Breaking News

LSE’s Rolet quits; Regulators look to shine more light on Treasury market; City closes ranks over Rolet

First Read

Jim Kharouf Resigns as CEO of John J. Lothian & Company, Inc.; Will Continue Work with Company in Freelance Role

Jim Kharouf is stepping down as CEO of John J. Lothian & Company, Inc. at the end of the year after having assumed the role on January 1, 2017. Kharouf is leaving the company as an employee, but will continue to work with John Lothian News and John Lothian Productions as an independent contributor. He will also be exploring his own bespoke initiatives, including in the Fintech sector.

Despite accomplishing much during his tenure at the company and as CEO, Kharouf is departing after philosophical differences with Executive Chairman John Lothian over the direction of the firm and management issues.

“Jim Kharouf did an excellent job as CEO and is one of the most talented journalists I have ever known,” Lothian said. “This new phase in our relationship will allow him to continue to apply his considerable talents as a multi-media journalist to our products and services, while also relieving him of the burden of managing the company. Additionally, this frees him to explore and develop his own entrepreneurial ideas.”

“Change is not a bad thing,” Kharouf said. “Sometimes you try new things and they work and sometimes they don’t work as well as you plan them. In our case, we did what good companies do, we adjusted and pivoted in another, positive direction. Ultimately, we’re aiming for a win-win here in terms of management and content.”

Kharouf is one of the most experienced financial journalists in financial markets, with more than 20 years covering the derivatives and securities space and more than 25 years as a journalist, editor and media executive. He has worked with John Lothian since 2006 when they co-founded the Environmental Markets Newsletter (later renamed JLN Environmental/Energy). He began working full-time with John Lothian News in 2008. Over the past 11 years, Kharouf has helped launch, manage and oversee key editorial properties such as Marketswiki, MarketsReformWiki and the John Lothian newsletters.

He also helped spearhead the expansion of editorial video division, John Lothian Productions, with Patrick Lothian, head of video production for the firm. Kharouf also helped create the format for Marketswiki Education with John Lothian, the international educational event series aimed at educating, informing and inspiring the next generation of professionals in the financial markets.

“Jim has grown tremendously as a journalist during our time together and this new relationship allows him to apply those skills to initiatives of his own,” Lothian said. “We look forward to fully supporting him in any way we can.”

“We are grateful for Jim’s years of service on behalf of the entire company. I can’t say enough good things about Jim as a person and professional. He has been a great example to all our employees of someone growing personally and professionally while an employee of JJLCO.”

“John Lothian is a powerful voice in the industry and will continue to be so with his John Lothian Newsletter, JLN Options, Marketswiki and Marketswiki Education,” Kharouf said. “He will continue to build the company which he started 17 years ago. It is a unique model in the media space, and one of the most trusted sources of news and information in the financial markets globally. That will certainly continue.”

John Lothian will return to the role of CEO in addition to his other roles. Lothian continues to own 100% of John J. Lothian & Company, Inc.

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Hits & Takes
JLN Staff

Oxford University is set to issue its first ever bond. Since it’s 2017 and we live in interesting times, it’s expected to have a 100-year duration. I’m not sure if it’s another effect of grade inflation, but Moody’s gave Oxford the top Aaa rating.~SD

Need more proof that there will indeed be an ETP for everything? ProShares just launched two “retail disruption ETFs.” One is long online companies and short companies that derive the majority of their revenue from physical stores while the ETF is just called the “Decline of the Retail Store ETF.” That product is just short exposure via swaps to the “Solactive-ProShares Bricks and Mortar Retail Store Index.”~SD

Asia Pacific Financial News from John Lothian News – November 28, 2017~JJL

Yesterday’s JLN Options newsletter can be found here.~SD

HKEX is expanding its presence in Asia with the opening of a new office in Singapore today! Chief Executive Charles Li was there along with 200 guests. He said the Belt and Road Initiative and fintech are both tremendous growth opportunities. Via LinkedIn.~JJL

Coal generates 24 percent of Europe’s power, but 76 percent of its emissions.~SD

 

