Breaking News

Bond Investors Are Worried About Bond Market Liquidity; Saudi Arabia signs major markets upgrade with Nasdaq

First Read

Hits & Takes
By JLN Staff

The “Putting on my broker hat about bitcoin” commentary by John Lothian had 1778 views on LinkedIn since it was published Friday. ~JJL

The @JohnLothian twitter handle had 46,664 organic impressions on Friday. ~JJL

The story by John Lothian, “FANG+ Puts the UMPH Back into the Markets and Exchange Competition” had 16,605 impressions on Twitter so far and is @JohnLothian’s top tweet of the last month. ~JJL

CME Group is offering a webinar on “The ABC’s of Spread Trading with Futures” on Tuesday, December 12 from 11:00 a.m. to 12:00 p.m. CT. You can register for the webinar here. ~SR

Cboe set a VIX options volume record on Friday when 3.1 million contracts were traded. The previous daily record was 2.6 million contracts. ~SD

The Moscow Exchange will host a Russia investment forum on Dec 6 in London. ~JJL

Question: When bitcoin futures hit the 20% price limit, do the underlying exchanges have the bandwidth to take the extra potential volume? ~JJL

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A New Exchange, a Different Asset Class and a Hearty Dose of Blockchain
Spencer Doar – JLN

Want to see a proper use case for the ever-buzzworthy blockchain?

Look no further than the New York Interactive Advertising Exchange (NYIAX), an exchange for guaranteed advertising contracts that runs on Nasdaq’s technology and deploys the blockchain to track trades, positions and, in the end, streamline reconciliation. On October 10, NYIAX’s product went live and the exchange continues to line up publishers and advertisers to use the platform. Then on October 19, NYIAX announced it had raised $5.6 million in seed capital to support its growth.

“One of the things that excites us the most is that we have intellectual property with Nasdaq that is a long term relationship. It’s not just intellectual property for the advertising industry,” Carolina Abenante, NYIAX’s president and co-founder said. “There are certainly markets that we’re interested in potentially expanding our technology to help with those industries.”

Read the rest HERE.

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The CMW Group Loses Irreplaceable Talent With Kim Taylor’s Retirement
Jessica Darmoni – The Title Connection
My friend Kim announced her retirement from the CME Group on Friday, Dec 1. When I first heard the news, my initial thought was that the CME will lose an irreplaceable and unparalleled talent. As one of the most powerful women in the capital markets, Kim taught me that gender doesn’t matter but rather it’s your hard work that sets you apart.
/goo.gl/zQTdMX

***** I could not agree more with Jessica. Kim Taylor is one of a kind. ~JJL

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The Cost of Devaluing Women
Sallie Krawcheck – NY Times
My first job out of college in the late 1980s was at Salomon Brothers, a trading house of cigar-smoking, expletive-spewing strivers. One day, I leaned over a colleague’s desk to work on a spreadsheet, and heard loud laughter from behind me; one of the guys was pretending to perform a sex act on me. Almost every day, I found a Xerox copy of male genitalia on my desk.
/goo.gl/swEWuF

****** Sallie Krawcheck with a story you must read. ~JJL

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New Whitepaper from Trading Technologies: TT Score -Trade Surveillance with Machine Learning
Trading Technologies
One of the biggest challenges that both regulators and compliance staff face is consistently ensuring that the market participants they supervise stay fully compliant with current market regulations.
/goo.gl/2Ux3ig

****** “Fully compliant” is a funny term. ~JJL

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Bitcoin, EFRPs, Wash Sales, Spoofing
Gary DeWaal – Bridging the Week
After a week of significant volatility, Bitcoin moved a step closer to mainstream acceptance as three exchanges regulated by the Commodity Futures Trading Commission self-certified on December 1 new cash-settled derivatives contracts tied to prices on spot Bitcoin markets. The CFTC declined to stop the self-certifications despite acknowledging, “there are concerns about the price volatility and trade practices of participants in these markets.” According to the Commission, the three exchanges agreed to “significant enhancements” in their original proposals to address the concerns. Separately, CME Group exchanges brought and resolved disciplinary actions involving claims of wrongful trading practices.
jlne.ws/2jM4Rop

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Friday’s Top Three
Our top read story (by far) on Friday was John Lothian’s column about John Lothian the broker and watcher of Bitcoin in Putting on My Broker Hat About Bitcoin. Second went to the The Wall Street Journal article Bitcoin Futures Set to Start Trading as Regulator Gives Thumbs Up, paving the way for Cboe and CME to launch futures contracts on the cryptocurrency. Third went to the The Washington Post’s I’m a Depression historian. The GOP tax bill is straight out of 1929.

