Time to pop some bubbles
There is a $1.5 Trillion industry selling us better weather. If this climate money bubble were to collapse, someone is going to make a motza-lot of money. (And it might as well be the skeptics who saw it coming, eh?) Would you like to help develop a hedge fund that can play that game, and take those bets, both to invest and divest, to hedge, donate, and fund research? Another task is to also grow a philanthropic hedge fund management company.*
One day soon, you may like the idea of short-selling overvalued renewables stocks, and doing other things that profit from cooler weather or collapsing subsidies — but which fund could you invest in to manage that? It’s a niche crying out to be filled. David and I liked this idea so much when we were approached by Chris Dawson two years ago, we got involved in developing Cool Futures (and obviously stand to benefit if this comes together, see the Disclosure at the end).
Cool Futures could change the game in so many ways. The vision here is much more than just profit making. It’s about being a player, doing due diligence, putting our money where our mouth is, and having the conviction to face the risks. Instead of standing on the sidelines and telling the world what’s wrong with the current system, it’s about taking steps to make it happen — to reallocate funds to better uses. What free market thinker wouldn’t be tempted?
I’m not a financial planner (read the disclaimer at the end). I’ll leave it to Chris Dawson to explain what the fund needs and why you might want to join the team in the same way James Delingpole has. Cool Futures already has a website, the legal structure, and a Cayman Islands hedge fund in place. There is and has been a lot going on behind the scenes.
When before in history was so much misallocated money pumped into schemes to slow storms and hold back the tide? When before was low cost energy and prosperity for ordinary people despised and attacked by the politically correct, by the self-anointed elites of the West — because they ‘know’ best?
Big science is often done best outside big government. For example, Craig Ventner stepped in to beat the government-run Human Genome Project at its own game. It is long past time private industry arrived to rescue climate science from the dismal rut that monopolistic funding created.
James Delingpole in The Spectator: “I’m putting my money where my mouth is”
— Jo
PS: For perspective and insight don’t miss Jaymez’s comment at #13
…
Guest Post by Chris Dawson
We’re hedging our bets on climate change, and on changing climate policy.
Hedge funds generate wealth from imbalances and economic inefficiencies. The man-made global warming scare distorts information flows, misallocates capital, and feeds corruption — and these burdens are becoming a big drag on western economies. The idea that mankind should try to change the global climate with expensive electricity is a luxury of the once rich West. As the budget screws tighten, the economic damage caused by the global warming industry will only hasten its own decline.
Every year about 1.5 trillion US dollars are directed to inefficient, subsidy-dependent businesses, at the expense of consumers and real market-driven enterprises. This destroys wealth and costs jobs.
A hedge fund manager has a special toolkit to tackle this waste. It includes advanced mathematical skills, often described as ‘rocket science’. (The same tools our team has applied to the science of climate change can also be applied to the positions taken and trades made.)
As the recognition spreads that increasing carbon dioxide has little effect on the global temperature, the manager of the Cool Futures hedge fund can redirect investment into useful market-driven areas, and can also support research aimed at better predicting the climate using factors previously ignored. Being ahead of government research, and the politically correct elite, will create its own opportunities for Cool Futures.
Like in the movie the Big Short (which was based on a true story, of a few people who in 2007 tried to warn everyone of the collapse of the artificially distorted US housing market), we are warning of the collapse of the artificial global warming industry. It will happen in a different way but, like in the movie, we plan to reap our rewards for being correct by using hedge fund techniques.
With all mainstream climate models predicting rapid warming due to increasing carbon dioxide, many industries will be totally unprepared if global cooling arrives instead. Research such as Dr Evans’ Notch Delay theory can be tested and explored in greater depth — better understanding of the timing and extent of any global cooling will allow Cool Futures to better target our investments, and enable people to better prepare for climate change.
Success breeds success. People will notice profits created through a real due diligence of the science, economics, and finance of climate change. Hopefully that will impact public policy development, potentially bringing about debates increasingly based on evidence, which should lead to better-informed policies.
Can a hedge fund run by philanthropic skeptics, while generating sufficient returns for its high net worth sophisticated investors, also act as a catalyst for the restoration of empirical science, enlightened education, and reasoned debate? We feel it can.
Right now we need seed funding, donations, and help for our impending launch. Readers can find out how to get involved through the crowd funding campaign. (Or click the logo on the right).
We believe that by using some of the financial returns of the Cool Futures Hedge Fund to aid the philanthropic efforts of the Hedge Fund Manager, the financial returns of the Fund will in turn be enhanced because of increasing public awareness of the paucity of the science case for warming and the desirability of cutting subsidies to the renewables industry.
Please explore these links, and ask any questions in the comments below.
* Our crowd funding website *
Stakeholder and interested party update
Cool Futures Funds Management website
UPDATE to make things simpler:
- There are three levels of participation going forward. And it is the first level that this (blog) post is primarily targeted at. The initial objective of raising $375,000 through crowd sourcing to properly set up the due diligence, audit, structure, marketing material, offer documents, marketing campaign etc.
- Treat the crowd funding stage as a donation. There are reward shares but their potential value doesn’t really change anything at this early stage. As James Delingpole said, “It cost me $75 for a single share in its management company, which I don’t think is going to make me rich. But it’s the principle that matters.”
- The crowd funding site is accessed through this link: https://www.gofundme.com/t72gmpng $36,000 has been raised thus far. But as with many crowd sourcing ventures, all you really get for the money you put in here is the warm fuzzy glow of satisfaction that you are helping establish what may be an effective financial tool to take advantage of climate alarmists’ positions and to be involved and informed as things happen. Donors will obviously also be automatically included in the progress of the fund establishment and as things progress will be sent information on investment in the fund when it is ready to accept applications.
- So, other than the one or two shares and other rewards for various levels of donation there will be no real financial gain by participating in the crowd funding. It is totally a goodwill gesture done, so you can actually do something tangible and ‘for a bit of fun’; and done to get a good seat on a long and enjoyable journey with like minded skeptics.
- Donors to the crowdfunding at $75 and above will get some shares in the management company given to them. It is important that these shares are given to you and that your contribution is a donation, because of the regulations around asking for investors. At $75 you get 1 Management Share. $250 gets you 1 (from the Bronze $75 level, plus 2 from the Gold level – therefore 3 shares. Platinum at $2,500 gets those 3 plus 10 = 13 Shares, and Diamond gets those 13 plus 25 shares = 38.
- So if you want to end up as a foundation shareholder then you only need to consider chucking some money into the crowd funding site as a donation to see if we can get this off the ground. This crowd funding stage is critical. The more resources made available from donations through the crowd funding campaign, the more likely the project has of succeeding in a timely manner.
Disclaimer
This is not an Information Memorandum or any other form of Offer Document.
This information solely is for the use of the person reading this post for the purpose of updating the reader as to progress in the establishment of the Cool Futures Hedge Fund.
This information therefore does not in any way constitute an offer to sell or a solicitation of an offer as this would require regulatory approval.
End Guest Post
In James Delingpole’s words “World’s First Anti-Global-Warming Hedge Fund Sticks It To The Greenies”
Jo Nova and David Evans have an obvious conflict of interest and may personally benefit in the long run. David is a non-executive Director, both are shareholders. In future they may also be paid advisors and or contractors. This is not a personal recommendation to anyone to invest, because Nova and Evans are not licensed or qualified to give investment advice. Therefore they accept no liability for any losses incurred by anyone choosing to donate or invest, now, or anytime in the future, in any product related to Cool Futures, or which is developed from these donations, or connected in any way to any Cool Futures entity. Read the risks, disclosures and disclaimers on the Cool Futures site. Get professional advice. All hedge funds are risky. Etc. You know the drill…
* The Hedge Fund itself is different from the Philanthropic Management Company. The aim of the hedge fund is, naturally, to be profitable. In that process it will spin off some philanthropic benefits as a byproduct — by funding some research, doing due diligence, issuing press releases, and merely being there filling a hole in the market. In contrast, the Management Company can have philanthropic aims as an end unto itself — as a different entity, it can fund research, say, with the pure aim of research for research’s sake, rather than research for purely profit’s sake.
Shame I can’t use PayPal to help the fund.
[It’s a shame we need to crowd fund for this project. If the claims that skeptics were being funded by big oil, or the fossil fuel lobby were true, $375,000 would be a drop in the ocean. Indeed the amount being raised through crowd funding for this project is chicken feed to the climate alarmists camp. It wouldn’t even cover the travel and accommodation bills for one of the IPCC head honchos. But hopefully the PayPal situation can be sorted.- Mod]
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Jim,
It is a great shame.
Unfortunately we are bound by the payment arrangements offered by the crowd funding site.
However, I am currently investing alternate arrangements to handle your Paypal donation situation through another site. There are some admin and accounting hurdles being looked at at the moment but I beleive we can resolve them.
Please watch this space.
Chris
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It’s also a shame the site doesn’t support Discover Card since that is the only credit card I carry anymore. Maybe you can figure out how to add that as well.
20
Crowd funding to set up the structure is reasonable and should go well.
This is not just about the financial benefits and kudos we can all reap in the years ahead, its all about saving lives. At the end of the 19th century 50 million people worldwide died from the effects of global cooling, history need not repeat itself.
Polishing up the crystal ball, agribusiness has a bright future.
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50 Million?
Read this:
Voluntary Human Extinction?
https://stream.org/voluntary-human-extinction/
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’50 Million?’
