Breaking News

John Lothian Newsletter: TSE’s Osaka Deal Marred By Share Fall, Regulator Scolding; CME May Add Rates Trading In U.K. After Currencies; SEC To Review “Quiet Period” IPO Rule After Facebook Mess

Tokyo Stock Exchange’s big merger completion symphony is interrupted by vuvuzela horns from regulators and worried shareholders. CME Group’s post-FX plans for its new London exchange may include interest-rate products. The SEC considers the value of trying to restrict what companies may say while in pre-IPO mode, possibly noting that the recent Facebook offering wasn’t helped much by that quiet period.

First Read

Is Chicago in CME’s future?
By Lynne Marek – Crain’s
As CME Group Inc. ramps up its international expansion, the futures exchange is economizing in Chicago. The contrast was evident this month as CME unveiled plans for a European exchange in London, even as 30 long-term Chicago employees took a company buyout.
http://jlne.ws/PUTi9K

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Navigating EU Regulations
MarketsReformWiki.com
Alex Merriman is the regulatory expert at SIX Securities Services. He spoke with JLN editor-in-chief Jim Kharouf about the regulatory process in Europe, how it works, and what’s coming next. He also answers the question: is there enough collateral in the system to meet regulations?
http://bit.ly/Qmw8ef

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We need much simpler rules to rein in the banks
Nicholas Brady – FT.com
Congress, lobbyists and editorial writers have been engaged in an intense debate over how to provide effective governance for the US banking system in the wake of the 2008 financial crisis and, more recently, JPMorgan Chase’s billion-dollar derivatives losses. It is a complex subject and, not surprisingly, the language has been at times as opaque as the derivatives themselves – and the inability of the public to understand the system is contributing to a decline in trust and confidence. I believe the real solution lies in formulating a simpler, not a more complex, set of regulations.
http://jlne.ws/PUTiqf

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Why light trading this summer is not so worrisome
Bernard Condon, AP
Someone call a doctor. The stock market just lost its pulse. Prices are barely moving day to day. Investors are trading far fewer shares than they did last summer. And the future looks equally comatose. The Vix, a sort of crystal ball of stock volatility, recently hit a five-year low.
http://jlne.ws/PUTgyI

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Where has the mom-and-pop retail investor gone?
Seattle Times
If you don’t think the credit crisis and Great Recession have moved people to stay away from the casino called Wall Street, you are kidding yourself.
http://jlne.ws/PUTgP6

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Levitt Says SEC Money-Fund Punt a ‘National Disgrace’: Tom Keene
Laura Marcinek and Tom Keene – Bloomberg
U.S. Securities and Exchange Commission Chairman Mary Schapiro’s abandonment of her quest to impose tougher rules on money-market mutual funds is a “national disgrace,” said former SEC Chairman Arthur Levitt.
http://jlne.ws/NUi1Z8

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Chuck Jaffe: Money-market fund reform is dead
Market Watch
Securities and Exchange Commission Chairman Mary Schapiro should not give up the fight for financial reform, but she needs to find something better to do than continue a losing battle for changing the money-market fund business.
http://jlne.ws/PUTjdQ

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Democrat Luis Aguilar willing to go his own way on SEC
Washington Post
Luis A. Aguilar occasionally sounds more like someone from the Occupy Wall Street movement than a former corporate lawyer who has spent the past four years on the Securities and Exchange Commission. Aguilar, a Democrat, has often faulted his own agency — which is led by a fellow Obama appointee — for not doing enough to protect investors or punish financial misdeeds.
http://jlne.ws/PUTjul

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Senseless Panic — How The Financial Crisis Could Have Been Contained
Forbes
The financial crash has generated a number of excellent books — Too Big to Fail, Chasing Alpha, Griftopia, All the Devils are Here and House of Cards among them. Only one that I am aware of has been written by someone who had been through massive bank failures before — William Isaac’s Senseless Panic.
http://jlne.ws/PUTk1o

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If Keynesians Are Against Speculation Then How Come Keynes Was a Speculator?
Tim Worstall – Forbes
One of the more tiresome tropes of current times is that speculation is in some sense bad. The argument tends to come from those who would consider themselves Keynesians. There’s this good stuff, investment, which means putting money into building something real and new.
http://jlne.ws/PUTjur

