Up Lyft-ing

We’ve commented from our pit here about the arrival on the stock market of app-based ride-hailing companies. You may even have seen the promotion efforts going on about the forthcoming Lyft initial public offering. As we’ve commented before, this will bring to the public markets the first app riding service company. Alongside Uber and others, these companies are insurgents in the comfortable cartel world of taxi firms.

Now what caught our eye recently was this article in the New York Times:

Lyft and Pinterest Won’t Be Giving Shareholders Much Say


What’s going on here?…

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Heavy Lyft-ing

The future, so they say, is with the new economy. New ways of doing things will replace all the old ways in short order. But to do this, you’ve got to displace the existing system. Sometimes innovation brings something never seen before (think Amazon) or provides new ways of doing the same ol’ thing.

That last is the challenge facing the new breed of taxi companies. Sorry, they don’t call them that. They’re different. They’re the future.…

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The Chicken Coop

 

We love eggs but wouldn’t bother to keep chickens in order to get any. We prefer to buy them in the supermarket. But absent a market we’d have to keep those little cluckers in our back garden. Feed ‘em and keep the fox out. A bit of a nuisance really. What we want to do is get the eggs without having to keep the chickens—a bit like a derivative in a way. Get the outcome without the bother of having all the other stuff.…

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Chickens coming home to roost?

Well, well, well. Scaremongering and doomists have been predicting the end of Britain once we Brits leave the European Union—and a double dose of hell if it happens without a deal. We’re doomed, as Jamie Frazier would say.*

Then we read the following in the Financial Times:

Brussels rejects plea for dual-listed London shares trading

EU asset managers warn they could move to UK because of commission’s stance Brussels has rebuffed calls from EU asset managers who want to continue trading dual-listed shares in London after a no-deal Brexit, in an indication of the European Commission’s tough stance on financial services.

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Unicorns and Nightmares

Let it not be said we’re asleep on the job here in our dismal pit. No wide awake are we. Hence, immediately a quill pen started scratching when we read this story on Sky News:

Simba nightmare as mattress start-up’s value crashes to £20m

What’s going on in dreamland? Ah! The lure of riches. It’s that chasing after unicorns that’s got people terrified:

The online mattress retailer has been forced to slash the price at which it raises new funds for the second time, Sky News learns Shareholders in the online mattress retailer promoted by Gareth Bale are facing a nightmare after the company’s valuation was slashed to just £20m in a bid to secure new funding.

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Maple-suckers

Sometimes what you read makes your eyes pop out of your head. And, no, it isn’t the salacious gossip about Justin Bieber and his new wife Hailey. Listen, what’s got our attention and momentarily made us look up from the pit is this report from CNN Business:

A crypto exchange may have lost $145 million after its CEO suddenly died

Now we know crypto is the wild, Wild West of finance where anything goes. Until the marshal arrives and cleans up the town.…

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A Piece of Cake – Mike Ashley Chases Patisserie Valerie

We’ve into a compare and contrast story here in these Sceptre’d Isles. But first an incy-wincy bit of background. As you will recall, Tim’s being regaling us here with yummy accounts of the travails at Patisserie Valerie. You know, that chain of sweet delight that wasn’t what it seemed. But isn’t that just so true of those cakes you buy that on the outside appear just sumptuous, but when you bite into them they’re a great disappointment?…

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The Problem With Modern Monetary Theory – Explained For Children So MMT Enthusiasts Can Understand

This is a rather good explainer for children about what happens if a country decides it can get richer just by printing a lot more money. Which is, at heart, that modern monetary theory contention, that we can just print lots more money and go buy all the stuff we want. Which isn’t quite how it works out of course. So, the explanation for children, possibly one that’s simple enough for even MMT enthusiasts to grasp it.…

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Fancy That, There Are Costs To Financial Regulation

We really must control the banks you know. Fat Cat B’stards that they are, can’t have them just doing as they wish!

The problem with this is that there are costs to everything. And the more we control he bankers then the less finance flows through to firms. Which, given that a reasonable purpose of a financial system is that firms get financed means that perhaps we don’t actually want to regulate them bankers too much:

The micro impact of macroprudential policies: Firm-level evidence
Meghana Ayyagari, Thorsten Beck, Maria Soledad Martinez Peria 11 December 2018

Macroprudential tools have been implemented widely following the Global Crisis.…

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Laurence Kotlikoff On What Really Produced The Recession And Crash – No, Not Bad Bankers

It’s not necessary to entirely agree with this analysis to grasp and agree with the underlying point being made. It was the structure of the banking system, not the existence of bad actors within it, which led to the crash and thus recession. I’d definitely not agree with the solution either:

The Big Con: Reassessing the ‘Great’ Recession and its ‘fix’
Laurence Kotlikoff 28 November 2018

The general consensus on what caused the Great Recession can be summed up as “bad banks full of bad bankers did bad things”.…

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