 

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Lead Stories

Bond Investors Are Worried About Bond Market Liquidity; No one is around to make sure you can buy or sell at a moment’s notice.
Matt Levine – Bloomberg
Here’s the central intellectual problem in bond market liquidity. Practitioners — bond traders and investors — all go around saying that liquidity in corporate bond trading is bad. If you call up your dealer and ask her to buy a big slug of bonds from you, she will put you on hold and call other customers to see if they’re interested in buying those bonds. If they are, she’ll buy from you and sell to them; if they’re not, there’s no trade. In the good old days she’d just buy them herself and deal with the risk of finding buyers later, but now she is too nervous and capital-constrained and Volcker-limited.
/goo.gl/FmrW3y

Saudi Arabia signs major markets upgrade with Nasdaq
Philip Stafford – FT
Saudi Arabia has signed a deal with US group Nasdaq to upgrade the country’s financial markets infrastructure, another step towards its long-term goal of diversifying its economy.
/goo.gl/9Q8xK7

Bitcoin Heads to Wall Street Whether Regulators Are Ready or Not
Rob Urban and Benjamin Bain – Bloomberg
CME, CBOE futures bring bitcoin to banks it was built to beat; Regulators have struggled to sort out just what bitcoin is
Two U.S. exchanges, including the parent of the venerable Chicago Mercantile Exchange, are racing to embrace bitcoin, dragging federal regulators into a realm skeptics call a fad and fraud.
/goo.gl/kgHNQQ

Digital-Currency Fever May Spread to Federal Reserve; As electronic-payment methods rise in popularity, central bankers ponder whether they might need to get in the game
Michael S. Derby – WSJ
It is time to start thinking about Fedcoin. For years central bankers have seen digital currencies as a curiosity to keep an eye on. But now they are increasingly looking at whether they should create their own.
/goo.gl/FR3RJ9

Banks Build Line of Defense for Doomsday Cyberattack; The Sheltered Harbor project is meant to ensure that every U.S. bank has a protected, unalterable backup that can be used to serve customers in case of a major hack
Telis Demos – WSJ
U.S. banks have quietly launched a doomsday project they hope will prevent a run on the financial system should one of them suffer a debilitating cyberattack.
/goo.gl/rPRUVo

Bitcoin Is the World’s Hottest Currency, but No One’s Using It; As businesses accepting bitcoin payments find few takers, the virtual currency is a long way from its traditional counterparts
Georgi Kantchev, Steven Russolillo, Paul Vigna and Christopher Whittall – WSJ
A three-bedroom house in south London, a vineyard and a “fully vegan” tattoo parlor are among a rush of new businesses offering to accept bitcoin as payment.
/goo.gl/SzaZZL

The 92-Year-Old Woman Who Is Still Shaking Up Wall Street; Law professor Tamar Frankel is considered the intellectual godmother of the fiduciary rule
Jason Zweig – WSJ
Most people measure patience in hours, weeks or months. Tamar Frankel measures it in decades.
/goo.gl/TyBWiQ

Odd Lots: An MIT Professor Explains His Original Theory for How Markets Really Work; Andrew Lo’s evolutionary theory for the market ecosystem.
Tracy Alloway and Joe Weisenthal – Bloomberg
There are two popular schools of thought when it comes to how markets work. There’s the efficient markets hypothesis (EMH) which says that it’s basically impossible to beat the market, because all information is completely priced in at all times (more or less). On the other side is an increasingly popular behavioral view which argues that various human emotions and biases are always creating situations that aren’t justified by the data.
/goo.gl/Twt6Me

