Eurex Exchange begins a membership drive in Singapore, seeking new banks and brokers there to give a boost to its clearing house. In the “Did you not hear me, or are you not listening?” department, the head of NYSE Euronext tells U.S. lawmakers that investors want to see an improvement in the country’s debt structure. Banks and companies linked to the LIBOR rate-setting scandal could be facing tens of billions of dollars worth of lawsuits and claims. In today’s First Read, Steve Meizinger has a heart; and you’ve got one more day to check out the MGEX Apple Juice Concentrate interview with Layne Carlson.
Newark Beth Israel Heart and Sole Walk
From Steve Meizinger:
On January 5th of this year I had my miracle, I received my new heart. The doctors & nurses at Newark Beth were extremely knowledgeable, caring & compassionate. During the past 18 months I have been fortunate to have the support of friends and family that have helped me throughout the most difficult time in my life. Please join us to show support and help raise money for the Heart Transplant Program by walking on October 14th in the Heart & Sole Walk.
**JK – Great news from an options industry veteran. We’re glad to have you back Steve.
Libor’s Trillion-Dollar Question
The global investigation into the manipulation of Libor has so far done a good job of exposing how bankers corrupted one of the world’s most important financial indicators. Now authorities need to take a giant step further: Make banks release the data needed to determine how much damage was done and who should bear the most responsibility.
++Whatever happened to the $64 or $64,000 question? Now it’s a trillion. Has quantative easing done all that?
Global CEOs and U.S. Small Business Owners are Looking Beyond 2012 and the U.S. Election for Sustainable Improvement in the Economy and Job Creation
A majority of CEOs from global corporations and U.S. small business owners indicate that a lack of confidence in the near-term outlook has them looking to 2013 and beyond for improvements in the economy, business and job creation, according to the 2012 NYSE Euronext CEO Report. Now in its eighth year, the report also presents the views of business leaders on the health of small businesses in America and the impact of the upcoming U.S. election on business and economic growth, employment, the deficit and taxes, and public policy.
**JK – A lack of confidence seems to be a problem in many industries.
Orc clients take advantage of CBOE CMi 2.0
Orc Group, a leading provider of technology and services for the global financial industry, is pleased to announce its support of CBOE’s updated CMi 2.0 exchange protocol. Clients utilizing the Orc Trading products, including Orc Liquidator, Orc Market Maker and Orc Trader with Orc’s CBOE gateway will experience significantly improved performance for orders and trades.
**JK – The next upgrade will be called C3PO.
MGEX Announces New Incentives For AJC Futures And Options Contract
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), has announced enhanced exchange fee incentives for the new Apple Juice Concentrate (AJC) futures and options contract.
***JM: See the MarketsWiki.tv box lower down in this section for a link to an AJC-related Layne Carlson interview if you haven’t already watched it.
A Father Of High-Speed Trading Thinks We Should Slow Down
The race for ever-faster trades has “absolutely no social value,” says a billionaire who helped bring computers to financial markets.
**JK – Thomas Peterffy speaks up on hot topic.
Finance is in need of a technological revolution
Andrew Lo – FT.com
The electronic glitch that cost Knight Capital Group $440m points to a new threat to our digital economy: technological risk. As one of the largest and most technologically advanced broker-dealers in the US, much of Knight’s trading is handled electronically. Its growth is a reflection of Moore’s law, an observation on the trend towards ever cheaper, faster, and more powerful computer hardware.
**JK – Guest column runs through some of the recent tech tribulations.
Making Sense of Exchange Liability
James J. Angel, Ph.D., CFA – Traders Magazine
The Flash Crash, Facebomb, and Knightmare have demonstrated our market’s vulnerability to technology glitches. The Facebook IPO debacle raises the interesting issue of exchange liability for trading problems. Current SEC-sanctioned rules limit the liability of an exchange for trading losses. For example, Nasdaq Rule 4626 limits Nasdaq’s payments to $3 million in any one month. Other exchanges have similar rules on their books. Do these rules make sense in the modern world of for-profit exchanges?
US takes lead in summer of discontent
Brooke Masters – FT.com
After months filled with allegations of misconduct by London-based banks, Britain’s financiers could perhaps be forgiven for hoping the autumn will bring a major shift in tone.
Lou Gerstner, Ex-IBM CEO: ‘A Lot Of People In The Business Community Are Totally Fed Up’ With Wall Street
William D. Cohan – Bloomberg View
If you get Jack Welch, Lou Gerstner and Bob Wright — three of the U.S.’s most highly respected former executives — together in a room with David Gregory, the host of NBC’s “Meet the Press,” and there are no television cameras around, there are bound to be some fireworks.
Jon Corzine: Criminal Or Just Plain Old-Fashioned Stupid?
