Breaking News

Finance chiefs warn on Big Tech; Trading venues buzzing; China to stamp out cryptocurrency trading

First Read

Hits & Takes
JLN Staff

Richard Sandor has a new book coming out, “Electronic Trading & Blockchain: Yesterday, Today and Tomorrow.” The book tells the story of his experience leading the first project to design and establish an electronic trading platform and for-profit exchange when he taught at Berkeley in the late 1960s.

Included in the book are chapters from leaders in digital assets, including Don Wilson and Don Tapscott.

Doc Sandor gives Jim Kharouf and I a tip of the hat in the book as we are mentioned as leading figures in the financial press covering the impact of blockchain on the financial markets.

The book will be published in the last part of the first quarter of 2018.~JJL

(Click for larger image)

INTL FCStone Inc. today announced that it will convene its inaugural Global Markets Outlook Conference on March 7-9, 2018 at the Hard Rock Hotel and Casino in Las Vegas.~JJL

Cboe Global Markets’ market services, aimed at MiFID II compliance, reported that Cboe Periodic Auctions notional volume was up 885 percent in January and the Large in Scale block trading facility was up 46 percent.~JK

Rumi Morales is the headline speaker at a Chicago SunTimes event to be held at 1871 in Chicago titled “The Basics of Blockchain & Bitcoin.” The event will be on March 1 from 6:30 to 8:30 PM at 1871 at 222 West Merchandise Mart Plaza #1212. Sign up is HERE.~JJL

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Bridging the Week by Gary DeWaal: January 29 to February 2, and February 5, 2018 (Spoofing; FCMs; Software Development; ICOs; Block Trades; Position Limits)
Katten Muchin Rosenman LLP
Last week, the Commodity Futures Trading Commission announced enforcement actions against four banking organization companies, a software development firm and six individuals, while the US Department of Justice disclosed that criminal charges had been filed against the same six individuals and two other persons, all in spoofing-related cases. These actions signal a significantly heightened emphasis by the CFTC and DOJ in prosecuting spoofing activities involving futures contracts traded on United States markets. Additionally, the CFTC actions and simultaneous settlements with the four banking organization companies may provide useful insight into the Commission’s evolving views regarding future commission merchants’ (if not all registrants’) duty to supervise, software development firms’ potential obligations when they are requested to design custom trading software, and the benefits persons may reap if they voluntarily disclose possible wrongdoing to the CFTC before the Commission discovers it. As a result, the following matters are covered in this week’s edition of Bridging the Week:
/goo.gl/3i6HqA

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The Spread – Week of 1/29 – 2/2
JohnLothianNews.com

We’re baaaack! The flu season stinks but this episode of The Spread doesn’t. The Spread is a brief recap of some of the notable activity in the options world. 

Watch the video and read the rest here »

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Friday’s Top Three
Our top read stories from Friday were led by the New York Times’ piece, Worries Grow That the Price of Bitcoin Is Being Propped Up. After seeing bitcoin fall under $8,000, I’m not sure it’s working very well. Second went to Handelsblatt’s piece on Theodor Weimer in Deutsche Bˆrse’s new CEO launches housecleaning. Third went to Bloomberg’s article on the Hasbro game in There’s Now a Monopoly Made Specifically for Cheating

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Lead Stories

Finance chiefs warn on Big Tech’s shift to banking; Leading lenders fear internet giants will cherry-pick best parts of their business
Martin Arnold, Banking Editor – FT
Big Tech’s move into banking is threatening financial stability and the biggest US and Chinese technology groups should be subject to some of the same regulation as big banks, according to top European finance chiefs.
/goo.gl/LK3J7E

Trading venues buzzing on strong start to year; Busiest January on global markets in years lifts hope of trading revenue rebound
Philip Stafford in London – FT
The busiest January on global markets in many years is raising hopes among exchanges and market venues that 2018 will spark a long-awaited rebound in trading revenues.
/goo.gl/XjNMsu

China to stamp out cryptocurrency trading completely with ban on foreign platforms
South China Morning Post
China is to block all websites related to cryptocurrency trading and initial coin offerings (ICOs) – including foreign platforms – in a bid to finally quash the market completely.
/goo.gl/bFUWy5

