Breaking News

John Lothian Newsletter: Jury acquits brokers in Libor trial; CFTC Signs MOU with Two German Authorities; New York Stock Exchange Outlines Priorities to Strengthen Equity Market Structure During Extreme Volatility

First Read

Accused UK trader likely not a factor in ‘flash crash’: paper
BY JOHN MCCRANK – Reuters
A British trader facing extradition to the United States in a trial next week for allegedly helping trigger the 2010 “flash crash” likely had little, if anything, to do with the event, according to a draft of a new academic research paper.
goo.gl/aaC8tK

***** Why should we listen to experts when we have the mob with pitchforks?

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Pimco Asks If Swap Rates Could Be the New Risk-Free Benchmark for Bonds
Parsing a potential new benchmark.
Tracy Alloway, Liz McCormick – Bloomberg
Recent distortions in interest rate derivative markets have sparked a radical notion in the world of fixed income—the idea that so-called swap rates could replace U.S. Treasury yields as the benchmark risk-free borrowing rate in securities markets.
goo.gl/sABvsY

***** Try explaining swaps to your average Trump supporter. Let me know how that works.

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Thomas Day | Bootstrapping in America
tastytrade via Youtube
Thomas Day is an Iraq war veteran, a former bureau correspondent in Afghanistan, an author, and an entrepreneur. Now he’s running for Congress and is an advocate for small businesses and startups.
/goo.gl/LfLgQW

***** Thomas Day wants to represent a Chicago Congressional district and is taking on long time Congressman Danny Davis in the Democratic primary. This is the district that includes part of the Chicago loop, including the CBOT Building.

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CME Group Named ‘Exchange of the Year’ in 2016 Risk Magazine Awards
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the company was named ‘Exchange of the Year’ at the 2016 Risk Awards. The awards are held annually to showcase the work of firms and individuals in the derivatives markets and risk management, and are the longest-running awards of their kind.
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***** The CME Group is going to need a facility in New Jersey just to keep their awards. See the full slate of Risk Award winners HERE

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CBOE RMC, Feb. 29-Mar 2, 2016, Bonita Springs, FL
Now in its 32st year in the U.S., the annual CBOE Risk Management Conference (RMC) is the premiere financial industry conference designed for institutional users of equity derivatives and volatility products. Hosted by the Chicago Board Options Exchange (CBOE), RMC is an educational forum dedicated to exploring the latest products, trading strategies and tactics used to manage risk exposure and enhance yields. RMC brings together top traders, strategists and researchers, enabling participants to learn the state-of-the-art in investment risk management from true experts in the field. Learn more HERE and register for the event HERE

***DA: I see flights on American, nonstop Chicago to Fort Myers for $107 round trip. Or, if you are feeling spunky, you can fly Spirit for $84 round trip. Get thee to Bonita Springs!

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Market Data Deathmatch Impacting Investors Despite Efficiency of U.S. Equity Market, Says TABB Group Research
Business Wire
It is widely accepted that electronic trading has made the U.S. equity market significantly more efficient, helping reduce spreads, commissions, and market-maker revenues, while returning dollars into the hands of investors. At the same time that trading volumes and profits at market participants have declined, exchange revenues at the three largest U.S. equity exchange groups have risen nearly 16 percent, and the revenues for exchange data, access and technology are up 62 percent from the beginning of 2010 to the third quarter of 2015.
In TABB Group’s latest research, “The Market Data Deathmatch: The Increasingly Brutal Fight Over Equity Market Data Costs,” report author and TABB CEO Larry Tabb examines how the large fee increases spurring the growth of data, technology and access revenue at exchanges have led to a deathmatch between the exchanges and brokers. Although for-profit exchanges need to maximize their shareholder returns, the increases in data, access and session fees are putting pressure on the current business models of market-makers, alternative trading systems (ATSs), and brokers.
goo.gl/FRwwN8

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Chicago’s Trading Technologies Wants Tech Talent In Finance
Chicago Inno
Financial companies want computer science and engineering graduates to consider a career in trading, given technology has become a key driver of the industry. The problem, said Leo Murphy, head of TT CampusConnect at Trading Technologies, a trading software provider, is everyone else wants those students as well.
goo.gl/iU5Vk8

***** Help me expand the Trading Tech 300 Merit Badge Workshop program I started with the Chicago Boy Scouts. We can increase the number of STEM workers, but it takes an investment.

