A storied name in Chicago trading stumbles

Mar 4, 2019

First Read

Brace yourself. It may be time for a financial transaction tax
Jim Kharouf – JLN

In the past few weeks the financial transaction tax (FTT) has been suggested and floated everywhere from Chicago’s mayoral election campaign to candidates for the new presidential election. The search for new tax revenues often mentions Wall Street and LaSalle Street, and this time we may see a tax come into the securities and derivatives markets. And why not? Most voters carry a dim view of Wall Street, and financial markets will likely take a further beating in the run up to the 2020 US presidential election.

The 2018 American Enterprise Institute report “Public Opinion 10 Years After The Financial Crash,” cited a 2017 Cato/YouGov survey rating opinions of nine business and political categories. On a scale of 0 to 100, with 100 being warm and favorable, 57 percent viewed Wall Street unfavorably and 21 percent said favorably. That was dead last in “favorable” rankings behind large businesses, 35 percent, the federal government at 31 percent and, gulp, behind used car dealers at 26 percent and Congress at 23 percent. We’ve had three government shutdowns since the survey, so who knows, Wall Street may have powered ahead of Congress. And that’s just part of the report’s study of just how much the general public loves Wall Street.

To read the rest of this story, go HERE

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Hits & Takes
JLN Staff

Happy Women’s History Month to all of the women in the markets and related industries.~JJL

In celebration of Women’s History Month, NYSE presents Fearless Women with NYSE Executive Vice Chairman Betty Liu in conversation with C-suite executives from Fortune’s Most Powerful Women Summit.~JJL

The options industry has a new player – MIAX Emerald, the 16th U.S. options exchange, launched on Friday with 155 contracts trading. It features a hybrid fee structure. ~SD

Jeff Carter, an angel investor and former CME trader, has penned an epic commentary about “A Trader’s Life” on his PointsandFigures.com blog.~JJL

The financial news aggregation website Streeteye.com has announced it will discontinue operations at the end of March. Streeteye has a ranking of people who tweet and those who blog. It has the @johnlothian twitter account ranked number one for relevance with a score of 100%. Hopefully I can go out on top as they end operations.~JJL

Peter Borish is interviewed by Michael Covel on trend following radio? I thought radio was a top 10 kind of thing.~JJL

Peter Lenardos submitted to his resignation as Cinnober’s CEO (effective COB on 29 March). During his time at Cinnober his title changed three times (from Senior Financial Advisor to CFO to CEO.~JJL

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The Spread – OTC Options: Prescription Needed? – 3/1
JohnLothianNews.com
If Christopher Walken were a derivatives exchange executive, he might be known for the quote, “I got a fever, and the only prescription… is more clearing!”
Watch the video and see the stories referenced here »

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Brexit: Everyone Loses, but Britain Loses the Most
Institute For International Economics
This paper examines 12 economic simulation models that estimate the impact of Brexit. We provide their range of results and explain their associated assumptions and methodologies (macroeconometric models, computable general equilibrium [CGE] models, or mixed approaches).
/goo.gl/yFgcSv

****Gotta love this – of the 12 models used, only two yield gains for the UK after Brexit “because they are based on unrealistic assumptions.”~SD

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The Bill Gross You Didn’t Know: Taxes, Deficits and Asperger’s
Erik Schatzker – Bloomberg
Even after one of the most storied careers in financial markets, Bill Gross has a few surprises left. For one, he’s been diagnosed with Asperger’s syndrome, the autism-spectrum disorder. Gross says he lived most of his life unaware of the condition and now believes it helps explain not only why he was such a successful investor for so long but also why he could, by his own admission, rub people the wrong way.
/jlne.ws/2NHsg98

**** How does this happen? Someone that rich should have figured this out before.~JJL

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Test Your Knowledge About Market Indexes; The popularity of passive investing has resulted in an explosion of securities indexes. How much do you really know about them?
Ari I. Weinberg – WSJ
The investing world is awash in indexes. Originally built to benchmark stock, bond, commodity, real estate and currency performance, indexes now form the basis of funds and other investment products and strategies with more than $13 trillion in assets under management globally, according to Pensions & Investments, a provider of news and research to institutional money managers.
/jlne.ws/2VCLq2N

*****Some trick questions in here. How many securities in the S&P 500?~JJL

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How Giuliani Might Take Down Trump; The parallels between the Mafia and the Trump Organization are striking, and Giuliani perfected the template for prosecuting organized crime.
Garrett M. Graff – NY Times
Any onetime Mafia investigator who listened to the Trump “fixer” Michael Cohen testify Wednesday would have immediately recognized the congressional hearing’s historical analogue — what America witnessed on Capitol Hill wasn’t so much John Dean turning on President Richard Nixon, circa 1973; it was the mobster Joseph Valachi turning on the Cosa Nostra, circa 1963.
/jlne.ws/2VDrAED