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Xavier Rolet dedicates lifetime achievement award to LSE colleagues in a tweet
Courtney Goldsmith – City AM
Praise has already started pouring in for Xavier Rolet, who stepped down as the chief executive of the London Stock Exchange (LSE) Group today.
/goo.gl/YHQfz8

***** Best of luck and wishes for what comes next for Xavier. Thank you for your service to LSE and the markets.~JJL

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Tuesday’s Top Three
No surprise on our end that the WSJ’s Bitcoin’s Trading Star Is Chicago High-Speed Firm That Nods to the Grateful Dead, about DRW’s Cumberland Mining, was the top clicked story yesterday. Second was a CME profile on Lee Stern – Meet The World’s Longest Serving Futures Trader. In a fun twist, our third most clicked was a link to the Grateful Dead song that Cumberland Mining derives its name from – Cumberland Blues.

 

MarketsWiki Statistics Sponsored by Level Trading Field
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Lead Stories

CEO quits as LSE tries to draw line under management row
Huw Jones – Reuters
London Stock Exchange (LSE.L) CEO Xavier Rolet is stepping down immediately and its chairman will not seek re-election, as the exchange tries to draw a line under a row with a top shareholder over management succession.
/goo.gl/Gtp6eX

****SD: Also see Reuters’ BoE’s Carney ‘mystified’ by CEO spat at London Stock Exchange and the FT’s Rolet quits as London Stock Exchange chief after power struggle

Regulators look to shine more light on U.S. Treasury market
Jonathan Spicer and John McCrank – Reuters
Regulators on Tuesday signaled some desire to raise the curtain on the $14 trillion market for U.S. Treasury debt, suggesting investors and the public could soon take a look at a vast and potentially valuable pool of Wall Street trading data.
reut.rs/2icjoNq

The City establishment closes ranks over Xavier Rolet; Mark Carney forced the resolution of an alarming dispute at London Stock Exchange
John Gapper – FT
It was a bizarre dispute but it was settled in a traditional City of London manner. Xavier Rolet’s departure as chief executive of the London Stock Exchange Group, despite a fierce hedge fund effort to keep him, was achieved by an implacable board of directors, backed by the governor of the Bank of England, Mark Carney.
/goo.gl/v3bRVs

HKEX Expands Its Presence In Asia With An Office In Singapore
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today (Wednesday) expands its presence in Asia with the opening of the Singapore office of The Stock Exchange of Hong Kong Limited (SEHK) and the Hong Kong Futures Exchange Limited (HKFE), wholly-owned subsidiaries of HKEX.
/goo.gl/nnf8Cq

Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says
Kevin Costelloe – Bloomberg
Nobel Prize-winning economist Joseph Stiglitz said “bitcoin is successful only because of its potential for circumvention, lack of oversight.”
/goo.gl/bHo9Mh

Hackers Now Have Incredibly Sophisticated Ways to Breach Banks’ Defenses
Gavin Finch – Bloomberg
Threat has increased rapidly in past 18 months, report says; SWIFT and BAE Systems say banks must build ‘in-depth’ defenses
Global banks need to do more to protect themselves from cyberattacks after a “significant evolution” in the threat level in the last 18 months, according to the SWIFT global payments network.
/goo.gl/QuswQ7

Exclusive: Britain and the EU agree Brexit divorce bill
Peter Foster – The Telegraph
British and EU negotiators have reached a deal over the so-called Brexit bill, opening the door to a potential breakthrough in the talks this December, the Telegraph has learned.
/goo.gl/J8VWTY

Trump Team to Recommend Keeping Dodd-Frank Liquidation Power; Treasury Department to propose tweaking, not scrapping, orderly liquidation authority, a win for backers of Dodd-Frank
Ryan Tracy – Bloomberg
The Trump administration doesn’t plan to recommend stripping regulators of their power to seize and unwind a failing financial firm in a crisis, according to people familiar with the matter, a development likely to make defenders of the 2010 Dodd-Frank financial law breathe a sigh of relief.
/goo.gl/kNGGue

