Asset allocation specialists are the new snake oil salesmen

Nov 11, 2019

First Read

Back in Court with Bcause – Year End Report
Thom Thompson – John Lothian News

Wednesday was the last hearing scheduled for this year for the Bcause bankruptcy. The next court date is January 7 when the bankruptcy trustee’s disposition of Bcause’s remaining “asset,” the spot market, will be presented to the court.

A trustee was appointed a few weeks ago to oversee the liquidation of the company’s assets and the organization and distribution of cash to the creditors. The trustee reported on Wednesday that the cash condition of the company, which last week was about $150,000 lower than expected, had deteriorated as a result of Bcause making payments that had not been authorized by the court. Some of the payments, like those against checks that had been written before the liquidation but had not cleared at the bank earlier, seemed reasonable to the court. Other payments, like the payroll that Judge Baer had ordered not be paid and miscellaneous ATM withdrawals, continue to pique the court’s interest. Judge Baer told the trustee to investigate those payments.

To read the rest of this report, go here.


Hits & Takes
By JLN Staff

The freedom we enjoy was not free. It was paid for in the blood and sweat and tears of the veterans of the military in the U.S. and its allies. We can never say, or do enough, to thank them for their service and sacrifice. But we can still say it: Thank you for your service.~JJL

Here is the winner of the 2019 Veterans Day Poster Competition. ~SR

Longtime CME member and venture capital executive Jeff Carter is launching a project for Veterans Day. It’s for the National World War Two Museum. The museum recently built a hotel and there are opportunities to name rooms.
He would appreciate your support. Here is a link to the GoFundMe page.~JJL

The FIA’s FCM Snapshot showed a few things. The number of US FCMs continues to hold steady, with 55 now in business, with $211.2 billion in segregated funds in September. Ten years earlier, there were 65 FCMs with $169 billion in seg funds.~JK

Not sure what this does to FIA’s 2019 Annual Volume Survey. From Reuters, China’s three biggest commodities exchanges will end double-counting trades from January 1, 2020 and report on a single-count basis to match international standards. Last year, Dalian and Zhengzhou commodity exchanges held the top three agriculture contracts and six of the top ten, according to FIA’s 2018 Annual Volume Survey. The Shanghai Futures Exchange had the number seven contract and CME Group’s corn and soybean futures were fourth and eighth respectively. Chinese exchanges also dominated in the metals category.~JK

The petition on for Justice for Jitesh now has over 1550 signatures on it.~JJL

I helped start a social justice ministry at my church, St. Peter’s United Church of Christ in Elmhurst, IL. The mission statement of St. Peter’s Social Justice Ministry is as follows:

We are seeking to respond to Christ’s call through advocacy and acts of peace, justice and love. We will work to have a transforming impact on local, national and global communities.~JJL


Trading faces up to its long-hours culture; A growing number of banks and investors think working day should be shortened
Philip Stafford and Eva Szalay – FT
The length of the trading day in London has forced many of the sector’s working parents to change track, and head down career paths that suit their families’ needs. “I don’t want my career to suffer because I’m a mother,” said Rachel Przybylski, head of regulatory affairs at Saxo Capital Markets — a role set back from the front line of trading. She enjoys her job, and can fit it around her family, but reflects on a previous role working on the equities desk at Nomura. “The long hours are part of it,” she said. “Even if I wanted to go back to working on the desk, could I?”

*****The 1:15 close for grains at the Chicago Board of Trade led to a wonderful life. But the world changed and it is hard to go back.~JJL


Jamie Dimon says ‘greedy’ bankers ‘let the American people down’; JPMorgan chief is only major Wall Street banker whose tenure predates financial crisis
Laura Noonan – FT
Jamie Dimon said bankers “let the American people down” ahead of the 2008 financial crisis, calling out those who were “greedy, selfish, did the wrong stuff, overpaid themselves and couldn’t give a damn”.

*****The last part is the worst: “couldn’t give a damn.”


Richest 1% of Americans Close to Surpassing Wealth of Middle Class
Alexandre Tanzi and Michael Sasso – Bloomberg
The U.S.’s historic economic expansion has so enriched one-percenters they now hold almost as much wealth as the middle- and upper-middle classes combined.