A ballpark figure.
That story is a good read and in addition I expect China will be importing labor by mid century.
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Tell ’em theyre dreaming…..
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I also think this is a good read and relevent :
https://stream.org/socialism-attacks-family-just-inventors-intended/
Most obviously, socialism undermines the family economically. Socialism is ineffective, unproductive, and impoverishing. It creates not economic prosperity but backwardness, and often genuine deprivation (see Venezuela). In that way alone, socialism adversely affects what sources as diverse as Pope Francis and Ronald Reagan have described as the “fundamental cell” of society: the family.
But surely socialism’s founders didn’t realize that their system just flat-out didn’t work, right? Actually, they believed that it did — and in one sense it does: It weakens families for the benefit of the state, exactly as it creators meant it to.
……..
Marx and Engels in The Communist Manifesto wrote of the “abolition of the family,” which even in 1848, they could flaunt as an “infamous proposal of the communists.” What, precisely, they meant by that is a complicated subject. But complexities aside, there is no question that efforts to redefine the family structure have been long at work, from Marx and Engels to sordid figures such as Vladimir Lenin, Leon Trotsky, Alexandra Kollontai, Margaret Sanger, Margaret Mead, Wilhelm Reich, Herbert Marcuse, Betty Friedan, Kate Millet, and assorted ‘60s New Left radicals from Bill Ayers and Bernardine Dohrn to Mark Rudd and Tom Hayden. They included groups ranging from the Bolsheviks to the Frankfurt School of cultural Marxists to the Planned Parenthood eugenics “progressives” to the Weather Underground and many more.
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I’m not so sure I would blame Venezuela’s problems on socialism. I think the outside interference has had far more affect than the “socialism” that Chavez instituted. Socialism isn’t communism and the opposite is true as well, just as vulture capitalism isn’t free market capitalism.
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I’m sure, Tom, the CIA forced Chavez’s family to siphon off billions of dollars from the country’s coffers for their own benefit at gunpoint. Yeah, right.
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Chavez worked by the Golden Rule.
“He who has all the gold, makes all the rules”.
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@toorightmate
Venezuela has been selling their gold and soon they will have none left.
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Tom O
I believe you could be correct — if Chavez had not used ‘Animal Farm’ as a blue-print for his version of political oppression things could have been so much worse.
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Hi OS. Have a read of Paul Johnson’s book “Intellectuals”, particularly the chapter on Karl Marx. It would seem that KM was only fit for a loony bin. He never bothered to check his facts, and was quite prone to changing any that didn’t suit him. He was constantly running out of money and blaming other people for this. He despised the rich and had a nasty streak a mile wide.
If Christians are supposed to model themselves on Christ, then it appears the garden variety socialist (Marxist Vulgaris) does much the same.
Cheers,
Speedy
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RE: llew jones: “voluntary human extinction”………..??
From zeroHedge: http://www.zerohedge.com/news/2016-06-16/austerity-kills-bank-greece-admits-greeks-health-deteriorating-life-expectancy-shrin
“Austerity Kills! Bank Of Greece Admits “Greeks’ Health Deteriorating, Life Expectancy Shrinks”
The solution is to get a credit rating around the AAA mark. Maybe then a crowd of banks will be falling over themselves to buy stock. These days, the survivors have a credit rating to borrow themselves onto the higher planes of financial existence.
A better credit rating would work for the greeks too. 🙂
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Typo the higher *plains of financial existence
But metaphorically, higher planes like and aeroplane suggests the same meaning. Maybe higher “planes” is the best choice of words?.
Well i feel content that it was the right word so the sentence might have had the right “content” either way.
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Caution to any person betting against political graft and corruption, the most powerful force in the universe.
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But it always comes to a crashing end eventually. You can only maintain artificial value for so long before real market forces take over. We say that with the sub-prime property boom in the US. And the Paulson hedge fund made their investors billions by betting against the boom.
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“eventually” can be a long time from now. Everyone knows what will happen, but it’s the timing that can’t be predicted.
I’m a risk-averse investor, and I would never bet against a corrupt thesis with government backing. How long have we been waiting now, for the mainstream to accept that the hoax is over, based on nothing more than reality, science and a belief in the integrity and goodwill of government?
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Pick companies carefully: in a unproductive industry there have already been good options for shorting. We don’t need to wait for the whole industry to come undone.
Renewables investment winding down in Europe
SunEdison files for bankruptcy protection
1 In 4 Wind Turbine Companies Went BUST In Last Two Years
Abengoa files for bankruptcy.
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case in point: fake chemical lab worker–http://www.thedailybeast.com/articles/2016/06/17/chemist-may-have-tainted-24-000-court-cases.html
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Agreed,
And I wish good luck with the fund but you’ll will be swimming in same polluted ocean as the sharks like Al Gore’s Generation Investment Management (GIM), and Kleiner Perkins Caufield & Byers (KPCB) — see http://greencorruption.blogspot.com/2013/01/obama-cronies-john-doerr-and-al-gore-of.html
And see how Mrs. Clinton is feeding off the US generosity here ->http://greencorruption.blogspot.co.uk/2016/03/mrs-clintons-convoluted-clean-crony.html
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Mrs Clinton is not satisfied with USA citizen’s generosity. She has also been aided by the corrupt governments of the Middle East AND the corrupt government of Rudd/Gillard/Rudd.
60
AGW is likely a large-scale scam based upon trying to make man responsible for climate change and therefore legally liable to cover large expenses of moving coastal cities inland. see some graphs of seal level changes: http://balance10.blogspot.com/2016/06/graphs-of-sea-levels-in-history.html
10
This isn’t necessarily a long term win/lose strategy.
There is a nice “carry” trade, where you can short various listed “climate change” indices that investment banks (like HSBC) construct.
In fact, if you were long the market and short, say, the HSBC Climate Change Index, you would have made a nice tidy sum over the last few years. Check it out here – it has been routinely under-performing the market:
http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F000000OC5
00
Well do I put my money where my mouth is?
I invested in 10Kw of solar panels on my home which I see as a great investment. You could see that when this scheme was put in place we would not avoid rising prices. So why miss out on free money from a 60cent rebate to pay for it and make a bit on the side. Now at the end of this year home owners in NSW will only get 5 or 6cents and power companies have been granted a 6% price increases.
So as a house holder what do I invest in?
The thing you would think is in battery storage. The problem is in the initial and set up costs and how long will it be before I get a return. As a rule of thumb even a small battery systems will take between 8 and 12 years to break even so it is a long term investment and only if I decide not to move house!
Do I spend a lot more and look at going off grid? The costs will be greater and I don’t have to give my excess power to companies for a pittance and for them to sell it on at a 400% mark up. Again I will have to be happy where I live and not move house.
So do I bank on electricity prices going through the roof to speed up my returns or will there be an outcry and lead to the end of this madness? And if there is, this hedge fund looks like a good investment.
So as with all investments I think I will invest in a range of products. I will change my light bulbs to a more efficient type, I will turn down or off my heating at night when I go to bed, I will try to drive a little slower and save fuel and fines, and I will invest in hedge funds that I would love see a return in. I think a lazy investment is not just an investment as such, it is a statement of what I believe to be the truth and a bit of fun on the side.
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Hmmmm, judging by the last paragraph you have chosen to live a poorer lifestyle. That’s one way of getting ready for where AGW is taking us.
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A presume you have written a letter of thanks to me for subsidising your installation AND subsidizing you handsomely for the piddling amount of power you put back into the grid (when the grid does not require it).
Ron, you may also spare a thought for the pensioners who now have less pension because your investment needed to be government subsidised.
You must also be pleased that every power bill in Australia is almost double what it should be.
Are you one of the GUYS who will contribute to the donkey vote on 2July?
106
Toorightmate. Why didn’t you take up the initial solar offer when the feed in tariff was around 66 cents and free installation was available for some smaller systems? If everyone had taken up the initial offer the scheme would have collapsed before it started. Don’t expect others to feel bad because you failed to act. We all understand that solar drives up prices for everybody but a little less for those, like me, who took up one of the early offers.
65
So, are you a morally superior person, as one green put it to me, or a greedy pig with your snout in the trough of goodies provided by others?
And yes, I went into solar reasonably early on because I couldn’t believe it would last so long, but I have never thought that it was a good thing, merely that it was a nonsense that would collapse soon. I still don’t think it is a good scheme (scam?) even though I am not short of getting my money back.
61
Nothing to do with moral superiority, but “greed”, or self interest, does come into it. We all know that grid connected solar is a useless and expensive technology, but I am not going to forgo a decent cut in my electricity bill just to be a member an alternate morally superior club.
63
Oink, Oink.
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Hay mate I am part of the Grey Army myself and I think I am reasonably smart and could see what was going to happen to the power prices with this scheme. If you want to spend extra money while you stand on the high moral ground, good on you but I have got to watch where I spend my money and if there is a way of saving a few cents you have no right to criticize me for it.
40
Ron,
Go off grid. Get yourself a good stock of used forklift lead-acid cells. These are normally changed when they can no long lift max. load as required in service but have loads of life left in them for less demanding uses like off grid systems.
You should be able to pick them up for scrap metal prices, and scrap batteries are worth a lot less than clean lead or copper.
Find a business which refurbishes forklifts. Usually they buy in S/H units, replace the batteries as a matter of practice and resell. Have a word with some insider who will pick out the better cells.
