Breaking News

Insider trading has been rife on Wall Street, academics conclude; Singapore Bourse Seeks to Defuse Tensions With Indian Counterpart; Booming Demand for Clearing Options, Futures Contracts Fuels OCC’s Growth

First Read

Hits & Takes
JLN Staff

The National Stock Exchange of India will end its licensing arrangements with SGX, CME Group, Taiwan Futures Exchange and Osaka Securities Exchange, according to Bloomberg. Given the ongoing limited access to the Indian market, this can’t be good for NSE, even with a new tax-free trade zone. ~JK

ICE is set to relaunch the National Stock Exchange, purchased last year, as NYSE National, a maker-taker pricing model.~JK

Cliff Histed, a partner at K&L Gates LLP will be moderating the Enforcement Actions panel at the ABA’s “2018 Blockchain Technology, Digital Currency, and ICO National Institute” in New York on April 27.~JJL

Quote of the Day from TheHill. “It strikes me that we owe it to this new generation to respect their enthusiasm about virtual currencies with a thoughtful and balanced response, not a dismissive one.” – CFTC Chairman Chris Giancarlo, during last Tuesday’s Senate Banking Committee panel.~JK

JLN has updated the Leo Melamed page in Marketswiki. Did you know his Asia experience includes advisory roles with the China Securities Regulatory Commission, Huatai Financial USA, a Chinese futures broker and an equity stake in HuaMei Capital Company, which consults on cross-border mergers and acquisitions?~JK

We have also updated the page for Jack Sandner, who is retiring from the CME Group board at the same time as Mr. Melamed. In addition to being a trustee of The University of Notre Dame, Rush University Medical Center, The Museum of Science and Industry of Chicago, and the Shedd Aquarium, Sandner has received numerous awards from Notre Dame and elsewhere.~SR

The CFTC’s Technology Advisory Committee will be in Washington, DC on Wednesday. I will be there.~JJL

The Financial Times has published a Special Report on Exchange Traded Funds.~JJL

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Dennis K. Berman Joins Lazard as a Managing Director, Financial Advisory
Business Wire
Lazard Ltd announced today that Dennis K. Berman, Financial Editor of The Wall Street Journal, will join the firm as a Managing Director in Financial Advisory, effective February 26.
/goo.gl/TMGv82

***** Berman is a Pulitzer-Prize winning editor and writer, has served as the financial editor of The Wall Street Journal and as a member of the Dow Jones Industrial Average Committee since July 2015.

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The Computer Part People Are Hoarding: ‘I Felt Like I Was Buying Drugs’; The race to create cryptocurrencies is driving up cost of one specific type of hardware that’s also prized by PC gamers
Sarah E. Needleman – WSJ
Three months into a seemingly futile search, James Liska finally spotted a reasonably priced computer-graphics card online. By the time he clicked “buy,” it was gone. He blames those cryptocurrency enthusiasts.
/goo.gl/BDK4Lk

**So ahh, you got any stuff? Like graphics cards?~JK

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New Crypto Regulator?; Spoofing Appealed Again; Examination Priorities
Gary DeWaal – Bridging the Week
Last week, the chairmen of the Commodity Futures Trading Commission and the Securities and Exchange Commission provided their insight into the risks of cryptocurrency activities before a Senate committee. During his testimony, CFTC Chairman J. Christopher Giancarlo suggested it might be appropriate to extend federal oversight to spot virtual currencies and exchanges to avoid gaps in current regulation. Additionally, the first trader convicted of spoofing under a Dodd-Frank amendment to existing law expressly designed to prohibit such activity appealed his conviction to the Supreme Court, claiming the law change was unconstitutionally vague.
jlne.ws/2Ejn3Tz

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Friday’s Top Three
Monday’s top read item was CME Group Inc. Names Slate of Director Nominees from the exchange. Second went to the FT’s Melamed, Sandner to retire from CME Group board. Third went to the New York Times’ Cryptocurrencies Come to Campus

