Wednesday , March 3 2021
Home / FT Alphaville
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

When bitcoin bros* talk money-printing

5 days ago

Our favourite non-self-identifying bitcoin bro, Anthony “Pomp” Pompliano, co-founder of Morgan Creek Digital Assets, seems quite excited this week. Yes, sure, bitcoin might be down 18 per cent since its all-time high above $58,000 on Sunday, but it turns out that bitcoin can — at least to a certain extent — weather bad news about Tether:
So yeah! Remember that? Silly fools trying to argue that Tether, the dollar-pegged stablecoin that is used for most bitcoin trading, is not actually backed by real dollars and is some kind of racket or something. Who would believe such a thing?? Umm . . . 
So yes, that was Pomp back in 2017, getting it . . . right. The New York attorney-general’s almost-two-year probe into the company concluded this week that Tether did not have the

Read More »

Further reading

5 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

Coinbase’s offering docs have just dropped [Update]

6 days ago

Just when you thought you’d seen it all in SEC filings, along comes the Coinbase prospectus. Which is really a direct listing. But who can tell during these days of ICOs and ITOs what a public offering even is.The cryptocurrency platform which aims to “create an open financial system” is planning to go public via a Direct Listing on the Nasdaq in the near future. The docs dropped an hour ago.
While we dig through the paperwork, we thought we’d just share this gem from the “Definitions” page — the section of an IPO prospectus dedicated to those terms erstwhile investors might not have heard of.Won’t you look at that:Hodl: A term used in the crypto community for holding a crypto asset through ups and downs, rather than selling it.There’s also an excellent use case

Read More »

Gamestop: meme-cry

6 days ago

It’s been posited by many great minds who have dabbled in Eastern philosophy that time is cyclical. From historian Oswald Spengler to Hermann Hesse, the German author favoured by wanderlust graduates, the view that the past is due to repeat can be found in a litany of texts over the past few centuries.Also: markets.
At pixel time, Gamestop’s shares are trading at $142 in pre-market, that’s a return of 217 per cent in just over a day.A return of the January Wall Street bets “driven” Gamestonk trade then? Well, maybe. To be honest, we’re not exactly sure what’s going on except that some more people are getting really rather damn rich. Whether it’s the revolutionaries this time, however, remains to be seen.

Read More »

Craig Wright is taking legal action to recover $3.5bn of “stolen bitcoin”

6 days ago

Fresh from our inboxes on Wednesday: Litigation law firm ONTIER LLP has today begun ground-breaking legal proceedings against a number of Bitcoin developers on behalf of Tulip Trading Limited (TTL), a Seychelles company whose primary beneficial owner is Dr Craig Wright. They remind us, as if we needed reminding, that: Dr Wright is the inventor of Bitcoin who set out his vision for the digital currency in his famous White Paper under the pseudonym Satoshi Nakamoto.Mais bien sur! They continue (emphasis ours): The defendants in this action are the developers for BTC, BCH, BCH ABC and BSV. The action will, for the first time, examine the nature and extent of legal duties conferred upon and owed by developers resulting from the control they exercise over their respective

Read More »

Further reading

6 days ago

Elsewhere on Thursday . . . – Dalio on the stock market bubble– Tie the minimum wage to local rent– Why Bitcoin is bad for the planet (video)– Censoring Fox News is a dumb idea– Is there any point in hoping for a normal summer?– New Rave: let’s not forget– Britney was never in control– Japanese city pop’s revival– Song of the day: Loma — Homing

Read More »

Could you be an FT Alphavillain?

7 days ago

Calling all FT Alphaville readers. Do you or someone you know have the makings of an FT Alphaville writer? The role will encapsulate blogging/reporting/opining/tweeting/event-organising/vlogging/meme-creating/groupthink-busting/investigating and new yet-to-be-defined journalistic media and story-telling mechanisms.ThE perfect candidate will have a critical Mind and a nAtural flair for writing. In an ideal worLd they will also be finance, econ and MarkEts obsessed, with a nose for tuning into market trenDs or aberrations that no-one else has spotted yet. Interest in new emeRging sECTors and technologies is desirable. As is a creative mind. Competence with data management is not essential, but Jamie Powell will likely look down on you if you don’t identify with

Read More »

Further reading

7 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

How rampant is spending about to get?