Richard Finger – Forbes
It is a story all too common today that our society is practically anesthetized to it: Securities laws repeatedly failing to protect the trusting investors from unscrupulous money managers. MF Global is a little different twist.
**JK – Or both?
Far From Wall Street and Silicon Valley, a Focus on Family Ties
WILLIAM ALDEN – NYTimes.com
When the hedge fund manager David Einhorn was just another investment analyst in the mid-1990s, his family gave him $500,000 to get his fund, Greenlight Capital, off the ground. Now that he is a billionaire after a career of doing battle with large corporations, he has returned the favor.
Derivatives should not be banned
Richard Livingston – Business Spectator
The internet has been commonplace since the mid 90s and has been instrumental in all sorts of atrocities. Would I ban it? No way. The benefits far outweigh the costs.
**JK – Rebuttal to Derivatives should just be banned in the Aug. 23 issue of JLN.
Peregrine CEO’s new wife seeks annulment
The new wife of Peregrine Financial Group CEO Russell R. Wasendorf Sr. has sought an annulment of their marriage, claiming that he married her knowing he was about to be arrested for defrauding customers and was planning a suicide.
**JK – I almost asked, which one? But it’s the new wife.
Layne Carlson Tells the Story Behind MGEX’s Apple Juice Contract
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.
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
27,717,092 pages viewed, 7,082 articles, 146,830 edits
Eurex in Singapore expansion drive
Jeremy Grant in Singapore – FT.com
Eurex, Europe’s largest derivatives exchange, has embarked on a drive to attract customers out of Singapore after the city state’s regulator allowed it to solicit banks and brokers to become members of its Frankfurt-based clearing house.
NYSE Euronext Chief Calls On U.S. Policy Makers to Address Debt
By Jacob Bunge – Dow Jones
The head of the New York Stock Exchange said Monday that investor confidence in U.S. equity markets has hit an all-time low because of mounting concerns over the national budget deficit, the euro-zone debt crisis and recent snafus in the stock market’s internal workings.
Suits Mount in Rate Scandal
By JEAN EAGLESHAM – WSJ
Banks being probed for interest-rate manipulation face potentially tens of billions of dollars in claims from dozens of lawsuits in the U.S. from cities, insurers, investors and lenders who say they were hurt by the allegedly fudged rates.
Indonesia stock exchange struggles to resume Tuesday
Indonesia’s stock exchange has not decided yet whether trading will resume on Tuesday after technical problems that hampered the market in Southeast Asia’s biggest economy on Monday.
Libor Scandal’s Potential Costs Exploding To $88 Billion Or More
Mark Gongloff – Huffington Post
Funny thing about the Libor scandal: Even when there doesn’t seem to be a lot going on, the cost to banks just keeps on rising.
China Signals Imminent Launch of Margin Trade Trial
China has signaled the imminent launch of a trial in which brokerages can borrow cash via a centralized intermediary to relend to their clients for margin trading, a widely expected move to inject funds into a sluggish domestic stock market.
Knight Capital Picks Three New Directors
JENNY STRASBURG – WSJ.com
Knight Capital Group Inc. has selected three new directors, including the chief executive of TD Ameritrade Holding Corp., three weeks after Knight received a $400 million injection from outside investors, according to people familiar with the matter.
Spanish Recession Deepens
DAVID ROMÁN – WSJ.com
Spain’s economic recession deepened in the second quarter as gross domestic product contracted at a faster pace both on an annual and a quarterly basis amid a steep downturn in domestic spending.
CFTC Issues Final Rules Establishing Swap Dealer And Major Swap Participant Requirements For Swap Trading Relationship Documentation, Swap Confirmation, Reconciliation And Compression Of Swap Portfolios
The Commodity Futures Trading Commission (CFTC) today approved final rules to improve the risk management procedures of swap dealers and major swap participants. The CFTC voted 5 to 0 via seriatim to approve the final rules, which will become effective 60 days after publication in the Federal Register.
Ucits VI could widen scope for regulated retail funds
Sophia Grene – FT.com
European retail funds could be allowed to invest in hedge funds, property or commodities if the industry makes a strong enough case to Brussels.
SEC Won’t Take on Global Research Settlement With Jobs Act
Wall Street Journal Blogs
The SEC has provided some answers to questions about whether the Jobs Act will upend the Spitzer global research settlement. The bottom line answer is not much.
A Regulator’s Key Role in Failed Mutual Fund Reform
New York Times via Yahoo! Finance
Luis A. Aguilar, a member of the Securities and Exchange Commission, opposed a plan to reform money market funds, derailing a significant effort to tighten regulations on the financial industry.
SEC member’s vote doesn’t match image
Luis A. Aguilar, one of five members of the Securities and Exchange Commission, is generally known as one of the commission’s strongest advocates for tougher oversight of the securities industry. In public statements this year, he has pushed the SEC to be more aggressive, contending the commission was not protecting investors assiduously enough.
