Breaking News

John Lothian Newsletter: Deutsche Boerse CEO says consolidation is inevitable; S&P Gets No Respect in Market With Lower Yields After Downgrades; World Bank warns emerging nations

DB’s Reto Franconi says that even if the DB-NYSE merger fails, he’ll still be looking for ways to merge his exchange with others.  S&P’s downgrades of various countries, banks and funds creates a lot of attention, but not much immediate reaction from investors.  The World Bank sounds a grim note to emerging nations, warning them to prepare for financial trouble if the European crisis continues to worsen.  In the top box today, double commentary:  one from Doug Ashburn of JLN FX on Mario Draghi; and one from Jim Kharouf of JLN Managed Futures on the state of the managed futures sector for 2012.

Observations – Statistics – Commentary

Mario Draghi: A Day in the Life of a Central Banker
By Douglas Ashburn

January 12th was a good day for European Central Bank President Mario Draghi – arguably his best day since taking over for Jean-Claude Trichet in October 2011. In his post-meeting press conference, Draghi had mostly good things to say about the state of the Eurozone crisis. The ECB bond-buying program was showing signs of loosening the credit markets. Business sentiment has started to rise. The most recent bond sales in peripheral countries such as Italy and Spain were conducted at substantially lower rates. For example, Italy had just sold one-year bonds at a yield of 2.375 percent, down from 5.952 percent at a December auction. The euro staged a healthy rally against the dollar and other world currencies.

In other words, things were looking up, thanks to ECB policy maneuvers. At one point, in response to a question about whether the ECB would consider future rate cuts, Draghi’s answer contained a hint of chutzpah. He said that, although the bank’s stance remained accommodative – at the meeting the ECB left its benchmark rate unchanged at 1 percent – the bank would monitor inflation and “stand ready to act.” Did this mean that he was not ruling out a rate hike in case of rapid growth in inflation?

Europe went to bed happy on Thursday evening. When the continent awoke Friday morning, however, the world outlook had changed. Rumors were swirling that ratings agency Standard & Poor’s would be initiating a massive downgrade of European countries. Equity markets were reeling. EUR/USD dropped nearly three big figures in half an hour. Bond spreads in the periphery reversed course and began widening once again. According to S&P, the eurozone has yet to properly address the crisis, or even to correctly diagnose the problem.

For the rest of the commentary and the latest FX news, visit the JLN FX website at http://jlne.ws/wHAS6E

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JLN Managed Futures Newsletter: Observations & Commentary
Now that we have entered the latter half of January 2012, we possess all of the data necessary for an objective look back at 2011, and we can use that data to identify key trends for 2012. In this issue of JLN Managed Futures, several recurring themes have manifest themselves:

* 2011 was a bad year for returns on managed futures funds, and on hedge funds in general. However, net capital flows into managed futures, and of hedge funds in general, continue to grow.
* Access to managed futures continues to trickle down to retail investors through managed futures funds and ETFs. Now, private fund managers are lobbying regulators to sever the “information firewall” between accredited and non-accredited investors.
* The fallout from the MF Global bankruptcy continues to affect the industry. Money is still missing, clients are still angry and the calls for reform are getting louder.
* Pensions, endowments, and other institutions are increasing allocations to alternatives. Is this an indication of the importance of diversification, or is it a “Hail Mary pass” to stay in the game after a decade of flat equity returns and ultra-low interest rates? Probably a little of both.

As 2012 progresses, some trends will continue; some will reverse. Other trends will come into play. It should be an interesting year.

For deeper coverage of the managed futures sector, visit the JLN Managed Futures website at http://jlne.ws/wa8g1J

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GFI Group Inc. : GFI Group to supply Energy and Commodities Market Data to E.ON Edis
New York, January 17, 2012 – GFI Market Data, a division of GFI Group Inc., announced today that it has entered into an agreement with E.ON Edis. GFI will supply E.ON Edis with historical data as well as streaming updates.
http://jlne.ws/xQLXg9

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Federal Reserve as a Hedge Fund: Higher Profits, Lower Pay
By STEVEN M. DAVIDOFF – NY Times
The year 2011 is over, and soon we’ll be hearing again about billion-dollar paydays for select hedge fund wizards. If it makes you feel any better, not everyone is sharing in these riches. The people who operate the most successful hedge fund around are receiving a relative pittance.
http://jlne.ws/zJjMUi

