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Author Archives: Jeff Bergstrom

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

JLN Financials: Pressure mounts on EM nations to lift rates; China’s ‘invisible man’ quits forex role; A good shepherd for Europe’s revival Standard

First Impressions A Momentary Lapse Douglas Ashburn – John Lothian News There appears to be a movement afoot to bring the term “Lehman Moment” into the vernacular. But like most financial buzzwords, the phrase is usually not used in the right context. The Lehman bankruptcy occurred in the middle stages of a worldwide selloff. Lehman was but one casualty among many to occur between late 2008 through the first quarter of 2009. Right now, developed markets are only slightly below all-time highs, and have been on a one-way rally for several years. This, however, did not stop a Bloomberg editor…

JLN Options: Emerging-Market VIX Surges Most in Two Years on Selloff; A Spike in Options Trading Before Herbalife’s Stock Fell; What Friday’s VIX Pop Could Mean for the Market Standard

Lead Stories Emerging-Market VIX Surges Most in Two Years on Selloff Nikolaj Gammeltoft and Callie Bost – BloombergEquity volatility from India to Brazil and Turkey jumped the most in two years as turmoil spread across global markets amid a selloff in developing-country currencies and growing concern over China’s economy. http://jlne.ws/M4TAg0 Emerging Markets ‘Low Volatility’ Funds Are Working (Sort Of)Brendan Conway – Brendan ConwayFriday’s emerging-markets selloff is a good time to check in with exchange-traded funds promising a smoother ride. Result so far in 2014: They’re working. Sort of. A little bit.http://jlne.ws/1aYaRRB A Spike in Options Trading Before Herbalife’s Stock FellWilliam…

JLN Financials: Goldman Gives A Very Simple Explanation For Why The Market Could Keep Going Down; Parsing Bernanke’s Legacy; Draghi Sees Progress in Euro Zone, but Puts Banks on Notice Standard

First Impressions The CME Should Buy the CBOE Soon John Lothian – John Lothian News The CME Group should buy the CBOE soon. I can’t believe I am writing this, but that is the conclusion I have come to. The reason why is that if they don’t act soon, the CBOE may become too expensive to justify buying. The CBOE stock price was up 76 percent last year and its market cap is $4.3 billion. The CME’s stock was up 55 percent, still outperforming the market, but not the CBOE. CME’s market cap stands at $25 billion, just a shade…

JLN Options: Demand for protection against U.S. equity selloff soars to record; Two Record Volume Days for SPX Weeklys; 426,955 Yesterday; Bank of America Simplifies Options Algo Offering Standard

Commentary and Insight The CME Should Buy the CBOE SoonJohn Lothian – John Lothian News The CME Group should buy the CBOE soon. I can’t believe I am writing this, but that is  the conclusion I have come to. The reason why is that if they don’t act soon, the CBOE may become too expensive to justify buying. The CBOE stock price was up 76 percent last year and its market cap is $4.3 billion. The CME’s stock was up 55 percent, still outperforming the market, but not the CBOE. CME’s market cap stands at $25 billion, just a shade…

JLN Financials: Contagion Spreads in Emerging Markets as Crises Grow; Investors, look beyond Davos to indebted Detroit; What’s next for FX structured products, ETFs and indexes? Standard

First Impressions Open for Business: Competition Heating Up in the New Market Structure JohnLothianNews.com Swap execution facilities (SEFs) were given life by the Dodd-Frank Act, which requires over-the counter (OTC) swaps to be cleared and traded on this new type of regulated platform. The CFTC published its final SEF rules in mid-2013 and trading commenced on 18 registered SEFs. John Lothian News interviewed a dozen of the leading SEF operators, regulators and other participants and put together a three part series on SEF regulation, the changing market structure and the new technology required to make it all happen. Part II…

JLN Options: What’s Behind the Dow’s 200-Point Bloodbath?; Are financial markets safer? Davos crowd say yes, but more to do; Derivatives get damning verdict at Davos Standard

Lead Stories What’s Behind the Dow’s 200-Point Bloodbath?Dan Carroll – The Motley Fool (via Daily Finance)What happened to the market’s momentum? That’s what investors are asking today in the midst of a horrible outing from the Dow Jones Industrial Average , which has lost 210 points as of 2:30 p.m. EST. All but a select few blue-chip stock have fallen in a gut-churning plunge that hasn’t discriminated by industry, as stocks across nearly every sector are in the red.http://jlne.ws/1eWfSJp Are financial markets safer? Davos crowd say yes, but more to doSteve Slater – ReutersThe financial system is safer than it…

JLN Financials: The mountain without Mohamed; Gross Told El-Erian ‘Hell No’ Seeking to Stop Departure; UBS at Davos: ‘Maybe the world’s not so austere’ Standard

First Impressions One Man Team Jim Kharouf – John Lothian News News of Mohamed El-Erian’s announced departure from PIMCO yesterday sent shockwaves through that organization and was a surprise to many in the markets. The question it brings for PIMCO’s co-founder Bill Gross is: Can PIMCO thrive without him? The answer will come soon enough. It’s not been a particularly great period for PIMCO, which saw investors pull $41 billion from the PIMCO Total Return fund last year, according to Bloomberg’s story today. Gross pointed out that recent years have not been kind to bond funds. Read More >>> http://jlne.ws/1asVDpU…

JLN Options: Investors bet on higher volatility; Volatility rising: why stockpickers will rule this market; Hot/Cold ETF Sector Movers Of Early-2014 Standard

Lead Stories Investors bet on higher volatilityJamie Chisholm – Financial TimesDespite supposedly being a volatility gauge – and, granted, Tuesday was a bit twitchy – Bloomberg calculates that the Vix moves in the opposite direction to stocks 80 per cent of the time.But what was particularly noteworthy was the underlying action in the Vix complex.http://jlne.ws/1g1vYqu Volatility rising: why stockpickers will rule this marketMatt Nesto – Yahoo FinanceThree weeks into the new year and stocks have nothing to show. After sprinting to multiple  record highs in December, the S&P 500 (^GSPC) is essentially flat for the year, which is just fine…

JLN Financials: The very model of a modern central banker; Following El-Erian’s Resignation, Meet the New Guard at Pimco; Credit market mops up banking’s toxic legacy Standard

First Impressions Mark Twain famously said that history doesn’t repeat, but it does rhyme. I doubt he was talking about economic cycles, but nowhere is is it more true than in the fallout from economic crisis. When a nation puts its self-interest above that of the rest of the world (and which nation would NOT do that?), it by definition exports its problems to the rest of the world. The response from the rest of the world follows nearly the same pattern. It begins with talk – in diplomatic settings and in the press. When that does not work, the…