Breaking News

U.S. authorities due to make arrests in futures ‘spoofing’ probe; Deutsche Börse to spend EUR18m renovating the Frankfurt stock exchange; Hedge Funds Go Bullish on Bitcoin Futures

First Read

Hits & Takes
JLN Staff

Fintank is holding a cryptocurrency event on February 17 at the Northwestern Pritzker School of Law on East Chicago Avenue in the Thorne Auditorium. The name of the event is Crypto Con. I am not sure if you are supposed to wear a costume of your favorite cryptocurrency to the event, but I will be there on a panel at 4:30 PM.~JJL

The Fintank people have me listed as John Lothian of JJL News. Not sure what that is. Maybe they meant JLN.~JJL

An interesting take on crypto in Bloomberg today, where Markus Mueller, Global Head of Chief Investment Office at Deutsche Bank Wealth Management pointed out that high volatility, possible price manipulation and data loss or data theft are problematic. Wondering if he remembers stocks like Tesla or Netflix for volatility, Enron for price manipulation and Target for data loss.~JK

The CFTC’s Technology Advisory Committee meeting looks to be rescheduled for February 14, which is Ash Wednesday and Valentines Day. I will be in Washington, DC on Feb 13 and 14 for the meeting and other meetings.~JJL

Great quote from Canadian Prime Minister Justin Trudeau at Davos in this Financial Times OpEd about the challenges of the digital age to liberal democracy: “The pace of change has never been this fast, and yet it will never be this slow again.” ~SR

Clearstream and Deutsche Börse are holding Global Funding and Financing (GFF) Summit 2018 on the 30th of January. Here is the agenda.~JJL

Free samples of Diet Coke’s four new flavors will be handed out outside the NYSE building today from 8:30am-1:00pm. If that doesn’t get you out of bed, nothing will.~SR

Mark Rzepczynski has a blog post about what makes a good hedge fund manager.~JJL

CME Group Chief Economist Blu Putnam was awarded the Outstanding Contribution to Economic Research and Commentary at the Hedge Fund Journal Awards on Wednesday night.~JJL

Quantitative Brokers has joined the FIA.~JJL

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Sponsored Content
IFM

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Ingvar Kamprad, Founder of Ikea and Creator of a Global Empire, Dies at 91
Robert D. Mcfadden – NY Times
Ingvar Kamprad, a Swedish entrepreneur who hid his fascist past and became one of the world’s richest men by turning simply-designed, low-cost furniture into the global Ikea empire, died on Saturday at his home in Smaland, Sweden. He was 91.
/goo.gl/P43pRW

***** Word is he will be buried in a thin rectangular cardboard box.~JJL

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Mort Walker, Creator of ‘Beetle Bailey’ Comic Strip, Dies at 94
Richard Goldstein – NY Times
Mort Walker, the creator of “Beetle Bailey,” a comic strip about an Army private who malingered his way through seven decades at Camp Swampy to the consternation of his commanding officers and the delight of his fans in the armed forces and beyond, died on Saturday at his home in Stamford, Conn. He was 94.
/goo.gl/pa4evr

***** Legendary graduate of University of Missouri at Columbia, where my son Tim is in school.~JJL

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Flu Season From Hell Keeps Getting Worse; Now your kids are spreading it. More than 50,000 deaths are expected before it finally ends.
Michelle Cortez – Bloomberg
Children returning to school after the winter holidays appear to be sharing more than just their new toys. They are driving influenza infections to levels not seen since the swine flu pandemic of 2009, public health officials said. By the time this flu season is over, experts said, more than 50,000 Americans will be dead.
/goo.gl/Y4ffa5

***** Let’s be smart about this out there.~JJL

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Fake Coins, Real News; “It Depends” Advice; Market Abuse; Insider Information
Gary DeWaal – Bridging the Week
It was real and not fake news last week when the Commodity Futures Trading Commission finally disclosed the details of an enforcement action alleging a fraudulent scheme involving a fake virtual currency that was reported to have been filed two weeks ago but for which no details were made public at the time. Separately, the chairman of the Securities and Exchange Commission warned lawyers about providing “it depends” advice to issuers of digital tokens in initial coin offerings that are very likely securities. Additionally, the chairs of the SEC and the CFTC said that it might be appropriate to re-evaluate whether the current regulatory framework governing currency transactions fits neatly for transactions involving cryptocurrencies.
jlne.ws/2DTM1aV

