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John Lothian Newsletter: Hong Kong Exchanges Said to Seek Loan for Potential LME Purchase; CME to launch world’s first cleared swaps for LNG; EU Lawmakers May Seek Ban on Bank Bonuses That Top Salary

What is the John Lothian Newsletter? Edited by John Lothian and Jon Matte, our flagship newsletter provides daily news and commentary about the global exchange traded derivatives, securities and related OTC markets. The newsletter is offered on a voluntary pay basis. If you find it useful, we ask that you pay for it. Free for students and journalists. Subscribe  Make a Payment

Hong Kong Exchanges goes after a loan to use in a bid for the LME. CME Group looks forward to next week’s launch of cleared swaps for LNG, a world first. The EU parliament gives a frowny look at bank executive bonuses given over the top of regular salaries. In the top box, you’ll find a MarketsWiki.tv interview with NYSE Liffe US’s Jennifer Ropiak on the metals markets; and comments from John Lothian providing the latest happenings and news within JLN.

Observations – Statistics – Commentary

MF Global Channel Now on MarketsWiki.tv; Other Updates

We have added an MF Global channel to MarketsWiki.tv to aggregate all of the Congressional C-Span hearings and MF Global related interviews that John Lothian News has conducted. You can access the channel from the drop down list at the top or the listing of the channel along the right side of the site.

We are also in the process of updating the MF Global timeline on the www.johnlothiannewsletter.com website.

The www.johnlothian.com website has been updated to reflect all our current products and services, including information about John Lothian Productions, our new custom video work division. Check out the At Event background video under the events section. This was the incredible introduction we used for the MarketsWiki Questions Exploring Financial Technology event we held last fall. It did an excellent job of introducing the speakers at the event and the subject they would be talking about. Besides being visually interesting, it was just plain cool to see it up on the big screen running as people were getting settled in their seats. It was a great introduction for the program. If you did not attend the event, you missed this.

John Lothian Productions has signed a contract with a Chicago-based technology company to produce 2 short product-related videos for them. We also have a contract with a recruiting company to shoot an online commercial for them.

There is a new dual interview video on the MarketsReformWiki.com website featuring George Bollenbacher of Kinetex Trading Solutions and Kim Olson of Deloitte & Touche discussing the Volcker Rule.

We have a video interview with Mary McHenry of the National Futures Association on MarketsWiki. We were getting some feedback about our JLN Managed Futures videos from the NFA, so we decided to do an interview with them about what we can and can’t do with video and social media. This interview was the result.

There is also a new video interview with NYSE Liffe US’s Jennifer Ropiak on MarketsWiki.com, and MarketsWiki.tv, about the metals markets. There is a link for it below.

We are experimenting with a new green screen in our video studio. We shall see how this works.

MarketsReformWiki is on a pace to see over 2 million page views in its second year after seeing 1 million in its first 12 months. MarketsWiki.com is on a pace to see 16 million page views in 2012 after seeing 9.6 million in 2011 and 17.5 million life to date through the end of 2011.

JLN Senior Producer Sarah Rudolph and I will be attending the upcoming OIC 30th anniversary conference in New Orleans in May. JLN Editor-in-Chief and President Jim Kharouf and I will be attending the International Derivatives EXPO of the FOA and FIA in London in June.

~John J. Lothian

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CFTC Orders Rosenthal Collins Group, LLC, a Registered Futures Commission Merchant, to Pay More than $2.5 Million for Supervision and Record-Production Violations
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing and simultaneous settlement of charges against Rosenthal Collins Group, LLC (RCG), a Chicago, Ill.-based registered futures commission merchant, for failing to diligently supervise the handling by its officers, employees, and agents of an account held at RCG in the name of Money Market Alternative, LP (MMA).
http://jlne.ws/HDhtZp

