Breaking News

John Lothian Newsletter: CFTC Commissioner Mark P. Wetjen Announces his Resignation; BP traders rigged gas market, says judge; Oil’s Worst-Ever Summer Signals Price Rout Is Nowhere Near Done

First Read

Bits & Pieces
By John J. Lothian
On Monday the Trading Tech 300 program will come to the Chicago Board of Trade Building as Glenstar Properties puts on three merit badge classes for Boy Scouts from around the Chicagoland area.

The classes sold out quickly once listed on the Pathway to Adventure Council website (http://www.pathwaytoadventure.org). Several boys from my troop are signed up as they wanted to take a merit badge class in the building that was Wayne Towers in Batman Begins. It was also in The Dark Knight as itself. That is just too cool.

Glenstar is offering merit badge classes in Engineering, Electricity and Search and Rescue. One of the ideas behind the Trading Tech 300 program is to put the teaching of the merit badge materials in the context of a business where those skills are being used every day. Glenstar really stepped up for this program with these offerings.

Two other current offerings for Trading Tech 300 are the CBOE offering First Aid and Finger Printing and the National Futures Association also offering Fingerprinting.

These are early days in Trading Tech 300 program, but I could not be happier with the response from firms and scouts to the program. Advantage Futures kicked off the program in July with the Chess and Public Speaking merit badges and the feedback was great.

It is not a coincidence that I am focused on helping young people get exposed to and learn about our industry and the companies in it. Whether it is Trading Tech 300, the Summer Intern Education Program or this newsletter and our social media outreach, I am trying to reach, inform, inspire and educate a new generation of industry professionals, traders, and other market players and participants.

Before I leave this industry, I want to leave it better than I found it. And it was unbelievably great when I started. I believe our best days are ahead of us, but it will take the next generation to get us there. Part of that next generation might just be a bunch of eager Boy Scouts wanting to learn and advance in ranks. Thank you to all who are participating in Trading Tech 300 and making this investment in our future.

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Speaking Engagement: ISE’s Gary Katz Speaks Out Against IRA Options Rule
Sarah Rudolph, Managing Editor, John Lothian News
Gary Katz, president and CEO of the International Securities Exchange, testified before a U.S. Department of Labor hearing Thursday in the hope of persuading the agency to modify a proposed rule change that could take away investors’ ability to use listed options in their IRA accounts.
For the rest of the story, go to: http://jlne.ws/1WoTO1A

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From Jim Crow to Wall Street: Vernon Jordan Turns 80
Bloomberg
After starting out as a chauffeur, the counselor to presidents and CEOs never left the driver’s seat.
jlne.ws/1DPwKDt

***** His story would make a good movie.

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China Air Pollution Kills 4,000 People a Day: Researchers
by Alex Morales, Bloomberg
Air pollution is killing an average of 4,000 people a day in China, according to researchers who cited coal-burning as the likely principal cause.
jlne.ws/1Pc18s7

***** God did not put us on this planet to kill it and each other with pollution. We can do better.

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Edward Jones to Pay $20 Million to Settle SEC Municipal Bond Charges; Brokerage allegedly improperly sold bonds at inflated prices
By AARON KURILOFF, WSJ
The Securities and Exchange Commission, moving against abusive practices in the municipal-bond industry, penalized a major brokerage firm for overcharging customers.
jlne.ws/1JWWVsS

****** When middle-America Edward Jones gets whacked by the regulators, you know something is wrong.

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Borrowers Fall Further Behind on $1.3 Trillion in Student Loans
Janet Lorin, Bloomberg
Borrowers are having more trouble paying their student loans, even as the job market recovers and consumers improve their mortgage payment histories.
jlne.ws/1Pc3QxO

***** The solution is for all of us to tip the baristas at Starbucks better.

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For Clues on Silicon Valley’s Future Diversity, Look at the Interns
by Amanda Albright, Bloomberg
Silicon Valley’s poor diversity record for employees was confirmed this year when Google and Facebook owned up to the lack of minorities on their current payrolls. But what about the diversity of their future payrolls? A look at tech companies’ intern classes can provide a clue as to whether these companies’ future staffs will be less homogeneous. At least, it could if tech companies released demographic data on this next generation of full-time staffers.
jlne.ws/1h9zx01

***** For clues on the future of our industry, you should have seen the diversity at the Summer Intern Education Series. There is a World of Opportunity in our industry and we had interns with lineage from around the world.

