Bear Stearns Meltdown Wreck; Decision time for Michael Spencer; Deductive Reasoning or Insider Trading?

Mar 19, 2018

First Read

Potential CME-NEX Deal Is Full of History, Dilemma, Risk and Reward
John J. Lothian – JLN

For many years, the Chicago Board of Trade had cash treasuries envy, wanting to add the trading of cash treasury bonds and notes to its offerings. For many years, the CME has had cash currency trading envy.

Both exchanges, now part of the CME Group, have tried to compete in cash Treasury and FX through various collaborations and initiatives. None of them succeeded.

Chicago Board Brokerage and FXMarketSpace are long gone, but the desire to add treasuries and cash FX trading has never disappeared.

Now, if CME Group’s confirmed interest in NEX Group becomes a deal, it can add both in a single deal that will give them a major FX platform in EBS and a dominant U.S. Treasury market in Brokertec

Ten years ago, adding both would have been a huge strategic win. It would be the kind of move that would get validation from management gurus and investment bankers everywhere.

Today though, this great synergistic move misses the biggest risks facing the CME Group. Many consider the CME Group to be a monopoly and the forces at work today are targeting that dominant position with new technologies for trading and clearing of products.

For the rest of the commentary, click HERE

++++

Hits & Takes
JLN Staff

The FIA put together a great International Conference in Boca Raton, Florida last week. They even had the weather cooperate, which was nice.

The JLN team on site stayed at an Airbnb house in Deerfield Beach with a pool. The only time we used it was for the shooting of “The Spread” when Spencer Doar took to the water to deliver his riff on options from the pool. There are plenty of outtakes.

The JLN team shot something like 25 video interviews and another 10 or so quick hits for a tribute video for Mike Dawley that was played during Wednesday’s lunch. The interviews we did with exchange and industry leaders will be published in JLN in the coming weeks.~JJL

If you are wondering what guys like Keith Todd and Jim Oliff are up to these days, they’ve started a venture called KRM22, which aims to address risk management across a firm’s operations. They call it risk management as a service (RMaaS).~JK

Cboe’s bitcoin futures average daily volume since inception is 6,740. Last week’s ADV through Thursday was 12,322.~SD

++++

Sponsored Content

Renato Mariotti

++++

CME Group Statement Regarding Potential Offer for NEX Group
PRNewswire
CME Group Inc. (“CME”) notes the announcement made by NEX Group plc (“NEX”) yesterday and confirms that it has made a preliminary approach regarding a potential acquisition of NEX.
/goo.gl/abC21m

***** The clock is ticking.~JJL

++++

Crowded Trades Backfire In Basketball Too
Charley Grant – WSJ
It’s well known on Wall Street that popular trades can sometimes backfire spectacularly. Men’s college basketball fans and punters got to learn that lesson Thursday night. March sadness came quickly for those betting on the Arizona Wildcats to go far in the NCAA tournament. Fourth-seeded Arizona, which lost by 21 points to 13-seeded University of Buffalo, had been an unusually popular choice for success among fans.
/goo.gl/aKnNRJ

***** A sure thing is not always a sure thing.~JJL

++++

Bridging the Week: March 12 to 16 and 19, 2018 (Swaps De Minimis Level; SLR; SEFs; Insider Trading; ICOs)
Gary DeWaal – Bridging the Week
J. Christopher Giancarlo, Chairman of the Commodity Futures Trading Commission, laid out his priorities for the remainder of 2018 in a speech before the FIA at its annual conference last week. Unrelatedly, the Securities and Exchange Commission filed suit against the former chief information officer of a division of a major company that was hacked and sustained a substantial data breach last year for trading on knowledge of the breach prior to public disclosure of the incident. He was also criminally indicted for his actions.
/goo.gl/UsQ5Er

++++

Ex-Bear Stearns CEO Is Off Wall Street But Still Mixing It Up at the Bridge Table
Justin Baer – WSJ
James Cayne is ‘retired and doing what he loves the best’ By March 17, 2018 8:00 a.m. ET A decade after the financial crisis, the U.S. economy is cruising again and the stock market keeps climbing. But for many of the men and women at the center of the extraordinary events that nearly led to the collapse of the U.S. banking system, those frantic days changed their lives permanently.
/goo.gl/b6jsSR

****Not sure when I’ll ever get the chance in a comment to say this, so, RIP Omar Sharif. As he memorably said, “Acting is my business, bridge is my passion.” ~SD

++++

Friday’s Top Three
Our top story from Friday was Bloomberg’s Spencer’s NEX Group Rises Most in 20 Years on CME Approach. Second went to the FT’s piece that seems a little out of place today Nasdaq CEO says era of exchange consolidation is over. Third went to the FT’s How Jamie Dimon came to rue his Bear Stearns deal, about what he inherited and what they still own.

++++

MarketsWiki Stats
122,305,123 pages viewed; 23,042 pages; 212,072 edits
MarketsWiki Statistics

++++

Sponsored Content

IFM Roundtable

 

Lead Stories

How the Bear Stearns Meltdown Wrecked Something More Valuable than Money; The financial crisis shattered investors’ trust in markets
Jason Zweig – WSJ
Of all the losses triggered by the meltdown of Bear Stearns Cos. a decade ago this week and the crisis that followed, perhaps the biggest was the public’s loss of trust in markets themselves.
/goo.gl/RgDEmY

Decision time for Michael Spencer and his ‘beautiful’ creation Nex; Preliminary bid from CME comes after harder than expected first year for new business
Philip Stafford – FT
Michael Spencer has not always admired CME Group, the $56bn US futures exchange considering a bid for Nex Group, the trading company he runs.
/goo.gl/phn45N