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Friday’s Top Three
Our top read story on Friday was well timed for those getting ready for a night out, You’re Ordering Wine Wrong, from Bloomberg. Second was the FT’s piece Deutsche Börse ends Asia expansion plans. Third was Craig Pirrong’s column Why Are ABCD Singing the Blues?

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Lead Stories

U.S. authorities due to make arrests in futures ‘spoofing’ probe: sources
Michelle Price – Reuters
U.S. authorities were set to arrest several people on Monday in connection with a federal investigation into so-called spoofing and manipulation in the U.S. futures market by three European banks, three people with direct knowledge of the matter told Reuters.
/goo.gl/RvpcTe

Deutsche Börse to spend EUR18m renovating the Frankfurt stock exchange
Philip Stafford in London – FT
The business may have long disappeared from its floor but for stock exchanges, the symbolism matters. Deutsche Börse on Monday said it was committing EUR18.5m to a three-year plan renovating and expanding its historic central Frankfurt bourse to build more links with investors and the general public.
/goo.gl/JeAPqz

Hedge Funds Go Bullish on Bitcoin Futures; Most recent CFTC report showed leveraged funds with 1,142 long positions in bitcoin futures, more than double the 518 short positions they held
By Alexander Osipovich – WSJ
Hedge funds have swung their bitcoin-futures bets to the bullish side for the first time, a marked turn around from a few weeks ago, according to figures released on Friday.
/goo.gl/15LCVZ

Crypto Investors Risk ‘Total Loss,’ Deutsche Warns
Stephan Kahl – Bloomberg
It’s only something for people who invest speculative: Mueller; Problematic issues include volatility and possible data loss
Deutsche Bank AG’s Wealth Management currently does not advise to invest in crypto-currencies, according to Markus Mueller, Global Head of Chief Investment Office. Problematic issues include high volatility, possible price manipulation and data loss or data theft, he told Bloomberg News in an interview.
/goo.gl/WprS3h

London’s Bankers Haven’t Been This Gloomy Since 2008
Gavin Finch – Bloomberg
Poll shows finance workers gloomiest since 2008 last quarter; Nine out of 10 firms see Brexit as risk to London’s dominance
Sentiment among London’s Brexit-hit bankers sank to its gloomiest depths since the 2008 financial crisis, a survey showed — a stark contrast to the bullish tone of finance executives gathered last week in Davos, Switzerland.
/goo.gl/gSo9jc

Chinese Investors Keep Losing Billions Online. Here’s Why.
Alexandra Stevenson – NY Times
The company’s name appeared in ads for the local marathon. Its logo was emblazoned on the jerseys of two professional soccer teams in Spain. Its founder had been lauded by the government’s official television channel.
/goo.gl/LByaqv

Wall Street to Vanguard: We’re Not Your Doormat; Fidelity makes it more expensive for some clients to invest in Vanguard funds, while others cut off access altogether
Sarah Krouse – WSJ
Wall Street is fighting back against Vanguard Group. In the past year, large financial firms including Fidelity Investments, TD Ameritrade and Morgan Stanley have all made changes to their fees or product lineups that make it more expensive for some customers to invest in Vanguard’s funds. In some cases, these firms have even made it impossible to invest in Vanguard mutual funds at all.
/goo.gl/jNq77m

The cryptocurrency market just suffered a theft worse than Mt. Gox
Mark DeCambre – MarketWatch
Bitcoin prices and the value of other cryptocurrencies dropped on Friday as Tokyo-based Coincheck Inc. revealed that as much as $530 million in digital assets had been stolen, eliciting shades of the Mt. Gox hack back in 2014.
/goo.gl/YxRXWW