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Uncertainty is the only safe prediction
Gregory Meyer – FT.com
This is the summer of uncertainty. Chief executives, money managers, analysts and central bankers are preoccupied by how little they know. With more tumult in the eurozone ahead, the US racing towards a “fiscal cliff” and China slowing down, conventional wisdom in the financial world says the future is especially unknowable right now. If you have lousy returns, blame uncertainty.
http://jlne.ws/PUTk1x

***JM: Acquiring knowledge, as most scientists know, often leads simply to new questions instead of answers.

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Harris Interactive poll: Almost 3 in 4 at work in U.S. are stressed
chicagotribune.com
According to an annual survey by Harris Interactive, 73 percent of Americans are stressed at work. The top source of stress, felt by 11 percent of survey respondents, is low wages. For women, that rises to 14 percent. The next irritants are annoying co-workers (10 percent); commuting (9 percent); workload (9 percent); and a job outside a chosen career (8 percent).
http://jlne.ws/PUTjKI

MarketsWiki.tv

Layne Carlson Tells the Story Behind MGEX’s Apple Juice Contract
MarketsWiki.tv
The Minneapolis Grain Exchange, now known as MGEX, launched Apple Juice Concentrate (AJC) futures and options on August 13, 2012.  We asked Layne Carlson, corporate secretary and treasurer of the exchange, for the story behind the new Apple Juice contract. Interview by JLN publisher John Lothian.
http://jlne.ws/O5vOwG

MarketsWiki

MarketsWiki Page of the Day
Dawn Stump
http://jlne.ws/PGQsDc

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MarketsWiki Recent Updates

People

Walter Thomas Price, III; Dawn Stump; Luis Aguilar; Alex Merriman

Companies, Organizations and Groups

Price Holdings, Inc.

Statistics

27,688,758 pages viewed, 7,077 articles, 146,777 edits
MarketsWiki Statistics

Lead Stories

TSE’s Osaka Deal Marred by Share Fall, Regulator Scolding
Kana Nishizawa and Yoshiaki Nohara – Bloomberg
The Tokyo Stock Exchange Group Inc.’s purchase of its Osaka rival is off to a rocky start. Just one day after winning control of Osaka Securities Exchange Co., the president of Japan’s biggest bourse and three other executives had their pay docked after the company was reprimanded by regulators for computer errors that disrupted trading twice in the last seven months. Shares of the Osaka exchange plunged by a record 16 percent yesterday amid speculation the merger will hurt profit.
http://jlne.ws/PUTkhM

CME May Add Rates Trading in U.K. After Currencies
Bloomberg
CME Group Inc. , the owner of the world’s biggest futures exchange, may offer interest-rate trading in Europe , once the marketplace that it’s developing in London has established liquidity in currency contracts.
http://jlne.ws/RiT4dv

SEC to review “quiet period” IPO rule after Facebook mess – WSJ
Reuters via Yahoo! News
U.S. stock market regulator the Securities and Exchange Commission is reviewing whether to relax rules governing what companies can say ahead of initial public offerings, the Wall Street Journal reported on Monday.
http://jlne.ws/PUTkhV

Exclusive: RBS closing in on rate-rigging settlement – sources
Reuters via Yahoo! News
LONDON – Royal Bank of Scotland is expected to agree a settlement in the next two months with U.S. and UK authorities investigating its role in an interest-rate rigging scandal, according to industry sources, regulatory officials and lawyers familiar with the case.
http://jlne.ws/PUTkhY

No Crime, No Punishment
New York Times
The financial crisis is receding, without prosecutions to deter wrongdoing even as a fuller picture is emerging of the range of banks’ reckless and lawless activities.
http://jlne.ws/PUTjKV

Europe’s big bang for bank rules set to sputter
Reuters via Yahoo! News
A hoped-for “big bang” start next year for new rules to make banks safer is set to sputter in Europe, creating more uncertainty in a sector struggling to win back investor confidence lost in the financial crisis.
http://jlne.ws/PUTkyl

Merkel tries to calm storms over Greece, ECB policy
Reuters via Yahoo! News
Angela Merkel tried to calm a growing storm over euro zone crisis strategy on Sunday after the Bundesbank likened ECB bond-buying plans to a dangerous drug and a conservative ally of the German leader said Greece should leave the currency bloc by next year.
http://jlne.ws/PUTkym

