John Aglionby Closed Live – Camp Alphaville 2015

Peace, love and higher returns. That’s the overriding theme of Camp Alphaville 2015, the blogging team’s one-day festival of finance, fun and scorching sun.

Across five stages 80 strategists, economists, corporate financiers, futurists and mystery guests will debate China, the euro, the rise of artificial intelligence, currency wars, energy supply and much, much more.

Hello everyone and welcome to this live blog. The camp’s website gives all the details but here’s the schedule for the main stage:

12:00pm Opening Remarks
Paul Murphy, Editor, FT Alphaville
Cardiff Garcia, Editor, FT Alphaville

12:10pm Keynote: Disrupting Death
Transhumanists advocate for overcoming human mortality. To do this, they aim to usher in technologies such as bionic hearts, mind uploading, exoskeleton technology, robotics, nootropics, 3-D printed organs, and cranial implants. They also aim to use Artificial Intelligence to reach the Singularity – a point where intelligence is so advanced it becomes unrecognizable to humans.

Collectively, these technologies and ambitions will forever alter the human species and make human life on Earth transhuman. Subsequently, they will also create vast amounts of new wealth, commerce, and industry.
Zoltan Istvan, Writer, futurist, philosopher and 2016 US Presidential Candidate

1:00pm Networking Break

1:15pm Keynote: The Global Financial Ecosystem 2000 – 2020: Evolution, Disruption, Calibration – Zoltan Pozsar, Director, Credit Suisse
Since 2000, which has been dubbed a “biblical year” for finance, the financial system has adapted more or less organically to regulatory changes imposed on it, but part of this evolution included the emergence and growing significance of the so-called shadow banking sector, in which the conditions for the financial crisis of 2008 were nurtured.
Will post-crisis reforms imposed since the global financial crisis have equally unexpected feedback effects on the system? If so, what industry blind spots are possibly emerging this time round?

2.00pm Keynote: What should we really be measuring? – Diane Coyle, CEO, Enlightenment Economics
GDP – as easy as ABC, 123?
Diane Coyle, economist and author of GDP: A brief but affectionate history, discusses the problem with the statistics we use to understand the economy. We use GDP and other figures to create economic narratives, but how valid are they? Are they really capturing the digital world? Should we be doing a better job of accounting for environmental damage? Will big data make it easier to describe the world around us – or will it instead create an even more confused picture of the economy?

2:30pm Networking Break

3:00pm Keynote: Will we crash again? – Steve Keen, Economist, Institute for New Economic Thinking (INET)
Professor Steve Keen, head of economics at Kingston University London, takes us through the conditions that led us to the current crisis, and shows that the conventional wisdom got the crisis back to front – in effect, they blamed the symptom for causing the disease. The real cause – the bursting of a private debt bubble – hasn’t been addressed, and lies in waiting ready to cause the next crisis in the next 2-5 years. A global crash may not occur – though one in China is a certainty – but the world has “turned Japanese” and false economic dawns will alternate with stagnation from now on. To escape, economists embrace unorthodox thinking and so must policymakers, but the odds are that they will not.

4:00pm Panel: China – Because Xi’s worth it
Anne Stevenson-Yang, Co-founder and Research Director, J Capital Research
George Magnus, Economist, author and independent advisor
Charlene Chu, Senior Partner of Autonomous Research Asia
Moderator: David Keohane, India Correspondent, FT Alphaville

5:00pm Keynote: Smart guy in the room – Andrew Fastow, former Enron CFO
Despite today’s more regulated and enlightened business environment, we continue to witness “Enron-esque” failures of corporate governance.
Enron’s former CFO will make observations about how the ambiguity and complexity of laws and regulations breeds opportunity for problematic decisions and will discuss what questions corporate directors, management, attorneys, and accountants should ask in order to ensure that their companies not only follow the rules, but uphold the principles behind them.

6:00pm Closing remarks

Here’s a photo of the main stage, courtesy of Matthew Klein

There’s already angst among those who can’t make it

Here’s what awaits those attendees wanting a suntan at the camp

FT Editor Lionel Barber is also heading campwards

And if you were worried that the camp might get a bit too serious, here’ some reassurance….

Having said that, it’s good to see at least one of the Camp newbies is a little anxious

The shades and selfies are out in full force

Though not all selfie artists need shades to pull of that arm-length look – I’m sure someone much younger than me told me selfies were so last year, but still

Since Greece is the word of the day for many people, this session will probably be pretty full. Let’s hope the air-con is working…

Hmmm decisions, decisions – perhaps the way to decide is to find the main tent – i hear it’s the only one with AIRCON!!!

Oh and for all you following the blog who don’t happen to be anywhere near London today, or indeed familiar with this great city, I should explain that when the mercury starts to rise anywhere above 25 degrees C (that’s 77 degrees F for our American cousins and UK residents still stuck in the past) it gets a tad sticky.
And the temperatures are set to go way above that today – here’s the BBC forecast for the City of London

Again for those imperial measurement fans, who may not be able to Google a conversion 34 degrees C is 93.2F

And our colleagues at FT Live – they are the ones behind all our wonderful conferences – have spotted a few very sensible peeps

Guess where the FT Comms team is going to watch the proceedings from?