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In S.E.C.’s Actions, a Hint at a Tougher Stance
By PETER J. HENNING – NY Times
One of the criticisms that has been leveled against the Securities and Exchange Commission is that even when it has pursued cases, it has not been tough enough in seeking sanctions for violations of the federal securities laws. Since the new year began, however, it seems that the agency has taken a couple of small steps to burnish its image as Wall Street’s top cop. The question is whether these are merely cosmetic moves or a signal of a tougher enforcement stance.
http://jlne.ws/wIAjX5

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NFA Investor Newsletter
In this Issue:
Saving and Investing Tips for 2012
Crowdfunding
Money Smart Week
National Consumer Protection Week
New York Traders Expo
http://jlne.ws/fEOGLZ

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LSOC it to Me! 
ISDA / Derivativiews
The derivatives world is full of acronyms, and we can now add another to the mix: LSOC. If you haven’t heard it yet, it stands for “legally separated, operationally commingled.” Under rules adopted last week by the CFTC (acronym alert!), it is the basis for the complete legal segregation model, which determines how margin for cleared swaps will be held for the benefit of customers of a futures commission merchant.
http://jlne.ws/xp5VdE

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Family Matters and Eurex report year-end fundraising success
Family Matters and Eurex would like to thank everyone who participated in the Family Matters 2011 Year End Appeal. Together we raised $12,630!! Your generous contributions will sustain our youth development programs in the North of Howard community in Chicago. For more information about Family Matters, visit
http://jlne.ws/xPKqXi

*** Thank you to all who contributed.

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Dismay of MF Global clients should spur change
By Jonathan Guthrie – Financial Times
Almost three months later, clients of MF Global’s London arm are still waiting for their money. Overseas insolvency specialists have paid back some, or all, of the cash. That makes the City look a less appealing place to do business.
http://jlne.ws/ypWW2c

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Even Big Companies Cannot Protect Their Data
By NICOLE PERLROTH – NY Times
Barbara Scott just hit the trifecta of computer security breaches. Since the New Year, Ms. Scott has been a victim of three separate cyberattacks. Two weeks ago, the online auction site eBay said in an e-mail to her that there had been suspicious activity on her account. On Monday, she received an e-mail from Zappos and another from 6PM, two online shoe retailers owned by Amazon. Both messages alerted her that — once again — her information had been compromised.
http://jlne.ws/xZVVjf

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Informational Briefing and Market Forecast: New Grains Futures and Options on ICE Canada
Presenters:
Brad Vannan, President, ICE Futures Canada
David Hightower, Founder and Editor, The Hightower Report

ICE Futures Canada is offering new futures and options on milling wheat, durum wheat and barley beginning on Monday, January 23. Please join ICE Futures Canada and the Western Canadian Wheat Growers as they present an informational webinar in advance of the contracts’ launch.

In this hour-long event:
* Brad Vannan, president of ICE Futures Canada, gives an overview of the new futures contracts and a quick primer on the exchange’s markets; and
* David Hightower, president and editor of the Hightower Report and well-known and highly-regarded commodity markets analyst, delivers a forecast for the international grains market in 2012, focusing specifically on the outlook for the western Canada grains, followed by trading ideas for using the new futures and options markets.

Brad and David will take questions after their presentations.

For more information please contact: webinar@theice.com

PRE-REGISTRATION REQUIRED
To register, please visit: http://jlne.ws/zd96d0

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MarketsWiki Page of the Day
Andrew Roper
http://jlne.ws/z30qDF

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MarketsWiki Recent Updates

People 

Peter F. BorishAndrew RoperJean-Claude Trichet

Companies, Organizations and Groups

Capstone Holdings Group, LLCMF Global Holdings Ltd

Miscellaneous

Group of EightComplete clearingClearing Through RingsDirect settlementClearing organization

Statistics

18,405,699 pages viewed, 6,649 articles, 135,626 edits
MarketsWiki Statistics
_______________________________________________________

Lead Stories

Deutsche Boerse CEO says consolidation is inevitable
Reuters
Jan 18 (Reuters) – Deutsche Boerse Chief Executive Reto Francioni signalled that he would continue to look out for consolidation opportunities even if the European Commission blocks the planned takeover of NYSE Euronext.
http://jlne.ws/ABtcRx

