Chicago Mayor Emanuel addresses FinTank meeting, makes case for Chicago as crypto and fintech hub
Chuck Mackie, JLN
In what might prove to be a seminal moment in the development of the cryptocurrency and blockchain community in Chicago, Chicago Mayor Rahm Emanuel addressed an audience of nearly 150 on Monday. Extolling the virtues that Chicago possesses, Emanuel made the case that the city has the opportunity to become a preeminent global fintech center.
To read the rest go here.
Hits & Takes
Since the migration to CME Group, Eris Swap Futures’ ADV has increased to 10,500 contracts – five times the volumes seen in 2018 prior to the CME switch. This is the best month ever for Eris Swap Futures and there are still nine trading days left in March.~JK
Super important – a court ruled that flicking someone off is indeed protected free speech. Let those birds fly! ~SD
The Association of Futures Markets is coming to Chicago on May 9 and 10. Show some Chicago pride and attend.~JJL
Peter Borish will be presented with the eighth CTA Expo Lifetime Achievement Award on April 25 in New York at the Stewart Hotel.~SD
The Economist’s daily newsletter on the FIS/Worldpay tieup = “A FISful of Dollars.”~SD
Our friends at the FIA shared that the FIA’s Boca Raton International Conference was a success, with record attendance. The move to Thursday for the golf did not decrease the number of panels and the numbers at the charity golf event doubled.~JJL
FIA is looking for a London-based Communications Manager to support and contribute to member and industry communications. This role covers both the production of editorial content and the delivery of that content to multiple audiences, through multiple channels including newsletters, website, publications and social media.~JJL
A college student connected to this industry is looking for a summer internship in marketing and social media. If you know of anyone looking for such an intern, please let me know.~JJL
Boy Scouts return from winterlong financial trek
U.S. Bank is partnering with Boy Scouts of Chicago to teach youth about managing their money. Cash flow. Savings. Budgets. Stock prices. These are all topics of conversation you’d expect to hear in the conferences rooms at U.S. Bank’s LaSalle Street office in the heart of Chicago’s financial district on any given work day.
*****I brought the Trading Tech 300 program to my bank, US Bank, and they love the program. This story went out in their internal newsletter and already has sparked questions of how other branches in other states can initiate the Trading Tech 300 program.~JJL
How’s Your Bracket?
Bob Seawright – Above the Market
Last month on CNBC, Warren Buffett announced his annual NCAA tournament bracket contest for Berkshire Hathaway employees. First prize is $1 million a year for life for any employee who picks a perfect Sweet 16 in the tourney. The odds of doing that are about one in 2-3.5 million, depending upon the year. Last year, none of the 17.3 million ESPN brackets had a perfect Sweet 16 and no Berkshire employee made it out of the first round (not Dayton’s “First Four”) alive.
****You are much more likely to win the Powerball (one in 292,201,338) than to pick a perfect bracket. According to Duke professor Jonathan Mattingly, if you account for seeding in your calculations the odds are one in 2.4 trillion. But he’s a Duke professor, so who knows.~SD
Monday’s Top Three
The top read piece of the day on Monday was Chuck Mackie’s recap Boca Bits?ó?FIA Boca 2019 Day Three and Recap. Second was Jim Kharouf’s JLN piece The Small Exchange: Building a new ecosystem for the little fish. Third was Illinois News Network’s Illinois lawmakers make case for financial transactions tax, which details a new state bill proposal for $1 per transaction tax on each of the Chicago-based exchanges. It dovetailed nicely with the recent JLN piece Brace yourself. It may be time for a financial transaction tax. They’re coming.
147,206,409 pages viewed; 23,595 pages; 217,715 edits
Criminal Past Haunts Surviving Founder of Troubled Crypto Exchange
Doug Alexander and Matt Robinson – Bloomberg
Records show Michael Patryn changed name twice in five years; Says split with crypto exchange’s late CEO was over listing
His crimes: identity theft related to a bank-and-credit card scam. His sentence: 18 months in U.S. federal prison and, later, deportation to Canada. Once there, Omar Dhanani underwent a remarkable transformation — into a new identity and the wild world of cryptocurrencies.