*****I am going long on pitchforks.~JJL


CFTC Settlement Undone; Aiding and Abetting Liability Potentially Broader; Spoofing = Wire Fraud
Gary DeWaal – Bridging the Week
Two weeks ago, a federal court of appeals sided with the Commodity Futures Trading Commission ruling that a district court could not require the testimony of three commissioners and various staff to assess whether the agency committed civil contempt in connection with its handling of an enforcement settlement with two food giants. In response, the district court confirmed it would solely evaluate the existing record to determine whether to grant the defendants’ motion for a contempt finding against the Commission and sanctions; however, it also set aside the settlement consent order and instructed the parties to propose a trial date – although they could also propose new resolution terms. Last week, a law firm filed its own lawsuit against the CFTC for the agency’s non-provision of documents related to the settlement in response to a request under the Freedom of Information Act. Unrelatedly, the House Committee on Agriculture proposed to reauthorize the CFTC for another five years and to expand the reach of potential aiding and abetting liability to reckless acts in addition to purposeful acts.

***** This is a reckless regulatory overreach.~JJL


Friday’s Top Three
Our top read stories on Friday were led by The Wall Street Journal’s|Tower Research to Pay $67 Million to Settle Spoofing Claims. Second was Bloomberg’s Trading Slump Deepens: It’s as If JPMorgan and Goldman Vanished. Third was the JLN blast from the past article Billy Assimos, the Face of Ceres


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Lead Stories

Asset allocation specialists are the new snake oil salesmen; A more dynamic approach is offered but long-term results are mixed, study shows
David Stevenson – FT
Is it my imagination or are there a rising number of heads of asset allocation lurking in the corridors of investment houses? They are intelligent, inquisitive and analytical but I cannot help wondering what value they add to long-term investing. Are they not just another iteration of active fund management, replacing active stock picking with active selection of asset classes?

Intercontinental Exchange to launch new platform in Abu Dhabi; Exchange to host first futures contract based on state oil company’s Murban oil
Simeon Kerr – FT
Intercontinental Exchange is to launch a new exchange in Abu Dhabi to host the first futures contract based on the state oil company’s Murban crude.

IRS Says ‘Dozens’ of New Crypto, Cybercriminals Are Identified
Laura Davison – Bloomberg
Leads came from weeklong meeting with foreign tax officials; IRS is preparing for audits, prosecution of cyber activities
The IRS’s criminal division identified “dozens” of potential cryptocurrency tax evaders or cybercriminals after a meeting this week with tax authorities from four other countries.

UBS fined HK$400 million for overcharging spread on bond trades for ten years; UBS was found to have overcharged the post-trade spread for around 28,700 client transactions in Hong Kong over a ten-year period.
Hayley McDowell – The Trade
UBS has been fined HK$400 million for overcharging clients over a ten-year period by increasing the post-trade spread on bond trades for 5,000 client accounts.

Zimbabwe Bourse CEO Bemoans 80% Currency Crash Ravaging Market
Ray Ndlovu – Bloomberg
Market badly needs foreign investors, exchange head Bgoni says; Stock prices display ‘dislocation,’ Harare-based analyst says
When it comes to adverse conditions for stock-market trading, Zimbabwe’s bourse belongs in a special category for extreme cases. Consider the challenges confronting Zimbabwe Stock Exchange Chief Executive Officer Justin Bgoni: a local currency that has crashed more than 80% since a peg to the U.S. dollar was ended in February and annual inflation that the International Monetary Fund estimates at 300%.

How Big Investors Cash In on ‘Alternative Data’
Jeff Kearns – Bloomberg
Corporate filings and government reports still guide how many investors view global economics and politics. But more of them are turning to non-traditional information — alternative data, in industry parlance — to supplement official statistics. Torrents of terabytes produced every day by web searches, tweets, credit-card purchases and satellites can be turned into insight on foot traffic at Chipotle, the macroeconomic performance of an African nation — even who’s arriving in Omaha to potentially pursue deals with Warren Buffett.

Bankers in $220 Billion Scandal Offered Gold to Hide Client Cash
Irina Reznik, Ott Ummelas, and Frances Schwartzkopff – Bloomberg
At the height of the Danske Bank A/S dirty-money scandal, the lender started offering gold bars to wealthy clients to help them keep their fortunes hidden, according to documents seen by Bloomberg.

