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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

Whole Foods vs the activists

8 days ago

So, Amazon is acquiring high-end grocer Whole Foods for $13.7bn.From the press release:Whole Foods Market will continue to operate stores under the Whole Foods Market brand and source from trusted vendors and partners around the world. John Mackey will remain as CEO of Whole Foods Market and Whole Foods Market’s headquarters will stay in Austin, Texas.The pairing of high-tech retail killer and high-overhead premium grocer seems odd. So far, Amazon has only opened a few physical bookstores, which have not been terribly customer-friendly. The deal does, however, provide more confirmation that grocers are the next industry in the crosshairs of cost-cutting distribution specialists like Amazon and Wal-Mart, which bought Jet.com last year.From RBC:This would be the largest acquisition Amazon

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On the rise of unproductive entrepreneurs like Travis Kalanick

9 days ago

Entrepreneurs are universally celebrated, but what if modern day entrepreneurship is creating ventures that do more harm than good?A piece this week in Harvard Business Review by Robert E. Litan and Ian Hathaway reminds us of this point by citing the work of William Baumol, who passed away last month.Baumol’s overarching theory is fantastically compelling. It suggests the number of entrepreneurs in an economy is essentially fixed and what influences a nation’s entrepreneurial output is how those entrepreneurs are incentivised.As per our own longstanding argument that innovation should not be treated as a universally positive phenomenon — since innovation comes in both good and bad forms — the view here is that the underlying incentive structure of the economy in which an entrepreneur

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Blockchain’s governance paradox

10 days ago

Distributed ledger technologies “are starting to look an awful lot like some of the more conventional technical solutions that we have,” says Prof. Vili Lehdonvirta, an associate professor and senior research fellow at the Oxford Internet Institute, at a recent talk he gave at the Alan Turing Institute.At the heart of the issue (as always) is who dictates and enforces the rules of the system if and when things go wrong, according to Lehdonvirta. He echoes a point we’ve long made, namely, that what really matters in these systems is how they deal with exceptions rather than norms.The industry’s continuous shifting of nomenclature hints at the inherent challenges and revisionism at hand. As blockchains become DLTs, shared databases and permissioned consensus networks, what the techies

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Podcast: Geoffrey West on why some things stop growing other things don’t

15 days ago

[embedded content]Podcast and book review: Why things stop growing, and why other things don’tAlphachat is available on Acast, iTunes and Stitcher.Geoffrey West, theoretical physicist turned complexity scientist at the Santa Fe Institute in New Mexico, first became fascinated with the idea of Scale two decades ago as he began to approach his 50s. Coming from a long line of short-lived males, he says this age more than any other triggered a foreboding sense of his own mortality.Being a scientist, however, he wasn’t prepared to accept the ageing process as a given without at least trying to understand it first. He wanted to know more about where the span of human life emanated from. And why, for example, had no-one been able to live beyond 123 years of life?In Scale, West outlines his quest

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Further reading

15 days ago

Elsewhere on Friday (in non UK election news),– Softbank is buying robotics firms Boston Dynamics and Schaft from Alphabet.– Car fact of the day. – Ken Griffin on when the crash finally comes.– When Trotsky (temporarily) embraced prices and markets.– Expiring vs long-term knowledge.– Blockchain financial networks raise legal and regulatory issues.– Citizen Zuckerberg.– Blue Apron’s non inventory control .– The changing face of volatility. – Further, further reading.

Copyright The Financial Times Limited 2017. All

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Further reading

16 days ago

Elsewhere on Thursdsay,– What if a clearing house fails?– The last hedge fund pit bull. – Why Republicans can’t really repeal Dodd Frank. – A reminder about why it’s hard to fire Uber’s Travis Kalanick.– But perhaps all will be forgiven if Kalanick keeps meditating before making decisions?– Then again, even Arianna Huffington’s defence isn’t reassuring.– That Comey statement. – A creepy quest to save humanity from robocar commuting.– The rise of inconspicuous consumption. – The downsides as well as the upsides of DLTs are finally being talked about seriously.

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Building blockchain banks with ICOs

17 days ago

Polybius was a second century-BC Greek historian who brought us the theory of cyclical political change known as anacyclosis, loosely based on Plato’s philosopher king narrative. The general thrust of the argument is that political structure is perpetually revolving — moving from monarchy to oligarchy to rule by the people (over and over again) — because humans can always be relied upon to respond the same way to the same challenges. He was also an early-day tinkerer in cryptography.Polybius, the crypto bank initiative, is a proposed blockchain-based digital institution which raised $11m last week via an Initial Coin Offering (ICO) with little more than a 22-page “prospectus” and a promise that “Polybius Bank will become a fully digital bank accessible everywhere at any time. It will have

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Markets Live: Friday, 2nd June, 2017

22 days ago

10:59 am

IK11:00amGood morning everyone! That’s now three days on the trott starting just before 11….

