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WSJ Devaluation Hurts Argentina's Regional Standing

           The Wall Street Journal reports,"following Argentina's humbling currency devaluation, the country is suffering another economic embarrassment: Colombia has likely overtaken it as Latin America's third-largest economy''.
''Capital Economics, a London-based research company, estimates Argentina's annual economic output at $343 billion for 2013 using Argentina's new exchange rate of about 8 pesos to the dollar. Colombia's economy in 2013 stood at $350 billion for 2013, according to the company.

"This is symptomatic of a broader trend that is seeing Argentina's economic model unravel while Colombia's economy has been well managed," said Neil Shearing, chief emerging-market economist at Capital Economics''.

Colombian officials, who have also touted their own estimates showing that Colombia has overtaken Argentina, have recently poked fun at their southern rival.

"It's like making it to an Olympic podium, and the truth is, in a competition no one remembers who came in fourth place," Colombian Finance Minister Mauricio Cárdenas said in an interview.

This is a new gloating opportunity for Colombia, whose reputation until a few years ago was sullied by cocaine cartels, widespread kidnappings and a civil war. It also underscores the chronic woes of Argentina, a country that at the start of the last century was one of the world's richest.

Colombia says the ranking—which follows the far larger economies of Brazil and Mexico—is about more than boasting rights. "Having the third spot is of strategic importance because it attracts companies and is great for the image of Colombia," Mr. Cárdenas said. "Our country should be proud to be the third-largest economy in Latin America."

"Many economists say that Argentina's currency controls, costly energy and transportation subsidies, high inflation and unpredictable government policies have weakened the economy. Amid the turmoil in emerging markets, Colombia has touted its disciplined spending and low inflation. Colombia's central-bank reserves were $43.7 billion at January's end, the latest available figure, compared with Argentina's $28.1 billion".

"Currency rates fluctuate all the time. The really meaningful thing is that for several years now Colombia has embarked on a steady path to development by respecting private-property rights and setting clear policies," said Juan José Cruces, an economist and dean of the business school at Universidad Torcuato Di Tella in Buenos Aires.

Colombian officials had claimed for the past two years that their country had overtaken Argentina. But in making their case, they were using the value of Argentina's peso currency on the black market, where it trades at a significant discount to the country's official exchange rate. Argentines brushed off the comparison as unfair.

But now Argentina's economy appears to be smaller than that of Colombia using Argentina's official, regulated exchange rate—particularly after the peso slid about 19% in January alone. Since then, the peso has strengthened slightly.

Few economists think that the peso is likely to appreciate against the dollar this year given the country's estimated inflation rate of more than 25% a year. Further, many economists expect Argentina to enter a recession this year, while Colombia's economy is forecast to grow roughly 5%.

"New economic research also adds to Colombia's claim to the third spot, suggesting that President Cristina Kirchner's government has overstated the country's high growth rates.

Argentina's GDP is at least 12% smaller than the official size reported by the government, according to a study by economists at the University of Buenos Aires", whose work has been guided in part by an economist at Harvard University, Dale Jorgenson. Mr. Jorgenson says the research reflects "the international standards which the Argentine government stopped applying to its indicators."

"'Their findings, to be published next month in the journal World Economics, say that Argentina grew by only half of the 30% that Buenos Aires says it did from 2007 to 2012. The report says that instead of helping lead Latin American growth over the past 15 years, Argentina has trailed its neighbors since 1998''.

"It's a myth that economy has grown at Chinese-like rates over the past decade," said Ariel Coremberg, a University of Buenos Aires professor who led the research. Before doing the research, Mr. Coremberg measured Argentina's economic growth for the government until 2007. "The economy has grown, but not by anywhere near as much as the government has reported."

Mrs. Kirchner's government unveiled a new inflation index this month that economists said was far more credible than the index it produced since 2007 that led to inflated GDP estimates.

Latin America: On Stronger Footing

"If you wanted to pinpoint the moment when things got particularly bad for Latin America, August 1982 wouldn’t be a bad choice. The emergency warning that month that Mexico was on the verge of default was the first in a decade-long series of regional debt crises. It’s a rare Latin American nation that wasn’t forced to grapple with out-of-control inflation, a stagnant economy, plummeting wages or high unemployment during the so-called “Lost Decade.” And even though 30 years have passed since the unofficial start of the bad times, the misfortunes of the era still loom large in our collective memory''
. There’s no question that the area earned its reputation as the international economy’s problem child, but, according to a February 3 report from the Credit Suisse Research Institute entitled “Latin America: The Long Road,” the region has been advancing over the past two decades and is poised to extend its gains. Poverty has declined, inflation has slowed and political stability has improved. Not only is Latin America no longer a trigger of global disorder, it has proved resilient to financial crises generated elsewhere, including the Great Recession. That’s certainly a break from the region’s volatile past, when disturbances in the world economy routinely had a very negative impact on its domestic economies. “The last 20 years have been a crucial period as they represent the most radical change in the political, macro and social structures of Latin America in the last two centuries,” says the report.
Since the early 1990s, many Latin American countries, have been modernizing their economies by strengthening their service and manufacturing sectors, approving key structural reforms and boosting long-term investment. Latin America now exports a higher proportion of its goods to Asian economies, resulting in a more diversified roster of trading partners, inflation has come under control, and political regimes in many countries have become more democratic.
 The upshot? Now that an extended global commodity boom is waning, the region isn’t at risk like it was the last time that happened, in the 1980s. Even though the collective current account balance recently hit deficit territory, several other indicators suggest that Latin America is well positioned to absorb external shocks. The region boasts an external debt-to-exports ratio of around 100 percent, which is half its level in 1980 and similar to other emerging markets. The external debt-to-GDP ratio of 24.5 percent is only 4 percent above its 30-year low, total reserves excluding gold were at a near-record high of 60 percent of external debt at the end of 2012, and the capital-to-assets ratio of the region’s banks was 10.3 percent in 2012, compared with an OECD average of 7.4 percent.