Viral Tweet About Apple Card Leads to Goldman Sachs Probe
Sridhar Natarajan and Shahien Nasiripour – Bloomberg
Tech entrepreneur alleged inherent bias in algorithms for card; The card is part of Goldman’s new main street business lines
A Wall Street regulator is opening a probe into Goldman Sachs Group Inc.’s credit card practices after a viral tweet from a tech entrepreneur alleged gender discrimination in the new Apple Card’s algorithms when determining credit limits.

Apple Co-Founder Says Goldman’s Apple Card Algorithm Discriminates
Shahien Nasiripour and Sridhar Natarajan – Bloomberg
Steve Wozniak urges tougher regulation on credit algorithms; Regulator opens probe after sexism was alleged in viral tweets
Apple Inc. and Goldman Sachs Group Inc., two of the most recognizable companies in tech and finance, are caught up in a growing debate over whether lenders unintentionally discriminate when they use complex models to determine how Americans borrow money.

A $100 Billion Fund Manager Is Debunking Stock-Bubble Theories
Frances Schwartzkopff – Bloomberg
Negative interest rates are unnaturally propping up the stock market and at some point the whole edifice will collapse. It’s an oft-repeated theory, but history suggests it might be wrong.

Deutsche Bank Discussed Payments Issues With U.K. Regulators
Steven Arons – Bloomberg
Lender is said to have met with Bank of England over issue; In one example, 21,000 payments for were delayed
Deutsche Bank AG told U.K. regulators that it’s facing persistent issues in processing high-value payments in the country, a further sign of the IT problems plaguing the lender.

Why Deutsche Bank’s Monte Paschi Scandal Still Matters; That senior bankers have been held accountable for crisis-era misdeeds will be some comfort to taxpayers. But regulators still don’t inspire faith.
Elisa Martinuzzi – Bloomberg
On Friday, judges in Milan convicted executives from the world’s oldest bank, Banca Monte dei Paschi di Siena SpA, for falsifying its accounts in collusion with Deutsche Bank AG and Nomura Holdings Inc. Some 11 years after the misdeeds, it’s hard to have complete faith in the ability of regulators to prevent similar bad behavior.

Ageing Infrastructure Creating Derivatives Market Inefficiencies: ISDA Chief
Editors, Regulation Asia
Firms still take more than a day on average to resolve reconciliations and disputes caused by a lack of data transparency through the trade lifecycle.
Technology has not yet made a real, fundamental difference to how derivatives transactions are managed, according to ISDA chief Scott O’Malia.

Iran Claims to Discover 53 Billion Barrels in New Oil Reserves
By Arsalan Shahla – Bloomberg
Iran discovered an oil field containing the equivalent of 53 billion barrels, potentially boosting its reserves as the OPEC member struggles to overcome the effects of sanctions on its energy industry.

China’s futures trade up about 37 pct in first 10 months
Xiang Bo – Xinhua
China’s trading of futures climbed 37.38 percent in the first 10 months from a year earlier to 235.43 trillion yuan (33.66 trillion U.S. dollars), according to the China Futures Association.

Exchanges, OTC and Clearing

Intercontinental Exchange Partners With ADNOC and Some of the World’s Largest Energy Traders in the 2020 Launch of ICE Futures Abu Dhabi, a New Futures Exchange
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that Abu Dhabi National Oil Company (ADNOC) and nine of the world’s largest energy traders are partnering with ICE on the launch of ICE Futures Abu Dhabi, a new exchange in Abu Dhabi Global Market that will host the world’s first Murban crude oil futures contracts.

Intercontinental Exchange to Launch New Exchange in Abu Dhabi Global Market (ADGM) to Host World’s First Murban Crude Futures Contracts
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that it will launch a new exchange, ICE Futures Abu Dhabi (IFAD), to host the world’s first futures contracts based on Abu Dhabi National Oil Company’s (ADNOC) Murban crude oil.

Margin Update For Ice Futures U.s. Power Contracts
ICE Futures U.S.
The Exchange is changing the margin requirements for the Energy Contract listed below effective from the close of business on Monday, November 11, 2019 and reflected in margin calls made on Tuesday, November 12, 2019.

