Modern markets are untested by recession, warns IMF official

Apr 11, 2019

First Read

US v Jitesh Thakkar: Waiting for the Denouement
Thom Thompson – John Lothian News

According to Merriam Webster, the (second) definition of “denouement” is “the outcome of a complex sequence of events.”

On Monday, April 8, the twelve members of the jury in the trial (surely “a complex sequence of events”) of Jitesh Thakkar for allegedly aiding and abetting Navinder Sarao’s 2013 spoofing of the CME’s E-mini S&P 500 futures heard final arguments and retired to deliberate. Which they did over a more than 24 hour period.

But, as we reported, the jurors found no unanimity and were sent home late Tuesday afternoon. There was no final outcome, no denouement.

To read the rest of this commentary, go here.

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Building a Crypto Market in Traditional Futures Exchange Form – Thomas Chippas, ErisX

JohnLothianNews.com

Early crypto exchanges weren’t bred from any tradition – they were born on the far fringes of capital markets know-how. To change that, ErisX brought together a staff with decades of experience in fields like prime broking, matching engine functionality, and central clearing, to build its exchange that will feature spot and futures contracts side-by-side. The result? A 24/7 real-time clearing platform for fiat and physical delivery of crypto. In this video from JLN’s Industry Leader Series, ErisX CEO Thomas Chippas talks about how innovating in crypto sometimes just means applying technologies and methodologies that are already established in other markets, the exchange’s expansive investor base, and what it is going to take for crypto trading to take off on regulated U.S. exchanges.

Watch the video »

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Hits & Takes
JLN Staff

The Cboe Annual Report is out.~JJL

Here is CNN’s report about the severe weather hitting the U.S.~JJL

FIA reports in its March 2019 volume stats that worldwide volume of exchange traded derivatives was 2.86 billion contracts for the month, up 18.7% from the previous month and up 11.7% from March 2018. On a year-to-date basis, volume in the first three months of the year was 7.97 billion contracts, up 8.1% from the first three months of 2018. Total open interest at the end of March was 876.1 million contracts, up 2.6% from a year ago.~SR

On Tuesday a professional sports gambler from Naperville, Ill., set the single day record for Jeopardy winnings with $110,000. He’s plays a lot of bridge, knows the MLB’s all-time home run leaders by heart, and credits his wins to “informational children’s books.”~SD

Barchart released a whitepaper on “[http://bit.ly/2KsSBJW|How Ag Firms Can Increase Profits with Basis Indexes]].”~JJL

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To Purge Some of Social Media’s Ugliness, an Unlikely Lesson From Wall St.; A simple rule that bolsters the banking system — “know your customer” — could help combat fake news and hate speech online if companies like Facebook and Twitter embraced it.
Andrew Ross Sorkin – WSJ
Exactly a year ago, Facebook’s chief executive, Mark Zuckerberg, testified before Congress and apologized for his company’s role in enabling “fake news, foreign interference in elections and hate speech.”
/nyti.ms/2Kuv7nO

***** Know your customer, what a novel idea.

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Bittrex customers were using fake names like Donald Duck and Elvis to trade, and now the exchange has to leave New York
Frank Chaparro – The Block Crypto
The BitLicense gods giveth, and they taketh away! A day after the New York Department of Financial Services issued its 19th BitLicense to crypto exchange Bitstamp, the agency has denied the application of a U.S.-based exchange operator, Bittrex.
bit.ly/2Kt9mF7

***** Bittrex, for the record, Elvis is dead.~JJL

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Mistakes, we’ve drawn a few
The Economist
At The Economist, we take data visualisation seriously. Every week we publish around 40 charts across print, the website and our apps. With every single one, we try our best to visualise the numbers accurately and in a way that best supports the story. But sometimes we get it wrong. We can do better in future if we learn from our mistakes?—?and other people may be able to learn from them, too.
bit.ly/2IrGc6u

***** Was it a mistake to point out their mistakes?~JJL

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Coffee beans not vital for human survival, Switzerland decides
The Guardian
Switzerland has announced plans to abolish the emergency stockpiling of coffee, a strategy that has been in place for decades, saying the beans are not vital for human survival – though opposition to the proposal is brewing.
bit.ly/2Irvz3v

****** Allan Schoenberg is evidence to the contrary, as am I.~JJL

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Wednesday’s Top Three
Our top read story was Thom Thompson’s JLN coverage of the Jitesh Thakkar trial, Hung Jury in Trial of US v Thakkar. Second was Tayloe Draughon‘s column Should Software Engineers be Criminally Liable for Trader’s use of their code?. Third was our JLN interview at FIA Boca with Rick Lane, The Great Migration – Rick Lane, Trading Technologies, who talks about the migration to the new TT platform and the use of the cloud in today’s trading space.

