FirstFT – Wells Fargo chief under fire, the art of mirroring in business and the pitfalls of activity trackers

Elizabeth Warren tells John Stumpf he should be ‘criminally investigated’ over phantom accounts Read more

Guest post: Small-cap trading revamp is no more than a costly distraction

The US equity market is about to start a two-year programme testing changes for small-cap equity trading. This guest post from Richard Johnson, a market-structure and technology strategist with Greenwich Associates, argues that the costs of the programme may outweigh the benefits.

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Your comprehensive guide to the all new ‘Upstairs Downstairs’ London property market

Three months down the line, enough time has passed to properly assess the impact of Brexit on the London property market. Read more

Markets Live: Tuesday, 20th September, 2016

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Inquiring minds want to know: Can the BoJ control the yield curve?

It’s almost BoJ comprehensive assessment time with Kuroda’s massive JGB purchases and NIRP policy standing naked beneath the spotlights awaiting judgement from their own creators.

Part of that judgment involves the pain that a NIRP and QQE induced flattening of the yield curve has wrought on financials. Thus, as we’ve talked about already, part of the recommended remedy might involve some sort of Japanese Operation Twist to steepen said yield curve and help out said financials.

Of course, the range of things the BoJ can actually do is large and the subject of predicable disagreement. So before we get to the yield curve question, here’s some summary for those who want it. Those who don’t can skip down to below the breaks. Read more

Ve Interactive: Part Two

Technology startups aren’t known for their humility, but British unicorn Ve Interactive seems to have particularly ambitious forecasting.

In January 2015, the company confidently predicted close to a billion pounds of sales in 2016, along with an impressive £866m of profit, according to an investor document seen by FT Alphaville. Read more

FT Opening Quote: Emma Walmsley to head GSK

Emma Walmsley to head GSK, Sports Direct changes probe and Theresa May in NYC. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

“To say that most of the jobs we expect people to do today make full use of their potential is a vile slander, even if we are only measuring potential by the narrow standards of GDP” … Overcapacity, productivity and central bank largesse … Any paper that can say things like “our findings contradict the factional purge view” is ok by us … Love, friendship and public accounting don’t mix … Of Nordvig’s new shop … “‘Big Short’ guru tells whiny bankers to shut up” …  Read more

FirstFT – New York bomb suspect arrested, Theresa May’s extended honeymoon and the best emotional state to make decisions

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US police on Monday arrested Ahmad Khan Rahami in connection with bombings in the New York area over the weekend after a shootout that left the suspect injured. Mr Rahami, a US citizen who was born in Afghanistan, had been wanted for questioning concerning the Saturday night explosion in Manhattan that wounded 29 people, as well as a blast on Saturday morning in the New Jersey shore community of Seaside Park. Read more

What happens when floating-rate coupons sink below zero?

The short answer: Both bondholders and issuers could be in an awkward spot.

Many corporate bonds have “floors” in place, which means their coupon payments can’t go below zero. But in a recent note, S&P Global Market Intelligence calls attention to a host of floating-rate securities that don’t have coupon floors. Read more

Ski chalets, millennials and Brexit

Knight Frank’s annual ski property review is out. The good news for the chalet market is… Brits don’t have that much of an influence on chalet prices these days, so Brexit’s been no problem so far. Read more

P2P lending rediscovers balance sheet magic

Here’s a snippet from the latest annual accounts of Ratesetter, one of the UK’s top three “peer-to-peer” lenders, and shows the startup taking £2m of risk on to its own balance sheet in order to fund a borrower in “financial difficulty”.

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How do you solve a problem like RTGS moral hazard?

With blockchain distributed ledger technology (DLT) of course.

The good news is that with the release of its new consultation paper on Friday titled A new RTGS service for the United Kingdom: safeguarding stability, enabling innovation, the BoE finally seems to be acknowledging that its real-time gross clearing system (RTGS) is far from perfect and does need overhauling.

