Festival of Finance 2016 — the liveblog

The Alphaville team has decamped to the FT’s Festival of Finance 2016 in London. Follow a special day-long Markets Live session for updates from the event. 

Alphachat: Fact-checking Brexit claims with Tim Harford

Alphachat is available on Acast, iTunes and Stitcher.

UK easing hints, Brexit Down Under and a 14-year-old art prodigy

The Bank of England is preparing to unleash another round of monetary stimulus Read more

Ratesetter’s provision fund “is going to be pushed to the limit”

On the face of it, 2014 was a great year for Ratesetter, a UK “peer-to-peer” lender backed by Neil Woodford’s investment fund and Artemis, the fund manager. Lending volumes grew by an impressive 180 per cent to almost £300m and the company was the first lender of its kind to receive a risk rating from a research agency — they were rated as risk-free as cashRead more

Brexit, Reformation edition

In 1532 Henry VIII effected a series of acts of parliament to formalise his kingdom’s breakaway from Rome.

As Rupert Gavin commented in the FT last week what happened next ended up defining the Britain of today:

Back then, after a period of near bankruptcy, constant war and disruption, the breach was a trigger for economic growth, for the emergence of a thriving middle class and for the rapid expansion of London. By 1600, with a population of about 250,000, it was one of the largest cities in the world.

The City of London played a significant role in the post break-up environment too. Rome may have been viewed as oppressive, unaccountable and governed by a clerical elite, but it also provided important welfare safeguards for the poor, the infirmed and the weak. The confiscation of Church assets deprived the poor of their primary source of income support and welfare, says Gavin, and with little other choice they flocked to the cities to find work. Read more

If the EU is a sinking ship and the UK should leave, then most of the UK is a sinking ship and London should leave

The European Union’s economy is a “sinking ship” and Britain would be better off “detaching itself” from the bloc, Michael Gove, the U.K.’s Justice Secretary and prominent leave campaigner told CNBC on Tuesday.

“By voting to leave we can not only take back control of hundreds of millions of pounds that we send to the European Union, we will also be detaching ourselves from the sinking ship that is the European Union economy,” Gove, who is hoping for a Brexit vote on Thursday’s referendum, said.

Britain needs to jump from EU’s ‘sinking ship’: UK lawmaker (June 21, 2016).

We would never defend the economic management of the euro area, which is often conflated with the policies recommended by the European Union as a whole. But it’s worth noting most of the UK is actually quite poor compared to large areas of Western Europe, and particularly deprived relative to greater London. Read more

Markets Live: Thursday, 30th June, 2016

Live markets commentary from FT.com 

Further reading

Elsewhere on Thursday,

- Brexit, and what’s wrong with the WTO option.

- Steve Keen and Alex White on Brexit — both to be found at a Camp Alphaville near you tomorrow.

- Koo, 92 pages of Koo: Can we bend the arc of global capital toward justice?

 Read more

FT Opening Quote

Legal & General has brushed off the effect of the Brexit vote, Tory leadership nominations close at noon, Mark Carney speaks at 4pm. 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

EU rebuffs Cameron, populism vs free trade and citizenship for sale

EU rebuffs David Cameron’s migration plea in first summit without UK Read more

Guest post: Brexit in the echo chamber

This guest post on the issue of the wider global impact of Brexit is from Paul Donovan, Global Economist at UBS in London.

The British referendum decision to end the country’s EU membership may seem an isolated event. Something for the UK to worry about, certainly. Something for the EU to muse over. But not, necessarily, something that Asia should be concerned about. This attitude is a mistake, in my view.

The UK referendum matters because it signals trends that will shape the world economy. These trends are important for Asia and Asian investors. Leaving aside the details of EU membership, the referendum result marks a victory for “anti-politics”. This is the politics of being against something rather than for something. Anti-politics suggests “if only we get rid of this one thing, all our troubles will be over”. Read more

FT Confidential Research: For Li Keqiang, Brexit is both blessing and curse

FT Confidential Research will be hosting an intimate ‘up, close and personal’ China session at the FT’s Festival of Finance this coming Friday at 2pm. It will take place in the M&G Coffee House area and be hosted by FT Confidential Research’s principal for China David Wilder, their chief economist Xiao Qi and head of research Sun Yu. This will be a chance to put your questions directly to the experts and benefit from their unique on the ground, regional perspective. Here follows their analysis of whats’ been going on in China’s shadow banking sector whilst we’ve all been distracted by Brexit.

In some respects, Brexit has been a gift for Beijing. The chaos in world markets unleashed by the UK’s vote to leave the European Union means a Chinese hard landing has slipped down the list of potential threats to global stability.

Not that Li Keqiang appeared particularly gleeful at this newfound loss of status when he gave his annual address this week to the World Economic Forum in Tianjin. Instead, the premier rolled out his government’s now-familiar tropes about the resilience of Chinese growth and the relative health of the labour market, again dismissing talk of an economic hard landing. Read more

Your shorter (but more detailed) Rajan replacement cheat sheet

We promised we’d only return to this when we had a bit more clarity about who might step into Raghuram Rajan’s shoes at the RBI when he leaves in September.

Well, does this from the Times of India yesterday count?

NEW DELHI: The government has narrowed its long list of candidates for the next Reserve Bank of India governor to just four.