How to Launder $500 Million in Digital Currency
Pavel Alpeyev and Yuji Nakamura – Bloomberg
Early Friday morning in Tokyo, hackers broke into a cryptocurrency exchange called Coincheck Inc. and made off with nearly $500 million in digital tokens. It’s one of the biggest heists in history, with the exchange losing more than 500 million of the somewhat obscure NEM coins. The hack has raised questions about security of cryptocurrencies around the world.
/goo.gl/FfE123

The Regulators Up Their Crypto Game
David Weisberger, CoinRoutes and ViableMkts – TabbForum
We were treated this week to an unprecedented event in the history of market regulation: a joint OpEd written by the heads of the two most powerful market regulators in the U.S. The reason for the piece is clear – they are concerned that the practices of the crypto community during the current crypto boom have gone too far, and the OpEd is clearly meant to be a wake-up call to an industry that is making too much money, too fast, for its own good.
/goo.gl/n61YN8

Massive Cryptocurrency Heist Spurs Call for More Regulation
Yuji Nakamura and Andrea Tan – Bloomberg
Coincheck says it was hacked, will reimburse customers; Regulators are grappling with booming crypto markets
At 2:57 a.m. on Friday morning in Tokyo, someone hacked into the digital wallet of Japanese cryptocurrency exchange Coincheck Inc. and pulled off one of the biggest heists in history.
/goo.gl/BjFka2

London’s Bankers Haven’t Been This Gloomy Since 2008
Gavin Finch – Bloomberg
Poll shows finance workers gloomiest since 2008 last quarter; Nine out of 10 firms see Brexit as risk to London’s dominance
Sentiment among London’s Brexit-hit bankers sank to its gloomiest depths since the 2008 financial crisis, a survey showed — a stark contrast to the bullish tone of finance executives gathered last week in Davos, Switzerland.
/goo.gl/gSo9jc

The Social Good of Bubbles – Part II
Tiffanie Bederman – Bantix
In my last post I discussed the need for a concrete definition of “bubble” if we’re to use the concept for trading/investing (as opposed to cocktail party hyperbole) and listed a few famous bubbles. These so-called bubbles (here I’m using the term to imply a rapid increase in price and a subsequent, dramatic decline) can roughly be attributed to three sometimes concurrent causes: New/Unexplored Frontier or Industry; Enabling Financial Conditions or Innovation; Fraud or Morally Questionable Business Practices.
/goo.gl/8SnC2p

****Part I here.

How the Finance Industry Is Trying to Cash In on #MeToo
Matthew Goldstein and Jessica Silver-Greenberg – NY Times
Accusations of sexual harassment have felled dozens of executives, but in one quiet corner of the financial world, the #MeToo movement looks like a golden opportunity.
/goo.gl/cvhyM7

The Hedge Fund Skirmish That Could Kill the CDS Market
Mary Childs – Barron’s
If you take an aggrieved hedge fund at its word, the fate of the credit-default swaps market is being determined right now.
/goo.gl/GRhPLr

U.S. Says Russian Gas Link Hurts European Security
Konrad Krasuski – Bloomberg
Tillerson says the U.S. joins Poland in opposing Nord Stream 2; U.S. wants to aid diversification of European energy supplies
The expansion of Russia’s gas pipeline to Germany under the Baltic Sea, which bypasses a number of east European nations, will allow the Kremlin to use energy as a “political tool,” U.S. Secretary of State Rex Tillerson said in Warsaw.
/goo.gl/K2LDAH

ATM makers warn of ‘jackpotting’ hacks on U.S. machines
Jim Finkle – Reuters
Diebold Nixdorf Inc and NCR Corp, two of the world’s largest ATM makers, have warned that cyber criminals are targeting U.S. cash machines with tools that force them to spit out cash in hacking schemes known as “jackpotting.”
/goo.gl/w4nCW9

Opinion: Blame bitcoin’s crash on these sharp new players
Atulya Sarin – MarketWatch
Futures trading provides a market for cryptocurrency bears
Futures trading in bitcoin opened the door for naysayers to participate in the trading market, which had previously been largely dominated by true believers. Now the naysayers have pushed bitcoin’s price down sharply. Since closing at a peak above $19,000 on December 18 — on the first day of futures trading — bitcoin has lost almost half of its value.
/goo.gl/C9LWWZ

