Spot the difference, Tesco edition

Here is the Tesco share price, which you might notice is getting into lost decade territory.

Here meanwhile are Wednesday’s results: Read more

The linguistic verdict: Dorian is probably not Satoshi

Everyone has a linguistic signature (apparently).

Luckily for Bitcoin sleuths trying to determine the real identity of Satoshi Nakamoto the existence of *that* Bitcoin white paper provides everyone with some valuable clues. Read more

Capital controls, Ukraine style

From the National Bank of Ukraine:

15.04.2014 press release Read more

Markets Live: Wednesday, 16th April, 2014

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Construction vs manufacturing re(-re)visited, and the US labour market

The graph above from CreditSights, which shows cumulative net job changes by industry since the start of the recession, can be used to tell a general story about the US economy and a more specific story about the current labour market recovery. Read more

The (early) Lunch Wrap

Ukraine tensions rise || Tesco profits drop, but shares bounce after long decline || Starbucks moves offices to London in reputation rebuilding exercise || Burberry sales jump, but currency to hit profits || European stocks rise Read more

When will the primary party end?

Actually, the way Creditsights frames the question about credit issuance is “can it continue?” which points to their answer: probably, even if not at peak levels.

Speaking of which, if you have an investment grade credit rating, you must have been enjoying the party.

USD fixed-rate investment grade corporate issuance totaled $265 bn in the first quarter, which was a $75 bn increase over 4Q13 numbers and $30 bn greater than the amount seen in the first quarter of 2013. The 1Q14 tally only trails two prior periods: the $285 bn in 1Q09, when issuance was boosted by the TLGP program, and the $278 bn seen in 1Q12.

 Read more

Further reading

Elsewhere on Wednesday,

- The problems of HFT, Joe Stiglitz edition.

- Defending kickbacks.

- Failure is not precisely the goal at Google X.

- Abenomics and doing more with less. Read more

The 6am London Cut

Markets: Asia-Pacific bourses were on the rise, led by Japan, but Greater China equity markets pared gains after the world’s second-largest economy reported its slowest quarterly growth since late 2012. The tone across the rest of the region was broadly positive after the S&P 500 swung out of negative territory early in the New York session to close 0.7 per cent higher. Forecast-beating earnings from Coca-Cola and Johnson & Johnson helped the mood. (FT’s Global Market OverviewRead more

The Closer


- How much trading should there be? Read more

Putin’s gold level: $1300/oz

Not much market reaction yet to reports of an “anti-terrorist operation” in Ukraine apart from gold, which had broken through a key resistance level before Russia said that its neighbour is close to civil warRead more

The remarkable productivity stagnation of the US construction sector

For the nearly half-century through 2012, annual labour productivity growth in the US construction sector averaged close to zero, and it has been negative for the past two decades.

Here’s a graph constructed last year by Paul Teicholz, a civil engineer who has been working on construction technology issues for a long time and who produced the best concise analysis of the sector’s productivity that I’ve come across: Read more

Markets Live: Tuesday, 15th April, 2014

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The (early) Lunch Wrap

Ukraine raises rates as west discusses more sanctions || Diageo offers $1.9bn for greater stake in United Spirits || Google swoops on dronemaker Titan || AngelList sees $25m investor fund || ‘Heartbleed’ steals social security and mums’ messages || Hong Kong regulators move to safeguard bank liquidity || Copper miners look past present pain to future gain || UK inflation falls to 1.6% || Markets Read more

A brief history of M&A

SocGen are at it again, and this time they appear to be mid-thrust:

Disappointingly, there’s no introspective mention of value destruction to be seen, but we do get price defense as the main justification for M&A activity: Read more

Further reading

Elsewhere on Tuesday,

- The Mystery of the Dots, Part II.

- Three expensive milliseconds.