***** Interesting take on the RICO laws.~JJL

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Appeal Not Appealing; Purported Fraudster Indicted for Fraud
Gary DeWaal – Bridging the Week
The Commodity Futures Trading Commission determined not to appeal a decision of a federal court that a well-known proprietary trading firm and its principal did not engage in manipulation or attempted manipulation as charged by the Commission in an enforcement action because they traded in a manner that exploited a flawed futures contract. Unrelatedly, the founder and principal operator of a company that marketed a purportedly fraudulent cryptocurrency was indicted for wire fraud and unlawful monetary transactions in a US federal court in Massachusetts.
/jlne.ws/2NHHQS1

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Friday’s Top Three
It may seem like we timed this with today’s piece on the Financial Transaction Tax, but that would be a stretch. Friday’s top story was indeed about the FTT, Sen. Brian Schatz will introduce new bill to tax stock trades and curb high-frequency trading from VOX. Second was the infographic from Alphacution Top 100 Players in US Listed Market Structure. And third went to Bloomberg’s article, One of Wall Street’s Most Popular Trading Strategies Is Now Failing

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Lead Stories

A storied name in Chicago trading stumbles; An SEC smackdown dings Options Clearing Corp.’s executive chairman Craig Donahue and disrupted his growth strategy.
Lynne Marek – Crain’s Chicago Business
After arriving at Options Clearing Corp. in 2013, Executive Chairman Craig Donohue launched an ambitious plan to bolster the sleepy financial utility’s capital base, boost dividends to its big exchange owners and upgrade its technology.
/jlne.ws/2ELsvgr

JPMorgan Pulls Crop Brokers From Chicago Options Trading Floor
Isis Almeida, Bloomberg News
JPMorgan Chase & Co. is pulling its agricultural commodity brokers from the options floor in Chicago amid a shift to electronic trading. The bank will no longer have a floor presence in agricultural options including corn, soybeans and wheat, the company confirmed. JPMorgan has six brokers trading farm-commodity options on the floor of the Chicago Board of Trade, according to people familiar with the matter, who asked not to be identified because they aren’t allowed to speak to the media.
/jlne.ws/2ELiEap

U.S. and China Near Deal That Could End Most U.S. Tariffs
Jenny Leonard – Bloomberg
The U.S. and China are close to a trade deal that could lift most or all U.S. tariffs as long as Beijing follows through on pledges ranging from better protecting intellectual-property rights to buying a significant amount of American products, two people familiar with the discussions said.
/jlne.ws/2VyWqhp

Quadriga Crypto Mystery Deepens With ‘Cold Wallets’ Found Empty
Doug Alexander – Bloomberg
Monitor for shuttered Canadian crypto exchange releases report; Wallets for holding Bitcoin have been empty since April 2018
When Quadriga Fintech Solutions Corp. founder Gerald Cotten died, account holders feared the encrypted access keys needed to recover C$190 million ($143 million) of cryptocurrencies held by the exchange in offline storage could be lost forever.
/jlne.ws/2VBWflD

Virtu closes $1 billion ITG acquisition; Agency broker ITG has been acquired by Virtu Financial for $1 billion after confirming plans to merge late last year.
Hayley McDowell – The Trade
High-speed trading firm Virtu Financial has officially closed its $1 billion acquisition of agency brokerage ITG, after announcing plans to merge in November.
/jlne.ws/2VtC9Ki

Fed Quizzed Primary Dealers About New Tool to Manage Rates
Alex Harris and Matthew Boesler – Bloomberg
The Federal Reserve Bank of New York has quizzed some primary dealers about a potential new tool for managing interest rates as the central bank prepares to halt its balance-sheet unwind, according to people familiar with the discussions.
/jlne.ws/2TuwPJ4

Shale Companies, Adding Ever More Wells, Threaten Future of U.S. Oil Boom
Christopher M. Matthews, Rebecca Elliott and Bradley Olson – WSJ
Shale companies’ strategy to supercharge oil and gas production by drilling thousands of new wells more closely together is turning out to be a bust. What’s more, the approach is hurting the performance of older existing wells, threatening the U.S. oil boom and forcing the maturing industry to rethink its future.
/jlne.ws/2VzpqFM

ICE Benchmark Administration Publishes the Results of the Survey on the Use of LIBOR
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has published the results of its survey on the use of LIBOR currencies and tenors.
/goo.gl/nc6UXW

Vanguard to End Cash-Management Service for Larger Customers; The money-management giant will shut down the VanguardAdvantage service on July 31
Dawn Lim – WSJ
Vanguard Group is shutting down a service for larger customers that paired a debit card with tools to help them manage cash.
/jlne.ws/2VtzrEu

