What does your clearinghouse DEFCON scale look like today?
By Jim Kharouf
Talk about timing.
Ten years after the collapse of the global financial market and a decade of rebuilding it, Nasdaq reports that Nasdaq Clearing had to cover for a clearing member default of EUR114 million on Nasdaq Nordic, a default so large it took up 68 percent of the default funds from other clearing member firms.
According to reports from the Financial Times and Bloomberg, a trader by the name of Einar Aas (one letter off from a joke here), defaulted on Nasdaq’s power market on September 11, forcing Nasdaq Clearing to tap into clearing member default funds. He reportedly was such a big trader he was allowed to clear his own trades.
In a glass half full world, this is where the industry can say the system backstops worked. But if a EUR114 million loss blows through almost 70 percent of the default fund, that raises serious questions at a time when global standards boards are looking at setting leverage ratios for clearinghouses and firms. Those entities include the Financial Stability Board which coordinates with Basel Committee on Banking Supervision, the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions. Just last month, they issued a report on central clearing of OTC derivatives, Incentives to centrally clear over-the-counter (OTC) derivatives: A post-implementation evaluation of the effects of the G20 financial regulatory reforms. The report stated “central clearing of standardized OTC derivatives is a pillar of the G20 Leaders’ commitments to reform OTC derivatives markets in response to the financial crisis.”
To read the rest of this story, go here.
Hits & Takes
Cinnober is being bought by Nasdaq. In related news, cats and dogs declare peace. Cinnober and Nasdaq fought like cats and dogs. They have common roots, former employees of each firm employed by the other and competitive animus that bordered on the comic.
When JLN was planning to hold our MarketsWiki Education World of Opportunity in Stockholm, Nasdaq offered to host the event. However, they said they would not let Cinnober’s CEO Veronica Augustsson in the building to present at the event.
I was told a story that Cinnober had held a recruiting event in Nasdaq’s Stockholm headquarters parking lot. Cinnober claimed to know nothing about this, but many at the firm said it sounded like a good idea.
That was the level of competition between these two firms, which now look like they are uniting, or coming back together.~JJL
The biggest story of the day is the default at Nasdaq’s Nordic market. See stories below.~JJL
Ranjan Bhaduri, president of Bodhi Research Group, presented his top trends in the managed futures space yesterday at the CTA Expo. Among them were: more fee compression for funds, larger funds will continue to attract capital, private equity investment is rising, and strategies such as factor investing, machine learning and crypto funds are hot.~JK
There are a lot of storms out there. Super Typhoon Mangkhut threatens the Philippines. Tropical Depression Olivia hit Hawaii. Tropical Storms Helene and Isaac and Subtropical Storm Joyce join Hurricane Florence in the Atlantic. Stay safe everyone.~SD
Rick Santelli of CNBC was the NIBA Expo keynote speaker yesterday at their annual members meeting held at the CME Group headquarters in Chicago. Santelli was very restrained in his criticism of President Trump, if you can call it that, compared to his epic rant about how President Obama’s Homeowners Affordability and Stability Plan was promoting bad behavior. This was the rant that spawned the U.S. Tea Party. He characterized the impact of Trump’s tariffs as nominal, though soybeans are down 20 percent since the tariff news broke, according to the presentation on trade that preceded his speech. And don’t even ask about hog prices.~JJL
Could The ‘ABBA’ Of Swedish Trading & Exchange Tech Be A Takeover Target?
Roger Aitken – Forbes
Mamma Mia! In what might be described as something akin to a musical comprising songs from pop sensation ABBA, one of Sweden’s best exports alongside IKEA, Volvo and the Saab JAS 39 Gripen airfighter, prestigious and award-winning Swedish trading technology firm Cinnober, whose systems are used by exchanges and clearing houses around the globe, could potentially be acquired or split up if does not get its house in order following recent interim losses and a Board room spat.