Bitcoin Storms Wall Street
ByAvi Salzman – Barron’s
Bitcoin traders have no time to pop the champagne anymore.
The crypto-rocket shot past $11,000 last week just hours after eclipsing $10,000, which itself was mere days after pushing past $9,000. It then slid sharply before surging yet again.
/goo.gl/GbXJTC

Transaction costs could be bitcoin’s downfall; Rising transaction costs are likely to be a good predictor of the next crash in the price of bitcoin, according to CME Group.
Jessica Yun – Investor Daily
Speaking to InvestorDaily, CME Group executive director and senior economist Erik Norland said a crash in the bitcoin market was just a matter of time.
/goo.gl/uRf9y2

Exchanges, OTC and Clearing

Nasdaq just backed away from a controversial data product
Frank Chaparro – Business Insider
Nasdaq, the US exchange operator, filed to withdraw a controversial data product, according to a filing with the Securities and Exchange Commission; Nasdaq Pathfinders helps clients monitor the buying and selling behavior of market participants.
The exchange also requested to withdraw three other data products
Nasdaq appears to be taking a step back in its foray into the world of big data.
/goo.gl/x8M6pS

Saudi Stock Exchange signs post-trade tech deal with Nasdaq; The exchange’s technology overhaul is expected to be completed in the second half of 2020.
Joe Parsons – The Trade
Nasdaq has agreed to revamp the Saudi Stock Exchange’s post-trade technology infrastructure, and will implement new registry, depository and risk management systems.
/goo.gl/uTBGCR

Saudi Stock Exchange will transform its post-trade infrastructure
Nasdaq
Nasdaq to deliver new cash and derivatives clearing, central securities depository (CSD) and post-trade risk management technologies
The Saudi Stock Exchange (Tadawul) and Nasdaq have officially signed an agreement to transform Tadawul’s post-trade technology infrastructure, which includes registry, depository and risk management technologies. In addition to the post-trade area, Nasdaq will continue to support the existing trading and market surveillance technology at Tadawul.
/goo.gl/CtQqTr

CME Rival Cboe Suggests its Coming Futures Market Would Include Bitcoin Cash
Bitcoin.com
Bitcoin Cash (BCH) only months old is being floated as a possible addition to a futures offering family by Cboe Global Markets (Cboe). Cboe is looking to differentiate itself from a growing chorus of rivals as it prepares to launch futures contracts by year’s end.
/goo.gl/RWuPbt

CME Group Reached Average Daily Volume of 18 Million Contracts in November 2017, up 21 Percent from October
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that November 2017 average daily volume (ADV) reached 18 million contracts, down 14 percent from the record November 2016 average daily volume, but up 21 percent compared with October 2017 and representing the second highest monthly average daily volume to date in 2017. CME Group November 2017 options volume averaged 3.5 million contracts per day, down 18 percent versus November 2016, with electronic options averaging 2.2 million contracts per day, down 6 percent from the same period last year. Open interest at the end of November was 123 million contracts, up 9 percent from the end of November 2016.
/goo.gl/9a1YsQ

Second-Best November Is Recorded At MGEX
Mondovisione
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), has recorded the second-highest monthly exchange volume number for November with 245,980 contracts. This number is also 9% greater than last year’s November total.
jlne.ws/2kcU3U7

OneChicago Announces Trading Volume For November 2017
OneChicago
OneChicago, LLC (OCX), a securities finance exchange, today announced its November 2017 volume of 866,510, a decrease of 6% year-over-year. OneChicago is a CFTC and SEC regulated exchange offering Single Stock Futures (SSF), a Delta One product, on approximately 1,800 equities, including ADRs and ETFs.
/goo.gl/NMdLcT

CBOE, CME to jump into bitcoin futures trading
Samantha Bomkamp – Chicago Tribune
Bitcoin futures are coming to Chicago’s two main financial exchanges, allowing investors to bet on price swings of the prevailing digital currency and providing perhaps the biggest validation yet to a financial product that’s still largely unknown by the average consumer.
/goo.gl/sT6X6f