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Wall Street’s Gilded Maternity Perk: Nannies Fly Free; KKR has extended its leave time for new parents and added a benefit allowing them to bring a new child and caregiver on business trips
Bloomberg
KKR & Co., one of the oldest private equity firms, is rolling out a new perk in the struggle to hire and retain talent: flying nannies.
jlne.ws/1gGeAsP

****** If they just hired Mary Poppins, she could fly herself.

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The truth about dogs
Gillian Tett – FT
‘Walking a dog is like carrying a beach towel that says: “Tell me your life story.” It is the ultimate tool for breaking down social barriers’
My recent holiday incorporated a novel twist: for the first time, my family has been travelling with a dog. Or, more accurately, a six-month-old golden retriever puppy.
jlne.ws/1gGcp8x

***** The saying goes if you want a friend, get a dog. Actually, it should be, get a dog and make new friends.

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Rock For A Leg To Stand On’s Pre-Jam Event
September 10, 2015 from 6PM-10PM
Subterranean, 2011 W North Ave, Chicago
Gear up for ALTSO’s Rocktoberfest-Chicago by partying with us at the RockForALTSO Pre-Jam – starring Rocktoberfest musicians. $20 cash cover benefits ALTSO’s work, providing free orthopedic care to children with limb disabilities in the developing world.
jlne.ws/1DPE1TF

****** There will maybe be a contest at the event for who is best dressed up like “Garth.”

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Lead Stories

CFTC Commissioner Mark P. Wetjen Announces his Resignation
CFTC
Today, Commissioner Mark P. Wetjen announced his resignation from the U.S. Commodity Futures Trading Commission, effective August 28, 2015. Mr. Wetjen was unanimously confirmed by the Senate in October 2011 and served as Acting Chairman of the Commission from January 2014 to June 2014.
http://jlne.ws/1UHmtxe
***DA: Click HERE for Chairman Massad’s statement.

*****JJL: I haven’t seen this kind of commitment to the CFTC since Reuben Jeffery.

BP traders rigged gas market, says judge
Gregory Meyer in New York, FT
BP faces the prospect of fresh regulatory fines after a judge ruled that its energy traders rigged a US natural gas market in the aftermath of a 2008 hurricane.
jlne.ws/1MrFfXW

****** Oil at lows not seen since the crisis, and gas rises $1.00 in Chicago due to an “unplanned refinery closure” at BP. Coincidence?

Oil’s Worst-Ever Summer Signals Price Rout Is Nowhere Near Done; These are the months when global demand is highest and crude still slumped
by Grant Smith, Bloomberg
If crude’s slump back to a six-year low looks bad, it’s even worse when you reflect that summer is supposed to be peak season for oil.
jlne.ws/1fbIfsS

The US economy is infested with zombie corporate cash
Gillian Tett, FT
Low interest rates make it hard to achieve returns in capital markets that many have given up trying
jlne.ws/1JgJWDo

Buffett’s Business Wire Seeks to Reassure Clients After Hacking
Noah Buhayar, Bloomberg
Business Wire, the press-release distribution company at Warren Buffett’s Berkshire Hathaway Inc., sought to reassure clients amid allegations that hackers pilfered corporate announcements to enable insider trading.
jlne.ws/1DPHOjS

U.S. Said to Expand Its Probe Into Possible Bond-Trader Lies
by Matt Robinson, Jody Shenn, Bloomberg
The U.S. is expanding an investigation into deceptive sales practices by bond traders even though the first major conviction in the area could be overturned.
jlne.ws/1HL31pV

Flash Crash Trader to Be Released During Extradition Fight
by Suzi Ring, Bloomberg
The trader charged over his role in the 2010 U.S. flash crash will be released from a London prison as soon as Friday after a judge changed the terms of his bail while he fights extradition.
jlne.ws/1Pc1xKX

Flash crash trader Navinder Singh Sarao bailed after declaring £25.5m in Swiss account
The Telegraph
The west London trader accused of wiping billions from US stockmarket is to be released on bail after American authorities dropped their opposition to his release
jlne.ws/1gGkaLJ

