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Izabella Kaminska

Izabella Kaminska

Izabella Kaminska joined FT Alphaville in October 2008, which was, perhaps, the best time in the world to become a financial blogger. Before that she worked as a producer at CNBC, a natural gas reporter at Platts and an associate editor of BP’s internal magazine. She has also worked as a reporter on English language business papers in Poland and Azerbaijan and was a Reuters graduate trainee in 2004.

Articles by Izabella Kaminska

A conversation about how public transport really works

January 26, 2018

Jarrett Walker is a public transportation expert and author of the 2011 book Human Transit, which seeks to dispel many of the myths and fallacies misleading debate and investment in public transport across the world. Written before ride-sharing apps became the thing they are today, Walker’s core thesis — that urban geometry must be respected at all stages of public transportation development — still holds true. Worryingly, it’s also the key reality still ignored by those seeking to disrupt the world’s transport systems (supposedly for the better) today.Walker blogs at HumanTransit.org, where he continues the campaign to inform the world about the physical constraints of urban geometry that must be respected if we are to build better systems that don’t just service the urban elite. He also

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Fintech as a gateway for criminal enterprise

January 12, 2018

Fintech comes in many shapes and sizes. One particularly hot area of focus, however, is money transmission and currency exchange.There are three reasons why fintech businesses are greatly attracted to this area. One, the barriers to entry are extremely low. Two, it’s easy to look technologically innovative (by offering seriously reduced prices) when really all you’re doing is undercutting competition and/or spending a lot more on marketing than the competition. Three, there’s a general perception customers are being ripped off in the sector, which makes for a compelling marketing narrative.But there’s more to it than that. As we’ve long argued, a security/access paradox applies to fintech. This is especially the case for “fintech” catering to the money services sector. If the sector is

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Crypto fiat coin confusion

January 12, 2018

A thing that can often be heard said these days is that central banks should tap blockchain technology to launch their own crypto coins.But there are many reasons why such talk is misleading and distracts from the key issues at hand.In its simplest interpretation, talk of crypto fiat issuance is almost certainly a euphemism for something else: the expansion of a central bank’s digital balance sheet to every single person. Yes, really.If, however, central banks really wanted to provide digital access to their balance sheets to every single person they could have done so years ago using existing technologies. Blockchain, whatever flavour it comes in, is entirely unnecessary for accomplishing this objective.In general, as centralised issuers of cash liabilities, there is little need for

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Why blockchain is a belief system

January 11, 2018

In an interview with Fox Business on Tuesday, JP Morgan CEO Jamie Dimon back-pedaled on his September claim that bitcoin is a fraud “worse than tulip bulbs”.He said “he regretted” making the remarks because they dismissed the technology in broad terms, adding “the blockchain is real. You can have crypto yen and dollars and stuff like that.”It’s not clear how much of the U-turn was prompted by the highly personalised hate campaign run against him on social media by crypto promoters. What is worth noting is Dimon’s especially apologetic stance towards “blockchain”, the technology that underpins cryptocurrency and which financial institutions are heavily investing in in a bid to revolutionise settlements.According to Bloomberg, Dimon “believes in blockchain” — a turn of phrase that speaks

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Further reading

January 11, 2018

Elsewhere on Thursday,– Bitcoin conference won’t be accepting bitcoin due to its dysfunctionality as a payments mechanism.– Technology is vulnerable to power cuts. – How the Lady Chatterly trial changed Britain forever. – Remembering all the pseudoscience and quackery Oprah has promoted, before endorsing her for president.– Much of the rise in inequality may be an illusion.– “I made £1k on cryptocurrency in two weeks and I don’t even know what a bitcoin is.”– But there’s a South Korea ban coming on bitcoin trading. – The strange brands in your Instagram feed.– Why diversity in national insolvency regimes is a source of uncertainty about the outcome of liquidation procedures.– How the ECB spawned financial dependency.