Charge them up *then* empty them and give a rinse and clean charge of acid. They are individual cells so you need 6 to get 12v or better 12 to get 24V stockage.
30
Big Science & Big Politics have shown them selves to be nothing less than High Priced “B&D” Prostitutes with the UN & the International Banks as their pimps.
They have lowered Logic & Reason & Age of Enlightenment into Snake Oil Spruiking on Sideshow Alley ( complete with dancing girls & pickpockets)
Finally somebody has to come up with a “safe word”
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Well done Chris, David and Jo. Playing them at their own game –I love it. I wish you every success. I hope this push is timed to be when David’s papers are published !( last I read I read it was to be in June)
It will be interesting to see the “arguments” by the alarmists and there will be plenty of disinformation spread around.
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Hi Ross,
I accidentally disliked your post!! Sorry about that. Was trying to press like of course!
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Sholto sums up this whole site-in three short phrases. Heavy stuff, buddy. (Feel free to press dislike. I think I’ll cope).
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I love it! Every transaction has at least 2 sides, why not be on the other one? Very clever stuff and considering it is obvious the warmists are guessing their butts off, why not take a punt?
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‘…why not take a punt?’
We have the inside running on a wet track and with accumulated knowledge its a better than even bet.
Take for example the unseasonable wet conditions in Australia at the moment, before La Nina ramps up. So you can envisage large floods at the end of the year and a pause in sea level rise.
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And remember the billions of dollars worth of desalination plants costing hundreds of millions of dollars to NOT use. All because Tim Flannery, the BOM, and CSIRO convinced our state Governments in 2007 that the drought was a permanent feature and the dams would never fill again. They should have spent the money on new flood mitigation dams and levees. Since 2007 we have had at least three pretty sever flood events on the Eastern seaboard which could have been mitigated had it not bean for the alarmists position. And most of our dams are at health levels and there are still plenty of winter rains to come.
There has to be opportunities for contrarian investment when climate alarmism is throwing so much money at their failed position.
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If you want to stop that stuff, you need to get the Libs back but returned to the true path of skepticism. You might like my new “election ad” video.
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Nice effort, but few of us live in the Wentworth electorate.
Voting informally appears to be the better option.
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Please, please, please ALA.
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Nope.
22
PM caught between a rock and a hard place on climate change.
http://www.huffingtonpost.com.au/2016/06/17/malcolms-makeover-group-hijacks-turnbull-campaign-posters-in-w/
20
It seems that when sunspots were few,
Some cereal crops poorly grew,
With the temperature drop,
Making wheat prices top,
And returns for investors accrue.
300
Sir William Herschel’s hypothesis to the Royal Society was that wheat prices are influenced by solar activity. They thought his idea ludicrous and rejected it.
Too bad.
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“Right now we need seed funding, donations, and help for our impending launch.”
This question posted on the Cool Futures web site is pertinent:
“Michael Cejnar
Great Idea, Beautiful site – congratulations.
But I am confused by the mix of financial info / science / ideology here for a time poor simpletons like me. After reading the voluminous material here for 10 minutes I am still not clear what the fund does and what it will do for me, if anything.
Is it A: 1. Invest in our fund, 2. we pool the money 3. We invest the money by shorting renewable energy companies, 4. We make a profit 5. You get a share 6. We keep a margin. I thought that’s what a hedge fund on the climate scam would do.
OR Is it B: 1. Donate here to set up the hedge fund itself 2. Once we reach $350k we can become a Hedge fund 3. Then we start inviting big investors 4. For your money you get discount on our fees if you come back and actually invest in the fund pool. 5. Then go to A:
OR Is it: 1. Invest in our company 2. We will do research on due diligence about climate for other hedge funds to use 3. You will feel good I suspect it’s 2? Oh and: 1. I don’t know what an ‘Alpha is for a Hedge fund is’ 2. I don’t get the metaphor of the drone – drones generally fly well, and the one in the picture look OK to fly, unlike climate models.”
My own reading of the Cool Futures web page leads me to believe that it is B, ie I could make a donation to set up a hedge fund so “sophisticated investors” can make a return. My investment return is to feel good.
Well sorry, this self funded retiree has enough trouble getting a real return on investments so I will pass!
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As this is to be a global hedge fund and as the jurisdictions from which we attract investment and into which the fund invests are numerous and varied, we find we are restricted in what we can say by the regulations of the most regulated jurisdictions. So instead of being able to say exactly what we wish to do as it effects you personally (because we can’t) we have to describe what we plan to do and to invite you to come on the journey with us and enjoy the ride – so that you can see for yourself and make decisions at whatever point in the journey where you feel comfortable.
In this first initial crowd funding ‘seed funding’ phase we are asking for donations. There are reward levels for these donations which can provide you with a share or two in the Fund Management Company along with a number of other rewards. Some of these may provide a pathway into hedge fund investment for some people in some jurisdictions.
The donated seed funding gathered through the crowd funding campaign, in addition to our own funds, so far has already led to the creation of the hedge fund and financed the application upgrading the small private hedge fund to a global mutual hedge fund. This phase of the crowd funding campaign is designed amongst many other things to fund the proper resolution of jurisdictional structural issues to enable as many interested people as possible to participate as much as possible in both the hedge fund and the hedge fund manager. In some jurisdictions feeder funds can pool large numbers of smaller sized investments to feed into the global fund.
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Fine words for a fine sentiment and I wish you all success.
However, Jo is lauding a product that some of the early respondents seem to believe is an investment. My initial reading led me also in that direction.
However on reading the information of your web page I find that only “sophisticated investors” are eligible to contact Cool Futures and small investors:
“Unfortunately, these options are not available for you as a smaller ‘unsophisticated’ investor (maybe one day), but Cool Futures has a unique approach to allow “everyday people” to be involved too, and we encourage you to do so to take a stand; to make a statement and to gain insight into the Knowledge of investment opportunities for you as they arise. We want you to be fully involved, even if only in a small way at this stage.”
I am happy to be described as an “unsophisticated” investor but I am not a gullible one and have been doing so long enough to know the devil is in the small print.
Now I am not suggesting that you are deliberately misleading people as you clearly state you “we are asking for donations” so that “these may provide a pathway into hedge fund investment for some people in some jurisdictions.”
As for the moral issue of whether it is fair to profit from other investors (whoever they may be) losses I won’t comment other than to acknowledge it’s a dog eat dog world out there!
As always caveat emptor.
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Hi GrahamP, I wrote a lengthy comment #13 below, which may address some of the issues you raise. However I agree with you that at the ‘donation’ crowdfunding level, there is unlikely to be a ‘return’ on your ‘investment. At $75 you get 1 Management Share. $250 gets you 1 (from the Bronze $75 level, plus 2 from the Gold level – therefore 3 shares. Platinum at $2,500 gets those 3 plus 10 = 13 Shares, and Diamond gets those 13 plus 25 shares = 38. This amount of shares, even if the company is successful is unlikey to cover your initial donation. But as James Delingpole said, “It cost me $75 for a single share in its management company, which I don’t think is going to make me rich. But it’s the principle that matters.” http://www.spectator.co.uk/2016/01/im-putting-my-money-where-my-mouth-is-and-betting-against-climate-change/
I feel the same way. I have been supporting the skeptic cause for many years, and I see this as another way to do so.
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Jaymez,
I have in the past contributed to Jo’s cause and will probably do so in the future, because we need a voice against “the greatest scam known to mankind” aka climate change etc.
If anyone wishes to make a donation to this hedge fund then so be it, it is your money.
But without full disclosure (see Analitik comment # 12) how much of your donation will line the pockets of others and how much will be effective in combating the real problem.
The real problem as I see it is the unrelenting crap fed to a well meaning but gullible public.
In my opinion a donation to Jo’s tip jar, so she can keep spreading the word, would make me feel better than donating to a hedge fund so they might possible make lots of $$$ shorting the market.
Graham
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GrahamP Thank you. I do appreciate your point (and support).
At the moment the donations to CoolFutures will be used to cover the necessary legal and regulatory costs of getting this off the ground. Perhaps I should have said that Chris Dawson — among other things — off his own bat, set up and ran the Lord Monckton Foundation here in Australia, so I’ve known him for the last five years and he’s put in his own money, done months and months of work unpaid, used his own initiative and paid his skeptical dues.
121
Hi Jo,
I hope I haven’t been misunderstood. I have no problem with the concept and if people wish to donate, well, good on them.
The additional information (which I only noticed after restarting my computer) explaining that it is a call for donations at this stage has hopefully dispelled any misconceptions about the product.
Going off on another tack: In some respects I hope the renewables market has a soft landing because everyone with a Superannuation Fund, ie every worker, has knowingly or unknowingly a stake in renewable energy, either directly where the fund has direct investments or through the Fund’s shareholdings in companies such as Origin Energy.
So while everyone seems happy to see the big investment houses in on these schemes suffer pain it is often the little bloke at the bottom of the financial food chain that ultimately suffers.
Enjoy your weekend, Graham
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Chris Dawson June 17, 2016 at 10:24 am
Fine thank you! I am willing to listen and learn! Just that joanne and David mention your fund is compelling! To learn more, I can tempt you with $2500, but not $10,000, for such an experiment! Give me enough so that if loosing that, I feel only foolish, but also learning, but never feeling Godawful damn stupid! From my PayPal or Schwab account I can do that! Make it so. I shall never use any credit card account for any financial speculation!
