s chairman, Steven Hoffman, says the July deadline is “a pretty tight time frame.”

Early difficulties are common for recreational marijuana. Nevada faced product shortages when its markets opened in July 2017. Alaska’s first year brought in $1.2 million in tax revenue, short of a projected $2 million. Colorado and Washington both took in less tax revenue than expected in their first year, but revenue has grown every year since and now exceeds projections. Colorado’s effective tax rate is around 30 percent, and Washington has a flat rate of 37 percent. Joseph Bishop-Henchman of the Tax Foundation says these relatively high taxes have allowed a significant black market to persist by making legal pot expensive. States that have legalized more recently have set the rate lower. In Oregon, it’s 17 percent. Maine and Massachusetts have proposed rates of about 20 percent, while California is planning for a 15 percent levy. There isn’t enough data to measure the impact of lower taxes, but Maine state Senator Teresa Pierce believes that Maine will “hit a sweet spot” and be able to undercut black market prices.

As momentum behind legalization grows, a federal crackdown appears less likely. To avoid prosecution under federal law, state legislatures adhere to the 2013 Cole Memorandum, a document issued during Eric Holder’s tenure as U.S. attorney general essentially assuring states that the feds won’t intervene as long as they follow their own rules. But the Cole Memo isn’t legally binding, and Attorney General Jeff Sessions has a long history of opposition to marijuana. “I think the Justice Department may rearrange the deck chairs a little bit, but ultimately, they’re not going to change direction too much,” says John Hudak, a senior fellow at the Brookings Institution. “It seems like a not-so-popular approach to an issue that most Americans don’t see as a problem.”

Marijuana’s ambiguous legal standing limits the ability of businesses to operate normally. Major banks are still unwilling to service growers and dispensaries. Marijuana companies are also ineligible for common tax deductions. This August, New Jersey Senator Cory Booker introduced a bill that would remove marijuana from the Controlled Substances Act, legalize it federally, and withhold prison funding from states with racial and class disparities in their marijuana arrest rates. With Republicans in charge of Congress, the bill is largely symbolic. That leaves states that have legalized pot trying not to attract undue attention from a potentially adversarial Trump administration. “I think as long as we keep our noses clean, we’ll be good,” says Republican Washington state Senator Ann Rivers.

 

Read more: http://www.bloomberg.com/

Teslas Newest Promises Break the Laws of Batteries – Trending Stuff

Elon Musk knows how to make promises. Even by his own standards, the promises made last week while introducing two new Tesla vehicles—the heavy-duty Semi Truck and the speedy Roadster—are monuments of envelope pushing. To deliver, according to close observers of battery technology, Tesla would have to far exceed what is currently thought possible.

Take the Tesla Semi: Musk vowed it would haul an unprecedented 80,000 pounds for 500 miles on a single charge, then recharge 400 miles of range in 30 minutes. That would require, based on Bloomberg estimates, a charging system that’s 10 times more powerful than one of the fastest battery-charging networks on the road today—Tesla’s own Superchargers. 

The diminutive Tesla Roadster is promised to be the quickest production car ever built. But that achievement would mean squeezing into its tiny frame a battery twice as powerful as the largest battery currently available in an electric car. 

These claims are so far beyond current industry standards for electric vehicles that they would require either advances in battery technology or a new understanding of how batteries are put to use, said Sam Jaffe, battery analyst for Cairn Energy Research in Boulder, Colorado. In some cases, experts suspect Tesla might be banking on technological improvements between now and the time when new vehicles are actually ready for delivery.

“I don’t think they’re lying,” Jaffe said. “I just think they left something out of the public reveal that would have explained how these numbers work.”

Here are four of Tesla’s most provocative battery claims—and an attempt to puzzle out how they might be achieved.

Truck Range: Haul 80,000 Pounds for 500 Miles 

Photographer: Tom Randall/Bloomberg

When Musk took the stage in an airport hangar in Hawthorne, California, his first proclamation was the Tesla Semi’s range: A fully-loaded truck would be able to travel at highway speeds for 500 miles.  The previous record-holder, unveiled by Daimler in October, is a truck that maxes out at 220 miles. 

A heavy-duty, long-range truck is the toughest vehicle to electrify while still turning a profit, said Menahem Anderman, president of Total Battery Consulting Inc., in Oregon House, California. Tesla may be doing it to prove a point. “If you can make a semi truck with batteries,” Anderman said, “then you can make everything else with batteries.”

Tesla is making its trucks more efficient by reducing wind drag to levels that are comparable to those of sports cars. But even if Tesla achieves record-breaking efficiency for the truck, it would still require a battery capacity somewhere from 600 kilowatt hours to 1,000 kilowatt hours to deliver on Musk’s claims, according to estimates from Bloomberg New Energy Finance. Split the difference, at 800 kWh, and it would mean a battery that weighs more than 10,000 pounds and costs more than $100,000—even before you build the truck around it. Tesla has priced the truck with 500-mile range at $180,000, less than the estimated prices of seven analysts surveyed by Bloomberg, and says fuel savings will result in a two-year payback when compared to diesel. 

