The Mysterious Finances of Brexit Campaign’s Biggest Backer; US and UK strike long-term derivatives deal

Feb 25, 2019

First Read

Hits & Takes
JLN Staff

The EPA reports that from 1990 to 2018, annual emissions of SO2 from US utilities fell by 92 percent and NOx dropped 84 percent, a strong example that cap-and-trade does indeed work.~JK

The WSJ is reporting a “tight labor market has forced the [FBI] to double down on recruitment efforts; CEOs, physicists and school therapists are encouraged to apply.”~JJL

In yet another example of big banks emulating the tech world, Reuters reports that JPMorgan’s investment bankers in San Francisco will now be using “hot desks” (shared workstations) rather than personal offices.~SD

Warren Buffett’s annual letter to Berkshire shareholders can be found here. He is no longer a government budget deficit doomsayer. Buffett was also on TV this morning and said wealthy Americans are ‘definitely undertaxed.’~SD

I was honored Sunday afternoon with the WD Boyce Award at the Pathway to Adventure Council Boy Scouts of America 2019 Annual Recognition Dinner. WD Boyce founded Boy Scouts of America and is a relative of former FIA President John Damgard, so I am doubly honored. The award is for starting a new unit, in my case the Exploring Club for girls I started.~JJL


The Spread – Excuses and Complaints – 2/22

A little bit of beef, a peek into the books of secretive market makers, and some French Revolution-based chastisement await viewers in this week’s episode of “The Spread.”

Watch the video and see the stories referenced here »


The way to fix bias in economics is to recruit more women; Study shows female economists are more open to new thinkers than their male peers
Mohsen Javdani – FT
Economics is having a #MeToo moment. The profession has long lagged behind other social sciences, and even most hard sciences, in recruiting female students, faculty hiring and promotion. Female economists often face hostile teaching evaluations, more exacting reviewing processes by journals and less credit for co-authoring. A recent paper by Alice Wu of Harvard University also documented a particularly toxic culture of misogyny on an economics jobs website

***** Removing bias will increase economic growth.~JJL


You Give Apps Sensitive Personal Information. Then They Tell Facebook.
Wall Street Journal testing reveals how the social-media giant collects a wide range of private data from developers; ‘This is a big mess’
Sam Schechner – The Wall Street Journal
Millions of smartphone users confess their most intimate secrets to apps, including when they want to work on their belly fat or the price of the house they checked out last weekend. Other apps know users’ body weight, blood pressure, menstrual cycles or pregnancy status.
Unbeknown to most people, in many cases that data is being shared with someone else: Facebook Inc.

***** The Efficient Market Hypothesis of personal information. Assume the world knows.~JJL


Where does fake movie money come from?
Jacopo Prisco – CNN
“I just got out of a meeting with the Secret Service. I’m still in the parking lot,” said Rich “RJ” Rappaport at the beginning of our phone interview. The reason for the meeting? Some discussion about fake money.
Rappaport is the founder of Atlanta-based RJR Props, a movie prop company that specializes in faux cash for filming. His money was used in “The Wolf of Wall Street,” “The Fast and the Furious,” the Netflix series “Ozark” and in 50 Cent and Kendrick Lamar music videos. But printing money is a delicate business, which is why he stays in touch with the men in black.

****Apparently there are federal rules on how to design fake money. Who knew? (Short version, it can be good but not too good.)~JB


Bridging the Week: February 19 – 22 and February 25, 2019 (Spoofer New Trial?; Utility Token?; Capital Rules To Discourage Clearing?)
Gary DeWaal – Bridging the Week
The US Department of Justice vehemently opposed the request for a new trial by the first person charged, convicted and sentenced under the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against spoofing. According to the government, the defendant’s new evidence purportedly supporting a retrial could have been obtained before his trial’s end. Separately, the Securities and Exchange Commission settled allegations against the issuer of a new digital token the SEC said engaged in an unregistered securities offering even though the stated purpose of the cryptoasset was for payment of transactions on a new blockchain-enabled cybersecurity service. However, the SEC demanded no fine to resolve this matter because, among other reasons, the issuer had voluntarily turned itself in.


