Biography
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(Spending some time as FTAV’s Bombay wallah. Noticeably sweatier but not much else has changed.)

David studied economics, politics and journalism before joining the FT in 2011 as a Marjorie Deane fellow. He covered emerging markets, equities and currencies before making the jump over to FT Alphaville in May 2012.

In between his degree and masters he wandered into the real world of business where he learnt how to manipulate a spreadsheet and organise meetings where nothing gets decided.

He has spent time in France, learning French, and India, learning how to cross roads, and enjoys nothing less than writing about himself in the third person.

His hobbies include reaching things on top shelves, running long distances at slow speeds, growing beards and trying to live up to a rash claim he made as a twelve-year old that “he had read all of the books”.

If you wish to know more about David please do pick up the phone and call him for a chat in the first person. Be warned though: he tends to talk at pace and in an Irish accent.

Contact David Keohane

The 6am London Cut

Markets: Most Asian markets paused to end July on a quieter note after better-than-expected US economic data raised the possibility of a jump in interest rates. (FT’s Global Markets OverviewRead more

What would an anti-corruption top even look like?

So, with the corruption investigation into taboo busting tiger, former Politburo Standing Committee member Zhou Yongkang, the first such investigation against a politburo standing member since 1949, are we calling the top of this thing?

Kinda, says Gavekal’s Andrew Batson: Read more

Further reading

Elsewhere on Wednesday,

- What debate? Economists agree the stimulus lifted the economy.

- ‘Tis but a scratch.

- I don’t want to make fun of synergies. Synergies are great.

- Transocean transfer pricing and corporate inversions. Read more

The 6am London Cut

Markets: Asian markets were broadly positive on hopes of a robust US second quarter gross domestic product report due out later today. Tokyo markets were subdued after data released on Wednesday showed a 3.3 per cent decline in Japanese industrial production from May to June. (FT’s Global Markets OverviewRead more

Default settings in China

Or, how far is market pricing of credit risk catching on in China, after all?

Here’s your default-risk adjusted corporate bond yields in China from Nomura (our emphasis):

Liquidity injections and targeted easing so far this year has had a material impact on corporate bond yields. Corporate bond yields have dropped across the rating spectrum, while a similar narrowing of spreads can be seen relative to Chinese government bonds. Data provided by the China Government Securities Depository Trust & Clearing Co Ltd (chinabond.com.cn) shows that both 1yr and 5yr AA-rated bond yields have fallen, from highs of 7.22% and 7.63%, respectively, at the start of the year to 5.38% and 6.53% today.

 Read more

Further reading

Elsewhere on Tuesday,

- Nilometers and the language of finance.

- Where are the time-traveling arbitrageurs?

- Another gave women in the audience a tip for pitching VCs: “Wear a wedding ring.”

- Why not link the maximum wage to the minimum wage? Read more

The 6am London Cut

Markets: “Asian stocks rose, sending the benchmark regional index to a six-year high, while bonds followed U.S. Treasuries lower before the Federal Reserve starts meeting today. Oil fell while gold climbed.” (BloombergRead more

Redemption is, a mutual fund story

Summary of stuff you probably know up top, newer stuff on whether big mutual funds are in fact systemically important nearer the bottom.

Last week the SEC finally got around to publishing new rules for money market funds which forces certain, arguably riskier, funds to switch to a floating share price instead of the current fixed $1-a-share cost. They have two years to comply.

Now, as Matt Levine says, you can largely ignore the changes if you’re a (coddled) human rather than a corporation as funds targeted at retail investors will be exempt from the floating share price, but still, from the FTRead more

Further reading

Elsewhere on Monday,

- Benchmark blues.

- The bastard love-child of snooping and high-level mathematical theory.

- Judge Griesa, very much in the soup.

- And the #GrieFault trade. Read more

The 6am London Cut

Markets: “Asian stocks rose, with a gauge of Chinese shares in Hong Kong heading toward a bull market, while Treasuries and oil slipped as investors await data on U.S. services before the Federal Reserve meets this week. Soybeans and corn rallied… U.S. reports on services activity and pending home sales are due before the Fed meets to discuss monetary policy, while Goldman Sachs said last week rising yields may spur a retreat in global stocks and bonds over the next three months.” (Bloomberg)

And have a weekly calendar of events (click to enlarge) for what Citi are calling “a volatile week in a boring month”: Read more

Dealmaking from an Indian jail apparently not so easy

Sahara’s incarcerated “managing worker” Subrata Roy — who is in a scrap with regulators over $4bn worth of convertible bonds sold, oft to impoverished farmers, in 2008 — is after a dealroom at Delhi’s Tihar jail.