Exchanges, OTC and Clearing

Frankfurt Stock Exchange Building becomes a focal point for the financial center; Deutsche Börse invests 18.5 million euros by 2020; Congress center and world of experience for the general public
Deutsche Börse
Deutsche Börse is expanding the historic building in the center of Frankfurt, which houses the well-known Börsensaal and the Frankfurt Chamber of Industry and Commerce (IHK), into an attractive point of contact for the Frankfurt financial center and the general public. To this end, the company is investing a total of 18.5 million euros in the expansion of the site by the beginning of 2020. The lease with the IHK Frankfurt, which owns the building, was completed by 2048.
/goo.gl/8H7FBp

Sun Trading to Utilise Cboe Europe Equities Systematic Internaliser Services
Cboe
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced that Sun Trading, a leading liquidity provider in the European equities market, will utilise Cboe Europe Equities’ suite of MiFID-II compliant Systematic Internaliser (SI) services, which include SI quote distribution, bilateral connectivity and matching services, and trade reporting.
/goo.gl/V1EoTo

Rebate-Hating ‘Flash Boys’ Exchange Offers Discount to Traders
Annie Massa – Bloomberg
IEX Group Inc.’s top executive once called the rebates his stock exchange rivals pay some customers the “biggest problem in markets.” Now, Brad Katsuyama’s company is introducing a discount program that’s puzzled some observers. The exchange, whose fight against parts of the market it viewed as unfair was made famous by Michael Lewis’s “Flash Boys,” argued the program it revealed Thursday isn’t conflicted like the one Intercontinental Exchange Inc.’s NYSE Group, Nasdaq Inc. and Cboe Global Markets Inc. use to entice traders.
/goo.gl/HAxiwF

Designing a Market Making Program for IEX
Eric Stockland, Chief Strategy Officer, IEX – Medium
One of the advantages of building a brand-new listings exchange is the opportunity to design our offering to solve market problems in a way that aligns with our principles. Part of our role as a listings exchange will be to support price discovery for IEX-listed stocks. As I’ve written before, the price of actual, completed trades?—?especially large trades at the midpoint?—?are the most valuable indications of the fair value of a stock because they show where real investors are willing to transact.
/goo.gl/ANJRTU

****Some people’s names perfectly fit a job in equities…

Japan Traders Piling Into Derivatives Set to Get New Options
Livia Yap – Bloomberg
BOJ policy, consumption-tax hike may lead to renewed interest; Flexible options have had limited success in HK, Australia
As the Japanese stock-market euphoria continues into the new year and traders increase spending on derivatives, the nation’s exchange is about to give them another tool to bet on the shares: flexible options.
/goo.gl/RWRb1r

Euronext to extend maize futures delivery to northern Europe
Reuters
Euronext plans to create delivery points for its maize (corn) futures contract in northern Europe as part of a focus on improving its core commodity contracts.
/goo.gl/iBme5d

Coincheck quizzed over reimbursement plans after $500m heist; Japan’s Financial Services Agency unsure if hacked exchange is able to repay customers
Robin Harding in Tokyo – FT
Japanese financial authorities say that it is no clear whether Coincheck has enough cash to cover a $500m theft amid questions over the future of the hacked cryptocurrency exchange.
/goo.gl/YMdG38

Aramco IPO Stalled by Indecision Over Where to List; Saudi Arabia’s state-owned oil producer continues to weigh risks of listing in New York, London, Hong Kong or locally
Maureen Farrell, Summer Said and Benoit Faucon – WSJ
Two years after Crown Prince Mohammed bin Salman announced his intention to turn Saudi Arabia’s state-owned oil producer into the world’s largest public company, the kingdom and its advisers remain stuck on the crucial question of where to list the shares.
/goo.gl/oUYUdn

The Coincheck Cryptocurrency Hack: Everything You Need to Know
Reuters
Hackers have stolen roughly 58 billion yen ($532.60 million) from Tokyo-based cryptocurrency exchange Coincheck, raising questions about security and regulatory protection in the emerging market of digital assets.
/goo.gl/sqiFeG

