Tag: Approved

YOU have multiple jobs, whether you know it or not. Most begin first thing in the morning, when you pick up your phone and begin generating the data that make up Silicon Valley’s most important resource. That, at least, is how we ought to think about the role of data-creation in the economy, according to a fascinating new economics paper. We are all digital labourers, helping make possible the fortunes generated by firms like Google and Facebook, the authors argue. If the economy is to function properly in the future—and if a crisis of technological unemployment is to be avoided—we must take account of this, and change the relationship between big internet companies and their users.

Artificial intelligence (AI) is getting better all the time, and stands poised to transform a host of industries, say the authors (Imanol Arrieta Ibarra and Diego Jiménez Hernández, of Stanford University, Leonard Goff, of Columbia University, and Jaron Lanier and Glen Weyl, of Microsoft). But, in order to learn…Continue reading

EVERY year, like clockwork, swathes of humanity go through the same routine. On December 26th and January 1st, as the fog of cheese, chocolate oranges and champagne lifts, remorse creeps in. Online searches for “get fit” and “lose weight” surge (see chart). Health clubs of all shapes and sizes stand ready to respond. “Intent typically takes seven to 14 days to turn into reality,” notes Humphrey Cobbold, chief executive of Pure Gym, Britain’s largest gym chain. So this week will be one of the busiest for the gym industry globally.

There will be other ripple effects, too. According to recent data from Cardlytics, which monitors spending in Britain, people spend 18% more in sports shops the week before joining a gym (compared with the week prior), and 16% more in speciality health shops. Spending on fashion items also increases around the time of joining a gym.

Many gym recruits will wear their new togs for an ordeal known as high-intensity interval training. In the basement of…Continue reading

IT STARTED as a joke. Dogecoin was launched in 2013 as a bitcoin parody, using as its mascot a Japanese shiba inu dog, a popular internet meme. The crypto-currency was never really used, except for tipping online, and one of its founders has called it quits. But recently its price has soared: on January 7th the dollar value of all Dogecoins in circulation reached $2bn, a sign of how crazy crypto-currency markets have become. It is also a reminder that, for all the focus on bitcoin, it is no longer the only game in town. Its market capitalisation now amounts to only about one-third of the crypto-market (see chart).

A new crypto-currency is born almost daily, often through an “initial coin offering” (ICO), a form of online crowdfunding. CoinMarketCap, a website, lists about 1,400 digital coins or tokens, including UFO Coin, PutinCoin, Sexcoin and InsaneCoin (worth $7m). Most are no more than curiosities, but by January 10th, around 40 had a market capitalisation of more than…Continue reading

THE two most successful entrepreneurs on Wall Street of the past two decades work on opposite sides of Park Avenue. Larry Fink, 65, is a Democrat whose hand is glued to a Starbucks cup and who runs BlackRock from 52nd Street. Stephen Schwarzman, 70, is a Republican who wears striped shirts with plain collars and runs Blackstone from between 51st and 52nd. The two are ex-colleagues, but have sharply opposing views on investment and management. Their trajectories illustrate how finance is changing. Mr Fink, once the underdog, is on top.

His firm, BlackRock, is the world’s largest asset manager, with $6trn of assets. It stands for computing power, low fees and scale, and is booming. Mr Schwarzman’s firm, Blackstone, is the largest “alternative” manager, focused on private equity and property, with $387bn of assets. It stands for a time-honoured formula of brain power, high fees and specialisation. Lately, it has trod water.

When Mr Fink was a securities trader in his 30s he joined…Continue reading

THEY are not extinct, nor even on the endangered-species list. But company analysts, once among the most prestigious professionals in the stockmarket, are being culled. New European rules, with the catchy name of MiFID2, have just dealt analysts another blow. A study by Greenwich Associates estimates that the research budget may drop by 20% this year.

In their heyday in the late 1980s and early 1990s, analysts could make and break corporate reputations. A “buy” or “sell” recommendation from the leading two or three analysts in an industry could move a share price substantially. Fund managers, and many financial journalists, relied on analysts to spot those companies that were on a rising trajectory, and those where the accounts revealed signs of imminent trouble. And the best analysts were very well paid.

