Paul Murphy

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Paul Murphy is the founding editor of FT Alphaville and an associate editor of the Financial Times. He joined the FT in London in 2006 as development editor of, concentrating on the expansion of the online business. Prior to that, he served as the Guardian’s financial editor for seven years. He has also held senior positions in business journalism at the Sunday Business newspaper and the Daily Telegraph. Murphy is a graduate of the London School of Economics.

Would 11,000 BHS workers still have jobs if Tina Green hadn’t siphoned £1bn out of the business?

Administrators are going in at BHS, the British chain of down-at-heel department stores, best known through the years for its budget lighting department and serving up cheap coffee to pensioners.

The business has been managed for most of the past 16 years by Sir Philip Green, “King of the Shops,” on behalf of his wife Tina, who has spent the period in Monaco, avoiding UK tax. BHS was sold last year to an opaque group of supposed turnaround specialists. But the situation was probably already terminal – hence the sale price of £1.

Here, in very rough terms, is how the finances worked. It’s an open question as to whether, with a little less financial engineering, this business might yet have survived. Read more

Just one oddity in the VW numbers…

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Buy a ByRD on BABA? NYSE goes the full Las Vegas

Let’s start with the guff.

We’re excited to offer investors these innovative and solutions-driven investing tools

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Hong Kong floats are going nuts again

On Tuesday last week, a company called Luen Wong Group, joined Hong Kong’s new-ish Growth Enterprise Market at 25 HK cents a share. By Thursday it was trading at 46 times that. Luen Wong is a civil engineering subcontractor. It’s a specialist in roads and footpaths and drainage.

The company has proved to be the most eye-catching of recent Hong Kong IPOs, but there are plenty of other examples of nuttiness.

A day before Luen Wong arrived, Hypebeast, an online fashion store, jumped 20 fold on the GEM. Read more

An old world tech-ageddon?

Intel provided us with an eye-catching number as it announced, late on Tuesday, “a Restructuring to Speed its Transition to a Company that Powers the Cloud and Billions of Smart, Connected Computing Devices…”

Up to 12,000 Intel people — 11 per cent of the workforce — will lose their jobs.

Trip Chowdhry’s Global Equities Research has extrapolated that news out to the wider old skool US tech world and come up with a rather larger layoff number: 369,000 over the next 12 months. Read more

Project Atlas (in Italian)

The presentation deck for the €5bn plan to prop up Italy’s weaker lenders has leaked to Economia Il Messaggero. Click to read:

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“Following an urgent request for international judicial assistance in criminal matters from the Serious Fraud Office…”

The extraordinary story concerning Monegasque ‘energy services’ group Unaoil, broken jointly by the Fairfax media titles in Australia and Huffington Post in the US 24 hours ago, looks about to erupt fully.

Here’s the statement released by the Principality on Thursday evening. It seems Britain’s SFO has been first off the mark acting on the findings of a six month long journalistic investigation. The findings will be of interest to certain US regulatory bodies as well, no doubt. Click to read… Read more

Further reading

Elsewhere on Thursday,

- Online fraud victim compensation and moral hazard.

- The aggressive, outrageous and infuriating (ingenious) rise of BrewDog.

- Minsky had some thoughts about Trump.

- Quantifying the Fed’s impact on the S&P 500. Read more

Sarao ruling… (he’s lost, but can appeal)

Click to read…

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Just one bit of the Valeant disclosures we are struggling to understand…

Can you help? Read more

“The Board requested that former chief financial officer Howard Schiller tender his resignation as a director, but Mr. Schiller has not done so.” (UPDATED)

Back in October, Bill Ackman asked the question of Valeant chief executive Michael Pearson:

Mike, is there any fraud going on at the company?

We got a fuller answer on Monday. Click for the 8-K: Read more

A Valeant reminder

It’s an unsustainable business model aimed at bilking insurance companies.

The latest Valeant market crash was still ongoing at pixel, the stock being off 45 per cent or so at $38.

