Virtual assets and financial crime now go hand in hand

Oct 30, 2018

First Read

Hits & Takes
JLN Staff

NIBA is offering FREE membership in continuation of its 25th anniversary celebration; however, this offer will be discontinued after November 30th.

On Wednesday, I am going to down to Pullman to meet one of the people driving the redevelopment activities there. You can read about “Pullman’s Renaissance” in this story from Chicago Magazine. My wife’s stepfather’s family lived near Pullman, and a step-uncle and step-great grandfather worked for Pullman.~JJL

Did you catch The Spread this week? This scary October themed episode actually featured special effects, as we conjured Spencer Doar‘s ghostly presence at the end.~JJL

WILD and Societe Generale-Americas Women’s Network is offering an Interactive LinkedIn Workshop in NYC, during which attendees will learn: how to select a professional profile photo, craft a compelling summary, highlight past experience appropriately, develop and enhance your personal brand, showcase skills and education, and ultimately develop a powerful LinkedIn profile. The event is free and takes place at Societe Generale’s offices in New York City on November 8 from 5:30pm – 8:30 pm. Go [https://goo.gl/AE6Zp8|HERE] for more information and to register. ~SR

We have added pages on MarketsWiki for FreightWaves, the winner of the FIA Innovator of the Year award for 2018, and for TellusLabs, last year’s Innovator of the Year award winner. ~SR

OCC is looking for someone who can fill the role of manager of public relations for the world’s largest equity derivatives clearing organization. Contact David Prosperi if interested.~JJL

Did you want to contribute to the Fearless Girl National Youth Leadership Training Fund and help girls develop leadership and Scouting skills? Contact me about the fund and attending the LaSalle Street Trading Tech Awards event on November 15.~JJL

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Changing After The Crisis: A CCP’s Perspective

JohnLothianNews.com

In this video from FIA Expo, Mark Wetjen, managing director and head of global public policy for DTCC, talks about his recollections from the financial crisis, how policy has impacted DTCC, and Treasury securities as the next potential beneficiary of more clearing.

Watch the video and read the rest »

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Monday’s Top Three
Our top stories were led by a 91-year-old former central banker, an 81-year-old former exchange leader and an 86-year-old retired chairman emeritus. The New York Times’ piece Paul Volcker, at 91, Sees ‘a Hell of a Mess in Every Direction’ was the top read story. The second and third most read pieces were top 3 stories from Friday. The Sun-Times article Judge risks 81-year-old Pat Arbor dying in jail, ex-CBOT chief’s lawyer says was second, and the Chicago Tribune’s piece on Melamed’s real estate moves Former Chicago Mercantile Exchange chairman sells contemporary Glencoe mansion, buys Gold Coast condo was third.

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Lead Stories

Virtual assets and financial crime now go hand in hand; All countries must supervise and monitor cryptocurrency exchanges and ‘wallet’ providers
Marshall Billingslea – FT
The anonymity, speed and global reach of virtual currency and other digital assets have made them attractive to both criminals and terrorists. If financial activities involving virtual assets are left unregulated or under-regulated, malign actors will be able to move funds whenever, and wherever, they want.
/on.ft.com/2qqB0Wx

***** Virtual assets also can go hand in hand with legitimate commercial activity. However, the issues of illegal activity must be addressed first and foremost.~JJL

EU pledges access to UK clearing houses in no-deal Brexit; Short-term permission reflects Brussels’ fears over financial stability of bloc
Jim Brunsden in Brussels and Philip Stafford in London – FT
Brussels has responded to financial industry calls for continued access to London’s capital markets by providing reassurance that EU groups will temporarily be able to use crucial derivatives clearing services in the UK even after a no-deal Brexit.
/on.ft.com/2qqyUG9

Stablecoin Battle Is for the Heart of Internet Economy; These cryptocurrencies represent an intermediate concept, linking the web and traditional economies without full integration.
Aaron Brown – Bloomberg
The cryptocurrency market was roiled this month by something known as “stablecoins.” These are an odd hybrid and among the most controversial and least-understood cryptocurrencies, but they’re important to the future of the internet economy.
/bloom.bg/2Q4nrXR