Why Aluminum Is a Big Headache for Top Commodity Traders; The premiums manufacturers pay to secure metal supplies have collapsed
by Agnieszka De Sousa Jesse Riseborough, Bloomberg
When carmakers, can manufacturers or telecom companies need to buy metals such as copper and aluminum, they pay a premium to market prices set on the London Metal Exchange to reflect the cost of getting raw materials when and where they want them.
jlne.ws/1J4bllA

Greek parliament approves EUR85bn bailout after rancorous debate
Kerin Hope in Athens, FT
Greece’s parliament approved a new EUR85bn rescue package early on Friday following rancorous all-night talks and the late inclusion of additional reforms requested by the country’s creditors.
jlne.ws/1Nfo5fs

China reveals increase in gold holdings
By Henry Sanderson, FT
China released data on its gold holdings for the second time in a month on Friday, in a sign of greater transparency as it moved to an international standard of reporting its reserves.
jlne.ws/1Pc0hHJ

Currency-rigging lawsuit settlements rise past $2 billion: lawyer
BY NATE RAYMOND, Reuters
Investors have recovered more than $2 billion in settlements with nine banks over claims of price-rigging in the foreign exchange market, and are continuing to pursue claims against seven other banks, a lawyer for the plaintiffs said Thursday.
jlne.ws/1fbHHmU

People’s quantitative easing — no magic
Chris Giles, Economics Editor, FT
Although Jeremy Corbyn’s proposal of “people’s quantitative easing” is described in his economic manifesto as only “an option”, some have hailed the idea as a magic solution to Britain’s economic challenges.
jlne.ws/1Lao226

Regulatory

ESMA responds to market criticism with new EMIR proposal
Jon Watkins – The Trade News
Europe’s derivatives regulator has recommended changes to forthcoming regulations in a move that will please market participants fretting about the new rules. One of the European Securities and Markets Authority’s (ESMA) major recommendations will be to remove the frontloading requirement, which has been a thorn in the side of the derivatives industry.
jlne.ws/1gGh0HP

Statement on Greece by the European Commission in liaison with the European Central Bank
European Commission
In response to a request of 8 July 2015 from the Hellenic Republic to the Chairperson of the Board of Governors of the European Stability Mechanism (ESM) for stability support in the form of a loan with an availability period of three years, the Eurogroup has asked the Institutions to agree on a Memorandum of Understanding detailing the conditionality for a financial assistance facility covering the period 2015-18 in accordance with Article 13(3) of the ESM Treaty.
jlne.ws/1NfneeG

High cost of Dodd-Frank is harming US banks and citizens
TheHill
With the passage of Dodd-Frank in 2010, members of Congress further increased federal oversight of corporations. Inclusion of the Consumer Financial Protection Act as part of Dodd-Frank had little to do with preventing failures of financial institutions deemed too big to fail. The establishment of the Consumer Financial Protection Bureau has provided vast new opportunities for federal regulatory agencies to expand their reach far beyond normal banking operations. In less than five years, the Bureau, operating without Congressional oversight, has imposed fines at a rate never previously matched by a new regulatory agency.
jlne.ws/1gGoivo

CFTC Staff Issues Extension to Time-Limited No-Action Letter on the Applicability of Transaction-Level Requirements in Certain Cross-Border Situations
CFTC
The U.S. Commodity Futures Trading Commission’s (CFTC or Commission) Divisions of Swap Dealer and Intermediary Oversight (DSIO), Clearing and Risk, and Market Oversight (Divisions) today issued a time-limited no-action letter that extends relief to swap dealers (SDs) registered with the Commission that are established under the laws of jurisdictions other than the United States (Non-U.S. SDs) from certain transaction-level requirements under the Commodity Exchange Act.
jlne.ws/1gGpIpE

***DA: Fifth extension since 2013. For a history on the issue, go to this page in MarketsReformWiki. Check out the section on Footnote 513.