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Further reading

January 10, 2018

Elsewhere on Wednesday,– Bitcoin’s scaling solution is intimately connected to lending and credit functions and/or intermediary liquidity pools . The irony.– “…neither the United States nor China is currently up to the job of forging the type of consensus that addresses global challenges and advances the international system writ large.”– The reviewer’s fallacy: when critics aren’t critical enough.– And why Fire and Fury’s shoddy journalism manages to indict both Wolff’s tactics and the whole media ecosystem around him.– How the US stock market is unique.– The data Snapchat doesn’t want you to see.– Money as a generally-accepted medium for short selling. – Pamela Anderson is running a campaign warning about the risks of riding in Ubers. – The tea company that planned to buy bitcoin mining

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Thought for the weekend

January 5, 2018

Oh no! We’re sorry to hear this Mark. Please kindly DM us the email address and postcode on your account, in order for us to look into this further.-AW— Ocado (@Ocado) January 3, 2018

Thought for the weekend — end of year edition
Thought for the weekend
Thought for the weekend
Thought for the weekend
Thought for the weekend

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Crypto cards just suffered a major setback

January 5, 2018

All the crypto fortunes amassed over the last year are good for nothing if they can’t be spent or cashed out for currencies that can actually be spent in the real economy.As David Gerard, author of Attack of the 50-ft blockchain, has been documenting on his blog the last few months, that’s not an easy thing to accomplish in reality. The number of merchants accepting cryptocurrency directly (especially the more exotic flavours) is limited. Platforms specialising in exchange (such as Bitfinex, Coinbase etc) have the annoying habit of limiting withdrawals to small sums and/or suffering processing delays whenever prices move downwards. Also, OTC or local exchange markets are highly illiquid, expensive to navigate or simply untrustworthy and dangerous.This leaves few options for realising the

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The Ripple effect

January 5, 2018

The term XRP or Ripple may have involuntarily entered your consciousness of late.You probably know it’s got something to do with crypto and/or blockchain but unless you’re a diehard crypto obsessive chances are the Ripple phenomenon has passed you by.So here’s a tweet that perfectly sums what you need to know about Ripple and the absurd valuation of its tokens, XRP:“Ripple is highly centralized & XRP is more akin to a PayPal account than a trustless system like bitcoin…. It’s hard to come up w any rational reason why XRP exists in the Ripple protocol, other than as a means for Ripple to make money. Lots of money.“ https://t.co/c52yl5joiG— Laura Shin (@laurashin) January 4, 2018Some other things worth knowing about Ripple.The venture is mired in founder disputes, which are always fun,

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Further reading

January 4, 2018

Elsewhere on Thursday,– Does social media make people less social?– Intel-ageddon.– What could Dollar General tell us about banking?– The mystery of the missing inflation.– The marketisation of education has bigger problems than Toby Young.– The challenges of covering the marketplace for secrets during the war on terror.– The fantasy of “service to your door” in dense cities.– Did the government shift the risk off its books by selling unrated (student loan) bonds very cheaply?– There’s now a fatwa on bitcoin.

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Further reading

January 2, 2018

Elsewhere on Tuesday,– Snapchat’s NYE party was a $4m event.– The decline of cross-border capital flows apparently signals a stronger global financial system.– The 10 best history books of the last 10 years.– Monopolies are worse for workers than consumers.– What mainstream economists get wrong about secular stagnation.– The bear case for Ripple. – Herbalife and Bill Ackman agree on something.– How Germans are taking back sauerkraut.– The biggest tech failures of 2017. – The gambler’s ruin of small cities.– Is history probabilistic?

