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FT Alphaville

FT Alphaville

FT Alphaville is a free daily news and commentary service giving finance professionals the information they need, when they need it. In a world where market professionals are inundated with information there is a pressing need to edit and filter, and hopefully sow a few ideas along the way. That’s where the FT Alphaville team comes in.

Articles by FT Alphaville

Further reading

3 days ago

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Solutions 30: suspended in animation

3 days ago

At the crack of dawn on Monday morning, FT Alphaville stared in disbelief at what had just crossed the French wires.Solutions 30, a €1.1bn Luxembourger man-in-a-van telecoms and energy outsourcer listed in France, had asked Euronext Paris to suspend its shares “until further communication is released”. Four trading days later, the equity remains frozen at €10.38.So what on earth is going on?Well, as you might recall from our coverage in December and what’s happened since, the outsourcer, which counts European corporate heavyweights such as EDF, Orange and Unitymedia among its customers, has suffered a torrid six months. On December 9, news of an anonymous short-seller report on the company hit the French press. Two days later, the shares were temporarily suspended after

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Tether says its reserves are  backed by cash to the tune of . . .  2.9%

3 days ago

Sooooo remember Tether? The last time we wrote about the “dollar-backed” stablecoin around these parts was back in February, after the New York District Attorney’s office decided to suspend the company — and sister crypto exchange Bitfinex — and fined them $18.5m in a settlement because of their “illegal activities” in the state. That was, you might recall, on the basis that the companies had deceived the market by overstating their reserves, and by covering up approximately $850m in losses. You might have thought all this would have some kind of negative impact on Tether — which is pegged to the dollar — or even the wider crypto market, given how much crypto trading is done via Tether. But no, don’t be silly this is CREEPTO!! Since the settlement in February, when Tether

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Elon’s Damascene moment crashes bitcoin

4 days ago

Tesla’s Technoking had a Damascene moment overnight, via Twitter:
FT Alphaville isn’t sure why it took this long for one of the world’s geniuses to figure out what everyone already knew about Bitcoin’s carbon footprint, but there you go.Bitcoin dropped as much as 14 per cent on the back of the tweet, falling below $47,000, though it has since recovered some of that to trade down a tenth or so on the day now, to $50,755.The Hodlers aren’t happy. Davey Day Trader, aka retail guru and Barstool Sports founder Dave Portnoy, accused Musk shortly after of “pulling levels like the Wizard of Oz on crypto . . . he’s sending dogecoin up, he’s sending Bitcoin down”, before concluding, “this is bullshit”. Similarly, r/Bitcoin is up in arms, with some diamond-handed traders

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Further reading

4 days ago

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US inflation comes in far higher than expectations

5 days ago

Updated with comments from Federal Reserve vice chair Richard Clarida.*Woof:The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 per cent in April on a seasonally adjusted basis after rising 0.6 per cent in March, the US. Bureau of Labor Statistics reported today. Over the past 12 months, the all items index increased 4.2 per cent before seasonal adjustment. This is the largest 12-month increase since a 4.9-per cent increase for the period ending September 2008.Yep, the US printed a 4.2 per cent year-on-year rise CPI in April and up from 2.6 per cent in March. The core measure, which strips out changes in food and energy prices, is worth noting too — it’s seen as a better gauge of underlying price pressures. Headline inflation was expected to hit 3.6 per

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Further reading

5 days ago

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No, ‘hyperinflation’ is not here

6 days ago

There’s a lot of concern out there about inflation right now. Including, unsurprisingly, here in Germany. And where not just talking about the Bund yield. This is this morning’s hot take from state broadcaster ZDF:
For non-German speakers, the headline reads ‘Fear of hyperinflation’. The article is not entirely unreasonable, focusing on the pressures we’ve seen build up in producer prices over the course of the pandemic. As markets this morning are all too aware ahead of an important US print Wednesday, we are likely to see broader consumer price inflation surge in the coming months.We’re betting that it’ll be a temporary blip. Round about this time last year, the West Texas Intermediate oil contract went sub zero. Twelve months on, we were always likely to see some dramatic