S&P Gets No Respect in Market With Lower Yields After Downgrades 
By Simon Kennedy, Zeke Faux and John Detrixhe – Bloomberg
Jan. 18 (Bloomberg) — Investors are again downgrading the decision-making of Standard & Poor’s. Less than a week after the New York-based company cut its ratings of nine countries including France, the French 10-year bond is little changed at 3.08 percent and borrowing costs fell this week at the country’s sale of 8.59 billion euros ($11 billion) in bills. Spain, whose rating was lowered by two levels to A, sold debt at half the interest rate of a month ago.
http://jlne.ws/A45228

World Bank warns emerging nations
By Chris Giles in London – Financial Times
Developing countries should take steps to plan for a global economic meltdown on a par with 2008-09 if the European sovereign debt crisis escalates, the World Bank warned on Wednesday in its latest economic forecasts.
http://jlne.ws/ywhum5

Stanford Professor Becomes Latest To Caution Against Volcker Rule
By Katy Burne Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)–A leading academic warned Tuesday the proposed Volcker rule, banning proprietary trading by U.S. banks and their affiliates, would push up corporate borrowing costs and force the business of making markets in securities outside the traditionally regulated banking system. “These outcomes seem inconsistent with congressional intent, and have unpredictable and potentially adverse consequences for the safety and soundness of our financial system,” wrote Darrell Duffie, finance professor at Stanford University, in a white paper to four federal agencies.
http://jlne.ws/wcufmj

OCC’s Walsh Says Volcker Rule Could Hurt US Banks
By Jamila Trindle, Dow Jones Newswires
WASHINGTON — U.S. regulators’ new restriction on banks’ trading, known as the “Volcker Rule,” could make it harder for U.S. banks to compete abroad, acting Comptroller of the Currency John Walsh said Tuesday.
http://jlne.ws/zc0i3H

Greece Talks to Resume, Issues Remain
By COSTAS PARIS And ALKMAN GRANITSAS – WSJ
ATHENS—Greece’s government is set to resume talks with its private creditors late Wednesday over a plan to restructure the country’s debt as it scrambles to secure a deal demanded by its European partners for a new bailout package.
http://jlne.ws/yp9RHb

Denmark’s AAA Will Survive Record Private Debt, Fitch, S&P Say
BusinessWeek
Denmark, home to the world’s biggest household debt burden, won’t lose its top credit rating any time soon as stable public finances and a current account surplus offset the risks, Fitch Ratings and Standard & Poor’s said.
http://jlne.ws/zMn2l8

IMF Said to Seek $1 Trillion Resource-Boost Amid Euro Crisis 
By Simon Kennedy – Bloomberg
Jan. 18 (Bloomberg) — The International Monetary Fund is proposing a $1 trillion expansion of its lending resources to insulate the global economy against any worsening of Europe’s debt crisis, according to an official at a Group of 20 nation.
http://jlne.ws/x4ym4z

Statement By IMF Managing Director Christine Lagarde Following Executive Board Discussion On The Adequacy Of Fund Resources
Press Release
http://jlne.ws/wkZOVH

Statement By European Commission Vice-President Olli Rehn On The Decision By S&P Concerning The Rating Of Several Euro Area Member States
Press Release
http://jlne.ws/yR15Cp

Statement By The President Of The Eurogroup On The Decision By Standard And Poor’s To Downgrade The EFSF’s Long-Term Rating To AA+
Press Release
http://jlne.ws/zSNOvP

Portugal slips into default territory
By David Oakley and Robin Wigglesworth – Financial Times
Portugal is trading in default territory after investors offloaded the country’s bonds this week amid rising fears of contagion, hurting a government debt auction on Wednesday. Worries are mounting that the private sector and Greece will fail to agree a restructuring package for Athens’ debt.
http://jlne.ws/yyScbS

Why Does European Debt Matter?
Forbes
The darkest cloud hanging over the American economy is still Europe.
http://jlne.ws/yD7rUh