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World Federation of Exchanges Assemble Exchange and Clearinghouse Leaders in London to Discuss the Current Derivatives Landscape
Global leaders of derivatives exchanges and clearing houses will assemble 16-17 April for the 29th IOMA Conference, the annual derivatives Conference hosted by the World Federation of Exchanges (WFE), to focus on the commercial and technological developments impacting derivatives markets. The conference also introduces the full annual IOMA survey on derivatives market statistics.
http://jlne.ws/IMURzU

**** WFE is an organization on the move to keep an eye on.

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CME says to cut silver, copper, palladium margins
Reuters
The CME Group will cut margins for silver, copper and palladium futures after close of business on April 16, it said in a statement late on Thursday.
http://jlne.ws/IMURje

**** Margins go up and DOWN.

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Lead Director at MarketAxess Departs
By THEO FRANCIS – NY Times
The electronic trading platform MarketAxess Holdings is losing Nicolas Rohatyn, a prominent financier who has helped shape the company for more than a decade.
http://jlne.ws/IMURA2

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Jennifer Ropiak

Jennifer Ropiak of NYSE Liffe US Discusses Gold’s Market Impact & Options on Metals
MarketsWiki.tv
Jennifer Ropiak, senior vice president and head of precious metals futures and options business development at NYSE Liffe US, sat down with John Lothian News editor/producer Nicole V. Rohr to discuss gold‘s impact on the markets in the past year and the exchange’s recent listing of options on metals. Ropiak also commented on factors driving volumes and opportunities for arbitrage in 2012.

Watch the video >

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Private Goldman Exchange Officially Closes for Business
By PETER LATTMAN – NY Times
We hardly knew ye, GSTrUE. With Thursday’s initial public offering of the Oaktree Capital Group, a once-promising private Goldman Sachs stock exchange has officially come to an end.
http://jlne.ws/IMURQl

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Cracks open within the ranks of issuers
By Tracy Alloway and Ajay Makan in New York and Izabella Kaminska in Geneva – Financial Times
Market participants are calling it the exchange traded note, or ETN, that barked. Last month the TVIX, an ETN marketed by VelocityShares, diverged dramatically from the volatility index it was meant to be tracking. Its issuer, Credit Suisse, had suspended the creation of new units due to its own internal risk limits, inhibiting the market from keeping the note’s value in check.
http://jlne.ws/IMURQq

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Oil markets should heed Libor lessons
By Gillian Tett – Financial Times
Five years ago, the word “libor” sparked a yawn from investors and journalists. For back then, the process for setting these benchmark interest rates looked arcane, if not dull. And while it was clear that the Libor methodology was potentially open to abuse (since it sets rates based on prices that players report, not actual deals), the system was so well entrenched that it was rarely questioned.
http://jlne.ws/IMURQy

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JPMorgan’s London Whale Could Use New Nickname
Bloomberg
Late last week, a little-known trader at JPMorgan Chase & Co. (JPM) in London , Bruno Iksil, awoke to find his life changed forever.
http://jlne.ws/IMUS6R

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JLN Interest Rates Newsletter

U.S. Treasury Deficit Up 5.3% At -$198.2B In March
International Business Times
The U.S. Department of the Treasury said today in its monthly statement that budget deficit rose 5.3 percent to -$198.2 billion in March from $188.2 billion, exceeding the median deficit of -$196.0 billion expected previously.
http://jlne.ws/HMbOOe

Bernanke to Tighten Up Banks Under Basel III
International Business Times
US Fed Chairman Bernanke says banks need more capital. US Federal Reserve Chairman Ben Bernanke said Monday banks need to have more capital at hand in order to ensure the financial system is stable.
http://jlne.ws/HA2N7u

Treasury Cuts TARP Cost Estimate After GM, AIG Shares Rise
FOX Business
The Treasury Department Tuesday trimmed its cost estimate for the financial bailout, reflecting rising share prices for two of the companies it rescued at the height of the crisis.
http://jlne.ws/IbyrXG

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MarketsWiki Page of the Day
BlackRock Inc.
http://jlne.ws/HxLALT

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MarketsWiki Recent Updates

People

Walter L. Lukken; Jennifer Ropiak; Alger B. Chapman; Laurie Ferber; Gary G. Gensler; R.J. O’Brien & Associates

Companies, Organizations and Groups

Futures Industry Association; Blackrock Inc.; Mizuho Securities USA, Inc.