Otter
Hello Friday Friends

Otter
Tell me. Who has the nice weekend plans?

Foundry
Happy Friday to one and all

KS11:00amhowdy

IK11:00amHello Kadhim

11:00 am

KS11:00amIt’s our last day Izzy

IK11:01amyes, sad face

KS11:01amBryce returns next week

11:00 am

IK11:01amCry smile

KS11:01amCry smileCry smileCry smile

BBOC
Morning everybody

Soundbuy
Morgen

Soundbuy
@Otter – not a lot on……..

IK11:01amBut i have to report, our

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It’s not just a Ponzi, it’s a ‘smart’ Ponzi

23 days ago

Hat tip to Bloomberg’s Matt Levine for drawing our attention to this paper from a bunch of academics at the University of Cagliari in Italy examining the Ethereum blockchain’s tendency to incubate Ponzi schemes.As a whole, they note, Ethereum has managed to generate an unholy amount of Ponzi schemes in its mere 1.5 years of existence. Moreover, the paper doesn’t even account for the recent spell of ICO madness. (Current market cap of the cryptocurrency sector: $85bn, btw.)The uniqueness of the “smart Ponzi” is its capacity to protect the identity of the initiator but also its ability to persist even after being exposed. Since contracts are unmodifiable and thus unstoppable there is no central authority to terminate the execution of the scheme or force the initiator to refund victims.

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Markets Live: Thursday, 1st June, 2017

23 days ago

10:59 am

IK10:59am…

IK10:59amHello rabble

Soundbuy
Morning

A. M.
Good morning.

IK11:00amWe’re early I guess…

10:59 am

KS11:00amOne minute early

KS11:00amPutting Bryce and Paul to shame

Markkus
morning…

Soundbuy
Put it down as overtime…..

KS11:00am(Weirdly enough, the tech has been absolutely fine for us)

11:00 am

IK11:00am(Yeah, it is weird)

KS11:00am(One would almost think they’re using it as an excuse…)

KS11:00amOk, picture of the day

11:00 am

KS11:01am

KS11:01amI was trying to find an interesting picture of the Bank of England

A. M.

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Markets Live: Wednesday, 31st May, 2017

24 days ago

A. M.
Morning all.

11:00 am

IK11:00am…

Blank canvas
good morning

Soundbuy
Morning

Pseudonym
Good morning internet friends.

Patience
Good morning.

Boncoeur
Hey Hey

IK11:00amHello everyone

A. M.
By the way, to terminate pesky chrome processes in windows, simply type "taskkill /f /im chrome.exe"

Pseudonym
IK? No Bruce?

IK11:01amDespite Bryce and Paul being away Covfefe …

Soundbuy
Oh………

Soundbuy
Brucey not well…………?

11:01 am

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Who needs shares when you’ve got ICOs?

29 days ago

Fed up with tech unicorn founders amassing unprecedented amounts of corporate power, while burning cash and operating unprofitably? Annoyed that all this is being justified with the defence that duh, winner-takes-all!?Well then, just maybe, decentralised autonomous organisations and their tokens are the thing for you.Here comes an instrument so cutting edge and so post-modern there’s not a shareholder right in sight. And if there are no shareholders, there can not legitimately be any founder owners tyrannising shareholder classes with inferior rights.Instead imagine a venture so pure in purpose and so beloved, it’s the users themselves who club together to bring it life, hiring and firing management as and when they do or do not perform, with the only the prospect of a revenue sharing

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Blockchain dreams meet processing reality

May 25, 2017

From the Bank of Canada, via Reuters, on Thursday: “The bottom line is that a stand-alone DLT wholesale system is unlikely to match the efficiency and net benefits of a centralized system,” wrote Carolyn Wilkins, senior deputy governor of the Bank of Canada, and Gerry Gaetz, Payments Canada president.“At its heart, there exists a fundamental inconsistency or tension between a centralized wholesale interbank payment system, as we have now, and the decentralization inherent in DLT.”Related links:Canada experiments with digital dollar on blockchain – FT

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Sorry your crypto bank is temporarily unavailable

