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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

Bitcoin’s fake news problem

6 days ago

Bitcoin was designed to be self limiting and scarce so as to endow it with value. But the limitation wasn’t just applied to the number of coins in circulation, it was also applied to the number of transactions/data that can be processed in any given block interval.That latter constraint is now igniting a bitter schism in the community between those who feel the constraint must be removed to ensure bitcoin can scale universally and those who want it kept intact to allow cost structures to balance out organically.All will eventually be decided in a forking event.The forking is an opt-in software update called ‘Blockchain Unlimited’ intended to resolve bitcoin’s scaling limitation by expanding the amount of data that can be processed in any given block. To be successful it must be adopted by

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How pre-ordering coffee has turned into a nightmare

8 days ago

Pre-ordering coffee with a mobile app at Starbucks was supposed to make life easier for both the customer and the retailer.But, as Business Insider reports, the growing popularity of the option is causing untold chaos at branches all across Manhattan.From BI:Mobile ordering, which allows customers to order and pay on a smartphone before entering the store, has caused bottlenecks during busy hours at some of Starbucks’ most popular locations. The crowds of customers waiting for their lattes and Frappucinos has even started to discourage walk-in customers from entering stores.This, sadly, was predictable. Pre-ordering coffee at scale is and always was a bad idea.What’s strange is that at some point someone with a PowerPoint thought otherwise, and that he/she successfully convinced senior

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Further reading

8 days ago

Elsewhere on Monday,– Ryan Avent doesn’t believe the technological-driven boom is overblown. – Why economics is the wrongest profession.– Tales from Bongobongoland. – More trouble at Uber. – The ministry of Facebook truth is here.– The incredible true story of the real life Trading Places. – Pre-ordering your coffee on an app turns out to be a stupid idea.– Of cars and tariffs and Brexit.– Who’s really a bigger job destroyer, China or Amazon?– What’s behind the Somali pirate comeback?– Further, further reading.

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Why transaction laundering is turning into a huge financial blindspot

10 days ago

What we have discovered is that there are an additional 6,000-10,000 merchants that are out there online accepting cards and sending transaction data through one or more of the acquirer’s portfolios. The acquirer is processing 10,000 more merchants and they don’t know who they are. They can be anyone. The acquirer is completely unaware of the significance of these transactions.That’s from Ron Teicher, CEO of Evercompliant, an Israeli company that focused on transaction laundering detection and prevention.It is a startling statistic. Notably it suggests anti-money laundering (AML) and know-your-customer (KYC) regulations brought in post-crisis may have been entirely ineffective. And, of course, that criminals have an endless capacity to adapt.The scam is simple. Rather than setting up

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But, but… I thought Bitcoin was supposed to be cheap?

10 days ago

Total transaction fees in bitcoin are on the ascent, challenging a key claim put forth by bitcoin acolytes in the early days: that the bitcoin payments network could compete with the mainstream banking system on cost.Some are inclined to disagree this was ever the case. So here’s a quote from Nathaniel Popper’s seminal investigation into bitcoin mining in 2013, noting:Miners, though, are among the virtual-currency faithful, believing that Bitcoin will turn into a new, cheaper way of sending money around the world, leaving behind its current status as a largely speculative commodity.But, it must be stressed this cheapness rhetoric was everywhere at the time. Even Bill Gates was pushing the line that bitcoin’s best attribute was its cheapness. We disagreed, noting the costs were only being

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Further reading

11 days ago

Elsewhere on Friday,– Human drivers were forced to take control of Uber’s self-driving cars about once per mile driven. (FWIW California tests showed Tesla’s disengagement rate was once every three miles, while Google’s was once every 5,127 miles).– And remember that time Uber’s Kalanick said autonomous cars were crucial to the company’s very survival?– The dangerous precedent set by judicial attacks on Trump’s travel ban.– This isn’t the diverse newsroom you’re looking for. – Why banking leverage requirements are not enough.– Is the ECB considering a rate hike?– Healthcare, algorithms and DeepMind. – Pokemon Go is a mass demon summoning that’s destroying our reality.– Marc Andreessen talks tech and entertainment in the ‘era of mass customization‘.– The IMF looks at how inequality is