Halfhearted regulators are to blame for Mifid and Priips confusion; FCA should simply instruct managers to stop providing misleading information
Chris Flood – FT
More questions will rightly be asked about the competency of financial regulators after the UK City watchdog last week said it had uncovered further evidence of problems with two landmark reform packages intended to improve standards across the European investment industry.
/jlne.ws/2VyG48D

Russia’s investment image suffers yet another blow; Michael Calvey is the latest in a line of businesspeople to be targeted
The editorial board – FT
The country’s richest man, its biggest foreign portfolio investor, and the boss of its biggest foreign direct investor — all have been jailed or driven out of Russia in the past 15 years. Now it is the turn of one of the largest foreign private equity investors. While many of his counterparts have left as Russia’s relations with the west have soured, Michael Calvey, founder of Baring Vostok, stayed. Today he is behind bars, facing trial on dubious fraud charges linked to a business dispute. Russia is yet again shooting itself in the foot when it comes to wooing investment. The Kremlin no longer seems to care.
/jlne.ws/2Vzs7Ho

The allure of financial tricks is fading; There are dozens of examples of companies making Faustian bargains to please Wall Street
Rana Foroohar – FT
It was only a matter of time before Apple issued a credit card. The world’s first company to reach a $1tn market value has more cash on hand and more global reach than most banks, so why shouldn’t it act like one? The move, which is in partnership with Goldman Sachs, is something that many of its shareholders have long advocated. Carl Icahn, who dumped the stock a few years ago over concerns about the company’s China sales, told me Apple should be a bank way back in 2013. But it is also an example of a market trend known as financialisation.
/jlne.ws/2VBhfJ1

Modern Monetary Theory could cause one big problem for financial markets
Gina Heeb – Markets Insider
You might be able to guess how markets would react if the government decided to just print more money to fund its projects.
Modern Monetary Theory seems to say countries that control their own currency don’t need to rely on taxes or borrowing in order to spend. The main concern among opponents, however, is that too much money in an economy causes hyperinflation.
/jlne.ws/2NKIoH2

Exchanges, OTC and Clearing

CME Group Averaged 19 Million Contracts Per Day in February 2019
Cme Group
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 19 million contracts in February 2019. This is up 7 percent from January 2019, but down from a record 27.3 million contracts per day in February 2018. Open interest (OI) at the end of February was 126 million contracts, up 3 percent from January 2019, but down 3 percent from February 2018.
/jlne.ws/2VzUTba

Higher demand for Equity Derivatives at Eurex
Eurex
In February, demand for European Equity Derivatives at Eurex went up 2 percent to reach 31.9 million, compared to 31.1 million in February 2018. Overall, trading volumes decreased by 17 percent. The number of traded contracts reached 142.1 million compared to 170.9 million in February 2018. The reason for this is mainly that that the figures in the reference month for 2018 were comparatively high due to a number of events and geopolitical risk in Europe and beyond. In the meantime, these risks have already been discounted by the market.
/jlne.ws/2VF7Pwt

DGCX to Launch Base Metals Product Suite
Emirates247
The Dubai Gold & Commodities Exchange (DGCX) and Dubai Commodities Clearing Corporation (DCCC) today announced an expansion to their existing portfolio of metals products with the launch of new base metal products. The two new products, Aluminium Futures and Zinc Futures, will go live on Friday 22nd March, 2019.
/goo.gl/qm1fnA

Fintech

Microsoft Excel will now let you snap a picture of a spreadsheet and import it
Tom Warren – The Verge
Microsoft is adding a very useful feature to its Excel mobile apps for iOS and Android. It allows Excel users to take a photo of a printed data table and convert it into a fully editable table in the app. This feature is rolling out initially in the Android Excel app, before making its way to iOS soon. Microsoft is using artificial intelligence to implement this feature, with image recognition so that Excel users don’t have to manually input hardcopy data. The feature will be available to Microsoft 365 users.
/jlne.ws/2TrLYLl

Are Millennial Financial Technology Apps Worth Using?
Molly McHugh – The Ringer
“Namaste Molly, your checking balance today is [redacted]. Yesterday it was [redacted]. Text ‘why’ to find out why it changed $10.75.” Most days, I get a friendly text just like this one—except sometimes it starts with “Aloha,” or “Good day.” Sometimes an emoji is included. These texts come from Digit, an app (offering a 30-day free trial; $2.99 per month thereafter) that squirrels away money from users into accounts they can cash out whenever. I have Digit funds like “emergency pet $$$,” “travel,” “rainy day,” “race fundraising,” and “dranks,” which the app encouraged me to use emoji for in the descriptions I wrote upon setup. When I feel like dipping into these cash reserves—the digital equivalent of hiding money in car consoles or under mattresses—I hit “withdraw” and wait for the funds to hit my bank account.
/jlne.ws/2TmoyqN