Fed Faces Crucial Decision on Mix of Treasurys in Its Portfolio; Favoring short-term notes is seen as giving central bank more flexibility if economic growth slows
Nick Timiraos – WSJ
Markets have cheered the Federal Reserve’s imminent announcement that it will stop shrinking its asset portfolio later this year, but determining that date is just one challenge facing central-bank officials.
ISDA, SIFMA, ABA, BPI and FIA Comment on Proposed Standardized Approach for Calculating Exposure Amount of Derivatives Contracts
ISDA, the Securities Industry and Financial Markets Association (SIFMA), the American Bankers Association (ABA), the Bank Policy Institute (BPI), and the Futures Industry Association (FIA) today submitted comments regarding the proposed rule issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency to implement the standardized approach for counterparty credit risk (SA-CCR) as a replacement for the current exposure method (CEM) in the US capital rules.
****An important change is afoot when it comes to the inputs banks use to calculate their derivatives exposure. Are you up to date on the CEM vs. SA-CCR debate? Access the comment letters on the SA-CCR proposal here. Also, WFE Response to US Authorities on SA-CCR. ~SD
Banking’s Back-Office Workhorses Are Merging as Technology Reshapes Finance; A global shake-up in the humdrum business of payments has set off a merger frenzy
Telis Demos – WSJ
A global shake-up in the humdrum business of payments has set off a merger frenzy among the giant but obscure companies that connect banks, merchants and consumers.
Bitcoin Is in the Dumps, Spreading Gloom Over Crypto World; The value of all cryptocurrencies outstanding is down 85% from peak and volumes on U.S. exchanges have been falling
Paul Vigna – WSJ
Bitcoin is in the longest slump of its 10-year history. That is forcing even its most ardent supporters to shelve dreams of global disruption and focus on simply tightening their belts long enough to outlast the downturn.
Goldman Sachs Implements Its Own ‘Rooney Rule’ in Diversity Push; Managers must interview two diverse candidates for any open job
Liz Hoffman – WSJ
Managers at Goldman Sachs Group Inc. will be required to interview two diverse candidates for any open job, a push the firm hopes will change its heavily white, male workforce.
Asset management: inside the scandal that rocked GAM; A bitter dispute has provoked the departure of chief executive and a star fund manager
Laurence Fletcher, Katie Martin, Robert Smith and Jennifer Thompson – FT
In April last year Richard McNamara, chief financial officer of GAM Holding, addressed about 50 staff in a meeting room at the investment firm’s plush King Street offices in London’s St James’s.
Backstop BarclayHedge Reports Hedge Fund Redemptions Down from December High, But the Trend Continues in January
Hedge fund redemptions slowed from their December pace in January, but persisted for a fifth straight month, driven by a fourth-quarter stock market plunge and investor concerns over global trade disputes and a possible global economic slowdown.
January’s hedge fund redemptions stood at $24.1 billion, a marked decrease from December’s $42.3 billion but still a drop of 0.8% of hedge fund assets, according to the Barclay Fund Flow Indicator, published by BarclayHedge, a division of Backstop Solutions.
2019 Bibliography of Adverse Effects Of HFT (Studies, Research, Press)
Themis Trading Blog
Our long-time friend and collaborator, R.T. Leuchtkafer, has put together a single document that organizes and presents years of data-driven research (academic, government, and industry) of the adverse effects of high frequency trading on markets.This undertaking is mammoth, and it includes press, op-eds, key commentary, books, and documentaries. It is organized. It has sections that you will be immediately drawn to, such as effects of HFT on market quality and investor costs.
****A lot to digest here. ~SD
The Yale Dad Who Set Off the College-Admissions Scandal; Morrie Tobin was implicated in a securities fraud case when he mentioned a bribe sought by a Yale coach
Jennifer Levitz and Melissa Korn – WSJ
The tipster who led federal authorities to the biggest college-admissions scam they have ever prosecuted was Morrie Tobin, a Los Angeles financial executive who was being investigated in a securities fraud case, according to a person familiar with the investigation.
Cboe’s Bob Books Elected Chair of the SIPs
The Operating Committees of the Securities Information Processors (SIPs) today announced that Bob Books has been elected to serve as chair.