Satellites and sensitive sheep blur insider trading; Technology creates a regulatory minefield and demands a revamp of reporting requirements
Stuart Kirk – FT
A key moment in the history of insider trading rules was the discovery in 1959 of a possible ore deposit in Ontario by the Texas Gulf Sulphur Company. When the find eventually became public five years later, scores of employees (and their relatives and friends) became rich. The Securities and Exchange Commission sued and won. A court agreed that “all investors should have equal access to material information”.
/goo.gl/onqjhp

Exchanges, OTC and Clearing

EuroCCP chief executive to stand down
Samuel Agini – Financial News
The chief executive of EuroCCP and a driving force behind the development of Europe’s market infrastructure over the last decade is stepping down.
/goo.gl/EB8n7N

LSE bites back at ‘damaging’ investor as Xavier Rolet departs early
Lucy Burton – Telegraph
The London Stock Exchange has launched an extraordinary attack on one of its biggest investors in a bitter row that has resulted in boss Xavier Rolet leaving “with immediate effect”, a year earlier than planned.
/goo.gl/8meSzT

LSEG’s Rolet steps down with immediate effect; Xavier Rolet departs immediately due to “great deal of unwelcome publicity, which has not been helpful to the company”.
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) chief executive officer has stepped down from his position with immediate effect, after weeks of controversy around his decision to leave.
/goo.gl/NxVK4i

HKEX establishes new office in Singapore; New office in Singapore is opened as HKEX looks to expand its presence in South-East Asia.
By Hayley McDowell – The Trade
Hong Kong Exchanges and Clearing (HKEX) has opened a new office for The Stock Exchange of Hong Kong (SEHK) in Singapore in a bid to expand its presence in Asia.
/goo.gl/3qzBiS

London Stock Exchange C.E.O. Rolet to Step Down Immediately
By CHAD BRAY – NY Times
The London Stock Exchange Group said on Wednesday that Xavier Rolet, its chief executive, would step down immediately, amid a public fight with a major investor who claimed Mr. Rolet was being forced out.
/goo.gl/8v9pGf

An Embarrassment to London
By Chris Hughes – Bloomberg
It was always going to be hard for Xavier Rolet to leave London Stock Exchange Group Plc on a high. No-one thought he would be leaving during a crisis.
/goo.gl/trAv5b

Backfiring LSE campaign shows pitfalls of public activism
By David Wighton – Financial News
When the Governor of the Bank of England says you have to go, you really have to go. It always seemed extremely unlikely that Sir Chris Hohn would succeed in his campaign to extend Xavier Rolet’s stay as chief executive of the London Stock Exchange Group. But after Mark Carney’s comments on Tuesday it was inconceivable.
/goo.gl/cD9qcB

Xetra-Gold celebrates its 10th birthday; Europe’s largest gold security with physical deposit; Rapid increase to more than 170 tons of gold; Bavaria and Hesse are particularly willing to deliver Xetra-Gold
Deutsche Bˆrse Group
Xetra-Gold, Europe’s leading gold-backed security, is celebrating its 10th anniversary. On this occasion, trading on the Frankfurt Stock Exchange opened today with the ringing of the stock market bell. After a recent significant increase in gold demand from private and institutional investors, more than 170 tons of Xetra gold worth more than six billion euros are currently stored in the German central safe depository for securities in Frankfurt. At the beginning of 2016, the portfolio was still at 59.25 tonnes.
/goo.gl/XVjJsS

STOXX changes composition of benchmark indices; Results of the fourth regular quarterly review to be effective Dec. 18, 2017
Deutsche Bˆrse Group
STOXX Ltd., the operator of Deutsche Boerse Group’s index business, and a global provider of innovative and tradable index concepts, today announced the new composition of STOXX Benchmarks and their sub and sector indices, among them the STOXX Europe 600 Index, STOXX North America 600 Index and STOXX Asia/Pacific 600 Index.
/goo.gl/cNyZTX

