What you need to know on Wall Street today
What you need to know on Wall Street today
Top Secret? Bitcoin Scaling Plan Segwit2x Leaves More Questions Than Answers
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CoinDesk, 1/1/0001 12:00 AM PST While SegWit2x has significant support, according to some in the bitcoin community, the group is closing off software development to opposition. |
The head of stock deals at Goldman Sachs is retiring
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Business Insider, 1/1/0001 12:00 AM PST
Stephen Pierce, the global head of equity capital markets at Goldman Sachs, is retiring after 31 years at the bank, according to Alex Barinka at Bloomberg. Pierce will stay on as an advisory director, and Goldman Sachs isn't planning to replace him, according to the report. Pierce has ambitious plans for his retirement: he hopes to become a black belt in kung fu, get certified in emergency medical services, and ski terrain only accessible by helicopter, according to the Bloomberg report. Goldman Sachs ranks third for equity capital markets revenues globally so far this year, according to Dealogic, with $506 million in fees. |
A petition on Change.org is calling on Amazon to accept bitcoin 'ASAP' (AMZN)
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Business Insider, 1/1/0001 12:00 AM PST
Bitcoin has been soaring to new heights, and now folks on Change.org are calling on e-commerce juggernaut Amazon to accept the cryptocurrency as payment "ASAP." Since March 23, bitcoin has increased 159%, from a little over $1,000 to $2,700. At least 2,100 petitioners on Change.org want Amazon to join companies such as Microsoft and Overstock in accepting bitcoin as a form of payment. They also want the company to accept Litecoin, another cryptocurrency. The petition cites the following reasons as to why it would be a good idea for Amazon to accept the two cryptocurrencies:
But Amazon might be skeptical about bitcoin, and for good reason. For starters, cryptocurrencies are known for their constant fluctuations in its price. Ethereum, another cryptocurrency, flash crashed on Wednesday. It tumbled from about $296 to a low of $13 in a matter of minutes. Many people think a price correction is on the horizon for bitcoin. Mark Cuban, the billionaire investor, took to twitter on June 6 to say he thought there was a bitcoin "bubble."
Additionally, some don't view bitcoin and other cryptocurrencies as viable. Morgan Stanley, for instance, recently released research in which they cited reasons why some merchants don't think cryptocurrencies have a bright future. Here's Morgan Stanley: Most regulators and investors view cryptocurrencies more as assets than actual currencies. Their values are too volatile and too hard to actually use for payment for most to consider them currencies. Our conversations with some merchants indicate that, while cryptocurrencies might actually be attractive for them to operate their businesses, they find that the cryptocurrencies are far too volatile to be used. Other obstacles to bitcoin's future, according to the bank, include the Chinese crackdown on mining bitcoin and declining trading volumes. SEE ALSO: Bitcoin is going wild — here's what the cryptocurrency is all about Join the conversation about this story » NOW WATCH: HENRY BLODGET: This chart explains everything that's wrong with the economy today |
A petition on Change.org is calling on Amazon to accept bitcoin 'ASAP' (AMZN)
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Business Insider, 1/1/0001 12:00 AM PST
Bitcoin has been soaring to new heights, and now folks on Change.org are calling on e-commerce juggernaut Amazon to accept the cryptocurrency as payment "ASAP." Since March 23, bitcoin has increased 159%, from a little over $1,000 to $2,700. At least 2,100 petitioners on Change.org want Amazon to join companies such as Microsoft and Overstock in accepting bitcoin as a form of payment. They also want the company to accept Litecoin, another cryptocurrency. The petition cites the following reasons as to why it would be a good idea for Amazon to accept the two cryptocurrencies:
But Amazon might be skeptical about bitcoin, and for good reason. For starters, cryptocurrencies are known for their constant fluctuations in its price. Ethereum, another cryptocurrency, flash crashed on Wednesday. It tumbled from about $296 to a low of $13 in a matter of minutes. Many people think a price correction is on the horizon for bitcoin. Mark Cuban, the billionaire investor, took to twitter on June 6 to say he thought there was a bitcoin "bubble."
