Monday , August 21 2017
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FT Alphaville

Thought for the weekend

Yo! I’m back at 80%, super pumped … we’ve got to start calling Elon on his S**t. I’m not on social media but let’s start “faketesla” and start giving physics lessons about stupid s**t Elon says like this: “we do not anticipate using lidar. Just to make it clear, lidar essentially is active photon generation in the visible spectrum — radar is active photon generation in essentially the radio spectrum. But lidar doesn’t penetrate intrusions so it does not penetrate rain, fog, dust and snow,...

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Goldman’s foray into cryptocurrency

Dan McCrum has the latest on Goldman Sach’s recent foray into investment advice on bitcoin. As he notes, they’re predicting the price will surge in a frenzy of speculation, before going on to halve — while simultaneously disclosing that the Goldman Sachs trading desk “may have a position in the products mentioned that is inconsistent with the views expressed in this material”.This, of course, follows exactly the pattern of events which led to the great commodities bubble. This too saw Goldman...

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The ‘finance franchise’ and fintech (Part 2)

In the first part of this two-parter we explained how the “financial franchise” theory of finance works, as thought up by Cornell lawyers, Robert Hockett and Saule Omarova in a new academic paper in the Cornell Law Review. (It should be noted, the theory isn’t necessarily unique as much as combinatory since it channels both Chartalist thinking and shadow banking collateralist thinking.)What’s really interesting, however, is how it applies to the budding fintech sector, which aims to increase...

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The ‘finance franchise’ and fintech (Part 1)

Lawyers often see the financial system differently to economists or financiers. In large part, this is because they look towards the legal frameworks and commitments which bind it together, rather than the theoretical economic actions or models which are supposed to underpin it. That’s is why to a lawyer (and perhaps also to more analytically minded people) banks don’t necessarily come across as institutions which intermediate the private sector’s scarce capital (loanable funds) to the wider...

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Some curious securities lending activity from Microsoft

Microsoft has bought lots of Treasuries with two to five years’ maturity — possibly directly at auctions.Now, the company reports it is accepting Treasuries as collateral for short-term loans, which is in itself rather unusual. What’s more, its collateral stash has grown significantly compared to last year. From its latest 10-K filing:As of June 30, 2017, collateral received under agreements for loaned securities was $3.7 billion, which was primarily comprised of U.S. government and agency...

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Evolution

LIVE from the intersection of gold bugs and crypto clownery (slightly redacted)…Dear Paul,In July you wrote an article about Daniel Harrison and Monkey Capital. I do not know if you continued to follow the story, but Daniel Harrison and his monkey capital crew, managed to get away with **************.It started off with the ICO on August 8th, COEVAL holders, which has also crashed by 99% from its highs, were going to be given 10,000 $MNY coins. Part of the 650 million coins of the 1 BILLION...

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Michael Pettis on current accounts and the Chinese economy (Alphachat transcript)

We received several requests for a transcript of our recent Alphachat episode with Michael Pettis. We produce it below, or you can also CLICK HERE for a pdf version.Alphachat is available on Acast, iTunes and Stitcher. PART 1Cardiff Garcia So here’s where I want to start, and I’m taking a bit of a risk here that all of our listeners are going to flee, because we need to begin with accounting identities and why they matter so much to the framework that you talk about in The Great Rebalancing....

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Podcast: Lee Buchheit and Mitu Gulati on Venezuela’s debt

[embedded content]Alphachat is available on Acast, iTunes and Stitcher.This week, the FT’s US markets editor Robin Wigglesworth interviews sovereign debt experts Lee Buchheit and Mitu Gulati about their recent paper, How to Restructure Venezuelan Debt, after starting the show with a brief update on the ongoing economic and humanitarian catastrophe in Venezuela.As further reading and listening, Robin also recommends Part 1 and Part 2 of a series by Anna Gelpern, a recent special report from...

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Enforcing new Venezuelan public debt instruments (Maduro bonds, part 2)

By Lee C Buchheit and Mitu Gulati of Cleary Gottlieb Steen & Hamilton (New York) and Duke University, respectively. These authors have recently written on “How to Restructure Venezuelan Debt”. This note is written in response to questions that the authors received regarding that piece and a subsequent post by Gulati on Alphaville titled “Maduro bonds”.The decision of President Nicolas Maduro to proceed with the election of a Constituent Assembly in Venezuela on July 30, 2017 kindled a...

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