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans
SEC

    • BATS: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc. (Release No. 34-75678; File No. SR-BATS-2015-58; August 12, 2015); see also Exhibit 5

 

    • BOX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Fee Schedule (Release No. 34-75676; File No. SR-BOX-2015-28; August 12, 2015); see also Exhibit 5

 

    • BYX: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Y-Exchange, Inc. (Release No. 34-75677; File No. SR-BYX-2015-34; August 12, 2015); see also Exhibit 5

 

    • EDGA: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Operation of MidPoint Peg Orders Under Rule 11.8(d) (Release No. 34-75685; File No. SR-EDGA-2015-30; August 12, 2015); see also Exhibit 5

 

    • ICEEU: Order Approving Proposed Rule Change Relating to Finance Procedures to Add Clearstream Banking as a Triparty Collateral Service Provider (Release No. 34-75692; File No. SR-ICEEU-2015-009)

jlne.ws/1eCTnOv

Exchanges & Trading Facilities

LME to add contracts on November 23 with upgrade
Futures & Options World
The London Metal Exchange (LME) has moved the launch of its new aluminium premium, steel scrap and steel rebar contracts to November 23, to coincide with a raft of technology updates to the exchange and its clearing house to minimise disruption for members. The new contracts were set to go live on October 26, as reported by FOW in March. A spokesperson told FOW that the decision to launch the highly-anticipated contracts in November was made after requests from members.
jlne.ws/1gGoomP

SGX urges caution when dealing in CEFC shares; notes small number of offshore accounts accounted for 40% of recent buying
SGX
Singapore Exchange (SGX) today notes CEFC International Limited’s 10 August announcement of a placement of about 705 million shares at $0.35 each. This follows the company’s 21 July reply to SGX’s public query, saying that it was not aware of any information about the company that was not previously announced, apart from a potential joint venture and related funding, which if known might explain the trading activity in its shares. SGX issued a Trade with Caution warning after CEFC’s 21 July reply.
jlne.ws/1JX06Ay

Shake Shack options set for market debut on Friday
Reuters
Options contracts on shares of U.S. burger chain Shake Shack Inc (SHAK.N) will begin trading on Friday for the first time since the company’s initial public offering early this year.
jlne.ws/1h9ArtD

JSE in strong position to compete – CEO
Moneyweb
The nature of the JSE’s investment in its technology, people and regulatory standards puts it in a strong position to compete should the registrar award a license to a competitor in the local market, its CEO has said. In an interview following the release of its interim results for the six months through June, Nicky Newton-King, said the JSE has been competing vigorously with other venues for many years.
jlne.ws/1gGgsBW

Announcement – In relation to the matter of Sing Pao Media Enterprises Limited (Provisional Liquidators Appointed) (Stock Code: 8010) Cancellation of listing
HKEx
jlne.ws/1UHryWj

Hedge Funds & Managed Futures

Quantifying CTA Risk Management
Kathryn Kaminski – Campbell White Paper Series
CTAs often cite risk management as a key to their success. Despite this claim, the process for evaluating CTA risk management has remained somewhat qualitative. A new white paper by Campbell & Company, Quantifying CTA Risk Management, attempts to quantify CTA risk management by defining four risk management factors: liquidity, correlation, volatility, and capacity.
jlne.ws/1NtvQfB

Yahoo’s Stock Nears Its ‘Worst-Case Scenario’ Price
By MAUREEN FARRELL, WSJ
It’s certainly no vote of confidence in Yahoo Inc.YHOO +4.01%, but the Internet company did get an upgrade from Bernstein analyst Carlos Kirjner Thursday.
jlne.ws/1Pc4Wth

Can You Judge an IPO by Its CEO?
By TELIS DEMOS, WSJ
Wall Street is hardly a beauty pageant.
But a new study suggests that when it comes to taking a company public, appearances can matter.
jlne.ws/1KljJ1g

Gross’s Fund Rises After Tweaking ‘Shorts of a Lifetime’
by Miles Weiss, Bloomberg
Bill Gross finally figured out a way to execute what he called his “shorts of a lifetime.
jlne.ws/1TASlBl

Brewin Dolphin rebrands Managed Fund Service
Anna Fedorova
Brewin Dolphin is rebranding its Managed Funds Service (MFS) and plans to expand the range of portfolios on offer, making them available on more platforms in the future.
jlne.ws/1LaZpFr

Banks & Brokers

Wall Street Ex-Trader Swaps Arbitrage for AirAsia Ambitions
by Pooi Koon Chong, Bloomberg
Aireen Omar juggled numbers as an arbitrage trader on Wall Street more than a decade ago. Now, as chief executive officer of Malaysia’s low-cost carrier AirAsia Bhd., her juggling act extends beyond figures.
jlne.ws/1Klj2oB