Additionally, some don't view bitcoin and other cryptocurrencies as viable. Morgan Stanley, for instance, recently released research in which they cited reasons why some merchants don't think cryptocurrencies have a bright future. Here's Morgan Stanley: Most regulators and investors view cryptocurrencies more as assets than actual currencies. Their values are too volatile and too hard to actually use for payment for most to consider them currencies. Our conversations with some merchants indicate that, while cryptocurrencies might actually be attractive for them to operate their businesses, they find that the cryptocurrencies are far too volatile to be used. Other obstacles to bitcoin's future, according to the bank, include the Chinese crackdown on mining bitcoin and declining trading volumes. SEE ALSO: Bitcoin is going wild — here's what the cryptocurrency is all about Join the conversation about this story » NOW WATCH: HENRY BLODGET: This chart explains everything that's wrong with the economy today |
Jeff Bezos just handed corporate America a $50 billion question
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Business Insider, 1/1/0001 12:00 AM PST
If you needed any further proof that Amazon is shaking the US commercial landscape to it's very core, look no further than the past week. Amazon's $13.7 billion deal for Whole Foods has had a ripple effect across sectors. The grocery industry, a $800 billion addressable market in the US according to Goldman Sachs, has a low level of ecommerce penetration. That could be about to change. Traditional grocery store players like Kroger, Costco and Target saw their stocks get battered after the deal was announced. The effects haven't been contained to the grocery aisles, either. United Natural Foods, the primary distributor for Whole Foods, also took a hit. And the pharmaceutical supply chain took a big hit too. Then, it emerged that Amazon could enter into a partnership with the world's biggest athletic apparel brand, hitting the likes of Dick's, Under Armour, and Foot Locker. In short, Amazon is rapidly putting its stamp on industries far and wide. Capable of creating or erasing billions of dollars of market value with even the smallest action, the tech titan has investors and corporate employees alike shaking in their boots. The rise of Amazon hints at a broader question that looms over executives in traditional consumer-facing industries. If a tech giant can in one fell swoop land a deal and emerge as a key player in an $800 billion industry, what's stopping a new entrant doing the same in my industry? "It's been a while since we've seen such an aftershock from an M&A transaction," said Marc-Anthony Hourihan, UBS' cohead of M&A in the Americas. "These ripples seem to be going in much broader sectors." Amazon's acquisition of Whole Foods, combined with reports that the company will start directly selling Nike products, has helped the tech giant add $18 billion in market cap in the past week. In contrast, $31 billion in competitor market cap has been wiped out in the same period. Add to the two sums together and you have an almost $50 billion gap. Walmart and Costco have been hit the hardest, both losing more than $8 billion in value since the Whole Foods deal was announced on June 16. Meanwhile, Whole Foods stock has been trading above Amazon's offer of $42 a share, signaling that investors believe a bidding war could emerge and drive up the final price for Whole Foods. Competitors like Target, Costco, and Kroger have been rumored as potential suitors, and they'd do anything to make this deal harder for Amazon, according to Barclays analyst Karen Short. But according to JPMorgan, Walmart is the only retailer with a legitimate shot of entering the fray. Meanwhile, Morgan Stanley said in a research note that the retail drug space could experience a wave of M&A action as companies try to outflank Amazon. "Competition across the supply chain continues to increase as Amazon inches closer to entering drug retail on the heels of the Whole Foods acquisition," the analysts said, highlighting CVS and Express Scripts as companies with strong merger opportunities. Dick's, Under Armour, Foot Locker have dropped about $300 million in market value since Goldman Sachs predicted Amazon would start selling Nike, meanwhile. Business Insider dug into the wreckage from the past week, looking at the three most affected industries in the US stock market. Here's how the damage looks, with handy acronyms dreamt up by BI for each group: Grocers, aka Woodstock (WDSTCK) — Walmart, Dollar General, Supervalu, Target, Costco, Kroger
Grocers were most directly affected by the Whole Foods deal, and the losses are deep and widely distributed. The market cap-weighted Woodstock (WDSTCK) index have dropped 7.8% since the acquisition, including a 5.9% decline the day it was announced. While the companies themselves have been getting shelled, traders betting against them reaped a big windfall. Short speculators made about $500 million in the week ended June 16, according to data compiled by financial analytics firm S3 Partners. Sporting goods, aka Duff (DUF) — Dick's, Under Armour, Foot Locker
Sporting good retailers, specifically those selling apparel, were most directly affected by a Goldman Sachs report saying Nike may start selling products on Amazon. The market cap-weighted Duff (DUF) index has dropped 3.3% in the two days since the news. DUF pared its loss on Thursday after sinking 3.8% the day of the report. The group is still out about $300 million in market value since the Goldman note. It was the latest rocky patch for a sector that's come under pressure in 2017. Even before the news of Nike's possible Amazon partnership, DUF was down 28% year-to-date. Selling directly on the site eliminates a layer between Nike and the consumer, allowing the company to better control pricing and presentation. Goldman sees it as a deal worth potentially up to $500 million of revenue yearly — an additional 1% of global sales for the Nike. That's money coming out of the other retailers' pockets. Pharmacies, aka Quack Me (CWACKME) — CVS, Walgreens, Cardinal, AmerisourceBergen, McKesson, Express Scripts
While not as directly linked to the Amazon/Whole Foods deal as grocers, pharmacy stocks were still collateral damage. The market cap-weighted Quack Me (CWACME) index dropped 2.5% on the day of the announcement. While the selling stemmed from anxiety over Amazon possibly entering the pharmacy business, it's not the first time those fears have mounted. A report in May that the company is seriously considering breaking into the space led to speculation about what that might look like. However, CWACME proved more resilient than its WDSTCK and DUF peers, erasing that loss in the days following the original Whole Foods purchase.