One thing Tesla has going for it is the falling price of batteries. Musk may be banking on battery improvements between now to the early 2020s in order for its truck to make financial sense. The first Tesla Semis won’t hit the road until late 2019; even then, production would probably start slowly. Most fleet operators will want to test the trucks before considering going all-in. By the time Tesla gets large orders, batteries should cost considerably less.

Tesla Megachargers: 400 Miles in 30 Minutes  

Musk’s claim that the truck will be able to accumulate 400 miles of charge in 30 minutes would allow the Semi to achieve the first true long-haul ranges in the industry. A driver might start the day with 500 miles of range, top off the battery at lunch, and be able to complete driving the U.S. legal limit of 11 hours in a day with range to spare. But doing so would require a charger unlike anything seen before. 

“I don’t understand how that works,” said Salim Morsy, electric vehicle analyst at Bloomberg New Energy Finance. “I really don’t.” Tesla is claiming charging speeds that are faster than anything available now, and its customers will pay well below average market rates to access the network.

Tesla’s current generation of high-speed Superchargers have a power output of 120 kilowatts and can add about 180 miles to the battery in a Model S sedan in 30 minutes. But that’s for a passenger car, not a loaded truck. To meet Tesla’s claim of 400 miles in 30 minutes for a semi carrying 80,000 pounds would require its new Megachargers to achieve output of more than 1200 kW—or more than 10 times better than Tesla’s fastest chargers available today. 

Joe Fath, fund manager for T. Rowe Price Group Inc., Tesla’s seventh-largest shareholder, said that prior to the unveiling he thought Tesla’s heavy-duty truck might be able to address about a quarter of the hauling tasks performed by the largest heavy-duty freight trucks, known as Class 8 semis. In North America alone, these big trucks account for about $30 billion in sales each year, according to industry data tracked by Bloomberg.

The promises in Musk’s presentation persuaded Fath that Tesla will be able to compete in nearly two-thirds of the Class 8 market. “If they execute,” he said, “they have a very big opportunity.”

Guaranteed Charging Rates of 7 Cents per kWh 

A new, 40-stall Supercharger station and customer lounge in Kettleman, California.

The sticker price of any electric truck, regardless of size, is going to be higher than its diesel equivalent because of the batteries, which alone can cost as much as some standard diesel trucks. The $180,000 Tesla Semi will compete with diesels that cost as little as $100,000. The trick is to offset those higher upfront costs through lower maintenance and fuel savings.

Perhaps Tesla’s most head-scratching revelation is that it will guarantee truckers electricity rates of 7 cents per kilowatt hour. That could result in fuels savings of more than $30,000 a year for some truckers, according to Bloomberg estimates. Partly, Musk said, this will be done by adding solar power and massive battery packs at the charging stations.

While the economics of such a plan vary by region, under any scenario that BNEF’s Morsy expects, Tesla will be heavily subsidizing those electricity rates for customers. He estimated that Tesla will pay a minimum of 40 cents per kilowatt hour, on average, for every 7 cents paid by a trucking company. 

“There’s no way you can reconcile 7 cents a kilowatt hour with anything on the grid that puts a megawatt hour of energy into a battery,” Morsy said. “That simply does not exist.”

That may sound like a disastrous financial plan, but it’s no different from what Tesla does for its current Supercharger network. Tesla offers free electricity to most of its Model S and Model X customers while paying almost $1 per kilowatt hour to produce it, Morsy said. That amounts to a subsidy of as much as $1,000 per car in 2017.

Many electric utilities base their commercial rates on the peak amount of electricity that a customer draws at one time, even if that peak occurs only for a brief period. Tesla’s Megacharger stations would incur extremely high charges by drawing so much power so quickly. The best chance for mitigating those charges are to build Megachargers at existing truck terminals that already draw a lot of power, Morsy said, and by adding massive battery packs that can spread demand over time. 

From another perspective, these subsidies to support Megachargers could be a boon to Tesla’s balance sheet as it wades into an entirely new industry. It allows the company to maximize its upfront revenue by charging a lot for the trucks while spreading out the cost of building and operating the charging network over time. 

A Tiny Roadster With a 620-Mile Range 

Tesla’s new Roadster

Tesla claims that its new $200,000 Roadster is the quickest production car ever made, clocking zero to 60 in 1.9 seconds. Even crazier is the car’s unprecedented battery range: some 620 miles on a single charge. That’s a longer range than any battery-powered vehicle on the road—almost twice as long as Tesla’s class-leading Model S and Model X.  

To achieve such power and range, Musk said the tiny Roadster will need to pack a massive 200-kilowatt-hour battery. That’s twice the size of any battery Tesla currently has on the road. Musk has previously said he won’t be making the packs bigger on the Model S and Model X because of space constraints. So how can he double the pack size in the smaller Roadster?

BNEF’s Morsy has a twofold answer. First, he expects Tesla will probably double-stack battery packs, one on top of the other, beneath the Roadster’s floor. That creates some engineering problems for the battery-management system, but those should not be insurmountable. Still, Morsy said, the batteries required would be too large to fit in such a small frame.