All the best! -will-
60
GrahmP
“My own reading of the Cool Futures web page leads me to believe that it is B, ie I could make a donation to set up a hedge fund so “sophisticated investors” can make a return. My investment return is to feel good.”
I think you have it pegged! I have invested in Toshiba (Westinghouse) and their AP1000 reactor for the cooling futures!
All the best! -will-
60
Dear Will,
As mentioned at comment 1.1 in reply to Jim –
“Unfortunately we are bound by the payment arrangements offered by the crowd funding site.
However, I am currently investing alternate arrangements to handle your Paypal donation situation through another site. There are some admin and accounting hurdles being looked at at the moment but I beleive we can resolve them.
Please watch this space.”
Chris
50
Chris Dawson June 17, 2016 at 5:04 pm
“Please watch this space.”
OK,
By now you must have some ideas of what you intend. I wish no sales pitch, only your intent (beyond your profit from your investment in time and money).
Where is such a fund to be located (governed)? 1) Is your intent to create a true “mutual hedge fund”, meaning modest very long term ROI ‘over cost’ in units of some fiat currency? Which currency? 2) Is your intent more like Monckton’s Texas Talent Bank, where if you invest the current value of one pair of fine hand made horsehide leather mens dress shoes, in three years perhaps, one can actually still purchase “one pair of fine hand made horsehide leather mens dress shoes”, plus three sets of shoelaces for such, independent of any fiat currency? 3) Where oh where, besides Switzerland, might such a thing be possible? Thanks!
All the best! -will-
20
Hydro Tassie also wants some seedfunding.
Theirs is for Potassium Iodide seed.
30
toorightmate June 18, 2016 at 10:48 pm
“Hydro Tassie also wants some seedfunding.
Theirs is for Potassium Iodide seed.”
Feeding Hydro-Tassie’s managers much Potassium Chloride, may discourage them from wanting to seed, so much.
30
This is not a new strategy. We all know Al Gore’s position on climate scepticism. There is a legend that when Richard Sandor and Barak Obama’s Chicago carbon trading market collapsed due to short selling in 2012, Gore took out around a billion dollars from his short selling activities.
So they say.
102
??? predicting a cool future!
15 Jun: KPBS: Susan Murphy: Scientists Gather In San Diego To Talk About Global Warming
Scientists from San Diego and a dozen countries around the world are gathered at the University of San Diego this week to share their latest research. Among some of the major topics at the American Association for the Advancement of Science conference are climate change, heat waves and ocean acidification.
Geophysicist Peter Ward, who worked for the U.S. Geological Survey for nearly three decades, discussed warming global temperatures during his Wednesday session.
“There’s a very interesting correlation between warming and volcanism at the end of the last ice age,” Ward said.
He said the past two years of record warmth can be attributed to more than greenhouse gases. Ward blames ozone depletion caused by the Bardarbunga volcano eruption in Iceland in September 2014.
“It was the biggest flow of basalt that’s been observed since 1783,” Ward said. “Now that’s good news, because if it’s Baroarbunga that’s causing the warming, next year we can expect it to be getting cooler again.”
http://www.kpbs.org/news/2016/jun/15/scientists-gather-san-diego-talk-global-warming/
70
Good idea and with the stupid targets just set by the Victorian State Government, I’m very enthusiastic about shorting the renewables industry + associated parasites (any company with Elon Musk involvement coming screaming to the fore).
I am concerned about the hedge fund structure, however, as these traditionally have very high management fees and no liability requirement for the directors. A mutual fund (where the directors’ a$$e$ are on also the line) would make the concept more appealing.
The “special toolkit” including “advanced mathematical skills” is also a concern as these make the management process opaque as per the climate science that it is related to in the text. And I distrust modelling on chaotic, interrelated systems as these are impossibly complex in the breakdown conditions that are being anticipated, especially if the models assume uncorrelated, gaussian distribution of events as is the standard practice.
80
Despite knowing, or ignoring all this, the crowd funding for solar roadways has raised over $2.2m to date.
I use that to contrast to this project. Firstly we know that hedge funds work and can be used to take positions in certain markets or market segments. In fact Business Insider recently did an article on the top 7 best performing hedge funds.
Collectively, these titans have made their investors net gains of $199.5 billion since they began their funds. Last year, they raked in $5.1 billion as a group. Two of the top fund managers had a losing year in 2015.
For example Paulson & Co became famous for the 2007 bet against subprime housing; it made John Paulson and his investors billions. They took a position in a bubble market and reaped big returns. Other funds have taken positions in internet based companies, Pharmaceuticals, technology, and there is even a fund that is betting on renewables. The two top funds focus on macro-economic factors taking bets on currencies and the economic growth of regions and countries.
The point is Hedge Funds, unlike solar roadways, are a proven investment vehicle. But they are expensive to establish to meet all the regulatory requirements, and to get out into the market place to attract investors. Of course the reason not a single financial institution or entrepreneur has set up a hedge fund to take advantage of all the money being poured into the climate scam is that it would effectively shut down all their other business activities. We have seen how skeptical scientists have been dumped and boycotted by the left wing academic institutions.
The same thing happens to businesses and individuals if they dare to indicate their climate skepticism. We saw the Australian Government try to give $4m to the University of WA to establish a Climate Policy Centre under the auspices of Bjorn Lomborg and they caved in to pressure from climate alarmists. When Flinders University started considering the possibility of being involved there was an uproar and an open letter signed by 6662 students, teachers and alumni rejected the proposal.
Meanwhile the push (demand) for Universities, Financial Institutions, Charities, Religious Groups and Governments, Industry Superannuation funds and so on to divest interests in the fossil fuel industry has gained momentum. And many have done so or are in the process of doing so.
The ‘divest movement‘ claims that $3.4 Trillion has already been divested by 531 institutions and 50,000 individuals have divested $5.2 billion. They provide a list of the organisations and institutions that have divested.
In the meantime of course we are seeing Governments spending billions to provide grants and subsidies to inefficient and unreliable renewable investment schemes. The corporations that rely on the tax payer subsidies would collapse without them.
For me, all I see in the divest movement and tax payer subsidies is a great opportunity for contrarians, that is climate skeptics. This house of cards that the climate alarmists have created has to collapse at some stage. We are actually seeing the start of it now. Governments are crab walking away from feed in tariff commitments and renewable build programmes, they are simply too expensive. See also here, here, and here.
We have also seen countries who were at the forefront of the Kyoto Protocol fail to re-sign and in many cases are increasing their use of fossil fuels including Germany, Japan, South Korea.
Other countries will follow when the economic realities of fossil fuels vs renewables starts to bite and when more and more of the population realises they have been had by the climate scares. We also know that there is no way developing countries will be denied access to cheap fossil fuels including coal, oil and gas. China, India, South East Asia, South American and African countries will all contribute to a rising demand for fossil fuels.
All this tells me that there has to be an opportunity for a hedge fund to take advantage of the current artificial market conditions. But it has to be set up by an entity which has no other business interests which can be held to ransom by the regressive left who would be demonstrating on their door step and calling for boycotts. That is why I really want this project to get off the ground and raising $375,000 from educated and sympathetic climate skeptics should not be a problem, when a crazy venture like solar roads, with no proven abilities, can raise over $2.2m.
I have gone into the crowd funding at a relatively high level. But I have been giving money to climate skeptic causes, including this and other blogs for years. So the amount pales in comparison, and at least I will have some shares in the eventual management company, even if they are of token value. I hope others feel like me and get involved in the crowd funding here, https://www.gofundme.com/t72gmpng
Hopefully they will raise sufficient funds to get the bones of the hedge fund set up, and to attract valuable seed investors so they can issue offers to invest and get the ball rolling. I say good luck to them.
362
For every dollar ‘divested’ someone else’s dollar is invested.
This may make certain groups feel like they are ‘doing something for the cause’ but does not make a toss of difference to the companies involved. Any selling that is based on political convictions and now on financial reality will just provided opportunities for those of opposite political convictions or with no axe to grind to make a profit. It’s totally naive.
There may be investments to be made there, though note that it is not just solar PV companies going to the wall, Peabody recently filed for bankruptcy too.
None of this relates to short selling which works the other way around. You need to identify which companies are going to drop markedly in the short term future. Note the short.
Since the scenario is renewables will fail as subsidies are pulled the means double-guessing exactly when policy decisions will be made and buying at the right time. Even though the writing is on the wall, it is going to be pretty much impossible to know just when political will will change with enough accuracy to make strategic investments.
I would say making politically motivated investments is likely to backfire which ever political bent you try to apply.
Since David and Jo seem unable to realise that the whole idea of a notch filter is based on a faulty Fourier analysis ( the input was not broad spectrum ) and that such a climate response is physically improbable, I’m not sure I’d be putting my money on their judgements in the world of finance.
However, I do commend the lateral thinking. More of this is needed.
10
Wow, now I know exactly what I want for Fathers Day!
I have often thought about this aspect of the debate and I always understood that there is money to be made here so here is my chance to formally declare my allegiance and make a bit of money to support my family and others that stick their neck out to for this cause.
Thanks for making me aware of this opportunity!
60
It should work, even if it takes a long time. The problem might be that the green blob has grown too big to fail, no matter how bad they do.
70
I suggest that “too big to fail” assures that the eventual fail will occur, be much larger than when it was “too big to fail”, and take the many hangers on down with them.