Friday’s Top Three
Our top read stories of the day on Friday were led by the Milwaukee Journal-Sentinel’s Wisconsin dairy farms are failing as milk prices fall. Second was Bloomberg’s SocGen Said to Weigh Thousands of Investment Bank Job Cuts. Third was Travis Schwab’s blog in LinkedIn, Examining the CFTC’s Examination Priorities for 2019


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Lead Stories

The Mysterious Finances of the Brexit Campaign’s Biggest Backer
Tom Metcalf, Stephanie Baker – Bloomberg
Ever since Brexit supporter Arron Banks made the largest political donation in British history he’s been dogged by questions about where he got the money.

US and UK strike long-term derivatives deal; Accord seeks to minimise Brexit disruption to markets
Philip Stafford – FT
UK and US markets regulators have finalised a sweeping long-term agreement to jointly oversee each other’s derivatives markets after Brexit, removing concerns of financial turmoil in the $481tn market if Britain leaves the EU without an agreement.

CME Group CEO Duffy Learned From Crisis To Create Long-Term Success
Investor’s Business Daily
Terrence “Terry” Duffy’s parents would be very proud of him now. But they almost ended up homeless in the process. Duffy ó now CEO and chairman of CME Group (CME), the world’s leading financial trading marketplace ó still vividly recalls an error that nearly financially ruined his family. His reaction to this harrowing misstep helped him avoid a disaster and taught him a lesson about success that powers his career to this day.

Wall Street Banks Trampled All Over Their European Rivals in 2018
Yalman Onaran – Bloomberg
Most U.S. firms gained share in both fixed income and equities; After reclaiming some ground in 2017, European banks slid
JPMorgan Chase & Co. gained some of the biggest shares in both fixed-income and equities trading last year, solidifying its leadership in one and nearing the top in the other. Deutsche Bank AG lost ground in both markets while trying to restructure its business.

The Golden Age of the Quant & The Visual-Spatial Learner
Enrico Cacciatore, Voya Investment Management via LinkedIn
In response to eFinancialCareers article: “The age of the quant is coming to an end” – I fortunately see a very different future for those with STEM skills aka “Quants” in the financial field. The author is using a myopic view, applying his or her own two decades of personal experience and blanketing the entire quant space.

FTT: This Time It’s Different. Or Is It?
Jim Toes, President and CEO, Security Traders Association via MarketsMedia
As the field of 2020 Presidential candidates unfolds, it is becoming evident that a financial transaction tax (FTT) will be presented as a progressive means of raising funds for government programs. This will not be the first time our industry has faced this issue, and while details have yet to unfold, a proposed FTT will most likely espouse the perceived attributes of past versions. Mainly, that its low rate and broad based design raises reliable revenue while curbing behavior deemed threatening to our markets perpetuated primarily by proprietary trading firms. In the end, an FTT is a tax on capital and the savings of individual investors that causes rippling effects detrimental to our nation’s GDP.

Madoff victims accuse Luxembourg of failing to take action; UBS fund investors say grand duchy regulator has not enforced its own rules
Siobhan Riding – FT
Investors in a Luxembourg-listed fund that funnelled more than 90 per cent of its money into Bernard Madoff’s $50bn Ponzi scheme have accused the grand duchy’s financial regulator of incompetence after it claimed it was not obliged to enforce its own rules regarding investor compensation.

Madoff customer payout tops $12 billion
Jonathan Stempel – Reuters
The court-appointed trustee liquidating Bernard Madoff’s firm said he began distributing $464 million to the imprisoned swindler’s former customers on Friday, boosting their recovery to roughly $12.2 billion.

Millennials Are Facing $1 Trillion in Debt
Alexandre Tanzi – Bloomberg
Student loans make up the majority of 19-29 years old debt; Since 2009, mortgage debt up 3.2% while student loans up 102%
More than a decade has passed since young Americans faced debt levels this high. Debt among 19 to 29-year-old Americans exceeded $1 trillion at the end of 2018, according to the New York Federal Reserve Consumer Credit Panel. That’s the highest debt exposure for the youngest adult group since late 2007.

This Is What a Bull Run Looks Like in China’s Stock Market
Bloomberg News
Turnover explodes on Monday as CSI 300 enters bull market; Margin lending is increasing, though from a low base
A big day’s worth of turnover before the morning’s even out. Every stock with the word “securities” in its name rising by the daily 10 percent limit. And 260 shares up for every one that’s down.

