From SpaceX to SilkRoad2

Remember that $70k Tesla car which was bought for Bitcoin last December and which the Bitcoin PR-lobby spun with grand fanfare into an excellent example of “user adoption”?

Well, turns out, it was bought by one Blake Benthall, a former SpaceX software engineer turned custodian and alleged operator of the illicit goods cyber trafficking site Silk Road 2, which sprung up in the wake of the Feds’ take down of the original site and following the arrest of its founder and operator Ross Ulbricht a.k.a the original Dread Pirate Roberts (DPR). Read more

Further reading

Elsewhere on Friday,

- “With bank earnings it’s not only the earnings that are probabilistic. Time itself is blurry.”

- Taibbi’s back with “JPM’s worst nightmare”.

- Eleven years ago today, Alan Greenspan confused the hell out of journalists covering the Fed. Read more

FirstFT, the email briefing formerly known as the 6am Cut

This is FirstFT, the FT’s new email briefing written by Amie Tsang in Hong Kong which is replacing the Lunch Wrap and the Cut. All Cut subscribers should now be receiving it in their inboxes. If that isn’t happening do please email firstft@ft.com or alphaville@ft.com.

If anyone reading this is not yet subscribed do please click here.  Read more

Quindell and the uncertainty principle

The Wednesday announcement by Quindell — an all purpose law firm, technological insurance outsourcer and scaffolding company — that three directors have arranged a loan to buy stock has not had the effect some might have expected.

The shares closed up on the day, but Thursday saw the shares hit a new post consolidation low of 118p in late trading. So what happened?

The answer may be a question of disclosure, in that the announcement raised more questions than it answered. Read more

Pimco cuts fees

A good catch from FundFire, on an offer of reduced fees for 12 months to a client thinking about leaving Pimco.

The fee structure was revealed in an memo to the San Luis Obispo County Pension Trust (SLOCPT) by its consultant Wurts & Associates, which has recommended that clients terminate their relationship with Pimco following the departure of chief investment officer Bill Gross for Janus.

The SLOCPT’s current fee structure includes a 0.5% fee on the first $25 million under management, 0.375% on the next $25 million and 0.25% thereafter. The proposed fee reduction would switch the pension over to a 0.05% (5 bps) base fee and a “15% participation rate for returns that exceed the index return plus the base fee (returns in excess of the index plus 5 bps).” The discount would “revert to current fee terms after 12 months.” PIMCO did not respond to requests for comment.

 Read more

The Irish letters

Here is an unimpressed Jean-Claude Trichet.

And here is the ECB’s full response to the revelation of the Trichet letter…

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Fending off the great Russian BearWhale

Back in March, when one US dollar still bought you 36 Russian roubles, we noted how the Kremlin’s attempt to publicly trash-talk the dollar by threatening to drop it as a reserve currency if and when the US was to impose sanctions was largely a propaganda tactic deployed to confuse the economically ignorant about the reality of who was really dependent on whom.

(As if Russia’s dependence on dollar reserves was ever a US Achilles heel. Quite the contrary, it’s always been Russia’s.)

From our point of view it was all a desperate measure to stave off a currency crises in the making, and obscure the fact that Russia’s CBR was losing control (given that even rate hikes were proving ineffective at curbing the rouble’s slide). Read more

FirstFT, the email briefing formerly knows as The (early) Lunch Wrap

This is FirstFT, the FT’s new email briefing written by Amie Tsang in Hong Kong which is replacing the Lunch Wrap and the Cut. All Cut subscribers should have found it in their inboxes for the first time today. If that didn’t happen for any reason do please email firstft@ft.com or alphaville@ft.com.

If anyone reading this is not yet subscribed do please click here.

FirstFT: Read more

Markets Live: Thursday, 6th November, 2014

Live markets commentary from FT.com 

Dear Ireland, take the bailout. Yours, Jean-Claude

With a large hat-tip to the Irish Times, here’s a friendly 2010 missive from former ECB president, Jean-Claude Trichet, to former Irish finance minister Brian Lenihan suggesting, secretly of course, that Ireland might just want to apply for that bailout if it wanted to continue to enjoy access to emergency liquidity assistance. As the Irish Times says, “around €50 billion [in ELA] had been extended to Irish banks at the time – with additional funds approved by the ECB the day before.”

More so, the letter “was sent the day after Central Bank governor Patrick Honohan appeared on Morning Ireland to say Ireland had no option but to apply for support. The ECB letter called for a “swift response” from the government. Two days later, on November 21st, the formal application for the bailout was made.”

You’ll find the letter itself below, but here are the key lines: Read more

Further reading

Elsewhere on Thursday,

- Tullock made “economics a discipline without frontiers.”

- China, Europe, and optimal currency zones.

- No, commodity traders cannot readily step into functions that banks exit or cut back.