HSBC, Barclays Among Banks in $2 Billion Currency Accord
by Bob Van Voris, Bloomberg
HSBC Holdings Plc, Barclays Plc and three other banks agreed to settle U.S. investor lawsuits tied to the currency-rigging scandal, bringing the total so far to more than $2 billion across nine firms.
jlne.ws/1INkySj

JPMorgan Salary Package Grows as Pay Limits Are Thwarted
by Caleb Melby, Brandon Kochkodin, Bloomberg
Daniel Pinto earned a higher salary last year than his boss, Chief Executive Officer Jamie Dimon, according to JPMorgan Chase & Co.
jlne.ws/1DSjTAf

Clearing & Settlement

EMIR update: implementing the clearing obligation
McCann Fitzgerald, in Lexology
The first Delegated Regulation to implement the clearing obligation under EMIR1 was adopted by the European Commission on 6 August 2015. It lays down the classes of OTC derivative contracts that are subject to the clearing obligation and four different categories of counterparties for which different phase-in periods apply. The Delegated Regulation also deals with the application of the front-loading requirements.
jlne.ws/1gGgf1r

ICE Clear U.S. raises Cotton, Soybean margins
Reuters
ICE says the margin requirements are effective with the open of business Friday, August 14, 2015
jlne.ws/1h9x6KZ

CME Group Clearing Advisories
CME Group

    • Performance Bond Requirements: Agriculture, Crude Oil Spreads Electricity, FX, NG Basis and Petroleum Crack Outright – Agriculture, Electricity, Interest Rate and Refined Product Intra – Agriculture and Electricity Inters – Electricity Short Option Minimums – Effective Friday, August 14, 2015

 

    • Discontinue CDS Summary Reporting – Effective September 28, 2015

jlne.ws/1R9iqZG

Indexes & Products

Currency-hedged ETFs soften blow of dollar’s rise
ByLeslie Josephs and James Ramage, WSJ
Investors are pouring billions of dollars into a fashionable corner of one of the fastest-growing areas on Wall Street: exchange-traded funds that aim to protect investors against the return-crimping impact of a rising dollar.
jlne.ws/1h9xwRw

MSCI Equity Indexes August 2015 Index Review
Business Wire
MSCI Inc., a leading provider of research-based indexes and analytics, announced today the results of the August 2015 Quarterly Index Review for the MSCI Equity Indexes. All changes will be implemented as of the close of August 31, 2015
jlne.ws/1gGibHi

MSCI rejig: Glenmark, Indiabulls Housing climb upto 10%, JSPL falls 9%
The Economic Times
Stocks of Glenmark Pharma and Indiabulls Housing Finance climbed up to 10 per cent, while those of Jindal Steel plummeted 9 per cent in trade on Friday after the latest rejig by MSCI in its indices.
jlne.ws/1gGifXz

The junk bond market ‘is having a coronary’: David Rosenberg
CNBC
High-yield bonds, specifically, often are seen as an effective proxy for movements in the equity market. If that’s the case, trends in junk are pointing to a rocky road ahead. Average yields for low-rated companies have jumped to 7.3 percent and spreads between such debt and comparable duration Treasurys have widened dramatically, according to David Rosenberg, chief economist and strategist at Gluskin Sheff.
jlne.ws/1gGj5Uf

Currency-Hedged ETFs Soften Blow of Dollar’s Rise
WSJ
Investors are pouring billions of dollars into a fashionable corner of one of the fastest-growing areas on Wall Street: exchange-traded funds that aim to protect investors against the return-crimping impact of a rising dollar.
jlne.ws/1h9xwRw

Technology

Designing for experience: a Fintech story | FinTech
Enterprise Innovation
In the age of the customer, one of the critical success factors is meeting the exacting needs of the individual customer. How do you design for one and yet be able to serve a diversity of individuals that you want to attract and do business with? This is the challenge that Fintech startups, and any company for that matter, must discover, design, engineer and build.
jlne.ws/1gGl62W

