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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

Taking the block out of blockchain…

1 day ago

Blockchain. It was supposed to change everything.And yet…Two years of dabbling and experimentation and it’s mostly just been changing itself (so as to become even barely usable in capital markets).On that note, some observations from Axel Pierron at Opimas in his latest update on capital market blockchain projects (our emphasis):From distributed to shared ledgerTo answer the concerns around scalability and information leakage, a number of blockchain technology providers such as Digital Asset Holdings and R3 have implemented a shared ledger model, rather than a distributed ledger. In this infrastructure, market participants’ nodes only keep a record of the transactions to which they are a counterparty, and that they upload from a central ledger that keeps a record of all transactions.With

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Further reading

3 days ago

Elsewhere on Tuesday,– The gig economy’s Downton Abbey ways are being challenged. – Why didn’t Puerto Rico use its “local law” advantage to reduce its debt?– Why all businesses operating in China should ask the question: with every sale I make, am I now providing a repressive state with the means to keep my customers under surveillance?– The unintended consequences of a flatter yield curve.– An Ethereum startup just vanished after people invested $374,000.– And now the untethering.– Amazon is on the verge of becoming a members’ club.– Who is more likely to default on student loans?– About that German meltdown.– Australia’s economy is a house of cards.

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On the (non) viability of start-up islands

6 days ago

“Governments just don’t get better,” Mr. Quirk said. “They’re stuck in previous centuries. That’s because land incentivizes a violent monopoly to control it.”So noted Joe Quirk, president of the Seasteading Institute to the New York Times this week.For those who don’t know, the Seasteading Institute aims to liberate the world from the tyranny of governments by constructing dozens of self-governing floating islands by 2020. Initially, they will be based in and around French Polynesia and feature everything from homes, hotels, offices, restaurants (and no doubt casinos) for the bargain price of $60m.The project is being part-bankrolled by Facebook investor and PayPal co-founder Peter Thiel, but also aims to raise funds through the hottest fundraising mechanism in town: the initial coin

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FT Alphaville job applications are now closed!

9 days ago

Last week FT Alphaville announced it was in the market for new hires. We asked prospective candidates to submit applications for a job in London by Nov 14.Since then we’ve had overwhelming feedback (which is one of the reasons posting has been light on the site since the start of the week).It is now November 15 and applications are still streaming in.We want to stress the application process is now closed and we will not be responding or considering any submissions coming our way from now on (not least because we have to get back to our day jobs).We regret to inform those who missed the deadline their applications will not be considered.First rule of journalism: deadlines matter.

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Further reading

14 days ago

Elsewhere on Friday,– A federal Spain in a federal Europe.– Sean Parker unloads on Facebook “exploiting” human psychology.– The plan to wage financial war on Qatar and steal the world cup. – Germany’s at last contributing to global adjustment.– The unsung role that ordinary citizens played in the great crime decline.– Rescuing economics from neoliberalism.– Las Vegas self-driving shuttle involved in crash within first hour of operation.– “In the middle of his presentation, a gray-haired senior partner stood up, yelled “PONZI SCHEME!” and stormed out. ”– Why social media has failed its self-driving test.

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Further reading

15 days ago

Elsewhere on Thursday,– “The US sovereign debt market watched over by the Treasury and the Fed is the only ‘strategic game‘ in town.”– A collection of the most ridiculous stories of the crypto bull run…– ‘$300m in cryptocurrency’ accidentally lost forever due to bug.– How I sold out to the Putin-Soros-Murdoch conspiracy to destroy Western civilization, by Steve Keen. – How Seattle fell out of love with Amazon.– Why isn’t the Indian caste system more protested in the United States?– What the paradise papers tell us about global business and political elites.– How Facebook will use humans not algorithms to police its revenge porn problem. – The human impact of India’s demonetisation experiment.