You could pin this simply on the dreadful Q4s and accompanying 2016 guidance: revenues to fall 12 per cent. Read more

Has the cold US-Sino trade war just got piping hot?

One of the go-to guys on trade litigation between the US and China is Bill Perry, a Seattle-based attorney who spent the 80s at the US International Trade Commission, the Office of Chief Counsel and Office of Antidumping Investigations, and the US Department of Commerce.

While tackling all sorts of anti-dumping and countervailing duty cases, he runs a blog that covers what it says on the tin: US China Trade War

And if you ask him about the fast-escalating case involving China’s ZTE Corp, Bill will offer you one word: Hòumén (back door or 后门 in simplified Chinese. Read more

London’s former blue chips

To cite Investopedia…

The name “blue chip” came about because in the game of poker the blue chips have the highest value. Blue chip stocks are seen as a less volatile investment than owning shares in companies without blue chip status because blue chips have an institutional status in the economy. Investors may buy blue chip companies to provide steady growth in their portfolios. The stock price of a blue chip usually closely follows the S&P 500.

While throwing in some history… Read more

Here’s the latest example of regulators introducing rules to ‘protect’ retail investors by keeping said investors in the dark

From the SEC, via FINRA, late last month…

Rule 2242 is intended to foster objectivity and transparency in debt research and to provide investors with more reliable and useful information to make investment decisions. The rule adopts a tiered approach that, in general, provides retail debt research recipients with extensive protections similar to those provided to recipients of equity research under FINRA rules, with modifications to reflect differences in the trading of debt securities.2 At the same time, the rule provides broad exemptions for debt research distributed solely to eligible institutional investors.

And from Barclays, on Thursday… Read more

Revisiting James Stunt

We must dust off our Vulgarati series, since “London art dealer and multi-billionaire” James, husband of Formula 1 heiress Petra Ecclestone, has new wheels…

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London Börse: help needed

Back in the late 90s, during one of the first attempts to forge a merger or some sort of alliance between the London and Frankfurt stock exchanges, an internal competition was launched to find a name for the new entity. The prize was a weekend for two, all expenses paid, in either London or Frankfurt, depending on the winner’s abode.

In the event, all the entries came from the Deutsche Boerse side; none at all came from the LSE. But in any case, a winning entry was never chosen because the whole plan fell foul of board level egos. And every merger plan since has fallen on similar grounds. Read more

Sloppy spreaders

The FCA has posted one of its “Dear CFO” letters to the UK spreadbetting/CFD sector. It follows a review across ten firms which (surprise, surprise) found various areas of concern.

Would-be investors in CMC Markets, whose float closes on Thursday, might take particular note. They are, after all, being invited to help Peter Cruddas and his wife Fiona, along with Goldman Sachs, take more than £200m off the table…

Click to read. Read more

Novo Banco: Fixing the Bank of Portugal’s mistake

The ECB, we guess, is still getting to grips with its new(ish) role as bank regulator-in-chief across Europe. But in the case of Portugal’s Novo Banco, the phoenix-like entity created out of the collapsed Banco Espirito Santo, there’s no evidence the ECB has any handle whatsoever.

A strange re-resolution of Novo Banco, announced between Christmas and New Year, has been left entirely to the Bank of Portugal, whose bungling plan to protect local retail investors at the expense of foreign bond holders (notably Blackrock and Pimco) now looks to be headed for the courts.

Indeed, as Bloomberg reported this week, Clifford Chance in London and PLMJ in Lisbon have now been hired to sue the Portuguese central bank.

Yet all this could be avoided, if only the Bank of Portugal would lose a little of its bloody-mindedness. Read more

Markets Live borked (updated)

We have a severe problem with our ML comments system. We can’t restart Tuesday’s session of Markets Live until that has been looked into.

The tech team are on the case, but probably best you go make yourself a cup of tea. Read more

Davos clickbait is getting worse

Henry Blodget set a high bar in low-grade blogging five years back when visiting the WEF’s annual Alpine outing: he took photos of each bit of junk in his official Davos bag. It made for a 22-page slide show, bringing in 124,481 reader page views — the advertising on which will have helped to pay for his trip.