“I really don’t think the car you saw last week had the full 200 kilowatt hours in it,” Morsy said. “I don’t think it’s physically possible to do that right now.” 

Again, Musk may be banking on the future. While Tesla began taking deposits on the Roadster immediately—$50,000 for the base model—the first vehicles won’t be delivered until 2020. Meanwhile, battery density has been improving at a rate of 7.5 percent a year, meaning that by the time production starts, packs will be smaller and more powerful, even without a major breakthrough in battery chemistry.

“The trend in battery density is, I think, central to any claim Tesla made about both the Roadster and the Semi,” Morsy said. “That’s totally fair. The assumptions on a pack in 2020 shouldn’t be the same ones you use today.”

The Semi and Roadster unveilings raised many questions about Tesla’s battery capabilities and plans for expanding the markets in which electric vehicles are competitive. Even Musk may need a few more years to figure out all the answers. 

Read more: http://www.bloomberg.com/

Bitcoin Surges After World’s Biggest Exchange Announces Plans for Futures – Trending Stuff

The allure of bitcoin was too much for CME Group Inc.

The world’s largest exchange owner reversed course today and said it plans to introduce bitcoin futures by the end of the year, only a month after dismissing such a plan. The largest cryptocurrency, which has surged more than sixfold this year, climbed to a record high after the announcement.

CME’s neighbor across the street in Chicago seems to have had a lot to do with the decision. Cboe Global Markets Inc. said earlier this year that it was going to begin a bitcoin futures contract by year-end or early 2018, and awaits approval from the Commodity Futures Trading Commission. The CME contract will settle in cash and use a daily price from the CME CF Bitcoin Reference Rate, which is supported by digital exchanges Bitstamp, GDAX, itBit and Kraken. Missing from that list is Gemini, one of the other large global exchanges, which struck a deal with Cboe.

A functioning derivatives market could help professional traders and investors access the incredible volatility inherent in bitcoin without having to trade on unfamiliar venues that may risk anti-money laundering and know-your-customer rules. It will also allow traders to hedge their cash positions in the digital currency, which to date has been difficult to do.

“As the world’s largest regulated FX marketplace, CME Group is the natural home for this new vehicle that will provide investors with transparency, price discovery and risk transfer capabilities,” Terrence Duffy, CME’s chief executive officer, said in a statement today.

The creation of bitcoin futures is a key step in opening the asset to institutional investors, who currently have few opportunities, said Spencer Bogart, head of research at Blockchain Capital, a San Francisco-based venture capital firm. Bitcoin Investment Trust, currently one of the only avenues for investors seeking bitcoin-backed securities, is trading at a premium of more than 30 percent above net asset value. The trust, known as GBTC, is a “physical” fund, meaning it holds bitcoin itself.

“The amount of institutional money in bitcoin now is very little because there are very few vehicles,” Bogart said. “If there are bitcoin futures, there can be futures-based” exchange-traded funds.

In the race for bitcoin derivatives, both CME and Cboe have lost to a startup. LedgerX won CFTC approval to offer swaps and options on bitcoin and began trading earlier this month. Volumes have been light so far. Yesterday, 103 bitcoin swaps traded on LedgerX, while nine options contracts changed hands, according to the exchange. The LedgerX options trades are physically-delivered, giving investors who hold a contract to maturity the ability to own bitcoin outright.

Ari Paul, a co-founder of Blocktower Capital, said LedgerX is starting out slowly on purpose. “DRW is a market maker there,” Paul said. “There’s pretty low volume. A million dollars a day. I do expect them to have a lot of volume very soon. They are intelligently ramping up.”

Many investors who want to can’t maintain ownership of bitcoin now, what’s known as custody, “either for regulatory reasons or because it’s scary and hard,” Paul said. But in a regulated market like futures that doesn’t become an issue. “The ability to easily short allows for market neutral strategies and makes high-frequency trading much easier. That draws a lot of attention from hedge funds and the traditional finance world.”

Gadfly: Bitcoin’s push into the mainstream

CME and Cboe face challenges to win over investors to their bitcoin futures. If the underlying pricing is unsound that could steer people away, said Mark Williams, a finance lecturer at Boston University’s Questrom School of Business.

“The concern is that CME will attempt to treat bitcoin like a corn or wheat future when this commodity is in a highly risky class of its own,” Williams said. “One of the major spots to buy and sell bitcoin are through unregulated bucket shop exchanges located outside of the reach of U.S. regulators.” He noted that since 2009, almost half of these types of exchanges included Mt. Gox, once the world’s largest bitcoin market, have gone bust. “CME has no other commodity future that looks like or behaves like bitcoin. To me this means trouble.” 

Jon West, head trader at digital asset brokerage Omega One, said the amount of daily margin CME and Cboe require will be a key ingredient. If it’s too high “then it’s not very useful for hedging because you need to have so much money in your account,” he said. CME should take it slow as it designs its contract, he said. “It’s a very complex asset with a lot going on.”