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MarketsWiki Statistics Sponsored by Level Trading Field
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Lead Stories

Insider trading has been rife on Wall Street, academics conclude; One study suggests insiders profited even from the global financial crisis; another that the whole share-trading system is rigged
The Economist
Insider-trading prosecutions have netted plenty of small fry. But many grumble that the big fish swim off unharmed. That nagging fear has some new academic backing, from three studies. One argues that well-connected insiders profited even from the financial crisis.* The others go further still, suggesting the entire share-trading system is rigged.**
/goo.gl/QJagC5

Singapore Bourse Seeks to Defuse Tensions With Indian Counterpart
Andrea Tan and Santanu Chakaborty – Bloomberg
Singapore Exchange drops most in 9 years as NSE to cut ties; Move is latest effort by India to discourage offshore trading
A shock decision by Indian exchanges to cut ties with their offshore counterparts sent shares of Singapore Exchange Ltd. falling by the most in nine years and raised questions about how the world’s second-most populous nation will fit in with the global financial system.
/goo.gl/NfQzfW

Booming Demand for Clearing Options, Futures Contracts Fuels OCC’s Growth
Heather Noel – DallasInnovates.com
As the Dow plummeted this week, trade volumes experienced a sharp rise. The jump in activity has brought record-setting days for The Options Clearing Corporation, which operates using a decentralized structure with equally-capable offices in Dallas and Chicago.
/goo.gl/GajDdb

Singapore Exchange shares tumble after India pulls data; Action endangers SGX’s place as major international exchange for Indian stock futures
Philip Stafford in London and Emma Dunkley in Hong Kong – FT
Shares in the Singapore Exchange plunged on Monday after three of the largest Indian stock markets announced they would stop licensing their data to overseas exchanges due to fears that trading was deserting India.
/goo.gl/WbWtRH

UK financial watchdogs launch coordinated push on algorithmic trading
Philip Stafford in London – FT
UK authorities have published plans to toughen financial institutions’ accountability for the algorithms they use to trade on global markets.
/goo.gl/qZeh63

Fidelity bans retail investors from trading short volatility
Joe Rennison and Nicole Bullock in New York – FT
Fidelity, one of the largest retail brokerages in the US, has temporarily stopped clients from buying an exchange traded fund that bets on markets remaining calm and was a victim of this week’s market rout.
/goo.gl/X7CmBc

Italian cryptocurrency exchange BitGrail loses $170 million
Mariella Moon – Engadget
One of the biggest problems with cryptocurrency exchanges is that they’re a juicy, enticing target for high-tech criminals. Case in point, Italian exchange BitGrail, which lost $170 million worth of Nano tokens, a little-known digital coin previously called RaiBlocks. BitGrail is the second exchange that lost of massive amount of money this year — and it’s only February — following Tokyo-based Coincheck, which lost between $400 and $534 million worth of coins in a cyberattack on its internet-connected wallet back in January.
/goo.gl/4vE9wU

Algos Face New Trading Curbs in U.K. as Regulator Reins in Risk
Silla Brush – Bloomberg
Banks and other firms may have to meet tougher requirements to manage risks stemming from algorithmic trading in the U.K. as markets become increasingly computer-driven, the Bank of England said on Monday.
/goo.gl/4mpxmT

This Tiny Hedge Fund Just Made 8,600% On a Vix Bet
Dani Burger – Bloomberg
Denver traders pocketed $17.5 million on $200,000 VIX wager; People laughed when the firm bought disaster protection in XIV
Not everyone got crushed when the market collapsed. For traders at a little-known Denver hedge fund who saw it coming, it was the score of a lifetime — a $17.5 million payday on a $200,000 bet.
/goo.gl/t1y1Vp

Wall St blames turmoil on insurers’ volatility strategy; Analysts say funds designed to produce steady returns sold as turbulence increased
Alistair Gray and Robin Wigglesworth in New York – FT
Wall Street is pointing the finger at insurance companies as an unlikely but pivotal source of the turbulence that wiped trillions of dollars off stock market values in recent days.
/goo.gl/eTVDBd