France Reassures Greece on Euro Zone Membership
New York Times
President François Hollande of France expressed his commitment Saturday to keep Greece in the euro zone, but he urged its new prime minister, Antonis Samaras, to go all out to solve the economic crisis.
http://jlne.ws/PUTkyq

Regulatory

DealBook: Regulatory SWAT Team May Have to Move Slowly on Money Funds
New York Times
Does the Financial Stability Oversight Council have the resolve to go down untrodden paths and officially designate money funds as a risk, especially in the few months before the presidential election?
http://jlne.ws/PUTmGw

Citigroup’s Pandit Says Regulators Should Avoid Product Control
Bloomberg
Citigroup Inc. Chief Executive Officer Vikram Pandit said regulators shouldn’t dictate what banks can sell to clients because such controls risk undermining financial stability and have no clear economic benefit.
http://jlne.ws/PUTkyr

FSA is right to close off UCIS loopholes
Paul Murphy – FT.com
It is rare that we get the chance to offer praise to Britain’s financial regulators. When the opportunity does arise, we should not let it pass without comment.
http://jlne.ws/PUTmGD

NFA Notice to Members
NFA Financial Requirements Section 16 – Required Notification of Certain Disbursements from Segregated/Secured Amount Funds and New Requirements Regarding Statement Submitters
http://jlne.ws/PUTkyw

Statement Of The Chairman Of The IOSCO Board On IOSCO’s Work On MMFs
http://jlne.ws/PUTmWU

[ASIC] Hybrids warning: don’t be dazzled, be wary of the risks
http://jlne.ws/PUTmWW

[ASIC] Campaign on unlicensed credit providers
http://jlne.ws/PUTkOS

Exchanges & Trading Facilities

Hibernia Atlantic Adds CME Group As New Point Of Presence On Its Global Financial Network (GFN)
Financial Risk Management Firm Now Has Access To Additional Ultra Low Latency Routes Across The Globe
http://jlne.ws/PUTmX1

[CBOE] Trader E-News
http://jlne.ws/PUTmX4

ISE Weekly Listings August 24, 2012
http://jlne.ws/PUTkOZ

NYSE Group Inc. Issues Short Interest Report
http://jlne.ws/PUTkP2

NASDAQ Announces Mid-Month Open Short Interest Positions In NASDAQ Stocks As Of Settlement Date August 15, 2012
http://jlne.ws/PUTl5j

NYSE MKT Issues Short Interest Report
http://jlne.ws/PUTndw

TOM MTF Statistics Week 34 2012
http://jlne.ws/PUTnu0

TSX Venture Exchange Daily Bulletins
http://jlne.ws/PUTnuc

CBOE, C2, CFE, and CBSX Trading Schedule for Labor Day Holiday
http://jlne.ws/Nm6mH4

Toronto Stock Exchange, TSX Venture Exchange, Montreal Exchange, TMX Select And Alpha Closed For Labour Day
http://jlne.ws/PUTnKC

Hedge Funds & Managed Futures

Citadel’s Runnfeldt to retire from hedge fund
Reuters via Yahoo! News
Jeffrey Runnfeldt, one of the trio that has overseen Citadel LLC’s global equities unit, is leaving the hedge fund at the end of the month. Runnfeldt, 46, is retiring, Citadel spokeswoman Katie Spring said in an email.
http://jlne.ws/PUTlCm

Factbox: Blackstone Group’s candidates for CEO
Reuters via Yahoo! News
Blackstone Group LP CEO Stephen Schwarzman is grooming six senior executives as potential candidates to eventually take over the reins of the world’s largest alternative asset manager, according to insiders with direct knowledge of the situation.
http://jlne.ws/PUTlCu

Hedge funds are betting on disaster
CNN Money
Hedge funds are hoarding cash, betting Europe’s debt crisis, the U.S. fiscal cliff or a slowdown in China will spark a swift sell-off and create a buying opportunity.
http://jlne.ws/PUTo0Z

Vanguard’s John Bogle still preaching gospel of long-term, low-cost investing
Seattle Times
The founder of Vanguard mutual-fund company offers a scathing critique of the financial-services industry and updated guidance for investors in his latest book.
http://jlne.ws/PUTo12