That spells opportunity for investors, in our view, especially those in the consumer goods, financial services and energy sectors. Growth in the region has fueled a burgeoning middle class, which grew by 50 percent between 2003 and 2009, from 103 to 152 million people. Credit Suisse expects that upward social mobility to persist, giving consumers more purchasing power and prompting them to buy more sophisticated—and therefore more valuable—goods and services. Greater Internet coverage is fueling more opportunities for e-commerce, and an expanding economy amid slow inflation should bring throngs of new customers to the financial services industry. To top it off, recent legislation to end Mexico’s state oil monopoly, along with plans by Brazilian energy company Petrobras to double production by 2020, should fuel growth in the energy sector.

Still, the regional economy isn’t without its weaknesses. Per capita GDP remains inferior to that of the developed world, the level of technological innovation is low, and doing business in many countries can still be a red tape-filled bureaucratic jungle. And consider Latin America’s total investment in infrastructure—just 2.1 percent of GDP between 2003 and 2012, roughly half of the minimum necessary to sustain economic growth of 4.5 percent, according to the United Nations Economic Commission for Latin America. (Compare that to China, which invested around 13 percent of its GDP, or even India, which came in at 5 percent.) Two of the region’s largest countries, Mexico and Brazil, have recently announced plans to woo private investors to build roads, ports, bridges and airports, but whether they will succeed remains to be seen.

Latin America is not a monolith, of course, and there are vast disparities among its economies. Chile, Peru and Panama, for example, score in the top ranges of Credit Suisse’s adaptation of the so-called misery index, which factors in economic growth, the inflation rate and the unemployment rate. Argentina and Venezuela are in the bottom 30 percent. And even as Brazil’s middle class grew to 50 percent of the population from 39 percent between 2002 and 2009, Mexico, the region’s second largest economy, only saw an increase of 35 to 39 percent between 2002 and 2011.

For a long time, it seemed that economic news out of Latin America was always bad—the only question was how bad it was going to be. For the time being, those days are over, and the region is more likely to be garnering praise rather than prompting lectures from the rest of the world. “By any reference to its own history, Latin America’s performance during and after the Great Crisis has been remarkable,” says former Mexican President Ernesto Zedillo in an introduction to the report. “However, it would be a terrible mistake for Latin American governments and societies to be complacent about the challenges in front of them.”

Source: The Financialist     by Credit Suisse

A Dire Economy Causes Unrest in Venezuela

It’s been a tragic two weeks in Venezuela. Six people have died at protests and a prominent opposition leader was arrested after student marches escalated into large opposition-led demonstrations. Fierce mudslinging between President Nicolas Maduro and his opponents, the killing of a local beauty queen at a protest on Wednesday and the expulsion of three American diplomats have made for dramatic headlines and prompted international media outlets to question whether the president’s days in power might be numbered.

While alarming, the recent events in the South American country aren’t exactly new. Under former President Hugo Chavez, who died from cancer nearly a year ago, opposition rants against the government were met with daily government diatribes charging its critics of being coup plotters backed by Yankee imperialists. Then as now, students and opposition protesters demanding more security and freedom of speech were met with tear gas and water cannons, American diplomats were routinely chastised, and protesters died on the streets—such as the 19 people killed during an opposition march just before a 2002 coup against Chavez.

Still, concern is growing that the situation may become prolonged and increasingly disruptive. Local blogs and social media—which have become a vital source of information as local television is providing little live coverage of the protests—contain reports of increasingly violent clashes between protesters and national guard troops. Demonstrations are also expanding from Caracas to encompass a greater swath of territory. Clashes in cities such as Barquismeto, Merida, San Cristobal and Valencia may make it more difficult for the government to control its use of force against protesters. “We expect the situation to remain very fluid with continued potential for violent confrontations over the weekend,” Credit Suisse analyst Casey Reckman said.

There’s one clear distinction between the Chavez era and now: the state of the economy. Currency controls and price regulations made doing business a contorted art under Chavez, but it didn’t matter much while he had an oil price boom as a tailwind. But today, those economic restrictions have been in place long enough to take a heavy toll. Inflation is out of control, stores can’t stock basic products and businesses can’t find dollars. What’s more, these ominous economic conditions, which are fueling the current protests, are expected to worsen.

How did the economy get so dire? Let’s begin with consumer prices, which accelerated an astonishing 56 percent in January over the previous year. Government intervention in the economy and chronic underinvestment have created an increasing need for imports, which add to inflation when they’re more expensive than locally produced goods. The central bank has also been printing money to help cover a large consolidated public sector deficit. That practice mostly takes the form of local currency-denominated cash advances to help PDVSA fund non-oil activities it executes on behalf of the central government. This has injected excess liquidity into the economy, putting additional upward pressure on consumer prices, and also increased the state oil company’s debt with the bank to $35 billion at the end of 2013.

The government has tried to shield some segments of the population from the inflationary pressures. Public sector workers have received sizeable wage increases, and lower-income Venezuelans can shop at subsidized supermarkets. But it’s unlikely that the world’s ninth-largest oil producer can forever use crude revenues to shield these groups from the effects of high inflation, according to Reckman. That’s especially true given the country’s decrease in oil production. Even though oil accounts for around 45 percent of the federal budget, PDVSA’s investments in new exploration and production have been insufficient to offset falling output at mature fields. According to PDVSA, crude production fell to 2.9 million barrels a day in 2012 from 3.2 million barrels a day in 2008. Other sources estimate current production to be lower.  “That’s the essential question: how compromised is their cash flow already?” Reckman said.

