Behold! A regulatory clampdown in Cyprus

Yes, really.

Well sort of.

Ok, some might see it as less than swingeing. Read more

Our podcast chat with Reihan Salam

Conservative commentator and National Review executive editor Reihan Salam recently stopped by the FT’s New York studio to chat with Cardiff about his data-driven take on a modern conservative economic policy.

The two discuss Reihan’s most recent paper, “Rethinking American Conservatism”, which was serves as a follow up to the book he co-authored with Ross Douthat, Grand New Party, as well as a host of other economic topics.

The full interview is below. Read more

Alphachat: The US SUV boom, Jamaica’s IMF success and a chat with Reihan Salam

Alphachat is available on Acast, iTunes, and Stitcher.

 Read more

Markets Live: Friday, 27th November, 2015

Live markets commentary from 

On the Swiss franc’s non strength

Remember when the SNB stopped defending its floor against the euro in January and the Swiss franc’s value surged? Not so much on Friday:

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What are the chances of an actual currency crisis in China?

First things first, and to repeat ourselves, China’s recent devaluation was pathetic.

We mean, really, what is this?

 Read more

Further reading

Elsewhere on Friday,

- Banks are approaching an ‘Uber moment,’ ex-Barclays CEO Antony Jenkins says.

- Turkey is trying to reassure investors it has no intention of curbing the independence of the central bank.

- A quick peek at some optimistic housing forecasts for 2016.

- “Iceland still needs to bring to justice more of those responsible for breaking the law while breaking the banks.” Read more

FirstFT – The fate of the EU, good news for investment bankers and Goldman enlists rugby guru

Southern EU countries had yet to implement policies agreed to stem refugee influx Read more

An end to dropped US cellphone connections? Well, maybe

There’s a chance here to revisit that failed bear raid on Markets Live favourite Allied Minds.

Back in September, Kerrisdale Capital of New York issued a scornful report, suggesting this London-listed Boston-based venture capital business focused on university and military R&D, was a sack full of duds trading at 3x NAV. The stock price reacted with a 37 per cent crash, but Allied Minds subsequently staged a partial recovery — helped by some buying by long-term backer Neil Woodford and also the lack of any follow through attack from Kerrisdale, who have gone rather quiet. Read more

When bank balance sheets become scarce commodities

Distortions are occurring in collateralised funding and swap markets meaning secured funding is weirdly costlier than unsecured.

Bankers are blaming post-crisis leverage ratio regulation for the anomaly.

But what really does the aberration in the collateralised Fed-funds spread reflect?

Credit Suisse’s FI team puts it relatively simply this Thursday: it’s all about the cost of balance-sheet rental, which is now as scarce a commodity as oil: Read more

Markets Live: Thursday, 26th November, 2015

Live markets commentary from 

Knowing me, not knowing you – Barclays edition

Barclays was slammed with a £72m FCA fine over financial crime risks on Thursday, this time for “ignoring its own process” over how to handle risky very rich clients and basically, allowing the (theoretical) risk of money laundering to creep in via an elephant deal of the century with a “Politically Exposed Person”.

Corporate governance fears aside, the FCA case file makes for fascinating reading (as usual). Read more

Nothing but a ‘G’ thang

It’s the eternal question with environmental, social and corporate governance: Does it just make investors feel good, or is it good for making money?

Barclays analysts have come away with what they’ve dubbed a “surprising conclusion” in a recent report assessing the US corporate bond market in light of ESG ratings. Read more

The declining velocity of end of year predictions… and money

A suggestion for the ever earlier starting 2016 bet mix… this trend just keeping going:

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FT Opening Quote – GSK expects China growth

GSK expects to see a return to growth in China, amid Mao quotations and Autumn statements. 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

Elsewhere on Thursday,

- Researchers at Tufts are teaching robots to say “no” to humans.

- “History suggests that if the Fed is forced to adopt a rule for monetary policy, it will eventually have to abandon it.”

- The rise and fall of Brazil’s banking golden boy. Read more

FirstFT – Billionaire banker arrested, China’s most powerful weapon and where to work if you’re priced out of London

André Esteves was arrested as part of the sweeping investigation into corruption at Petrobras Read more

SWF redemptions as a 2016 risk factor

Remember the days when SWFs were considered the saviours of the universe? The white knights of the banking crisis? The clients every asset manager wanted to have.

Well, fast-forward seven years or so and they’re bullet point number seven in Morgan Stanley’s “10 Surprises for 2016″ outlook piece. A bigger risk, they add, than retail mutual fund redemptions. Who’d have thought, eh? Read more

Markets Live: Wednesday, 25th November, 2015

Live markets commentary from 

Cœuré and the paradox of integration; a.k.a how the euro project accidentally created a homogenised monster

A kindly hat tip to the FT Alphaville reader who directed us to the following speech by the ECB’s Benoît Cœuré from last Friday, and specifically this observation:

If every economy were to react to their domestic challenges by exporting their slack, it would only trigger a race to the bottom.