Australia seeks crown as ‘Nasdaq of Asia Pacific’; Stock exchange battles Asian rivals to lure tech companies
Jamie Smyth and Emma Dunkley – FT
Australia is pushing to become the “Nasdaq of the Asia Pacific” after nearly doubling its technology listings in five years.
/goo.gl/kcCo7U

Brain Genius Submerges His Bitcoin Mining Rig in a Giant Vat of Oil
Daniel Oberhaus – Vice
At the core of most cryptocurrency networks are miners, the people who use specialized computer equipment to secure the cryptocurrency’s blockchain by performing mathematical equations millions of times per second. In exchange for this computing power, and the electricity it takes to run the computer, these miners are rewarded in cryptocurrency proportionate to their contribution to the network. Given the high cost of electricity in many places and the computing equipment it takes to mine, it makes sense that miners try to maximize their return in any way possible.
/goo.gl/fY5UNa

Bond Market Says, ‘What Europe Crisis?’; Italian and Spanish bonds beat the Germans as economies accelerate
Richard Barley – WSJ
Rising yields and shrinking European Central Bank bond purchases were supposed to be bad for bonds from indebted southern European governments. So far, at least, it isn’t working out like that: southern Europe is the place to be.
/goo.gl/fxCfBR

EU regulator receives wave of responses to CFD clampdown; Frantic lobbying by trading platforms sparks ‘unprecedented’ reaction to consultation
Hannah Murphy – FT
The EU’s financial watchdog has had an “unprecedented” number of responses to its proposals to restrict risky leveraged trading among retail investors after frantic lobbying from online trading platforms to a consultation that closes on Monday.
/goo.gl/Esbc4h

Everyone loves to hate the City and the financial sector but sometimes hedge funds really do save the day
Ben Chu – Independent
The world of high finance sounds rather like a zoo. It’s not only the bulls and bears of the stock market, or the hawks and doves that flock around the central banks. Investment banks are “vampire squids”. Hedge funds are “locusts”, speculating against decent companies and entire countries until they collapse into bankruptcy. Jordan Belfort, the drug-addled conman who pushed dodgy stocks of hopeless companies on poor Americans in the 1990s, styled himself as the “Wolf of Wall Street”.
/goo.gl/fkbw4r

Wells Fargo Rebuke Puts Bank Boards in Fed’s Crosshairs; Fed’s move sends message that directors, not just management, will be held accountable for mismanaging risk
Ryan Tracy and Emily Glazer – WSJ
The Federal Reserve’s unprecedented move to handcuff growth at Wells Fargo & Co . WFC -2.20% sent a message that boards of directors, not just management, will be held accountable when big banks fail to manage risks.
/goo.gl/aibirr

Bitcoin’s Crashing? That Won’t Stop Arbitrage Traders From Raking in Millions; Cryptocurrency arbitrageurs cash in on wide price disparities between exchanges
Alexander Osipovich and Eun-Young Jeong – WSJ
One of the oldest tactics on Wall Street is going viral in the world of digital currencies. The strategy, called arbitrage, is simple. If something trades at different prices in multiple places, buy it where it’s cheap and sell where it’s dear. Traders call that “capturing the arb.”
/goo.gl/aQ73UC

The Latest Victim of China’s Great Firewall? Cryptocurrency Websites; After banning bitcoin exchanges and fundraising via ICOs, Beijing looks to block cryptocurrency-related websites
Chao Deng – WSJ
Chinese authorities plan to block websites related to cryptocurrency trading and fundraising, state media reported, in the latest move to tighten controls over what Beijing deems as risky investments.
/goo.gl/VeQ7b1

SEC drags feet on approving bitcoin ETFs; The US watchdog has set its face against cryptocurrency vehicles for now
Owen Walker – FT
The regulator’s warning was unambiguous. “There are a number of significant investor protection issues that need to be examined before sponsors begin offering these funds to retail investors,” wrote Dalia Blass, a director at the Securities and Exchange Commission, which oversees the US investment industry.
/goo.gl/fFGE95

Exchanges, OTC and Clearing

Cboe Global Markets Sets Several Daily Volume Records on Friday, February 2
Cboe
VIX options volume reaches new all – time high, topping the previous record by 39 percent; New single – day records set at Cboe Options, C2 Options and Cboe EDGX Options exchanges
/goo.gl/1zqUk4

