Markets Live is on a one-week break

Bryce has fled north of the border; Murphy’s skulking at home in London. There’s no session of Markets Live today, or any day this week. Unless there’s a market emergency, of course. Normal service will be resumed on August 1. Read more

On Funding Circle’s valuation

Private technology startups are pretty tough to value, particularly if you’re on the outside looking in.

First, you have the inherent subjectivity in valuing any company. Investors can differ on which metrics are most appropriate and what to include or exclude in their calculations. Even a price set by a reasonably liquid market doesn’t settle the argument; after all, one of the reasons an investor buys or shorts a stock is that they disagree with the market.

Second, you have opaque and complicated capital structures. The classic, clean idea of selling equity involves a certain number of shares at a certain price giving a straightforward percentage ownership of a company. In the tech world, however, liquidation preferences are common and the blurred line between debt and equity make it difficult to deduce anything sensible from fundraising announcements. Read more

FT Opening Quote: Reprieve for Openreach

Ofcom rules on Openreach, CMC rules on Labrokes-Coral merger, Sergo shrugs off Brexit gloom. FT Opening Quote is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

A friendly reminder that return is “not really a function of yield”

When x happens, yields fall — Rule 1?

It’s not a search for yield, it’s a search for safety — Potential Rule 2?

Two charts to make the point for us once again from the good folks at BofAML’s relative value department: Read more

Further reading

Elsewhere on Tuesday,

- Says the BoE: “CB digital currency… issuance could have far-reaching consequences for commercial and central banking – divorcing payments from private bank deposits and even putting an end to banks’ ability to create money.”

- Seeing China through its economic history. And how the west was won.

- Banks giving up on their dreams of global empire…

- More on Larry Ball’s contention that Lehman could have been saved by the Fed.

- “Justin Zhen was in his WeWork [ the world’s ninth-richest startup, valued at $16 billion] office in midtown Manhattan on July 19 when he published the blog post that would result in his startup, Thinknum, being removed from the co-working space three days later.”  Read more

FirstFT – Sanders’ ringing endorsement, the world’s fastest-growing people and Britain’s thriving nostalgia industry

Sanders urges his supporters to ensure that Hillary Clinton beat Donald Trump in November Read more

The Metro Bank book ban

“[Censors] rake through the entrails of many an old good author, with a violation worse than any could be offered to his tomb.” – John Milton

We live in sad times. Across the world, radicalism and hate is on the rise. The future of western democracy itself is uncertain. And on top of all this, yet another injustice. Read more

In knighthood news

Your lady here is sort of suggesting here I should remember about a board meeting in 20-whatever it was…

– (Sir) Philip Green, evidence to the parliamentary committee inquiry into the collapse of BHS, last month Read more

FT Opening Quote: Philip Green in hot water

Philip Green slammed by MPs, an approach for William Hill and a warning from Rangold. 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

How to trade President Trump/ Clinton

Below the break is just one of what we are sure will be many US election guesswork charts.

It’s from HSBC this time and includes solid ‘buy gold’ and ‘currency war’ moments.

The shorthand at the top of each column could be expanded thusly: Read more

Further reading

Elsewhere on Monday,

- Gavyn Davies: Regime change in the financial markets.

- Bill McBride: The future is still bright!

- You break it, you pay for it, Brexit edition.

- John Lanchester on Brexit: “One of the things you notice, travelling around the country talking to people about economics, is that young people in particular feel they are living in an economic system rather than a political one.”

- Er, and Trump and Putin is maybe, actually, possibly, a real thing? Read more

FirstFT – Democrats in turmoil, the cheapest generation and why we are all so tired

Sign up to receive FirstFT by email here

The head of the Democratic National Committee has resigned after the leaking of 20,000 emails exposed rifts in the party leadership, throwing Hillary Clinton’s campaign into turmoil on the eve of this week’s convention. Read more

From Cardiff Garcia, locked-down earlier in Munich…

Quick audio vox pop here from Cardiff, who happened to in a restaurant near the site of the lone gunman attack on Friday night… Read more

Thought for the weekend

I do like the simplicity of the one product. We’ll probably expand in time, though. Maybe people would cook more if they could do things a little differently. Maybe, functionally, a new ingredient would allow that. People are still using eggs and milks and bread. When were those invented? People upgrade their iPhones every couple of years but we’re still eating the same foods that our ancestors did.