Finalists announced for the Deutsche Bˆrse Photography Foundation Prize 2018
The shortlist artists are: Mathieu Asselin, Rafal Milach, Batia Suter and Luke Willis Thompson; The four finalists for the Deutsche Bˆrse Photography Foundation Prize 2018 are Mathieu Asselin, Rafal Milach , Batia Suter and Luke Willis Thompson .
Deutsche Bˆrse Group
The works of this year’s finalists critically question the production and manipulation of knowledge and political systems with very different stylistic approaches and visual formats. On the one hand, the projects involve a sharp examination of the biotech giant Monsanto (Asselin), an examination of the seemingly harmless methods of state influence and propaganda (Milach), an encyclopaedic collection of visual associations that illustrate how the relative Suter, as well as a very moving cinematic study on grief dealing with the personal consequences of visual representation and media dissemination (Willis Thompson).
/goo.gl/9sPwdQ

Nasdaq Wins Best Clearing Technology of the Year by Risk.net
By GlobeNewswire
The Market Technology business of Nasdaq (Nasdaq:NDAQ) has won ‘Best Central Counterparty Clearing Support Product of the Year’ awarded by Risk.net. The winning entry focused on the Nasdaq Financial Framework. The solution, originally launched in 2016, incorporates the world’s leading multi-asset and real-time clearing, settlement and risk management. It represents a harmonized approach to delivering robust post-trade capabilities in an open, agile environment.
/goo.gl/zZyZEw

SGX proposes to make securities settlement and clearing safer and aligned with global practices
SGX
Singapore Exchange (SGX) plans to make changes in the clearing and settlement of securities in the Singapore stock market.
/goo.gl/71v6QT

Fintech

IPC Collaborates With The Japan Exchange To Provide Low-Latency Connectivity Between JPX And Chicago
Mondovisione
IPC, a leading global provider of secure, compliant communications and networking solutions for the financial markets community, today announced the launch of a new managed service in collaboration with Japan Exchange Group, Inc. (JPX) which will provide a one-stop-shop to for international connectivity between JPX and the financial markets in Chicago.
/goo.gl/4qDCj4

How machine learning creates new professions ó and problems; Leaders face an explosion in demand for knowledge and skills
Richard Waters – FT
It is not often that a new profession springs up almost overnight. It is also unusual for many of the people who find their way into this new field to do it without the formal training provided by the normal institutions of higher education.
/goo.gl/yXzf8v

Bitcoin breaks through $10,000 as appeal grows; Moves to bring cryptocurrency into mainstream financial system fuel sharp price rise
Chloe Cornish in San Francisco – FT
It has been branded “a fraud” by its critics, and its sharp price rise during 2017 has been likened to the 17th century tulip craze. But love it or hate it, bitcoin has defied naysayers and delighted proponents by breaking through the $10,000 price barrier ó a more than tenfold increase in value over the course of this year.
/goo.gl/RERLoJ

How business schools teach cryptocurrencies; Students and executives want an education in bitcoin and others
Martin Arnold in London – FT
David Yermack is a man in great demand. In 2014, the professor of finance at the NYU Stern School of Business helped it become the first major university to launch a course in the nascent field of blockchain and cryptocurrencies.
/goo.gl/doZHKC

Drivers and risks of the cryptocurrency boom;Bitcoin’s surge past $10,000 reflects investor mania seen by some as a bubble
Hannah Murphy – FT
The mushrooming prices of cryptocurrencies are prompting volatility-starved investors to examine ways to join the biggest speculative boom since dotcom fever.
/goo.gl/vfusdo

The U.S. Supreme Court on Wednesday takes up a major test of privacy rights in the digital age as it weighs whether police must obtain warrants to get data on the past locations of criminal suspects using cellphone data from wireless providers.
/goo.gl/GBBepe

Podcast: CFTC Talks EP018: Barry Ritholtz, CIO and Chairman Ritholtz Wealth Management
CFTC
#CFTCTalks has Bloomberg view contributor and blogger at The Big Picture, Barry Ritholtz, on to talk markets and big…
/goo.gl/RydZ1p

The Internet Is Dying. Repealing Net Neutrality Hastens That Death.
Farhad Manjoo – NY Times
Sure, technically, the internet still works. Pull up Facebook on your phone and you will still see your second cousin’s baby pictures. But that isn’t really the internet. It’s not the open, anyone-can-build-it network of the 1990s and early 2000s, the product of technologies created over decades through government funding and academic research, the network that helped undo Microsoft’s stranglehold on the tech business and gave us upstarts like Amazon, Google, Facebook and Netflix.