But before we get to the role DLTs may play in that overhaul, some background on RTGS first. Read more

Markets Live: Monday, 19th September, 2016

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One of these is not like the others, the BIS on China edition

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FT Opening Quote: Brexit profit warning from Mitie

Brexit profit warning from Mitie, optimism at Dairy Crest and profits up at Petra Diamonds. FT Opening Quote, with commentary by City Editor Jonathan Guthrie, is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Monday,

The BIS quarterly review is out.

Gavyn Davies: Will the BoJ cause a global bond tantrum?

– On the “just deserts” theory of justice and humanity as a gift-exchange web.

– The downside of upward mobility.

– The impact of NIRP on inflation, some empirical evidence.  Read more

FirstFT – New York on high alert, 50 days that will shake the world and why you should let your kids get dirty

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New York City was on high alert after an explosion rocked Manhattan on Sunday just hours before President Barack Obama and other world leaders were due to arrive in the city for annual meetings at the United Nations. Read more

Thought for the weekend

In 1789 the French revolution signaled to Europe and the rest of the world that monarchy was on its way out and new democratic age was beginning. Now, with Online Public Offerings made possible thanks to the JOBS ACT, Washio can raise capital directly from the public. So why did they not do it ?

– from a Medium blog post by Howard Marks, executive chairman at StarEngine and co-founder at Activision/Blizzard.

Week Four: FT Alphaville Fantasy Football League

Everyone this week has been talking about the new paper from Natasha Sarin and Larry Summers asking: “Have big banks gotten safer?”

The answer they come up with, you’ll be surprised to hear, is sort of no, not really, and it’s partly the fault of post-crisis regulation. Read more

Bank account fiddling as cultural bridge

What does this remind you of?

And by “this” we mean the sudden appearance of millions of Indian bank accounts which only boast balances of one-rupee each.

Any confusion as to why that would happen might be tempered by knowing that those accounts were opened as part of a massive financial inclusion plan undertaken by Modi’s government for which non-operational accounts weren’t a good look… and they were mostly opened at state owned banks.

Incentives are fun. Read more

What’s old is new again, fintech news edition

Found scattered around a London-based fintech incubator set-up this week:

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It’s all about macro, charted

In case anyone was in any doubt…

From Citi:

 Read more

Markets Live: Friday, 16th September, 2016

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FT Opening Quote: Strike price for Hollywood Bowl

Strike price for Hollywood Bowl, SVG rejects HabourVest offer, Avanti searches for buyer. FT Opening Quote is your early Square Mile briefing. You can sign up for the full newsletter here. Read more

Further reading

Elsewhere on Friday,

Your market summary: “it’s been a nice respite from the cesspit of ultra low vol, and if Macro Man’s wrong and it kicks off properly, so much the better- that’s a proper trader’s environment!”

Aswath Damodaran on fairness options: Fix them or flush them.

– The cat ‘scam’ and the domination of the middleman.

Meanwhile in an India where “zero-balance” accounts, amidst a financial inclusion push, were proving politically embarrassing: “So far, over 10m one-rupee accounts have been found at 34 banks, out of 240m accounts opened since 2014.”

Peter Praet on Target2. Read more

FirstFT – Deutsche Bank asked to pay $14bn, lessons from death row and how much parenting matters

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Test your knowledge with our week in news quiz.  Read more

Uber, the trading stamp unicorn

Uber, the unicorn that likes to transform investor funds into cheap promotional giveaways and publicity stunts, is hosting a pool party this Thursday and Friday in London to drum up support for its UberBus UberPool offer.

If you’re in the Uber London database you will have received this:

 Read more

Banks should hire McKinsey, says McKinsey

McKinsey & Co. has published a tome on the Death of Banks.

Well, they don’t actually say the end is nigh, but they do think the ranks of global mega-banks will shrink by at least half by the time the dust has settled: Read more

Markets Live: Thursday, 15th September, 2016

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