SIX launches FinTech Incubator ‘F10’
Automated Trader
FinTech Incubator ‘F10’ is the innovation center of SIX. It is home to small interdisciplinary teams who develop promising ideas and evaluate their potential for the financial industry. In collaboration with FinTech start-ups, the team, based at Förrlibuckstrasse 10, is setting up a complete innovation ecosystem with a dedicated staff, know-how, infrastructure and communities whose task is to drive further developments on Switzerland’s FinTech front and develop new technologies for SIX.
jlne.ws/1gGlfU0

Enforcement

Three Maryland Men Settle Charges They Defrauded Investors in Real Estate Investment Company
SEC.gov
The SEC alleges that James R. Glover orchestrated the fraud by enticing family, friends, and fellow church members to become his clients at Signator and invest in Colonial Tidewater Realty Income Partners, which he co-managed. Most of Glover’s clients were financially unsophisticated and relied on him for investment guidance. Some even described him as “another dad” or “part of the family.”
jlne.ws/1P9RGFt

Edward Jones to Pay $20 Million for Overcharging Retail Customers in Municipal Bond Underwritings
SEC.gov
The Securities and Exchange Commission today announced that St. Louis-based brokerage firm Edward Jones and the former head of its municipal underwriting desk have agreed to settle charges that they overcharged customers in new municipal bonds sales. It’s the SEC’s first case against an underwriter for pricing-related fraud in the primary market for municipal securities. The firm also was charged with separate misconduct related to supervisory failures in its review of certain secondary market municipal bond trades.
jlne.ws/1L8SfSa

Goldman to pay $272 mln to settle mortgage lawsuit
Reuters
Goldman Sachs Group Inc will pay $272 million to settle a lawsuit that claimed the Wall Street bank defrauded investors about the safety of about $6 billion of residential mortgage-backed securities they bought in 2007 and 2008.
jlne.ws/1IQqkR5

Nine banks agree to pay $2bn to settle forex rigging suit in the US; Banks accused of foreign exchange rate rigging have agreed to pay major sums of money in settlements to investors
The Telegraph
Nine major banks accused of foreign-exchange rigging have agreed to pay more than $2bn (£1.28bn) to investors in settlements, a law firm involved in the process said Thursday.
jlne.ws/1Pp40T5

Environmental & Energy

Oil Prices Slide to 6½-Year Low; Concern about Chinese demand and strong supply from the U.S. and OPEC pressure crude prices
By GEORGI KANTCHEV, WSJ
U. S. oil prices slid to a more-than six-year low Friday on escalating concerns about the mismatch between global supply and demand.
jlne.ws/1UHinoG

US states seek to halt Obama’s climate plan
Barney Jopson in Washington, FT
Fifteen US states have launched an effort to halt President Barack Obama’s landmark climate policy while they prepare a full-blown legal challenge to have it overturned.
jlne.ws/1IQrADO

Solar is having a great year, except on Wall Street
BY NICHOLA GROOM, Reuters
By almost any measure, the U.S. solar market is on fire. Installations of solar panels are expected to soar by a third this year, the price of solar power is now cheap enough to compete neck and neck with gas and coal-fired power in places like California, and the fledgling industry received a vote of confidence last week when U.S. President Barack Obama announced a groundbreaking plan to curb power plant emissions. Even China’s currency devaluation could cut panel costs for U.S. solar installers.
jlne.ws/1J89qkD

Asia-Pacific

China’s currency reform struggles for credibility
FT
Two days after the People’s Bank of China surprised the world by letting the renminbi slide, investors and policymakers are still puzzling over whether it was a benign move towards a market-driven exchange rate or a competitive devaluation.
jlne.ws/1NfpliD

China’s Rescue Fund to Stabilize Stock Market for Several Years
Bloomberg
China Securities Finance Corp. won’t pull out of the nation’s equities for a couple of years, according to the securities regulator.
jlne.ws/1J4bWE1

Rate Watchers Read the Chinese Tea Leaves; China’s devaluation probably won’t derail a September Fed rate increase, but its effect on import prices could help blunt their trajectory.
By SPENCER JAKAB, WSJ
“May you live in interesting times” isn’t an actual Chinese curse, but China certainly has a knack for making things that way.
jlne.ws/1fbHSyy

‘Ghost bank’ spooks Chinese savers
Lucy Hornby, FT
China is known for knock-offs of all kinds, from clothes and food to toys, DVDs and counterfeit banknotes. A fake flagship Apple store and a home-made branch of Ikea have made international headlines.
jlne.ws/1MrJ2oq

