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Is the Islamic State responsible for Android Pay?
<p>At first glance, the notion that Islamic State - formerly ISIS  (Islamic State of Iraq and Syria) - has a part to play in the birth of Android Pay is absurd, but its not impossible. No one is suggesting that the Islamic terrorist organisation  has a secret cell of programmers moonlighting  in Mountain View, however the group's mere existence may have set off a chain of events that inadvertently brought us Google's latest payment's platform.</p> <p>This is what's suggested by fintech blog Mobile Payments Today which insists that to understand Android Pay one must start with ISIS. Why? Because the IP behind the Smart Tap technology that is at the center of Android Pay's value proposition was actually acquired by Google when it bought a company called Softcard in 2013.</p> <p>Softcard was a joint venture created in 2010 by AT&amp;T, T-Mobile and Verizon back when it was called Isis, at a time when name was more closely associated the Egyptian goddess. It was only when the terrorist group ISIS came onto the scene they were forced to change their name. Supposedly the brand never recovered from the name change, making it easier - so the logic goes - for Google to acquire them and their IP, and eventually bring us Android Pay.<br /> Photo: FutureTrillionaire</p>
Goldman, Barclays, RBS execs named London’s top 1000 financiers
Lifestyle, 4:01
<p>They are the royalty of London’s financial world, the individuals involved in the biggest deals and setting the economic policy agenda, reports FinBuzz. They are the most influential people in the City, according to the Evening Standard.</p> <p>The list, compiled by the Evening Standard and broken down into several subcategories, includes CEOs of major global banks, hedge fund managers, Bank of England economists, and professionals across varied financial spheres.</p> <p>Many are not native Brits, but have made London their home, either by choice or the lure of business.</p> <p>Xavier Rolet <br /> Chief executive, London Stock Exchange</p> <p>The 56-year-old French man has been at the held of the London Stock Exchange since 2009. Before he held senior roles at Goldman Sachs and Lehman Brothers in London.</p> <p>John McFarlane<br /> Chairman, Barclays</p> <p>The Scottish-born banker was named Barclay’s chairman in 2014, just months before the abrupt departure of chief executive Antony Jenkins. Before he was the director of RBS, Citibank, and ANZ.</p> <p>Sir Howard Davies<br /> Chairman, Royal Bank of Scotland</p> <p>Sir Howard became the chairman of the bank’s board just a few weeks ago. He will have to navigate the bank, which received a £45 billion bailout in 2012, through the major restructuring. Before he worked at the UK Airports Commission as well as Deputy Governor of the Bank of England.</p> <p>Michael Sherwood and Richard Gnodde<br /> Co-chief executives, Goldman Sachs International</p> <p>Michael Sherwood, a native Londoner, has been the Co-Chief Executive Officer at Goldman since 2005 after joining the company in 1986 and becoming a partner in 1994. Richard Gnodde, born in South Africa, joined Goldman just one year after Sherwood, and became co-chief in 2006.</p> <p>Colm Kelleher<br /> Chief executive, Morgan Stanley international division</p> <p>The 58-year old Irish banker, though he keeps a low profile, is one of the City’s highest paid executives. Bloomberg estimates that Kelleher, who has been the president of institutional securities since 2013, has a total yearly compensation of more than $20 million including options.</p> <p>Stephanie Flanders<br /> Managing director, UK and Europe, JP Morgan Asset Management</p> <p>Flanders worked for the BBC as an economics editor for 11 years before jumping ship to JP Morgan. She is still very active on Twitter where she has over 115,000 followers.</p> <p>James Bardrick<br /> UK chief county officer, Citi</p> <p>The 52-year old banker from Exxex never actually intended to be a banker, but an engineer. As the UK country officer, a role he has held since February 2014, he is responsible for 10,000 Britain-based staff. Before Citi, he worked at Schroders, which was acquired by Citi in 2000.</p> <p>Inga Beale<br /> Chief executive, Lloyd’s of London</p> <p>Besides being Llyod’s of London’s first female boss in the company’s 325-year history, the 51-year old is also a former rugby player, and nearly went pro. Before, she worked at Canopius, Zurich Insurance Group, and GE Insurance Solutions in the US, London, France, Europe, Germany, the Middle East, and Africa.</p> <p>António Horta-Osório<br /> Chief executive, Lloyds Banking Group</p> <p>The Portuguese native has played a large role in restructuring the one-f</p>
James Grant: The next thing might be helicopter money
Capital Markets