The creation of bitcoin futures should make it easier to create an exchange-traded fund based on the digital asset. Yet so far that’s been a much harder task. The U.S. Securities and Exchange Commission in March rejected a bitcoin ETF proposed by Tyler and Cameron Winklevoss — the co-creators of the Gemini exchange — saying necessary surveillance-sharing agreements were too difficult given that “significant markets for bitcoin are unregulated,” according to the agency.

CME is a giant in trading with products including futures on the S&P 500, oil and gold, and customer connections all around the world. The timing of the decision is a bit of a surprise. Just a month ago, CME President Bryan Durkin said on Bloomberg Television that “I really don’t see us going forward with a futures contract in the very near future.”

Under Duffy’s leadership it has pulled back from business interests that didn’t align with its historic role as a futures powerhouse, such as shutting down its European operations and exiting credit-default swap clearing. Its resistance to bitcoin futures was seen as aligned with Duffy’s vision of keeping the company’s focus on what it has always done well.

“I’m a little concerned about the fact that both of those futures contracts are cash settled,” said Garrett See, chief executive officer of DV Chain, a sister company of trading firm DV Trading, which trades cryptocurrencies. The Cboe contract will be settled using auctions on the Gemini exchange. See said there has not been a lot of volume in those auctions, so he raised the question of what happens if an auction fails, or there’s not enough volume to keep it from being manipulated.

“I’m really excited to see derivatives come into the space,” See said. “I see it as a great step, but in an ideal world I’d really like to see physical delivery” in futures.

Another benefit is the increased regulation that will come with bitcoin futures, Omega One’s West said. “Futures trading should deter some black market business and push it into more regulated places,” he said.

Read more: http://www.bloomberg.com/

Moores Defeat in Alabama Deals Trump a Rebuke Ahead of 2018 Races – Trending Stuff

The defeat of Republican Roy Moore in Alabama’s U.S. Senate race by Democrat Doug Jones was a stunning rebuke to the GOP’s anti-establishment wing led by Steve Bannon and a major political embarrassment for President Donald Trump.

Moore’s candidacy was the opening gambit in Bannon’s war to oust Senate Majority Leader Mitch McConnell and the rest of the GOP’s congressional leadership. While Trump backed Moore’s primary challenger at McConnell’s behest, he jumped in with a full-throated endorsement of Moore a week before the election in an attempt to put him over the top.

All that unraveled on Tuesday night. While Jones is unlikely to be seated before the Senate votes on a massive tax-cut plan, the finger-pointing that began among Republicans regarding his election points to an underlying chasm in the party that may impair its ability going forward to fulfill the president’s agenda.

Trump, who once said he could shoot someone on Fifth Avenue and still win votes, found his limit with Moore — even in a state he won by 28 percentage points just one year ago. Combined with recent Republican losses in statewide elections in Virginia and New Jersey, Moore’s defeat blows a hole in Trump’s aura of political invincibility that will embolden Democrats as they prepare for the 2018 congressional elections.

The result was also a loss for McConnell and congressional Republicans because it trims their Senate advantage to 51-49 as they enter some tough negotiations on spending with Democrats next year. But it also may bring some measure of relief to GOP lawmakers running for re-election who feared the sexual misconduct claims against Moore would taint the party for years to come.

The outcome isn’t likely to quell the fight with Bannon’s insurgency.

Minutes after the race was called, Andy Surabian, a Bannon ally who is senior adviser to the pro-Trump Great American Alliance, laid the blame at the feet of the Senate’s top leader.

“Mitch McConnell and the Republican establishment got their wish: they successfully delivered Alabama to a liberal Democrat,” Surabian said.

On Wednesday, Representative Pete King, a Republican from New York, said the election result underscores the failure of Bannon’s strategy. “After Alabama disaster GOP must do right thing and DUMP Steve Bannon,” he tweeted. “His act is tired, inane and morally vacuous. If we are to Make America Great Again for all Americans, Bannon must go! And go NOW!!”

Republican Carlos Curbelo of Florida taunted Bannon for backing “disgusting Roy Moore.”

Doug Jones celebrate at an election night party in Birmingham, Alabama, U.S., on Dec. 12.

Photographer: Nicole Craine/Bloomberg

“Congratulations to the Bannon wing of the @GOP for gifting a seat to @SenateDems in one of the reddest states,” Curbelo wrote on Twitter. “You have no future in our country’s politics.”

It was Trump who sounded a gracious note at the end of the night, congratulating Jones on Twitter “on a hard fought victory” and saying Republicans will have another shot at the seat in a short time — Jones will face re-election in 2020.

On Wednesday morning, Trump changed his tune and said he knew all along that Moore couldn’t win because “the deck was stacked.” “The reason I originally endorsed Luther Strange (and his numbers went up mightily), is that I said Roy Moore will not be able to win the General Election,” Trump said on Twitter Wednesday morning. “I was right! Roy worked hard but the deck was stacked against him!”

Jones, a former federal prosecutor, prevailed in a solidly Republican state by running a low-key local campaign while Moore was consumed by a national furor following allegations he had molested teenage girls while in his thirties.