See the rest of the story at Business Insider |
Under Armour's CEO sent Nike's CEO a threatening card every Christmas — here's what it said (UA, NKE)
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Business Insider, 1/1/0001 12:00 AM PST
Under Armour CEO Kevin Plank had a special holiday message for Phil Knight, CEO and founder of Nike. Plank sent a card to Knight ever year with the phrase "You will know our name," written in it, according to a new NBC interview with Under Armour's CEO. While ostensibly a threat to Nike and its dominance, Plank says it "wasn't spiteful," but that when he was recruiting employees Under Armour, he employed an "us versus them" competitive mentality. Many told Plank that Under Armour "wasn't even on Nike's radar." “To me, we were always on the radar. To me, were always in that game. To me, we’re always in that fight,” says Plank. The yearly holiday card was just Plank's way of making it clear that he and his company were coming for Nike. NBC's full interview with Plank will air on Sunday on "Today with Willie Geist." SEE ALSO: Sneakers are the new status symbol at work — and they're killing an office staple |
I flew 'best airline' Virgin America and it was nothing like I expected
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Business Insider, 1/1/0001 12:00 AM PST
Virgin America is known for being one of America's best airlines. For four consecutive years (2012 – 2015) it was ranked in first place in a list of America's best airlines. In 2016, it slipped to third place and at the end of that year was bought by Alaska Airlines for $2.6 billion. I tested out what it is like to fly on this seemingly glamorous airline, once the hailed the best in the US. High expectations:I flew Virgin America from Newark to Los Angeles on the Friday afternoon of Memorial Day weekend, departing at 5.59pm and arriving at LAX at 9.15pm. The roundtrip cost $471.40, including tax. I was expecting flights to be more expensive as it was a holiday weekend but specifically decided to travel Virgin as I am an avid Virgin Atlantic fan. According to Hopper, average roundtrip weekend flights on this route are actually cheapest on Virgin Atlantic, costing $433. My initial experience with the airline was great. The booking system was simple and it was easy to check-in on my phone without even having to download the app. Ominous signsWhen I arrived at Newark airport I went through security and headed directly to the gate. It was here that the first seeds of doubt began to grow in my mind as I saw the makeshift peeling sign with the flight details in the distance. What I hadn’t spotted, was the mini portable speaker below, which the boarding attendants were using to blare out loud and screechy departure information for the flight – I put this down to the airport's scattiness and confidently boarded the flight, which was not delayed.
The first thing you notice is the airline’s signature pink and purple lighting, which according to Virgin, adapts to the outside light. This means rather than walking into glaring artificial lights you instantly feel more relaxed. This was true but the cabin also cramped and hot when I came onboard. I edged my way down to the back of the plane, eagerly anticipating, what Virgin describes as, the "devilishly good” seats. This was not the case. The seats were rigid and uncomfortable and there wasn't much room to stretch out. Business Insider reported that the seat pitch (the amount of legroom) on Virgin America is 32 inches, which is in-line with most major US airlines. But it’s also two inches less than JetBlue – the last airline I had flown before this trip – and I could really feel the difference. Never mind, I thought. Once I’m in full recline I won’t notice a thing. Safety videoAfter a series of announcements on the main speaker, the famous Virgin safety video came on screen. This five-minute video went viral when it first came out in 2013 and was praised for being a fun way to go through safety instructions. The video is definitely fun but it also lasted for five minutes as they drew out the instructions to squeeze in a few more dance moves. And it's not just me, Ask The Pilot wrote: "They took a somewhat entertaining idea and made a monster out of it. Imagine being a Virgin America frequent flyer, or employee, and having to endure that thing over and over and over and over." No free food, drinks, or moviesBut the biggest disappointment was yet to come. I hadn’t bought any snacks or drinks on board, foolishly assuming that on a six-hour flight they might offer something for free. Maybe I had become spoilt after my last trip on JetBlue, where you could help yourself to free chips and were offered an ice cold drink when you sat down. Nothing was free on Virgin. Not even the movies (which are on JetBlue), despite Alaska Airlines claiming in April 2017 that they would be adding free entertainment to all of its flights. A spokesperson for the Airline told Business Insider that this would now be brought to Virgin America flights in August. The main perk was that you could order and pay for food and drinks directly from your seat on the screen, which made the whole process easier. Virgin America is said to have the healthiest airplane snacks of any other airline, according to a study done by the director of the New York City Food Policy Center at Hunter College, but the snacks were expensive and in the end, I settled for a bag of popcorn which cost $3.25. JetBlue from now onResigned to the fact that I wasn’t going to be able to watch anything good on the TV without spending more than $10, I finished my popcorn and decided to go to sleep. I pressed the recline button, and my chair cranked back by what felt like an inch – I fell into a deep and uncomfortable sleep, full of dread for the overnight return flight home. Overall, it wasn't the traveling experience I had hoped for and definitely didn't live up to its reputation, or to Virgin Atlantic’s. In future, I will definitely stick to flying JetBlue. SEE ALSO: Here's what it's like to fly on Alaska Airlines, which just bought Virgin America for $2.6 billion Join the conversation about this story » NOW WATCH: HENRY BLODGET: Bitcoin could go to $1 million (or fall to $0) |
John McAfee's latest gambit is mining Ethereum — the cryptocurrency that's up nearly 4000% this year
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Business Insider, 1/1/0001 12:00 AM PST
MGT Capital, the company run by John McAfee, said it will start to mine Ethereum — the bitcoin rival that's surged nearly 4000% this year — in it's latest bid to turn a profit. "We are more convinced each day of the growth and value of digital currencies, and our Company is uniquely positioned to be a leading provider of processing power to relevant blockchains," McAfee said in the statement. McAfee's foray into the cryptocurrency space comes at a time when others have been sounding the alarm after a huge run-up in prices. Days later, Goldman Sachs warned that bitcoin was looking "heavy" and that a drop to between 2,330 and no lower than 1,915 was looking likely. Bitcoin put in a low of $2,076 just a day later after the scaling debate came back into focus as the bitcoin-mining firm Bitmain outlined its "contingency plan" if a hard fork were to occur. Bitcoin has since recouped those losses and now trades at $2,708. Ethereum is up 3,964% so far in 2017. As for MGT, it's stock is up 42% year-to-date. SEE ALSO: We bought and sold bitcoin — here's how it works Join the conversation about this story » NOW WATCH: An economist explains what could happen if Trump pulls the US out of NAFTA |
A VC says the 3 things an intern needs to do to score a full-time job have nothing to do with education or skill
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Business Insider, 1/1/0001 12:00 AM PST
