Last week the Throgmorton Restaurant came up in conversation and later I was googling around for it and ended up at the Wikipedia page for FT Alphaville and started screaming like a lunatic: "Would you look at this! Look at this!"
Being the only person in the room the response I received was muted but this is what I saw:
FT Alphaville is a daily news and commentary service for financial market professionals created by the Financial Times in October 2006. The founding editor was Paul Murphy he was succeeded in 2017 by Izabella Kaminska....Ha!
There had been no announcement (that I saw) at FTAV regarding who Mr. Murphy's successor would be (he's now doing deep-dive investigations), and not being easily convinced of pretty much anything I had to visit Alphaville's Meet the Team page and son-of-a-gun, words fail but for a sincere: Well Done Izabella.
Now, with that introduction I am going to do something I very rarely do, copy out more than a sentence or three from the FT itself vs. copy-n-paste from the the online flagship which we do at least weekly. I'll explain why after the jump. Here is Ms Kaminska writing at the Financial Times, November 21:
True investing is not the same as gambling
In the face of the cryptocurrency fad, regulators need to underscore this distinction
Just when you thought the proliferation of gambling adverts on British TV, billboards and cyber space couldn’t get any worse, it did. The breaking point for me came after coming across an advert for Foxy Bingo. This features American actress Heather Graham contorting awkwardly as she lip syncs to a broad English accent inviting people to place a £5 bet. The opportunistic celebrity endorsements grate, especially in light of the infantile nature of much of the advertising material. The ads — with their whizzy graphics, cartoon-like characters and storybook references — often purposefully target young people. But the issue at hand is arguably bigger than that. As gambling advertising proliferates to ever greater extremes — fuelled in part by the UK’s 2005 Gambling Act, which allowed for unfettered market liberalisation in the past decade — it threatens to skew the public’s perception of the value it brings to society. Worse than that, it begins to blur the lines between bona fide investing activity and gambling, while opening the door to new gambling fads which seek to pass themselves off as real investing activity. Britain, notoriously, does not tax capital gains on gambling proceeds. The rationale for this is quite straightforward. Gambling is a zero-sum activity — meaning that for every winner there is an equal and opposite loser, plus losses can be attributed to fees and commissions taken by the bookies in hand. If the Treasury was to tax gambling windfalls it should also, so the logic goes, provide tax credits to the losers. Overall this would render any taxing activity a wash. This is not the case for true investing activity. When done right, this sees capital allocated to projects that create a positive sum windfall for all involved.Three quick points:
As sound as this logic is, however, secondary effects come into play which must be considered. Incentives matter. When investing proceeds are taxed but gambling ones are not, the overall share of capital being allocated to one activity over the other is likely to be affected to the detriment of the economy at large. This is especially the case when zero-sum gambling-like activities, such as spread betting, are promoted on financial networks or in the media in the guise of investing services. The question to ask is: what happens to capital allocation when our gambling addiction gets so entrenched that we stop being able to distinguish real investing activity from gambling? We may be about to find out. In the past year spread betting and contracts for difference houses have begun moving with fervour into servicing the latest gambling fad in town, the cryptocurrency boom. These contracts, which allow retail investors to bet on market moves without owning assets directly, have proved particularly popular, fanned in part by advertising campaigns run across public transport networks, the internet and beyond. Unlike spread bets, gains generated by trading contracts for differences are taxed....MUCH MORE
1) the reason I copied out so much of her piece was I am without tech support and not sure how to use the FT's sharing tools and needed to get the meat of her argument out should the link not work.And why did I end up at Alphaville's Wikipedia page? The FTAV Long Room!:
2) As an aside, the line "These contracts, which allow retail investors to bet on market moves without owning assets directly..." is pretty much the definition of a bucket shop's operation.
3) I am going to use this post as a jumping off point for a post on Monday that may take Izabella's thoughts on a tangent that might be consequential for the big internet platforms (he said modestly).
..."The Long Room" is named after a dining room of a City of London bar/restaurant on Throgmorton Street that used to be frequented by stockbrokers, bankers and insurance brokers when the London Stock Exchange was located on Threadneedle Street.Which had a couple of the search keywords for what had been my target:
Throgmorton RestaurantWrapping up: good luck to Ms Kaminska in her new position and to Mr Murphy in his.
The Throgmorton Restaurant, situated at the heart of London's business centre between the Stock Exchange and the Bank of England, was opened on 15 October 1900. Lyons had secured an 80-year lease on a property in Throgmorton Street in 1897 from the Worshipful Company of Drapers and spent £30,000 in building the restaurant and offices above.....MUCH MORE
(although for some reason I am picturing Paul heading up the Zambezi to rendezvous with Joseph Cotterill and continuing on to Lubumbashi DRC to do some ambush journalism on....damn, that's a screenplay)
UPDATE: Here's part I of the promised piece:
Gambling, Investing and Gaming Loot Boxes