Hits & Takes
Congratulations to Stacey Cunningham, who will become the NYSE’s first female president on Friday. She spoke at our MarketsWiki Education event in New York in 2015.~JK
RCM Alternatives has done an autopsy on LJM, whose Preservation and Growth Mutual Fund, LJMIX, was decimated by the market action on February 6.~JJL
The CME Institute is having a U.S. Treasury Futures simulated trading competition starting June 10 at 5 p.m. Central Time. The top three finishers will receive “up to $2,500 in prizes.” You can go here for the rules and to register.~SR
CAIA is holding a live training half-day event on June 5 at the CME Group headquarters focused on hedge funds and commodities, for $150. For more details, Click HERE.~JJL
I signed up for a free subscription to the Global Commodities Applied Research Digest (GCARD). If you click on this LINK and spin around three times you can also subscribe for free. The digest is edited by a woman named Hilary who likes to take long walks in the woods. Not that one.~JJL
Should we be worried? Google Removes ‘Don’t Be Evil’ Clause From Its Code of Conduct~JB
The Options Industry Leader Series 2018 – Cboe’s Andy Lowenthal
Brought to you by the OCC
In this video from the 36th annual Options Industry Conference (OIC) in Amelia Island, Fla., Andy Lowenthal, Cboe executive vice president and co-head of markets, talks about transitioning Cboe’s exchanges to Bats technology, the plan for more crypto offerings, and bringing the industry together to focus on market structure issues.
Watch the video here »
The Old Allure of New Money
Robert J. Shiller – Project Syndicate
Practically no one, outside of computer science departments, can explain how cryptocurrencies work, and that mystery creates an aura of exclusivity, gives the new money glamour, and fills devotees with revolutionary zeal. None of this is new, and, as with past monetary innovations, a seemingly compelling story may not be enough.
***** Ignoring Shiller is ignoring history.~JJL
Monday’s Top Three
As a cyclist, commuting for more than 20 years in Chicago, I can say that the ride has gotten safer over the years, but still has a long way to go. Our condolences to the family of Cian Burke, who died in a cycling accident. Be safe out there riders and drivers. Global Custodian’s piece HSBC Securities Services global head Cian Burke dies in cycling accident was our second most read story of the day. Our top read story is also serious, Bloomberg’s Brokers’ Offices Are Sexual Harassment Cases Waiting to Explode. Third was of a curious nature, the Daily Mail’s World’s first floating nation with its own government and cryptocurrency to launch by 2022. It looks more like a harbor than a nation, but you can always add on, I guess.
126,456,104 pages viewed; 23,121 pages; 213,128 edits
New York Stock Exchange to Have First Female Leader in 226-Year History; Stacey Cunningham, the NYSE’s chief operating officer, is set to become the Big Board’s 67th president
Bradley Hope and Alexander Osipovich – WSJ
The New York Stock Exchange is set to get its first female leader in its 226-year history. Stacey Cunningham, the NYSE’s chief operating officer, will become the Big Board’s 67th president, the exchange’s parent Intercontinental Exchange Inc. told The Wall Street Journal. She will start her new role Friday, succeeding Thomas Farley, an ICE veteran who is leaving the Atlanta-based company.
***** Here is the FT’s version of the story.~JJL
How to Launch Cryptocurrency Derivatives: CFTC Issues New Guidance; Regulator provides best practices in response to industry concerns
Gabriel T. Rubin – WSJ
The top U.S. derivatives regulator on Monday provided guidance to exchanges and clearinghouses that want to list cryptocurrency products, responding to industry concerns about the vetting process for new derivatives contracts like bitcoin futures.
***** Here is the CFTC press release.~JJL
Citi clears first buy-side SONIA trade on CurveGlobal; CurveGlobal launched three-month Sterling Overnight Index Average (SONIA) futures earlier this year.
Hayley McDowell – The Trade
Citi has cleared the first buy-side SONIA trade on the London Stock Exchange Group’s Interest rate derivatives platform CurveGlobal.
SGX sued by Indian stock exchange ahead of futures launch; Singapore Exchange plans to launch new Indian equities futures products in June.
Hayley McDowell – The Trade
Singapore Exchange (SGX) has entered into a legal battle with the National Stock Exchange of India (NSE) weeks before launching its new Indian equities futures products.
