Friday , November 24 2017
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Kadhim Shubber

Kadhim Shubber

He is a freelance journalist who first bought bitcoins so that he could buy a beer at The Pembury Tavern, Hackney’s bitcoin pub. He has reported for Slate, Wired, The Daily Telegraph, The Sunday Times and Ampp3d. He is currently studying for a Masters in Journalism at City University London.

Articles by Kadhim Shubber

The former CEO of fallen tech unicorn Ve Interactive has filed for bankruptcy

15 hours ago

Just over a year ago, David Brown and Martin King said they were worth almost half a billion pounds between them. Now they’re bankrupt, or will be soon enough.On Monday and Tuesday, Mr King, 55, was at the High Court in London to face a claim against the pair for millions of pounds of unpaid debts owed by Ve Interactive, the once highly valued startup they ran until March this year. He said they had filed for bankruptcy earlier this month “when we ran out of any other options”.His co-defendant and long-time business partner, the man who was chief executive of Ve for eight years, was nowhere to be seen. Mr Brown, 45, was apparently at his home near Bilbao, Spain, with gastroenteritis and couldn’t afford the trip to London. “He’s without funds to be able to travel at the moment,” said Mr

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Further reading

20 hours ago

Elsewhere on Thursday,— Are negative nominal interest rates expansionary?— The mortgage rate conundrum.— CoCo issuance and bank fragility.— The Eurozone’s fiscal version of the impossible trinity?— Why a leading political theorist thinks civilization is overrated.— This is the intel Trump shared with the Russians back in May.— YouTube is addressing its massive child exploitation problem.— Bitcoin mining now consumes more electricity than 159 countries including Ireland & most countries in Africa.— Inside Europe’s first Bitcoin stripclub.— Further listening: how to save the EU.

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Further reading

2 days ago

Elsewhere on Wednesday,— Regulator against the machine: artificial intelligence in healthcare.— Primary healthcare, disruptive innovation, and the digital gold rush.— Technical change and house prices.— Money as Infrastructure.— In 2017, UK water companies still rely on “magic”.— Reports of the death of German stability are greatly exaggerated— Why I’ve had enough of George Orwell.— America’s 2020 census might be put in the hands of an inexperienced professor who wrote that ‘Competitive Elections are Bad for America.’— Here are the White House visitor records the Trump Administration didn’t want you to see.— Economic constraints on Russian foreign policy, and what they mean for the United States.— Facebook (still) letting housing advertisers exclude users by race.— Your cartoonishly

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Spending small on artificial intelligence

4 days ago

The UK government’s odd twice-yearly press conference about its spending plans is nearly upon us, and some feel-good morsels of information have been trailed ahead of time. Philip Hammond, the chancellor, is apparently trying to burnish his tech credentials, no small task for a man whose predecessor not so much embraced the tech community as fell prone before it in grovelling adulation.According to the BBC, Hammond will announce regulatory changes on Wednesday that will allow the testing of driverless cars on UK roads:Chancellor Philip Hammond told the BBC the objective was to have “fully driverless cars” without a safety attendant on board in use by 2021.“Some would say that’s a bold move, but we have to embrace these technologies if we want the UK to lead the next industrial revolution,”

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Further reading

4 days ago

Elsewhere on Monday,— “Uncertainty” affects the economy less than people believe, and mainly does so through the financial system.— There is no inflation puzzle.— The Industrial Revolution happened in England because… Henry VIII dissolved the monasteries.— Why officials in Labour government pushed ‘dash for diesel’— ‘Wolf of Wall Street’-style ‘pump and dump’ scams plague cryptocurrency markets.— The Clintons held the Democratic Party hostage for two decades.— Inside the first church of artificial intelligence.— All the ways and reasons the New York subway sucks.

