Hits & Takes
It is with sadness I report the passing of Betty Bergstrom, mother of my wife, Cheryl Lothian and of my brother-in-law and JJLCO CIO, Jeff Bergstrom. She died Saturday in Chicago at the age of 86.
Via the funny SEC office in Forth Worth’s Twitter feed: If you have a problem hoarding old magazines, then it’s clear that you have issues.~JJL
The Monetary and Fiscal History of Latin America
Becker Friedman Institute
Since 2014, the Becker Friedman Institute (BFI) has sponsored a project to investigate the economic histories of 11 Latin American countries. At a December event sponsored by BFI’s Macro Financial Research Initiative (MFRI), a diverse group of scholars gathered at UChicago to present their research and work toward the goal of publishing their completed work. For more on this groundbreaking effort and BFI’s goals for the project, please read “The Riddle of Latin American Economies.”
***** I love a good riddle.~JJL
North Pole surges above freezing in the dead of winter, stunning scientists
Jason Samenow – Washington Post
The sun won’t rise at the North Pole until March 20, and it’s normally close to the coldest time of year, but an extraordinary and possibly historic thaw swelled over the tip of the planet this weekend. Analyses show that the temperature warmed to the melting point as an enormous storm pumped an intense pulse of heat through the Greenland Sea.
****** Life is starting to look like a bad movie.~JJL
R.J. O’Brien Wins 2018 CTA Intelligence US Services Award
for Best FCM – Client Service for Second Consecutive Year
Chicago-based R.J. O’Brien & Associates (RJO) announced that for the second consecutive year, the firm won the award for “Best FCM – Client Service” at the CTA Intelligence U.S. Services Awards 2018.
***** A very smart win by RJO.~JJL
Tuesday’s Top Three
Our top read piece of the day on Tuesday was Bloomberg’s Self-Proclaimed Bitcoin Inventor Accused of Swindling $5 Billion of Cryptocurrency. Second was the announcement Mark Phelps to Become Group CEO of G. H. Financials, Succeeding Mark Ibbotson Who Becomes Non-Executive Chairman. Third went to the Wall Street Journal’s CFTC Steps Up Enforcement Against Fraud, Market Manipulation
|MarketsWiki Statistics Sponsored by Level Trading Field|
Bitcoin-Futures Regulator Clears Employees to Trade Crypto Coins
Robert Schmidt – Bloomberg
CFTC allows investments after ‘numerous’ employee inquiries; Critics say agency’s move could lead to lax oversight
The U.S.’s main commodities regulator recently told its employees that they are allowed to invest in cryptocurrencies, a determination that came weeks after the agency began overseeing Bitcoin futures.
Coinbase made 43 percent of its 2017 revenue in December alone; The company’s $1 billion annual revenue may be difficult to repeat
Adrianne Jeffries- The Verge
The digital currency exchange and wallet service Coinbase, founded in 2012 and backed by Silicon Valley investors, recently told shareholders that it booked $1 billion in revenue in 2017. A new independent analysis says about 43 percent of that came in December when the price of bitcoin was surging, and the company’s revenue has plummeted since then.
Exclusive: U.S. regulators examine Wall Street’s Volcker rule wish list
Pete Schroeder – Reuters
U.S. regulators are considering changes to the “Volcker rule” that Wall Street has sought for years, including eliminating big banks’ responsibility to prove they do not trade on their own account, according to several regulatory and industry sources.
Feds charge 24-year-old Chicago trader in first crypto-fraud case
A 24-year-old trader who considered himself “invincible” according to federal investigators has become the first target of a criminal fraud prosecution involving “cryptocurrency,” after allegedly siphoning $2 million in Bitcoin and Litecoin from his Chicago employer.
Joseph Kim, whose bio lists him as a 2016 graduate of University of Chicago, is charged with fraud against Consolidated Trading LLC.
**We missed this story, dated February 16.
CMC Markets joins QuantHouse’s API initiative; QuantHouse adds CMC Markets to API ecosystem providing access to its trading platform.