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Lead Stories

Modern markets are untested by recession, warns IMF official; Recent spikes in volatility could be ‘tip of the iceberg’
Robin Wigglesworth – FT
Modern markets, dominated by high-frequency traders and slimmed bank trading desks, are untested by recession and recent abrupt gyrations could be the “tip of the iceberg”, according to a top International Monetary Fund official.
/on.ft.com/2UVgjCZ

Deutsche Boerse says it is in talks to buy some Refinitiv FX units
David French, Andreas Framke, Arno Schuetze – Reuters
German stock exchange operator Deutsche Boerse AG said on Wednesday that it is in “concrete negotiations” with data provider Refinitiv about the potential acquisition of certain foreign exchange business units.
/reut.rs/2KtK4qb

*****Here is The Trade version and the FT version of this story.~JJL

Fintechs Ramp Up Hiring as Big Banks Cut Jobs
Alastair Marsh – Bloomberg
With 61% jump in slots, industry was London’s fastest growing; Salaries rising to attract talent to U.K. amid Brexit worries
As many of Europe’s biggest financial firms trim staff and brace for Brexit, their emerging competitors are charging ahead at full speed.
/bloom.bg/2KuleXt

SocGen Is Latest Bank to Shutter Commodities as Profits Bite
Catherine Ngai – Bloomberg
Bank Shutting OTC commodities business, trading subsidiary; Comes after BNP shut its U.S commodities derivatives desk
Add Societe Generale SA to the list of banks and financial institutions to take a big step back from commodities amid a slump in trading profits.
/bloom.bg/2KsterN

Britain can now change its mind about Brexit; Macron’s emergence as a latter-day de Gaulle should not stop a second referendum
Philip Stephens – FT
The workaday leader fashions every sound bite to immediate advantage. Seizing the microphone is what matters. The statesman plays a longer game. The strategic gain often lies in a quiet show of generosity. French president Emmanuel Macron by a margin is Europe’s most interesting politician. He has some way to go before claiming statesmanship.
/on.ft.com/2UKtYwv

As Brexit looms, Dutch markets regulator issues 40 new licenses
Reuters
More than 40 licenses were issued in 2018 to businesses moving to Amsterdam from London due to Britain’s departure from the European Union, the Dutch financial markets regulator said on Thursday.
/reut.rs/2KsdTaM

China’s New Policy Isn’t An Automatic Bitcoin Mining Ban – Here’s Why
Wolfie Zhao – Coindesk
One of these things is not like the others. On Sept. 4, 2017, the People’s Bank of China (PBoC), together with six other central government agencies and financial regulators, banned initial coin offerings (ICOs).
bit.ly/2KuBrMj

Commerzbank Board Members Seek Meeting to End Deutsche Bank Deal Talks
Steven Arons – Bloomberg
Some labor representatives are said to want to prevent deal; CEO Zielke is trying to calm employees concerned about jobs
Some Commerzbank AG labor representatives on the supervisory board are seeking to convene a meeting of the body to end talks about a tie-up with rival Deutsche Bank AG, according to people familiar with the matter.
/bloom.bg/2Kr95Cm

WFE IOMA 2018 Derivatives Report
World Federation of Exchanges
The WFE has published its annual IOMA Derivatives Report, which shows that overall derivatives contracts traded in 2018 exceeded 30 billion for the first time since the WFE started publishing the report in 2005.
bit.ly/2X5GcgN

Erik Müller joins ISDA Board of Directors
Eurex
Three new directors join the board of the International Swaps and Derivatives Association (ISDA), among them Erik Tim Müller, CEO of Eurex Clearing. “ISDA works hard on making the global derivatives markets safer and more efficient. I am looking forward to contributing to this important work”, says Müller.
bit.ly/2Kp0AYr

A former trader connects young professionals to charitable boards
Jeanhee Kim- Crain’s New York
What do millennials want? Rhoden Monrose, 32, a former Wall Street trader, says it’s to make a difference in the world. To that end, in 2016 Monrose launched Cariclub, an online platform to engage high-performing professionals in volunteer work on nonprofit junior boards.
bit.ly/2KtNf15

Carbon Surges to 10-Year High as Supply Glut Begins to Subside
Mathew Carr – Bloomberg
EU cut volumes to revive market as a tool to reduce pollution; Fewer permits sold expected to tighten secondary market
Carbon pollution allowances soared to their highest level since 2008 after the European Union’s move to ration supply stoked concern that a shortage will unfold in the months ahead.
/bloom.bg/2KpBpVS

Speed Bumps: Anti-Latency Arbitrage Mechanisms Make Markets Better
Matt Clarke, XTX – TABB Forum
Clearly, certain market participants are willing to go to great lengths and considerable cost to gain the ultimate speed advantage. But there are occasions when latency arbitrage activity has a negative effect on outcomes for long-term investors, and, as such, it may be beneficial to curb this activity through implementation of thoughtfully designed anti-latency arbitrage mechanisms.
bit.ly/2UtD4y9

