Breaking News

John Lothian Newsletter: Deutsche Börse takes step nearer Singapore clearing house; Big fund managers form new dark pool equity trading venue; Swiss franc fallout claims more casualties

First Read

Focused: What The Industry Knows About Transparency (Part 2)
JohnLothianNews.com

Back in November, the industry gathered for the annual FIA Expo event in Chicago. There, John Lothian News used an exhibitor booth (Thanks Cinnober!) as its studio to ask industry participants key questions about transparency issues in today’s markets.

Part 2: What solution would you suggest in order to improve transparency in the markets today?
Watch the video »
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China funds become new force in global commodity trade
By Henry Sanderson in London and Lucy Hornby in Beijing, FT
China’s Shanghai Chaos investment fund is named after the pioneer of chaos theory Edward Norton Lorenz, who coined the term “butterfly effect” to describe seemingly random yet connected events. That may be an apt description for the global metals markets, where moves made by hedge funds in China are increasingly felt across the globe.
jlne.ws/15s76UH

***** I wonder what Bart Chilton will call the Chinese funds. The massive passives get run over by the more massive butterflies?

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Bond Investors Haven’t Been This Gloomy Since 2008 — But Are They Right to Be So Down?
By Daniel Kruger and Liz Capo McCormick, Bloomberg
Bond investors can be a gloomy bunch, glass-half-empty types who see bad news everywhere.
jlne.ws/1yloXrU

***** I am building a new house. Low interest rates are great, deflation is not.

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The Turning Point for Internet Freedom; As regulators weigh imposing net neutrality on the Web, Congress tries to pre-empt government overreach.
By Robert M. McDowell
The Federal Communications Commission is about to answer the most important question in its 80-year history: Does the agency intend to protect the open Internet, or is it lunging to seize unlimited power over the Web? We’ll find out on Feb. 26 when the FCC votes on “net-neutrality” rules that would treat the Internet like a public utility, with regulators potentially setting rates, terms and conditions for providers.
jlne.ws/1xt4nSo

***** I am not worried about the Internet’s ability to adapt to whatever comes.

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A Generational Gap: Giving to Charity; The Young, the Middle-Aged and the Old Differ on Where Giving Should Be Directed
By Glenn Ruffenach
Only a few weeks ago, many Americans were rushing to help their favorite charities—even if last-minute tax deductions, rather than the holiday spirit, were the spur. As it turns out, what we give, and where we direct our dollars and goods, varies from generation to generation.
jlne.ws/1wnDE8q

***** I have a new request coming soon from some of my scouts.

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At Davos, Ironmen Find Contacts, Contracts and Even Love
By Simon Kennedy, Bloomberg
For Martin Sorrell, a quarter century of journeying up the Swiss Alps to the World Economic Forum each January has paid off in expected, and unexpected, ways: Government contacts, business contracts and — eight years ago – – love. “I met my wife in Davos,” said the founder and chief executive of advertising giant WPP Plc. (WPP) “You could say I’ve got more than I bargained for.”
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***** I left my heart in Davos.

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Where Are All the Women at Davos?
By Ambereen Choudhury and Elisa Martinuzzi, Bloomberg
Women are still scarce at the World Economic Forum in Davos even as the youngest attendees reverse the gender gap for the first time. Among the 2,500 participants at the world’s most prestigious gathering of political and business leaders, 17 percent will be women, about the same as in the past two years, according to WEF estimates. At the event, which kicks off Tuesday in the Swiss alpine resort, 54 percent of the forum’s Global Shapers community of 50 leaders will be female.
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****** Evidently this was a question asked by the CEO referenced above.

