“[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
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
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
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
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
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
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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
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
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
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?
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 is available on Acast, iTunes and Stitcher. Read more
Live markets commentary from FT.com
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
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
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
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
Trump has appealed to voters to yearn for a leader who will take actions to protect them Read more
What’s the difference between a perpetual zero-coupon government bond and charity? Not much… Read more
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
Transmission channels of monetary policy in the current environment speech by Peter Praet, Member of the Executive Board, European Central Bank. Read more
Live markets commentary from FT.com
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
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
The arrest could fuel more calls for HSBC to face full criminal charges Read more
In our inbox just now from Stephan Tual, Founder & COO, of Slock.it, somehow related to the DAO and Ethereum by way of an unquantifiable number of revolving doors between respective blockchain projects/cabals:
Ethereum fork successful, all DAO token holders to be made whole
The title says it all – end of the hack that never was.
On Ethereum, Code is Law. It’s the network’s participants that determine its evolving rules, voting by way of updating their software. Today, they’ve done just that to nullify an exploit found in the DAO, proving their capability to self-govern effectively.
Happy to chat at anytime on stephan.tual over skype.
Or, the sharing economy, Marx and you, from Macquarie’s equities team (with our emphasis):
Louis-Napoleon Bonaparte had the unique distinction of being the last French emperor and the first democratically elected French president. His sweep to power by a popular vote in 1848 was achieved by relying on what Karl Marx described as ‘lumpenproletariat’ vote. What is ‘lumpenproletariat’? In Marxist theory these are sections of society that slipped below conventional occupations, and hence no longer belong to either proletariat or capital and financial classes. As described in greater detail in the note, according to Marx it includes various groups, ranging from “discharged jailbirds and vagabonds to pickpockets, tricksters, pimps, porters, tinkers….disintegrated mass, thrown hither and thither.’ It was the same group that concurrently fuelled the rise of the powerful ‘anarchist’ movement, dedicated to ‘blowing up the system’, heightening social and geopolitical tensions led mostly by well-to-do and educated elite.
Live markets commentary from FT.com
That’s the ECB’s corporate sector purchase programme (CSPP), of course, which is having what looks to be an easy-to-spot effect on the cost of borrowing for those lucky enough to be inside the fold.
Why did Americans (and Spaniards and Irish) borrow so much against housing in the 2000s, only to find themselves stuck with more debt than assets? It sounds like a simple question, but it’s surprisingly difficult for economists to agree on an answer.
The standard approach is to attribute the excesses to changes in the behaviour of lenders, who, for whatever reason, became much more eager to give mortgages to people they previously would have avoided with terms they previously would have considered reckless. (For more on the European cases, see here.)
For example, about a third of all mortgage debt originated in 2005 and 2006 was either subprime or “alt-A”, according to data from Inside Mortgage Finance, compared to the stable 1990-2003 average of about 10 per cent. Subsequent experience tarnished these product segments so badly they effectively disappeared. Read more