<p>James Grant, Wall Street expert and editor of the investment journal «Grant’s Interest Rate Observer», warns of ever more extreme central bank policies and bets on the comeback of gold.</p> <p>The global financial markets are under severe stress. The postponed interest rate hike in the United States, the fast cool down of the Chinese economy and the crash in the commodity complex are causing a great amount of unease among investors. Fear is growing that the world slips into recession. «Central bank policy is intended to paper over the cracks in the systems. Seven years after the outbreak of the financial crisis we’re paying for this with a lack of growth», says James Grant. The sharp thinking editor of the iconic Wall Street newsletter «Grant’s Interest Rate Observer» draws worrisome parallels between the command based central planning of the Chinese economy and the economic policies in the West. He also doubts that Fed Chair Janet Yellen is the right fit for the top job at the world’s most powerful central bank. Looking for protection he points to gold and shares of gold miners</p> <p>Jim, since the fall of Lehman Brothers Holdings Inc Plan Trust (OTCMKTS:LEHMQ) seven years have passed now. In what kind of world are investors living in today?</p> <p>James Grant: It seems longer ago, doesn’t it? Certain things have not changed. The first of those permanent things is the nature of human beings who operate in markets and their tendency to buy high and sell low. That is just as it was the day before Lehman failed and it’s just as it will be forever. What’s new and different is the larger than life presence of government in our markets, both with respect to regulation and with respect to the management and the production and the manipulation of money.</p> <p>Are you referring to super low interest rates?</p> <p>James Grant: There is nothing so terribly new about very low interest rates. In the 19th century interest rates fell for most of the area from the end of the Napoleonic wars in 1815 to the turn of the 20th century. But something new under the sun might be very well the hyperactivity of our central banks.</p> <p>But without their interventions we might be even worse off today.</p> <p>James Grant: We are living in the age of magical thinking. Governments through central banks have muscled down money market interest rates to zero and in some cases below zero. Not content with that, they have implemented what economists chose to call «the portfolio balance channel». That’s a very fancy phrase meaning higher stock prices in the interest of rising aggregate demand. That was the theory of the Bernanke Fed and it certainly was the theory of the Chinese communists who sponsored the fly away levitation of the Shanghai A-shares. So the world over – and this goes for Europe as well – central bankers have taken it upon themselves to sponsor great bull markets in the hopes of making people spend more because they will feel richer. That was the theory. But they neglected to think through the full consequences of these policies.</p> <p>The slowdown in China is putting the financial markets under a lot of stress. How bad is the situation?</p> <p>James Grant: If I were a member of the ruling elite of the Chinese communist party I would say to myself: «Wait a second, we were just doing what the capitalist West </p>
Boaz Weinstein sued by Canadian pension fund
Hedge Funds
<p>Boaz Weinstein, the derivatives wunderkind known for such hits as making partner at Deutsche Bank at 27, losing $1.8 billion shortly after, and harpooning the London Whale, is currently accused of cheating one his largest investors.</p> <p>According to the WSJ, the Canadian Public Sector Pension Investment Board – which asked Weinstein’s Saba Capital for its money back – is suing the hedge fund for allegedly marking down “the value of its portfolio right before paying out the redemption request, and then marked the value back up shortly after the money was cashed out.”</p> <p>The lawsuit is massive blow for Saba. After reaching $5 billion in assets post-London Whale, the fund saw its assets shrink to $1.6 billion over the next few years – $500 million of which, belongs to the pension fund.</p> <p>For his part, Weinstein said that the whole thing is “utter nonsense,” adding that the accusations were “completely false,” and that he takes these allegations “very seriously.”</p> <p>With people itching to nail another hedge fund, this should be interesting to watch unfold. Stay tuned.<br /> Photo:</p>
Artcurial gears up for its inaugural HK auction
Lifestyle, 4:01
