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John Lothian Newsletter: Donohue Agrees to Stay on as OCC Executive Chairman for Three Additional Years; High Frequency Traders Elbow Their Way Into the Currency Markets; Wall Street’s Insatiable Lust: Data, Data, Data

Craig Donohue of OCC

First Read

Education Bits & Pieces
Doug Ashburn, JLN

Tomorrow we release the last of our Chicago series, Tayloe Draughon of Neurensic on machine learning for the futures industry. Later this week we begin releasing the videos from New York, beginning with Nasdaq president and COO Adena Friedman. Friedman began her career as a Nasdaq intern; this fact set the tone for the day and inspired the group to stay engaged and find their places within the industry. If you have missed any of the Chicago presentations, scroll down to see our latest release, TD Ameritrade luminary JJ Kinahan, who says that opportunity is knocking, so get to the door and open it.

As we mentioned in yesterday’s newsletter, John and I just returned from a reconnaissance mission to Stockholm and London ahead of next month’s MarketsWiki Education World of Opportunity “European Tour.” We plan to release the full schedule and begin taking registrations later today, but here is a sneak peek:

On Tuesday, October 25, we will hold a one-day session in Stockholm, featuring notable names and disruptive upstarts from the city dubbed “Europe’s unicorn factory.” Two days later, on the 27th, we will host another one-day session, this time in Frankfurt, continental Europe’s chief financial hub. Though Deutsche Börse Group is keeping a low profile these days due to the ongoing merger preparations, the exchange group has kindly offered us the use of the über-cool Alte Börse for the event.

Of course, we could not put on this increasingly popular event without the support of CME Group, Global Premier Sponsor of MarketsWiki Education.

While we are on the subject of education, let us pull it back to Chicago, where the FIA Operations Americas will be holding its 12th Annual Golf Outing for Chicago at Arrowhead Golf Club in Wheaton, Il. Not only is it a fun day of golf and networking, proceeds will go to the scholarship fund for children of division members. We also count on this fundraiser for our other activities and general operating expenses of FIA Operations Americas Division. For more information, and to register and/or sponsor the event, click HERE. To see a list of this year’s winners which, by the way, include two former interns at John J. Lothian & Co., click HERE.

Please support the industry’s industries to educate and inspire the next generation of market participants.

JJ Kinahan, TD Ameritrade – Seeing Opportunity Everywhere in the Market

“I don’t care what job you have, I don’t care where you are at, you basically hate 25 percent of what you do. Twenty-five percent of your job you’d probably do for free. It’s fun, it’s great, it’s why you get up in the morning. So, now you have a challenge — the 50 percent in the middle. The 50 percent in the middle, your opportunity is to say, ‘You know what? I’m going to make this fun somehow.'”

Since starting at CBOE as a trader when he was 21, JJ Kinahan has made his career fun. And if people know you can have a few laughs while getting your work done and making money, they will want to work with you.

In his talk, Kinahan is quick to point out that this industry is characterized by one degree of separation. As a career progresses, that becomes even more true. While you may not know somebody directly, chances are you know of them, what they do and their disposition. If you develop a solid reputation early on in your career, it will follow you due to this connectivity. (The opposite is true as well.)

To this day, Kinahan does business with people he first met in his early 20s. So, you may think you are going unnoticed, but rest assured, the industry radar is active and the results are filed away by peers in the financial markets.

Watch the video »

Chicago 2016 Video Releases to Date
Lisa Dunsky, OCC – Hit By A Brick: How Setbacks Shape Your Career
Kate Maehr, Greater Chicago Food Depository – Volunteerism: Good for the community and good for you!
Christian Domin, GlenStar Properties – Value Investing: Office Space and Associated Risks
Rob D’Arco, Rival Systems – Technology: the Center of the (Financial) World
Jeff Levoff, Partner, DRW – Make a Market: Proprietary Trading in the Modern Era
Walt Lukken, FIA – The New Normal and the Five Tips
Rumi Morales, CME Ventures – Investing in the Future of Fintech
Drew Shields, Trading Technologies – Next-Generation Product Development
Karen Wuertz, National Futures Association – Opportunity Behind Many Doors
Maureen Downs, Rosenthal Collins Group – Brutally Honest: The Role of the Mentor
Lanre Sarumi, RiskBone – Your Heart vs. Your Talents: Success Mindset for the Financial Industry
Tracy Raben, OCC – From Hire to Retire: Talent Management and Culture Transformation
Peter Nabicht, 12Sided Technology – The Implied Job Descriptions in Finance


New action on CFTC automated trading rules
At a CFTC meeting last week, Chairman Tim Massad outlined the Commission’s fall priorities. Among them is a supplement to the proposed rule on automated trading, or Reg AT. Although the Chairman didn’t go into specifics about what might be included in this supplement, he did thank the industry for providing detailed feedback on the proposed rule.

