• Bakkt’s New Acquisition to Speed Plan to Streamline Consumer Payments; Turning S&P 500 Into One Gigantic Company

    Jan 15, 2019

    First Read

    “Not Your Keys, Not Your Bitcoin”
    Thom Thompson, John Lothian News

    Much of the cryptocurrency world spent January 3 – the tenth anniversary of the mining of the genesis block of bitcoin by Satoshi Nakamoto – pondering the wonders of bitcoin. At the same time, a number of hodlers [sic] were responding to the call of the industry’s first ever “Proof of Keys” celebration by harrying bitcoin exchanges into turning over to them the bitcoins that they were holding. (The key is what you need to transact bitcoin that you own.) Why would hodlers do that? As Andreas Antonopoulos, a well-known bitcoin security expert, warns, “Your keys, your bitcoin. Not your keys, not your bitcoin.”

    In a December YouTube video, Trace Mayer, a prominent “hodler of last resort,” called on the bitcoin community to embrace a “new cultural tradition” that he calls “Proof of Keys” by withdrawing all of their bitcoins from exchanges and other third parties and storing the keys in wallets that they own and control. Mayer said the community should “declare and re-declare our monetary sovereignty” on January 3 every year. Mayer, however, does not let this sententiousness cloud his otherwise straightforward discussion of how important it is to control your own bitcoin holdings. “It is either on the blockchain or it didn’t happen,” as Mayer notes.

    To read the rest of this story, go here.

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    Hits & Takes
    JLN Staff

    A big thank you to the CME Group for renewing their sponsorship to MarketsWiki and subscription to JLN. And also to 3 Points Communications for renewing their Friend Level Marketswiki sponsorship. We appreciate friends large and small.~JJL

    The Cboe had a suspected theft of some computer servers and have terminated an employee as a result. My experience says that to report something like this, the total value must have been significant, at least over $100,000.~JJL

    I am confused somewhat by the Bakkt/RCG deal, with Bakkt acquiring assets of RCG’s back office. I would have to say the biggest value would be the people Bakkt is acquiring, as most of the software RCG used in the back office was probably from vendors. There may be some good vendor contracts to acquire, though. RCG is known for well trained industry professionals. In fact, back in the robust trading floor days many firms would hire Rosenthal employees away because they were well trained. And then there was the saying that when you worked for Rosenthal, you worked for Les. Or less, I guess.~JJL

    Seven of the world’s 10 busiest ports are located in China ó in 2006 only three of the top 10 were in China. Of the world’s top 50 container ports, China accounts for 40 percent of the volume. For more information see this Visual Capitalist infographic.~SD

    Here’s an example of 15th century arbitrage from William Bernstein’s “A Splendid Exchange: How Trade Shaped the World”: “Portuguese agents, while unaware of the ultimate source of African gold in present-day Mali and in the upper reaches of the Niger and Volta rivers, penetrated far inland to trading towns such as the fabled Timbuktu, where they purchased gold cheaply for transport downriver to waiting caravels.” ~SD

    It has been 16 years since John J. Lothian & Company, Inc. was incorporated and it started charging for the John Lothian Newsletter. We ask you to pay for a yearly subscription if you find the newsletter valuable to you. If you read it regularly, then we think you find it valuable. If you continue to read it year after year, we think you find it valuable. If you have multiple subscribers at your firm, we think you find it valuable. If you forward the newsletter to others, we think you find it valuable. There are many ways this newsletter can be valuable to you. We ask you share some of that value back with us in the form of a paid subscription. You can see the payment options on the John Lothian News website.~JJL

    Thank you to all the readers who have paid for their 2019 JLN subscriptions so far.~JJL

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    Consider Firing Your Male Broker; Years of research show female investors outperform men. But only about 1 in 5 brokers are women.
    Blair duQuesnay – NY Times
    When people picture a financial adviser, they typically think of a gray-haired guy who looks like Bernie Madoff, or perhaps a younger man like Leonardo DiCaprio’s character in “The Wolf of Wall Street.” The imagined portrait rarely resembles someone like me, a woman. And that underlying perception is fairly accurate.
    /nyti.ms/2VW2YaP