Its up and running. From FT reporter Kadhim Shubber:

And we’re off!

“This is undoubtedly the hottest financial event of the year,” says Paul Murphy, editor, FT Alphaville, dressed in a striking yellow, Butlins-esque, jacket.

Our master of ceremonies, Cardiff Garcia, lays out Camp Alphaville’s mission statement.

“This conference is our response to the many insanely boring finance conferences you’ve visited over the years,”

First up in the main room, we have Zoltan Istvan, writer, futurist and 2016 US Presidential Candidate, Transhumanist Party, on ‘Disrupting Death’

Maija Palmer of the FT’s social media team overheard the following at the camp:

“I feel like I’m at a posh rave!”

Maija Palmer has picked up the first big prediction fo the day:

Zoltan Istvan explains transhumanism – including robotic hearts, cryonics and biohacking.

“Cranial implants will become as common as smartphones,” he says.

Meanwhile,On The Couch is Claudio Borio, Head of the Monetary and Economic Department at the Bank for International Settlements.

Is Zoltan struggling to keep his audience?

Wise words from Claudio Borio, Head of the Monetary and Economic Department at the Bank for International Settlements.

Maija Palmer is clearly enjoying listening to Zoltan Istvan, who tells the audience:

The robot sex industry is already a $100m industry. Some very fringe groups are starting to push for making marriage between humans and robots,

If you bump into one of these characters at Camp Alphaville, they’re not Wimbledon line judges whose uniform went wonky in the wash or Butlins holiday reps, but the Alphaville team. Pic by FT photographer Charlie BIbby:

Paul McNamara, Investment Director, Emerging Markets, GAM Holding AG, is now talking in the Greece tent:

From a Business Insider journalist:

Back to Greece and Rodrigo Olivares-Caminal, Professor of Banking and Finance Law, Queen Mary University London:

Zoltan’s convinced one person at least…

Alphaviller David Keohane has sent the following from the Couch

Claudio Borio, from the Bank of International Settlements, told Matt Klein at Camp Alphaville, that the ECB’s comprehensive assessment — its healthcheck on the regions banks — simply came too late and Europe failed to deal with its banks in time.

“One of the things that should have had higher priority and didn’t get the attention it deserved was dealing with the banking problems. The comprehensive assessment simply came too late. If you do such an assessment earlier, you fix the banks.”

Sometimes you might even need to temporarily nationalise the banks said Mr Borio but “Once you fix the banks, monetary policy will work better… and you’ll be able to get out of the balance sheet problems much earlier.”

“What I found most surprising was this was a lesson we already knew, he added nodding to the Noridcs and Japan in the 1990s.

“The Nordics tackled their problems in the banking system head on. Banks recognised losses very quickly [and] they took over the banks when they needed to take over the banks. Japan didn’t tackle their problems until.. effectively, I would say, the early 2000s. That is one reason they then recovered more quickly while Japan lost a decade.”

After comparing Japan to a frog in boiling water, unsure if it’s in a crisis, Borio said:

“The only way you can tackle these problems is early and head on. Seeing that the future is better than today is aboslutely crucial to engendering confidence today.”

The first question from the audience? “You’ve been making these points for a long time. Do you think you’re starting to get through?”

And here is Claudio Borio speaking to Matt Klein

David Lenigas, the aptly named entrepreneur best known for drilling for hydrocarbons near Gatwick airport, tells FT Alphaville’s Paul Murphy he’s now only on five company boards – down from a peak of more 100 – and plans to cut down those in coming weeks

Zoltan Istvan, writer, futurist and 2016 US Presidential Candidate, Transhumanist Party, is certainly the main event at the moment. The FT’s Kadhim Shubber has just sent this short vision of what is to come:

The future is weird, robotic and transhumanist, according to Zoltan Istvan, writer, futurist and 2016 US Presidential Candidate, Transhumanist Party.

Pointing to technologies as diverse as cochlear implants, vaccinations and cryofreezing, he painted a picture of a world where death has been defeated, and humans have near limitless power to pursue their dreams.

“Dying is not something that is acceptable in the 21st century. If we don’t have to, why should we do it?,” he said in the main room.

But the future has risks too. The advance of artificial technology raises the spectre of Skynet, society will change in unpredictable ways as people live longer, marry robots, and the embrace of implants will give governments new tools for surveillance.

“Privacy is probably going to be dead,” he said, noting earlier that security concerns about his presidential candidacy meant it made sense “to have my four year old [daughter] be chipped so if anything happens she’s easy to be tracked.

However, transhumanism is nothing if not optimistic. Mr Istvan, who became a transhumanist after almost stepping on a landmine, called on massive investment into science and technology to defeat ageing, which he called a “disease”.