Hayley McDowell – The Trade
QuantHouse has added CMC Markets to its application programming interface (API) initiative, providing access to the firm’s trading platform to the ecosystem.
Bitcoin exchange Coinbase is handing over user information to the IRS
Kari Paul – MarketWatch
If you’ve made thousands or even millions of dollars on cryptocurrencies, be sure to report your winnings to the Internal Revenue Service before someone else does it for you.
Goldman Sachs, Adviser to the Elite, Wants to Be Your Local Bank; The Wall Street powerhouse is planning to sell insurance, mortgages and car loans, consumer businesses it once disdained
Liz Hoffman and Peter Rudegeair – WSJ
Goldman Sachs Group Inc. has come to Main Street. In a glass-walled tower in Utah’s capital, hundreds of Goldman employees are building what amounts to one of the world’s most ambitious consumer-finance startups.
Bitcoin is just the beginning, says one of the futures market’s biggest players
Aaron Hankin – MarketWatch
Clients are inquiring about Litecoin and Ripple futures, Wedbush executive says
Bitcoin futures made their debut more than two months ago. Amid a sea of critics, the market has avoided controversies and perhaps conferred a modicum of legitimacy on cryptocurrencies.
JPMorgan urges Fed to loosen capital shackles; Bank’s chief financial officer says measures are hindering its ‘capacity to grow’
Ben McLannahan in New York – FT
JPMorgan Chase has urged the Federal Reserve to loosen capital shackles on the biggest global banks, saying that rigid rules drawn up in the wake of the crisis could become a “barrier to growth” in the world’s largest economy.
Jay Powell jolts markets with reminder he is no academic; Powell breaks with recent pattern of central bank chiefs coming from academia
John Authers – FT
Jay Powell has introduced himself to the markets. And it looks like the markets did not like what they heard. If we go by Fed Funds futures prices, the odds of at least three rate rises this year, and of at least four, have both risen to a new high.
Exchanges, OTC and Clearing
Cboe Announces Successful Migration of Cboe Futures Exchange to Proprietary Technology Platform
Cboe Futures Exchange (CFE) is first legacy Cboe platform to transition to Bats technology; Nearly 160,000 contracts traded, 98 trading firms trade on launch day; Cboe’s C2 exchange on track to migrate to Bats technology on May 14, 2018; Migration date of Cboe Options Exchange to be announced in April
Cboe Global Markets Announces Additional $150 Million in Share Repurchase Authorization
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, announced today that its Board of Directors has authorized the company to repurchase up to an additional $150 million of its outstanding common stock, effective immediately.
Streamlining MOC trading with an on-exchange solution
How using Eurex Market-on-Close (MOC) Futures can confine poor execution to the past and help minimize tracking error
Report on Initial Public Offering Applications, Delisting and Suspensions (As at 28 February 2018)
Presentation by HKEX Chief Executive Charles Li and Group Chief Financial Officer John Killian on 2017 Final Results Announcement
HKEX 2017 Consolidated Financial Statements
HKEX 2017 Final Results
SGX Welcomes OTCex Hong Kong Limited as Derivatives Trading Member
Singapore Exchange (SGX) welcomes OTCex Hong Kong Limited to its derivatives market as a Trading Member. Focused on creating multi-product brokerage service on an international scale, OTCex Hong Kong Limited is an inter-dealer broker specialising in equities and derivatives products. It is part of the OTCex Group headquartered in Paris, with a global client base of over 600 institutions including banks, asset managers, hedge funds and market makers.
International Blockchain Conference Returning to Raleigh; Industry Leaders to Focus on the Building the Blockchain and Token Market
The Cryptolina Blockchain Expo will be returning to the Triangle in June 2018. First conceptualized in 2013 in North Carolina, Cryptolina is one of the longest running blockchain conferences in the United States. The first expo was held in Downtown Raleigh in August 2014 and was followed up with a second in Uptown Charlotte in August 2015.