    **** As a former male broker, I can only say “@#$%^&U*&!!”~JJL

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    Monday’s Top Three
    It was a heavy day for news yesterday with top stories on mac and cheese, dress codes and an outage on BrokerTec Friday. The weightiest story was CNBC’s Costco and Amazon selling tub of mac-and-cheese that lasts 20 years. It weighs 27 pounds. Second was Marketwatch’s Wall Street bankers grapple with the end of the corporate dress code. Third was Marketwatch’s short piece on Brokertec, in Outage on electronic-trading platform stalls bond market. Now, on to less important things…

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    CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

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    Lead Stories

    Bakkt’s New Acquisition Will Speed Its Plan to Streamline Consumer Payments
    Shawn Tully – Fortune
    Bakkt aims to make Bitcoin trading safe for Wall Street. Now, a new acquisition confirms that the cryptocurrency trading company is speeding its plans to revolutionize the way people pay for everything from coffee to cars. On Monday Bakkt, which was launched by the owner of the New York Stock Exchange, announced the acquisition of assets owned by Rosenthal Collins Group, a century-old futures commissions merchant.
    bit.ly/2TJF28W

    ****Kelly Loeffler’s Medium post on the RCG deal can be found here.~SD

    OCC selects clearing system from Nasdaq-owned Cinnober
    Cinnober
    Cinnober, a global provider of exchange and clearing technology solutions acquired by Nasdaq, today announces that OCC will replace its legacy clearing system with a system that employs Cinnober’s TRADExpress RealTime Clearing.
    /cisn.co/2Da6IOQ

    Index-Crazed Investors Turning S&P 500 Into One Gigantic Company
    Luke Kawa – Bloomberg
    Study says firms increasingly incentivized to not compete; The trend predates rise of BlackRock, Vanguard, State Street
    The rise of indexing mutual funds and other diversified investors is increasing the temptation for public companies to act in the interests of their rivals, a trio of professors say.
    /bloom.bg/2VNcJYW

    Cracks are opening in the global monetary system; Central bankers have bought growth by sacrificing financial stability
    Russell Napier – FT
    While many investors are fretting over what stage of the business cycle we are in, the global monetary system is collapsing ó with a whimper initially, but ultimately a bang. The whimper is causing losses for equity investors. The bang will impact global asset prices as much as the end of the Bretton-Woods system or the end of the gold standard.
    /on.ft.com/2VSaCDb

    Citi Says Don’t Trade the Pound Today Because Huge Swings Possible
    Ruth Carson – Bloomberg
    Expected defeat for May in Brexit vote to boost volatility; Moves of 10% or more in either direction could occur: Bailin
    Citigroup Inc.’s private-banking arm is advising its high-net-worth clients to stop trading the pound, at least for today. The cause: the looming Brexit vote that is likely to see sterling’s volatility skyrocket and could seal the fate of U.K. Prime Minister Theresa May.
    /bloom.bg/2VUXhKr

    Theresa May at risk of humiliating Brexit defeat in key vote; Parliamentary chaos looms as PM’s plea for Eurosceptic backing looks doomed
    George Parker, Laura Hughes and Mehreen Khan – FT
    Theresa May’s last-ditch attempt to shore up her Brexit deal appeared doomed, as Conservative Eurosceptic MPs threatened to humiliate the UK prime minister and plunge Britain’s future relationship with Europe into doubt.
    /on.ft.com/2W2phMm

    May’s Brexit Deal Faces Likely Defeat as Deadline Nears; Vote is expected to leave U.K.’s prime minister in political turmoil 10 weeks before scheduled departure
    Jason Douglas and Laurence Norman- WSJ
    British Prime Minister Theresa May faces a likely heavy defeat in a vote Tuesday on her plan to leave the European Union, setting the stage for further political turmoil that will test the U.K.’s historically stable political institutions and arcane constitution.
    /on.wsj.com/2VUVEwj