Financial Transaction Taxes – The Ghost in the Machine
Matt Hurd – Tabb Forum
The existing Financial Transaction Tax on publicly traded US equities raised a little under US$2 billion last year. And yet, it is seen to be politically popular to demonize the Wall Street caravan by suggesting ludicrous taxation schemes at unrealizable levels. Far from building a wall around Wall Street to protect the public, such taxes will simply make the US inefficient and push transactions offshore.
bit.ly/2KvsLVN

CDS: A Parable About How Smart Contracts Can Be Pretty Dumb
Streetwise Professor
In my derivatives classes, here and abroad, I always start out by saying that another phrase for “derivative” is contingent claim. Derivatives have payoffs that are contingent on something. For most contracts – a garden variety futures or option, for example – the contingency is a price. The payoff on WTI futures is contingent on the price of WTI at contract expiration. Other contracts have contingencies related to events. A weather derivative, for instance, which pays off based on heating or cooling degree days, or snowfall, or some other weather variable. Or a contract that has a payoff contingent on an official government statistic, like natural gas or crude inventories.
bit.ly/2Ur2eh0

U.S. Oil on The Auction Block
CME Group OpenMarkets
The U.S. shale revolution has turned the global energy markets upside down. The U.S. has become one of the largest oil producers on the planet and is fast becoming a major force in the export market.
bit.ly/2UqPQxz

There’s ‘never been a better time’ to be a whistleblower in America
Meera Jagannathan, Marketwatch
On Aug. 22, 2001, Enron vice president Sherron Watkins presented CEO Ken Lay with documents and a summary of facts regarding the Houston-anchored energy company’s accounting problems. The scandal would eventually bring down Enron.
/nyp.st/2KtG8Wx

Exchanges, OTC and Clearing

Nasdaq increases stake in Norway’s Oslo Bors
Reuters
U.S. stock market operator Nasdaq Inc said on Thursday it has increased its stake in Norway’s Oslo Bors VPS with a purchase of 844,071 shares in the Norwegian bourse.
/reut.rs/2KtGtbF

Nasdaq announces purchases of shares in Oslo Børs VPS
GlobeNewswire
Nasdaq, Inc., announced today that it has purchased 844,071 shares in Oslo Børs VPS. The acquisitions are made in line with the terms of the offer set forth in the offer document published on February 4, 2019, as amended by announcements of March 4 and 25, 2019.
bit.ly/2KtGz37

ICE Benchmark Administration Publishes an Update Regarding the U.S. Dollar ICE Bank Yield Index
Intercontinental Exchange
Intercontinental Exchange, Inc., 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 an update regarding the U.S. Dollar ICE Bank Yield Index.
bit.ly/2Gf1wuD

Growing Volume of eNotes Signals Surge In Digital Mortgages, according to MERSCORP Holdings, Inc. (MERS); MERS reports that total number of eNotes originated in Q1 surpassed all of last year’s production
ICE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, and its subsidiary MERSCORP Holdings, Inc. (“MERS”) today announced that the number of eNotes added to the MERS® eRegistry during the first quarter of 2019 exceeded the total number of eNotes registered for all of 2018. An electronic note, or eNote, is the functional equivalent of a paper promissory note when created in conformity with eCommerce law requirements, and upon origination, is registered on the MERS® eRegistry.
bit.ly/2KreHwt

Eurex Exchange – Equity Index Highlights – April 2019 edition
Eurex
bit.ly/2KzdhjQ

Eurex Exchange – Fixed Income Highlights – April 2019 edition
Eurex
bit.ly/2KsJadN

Amendments to the Clearing Conditions and other documents of Eurex Clearing AG – End of Consultation
Eurex
As announced and further explained in Eurex Clearing circular 025/19, Eurex Clearing proposed changes and amendments to introduce third party account holders for CBF accounts which are provided to Eurex Clearing by way of title transfer and conducted a Consultation under the Clearing Conditions:
bit.ly/2KvfSen

Top 20 Firms Collected Nearly $160 Billion in Initial Margin at Year-End 2018, Survey Finds
ISDA
ISDA has published its latest margin survey, which shows the amount of initial margin (IM) collected by the 20 largest market participants for their non-cleared derivatives trades continued to rise in 2018.
bit.ly/2KnHT7C

LCH discounting switch tipped to help SOFR swap market; Isda AGM: Using SOFR discounting for Libor swaps will help build liquidity, say market participants
Chris Davis – Risk.net
LCH’s plan to adopt the US secured overnight financing rate (SOFR) as the benchmark to value cleared swaps and pay interest on cash collateral will boost SOFR swap use, but clarity on fallback language is needed for the market to prosper, market participants say.
bit.ly/2KtGcp9

Notice to Investors on Ten Consecutive Non-business Days at Tokyo Stock Exchange and Osaka Exchange
JPX
The markets operated by Tokyo Stock Exchange, Inc. (TSE) and Osaka Exchange, Inc. (OSE) will be closed for ten consecutive days from April 27, 2019 (Sat.) to May 6, 2019 (Mon.). Please be advised that investors will not be able to trade stocks, derivatives, and other listed products at TSE and OSE during the 10-day period, and that due to the condition of the overseas market during the 10-day period and the occurrence of internal and external events, the domestic market after the consecutive holidays may be affected, resulting in changes in trading volume and price.
bit.ly/2KvgCAb