UBS Explains Why AAA-Loss Is Actually Relevant
Zero Hedge
As the buy-the-ratings-downgrade-news surge on European sovereigns stalls (following a few weeks of sell-the-rumor on France for example), the ever-ready-to-comment mainstream media remains convinced that the impact is priced in and that ratings agencies are increasingly irrelevant. UBS disagrees.
http://jlne.ws/ybMXm4

Forecasting toolkit challenged by ‘new abnormal’
By John Plender – Financial Times
Was Standard & Poor’s right to downgrade France and the European Financial Stability Facility, while leaving the UK untouched? We could argue the case. But what is beyond argument is that economic and financial circumstances are so extraordinary that experts everywhere will be making monumental misjudgments on crucial issues for the foreseeable future.
http://jlne.ws/AD9F3S

MF Global Said to Have Told JPMorgan Transfer Was Proper
BusinessWeek
JPMorgan Chase & Co., a lender to bankrupt MF Global Holdings Ltd., was given verbal assurance that a transfer of segregated customer money to pay an overdraft followed the rules governing treatment of customers’ money, according to a person familiar with the transaction.
http://jlne.ws/zSyfJc

Warning on returns from MF Global UK
By Philip Stafford and Simon Mundy – Financial Times
Anger over the pace of returns of money invested through the UK arm of failed futures broker MF Global risks being inflamed further by a blunt warning by the administrator of the business that customers might not get all their money back.
http://jlne.ws/ykhBmP

Environmental Trading News

EU, UN Carbon Prices Could Fall ‘Close to Zero,’ SocGen Says
Bloomberg
Societe Generale SA (GLE) said European carbon permits may fall close to zero should regulators fail to set tight enough limits in the market after 2020.
http://jlne.ws/xMqG2A

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf. 
Visit http://www.jlnenvironmental.com to subscribe.

Exchange & ECN News

EU’s Almunia: Competition Between Exchanges Needed
By Jacob Bunge and Matina Stevis Of DOW JONES NEWSWIRES
BRUSSELS (Dow Jones)–The head of the European Union’s competition watchdog said Tuesday evening that competition among financial exchanges is necessary as the E.U. prepares to deliver a decision on the proposed merger of Europe’s two biggest market operators.
http://jlne.ws/ADFZGD

U.K. Demands No ‘Political Interference’ in NYSE-Deutsche Boerse Merger
Bloomberg
European antitrust regulators must avoid “political interference” as they rule on a proposed merger between Germany ‘s Deutsche Boerse AG and NYSE Euronext, U.K. Treasury Minister Mark Hoban said in the text of a speech.
http://jlne.ws/yqvq92

CME Members May Have Underreported Taxable Income, IRS Says
By Chris Dolmetsch – Bloomberg
Jan. 17 (Bloomberg) — U.S. tax authorities are seeking records from the parent company of the Chicago Mercantile Exchange as part of a probe into whether some members underreported income earned from leasing their seats.
http://jlne.ws/yktI5S

NYSE Amex Options // U.S. Options Market Update – January 2012
This month’s update includes the following topics:
* Year-end Volume Highlights
* Changes to the Penny Pilot Program
* Self-Trade Prevention
* NYSE Technologies Launches Liquidity Centers in Toronto and Tokyo
http://jlne.ws/wAol3q

Bovespa Delays Stock Trading Open Because of Technical Problem on Exchange
Bloomberg
The start of equity trading in Sao Paulo was delayed because of a technical problem on the Bovespa’s Mega Bolsa System.
http://jlne.ws/A4uL0I

Chi-X Canada Welcomes Pico Quantitative Trading to its Financial Ecosystem
Chi-X Canada ATS Limited, a wholly owned subsidiary of alternative trading venue operator Chi-X Global Holdings LLC, today announced that Pico Technologies, a division of Pico Quantitative Trading LLC, will offer its low latency infrastructure from Chi-X Canada’s Primary Data Center at 151 Front Street.
http://jlne.ws/AAVLoX

2011 The Most Successful Year For Tradegate To Date – 75 Percent More Executions – Further Expansion Of Online Information For Private Investors
Press Release
The Tradegate Exchange achieved a new record in 2011 – a total of more than 5.6 million executions were made in equities, funds, ETFs and bonds. This corresponds to 75 percent growth year-on-year (2010: 3.2 million trades). The respective total volume in all securities was E32.7 billion (+84%, 2010: E17.8 billion).
http://jlne.ws/zQHJKL