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FinTech Exchange Conference Set for April 21, 2016 in Chicago
Press Release
Featuring Google, Quandl, CME Group, CBOE Holdings, Trading Technologies, Cantor Exchange, Barchart, Tally Capital, Rival Systems, MarketsTech, Nadex, Narrative Science, Evident.io, Esentire, Alpaca, GX2 Systems, SourceHOV Tax and more
Barchart, a leading provider of market data and financial technology solutions, announced FinTech Exchange 2016 (www.fintechchicago.com), its second annual event in Chicago focused on financial technology, and the financial markets and trading. The event features leaders from software, market data, infrastructure, cloud computing, exchanges, trading, venture capital and media in a series of 20 on-stage presentations.
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***** Don’t miss this.

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Chinese man pleads guilty for plot to steal U.S. corn secrets
Reuters
A Chinese man charged with conspiracy to steal high-tech U.S. corn seeds pleaded guilty in federal court in Iowa on Wednesday for participating in the theft of the patented seeds with the intention of transporting them to China, court documents show.
goo.gl/bFRdJQ

***** Evidently Orville Redenbacher is not Chinese, so his disguise did not work very well.

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London Metal Exchange moves open outcry trading floor
By Eric Onstad – Reuters
The 139-year-old London Metal Exchange (LME) will wrap up open outcry trading on Wednesday at its red leather “ring” before moving the trading floor to a new home elsewhere in the capital’s financial district.
goo.gl/b8zdbq

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Top Read Stories From Yesterday
Our top read stories from yesterday are the following: Top 50 Chicago startups to watch in 2016; Liquidity Is King, or Why CME’s Failure in Cocoa Doesn’t Amount to a Hill of Beans; and yes he is really, really rich. Mike Bloomberg Is Worth $49 Billion, Much More Than Most People Thought
And just for kicks here are Tuesday’s top reads in case you missed them: http://goo.gl/Ohn9P1|New DTCC White Paper Calls for Leveraging Distributed Ledger Technology to Solve Certain Long-Standing Operational Challenges, followed by good old fashioned stories like
Cattlemen lock horns with futures exchange over market volatility, followed by our very own look at the TAC meeting, which has been postponed, but is still a very, very relevant read: Reg AT Stirs Concerns Ahead of CFTC TAC Meeting

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Still time to participate in our 2016 survey – please give us three minutes of your time!
Last week we kicked off our 2016 survey campaign. Help us help you by giving us three minutes of your time and sharing your thoughts. Plus, we tried to make it fun and colorful. The final kicker? You could win an Apple Watch. Click HERE to get started.

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Lead Stories

Jury acquits five of six brokers in Libor trial
Lindsay Fortado, Legal Correspondent – FT
A broker nicknamed “Lord Libor” was one of five men cleared of acting as middlemen between convicted former UBS trader Tom Hayes and others to help them manipulate bank rates, in a significant setback for the UK’s Serious Fraud Office.
goo.gl/oSOQpm

Sixth Ex-Broker Acquitted in London Libor-Rigging Trial
Liam Vaughan, Suzi Ring – Bloomberg
Jury found five other men innocent in case Wednesday; Brokers were accused of working with Tom Hayes to fix rates
Darrell Read, an ex-ICAP Plc broker accused of helping convicted trader Tom Hayes rig Libor, was found not guilty Thursday by a London jury, a day after the panel acquitted five other men in a major setback to the U.K.’s Serious Fraud Office.
goo.gl/k4vtNw

CFTC Signs MOU with Two German Authorities to Enhance Supervision of Cross-Border Clearing Organizations
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) announced today that CFTC Chairman Timothy Massad signed a Memorandum of Understanding (MOU) with the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and Deutsche Bundesbank (Bundesbank) regarding cooperation and the exchange of information in the supervision and oversight of clearing organizations that operate on a cross-border basis in the United States and in Germany.
goo.gl/wEgch9

New York Stock Exchange Outlines Priorities to Strengthen Equity Market Structure During Extreme Volatility
Press Release
The New York Stock Exchange (NYSE), a subsidiary of Intercontinental Exchange’s (NYSE:ICE) global network of exchanges, today outlined actions it will prioritize to enhance U.S. equity market structure and strengthen the markets during times of extreme volatility.
goo.gl/TYcVA6

Why the Fed Has the Stock Market Spooked; U.S. corporate performance is no longer a clear indicator of domestic economy’s strength
By JUSTIN LAHART – WSJ
Investors have grown accustomed to getting help from the Federal Reserve. But in a world where American companies are tethered less tightly to the U.S. economy, that help may not be so forthcoming.
goo.gl/2oYlYD