EEX Recognised As A Foreign Exchange (FBOT) In The US
Press Release
The European Energy Exchange (EEX) was granted the Foreign Board of Trade (FBOT) status by the United States Commodity Futures Trading Commission (CFTC) on 5 November 2019.

Eurex’s ISA Direct gaining traction
Raiffeisenlandesbank Niederösterreich-Wien AG first EU-domiciled bank to join Eurex’s ISA Direct as basic clearing member; ABN AMRO Clearing acting as clearing agent
Eurex Clearing’s direct access model for the buy side – ISA Direct – is gaining traction as it welcomes its first EU-domiciled bank as a member. Raiffeisenlandesbank Niederösterreich-Wien AG (RLB NÖ-Wien) recently became a direct clearing member of the central counterparty’s ISA Direct service, with ABN AMRO acting as clearing agent.

Euro Fixed Income Futures: Definition of reporting and position limits for December 2019
Position limits apply only to long positions in the front month contracts of the products concerned. Reporting limits will be valid from 29 November 2019 after close of trading until 3 December 2019 after close of trading.

SET Launches Interbank Payment System For Securities Transactions From November 11
The Stock Exchange of Thailand (SET) will scale up its capital market payment service by allowing securities trading payment between accounts at different banks from November 11.


JPMorgan invests in financial research startup Limeglass
JPMorgan has taken an undisclosed stake in another of its In-Residence startup graduates, Limeglass, which filters financial research documents for consumption by distinct industry users.

JP Morgan invests in machine learning research analysis firm Limeglass; Limeglass recently completed the JP Morgan In-Residence Program aimed at facilitating FinTech start-ups.
Hayley McDowell – The Trade
US investment bank JP Morgan has made a strategic investment in FinTech firm Limeglass, which deploys artificial intelligence (AI), machine learning and natural language processing (NLP) to analyse institutional research.

Singapore Considers Extending Fintech Funding Beyond 2020
Chanyaporn Chanjaroen – Bloomberg
Current five-year S$225 million program will end in March; Cyber security and AI could get new money, MAS chief says
Singapore’s central bank is poised to extend funding for financial-technology initiatives because the five-year round ending in March has yielded positive results, its top official said.

Singapore FinTech Startup M-DAQ Wins Samsung’s Backing
Yoolim Lee and Michelle Jamrisko – Bloomberg
Singapore fintech startup M-DAQ Pte won the backing of Samsung Group’s venture capital fund in a bid to expand in South Korea and beyond.

AI sensors keep fuel flowing at Europe’s largest refinery; Advanced equipment can detect problems 75 days before they occur
Nathalie Thomas – FT
At the vast Pernis refinery in Rotterdam, where Royal Dutch Shell processes 20m tonnes of crude oil a year, any glitches or unplanned downtime can be costly.


Central bank group BIS taps Benoit Cœuré to lead digital currency push; Basel-based hub seeks to create public alternatives to private payment initiatives
Izabella Kaminska – FT
Benoît Cœuré has been picked to head a new unit of the Bank for International Settlements (BIS) charged with producing public alternatives to private digital currency initiatives such as Facebook’s Libra coin.

BIS: Moving fast and stablising things
Izabella Kaminska – FT
Deep in the underbelly of the looming tower that the Bank for International Settlements calls home in neutrality-loving Switzerland, the bankers who supposedly rule the world queue up to pay for their lunch like everyone else. Here in Basel — like in many other workplaces — physical cash is no longer accepted; workers instead flash their pre-paid cards, stocked with digital currency unique to themselves. The tech is on the dated side of payments innovation, but it still equates — at least in theory — to the current vogue for stablecoins.

Facebook’s Crypto Boss Is Surprisingly Bullish On Bitcoin
Billy Bambrough – Forbes
The bitcoin and cryptocurrency industry has struggled with social media giant Facebook’s troubled plans to launch a bitcoin rival, dubbed libra, next year.
Some have suggested technology companies would be better off adopting bitcoin than attempting to create a centralized alternative, as micro-blogging platform Twitter is doing.

Cryptocurrency market update: Bitcoin pendulum action targets both $8,000 and $10,000
John Isige – FXStreet
The crypto bears are in full swing in action after a weekend of consolidative movements. The slow weekend trading calmed the atmosphere within the crypto space after a devastating Friday price fall. The cryptos leading in declines on Monday include Bitcoin Gold (BTG) at 3.15%, Litecoin (LTC) at 3.15% and Bitcoin (BTC) at 3.10%.

