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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

Corona Tools 4 

3 days ago

The fourth in our series looking at the people who are really standing out from the crowd during this crisis for their utter, unadulterated toolishness. Just $1,000 an hour for advice on survivalism and building up a food supply:
Just a guy with a home trading set-up, an Elon Musk poster, wads of cash and some sheepskin Gucci slippers:
Just a former war reporter dying on a hill, trademarking alliterations:
Just a VC who is f*cking Covid-19:
Just a man with solutions, but no ££££:
Just an idea for something to tip us all over the edge:
Oh just bog off.
Related links:Elon Musk promised ventilators. These are BPAP machines. – FT Alphaville

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Markets Now – Friday 3rd April 2020

3 days ago

It was Friedrich Nietzsche who wrote, “Well the years start coming and they don’t stop coming”, probably. We’ll check later. In the meantime we can but note that it’s a Friday, apparently, which amid the ceaseless tide of red numbers and constricted circumstances means we can at least look forward to two days of looking at fewer red numbers. Here’s what midsession looks like:
Pearson, then, and Morgan Stanley’s put a pin in all that distance-learning hype that had put a floor under the stock in recent weeks. People still need to go places, MoSt says under the headline, “Financially sound, structurally challenged and valuation not attractive”:Disruption to Global Assessment: In its new divisional breakdown, Global Assessment is Pearson’s largest 2019 EBITA contributor at 36% of the

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Further reading

4 days ago

Elsewhere on Friday, — What’s the deal with the toilet paper shortage? An essay.– What’s the deal with Andrew Cuomo’s nipples? An investigation..– Desperate times call for 15x more expensive medical equipment.– Hungary on… Hungary?– The EU needs a pandemic-fighting authority.– Life on lockdown in Berlin.– Arron Banks’ big tax bill.– This isn’t just a pay rise. This is an M&S pay rise.– Tips from someone with over 50 years’ social distancing experience.– “He’s not smart, or articulate”.– 5G sanctions.

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Markets Now – Thursday 2nd April 2020

5 days ago

The Samuel family, founder of the UK side of what became Royal Dutch Shell, was extremely literal. Shell Transport and Trading was so-called because it transported and traded shells. A pivot to oil happened after operations passed from curio shopkeeper Marcus Samuel to his sons, the unimaginatively named Marcus Samuel and Samuel Samuel. An incorporation document from 1900 available on Companies House has Shell wrapped in quotation marks to emphasise that its main business was no longer actual shells. The quote marks remained in its legal name until 2005, when “Shell” Transport & Trading merged with Koninklijke Nederlandse Petroleum. There’s no reason for you be interested in any of this but the fact that big oil’s following Brent higher this morning provides the excuse for a drop intro.

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Coronavirus as the ESG acid test

5 days ago

Remember the acronym ESG? The phrase sets off a distant chime in our consciousness, a resonance that recalls a happier time. A time where we all truly believed that the news cycle couldn’t get any crazier.How wrong we were. But ESG – or environmental, social and governance to its friends – hasn’t gone away. Not by any stretch of the imagination. When the dust settles from the coronavirus pandemic, the practice of investing in companies that conform to various ESG standards, whether it be to do with carbon emissions or workplace diversity, will be still a growing force in capital markets.If anything, the coronavirus pandemic presents an opportunity for those investors with ESG mandates to truly flex their muscles when they meet management teams ahead of a capital allocation decision.

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Elon Musk promised ventilators. These are BPAP machines.