Products

Miscellaneous

Major swap participant; Swap Dealer; Upcoming Events

Statistics

21,857,502 pages viewed, 6,803 articles, 139,122 edits
MarketsWiki Statistics
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Lead Stories

Hong Kong Exchanges Said to Seek Loan for Potential LME Purchase
Bloomberg
Hong Kong Exchanges & Clearing Ltd. is seeking an acquisition loan to back a possible bid for the London Metal Exchange, according to two people familiar with the matter.
http://jlne.ws/HBgU0M

CME to launch world’s first cleared swaps for LNG
Gurdeep Singh – Market Watch
CME Group Inc. (CME) will launch the world’s first cleared financial derivatives contract for liquefied natural gas Monday, in a bet that burgeoning gas trading will spur demand for such instruments. The launch comes years ahead of an expected huge outflow of LNG from North America, which many in the industry view as a game-changing development with a potential to bridge regional gaps in pricing of the cleaner-burning fuel in the long run.
http://jlne.ws/IMUSnt

EU Lawmakers May Seek Ban on Bank Bonuses That Top Salary
Bloomberg
Lawmakers in the European Parliament may seek a ban on banker bonuses that exceed fixed pay as part of a draft law on Basel capital rules.
http://jlne.ws/IMUUfd

Europe’s Capital Flight Betrays Currency’s Fragility
Bloomberg
The euro area’s financial troubles appear to be flaring up again, as this week’s gyrations in the Spanish bond market show. In reality, they never went away. And judging from the flood of money moving across borders in the region, Europeans are increasingly losing faith that the currency union will hold together at all.
http://jlne.ws/IMUSnB

Bank Overhaul Mess Is Noose Around EU’s Neck, EBF Says
Bloomberg
Global financial regulators have failed to create clear standards for banks, meaning lenders are hoarding cash instead of providing loans needed to drive growth, European Banking Federation President Christian Clausen said.
http://jlne.ws/IMUSDW

IMF Lifts Growth Forecast, Cautiously
By IAN TALLEY, SUDEEP REDDY and DAVID WESSEL – WSJ
Christine Lagarde, managing director of the International Monetary Fund, said the world economy is marked by “a high degree of instability” even though prospects for global growth are better than they were a few months ago.
http://jlne.ws/IMUSE1

MF trustee warns officers and directors
By Kara Scannell in New York – Financial Times
The trustee overseeing the liquidation of MF Global, the futures broker with an estimated $1.6bn shortfall in customer funds, said he may sue officers and directors of the company to try to recover money.
http://jlne.ws/IMUUvC

Environmental Trading News

Indigenous Tribe Earns Validation for Landmark Forest Carbon Project
MarketWatch
First-of-its-kind project sets the bar for socially and environmentally sustainable forest carbon projects, preserving forest livelihoods and charting a course for other indigenous tribes in Brazil.
http://jlne.ws/Ijtuyg

**JK – Steve Zwick from Ecosystem Marketplace is impressed by this project and says it’s an example to follow.

Renewable-Energy Investment Plunges in Quarter to Three-Year Low
Businessweek
Spending on new wind farms, solar parks and other renewable projects fell to $27 billion in the first quarter, a 28 percent slump from the last three months of 2011 and a 22 percent drop from the same quarter a year earlier, New Energy Finance said today in a statement. That’s the lowest quarterly total since the $20 billion recorded in the first three months of 2009.
http://jlne.ws/IMPTpK

**JK – Subsidy programs running out on renewables.

With a $5 Billion Pipeline Project, Canada Looks to Bypass U.S. for Asia
Wall Street Journal
Kinder Morgan Energy Partners LP KMP +1.11% said Thursday it will begin a $5 billion expansion of its Trans Mountain pipeline, nearly tripling the capacity of crude oil it can ship to Canada’s west coast—the latest project aimed at moving the country’s rising oil production to markets outside the U.S.
http://jlne.ws/Ik8gjY