A-Team Group Names 2019 TradingTech Insight Europe Award Winners
PR.com
A-Team Group announced the winners of its acclaimed TradingTech Insight (TTI) Europe Awards during a celebratory drinks reception following its TradingTech Summit in London today.
The awards recognise excellence in trading solutions and services for capital markets and focus on vendors providing exceptional trading infrastructure, trading technology, and data solutions. There are also awards for consultancies dedicated to market data and trading technology, and a special industry award for fintech innovation sponsored by network, cloud and hosting provider BSO.
/jlne.ws/2NGPAUt

Cryptocurrencies

Regarding Facebook’s cryptocurrency
Jon Evans – Tech Crunch
If Bloomberg and the New York Times are to be believed, later this year Facebook will introduce a cryptocurrency which will allow WhatsApp users to send money instantly. Yes, that’s right: Facebook. Cryptocurrency. Earthquake! Revolution! The world is tilting on its axis! The end times are cometh! Except – um – what exactly are people going to do with FaceCoin, once they receive it?
/tcrn.ch/2XBZPy6

Regulator Circles Revolut Following Alleged Compliance Lapse
Jeremy Kahn and Silla Brush – Bloomberg
Company denies it failed to meet its control requirements; FCA has contacted the digital banking firm to investigate
Revolut Ltd., the fast-growing financial technology startup, is facing regulatory scrutiny following an alleged compliance lapse that could have allowed illegal transactions on its app.
/jlne.ws/2VzgG2p

Why Crypto Companies Still Can’t Open Checking Accounts; “‘Just go to your local Chase branch’ doesn’t work in crypto.”
Alastair Marsh and Silla Brush – Bloomberg
The gatekeepers of mainstream commerce are keeping their doors shut to cryptocurrency companies.
/jlne.ws/2VDoKiX

Cryptocurrency market update: Bloody Monday – Bitcoin, Ripple’s XRP and Ethereum bleed extensively
John Isige – FX Street
This is the second week in a row the crypto market is opening the trading on Monday in declines. Last week, Bitcoin was rejected from above $4,000 and tested the support at $3,700. Ethereum explored the levels below $140 following the drop while Ripple’s XRP plunged below $0.30 after testing the resistance at $0.35.
/bit.ly/2C2fayI

No.2 cryptocurrency Ethereum faces software ‘fork’; lower supply seen
Tom Wilson – Reuters
Ethereum, the world’s second biggest cryptocurrency, was set on Thursday for major software upgrades that traders and analysts predicted would significantly reduce its supply.
Ethereum is upgrading its network to cut the costs and complexity of interactions and communications on its blockchain.
/jlne.ws/2NGbIhH

Kraken Offers $100K Reward For Information on QuadrigaCX Case; The exchange says it wants to raise awareness about the ongoing investigation
David Kimberley – Finance Magnates
With conspiracy theories still abounding, cryptocurrency exchange Kraken has decided to wade into the murky waters surrounding the QuadrigaCX scandal. In a short email sent to clients, the cryptocurrency exchange said that it wants to bring more attention to the QuadrigaCX case. The exchange plans on doing that by paying $100,000 to anyone that provides it with information that will lead to the finding of $190 million in missing funds.
/bit.ly/2C2AofY

A New Exchange Launches, Letting Institutions Custody Their Own Crypto
Anna Baydakova – Coindesk
A new crypto exchange for institutional investors is launching this month with an unusual approach to custody. LGO Markets, based in New Jersey, officially launched Monday with limited functionality, allowing new users to set up and fund their accounts. However, spot trading in bitcoin will start on March 11. According to CEO Hugo Renaudin, the company has secured 10 institutional clients already – mostly over-the-counter (OTC) trading desks, plus several hedge funds, crypto businesses and market makers. Another 56 clients are in the process of onboarding, he said.
/bit.ly/2UfAuaN

What Coinbase Needs to Learn from the Neutrino Scandal
Michael J. Casey – Coindesk
If you want to test a cryptocurrency newcomer’s grasp of the design principles of permissionless record-keeping networks, tell them it wouldn’t matter to bitcoin if ISIS were running a node. The statement can provoke a look of alarm. But it helps to make the point that the security model behind bitcoin and other decentralized cryptocurrencies – the way they resolve the Byzantine General’s Problem – is independent of the question of who is participating in the network. ISIS’s intent, evil as it would no doubt be, is irrelevant if it has less than 50 percent control of the network.
/bit.ly/2Evk6wk

Ethereum Foundation Director Sets New Vision for Blockchain Non-Profit
Christine Kim – Coindesk
“When the Ethereum Foundation was founded, the Ethereum Foundation was ethereum. People in the Foundation were the ones that were building ethereum. Now, that’s not the case.” That’s Aya Miyaguchi, executive director of the Ethereum Foundation, the non-profit organization founded and dedicated to the continuing development of the world’s second-largest blockchain by total value.
/bit.ly/2IPo3RP