***DA: The area of broadest consensus in the industry feedback? “Keep your hands off my intellectual property unless you follow due process.”


Jamie Dimon Says He’d ‘Love to Be President,’ but It’s Too Hard to Run; J.P. Morgan Chase chief says many qualified people opt out because of the difficulty of campaigning
President James Dimon? It isn’t in the cards. Mr. Dimon, the longtime chief of J.P. Morgan Chase & Co., on Monday said he would “love” to serve as commander in chief but the rigors of running are too great.

***** Mr. Dimon knows his limitations. That is good.


Globalisation ‘not to blame’ for income woes, study says; Resolution Foundation data challenge idea that trade harms lower middle class in rich countries
by: Chris Giles in London and Shawn Donnan in Washington – FT
Trade and globalisation have been unfairly blamed for Brexit and the rise of Donald Trump, according to a study of incomes that debunks the popular view that a more connected world has led to stagnating fortunes for the lower middle class in rich countries.

**** It will take more than one study to change the beliefs of the masses who believe otherwise.


Monday’s Top Three
The top clicked story of the day was from the New York Post, and it involved the biggest hot-button issue of this year’s presidential campaign and Goldman Sachs. But if you were expecting scandal, illicit innuendo or other typical Post fare, you would be wrong. The story, This daughter of illegal immigrants climbed the ranks at Goldman Sachs, is a feel-good story of the highest order. The next two involve storylines that are no strangers to the top three. In second place, from FT’s Phil Stafford, was UK is the key unknown for the LSE-Deutsche Börse deal. In third place was the latest on Navinder Singh Sarao, the Telegraph’s ‘Flash crash’ trader takes extradition case to appeal.

Lead Stories

Donohue Agrees to Stay on as OCC Executive Chairman for Three Additional Years
OCC, the world’s largest equity derivatives clearing organization, announced today that Craig Donohue has agreed to stay on as Executive Chairman and Chief Executive Officer for three additional years after his term expires in December. Donohue also announced the creation of an Office of the Executive Chairman and CEO and enhancements to OCC’s leadership structure.

***** Congratulations to Craig on staying the course and working to complete the overhaul of the OCC. We are sorry to see the classy John Grace leave OCC, but congrats to John Fennell on his promotion to chief risk officer. OCC grabbed a trio of industry stars with Dale Michaels, Julie Bauer and Chip Dempsey joining OCC. Michaels comes to OCC after a long career at the CME Group. Julie Bauer joins OCC as senior vice president, government relations and comes from FINRA. Also, the one and only Chip Dempsey joins the organization to run “OCC’s efforts in strategy, planning, and business and product development.” Lastly, a hat tip to David Prosperi, who was also promoted.

High Frequency Traders Elbow Their Way Into the Currency Markets
Lananh Nguyen – Bloomberg
After scandal comes reluctant embrace of high-speed firms; Volume from nonbanks triples in 3 years to $199 billion a day
High-speed electronic market making, already widespread in stocks, is getting a grudging welcome from currency markets. They don’t have much choice.

ISDA Publishes New Academic Paper On Single-Name CDS
Press Release
A new academic literature review commissioned by the International Swaps and Derivatives Association, Inc. (ISDA) and published today shows that single-name credit default swaps (CDS) remain an efficient tool for hedging credit risk and can have a positive impact on the economy.

Wall Street’s Insatiable Lust: Data, Data, Data; ‘The opportunity we are chasing is that in all this huge data there are little nuggets of alpha gold’
A new species is prowling America’s most obscure industry conferences: the data hunter.

Dear Algos: Thanks for the Tantrum. Love, Mom and Pop
Michael P. Regan – Bloomberg Gadfly
After a temper tantrum like the markets threw on Friday, it’s natural that every little pebble now appears to be the size of a boulder. And as usual, there are plenty of boulders: High valuations, disappointment with the European Central Bank’s decision to play down the need for more stimulus last week, seasonal weakness in September, continued hawkish comments from Federal Reserve officials, concern that profit expectations are too optimistic again, the slow but relentless creep higher in Libor, to name just a few.