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Bridging the Week by Gary DeWaal: January 12 to 16 and 19, 2015 (SEC Examination Priorities; In Life as in Literature; Unregistered CTA Sanctioned)
Katten Muchin Rosenman LLP
Last week, the Securities and Exchange Commission followed the Financial Industry Regulatory Authority’s lead earlier this month by publishing examination priorities for 2015. Also, an SEC-registered investment adviser and its owner—featured in a best-selling book by Michael Lewis—were sanctioned by an administrative law judge before the SEC for misrepresentation and fraud in connection with their role in the purchase of subprime mortgage-backed assets for certain collateralized debt obligations that subsequently were sold to investors.
jlne.ws/1CeomcI

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Focused: What The Industry Knows About Transparency (Part 1)
JohnLothianNews.com

Back in November, the industry gathered for the annual FIA Expo event in Chicago. There, John Lothian News used an exhibitor booth (Thanks Cinnober!) as its studio to ask industry participants key questions about transparency issues in today’s markets.

Part 1: Where do we need to improve transparency in the markets today?
Watch the video »
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Small Bits & Pieces
By John J. Lothian

This is the time of year when we start looking ahead in the calendar for signs of spring. If it helps, pitchers and catchers report for spring training in exactly four weeks. In exactly seven weeks, our industry reports to Boca Raton for the annual FIA International Futures Industry Conference. John Lothian News will be there in full force, meeting with participants, attending the panels and events, and conducting interviews. Drop us a line if you would like to schedule a meeting.

Dennis Zarr has joined Saliba Venture Management, LLC as senior advisor, effective January 1, 2015.

Stu Unger of The Price Group has saved a German Shepherd and entered it into a dog show. Some things you can’t make up.

Industry veteran attorney and long-time friend of JLN Jim Falvey has joined the regulatory compliance practice at McGladrey

I am celebrating 12 years at John J. Lothian & Company, Inc., according to LinkedIn. The John Lothian Newsletter received its name 12 years ago too.

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Douglas Ashburn; Jim Skillen; Jeff Borchardt; James Parisi; Jaime Yeh; Jack Sandner; Ian Wall; Hilda Harris Piell; Helen Flanagan; Harriet Hunnable; Ranjan Bhaduri; Mark Faulkenberg; Dennis Zarr

Companies, Organizations and Groups

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Lead Stories

Deutsche Börse takes step nearer Singapore clearing house
Jeremy Grant, FT
Efforts by Deutsche Börse to establish a physical beachhead in Asia took a step forward on Tuesday when Singapore approved the European exchange operator’s plans for a clearing house in the city-state to be launched in 2016.
The “in principle” approval is another sign of moves by western exchanges to build market infrastructure in Singapore, which has become their focal point for expansion into Asia.
jlne.ws/1GoCIvp

Big fund managers form new dark pool equity trading venue
Stephen Foley in New York, FT
Nine of the world’s largest fund managers are launching a new dark pool for equity trading, in an attempt to prevent high-frequency firms from disrupting their trades and raising costs.
jlne.ws/1yGJYxE

Swiss franc fallout claims more casualties
Philip Stafford, Caroline Binham and Miles Johnson in London, FT
A leading European foreign exchange broker filed for administration on Monday and a Danish bank conceded it faced heavy losses as the UK’s market regulator stepped in to assess the damage wreaked on the industry by last week’s violent swing in the Swiss franc.
jlne.ws/1CekW9Z

S.E.C. Reversal May Clear Way for Shareholders to Challenge Companies
By GRETCHEN MORGENSON, NY Times
With the reversal of a ruling that kept corporate governance questions from being put to a company’s investors, the Securities and Exchange Commission has potentially cleared the way for such challenges to spread at annual shareholder meetings.
jlne.ws/1CeqelR

Denmark Strikes Back at Speculators and Burnishes Peg Defenses
By Peter Levring and Frances Schwartzkopff, Bloomberg
Denmark is trying to silence currency speculators as the government and central bank insist the Nordic country won’t follow Switzerland in severing its euro ties.
jlne.ws/1KXIdky

