First Read

The Most Popular Stories of 2016 on JohnLothianNews.com
By John J. Lothian

As we end 2016 we should all stop in at Ceres in the Chicago Board of Trade Building for a stiff drink and to shake the hand of Billy Assimos. He was the focus of the most read story on johnlothiannews.com in 2016, according to Google Analytics.

Sarah Rudolph penned the story, “Billy Assimos, the Face of Ceres” in June of this year. Assimos is the longtime manager of Ceres, a restaurant and bar in the CBOT Building, and a friend of many. I guess it pays to serve the stiffest drinks in Chicago.

Coming in second place was Jim Kharouf‘s story about former ISE founder and CEO Gary Katz, “Cannot be done”: ISE’s [[Gary Katz Tells The Inside Story Of The Biggest Disruptor To The Options Industry Standard]]. After ISE was sold to Nasdaq, Jim interviewed one of the true innovators of the financial markets. It would have been even more popular if we had shot it as a video, as we all know how popular katz videos are on the Internet.

The third most popular story was a video interview Jim Kharouf conducted down in Boca Raton at the FIA’s International Conference as part of our 2016 Exchange CEO Series. This interview was with Jeff Sprecher talking about data, clearing and growth for ICE. Jeff Sprecher is always a big draw.

The fourth most popular story of 2016 was one of the first written during the year, as I examined the statistics from the NFA about the number of new introducing brokers created in 2015, which hit a historic low. The story was titled “Getting Squeezed: Introducing Brokers Numbers Waning, Growth Wanting, Future Questioned; New Introducing Broker numbers hit historical low; IB Numbers Shrink 17 percent Since Financial Crisis.”

Coming in at number five was a commentary by Dr. Holly Bell posted to JohnLothianNews.com, Disruption is Not Innovation, looking at the IEX impact on the markets.

The first part of our 2016 Exchange CEO Series interview with former CME Group CEO Phupinder Gill was the sixth most popular story. Gill talked about “Looking For Customer Efficiencies.”

Another video interview came in seventh as the OCC’s Craig Donohue showed up in our most popular stories with “Make A Plan: How OCC Is Forging Change In The Options Industry.”

Jim Kharouf’s “Shipbuilding: RJ O’Brien Building Business in Tough Times” was the eighth most popular story on JohnLothianNews.com in 2016.

Jeff Bergstrom’s commentary on “What is Blockchain?” was the ninth most popular story of 2016.

Finally, another blockchain story, this one by Jim Kharouf, came in at number ten. His “ASX Gets Technical: ASX deputy CEO Peter Hiom Talks About New Trading Platform And Pioneering Into Blockchain” rounded out our top ten most popular stories clicked on during 2016 on johnlothiannews.com.

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Nymex Trading Pits Shut Down, Marking End of an Era; Decision by parent CME to close Nymex’s open-outcry trading floor is latest step in inexorable shift toward electronic trading
Alexander Osipovich – WSJ
The open-outcry trading floor of the New York Mercantile Exchange in lower Manhattan will shut down after markets close Friday, the latest step in the inexorable shift toward electronic trading.
/goo.gl/FY5LLA

***** “Inexorable” is the word of the day.

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Dealmaking surge dominates the year in market structures; LSE and Deutsche Börse merger sets the tone into 2017 with Nasdaq’s response key
by: Hannah Murphy – FT
M&A: back with a bang
Deal activity was vigorous with much of it concentrated just below the level of the industry’s biggest companies. Nasdaq bought International Securities Exchange for $1.1bn, while CBOE Holdings announced a $3.2bn deal for Bats Global Markets in September. Of most significance, the pending EUR24bn tie-up between London’s LSE Group and Deutsche Börse, which will create Europe’s largest exchange. As the chart above shows, rising equity valuations have lifted all market capitalisations among exchange operators, however the size of the big US companies makes mid-level operators, including Europe’s two suitors, look vulnerable. That deepens the determination at the LSE and Deutsche Börse to get their deal through. Another big question for the year ahead is how Nasdaq responds to either outcome under new chief executive Adena Friedman.
/goo.gl/YM7FIO

***** 2017 will be the year the deals close, for sure.

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Grab Your Ear Muffs, the New Year’s Arriving With a Frigid Bang
by Brian K Sullivan – Bloomberg
Warmer Arctic weather will spur a very chilly start to 2017; Climate change and El Nino are behind shrinking polar sea ice
A deep freeze is about to descend on North America, Europe and Asia thanks to record high temperatures across the Arctic.
/goo.gl/9t1yyE