Hanjin’s fall will not fix the global shipping industry’s ills
Nick Carey – Reuters
Following the collapse of Hanjin Shipping Co Ltd (117930.KS), container shipping rates from Asia to the United States spiked 50 percent as the carrier’s customers scrambled for ships. Few shipping industry experts expect those price increases to fix what is wrong with the industry. Hanjin’s collapse and the resulting chaos in the global shipping sector are symptoms of deeper ills caused by a capacity glut that will remain even after the resolution of Hanjin’s crisis, industry officials and experts told Reuters.

Pervasive Sham Deals at Wells Fargo, and No One Noticed?
Andrew Ross Sorkin – NY Times
“I don’t want anyone ever offering a product to someone when they don’t know what the benefit is, or the customer doesn’t understand it, or doesn’t want it, or doesn’t need it.” That was John Stumpf, the chief executive of Wells Fargo, one of the nation’s largest banks, in an interview about a year ago with The San Francisco Chronicle.

Wells Fargo to Eliminate Product Sales Goals as It Seeks to Rebuild Trust; After last week’s firestorm over alleged cross-selling, bank seeks greater transparency for customers
Wells Fargo & Co. said Tuesday that it would eliminate all product sales goals in its retail banking operations in January as it works to recover from a record-setting $185 million settlement for allegedly allowing its employees to open deposit and credit-card accounts without customers’ knowledge in order to meet targets.

Born again bankers step out from the shadows; Pioneers of structured investment vehicles are back to help banks
by: Patrick Jenkins – FT
A decade ago, a EUR60bn hedge fund and shadow banking pioneer was thriving like few of its Mayfair neighbours. These were the glory days before the financial crisis, and Stephen Partridge-Hicks and Nicholas Sossidis — the City bankers-turned-entrepreneurs who had founded Gordian Knot — were riding high.

The Swiss and negative rates: how is the experiment going?; Swiss banks and consumers have adjusted to negative rates but concern about long-term pain is brewing
by: Ralph Atkins in Zürich – FT
The Swiss still refer to the day of the “Frankenschock”. On January 15 last year, their stable economic lives were shattered by news the Swiss National Bank had abandoned its cap on the super-strong franc’s value against the weak euro. To deter investor inflows, the central bank instead pushed its main policy interest rate even deeper into negative territory — to minus 0.75 per cent.

Exchanges, OTC and Clearing

Nasdaq plan for key stock exchange data draws rebuke from Bats
John McCrank – Reuters
Bats Global Markets (BATS.Z) on Monday accused rival exchange operator Nasdaq Inc (NDAQ.O) of attempting to boost revenues by proposing a new feed for industry data essential to U.S. stock market operations. The data is related to systems called securities information processors, or SIPs, which consolidate all the stock quotes and last sales prices from the 13 U.S. stock exchanges. Regulators use the information to determine the best market prices, which brokers must give their clients when executing trades.

CME Group Announces First Trades of New EU Wheat Futures Contract
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that the first EU Wheat futures contracts were traded on Monday, September 12, 2016. A total of 411 futures contracts were traded, equaling over 20,000 metric tons. Trades took place in five delivery months from December 2016 up to December 2017. Open interest for the first day of trading stands at 180 contracts.

CME’s new EU wheat futures trade in debut session
CME Group’s long-planned European Union wheat futures generated trade on their debut session on Monday, a first step towards building liquidity in a market dominated by Euronext. CME aims to expand in the EU, which is collectively the world’s biggest wheat production zone, by offering similar delivery and trading features to its Chicago Board of Trade (CBOT) futures, the global benchmark for grain markets.

London’s Newest Derivatives Exchange Defies Brexit Curveball
John Detrixhe – Bloomberg
The U.K.’s newest derivatives exchange, backed by London Stock Exchange Group Plc, is pressing ahead with plans to debut later this month despite headwinds few saw coming when the project was announced nearly a year ago.

Nasdaq Announces End-Of-Month Open Short Interest Positions In Nasdaq Stocks As Of Settlement Date August 31, 2016
At the end of the settlement date of August 31, 2016, short interest in 2,329 Nasdaq Global Market securities totaled 7,371,196,258 shares compared with 7,501,329,605 shares in 2,334 Global Market issues reported for the prior settlement date of August 15, 2016. The end-of-July short interest represents 5.23 days average daily Nasdaq Global Market share volume for the reporting period, compared with 4.37 days for the prior reporting period.

