SharperDingaan

All we have suggested is that Alberta would materially help itself if it had a rail-car fleet on long term lease. No engines, drivers, track, nationalisation, etc. - just a fleet of rail-cars to continuously keep the differentials as low as possible. The industry simply fills 'em up as it needs them, at whatever the cost at the time is. If it's not profitable to ship, there's no fill. Agreed the industry is incredibly innovative, but it's also incredibly 'tone deaf'. For the most part folks are open to alternative solutions (fed involvement), but flatly just don't trust the industry - and will not give it the time of day. It's distrust that's well supported, and 'Lotus Landers' are just as adamant as Albertans are. It also cannot continue. Newfoundland vs Alberta? Per Newfoundland, an investor lets the big boys drill - and only gets involved once the o/g is well on its way to being connected up with on-shore facilities; a back-end focus on who benefits when the o/g starts to flow, & investing accordingly. In Alberta it's front-end focused, as everybody can both drill fairly cheaply & tie-up to a collector facility a lot more easily. It's just a different approach. Ultimately the pipelines will go through, but once the dust settles - it is not going to be business as usual. Not a bad thing. SD

Were there no problem, the Alberta differentials would not have risen to what they were; the problem is just 'lack of common sense' - not money. Example: In the IT world the days activities are backed up every night, and a warm start disaster recovery room maintained at a geographically remote site. It's an entirely redundent continuous expense, treated as an insurance premium, and the CIO would be terminated if he/she didn't maintain it. But if IT goes down, it can be recovered in hours. In Alberta we use pipelines to transport, and rail cars as the equivalent of warm site backup. Except there aren't enough rail cars to take over when the pipeline is constrained - 'cause rail coy's aren't building them in the absence of contracts with terms long enough to finance the cost of the build. So when the pipeline is down/constrained/restricted, we scramble for short-term solutions - and wonder why we end up f'd. Apparently it is too hard for industry/government to collectively lease enough rail cars on a long-term basis, so as to ensure that they are always available? It's cheap insurance, no different to maintaining a warm start disaster recovery room. Canadian industry cost recovery models are widely available (Facility Association auto-insurance). We fully agree that pipelines are the way to go, and that it is in the national interest to allow them to transport o/g across the provinces. Transportation of o/g across provincial boundaries is no different to electricity, hazardous waste, or even produce (wine, beer, weed, cheese, etc.). We simply recognize that it is often easier (& with fewer 'barriers') to move goods between provinces via the northern US rail links - and that for most industries, THAT is the natural 'disaster recovery' plan. We mentioned Newfoundland BECAUSE it is on the ocean. If you think Canadian o/g services is a great place to invest, there are other viable and functioning places in Canada where an investor does not have to put up with the differential. More importantly, it is just a straight forward shipping route to replace declining North Sea production going to customers in the Atlantic basin. SD

"How would provincially owned railcars help? It is your viewpoint that GATX is not leasing out enough cars?" Today you cant get a rail-car unless you commit to a long-term lease. It's to the producer to lease it, they are reluctant to commit, and the oil stays in the ground instead. Can't take the risk. Nothing prevents Alberta from entering into (permanent) long-term rail-car leases, in large quantity (potentially 50% of existing maximum pipeline capacity), and re-leasing them to producers on a short-term spot rate basis. There is now permanently more than enough take-away capacity to move oil by rail to anywhere where it may be sold profitably, producers receive WTI less transport cost, and can produce as much as they can profitably sell. Alberta has permanent incentive to go to pipelines as soon as practicable, but in the meantiime everyone's oil is getting to market. If total lease costs exceed revenue, the difference is simply charged back to industry. It's not difficult, 3rd world countries manage to do it every day. SD

Actually this speaks to just how irresponsible the Alberta o/g industry has historicaly been - and remains so to this day. We all know Alberta's oil/gas is landlocked, and heavily discounted because of it. The opportunity loss literaly costs the Alberta economy (& the Alberta government via the royalty loss) billions/year EVERY YEAR, and has been costing everybody ever since Leduc No.1 came in - in 1947. The Tarsands ALONE had enough proven reserves in 2012 to supply all of NA for 100 years at the 2012 consumptiion level - yet 71 years after Leduc, and through multiple booms/busts, Alberta o/g is still as landlocked as ever. Even 3rd world countries (ME, VZ, etc.) invest in state owned/chartered tanker fleets to move their oil to market - Alberta does not even have a provincially chartered rail car fleet to backstop its pipeline access. Hard to be sympathetic, when the industry continues to be this irresponsible. Newfoundland has long been the butt of many jokes. But those same 'newfies' also managed to put their offshore Whiterose (& now Hebron) o/g into production, from literally scratch, and DO NOT SUFFER Alberta's 'differential'. Furthermore, few investors recognize that there are actually TWO o/g industries in Canada; most see only the WCSB. The fact that Newfoundland has its act together (& has successfully done it under much more difficult technical conditions), and Alberta still hasn't a clue - is an indication of just how irresponsible the 'blue-eyed sheiks' have been. https://en.wikipedia.org/wiki/White_Rose_oil_field http://www.cbc.ca/news/canada/newfoundland-labrador/hebron-first-oil-1.4422476 Hopefully this time around Alberta feels enough pain, and for long enough, to finally make the REAL changes neccessary. Newfoundland oil can also flow west, and at some point - very likely will. We wish everyone the best of luck. SD

