The intended (and unintended) consequences of India’s crackdown on black money

Before we begin, how about a very, very quick quiz?

Question: What percentage of Indians paid income tax in the 2013 fiscal year? Read more

Markets Live: Monday, 31st May, 2016

Live markets commentary from 

FT Opening Quote

Spread betting group IG says its punt on online advertising is paying off, Alliance Trust has confirmed RIT’s approach about a possible merger. FT Opening Quote, with commentary by Oliver Ralph, is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Tuesday,

- Scott Alexander on the idea of an ascended economy, one which lacks any human control. And Robin Hanson suggests that Alexander has “too little respect for the functionality of human behaviors and mind design.”

- The IMF, the neoliberal agenda and the world we’ve built.

- Ricardo Hausmann on Venezuela: Overdosing on heterodoxy can kill you.

- Of “long-running, occasionally bloody feuds between ice cream vendors for control” of NY’s prime selling spots. “You will never see a Mister Softee truck in Midtown,” he continued. “If you do, there will be problems, and you won’t see him there very long.” Read more

FirstFT – Nato security concerns, the end of England’s house price boom and why some cultures frown on smiling

Nato’s defence spending set to rise as fears over Russian aggression and the migrant crisis stoke anxiety over security across the continent Read more

Further reading

Elsewhere on Monday,

- Populist backlash and political economy.

- The war on data, continued.

- “VCs will give you points for honesty, but they won’t give you money,” says one entrepreneur who requested anonymity, as they are currently raising a round. “So we all pick and choose data to show growth.”

- “The essential forces sweeping the middle stratum off its feet in the 2nd century B.C. seem to be recurring in the 21st century A.D.”  Read more

FirstFT – The threat to Cameron’s leadership, America’s new supergun and why you will marry the wrong person

Brexit campaigners has piled pressure on the British prime minister, including a direct threat to oust him after the vote Read more

Bitcoin companies come of age; start moaning about unfair playing fields

Blockchain/fintech/bitcoin conferences are ten a penny these days, and we don’t mean to bore you with the minutiae of what went on at yet another one. But there was one thing that came out of a conference we attended in Istanbul this week that does bear noting.

We’ll call it the coming age of bitcoin companies, by way of the moan factor. Read more

Thought for the weekend

“When I began covering Bernie Sanders for The Huffington Post, my goal was to imagine what an equally accurate and reasonable and just master narrative sitting alongside the one promoted by the corporate media would look like. I wanted to write editorials that came from that master narrative, not the corporate one, because I believed then and believe still that the experimental journalism of the future will embrace the multi-dimensionality of metanarrative. Write that Sanders is in the midst of a competitive primary race enough times — and support those claims with unimpeachable elements of the totalized “Real” — and in time we collectively can see that that seemingly impossible metanarrative is every bit as powerful and present and perceivable as any other.”

Seth Abramson, columnist at The Huffington Post.

Rise of the robots: Hug your jobs tight

There is no doubt the rise of the robots has thrown the future of work itself into question. Will we see a rise of the useless class?

It seems the drumbeat of the robot and jobs apocalypse grows ever louder by the day, but while some workers have been replaced by machines, elsewhere the human has proven more resilient than perhaps expected. And perhaps the elimination of menial tasks has freed us up to do more interesting work. Simultaneously, cheap labour has made it more efficient to turn humans into automatons than to displace us entirely. Read more

Markets Live: Friday, 27th May, 2016

Live markets commentary from 

Alphachat: Guy Debelle on the Fed, China, and FX

Guest: Guy Debelle, assistant governor (financial markets), RBA  Read more

Further reading

Elsewhere on Friday

- The IMF goes against “neoliberalism”.

- A profile of Harvard professor Dani Rodrik, who warned us about the downsides of globalisation.

- “The problem with ever freer trade“.

- Is the data lining up for the Fed to hike in June?

- Peter Thiel funding Hulk Hogan’s lawsuit against Gawker? That’s not cool. Read more

FirstFT – Brexit ‘Plan B’, the new wave of UK nanobreweries and how to sound charismatic

European leaders have drawn up a ‘plan-B’ focused on closer security and defence co-operation in the event of a UK vote to leave the EU Read more

The Bearable Lightness of Debt – Or, How I Learned To Stop Worrying And Love Low Interest Rates

The unabated rise in global indebtedness periodically causes spasms of angst and chilling headlines around the world. Apparently we are all imminently sinking into a debt Ragnarokk that will inevitably end with the mass default of most of the world’s biggest economies. But maybe we shouldn’t be so scared. Read more

Why the death of cash may have been exaggerated

The Cambridge Security Initiative jointly led by Sir Richard Dearlove, former chief of the Secret Intelligence Service, and professor Christopher Andrew, a former official historian of MI5, is a think tank specialising in security and intelligence.

The initiative has released a report on cashless society, authored by Alfred Rolington and the verdict is… cash is still king, and don’t expect to see it disappear any time soon.