Cboe Plans December 10 Launch of Bitcoin Futures Trading
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today announced that Cboe Futures Exchange (CFE), plans to offer trading in bitcoin futures beginning at 5:00 p.m. CT on Sunday, December 10, 2017, at the start of Global Trading Hours. Monday, December 11, will be the first full day of trading, and trading will be free1 through December.
jlne.ws/2jNs0a3

Activist hedge fund TCI sets out reasons to oust the London Stock Exchange’s chairman Donald Brydon
Lucy White
Activist hedge fund TCI, which last week forced the London Stock Exchange (LSE) to call a shareholder meeting, has set out its reasons for wanting to oust the bourse’s chairman.
/goo.gl/PMEu4a

Xetra trading ready for MiFID II; Deutsche Börse’s T7 trading system receives update / Regulatory requirements implemented
Deutsche Börse Group
Today, Xetra trading is ready for the regulatory requirements of the EU Financial Markets Directive MiFID II, which will enter into force at the beginning of 2018. The underlying trading system T7 of Deutsche Börse was updated to release 6.0.
/goo.gl/eek7Rb

HKEX and SZSE Hold Seminar to Celebrate the 1st Anniversary of Shenzhen Connect
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX), the Shenzhen Stock Exchange (SZSE) and China Securities Depository and Clearing Co Ltd (CSDC) co-hosted a seminar in Shenzhen on 2 December to celebrate the first anniversary of Shenzhen-Hong Kong Stock Connect and explore ways to further improve the Connect programme.
/goo.gl/jSNZ3P

Fintech

Metascarcity and Bitcoin’s future
Jon Evans – TechCrunch
The problem with writing about Bitcoin is that the subject has become so emotional. The very name inspires triumph, greed, resentment, or fury. Triumph from those handful of hodlers (yes, really) who are watching the destiny they long foretold actually come true before those eyes. Greed from those hundreds of thousands of newbies who just bought in. Those two groups are, of course, bitcoin believers.
/goo.gl/FJtQGf

The Equifax Hack Didn’t Have to Be This Bad; Using Social Security numbers makes us vulnerable.
Elaine Ou – Bloomberg
If your personal information is ever compromised in a data breach, the hacked company might send you an apology letter with an offer of free identity theft protection from a credit-reporting agency. But what happens when the reporting agency is the one that gets breached?
/goo.gl/tEMWZg

Even Robots Are Joining the Bitcoin Craze as Quants Seek an Edge
Dani Burger – Bloomberg
Researchers say momentum, carry, value factors work in tokens; Systematic trend-followers begin to invest in cryptocurrencies
Quant blended with cryptocurrency sounds like a cocktail poured in hell. But behind closed doors, a few intrepid souls in the investing world are starting to drink it.
/goo.gl/9rFWVa

Battle for ‘True’ Bitcoin Is Just Getting Started
Yuji Nakamura and Olga Kharif – Bloomberg
In August, the bitcoin world split in two when bitcoin cash broke away from bitcoin. It was the culmination of years of growing tension about how to improve the world’s most popular cryptocurrency. The divide has set up a battle over which is the “true” bitcoin, pitting rivals whose combined market value has eclipsed that of Citigroup Inc. and Coca-Cola Co. Now, investors are bracing for volatility and a fight that could define what a cryptocurrency can or should be.
/goo.gl/VS8SKK

A.I. Will Transform the Economy. But How Much, and How Soon?
Steve Lohr – NY Times
There are basically three big questions about artificial intelligence and its impact on the economy: What can it do? Where is it headed? And how fast will it spread?
/goo.gl/2cGbWG

How Winklevoss twins used $11m Facebook payout to become world’s first Bitcoin billionaires
James Titcomb – Bloomberg
The twin brothers who sued Mark Zuckerberg claiming he stole the idea for Facebook are worth more than $1bn after capitalising on the astonishing rise in Bitcoin.
/goo.gl/Usc48U

De Beers to invest in blockchain-based diamond platform
Henry Sanderson – FT
De Beers, the world’s largest supplier of diamonds, is investing in a blockchain-based platform that will enable greater tracking of its stones.
/goo.gl/FWe1VJ