Blockchain Tech Leaders to Attend BII Summit in Dubai
The upcoming Blockchain Innovation and Investment Summit (BII Summit) will feature speakers and sponsors representing Blockchain companies and start-ups such as Ultroneum from Malaysia, Unibright from Germany, Evareium from the UAE, DateCoin from Russia, Shopin from USA and a host of others.
Mana Partners taps Metamako’s low-latency exchange connectivity; US electronic trading and asset management firm deploys Metamako’s exchange connectivity service.
Hayley McDowell – The Trade
New York-based electronic trading and asset manager Mana Partners has implemented Metamako’s low-latency exchange connectivity service.
Bill Gates Says Cryptocurrencies Have Caused Deaths
Lucinda Shen – Fortune
Though the philanthropy under Bill Gates’ name has partnered with cryptocurrency firm Ripple in a bid to help the unbanked, the world’s second richest man said Tuesday that the main feature of Bitcoin and its ilk is not a “good thing.”
‘It Just Felt Like a Miracle’: Small Groups Win Big in Bitcoin Donor’s $56 Million Giving Spree
Drew Lindsay – Philanthropy.com
One day in January, Linda Tannenbaum opened an email that would radically change her small, medical-research charity almost overnight. The note said that her organization would soon receive a gift of $1 million, to use as it saw fit.
Trump campaign chief lends name to penny stock tied to felon
The political strategist and online guru who was named President Donald Trump’s 2020 campaign manager Tuesday has a close financial relationship with a penny-stock firm with a questionable history that includes longstanding ties to a convicted fraudster, according to an Associated Press investigation.
Former Trump Adviser Dina Powell Is Returning to Goldman Sachs
Dakin Campbell, Jennifer Jacobs – Bloomberg
Dina Powell, a former deputy national security adviser to President Donald Trump, is returning to Goldman Sachs Group Inc. and will be a member of the investment bank’s management committee.
Kushner’s overseas contacts raise concerns as foreign officials seek leverage
Shane Harris, Carol D. Leonnig, Greg Jaffe and Josh Dawsey – Washington Post
Officials in at least four countries have privately discussed ways they can manipulate Jared Kushner, the president’s son-in-law and senior adviser, by taking advantage of his complex business arrangements, financial difficulties and lack of foreign policy experience, according to current and former U.S. officials familiar with intelligence reports on the matter.
CFTC Chairman Giancarlo to Participate in a Fireside Chat at the IIB Annual Washington Conference
TCA use surges among equity buy-side traders; TCA on buy-side equity trading desks no longer considered an optional feature, but a necessity in new regulatory environment.
Hayley McDowell – The Trade
Regulatory upheaval has resulted in a surge in the use of transaction cost analysis (TCA) on buy-side equities desks, according to new research.
Tyson Foods sentenced after September guilty plea
Tyson Foods Inc’s poultry unit was sentenced in federal court in Missouri on Tuesday after pleading guilty in September to two criminal charges stemming from discharged feed supplement at a company facility, the U.S. Justice Department said.
ASIC requires boutique research provider to improve conflicts of interest disclosure
The Australian Securities and Investments Commission (ASIC) has required research provider Far East Capital Limited (FEC) to include specific, prominent and meaningful conflicts of interest disclosure in its research reports.
ASIC’s latest enforcement report highlights outcomes from the second half of 2017
ASIC has today released its enforcement outcomes report for the period 1 July 2017 to 31 December 2017.
STEVEN MAIJOOR SPEECH AT THE SECOND ANNUAL FINTECH AND DIGITAL INNOVATION CONFERENCE
The Chair of the European Securities and Markets Authority (ESMA), Steven Maijoor, delivered a keynote speech at Afore Consulting’s Second Annual FinTech and Digital Innovation Conference in Brussels on 27 February.