<p>Paris-based auction house Artcurial is gearing up for its first ever sale in Hong Kong, and apparently, they’re doing it with a bang.</p> <p>Among the items to auctioned off in the From Paris to Hong Kong sale are Picasso’s Buste de femme (HK$20-30 million), Pierre Auguste Renoir’s a portrait of Edmond Renoir Junior (HK$8-12 million), a golden cup from the collection of Count Nicolas Demidov (HK$700,000 to 1,000,000), and a fantastically maintained 1961 300SL Roadster (HK$10-15 million).</p> <p>For the ladies, a selection of “exceptional” exotic-skinned Hermès bags are also set to be auctioned, including “a black porosus crocodile” bag that boasts “red goatskin lining” (HK$250,000-300,000).</p> <p>The sale not only represents the French firm’s incredible growth, but also Hong Kong’s (and Asia’s) ascendancy as an important hub for the art market.</p> <p>Speaking to the SCMP, Artcurial director Isabelle Bresset had this to say:<br /> “The number of Asian clients has been doubling each year since we started Asian art sales in 2011. We need to get used to this new client base and we have to be there to understand our Asian clients better.”<br /> The sale starts on October 5 and previews will be held from the 2nd to the 5th at Spink, Hong Kong.<br /> Photo: German Medeot</p>
Daily Scan: Chinese shares retrace losses; European stocks go down
Capital Markets
<p>Updated throughout the day</p> <p>September 28</p> <p>Good evening everyone. China’s nasty industrial production numbers weighed heavy on Japanese and Singaporean stocks today but China itself seems to have missed the memo. A rally in tech shares led the Shanghai Composite to close 0.27% higher for the day while Shenzhen managed to surge a whopping 2.4%. Here’s how the rest fared:</p> <p> Nikkei 225: -1.32%<br /> Topix: -1.04%<br /> Straits Times Index: -1.45%</p> <p>Things aren’t much better in Europe, in fact, it might actually be worse thanks to the political risk surrounding Catalonia’s recent elections. The FTSE 100 is currently down 0.95%, the DAX down 1.04%, and the CAC down 1.20%. Here’s what else you need to know:</p> <p>Spain's Catalonia a step closer to independence. Catalonia’s independence movement won a historic but incomplete election victory on Sunday night, securing a majority of seats in the regional parliament but falling short of winning an outright majority of the vote. The poll was seen as a test of the region’s desire to break with Spain and set up an independent republic. Financial Times (paywall)</p> <p>Russia wants 'co-ordination' against IS. Russian President Vladimir Putin has called for a regional "co-ordinating structure" against Islamic State (IS). Mr. Putin reiterated his support for Syrian President Bashar al-Assad, who Western countries and the Syrian opposition have said must go. BBC</p> <p>China’s industrial profits slumped at its fastest rate in 47 months. Rising costs and slumping prices led China's industrial profits to sink 8.8% last month from the year before. The spectacular fall has raised more than a few eyebrows over the health of the Chinese economy.</p> <p>Chinese margin trading sinks to 9-month low. It wasn’t all bad news; margin lending in the world’s second largest economy fell to $910 million last week – a 62% decline from its peak back in June. Financial Times (paywall)</p> <p>Xi pledges $2 billion in aid. In what has been seen as effort to boost China’s standing around the world, China’s President Xi Jinping has pledged $2 billion for a development fund aimed at helping the world’s poorest countries attack poverty. SCMP (paywall)</p> <p>Richard Rainwater passes away. Rainwater, who helped the Bass brothers multiply their fortune 100-fold, passed away at his home in Fort Worth Texas due to a rare brain disease. He was 71 years old. Wall Street Journal</p> <p>Xi: “no basis” for long-term yuan devaluation. Speaking to U.S. President Barack Obama, Chinese President Xi Jinping said that “there is no basis for the renminbi to have devaluation in the long run,” adding that “at present, the exchange rate between renminbi and US dollars is moving toward stability.” SCMP (paywall)</p> <p>Iraq agrees to share ISIS intel with Russia, Syria, and Iran. The agreement – announced Sunday – apparently caught the White House off guard. Iraq argues that the agreement was necessary however, given that thousands of ISIS volunteers come from </p>
Weekend Scan: Pope confronts sex abuse; US GDP beats estimates
Capital Markets
<p>Good evening,</p> <p>J-Yell’s recent speech did a lot of good for the European markets. The FTSE closed 2.5% higher, the DAX climbed 2.8%, while the CAC, aided by an upbeat consumer confidence index reading, surged 3.1%. The U.S. didn’t do as well though; while the Dow spiked 0.7%, a huge selloff in biotech and healthcare shares dragged the S&amp;P 500 and the Nasdaq down 0.1% and 1% respectively. Don't forget- the Hong Kong markets are closed Monday.