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Further reading

16 days ago

Elsewhere on Wednesday,– Could Rome have had an industrial revolution?– Something is wrong on the internet when “… young children, effectively from birth, are being deliberately targeted with content which will traumatise and disturb them”. What’s more, we have seemingly “built a world which operates at scale, where human oversight is simply impossible, and no manner of inhuman oversight will counter most of the examples I’ve used in this essay.”– India’s war on cash assessed one year later.– Modeling for ancient lost cities.– On trade, technology, and job disruption.– The Eurosystem is apparently less transparent and operates with significantly higher costs and headcount than the US Federal Reserve System.– How ski resorts are holding onto their snow.– Russia’s unloved anniversary.– The

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FT Alphaville is hiring

17 days ago

We are looking for a couple of natural writers with an interest in all things financial to join the FTAV team at the FT. Deadline: November 14, 2017.These positions will be based in London, although we are happy to hear from applicants interested in being based in other financial centres too.Good writing skills are essential as is a keen interest in finance, markets and corporate life. We need sparkling prose from experienced people who are instinctive, creative, witty and critical minded. You’ll also be expected to know a thing or two about economics or be keen to learn more. Alternatively, you’re the sort of person who already likes to read bond prospectuses for fun at the weekend because for some reason you find them fascinating.Perhaps you are a business journalist at a quality

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Further reading

17 days ago

Elsewhere on Tuesday,– Who’s suing whom when it comes to potential Russia connection allegations.– Washington’s connections to the Saudi purge.– WeWork is going after kindergarten children now.– “The bottom line is that most people do not buy a home but rather commit to a long-term payment scheme.”– Tyler Cowen’s take on “The Square”. – China has not been a drag on the global growth rate, but nor has it been the locomotive.– Guy Standing on the importance of the Magna Carta and forests.– Swiss secrecy turns to the wedding business.– Why we need new rules for the internet economy.

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A sit down with Adair Turner

21 days ago

[embedded content]Alphachat is available on Acast, iTunes and Stitcher.The former chair of the UK’s Financial Services Authority and current chair of the Institute for New Economic Thinking talks to Alphaville’s Izabella Kaminska at INET’s recent festival in Edinburgh, Scotland. The two cover Turner’s views on peer-to-peer lending, the role of banks in money creation, the cryptocurrency scene and much more.Transpires, Turner hasn’t actually changed his mind about the inherent risks associated with the P2P model or the fact that it’s mostly morphing into a conventional bank structure.>https://aca.st/e69258

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Tesla’s eighth circle of hell may be a ring of fire atop of a gigafactory

22 days ago

In case you missed it, Tesla posted a massive third-quarter miss overnight due to production delays affecting its new Model 3 line. Delivery targets have now been pushed back three months prompting concerns over how the electric automaker will deal with its crippling cashburn rate during that period.Last week Tesla CEO Elon Musk, ever the showman, attempted to demonstrate to investors he was on top of the situation by posting pics of himself and a group of colleagues camping out on the rooftop of the Nevada gigafactory where all the problems are occurring:The photo was accompanied by a video of Musk toasting marshmallows on a live fire (on a not-at-all solar-panel laden roof) while singing along to Johnny Cash’s Ring of Fire.[embedded content]Not to be confused with a CEO more interested

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When AI becomes too big to fail

22 days ago

The FSB has just published a 45-page report into the financial stability implications of artificial intelligence and machine learning in financial services.There’s a deep dive into what constitutes AI and machine learning, but what strikes us as most interesting is the following on the evolution of the market structure (our emphasis):AI and machine learning services are increasingly being offered by a few large technology firms. Like in other platform-based markets, there may be value in financial institutions using similar third-party providers given these providers’ reputation, scale, and interoperability. There is the potential for natural monopolies or oligopolies. These competition issues – relevant enough from the perspective of economic efficiency – could be translated into

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Further reading

23 days ago

Elsewhere on Wednesday,– Mapping the reformation migration in America on the 500th anniversary of Martin Luther’s nailing of the 95 theses to the door of the Wittenberg schlosskirche.– The costs of domain spoofing.– Perhaps concerns about too much short-termism in markets are overblown? – The amazing story of the failure of Fyre Festival (and the related ill-thought out marketing and pricing strategies).– Puerto Rico is burning its dead, and we may never know how many people the hurricane really killed.– Matt Levine talks to Tyler Cowen talks about fintech.– Russia’s latest attempt to arrest Bill Browder shows how autocracies abuse Interpol.– Why Brexit was the voice of the squeezed middle, not the working class.– Why the magic money tree of bank money creation is not cost free.