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China treads closer to a day of debt reckoning

11 days ago

The People’s Bank of China (PBoC) lifted borrowing costs in step with the Fed overnight. But the real question is: can China’s economy handle this sort of tightening at this stage in its cycle?Diana Choyleva of Enodo Economics (one of the few economists to accurately forecast the yuan’s depreciation) believes it can’t.On one hand the PBoC is lifting rates, on the other, it’s been engaged in the injection of a record amount of liquidity over the last year to prevent market rates from rising organically.China’s version of the Ted spread, meanwhile (the difference between the yield of three-month PBoC bill and the three-month interbank swap rate) has also been widening, implying the only reason market rates haven’t spiked in tandem is probably due to the compensatory liquidity coming into the

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Snap AV: Captain Sully on autonomous cars

12 days ago

The Drive has an exclusive interview with Captain Chesley Sullenberger (aka Captain Sully of Hudson miracle fame) on the topic of autonomous cars and safety.Whether you’re an investor, a techie or simply a car enthusiast, it’s worth your time.As the interview explains, aviation is way ahead of the auto sector with regards to automating human operator processes. And as might be expected, it’s not all been smooth sailing. Pilots as a consequence have an important perspective to share on the issue of automating ground vehicles.We won’t riff too much of the original interview, as you should head over to The Drive to read it directly.But three key take-aways we walked away with were:Sully is sceptical about any autonomous system which isn’t 100 per cent perfect because any hybrid system which

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Further reading

14 days ago

Elsewhere on Tuesday,– Bitcoin’s infrastructure is on the brink.– Who needs the real world when you’ve got alternate reality?– “State Street is basically telling buyers, ‘Hey, we’ll help you invest in your social causes, but only if we get to charge you an excessive markup.’”– The Somali pirates are back.– Why are cars locking us out?– Hello micro grids.– Boaty McBoatface sets sail to save the planet.– Everyone wants to know what’s happening at Brevan Howard.– Ford’s chairman has some views on flying cars.– Further, further reading.

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Snap AV: Introducing the Fintech ETF

14 days ago

Fintech is a stupid term. Always was and always will be.As we’ve pointed in the past, financial services and banking have never not been technological, hence using “fintech” to describe businesses which are both financial and technological has always been tautological. But fine, we rolled with it. The marketing and PR industry seemed intent on applying the portmanteau to the challenger and disruptor sector.But given that, it seems somewhat absurd for ETF provider Source to be launching a “Fintech ETF” that includes such prominent incumbents as Visa, Mastercard, Amex and Nasdaq.The ETF tracks the KBW Nasdaq Financial Technology Index, which was launched last July. And here’s what qualifies as “fintech” in the minds of the Source/KBW people:Performance to date explains the appeal of

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Further reading

18 days ago

Elsewhere on Friday,– Pimco is doing some painfully unsubtle rebranding.– The scale of the present wave of heroin addiction is unprecedented.– More men are taking women’s jobs.– Blockchain developer worries about blockchain’s ability to scale or stay secure.– Three thoughts from Peter Thiel.– How those ECB bond purchases are shaping up.– A closer look at the CIA’s meme division.– Where Travis Kalanick went wrong. – The internet of decay.– Further, further reading.

Copyright The Financial Times Limited 2017. All

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When capitalism wants to data mine you

18 days ago

The idea that data is becoming the new oil is not new. But it might not be getting shouted loud enough.This week, a Wikileaks data-dump asserted the CIA has weaponised commercial digital vulnerabilities to the extent it can hack into secured messages on your mobile phone, turn your Samsung TV against you and even assassinate you with your own car.Realistically, secret services have always had the means to do the above. But what makes today’s type of spying so much more sinister are the scales involved. Modern digital tools have dramatically reduced the cost of mass surveillance, and with that the cost-effectiveness of using it against all of us. Ironically, as per the vampire who must be invited in before he can suck the life out of us, it’s us who have opened the door to the snoopers.