The boom bust cycle is driven by irrational fads and unfounded assumptions. When “everyone” is talking about “it” and trying to make a quick effortless fortune from “it” (whatever it is), the bubble will soon burst. Eventually, there will be no taxpayer pockets to pick nor anyone willing to buy unsecured debt, then the whole enterprise collapses like a giant over aged puffball: poof. There will be nothing left but an economy that is little more than a wisp of smoke and a pile of broken mirrors.
80
And so it’s a gamble.
If you’re a chess player you know what a gambit is. You give up something to get something else. You take a bold risk because the reward can be great. You hope you’re right and the game ends in checkmate of your opponent. But you prepare at the outset to congratulate that opponent on his victory.
Such is life. Just don’t play with money you can’t afford to lose.
90
Yes. Don’t play with money you can’t afford to lose. With limited income, rapidly raising prices, a very low probability of increasing my limited income, and a good chance of living another decade or so, I am not sure I would want to risk as much as $1.95.
I suspect I have about the same odds of winning with the proposed hedge fund as I do with convincing people to give up their “irrational fads and unfounded assumptions” that caused the situation in the first place. Considering my success rate with the latter approach over the past several decades, my chances are between very slim and none.
90
Unfortunately our Governments are playing with money they can’t afford to lose. In fact not even with that, as all Western countries are running deficits. The money they spend supporting and subsidising the climate scam, is all borrowings which the citizens will have to repay, with interest, at some undetermined time.
80
Sorry to suggest that change but all that money is coming out of our pockets, not the government’s. Governments have no money, they only have our money to play with.
In a very real sense, we cannot afford our governments and if we could act more wisely, we would throw out a major part of the senators, representatives, MPs and any other title that applies and put in new people. But the average voter does not understand how things are working against them so it never happens. Trump is the first real citizen revolt I’ve ever seen. And I’m doubtful of his ability to pull it off.
40
Roy,
It just might be that the “average voter” is starting to wake up to the current political situation.
First in the USA with the Trump phenomenon and now in Britain with Brexit.
The government of Britain from Bruxelles may be about to end and if this does happen it will be a good sign that democracy still works.
I know how you feel about “the Donald” but if he gets in it will be a big wakeup call to both major parties to get back to a more acceptable style of government.
People have had enough of self serving politicians.
Regardless of the outcome of our election here in two weeks, the Brexit vote next week and the Presidential election for the USA, you can be sure that the voters are more alert to to the idea that politicians need tighter control over their actions and spending.
Here’s hoping that the Voters in all three countries have a big win in their respective elections.
KK
20
KK,
I have no doubt at all that Trump would be a better president than Hillary.
I hope Brexit comes out with England the winner. Being your own master is without a doubt the better situation. Even if you make mistakes, at least they’re your mistakes, not someone else’s and you have the ability to fix the mistake the easiest way possible instead if fighting with an absentee landlord.
Your election there in Oz is less clear to me. I don’t get enough time to do the research on Australian politics. But my hope is that you end up with the best outcome.
I’ve never seen times as troubled as we have now. I can’t get a good grip on voter knowledge anywhere but here and it’s still a bad looking picture. What can you say when an unashamed socialist makes such a good showing in the primaries in America, the home of not only the free and the brave but for over 200 years, the home of the self sufficient? What have we done t ourselves?
30
Saw The Donald talking on TV tonight.
He is disgusting.
But, The Republicans are having conniptions over his candidature and don’t know how to fix it!!
00
I will be putting in what I can afford, and holding some funds to put in when the fund becomes a reality. The problem is that it may take too long to get off the ground and rolling. I say this mostly based on the “nature of war” and its overall affects. We seem to be coming too close to a real shooting war because of the way some countries are dealing with the Syrian situation. Should “the big one” break out, we won’t see anyone switching FROM carbon based fuels at all since the energy requirement will go up to “play the game of war.”
For the record I believe in national sovereignty, and believe that nationalism is a positive force, driving the competitive nature of people to outdo their competition. But I will definitely be spending time this weekend going over the funding website. I wish no one a loss, but if the fat cats sticking it to all the “little people” could get a little back, well, I’ll look away so I don’t have to see it, all the while, smiling.
80
Careful of snakes in the hedge!
41
The safe thing with the snakes in the hedge is not to put your hands or feet any place you can’t see.
That is the rule I have followed that kept me safe from snakes in the Mohave Desert for the past 35 years. Even at that, I have a 3 foot snake living in a hole in the tree next to my drive way and a 4 foot snake living in my back lot somewhere. As long as they eat the excess varmints and leave me alone, I will leave them alone.
A snake in the hedge (fund) might be a bit more of a challenge than that.
80
Lionell
Here in Newcastle I have occasionally gone through snake areas using a technique that may have been effective. You never know until you’ve been hit. Whenever I absolutely have to go into long grass I stamp my feet to warn the snakes.
The theory is, they can feel the vibration and move.
KK
10
I stamped my Blundstone boots near a tiger snake and it took no notice whatsoever. It ‘licked’ the air and then made its leisurely way along the shed to a small paddock. The next morning we heard a huge racket from the kookaburras and never saw that one again. If I can I avoid walking through long grass but carry a mobile ‘phone and wrap up well, keeping my eyes skinned as I go.
20
KinkyKeith June 19, 2016 at 8:09 am
“LionellHere in Newcastle I have occasionally gone through snake areas using a technique that may have been effective. You never know until you’ve been hit. Whenever I absolutely have to go into long grass I stamp my feet to warn the snakes.
The theory is, they can feel the vibration and move.”
My kitten ‘Shadow’ brings to me every small creature she may catch, for approval and much petting upon. ‘As Konrad says she has me very well trained’! How do kittens know what parts to eat, and what parts not to eat, then the final scorn “wheres ma food”? Kittens are so much nicer than earthlings!!
All the best! -will-
00
Will
Unfortunately I couldn’t relate to cats but like dogs.
My present pet is a Magpie which likes to sing and can take food from my hand with extraordinary accuracy.
KK
00
Stamping your feet in grass should help. Riding horseback is better. The horses will sense the snakes before you can see them and take you away quite rapidly. You do need to stay with your horse otherwise you land in the lap of the snake.
I avoid walking through tall grass because of the two rather nasty venomous snakes around here. The Diamond Back and Mojave Green Rattler. The Mojave Green is both hemotoxic and neurotoxic while the Diamond Back is only neurotoxic.
The two snakes I mentioned are nonvenomous California Glossy Snakes (Arizona elegans accidentalis).
10
Lionel, mostly around Newcastle we have red bellied black snakes. They’re poisonous but generally prefer to run away. Brown snakes are rare and are something else. Unpredictable , keep away.
I have a funny story about the blind guy and snakes but I’ll leave it for later.
KK
10
Here in the U.S. hedge funds have a bad name to many people. They’re too closely associated with the meltdown that lost so many people a lot more money than they could afford to lose.
But I rather like the idea of sticking it to the warmist camp with something of our own that could easily make a lot of money when the climate change bubble finally bursts. If I could afford to put in an amount of money that would be worthwhile to the cause and yet losing it wouldn’t hurt me, I’d be first in line. But it’s a gamble for me and I can no longer afford to gamble since I retired. We’re sound and I have to keep it that way. But if smaller donations are worthwhile I may do that.
One way or the other, it’s for sure that I would like to see this work, big time. 🙂
81
And daydreaming on a little, it would be nice to be able to bankrupt the UN too. Fat chance probably. But I wouldn’t cry if it happened.
110
Roy”WE” can make a start by getting rid of these”Lying,Do Nothing,Career Politicians”The ones who don’t belong to the Libs,Labour,or the Greens.Put them last on your ballot paper.
20
I am not sure how a hedge fund can protect your wealth, let alone add to it, when the final collapse happens.
With an economy falling to the low energy ground state of barter (home grown produce, goods, and services), a pile of money or even gold will be without significant buying power. Largely because there will be hardly anything to buy.
A hedge fund works only if whatever was bought low has a recovered high energy economy into which to sell high.
51
The hedge fund could enter a contract to purchase shares in the future at a lower price than they are trading currently. A fund manager might like to take that contract to put a floor on their stock prices and because they think the future price could be even lower than the contract price.
For instance consider the coal sector. It is common knowledge that the coal sector is struggling. What investors see at the moment is companies like Peabody Energy which filed for bankruptcy protection in April. Investors will consider that just another red flag for the coal sector. Of the four largest US coal producers, three have now filed for bankruptcy protection, including Peabody.
That shows how difficult the coal sector is currently.
Australia’s coal miners, including the likes of BHP Billiton Limited (ASX: BHP), South32 Ltd (ASX: S32), Rio Tinto Limited (ASX: RIO) and solely coal companies Whitehaven Coal Limited (ASX: WHC) and New Hope Corporation (ASX: NHC), potentially face many years of struggle with their coal mining operations.
Peabody failed to make interest payments on its debt and warned that it was likely unable to continue as a going concern prior to entering bankruptcy protection. The miner has more than US$10 billion in debts.
Shares in Peabody had crashed 99.8% over the past 5 years, thanks to sliding coal prices, and last traded at US$2.06. At its peak in 2008, the company had a market cap of around US$20 billion, but yesterday, Peabody’s market cap was just US$37 million.
