Thursday, July 24, 2014

Oil Futures Decline Amid Rising U.S. Gasoline Supplies

Oil Futures Decline Amid Rising U.S. Gasoline Supplies

West Texas Intermediate crude declined with gasoline as U.S. inventories of the motor fuel expanded for a third week, threatening to depress refining margins. Brent also fell.
Gasoline stockpiles grew by 3.38 million barrels last week and supplies around New York Harbor, where futures contracts are delivered, were at the highest seasonal level since 2008, Energy Information Administration data showed. Gasoline futures ended at the lowest price in almost six months.
“The key feature that’s driving the market down is gasoline,” said Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. “Relatively limited gasoline demand is a key fundamental element in the market now.”
WTI for September delivery slipped $1.05, or 1 percent, to end at $102.07 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 23 percent below the 100-day average for the time of day.
Brent for September settlement declined 96 cents, or 0.9 percent, to close at $107.07 a barrel on the London-based ICE Futures Europe exchange. Volume was 23 percent below the 100-day average. The European benchmark crude ended at a premium of $5 a barrel to WTI, up from $4.91 yesterday.

Gasoline Supplies

Gasoline supplies increased to 217.9 million barrels in the week ended July 18, the most since March 14, according to the EIA, the Energy Department’s statistical arm. In the Central Atlantic region, supplies were little changed at 30.3 million. Implied demand for gasoline fell 265,000 barrels a day to 8.79 million, the weakest since June 6.
Distillate inventories, including heating oil and diesel, rose by 1.64 million barrels last week, the EIA report showed.
“The increase in gasoline and distillate inventories and the fall in demand is weighing on the entire complex,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy.
Gasoline futures for August delivery dropped 2.33 cents to $2.8368 a gallon on the Nymex, the lowest settlement since Feb. 28. Ultra low sulfur diesel dropped 0.45 cent to $2.8709.
“Demand must be waning a bit and that’s why we are seeing prices come down,” said Phil Streible, a Chicago-based commodities broker at RJO Futures.
U.S. refineries operated at 93.8 percent of their capacity last week. The crack spread, the profit to process three barrels of oil into two of gasoline and one of heating oil, widened for the second time in eight days, ending the day at $17 as crude fell more than gasoline and diesel. The front-month 3-2-1 spread was $21.21 on July 14.
Oil also declined as the International Monetary Fund lowered its outlook for global growth this year. The world economy will advance 3.4 percent in 2014, the IMF said, less than its 3.6 percent prediction in April and stronger than last year’s 3.2 percent.
“The IMF report is very negative,” said Rich Ilczyszyn, chief market strategist and founder of in Chicago. “Weak demand is depressing the prices.”
To contact the reporters on this story: Moming Zhou in New York at; Mark Shenk in New York at
To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.netRichard Stubbe, Charlotte Porter

Tuesday, July 22, 2014

The Fed Prisoner's Dilemma: Sell Now Or Keep Dancing?

The Fed Prisoner's Dilemma: Sell Now Or Keep Dancing?

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)


  • The Fed is likely to announce the end of QE3 in October, only 100 days away.
  • Following the end of QE1 and QE2 we saw large corrections in the market.
  • It appears that big money investors are already rotating into more defensive areas, preparing for more difficult times ahead.
"When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you've got to get up and dance. We're still dancing." - Chuck Prince, July 10, 2007
[Joe Kernen: You have been on Squawk Box and said as long as -- you sound like Chuck Prince. You're still dancing now basically. Until they raise rates you're going to dance, right?
Stan Druckenmiller: First of all, I'm not like Chuck Prince because I can get out. I am still dancing, but Chuck Prince and the Fed, if they're wrong, cannot get out. I can get out in a week.] - CNBC, July 17, 2014
Some of you may be familiar with game theory and the famous example of the Prisoner's Dilemma. In the game, two members of a criminal gang are arrested, imprisoned, and isolated. They have two options: 1) cooperate with one another (stay silent), or 2) betray one another (testify that the other committed the crime). The various payoffs for each decision can be seen below.
(click to enlarge)
The dilemma is as follows. From a purely self-interest perspective, it is in each prisoner's best interest to defect as they have the opportunity to go free with the other party serving 3 years if other party stays silent. However, as both prisoners are likely to pursue this self-interested option, they are collectively worse off, with each prisoner receiving 2 years in jail. Had they cooperated and remained silent, they would have each served only 1 year in jail, the best possible combined outcome.