May 25, 2017

As the price of bitcoin continues to soar ever higher ($2806 high on Coinbase by the last count), reports are beginning to circulate of interface problems at some of the bigger exchanges — perhaps due to the sheer volume of punters wanting to get in on the frenzy, or perhaps due to the fact that some are bona fide broker dealers who clear the bulk of their trades off-blockchain and in so doing potentially run up not insignificant exposures.Who knows. “Down right now” is not an exclusive crypto currency phenomenon (we’re looking at you Natwest). But Coinbase has been intermittently down for at least two days.With an unprecedented amount of leverage in the bitcoin and altcoin market, a runaway rally that doesn’t seem to know when to stop, the biggest exchange still not facilitating dollar

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On the economic weaponisation of troll armies

May 23, 2017

What is the value of professional spamming services?Cui bono and cui plagalis?To wit, here’s a tale of two professionalised digital troll/spamming armies.On one hand you have Sergei Mavrodi and his MMM pyramid-in-plain-sight scheme, which now gives new entrants instructions not just on whom to send payments to, but also on a series of daily internet “tasks” they need to accomplish in 5-15 minutes to qualify for additional earnings.“If you accomplish tasks everyday during the month, the total MAVRO growth makes up 100%. You will double up your money,” reads the marketing material.Tasks include liking a YouTube video, joining a Facebook group, sharing news on Google Plus or creating a Pinterest group. All of these have the capacity to skew online statistics, counters or data and mislead

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How to value bitcoin with a traditional valuation measure

May 22, 2017

A London-based financial analyst who prefers to remain anonymous has constructed a bitcoin valuation model he’s called BitVal. The model is a bid to try and figure out the fair value of the currency, since its price has soared past $2200.It is based on the presumption that bitcoin’s core utility value is serving as a currency for the dark economy.The methodology applies a purchasing power parity (PPP) approach and goes as follows:Our BitVal (BETA) metric tries to estimate the amount of money laundering taking place at any given moment in time to provide a valuation anchor for Bitcoin. Since such money laundering obviously falls outside of the regulatory apparatus there are no good statistics on it. What we have done instead is we have taken the rankings assigned to various countries by the

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The currency of the future has a settlement problem

May 17, 2017

Anyone and everyone’s attention in bitcoin is currently transfixed on a single number: the amount of unconfirmed transactions building up on the bitcoin network.Earlier on Wednesday, the number surpassed 200,000, an unprecedented level.Professional bitcoin OTC traders FT Alphaville spoke with see this as an alarming development and one of the drivers of rival cryptocurrency ether’s growing popularity. The views of one trader:It definitely tempts people into ether. This is the biggest problem with bitcoin, it’s not just that it’s expensive to transact, it’s uncertain to transact. It’s hard to know if you’ve put enough of a fee. So if you significantly over pay to get in, even then it’s not guaranteed. There are a lot of people who don’t know how to set their fees, and it takes hours to

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When tech negatives begin to outweigh tech positives

May 17, 2017

Frictionless systems are lauded in technology-land.The easier access gets, the better, and the lower the barrier to entry the more compelling the proposition. Everything is today, now, yesterday! Immediacy trumps latency. End of.But there’s a downside to making everything exceptionally accessible. It comes at the cost of resistance, thoughtfulness, security, commitment and loyalty — the very stuff we depend on to create and maintain value in human society.It also invites predation.But what really motivates fraudsters who ruthlessly exploit our connected and open society for their own benefit?Together with the IT company Cognizant, Red Associates, a consulting firm which uses human sciences to try and solve business problems, tracked down real individuals who operate by these means to try

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More on the rental car canary in the coal mine

May 11, 2017

As a follow-up to our piece on what the rental car sector forewarns about shared mobility, here are some fresh thoughts from auto equity analyst Adam Jonas at Morgan Stanley on Thursday.The TL;DR of the last post in case you missed it: if shared mobility is to cost effectively displace private vehicle ownership, it’s going to have to find someone to subsidise capital costs to the same degree rental car businesses always have. Unfortunately, the primary candidate — the second-hand private vehicle purchaser — is likely to be extinguished by the very same model, or at best priced out of the market.In order to compensate, the clearing cost of used car prices will have to collapse to levels which can no longer subsidise the market cost effectively. That makes it a Concorde 2.0 type situation,

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What Hertz tells us about the future of shared mobility

May 11, 2017

Anyone thinking of betting big on shared-mobility as the future of public transport should be alerted to one thing: the car-rental business is currently languishing.On Monday, Hertz reported a bigger-than-expected quarterly loss cementing a generally poor quarter for the sector. Shares tanked accordingly:Of note here are two key facts. The first is that the car rental business is a capital intensive one partial to low operating margins. And has always been. The second is that the industry as a consequence has long depended on auxiliary services — such as insurance, fuel surcharging and catching customers out on T&Cs — for profitability.The active management of legacy fleet costs is a really big thing. To improve economies of scale, rental companies regularly shed excess inventory in

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Who’s banking whom in cryptoland?

