Monday , October 14 2019
Home / FT Alphaville

FT Alphaville

Markets Live EXCLUSIVE ft. ‘tabloid sensation’ Jemima Kelly

It was the FT which first brought you the sensational story of Jemima Kelly’s flirtation with a criminal record because of an unfortunate sudden-battery-drain incident on a bus. FT readers, it turns out, felt very passionately that Kelly for the most part had brought it on herself. No sympathy.But the story’s now hit the tabloids and opinion is divided. Daily Mail commenter juliearandall, Oxford, United Kingdom says:Don't blame the tech! It's HER fault. In her shoes here's what I would...

Read More »

How RTGS killed liquidity: US tri-party repo edition

Daniela Gabor is a professor of economics and macrofinance at the University of West of England, Bristol. In this post she explains how the pressures placed upon intraday liquidity by real-time gross settlement systems led to the creation of the tri-party repo market, which itself proved a central point of failure during the global financial crisis. In a recent post, Izabella Kaminska argued that Real Time Gross Settlement (RTGS) changed the way in which central banks managed systemic...

Read More »

Structured finance meets negative rates

Over the summer, we had a brief look at one corner of the bond market that won’t go negative: CLOs.Senior tranches of collateralised loan obligations are typically priced at a spread over a benchmark, such as euribor. But many of them also include so-called “euribor floors”, which mean that the benchmark cannot fall below zero.Three-month euribor is currently -0.42 per cent. If the tranche is structured to floor it at zero, that’s an additional 42 basis points of income in the spread,...

Read More »

GMO: on the comeback trail

Gallons of ink has been spilled on the question of when value-investing -- the practice of buying treasure priced like trash -- will begin to outperform the market after a torrid decade of returns. To add to the literature is Grantham Mayo van Otterloo’s (GMO) Ben Inker, Head of Asset Allocation at the storied investment firm, who addressed the potential for a reversal in its third quarter letter, released Thursday.In short, the current market reminds him of 2000 -- when the Nasdaq bubble...

Read More »

China VIEs: the scale of exposure

In a post Wednesday, Alphaville took a look at the Variable Interest Entity structure that allows Chinese companies to skirt state restrictions on foreign investment, and to list their securities abroad. We posited that this structure, which is technically illegal in China, could be used as a threat if the US sought to impose capital controls on the People’s Republic.During our research we couldn’t quite pin down a definite dollar number for the level of exposure investors have to these...

Read More »

Uber’s UK VAT liability confirmed

Earlier this week Uber London Ltd filed its full accounts up until December 2018 at Companies House. The big news wasn’t that the division made a relatively meagre profit of £5.1m. (The profit is hardly indicative of anything due to the group’s structural complexity.)It was Note 13 which recounted the following about Uber London’s contingent liabilities:  The most newsworthy part was arguably this one: “the Uber Group is involved in an ongoing dialog with HMRC, which is seeking to classify...

Read More »

When fintech goes (disastrously) wrong

We at Alphaville have a reputation for being, let’s say, a bit wary when it comes to financial innovation. Some might call our particular brand of wariness Luddism, but we prefer to think of it as healthy scepticism (with a dash of FUD-peddling thrown in now and again for good measure). You might even have seen this cartoon, from webcomic Cyanide and Happiness, via Sam Bowman (we can neither confirm nor deny whether this accurately reflects the hiring process at AV Towers):  So you...

Read More »

Further reading

Elsewhere on Thursday:-- Chinese urban elite transformation.-- Ronan Farrow strikes again.-- Perry Anderson on Crashed.-- Five lessons from history.-- The lie about music piracy.-- The US billionaire tax rate.-- Reporting economics, from Burning Man.-- No, we don’t need a blockchain for that.-- The premier league kit wars....

Read More »

Snap AV: The Gatsby indicator

This landed in our inboxes a few moments ago -- from Deutsche Bank’s chart wizard, Torsten Sløk: That’s the Gini coefficient -- a statical measure which shows the distribution of income across the population. As a guide: 0 equals perfect equality, and 1 equals perfect inequality.The implication from the chart above is obvious: in the past 50 years never has such a small slice of the American population harvested so much of the income. Note, this measure doesn’t capture wealth distribution...

Read More »