One of these is not like the others, the BIS on China edition

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FT Opening Quote: Brexit profit warning from Mitie

Brexit profit warning from Mitie, optimism at Dairy Crest and profits up at Petra Diamonds. 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 Monday,

The BIS quarterly review is out.

Gavyn Davies: Will the BoJ cause a global bond tantrum?

– On the “just deserts” theory of justice and humanity as a gift-exchange web.

– The downside of upward mobility.

– The impact of NIRP on inflation, some empirical evidence.  Read more

FirstFT – New York on high alert, 50 days that will shake the world and why you should let your kids get dirty

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New York City was on high alert after an explosion rocked Manhattan on Sunday just hours before President Barack Obama and other world leaders were due to arrive in the city for annual meetings at the United Nations. Read more

Thought for the weekend

In 1789 the French revolution signaled to Europe and the rest of the world that monarchy was on its way out and new democratic age was beginning. Now, with Online Public Offerings made possible thanks to the JOBS ACT, Washio can raise capital directly from the public. So why did they not do it ?

– from a Medium blog post by Howard Marks, executive chairman at StarEngine and co-founder at Activision/Blizzard.

Week Four: FT Alphaville Fantasy Football League

Everyone this week has been talking about the new paper from Natasha Sarin and Larry Summers asking: “Have big banks gotten safer?”

The answer they come up with, you’ll be surprised to hear, is sort of no, not really, and it’s partly the fault of post-crisis regulation. Read more

Bank account fiddling as cultural bridge

What does this remind you of?

And by “this” we mean the sudden appearance of millions of Indian bank accounts which only boast balances of one-rupee each.

Any confusion as to why that would happen might be tempered by knowing that those accounts were opened as part of a massive financial inclusion plan undertaken by Modi’s government for which non-operational accounts weren’t a good look… and they were mostly opened at state owned banks.

Incentives are fun. Read more

What’s old is new again, fintech news edition

Found scattered around a London-based fintech incubator set-up this week:

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It’s all about macro, charted

In case anyone was in any doubt…

From Citi:

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Markets Live: Friday, 16th September, 2016

Live markets commentary from 

FT Opening Quote: Strike price for Hollywood Bowl

Strike price for Hollywood Bowl, SVG rejects HabourVest offer, Avanti searches for buyer. FT Opening Quote is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Friday,

Your market summary: “it’s been a nice respite from the cesspit of ultra low vol, and if Macro Man’s wrong and it kicks off properly, so much the better- that’s a proper trader’s environment!”

Aswath Damodaran on fairness options: Fix them or flush them.

– The cat ‘scam’ and the domination of the middleman.

Meanwhile in an India where “zero-balance” accounts, amidst a financial inclusion push, were proving politically embarrassing: “So far, over 10m one-rupee accounts have been found at 34 banks, out of 240m accounts opened since 2014.”

Peter Praet on Target2. Read more

FirstFT – Deutsche Bank asked to pay $14bn, lessons from death row and how much parenting matters

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Test your knowledge with our week in news quiz.  Read more

Uber, the trading stamp unicorn

Uber, the unicorn that likes to transform investor funds into cheap promotional giveaways and publicity stunts, is hosting a pool party this Thursday and Friday in London to drum up support for its UberBus UberPool offer.

If you’re in the Uber London database you will have received this:

 Read more

Banks should hire McKinsey, says McKinsey

McKinsey & Co. has published a tome on the Death of Banks.

Well, they don’t actually say the end is nigh, but they do think the ranks of global mega-banks will shrink by at least half by the time the dust has settled: Read more

Markets Live: Thursday, 15th September, 2016

Live markets commentary from 

FT Opening Quote: Biffa brings rubbish to the market

Biffa brings rubbish to the market, Profits down at Next and John Lewis, Morrison sales 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

Elsewhere on Thursday,

Another rout.

– Wells Fargo’s week just went from bad To Preet. And how regulation failed with Wells Fargo.

– Not exactly ‘elsewhere’ but if you haven’t read Martin Sandbu on the elephant chart… do.