May 9, 2017

On Monday, we brought you the story of TokenCard, the Ethereum-based venture set to revolutionise the world of payments by bringing crypto folk the, errr, power of the Visa network.Yes, you’re wondering, what’s so special about that? Doesn’t every above-board payment facilitator offer Visa access? You’re right. They do. And a card processed by Visa is hardly a breakthrough innovation worth shouting about here in the real world.But, you see, while access to the Visa network is taken as a given by us compliant statists, in crypto land it’s a rarity. Here users sit locked into paper profits that are very hard to liquidate in day-to-day convenient “spending” circumstances.The holy grail in cryptoland has thus for a long time been turning these coins into usable currency, the sort that doesn’t

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Introducing truly outlandish ICO claims, TokenCard edition

May 8, 2017

Last week, an initial coin offering (ICO) for something* called TokenCard raised** $16.7m in “mere minutes”, according to the PR spin embedded in the emailed correspondence to this reporter following the event.It was brought to market by an outfit called Monolith Studio, which until recently had offered sparse information about who was behind it, apart from a loose connection to Peter Vessenes, bitcoin investor and founder of something called “New Alchemy” (no less).As is increasingly common in the promotion of these launches, a proposal pitching exclusive details ahead of the offering was made to the press. This, from April 19, being an example from our own inbox (with Monolith calling itself Monolith Ventures):Details revealed over the next few weeks showed the project was the brainchild

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Crypto ICOs as the new railway bonds

May 8, 2017

It was now that there began the systematic practice of stagging — applying heavily for the shares in new companies with a view to selling them immediately at a premium — and Punch that year had plenty of fun satirising ‘Stag-hunting in Capel Court”.That’s from David Kynaston’s City of London: The History.It refers to the railway mania of the 1840s, an investment bubble that collapsed in 1846 after a corn drought forced the Bank of England to raise rates. The hike put an abrupt end to the preceding period of excessively cheap money, which eventually meant more than a third of the railways the government authorised were never built. According to Wikipedia:…the companies either collapsed due to poor financial planning, were bought out by larger competitors before they could build their line,

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Shared mobility V.1, USSR edition

May 8, 2017

The tech world would have you believe that “shared mobility” is an internet 3.0 invention.And yet, before Uber, before Zipcar, before Tesla, in fact before shared mobility was even a twinkle in a marketing executive’s eye… the dream of shared rather than evil private ownership was already very much a thing… in the Soviet Union.From the FT Archives of 1971 and a piece by James Ensor, motoring correspondent at the time:Today’s enthusiasm for communism non-ownership is in part being fuelled by a desire to be greener. Which is understandable. Who doesn’t want to convince themselves they can retain the convenience and accessibility of private vehicle ownership and still be more environmental at the same time? We all want to have our cake and eat it.But it’s dangerous to conflate this desire

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The joke’s on Elon, admits Elon

May 4, 2017

I thought we were being all clever by calling it the Model 3, but actually the joke’s on me, because it caused confusion in the marketplace, so we’re doing our best to clear up that confusion so people do not think that Model 3 is somehow superior to Model S. Actually Model S will be better than Model 3, as it should be, because it’s a more expensive car.That admission, believe it or not, comes from Elon Musk, the usually obdurate and defensive CEO of Tesla. He was speaking during the company’s Wednesday earnings call the week the electric car maker posted a wider than expected loss this week on rising costs in the first quarter, while also highlighting how tight its 5,000 vehicles per week delivery target was.But it wasn’t the only moment of contrition for Musk. There was also this admission about the CEO’s mass manufacturing learning curve in general:As far as specific constraints on Model 3, I just don’t know of anything that really stands out. We’ve gone to great pains with the Model 3 to design it for manufacturing, and to not have all sorts of bells and whistles and special features that, like for example, with Model X, Model X became kind of like a technology bandwagon of every cool thing we could imagine all at once. It’s like everything all at once. That is a terrible strategy.