Politics

The launch of bitcoin futures is getting politicians’ attention
Jonathon Trugman – NY Post
There’s a new thing sweeping the international investment landscape. Its price is climbing the charts even faster than Taylor Swift’s new album “Reputation,” which sold 1.2 million copies in its first week.
/goo.gl/BJCsRC

Political risk on Wall Street? Buy the dip!
Noel Randewich – Reuters
An abrupt stock selloff on Friday, sparked by a report that magnified concerns about President Donald Trump’s potential links with Russia, prompted Wall Street’s favorite reaction in recent months: “Buy the dip.”
/goo.gl/gYJ1rG

Is Donald Trump an idiot? The answer is truly worrying
South China Morning Post
Yonden Lhatoo finds questions about Donald Trump’s mental fitness not only justified but ominous as well, given the real threat of war and disaster under his leadership
/goo.gl/audZ1Z

Republican Tax Plan for Colleges Is a Self-Inflicted Wound; The changes would undermine higher ed, one of the few areas where America still earns top marks.
Noah Smith – Bloomberg
The tax reform plan now making its way through Congress has a number of measures that would hurt higher education in the U.S. The most worrying feature is that it would tax tuition waivers for graduate students as income, making it much more expensive for most students to get a Ph.D. It would also end tax deductibility for student-loan interest payments, dramatically increasing the already-crushing burden of debt for many former students, and deterring many young people from going to college in the first place.
/goo.gl/oPcR1W

Farewell Uncle Sam, hello Uncle Donald; The Trump administration is undermining some of America’s closest alliances
Gideon Rachman – FT
All over the world there are countries that rely on the protection and leadership of the US. But dependable old Uncle Sam seems to have gone on a long vacation — and his malicious twin, Uncle Donald, has taken up residence in the White House. The result is confusion and soul-searching among some of America’s closest allies.
/goo.gl/9wH5dz

Regulation

NFA Investor Advisory—Futures on Virtual Currencies Including Bitcoin
NFA
The purpose of this investor advisory is to remind investors that, just like any other speculative investment, trading futures on virtual currencies, including Bitcoin, have certain benefits and various risks. While futures on virtual currencies must be traded on regulated futures exchanges, trading these products involves a high level of risk and may not be suitable for all investors.
/goo.gl/BuU7Ys

Tax Changes for Overseas Cash Could Ripple Through Markets; A tax break for repatriations could distort currency markets and squeeze funding for firms that benefit from the money held abroad
Mike Bird – WSJ
A provision in the GOP tax plan giving U.S. companies a one-time cut for repatriation of earnings and cash held overseas could ripple through financial markets, including currencies, foreign savings vehicles and dollar funding for global banks.
/goo.gl/D8hLmc

Treasury crackdown on Bitcoin over concerns it is used to launder money and dodge tax
Robert Mendick – Telegrap
Ministers are launching a crackdown on the virtual currency Bitcoin amid growing concern it is being used to launder money and dodge tax.
/goo.gl/A2cvT4

Richmond Fed Said to Tap McKinsey’s Barkin as Its President
Christopher Condon and Craig Torres – Bloomberg
Leadership pick likely to disappoint Fed diversity critics; Barkin to succeed Lacker, who was forced to resign in April
Directors at the Federal Reserve Bank of Richmond have chosen Thomas Barkin, a senior executive at global consulting firm McKinsey & Co., as the institution’s next president, said a person familiar with the decision.
/goo.gl/9cNeBK

Venezuela to Create a Cryptocurrency Amid Bolivar’s Free Fall
Jose Orozco – Bloomberg
Maduro says cryptocurrency to be known as the ‘petrocurrency’; To be backed by reserves in oil, natural gas, gold, diamonds
Venezuela’s currency is in free fall. Cryptocurrencies such as bitcoin are going precisely the other direction. And there, President Nicolas Maduro sees a way out of his country’s economic ills.
/goo.gl/Jnq1Lo

