Breaking News

‘We may be stupid’ for waiting on bitcoin futures, NYSE owner says; New York Stock Exchange owner ICE holds back on crypto-futures; CME fee rises vex struggling high-speed trading industry

Internet Bitcoin Currency Money Electronic

First Read

Hits & Takes

Tom Farley is just having too much fun as CEO of NYSE. He is making the most of the NYSE media platform. Yesterday he was hanging out with George Springer of the Houston Astros, the World Series MVP, on the floor of the NYSE with the World Series trophy.~JJL

Net Neutrality Update: This all happened around Thanksgiving, but it is worth sharing that Comcast, which had promised not to block, throttle, or discriminate against lawful content, deleted that pledge the same day the FCC announced it would repeal net neutrality.

A tweet @loresjoberg posted regarding Comcast promising not to throttle content sums it up well:

“We never will, but it’s very important that we be able to. But we won’t. So let us do it. Because we won’t do it. Which is why we’re spending so much money to make sure we can. But we won’t. But let us.”

If you want to find out how you can help stop this, visit: https://www.battleforthenet.com/
~JB

Yesterday’s JLN Options had top stories covering the short volatility trade. ~SD

A few months ago JPMorgan CEO Jamie Dimon called bitcoin a “fraud”. Now JPMorgan is backing Bitcoin as the new gold. ~JB

Asia Pacific Financial News from John Lothian – https://goo.gl/4cSKq7December 5, 2017 ~JJL

@JohnLothian‘s tweets earned 784.9K impressions over this 28 day period. On average during the last 28 days, @JohnLothian earned 46 Retweets per day ~JJL

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The Silent Screams of the Bitcoin Shorts
By John J. Lothian

If bitcoin were a standard commodity or securities instrument, headlines would be screaming about how the “shorts” were being squeezed. With bitcoin in a parabolic price rise, some calling it a mania, there are no shorts to scream bloody murder.

Many commodities and companies have key constituents who apply political pressure when futures markets are moving so sharply that common sense tells you there is something wrong or unbalanced happening in the market.

Sometimes rules are changed or obscure procedures exercised at futures exchanges in order to accommodate an orderly liquidation of positions in cases where the powers that be can’t take the political heat anymore.

However, bitcoin is unlike other commonly traded markets because of its asymmetrical feature. There is little ability to short (physical?) bitcoin, so there are no shorts to squeeze.

For the rest of the commentary, click HERE

***** The magazine that asked me to write this column chose not to publish it as they said I “wrote a lot of different ideas but I (they) couldn’t tie them all together.” Oh well. ~JJL

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Bitcoin Futures: What? Me Worry?
The Streetwise Professor
The biggest news in derivatives world is the impending launch of Bitcoin futures, first by CBOE, then shortly thereafter by CME. The slow transaction times and relatively high transaction fees of Bitcoin mean that it sucks as a medium of exchange, especially for retail-sized transactions. And its price volatility relative to fiat currencies – which also means that its price volatility denominated in goods and services is also huge – undermines its utility as a store of value: that utility is based on the ability to convert the putative store into a relatively stable bundle of goods.
/goo.gl/HGak8B

***** The professor is always worth the read. ~JJL

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Technology-driven Trading: Is It For You? (PT 1); Insights from IMC traders. Part 1
IMC
Trading is a quantitative discipline but people with very different backgrounds and skillsets can succeed. Find out what it takes at IMC in our 4-part blog series
/goo.gl/W22sfe

***** Yes, it is. ~JJL

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Crypto Land of Confusion; In the world of finance, one of the first signs of success is when regulators fight over oversight. In that regard, cryptocurrencies have arrived.
James M. Falvey
This is the time, This is the place, So we look for the future, But… Tell me why, this is the Land of Confusion. -Land of Confusion, Genesis, 1986
/goo.gl/cn8oeQ

***** Our friend Jim Falvey writing on Bitcoin for the former Futures Magazine. ~JJL

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Opinion: There’s overwhelming evidence that the U.S. stock market is heading for disaster
John Mauldin – MarketWatch
Bonfires are fun to watch, but they eventually burn out. Human folly apparently doesn’t, so we just keep adding to the absurdities. The volume of daily economic lunacy that lights up my various devices is truly stunning, and it seems to be increasing. (You can find a previous series of charts in my free newsletter, Thoughts from the Frontline.)
/goo.gl/kHJkEk