Politics

The unfortunate exit of an exemplary Fed chair; Janet Yellen has set policy wisely and managed the institution well
FT View
The Federal Reserve can take some blame for failing to see risks building up in the years preceding the global financial crisis. But perhaps more than any other major policymaking institution in the world, the Fed has acquitted itself well in the decade since.
/goo.gl/8ShcYs

Trump Once Said the ‘Access Hollywood’ Tape Was Real. Now He’s Not Sure.
Maggie Haberman and Jonathan Martin – NY Times
Shortly after his victory last year, Donald J. Trump began revisiting one of his deepest public humiliations: the infamous “Access Hollywood” tape of him making vulgar comments about women.
/goo.gl/7D8fXB

Donald Trump is going to build a big, beautiful deficit and rely on China to help pay for it
Andrew Van Dam – Washington Post
Republicans’ tax plans are going to clash headfirst with President Trump’s anti-China, anti-trade-deficit rhetoric. It’s just simple economics.
/goo.gl/vTC995

Regulation

Celebrity Influencers Now Causing Trouble With … Investments?
Jesse Brody, Manatt Phelps and Phillips LLP – Lexology
While the Federal Trade Commission has previously cautioned celebrities and social media influencers about failing to disclose a material connection between an endorser and a product, the Statement from the SEC’s Division of Enforcement and Office of Compliance Inspections and Examinations presents a new wrinkle.
bit.ly/2ie7L8z

U.S. Probe of Malaysian Fund Looks at Rap Star’s Political Donations; Investigators want to know if there was an agreement to back Obama between Pras Michel, of the Fugees, and Malaysian financier Jho Low
Bradley Hope and Tom Wright – WSJ
The Justice Department is investigating more than $1 million of political donations by rap star Pras Michel during the 2012 presidential campaign, after evidence emerged that he received $20 million in gifts around the same time from a Malaysian financier linked to a global fraud scandal, people familiar with the investigation said.
/goo.gl/1hjQBx

Bank rules are ‘tough enough’, says Jay Powell; Trump’s pick as Fed chair signals end to era of tightening financial regulation
Sam Fleming in Washington – FT
Donald Trump’s nominee to chair the Federal Reserve has signalled an end to the era of ratcheting up regulation on US banks, saying the existing rules were “tough enough” to ensure a stable system and that there were ways to tailor the regime.
/goo.gl/BGf4ez

Regulators Open to Making Treasury Market Data Public; Officials weigh benefits of releasing the information
Gabriel T. Rubin – WSJ
U.S. regulators said Tuesday they were considering releasing to the public some of the data on the $14 trillion U.S. Treasury market that they have been collecting since this summer, but no decision was imminent.
/goo.gl/Aa67Ta

NY Fed chief Dudley backs public reporting of Treasury trades
Joe Rennison – FT
The president of the Federal Reserve Bank of New York has offered his support for the introduction of public reporting of treasury transactions.
/goo.gl/igdS51

FINRA Requests Comment on the Effectiveness and Efficiency of Its Payments for Market Making Rule
FINRA
FINRA is conducting a retrospective review of the rule governing payments for market making to assess its effectiveness and efficiency. This Notice outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with this specific rule.
/goo.gl/dEVWu9

