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Author Archives: John Lothian

About Author

Lothian is executive chairman and CEO of John J. Lothian & Co. and editor of the John Lothian Newsletter. He publishes MarketsWiki.com, MarketsReformWiki.com, MarketsWikiEducation.com, JohnLothianNews.com and three industry newsletters.

This is No Bank Robbery Standard

John Lothian

When someone robs a bank and gets away with the money, they have something fungible (cash) and easily hid. While the authorities may be able to trace the serial numbers on the bills as they start to show up in circulation, there are no other official records for the physical bills to be traced. The MF Global situation is different. Money is missing, like in a bank robbery, but the money all moved into and out of MF Global’s bank accounts where there are all kinds of physical and virtual records to trace the whereabouts and the end location of said funds….

John Lothian News launches FuturesCrowd.com Standard

FuturesCrowd

Who wants to be a Millionaire? In the television game show “Who Wants to be a Millionaire,” contestants have 4 choices on how to answer the questions.  They can answer themselves, or if they don’t know the answer, they can use one of three lifelines to try to come up with the answer. There are three types of lifelines that were used when I watched the Regis Philbin US version of the show: 50/50, Phone a Friend and Poll the Audience. Each one of these lifelines has a unique approach to problem solving.  50/50 is purely probability based.  You get…

CME Customer Letter Brings Empathetic Clarity to Unclear Situation Standard

John Lothian

The CME Group is getting bashed in the hallways, elevators and reportedly on the trading floors of the exchange over the way the MF Global bankruptcy played out. While some of this sometimes caustic criticism is justified, much of it is not. Yesterday the CME put out a customer letter to bring those impacted by the bankruptcy up to date. It is also aimed to explain how the system works and that the guarantee fund is meant to protect the integrity of the clearinghouse. The CME points out that on “October 31, when the trustee was appointed, MF Global was over-collateralized at CME Clearing.”…

Who Wants In? Standard

Ticket Seller

On October 30th, the day before MF Global declared bankruptcy, I (John Lothian) wrote an email to some industry leaders expressing my strongly-held belief that there would be no deal to buy MF Global. The biggest reason was that there “has not been any player in recent years that has come into the futures brokerage business and acquired companies with MFG’s model and proven successful,” I wrote. The futures commission merchant (FCM) business model is broken, with no better example than by the struggles of MF Global.  It is hard to earn profits when a major revenue input to your business model includes interest…

Extraordinary Times Call for Extraordinary Measures Standard

John Lothian

Today the CME Group is expected to file with the SIPC appointed bankruptcy officials and federal authorities a plan for how to proceed with their part of the orderly liquidation of MF Global, specifically the movement of open futures and futures options positions to other clearing firms. Should the proposal be approved by the bankruptcy trustee appointed by SIPC, the bankruptcy court and the CFTC, or some combination therein, then positions and underlying margins will start to move. This would be different from the current situation where only positions can be moved at the previous day’s settlement price. Positions are…

Dear Mr. Chilton Standard

John Lothian

Commissioner Bart Chilton says, in defense of position limits that: While I’d have an even tougher rule in many respects if I were the only author, this is nonetheless a very strong, needed and imperative rule to ensure more efficient and effective markets devoid of fraud, abuse and importantly, manipulation. This rule balances the needs of consumers and market participants alike. Dear Mr. Chilton: While you think that the position limits rule will ensure more efficient and effective markets “devoid of fraud, abuse and importantly, manipulation,” you are DEAD WRONG.  We have long had laws outlawing murder (see the Ten…

Occupy Movement is a Viral Social Media Phenomenon Standard

John Lothian

Last week I gave a speech at the Chicago Federal Reserve to the publications groups from the various Reserve Banks around the country. The speech was held in the LaSalle Room on the 3rd floor of the Chicago Fed Conference Center. The room faced LaSalle Street and I could hear the Occupy Chicago protestors behind me as I spoke. In my opening remarks I noted that the Occupy Chicago movement was using some of the oldest communications techniques around, including banging drums, playing horns and marching up and down.  I also noted that a quick look on the web showed…

LaSalle Street Dinner – A Tradition of the Chicago Financial Community Supporting the Boy Scouts Standard

By John J. Lothian The annual LaSalle Street dinner supporting the Chicago Council of Boy Scouts of America is to be held on November 3, 2011 from 5 to 8 PM at 311 South Wacker. Traditionally the dinner was held on LaSalle Street, with tents stacked into the asphault street.  More recently the event has […]

MarketsWiki Questions Event a Real First Standard

Yesterday afternoon we held the culminating event for our MarketsWiki Questions:Exploring Financial Technology interactive video series.  We had a great turnout of industry participants and several dozen graduate students from the Illinois Institute of Technology’s Stuart School of Business. This style of event, featuring seven speakers and live music was a first for us, and […]