Cboe Periodic Auctions, LIS trading volumes soar to $11 billion; Cboe Periodic Auctions book saw average daily notional value traded surge 885% in January this year.
Hayley McDowell – The Trade
The Cboe Periodic Auctions book saw a record month of trading volume totalling more than EUR6.5 billion during January, as MiFID II continues to shift the European trading landscape.
/goo.gl/af5vQm

NSE’s revenues from its frozen co-location facility climb to Rs 9.45 bn; More than a fourth of the NSE’s revenues are garnered from the co-location business
Shrimi Choudhary – Business Standard
The National Stock Exchange of India’s (NSE’s) revenues from its co-location facility, frozen into a separate bank account, have climbed to Rs 9.45 billion. The exchange will not be able to access these funds till the time an investigation into wrongdoings at its co-location facility are completed.
/goo.gl/RpWwLx

Partnership program starts successfully
Deutsche Bˆrse Group
Eurex Clearing, one of the world’s leading central counterparties and part of Deutsche Bˆrse Group, is experiencing strong demand for its off-exchange clearing services. In January, the average daily volume in OTC interest rates rose by a factor of seven to EUR 35 billion from EUR 5 billion in the same month last year. “We are very pleased that our partnership program meets with broad support in the market,” says Erik M¸ller, CEO of Eurex Clearing AG.
/goo.gl/g1X4kZ

Nasdaq and Palestine Exchange Sign New Market Technology Agreement
GlobeNewswire
Nasdaq Inc. (Nasdaq:NDAQ) and Palestine Exchange (PEX) have signed a new market technology agreement for Nasdaq to deliver new matching engine technology via the Nasdaq Financial Frameworkarchitecture to Palestine’s stock exchange. This new agreement marks the next chapter in a 10-year technology partnership between Nasdaq and PEX.
/goo.gl/eDn7sq

ELITE partners with Monsha’at (Saudi Small & Medium Enterprises Authority) to launch ELITE Saudi Arabia
London Stock Exchange Group
ELITE, London Stock Exchange Group’s international business support and capital raising programme for high-growth companies, today announces that it has partnered with the Small and Medium Enterprises Authority in Saudi Arabia (Monhsa’at) to support the launch of ELITE in Saudi Arabia.
/goo.gl/jK1B2T

Suspension of the all derivatives night session trading on February 9th
JPX-OSE
The night session for all derivatives trading on February 9, 2018 (the trading day of February 13, 2018), which is a business day preceding the launch date of the next derivatives clearing system at Japan Securities Clearing Corporation, will not be held at OSE.
/goo.gl/Ms414E

CCP stress tests have found capital shortfalls – Esma
Dan Hardie – Risk.net
Europe’s central counterparties (CCPs) are “overall resilient”, but two of them need to increase their capital resources to deal with possible shocks, says the European Securities and Markets Authority.
/goo.gl/61QKVN

Cboe Europe Equities Reports January Volume and Activity
Cboe
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced volume and highlights for Cboe Europe Equities for January 2018, summarising the first month of equities trading under MiFID II.
/goo.gl/rBwbrs

Fintech

Ripple-Powered Mobile Payments to Debut at Santander
David Z. Morris – Fortune
Santander Group, the international Spain-based bank, will introduce a mobile app that uses technology from the cryptocurrency startup Ripple to power fast cross-border payments. However, the product does not use XRP, the cryptocurrency that exploded in value in 2017 on the promise that it would become the backbone of Ripple’s new global bank settlement system.
/goo.gl/uKMDHW

Bitcoin has a huge scaling problemóLightning could be the solution; The Lightning network could enable much cheaper and faster bitcoin payments.
Timothy B. Lee – Arstechnia
Three startups are getting ready to launch one of the most ambitious and important cryptocurrency experiments since the creation of bitcoin itself. Called Lightning, the project aims to build a fast, scalable, and cryptographically secure payment network layered on top of the existing bitcoin network.
/goo.gl/Qc2cmH

Bitcoin Investors Had a Tough Week. Credit-Card Companies Are About to Make It Tougher; Citigroup, JPMorgan Chase and Bank of America to ban purchases of bitcoin with credit cards issued by them
AnnaMaria Andriotis – WSJ
More credit-card issuers are ditching bitcoin. Three of the largest banks in the U.S. said Friday that they would no longer permit credit-card customers to buy bitcoin with their credit cards. The decisions were announced after a brutal week for bitcoin prices, which have plummeted more than 50% from their peak in December.
/goo.gl/y582KB