******The markets need many opinions for price discovery to work, even those that want you to run for the hills. ~JJL

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Thoughts on Bitcoin
Kevin Darby – Blue Trading Systems
I have a keen interest in industry developments that could give our clients an edge and John Lothian’s “Putting on My Broker Hat About Bitcoin” got me thinking about the imminent listing of Bitcoin futures at the CME and CBOE’s Chicago Futures Exchange. Crypto-mania commentary has focused on the merits of Bitcoin and how the associated technology might revolutionize finance and other aspects of our lives, but I do not see much earnest technical analysis of the system and its flaws.
jlne.ws/2AVYmtC

***** Another bitcoin commentary that includes John Lothian in the first paragraph. Head shake. ~JJL

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Tuesday’s Top Three
Our top story was led by Bloomberg’s How AI Will Invade Every Corner of Wall Street. Second went to Steve Grob’s piece Bitcoin futures – the best idea ever?. Third went to Spencer Doar’s JLN piece, Cboe Throws Launch Date Punch at Crosstown Rival CME

 

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Lead Stories

‘We may be stupid’ for waiting on bitcoin futures, NYSE owner says
Mike Murphy – MarketWatch
CEO Jeff Sprecher admits he doesn’t ‘know what to make of cryptocurrencies’
The owner of the New York Stock Exchange said Tuesday he may end up regretting not jumping at the chance to offer bitcoin futures, unlike his competitors.
/goo.gl/itqEPD

***** Jeff Sprecher is not stupid. He is brilliantly positioning ICE in true game theory style.

New York Stock Exchange owner ICE holds back on crypto-futures
John McCrank – Reuters
Intercontinental Exchange Inc (ICE.N) has put a lot of thought into the idea of futures contracts on cryptocurrencies like bitcoin, but has yet to move forward due to the opaque nature of the underlying markets, the New York Stock Exchange owner’s chief executive officer said on Tuesday.
/goo.gl/jWSxvw

CME fee rises vex struggling high-speed trading industry; Lobby group weighs options amid mood ranging from anger to resignation
Gregory Meyer in New York – FT
A rise in transaction fees for futures contracts at CME Group is angering the exchange operator’s most active customers at a time when their business models are being challenged by subdued market volatility.
/goo.gl/weZPCd

Bloomberg’s rising terminal count signals hope for the beleaguered bond trader
John Detrixhe – Quartz
Life hasn’t been easy for Wall Street traders in recent years—their ranks were thinned after the last financial crisis, and regulations since the subprime meltdown have made their jobs less profitable (and thus more expendable). Traders’ employers have paid billions of dollars in fines for the dumb things they’ve said in chat rooms (and for, you know, trying to rig markets). And if that’s not enough, it has become fashionable for bank CEOs to talk openly about automating as much of their workforce as possible.
/goo.gl/sYKzCE

‘Responsible’ investor group toughens code on global members
Ross Kerber – Reuters
A UN supported group pushing for “responsible” investment said it has adopted tougher rules aimed at making fund managers deliver on pledges to pay attention to environmental, social and governance (ESG) issues.
/goo.gl/7ESXL9

There’s an $814 Million Mystery Near the Heart of the Biggest Bitcoin Exchange
Matthew Leising – Bloomberg
After Wells Fargo severed ties, Tether won’t name its banks; Bitfinex says it’s hired a law firm to contest false claims
Among the many mysteries at the heart of the cryptocurrency market are these: Does $814 million of a digital token known as tether really exist? And what is tether’s connection to Bitfinex, the world’s biggest bitcoin exchange?
/goo.gl/LswuU9

MiFID Spells Decline of Off-Exchange Bond, Derivatives Trading
Silla Brush – Bloomberg
Deloitte survey indicates shifts to trading venues from OTC; Survey of 12 buy-side firms shows impact of rule from February
The European Union’s MiFID II law is expected to drive a significant, rapid shift in trading of bonds and derivatives to electronic and other trading venues.
/goo.gl/z4eoL5

Prime Brokers Add Valuation-Fluffing To Menu Of Services
Jon Shazar – Dealbreaker
Valuing illiquid assets is a delicate and dangerous business. Mark them too low, and your portfolio managers and investors start getting pissy. Mark them too high, and your regulators and investors start getting litigious. But mark them you must, even if they haven’t traded in years, and since securities are only worth what people will pay for them, that means making up a price that someone might conceivably pay for them—and making it up just right, or else, see above.
jlne.ws/2AU1rL4