Just to add some food for thought. We know that the markets are primarily driven by algorithms, and that optimization includes backtesting against prior data. As long as the future resembles the past, or does not change QUICKLY, everything's beautifull. But when there's a 'market discontinuity' - the algorithms make the wrong decisions, and exaggerate their errors. As was shown this week. So why not simply trade against them via a bar-bell?. A core of rolling treasuries, and a rapid move to futures everytime a algorithm blows up. The underlying premise being that in a rising rate environment, and unwinding of QE, there will be reliable FU's - the only question is frequency, and your ability to exploit them. Furthermore, while you're sitting in your treasury ... there's very little risk. SD

Just throwing out a guess here - but somewhere between EURO 1-2. It will very likely always be more valuable to the criminal element than a EURO 1 coin - simply because it's annonymous and electronic. How much more will depend on how much someone is trying to buy at the time, and why they are buying. On any given day, anyone in the world trying to hide assets in a divorce proceeding, might quite happily pay 'above market' - in the expectation that even if they end up selling at a loss, it's highly unlikely to be 50%. Therefore a maximum of 2 EURO. SD

Sounds like you have the gambling gene. When you notice that, the proper thing to do is to stay away from gambling. Agreed; you have to control the money - and not allow the money to control you. There are lots of examples of folks who let the money go to their heads, then discovering that it often destroys lives. Victims range from yesterdays plumber suddenly winning the lottery, to celebrities dying from overdoses. Part of tuition - is learning how to deal with wealth (& lack of). SD

I have just been advised that both the 'Blockchain' and 'Bitcoin' courses were caught up in the Facebook crypto advertising ban, and that they have now been given permission to advertise on Facebook. Little goes viral in academia quite like a formerly banned course - and on social media no less. I feel so proud! SD

It's not far off - one of the papers on this thread suggests Etherium was spending around $1M/day. It's also (in part) why some are skeptical of the Bitcoin 21M coin limit - as the choices are either pay this per transaction, or pay nothing if new token are issued. Most likely as initial additional token up to the amount thought 'lost' over the years (therefore still a maximum 21M), then maybe 1% year thereafter - 'forever'. Controversial. SD

Sh1te that's good - thanks for posting! SD

This means very different things to diffferent investors, & ultimately is a decision as to how an investment will be made. While well meaning, it often suffers from poor understanding. According to many environmentalists carbon credits are the 'devils creation' and nothing less than a tax grab; the money collected just goes towards the creation of more pollution, minus a healthy 'cut' to the government. Whereas it's actually a very smart thing to do; that 1 very dirty plant gets shut down in favour of 2-3 'cleaner' plants - same total pollution, but now 2-3x the employment. Putting a price on pollution, justifies investment in pollution scrubbers; if the PV of pollution costs saved > cost of the new equipment. Ultimately if we value something (clean air, water, etc.) enough to put a price on it, it will be done - as ACTIONS change behaviour, NOT words. Similar arguments apply to addiction and heathcare. Someone who frequently smokes will become addicted, and it will cost them an early death. Early stage treatment may turn things around, but it has limits; at some point it will cost a lot less to just give the smoker enough cancer sticks to hasten their end, & treat only for pain. Different paths, both equally acceptable. There's lot of investment literature on the topic, but ultimately its a personal decision. SD

You've just learnt what most ICO's are - a whitepaper, a sketchy website, nothing 'patentable', a VERY 'questionable' ICO issuance, and often a token limit - indirectly tied to the 21M maximum of Bitcoin. You've learnt that if you put this stuff into a closed end investment fund, you can sell units in the fund at a 30% premium - when they should be sellling at a discount. And also learnt that it's these 'fund co's' and exchanges that get hacked (& your token stolen) versus the Bitcoin.org oracle itself. If you come from capital markets - you also know how to use Bitcoin options and futures to advantage; on the assumption that a falling tide lowers all boats. The technology behind crypto-token is the distributed ledger, the blockchain, and the smart-contract. Your value add will be in learning how this works, keeping an open mind, and thinking outside the box. Sadly there's almost always a frat-boy 'blow-out', that is the human part of most market tops (movies get made). It's also a reliable indicator that the party is reaching its end - so use accordingly. SD