SGX Index Edge to use S&P Global Market Intelligence’s Alpha Factor Library to develop quantitative capabilities
Singapore Exchange (SGX) and S&P Global Market Intelligence today announced a commercial relationship that will enable SGX Index Edge to use S&P Global Markets Intelligence’s Alpha Factor Library to develop new quantitative index models and smart beta indices across Asia-Pacific.
(via email)

MEFF Launches Future Contracts On The IBEX 35 Bank And IBEX 35 Energy Indices – Meeting The Demands From Market Members And Their Clients
Press Release
The contracts that can be traded as of this date are on the IBEX 35 BANK and on IBEX 35 ENERGY indices, once, in July, the Spanish stock market regulator (CNMV), approved the amendment of the General Conditions of the Underlying Financial Assets Contract Group.

Tokyo Financial Exchange: Extension Of Discount Program In Three-month Euroyen Futures
This informs Members of the extension of the current Discount Program in Three-month Euroyen Futures (Euroyen). TFX has decided to extend the program until the end of March 2017.

SIX Swiss Exchange launches the SPI Multi Premia® index family for factor-based investments
SIX Swiss Exchange
SIX Swiss Exchange is today introducing an index family for factor-based investments, SPI Multi Premia®. Eight new indices will allow broader diversification and create additional potential for returns. The individual indices are based on the largest and most liquid securities from the SPI® (Swiss Performance Index). 30 stocks that make up the individual indices are selected in each case based on statistical analysis of individual factors. These factors are value, size, momentum, residual momentum, reversal, low risk and quality

SGX to charge negative interest to clearing members; Excess euro and yen cash deposits expected to generate 20 – 40bp charge
Tom Osborn –
Singapore Exchange (SGX) will begin passing negative interest rates on excess yen and euro cash collateral to its clearing members, has learned. The exchange estimates the new policy will cost members between 20 and 40 basis points in its first month, adding to the pressure on futures commission merchants (FCMs), which have traditionally relied on interest income for a big chunk of their revenues. The bourse is understood to have been considering the move for some time, and is said by…

Nasdaq Announces End-of-Month Open Short Interest Positions in Nasdaq Stocks as of Settlement Date August 31, 2016
By GlobeNewswire
At the end of the settlement date of August 31, 2016, short interest in 2,329 Nasdaq Global MarketSM securities totaled 7,371,196,258 shares compared with 7,501,329,605 shares in 2,334 Global Market issues reported for the prior settlement date of August 15, 2016. The end-of-July short interest represents 5.23 days average daily Nasdaq Global Market share volume for the reporting period, compared with 4.37 days for the prior reporting period.

Toronto Stock Exchange and TSX Venture Exchange Host Third Annual “Golden Bull” Charity Golf ClassicA- A+ Print
Toronto Stock Exchange and TSX Venture Exchange today host the third annual TMX Group Golden Bull Charity Golf Classic at the Valley Ridge Golf Club in Calgary.

iShares launches first ETFs on innovative sector indices, the index family iSTOXX FactSet Thematic on Xetra
Deutsche Boerse
ETFs track the areas of Automation and robotics, innovative health services, digitization and services for the aging population
Since Tuesday, four new sector ETFs of the issuer Blackrock on Xetra and the Frankfurt Stock Exchange are tradable.


Donald Trump’s Shifting Words on Interest Rates and Janet Yellen
Kate Davidson – WSJ
On Monday, Republican presidential nominee Donald Trump blasted Chairwoman Janet Yellen for keeping rates “artificially low” in order to help President Barack Obama. Just four months ago, he said he had “great respect” for the Fed chief and cautioned raising rates “would be a disaster” for the economy.

TRUMP: Janet Yellen should be ‘ashamed’ of what she’s doing to the country
Matthew J. Belvedere – CNBC
GOP presidential nominee Donald Trump told CNBC on Monday the Federal Reserve is doing what President Barack Obama wants by keeping interest rates low. Fed Chair Janet Yellen and central bank policymakers are very political, and Yellen should be “ashamed” of what she’s doing to the country, Trump said, adding the Fed is not even close to being independent.

