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John Lothian Newsletter: Eurex In Singapore Expansion Drive; NYSE Euronext Chief Calls On U.S. Policy Makers To Address Debt; Suits Mount In Rate Scandal John Lothian Newsletter,Newsletter

Eurex Exchange begins a membership drive in Singapore, seeking new banks and brokers there to give a boost to its clearing house. In the “Did you not hear me, or are you not listening?” department, the head of NYSE Euronext tells U.S. lawmakers that investors want to see an improvement in the country’s debt structure. Banks and companies linked to the LIBOR rate-setting scandal could be facing tens of billions of dollars worth of lawsuits and claims. In today’s First Read, Steve Meizinger has a heart; and you’ve got one more day to check out the MGEX Apple Juice Concentrate…

John Lothian Newsletter: SEC Probes Operators’ Use of Multiple Markets; ‘Gray Market’ Crops Up for New Issue of Greek Bonds; Hong Kong to bolster its clearing house John Lothian Newsletter,Newsletter

The SEC is looking into the possibility that some exchanges favor their biggest customers at the expense of smaller traders. A couple of banks are already trying to make a market for Greece’s new bonds, even though they don’t exist yet. HKEx unveils plans to beef up their clearing house to meet post-2008 regulations and demand. The MF Global story continues, with continued protests over executive bonus plans; and recommendations from the NFA on how to better manage customer funds in the future. In Europe, now that Greece is no longer scalding hot, the financial transaction tax receives more attention.

John Lothian Newsletter: OCC’s Walsh Warns of ‘Vast Over Reaction’ in Derivatives Regulation; Hedge Funds Scramble to Unload Greek Debt; Battle Over Brokers’ Duty to Clients At a Standstill John Lothian Newsletter,Newsletter

John Walsh of the OCC says that current regulation proposals to fix derivatives far exceed the scope of the problems.  Hedge funds, having loaded up on Greek debt, are trying now to unload the paper to avoid a bad haircut but are finding few takers. The SEC is stalled in the process of creating rules to require broker fiduciary duty to clients.  The FIA establishes a post-MF Global problem-fixing task force, with super-sized companies appointed to steer the effort.  In today’s top box, commentary from Doug Ashburn on the state of the Swiss Franc; and a lighter view of a…

John Lothian Newsletter: NYSE CEO: EU Antitrust Review ‘Fundamentally Flawed’; ICE appoints LME member JP Morgan to advise on potential LME bid; New Rules on Swaps Will Protect Big Traders John Lothian Newsletter,Newsletter

Reaction to the recommended rejection of the DB-NYSE merger is loud and varied, including one from the NYSE Euronext CEO that the regulatory review was just plain bad. ICE hires JP Morgan to help them work on a bid for the London Metals Exchange, which is also in today’s news for record-breaking volume announcements, and a quarrel over whether dramatically raising fees right before being acquired is a smart decision. The CFTC yesterday voted to pass rules and proposals regulating swaps, though despite publicity and buzz regarding MF Global, the new rule does not appear to address that type of…

John Lothian Newsletter: SEC wants banks to say more on European debt exposure; U.S. Inquiry of MF Global Gains Speed; LME’s steel plans tarnished by MF Global John Lothian Newsletter,Newsletter

The SEC is pushing banks to provide more data on their exposure to European sovereign debt, on the off-chance that they are swimming with the same sharks that ate MF Global.  Speaking of MF Global, regulators report progress in the “where did the money go” investigation; and (speaking of swimming) the London Metals Exchange find itself in a drained pool, its hopes of forging a steel benchmark futures contract at odds with dramatically lower volume with major player MF Global gone.  In the USA, Walter Lukken has been chosen to lead the Futures Industry Association; and JLN’s Jon Matte is…

Trustee Releases List of the 50 Largest Unsecured Creditors of MF Global Blog

Louis J. Freeh, Chapter 11 trustee of MF Global Holdings Ltd., filed the list January 3rd. JPMorgan Chase tops the list with over $1.2 billion in revolving credit facilit7 debt. Other financial institutions include Wilmington Trust, Banco Monex, UBS and Citibank. Curiously, the global IT consulting firm Headstrong Services, LLC is owed almost $4 million in trade payable debt, good enough for number five on the list. Click here for the entire court document (PDF).

Paying off the Debt Commentary

John Lothian

One of the sound bites that I hear, including from people like the caustic ex-patriot Jim Rogers, is that the US will never be able to pay off its debt. They never should pay it all off. It would be nice for them to be able to get back to the place where they are not creating more or as much debt, but first things first. The debt of the United States, backed by the taxing powers of the strongest economy in the world, is something that has been around since the start of the republic. It is something that…

Rolling Over Debt Commentary

John Lothian

Alexander Hamilton must have rolled over in his grave on Friday when Standard & Poor’s downgraded the credit rating of the U.S., the very thing Hamilton worked to turn from below junk to AAA before there were bond ratings. As the first U.S. Secretary of the Treasury, Hamilton was involved in the first grand deal surrounding U.S. debt and the assumption of debt from the states, creating the U.S. Treasury market that became the international standard it still is today. In order to get that deal done, Hamilton had to agree to move the capitol of the U.S. from New York…

Too Big To Fail Commentary,Regulation

John Lothian

The debate in Washington, DC about raising the debt limit has the potential to change the way the world looks at risk.  While there are all kinds of risk, one bedrock of an assumption has been that US government T-Bills are a risk free investment.  You will always get your money back, even if as a last resort the government has to print it to give it to you.  The US government will never default on its debt, is the belief and promise. Most importantly, US T-Bills and other US government debt are backed by the full faith and credit…