Interesting Facts

The UK government paid social media giant Facebook 113 times more in taxpayers’ money for advertising than Facebook paid in corporation tax in the UK. (Government departments spent £489,329 in the 2014-15 fiscal year for advertising on Facebook, who only coughed up £4,327 in corporation tax. They only had to pay such a tiny amount because they recorded a £28.5million loss in the UK, but at the same time they handed staff £35million in share bonuses. Increasingly it seems that the job of governments is to be cleverer than corporations, but I want to know the answer to one question, "What on earth were they advertising?")

On the day the Royal Mail is privatised I think it's timely to remind everyone that even the great white shark Margaret Thatcher refused to flog off the Royal Mail. (Her reason was she wasn't prepared to privatise the Queen's head. In a YouGov poll in July 2013, two-thirds of British adults opposed the privatisation of the Royal Mail. Nice to know that the Tories are listening to the common people.) !Update - Three months on from privatisation, shares are trading around 561p, 70% higher than the original price of 330p.  (I'm still glad I didn't buy any.)

Bernie Ecclestone says he doesn't know what happiness is. (The billionaire controller of Formula One says that fame and fortune have not brought him joy. Hi is currently being charged with bribing a banker to undervalue Formula One shares, and now faces prison in a German court. Maybe that will teach him what unhappiness is.)

According to Bloomberg, the computer trading error that cost Knight Capital, the US market maker $440m (£282m) (see IF 9th Auguts 2012) can be blamed on disused software. (On August 1, the dormant system was accidentally reactivated when a new program was installed. As a result stock trades were multiplied by 1,000, causing wild swings in the share prices of almost 150 companies. So, now we know. The big question is, what are we going to do about it?)

A company called Knight Capital started losing literally $10 million [£6.4m] a minute when they switched on a computer program for trading on the New York stock exchange. (They ended up losing $440 million [£281m], and their shares have now lost 71pc of their value since the error.  The result is the trading company is awaiting a rescue package from a rival firm.  Someone should make a film of the whole thing, and call it "When algorithms collide".)

According to the High Pay Commission, in the UK the average salary is £25,900, but the average Chief Executive (Managing Director) pay is £3,740,000. (That's 145 times more than the average worker. According to the CBI (Confederation of British Industry) you have to pay this kind of money in order to be competitive. A strange argument, given the times we are living in. Come on shareholders! These people are not worth it! They are paying themselves more than ever, but I bet your dividends haven't increased.)

Up to 70% of Wall Street trading is now run by so-called black box or algo-trading (algorithm trading). (In the so-called Flash Crash of 2:45 on May 6 2010, a five minute dip in the markets caused momentary chaos. A rogue trader was blamed for the 10% Dow Jones index fall but in reality, it was the computer program that the unnamed trader was using that was really to blame. The rogue algorithm sold 75,000 stocks with a value of £2.6bn in just 20 minutes, causing other super-fast trading algorithms to follow suit. The market recovered minutes later, and all the chaos forced regulators to introduce circuit breakers to halt trades if the machines start misbehaving, but what really worries me is that no-one has ever managed to figure out what happened.)

German regulators have banned the naked short-selling of shares. (Now this doesn't mean traders have to put clothes on (if they want a go to work naked day they can still do that). According to Wikipedia, naked short selling, or naked shorting, is the practice of short-selling stocks and shares without first borrowing the security or ensuring that the security can be borrowed, as is conventionally done in a short sale. When the seller does not obtain the shares within the required time frame, the result is known as a "fail to deliver". The transaction generally remains open until the shares are acquired by the seller, or the seller's broker, allowing the trade to be settled. Naked short selling can be used to fraudulently manipulate the price of securities by driving their price down, and its use in this way is illegal.[2] However, the practice is considered benign under certain circumstances, such as trading by market makers. As soon as the announcement was mad...

The Icelandic Stock Exchange fell by 76% in early trading as it re-opened after closing for two days last week.

The Church of Sweden is a major shareholder in H&M. (This made me laugh because I didn't even know there was a "church of Sweden".)