Posts from Tuesday Jun 10 2014

Put the beer down, this bud’s for you

Legal rather than technological disruption this time. Colorado is running an experiment where its voters have made possession and consumption of marijuana legal, while Federal prohibition remains in place.

Working out the social and legal niceties is taking time as weed moves from subculture to the mainstream. New York Times columnist Maureen Dowd paid a visit and fell into the classic trap of eating too much THC-laden chocolate too quickly.

Paranoia, however, may be justified for the brewers. Read more

PBoC in the ascendant

Monetary policy probably not so much.

It’s a rare thing these days to see monetary policy taking the back seat but according to the WSJ an ever more influential PBoC is winning the argument against cutting interest rates and in favour of smaller more targeted measures like RRR cutsRead more

Markets Live: Tuesday, 10th June, 2014

Live markets commentary from FT.com 

The (early) Lunch Wrap

Euronext valued at up to €1.75bn in flotation || Imperial Tobacco set to spin off Logista distribution arm || Price rises threaten to stifle China easing || Second China unit accused of cyber crime || GoDaddy ready to go on US IPO || Markets Read more

UberBay

An online service that matches buyers and sellers you say? Worth $18bn? Well, there are a lot of taxis in the world.

We have seen this one before though, so $18bn is entirely possible, if not necessarily sensible.

Consider this chart of the original dot com network effect superstar, eBay. Read more

The growth of US student loan debt: causes and consequences

The chart from Goldman economists breaks down the various causes behind the rapid expansion of student loan growth in the past decade. As you can see, both rising tuition and a higher share of students borrowing have contributed just as much as higher student enrollment. Read more

Premium pricing

The whopping 240 per cent premium Merck is paying for hepatitis drug developer Idenix Pharmaceuticals got us wondering about the largest prices, in excess of market, paid in M&A deals.

Here is an S&P Capital IQ screen we ran for deals that closed since 2009, and saw greater than $500m in transaction value that reflected 1-week premiums greater than 100 per cent. Read more

Further reading

Elsewhere on Tuesday,

- Vix not a great way to measure complacency.

- Undeniable macroeconomic truths?

- The criminology of the “Sure Thing” portrayed as “Risk”.

- Overpricing UberRead more

The 6am London Cut

Camp Alphaville reminder: Peace. Love. Higher Returns. And a pub quiz. (Details here)

Markets: Asian markets were mixed as investors paused to reconsider valuations with a regional barometer at seven-month highs. The Hang Seng started the session with a 0.5 per cent gain after the People’s Bank of China reduced the amount of cash reserves some smaller lenders must hold at the central bank, cutting their “required reserve ratio” by 0.5 per cent in a move aimed at encouraging small banks to lend more. Gains were pared though as the targeted nature of the cuts sank in. (FT’s Global Markets OverviewRead more