“No hidden fees” fintech lender settles with CFPB for, amongst other things, charging hidden fees

LendUp CEO Sasha Orloff tells me they’re giving the startup time to build a long-standing brand in finance “the right way”, rather than squeezing as much profit as possible from its customers in the short-term.

Everything has to be transparent. There is no fine print. No hidden fees. And everything has to get someone to a better place” Orloff insists.

That’s from a TechCrunch story in January about LendUp, a payday lender backed by Andreessen Horowitz, Google Ventures, QED and Kapor Capital, with debt funding from Victory Park Capital.

And this is from a press release just put out by the California Department of Business Oversight:

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Inquiring minds want to know: can blockchain reconcile 200% institutional ETF ownership?

A good questioned posed to us by former financial “ops guy” Fred Sommers (now retired) on Tuesday, relates to whether or not a blockchain can deal with the phenomenon of lots of different institutional parties thinking they own the very same ETF share? Read more

The diminishing returns of blockchain fetishism

Rather than pretending resources spent on data systems in information exclusive industries (like banking) can lead to longstanding productivity gains which don’t just buy us a little time until the next paperwork crisis in five years time, perhaps we should invest that money in the expansion of industrial capacity?  Read more

Markets Live: Tuesday, 27th September, 2016

Live markets commentary from FT.com 

Rocket Internet would like to see your business idea


Rocket Internet, the Berlin-based clone factory that made its name copying other people’s business ideas in new markets, is looking for Europe’s “most promising start-ups, scale-ups and tech for social impact companies” and would like to hear from you. Read more

Racing to the bottom in boats, clouds and ZEDEs

E-commerce often gets billed as the great equaliser of trade. The argument is that it allows small businesses to reach buyers who’d otherwise be accessible only to multinational corporations, which can afford the necessary lobbyists and project managers who work on boring but important things like logistics.

The United Nations Conference on Trade and Development, or UNCTAD*, did its best to make that case when it named Chinese e-commerce tycoon Jack Ma as a special adviser last week. Read more

How would a Fed rate hike affect consumers?

We don’t really understand how changes in the level of short-term interest rates affect things we actually care about, such as growth and employment. There are too many moving parts and leaps of logic required, many of which are based on bogus assumptions about how the world works.

So it’s always nice to find new research into a small piece of the monetary transmission mechanism that’s grounded in facts. Researchers at TransUnion, the credit reporting company, looked at which American consumers would be exposed to an increase in the Federal Reserve’s policy rate corridor and the dollar magnitude of the impact of different tightening paths. We recently had a chance to discuss their findings with Nidhi Verma, who led the project. Read more

FT Opening Quote: Sterling windfall for Wolseley

Sterling windfall for Wolseley, UK oil and gas down, dollar firms after US debate. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading


– The penny stock chronicles, a series.

– The stakes of the helicopter money debate, a primer from DeLong.

– How power poses are dead.

– Why traffic is fake, audience numbers are garbage, and nobody knows how many people see anything.

– And how Zombie Moore’s Law shows hardware is eating software. Read more

FirstFT – A fiery first presidential debate, the prospect of bank break-ups and going au naturel in Paris

Stakes could not be higher as American polls tighten but much depends on which Donald Trump shows up Read more

SDRs and the renminbi

China will join the exclusive club of “hard currency” issuing countries when its currency, the renminbi, becomes a fully fledged member of the IMF’s special drawing right basket on October 1. Read more

Good idea, bad idea: Yield targeting edition

Good idea: More reactive than a quantitative target; can signal long-term commitment to policy; potentially reduces purchases required if market believes your yield target is credible; potentially good for effectiveness of fiscal policy; potentially good for banks as it can imply a steeper yield curve; and allows for an “automatic exit” from the policy if everything goes to plan.

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Guest post: Productivity and shocks

This guest post is from Peter Doyle, an economist and former IMF staffer Read more

Markets Live: Monday, 26th September, 2016

Live markets commentary from FT.com 

Deutsche’s new market cap, in context

Bear with us, it’s down here somewhere…

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FT Opening Quote: City fears for a “hard” Brexit

City fears for a “hard” Brexit, Aldi to revamp stores, investment boost at MonarchFT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here.  Read more

Further reading


– John Hempton with comments on investment philosophy.

– Gavyn Davies on the global pivot towards fiscal policy.

– George Magnus on the City and passporting.