Traders Still Disagree With the Fed on Rate-Rise Path
By KRISTEN SCHOLER – WSJ
The Federal Reserve didn’t change very many minds. Fed officials kept a March interest-rate rise on the table Wednesday, but a key market used to bet on central bank policy continues to show that many investors aren’t buying that a rate increase is actually going to happen then.
goo.gl/OCQdXs

IBF and SGX Announce New Initiatives To Upskill Stockbroking Industry
SGX
Industry Comes Together To Prepare Dealers & Remisiers With Skills For Future Economy
With the aim of upskilling the stockbroking industry, the Institute of Banking and Finance Singapore (IBF), the national accreditation and certification agency for financial sector competencies, and Singapore Exchange (SGX) today announced new training and development initiatives, following an extensive survey[1] and feedback received from the stockbroking industry last year.
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Flash Crash research claims Sarao was not the cause
By Marion Dakers – Telegraph
US academics revisit the role of Hounslow-based trader Navinder Singh Sarao in the 2010 market panic
New research on the Flash Crash that ripped through the financial markets in 2010 suggests that the Hounslow-based trader accused of placing spoof orders was not a major cause of the turmoil.
goo.gl/LH7p1n

NYSE’s $2 Trillion ETF Business Sees Heightened Competition
Bloomberg
NYSE Group Inc. may still be the king of exchange-traded funds among U.S. stock markets, but challengers to the throne are gaining ground.
Last year, a record 23 ETFs left the company’s NYSE Arca exchange, shifting their listing to rival markets, according to data compiled by Bloomberg. BlackRock Inc., the world’s largest asset manager, this month said it was diversifying by moving 11 iShares ETFs away from NYSE Arca, the first time it’s yanked funds from the exchange.
bloom.bg/1SKGN2c

The Brics are dead. Long live the Ticks
Steve Johnson – FT
The Brics are dead. Long live the Ticks.
The Brics concept, based on the belief that the quartet of Brazil, Russia, India and China would power an unstoppable wave of emerging markets-led economic growth, gripped the firmament for more than a decade after it was conjured into existence by Jim O’Neill, then chief economist at Goldman Sachs, in 2001.
goo.gl/HpP0SQ

Deutsche Bank Confirms the Damage: A Record Loss
By JACK EWINGJ – NY Times
Deutsche Bank, confirming bad news it had previewed last week, on Thursday made it official: The giant German bank had a record loss of 6.8 billion euros, or $7.4 billion, in 2015, as it set aside money to cover lawsuits and official investigations, and it suffered a decline in revenue in its investment banking unit.
goo.gl/RGoEuv

The world’s big problems should not keep us awake
Mrs Moneypenny – FT
How much sleep do we need to get the most out of our waking hours?
Sleep is always in short supply at the World Economic Forum’s annual meeting. Last week while holed up in Davos, I started writing this column having come home at 2am from one of its many networking parties, all the while knowing that five hours later I was due at a breakfast debate about the situation in Ukraine. As I walked into the Alpine night, people who make far more important decisions every day than I do were still deep in conversation.
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Swaps clearing houses can pose contagion risks: U.S. monitor
Reuters
The U.S. monitor of financial stability will put clearing houses for the $710 trillion swaps market under its microscope this year, saying on Wednesday the centralized system could create contagion risks as well as concentration risks. In its annual report to Congress, the Office of Financial Research said a clearing house acting as a go-between in a swap “is a single point of vulnerability for failure and creates the potential for propagation of risks, potentially offsetting the advantage.”
reut.rs/1nAvD3G

Market Crashes, Stock Scandals: Lessons From the U.S. Frontier
By JASON ZWEIG – WSJ
Wall Street in 1873: A run on the Union Trust Company Library of Congress
The government massively overinvested in transportation and land development. The banking system was inefficient and corrupt. State governments gorged on debt, then defaulted on it with aplomb. The stock market was crooked, rife with cronyism and insider trading. Stocks shot up and down like yo-yos.
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ISDA Quarterly
ISDA
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Regulatory

Big companies call on EU to rewrite derivatives rules
Philip Stafford in London and Jim Brunsden in Brussels, FT.com
Ford, IBM, Airbus, BP and General Electric are among dozens of global businesses that have sharply criticised Europe’s rules for derivatives, claiming they unfairly push up costs for companies “that did not cause the financial crisis”.
Regulators have sought to strengthen the financial system since the crisis by crafting tougher rules for derivatives, which are used by companies to protect their earnings from adverse shifts in currencies, interest rates and commodities, including oil.
on.ft.com/1nAvw8i