Brexit could be delayed until 2021, EU sources reveal; EU reportedly determined to avoid uncertainty of three-month extension requests
Daniel Boffey – The Guardian
Brexit could be delayed until 2021 under plans being explored by the EU’s most senior officials, at a time of growing exasperation over Theresa May’s handling of the talks, the Guardian can reveal.

As Ex-Enron CEO Exits Prison, Some of Company’s Old Businesses Thrive; Companies built from pieces of the scandal-plagued energy giant have become industry leaders
Rebecca Elliott – WSJ
Former Enron Corp. Chief Executive Jeffrey Skilling has been released from federal custody after serving more than 12 years in prison for his role in one of the biggest business scandals in American history. He re-enters a world in which some of the businesses built from his old company’s less appreciated assets have become formidable in their own right.

Goldman Sachs Veterans Raise 3 Million Dollars To Combat Market Manipulation
Yoav Vilner – Forbes
Former Goldman Sachs engineers are trying to increase integrity in the crypto market. Solidus Labs have raised 3 million dollars, and want its machine-learning based trade surveillance platform to work towards this cause. Specifically for digital assets, the company’s platform is being deployed by exchanges, brokers, market-makers and hedge funds in the U.S and Europe.

Exchanges, OTC and Clearing

“The market now acknowledges the benefits of cleared markets”; Eurex Clearing’s Teo Floor, Vice Chairman of the executive committee of CCP12, speaks about the latest CCP12 report
CCP12 is a global association of clearing organizations and CCPs. The members “work together on issues of mutual interest and benefit to minimise global systemic risk and enhance the efficiency and effectiveness of international markets.” CCP12 has just published a report on Incentives for central clearing and the evolution of OTC derivatives.

CCP12 report: “Incentives for central clearing and the evolution of OTC derivatives”
Ten years after the G20 Leaders’ commitment to reform over-the-counter (OTC) derivatives markets, CCP12, the global association of central counterparties, has today published a report which examines the progress made in central clearing with an emphasis on the incentives that are in place.

Ameribor “more adequate” than SOFR for small banks
Global Investor Group
Richard Sandor tells Global Investor he expects widespread adoption of the Ameribor rate to really take off in 2021.

Subscription start for shares of onoff AG in the trading segment Scale; First IPO of the year is in Frankfurt / Segment Scale is two years old
Deutsche Boerse Group
Onoff AG is the first IPO of the year on the Frankfurt Stock Exchange. The shares of the company are listed in the SME segment Scale and can be subscribed from today via the Frankfurt Stock Exchange . The subscription period is expected to run until March 1 – the second anniversary of the stock market segment Scale.

FinanceFeeds Sydney Cup: CME Group and Cappitech engage Australia’s brokerage executives in retail FX’s number one region
Finance Feeds
From publicly listed electronic trading giants to the major interbank dealers, and from board level executives from the world’s prime of prime brokerages along with institutional technology leaders, the FinanceFeeds sixth Sydney Cup brought together the very leaders which preside over the most important components of the global business.

CME’s Terry Duffy: For cryptocurrency to succeed, governments need to be involved
Crypto Reporter
The reputation of digital money is changing for better, says Terry Duffy, CEO of the CME Group.


Digital Reasoning, a buzzy fintech valued at $270 million and backed by Goldman Sachs and Nasdaq, has lost its CEO and a handful of senior executives
Dan DeFrancesco – Business Insider Prime
The chief executive of Digital Reasoning, a fintech valued at hundreds of millions of dollars and backed by some of the biggest banks, resigned earlier this month. Brett Jackson stepped down as CEO of the AI software firm on February 7, less than two years after joining the company, Business Insider has learned. Jackson departure from the Franklin, Tenn.-based company that is reportedly valued at $270 million is the latest in a long-line of senior departures from the company, whose investors include Goldman Sachs, Credit Suisse, Barclays and Nasdaq, among others.

Liquidnet is Rebuilding its Algo Infrastructure; The venue operator is building its own container to house current and future algorithmic offerings.
Wei-Shen Wong – WatersTechnology
New York-headquartered trading venue Liquidnet is working on building its own in-house data container, to be in a position to more efficiently enhance its algorithmic suite.