Hey, Economist! What Do Cryptocurrencies Have to Do with Trust?
Michael Lee and Antoine Martin – New York Federal Reserve
Bitcoin and other “cryptocurrencies” have been much in the news lately, in part because of their wild gyrations in value. Michael Lee and Antoine Martin, economists in the New York Fed’s Money and Payment Studies function, have been following cryptocurrencies and agreed to answer some questions about digital money.
/goo.gl/8AhHZC

Deutsche Bank to Recruit Rookies in Bid to Revive Equities Unit
Steven Arons, Donal Griffin – Bloomberg
Ex-Goldman Sachs partner Selman tapped to rebuild business; ‘We certainly have holes to fill and we’re hiring,’ he says
Peter Selman, hired out of retirement by Deutsche Bank AG to turn around Wall Street’s worst-hit equities business, wants to tap universities rather than rivals to do so.
/goo.gl/87pFcM

The Economy Is Full of Crypto (And Collective Delusion); Finance has become untethered from productive work.
Matt Levine – Bloomberg
We have talked a few times around here about a socialist republic that has been hit hard by sanctions imposed by the U.S. government and that, in response, is planning to issue its own cryptocurrency to raise money. I mean Venezuela. Venezuela’s government is the one that is planning to issue a cryptocurrency to replace money that it has lost due to the policies of the U.S. federal government.
/goo.gl/tJwgry

For Global Markets, an Uncertain Anniversary; U.S. stocks have rebounded since their tumble on Feb. 11, 2016, when sliding oil prices and bank stocks stoked fears of a global slowdown
Akane Otani and Kiersten Schmidt – WSJ
Two years ago, financial markets hit their recent low point following months of upheaval centering on the economic outlook for China and the attendant risks of recession elsewhere. Since then, stocks and many other assets have staged a powerful rally—but those gains have come under intense pressure during the early stages of 2018, renewing questions about the prospects for investors across asset classes. The next few weeks promise to be eventful ones on Wall Street and beyond.
/goo.gl/TQPEuk

European banks break ranks over cryptocurrencies; Despite prospect of tighter regulations, smaller lenders see an opportunity
Martin Arnold in London and Ralph Atkins in Zurich – FT
A handful of smaller European banks are breaking ranks with the rest of the sector by giving investors access to cryptocurrencies and advising on initial coin offerings, despite an intensifying effort by regulators to clamp down on the area.
/goo.gl/rqdFQ9

One Cause of Market Turbulence: Computer-Driven Index Funds
Landon Thomas Jr. – NY Times
A decade ago, the center of gravity on Wall Street were raucous trading desks and stock exchange floors. These days, the locus has shifted to far quieter places, where computers are in charge.
/goo.gl/DHXKrj

Exchanges, OTC and Clearing

SGX flagship futures in doubt after Indian exchange market data suspension; India’s largest exchange operators will stop licensing index market to foreign exchanges as derivatives volumes migrate from the country.
Hayley McDowell – The Trade
Three major Indian exchanges have said they will stop licensing their market data and indices to foreign investors, bringing the Singapore Exchange’s (SGX) flagship futures index into question.
/goo.gl/VPaj7G

Announcement on SGX India Equity Derivatives
SGX
We refer to the issuance of the “Joint Press Release for Licensing of Indian Indices and Market Data of the securities listed or traded in India” by National Stock Exchange of India (NSE), Bombay Stock Exchange (BSE) and Metropolitan Stock Exchange of India (MSEI) (“the Indian Exchanges”) on 9 February 2018, regarding the commercial licensing of their indices and market data with a number of foreign exchanges and other business partners.
/goo.gl/wFucNA