- The internet of things that make your skin crawl.  Read more

FirstFT, the email briefing formerly known as the 6am Cut

This is FirstFT, the FT’s new email briefing written by Amie Tsang in Hong Kong which is replacing the Lunch Wrap and the Cut. All Cut subscribers should have found it in their inboxes for the first time today. If that didn’t happen for any reason do please email firstft@ft.com or alphaville@ft.com.

If anyone reading this is not yet subscribed do please click here.

FirstFT: Read more

We are hosting a New York pub quiz and drinks!

FT Alphaville and the FT’s US markets team are hosting a night of drinks and trivia in New York on the evening of Wednesday, November 19th.

The last time we did this (in London), we grilled you on the eurozone sovereign debt crisis, the complexities of synthetic ETFs, seasonal adjustments in economic indicators, and other proudly nerdy topics. Read more

Video: The dollar rally in context

Some thoughts on the recent dollar rally. See this post for more on the supporting arguments.

Quindell buyers club – Update

A fresh post-share-consolidation low for the Quindell share price appears to have tempted some buyers: three directors of the UK’s largest listed law firm and all-purpose insurance, technology and solar panel installation conglomerate.

Robert Terry, chairman, Laurence Moorse, finance director, and Steve Scott, non-exec, have together purchased 1,575,000 shares, for about £2m.

To fund those purchases the men borrowed the money and pledged an undisclosed amount of their existing stock holdings as security.* Read more

How the dumb money was set up for commodity failure

Here’s a great chart from Emad Mostaque, a strategist at Ecstrat, a new research company set up by Mostaque and former head of EM strategy at Deutsche Bank John-Paul Smith:

 Read more

FirstFT, the email briefing formerly known as the (early) Lunch Wrap

This is FirstFT, the FT’s new email briefing written by Amie Tsang in Hong Kong which is replacing the Lunch Wrap and the Cut. All Cut subscribers should have found it in their inboxes for the first time today. If that didn’t happen for any reason do please email firstft@ft.com or alphaville@ft.com.

If anyone reading this is not yet subscribed do please click here. Read more

Markets Live: Wednesday, 5th November, 2014

Live markets commentary from FT.com 

Moving on up now, can the dollar break free?

Jens Nordvig of Nomura reports a frequent question from clients: can the recent dollar rally turn into a big change in the currency’s value, similar to those that occurred in the 1980s and 1990s?

Answer: maybe, but it is worth remembering just how big those dollar moves were. See if you can spot them in the long term dollar index chart:

 Read more

Sentences to surprise nobody: Revolving-door of sell-side analysts edition

From the abstract of a new paper by UCLA’s Ben Lourie (our emphasis):

The purpose of this study is to examine the extent to which analysts who go to work for firms they have been covering, henceforth referred to as “revolving-door analysts,” alter their behavior in favor of the covered firms during their last year of employment. Based on a sample of 299 revolving-door analysts collected over the period from 1999 to 2014, I find that in the year prior to their employment by covered firms, these analysts issued higher target prices and more optimistic recommendations for their would-be employing firms relative to other analysts covering these firms. This relative optimism is much higher in the year prior to their move than in previous years, indicating a marked change in the revolving-door analysts’ behavior just prior to being hired. During this same period, relative to other analysts, revolving-door analysts become more pessimistic about other firm’s prospects, underscoring just how positively they view the companies that eventually hire them.

 Read more

Further reading

Elsewhere on Wednesday,

- “A tender offer is still how you signal that you’re serious about your hostile bid. Even though doing a hostile tender offer is impossible, and has been for 30 years.”

- Japan might have to choose which “credibility” it’s willing to lose.

- Reality might topple a beloved economic theory.

- The overeager adoption of big data is likely to result in catastrophes of analysis…  Read more

FirstFT, the email briefing formerly known as the 6am Cut

This is FirstFT, the FT’s new email briefing written by Amie Tsang in Hong Kong which is replacing the Lunch Wrap and the Cut. All Cut subscribers should have found it in their inboxes for the first time today. If that didn’t happen for any reason do please email firstft@ft.com or alphaville@ft.com.

If anyone reading this is not yet subscribed do please click here.

FirstFT: Read more

The Closer, final edition

To our readers, thanks so much for subscribing to The Closer. This is the final daily email from FT Alphaville, but you can continue receiving expertly curated missives from the Financial Times via First FT. We encourage you to have a look and subscribe. Thanks again!

FURTHER FURTHER READING Read more

Markets Live: Tuesday, 4th November, 2014

Live markets commentary from FT.com 

The (early) Lunch Wrap

Good morning New York, this may well be the last Lunch Wrap you’ll receive as from tomorrow, tech mishaps notwithstanding, the new FirstFT email will be ushered in to replace the LW and the Cut. All queries, thanks, tears should be directed to First’s writer Amie Tsang in Hong Kong at amie.tsang@ft.com or alphaville@ft.com. Read more