Price Discovery – Piazza Carlo Giuliani Thu, 05 Aug 2021 05:09:44 +0000 en-US hourly 1 Price Discovery – Piazza Carlo Giuliani 32 32 Ethereum hits US $ 2,700 ahead of EIP-1559 upgrade later tonight Thu, 05 Aug 2021 02:56:10 +0000

Ethereum hit a new two-month high as excitement mounts for the London Protocol upgrade later tonight.

At 11:12 am AEST, Ether changed hands at just over US $ 2,701, up 7.0% from yesterday and its highest level since June 7.

The London hard fork, which contains the highly anticipated EIP-1559 (Ethereum Improvement Protocol No. 1559), is expected to go into effect around 10:35 p.m. AEST today when block 12,965,000 is mined.

The upgrade will make transaction costs more predictable and “burn” (destroy) a fraction of them, making the network less inflationary.

Members of the Ethereum community were celebrating and scheduling “viewing parties” on YouTube as the upgrade went live.

Crypto mostly in the green

Overall, the crypto market rose 3.4% to $ 1.68 trillion, its highest level since Sunday.

Crypto market

Bitcoin changed hands at US $ 39,359, up 2.4% from yesterday.

Only four of the top 100 coins fell more than one percent, with KuCoin Token the worst performing, down 6.4 percent.

The best winner in the top 100 was Traveler Token, up 17.6% from Wednesday, after the U.S. listed company behind the token announced earlier this week that it had acquired crypto payments firm Coinify ApS for $ 84 million.

Digital travel (CSE: VYGR) is a crypto-asset broker and holders of the VGX token earn interest when held in the Voyager app.

“The acquisition of Coinify will significantly accelerate our expansion in Europe and help us meet the growing demand for our current product offering internationally,” said Lewis Bateman, International Director of Voyager.

Digital world token founded in Australia Illuvium had hit another all-time high, at US $ 289, just like the derivatives trading platform Perpetual Protocol, at US $ 17.57.

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What makes cryptocurrency fluctuate? Tue, 03 Aug 2021 10:18:29 +0000

Cryptocurrencies are known for their extreme volatility, but that’s also why they are capable of producing such wealth. Over 1000% of crypto rallies are common, while a stock exchange might never see such gains in its entire existence.

This volatility and wild price swings is part of what attracts new market players over and over again with every major bubble, and with every new wave, the cryptocurrency market and market capitalization becomes much larger.

But have you ever thought about what actually causes the price of cryptocurrency assets to fluctuate in the first place? And is it possible to predict these fluctuations with a sufficient degree of precision to improve the rate of return? Let’s find out.

What is cryptocurrency? From Altcoins To Bitcoin

A cryptocurrency is an emerging technology built using a cryptographic computer code and involves storing assets on the blockchain. The computer code also powers a cryptographic protocol that protects the network against hackers or other security issues.

Cryptocurrencies first appeared when Bitcoin was born at the end of the Great Recession. The creator of the coin, Satoshi Nakamoto, also developed the first working example of blockchain technology with the introduction of Bitcoin. Since then, thousands of cryptocurrencies have been created each with a unique use case or purpose.

Ethereum, for example, isn’t just a currency like Bitcoin, it’s also a supercomputer that runs decentralized applications through a technology called smart contracts. Smart contracts are executable code that can be designed to run all kinds of technologies.

Smart contracts have enabled the creation of new subsectors of the cryptocurrency industry, such as NFT and DeFi. NFTs are non-fungible tokens that represent digital ownership of unique digital items. DeFi, or decentralized finance, is another disruptive area of ​​the market that offers lending and borrowing without authorization.

Why cryptocurrencies are still speculative assets

If this all sounds a bit confusing from a technical standpoint, don’t worry, you are not alone. Cryptocurrencies are a new technology that not everyone understands and that was designed to represent our point of view: Crypto is a speculative asset class.

People do not yet fully understand what technology does or the benefits offered by assets, let alone the value at which assets should be valued. Bitcoin is also another ideal and polarizing example. Experts claim it will go to zero, but those who support the cryptocurrency believe it will one day be worth millions per coin.

Because no one knows what these assets will or should be worth, the market can only speculate on what these prices might someday be, and any price action is the result of natural price discovery.

And because cryptocurrencies are speculative, they are highly subject to wild price swings due to extreme changes in sentiment. And with crypto, an interesting thing always happens – people always want to buy the coin when it hits all-time highs, but ignore buying the asset when prices are low.

Why crypto market sentiment is moving to such extremes

In early 2020, everyone expected Bitcoin to reach new heights. It was back to $ 10,000 for what seemed like the hundredth time, and finally got big. Then COVID hit and Bitcoin dropped to $ 3,000 on Black Thursday.