Derivatives Market: 2011 – Warsaw Stock Exchange In Europe
Press Release
http://jlne.ws/yEfdl7

FIF Capacity Statistics For December 2011
Press Release
http://jlne.ws/ypb6Lo

CME Group Clearing Advisory
NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (PAO, PO) – Effective Wednesday, January 18, 2012
http://jlne.ws/xoFXqn

WSE Introduces More Futures, Including Contracts On WSE Shares
Press Release
http://jlne.ws/wzze2I

MICEX-RTS Group Launches Distribution Of The MICEX-RTS Indices Via The Plaza Workstations, FORTS Trading Workstations, FORTS Plaza II Gateway And FORTS FAST Gateway
Press Release
http://jlne.ws/wBumSM

Banks, Brokers & Dark Pools

Newedge Announces Expansion of FX Group
LONDON, January 17, 2012 – Newedge, a global leader in multi-asset brokerage and clearing, announced today the appointment of Andrew Roper as Director on the foreign-exchange (FX) sales desk. In this role, he will be responsible for providing cross asset sales solutions, while supporting the existing client base and introducing related products to institutional clients. Mr. Roper will work from Newedge’s London office, reporting directly to Michael Bailey, Head of FX.
http://jlne.ws/dxcSLk

Citigroup Joins JPMorgan in Reporting Lowest Revenue Since 2008 
By Donal Griffin, Dakin Campbell and Michael J. Moore – Bloomberg
Jan. 17 (Bloomberg) — Citigroup Inc. joined JPMorgan Chase & Co. in posting its lowest revenue since the height of 2008’s financial crisis as trading slumped. Wells Fargo & Co.’s revenue slid less as core lending businesses improved.
http://jlne.ws/yAfytT

BofA Shrinking Assets Leaves $2.8 Billion Hole in Profit Target
BusinessWeek
Bank of America Corp.’s $33 billion of asset sales last year, designed to help meet international capital standards, may slice at least $2.8 billion from 2012 profit that the firm also needs to reach its target.
http://jlne.ws/wpQQ41

Nomura’s Ashley to Head Fixed Income After Lehman Bankers Quit 
Bloomberg
Jan. 18 (Bloomberg) — Nomura Holdings Inc. named Steven Ashley as global head of fixed income following the resignations of two top bankers who joined when Japan’s biggest brokerage bought Lehman Brothers Holdings Inc. operations in 2008.
http://jlne.ws/w1DNRI

Bank Of America Merrill Lays Off Australian Bankers Michael Lynch, Darren Rehn
By Gillian Tan, of The Wall Street Journal
http://jlne.ws/yj2YER

Citigroup Traders Bansal, Yanney Exit as Pandit Cuts Staff
BusinessWeek
Citigroup Inc., the third-biggest U.S. bank by assets, shuffled its North American credit-trading desk, causing two senior traders to depart as the firm reduces staff, people familiar with the matter said.
http://jlne.ws/A7gstK

$598 Million: New Filings Show How Much Goldman Paid 95 UK Employees In 2010
Business Insider
Regulatory filings for Goldman Sachs Group Holdings (UK) show that it had 95 code staff in 2010 who shared $269.5m (£175m) in cash (including salaries) and were handed 2m restricted stock units (RSUs), worth $320m at the $160-ish share price in 2010. At these prices – and it is an inexact science as the RSUs pay out over five years and their value will depend on the share price in the future (it …
http://jlne.ws/wlJ20h

Moelis Gets $93 Million Investment From Sumitomo Mitsui
By KEVIN ROOSE – NY Times
Moelis & Company, the boutique investment bank founded by Kenneth D. Moelis, has signed an agreement to receive an investment of $93 million from the Sumitomo Mitsui Banking Corporation, one of the largest banks in Japan, and SMBC Nikko Securities, a securities firm owned by Sumitomo Mitsui Banking, the companies announced in a joint release on Tuesday.
http://jlne.ws/wpbqq9

Commerzbank plans to avoid state help
By James Wilson in Frankfurt – Financial Times
Commerzbank has shelved the idea of offloading assets from its troubled Eurohypo subsidiary on to the German government and intends to submit a plan to banking regulators to strengthen its capital without state aid.
http://jlne.ws/wne6x5