Plot to Assassinate U.K. Prime Minister Theresa May Is Foiled, Sky Reports
Brendan Scott – Bloomberg
U.K. Prime Minister Theresa May was the target of an assassination attempt by Islamist militants that was broken up last week with the arrests of two men, Sky News reported.
/goo.gl/UDx2iR

Why Wall Street’s Finally Pushing to Add Women on Boards; BlackRock, Vanguard, State Street get behind shareholder bids.
Laura Colby – Bloomberg
BlackRock, Vanguard, State Street get behind shareholder bids; This story is part of a series on the future of investing
The big money on Wall Street is finally throwing its weight behind boardroom diversity.
/goo.gl/o4uEv5

The Central Risk Book: Rethink Risk, Rethink Trading
Larry Tabb – TABB Forum
What if risk management within a bank could be used to manage profitability as well as risk?
jlne.ws/2klt4pt

How to Grow When You Have 100% Market Share, Swedish CEO Asks
Hanna Hoikkala and Niklas Magnusson – Bloomberg
The world’s electronics companies manufacture 4 billion advanced flat-panel displays a year for smartphones, TVs and tablets, and every one of them is made with technology from a little-known Swedish company. While 100 percent market share might be the dream of many executives, for Lena Olving at Mycronic AB, it’s a challenge.
/goo.gl/QLCwVG

Are Top-Managed Companies a Good Investment?; The Drucker Institute will launch an exchange-traded fund that aims to find out
Ken Brown – WSJ
Peter Drucker is a legend among management consultants. But can he pick stocks? The late Mr. Drucker built his legacy telling executives to focus on “doing the right things well.” That advice has been distilled into the Management Top 250 ranking of the most effectively managed U.S. companies. Next they will be turned into an investment product to see whether Mr. Drucker’s philosophy can make money for investors.
/goo.gl/52xvEb

Exchanges, OTC and Clearing

NYSE’s Owner Resists Rushing Into Bitcoin; ICE’s Sprecher raises doubts about the wisdom of being the first U.S. exchange to offer bitcoin futures
Alexander Osipovich – WSJ
The owner of the New York Stock Exchange is taking a wait-and-see approach to bitcoin, even as two of his main competitors prepare for the launch of futures markets based on the fast-rising cryptocurrency.
/goo.gl/ns3dtc

Tokyo Financial Exchange Takes First Step Toward Bitcoin Futures
Daisuke Sakai and Yuji Nakamura – Bloomberg
Working group planned to start analyzing bitcoin in January; Legislation would be needed for Japan to copy U.S. moves
One of Japan’s leading financial exchanges is starting preparations to launch bitcoin derivatives, echoing U.S. rivals that plan to list contracts tracking the cryptocurrency as soon as this month.
/goo.gl/Lqknin

Gartman says Cboe is giving bitcoin some ‘legitimacy,’ but he’s still not buying; Bitcoin’s value may have nearly doubled over the past month, but Dennis Gartman still isn’t biting; Still, Gartman says he thinks the Cboe’s bitcoin futures trading lends the cryptocurrency “some sense of legitimacy.”
Chloe Aiello – CNBC
Bitcoin has almost doubled in value since November, when commodities king Dennis Gartman last disparaged the cryptocurrency. Bitcoin’s biggest bear still won’t bite, though.
/goo.gl/UynrHQ

Ex-head of global markets at Bloomberg joins bond trading start up; George Harrington worked at Bloomberg for more than 10 years and most recently at Eris Exchange in global business development.
Hayley McDowell – The Trade
The former head of global markets at Bloomberg has joined a Toronto-based fixed income trading platform start up to lead its expansion into the US.
/goo.gl/H1ejPT

Cboe Europe hires block trading sales veteran from Liquidnet; Matt Beales joined Cboe LIS last month after building buy-side relationships at Liquidnet for 15 years.
Hayley McDowell – The Trade
A block trading sales veteran at Liquidnet has left the firm to join Cboe Europe in a senior role overseeing sales for the exchange’s large-in-scale (LIS) trading platform.
/goo.gl/eYgUP6