Crypto trading firm Circle is reportedly looking to raise $250M
The Block
Circle, the cryptocurrency trading firm, is reportedly seeking to raise an additional $250 million to run its business, according to a report by The Information’s Jon Victor. The firm, which runs an over-the-counter trading desk and a cryptocurrency exchange, has already raised over $240 million from investors including Goldman Sachs and IDG Capital.
/jlne.ws/2NFZ3LQ

Politics

Oil lobby group opposes carbon tax backed by biggest members; ‘Bad public policy’ measure despite support from BP, ExxonMobil and others
Gregory Meyer in Washington and Anjli Raval – FT
Proposals to tax greenhouse gas emissions have been attacked by the head of the US oil refinery trade group even though the idea has support from some of his largest member companies including BP and ExxonMobil.
/jlne.ws/2VBha8b

Mueller’s Final Report Will Ignite an Epic War Over Disclosure
Chris Strohm and Larry Liebert – Bloomberg
Attorney General Barr will decide how much to release and when; Democrats in Congress threaten to subpoena Mueller if needed
When Special Counsel Robert Mueller closes up shop and submits his long-awaited final report — possibly within days — it will be only the start of an explosive chain of events.
/jlne.ws/2Vy7jQL

Talented Democrats Are All Running for President. It’s a Problem.
Beto O’Rourke’s run for the White House could cost Democrats a Senate seat. That wouldn’t happen in other democracies.
Jonathan Bernstein – Bloomberg
New polls are showing that Democrats might have a real shot at defeating Texas Senator John Cornyn’s reelection bid next year. The problem? They basically have two appealing candidates for the seat – former Representative Beto O’Rourke and former San Antonio Mayor Julian Castro – and they’re both running for president.
/goo.gl/9PLQxT

President Trump Says the Dollar is Too Strong
Alyza Sebenius – Bloomberg
President Donald Trump said Saturday that the U.S. dollar is too strong and took a swipe at Federal Reserve Chairman Jerome Powell as someone who “likes raising interest rates.”
The dollar was quoted lower against the euro and the yen in early Asia-Pacific trading hours on Monday after Trump’s comments.
/jlne.ws/2NEepAv

Regulation

The Fall of ‘America’s Money Answers Man’
Ron LIeber – NY Times
Spin your radio dial, download a podcast or sit down at your next corporate gathering and you’ll have no trouble finding a self-styled financial guru to tell you what to do with your money.
What you may not know: Financial experts, even those with bulletproof credentials, may be trying to sell you something.
/jlne.ws/2TqWN0i

2019 FINRA Cybersecurity Half-Day Seminars
FINRA
FINRA’s Cybersecurity Half-Day Seminars provide attendees with information on the fundamentals of cybersecurity, help organizations understand vulnerabilities and threats related to cybersecurity, create resilience against cyber-attacks, and discuss effective practices for and handling issues related to cybersecurity.
/jlne.ws/2VyK5dd

FINRA Revises Indexed Amounts for Monetary Sanctions in the Sanction Guidelines
FINRA
FINRA has revised the Sanction Guidelines to reflect the effects of inflation, per a policy established in May 2015.
/jlne.ws/2VyKU5N

ESMA approves DTCC’s trade repository as Bloomberg withdraws registration; DTCC gained approval back in 2013, along with counterparts Regis-TR, UnaVista, CME and ICE.
John Brazier – The Trade
Europe’s market regulator has approved DTCC’s in Ireland as the post-trade provider plans its strategy for a potential no-deal Brexit.
/jlne.ws/2VzjbBP

Whistleblowing complaints to UK regulator rise 24%; FCA figures reveal how companies treat their customers is a major concern
Caroline Binham – FT
The number of whistleblowing complaints made to the UK’s financial regulator has soared, with concerns about how companies treat their customers making up a sizeable proportion, according to data.
/jlne.ws/2VBid8h

Successfully Transitioning from LIBOR to Alternative Risk-Free Rates
John Ahern – The National Law Review
On February 21, the UK Financial Conduct Authority (FCA) published a speech by Megan Butler, the executive director of supervision—Investment, Wholesale and Specialists at the FCA, on firms’ progress in transitioning from the London Interbank Offered Rate (LIBOR) to overnight risk-free rates (RFRs).
/jlne.ws/2NHrnNQ

Investing and Trading

A Trader’s Life
Jeffrey Carter – Points and Figures
Long blog post today because I have a lot to say on a subject. Thank you for being patient. Part of it is cathartic to write.
Unless you were on the floor, it’s almost impossible to describe what it was like. You can see the photos and videos but there is nothing like cramming yourself in between two people larger than yourself and sweating like you are running a marathon at 7:20am. Oh, and don’t forget, your cash is on the line. Not other people’s money. If you think email and text messages are distracting, try trading in a pit. Just the farts will distract you not to mention the noise, the constant conversation, and the stress.
/jlne.ws/2NGARcd