– How some “six in ten rupees deployed by Tata are in businesses yielding returns below its cost of funding…”

– And Macro Man on the student loan debacle. Read more

FirstFT – Russia accused of supporting ‘barbarism’, living without a smartphone and a rare view of imperial China

Sign up to receive FirstFT by email here.

The US accused Russia on Sunday of supporting “barbarism” over the bombing of the Syrian city of Aleppo as the west stepped up diplomatic pressure on Moscow. Read more

Thought for the weekend

Week Five: FT Alphaville Fantasy Football League

Our league hasn’t been going all that long, but it seems like some congratulations are in order. Specifically self-congratulations.

Despite some trouble at the start of the season with a small number of bad actors, we have managed to clean up the system. Everything is in order. Everyone is on net positive points. Everyone got a net positive score last weekend. Everything is ok. The market works. Read more

Are bank reserves meaningless?

Is the central bank in the business of lending bank reserves for final and absolute settlement purposes, or is it now in the business of lending safe assets like Tbills for final and absolute settlement purposes?  Read more

Alphachat: Tina Fordham on pricing in the risk of Trump vs Clinton

Our guest this week was Tina Fordham, chief global political analyst for Citi and lead author of papers on geopolitical risk and women in the global economyRead more

Brexit, then and now

One of the challenges of understanding the consequences of Brexit is the apparent lack of precedent for such an event. But this pre-supposes that only the recent past is relevant. If instead we use the full sweep of history, then we can find the obvious precedent of the English Reformation that started in 1534.

… the “Brexit” of 1534 was far from straightforward, and nor did it stop conflict within the country. As for the economic consequences, GDP per capita barely changed for one hundred years after before falling sharply during the Civil War. It took colonial expansion, notably to India, and later in the industrial revolution in the 1700s for growth to really pick up in England.

– That’s from Nomura’s Bilal Hafeez, with a bonus chart too. Read more

Fintech’s data problem

The landmark securitisation of UK “peer-to-peer” consumer loans highlights a structural advantage banks have against their fintech rivals Read more

Markets Live: Friday, 23rd September, 2016

Live markets commentary from FT.com 

Hanjin could be “the 100­year flood in the container industry”

Admiralty law is old, fun and messy.

From CreditSights:

The order of claim seniority is cargo, crew, supplier, mortgage holder. What is unique is a claim against a company or vessel can be enforced against a different asset or bank account. This allows creditors greater scope but also can generate a blizzard of litigation.

In a typical but very simplified case: 1) a mortgage holder receives a judgment in local court for non payment; 2) checks to see where any debtor vessels are steaming; 3) goes to that port with a lawyer and replacement crew; 4) court accepts the judgment; 5) port sheriff, lawyer, and replacement crew “physically” arrest the vessel, pay off the existing crew, cover supplier claims, and deliver the cargo if the vessel is not empty. Problem is the mortgage holder now owns a ship, and that costs cash money every day. If the vessel is not marketable, there usually is an “as is” auction under port sheriff supervision.

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FT Opening Quote: Sports Direct CEO quits

Sports Direct CEO quits, New CFO at Fortescue Metals, Carney likely to stay on. FT Opening Quote, is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Friday,

– How Hampton Creek sold Silicon Valley on a fake-mayo miracle.

– Boy meets girl, boy gives girl inside information, SEC says.

Of Leon Cooperman: “The question is not only whether he can prevail against the SEC but also whether he can calm anxious investors.”

Today in disruption and cow dung economics: “In the past, people only used urine and dung, and you needed to know somebody in a gaushaala (cow shelter), to get them. But who has the time these days, especially in the cities? So what we have done is just made it more accessible, in a more variety of products, in these busy cities.” Read more

FirstFT – The world’s biggest data breach, Apple eyes Samsung’s turf and the strangest research of the year

A ‘state-sponsored actor’ steals information from more than 500m Yahoo users Read more

Banks have a dubious business model and markets have noticed

The tendency toward restriction that runs through the tone of the presentation seems to me to be quite problematic. It seems to me to support a wide variety of misguided policy impulses.

–Larry Summers, Jackson Hole 2005

You might think Summers had changed his mind in the eleven years since he called Raghuram Rajan a “Luddite” for daring to suggest the financial system had gotten riskier since the 1970s thanks to competition and the rise of performance-based pay. After all, in a new paper, Summers and graduate student Natasha Sarin not only cited Rajan’s work approvingly, they concluded lenders are still too vulnerable to panics. You would, however, be wrong. Read more