Cboe Futures Exchange (CFE) Authorized To Provide Automated Trading Services In Hong Kong; CFE to allow Hong Kong firms to become trading privilege holders (TPHs); connect directly to CFE; Cboe Global Markets opens office in Hong Kong as exchange’s Asian outreach continues
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today announced that Cboe Futures Exchange (CFE) recently received approval in Hong Kong to allow corporations that are licensed by the Hong Kong Securities and Futures Commission under Part V of the Hong Kong Securities and Futures Ordinance to become CFE Trading Privilege Holders (TPHs).
/goo.gl/pgm4kN

Deutsche Boerse to use access cash for buy backs, acquisitions
Reuters Staff
Deutsche Boerse has agreed to launch a new share buy back worth roughly 200 million euros ($237 million), the German stock exchange operator said in a statement on Tuesday.
/goo.gl/npJAxr

No changes in the stock indices of Deutsche Börse; Rebalancing of the indices effective 18 December 2017
Deutsche Börse Group
Deutsche Börse reviewed the composition of its stock indices on Tuesday. In the indices DAX, MDAX, SDAX and TecDAX there are no changes to this regular date. The quarterly rebalancing of indices with the unchanged composition will take effect on 18 December 2017.
/goo.gl/YJ7T5s

LCH’s SwapClear expands Australian Dollar offering
LCH
LCH, a leading global clearing house, today announced that it has extended its SwapClear service to offer clearing of Australian Dollar BBSW vs AONIA overnight basis swaps (AUD BOBs). With SwapClear clearing approximately 85% of the the AUD interest rate derivatives market today, this addition will enable members and their clients to clear AUD BOBs alongside their existing SwapClear portfolio of interest rate derivatives. This allows participants to potentially achieve improved margin efficiencies by recognising offsets between AUD BOBs exposures and other interest rate derivative exposures in SwapClear.
/goo.gl/Av9qvj

TMX Group Consolidated Trading Statistics – November 2017
TMX
TMX Group Limited today announced November 2017 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha), Montréal Exchange (MX) and NGX.
/goo.gl/i8kUKD

INTERCONTINENTAL EXCHANGE REPORTS NOVEMBER STATISTICS
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported November 2017 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/goo.gl/UUxdKo

CME Group Inc. (Nasdaq: CME) to Ring The Nasdaq Stock Market Opening Bell in Celebration of Its 15th Anniversary
By GlobeNewswire
CME Group Inc. (Nasdaq:CME), the world’s leading and most diverse derivatives marketplace, will visit the Nasdaq MarketSite in Times Square in celebration of its fifteenth anniversary.
/goo.gl/sV4ZHA

LSEG Board Appointment
London Stock Exchange Group
London Stock Exchange Group plc (LSEG) today announces that Val Rahmani will join the Group Board as an Independent Non-Executive Director, with effect from 20 December 2017. Val brings considerable technology knowledge and expertise, which will be of significant benefit as we continue to build on our position as a global financial markets infrastructure provider. Val has previously been a non executive director of Aberdeen Asset Management and is currently a Non executive director of US listed companies RenaissanceRe Holdings Ltd and Computer Task Group, Inc.
/goo.gl/ejvH8e

SGX reports market statistics for November 2017
SGX
Securities – Total Securities market turnover value was at S$28.5 billion, up 19% month-on-month (m-o-m) and down 3% year-on-year (y-o-y), over 22 trading days. There were 21 trading days in October 2017 and 22 in November 2016.
Derivatives – Total Derivatives volume was 18.0 million, up 21% month-on-month (m-o-m) and up 9% year-on-year (y-o-y).
/goo.gl/ZQQCHk

Japan Exchange Group Joins the Sustainable Stock Exchanges Initiative
JPX
Japan Exchange Group, Inc. (JPX) has joined the Sustainable Stock Exchanges (SSE) initiative today as a partner exchange.
/goo.gl/gUQvJ5

Icap European Sef faces axe as US, EU reach equivalence deal; Dual-registered venue no longer necessary under US-EU substituted compliance regime, say lawyers
Joanna Wright – Risk.net
Mutual recognition of trading venues by European Union and US regulators, agreed on December 5, could spell the end for TP Icap’s dual-registered swap execution facility in Europe.
/goo.gl/hwESZ2

