The emerging genre of regulatory filings as performance art

This is a marvelously weird apparent prank.

There seems to be an actual entity — it’s registered in Wisconsin — called YNOFACE Holdings Inc, which said in a SEC filing Wednesday that it had acquired more than 4.2 bn shares of Bank of America on September 22, and nearly 800 million shares on August 15 with an exchange of shares. Read more

Markets Live: Thursday, 20th October, 2016

Live markets commentary from 

Markets Live is back at 11am on Thursday

Two nightmares end. Trump’s finished (yeah?) and Murphy’s finally got out of his sick bed. Join us at 11am for Markets Live.

  Read more

About China’s confusing debt-for-equity swaps

Corporate debt in China is a well-known problem and part of the solution is, apparently, a new round of debt-for-equity swaps.

Of course, there will always be sceptics. Read more

FT Opening Quote: Philip Green in parliamentary spotlight

Philip Green in parliamentary spotlight, Glencore sells Aussie rail unit, LSE revenues up: 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


– One (Gold)man’s market marking worth $100m is another man’s prop trading.

– Relatedly, Wall St is doing just fine with fewer workers.

– Broken indicators mean it’s harder to spot trouble in the market.

– What does Nevada’s $35bn fund manager do all day? Nothing.

– And, Bernanke and Olson ask if Americans are better off than they were a decade or two ago? Read more

FirstFT – Trump refuses to commit to accepting vote, Airbnb faces NYC eviction and a plea against helicopter parenting

Clinton accuses Trump of being a ‘puppet’ of Russian President Vladimir Putin Read more

Moody’s rains on the online lending parade

There has been a lot of excitement recently in online lending circles in the UK over a speech. Specifically a speech by Lord Adair Turner, the former financial services authority chairman who famously rubbished the sector back in February. At the LendIt Europe conference last week he stood up and said: ‘alright fine maybe the sector doesn’t like totally suck’.

Such optimism is in short supply on the other side of the Atlantic. On Wednesday, Warren Kornfeld and team at ratings agency Moody’s put out a note with the message: ‘no! it definitely totally does!’: Read more

Stupid Markets Live hiatus continues…

Bryce is still on holiday.

Murphy is still claiming to be ill. Read more

The minutes of your (more dovish) RBI, charted

More dovish, we should add, for reasons already discussed — like the acceptance of a higher inflation threshold, the lowering of the real rate target, and the fact that the cut of 25bps in early October was on the back of a unanimous vote from the newly formed MPC under its new governor, Urjit Patel.

But more on that below the break.

First, that chart from Goldman based on the (now ex-Rajan) Reserve Bank of India’s recently released minutes: Read more

Slim’s pickings at the New York Times

One theory behind rescue financings is that in a period of sharp dislocation, otherwise sound companies just need a lifeline that traditional sources cannot — or will not — provide to ride out the storm. Viable businesses get to survive a financial crisis while rescue lenders get to reap big rewards from going where others fear to tread. The trick is figuring out whether saviours are targeting companies with reasonable survival prospects, or simply throwing good money after bad. Read more

FT Opening Quote: London property woes hit Foxtons

London property woes hit Foxtons, Travis Perkins warns on profits and NYC’s Brexit benefit. 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


– Spread ’em, or “to paraphrase Inigo Montoya, I do not think these rates mean what you think they mean.”

– DeLong on CAPE, future expected equity returns, the equity premium, and market timing.

– Monetary science fiction.

– Mark Zuckerberg’s long march to China.

– And how “tech firms spent $49 million on Washington lobbyists last year, while the five largest banks shelled out $19.7 million…” Read more

FirstFT – Pound rallies on sign of Brexit deal vote, Isis ‘using human shields’ and the dealmaker who was duped

A UK government lawyer says parliament has the final say on whether to accept Brexit deal Read more

China’s Beijing Kunlun sells back investment in UK lender LendInvest

Last year, Chinese gaming billionaire Zhou Yahui invested £22m in LendInvest, a UK online lender specialising in the property market. The Series A investment from his firm Beijing Kunlun Technology was intended to help the lender grow faster ahead of a planned stock market float in 2016. Read more

The game theory inherent in Brexit

According to Chris Hanretty, a political scientist who is very good at maths, out of the 134m ways in which 27 countries can arrange themselves into coalitions there are 226,670 occasions where just one country could make the difference between a deal failing and a deal going ahead.  Read more

The founder of “digital bank” WB21 was previously sued for allegedly stealing millions of dollars

A couple of weeks ago we chatted to Michael Gastauer about his fintech startup WB21, a “digital bank” that has claimed one million customers and a $2.2bn valuation after less than a year in operation.

