Biography
Latest posts

(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

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

Murdoch and Time Warner, one hundred years ago

1984, Fortune:

Warner would fit the scope of Murdoch’s ambition. It operates one of the most consistently profitable movie and TV studios in Hollywood, owns a vast film library worth more than $500 million, and has one of the largest record companies in the U.S. A battle for Warner would show off Murdoch’s defiantly competitive ways. His instincts are brute and he hardly ever bolts from a row. In late January, for instance, he had reporters at the New York Post searching for dirt about Steve Ross of Warner.

July 16 2014, NYTRead more

The (early) Lunch Wrap

Good morning New York,

FT ALPHAVILLE Read more

Further reading

Elsewhere on Wednesday,

- Who wouldn’t dislike the “Unaccountable Capital Markets Death Panel.”

- Oil futures trading in troubled waters.

- Congratulations to China where debt has finally reached 200 per cent of GDP.

- Hackathon accidentally picks perfect metaphor for own awfulnessRead more

The 6am London Cut

Markets: Asia-Pacific markets were barely moved by better-than-anticipated GDP numbers from China. Data out on Tuesday already showed that Chinese bank loans and other forms of credit grew at their fastest pace for three months in June. The Australian dollar, which usually reacts positively to better growth numbers in China, slipped 0.3 per cent to $0.9341. (FT’s Global Markets OverviewRead more

China and the cost of stimulus

Compare and contrast time. First Nomura, on China’s June credit and money growth data which grew at their fastest pace in three months in June:

M2 growth rose more than expected to 14.7% y-o-y from 13.4% on policy easing, and new total social financing also rose strongly to higher-than-expected RMB1.97trn in June from RMB1.40trn, largely led by off-balance sheet credit.

Stronger money and credit data are positive for short-term growth, but the renewed pick up in off-balance sheet credit raises a longer-term concern – if this is the start of another major upswing in TSF led by a less regulated shadow financing sector, it raises the risk of a sharper slowdown further out.

We continue to expect real GDP growth to stay at 7.4% y-o-y in Q2, unchanged from Q1, and also expect government to ease policies further in Q3, which should help growth to rebound slightly to 7.5% y-o-y in Q3 and 7.6% in Q4.

Then Peking University’s Michael Pettis, in his latest note: Read more

Further reading

Elsewhere on Tuesday,

- China’s bad debt cannot simply be socialised.

- Yates vs Sumner on on market monetarism.

- Bloomberg’s ‘secret’ Craiglist, just for posh people. Read more

The 6am London Cut

Markets: Asian equity markets were in day two of a rebound as investors took an optimistic view that problems in Portugal’s banking sector won’t cause anything like the contagion seen in 2011. Mainland China markets pared losses after central bank data showed that all sorts of money was being thrown around to prop up growth. The M2 measure of money supply rose at an annual pace of 14.7 per cent – its quickest since August – versus forecasts at just 13.6 per cent. (FT’s Global Markets OverviewRead more

Camp Buba

Just 10 days after Camp Alphaville? Hmmm. We await a hat-tip from the Bundesbank.

From the WSJ:

Bundesbank President Jens Weidmann reassured thousands of Germans who attended a weekend festival on the bank’s grounds that interest rates won’t stay at their current record lows any longer than absolutely necessary.

However, he reminded visitors–who flocked to the headquarters of the country’s revered central bank for a two-day extravaganza of food, music and children’s games mixed with serious policy talks—that Germany must make some concessions as a member of an 18-member currency bloc…

 Read more

Further reading

Elsewhere on Monday,

- China’s secret yuan paths.

- So now we know what lies beneath the recent Bulgarian bank runs. Fraud.

- Value is a highly subjective and evanescent thing, CYNK edition.

- LeBron and the theory of price controlsRead more

Pari passu: AV vs Martin Wolf

In the Alphaville corner… 64 posts and counting of the saga:

 Read more

I’m shocked, shocked, to find us in a low vol environment

Or, a history of vol, courtesy of Goldman:

 Read more

Further reading

Elsewhere on Monday,

- Paupers and richlings.

- “What, you want me to hire you and pay you $20 million, but your damn Managing Director can’t be bothered to attend the pitch meeting in person?”

- New York’s very own empty apartment melancholy.

- Dissidents forced on holiday in China. Read more

The 6am London Cut

Camp Alphaville reminder: It’s on Wednesday (Details here)

Markets: “Asian share markets edged cautiously higher on Monday while the dollar stayed under pressure ahead of packed week of economic data that will test investor hopes for a pick-up in the U.S. and global economies… Bulls are hoping to see evidence of an economic rebound in the United States in this week’s busy calendar of data that includes the June payrolls report on Thursday, a day early due to the July 4 holiday.” (ReutersRead more

Because sometimes the Indian central bank needs table tennis players, that’s why

Central bank posts du jour, courtesy of the Reserve Bank of India and Tom Bowker, do click through for the full ad:

Applicants should note, though, that according to the RBI they’ll have to keep up regular office duties to some vague extent while, say, playing carrom in MumbaiRead more

Further reading

Elsewhere on Friday,

- The problem of Pablo Escobar’s hippos.

- In China, it’s the information contagion that’ll get you.

- Inequality begins at birth.

- Sahara, Subrata Roy and shadow banking in India. Read more

The 6am London Cut

Camp Alphaville FAQ continues: Will Cardiff have a megaphone? Yes. Will that be his only crowd control tool? No.(Details and tickets here)

Markets: Asian stocks are ending the week on a downward note after Japanese data indicated that the country’s efforts to kick-start higher inflation had stalled. The BoJ estimates that the April 1 consumptin tax increase added 1.7 percentage points to the core CPI data in April and 2 percentage points for May. That means that core annual rate of inflation was 1.5 per cent in April, and dropped to 1.4 per cent in May. “Virtually the entire surge in the CPI over the past two months can be attributed to April’s consumption tax increase,” said Capital Economics. (FT’s Global Markets OverviewRead more

Further reading

Elsewhere on Thursday,

- It’s important to distinguish between criticism of dark pools generally, and Barc’s dark pool in particular.

- And remember, traders have choices.

- Cowen in conversation with Ralph Nader.

- Citi’s brave little prop desk. Read more

The 6am London Cut

Camp Alphaville reminder: It’s in six days time (Details here)

Markets: The mood across Asian markets was upbeat as traders looked past Wednesday’s dismal US gross domestic product report — which showed that cold weather and revisions to healthcare spending pushed US GDP down an annualised 2.9 per cent — to more recent data indicating that activity in the world’s largest economy has since rebounded. (FT’s Global Markets OverviewRead more

The euro macro trade?

Things that should make Draghi smile include…


Click Citi’s charts to enlarge. They show that the euro’s correlation with stocks has turned negative following the ECB’s swarm attack earlier this month. Read more