NZX recognised as Designated Offshore Securities Market
NZX
NZX has been recognised as a Designated Offshore Securities Market (DOSM) by the United States Securities Exchange Commission.
bit.ly/2Gf4csb

Fintech

FIS Named a Best Place to Work for LGBTQ Equality for Second Straight Year
FIS
FIS (FIS), a global leader in financial services technology, announced that it has been named a “Best Place to Work” for lesbian, gay, bisexual, transgender and queer (LGBTQ) equality by the Human Rights Campaign Foundation. It was the second straight year that FIS received this designation.
bit.ly/2KqILbu

****FIS will report Q1 earnings on April 30th.

Wall Street banks are turning their back on tech talent, again
eFinancialCareers
Before Amazon pulled out of its deal to make New York City home to its second headquarters, there were murmurs over whether investment banks could compete locally against tech giants in the recruiting war over engineers and developers. It appears that may not have really mattered anyway, at least in the short-term. The number of tech-related job openings at investment banks based in New York has plummeted over the last half-year.
bit.ly/2Kp8rVY

Global Business Value Of Artificial Intelligence In Banking To Reach $300 Billion By 2030, IHS Markit Says
Mondovisione
Artificial intelligence (AI) is revolutionizing the banking sector by detecting fraud in financial transactions on the basis of a pre-defined set of rules. In 2018 AI in banking business was estimated to be $41.1 billion, which includes the cost savings and efficiencies of introducing AI technology compared to keeping existing infrastructures and processes.
bit.ly/2KsvXS3

Morgan Stanley hired an expert in ‘conversational AI’
eFinancialCareers
As demand for old-fashioned sales talent dwindles, banks are hiring a new type of person to help interface with customers and clients: someone who can create chatbots.
Morgan Stanley has recruited an artificial intelligence (AI) and machine learning expert to lead its chatbot team in New York City. Georg Huettenegger joined the bank’s NY office as an executive director earlier this month. Huettenegger will head the rollout of chatbots across the U.S. bank.
bit.ly/2Kql8zO

Maven Wave Named 2018 Google Cloud North America Services Partner of the Year
Maven Wave
Today, Maven Wave is thrilled to announce that the company has been named the 2018 Google Cloud North America Services Partner of the Year, making it the only Google Cloud Partner to have earned that title two years in a row.
bit.ly/2KqzqAK

WealthManagement.com Partners With YCharts To Bring Visuals and Data To Readership
BusinessWire
YCharts, a modern investment research platform that enables smarter investments, and WealthManagement.com, a leading resource for wealth advisors and planners, today announced a partnership in which WealthManagement.com’s editorial staff will utilize YCharts’ suite of data, tools, and visuals to better serve the publication’s nearly 1 million unique monthly readers.
bit.ly/2KrQRRj

Small Banks Rebel Against the Most Important Tech Firms You Have Never Heard Of; Community lenders worry about losing customers to big rivals. They say their tech providers aren’t always helping.
Telis Demos and Rachel Louise Ensign – WSJ
Lead Bank, a community lender in Kansas City, Mo., wanted to offer the payments app Zelle to its customers.
/on.wsj.com/2KvPu46

Nordic Capital acquires digital identity and oboarding pioneer Signicat
Finextra
Nordic Capital has acquired Norwegian digital identity outfit Signicat with the objective of expanding its ID assurance and digital onboarding toolbox into new international markets.
bit.ly/2KHxJ23

Cryptocurrencies

Venture Capitalist Draper to Meet With Facebook on Crypto Fund
Olga Kharif and Julie Verhage – Bloomberg
Venture capitalist Tim Draper is planning to meet with Facebook Inc. to discuss investing in the social network’s cryptocurrency project. “I am interested to hear the story,” Draper said in an email to Bloomberg News. “We will see if it is a fit.” Draper, 60, isn’t the only one meeting with the social network as it seeks to raise as much as $1 billion for the initiative, which wants to create a digital coin to be used within one of its apps.
/bloom.bg/2U6Diq8

Lawmakers Reintroduce Bill to Exempt Crypto Tokens From US Securities Laws
Nikhilesh De – Coindesk
Lawmakers are making a fresh attempt to give cryptocurrencies a clearer legal standing in the U.S. U.S. Representative Warren Davidson reintroduced the Token Taxonomy Act on Tuesday, saying in a statement that the bill, if approved by Congress and signed into law, would “send a powerful message” to innovators that “the U.S. is the best destination for blockchain technology.” The bill, first introduced last year by Reps. Davidson and Darren Soto, seeks to exempt certain cryptocurrencies and other digital assets from federal securities laws, allowing individuals to more easily trade or transact with select coins.
/bit.ly/2D08hyn