Apple, Goldman Tie-Up Is Latest Way for Silicon Valley to Reshape Wall Street; Apple and Goldman need each other if they are going to burrow deeper into consumer banking
Liz Hoffman, Peter Rudegeair and Tripp Mickle – WSJ
JPMorgan Chase & Co is tearing down walls and moving its San Francisco investment bankers onto “hot desks,” a space-saving layout that has long been a fixture at tech companies, while redesigning offices in Dallas and other cities. executives came to a group of big banks in 2017 with a problem. The technology giant had been relying on a patchwork of smaller banks to allow Apple’s customers to lease iPhones, store cash in digital wallets and text money to friends. Apple wanted a new partner to rethink the business, according to people familiar with the process.

California leads the way on data regulation; The home of the platform giants could be the place where they are first reined in
Rana Foroohar – FT
If you want to get people really upset, hurt their children. That’s the message from a new spate of complaints about Big Tech.


The rich column: Crypto’s enduring fascination for the wealthy; Wealth managers are hesitant to recommend investing in something unregulated and volatile
Matthew Vincent – FT
In February last year, Forbes magazine published its first-ever cryptocurrency rich list. But only one person in the top 10 was identified as an “investor”; the rest were either currency co-founders or ran a crypto-exchange. Less than nine months later, all those on the list were 50 per cent poorer, after the price of bitcoin, Ethereum and other cryptocurrencies plunged.

Marvin Ammori’s Next Act: A Net Neutrality Vet on Blockchainóand Why the Internet Is Still Great
Jeff John Roberts – Fortune
If you read about the biggest tech battles in Washington D.C. over the last decade, the name Marvin Ammori comes up again and again. A lanky young lawyer, Ammori made his name fighting for free speech online, and leading successful campaigns against the powerful telecom and entertainment lobbies.

Cryptocurrency Assets Get Arab World’s First Regulatory Nod
Nour Al Ali – Bloomberg
Rules issued on crypto-currency asset services and exchanges; Saudi Arabia, U.A.E. previously launched pilot crypto program
The Arab world’s smallest country is taking the lead in regulating crypto assets. Bahrain’s central bank said on Monday that it issued “the final rules on a range of activities relevant to crypto assets.” The framework covers areas from licensing and governance to cyber security.

Oil blockchain platform signs up most North Sea traders; Boost for Vakt as it seeks to digitalise process of commodity trading
Emiko Terazono – FT
A London-based oil trading blockchain platform has signed up companies responsible for almost two-thirds of all deals in the key North Sea crude grades, in a move they say demonstrates energy trading’s early adoption of the technology.

Oil-Backed Cryptocurrency Could Hit Russian Markets Soon; The new cryptocurrency would coincide with new cryptocurrency regulations from the Russian government.
Rachel McIntosh – Finance Magnates
Former Russian Energy Minister Igor Yusufov is proposing an oil-backed cryptocurrency. Yusufov’s project could stand to benefit from a new set of cryptocurrency regulations that the lower house of the Federal Assembly of Russia, also known as the Russian State Duma, is planning on adopting in March. Both pieces of news were originally published in online Russian news source Rambler on February 21st.

A Group of 30 Global Central Securities Depositories Is Exploring Crypto Custody
Ian Allison – Coindesk
A group of central securities depositories (CSDs) in Europe and Asia is taking a serious look at how they might collaborate on infrastructure to custody digital assets. Still very much in the exploratory phase, the CSDs are planning to present the findings of their working groups at the annual SIBOS conference in London in October. But these organizations, which have been guarding stock certificates for decades, clearly see an opportunity to apply their knowledge and skills to the crypto space, where losing your private keys means losing your coins forever.

US Government Returns Bitcoins Retrieved Following 2016 Bitfinex Hack
Daniel Palmer – Coindesk
Bitfinex has announced that some of the bitcoin stolen in a major 2016 hack has been returned by the U.S. government. In a blog post published Monday, the exchange said that 27.66270285 BTC – worth just over $104,000 at time of writing – have been received from the U.S. government, and come as the result of U.S. law enforcement efforts.

Huobi Takes Over Its Australian Subsidiary Amid Market Slump
Arnab Shome – Finance Magnates
Major crypto exchange Huobi has come under the wrath of so-called “Crypto Winter” as its Australian subsidiary has subsumed under the global wing. Huobi Australia announced the take over via a Tweet on February 25th.

