The line-up for Camp Alphaville 2015

Yes, 80 speakers and panelists will be presenting at our annual finance festival in London on July 1. Click the image for full details.

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Plus500 and the FCA

So, what should we make of Plus500′s “Further statement and clarification” issued on Friday, after the Aim market authorities suspended shares in the Israel-based but London-listed Contract for Difference broker?

Lets give it a Fisking, and try to think about what happens next, in light of the notice published by the Financial Conduct Authority on Friday, which indicates Plus500′s marketing methods are part of the regulatory conversation. First, here’s the company:

Plus500, a leading online service provider for retail customers to trade CFDs internationally, is today issuing the following statement to respond to recent speculation regarding the current status of Plus500UK’s dialogue with the FCA, in particular in relation to the fact that Plus500UK has “in recent weeks been implementing certain enhanced client on boarding and Anti-Money Laundering processes”.

In response to recent speculation? Read more

“Power blogger”

From the people who brought you ‘Vanity Capital’

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Markets Live: Friday, 22nd May, 2015

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Plus500 on a Cable Car ride – Update 2

Update 2: shares resumed, following a statement of sorts.

The Company can confirm that on 9 January 2015, its UK subsidiary, Plus500UK Limited (“Plus500UK”), was required by the FCA under section 166 of the Financial Services and Markets Act 2000 (“Section 166″) (see notes) to appoint a Skilled Person to conduct a review of its Anti-Money Laundering (“AML”) and financial sanction systems and other related regulatory controls.

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China: staggered reform on one side, equities on the other

From SocGen’s Wei Yao, a chart we’re very tempted to plonk beside one of China’s equity markets:

Actually… Read more

Further reading

Elsewhere on Friday,

- Banks will keep doing FX stuff that got them in trouble.

- A good ‘mathiness’ fight summary.

- Stanley Fischer on the Monnet vision of European progress (and the need for an expansionary fiscal policy).

- Finance behemoths don’t like volatility and want to regulate it away.

- Bubble indicator x: this VC raised $123,456,789 in its first funding round. Because “we just wanted to have a little fun with it.”  Read more

FT Opening Quote – Yellen may be telling

Janet Yellen could give a telling speech later today on the state of the US economy and the likelihood of interest rate rises this year. The Fed Reserve’s chairwoman is preceded by speeches from her counterparts in the UK, Japan and the eurozone. There’s also a new CEO for Whitbread been named and concern about condoms from the CMA. FT Opening Quote with commentary by City Editor Jonathan Guthrie is your early City briefing. You can sign up for the email here.  Read more

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Asian markets are higher today, with China’s Shenzhen Composite on track for its best weekly performance since Beijing launched stimulus measures during the financial crisis of 2008. Read more

Jawbone debunks Modigliani-Miller. When’s the crash?

A privately-held tech company is desperate for cash.

In this age of “decacorns“, you might think it would raise equity from overeager venture investors. But Jawbone, which competes with, among others, Apple, decided to borrow $300 million from Blackrock. Dan Primack thinks this financing choice creates value:

Structuring this deal as debt instead of as equity also allows the San Francisco-based company to maintain a $3 billion valuation it reportedly received last fall. That means it needn’t reprice existing employee stock options, and gives it upside flexibility when recruiting new employees. Plus, Jawbone doesn’t take the kind of ‘falling unicorn’ PR hit that could cause potential customers to purchase from more stable vendors.

This flies in the face of standard corporate finance theory. Franco Modigliani and Merton Miller both won Nobel prizes in economics for arguing that the underlying value of a company doesn’t depend on its capital structureRead more

Calling all hoverboard manufacturers…

We have just a few spaces remaining for young fintech-focused firms wanting a bit of exhibition space at Camp Alphaville, our annual finance festival in London on July 1.

We’ve christened the exhibition Where’s my hoverboard?, not realising that some guy’s already raised $500,00 on Kickstarter to build a real one.

No matter, further details of the Alphaville hoverboard opportunity available here.  Read more

The sharing economy will go medieval on you

In Paris this week, at the Ouishare Fest, the great and the good from Europe’s sharing economy have been delving deep into what it means to be running a collaborative business model within a capitalist framework. Are the two even compatible? Or is there a fundamental conflict at the heart of an industry that preaches collaboration but, due to being radically commercialised by venture capital money from Silicon Valley, also needs to profiteer from the goodwill of others if it’s to remain viable?

For the most part it’s a hypocrisy the community is trying to address. The $1bn elephant in the room — the fact some aspects of the sharing economy are becoming the very thing they set out not to be — has basically become too enormous to ignore. Read more

An impossible secular stagnation trinity, charted

A very large compare and contrast chart from Morgan Stanley’s global economics team below the break.

But first, this on the HansenSummers, Rogoff, Gordon debate, for context and stuff. With our emphasis:

The HansenSummers secular stagnation thesis argues that an excess of savings implies there is no attainable interest rate that brings the economy back to full employment for many years. However, Gordon’s ‘headwinds’ thesis argues against much slack in the economy, given that it is potential output growth that is falling, while Rogoff’s ‘debt supercycle’ view argues that weak growth persists only as long as downside from deleveraging remains in place. Together, they suggest that the US, UK and even Japan may have fewer headwinds than the euro area, China and Korea. All three views, however, cannot be right at the same time – an ‘impossible secular trinity’.

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New World: an offer open to interpretation – Update

What happens next at New World Oil & Gas is going to be interesting, closely watched — by shareholders, regulators of London’s junior market Aim, as well as financial authorities in Jersey, where the tiny exploration company is incorporated — and hard to predict.