Baring’s gold hoard larger than that of several countries
Mark Cobley – Financial News
Baring Asset Management, one of the UK’s top “multi-asset” fund managers with funds worth £7bn, held so much gold during the period of the financial crisis that its stock of the metal surpassed the central banks of the Czech Republic, Cyprus or Bangladesh – and the firm may yet put the bet back on.
http://jlne.ws/PUTo14

Pension trouble: Illinois’ TRS pushed to lower return expectations
Crain’s Chicago Business
Illinois’ biggest pension fund is being urged by its own consultant to lower its expected return on investments — a step that, if accepted, could force the fund to cut benefits or raise taxpayer contributions even more than lawmakers have been considering.
http://jlne.ws/PUTlCD

CFTC.gov Commitments Of Traders Reports Update
http://jlne.ws/PUTlSX

Banks & Brokers

Former Chase head Willard Butcher dies at age 85
Associated Press via Yahoo! News
Former Chase Manhattan Bank chairman and CEO Willard Butcher has died at 85.
http://jlne.ws/PUTohu

MarketWatch First Take: Was Facebook a set-up for Morgan Stanley?
Market Watch
David Weidner writes that the large Facebook positions taken by Morgan Stanley mutual funds suggest the firm was either betting those funds would score on a wildly popular IPO, or it was a set-up.
http://jlne.ws/PUTohw

Investment banking staff fall by 10,000 in a year
Richard Partington – Financial News
The number of investment banking jobs at the world’s largest banks has fallen by around 5.6% over the past 12 months, according to Financial News analysis, as financial institutions look to stave off the impact of increased costs and declining fee revenues.
http://jlne.ws/PUTohz

Merrill to pay $40 million in deferred compensation suit
Reuters via Yahoo! News
Merrill Lynch has agreed to a proposed $40 million class action settlement with 1,400 brokers over deferred compensation it refused to pay them after its merger with Bank of America. But the proposed deal may still leave roughly 2,000 brokers to battle privately against the brokerage.
http://jlne.ws/PUTlT7

Swiss bank employee arrested in data theft case
Associated Press via Yahoo! News
Swiss private bank Julius Baer says a Zurich-based employee has been arrested on suspicion of stealing confidential client information that was later passed to German tax investigators.
http://jlne.ws/PUTm9p

UniCredit Faces Inquiry on Iran
GIOVANNI LEGORANO – WSJ.com
U.S. authorities are investigating UniCredit SpA UCG.MI -0.19% over possible violations of trade sanctions on Iran, a person familiar with the matter said Sunday.
http://jlne.ws/PUTohL

Deutsche Bank turns screw on bonuses
Daniel Schäfer and Sharlene Goff – FT.com
Deutsche Bank has become the first global bank to introduce rules allowing it to strip staff of bonuses they earned at previous employers in the latest crackdown on pay.
http://jlne.ws/PUTm9y

JPMorgan Appoints Ex-KPMG Chairman Tim Flynn to Risk Panel
Dawn Kopecki – Bloomberg
JPMorgan Chase & Co. (JPM)’s board of directors assigned former KPMG International Chairman Timothy Flynn to its risk committee after an internal probe blamed lax controls for a $5.8 billion trading loss in London.
http://jlne.ws/NUObnz

Deutsche Bank Unit Sued by FHFA Over Mortgage Securities
Bloomberg
A Deutsche Bank AG unit was sued by the Federal Housing Finance Agency, which seeks the repurchase of loans backing mortgage securities.
http://jlne.ws/PUToy3

Deutsche Bank Turns Screw on Bonuses
CNBC
Take a look at the major metropolitan housing markets with the most affordable homes for sale. These business tycoons not only own a piece of paradise, they’ve managed to turn them into a lucrative business opportunity.
http://jlne.ws/PUToy5

Citigroup Said to Hire Former ‘Top Model’ Contender Stolz
Bloomberg
Citigroup Inc. , the third-biggest U.S. bank by assets, hired former “America’s Next Top Model” contestant and MTV anchor Kimberley Stolz for a job in equity- derivative sales, said two people familiar with the matter.
http://jlne.ws/PUTmpY

Indexes & Products

Bucharest Stock Exchange: On August 29 Starts Trading The First ETF Of The Romanian Capital Market
http://jlne.ws/PUTmq7

