Breaking News

Lloyd Blankfein Prepares to Exit Goldman Sachs as Soon as Year’s End

First Read

Hits & Takes
JLN Staff

Last week the European Commission announced a “Fintech Action Plan” aimed at helping crowdfunding platforms, like initial coin offerings, in the EU.~JK

On Friday, the CME officially got out of the credit defaults swaps business, as the CFTC approved the transfer of open interest to ICE Clear Credit.~JK

You might not know Madelyn La Salle, but you’ve probably seen her likeness. Artist John Storrs used the then 14-year-old as the model for his six ton aluminum statue of Ceres on top of the Board of Trade building. How’d they meet? Storrs saw her in an elevator on her way to a job interview.~SD

Former Barron’s columnist Steve Sears is joining a California FinTech company as Chief Market Strategist.~JJL


Kids Rock The Market: Magnetar’s Trading Challenge Brings Financial Education To High Schools
Jim Kharouf – JLN
When you enter Chicago’s Navy Pier Grand Ballroom for the Magnetar Team Challenge, something feels right – about education, about learning, about our kids and our future. –

Inside the beautiful and towering landmark space, 34 high schools brought 48 teams and more than 400 students to compete for the best high school trading team in the Chicagoland area. Each team of five to seven students huddled around computer screens at each table to plan and execute a trading strategy on an undefined previous trading period using $100,000 in a simulated stock portfolio. Each team was supported by teachers plus more than 50 volunteer coaches from the financial industry to help kids navigate economic fundamentals, volatility and market trends. Over the next several hours, a winner would emerge.

That was the backdrop on Saturday. For the rest of the story click HERE


Sponsored Content

Renato Mariotti


John Lothian Silver Beaver

John Lothian Wins Silver Beaver Award from the Boy Scouts of America
JLN Staff
Saturday night John Lothian received the Silver Beaver award from the Boy Scouts of America. The award recognizes registered Scouters of exceptional character who have provided distinguished service within a council. Among Lothian’s many accomplishments with the Boy Scouts is the Trading Tech 300 (TT300) program which he founded. TT300 asks firms in the Chicago financial community to hold merit badge workshops in their offices and has become very successful and popular both with the boys and the firms that participate.


R.J. O’Brien Limited Hires Elena Patimova as Senior Vice President, Business Development
Press Release
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, announced that Elena Patimova today joined its London-based affiliate, R.J. O’Brien Limited (RJO Limited), as Senior Vice President, Business Development.
In that role, Patimova will help the firm further grow its electronic sales, clearing and voice execution business while also raising the profile of RJO in the Europe, Middle East and Africa (EMEA) region. Patimova reports to Adam Solomons, RJO Limited Chief Customer Officer, EMEA.


ICOs, Cryptocurrencies; Securities Exchanges; Moving the Money
Gary DeWaal – Bridging the Week
A US federal court, the US Department of Treasury and the Securities and Exchange Commission all issued views on the regulation of cryptocurrencies that portend increasing complexity for market participants. A defendant in a separate criminal action, which alleges that an initial coin offering he orchestrated constituted an illicit sale of securities, argued that cryptocurrencies are not securities because they are currencies, and currencies are not included in the definition of securities under applicable law. Moreover, digital tokens issued in initial coin offerings do not take value from the sole or even significant entrepreneurial or managerial efforts of others – a hallmark of investment contracts (a type of security), he said.


Friday’s Top Three
Friday’s top read story by a very long, long margin was Crain’s breaking story Spot Trading appears to have shut down operations. Indeed they have. Second went to CFTC Commissioner Brian Quintenz’s Keynote Address by Commissioner Brian Quintenz before the DC Blockchain Summit. Third went to Bloomberg’s essay Bitcoin Is Ridiculous. Blockchain Is Dangerous: Paul Ford


MarketsWiki Stats
121,918,013 pages viewed; 23,036 pages; 212,037 edits
MarketsWiki Statistics


Lead Stories

Lloyd Blankfein Prepares to Exit Goldman Sachs as Soon as Year’s End
Liz Hoffman and Joann S. Lublin – WSJ
Lloyd Blankfein is preparing to step down as Goldman Sachs Group Inc.’s chief executive as soon as the end of the year, capping a more than 12-year run that has made him one of the longest-serving bosses on Wall Street.