Upgrade to Transport Layer Security Version
FINRA
Effective Monday, March 5, 2018, the FINRA TRACE, ADF and ORF Web API reference data download files will no longer be accessible using the Transport Layer Security (TLS) 1.0 protocol. FINRA will disable TLS 1.0, and firms using that protocol will not be able to establish connectivity to FINRA’s secure web servers to download the files. To gain access to the FINRA API reference data downloads, firms must migrate to TLS versions 1.1 or 1.2 by March 5, 2018. If possible, firms should use the most current version, TLS 1.2.
/goo.gl/dMCUKt

Investing and Trading

ETF Buyers Make Same Mistake That Led to Crisis, Regulator Says
Dani Burger – Bloomberg
Investors relying on diversification not due diligence: IOSC; Secretary general of market regulator speaks at conference
Investors are getting blasÈ with their choices of exchange-traded funds, according to the lead international body for securities regulation.
/goo.gl/vSVXrF

Bitcoin and the Fear of Missing Out
Lionel Laurent – Bloomberg
Everyone, from the Uber driver to the hedge-fund manager, appears to be afraid of missing out on the Bitcoin bubble.
/goo.gl/4xEB64

Million-Barrel Oil Hedging Surge Signals Shale Boom Here to Stay
Alex Nussbaum – Bloomberg
Protection grew most since Wood MacKenzie started tracking; New contracts cover annualized 897,000 barrels a day of output
Oil explorers took advantage of a market rally to lock in prices for almost 1 million barrels a day’s worth of future output, signaling the shale boom’s staying power as OPEC ponders the extension of its supply curbs.
/goo.gl/RBMdBG

Why Investors Are Unfazed by North Korea’s Missile Launch
Heejin Kim, Abhishek Vishnoi and Adam Haigh – Bloomberg
Kospi advances as much as 0.4%, while won strengthens; BOK policy meeting, GDP data this week matter more, they say
North Korea launched an intercontinental ballistic missile near Japan, but investors and analysts were unfazed by the latest provocation.
/goo.gl/QtVxKL

Oxford University is planning to issue its first-ever bond
Ciara Linnane – MarketWatch
Storied university is tapping the capital markets as the U.K. government cuts funding following tuition hikes
Oxford University, alma mater to a raft of U.K. prime ministers, former U.S. President Bill Clinton and Nobel Prize – winning physicist Albert Einstein, among countless notables over its nine centuries of history, is planning its first-ever bond issue, and it can expect to price it on good terms.
/goo.gl/KXmEkD

Bitcoin Blasts to Record $10,000 as Bubble Warnings Multiply
Julie Verhage – Bloomberg
Bitcoin surpassed $10,000 for the first time and continued higher, taking this year’s price surge to 11-fold even as warnings multiply that the largest digital currency is an asset bubble.
/goo.gl/6qXFxw

Influential mining investor calls for stronger cash returns; Blackrock’s Evy Hambro says big miners have it in their power to heal old wounds
Neil Hume, Commodities and Mining Editor – FT
Evy Hambro, Blackrock’s chief investment officer for natural resources, says the mining industry can regain the trust of investors and achieve higher stock market ratings if it steps up cash returns.
/goo.gl/6UMNd8

ECB bond buying transforms universe of top tier debt; Sheer volume of purchases has placed huge downward pressure on yields
Thomas Hale – FT
The ramifications of the European Central Bank’s massive bond purchases in recent years register acutely for insurance companies and pension funds alongside other traditional buyers of top tier debt.
/goo.gl/LhJmeb

Opinion: Why it’s now time to break from the stock market’s herd
Richard L. Peterson – MarketWatch
“Rip Van Winkle would be the ideal stock market investor,” Richard Thaler, the Nobel prize-winning behavioral economist, points out. He adds: “Rip could invest in the market before his nap and when he woke up 20 years later, he’d be happy. He would have been asleep through all the ups and downs in between. But few investors resemble Mr. Van Winkle. The more often an investor counts his money – or looks at the value of his mutual funds in the newspaper – the lower his risk tolerance.”
/goo.gl/KE3tWf