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

Exchange & ECN News

BM&FBOVESPA And The Santiago Stock Exchange Announce Start Of Derivatives Market Development In Chile
BM&FBOVESPA and the Santiago Stock Exchange (BCS) signed an agreement today (April 12, 2012) that sets out the implementation of the Chilean derivatives market at the Santiago Stock Exchange. The agreement provides for the transfer of derivatives market knowledge from BM&FBOVESPA to the Chilean Exchange, encompassing products such as equity, interest rate and FX options and futures.
http://jlne.ws/IMUUvI

ICE: saw non-speculative interest in new contracts
Market Watch
IntercontinentalExchange Inc.’s launch of new grains futures contracts was driven by interest from non-speculative market participants such as grain handlers and farmers, an exchange executive said Thursday.
http://jlne.ws/IMUULZ

TMX Group Inc. to hold its Annual Meeting and report results for Q1 2012 on Friday, May 11, 2012
http://jlne.ws/IMUUM4

Gold by Gold lists on NYSE Alternext
http://jlne.ws/IMUTaS

Program Trading Averaged 30.5 Percent of NYSE Volume during Apr. 2-6
http://jlne.ws/IMUTaX

Banks, Brokers & Dark Pools

JPMorgan net income falls to $5.4bn
By Tom Braithwaite in New York – Financial Times
JPMorgan Chase reported net income of $5.4bn as the US banking group kicked off first-quarter earnings season with results that were down from last year’s $5.6bn but still much better than analysts had forecast.
http://jlne.ws/IMUTaZ

JPMorgan Said to Transform Treasury to Prop Trading
Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon has transformed the bank’s chief investment office in the past five years, increasing the size and risk of its speculative bets, according to five former executives with direct knowledge of the changes.
http://jlne.ws/IMUTb6

JPMorgan Cassino Settlement Shows Derivatives Failed Taxpayers
Bloomberg
For the 33,000 residents of Cassino, the Italian town’s attempt to cut its borrowing costs using derivatives was a losing bet the moment it was struck. The Wall Street bank that created the deal reaped an instant profit.
http://jlne.ws/IMUTro

Lazard taps ex-ABN Amro derivatives executive
Market Watch
Investment bank Lazard Ltd. (LAZ) has hired Richard Whittle, the former head of exotic credit derivatives at Dutch bank ABN Amro, as a senior advisor in London, according to a person familiar with the matter.
http://jlne.ws/IMUV2H

Banking: Double entry at Deutsche
By James Wilson and Daniel Schäfer – Financial Times
A change at the top comes as the flagship lender needs to bolster its global standing
http://jlne.ws/IMUTrx

Cantor Fitzgerald & Co. Announces the Expansion of its Emerging Markets Business
Cantor Fitzgerald & Co., a leading global financial services firm, announced that Charles Cortellesi and Erich Bauer-Rowe, formerly of Jefferies & Co., have joined as Co-Heads of the Emerging Markets group.
http://jlne.ws/IMUTrD

Britain must curb RBS, Lloyds pay before sale-investor group
Reuters via Yahoo! News
Britain should rein in salaries at Royal Bank of Scotland and Lloyds before embarking on any sale of its stakes in them, a private shareholder group said, as anger over bankers’ pay mounted ahead of their annual general meetings.
http://jlne.ws/IMUTHY

DealBook: Lowitt Is Leaving Barclays
New York Times
Ian Lowitt, a senior officer at Barclays and the last chief financial officer of Lehman Brothers, is leaving the British bank, according to a person with knowledge of the matter.
http://jlne.ws/IMUVzy