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The HODL

December 22, 2017

Like any cult, Bitcoin has a ritualised response when it comes to dealing with threats to its existence.Since its biggest existential threat is anything that confirms the view its value may be anything but moon-landing exponential — such as market price corrections or whale-scale liquidations — that ritualised response became the “HODL”.HODL harks back to the dark days of 2013, when the price of bitcoin had a tendency to go down as well as up. In one particular panic-stricken moment, the bitcoin faithful — gathered as usual in their online chat forums — took towards outlining their coping strategies for what in hindsight became known as one of the greatest testing periods of the early adopter faithful.This is where the HODL was born.“I AM HODLING” — wrote one particularly distressed

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Don’t skip from Brexit to Pol-exit without a little history

December 22, 2017

From a distance, it may look like Poland is offering an example of how to Brexit properly. Don’t ask to leave. Antagonise the Commission until you are asked to leave. In that vein, also never miss an opportunity to express passive aggressive sentiment.Yet, if Brexit has taught us nothing, it’s that these issues are never as simple as the headlines suggest.Here’s Poland’s Ministry of Foreign Affairs this week, in response to news the European Commission will launch disciplinary action against Warsaw’s decision to reform its judicial system (our emphasis):It should also be stressed that the Polish government is conducting a dialogue with the European Commission in good faith and upholds previous declarations regarding its readiness to familiarize the representatives of the European

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Further reading

December 22, 2017

Elsewhere on Friday,– Populism is a problem but elitist technocrats aren’t the solution.– How Elon’s run-in with a transit expert backfired on him. – A different economic take on Trump’s tax plan. – Also, why Larry Summers thinks Reagan’s plan was better. – Buzzword capitalism is now a thing. – Why this Game of Thrones climate model is what’s been missing from your life.– Entirely predictably, the vampire squid is to move into market-making crypto.– Uber is finally being called on its biggest bluffs.– And here’s one way to actually cash-out bitcoin.

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Would Stalin’s pension fund manager invest in bitcoin?

December 19, 2017

According to GMO’s Jeremy Grantham, there’s nothing like the fear of death to stop an investment manager from becoming too complacent in an era of overall investment mediocrity.On that basis, why not think the way Stalin’s pension fund might have to?Here’s the thought experiment outlined by Grantham in his latest research note (our emphasis):Joe Stalin has appointed you to a well-paid cushy job looking after his substantial pension fund. Do well enough and you will receive Black Sea privileges, a dacha outside Moscow, and a good pension. Do badly and you will discover that Stalin has a nasty temper. In fact, you will be shot. Conveniently, Stalin, who likes precision, has defined a very precise benchmark: 4.5% real for 10 years. (He understands that 4.7% real is considered the “normal”

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Further reading

December 19, 2017

Elsewhere on Tuesday,– Why calling public transport experts idiots while advocating elitist subterranean personal expressways is probably not a good idea.– There are signs the economy is becoming bubbly, says Pictet. – The opioid crisis is not the only substance abuse problem in America. – The Longfin blockchain effect.– This is how Britain’s taxi drivers have taken the battle against Uber local.– A paper about the US helium reserve. – The rate of return on everything. – “The Internet is this amazing productivity boosting growth engine that we’ve all been massively underpaying for”.– The exploitative dark side of hackathons.– Bitcoin’s cashing out problem.– Demonetisation burnt a $5.5bn hole in the Modi government’s pocket.

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Further reading

December 18, 2017

Elsewhere on Monday,– Lurking inside every website or app that relies on “user-generated content” there is a hidden kind of labor, without which these sites would not be viable businesses. – Land registry reveals a secret network of Cold War-era tunnels beneath central London.– The Soviet economy can essentially only be understood as a war economy.– How Elon Musk deals with legitimate criticism.– What is going on with Russian banks? – How climate change and disease helped the fall of Rome.– The other tech bubble.– The dystopian shopping experience is here.