At Davos this year it fell to Quartz to come up with a fresh way to waste readers’ time, promising this:

We brought an antenna to Davos to track private air travel, and here’s what we found

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A month of failed rallies in Anglo American

Anyone practicing their knife-catching skills with this particular miner will have replaced their hands with ribbons. Here’s Anglo American of late…

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Oil — ‘Almost as cheap as the world has seen in 50 years’

Consider this chart from Charles Robertson at Renaissance Capital. Click to enlarge…

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A Footsie bear market, illustrated…

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Paul Donovan is joining Markets Live on Wednesday at 11am

Roll up. UBS Global Economist Paul Donovan will be on tap to discuss Davos, the alleged Fourth Industrial Revolution, and all things market-related during today’s session of Markets Live.

It’s rather timely, given that the Footsie was off 3 per cent at pixel.

So get your questions ready. You can prepare by reading the UBS white paper here.

Click here at 11am.

New to Markets Live? Read this. Read more

Sir Mark Walport, F̷R̷S̷,̷ ̷R̷C̷P̷,̷ ̷R̷C̷P̷a̷t̷h̷,̷ ̷M̷e̷d̷S̷c̷i̷ ̷ Quack

Distributed ledger technologies have the potential to help governments to collect taxes, deliver benefits, issue passports, record land registries, assure the supply chain of goods and generally ensure the integrity of government records and services. In the NHS, the technology offers the potential to improve health care by improving and authenticating the delivery of services and by sharing records securely according to exact rules. For the consumer of all of these services, the technology offers the potential, according to the circumstances, for individual consumers to control access to personal records and to know who has accessed them.

That’s from a report by the UK Government’s chief scientific adviser, Sir Mark Walport. Read more

Chairman Xiao insists he’s staying put

There seemed to be an inevitability to news broken by Reuters earlier on Monday that Xiao Gang, the embattled head of the China Securities Regulatory Commission, had offered to resign and would shortly be moving jobs.

He, after all, was responsible for the bungled introduction of stock market circuit breakers this month, which cost many Chinese investors their shirts. This supposed market safety valve had to be withdrawn in something of a hurry, leaving higher-ups in the Chinese leadership extremely unhappy, according to Reuters.

But no! Read more

“If I am right, the S&P would fall to 550, a 75% decline from the recent 2100 peak”

Dan McCrum, in his new-ish role as the FT’s Capital Markets Editor, went along to the Albert Show on Tuesday – the annual SocGen strategy presentation fronted by the bank’s famous (equity) bear Albert Edwards. Dan’s summation:

Albert was out bear-ed by the guest speaker, Russell Napier.

But Albert is not a man to be out bear-ed. If anyone is going to out-Albert Albert, it will be Albert himself, and so to his freshly printed Global Strategy Weekly. Emphasis his… Read more

Stevie Cohen, neutered (again)

The SEC just will not lay off this particular hedgie…

Washington D.C., Jan. 8, 2016 — The Securities and Exchange Commission today announced that hedge fund manager Steven A. Cohen will be prohibited from supervising funds that manage outside money until 2018 in order to settle charges for failing to supervise a former portfolio manager who engaged in insider trading while employed at his firm. In addition, Cohen’s family office firms will be subject to SEC examinations and the firms must retain an independent consultant to conduct periodic reviews of their activities to ensure compliance with securities laws. Read more

Pricing Aramco

That, at right, is a slice of Saudi Aramco history that you probably won’t be seeing in an IPO prospectus any time soon — a story on the strikes that once wracked the Saudi Arabian state oil company’s eastern oil fields (in 1945, 1947, 1953 and 1956)…

A little bit of political risk on the way from the first Saudi oil concession to foreigners in 1933 and Aramco’s modern role as the might behind Saudi Arabia’s swing producer status in the oil market. Read more