A smart hedge fund manager who believes, based on David Evan’s Notch Delay Theory that the world will start cooling between 2017 – 2020, will know if that happens then surely the climate scare will finally come crashing down. Countries will walk away from their emission reduction commitments and will stop building costly and inefficient solar and wind power farms and will go back to coal and gas as the cheapest alternative.
With a global economic recovery starting to wind up, especially with India and some South American and Asian countries representing a couple of billion people, wanting to catch up with China, there would be a rush for cheap energy alternatives and with no CO2 emission restrictions. It wouldn’t take stocks like Peabody to return to it’s former glory to represent huge returns from today’s, value. Remember Peabody stocks have fallen 99.8%. If it only recovered to half its past peak value, that would represent a return of 25,000% for someone locking in today’s prices. [E.G. If the share price had been $100.00 and fallen by 99.8%, the current value would be $0.20. If the price recovered to $50.00, that would be a 25,000% increase on today’s dollars.
But of course that dream scenario would also provide the Hedge fund manager the opportunity to sell short Solar and Wind stocks which will be worth a fraction of what they are currently worth under the Government subsidy schemes they profit from.
So when the ‘final collapse’ of the climate scam happens, even if it happens slowly, there will be money to be made by a hedge fund manager who is invested expecting the decline.
90
Coal has boomed and busted in decades past. Coal companies have appeared and disappeared for decades.
Coal does it with nearly as much volatility as copper (silver, gold, tin, lead, zinc, etc, etc).
But, Hey, let’s not spoil all the talk about sensationalism with a short dissertation on commodity cycles.
20
Also a good perspective but a little “short”.
More detail about the fall of Peabody would have been interesting. Did the Global Warming army take them down or was it just “bad management” or just the routine stripping and hiding company assets before dumping it?
🙂
KK
11
Do you mean – just like BHP did with steel?
10
Great outline Jaymez.
KK
10
Yes, there is that gambit called “selling short”. The strategy is essentially to create an artificial glut of something by promising something you don’t have, doesn’t exist, and you can’t make at a lower price in the future.
The other side of that strategy is creating an artificial shortage by “cornering the market”. You buy all of something at whatever a price, withhold it from the market, and expect to profit from the fact of the shortage.
What breaks both strategies is the fact the market is a dynamic thing that constantly creates alternatives. There is a great likely hood the market will have moved past your artificial gluts and shortages and you will be holding an empty bag. If the market ceases to exist, even the empty bag has no trade value.
A hedge is useful only in the case that you are a producer of a commodity. You wish to “make money” from the added value you create but, to do that, you need to protect yourself from variations in the cost of the inputs of your production. Hedging those things assures a known price for the supplies you need.
Further, since you are a producer using the hedged supplies, you can take delivery, make your product and sell the goods to the market for an honest profit earned by actually creating something the market wants and needs for a price it is willing to pay.
What a novel idea. Actually making something the market wants, needs, and is willing to pay a price for it that is greater than it cost you to make it. Apparently that idea is obsolete. The modern way is to shuffle paper, pretend to be busy, influence the politicians, and take money we didn’t earn for something we didn’t do from others who are doing exactly the same thing. Then we wonder why the world is in such a mess.
51
Lionell, you are conflating hedging strategies with hedged funds. I know they have similar names but hedge funds are much more than what you have described.
Also you have have characterised selling short unfairly. If you have a negative position on a particular stock, commodity or whatever, you can’t make money by holding it, because by definition, you think its value is going to decline. The only way you can make money is by agreeing to sell some stocks, commodities etc at a future time, at a higher price than you think it will be. But to do this, you must have other people, manufacturers who need the commodity for production for example, who want to hedge the value of their inputs by locking in a future price now. So they take the other side of the contract. Then before or at the time of settlement, if the actual price has fallen below the agreed contract price then they can be acquired cheaply to settle the contract, and the short seller makes a profit. The people on the other side of the transaction still got to hedge their position, it just turns out they didn’t need to.
If they can, gold producers almost always pre-sell the gold they are yet to produce at a price which will be profitable for them. If it turns out the gold price rises beyond that, then yes they could have made more money, but if it turns out the price of gold fell, then they have a bonus.
As you note farmers do the same thing, but sometimes that works out disastrously for them if their crop suffers before harvest and they have no produce to deliver. At other times, a bumper harvest all round may see the produce prices fall, but farmers who locked in a futures contract at a higher price will be beaming.
Futures and hedging have a very important place in our economy and shouldn’t be demonised. Sure some players are trading just to to make money, and are not part of the producer/user cycle, but they are making a market so that the producers and users can hedge their positions.
Meany moons ago I used to get involved in the Cocoa Beans, cocoa butter/powder, milk powder and lecithin trading for a major confectionery company. It was an important function to ensure we had sufficient inputs to meet our manufacturing demand at a price which would ensure profitability. At the same time if we found that demand hadn’t been as expected and we had excess purchase contracts we could attempt to sell them at a profit. It is just a reality for large manufacturers whose worst nightmare is to be without the inputs to make their product.
The days of ‘cornering the market’ to cause a price hike, aren’t that far behind us, but that is practised by Oligopolies such as OPEC, who have had their effectiveness trimmed by oil and gas production by Russia, the US, Canada and other countries since the 70’s and 80’s. Of course the George Soros Quantum fund made incredible bets with the German Mark immediately following the German reunification, and the British Pound and shares shortly after, but in neither instance could it be claimed they ‘cornered the market’ they simply took a contrarian position to the market using currency and stock futures.
There was the famous Hunt Bros attempt to corner the silver market but that went awry when US regulators did what regulators are able to do around the world, and stepped in to stop the market manipulation. The Hunts lost billions.
I’m afraid Hollywood has got a lot to answer for in giving the impression it is easy to manipulate the market by mass buying or selling. Most market manipulation is achieved illegally by companies over baking their successes [Enron], or by insiders taking advantage of information not available to the market. Both are illegal.
The best investors simply do well by investing counter cyclically, and by taking well researched positions in areas which are currently over or under valued. And they can do this with physical stocks or derivatives.
That is the plan of the Cool Futures Hedge Fund.
40
You can call a frog a prince but that does not make the frog a prince.
There is a fundamental principle of systems: a system IS what it does. What it is called can be and often is quite contrary to what it is.
If a so called Hedge Fund does not engage in hedging strategies, it is falsely labeled as a hedge fund. However, when you attempt to deal with things that don’t exist, don’t have, can’t make, and promises that others would deliver who haven’t agreed to deliver: [snip, 18C applies per Australian law].
This is why I focus on the hedging strategies and their vulnerabilities rather than relying on the name “Hedge Fund” to be meaningful. Real hedging is very dependent upon the existence of a market. The duration and scale of which is very dependent upon that market being a high energy one. Even your post implies as much.
How then can the drive to a low energy low volume market be hedged? It cannot because that drive is in the process of destroying the very thing upon which hedging is based. Hence, in this case, you can call something a “hedge fund” but it is inoperative with respect to actual hedging.
In simple terms:
1. A name does not make the thing.
2. A thing is what it does and be used for.
3. Reality and the operative context puts strict
limits upon what the thing can do or be used for.
4. There is no escape clause from the above.
[Editorial discretion was applied. If this is too strict an application of the rules I apologize. But we don’t take the chance and wait to find out later.] AZ
21
Now you are just being difficult Lionell. If we applied your restrictions, most of the financial system wouldn’t exist and even commodity markets like the Gold market exist. You may think that is a good think, but the fact is they do exist, so there is no sense pretending they don’t.
At my first response I wrote a hedge fund can invest in anything, actual stocks, or derivatives taking hedge funds. Being called a hedge fund does not restrict it solely to hedging strategies. But it’s focus is usually to be contrarian and this is what the Cool Futures hedge fund is all about. No esoteric argument will change that.
20
Why then is it called a hedge fund when it invests in things that have nothing to do with hedging? What a thing is, what it does, and what it can be used for is vastly more important than what it is called. However, if a thing is called what it isn’t, how can you validly pretend that is anything but misrepresentation? Why not call it an investment fund then simply invest in whatever?
I have no problem with an enterprise investing in anything at all, as long as it is their money they are investing or have voluntary and informed permission from those who’s money it is.
The ONLY restriction I would place upon them is that they not violate the rights of others and communicate truthfully. In other words, don’t present yourself for what you aren’t. Then those who willingly invest with you have no right to complain or to seek redress of grievances if you continue to be what you are.
Do you have a problem with honesty and transparency in business transactions? If so, I am forewarned not to invest according to your advice. Your word cannot be relied upon to be safe to follow.
01
Lionell they are called a ‘hedge’ fund because they CAN take hedged positions which standard ‘mutual’ or ‘managed’ funds can not. Why doesn’t the name reflect exactly what they can do? Well you are just being pedantic. It would be ridiculous to call it a ‘Hedge and non-hedge managed fund’, or a ‘Shares, derivatives and cash fund’.
For example every managed fund has some component always in cash, to meet redemptions, or representing funds just invested. Just because say a managed share fund, has some money in cash, should it be called a managed ‘cash and share fund’?
Managed funds are usually designated by their primary purpose. ‘International Share Fund’, ‘S&P ASX100 Index fund’, ‘Property fund’ (which may hold cash, property securities and/or real property), and so on. A ‘Balanced Fund’ is a generic term for funds which can spread their investments between all asset classes. But there is no ‘industry standard’ and some are actively managed moving between sectors based on economic outlook, while others are passively managed with pretty fixed percentage in each sector. Some funds which have international share exposure hedge against currency variations, others don’t. But they can all be called ‘Balanced’ funds. It is up to investors (and/or their advisers), to read the funds disclosure statements.