****Bloomberg – Goldman: Blankfein Prepares for Exit And It’s Time for a New Era; Reuters – Goldman CEO Blankfein prepares to exit as soon as year-end; FT – Blankfein keeps Wall Street guessing on future at Goldman

G.O.P. Rushed to Pass Tax Overhaul. Now It May Need to Be Altered.
Jim Tankersley And Alan Rappeport – NY Times
The legislative blitz that rocketed the $1.5 trillion tax cut through Congress in less than two months created a host of errors and ambiguities in the law that businesses big and small are just now discovering and scrambling to address.

Brokers to Investors: Your Cash Ain’t Nothin’ But Trash
Jason Zweig – WSJ
Interest rates are on the rise, but customers of brokerage firms aren’t going along for the ride.
The Federal Reserve has driven short-term interest rates up a full percentage point since late 2016; one-month Treasury bills were yielding 1.6% this week. But you’d never know any of that from looking at the returns on the cash in your brokerage account.

How Illinois Universities Power The Chicago Startup Ecosystem
Peter Wilkins – Forbes
Ten years ago, Chicago was not a major player in the startup ecosystem. Now, it’s one of the most important cities in tech.

China Banking Crisis Warning Signal Still Flashing, BIS Says
John Glover – Bloomberg
China, Canada and Hong Kong are among the economies most at risk of a banking crisis, according to early-warning indicators compiled by the Bank for International Settlements.
Canada — whose economy grew last year at the fastest pace since 2011 — was flagged thanks to its households’ maxed-out credit cards and high debt levels in the wider economy. Household borrowing is also seen as a risk factor for China and Hong Kong, according to the study.

Congratulations to the Only Woman Speaking at the Sohn Conference!
Mary Childs – Barron’s
On Thursday, we learned the chosen few who will share their best trade ideas at 2018’s Sohn Investment Conference, one of the most prestigious and closely watched gatherings in the investing industry, which will take place on April 23 in New York.

Deutsche Bank Management Board Waives Bonuses for Third Year
Piotr Skolimowski and Steven Arons – Bloomberg
Deutsche Bank AG management waived its bonuses for a third consecutive year while the German lender is boosting payouts for bankers and traders despite reporting a loss for 2017.

U.S. stock market volatility gets derivatives conference hopping
Saqib Iqbal Ahmed – Reuters
February’s wild U.S. stock market ride brought a higher tempo and some must-hear presentations to the often staid discussions at the Cboe’s Global Market Inc’s major annual derivatives conference. In the shadow of the February plunge in stock prices and their more than two-thirds recovery from the decline, focus was on the dramatic demise of some funds as well as strategies that bet against market turbulence.

Opinion: Vanguard Disrupted Active Investing. Now It Could Save It.
Nir Kaissar – Bloomberg
Indexing pioneer Vanguard Group may be stock pickers’ last hope.
Investors are increasingly turning their stock picking over to computers. So-called smart beta exchange-traded funds track indexes that replicate traditional styles of active management such as value, quality and momentum. Investors handed $184 billion to smart beta ETFs from 2015 to 2017 while pulling $308 billion from equity mutual funds, according to data compiled by Bloomberg Intelligence.

Why Blockchain Will Survive, Even If Bitcoin Doesn’t
Christopher Mims – WSJ
We’re now awash in “crypto” hype—cryptocurrencies like bitcoin and fundraising efforts like initial coin offerings. All that noise has obscured the bona fide efforts involving the underlying technology, blockchain. Of all the manifestations of crypto, it’s the most seemingly mundane applications of blockchain that could lead to the biggest and most concrete changes in all of our lives.

Warren Keeps Pressure on Banking Bill, Says No 2020 Run in Mind
Ros Krasny and Katia Dmitrieva – Bloomberg
Senator Elizabeth Warren said a bill giving banks relief from rules imposed after the 2008 financial crisis could usher in a new round of taxpayer-funded bailouts, while making it easier for banks to discriminate on home mortgages and target minorities with excessive fees.

Big tech is already behaving like a big bank
Lionel Laurent – Bloomberg
Picture a bank that lends $1 billion to small businesses in 12 months, holds $150 billion in corporate bonds, runs the world’s largest money-market fund, offers mobile payments and credit cards, and gives customers cash balances that can be topped up across thousands of homely bricks-and-mortar outlets. Except it’s not really a bank at all, but a technology firm.