China’s New Policy Isn’t An Automatic Bitcoin Mining Ban – Here’s Why
Wolfie Zhao – Coindesk
A draft proposal from China’s economic planning commission labels bitcoin mining as an industry that needs to be “eliminated.” But even if finalized in its current form, this would not automatically amount to an outright mining ban. While local governments are supposed to follow the commission’s guidance, to take action against an industry they need a basis in the laws of the state, not industrial policy.
/bit.ly/2KpZdc5

Christine Lagarde Pits Circle Against JPMorgan in IMF Debate
Brady Dale – Coindesk
A panel Wednesday featuring JPMorgan and Circle was set up by Christine Lagarde as a face-off between incumbent and disruptor. The managing director of the International Monetary Fund designated roles for each person on her panel of four. In the incumbent corner: two regulators and JPMorgan. In the other: crypto fintech company Circle. The topic: “Money and Payments in the Digital Age.”
/bit.ly/2ULFUOA

$60 Million and Rising: China’s Crypto Funds Try Lending to Beat Bear Market
Wolfie Zhao – Coindesk
Crypto investment firms in China have turned to lending for a steady revenue stream to get through the bear market, including Bixin Capital, FBG Capital and Dong Zhao’s DGroup. Each of these firms currently holds about $15 million worth of outstanding loans originated over the last five months.
/bit.ly/2InZc5T

Coinbase launches cryptocurrency Visa debit card in UK; US company partners with Apto Payments to allow customers to make purchases directly from accounts
Martin Coulter – FT
Coinbase, a cryptocurrency exchange, has launched a new Visa debit card in the UK, allowing customers to make purchases and cash withdrawals directly from their accounts.
/on.ft.com/2UMKxHX

Six Questions for Binance’s CEO on Initial Exchange Offerings
Olga Kharif – Bloomberg
Initial Exchange Offerings are the latest twist on fundraising in the digital-asset world, with the online exchange Binance at the forefront. Zhao Changpeng, the co-founder and chief executive officer of the world’s largest crypto trading platform who goes by CZ, comments on the embryonic process.
/bloom.bg/2Kpq87W

Tata Settles Securities Between National Depositories on a Blockchain
Yogita Khatri – Coindesk
India’s second largest firm by market valuation has completed a blockchain trial of cross-border securities settlement between two central securities depositories (CSDs).
bit.ly/2KsEZ1A

Edward Woodford – Seed CX, Regulation, and the Conditions for Success
Evan Engel – Coindesk
Seed CX co-founder Edward Woodford joins host Nolan Bauerle to discuss market data, manipulation, and fair markets.
bit.ly/2KsnWwE

Blockstack Files With SEC to Raise $50 Million in Reg-A+ Crypto Token Sale
Pete Rizzo – Coindesk
Blockstack, the New York-based blockchain software provider launched in 2017 to create the infrastructure for a decentralized internet, has announced it intends to raise $50 million in a token sale that would leverage the SEC’s Regulation A+ crowdfunding exemption.
bit.ly/2KpKzSc

Politics

Trump Defends Herman Cain for Fed Board
Rebecca Ballhaus and Paul Kiernan – WSJ
President Trump praised his latest pick for the Federal Reserve Board, Herman Cain, a day after Senate Republicans voiced doubts about the prospect of confirming him.
/on.wsj.com/2KrejON

GOP Senators Pulling Support for Trump’s Choice of Herman Cain for Fed
Steven T. Dennis and Laura Litvan – Bloomberg
At least three Republican senators said they won’t back President Donald Trump’s choice of Herman Cain for the Federal Reserve Board, putting his prospective nomination in danger as the president suggested Wednesday he won’t put up a fight.
/bloom.bg/2KseRDZ

AOC disses Jamie Dimon after Green New Deal criticism
Bob Fredericks – NY Post
Rep. Alexandria Ocasio-Cortez fired back at JPMorgan Chase CEO Jamie Dimon Wednesday after he criticized the Green New Deal — asking why no top bankers were busted following the 2008 economic collapse when fare beaters she represents can wind up behind bars.
/nyp.st/2KvfBYT

Former Fed Chief Yellen Offers a Warning to Trump’s Latest Central Bank Picks; ‘A couple of individuals will find it difficult who come with a political view, to have a great deal of influence’
Michael S. Derby – WSJ
Former Federal Reserve Chairwoman Janet Yellen sent an indirect warning to two potential Trump central bank picks, saying if they want to be relevant, they will need to check their politics at the door before entering the institution.
/on.wsj.com/2KptbwU

Big-Bank Chiefs, Democrats Spar at House Hearing; CEOs quizzed on topics including safety, Russia and gun-industry ties
Andrew Ackerman and Lalita Clozel – WSJ
The heads of seven of the largest U.S. banks sparred with House Democrats on Wednesday, arguing the financial system is now much safer than during the last joint testimony a decade ago in the depths of the crisis.
/on.wsj.com/2UVgRc1