****Financial Times here.
Despite NSE’s legal move, SGX to go ahead and launch Indian derivatives
Singapore Exchange Ltd (SGX) said it plans to list new India-related equity derivative products in June despite the National Stock Exchange of India (NSE) applying for an interim injunction in a Mumbai court against their launch.
Financial Crisis May Have Hit ’80s Generation the Hardest; Fed research finds wealth levels 34% below what they would be if the last recession hadn’t occurred for those born in the ’80s
Michael S. Derby – WSJ
The children born into Ronald Reagan’s “Morning in America” era could be on track to become the last recession’s “lost generation,” new research from the Federal Reserve Bank of St. Louis says. Americans who entered the world in the 1980s “are at substantial risk of accumulating less wealth over their life spans than the members of previous generations,” the report’s authors say.
Nex welcomes market volatility but deepens cost cuts
Philip Stafford – FT
Nex Group, the trading and technology company run by Michael Spencer, has further deepened its cost-cutting to meet long-term profit targets even as it received a boost from renewed volatility in its markets.
Fifth Third Signals Resurgence of Banker Confidence; Bank’s deal to acquire a small Chicago lender shows that banking sector is back in growth mode
Aaron Back – WSJ
Fifth Third Bancorp ‘s $4.7 billion deal to acquire small Chicago-based lender MB Financial is a sign that positive animal spirits have returned to the banking world. Investors should expect many more mergers and acquisitions.
Exchanges, OTC and Clearing
A woman will lead the New York Stock Exchange for the first time in its 226-year history
Frank Chaparro – Business Insider
The parent company of the New York Stock Exchange has named a new president to lead the iconic Wall Street institution, a spokeswoman confirmed to Business Insider.
****The Trade here and Reuters here.
Intercontinental Exchange Names Stacey Cunningham as New President of NYSE Group; Cunningham Succeeds Thomas Farley as head of the New York Stock Exchange; John Tuttle promoted to Chief Operating Officer of NYSE Group
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Stacey Cunningham will become President of NYSE Group, succeeding Thomas Farley, who has served in that role since 2014. Cunningham, currently the Chief Operating Officer of NYSE Group, began her career as a floor clerk on the NYSE trading floor in 1996 and will now become the 67th President of the New York Stock Exchange in its 226-year history.
Nasdaq Dubai bourse says to launch future contracts on Saudi firms in 2018
The Nasdaq Dubai exchange plans to launch futures contracts this year on companies listed on the Saudi Arabian stock market, the Middle East’s largest, the bourse said on Monday.
Update on SGX India Derivatives
SGX has been notified by the National Stock Exchange of India (NSE) of an application made in the Bombay High Court for an interim injunction on our new products.
Biggest India Stock Exchange Sues Singapore Bourse
Andrea Tan and Santanu Chakraborty – Bloomberg
National Stock Exchange of India seeks interim injunction; Singapore Exchange says it has confidence in legal position
The National Stock Exchange of India Ltd. sued Singapore Exchange Ltd. in a Mumbai court, escalating a dispute that threatens to leave international investors without one of the world’s most widely used offshore futures contracts.
Blackstone and Goldman sell data provider for $1.9bn; IHS Markit buys Ipreo in bid to compete with Thomson Reuters and Bloomberg
Philip Stafford and Cat Rutter Pooley – FT
IHS Markit is to buy Ipreo, a fast-growing data provider, for $1.86bn from Blackstone and Goldman Sachs as part of a broad reboot for its financial services unit.
Cryptocurrency and a stock market boom pushes TradingView to $37 million in new funding Jonathan Shieber – TechCrunch
Fueled by last year’s greed-inducing visions of a cryptocurrency boom and a stock market largely untethered from classical economics, TradingView, a developer of social networking and data analysis tools for financial markets, has raised millions in new venture funding.
Chinese fintech’s global future is arriving now; Financial infrastructure is a strategic asset and regulatory challenge
The Chinese electronic payments industry is the most advanced in the world. It presents a challenge not just to western financial institutions, but to policymakers and regulators worldwide. These truths were understood already. Ant Financial’s recently closed $10bn fundraising, which pegged the value of the Chinese financial conglomerate at $150bn, merely puts a number to them
States Unveil Massive Cryptocurrency Investment Fraud Crackdown
Ted Knutson – Forbes
Operation Cryptosweep, a massive joint crackdown on Initial Coin Offerings and cryptocurrency-related investment products, was unveiled today by more than 40 U.S. state and Canadian provincial securities regulators.