Bitcoin Will Reach $1M, Overtake Gold By 2028: Industry Veteran
Neer Varshney – Benzinga
Bitcoin will overtake gold in terms of market capitalization by 2028 and be worth over $1 million, one of the cryptocurrency’s earliest proponents Bobby Lee suggested in a series of tweets.

Cryptocurrency Scammers Utilize Tinder to Play the Long Con Game
JP Buntinx – The Merkle
Cryptocurrency enthusiasts are often targeted by scammers. One of the most recent experiments to steal Bitcoin from users comes in the form of using Tinder.

HSBC and RBS set to launch new digital banking platforms
Iain Withers, Sinead Cruise – Reuters
British banking heavyweights HSBC (HSBA.L) and RBS (RBS.L) are launching new digital banking platforms, as competition for digitally savvy customers steps up in the face of a wave of online startups.

Stripe CEO Patrick Collison ‘very skeptical’ about cryptocurrencies
Yogita Khatri – The Block Crypto
Patrick Collison, co-founder and CEO of payment processing firm Stripe, is not sure if cryptocurrencies have a future. “I’m very skeptical of anyone who’s adamant that crypto’s gonna work,” Collison said at the WIRED25 conference in San Francisco on Friday.

Singapore’s central bank, JPMorgan develop a blockchain system for cross-border payments
Yogita Khatri – The Block Crypto
The Monetary Authority of Singapore (MAS), the country’s central bank, and investment banking giant JPMorgan have developed a blockchain prototype for cross-border payments.

Ex-Cinnober Blockchain Lead Joins Nordic Crypto Fund to Bet Big on Bitcoin=
Anna Baydakova – Coindesk
Since NASDAQ acquired Cinnober last year, blockchain lead Eric Wall has left the exchange business for a bitcoin investment fund, joining the Oslo, Norway-based Arcane Crypto, he told CoinDesk.

Is digitisation the fourth stage of the hydrocarbon revolution? Why oil and gas 4.0 is really better described as oil and gas 1.4
Nick Butler – FT
The use of technology has helped ensure the profitability of the oil and gas industry despite a 50 per cent fall in prices in five years.

Malaysian Thieves Drill Through Wall to Steal 85 Crypto Machines
William Foxley – Coindesk
Malaysian authorities have apprehended five men charged with stealing 85 bitcoin machines. The police captured the men in a police raid on Nov. 2.


Do 125,000 Farmers Deserve $14.3 Billion? The EU’s system of agricultural subsidies needs reform. A greener approach is a small, but worthwhile, step.
Lionel Laurent – Bloomberg
The European Union’s Common Agricultural Policy — also known as CAP — is a 58-billion-euro ($64 billion) system of farm aid that accounts for the bloc’s biggest single budget expense. And it has long been a punching bag for euroskeptics.

Malaysian court tells former PM Najib to defend himself in 1MDB-linked case
A Malaysian court on Monday ruled that former Prime Minister Najib Razak will have to defend himself against seven counts of criminal breach of trust, money laundering and abuse of power in a case linked to the 1MDB scandal.

US and EU sanctions take toll on Russian oil and gas exploration; Need for western technology hits ambitious projects in Arctic and Siberia
Nastassia Astrasheuskaya – FT
International co-operation is proving to be increasingly important for technological development in the oil and gas industry and nothing makes that more obvious than restrictions on collaboration.

Saudi Aramco’s IPO Is Vulnerable to the Russians; To get the best price for Aramco’s shares, Riyadh needs to stop the oil price from weakening. Yet this leaves it at the mercy of Russia and Iraq.
By Julian Lee – Bloomberg
In finance, as in comedy, timing is everything. Get it right and you have investors (or the audience) in the palm of your hand. Get it wrong and the ensuing silence is painful.

Bonderman Backs Warren Over Trump Despite Private Equity Attacks
By Amanda L Gordon – Bloomberg
Democratic presidential contender Elizabeth Warren’s attacks on private equity firms haven’t stopped one industry giant from supporting her.

