Business and financeButtonwood's notebook

Foreign investors snap up London's iconic buildings

LONDON’S skyline has altered a lot in the last 30 years. While it can’t match Manhattan or Chicago, there are quite a few trophy buildings that can be seen from this columnist’s office window (for the moment*). The British sense of humour means these offices often acquire their own nicknames, regardless of the developer’s intentions—the Cheesegrater or the Gherkin, for example.

And the buildings also tend to get snapped up by foreign investors (see map). The latest to go is the “Walkie talkie” at 20, Fenchurch Street which has been bought by Lee Kum Kee, a Hong Kong food company, for £1.3bn, the highest amount ever paid for a British building. Presumably the company, best known for its oyster sauce, is not planning to transfer production to the site; this is a punt on the London property market.

Ironically, it was only a year ago that many Continue reading

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The link between poor harvests and violence

The very dark ages

LAST year over 102,000 people died in nearly 50 armed conflicts across the world, according to the Peace Research Institute Oslo, a think-tank. Much of this violence is caused by tensions between ethnic groups—two-thirds of civil wars have been fought along ethnic lines since 1946. Yet historians differ over whether cultural differences or economic pressures best explain how tensions explode into violence.

A new study* by Robert Warren Anderson, Noel Johnson and Mark Koyama suggests that, historically, economic shocks were more strongly associated with outbreaks of violence directed against Jews than scholars had previously thought. The authors collected data for 1,366 anti-Semitic events involving forced emigration or murderous pogroms in 936 European cities between 1100 and 1800. This was then compared with historical temperature data from a variety of sources, including tree rings, Arctic ice cores and contemporary descriptions of…Continue reading

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The closing of American bank branches

WINDSOR, a community of 6,200 people two hours outside Albany in New York state, offers many of the amenities commonly found in a small town, including a bakery, a car-repair outfit and several restaurants. There is just one thing missing: a bank. The town’s only financial institution, First Niagara Bank, shut its doors in October.

Towns like Windsor are becoming ever more common in America. Since the financial crisis, banks have closed over 10,000 branches, an average of three a day. In the first half of 2017 alone, a net 869 brick-and-mortar entities shut their doors, according to S&P Global Market Intelligence, a research firm. Some fret that branch closures risk turning poorer neighbourhoods into “banking deserts”, cut off from current accounts, loans and other basic services.

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Can data predict fashion trends?

World of wardrobe

IN THE film “The Devil Wears Prada”, the character of Miranda Priestly, whose role is based on a feared Vogue editor, scolds her new assistant for not understanding fashion. Fashion, she tells her, is whatever a select group of designers and critics says it is. What she does not say, however, is that their judgments are themselves often influenced by another group: fashion forecasters, who predict what will be “in”. Might these seers of style in turn be undone by artificial intelligence (AI)?

Fashion forecasting has always been a peculiar profession. The business came into its own in Paris in the 1960s when agencies began releasing “trend books”, collections of fabrics and design ideas. Retailers use these books for inspiration as they put together designs.

The biggest of these forecasting firms is WGSN, with a market share of 50%. It employs 150 forecasters who scour the world’s catwalks, bars…Continue reading

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Tech stocks have regained their dotcom-era highs

CAST your mind back to when Bill Clinton was president, Tony Blair and Vladimir Putin were fresh-faced new leaders and tweeting was strictly for the birds. That was when technology stocks, as measured by the S&P 500 tech index, last traded at their current levels.

The horrendous decline in share prices that followed the peak in 2000 was the first financial calamity of this millennium. The dotcom crash had much less impact on the broader economy than the mortgage and banking crisis of 2007-08. Nevertheless, the tech revival has caused some twitchiness among investors. Might history be repeating itself?

In the intervening years the world, and the tech industry, have changed a lot. In the late 1990s enthusiasm for tech shares was so great that the sector’s market value rose far faster than its earnings. The gap is nothing like as great today (see chart). Back then, leading firms like Microsoft and Oracle were valued at more than 20 times their annual revenues, let alone earnings….Continue reading

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Making Bitcoin work better

IN DIFFERENT circumstances the two people could be good friends. Each is rather shy and very smart. And each is passionate about bitcoin, a digital currency. One invented hashcash, which foreshadowed components of the crypto-currency; the other is the author of the first Chinese translation of the white paper in which Satoshi Nakamoto, the elusive creator of bitcoin, first described its inner workings.

Adam Back is the chief executive of Blockstream, a British startup, which employs some of the main developers of the software that defines bitcoin’s inner workings. Jihan Wu is the boss of Bitmain, a Chinese firm, which makes about 80% of the chips that power “miners”, specialised computers that keep the bitcoin network secure, confirm payments and mint new digital coins. But far from being fellow-travellers, each represents one of the two main camps in what has come to be called a “bitcoin civil war”, fought over how, if at all, the system should grow.

The worst seems…Continue reading

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