Modernization of Derivatives Regulation
AMF
The Autorité des marchés financiers (the “AMF”) is seeking comments on the proposed amendments to the Derivatives Regulation to adapt it to rapidly changing derivatives markets.
goo.gl/yt1XRU

Canada energy regulator says oil patch woes make hiring easier
BY ALASTAIR SHARP – Reuters
A sharp downturn in Canada’s oil patch that has caused thousands of layoffs has made it easier for the country’s energy regulator to find and hire experienced staff, its chief executive said on Wednesday.
goo.gl/ud4LYY

FCA and PRA investigations into HBOS senior managers
UK FCA
The Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) have decided to start investigations into certain former HBOS senior managers.
goo.gl/O386gj

NY Attorney General report says ‘bot’-ridden ticketing a ‘fixed game’
Reuters
New York Attorney General (NYAG) Eric Schneiderman on Wednesday said ticketing for most in-demand events is a “fixed game,” in a report that brings out glaring irregularities in the ticketing industry.
goo.gl/Kbqdi8

Ex-Fannie Mae CEO urges U.S. judge to toss SEC fraud case
BY NATE RAYMOND – Reuters
Daniel Mudd, the last holdout among former top Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) executives accused of concealing risky mortgages that fueled the financial crisis, told a judge on Wednesday a U.S. regulator’s lawsuit seeking to hold him responsible should be thrown out.
goo.gl/UAPBZQ

ANNELI TUOMINEN APPOINTED VICE CHAIR OF ESMA
ESMA
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed Anneli Tuominen as its Vice Chair.
/goo.gl/stvN24

ESAS SUBMIT A JOINT LETTER TO THE EUROPEAN COMMISSION ON CROSS-SELLING OF FINANCIAL PRODUCTS IN THE EU
ESMA
The Chairpersons of the three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – sent a joint letter on cross-selling of financial products to Jonathan Hill, the European Commissioner for Financial Stability, Financial Services and Capital Markets Union.
/goo.gl/qdstIB

NASDAQ: Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend NOM Rules at Chapter XV, Section 2 (Release No. 34-76967; File No. SR-NASDAQ-2016-004; January 22, 2016); see also Exhibit 5
SEC
/goo.gl/TmcBse

Exchanges & Trading Facilities

MGEX Sets New Open Interest Record
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), has reached the highest open interest total in its 135 year history as of Tuesday afternoon, closing the day at 82,279.
goo.gl/SQ68sd

MIAX Options – February 1, 2016 Fee Changes – New Professional Rebate Program
Mondovisione
Effective February 1, 2016, pending SEC approval, the MIAX Options Exchange will amend the Fee Schedule to introduce the Professional Rebate Program.
goo.gl/ND7Wgu

DME Sets New Open Interest Record
Mondovisione
DME, the premier international energy futures and commodities exchange in the Middle East, announces today a new open interest record for its flagship Oman Crude Oil Futures contract of 31,492 lots, which is equivalent to 31.5 million barrels of Omani crude oil. The previous record was set on 28 Aug 2015 when open interest was 27,107 lots.
goo.gl/BaocXB

SGX welcomes Secura Group Limited to Catalist
SGX
Singapore Exchange (SGX) today welcomed Secura Group Limited (Secura) to Catalist under the stock code “43B”.
goo.gl/nUv7oQ

Future of Swap Trading: Are We Missing Something?
Futures & Options World
The implementation of the Dodd-Frank reforms in the US has resulted in a tangible decline in execution costs, and disintermediation of interdealer-brokers, according to a report published by the Bank of England (BoE) last week. The flip-side of this has been a fragmentation of the market along regional lines, the report claims.
The conclusions of the report, based on data from LCH.Clearnet SwapClear, back up the conclusion of reports published periodically by the International Swaps and Derivatives Association (Isda) since swap execution facilities (Sefs) came into being.
goo.gl/TCr1ZK

Politics

Why Rudy Giuliani thinks cybersecurity is the next big crisis
By PRIYA ANAND- MarketWatch
Former New York City Mayor Rudy Giuliani compares cybersecurity to cancer.
As a prostate cancer survivor, Giuliani says he doubts anyone will ever find a “perfect solution” to the disease, and that cybercrime presents a similar challenge. And for both maladies, detecting them early on can reduce the damage.
goo.gl/L425ZH