Fintech

Cappitech Enables Regulatory Reporting on AccessFintech’s Exception Network
Cappitech
Cappitech Regulation, a RegTech firm specializing in automating regulatory transaction reporting for investment firms, has concluded integration of its Capptivate platform with AccessFintech’s ecosystem. With the integration, AccessFintech users can incorporate Capptivate’s MiFID II and EMIR reporting, tracing regulatory reporting exceptions in its life cycle management portal.
/goo.gl/Wb6mkL

Martin Adams Joins CloudMargin as Head of Client Operations
CloudMargin
CloudMargin, the multi-award winning creator of the world’s first web-based collateral and margin management solution, announced that Martin Adams has joined the firm’s senior leadership team as Head of Client Operations. Adams is a 26-year veteran of derivatives operations, with extensive experience in over-the-counter (OTC) and listed derivatives, as well as fixed income and foreign exchange (FX) products.
jlne.ws/2BNWssW

Welcome to the API World
Rival Systems
In the current technology ecosystem, APIs have come to hold a critically important role and the future promises an even greater status for them going forward. But why are APIs so important, what are some of the ways trading firms utilize an API to support their operations, and what should you look for when evaluating an API?
/goo.gl/mo2PAB

The Crypto Company Launches First Phase of Trading Operations for Digital Currencies OTC Markets:CRCW
The Crypto Company (OTC:CRCW), one of the first publicly traded technology companies in the digital currencies and blockchain sector, today announced the Crypto Company’s first group of traders will actively trade the most liquid cryptocurrencies using in-house capital. The Company’s full plans call for the build-out of a full-scale trading floor with high capacity for experienced crypto traders. The company is in the process of spearheading the development of high frequency trading (HFT) and program trading software platforms specifically for the cryptocurrency markets. These future phases are under development and require complex technology due to regulatory and security concerns unique to the crypto markets.
/goo.gl/aHPqTs

Bitcoin miner: ‘I haven’t paid for heat in three years’
Krystal Hu – Yahoo Finance
It was roughly 30 ºF outside in Durham, North Carolina, on a recent day in late November, but Rahdi Fakhoury’s 1650-square-foot house was so warm he left a window open a bit. The heater he was using? Two bitcoin mining machines and two Ethereum mining machines.
/goo.gl/MwGVRZ

Politics

GOP Tax Plan: Live Coverage
WSJ
Join WSJ’s tax-policy experts to follow the twists and turns of Congress’s attempt to make the most significant tax-code changes since 1986. Two New Polls Show Majorities Opposed to GOP Tax Plan
/goo.gl/hkoExk

Gundlach says ‘strange environment’ to be cutting U.S. corporate taxes
Jennifer Ablan – Reuters
DoubleLine Capital Chief Executive Jeffrey Gundlach, who voted for President Donald Trump, warned on Tuesday that it is a “strange environment” to be cutting U.S. corporate taxes with the economy already in its eighth year of expansion.
/goo.gl/N6an1J

Ray Dalio Says End of the SALT Deduction Will Further Divide the Nation
Katia Porzecanski and Hema Parmar – Bloomberg
Billionaire Ray Dalio said the expected elimination of state and local income-tax deductibility proposed by lawmakers will take a toll on high-tax areas due to lower revenues as high-income earners move out of state.
/goo.gl/wNWw7V

The GOP Tax Plan Would Make America’s Housing Crunch Even Worse
Patrick Clark – Bloomberg
Changes could send already low U.S. home inventories lower; Losing deductions will be especially tough in high-tax states
In San Francisco and Scarsdale, Jersey City and Greenwich, the real estate talk is the same: Just how bad will this Republican tax overhaul hurt?
/goo.gl/TYsfdy

Fate of $700 Billion Power Trade Hinges on One Trump Buzzword
Naureen S Malik , Mark Chediak , and Jim Polson – Bloomberg
Energy Department wants to prop up struggling coal and nuclear; Utilities focus on protecting power lines from extreme weather
Hurricane winds and raging wildfires knocked out power to millions of people from Florida to California this year, underscoring the need to protect America’s electric grid from disaster.
/goo.gl/RjZg5K