</p> <p>Nevertheless, the world’s largest economy still had a lot of good news to chew on:</p> <p>Pope meets with sex abuse victims. During his U.S. visit, Pope Francis met with adults that were abused by clergy as children. The victims haven't been happy with the Catholic Church's response to the abuse, but for the first time, the pope described the abuse as rape. Reuters</p> <p>U.S. GDP growth beats estimates. America’s final Q2 GDP growth rate was revised higher to 3.9% - beating analysts’ expectations of 3.7% rise and besting the previous quarter’s 3.7% climb. New York Times</p> <p>U.S. consumer sentiment rips higher. The University of Michigan’s highly-watched consumer confidence index climbed to 87.2 in September, well above the 85.7 “flash” reading and even better than the expected 86.7 jump. It’s still below August’s 91.9 final reading though. Forex Live</p> <p>Porsche exec takes over VW. Matthias Müller, Porsche AG’s chief executive since 2010, has been confirmed as the new chief of the embattled German carmaker, Volkswagen. The VW vet is reportedly a straight-shooter, and interim VW chair Berthold Huber calls him “a person of great strategic, entrepreneurial and social competence.” Financial Times (paywall)</p> <p>John Boehner to retire. The Republican Speaker of the House announced that he will retire at the end of October. During an emotional press conference, Boehner said he decided Friday morning to step down. Boehner said that after bringing the pope to the Capitol he had nothing left to accomplish. Boehner’s retirement comes in the wake of inner-party turmoil for the GOP, as the more conservative parts of the party haven’t been happy with Boehner. Politico</p> <p>Putin and Obama to meet in NYC. The embattled world leaders will discuss the tensions regarding Syria and Ukraine, while the leaders are in New York for the U.N. General Assembly. Wall Street Journal</p> <p>Sepp Blatter faces probe in Switzerland. The president of FIFA will be investigated by the Swiss attorney general’s office for corruption. The U.S. is also conducting an investigation of the soccer governing body. Wall Street Journal</p> <p>Blatter’s not the only soccer guy in trouble. Brazilian star Neymar has had almost $50 million in assets frozen by a Brazilian court due to allegations of tax evasion.</p>
Harvard sees market froth, looks to non-correlated strategies
Asset Management
<p>&nbsp;</p> <p>Harvard University seeks strong noncorrelated investing talent as Stephen Blyth, the university endowment’s statistically minded chief executive, looks at the market environment and sees "froth." When making evaluations, perhaps the Harvard Management Company executive might want to consider statistically valid alternative investment criteria to diversify a portfolio to defend against a steep market decline.</p> <p>Harvard Endowment: With Private Equity and IPO valuations high, market appears frothy<br /> The problem, as Blyth sees it, is the market has become “frothy,” a sometimes imprecise description for a market environment that generally speaks to a high level of both market optimism and stock valuations. To make this determination the manager of the world’s largest university endowment at $37.6 billion looks to soaring private equity valuations and then a unique variable that has a limited data set.</p> <p>With IPO valuations in excess of $1 billion dotting the landscape for the first time, this is a breakout pattern that logically correlates to the loose “market froth” definition. But the $1 billion mark being the first test it is difficult to statistically determine that that exact level is the trigger point. However, a relative value analysis with 2001 might be interpretatively instructive when validating the concept.<br /> Harvard Endowment beats benchmarks but is concerned about market environment<br /> After returning 5.8 percent in the year ending June 30, getting hit by half a year of sluggish equity price appreciation and underperforming Hedge Funds who delivered just 0.1 percent, Blyth wants to reinvigorate a stale equity-based portfolio. This might be particularly the case as the Yale University endowment grew by 11.5 percent over the year ending June 30th. While both endowments beat the S&amp;P 500 during the period, which was up just 4.55 percent, and Blyth beat his returns target of five percent above inflation, the focus isn’t so much on competition with other endowments but understanding the market environmental challenges that could be on the horizon.</p> <p>"We are being particularly discriminating about underwriting and return assumptions given current valuations,” Blyth wrote in the report, an issue he might want to visit before the Fed starts raising rates and a government shutdown is placed in the hands of new leadership in the House.<br /> Blyth in process of overhauling investment approach, looks for long / short talent<br /> Blyth is in the process of overhauling Harvard’s approach to investing, eschewing traditional approaches for an alternative that performs well during both periods of equity market strength and weakness. In other words, the British-born fund manager has an eye for noncorrelated investing talent. "In addition, we have renewed focus on identifying public equity managers with demonstrable investment expertise on both the long and short sides of the market," he said.</p> <p>In taking this journey into noncorrelated investing, Blyth might consider some alternative benchmarks for performance evaluation, some of which are not available in textbooks, others which h</p>
Your back-to-school reading list from Goldman Sachs
Lifestyle, 4:01