Trump said the Fed is keeping rates ‘artificially low’ to help Obama.; That’s a lie.
By Kai Ryssdal – Marketplace
Donald Trump went on CNBC this morning — he’s got a standing invitation to be on this program as well, by the way — and he talked about a lot, including the Federal Reserve. He accused Fed Chair Janet Yellen of keeping rates “artificially low” and creating a “false stock market” to make President Barack Obama look good.

Barclays CEO Warns of Impact From Trump, Clinton Views on Trade
Keith Campbell and Donal Griffin – Bloomberg
Barclays Plc Chief Executive Officer Jes Staley said the candidates in the U.S. presidential race risk a “substantial impact” on the global economy with their skepticism toward free-trade agreements.

Investing and Trading

Brainard Says Prudence Warranted as Hiking Rates Poses Risks
Jeanna Smialek, Rich Miller – Bloomberg
Governor’s speech marks final Fed commentary ahead of FOMC day; She sees gradual progress in inflation and employment data
Federal Reserve Governor Lael Brainard counseled continued prudence in tightening monetary policy, even as she said the economy is making gradual progress toward achieving the central bank’s goals.

Investment Industry Insights, September 2016
RSM has just posted the September issue of Investment Industry Insights, the newsletter of developments for the investment and brokerage industries. In this issue:
5 trends to watch in hedge fund investor relations
What private equity firms should know about GIPS
Market infrastructure systems regulation update
2016 Investment Industry Summits – Chicago and New York

Companies Move to Reprice Employees’ Stock Options; Stock-option exchanges surged in popularity during market busts, when many options became underwater
Stock-option exchanges are making a bit of a comeback, despite a strong stock market and worries about the shareholder pushback they can generate.

The Hunt for Consistent Income
Aye Soe – S&P Indexology
The hunt for stable income is an increasingly challenging task. Bond yields across major fixed income markets are at historically low levels, with some of the central banks in developed countries even going as far as adopting a negative rates policy. Together with an aging population that is living longer and relies predominantly on fixed income, it is no surprise that dividends have become a major source of yield.

‘Safest’ Shares Prove Anything But; Investors in dividend-paying stocks could be in for a rude awakening
The market turmoil since Friday came as a shock after the eerie calm of August, but it should have taught us two useful lessons: The precise date of the next U.S. rate increase doesn’t matter at all, and at the same time matters more than almost anything else.

Goldman Has Three Reasons Why the Bond Rout Is Going to Get Worse; Stretched bond valuations, waning impact from quantitative easing, and rising importance of fiscal policy. Oh my.
Tracy Alloway, Luke Kawa – Bloomberg
Yields on 10-year U.S. Treasuries have been doing their best impression of a soaring eagle in recent days, following examples set by Japanese and German government debt.

Libor’s Reaching Point of Pain for Companies With Big Debt Loads
Sally Bakewell – Bloomberg
Around $230 billion of loans could reset at higher rates; Rising rates would add to trouble as U.S. company profits fall
Short-term borrowing rates are rising to the point where some heavily indebted U.S. companies can no longer ignore them.

Why This Fund’s Robot Hates Facebook, Amazon and Google
Jonas Cho Walsgard – Bloomberg
Larger growth stocks aren’t winners over time, Bringedal says; Sees value, size and momentum contributing to excess return
The surge of tech giants Facebook and Google isn’t captured by the algorithms used by the model-based equity team at Norwegian insurer Storebrand ASA.


Three Fed Officials Say No Hurry to Raise Short-Term Interest Rates
Harriet Torry – WSJ
Three Federal Reserve officials indicated Monday they’re in no hurry to raise short-term interest rates at their policy meeting next week. Fed governor Lael Brainard said in a speech the central bank’s recent caution on rates—leaving them unchanged since December–“has served us well in recent months, helping to support continued gains in employment and progress on inflation.”

Wells Fargo Exec Who Headed Phony Accounts Unit Collected $125 Million
Stephen Gandel – Forbes
Months ago, CEO John Stumpf praised the executive in hot water as “a standard-bearer” for the bank. Wells Fargo & Co’s WFC “sandbagger”-in-chief is leaving the giant bank with an enormous pay day—$124.6 million.

A handful of banks will make a killing on a huge agriculture deal
Tina Wadhwa – Business Insider
Potash Corporation of Saskatchewan and Agrium are merging to create the largest crop nutrient company in the world. The deal, valued at $27 billion, will also create the third largest natural resources company in Canada.