Investors were afraid to touch it lest it potentially collapse to zero if the economy continued to fall. But it doesn’t, and the opposite happened and the perfect storm in Bitcoin happened afterwards. Billions of dollars in stimulus money were printed when there were only 21 million BTC.

Talks about inflation and low interest rates have shifted the appetite for risk, and investors have loaded up on memes and crypto stocks. Bitcoin exploded from $ 3,000 to $ 60,000. At its highest, everyone expected Bitcoin to hit $ 100,000 or more. Still, it crashed badly at $ 30,000. Now, even though just a few months ago people expected $ 100,000, now they are expecting a return to $ 10,000 or worse.

Switching positions is a bad investment strategy, so it is often advisable for HODL investors, but it can lead to losses for years. This is why many choose to trade Ethereum and other cryptocurrencies instead.

Why trade cryptocurrencies instead

Markets are cyclical and rather than holding onto a bear market, those who have been in the crypto market for years are finally turning to trading. It can take even a single peak and trough to realize the potential gains left on the table by not trading instead.

For example, any investor who bought Bitcoin in 2020 did well until 2021, but then lost half of their earnings on the massive sell-off. But those who traded could have gotten profits from the rally to the upside, and even bypassed Bitcoin before the crash and profit from it on the downside.

Trading is best suited for speculative assets such as cryptocurrencies and can also be an ideal tool for inventors of stocks, currencies, and commodities. Trading these assets through CFDs such as derivatives provided by PrimeXBT allows for ultimate flexibility in position management.

This is especially useful for managing the highly volatile crypto market, which requires technical analysis tools, stop loss management, and more to survive. Over time, the volatility of each cryptocurrency will decrease as adoption takes place and more cash flows into those assets.


Low liquidity compared to forex, stocks or gold is also part of what makes crypto so wild, but it cannot be managed so easily. It is this situation of low liquidity and adoption that makes crypto more speculative of an asset class than those involved would like to believe. The solution to speculation is to trade rather than HODL, and only time in the market will tell.

Adoption is here, but it will move slowly and price discovery will be volatile and even painful along the way. Bitcoin and other assets like Ethereum will experience boom and bust repeatedly, with bullish and bearish phases in between. Knowing this in advance, would you prefer HODL and hope for the best, or is it time to consider trading cryptos instead?

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No trigger was triggered in the volume of traded traded, some packers are still slow to cooperate Fri, 23 Jul 2021 17:49:00 +0000

According to a letter to members of the President of the National Cattlemen’s Beef Association, Jerry Bohn, no triggers were triggered in the volume silo traded during the second quarter, which means there will be no regulatory or legislative solutions for the moment. Even so, Bohn said some packers were slow to participate.

“Using data collected as part of mandatory livestock reporting and released by the USDA Agricultural Marketing Service, the subgroup found that no minor triggers were triggered in the silo of trade volume traded in the second quarter. So far, we have not achieved our goal of completing the packer participation silo. However, I am happy to report that we have now finalized agreements with the four main slaughterhouses to analyze their participation in the negotiated market starting in the third quarter. The completion of the conditioner participation silo brings the total number of minor triggers in our program to eight – one for each of the four livestock growing regions analyzing negotiated trade volumes and one for each of these regions analyzing purchases. negotiated conditioners. Addressing this essential part of our voluntary effort will help ensure that buyers and sellers of live cattle take mutual responsibility for achieving solid price discovery. “

When the first quarter traded trade data was evaluated, a major trigger was triggered. According to the framework approved by the members, if another major trigger is triggered during another quarterly assessment, legislative or regulatory action will be pursued.

According to the NCBA, as part of the “Negotiated Trade” silo of the 75% plan, a minor trigger is assigned to each region. The subgroup assessed the weekly trade volumes negotiated for each cattle-growing region and determined that the Iowa-Minnesota and Nebraska-Colorado regions exceeded their thresholds under the 75% plan during all reporting weeks, thus exceeding their traded trade threshold for that quarter. . They also found that the Texas-Oklahoma-New Mexico and Kansas regions did not meet the threshold for five of the first quarter’s reporting weeks. One of those weeks occurred during winter storm Uri and another coincided with the mandatory maintenance of a major packaging plant, resulting in a long shutdown. Both events disrupted normal livestock flows and ended critical packing capacity. Data from the weeks surrounding the two events warranted invoking the force majeure provisions of our framework, although a major trigger was still triggered due to a lack of participation from packers.


Bohn said the second quarter saw a striking level of buy-in from livestock producers and, mainly due to cattle feeders, particularly in the southern plains, the second quarter saw more negotiated market participation than the first. Some slaughterhouses, he said, have expressed a desire to work with us to increase their purchases of traded cattle, and seem to recognize the importance of price discovery for the entire industry.