The country currently operates under a dual exchange rate, which values the dollar at 6.3 bolivars for essential goods such as food and medicine and 11.3 bolivars for areas such as tourism and oil investments. The system has so far failed at its intended goal of cracking down on a growing black market for currency, which pays upwards of 90 bolivars per dollar.

 Price controls have exacerbated shortages of a wide variety of goods such as toilet paper, corn flour and fish. Some local newspapers even cut sections in their print editions or shut completely because they couldn’t find paper to print on.

Credit Suisse recently lowered its 2014 economic growth forecast to 1.2 percent from 2.7 percent, and projects that government and PDVSA debt will reach 41.9 percent of GDP this year, up from 39.8 percent in 2013. In December, both Moody’s Investors Service and Standard & Poor’s lowered Venezuela’s credit ratings after Maduro forced retailers to lower prices.

Officials have said they expect to launch yet another foreign exchange system next week. That mechanism is expected to allow the private sector to directly trade dollars and dollar-denominated bonds by way of brokers, and would likely draw on a weaker exchange rate than the two currently being used. Reckman says the new system is likely to be a “favorable development” that has the potential to increase foreign exchange flows to the private sector. “This could help reduce goods shortages, support growth and relieve pressure on the parallel exchange rate,” she says.

 It remains to be seen  whether the worsening economy and the opposition demonstrations it’s helping to fuel, could erode support for the Maduro government. On one hand, the splintered and uncoordinated opposition is actually giving chavistas a reason to band together after their deflating near-loss in last year’s presidential elections

Source: The Financialist,  by Credit Suisse

Pimco's Gross leaves Allianz with a dilemma

Pimco's Bill Gross presents Allianz with a dilemma. The world's largest bond manager, owned by the German insurance giant, faces a sharp decline in profit this year. Gross, Pimco's legendary founder, has a strong record to fall back on. But his German masters, who bought control of Pimco in 2000, can't ignore the question of replacing him.

The U.S. fund manager had a hard time in the second half of 2013 and this year could be still more difficult. Third-party assets under management shrank by a hefty 10 percent to 1.1 trillion euros in 2013. While three-quarters of the drop stemmed from currency swings and rising bond yields, some clients fell out of love too: net outflows accounted for about 20 billion euros. Allianz expects operating profit in asset management to drop by 8 to 21 percent this year.

Meanwhile, Mohamed El-Erian, Pimco's chief executive and co-chief investment officer, quit abruptly in January. According to a Wall Street Journal report this week, tougher times for the business coincided with worsening clashes between the larger-than-life Gross and his long-time foil, the sober El-Erian.

Allianz made the best of the situation by naming El-Erian its chief economic adviser, and the parent is supporting a re-shuffle at the top of Pimco. Rather than sharing power with a new co-CIO, the 69 year-old Gross now has six deputies. Yet this smacks of a stopgap approach. The risk is that the large squad in the second tier may actually intensify rather than dilute Gross' grip on power, at a time when both his performance and his style arguably need monitoring.

Gross doesn't seem to be ready to leave soon. After El-Erian resigned, he tweeted: "I'm ready to go for another 40 years!" And despite the swirl of gossip kicked up by the Journal, Allianz's steady hand may be justified for the time being. Gross deserves the benefit of the doubt given his record. And the Germans stress that succession plans for the top people at Pimco are in place. All the same, they should probably get out to California more often. Allianz cannot afford to wait until Gross's 109th birthday to decide who will take over.

Source:  Reuters

RMB's decline squeezes speculative capital

The Chinese yuan has depreciated to its lowest level in six months. Despite some worries, China’s foreign exchange regulators said Wednesday the fall could help China fight speculative capital known as hot money.

The yuan dollar rate has slipped nearly 1.6 percent since a mid-January high of 6.04. While there are worries about whether this reflects China’s economic fundamentals, the State Administration of Foreign Exchange says the decline has a positive effect - beating hot money.

The yuan had been appreciating for more than a year before the depreciation began. China’s trade surplus expanded to 29 billion U.S. dollars in January while its foreign exchange settlement surplus hit 73 billion U.S. dollar. Both show increasing capital inflows from overseas.

With the depreciation of the yuan, though, speculative capital is losing out.

"If we allow the exchange rate to be volatile, the space for non-risk arbitrage could be narrowed down. It will reduce the attraction to hot money, and even depress the inflow of hot money." Zhao Qingming, Chief Macro-Economy Researcher, Institution of Financial Derivatives of China said.

The forex regulator says the two-way swings in the yuan’s value will be normal in the future. The administration suggested that investors should adapt to the change.

Source:  CCTV

Sunny times for Chinese solar panel makers

Demand for solar panels is on the rise in China and Japan. Sales have started to shine again during the past six months after two years of stormy weather. Many solar panel makers have responded to the bright news by expanding their production capacity.

China's solar power industry is starting to beam again. Overcapacity and trade disputes with the U.S. and the European Union had created a cloud over the sector and caused more than two years of poor business. But sales are brightening thanks to increased domestic demand and exports.

"Since the second half of last year, solar panels are selling very fast or even in short supply. That's because the anti-dumping case with the EU has been finalized and resolved. The Chinese government also has announced plans to build solar power generation sites with 14 gigawatts of capacity this year," said Peter Li at Zhejiang Astronergy.

Building solar power sites brought Zhejiang Astronergy 2.5 billion yuan revenue in 2013, 75 percent better than the year before. On the other hand, the revenue from solar panels remained flat as the profit margin slumped. Some say the chance to grow relies on designing and building solar power sites.

"The cost to generate electricity from solar power is dropping. With some government subsidies, we can afford and develop solar power sites. We think such a fast rate of growth can remain two or three years," Li said.

Many solar panel firms were forced to close over the past two years, including the giant Suntech Power. The industry is by no means less crowed now but those companies that are still in the market are bigger in size, and stronger in technology. The competition remains fierce.

