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 The Gillmor Gang — Doc Searls, Denis Pombriant, Keith Teare, Kevin Marks, and Steve Gillmor. Recorded live Friday, September 15, 2017. Topics: Bitcoin, Apple Watch 3, iPhone X, commodity cloud G3: Control Panel recorded Thursday, September 14, 2017 with Denise Howell, Elisa Camahort Page, Mary Hodder, Kristie Wells, and Tina Chase Gillmor. Topics: Equifax, Tesla, Apple Watch 3, Face ID. Read More

HSBC has promoted two bankers internally to cohead its equity capital markets operation in the US and Canada. 

Brendan Spinks and Alfred Traboulsi were each named cohead of ECM in North America for the London-based bank this week, a company spokesman confirmed. 

Both men were advanced from within the firm's ECM department. 

Spinks has been with the bank since 2002, according to his LinkedIn page, while Traboulsi joined HSBC from Goldman Sachs' equity derivatives team in 2014. 

HSBC ranked 11 globally in the first half for investment banking fees, according to Thomson Reuters, behind Wells Fargo and ahead of UBS. It generated around $1 billion in fees globally, with $276 million in fees from the Americas.

Samir Assaf, CEO of global banking and markets at HSBC, told Financial Times last year that the bank was targeting market share gains in the advisory and equity business outside of Asia, its traditional area of strength. 

“We have progressed in Europe and emerging markets in the last three years," he told the FT. "We think that we still have much more to go."

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With the help of Google, Facebook, Microsoft and Apple, the W3C is deploying a browser API that could extend cryptocurrency's payments potential.

Justin White started his career "at a consulting firm you've never heard of." 

But after joining the asset-management giant T. Rowe Price, and showing a strong track record as a media and tech analyst, he was tapped last April to run its New America Growth Fund.

Like many peers who made big bets on large technology companies, White is crushing it in 2017.

His fund, with $4 billion in assets under management, gained 25% this year through Thursday. That's stronger than the Lipper Multi-Cap Growth Funds Average it's compared to, and the broader Russell 1000 index he describes as an "imperfect" benchmark.

Stock pickers like White are seeing a turnaround in their fortunes this year. Since the recession, more money has gone to passive strategies and products like exchange-traded funds (ETFs) that are designed to mimic the returns of an existing index.

"The real test for active management is going to be the next bear market," White told Business Insider. 

"We should see all the stocks that went up for reasons that didn't make sense get obliterated as people sell. And active managers — if they're as good as they're supposed to be — should be able to sidestep that more elegantly than ETFs or passive strategies can."

'Frustrating' financials

To ride out the inevitable downturn, one of White's preferred sectors is financials. 

But that's been a "frustrating" bet this year, he said. It's not what many fund managers believed just after the 2016 election, when they expected higher interest rates and deregulation to help banks. 

"The number one reason why financials have not done what people hoped they would do is because the 10-year Treasury yield has just remained anchored so low," White said. This has limited the earnings banks make from their net interest margins, or the gap between the interest rates at which they lend and borrow, relative to their assets.  

"I'm overweight financials, but I wouldn't call it a very high-conviction positioning right now," White said. "I'm hopeful that we'll get tax reform. If we get tax reform, that would be a significant catalyst for the group. But the last nine months do make you a bit wary of the government can accomplish."

To its benefit, the current administration was handed an economy in expansion. But the 10-year yield, which peaked this year in March near 2.57%, and the flattening yield curve "might be telling us that there's trouble around the corner," White said.

One stand-out stock

One financial stock that's been boosted partly by Washington is Sallie Mae.

The student-loan provider has jumped 51% since election day, in part on the expectation that President Donald Trump's administration would not overregulate the private-lending market.

"They have the ability to grow their earnings in the vicinity of 20% for the next several years as long as we don't go into a recession," White said.

He added that the stock is attractive because it can beef up its assets by adding more loans to its balance sheet.

It also helps that tuition fees at American colleges are among the highest in the world. 

"The federal limit on loans has been pretty static but the cost of tuition has gone up," White said. "So there's a greater hole each year theoretically that needs to be plugged, and Sallie Mae has a real-high market share in this business."