Swiss banks step up reports of suspicious activity by Saudi clients; Rash of referrals to money laundering office follows Riyadh’s anti-corruption purge
Patrick Jenkins and Ralph Atkins – FT
Switzerland’s banks have begun reporting suspicious account activity among some of their Saudi Arabian clients to the Swiss Money Laundering Reporting Office, part of the federal police service, according to people close to the situation.
/goo.gl/hqBPYC

Central banking has never looked more daunting; The line between fiscal and monetary policy is increasingly blurred
Charles Bean – FT
The Bank of England’s Monetary Policy Committee has just celebrated its 20th birthday. In its first decade, growth was steady and inflation close to target. We — along with our peers — thought we had this central banking business cracked. Nemesis arrived in the shape of the global financial crisis. Rates have been rock bottom ever since and central banks’ balance sheets have ballooned. Banking regulations are being tightened. And macro-prudential policy is still a work in progress. Central banking has never looked more daunting.
/goo.gl/j6i9AJ

If Central Banks Issue Cash, They Can Issue Cryptocurrencies; Consumers want the anonymity that cash and digital currencies provide.
Ferdinando Giugliano – Bloomberg
Central banks and cryptocurrencies seem to come from different planets. While monetary authorities are the guardians of price and financial stability, the likes of bitcoin and ethereum have ignited a speculative frenzy mirroring the tulip mania of the 17th century.
/goo.gl/L5gyFa

Supreme Court to Hear Arguments Over Sports-Betting Ban; Ruling could open up more of the country to wagering and generate up to $15 billion a year
Chris Kirkham and Brent Kendall – WSJ
A U.S. Supreme Court case next week could dramatically reshape the landscape of American sports betting, with major ramifications for casino operators and European betting shops, as well as professional sports leagues and college athletics.
/goo.gl/jFEVyc

Merrill Lynch Equities (Australia) Ltd pays $140,000 in infringement notice penalty
ASIC
Merrill Lynch Equities (Australia) Limited (‘MLEA’) has paid a total penalty of $140,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (‘the MDP’).
/goo.gl/w3qKxv

Assessing the value of financial advice
UK FCA
Speech by Megan Butler, Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered to The Personal Investment Management and Financial Advice Association (PIMFA) in London.
/goo.gl/H5somM

Investing and Trading

El-Erian: Bitcoin isn’t a ‘fraud,’ but it’s not for long-term investors, either; Anyone looking to put money into bitcoin needs to separate the issue into two categories: the blockchain technology and the product, Mohamed El-Erian said; The Allianz economic advisor said he doesn’t think bitcoin is a “fraud” but also doesn’t recommend it for long-term investors.
Jeff Cox – CNBC
Investors thinking about putting money into bitcoin need to separate the issue into two categories: the technology and the product, economist Mohamed El-Erian said Friday.
/goo.gl/YFck3r

Economists Seem to Back Off Economic-Growth Claim for Tax Cuts
Lynnley Browning – Bloomberg
Mnuchin embraced estimate of 3 percent growth over a decade; Conservative economists appear to back off after challenge
A group of conservative economists appear to be backing off their claim, embraced this week by Treasury Secretary Steven Mnuchin, that Congress’s proposed corporate tax cut would lead to 3 percent economic growth within a decade.
/goo.gl/xWf595

Overseas Investors (Finally) Join the U.S. Stock-Market Party; Foreign buyers’ spree comes after several years of pulling money out of American shares
Michael Wursthorn and Riva Gold – WSJ
Foreign-investor money is pouring into the U.S. stock market at the fastest clip in years, ending a long period of selling and providing a fresh boost to a more than eight-year rally.
/goo.gl/S5eEQQ

Debt redemption wave of $1tn looms in 2018; Investors face challenge in replacing higher yielding bonds in their portfolios
Kate Allen – FT
A $1tn wave of fixed-income debt is set to mature in Europe, the Middle East and Africa in the coming year, posing a significant challenge for investors searching for returns, according to new research.
/goo.gl/w3WAaY

BlackRock and Vanguard’s $20 Trillion Future Is Closer Than You Think; Two towers of power are dominating the future of investing.
Rachel Evans , Sabrina Willmer , Nick Baker , and Brandon Kochkodin – Bloomberg
Imagine a world in which two asset managers call the shots, in which their wealth exceeds current U.S. GDP and where almost every hedge fund, government and retiree is a customer.
/goo.gl/v66PZJ

