Hits & Takes
By JLN Staff
We have added some color to MarketsWiki to highlight the original content of John Lothian News. This is part of an ongoing review of our sites relative to current best practices in website design,newsletter offerings and social media innovation.~JJL
A recent innovation by the CFTC is publishing podcasts on their website hosted by CFTC market intelligence head Andy Busch. A recent one featuring an interview with CFTC Chairman Christopher Giancarlo received over 1000 downloads from over 25 countries. The latest podcast features an interview with Chief Investment Strategist Sam Stoval. All the podcasts can be found HERE.~JJL
The man who donated the statue of Robert E. Lee in Charlottesville, Va. in 1924 was a former member of the Chicago Stock Exchange and New York Stock Exchange, according to this Chicago Tribune story.~JJL
Running the odd mile…to help beat cancer
At the beginning of May I was diagnosed with primary liver cancer. On June 26th I was told, given the spread into my vascular system, it is terminal.
As I have told many friends and family, I refuse, absolutely refuse, to go quietly into the night.
This is where I’m hoping you can help.
Insider trading schemes using encrypted apps alarms FBI; Self-destructing messages are the latest tool for white collar criminals
Kara Scannell in New York – FT
The Federal Bureau of Investigation is growing concerned that Wall Street traders are turning to encrypted apps to hide illicit communications from internal compliance programmes and regulators.
***** These apps are a menace to politics and trading.~JJL
Wash Trades; Spoofing; Bank Capital; Virtual Currency Businesses
Gary DeWaal – Bridging the Week
A non-US-based commodity firm that allegedly tried to square up its books at month-end by placing matched buys and sells on a US futures exchange was charged with wash trading by the Commodity Futures Trading Commission. At the time – on or after first notice day in the relevant delivery month – the firm was precluded from transferring trades through book entry transfer transactions because of exchange rules. And last month an organization renowned for drafting model state laws approved a statutory framework for state regulation of persons engaged in a virtual currency business.
From Golfing to Trading: Decision-Making is Key – Rich Mackey
“When you treat everyone fairly, you inspire loyalty.”
In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Rich Mackey, executive vice president, strategic initiatives for Rosenthal Collins Group, reminisces about his time as a caddie and how it prepared him for a career in finance. Mackey caddied in the Western Open as a high schooler for Jim Colbert, a PGA legend, which helped him realize the difference between being good and great is the amount of hustle you put in everyday. Mackey stresses the importance of a great reputation because early in his career it served as the collateral that secured him a $10,000 loan from his mentor Bill Hagerty.
Friday’s Top Three
Our top three stories of the day on Friday were led by Reuters U.S. pension funds sue Goldman, JPMorgan, others over stock lending market. Second went to Bloomberg’s piece This 19-Year-Old Is Trump’s Latest Market Whisperer. Third was another Bloomberg piece about the Wall Street Journal in
Jeff Gundlach Is Attacking the WSJ for a Story That Hasn’t Come Out Yet
106,391,691 pages viewed; 22,679 pages; 207,901 edits
Superstitious Stock Traders: Beware of an Eclipse Crash
Lily Katz – Bloomberg
Bored traders with too much computer power have found the key to the next stock market crash: the solar eclipse. Fed up with political dramas that can be tough to trade on, some have turned their attention to an obscure theory that says market reversals tend to begin around the time of a lunar eclipse and end around the time of a solar eclipse.
London’s financial district is ‘hemorrhaging talent’ because of Brexit, warns UK job recruiter
Luke Graham – CNBC
The number of professionals seeking a job in the U.K.’s financial capital is down 33 percent year on year, while the number of jobs available has shrunk 11 percent, due to the uncertainty caused by Brexit
City brokers ramp up preparations for regulatory shake-up; UK groups seek to protect small and mid-cap services as Mifid II looms
Hannah Murphy – FT
City broking houses are stepping up their preparations for a regulatory shake-up of European financial markets, trying to allay fears the new rules will badly hit their small and mid-cap services.
SEC to Drop Civil Charges Against Two Ex-J.P. Morgan ‘London Whale’ Traders; Move reflects concerns defendants had acted with assent from senior management
Rebecca Davis O’Brien – WSJ
Federal regulators said they would drop civil charges against two former J.P. Morgan Chase JPM 0.10% & Co. traders at the center of the 2012 “London Whale” saga, ending the last U.S. case against traders involved in a debacle that cost the New York bank more than $6 billion.
Regulators get ready to authorise ‘ringfenced’ UK banks; Big banks need to split their retail services from riskier investment divisions by 2019
Regulators at the Bank of England are quietly getting ready to authorise the creation of the three largest new banks to come into existence in the UK.