Dark Money Dominates Political Ad Spending; Groups that don’t have to disclose their donors have accounted for almost two-thirds of political ad spending this cycle.
William Allison – Bloomberg
Presidential candidates, congressional hopefuls and the super-PACs that back them are preparing to disclose to voters Jan. 31 who has been providing the tens of millions of dollars they have poured into political ads. There’s one hitch: that’s only about a third of the money that’s been spent shaping the elections.
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Bloomberg Editor Quits Over Fear The Company Can’t Cover Michael Bloomberg Aggressively; “The bottom line is, you can’t cover the circus unless you can write about one of the biggest elephants in the room,” said Kathy Kiely.
Michael Calderone, Senior Media Reporter, The Huffington Post
Kathy Kiely, the Washington news director for Bloomberg Politics, resigned Wednesday over concerns the company could not adequately cover owner Michael Bloomberg’s considerations about whether to run for president as an independent candidate.
goo.gl/S6qVHz

Hedge Funds & Managed Futures

Bundesbank transferred 210 tonnes of German gold in 2015
Henry Sanderson – FT
Germany’s Bundesbank released further detail on its gold holdings on Wednesday, saying it transferred 210 tonnes back to the country last year from vaults in Paris and New York.
goo.gl/Frnndi

Hedge fund of the year: Citadel; Citadel’s hedge funds dodged the Swiss franc’s surge and made money during the Greek debt crisis
Risk.net staff
Ken Griffin is a hard man to please. The founder and chief executive of Chicago-based Citadel saw his investment teams expertly navigate the macro headwinds that blew many hedge funds off course in 2015 – escaping losses when the Swiss National Bank (SNB) scrapped its exchange rate peg and generating positive returns during the Greek debt crisis and the devaluation of the Chinese yuan.
goo.gl/O0ViBZ

‘Little Traders’: This Addictive iOS Investment Game Is Trying To Change The World, One Tiny Investor At A Time
By Cammy Harbison – idigitaltimes.com
When you hear the word “stock market” chances are you think of falling shares, lost pensions and fat cats getting fatter, but app developer Sebastian Kuhnert is hoping to change that. Kuhnert is the CEO of Tradimo, a free financial online training school and creator of the Little Traders iOS game. With it, the CEO hopes to change the world of stock market investments, one tiny investor at a time.
goo.gl/4foP7N

9 Best Social Media Tips From A Successful Financial Advisor
APARNA NARAYANAN – Investors.com
Josh Brown is proof that it’s possible to turn blogging into a successful business. In 2008, he started the Reformed Broker, a blog whose mix of fact, statistics, irreverence and anecdotes has won a devoted following. That paved the way for a host of media assignments, including CNBC’s The Half Time Report. On Twitter, he’s closing in on 130,000 followers.
goo.gl/L2NC2a

Goldman’s Former Head of Junk Bond Trading Has Some Choice Words About the Credit Market; The unwinding of the “efficient capital structure” beckons.
Tracy Alloway – Bloomberg
It may feel as if bond bears are everywhere these days, but for Jeff Bahl, former head of U.S. high-yield credit trading at Goldman Sachs and now a portfolio manager at Bahl & Gaynor, there aren’t enough of ’em.
goo.gl/MqcNQc

Banks & Brokers

Frank Quattrone to Step Down as C.E.O. of Qatalyst
By ANDREW ROSS SORKIN and MICHAEL J. de la MERCED – NY Times
Nearly a decade ago, Frank P. Quattrone, the star investment banker who took Amazon and Cisco Systems public in the 1990s, returned to the deal scene with a boutique investment bank catering to Silicon Valley.
goo.gl/5ybVju

Goldman CEO Blankfein to speak at one of first public events since cancer diagnosis
BY OLIVIA ORAN – Reuters
Goldman Sachs Group Inc Chief Executive Lloyd Blankfein will speak at an upcoming financial services conference, marking one of his first public appearances since being diagnosed with lymphoma in September.
goo.gl/0AKb3q

Why Universal Banks Are Failing
By Damian Chunilal – Bloomberg
Scarcely a day goes by without news of disappointing financial results or top-level leadership changes at universal banks — those all-purpose financial institutions that were supposed to benefit from synergies and economies of scale among their many businesses. Their model is clearly breaking down. And without some crucial changes, their future looks increasingly in doubt.
goo.gl/g3zRdZ

George Osborne delays £2bn Lloyds share sale
FT
George Osborne has confirmed that he is postponing a planned £2bn sale of Lloyds Banking Group shares to members of the public – which had been expected to take place in March – until markets have “calmed down”.
goo.gl/LkbxEV

Deutsche Bank Securities profits plummet by 30%; Deutsche Bank’s annual report reveals first full-year loss since financial crisis.
By Hayley McDowell – The Trade News
Deutsche Bank have reported a huge 28% decrease in equity sales and trading revenue today, as it suffers a full-year net loss of EUR6.8 billion.
goo.gl/QXyUCP

