Tuesday , September 22 2020
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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

Chants, rants and wurst: the return of fans to the Bundesliga

1 day ago

© REUTERS It’s midway through the first half and the man next to me, a red-headed chain smoker who has had a few too many, becomes so enraged with a poor refereeing decision that he accidentally kicks the chair in front of him so hard that it goes flying three rows forward. We are at …

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FT Alphaville takes a Tesla out for a spin

1 day ago

On a rather gloomy day just before a rather gloomy six months locked inside, FT Alphaville took a Tesla Model X out for a spin around the windy roads of Box Hill, Surrey.Little did we know then what would happen to Tesla’s share price over the coming months, as it almost halved before proceeding to take-off into the stratosphere. Today, Tesla stands at the most valuable car company in the world by some distance, a lead some expect to extend after the much-hyped “battery day” this coming Tuesday evening.The pandemic also made the original cut of the video out-of-date overnight so last week we sat down and added a new video interview section, added some new charts and re-jigged some of the originrejiggedto make it more relevant for today.Fortunately for us, bar the share price, not much has

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Further reading

1 day ago

Elsewhere on Monday: – All at sea: on the shipping crisis. (BBG, $)– Was Boris in Perugia? – Should founders be allowed to lie? – Nathan Tankus on Powell’s presser. – Adam Tooze on the vaccine race. – Libor’s vanishing: a guide.– The strange story of Tony Abbott and an Instagram hack. – On herd immunity.

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Distorted jobs numbers are misguiding stimulus policy

4 days ago

© AP This is a guest post by Leo Hindery, Jr, a member of the Council on Foreign Relations and formerly CEO of AT&T Broadband and its predecessor, Tele-Communications, Inc. (TCI). He is currently Chairman and CEO of Trine Acquisition Corp., a NYSE-listed company which he founded. The way the Bureau of Labor Statistics calculates …

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Why China’s recovery is not what it seems

4 days ago

© EPA This is a guest post by Michael Pettis, a finance professor at Peking University and a senior fellow at the Carnegie-Tsinghua Center. His new book ‘Trade Wars are Class Wars’ was co-authored with former FT Alphavillain Matt Klein and is available at all good book stores.On Tuesday, China’s National Bureau of Statistics released …

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4imprint: branded tat on sale

4 days ago

© REUTERS Small-cap investors, it’s often said, are a glutton for punishment. Academic literature has proven the returns to those who fish for market minnows are, over long periods of time, better off than their whale-hunting counterparts. But that’s assuming, of course, one has the fortitude for an activity in which 20 per cent drawdowns …

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Further reading

5 days ago

Elsewhere on Friday: – A tribute to David Graeber. – INET interviews Claudia Sahm. – The Economist interviews David Cameron. – Another official quits the NY Fed. (WSJ, $)– BBG on Facebook and Trump. ($) – How can Spurs afford Bale. (The Athletic, $)– How Klarna works. – Vice debunks $100k Uber myth.

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Further reading

5 days ago

Elsewhere on Thursday, — Germany, still divided.– Medicine, still not perfect.– Rosalind Franklin, still relevant.– Birds, falling out of the sky.– America, dealing with protesters with “heat-ray” devices.– Trump’s promise to revive coal, thwarted.– Oracle’s TikTok bid, a security concern.– Britain’s reputation, trashed.– Britain’s world-beating Covid testing system, stumbling.– Brazil, where conspiracy reigns.– Skills, specific to firms.– Boris, desperate.

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Down goes TT Electronics, Covid test-maker and friend of Bigfoot

6 days ago

© AP If you need a bit of entertainment to get you through hump day, might we recommend a story out today over on the main site by this Alphavillain and the FT’s excellent Anna Gross. It’s a strange tale about an obscure four-person start-up called iAbra based in a sleepy English village that reckons …

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Further reading

6 days ago

Elsewhere on Wednesday,– About JK Rowling’s latest novel.– Crunch time for central banks.– Pandemic health communications and governments. — There’s a potential genocide in the making in Ethiopia because of hate speech. — Germany’s economy is sicker than you think. — Hindenburg research doesn’t like Nikola’s response. — Is anonymous making a comeback? — How much more can Netflix grow? — Is shared financial supervision a better model?