Investors Scale Back Inflation Bets, Signaling Doubts About Growth
Akane Otani – WSJ
Bets on a pickup in inflation are falling out of favor, underscoring investors’ skepticism that the U.S. economy will be able to turn stronger after a soft start to the year.
/jlne.ws/2NG0fic

Sleepy forex markets avoid usual volatility triggers; Macroeconomic news fails to budge key currencies
Katie Martin – FT
Major markets are stuck in a deep sleep. On the face of it, there is enough macroeconomic news around to move currencies and asset markets. News on the potential for a breakthrough in trade talks between the US and China gave Asian equities a kick higher, for example, at the start of last week.
/jlne.ws/2VBXr8B

Powell Trashed MMT, But Wall Street Sees Room for U.S. to Try It
Liz McCormick – Bloomberg
Big deficits aren’t a future scenario — they’re already here; Pain may come one day, but yields below 3% say not for a while
Talk to Wall Streeters about Modern Monetary Theory and they tell you Jerome Powell was right: The manifesto for free-spending governments is a terrible idea – – and if it’s ever implemented, America can expect a nightmarish financial future.
/jlne.ws/2VyHvUs

Bill Gross Sees ‘Much Less’ Alpha in Era of QE and Quant Trading
Erik Schatzker – Bloomberg
Odds of signifcantly beating benchmarks have plunged, he says; Bond legend reflects on his 48-year career in BTV interview
Think of it as a parting shot to anyone hoping to be the next king of bonds. Bill Gross, who defined his investing career by beating benchmarks, says the era of outperformance is largely over.
/jlne.ws/2Vy7LOX

9 Pot Stocks Currently Listed on the NYSE or Nasdaq — The Motley Fool
Sean Williams – Motley Fool
The marijuana industry is kicking tail and taking names through the first two months of 2019. The broad-based Horizons Marijuana Life Sciences ETF is up more than 50% year to date, and pot stocks have gathered plenty of momentum following Canada’s legalization of recreational weed in mid-October of last year.
/jlne.ws/2NIDYAu

Institutions

A merger, a sale, a break-up, a turnround: what next for DWS?; The IPO of the Deutsche Bank-owned group was bullish but only woe has followed
Siobhan Riding and Chris Flood – FT
Exactly one year ago, Frankfurt-based DWS was gearing up for a public listing billed as a transformative move for one of Europe’s biggest fund houses.
/jlne.ws/2VzicBD

Metro gaffe highlights banks’ flimsy risk arithmetic; Spurious calculations make a mockery of the rules on capital levels that they support
Patrick Jenkins – FT
Metro Bank, once the darling of Britain’s challenger lenders, has lost half its stock market value over the past six weeks or so. There has been no nasty loan loss, no vast money laundering scandal and no funding squeeze to rival the nightmares visited on other troubled banks.
/jlne.ws/2VwOLAd

Barclays Investors Would’ve Gone `Nuts’ About Secret Qatar Fees
Franz Wild – Bloomberg
Boath told Jenkins to ‘hang on, Roger’ when discussing fees; Boath, Jenkins and two other former bankers on trial in London
A former Barclays Plc official told investigators that he thought secret payments made to get Qatar to bail out the bank at the height of the 2008 financial crisis would have made other investors go “completely nuts.”
/jlne.ws/2Vy824r

Swiss National Bank made 2.05 bln Sfr from negative interest in 2018
Reuters
The Swiss National Bank made 2.05 billion Swiss francs ($2.05 billion) from negative interest rates during 2018, the central bank said on Monday, one of the measures it uses to curb demand for the safe-haven Swiss franc.
/jlne.ws/2EO3f9D

Banks suffer IT failures at a rate of ‘one a day’ amid warnings over switch away from real money
Sean Poulter – Daily Mail Online
Banks are suffering IT failures at the rate of one a day, threatening access to cash and blocking essential purchases for groceries and transport.
Customers were prevented from making payments on 302 occasions in the last nine months of last year, consumer experts Which? said.
/jlne.ws/2EMnm7Z

Wanted: old bank chief for merger
Robert Armstrong – Financial Times
Last month’s $66bn tie-up between US regional banks BB&T and SunTrust caught industry observers by surprise. Billed as a “merger of equals”, it gave shareholders in the smaller lender, SunTrust, little or no premium for their shares — so how did the deal get done?
A crucial factor, according to bankers and analysts, was that one of the chief executives, Kelly King of BB&T, is old.
/jlne.ws/2NHNAv3

The Problem for Small-Town Banks: People Want High-Tech Services
Rachel Louise Ensign and Coulter Jones – WSJ
After the National Bank of Delaware County, a small community bank, bought Bank of America Corp.’s only branch in an upstate New York town, it didn’t take long for things to go south.
/jlne.ws/2NIkJa3