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LONDON – Foreign Secretary Boris Johnson promised a "glorious" Brexit in a 4,000 word Daily Telegraph article, days ahead of a key speech from Prime Minister Theresa May.

Johnson said the UK will not pay to access the single market and reiterated the Vote Leave campaign promise to spend £350 million extra a week on the National Health Service.

“Once we have settled our accounts, we will take back control of roughly £350 million per week," said Johnson.

"It would be a fine thing as many of us have pointed out if a lot of that money went on the NHS, provided we use that cash injection to modernise and make the most of new technology."

He also said the UK should borrow money to spend on boosting infrastructure in London and that doubters will see the UK "succeed mightily" in Brexit.

"They think that we will simply despair of finding the way out of the EU and sit down on the floor and cry – like some toddler lost in the maze at Hampton Court. Well, in so far as they doubt our resolve, I believe they are wrong; and I am here to tell you that this country will succeed in our new national enterprise, and will succeed mightily," wrote Johnson.

The Telegraph summarised Johnson's article as a 10-point-plan for a "successful Brexit," with one of the points being "Brexit will be a success."

Other policy proposals include curbing non-UK citizens' property ownership and a push to accelerate work on gene therapy.

The article has been seen as a challenge to Theresa May, who is expected to lay out her plans for a "status quo" transitional deal in a speech to to the world's media next week.

The prime minister will use a keynote speech in Florence, Italy, next Friday to suggest the sort of transitional period that Chancellor Philip Hammond has described a "status quo" arrangement, the Financial Times reports. 

The term "status quo" describes a scenario where Britain would continue with many aspects of EU membership during a period lasting up to three years commencing after Brexit day in March 2019. This could include staying both in the single market and customs union until a long-term arrangement post-Brexit is ready to be implemented.

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LONDON — Startup bank Monzo is doing away with one of its most popular features — unlimited free ATM withdrawals overseas.

The company, which offers a prepaid money card and is rolling out current accounts, is asking its customers to choose the best new charging option for ATM fees abroad, saying its existing policy has become simply too costly to continue.

Withdrawals from international holes-in-the-wall cost Monzo between 1-2% of each transaction. Costs have more than doubled in the last year from £6 to £16 per user, the company says.

"This seems to be a result of a combination of factors, including people using their Monzo cards more frequently, increased awareness of the free cash withdrawals we’ve offered, and people signing up specifically to use the Monzo card abroad," Tristan Thomas, Monzo's head of marketing and community, wrote in a blog post this week.

Anecdotally, this rings true. I have recommended Monzo to friends and family to use when traveling abroad thanks to its free ATM withdrawals and good rates. (I also included it in a roundup last year of fintech products that can help you save money when traveling.)

13% of users account for 85% of the ATM fee costs, Monzo says, suggesting that a small core of users have been using Monzo extensively abroad.

"We want to build a sustainable, viable business that is around for many years to come," Tristan says. "At the moment, the rising costs of foreign ATM withdrawals makes that difficult."

Spending on cards while abroad, online sales in foreign currencies, and UK ATM withdrawals will all still remain free, Monzo says. But it is asking users to what to do about the overseas ATM withdrawals, offering three options:

1. 1% charge for ATM withdrawals in Europe, 2% charge for withdrawals Rest of World
2. 1.5% charge for ATM withdrawals everywhere outside the UK
3. £200 free allowance per month, 3% charge for withdrawals thereafter everywhere outside the UK

Monzo is inviting feedback from its customer base on its website here.

Fintech's fee problem

The company is not the first fintech to run into issues with ATM withdrawals. Last year German startup bank N26 shuttered some customer accounts, saying they were running up too great a cost in ATM fees. Travel money card Revolut also introduced fees for ATM withdrawals at the end of last year.

All are grappling with a core problem for many fintech startups — can they convert all their users into paying customers?

Businesses like Monzo and Revolut have caught the attention of investors and the press thanks to the rapid growth of their customer bases. Revolut didn't exist two years ago but already has over half a million users.

Many people have undoubtedly signed up for startups like these because of the low-cost or free services that they offer. Usually, the costs of these services are simply absorbed by the business.