SEC Announces Agenda for March 8 Investor Advisory Committee Meeting; Welcomes New Members Jennifer Marietta-Westberg and Heidi Stam
The Securities and Exchange Commission today announced the agenda for the March 8 meeting of its Investor Advisory Committee. The meeting will begin at 9:30 a.m. in the Multipurpose Room at SEC headquarters at 100 F Street, NE, Washington, D.C. and is open to the public. The meeting will be webcast live and archived on the committee’s website for later viewing.
Investing and Trading
City Officials Want Chicago to Become a Responsible Investor; Proposed legislation would allow environmental, social and governance factors to be used in investment decisions
Sarah Krouse – WSJ
Officials in the nation’s third-largest city want to make a company’s record on issues like water usage, labor rights and diversity as important as creditworthiness when deciding how to invest its $8 billion operating budget.
Pimco launches new front in fight over Novo Banco bonds; Portuguese authorities are investigating 2015 debt sale to US asset manager
Robert Smith in London and Peter Wise in Lisbon – FT
Pimco is seeking compensation for damages stemming from alleged insider trading of Novo Banco bonds, marking the latest chapter in a bitter and long-running dispute between international investors and the country’s central bank.
Investors Are Paying $1,300 Per Hour for ‘Expert’ Chats
Julie Edde, Nishant Kumar, Suzy Waite, Bloomberg
Firms that link investors to experts seize on new MiFID law; Some networks were abused in U.S. insider trading scandals
They may be cutting research budgets, but European investors are more willing than ever to dole out up to $1,300 an hour to talk to someone who can give them an edge.
Opinion: Why I think the conventional wisdom is wrong about hedge funds
Jared Dillian – MarketWatch
Professional money management keeps volatility in check and manages drawdowns in the markets — things you don’t get in passive investing
Hedge-fund guys aren’t well-liked, which I find interesting. Most people don’t even know what a hedge fund is. And if they knew, they probably wouldn’t care. Who cares about running money for Richie Rich? But it’s not that simple.
JPMorgan Joins BofA in Quiet Warning: Crypto Could Disrupt Banks
Hugh Son – Bloomberg
JPMorgan Chase & Co. just weighed in again on virtual currencies — very discreetly. It’s not a prediction. And it doesn’t speak to Chief Executive Officer Jamie Dimon’s own declarations on Bitcoin — which he once called a “fraud,” and then later reconsidered, saying the underlying technology is “real.”
Goldman Sachs investment chief: Bitcoin is definitely a bubble, Ethereum even more so
Kara Chin and Jacqui Frank – Business Insider
Sharmin Mossavar-Rahmani is the CIO of the Private Wealth Management Group at Goldman Sachs where she guides the investment strategy for clients with over $10 million in assets. Mossavar-Rahmani joined Business Insider’s Sara Silverstein to discuss cryptocurrencies. Following is a transcript of the video.
Exclusive: U.S. hedge fund Magnolia Road shuts down after struggling to raise capital
Svea Herbst-Bayliss – Reuters
Jame Donath plans to shutter his Magnolia Road Capital, the latest casualty in the $3 trillion hedge fund industry where many small firms are struggling to attract and retain capital, according to a letter seen by Reuters.
Buoyant markets lift Fidelity to record $5.3bn income; Chief defends ‘value’ of active management despite $47bn pulled from equity funds
Robin Wigglesworth in New York – FT
Fidelity made a record $5.3bn in operating income last year, a 54 per cent jump from 2016, as buoyant financial markets and a turnround in performance of its fund manager lifted the investment group’s results.
ProShares ETFs decrease leverage after market turmoil; Action on two funds is viewed as an attempt to limit possibility of extreme price moves
Joe Rennison in New York – FT
The operator of two exchange traded funds blamed for exacerbating the recent stock market volatility is decreasing their leverage, in what is seen as an attempt to stop a similar situation from happening again.