– Rob Rhinehart, inventor of Soylent meal-substitute gunk, enjoying Lunch with the FT

Engineers vs urban geometry

Should we really be surprised then that someone like Elon Musk, a man not just from Mars but an active card-carrying citizen of Mars, should be continuously confusing what are ultimately social problems for engineering ones?
 Read more

Peter Thiel bets on European deposit protection

Take a look at Deposit Solutions, a Berlin-based fintech company backed by Peter Thiel. This week it raised another €15m from the Trump-supporting billionaire and other investors at a reported €110 million valuation. What’s the idea behind the four-year-old startup?  Read more

Alphachat guide: the tradeoffs of city life, and a new era for the business of mixed martial arts

Alphachat is available on Acast, iTunes and Stitcher. Read more

Markets Live: Friday, 22nd July, 2016

Live markets commentary from 

Re-setting Ratesetter’s provision fund

Ratesetter founders Rhydian Lewis and Peter Behrens

Is 22 per cent a big number?

That’s how much Ratesetter increased its expected future losses on Thursday, “partly to reflect greater economic uncertainty due to external events”. The online lender, which is one of the UK’s top three, added £3m to the £13.9m of expected claims on its provision fund, which serves as protection against defaults for its retail investors.

Those “external events” are presumably a reference to Brexit, but sceptical readers might also remember the higher than expected defaults on its 2014 cohort of loans. At the start of that year, Ratesetter had expected a 2.07 per cent default rate. So far, defaults on the 2014 cohort of loans have reached 2.915 per cent. It’s also worth noting that last month Ratesetter brought on board a new chief risk officer, Cyrille Sallé de Chou, who joined from Lloyd’s. Read more

It’s a negative yielding world, we just get to scramble in it

Here’s a rough piece of calculation based on the last few years of news: When x happens, yields fall. An example of this post-GFC rule-of-thumb was Brexit and its fallout.

The potential lesson from said rule is that yield hunting isn’t fun anymore, say Credit Suisse’s William Porter and team, with our emphasis: Read more

FT Opening Quote: A bad week for Mike Ashley

MPs lambast Sports Direct’s Mike Ashley, Heathrow’s Brexit boost and good news at Vodafone. 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,

- Musk just threw down the gauntlet to Uber, public transport and logistics.

- The Brexit campaign that was, from a PR/ marketing perspective.

- The meritocracy is just another way to put you down.

- Eggertsson and Summers on secular stagnation, how it spreads and how it can be cured.

- “The case for cash is not proven, but it needs to be heard.”  Read more

FirstFT – Trump’s dark speech, the man who would replace food and how Japan came to believe in depression

Trump has appealed to voters to yearn for a leader who will take actions to protect them Read more

Supersonic helicopters with stealth capabilities and formidable arsenals…

What’s the difference between a perpetual zero-coupon government bond and charity? Not much…  Read more

It’s not just non-performing loans…

Mario Draghi on banks and monetary policy transmission from the ECB’s press conference today:

You’re right, banks are important, especially important for the euro zone, which is basically a bank-based economy where the credit intermediation goes mostly through the bank lending channel. Bank equities in the aftermath of the Brexit were especially hit. And especially in the euro zone, and especially those banks with a high share of NPLs, or non-performing loans. Read more

Festival of Finance: Podcasts Part Four (final batch!)

Transmission channels of monetary policy in the current environment speech by Peter Praet, Member of the Executive Board, European Central Bank. Read more

Markets Live: Thursday, 21st July, 2016

Live markets commentary from 

FT Opening Quote: The Daily Mail down from Brexit high

The party is over for the Daily Mail, EasyJet mulls European move and Unilever suffers currency woes. FT Opening Quote is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Thursday,

- Levine 1: Insider trading is sometimes a family affair.

- Levine 2: HSBC currency traders got greedy on Christmas.

- Emad Mostaque: Putting Turkey’s purge in perspective.

- George Magnus: No RMB crisis like last year, but it could be a false sense of security. Read more

FirstFT – HSBC forex traders charged, hotels v Airbnb and the graveyard of the Earth

The arrest could fuel more calls for HSBC to face full criminal charges Read more