TD Ameritrade Earnings: Second Straight Quarter of Rising Net Income
Wall St. Cheat Sheet via Yahoo! Finance
http://jlne.ws/Aben5L

Wells Fargo brokerage unit hit by trading slowdown
Reuters via Yahoo! News
NEW YORK (Reuters) – A slowdown in trading by individual investors put a dent in Wells Fargo & Co’s fourth-quarter brokerage results, the largest U.S. bank by market value said on Tuesday.
http://jlne.ws/xp1sgl

Wegelin Bankers Indicted by U.S. in Tax Crackdown, Bank Says
BusinessWeek
Switzerland’s Wegelin & Co. said three bankers were charged with conspiring to help U.S. clients hide more than $1.2 billion from American tax authorities.
http://jlne.ws/zdauTV

Morgan Stanley Bonus Plan – A Quiet Downsizing?
CNBC
Morgan Stanley anticipates many of its employees may choose to leave the firm following the announcement that cash bonuses above $125,000 would be deferred until next year.
http://jlne.ws/ACnJ5w

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2012/dig011812.htm

David Kotz, Inspector General, to Leave S.E.C.
New York Times
H. David Kotz, who exposed the agency’s early mishandling of the Madoff case, said he will join Gryphon Strategies, an investigative company.
http://jlne.ws/xTQUVn

SEC Inspector General H. David Kotz To Leave Commission
Press Release
http://jlne.ws/wc3vev

SEC Charges UBS Global Asset Management for Pricing Violations in Mutual Fund Portfolios
Washington, D.C., Jan. 17, 2012 – The Securities and Exchange Commission today charged an investment advisory arm of UBS with failing to properly price securities in three mutual funds that it managed, resulting in a misstatement to investors of the net asset values (NAVs) of those funds. The misconduct was revealed during the course of an SEC examination, minimizing investor harm.
http://jlne.ws/AEQtlT

SEC Names Jane Norberg As Deputy Chief Of Whistleblower Office
Press Release
http://jlne.ws/AAc82e

[ASIC] Sydney liquidator prevented from practising
http://jlne.ws/Aa8NjT

New watchdog “must bare teeth” at overdraft fees
Reuters via Yahoo! News
LONDON (Reuters) – Consumer affairs group ‘Which?’ wants the new financial regulator to be held accountable for bank overdraft charges, often criticised for being too complicated to understand.
http://jlne.ws/wx08sQ

Barret Capital Management accused of using client cash for its own purposes
The Canadian Press
TORONTO – One of Canada’s investment regulators has accused Barret Capital Management, a firm specialized in futures and options on metals and other exchange-traded commodities, of using client money for its own purposes.
http://jlne.ws/wjMWfE

Investments – Indexes – Managed Futures – Managed Funds

Asian hedge funds down in Dec, capping 2011 slump
Reuters
(Reuters) – Asian hedge funds tumbled 1.09 percent in December, further depressing returns in 2011, the industry’s first negative year in the region since the 2008 financial crisis, figures showed on Wednesday.
http://jlne.ws/xWE2wX

Renaissance Starts First Hedge Fund in Five Years Trading Stocks
BusinessWeek
Renaissance Technologies LLC, the $20 billion investment firm founded by Jim Simons, is starting a new hedge fund, its first in five years, to trade stocks and futures, according to a document sent to potential investors.
http://jlne.ws/yRcTxd

BofA Merrill Lynch Fund Manager Survey Finds Gloom Lifting Over Global Growth Prospects
Business Wire via Yahoo! Finance
Global investors have started 2012 with a reawakened sense of optimism towards the global economy and greater appetite for risk, according to the BofA Merrill Lynch Survey of Fund
http://jlne.ws/yDxZau

Swaps Dealers Will Spend $504 Million in 2012 to Create and Market Liquidity Aggregation Systems to Buy-Side Clients, Says TABB
NEW YORK & LONDON, January 18, 2012 – Despite the fact that swaps execution facilities (SEFs) don’t technically exist yet and swaps market liquidity isn’t fragmented today, swaps dealers tell TABB Group in a new research report that they intend to spend millions to create, implement and market swaps liquidity aggregation systems to their buy-side client base.
http://jlne.ws/wq1qry