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This is nuts, this is the trash crash

6 days ago

To say we’ve been banging this drum for years is an understatement, but what’s going on in equity markets at the moment is truly nuts.Following a start to year when stupid was at the steering wheel of stocks — whether it be the GameStop faux-revolution, Spac Jesus Chamath Palihapitiya framing himself as the next Warren Buffett, or any number of unproven electric vehicle companies coming to market and then exploding higher on no news — the trash trade seemed to have spun out of control.After a pause in April, following February and March’s aggressive sell-off, the trash crash is back with a vengeance.On Monday, the tape looked like the elevator scene in The Shining. The Nasdaq was down 2.55 per cent, with the FANG+ index — which includes Tesla, Alibaba and Baidu alongside

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Further reading

6 days ago

Elsewhere on Tuesday . . . – Voter suppression in the UK?– WFH productivity: not a done deal– China’s secret villages– Yellen and screamin’ [podcast]– Bonus hoax at train company– Fixing music streaming– Goldman’s Dogecoin millionaire– Autpilot: a child’s view– The great online game– Song of the day: Forest Drive West – Dualism

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Dogecoin/Musk: Saturday Night dive

7 days ago

It’s hard to know where to start with this one.On Saturday evening, Elon Musk hosted the iconic American sketch show Saturday Night Live. While for some, it was an opportunity to witness Elon’s infamous mumbling on primetime American television, for a subset of cryptocurrency investors, it was all about one thing: Dogecoin.The infamous joke coin had rocketed 111 per cent last week on expectations meme lord Musk would pump it on television, perhaps bringing a fresh wave of dumbfounded speculators to juice the price further.But, in perhaps the clearest expression of “buy the rumour, sell the news” we’ve ever seen in financial markets (and we use “markets” liberally here), Dogecoin crashed over a third during the show. At pixel time, it’s down 27 per cent from its Saturday

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Further reading

7 days ago

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The jobs report no one saw coming

10 days ago

Friday’s US non-farm payroll numbers came in massively under expectation at 266,000 jobs added versus a projected 1m. The unemployment rate rose to 6.1 per cent versus 6 per cent. And average hourly earnings were up 0.7 per cent month on month versus an expected zero consensus. Since nobody in the analyst community saw the mega miss coming we thought we’d check in with what the latest commentary from our inbox is saying.First it’s over to James Knightley, chief international economist at ING, whose assessment is basically humph:Private payrolls rose just 218k with manufacturing employment actually falling 18k while trade and transport dropped 81k, retail fell 15k and temporary help fell 111k.These falls are all more than a little strange given the strong performance of

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The Fed and Schrödinger’s Phillips curve

10 days ago

Confused about why the Fed is committed to higher inflation despite mixed signs of recovery in the US economy? Good. Edward Price, a former British economic official and current teacher of political economy at New York University’s Center for Global Affairs, explains the paradox at the heart of the US central bank’s new monetary framework.Erwin Schrödinger, a physicist, studied the tiniest of things. And he discovered something bizarre. If observed, the atomic world will change its state. Schrödinger illustrated this idea with an imagined cat. In an irradiated box, and as long as this cat remains unseen, it can remain both dead and alive. Only when the box is opened will its actual fate occur.Which is ludicrous. Schrödinger himself admitted as much. He hoped his thought

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Oh no, now Deloitte with the crypto nonsense

10 days ago

You might remember that back in March, we brought you a round-up of the most incisive insights from the latest piece of “research” on bitcoin by Citigroup. The report included the claim that bitcoin could become “the currency of choice for international trade”, and that more illicit transactions took place using credit cards than using bitcoin (it turned out the banks’ top analysts had mistaken basis points for percentage points). But we are of course not the types to think that one bad crypto apple means the whole bunch is rotten. So as you can imagine, it was with our usual wide-eyed credulity that we opened the latest report on “Corporates using crypto” from Deloitte. Unfortunately, though, our characteristic receptiveness was soured the minute we saw the title and