“Transhumanists are a people who really love life. they love life enough that they want to preserve it”

Unfortunately he doesn’t seem to have addressed the elephant in the room – if we stop dying, what do about giving birth to new life – the world is already getting pretty full

More from David Lenigas, the Australian serial natural resources entrepreneur
who is exploring near London’s Gatwick Airport. The FT’s Miles Johnson observes that he is at it again.

Mr Lenigas said he was planning to raise funds to launch a new venture
in Cuba, and was talking to an unnamed stock exchange about listing a
cash shell. He said news could come any day soon, so watch this

The FT’s Lizzie Paton is at Camp Alphaville too (I think I’m the only left in the newsroom) and she has send this delightful snap of what appears to be some rather retro or even rather cheap and nasty-looking contraption that I’m assured is a “networking robot” – it reminds me more of a small mobility scooter that my granny never had

Meanwhile life outside the camp goes on – there seems to be some problem with Greece – this just in from the FT’s Stefan Wagstyl in Berlin:

If Greek prime minister Alexis Tsipras is hoping for salvation from the German social democrats, chancellor Angela Merkel’s coalition partners, he had better think again.

Party leader Sigmar Gabriel told the Bundestag today that while solidarity mattered, the fault for the current crisis lay squarely with the failure of successive Greek governments to tackle corruption and vested interests.

While Germany was ready for more talks, he said, nobody should be under any illusion about the terms. “”Nobody can expect conditions for the next programme can be easier than those we have already discussed,” he said.

This in on the footie front via the Twitter of the FT’s Tony Tassell

The FT’s Miles Johnson has just filed this snip from the Currency Wars session, where a revolt appears to be brewing:

Only quarter of an hour in and the session on Currency wars has already renamed itself, with panelist Oliver Harvey of Deutsche Bank arguing the term itself doesn’t really help us understand what is going on in the forex markets. “Inflation targeting wars” is the slightly less catchy alternative the panel decides on…

Next up: Lionel Barber talks to Cardiff Garcia. How many people are in the audience?

More from Miles Johnson on currency wars:

Perhaps counter intuitively the euro has strengthening against the dollar when Greece flares up, Oliver Harvey of Deutsche says. The correlation between risk appetites and the euro has changed over the last year, so when Europeans feel better about markets they invest outside the euro zone and push the euro down. When they get jittery they bring money back into euros, meaning the single currency gets stronger….

I wonder how many campers will agree with this?

Rules don’t apply at Camp Alphaville, as Mile Johnson has found out at the currency wars discussion.

“I don’t think anyone in financial markets believes Greece is actually going to leave the euro,” says Kit Juckes of Soc Gen. “I don’t know why they don’t but they don’t”. A microphone immediately starts to flare up with feedback in the tent. “That’s what happens when you talk about Greece,” another panelist chimes in. The currency wars session was intended to be a “Greece free zone”.

Lionel Barber is trying to do away with at least one of the myriad bits of jargon floating round the camp, telling Cardiff Garcia that “legacy brand” is a nonsense phrase. The FT simply has a brand and makes money, he says.

And again back in the “real” world, there is a bit of a hoo-haa going on after the UK airport commission, led by Sir Howard Davies, came to the rather unsurprising conclusion that Heathrow airport needed another runway. This is obviously going down like a sack of potatoes that has just fallen from the cargo hold of a 777 on approach with local residents and a posse of largely Tory MPs.
But Sir Howard appears to have stumbled on a right tasty little morsel to tempt all those doubter if his plans to expand Heathrow were green-lighted by a rather reluctant-sounding Tory government.
The FT’s Peggy Hollinger filed this little gem earlier:

Sir Howard said the average London air fare could fall by £20 if

Heathrow was expanded. Passengers were paying the price of capacity
constraints which were impeding competition, he said.
However at Heathrow the gain could be reduced by the expected £10 rise
in airport charges.

£20?!!! Really??? Sounds like a number a consultant has plucked from thin air at about 33,000ft after a couple too many inflight drinks

Jonathan Wheatley has filed this summary of the Greek discussion:

Given events this morning, the session on EM bonds became a last-minute Greek energy session. What should the Greek finance ministry do?

Restore the banking sector and deal with the debt, said Rodrigo Olivares-Caminal, specialist in debt restructuring at Queen Mary University London. But that means engaging with the creditors in a meaningful manner. “You can’t call the IMF a criminal institution and then beg for mercy.

Gabriel Sterne of Oxford Economics said the crisis showed the IMF itself was broken and in need of restructuring. Nevertheless, Greece should do as the troika says – but do it outside the eurozone. “This is nothing like Cyprus. Cyprus was more IMF than the IMF. Greece has no constituency that supports any platform [of austerity].”

Both sides were drawing red lines “and the red lines just don’t coincide”.

Paul McNamara, noting that Greece had agreed to 90 per cent of the troika’s demands this morning, said 90 per cent wouldn’t be enough. “The institutions have shown such ruthlessness that complete surrender is the only option on offer. In brinkmanship, the Greeks are totally outgunned.”

