Biography
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Izabella Kaminska joined FT Alphaville in October 2008, which was, perhaps, the best time in the world to become a financial blogger. (Added bonus: there was a free breakfast trolly.) Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP’s internal magazine. She has also worked as a reporter on English language business papers in Poland and Azerbaijan and was a Reuters graduate trainee in 2004.

Everything she knows about economics stems from a childhood fascination with ancient economies, specifically the agrarian land reforms of the early Roman republic and the coinage and price stability reforms of late Roman emperors. Her favourite emperor is one Gaius Aurelius Valerius Diocletian.

She studied Ancient History at UCL, and has a masters in Journalism from what was then the London College of Printing.

And yes, she is also a second-generation West London Pole (who likes mushroom picking, bigos and pierogi).

Financial technology, sustainability & Trichet on our sci-fi future

We’ve rushed straight from Camp Alphaville’s big data, AI and debt sustainability conversations to Paris to take part in a United Nations Environment Program-hosted symposium entitled New Rules for New Horizons: Reshaping Finance Sustainability.

[As an aside - we were delivered to the venue by a particularly overjoyed Parisien taxi driver celebrating news that local protests against Uber's UberPop service, which allows non-professionals to offer rides, had successfully persuaded the Silicon Valley Taxi-Unicorn-App-Monopoly-Disruptor to suspend the service as of this weekend.]

This is a very brief summary of the session we moderated on financial technology and sustainability — yes there is a connection — before a more thoughtful take on everything we’ve just downloaded sometime next week. Read more

Camp Alphaville videos: Transhumanism

For those who couldn’t join the FT Alphaville team in the sweltering heat on Wednesday at Camp Alphaville, here’s a recap courtesy of the FT video team.

Cardiff Garcia starts by asking Zoltan Istvan — writer, futurist, philosopher and 2016 US presidential candidate for the Transhumanism party — what exactly is transhumanism all about? Read more

BREAKING: Last minute Greek emergency session at Camp Alphaville

We too can rip up our promised programme to respond to the evolving wants and desires of the Camp Alphaville polis.

As of pixel time, Wednesday’s “The Untouchables: The Saga of Weird Emerging Market Sovereign Bonds” debate becomes the “Last minute Greek emergency session” panel — to be moderated by our resident sovereign default expert Joseph Cotterill (who also doubles up as the FT’s private equity correspondent).

Joseph will be joined by:

  • Paul McNamara, Investment Director, Emerging Markets, GAM Holding AG
  • Gabriel Sterne, Head of Global Macro Research, Oxford Economics
  • Rodrigo Olivares-Caminal, Professor of Banking and Finance Law, Queen Mary University London

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Monday’s Greek bond yields charted and preserved for posterity

Courtesy of Tradeweb, a summary of the Greek bond yield action this Monday:

Yields on the 10-year Greek government bond surged to their highest levels since November of 2012, according to data from Tradeweb. The bid yield on the 10-year Greek bond closed at 15.429%, the highest yield since November 30, 2012, when it closed at 16.262%. Today’s closing yield was up 462 bps from the close on Friday at 10.814%. This is the largest one-day yield increase since Tradeweb began trading Greek government bonds in November of 2001. The next closest one-day move by order of magnitude was on March 7, 2012, when the 10-year bond surged 388 bps amidst the Greek debt swap to avoid default. Read more

Greece: Analyst views on capital controls, bank holidays

We’ll be slamming up the best of our collective inbox on matters Greece as and when the good stuff pours in.

Catching up on the last few hours, here’s JP Morgan’s Greg Fuzesi:

In light of the deepening crisis in Greece, a key question is how the ECB will respond to any signs of contagion to the rest of the Euro area. At the end of today’s policy statement about the ELA decision, the ECB said that “the Governing Council is closely monitoring the situation in financial markets and the potential implications for the monetary policy stance and for the balance of risks to price stability in the euro area.” The ECB added that “the Governing Council is determined to use all the instruments available within its mandate.”

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Greece: bank analysts and eurowatchers on what to expect on Monday (UPDATED)

For the latest on the ECB’s liquidity position on Greece, see our post here.

Meanwhile, here’s some instant analysis by way of the FT Alphaville collective inbox:

UPDATE: Capital controls and a bank holiday now confirmed; full research pack from Buiter, Barr and others available in the usual place. Read more

The BIS on ETFs and bond market liquidity

The latest BIS Annual Report, released on Sunday, cites numerous concerns about the unseen damage being caused to financial stability on account of ultra-low interest rates.

Key among those concerns: how liquidity-guaranteeing ETFs in the bond sector may be contributing to a global liquidity illusion, disguising the true state of the ability to trade positions on the bond market — a topic very close to FT Alphaville’s heart.