China's "baby boom": cradle of financial reform?

China's new "baby boom" is not of the demographic variety. New financial systems and products are being born everywhere, bringing trouble to some and great expectations for many.

The financial baby boom started when Jack Ma's online currency fund Yu'e Bao (Leftover Treasure) grew from almost nothing to a global leader, with 50 million investors stumping up 400 billion yuan (65 billion U.S. dollars) in just eight months.

The very simple recipe of a low investment threshold and high yield has catapulted Yu'e Bao and partner Tian Hong Asset Management from obscurity last June, to close to the top of the world today.

The miracle bred many envious copycats who began clawing at the market, scrapping for Internet investors, even going so far as to borrow auspicious characters in their names: "Bao" means both baby and treasure in Chinese.

Niu Wenxin, a highly regarded commentator with the national broadcaster CCTV, went so far as to call Yu'e Bao a "financial parasite" draining "blood" from banks, and the new financial "babies" are now in the sights of many wily old predators.

When Niu described funds like Yu'e Bao as another "central bank" with variable yields and huge capital, his hidebound attempt to nullify the new funds like Yu'e Bao got little support. Doubts and refutation flooded the Internet: What are these funds? Vampires or messiahs?

The creator of Yu'e Bao, Alipay, is angling for floatation on the New York Stock Exchange. The proud parent company posted a long statement online, defending their fat offspring and pouring sarcastic scorn over Niu. Alipay's counterstatement has been reposted and "liked" over 10,000 times.

"Niu knows nothing about finance or innovation," said a "financial analyst" with screen name "Yufenghui".

Yufenghui thinks Niu epitomizes the old guard of monopoly finance, and it is quite clear that statements from former bank bosses say more about banks' defensive situation than the vigorous new babies.

As Yufenghui points out, a former vice president of the central bank, a former deputy director of the banking regulator and former president of the largest state-owned bank all oppose Yu'e Bao and, indeed, any online financial products.

"Dongxingguilai" declared that Yu'e Bao did not deserve such pressure because it is "neither great or vile", but basically just a money fund with successful marketing.

Other netizens just mocked Niu for "boldly" comparing the central bank to a vampire.

In fact, traditional banking is simply chasing the market. Products like "Xian Jin Bao" (Cash Treasure) and "Li Cai Tong" (Finance Key) have been cobbled together by traditional banks, rendering Niu's "parasite" metaphor something of a shambles.

The key to the dispute lies in the decisive role of market, as stressed in China's current economic reform, in setting interest rates on deposits and loans. The days of easy money from huge interest margins will soon be gone for the commercial banks, as the new babies take their first tottering steps.

Source: Xinhua

Ule, Ecommerce Platform Venture Backed by China Post and TOM, Raises $110 Million Funding

Ule,an-ecommerce platform jointly established by state-backed China Post and TOM Group in 2010, reportedly secured $110 million of financing from unnamed investors at a valuation of $830 million (via Sina Tech).

After the investment, China Post’s stake in the joint venture reduced from 51% to 44.24%, but it is still the largest shareholder of Ule. TOM owns 42.51% stake in the company, down from 49% before the deal. The new investors will hold a combined 13.25% stake.

The website offers wide range of products including home goods, foods, infant and mother care, personal care, fashion and electronic goods etc. Ule has launched Youxnp, an e-commerce site for green agricultural products which target at high-end customers. It also has a dedicated channel for bulk purchase of government agencies and state-owned enterprises.

Different from other domestic e-commerce sites, which rely on third-party logistics services, Ule leverages the logistics resources of China Post, which has more than 50,000 post offices nationwide to provide offline delivery and sales services.

The strong logistic and warehouse capabilities of China Post and TOM Group’s technological support are the main reasons that attracting this capital injection, according to the company. The funding will be used to expand its mobile ecommerce business.

The transaction volume of Ule surged 175% YOY to 1.43 billion yuan ($231.93 million) by the end of 2013. Its repeat purchase rate reached 66% in the Q4 2013, while average price per order hit 448 yuan, higher than industry average, according to data released by the company.

Apple Made Over $1B On The Sale Of Around 10M Apple TV Units In 2013

Apple’s TV business still consists only of an over-the-top streaming media box, and not a proper TV set despite longstanding rumors that kind of hardware was on the way – but it’s showing impressive growth nonetheless. The company sold approximately 10 million Apple TV units last year, according to estimates based on figures Apple CEO Tim Cook offered up at the annual Apple shareholder meeting today.

Apple made over $1 billion in revenue from sales of its Apple TV devices and content in 2013, Cook explained during the meeting with investors, which translates to sales at or around 10 million units, as noted by Asymco’s Horace Dediu. With just over 5 million units sold in 2012, that makes Apple TV the company’s fastest growing hardware product category, according to the analyst, with around 80 percent year-over-year growth.

The growth of Apple TV could be ascribed to any number of factors; there wasn’t a major hardware revision last year for the streaming box, but Apple did add a wealth of new content sources through new partnerships with media companies. 2013 also saw a significant increase in Netflix subscribers, which could have helped its fortunes as that’s a key part of the Apple TV’s consumer appeal.

Apple still hasn’t fielded any television set hardware, but another observer points out that the Apple TV business on its own is now around 1/4 of the entire U.S. flat-panel TV industry, which means there’s probably little incentive for it to join that relatively small race.

Rumors suggest we’ll see refreshed Apple TV hardware coming this spring from Cupertino, and a deal announced today where Apple adds a $25 gift card to every Apple TV purchaseseems to indicate Apple is indeed clearing stock to make way for something new. With a refreshed streaming box and more services than ever, we could see 2014 growth for Apple TV beat even last year’s significant upward trend.