Was Germany in 1956 a useful precedent? Yes, said McNamara. But not for debt forgiveness. In Germany, a huge amount of the deposit base had been wiped out. “To deal with debt you have to deal with the debt the banks owe to the populace. If Germany is a precedent, it should be the whole thing, including currency reform.”

Sterne said there was no precedent for debt forgiveness in Germany 56. “It’s never easy to forgive debt. If you’re the whole world, as the IMF is, the pain is divided. In the eurozone, people will say I’m poorer than you, why should I forgive your debt?”

And here is some stuff from the FT’s Lizzie Paton, who is listening to Lionel Barber, who, just in case you weren’t aware, is our big boss:

Editors can’t have friends – so says the FT’s editor-in-chief Lionel Barber.

He’s up on stage with Alphaville’s Cardiff Garcia, who has asked him about how he manages the two parts of his jo: acting as the FT’s representative to the world and meeting with Big Important People, while assuring his reporters he has their backs when they write about said people.

“I don’t have friends, I have acquaintances – an editor can’t have friends,” says our noble leader.

“I’m always getting late night calls or texts – actually they are always texts – telling me we have got a story wrong or encouraging us to see things another way. And I have to listen to both sides – that’s absolutely necessary, but I often stand my ground. Its a balancing act and one I was negotiating just last night.”

It appears that Cardiff Garcia is taking his career into his own hands, reports Lizzie Paton:

New York-based Mr Garcia (who has already hinted to the audience he is going to ask questions to his editor that might end up with him being fired) asks if Britishness is still essential to the paper’s DNA.

When we get a story in a US paper on UK pension funds that none of us give a stuff about, is that a good thing?

“We try to be a truly global news organisation and have 550 journalists from all over the world, and we are telling stories from all over the world too. But those stories that you call quaint and English remain part of the FT fabric. We must continue to report on the City of London, and be true to our roots there. And let’s not forget, the UK remains the world’s fifth largest economy. I am comfortable we can ride these two horses.”

And a bit more from Jonathan Wheatley from the Greece discussion

Who wins and who loses if Greece exits? Everyone loses, was the consensus.

The underlying problem will still be there, with or without an agreement, said Olivares-Caminal. “And if Greece is allowed out, why not tomorrow Germany? You open a door that’s very hard to close.”

More from Elizabeth Paton listening to Lionel Barber:

One guest has suggested that papers like the FT are sullied by a
dependence on glossy advertising. This has the editor quite
riled up:

“You need to be very careful with the suggestion that some advertising like luxury for example is not good for the FT and that we need to avoid it in order to stay pure. we are a premium brand. But we do not allow anybody to control our content. We are not dictates to by anyone. But we need a broad base of advertising both in print and digital and will continue to do so.

“That said, 45 per cent of revenues now come from paid content and subscriptions – that’s a tremendous change of business model in last decade. We are leading the field. But advertising remains critical. We have 100 foreign correspondents providing some of the world’s best journalism – and that needs financial support.”

Jonathan Wheatley has heard more gloom on Greece – not that that’s hard to do.

McNamara: “So much money is needed, and by a country with a demonstrated willingness to default on the IMF. Argentina is self sufficient in food and energy. Greece is not. It doesn’t bear thinking about how bad this could get.,”

The only winners would be Ukip, Putin and the enemies of western capitalist democracy.

Neil Hume, the FT’s commodities editor, also appears to have been listening to David Lenigas – remember him from earlier posts?

It seems he was a bit shy when it came to talking about the huge oilfield that he believes is sitting under Gatwick airport, which is a pity because the good burghers around Gatwick could do with some cheering up today. They’ll no doubt be gutted they didn’t get the second runway that the owners of the airfield so badly want and are now pinning their hopes of on a countryside dotted with drilling derricks and storage tanks.

Anyway, here are the thoughts of our very own Mr Hume:

For a man who claims to have found billions of barrels of oil under Gatwick airport David Lenigas didn’t have too much to say about his gusher in his discussion with Paul Murphy on the main stage.

In fact he was more interested in taking about the giant lithium deposit he’s found in Mexico and his next project Lenigas Cuba. He also talked about his use of Twitter to call out journalists who he disagrees with.

The serial director and share promoter claimed it was the heavy hand of stock market regulation that prevented him from telling us more about the Horse Hill find in Surrey.

Still he managed to lambast the government for the assistance it gives loss making North Sea oil wells when it should be focused on helping the on shore industry.

Asked by the audience what long term oil price he would need to make Horse Hill commercially viable Lenigas said he didn’t know and wouldn’t until all the drilling results were in.

Befitting a wildcatter he was bullish on the oil price predicting it would hit $100 a barrel next year as banks stopped financing US shale producers.

He also agreed that it would be a good idea to bring the cats cradle of companies that have funded horse hill together, to make things more simple for investors.

It’s sizzling in the tents and hot outside, as this photo by Elizabeth Paton shows:

There’s clearly a lot of interest in AI, if this photo by Kadhim Shubber is anything to go by

Tony Tassell, he’s the FT’s deputy news editor, is listening in on the session on football and has this to report:

The environment for doing corporate deals in football is the best for 20 years, according to the veteran sector banker Keith Harris.