7 days ago

The British government on Monday delved into the detail of its plans to ease economic and social restrictions in the coming months. A day later, we’re seeing anecdotal reports and market movements that signal we’ve become very excited that we’re about to see pent-up demand unleashed. Dropping caseloads and vaccinations permitting, economies are set to reopen soon. When they do, we will undoubtedly see a wave of spending on things like holidays and restaurants. But just how much spending will there be? And how much inflation will it bring with it? It’s worth reading what Bank of England policymaker Gertjan Vlieghe had to say on this topic on Monday. His thinking leads us to the view that it really depends on which side of the Atlantic you are. His arguments focus on the

Read More »

NY attorney lasers Bitcoin’s key funding mechanism

7 days ago

It’s been a volatile and stressful week in cryptoland. First Elon Musk, the electric boss of eccentric car company Tesla (or was it the other way round) and one of bitcoin’s most high-profile supporters, tweeted on Saturday that the cryptocurrency’s price “seems high”. Then, after bitcoin hit a record high of $58,354 on Sunday, US Treasury secretary and former Fed chair Janet Yellen dismissed bitcoin as an “extremely inefficient way of conducting transactions”, as she lamented its staggering energy consumption, a comment that helped bitcoin fall more than 22 per cent from its peak. At pixel time, Bitcoin was trading around $47,500. And then on Tuesday, the New York District Attorney’s office moved to suspend Bitfinex and Tether’s “illegal activity” in the state.The

Read More »

Michael Bolton wants you to break up with your brokerage

8 days ago

It’s hard to know when to call the top in this crazy market isn’t it? But surely, surely, this has to be some kind of indicator:

Yes that’s a new ad featuring Michael Bolton, from Public.com, the stock trading app that, unlike all the other stock trading apps, is “on the mission to open the stock market to everyone by making it inclusive, educational, and fun”. (We think they might have meant “on a mission” but we guess after splashing out on Michael Bolton they didn’t have anything left for a copy-editor.) Its investors and advisors include NFL star JJ Watt, skateboarding legend Tony Hawk, and Will Smith. You might think the choice of a 67-year-old crooner to lure the kids away from Robinhood was a touch surprising, and you wouldn’t necessarily be wrong. But

Read More »

Rishi Sunak’s fishy foray into chat-show hosting

8 days ago

Last week, Rishi Sunak, the Chancellor of the Exchequer, told us via Twitter that he would be “speaking to industry leaders and experts to hear how they’ve reacted to the pandemic” over the coming weeks.
So in terms of the calibre of “industry leaders”, you can see that things started quite well: Dishy Rishi’s first Zoom call was with chef, restauranteur and shouty reality show host Gordon Ramsay. Some, though, particularly those in the restaurant industry, felt the call was out of touch and said it was a “PR stunt”, and pointed out that Ramsay explaining how you can just launch a TV show during lockdown might be a little . . . tone-deaf. You can watch the full interview between the two here if you have a penchant for cringe-TV (you’d be doing the chancellor a

Read More »

This is nuts, this is the electric vehicle crash

8 days ago

It would take a brave man to call a top to the bubble after 11 years of stocks absolutely ripping but, for once, it looks like FT Alphaville might have nailed it.Just over a month ago, we published a live spreadsheet detailing all of the electric vehicle — and related technology — stocks listed on the global equity markets. Without exception, they’d all been ripping in unison —doubling, tripling and quadrupling to the extent that their market capitalisations were completely detached from the underlying financials. What was propelling it wasn’t entirely clear. Perhaps it was the outsized returns of king stonk Tesla, or optimism over government-driven renewable energy capital expenditure, or maybe, it was just good ol’ fashioned “I want to get rich quick” energy.Well, as it

Read More »

Further reading

8 days ago

Elsewhere on Tuesday . . . – The UK’s AstraZeneca edge– Private equity’s nursing home record– Are endowments damaging universities?– A journey in macroeconomic thinking– The fantasy of English freedom– Fuel for the ITER reactor is ready for testing– Gupta is at it again– Congress is under the microscope after the Capitol invasion– Song of the day: Wordcolour — I Waited For You This Morning