As the report notes (our emphasis):

Another key change in bond markets is that investors have increasingly relied on fixed income mutual funds and exchange-traded funds (ETFs) as sources of market liquidity. Bond funds have received $3 trillion of investor inflows globally since 2009, while the size of their total net assets reached $7.4 trillion at the end of April 2015 (Graph II.12, left-hand panel). Among US bond funds, more than 60% of inflows were into corporate bonds, while inflows to US Treasuries remained small (Graph II.12, centre panel). Moreover, ETFs have gained importance in both advanced economy and EME bond funds (Graph II.12, right-hand panel).

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‘Tranquil exclusivity’ in the heart of London for just £1.375m

From Redrow’s marketing blurb for their new “Holland Park 205″ development:

For those looking for apartments in central London, this exquisite development enjoys both a prime location in the heart of the city, as well as a tranquil exclusivity renowned within these upmarket neighbourhoods.

This enclave of west London combines elegant leafy streets and squares with the beautiful 54 acre Holland Park, where there is outdoor opera on balmy evenings.

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Innovating fast or slow? Gates vs Wolf edition

At the FT’s 125 forum on Wednesday night, Bill Gates, Microsoft co-founder and Bill & Melinda Gates Foundation co-chair spoke with the FT’s editor Lionel Barber about topics as far ranging as philanthropy, AI, climate change and management.

But if there was one core takeaway from the evening’s discussion it was Bill Gates’ adamant stance on the pace of innovation, which he described as currently taking place at its fastest rate ever. All this, he suggested was leading to a “supply-side miracle” with hugely deflationary consequences for the global economy as a whole. (A truncated version of the interview is now available here.)

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Hello world. I’m the PetroEuro!

Back in November we meandered through the possible implications of there being no more petrodollars in the system (on account of US shale oil energy liberation).

Since then, we’ve also been thinking about the possible implications of there being no more sweatdollars in the system (on account of US re-shoring and digital manufacturing trends).

So what happens if key dollar recycling pathways were to be significantly closed off or contracted?

Privately, we’ve speculated the situation could over time lead to the rise of a new international funding currency front runner. (Though, certainly not because the US is losing influence. More because, shale oil and a labour surplus means it may not be in America’s interest to defend reserve-currency status at all.) Read more

Lord, won’t you buy me a core €-denominated Mercedes Benz

You may have thought this was just a car…

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Calling all finance nerds!

Think you know the difference between a CDO and a CDS? Or the day of the week Mario Draghi got flashed by a protestor?!

Then turn your attention to…

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Peru’s FX swappy central bank intervention

This is a snapshot of the Peruvian economy’s growing dependency on central bank intervention by way of BNP Paribas on Tuesday,

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Camp Alphaville ft. ‘Forever Young’

Do you want to live forever?

How about be Forever Young?

Because, apparently, according to Aubrey de Grey, gerontologist and co-founder of the California-based Strategies for Engineered Negligible Senescence (Sens) Foundation, there’s now an 80 per cent chance of escaping old age and ill-health indefinitely for all of us alive today. Read more

Through London’s posh-door/poor-door keyhole

Selling flashy apartments in London is good business. As the FT’s Lex column reported last week, Berkeley Group, one of the most well known premium house builders, achieved a pre-tax return on equity of 29 per cent in its latest year-end results. Read more

When commodities trade at negative prices…

Here’s something that doesn’t happen every day.

The price of propane in Edmonton, Canada — home of Tar Sands production — is trading at a negative price. Read more

The Old Lady of Threadneedle Street blogs!

Welcome to Bank Underground, the official (and slightly subversive sounding?) Bank of England staff blog.

It’s gone live this Friday, with not one but two inaugural posts touching on topics as far ranging as the impact of driverless cars on the insurance industry to the somewhat wonkish debate over how the ELB (effective lower bound) might one day constrain monetary policy and inflation.

While the BoE isn’t the first central bank to publish staff analysis in blog form– the New York Fed’s staff have been blogging on Liberty Street Economics since 2012 — it is the first that intends to use the medium as a mechanism for self-scrutiny and internal challenge.

As Andy Haldane, the Bank’s chief economist and executive director of monetary analysis and statistics told FT Alphaville this fits with the Bank’s push to make itself more open and transparent. Read more

If Google mapped the financial system…

This is a Google Map of the City of London:

It’s a “square mile” because back in the day — before phones, fax machines or the internet was invented — representatives from the key settlement banks had to gather in person to net and settle outstanding debts and claims against each other (a mile essentially being about as far as messengers could be asked to travel in a day). Read more

On the robustness of cryptobonds and crypto settlement

Online retailer Overstock last week became the first company to offer a corporate bond, valued at $25m, in the form of a “crypto security”.

Unsurprisingly, the story was pumped up by the crypto trade press, which has a habit of taking statements from vested interests at face value.

