Slater & Gordon: oops, we double counted the cash

Slater & Gordon is the Australian law group which has bought almost all of Quindell, the London-listed basket of businesses balanced atop a law firm. On Friday we asked them about the difficulty of reconciling some lines on the cash flow statement to other part of the accounts. On Monday the group issued a statement to the Australian Stock Exchange restating historic cash flow statements.

The company and its auditor have begun a detailed analysis of financial information to be provided to the Australian Securities and Investments Commission, and discovered “a consolidation error… in the reporting of historical UK cashflows”. Accounting firm E&Y has been appointed to oversee the responses to ASIC queries.

Also on Monday, Quindell announced it wouldn’t publish 2014 financial statements by the end of June deadline, and its shares remain suspended. Historic figures will also be restated following a review by PWC. Investors might ask, what is the problem with law firm accounting? Read more

Markets Live: Monday, 29th June, 2015

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How’s that Zhou put working out for ya?

We’ll tear ourselves away from Greece to point out that Chinese markets are totally normal.

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Putting the ‘New Deal’ into climate R&D

At last week’s FT125 forum Bill Gates called for more investment in breakthrough clean technology research like high-altitude wind, which attempts to capture energy from the the fast flowing narrow air currents found in the earth’s atmosphere.

Gates also said he is planning to double his personal investment in transformational green tech to $2bn over the next five years in an attempt to “bend the curve” in combating climate change.

But another less expected message from Gates was that billionaire entrepreneurs like him operating in the private sector can’t be depended upon to change the energy paradigm alone — what some might describe as a slap in the face of those American tech entrepreneurs who favour fiercely laissez faire approaches to such challenges. Read more

We know what the euro is doing to Greece…

But, as the foreign press corp does its best to hurry some much needed euro into the Greek economy, we should also look at what Greece is doing to the euro.

Here’s Nomura’s head of FX, Jens Nordvig, on what to watch where the single, now more parlous, currency is concerned: 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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FT Opening Quote – Europe braced for Greek sell-off

European equities, bonds and the common currency are under pressure this morning from the crisis in Greece, where banks and markets are closed. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early City briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Monday,

- Ten days in June.

- The long history of the fight against Uber.

- London house prices approaching £200 per brick.

- How long is the short run this time? Read more

Grexit further reading

Elsewhere on Greece:

- Time for a fresh start?

- How the recovery will look like when Greece leaves the euro.

- Europe’s moment of truth leads to Grisis.

- What might contagion look like?  Read more

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. Read more

“The Governing Council stands ready to reconsider its decision”

The decision being to keep emergency liquidity to Greek banks going at its level last week. From the ECB’s Sunday statementRead more

“The Eurogroup has been open until the very last moment…”

After that late-night announcement in Athens of a July 5th referendum, the response on Saturday…

In one sense, Greece’s full membership of the euro is, quite literally, already being consigned to the footnotes of history.

Capital outflows, then and now

From Deutsche on capital outflow (lots of very crucial capital outflow) from Greece vs the periphery, 2012 vs now:

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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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Markets Live: Friday, 26th June, 2015

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Calling a top in China

Title wise, That was nuts. Is this the crash? was already taken. In this exact context. Last week.

So… this time the Shanghai Comp has just closed down 7.4 per cent (with some 70 per cent of stocks hitting downward limits), Shenzhen fell 7.9 per cent while ChiNext dropped 8.9 per cent. Read more

The changing nature of Americans’ income

It’s amazing what you can find when you spend some time in table 2.1 of America’s National Income and Product Accounts.

As anyone following the debates about inequality has surely heard, income from owning capital has fluctuated dramatically as a share of total personal income:

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Further reading

Elsewhere on Friday,

- Glastonbury vs Camp AV.

- Choice, American politics edition.

- Sponsoring China’s PMI is a risky business.

- “The rivalry between “actual business,” … and compliance may have started when Leviticus warned against using dishonest weights and scales and withholding a worker’s wages overnight.” Read more

FT Opening Quote – Tesco ‘steps forward’ with sales fall

Tesco has made a “step in the right direction” says CEO Dave Lewis….with another sales fall. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early City briefing. You can sign up for the full newsletter here. Read more

FirstFT (the new 6am Cut)

Saturday will be Athens’ final chance to strike a deal or trigger a ‘plan B’ Read more

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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Mystery short seller unmasked

Ok, only a mystery because we hadn’t announced it before, but Dan Yu of Gotham City Research will be joining us at Camp Alphaville next week to chat about his work, the business of digging into companies which are less than they seem, and the outlook for short selling more generally.

You can read some of his thoughts on the latter here, a response to our post on the need for more shorters, and the New York Times on the lonely life of the short seller, six years into a bull market.

We’ll be on the Alphaville couch at 4pm, so mark your agenda. Expect discussion of Dan’s latest target, Endurance International, as well as Plus500, Gowex, Hanergy, and Blinkx, along with everyone’s favourite technological conglomerised Aim market shambles. We may have some new ideas to talk about as well… Read more

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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Markets Live: Thursday, 25th June, 2015

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Learn to trade China’s A-shares like a pro or your money back*

Want to avoid market whiplash being driven by a whiplash president and crack the price-to-whatever ratio?

Come join our China panel at Camp Alphaville to find out how to make money up Shibor Creek! Read more

It’s 11.01 in Brussels [updated]

And we don’t know what that means… Updated with:

And from earlier this morning:

Greece is down to its final hours for negotiations over its soon-to-expire bailout, with creditors giving Alexis Tsipras, the Greek prime minister, until 11am Brussels time to come up with a workable compromise economic reform plan to release €7.2b in desperately needed rescue aid…

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Yay! The Sand Hill Exchange is back

Despite having been shuttered, brutally, a month ago by the SEC, a Silicon Valley start-up that tried to offer trading in derivatives linked to private SV companies like Uber and Snapchat is suddenly back in business. But there’s a catch.

Sand Hill Exchange had wanted to be the new Wall Street; instead it will now settle for being the new fantasy Las Vegas. Read more

The socialisation of US household debt

Zoltan Pozsar — who will be at Camp Alphaville, so buy your ticket now! — has a fascinating new slide deck illustrating the changing landscape of US household debt, which, thankfully, is easier to read than his incredibly detailed map of the shadow banking system.

While the total stock of household obligations is only slightly lower than it was at the peak in 2008, the composition of the lenders has changed dramatically. The government, which for our purposes includes Fannie and Freddie as well as the Federal Reserve, has become far more important, while so-called “shadow banks”, private-label securitisation, and foreigners have all become less important. On the whole, this is probably good for financial stability. Read more