Price Collapse Hits Scavengers Who Scrape the Bottom of Big Oil’s Barrel
By Joe Carroll, Bloomberg
In the $1.6 trillion-a-year oil business, there are global titans like Exxon Mobil Corp. (XOM) that wield more economic might than most of the nations on Earth, and scores of wildcatters scouring land and sea for the next treasure troves of crude.
jlne.ws/1wnEFNQ

Wall Street Unites for Hotels.com Style Derivatives Offer
By Regina Tan, Bloomberg
Banks including Goldman Sachs Group Inc. (GS) and JPMorgan Chase & Co. (JPM) are collaborating to sell structured products in Asia as private wealth in the region balloons.
jlne.ws/1sVHJ8u

CME Group Announces Increased Offer for GFI Group Stockholders to Receive $5.85 per GFI Group Share
CME Group
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today announced it has delivered executed revised agreements to the Special Committee (the “Special Committee”) of the Board of Directors of GFI Group that, if approved, would increase the consideration payable to GFI Group stockholders to $5.85 per share from $5.60 per share, payable in a mix of shares of CME Group Class A common stock and cash. This new offer price represents more than an 88% premium above the closing price of $3.11 per share of GFI Group common stock on July 29, 2014, the last day of trading prior to the announcement of the CME transaction.
jlne.ws/15rhwEO

NYSE Completes Minority Investment in Coinbase
ICE
Intercontinental Exchange (NYSE: ICE), the leading global network of exchanges and clearing houses, announced today that its wholly-owned subsidiary, The New York Stock Exchange, has made a minority investment in Coinbase, a leading bitcoin wallet and platform with over 2.1 million consumer wallets, 38,000 merchants and 7,000 developers.
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Effort involves BlackRock, J.P. Morgan, BNY Mellon and others
By Kirsten Grind, MarketsWatch
Big money managers led by Fidelity Investments are close to launching a private trading venue designed to let them buy and sell large blocks of stock without the involvement of Wall Street firms and high-speed traders, according to people familiar with the matter.
jlne.ws/1CKCtoq

China’s Sudden Regulatory Moves Draw Criticism; Chinese Watchdogs’ Policy Execution Found Wanting in Wake of Market Volatility
By Shen Hong
China’s securities regulator is in a tough spot after a clampdown on margin financing sent Shanghai’s stock market plunging Monday, only to rally a day later following a conciliatory statement from the watchdog.
jlne.ws/1yEVeMw

U.S. May Gain Global Economic Edge Thanks to Minorities
By Victoria Stilwell, Bloomberg
Jasmin Figueroa helps develop new products for Johnson & Johnson, she bought a home in 2012 and she was a contestant last year in the Miss New Jersey USA pageant. She’s also Hispanic.
jlne.ws/1AGLvAt

Convergex Adds Industry Veterans Phil Gough and John Holl to International Leadership Team
Convergex
Convergex, an agency-focused global brokerage and trading related services provider, announced today the addition of two industry veterans to its international leadership team. Philip Gough has joined the firm as chief executive officer of Convergex Limited, Convergex’s London-based brokerage. Gough will oversee all aspects of Convergex’s international business operations and will serve on the firm’s Executive Committee. In addition, John Holl has joined the company as managing director and head of Convergex Limited’s sales and trading. Both Gough and Holl will be based in London.
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Regulatory

Bond-Price Disclosure Seen Raising Europe Borrowing Costs
By Jim Brunsden, Bloomberg
Companies in the European Union may face an “alarming” surge in funding costs if the bloc’s markets regulator pushes too many trades into the light, a bloc-wide business lobby said.
jlne.ws/1J7pnnp

FINRA Proposes Rule Change To Options Reporting
by Daniel Dietrich, JD Supra
FINRA Rule 2360 requires that members file reports for each account that has an aggregate position of 200 or more options contracts on the same side of the market covering the same underlying security or index. The reports are commonly called Large Options Position Reports (“LOPRs”). The LOPRs allow FINRA to, among other things, confirm that firms have not exceeded the limits in FINRA Rule 2360(b)(3). Currently the position limit rules require that all accounts acting in concert must be aggregated to ensure position limit compliance. The rule change would require that the position report also be based on accounts acting in concert to ensure that they do not exceed to the 200 contract limit. This would enable the report to capture the entire position to monitor for position limit purposes.
jlne.ws/1ByjvEB