Regions

This is what 500 years of globalization looks like
Adam Shirley – World Economic Forum
The iPhone is designed in California, built in China and exported to consumers across the globe. The rise of smartphones and the impact they are having on developing economies is just one example of globalization in the modern world.
/jlne.ws/2Tns0Br

World’s Hottest Stock Market Is About to See $46 Billion Pour In
Rachel Evans and Rebecca Choong Wilkins – Bloomberg
There’s some serious money heading to Chinese stocks, already the world’s best performing equity market this year.
After MSCI Inc. announced Thursday that it would boost the weighting of China’s onshore shares in its emerging market index, more than $46 billion is poised to pour in from funds that track the gauge, according to Bloomberg estimates. Chinese equities climbed to the highest since June on Friday, leaving them up 20 percent this year after gains spurred by speculation the government will take steps to bolster the economy.
/jlne.ws/2NIaOkL

A Global Tour of Crude Oil: Which Countries Matter Most?
Bob Iaccino – CME Group OpenMarkets
According to Merriam-Webster, the word “geopolitics” can mean: a combination of political and geographic factors relating to something (such as a state or particular resources) as in “the geopolitics of oil”. Since the political factors sit within the geographic areas, a global tour of countries that affect oil prices is a good use of time. Let’s take the most important, one at a time:
/jlne.ws/2TuzO4e

This Is How The Canadian Cannabis Market Is Working Out So Far
Tracy Alloway and Joe Weisenthal – Bloomberg
Every week, hosts Joe Weisenthal and Tracy Alloway take you on a not-so-random walk through hot topics in markets, finance and economics. In mid-October last year, recreational cannabis became legal in Canada. Of course, there are all kinds of complications with any attempt to introduce such a new market. On this week’s episode, we speak to Craig Wiggins, a member of a trio of analysts known as the Cannalysts, who have become the top experts in the space, about how the market has evolved in the early months.
/jlne.ws/2Vzzv5K

Why Billions of Barrels of Oil Go Untapped in Brazil
Peter Millard – Bloomberg
There’s enough as-yet-unassigned oil under the Atlantic Ocean off Brazil’s Rio de Janeiro to keep the entire world running for almost six months. So why is the crude just sitting there? A contract dispute between oil giant Petrobras and the government has been dragging on since 2013, and until it’s resolved, drillers can’t start targeting those deep-water deposits
/jlne.ws/2VBfITh

Africa’s Richest Man Makes a $17 Billion Bid for Immortality; Aliko Dangote’s plan to reduce Nigeria’s dependency on fuel imports will carve out an even bigger slice of the nation’s $376 billion economy for his empire.
Tom Metcalf, Devon Pendleton – Bloomberg
The best way to appreciate the scale of Aliko Dangote’s empire is to hitch a ride on one of his private jets. A half-hour after his Bombardier Challenger 605 takes off from Lagos Airport, it descends into a seemingly desolate area of Kogi State in central Nigeria, dusty fields and clusters of trees stretching to the horizon. Suddenly a tangle of exhaust stacks, silos, and kilns pierces the sky to the left of the aircraft as Dangote Cement Plc’s Obajana plant comes into view. It’s already the biggest in Africa, churning out enough sacks of cement to fill 1,000 trucks a day. A fifth production line now under construction will make it one of the world’s largest.
/jlne.ws/2VAEOSe

China fund managers rush to capitalize on Shanghai’s new tech board
Samuel Shen and John Ruwitch – Reuters
Chinese asset managers are rushing to set up funds targeting Shanghai’s upcoming Nasdaq-style technology board, in a race likely to fuel concern that China’s speculative trading culture could lead to more price bubbles.
/jlne.ws/2EKdUSH

Most Powerful Banker in Nordics Says Cutting Humans Reduces Risk
Kati Pohjanpalo – Bloomberg
The man running the biggest Nordic bank says that reducing the number of humans working in finance will actually help cut some of the risks in the industry.
Casper von Koskull, the chief executive officer of Nordea Bank Abp, predicts that in roughly a decade, his sector will have half as many people working in it as it does now. And that’s a good thing, he said.
/jlne.ws/2NI8z0P

Sebi allows MFs, PMSes to invest in commodity derivatives
Ami Shah – Economic Times
The Securities and Exchange Board of India (Sebi) on Friday allowed mutual funds and portfolio managers to invest in commodity derivatives, a move that would boost the commodities market.
“The Board deliberated and approved the proposal contained in the memorandum to enable participation by mutual funds and portfolio managers in exchange traded commodity derivatives in India subject to certain safeguards,” Sebi said in a release after its board meeting in New Delhi.
/jlne.ws/2NGP3BX