Why Lawsuits Targeting Stock Drops Are on the Rise; Securities cases stack up as investors take companies to task for business disruptions, failed trials and disappointing earnings
Sara Randazzo – WSJ
When pharmaceutical company Depomed Inc. DEPO 3.97% said this month it is fielding federal and state inquiries over its marketing of opioid painkillers, a stock drop was likely to follow.
IEX plans to nab listings from rivals with cheaper, simpler fees
John McCrank – Reuters
A year after disrupting the U.S. stock market with a new approach to handling trades, upstart stock exchange operator IEX Group is planning to nab listings from rivals by charging simpler, cheaper fees, Sara Furber, IEX’s head of listings, said in a recent interview.
Inside the Virtu BondPoint Sale
Jim Greco – Trading Places
It had long been an open secret that KCG was attempting to offload their corporate bond trading platform, BondPoint. Before the Virtu acquisition, KCG went through a multi-year process of selling off all the “non-core” assets that it had accumulated over the years including a reverse mortgage business, a futures clearing merchant, an options market making group, a large stake in BATS, two NYSE floor trading businesses, and Hotspot, a currency trading venue (whew!). BondPoint was next on the auction block, but discussions were halted when the KCG-Virtu merger was announced in April 2017.
Exchanges, OTC and Clearing
ASX to make decision on blockchain system in December; Operator of the Australian Securities Exchange also exploring artificial intelligence and machine learning
George Nott – Computerworld
The operator of the Australian Securities Exchange, ASX, will complete an assessment of blockchain-style distributed ledger technology (DLT) as a replacement for its CHESS system by the end of the year, the company said today.
SGX today launched the MSCI Singapore Net Total Return (USD) Index Futures to broaden its existing suite of Asian Net Total Return Futures
With this latest addition, SGX is now the only exchange in Asia offering both price return and net total return versions of MSCI equity index futures contracts, thereby providing the broadest range of derivatives to investors seeking to access the five key Asian markets; China, India, Taiwan, Indonesia and Singapore.
The new contract will also provide investors a deeper reach into Singapore’s equity market by capturing the total performance of Singapore stocks.
The MSCI NTR Index Futures Contracts have been certified by the Commodity Futures Trading Commission (CFTC), enabling US investors to trade directly from within the US.
DGCX to Launch Region’s First Sharia Compliant Spot Gold Contract, in Partnership with Ayedh Dejem Group
The Dubai Gold & Commodities Exchange (DGCX) and Ayedh Dejem Group, a conglomerate from the Kingdom of Saudi Arabia, have agreed to develop and launch the Middle East’s first-ever Sharia compliant Spot Gold contract to be traded on an international exchange.
Hotspot Expands Sales Team
Hotspot, a CBOE Holdings, Inc. company, and a leading market for institutional foreign exchange (FX) trading globally, announced Mike Cahill’s appointment to the firm’s London-based sales team.
Good response to ICEX mock trades in diamond futures; 8,013 clients registered with the exchange system for these sessions, of which 5,119 participated
Dilip Kumar Jha – Business Standard
A pre-launch mock trading session in diamond futures on the Reliance ADAG-anchored Indian Commodity Exchange (ICEX) got encouraging response from members and traders in precious stones.
TMX denies reports of ban on clearing trades in cannabis firms with U.S. ties
The company that operates the Toronto Stock Exchange says it is talking to securities regulators about Canadian-listed cannabis companies with operations in the United States, but that there is no ban currently in place on clearing trades of their stocks.
Sebi to defreeze bank accounts of NSEL, MCX ex-chiefs; Sebi will defreeze the bank accounts of NSEL’s former CEO Anjani Sinha and MCX’s ex-chief Joseph Massey which were frozen in an alleged insider trading case
PTI via Livemint
Securities and Exchange Board of India (Sebi) will defreeze the bank accounts of National Spot Exchange Ltd (NSEL)’s former CEO Anjani Sinha and Multi Commodity Exchange (MCX)’s ex-chief Joseph Massey which were frozen by the regulator in an alleged insider trading case.
LME INSIGHT – MIFID II: THE FINAL COUNTDOWN
LME Regulation Team
With the final quarter of 2017 almost at hand, the MiFID II implementation date of 3 January 2018 is fast approaching. The first MiFID II related proposals were published in 2011, meaning the evolution of this legislation has been long and fairly protracted – particularly in view of the 12-month delay pushing the implementation date from 2017 to 2018. Whilst at times it may have felt like implementation would never arrive, that day is now just around the corner and if you aren’t already eating, drinking and dreaming MiFID II, then rest assured you will be very soon.
Is fintech to banking what craft ale is to brewing?
Aden Davies – Banking Technology
Craft ale and fintech: more in common than you think! Is fintech to banking what craft ale is to brewing? If so, what can banks learn from the rise and rise of craft ale? Aden Davies, principal consultant at ABZD, looks at ten trends seen in the craft ale industry that have interesting parallels with the rise of fintech.The mass commoditisation of products, little real differentiation apart from so called brand, massive conglomerates owning great swathes of the market and products that are largely sold in staid premises not fit for the customer wants of today. Am I talking about beer or current accounts?