But, as Bloomberg’s Mark Gilbert has hinted indirectly there’s something hypocritical about lauding a bond for its transparent blockchain traceability features while at the same time providing sketchier than sketchy details about all its other aspects. Read more

Further reading

Elsewhere on Thursday,

- Barney Frank joins a bank board.

- An FOMC recap.

- And some important observations about swaps.

- The tragedy of the climate commons. Read more

Further reading

Elsewhere on Wednesday,

- Delivery wars, commence!

- Who could buy Twitter?

- Two illustrative Greek crisis charts.

- Bitcoin, where a 7 per cent increase is now a “surge”. Read more

Bitcoin Opec favours 8MB blocksize increase

Bitcoin wants to grow. Sadly, because the Bitcoin protocol restricts the size of every block mined on the network to 1MB, it can’t scale easily. There’s a limited amount of transactions/data that can be consolidated into every block, which creates something of an artificial scarcity problem.

Some maintain good old fashioned capitalism can resolve the problem. If there’s a limit, people who want to transact quickly should pay to have their transactions/data prioritised in the chain.

Miners, especially those having a tough time covering their costs these days, favour this approach. Their view is that the sooner block size is restricted, the sooner the market will be able to find a true value for bitcoin transactions. Also, it’s not healthy for the miner network to depend on speculative inflows forever. True miner revenue would be like giving bitcoin a proper business model. It might also help eliminate blockchain spamming and free-loading. Read more

Oh you want your FX to be instant? That’s extra

Dan Davies’ cynical guide to fintech was so good and made so many worthy points we’ve decided to launch a new FT Alphaville series to pay homage to it.

For those who didn’t read the original, Davies basically broke down the supposedly “disruptive” fintech models in the market into seven core categories (*only one of which is arguably innovative). Read more

Carbon bubbles and artificial intelligence

Institutions like Carbon Tracker have proved that reframing collective action arguments in dollar cost terms can be highly effective at mobilising the world’s top asset holders to take action.

In the case of climate change, asset holders took note when the associated risks were presented as a carbon bubble threat on the basis that fossil fuel assets aren’t really wealth if they can never be burned (at least not if we’re to spare the planet from life-threatening climate change) .

But, it turns out, there may be another equally effective way of framing the argument. Read more

Techcrunch discovers finance may be technological

If you ever needed proof that California-based techies live in a bubble of self-deluded superciliousness, where (to their minds) nothing of any value ever happened until Silicon Valley or Ayn Rand ideologues came along, look no further than the following article from Techcrunch posted this weekend.

As the opener paragraphs report (our emphasis):

Money is pouring into fintech. In 2014, global investment in financial technology startups spiked to more than $12 billion. That’s three times what it was just a year prior, according to Accenture. There have also been some huge funding wins this year. Most recently, zero-commissions trading app Robinhood announced $50 million round and financial education site NerdWallet attracted $64 million in funds. Those are big, headline-grabbing numbers.

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Further reading

Elsewhere on Monday,

- Keynes on bubbles.

- Why Krugman is Keynesian.

- Ryanair arbitrage.

- An unexpected victim of dollar strength. Read more

China’s defence against supply chain disruption

Standard Chartered released a big note this week on the evolution of global supply chains, looking at the effects of new information technologies as well as the changing cost structures of established manufacturing zones.

One of the key themes is that manufacturing is moving westwards, away from China and over to India and Africa. China still has lower-wage areas inland and a fast-growing productivity advantage due to the rapid adoption of automation and robotics; nevertheless the centre of gravity is moving, they say.

Furthermore, the westward transition is also being facilitated by technology, especially things like the falling cost of radio-frequency identification technology and inventory tagging and monitoring. We presume it’s much easier to trust new supply networks if and when you can monitor their output and productivity real-time. As Standard Chartered’s analyst team of Madhur Jha, Samantha Amerasinghe and John Calverley note (our emphasis): Read more

All your futures may belong to long-term value investors

When it comes to bond market liquidity paranoia, it’s not the dealers we should be worried about but long-term value investors.

So at least says Bloomberg’s Matt Levine in his daily round-robin of what’s going on in the market:

The risk, if there is one, has to be located in what I’ve loosely called the value investors — the people who provide the ultimate bid for assets. Here there are obvious reasons for worry, which frankly I do not understand well enough to have any clear views. But the biggest worries revolve around the possibility of herding among bond investors and around those investors’ funding models. The worry is that there is one dominant model of bond investing, in which giant mutual funds and exchange-traded funds buy and hold every newly issued bond that comes along. Those funds offer their investors the ability to withdraw money pretty much any time they want. But if bond prices crash, investors will want to take their money out, the funds will need to sell, and all those giant bond funds that provided the bid for bonds on the way up will turn into sellers on the way down.

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Further reading

Elsewhere on Thursday,

- Does a “liquidity trap” ever end?

- Who is the best gun salesman in the whole world?

- How much is too much debt?

- People are worried about bond market liquidity. Read more