Source: TechCrunch

U.S. East Coast crude import days are numbered as Bakken gets barged

 A handful of new East Coast terminals that will pump Bakken and other crude from trains onto barges may end demand for imported light, sweet oil in the U.S. Northeast, the latest twist in the shale revolution that is reshaping the market.

By mid-year, new rail-to-barge facilities in Pennsylvania and Virginia will be able to unload more than 200,000 barrels per day (bpd) of crude, enough for refiners like PBF Energy or Phillips 66 to replace their remaining barrels of Nigerian or Norwegian oil, analysts say. A third facility in New Jersey may add to the flow soon.

The new terminals are part of a massive wave of investment into North American oil transportation and logistics, fueled by the emergence of fast-growing shale production in remote places like North Dakota. Output is rising so quickly it is already threatening to saturate the U.S. Gulf Coast refining hub, meaning more crude may be moving east or west.

On a recent evening, klieg lights illuminated the site of a former power plant in Eddystone, an industrial town on the Delaware River outside Philadelphia. More than 500 workers have been working through the night since October to lay fresh train tracks, retrofit a storage tank and install the machinery that will load and unload a mile-long, 118-car oil train in a day.

The crude will be piped to docks, where 145,000-barrel barges will ferry it to a clutch of refiners less than 10 miles

(16 km) away. Canada's Enbridge and partner Canopy Prospecting aim to have the terminal running by the end of March, and may double capacity to 160,000 bpd by the end of next year.

It is not yet clear exactly how markets will adjust to the new capacity. Local refiners have spent tens of millions of dollars building their own rail offloading terminals direct to their doorsteps. Keeping some overseas imports flowing may provide a more varied slate of crude and provide useful bargaining power with domestic shippers.

On paper, however, the new capacity could shut the door on imports of lighter, low-sulfur crude into a half-dozen East Coast refiners. Such shipments, which ran in excess of 800,000 bpd just a few years ago, have fallen this year from 400,000 bpd in the first quarter to less than 240,000 bpd in October and November, according to U.S. government data.

The new capacity to take Bakken crude will "just shut down imports," said David St. Amand, president of Navigistics Consulting, a shipping consultancy.

In December, the first trains began rolling in to Plains All American's 140,000 bpd rail-to-barge terminal at a former refinery in Yorktown, Virginia. It is unclear how much oil is flowing through the facility, but industry observers said that barges are moving crude to the Philadelphia Energy Solutions refinery, a trip of around 200 miles (322 km).




EAST COAST REVIVAL

The shale boom has been a godsend for East Coast refinery operators like Monroe Energy, a subsidiary of Delta Air Lines , and Carlyle Group's joint-venture PES, which runs a 330,000 bpd plant in Philadelphia, the area's largest.

Most of the domestic crude now arriving on the East Coast is coming by rail to purpose-built terminals at the refiners themselves. PBF Energy currently brings 80,000 to 90,000 bpd of light crude, with construction under way to bring that up to 130,000 bpd, executives said this month. PES brought its direct crude-by-rail capacity to 200,000 bpd in the third quarter.

Even with rail costs of up to $10 a barrel, Bakken is still

"vastly superior" to imports priced off of European benchmark Brent, said PES chief executive Philip Rinaldi.

After decades of near total dependence on imported crude, PES now runs 75 percent domestic oil, he said. On top of its own rail terminal, it also takes in some 25,000 bpd by barge via Sunoco's multimodal terminal in Eagle Point, New Jersey.

Now, new rail-to-barge terminals offer even more flexibility for refiners from Delaware to Newfoundland that process up to 1.8 million bpd.

Until last year, the two major rail-to-barge terminals operating in the region were in Albany, New York, where as much as 220,000 bpd is transferred onto barges down the Hudson River to Bayway, New Jersey, or up to Canadian refiner Irving Oil in St. John, New Brunswick. (For a full list of crude-by-rail projects in the U.S., see [ID:nL2N0KN1DC])

Buckeye Partners LP is due to finish an overhaul of its Perth Amboy terminal in New Jersey by mid-year, including a crude offloading facility, four docks, and pipeline connectivity, said Kevin Goodwin, vice president and treasurer. He would not disclose its capacity, but confirmed the company is in discussions with customers to bring Bakken crude by rail.

OPEC oil output averaged 29.96million bpd. Rises in February, led by Iraq-survey

OPEC's oil output has risen further in February from December's 2-1/2-year low, due to more shipments from Iraq and Angola, and further upward creep in Iranian exports, a Reuters survey found on Friday.

Output from the Organization of the Petroleum Exporting Countries averaged 29.96 million barrels per day (bpd), up from a revised 29.79 million bpd in January, according to the survey based on shipping data and information from sources at oil companies, OPEC and consultants.

The survey illustrates the potential for OPEC supply to rebound in 2014 if Iraq and Iran sustain higher output, potentially weighing on oil prices unless outages persist in Libya or top exporter Saudi Arabia cuts back.

"If OPEC production is rising, this would only add to the existing over-supply," said Carsten Fritsch, analyst at Commerzbank in Frankfurt. He expects Brent crude to fall further towards the middle of its trading band of $100-110 a barrel over the next few weeks due to ample supplies.

In February, a jump in Iraqi exports, an increase in Angola and a further small rise in Iranian shipments outweighed reductions in Libya, Nigeria and Saudi Arabia.

OPEC's December output was the lowest since May 2011, when the group pumped 28.90 million bpd, according to Reuters surveys. Despite increases this month and in January, supply is below OPEC's nominal target of 30 million bpd for a fifth straight month.

The biggest increase came from Iraq, whose exports from its southern terminals jumped by more than 300,000 bpd as shipping delays caused by bad weather in January were cleared. Shipments of Kirkuk crude also increased from Iraq's north.