Mr Harris, of Football Finance Group, told Camp Alphaville that 4 to 5 football clubs were considering takeover offers and there were 8 to 10 serious buyers ‘waiting in the wings’.

“I suspect there will be quite a bit of action over the next six weeks,” he said.

Mr Harris says football clubs had become much attractive following increased broadcast revenues. the majority of clubs wee comfortably making money.

“In 2016, the lowest performing premier league club will earn £100m in broadcast revenues alone,” he said.

While premier league clubs are attractive much greater interest, Mr Harris said the Football Association was applying much greater diligence in investigating potential owners, checking on their pasts and financing plans for clubs.

Now call me old-fashioned but a banker saying his sector couldn’t be more ripe for deals, is like an estate agent telling you that this 15th century barn near Heathrow airport mentioned in this story will soon benefit from great international transport links

Kadhim was not only taking photos in the AI discussion.

Artificial intelligence got a hammering in the sweltering technology and markets pavilion.

FT Alphaville’s own Isabella Kaminska, hosting the panel discussion, opened with the key question “What will happen when artificial intelligence becomes self-aware?”

The response from the five panellists? What’s AI anyway, tons of capital is being wasted, and it’s mostly just simple stuff dressed up in highfalutin marketing and hype.

Simon Stringer, who is trying to recreate the brain at the Oxford Centre for Theoretical Neuroscience and Artifical Intelligence, set out the current state of artificial intelligence technology.

“Our simulations are on the verge of shedding light on the fundamental nature of consciousness itself,” he said, but cautioned that the first basic systems in 10 to 20 years would be as smart as a mouse or a rat.

The cynicism spiralled from there. Don’t worry about when Skynet takes over the world, said Jamie MacIntosh, of the Institue for Security and Reisilience Studies, worry about all the money we’re wasting now.

“[Artificial intelligence] is oversold, over packaged, over expensive and doesn’t do the job,” he said, pointing earlier to a programme that tried to turn cats into spies with neural implants. One cat, soon after being released, was run over by a car, he said.

Tristan Fletcher, Thought Machine, said a lot of what is labelled “AI” is just “statistics on steroids, or other branches of maths melded with computing science”.

“The stuff that works is really simple. Needless complexity is needless. When you have something that’s a black box that is AI – like, you probably have something you can’t explain to someone and so you shouldn’t be using it,” he said in his opening comments.

Even as artificial intelligence, or complex algorithms, become more complex and widely used, they will make things more, not less, bureaucratic, warned Henry Farrell of George Washington University.

“I’m not sure we’re going to be replacing bureaucracy with quasi artificial intelligence. But we might think about AI generating its own forms of bureaucracy,” he said.

“We’re going to enter a new realm of algorithmic politics, which will make the old stories about bureaucuy look super easy and super simple,” he added.

But while the panel had its feet firmly on the ground, Zoltan Istvan, of the Transhumanist Party, said the mood in Silicon Valley about artificial intelligence was quite different.

“The thing you need to know about Silicon Valley is everyone is drugged out on optimism,” he said.

The FT’s Lizzie Paton, who is out e̶n̶j̶o̶y̶i̶n̶g̶ ̶t̶h̶e̶ ̶s̶u̶n̶s̶h̶i̶n̶e̶ working while we enjoy the splendours of the air conditioned newsroom, is trying to convince us that everyone is having a “wheely” good time at Camp Alphaville

But any sharp-eyed reader would note there appears to be no-one on the ride. They’re probably having too much fun sweltering in the technology and markets pavillion

And any really sharp-eyed reader would have spotted I posted the picture of the empty wheel twice (luckily i have an edit button)

Elizabeth Paton is enjoying a break from the high-level discussions with Camp Alphaville’s DJ in residence, spinning calypso tracks for the crowd…

I blame my lack of concentration on hunger so I’m going to get something to eat in my 5 minute lunchbreak – I’ll leave you in the capable hands of John “Live Blogger” Aglionby – he really is very good

This should be a fun session, about the man who might own Aviva France one day sooner rather than later.

Meanwhile, elsewhere in the camp is a discussion on central banking after the crisis with George Magnus and the FT’s John Authers

The FT’s Maija Palmer has discovered a way to stop the seemingly unstoppable march of AI and robots…

The DJ is not, it seems, to everyone’s taste

There are campers and there are virtual campers at Camp Alphaville

Interesting nugget from the bitcoin debate (see previous entry)

There’s more than just a Ferris Wheel and a DJ to keep the campers entertained….