“That said, the NCBA has been frustrated by the apparent lack of urgency shown by some of the biggest buyers of fed cattle,” Bohn said. “The sub-group believes that the completion of the packer participation silo will encourage all major meat packers to be part of the solution to this problem. “

The sub-group met in Denver on July 6 and discussed the results and some of the lessons learned, including how livestock marketing varies so dramatically from region to region, especially in terms of quality or percentage of dressing.

“Second, it’s important to remember that price discovery and pricing are different things,” Bohn said. “For example, in four weeks of trading in the second quarter, trade volumes traded exceeded robust price discovery levels in all regions. Nevertheless, cattle prices did not register significant gains during the same period. High livestock supplies and a shortage of adequate beef packing capacity have helped create a current market dynamic where the influence in negotiations resides with packers.

In addition, he said that the use of non-value-added formulas, such as weighted averages, “cash plus” transactions and “high-end” transactions, neither contributes to price discovery nor to the pursuit of price. our goal to increase the real trades traded in the market. The subgroup also noted the need for additional research and academic literature to better understand the role of competition, or involvement of packers, in discovering price and cost industry-wide volumes. negotiated reduced.

He admits there are no quick fixes, but work continues to ensure that every segment of the industry can be profitable.

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Is Transferwise a long term buy or sell? Fri, 23 Jul 2021 05:47:19 +0000

the Wise course of action was in a narrow range three weeks after its direct listing in London. Formerly known as Transferwise, the company’s shares are trading at 962p, which is slightly below the all-time high of 1030p and 20% above its opening price. That values ​​the company at over 13.3 billion pounds ($ 17 billion). Interestingly, this makes it more valuable than Western Union, MoneyGram, and Euronet Worldwide combined.

Wise news. Wise is one of the most successful UK startups in the world. The company was among the first money transfer companies to disrupt the industry by reducing costs and improving transparency. He did this by showing the overall cost of transactions before customers send money.

In addition, it has achieved this by reducing transaction costs. As a result, the company added more than 10 million users and significantly increased its revenue. It has also diversified its activities by adding new solutions such as a multi-currency account and business solutions.

Wise, like most digital platforms, performed well during the pandemic as more and more people adopted these solutions. The main concern is that last year’s growth will start to fade as the global economy rebounds. However, supporters of Wise say the company will continue to experience robust growth as the clients it added last year increase their transactions. In other words, the lifetime value of its customers will continue to increase.

What future for the Wise share price? A quick glance at the fundamentals of Wise shows that the company is clearly overvalued. On the one hand, this is a company that has generated over $ 400 million and is valued at over $ 17 billion. Its sales rose more than 40% in the first quarter to over £ 123 million.

However, a quick glance at some of its top performing peers like PayPal, Square, and AfterPay shows that high growth tech companies tend to attract these bonuses.

5-Year Wise Share Price Forecast

Wise went public earlier this month. Therefore, we can say that the stock is still in a price discovery phase. The Wise share price initially peaked at 1,030 pence, then erased some of those gains when it fell to a low of 902 pence on July 16. The stock has moved sideways over the past few days and is hovering near its moving averages.

Therefore, in my opinion, I suspect the stock will remain in a consolidation phase for some time as investors wait for more data from the company. However, over the next five years, I suspect stocks will be significantly higher than they are today.

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Is $ 3 (or more) gas here to stay or is it gone tomorrow? Tue, 20 Jul 2021 19:30:08 +0000

Over the weekend, the Organization of the Petroleum Exporting Countries (OPEC) agreed to increase crude oil production from August. Immediately, crude oil prices fell 5%. This sounds like good news for anyone who is happy to be back on the road but currently has to shell out $ 3.00 or more for a gallon of gas.

OPEC’s expected expansion is expected to ultimately bring overall production back to pre-pandemic levels. But how much of our $ 3.00 gasoline is really about the OPEC cartel, and how much is about actual changes in supply and demand? To what extent is this the result of producers’ efforts to adapt to a post-pandemic world?

In a nutshell, there is no way for us to know everything that determines oil price changes in a world market still in unexplored waters. That said, a long-term look at the situation can help determine what kind of “new normal” we as consumers can possibly expect at the pumps. Maybe we’ll at least see more stability on our summer trips on the country’s highways or the streets of our hometowns next year.

A quick look at the Department of Energy’s weekly average regular gasoline prices, which on July 12 averaged $ 3.13 per gallon across the county, tells us what happened. past the past few years. The nominal price (unadjusted for inflation) steadily exceeded $ 3.00 in 2008. Then, after a period of great recession, the price per gallon again remained above $ 3.00 from December 2010 to November 2014, when the shale oil revolution began to affect oil prices in the United States. From November 2014 to July 2021, for almost seven years, the price per gallon remained below $ 3.00.