Nearly 70 inquiries and investigations and 35 pending or completed enforcement actions since the beginning of May is just the tip of the iceberg for Cryptosweep, North American Securities Administrators Association President Joe Borg said.
The Blockchain International Standardization Organization: China Will Dominate
Marko Vidrih – Medium
At present, with the rapid development of global blockchain technology and industries, the problem of lack of standards is increasingly urgent. Therefore, domestic and international standards organizations have accelerated the standardization of blockchain. In September 2016, ISO, the world’s largest standardization organization, established the Blockchain and Distributed Accounting Technical Committee (ISO/TC 307) to promote the development of international standards in the field of blockchain and distributed bookkeeping technology.
U.S. and Canadian regulators open probes into cryptocurrency scams
Pete Schroeder – Reuters
U.S. and Canadian state securities regulators announced Monday they have launched dozens of investigations into cryptocurrency scams.
Exec of $5.1 Trln Investment Firm Makes Tired Comparison of Crypto to Tulips
Molly Jane Zuckerman – CoinTelegraph
The global chief economist of a major investment firm has criticized cryptocurrencies in an op-ed on investment fund news site ETF.com published yesterday, May 21.
Joe Davis, the global chief economist and global head of Vanguard Investment Strategy Group, stated that while blockchain technology shows promise, the rise of cryptocurrencies can be compared to the Netherlands’ 17th century “tulip mania,” a classic example of a bubble market.
Volatility: The Necessary Evil Of Cryptocurrency And How To Handle It
Darryn Pollock – CoinTelegraph
Part of what has cemented cryptocurrencies on the map since they exploded into the mainstream investor market has been their volatility. Investors flooded to the likes of Bitcoin when, through November and December 2018, the value of the cryptocurrency increased in value exponentially.
However, such volatility is a two-edged sword, and the cryptocurrency market has shown that in 2018 with Bitcoin’s price shedding more than 50 percent at times from its year end price of $13,000.
Bitcoin Could Be a Problem for U.S. Security Clearances
Daniel Flatley – Bloomberg
Pentagon must decide whether to flag cryptocurrencies as risky; Contractors are already frustrated by a backlog of clearances
As the Pentagon struggles to recruit a more tech-savvy workforce, it’s facing the confusion of many an old-timer: What to make of people who invest or trade in Bitcoin. The question is whether owning Bitcoins or lesser-known cryptocurrencies such as Ripple and Ethereum is an indicator of risky personal behavior — one that should flag extra scrutiny in security clearances — or just another investment choice.
Robert Shiller Warns Crypto May Be Another Cincinnati Time Store
By Ben Bartenstein and Camila Russo – Bloomberg
Cryptocurrencies could be the latest case of more than a century’s worth of failed efforts to revolutionize money, according to Robert Shiller, famed for his warnings about the dot-com and housing bubbles.
Japan’s Biggest Bank to Switch on Blockchain Payments in 2020
By ROBERT HACKETT – Fortune
Japan’s biggest bank has codeveloped a new blockchain, or distributed financial ledger, to boost the speed and lower the cost of payments.
Bitcoin could be just another failed currency experiment, Nobel-winning economist Robert Shiller warns
Kate Rooney – CNBC
Cryptocurrencies mirror some of the most famous failed currency experiments throughout history, according to Nobel-winning economist Robert Shiller.
Block Commodities And FinComEco Joint Collaboration Agreement With Ost To Unlock Consumer Goods, Education And Healthcare For African Farmers Utilising The Blockchain
Block Commodities Limited and Financial & Commodities Ecosystem (FinComEco), a subsidiary of GMEX Group Ltd, are pleased to announce a strategic partnership with OST, the complete blockchain toolkit for business.
Financial heavyweights pour scorn on bitcoin; Mark Mobius, Davide Serra, Martin Wheatley and Nick Leeson strongly critical of cryptocurrency
By Chris Newlands – Financial News
Some of the biggest names in finance have lambasted the bitcoin market and poured scorn on the meteoric rise of the digital currency, calling it one of the “greatest scams” in financial history.