It appears the Central Bankers are melting:

Some advice for Yanis Varoufakis, the Greek finance minister:

I’m not sure Varoufakis really needed the advice about Bitcoin but hey I guess it was free, which is a bonus

It appears the happy campers at Camp Alphaville having been having a bit of a lunch break, which gave me some time to ponder how the designers of what I’m told is a telepresence robot that has been floored by dodgy WiFi – see post at 2:25pm – might improve on their offering. So I trawled around the net for some examples of robots that aren’t WiFi enabled and I think I found the solution lurking back in the mist of time in the late 1950s in the form of Robby the Robot from the Forbidden Planet – apparently he is/was a mechanical robot so no fancy wireless controls needed for him. He can do all sorts of useful stuff, such as ladder reading it would seem:

Ex-Alphavillian Joseph Cotterill, who is now the FT’s private equity correspondent, is at the session with Professor Steve Keen where the Australian economist and author of Debunking Economics is giving a masterclass in “the childish ways economists think about banking” and why the debt bubbles are still out there.

Some zingers:

“It’s called New Keynesianism — it’s New, but it’s not Keynesianism”

“Self-serving bollocks, but that’s typical of modern academic economics”

“We’ve followed Japan, with an 18-month lag, into the biggest private debt bubble in history”

“They [economists’ don’t factor in what the financial sector fundamentally creates – which is debt – into their macro models”

Mr Keen also warned against taking economics degrees that were a “£9,000 lobotomy”.


And there’s more entertainment for the campers

The FT’s Robert Shrimsley says the future is looking a bit grim:

A future in which insurers force us to wear sensors to get a policy – that’s the scary future imagined by digital health futurist Maneesh Juneja. Within five years it could be “no wearable, no life insurance” he says.

In this future life insurers will use sensors to insist on more healthy lifestyles and raise the premiums for those whose data raises concerns. Enjoy that Mars Bar – it has just added £50 to you premium

Others on the tech panel see a voluntary scheme in which people are rewarded for surrendering their data. But either way it would undermine the pooled risk approach.

Dan Thomas taking over from John Ag after his Herculean efforts this morning. Big shoes to fill (under messy desk)

The FT’s Robert Shrimsley is in a session entitled “Surge pricing your life – Big Data Cometh” from where he sent us the earlier dispatch. Here’s another snap in the words of the economist Diane Coyle:

We are all collecting data like crazy but lots of organisations don’t really know what to do with it. Much more thought needs to go into the practical application of those analytics

So what have I missed? Looks like a cracking central banking discussion, lots of Greek gloom, an imminent robot uprising.. And oh yes a lot of my colleagues looking like 1970s kids entertainers on various stages. Like Glastonbury but without Billy Bragg and A LOT less hippies. Except for the guy playing calypso that we posted earlier.

The FT’s Lizzie Paton reports from what she says was a lively panel on Oil Game theory, which kicked off with a dissection of the consequence of Saudi Arabia’s decision back in November not to support the oil price.

According to Gareth Lewis Davies of EXane BNP Paribas, the call surprised many in the market, expecting the consequences of low prices to trigger geopolitical instabilities and civil unrest.

Emad Mostaque of Ecstrat noted that the impact of Isis on Saudi oil production was overblown, saying that with 600-800m in net cash and £200bn under management, it gave them a long runway – and buffer – to maintain their position.

Because the Saudis are clearly playing a longer term game. “It took a while for that to sink in for investors and will take a while to bear fruit,” said Lewis Davies.

Seth Kleinman of Citi said that this was in part due to a subsequent structural shift in the market that few failed to anticipate.

“We’ve gone from a world of controlled supply and ever higher prices to the era of Teslas and shale…oil is a shrinking market and that transforms the Saudis oil reserves from an appreciating to depreciating asset”.

As a result, production must now be ramped up to pump out as much as possible, and fast. There was an arrogance on the part of the Saudis, he added, as to the enduring importance of the shale boom.

An interesting side effect to be watched, all agreed, was the impact on the plunging oil price on non OPEC research and development projects, in chorus saying that:

“The Saudis are deliberately killing non OPEC investments.”

The reason? That in 3-4 years time, amid sustained demand and declining supply. the Saudis will swoop in and pick up the shortfall, pumping up revenues.

More from the FT’s Robert Shrimsley, this time with a warning from Simon Murray, former Glencore chairman, who says the Americans should be building “fortress Kurdistan”.

The Kurds are good people, he says, and the West should be helping them. In conversation with Paul Murphy he is trenchant about supporting Western allies. He is similarly passionate about Pakistan.

“They are good guys. They like the Brits. We should work on Pakistan.”

Question to Simon Murray: What most motivates you in life?


The FT’s Kadhim Shubber has this Tweet from the session with Professor Steve Keen. The Australian economist seems a bit down on the European Union, or at least the Euro:

Philip Stafford, let out for the day from our Trading Room, finds a limit may finally be in sight in need for speed automated trading at the “Caveat Emptor Strikes back” panel.

Trades can be executed across continents in fractions of seconds, but the panelists saw an end to the arms race. Trading using microwave links wasn’t worth the payoff, argued Yazid Sharaiha from Norges Bank, part of the Norwegian sovereign wealth fund.

But more than two months on since he was charged by the Department of Justice for his role in the flash crash, and the actions of “Hound of Hounslow” Navinder Singh Sarao were still provoking passionate responses about spoofing and other market manipulation.