In a sense, we consumers have been spoiled by an energy revolution in our own country – an increase in supply that has propelled the United States to the top of the list of the world’s largest producers of petroleum products. Interestingly enough, the nation reached an energy milestone that had been sought after at least since the Nixon administration. President Ford called for energy independence by 1985, and President Nixon made a similar bugle call even earlier. It took a lot longer.

But instead of popping champagne corks and celebrating cheap oil and happier household budgets, the resulting shale oil celebration was rather muted. Not everyone is concerned about the cost of vacation travel or commuting to work every day. Much of America’s elite feared that the discovery of low-cost shale oil production techniques would delay the necessary transition to a renewable energy world. They weren’t interested in praising fossil fuels. They preferred to keep it buried.

Today, once again, we are seeing a rise in gasoline prices. In a relative sense, we’re pretty much where we were before the shale oil revolution. Those who yearn for the end of the oil age can celebrate in peace.

It is unclear to what extent the current rise in gasoline prices is due to fundamental shifts in supply and demand or disruptions from coronaviruses. Why? We have the interplay between an oil cartel, a virus-induced economic transition (some of which are likely permanent), and a strong environmental movement to end dependence on fossil fuels. In short, the market does not tell us what causes what.

But given that the United States has been in the driver’s seat of an energy revolution for the past decade, we are not on course. Whether prices rise or fall will likely depend on the actions of our own policymakers. To a large extent, this will depend on how well the average American consumer is willing to tolerate higher prices at the pump and how comfortable they are letting politicians, activists or special interests solve the problem between them.

What many of us know from personal experience is that taking a long-distance trip right now will involve high gas prices, expensive hotel rooms (if one can be found), and expensive hotels. crowded highways. People released from coronavirus closures are on the road again. In the meantime, I bet we’ll see a drop in gasoline prices before the end of 2021.

Bruce Yandle is a Distinguished Fellow of the Mercatus Center at George Mason University and Dean Emeritus of Clemson College of Business and Behavioral Sciences.

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Cloudbreak Discovery, first acquisition as part of the Alianza Minerals alliance Tue, 20 Jul 2021 08:01:19 +0000

Cloudbreak Discovery (LSE: CDL) and Alianza Minerals (TSXV: ANZ) (OTC: TARSF), operating under the umbrella of their newly formed strategic alliance, have announced their first acquisition.

The Klondike property is located 25 km south of Naturita, Colo., Covering 843 hectares in the Paradox Copper Belt Basin in San Miguel County, Colo., Comprising 72 Bureau of Land Management claims and an exploration permit. of the State of Colorado with an exclusive right to a State Rent.

Jason Weber, The President and CEO of Alianza said, “The Klondike property is the prime example of the ideas generated by this alliance and demonstrates the potential we see for additional real copper prospects in this under-explored region. “

The alliance was formed on June 15 of this year.

The area is known to have sediment-hosted copper deposits, but has not seen any exploration for copper since the 1960s, with subsequent exploration targeting uranium in the 1970s.

High grade copper mineralization

Previous work has reported high grade copper mineralization, with 6.3% copper and 23.3 g / t silver exposed. A high copper price, up nearly 100% since March 2020, has made more old work viable: the price has since fallen 10% to around $ 4.3 / lb.

Kyler hardy, President and CEO of Cloudbreak Discovery, added, “We know these rocks hold promise for copper mineralization, as evidenced by other belt deposits and the active Lisbon Valley copper mine. .

Eleven of 15 samples reported as part of a limited historical prospecting and mapping program returned grades up to 6.3% copper and below detection at 85.4 g / t silver.

Disseminated copper-silver mineralization has also been found in Jurassic and Permian age sandstone outcrops, suitable for modern open pit mining with an electro-sheathing solvent extraction (SXEW) treatment, similar to that used at the Lisbon Valley mine, 50 km northwest.

Sediment-hosted copper deposits are a major contributor to global copper production, accounting for over 20% of the world’s copper supply each year.

Beginning of exploration imminent

Both styles of mineralization will be explored in future work programs, with the goal of refining drill targets in these units. Cloudbreak and Alianza expect to begin exploration on the property imminently. The area already has road infrastructure, allowing immediate access.

The alliance targets copper projects in the southwestern United States, Arizona, Colorado, New Mexico and Utah, with the goal of finding suitable partners to develop them. Under the terms of the alliance, each company can introduce projects into the strategic alliance.

The projects accepted in the alliance will be held 50/50 but the financing of the initial acquisition and any preliminary work programs will be financed 40% by the introducer and 60% by the other party.

Alianza is the operator of the Alliance projects, unless the Alliance Steering Committee determines that Cloudbreak would be a more suitable operator.