***** We missed this Forbes story on the intrigue at Cinnober that preceded today’s Nasdaq announcement they are buying Cinnober.~JJL
Wednesday’s Top Three
How do we teach the next generation of traders? RCM Alternatives believes its RCM University has the answer in Looking Backward, Thinking Forward, which was our top read item of the day on Thursday. Second was the FT’s CME-Nex deal filed with UK antitrust regulators. Third was Bloomberg’s piece Ray Dalio Spells Out America’s Worst Nightmare
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Nasdaq to buy Sweden’s Cinnober for $190m
Philip Stafford – FT
Nasdaq, the US exchange, has made a $190m bid to buy Cinnober, a Swedish trading technology group, to deepen its push into technology and analytics.
Nordic Power Whale Booted Off Exchange After $117 Million Loss
Jesper Starn and Lars Paulsson – Bloomberg
German-Nordic power spread has been widening this month; Aas’s portfolio was liquidated on Wednesday, DN paper says.
One of the most successful traders ever in the Nordic power market has been barred from trading on Nasdaq Inc. after massive losses at the start of this week.
****In the wake of the losses, Nasdaq Clearing will set up a second fund of $22 mln to help shield Nordic Commodities market. Sweden’s financial regulator is now looking into why the whale was able to clear his own trades. FT has Trader blows EUR100m hole in Nasdaq’s Nordic power market and Reuters has Nordic power trader’s loss costs Nasdaq and members 114 million euros. ~SD
Wall Street of the South Braces for Hurricane Florence
Christopher Flavelle and Jennifer Surane – Bloomberg
In Charlotte, untrammeled growth may put city in danger; A place defined by creeks, hills and towers for its banks
Charlotte built everything it needed to become banking capital of the South: gleaming office towers on a hill surrounded by parking lots, freeways and the assorted concrete markers of rapid development. Hurricane Florence and its floods may reveal the cost of the North Carolina city’s rush to build.
UK prepares legal fight with EU over commodities trading; Treasury to resist Commission attempts to impose VAT on derivatives
Laura Hughes and Jim Brunsden – FT
The British government is preparing for a legal battle with Brussels over EU attempts to force it to increase taxes on commodity derivatives trading, with the UK pledging to fight a move that could hit the City of London’s competitiveness after Brexit.
Maybe This Financial System Can’t Be Fixed; Better risk management isn’t enough. We need a different paradigm.
Cathy O’Neil – Bloomberg
Ten years after a crisis that brought the world to the brink of Armageddon, the people overseeing the world’s largest economy insist they’ve reduced the risk of another financial disaster. Just one problem: We need a different financial system, not just better risk management.
Fear Has Made Banking Too Boring; Regulation has deprived emerging markets of desperately needed infrastructure finance.
Mihir Sharma – Bloomberg
As bad as the 2008 crisis was, the cure could be worse. After Lehman Brothers fell and the U.S. government stepped in to rescue finance from its worst instincts, many demanded that banking become “boring” again. Stolid lending, it was argued, was what banking should be all about.
’08 Autopsies Ask the Wrong Questions; To prevent another crisis, figure out how behaviors could have been changed in 2006.
Aaron Brown – Bloomberg
It’s been a decade since the collapse of Lehman Brothers Inc. triggered the worst financial crisis since the Great Depression, and many market participants are still asking the wrong questions about that once-in-a-lifetime (hopefully) event.
No Lehman Repeat, but a Great Opportunity to Lose Money Is Coming Anyway; Simplifying massively, recessions happen when the economy runs out of cheap money or resources to support growth
James Mackintosh – WSJ
Economists, financiers and regulators have spent much of the past few weeks discussing how, 10 years on from Lehman’s failure, a repeat can be avoided. The sad truth for investors is that the next bear market is likely to produce panic and hefty losses, even without another financial crisis. And it might not be too far away.
Decade later: Safer financial system yet much hasn’t changed
On the brink of crumbling a decade ago, America’s financial system was saved by an extraordinary rescue that revived Wall Street and the economy yet did little for individuals who felt duped and left to suffer from the reckless bets of giant banking institutions.