 Read more

FT Opening Quote – Osborne to signal home building boom

The chancellor will have good news for hod carriers in his Autumn Statement, while Thomas Cook is finally back in the black. 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

Elsewhere on Wednesday,

- Musk v Bezos, Twitter edition.

- Just guess who makes those Donald Trump “Make America Great Again Hats” trucker hats.

- Does financial inclusion exclude?

- Time to hit the books: Most of what you learned in Econ 101 is wrongRead more

FirstFT – Putin lashes out, a uniquely Italian answer to terrorism and how Einstein changed everything

Putin accused the Turkish government of providing financial and military support to Isis Read more

Shkreli’s new target market: 1100 Americans-a-year

The name should ring a bell — Martin Shkreli — that smirking chap at Turing Pharmaceuticals who jacked the price of anti-parasite drug Daraprim 50-fold, and in the process brought the widespread practice of pharma profit gouging into the public eye.

Now he’s gone and done this:

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Dreams and growth; risky, also interesting

Via Chinese research shop Red Pulse on Tuesday:

Ant Financial announced the beta version of an online private equity trading platform, Antsdaq, on November 23. Antsdaq supports four different types of products, aiming at fundraising between RMB2m and RMB10m. Trial fundraising will start on November 30, through to the end of December. However, investors need to prove net assets above RMB1m in order to be qualified; this can be illustrated by balances on Yu E Bao and other investment tools from Ant Financial, or tied to a credit card with an RMB50,000 limit.

For those who don’t know, Ant Financial is Alibaba’s financial services affiliate which (among other things) manages Alipay’s Yu E Bao money market product offerings. Alipay is Alibaba’s answer to PayPal, albeit a much more shadow banking-esque incarnation of the latter. Read more

Pettis on the tragedy of China’s common private central banks

“Hold on, did we mean to create all of these quasi central banks?”

“Errr, I suppose? We certainly decided to lay out that moral hazard blanket, remember? And we must have kn…”

“Yeah. Yeah. You’re right. We planned this. Must have done”

- China’s policy makers, probably never.

And from Michael Pettis’s latest note, with our emphasis:

Almost all credit was being treated, it seemed, as if it were sovereign credit. This mattered for a lot of obvious reasons, but Rodney Jones, who runs Wigram Capital and helped organize the seminars, made what I thought was a very interesting point. At the extreme, he pointed out, much of the short-term paper issued in China was, in the eyes of investors, a lot like PBoC bills. They were liquid, short-term money substitutes with little to no credit risk. Did it make sense, he wondered, to think of China as an economy with potentially thousands of mini-central banks, all issuing nearmoney instruments, and if so, how might we model the monetary and economic impact?

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Saudi Arabia and the curious case of Gorbachev anxiety

The tentative steps Saudi Arabia is taking towards economic liberalisation are, it seems, unleashing a strong case of Soviet-era glasnost and perestroika anxiety among Saudi upper echelons.

The kingdom’s first flirtation with market liberalisation came in June with the opening up of the Tadawul, the biggest stock market in the Middle East.

But with oil prices collapsing from a June 2014 high of $115 a barrel to below $50, coupled with the theocracy’s political and cultural fears connected with liberalising too fast, Citi’s chief political analyst Tina Fordham and chief economist Willem Buiter say Saudi Arabia will be mindful of not repeating the mistakes of the Soviet Union in that regard by letting go of too much control.

One case in point: A Palestinian poet was sentenced to death last week for renouncing Islam.

The collapse of the Soviet Union in the wake of Gorbachev’s reforms is a true Saudi obsession at the moment, Buiter and Fordham told FT Alphaville at a sit-down last week. As Buiter added, “when the Soviet Union tried it, it all went oink.” Read more

Markets Live: Tuesday, 24th November, 2015

Live markets commentary from 

A Glencore-o-meter, courtesy of Liberum

Online interactive models offered up by brokers are usually rubbish. This one, from Liberum, isn’t. Click to play.

Spoiler: at spot prices it’s a *fail*. Read more

Wait, China’s employment counting problem … solved?

So maybe China doesn’t need to hire a battery of statisticians to ironically count its unemployed?

You know, as a ward against a sudden spike sneaking up on the Chinese government, a government that prizes stability and its own continued rule above much else?

We’d suggested previously that China’s powers-that-be might have just as useless an insight into the true nature of China’s employment as the rest of us. Or at least, that was the fear. It wasn’t that anybody thought there was an immediate problem in the Chinese labour market — it was the not knowing, and the potential for a surprise, that got people ruffled.

That and China’s preternaturally still unemployment rate, of course, which (say those who just want to lash out at the world) has the dubious distinction of being considered the least informative among all key Chinese stats. Read more