German economic advisor opposed to Deutsche, Commerzbank merger
An economic advisor to the German government, Isabel Schnabel, said on Tuesday she strongly advised against a possible merger of Deutsche Bank and Commerzbank.
UK broker TP ICAP takes asset hit after last year’s profit warning; Interdealer group will spend more on risk management and insight for brokers
Philip Stafford – FT
TP ICAP, the UK interdealer broker, has taken a 65m non-cash charge relating to the value of its assets following its hefty profits warning last summer.
Exchanges, OTC and Clearing
CME Group Announces All-Time Eurodollar Options Open Interest Record of 55.8 Million Contracts
CME Group, the world’s leading and most diverse derivatives marketplace, reached an all-time Eurodollar options open interest record of 55.8 million contracts on March 15, 2019. Open interest has continued to grow since reaching the previous record of 52.4 million contracts that was set on March 15, 2018.
CME adds FX data streaming to EBS Quant Analytics platform; CME said the launch marks the first time the FX market will be able to stream trade-by-trade data to analyse impact of trades.
Hayley McDowell – The Trade
CME Group’s electronic trading business EBS has bolstered its Quant Analytics platform to include an API streaming service to expand data in FX trading available for clients.
GPW Offers New Derivatives
The objective of the strategic initiative Development of Derivatives is to attract new investors to the derivatives market. GPW in co-operation with market participants supports the listing of single-stock futures with a multiplier of 1 and 10.
EuroCCP to clear trading for EU entities of Cboe, Turquoise & Aquis; Cboe and Turquoise have established EU entities in Amsterdam, while Aquis Exchange set up its new EU base in Paris.
Hayley McDowell – The Trade
European equities clearinghouse EuroCCP has been chosen to provide clearing services to the recently established EU-entities of Cboe Europe, Turquoise and Aquis Exchange following Brexit.
Successful start for Eurex’s ESG segment
Four weeks ago, Eurex started its Environment Social Governance (ESG) segment by launching futures on STOXX ESG-X, Low Carbon and Climate Impact Indexes. With more than 18,000 traded contracts and more than 16,000 contracts in Open Interest, demand was strong, given that the products are just celebrating their one-month anniversary.
Amendments to the Price List of Eurex Clearing AG
This circular contains information with respect to Eurex Clearing AG’s service offering and corresponding amendments to the Price List of Eurex Clearing AG (“Price List”) regarding the following topics:
Equity Derivatives: Amendments to the Price List of Eurex Clearing AG; Effective 8 April 2019, the following measure of Eurex Clearing AG will apply:
The amendments to the Price List of Eurex Clearing AG regarding the inclusion of the 44 physically delivered Single Stock Futures contracts newly introduced at Eurex Deutschland.
The amendments to the Price List of Eurex Clearing AG published by this circular at least ten (10) Business Days prior to the effective date indicated herein are deemed accepted by each affected contractual party of Eurex Clearing AG, unless the respective contractual party objects by written notice to Eurex Clearing AG within such period. Any ordinary right of Eurex Clearing AG to terminate the respective contract (including a Clearing Agreement, if applicable) shall remain unaffected.
Exchange Publishes its Latest Listing Committee Report
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Tuesday) published its Listing Committee Report for 2018, a review of the Listing Committee’s work during the year and an overview of its policy agenda for 2019 and beyond.
SIX: Insights From The Universe Of Structured Products – Structured Products Have Made Significant Strides Since Their Creation
Structured products are an invaluable supplement to the portfolios of retail investors, according to Andre Buck, Global Head Sales Securities and Exchanges at SIX, speaking on an expert panel at an event in February this year. This comes as many retail investors struggle to obtain decent risk-adjusted returns through traditional financial instruments such as fixed income and equities.
Interview: LME prepared even for ‘hard’ Brexit, CEO says
The London Metal Exchange is prepared for whatever outcome arises from the planned departure of the UK from the European Union, including a so-called “hard” Brexit, its chief executive officer said on Tuesday March 12.
Itiviti appoints COO at FIS as chief executive; Itiviti completed its merger with Ullink last year and recently undertook a year of integration of both entities.
Hayley McDowell – The Trade
Swedish-based trading software provider Itiviti has confirmed that the former operating chief at FIS will lead the company as CEO, following its merger with Ullink last year.