Cryptocurrencies Drop With Risk Assets as Stock Rout Endures
Eric Lam and Todd White – Bloomberg
Bitcoin declined for a fifth day and led cryptocurrencies lower as a global equities selloff deepened and investors migrated to havens.
/goo.gl/rXKt8H

The Cost of Crypto Is Turning Miners Towards Green Power
Helena Bedwell, Vanessa Dezem, Stephen Stapczynski and Jonathan Tirone – Bloomberg
Pollution from power needed to mint new coins grows as concern; Bitcoin mines using renewables emerge from Canada to Iceland
Vakhtang Gogokhia’s plan to extract cryptocurrencies from the netherworld of cyberspace relies on a strategy familiar to many old-school manufacturers who use a lot of energy — the cheaper the fuel, the better.
/goo.gl/R3um9d

Politics

Brexit chaos shatters Theresa May’s illusion of unity; As talks reach their crunch point, the prime minister faces a rebellion from Conservative Eurosceptics who fear she favours a close relationship with the EU
George Parker – FT
Theresa May might have been out of the country last week on a three-day trip to China, but for many in her Conservative party the prime minister has been absent for much longer.
/goo.gl/E25Ve6

Carl Bernstein: These Could Be The Darkest Days Since Joe McCarthy; “We have the unprecedented situation of one of the major political parties … backing the president in showing and believing that he is above the law.”
Mary Papenfuss – Huffington Post
Watergate journalist Carl Bernstein warned Friday that the Trump administration may be ushering in the darkest days in America since Joe McCarthy.
/goo.gl/gxVpzU

Opinion: The jobs report, the memo and other White House propaganda
Tim Mullaney – MarketWatch
Wall Street may be on pins and needles about how stocks will react to the jobs report in 18 minutes (as I write this sentence). I’m wondering about a related issue: How exactly will Sarah Huckabee Sanders lie about it when it comes?
/goo.gl/eBgzqE

Regulation

Financial Transaction Costs in the Spotlight
Owen Minde and Stephen Mendolia – Bloomberg
Managing the currency exposure of a portfolio is more ≠important than ever. In fact, fund managers are expected to increase their total foreign-exchange trading volumes to $2.3 trillion a day by 2022, from $1.5 trillion now, according to consulting company Aite Group in Boston. With best execution under the microscope, thanks to Europe’s Markets in Financial Instruments Directive II and other regulatory developments, buy-side companies are looking to transaction cost analysis, or TCA, to help measure trading performance and optimize processes.
/goo.gl/QJ74ki

Janet Yellen to join Brookings after Fed
Jessica Dye in New York – FT
Janet Yellen is already getting back to work. The first woman to chair the Federal Reserve is set to join several former Fed luminaries at Brookings, the US think tank, when she leaves her post this week.
/goo.gl/3tPpQH

Bitcoin investors find tax demands are not virtual; Cryptocurrency traders in many jurisdictions may be liable for hefty CGT bills
Ben McLannahan in New York and Vanessa Houlder in London – FT
Cryptocurrency converts across the US have had to contend with zigzagging prices and glitch-prone exchanges. Now comes another problem: the tax authorities.
/goo.gl/D2vm5h

For Companies on the Rocks, Tax Bill Doesn’t Help Much; U.S. tax overhaul takes away a tool that struggling firms have long depended on to free up cash
Katy Stech Ferek and Theo Francis – WSJ
The new tax law is a boon to most U.S. businesses, but it will make life harder for one type of company: those that are struggling financially or at risk of filing for bankruptcy.
/goo.gl/1pFG9W

SEC Halts Ongoing Fraud by Purported Hedge Fund Manager
SEC
The Securities and Exchange Commission today charged a purported hedge fund manager in New York City with a brazen offering and investment adviser fraud thereby putting an end to an ongoing scheme.
/goo.gl/zP6jYH

Alleged Perpetrator of Ski Slope Investment Scheme Agrees to Pay Back Investor Money, Surrender Properties
SEC
The Securities and Exchange Commission today announced that the Miami-based businessman behind an alleged scheme involving investments in a Vermont-based ski resort has agreed to pay back more than $81 million of investor money that he used illegally.
/goo.gl/bWPssv