Alright, so you've landed your first internship. But that doesn't mean you're guaranteed a job. Now you have to prove that you've got what it takes. Ryan Hinkle is a managing director at Insight Venture Partners, an international private equity and venture capital firm. When Hinkle is not working on deals, the Philadelphia native runs Insight Venture Partner's intern program. So, he knows what separates the good interns from the great interns. We recently spoke with Hinkle to get his advice for new interns looking to get hired by their respective firms. He advises his interns to consider the three following points. Think of ways you can help. Don't limit your responsibilities to those on your job description. If you see a colleague who constantly has to do something that's a hassle, and you could easily do it, then do it. Ask questions. Sometimes this requires a little courage, because nobody wants to ask a stupid question. But it's critical. There is nothing wrong with asking a question, unless you ask the same question twice. Don't be afraid. To make it in finance, especially in my business of venture capital, you need gusto. Don't hide at your desk. Introduce yourself to people in your office who aren't on your team. It boggles my mind when senior execs tell interns during orientation to visit their office and then they don't do it. |
The Wall Street dad bro is having an existential crisis
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Business Insider, 1/1/0001 12:00 AM PST
It's likely escaped your attention, but the Wall Street dad bro is having an existential crisis. You'll see it at conferences in between bites of muffins, and it's on financial TV for as long as anyone can stand talking about it without changing the subject. But the darkest takes on this crisis are really on the internet. That's where morose money managers share their concerns that, in an era of quant funds, passive investing, and giant central bank balance sheets, their very existence is obsolete. Here's an exhibit for your review from Ben Hunt, the chief investment strategist at Salient Partners. He writes a site and newsletter called Epsilon Theory "that examines markets through the lenses of game theory and history." And he's a perfect example of someone who isn't sure what the role of a stock picker is in 2017. Other dad bros who are feeling the same way have been passing around one post in particular called "Tell My Horse" because he's done a marvelous job of articulating what's going on. "I’m having a hard time with this market, because I can see what a powerfully stable social equilibrium is being established around this transformation of capital markets into a political utility. I’m having a hard time with it because, like any powerfully stable social equilibrium, to be truly successful in that world you must give yourself over to that world. You must embrace that world in your heart of hearts. As Winston finally learned, to be happy you must love Big Brother. Or in our case, lever long, sell volatility, and love the Fed." You'd think think that with stocks moving higher and a potential tax cut on the way, the state of the dad bro would be strong, but it's not. This seemingly unending upward grind of stock prices is upsetting the balance of markets. The point of investing, is, yes, to make money. But it's also supposed to be a game of assigning value. It's a game of finding worth. Hunt went on to compare the current state of finance, where big "ideas" like artificial intelligence or central banks propping up asset prices dominate, to a "voodoo wasp," a creature that lays its eggs inside caterpillars. Those eggs then hatch, with the wasp babies then either eating their way out of the caterpillar or taking over its body like something out of a zombie movie. Hug your nearest dad bro
Passive and quant (robot) players now make up 60% of equity markets, according to JP Morgan. Humans are barely picking stocks right now. It's becoming a robot job. All of these are acting as a bludgeoning force pushing stocks ever higher, no matter what we would expect from those stocks' underlying value. And when value ceases to matter, the value hunters cease to matter. They have no purpose. Nineteenth century sociologist Emile Durkheim described what happens when people lose their sense of purpose in his book "Suicide" in 1897, and it remains one of the most in-depth examinations of the human mind in despair. In the book he describes a form of suicide called "anomic suicide." It's closely associated with the breakdown of a society and norms, making people question who they are. It's also closely associated with a person's expectations for themselves in modern society. Durkheim observed that when those things disappear, people fall into a deep despair. Anomic despair is a helpful framework for understanding many of the crises of middle- and working-class life that have dominated headlines in the last few years. And now it's come for fund managers. The Wall Street dad bro — the one who still goes to his lacrosse reunion at Dartmouth and gets a new set of irons whenever he pleases — is facing a fate that has taken the livelihoods of many working men across the country over the last 30 years. So all the dad bro can think is: What if the machines make me obsolete? Even worse, he's thinking that if he wants to make money he has to ignore everything he's learned and every market instinct he's developed. All the logic gathered over years about the way money works, about what people buy, about how much they spend, about debt and accounting, about how governments work, about what's going to last. In the land of ETFs and algorithms, he's afraid he has to let go of that and just buy. Get numb and dumbAnother exhibit, from Michael Batnick of Ritholtz Wealth Management. For a second there, he — a father and a responsible market participant — started kicking himself for not submitting to Bitcoin and the cryptocurrency craze. "If you asked me what I thought about bitcoin a year ago, I would have said it’s ridiculous. Today I have no opinion. My knowledge of cryptocurrencies is unchanged over the last year, but bitcoin is up 240%," he wrote in his blog The Irrelevant Investor. In other words, Batnick, like so many others, has thrown up his hands. He's a value hunter and every single bit of his training looks at Bitcoin and says it's absurd. But, somehow, the cryptocurrency just keeps going up. "The thing about bubbles, and for the record, I’m not brave or dumb enough to declare this one, is that they wear you down," he wrote. "They make you feel irresponsible for not getting involved. Today I found myself at this juncture. What if Bitcoin legitimately is the future of currency? What if this is how 30% of online transactions take place in ten years? Why wouldn’t I buy on this pullback?" Bitcoin, unicorns, flying cars, self driving cars, cars that know your favorite song — it's all the same. None of it makes sense within the context of the normal dad bro business of figuring out which investment strategies make sense and should pay off. Hold fastNow, this problem has been plaguing investors since about the end of 2015, but it's really getting ugly now. Hedge funds and mutual funds, the active managers of the world, have been posting anemic returns for several quarters. Last year, legendary trader Steve Cohen admitted that February 2016 was his nightmare scenario. With all the money managers of the world chasing the same trades, the moment flashed before his eyes when everyone would be on one side — the wrong side — and everything would collapse. "One of my biggest worries is that there are so many players out there trying to do the same strategies ... if one big one goes down, will we take collateral damage?" Cohen said at the Milken Institute Global Conference in Los Angeles. "We were down 8% in February and for us that's a lot ... my worst fears were realized." "It happened in four days," Cohen added later, "and the markets were going up at that time."