What happened to the bank chiefs hauled to Capitol Hill?; Of the 8 who testified before Congress in 2009 only one remains in his job
Claire Manibog and Tom Braithwaite – FT
Chief executives of big US banks are testifying before the House financial services committee on Wednesday in a hearing on “holding megabanks accountable” a decade after the financial crisis.
/on.ft.com/2UU2apC

U.S. puts 37 Chinese companies and schools on red-flag ‘unverified’ list
Diane Bartz, Karen Freifeld – Reuters
The U.S. Commerce Department said on Wednesday that is adding 37 Chinese companies and schools to a red-flag list of “unverified” entities that U.S. companies should treat with caution, according to a notice in the Federal Register.
/reut.rs/2KpIxkV

U.S. lawmakers grill bank CEOs on social issues
Imani Moise, Elizabeth Dilts – Reuters
Chief executives of some of the largest U.S. banks faced off with the House Financial Services committee for the first time since the financial crisis on Wednesday armed with the healthy balance sheets, but lawmakers grilled executives more on social issues than business fundamentals.
/reut.rs/2KnTovT

Bank CEOs Grilled by Congress as Blankfein Quips From Afar
Michelle Davis, Jennifer Surane and Austin Weinstein – Bloomberg
A decade after the financial crisis, the chiefs of the largest U.S. banks faced a grilling from lawmakers on everything from income inequality to their ties to politically controversial industries.
/bloom.bg/2KtjXQo

Regulation

TFS-ICAP’s former Global Head of Emerging Markets broking argues against CFTC complaint; Jeremy Woolfenden insist the complaint against him has to be dismissed for lack of personal jurisdiction.
Maria Nikolova – FinanceFeeds
Shortly after Jeremy Woolfenden, former Global Head of Emerging Markets broking at TFS-ICAP, made clear his intentions to move to dismiss the case against him brought by the United States Commodity Futures Trading Commission (CFTC), the defendant has submitted a Letter with the New York Southern District Court detailing his arguments on why the case against him has to be nixed for lack of personal jurisdiction.
bit.ly/2Ks8tfZ

Tribunal upholds FCA fine for DFM
Dippy Singh – FT Adviser
The Upper Tribunal has upheld a £409,300 fine imposed by the Financial Conduct Authority on a wealth and discretionary fund manager for failing to make sure market abuse could be detected and reported.
bit.ly/2Kvh5Cr

Some AFS licensees may be breaking overseas laws
ASIC
Australian financial service (AFS) licensees that offer OTC derivatives to retail investors located in some overseas jurisdictions may be providing unlicensed or unauthorised services in those jurisdictions.
bit.ly/2KsIjK2

Hedge fund slammed over $6.8B in unpaid taxes seeks deal with IRS: report
Carleton English – NY Post
RenTech’s flagship Medallion fund was determined to have avoided up to $6.8 billion in taxes over a 15-year period by the Senate’s Permanent Subcommittee on Investigations in 2014.
/nyp.st/2KsCcVS

UK regulator to tighten entry tests for energy suppliers
Reuters
Britain’s energy market regulator Ofgem said on Thursday it will introduce new, stricter tests for energy suppliers entering the market from June after several firms collapsed.
/reut.rs/2KpK22x

Investing and Trading

5 Questions with Options Trader Adam Webb
Brian Mehta – Trading Technologies
Adam Webb began his trading career in the mid-’90s, working on the London FX spot desk at Goldman Sachs. By 2002, he was running one of the world’s top global exotic options books. Adam left Goldman in 2004 to set up a small boutique market making business focused entirely on exchange-listed options products, and he has been running that business ever since. Adam recently moved to the TT platform and is using the Advanced Options Package. You can contact Adam though his Macrohedged website and follow him on Twitter at @macrohedged.
bit.ly/2KsOEFp

Investors must play a bigger part in the world’s energy transition; Decarbonisation is the primary challenge over meeting new demand
Anton Eser and Nick Stansbury – FT
Financing the energy transition has been described as a problem of dual challenges for global capital markets.
/on.ft.com/2UOs65O

This Little Piggy Isn’t Going to Market
S&P Dow Jones Indexology Blog
Even eagle-eyed commodities investors might be surprised to learn that lean hogs have been one of the best-performing individual commodities so far in 2019. As of April 5, 2019, the S&P GSCI Lean Hogs was up an impressive 19.5% since the beginning of the year, outperforming the broad S&P GSCI (up 18.4%), and up 46% since Feb. 20, 2019.
bit.ly/2KpwYKy

Carbon prices across the EU soar to post-crisis high; Higher gas prices put upward pressure on allowances bought by polluters
Leslie Hook and David Sheppard – FT
European carbon prices hit a 10-year high on Wednesday, driven by higher natural gas prices, the rising chance of a Brexit delay, and rules that crimp the supply of emissions allowances that polluters can buy.
/on.ft.com/2UKvfnh