A.I.G. Hasn’t Emerged From Its Lost Decade Yet
Richard Beales – NY Times
Anyone who has held shares in the insurer American International Group since the end of 2007 is still nursing a 95 percent stock-price loss. That’s even worse than Citigroup, its fellow crisis basket case. The insurer is finally emerging from a lost decade after receiving a controversial $182 billion government bailout in 2008. But investors remain wary.
Exchanges, OTC and Clearing
ICE Bakkt Big Breakthrough is Offering Physically Delivered Daily Bitcoin Futures
Bitcoin Exchange Guide
Are you interested in investing in Bitcoin futures? Now you have another option to do it. While you could only invest in Bitcoin futures with CBOE and CME before, you have another interesting option now. ICE’s contracts are delivered physically directly to you.
LME issues Brexit warning
Neil Hume – FT
The London Metal Exchange has warned that it may be unable to process trades for some European members of its clearing house after Brexit.
EurexOTC Clear: Decommissioning of Euribor Fixings for 2 weeks, 2 months and 9 months
As announced by the European Money Markets Institute (EMMI) on 26 March 2018, the 2 weeks, 2 months and 9 months Euribor index tenors will be decommissioned (Decommissioned Rates) on 3 December 2018.
PGGM: Eurex Clearing is securities lending’s ‘most important innovation’
In a recent interview, PGGM sees Eurex Clearing as the “most important innovation” in securities lending in the past few years, according to Roelof van der Struik, investment manager at PGGM.
Startups get expanded access to later stage financing; GP Bullhound becomes new partner of Deutsche Boerse Venture Networks
With a new cooperation, the more than 160 startups from the Deutsche Boerse Venture Network have been given extended access to financing: The international M & A advisory and tech investment company GP Bullhound is now part of the network. Above all, companies in the later stage phase will benefit from this. GP Bullhound offers its consulting services to network members who are in the growth phase and are seeking a new round of growth financing or a corporate sale. German companies with lower financing requirements are specifically brokered to Deutsche Boerse as part of their partnership with GP Bullhound.
HKEX Joins World Economic Forum as Strategic Partner Associate
Hong Kong Exchanges and Clearing Limited (HKEX) announced today (Friday) that it has become a Strategic Partner Associate of the World Economic Forum (WEF), the international organisation for public-private cooperation.
HKEX to Offer Meituan Futures and Options and Include Meituan on Key Lists
Meituan Futures and Options to be introduced on 20 September; Issuers can list Meituan derivative warrants when Meituan shares debut; Meituan shares to be included in Designated Securities Eligible for Short Selling when they begin trading
Hong Kong Exchanges and Clearing Limited (HKEX) announced today (Friday) the following initiatives in connection with plans of Meituan Dianping (Meituan, stock code: 3690) to list its shares at HKEX on 20 September 2018.
HKEX Reschedules Rollout of Northbound Investor ID Model for Stock Connect
Hong Kong Exchanges and Clearing Limited (HKEX) announced today (Friday) it has rescheduled the final testing and rollout of the investor identification model for Northbound trading in Stock Connect, its mutual market access programme with the Shanghai and Shenzhen stock exchanges, to avoid any disruptions from Super Typhoon Mangkhut, which is expected to affect Hong Kong in the next few days.
SGX named “Derivatives Exchange of the Year” by Asia Risk for fifth consecutive year
Award recognises SGX’s efforts to uphold investors’ access to emerging markets; Standout product innovations include SGX FlexC FX Futures solution
Singapore Exchange (SGX) has been named “Derivatives Exchange of the Year” by Asia Risk magazine for the fifth consecutive year, retaining a prestigious award that recognises best practices in risk management.
TOCOM Participates In FIA Expo 2018
TOCOM participates in FIA’s 34th Annual Futures & Options Expo (FIA Expo 2018), which is to take place from October 16 to October 18, 2018 at the Hilton Chicago in Chicago, the United States.