CFTC’s Technology Advisory Committee Public Meeting Rescheduled to February 14, 2018
CFTC
The Commodity Futures Trading Commission’s (CFTC) Technology Advisory Committee (TAC) has rescheduled its public meeting to February 14, 2018 at CFTC’s Washington, DC headquarters.
/goo.gl/w9b9wZ

Staff Will Participate in the CFTC KISS Policy Initiative Forum hosted by The Risk Desk on February 12th
CFTC
Commodity Futures Trading Commission (CFTC) staff will participate in the KISS Policy Forum hosted by The Risk Desk.
/goo.gl/XZ22yw

NFA bars North Salem, N.Y. introducing broker and commodity pool operator Managed Capital Advisory Group from membership
NFA
NFA has permanently barred North Salem, N.Y. introducing broker and commodity pool operator Managed Capital Advisory Group Ltd. (Managed Capital) from membership and from acting as a principal of any NFA Member.
/goo.gl/JrxoU3

Investing and Trading

Using Forests to Fight Climate Change; California is again leading the way.
Editorial Board – Bloomberg
Forests give us shade, quiet and one of the harder challenges in the fight against climate change. Even as we humans count on forests to soak up a good share of the carbon dioxide we produce, we are threatening their ability to do so. The climate change we are hastening could one day leave us with forests that emit more carbon than they absorb.
/goo.gl/AV6gxy

Debunking the investment myth that high risks yield high returns; The success of evidence-based strategies demonstrates that low-risk investment yields superior returns, writes Pim van Vliet
London School of Economics and Political Science
My wife is a surgeon, and her field of medicine has been transformed by the ‘evidence-based’ approach. Every pill she prescribes is extensively tested and empirically validated. You will agree that this makes sense, since it directly affects our physical health.
/goo.gl/pqaRDh

Literally, the Trade of the Century; Wellcome Trust and some other charities borrow using ultralong bonds to buy shares now
James Mackintosh – WSJ
Everything is expensive in the markets these days, but some things are more expensive than others. Shares are, historically, very highly valued, but not nearly as pricey as bonds, especially very long-dated bonds. The result is a lot of reluctant buyers of stocksóand one investor willing to put on what is literally the trade of the century. The next century.
/goo.gl/yEcSWZ

Bitcoin Newbies Are Getting Crushed
Fortune
For Bitcoin investors, these are the times that try one’s soul. After surging to almost $20,000 in December following the introduction of regulated futures contracts in the U.S., the world’s largest cryptocurrency has lost more than half its value, plummeting to as low as $7,614 on Friday. It regained some ground on Saturday, rising 7.5 percent to $9,290.15 as of 2:58 p.m. in New York, according to coinmarketcap.com.
/goo.gl/ah2r9w

Anatomy of the escalating bond bear market; With term premia now back to ‘normal’ bonds look better underpinned
Gavyn Davies – FT
The global economy remains in the strong, synchronised upswing that has now been in place for almost two years. The latest Fulcrum nowcasts show no sign of any major slowdown in the global growth rate, which remains around 4.5 per cent, almost a full percentage point above its long term trend. Among the major blocs, the advanced economies are continuing to record growth rates that are, remarkably, 1.7 percentage points above trend, while the emerging markets are hovering around trend.
/goo.gl/QaBUaW

Miners and investors bet and fret over latest commodities cycle; Industry buoyant ahead of annual Indaba but past mistakes and Chinese concerns lurk
Neil Hume, Commodities and Mining Editor – FT
Spirits will be high when thousands of top mining executives and investors gather in Cape Town this week for one of the industry’s biggest annual jamborees.
/goo.gl/VGjNvj

Strong ESG policies are no protection against scandal; BlackRock study ‘expected to find better social performance. We were wrong’
Chris Flood – FT
Companies that aim to do good for society by adhering to environmental, social and governance policies are more likely to encounter lawsuits and regulatory actions, says BlackRock.
/goo.gl/2b3HSa

Hard Lessons From the Federal Student-Loan Program’s Coming $36 Billion Shortfall; Prospect of taxpayer losses increases the chances that Congress will make major changes to the program
Josh Mitchell – WSJ
U.S. officials have long maintained the federal government would make a profit on its $1.4 trillion student loan portfolio or at least break even, but two recent reports suggest just the opposite will be the case. Government lending to college and graduate students could soon become an immense drain on federal coffers, worsening an already deteriorating U.S. budget picture.
/goo.gl/4rkBMB