Deutsche Bank board won’t get bonuses for 2015: CEO
Reuters
Deutsche Bank’s (DBKGn.DE) management board will not get bonuses for 2015, the bank’s chief executive said on Thursday, after the lender posted a record 6.8 billion euro ($7.41 billion) net loss last year.
goo.gl/hKZfyI

Goldman Banker With Ties to Malaysia’s 1MDB Takes Personal Leave; Tim Leissner, Goldman’s Southeast Asia chairman, remains an employee of the bank
By MIA LAMAR – WSJ
A senior Goldman Sachs Group Inc. banker who helped the Wall Street firm win business with embattled Malaysian government investment fund 1Malaysia Development Bhd. has taken personal leave from the bank, according to a person familiar with the matter.
goo.gl/EdXH2F

UBS wealth management COO: Robo is ‘unstoppable’
By Anna Irrera – Financial News
If you are the world’s largest wealth manager by assets under management, chances are that you will have spent some time thinking about robo-advisory over the past few years.
goo.gl/9rweya

Clearing & Settlement

The DTCC’s Fear of Missing Out on the Blockchain
WatersTechnology
Millenials like to joke around about “FOMO,” but it was a pillar of the financial services industry that showed it didn’t want to get left behind this week.
To put it bluntly, the DTCC got FOMO when it came to blockchain technology. Practically any story you read about the distributed ledger talks about how the technology has the potential to disrupt post-trade processes, the very business the DTCC has thrived in for over 40 years.
goo.gl/EpBBX9

Goldman Sachs Tech Head Sees Blockchain as Solution for Banking Back Office
allcoinsnews.com
Goldman Sachs co-head of technology, Don Duet, recently discussed the applicability of blockchain technology for banking y in a podcast from the investment bank titled “The Digitization of Finance.”
goo.gl/GgJU4j

TriOptima eliminates US$98.5bn of eurozone inflation swaps
IFRe
Post-trade derivatives processing company TriOptima has completed its first multilateral compression cycle for eurozone inflation index swaps, tearing up US$98.5bn gross notional in legacy contracts from 18 banks through its triReduce service.
goo.gl/JYfZpw

Indexes & Products

New CBOE study examines weekly and monthly S&P 500 PutWrite indexes
Hedgeweek
A new study from The Chicago Board Options Exchange (CBOE) examines the monthly CBOE S&P 500 PutWrite Index and the CBOE S&P 500 One-Week PutWrite Index, comparing their performance with that of traditional benchmark stock and bond indexes. Among his findings, Bondarenko found that the two PutWrite indexes had strong performance in several areas:
goo.gl/O49Aeo

Bill Ackman Runs an Anti-Index Fund
By Matt Levine – Bloomberg
If you run a hedge fund that loses 20 percent in a year, you have an obligation to be interesting in your annual investor letter, and Bill Ackman’s Pershing Square letter for 2015 is quite interesting. Though the how-did-we-lose-all-that-money stuff — which you might expect would be the bulk of the letter — is a bit perfunctory. It’s basically: We bought stocks that we thought were good, and the market disagreed, but we still think they’re good, so the market must be wrong. In a subtle touch, the letter ends with a paragraph about the importance of humility. Honestly, though, if you invest in a hedge fund you have to expect something along these lines; you’re not paying Bill Ackman because you believe in the unfailing wisdom of an efficient market.
goo.gl/C0pDWS

BATS ETF MARKETPLACE WELCOMES NEW PROSHARES ETF
EMDV Begins Trading Today on BATS
BATS
BATS Global Markets (BATS), the #1 U.S. market for the trading of exchange-traded funds (ETFs), today welcomed the ProShares MSCI Emerging Market Dividend Growers ETF (BATS: EMDV), which began trading today on The BATS ETF Marketplace.
goo.gl/1bJpsN

Technology

FINCAD Helps Buy-side Increase Investment Returns with Advanced Valuation and Risk
Yahoo Finance
FINCAD, the leading provider of valuation and risk analytics for multi-asset, multi-currency portfolios, today announced that it has added several key enhancements to F3, its powerful object-oriented valuation and risk platform. These enhancements benefit buy-side firms searching for alpha in a low-yield environment and pursuing multi-asset, multi-currency strategies.
yhoo.it/1PEFYHX