Joint Press Release for Licensing of Indian Indices and Market Data of the securities listed or traded in India
NSE, BSE and MSEI
Indian Exchanges (“Exchanges”), through a licensing arrangement, provide their Market Data at various levels (Real time, Delayed feed and End of the day feed) to Index Providers either directly or through their subsidiaries/group entities or through third party data vendors, for creating Indices. Such indices are licensed by the Index Providers to prospective licensees, including foreign stock and derivatives exchanges and other foreign trading platforms (“foreign exchanges and/ or trading platforms”) for enabling them to provide products for trading and settlement on such foreign exchanges and/ or foreign trading platforms. Additionally, it is possible that Exchanges could also create indices based on their Market Data which could then be licensed to such foreign exchanges and/ or trading platforms, for the purpose of trading and settlement of products based on such indices outside India. It is observed that for various reasons the volumes in derivative trading based on Indian securities including indices have reached large proportions in some of the foreign jurisdictions, resulting in migration of liquidity from India, which is not in the best interest of Indian markets.
/goo.gl/HB9S1h

NYSE to begin trading on new electronic equities exchange in April; NYSE National will begin trading as of 30 April following the acquisition of the National Stock Exchange last year.
Hayley McDowell – The Trade
The New York Stock Exchange (NYSE) has confirmed it will begin trading on its newly established electronic equities exchange on 30 April.
/goo.gl/ipL82E

Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange Closed for Family Day
PR Newswire
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, February 19, 2018 for Family Day.
/goo.gl/berLX1

BitGrail Cryptocurrency Exchange Claims $195 Million Lost to Hackers
David Z. Morris – Fortune
An obscure Italian cryptocurrency exchange called BitGrail claims that it was hacked late last week and lost roughly $195 million worth of customers’ cryptocurrency. But others — including the developers who created the stolen cryptocurrency — have suggested not all may be as it appears.
/goo.gl/GbVQWM

Amendments to the Clearing Conditions of Eurex Clearing AG
Eurex
This circular contains information with respect to Eurex Clearing AG’s service offering and corresponding amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) regarding the following topics:
/goo.gl/TegX9a

Mistrade fees: Changes to the process of charging mistrade fees
Eurex
As announced in Eurex Circular 033/17, order book and Eurex T7 Entry Service (TES) mistrade fees are regulated by the Fee Regulations for Eurex Deutschland. Accordingly, the process for charging mistrades will be amended with effect from 5 March 2018.
/goo.gl/1B7Tsi

iSTOXX American Century United States Quality Value Index will be the Underlying for ETF in the US
Deutsche Boerse Group
STOXX Ltd., operator of the index business of the German Stock Exchange and global provider of innovative, tradable index Concepts Group, the iSTOXX ® American Century United States Quality Value Index licensed to American Century Investments. The Company offers an ETF on this Underlying.
/goo.gl/Cf61tz

HKEX Welcomes Government Appointments to its Board
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) welcomes the Government’s appointment of Laura Cha and Benjamin Hung to its Board of Directors.
/goo.gl/f4rMrW

Exchange Launches Director Training Webcast on IPOs
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today published a new webcast that offers directors at companies considering an initial public offering with guidance on their responsibilities, as well as practical advice on tackling issues that may arise during and after the listing process.
/goo.gl/v2AeCD

HKEX to Reduce Multipliers of 4 Stock Futures Contracts
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) will reduce the multiplier of four of its stock futures contracts from 22 February 2018.
/goo.gl/KBfkSt

Fintech

Cryptocurrency Ads Find Ways Around Facebook’s Ban; Bitcoin ads rely on email spam technique
Sarah Frier – Bloomberg
Cryptocurrency ads have found their way onto Facebook despite a ban, using a workaround popular with email spammers: changing spelling.
/goo.gl/KdPmn2

Bcause LLC Opens Cryptocurrency Mining Facility
Largest Digital Mining Data Center in North America is First Part of Cryptocurrency Ecosystem to Launch
VIRGINIA BEACH, Va., Feb. 12, 2018 /PRNewswire/ — Bcause LLC, creator of the world’s first full-stack cryptocurrency ecosystem, today announced that it has successfully launched its state-of-the-art cryptocurrency mining facility and data center in Virginia Beach. Staffed around the clock, the facility is the largest of its kind in North America and represents the first component of the ecosystem to launch.
/goo.gl/E8a55M