Read More »

Further reading

9 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

Why it’s time to lift the trading ban on Venezuela’s debt

12 days ago

Dr. Thomas Laryea is an international law and policy expert at Orrick, Herrington & Sutcliffe. He specialises in advising governments and creditors on international finance. In this post, he argues for reconsideration of the over reliance on sanctions, particularly the ban on secondary trading on Venezuela bonds, as we look towards a comprehensive debt restructuring.The Biden administration has an opportunity to reshape relations with Venezuela, and to lay the groundwork for the restructuring of Venezuela’s $150bn plus in public external debt. For over 15 years, the United States has imposed numerous economic sanctions on the Latin American nation and others have followed suit. The use of sanctions reached its heights under the Trump administration, where they were

Read More »

Further reading

12 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

Facebook: presented without comment

13 days ago

Presented without comment — a quote from a freshly unredacted lawsuit filing against Facebook (with our emphasis):Facebook’s Potential Reach is systematically inflated. For example, in August 2018, Facebook represented to its advertisers that it had a Potential Reach of 230 million adults (i.e. 18 years old or over). According to United States Census data, there are 250 million adults in the U.S., only 68% of which—or 170 million—use Facebook, according to Pew. For 18 to 34-year-olds,Facebook represents to advertisers a Potential Reach of 100 million people. But there are only 76 million 18 to 34-year-olds in the U.S. And Pew found that only 80% of them—or 61 million—use Facebook. After a report was published in the fall of 2017 report (“Report”) alleging that Facebook’s Potential Reach

Read More »

What does institutional bitcoin mean?

13 days ago

Blackrock’s chief investment officer of global fixed income told CNBC on Wednesday that the world’s largest asset manager had “started to dabble” in bitcoin.This was all the excuse bitcoin needed to charge ahead to a new record high of $52,533.
The institutional buzz around bitcoin started when US-listed Microstrategy, a business intelligence company, revealed in August 2020 that the company had invested $250m of its excess cash in bitcoin as a hedge against the dollar. One inadvertent consequence of the treasury management move was that Microstrategy’s shares would soon be considered a precious “listed” proxy for owning bitcoin outright, especially by those money managers bound by strict risk-controlled investing mandates that stop them dabbling in crypto.The

Read More »

Further reading

13 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

The illusion of wage growth could haunt the Fed

14 days ago

It’s been said that it’s the task of academic economists to play the role of the Lear-like fool, telling truth to power and challenging convention. So when two of the most prominent jesters at the court of King Jay begin to warn about inflation, it’s worth paying attention. The two fools in question, Larry Summers and Olivier Blanchard, have warned in recent weeks that the proposed US fiscal stimulus is so large that it could unleash a severe bout of price pressures.Their workings are based around the concept of the output gap — which measures the amount of slack in the economy. The $1.9tn package, Summers says, is so large that it risks overshooting the gap and producing the sort of inflation we haven’t seen in a generation. Others — including Kenneth Rogoff and Paul

Read More »

Further reading

14 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

Overheard in the Long Room: the new commodity supercycles

15 days ago

Remember the commodity supercycle? While the world was getting high on incredibly loose credit between 2000 and 2009, commodity prices went absolutely bonkers. Thanks to a weakening dollar and aggressive Chinese demand, anything tangibly linked to digging things out of the ground seemed to go up, including the currencies of certain commodity-linked emerging market nations. One stat from that era for you: global M&A activity in mining and metals rose from around $10bn in 2002 to just over $150bn in 2007.The past decade, however, has been a different story. Shale, a strong dollar, trade wars and falling Chinese consumption have — among other things — led prices to dip. Yet after the energy fallout from the Covid crisis — expressed most memorably in negative oil prices last

Read More »