The Moral Voice of Corporate America
David Gelles – NY Times
The nation has split into political tribes. The culture wars are back, waged over transgender rights and immigration. White nationalists are on the march. Amid this turbulence, a surprising group of Americans is testing its moral voice more forcefully than ever: C.E.O.s.
These Are the Most Pressing Challenges Facing Europe’s Leaders
Viktoria Dendrinou and Ian Wishart – Bloomberg
As summer draws to a close, the European Union will seek to tick off a number of boxes from the top of its to-do list, leveraging its new-found political capital following the ascent of pro-EU leaders on the continent.
Trump and the CEOs: Behind the Collapse of an Uneasy Alliance
Vanessa Fuhrmans, Joann S. Lublin and Emily Glazer – WSJ
Can this relationship be saved? Few chief executives openly supported candidate Donald Trump in the 2016 election. Yet by the time of his inauguration, many were expressing cautious optimism they could work with a president who presented himself as a leader with business acumen.
Investor Carl Icahn steps down as adviser to President Trump
Trevor Hunnicutt and Svea Herbst-Bayliss – Reuters
Billionaire investor Carl Icahn ended his role as a special adviser to U.S. President Donald Trump on Friday after facing criticism that policy recommendations he offered could help his own investments.
Column: Donald Trump, the anti-business president
Steve Chapman – Chicago Tribune
Most business executives fumed and groused for the eight years Barack Obama was in the White House. He was a former community organizer who had never met a payroll, and those in the corporate boardrooms thought he was no friend of free enterprise.
Inspectors Again Find Problems in How Broker-Dealers Are Audited, PCAOB Says; Deficiencies in 83% of Reviews Examined Last Year
Michael Rapoport – WSJ
Federal inspectors found problems in more than 80% of the audits of broker-dealers they reviewed last year, the government’s auditing regulator said Friday, continuing a pattern of high levels of deficiencies that has persisted since such inspections began six years ago.
Third Libor trader prepares submission for jail term to be reviewed; A second former Barclays banker convicted of Libor-rigging offences is preparing to submit his case
Lucy Burton – Telegraph
A SECOND former Barclays banker convicted of Libor-rigging offences is preparing to submit his case to an independent body that reviews alleged miscarriages of justice.
ASIC permanently bans ex AMP adviser
Sarah Kendell – Financial Observer
The corporate regulator has permanently banned a former authorised representative of AMP Financial Planning from the financial services industry.
China calls for reining in risks in surging bitcoin market; China currently has more than one million bitcoin investors with total investments of several billions of yuan, says Xinhua
Jane Li – South China Morning Post
China’s official Xinhua News Agency has called for reining in the risks from bitcoin trading even though trading volume of the virtual currency in Chinese yuan has dropped from 95 per cent to 15 per cent this year in the global market, an indication that Chinese authorities’ regulatory efforts are paying off.
Bankruptcy code can help deepen bond markets: SEBI chief; The bankruptcy law was enacted to ensure time-bound settlement of insolvency and enable ease of doing business as the bad loans in the banking system has touched the roof.
Capital markets regulator SEBI chairman Ajay Tyagi today expressed hope that the Insolvency and Bankruptcy Code (IBC) will help boost investor confidence and encourage fund inflows into the corporate bonds market, especially in low-rated instruments.
ISDA calls for EU-CCP relocation transitional period; ISDA urges EU and UK policy makers to implement transitional period to reduce complexity and costs to market participants.
By Hayley McDowell – The Trade
The International Swaps and Derivatives Association (ISDA) has urged policy makers to implement a transitional period should clearing be relocated once the UK exits the European Union.
Brexit – CCP Location and Legal Uncertainty
VM Rules: Almost There
Six months ago, the industry was facing the possibility of real disruption. With the variation margin ‘big bang’ set for implementation on March 1, but with only a fraction of the necessary changes to documentation completed, there was a very material risk that a large part of the market wouldn’t be able to trade.
Investing and Trading
Investors Pull Back From Gundlach’s Biggest Fund at DoubleLine; Assets under management at the fund have dropped 13% from their peak last September to $53.6 billion
Gregory Zuckerman and Kirsten Grind – WSJ
Jeffrey Gundlach built one of the most successful new bond funds ever, amassing $61.7 billion of assets at the DoubleLine Total Return Bond Fund over just six years.
More companies sell bonds to fund pension obligations; Corporate treasurers take advantage of low borrowing costs and 35% tax deduction
Eric Platt in New York – FT
A number of companies are selling bonds and taking advantage of low borrowing costs to support their retirement obligations as corporate treasurers anticipate US tax reform in 2018.