U.S., UK government websites infected with crypto-mining malware: report
Reuters Staff
Thousands of websites, including ones run by U.S. and UK government agencies, were infected for several hours on Sunday with code that causes web browsers to secretly mine digital currencies, technology news site The Register reported.
/goo.gl/oa5oTE

Bitcoin Mania Triggers Miner Influx to Rural Washington; Small towns confront surge in power demand as firms that generate new cryptocurrency units ask to set up shop
Alison Sider – WSJ
In Wenatchee, Wash., a bitcoin invasion is under way. Home to hydroelectric dams that harness the flow of the Columbia River, north central Washington has some of the cheapest power in the U.S.
/goo.gl/5bQNni

How the U.S. Courts Website Unwittingly Became a Cryptocurrency Miner
David Meyer – Fortune
Official websites across many countries, including the U.S., the U.K., and Australia, were unwittingly drawn into a cryptocurrency-mining scheme that quietly hijacked the computers of people who visited those sites.
/goo.gl/2sZfnD

A culprit for financial site glitches: you and your apps
Ross Kerber – Reuters
Jittery investors and their smartphones stressed out leading U.S. online financial sites last week as heavy volatility shook markets, technology analysts said.
/goo.gl/qBZHrL

SoFi Reports Disappointing Earnings as Loan Performance Suffers; Fintech upstart says it is refining its credit model, working to improve collections
Peter Rudegeair – WSJ
Customers of online lender Social Finance Inc. are missing their loan payments at an unexpectedly high rate, a misstep for a company that has boasted that its focus on high-earning individuals would yield better borrowers.
/goo.gl/os62Uz

Equifax Hack Might Be Worse Than You Think; Hackers accessed more records, including tax ID numbers and email addresses, than Equifax previously announced
AnnaMaria Andriotis – WSJ
Hackers in the Equifax Inc. EFX -1.58% breach accessed more of consumers’ personal information than the company disclosed publicly last year.
/goo.gl/vqLBLu

Citigroup to set up innovation centre in London; Decision is boost for UK’s fintech sector ahead of Brexit
Laura Noonan, Investment Banking Correspondent – FT
US banking giant Citigroup is setting up an innovation centre in London in one of the first strategic investments by a big US bank in the British capital since the Brexit vote.
/goo.gl/Lme7vS

Politics

Trump’s America will be saddled with debt – just like his bankrupted hotels
Richard Wolffe – The Guardian
The Republican spending bill throws conservative principles – whatever remains of them – into the wind
Once upon a time, conservatives said they hated Barack Obama because of his budget deficits. They said he was destroying America and its future, which made them very angry indeed. They were so mad about all those Obama debts that they invented a new party, and named it after the revolutionaries who opposed a nasty British king.
/goo.gl/uEoHax

‘Hypocritical’ Republicans abandon fiscal discipline; US debt to hit 100% of GDP if tax cuts and spending rises are made permanent
Sam Fleming and Demetri Sevastopulo in Washington – FT
Rand Paul cut a lonely figure on the floor of the Senate on Thursday evening as he accused his Republican colleagues of hypocrisy over the deficit. Running up a $1tn dollar deficit after vilifying Barack Obama for racking up huge debts was intellectually dishonest, the libertarian senator and former presidential contender said.
/goo.gl/3pQtdY

The G.O.P. Is Flirting With Fiscal Disaster
Steven Rattner – NY Times
In August 2015, the leading Washington budget watchdog predicted that the federal deficit would total about $600 billion the next year.
/goo.gl/JvobGf