Man Group funds fall 9% as AHL struggles
By Adam Jones – Financial Times
Man Group suffered a 9 per cent quarterly drop in funds under management after AHL, its computer-driven trading arm, struggled to keep up with rapid reversals of market sentiment in October.
http://jlne.ws/w8uXjF

Man Group: Trading statement for the nine months to 31 December 2011
Funds under Management (FUM) at 31 December 2011 of $58.4 billion (30 September 2011: $64.5 billion; 31 March 2011: $69.1 billion)
Sales in the quarter of $3.1 billion and redemptions of $5.6 billion, giving a net outflow of $2.5 billion
http://jlne.ws/xW0BHX

Noam Gottesman appointed non executive Chairman of GLG (US)
On 17 January 2012, Noam Gottesman, a founding partner and Principal of GLG Partners, Inc., stood down as co-CEO of GLG and has taken on the role of non-executive Chairman of GLG’s business and interests in the US (“GLG (US)”). Manny Roman continues as sole CEO of GLG and Chief Operating Officer of Man Group plc.
http://jlne.ws/x1GzK8

Markit Adds Sensitivities Data to CDS Pricing
London and New York, NY – Markit, a leading, global financial information services company, today announced it is supplementing its end-of-day prices for credit default swaps (CDS) with a new sensitivities report that will give clients valuable information about the relationship between a CDS price and other market variables.
http://jlne.ws/yvw1mJ

Philly Taxpayers Lost $331M on Swaps: Report
Bloomberg
Philadelphia and its school district have lost a combined $331 million on interest-rate derivatives known as swaps, and the city stands to lose $244 million more, the Pennsylvania Budget and Policy Center said in a report.
http://jlne.ws/y8sopM

South America Boom Backfires on Commodity Complacency
BusinessWeek
Venture capitalist Arnon Kohavi arrived in Chile last year aiming to raise $40 million for technology startup investments. Six months later, the Israeli decamped to Singapore, saying the world’s largest copper producer was too addicted to its commodity wealth.
http://jlne.ws/zgXNcB

Agio Technology Continues Rapid Growth in 2011 Amid Growing Hedge Fund Demand for Managed IT Services
Business Wire
NEW YORK–(BUSINESS WIRE)–Agio Technology, a provider of managed IT services for premier hedge funds, today announced the firm continued to demonstrate significant growth in 2011 as a result of a growing trend of hedge funds and other investment advisory firms outsourcing non-differentiating IT functions to third-party providers.
http://jlne.ws/xheQqn

AdvisorShares Launches Active ETF
ETF Trends via Yahoo! Finance
http://jlne.ws/wZ9FcU

Deutsche Bank Launches Inflation Expectation Index
Business Wire via Yahoo! Finance
http://jlne.ws/yfk1z8

MICEX-RTS Indices Weekly Review
Press Release
http://jlne.ws/wQZKic

Technology News

TriOptima eliminated a record-breaking $62 trillion in notional principal outstanding in OTC derivatives in 2011
TriOptima announced that market participants, using its triReduce compression service for both interest rate and credit default swaps, terminated a record-breaking $62 trillion in OTC derivative notional principal outstanding in 2011.
http://jlne.ws/yrtDhm

SunGard Identifies Ten Trends in Electronic Trading for 2012
The ten trends that SunGard has identified as shaping electronic trading in 2012 can be grouped under the themes of transparency, efficiency and networks.
http://jlne.ws/wffjJ3

Interxion Strengthens its Financial Community with Infront
STOCKHOLM, January 17, 2012 – INTERXION HOLDING NV, (NYSE: INXN), a leading European provider of carrier-neutral colocation data center services, today announced that Infront, a leading provider of real-time market data and electronic trading solutions, has chosen to house its solutions at Interxion’s Stockholm data center and City of London data center, in order to provide its financial customers with faster connectivity to exchanges and key liquidity venues.
http://jlne.ws/A4Eciu

ConvergEx Group Launches ConnEx
Press Release
http://jlne.ws/yWZ2oS

Bloomberg Vault Adds Cloud Archiving For IBM Message Software
Press Release
http://jlne.ws/ya68qQ