Crisis Gets Personal After U.K. Traders’ Spread-Better Fails
By Kevin Crowley – Bloomberg
For Britons who play the markets for a living, the collapse of spread-betting firm WorldSpreads Group Plc (WSPR) was the moment the financial crisis got personal. About 15,000 clients, some of whom work for banks and stockbrokers, face losing cash in their personal WorldSpreads accounts after they were frozen last month. The London-based company was put into administration, a form of U.K. bankruptcy protection, on March 18.
http://jlne.ws/IMUVzF

Instinet Announces Q1 2012 Trading Highlights
http://jlne.ws/IMUVzL

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.shtml

CFTC Charges Brad Lee Demuzio of Idaho and his Company, Demuzio Capital Management, with Operating a Fraudulent $1.8 Million Commodity Pool and Forex Ponzi Scheme
The U.S. Commodity Futures Trading Commission (CFTC) today announced the filing of a complaint in federal court in Idaho charging defendant Brad Lee Demuzio of Chubbuck, Idaho and his company, Demuzio Capital Management, with operating a Ponzi scheme that solicited nearly $1.8 million.
http://jlne.ws/IMUTYv

SEC Charges Goldman, Sachs & Co. Lacked Adequate Policies and Procedures for Research “Huddles”
The Securities and Exchange Commission today charged that Goldman, Sachs & Co. lacked adequate policies and procedures to address the risk that during weekly “huddles,” the firm’s analysts could share material, nonpublic information about upcoming research changes.
http://jlne.ws/IMUVQ4

Goldman Sachs Fined $22 Million For Favoring Select Clients
Forbes
Goldman Sachs agreed to settle charges that its equity analysts met during weekly “huddles” with the firm’s traders about investment ideas that were then shared with a select group of top clients.
http://jlne.ws/IMUTYE

SEC Charges Ponzi Schemer Targeting Church Congregations
The Securities and Exchange Commission today charged a self-described “Social Capitalist” with running a Ponzi scheme that targeted socially-conscious investors in church congregations.
http://jlne.ws/IMUVQ9

Harbinger Plans SEC Talks
By JEAN EAGLESHAM , GREG BENSINGER and STEVE EDER – WSJ
The Securities and Exchange Commission will meet next week with representatives of hedge-fund manager Philip Falcone, in the first face-to-face meeting aimed at settling potential civil-fraud charges, according to people familiar with the matter.
http://jlne.ws/IMUVQi

U.S. tests rare legal path in financial crisis cases
By Aruna Viswanatha – Reuters
An Obama administration task force established to investigate misconduct that fueled the financial crisis is turning to a little-used statute that may make such cases easier to bring, according to people familiar with the matter.
http://jlne.ws/IMUW6z

Matthew Solomon Named Deputy Chief Litigation Counsel In SEC Enforcement Division
http://jlne.ws/IMUWUi

European Parliament: Tough Rules Needed On Insider Trading And Market Manipulation
http://jlne.ws/IMUW6G

Former WA director jailed for stealing $230,000
http://jlne.ws/IMUW6P

Investments – Indexes – Managed Futures – Managed Funds

BlackRock looks to take on Wall Street
By Dan McCrum and Michael Mackenzie in New York – Financial Times
BlackRock, the world’s largest money manager by assets under management, has filed documents and is in talks with the Securities and Exchange Commission as it seeks an expansion of its broker dealer operation that will put it in direct competition with traditional Wall Street banks, according to a person familiar with the situation.
http://jlne.ws/IMUWn9

BlackRock’s Street Shortcut
By KIRSTEN GRIND And SERENA NG – WSJ
BlackRock Inc. is planning to launch a trading platform this year that would let the world’s largest money manager and its peers bypass Wall Street and trade bonds directly with one another.
http://jlne.ws/IpWnMw

Northern Trust Hedge Fund Services Builds Global Client Base
Business Wire
Northern Trust Hedge Fund Services has grown by winning new fund administration clients on four continents since it was created following an acquisition from Citadel in 2011.
http://jlne.ws/IMUWnb

As Natural Gas Cools, Trading Sizzles
BY CAROLYN CUI AND JERRY A. DICOLO – WSJ
The plunge in natural-gas prices over the past few months has had a surprising side effect: Investors love trading the plummeting commodity.
http://jlne.ws/IMUWnf