UK to study possible ban on sale of cryptocurrency derivatives; FCA consultation comes as task force says leveraged derivatives riskier than cryptoassets
Hannah Murphy in London – FT
The UK’s financial watchdog is weighing a potential ban on the sale of derivatives based on cryptocurrencies such as bitcoin, in what would be its first major intervention in the nascent market.
/on.ft.com/2qhpCfd

The Importance of a Systemically Important Financial Market Utility
John Fennell – FOW
Following the global financial crisis in 2008, policy makers identified one of the major risks to the financial system to be contagion with the unregulated over-the-counter (OTC) market. This was caused by the opaqueness associated with the health of one’s counterparties, which ultimately resulted in the freezing up of the OTC market.
/goo.gl/dcKYtf

FundSeeder plans first index funds within six months
Reuters
FundSeeder, a U.S. financial software company co-founded by Jack Schwager, author of best-selling book series “Market Wizards”, plans to create its first index investment products within the next six months, its CEO told Reuters.
/goo.gl/Rtgeih

IG’s Daily FX applies for Forex firm, NFA member registrations; FX Publications Inc, doing business as Daily FX, has applied for registrations as a US Forex firm, Introducing Broker and NFA member.
Finance Feeds
Further to FinanceFeeds’ report about IG US LLC getting registered as Retail Foreign Exchange Dealer (RFED), and Introducing Broker, it appears that IG Group continues to build its presence in the United States.
bit.ly/2OXpEYp

How close are we to finding a successor to LIBOR?
Waqas Samad, CEO, Benchmarks – FTSE Russell Blog
In a previous blog from July, I highlighted the scale of the task at hand to shift the market from its dependency on LIBOR. The regulatory authorities across the globe have encouraged the market to develop solutions to this problem and, judging by the transactions in the swaps and futures markets and the nascent activity in the bond markets, it seems that the market in the UK is certainly taking up the charge. Overnight derivatives based on a benchmark rate known as Sterling Overnight Index Average, or SONIA – which has replaced LIBOR – have started trading, and some bonds linked to the new SONIA RFR rates have been issued, too. As we can see from the table below, the market has grown to approximately £30B in notional on the new futures contracts linked to SONIA RFR.
/goo.gl/DnK6y4

Stable Coin Backed by Circle, Coinbase Draws Most Early Demand
Olga Kharif – Bloomberg
USD Coin issuance at $127.4 million after September debut; Tokens are being used to wait out price swings amid slowdown
The cryptocurrency supported by a consortium that includes Circle Internet Financial Ltd. and Coinbase Inc. appears to be the early favorite among the recent slate of high-profile digital coins marketed as being coupled to the U.S. dollar.
/bloom.bg/2qkDvJS

China and Japan reset strained relationship; Agreements mark ‘historic turning point’, says Shinzo Abe during Beijing visit
Yuan Yang and Tom Mitchell in Beijing and Robin Harding in Tokyo – FT
Beijing and Tokyo reset their troubled bilateral relationship on Friday as Shinzo Abe concluded a range of agreements on his first official visit to the Chinese capital since becoming Japanese prime minister for a second time in 2012.
/on.ft.com/2qiEx9f

China-Japan sign three-year FX swap deal to strengthen financial stability, business activity
Tetsushi Kajimoto – Reuters
Japan and China on Friday signed a currency swap arrangement of up to $30 billion – the largest such bilateral deal concluded by Tokyo – to strengthen financial stability and spur business activity in both countries, the Bank of Japan said.
/reut.rs/2qgy8v7

Exchanges, OTC and Clearing

Deutsche Börse adds RegTek.Solutions pre-validation platform to reporting hub; RegTek.Solutions’ pre-validation platform will become available to over 2,300 firms currently using Deutsche Börse’s ARM by the end of the year.
Hayley McDowell – The Trade
Deutsche Börse Group has bolstered its regulatory reporting hub with the addition of certified testing and a pre-validation platform from compliance specialist RegTek.Solutions.
bit.ly/2qjSN1a

Shanghai exchange to start pulp futures trading on Nov 26 1
Reuters
The Shanghai Futures Exchange (ShFE) said on Friday it would start trading pulp futures on Nov. 26 after receiving approval for the launch from the China Securities Regulatory Commission.
/goo.gl/65HVdz