CEO of Apex Clearing talks about the future of wealth management
Dan DeFrancesco – Business Insider
The future of managing money could be more like picking what you want for dinner at a restaurant than being locked into a specific service for years.
Key Trends in Corporate Bond Electronification: Echoes of the Boom
David Parker, MTS Markets – Tabb Forum
While the surge in corporate bond electronification may be over, innovation in the space is not dead; it is just changing form. If the boom is over, the echoes alone are still strongly changing market structure today, says MTS Markets’ David Parker, who highlights three notable developments from the perspective of an operator in the all-to-all corporate bond market.
Refinitiv Deal Makers Sentiment Survey Reveals a Cautious Optimism for M&A and Capital Markets in 2019
Refinitiv has announced the findings of its annual Deal Makers Sentiment Survey conducted by Greenwich Associates, providing a broad and deep quantitative assessment of M&A-related and Capital Markets activity in the year ahead across all major sectors and geographies.
U.S. Trails Europe in Technology and Data-Science Skills Ranking
Jeff Kearns – Bloomberg
The world’s largest economy doesn’t stand so tall in a global ranking of technology skills. For the leaders, look to Europe. U.S. abilities fall more closely to the middle, according to a new index Coursera Inc. has compiled from the online learning platform’s user data. Europe accounted for more than 80 percent of nations in the top quarter of countries across the technology, business, and data science domains, with some consistent leaders across all three of those categories: Finland, Switzerland, Austria, Sweden, Germany, Belgium, Norway and the Netherlands.
Cryptocurrencies and Derivatives: The Battle for Dominance
Jessica Darmoni via Medium
The Futures Industry Association (FIA) held their 44th Annual Boca conference last week in Boca Raton, Florida. The gathering attracted over 1100 attendees consisting of regulators, market makers, technology providers and exchange leaders. ErisX attended the conference and chief executive officer Thomas Chippas shared his expertise on a panel exploring how cryptocurrencies are impacting the derivatives industry. He was joined on stage by moderator Colleen Sullivan from CMT Digital, Ron Bernstein from Coinbase, Tim McCourt from CME Group, John Deters from Cboe Global Markets and Adam White from Bakkt.
Inside the Polychain-backed, offshore futures exchange hoping to beat Bakkt
Isabel Woodford – The Block Crypto
CoinFLEX, a still-dormant exchange with a low profile but big backers, is not intimidated by the players who remain in the futures game. It’s planning to be the first to offer physically delivered bitcoin futures, set to launch in the “next few weeks,” and says it’s got a few tricks up its sleeve.
Japan clamps down on margin cryptocurrency trading
Takero Minami – Nikkei Asian Review
Japanese financial authorities will expand on already pioneering rules for cryptocurrency trading to bring further order to one of the world’s biggest virtual currency marketplaces. The cabinet on Friday approved draft amendments to Japan’s financial instruments and payment services laws, which would cap leverage in virtual currency margin trading at two to four times initial deposits. The new limits are in line with standards are similar to those in foreign exchange trading.
Here’s how Bakkt and ErisX are different, according to their executives
Frank Chaparro – The Block Crypto
Bakkt and ErisX are often mentioned in the same breath when folks opine on the institutionalization of crypto. The two firms are both looking to break into the bitcoin derivatives market with their own physically delivered bitcoin futures product, but there are some key differences between them.
Circle CEO: Cryptocurrency Business Is Down But We’re Still Growing
Robert Hackett – Fortune
Jeremy Allaire is frank about the impact of the cryptocurrency market downturn on his business. The chief executive of Circle, a Boston-based financial technology startup which bought a cryptocurrency exchange, Poloniex, for around $400 million last year, said the bear market has slackened investors’ activity on the online marketplace as well as the liveliness of the company’s over-the-counter cryptocurrency trading business, historically the firm’s biggest moneymaker.
IBM Says Banks Consider Following JPMorgan Into Digital Currency
Olga Kharif – Bloomberg
Two U.S. firms talked to computer giant about issuing a coin; IBM blockchain executive sees ‘revenue opportunity for banks’
International Business Machines Corp., a provider of technology for creating digital currency, said at least two “major U.S. banks” are considering whether to follow JPMorgan Chase & Co.’s lead in issuing a coin.