The initial duration of the alliance is two years and can be extended for another two years.

Cloudbreak Discovery, a generator of natural resource projects, working on a wide range of mining assets, was listed on the London Stock Exchange on June 3. Cloudbreak, formerly known as Imperial X PLC, holds interests and royalties in various projects in the natural resource sectors, primarily in North America and Africa.

Alianza uses joint venture funds and self-funded projects to explore and develop projects. The company currently has gold, silver and base metals projects in the Yukon, British Columbia, Colorado, Nevada and Peru.


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How close is quantum computing to healthcare? Mon, 19 Jul 2021 14:43:26 +0000

The world is on the cusp of a new era of computing with the advent of quantum technology, a much-vaunted but abstract branch of engineering with the potential to transform the healthcare industry that has never not yet fully exploited in real world applications.

Short-term uses range from streamlining clinical trials to optimizing back-end functions for payers and providers, and could begin to be used in practice within the next few years.

“I’m loath to put an exact timeline – is it a year? Is it two years, three years to go into production? But we’re seeing some real results today that say it’s going to be treatable in the short term,” Christopher Savoie, CEO of quantum software developer Zapata Computing, told Healthcare Dive.

Quantum computers, which are exponentially faster and more efficient than conventional computers, promise to reshape the entire industry, with proponents suggesting they could save the system hundreds of billions of dollars while improving patient care. patients.

Earlier this year, academic medical giant Cleveland Clinic entered into a decade-long partnership with IBM in which the computer giant is providing two quantum computers, engineers, and training for the student clinic’s new research center. genomics, emerging pathogens, viral diseases and public health threats. Until this agreement, IBM had only installed quantum systems at its own facilities.

The joint venture is still in the planning stages, but projects are expected to start this year, Lara Jehi, head of research information at the Cleveland Clinic, told Healthcare Dive.

For some industry observers, the partnership proves that established medical interests are serious about quantum’s short-term ability to solve currently intractable computer problems.

“I think we’re talking about single-digit years. We’re not talking about decades,” Jehi said. But “especially when it comes to healthcare, where nobody knows what the applications are, it’s all a learning exercise.”

In addition to this, you need to know more about it.Optimization of functions

Computers today use bits, a stream of pulses that exist as zero or one, to store data and solve problems. Quantum computers differ from traditional computers in that they use quantum bits called qubits – usually subatomic particles such as electrons or photons – which can exist as both zero, one or zero and one at the same time.

The ability to be in multiple states at the same time, called superposition, as well as a phenomenon called “entanglement,” in which two paired qubits exist in a single quantum state, allow quantum computers to perform many calculations at the same time. and grants them enormous computer processing power.

For this reason, quantum computers are adept at performing simulations, especially those requiring large combinations of different variables. This ability makes them widely applicable in healthcare and pharmaceutical spaces.

In the near future, for pharmaceuticals, quantum could be applied to improve patient selection and design in clinical trials, generate new molecules with a desired set of biological properties faster, better predict drug response, and get a drug to market faster, even for various diseases that cannot yet be treated, some experts say.

Clinical trials are a key area where quantum algorithms can have the greatest impact. Estimates vary, but it may take 10 years and Billions dollars to complete the process from drug discovery to commercialization.

Clinical trials are still conducted manually, and there isn’t much competition to make them smarter when it comes to calculating, despite the high price tag and slow schedule, experts say.

This is a key area where quantum could be harnessed earlier, as drugmakers have a lot of data from already completed trials. A handful of companies, including North Carolina-based Cloud Pharmaceuticals, California-based ApexQubit and XtalPi, are already using quantum technologies for drug discovery and development, many in partnership with quantum manufacturers like IBM and Google or pharmaceutical giants like GlaxoSmithKline or Pfizer.

Given the potential, McKinsey estimates global pharmaceutical R&D spending on quantum computing will reach billions by 2030.

“It’s the boring day-to-day tasks that will really have the greatest return on investment in the short term, simply because of the nature of the calculations. But it will arguably have a bigger economic impact,” Savoie said.

Likewise, quantum could optimize healthcare administration functions for payers and providers, in areas such as patient matching and scheduling, patient allocation to beds, reduction of diagnostic testing. unnecessary time spent on an MRI machine and imaging.

For example, adding quantum computing to a type of deep learning called generative adversarial networks, or GANs, can be used to populate sparse data in imaging for rare diseases, Savoie said.

Consider a situation where in order to train neural networks to identify a specific and rare form of lung cancer, researchers need 10,000 MRIs of the cancer, but they don’t have enough data. Using quantum GANs, researchers can further falsify additional analyzes, adding realistic synthetic examples to this dataset and resulting in a very precise algorithm to identify this rare cancer.