This, however, runs contrary to the rhetoric of some central bankers these days, among them Andy Haldane, the BoE’s chief economist who has floated the idea of having the central bank issue its own digital cash as a means of combatting the zero lower bound. Haldane has also said central bank–issued digital currencies form a core part of the Bank’s research agenda as a result. Read more

Our look at the latest Fed survey of US household “well-being”

For the past three years, the Federal Reserve has surveyed thousands of Americans about their finances, their hopes, and their fears. We wrote about the first version of the survey when it was released in August, 2014. The third iteration came out this week. Unsurprisingly, the answers to the repeated questions haven’t changed much. But there are some new questions compared to two years ago, which means a few new interesting things to learn about the American economy.

Some highlights: Read more

Dear fintech firms, advertising standards are a thing. Thanks, the FCA

Earlier this month Transferwise, the FX platform which loves to bash banks while parading women in scantily clad clothing in cold places for the sake of proving they have nothing to hide, got slammed by the UK Advertising Standards Authority for making claims about its service which the company couldn’t necessarily deliver on.

But the problem of outrageous marketing claims in fintech goes far beyond the Transferwise case. As a rule, it hails from the tech VC mentality of “if we market it, and people like it, we can build it later — and if we can’t deliver on our initial claims, we’ll just adapt until the money runs out”. Read more

Is the atomic weight of cobalt 58.9?

It is.

And is the connection between China Molybdenum and Freeport, one of Africa’s largest copper mines — which it bought for $2.7bn earlier this month — also something to do with cobalt? It surely is too. China’s security of cobalt supply. Read more

Markets Live: Thursday, 26th May, 2016

Live markets commentary from 

FT Opening Quote

Electra has a new activist CEO, Tate & Lyle profits have recovered, Brent crude is back above $50 a barrel. 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

- Lessons for Europe from early US monetary history.

- The role house prices and household debt play in recessions.

- Stanford economist Matthew Gentzkow on newspapers, branding, competition, persuasion and politics.

- Further viewing: Ending the too big to fail symposium.

- The Fed’s latest report on America’s economic well-being.

- Of course the hacker network Anonymous is now also a short-seller. Read more

FirstFT – Oil breaks $50, the end of the office dress code and the people who can’t imagine

ICE July Brent crude rose as much as 0.7 per cent to $50.08 a barrel early on Thursday in Asia Read more

The Greek government’s equity portfolio

According to data published by the Bank of Greece, which follows common standards set by the European Central Bank and Eurostat, the general government sector of the Greek economy owned financial assets worth about €86bn at the end of 2015.

Of that, about €18bn consisted of claims by various levels of government on each other, specifically about €3bn in T-bills, €7bn in Greek government bonds, and €8bn in short-term loans from local government to the central government. Net out those claims and the general government sector of the Greek economy held financial assets of about €68bn at the end of 2015. Read more

Is the online takeaway business eating itself?

Fresh stress at India’s star unicorn, Zomato on Wednesday, as year-end figures from one of its key investors showed losses at the “online restaurant discovery” business growing at an eye-watering pace.

Info Edge, with a 47 per cent stake, said Zomato’s pre-tax losses had jumped 260p per cent over the past year to almost 5bn rupees.

There’s no escaping the fact that online food takeaway businesses such as Food Panda and Zomato are now struggling as investors start to realise that not everyone can survive the intensely competitive market, and that not all cash burn will have been worth it. Read more

Markets Live: Wednesday, 25th May, 2016

Live markets commentary from 

It’s no fun when Amex throws your startup a Curve ball

Startups that are just a few months old have to deal with a host of challenges, but losing a key selling point of their product shouldn’t be one of them. Read more

Blockchains, bazaars and price fixing cartels

While in Istanbul for a blockchain conference, we came across Matt Levine’s latest Money Stuff column, in which he observes the following about the Libor manipulation and anti-trust case:

It is fairly well established that a bunch of big banks manipulated the London Interbank Offered Rate, and that the dollar numbers attached to Libor manipulation are quite large, so a bunch of investors and plaintiffs’ lawyers got together a while back to sue the banks and get some of those dollars. One of their main theories was that the banks’ collusion to manipulate Libor was an antitrust conspiracy. But the district court threw out this theory, reasoning that it can’t be an antitrust conspiracy for the banks to get together and agree on Libor, because banks getting together to agree on Libor is just Libor. It can’t be illegal to do anticompetitive stuff with Libor, because Libor isn’t a competitive market; it’s “a cooperative endeavor,” so the fact that the banks cooperated in setting a false Libor, while it might be bad, can’t be an antitrust violation. I am not an antitrust expert but I found this interpretation clever, and fairly convincing.

 Read more

FT Opening Quote

M&S full-year profits are down 18 per cent, Dixons Carphone has raised its guidance, Royal Mail has avoided new price controls. 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

- Beware of central bankers bearing gifts: helicopter money has a heavy price.

- Where is growth in Greece going to come from? Unemployment may be high for 44 years.

- Brexit: Why the current account could matter.

- Hillary Clinton’s latest attack: Trump is to blame for the financial crisis. Read more