The Fed Prisoner's Dilemma

Many market participants today are faced with a similar dilemma, and they have become prisoners, in recent months, to Federal Reserve policy. After five and a half years of 0% interest rates and three rounds of QE, returns on virtually all asset classes have been pulled forward. This is precisely what the Fed intended to happen as Ben Bernanke made clear in his famous "wealth effect" Op-ed in 2010.
It is debatable whether there has indeed been a "virtuous circle" as Bernanke suggested, where higher stock prices were supposed to "spur spending" and "lead to higher incomes and profits."
What is not debatable is that bond yields are at/near all-time lows while stock prices are near valuation highs. This suggests that forward returns from here are likely to be significantly below average. As such, market participants are becoming increasingly reliant on the Federal Reserve to maintain the status quo, and to not pullback from unprecedented measures even five years into a recovery. For if asset prices are elevated in large part because interest rates are artificially low, it stands to reason that if interest rates are no longer held down asset prices will have to fall.
The dilemma today is as follows. We know that the end of QE3 is fast approaching in October, as the Fed indicated in its most recent minutes. We also know that following the end of QE1 in 2010 and QE2 in 2011 we saw correction of 17% and 21% respectively in the S&P 500 (NYSEARCA:SPY).
(click to enlarge)
It is impossible to quantify how much of a premium the market is trading at with the psychological support of QE underneath it, but let's assume based on the action in 2010 and 2011 that it is at least 15% higher than it would otherwise be.
Now, we know that institutional investors are not oblivious to this and we also know that they understand that valuations are getting stretched at current levels. In a recent poll of investors, Bloomberg found that 47% of those surveyed believed the equity market was close to "unsustainable levels" while 14% already saw a "bubble." In the high yield bond market, it the results were even more alarming, with 70% of those surveyed saying the rally in junk-rated bonds was "in a bubble or close to one."
(click to enlarge)
Source: Bloomberg Poll

Two Hedge Fund Managers Walk into a Bar

Say we have two hedge fund managers and they are the only active market participants: Hedge Fund Manager A, let's call him Davy Tepper, and Hedge Fund Manager B, let's call him Billy Ackman.
Davy and Billy are both heavily long equities and well versed in QE and what happened in 2010 and 2011. While they are both still very bullish on equities, they do not like drawdowns and neither do their investors. They are aware of each other's existence but are isolated in the sense that they don't speak to one another before they make a trade.
What are their options here with the equity markets at all-time highs and the end of QE fast approaching? They can 1) remain heavily long (dance until the music stops) and wait until the end of QE to sell, or 2) cheat and sell early while the music is still playing.
A theoretical payoff diagram is below. If Davy and Billy cooperate and stay long, they can have a nice, orderly sell-off at the end of QE with a 5% drawdown. However, Davy doesn't like 5% drawdowns and neither does Billy. They both would prefer a 0% drawdown and have the other fund suffer a 15% drawdown. They would look like heroes in that scenario. By acting in their own self-interest and selling early, though, they will end up suffering more than had they cooperated, each incurring a 10% drawdown.
(click to enlarge)
Now I realize that this is a wild hypothetical and many ridiculous assumptions are involved, but let's think this through for a second.
If one wanted to cheat and sell early what would be the main risk? A market that continued to move higher whereby one would miss out on gains, of course. As we all know, the cardinal sin in hedge fund investing is missing out on upside, even it's in the very short term. If everyone is down and you're down too, that's fine; but if you're flat when everyone else is up that's a one-way ticket back to the sell-side.