Regulation

SEC in Transition: Commission Appoints a Fixed Income Advisory Committee
Anthony Perrotta – TABB Forum
The evolution of equity market structure began in the early 1970s and continues today. Changing the structural makeup of large financial markets takes time. More important, it takes effort, expertise, and compromise. As the SEC embarks on its first foray into an assessment of fixed income market structure, the endeavor will be challenging; Rome was not (re)built in a day.
jlne.ws/2knqxLG

Bipartisan Bank-Relief Bill Wins Approval From Senate Panel
Elizabeth Dexheimer – Bloomberg
Midsize lenders would lose too-big-to-fail label in Crapo plan; Democrats’ support boosts chances measure get through Congress
A key U.S. Senate panel has cleared a bill that could bring financial firms a significant chunk of the regulatory relief they’ve sought since the Dodd-Frank Act became law in 2010.
/goo.gl/PLXAwX

Trump Team to Slash Budget, Staff at Financial-Data Office; Office of Financial Research Director Richard Berner, who is stepping down at the end of the year, is scheduled to testify before a House committee on Thursday. The agency has been told to expect budget and staffing cuts.
Ryan Tracy – WSJ
The Trump administration has told employees of the U.S. Office of Financial Research to expect deep budget and staffing cuts, according to people familiar with the matter, the latest example of its efforts to undo policies put in place under former President Barack Obama.
/goo.gl/6KDNWW

EU and US reach agreement on derivatives trading ahead of MiFID II; Decision means banks and traders can use US venues to trade derivatives in compliance with MiFID II.
Hayley McDowell – The Trade
The European Commission and the derivatives regulator in the US have agreed on terms, which will see mutual recognition of trading venues weeks before MiFID II.
/goo.gl/6g4jHB

Verena Ross Keynote Speech at ICI Global Conference
ESMA
Today, Verena Ross, Executive Director, gave a keynote address at the ICI 2017 Global Capital Markets Conference in London. The full text of her speech can be found here.
/goo.gl/XRFNLq

ESMA latest Risk Dashboard sees no change in overall risk levels
ESMA
RISK ANALYSIS & ECONOMICS – MARKETS INFRASTRUCTURE INVESTORS
The European Securities and Markets Authority (ESMA) has issued today the Risk Dashboard No.4 2017, covering risks in the EU’s securities markets for Q3 2017. ESMA’s overall risk assessment remains unchanged from Q2 at high levels.
/goo.gl/Fd8Heb

6 Tips To Stay Safe Online This Holiday Season
KAITLYN KIERNAN – FINRA
Do crowded stores spewing holiday music sound like your worst nightmare? Would you rather kick back on the couch and do your shopping from home? If so, you aren’t alone. More Americans than ever are opting online over long lines to check off gifts from their holiday shopping list.
/goo.gl/UpxPQS

Former Company Insider Earns More Than $4.1 Million for Whistleblower Tip
SEC
The Securities and Exchange Commission today announced an award of more than $4.1 million to a former company insider who alerted the agency to a widespread, multi-year securities law violation and continued to provide important information and assistance throughout the SEC’s investigation. The whistleblower is the third awarded by the SEC in the past week.
/goo.gl/s1BwJV

Podcast: CFTC Talks EP020: Roundtable with CFTC leaders on Bitcoin
CFTC
This week on CFTC Talks, we bring on a roundtable panel made up of CFTC leaders to discuss what Bitcoin is, what the…
/goo.gl/fHkgZA

Using artificial intelligence to keep criminal funds out of the financial system
UK FCA
Speech by Rob Gruppetta, Head of the Financial Crime Department at the FCA, delivered to the FinTech Innovation in AML and Digital ID regional event, London.
/goo.gl/dBt6se

FCA fines Bluefin £4m for misleading customers
UK FCA
The Financial Conduct Authority (FCA) has today fined Bluefin Insurance Services Limited (Bluefin) £4,023,800 for having inadequate systems and controls and failing to provide information to its customers about Bluefin’s independence in a way that was clear, fair and not misleading.
/goo.gl/1fM3Jr

Further success in reducing pension funds’ costs and charges
UK FCA
Actions taken by the FCA, the DWP and pension providers, together with Independent Governance Committees (IGCs) and trustees, result in lower costs and charges to consumers on about £24.9bn in workplace pension schemes.
/goo.gl/3EH8qr

