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.

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The 6am London Cut

Ebay is to spin off PayPal which accounts for as much as half of its $65bn stock market value, in a further unravelling of one of the few remaining successes from the dotcom era of internet companies. The move marks a dramatic climbdown coming just months after the company rejected calls by the activist investor Carl Icahn to sell the online payments system. (Financial Times)

Just when good news was starting to flow again out of Ireland, along comes the European Commission to spoil the celebrations. The Irish economy is growing strongly after its three-year, €67bn bailout. But its cherished corporate tax regime, which has attracted billions of dollars of foreign direct investment over four decades, is now under intense international scrutiny. (Financial Times) Read more

Nothing to see at Santander, move along now

The disclosure of “material” information tends to generate a bit of discussion in corporate and financial circles, unless of course we’re talking Spanish banks.

Note this announcement from Santander on Tuesday: Read more

The 6am London Cut

Two of the world’s largest securities depositories have finalised a joint venture to create a vast pool containing trillions of dollars of collateral to ease banks’ search for scarce assets to back trading. The US’s Depository Trust and Clearing Corporation and Belgium’s Euroclear confirmed they would create a venture called DTCC-Euroclear Global Collateral Ltd. The two have been in discussions for more than a year. (Financial Times)

The Frenchman nominated to be Europe’s next economics commissioner has had his authority to review national budgets curbed. The move was a nod to deficit hawks in Berlin who opposed Pierre Moscovici’s appointment. Mr Moscovici, the former French finance minister, will be unique among the 27 incoming commissioners in that he will be legally required to prepare and submit his assessments of national budgets jointly with another commissioner. (Financial TimesRead more

23 years later…

The American Life radio show and the Pro Publica investigative journalism service set an interesting debate a-blaze last week, detailing the 46 hours of secret recordings undertaken by Carmen Segarra, a specialist hired (and subsequently fired) by the New York Fed.

The recordings have painted a vivid picture of regulatory dithering in the face of a rapacious Goldman Sachs as the bank sought to gain clearance for a share warehousing operation that would allow Spain’s Santander to sidestep European capital requirements.

Subsequent criticism has centred on the NY Fed’s apparent impotence in the face of Wall Street muscle. But is it more the case that Matt Taibbi has been right all along? Does the bank actively help clients dodge (if not break) the rules?

Let’s examine a largely forgotten example of Goldman’s past behaviour in London… Read more

The 6am London Cut

Allianz has insisted it has no plans to sell Pimco or interfere more in the business, after billions were wiped off the German insurer’s share price following the shock departure of Bill Gross, the US fund house’s chief investment officer, on Friday. (Financial Times)

While Apple is no stranger to allegations of tax avoidance from politicians on the warpath, in Brussels it is facing a more worrying threat: a tax repayment order that could potentially run to billions of euros. (Financial TimesRead more

46 hours later…

Some drivetime financial radio for Friday. Click to download or stream:

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Further reading

Elsewhere on Thursday,

- Did you notice? The world economy is losing momentum. Read more

The 6am London Cut

The Cut, The Survey: The 6am Cut, Lunch Wrap and Closer emails will soon be relaunched in enhanced form. We want to ensure we’re providing only the most useful data, news and views — taking this short 2 minute survey would help us do that.

Markets: In New York, the S&P 500 rose 0.8 per cent, snapping a three-day run of losses that saw the US equity benchmark retreat 1.4 per cent from a record closing high. The improved mood was attributed by some to data showing that US new home sales leapt 18 per cent in August, far more than expected – although housebuilding stocks were mostly lower. (Financial Times)

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Skids under Zhou Xiaochuan?

Sometime tennis partner of Larry Summers and People’s Bank of China governor Zhou Xiaochuan looks to be on the way out, according to a detailed WSJ report. Read more

This is nuts. When’s the crash?

Some clown’s made up a spoof investment pitch for Rocket Internet, the German e-incubator planning to float in Frankfurt next month at a valuation of something north of €6bn.

Secret papers: How the Samwers woo investors - Manager Magazin Read more

Peace at last for Prot?

The reference is to Baudouin Prot, who is clearly departing BNP Paribas, where he stepped up from chief executive to chairman three years ago. It gives us a chance to re-share this…

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Tesco’s off-balance sheet wheeze, courtesy of Goldman Sachs

This is not new, but bears revisiting, given recent events.

Between 2009 and 2013, as part of its sale and leaseback plan, Tesco used a series of six special purpose vehicles to issue close to £4bn worth of property bonds. Structured with the help of Goldman Sachs, the programme even won Tesco an award — Risk Magazine’s 2010 Corporate risk manager of the year.

But Nigel Stevenson, a former M&A banker at Kleinworts who now runs his own research shop, reckons the effect of this off-balance sheet financing has been to artificially reduce Tesco’s net debt by around £2bn. Read more

How to (further) spook a grocer, HSBC edition

With one, throwaway line… right at the end of a four-paragraph research note…

Many issues remain unanswered and the possibility of a rescue rights issue should not be ignored.

That’s from HSBC’s David McCarthy.