Roderick Manzie Joins 3d Innovations As COO To Further The Data Management Consultancy’s Growth
Press Release
http://jlne.ws/yYgHzb

Cowen Group, Inc. Agrees to Acquire Algorithmic Trading Management
Business Wire via Yahoo! Finance
http://jlne.ws/xJUYeB

Media News

Yahoo’s Yang Resigns From Board, Exits Company He Co-Founded
Tom Giles – Bloomberg
Jan. 17 (Bloomberg) — Jerry Yang is exiting the Yahoo! Inc. board and its management team, the latest casualty of an overhaul that led to the ouster of Chief Executive Officer Carol Bartz and left the company in search of strategic options.
http://jlne.ws/zhx1jQ

Hedge Funds Buy Ferraris, Clients Often Get Phantom Gain: Books
By James Pressley – Bloomberg
Jan. 18 (Bloomberg) — Hedge-fund managers treat themselves to absolutely fabulous toys: Ken Griffin is fond of Ferraris, Steve Cohen is known for his Damien Hirst pickled shark and ice rink outfitted with its own Zamboni in a gabled cottage. So where are the customers’ yachts?
http://jlne.ws/yGOUlq

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cmegroup.com/tools-information/calendars/

Asia-Pacific News

Shanghai Mayor Says Time Not Right for International Board
BusinessWeek
Shanghai, China’s financial hub, signaled the delay of its international board two months after the city’s stock exchange said it was ready to allow overseas companies to list in the world’s third-biggest equity market.
http://jlne.ws/woTkZW

Deutsche Börse acquires China Consumer Sentiment Survey
CCSS complements existing MNI China Business Sentiment Survey/ Reinforces commitment to Asia-Pacific region
http://jlne.ws/wD0L1b

Monetary Authority Of Singapore Introduces Regulatory Framework For Credit Rating Agencies (CRA)
Press Release
http://jlne.ws/xIHjLn

[TSE] Notes of Joint Media Briefing on the Combination Preparatory Committee
http://jlne.ws/xqkoHf

KRX To List A 10-Year KTB ETF
Press Release
http://jlne.ws/ySPkqt

Shenzhen Stock Exchange To Provide Remote Training Course On Annual Report Preparation
Press Release
http://jlne.ws/zBlHHS

Tokyo Grain Exchange: Details Of Delivery For Jan. ’12 Arabica Coffee Uploaded
Press Release
http://jlne.ws/wjfeID

Frontier Markets

Analysis: Nigeria strife highlights Africa investment risks
Reuters via Yahoo! News
LONDON (Reuters) – Nigeria’s recent explosion of violent political unrest is damaging the economy and forcing investors to reassess their optimism over the short-term returns available there and elsewhere in Africa.
http://jlne.ws/zH6M3m

BMO’s Lloyd George Management Announces Three New Appointments for Frontier Markets Equity Team
Marketwire
http://jlne.ws/yqCYdp

Israel Rattled as Hackers Hit Bourse, Banks, El Al
International Business Times
Hackers disrupted online access to the Tel Aviv Stock Exchange, El Al Airlines and three banks on Monday in what the government described as a cyber-offensive against Israel.
http://jlne.ws/wS3wnk

Cyprus Stock Exchange’s Monthly Bulletin-December 2011
Press Release
http://jlne.ws/yO3Mli

Tehran Stock Exchange Revised TEDFIX 30 Index
Press Release
http://jlne.ws/Azs2OR

Miscellaneous News

The Future For Ex-Bank of America Exec Sallie Krawcheck
Forbes
Considered one of the most powerful women in finance, Sallie Krawcheck, former Head of Global Wealth Management at Bank of America Merrill Lynch, has had a career checkered with meteoric rises and devastating falls – all of which have been feverishly played out in the media.
http://jlne.ws/yKmdpn

A real market economy ensures that greed is good
By John Kay – Financial Times
Sixty years of division of the Korean peninsula has created two states with very different standards of living in one country. The Korean example is pathological. The division of Germany resulted in two states, both functional in economic terms, but one far richer. The less noticed comparison between the modern economic histories of Finland and Estonia had the same outcome.
http://jlne.ws/yhI2H6

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About Author

Matte is chief operating officer of John J. Lothian & Co. He edits the John Lothian Newsletter, JLN Forex and MarketsWiki.