Even the deal guys are starting to worry. With stocks looking expensive compared to their value, people don't want to do mergers and acquisitions or buy stakes in over-valued companies. Paul J. Taubman, chief executive officer of investment bank PJT Partners, recently admitted that he's scared too, according to Bloomberg. “Right now there seems to be an unease about committing large sums of capital at these valuation levels, and yet the market continues to grind higher,” Taubman said Thursday at a conference hosted by JMP Securities. “It’s made it more complicated everywhere you look.” Perhaps this is why money managers around the world smell something dangerous, but they can't put their finger on what it is. Hard economic data and soft data economic are dancing around each other without meeting. The market seems too trusting. When there is no volatility and every index looks like it can only go up — while at the same time commodities prices are in the sewer and there are sabers rattling all around the world — there's something moving in the water out there that the dad bros don't fully understand, and it's making the market unrecognizable. Something has to give. Or maybe it doesn't. Years ago, when I first started reporting about Wall Street, I heard something that stuck in my head. In between bagel and coffee breaks at a Bloomberg conference near Union Square, one speaker said succinctly: "In 20 years the worst job on Wall Street will be untangling the true value of stocks from the indices they've been lumped into." The dad bros are afraid of the markets becoming a massive Gordian knot. In the meantime they're afraid they either have to submit to what they see as an irrational regime or be killed. Funds are closing left and right. Guys like legendary investor Eric Mindich at the now defunct fund Eton Park — they weren't supposed to go anywhere. They were supposed to grow old like Carl Icahn and call into CNBC when they got a belly ache to troll their enemies and complain about taxes and regulation. They weren't supposed to be winnowed out. Join the conversation about this story » NOW WATCH: Ivanka Trump's Instagram put her at the center of a controversy over her lavish art collection |
Right now the job of value assignment doesn't matter. Active money managers are losing ground to robots who slosh around in markets based on algorithms. The Federal Reserve's low rates and massive asset purchases have ensured stocks move higher and volatility is nil. 
When not even Cohen can wield the markets, you know there's a problem. And instead of paying high "master of the universe" fees to guys like Cohen, investors are putting their money in lower-cost passive investing — the robots and the index or exchange-traded funds.The number of buy-to-let purchases has plummeted
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Business Insider, 1/1/0001 12:00 AM PST
The number of properties being bought by landlords in order to be rented, known as buy-to-let, has fallen by almost half since last year, according to new figures from the Council of Mortgage Lenders. The CML's buy-to-let lending forecast has dropped, with figures now expected to be £35 billion in 2017 and £33 billion in 2018, down from December's prediction of £38 billion for both years. But the number of first time buyers rose 8% between April 2016 and 2017, helped by falling interest rates and the slowing growth of UK property prices. "Remortgage activity and first-time buyers continue to drive lending this year. Looking ahead, we expect to see this trend continue, but not as strongly, as the factors supporting lending are blunted by less favourable economic conditions," said Paul Smee, CML director general. The CML attributes the slowdown in buy-to-let purchases to the impact of tax and prudential measures, and hangover effects from last year's change to stamp duty. Landlords paying higher rates of tax are now experiencing a drop in the amount of tax deduction they can claim from mortgage interest each year, a measure introduced in April. This, says the CML, has made landlords more cautious about expanding their portfolios. "This re-emphasises the case for avoiding further changes to the tax and regulatory framework until the effect of these already in train have been properly assessed," said Smee. Gross mortgage lending, which reached £20.1bn in May, was up 12% both on last year's figure and on the figure for April. But the CML is clear that the housing market has "stalled" in recent months, and predicts there could be a slowdown in the number of property transactions - typically at around 100,000 per month in 2016, but down to 65,000 in April - over the rest of the year. |
The ECB took a big step towards wresting control of London's near-€900 billion euro clearing business
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Business Insider, 1/1/0001 12:00 AM PST
LONDON — The European Central Bank proposed new powers to regulate euro clearing, which has become a key point of contention as the UK prepares to leave the European Union. The ECB proposed a change to its statute that would give it "a clear legal competence in the area of central clearing," the central bank said in a statement on its website on Friday. The change would give the ECB, and other central banks in the euro zone, a major role in deciding which clearing houses would have to leave London to continue their euro-denominated business. Around 75% of all euro-denominated contracts are cleared in London, at a nominal value of around €885 billion euros a year. Clearing houses such as LCH and ICE Clear Europe in London manage credit risk, acting as a middle-man in swaps and derivatives trades to guarantee the contract in the event that one of the parties involved in the trade goes bust. The EU proposed new powers on earlier this month for the ECB and market regulators to force them to relocate to Europe if they are deemed to be so important that their collapse would cause the rest of the financial system to fail. As London prepares to leave the European single market as part of Brexit, a power struggle over the location of euro clearing has seen tensions rise on both sides of the channel. The EU has argued that it cannot delegate power over derivatives contracts denominated in its core currency, the euro, to countries based outside of the EU. "The continued safety and stability of our financial system remains a key priority. As we face the departure of the largest EU financial centre, we need to make certain adjustments to our rules to ensure that our efforts remain on track," Valdis Dombrovskis, the EU's financial services commissioner, said in a statement announcing the bill. Meanwhile, UK financial figures have said centralising the clearing business in London has saved billions and reduced risk. Earlier this year Xavier Rolet, chief executive of the London Stock Exchange warned that moving the business out of London could cost investors up to €100 billion in the long run. "London clears 18 major currencies and these multi-currency netting efficiencies meant LCH saved its customers $21 billion in capital last year. Strip out euro clearing and you lose these efficiencies, potentially increasing cumulative trading costs by €100 billion over five years," he wrote in the Times. Join the conversation about this story » NOW WATCH: HENRY BLODGET: Bitcoin could go to $1 million (or fall to $0) |