Can you blame him?

If you were sitting in jail waiting for a (roughly) $1.6bn bail to be posted while being given some 6hrs leave a day to negotiate the sale of of three trophy hotels, including the Grosvenor in London, the proceeds of which would go towards meeting that bail… wouldn’t you try to hunt down a little extra calm and negotiating space? Read more

Further reading

Elsewhere on Friday,

- Andolfatto interviews Woodford.

- Barc’s dark pool rebuttal: technical and nit-picky, but persuasive.

- In other words, to continue offering high yields, Yu’E Bao has started to display classic signs of maturity mismatch.

- Hazlitt, Keynes and the glazier’s fallacy. Read more

The 6am London Cut

Markets: Asian markets were generally higher following a decent Wall Street session buoyed by corporate earnings, with Japanese stocks brushing off figures showing a fall in inflation. The attraction of haven assets dimmed as the S&P 500 notched yet another record high close in New York, gaining 0.1 per cent to 1,987.9 as generally well-received earnings reports outweighed lingering geopolitical worries. (FT’s Global Markets OverviewRead more

Putting a floor under the Grosvenor in India

Some numbers to understand the Sahara group, India’s hotel-to-banks conglomerate:

Rs 10,000 crore (roughly $1.6bn): the amount Subrata Roy, he of the “empire built on the poor“, must pay in bail if he is to be let out of Delhi’s Tihar jail after a five month stay.

Roughly $1.6bn: the combined estimated values of Mayfair’s Grosvenor House Hotel and the Plaza and Dreams Downtown Hotels in New York, all owned by Sahara.

Six hours: the amount of time per day Roy will be let out of jail to negotiate sales of the group’s hotels once a concrete offer is made. Read more

Further reading

Elsewhere on Thursday,

- Behind the scenes in Putin’s court.

- Anarchy unbound.

- More Summers on secular stagnation.

- The pen is dead, long live the fingerRead more

The 6am London Cut

Markets: Chinese equities led Asia-Pacific bourses higher on hopes that the manufacturing sector in the world’s second-largest economy is expanding at a quickening pace. HSBC’s “flash” purchasing managers’ index for July – an early indicator of factory activity – rose to an 18-month high of 52. A reading above 50 indicates growth. Other markets in the region were also buoyed by a positive tone from Wall Street, where the S&P 500 closed at record high. (FT’s Global Markets Overview)

Mark Carney on Wednesday sent the strongest signal yet that the Bank of England was preparing to raise interest rates. But the bank governor voiced deep concerns over the ability of UK households to cope with higher borrowing costs. Speaking to business leaders in Glasgow, Mr Carney said the economy “is starting to head back to normal” and as it does so, “[the] bank rate will need to start to rise in order to achieve the inflation target”. (Financial TimesRead more

China property chart du jour (yes, another one)

And the reason we keep going on about lower tier cities, from Nomura:

 Read more

Further reading

Elsewhere on Wednesday,

- Senate literary critics don’t like fictional derivatives.

- The history of autocorrect and why Word couldn’t very well go around recommending the correct spelling of mothrefukcer.

- Crime, punishment and the Citi settlement.

- Monetarism and the great depression. Read more

The 6am London Cut

Markets: Asia-Pacific equities climbed to fresh six-year highs as investors continued to place geopolitical concerns on the back burner. The upward moves followed an overnight session that saw global equities rally, in part because sales of previously owned homes in the US rose to their highest since October. The S&P 500 touched a record intraday high but then pared gains, ending up 0.5 per cent at 1,983.5. Volatility, as measured by the CBOE Vix index, fell 6.8 per cent. Even Russia’s Micex snapped a six-day run of losses, gaining 1.6 per cent. (FT’s Global Markets OverviewRead more

In defence of cows as safe assets

You’ll remember this from last year, we’re sure:

Our main finding is that, on average, [rural Indian] households earn negative returns on their investments in cows and buffaloes if labor is valued at market wages: we estimate average returns of negative 64% and negative 39% for cows and buffaloes respectively. If we value the household’s own labor at zero, estimated average returns increase, to negative 6% for cows and positive 13% for buffaloes… if cows and buffaloes earn such low, even negative, economic returns, why would rural Indian households continue to invest in them?