Quantum’s power also allows it to process imaging on a large scale, which requires significantly more processing power than traditional data sets. This ability could allow clinicians to analyze images, such as CT scans, more quickly and identify any abnormalities, resulting in faster diagnosis and improved patient care.

“Multifactor optimization problems – these are the types of things quantum will be good for,” said Matt Kinsella, managing director of Maverick, the VC arm of $ 8 billion hedge fund Maverick Capital that has invested in the technology. of quantum computing.

Look further

Eventually, some say quantum technology could be used to design a drug without having to test it on animals or patients, although developers are reluctant to put a timeline on such futuristic applications.

“It’s a little too early for us to delve into specific applications or verticals,” a representative of Google’s quantum research team told Healthcare Dive. “Over the next few years, the team will be really focused on building the first practical quantum computers.”

In 2019, Google’s computer, considered one of the most advanced in the world, used 53 qubits to complete a task in 200 seconds that researchers estimated that it would take more than 10,000 years for a conventional machine.

Even today’s fastest quantum computers don’t have more than 100 qubits, which (although extremely powerful) is still limited compared to what quantum machines will be capable of in the future, researchers say. .

“There will be some really interesting breakthroughs that will happen early in drug discovery, but that’s later, because of the number of quibits he’s going to use,” Savoie said. “The world changing stuff, the really cool stuff for a title, is in this early discovery zone.”

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Oil prices and Indian fiscal federalism Sun, 18 Jul 2021 15:05:22 +0000

International oil prices stayed well below $ 50 a barrel in the 1980s and 1990s. The figure shows this for Brent. But they have become excessively volatile since the mid-2000s – Brent has ranged from $ 132 in mid-2008 to $ 30 in January 2016, with large swings between the two. A spike below $ 81 in October 2018, as well as an $ 18 crash with Covid-19 did not last long.

This volatility was one of the reasons for the slowdown in global growth in the 2010s. Spillovers from losers to winners reduce net gains.

For example, while commodity-exporting countries were in dire straits after the 2014 oil crash, India’s gains fell short of expectations as slower global export growth moderated gains.

As a commodity produced, the price of oil depends on the supply-demand balance, inventories, oil production capacity and costs. If stocks are low, supply or demand shocks can cause large price fluctuations in the short term. Over time, rising prices reduce demand and increase supply.

As administrative price mechanisms have been abandoned in the physical market, deep and liquid futures markets, which bring together diverse viewpoints, have been developed to facilitate price discovery. These were to make the oil market more prospective. As a financial asset, the price of oil depends on the structure of the markets, expectations of oil fundamentals and the news impacting them. In the 1990s, investors began to take positions in commodity futures as part of a diversified portfolio.

As the figure shows, average price levels, as well as their volatility, increased sharply after 2000, indicating sustained deviations from fundamentals. This follows the US Commodity Futures Modernization Act, passed in 2000, which eased position limits, among other deregulations. Swap dealers, who facilitate over-the-counter investments in exchange-traded funds that track commodity indices, have been granted position limit exemptions. Subsequently, open interest in petroleum derivatives more than tripled and the number of traders doubled during the period 2004-08. Large-scale index investments took place as pension funds diversified their portfolios after the dotcom crash.

Deregulation has compounded the pro-cyclical waves of optimism or pessimism. Even oil producers consider oil futures to be too volatile. They prefer a price range around $ 60, which keeps production stable. The G20 should adopt uniform prudential regulation of the futures markets. Position limits could be reimposed.

The size of cycles decreased after 2015, as the entry of shale oil made supply response easier and faster. As OPEC’s market share declined, its pricing power also declined. But the cycles are still larger than they were before 2000.

The sharp drop due to the unprecedented shock of Covid-19, however, bankrupted many over-indebted shale oil producers. This made it easier for OPEC to regroup and regain market power with an agreement on production cuts.

However, as oil prices rise above $ 70, shale oil is once again very profitable. The restructuring had reduced the costs and lessons learned from a more disciplined expansion. It is dangerous for OPEC to allow oil prices to rise. Countries are tempted to break the cartel. Green substitutes are also getting a boost. Their recent meeting again shows the difficulty of reaching an agreement. Consuming countries, like China, will use up large stocks of oil built up when prices collapsed, reducing demand. If an agreement is reached on sanctions, large stocks of Iranian oil could be released into the market. When prices peaked in October 2018 at $ 81, the following month, they had fallen to $ 64. History could repeat itself this year.

It is unclear whether, in general, the recovery will fuel excessive demand and inflation, or whether supply chains will recover and secular stagnation will reappear. The markets seem to be approaching the idea that inflation will be temporary. US bond yields eased.