    Canadian financial watchdog cracks down on the largest crypto exchange
    Frank Chaparro – The Block Crypto
    BitMEX, one of the most active trading platforms for bitcoin, is shying away from North American markets for crypto, a recent report says.
    bit.ly/2QOJ0eH

    Banks struggle to break up trading floor boys’ club; An image problem, the difficulty of making work flexible and the rise of quant trading are making the gender diversity quest an uphill battle
    Becky Pritchard and Samuel Agini – Financial News
    Around five years ago Becci McKinley-Rowe, head of UK equity sales at Morgan Stanley, spoke to a group of 18-year-old women at a careers event who told her that they would never pick trading as a career. Instead they wanted to go into law or management consulting.
    bit.ly/2QScatr

    UPDATED: Euronext faces competition for Oslo Bors as potential buyers emerge; Oslo Bors said today that its board of directors has met with other potential buyers after receiving interest from parties other than Euronext.
    Hayley McDowell – The Trade
    Norwegian stock exchange operator Oslo Bors has said that its board of directors has met with potential buyers after inviting bids to compete with Euronext’s EUR625 million offer last week.
    bit.ly/2FvI90v

    Tradeweb gains approval for Amsterdam Brexit base; Dutch Authority for the Financial Markets grants authorisation for Tradeweb’s Amsterdam entity ahead of Brexit.
    Hayley McDowell – The Trade
    Electronic trading specialist Tradeweb has received regulatory approval to establish a European base in Amsterdam in preparation for Brexit.
    bit.ly/2VTwjTr

    Advice from one female portfolio manager to others; The psycho-cultural barriers women face are hard to overcome because they are not obvious
    Ellen Carr – FT
    When #MeToo started trending in 2017, after a string of sexual misconduct allegations were made against the Hollywood mogul, Harvey Weinstein, my non-finance friends were surprised that I didn’t tweet my own examples of harassment. “But I thought Wall Street was full of Harvey Weinsteins!” said one.
    /on.ft.com/2W2qTpo

    JPMorgan Debt-Trading Revenue Plunges to Lowest Since the Crisis
    Michelle Davis – Bloomberg
    Fixed-income results slide 18% in volatile fourth quarter; Loan-loss provisions climb more than analysts expected
    JPMorgan Chase & Co.’s bond traders just suffered their worst quarter in a decade. Revenue from fixed-income trading, typically the biggest contributor to the company’s markets business, plunged 18 percent in the fourth quarter to the worst since the depths of the financial crisis as wild markets kept clients on the sidelines. The drop offset an increase in equity-trading revenue and advisory fees, contributing to the worst quarter for the corporate and investment bank in three years.
    /bloom.bg/2VQQ26p

    Boss Fired for Reprisal Against Female Analyst Wins $1.8 Million
    Gaspard Sebag – Bloomberg
    Managing director fired by Moody’s in 2015 also wins job back; Paris court says reprisal is partly contradicted by testimony
    A Moody’s Corp. managing director fired for lashing out at a junior co-worker who criticized his team’s work won his Paris job back and a 1.6 million-euro ($1.8 million) payout.
    /bloom.bg/2VTQctx

    Dressing for Deals, Wall Street Bankers Face Fashion Pitfalls; As traditional corporate dress codes fall away, style mistakes have potential to cost business.
    Telis Demos and Ray A. Smith – WSJ
    Wall Street, the last bastion of traditional corporate dress code, has been loosening its tieóand in some cases, getting rid of it completelyóas male bankers increasingly take their sartorial cues from clients.
    /on.wsj.com/2VTh2ls