That, from Anagol, Etang and Karlan, led to a host of speculation about various economic and cultural factors which might explain India’s ability to slide past the “central tenets of capitalism”… h/t’s to the Onion all round. Read more

Further reading

Elsewhere on Tuesday,

- Let them eat cosmopolitanism.

- Russia: not, in reality, as big as it appears.

- Hound Putin not the minigarchs of Belgravia.

- Fiscal deceit and privatising the UK’s student loan book. Read more

The 6am London Cut

Markets: Asian investors brushed aside geopolitical tensions from Ukraine and Gaza, with equities broadly higher across the region. The advances came in spite of a weak session on Wall Street and little fresh news from the region. The S&P 500 ended 0.2 per cent lower in New York and the CBOE Vix volatility index rose 6.2 per cent. (FT’s Global Markets OverviewRead more

Flight to a semblance of quality, China property edition

Today in Chinese efforts to shore up the property market, from Bloomberg:

China will revive mortgage-backed debt sales this week after a six-year hiatus, as the government extends help to homebuyers in a flagging property market.

Postal Savings Bank of China Co., which has 39,000 branches in the country, plans to sell 6.8 billion yuan ($1.1 billion) of the notes backed by residential mortgages tomorrow, according to a July 15 statement on the website of Chinabond. The last such security in the nation was sold by China Construction Bank Co. in 2007, Bloomberg-compiled data show.

And from Nomura: Read more

Further reading

Elsewhere on Monday,

- Alibaba’s IPO and the scions of Chinese leaders.

- “The purpose of investing… is not to die poor.

- The Fed’s intervention in biotech and internet stocks. Read more

The 6am London Cut

Markets: “Asian stocks rose, joining a global rebound as better U.S. earnings offset the downing of a passenger jet in Ukraine and Israel’s invasion of Gaza. Emerging-market currencies climbed while corn fell to the lowest since 2010. The MSCI Asia Pacific excluding Japan Index advanced 0.3 percent as of 11:44 a.m. in Hong Kong, with three stocks rising for every two that fell. Futures on the Standard & Poor’s 500 Index (SPX) were little changed after the U.S. gauge climbed from its biggest loss in three months. Indonesia’s currency added 0.4 percent versus the dollar before the result of presidential elections is announced. Corn slumped 1.3 percent on U.S. production. Natural gas slid 1.9 percent.” (BloombergRead more

Further reading

Elsewhere on Friday,

- We get the fables we deserve: the war for Claridges.

- Do patents stifle cumulative innovation?

- Bridges to somewhere.

- A curious paucity of caliphatesRead more

Bitcoin, meet Lawsky’s BitLicense

This how the Bitcoin regulator comes, not with a bang but with an AMA.

In accordance with the New York State Administrative Procedures Act (SAPA), the proposed DFS rules for virtual currency firms will be published in the New York State Register’s July 23, 2014 edition, which begins a 45-day public comment period. After that public comment period, the rules are subject to additional review and revision based on that public feedback before DFS finalizes them.

Additionally, DFS is today immediately publishing a copy of the regulations on the website Reddit. Earlier this year, Superintendent Lawsky hosted an “Ask Me Anything” forum on Reddit about DFS’ work on virtual currency regulation, which generated more than 1,200 public comments. Links to the proposed rules are also being tweeted out from the DFS Twitter handle (@NYDFS) and Superintendent Lawsky’s Twitter handle (@BenLawsky).

 Read more

Because low vol just happens some times

On the search for lost vol, complex systems and the limits of analysis from HSBC:

A curious feature of current conditions is that the explanation for the phenomenon is often taken to be self-evident. It’s caused by QE and low interest rates. It’s caused by lower trading volumes from hedge funds. It’s caused by lower risk appetite (even though risk premia are highly compressed). It’s caused by crisis fatigue and complacency.

 Read more

Further reading

Elsewhere on Thursday,

- Another possible ‘landmark’ bond default in China.

- Noah Smith vs Zero Hedge.

- The good Tsar bias.

- A rather profitable Time Warner betRead more

The 6am London Cut

Markets: Asia-Pacific stocks were on track for a fourth daily gain, after global stocks rose overnight as news of a mega-bid in the US media sector revived animal spirits. Improving global sentiment set the tone for greater risk appetite. The S&P 500 rose 0.4 per cent in New York, partly thanks to corporate earnings and economic data, but also after confirmation that Rupert Murdoch’s 21st Century Fox had proposed buying Time Warner last month in an $80bn deal. The cash and stock offer was rebuffed but Time Warner shares soared 17 per cent on Wednesday. (FT’s Global Markets OverviewRead more