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The FCA wants to have its cake and eat it, sandbox edition

October 25, 2017

A “sandbox” is not a box containing sand for children to play in. It’s an idea borrowed from the tech industry, where it describes a process in which developers test programmes in a segregated environment to avoid breaking the wider system. You can read about it here. But the assumption these days is that anything which works in tech can and should be applied to all sorts of other social and business settings. And so we now have a financial regulatory “sandbox”, brought to us by the FCA, that applies the principles of software testing to financial business models.Its launch in November 2015 was met with huge enthusiasm from the fintech community, because why wouldn’t it? Here’s an opportunity to launch business models into a live market while bypassing regulations and to “prove” to those

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“Markets are not prepared for China exporting inflation”

October 24, 2017

You know the spiel. The west exported inflation to China and in return China sent us back deflation.What’s more, the cosy relationship has been compromising the west’s ability to influence inflation rates via monetary policy ever since.But how about this for a counter narrative?Diana Choyleva of Enodoeconomics believes it’s not the export of deflation from China we should be worrying about at this point as inflation.As she noted in a report last week (our emphasis):While most global investors expect Beijing to manage successfully its transformation to a better-balanced development model, the minority who view the challenge as unsurmountable and expect some sort of crisis worry about China exporting deflation to the rest of the world. But my analysis suggests that it is Chinese inflation

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Do crypto enthusiasts fear credit?

October 23, 2017

At last week’s Festival of New Economic Thinking in Edinburgh (supported by the Institute for New Economic Thinking) FT Alphaville participated in a uniquely neutral and academic debate on the future of cryptocurrency featuring Rohan Grey of the Modern Money Network and Perry Mehrling, professor of economics at Barnard College at Columbia University.Mehrling, a highly acclaimed resource on matters monetary, had previously outlined the case — after spending some up-close and personal time with a group of technologists and lawyers debating crypto — that crypto monetary theory stemmed mostly from a relatively retrospective view of value which ignores the role of credit in payments systems.In particular, Mehrling took three key points away from the encounter with respect to what the

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What is tokenisation really?

October 23, 2017

The advocates of the new “tokenised” economy claim that slicing and dicing real assets into fractions of ownership on a blockchain will enhance liquidity, price discovery and accessibility to high value illiquid assets at a fraction of current transaction costs.To that end, as Alex has already written, projects like LAToken claim to offer a “unique opportunity for cryptoholders to gain exposure to the value of illiquid assets accessible only to large investors (such as real estate and artwork) and thus increase their ROI and diversify their portfolio.”But dig deep into the white papers, and everything starts to look a little bit familiar.In LAToken’s case, liquidity transformation takes place via a process in which the asset owner signs an agreement with an “LAT-certified custodian”

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Billion dollar deals and how they changed your world

October 17, 2017

[embedded content]Documentary-maker Jacques Peretti’s new series on the billion dollar deals which changed the world has just finished airing on the BBC. For UK readers, the three-part series is available on iPlayer. But Peretti also has an accompanying book called Done, filled with a great collection of anecdotes about the unexpected circumstances which brought certain deals into being. They range from the academic research which observed consumers are much more likely to spend virtual dollars to physical paper dollars due to the “flinch” effect and the role dark-market money played in bailing out the banks in the global financial crisis, to how AIDS patients inspired subprime securitisation practices. The book also offers a healthy critique of Silicon Valley’s uniquely elitist brand of

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Tether’s “transparency update” is out

October 2, 2017

A couple of weeks ago we flagged how Tether’s ballooning issuance of dollar-lookalike crypto liabilities was fueling internet speculation that much of Bitcoin’s recent rally could be related to these tokens being unbacked by real dollars.Tether is an affiliate of Bitfinex, one of world’s most liquid crypto exchanges, with the two groups sharing key dollar banking relationships. In recent months, the companies’ banking relationships have become strained due to a loss of correspondent banking relationships in the US, which have frozen retail dollar deposits. Bitfinex/Tether claim to have worked out temporary arrangements that allow high-value customers to continue to deposit and redeem dollar balances, even while average retail customers cannot.In a bid to quench speculation about the

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Crypto exchanges are untrustworthy; who knew?!