With Moore out of the picture, Republicans may have dodged a bullet. They now won’t have to answer uncomfortable questions about why they tolerate a colleague accused of initiating a sexual encounter with a 14-year-old girl and assaulting a 16-year-old. McConnell had promised an ethics investigation of Moore if he won. That might have led to a contentious vote on expulsion, which in turn would have kept alive uncomfortable questions about Trump’s own conduct. More than a dozen women have accused the president of sexual harassment or other misconduct over the years.

McConnell’s allies were so worried about Moore that they spent millions trying to defeat him in the primary. Now the majority leader can point to Moore’s defeat as another in a string of disastrous candidates pushed by the party’s right wing that have cost the GOP Senate seats in Delaware, Indiana and Missouri.

“Any illusion that Steve Bannon’s brand of politics could be successful vanished when a state like Alabama became competitive,” said Josh Holmes, former campaign manager and chief of staff for McConnell. “You’d have to be absolutely blind and willfully ignorant to not realize this has been a national embarrassment.”

Even without the sexual misconduct claims, Moore was a polarizing figure. He was twice ousted from the Alabama Supreme Court for refusing to follow federal court orders, argued in 2006 against allowing Representative Keith Ellison of Minnesota to serve because he is Muslim, and backed impeaching Supreme Court justices who voted to legalize same-sex marriage.

Bannon has pledged to run insurgents against every GOP incumbent except Ted Cruz of Texas. Now he’ll have a much harder time carrying that strategy into November’s congressional elections.

Dealing with Moore would have been a daily challenge for a Republican Party already struggling to unite behind its agenda. Moore said he was running so God could save the country, and he vilified McConnell and other leaders as establishment sellouts.

He favored bans on homosexual conduct and gays serving in the military. He had said he believed former President Barack Obama wasn’t born in the U.S., and recently was quoted as saying at a rally that the U.S. was great before the Civil War “even though we had slavery” because, he said, families stuck together and the country had a direction.

$100 Check

Some Republican senators engaged in public debates over just how much to oppose Moore. Senator Jeff Flake tweeted a photo of a $100 check he sent to Jones, while Nebraska’s Ben Sasse tweeted that both Flake, in backing Jones, and the Republican National Committee, which renewed its financial support for Moore, had gotten it wrong. Strikingly, Republican Richard Shelby, Alabama’s senior senator, said he didn’t vote for Moore and instead wrote in the name of a “distinguished Republican.”

The outcome adds urgency to Republican efforts to send a massive tax-cut bill to Trump’s desk before Jones can be seated — by Jan. 3 at the latest — and it greatly complicates Trump’s plan to attempt a broader repeal of the Affordable Care Act next year.

The one-seat gain gives Democrats a slightly better shot in 2018 at winning the Senate majority, which they could use to control the agenda, investigate the president and block nominees, from the Supreme Court on down.

On Wednesday, Democratic Senator Chris Van Hollen, of Maryland, told MSNBC that McConnell should hold the tax bill until Jones is sworn in so that Alabamans can have their voices heard. Van Hollen said that, while that was unlikely, he sees a national trend in which voters are signaling that “they don’t like Trumpism and they want to go in a different direction.”

A Democratic majority is still a long shot. The election map strongly favors the GOP, with 10 Democrats up for re-election in states won by Trump and just one Republican incumbent — Dean Heller of Nevada — running in a state won by Democrat Hillary Clinton.

To take the majority, Democrats would likely need to re-elect their incumbents, defeat Heller and pick up an open seat in Arizona or Tennessee — or, in perhaps the dream Democratic scenario, topple Cruz in Texas.

Read more: http://www.bloomberg.com/

An Anti-Trump Hotel for Liberals – Trending Stuff

The first thing you’ll see when you walk into Eaton Workshop, a hotel opening in late spring 2018 in Washington, is a custom-commissioned video art installation by AJ Schnack, shown on a series of vintage-style television screens. All day long, it’ll broadcast a montage of footage from the presidential elections of 2012 and 2016 that’s built around one pointed question: How did our country get where it is today?

It’s not a subtle statement, and it’s not meant to be.

In Trump’s Washington, Eaton is planting a clear flag as a haven for Democrats. It’s the world’s first politically motivated hotel, the flagship for a global brand that’s built around social activism and community engagement. And it comes with a pedigree: As the daughter of Ka Shui Lo, the creator and executive chairman of Hong Kong-based Langham Hospitality Group Ltd., founder Katherine Lo knows a thing or two about luxury hotels and world-class service.

The Big Idea

An artist’s rendering of the reception desk of the Eaton.

Source: Gachot Studios

Lo firmly believes that hotels ought to be catalysts for good. In a world where we can be conscious consumers—of everything from clothing to food to baby products—she argues there’s a place for conscious hotels, too. This isn’t a revolutionary idea: Already, 1 Hotels has built a small collection of luxury properties entirely around the idea of sustainability, and Shangri-La Hotels & Resorts has made a significant, brand-wide commitment to bolster community programming for disadvantaged children in all of its destinations. It’s one of many five-star brands that have a conscious ethos but choose not to flaunt it.