Investing and Trading

Gundlach Says Yellen’s Legacy at the Fed Is Looking ‘Pretty Good’
John Gittelsohn – Bloomberg
Manager sees no evidence of recession on horizon in next year; Powell may find attaining consensus ‘is not going to be easy’
Billionaire bond manager Jeffrey Gundlach says Janet Yellen’s legacy as Federal Reserve chair looks strong because she started raising interest rates and reducing the Fed balance sheet.
/goo.gl/pf9rhA

Disrupt This! Innovation ETFs are storming the market
Chris Taylor – Reuters
Amazon.com (AMZN.O) is disrupting retail. Airbnb is disrupting hotels. Uber is disrupting transportation. Who is going to be disrupted next?
/goo.gl/iJRsCi

This artificial intelligence ETF is one of the most popular fund launches of 2017
Ryan Vlastelica – MarketWatch
One of the most notable success stories on Wall Street in 2017 isn’t exactly a human-interest story. The AI Powered Equity ETF AIEQ, -0.94% an exchange-traded fund that uses artificial intelligence technology to select the stocks it holds, has emerged as one of the most successful new funds of the year, proving so popular with investors that it has stunned its own (human) creators.
/goo.gl/aTjzFZ

Opinion: Only ‘sheeple’ are buying bitcoin at this point
Jared Dillian – MarketWatch
This tweet was getting retweeted all over the place recently. Apologies for the bad language.
/goo.gl/74omM4

Famed trader Mark Fisher: Bitcoin is very similar to the silver run in the 1970s; “Bitcoin was what silver was back in the late ’70s and ’80s — for sure,” MBF’s Mark Fisher says.
Berkeley Lovelace Jr. – CNBC
Bitcoin’s run is very similar to that of silver’s nearly 40 years ago, renowned trader Mark Fisher told CNBC on Tuesday.
/goo.gl/QYrrZz

Making the Case for Bitcoin $400,000
Bloomberg Markets
Mark Yusko, founder and chief investment officer at Morgan Creek Capital Management, makes the case for how bitcoin’s value can reach $400,000. He speaks with Bloomberg’s Jonathan Ferro on “Bloomberg Markets: The Open.”
/goo.gl/yJHt5j

Bitcoin Soars Past $12,000 as Futures Move Closer to Reality
Dave Liedtka – Bloomberg
Bitcoin surpassed $12,000 for the first time amid speculation that the widespread use of futures will help lead to digital currencies being viewed as a legitimate asset class for mainstream investors.
/goo.gl/FZ2igZ

Copper Is Flashing Red as Stockpiles and Spreads Point Bearish
Mark Burton – Bloomberg
Spreads and inventories signal the market isn’t short of metal; Concerns are creeping in about the strength of Chinese demand
Copper is coming off the biggest one-day slump in two years and the mood in the market is souring. Even though prices are still up dramatically this year, here are four reasons traders are cautious for the future.
/goo.gl/V2bnML

Low Food Prices Are Hurting Farm State Economies; Iowa and South Dakota’s economies shrink as farmers add to a global food glut
Sharon Nunn and Benjamin Parkin – WSJ
Farmers are producing too much food, holding down prices and holding back economies in states with big agricultural industries.
/goo.gl/TczsP8

Stockpickers, Rejoice! Correlations Are Falling Again; The correlation between S&P 500 sectors last week fell below 20%, near its lowest level ever
By Chelsey Dulaney – WSJ
U.S. stock-sector movements haven’t been this disjointed in nearly two decades.
/goo.gl/4eQB28

Institutions

Bank Failure Could Still Spark Crisis, Treasury Researcher Says
Ben Eisen – WSJ
The failure of a large financial institution could still set off or magnify a crisis, according to a report published Tuesday by an independent arm of the U.S. Treasury Department.
/goo.gl/L6Cdjo

Broker and adviser Numis sees share price dip despite strong profits
Lucy White – Telegraph
City stockbroker and corporate adviser Numis has seen its share price dip this morning, despite a healthy increase in revenues and profits.
/goo.gl/bVTMzh

E*TRADE to Host Interactive Options Forum; New to options or want a refresher on the basics? Trading options and ready to dive even deeper?
BUSINESS WIRE
E*TRADE Financial Corporation (NASDAQ: ETFC) today announced it will host its interactive Options Forum on Saturday, December 9, 2017. The online virtual event offers a number of complimentary sessions for investors and traders who are looking to start trading options or to take their options trading to the next level. Options Forum sessions run from 11:00 a.m. to 6:15 p.m. ET. At this event, attendees will:
/goo.gl/tBCHH9