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Further reading

8 days ago

Elsewhere on Thursday,— The Final Days of a Tax Haven.— Multinationals turn from ‘Double Irish’ to ‘Single Malt’ to avoid tax in Ireland.— What shall become of Northern Ireland? The economic challenges of Britain’s weakest region.— A bit of history on the “minor irritations and atavistic animosities” of the old border between Northern Ireland and the Republic.— Productivity growth and real interest rates in the long run.— The “cackling cartoon villain” defense of DSGE.— A British tabloid political journalist inadvertently reveals how his newspaper does business.— Bill Gates’ smart city in Arizona is not smart, not a city, and has little to do with Bill Gates.— The more education Republicans have, the less they tend to believe in climate change.— You’ll never be as happy as Treasury

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Further reading

9 days ago

Elsewhere on Wednesday,— Stock market valuation and the macroeconomy.— Can central banks talk too much?— Vice asked drunk eurocrats what they think of Brexit.— Northern Ireland’s economy has a lot more to lose from a hard Brexit than the Republic’s.— Krugman on tax cuts and the trade deficit.— Bill Clinton: A Reckoning.— What did 17th century food taste like?

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Further reading

10 days ago

Elsewhere on Tuesday,— Zucman: Why high tax countries let tax havens flourish.— Global real interest rates since 1311: Renaissance roots and rapid reversals.— ECB: The international bank lending channel of unconventional monetary policy.— The Native American experience of casino-funded basic income.— The ‘citizens of somewhere’ are more likely to be pro-EU.— Rethinking Brexit and nationalism.— Why the Saudi “purge” is not what it seems to be.— Stranger Things 2: A pointed comment on the Department of Energy’s nuclear history and future?— What can free-market economic theory teach us about Rand Paul’s dispute with his neighbor?— An update on Peter Thiel’s plans to build a new nation offshore.— Secret Raqqa IS withdrawal deal revealed.— Trump supporters say the darndest things, redux.

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A crushing blow to peer-to-peer lending dreams

11 days ago

Economists at the Cleveland Fed have published an excoriating bit of research that knocks down three of the key claims of “peer-to-peer” lending advocates.We haven’t looked at US P2P lending in a while — it’s more commonly called marketplace, or online lending these days* — but the important thing to remember is that the sector has long been dominated by institutional loan investors, has historically relied on direct mail marketing for much of its growth and has always argued that it helps consumers consolidate their debts and get on a better financial footing.It’s that last part at which Yuliya Demyanyk, Elena Loutskina, and Daniel Kolliner take aim. In their paper published last week, the researchers use credit bureau data to construct a sample of 90,000 people who took out a

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Further reading

11 days ago

Elsewhere on Monday,— Was the first Industrial Revolution a conjuncture in the history of the world economy?— The Soviet economy, 1917-1991: Its life and afterlife.— At Tesla’s solar panel factory, a new reality sets in.— Apple should shrink its finance arm before it goes bananas.— Björk’s cryptocurrency album project dissected.— Insights into sexism: male status and performance moderates female-directed hostile and amicable behaviour.— Further watching: Jeff Goldblum rates tattoos of Jeff Goldblum.— Further listening: The hotel at the center of the world.

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‘If you follow us you will make money’: how bitcoin is marketed to the masses

21 days ago

Sunny Ahonsi is no stranger to get rich quick schemes. The 57-year-old boasts on LinkedIn about his involvement with companies that have been criticised by regulators across Europe and called a Ponzi scheme by the Belgian financial authority.Now he has found a new dream to sell: bitcoin. Last Thursday, Mr Ahonsi (pictured below) was touting the promise of cryptocurrencies to a small audience of mostly middle-aged Londoners at the Aldgate branch of WeWork, the $20bn office space startup.“Ninety-five per cent of people you’re going to talk to about cryptocurrency, they say to you it’s a bubble. Correct?” he said as the 30 or so men and women packed into a small, hot room on the fourth floor nodded in agreement. In fact, he declared, “the bubble will never burst.”Seven years ago, bitcoin was

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This is the dumbest thing we’ve seen in a long time. When’s the crash?