Admissible Eurex Clearing collateral securities: Update of parameters effective 1 February 2018
Eurex
With this circular we provide an overview of the parameters which will come into effect after the batch run on 1 February 2018.
/goo.gl/V2C91a

Fintech

CloudMargin Named to List of 100 Most Influential FinTech Companies for 2018
PR Newswire
CloudMargin, the multi-award winning creator of the world’s first web-based collateral and margin management solution, announced today that the firm has been named to Harrington Starr’s Definitive List of the 100 Most Influential FinTech Companies for 2018. The list includes a mix of start-ups and well-known companies in the financial technology space. The full list of financial technology companies expected to create a significant impact in 2018 was just published in the first quarter issue of The Financial Technologist magazine.
/goo.gl/gLH679

Fintech Targets Fixed Income
Shanny Basar – Markets Media
Fintech firms will continue to target the bond market as trading becomes more electronic and regulations change how firms approach data and reporting according to consultancy Aite Group. Audrey Blater, senior research analyst at Aite Group, said in a report that the number of electronic bond trading venues and trade flow technology providers will increase this year. The study, Developments in Electronic Bond Trading: What to Expect in 2018, predicted that exchanges and banks will partner with existing fintech firms and invest in proprietary technology, while new entrants will develop workflow and data aggregation products.
/goo.gl/5cbLCX

One Thing Is Clear From Davos, Blockchain Is Out Of Beta
Dante Disparte – Forbes
Under the decidedly grim moniker creating a shared future in a fractured world, the world’s elite gathered in Davos, Switzerland for the annual meetings of the World Economic Forum. Awaiting the arrival of President Donald Trump, delegates were regaled with prognostications about the state of the global economy and whether national retrenchment would signal the end of multilateralism as we know it. While Trump’s remarks on the closing day of the Forum signaled that America first does not necessarily mean America alone, there was one sub-theme that echoed throughout the snow-covered mountains of Davos – Blockchain, Blockchain, Blockchain.
/goo.gl/opJ4Ln

Someone Created A Cryptocurrency Based On Bananas; There’s always money in the Bananacoin stand.
Andy McDonald – Huffington Post
This sounds like a bad line in a “Planet of the Apes” film, but there’s now a cryptocurrency based on bananas.
/goo.gl/5FBPZU

Starbucks Chairman Says Cryptocurrency Will Be Big — Just Not Bitcoin
Time.com
Starbucks Corp. Chairman Howard Schultz said he believes digital currency will catch on with consumers, though not necessarily Bitcoin.
/goo.gl/ErZZ58

Cryptocurrency trader ‘forced at gunpoint to make bitcoin transfer’; Police seek witnesses after four armed men break into family home in Moulsford, Oxfordshire
Maev Kennedy – The Guardian
Armed men broke into the family home of a cryptocurrency trader and are believed to have forced him at gunpoint to transfer holdings of the virtual currency bitcoin.
/goo.gl/xACSyo

Fluent Expands FX Technology Platform To Include Post-Trade And Credit API
Mondovisione
New Suite of Services Combines Post-Trade, At-Trade Credit and Kill Switch APIs, and Pre-Trade Risk Management on One Platform
Fluent Trade Technologies (Fluent) today announced that it has enhanced its market-leading trading technology platform by launching ‘Post-Trade’ risk management services and ‘At-Trade’ venue Credit and Kill Switch APIs. These new services are hosted on the same platform as Fluent’s existing Pre-Trade risk controls, providing clients with a complete suite of FX risk management and control services.
/goo.gl/FLbYKy

Duco Announces $28m Growth Investment for Data Engineering in the Cloud
Business Wire
Duco, the data engineering technology company, today announced the completion of a $28m investment round by Insight Venture Partners, NEX Opportunities and Eight Roads Ventures. The round also includes an investment by lifetime entrepreneur and former CEO of SunGard, Cristóbal Conde.
/goo.gl/kUYzsz