Statement Of Support – Internal Business Conduct Standards, CFTC Chairman Gary Gensler
Claims companies face risk of reparations
Sharlene Goff, Retail Banking Correspondent – FT.com
People who feel they have been mistreated by claims management companies will be offered an avenue for formal redress for the first time, in a fresh crackdown by regulators.
Federal Reserve Board Considering Changes To The Implementation Timeline For The Dodd-Frank Company-Run Stress Test Requirements
Exchanges & Trading Facilities
[CBOE] New “J” Origin Code for Joint Back Office Orders
Hellenic Exchanges S.A. Change In The Composition Of The Board Of Directors
BISX Q2, 2012 Statistical Report
Hedge Funds & Managed Futures
Jackson Hole May Disappoint Investors Primed for Stimulus
Federal Reserve Chairman Ben S. Bernanke — returning this week to the scene of a 2010 speech that foreshadowed a second round of quantitative easing — probably will disappoint investors looking for him to signal new stimulus.
Paulson to Talk With Bank of America Investors
DAVID BENOIT AND GREGORY ZUCKERMAN – WSJ.com
Bank of America Corp.’s wealth-management arm will host a conference call Tuesday with Paulson & Co.’s John Paulson, offering some of its financial advisers and their clients a chance to grill the struggling hedge-fund manager, people familiar with the matter said.
The Secret Of Bridgewater’s Success Is In Their Understanding Of The Recession
Will we ever pull out of the Great Recession? Why is it taking so long? Let me tell you about a hedge fund group that has the best way to think about it that I’ve ever read. But first, some history.
Guess What Percentage Of Hedge Funds Are Beating The S&P This Year
11%. According to Goldman’s Hedge Fund Trend Monitor, put together by Amanda Sneider, that’s the number of hedge funds who have outperformed the S&P so far this year.
The Incredibly Rare Paul Tudor Jones Documentary, ‘Trader,’ Has Resurfaced
This is like spotting Haley’s comet, or a white stag, or a giant squid. ‘Trader’, the legendary 1987 documentary on hedge fund manager Paul Tudor Jones has resurfaced on the internet . The last time this happened, it was only a matter of hours before it was taken down.
Banks & Brokers
Goldman Sachs Sued by HSH Nordbank Over Mortgage Securities
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.
Citigroup to settle MBS suit for $24.9 million
Reuters via Yahoo! News
Citigroup Inc has agreed to pay nearly $25 million to settle a lawsuit by investors who said they were misled about the quality of mortgage-backed securities they bought just before the U.S. housing market crashed, according to court papers filed Monday in federal court.
Emporiki Hits Crédit Agricole Net
NOÉMIE BISSERBE – WSJ.com
Crédit Agricole SA Chief Executive Jean-Paul Chifflet said Tuesday that he hoped to reach an initial agreement to sell the French bank’s Emporiki unit in a few weeks, as losses at the troubled Greek business and write-downs on Italian assets slashed second-quarter net profit by 67%.
Protesters to urge city to yank funds from JPMorgan
Rochester Democrat and Chronicle
Citing the banking giant’s mortgage practices, social justice groups are urging the city of Rochester to divest from JPMorgan Chase.
Chase Sparks Job Creation Through the Start Something Challenge
The JPMorgan Chase Foundation committed $150,000 to back the Start Something Challenge – a statewide initiative led by NJ-based non-profit Rising Tide Capital.
Hudson City Deal Helps M&T Bank Catch Up in Capital
PETER EAVIS – NYTimes.com
One of the nation’s bigger regional banks, M&T Bank, has had a hectic few days of deal-making. Last week, M&T Bank paid back the government its bailout money, and on Monday, it announced the acquisition of Hudson City Bancorp, a struggling mortgage lender.
GoldenTree Hires Morgan Stanley’s Ornstein to Co-Head Trading
GoldenTree Asset Management LP, a money manager overseeing $15.9 billion in assets, hired Daniel Ornstein from Morgan Stanley to co-head its trading business.
Morgan Stanley Smith Barney Crawling Out Of The Bunker, Just In Time For Five-Year High
Wall Street Journal Blogs
Morgan Stanley Smith Barney got bearish just as the market began to take off last October. Now it’s turning bullish. Should we be worried?
Deutsche Bank Bonus Policy a ‘Game Changer’: Attorney
A new compensation plan at Deutsche Bank is a “game changer” when it comes to clawing back bonuses, John Singer, an employment attorney at Singer Deutsch, told CNBC’s “Closing Bell” on Monday.