Japan’s Coincheck to start repaying customers Monday after digital money heist
Japanese cryptocurrency exchange Coincheck Inc, reeling from government reprimands over lax standards after $530 million dollar theft of digital money, said it would from Monday start repaying customers affected by the heist.

Don’t Spend A Cent On Bitcoin Until You See John Oliver’s Cryptocurrency Warning
Ed Mazza – HuffPost
Confused by cryptocurrencies? Baffled by bitcoin?
“Last Week Tonight” host John Oliver is here to help with a funny-but-thorough explanation of all the terms being thrown around and the absolutely crazy amounts of money some people are making just by owning them.

Exchanges, OTC and Clearing

CFTC Approves the Transfer of Open Interest in Credit Default Swaps from CME to ICC
At the request of Chicago Mercantile Exchange Inc. (CME) and ICE Clear Credit LLC (ICC), the Commodity Futures Trading Commission (CFTC) issued an order today approving the transfer of all open interest in credit default swaps (CDS) at CME to ICC.

‘We all better listen up’: The CEO of an FX trading firm says Wall Street needs to pay attention to the breakneck growth of crypto exchanges
Frank Chaparro – Business Insider
Some of most powerful people on Wall Street have derided cryptocurrencies as a “fraud,” “bleeding edge,” and as a “bubble.”
But it might be cryptocurrency companies that have the last laugh, according to David Mercer, the chief executive of LMAX Exchange, a UK-based forex trading technology company.

NZ Exchange Seeks Scale Through Strategic Alliances
NZX provides a further update on its refreshed strategy and delivery plans, announcing its intention to progress strategic alliances with global exchanges in order to increase its connectivity and global scale.


SGX collaborates with FinTech firm Smartkarma to roll-out C-Suite Pilot Program
Singapore Exchange (SGX) and FinTech firm Smartkarma today announced a partnership to roll out the C-Suite Pilot Program, a cloud-based platform that will enable SGX-listed companies to streamline their communication and data reporting to the institutional, analyst and investor communities.

IBM Reveals 400 Blockchain Projects with 63 Future-Minded Companies
The American powerhouse tech company IBM revealed in a new investor briefing that more than 63 IBM customers have embraced the company’s blockchain platform. Recently, interest in distributed ledger technology has caught fire with companies the world over.

Twitter Says It Is Implementing Measures to Prevent Crypto Scams
Nour Al Ali – Bloomberg
Twitter Inc. is attempting to halt alleged cryptocurrency-related scams spreading via its platform, joining fellow social media companies in striving to cut down on harmful content.
Twitter is aware of cryptocurrency-related “manipulation,” and is implementing measures to “prevent these types of accounts from engaging with others in a deceptive manner,” a spokesman told Bloomberg, declining to elaborate further.

Bitcoin sentiment data added to Thomson Reuters terminals
John Detrixhe – Reuters via Quartz
Thomson Reuters has added bitcoin sentiment to its financial data feeds that are used by professional traders around the world. While bitcoin and its crypto asset cousins have mainly become a phenomena among individual retail investors, the rollout shows one of the ways that digital tokens are gradually entering the world of institutional investing.

Ripple hires Bloomberg TV’s Cory Johnson as chief market strategist
Ari Levy – CNBC
Ripple, the payments start-up that holds billions of dollars worth of digital currency XRP, has hired a chief market strategist to tell its complex story to investors.
Bloomberg Television’s Cory Johnson confirmed to CNBC that he left the news network this week and started at Ripple on Thursday. A former hedge fund manager, Johnson spent eight years at Bloomberg, primarily covering technology on TV and for Bloomberg Radio.

Jeff Bezos Wants To Send Amazon Prime To Your Home…The One He Owns The Mortgage On
At this point, Amazon’s world domination plans have become something of a standing joke, the only problem being that with every new industry the company steps into, there are by definition fewer people laughing.