28 days ago

On-Line PLC is a little AIM-listed business whose website looks like this:Its primary asset is a stake in ADVFN, a markets data site that looks like this:Yesterday, On-Line PLC said it would be adding the word ‘Blockchain’ to its name. And now its shares look like this:thisisfine.jpg

This is nuts, when’s the tantrum?
This is nuts, when’s the valuation-gymnastics crash?
This is nuts. When’s the

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Machine learning the market

29 days ago

SocGen has a fun note out this morning looking at how machine learning algorithms perform against more basic stock picking strategies. Spoiler: they mostly win, but then lose badly over the past two years:The various coloured bars reflect the performance of different approaches to machine learning using a dataset of 80 fundamental and technical factors about an average of 1,000 listed stocks from December 1989 through to September 2017.The stocks are taken from the FTSE Developed World index, but exclude financial companies. The black “All Factors” benchmark model simply uses an equal-weighted average of the factors: “i.e. long the top quintile and short the bottom quintile of stocks by their average score across all 80 factors”.The clear winner above is the non-linear support vector

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Tricks of the venture capital trade: buy low, before a funding round

October 25, 2017

A good way to make money is to buy things for less than they’re worth. The problem is persuading the person on the other end of the trade to do the opposite.Earlier this year, the British venture capital firm Seedcamp was close to securing money for its latest fund from the European Investment Fund. Unfortunately, the UK issued its official notification that it was leaving the European Union, and that nixed the deal as the EIF effectively paused its activities in Britain. (We’ve written about that whole saga here, here and here.)But all was not lost. This month, Draper Esprit, a listed venture firm, announced that it would back Seedcamp, helping plug the gap left by the EIF. And the ‘aid’ did not stop there. Today, Draper and Seedcamp revealed that the former would buy up the latter’s

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How much is Saudi Arabia’s Public Investment Fund worth?

October 23, 2017

…errrrr, more or less, give or take $100bn, around abouts, *shrug?“More than $200 billion and less than $300 billion,” said one senior PIF official earlier this year.“One-hundred-eighty to $200 billion,” estimated a government minister involved in PIF oversight.A person briefed by PIF said the fund recently determined a “fairly definitive” value, but declined to detail it.Some holdings lacked Western governance standards, says a person briefed on a PIF audit by Ernst & Young. “Although they do have audited financial statements, they’re not necessarily the right figures,” this person says.Via WSJ.

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Can Brewdog keep on delivering?

October 23, 2017

Scottish brewer Brewdog has shown a remarkable ability to raise money from the public. Over the past eight years, it has raised £41m from some 50,000 shareholders across the world.Now it is coming to the market again for £10-50m to fuel its ambitious growth plans overseas at a punchy £1.7bn valuation, which would make Brewdog the most valuable consumer-facing “unicorn” in the UK, ahead of Deliveroo.The fundraise comes just five months after Brewdog revealed a £213m investment from TSG Consumer Partners, the American private equity firm, its first and so far only institutional investor. That deal valued the brewer at £1bn and allowed James Watt and Martin Dickie to sell £110m of their own shares, with the rest of TSG’s investment going into the company.The new valuation is 70 per cent

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Trouble in ICO paradise

October 19, 2017

Back in July, we highlighted a little blockchain startup called Tezos, which had raised $230m worth of cryptocurrency in an initial coin offering. If you recall, it had big ideas about persuading “a small nation-state” to accept their Tezos token as its official state currency.Now a dispute has reportedly bubbled up between Arthur and Kathleen Breitman, the startup’s founders, and Johann Gevers, the president of the Swiss foundation set up to take the project forward. Here’s Reuters:Under Swiss law, the foundation is supposed to be independent. It holds all of the funds raised, which have mushroomed to more than $400 million in value because the contributions were made in two cryptocurrencies – bitcoin and ether – that have appreciated sharply. But the Breitmans, who still control the

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Zopa: more risk, same reward

October 18, 2017

A foundational belief of capitalism is that risk deserves reward. If you take big risks, you should get big rewards. If you take smaller risks, your rewards should be smaller too.In the world of credit, this belief materialises in a rather straightforward way. Lenders who give money to low-risk borrowers charge a relatively low interest rate, and make relatively low net returns after the relatively small amount of bad debts are accounted for. Lenders to high-risk borrowers charge higher interest rates to compensate for the cost of bad debts. They also give themselves a “risk premium” on top to cover the danger they misjudged future losses.Zopa, the world’s oldest “peer-to-peer” lender, has long focused on low-risk borrowers. The weighted average interest rate the 12-year-old company

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An update on Harry Redknapp’s favourite cryptocurrency

