Amazon.com Inc. on Thursday delivered its most profitable quarter ever, topping last year’s record holiday period, thanks to surging sales from its lucrative cloud-computing business.
Despite a persistent reputation as a profit miser, Amazon turned in its fourth straight moneymaking quarter and expanded margins in its core retail business, as well as the Amazon Web Services division that rents computing power to other companies.
Shares in the Seattle online retailer surged more than 12% after hours as the company’s results far outpaced analyst estimates.
Superlatives abound: Its 28% sales growth was the highest since the second quarter of 2012, while its operating margin of 3.7% was its best in more than five years.
Here is a question it would have seemed incredible to pose as recently as five years ago: are the liberal elites on the wrong side of history? Are they about to succumb to that favourite feature of university examination papers “a historical watershed”? Consider the accumulating evidence.
Last weekend, in the first round of the Austrian presidential election, Norbert Hofer, the candidate of the Freedom Party (FPO), led the poll with 36.4 per cent. The candidates of the governing coalition parties were in fourth and fifth place, each with a humiliating 11 per cent of the vote, and are eliminated from the second round where Hofer will face a run-off against Green candidate Alexander Van der Bellen.
The Austrian and EU establishment is now investing all its hopes in the supporters of the other candidates uniting to stop Hofer in the final round on 22 May. Since Van der Bellen’s platform is an open-doors policy for immigrants, while Hofer’s victory is attributed to the influx of 90,000 migrants into Austria in the past year, his appeal to voters may be less seductive than the establishment hopes.
This is just the latest shock for the European elites. Earlier this month the Dutch electorate, in a referendum, voted down a proposed treaty between the EU and Ukraine. That, of course, was the “wrong” result. For fear of serial embarrassment by the untutored public, the Dutch minister of the interior has already said he will “look more closely” at the referendum law. A Dutch minister with his finger in the dyke of public opinion is an accurate metaphor for the beleaguered condition of the political establishment. Geert Wilders’ PVV party is leading the polls in the Netherlands.
Marine Le Pen similarly heads the polls for next year’s presidential election in France. The insurgency is now ubiquitous. In Germany last month voters delivered a rebuff to Angela Merkel, provoked by her immigration policy, with Alternative für Deutschland (AfD) – a party that did not even exist four years ago – taking 24.4 per cent of the vote in Saxony-Anhalt and doing well everywhere else that was contested. In Poland and Hungary the victory over the discredited establishment has already been won, with the electorates voting into power, with overall majorities, governments that reject the Brussels agenda and instead reflect the national will.
In Britain, the mere fact the Leave campaign in the EU referendum seriously threatens Remain is a seismic change. The response from the threatened elites has been to unite against the perceived danger of the popular will prevailing. In the United States, the two surviving establishment (Ted Cruz now rates that label) candidates in the presidential race have formed an alliance to stop Donald Trump. How insulting is it to the voters of Oregon and New Mexico that Ted Cruz will cut campaigning for their support, while John Kasich will reciprocally snub Indiana?
Donald Trump has 845 delegates to Ted Cruz’s 559. Today is another Super Tuesday, with five states voting and 172 delegates available. Trump has poll leads ranging from 26 to 38 per cent across all five states. Even if, eventually, he rolls into the GOP convention 20 delegates short, if backroom deals were to cheat him of the nomination, even the National Guard could not contain the resulting explosion.
What is helicopter money and how does it work?
As I learned when I spoke about it in 2002, the imagery of “helicopter money” is off-putting to many people. But using unrealistic examples is often a useful way at getting at the essence of an issue.  The fact that no responsible government would ever literally drop money from the sky should not prevent us from exploring the logic of Friedman’s thought experiment, which was designed to show—in admittedly extreme terms—why governments should never have to give in to deflation.
In more prosaic and realistic terms, a “helicopter drop” of money is an expansionary fiscal policy—an increase in public spending or a tax cut—financed by a permanent increase in the money stock.  To get away from the fanciful imagery, for the rest of this post I will call such a policy a Money-Financed Fiscal Program, or MFFP.
To illustrate, imagine that the U.S. economy is operating well below potential and with below-target inflation, and monetary policy alone appears inadequate to address the problem. Assume that, in response, Congress approves a $100 billion one-time fiscal program, which consists of a $50 billion increase in public works spending and a $50 billion one-time tax rebate. In the first instance, this program raises the federal budget deficit by $100 billion. However, unlike standard fiscal programs, the increase in the deficit is not paid for by issuance of new government debt to the public. Instead, the Fed credits the Treasury with $100 billion in the Treasury’s “checking account” at the central bank, and those funds are used to pay for the new spending and the tax rebate. Alternatively and equivalently, the Treasury could issue $100 billion in debt, which the Fed agrees to purchase and hold indefinitely, rebating any interest received to the Treasury. In either case, the Fed must pledge that it will not reverse the effects of the MMFP on the money supply (but see below).
From a theoretical perspective, the appealing aspect of an MFFP is that it should influence the economy through a number of channels, making it extremely likely to be effective—even if existing government debt is already high and/or interest rates are zero or negative. In our example the channels would include:
Are we in a recession right now (April 2016)?
Are you in Brazil, Argentina, Russia or Greece? If so, then yes, you are in a recession. If you live in pretty much any other country, you are not. The US is growing at about 2 ½ %, Europe at about 1 ½ %. These are not stellar rates, but they are very far from a recession.