Man Group touts record inflows and 35% jump in assets
Jennifer Thompson – FT
Man Group reported record inflows in 2017 as investors poured money into both quant strategies and the discretionary trading unit of the world’s largest publicly traded hedge fund group.
Jamie Dimon’s Had Enough of Meetings
Shareholder and board meetings are a good check on a dominant CEO.
Lionel Laurent – Bloomberg
Anyone who has attended the shareholder meeting of a Fortune 500 company will have felt a twinge of agreement at JPMorgan Chase & Co. CEO Jamie Dimon’s characterization that they are a waste of time.
Scandals Washing Over Corporate India Give Investors Pause
Ari Altstedter, Anirban Nag – Bloomberg
Allegations dent India’s ability to win investor confidence; Business culture is opaque and dominated by powerful families
In India, the name of billionaire jeweler Nirav Modi was once synonymous with glamour and the good life. It could be seen on billboards next to Bollywood starlets, and his diamond-studded creations were sold as far as New York’s Madison Avenue. Now, the name is synonymous with allegations of fraud.
Cocaine Bust Is the Latest Sign of Putin’s Weakness; A foiled cocaine shipment from Argentina helps build Russia’s reputation as a mob state.
Leonid Bershidsky – Bloomberg
The mind-boggling news story of cocaine-filled suitcases at the Russian embassy school in Buenos Aires demonstrates that the tolerance President Vladimir Putin’s regime has shown for all kinds of moonlighting and freelancing by its servants has gone too far. The regime needs to find a way to curb it; otherwise it will end up being treated as a criminal organization.
Fraud at Indian bank spurs calls for privatisation; Critics say scam highlights rot in state lenders and need for change
Amy Kazmin in New Delhi – Ft
In 1969, India’s then prime minister, Indira Gandhi, transformed the country’s banking landscape when she nationalised its 14 biggest commercial lenders, which together accounted for around 70 per cent of the system’s deposits.
Xi’s power grab means China is vulnerable to the whims of one man; Autocracy is a risky system, even in a country with a solid bureaucratic tradition
Martin Wolf – FT
Sometimes an announcement succeeds in being both unsurprising and shocking. It had long been evident that China’s Xi Jinping would not — indeed, could not — step down from power. He has made too many enemies, particularly through his anti-corruption campaign, even if he wanted to go, which seems unlikely.
People in Sweden Now at Risk of Losing Access to Notes
Hanna Hoikkala, Amanda Billner – Bloomberg
People living in the world’s most cashless society may soon lose their access to notes and coins.
This African Super Grain Could Solve Famine and Drought (Plus It’s Gluten-Free)
Fonio is the talk of the grain world.
Richard Morgan – Bloomberg
Last July, a Whole Foods store in New York’s Harlem decided to stock bags of fonio, a West African grain similar to couscous. The first shipment sold out in three hours. Just last week, Los Angeles Lakers forward Luol Deng hosted a fonio party at his home. It’s the hottest grain you’ve never eaten.
May Says No U.K. PM Could Agree to EU Draft Deal: Brexit Update
Emma Ross-Thomas, Ian Wishart, Nikos Chrysoloras- Bloomberg
February 28, 2018, 5:26 AM CST Updated on February 28, 2018, 6:53 AM CST
The European Union on Wednesday published the draft legal text that will form the basis for the Brexit divorce treaty. It’s explosive, particularly on the issue of the Irish border, and U.K. Prime Minister Theresa May plans to reject parts of it.
Facebook’s algorithm has wiped out a once-flourishing digital publisher
South China Morning Post
LittleThings had quickly amassed a big following on Facebook, but a recent algorithm tweak had throttled its traffic severely, causing its profit to plummet, the company says
Google receives 2.4m requests to delete search results; Search engine reveals impact of Europe’s ‘right to be forgotten’ rules
Aliya Ram in London – FT
Google has received 2.4m requests over the past three years to delete search engine results under Europe’s “right to be forgotten” rules, highlighting the challenge it is likely to face under even tougher new data protection regulations.