Angola's exports have increased in February, mainly as the shorter month lifted the daily rate. The increase is unlikely to last as maintenance at BP's Plutonio oilfield is set to reduce exports in March.

Iranian supply to market was estimated at 2.82 million bpd, up 70,000 bpd. The modest pickup is the fourth consecutive monthly rise, according to sources who track tanker movements, and adds to signs that the easing of sanctions on Tehran is helping it sell more crude.

The largest decline in OPEC was from Libya, where output declined to 230,000 bpd by the end of the month from January's average of 550,000 bpd because of strikes and protests.

Top oil exporter Saudi Arabia, industry sources say, trimmed output slightly. Saudi state oil company Saudi Aramco told some term buyers that it will supply less Arab Extra Light crude due to maintenance at one of its biggest oilfields, Shaybah.

"I think they are taking advantage of a seasonal slow period," said an industry source of the timing of the maintenance. "They may re-jig production from other fields to keep pace with demand. If market demand is there, then they will supply it."

Source: Reuters

Global oil drilling slowdown to last 12-18 months- Maersk

The current slowdown in offshore oil and gas drilling will last 12 to 18 months, and the market for rigs will rebound in 2015, Maersk Drilling said, providing a more optimistic forecast than other drilling firms.

Oil companies are only delaying projects, Claus Hemmingsen, the chief executive of Maersk Drilling, a unit of Danish shipping conglomerate A.P. Moller-Maersk , told Reuters on Friday.

"I would rather call it a short-term softness than anything dramatic," Hemmingsen said in a telephone interview. "We see postponements, not cancellations, and I think that distinction is important."

Activity in the deep waters off West Africa and Brazil will suffer the most, he said. "There’s two regions when you talk about deep water that stand out - that is West Africa and Brazil."

Other drilling companies have warned that the market could be slow for the next two years as oil majors delay projects and cut capital expenditure to save cash for dividends, while drilling companies add new vessels, creating overcapacity.

Analysts expect oil and gas capital spending to rise by 4-6 percent this year, a big drop from years of double-digit growth as the biggest offshore drillers such as Shell , Chevron and Statoil cut their budgets the most.

Transocean , which owns the world's biggest drilling fleet, predicted on Thursday it would take 18 to 24 months for demand to recover.

Seadrill , the world's biggest offshore driller by market capitalisation, warned this week that the sector would slow over the next two years.

But Hemmingsen foresaw that the dip in the market would last for 12 to 18 months.

"I actually think it’s (going to be) shorter, because I see some activity and interest," he said.

"We’ll see the market returning to a strong balance of supply and demand," Hemmingsen said. "These projects that are being postponed will come back. In 2015 and beyond, we’ll see the market continuously on the strong side."

Hemmingsen said Maersk, which take delivery of six new rigs this year, will need several more units to meet its 2018 target for a $1 billion net profit but that no newbuild orders were imminent.

Source: Reuters

Camera360′s Latest Version Is Streamlined But Packed With Features

Camera360, which now claims more than 250 million users, is one of the world’s most successful photo apps. But Camera360 still faces plenty of competition from other apps like Camera+and Afterlight and has been looking at ways to differentiate.

Its latest version, which is now available for both iOS andAndroid users, combines a streamlined flat design with new features that help users save data, an important point as Camera360 targets growth in emerging markets.

In previous versions of Camera360, its eight camera modes and more than 100 effects, including filters and frames, were pre-installed. For casual users, sifting through all these features was time-consuming and confusing.

So the app’s developers decided to reduce the number of pre-installed features on the app and move the rest to Camera360′s in-app Camera or Effects store, where they can be downloaded for free. By turning cameras and features into plug-ins, the team has made Camera360 customizable and faster loading. The startup will also keep pushing out new options to the store, including several paid features as part of its monetization plan.

Camera360′s update also lets you make an account in the app’s Cloud Service to store photos, including ones that you haven’t finished editing.

The latest version of Camera360 comes pre-loaded with its four most popular camera modes. “EasyCam” automatically detects the type of photo you are taking (a flower closeup or night scene, for example) and adjusts camera settings. “Effects” lets you chose from several filters and preview them while composing a shot. “Selfie” is a quick alternative to Camera360′sPink360, with filters that are supposed to flatter skin tones (hint: “Light” is best for subtly smoothing out blemishes and shadows, while “Glossy” is the filter for you if you want your selfie to possess an unearthly, ethereal glow).

Of the optional camera plug-ins, I think the most useful are “MultiGrid” for making collages and “LowLight,” which works very well for shooting on cloudy days or indoors without a flash.

Based in the Chinese tech hub of Chengdu, most of Camera360′s users are based in its home country, but it wants to accelerate growth in the rest of the world. With its attractive redesign (which allows for unobtrusive banner ads), in-app stores, and cloud service, Camera360′s newest version is an excellent start on its international strategy.

Source: TechCrunch

Personal Finance App Wacai Books $15 Million Series A+ Funding, Name Ameba Capital Founding Partner as CEO

Wacai, a personal finance app developer, announced today it has secured $15 million of Series A+ funding from Qiming Venture Partners. The company has raised about ten million dollars of Series A funding from IDG Capital Partners and $3 million from CDH Investments last year. This round brings Wacai’s total funding to nearly $30 million.

Li Zhiguo, founding partner of angel investor Ameba Capital, will assume the post of Wacai’s CEO. Li worked as an angel investor since 2010 after Koubei, a ratings and reviews service he founded, was acquired by Alibaba in 2008. The projects he invested in include, social shopping service Mogujie, taxi-booking app Kuaidi Dache, interest-based social network Huaban, Wacai, etc.

Li said that it is the promising prospects of Internet finance industry and the team that attracted him to join the company. The firm is now supported by a team of round 70 employees. Li added the capital raised this time will be used to attract more talents.