    How Much Value Was Destroyed by the Lehman Bankruptcy?
    Erin Denison, Michael Fleming, and Asani Sarkar – NY Federal Reserve
    Lehman Brothers Holdings Inc. (LBHI) filed for Chapter 11 bankruptcy protection on September 15, 2008, initiating one of the largest and most complex bankruptcy proceedings in history. Recovery prospects for creditors, who submitted about $1.2 trillion of claims against the Lehman estate, were quite bleak. This week, we will publish a series of four posts that provide an assessment of the value lost to Lehman, its creditors, and other stakeholders now that the bankruptcy proceedings are winding down. Where appropriate, we also consider the liquidation of Lehman’s investment banking affiliate, which occurred in separate proceedings under the Securities Investor Protection Act (SIPA).
    /nyfed.org/2VUgJqJ

    Exchanges, OTC and Clearing

    OCC Launches Renaissance Initiative to Modernize Technology Infrastructure
    OCC
    To better serve its stakeholders and the users of the U.S. equity options and futures markets, OCC, the world’s largest equity derivatives clearing organization, today announced the Renaissance Initiative, a multi-year investment to comprehensively redevelop and modernize the company’s risk management, clearing and data systems.
    /goo.gl/s5gKNo

    CME plans to launch e-auction for U.S. crude oil exports
    Florence Tan – Reuters
    CME Group said on Tuesday it plans to launch an electronic auction platform with U.S. energy firm Enterprise Products Partners LP in March to sell U.S. spot crude oil export cargoes.
    /reut.rs/2QOSbf1

    CME Group Achieves Asia Pacific Average Daily Volume of 921,000 Contracts in Q4 2018, Up 45 Percent from Q4 2017
    CME Group
    CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved Asia Pacific average daily volume (ADV) of 921,000 contracts in the fourth quarter of 2018, up 45 percent from the corresponding period in 2017. This was driven largely by a strong performance in Equity products, up 201 percent. Interest Rates and Energy products were up 42 percent and 35 percent respectively.
    bit.ly/2QNba9K

    TriOptima Sets New triReduce Record: $250 Trillion Gross Notional Value Compressed at LCH SwapClear During 2018
    CME Group
    TriOptima, the leading multilateral compression provider that lowers costs and mitigates risk in OTC markets, today announced that it has set a new record for its triReduce portfolio compression service. In 2018, TriOptima compressed $250 trillion gross notional value of trades at LCH SwapClear, an annual increase of 31%.
    bit.ly/2QPzS9v

    Matthias Graulich: Euro clearing post-Brexit
    Eurex
    In a DerivSource webinar held in November 2018 with Eurex Clearing, a panel explored how this CCP clearing environment in Europe may evolve post-Brexit and the challenges various different relocation scenarios may pose from an operational, regulatory and legal perspective. In this feature, Matthias Graulich, Chief Strategy Officer, Member of the Executive Board, Eurex Clearing, addresses some of the audience questions relating to the changes to organizational and technical procedures, possible costs and opportunities through change. If you missed the webinar, you can watch the recording of the webinar “Euro Clearing Post-Brexit – Are You Ready” here.
    bit.ly/2VTxvGp

    Ashok Chawla resigns as chairman of NSE
    Reena Zachariah – ET Bureau
    Ashok Chawla resigned as the chairman of the National Stock Exchange(NSE) in light of the recent legal developments, the bourse said in a release on Friday evening. The Central Bureau of Investigation(CBI) on Friday informed a special CBI court that it has got sanction from the government to prosecute five people–current and former bureaucrats– in the Aircel-Maxis case including Chawla.
    /goo.gl/1FMEa1

    Fintech

    The Super-Secure Quantum Cable Hiding in the Holland Tunnel; Banks and governments are testing quantum key distribution technology to guard their closest secrets.
    Jeremy Kahn – Bloomberg
    Commuters inching through rush-hour traffic in the Holland Tunnel between Lower Manhattan and New Jersey don’t know it, but a technology likely to be the future of communication is being tested right outside their car windows. Running through the tunnel is a fiber-optic cable that harnesses the power of quantum mechanics to protect critical banking data from potential spies.
    /goo.gl/5NYhfe