Cboe to Shake Up East European Stock Markets With Lower Fees
Konrad Krasuski – Bloomberg
Equity-platform giant to add Polish, Czech stocks in November; Pricing aimed at countering established markets’ access rates
Cboe Global Markets Inc. is looking to shake up stock-market pricing when it starts handling shares of Polish, Hungarian and Czech companies next month in a move breaking up near-monopolies among eastern Europe’s largest exchanges.
/bloom.bg/2ERLckS

NZX finalises market structure and listing rules
NZX
NZX has finalised its updated market structure and listing rules, completing the first holistic review of the rule set in 15 years.
bit.ly/2CPSenC

IG Group names June Felix as its new chief executive; The online trader’s new boss was formerly president of Verifone in Europe
Hannah Murphy in London – FT
IG Group has named June Felix, the former president of Verifone in Europe, as its new chief executive, as the online trading sector deals with a tough regulatory crackdown.
/on.ft.com/2Q6dzwC

Euro swap clearing in the EU27 – a macro view on buy-side execution costs
Eurex
The market for rates in the EU27 is perfectly diversified and home to a wide spectrum of market participants. To achieve a balance in its client flow (pay vs receive fixed) is one key success factor for central-counterparties. Since Eurex Clearing is well advanced in achieving this goal, dealer banks are able to balance their books within the Eurex Clearing ecosystem and buy-side execution prices at Eurex Clearing are competitive.
bit.ly/2Q4bAZH

Expansion of Eurex Clearing’s Partnership Program to the Repo segment
Eurex
The Executive Board of Eurex Clearing took the decision to expand its Partnership Program to cover the Repo segment. The design of the program extension is complementary to the OTC interest rate derivatives segment, which started in January 2018. As part of its Partnership Program, Eurex Clearing shares governance and economics with the most active program participants.
bit.ly/2Q6Edpp

Announcement of T7 Release 7.1; T7 Release 7.1 is planned to be launched on 27 May 2019.
Eurex
Deutsche Börse AG will provide a dedicated release simulation environment in order to give Trading Participants the opportunity to perform comprehensive testing of their trading applications, independently of the T7 production environment. Details for the Simulation and the T7 Cloud Simulation will be published in November 2018 together with the announcement of T7 Release 8.0.
bit.ly/2Q4jhPB

Q3 / 2018: Deutsche Börse AG achieves significant growth
Deutsche Börse AG
Net sales (adjusted) increased by 13 per cent to EUR 651 million in Q3 / 2018 / Group net income (adjusted) in Q3 / 2018 was 21 per cent up on the previous year / In the first nine months of 2018, net sales (adjusted) rose to EUR 2 billion . EUR (+11 per cent) / Adjusted net profit for the period of EUR 772 million in the first nine months (+16 per cent) / Company confirms full-year targets for 2018
bit.ly/2Q6Et7R

Intercontinental Exchange Chief Financial Officer Scott Hill to Present at J.P. Morgan Ultimate Services Investor Conference on November 12, 2018
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that Scott Hill, ICE’s Chief Financial Officer, plans to present at the J.P. Morgan Ultimate Services Investor Conference. The presentation will take place on Monday, November 12 at 2:45 p.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the Investors section of ICE’s website at www.theice.com.
bit.ly/2Q5WfYN

Nodal Exchange and IncubEx Set Launch Date for North American Environmental Products
Business Wire
Nodal Exchange and IncubEx are pleased to announce the launch of their first tranche of North American Environmental products, which is planned for November 16, 2018, pending regulatory review.
bit.ly/2Q2AOrv

The Mexican Stock Exchange eyes global growth with BT
BT
New contract extends the existing relationship, giving The Mexican Stock Exchange global reach via the BT Radianz Cloud.
bit.ly/2Q4elKx

Fintech

Desmarais Family Extends Fintech Push With Fresh Cash Pool
Sandrine Rastello – Bloomberg
Power Corp. of Canada is ready to pour fresh cash into fintech start-ups to stay close to an industry that could put its own financial services business model at risk.
Power Corp’s in-house venture fund Portag3 has raised C$198 million ($150 million) in its second round of funding, with about half coming from units of the Montreal-based holding company and half from outside investors including National Bank of Canada and Intact Financial Corp. Power Corp. entities previously spent C$240 million on fintech companies.
/bloom.bg/2yIOf9l