98,750,067,000,000 Reasons to Be Worried About 2018
Mark Gilbert, Marcus Ashworth – Bloomberg
As 2017 enters its final month, here are 12 charts to illustrate what a year it’s been in markets. Far be it from us to be party-poopers; but let’s just say what we see makes us slightly nervous about 2018.
/goo.gl/gt1WRt

Many bitcoin investors are in it for the long haul
Ed Zwirn – NY Post
The life of a bitcoin investor certainly has its ups and downs, based on the dramatic price swings of the cryptocurrency.
/goo.gl/cyCxvU

Institutions

Hedge fund Tudor shuts one portfolio; Jones to play bigger role
Svea Herbst-Bayliss – Reuters
Paul Tudor Jones, one of Wall Street’s most prominent investors, is restructuring his Tudor Investment Corp. by liquidating one portfolio and planning to play a bigger role in managing money at the hedge fund firm he founded nearly four decades ago.
/goo.gl/LNsp6n

Mass firings at top digital currency investment bank
Kevin Dugan – NY Post
It’s a bit-bloodbath. The largest investment bank catering to the red-hot cryptocurrency sector was in total disarray on Friday after management fired nine employees — including the entire tech team, The Post has learned.
/goo.gl/vHxyjw

Regions

France’s butter crisis is a perfect lesson in basic economics
Chris O’Brien – Quartz
A visit to the Sena Fromager at the Marché des Carmes brought more bad news. Daniel, the knowledgeable and personable fromager who gamely tolerates my poor French, looked grimly at the display case when I inquired about butter.
/goo.gl/q9fGah

Opportunity flows when it comes to Swiss stocks
Victor Reklaitis – MarketWatch
Strategists are blowing their alpenhorns about the opportunity in Swiss stocks. The alpine country’s shares are changing hands below their typical premium, the Swiss franc appears poised to slide further against the euro, and earnings growth looks good.
/goo.gl/MuZs71

Hedge Funds Signal Trust in OPEC
Jessica Summers – Bloomberg
WTI crude net-long position at highest in about nine months; Producer group agrees to cut output through the end of 2018
Hedge funds are giving Saudi Arabia and Russia a big vote of confidence.
/goo.gl/qTwydN

20 years after Yamaichi’s collapse, Japanese securities industry still grappling with recovery
Japan Times
The failure in 1997 of Yamaichi Securities Co., then one of Japan’s Big Four brokerage houses, kicked off a turbulent era that brought about significant changes in the domestic securities industry.
/goo.gl/pR8Vq3

Yes, this time is different: A new and strong Japan emerges
Jesper Koll – Japan Times
“This time is different.” These are four very dangerous words. When you hear them it always pays to be extra skeptical, especially in the context of someone giving you financial advice or presenting an economic forecast. Personally, I always hold on to my wallet extra tight when the “trust me, this time is different” clause gets invoked. We’ve all been there in our respective professions and passions: It takes a thief to know a thief.
/goo.gl/7wAmKC

Vietnam’s ex-president admits Fukushima disaster played role in ditching foray into atomic power
Japan Times
HO, CHI MINH CITY – Vietnam last year abandoned plans to build its first nuclear power plants with Japanese and Russian assistance due to heightened concern over the safety of atomic power following events including the Fukushima disaster, according to former President Truong Tan Sang.
/goo.gl/ztcgS3

China Likely to Overtake U.S. as Largest Importer Within 5 Years; Shift to a more consumer-focused economy causing the change, CICC researchers say
Bloomberg News
From iron ore to baby formula, electronic parts to durian that smells like gym socks, China is buying everything you can think of, and that will soon make the world’s biggest exporter the top importer in the next few years.
/goo.gl/abaB1X

Brexit

The Best News on Brexit Has Just Come From Germany
Marcus Ashworth – Bloomberg
Good Brexit news has broken out in Europe, and some semblance of sanity as well. While investors are focused on progress in the divorce negotiations, the best development has actually come out of the Bundesbank. Executive board member Andreas Dombret has called for an agreement to keep financial services clearing in London.
/goo.gl/bVAqxA