Twitter Bots Helped Trump and Brexit Win, Economic Study Says
Jeanna Smialek – Bloomberg
Researchers in U.S., U.K. measure volume of automated tweets; Find that bots may have contributed to, even tipped, elections
Twitter bots may have altered the outcome of two of the world’s most consequential elections in recent years, according to an economic study. Automated tweeting played a small but potentially decisive role in the 2016 Brexit vote and Donald Trump’s presidential victory, the National Bureau of Economic Research working paper showed this month. Their rough calculations suggest bots added 1.76 percentage point to the pro-“leave” vote share as Britain weighed whether to remain in the European Union, and may explain 3.23 percentage points of the actual vote for Trump in the U.S. presidential race.
Mnuchin Urges Antitrust Probe of Tech After Google Report
Saleha Mohsin and David McLaughlin – Bloomberg
’60 Minutes’ highlights frequent Google critics in EU, U.S.; Treasury secretary speaks in CNBC interview early Monday
Treasury Secretary Steven Mnuchin urged the Justice Department to review the power that large technology firms such as Google have over the American economy, the latest U.S. official to back antitrust scrutiny of the industry.
Team Trump’s ‘deep state’ paranoia fans conspiracy theories; The president’s dark tweets get a wide audience ó but the US is no Turkey
Gideon Rachman – FT
In the classic comedy Carry on Cleo, Julius Caesar (as played by the late Kenneth Williams) utters the immortal lines: “Infamy, infamy, they’ve all got it in for me.” Something of the spirit of Williams’ Caesar seems to animate Donald Trump as he chunters angrily on Twitter about an alleged conspiracy against him.
Bank Deregulatory Bill to Become Law as Soon as This Week; House is expected to vote on Senate-approved legislation Tuesday
Andrew Ackerman and Ryan Tracy – WSJ
The House is expected Tuesday to vote on Senate-approved legislation aimed at easing the postcrisis financial rulebook. The bill represents the most significant bipartisan effort to relieve small and regional lenders from a number of restrictions tied to the 2010 Dodd-Frank financial-overhaul law.
Trump wounds but can’t kill Obama’s Wall Street rules
By VICTORIA GUIDA and ZACHARY WARMBRODT – Politico
President Donald Trump has made it his mission to undo as much of Barack Obama’s legacy as he can. But when it comes to dismantling his predecessor’s biggest legislative achievements, he’s 0-2 so far.
CFTC Staff Issues Advisory for Virtual Currency Products
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) today issued a joint staff advisory that gives exchanges and clearinghouses registered with the CFTC guidance for listing virtual currency derivative products.
Bankers Hate the Volcker Rule. Now, It Could Be Watered Down.
Emily Flitter and Alan Rappeport – NY Times
It was one of the most significant actions by the federal government to prevent a repeat of the financial crisis.
Statement of Commissioner Behnam on Staff Advisory With Respect to Virtual Currency Derivative Product Listings
Today, the Division of Market Oversight and the Division of Clearing and Risk issued a CFTC staff advisory regarding Virtual Currency Derivative Product Listings. I support and commend the staff, under the direction of the Chairman, for providing this advisory regarding the listing process.
CFTC, NASAA Sign Agreement for Greater Information Sharing Between Federal Commodities Regulator and State Securities Regulators
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo and North American Securities Administrators Association (NASAA) President Joseph P. Borg today signed a mutual cooperation agreement to establish a closer working relationship between the federal commodity regulator and individual state securities agencies.
Remarks of Chairman J. Christopher Giancarlo at the North American Securities Administrators Association (NASAA) Conference, Washington, D.C.
Thank you, Michael Pieciak. Good morning everyone. We are here to highlight the importance of cooperative enforcement among the Commodity Futures Trading Commission and individual States securities commissions.
Turning technology against criminals
Speech by Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered at the 5th Anti-Money Laundering TechSprint, London
‘Robo advice’ is malfunctioning, says regulator; Financial Conduct Authority says online financial advice and investment services don’t find out enough about customers’ circumstances.
by Elliot Smith – City Wire
The Financial Conduct Authority (FCA) has blasted automated financial advice and investment services over suitability failings and ‘unclear’ charges.