Gambling companies probed for 'unfairly holding onto people's money'
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Business Insider, 1/1/0001 12:00 AM PST
LONDON – The UK's competition watchdog is investigating gambling operators on concerns they are "unfairly holding on to people's money." The Competition and Markets Authority (CMA) is probing whether the companies are misleading consumers with special sign-up promotions. The investigation opened in October, prompted by concerns from the Gambling Commission about whether gambling websites were complying with consumer protection laws. "The gambling industry should be under no illusion that if they don’t comply with consumer law, we will see this as a breach of their operating licence, and take decisive action," said Sarah Harrison, chief executive of the Gambling Commission. Sign-up promotions lure people into online casinos and gambling sites by promising good odds, free bets and cash prizes. But regulators are worried that these winnings are often subject to terms and conditions that customers are unaware of when signing up. One such condition is that a customer must play a lot of games before being allowed to withdraw any money - which increases the chance of developing a gambling addiction. The gambling industry in the UK is worth an estimated £4.5billion. Another complaint made to the CMA is that the minimum withdrawal a customer can make is sometimes far higher than the amount of money they initially put in. Concerns about gambling addictions have grown over the past year, prompting the government to announce a review of fixed odds betting terminals (FOBT). FOBTs are a significant source of revenue for high street betting shops, but have been heavily criticised as highly addictive and a dangerous drain on people's money: they allow customers to pay up to £100 every 20 seconds, which can lead to huge losses. "We know online gambling is always going to be risky, but firms must also play fair. People should get the deal they’re expecting if they sign up to a promotion, and be able to walk away with their money when they want to," said Nisha Arora, senior director for customer enforcement at the CMA. "Sadly, we have heard this isn’t always the case. New customers are being enticed by tempting promotions only to find the dice are loaded against them. And players can find a whole host of hurdles in their way when they want to withdraw their money," she said. Join the conversation about this story » NOW WATCH: HENRY BLODGET: Bitcoin could go to $1 million (or fall to $0) |
A committee of the world's biggest banks chose a new alternative to the scandal-ridden LIBOR rate
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Business Insider, 1/1/0001 12:00 AM PST
The Alternative Reference Rates Committee, or ARRC for short, on recommended on Thursday that banks start using a new broad Treasuries repo rate, which will work by reflecting how much it costs to borrow cash secured against US government debt, also known as Treasuries. "At its meeting today, the Alternative Reference Rates Committee (ARRC) identified a broad Treasuries repo financing rate, which the Federal Reserve Bank of New York has proposed publishing in cooperation with the Office of Financial Research, as the rate that, in its consensus view, represents best practice for use in certain new U.S. dollar derivatives and other financial contracts," a statement from the ARRC said. The move was first suggested by regulators, who feared that the decline in short-term bank lending since the 2008 financial crisis had undermined faith in the use of LIBOR, and risked the future of trillions of dollars worth of US dollar denominated derivatives that were backed by LIBOR. "The ARRC today took an important step to strengthen the financial system by selecting a robust alternative reference interest rate," said Sandra O’Connor, chief regulatory affairs officer at JPMorgan and chair of the ARRC. "I am proud of the committee’s work, and look forward to our continued efforts to promote the widespread adoption and use of this rate." The LIBOR manipulation scandal, which hit four years after the 2008 financial crisis, risked breaking trust in London's ability to function as a financial centre. LIBOR, a benchmark underpinning more than $300 trillion in loans and derivatives, was set by a panel of banks that submitted short-term borrowing rates to the British Bankers' Association at the time of the scandal. Regulators found that traders and rate-setters had colluded to shift the rate, benefiting the traders' positions and leading to billions of pounds in fines from US and UK regulators. Libor has since been reformed, and is no longer compiled by the BBA. The ARRC's recommendation comes just under two months after a Bank of England recommended a new alternative to LIBOR for use in sterling derivatives. In April, a panel of banks, including the likes of Goldman Sachs, Barclays, and Deutsche Bank approved SONIA – which stands for the Sterling Overnight Index Average – as its preferred short-term interest rate benchmark. The SONIA index tracks the rates of actual overnight funding deals on the wholesale money markets, rather than relying on submitters, and its use will minimise "opportunities for misconduct," the Bank of England said at the time. Join the conversation about this story » NOW WATCH: HENRY BLODGET: Bitcoin could go to $1 million (or fall to $0) |
A body set up by the US government to investigate reforms of how banks lend to one another has decided on a new benchmark rate to replace LIBOR — the gauge which was the subject of a huge price rigging scandal in recent years.Gulf states issued 13 demands to Qatar and set a deadline of 10 days to comply
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Business Insider, 1/1/0001 12:00 AM PST
LONDON — Gulf states have issued Qatar with 13 demands that must be met to lift their blockade of the country, including the disbanding of news channel Al Jazeera. Qatar has been given just 10 days to comply or the offer becomes void. Qatar has previously said it won't negotiate until the blockade, enacted by neighbouring countries including Saudi Arabia and Bahrain, is lifted. On Thursday, a US state department spokeswoman said that the demands have to be "reasonable and actionable.” The crisis hit Qatar on June 5 when Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic and trade ties and accused it of supporting terrorist groups such as the Islamic State and Al-Qaeda. Qatar has denied the allegations. Here is the full list of demands:
The blockade has had an immediate effect on Qatar, which has imported cows to maintain its milk supply and battled to keep its tight currency peg with the dollar. Earlier this month shares in the country's banks fell sharply after the UAE central bank told its lenders to stop dealing with 59 individuals with links to Qatar and carry out enhanced due diligence on their activities with six Qatari banks. Qatari lenders receive a lot of funding from other Gulf states, about 60 billion riyals ($16.5 billion) according to a Reuters report, which could dry up if the crisis continues or worsens. Meanwhile the Qatari riyal hit 3.67 to the dollar, its weakest level in 19 years. Qatar's central bank has pegged the currency to 3.64 to the dollar so even small movements are likely to produce new lows. Join the conversation about this story » NOW WATCH: HENRY BLODGET: Bitcoin could go to $1 million (or fall to $0) |
Farfetch CEO on Brexit: 'Our biggest concern is talent'
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Business Insider, 1/1/0001 12:00 AM PST
LONDON — The founder of British/Portuguese luxury e-commerce business Farfetch, which raised $397 million on Thursday, says he is 100% committed to keeping operations in the UK but is concerned about hiring post-Brexit. José Neves told Business Insider: "Personally, and this is a personal opinion, not a company view, Brexit is negative. It will create problems for businesses. In our case, our biggest concern is talent. "We have a big percentage of our team who are from the European Union and other countries. That's what makes London such a great city. Brexit was definitely a move towards more controls in terms of immigration. That will affect the ability to attract talent. This is something that I think the government should really keep in mind." London-headquartered Farfetch is an e-commerce platform that pulls together luxury boutiques from around the world, letting the global elite virtually shop at over 700 shops in locations such as London, New York, and Paris. While it might not sound like a tech business, the behind the scenes logistics required to link all the boutiques to Farfetch's website and ensure it runs smoothly requires a fair amount of tech muscle. Neves' views chime with the wider UK tech community, which is concerned that Brexit will hurt business growth due to a shortage of home-grown science and technology talent. The UK risks a tech job shortfall of 800,000 jobs by 2020, according to research by policy group Coalition for a Digital Economy (Coadec), and applications from the EU for UK tech jobs have already declined by 50% according to jobs site Hired. Neves, who is Portuguese, added: "At the moment it's a psychological issue because nothing's changed. The UK is still a full member of the EU. Our team, everyone is convinced that whoever is here and working, it's stable and going to continue. "I think it's much more of a future thing. What will London look like in 10 years? I remember what London looked like in 1996 when I first came to live here. It wasn't the cosmopolitan, vibrant, amazing city it is today. What the UK has achieved as an economy and London as a city is amazing and it's thanks to strong integration with Europe and with the world." Taavet Hinrikus, the cofounder of UK tech unicorn TransferWise, said at a conference in April that he would not set up his business in the UK today if he were starting again because of the uncertainty caused by Brexit. Hinrikus said access to talent was one of his biggest concerns. Neves agrees, saying: "If we starting from scratch, it would definitely be a consideration for sure, just because of the talent piece." What the UK has achieved as an economy and London as a city is amazing and it's thanks to strong integration with Europe and with the world He said that countries like Ireland and Germany would likely benefit from Brexit, with more startups choosing to base themselves in these EU countries rather than the UK. But he adds: "We remain committed to London, we love London. Our life can be made more difficult, more easy, we don't know. But London will always be home for us, and Portugal. This company started with offices in both countries from day one." Farfetch has 1,600 staff globally across 11 offices. Neves says that number is likely to rise to 2,000 by the end of the year as the $397 million investment helps fuel growth across the Asia-Pacific region. The investment came from Chinese e-commerce giant JD.com. "We are growing very fast in Asia, not just China," Neves said. "In China, we have had a very successful business for the past two years. We saw, and to be honest JD.com too, the opportunity to double down because quite clearly we have the proposition for the Chinese customer which works." Neves wouldn't comment on who approached who in deal talks, how long the investment took, and Farfetch's valuation. The company was reportedly valued at $1.5 billion in its last funding round in 2016. |
Antshares Rebrands, Introduces NEO and the New Smart Economy
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Bitcoin Magazine, 1/1/0001 12:00 AM PST At a gathering at the Microsoft headquarters in Beijing on Thursday, with about 200 people in attendance, Antshares, the first open-source blockchain platform developed in China, announced a complete rebranding of its blockchain solution, as well as a number of other developments detailing their ambitious plans forward. One of the revelations was the platform’s new name and brand, NEO, which in Greek means newness, novelty and youth. The developers also highlighted the strengths of their advanced smart contract code, which will support decentralized commerce, digital identities and the digitization of many different assets. This rebranding of Antshares represents a new direction for the development of China's blockchain community. Currently, holders of ANS can now automatically generate Antcoins (ANC) in their Antshares wallets, which will be used as gas on the platform. The ANS asset symbol will become NEO in the 3rd quarter of 2017; meanwhile, the NEO team is working on new clients and a UI for the new NEO brand. Throughout the day, there were presentations from participants including Microsoft representatives, NEO platform developers, and founders of partner platforms. Among the select attendees were several major potential investors, industry experts and blockchain enthusiasts, as well as members of the Chinese financial and mainstream media, including CCTV.