Trafigura accused of gaining unfair edge in Zimbabwe fuel trade; Politicians allege commodity trader benefits from favourable access to key pipeline
Joseph Cotterill and David Sheppard – FT
Trafigura, the global commodities trader, is facing accusations that it used a partner’s connections to Zimbabwe’s ruling party to gain an unfair advantage in the supply of fuel to the southern African nation.
/on.ft.com/2UIJLvP

Climate Group With $32 Trillion Pushes Companies for Transparency; Climate Action 100+ believes companies should detail exactly how climate change will affect their businesses so shareholders can decide which to support.
Kelly Gilblom – Bloomberg
A group of Royal Dutch Shell Plc executives sat in a conference room in the company’s Hague headquarters in November. On the other side of the table were representatives for two small shareholders: the pensions board of the Church of England and Dutch fund manager Robeco Institutional Asset Management BV. The leaders of Europe’s largest energy company realized that after months of argument, they’d lost.
/bloom.bg/2KrA7cX

A Black Hole Is Swallowing Global Bond Yields; A worldwide debt rally leads financial commentary.
Robert Burgess – Bloomberg
An astrophysicist who worked on the Event Horizon Telescope project that released the first image of a super-massive black hole said “it feels like looking at the gates of Hell, at the end of space and time, the point of no return.” That also sounds like an apt description of the bond market these days.
/bloom.bg/2KsKXiI

There Are Huge Objects That Swallow Energy, Galaxies and Money; One exists in outer space. The other lives on Wall Street.
Mark Gongloff – Bloomberg
Today humanity got its first real look at a black hole, a super-massive object that sucks all light and matter into its maw, never to be seen again. Also known as the derivatives market! I’ll be here all week, folks.
/bloom.bg/2KtKf4V

Why Routine Stock-Market Declines Make Investors Crazy; Many of us are sure disaster awaits, even though that almost never happens.
By Barry Ritholtz – Bloomberg
The psychology surrounding stock-market declines and recoveries is fascinating. Anytime markets retreat even a little bit, the noise surrounding the event begins to swell. Given how frequently markets twist and turn, you might expect people would be used to the occasional plunge by now.
/bloom.bg/2Kt0bEC

Institutions

After criticizing the idea, Vanguard to launch low-cost commodities mutual fund, but it ain’t for Mom-and-Pop investors
Erin Arvedlund – Philly Inquirer
Local mutual fund giant Vanguard will launch an extremely low-cost commodities mutual fund, but the minimum investment is $50,000.
That’s not generally aimed at retail investors — and there are good reasons why.
bit.ly/2UqsAzA

U.S. grain trader ADM says to seek early retirements, may cut jobs
Tom Polansek – Reuters
U.S. grain trader Archer Daniels Midland Co said on Wednesday it will seek voluntary early retirements by some North American employees and may eliminate individual jobs as part of a restructuring of specific areas.
/reut.rs/2KqChJG

Julian Robertson Jr.’s Best Bet Ever?
Stephen Taub – Institutional Investor
When Julian Robertson Jr.’s legendary hedge fund, Tiger Management, shut down in 2000, one of its analysts, Chase Coleman, got a slug of cash from his mentor to start his own firm, Tiger Global Management.
That turned out to be arguably one of the best investments Robertson ever made.
bit.ly/2Kr6kkG

Vanguard to Take Tougher Stance Against Overextended Board Members; The index-fund giant is preparing to issue updated proxy-voting guidelines
Cara Lombardo and Dawn Lim – WSJ
Vanguard Group is taking a tougher stance against companies whose board members it believes are stretched too thin.
/on.wsj.com/2Kpto3a

Goldman Sachs has a fix for fixed income trading; Under new chief David Solomon, the bank is overhauling its sputtering profit engine
Laura Noonan – FT
In the aftermath of the financial crisis, as most trading houses licked their wounds and put safety before sales, Goldman Sachs chose a different path.
/on.ft.com/2KusJO7

Nomura Sinks Faster Than Deutsche Bank as Shareholders Flee
Takashi Nakamichi – Bloomberg
The stock is valued at a record discount versus global peers; Investors are skeptical of Nomura’s latest turnaround plan
Nomura Holdings Inc.’s latest attempt to revamp its international business is falling flat with investors, who’ve never been so downbeat on the stock relative to global peers.
/bloom.bg/2KrtKGz

Regions

Chinese brokerage giant seeks to raise US$1.25 billion in Hong Kong’s largest IPO this year
Laura He – South China Morning Post
Shenwan Hongyuan, China’s sixth largest securities firm by market value, is seeking to raise as much as US$1.25 billion in Hong Kong’s largest IPO this year to replenish its capital and expand internationally.Shenwan, already listed on the Shenzhen Stock Exchange, is set to become the 12th Chinese brokerage firm with dual listings in Hong Kong and mainland markets.The firm, controlled by state-owned Central Huijin Investment, plans to sell 2.5 billion shares priced between HK$3.63 and HK$3.93…
bit.ly/2KsHzV2