FlexTrade Integrates BestX Trade Analytics Into FlexTRADER EMS – Enhances FX Best Execution Capabilities Under MiFID II
Mondovisione
FlexTrade announced the integration of the BestX trade analytics solution for FX within its FlexTRADER EMS. With a fully interactive interface, users can use BestX to analyse their FX executions in real-time, delivering transparency to enable better decision making whilst meeting the needs of MiFID II compliance for FX trading.
/goo.gl/rYkQDp

FlexTrade Integrates OTAS Trading Intelligence And Analytic Solutions Into FlexTRADER EMS
FlexTrade
FlexTrade Systems, Inc. announced the integration of OTAS Apps and Alerts, including Core Summary, Microstructure, Stacked Graph, Lingo, Express and News with FlexTRADER EMS. The flexible integration ensures all current and future OTAS Apps will be available in FlexTRADER EMS.
/goo.gl/Tk4Wmx

Politics

How the Opioid Crisis and the Trump Administration Are Changing Middle America’s Economy
By Tracy Alloway and Joe Weisenthal – Bloomberg
Every week, hosts Joe Weisenthal and TracyAlloway take you on a not-so-random walk through hot topics in markets, finance and economics.
/goo.gl/fiZhbf

Trump’s attack on the FBI is an attack on the US constitution itself
Jill Abramson – The Guardian
Since his election, revelations of Donald Trump’s contempt for the legal process have been dizzying. The rule of law is what protects democracy in the United States. The president has done everything possible to subvert it.
/goo.gl/RKQy2e

Russian bots retweeted Trump nearly 500,000 times in final weeks of 2016 campaign
Donie O’Sullivan – @CNNMoney
Russian-linked automated Twitter accounts, or bots, retweeted Donald Trump almost half a million times in the final weeks before the 2016 U.S. presidential campaign, Twitter told the Senate Judiciary Committee.
/goo.gl/hLukaj

Regulation

Japan raps Coincheck, orders broader checks after $530 million cryptocurrency theft
Taiga Uranaka, Thomas Wilson – Reuters
Japan’s financial regulator said on Monday it would inspect all cryptocurrency exchanges and ordered Coincheck to get its act together after hackers stole $530 million worth of digital money from its exchange in one of the biggest cyber heists on record.
/goo.gl/x8aHeJ

Philippines to develop rules on cryptocurrency trading
Reuters Staff
The Philippines’ Securities and Exchange Commission said on Monday it is crafting rules to regulate cryptocurrency transactions to protect investors and reduce the risk of fraud.

ASIC reports on the 2017 annual general meeting season
ASIC
ASIC today published its overview of the annual general meeting (AGM) season for S&P/ASX 200 (ASX 200) listed companies in 2017.
/goo.gl/VLeLVa

ESMA draws issuers’ attention to IAS requirements following introduction of new tax legislation in the US
ESMA
Following the signing of the United States Tax Cuts and Jobs Act (the Act), significant changes in US tax laws took effect on 1 January 2018. The European Securities and Markets Authority (ESMA) has become aware of concerns expressed by EU issuers with respect to the accounting for the effects of the Act in their IFRS financial statements.
/goo.gl/WDtgfR

FCA warns of increased risk of online investment fraud, as investors lose £87k a day to binary options scams
UK FCA
Online overtakes phone as most common contact method for investment fraudsters
The Financial Conduct Authority (FCA) is today urging the public to be vigilant to the threat of online investment fraud. Fraudsters offering investments in binary options, contracts for difference (CFDs), forex and cryptocurrencies* (such as Bitcoin) often promote themselves online and via social media channels, such as Facebook, Instagram and Twitter. They typically promise high returns and use images of luxury items, like expensive watches and cars, to entice people to invest in their scams. After someone has invested, they distort prices on their website, tie people in with extreme pay-out clauses and even close customer accounts, refusing to pay back their money. This call comes as the regulator reveals that last year investors lost £87,410** per day to binary options scams.
/goo.gl/nCGqgj