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When OTC markets backfire, bitcoin edition

19 days ago

We all remember the days when commodity markets were over-the-counter rogue, right?These were fun days. Amazing days. Fondly remembered by the great and the good of the commodity trading world. Why? Because it was like the wild west. If you knew how to work the system, you could score big. Huge! These were great days.And how it worked was simple. If you weren’t prepared to be the manipulator, you would be the manipulated.Cornering, banging-the-close, futures abuse, secret trading cliques, trading research propaganda – you name it. All were viable strategies in the hunt for profit. Fundamentals? Meh. Fundamentals were for losers. Sad losers. The strong didn’t need to predict the price, they just needed to make the price.But by 2008 the saloon party was coming to an end. The real users of

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Why the day robots pay taxes is the day we become the tools

20 days ago

In an op-ed last weekend, Larry Summers rebutted Bill Gates’ assertion that robots should pay income tax, siding with our point that such a tax would be illogical from a productivity standpoint.If robot investments are being made, the presumption is, they’re being made due to the productivity advantages. If that’s the case, robots are wealth creators and taxing them destroys future wealth creation, shrinking the pie rather than enlarging it.As Summers noted:Indeed, it is common to point out that opening a country up to international trade is just like giving it access to a technology for transforming one good into another. The argument, then, is that since one surely would not regard such a technical change as bad, neither is trade, and so protectionism is bad. Mr Gates’ robot tax risks

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On faster payments and totalitarian systems

21 days ago

In keeping with the vogue for talking up distributed ledgers, Morten Linnemann Bech, Yuuki Shimizu and Paul Wong of the BIS have a go at doing the same in the bank’s latest quarterly review. Luckily, their analysis puts DLT in the context of real-time gross settlement (RTGS) and faster payment advances, and suggests wide-scale use is years away. This is useful.Sadly, in their optimism, the authors leave out the true scale of legal and social costs and challenges involved (which, as we’ve always, noted remain political, social and oligopolistic in nature). This is less useful.The piece is entitled “the quest for speed in payments”, so we figured we’d provide some related context of our own.The main barrier to instant settlement is our reluctance to live in a totalitarian system.Before the

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Where are the world’s dollar deposits coming from?

21 days ago

Ahead of last year’s US MMF reforms, concerns were mounting that non-US banks dependent on MMF dollar funds could end up struggling to locate alternative funding sources in time, triggering a dollar short squeeze.Nearly five months later we know that didn’t happen. Markets coped better than expected with the changes and not only that, seemingly found a new way to expand their dollar funding exposures to record highs.As this chart from Monday’s BIS’ quarterly review shows, on-balance sheet dollar funding of non-US banks rose to an all-time high in the third quarter of 2016:Here’s the explainer (our emphasis):Despite the loss of dollar funding owing to money market mutual fund (MMMF) reform in the United States, non-US banks’ aggregate US dollar funding rose to all-time highs in Q3 2016. In

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So turns out Target2 imbalances in 2012 WERE a big deal

21 days ago

Err. Awkward.TARGET2 (T2) balances are again on the rise. Since early 2015, the T2 balances of euro area national central banks (NCBs) have risen steadily, in some cases exceeding the levels seen during the sovereign debt crisis… However, unlike then, record T2 balances should be viewed as a benign by-product of the decentralised implementation of the asset purchase programme (APP) rather than as a sign of renewed capital flight.That’s from the latest BIS Quarterly Review. It’s awkward because, for those who can remember, back in 2012 an exceptionally heated debate erupted about the importance and/or non importance of growing Target2 extremes.On team “not important” was every mainstream analyst, economist, the ECB and most of civil Western society.On team “important/alarming”, meanwhile,

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Snap AV: Uber fights law, law wins

24 days ago

Via Bloomberg:Uber Technologies Inc. has lost a court ruling over planned English-language tests for its drivers in London, Bloomberg News reports.The company previously attacked rules by Transport for London that require drivers to have basic English skills.Uber earlier called the TfL rule irrational was said it would impact 40 percent of London’s private-hire chauffeurs.They say bad things happen in threes. At Uber, however, they appear to happen in many multiples of three. Did Travis Kalanick break a mirror or something? Related links: When life imitates art, Uber CEO edition – FT AlphavillePoor worker conditions power gig economy – FT Alphaville (YouTube)Mythbusting Uber – FT AlphavilleWhy Uber’s capital costs will creep ever higher – FT AlphavilleIf and when Uber drivers unionise… –