    TD Ameritrade taps Apple Pay for instant fund transfers to accounts
    Stephen Nellis – Reuters
    Brokerage firm TD Ameritrade Holding Corp is tapping Apple Inc to help solve a problem that has lingered for decades: how to get money into a brokerage account and make it available to trade with on the same day.
    /yhoo.it/2QP3CDw

    Charles River long-serving CFO departs following State Street acquisition; David Weber joins AxiomSL as chief financial officer and chief operating officer after serving as Charles River’s CFO since 2006.
    Hayley McDowell – The Trade
    Charles River Development’s chief financial officer has departed the firm after serving in the role for more than a decade following its acquisition by State Street late last year.
    bit.ly/2VW0lG0

    LiquidityBook Completes Banner Year with Continued Surge in Client Wins, Platform Growth
    LiquidityBook
    LiquidityBook, a leading Software-as-a-Service (SaaS)-based provider of buy- and sell-side trading solutions, today announced that 2018 was a record year across multiple sales and client growth metrics tracked by the firm. This rapid growth was fueled by a continued rise in demand for its industry-leading POEMS (portfolio, order and execution management system) platform, which provides significant cost, management and functionality benefits versus the legacy platforms many investment managers currently employ.
    /goo.gl/tF9K7G

    How artificial intelligence is fighting financial crime
    By Soumik Roy – Asia Correspondent
    WITH cross-border communications soaring and digital transactions becoming more rampant, fighting money laundering has become more complicated than it previously was.
    bit.ly/2QQs1Zs

    Cryptocurrencies

    HSBC settles FX deals worth $250 billion on blockchain in last year
    Tom Wilson – Reuters
    HSBC has settled $250 billion (£194.15 billion) worth of forex trades using blockchain in the last year, it said on Monday, suggesting the heavily hyped technology is gaining traction in a sector until now hesitant to embrace it.
    /goo.gl/4hNy4u

    ****Financial Times version here

    Fee Spike on Ethereum Classic Raises Fears of More Exchange Attacks
    Christine Kim – Coindesk
    A sudden surge in transaction fees on the ethereum classic blockchain has some developers speculating whether cryptocurrency exchanges could be at risk of attack, a development that follows last week’s 51% attack in which more than $200,000 was stolen from at least one exchange.
    bit.ly/2VUg5JP

    LedgerX rolls out LXVX, a volatility index for bitcoin price swings
    Frank Chaparro – The Block Crypto
    LedgerX, the cryptocurrency firm behind one of the derivative markets for bitcoin in the U.S., announced a new index to track bitcoin’s wild price swings, CEO Paul Chou told The Block in an interview.
    bit.ly/2VVYhOg

    New Zealand Crypto Exchange Cryptopia Goes Offline Citing Hack
    Yogita Khatri – Coindesk
    New Zealand-based cryptocurrency exchange Cryptopia has gone offline citing a major hack. The exchange announced the news on Twitter this morning, stating that it “suffered a security breach which resulted in significant losses.”
    bit.ly/2QPWUNs

    Politics

    Erdogan ‘saddened’ by Trump threat to ‘devastate’ Turkish economy; Turkish president discussed possible safe zone for Kurds in phone call with president Trump
    Laura Pitel – FT
    Turkish president Recep Tayyip Erdogan said he discussed the idea of setting up a 20-mile safe zone in northern Syria during a “positive” phone call with Donald Trump on Tuesday.
    /on.ft.com/2VWXVab

    In a Month You’ll Wish the Shutdown Were Only as Bad as Today
    Christopher Flavelle, Jennifer A Dlouhy and Ryan Beene – Bloomberg
    No IPOs. Court cases delayed. Transit services shut down; ‘Shutdowns don’t get bad linearly. They get bad exponentially’
    Airport security screeners could quit en masse, grounding flights. The federal courts could stop hearing civil cases. City buses could stop running.
    /bloom.bg/2W2npmO