The smartest thing you can do right now - is educate yourself in the technology. Forget the FOMO - crypto will be around for a long time, and it's hard to short. As at yesterday there are 1,512 tokens/coins in the world - about 131 (9.5%) MORE than they were, just ONE month ago https://coinmarketcap.com/all/views/all/ . Pick 2-3 of the more obscure coins/tokens of interest & do a little research on them. SD

The smartest guys in the room - Enron documentary

Chicago Bitcoin futures and options! SD

There will be an on-line version this Fall. As at the beginning of last Fall there was nothing that I know of in the US - including Harvard! SD

I'm curious what your thought process was originally, i.e. getting into the cryptos. I found it technically interesting and noted the all in of the Vinkelvoss twins (no need to snigger here, just because they lost to Zuck, remember they were absolutely right and early on social media.) But I could not pull the trigger in that I would only be buying on an estimate on what others would find attractive--see Keynes on judging the judges of a beauty contest. I came into cryptos via block chain and the smart contract. I was looking for a thesis topic, found this technology incredibly practical and appealing, and used the opportunity to do a deep dive into what it is. Combined with 20 years+ of business experience in both FI's and supply chain; the result was a 'how to' thesis in the strategic implementation of this technology in 'day-to-day' business - from 'blank paper' through to 'finished working product'. Obviously, its a valuable skill today - and available to all for a very modest hourly fee ;) Along the way I had to research crypto, their relative merits, and their limitations. It was quite obvious that Bitcoin was truly unique; once the 'videos' and 'textbooks' started explaining it 'en masse' - the odds on it ultimately becoming 'mainstream' were also pretty good. Our own view was that Bitcoin would not take off until it became both investable (futures, options), and respectable for institutions to hold. It happened sooner than we thought, and we sold as Chicago started offering derivatives. Ultimately we bought a few Bitcoin just to get the 'feel and experience', and traded the volatility; executing through various exchanges largely as a science experiment. Continuous reinvestment grew the number of coin, & ultimately we dumped at high prices & took the $ off the table. Today we hold T-Bills, and a whack of WCP, instead. To a large extent we've been very lucky; right time, right experience, and increasingly - right place. Maturity, expertise in value investment, backgrounds in petroleum engineering and finance, and experience with some of the worlds nastier 'hot spots' has been extremely helpful. We totally get both the anarchist and CB viewpoints, because we've seen both. The technology is incredible, but the weakness is people. Transformative managers with strong people and social responsibility skills are going to rule the world. SD

Just a quick FYI for those in the Toronto area, with an interest in crypto-token, block chain, smart contracts, etc. Look at the 'Finance' and 'Innovation' sections. https://learn.utoronto.ca/courses-programs/business-professionals/courses/skill-builder-series SD

Why would anyone ever look at it from another point than "what it has grown to"? You still risk the same amount, regardless of where the wealth initially came from or what amount you invested versus your total wealth. Depending on where money comes from (income, inheritance, investment returns, bonus, windfalls, etc.) people tend to invest differently. This is completely irrational behavior. I do it too of course but try to be at least aware of it. And if you decide to hold your current positions, you are effectively making the decision to buy them now at current prices. Ask yourself if you would hold the same positions if you were to start over with a new portfolio. Specifically ask yourself this: If I were to restart with 100% in cash and the same knowledge, would I invest 40-45% in crypto's today? More power to you if you would. Just make sure that it is a conscious decision. This is the 'casino' effect, and why it's helpful to have 'rules of thumb' when you're getting material portfolio distortion. Ultimately there is a need to periodically take $ off the table, but everyone will make their own decisions. SD

Who knows what will happen, but I have a feeling Joe Average hasn't even started selling yet. Buying and ultimately selling bitcoin, isn't as easy as the advocates would have you believe. So there is a lag between when the larger players sell, and the small average investor's get to sell. The smaller players, especially the ones buying last at the higher valuations, will be left holding the bag. Cheers! Like everyone else, I had all kinds of students/recent grads asking 'how do I get in' around Nov/Dec of last year. The prevailing attitude at the time was max out the credit cards, buy Bitcoin, and just pay the minimum every month. As is our custom; when we sold, we also disclosed our exit. About 1 in 4 sold shortly thereafter. Every value investor has to learn how to 'recognize thesis change, and sell '; and as we've all learnt, it's a painful but essential lesson that isn't in the text books. I understand that a lot of the credit card buyers are underwater, and many just want out at the price they paid. I expect that maybe 1 in 3 have the fortitude to 'tough it out', the rest are going to cave as they get further into the red. This suggests heavy selling into the rallies, and rising selling as price descends. Systemic downward price spirals. Notable is that it's the same behaviour we see with novice day traders - and the stocks they tend to follow. The clampdowns, regulatory actions, & CB interest rate raises; infer that 'moral hazard' is back in fashion. And we know from US prosecution practice that it's the 'little fish' first; then you move up. It doesn't look good for the token. SD