How to Keep Dancing Without Going to Cash

Is there a way that one can sell early without suffering the consequences if the market continues to rally for some time? Sure, by subtly adjusting one's beta, or reducing one's risk. And if I wanted to reduce risk without other funds knowing about it, I would do three things:
1) Move out of more illiquid/higher beta small and micro caps and more liquid/lower beta large caps,
2) Move out of more cyclical sectors like Financials and Consumer Discretionary and into more defensive sectors such as Utilities, and
3) Move into one of the most defensive asset classes, long duration Treasuries.
If we look at the markets in 2014 we can clearly see that many funds are likely already cheating in some form.
First, as I wrote about last week, there is a glaring divergence between large and small cap stocks, with the S&P 500 and Dow (NYSEARCA:DIA) still hitting new all-time highs while the Russell 2000 (NYSEARCA:IWM) and Russell Microcap (NYSEARCA:IWC) indices are down YTD.
(click to enlarge)
(click to enlarge)
Second, we are seeing classic late cycle behavior within sectors, with the defensive Utilities (NYSEARCA:XLU) sector outperforming while the cyclical Financials (NYSEARCA:VFH) and Consumer Discretionary (NYSEARCA:VCR) sectors are underperforming. As I wrote about last week, this behavior bears an uncanny resemblance to July 2007.
(click to enlarge)
Lastly, we are seeing a persistent bid in one of the most defensive asset classes: long duration Treasuries (NYSEARCA:TLT).
(click to enlarge)
Not only are they outpacing US equities YTD, but the yield curve has been flattening the entire year, an additional signal of defensiveness within the Treasury market.
(click to enlarge)

One Foot out the Door

Whether you subscribe to my Fed game theory or not, it is important to recognize what the market is telling us. In no uncertain terms, the big money investors are already preparing for more difficult times ahead with "one foot out the door" rotations into lower beta areas of the market. They may not be going to cash as they still fear missing upside, but they are certainly not going to wait for the end of QE to reduce risk in their portfolios.
Many investors will disregard this message that the market is sending, as they are probably thinking that they are like Druckenmiller and "can get out in a week." Perhaps, but if the events following 2000 and 2007 have taught us anything, investors are much more likely to overstay their welcome than to sell early. There is now only 100 days left until the Fed's October meeting where they are expected to announce the end of QE. What will you do?
This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Monday, July 21, 2014

Speculators Cutting Bullish Oil Bets Miss Ukraine Rally

Speculators Cutting Bullish Oil Bets Miss Ukraine Rally

July 21 (Bloomberg) -- On today’s “Insight & Action,” Bloomberg “Money Clip” Host Adam Johnson reports on market response to global crises. (Source: Bloomberg)

The downed jetliner in Ukraine andIsrael’s Gaza offensive blindsided speculators who had cut bullish crude bets on the assumption that risks to supply were diminishing.
Crude futures rose after money managers slashed net-long positions in West Texas Intermediate, the U.S. benchmark grade, by 15 percent in the seven days ended July 15, the Commodity Futures Trading Commission said. It was the biggest drop in bullish wagers since March 2013.
“A lot of people were clearly caught off guard by events,” Amrita Sen, chief oil analyst for London-based Energy Aspects Ltd., a researcher, said by phone July 18.
Prices dropped below $100 on July 15 for the first time in two months as the conflict in Iraq spared the country’s main oil-producing region and rebels in Libya said they would reopen export terminals. Hedge funds had increased bets on rising prices to a record, while WTI climbed to a nine-month high in June after militants from a breakaway al-Qaeda group known as Islamic State captured the city of Mosul.
Crude declined 3.3 percent to $99.96 a barrel on the New York Mercantile Exchange in the period covered by the CFTC. WTI rebounded to $103.13 by July 18 and added 1.4 percent to $104.57 at 2:16 p.m. today.

Photographer: Bulent Kilic/AFP via Getty Images
The Malaysian Airlines jet went down over eastern Ukraine, killing all 298 people... Read More

‘Too Optimistic’

“The speculators built length to a record last month, but there was no real loss of oil so they started to exit,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy, said by phone on July 18. “The events of the last several days show they might have been too optimistic.”
The Malaysian Airlines jet went down over eastern Ukraine, killing all 298 people aboard, July 17, just a day after the U.S. and the European Union imposed new sanctions on Russia, the world’s biggest energy exporter, over its support of separatists in eastern Ukraine. OAO Rosneft, Russia’s largest oil company, and natural gas producer OAO Novatek were among those covered by the penalties.
Israel began a ground operation in Gaza on July 17, also bolstering crude prices. Prime MinisterBenjamin Netanyahu said July 18 that the objective of the ground incursion was to go after “terror tunnels” and restore peace. The Middle East accounted for 32 percent of global crude output last year, BP Plc data show.