Shares in the group remain suspended. On Wednesday afternoon the company announced shareholders had voted down plans to raise £1.5m via a placing of stock, and will proceed with a more expensive open offer process instead. Whether it does so may determine if a short squeeze takes place, or not. Read more

Markets Live: Thursday, 21th May, 2015

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Worse than Hanergy? Goldin, you should be ashamed [Updated with more solitaire]

UPDATING at the top because… well, you’ll see why. From a great Bloomberg piece just out (do read the full thing):

So what is Goldin Financial really worth? In his capacious Hong Kong office, furnished with generous touches of faux Louis XV marble and gold, Pan pauses from a game of solitaire and explains…

Dealing himself another hand of cards, he said he still might take the company private so he doesn’t have to contend with pressure from minority shareholders.

“I am selling performance, not stock price,” he said.

And the wealth ranking? Well, that’s just paper.

“A genuinely wealthy person would not count his wealth every day,” Pan says. “It’s better if you just leave me off the list.”

Easy come, easy go.

That’s Goldin Financial and Goldin Properties erasing just some of the 926 per cent and 606 per cent they gained in the past 12 months. And by “some” we mean they have lost more than $25bn from their market capitalisations in under two days. Read more

Further reading

Elsewhere on Thursday,

- Really big bank fines: we’re past the point that anyone cares about the details.

- Bad information is bad for the economy, ROE edition.

- Silicon Valley is a big fat lie.

- Krugman responds to Montier.

– “Had George III and his ministers not adopted austerity measures in the 1760s and 1770s… America’s founders might not have needed to declare their independence at all.“ Read more

FT Opening Quote

Royal Mail has delivered full-year results ahead of some analyst expectations, Booker is buying Budgens and Mothercare is looking a better behaved child. FT Opening Quote with commentary by City Editor Jonathan Guthrie is your early City briefing. You can sign up for the email here.  Read more

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Don’t expect that rate rise anytime soon. Minutes from the latest Federal Reserve meeting show policy makers have doubts about the strength of the US recovery.

June was the expected timing for a rate rise but few of the Federal Open Market Committee think that would be the right time now first-quarter data has raised the prospect of a slowing economy. The central bank must weigh whether the slowdown was the result of the long, cold winter and a lengthy port strike, and whether the economy is in for a sharp rebound. (FT) Read more

Every day we’re sorry, by $53m

An expensive business, banking. There’s offices, staff, technology, terminals, compliance…

Actually, maybe it would be wise to spend a bit more on the last one. The FT’s running total of legal fines and settlements paid by banks to US regulators since 2007 now comes to $155bn.

In case you were wondering, over eight years that works out to $53m per day (including weekends, because client service is a 24 hour kind of business, right.) Read more

Desperately seeking Hejun

It appears that Li Hejun, chairman and majority shareholder of Hanergy Thin Film Power, spent his morning at the opening ceremony for the Hanergy “clean energy expo centre” in Beijing. For verification, Hanergy’s press office sent this photo of Mr Li (centre) with some unidentified people from the Chinese Academy of Sciences.

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A glimpse inside the Court, IMF edition

With a big h/t to Faisal Islam, here’s what the Bank of England was thinking at the start of September and just before that IMF loan in 1976 (do click through for the full thing):

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Markets Live: Wednesday, 20th May, 2015

Live markets commentary from 

What bond rout?


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China — all part of the plan?

This assumes China has a plan. Maybe it doesn’t. Or, if it does, maybe it’s not primarily aimed at reducing its debt burden while avoiding a hard landing.

But, for the purpose of narrative sanity, we’ll assume for a bit that it does and it is.

So, with that in mind, what to make of this? Read more

New World chaos

Dear shareholders,

whoever you are, we tried to take a vote. Honestly, we tried…

(In case you weren’t paying attention to the Aim RNS feed after 6pm on Tuesday evening, the latest update from New World Oil & Gas below.) Read more

“He had something to do”

Li Hejun, chairman and majority shareholder of Hanergy Thin Film Power, did not attend Wednesday’s annual meeting in Hong Kong. The FT has chronicled some curious trading patterns in the shares, but Wednesday’s move appears to be more self-explanatory.

Down by 47 per cent on Wednesday, and suspended after, well, here’s the FT:

“Chairman Li did not attend the AGM,” said T.L. Chow, an external spokesman for Hanergy. “He had something to do.”

Mr Chow did not say where Mr Li might be, and Mr Li did not respond to request for comment.

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FT Opening Quote – UBS to pay $545m forex fine

UBS is paying a $545m fine to US regulators over forex fiddling, Altice is making a $9bn move into the US cable market and minutes from the Bank of England and Fed will give us the latest clues to when interest rates rise. FT Opening Quote with commentary by City Editor Jonathan Guthrie is your early City briefing. You can sign up for the email here. Read more

Further reading

Elsewhere on Wednesday,

- Yahoo may not get rid of Alibaba so easily.

- Benoit Coeure, the euro and speeches that just smell wrong.

- London’s hipster economy.

- Crowdfunding basic income.

- Montier on the idolatry of interest rates (part I).  Read more

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Wall Street is trying to build up “single-name” credit default swaps - derivatives contracts that track the risk of default by a company that sells bonds. The derivative was widely blamed for fanning the financial crisis and has since seen a large decline in volumes traded.

Less liquid debt markets have made it difficult for large money managers to buy a particular bond but a credit derivative contract provides an alternative method for gaining exposure to a particular company without having to own the bond.

Regulators had sought to clamp down on the credit derivatives market after the crisis but banks and large investors are looking to revive it in an effort to limit bond-market volatility when interest rates rise.(FT) Read more