    It’s Time for T.S.A. Workers to Strike; The shutdown is painful, but it is also an opportunity for labor to take a stand.
    Barbara Ehrenreich and Gary Stevenson – NY Times
    Last week, in a meeting with Democratic leaders, President Trump called the government shutdown a “strike.” This was an enigmatic use of a hallowed term, although it might have simply been Mr. Trump’s confusion about the “blue flu” epidemic afflicting employees of the Transportation Security Administration, who are working without pay and registering their protest by calling in sick, and in some cases quitting outright.
    /nyti.ms/2VUWsRR

    Dimon: ‘We urge our country’s leaders to strike a collaborative, constructive tone’
    Julia La Roche – Yahoo Finance
    JPMorgan Chase (JPM) CEO Jamie Dimon called for more collaboration between political leaders in Washington, D.C. and the business community.
    /yhoo.it/2QQFDnt

    US companies fear fallout from government shutdown; Product approvals and import licenses among casualties of Washington stand-off
    Kiran Stacey and Andrew Edgecliffe-Johnson – FT
    US companies are struggling to get decisions on everything from licences to new regulations, as business groups warn that the longest government shutdown in US history will soon start taking a toll on profits.
    /on.ft.com/2QQL0To

    Regulation

    US Supreme Court weighs shareholders’ M&A legal battles; Decision will shape judiciary’s future view of investors’ dealmaking complaints
    Sujeet Indap – FT
    Plaintiffs’ lawyers are a resilient bunch. Dealmakers exhaled in 2015 when Delaware courts effectively ended the practice of ragtag lawyers suing on every takeover deal in the state where most US companies are incorporated.
    /on.ft.com/2VWSzvU

    U.S. Now Says All Online Gambling Illegal, Not Just Sports Bets
    Edvard Pettersson – Bloomberg
    The U.S. Justice Department now says federal law bars all internet gambling, reversing its position from 2011 that only sports betting is prohibited under a law passed 50 years earlier.
    /bloom.bg/2QQqSB8

    Investing and Trading

    Bigger Gold Companies Still Aren’t Glitterati; Heftier companies aren’t likely to solve the industry’s fundamental problems
    Nathaniel Taplin – WSJ
    Gold bugs have had a tough few years, but recent developments are getting them buzzing again. On Monday, Newmont Mining agreed to acquire Canadian rival Goldcorp for $10 billion in stock, creating the world’s largest gold miner. The tie-up comes just a few months after Barrick Gold’s merger with Randgoldócreating what will now be the world’s No. 2 miner. Bigger companies with more market power make sense in a fragmented industry where margins have been under pressure for years. And rebounding inflation in the U.S.ówhich usually helps gold pricesócould also help boost shares.
    /on.wsj.com/2VQQBNz

    Doing a Buffett? Bet on S&P 500 causes flap on options market
    Saqib Iqbal Ahmed – Reuters
    An anonymous trader caused a stir in the U.S. equity options market on Monday with a massive bet that recalled Warren Buffett’s famous wager on global stocks more than a decade ago.
    The trader sold 19,000 put options on the S&P 500 Index .SPX obligating him or her to buy the market benchmark at 2,100 on Dec. 18, 2020, data from New York-based options analytics firm Trade alert showed.
    /goo.gl/1Yfwmr

    ESG Investing and the Rise of the Single Company ESG Rating: The Good, the Bad and Where We (Might) Go from Here
    David Merrill, TechCXO – Tabb Forum
    There is no longer any doubt that ESG investing is a major force, with estimates now exceeding $20 trillion. The days of negative screening and excluding “sin stocks” or oil and gas companies are long past. ESG integration is now a major focus of Wall Street and with it, real progress and some warranted skepticism.
    /goo.gl/dVLqEM

    A $1.8 Trillion Investor Says U.S. Stock Rally Has Years to Run
    Tom Redmond and Abhishek Vishnoi – Bloomberg
    Capital Group says late stage of cycle lasts up to three years; Money manager sees earnings growth continuing in 2019 and 2020
    The record bull market in U.S. equities may still have several years to run, according to one of the world’s biggest investors.
    /bloom.bg/2VW9aQ9