Eaton Workshop is different. With a premise that’s built around liberal activism and civic engagement, the brand will weave a liberal philosophy into every aspect of the guest experience, some more obvious than others.

Among the subtler points is the significance of the company’s name: a nod to the high-end shopping mall of that name in Montreal that captured the fascination of Ka Shui Lo when he fled the Cultural Revolution in China. The mall, says Katherine, was a beacon of freedom to her father—and when she found an archival photo bearing its old motto, “Progress and better living,” the two Eatons became forever intertwined.

The Washington hotel—which has 209 rooms just north of the National Mall—will be the brand’s flagship, with a second location opening in Hong Kong in 2018 and new constructions set to rise in San Francisco and Seattle no sooner than 2019.

A Hotel With an Agenda

The lobby of the Eaton.

Source: Gachot Studios

Among the Washington location’s programming signatures will be a sort of TED talk series driven by the liberal agenda, consisting of fireside chats and rooftop lectures that Lo hopes will be free, open to the public, and streamable as Eaton-branded podcasts. Then comes the art program, which—aside from the political statement piece at check-in—will include commissions from at least a half-dozen up-and-coming local artists and a street-facing exhibition window curated in partnership with local museums and institutions. A co-working space will prioritize memberships for progressive startups, activists, and artists, while a wellness program will offer “inner-health-focused treatments” such as Reiki and sound baths, rather than facials and massages. (Some of these features will roll out a few months after the hotel opens.)

Just as important, partners and staff will be brought on board, both for their skills in the food and beverage worlds and their activist track records. For instance, Lo saw the cocktail director of the famed Columbia Room, Derek Brown, as a perfect fit to be the hotel’s beverage director—not just because he’s won such awards as magazine’s Bartender of the Year but because he “cares deeply about social justice.” To wit, Brown actively champions policies that fight sexual harassment in the bartending industry and acts as chief spirit advisor for the National Archives.  

Similarly, Lo says that the “amazing life story” of house chef Tim Ma “perfectly expresses our brand ethos.” The Chinese-American culinary up-and-comer was an engineer at the National Security Agency for years before discovering his true passion in food. At Eaton’s to-be-named restaurant, Ma is planning a menu with a heavy focus on vegetables from an on-site garden.

A guest who does nothing other than check in, sleep atop Eaton’s organic mattresses, and check out will still have a sense of the hotel’s mission, says Lo. “We plan to have new ideas in the minibar—an activist toolkit, for example, that includes sheets with information to help you call your congresspeople. And if we’d been open during this year’s Women’s March, I could have seen us putting poster boards and markers in the rooms!”

Political statements such as these will be tailored to each property. In Hong Kong, for instance, Lo says she’d like to replace Bibles in the nightstand drawers with copies of the United Nations Declaration for Human Rights.

A Place for Thought Leaders (but Not All of Them)

The library at the Eaton

Source: Gachot Studios

Lo understands that Eaton Workshop isn’t for everyone. “Self-selection is definitely one of our strategies,” she says about branding and marketing materials that directly appeal to the “woke” crowd. “We wanted to emphasize that it’s a place for people who are thinking outside the box and want to effect a change in the world,” she says.

Though she repeatedly talks about fostering a culture of diversity and inclusion, Lo also tells Bloomberg that “the goal isn’t to bring together left and right.” Instead, she wants to create “a diversity of fields and backgrounds as well as gender and ethnicity.” In other words, her hotel should represent the antithesis of the Trump hotel that’s just a few blocks away, offering an intellectual playground to those who may feel marginalized by the current administration’s agenda.

This is partisan politics playing out on the city’s hotel scene; whether that will hurt or help Lo’s bottom line remains to be seen. But if the Trump Hotel is any indication, Lo may be poised for big success. According to the , the president’s hotel brought in $1.97 million in profits during the first four months of the year, despite business projections that had forecast a loss of $2.1 million.

“It’s Like a Non-Profit but Better”

Though her goal is to create a successful, scalable business, Eaton Workshop is not built to pad Lo’s pockets. On the contrary, she sees the entire enterprise as a means to a philanthropic end, and hopes to use the hotel profits to fund community arts initiatives in the brand’s respective destinations. 

Each location will have a radio station, cinema, and music venue so local talent can produce or showcase work in a state-of-the-art space at low—or no—cost. In Washington, the building’s history as a printing venue has inspired Lo to create a writer’s residency, where investigative reporters can be hosted on site for several months while pursuing important stories.

Artists will be invited to create short films, podcasts, or other types of content under the emblem of Eaton’s in-house multimedia studio; the results will be available for guests to stream on personal devices, and each piece will feature a clear activist message and a call to action.

“We’re hoping that our hotel revenues will propel our creative projects,” says Lo, who likens the hotel to “a non-profit, but better.” Still, room rates won’t be extravagant; prices in Washington are likely to hover in the upper $200s. Thankfully, for members of both political parties—who are, no doubt, tired of dropping Benjamins for vodka drinks at the Trump International—the price of a martini should be less radical.