5 days ago

Some of you might have noticed that we recently started a series called Corona Tools, in honour of those who are really standing out from the crowd during this crisis. But we needn’t have bothered, really. Because one man is fast emerging from this virus as the Corona Super Tool, leaving all the others in the (space) dust. Ladies and gentlemen, Mr Elon Musk. 
(Kids are absolutely not immune. But despite Twitter pledging to remove misinformation from its site, citing for example claims about child immunity, Musk’s tweet remains online.)
After playing down the virus since January, our Elon suddenly last week seemed like maybe he had taken a Trump-style turn, and had decided that maybe Covid-19 was something that needed to be taken seriously after all. Though he earlier said he would

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Why the real economy needs a prudential authority too

5 days ago

© AFP via Getty Images The global financial crisis taught us that laissez-faire finance, when left to its own devices, tends to encourage extreme fragility by under capitalising the system for efficiency’s sake and making it far more systemically complex and interdependent.Pre-2008, banks operated on the thinnest of capital layers while taking extreme liquidity risk …

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Further reading 

5 days ago

Elsewhere on Thursday, — How China concealed the extent of the outbreak.– While Europe “sleepwalked” into its outbreak.– Another Epstein destroys himself.– A coronavirus test that passes the smell test?– Organised crime in the time of corona.– Elon’s extremely dangerous game.– Shut down the ratings agencies.– Record companies aren’t safe. (Unlike the rest of us?)– No, really, the world’s not ending.– China is stuck in second gear. — Should we enforce rainy-day saving?– Fox’s fake news contagion.

Copyright

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Will big tobacco save us from the coronavirus? 

5 days ago

Before today, searching Google for “coronavirus” and “bats” mostly delivered epidemiological research papers and some pretty grim looking soup. Now, however, there’s also this:
Mindful that it’s April 1 we emailed BAT’s flacks (that’s £65bn British American Tobacco), who assured that it’s “100 per cent legitimate”. So fair enough, here’s the press release:BAT’s US bio-tech subsidiary, Kentucky BioProcessing (KBP), is developing a potential vaccine for COVID-19 and is now in pre-clinical testing. If testing goes well, BAT is hopeful that, with the right partners and support from government agencies, between 1 and 3 million doses of the vaccine could be manufactured per week, beginning in June.OK, let’s pause there. No vaccines for coronaviruses have been developed in the 70 or so years

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Why an Anfield bakery thinks they can emerge stronger

5 days ago

It is a Saturday afternoon outside Anfield, home to Premier League leaders Liverpool. The place is deserted besides what looks like a dad saving shots from his two young sons in the shadow of the famous Kop stand. With the League banning all fixtures until at least the end of April, it will remain like this for a while yet. During that time, the club would’ve played three home games and probably clinched their first championship for 30 years – a boon to the small businesses that surround this mostly residential area north of the city centre. It’s far from certain that the fixture list for this season will be completed. If it isn’t, or games are hosted in empty stadia, then the hit of the Coronavirus pandemic on football tourism in Liverpool is going to be immense. Awaydays to Anfield and

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Corona Tools 3

10 days ago

Read the room people (since deleted):
As expected:
Since deleted, part deux:
Shilling never sleeps:
True sacrifice:
The perfect tweet:
VCs, saving the planet one tweet at a time:

Corona Tools 2
Corona Tools 

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Let’s flatten the coronavirus confusion curve

10 days ago

A wave of confusion and misinformation spread rapidly across the internet on Thursday, like . . . a virus. But you can always count on Alphaville to flatten the confusion curve; to squash the stupefaction sombrero, if you will. So here we are. There are currently a few strands of befuddlement, all of which we will attempt to address here. Loosely they are as follows:That the lead author of the influential Imperial College report on strategies to slow the spread of coronavirus, Neil Ferguson, had drastically revised his models, and had even “admitted he was wrong”.That the reason for this revision was that he had now realised that the number of people infected was actually far higher than he had initially thought. (The reason this link was made by some people was because of another study,

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Markets Now – Friday 27th March 2020

10 days ago

Today we’re testing positive for MIFID II violations. What follows is little more than a comprehensive bundling of sellside research. We’re defaulting to this approach because it’s another day of flow-driven trading where the on-the-tape news varies between nearly irrelevant and totally irrelevant. If you really need to see what’s going on in markets, it’s this: 
Berenberg has spent the week publishing huge sector-by-sector breakdowns of Covid-19 exposures as a kind of roman-fleuve of dismality. Today there’s a selection of 15 reports to pick through, including one on mid-cap leisure (81 pages!) that does the necessary on Cineworld and Restaurant Group:• Our UK mid-cap leisure coverage is in the eye of the current storm. Precisely what happens next is unknown. But having spoken to

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How bad could the US jobs market become? 