Investing and Trading
Coffee Waste Is Now Fetching a 480% Premium Over Coffee Itself; Prices for dried husks are outstripping those for beans.
Marvin G Perez, Leslie Patton – Bloomberg
Aida Batlle grows coffee on her family’s farm in the hills surrounding El Salvador’s Santa Ana Volcano. Like generations before her, she had little use for the skin that encases the beans, so she’d turn it into cheap fertilizer or, more frequently, trash it. Then one day, walking past some husks drying in the sun, a smell hit her, a good smell: hibiscus and other floral aromas. It dawned on her, she says, that some value might be extracted from what she had long considered refuse. So she steeped the husks in hot water and had a taste. “Immediately I started calling customers to try it,” she says.
Tax cut sparks record-setting $178 billion buyback boom
Matt Egan and David Goldman – CNNMoney
Why stock buybacks may deepen income inequality
It’s raining buybacks: Corporate America is throwing a record-setting party for shareholders.
US corporate bonds have worst start to year in decades; Negative returns reflect rising interest rates and issuance by weaker borrowers
Alexandra Scaggs in New York – FT
High-quality US corporate bonds had their worst start to a year in at least two decades, as interest rates rose and companies continued to tap the capital markets in significant numbers.
Oil price has sector’s investors eyeing a windfall; Industry pushing to improve returns as it rebounds from a long downturn
Andrew Ward and Attracta Mooney in London – FT
Investors in the world’s largest oil and gas companies are eyeing a windfall from rising crude prices as the sector heads towards its strongest financial performance in a decade, while keeping a tight rein on spending.
Fifth Third fires starting gun on US bank consolidation Cincinnati lender pushes into Chicago with $4.7bn acquisition of MB Financial
Ben McLannahan – FT
One of the biggest banks in the north-eastern US is pushing into Chicago, potentially setting off a wave of consolidation just as Congress prepares to pass the biggest rollback of regulatory reforms since the financial crisis.
Barclays clears another legal hurdle on road to recovery; Victory in SFO case relating to 2008 fundraising caps a good quarter for chief Staley
Martin Arnold, Jane Croft and Caroline Binham – FT
Just a year ago, the problems were coming thick and fast for Jes Staley. The Barclays chief executive had just apologised to investors for trying to unmask a whistleblower, fallen for a prank email and been forced to defend the disappointing performance of its investment bank.
Gelband finalises largest hedge fund launch ever; Ex-Millennium manager’s multi-strategy business ExodusPoint has raised over $8bn
Lindsay Fortado – FT
Michael Gelband, the star fixed-income trader who was once seen as heir apparent to Izzy Englander at Millennium Management, has raised more than $8bn for his own fund ó which would make it the largest hedge fund debut ever.
Deutsche Bank chairman under fresh investor pressure ahead of AGM; Move follows criticism of how Paul Achleitner handled exit of CEO John Cryan
Naomi Rovnick – FT
Deutsche Bank chairman Paul Achleitner has come under renewed investor pressure following criticism of how he handled last month’s replacement of the bank’s chief executive.
Sweden distributes ‘be prepared for war’ leaflet to all 4.8m homes; Defence pamphlet shows how population can prepare in event of attack and contribute to country’s ‘total defence’
Jon Henley – The Guardian
The Swedish government has begun sending all 4.8m of the country’s households a public information leaflet telling the population, for the first time in more than half a century, what to do in the event of a war.
EU’s Most Mobile Workforce Is Now Staying Home in Record Numbers
Dorota Bartyzel – Bloomberg
More Poles than ever deciding against emigration, survey finds; Labor crunch is mounting across Europe as worker flows dry up
A record share of Poles, once among the most mobile workers in the European Union, has decided against emigration, choosing instead to ride a domestic jobs boom as labor shortages mount from Germany to the U.K.
Mini-BOTs, the Monster Under the Bed for European Investors
Marco Bertacche, John Ainger and Charlotte Ryan – Bloomberg
Issuance would amount to a parallel currency, analysts say; Move may fuel concerns about Italian fiscal sustainability
They may be called mini-BOTs, but they are no small matter for European investors.
Europe’s Italian Problem Is Bigger Than Brexit
Clive Crook – Bloomberg
Italy isn’t going to leave the European Union. That’s what makes it so dangerous.