Mold Appointed to CFTC Advisory Committee
Wisconsin Ag Connection
A Wisconsin dairy producer and long-time advocate for women in agriculture groups has been appointed to the Commodity Futures Trading Commission’s Agricultural Advisory Committee. Doris Mold of Cumberland will serve a four-year term on the panel, which as an advisory group for the commission on issues involving the trading of agricultural commodity futures and options and facilitate communications between the CFTC, the agricultural community and agriculture-related organizations.
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Exchanges & Trading Facilities

London Stock Exchange Group And City Gateway Launch New Financial Apprenticeship Scheme
London Stock Exchange
‘Gateway to the City’ will create new pathway into financial services industry
Apprentices today open trading at London Stock Exchange
Shadow Exchequer Secretary, Shabana Mahmood, celebrates with apprentices
London Stock Exchange Group has partnered with London based charity, City Gateway, to launch a new scheme to help young people, aged 16-24 years old, take part in apprenticeships in the financial services industry. The ‘Gateway to the City’ initiative will pioneer a new pathway into the sector, by providing participants with year long apprenticeships and training at both London Stock Exchange Group and fellow scheme partners.
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Eurex Gains Regulatory Nod for Asia Clearer
Waterstechnology.com
Deutsche Börse subsidiary will expand to Singapore. Deutsche Börse has received “in principle” regulatory approval from the Monetary Authority of Singapore (MAS) to establish a clearing house in the Asian state through its subsidiary Eurex.
jlne.ws/1sVK8jA

LME Extends Publication Of Live Forward Price Curves
LME
The London Metal Exchange (LME) has extended its live forward price curves for each metal as part of its commitment to further enhance the transparency of the price discovery process following last year’s review of the Ring, the Exchange’s open outcry trading platform.
jlne.ws/1xQEGdz

Hong Kong exchange chief said expects Shenzhen link this year
Reuters
The Hong Kong Exchanges & Clearing expects to extend its landmark Shanghai trading link to the Shenzhen Stock Exchange this year, the bourse’s chief executive said on Tuesday. Speaking at the Asian Financial Forum in Hong Kong on Tuesday, Charles Li said the addition of Shenzhen was “clearly” the next step for scheme, and added he hoped this would happen in 2015. “It should be this year, I would be disappointed if it does not happen this year.”
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CME Group Again Raises Bid for Broker-Dealer GFI
WSJ
CME Group Inc. has again raised its bid for fellow broker-dealer GFI Group Inc., now offering $5.85 a share in cash and stock, as it tries to win over shareholders ahead of this month’s vote.

CME and rival BGC Partners Inc. have been locked in a bidding war over GFI since last July. Brokers such as CME, BGC and GFI act as middlemen for Wall Street’s big banks.
jlne.ws/1DY4InA

SGX and REITAS partner on REITs education
SGX
Singapore Exchange (SGX) and the REIT Association of Singapore (REITAS) have launched an initiative to educate the public on REITs and stapled trusts.
jlne.ws/1ylFQ5A

Hedge Funds & Managed Futures

As Switzerland Moves to Negative Rates, Finance Enters Uncharted Territory
By Michael J. Casey, WSJ
Having abandoned its policy of capping the Swiss franc’s value versus the euros, the Swiss National Bank needs a Plan B for blocking the destructive, deflationary forces emanating from Switzerland’s struggling neighbors in the eurozone.
jlne.ws/1J7yrIH

Palladium is a Metal Rarer Than Gold. Now It’s Even More Rare, Thanks to Cheap Oil
By Laura Clarke, Bloomberg
America’s renewed love affair with the automobile is tightening global supplies of palladium, a metal rarer than gold.
jlne.ws/1sVHwlQ