Falling Supplies

Futures climbed 1.2 percent on July 16 after the Energy Information Administration said U.S.crude supplies dropped 7.53 million barrels to 375 million in the week ended July 11. Stockpiles at Cushing, Oklahoma, the delivery point for WTI traded in New York, fell by 650,000 barrels to 20.3 million, the least since November 2008. Refineries operated at 93.8 percent of capacity, the highest level since August 2005.
“We have strong refinery runs and a downtrend in supplies both nationwide and at Cushing, giving the market support, but if we look ahead, that’s going to shift,” Tim Evans, an energy analyst at Citi Futures Perspective in New York, said by phone July 18. “We’re probably at our seasonal peak for refinery runs and as they go into maintenance, crude supplies are going to rebound.”
Refinery operating rates usually increase in late spring and have peaked in July during the past five years, EIA data show. Refiners schedule maintenance for September and October as they transition to winter from summer fuels.

Geopolitical Risk

“Unless there is a major intensification of geopolitical risk, it’s going to be hard to keep crude prices up here,” Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC, said by phone July 18.
In other markets, bullish bets on gasoline fell 33 percent to 43,702 futures and options combined, the least since February. Futures declined 2.5 percent to $2.8986 a gallon on Nymex in the reporting period. They dropped 2.14 cents to $2.8603 on July 18, the lowest close since Feb. 28.
Regular gasoline at the pump, averaged nationwide, dropped 0.4 cent to $3.574 a gallon yesterday, the lowest since April 4, according to Heathrow, Florida-based AAA, the largest U.S. motoring group.
Bullish wagers on U.S. ultra-low-sulfur diesel plunged 61 percent to 8,784, the lowest since January. The fuel decreased by 1.81 cents to $2.8555 a gallon in the report week. Diesel fell 1.4 cents to $2.8452 on July 18, the lowest settlement since Nov. 7.

Natural Gas

Net-long wagers on U.S. natural gas dropped 3.1 percent to 226,861, the lowest since December. The measure includes an index of four contracts adjusted to futures equivalents: Nymexnatural gas futures, Nymex Henry Hub Swap Futures, Nymex ClearPort Henry Hub Penultimate Swaps and the ICE Futures U.S. Henry Hub contract.
Nymex natural gas dropped 2.5 percent to $4.097 per million British thermal units during the report week. It fell as much 3.1 percent today after settling July 18 at $3.951, the lowest close since November.
Net-longs for WTI slipped by 45,107 to 259,259 futures and options, the lowest level since the seven days ended Jan. 21. Long positions fell 10 percent 304,462, the least since January. Shorts climbed 38 percent, to 45,203, the highest level since January.
“The only thing you can be safe to predict is a lot of volatility,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.4 billion, said by phone July 18. “Investors are going to be closely following every headline and trading accordingly.”
To contact the reporter on this story: Mark Shenk in New York at
To contact the editors responsible for this story: Dan Stets at; David Marino at Charlotte Porter

Friday, July 18, 2014

Is Natural Gas At Inflection Point?

Is Natural Gas At Inflection Point?