How to Avoid the Holiday Debt Trap
Kaitlyn Kiernan – FINRA
There’s no escaping the aftermath of too much holiday cheer, whether it’s a few extra pounds or the dreaded hangover. Binging on gifts and entertaining can leave a lasting pain, too: credit card debt.
/goo.gl/GSpoNc

Institutions

Wells Fargo Is Dubbed a Repeat Offender and Faces New Wrath From Its Regulator; Bank was asked to respond on irregularities in its auto-insurance and mortgage-lending units
Gretchen Morgenson and Emily Glazer – WSJ
A federal regulator has advised Wells Fargo WFC 3.00% & Co.’s board of directors that it is weighing a formal enforcement action against the bank over improprieties in its auto-insurance and mortgage operations.
/goo.gl/zqiDQq

Nomura reopens private equity business; Move comes amid PE-led boom in investment in Japanese companies
Leo Lewis in Tokyo – FT
Nomura is planning to revive its shuttered private equity business in a bet that ageing demographics, economic migration and competitive pressure will propel Japan into a new era of divestment, restructuring and management buyouts.
/goo.gl/FEiSwN

Vanguard Is Finally Bringing Its Active Smart Beta ETFs to the U.S.
Dani Burger – Bloomberg
Better late than never. After years of internal debate, Vanguard Group has taken one of the final steps necessary to sell its first smart beta exchange-traded funds in the U.S. The Valley Forge, Pennsylvania-based firm registered seven actively managed factor funds with the Securities and Exchange Commission that are expected to begin trading in the first quarter of 2018, according to a company statement Tuesday.
/goo.gl/nq6qgA

Barclays Warns Half of Bankers Are at Risk of Pay Cuts
Stephen Morris – Bloomberg
Investment bank CEO wants more differentiation in compensation; Throsby joined in January to turn around worst-performing unit
Barclays Plc’s top investment banker has told staff he’ll sharpen divisions in bonuses this year, boosting pay for top performers while cutting it for those in the bottom half, people familiar with the comments said.
/goo.gl/qk4smT

Goldman Warns Highest Valuations Since 1900 Mean Pain Is Coming
Chris Anstey – Bloomberg
Returns likely to be lower across all assets in medium term; Risk scenario sees inflation jump that ushers ‘fast pain’
A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.
/goo.gl/jkBSDC

Soros Sons to Back New Hedge Fund From Ex-Soros Manager
Katia Porzecanski – Bloomberg
Fund is planned to start trading with maximum of $250 million
Jonathan and Robert Soros to invest in the long-short fund
Santiago Jariton, a former money manager at George Soros’s family office, is planning to start a hedge fund focused on stock bets in Latin America with anchor investments from two of the billionaire’s sons, according to people familiar with the matter.
/goo.gl/jncf8c

Ex-JPMorgan Traders Start Singapore Currency Options Quant Fund
Chikafumi Hodo and Komaki Ito – Bloomberg
Ogaki and Loh to start with $75 million in seed capital; Model tests returned annualized 12.7% gain over past decade
Two former JPMorgan Chase & Co. foreign-exchange option traders will start a quantitative hedge fund in January, using artificial intelligence to trade currency options.
/goo.gl/L6aoue

Maybe Investment Banking Isn’t HSBC’s Thing
Nisha Gopalan, Elaine He – Bloomberg
HSBC Holdings Plc just can’t seem to crack Wall Street.The latest piece of evidence? Matthew Westerman’s departure, less than two years after he was recruited from Goldman Sachs Group Inc. as co-head of global banking.
/goo.gl/KRuH5r

Regions

The Odyssey of a Turkish Trader Now Spilling His Secrets in U.S.
Greg Farrell and Christian Berthelsen – Bloomberg
Zarrab, after two arrests, details Iran sanctions scheme; Pop-star wife, Bond-style toys and an ill-fated Disney trip
Turkish customs agents set off a half decade of intrigue when they boarded a plane that landed unexpectedly at Istanbul’s international airport. They found in the hold, undeclared, a ton and a half of gold.
/goo.gl/2twmJ9