The four short-listed candidates are: Reserve Bank of India deputy governor Urjit Patel, former deputy governors Rakesh Mohan and Subir Gokarn and State Bank of India chief Arundhati Bhattacharya.

Yes. At the least, it’s three less names to deal with than we had last time.  Read more

Markets Live: Wednesday, 29th June, 2016

Live markets commentary from FT.com 

App-only bank Starling loses another chief technology officer

To lose one co-founder and chief technology officer may be regarded as a misfortune; to lose two looks like carelessness.

Last year, Starling Bank’s future was thrown into doubt when Tom Blomfield, a co-founder and then CTO, left the startup digital-only bank along with three of its senior management.

At the time, the FT reported that they left “following friction with chief executive Anne Boden”, who was previously chief operating officer at Allied Irish Banks. Blomfield went on to found Mondo, a rival startup bank.

Now Starling, which was founded in 2014, has lost another CTO, Mark Hipperson, who was head of technology at Barclays corporate bank in the 90s. Hipperson left the startup last month, according to his LinkedIn, which also suggests the company has finally secured its banking license. When contacted, he said: “We had a disagreement on the way forward and I therefore decided I would resign.” Read more

Greece’s depression is forcing dis-saving on an epic scale

The collapse of the Greek economy is almost without precedent. Real household consumption has dropped by 27 per cent since the peak. During the global financial crisis, this figure “only” fell by 6 per cent before rebounding:

 Read more

FT Opening Quote

Michael Sherwood of Goldman Sachs faces a grilling from MPs on BHS, house prices are up 5.1 per cent in June, says Nationwide, Dixons Carphone profits are up 17 per cent. 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,

- Because Shkreli, that’s why:

- DeLong on the thinkers which will define our futures — Keynes, Polanyi and de Tocqueville.

- Very good piece on Sunderland as a microcosm of Leave.

- A great European painting has just been unveiled in Britain. It feels like forbidden fruit.  Read more

The long goodbye, Istanbul attack and inside Porton Down

Cameron receives frosty reception in Brussels, as the EU capital was riven over the departure of one of its largest members Read more

“The profit share finally bites hard”

Looking beyond the Article 50 kabuki, beyond the evaporation of British bank and homebuilder equity, beyond the fantasy diplomacy by one country about which shade of EEA it might decide to accept from 27 others…

A bracing thought for the broader backdrop, which you might have missed from Credit Suisse’s European credit team on Monday (emphasis ours): Read more

Festival Guide 2016

Preparing for FT’s Festival of Finance 2016 …

We have a packed schedule for this year’s FT’s Festival of Finance – which is being held as usual at the Honourable Artillery Company, EC1 this coming Friday: Read more

Lending Club loans “inappropriately originated” to founder’s family

Back in 2011, Lending Club started offering investors the opportunity to buy its loans through funds managed by LC Advisors, a subsidiary of the troubled online lender.

The conflicts of interest were obvious — investors were trusting Lending Club to value the loans fairly and to place their interests above or at least equal with the interests of the company’s equity holders, who rely on new loans being originated for fee income. Read more

Trading Brexit is hard, P2P edition

There are probably lots of these sorts of divergences going on in the markets, with the pound’s decline against the dollar masking the underlying loss in investor confidence (see the FTSE 100 vs. the FTSE 250, for example).

Here’s one that shows, in times of fear and volatility, money does get left on the table, albeit temporarily: Read more

Markets Live: Tuesday, 28th June, 2016

Live markets commentary from FT.com 

Of vol, GBP and meaningless numbers [updated with some VaR qualification]

H’t to Katie over at Fast for the spot…

Here’s what a volatile DM currency move looks like:

 Read more

Dumb Buzzfeed-style list of 10 reasons to come to the FT’s Festival of Finance

1. You get a goody bag when you leave that won’t just contain corporate guff.

2. There’s an after party.

3. Your boss is probably friendly with one of the speakers/panelists.

Nah, listicles and FTAV just don’t go. Whereas the wonderful Sandra Rupp does!.. Read more

FT Opening Quote

They think it’s all over, but maybe not yet. Despite Brexit and England’s exit from the Euros, Redrow and Rolls-Royce are upbeat this morning and the pound has steadied. 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 Tuesday,

- When you dial 911 and Wall St answers.

- Interfluidity: “the alleged “good guys” — the liberal, cosmopolitan class of which I myself am a part — have fallen into habits of ridiculing, demonizing, writing off, or, in our best moments, merely patronizing huge swathes of the polities to which we belong.”

- Streetwise Prof: “But are the elites learning from this lesson? The first indications are negative.”

- The S&P view of the UK, ctrl+fing for “current account” and “FDI” recommended. Also recommended, a look at Gilt yields.  Read more

Brexit turmoil, weaponised music and an Icelandic victory

The pound has now shed 10.5 per cent since the close on Thursday and following the UK voting to leave the EU Read more

Camp Alphaville tickets are selling out… (updated with latest schedule)

When they’re gone, they’re gone. There’s only so many people we can house, comfortably, under canvas in the lovely grounds of the Honourable Artillery Company, London EC1, at the FT’s Festival of Finance. The event is this Friday. Doors open at 10am.

 Read more