- Live a modern life while frustrating the NSARead more

The 6am London Cut

Markets: Japanese stocks were on pace to end a seven-day slump after Wall Street stocks rebounded from a two-month low, although Chinese equities faltered as the central bank signalled concerns over the boom in lending. (FT’s Global Market OverviewRead more

The Closer


- Short video of Piketty explaining “Capital”. Diane Coyle and Noah Smith on the book. Read more

Buffett derivatives, just ignore the volatility

There’s an old Russian proverb, popularised by Ronald Reagan, which comes up among due diligence types: trust, but verify.

It seems appropriate to keep it in mind when thinking about Berkshire Hathaway, which is a sprawling insurance company and conglomerate indulged by the market largely on the understanding that its charismatic, cunning and greedy-in-a-good-way leader will do the right thing.

Hence our interest in a series of very large derivative contracts written by Warren Buffett between 2004 and 2008, which reveal a willingness to at least work creatively within the confines of fair accounting disclosure. Read more

SOE this is what passes for reform?

When is reform of a Chinese state-owned enterprise not reform at all?

When it’s not going to create value.

Arguably, for example — when it’s really a reverse merger that allows a parent to tap international capital markets and bail out a struggling subsidiary that lost heavy in Australian iron ore mines. Arguably, we said.

Or — an oil major selling a third of its enormous marketing segment to state-backed pension funds, in order to access private capital and boost its already dominant position. Again, arguablyRead more

Markets Live: Monday, 14th April, 2014

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The (early) Lunch Wrap

Ukraine government may be open to referendum || Peugeot sets out recovery plan || Temasek targets middle class growth || London house prices go a bit more mental || Relativity Media takes on Disney for Maker Studios || Stocks down Read more

Rotate, reflate, reflect, placate

Tech is down, Treasuries are up, stocks are flattish: whatever happened to asset rotation, great or otherwise?

For an answer, we turn to the flows as interpreted by Nikolaos Panigirtzoglou and team at JP Morgan, who have found that the bond selling of late last year has reversed:

non-bank investors appear to be responsible for most of this year’s bond rally of which retail investors were one. Neither speculative investors, who appeared to have increased their US rate shorts by $110bn duration-weighted YTD, nor banks who, driven by FX managers, sold USTs this year, appear to have caused this year’s bond rally.

 Read more

The Lok Sabha of dreams

If we come, will they build it? Here’s the Indian economy charted, by Citi:

 Read more

Further reading

Elsewhere on Monday,

-The r’s of Piketty and Summers.

- R vs. g, robots versus globalisation.

- TED congratulating the SEC for finally seeing the light of intelligent market regulation in the M&A world.

- The problem with profitless start-upsRead more

The 6am London Cut

Markets: Asian markets were under pressure in the face of fresh tension in Ukraine and after the S&P 500 dropped to a two-month low on Friday. However, action was muted as investors waited for key Asian data later in the week, including China GDP figures on Wednesday. The US earnings season also ramps up, with about 10 per cent of S&P 500 companies set to report this week. (FT’s Global Markets OverviewRead more

Leaving Las Bambas

We take an unseemly level of interest in Peruvian copper mine projects on FT Alphaville. It’s a side-effect of writing for Lex.

But then so too has a consortium of highly strategic Chinese resources investors (Minmetals, Guoxin International Investment, Citic)…

They’ve bought Glencore Xstrata’s stake in Las Bambas, a very big Peruvian copper asset, for $5.8bn cash, according to a release from Baar, Switzerland on Sunday: Read more


We referenced the obvious similarities between the oil market and the Bitcoin market — specifically with regards to cost of production and capital intensity preventing a competitive threat to Opec — in our previous post.

In a fortunate coincidence, John Kemp at Reuters today directs his readers to the myth-busting 2004 work of former MIT professor Morris Adelman, who compellingly argued against the “oil is running out, prices can only go up” thesis. Read more

Let them eat Bitcoin mining rigs

Bitcoin prices are in retreat, seeming to suffer from the triple whammy of a Chinese crackdown, ongoing repercussions of the MT.Gox implosion as well as the IRS deciding that miners will not be immune to tax in the US.

If you view Bitcoin as a high-risk tech investment, the price might also be reflecting wider tech rot as well. Read more

Markets Live: Friday, 11th April, 2014

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