JPMorgan’s Dimon Laments Income Inequality, Won’t Assail CEO Pay
By Christopher Condon – Bloomberg
Says he has ‘nothing to do’ with setting his compensation; Dimon confident U.S. business sector is ‘not petering out’
JPMorgan Chase & Co.’s billionaire Chief Executive Officer Jamie Dimon called U.S. income inequality a “huge problem,” but he stopped short of saying America’s top executives were being paid too much.

Chinese official calls for stronger Hong Kong security laws; Legislators, administrators, judiciary and top leader must be ‘patriots’
Christian Shepherd and Nicolle Liu – FT
A top Chinese official in Hong Kong said a lack of robust security legislation is partly to blame for the nearly five months of protests and strengthening these laws is now an “urgent task”, after the Communist party signalled a desire for legislative and education reforms in the city.


New York Stock Exchange LLC Letter Of Acceptance, Waiver, And Consent No. 2019-01-00041
During the periods from September 2016 through December 2018, UBS Securities LLC violated NYSE Rules 132 and 7.33 (for certain orders sent after July 27, 2017) by submitting trades with inaccurate account type identifiers for comparison and/or settlement, and NYSE Rule 3110 by failing to implement adequate supervisory systems and controls related to the submission of account type identifiers. Consent to a censure and S125,000 fine.

UBS Fined for Misleading and Overcharging Wealthy Clients for a Decade; Hong Kong regulator says Swiss bank regularly added extra fees and padded-out spreads on bond and structured-note trades
Margot Patrick – WSJ
UBS UBS -0.88% Group AG overcharged and misled wealthy clients for a decade without detection, Hong Kong’s securities regulator said Monday, as it fined the bank 400 million Hong Kong Dollars (US $51 million) and demanded HK$200 million in customer compensation.

UBS Fined by Hong Kong for a Decade of Overcharging Clients
Marion Halftermeyer – Bloomberg
Bank is accused of overcharging clients in wealth management; UBS is to reimburse 5,000 Hong Kong-managed wealth clients
Hong Kong regulators fined UBS Group AG 400 million Hong Kong dollars ($51 million) for overcharging global wealth management clients during almost a decade and flagged concerns about serious and systematic problems with the bank’s internal controls.

CFTC Orders Wells Fargo to Pay Over $14 Million for Violating Swap Dealer Business Conduct Standards
The U.S. Commodity Futures Trading Commission today issued an order filing and settling charges against Wells Fargo Bank, N.A. for violating multiple swap dealer business conduct standards. Specifically, Wells Fargo failed to deal with a counterparty in a fair and balanced manner based on principles of fair dealing and good faith. Wells Fargo also failed to implement and monitor systems to ensure compliance with policies and procedures regarding communicating with counterparties in a fair and balanced manner. The order requires Wells Fargo to pay a civil monetary penalty of $10 million, restitution of $4.475 million, and to cease and desist from violating the CFTC’s business conduct standards.

Investing and Trading

Unloved Assets Join Market Rally in Latest Sign of Optimism; Several factors weighing on markets, such as Brexit and U.S.-China trade, are showing signs of better-than-expected outcomes
Ira Iosebashvili and Amrith Ramkumar – WSJ
Investors are piling into beaten-up assets from commodities to emerging-market stocks, powering a broad rally that reflects a brightening outlook for the global economy.

ESG Funds Enjoy Record Inflows, Still Back Big Oil and Gas; Despite claims to consider environmental sustainability, ESG funds invest in Exxon and Occidental Petroleum
Akane Otani – WSJ
Funds with a focus on socially responsible investing are enjoying a record year of inflows. But many such portfolios aren’t as clean as investors might expect.

Barrick Gold chief eyes growth in ‘strategic’ copper; Shift to cleaner energy set to lift demand for copper, while supply is under pressure
Neil Hume – FT
Barrick Gold is looking for opportunities to grow its copper business through either exploration or acquisitions, according to its chief executive Mark Bristow.

Christine Lagarde faces ECB council push to overhaul policymaking; Some central bankers want votes on every rate-setting decision
Martin Arnold – FT
Christine Lagarde is to face calls for an overhaul of how the European Central Bank decides monetary policy as senior colleagues use the start of her presidency to argue for changes including formal votes on setting interest rates.