Euro-gold outperforms ahead of ECB, dollar-gold a smart bet too
By Jan Harvey, Reuters
Gold denominated in euros is outperforming as markets position for the European Central Bank (ECB) to launch a program of money-printing, but the policy could boost dollar-priced bullion too.
jlne.ws/152Elxl

How to Tell if Your Retirement Nest Egg Is Big Enough; This Calculation Might Prompt You to Take Some Winnings Off the Table—Before It’s Too Late
Wesley Bedrosian
By William J. Bernstein
Here we go again. During past bull markets, many Americans nearing retirement fleetingly acquired a nest egg adequate for later life. Then, as quickly as that nest egg came, it went—leaving behind regret, sleepless nights, and in the worst case, panic selling near the bottom that eliminated any possibility of recovery.
jlne.ws/1CeliNJ

How Low Can Oil Go? Traders Balk at Making the Call; As Crude Extends Slide, Even Those Who Bet on Lower Prices Are Getting Nervous; ‘It’s Bloody Nuts’
By Nicole Friedman And Rob Copeland
The collapse in the oil market has been very good for Anuraag Shah. His hedge fund, Tusker Capital LLC, last spring made a bet that oil prices would fall and has since reaped big profits from their nearly 60% decline.
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Gold rally due as central banks add risk
John Plender, FT
Carry traders are squeezed, the odd foreign exchange broker goes to the wall, central Europeans who borrowed in Swiss francs to buy homes are hurt.
So what, you say.
jlne.ws/1DXMOkP

Lead price outperforms after mine shuts, more closures possible
By Eric Onstad, Reuters
Lead prices have bounced following a mine closure, which one analyst said could herald similar moves in other metals as sharp market falls threaten the profitability of high cost mines.
jlne.ws/1J35X4X

Banks & Brokers

Jefferies Reprises Role of Market White Knight; Firm Honed Its Skills in 2012 Rescue of Knight Capital
By Telis Demos
When foreign-exchange broker FXCM Inc. was forced to seek a rescue last week following a surprise surge in the Swiss franc, a number of potential white knights surfaced, including private-equity firms and Leucadia National Corp.
jlne.ws/1xt3vgI

Breaking Up the Big Banks: New Poll Suggest Voters Are in Favor
By Christina Rexrode, WSJ
There’s not a lot of love for the big banks these days. Case in point: A poll to be released Tuesday by a group called the Progressive Change Institute found that a majority of U.S. voters would be quite happy for Citigroup Inc.C +0.80% and other big banks to be broken into pieces. According to the poll, 58% of likely voters said they would support breaking up “big banks like Citigroup.”
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Credit Suisse Sues REI Agro in Singapore Over Alleged Fraud
By Andrea Tan, Bloomberg
Credit Suisse Group AG (CSGN) sued REI Agro Ltd. (REIA) in Singapore claiming the Indian basmati rice producer and 16 related companies conspired to get loans for non-existent trades of the staple.
jlne.ws/1xQwGt2

IG reassures on dividend after Swiss losses
Philip Stafford
A dealer reacts on the trading floor at financial spread betting company IG Index, as an inflation report by new Bank of England governor Mark Carney is televised in the City of London August 7, 2013. Britain’s top share index extended losses on Wednesday after the Bank of England (BoE) pledged to keep interest rates low for a longer period, but expressed caution about the fragile economic recovery. REUTERS/Luke MacGregor (BRITAIN – Tags: BUSINESS POLITICS)©Reuters
IG Group, the UK spread betting company, has reassured investors that it stick with its new dividend policy despite last week’s wild swings in the Swiss franc exchange rate.
jlne.ws/1AGF1Sb