***** I am glad to be working from home for the next couple of weeks. And so is my team.

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Notice of Annual Meeting of NFA Members
NFA
NFA will hold its Annual Meeting of Members on Tuesday, February 7, 2017, at 10:00 a.m., Central Time, in the offices of NFA, 300 S. Riverside Plaza, 18th Floor, Chicago, IL.
/goo.gl/pQJsmw

***** Don’t miss the NFA’s annual meeting.

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One child’s story of a decade with a leg to stand on.
ALTSO
As we reflect on ALTSO’s growth – from 100 children treated in 2003, to nearly 1,500 children treated in 2016 – we thank you for your proactive commitment to those we serve. This holiday season, we ask for your support in giving the life-changing gift of mobility – and all the opportunities that provides – to those whose families cannot afford it.
/goo.gl/msbKau

***** Are you an Amazon Prime member? Here is the easiest way you can donate to ALTSO and other charities during 2017. Go to smile.amazon.com and search for ALTSO as the charity to have Amazon donate to for each of your qualified purchases. We are going to highlight this during 2017.

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Thursday’s Top Three
The top story yesterday highlighted one of the main problems with regulators getting access to proprietary code in the ValueWalk story, Why Did Regulator Have Computer Trading Code On Personal PC? The #2 story from The Wall Street Journal says something I think we all agree with, I’ll Miss the Trading Floor. In third is another story detailing the misfortunes of the hedge fund industry in the Fortune story, These Are the 7 Biggest Hedge Fund Disasters of 2016

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MarketsWiki Stats
91,571,575 pages viewed; 22,287 pages; 202,937 edits
MarketsWiki Statistics

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Lead Stories

Tullett Prebon Completes $1.6 Billion Deal for ICAP Brokers
by Will Hadfield – Bloomberg
Enlarged Tullett will trade as TP ICAP with 3,425 brokers; ICAP becomes NEX Group, an operator of electronic markets
Tullett Prebon Plc has completed the 1.28-billion-pound ($1.6 billion) purchase of the voice-broker business of its former rival ICAP Plc, creating a dominant firm in the business of matching trades between banks.
/goo.gl/op0SE3

S&P 500 on track for biggest recovery since the Great Recession; Donald Trump’s pledge to fire up the US economy has changed investors’ psychology
by: Adam Samson and Eric Platt in New York – FT
Wall Street’s most important equity barometer is on track for its biggest annual recovery since the beginning of the bull market, underscoring the sharp turn in investor sentiment following the worst start to a year on record.
/goo.gl/lhAuyM

The Year’s Top Stock Picker Didn’t Follow the News
By Matthew A. Winkler – Bloomberg
The No. 1 U.S. stock picker of 2016 paid scant professional attention to the biggest event of the year, the presidential campaign that led to the election of Donald Trump. He focused instead on finding small companies with enough underappreciated strengths to prosper no matter who’s in the White House or managing economic and interest-rate policy.
/goo.gl/fPOZGq

After a Tough 2016, the Hedge-Fund Managers to Watch Next Year; For many hedge-fund managers, 2016 was a year to forget; here are some that are worth keeping an eye on in 2017
WSJ
For many hedge-fund managers, 2016 was a year to forget. Tens of billions of dollars flew out of the industry as investors flagged disappointing returns and stubbornly high fees.
/goo.gl/8OQVrm

Gold Lures Investors Worried About Trade Wars and Trump Tweets
by Eddie Van Der Walt , Luzi-Ann Javier , and Ranjeetha Pakiam – WSJ
Bullion price seen jumping 12% in 2017, analyst survey shows; 140-character missives by president-elect signal new paradigm
The Donald J. Trump era is marking a new age for gold as an investor safe haven.
While the precious metal has always been hoarded in times of trouble, a bevy of political and economic surprises in 2016 sparked a surge in buying that sent bullion to the first annual gain in four years. Prices may rally 12 percent in 2017, according to a Bloomberg survey of 26 analysts.
/goo.gl/chyFPp

China Takes New Step to Downgrade the Dollar’s Prominence
Bloomberg News
Greenback’s weighting to decline to 22.4% from 26.4%; China seeking currency stability as dollar strengthens
China took another step to degrade the dollar in defining the value of its currency, in an effort that cuts against its rival’s stubbornly strong hold on the global financial system.
/goo.gl/qWcmTP