Reddit Co-Founder Says Crypto Hype Is Gone – And That’s a Good Thing
Yogita Khatri – Coindesk
Alexis Ohanian, the co-founder of social media platform Reddit and a VC investor, has said he believes the hype around cryptocurrency has dropped as speculators have fled the market – and that’s good for the industry.

Australian Regulator Trials Blockchain to Automate Transaction Reporting
Yogita Khatri – Coindesk
An Australian financial regulator is trialing blockchain technology to automate reporting of cross-border transactions by institutions. ZDNet reported Sunday that the Australian Transaction Reports and Analysis Centre (AUSTRAC) has partnered with the Swinburne University of Technology in Melbourne to build a prototype for the trial.

South Korean Crypto Exchange Declares Bankruptcy Citing Embezzlement
Yogita Khatri – Coindesk
South Korean cryptocurrency exchange Coinbin has declared bankruptcy after suffering millions of dollars in losses, in part due to claimed embezzlement.

Pension Funds Investing In Crypto Is A Big Deal!
Peter Tchir – Forbes
Bitcoin is back near $4,000, its highest level since early January. The rally in crypto is across the board as BitcoinCash, Ethereum, Litecoin, Monero and XRP are all at or near their 30-day highs.


Russian firm Baring Vostok seeks Putin help in criminal case; Private equity group founder Michael Calvey is in pre-trial detention
Max Seddon – FT
Russian private equity firm Baring Vostok has appealed to President Vladimir Putin to intervene in a criminal case that has seen the company’s American founder Michael Calvey thrown into pre-trial detention, shocking the business community.

DealBook Briefing: How to Really Tax the Rich; Senator Bernie Sanders is among the lawmakers who have proposed new taxes on the wealthy.
NY Times
There are other ways to tax the wealthy
A majority of Americans are increasingly open to raising taxes on the wealthy. Lawmakers like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have proposed revolutionary ways of reducing wealth inequality. But Andrew writes that there are other ways of bridging the gap ó ways that stand a chance of becoming law.

Trump: North Korea ‘could be great power’ without nuclear weapons
BBC News
North Korea could become one of the world’s “great economic powers” if it relinquishes its nuclear weapons, US President Donald Trump has said. Writing on Twitter, Mr Trump said the nation had “more potential for rapid growth than any other”. His comments came hours after his secretary of state Mike Pompeo said Pyongyang remained a nuclear threat. Mr Trump will meet North Korean leader Kim Jong-un for the second time on the 27-28 February in Hanoi, Vietnam.

U.S. and China Are Haggling Over How to Enforce Currency Pact
Saleha Mohsin and Jenny Leonard – Bloomberg
FX will be key to broader Washington-Beijing trade deal; Talks continue in Washington ahead of U.S. tariff deadline
The U.S. and China haven’t yet agreed on the critical issue of enforcement in a proposed currency deal that would ensure Beijing lives up to its promise to not depreciate the yuan, four people familiar with the matter said.


Joint Statement by UK and US Authorities on Continuity of Derivatives Trading and Clearing Post-Brexit
The U.S. Commodity Futures Trading Commission (CFTC) and the Bank of England, including the Prudential Regulation Authority (BoE) and the Financial Conduct Authority (FCA) today issued the following statement regarding derivatives trading and clearing activities between the United Kingdom (UK) and United States (US) after the UK’s withdrawal from the European Union (EU):

Joint statement by UK and US authorities on continuity of derivatives trading and clearing post-Brexit
Market participants can be assured of the continuity of derivatives trading and clearing activities between the UK and US, after the UK’s withdrawal from the EU, following this joint statement by the Bank of England including the Prudential Regulation Authority (BoE), Financial Conduct Authority (FCA), and the US Commodity Futures Trading Commission (CFTC).

ESMA publishes responses to its Consultations on Sustainable Finance
The European Securities and Markets Authority (ESMA) has published the responses received to its Consultations on integrating sustainability risks and factors in MiFID II, and in the UCITS Directive/AIFMD.

Members of the MilitaryóSave to Retire
Time for a Military Saves Week pep talk. YOU CAN DO IT! We’re talking about saving meaningful money toward your retirement.