IBM Signs 6 Banks to Issue Stablecoins and Use Stellar’s XLM Cryptocurrency
Ian Allison – Coindesk
IBM is taking its banking clients a step closer to cryptocurrency. Announced Monday, six international banks have signed letters of intent to issue stablecoins, or tokens backed by fiat currency, on World Wire, an IBM payment network that uses the Stellar public blockchain. The network promises to let regulated institutions move value across borders – remittances or foreign exchange – more quickly and cheaply than the legacy correspondent banking system.
Crypto Exchange Bithumb to Reduce Staff By Up to 50%
Daniel Palmer – Coindesk
Bithumb, the largest cryptocurrency exchange in South Korea, plans to cut its staffing levels by up to 50 percent, according to a CoinDesk Korea report issued Monday, a move that would reduce its number of employees from 310 at the start of March to around 150. When reached, an official at the company confirmed the 50 percent figure, adding that it expects those departing will mostly be employees who already want to leave the company.
Galaxy Digital Backs $5.25 Million Round for Blockchain Staking Startup
Yogita Khatri – Coindesk
Blockchain staking startup Bison Trails has raised $5.25 million in a series seed funding round backed by Mike Novogratz’s Galaxy Digital.
Bitmain’s Latest Zcash Miner Claimed to Have Tripled Hashing Power
Yogita Khatri – Coindesk
Cryptocurrency mining giant Bitmain has launched a new miner for the privacy-oriented cryptocurrency zcash, which it claims, has three times more hashing power than its predecessor.
Deutsche Bank loaned over $2 billion to Trump: report
Michael Burke – TheHill
Deutsche Bank reportedly loaned more than $2 billion to President Trump over multiple decades while he was a real estate developer.
The New York Times reported Monday, based on interviews with more than 20 bank officials, that the bank repeatedly loaned money to Trump despite multiple business-related “red flags.”
Report: Trump Repeatedly Inflated His Net Worth in Deals With Deutsche Bank
Matt Stieb – NY Magazine
Among the many investigations into Trump’s alleged misconduct ó political, financial, ethical, etc. ó the New York attorney general’s inquiry into the Trump Organization’s relationship with Deutsche Bank could be the most embarrassing for the president, as it could reveal just how he conducts his business, and how much he is really worth. A taste of that potential revelation came on Monday evening, when the New York Times published a comprehensive report on Trump’s relationship with Deutsche Bank, which loaned Trump a reported $2 billion over two decades.
A Mar-a-Lago Weekend and an Act of God: Trump’s History With Deutsche Bank
David Enrich – NY Times
As President Trump delivered his inaugural address in 2017, a slight woman with feathered gray hair sat listening, bundled in a hooded white parka in a fenced-off V.I.P. section. Her name was Rosemary T. Vrablic. She was a managing director at Deutsche Bank and one of the reasons Mr. Trump had just taken the oath of office.
Trump Budget Relies on Up to $1.2 Trillion in Potentially Phantom Revenues; Up to $390 billion comes from taxes created by the Affordable Care Act, which president wants to repeal
Richard Rubin – WSJ
President Trump’s budget blueprint for the next decade relies on up to $1.2 trillion in revenue that might not materialize. The budget assumes the government will collect as much as that amount between 2020 and 2029 from taxes the administration opposes or from scheduled tax increases that are likely to draw strong business opposition. The $1.2 trillion estimate comes from the Committee for a Responsible Federal Budget, an independent bipartisan nonprofit.
DealBook Briefing: Inside Trump and Deutsche Bank’s Checkered History
President Trump has long enjoyed the backing of one major lender: Deutsche Bank. David Enrich of the NYT has taken a deep look into their often turbulent relationship ó which is now under investigation by prosecutors and Congress.
US companies agree to lift veil on political donations; Mondelez, Chubb and MSCI among those promising more disclosure after activist pressure
Andrew Edgecliffe-Johnson – FT
Five large US companies have agreed to reveal more details about their political spending in response to rising investor pressure on directors to explain how they use shareholders’ funds to influence campaigns and candidates.