Euro Jumps 1.6 Percent in Minutes as Algo Orders Surprise Market
by Michael G Wilson and Kevin Buckland – Bloomberg
Liquidity evaporated as euro buy orders surged above $1.05; Europe’s single currency has since pared its advance
The euro surged as much as 1.6 percent against the dollar in the Asian morning Friday as a rush of computer-generated orders caught traders off guard.
/goo.gl/uwfxCm

Brexit

Brexit to fire starting gun on decade of economic disruption, says major report
Joe Watts – The Independent
Brexit will fire the starting gun on a “decade of disruption” with the UK being hit by a perfect storm of economic uncertainty, an ageing population and volatile jobs market, a major report has concluded.
/goo.gl/R7uFmp

Scots Urge May to Give EU Residents Certainty Amid Brexit
by Alex Morales – Bloomberg
The Scottish National Party urged U.K. Prime Minister Theresa May to give more than 3 million European Union citizens resident in Britain certainty over their future as she prepares to trigger Brexit talks.
/goo.gl/3WZVQm

Exchanges, OTC and Clearing

NSE’s IPO under cloud, but unlikely to be derailed
Abhirup Roy and Rafael Nam – Reuters
MUMBAI The disclosure by the National Stock Exchange that some high-frequency trading brokers may have been provided unfair access to its servers is unlikely to derail the Indian bourse operator’s IPO plans, a senior regulatory source and investors said on Thursday.In its draft initial public offering prospectus, India’s biggest exchange said an external panel had found potential instances of some traders having preferential access to its network through co-location facilities – where private servers are placed at exchanges to speed up algorithmic trading.
/goo.gl/PbvwIM

BSE IPO may hit markets in early Jan next year; Bankers are looking at pricing the issue at about Rs 500 apiece
Ashley Coutinho – Business Standard
Asia’s oldest bourse, BSE, has completed its overseas roadshows and is expecting a nod from market regulator Securities and Exchange Board of India (Sebi) for its initial public offering (IPO) soon. The exchange is aiming to hit the market as early as January next year.
/goo.gl/Bqhz4v

Sebi allows Cotton Association of India to exit bourse business; Volume of future trades of CAI started declining from 2002 onwards and became nil on 2007
Business Standard
Markets regulator Sebi on Thursday allowed Cotton Association of India (CAI) to exit the bourse business by withdrawing its recognition. The Securities and Exchange Board of India (Sebi), in February this year, informed the CAI that since there was no trading operation on its platform for more than 12 months, it is liable to exit.
/goo.gl/LnkGP9

Report on Initial Public Offering Applications, Delisting and Suspensions; (As at 30 December 2016)
HKEX
/goo.gl/JWKmFH

Politics

Trump’s pick for budget chief loves gold and bitcoin
Yahoo Finance
The man in line to bring together President-elect Donald Trump’s federal budget is a big believer in gold, according to financial disclosures.
Mick Mulvaney, Trump’s pick to lead the Office of Budget and Management, owns significant amounts of precious metals and gold-mining stocks based on financial disclosures compiled by Bloomberg.
/goo.gl/BKvGPN

George Soros | Open society needs defending; Open societies are in crisis, and various forms of closed societies—from fascist dictatorships to mafia states—are on the rise
George Soros – Live Mint
Well before Donald Trump was elected President of the United States, I sent a holiday greeting to my friends that read: “These times are not business as usual. Wishing you the best in a troubled world.” Now I feel the need to share this message with the rest of the world. But before I do, I must tell you who I am and what I stand for.
/goo.gl/aQ4CZv

Joseph Stiglitz | The age of Donald Trump; With the arrival of Donald Trump the coming year may well be remembered as a turning point in US and world history
Joseph E. Stiglitz
On 20 January 2017, Donald Trump will be inaugurated as the 45th President of the United States. I would hate to say “I told you so,” but his election should not have come as a surprise. As I explained in my 2002 book Globalization and its Discontents, the policies we have used to manage globalization have sown the seeds of widespread disaffection.
/goo.gl/CMFYRo

Investing and Trading

2016’s populist votes drive investors back into stocks; Bets on inflation and global growth staunch outflows from European equities
by: Eric Platt in New York – FT
Investors’ positions fluctuated wildly this year after unexpected election results in the UK and US upended markets, ultimately propelling a global stock rally and selling of government bonds as portfolio managers readied for the arrival of fiscal stimulus and inflation.
/goo.gl/9hmt0q

