The Daily Alpha: Real Talk on Ted Cruz, Russian Sanctions, Steve Ballmer, and the Chicago Cubs 

Apr 19 2017 | 12:14pm ET

Today, we discuss Exxon's quest to bypass Russian sanctions, the Chicago Cubs' ring rules, Steve Ballmer's Dataquest, and U.S shale production.

Hair of the Dog

Shot: (4-2017) Ted Cruz concerned Democrats will trigger government shutdown

Chaser: (10-2013) Call The Government Shutdown The 'Ted Cruz Crisis'

Quotes of the Day

“I just think it’s really good for our citizens to be well educated in what their government does.” 

That is former Microsoft CEO Steve Ballmer in an interview with the Washington Post.

While Ballmer has been dabbling in sports ownership and graduate school education, he’s also taking aim at helping Americans understand where federal, state, and local government spending goes.

While “down a hole” or “into influencers pockets” would have just been enough of an explanation, Ballmer has launched "USA Facts."

It’s a massive interactive database that resembles a 10-K for U.S. spending at all levels.

The project cost him $10 million.

His rationale is smart and simple. “It is hard to trust” official U.S. data, he says.

But the quote of the interview that caught our attention was his statement that it would be better for Americans to better understand how our government works.

For the most part, they do not, and the reason is pretty obvious.

The government is in charge of the education that it provides to Americans on what the government does. One third of this nation can’t even pass a basic civics test.

Godspeed, Steve Ballmer. 

"Shale funders look at the economics today and see a lot of projects that work in the $40 to $55 range."

Good news for U.S. energy investors and shale producers.

The cost of production continues to decline and that is generating more investment from alternative investment managers.

Howard Newman, head of private equity fund Pine Brook Road Partners, told Reuters this week that the current range of crude price is suitable for investors. 

That justification was hard to find just a few years ago.

However, advancements in technology and operations have helped reduce the cost per barrel. From the last quarter of 2014 to the first quarter of 2016, the cost of drilling and completion services fell by more than 30%, according to Tulsa-based Spears & Associates. Those numbers are still falling.

Naturally, that’s put a big damper on OPEC’s plans to cap excessive production in order to support prices. While the global oil cartel is likely to extend its deal in the months ahead, the Energy Information Administration just forecasted that daily shale production in the U.S. is set to increase by more than 100,000 barrels.

“Exxon and Rosneft in 2012 unveiled an offshore exploration partnership that could invest upward of $500 billion in developing Russia's vast energy reserves in the Arctic and Black Sea.”

This probably is going to cause a lot of heads to explode at MSNBC tonight.

Exxon Mobil has applied to the Treasury Department for a waiver so that it can circumvent U.S. sanctions on Russia. The company wants to continue its efforts to help Russia tap into energy reserves in the Black Sea and the Arctic Sea.

Given that Secretary of State Rex Tillerson is the former CEO of Exxon, it appears that every major news outlet is howling over the request.

Twitter is on fire, and the calls for impeachment of President Donald Trump are back near blood curdle.

So, it's just another day in Washington.

"Part of the reason is you devalue the ring for everyone if all of a sudden people race to the market to make some money off of it."

Finally, Chicago Cubs General Manager Jedd Hoyer defended his club’s request that no member of his organization who received one of the roughly 2,000 World Series Championship rings sell them on the open market without allowing the team to buy it back.

How much do the Cubs want to buy it back for? One Dollar.

The Chicago Sun Times and ESPN report that the team is asking everyone in the organizations – with the exception of the players – are being asked to sign the pledge. That includes everyone from Hoyer all the way down to individuals like the stadium scoreboard operator. Full-time, part-time, and seasonal staff are expected to receive different tiers of rings in the coming weeks.

Appraisers say that a ring could receive a bid ranging from $50,000 to $250,000.

According to ESPN, at least one executive objected and said that someone should have the right to sell it if they need to put “food on the table.”

The Cubs, however, are paying for the rings and helping with the associated taxes as well.

In January, Modern Trader sat down with Chicago Cubs co-owner Tom Ricketts to discuss his team’s World Series victory. The conversation spans his life as a trader, baseball fan, and successful launch of Incapital. Read it for free, right here.

Wednesday Reading List 

CNBC: Hedge funds see biggest inflows in 20 months in March even after badly trailing the market 

Reuters: KKR-led group ups ante in bidding war for Australia's Tatts lotto

Dealbook: How Morgan Stanley Bested Goldman Sachs

ValueWalk: Goldman Sees Net Hedge Fund Inflows In Second Quarter

Crain’s: Activist investor launches Taubman Centers proxy battle


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Garrett Baldwin is the voice of the The Daily Alpha, the features editor for Modern Trader magazine, and the author of The Man with The Big Red Balloon. 


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