SEBI assures of all steps to deepen commodity derivatives market; Education and awareness key to promote participation: S K Mohanty, Whole Time Member, SEBI| APN News
Sachin Murdeshwar – AP News
Mr S.K. Mohanty, Whole Time Member, SEBI, has held out the assurance that SEBI will take all necessary steps for deepening of the commodity derivatives market. Of the 3Ps required to build any market – Policy, Product and Participants – the first two were already in place and the eco-system should ensure education and awareness to promote participation.
/jlne.ws/2NO3VyF

Brexit

EU gives investors in Irish assets the all-clear in hard Brexit; European authority approves customers to use central securities depository
Philip Stafford – FT
European regulators have stepped up preparations for the risk that the UK leaves the EU abruptly at the end of the month, issuing a licence to ensure that investors in Irish markets can continue to settle trades in London.
/jlne.ws/2VDq0CH

No-deal Brexit: City analysts see chances of hard exit falling
Will Martin – Business Insider
Analysts and economists in the City of London are starting to virtually rule out the prospect of the UK leaving the European Union without a deal after a week in which two crucial developments in British politics seemingly lessened the likelihood of no deal.
This week, analysts JPMorgan and Pantheon Macroeconomics both affirmed their belief that the chance of a no deal Brexit is around 10-15%, while Capital Economics said it believes the chances of no deal is “receding.”
/jlne.ws/2NGaHpT

Attorney-general seeks revised Brexit deal to avoid permanent backstop
George Parker – FT
Geoffrey Cox, attorney-general, remains determined to secure a revised Brexit deal that stops Britain being “trapped” in a customs union, according to a senior minister.
/jlne.ws/2Vus7s8

How would a no-deal Brexit affect the UK economy?; Key sectors likely to be hit include ports, food products and services
Chris Giles and Delphine Strauss – FT
Britain’s big decision on a no-deal Brexit is looming this month. But there is no consensus on how leaving the EU without an agreement would affect the economy — or even on what no deal really means.
/jlne.ws/2VG2yEX

Here’s What British People Would Eat in a Worst-Case Brexit; If trade routes really were to shut down, a hypothetical U.K. diet would leave a lot to be desired.
Megan Durisin, Arne Quinn, Rob Dawson- Bloomberg
No more avocado toast or banana smoothies, and forget about shaving fresh Parmesan on your pasta. Instead, get used to milk at every meal, bread for days, lamb chops, and peas. Lots and lots of peas.
/jlne.ws/2VCJKGx

Brexit bribe? PM May unveils £1.6 billion fund for Brexit-backing towns
Kylie MacLellan, David Evans, David Goodman and Guy Faulconbridge – Reuters
British Prime Minister Theresa May will on Monday set out plans for a 1.6 billion pound fund to help to boost economic growth in Brexit-supporting communities with ministers denying it was a bribe to win support for her EU exit deal.
/reut.rs/2SG4DP1

Brexit: Theresa May responds to Irish American concerns
Jayne McCormack – BBC News
Theresa May has written to a committee of senior Irish-American leaders, who have expressed concerns about Brexit and protecting the Good Friday Agreement (GFA). The former members of congress contacted the prime minister and Taoiseach (Irish prime minister) Leo Varadkar last month. The 40-strong committee said it was clear some British politicians had “little knowledge” of the importance of the agreement. The peace deal signed in 1998.
/bbc.in/2NFzYR2

Miscellaneous

Daily Mail Owner to Spin Off Euromoney Stake to Shareholders
James Ludden and Thomas Seal – Bloomberg
Move increases Lord Rothermere’s exposure to media group; CEO Zwillenberg has sold assets to narrow the company’s focus
The owner of Britain’s Daily Mail newspaper will distribute its stake in the publisher of Euromoney magazine to shareholders in a move that will tie the fortunes of Chairman Lord Rothermere closer to the company.
/jlne.ws/2VyYeHd

How Not to Fall for Viral Scares
Emily Dreyfuss – Wired
Who knows what the kids are doing online, right? They’ve got their TikToks and their Snapchats and their flop Instagram accounts, while parents are still posting on Facebook and Twitter. The disconnect between how the olds and their children use the internet leads to parental anxiety, and in the case of this week’s resurfacing of the viral fake Momo challenge, panic and misinformation.
/bit.ly/2EFZfru

***An aspect of the “Momo” scare not mentioned in the article is that the disturbing image purported to be “Momo” was somehow surreptitiously edited into the middle of children’s YouTube videos. There are currently no confirmed deaths or reports of self-harm linked to the “Momo Challenge.”~MR

‘Billions’ ripped off hedge fund performance coach: suit
Dana Schuster – New York Post
The tagline for season four of “Billions,” out March 17, is, “Leave them with nothing.”
Mission accomplished, says Denise Shull. “They’ve left me with nothing and then went out of their way to make me look bad for telling the truth,” said Shull, a NYC-based performance coach for hedge funds.
/jlne.ws/2NHMEqx

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