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Further reading

10 days ago

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The US is inching towards an official term replacement for Libor

11 days ago

As we wrote back in September, one of the thorniest issues in the rose bush that is Libor transition is whether you can find a proper replacement rate that, in market parlance, is “forward looking”. To explain why a forward-looking, or term rate, is desired let’s quickly back up a little for all of you that have had better things to do than watch this sorry saga play out. (For those who have had the misfortune to be directly involved, skip to the cross-head.) Libor is a benchmark that represents an average of what banks think it will cost them to borrow unsecured in money markets. It’s taken over a range of maturities in all the major currencies. In its purest and least corruptible form it measures overnight borrowing costs. But when it’s written into contracts, it’s

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You can now build a “mini media empire” on Substack

11 days ago

Substack, the $650m Andreessen Horowitz-backed newsletter platform that journalists like to moan talk incessantly about on Twitter, is introducing a new feature. And it’s one that could make traditional media outlets quake in their boots even more than they already are. That’s because the feature allows writers and other content-creators to set themselves up on the platform in a way that is . . . rather reminiscent of traditional media outlets.The Silicon Valley-based firm’s new feature is called “Sections”, and it allows writers to set up and manage multiple newsletters or podcasts within one main publication. So while you would subscribe to the publication as a whole, you can select which sections of it you want to be sent to your inbox. We called Substack co-founder

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SnapAV: solar and IPO stocks look sick

11 days ago

Like a pint of lager left in the sun for an hour, the fizz is beginning dissipate from the once-frothy corners of US equity markets. Cast your mind back to the midst of the pandemic, and a few themes dominated the US stock market. There was, of course, the pandemic winners and losers, but separately from those obvious Covid-related plays renewable energy stocks and IPOs also had a spectacular year. The former seemingly on the hope that the Biden administration would splash the cash on green energy infrastructure; the latter because, well, bored retail investors at home could get behind stocks that doubled or tripled on the first day of trading.Yet what go up, must come down.This Thursday morning, the good folk at Bespoke Investment Group sent over these charts, showing

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Further reading

11 days ago

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The tech sell-off and the rise of the inclusive growth trade

12 days ago

Around lunchtime Tuesday at FT Alphaville towers a sell-off took hold of equity markets for no apparent reason. By the middle of the afternoon, the S&P 500 was down 1.6 per cent, and the Nasdaq close to 3 per cent.We weren’t the only ones puzzled as to why. Some speculated that reports a Chinese aircraft had entered Taiwanese airspace triggered the fall, despite this happening 23 times over the past month. Others thought fresh pandemic news from Singapore (new restrictions) and India (the suspension of the Premier League cricket tournament) was wot done it. But, on a relative basis, these headlines again seem minor in the context of a global pandemic.(For those wondering, Treasury Secretary Janet Yellen’s remarks about interest rates came later in the day.)Another theory

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Dogecoin really is man’s best friend

12 days ago

Remember when people used to analyse markets like they were a Really Serious Thing with serious fundamental factors driving them?Remember when they tried to do that for crypto markets too? LOL! But wait, what if LOL was a fundamental factor? “This asset is undervalued in terms of present and estimated future LOLs. We note that The Right Honorable Edgelord Elon Musk is due on a LOL TV show on Saturday night and there is a chance he will make a joke about how he likes to do it Doge-style or something because he is just hilarious. Upgrade: HODL to BUY.”With that in mind, here is Dogecoin’s performance over the past month:
Even better than the fact that Doge has more than doubled in the past week is that its record high on Wednesday was a fraction over . . . $0.69. Elon

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Inflation: temporary scarcity