Berkshire’s new fintech investments fit into a classic Buffett strategy — bet on an entire industry
Kate Rooney – CNBC
At first blush, Berkshire Hathaway’s recent early-stage fintech investments may seem out of place. But they do fit with Warren Buffett’s longtime strategy of making multiple bets across an entire industry.
/cnb.cx/2yFuiA6

CFTC Commissioner Urges Regulators to Approach Fintech With an ‘Open Mind’
Yahoo
A commissioner of the Commodity Futures Trading Commission (CFTC) said regulators should keep an “open mind” when dealing with rapidly changing fintech companies.
Rostin Behnam, who was appointed to one of five CFTC commissioner roles in 2017, spoke to attendees at the 2018 ISDA Annual Japan Conference in Tokyo about the challenges he’s seen regulating crypto assets, bitcoin and other technologies during his first year in office.
/yhoo.it/2yOQaJN

CSBS Lawsuit Opposing Fintech Charter Filed
Alan S. Kaplinsky – The National Law Review
The Conference of State Bank Supervisors (CSBS) has filed a second lawsuit in D.C. federal district court to stop the Office of the Comptroller of the Currency (OCC) from issuing special purpose national bank (SPNB) charters to fintech companies. A similar lawsuit was filed last month in a New York federal district court by the New York Department of Financial Services.
bit.ly/2yFlvOU

World’s first Islamic fintech start-up raises $8m in funding
Lubna Hamdan – Arabian Business
Wahed Invest, a New York-based investment platform and the first fintech Islamic Economy start-up, has raised $8 million in a bid to expand globally in markets including the UAE.
The firm valued at $100m received its latest funding from existing investors including Middle East-based BECO Capital as well as Boston-based Cue Ball Capital. Its latest round brings its total funding to over $15 million since its establishment.
bit.ly/2yDR9ME

Cryptocurrencies

Coinbase to Bring in $1.3 Billion in Revenue Despite Crypto’s Massive Slump
Julie Verhage – Bloomberg
In the last year, the cumulative value of all major cryptocurrencies has tumbled by more than 70 percent. But that doesn’t mean no one’s making money in crypto anymore.
/bloom.bg/2yFp5Zm

The Truth About Blockchain: Prove The Value
George Bailey – Forbes
The hype surrounding Blockchain has set records both for the incredible level of noise and the revolutionary claims attached to this emerging technology. Yet, to my knowledge there are almost no major corporate operations on Blockchain.
bit.ly/2CPngfi

‘Exit scam’ or hack? Canadian crypto exchange appears to close shop overnight
Tori Floyd – Yahoo Finance Canada
MapleChange, a small Canadian cryptocurrency trading platform, drew ire from investors over the weekend for its sudden departure. Users were widely unimpressed by the news, and reacted with a range of emotion from amusement to rage and criticism of MapleChange’s methods.
/yhoo.it/2JpvpZ5

Crypto Investors Flocking To ‘Blockchain Island’ Malta In Droves
Roger Aitken – Forbes
Malta has recently earned the name “Blockchain Island”, being the first jurisdiction in the world to adopt blockchain regulations – three in fact. And, the Mediterranean island has already attracted the two largest crypto exchanges, Binance and OKEx, and most recently ZBX, now opening offices in the rising crypto hub.
bit.ly/2ERwABW

Research: ICOs and exchanges dominate Ethereum’s top smart contracts
The Block Crypto
SFOX, a cryptocurrency prime dealer, published an analysis of nearly 30 million transactions from Ethereum’s ten largest smart contracts. According to SFOX, the ten contracts fall into four categories: (1) decentralized exchanges, (2) centralized exchanges, (3) ICOs, and (4) collectible tokens.
bit.ly/2qkafD4

eToro’s recent listing looks like a security, but the firm isn’t worried about regulators
Frank Chaparro – The Block Crypto
The move came as a surprise to some who say the token resembles a security; Still, eToro’s Mati Greenspan said the firm isn’t worried about regulators clamping down
eToro, a registered securities broker with 10 million users, on Monday announced that it would list Binance’s BNB token, bringing the total number of cryptos available on the brokerage’s platform to 13.
bit.ly/2qgU0Xc