By  |  Commodities  |  Jul 18, 2014 08:01PM GMT  |   Add a Comment
After failing just shy of the $4.90 level for the third time in 2014 most recently in mid-June, Natural Gas prices have depreciated nearly 20%. Front month natural gas prices are currently trading below the $4 psychological level for the first time since mid-January. On a daily chart you can notice that a gap was filled in the chart this week and in my opinion we are very close to an inflection point. While past performance is not indicative of future results the last time we traded around current levels buyers emerged and within 6 weeks prices had screamed 25% higher. The fundamentals are far different this time as we continue to see below normal temperatures contributing to above average injections in our weekly storage numbers (see below). 
Working Gas
Working Gas
The recent large buildup in supplies has been the main contributing factor on natural gas price action. A trend of 13 weekly injections above the 5-year average has kept the bears in the driver’s seat. The polar vortex-like conditions that drained supplies during winter has had the opposite effect of late with cooler temperatures tempering air conditioning demand for natural gas. If and when temperatures rise which is in the cards in the coming weeks I would expect natural gas to find its footing. Under normal circumstances natural gas stockpiles tend to rise in the spring after heating demand fades and hot weather kicks in but the addition usually slows down by mid July and this year that has not been the case. Recent injection levels have been extreme but my point is that this should not continue unabated with warmer weather in the near future. It is such a change just from this past winter when storage levels were near 11-year lows. Looking at a weekly chart we are approaching the trend line that has acted as support for the last two years. A decision will be made in the next couple sessions to see if this level holds or we trade down  to the 61.8% Fibonacci level that on a front month continuation chart comes in 30 cents lower. I have lightly started to tip-toe into bullish trade for aggressive traders. My suggestion is to gain long exposure in November futures and at the same time sell out of the money calls 1:1. Those traders that may want to protect against further immediate downside could also purchase out of the money puts until an interim low is established is August or September contracts. In previous sessions  I had a few clients in August puts but we have let go of those trades at a profit on this week’s descent. On the entire trade we have a realize profit in the August puts and unrealized loss in our November futures, and an unrealized profit in the November calls. 

Weekly Natural Gas
Weekly Natural Gas

Source: Looking at the seasonality in natural gas it would appear that we are following a similar pattern in 2014. Whether we bottom in the coming weeks and start trending higher as we have in the last 15 years remains to be seen. Past performance is not indicative of future results. Assuming we follow a similar pattern we should find a low around $4 and then trade higher into the Fall where I would expect prices to be 40-60 cents higher.
Natural Gas Seasonality
Natural Gas Seasonality

Natural gas extend losses on U.S. stockpile report

Natural gas extend losses on U.S. stockpile report

By  |  Commodities  |  Jul 18, 2014 05:23PM GMT  |   Add a Comment
AA - Natural gas carried Thursday's losses into Friday after data revealed that U.S. natural gas supplies rose more than expected last week.
Natural gas extend losses on U.S. stockpile reportNatural gas prices fall to near session lows on Thursday's bearish supply report
On the New York Mercantile Exchange, natural gas futures for delivery in August traded at $3.940 per million British thermal units during U.S. trading, down 0.37%. The commodity hit a session high of $3.976 and a low of $3.936.
The August contract settled down 4.01% on Thursday to end at $3.954 per million British thermal units.
Natural gas futures were likely to find support at $3.936 per million British thermal units, the session low, and resistance at $4.173, Monday's high.
The U.S. Energy Information Administration said in its weekly report on Thursday that natural gas storage in the U.S. in the week ended July 11 rose by 107 billion cubic feet, well above market expectations for an increase of 98 billion cubic feet.
The five-year average change for the week is an increase of 65 billion cubic feet.
Total U.S. natural gas storage stood at 2.129 trillion cubic feet. Stocks were 608 billion cubic feet less than last year at this time and 727 billion cubic feet below the five-year average of 2.856 trillion cubic feet for this time of year.
Natural gas prices have come under pressure in recent sessions after cooler temperatures moved over heavily-populated Midwest and Northeast regions.
Cool snaps in the U.S. summertime send natural gas prices falling on concerns households will throttle back on their air conditioning and curb demand for the commodity.
Elsewhere on the NYMEX, light sweet crude oil futures for delivery in August were down 0.13% at $103.06 a barrel, while heating oil for August delivery were down 0.17% at $2.8544 per gallon.