Read more: http://www.bloomberg.com/

California Bill in the Works to Banish Gasoline Cars by 2040 – Trending Stuff

A California lawmaker wants to put the state alongside China, France and the U.K. and have its legislature consider a ban on vehicles powered by fossil fuels.

California Assemblymember Phil Ting, a Democrat who is chairman of the chamber’s budget committee, said he plans to introduce a bill that, starting in 2040, would allow the state’s motor vehicles department to register only “clean” vehicles that emit no carbon dioxide, such as battery-electric or hydrogen fuel-cell cars.

“Until you set a deadline, nothing gets done,” Ting, who represents much of San Francisco, said in a phone interview Tuesday. “It’s responsible for us to set a deadline 23 years in advance.”

Ting said he’ll introduce the bill when lawmakers return to Sacramento next month for the upcoming legislative session. If adopted, it would eliminate a huge chunk of carbon emissions from the transportation sector — now the top source of the greenhouse gas in the U.S. — as part of the state’s quest to slash emissions by 80 percent from 1990 levels by 2050.

Ting isn’t the first official from the state with the largest market for new vehicle sales in the U.S. to openly consider a ban on internal-combustion engines. The topic has been discussed at the California Air Resources Board, the state’s powerful air quality regulator, after Governor Jerry Brown showed interest in similar moves by other countries, including China.

“I’ve gotten messages from the governor asking, ‘Why haven’t we done something already?’” CARB Chairman Mary Nichols said in September, referring to China’s planned phase-out of fossil-fuel vehicle sales. “The governor has certainly indicated an interest in why China can do this and not California.”

Read more: http://www.bloomberg.com/

North Korea Warns That Nuclear War Could Break Out Any Moment – Trending Stuff

North Korea warned that a nuclear war “may break out any moment” as the U.S. and South Korea began one of the largest joint naval drills off both the east and west coasts of the peninsula.

Kim In Ryong, North Korea’s deputy ambassador to the United Nations, said on Monday that his nation had become a “full-fledged nuclear power which possesses the delivery means of various ranges” and warned that “the entire U.S. mainland is within our firing range.” He also called North Korea “a responsible nuclear state.”

“As long as one does not take part in the U.S. military actions against the DPRK, we have no intention to use or threaten to use nuclear weapons against any other country,” Kim said, referring to his country’s formal name.

The comments are similar to other warnings North Korea has made over the past few months as tensions have increased with President Donald Trump’s administration. Kim Jong Un’s regime has repeatedly said it needs the capability to strike the U.S. with a nuclear weapon in order to deter an American attack.

“They just bluff to the extreme because they think that if enough people worry about what they’re saying, that would deter U.S.-South Korean action,” Bruce Bennett, senior defense analyst at Rand Corp., said in a Bloomberg TV interview. “The problem is North Korea is used to using very extreme words to deter by bluff and by bluster, and now they’re shocked that the Americans are using a similar approach.”

Read here for more about North Korea’s nuclear ambitions

Trump has said military force is an option to stop Kim and has ruled out talks with Pyongyang. Secretary of State Rex Tillerson said Sunday the president wants him to push forward on diplomacy with North Korea “until the first bomb drops.”

A war of words has escalated between the two leaders in recent weeks, with Trump labeling Kim “Rocket Man” and telling the UN that the U.S. would “totally destroy” North Korea if it attacks. Kim responded by calling Trump a “dotard” and warning of the “highest level of hard-line countermeasure in history.”

South Korean military officials are preparing for another possible missile launch from North Korea this week to counter the U.S.-South Korea drills, which include an American aircraft carrier and a nuclear submarine. China’s Communist Party will also start its most important political meeting in five years on Wednesday.

A North Korean official said an intercontinental ballistic missile test could coincide with Trump’s visit to Asia next month, CNN reported, without identifying the person. The official added that two more steps are needed for Pyongyang to achieve its goal of having reliable ICBMs: an above-ground nuclear detonation and the “testing of a long-range ICBM capable of reaching Guam — and even further.”

‘Coming Disaster’

Russia on Monday urged the U.S. to reduce military drills near North Korea, reiterating a proposal for both sides to step back and calm tensions.

“I don’t remember a situation when the feeling of a coming disaster is so clear,” Tass cited Russian Ambassador to North Korea Alexander Matsegora as saying.

Russia’s Interfax newswire reported on Monday that a meeting is possible this week between Joseph Yun, the U.S. representative for North Korea, and Choe Son Hui, head of the North American department at North Korea’s foreign ministry. Both are attending a non-proliferation conference in Moscow this week, it said.

The UN has tightened sanctions on North Korea this year in a bid to cut off cash flows that help support its nuclear program. Kim’s regime also generates billions of dollars a year dealing drugs, selling weapons, counterfeiting currencies and exploiting guest workers, according to the International Network for the Human Rights of North Korean Overseas Labor.