How the World Economy Became a China Property Play; The Chinese housing market is picking up, likely boosting growth in Japan and Germany
Mike Bird – WSJ
There are signs of life in China’s property market. Even those without exposure to Chinese assets will feel the warmth.
/on.wsj.com/2KB0AFc

HSBC Turkey CEO Acquitted on Charge of Insulting Erdogan
Asli Kandemir – Bloomberg
Banker says that case is an assault on his reputation, career; Turkey has cracked down on dissent since protests in 2013
The chief executive officer of HSBC Holdings Plc’s Turkish unit was acquitted over allegations that he insulted President Recep Tayyip Erdogan during anti-government protests nearly six years ago.
/bloom.bg/2KAVSHw

Short Sellers Wait and Wait and Wait for Canadian Banks to Sink
Doug Alexander and Natalie Wong – Bloomberg
Falling home prices, rising debt are arguments against lenders; Latest ‘Great White Short’ has yet to pay off as shares rise
Canadian households are wallowing in debt. Home prices are falling. Credit growth, the key driver for bank earnings, is hovering close to its slowest pace since 1983. All of which should be bad news for the country’s lenders — and good news for investors betting against them. “Should” being the operative word.
/bloom.bg/2KvMG74

‘Fiscal Boy Scout’ Quebec Offers Lessons for Debt-Laden Neighbor
Sandrine Rastello – Bloomberg
Quebec’s balanced budgets contrast with Ontario’s deficit run; Surplus last year was largest since at least the 1970s
For tips on how to end a streak of budget deficits, Ontario needs to look no further than its eastern neighbor.
/bloom.bg/2Ksvmjs

Swiss Banker Guilty of Corporate Espionage for Leaking Data on Tax Dodge
Hugo Miller – Bloomberg
Banker found guilty of one count of corporate espionage; Lawyer, second banker guilty of lesser Banking Act violation
A Zurich court convicted a former employee of Bank J. Safra Sarasin AG of one count of corporate espionage for leaking internal documents about a controversial tax deal.
/bloom.bg/2KvaibV

Czech Billionaire Accused of $1 Billion Fraud by New York Hedge Fund
Erik Larson – Bloomberg
Kingstown Capital alleges racketeering scheme by Radovan Vitek; Suit cites ‘screaming arguments’ at meetings as part of ruse
A Czech billionaire known as the largest commercial property landlord in Berlin was sued for allegedly defrauding a New York hedge fund and a Czech investment firm of more than $1 billion.
/bloom.bg/2KpBZ5W

Brexit

Why the EU is divided over Britain’s Brexit date; Tactical calculations, political ties and no-deal risk all play parts in decision
Alex Barker, Mehreen Khan and Jim Brunsden – FT
What is in a date? When Europe’s leaders set Britain’s new deadline for leaving the EU — a decision they are due to take on Wednesday evening — it will be more than simple housekeeping.
/on.ft.com/2KCcEFQ

UK businesses ignore paperwork needed for no-deal Brexit; Only a third of companies whose foreign trade is only with EU register for customs ID number
Laura Hughes – FT
Less than a third of British companies whose overseas trade is exclusively with the EU have applied for the paperwork required in a no-deal Brexit, partly because of doubts that such an exit would happen.
/on.ft.com/2KpqhZ2

The City Thinks an ‘Awkward’ Brexit Extension Could Push Out Theresa May
Kasper Viita and Lisa Pham – Bloomberg
British Prime Minister Theresa May’s task to sell the extended Brexit deadline to MPs will be a tough one and could lead to attempts to replace her, market strategists say after last night’s negotiations in Brussels. The six-month extension could support the pound and U.K. stocks with softer departure options or even the possibility of ending the separation plans via a referendum, with the focus now turning to domestic politics. FTSE 100 futures point to a flat open, with the sterling little changed.
/bloom.bg/2KuqXfV

Brexit Delayed to End of October as Macron Plays Hardball
Ian Wishart , Tim Ross , and Jonathan Stearns – Bloomberg
Compromise deadline of Oct. 31 reached after late-night summit; European diplomats suggest more extensions could follow
Brexit is on course to be delayed until the end of October under a plan to avoid a chaotic no-deal split, risking six more months of political uncertainty over Britain’s ties to the European Union.
/bloom.bg/2Kuljuf

Macron Gets on Everyone’s Nerves With Brexit Tough Guy Act
Viktoria Dendrinou , Milda Seputyte , Helene Fouquet , and Ian Wishart -Bloomberg
EU leaders agree to extend Brexit deadline until Oct. 31; French leader fights to shield EU business from Brexit process
Theresa May dined apart from the other European leaders on Wednesday night, as has become her standard treatment at recent summits.
/bloom.bg/2Kpjvm4

Miscellaneous

Farmers dip toes into global crop insurance platform
Nigel Hunt – Reuters
Farmers can now for the first time insure their produce against price volatility as easily as insuring their homes, with a global platform based on hundreds of niche commodity indexes, underwritten by Lloyd’s of London syndicate Ascot.
/reut.rs/2KuwSkU

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