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When life imitates art, Uber CEO edition

26 days ago

Travis Kalanick, the adversarial CEO of Uber who sees every day as a fight for survival that justifies mercenary corporate tactics, has had to issue a company-circulated apology. It follows a dash-cam video taken by one of his drivers revealing him to be insensitive and patronising, and out of touch with the reality of the failings of his own business model. In the video, Kalanick is seen lecturing an Uber driver about the driver’s inability to meet financial commitments, which the driver blames on Uber not allowing drivers to charge high enough fees to cover basic costs like car loan payments, and for falsely luring them into taking these commitments on the notion they would be earning as much as $20 per hour.“Some people don’t like to take responsibility for their own shit. They blame

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With blockchain, bank cartels become bank alliances

27 days ago

Here’s Bloomberg’s Matt Levine on Tuesday riffing on the news that Microsoft, JP Morgan Chase and other corporate giants are “joining forces” to create the Enterprise Ethereum Alliance, a new kind of computing system based on the virtual currency network Ethereum, noting that as always, the idea is to take an open, un-permissioned blockchain system (Bitcoin, the Ethereum smart-contract network) and turn it into a closed ecosystem dominated by major banks:One objection to this would be: The original point of these blockchain innovations was to disintermediate the big banks and allow new competitors to spring up. Building a closed smart-contract blockchain run by banks defeats that purpose, and makes the blockchain just a boring upgrade to existing bank technology systems.But there’s another

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Further reading

29 days ago

Elsewhere on Monday,– Asset markets as banks.– Do real interest rates follow historical norms?– Has Silicon Valley lost the auto race?– When frozen yoghurt is deemed more valuable than union rights. – But hey Tesla was cash flow positive, BRIEFLY.– We spend an awful lot of time on social media and streaming sites.– We need to talk about the London Metal Exchange.– China wage fact of the day.– Farmers and fossil fuels.– The antifragile Oscar assessment.– Further, further reading.

Copyright The Financial Times Limited

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What’s the price of meaningfulness?

February 24, 2017

Yves Smith at Naked Capitalism in a preamble to a post by John Boik, a PhD in biomedical sciences from the University of Texas, Health Sciences Center in Houston — who makes the case the economy must look to create meaningful innovative jobs to give all of us a sense of purpose — sets out the following critique:I hate to be a nay-sayer about a well-intentioned post, and I expect some readers will disagree with my point of view vehemently. However, this article about the nature of work clearly implies that work is valuable only if it is perceived by the person doing it to be “creative”. But this is fallacious because “creative” is the new cool. It professes to be about finding meaningfulness in work in a quasi-Maslowean hierarchy of needs, that people should find some form of self

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Further reading

February 24, 2017

Elsewhere on Friday,– How a UFC fighter pulled off the biggest bank heist ever.– Social media is driving Americans insane.– In which the on-demand black-car-service-cum-taxi-operator-cum-mass-transit-company-cum-logistics-firm-cum-driverless-vehicle-fleet-cum-flying-car-service begins to buyback shares from employees. – Sugar taxes work.– How banks are sharing all your financial data with IBM, – Corporate espionage hits self-driving cars. – Did neoclassical economics corrupt business schools, corporations and the economy?– DeBeers has a big new diamond mind. – Now even the Fed’s worried that stock volatility is too low.– How to create an economy of meaning. – A ninth consecutive annual loss for RBS.– Zee online trolling unt zee fake newz veel not be tolerated by zee master intelligence.–

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AI’s inflation paradox

February 23, 2017

BCA Research’s weekly report tackles the strange situation wherein price inflation is paradoxically bringing about deflationary effects for European consumers due to there being no feedthrough from price inflation to wage inflation.Here’s the chart for the euro area, which reflects the paradox perfectly:In outlining the argument Dhaval Joshi, senior vice president, refers to an observation he made in an older report called The Superstar Economy: Part 2:“Many of the jobs that AI will destroy – like credit scoring, language translation, or managing a stock portfolio – are regarded as skilled, have limited human competition and are well-paid. Conversely, many of the jobs that AI cannot (yet) destroy – like cleaning, gardening, or cooking – are relatively unskilled and are low-paid.”It’s a