<p>Summer's over. It's time for back to school reading.</p> <p>Over the next two weeks, Goldman Sachs is assigning reading from their global leaders. Here's the first round of books to bury yourself in this fall:</p> <p> "Man's Search for Meaning" by Viktor E. Frankly, recommended by Bunty Bohra, CEO of Goldman Sachs India, Bengaluru<br /> "My Beloved World" by Sonia Sotomayor, recommended by Edith Cooper, human capital management in New York<br /> "Why Information Grows: The Evolution of Order, from Atoms to Economies" by Cesar Hidalgo, recommended by R. Martin Chavez, Chief Information Officer in New York<br /> "Wolf Hall" by Hilary Mantel, recommended by Pablo Salame, Securities in New York<br /> "How to Stop Worrying and Start Living" by Dale Carnegie and Dorothy Carnegie, recommended by Masanori Mochida, President and Representative Director of Goldman Sachs Japan<br /> "Alexander Hamilton" by Ron Chernow, recommended by Stephen Scherr, finance division in New York<br /> "Revival" by Stephen King, recommended by Susie Scher, investment banking division in New York<br /> "Dead Wake" by Erik Larson, recommended by Gregg Lemkau, investment banking division in New York<br /> "Moonrise" by Ben Bova, recommended by Joanne Hannaford, technology division in London<br /> "Against the Gods: The Remarkable Story of Risk" by Peter L. Bernstein, recommended by David Lang, head of Salt Lake City Office<br /> "Zero to One: Notes on Startups, or How to Build the Future" by Peter Thiel, recommended by Darren Cohen, securities division in New York<br /> "The Wright Brothers" by David McCullough, recommended by Sheila Patel, investment management division in Singapore</p> <p>Photo:  Ginny<br /> &nbsp;</p>
Sigmund Freud the portfolio manager
Lifestyle, 4:01
<p>Byron Wien, former investment strategist at Morgan Stanley (NYSE:MS) (MS) and current Vice Chairman at The Blackstone Group L.P. (NYSE:BX) Advisory Partners (BX), traveled to Austria 25 years ago and used Sigmund Freud’s success in psychoanalytical theory development as a framework to apply it to the investment management field.</p> <p>This is how Wien describes Freud’s triumphs in the field of psychology:</p> <p>“He accomplished much because he successfully anticipated the next step in his developing theories, and he did that by analyzing everything that had gone before carefully. This is the antithesis of the way portfolio managers approach their work.”</p> <p>Wien attempts to reconcile the historical shortcomings of investment managers by airing out his dirty mistakes for others to view.</p> <p>“I think most of us have developed patterns of mistake-making, which, if analyzed carefully, would lead to better performance in the future…In an effort to encourage investment professionals to determine their error patterns, I have gathered the data and analyzed my own follies, and I have decided to let at least some of my weaknesses hang out. Perhaps this will inspire you to collect the information on your own decisions over the past several years to see if there aren’t some errors that you could make less frequently in the future.”</p> <p>Here are the recurring investment mistakes Wien shares in his analysis:</p> <p>Selling Too Early: Wien argues that “profit-taking” alone is not reason enough to sell. Precious performance points can be lost, especially if trading activity is done for the sole purpose of looking busy.</p> <p>The Turnaround with the Heart of Gold: Sympathy for laggard groups and stocks is inherent in the contrarian bone that most humans use to root for the underdog. Wien highlights the typical underestimation investors attribute to turnaround situations – reality is usually a much more difficult path than hoped.<br /> Overstaying a Winner: Round-trip stocks – those positions that go for long price appreciation trips but return over time to the same stock price of the initial purchase – were common occurrences for Mr. Wien in the past. Wien blames complacency, neglect, and infatuation with new stock ideas for these overextended stays.<br /> Underestimating the Seriousness of a Problem: More often than not, the first bad quarter is rarely the last. Investors are quick to recall the rare instance of the quick snapback, even if odds would dictate there are more cockroaches lurking after an initial sighting. As Wien says, “If you’re going to stay around for things to really improve, you’d better have plenty of other good stocks and very tolerant clients.”</p> <p>It may have been 1986 when Byron Wien related the shortcomings in investing with Sigmund Freud’s process of psychoanalysis, but the analysis of common age-old mistakes made back then are just as relevant today, whether looking at a brain or a stock.</p> <p>&nbsp;</p> <p>Wade W. Slome, CFA, CFP®, Investing Caffeine<br /> DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds, but at the time of publishing SCM had no direct position in MS, BX, or any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be reli</p>