Nasdaq Stockholm Orders Oscar Properties Holding AB To Pay A Fine Corresponding To Two Annual Fees
The Disciplinary Committee of Nasdaq Stockholm has found that Oscar Properties Holding AB (“Oscar Properties” or the “Company”) has breached Nasdaq Stockholm’s Rule Book for Issuers (the “Rule Book”) and, accordingly, has imposed a fine on Oscar Properties amounting to two annual fees, corresponding to an amount of SEK 410,000.
The Fintech Banks Are Coming: Why You Should Care
Donna Fuscaldo – Forbes
The fintech banks are coming. With regulators accepting applications from financial technology startups for national bank charters, traditional banks are going to see a lot more competition. Potentially bad news for them. But for consumers, it could be a win if it results in better service and lower costs.
The digital Chicago plan
The Chicago Plan, one of the most important ideas to emerge from the Great Depression of the 1930s, sought to abolish banks as we know them. The plan, promoted by a group of economists including Irving Fisher, pushed for all customer deposits to be backed by reserves at the central bank.
CFTC and Singapore central bank sign fintech pact
The US Commodity Futures Trading Commission (CFTC) and the Monetary Authority of Singapore (MAS) today signed an arrangement to foster greater cooperation in FinTech.
The arrangement supports both authorities’ efforts to facilitate FinTech development and innovation in their respective markets. This arrangement is the CFTC’s second FinTech cooperation arrangement with a non-US authority and its first with an authority in Asia.
Morgan Stanley May Enter the Bitcoin Market with a Derivative Product
William A. Ebbs – Bitrates
Morgan Stanley’s move comes at a time when there is significant controversy over Wall Street’s role in the cryptocurrency sector.
Wall Street’s involvement in the cryptocurrency sector is intensifying. The latest move in this trend comes from Morgan Stanley, an American multi-national investment bank now expected to enter the Bitcoin market with a derivative trading product that will allow investors to go long or short on Bitcoin through swap trading.
Canary Wharf departures show strains in wider crypto market; Collapsing prices force sector’s brokerages to retrench, cut jobs or consolidate
Hannah Murphy and Philip Stafford – FT
In spring this year Level39, a tech start-up hub in London’s Canary Wharf, was buzzing with new cryptocurrency and blockchain businesses keen to make their mark.
Michael Novogratz Calls a Bottom in the Crypto Market
Olga Kharif and Sarah Ponczek – Bloomberg
Michael Novogratz, one of the best known investors in digital currencies, just called a bottom in the Great Crypto Crash of 2018.
EF Hutton Is Talking About Cryptocurrencies. Will Anyone Listen?
Lily Katz – Bloomberg
Fintech firm revives historic brand to launch $60 million deal; Company also plans crypto exchange and token research
Hardly anyone’s listened to EF Hutton since the 1980s. An over-the-counter fintech company thinks a foray into cryptocurrencies will change that
Warren Says Financial Giants Should Be Brought Down to Size
Elizabeth Dexheimer – Bloomberg
She has long assailed Wall Street, but says ‘I love markets’; Senator plays down speculation she may run for president
Corporate giants from Goldman Sachs Group Inc. to Amazon.com Inc. are too big and too powerful and in some cases, they should be broken up, according to Senator Elizabeth Warren.
Report: Michael Bloomberg Plans to Run for President in 2020 As a Democrat
Adam K. Raymond – Reuters
Billionaire ex-New York City mayor Michael Bloomberg is planning to run for president in 2020, according to a report in the Times of London. The report says Bloomberg, who toyed with an independent run for the White House in 2008, 2012, and 2016, is going to run as a Democrat.
Michael Bloomberg set to run for Democrats against Trump for presidency in 2020
David Charter, James Dean – The Times
Michael Bloomberg, the billionaire founder of a business news empire, is preparing to run for president as a Democrat, The Times understands.