It is the same with Hedge funds. The investment strategy will be covered in their disclosure statements.
Goodness Lionell, you must get terribly surprised when you walk into a ‘shoe’ store and see boots and sandals, clogs and Ugg Boots etc for sale as well as shoes!
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That being the case, I can be called a “hedge fund” and so are you because we both CAN take hedged positions. So also can anyone who has any degree of assets above mere subsistence. That makes the phrase “hedge fund” totally without significance for thought or communication. It is at best saying something that sounds profound but its nothing but a low grade word salad: a grammatically correct concatenation of words signifying nothing that distinguishes it from anything else.
However, please re-read my previous comment. If its name is only a label/trade-mark rather than a description AND the enterprise using that name gives a full and transparent disclosure of any given transaction between itself and it’s investors, it can do any damn thing it wants. However, if the name is a description, then it is misrepresenting itself if it does not cohere with its description.
I understand that you like far too many others are willing to accept fuzzy approximations, grab bag floating abstractions, and ineffable feelings as appropriate tools for thought and communication. I do NOT!
Reality is real in that it is what it is. If we choose to live and stay alive we had better know what it is as accurately, as precisely, and as completely as we possibly can or we are in for a world of hurt. Especially for anything that is important to our continued existence.
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There is also that gambit called “supply and demand”.
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“Where is the bubble we can short?” John Paulson.
Its not generally known that Australian hedge funds are presently shorting the banks, just sayin …
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And why wouldn’t they be. The economy is struggling, people bought property at the peaks in 2007 and 2011, especially apartments, based on the high rents prepared to be paid by well paid FIFO workers and all the lawyers and consultants supporting the plethora of new resource projects. Some of the well paid resource industry types also got into negative gearing investment properties. Many are now finding that they don’t have the salary to meet mortgage payments, and they have often lost tenants, or the tenants they could get are paying lower rent. With declining property values and an inability to meet payments banks are preparing for some forced sales of properties at bargain prices. And debts will not be fully covered.
Some banks are exposed to difficult of failing businesses overseas. In May ANZ took a $717 million hit from write-downs and restructuring charges as it turns away from Asia, while NAB’s statutory results showed a $1.74 billion loss following its exit from the UK. At the same time many banks are exposed to farmers who are struggling and small businesses. Bankers will be if not foreclosing on loans, they will be adjusting their contingent liabilities of bad and doubtful debt right offs.
For instance, many people who bought properties in the 2000’s would not be able to get what they paid for it now. As I have always maintained, prices peaked in WA in 2007.
See graph here: http://www.globalpropertyguide.com/template/assets/img/australia-hp-index.gif
If those people ‘hang in’ while they wait for the market to improve, they could be waiting a long time!
All that has happened since then is that interest rates in Australia have fallen in recent years, which has helped support the property market.
See graph at http://www.globalpropertyguide.com/template/assets/img/australia-interest-rates-1.gif
But can you imagine what would happen if interest rates rose as banks restrict lending because of rising unemployment and economic uncertainty to ensure they maintain a safe buffer capital buffer?
All the major banks have recently increased their base rates – not by much – but the downward trend is over.
House prices always suffer when interest rates are rising. It isn’t like Australian house prices are starting from a low base either. They are the most expensive residential houses in the world where there is a ‘real’ market which reflects the local resident’s incomes.
Hong Kong is the only major property market in the world where their median affordability rating is higher than Australia.
[Median affordability rating = median house price divided by median household income.]
Australia’s is 5.5, (HK is 17.0!), the global average is 3.8, which is probably about what it was in Australia when I bought my first home.
You can’t help but have a negative view for the short to medium term for banks.
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Jo
O/T but for those with am interest in Brexit
https://chiefio.wordpress.com/2016/06/17/fuding-brexit/#comments
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And
“If I Were President, On The Day After Vote for Brexit…”
http://www.coyoteblog.com/coyote_blog/2016/06/if-i-were-president-on-the-day-after-vote-for-brexit.html
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Forgive this off topic remark but, here we go again I think.
Dangerous heat predicted for southwestern United States.
I do hate to rain on their parade but these predictions have been standard fare for a long time. And the fact that they don’t always get to this level doesn’t mean it’s not standard fare. I was in Blythe California (10 miles or so from the Colorado River) just after 2:30 PM when the temperature measured at the gas station where I filled up after lunch was 122°. When I got to my motel in Scottsdale at about 5:30 it was 117°. It was well over 100° the next morning when I got up.
That was in 1994. No one made a big deal of it then. But now ??? As the pitchman at the rollercoaster used to say as he stated each run,
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And of course high heat can be dangerous to some people. But where we once were calm about it, now it’s become almost a fetish to sensationalize it.
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I’m not sure if this will be of any assistance here, and I don’t even know how you might go about it, and I’m not all that sure if I can even word this correctly.
I feel pretty sure that sometime in the future (and it may even be closer than you think) that shares in Companies which own large scale coal fired power plants will become quite valuable.
It may seem like they wouldn’t be worth all that much in the current climate (sic) but when the fundament falls out of the renewable bubble, (and it will, probably quite dramatically too) and people actually begin to see that the only suppliers of real reliable, constant electrical power ARE large scale coal fired power, then people will be wanting to get into that, or get a share of it.
As acceptance dawns that coal fired power is perhaps the only answer, then there might even be a scramble to build new ones to replace the aging ones, and when that happens, they’ll be those new technology HELE USC plants, or even the newer Advanced USC.
Now, I know of two large scale plants which have already done all the preliminary work, studies, EIS, the whole schmeel, and even have preliminary approvals in place.
They’re quite obviously on the back burner, but, if (when) the time arrives, those two plants already have everything in place already. All it would need would be to revive those Upgrade plans, polish them a little, and they are right to go, and having all this already in place is a time saving of perhaps three to four years. (the time from thought bubble to work commencing)
Those two plants are Bayswater and Mount Piper, both in NSW. And if they go ahead, then also look to Liddell as well, which is close to Bayswater, and perhaps even a new geenfield site around Newcastle somewhere.
I’m also certain that somewhere, there are similar plans to upgrade one of the older plants in Victoria. Now the brown coal side of things already have those German plants as their goto option, and when the large USC plant went in at Neurath, they were also considering using some of the options for Hazelwood. I wouldn’t be surprised if somewhere there are plans to upgrade Hazelwood especially to new tech coal fired power.
South Australia, well, they’ll eventually have to also bite the bullet as well, but they’ll be five years behind the game.
Queensland, well, oddly they have the youngest fleet of coal fired plants, and perhaps one to keep an eye on here for similar plans would be the oldest of those Queensland plants, Gladstone.
I’m confident this will come to pass, and once it does start, it’ll happen with a rush, and people will be surprised that it happens so fast.
Some people will make a motza out of it, not me, as I’m just a humble pensioner, but at least I’ll have some satisfaction in that it will be what I’ve been saying all along now.
Tony.
HELE – High Efficiency Low Emissions
USC – UltraSuperCritical
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You are right Tony. The way to do it is to invest either in the companies which own those almost ready to go plants, of the companies which are contracted to get those plants up to scratch and also to build new plants. Of course coal suppliers are trading at massive discounts to their peaks and they would recover somewhat too, so hedge fund managers would be positioned to take advantage of that.
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Funny thing is this.
A couple of years back, the price for steaming coal (for use in those coal fired plants) skyrocketed to around $130 per tonne back in 2012, and everyone thought that was going to be the death knell for coal fired power.
Then it came back to what it is now, around $55 per tonne.
When those new tech coal fired plants start to go ahead, there’ll be a pretty big demand again for coal, so all those mines will come back into play, and with a build up in coal mining, then the jobs that come with that will also come back, and Queensland’s Bowen Basin has probably some of the most sought after coal on Earth.
More coal mining, more jobs, more royalties for those
gougingState Governments.Shares in coal mining companies will also rise as well.
All it needs is patience really.
The coal is still there, not going anywhere, just waiting to come back, and it will.
Tony.
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The mining industry is characterised by cycles of consumption, amongst other characteristics. Been so for millenia.
I’ve personally experienced four (4) of these cycles in my working lifetime. Only the first one was scary … 🙂
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Cutting CO2 emissions from coal is the easiest (and surest) way, far more certain than any combination of ‘renewable’ generation.
The only other ways are the more expensive CCGT’s and nuclear, and both those struggle because of greater cost but also opposition from the Greens. Indeed it is strange how much the Greens are against any EFFECTIVE REDUCTION in CO2 emissions. I notice, and I am sure others have, that in Ireland 17% renewables operating led to (just under) 9% reduction in emissions. Germany’s mess with vast (nominal) quantities of ‘renewables’ has meant emissions rising since 2011 (inclusive).
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It never ceases to amaze me the absolutely stunned looks I get when I tell people that they could get an effective 15 to 20% reduction in CO2 emissions just by upgrading existing old coal fired plants to new tech coal fired plants.
There’s just utter disbelief.
Once I explain it, the most common response is ….. Well, why don’t they just go ahead and do it then.
What surprises me most is that people actually do want to hear the engineering ‘nitty gritty’.
You should hear some of the responses I get when I ask the simple question of how do they get electricity from coal. The most common reply is no idea. They’ll think, and sometimes you can guess from the look one their faces that their subconscious is saying how come I don’t know this.