Wayfair: what we got wrong

15 days ago

On Sunday, Mario Cibelli, a founder and portfolio manager at US-based investment firm Marathon Equity Partners, posted a Twitter thread on what negative feedback investors might encounter when faced with a scaling, and ultimately successful, consumer business.Reading through it, FT Alphaville had a sudden painful pang as we remembered our articles on $29bn online furniture retailer Wayfair from a few years back. Not just because we ended up being horribly wrong on the stock, but also because the reasons we were wrong were perfectly outlined by Mr Cibelli.
Our argument against Wayfair’s then exuberant valuation were multi-faceted, but can be boiled down to three connected points.First is that the business had struggled to demonstrate that it could control marketing

Read More »

Further reading

15 days ago

Elsewhere on Tuesday . . . – The US vaccine roll out is world-beating– WFH: too much of a good thing– Short sellers: hated for centuries– Anti-vaxxers are manipulating a key government database– BYD: an electric car company becomes a mask maker– Should the Treasury be modelling the end of lockdown?– Westfield owner begins to buckle– The busiest man in journalism– The Steve Jobs of audio– Song of the day: William Doyle — And Everything Changed (But I Feel Alright)

Read More »

Snap AV: IPOs — initially profitless opportunities

16 days ago

Good morning. Having survived the cold snap in tact, FT Alphaville woke from our winter slumber this dreary Monday to find this excellent chart in our inboxes.Now, you might be aware that there’s some particularly speculative stuff going on in the US equity markets at the moment. Whether it’s the ridiculous GameStop saga, the electric vehicle-related mania, or the wider Spac-listed phenomenon, equity exuberance is everywhere.Measuring exuberance, however, is hard. Yet we think this graphic from Ross Yarrow, who is Managing Director of US Equities at Baird, does as good a job as any chart at capturing the general market madness at the moment.Gulp:

© Ross Yarrow, Baird
Note, this chart doesn’t even include 2021’s figures. According to Yarrow, with the

Read More »

The century-old tax that could help pay for the pandemic

16 days ago

Norma Cohen is an Honorary Research Fellow at Queen Mary University of London, and a former FT journalist. Her PhD thesis, on the finance of the First World War, is entitled ‘How Britain Paid for War: Bond Holders in the Great War 1914-1932’. In this post she argues why an Excess Profit Duty, implemented in 1917 to help pay for the war, ought to be reconsidered today.Britain’s indebtedness, relative to output, has risen to levels not seen since wartime. That fact has caused many to draw parallels between battling the Covid-19 pandemic and that of waging war.Some are appropriate. Both the waging of war and the blockage of a highly contagious, deadly illness require supply chain disruptions. These lead to distortions in both the supply of, and demand for, goods and

Read More »

Further reading

16 days ago

Cookies on FT Sites

We use
cookies
for a number of reasons, such as keeping FT Sites reliable and secure,
personalising content and ads, providing social media features and to
analyse how our Sites are used.

Read More »

This Valentine’s, consider the crypto-flower

19 days ago

All this time, we’ve been saying blockchain is a solution looking for a problem. But now, as it turns out, we might have been wrong . . . On Tuesday we appeared on one of these trendy Zoom-panels that everyone seems to be doing these days, to take part in a discussion about blockchain and its implications for financial markets. It was hosted by His Excellency Alexander Fasel, the Swiss ambassador to the Court of St James’s (AKA the UK). As you can imagine, we were giving our usual spiel about how blockchain has yet to prove itself as a “solution” for anything outside of the world of cryptocurrencies; how you never seem to hear about how the literally thousands of blockchain projects that have been splashed across newspaper pages over the past six years or so are doing;

Read More »

Caption competition: the billionaire brothers Asda debt deal

20 days ago

Debt memoranda can often be boring documents. Yet every now and then, FT Alphaville stumbles across one that makes you squint a little closer at the fine print. You may have heard Asda — the UK big box retailer — is currently the subject of what might become the largest British leveraged buyout in over 10 years. The buyers? Two petrol-pump owning brothers from Blackburn named Mohsin and Zuber Issa, and PE shop TDR Capital. The purchase price, in case you’re wondering, is a touch under £7bn. Walmart is the seller.Such a deal requires capital. Gobs of it in fact. Which is why Asda has just raised £2.25bn in five-year senior secured notes, and £500m of six-year senior notes, as part of the £3.7bn in debt financing. The bonds priced at 3.25 per cent and 4 per cent

Read More »