Investing and Trading

‘Follow the benchmarks’ hits returns, says markets expert; Warning that performance-chasing can be a drag on fund performance and cause bubbles
Chris Flood – FT
Measuring the performance of investment portfolios against simple benchmarks, such as the FTSE 100 index, encourages damaging behaviour by asset managers and investors, according to academic research.

Mining Giant Barrick Gold Makes Hostile Bid for Rival Newmont; A deal could create a company valued at around $42 billion
Alistair MacDonald – WSJ
Barrick Gold Corp. offered $17.85 billion for Newmont Mining Corp., proposing an unsolicited, all-share deal that would combine the world’s biggest gold miners and create an industry giant that Barrick, based in Toronto, said will be better able to squeeze out costs.

What is behind the recent gold rush?; Some of the key questions for investors in the coming week
Gold prices hit their highest levels in ten months last week, at about $1,330 a troy ounce.The precious metal is back in favour as investors look to hedge against the risks of a global economic slowdown, a no-deal Brexit and continuing trade tensions between the US and China.

How the shale revolution is reshaping world markets; The fast-growing industry in the US is proving doubters of its sustainability wrong
Nick Butler – FT
The latest short-term outlook for US oil production published by the Energy Information Administration shows output rising to 13.2m barrels a day by the end of 2020. If this is achieved (and the EIA is traditionally cautious), the US will be the largest producer in the world, by a clear margin over Saudi Arabia and Russia.

Most Economists See U.S. Recession by 2021, Survey Shows
Alexandre Tanzi – Bloomberg
More than three-quarters of business economists expect the U.S. to enter a recession by the end of 2021, though a majority still estimate the Federal Reserve will continue raising interest rates this year.

Wall Street revives US retail ‘big short’; Bears stake out aggressive positions ahead of earnings this week
Alistair Gray – FT
Wall Street is reviving a “big short” of the US retail sector ahead of a raft of earnings reports this week, even though earlier bets on a mall “apocalypse” have failed to pay off.

Where Fee Pressures Hurt the Most; Broadridge research shows which asset classes and regions are most under pressure to discount investment management fees.
Christine Idzelis – Institutional Investor
Fee pressures are bearing down unevenly in the asset management industry, according to a new research report from Broadridge Financial Solutions.

If Central Banks Are the Only Game in Town, We’ve Lost; Relying on monetary policy to prop up asset prices and smooth out global volatility is a recipe for disaster.
Satyajit Das – Bloomberg
Just since December 2018, central banks have collectively injected as much as $500 billion of liquidity to stabilize economic conditions. The U.S. Federal Reserve has put interest rate increases on hold and is contemplating a halt to its balance-sheet reduction plan. Other central banks have taken similar actions, fueling a new phase of the “everything bubble” as markets careen from December’s indiscriminate selling to January’s indiscriminate buying.

Corporate Bond Markets Haunted by Elevated Risks, OECD Warns
William Horobin – Bloomberg
Sum of outstanding corporate bonds has doubled in a decade; OECD says debt market could amplify the effects of a downturn
The cheap money policies that fueled the global economy’s rebound since the financial crisis may be about to turn sour.

‘Play-the-Pause’ Trading Strategies Gain Traction on Wall Street
Liz McCormick and Misyrlena Egkolfopoulou – Bloomberg
With Fed on hold, Vanguard looks to range-trade Treasury curve; Debt and currency players see carry trade as among best wagers
The Federal Reserve’s dovish monetary-policy pivot is fueling the rise of a new wave of trading strategies designed to capitalize on a pause in the central bank’s tightening cycle.

Bond Traders Brace for March Madness as U.S. Debt Cap Returns
Liz McCormick and Alex Harris – Bloomberg
First day of next month marks end of ceiling suspension; Focus also on China-U.S. trade and Fed chairman’s testimony
Treasury traders are bracing for their own outbreak of March madness, with a plethora of risks on the radar, including the coming reinstatement of the U.S. debt ceiling.


Credit Agricole’s CACEIS to buy Netherlands’ KAS Bank for 188 mln euros
Credit Agricole’s CACEIS division has agreed to buy KAS Bank for around 188 million euros ($213 million), in a deal Credit Agricole said would strengthen its position in the Dutch market and lead to possible savings. The French bank’s CACEIS division will offer 12.75 euros for each KAS Bank share, a premium of 110 percent to KAS Bank’s closing price on Feb. 22.