IG: Swiss rolled
Jonathan Guthrie
There is no such thing as low-risk involvement in financial markets
Young Turks mature into Old Turks, who are much less scary. IG Group, once seen as challenging traditional brokers, fitted the latter description until January 15. Then the spread betting business took a hit estimated at £30m. The group was caught out by a 30 per cent jump in the Swiss franc after it soared free from its link to the euro.
jlne.ws/1yETwL7

Morgan Stanley’s trading revenues disappoint
Richard Blackden, FT
Like those at its Wall Street rivals, Morgan Stanley’s traders had a tougher final three months of 2014.
jlne.ws/1ztwDdp

Broker FXCM shares sink pre-market following loan details
Reuters
Shares in retail currency broker FXCM tumbled on Tuesday after it laid out details of a loan aimed at saving the company after $200 million in losses from last week’s shock removal of the cap on the Swiss franc.
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BGC Partners’ Fourth Quarter and Full Year 2014 Financial Results Announcement to be Issued Prior to Market Open on Wednesday, February 11, 2015
BGC Partner
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Clearing & Settlement

Societe Generale Securities Services consolidates cash equity clearing with LCH.Clearnet Automated Trader
Société Générale Securities Services is the latest clearing member to consolidate its cash equity business with LCH.Clearnet. The mandate is indicative of the growing trend amongst financial institutions to drive efficient cash equity clearing activity by utilising one CCP connection. This has resulted in LCH.Clearnet’s interoperable volumes increasing by over 50% over the last 18 months.
jlne.ws/1DY1WyC

OCC to work directly with non-banks
Securities Lending Times
OCC is planning to launch a new programme that will allow it to access new sources of liquidity through repo and securities lending agreements with non-banks. The US Securities and Exchange Commission (SEC) published a notice of no objection to the central counterparty’s (CCP) plans in the Federal Register on 8 January.
jlne.ws/1waRvyP

India’s ICICI Bank Lets Customers Tweet Real-Time Payments
PYMNTS.com
Mumbai-based ICICI Bank said it is the first bank in Asia and only the second in the world to offer a Twitter-based fund transfer service, after Groupe BPCE, France’s second-largest bank by customers, which launched a similar service last year. ICICI also has a year-old service for transferring money through Facebook. According to Executive Director Rajiv Sabharwal, that now has 30,000 active Facebook users.
jlne.ws/1DY215n

Indexes & Products

S&P to Cleave Real Estate Firms From Financials Sector
WSJ
Public beer and tobacco companies will continue to be listed as consumer staples, but real estate companies are getting their own place on the charts. S&P Dow Jones Indices and MSCI are creating a new sector, moving property companies and real estate investment trusts out of the “financials” sector, and into a “real estate” category. Although the much-lobbied change doesn’t go into effect until August 2016, comments on the change to the Global Industry Classification Standard structure are due by Feb. 13.
jlne.ws/1DY2Lr7

Invesco PowerShares Announces Launch of Russell 1000 Equal Weight Portfolio (EQAL)
Invesco PowerShares Capital Management, LLC, a leading global provider of exchange-traded funds (ETFs), announced the launch of the PowerShares Russell 1000 Equal Weight Portfolio (EQAL), which was listed on December 23, 2014 on the NYSE. EQAL seeks investment results that generally correspond to the price and yield of the Russell 1000 Equal Weight Index. http://jlne.ws/1DY2RyX

FTSE Launches Global Sustainable Yield Index Series
Mondovisione
FTSE Group (“FTSE”), the global index provider, has launched the FTSE Global Sustainable Yield Index Series, designed to measure the performance of equity securities exhibiting relatively high and sustainable yields. The benchmarks reflect the next stage in the evolution of high yield indices, with an emphasis on dividend sustainability.
jlne.ws/1GoPDxw

Xetra/Börse Frankfurt: Two New Amundi Bond Index ETFs Launched In XTF Segment On Xetra
Mondovisione
Two new exchange-listed bond index funds issued by Amundi have been tradable in Deutsche Börse’s XTF segment since Tuesday.
jlne.ws/1ztCO0W