Enforcement

CFTC Seeks to Revoke Registration of Growth Capital Management LLC Based on CFTC Anti-Fraud Action
The U.S. Commodity Futures Trading Commission (CFTC) today filed a notice of intent to revoke the registration of Growth Capital Management LLC (GCM) of Rockwall, Texas. GCM is a registered Commodity Pool Operator and Commodity Trading Advisor.
http://jlne.ws/PUTply

ASIC commences civil penalty action against former directors of Australian Property Custodian Holdings Ltd
http://jlne.ws/PUToyg

[ASIC] Citigroup Global Markets Australia Pty Ltd pays $30,000 infringement notice penalty
http://jlne.ws/PUTplA

ASIC appeals against penalties imposed on former AWB chief financial officer
http://jlne.ws/PUTplB

BCSC: Securities regulator issues notice of hearing against numbered company, Nevada corporation and three B.C. men alleging illegal distribution
http://jlne.ws/PUTplE

Environmental & Energy

What’s Better? A Carbon Tax or Energy Subsidies?
Forbes
With all the debate about energy jobs, wind power tax breaks, and oil subsidies, it?s hard to see what federal incentives do for energy in America.
http://jlne.ws/PU0yCM

Carbon Tax Would Have Many Benefits
ROBERT H. FRANK – NYTimes.com
Yes, there will be plenty of speeches about unemployment, budget deficits and other immediate problems. But the threats posed by global warming are decades away — or so we have been told repeatedly in recent years. Many climate scientists, however, are now pointing to evidence linking rising global temperatures to the extreme weather we’re seeing around the planet.
http://jlne.ws/PUTplM

Asia-Pacific

China Construction Bank 1st-Half Net Profit Rises 15%; Outlook Muted
Dow Jones
China Construction Bank Corp. said Sunday its first-half net profit rose 15% from a year earlier thanks to higher interest income and commissions, but a rise in overdue loans raises questions about its asset quality and future profitability.
http://jlne.ws/PUTplN

Young South Koreans face jobless woes with ‘graduate glut’
AFP via Yahoo! News
Song A-Hyun was once confident she would follow in her father’s footsteps — graduate from one of the nation’s best universities, land a plum job at a top firm and enjoy a high-flying career.
http://jlne.ws/PUTplQ

Singapore Exchange Regulatory Announcement – Update On China Sky
http://jlne.ws/PUTpC7

Osaka Securities Exchange SPAN Parameter Updated – Sep. 03, 2012 – Sep. 07, 2012
http://jlne.ws/PUTpCa

Press Conference By Tadahiro Matsushita, Japan’s Minister For Financial Services – Review Of TIBOR
http://jlne.ws/PUToOO

Hong Kong’s Securities And Futures Commission Welcomes Re-appointment Of Executive Directors
http://jlne.ws/PUTpCb

Frontier Markets

KKR Said to Consider Investing in Africa, Following Carlyle
Bloomberg
KKR & Co. , the private equity firm started by Henry Kravis and George Roberts , is hiring a dealmaker to look for investments in Africa as it tries to tap the region’s growth, said two people with knowledge of the plan.
http://jlne.ws/PUTpCf

Is Malaysia’s IPO Boom Overhyped?
CNBC via Yahoo! Finance
Malaysia is marking itself out as the IPO destination to beat this year with a string of billion-dollar-plus deals. Impressive, for sure, but don’t take the booming IPO market as a sign that Malaysia is poised to become a regional financial hub, experts say.
http://jlne.ws/PUTpCk

Qatar Holding comes of age as it resists ‘Glenstrata’
Camilla Hall in Dubai and Henny Sender in New York – FT.com
This week it has become clear that the $70bn merger between Glencore, the world’s biggest commodities trader, and the London-listed miner Xstrata is likely to be derailed by a little-known sovereign wealth fund, Qatar Holding.
http://jlne.ws/PUTpSC

Dubai’s DIC sells stake in $300 mln MENA infrastructure fund
Reuters via Yahoo! Finance
Dubai International Capital (DIC), the private equity arm of Dubai Holding which restructured $2.5 billion debt in April, sold its stake in a $300 million Middle East North Africa infrastructure fund to Islamic investment firm Fajr Capital.
http://jlne.ws/PUTp58

DFM And NASDAQ Dubai Newsletter August 2012
http://jlne.ws/PUTp5a

Malawi Stock Exchange Weekly Trading Report
http://jlne.ws/PUTpSO

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