With the rise of mobile internet, the threshold for financial management and financial products are lowered, and therefore, creating a huge market for personal financial management, noted Li.

The company’s core product Wacai, a bookkeeping service which claimed 60 million users, added fund trading features since last year. Wacai has teamed up with several funds, insurance companies and banks, enabling users to purchase monetary funds, stock funds and bond funds on the app. It also rolls out some high profit financial products on 18th every month to attract more users. Li added the daily sales of these products exceeded 100 million yuan ($16.27 million).

Source: TechNode

Backed By $10 Million, Flyby Messenger Is The First Consumer App To Use Image Recognition Tech From Google’s “Project Tango”

Flyby, a new messaging application that lets you share text and recorded videos attached to objects in the real world, is the first consumer-facing app to use the image recognition capabilities found in Google’s “Project Tango.” That project, for those unfamiliar, involves an Android-based phone with advanced 3D sensors that’scapable of building visual maps of the world around it.

Flyby Media is the vision-based software partner for “Project Tango.” And that same IP is now being built into this Flyby application for broader consumer use.

The company was founded by Cole Van Nice and Oriel Bergig in 2010 to begin the development of this image recognition technology. Flyby’s CEO, Mihir Shah, who previously was CEO at Tapjoy, was later brought in to lead the now 20-person New York and Palo Alto-based team into new verticals.

Explains Shah, he was excited about getting to work with something that was in the consumer space, rather than ad tech. “Something that I’m pretty passionate about is how to do you drive real context to worldwide consumers in content and message delivery,” he says. “Context is one of the hardest things to really address,” Shah adds.

In Flyby the “context” is the real world.

How It Works

The app works by allowing users to “scan” any object in the real world using their phone – like a hat, a sign, a handbag, a coffee cup, a building, a tattoo, a poster, etc., etc., – which is then added to their collection of saved objects, Afterwards, friends can begin to send messages to those objects, as a way of communicating that’s a bit more serendipitous than when they’re just sending you a traditional text with media attached.

Recipients are alerted that messages are available when they’re in close proximity to an object that has a message attached. To “unlock” that shared video, they use the Flyby app to scan the object. The app’s image recognition capabilities are able to “see” and understand what that object is, which is Flyby’s big technical trick.

An Idea That’s Been Tried Before

However, the idea of attaching messages to things out in the real-world, or dropping them at specific geographic locations has been tried before, most recently by TechCrunch Boston pitch-off winner “Drop,” and most notably by Flickr and Hunch co-founder Caterina Fake.

“Real world” messaging seems like it should be a thing, but it’s really a quirky way to communicate, and frankly a bit cumbersome to manage. After all, if there’s something you want your friend to see, why not just send it to them? Why make them jump through hoops?

There are a few practical use cases one could imagine, which overlap with augmented reality applications. For instance: scanning historical landmarks, like statues, while on a sightseeing tour, or scanning some consumer good, like a desktop printer, in order to unlock a visual instructional manual.

However, Flyby isn’t looking at practical applications for its image recognition technology with its consumer messaging app – it’s all about attempting to drive adoption in a space where others have failed time and again.

Shah admits that’s a big challenge, noting that “the hardest part is getting consumers engaged.” Everything that follows, including getting brands or consumer packaged goods companies on board to use their own products or packaging as “broadcast antennas” to reach a mainstream audience, would be easy, he says.

Flyby’s app, while not terrible, is confusing – especially since one of its first goals should be to very simply introduce this new concept of messaging around objects to its users. (It attempts this with an introductory tutorial and videos, but it doesn’t really connect.) When you press the main button, you’re prompted to “add an object” or “send a Flyby,” neither of which would make a lot of sense to someone who’s not entirely clear on the whole concept here, and is just trying to figure things out.

The company is trying to drum up some consumer interest by partnering with Sports Illustrated model Genevieve Morton at launch. She will use the platform to communicate with her fans in various ways.

Flyby has other ideas in the works, too, including making its IP available to other app developers in the form of an SDK. But for now, its main claim to fame is its “Project Tango” connection.

The Flyby app works only on iPhone 4+ and iPad, as it has specific hardware requirements in terms of its image recognition capabilities. The company is currently working on a version for Samsung’s new Galaxy S5 phone, which Shah says is the first mainstream Android phone to offer a fast enough frame rate for their needs.

The company has raised $10 million to date through seed and Series A rounds. The A round (north of $5M) was co-led by Observatory Capital and Clark, and included participation from Bosch Ventures and Chart Venture Partners.

Source: TechCrunch

Big data application, climate change main challenges for global insurers: experts

The major insurance industry players Thursday cited the big data application and climate change as the main challenges for the sector's future development during "The Insurance Summit", which was held by the Economist in London.

LOW LEVELS OF DIGITAL MATURITY

Global insurers have acknowledged that actions should be taken to tackle the current low levels of digital maturity, according to EY, an accounting and advisory company.

In its global insurance digital survey report, EY said seventy-nine percent of insurers responded they are "not setting the baseline" for digital or are "still learning."

"The adoption of technology by consumers has rocketed. Our customers will deal with us very differently." said Mark Wilson, CEO of Aviva Plc., in the opening keynote speech of the summit.

Wilson highlighted the age of technological disruption, geographic shifting of wealth, the use of data (big data), demographic and health changes and new regulation requirement as the five main changes in the insurance industry.

By citing the forecasting figures from Intel, he said by 2015, there will be 3 billion people online and eight zettabytes of data amount will created and shared.

"Data is the fuel in the tank of insurance," he said.

Andrew Kendrick, president at ACE European Group, also said:" Data use is exploding in our more global, more connected world - and, frankly, the industry is struggling to get its head around it."

"Research by the Chartered Institute of Insurers found that 82 percent of industry professionals believe that insurers who fail to capture the potential of big data will become uncompetitive. But depressingly, 95 percent say underwriting departments lack the necessary tools to do so," said Kendrick.