He Was at Trump Tower. He Says He’s No Spy. Now He’s Suing
David Glovin and Erik Larson – Bloomberg
Washington lobbyist Akhmetshin accuses Browder of defamation; They tangled over Magnitsky Act, U.S. money-laundering case
The Russian-born lobbyist Rinat Akhmetshin admits he was at the infamous Trump Tower meeting. But he’s taken umbrage that a prominent opponent of the Kremlin has called him a spy, and now he’s issued a challenge: Prove it.
Diversity Is an American Strength, Not Weakness; As JFK said of going to the moon: Assimilating different people makes the country better not because it’s easy, but because it’s hard.
Noah Smith – Bloomberg
As the U.S. population becomes more diverse, some people on the political right are questioning whether the change will fray the fabric of American society. In a recent segment, Fox News host Tucker Carlson asked a pointed question:
CFTC Commissioner Quintenz to Keynote at ICDA 39th Annual European Summit (Burgenstock)
Ireland rebuffs calls to relax rules on exchange traded funds; Regulator’s stance will stall industry efforts to develop more active ETFs
Chris Flood – FT
Ireland’s central bank has rebuffed calls for a relaxation of the rules relating to exchange traded funds that would have made it easier for investment managers to launch actively managed ETFs.
Notorious Russian cybercriminal pleads guilty to US charges
A Russian man considered to be one of the world’s most notorious hackers pleaded guilty Wednesday to U.S. charges alleging he operated a network of devices used to steal computer credentials, distribute spam emails and install malicious software.
Cowen Execution Services fined $2.75 million for incomplete trading data; Formerly Convergex, Cowen Execution Services submitted incomplete data due to coding errors, according to the SEC.
Hayley McDowell – The Trade
The US financial regulator has handed Cowen Execution Services a fine of $2.75 million for submitting incomplete securities and trading information.
ASIC provides regulatory approvals for a proposed new product and ETFs for the Chi-X market
ASIC has updated the market integrity rules to facilitate the introduction of a new type of financial product that securities and derivatives exchange Chi-X Australia Limited (Chi-X) is introducing to its market, known as transferable custody receipts (TraCRs).
ESMA finds high level of diversity in national markets for structured retail products
The European Securities and Markets Authority (ESMA) has carried out a study of the EU market in structured retail products, from an investor protection perspective.
Enhancements to the REX System and Updates to Data and Other Requirements Applicable to Requests for Extensions of Time Under Regulation T and SEA Rule 15c3-3
Effective Date: December 3, 2018 (enhancements to the REX System to provide firms the ability to submit Securities Exchange Act (SEA) Rule 15c3-3(d)(4) extension of time requests via a batch file process and other updates to the extension of time request forms); February 25, 2019 (updates to data and validation requirements for extension of time requests under Regulation T and SEA Rule 15c3-3)
SEC Monitoring Impact of Hurricane Florence on Capital Markets
The Securities and Exchange Commission is closely monitoring the impact of Hurricane Florence on investors and capital markets.
Broker-Dealer to Pay $2.75 Million Penalty for Providing Deficient Blue Sheet Data
The Securities and Exchange Commission today announced that Convergex Execution Solutions LLC, now known as Cowen Execution Services LLC, will pay $2.75 million to settle charges that the broker-dealer firm provided the SEC with incomplete and deficient securities trading information known as “blue sheet data.”
US Commodity Futures Trading Commission and Monetary Authority of Singapore Sign Arrangement to Cooperate on FinTech Innovation
The US Commodity Futures Trading Commission (CFTC) and the Monetary Authority of Singapore (MAS) today signed an arrangement to foster greater cooperation in FinTech. The arrangement supports both authorities’ efforts to facilitate FinTech development and innovation in their respective markets. This arrangement is the CFTC’s second FinTech cooperation arrangement with a non-US authority and its first with an authority in Asia.
Our approach to overseas market operators seeking to apply to become a recognised overseas investment exchange (ROIE)
We have published a direction clarifying how an EEA market operator may make an application to become a recognised overseas investment exchange (ROIE) (PDF), to enable the participation of the exchange in UK markets, should they no longer be able to rely on MiFID II passport rights once the UK leaves the EU. Overseas investment exchanges which do not carry on regulated activities in the United Kingdom need take no action.