10 days ago

© AFP via Getty Images It’s impossible to overstate how awful yesterday’s figures for last week’s initial jobless claims in the US were. For reference, they made the weekly claims that occurred during the global financial crisis pale into insignificance, a mere blip: While the scale surprised many people, we knew we would be in …

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Further reading

11 days ago

Elsewhere on Friday:– The derivatives market as the Achilles’ Heel of Fed intervention. – A slice of Lime ($, The Information). – The economic lessons from pandemics. – The OECD’s call for a global Marshall Plan. – The IMF’s policy tracker. – Apple offers 90-day trial for video and music editing software. – Abandoned video game worlds. 

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The coming video game renaissance

11 days ago

© REUTERS For as far back as this Alphavillain can remember, video games have not felt like they have been “cool”. But they’ve always been popular.Those who openly admitted to playing them were shunned at school by those who played them in secret, and even though many claim to have grown out of the practice …

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What central banks giveth they taketh away with margin calls

11 days ago

© REUTERS Daniela Gabor is a professor of economics and macrofinance at the University of West of England, Bristol. In this post, focusing on the ECB example, she explains why now might be a good time for central banks to abandon many of their market-discipline focused measures like margin calls and haircuts.The Corona crisis reminds us …

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More on that oil storage problem

11 days ago

© Bloomberg We warned last week that oil has a storage problem, which could translate to permanent production capacity shutdowns.On Thursday, Goldman’s commodities research team, headed by Damien Courvalin, offered some further insight into the issue and the inflationary pressures that are likely to come about as a result.Here are the key pars from their …

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What makes this global dollar crunch different?

11 days ago

© AP Few are better equipped to write about the current dangers of the dollar’s dominance of global finance than Wenxin Du. An associate professor of finance at the University of Chicago Booth School of Business, Wenxin was looking into financial market frictions in global dollar funding markets before the spread of the coronavirus laid bare …

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Markets Now – Thursday 26th March 2020

11 days ago

12:00pm GMT – Here’s a story! Billionaire investor Bill Ackman has cashed in $2.6bn from bets that companies would struggle to pay their debts, less than a week after warning the American people that “hell is coming” as a result of coronavirus. The founder of Pershing Square told investors on Wednesday that he was ploughing the winnings into the equity market, saying he believed the US government was “all-in” to mitigate the damage the virus has inflicted on the economy. Pershing Square disclosed this month that it had paid $27m for credit protection on investment grade and high-yield bonds to add to existing positions at “deeply discounted prices”.In an emotional interview with CNBC last week, Mr Ackman said he became increasingly bearish in January after waking up from a nightmare about

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US jobless claims soar to 3.3m

11 days ago

© AP Want to know why Congress was in such a rush to pass the $2tn stimulus bill? One reason was the latest figure for US jobless claims was due today. It’s just out and it’s an absolute stinker. Via @Birdyword:  So almost 3.3m new claimants for unemployment benefits in the last week alone. That makes the …

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When central banks take over securities markets

12 days ago

© AFP via Getty Images There are only a handful of global experts on how eurodollar markets, dollar swaps, shadow banks and money market funds interact with central banks. International monetary and economic expert Robert McCauley, a senior research associate at the Global History of Capitalism project, is one of them. He’s sent us a useful …

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From coronavirus crisis to sovereign debt crisis