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GMO’s Grantham on what’s driving abnormal profit margins

May 2, 2017

GMO’s Jeremy Grantham is worried about the perseverance of abnormally high corporate profit margins in the US. The phenomenon is amongst other things upsetting the standard notion that profits are mean reverting to historic averages. But as the following chart from GMO’s latest quarterly letter shows this just isn’t happening:Grantham suspects historically low rates since 1997 combined with higher leverage play a big part in the story. Even so, it can’t be the only explainer. As Grantham says, in a world of reasonable competitiveness higher margins from long-term lower rates should have been competed away. Since they have not, the anomaly must be down to something else.Grantham puts the cause down to three other factors: Increased monopoly power, increased political power and increased brand power.The general pattern described so far is entirely compatible with increased monopoly power for US corporations. Put this way, if they had materially more monopoly power, we would expect to see exactly what we do see: higher profit margins; increased reluctance to expand capacity; slight reductions in GDP growth and productivity; pressure on wages, unions, and labor negotiations; and fewer new entrants into the corporate world and a declining number of increasingly large corporations.

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Who are Tesla’s competitors, really?

April 28, 2017

Here’s an interesting point from Morgan Stanley equity analyst Adam Jonas on Friday regarding Tesla’s competitive stance in the market:The good news: Tesla’s major competition likely doesn’t come from the world’s established auto companies.The bad news: Tesla’s major competition likely doesn’t come from the world’s established auto companies.Do you see where he’s going with this?Out of the 30 names which applied for autonomous vehicle testing permits in April 2017, 11 were not established auto makers or suppliers. The most recent eight permits to the contrary were issued to non-auto technology-type firms.What are the implications of this?Well, the first is that non-auto players may have a slightly larger incentive to bring autonomous electric vehicles to market quickly.But the second, simply put, is this:Some of the tech firms listed above have well established business models focused on content or data (e.g. paid search) and thus could potentially offer a shared, automated, electric transport service at a loss just to get access to the vast quantities of data and consumer time.

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The gig economy’s cash management issue

April 28, 2017

Over the last few years, labour practices in the gig economy have triggered a heated debate over where the boundaries of self-employed status should begin and end.The feeling among many critics is that corporations are exploiting the classification simply to save money by not providing the rights and benefits that come with traditional employment. This is contributing to a major power shift in the social contract that was hammered out during decades of strife between labour and capital, they say.But there is another thing possibly being missed in the debate as it stands. It relates to the role cash management plays in the gig economy.Take the taxi market in the UK as an example.Companies such as Uber like to claim they’re busting open an uncompetitive licensed taxi cartel, which operates against the interests of consumers.But in the case of the UK market, this is a slightly disingenuous claim. Black cabs have always been forced to compete with private hire and mini-cab rivals.So, one might ask, why is competition from Uber deemed intolerable from a labour and incumbent perspective but not from the private hire or mini-cab market?Two factors arguably dominate.The first, and most written about, relates to Uber’s scale and capital advantage.

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How to tap into that humanised pet market

April 26, 2017

It’s an investment case! Not just that, a decade-long opportunity!Yes really.From Citi’s David Driscoll and team on Tuesday:Huge Decade Long Opportunity Awaits Pet Food Category – Our deep dive analysis into the 164 million dog & cat, U.S. pet market shows huge opportunities await the pet food category driven by the humanization of pets, which in turn is driving premiumization of the category toward natural pet foods. Today, the pet food category stands at $28B, growing at a 5% CAGR over the past 10 years, driven by the $9B premium segment (32% of market, 18% of volume). Our analysis shows another decade of growth is in-store for the category, suggesting significant investment opportunities for investors.Dogs & Cats Get a Seat at the Table! – A recent survey shows that a huge, 43% of pets sleep on the bed, suggesting pet parents consider them part of the family! This humanization of the pets has driven the trend of pet food premiumization.It doesn’t stop there. Due to so-called pet humanisation trends, the analysts say the trade-up to premium and natural pet food will be ongoing over the coming decades and more. This in turn will facilitate more e-commerce (because shipping bulk heavy pet food before wasn’t cost effective from a postage and packaging cost before).We like pets as much as the next person. But the pet humanisation thesis strikes us as a bit Dr.

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Further reading

April 24, 2017

Elsewhere on Monday,– That time Uber was secretly identifying and tagging iPhones even after its app had been deleted and the devices erased.– Why there’s more to housing supply than just housing supply. – Why America is no longer one country. – Please, God, stop Chelsea Clinton from whatever she is doing!– On the nature of Silicon Valley Trump-administration sycophancy. – Is Tom Stuker the world’s most frequent flyer?– Donald Trump and the New York debt crisis.– Big data tech is leading us to a world of extreme differential pricing across all retail sectors.– Is this the end of venture capital as we know it?– The Goldman panopticon. – If Saudi’s future’s so bright, why can’t these banks find buyers?– Why robots might not be as labour disruptive as you think.– Further, further reading.

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.

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