Investing and Trading
Marijuana Stocks Dropped After Some Troubling News for Canadian Pot Investors
Jeremy C. Owens – Barron’s
Cannabis-related stocks dropped in after-hours trading Thursday following a report that the U.S. may bar Canadians who invest in the companies from entering the U.S.
Shiller Says U.S. Stocks Could Go A Lot Higher Before They Fall
Adam Haigh and Caroline Hyde – Bloomberg
U.S. equity market currently ‘highly priced,’ says Shiller; Other strategists have highlighted vulnerabilities for stocks
Near-record U.S. stocks still have scope to zoom to new highs, according to Robert Shiller, the Nobel laureate who’s famed for his analysis of asset-price bubbles and who last year warned that the market was over-priced.
Metal Bulletin Successfully Completes Benchmark Assurance Review for Increased Number of Prices
Metal Bulletin, a leading source of trusted and transparent commodities data for the metals and mining markets, has successfully completed an external assurance review of some of its benchmark prices carried out by independent professional services company PricewaterhouseCoopers (PwC).
The Great Recession Knocked Them Down. Only Some Got Up Again.
Ben Casselman, Patricia Cohen and Doris Burke – NY Times
Recession stories tend to begin the same way: lost job, lost home, lost savings. How they end varies much more widely. New York Times reporters interviewed hundreds of people during the Great Recession, many of them in the midst of their darkest days. We spoke with five of them again.
How Fossil Fuels Won (and Lost) a Thirty Years’ War; Big Oil is just starting to pay a steep political cost for its short-term victories.
Liam Denning – Bloomberg
Thirty years ago this summer, James Hansen, then at NASA, provided landmark testimony to Congress about the links between fossil fuels and climate change. The U.S. was suffering one of its worst droughts ever and Yellowstone National Park was burning. Spurred to action, oil majors offered to help shepherd the world through a long, difficult energy transition. As the foremost repositories of energy expertise, and armed with big balance sheets and deep government contacts, they were natural partners in challenging an existential threat.
10 years later: How fund investing has changed
A decade ago, as Lehman Brothers went bust and the fragile financial system was teetering, fund investors wondered how bad it could get.
Introducing the S&P Global 1200 Communication Services Sector
John Welling – S&P Dow Jones Indices
The S&P Global 1200 can’t stay the same. Along with the S&P 500 and other headline indices from S&P DJI, many companies within the S&P Global 1200 will be given new sector assignments due to the upcoming Sept. 24, 2018, GICS updates.
FTSE Russell to decide on China A-shares inclusion “very soon”
Hudson Lockett – FT
FTSE Russell will decide in the coming weeks whether to include China-listed equities in its indices, the index provider’s chief executive said on Friday – possibly with a heavier weighting than that used by rival MSCI.
Dartmouth’s Endowment Gains 12.2%, Value Hits a Record
Michael McDonald – Bloomberg
Dartmouth College’s endowment reported a 12.2 percent gain, making it the first Ivy League school to release investment results for fiscal 2018.
Amazon’s Bezos Launches $2 Billion Fund to Help the Homeless
Molly Schuetz – Bloomberg
Day One Fund will also run network of preschools in poor areas; World’s richest person had solicited ideas from the public
Jeff Bezos and his wife, MacKenzie Bezos, launched a $2 billion fund to help homeless families and create a network of nonprofit preschools in low-income communities.
The mystery of the Lehman Brothers 10th anniversary bash; Hundreds of former staff have received invitations to a shindig at a smart City venue
Patrick Jenkins – FT
Mystery surrounds the organisation of a Lehman Brothers 10th anniversary gathering at the Ned on Friday night. Hundreds of former Lehman bankers have received invitations to a shindig at the City’s smartest hotel/party venue. The event, “supporting Tower Hamlets Education Business Partnership”, has been organised by the “Alumni Group”. Invites have been distributed by one Andrew Morton, with a short, sharp message attached: “In case you have not seen. Lehman Reunion 14th September see link below. Please pass along. Andy”.