Spyros Skouras, part academic and part high frequency trader, called on regulators to develop clear guidelines for spoofing, although he acknowledged some forms of accepted market practice would likely become unlawful in five years time. “It wasn’t so long ago that front running was illegal. That’s hard to imagine now,”‎ he said.

Any budding restaurateurs out there take note. The FT’s Tony Tassell has passed on this warning from Polpo Group’s Russell Norman.

He told Camp Alphaville that some 22 per cent of restaurants go bust in the first year. By the end of the second year, the failure rate had risen to 66 per cent. On top if that there was a hidden percentage of restaurants that do not even open their doors.

Mr Norman said many people go into the restaurant trade thinking it was like running a “dinner party with a till”. He said anyone even thinking of opening a restaurant, should work in one for at least a couple of months to see whether they like it.

Mr Norman said there were some notable successes in restaurants such as Scott’s, a restaurant where he once worked. He estimated that restaurant earned about £15m to £20m in revenue and made gross profits of about 10 to 15 per cent of that. Gross margins at his restaurants were about 10 per cent.

Mr Norman rejected the idea that London had reached saturation point in restaurants.

“We are seeing new area opening up. now you can go to places like Bethnal Green, Hackney and even Clapton that five years ago you would not have gone,” he said.

All change at 4pm for the happy campers: main stage sees a talk on China (because Xi’s worth it) with George Magnus, one of the harbingers of credit crunch, the FT’s Izabella Kaminska finds the path to tech godhood, financial regulation on Basel IV and Dan McCrum with…..a mystery short seller

And in another blast from the outside world, perhaps this is the sort of thing Professor Steve Keen was referring to in his comment about the Euro project being helped by Martians wiping out Brussels – see post at 3:53pm

The FT’s Ferdinando Giugliano has flagged this Tweet from Italy’s finance minster Pier Carlo Padoan which in summary says: “Greece’s departure from the euro has never been an option”

Alphaville’s Izabella Kaminska kicks off the “winner takes all” tech debate.

“I think this is the most important debate today,” she says.

An ex-FT hack and former Alphavillian, Tracy Alloway, has this nugget via Twitter:

Dan McCrum’s mystery guest is… famed short seller Dan Yu, the man who under the guise of Gotham City Research took a heavy swipe at UK insurance company and former Aim darling Quindell among others.

He kicks off with a bit about the nature of short sellers – born not made, it seems.

“It is who you are – it is part of your genetic makeup.”

But Mr Yu said he did not believe short seller were natural pessimists.

“I don’t think short selling is about pessimism, it is about being optimistic about justice… You are being bullish about the truth prevailing”.

Rejoice, according to this Tweet, my favourite telepresence robots (they still look like a TV stuck on a mobility scooter) are back up and running – someone must have called BT to fix the Wifi

This from the FT’s Joseph Cotterill who is now at the Because Xi’s worth it session on China:

A gloomy take on China’s political ability to manage a downturn – and the title of Camp’s big China panel – by economist Anne Stevenson-Yang (on right of picture, below):

“Xi’s worth it? Xi’s not there,” she says, referring to Chinese leader Xi Jinping.

“China is saddled with a very antiquated and sclerotic set of institutions… the thing that the Chinese government can do is invest. That’s all it’s capable of doing,” she adds, and it won’t be enough.

Markets maestro Kadhim Shubber at the tech tent is hearing that online platforms should be seen as bureaucracies or proxy political regulators, not straightforward corporates.

Yes, Google, that means you. Henry Farrell, a professor of political science at George Washington University:

Google is effectively a proxy regulator for vast areas of our lives. This makes it a very attractive target for other entities like states who want to regulate by proxy. One cannot create online systems that are platform-like without having some degree of politics involved in them and underpinning them.

It’s thirsty work when you’re camping in the middle of the City especially when only one venue has aircon – but that doesn’t seem to have caused a stampede to the bar

More from outside camp – what would you do with your $32bn fortune? Prince Alwaleed bin Talal Al Saud has just pledged to give it all to charity

And I’m sure if there are any campers reading this blog between sessions they would be alarmed to here about the latest announcement from John Lewis, which had declared its free “click and collect” service “bonkers

Halfway through the “Because Xi’s worth it” China economy panel and its turning into a political science seminar, says Joseph Cotterill. Seems like a good thing too given some punchy stuff from the panellists.

Economist George Magnus:

“It’s not about going to a market economy… it’s about improving the efficiency and control of the party machine.”

Anne Stevenson-Yang, research director at J Capital Research:

“The word reform is used to help attract capital from foreign investors… what’s actually happened in the financial sector is not reform, but encouragement of bad actors to take on debt.”

FT’s John Authers at the Basel IV session (subtitled the Quest for Peace) has found a lively panel on the apparently dry topic of Basel III capital requirements, introduced post-crisis, suggesting it did not go nearly far enough.