Technology

What will the launch of real-time clearing at BM&FBOVESPA mean for the industry?
Cinnober
In the second video with Patrick L Young at our Stockholm office, he comments on what other exchanges and clearinghouses can learn from the launch of real-time clearing for derivatives in Brazil.
jlne.ws/1CwrUox

Coinbase, a Bitcoin Start-Up, Raises $75 Million in Vote of Confidence
By Sydney Ember, NY Times
Coinbase, one of the most popular Bitcoin wallet providers, announced on Tuesday that it had closed a $75 million financing round, the biggest yet for a virtual currency start-up.
jlne.ws/1ylGtw4

Enforcement

For skimming $1.3 million, 2 Baird workers quietly fired, never charged
By Bruce Vielmetti of the Journal Sentinel
Some embezzlers who get caught go to prison, serve years of probation or at least must pay the money back. But for embezzling $1.3 million from R.W. Baird & Co., a pair of former employees who administered the company’s payroll only got fired and barred from ever working in the securities industry again.
jlne.ws/1sVFp1e

FCA fines Reckitt Benckiser for executive trading disclosure failures
By Andrew Winterbottom, Reuters
Britain’s financial regulator has fined Reckitt Benckiser for not informing the market properly about share trading by two senior executives, in the latest crackdown on disclosure failures by London-listed firms.
jlne.ws/1BaUU5W

Environmental & Energy

Study: Renewables as cheap as fossil fuels, despite plummeting oil price
By Jessica Shankleman – BusinessGreen
Maturing clean energy technologies, such as onshore wind, solar power and biomass, are reaching grid parity in many parts of the world regardless of whether or not they receive subsidies, a major new report by the International Renewable Energy Agency (IRENA) has revealed.
jlne.ws/1zt3Buc

U.S. Won’t Intervene in Oil Market
By Anthony DiPaola – Bloomberg
The U.S. won’t intervene in the oil market amid falling crude prices, according to Amos Hochstein, the U.S. State Department’s energy envoy.
jlne.ws/1KXJ9Fx

World’s Largest Traders Use Offshore Supertankers to Store Oil
WSJ
Companies Are Buying Oil Now to Sell Later When Prices Rise
jlne.ws/1DXZPe8

Industry: Obama sending mixed messages on natural gas
By Timothy Cama – The Hill
The natural gas industry has a question for President Obama: Are you for us or against us?
jlne.ws/1wnawxZ

Costing the climate: Four ways to price carbon
By Will Evison and Jonathan Grant – RTCC
Two Stanford academics caused a stir last week suggesting that the true social cost of carbon is $220.
jlne.ws/1EkqEGI

Asia-Pacific

Hong Kong Tightens Investor Mortgage Rules Amid Record Prices
By Michelle Yun, Bloomberg
Hong Kong tightened mortgage lending rules, restricting the amount that banks can lend to property investors amid record home prices in the city.
jlne.ws/180wanh

Brokerages Fall More in China as They Jump in Hong Kong
By Bloomberg News
Shares of Chinese brokerages kept falling on the mainland on Tuesday as they bounced back in Hong Kong. The difference: declines in Shenzhen and Shanghai shares had been limited Monday by those markets’ 10 percent limits on price swings, a protection that doesn’t exist in Hong Kong.
jlne.ws/1ukcFe9

Itochu, Charoen Pay $10.4 Billion for Stake in Citic
By Yuriy Humber and Ichiro Suzuki, Bloomberg
Nice timing. On the day China said it’s economy is growing faster than expected, two companies from Japan and Thailand made one of their biggest bets on just that. Charoen Pokphand Group, the first foreign investor in China after Deng Xiaoping opened the economy in 1978, and Japan’s 157-year-old trading house Itochu Corp. (8001) agreed to spend $10.4 billion for a stake in state-controlled Citic Ltd.
jlne.ws/1ylpRo3