Another good one is to stand there and spread my arms out making a right angle of them. Fill in that right angle and then to my height, well that’s (around) one tonne of coal. Ask them how long a large scale power plant would take to burn that much coal. I get replies, sometimes as high as a couple of hours. When I tell them a big plant like Bayswater will go through that much coal in four seconds with all four units running. It’s beyond their comprehension.
No one has ever bothered to explain the scale associated with coal fired power, and how everything associated with it is just so big.
Tony.
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TonyfromOz June 18, 2016 at 5:16 pm
“It never ceases to amaze me the absolutely stunned looks I get when I tell people that they could get an effective 15 to 20% reduction in CO2 emissions just by upgrading existing old coal fired plants to new tech coal fired plants.”
Tony,
I always like your advice of using machinery with the highest fuel efficiency to generate power. But why the acceptance that lowering CO2 emission has any practical value? To obtain true value for the upcoming cold spell, and stick it to the greenies, that Toshiba (Westinghouse) bunch now is offering nice prices on that AP1000. If Britain would sell a wee bit of their Plutonium storage, your GE PRISM would be nice too.
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… Those two plants are Bayswater and Mount Piper, both in NSW …
Mt Piper has a potential issue with supply of raw fuel. There is really only one major deposit of Lithgow Seam left in the Lithgow valley – this is deep, difficult to mine and both mines currently accessing it are really struggling.
It is possible to supply suitable raw coal from as yet unmined deposits to the north, centred on the Mudgee area. The Greenies are raising hellzown ruckus in this area (and they may yet be sucessful), with the other major infrastructure problem being transport of raw mined coal from the Mudgee deposits to Mt Piper (no existing direct rail link, and trucking it along the Mudgee Highway is guaranteed to provide the ABC with decades of nightly outrage).
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Ian,
The Riverina, Northern SA and Cairns area deposits have not even been touched nor extensively assessed.
BUT, they are all bloody big.
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Yes, but they are a looong way from Mt Piper.
There are many large deposits as yet unmined across the east coast regions (Sydney/Gunnedah/Bowen Basins plus a host of minor ones), but seam qualities/deposit location/greenie considerations are genuinely restrictive. I know such such details are considered unimportant by most people – but they are not.
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It never ceases to amaze me when any discussion of coal on our ABC tells us that fossil fuels are heavily subsidized and newer cheaper more efficient cheaper, cleaner technologies such as solar and wind are being held back by greedy big business interests. I have heard this comment made many times on The Drum, Q&A etc, but it’s never challenged and never substantiated. One day I’m going to throw a brick through my TV.
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don’t throw brick. Just turn off ABC TV. It is easier than you think (OK you may want to view the Weather forecast).
The technique is familiar to historians “Tell a big lie, and tell it often and people will believe it”. (c.f. Josef Goebbels). The only thing different is that people working in the ABC (and politics) is their lack of knowledge, experience, and excess of gullibility means that they believe it.
Slowly but surely we have to chip away at that arrogance (and ignorance), helped by the highly probable global cooling coming in the next 5-10 years.
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From the Director of Science at CFM:
Any knowledgeable investor wouldn’t give two bob to support such unscientific twaddle. Those who do will do their dough, but that’s up to them.
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In your case, its your Centrelink dough.. so where’s your problem ?
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That sounds like our problem, not hers.
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Silly Filly —
“knowledgeable investor” and “unscientific twaddle” are you Al Gore’s agent?
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One of Silly’s best!
I can always count on a good laugh. Any knowledgeable investor would do the research it takes to know what climate change is all about. Then the statement that offends the Filly so much would look a lot more interesting.
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new way of raising funds. Nice
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And now they come for the WOOD-FIRED PIZZA
https://wattsupwiththat.com/2016/06/17/scientists-claim-wood-fired-pizza-is-bad-saying-baking-it-is-damaging-to-the-urban-environment/
Somehow, I don’t think Aussies will take very kindly to this idea.
Try getting in the way of my Rugby Union mates and a good wood fired pizza.. I f******g DARE you, Green freak !!!
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How do these green morons cook pizza?
Solar or wind power… yes, and wait all day and the next while the flies eat the toppings?
Talk about morons — green power isn’t even as effective as Medieval power, it’s too inefficient!
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Chris, I gave you a bump here:
http://dailybail.com/home/climate-witch-hunt-the-new-inquisition.html
It’s at the bottom and hope it drives some interest your way. BTW IEX has been given approval by the SEC to form a new exchange.
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Thanks John.
Love your work.
Chris
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This is straight out grift. To make money from a short sale, first you have to find somebunny willing to give you the shares so you can sell them, but then you have to buy an equal number of shares back at the date agreed and give them to the bunny who leant the shares to you in the first place. Since nobunny is going to trust your word, this exchange has to take place through a reputable bank or broker and there is a cost to that.
Notice that nowhere is it said which bank or broker is going to work with this “hedge fund”.
If the cost of the stock goes down, AND you can find the shares, you make money. If the cost goes up, AND you can find the shares, you lose money. If you can’t find the shares, as the song of Daniel Drew goes he who sells what isn’t his’n, must pay the price or go to prison. That’s called a short corner, see Daniel Drew and Commodore Vanderbilt for an example.
Having gotten that out of the way, to make significant profits by selling short you have to have leverage and that means that not only can you lose lots of money if the price goes up at the settlement date, but if you are leveraged, if the price goes up while you are waiting, you have to meet the margin call.
Now all of this, the borrowing of the stock in the first place, the leverage, etc. means dealing with a brokerage house who allows you to borrow the stock from their treasury and trade on margin. Since an honest broker will set the amount of your margin account based on the amount of resources you have to pay off with, you need a) a broker and b) a pile of resources that you can use as surety for your margin account c) a lot of money to cover the transaction costs.
In short, this is very likely to cost any investors a great percentage of their money. Just sayin’
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A March 2015 paper confirms a 1990 George Bush #1 Executive mandate, “Global Change Research Act of 1990” resulted in the global climate science spending boom and has funded it for decades. US taxpayers were “volunteered” to finance the imaginary “crisis” of global environmental change in perpetuity (it’s our fault but even if it weren’t, it’s “who we are”, we’re just good guys who can’t stop killing ourselves, you know we’re Yankee Doodle Dandy). He established infrastructure in the Executive Branch that forces virtually every government agency to make the “crisis” a priority. The Bush family and the entire US political class are the only reason this crime continues today. Obama is only following Bush’s lead and no one stops him. Bush even slipped in language near the end that CO2 was a pollutant (this was in 1990). It’s worse than organized crime. It’s genocide-per Lemkin’s definition-the targeting of a group and its foundations for gradual extinction.
“Global Change Research Act of 1990”
http://www.gpo.gov/fdsys/pkg/STATUTE-104/pdf/STATUTE-104-Pg3096.pdf
3/6/2015, “Causes and consequences of the climate science boom,” William Butos and Thomas McQuade https://thelibertarianalliance.com/2015/03/06/causes-and-consequences-of-the-climate-science-boom/
“Funding appears to be driving the science rather than the other way around.”
“2. By any standards, what we have documented here is a massive funding drive, highlighting the patterns of climate science R and D as funded and directed only by the Executive Branch and the various agencies that fall within its purview.”…
More from the paper:
“1. The [US] Government’s Role in Climate Science Funding…[is] embedded in scores of agencies and programs scattered throughout the Executive Branch of the US government. While such agency activities related to climate science have received funding for many years as components of their mission statements, the pursuit of an integrated national agenda to study climate change and implement policy initiatives took a critical step with passage of the Global Change Research Act of 1990. This Act established institutional structures operating out of the White House to develop and oversee the implementation of a National Global Change Research Plan and created the US Global Change Research Program (USGCRP) to coordinate the climate change research activities of Executive Departments and agencies.[33]”…
PS, I’ll be making a donation to the Cool Fund.
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Greatway way of raising funds
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I have a moral dilemma!
I have always been against ‘shorting’ – the worst examples causing company closures with assets being bought very cheaply but – jobs lost.
Now, people in the field of finance say that ‘shorting’ can help remove sickly companies, but I would say, let them limp on if their owners want to continue to trade.
However, ‘betting’ on green scam companies and causing them to fail, well if that reduces subsidies paid by the taxpayer then that could be a good thing.
It’s a dilemma.
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Most people would probably agree with your view of this Steve.
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Jo, ” Instead of standing on the side lines and telling the World what’s wrong with the current system”, you could submit your evidence to the real World, especially if you claim its cooling ?.
[I presume you’re talking about the New Science series from David Evans. And he has submitted his work to the world for all to see. So who is standing on the sidelines?] AZ
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I think we could pretty much guarantee that MORE people have read David’s work, than ever read most articles in pseudo-science magazine like Nature etc have become.
Heck, even Frank would have been able to access and, if capable, make a coherent case against it… right Frank 😉
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yeah agree. And how about the nong who championed this nature paper http://www.nature.com/ngeo/journal/vaop/ncurrent/full/ngeo2727.html
in this blogpost http://joannenova.com.au/2016/06/cooling-in-the-north-atlantic/#more-49215
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And what is the response to David’s submissions ?
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Who can point me to the latest statistics on dollar amounts contributed to federal officials in the name of “climate change.” I tried OpenSecrets – waste of time. Am tired of seeing NRA funds in the news.
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