How a shortage of coins precipitated a depression in 15th century England
Wary that debtors wouldn’t find coins to repay them, lenders rationed loans and created a credit crisis, writes Matthew Frank Stevens
London School of Economics and Political Science
It’s a disaster! All the big city lenders are scaling back, or outright refusing to lend. Major players are going bust. Overseas markets are collapsing. Regional distributors can’t get sufficient credit. Goods are piling up in warehouses. People are crying out to parliament for a major cash injection. New restrictive, even pernicious, lending practices are emerging. The economy is spiralling into to the depths of a lasting economic slowdown. At a glance this seems a recent and familiar story, but year is not 2008, it is c.1422, the low ebb of currency supply in medieval England.
VIX ETFs: Trading Like Hot Cakes; Bets on stock-market volatility are gobbling up a record share of U.S. stock trading
Chris Dieterich – WSJ
Bets on stock-market volatility are gobbling up a record share of U.S. stock trading.
John Authers: US stock valuations have been inflated by the Fed; Financial Times columnists pick their charts of the credit crisis on the decade anniversary
John Authers – FT
If you want to understand the bizarre decade that markets have experienced since the financial crisis, you cannot do better than to look at the S&P 500 ó the main index for US stocks ó compared to the expansion in the Fed’s balance sheet.
A global measure of uncertain economic times
Chuck Burke – Chicago Booth Review
Uncertainty about a nation’s economic policies can influence both politics and financial markets, and the effects often spread beyond the country’s borders. Building on his research with Northwestern’s Scott R. Baker and Stanford’s Nick Bloom measuring policy uncertainty in the world’s major economies, Chicago Booth’s Steven J. Davis has constructed an index that combines data from 18 countries to provide a global measurement of uncertainty from 1997 to present. Starting with each country’s index, which mines local news reports for keywords that indicate a level of concern from businesses and households about economic policy,
ECB’s bond shortage dilemma sharpens as inflation slows; Traders will scrutinise Jackson Hole central bankers’ gathering for policy signals
Kate Allen in London and Claire Jones in Frankfurt – FT
The European Central Bank may have little choice but to wind down its EUR2tn bond-buying programme next year ó whether eurozone inflation picks up, or not.
Bank of England’s Andy Haldane goes on tour of the UK; Outspoken chief economist cannot understand an economy ‘sat in London’ all the time
Gavin Jackson in Leicester – FT
If you have ever wanted to ask the Bank of England’s most senior economist why you should trust that a £5 note will keep its value, or just explain exactly where you think the British economy is going wrong, you might soon have your chance.
Goldman Sachs gets approval for Saudi equities trading license
Tom Arnold and Katie Paul – Reuters
Goldman Sachs (GS.N) received approval on Sunday to trade equities in Saudi Arabia, joining the growing band of western investment banks and fund managers expanding in the kingdom.
T. Rowe Price to pay for research ahead of MiFID II; T. Rowe Price follows JP Morgan Asset Management and Vanguard in its decision to absorb the costs of research.
By Hayley McDowell – The Trade
T. Rowe Price is the latest firm to confirm it will pay for external, third-party research ahead of MiFID II’s unbundling requirements.
Banks could unwind non-compliant derivatives contracts; Banks may be forced to cancel trades with clients executed after 1 March if their collateral agreements had not been re-negotiated.
By Joe Parsons – The Trade
Banks could be forced to unwind thousands of non-cleared derivatives trades with clients that have not been amended to meet the variation margin rules, Wall Street’s derivatives trading body has warned.
Hong Kong’s role in the yuan’s ongoing journey to achieve global prominence
Karen Young – South China Morning Post
As a finance professional working in Hong Kong for the past two decades, John Tan Ming-kiu never dreamed he would end up dealing with Beijing regulators, nurture a Taiwanese banking franchise, or see the dim sum bond market kick off.
China to strengthen oversight of ‘regulatory arbitrage’: central banker
China will strengthen oversight of arbitrage that takes advantage of uncoordinated regulations and increase penalties to try to prevent structural risks from getting out of control, a senior central banker said.
‘Hard’ Brexit offers ‘£135bn annual boost’ to economy
Removing all trade tariffs and barriers would help generate an annual £135bn uplift to the UK economy, according to a group of pro-Brexit economists.
UK to release tranche of Brexit position papers
Britain will issue a cluster of new papers this week to outline its strategy positions in divorce talks with the European Union, ranging from regulation of goods to data protection, the UK’s Brexit department said on Sunday.
Google Searches for Ways to Boost News Subscriptions; Tech giant testing tools, including shared data and new payment options, with publishers
Jack Nicas – WSJ
Google is working on new tools to help news organizations sell subscriptions, a move that could help ease its strained relationship with publishers.