The domestic entanglement

Indian fuel taxes were sharply increased when oil prices fell in 2020, to recoup the blow to tax revenues from the foreclosure. But they have not been reversed although tax revenues and international oil prices have recovered.

Unfortunately, the Center and the States are competing for space, each fearing that one setback will allow the other to prevail. State taxes are imposed on value added and automatically increase with prices. The inclusion of energy in the GST offers a solution to this impasse.

Central State shares could be settled according to GST principles, to those set by the 15th Finance Commission (CF) on the basis of relative expenditure responsibilities. Even taxation at a luxury cap of 28 percent of the GST would result in a double-digit reduction in the price of fuel per liter. It would also reduce cascading cost-driven inflation and improve the competitiveness of exports and household consumption demand.

The graph shows that international fuel prices rise and fall. Indian prices continued to rise when administered. Even after being determined by the market, taxes tend to increase more when international prices fall, but less when prices rise. As a result, Indian fuel prices are increasing more than internationally.

The resulting persistence of domestic oil prices undermines flexible inflation targeting. Monetary policy can look through volatile commodity price shocks, as well-anchored inflation expectations limit transmission.

But if the policy makes the price increase permanent, inflation expectations cannot be anchored after a shock. The bullish click is supporting inflation. A second hike in wages and long-term bond rates will follow. If policy rates are forced to rise, so too will borrowing costs for central and state governments.

Back in the days when oil prices were administered, loud political battles made it difficult for domestic prices to rise when international prices rose. Now the oil marketing companies are smoothly changing prices with the international. The political protest, however, has shifted to imposed taxes.

This discretion allows arbitrary distortion of prices and resources to continue and imposes enormous indirect economic costs. Deleting it will allow you to focus on more interesting questions. But will governments be willing? The relentless scramble from the public for more hides the fact that states did not lose with the GST; The 14 percent compensation was generous and was decided on the then prevailing nominal income growth rates, but continued even when growth plunged. Now, in part as the loopholes are closed and the economy recovers, there is an increase in revenue to be shared.

Incentive reforms with the 15th Finance Committee are opening up new sources of revenue for the States. An increase in user fees and property taxes may be linked to better services.

Relations between the Center and the states were strained in part because the Constitution gave the Center more powers to keep the nation together. Co-operative federalism works if functions are distributed according to what is best performed at different levels.

It is clear that there is an advantage in centralizing certain functions – purchasing vaccines, borrowing, certain types of taxation, ensuring the homogeneity of public services, when the services must be provided locally.

States want the GST compensation to continue beyond the agreed date – it could be more modest and tied to the energy input into the GST. Revenue neutrality will come from the increased efficiency and resulting growth, complemented by an additional carbon tax, which would also encourage green alternatives and lower India’s oil bill. Domestic additions would then not worsen international oil shocks.

The author is Professor Emeritus, IGIDR. Views are personal

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Hdfc Bank CEO Says “Clear Focus on Digitization and Aim to Become Like a Fintech” Sat, 17 Jul 2021 14:12:00 +0000

On July 17, HDFC Bank Managing Director and CEO Sashidhar Jagdishan claimed that over the past 26 years, the lender has invested in technology well in advance and is clearly focused on digitization and improving productivity without laying off workers.

“Our goal is to become like a fintech,” he told HDFC Bank’s Annual General Meeting (AGM).

HDFC Bank MD added that the ban on credit card stocking has affected business and data shows the bank has lost market share in the past eight months.

He was confident, however, that the bank would rebound soon. “We were one of the latest entrants to the credit card business, we have become # 1 in the last 17 to 18 years,” he said.

Speaking about the tech ban, Jagdishan admitted that the regulator pulled the bank for good reason. “We noticed that our recovery time from outages did not meet global standards. Have a clear plan that is monitored at the board level for the technology transformation, ”he said at the AGM.

He added that the technological transformation will not happen overnight, but will take 12 to 15 months.

Commenting on the Mastercard ban, Jagdishan said the bank is protected from its impact. HDFC Bank’s open architecture allows it to easily pair with other card networks, he said.

Earlier today, HDFC Bank reported a 14.36% growth in consolidated net profit to Rs 7,922.09 crore. Its net profit on a stand-alone basis stood at Rs 7,729.64 crore in the June 2021 quarter, compared to Rs 6,658.62 crore in the previous year period and Rs 8,186.51 crore in the previous March quarter. The bank’s total income rose to Rs 36,771 crore in April-June 2021, up from Rs 34,453 crore in the period of the previous year.

“Both for Exercise 21 and throughout this exercise, we are still in an unprecedented period. People who had to move to meet clients were only allowed 40 days out of the first quarter of fiscal 22, ”Jagdishan said, hoping the bank will rebound reasonably well when normalcy returns.