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Bitcoin’s fractioning problem

December 14, 2017

Here’s a thought experiment.If I purchase 0.000,000,001 of a bitcoin from Kadhim for $100, should the value of one bitcoin now be considered to be $100bn per bitcoin?If not why not?Ah, you say. Because the vast majority of buyers would not be prepared to buy for that absurd valuation.But here’s the thing.Are the vast majority of “buyers” really prepared to buy for the current valuation? Or are they simply thinking in dollars worth rather than in bitcoin’s worth?The difference is important.A valuation should represent the value at which the majority of Hodlers could sell their bitcoin if they decided to sell their holdings all in one go. If this is impossible, the price per bitcoin isn’t really real. It’s just an illusion. The challenges that Hodlers face in cashing out their mega bucks

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Busting the myth that bitcoin is actually an efficient payment mechanism

December 13, 2017

We’ve said it many times before.As an actual payments mechanism, bitcoin sucks.It’s expensive to use and getting ever more so. It can be slow and unpredictable. It’s complicated and very user unfriendly (computer nerds will dispute this, but in doing so show how detached they are from the everyday needs of the average population). It depends on untested third parties for usability even more so than conventional electronic money. It’s prone to hacking. It demands users read Reddit all day every day to keep up with the latest exchange, transaction and wallet updates. It passes way too much responsibility to the average user (even the well-educated lose passwords). It sucks on the energy efficiency front. Its volatility makes it a crappy medium exchange. And finally, if not foremost, the more

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Further reading

December 12, 2017

Elsewhere on Tuesday,– Everyone is finally catching on to the smartest bitcoin trade in town. – The blue-collar hellscape of the startup industry: where the “future” means going to the past of Victorian-era factory-style conditions.– What the hell is happening with these Alabama polls? – Google is sending more traffic than Facebook to publishers — again.– In defence of the labour theory of value.– On the destruction of Matt Taibbi. – The “secret” driver of US health care costs: politicians wanting to get reelected.– How the agile computing obsession got started. – Brexit: plugging Germany’s skilled migrant shortage.– Google’s true origin partly lies in CIA and NSA research grants for mass surveillance.– Why working in a medical office is like living in a pre-modern town.

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Bitcoin contango

December 11, 2017

As every man, his dog and his gerbil probably knows by now, Bitcoin futures started trading on the CBOE exchange today.But what we find most interesting about the launch of fully regulated trade in cryptocurrency is what it tells us about the bitcoin curve structure.For a long time now, lesser futures exchanges have indicated the asset class has a tendency to be gripped by contango. But we now have confirmation that this state of affairs, while true, may be set upon a precarious foundation.Here’s the strip as it stood at pixel time (click to enlarge).Volume is light (to say the least). But while the curve currently reflects a contango structure in terms of prices last traded, the bid on the February future is wavering between discount and premium status.That is interesting for reasons

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Can we avoid another financial crisis?

December 8, 2017

[embedded content]Alphachat is available on Acast, iTunes and StitcherIn this week’s episode of Alphachat Izabella Kaminska sits down with crowd-funded heterodox economist Steve Keen to discuss his latest book “Can we avoid another financial crisis?” and the state of modern-day economics.

Hirschmania, the final chapter
The life and speeches of Sadie Alexander
Kim Rueben on the fiscal impact of

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Five signs of a really *functional* market

December 7, 2017

1) The spread between the top three exchanges offering your product is no less than… $4,000.2) The utility function of your “currency” product is compromised by a traffic jam of 193,211 transactions…3) The average transaction fee to initiate a payment is $7.4) A conspiracy theory involving the imminent hacking of your network doing the rounds.5) People allegedly killing themselves because of FOMO.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don’t cut

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The smartest bitcoin trade in town?

December 7, 2017

Over the last week or so, we’ve recounted the problems with bitcoin’s market structure and how they are likely to impact the upcoming launch of bitcoin futures (here, here and here).In the course of explaining the structural difficulties, we’ve pointed out how the capacity of market makers and bi-directional traders to support the product is crucial if bitcoin futures are ever to become a success. Currently, this is unlikely to happen because there is no easy way to play both sides of the market without taking on huge amounts of credit, fragmentation, illiquidity and hacker risk on the physical side.As it stands, CFD and spread-betting houses are the ones mostly attempting to provide this bridging role. Problem is, even they are struggling to process the risk — and that’s despite being

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What happens when bitcoin’s market cap overtakes world GDP?