Taiwanese Lawmaker Proposes New Business Category for Crypto Startups
Nikhilesh De – Coindesk
Taiwan’s “Crypto Congressman” continued his push for more modernized regulation around the tech by proposing new rules for token sales. On Friday, Taiwanese legislator Jason Hsu published a list of policy recommendations aimed at aiding cryptocurrency startups, including one that would see the Ministry of Economic Affairs (MOEA) create a new business category, as well as a new legal framework for security tokens.
bit.ly/2qhQLyF

How Psychology Affects Consumers’ Use of Cryptocurrency
Utpal Dholakia Ph.D. – Psychology Today
Along with a steep decline in the value of the most popular cryptocurrencies like Bitcoin, Litecoin, and ether, the hype surrounding them has died down considerably in recent months. Yet cryptocurrency remains the most innovative and potentially transformative form of digital money. It has the potential to move us towards an entirely cashless existence as consumers in the not-too-distant future.
bit.ly/2qi4fKQ

Women Worldwide Struggle to Access Banking Services. Bitcoin Is Only Making That Worse
Alice Merry – TIME Magazine
Earlier this year, World Bank Group President Jim Yong Kim spoke out in Washington, comparing cryptocurrencies to “Ponzi schemes”. Yet, cryptocurrencies and their more respectable cousin, blockchain, are already taking a prominent role in the international development sector.
/ti.me/2JoFwxf

Fujitsu to use blockchain-based rewards to boost tourism
Pete Sabine – Asia Times
Coupons and loyalty points can seem out of place in the 21st century, a reason why Japanese IT giant Fujitsu is using blockchain to create a rewards system for the domestic market.
bit.ly/2D9OHRP

Politics

Germany’s under-fire Merkel plans era-ending exit in 2021
Andreas Rinke, Paul Carrel – Reuters
Germany’s Angela Merkel said that her fourth term as chancellor would be her last and that she would step down as leader of the Christian Democrats (CDU), heralding the end of a 13-year era in which she has dominated European politics.
/reut.rs/2qiELwQ

U.S. agriculture chief says no plan to extend farm aid to offset tariffs
Reuters
The U.S. Department of Agriculture is not planning to extend an up to $12 billion aid package for farmers into 2019, Secretary Sonny Perdue said on Monday, to mitigate farmer losses due to the imposition of tariffs on American exports.
/goo.gl/xxdVvh

European tech bosses speak out against digital services tax; Executives oppose 3 per cent levy spearheaded by French president Emmanuel Macron
Mehreen Khan in Brussels – FT
European tech companies including Spotify, Booking.com and Angry Birds maker Rovio have come out against Brussels’ plans for a temporary digital tax arguing it will unfairly punish companies in the EU.
/on.ft.com/2qlDLYN

Chinese military researchers exploit western universities; Study shows US and UK scientists aiding high-tech progress for People’s Liberation Army
Kathrin Hille in Taipei – FT
China has sent thousands of scientists affiliated with its armed forces to western universities — especially in countries that share intelligence with the US — and is building a web of research collaboration that could boost Beijing’s military technology development.
/on.ft.com/2qk9Dx0

Trump to Sign Order in Attempt to End Birthright Citizenship, Axios Reports
Kathleen Hunter and Terrence Dopp – Bloomberg
President says he can change practice with executive order; Trump targets children of unauthorized immigrants born in U.S.
U.S. President Donald Trump said he plans to sign an executive order ending birthright citizenship for babies of non-immigrants and unauthorized immigrants born on U.S. soil, according to excerpts of an interview released Tuesday.
/bloom.bg/2qjdgmR

***** Love thy neighbor as thyself.~JJL

U.S. Plans More China Tariffs If Trump-Xi Meeting Fails, Sources Say
Jenny Leonard and Jennifer Jacobs – Bloomberg
Additional tariffs would come on top of $250 billion imposed; Expectation for de-escalating trade war at G-20 said to be low
The U.S. is preparing to announce by early December tariffs on all remaining Chinese imports if talks next month between presidents Donald Trump and Xi Jinping fail to ease the trade war, three people familiar with the matter said.
/bloom.bg/2qgVgcS