Depressed Oil Prices Create Tough Environment for Aramco IPO—Energy Journal
Neanda Salvaterra – WSJ
Low oil prices are taking a toll around the world. In the midst of all the fanfare around Saudi Aramco’s imminent stock market debut, it’s easy to overlook just how tough the environment is in the energy business right now.


Asset management: how safe is your job? Fresh opportunities are on the horizon with ESG but also several traditional roles are at risk
Jennifer Thompson – FT
Will your job exist five years from now, or even in 12 months? For most people working in fund management the answer has long been a resounding yes. Although technology has brought big changes, not least in the way investment decisions are made, the traditional staffing structure of many groups has remained consistent: a core of well-paid portfolio managers at the top of a pyramid supported by sales and distribution teams and a range of administrators at its base.

Invesco bleeds $1bn a week as it tops worst-selling league table; Atlanta-based group hit by moves away from active managers and weak UK performance
Owen Walker – FT
Invesco’s core range of investment funds have bled more than $1bn a week over the past 12 months, placing the Atlanta-based group at the top of the 2019 rankings of the worst-selling global asset managers.

Deutsche Bank tech failings hit thousands of payments; Bank retreats on letter to BoE that CHAPS improvements were on track
Stephen Morris and Caroline Binham – FT
Deutsche Bank has been forced to admit to regulators its role in the UK payment system still suffers serious problems, years after it was first placed in remediation, which has led to tens of thousands of transactions for clients such as Amazon being held up.

DWS chief on the ‘gem’ inside Deutsche Bank; Asoka Wöhrmann says rise of passive investing and wealth growth in Asia are causing ‘tectonic shifts’
Chris Flood – FT
Asoka Wöhrmann took on one of the investment industry’s most difficult roles last year when he was promoted chief executive of DWS, Germany’s largest asset manager.

AllianzGI chief to depart after 3 years at the helm; Andreas Utermann to be replaced by Tobias Pross amid leadership reshuffle at asset manager
Siobhan Riding – FT
Allianz Global Investors, the EUR557bn asset manager, has announced the departure of its chief executive after just three years in sole charge of the company.

Credit Suisse names David Miller head of investment banking; Swiss bank hopes to lift performance at struggling division
Stephen Morris and David Crow – FT
Credit Suisse has named David Miller the new head of its investment banking and capital markets business, replacing James Amine after four years in charge, as the lender looks to improve performance at the division.

Credit Suisse Picks New Head of Struggling Investment Bank
Patrick Winters – Bloomberg
Jim Amine leaves post to head private credit in New York; Veteran David Miller steps in to head investment bank unit
Credit Suisse Group AG’s investment bank chief stepped down, adding to months of turmoil at the top that started with the departure of its wealth management head and culminated in a spying scandal.

OANDA Names Saxo’s Lucian Lauerman Head of Business Solutions; Lucian served 7 years at the Danish broker, most recently as Global Head of Electronic Distribution.
Aziz Abdel-Qader – Finance Magnates
Lucian Lauerman, global head of electronic distribution at Saxo Bank, leaves the Danish broker after seven years of work to join OANDA as Head of Solutions for Business.

Exclusive: Goldman Sachs plans shift from revenue goal at first investor day
Matt Scuffham, Elizabeth Dilts Marshall – Reuters
More than two years ago, Goldman Sachs Group Inc (GS.N) told investors it would find $5 billion in fresh annual revenue by 2020. Now, the bank may move away from that goal to focus on a wider range of metrics.

Former Lloyd’s of London boss: Culture problems will not be fixed in my lifetime; Dame Inga Beale ‘not surprised’ by harassment allegations at the 331-year-old insurance market
Bérengère Sim and Shruti Chopra – Financial News
The former boss of Lloyd’s of London, which has been beset by allegations of sexual harassment, has told Financial News in an exclusive interview that she believes problems at the 331-year-old insurance market will not be fixed in her lifetime.

UBS wealth management co-head Khan unveils plans to grow business: paper
UBS (UBSG.S) executive board member Iqbal Khan wants to expand credit to rich clients as a way to grow the Swiss bank’s wealth management business, it was reported on Sunday.


London races farther ahead as renminbi trading hub; Report confirms place as world leader in foreign exchange and eases Brexit fears
Eva Szalay – FT
London is stretching away from its rivals as the world’s biggest centre for trading the renminbi outside China, easing fears that the impact of Brexit could threaten its status as the world’s dominant foreign-exchange hub.