BP Faces Down Its Doubters; Oil company is trying to regain the confidence and prestige it lost after the Deepwater Horizon disaster in 2010
Sarah Kent – WSJ
BP PLC is struggling to convince investors it can regain its top position among the world’s elite energy players nearly eight years after the Deepwater Horizon disaster.
/goo.gl/ky9BDT

As Stock-Market Rout Spreads, Investors Fear Markets Falling in Lockstep; Some investors worry that markets moving in tandem raise the chances of a more severe selloff than what still-positive fundamentals would warrant=
By Amrith Ramkumar and Ira Iosebashvili – WSJ
U.S. stocks last week suffered their largest weekly drop in two years. But some investors worry that falling prices for things like oil futures, gold and bitcoin are offering a more ominous signal that could presage deeper declines.
/goo.gl/gnqETB

U.S. asset managers shake up equity research as banks cut back
Trevor Hunnicutt – Reuters
As new rules spur Wall Street banks to further shrink their research budgets, U.S. asset management firms are shoring up in-house research, and reinventing the stockpicking business in the process.
/goo.gl/me8ejD

Institutions

Deutsche Bank gambles German goodwill with bonus bonanza
John O’Donnell, Tom Sims – Reuters
Deutsche Bank’s British chief executive may have done much to rebuild bridges between Germany’s biggest bank and its politicians, business leaders and general public, but John Cryan has gambled this goodwill in an effort to keep top bankers.
/goo.gl/2Ez9ZE

Bitcoin Ban Expands Across Credit Cards as Big U.S. Banks Recoil
By Jennifer Surane and Laura J Keller – Bloomberg
A growing list of card issuers are declining crypto purchases; After recent price drops, JPMorgan doesn’t want credit risk
A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife.
/goo.gl/fxCasm

Wells set to turn away billions in deposits after asset freeze; Federal Reserve sanctions will hurt US bank’s profits
Alistair Gray and Ben McLannahan in New York – FT
Wells Fargo is expected to turn away billions of dollars of deposits as the US bank grapples with the effects of an asset freeze imposed by the Federal Reserve after years of wrongdoing.
/goo.gl/VfQ8u2

US mutual funds’ dead wood is for the chop; This time round, the cuts have more to do with a switch from active to passive
Owen Walker – FT
Fund managers in the US are keeping their pruning shears sharp. In 2017, for the second year running, US investment companies cut more mutual funds than they launched.
/goo.gl/qwnvUC

State Street ramps up pressure on excessive executive pay; Group will publicly demonstrate unease over lavish packages by abstaining from votes
Ben McLannahan and Robin Wigglesworth in New York – FT
State Street Global Advisors is to get tough on executive pay ó and it will signal its displeasure over lavish packages by refusing to back them.
/goo.gl/srpdyZ

Vanguard hosts Brussels meeting over fund cost disclosures; Mifid II rules spark complaints that savers are being fed misleading information
Chris Flood – FT
Vanguard held a series of meetings with members of the European Parliament in Brussels last week as debate intensified over the true cost of investment funds.
/goo.gl/BbxiTd

JPMorgan to Banking Clients: Joint Health-Care Venture Is No Threat; JPMorgan reassured banking clients by likening its venture with Amazon.com and Berkshire Hathaway to a group purchasing organization for employees
Anna Wilde Mathews, Dana Cimilluca and Emily Glazer – WSJ
The high-profile health-care partnership JPMorgan Chase & Co. struck last week with Amazon.com Inc. and Berkshire Hathaway Inc. BRK.A -3.55% has created consternation among some clients of the lender’s investment-banking arm, according to people familiar with the matter.
/goo.gl/7AGLqN

Banks Raise Oil Forecasts but See Risks; Rebalancing in crude supply pushes prices to multi-year highs but some analysts question how long the rally will last
Georgi Kantchev – WSJ
Banks raised their oil-price forecasts for the fourth month in a row in January, as rebalancing in crude supply pushed prices to multiyear highs.
/goo.gl/8ndxEN

‘Wizard of Oz’ plans return with $2bn hedge fund; Ex-GLG and Moore Capital star trader Coffey was once among world’s top performers
Miles Johnson and Jennifer Thompson – FT
Greg Coffey, a star hedge fund trader who retired five years ago, is raising $2bn for a new fund at a time when some of the industry’s best known names have shed assets or closed down.
/goo.gl/9uNfvn