Goldman-linked $13 billion hedge fund Capula expands to Hong Kong
Reuters via Yahoo! Finance
Goldman Sachs-linked Capula Investment Management is expanding its $13 billion business into Hong Kong, according to sources, becoming the latest major investor to jump into the region where hedge fund players are a small but growing part of the market.
http://jlne.ws/IMUXr9

Merrill Lynch Heavyweights Launch Hybrid RIA Firm Snowden Capital
Financial Planning.com
In a major endorsement of the hybrid RIA business model, Rob Mooney and John Morris, both formerly of Merrill Lynch s wealth management division, have launched Snowden Capital Advisors, an independent, advisor-owned hybrid RIA firm.
http://jlne.ws/IMUXrg

Federal Reserve Governor Sarah Bloom Raskin At The Federal Reserve Bank Of San Francisco Business And Community Leaders Luncheon, Los Angeles, California, April 12, 2012 – Downturns And Recoveries: What The Economies In Los Angeles And The United States Tell Us
http://jlne.ws/IMUWDQ

NZX 20 Index Constituents
http://jlne.ws/IMUZzj

Media News

Google earnings top expectations
By Richard Waters in San Francisco – Financial Times
Google sought to shift Wall Street’s attention away from signs of deteriorating pricing in its advertising, as it reported earnings that topped Wall Street expectations for the first quarter of this year.
http://jlne.ws/IMUXY9

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

Hong Kong Exchange Board Will Decide Chairmanship, Chow Says
Bloomberg
Chow Chung-Kong, the former chief executive officer of subway operator MTR Corp. (66) who was named to Hong Kong Exchanges & Clearing Ltd.’s board this week, said his fellow directors will decide if he is the next chairman.
http://jlne.ws/IMUXYl

SMX announces new membership categories and new precious metals contracts to broaden market participation
The Singapore Mercantile Exchange (SMX), the first pan-Asian multi-product commodity and currency derivatives exchange, announced major initiatives to broad base the market participants by introducing new categories of Trade Member. In addition, SMX announced the launch of two popular contracts in precious metals. These initiatives are expected to further develop depth, breadth and liquidity on the exchange.
http://jlne.ws/IMUYeP

Local Retail Investors In The HKEx Stock Market Reach All-Time High
Retail participation in the Hong Kong stock market has reached a new high, according to the Retail Investor Survey 2011 conducted by Hong Kong Exchanges and Clearing Limited (HKEx). The survey, which was conducted during the period from 14 November to 23 December 2011
http://jlne.ws/IMUZPU

Myanmar looks to develop capital markets
By Gwen Robinson in Bangkok and Philip Stafford in London – Financial Times
Myanmar will take its first steps to develop its capital markets after enlisting the help of the Tokyo Stock Exchange and Daiwa Securities to develop a securities exchange.
http://jlne.ws/IMUYvh

Tokyo Grain Exchange: Rice Grading Table Applicable From October 2012
http://jlne.ws/IMUYvp

HKEx: Admission Of Sunshine Oilsands Ltd To List Of Designated Securities For Short Selling
http://jlne.ws/IMV0mT

SGX Welcomes Leading Palm Oil Producer Bumitama Agri
http://jlne.ws/IMV0Do

Frontier Markets

NSE inks FTSE 100 derivatives deal
By Philip Stafford in London – Financial Times
The National Stock Exchange of India, the country’s largest exchange operator, has deepened its push into derivatives trading after securing a licence to trade futures and options based on the FTSE 100 index.
http://jlne.ws/IMV0Dr

MCX Weekly Market Report April 07, 2012 – April 12, 2012
http://jlne.ws/IMV0Dt

Jon Matte
Jon Matte COO & Editor Matte is chief operating officer of John J. Lothian & Co. He edits the John Lothian Newsletter, JLN Forex and MarketsWiki. Author Archive  |  MarketsWiki Bio  |  LinkedIn  |  Email