December 7, 2017

Because there’s no reason why it couldn’t. And that’s the problem.Unlike any other market in the world, there are no natural sellers in bitcoin. Even the miners who mint coin stockpile as much of it as possible and try to obtain as much free energy from alternative non monetary sources.If and when they are forced to sell to pay for electricity bills they do so through established bilateral OTC channels out of fear that dumping huge amounts of coin on public exchanges could impact upward momentum, eating into their potential gains.Walter Zimmerman, technical analyst at ICAP Technical Analysis, has been in the commodities and futures market for more than 35 years. In that time, he says, he’s never seen a market quite like it. He’s worried the launch of bitcoin futures next will only

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Further reading

December 7, 2017

Elsewhere on Thursday,– Forget the blood of teens, this pill promises to extend life for a nickel a pop.– Government deficits: a financial view.– In an unregulated market there’s nothing stopping Airbnb hosts can snooping on their guests.– Gaming TripAdvisor. – Why the main impact of tax reform on the trade balance thus will come from the rise in the fiscal deficit.– Texas prisons ban over 10,000 books, but not “Mein Kampf”. – Ray Dalio has some opinions about tax reform.– Napoleon was the best general ever, and the math proves it.– “So far, Musk, 46, has accomplished none of these goals.”– A $200,000 bitcoin odyssey.– Dealing with debt collectors.

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The quant fund investing in humans not algorithms

December 6, 2017

If you’re anything like FT Alphaville, you too will be being pushed to your limits by the entirely mind-melded rhetoric coming out of the future of finance space. (Especially if you attend as many fintech panels as we do.)The problem is that the once cutting-edge claims of fintech — which first started doing the rounds in 2011/2012 — have become so established in executive and management consulting circles, they’ve begun to resemble catechism. It’s a self confirming feedback loop unlike any we’ve ever seen before, with little questioning or challenging of the now excessively entrenched assumptions.You know the spiel: robots will takeover everyone’s jobs, distributed ledger technology will save the world, challenger banks will bring down the incumbents, and we’ll all be better off because

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Don’t worry about ‘the flattening’ (just yet)

December 4, 2017

It’s that time of year again… when analysts and economists across the City begin to put out their outlook notes for 2018.Citi’s “Prospects for Economies and Financial Markets in 2018 and Beyond” looks at a bunch of trends from ongoing political risk to the impact of global central bank tightening.But it was Ebrahim Rahbari and team’s look into the flattening of the yield curve and what it means for the business cycle that caught our eye.The context is that the current US expansion cycle has lasted 35 quarters. This is the second longest expansion period since WWII. But… when compared to 14 advanced economies (AEs) since 1980, the expansion is only the 14th longest out of 46 expansions.Another key point is that the recovery has been weak as a whole.So then what should we infer from the fact

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Further reading

December 4, 2017

Elsewhere on Monday,— Macroeconomic implications of financial imperfections.— Economics as a professional vocation.— UK transport spending: Where trust in experts dies.— The early stage slump.— Doug Irwin and Tyler Cowen on US trade policy.— Adam Smith: is democracy always better for the poor?— The Republican tax plan creates big long-term opportunities for Democrats.— The Great Recession is still with us.— Further watching: Amazon, Apple, Facebook, and Google should be broken up.

Copyright The Financial Times

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What ICO valuations tell us about the state of modern monopolies

December 1, 2017

We live in a world where free lunches are not supposed to exist, which is why it’s puzzling that start-ups can suddenly raise millions overnight in ICOs without giving anything material away to investors other than a bit of code.Small surprise then that this new source of free money funding has been so popular in the investing space (with almost every man, his dog and his dentist attempting an ICO).Sources tell us the market has finally started to cool off a bit of late, down in part to the sheer volume of ICOs hitting the market.Nevertheless the phenomenon remains an academic curiosity.There are two key questions at hand.Are these companies so good that people are prepared to invest in them with zero legal recourse to anything? (Consequently, would these companies be fools to fund in a

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