Regions

Malaysia 1MDB Scandal Is ‘Kleptocracy at Its Worst,’ Sessions Says
Elffie Chew – Bloomberg
Some $4.5 billion were allegedly laundered via opaque deals; Justice seeking to seize $1.8 billion in assets linked to 1MDB
The alleged corruption related to a Malaysian state investment fund is “kleptocracy at its worst” and the U.S. is working to provide justice to the victims, Attorney General Jeff Sessions said on Monday.
/goo.gl/YzSRBu

Maduro’s cryptocurrency to fare no better than Venezuela itself: analysts
Brian Ellsworth – Reuters
Venezuela’s plan to create an oil-backed cryptocurrency faces the same credibility problems that dog the ruling Socialist Party in financial markets and is unlikely to fare any better than the struggling OPEC member itself, investors and technical experts say.
/goo.gl/VFnukM

In the World’s Strangest Bull Market, Most Stocks Are Falling
Jeanny Yu – Bloomberg
Shanghai Composite’s gain has left a majority of shares behind; It’s a break with history and makes the gauge a global outlier
Every bull market is unique, but the one in China right now looks downright strange.
/goo.gl/GdfrX7

Eurozone members split over Brussels’ reform plan; Blueprint to reshape single currency area will include idea of European Monetary Fund
Jim Brunsden and Mehreen Khan in Brussels – FT
The European Commission is facing resistance from Berlin and other capitals to the ambitious blueprint for eurozone reform that it will lay out on Wednesday.
/goo.gl/5SR7fW

Hong Kong’s Surging Stocks Are Too Hot for Beijing; Mainland Chinese regulators have moved to tamp down the city’s market, which has outperformed Shanghai, Shenzhen this year
Steven Russolillo in Hong Kong and Shen Hong in Shanghai – WSJ
Chinese regulators have succeeded in cooling the mainland’s once-volatile stock markets this year. Now, their attention is turning to Hong Kong.
/goo.gl/vLUQMw

Brexit

Most Brits Still Want Brexit But Expect It All to End Badly
Robert Hutton – Bloomberg
Survey finds majority think May is mishandling divorce talks; May has until end of week to get derailed talks back on track
British voters increasingly think Brexit is being mishandled. But that doesn’t mean they’re turning their backs on the idea of abandoning the European Union — just on Prime Minister Theresa May’s Conservative government.
/goo.gl/tMxWgF

With Brexit Talks Torpedoed, Hammond Makes a Pitch for Finance
Flavia Krause-Jackson – Bloomberg
A day after debacle in Brussels, chancellor addressed the City; Calls to protect ‘durable and fair’ trading arrangements
Hammond tried to reassure the world of finance about his government’s aim to preserve London as a world-leading financial center.
/goo.gl/eZfDzd

With Brexit Talks Torpedoed, Hammond Makes a Pitch for Finance
Flavia Krause-Jackson – Bloomberg
A day after debacle in Brussels, chancellor addressed the City; Calls to protect ‘durable and fair’ trading arrangements
Hammond tried to reassure the world of finance about his government’s aim to preserve London as a world-leading financial center.
/goo.gl/eZfDzd

Blocking a Brexit divorce deal is a high-stakes game; It is in everyone’s interests to help Theresa May keep the show on the road
fastFT
One does not often lose money betting on the intransigence of Northern Ireland’s Democratic Unionist party. With Theresa May’s government dependent on DUP backing, the party’s decision to block a carefully crafted deal that would unlock the next phase of Brexit talks was an accident waiting to happen. However, it is also a mistake that could have serious consequences for all concerned — not least the DUP.
/goo.gl/eZGkVN

Bank of England mulls ordering banks to raise buffers against disorderly Brexit =Tim Wallace – Telegrap
Banks could be ordered to set aside another £5bn to guard against the risk of a disorderly Brexit which threatens to cut finance firms off from their continental customers, the Bank of England has said.
/goo.gl/hmm6zA

Miscellaneous

TheStreet cuts staffers, refocuses on subscriptions
Max Willens – Digigday
TheStreet is pivoting to consumer revenue in 2018 after forays into video and branded content failed to take off.
/goo.gl/EK6Ua1

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About Author

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