Mitsui Names Yasunaga CEO Amid Oil, Commodity Price Drop
By Yuriy Humber, Bloomberg
Mitsui & Co. (8031) said Tatsuo Yasunaga will take over as chief executive officer on April 1, marking a changing of the guard at Japan’s biggest trader of oil and iron ore.
jlne.ws/1xQwSsi

China’s $20 Trillion Headache Underscored by Stock Swings
By Bloomberg News
For China’s central bank, the 36 percent stock market rally through Jan. 16 spurred in part by a surprise November interest-rate cut is the latest reminder that it’s easier to unleash money than to guide it to the right places.
jlne.ws/1CemlgE

Swiss action turns up heat on the Chinese yuan
By Craig Stephen, MarketWatch
The surprise move by Switzerland to scrap its currency ceiling against the euro EURCHF, -1.03% last week is a reminder there can be unexpected collateral damage from central banks waging currency wars. As markets digest last week’s turmoil, expect focus to turn to other fault lines on the global currency map.
jlne.ws/1CKChpi

HKFE Announces Revised Margins For Futures Contracts
Hong Kong Futures Exchange Limited
jlne.ws/1DXY4xF

Frontier Markets

Putin Enlists Veteran of ‘Much Tougher Times’ to Help Contain Ruble Crisis
By Evgenia Pismennaya, Anna Andrianova and Torrey Clark, Bloomberg
The man Vladimir Putin is relying on to end the deepest currency crisis of his presidency has seen worse. As deputy head of the central bank after the Soviet Union fell in 1991, Dmitry Tulin, then in his mid-30s, had to help organize the rollout of a dozen new currencies against the backdrop of runaway price growth across the former communist empire. Now 58, Tulin is back at Bank of Russia, this time to craft monetary policy as the ruble’s biggest retreat in 17 years shakes the foundations of a shrinking economy.
jlne.ws/15qVimg

Richest Russians Repatriate Assets as Putin Turns Tax Screw
By Anna Baraulina, Alex Sazonov and Yuliya Fedorinova, Bloomberg
President Vladimir Putin is pushing harder on Russia’s richest citizens to repatriate offshore assets amid a slump in the ruble and the imposition of sanctions by the U.S. and the European Union.
jlne.ws/1CwfuNI

Shortages hit Argentina as bond talks freeze
Benedict Mander in Buenos Aires, FT
During the Christmas holidays, Argentines were given an unwelcome reminder of how their country is struggling with limited foreign currency reserves when tampons started to disappear from supermarket shelves.
jlne.ws/152yXdM

India to allow foreign firms on to commodity futures market
Risk.net
jlne.ws/1DXVRlA

Iran’s importers struggle to access foreign currency
Najmeh Bozorgmehr in Tehran and Emiko Terazono in London, FT
Importers of basic commodities in Iran say they are struggling with delays in receiving hard currency from the central bank, caused by the impact of falling oil prices and international sanctions over the country’s nuclear programme.
jlne.ws/1yly3EU

Miscellaneous

Hot Art Market Lends Sizzle to Christie’s, Sotheby’s Sales; Auction Houses Set Records as First-Time Buyers Pursue Trophy Works
By Kelly Crow
The art market is still sizzling.
Christie’s International PLC said Tuesday it sold $8.4 billion of fine and decorative art last year, up 17% from the year before and a record for the London-based company.
jlne.ws/15sbd32

U.S. Pressures Casinos Over Sports Betting; Treasury Calls on Casinos to Identify Third-Party Bettors, File Suspicious Activity Reports as Needed
By Kate O’Keeffe
The U.S. Treasury is telling casinos to do more to stop criminals from using their sports books to launder money in its latest warning to the industry to bolster compliance programs.
jlne.ws/1umXZR0

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About Author

Doug Ashburn is a former editor-at-large of John Lothian News. He left in late 2016 and is now the managing editor of T3 Custom.