    Warning to Investors: Powell Is No Greenspan; Despite the similarities in the setup, Jerome Powell’s Federal Reserve will be less accommodative than Alan Greenspan’s was in 1999 following a spell of slowdown worries
    Justin Lahart – WSJ
    The 2019 playbook for the stock market is looking a bit like the playbook from 1999. This time, though, the Federal Reserve might not cooperate.
    /on.wsj.com/2QNfaqM

    Stock-Pickers Don’t Know How to Sell; They actually do OK figuring out what to buy. But they need to do a better job unloading stuff.
    Barry Ritholtz – Bloomberg
    Money managers know how to buy. What they need to do is to learn how to sell. Most of them are terrible at it.
    /bloom.bg/2QOAPij

    Record year for passive funds as active fund outflows continue; The number of ETFs almost doubled in 2018
    Kate Beioley – FT
    Last year was a rocky one for stock markets and new investment trusts but a record year for passive funds, with more exchange traded funds (ETFs) listed on the London Stock Exchange in 2018 than in any previous year.
    /on.ft.com/2QQqKBm

    Institutions

    Citigroup Swings to Profit Despite Trading Weakness; New York bank’s trading revenue tumbles 14% under tough market conditions in the fourth quarter
    Telis Demos – WSJ
    Citigroup Inc. bounced back from a year-earlier loss, but its vital trading business struggled under tough market conditions in the fourth quarter.
    /on.wsj.com/2VWYGQz

    JPMorgan Chase Reports Profit Rising 67%; The nation’s largest bank by assets encountered difficult trading conditions offset by a strong economy
    Peter Rudegeair and Emily Glazer – WSJ
    JPMorgan Chase & Co. said Tuesday that fourth-quarter profit rose by two-thirds despite a volatile trading environment.
    /on.wsj.com/2VTvyK5

    BlackRock’s Fink looks to a ‘deep bench’ to pick heir; Despite Mark Wiedman’s promotion, observers say other executives remain in the running
    Robin Wigglesworth – FT
    Last week, Larry Fink promoted Mark Wiedman, the head of BlackRock’s sprawling index investing business, to a new enlarged role that thrusts him to the top of the list of executives likely to take up the reins of the $6.4tn asset management group if its founder decides to step down.
    /on.ft.com/2VTQJf1

    Market turbulence weighs on JPMorgan Q4 earnings; Profits miss analyst expectations as fixed income trading revenue tumbles
    Laura Noonan – FT
    JPMorgan Chase grew net income by 34 per cent on an underlying basis in the fourth quarter but fell short of analysts’ expectations after fixed income trading revenues fell sharply amid December’s market turmoil.
    /on.ft.com/2VTD0oI

    PG&E Was a Hedge-Fund Darling. That Bet Flopped; Since the November fire, PG&E shares have plunged, challenging the idea that utilities are a safe bet
    Juliet Chung and Nicole Friedman – WSJ
    Utilities have long been considered ultrasafe bets. But PG&E Corp.’s PCG -52.36% announcement Monday that it will file for bankruptcy is teaching investors that isn’t always true.
    /on.wsj.com/2VTA8bq

    Wells Fargo quarterly revenue falls 5 percent
    Reuters
    Wells Fargo & Co on Tuesday said quarterly revenue fell 5 percent, hurt by lower revenue across all of its businesses, including community banking, the unit most closely tied to a 2016 sales scandal.
    /reut.rs/2QSbW5z

    Goldman Sachs knows where all the money went, says Malaysia finance minister as country gears up for fight for stolen 1MDB billions
    Trista Kelley – Business Insider
    A senior Malaysian official lashed out against Goldman Sachs for its role in the 1MDB Malaysian sovereign-wealth fund scandal, casting doubt on the bank’s claim that the blame lies with a few rogue employees.
    /read.bi/2QL35m1