But that golden age was built on some rusty foundations. Analysts were well paid because they worked for the big investment banks. But those big banks made money…Continue reading

It didn’t mean jack

“THE geopolitical environment has changed considerably since…a year ago.” That was the explanation given this week by Alex Holmes, chief executive of MoneyGram International, a Dallas-based American money-transfer firm, for Ant Financial abandoning its $1.2bn deal to buy his firm. Ant, the online-payments affiliate of Alibaba Group, a Chinese e-commerce giant, had outbid Euronet, an American rival, in 2017 and secured the approval of MoneyGram’s board for the acquisition. In normal times, Ant would have secured the prize.

But it is up against a rising tide of anti-China sentiment in Washington, DC. Donald Trump has often argued that China does not play fair in global commerce. The sense that China and its companies are not to be trusted is spreading on Capitol Hill, too. Ant’s bid was blocked by the Committee on Foreign Investment in the United States (CFIUS), a government body reporting to the Treasury. It reviews such deals for…Continue reading

Benioff’s guide to upselling

VISIBLE from nearly every corner of San Francisco and from up to 30 miles away, the new skyscraper that will be the headquarters of Salesforce, a software giant, stands 1,100 feet (326 metres) tall, making it the highest building in America west of Chicago. On January 8th, after four years of building, workers will start moving in.

Those who know Salesforce’s founder, Marc Benioff, find his firm’s new digs fitting. As creator of a firm that caters to salespeople, he is himself a fiercely ambitious salesman. In its 2018 fiscal year, which ends on January 31st, Salesforce is expected to reach $10bn in annual revenue for the first time. It plans to more than double that figure over the next four years. Even that is not enough. In 20 years Mr Benioff’s “dream” is $100bn of revenue, he muses.

Can his towering expectations be met? Founded in 1999, Salesforce claims a combination of longevity and size that few tech companies…Continue reading

AS KIM SANG-JO was preparing last May to make the switch from snappy shareholder activist to a regulatory role as South Korea’s fair-trade commissioner, he had a simple message for the country’s big conglomerates: “Please do not break the law.” Not one to make bosses quake in their brogues, exactly. And yet the chaebol, as the country’s family-controlled empires are known, are responding to his call for reform. Addressing complaints about governance, a few have brought far-flung businesses into a simpler holding-company structure. Others have set up funds to provide support to suppliers, which have long accused the giants of treating them badly. Another group is paying out record dividends to once-disregarded shareholders.

Mr Kim was preaching, if not yet to the converted, then to the disconcerted. The chaebol have had a bruising couple of years. Nine of South Korea’s most powerful bosses, some rarely seen in public, were grilled on…Continue reading

WHEN reports surfaced in 2016 of foreign students with no known income buying homes worth millions of dollars in Vancouver, locals said it was yet more evidence that foreigners were inflating prices in Canada’s dearest property market. It was also evidence of a home-grown problem. The students turned out to be figureheads for anonymous firms whose ultimate owners cannot be identified because the information is not legally required by the land registry. Canadian authorities are concerned about the abuses caused by such opacity. The property market may well be attracting foreign criminals and corrupt officials seeking to launder dirty money, notes David Eby, the attorney-general of British Columbia.

Other countries have taken steps to make sure that anonymous ownership of firms does not help criminals. In 2014 G20 leaders agreed to make the ultimate ownership of legal entities more transparent. Britain, for example, set up a searchable, public database of beneficial or ultimate owners of all firms,…Continue reading

AFTER years of rule-drafting, industry lobbying and plenty of last-minute wrangling, Europe’s massive new financial regulation, MiFID 2, was rolled out on January 3rd. Firms had spent months dreading (in some cases) or eagerly awaiting (in others) the “day of the MiFID” when the law’s new reporting requirements would enter into force. One electronic-trading platform, Tradeweb, even gave its clients a “MiFID clock” to count down to it.

Apprehension was understandable. The new EU law, the second iteration of the Markets in Financial Instruments Directive (its full, unwieldy name), affects markets in everything from shares to bonds to derivatives. It seeks to open up opaque markets by forcing brokers and trading venues to report prices publicly, in close to real time for those assets deemed liquid. It also requires them to report to regulators up to 65 separate data points on every trade, with the aim of avoiding market abuse.

The changes are greatest for markets, like those in…Continue reading