September 29, 2017

We should celebrate Reuters’ richly-produced Chaos and hackers stalk investors on cryptocurrency exchanges, published on Friday.It’s kinda baffled us for five years straight as to why so much of the financial press hasn’t really bothered to kick tyres in the crypto world, entranced by the ever-rising price of bitcoin and seemingly blind to the notion that concepts like “trustless” probably just mean “untrustworthy.No matter!One interesting snippet the Reuters piece offers (which should make those financial analysts who’ve decided to treat this stuff as a serious investment question themselves) is this:One exchange, OKCoin, inflated volumes through so-called wash trades, repeatedly trading nominal amounts of bitcoin back and forth between accounts, two former executives said. The

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The Chinese MMF that came in from the cold

September 27, 2017

Just in case you missed it, the WSJ reported on Tuesday that the world’s largest money market fund, China’s Yu’e Bao, will be making changes to its investment strategy to comply with new Chinese investment rules.This is a big deal.Yu’e Bao was born out of idle reserves (“leftover treasure”) kept in Alipay accounts, much the way PayPal’s money market fund (now defunct) was born out of spare cash parked in PayPal accounts.The appeal of the MMF for the customer is obvious: it provides an opportunity to generate returns on cash reserves held in digital money platforms, which otherwise would be forgone since these platforms are not banking institutions.The innovation from the platform’s perspective is in not seizing the rate differential for itself but rather passing it on to customers.

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London taxi controversies of yesteryear

September 25, 2017

What’s worth bearing in mind when assessing Friday’s decision by TfL to not renew Uber’s London operating license is historical context. This is not a new phenomenon, but rather a perpetual one that keeps resurfacing due to the nature of underlying trade.Case in point, this letter from EH Bayley, chairman of the largest cab company in London, as published in the Financial Times in 1907.But we can go further back to 1834 and the parliamentary debates pertaining to proposed regulation of the fast proliferating taxi cab and omnibuses, where the issues once again were very familiar (our emphasis):Mr. Hume thought, after paying considerable attention to the subject, that licensing the drivers instead of the proprietors of omnibuses and cabriolets would be productive of bad consequences. It

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Robert Lustig on the science behind our addictions

September 22, 2017

[embedded content]
The hacking of the American Mind – by Robert H. LustigAlphachat is available on Acast, iTunes and Stitcher.Long form recommendations:The hacking of the American Mind – by Robert H. Lustig

Introducing Alphachat, the FT Alphaville podcast
Podcast bleg: Alphachat returns
Sal Arnuk on high frequency trading
Alphachat returns

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People go for subsidised services, who knew!?

September 21, 2017

Deliveroo’s 2016 company accounts filed this week reveal……. a 12-month loss of *£132.7m vs £30m lost a year earlier.The positive spin is focuses on the company’s stellar growth in revenues from £18m to £128m in the year, but with a cost of sales of £127.4m one’s got to ask whether a conventional investor or entrepreneur would really see any potential in such a business?After all, the company’s gross operating margin is all but non-existent.When you consider the potential margin destruction that may arise if and when Deliveroo workers — who have been lawyering up on the back of the raw deal they now realise they’ve been getting with respect to wages and worker rights — get their way on better terms, the business model in question begins to look more non-profit/charity-like by the