BlackRock’s $12 Billion Bid to Become a Private-Equity Giant Is Behind Schedule; Officials hope to secure initial funding for Long Term Private Capital, which has been a tough sell to some investors, later this quarter
Dawn Lim – WSJ
BlackRock Inc. in 2018 set a goal of raising at least $12 billion to buy and hold long-term stakes in companies, replicating the approach of Warren Buffett. The world’s biggest money manager is still waiting for its first check.

Fired Barclays trader wins nearly £1m in compensation; Former executive was sacked at the behest of US regulator, which fined the bank $150m
Eva Szalay – FT
A former top foreign exchange trader at Barclays has won nearly £1m in compensation after a judgment in late January drew a line under a long legal battle with his old employer.

GAM’s Greensill tie-up survives sacking of star manager Asset manager still operates GAM Greensill Supply Chain Finance fund, a co-branded fund
Duncan Mavin and David Ricketts – Financial News London
Asset manager GAM is continuing to operate a co-branded fund with Greensill, the company whose relationship with one of GAM’s star fund managers was a key focus of an investigation that led to him being fired, according to people familiar with the matter.

Danske Suddenly Doesn’t Look So Bad After $18 Billion Fall
Frances Schwartzkopff – Bloomberg
Citi tells clients to buy Danske Bank shares after selloff; It’s unclear how much further Swedbank may fall, Citi warns
Since investors started panicking over its money laundering scandal about a year ago, Danske Bank A/S’s share price has been cut in half, representing $18 billion in lost market value.


China’s Tech Firms Are Mapping Pig Faces; As a devastating disease afflicts the country’s swine, companies are scrambling to roll out facial and voice recognition and other unproven ways to save them.
Sui-Lee Wee and Elsie Chen – NY Times
A database of every pig’s face. Voice scans that detect hogs with a cough. Robots that dispense just the right amount of feed. This could be China’s pig farm of the future.
Chinese companies are pushing facial and voice recognition and other advanced technologies as ways to protect the country’s pigs. In this Year of the Pig, many Chinese hogs are dying from a deadly swine disease, threatening the country’s supply of pork, a staple of Chinese dinner tables.

Zimbabwe’s currency reforms criticised as ‘voodoo economics’; Former finance minister warns central bank action is bound to fail
Joseph Cotterill – FT
The former finance minister who oversaw Zimbabwe’s adoption of the US dollar to curb hyperinflation has slammed the “voodoo economics” behind a new set of reforms that pave the way to recreating a local currency.

In One Market South Africa Bonds Already Look Like Junk
Colleen Goko – Bloomberg
The consensus among economists is that South Africa will hold onto its investment grade status for the time being. Derivatives traders are not so sure.

Egypt Lifts Ban on Billionaire Sawiris’ Investment Banking Firm
Tarek El-Tablawy – Bloomberg
Beltone shares surged as much as 9.9 percent in Cairo; Stock is still down more than 30 percent in the past year
Egypt lifted the suspension on Beltone Financial’s investment banking unit, ending curbs on the firm controlled by billionaire Naguib Sawiris over alleged irregularities in the handling of an initial public offering last year. The shares climbed in Cairo.

‘It Was Only Going Up’: Trading China’s Biggest Rally in Years
Bloomberg News
For the first time in a long time, Gerry Alfonso had no doubt about where Chinese stocks were headed. “Reading the market was so clear,” said Alfonso, a trader at Shenwan Hongyuan Group Co. in Shanghai. “It was only going up.”

China’s Borrowers Have an $890 Billion Problem; Cash-strapped firms are facing a wall of debt due this year. That’s a problem for industrial companies getting less government help.
Anjani Trivedi – Bloomberg
Chinese industrial borrowers are strapped for cash, as billions of dollars of debt come due this year. The ones that benefited from Beijing’s largess should be most worried.


Fund sector wishlist for the post-Brexit world; Strong support from Westminster must continue after March 29
Peter Smith – FT
As March 29 looms, the UK’s £9tn asset management sector must prepare for a post-Brexit world. Here are four items on the industry’s wishlist as it prepares to navigate uncertain times.