Federal Court Orders Forex Fraudster and His Companies to Pay More Than $2.2 Million for Fraudulent Solicitation and Misappropriation of Customer Funds
The Commodity Futures Trading Commission (CFTC) today announced that the U.S. District Court for the Central District of California, Western Division, entered an order which granted the CFTC’s motion for default judgment (Order) and a judgment consistent with the Order (Judgment) against defendants Jin Choi (Choi), a citizen of the Republic of South Korea with a last known residence in Los Angeles, California, as well as his companies Apuro Holdings Ltd (Apuro) d/b/a, ApuroFX, JCI Holdings USA (JCI), and d/b/a JCI Trading Group, LLC (collectively the defendants), in connection with a fraudulent foreign currency (forex) scheme that victimized customers in the United States, Australia, Indonesia, and elsewhere.
Federal Court Orders Precious Metals Dealer and Its Owner to Pay More than $2.3 Million for Fraud and Misappropriation in Gold and Silver Scheme
The Commodity Futures Trading Commission (“CFTC”) today announced that the U.S. District Court for the Southern District of New York entered an Order of Default Judgment (“Order”) and Permanent Injunction against Royal Metals Group, LLC (“RMG”), and its member, manager and part owner, Chelsea Gless (“Gless”) of Iowa (collectively, “defendants”) for fraudulent misrepresentations and the misappropriation of customer funds in a precious metals scheme.
CFTC wants TFS-ICAP senior managers to respond to complaint in flying & printing case
Maria Nikolova – FinanceFeeds
Jeremy Woolfenden, former Global Head of Emerging Markets broking at TFS-ICAP, and Ian Dibb ex-CEO of TFS-ICAP, are under increased pressure to respond to the complaint launched by the United States Commodity Futures Trading Commission (CFTC) against them at the New York Southern District Court.
The CFTC Complaint alleges that, from approximately 2008 through 2015, brokers at TFS-ICAP offices in the United States and the United Kingdom attempted to deceive and deceived their clients by engaging in the practices of communicating to them fake bids and offers and fake trades in the foreign exchange options market. The CFTC Complaint alleges that the practices, known as “flying prices” and “printing trades”, were a core part of TFS-ICAP’s broking business.
Political insider linked to corruption probe; FBI affidavit portrays Brian Hynes, a figure in Blagojevich case, as involved in Ald. Solis’ affairs
Jason Meisner – Chicago Tribune
Ali Ata had just been subpoenaed in the intensifying corruption probe of the Gov. Rod Blagojevich administration in 2005 when he got a call from a young, well-connected attorney who said he had a message from on high.
*****The story references Ken Griffin of Citadel.
SEC Stunned That Musk Failed to Get Pre-Approval of Tweets
Dana Hull – Bloomberg
The securities watchdog wants Musk held in contempt of court; A lawyer for Musk seeks to file response by March 22
The U.S. Securities and Exchange Commission said it’s “stunning” that Elon Musk didn’t seek pre-approval of any of his tweets about Tesla Inc. in the months since he was ordered by a judge to do so.
Jeffrey Epstein was said to be a witness against Wall Street; an FBN investigation suggests otherwise
Charlie Gasparino, Lydia Moynihan, Bryan Llenas – Fox Business
How did convicted sex offender and billionaire money manager Jeffrey Epstein receive a relatively mild sentence for a crime that involved underage girls?
Final class action against financial services licensee recommending Westpoint products concludes
The last of ASIC’s proceedings seeking damages on behalf of a number of investors in the Westpoint Group has been finalised.
Broker Imposter Scams: Remember To Ask And Check
FINRA recently issued an investor alert on fraudsters impersonating FINRA executives, offering bogus investment “guarantees” to investors as part of an advance-fee scam. But regulators are not the only ones who need to worry about someone trying to steal their good name.
NYSE Files for Stay of Transaction Fee Pilot
John D’Antona Jr. – Traders Magazine
The NYSE objects – to the Securities and Exchange Commission’s proposed Transaction Fee Pilot. And the bourse has put its objections in writing, filing late last week a stay comment letter with the regulator.
Comment Letter: Swap Execution Facilities and Trade Execution Requirement
Investing and Trading
Two Big IPOs Wake 2019’s Market From a Sleepy Start
Elizabeth Fournier – Bloomberg
After a slow start to the year in IPO-land, things are finally starting to heat up.