Lehman’s Long Shadow: Bloomberg Opinion Special Edition; A decade later, we’re still figuring out what happened and what it means.
Mark Gongloff – Bloomberg
Ten years ago today, Lehman Brothers was about to tumble into a bankruptcy that would nearly bring down the global financial system. For the past two days, Bloomberg Opinion writers have looked back at the crisis, exploring what happened and what we’ve actually learned, if anything. You can find yesterday’s batch of stories here. And here are today’s:
Investec to spin off £109bn asset management business
David Ricketts – Financial News
Investec, the South African financial services group, will spin off its asset management division following a strategic review of its businesses. Investec Asset Management, which oversees £109bn across the UK, South Africa, Australia and the US, will be listed on both the London and Johannesburg stock exchanges.
The Good People at the ‘Bad Bank’; The investment bank was a place where those lacking an Ivy League pedigree could get a shot and succeed.
Jared Dillian – Bloomberg
I worked at Lehman Brothers Holdings Inc. when it collapsed a decade ago. My last job there was as a trader specializing in index arbitrage and exchange-traded funds. My first job? You could say I was an accidental security guard. It wasn’t glamorous, but that’s where I quickly learned what it meant to be a Lehmanite.
JPMorgan Sees Third-Quarter Trading Revenue Down From Year Ago
Michelle Davis – Bloomberg
JPMorgan Chase & Co. said third-quarter trading revenue will decline from the same period a year earlier.
Fund Files: iM Global takes stake in liquid alts shop; Janus unveils MBS ETF
Paris-based multi-boutique iM Global Partners has taken a 45% stake in liquid alternatives shop Dynamic Beta investments, which was previously named Beachhead Capital.
Goldman Dealmakers Wave Victory Flag as Solomon Picks His Team
Sridhar Natarajan – Bloomberg
Executives had widely expected Waldron to nab the No. 2 post; Scherr to become finance chief as Chavez co-leads trading unit
Goldman Sachs Group Inc.’s investment bankers are completing a takeover of their own firm.
Solomon’s Wisdom Shows in Goldman’s CFO Move; Goldman Sachs moves to replace a chief financial officer who had stumbled in the role
Aaron Back – WSJ
The shuffling of Goldman Sachs ‘s GS 0.08% top management, particularly the change in the chief financial officer role, is an encouraging sign that incoming Chief Executive David Solomon is willing to correct past mistakes.
Goldman Dealmakers Wave Victory Flag as Solomon Picks His Team
Sridhar Natarajan – Bloomberg
Executives had widely expected Waldron to nab the No. 2 post; Scherr to become finance chief as Chavez co-leads trading unit
Goldman Sachs Group Inc.’s investment bankers are completing a takeover of their own firm.
Chase Commits To Long-Term ‘Digital Everything’ Strategy
Jim Marous – The Financial Brand
Chase Bank wants to be the digital bank of the future. With bundled services and constant introduction of new digital solutions, Chase wants to meet digital customer needs across multiple platforms and devices.
Fidelity Investments winds down $3.5 billion index fund
Fidelity Investments is winding down a fund that had more than $3 billion in assets last year, with the Boston-based money manager citing an overlap in holdings of other funds used in its target-date products to explain the rare move.
BlackRock gets regulatory approval to set up new firm in France
BlackRock, the world’s largest asset manager, has obtained regulatory approval to set up a new alternative investment firm in France, in another sign of Paris’ increasing post-Brexit appeal for financial firms.
Goldman Banker Who Almost Left for Morgan Stanley Gets Promoted
Sridhar Natarajan – Bloomberg
Tammy Kiely, the senior Goldman Sachs Group Inc. banker who almost left for Morgan Stanley earlier this year, is getting a promotion.
