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REAL TALK ON
ALTERNATIVE INVESTMENTS
BUSINESS & FINANCE

The Daily Alpha - 10.09.15

The Daily Alpha - 10.09.15

Garrett Baldwin



Here's today's Alternative Thinking on Iranian LinkedIn Spies… Fantasy Football Lawsuits… Reasons the Finance Community Should Drink More… Obama’s Oil Veto Threat… and the Republican “China Myth…”

“The fake profiles allow hackers to spy by helping them engage in "social engineering" -- researching targets based on information on the Internet and social media to build a tailored phishing attack.”

CNN reports that Iranian spies and hackers have been setting up LinkedIn accounts in order to gain information on targets and access into companies around the world. Using a process known as "social engineering," the spies and hackers pose as potential recruiters and other positions of authority to trick unsuspecting targets.

It’s the latest cyber threat not only to large defense and industrial companies, but also to financial organizations with a presence around the globe or just a single two-person office with a lot of assets under management.

If you’ve read Modern Trader’s October feature “Assume Breach,” you’re familiar with the hacking strategy known as social engineering. We sat down with four ethical hackers and listened to them explain – in shocking detail – how hackers could be targeting your organization, and how easy it is to extract information from companies.

Most important, this article offers the solution to solving one of the 21st century’s biggest problems. Be sure to read – and please share – Assume Breach with friends and colleagues. Your company and future employment could rely on it…

“All people want is a fair game. What has come out is that it’s clearly not a level playing field. If people knew there were insiders with access to the info they have they wouldn’t play on these sites…”

A class action law suit was filed against DraftKings and FanDuel on Thursday in a Manhattan Federal Court. The ongoing insider-trading saga has been a big theme here this week, and it just gets funnier as it goes along.

As we noted several times, a number of different media companies ranging from CBS, ESPN, and Fox all have a vested interest in one-day fantasy sites either as partial operators, investors, or the recipients of large marketing dollars. That’s in addition to the financial interest of the NFL, several venture and angel funds, and the personal family of New England Patriots owner Kraft. There’s been no shortage of ad dollars spent this year by both defendants in the lawsuit… as evidenced by the nonstop advertising that spans across all media platforms from the web to television.

So, isn’t it ironic that when one clicks on the Sports Illustrated article about the pending lawsuit… a $%&#@% FanDuel ad pops up right next to the opening sentence… "FanDuel: Gambling... I mean... Fantasy Football Made Simple..."

The suit alleges that the site’s advertising practices were misleading about the fairness of the daily gambling... [we keep doing it!!!] “games of skill.”

It’s unfortunate that the plaintiff Adam Johnson didn’t add to the suit that the sheer number of advertisements on television is causing him emotional distress.

Not even Kim Jung-un advertises himself this much in North Korea.

“Absence a change in consumer behavior, returns for so-called socially responsible portfolios will be lower.”

David Stein, host of Money For the Rest of Us, asks whether ethical investing generates higher returns…

His short answer is that it doesn’t. But there are some interesting numbers in here, particularly for anyone who manages money for religious organizations, followers of Sharia law and finance, or individuals with a desire to invest with a social mission in mind.

Check it out.

“It is also very probable that exporting more oil would reduce world reliance on volatile countries in the Middle East. Some states would likely switch to US suppliers for their oil rather than having to rely on Russia or Venezuela.”

Congress was expected to pass a bill to lift the 40-year-old ban on oil exports on Friday, but a veto threat from the President all-but puts the nail in that coffin for now. Despite the perceived economic benefits for investors and job-seekers in the near term – and to our trade partners in Europe – the President plays Don Quixote and continues to tilt to windmills...

The transition to the low-carbon economy that Obama so desires is not going to take place over night, and oil will remain a critical part of the energy balance for a long time. Perhaps that’s why he’s allowing oil flows through many pipelines between Mexico and Texas, but continues to politicize a single pipeline across the Canadian border, even though his arguments offer nothing but distinctions without a difference.

Our new content partner FXHQ offers its argument for lifting the oil ban right here…

And be sure to check out Futuresmag.com each morning for the Morning Market Report around 11 a.m. each day. You’ll get a breakdown of what’s happening in the currency markets during the first 90 minutes of the U.S. trading session.

Read the latest version, right here at 11 a.m. EST.

"America is not a planet. And we are not even the largest carbon producer anymore: China is. And they're drilling a hole and digging anywhere in the world that they can get a hold of."

Speaking of the debate between low-carbon and carbon-centric economies…

Give Republican Presidential Candidate Marco Rubio some credit during the first GOP debate. He did get something right when he rightly acknowledged that America is not a planet.

But soon Rubio suggested that China would violate any international agreement regarding green investment technology. Many other candidates have suggested that China is not committed to alternative energy development.

Turns out, that not only are they committed, they are simply blowing away everyone in the world in terms of their desired investment into the space. On Thursday, China’s central bank deputy governor, Yi Gang said that the country will need to make “green investments of between 2 trillion and 4 trillion yuan ($315-630 billion) per year over the next five years, according to Reuters.

There’s just one problem, the government can only afford to pay for 15% of that total.

Is this an investment opportunity for large funds or potential Ponzi scheme?

But what’s troubling about this article is the news that China plans to create a “cap-and-trade” program to address its carbon emissions.

If history serves as a lesson from Europe, get ready for a spectacular misallocation of financial resources and a potential carbon bubble.

Some have tried to pitch a national “cap-and-trade” program in the U.S., but let’s make one thing clear. That is anything but a market solution. When it comes to picking winners and losers, government will line up behind the lobbyists if a carbon credit economy ever emerges.

Big companies will win, and small companies will lose. China may very well follow in Europe’s failed footsteps, only this time, it could create more calamity.

This is one of the most rigged ideas in the history of the planet.

We’ll let Matt Tiabbi explain a previous scheme in an iconic article from a few years back.

Editor's Note: That’s enough for one week. Check back Monday as we dig deeper in the best alternative investment stories each afternoon. Read Finalternatives.com for updates on what's happening in the Hedge Fund community today, and pick up a copy of Modern Trader next week, where I'll be chatting with Tyler Winklevoss. 
















































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