Investing and Trading

Investor Thirst for Foreign Stocks May Be Speeding Dollar’s Decline; Share of U.S. equities in global portfolios has fallen back to near its lows in early 2016
Riva Gold – WSJ
Global investors are shifting more of their money overseas, betting that even as the U.S. stock market reaches new highs a resurgent global economy creates greater opportunities elsewhere.
/goo.gl/Zyfmeu

Cargill hunts for scientists to use AI and sharpen trade edge; From shipping patterns to sound of shrimp eating, group eyes data to boost profits
Gregory Meyer in New York – FT
Cargill, the agricultural trading titan, is hiring data scientists to find ways to profit from the scraps of information picked up as food commodities flow through its factories, silos and ports.
/goo.gl/g1QSc3

Dell Has 49 Billion Reasons to Consider Going Public Again
Dina Bass and Molly Smith – Bloomberg
Cost of Dell debt is rising, new tax bill caps deduction; Private equity firm Silver Lake may also be seeking an exit
When Michael Dell led a group taking his company private four years ago, he extolled the virtues of shading the company from the scrutiny of the public markets. Now he’s considering taking the computer maker public again.
/goo.gl/2k2Kgs

Lured by Market Records and Hot Bets, Individual Investors Finally Dive In; Discount brokerages report surging trading volume, particularly among younger clients, in part due to interest in cryptocurrencies and cannabis
Lisa Beilfuss – WSJ
After sitting out most of the nearly nine-year bull market, individual investors are finally pouring in.
/goo.gl/fP4skk

Too Much Testosterone Is Bad for Returns; Also crypto-hedging, index funds and airlines, Outcome Health, email lists and the VIX.
Matt Levine – Bloomberg
Alpha. Great title, great abstract: Here’s “Do Alpha Males Deliver Alpha? Testosterone and Hedge Funds,” by Yan Lu and Melvyn Teo.
/goo.gl/Z79Vqe

Institutions

Asset management’s fight for ‘alternative data’ analysts heats up; Asset managers bolster ability to analyse alternative sources such as satellite data
Robin Wigglesworth in New York – FT
Investment groups have more than quadrupled their number of “alternative data” analysts over the past five years, as asset managers scramble to unlock the potential of trading signals contained in website scrapes, language analysis, credit card purchases and satellite data.
/goo.gl/xpvMGB

UBS bankers ‘frustrated’ with growth on Wall St; Insiders remain optimistic because of strategic hires and new global wealth business
Laura Noonan in Dublin and Ben McLannahan in New York – Ft
Senior management at UBS is “immensely frustrated” at the bank’s slow growth on Wall Street.
/goo.gl/4cJEVH

Goldman Sachs Invests in Pea Milk Startup
Olivia Zaleski – Bloomberg
Goldman Sachs Group Inc. participated in a $65 million investment in Ripple Foods Inc., a little-known beverage company that makes a milk-like drink from yellow peas.
/goo.gl/qDrh6M

Now Clients Ask: Got Anyone Other Than White Males?
David Hellier , Ruth David , and Thomas Buckley – Bloomberg
Big British companies want more diversity from suppliers; Financial advisers, PR firms judged on inclusive workplaces
When the co-founder of a London communications group was invited to pitch for business with a Wall Street firm last November, the offer came with an unusual demand.
/goo.gl/QTDfmB

How Goldman Sachs Is Regaining Its Touch
Jack Hough – Barron’s
Lloyd Blankfein is careful about mentioning the word “cyclical” these days.
/goo.gl/q28CzL

Active fund managers beat market by just 16p for every £100 invested; Fund houses skim off three-quarters of the value they create for pension clients
Owen Walker – FT
Pension schemes that used active fund managers over the past quarter of a century were rewarded?.?.?.?but only by 16p a year for every £100 they invested.
/goo.gl/bpT5AJ

Nomura Recharges U.S. Coverage With New Investment Bankers
Japanese bank looks to restart international growth in the Americas
By Austen Hufford – WSJ
Nomura Holdings Inc. has hired 15 senior investment bankers in the U.S. as the Japanese bank looks to restart international growth in the Americas.
/goo.gl/FosVp2