    Regions

    Malaysia Blames Goldman Sachs for Stolen Billions
    Alexandra Stevenson – NY Times
    Accused of helping to carry out an international multibillion-dollar fraud, Goldman Sachs has tried to pin the blame on a few rogue bankers.
    /nyti.ms/2VTRULt

    Germany’s Sharp Slowdown Fans Fears That China Woes Are Spreading; Germany posts its slowest annual growth rate since 2013, in the latest sign of a global economic slowdown
    Tom Fairless, Paul Hannon and William Boston – WSJ
    The economic outlook for Europe and the world darkened after growth in Germany slowed sharply last year, hit by weaker exports to China and elsewhere, and softer demand at home.
    /on.wsj.com/2VXfjfh

    Waypoint Seeking to Start One of Canada’s Largest Hedge Funds
    Paula Sambo – Bloomberg
    32-year-old former Gluskin Sheff manager will take the helm; Buying volatility is ‘extremely cheap’ in Canada, he says
    A Canadian investment firm that crushed the returns of its peers last year is looking to raise C$500 million ($377 million) for what would be one of the country’s largest hedge funds.
    /bloom.bg/2VU21jx

    Brazil’s soaraway stock market masks deeper troubles; President Bolsonaro trumpets financial success but country lags behind other emerging markets
    Jonathan Wheatley – FT
    Carnival time comes late to Brazil this year but for investors, it appears to have come early. The real is the world’s best-performing currency so far in 2019 according to Bloomberg data, while the Bovespa stock market index has hit a string of record highs over the past fortnight.
    /on.ft.com/2QOBMXV

    Brexit

    Brexit threat exposes frailties in UK debt markets; Foreign investors are ‘sitting on their hands’, leaving some asset classes at risk
    Gavin Jackson and Kate Allen – FT
    The UK’s debt markets have remained fairly tranquil over the past couple of years as Brexit looms ó but that cannot be expected to continue if there is a chaotic exit from the EU in March, an analysis of economic data by the FT suggests.
    /on.ft.com/2VVXEEo

    Brexit No-Dealers Are Down, But They’re Not Out; The position of many Brexiters has hardened as their fantasies have been exposed as a sham. While they’ve been weakened, they still have support.
    Therese Raphael – Bloomberg
    One salutary thing about endgames is that the strengths and weaknesses of both sides become impossible to hide. As the U.K. parliament heads toward its vote on Theresa May’s Brexit deal Tuesday, it might look as if nothing has changed. But that’s not quite true: The founding myth of the hardline Brexiters has been debunked. The worry is that they still manage to drag the rest of the country down with them.
    /bloom.bg/2QOQU7J

    Reject May’s Brexit and Go Back to Voters; The deal on offer is no good. The U.K. should stop and think again.
    Editorial Board – Bloomberg
    On Tuesday, the House of Commons is expected to ó finally, maybe ó vote on the terms of the U.K.’s exit from the European Union. The choice it faces is, if not simple, at least stark. The proposed plan would make the country poorer, weaker and less competitive. It will satisfy no one, confer no benefits, and settle nothing about Britain’s future. It should be voted down ó and preparations should start for a second referendum.
    /bloom.bg/2QRCCDc

    Miscellaneous

    Elias M. Stein, Mathematician of Fluctuations, Is Dead at 87
    Kenneth Chang – NY Times
    Elias M. Stein, a mathematician who pioneered work in a field that was originally devised to describe the vibrations of strings but that proved to have a wide range of applications, including charting the fluctuations of stock markets and gravitational waves, died on Dec. 23 at a hospital in Somerville, N.J. He was 87.
    /nyti.ms/2VUDGKg

    Facebook to invest $300 million to help local news survive
    Kenneth Li – Reuters
    Facebook Inc (FB.O) will invest $300 million over three years in local news globally as it faces blistering criticism over its role in the erosion of the news business worldwide.
    /reut.rs/2QOKmpN

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