Ruble Rebounds From Steepest Decline in Almost 3 Years on Taxes

Ruble Rebounds From Steepest Decline in Almost 3 Years on Taxes

The ruble climbed, paring a weekly decline spurred by international sanctions and a downed plane in Ukraine, as some exporters bought the currency before a tax deadline.
Russia’s currency strengthened 0.2 percent to 35.1110 per dollar by 6 p.m. in Moscow, paring its decline this week to 2.6 percent, the most since the week ended Jan. 26. The yield on government bonds due February 2027 was unchanged at 9.04 percent, a 33 basis-point advance this week.
Russian companies face about 373 billion rubles ($10.7 billion) in tax payments next week, according to Sberbank CIB. The currency tumbled yesterday the most since September 2011 after the U.S. announced new sanctions against some Russian companies and a Malaysian Airlines jet was shot down over eastern Ukraine.
“Exporters were selling today and some long positions were closed” in foreign currencies, Aram Kazaryan, foreign exchange and interest-rates trader at OAO MDM Bank in Moscow, said by e-mail.
Crude oil, Russia’s main export earner, rose for the third day, climbing as much as 0.7 percent to $108.62 per barrel in London. The ruble added 0.4 percent to 47.42 against the euro and strengthened 0.3 percent versus the central bank’s target basket of dollars and euros to 40.6476.

Poor Performance

Russia’s currency is down 6.4 percent against the dollar since the start of the year, the third-worst performance among 24 developing-market currencies.
Foreign investors are already opening new positions, betting on ruble weakness, Kazaryan said.
A further devaluation beyond 36.50 per dollar may prompt the central bank to return to the foreign exchange market, Sberbank CIB analysts led by Tom Levinson said in an e-mailed note. The bank may implement emergency measures before the ruble reaches the level at which it will intervene in the market -- 42.45 against the basket of currencies, the analysts said.
“Renewed sharp ruble depreciation will likely raise the alarm at the central bank,” they said.
The central bank is due to hold its regular interest rate meeting on July 25.
To contact the reporter on this story: Vladimir Kuznetsov in Moscow at
To contact the editors responsible for this story: Wojciech Moskwa at Ash Kumar, Stephen Kirkland

Wednesday, July 16, 2014

Corn Rises as Demand Seen Increasing After Prices Dropped

Corn Rises as Demand Seen Increasing After Prices Dropped

Corn and wheat futures rose in Chicago amid speculation of buying interest from animal-feed makers and investors after grain prices fell to four-year lows this week.
Corn futures have slumped 25 percent in the past 12 months while wheat fell 19 percent amid expectations for bumper crops to boost supply. World grain stocks will rise to a 15-year high by the end of the 2014-15 season as production of both crops outpaces demand, the International Grains Council forecasts.
“We’ve come to a level where it’s starting to be interesting for buyers,” Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, said by phone. “There’s a bit of buyer interest at this moment. It’s always hard to say whether it will resist harvest pressure.”
Corn for December delivery climbed 1 percent to $3.855 a bushel on the Chicago Board of Trade by 7:22 a.m. local time. The grain dropped to $3.7825 yesterday, the lowest for a most-active contract since July 2010.
Wheat for September delivery advanced 0.4 percent to $5.40 a bushel, after prices fell to $5.2425 on July 14, also the lowest since July 2010. Milling wheat for November delivery traded on Euronext in Paris rose 1 percent today to 178.75 euros ($242) a metric ton.
Ending stocks of wheat and coarse grains such as corn and barley are predicted to climb to 412 million tons from 400 million tons at the end of 2013-14, the IGC said earlier this month. Inventories will be the highest since the end of the 1999-2000 season, the London-based agency estimates.
Corn’s relative strength index, a gauge of price momentum, was at 19.6 by the close yesterday and wheat was at 28.6. Some analysts view levels below 30 as indicating oversold conditions.
“Grain futures are higher on bargain-hunting and short-covering,” Paul Georgy, the president of Allendale Inc., wrote in a market comment, referring to some investors closing bets on falling prices. “Bargain-hunters are stepping in and buying corn and soybeans.”
Soybeans for November delivery climbed 0.7 percent to $10.94 a bushel in Chicago. Prices fell to $10.65 on July 11, the lowest since October 2010.
To contact the reporters on this story: Rudy Ruitenberg in Paris at; Phoebe Sedgman in Melbourne at
To contact the editors responsible for this story: Claudia Carpenter at Dan Weeks, John Deane