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Further reading

September 21, 2017

Elsewhere on Thursday,– The harm of high housing costs.– Early bitcoin developer who worked with Satoshi laments the “billions of dollars of scams and failures and thefts” that “have been perpetrated by abusing people’s faith in and enthusiasm for that technology by now”, with a specific reference to ICOs.– Insanely concentrated wealth is strangling our prosperity.– Why are more people trying to rob banks?– Ideas aren’t running out, but they are getting more expensive to find.– A conversation with Larry Summers. – E-cigs are not cool. – Call it ‘Fintech’ and watch the valuation soar.– Mike Bloomberg is starting to wonder if anyone is reading their Bloomberg terminal.– Silicon Valley and the German election.– Drones hurt when they hit you on the head.– Is “disruption” becoming a dirty

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Further reading

September 20, 2017

Elsewhere on Wednesday– E-Coin was not like “real cryptocurrencies” and thus got shut down for being fake.– Just 4 per cent own over 95 per cent of Bitcoin.– And the price of bitcoin has a 91 per cent correlation with Google searches for bitcoin.– Why Qatar is a motivated seller.– Gross is bond king no more.– Big banks are obsessed with robotics and AI because the free lunch from cheap offshore cost bases is disappearing.– 10 years after Northern Rock, but is the UK banking sector any more resilient?– Why India will tell us when self-driving cars will hit the US.– The boring story of the 2016 election.– Is Apple’s new ad policy going to kill the internet?– The car finance frenzy.– About Japan’s “exclusionary nationalism.”

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What is ‘Utility Settlement Coin’ really?

September 18, 2017

While the BIS report on cryptocurrencies released Sunday offered little in the way of new thinking about the topic, it did provide this intriguing chart:Note the prominent positioning of “Utility Settlement Coin” (USC) within the monetary schematic. It’s intriguing because so little is known about the venture publicly and yet there it is, slap bang in the middle of a BIS monetary schematic.Updates about UBS’ Utility Settlement Coin have been percolating through the media since August. The news dimension, however, has mostly centred on the expanding nature of the network rather than details about what the project is really about.New additions have included Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG and State Street, joining the original network of UBS, BNY

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BIS hones in on the paradox at the heart of central bank cryptocurrencies

September 18, 2017

The latest BIS quarterly report just out looks at the topic of cryptocurrencies, and in particular that of central bank cryptocurrencies. There’s not too much in the report that’s particularly enlightening, but there is the assertion that crypto technologies could help central banks add to the pool of anonymous cash in the system by digitising currency in such a way that digital accounts remain anonymous:The technology behind CBCCs (Central Bank Crytpo Currencies) could allow central banks to provide a digital cash substitute with anonymity properties similar to those of cash. In its role as issuer, the central bank would need to decide whether or not to require customer information (the true identity behind the public address). This would determine the extent to which the retail CBCC

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Further reading

September 18, 2017

Elsewhere on Monday,– Canada’s precious bodily fluid imports.– Is California punishes the poor through traffic violations?– What is great about ourselves.– Have our jobs have become prisons from which we don’t want to escape?– Has disruption from e-commerce run its course?– American growth pessimism may be overdone.– The Feds are going after dark market vendors not just dark market operators.– UK vs US capitalism.– China, Tethers and what’s happened to the bitcoin price. – Is SoFi the Theranos of Fintech?– Facebook and Google need humans, not just algorithms, to filter out hate speech.– BIS finds global debt may be underreported By $14tn.

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Crypto tethers as the new eurodollars

September 15, 2017

Once upon a time, eurodollars were dollar-like liabilities issued by non-US entities outside of the reach of regulations that usually govern dollar-issuing entities. No minimum reserve requirements, no access to lender of last resort and no registration applied. Most of the time the assets which underpinned them (so-called eurobonds and eurosecurities) were also entirely bearer in form. They were dollars, but not.This was a fun time for those who wanted to benefit from the stability of the dollar, without having to observe any of the legal structures that underpinned it.International regulatory efforts since the 2008 global financial crisis ironed out the gappy supervisory conditions which allowed these two entirely different types of liabilities (real dollars and eurodollars) to co-exist

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