Federal Reserve Board Begins Practice Of Publishing Reserve Bank Financial Reports On A Quarterly Basis
Clearing & Settlement
Time to clear out problems with collateral
Marianne Brown – FT.com
At the heart of Europe’s efforts to reduce risk and increase transparency in the financial markets, as mandated by the G20 group of leading nations, is the proposed requirement for “eligible” derivatives transactions to be cleared through entities known as clearing houses or central counterparties.
Indexes & Products
Anthony Da Costa And Mark Rodino Join STOXX Limited
STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced Anthony Da Costa and Mark Rodino have joined the company as chief operating officer (COO) and global head of sales, respectively, effective immediately.
New Dow Jones Credit Suisse Hedge Fund Index Commentary Offers Insight into July Hedge Fund Performance
The Dow Jones Credit Suisse Hedge Fund Index finished up 1.42% in July.
CSOP Launches First RQFII ETF To Track The FTSE China A50 Index
Princeton Financial Systems Launches DVS Publisher Suite Version 3.5
Princeton Financial Systems, a global leader in providing accounting, compliance and reporting solutions to the investment industry, has introduced enhancements to its DVS Publisher Suite. Version 3.5 provides users with enhanced configuration and formatting functionality.
Trade Technologies Automates Global Trade Document Presentation for The Royal Bank of Scotland N.V. Clients
Trade Technologies, the global leader in international trade document solutions, and The Royal Bank of Scotland N.V. announced today that RBS will use Trade Technologies’ patented Global Trade Management software to receive online presentations of trade documents from export customers.
CFTC Orders Foreign Traders SMP Bank and Epaster Investments, Ltd. to Pay $980,000 for Engaging in a Wash Sale Scheme in the CME’s Japanese Yen Options Contract
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against SMP Bank (SMP), headquartered in Moscow, Russia, and Epaster Investments, Ltd. (Epaster), an investment company located in Nicosia, Cyprus, for engaging in wash sales and causing the execution of non-competitive pre-arranged trades in the Japanese Yen options contract traded on the Chicago Mercantile Exchange (CME).
NFA Enforcement and Registration Actions
Informed Funds LLC and David Waring
[ASIC] Former portfolio manager charged with 63 counts of misusing his position
Environmental & Energy
Israel’s solar power struggles against government
Associated Press via Yahoo! News
Israel has developed some of the world’s most advanced solar energy equipment and enjoys a nearly endless supply of sunshine, but when it comes to deploying large-scale solar technology at home, the country remains in the dark ages.
SGX deepens ties with China Shandong province
Singapore Exchange (SGX) today further enhanced its ties with China by entering into a Listing Memorandum of Understanding with the Shandong Finance Office.
TSE explains derivatives malfunction, takes action
The Trade News
The Tokyo Stock Exchange (TSE) has released details of the technology error which halted trading on its derivatives market on 7 August and laid out its plans for ensuring future market stability.
Thai Bourse’s Opportunity Day Well-Received By Investors
The Stock Exchange of Thailand (SET) announces that the second-quarter “Opportunity Day” event, where top managements of listed companies meet directly with analysts and investors, during August 6-September 6, has was well-received from audiences viewing the event live via SET’s website,
Here’s A Breakdown Of China’s Collapsing Corporate Profits
The on-going non-stop weakness in Chinese equities have been a recurring theme here. The chart below from Goldman Sachs illustrates the point perfectly.
The Dangers of Getting Rich in China
JOHN BUSSEY – WSJ.com
Decades ago, China’s Deng Xiaoping is said to have energized the nation’s capitalists by declaring: “To get rich is glorious.” Turns out that really meant: “Get rich and you’ll get audited.”
Tokyo Stock Exchange Has Published The Index Value Of TSE Home Price Index For June
HKEx: Scrip Dividend Scheme In Relation To The Interim Dividend For The Year Ending 31 December 2012 – Calculation Of Market Value
Hong Kong’s Securities And Futures Commission Commences Legal Proceedings Against Ernst & Young Over Access To Accounting Records
Press Conference By Tadahiro Matsushita,Japan’s Minister For Financial Services – Revision Of Procedures For Determining TIBOR – Enhancing Surveillance Capabilities Of The Securities And Exchange Surveillance Commission And FSA
Abdul Wahid Al Ulama Named Non-Executive Director Of DGCX
The Dubai Gold and Commodities Exchange (DGCX) today announced the appointment of Abdul Wahid Al Ulama as an Independent Director.
Nigeria’s First Bank asks shareholders to approve restructure
Reuters via Yahoo! News
Nigeria’s First Bank said on Monday it will seek shareholders’ approval to transfer its subsidiaries into a new holding company, in order to meet a regulation that risky capital market business be kept separate from retail and regular business banking.
Most-hated US industries
Recent polling suggests that overall economic conditions play a significant role in shaping public perceptions of some of the industries we rely on. Among those we hate: oil and banking.