Charting the twists and turns across financial markets in 2016; Ascent of Trump caps a year marked by big fluctuations for asset prices
by: Eric Platt in New York
Financial markets in 2016 endured an escalation of negative interest rates, the collapse and subsequent rebound in commodity prices and fluctuating stock market valuations.
/goo.gl/XzEy5P

Hedge Funds Fare Best Avoiding Mainstream Markets; Funds invested in Russia and Central Asia, Latin America among year’s top performers
By LAURENCE FLETCHER – WSJ
It hasn’t been a great year for hedge funds, but some that ventured far afield from mainstream stock and bond markets reaped big profits.
/goo.gl/4eYWuc

US mortgage refinancings head for 17 year low; Bankers expect long boom to end as interest rates rise
by: Alistair Gray in New York – FT
US mortgage lenders are heading for the quietest year for refinancings since 2000 as rising interest rates are expected to turn some borrowers off the deals, hitting what has been an important source of revenue for the industry.
/goo.gl/1aJPpI

Institutions

Wall Street’s Trump Bonanza Won’t Avert Job Cuts at Banks in ’17
by Hugh Son – Bloomberg
Even if profits surge, analysts say banks will keep automating; ‘It’s hard for me to imagine a job expansion in finance’
Bank stocks are on a tear after Donald Trump’s victory drove up expectations for the industry’s profits. Here’s the catch for many people working there: Holding onto their jobs won’t be any easier.
/goo.gl/OTBC0f

RBS investors mount campaign for shareholder committee
Ben Martin, banking correspondent – Telegraph
Private investors in Royal Bank of Scotland are mounting a campaign to force the state-backed lender to set up a new shareholder committee to hand them power over the way the beleaguered company is run.
/goo.gl/nr6OLv

Fintech

Lawyers and accountants are prime targets for cyber attacks; Hackers know to go where money can be found
The Top Line
by: Brooke Masters
Willie Sutton, the notorious US outlaw, famously said he robbed banks “because that’s where the money was”.
/goo.gl/FYpm35

Join Our Board: Companies Hotly Pursue New Wave of Women in Tech
NY Times
For months, technology companies have pursued Amy Chang.
The calls are relentless, with several feelers a month, said Ms. Chang, the chief executive of Accompany, a Silicon Valley start-up. Even when she declines the overtures, the tech companies and their agents keep coming back, asking the same question: Will you please join our board?
nyti.ms/2iMNuph

Regulation

SEC scrutinises the sale of Mozambique ‘tuna bond’
Elaine Moore – Financial Times
US authorities have joined the UK and Switzerland in scrutinising “tuna bonds” issued by Mozambique via sales arranged by Credit Suisse, Russian bank VTB and BNP Paribas.
The US Securities and Exchange Commission wrote to bondholders earlier this year requesting information about the $850m bonds sold in 2013, according to investors who were contacted.
on.ft.com/2iMtHGK

Are Your Investments Ready for the New Year? FINRA Offers 7 Tips for 2017
FINRA
The dawn of a new year is an ideal time to assess your progress toward your investment goals, and make any needed adjustments. These 7 tips from FINRA can help you plan, stay abreast of changes in the market and their impact on your portfolio, and protect your investments:
/goo.gl/xT9h9C

Wire and Cable Manufacturer Settles FCPA and Accounting Charges
SEC
The Securities and Exchange Commission today announced that Kentucky-based General Cable Corporation agreed to pay more than $75 million to resolve parallel SEC and U.S. Department of Justice investigations related to its violations of the Foreign Corrupt Practices Act (FCPA). The company agreed to pay an additional $6.5 million penalty to the SEC to settle separate accounting-related violations.
/goo.gl/ldofm1

Regions

China Tightens Anti-Money Laundering Regulations for Banks
Bloomberg News
China’s central bank said it tightened requirements for lenders to report cross-border transactions by customers as part of stepped-up efforts to curb money laundering.
/goo.gl/i4YFgk

China’s yuan suffers biggest one-year loss since 1994
Reuters
China’s yuan strengthened against the dollar on Friday, but was on track for its biggest annual loss since 1994, which would make it the worst performing major Asian currency this year.
/goo.gl/DzrsvC

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