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Further reading

February 23, 2017

Elsewhere on Thursday,– Is CalPERS’ earning enough to justify its risk position?– The IMF is bridging research and reality when it comes to inequality.– Giant Iron Man statues are a thing.– Inside Uber’s aggressive, unrestrained workplace culture.– Do we deserve sexy time breaks?– A retort to the Economist on the free trade issue. – Fintech gets appropriated. – Apple and the innovation vs planned obsolescence cycle.– The world’s tiniest stock exchange. – ITV did an investigation on Deliveroo working standards.– Why we can’t repeat the Golden Age.– What’s happening beyond the coastal cities and elite college campuses in America.– Why we may have reached “peak renter”.

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The misguided logic of a robot income tax

February 22, 2017

Bill Gates thinks robots should pay income tax to reduce the negative impact they could have on human workplaces and jobs.As he told Quartz earlier this week:“It is really bad if people overall have more fear about what innovation is going to do than they have enthusiasm,” he said. “That means they won’t shape it for the positive things it can do. And, you know, taxation is certainly a better way to handle it than just banning some elements of it.”Except, does this assertion really make sense?One of the reasons business owners look to make capital investments is to increase productivity and with that profitability. As machinery and equipment take on more of the work humans would otherwise be forced to do, output increases, and we all become wealthier. Or so the logic goes.Either way, it’s

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Further reading

February 22, 2017

Elsewhere on Wednesday,– When financial car loan inclusion means total banking intrusion. – The four fallacies of warfare, according to Donald Trump’s new national security advisor.– Why facts don’t change our minds.– Who really picks the Oscar winners? – Remembering Ken Arrow.– Has the Bank of Japan solved the ‘Piketty problem’?– Some violent conflict risk stats from Taleb.– User research is overrated. – Don’t come to Switzerland.– The Brent contract is having a makeover to prevent its manipulation.– The dollar chart everyone is talking about.– Further, further reading.

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Why Morgan Stanley is talking down autonomous car expectations

January 12, 2017

Will 2017 be the year that digital utopianism finally gets constrained by material reality? Looks increasingly so.As the travails of Washio — the Uber for laundry which ceased operating in August— show, one of the biggest errors techies have been making in their rush to take over the world is overlooking the basic business fundamentals of the industries they’re trying to disrupt. Outlandish ideas and concepts come two-a-penny in Silicon Valley, but critics seem much less abundant, let alone those who understand basic unit cost mathematics. Minimum viable product approaches, meanwhile, have normalised the idea that assigning huge amounts of capital to wishy washy concepts rather than proven business models makes investment sense, even if it encourages destructive undercutting practices

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On the efficacy of WEF risk reports

January 11, 2017

Ahead of the annual WEF meeting in Davos, which starts next week, founder and executive chairman of the event Professor Klaus Schwab says in an FT advertisement on Wednesday that:Leadership today cannot be built on privilege, but only on sustained and sincere efforts to earn trust, and trust can only be earned by serving society in a manner that transcends personal interests and produces tangible results on the public’s core concerns.Davos meetings occur within a high security gated complex which incorporates five star hotels, champagne gatherings, piano bars, invite-only chalet after-parties, plus all the trappings which befit the modern incarnation of the Versailles court phenomenon: maximum security, maximum hierarchy, maximum hangers on and maximum servant class standing at the

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Deliveroo riders are lawyering up

January 9, 2017

In case you missed it, FT Alphaville spent some time working as a Deliveroo takeaway-food dispatcher late last year investigating worker conditions in the gig economy as well as the legal status of employment contracts. What we discovered was that Deliveroo operates a highly centralised dispatch system, imposes mandatory shifts upon workers, offers little in the way of minimum wage guarantees and requires workers to absorb all associated operating costs. The resulting video can be seen here:[embedded content]We bring this up because on Monday employment specialist law firm Leigh Day, which won a landmark employment tribunal case against Uber in October that could set a significant precedent for gig economy business models, announced it will be advising Deliveroo riders on potential legal

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