Some of the Biggest Hedge Funds Are Bleeding Cash
Saijel Kishan, Hema Parmar and Katherine Burton – Bloomberg
Some of the biggest and best-known hedge funds can’t hang on to client capital. Richard Perry, who started his hedge fund 28 years ago, has seen assets in his Perry Capital shrink to $4 billion, from $10 billion last September. That 60 percent drop comes as the firm’s main fund fell 18 percent from the end of 2013 through July.

The World Bank’s Recipe for Irrelevance
Devesh Kapur – Project Syndicate
World Bank President Jim Yong Kim’s nomination for a second term is inexorably moving forward with a lack of transparency that has become all too typical. Many observers are once again gnashing their teeth at the United States’ continued monopoly over the top post, despite the poor performance of past US nominees. As the late Yogi Berra once put it, “It’s like déjà vu all over again.”

Credit Suisse shuffles trading executives following key departure
Credit Suisse AG named three trading executives to new roles within its global markets division following the departure last week of the unit’s head Timothy O’Hara, the Swiss bank said on Monday.

Wells Fargo urged to clawback bonuses over fake accounts; Investors call on bank to hold community bank division boss accountable
by: Alistair Gray and Stephen Foley in New York – FT
Wells Fargo is facing calls to claw back bonuses paid to senior executives, including the outgoing head of its community banking division, as the fallout over its sham account scandal intensifies.


In the future, everyone will be a software engineer and barely any will know how to code
Michael J. Coren – Quartz
Earlier this year, the App Association calculated that there were 223,000 unfilled coding jobs in the US. Companies have started touting coding as the new literacy, almost a prerequisite to getting in the door. Last month, General Electric’s CEO Jeff Immelt announced that every new hire at the 305,000-person company will learn to code. “It doesn’t matter whether you are in sales, finance or operations,” he wrote on LinkedIn on Aug. 4. “You may not end up being a programmer, but you will know how to code…. This is existential and we’re committed to this.”

Bank of England remains focused on blockchain after Brexit
Business Insider
Despite widespread economic uncertainty in recent months, the Bank of England (BofE) indicated last week that it has not been distracted from its plan to enable a “fintech transformation” of the financial services industry.

Transatlantic Latency Slashed For Quincy Extreme Data Service
McKay Brothers International (MBI) has reduced transatlantic latency on its Quincy Extreme Data (QED) service to the lowest available for financial market data services. QED’s new transatlantic fiber capability combined with McKay’s extremely low latency microwave on land in the US and across Europe sets a new speed benchmark for market data services. The improvement in transatlantic latency extends a long history of upgrades. The QED service is operating between Aurora, IL and Europe at unprecedented one-way speeds

TFG Financial Systems adds on-demand risk capability to its portfolio management platform TFG Complete
Press Release
TFG Financial Systems, the financial software company specialising in portfolio management systems for hedge funds, has enhanced its flagship TFG Complete product with an “on-demand risk” capability. The enhancement supplements TFG’s existing real time risk analytics for multi-asset portfolios, and delivers significantly more capabilities to risk managers than the industry standard offerings.

Treasury Management Systems Poised for a New Phase in Cloud Adoption
Press Release
TreasuryXpress, the global leader in frictionless and on-demand treasury management solutions has announced triple year-over-year growth for its treasury management solution suite, C2Treasury.

Lombard Risk eyes buy-side with cloud tech; Lombard Risk is targeting pension funds, asset managers, and buy-side brokers with its new collateral management system.
By Joe Parsons –
Lombard Risk eyes buy-side with cloud tech Joe Parsons Lombard Risk is targeting pension funds, asset managers, and buy-side brokers with its new collateral management system. false Collateral tech vendor Lombard Risk is targeting asset manager

Fintech start-up Point adds ex-Airbnb CFO Laurence Tosi as backer; Andreessen Horowitz and Vikram Pandit also funding platform that lets homeowners sell equity stakes
by: Stephen Foley in New York – FT
Laurence Tosi, the former Blackstone executive who moved to Silicon Valley as chief financial officer of Airbnb, has joined the roster of shareholders in an experimental trading platform that allows homeowners to raise money against the value of their house.