12 days ago

© AP In this guest post, Lee Buchheit, professor at the University of Edinburgh’s Law School and a former senior partner at Cleary Gottlieb, and Sean Hagan, a visiting professor at Georgetown University’s Law Center, and the former general counsel at the IMF, urge bondholders to consider debt forbearance for emerging market countries with precarious …

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Further reading 

12 days ago

Elsewhere on Thursday, — Dogpiling.– Mass home testing?– How did we ever get to the roaring twenties?– A lucrative hedge.– Coronabonds.– The virus of profiteers and con artists.– Bankruptcy for dummies.– Walmart and opioids.– The chaos inside New York’s hospitals.– How the pandemic will end.– Saint Corona, patron of epidemics.

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That SoftBank statement

12 days ago

© AFP via Getty Images The discourse, don’t you love it?On news this Wednesday morning that rating agency Moody’s had downgraded SoftBank deeper into junk territory after it decided to shed $41bn of prized assets, the Japanese tech conglomerate put out this statement.Toys. Pram.Moody’s describes concerns regarding SBG’s financial policies as the rationale for the ratings …

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Markets Now – Wednesday 25th March 2020

13 days ago

11:30pm GMT – Why’s the market up today? More buyers than sellers. Why was it down before? More sellers than buyers. There’s no point in over-complicating the explanations when we’ve all got enough to worry about. Here’s Barclays:Money market funds saw record inflows in March as risk assets collapsed. Systematic/HF selling is well advanced, but equities remain vulnerable to LO/Retail capitulation and are losing the bid from buybacks amid a worsening earnings and macro outlook. Continued caution is thus warranted but month-end pension funds’ rebalancing following the extreme equity/bond underperformance in Q1, along with decisive central banks’ action,could provide a near-term backstop to the markets and reduce volatility.Cash is king. As the COVID-19 crisis worsened, investors shifted a

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The share buyback red herring

13 days ago

In the rush to stop many of America’s largest businesses in the travel, aerospace and entertainment sectors from going bust during the coronavirus crisis, many commentators have pointed out that a few short months ago, these same companies were buying back their stock hand over fist.The latest example is a CNN article Tuesday:Corporate America, armed with the Trump tax cuts, lavished Wall Street with a multi-trillion dollar share buyback spree over the past two years.Now, some of the same companies that binged on buybacks are in line to receive taxpayer-funded bailouts to keep them alive. Boeing, for example, spent $11.7 billion over the past two years on repurchasing stock before suspending buybacks in April 2019 because of the 737 Max crisis. The aerospace behemoth is now requesting $60

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The island of Sark goes into lockdown

13 days ago

The tiny island of Sark, in the middle of the English Channel, has closed up shop. After announcing on Sunday that all passenger boats would be suspended, the island’s “Pandemic Emergency Committee” released a statement late on Tuesday saying the island was going into full lockdown:At midnight tonight 24th March all non-essential work must cease unless it can be carried out from home. In the case of emergency work, please contact the Constable in advance.Everybody except essential workers MUST REMAIN AT HOME except for two hours of exercise each day. To minimise the potential spread of the virus DO NOT VISIT OTHER HOUSEHOLDS.The last passenger boat will be tomorrow, Wednesday 25th, after that only cargo boats will operate unless in the case of medical emergencies and essential appointments

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Further reading

13 days ago

Meanwhile on Wednesday…– The comforts of history– Blizzard, winter, or ice age?– In defence of cities– SDRs are not the answer– The Excel centre does its bit– Who was Alexander von Humboldt?– …and places to visit this weekend

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Virgin Galactic: buy the big dipper

13 days ago

© (c) Ig0rzh | Dreamstime.com In times of crisis, the world needs a hero.Step forward Adam Jonas of Morgan Stanley who, while the world descends into perhaps the quickest economic stop since Noah launched his ark, is gazing towards a glorious future away from this decaying planet.Yes, that’s right. A future…….in space. Flown there, of …

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