These startups argue that, while giving things like ATM withdrawals costs them money, the cost of user acquisition is still lower than what traditional banks pay. If they can make money from a user through another service, overdrafts say, once they've hooked them with free withdrawals, the up front investment and economics make sense.

However, both Revolut and Monzo are loss making and the claim that they can ultimately make enough money from users to cover costs remains just a theory.

Early indications suggest it could be easier said than done. Travelex launched a card to rival Revolut last year, the SuperCard, which offered free spending abroad but a 2.99% fee on any ATM withdrawals. Clearly, the hope was that customers would get the card but end up doing an ATM withdrawal here and there, giving Travelex a bit of revenue.

Things have not gone to plan. Travelex shut down the SuperCard scheme in May, citing "much higher than anticipated" costs. It seems that it is easier to simply charge the customer the foreign exchange fees up front so that everyone's on the same page.

There are other examples of plans going awry. Monese, a banking app for migrants, found that when people reached their monthly free activity cap, rather than pay for services people just stopped using the app. It has since pivoted to a paid-for model, to ensure customers are willing to pay from the start.

Across fintech, we may well see the growing creep of up-front charges for services as many startups clock that giving away freebies is not quite the same as winning loyal customers.

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LONDON – Ratings agency Moody's warned that bundles of pubs' debt will suffer over the next 12-18 months, as earnings are hit by a decline in demand for beer, a weak pound and rises in the national living wage and inflation.

"Debt serviceability and leverage of rated transactions show early warning signals," Moody's said, referring to the difficulty pubs are having in using cash-flow to service their debt.

The credit rating firm said that "debt multiples have largely shown a downward trajectory in recent years. However, there are signals that the decline is slowing and may potentially start rising."

Pubs have been hit by a general consumer spending slowdown, as well as changing tastes and fashions.

"Pub operators' earnings are being curtailed by changes in consumer demand away from beer consumption as well as macroeconomic factors," said Thomas Rahman, an analyst at Moody's, said in the note.

The changing landscape

In 2011, pubs across the UK were closing at a rate of 29 per week, and the number of pubs in the UK fell by almost 10,000 between 1997 and 2015. Between 2000 and 2016, total beer sales in the UK also fell 23.5%, from 140.5 million barrels to 107.5 million barrels. This, said Moody's, can be explained by a combination of the availability of cheap alcohol at supermarkets, lower levels of disposable income post-financial crisis, growing health concerns and the 2007 ban on smoking indoors.

However, pubs' turnover has remained generally stable, as many have turned to selling food and rebranded to become gastro-pubs and incorporate restaurants, and Moody's estimates food sales now represent about half of total pub sales. The work needed to convert pubs, however, requires substantial upfront costs, which has limited free cash flow growth.

Brexit and wider economic changes

The rise of the national living wage — which went up to £7.50 per hour in April 2017 — has also negatively impacted profits: Moody's estimates that Spirit's employments costs will rise by about £8 million, while M&B will spend an additional £28 million on wages. The planned further increase to £9 by April 2020 is also predicted to cause problems.

Aside from the impact it has already had on inflation and a weaker pound, Brexit poses a more direct risk to the future of pubs: a significant proportion of the food and drink sold at pubs is imported, and Moody's expects costs to rise by 5% year-on-year until 2019.

"Annual wholesale food inflation had increased to 6% in March 2017... and inflationary costs pressures are anticipated to continue through the second half of the year and into next year at a similar level," M&B reported in its H1 2017 results.

To help offset rising costs, pub wholesalers have turned to selling land adjacent to pubs, as well as leasing some of their properties to other businesses or selling outright.

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 Well, that didn’t take long. Yesterday, China’s longest running bitcoin exchange, BTC China, announced it will suspend its local trading service at the end of this month, and today the country’s two other major exchanges — Huobi and OKCoin — followed suit to say they will cease at the end of October. The writing was on the wall when The Wall Street Journal… Read More

The post Bitcoin Price Analysis: How Rumblings From China Play Into Wyckoff Distributions appeared first on Bitcoin Magazine.

A new exchange is courting users of the now-defunct BTC-e exchange, but it bears a striking resemblance to its illicit predecessor.