According to the annual World Insurance Report 2014, which was released by Capgemini and Efma on Feb. 26, insurers anticipate by 2018, nearly one-fifth, or 19.7 percent, of their business to be generated through internet-connected PCs, up from 12.7 percent in 2013. Another 10.9 percent is expected to come via mobile channels, up from a mere 1.5 percent last year.

CLIMATE CHANGE CAUSING UNCERTAINTY

Beside the digital and technology challenges, the rapid global warming and climate change over the last three decades also weighed heavily on the industry, as it casting uncertainty on insurers' outlook.

Since 1980, global GDP growth rate was pushed down by 1.3 percent per annum due to weather risks, said Clement Booth, Allianz SE's board of management's member, during the summit.

"Weather changes and extreme weather are undeniably caused by climate change," said Booth. But today, only 30 percent of all damages from natural catastrophes are insured.

Booth cited the Haiyan typhoon, which caused dozens of billions of dollars loss to Philippines, as an example, noting that only 10 to 15 percent damage was insured, thus risking reputation for insurers present in the region.

In an article to the Guardian, Trevor Maynard, head of exposure management and reinsurance at Lloyd's of London, said that since 1980, the cost of natural catastrophes has grown by 870 billion U.S. dollars in real terms and 2011 was the second costliest year on record for natural catastrophes including devastating floods in Thailand and Australia.

Booth suggested the whole industry to take concrete steps to examine systematic integration of environmental, social and governance issues to minimize risks.

Source: Xinhua

China's economic reform will not follow Jacob Lew's pace

 U.S. Treasury Secretary Jacob Lew, once the housekeeper of theWhite House, might have overreached his authority by criticizing China's economic reform pace while failing to keep his own country's house in order.

Lew said at a conference ahead of a meeting of G20 finance officials last week that he was disappointed with China's pace of economic reform. He called on China to "move at the speed we would want" even at the risk of causing social and political unrest.

Lew's concern for China's reform is understandable, but his bossy advice is going too far and proves to be just groundless and self-serving finger-pointing.

As the world's largest developing country and the second largest economy, China has contributed a lot to global economic growth thanks to its near double-digit expansion in the past three decades.

It has lived up to its international responsibilities with its rapid but steady development, especially during the 2008 financial crisis, which originated from the U.S.

China is now at a pivotal point where it must remould its economy, and the leadership has realized the immediacy and showed resolve to kick the GDP-driven growth habit and seek new ways to fuel sustainable development.

It takes time to change, especially for the most populated country with complex national conditions and entrenched vested interests.

But China will not opt for quick fixes to push reform like "printing" money as some countries do, or resort to shock treatment out of hotheaded decision-making which is just too rash and costly for the country and the whole world.

Seeking steady progress while pushing forward reforms is the pace China chooses for its future growth. And its reform pace and scale is unprecedented. Over half of the plans on the 60-point reform agenda have been launched since it was released three months ago.

If the speed that Lew wants is one that may imperil social and political stability, not only China, but also other countries in the world will definitely say no.

What right does the U.S. have to point fingers? It is the U.S.'s mishandling of its financial sector that has left the global economy still mired in trouble.

Yes, "printing" money is quicker than concrete and sometimes painful measures to overhaul an economy, but it is often other countries who have to share the burden for the aftereffects.

The move is not only putting off economic transitions, but also has irresponsibly caused spillover financial shocks to other countries.

Francis Underwood, the manipulative politician in the hit U.S. television series House of Cards, said in the opening scene that he has no patience for useless things. "Moments like this require someone who will act or do the unpleasant thing, or the necessary thing."

But please, Jacob Lew, have some patience for China's change. China's sophisticated reform is anything but useless, and it doesn't need anyone to interfere and do the unpleasant, and unnecessary thing.

Source: Xinhua

Ship-building industry expects demand to rise

The ship-building industry may be set for a turnaround. A consultant that tracks the global shipping industry reports 153 large new cargo ships were ordered last year. That's a 76 percent increase from the previous year. The surprising growth is in contrast to the slowly recovering global economy.

Tay Linsiau has been working in the shipping business for 13 years. The Singapore-based company ordered four new ships this year after years of suffering through a declining market. Tay says 35,000-ton ships like the model in his office are now too small to be efficient cargo carriers.

"For the kind of ship that we ordered, 64,000 tons, they are actually cheaper than the ones that people started ordering in mid 2000, which are smaller at 57,000 tons. Because it's cheap, if they don't have any cargo or they don't have any use for the vessels later on, they can find some way to re-let the vessels or to sell them," Tay said.

The Danish company DSF invests in building ships and it says that the cost to build a new ship fell to a ten-year low of about 1,400 U.S. dollars per ton last year. Meanwhile, Barclays Group in Britain is predicting a 5.8 percent increase in cargo volume to be shipped this year. That means demand for cargo volume will exceed shipping capacity for the first time since the economic crisis began in 2008.

"The best situation I can say is that freight rates are not declining any further. Many people believe that this is it, that we've already hit the bottom. So the only way to go is up," Tay said.

In addition, the Chinese government is paying 1,500 yuan per ton to ship owners to encourage them to scrap ageing ships. The move is part of a campaign to reduce excess shipping capacity. One analyst says that replacements for the older vessels will stimulate demand for new ships.

"Given that they were built mostly in the 1990s, and are almost 30 years old, when they are retired, the demand for new ships will be substantial. A lot of ship breaking operations in Guangdong, Jiangsu and in north China, are now fully occupied breaking up the old ships," said Yao Tuan, from International Register of Shipping Company.

Chinese regulations say that cargo ships can serve no more than 33 years. About 2.5 million tons of Chinese ships were retired last year.

Source: CCTV