Powell’s Most Powerful Protector From Trump May Be Wall Street
Rich Miller and Emily Barrett – Bloomberg
Markets could react badly to any move to unseat Fed chairman; Trump says he doesn’t know if he’ll consider ousting Powell
The ultimate guarantor of job security for presidential whipping boy Jerome Powell may lie not in Washington, but on Wall Street.
/bloom.bg/2qibjHt

Trump accused of receiving ‘secret payments’ for endorsing a multilevel marketing company that lured people into investing
David Choi – Business Insider
President Donald Trump and his children are accused of “deliberately” scamming Americans by encouraging them to invest in a multilevel marketing company, according to a complaint filed in federal court on Monday.
/read.bi/2qjdR85

Trump defrauded investors in marketing scheme, lawsuit says
Jonathan O’Connell – Washington Post
Four anonymous plaintiffs filed a lawsuit against President Trump, his business and his three eldest children in federal court Monday, alleging that the Trumps helped promote fraudulent investments that duped investors.
/wapo.st/2qizLZb

Michael Bloomberg Skewers Trump For Inciting Hate And Violence; “You don’t use the bully pulpit as the president of the United States to rile up people and say things as a joke or as a campaign promise.”
headshot
Dominique Mosbergen – Huffington Post
Potential presidential contender and former New York City Mayor Michael Bloomberg accused President Donald Trump on Monday of “inciting” violence and hate instead of “unifying” the nation as a president should.
bit.ly/2qkbQZs

Regulation

FINRA: Customer Protection Applies to Digital Assets
Chris Kentouris – FinOps
The US Financial Industry Regulatory Authority could soon be offering broker-dealers some badly-needed guidance on how they should handle cryptocurrencies and similar products.
/goo.gl/KTsC4c

Red-hot leveraged loan market draws regulatory heat; Former Fed chief Yellen adds voice to concerns on deterioration in lending standards
Colby Smith – FT
One of the year’s best performing asset classes is starting to draw heat from regulators. Over the past month the booming $1.3tn market for leveraged loans, or those extended to highly indebted companies that are then often packaged up and sold to investors as bonds, has faced a tide of criticism from central bankers and financial watchdogs.
/on.ft.com/2qjcYfL

Musk Keeps Testing the Limits That the SEC Put on His Tweeting
Zoya Khan – Bloomberg
Tesla shares drop after hours following CEO’s posts on titles; U.S. agency required the company to put controls in place
Tesla Inc.’s Elon Musk continues to flirt with trouble on Twitter. The chief executive officer posted on Monday that he had deleted all references to the titles he held at Tesla, then joked that in doing so, he may have confused “the authorities.”
/bloom.bg/2Q6rcMv

ESMA publishes the responses to its Consultations on Prospectus
ESMA
The European Securities and Markets Authority (ESMA) has published the responses received to its Consultations on Prospectus.
bit.ly/2Q5N8HD

An update on our approach to authorisation and our Brexit preparations
UK FCA
Speech by Sarah Rapson, Director, Authorisations at the Association of Professional Compliance Consultants (APCC) Autumn Conference.
bit.ly/2Q7oaro

The FCA has fined Liberty Mutual Insurance Europe SE £5.2 million for failures in its oversight of mobile phone insurance claims and complaints handling
UK FCA
The Financial Conduct Authority (FCA) has fined Liberty Mutual Insurance Europe SE (Liberty) £5,280,800 for failures between 5 July 2010 and 7 June 2015 in its oversight of its mobile phone insurance claims and complaints handling processes administered through a third party.

Investing and Trading

Rising Rates Trouble Fragile Markets; The move in the benchmark short-term borrowing rate has sparked a debate among analysts
Sam Goldfarb and Daniel Kruger – WSJ
Short-term interest rates are rising again, making it costlier for investors and businesses to borrow when financial markets already are on edge. After hovering around 2.3% for most of the spring and summer, the three-month London interbank offered rate, or Libor, has been climbing since the middle of September, settling at 2.52% on Friday. Libor measures the cost for banks to lend to one another for short periods of time and is used as a benchmark for a range of interest rates, including those on margin debt and many corporate loans.
/goo.gl/3VcPDQ