It’s a remarkable trajectory for a company with a relatively unknown management team, no outside investors and what appear to be thousands of fake Twitter followers. WB21 has recently won mainstream attention by announcing a move from London to Berlin following the UK’s vote to leave the European Union. The WSJ said it was “one of the first startups” to quit the UK for Germany as a result of Brexit and the city of Berlin has welcomed WB21 and Gastauer with open arms. Read more

No Markets Live session on Tuesday

Apologies, but Murphy’s still ill and Bryce is on holiday. So there is no Markets Live session today.

Check back in a day or two or read some past transcripts.

Janet Yellen to macroeconomists: that whole (aggregate) supply-demand thing might need a rethink

Janet Yellen’s speech on Friday to the Boston Fed conference was like a greatest-hits collection of the frustrations long expressed by advocates of more-stimulative demand policy.

One of those frustrations has been rooted in the belief that a more aggressive counter-cyclical response to recessions doesn’t merely jumpstart the economy again, but also prevents semi-permanent damage to the economy’s very capacity for growth — in other words, weak demand now can damage potential supply into the future. Read more

FT Opening Quote: William Hill walks away from Amaya

William Hill walks away from Amaya, Burberry sales down, Bellway profits jump. 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


– Steve Randy Waldman: “If it becomes the mainstream view that Trump voters are simply racists, it leaves those who are already committed, those who are unwilling to abandon Trump or to stomach Clinton, little choice but to own what they’ve been accused of.”

– Relatedly: First on the limits of data journalism when explaining Trump’s support, and second on Appalachia as a mythic “Trump Country”.

– And, is Bill Ackman toast?
 Read more

FirstFT – Britain’s self-employed; picking stocks; why billionaires have more sons

Data expose the low incomes in this growing part of the UK workforce Read more

The US tax man might be coming for offshore corporate income

Who would’ve thought that this election year could lead to corporate tax reform in the US?

Goldman Sachs Group analysts say there could be some semblance of a bipartisan effort to rework the way multinational US companies are taxed during the next presidential term. They estimate there’s a 50-per-cent chance the corporate tax code will be reworked next year. (In short, the voters have spoken, and they want Big Business to pay.)

The US taxes corporate income at the highest rate of any OECD country, at 39 per cent. And unlike any other G7 country, it taxes companies’ income earned abroad, though it gives credits for taxes paid to foreign governments. That would be onerous, if the taxes weren’t delayed until foreign income is brought back onshore. Perpetually. That gives companies a big incentive to keep their foreign income offshore, reinvest it in financial markets, and pay lower dividend and capital-gains tax rates instead.

And, hey, look, they’ve responded! S&P 500 companies pay a median tax rate of 28 per cent, according to Goldman Sachs’s analysis: Read more

Who’s afraid of Goldman’s Marcus?

For those of you keeping score in the (phoney) war between fintech disruptors and the big banks, last week the lumbering giants of finance came out on top. While Goldman Sachs launched its new personal loan brand Marcus to great fanfare, its online lending competitors were in sheepish retreat. Read more

Defensive credit creation and vicious circles in China

Today in Chinese circularity: “low profit leads to more credit required to fund investment, but given low investment efficiency the investment made may only generate sluggish profits in the future, which could then take us back to the difficult situation of more credit being needed to sustain investment.” Read more

This is nuts. When’s the crash?

A new business bank is to be founded by Jonathan Rowland and Gary Wilkinson, which will offer SME commercial mortgages and business deposit accounts Investment of £50m anticipated over the next five years. Read more

On the return of Japanese inflation

The most likely outcome of continued asset purchases in Japan will be a large inflationary impulse via a collapse of the yen, says Diana Choyleva. This she thinks will happen sometime towards the end of 2017 or in 2018 as institutional investors and corporates flee domestic markets. Read more

Monday’s Markets Live is cancelled

Bryce is off this week.

Murphy, meanwhile, is at death’s door, with a cold. Read more

Beware randomly falling markets

Evergreen advice here from Citi:

Beware of unexpected outcomes to expected events.

But it’s the accompanying chart that’s worth the click: Read more

FT Opening Quote: ICE to launch gold futures contract

ICE to launch gold futures contract, Biffa cuts float price and glamorous accountants. 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