London Business School professor Robert Jenkins suggested that “we have Basel IV by the back door, which is the stress testing approach”

He made the point that if people trusted Basel III they wouldn’t need stress tests – so Basel III is a “busted flush”. Bonus level and structure are not the issue, he added, because ” bankers inevitably get it wrong” – they made plenty of mistakes back in the 1970s when they were paid far less. The key is to make sure that when they make a mistake they don’t crash the world financial system, he said.

Jenkins adds that before the Great Moderation – the period of calm before the credit crisis – the banks themselves chose to keep a big capital cushion. Capital controls are also at issue, particularly after recent events in Greece.

Frances Coppola, a well-known financial commentator, said the question for regulators is how much to moderate flows. What is needed to have moderate flows that aren’t destabilizing, she added.

Pointing to recent actions by the Swiss National Bank, she suggested there could be arguments for limited capital controls.

More capital raising for banks ahead?

Robert Jenkins raises the prospect of a leverage ratio (equity to total assets) in the 16-20 per cent range.

At the moment many banks have ratios of 3 to 5 per cent, says Lex’s Oliver Ralph at the Basel IV panel.

Still hotter than heck in the afternoon sun at Camp Alphaville – and rumours that the ice cream has run out as the temperature hits 34 degrees in the sun according to one perspiring camper. (For more up to the minute heat watching, a surprising number of live blogs are available elsewhere)

But the sunshine has not permeated the tech tent, where there are worries that the state of tech platforms may well be taking us closer to the apocalypse itself, according to Kadhim Shubber

Aral Balkan, founder of

“Are we happy with a corporate feudalism? That’s the direction we’re going in now.”

Indy Johar, co-founder of Project00, echoes the sentiment:

“They’re using vast amounts of capital to build monopolistic positions. We seem to have lost all he norms that we thought were right for running an economy”

The final keynote at Camp Alphaville entitled “Smart guy in the room” sees Andrew Fastow, former Enron CFO, take the stage. The FT’s Andrew Hill Tweets:

The FT’s Robert Shrimsley tells us that after showing off his CFO of the year award and prison ID card , Fastow added:
“I was not the chief financial officer. I was the chief loophole officer”

A reflective moment from Enron’s Fastow:

And here is a pic of the apologetic former Enron CFO with what looks like his prison ID in his hand

A Dummies Guide To… SPV Finance, courtesy of Andrew Fastow

Not surprisingly there are quite a few FT journos at the Fastow keynote – this from Anjli Raval, the FT’s oil and gas correspondent:

Fastow is certainly one for soundbite. This from the FT’s David Sheppard:

And David Keohane has helpfully Tweeted an explanation of the mark-to-market part of Fastow’s presentation:

Fastow draws the parallel between Enron and, somewhat inevitably, Greece..

And here’s something from the “How To Deal With Negative Rates?” panel. John Authers, the FT’s senior investment commentator, reports:

Negative rates on bonds are among the most bizarre financial phenomena of the era. They may not be a deliberate policy, but many participants fear that they are dangerous.

Lars Christensen, of Markets and Money Advisory, suggested they were a consequence of the sluggish economy. “We’re looking at negative interest rates as the instrument rather than an outcome of monetary policy. Why? Why not ask about deflation?”

While many agrees that negative rates are lot always a deliberate market distortion, they still have worrying effects on risk.

According to Matt King of Citi : “The reason we see bubbles is not because we’re Austrians, we see people reaching for yield. And people buying things they don’t believe in.”

He also echoed made several times during th day that risks have transferred from banks to large asset managers. He pointed out that there had been a big decline in people saving in money market funds and in bank deposits. Instead, people are saving in long term mutual funds.

“With banks you need guarantees and lenders of last resort,” he said. “Instead we’ve shifted to funds without guarantees and the growing risk of a run on mutual funds”.

David Levy of the Jerome Levy Forecasting Center pointed out that target investment returns for endowments and pension funds “don’t come down over time”. Therefore, as rates fall, they tend to shoot for more capital gains, more leverage and more risk.

In other words, negative rates had made asset managers behave more riskily.

More from Fastow via the FT’s Andrew Hill:

Neil Hume, the FT’s commodities editor, has just sent in this summary of the hour-long presentation given by Andrew Fastow, the former chief financial officer, which set the Twittersphere alight (i may be exaggerating slightly) and has just finished

His main message? Companies can comply with accounting rules but at the same time paint a grossly misleading picture of its true financial picture.

He told delegates that companies who rely too much on mark-to-market accounting to value assets and contracts needed to be watched carefully. The reason? MTM accounting is a black box and like smoking crack it’s addictive.

Overall Mr Fastow expressed remorse for his role in the collapse of Enron in 2001. However he says he was just following the (accounting) rules.

So that’s it. Camp Alphaville is over for another year. Thanks for joining us.

And what have we heard this year? Top economists warning about the future, short selling mystery guests, a Skynet-style dystopia alert (punctuated by our own star robotic campers this year), death as a disease and an apologetic but possibly unrepentant Enron CFO suggesting that there still some pretty smart guys in the room.

And of course Greece, only marginally hotter than the temperature outside as a topic for our always happy campers.

Until next year! αντίο!