Washington Needs a Correction Too; There’s no avoiding stock-market volatility. But there’s no need for lawmakers to make it worse.
Editorial Board – Bloomberg
Thursday’s drop in the S&P 500 brought the fall since last month’s peak to more than 10 percent, making this a correction, according to the usual definition. Such a reassuring term: It suggests not so much a setback as an overdue adjustment. Is that right?
/goo.gl/n21XHh

House Departures Give Democrats Hope of Winning GOP Strongholds
Arit John – Bloomberg
Districts that backed Clinton seen as Democrats’ best targets; In California district, GOP’s Royce retires after 25 years
After a quarter century of easily winning re-election, California Republican Ed Royce was facing an unusually competitive contest this year in a U.S. House district that has swung from solidly conservative to increasingly Democratic.
/goo.gl/Pjzdcr

Regulation

Financial watchdogs intensify crackdown on algorithmic trading malpractice
Lucy White – City AM
Algorithmic trading is set to come under more intense scrutiny, as UK financial authorities have today demanded that institutions increase awareness and safety controls surrounding the electronic trading mechanisms.
/goo.gl/1mVYxy

IMF chief: Cryptocurrency regulation is ‘inevitable’
Zahraa Alkhalisi – @CNNMoneyInvest
International Monetary Fund chief Christine Lagarde says it’s only a matter of time before cryptocurrencies come under government regulation.
/goo.gl/NENCp8

Top regulator becomes unlikely hero for bitcoin activists
Ali Breland and Sylvan Lane – The Hill
A top federal regulator has become an unlikely hero to the cryptocurrency community, after making optimistic comments about bitcoin and other digital currencies.
/goo.gl/hwomfm

Bitcoin Closes in on $9,000 as Regulatory Fears Peter Out
Eric Lam – Bloomberg
Bitcoin extended a rebound on Monday as the regulatory concerns that have plagued digital currencies this year showed signs of subsiding.
/goo.gl/eBFga6

Appeals Court Exempts Loan Funds from Dodd-Frank Risk-Retention Rule; Court: Fed, SEC lack authority to apply the risk-retention rule to CLOs
Dave Michaels – WSJ
Managers of Wall Street funds that lend money to heavily indebted firms won’t have to retain an interest in the debt they sell to investors after a federal appeals court invalidated part of a major postcrisis rule.
/goo.gl/n9E6gU

ECB’s Record as a Bank Supervisor? Barely a Pass, Experts Say
Nicholas Comfort – Bloomberg
Supervisor only given partial credit for improvements at banks; Barely gets passing grade from group of academics, analysts
European banks are generally safer and stronger than they were when the European Central Bank stepped in as the pan-continental financial supervisor three years ago.
/goo.gl/HjzYmc

Bank Misconduct Under Scrutiny as Australia Inquiry Starts
Emily Cadman, Peter Vercoe – Bloomberg
Fairness in consumer lending first focus of yearlong inquiry; Scandals range from rate-rigging to mistreating customers
Australia’s banks, rocked by years of scandals and wrongdoing, risk having further misconduct exposed as a powerful government-appointed inquiry into the nation’s financial industry starts.
/goo.gl/o7rC3a

New members of the SMSG
ESMA
The ESMA Board of Supervisors has recently appointed the following four stakeholders to become members of the Securities and Markets Stakeholder Group (SMSG):
/goo.gl/Pxu7Ao

ESAs warn consumers of risks in buying virtual currencies
ESMA
The European Supervisory Authorities (ESAs) for securities (ESMA), banking (EBA), and insurance and pensions (EIOPA) have today issued a pan-EU warning to consumers regarding the risks of buying Virtual Currencies (VCs).
/goo.gl/oU6Nqm

Proposed Rule Change to Revise the Investment Banking Representative (Series 79) Examination
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) revisions to the content outline and selection specifications for the Investment Banking Representative (Series 79) examination as part of the restructuring of the representative-level examination program.
/goo.gl/2WP57r

Proposed Rule Change to Revise the Research Analyst (Series 86 and 87) Examinations
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) revisions to the content outline and selection specifications for the Research Analyst (Series 86 and 87) examinations as part of the restructuring of the representative-level examination program.
/goo.gl/BgjWUm