October 17, 2017

You may not have realised, but the past seven days have been very special for Electroneum, the cryptocurrency favoured by football manager Harry Redknapp.They have been so very special that founder Richard Ells dubbed the period “Most Exciting Electroneum Week!” in an email to “contributors”:It’s been less than a week since I last emailed, but WHAT a week!We’ve gone from 60,000 contributors a week ago to a whopping 130,000+ and we are getting an additional 1000 per hour as I type!Electroneum has really struck a chord with the public and the excitement is overwhelming!According to the message, Electroneum’s burgeoning popularity was helped by Redknapp’s tweet last week, and the news reports that followed it. Our take did not make the cut, believe it or not.Now, Ells takes a moment to

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Congratulations on your sudden interest in cryptocurrencies, Harry Redknapp

October 12, 2017

Just a month ago, Harry Redknapp was sacked as manager of Birmingham City football club. But he’s already moved on to new and more exciting things:Proper excited about Mobile Cryptocurrency! I’m in, get involved! https://t.co/mvHfi14Z2G @electroneum #Electroneum— Harry Redknapp (@Redknapp) October 12, 2017You might have your doubts about investing in cryptocurrencies, but if a man who has spent his entire life thinking about football can’t persuade you to speculate on a risky financial scheme then nothing will.And what a scheme it is! Electroneum is a “mobile cryptocurrency” and the brainchild of Richard Ells, whose past experience includes SiteWizard, whose services include web design, and Retortal, which makes a social media management tool and is apparently valued at over $50m. (Who

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HelloFresh’s “active” customers

October 10, 2017

The distinction between an active or inactive customer is more art than science. There is no clear dividing line and companies tend to use whatever metric or definition makes their numbers look as good as possible. Twitter, for example, declines to disclose the number of people who use the app every day, presumably because the number wouldn’t impress.HelloFresh, the loss-making meal kit delivery startup, on Tuesday announced its plan to raise up to €300m with an initial public offering. It courageously comes hot on the heels of its American rival Blue Apron’s disastrous foray onto the public markets in June — Blue Apron shares have dropped 48 per cent from their sale price.The announcement notes that “with about 1.3 million active customers, HelloFresh is the largest player worldwide”, but

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Further reading

October 6, 2017

Elsewhere on Friday,— This story is wild:Here’s how the alleged scam worked. JPMorgan moved to forgive the mortgages of tens of thousands of homeowners; the feds, in turn, credited these canceled loans against the penalties due under the 2012 and 2013 settlements. But here’s the rub: In many instances, JPMorgan was forgiving loans on properties it no longer owned.— Here’s an investigation into Breitbart, replete with a cache of internal emails, that shows the central role it has played in fuelling white nationalism and the alt-right.— Puerto Rico’s economic disaster was made in Washington: “It’s impossible to understand Puerto Rico’s plight without understanding how it was shaped by a tax-policy experiment gone awry.”— Good news! “Risks within the UK banking system from one such contagion

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Accrol gets flushed away

October 5, 2017

Toilet roll maker Accrol has temporarily suspended its shares just over a year after slipping on to AIM with the help of Zeus Capital.Despite the bullishness of its private equity backer NorthEdge Capital in the face of Brexit, the company is “currently experiencing more challenging trading conditions” that are wiping away its earnings.One of the more interesting challenges the company has revealed is this:The Board has recently been advised that a Health and Safety incident, which occurred prior to the Company’s AIM IPO, may now result in a more significant fine being imposed by the Health and Safety Executive (HSE) than was previously anticipated. Whilst this is not expected to impact on trading, based on advice received by the Company’s legal advisers, any resulting fine may have a

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Further reading

October 5, 2017

Elsewhere on Thursday,— Whatever happened to normalization?— Bit late on this, but Pepsi’s CEO doesn’t sleep:I struggle to sleep, so all night the email pings, and I’ll get up every hour and answer. There are people who thrive on it, and people who struggle with this workload. And I thrive on it still. I’m used to this pace of working at this point. That’s what I like.— Excess Funding Capacity in Tri-Party Repo.— “As much as Spaniards cherish their hard-fought constitution, it is time to change it”— “Why has information technology (IT) equipment investment in the National income and Product Accounts (NIPAs) been so weak since 2007 at the same time that financial reports indicate massive increases in capital expenditures by IT service companies”— A cheerful update on America today:In April,