Corbyn Signals Labour Could Be Open to Second Brexit Referendum
Alex Morales and Joao Lima – Bloomberg
Opposition leader declines to rule out another vote on Brexit; Corbyn speaks to reporters in Lisbon after meeting with Costa
U.K. Labour Party leader Jeremy Corbyn hinted that he could be open to holding a second referendum on Brexit as the consequences of leaving the European Union become clearer.
/goo.gl/HURked

Even £50bn will not buy Britain very much; The ratification of trade agreements cannot be contractually agreed, it is always political
Wolfgang Münchau – FT
What does £50bn buy? A trade agreement? The answer is probably yes, but almost certainly not the type of deal the UK is seeking in its withdrawal negotiations with the EU.
/goo.gl/u3eGyN

EU’s Barnier Sees a Likely Brexit Breakthrough
Ian Wishart – Bloomberg
Barnier briefed lawmakers before May-Juncker lunch meeting;nEU and U.K. said to plan joint statement after meeting
European Union chief negotiator Michel Barnier told European lawmakers that a breakthrough is likely on Monday in Brexit talks as Theresa May arrived in Brussels. The pound rose.
/goo.gl/osdWe9

BofA’s Brexit Planners Are Said to Have Mulled Bigger Paris Move
Laura J Keller – Bloomberg
Managers are said to pitch quick move to gain recruiting edge; Bank is likely to take more measured approach, moving hundreds
Bank of America Corp. has been debating proposals from Chief Operating Officer Tom Montag’s subordinates to rapidly build out a European trading hub in Paris, according to people with knowledge of the talks.
/goo.gl/RrkjhR

Brexit: EU and UK battle over ‘an accession in reverse’; Britain imagines it is an equal partner in the exit talks. But negotiations over its 1973 entry illustrate who has the upper hand
Alex Barker in Brussels – FT
The 280-page report is stamped “CONFIDENTIAL” for good reason. Britain’s chief negotiator is crushingly frank: from the start, Europe’s position amounted to making the UK “swallow the lot, and swallow it now”. And this, he admitted, “by and large, we had to do”.
/goo.gl/CBdCHy

Resigned to Not Getting Special Treatment, London’s Bankers Brace for Brexit; EU officials say financial services aren’t among their most pressing Brexit worries
Max Colchester – WSJ
After Britain voted for Brexit, the U.K.’s finance industry launched a vast lobbying offensive: The European Union had better help London’s banks, or the continent’s businesses and consumers would suffer. That pitch hasn’t worked.
/goo.gl/GvxF5A

Miscellaneous

Looking for leadership guidance in classic philosophy
With critical distance, you gain perspective on who you are and what kind of leader you can become, writes Nathan Harter
London School of Economics and Political Science
Some people contend that authentic leadership is more ethical and compelling. Authenticity depends on aligning what you do and say on the outside with who you are on the inside. They recommend looking inward to find your true self and core beliefs. Experts offer to help leaders bring to the surface what they find deep down.
/goo.gl/3A712S

How to break into venture capital; VC is the cool career choice for MBA graduates, but getting hired is difficult
Jonathan Moules – FT
An MBA from London Business School was key to Joe Krancki securing a job in venture capital — but not because of anything he learnt in class. What counted was being a full-time student on campus, surrounded by people with connections to the best jobs in London’s financial services industry. A tip-off from a banker Mr Krancki bumped into outside the computer room led to a summer internship with 3i, the private equity firm. There he met Mike Reid, who would later found Frog Capital, the tech VC firm, and who hired Mr Krancki as part of his founding team.
/goo.gl/t3d8p9

The ‘unretired’: coming back to work in droves; Rising numbers of older people are swapping pensions and hobbies for corporate life
Emma Jacobs – FT
Eighteen months ago, Tom Harvey retired. Then this year he changed his mind and unretired. He is far from alone. In the UK, according to research in Aging & Society, 25 per cent of retirees return to work, about half of these within five years of retirement.
/goo.gl/jQiAgj

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About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.