Algomi Wins “Trading Technology Product Of The Year For The Buy-Side” In Risk Magazine Awards For Second Year Running
Mondovisione
Algomi Honeycomb has been named as ‘Trading Technology Product of the Year for the Buy-Side”, at this year’s Risk Magazine Awards, for the second consecutive year.
goo.gl/GFKupN

***DA: See the full slate of Risk Award winners HERE

TriOptima expands its triReduce compression catalogue with its first inflation swap compression cycle
ICAP
TriOptima, an award-winning post trade infrastructure provider, announces today that 18 banks participated in the first triReduce inflation swap compression cycle terminating $98.5 billion notional in inflation index swaps for the European Union: EUR- Excluding Tobacco-Non-revised Consumer Price Index.
goo.gl/8hKvQ

HFT firm eyes 2017 launch for Kent comms tower
By James Rundle – Financial
A Canadian trading firm owned by one of the biggest names in high-frequency trading is planning to bring online a new radio mast designed to boost communication speeds between the UK and continental Europe by the summer of 2017.
goo.gl/4YRqc8

Bank of America is going big on blockchain
Arjun Kharpal, Julia Chatterley – CNBC
Bank of America is trying to steal a march on the latest developments in the technology behind digital currency bitcoin by loading up on blockchain-related patents.
goo.gl/EWtHGd

Opinion: Harvard is getting computers to think like humans
By JURICA DUJMOVIC – MarketWatch
Modern computers are powerful data-processing machines, but they still need a tremendous amount of information to accomplish certain feats of recognition. Researchers at Harvard University are working hard to rectify this situation.
goo.gl/SzFmIG

Enforcement

Ex-Fannie Mae CEO urges U.S. judge to toss SEC fraud case
BY NATE RAYMOND – Reuters
Daniel Mudd, the last holdout among former top Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) executives accused of concealing risky mortgages that fueled the financial crisis, told a judge on Wednesday a U.S. regulator’s lawsuit seeking to hold him responsible should be thrown out.
goo.gl/UAPBZQ

U.S. Expects to Collect $1.36 Billion from Swiss Banks That Helped Clients Hide Money; Justice Department says 80 companies acknowledged misconduct
By LAURA SAUNDERS – WSJ
The Justice Department said it expects to collect more than $1.36 billion from 80 Swiss banks and other financial firms that acknowledged encouraging U.S. taxpayers to hide money abroad.
goo.gl/T1ESmn

Environmental & Energy

Saudi Arabia Keeps Pumping Oil, Despite Financial and Political Risks
By STANLEY REED – NY Times
Call it the Saudi calculus. Oil prices were already plummeting 14 months ago when, at Saudi Arabia’s insistence, OPEC put the global petroleum industry on notice: The member countries would not try to prop up prices by cutting production.
goo.gl/pB92m2

Investors Hedge Bets on Crude-Oil Revival; Firms are focusing on senior, secured loans or hedging against further declines
By GREGORY ZUCKERMAN – WSJ
How bad is the oil bust? Even the big believers in an inevitable rebound are hedging their bets.
goo.gl/bchYlT

In U.S. oil capital Houston, no cheap fuel bonanza for airlines
BY JEFFREY DASTIN – Reuters
While airlines are in no rush to pass on fuel savings to passengers brought by the collapse in oil prices, the Houston travel market has left them little choice.
goo.gl/r7lBgs

Green Energy Boom Helps Chile Contain Surging Power Prices
Philip Sanders, Vanessa Dezem – Bloomberg
Chile leads Latin America in installation of solar power; Success achieved without the help of government incentives
Chile’s solar industry is proving a win win. Not only has it cut emissions of the global warming gas carbon dioxide, but it has also helped slash some of the highest electricity costs in Latin America. Those benefits have come at no expense to the government, which refused to offer any of the subsidies that drained resources in countries such as Spain and Japan. Looking ahead, the industry could even turn into a major export earner.
goo.gl/73bFTg

Asia-Pacific

The gold market just lost its best measure of Chinese demand
By MYRA P. SAEFONG – MarketWatch
The Shanghai Gold Exchange has stopped publishing its weekly gold withdrawal figures, forcing the market to lose its “best measure of Chinese wholesale demand,” according to Koos Jansen, precious-metals analyst and blogger for Singapore-based bullion dealer BullionStar.
goo.gl/S7TQTY

China’s “Startling Acceleration In Capital Outflows” Could Already Top $1 Trillion
By Mani – Valuewalk
Capital outflows in China during Q3-Q4 2015 combined could be about $550 billion, with Chinese residents’ long-foreign asset flow pegged at about $370 billion, reports Goldman Sachs. In their “Asia Economic Analyst” report dated Jan. 26, MK Tang and team highlight the startling acceleration in capital outflows from China as Chinese resident outflows to accumulate foreign assets remains the biggest unknown.
goo.gl/DSs0EK