Lazarus, a hacking group linked to North Korea, may have been behind this month’s theft of $60 million from Taiwan’s Far Eastern International Bank, BAE Systems Plc researchers said on Monday. While the bank said most of the money was recovered, it’s the latest case in which Swift — the interbank messaging system used for money transfers — was used to facilitate the theft of funds from a banking institution.

Read more: http://www.bloomberg.com/

Papadopoulos Claimed Trump Campaign Approved Russia Meeting – Trending Stuff

Former Trump adviser George Papadopoulos made a significant claim in an email: Top Trump campaign officials agreed to a pre-election meeting with representatives of Russian President Vladimir Putin.

The message, if true, would bolster claims that Trump’s campaign attempted to collude with Russian interests. But it’s unclear whether Papadopoulos, who pleaded guilty to lying to the Federal Bureau of Investigation, was merely boasting when he sent the July 14, 2016, email to a Kremlin-linked contact. There’s also no indication such a meeting ever occurred.

George Papadopoulos, third from the left, seen in this Instagram post by Trump.

The email is cited in an FBI agent’s affidavit supporting criminal charges against Papadopoulos, a young foreign policy volunteer on Trump’s campaign. But it’s not included in court documents that detailed his secret guilty plea and his cooperation with Special Counsel Robert Mueller.

Mueller Probe

The evidence gleaned during Papadopoulos’s three months of cooperation could further advance Mueller’s investigation into possible collusion by Trump’s aides. This latest email, one of many unsealed on Monday, runs counter to the steadfast denials by Trump and his supporters that anyone attempted to work with the Russians. Trump tweeted on Tuesday that Papadopoulos, a low-level adviser that few people on the campaign knew, “has already proven to be a liar.”

Prosecutors didn’t explain why the email wasn’t included in the detailed admissions of Papadopoulos’s wrongdoing, and it’s possible they concluded the assertions weren’t true.

Writing to the Russian contact a week before the Republican National Convention, Papadopoulos proposed a meeting for August or September in the U.K. that would include “my national chairman and maybe one other foreign policy adviser” and members of Putin’s office and Russia’s foreign ministry.

“It has been approved by our side,” Papadopoulos wrote. 

Campaign Officials

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Investigators don’t identify campaign officials by name in the emails. Paul Manafort was the campaign chairman at the time, having taken over from Corey Lewandowski. Sam Clovis was the campaign’s national co-chairman.

Manafort and his associate Rick Gates were charged with conspiracy, money laundering and false statements about their political work on behalf of Ukrainians in an indictment that was also unsealed on Monday. Both men pleaded not guilty.

Your Guide to Understanding the Trump-Russia Saga: QuickTake Q&A

Jason Maloni, a spokesman for Manafort, said that his client had rebuffed overtures to meet with Russians, and noted an email from May in which Manafort shot down a different attempt to have Trump meet with Putin or his representatives.

“Mr. Manafort’s swift action reflects the attitude of the campaign — any invitation by Russia, directly or indirectly, would be rejected outright,” Maloni said in a written statement. “His request that the response come from a low-level staffer sent a clear signal that the invitation did not merit consideration. This is concrete evidence the Russia collusion narrative is fake news.”

Campaign Rules

Clovis, in a statement, said Papadopoulos was acting on his own and that the campaign had a strict rule against traveling abroad and claiming to speak on behalf of the campaign.

Still, Clovis supervised Papadopoulos and was questioned last week by Mueller’s team and testified before a grand jury, NBC reported, citing a person with knowledge of the matter. Whether he corroborated Papadopoulos’s version of events is unknown. Embraced by the campaign with his connection to the important primary state of Iowa, Clovis is now working in the Department of Agriculture while awaiting approval by Congress to become the agency’s chief scientist. NBC said his lawyer declined to comment on its inquiries about his testimony.

Asked whether the indictments this week and Clovis’s role in the Trump campaign could delay his confirmation proceedings, Senate Agriculture Committee Chairman Pat Roberts said, “to be determined.”

Volunteer Adviser

Papadopoulos was one of five volunteer advisers on foreign policy identified by Trump in a March 2016 interview. Over the next several months, according to court documents, he cultivated at least three contacts who promised “dirt” on Trump’s Democratic rival, Hillary Clinton, and introductions to top-level Russians. He kept some people in the campaign apprised of his efforts by email.

The communications, by Skype, Facebook, text and email, show the electronic trail the government is following to verify how the campaign handled Russian contacts.

One of those people, identified in court documents as Foreign Contact 2, is Ivan Timofeev, Russian foreign ministry spokeswoman Maria Zakharova said Tuesday. He works for the Moscow-based Russian International Affairs Council, a Kremlin-linked research group, and isn’t a foreign ministry employee, despite Papadopoulos’s assertion, she said.

Timofeev declined to comment by email but posted on his group’s site that he believed Papadopoulos was working on his own initiative. “Apparently, he was an enthusiast with little experience,” he said.

In a private Facebook message to Timofeev during the Republican National Convention, Papadopoulos wrote, “Keep an eye on the speech tonight. Should be good.”

Read more: http://www.bloomberg.com/