Bitcoin crossed USD 8,600 today - we would suggest that it will not be long before it falls < USD 2,500. Tether isn't going away, as price falls to what Joe Average paid - selling should accelerate, and there are limits to the 'never sell' attitude of the early stage developers. It's easy to boast at 15,000; not so much when it's below 5,000 - and still falling. We don't see any near or medium term positives. The only real question now is how low it ultimately goes, and how long it takes to get there. History being made before our eyes. SD

.... so at this time trying to see which one is Google and which one is Yahoo. It's too early to make this determination. Quite a few folks would suggest that it is more likely to be those providing database blockchain/smart contract services via the cloud - simply because they are scaleable. A material consideration if your proposed business application could easily generate 20,000 new blocks/month that need to process in seconds, versus < 1,000 new blocks/month that could take minutes/hours to process on a distributed ledger. You demonstrate your 'proof of concept' on Etherium (Distributed Ledger) - you implement it on IBM/SAP (Database), and do it 'in house'. Tuition wise, your time would be better spent looking at how this technology affects the operations of a business - versus whether X or Y is the better investment. UoT has a handy 2-day course in the subject ;) SD

You need to be very clear on WHY you're investing in this. In the long-term - a holding of Bitcoin is probably a worthwhile thing. You will have some wealth that is always portable, no matter what happens to you. You will also have experience in what will probably become a 'core' crypto coin (complete with futures & options markets). It does not mean buy it today. In the nearer term, Etherium will make you familiar with how blockchain smart contract solutions can be applied across many different applications - but Ether token is not a substitute for Etherium stock (it's private). The solutions are where the money is, and the beneficiaries are the companies applying them (some of which are public). The downside is that distributed ledger applications have scaling limitations. To 'make' wealth one concentrates - to 'preserve' wealth one diversifies. To 'make' wealth in this game, you need to be a partner in a JV building a blockchain smart contract solution. If that's part of the plan - Etherium is probably the better choice. Notable is that it cannot be decided by conventional investment 'metrics' They don't exist yet. SD

The ICO itself very likely wasn't illegal, simply because there are no real crypto laws to break at present. What was probably illegal were the statements made around it (FDIC insured bank, Visa, etc.), and the presence of a C-Suite individual on probation for felony theft. Can't claim the bank and pipes stuff until AFTER you've bought the bank. SD

Assuming e-Krone is a CBDC..... Every Swede or Swedish entity gets a digital wallet at the Riksbanken to hold their E-Krone. Same as every Swedish FI. Every Swede or Swedish entity will have a normal bank account from which they get cash. Cash and e-Krone freely exchange at 1:1, guaranteed by the Riksbanken. But ..... The Riksbanken ALSO provides a smart-contract writer recording transactions on a blockchain. Any Swede or Swedish entity can now transact with any other Swede or Swedish entity, in e-Krone, at zero cost. The state can now directly credit your Riksbanken wallet with benefit & pension payments, and you can directly pay your taxes and municipal fees from your Riksbanken wallet. No more credit or debit card charges, Riksbanken ability to trace a good chunk of all transactions in the Swedish economy (AML/ATF enhancements), and a significant reduction in transaction and fraud costs throughout the economy. Should the Riksbanken pay out a daily annualized 1% interest on all e-Krone that did not transact that day, every Swedish bank would now have to pay more than that to attract and retain a customer deposit; that will be lent out multiple times as interest bearing loans. The Riksbanken can now control the MINIMUM interest rate in Sweden (it sets it), the velocity of e-Krone (pay more interest & it slows), and the amount of lending (change the fractional reserve requirement). Very powerful, and largely NEW, monetary tools. The more corrupt or underground your economy (Russia, Israel) the better this works. The smaller your economy (Sweeden) the easier it is to implement. If you think this is great, there is very little not to love. If you're concerned about 'big brother' you would buy Bitcoin to store your wealth - but there will be a Riksbanken digital trace to your coin exchange buy/sell (even if you used an ATM). As other CB's do the same thing the underground 'space' contracts. concentrates into fewer and fewer portals - and becomes more 'containable'. Welcome to ONE of the 'new' worlds of banking. SD