Frontier Markets

NCDEX suspends futures trading in castor seed; The exchange said it took this decision to safeguard the interest of the commodities market
Business Standard
The National Commodities and Derivatives Exchange (NCDEX) has suspended futures trading in all running castor seed contracts with immediate effect. The outstanding positions will be settled at the daily settlement price at closing on January 27, the exchange said in a release.
goo.gl/UOyjJQ

NSE asks brokers to remit excess STT immediately to govt
Business Standard
Top bourse NSE today asked stock brokers to furnish details of excess securities transaction tax (STT) collected by them during fiscal 2013-14 and prior years as well as remit the amount with interest to the government immediately.
goo.gl/jm8Qtf

JBS bonds near historic lows after chairman charged
BY PAUL KILBY – Reuters
Bonds issued by Brazilian meat producer JBS were scraping historic lows on Wednesday following news that prosecutors had charged its chairman with crimes against the financial system.
goo.gl/ongd23

Goldman Sachs Calls Brazil a ‘Mess’ After Warning on Depression
Ben Bartenstein – Bloomberg
Alberto Ramos says the crisis in Brazil hasn’t reached peak; Brazil’s economy is set for deepest recession in a century
Goldman Sachs Group Inc. said the crisis in Brazil will get worse before it gets better after the bank last year warned that Latin America’s largest economy was being dragged into a depression.
goo.gl/nI9O1O

Investors seek meeting with Sebi to oppose NSE rejig; They want the exchange’s restructuring plan aborted as it could delay its IPO and lead to huge tax liabilities
Ashley Coutinho – Business Standard
Shareholders in the National Stock Exchange (NSE) have sought a meeting with the Securities and Exchange Board of India (Sebi) about their opposition to NSE’s restructuring plan. This follows a letter opposing the plan, sent by a group of nine investors to the exchange’s chairman on January 13.
goo.gl/r9QhQ5

NCDEX may suspend members for trade norms violation; Exchange’s initial findings into castor seed price manipulation started four days ago suggest some irregularities
Business Standard
National Commodity & Derivatives Exchange (NCDEX) might suspend registration of clients involved in the price war of castor seed on its platform. Around half a dozen clients were involved in that.
goo.gl/Q9WZ7u

Sebi to NCDEX: Explain castor futures suspension; Regulator also investigating trading of coriander and other agri-commodities
Rajesh Bhayani – Business Standard
The Securities and Exchange Board of India, commodity derivatives regulator, has asked the agri-centric exchange National Commodity & Derivatives Exchange to submit a report explaining as to what compelled it to suspend futures in one of its most liquid contract castor seed.
goo.gl/6GkMI2

Saudis Rethink Foreigners’ Role in Economy as Oil Slumps
Zainab Fattah, Deema Almashabi – Bloomberg
Saudi plans to overhaul its visa system, with new easier visas
SAGIA identified 4 industries to be fully open to foreigners
Saudi Arabia may further ease restrictions on foreign ownership in the economy and overhaul one of the world’s most restrictive visa systems as the kingdom seeks to draw investors to help reduce its reliance on oil exports.
goo.gl/zR4vG1

Kenya’s NSE signs up six banks to clear derivatives
Business World News
Kenya’s Nairobi Securities Exchange has signed up six lenders as clearing banks for its yet-to-be launched derivatives market, it said on Wednesday. The NSE, an entry point for foreign funds keen to tap robust growth in East African economies, has been planning to start offering derivatives trading since last year.
goo.gl/VzOgjj

Miscellaneous

Essential oils key to Cargill’s comprehensive approach to reducing antibiotics in poultry
Cargill
Cargill researchers are focusing on improving gut health in poultry to promote feed efficiency and keep birds healthy. Cargill has been researching the use of non-medicated feed additives for several years as an alternative to antibiotic growth promoters (AGPs). As an independent supplier, Cargill has performed cross-additive research and determined the most beneficial types of feed additives for individual customer needs. For consistent performance improvement, essential oils turned out to be a key solution because they impact all four key gut function areas (listed below).
goo.gl/Nqz4Wr

Pistachio market faces return of ‘king of nuts’ from Iran
Monavar Khalaj in Tehran and Emiko Terazono in London – FT
It is not just the world of oil which is bracing itself for the impact of Iran’s return to the market after the recent lifting of US sanctions.
goo.gl/jNsmcw

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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.