– Relatedly, when exactly did charts become so popular?  Read more

FirstFT – US to lift sanctions on Myanmar, Amazon’s answer to the smartphone and how to manage millennials

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Barack Obama pledged on Wednesday to lift all remaining US sanctions on Myanmar as the president sought to reward the country for its rapid transition from military dictatorship to democracy. Read more

Markets Live: Wednesday, 14th September, 2016

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Blockchain debate today at 1pm

Fed up of blockchain hype? Or, convinced that a shared database will revolutionise the world as we know it? Or, don’t know one way or the other?

The FT’s called a debate in which both sides of the argument will be properly defended. It’s in Markets Live form. It’s at 1pm UK time today. It features Izzy vs Simon Taylor, co-founder and blockchain director of 11FS.

 Read more

Confusion and the BoE’s corporate bond buying scheme

This is on the back of the Bank of England’s release of some more info on its Corporate Bond Purchase Scheme (CBPS) on the 12th. From that:

We will look to purchase, via the CBPS, a portfolio of up to £10bn of sterling investment grade bonds representative of issuance by firms making a material contribution to the UK economy, in order to impart broad economic stimulus. Our operations will be designed to purchase a balanced portfolio of bonds across eligible issuers and sectors, so that we purchase a representative portion of the market and do not influence the allocation of credit to particular companies or sectors of the economy. The private market will continue to decide which companies can issue in the primary market. Corporate bonds issued by firms we regulate – such as banks, building societies, and insurance companies – will not be eligible.

This notice outlines in more detail how we decide what constitutes a material contribution to the UK economy, and how our operations have been designed to ensure our purchases are representative across the eligible set of bonds. Operational details are included in the Market Notice.

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Alphachat: Dan Drezner on forecasting the next-gen political economy

Alphachat is available on Acast, iTunes and Stitcher. Read more

FT Opening Quote: Monsanto-Bayer deal edges closer

Monsanto-Bayer deal edges closer, Pure Gym plans float and Sky invests in drone racing. 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,

– To reiterate, the elephant chart is an amazing chart.

– “It’s not a cult. It’s America. A family man returns to his hometown to discover he’s the last person in town who’s not part of a massive pyramid scheme. And everyone– EVERYONE – wants him in”

– When VCs meet a mortgage market.

Bernanke on modifying the Fed’s policy framework: Does a higher inflation target beat negative interest rates? Read more

FirstFT – Bayer closes in on $66bn deal, the Great British Firewall and the trend toward ‘gamifying’ cities

Bayer sweetens its offer for Monsanto to just under $130 a share Read more

In defence of hedge-fund data mining

People tend to get worked up about the idea of Wall Street mining the trails of data we all leave on the internet for investment ideas.

The first and most obvious reason is that privacy issues are always contentious. You’d think it’d be a windfall for hedge funds if MasterCard or Visa started selling them data on trends in customer purchases (while the card providers sell some data, hedge funds haven’t cracked that yet, as far as we know). While the information obtained in data-mining isn’t supposed to be traceable to individuals, how would a company fully scrub that of any signs of consumers’ identities? Read more

Mythbusting Uber’s valuation

Black cab drivers protesting in London in February. (Photo by Dan Kitwood/Getty Images)

Uber, the ride hailing app, is the archetypal billion dollar unicorn.

How it’s managed to convince investors it’s worth $62.5bn, however, is the real mystery, given its model is arguably neither innovative or viable. Read more

What’s a chengyu for ‘forever blowing bubbles’?

It has been called China’s Great Ball of Money, the vector through which bubbles come and pass.

Of course any particular bubble is not the beginning. There is no beginning in a China which is more and more interconnected, meaning its risks and excesses flow as easily as that giant ball of money.

But just as property turns to stocks turns to bonds turns to property once more… this bubble is a beginning*. From SocGen’s Wei Yao, with our emphasis:

… asset price appreciation seems to be worryingly unstoppable. Especially, housing market indicators continued to show a brisk momentum in sales and prices, but a muted construction recovery. Even the officials at the central bank admitted that there is a bubble.

 Read more

Markets Live: Tuesday, 13th September, 2016

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