Regions

Investors look to France’s ‘Macronomics’ to beat benchmarks
Leigh Thomas – Reuters
Investors are banking on an economic renewal under President Emmanuel Macron to beat broader European benchmarks, sparking a flood of cash into funds offering exposure to France.
/goo.gl/VVCmZL

Japan’s Cryptocurrency Whiz Kid Faces $530 Million Reckoning; Financial Services Agency says Coincheck should establish an effective risk-management system
Takashi Mochizuki – WSJ
In Japan’s stodgy financial world, young entrepreneur Koichiro Wada wanted to make a splash.
/goo.gl/3i63Hd

Saudi Purge Puts Investments at Risk as Uncertainty Lingers
Sarah Algethami and Archana Narayanan – Bloomberg
Cost of insuring Saudi debt may rise if doubt persists: MUFG; Prince Alwalweed and others freed from Ritz over the weekend
Saudi Arabia’s corruption clampdown has everyone guessing what’s next, risking investments into the kingdom, according to the head of Middle East and North Africa research at Japan’s biggest bank.
/goo.gl/QLvwFB

Saudis Release Prince al-Waleed, One of the World’s Richest Men; Saudi officials say the prince reached a settlement that allows him to remain chairman of Kingdom Holding
Summer Said and Benoit Faucon – WSJ
Saudi authorities on Saturday released billionaire Prince al-Waleed bin Talal, more than two months after he was detained in a widespread purge of the kingdom’s elite.
/goo.gl/MJe3e1

Intel Warned Chinese Companies of Chip Flaws Before U.S. Government; Decision to disclose issue to select few customers, including Lenovo and Alibaba, has ripple effects through security and tech industries
Robert McMillan in San Francisco and Liza Lin in Shanghai – WSJ
In initial disclosures about critical security flaws discovered in its processors, Intel Corp. INTC 10.55% notified a small group of customers, including Chinese technology companies, but left out the U.S. government, according to people familiar with the matter and some of the companies involved.
/goo.gl/FwATpV

Hong Kong’s London Love Affair; Office property is underpinned by a weaker pound and higher yields.
Nisha Gopalan – Bloomberg
Brexit’s pending arrival has some companies pulling out. Hong Kong investors are going the other way.

Japan’s Central Bank Sees No Need to Mint a Digital Currency
Toru Fujioka and Masahiro Hidaka – Bloomberg
Circulation of notes, coins highest among developed nations; Bitcoin is being traded for speculation, BOJ’s Kawai says
Cash is still king in Japan, and that means that the central bank doesn’t see a need to mint a digital currency for now, according to the head of the FinTech Center at the Bank of Japan.
/goo.gl/BR4Hrv

India Inc is skipping the stock market party. Nobody is sure why
Nupur Anand – Quartz India
(It’s been a spectacular year for the Indian stock markets. But, somehow, corporates aren’t cashing in. This has left India’s chief economic advisor Arvind Subramanian puzzled.
/goo.gl/zmnkgo

Brexit

‘Door is open’ if Britain wants to change mind on Brexit, says EU’s Moscovici
Reuters Staff
The “door is open” should Britain want to reverse its 2016 vote to leave the European Union, Pierre Moscovici, the European Commissioner for Economic and Monetary Union, told French media in an interview on Sunday.
/goo.gl/k2TmQP

Challenged on all fronts, Britain’s May faces pressure over Brexit law
Elizabeth Piper, Andrew MacAskill – Reuters
British Prime Minister Theresa May came under further pressure over her Brexit blueprint on Monday, with members of the upper house of parliament saying there were “fundamental flaws” in a law crucial to the departure.
/goo.gl/1Vhevp

Miscellaneous

Arsenal FC partners with iGaming firm ahead of ICO
Ricardo Esteves – The Industry Spread
Premier League football club Arsenal FC is the first top sports club to partner with a company linked to cryptocurrencies after having announced a deal with CashBet, an iGaming platform that is about to have its Initial Coin Offering (ICO) of its new cryptocurrency, CashBet Coin.
/goo.gl/KybzKg

****Huh?~SD

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About Author

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