Aussie pension funds in talks to create nation’s largest institutional investor; Industry consolidation accelerates amid regulatory push for greater efficiency
Chris Flood – FT
Two of Queensland’s largest pensions funds confirmed last week they were in talks about a merger that would create the biggest entity in Australia’s A$2.9tn superannuation industry.

Shard: the London broker at the heart of Lars Windhorst’s network; Controversial German financier has enjoyed years of support from little-known brokerage
Cynthia O’Murchu and Robert Smith – FT
When one of Europe’s best performing asset managers plunged into crisis this summer, a little-known brokerage took a contrarian view on the illiquid debt securities at the heart of the affair.

Dutch pension funds set to pivot from passive to active management; Strong demand for sustainable investments prompts plans to restructure portfolios
Siobhan Riding – FT
Passive fund assets in the EUR1.4tn Dutch pension fund market are approaching a turning point, as rampant demand for sustainable investments prompts investors to pivot to active management.

China scraps profitability rules for listings on Shenzhen’s ChiNext; Regulatory change will help tech-focused exchange compete with Shanghai’s Star Market
Hudson Lockett – FT
China has scrapped profitability requirements for companies seeking to list stocks on Shenzhen’s technology-focused ChiNext market, kicking off a battle for start-up listings following the high-profile launch of Shanghai’s Star Market earlier this year.

Venezuela selling cut-price oil as US sanctions bite; Cut off from access to biggest market, Caracas battles to buy supplies for its industry
Mariana Zuniga – FT
Venezuela is being forced into selling cut-price oil as US sanctions against President Nicolás Maduro’s government start to bite into its most important source of revenue.

Australia banks brace for tighter regulation and weaker economy; Biggest financial institutions struggle with fallout from misconduct inquiry
Jamie Smyth – FT
Australian banks are facing the same type of regulatory onslaught their UK peers experienced in the wake of the 2008 financial crisis and an overcorrection is “seemingly inevitable”, said Brian Hartzer, chief executive of Westpac.

How some financiers are benefiting from India’s shadow banking crisis; Many shadow lenders have been effectively shut out of the nation’s credit market as the more than 15-month-old banking crisis raises investor wariness about the financiers’ ability to refinance debt
Divya Patil & Anto Antony – Bloomberg
As the shakeout in India’s credit market shows few signs of abating, one group of financiers is benefiting from the turmoil: shadow banks that provide loans in exchange for gold.


Brexit ‘Paralysis’ Leads Moody’s to Lower Outlook on U.K. Debt
The ratings company cited little prospect for reduction in government spending, though investors remain sanguine, with U.K. interest rates not far from record lows
Alex Frangos – The Wall Street Journal
Moody’s Investors Service lowered its outlook on the U.K.’s debt rating, saying the country’s handling of Brexit has shown its once robust public institutions are at risk of losing their predictability and cohesiveness.

Nigel Farage Won’t Fight Tories in Election Boost for Boris Johnson
Tim Ross and Kitty Donaldson – Bloomberg News
Nigel Farage dramatically boosted Prime Minister Boris Johnson’s chances of winning a majority by announcing that his Brexit Party won’t fight the Conservatives at the election. The pound rose.


What It Takes, by Stephen Schwarzman; An insightful business manual from the co-founder of Blackstone misses the big picture
Review by Stefan Wagstyl – FT
Stephen Schwarzman learnt the rules of capitalism early. As a teenager, the future billionaire financier set up a lawn-mowing business employing his younger twin brothers. They did all the mowing; he kept half the money.

Book returns surge 240% after City of Chicago eliminates fines
ABC7 Chicago
Chicago public libraries have seen a 240% increase in the number of books returned since the city’s mayor eliminated overdue fines, according to a library official.
Library Commissioner Andrea Telli testified at a budget hearing Wednesday, telling City Council members that abandoning the library fines policy has been instrumental in luring in both patrons and books.

Security Researchers Discover Flaws in U.S. Cash Machines
William Turton – Bloomberg
Criminals could, in theory, drain cash, steal credit card info; Vulnerabilities in machines made by Nautilus Hyosung America
A pair of security researchers has discovered two vulnerabilities in ATMs widely used across the U.S. that could allow a determined criminal to steal cash and customer data.

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