INTL FCStone Markets Division launches new OTC interest rates swap products
INTL FCStone’s Chicago-based subsidiary, INTL FCStone Markets has expanded its OTC interest rates swap dealing capabilities to include cap and floor options on the London Interbank Offered Rate (LIBOR) with tenors out to 10 years.
Deutsche Bank warned about Danske clients; German lender said it was only comfortable with 1 in 10 customers
Richard Milne – FT
Deutsche Bank warned Danske Bank that it would only be comfortable dealing with one in 10 of a sample of customers at a branch that has emerged as the centre of one of Europe’s largest money-laundering scandals.
China says world trade system not perfect, needs reform
The current world trade system is not perfect and China supports reforms to it, including to the World Trade Organization, to make it fairer and more effective, Beijing’s top diplomat said.
U.S. Warns Russia It May Sanction New Gas Pipeline to Germany
Andrey Biryukov and Henry Meyer – Bloomberg
Energy secretary says U.S. against Nord Stream 2 construction; Russia concerned if U.S. penalizes ‘competitive’ gas link
The U.S. warned Russia that it may follow through on sanction threats over the construction of a major natural gas pipeline to Germany.
Argentina’s Inflation Rate Hits Highest Level of Macri Era
Patrick Gillespie – Bloomberg
Prices rose 3.9% in August from July, most since at least 2016; Annual inflation marked 34.4%, likely to accelerate further
Consumer prices in Argentina rose at their fastest pace in August since the nation’s statistics agency regained credibility in 2016, another sign that South America’s second-largest economy is heading for a recession this year.
China Is Overtaking the U.S. in Scientific Research; Beijing’s long-term efforts to promote academic scholarship are paying off.
Peter R. Orszag – Bloomberg
Thirty years ago in December, the modern exchange of scholars between the U.S. and China began. Since then, Chinese academics have become the most prolific global contributors to publications in physical sciences, engineering and math. Recent attempts by the U.S. to curtail academic collaboration are unlikely to change this trend.
The New Venezuelan Currency Is Just Three Weeks Old and Inflation’s Already 100%
Fabiola Zerpa – Bloomberg
It’s just been a few weeks since the rollout of Venezuela’s new money, and inflation in this new monetary era is already 100 percent.
Turkey Banks Tap $4.5 Billion Gold Reserves to Shore Up Finances
Rupert Rowling, Fercan Yalinkilic and Eddie van der Walt – Bloomberg
Central bank gold holdings fell 20 percent to 15.5m ounces; Loosening of reserve requirements opened floodgates in August
Commercial lenders in Turkey have pulled as much as $4.5 billion worth of gold reserves since mid-June in an effort to avert a liquidity crisis as the lira plunged.
Mark Carney warns of economic chaos in no-deal Brexit; BoE chief says ensuing property crash could see a third wiped off house prices
George Parker, Chris Giles and James Blitz – FT
Mark Carney, Bank of England governor, has delivered a “chilling” warning to Theresa May’s cabinet that a no-deal Brexit could lead to economic chaos, including a property crash that could see house prices fall by a third.
Amsterdam attracts more trading firms seeking post-Brexit EU base -source
Simon Jessop and Taiga Uranaka – Reuters
At least 20 financial firms are applying for licenses to operate in Amsterdam in preparation for Britain’s departure from the European Union, a source with knowledge of the matter said.
Labour to vote against Brexit deal, Emily Thornberry says; Shadow foreign secretary believes PM could be forced out before Christmas
Henry Mance and Jim Pickard – FT
The UK’s opposition Labour party is set to vote against Theresa May’s Brexit deal, according to one of Jeremy Corbyn’s most senior colleagues, who predicts that the lack of a viable exit from the EU would lead to the prime minister being forced from office before Christmas.
2 major organizations of newsroom leaders agree to merge
The American Society of News Editors and Associated Press Media Editors, whose membership of newsroom leaders and educators make them among the most significant organizations in media, have agreed to merge and will become the News Leadership Association.