Margin rules push interdealer inflation swaps to clearing; Traders say 95% of the market now cleared, compared with 10% a month ago
Catherine Contiguglia –
The proportion of interdealer inflation swaps being cleared voluntarily has increased dramatically since new derivatives margining rules came into force, rising from around 10% of the market to 95% in just over a month. Inflation swaps have been able to be cleared at LCH since April 2015, but take-up in the interdealer community was slow. On August 1, a month before the new non-cleared over-the-counter derivatives margin regime took force, just 30 euro, sterling and US dollar inflation swaps were…

CFTC Proposes New Enforcement Authority and Other Amendments in Its Whistleblower Program
Yvette Valdez – JD Supra
Mirroring existing SEC authority, the CFTC’s proposal would allow it to impose sanctions for retaliation against whistleblowers.

Polishing Financial Results Looks Good, but Can Lead to Fraud
Peter J. Henning – NY Times
Like a child on a playground who wants everyone to watch a new maneuver, companies clamor for public attention by presenting their numbers in a way that makes them look as successful as possible. But when those measures involve manipulating the figures, then their efforts can end up as a fraud on investors.

U.S. regulator sees no evidence of Wells Fargo sales problem at other banks
One of the U.S. regulators who fined Wells Fargo & Co (WFC.N) over abusive sales practices said he sees no evidence of similar problems occurring at other banks “on any kind of systematic basis.”

Federal Court In North Carolina Orders James A. Shepherd And His Company, James A. Shepherd Inc., To Pay More Than $15 Million In A Monetary Penalty And Restitution For Commodity Pool Fraud
The U.S. Commodity Futures Trading Commission (CFTC) today announced that Judge Robert J. Conrad, Jr. of the U.S. District Court for the Western District of North Carolina entered a Final Judgment and Consent Order (Order) against Defendants James A. Shepherd and his company, James A. Shepherd Inc. (JAS Inc.), requiring them to pay, jointly and severally, a $7 million civil monetary penalty and $8,060,810.43 in restitution to defrauded commodity pool participants.


The New Deal With Chinese Characteristics
Streetwise Professor
When I was in Singapore last week I spoke at the FT Asia Commodities Summit. Regardless of whether the subject was ags or energy or metals, China played an outsized role in the discussion. In particular, participants focused on China’s newish “supply side” policy. There is little doubt that the policy – which focuses on reducing capacity, or at least output in steel, coal, and other primary industries – has had an impact on prices.

Mongolia: Living from loan to loan
Lucy Hornby – Financial Times
Presiding over skinned sheep carcases in Ulan Bator’s largest wholesale meat market, stall owner Gantulkhuur has become one small part in the debt binge rippling through Mongolia. She whips out a small ledger. Names and numbers in neat Cyrillic script crowd tighter and tighter on the pages, as her accounts have been taken over by retailers buying on credit. The retailers, for their part, are selling smaller cuts of mutton, Mongolia’s staple food, or cheaper intestines and organs as their customers try to eke out their savings.

Libyan commander’s seizure of oil ports risks new conflict
Aidan Lewis and Ayman al-Warfalli – Reuters
Libyan forces loyal to eastern commander Khalifa Haftar said on Monday they had tightened their control over four major oil ports, casting a Western-backed project to unite Libya and revive oil exports into deep uncertainty. Haftar’s forces met little resistance as they seized the terminals at Ras Lanuf, Es Sider, Zueitina and Brega in an operation launched on Sunday, displacing a rival armed faction aligned with the U.N.-backed Government of National Accord (GNA) in Tripoli.

Hungary should be kicked out of EU, says Luxembourg; Diplomatic row erupts over Budapest’s handling of migration crisis
by: Duncan Robinson in Brussels and Andrew Byrne in Budapest – FT
Hungary should be kicked out of the EU for its attitude to refugees, according to Luxembourg’s foreign minister in the latest diplomatic row over the bloc’s handling of the migration crisis.

Japan in renewed push to legalise casinos; Abe looks to pass landmark gaming bill ahead of 2020 Tokyo Olympics
by: Leo Lewis in Tokyo – FT
A push by gambling groups to legalise casinos in Japan and create an industry worth an estimated $40bn a year will come to a head this month in what could be Prime Minister Shinzo Abe’s last chance to pass a landmark gaming bill before the 2020 Tokyo Olympics.


How Big Sugar Enlisted Harvard Scientists to Influence How We Eat—in 1965
Deena Shanker – Bloomberg
The food industry has funded research in an effort to influence nutrition science and health policy for more than half a century, new research out Monday has found. It’s no secret that industry funds such efforts today: An investigation in June, for example, showed how the National Confectioners Association worked with a nutrition professor at Louisiana State University to conclude that kids who eat sugar are thinner than those who don’t.

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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.