Billionaires Chase ‘SpaceX Moment’ for the Holy Grail of Energy; Jeff Bezos, Bill Gates and Peter Thiel are funneling cash into nuclear fusion projects.
Jonathan Tirone – Bloomberg
Not long before he died, tech visionary Paul Allen traveled to the south of France for a personal tour of a 35-country quest to replicate the workings of the Sun. The goal is to one day produce clean, almost limitless energy by fusing atoms together rather than splitting them apart.
/bloom.bg/2qqAjwp

When quants go rogue: the case for becoming a hired gun
Beecher Tuttle – efinancialcareers
Investment banks and hedge funds are actively fighting over quants, throwing salaries of well over six-figures at even entry-level engineers and data scientists that can build revenue-generating algorithmic trading strategies. Meanwhile, the demand for quants is only expected to increase as old-school traders continue to be shuffled out. So why would a quant voluntarily remove themselves from what appears to be an ideal job market? Some argue that the talented ones have the opportunity and leverage to do even better on their own.
/goo.gl/JFej59

Steak Dinner and Annuities: Retirement Product Surges After Fiduciary Rule’s Demise
Ben Eisen and Lisa Beilfuss – WSJ
A retirement investment product associated with steak-dinner sales pitches is flourishing thanks to the death of a regulation once expected to curtail it. Annuity sales totaled $59.5 billion in the April-to-June period, the highest since late 2015, according to the Limra Secure Retirement Institute. Sales are expected to remain strong through at least the rest of the year.
/goo.gl/fVzxHG

The Stock Market Held a Sale, and No One Turned Up; Market reveals the optimists and pessimists among investors
James Mackintosh – WSJ
When the stock selloff began in earnest at the start of this month, it looked like a simple loss of momentum for a bunch of high-growth disruptive stocks that had risen too fast. Now it is morphing into broader concerns about the economy, and investors are factoring in less chance of the Federal Reserve raising interest rates aggressively next year.
/on.wsj.com/2qhxEF9

Bezos Sets New Wealth Record, Losing $19.2 Billion Over Two Days
Reade Pickert – Bloomberg
Jeff Bezos is still the world’s richest person, but he’s a lot closer to No. 2 Bill Gates than just a few months ago.
/bloom.bg/2Q6qf6T

Falling Pot Stocks Hammer Canada’s Struggling Venture Exchange
Kristine Owram – Bloomberg
Cannabis companies contribute 39% to October’s decline; ‘Pot stocks on the Venture Exchange are completely worthless’
From declining resource stocks to the recent rout in cannabis shares, Canada’s venture exchange can’t seem to catch a break.
/bloom.bg/2Q0HZQW

Do not blame index funds and ETFs for market volatility; Scaremongering about crashes ignores the long-term success of diversified investments
Gregory Davis – FT
Markets are jittery. Volatility is increasing. Everyone seems to be expecting the market sell-off to sharpen. They disagree on the reasons: rising interest rates, increasing trade tensions, burgeoning government debt, additional Brexit uncertainty. Some people also add the growth of funds that track market indices like the FTSE 100 and the S&P 500.
/on.ft.com/2Q498lX

Cargill announces shake-up of top management team
Neil Hume – FT
Cargill, US agricultural titan, has announced a shake up of its top management team, appointing a new finance chief and naming a senior executive to run its Asian operations.
/on.ft.com/2Q6D4OD

Institutions

Investors spurn small US banks despite strong results; Shares tumble on worries that cycle has turned and earnings have peaked
Robert Armstrong in New York – FT
Silicon Valley Bank, a high-flying specialist in lending to tech companies and start-ups, last week reported third-quarter results that any other small American bank would envy.
/on.ft.com/2qlDu8d

Gross Cut Stake in His Janus Unconstrained Fund as of September
John Gittelsohn – Bloomberg
Outside investors may not be the only ones who have pulled money from Bill Gross’s bond fund.
/bloom.bg/2qiaOgz

Here’s What Hedge Funds Pitched at Sohn San Francisco
Jeran Wittenstein – Bloomberg
Marvell Technology Group Ltd., The New York Times Co. and Farfetch Ltd. were among companies pitched at the Sohn San Francisco investment conference on Monday. Here’s a rundown:
/bloom.bg/2qjNP4D