Proposed Rule Change to Revise the Operations Professional (Series 99) Examination
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) revisions to the content outline and selection specifications for the Operations Professional (Series 99) examination as part of the restructuring of the representative-level examination program.
/goo.gl/sPsRoq

Investing and Trading

Why Millennials Should Be Stoked About the Stock Market Crash
Ian Salisbury – Fortune
The stock market is down more than 10% in the last few weeks, raising the prospect that millennial investors, who just a few days ago were bragging about their 401(k) balances on the Internet, could face their first real bear market as investors.
/goo.gl/rMCqyR

Paul Tudor Jones: I’d rather be holding hot coal than U.S. Treasury bonds
Julia La Roche – Yahoo Finance
Legendary macro trader Paul Tudor Jones predicted that tax reform would have huge implications on the markets.
/goo.gl/qYNyLJ

When Will It End? Bloodied Traders Seeking Clues
Lu Wang – Bloomberg
Fed model suggests bull case for stocks is under threat; P/E ratios have yet to bottom if past corrections are guide
When will it finally stop? After a jarring week that rattled financial centers from New York to Hong Kong, and wiped out almost $5 trillion from stock markets, it’s the question everyone is trying to figure out.
/goo.gl/pgcCNV

Bitcoin Finds a Bottom as Risk Aversion Grips Global Markets
Camila Russo – Bloomberg
What’s supposed to be the most volatile asset in the universe is proving to be a bastion of stability compared with wild swings and carnage in global equities this week.
/goo.gl/tH9bam

The unstoppable rise of trading market volatility; Concern mounts that this week’s reaction is merely the first instalment of a bigger shock
Joe Rennison and Robin Wigglesworth in New York and Miles Johnson in London – FT
When the Chicago Board Options Exchange sat down with Goldman Sachs traders in 2003, it would prove to be one of the most profitable meetings in the exchange’s history.
/goo.gl/dGNyn3

Investors Are the Guinea Pigs in U.S. Fiscal Experiment; How long can this borrowing binge go on before it matters to the credit-ratings firms and global investors?
Joseph G. Carson – Bloomberg
In a span of less than two months, the U.S. Congress passed substantial tax-reduction legislation and agreed to a major increase in federal spending. Estimates are that the U.S. Treasury will at least double its debt sales this year to more than $1 trillion to make up for the lost revenue from the tax cuts and pay for this extra spending.
/goo.gl/DvAsQ8

‘Shut Up and Let Me Trade’: The Week That Rocked Stock Markets; An hour-by-hour account of Wall Street’s roller-coaster ride.
Bloomberg News
One of the wildest runs in U.S. stock-market history began with the collapse of arcane bets on volatility and ended with a sober realization: The easy ride is over. After heart-stopping swings in the Dow (Down 1,000 points! Up 500 points!), a market correction is finally here.
/goo.gl/GKKv86

Institutions

Australia’s big banks focus on job cuts as inquiry looms
Paulina Duran – Reuters
Australia’s big banks are responding to a revenue crunch by cutting jobs and other costs, prompting fears on the eve of an inquiry into their businesses that the industry’s tarnished reputation is about to take another hit.
/goo.gl/zJfK2A

Credit Suisse Says Claims Bank Misled Investors Unfounded
Albertina Torsoli – Bloomberg
Lawyers in U.S. trying to obtain class status for lawsuit; All regulatory reviews were closed with no action, CS says
Claims that Credit Suisse Group AG failed to disclose material information in 2015 and 2016 are “unfounded and without merit,” the Swiss bank said.
/goo.gl/UrkEXT

ETF market smashes through $5tn barrier after record month; Tectonic shift causes profound changes across global asset management industry
Chris Flood – FT
Investors ploughed more than $100bn in new cash into exchange traded funds in January, a record monthly inflow that helped drive assets held in ETFs globally above the $5tn mark for the first time.
/goo.gl/Q147VJ