Bond Traders Have Forgotten the Taper Tantrum; Lack of volatility leads market commentary.
Robert Burgess – Bloomberg
The Federal Reserve this week is holding its second meeting on monetary policy this year, and the topic dominating the conversation in markets is bond-market volatility. Or more precisely, the lack of it. There are many ways to think about this, but one stands out above the rest in a concerning way.
Overdone? Short EU equities ‘most crowded’ trade for first time
Josephine Mason, Helen Reid – Reuters
Fund managers have named bearish bets in European equities as the “most crowded” trade in Bank of America Merrill Lynch’s survey for the first time in its history, suggesting sentiment for one of the world’s most shunned markets may have troughed.
Companies Call for Oversight of Firms That Advise Shareholders; Securities regulators are weighing options that could limit the influence of proxy-advisory firms
Gabriel T. Rubin – WSJ
Companies want the firms that advise shareholders on proxy proposals to face government oversight of their activities, a wish securities regulators are expected to act on as early as this spring.
Fed Officials Wrestle With a ‘Dot Plot’ Dilemma; Officials are set to release rate projections on Wednesday, but they have caused confusion
Nick Timiraos – WSJ
Federal Reserve officials aren’t quite sure what to do about their dots. Every quarter, the central bank produces a chart of 19 officials’ individual projections for interest rates, with a dot representing each person’s expected value of the Fed’s benchmark rate in coming years. Most of them see this so-called dot plot as a valuable communications tool, but it has increasingly contributed to investor confusion.
Wall Street’s Latest Love Affair With Risky Repackaged Debt; Investors in collateralized loan obligations are ignoring the signs of danger.
William D. Cohan – NY Times
The financial markets today are looking very much like they did a decade or so ago. And that can mean only one scary thing: Trouble is imminent.
Jamie Dimon says we’ve split the U.S. economy, leaving the poor behind
Hugh Son – CNBC
J.P. Morgan Chase CEO Jamie Dimon said that the U.S. economy has essentially been split into those benefiting from thriving corporations and those who are left behind.
Is E-Trading Eroding The Bulge-Bracket Broker Advantage?
John D’Antona Jr. – Traders Magazine
Institutions are making more use of both e-trading and sophisticated tools that help them evaluate execution resultsóand non-bulge bracket brokers are frequently besting their bigger rivals on this fast-evolving playing field. Between 2017 and 2018, there was not a single change in the rank ordering of the Greenwich Share Leaders in U.S. Equity Trading, the industry-standard ranking for top brokers. However, that stability masks a huge and increasing level of turnover. Over the same 12-month period, the median institutional client was reallocating a third of their U.S. equity trading volume among brokers and that median volume allocation increased by 50% between 2014 and 2018.
Big German Banks, Stumbling, Decide to Get Bigger; It smacks of desperation. And it probably won’t work.
Mark Gongloff – Bloomberg
Forcing one basket case to marry another basket case usually just results in an exponentially larger basket case. Nevertheless, Europe’s biggest economy is about to try to make this work, with banks.
HSBC promotes 1300 staff as investment bank overhaul gathers pace: memo
Sinead Cruise, Lawrence White – Reuters
HSBC is stepping up a root-and-branch overhaul of its global banking and markets division, naming 83 new managing directors in a 1,300-strong promotions spree aimed at revitalizing its investment banking franchise.
Japan bank executive says mergers won’t fix woes brought by BOJ policy
Leika Kihara – Reuters
Japan’s ultra-loose monetary policy is making it tough for commercial banks to earn profits out of lending, a problem that cannot be fixed through bank mergers, the influential chairman of a major regional bank in southern Japan said.
Germany is forcing a marriage that may not work
Spriha Srivastava – CNBC
Germany seems to be obsessed with the idea of creating a national banking champion. Is it a way of standing up to the big-ticket U.S. banks? Or reaffirming Germany’s dominance as the biggest European economy?
Danske Bank Is Still ‘Working Intensively’ to Try to Find a CEO
Frances Schwartzkopff – Bloomberg
It seems increasingly clear that Danske Bank A/S was far from alone in its involvement in one of the world’s biggest money laundering scandals.