13 days ago

In Western economies, few have worried about inflation since the 1980s. Indeed, over the past decade the biggest concern among central bankers has been that prices will fall. But some indicators are finally beginning to flash red. A heady mix of Western economies slowly re-opening, supply chain bottlenecks, and aggressive US fiscal and monetary policy could brew together and create what many see as a dangerous cocktail for consumer prices. Over the weekend, we had more data pointing to these concerns being realised as the summer approaches.First off, at capitalism’s very own Glastonbury — the Berkshire Hathaway annual general meeting in Omaha, Nebraska — CEO Warren Buffett remarked on some of the pricing dynamics the insurance and industrial conglomerate has experienced

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Further reading

13 days ago

Elsewhere on Tuesday . . . – Sage of The Simpsons– How the Pentagon started taking UFOs seriously– The Walkers cheese and onion mystery– German goes after the anti lockdown brigade– Intel want subsidies for EU chip plant– The problem with porn addiction– The genomic arms race– Talk about timing– Song of the day: Fulltone — Love in Space

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Bitcoin is making all Revolut’s dreams come true

17 days ago

As we all know, Revolut has set out to become one of the Big Boys of Banking. Earlier this year the London-based fintech, which is gearing up for a fundraising that will reportedly value it at between $10bn and $15bn, applied for a full UK banking licence. It has also hired grandees from the world of banking and traditional finance such as the founder of the firm now known as Abrdn, Martin Gilbert, and former Goldman Sachs vice-chair Michael Sherwood.But somewhat paradoxically, Revolut is also setting out to become one of the Big Boys of Bitcoin. It is not hard to see why — the company has never been profitable on an annual basis, even if it has occasionally on a month-to-month basis. And the only months that this has ever been the case have tended to be moments of crypto

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Further reading

17 days ago

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Is working from home bad for productivity?

18 days ago

Economist Robert Solow once quipped that the computer age could be seen “everywhere but in the productivity statistics.” Solow was talking about the productivity paradox uncovered in the 1980s, when the ramping up of spending on IT failed to show up in the numbers for economic output. A note out today from Deutsche Bank asks whether we’ll see a similar paradox emerge when it comes to working from home. It just so happens to have landed the same day Deutsche announced its own hybrid model, with Bloomberg reporting that the lender would allow remote working for up to three days a week. The blame for the computer productivity paradox came down to four main factors. From the Deutsche note: First, measurement errors; second, computers caused an increase in complexity and

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Further reading

18 days ago

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Tesla and the obscure earnings JPEG

19 days ago

Under the lights of Tesla’s Big Top, you’re never quite sure what sort of show you’re going to get.But luckily for us, ringmaster Elon Musk brought along the whole circus on Monday night. There was the $594m of operating income that was exclusively down to Tesla selling $101m of bitcoin and $518m of pure-profit regulatory credits. And, of course, there was the mumbly conference call in which Musk attacked the media, waffled about Tesla’s autonomous tech, and delayed several of its key catalysts to 2022.Those details, however, have been covered elsewhere by the likes of these pink pages, Bloomberg’s Liam Denning and the WSJ’s Charley Grant. In FT Alphaville’s humble opinion, they’re all worth a read.But there was another oddity less discussed: a weird formatting quirk in

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Further reading

19 days ago

Elsewhere on Wednesday,– The debate over development aid explained. — NBA Top Shot customers can’t get their money out. — Obituary for an internet security saviour. — The thwarting of the reporting on the Caesars Palace collapse. — The case for a merit-based European Football Super League. — Returning to nowhere.– A school discriminates against the vaccinated. — HSBC office footprint to contract. — How Mark Zuckerberg and Tim Cook became foes. — Tesla has an image problem in China. — Robert McCauley chats to David Beckworth about dollar dominance. — Liverpool FC posts some bleak figures. — How the North could save the Union. — The UK is being dragged into a big mafia trial in Italy.

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