Frontier Markets

Malaysia’s Ringgit Heads for Worst Drop Since 1998 Amid Outflows
by Michael Patterson, Bloomberg
Malaysia’s ringgit headed for the biggest drop since 1998, extending an eighth week of declines as falling oil prices and political turmoil spur capital outflows.
jlne.ws/1h9zbH0

Turkey Central Bank Tries ‘Fringe Tools’ to Stem Lira Slide
by Onur Ant, Constantine Courcoulas, Bloomberg
Turkey’s central bank lowered the cost of dollar borrowing for a fourth time this year, seeking to halt the lira’s slide after the breakdown of talks on the formation of a new government sent financial markets tumbling.
jlne.ws/1JgJrsZ

Deutsche Bank finds a hot spot in African bond markets
By Tim Burke, Financial News
The number of Sub-Saharan African sovereigns in the international bond markets has almost tripled since 2007, with newcomers including Zambia, Ethiopia and Kenya raising money in the past three years alone. Among the banks helping to bring issuers to market is a surprising name – Deutsche Bank.
jlne.ws/1PbZYg3

MSCI Proposes Reclassifying Peru as Frontier Market on Liquidity
Bloomberg Business
MSCI Inc. proposed reclassifying Peru as a frontier market after a drop in liquidity left the country with too few actively traded stocks to be classified as an emerging market. MSCI said in a statement it will consult investors on the change and announce the results Sept. 30. Phoenix-based Southern Copper Corp. could be moved from its Peru index to its USA indexes as part of the change, MSCI said.
jlne.ws/1gGi4LU

NSEL controversy: Delhi Police to question Jignesh Shah next week; Judge directs him to appear on Wednesday, after city police complain of non-cooperation; sets bail plea hearing for Aug 27; harassment by opponents: FTIL
N Sundaresha Subramanian, Business Standard
A district court here has directed National Spot Exchange (NSEL) promoter Jignesh Shah in the coming week to join the investigation by the city police’s economic offences wing (EoW).
jlne.ws/1DSnI8i

Sebi to conduct fit & proper test on commodity brokers; Brokers linked to the NSEL scam might find it tough to get registration under the merged regulator
Jayshree P Upadhyay, Business Standard
With a merger nearing between the Securities and Exchange Board of India (Sebi) and the Forward Markets Commission (FMC), the two-year controversy at National Spot Exchange (NSEL) is gaining the spotlight once again.
jlne.ws/1PcbkRo

Miscellaneous

Making the Egg Business Less Fragile
By Justin Fox, Bloomberg
I eat a lot of eggs. This proclivity is inherited from my father, who was unimpressed by the 1970s medical consensus that eating egg yolks led to heart disease. “There’s no evidence,” he would say in those days, “that the cholesterol in eggs has anything to do with the cholesterol in your bloodstream.” No evidence ever was forthcoming, and the medical establishment has since come around to my dad’s reasoning. Eggs are great, my dad is smart and I hope he will now forgive me for implying last month that he eats cereal with too much sugar in it.
jlne.ws/1NfoZsn

Christie fundraiser to be hosted by hedge fund billionaire Cohen
Reuters
Billionaire hedge fund manager Steven A. Cohen will host a fundraiser Saturday for Republican presidential hopeful Chris Christie in New York’s summer playground of East Hampton, according to an invitation seen by Reuters.
jlne.ws/1hBWcC6

Donald Trump could kill this bull market, warns fund manager
By Shawn Langlois, MarketWatch
Clowns abound! And, really, that’s nowhere near as fun as it sounds.
This is the third year of the presidential cycle, the “silly season,” as David Kotok of Cumberland Advisors points out. It’s historically a tough time for stocks, and it could get a lot tougher if The Donald emerges as a serious contender for the White House (see the “call of the day” below.)
jlne.ws/1DSnjD0

Embattled hedgie inspires Showtime series
By Michelle Celarier, NY Post
Showtime has released a trailer for its upcoming series “Billions” — which appears to be inspired by US Attorney Preet Bharara’s pursuit of criminal charges against hedge fund mogul Steve Cohen.
jlne.ws/1MnQ9wl

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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.