Warren Keeps Pressure on Banking Bill, Says No 2020 Run in Mind
Ros Krasny and Katia Dmitrieva – Bloomberg
Senator Elizabeth Warren said a bill giving banks relief from rules imposed after the 2008 financial crisis could usher in a new round of taxpayer-funded bailouts, while making it easier for banks to discriminate on home mortgages and target minorities with excessive fees.
The Massachusetts Democrat, a popular figure among progressives and a regular target of scorn for President Donald Trump, also said in a series of interviews on Sunday morning political shows that she’s not running for president in 2020.

Mueller Might Delay Obstruction Charges in Trump Probe
Special Counsel Robert Mueller’s investigation into whether President Donald Trump obstructed justice is said to be close to completion, but he may set it aside while he finishes other key parts of his probe, such as possible collusion and the hacking of Democrats, according to current and former U.S. officials.

Putin’s Russia: From basket case to resurgent superpower
Vladimir Putin and his Russia look more invincible today than at any other time in his 18 years in power.

Treasury Secretary Mnuchin Gives Consent for Release of UCLA Video
Kate Davidson – Bloomberg
‘Our prior objection was providing a platform for the non-student protesters, who sought to disrupt the event,’ a Treasury spokeswoman said
Treasury Secretary Steven Mnuchin has had a change of heart about a video showing him being heckled at a California university last month.


CFTC Financial Data for Futures Commission Merchants Update
Futures commission merchants (FCMs) and retail foreign exchange dealers (RFEDs) must file monthly financial reports with the CFTC’s Division of Swap Dealer and Intermediary Oversight (DSIO) within 17 business days after the end of the month. Selected financial information from these reports is published below. The most recent month-end information generally is added within 12 business days after FCMs and RFEDs file their reports, but occasionally may be added later. For example: The 17th business day filing “due date” for February 28, 2015 financial reports was March 25, 2015. The 12 business day target for posting these data was April 10, 2015.

Mess of Beaufort Securities raises wider questions about Aim
Kate Burgess – Financial Times
A week or so ago, a chill wind blew through London’s junior market. The Financial Conduct Authority used special powers to shut down Beaufort Securities, the small-company stockbroker based close to the Gherkin building that boasted of being “number 1 broker” for miners on the Alternative Investment Market.

Former Transmar executives plead guilty to U.S. fraud charges
Brendan Pierson – Reuters
Two former executives at Transmar Commodity Group Ltd pleaded guilty on Friday to defrauding banks to win a $400 million credit line for the now bankrupt New Jersey-based cocoa trading company.

Martin Shkreli Sentenced to Seven Years in Prison
Patricia Hurtado and Erik Larson – Bloomberg
Martin Shkreli, the pharmaceutical industry’s enfant terrible, was sentenced Friday to seven years in prison, putting an end to a saga that captivated and sometimes enraged Washington, Wall Street and the tabloids.

SEC Charges Penny Stock “Mailman” With Scalping Investors In Gold Mining Stocks
The Securities and Exchange Commission has charged a penny stock promoter based in Florida with defrauding investors in a pair of gold mining stocks by secretly amassing shares before touting the companies publicly. He allegedly sold the bulk of his stock and reaped more than $1.1 million in illicit profits after his promotions caused the share prices and trading volumes to skyrocket.

SEC Foils Penny Stock Executive’s Plan to Pump Stock and Exploit Investors
The Securities and Exchange Commission today barred the president of a penny stock company from ever again serving as a public company officer or director after he was caught making false and misleading statements about the company to investors in an effort to increase demand for the stock.

Scam-hit PNB may need to provide for around Rs 60 bn in losses this quarter
Somesh Jha – Business Standard
Punjab National Bank may have to provide for around Rs 60 billion in losses in this quarter due to the Rs 127 billion scam related to the fraudulent Letters of Undertaking (LoUs).

Investing and Trading

S&P accused of weakening ratings model to win business in landmark Australian lawsuit
Tom Westbrook – Reuters
Ratings agency Standard and Poor’s weakened its risk assessment criteria to win business and turn out high ratings on opaque debt products that started to unwind during the global financial crisis, an Australian court heard on Monday.

Global super rich are booking profits and slashing risk following February’s harsh shakeout, says Citi private bank
Alun John – South China Morning Post
The volatility which hit markets with a jolt in February has changed the way the super rich are investing their money.
Peter Charrington global head of Citi Private Bank, said that his clients around the world are starting to turn more defensive in how they invest their money, looking to protect the gains they have made.