Speaking about the companies’ monetization plans, he said it was too premature to think about monetizing HDFC Sec Ltd.

“HDB Financial Services is aimed at the segment that has been affected by the pandemic. The losses of HDB customers in the lower segment are 4 to 5 times what we normally see, ”he said at the AGM.

He added that although there are no monetization plans for HDB yet; the bank can try to find out the prices first. “We’re going to watch how HDB Financial Services recovers in a normal environment and then consider listing it,” he said.

(Edited by : Kanishka Sarkar)

First publication: STI

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New Land Rover Discovery arrives in India; Price starts at INR 88.06 Lakhs Thu, 15 Jul 2021 04:14:06 +0000

A seven-seater layout reminds everyone of a typical family SUV. But what if the brand tells you that the new Land Rover Discovery is even really capable off-road? Well, the kind of versatility it offers obviously makes it a perfect ride for Indian terrains and interestingly, that’s another reason Land Rover introduced the updated Discovery in India so early.

The price of the new range starts at Rs.88.06 Lakhs (ex-showroom, Delhi). However, to be precise, it will continue to offer three variants including – S, SE and HSE with separate prices for each variant coming soon. Want to know more about the new Land Rover Discovery? Here are the details just for you.


  • The Land Rover Discovery facelift has finally arrived in India.
  • It comes with a price starting at Rs.88.06 Lakh.
  • Be available in three variations including – S, SE and HSE.

New Land Rover Discovery

Exterior design

Image Source: Land Rover Media

Although this is only a facelift of the fifth-generation Discovery, there are still major revisions to the exterior. For starters, the new Discovery gets a revised front bumper with a wide air intake, a new pair of LED headlights with DRL, a reworked grille, dynamic turn signals and new side air vents, among others. Based on the new electronic vehicle architecture 2.0 (EVA 2.0), it will run on alloy wheels ranging from 19 to 22 inches depending on the choices made by customers.

At the rear, a new pair of LED headlights, a bumper, and the Discovery’s lopsided tailgate are there to retain the iconic design language.


It comes with a suitable 7-seater layout while still providing a large amount of space even for grown-ups. This is sufficient to justify the practicality. The updated Discovery dashboard features a multifunctional four-spoke steering wheel, 12.3-inch fully digital instrument panel, JLR’s latest 11.4-inch Pivi Pro infotainment system and reworked climate controls . Keeping the current situation in mind, Land Rover is here with a PM2.5 air ionizer for the Discovery 2021.

Image Source: Land Rover Media

Engine and powertrain

There is three. For starters, the P300 variant has a 2.0-liter four-cylinder petrol engine good for 300 hp and 400 Nm of maximum torque. The P360 variant, on the other hand, will get a 3.0-liter six-cylinder petrol engine that will produce 360 ​​hp and 500 Nm of torque.

Land Rover even introduced a 3.0-liter six-cylinder diesel engine for the D300 variant. The overall power of this unit is rated at 300HP with a maximum torque of 650Nm. All three are available with an 8-speed automatic transmission and a (fairly obvious) intelligent all-wheel drive system as standard. Interestingly, six-cylinder engines are available with 48V mild hybrid technology introduced to improve fuel efficiency.


A variety of options are there at this range. To name a few, the new Land Rover Discovery will take on some established German and Swedish rivals such as the Mercedes-Benz GLE, BMW X5, Audi Q7 and Volvo XC90. Want to know more about the GLE? Check out how it compares to 2021 Discovery below.

Mercedes-Benz GLE

Image source: Media Daimler

A family SUV but without such off-road capability, the Mercedes-Benz GLE sometimes looks like a typical luxury SUV. The most powerful variant of the GLE receives a 3.0-liter six-cylinder engine and in this way it remains similar to the recently launched Land Rover Discovery. As for the specs, it comes equipped with a panoramic sunroof, LED headlights, four-zone climate control and park assist to name a few.

2021 Land Rover Discovery Vs Mercedes-Benz GLE: at a glance

Land Rover Discovery 2021 Mercedes-Benz GLE
Engine 4-cylinder 2.0-liter petrol (P300)

3.0-liter six-cylinder petrol (P360)

3.0-liter six-cylinder diesel (D300)

2.0-liter four-cylinder diesel (300d)

3.0-liter six-cylinder gasoline (450)

3.0-liter six-cylinder diesel (400d)

Power 300HP (P300)

360HP (P360)

300HP (D300)

241HP (300d)

362 HP (450)

325HP (400d)

Couple 400Nm (P300)

500Nm (P360)

650Nm (D300)

500Nm (300d)

500Nm (450)

700Nm (400d)

Price (ex-showroom, Delhi) Starts at Rs.88.06 Lakhs Rs.77.24 Lakhs to Rs.1.25 Crores

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