Presenters at the conference included: Da Hongfei, founder of NEOAfter announcing NEO’s new brand and strategy, Da Hongfei elaborated on the future of blockchain technology, where every asset will be digitized and programmable with smart contracts. Calling for the transparency and openness of data, he introduced concepts of the “Smart Economy” and new smart contract system, and announced that he is building a new multi-chain protocol for interoperability. Da Hongfei’s top revelations at the conference were that:
Erik Zhang, Core Developer of NEOIn his presentation, Erik Zhang discussed the evolution of Smart Contracts 2.0, and explained the main differences between NEO and Ethereum. One big contrast of these competing platforms is their programming languages. Ethereum requires developers to learn to program with Solidity. Neo, on the other hand, will support almost all programming languages via a compiler, including those on Microsoft.net, Java, Kotlin, Go and Python, greatly lowering the difficulty for developers to write smart contracts. By making its programming languages more inclusive, NEO hopes to attract a larger community of developers. Zhang also explained the mechanics of the NEO Virtual Machine, its execution engine and interoperability. Slide Of The NEO Virtual Machine Tony Tao, CEO of NEO and Founder of Nest FundBased on the concept of Ethereum’s The DAO, a blockchain-based investment fund, Tony Tao is about to release a whitepaper for a similar project. Called Nest Fund, and built on NEO’s blockchain, this fund will make improvements on the failures of The DAO. By offering a global bounty reward for any hacker who finds bugs, Nest will be audited by a worldwide peer review, and will then release its token for decentralized investing. Srikanth Raju, Microsoft’s G.M of Developer Experience and Evangelism for the Greater China RegionAccording to Mr. Raju, blockchain technology will lead us into a new digital age, displacing traditional businesses and middlemen throughout many industries. He said that Onchain (the company that founded NEO) is “one of the top 50 startup companies in China”, and offered his support for their endeavors going forward. Mr. Han Feng, Tsinghua University I-CenterFostering innovation and entrepreneurship at the top university in China, Tsinghua University’s I-Center focuses on the large-scale integration of technology resources. Speaking for the university’s growing interest in supporting blockchain technology, Mr. Han Feng said that current systems of commerce are “outdated and insecure,” and that the internet is ready for an upgrade to a blockchain-based operating system. Calling for a fully-automated, blockchain-based, decentralized economy, he said we can expect a digital revolution in the years to come. This will include digital currency, decentralized storage, secure smart contract codes, IoT, AI, and many more innovations. Chen Cheng Qiang, founder and CEO of InnospaceLocated in Shanghai, Innospace is a business incubation company, with office spaces, meeting spaces, cafes and living spaces. At today’s conference, Innospace CEO Chen Cheng Qiang announced a ¥200 million CNY ($29.3 million USD) incubation fund, a collaboration between his company and the NEO blockchain team. Plans for the fund include the establishment of a new blockchain space in Shanghai, combining working spaces, startup incubation and acceleration services. According to Mr. Qiang, his company plans to provide the most successful entrepreneurship acceleration services in China. Alex Norta, founder of AgrelloComing all the way from Estonia, Alex Norta announced that his startup Agrello will be partnering with NEO to develop smart contracts for automation, self-execution, accuracy and transparency. Powered by AI, Agrello will be a platform for non-programmers to create their own legally binding blockchain-based smart contracts. Use cases for Agrello’s tech include renting and sharing, freelance contracting, orchestrating production flows, and reducing administration costs for multinational corporations. Adam Efrima, CEO of CoindashWith offices in Israel and Shanghai, Coindash will be a social trading platform for crypto assets, offering portfolio management tools for digital asset investors. Features of the platform will include portfolio statistics and management tools, investment automation, an ICO dashboard, and insights into other traders’ successful investing strategies. In the upcoming development of Nest Fund, a blockchain-based smart fund by the developers of NEO, Coindash will offer advisory and prediction tools for Nest’s modern investors. Mr. Zhao Chang Peng, CEO of BinanceThe former CTO of OkCoin, Mr. Zhao Chang Peng is starting his own digital asset exchange, hoping to compete with platforms like Poloniex. Calling his new platform Binance, this new exchange will only deal in coin-to-coin transactions, avoiding fiat pairs and therefore avoiding Chinese regulations. In order to maintain a standard in mature digital assets, Binance will only list coins that meet its strict criteria. With a launch planned for later this year, the platform’s first traded assets will be bitcoin, ether and NEO. From the looks, sounds, and energy of the event, NEO has built up some strong momentum going forward. They have one the top blockchain development teams in all of China, with 50 million ANS ($325 million) to support their funding needs and a growing list of partners now aligning by their side. While it may take some time to steal the spotlight from Ethereum, we are sure to see more from this platform in the months to come. The post Antshares Rebrands, Introduces NEO and the New Smart Economy appeared first on Bitcoin Magazine. |