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SnapAV: 12 years in the red

6 days ago

By all accounts, the dotcom boom was a painful experience for all. The sceptics, such as Tiger Management’s Julian Robertson, were put out of business by their reluctance to partake in the mania. The bulls meanwhile, lost their shirts as the Nasdaq collapsed 70 per cent between March and December 2000.All in all, it was a pretty nasty experience no matter what side of the trade you were on. (Bar perhaps, if you were a value investor who was long a tech stock by mistake.)Which brings us neatly to today, and the question of whether we are reaching a similar peak in technology mania. A new report from Bernstein’s Toni Sacconaghi has taken a look at the Nasdaq and has concluded: “sort of”.We’re not going to go into all of the particulars here, but we thought one chart was worth sharing with

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In defence of the IPO

7 days ago

© Ingram Pinn/Financial Times Jeremy Abelson is the founder and portfolio manager of Irving Investors, a growth-orientated fund with both public and private investments. In light of the Snowflake, JFrog, Unity and Sumologic modified IPOs this week, he argues in this post that the IPO, despite a sleuth of companies going public via direct listing or …

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Further reading

8 days ago

Elsewhere on Tuesday . . . – Will the Hipgnosis, the gigantic music royalty fund, succeed?– Dirty money is a threat– The coordinated risk of uncoordinated market participants– The rule of 6’s mingling problem– LVMH always wins– Cross-border claims in Q1– How much is Amazon worth to you?

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Nikola/Hindenburg: gravitational spin

8 days ago

© REUTERS In a year of remarkable market stories, one of the most remarkable emerged last Thursday when short selling research firm Hindenburg took aim at $13bn electric vehicle bubble stock, and recent GM partner, Nikola.Nikola’s shares plummeted, prompting the company’s paper-billionaire founder and private jet enthusiast Trevor Milton to promise a full rebuttal of …

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Further reading

9 days ago

Elsewhere on Monday, — Russian Elites’ Connections to Bulgaria’s Largest ‘Crime Group’.– The inside story of Labour under Corbyn.– Bloomberg spends big on Biden.– The Hayek question.– When women lead protest movements.– The joy of statistics.– The scale of the coronavirus test shortage.– Stop crying foul over fascism.– How construction workers in Ohio view the election.– Cancelling David Hume.– And Kipling.

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Wirecard: the movie

11 days ago

Like FT Alphaville, you probably can’t get enough of the Wirecard story. You know the one, it started with some enquiring stories on these hallowed pink pixels five years ago, and ended up becoming the largest corporate scandal in Germany since World War II.That means, of course, there will be a movie. There has to be. Probably featuring tense sequences weaving through Mayfair back alleys, Libyan militia and two Filipino men grooming a small white dog.So while we wait a few long years for that, and keep our fingers crossed that some of the minor characters (read: FT Alphaville team members) get favourable casting, we’ve got the next best thing for you.On Thursday evening FT Due Diligence’s Arash Massoudi hosted a 90-minute interview with the team that brought the world the Wirecard story,

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Alphavid: The airline sector is in denial about its imminent collapse

11 days ago

© REUTERS Hubert Horan is an independent aviation and transport consultant with more than 40 years’ worth of experience in the sector. He came to prominence as an early but prescient critic of Uber’s business model, arguing it would be impossible for the ride-hailing juggernaut to ever recoup the billions of dollars of losses it …

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Further reading

12 days ago

Elsewhere on Friday: – An astronaut returns to a pandemic-ridden planet. – German Covid mortality rates are declining for all age groups. Here’s why. – The most surveilled cities. – Blackberry’s comeback. (Wired, $)– Why the California sky turned orange. – Rough trade. (The Economist, $)– The spice flows.– Diana Rigg remembered.

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Stanley Druckenmiller is a trading genius, and that’s why we should stop listening to him

12 days ago

Druck & Soros: the men who broke the BoE. © Reuters
In mid-1999, Stanley Druckenmiller found himself in a bind. Soros’s number two at the Hungarian’s famous Quantum Fund believed the US stock market was in full-on bubble territory. Naturally, he was short tech to the tune of $200m. Druckenmiller was right; valuations were silly. The problem was, however, that the market kept going up. By May, the fund was down 18 per cent for the year.So instead of blaming the Fed, his luck or retail traders, Druckenmiller did what any good trader does and decided to stop fighting the tape. The Quantum Fund reversed course and went neck-deep long tech, finishing the year up 35 per cent.Retold by Michael Batnick in his excellent book Big Mistakes, this tale provides a key insight into the trading

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Markets Now – Thursday 10th September

12 days ago

It’s a day of everything and nothing. Stock benchmarks are going nowhere in particular, the ECB’s consistently haphazard messaging has lifted the euro a bit, and the corporate news is hard to group into any overarching theme other than to say “mostly retail”. At a scoreboard level it all looks like this:
We can always rely on The Hut Group to give us an angle into the session, however. The Manchester-based whey powder, mascara and websites conglomerate today set out terms for its flotaton on LSE’s sub-prime segment. It’ll be raising £920m as previously flagged so the only real news is that KKR will be slotting up to £950m at 500p a share at the first opportunity, which’d give THG a market value of £5.4bn and a free float of about 35 per cent. As discussed at length in previous sessions,

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Why Libor’s demise threatens small businesses most

12 days ago

© Mirrorpix/Getty In death as in life, Libor’s demise is seldom discussed without mentioning that the rate underpins contracts worth hundreds of trillions of dollars. Yet, as efforts to ditch the interest rate benchmark intensify, are we missing out on where the true difficulties in dumping Libor lie?We think most of what those in the …

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Further reading

13 days ago

Elsewhere on Thursday, — The pandemic is an intuition nightmare. — The lifts in your high-rise office are a Covid nightmare.– Bob Woodward’s new book is a Trump nightmare. — A dog-eye-crust-removal comb.– Berkshire invests in Snowflake.– The rise in Covid cases is not all it seems.– A bridge too far.– Pushing voter fraud fears into the mainstream.– Where do profits come from?– Brits and basic rights.– Two men and a Boris.