Rockefeller Estate Sells for 50% Over Its $22 Million Asking Price
The mansion owned by the estate of David Rockefeller sold for $33 million. The 75-acre property is located in New York’s Westchester County.
Katherine Clarke – Wall Street Journal
A Pocantico Hills, N.Y., mansion owned by the estate of David Rockefeller, the venerable chief executive of Chase Manhattan Bank, has sold for $33 million, 50% above its $22 million asking price.

Die Hard With a Vengeance: Mt. Gox is Killing Crypto Again
Rachel McIntosh – Finance Magnates
Outcry has erupted across the crypto community as many have accused the man responsible for the remainder of Mt Gox’s assets of intentionally or unintentionally contributing to the sinking price of Bitcoin, according to a report from Business Insider.

Regulatory Scrutiny Sends Bitcoin Into 20% Tailspin This Week
Andrea Tan and Lily Katz – Bloomberg
Bitcoin’s rough week headed for a bitter ending.
The virtual currency fell 6 percent to $8,760 at 12:30 p.m. in New York Friday, after earlier losing as much as 10 percent.


Keep calm and carry on with policy normalization, BIS tells central banks
Marc Jones – Reuters
The recent volatility in global financial markets should not deter top central banks from lifting interest rates or ending years of unprecedented stimulus, the Bank for International Settlements said on Sunday.
The latest report from the Switzerland-based group said that after such a long period of calm there were bound to be more market wobbles and that trade war worries were making the “delicate task” of trying to normalize policy more complicated.

Deutsche Bank to pay staff 2 billion euros in bonuses for 2017
Deutsche Bank (DBKGn.DE) said on Sunday its 2017 bonus pool would be above 2 billion euros ($2.46 billion), as the loss-making bank seeks to retain staff during a major overhaul.
But the bank’s top managers are foregoing their annual bonuses for 2017 after coming under fire for awarding big incentive payouts even though Germany’s largest bank lost money last year.

Old Dogs Learn New Tricks in Payments Battle
Aaron Back – WSJ
Now that they’ve gotten their act together, don’t count big banks out of the mobile payments war.
The way Americans make purchases and pay friends has changed rapidly over the past few years. Major financial institutions initially were caught off guard by the success of digital upstarts like Venmo, the payment app owned by PayPal that makes it easy to transfer money to friends with a few smartphone clicks.

ECB staff eyes rate rise in mid-2019, but road looks bumpy, sources say
Francesco Canepa, Frank Siebelt – Reuters
European Central Bank staff offered policymakers meeting this week a scenario where interest rates would be raised in mid-2019 after winding down their bond purchases at the end of this year, three sources told Reuters.


Chile says companies to invest $754 million in lithium industry
Chile’s development agency Corfo said on Friday that companies from China and South Korea, as well as Chile, had been approved to make investments of around $754 million in the red-hot lithium industry.


Economist Paul Johnson: ‘We are nowhere near out of austerity’
Stephen Moss – The Guardian
As the man relied on to make sense of the numbers in the chancellor’s spring statement, the IFS director warns that cuts have taken Britain to crunch point – and that Brexit will make it worse

Think-tank accused of trying to drive Theresa May towards a hard Brexit is left in turmoil after exodus of top staff
Simon Walters -The Mail
A controversial think-tank accused of trying to drive Theresa May towards a hard Brexit was in turmoil last night after an exodus of top staff. Up to six senior figures have quit the Legatum Institute since The Mail on Sunday’s revelations about its hidden influence on the Government’s EU agenda.


Auditing market that makes ‘lemons’ of us all must change
Jonathan Ford – Financial Times
When the American economist George Akerlof wrote his celebrated 1970 paper about “lemons”, he described a dysfunctional world where inferior goods drove out better ones because suppliers could not attract a premium for higher-quality products.
Customers might be prepared to pay $1,000 for a “peach”, a well-kept used car, as against just $500 for a “lemon”, in Mr Akerlof’s example. But if the lemon owners concealed their cars’ faults and passed them off as peaches, buyers would rationally lower the price they would offer to reflect the higher possibility of ending up with a duff vehicle. That way, through a process of adverse selection, those lower prices would lead to the peaches being withdrawn from the market. All that would remain would be duds.

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About Author

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