BlackRock’s October Plunge Leads Selloff in Asset-Manager Stocks
Annie Massa and Charles Stein – Bloomberg
Industry index headed for biggest annual loss since 2008; ‘If you are not growing you are dying,’ says one consultant
It’s been a cruel month for U.S. asset managers. BlackRock Inc., State Street Corp. and rivals have seen their shares take a hit as jittery institutional investors have seized up in choppy markets. The other culprits: weak fee revenue and lackluster fund flows that were revealed in less than stellar earnings reports.
/bloom.bg/2qeVG3A

U.K. Plans to Sell Off Remaining RBS Stake After Brexit
Neil Callanan – Bloomberg
The U.K. plans to sell off its remaining stake in Royal Bank of Scotland Plc by the end of the 2023-2024 tax year.
/bloom.bg/2Q5TS8l

Julius Baer expects ex-banker’s sentence to have no bearing on its U.S. legal issues
Reuters
Swiss private bank Julius Baer does not expect the U.S. sentencing of one of its former Latin America executives to have any bearing on the bank’s U.S. legal issues, it said on Tuesday.
/reut.rs/2QdfdfS

Regions

Chinese economists blame ‘China model’ for US trade war; Two leading intellectuals argue state capitalism sparked western backlash
Gabriel Wildau in Shanghai – FT
Two prominent Chinese economists have broken with Communist party orthodoxy, arguing that the trade war with the US is the result of Beijing’s state-led development model rather than Donald Trump’s attempt to block China’s rise.
/on.ft.com/2qiFY7q

China stock woes deepen as government efforts fail; Benchmark index loses 3% on Monday, putting it down 10% in October and 24% in 2018
Gabriel Wildau and Yizhen Jia in Shanghai – FT
China’s stock market fell sharply on Monday in a further sign that government efforts to stem its losses have failed to persuade investors worried about a slowing economy and the impact of US tariffs.
/on.ft.com/2Q1t5tF

China’s Aversion to Big Bang Stimulus Tested by Trump Tariffs
Jeff Black and Yinan Zhao – Bloomberg
Economists downgrading China forecasts for 4Q 2018 and 1Q 2019; Tax cuts seen as likely route to mitigating economic fallout
China’s attempt to break free from the debt-financed stimulus of the past is being stress tested by Donald Trump. As the White House threatens tariffs on everything the U.S. imports from China, policy makers in Beijing are cushioning the economic blow with tax cuts, regulatory relief and investment incentives, rather than the kind of spending and monetary binge seen in 2008 and 2015.
/bloom.bg/2qkbceC

Brexit

Trading firm XTX picks Paris for post-Brexit EU hub
Reuters
Electronic trading house XTX Markets said on Monday it had chosen Paris as its European Union hub after Britain exits the bloc, the latest financial firm to announce plans so it can continue to trade across Europe after Brexit.
/goo.gl/JwrGx3

No ‘white knight’ for banks in no-deal Brexit, EU regulator warns; Moves from UK to eurozone cannot simply be ‘letterbox’ relocations, says Elke König
Jim Brunsden in Brussels – FT
Europe’s top official in charge of winding down failed banks has urged the industry to press ahead with preparations for a no-deal Brexit, saying lenders should not expect regulators to help them cope with any upheaval caused by the UK’s departure.
/on.ft.com/2qkc4zM

Brexit Bulletin: A Window of Opportunity
Emma Ross-Thomas – Bloomberg
Chancellor of the Exchequer Philip Hammond has delivered a budget his party can get behind. And that’s a relief for Europe’s Brexit negotiators.
Talks have been all but on hold. European officials have been watching to see if Prime Minister Theresa May would get the budget through Parliament or face some kind of Brexit proxy-war rebellion. The mood among Conservative lawmakers last night was united and upbeat, Kitty Donaldson reports, after Hammond delivered a series of handouts that looked a lot like election-year vote-buying.
/bloom.bg/2yDRz5G

Miscellaneous

Walsh Welcomes Financial Services Leaders to College
Walsh
Three women from Merrill Lynch who have achieved success in the financial services industry will share how others can bridge the gender gap and build a career in this competitive field during Walsh’s Conversation With Leaders event at 5 p.m. Thursday, Nov. 8.
/prn.to/2Q0Mye2

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