Bridgewater investment chief sees new era of volatility; World’s biggest hedge fund expects end of easy money to trigger market ‘shakeout’
Robin Wigglesworth, US markets editor – FT
The world’s biggest hedge fund has warned that global markets are entering a new era of volatility as the world adjusts to higher interest rates after a decade of ultra-loose monetary policy.
/goo.gl/45BLKg

Bank Cybersecurity Heads Need More Face Time With CEOs
Yalman Onaran – Bloomberg
Industry group’s poll finds employee training as top priority; Group recommends direct flow of information to CEO and board
Just 8 percent of cybersecurity heads at U.S. financial firms report to the chief executive officer directly and more should do so to help facilitate decision-making, according to the Financial Services Information Sharing & Analysis Center.
/goo.gl/J4BbNq

Barclays Bank faces second charge over Qatar cash injection; Serious Fraud Office alleges bank had unlawful financial assistance during 2008 crisis
Martin Arnold and Cat Rutter Pooley in London – Ft
Barclays has been charged a second time by UK authorities over its 2008 emergency fundraising, raising the stakes for the British bank in its legal battle over the cash injections it arranged from Qatari investors to survive the financial crisis.
/goo.gl/iTMjXM

Regions

OPEC’s Oil Price Nightmare Is Coming True; U.S. shale production is surging on higher crude, now the fear is waning demand growth.
Julian Lee – Bloomberg
The latest surge in U.S. oil output will probably hasten the country’s rise to the top of the producer pile. More important, it’s starting to look as though at least half of OPEC’s nightmare scenario for 2018 — a surge in shale output and slowdown in demand growth — is coming true.
/goo.gl/hKYEQh

MSCI, Here’s Your India Whip on a Plate; By not allowing index providers to supply data to foreign bourses, New Delhi is begging for punishment.
Andy Mukherjee – Bloomberg
Move over, China. After much coaxing and cajoling, MSCI Inc. has given that country what it craved: an inclusion of Chinese A shares into its globally tracked benchmarks.
/goo.gl/AKk9BV

Why HNA Needs to Fail; Letting the conglomerate go bust would send the right signal.
Michael Schuman – Bloomberg
The latest news leaked out of China’s troubled HNA Group Co. is not good. Management has asked its employees to hand their paychecks over, with promises of big returns down the road. It is a pretty safe assumption that any company willing to try such a scheme is tottering on the edge of the financial abyss.
/goo.gl/pNmnkL

Coincheck heist sheds light on Japan’s rush to create cryptocurrency rules
Thomas Wilson and Takahiko Wada – Reuters
After the Mt. Gox cryptocurrency exchange was stung by a half-billion dollar theft in 2014, Japanese regulators swung into action.
/goo.gl/8cg9vQ

Brexit

U.K. Government to Offer Vision on Brexit as Divisions Rage
Andrew Atkinson – Bloomberg
Minister says speeches will put ‘some meat on the bone’; Splits have cast doubt over transition period wanted by firms
Divisions over Brexit were on display again on Sunday. International Development Secretary Penny Mordaunt said a series of speeches planned by Prime Minister Theresa May and other Cabinet ministers in the coming weeks would offer a vision of the sort of relationship the government is seeking with the European Union.
/goo.gl/dutHBe

May Reboots Road to Brexit With Speeches to End Tory Civil War
Andrew Atkinson – Bloomberg
U.K. premier and cabinet ministers set to outline positions; EU has thrown prospect of Brexit transition deal into doubt
Conservatives’ infighting over how to engage with the rest of a united Europe has helped bring down the party’s past three prime ministers.
/goo.gl/G9wSCv

Citigroup to invest in London, hire staff despite Brexit: FT
Reuters Staff
Wall Street bank Citigroup Inc (C.N) will set up an innovation center in London in one of the first investments by a big U.S. bank since Brexit, the Financial Times reported on Sunday.
/goo.gl/NSAhiC

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