RBS taught us to forge signatures, says whistleblower
Paul Drury – The Times
Police and finance watchdogs are being asked to investigate claims that Royal Bank of Scotland staff were trained in how to forge customers’ signatures.
/goo.gl/5AKMv5

Regions

The Chinese have transitioned directly to a mobile-only era
The London School of Economics and Political Science
China’s middle class group is already the size of the US population and is expected to double within seven years. In addition to its large population size and significant disposable income, this new middle class is also characterised by its quick adoption of mobile applications in their everyday activities.
/goo.gl/7F4pYE

Bank of Japan’s Kuroda urges cryptocurrency service firms to beef up security
Reuters
Bank of Japan Governor Haruhiko Kuroda said on Wednesday companies offering cryptocurrency services must have ample security steps in place.
/goo.gl/MwwRbU

India’s runaway bulls tested by capital gains tax; New Delhi ends longstanding levy exemption for equity investments
FT
Simon Mundy in Mumbai and Kiran Stacey in New Delhi FEBRUARY 2, 2018 6
Reversing India’s stunning equity market bull run may require something stronger than a higher levy on capital gains, as the country experiences a fundamental savings shift in favour of shares.
/goo.gl/8QdkjL

‘Crypto crazy’ Japanese mystified by virtual heist; The $500m theft of XEM coins by an anonymous hacker is threatening the country’s faith in cryptocurrencies
Leo Lewis and Robin Harding – FT
As she sat in her office last Friday Komugi Yamazaki, director at a celebrity news website, former “idol” girl band member and voracious cryptocurrency investor, received an unusual email.
/goo.gl/gHkBSz

Companies Everywhere Copied Japanese Manufacturing. Now the Model Is Cracking
Alastair Gale and Sean McLain – WSJ
Japan’s reputation for flawless manufacturing quality and efficiency transformed the country’s postwar economy, changed business practices world-wide and spawned a library’s worth of management manuals and business advice books. Now, the model is cracking.
/goo.gl/oUfXxv

China Launches Probe Over U.S. Sorghum Imports; Move follows Trump administration decision to put tariffs on Chinese solar panel imports
WSJ
China’s Commerce Ministry said Sunday that it initiated an anti-dumping and anti-subsidy investigation after preliminarily finding that heavy volumes and low prices of American exports of sorghum, bolstered by U.S. government subsidies, hurt Chinese growers.
/goo.gl/HUHf1k

Chinese Regulators Move to Tighten Financial Regulation; Shadow banking and insurance sector put on notice
Fan Yu, Epoch Times
An eventful 2017 saw Chinese regulators begin to rein in a number of problematic behaviors in its financial sector.
/goo.gl/ehPzyM

Brexit

S&P Says Disorderly Brexit Would Pressure U.K. Sovereign Rating
David Goodman – Bloomberg
A disorderly Brexit may see further cuts to the U.K.’s credit rating, according to S&P Global Ratings.
/goo.gl/jE6pZm

BoE deputy warns against ‘bonfire of the regulations’ after Brexit; Supervisor cautions on push for more competitive banking regime
Caroline Binham and Patrick Jenkins – FT
The UK’s top banking supervisor has warned against a “bonfire of the regulations” after Brexit, despite Eurosceptics calling for a more competitive regime when Britain leaves the EU.
/goo.gl/nRvw7p

Don’t listen to the naysayers: The City is Brexit-proof and will remain the world’s financial hub
Gerard Lyons – City AM
The City of London is in a strong position to maintain its status as the world’s financial capital. Many of the City’s strengths are deeply embedded and therefore “Brexit-proof”.
/goo.gl/Z3FH11

Miscellaneous

Too Many People Dream of a Charmed Life in Academia; Brilliant colleagues. Curious students. High status. Earning less than half of what a kindergarten teacher makes.
Noah Smith – Bloomberg
The academic dream is a powerful thing. To be surrounded by brilliant colleagues, working on discovering new insights for the betterment of society, is a heady prospect. To enjoy ironclad job security, to rest easy deep into middle age as your peers in the private sector grow anxious about being laid off, would be an almost unimaginable relief. And to enjoy both the company and the respect of smart, energetic youngsters, not to mention free gyms, lots of time off and good health care — well, it’s no surprise that for many, academia is an ideal job.
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Graduate of University of Minnesota School of Journalism and Mass Communication