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Further reading

October 4, 2017

Elsewhere on Wednesday,— Branko Milanovic chooses his favourite books on economic inequality between nations and peoples.— A very long post on labour repression:At the beginning of the 20th century, the Indian and the Japanese textile industries had similar levels of wages and productivity, and both were exporting to global markets. But by the 1930s, Japan had surpassed the UK to become the world’s dominant exporter of textiles; while the Indian industry withdrew behind the tariff protection of the British Raj. Technology, human capital, and industrial policy were minor determinants of this divergence, or at least they mattered conditional on labour relations.— Kevin Warsh would be a strange Fed Chair pick for a president who claims to be obsessed with jobs.— Coin-flipping shows how we

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What’s up with Deliveroo’s share options?

October 3, 2017

The most recent reports of Deliveroo’s valuation place it at around $2bn, which is good going for a five-year-old company. Naturally the investors who have bought shares at that price are expecting it to go even higher in the near future. After all, the venture capital game is about big bets and big profits. If Deliveroo meets the expectations of its backers, the $2bn mark should be just a quaint little step on its journey to massive value.But when you look at the food delivery startup’s accounts, there is a surprising conservatism when it comes to its future prospects. The way Deliveroo calculates the value of the share options it gives to employees suggests the company is not expecting its share price to change very much at all over the next 10 years. The share price volatility it

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The next frontier is… socks

October 3, 2017

From Bloomberg’s Fully Charged newsletter:Hi everyone, it’s Sarah. As part of my beat covering venture capital, earlier this year I stumbled across what could be the least likely venture-backed company. It’s a sock maker, Stance, and the subject of this week’s Decrypted episode.Now the go-to hosiery of celebrities ranging from Rihanna to Jay-Z, Stance is also beloved by venture capitalists. Backers like August Capital, Kleiner Perkins Caufield & Byers, and Shasta Ventures have poured $110 million into the company.The VCs say they’re betting on the startup’s founder Jeff Kearl and his vision for the company, which he says has the power to “disrupt” the sock industry. It may come as a surprise that such a lowly industry needs disrupting—but that’s the point, says Kearl. He believes socks are

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A canary in the P2P coal mine?

October 3, 2017

How are British “peer-to-peer” lenders doing? This chart from AltFi Data, which tracks P2P loan performance, should give you an idea:The companies represented in the data are Zopa, Funding Circle — two of the three biggest players — and MarketInvoice. There’s a clear and sustained fall in net returns and increase in net loss starting in 2016 and continuing through 2017.Interestingly, the increase in gross yields over the same period doesn’t seem to have boosted returns.Related link:UK peer-to-peer lending is about to face its toughest test since the sector was born — Business Insider

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What’s £38m of “other expenses” between friends?

October 2, 2017

A fun thought experiment is to imagine what the American startup scene would look like if private companies were subject to the same corporate disclosure requirements as they are in the UK. Imagine the conversations about Uber, a behemoth with billions in revenue and billions in losses, if it were forced to file its full accounts publicly each year. A journalist can only dream.Thankfully in Britain we don’t have to, though even here the transparency has its limits. Take Funding Circle, for example, one of the UK’s “unicorns”, meaning it has a valuation of over $1bn. The “peer-to-peer” lender to small businesses recently emailed reporters a copy of its 2016 accounts in advance of them appearing at Companies House.The accounts showed sales up 59 per cent to £50.1m, while its operating loss

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Further reading

October 2, 2017

Elsewhere on Monday,— Let’s knock down some stock market myths, including: Low volume rallies spell trouble for stocks; There is tons of cash on the sidelines; and Bonds always lose money when interest rates rise.— And an economic one: The price level does not exist.— And also that idea sentiment analysis of tweets could help traders. A new study finds “no evidence that our measures of Twitter mood aid in predicting the stock market”:Congruously, the hedge fund set up in late 2010 to implement the Twitter mood strategy, Derwent Capital Markets, failed and closed in early 2012.— Take whatever you will from the timing of this leak, but apparently Trump is actively and knowingly cultivating a ‘crazy guy’ image as a foreign policy tactic.— Congress can give every American a pony, if it breeds

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