While we rather doubt that a cash call could be anywhere near to top of Tesco’s to-do list right now, just a whisper of those two words around the London market was enough to send shares in Tesco sharply lower once more (low of 200 at pixel time):

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The BABA pop, snapped

Just for the record…

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Henley demoted at Oracle as Ellison refuses to retire

Generalised exec deckchair shuffle at USS Oracle, out of the blue on Thursday…

The Oracle (NYSE: ORCL) Board of Directors today announced that it has elected Larry Ellison to the position of Executive Chairman of Oracle’s Board and appointed him the company’s Chief Technology Officer. Jeff Henley, who has served as Oracle’s Chairman for the last 10 years, was appointed Oracle’s Vice Chairman of the Board. Read more

A Scot vote bonus for Long Room members

Sorry we can’t offer this up to the open web, but if you are planning to stay up to watch the Scottish independence vote, and you also have access to the usual place, check this handy little excel download. Read more

The belated Michael Lewis effect?

The five and a half months since this book was published have not been an easy one for the high frequency trading community, certainly in the US…

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Is there evidence that Chinese/Cayman froth-float Alibaba has hired Buzzfeed to advise/train for a pre-IPO social media puff push? If so, should this be disclosed SEC-style?

On the first, maybe, on the second, dunno. You decide. Read more

Upon failing to read the F1, Alibaba edition (tweaked)

Back in 2007, during the early months of that year, before the financial crisis broke, there was a particularly comic rush-to-market amongst the alleged new breed of financial firm, eager to IPO before reality dawned.

It was a time when Fortress Investments floated — at circa 40 times prospective earnings, four times Goldman Sachs’ valuation multiple. Blackstone joined the market as a “limited partnership,” offering ‘units’ rather than stock. And a Wall Street old-timer called Thomas Peterffy took Interactive Brokers public with a calculated snub to the industry that had made him risk: sure, investors could put a value on his business, but a dual-class share structure would leave outsiders with just 5 per cent of the voting power. Read more

This is BABA. When’s the crash?

This of course is Alibaba, the Cayman e-commerce site. Click the image above for the SEC filing; click the image below for the corporate structure. Read more

Business News Site Publishes Dizzying 294-Slide Presentation Exposing….what exactly?

For Henry’s sake, just click the image.

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Is this really the way to choose the chair of a systemically important bank?

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Closing our (virtual) short in Blinkx

We’re taking what we might term evasive investment action. If you have even the remotest interest in Blinkx, a London-listed internet advertising company (see Markets Live passim), consider this shareholding notification. Click to read…

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The wonky, absurd scales of (insider dealing) justice

On Monday…

Mathew Martoma, the former SAC Capital portfolio manager who refused to co-operate with authorities targeting his old boss Steve Cohen, was sentenced to nine years in prison for insider trading on Monday. Sentencing guidelines indicated Mr Martoma, 40, could serve between 15 and 20 years in prison because of the size of the illicit profits. Read more

Draghi acts

From the ECB…

4 September 2014 – Monetary policy decisions At today’s meeting the Governing Council of the ECB took the following monetary policy decisions: Read more

Putting Draghi in his box, and getting him back out again

A week ago, Mario Draghi set euro policy-watchers all a-flutter, departing from his prepared remarks at Jackson Hole to issue a kind of blunt confession that he and his colleagues had run out of excuses for the ongoing depressed level of inflation across the eurozone, and that maybe some sort of reaction was required. Cue a quall of ECB QE speculation.

Then, on Wednesday this week, a story appeared on Reuters stating that, according to “ECB sources,” there was unlikely to be any new policy action from the ECB at its September meeting next week unless August inflation figures (published on Friday) showed the eurozone sinking significantly towards deflation.

The story remained exclusive to Reuters. But the message was clear: ECB officials are worried that market participants were reading too-much-too-soon into Draghi ad-libbing. Read more

Sharon Bowles, ‘side-shifter’ (updated)

News from the London Stock Exchange, released in deepest August, that it had hired Sharon Bowles, former chairwoman of the European parliament’s economic and monetary affairs committee, as a noddie rather failed to generate much coverage or comment at the time.

But it hasn’t escaped the attention of Sven Giegold, a German green MEP. He’s fired off an angry missive. Read more

A sell-side take on the corporate fat cattery debate…

Here’s a curiosity. The European consumer staples research team at RBC Capital Markets have taken a detailed look at executive remuneration across the key companies in their sector, with James Edwardes Jones and Mirco Badocco examining the links (or lack of them) between pay packets and shareholder returns, suggesting a few ways executive pay might be better structured.

This is unusual. While the press (and especially the British press) has harped on about executive salaries for a good 20 years, specialist sector watchers in the financial sector have generally ignored the issue, despite the exponential increase in top salaries since the days of Cedric the PigRead more

Bob’s back

8am on Wednesday sees a resumption of trading in Atlas Mara Co-Nvest, the cash shell that Bob Diamond floated in London last December, with a view to building a chain of banks across the African continent.

Atlas Mara is no longer a shell, of course. The shares were suspended for five months while Bob & Co raised $300m (against an initial target of $400m) and then completed the acquisition BancABC and African Development Corporation. This gives Atlas Mara a base network across Botswana, Mozambique, Tanzania, Zambia and Zimbabwe. It’s also trying to buy the commercial arm of BRD, the development bank of Rwanda. Read more

Markets Live limps back to life…

Summer’s over, right?  Read more