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Uber goes green

13 days ago

Good news everyone!Uber is committing to become a fully zero-emission platform by 2040, with 100 per cent of rides taking place in zero-emission vehicles, on public transit, or with micromobility. We’re also setting an earlier goal to have 100% of rides take place in electric vehicles (EVs) in US, Canadian, and European cities by 2030. In fact, we believe we can achieve this 2030 goal in any major city where we can work with local stakeholders to implement policies that ensure a fair transition to EVs for drivers. In addition to our platform goals, we’re also committed to reaching net-zero emissions from our corporate operations by 2030. All told, hitting these goals would put us a decade ahead of Paris Climate Agreement targets.The $60bn labour law arbitrage business aims to do this by

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Markets Now – Wednesday 9th September

13 days ago

Turning and turning in the widening gyre, the FTSE 100’s up nearly 1 per cent. The best lack all conviction, while the worst are full of passionate intensity, and you’ll be hearing from them both over the next 5,000 or thereabouts words. Scoreboards to begin:
AstraZeneca caused some lively headlines overnight with news that it’s paused recruitment for its Covid-19 vaccine trial after a single adverse event. Shares went 8 per cent down in the reliably skittish US aftermarket but have since recovered as qualified people said this kind of thing happens all the time. The bigger question relates to whether anyone should be investing in AZN on the expectation that its Covid vaccine candidate will do a Maradona run all the way to FDA approval, not least because there’s probably negligible

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Further reading

13 days ago

Elsewhere on Wednesday,– Banks are toast but crypto has lost its soul.–This article was written entirely by a robot, (though perhaps it would have been more useful to ask the robot to convince us why AI has not come in peace).– More mistruths in headlines.– Why we should all be concerned by how Piers Corbyn has been singled out.– A deep dive on Uber’s path to profitability.– Disney’s Mulan is courting controversy.– The weaponisation of one-star Amazon reviews.– Is the Nasdaq whale theory viable?

Copyright The

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How programmable digital assets may change monetary policy

18 days ago

© Bloomberg This is a guest post by Manmohan Singh, author of “Collateral and Financial Plumbing” and a senior economist at the IMF, and Caitlin Long, an appointee to Wyoming’s Select Committee on Blockchain and CEO of Avanti Financial Group. The views expressed herein are those of the authors and should not be attributed to the …

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This is nuts, when does Tomra crash?

18 days ago

© Tomra Systems By the close of play on Wednesday evening the shares of Tomra Systems, a €5.7bn Norwegian recycling and optical sorting company, hovered just below its all-time-high at 403 krone.It crowned a remarkable 5-year bull run for the Nordic business, during which Tomra’s shares have appreciated 460 per cent versus the steady eddy …

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Further reading

19 days ago

Elsewhere on Friday: – Confronting QAnon. – Is Tesla the next Wirecard? (auf Deutsch)– Russian political adviser pens poem about cocaine. – Zug says taxes can be paid in cryptocurrencies. – Fauci on October vaccine: unlikely, but possible. – On central bankers and labour markets. – A battery-free Game Boy.– Cop courtesy cards.

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Markets Now – Thursday 3rd September

19 days ago

The worst kind of famous is Twitter famous: it’s like winning a shouting competition where the prize is more shouting. Sympathy then for the marketing department at Reckitt Benckiser, whose shares are down 2.3 per cent at pixel amid a somewhat mixed response to its new Dettol poster campaign:
In truth, Reckitt’s share price move is probably less to do with its zeitgeist wipeout and more because its newish CFO Jeff Carr hosted a Zoom call with sellside on Wednesday. There were attempts at optimism but the main upshot was that Reckitt’s in remission having been run far too hot by previous management. Investors should know that already, of course, but reality might have been overshadowed in recent weeks by our enthusiasm for bleach. Here’s RBC:‘A couple of good quarters as a consequence

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The Fed abandons the idea low unemployment stokes inflation

19 days ago

© AP From the June 2017 edition of The Economist: That central banks cannot endlessly reduce unemployment without sparking inflation is economic gospel. It follows from “a substantial body of theory, informed by considerable historical evidence”, according to Janet Yellen, chair of the Federal Reserve. Her conviction explains why, on June 14th, the Fed raised …

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