Britain faces harsh truths about post-Brexit trade; The UK will be less rather than more open after it leaves the EU
The Editorial Board – FT
Free trade promotes prosperity. But free trade deals produce losers as well as winners. They are often unpopular with electorates. Such agreements typically take years to negotiate. Opening up markets can require layers of new regulation in order to align national rules. It is nearly half a century since Britain last negotiated its own trading arrangements.

Banks losing battle to be no-deal Brexit ready
Sinead Cruise, Huw Jones – Reuters
Major banks are still not ready for a ‘no-deal’ Brexit as they grapple with delays in licenses for new European Union businesses, staffing problems and snags in redrafting contracts.

Pound yo-yos after Brexit vote delayed
Oscar Williams-Grut – Yahoo Finance
The pound is volatile on Monday morning after UK prime minister Theresa May decided to delay a parliamentary vote on Brexit. May was due to ask parliament to vote on her Brexit deal this week, but said over the weekend that she was unlikely to be able to reach a deal by then. As a result, the prime minister now plans to give the House of Commons a “meaningful vote” on her Brexit deal on 12 March. This would be just two and a half weeks before the official Brexit date.

Post-Brexit influx of bankers offers boost for Frankfurt’s art scene; Up to 2,000 financiers are expected to relocate from London to the German city by 2020
Claire Jones – FT
Money and art have been closely associated for centuries in Frankfurt, Germany’s financial capital. Together, they have created an environment that mixes prestigious exhibitions with dozens of independent galleries and vibrant street art. Now, local artists and gallery owners predict a rejuvenation of the art scene in one of the city’s least attractive neighbourhoods, buoyed by an influx of bankers as Frankfurt grabs business from a beleaguered London in the wake of Brexit.

Brexit delay: Irish prime minister Varadkar backs ‘long extension’ to Article 50; Taoiseach says complications caused by extension would be outweighed by economic problems of no-deal
Jon Stone – The Independent
Ireland’s prime minister has backed a “long extension” to Article 50 to delay Brexit as EU leaders warn that the UK is hurtling towards a disastrous no-deal exit. Speaking at an EU summit in Egypt Leo Varadkar said any complications caused by Britain staying in the bloc – such as having to participate in EU elections – paled in comparison to the economic damage that could be caused.

Scotland’s papers: May fears revolt after Brexit vote delay
BBC News
Monday’s Scotsman leads with the latest on Brexit, reporting that “fury” has followed the decision by Theresa May to postpone the second vote on her Brexit deal until as late as 12 March. The paper says this has sparked condemnation from opposition and her own party.


Five Carbon Capture Techniques That Could Help Mitigate Global Warming; Avoiding ruinous climate change will require removing massive amounts of carbon from the atmosphere, according to the UN. Here are some of the early efforts.
Michael Belfiore – Bloomberg
The United Nations Intergovernmental Panel on Climate Change estimates that warding off catastrophic global warming requires actively removing 100 billion to 1 trillion tons of carbon dioxide from the atmosphere by midcentury. “We have to create an industry equivalent to the oil and gas industry whose job it is to undo emissions,” says Julio Friedmann, chief executive officer of Carbon Wrangler LLC and a senior research scholar at Columbia University. Here are some of the most promising demo-ready projects trying to do just that.

How Pharma Lost Its Edge in Washington; Major drug company CEOs are about to appear before Congress to address drug pricingófor the first time ever.
Cynthia Koons, Anna Edney – Bloomberg
For decades drug manufacturers in the U.S. have been able to set prices virtually at will. They introduce new pharmaceuticals with five- or even six-figure price tags, while they raise the prices of existing drugs as much as 10 percent a year. Unlike their counterparts in the airline or auto industries, most leaders of these companies have never appeared before Congress. Until now.

Florida human trafficking: Billionaire equity firm owner John Childs wanted on prostitution charge in Vero Beach
Ali Schmitz, Treasure Coast Newspapers
Billionaire equity firm owner John Childs is one of several men accused of soliciting prostitution in connection with a Florida spa tied to an international human trafficking ring, police said Thursday.

Ex-Citigroup President Havens Caught Up in Prostitution Probe
By Matthew Townsend , Jennifer Surane , and Michelle Kim – Bloomberg
John Havens, Citigroup Inc.’s former president and chief operating officer, has been caught up in the same prostitution bust that has also ensnared New England Patriots owner Bob Kraft.

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