The fact that many of you are asking though, confirms one of my biggest worries: there is an incurable pessimism out there, and many of my colleagues in the economics profession have their share of responsibility. Consider this: over the last five years we have heard over and over that we are still in a recession, or on the brink of a new crisis. And yet, over this period, global growth has averaged 3.8% per year. The average over 1980-2006 was…3.5%. That’s right. We have been doing better than the historical average, all the while telling ourselves we were in stagnation, or a “new mediocre” as the IMF likes to call it.
I see a few explanations for this. Advanced economies are a bit weaker than they used to be, and most of the economic punditry reflects their point of view. And we still think of the 2003-07 record-growth period as “normal” – instead of admitting that it was a bubble.
We are not in a recession. Not in the world, not in the US. In the US, there are now about 4.5 million more people employed than at the peak before the crisis.
All this pessimism troubles me for two reasons. The first is that it holds back consumption and investment – so it holds back growth. The second is that by thinking that the bubble years were normal, we are not focusing on the right things. All the debate is on quantitative easing and negative interest rates as ways to create growth. But you can’t quantitatively ease your way to sustainable growth. You have to invest in infrastructure and education, create a strong business environment, innovate. It’s hard work. But it’s the only way. That is what we should be debating.
Indeed, most of today’s largest media outlets – that appear respectable to outsiders – supported the 1964 military coup that ushered in two decades of rightwing dictatorship and further enriched the nation’s oligarchs. This key historical event still casts a shadow over the country’s identity and politics. Those corporations – led by the multiple media arms of the Globo organisation –heralded that coup as a noble blow against a corrupt, democratically elected liberal government. Sound familiar?
For more than a year, those same media outlets have peddled a self-serving narrative: an angry citizenry, driven by fury over government corruption, rising against and demanding the overthrow of Brazil’s first female president, Dilma Rousseff, and her Workers’ party (PT). The world saw endless images of huge crowds of protesters in the streets, always an inspiring sight.
But what most outside Brazil did not see was that the country’s plutocratic media had spent months inciting those protests (while pretending merely to “cover” them). The protesters were not remotely representative of Brazil’s population. They were, instead, disproportionately white and wealthy: the very same people who have opposed the PT and its anti-poverty programmes for two decades.
Slowly, the outside world has begun to see past the pleasing, two-dimensional caricature manufactured by its domestic press, and to recognise who will be empowered once Rousseff is removed. It has now become clear that corruption is not the cause of the effort to oust Brazil’s twice-elected president; rather, corruption is merely the pretext.
Henri Waelbroeck seems to fit the popular image of the scientist transplanted into the world of high finance and hedge fund trading, the sort of stereotype found in books like "The Fear Index" by Robert Harris.
Waelbroeck, director of research at machine learning-enhanced trade execution system Portware, was previously a professor at the Institute of Nuclear Sciences at the National University of Mexico (UNAM). His areas of expertise include: complex systems science, quantum gravity theories, genetic algorithms, artificial neural networks, chaos theory.
The impression Waelbroeck conveys is one of precision. He explains that algorithms have grown in complexity since being introduced to the world of trading around 2000. This has made it increasingly difficult for traders to understand each vendor's full algorithm platform and how to optimally select an algorithm for each particular trade that comes in from a portfolio manager. Portware leverages artificial intelligence to help traders use execution algorithms and in some cases provides automated execution solutions that select the optimal control parameters on algorithms.
"Our work really has focused on two objectives: the first is to find an optimal execution schedule for each trade, and the second is to interact with the order flow more efficiently to avoid the harmful effects of high frequency trading (HFT)," Waelbroeck told IBTimes.
Speaking on April 21 during Hart Energy’s Refracturing: Cracking the Code breakfast seminar, experts from Baker Hughes, Weatherford, Fracknowledge and Eventure Global Technology agreed that refracturing has benefits. Potential also exists to learn more about which methods work best for certain reservoir conditions by testing concepts on some of the 8,000 or so drilled but uncompleted wells (DUCs) across North America.
However, low commodity prices have put refracturing programs in the Haynesville and Barnett on hold.
“We’re in a pricing environment where there is yet one more round of layoffs. Who’s going to go take risks like that?” asked Tim Leshchyshyn, president of Fracknowledge. “But if you actually look at the statistics, it’s amazing.”
Refracs account for less than 25% of the original drilling and completion costs, according to Leshchyshyn. Given oil is about half of what the industry wants it to be to thrive, there is inherently a 100% return on investment—with a quarter of the cost at one half of the return, he added. But, “The return on investment is sometimes 400%. This is above the incremental reserves. This is above net present values.”
The talk about refracturing opportunities and challenges came as companies continued to seek cost-efficiencies during a downturn brought on by a supply-demand imbalance. Refracturing instead of drilling could be among the options, considering costs associated with refracturing a well are about $1 million compared to between $6 million or $7 million to drill a new well.
What’s New? What Works?
Harsh Chowdhary, engineering manager for Eventure Global Technology, referred to a 2009 refrac job involving three wells from the same pad. Two wells used a chemical diverter and one used expandable lining. “When the refrac was done, the mechanical isolation well showed 40% higher production rates than the chemical diverter,” he said. “It is more costly than the other options, but I think experimentation and R&D is going to drive the technology.”