Saudi Prince Released After $1 Billion Deal, Official Says
Alaa Shahine – Bloomberg
Prince Miteb agreed to pay settlement in corruption probe; Saudi crown prince said most graft suspects agreed to settle
Bloomberg’s Zainab Fattah discusses the corruption probe in Saudi Arabia.
Prince Miteb bin Abdullah, one of the most senior Saudi royals detained in the kingdom’s corruption crackdown, has been released after reaching a settlement deal believed to exceed the equivalent of $1 billion, an official involved in the anti-graft campaign said.
/goo.gl/CoFSBi

North Korea claims missile puts all of US in range; Launch of Hwasong 15 makes ‘state nuclear force’ complete, says Kim Jong Un
Bryan Harris in Seoul and Courtney Weaver in Washington – FT
North Korea on Wednesday claimed the successful launch of a new advanced ballistic missile that it said placed the entire US within range.
/goo.gl/LzzBn1

HNA puts $40bn global buying spree into reverse; Chinese group for first time acknowledges it is considering asset sales
FT Reporters
HNA Group has signalled that it is kicking into reverse its $40bn global buying spree, as the Chinese conglomerate finds itself under the microscope by mainland regulators.
/goo.gl/rQJxsC

New Bank of Mexico head seen as safe pair of hands; Alejandro DÌaz de LeÛn takes helm from AgustÌn Carstens ahead of potentially tough year
Jude Webber in Mexico City – FT
Alejandro DÌaz de LeÛn, deputy governor of the Bank of Mexico and considered a rising star in the country’s financial firmament, has been named to the top job, replacing AgustÌn Carstens who is moving to Basel to run the Bank for International Settlements.
/goo.gl/vgSLzd

Brexit

UK bows to EU demands with breakthrough offer on Brexit bill; Britain agrees total liabilities worth EUR100bn but will aim to pay less than half
Alex Barker in Brussels and George Parker in London – FT
Britain has bowed to EU demands and agreed to fully honour its financial commitments as identified by Brussels, removing one of the biggest obstacles to a Brexit divorce settlement.
/goo.gl/NKQrJy

U.K. and EU Agree on Outline Brexit Bill as Irish Block Remains
Nikos Chrysoloras and Ian Wishart – Bloomberg
Negotiators said to have agreed outline deal on divorce bill; Thorny question of Irish border still remains to be solved
U.K. and the European Union negotiators reached an outline deal on the Brexit divorce bill, clearing a hurdle in negotiations and ramping up pressure to find a compromise on the thorny issue of the Irish border. The pound surged.
/goo.gl/KXD7hd

Gilt Traders Should Remain Wary of Brexit Risks, Scotiabank Says
Charlotte Ryan – Bloomberg
Bank says yield curve may steepen on no-deal, Corbyn election; Brexit and Corbyn ‘both pretty scary’ for markets: Investec
While news of a potential breakthrough in Brexit talks on the U.K.’s divorce bill to leave the European Union may have calmed some nerves, gilt investors shouldn’t get too complacent about the risks.
/goo.gl/pdZKSh

20 New Residential Towers Are Being Built in Frankfurt Because of Brexit Demand
Stephan Kahl – Bloomberg
Condominium prices increased by 15% in 2017, new study finds; Germany’s highest residential building to be completed by 2019
The prices for new condominiums in Frankfurt have now reached such a high level that it pays off for project developers to build high-rise residential buildings and more and more such towers are being built in the German financial capital. This emerges from an assessment by consulting company Bulwiengesa AG.
/goo.gl/RXbKZS

Miscellaneous

Taking One for the Team: Companies Foster Collaboration; Collaboration is good for business but is seldom easy; how companies shed silos and get employees communicating.
Sue Shellenbarger – WSJ
More companies are asking employees from different departments to collaborate on projects. But dragging people out of their silos isn’t easy. How do you get aggressive, fast-talking salespeople to cooperate with reserved, detail-oriented engineers? Or intuitive creative types to sync with budget-minded planners?
/goo.gl/b77q3L

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Graduate of University of Minnesota School of Journalism and Mass Communication