Bank of America Dives Deep Into India’s Bad Debt
Anurag Joshi and Saloni Shukla – Bloomberg
Buyers to pay 33 billion rupees for Indian steel maker’s loans; Lenders take 30 percent haircut on loan sale to investor group
Bank of America Corp. has bought its biggest distressed asset in India, adding to a growing trend of foreign investors diving deeper into the country’s massive pile of bad debt.
The NIFTY 50 No Longer Reflects the Indian Economy
Saurabh Mukherjea – CFA Institute Enterprising Investor Blog
The NIFTY 50 has fallen far behind the Indian economy.
Indeed, when it comes to earnings growth, the most popular benchmark index in India has not only trailed the larger Indian economy over the last decade, it has also lagged behind the S&P 500 by a country mile. Yet India’s economic growth is vastly outpacing that of the United States. This bizarre phenomenon has far-reaching implications for Indian investors.
Russia’s Gazprom held talks with Serbia over gas pipeline
The chief executive of Russia’s Gazprom, Alexey Miller, has held talks with Serbian President Aleksandar Vucic over the construction of a gas pipeline in the Balkan country, Gazprom said on Tuesday.
Australia’s Westpac exits financial advice, takes charge to shake up wealth unit
Paulina Duran – Reuters
Westpac Banking Corp, said on Tuesday it would exit its financial advice business, the last of Australia’s top four banks to do so, as regulators increase pressure on the scandal-ridden financial sector to act in customers’ best interests.
Aluminium producer Norsk Hydro suffers cyber attack; Company says it is working ‘contain and neutralise’ the situation
Henry Sanderson – FT
Norsk Hydro, one of Europe’s largest aluminium producers, said it had been hit by a cyber attack on Tuesday that had impacted operations “in several of the company’s business areas.”
Africa’s Booming Cities Are Running Out of Water
Ekow Dontoh and Michael Cohen – Bloomberg
Ghana, Mozambique, Zimbabwe, Ivory Coast face supply squeeze; Globally 2 billion people live in water-stressed nations
As water supplies in Ghana’s capital grew increasingly erratic, Beatrice Kabuki stopped customers from using her grocery store’s bathrooms and installed a plastic storage tank at her home.
Brexit in crisis as PM May plots a course around speaker’s obstruction
Guy Faulconbridge, Kate Holton – Reuters
Prime Minister Theresa May’s Brexit plans were in disarray on Tuesday as her government sought to plot a way around a ruling by the speaker of parliament that she must change her twice-defeated divorce deal to put it to a third vote.
French EU minister says London must break Brexit impasse
Britain must come up with a reason for any Brexit delay and a no-deal divorce may well happen, French EU affairs minister Nathalie Loiseau said on Tuesday.
EU ministers demand clarity from UK after Bercow ruling; ‘Dear friends in London, please deliver!’ urges German minister
Mehreen Khan – FT
EU ministers have pleaded with the UK to deliver a strategy on Brexit two days ahead of a crucial European leaders’ summit.
EU Delay Plan Said to Allow for New Vote on Deal: Brexit Update
Ian Wishart and Kitty Donaldson – Bloomberg
European Union leaders are planning to offer the U.K. a conditional Brexit extension at this week’s summit in Brussels, giving Prime Minister Theresa May one more chance to get her deal approved in Parliament before March 29, officials familiar with the plan said.
Alan Krueger Led a Quiet Economics Revolution; The Princeton professor, who died over the weekend, upended the field by relying on data instead of airy theory.
Noah Smith – Bloomberg
It was with great sadness that I learned that Princeton University economist Alan Krueger had died over the weekend at the age of 58. In his outstanding but too-brief career, Krueger helped turn the economics profession into a more empirical, more scientific enterprise. His research shed light on many of the most important policy issues facing the U.S., and he put that knowledge to good use working for two presidential administrations. He will be greatly missed.
Women in Economics Report Rampant Sexual Assault and Bias
Ben Casselman and Jim Tankersley – NY Times
Nearly 100 female economists say a peer or a colleague has sexually assaulted them. Nearly 200 say they were the victim of an attempted assault. And hundreds say they were stalked or touched inappropriately, according to a far-reaching survey of the field.