Deductive Reasoning or Insider Trading? It’s a Tough Call; Sometimes people profit from being clever, not inside information.
Matt Levine – Bloomberg
We’ve talked about what I called “insider guessing”: The Securities and Exchange Commission and federal prosecutors brought charges against an Equifax Inc. executive who was allegedly able to figure out that his company had been hacked, and who sold a bunch of Equifax stock, but who had never explicitly been told about the hack. The SEC and Justice Department think that this would be insider trading, and I think I more or less agree; in any case, I said that “it’s not gonna look great to a jury.”
/goo.gl/aupozf

Worldwide bidding battle sparked for Spencer’s broking giant Nex
Ben Marlow – The Guardian
A global bidding war is set to erupt for Nex Group, the financial technology giant created by City veteran ≠Michael Spencer more than 30 years ago with two friends and a single trading screen. A takeover approach from the owner of the Chicago Mercantile Exchange (CME) has sparked a frantic scramble among other exchanges, which were wrong-footed after it pounced as the industry held its annual jamboree in Boca Raton, Florida.
/goo.gl/BrJhJh

US bank derivatives books larger since rescue of Bear Stearns; Total value of exposures at 5 of the biggest lenders up 12% over past decade
Ben McLannahan – FT
At the end of January 2008, in what would turn out to be its final annual report, Bear Stearns went into some detail about its big book of derivatives. The book had a notional value of $13.4tn at the end of November, Bear said, up more than 50 per cent from a year earlier. A two-notch downgrade in the firm’s credit ratings, it added, would require it to come up with an extra $353m in collateral.
/goo.gl/nxuLg4

Nex/Michael Spencer: charging rhinos; Price could be steep if pachyderms join the charge
FT Lex
An attacking rhino lacks discrimination and has trouble stopping. The same goes for heavyweight bidders for strategic assets. The prospect of Michael Spencer, a City entrepreneur and rhino conservationist, auctioning Nex Group has therefore excited minority investors. The price could be steep if a herd of pachyderms joins the stampede.
/goo.gl/1B4Duy

Natural Gas Under Assault in Some States After Brief Reign at the Top
Erin Ailworth – WSJ
Natural gas overtook coal as the top fuel for making electricity in the U.S. two years ago. But its brief reign is under assault in some parts of the country.
/goo.gl/BRenBK

Federal Trade Commission brings the hammer down on crypto ponzi schemes
Eric Brackett – Digital Trends
Cryptocurrencies, especially Bitcoin, saw a major surge in value and popularity last year. Unfortunately, this also means that scams and ponzi schemes became more prevalent. In response to this, the Federal Trade Commission has stepped into the fray. The FTC has issued restraining orders and frozen the assets of three defendants who were part of the Bitcoin Funding Team and My7Network.
/goo.gl/YM9NcS

From a $126 Million Bonus to Jail: The Fall of a Star Trader
Suzi Ring, Gavin Finch, Franz Wild – Bloomberg
Christian Bittar pleaded guilty to Euribor-rigging in London; The ex-Deutsche Bank trader once got a $126 million bonus
Christian Bittar was once among Deutsche Bank AG’s highest-paid traders, a math whiz who earned a near 90 million-pound ($126 million) bonus in 2008 alone. Now he’s sitting in a U.K. prison.
/goo.gl/8aPKxd

Fixing Finance’s Gender Imbalance; Firms need a stronger link between pay and gender representation.
Mark Gilbert, Elaine He – Bloomberg
The Women in Finance Charter, an initiative from the U.K. Treasury to improve gender balance in the finance industry, just released its first progress report. Frankly, it makes for depressing reading. But there’s a glimmer of hope in one of the remedies it proposes.
/goo.gl/N9f5Ee

Why Money Managers Are Paid So Much Is a Mystery; There might be lots of reasons, but market-beating performance isn’t one of them.
Noah Smith – Bloomberg
Why do workers in the financial industry get paid so much? There are many possible explanations, none of them completely satisfying. The financial industry commands a much larger share of the U.S. economy than in the past, causing some to worry that the industry gets more money than its economic contributions merit. The question is also important to workers thinking of going into finance, but for a different reason: Everyone wants to know how to get the big bucks.
/goo.gl/vjtcJF

Water and Money’s $1 Trillion Relationship Crisis; With the U.S. and other countries needing massive water infrastructure spending, private capital will have to play a part.
Chris Bryant – Bloomberg
At this rate, Cape Town won’t be the last big city to almost run out of water. Population growth, urbanization, old infrastructure, pollution and climate change: all are a recipe for more scarcity.
/goo.gl/V5upVP

Hong Kong watchdog halts ICO sale
Don Weinland – FT
Hong Kong’s securities watchdog has intervened in an initial coin offering, leading the issuing company to halt the sale of the digital currency to Hong Kong buyers.
/goo.gl/WQi6ag

Exchanges, OTC and Clearing

Blockchain, Bitcoin and Co: Understanding the Technology; Deutsche Boerse’s Capital Markets Academy is organizing its first seminar from June 20 to 21
Deutsche Boerse
Deutsche Boerse’s Capital Markets Academy is organizing its first seminar from June 20 to 21
Blockchain technology was once developed as the basis for the crypto-currency Bitcoin. But it can do more – for example in digital business – to enable and archive transactions directly from user to user.
/goo.gl/zAXD4X

Euronext announces supervisory board changes
Euronext
Euronext today announces that Rijnhard van Tets, Chairman of the Supervisory Board of Euronext N.V. has decided to step down following the Annual General Meeting of Shareholders (AGM) to be held on 15 May 2018. Rijnhard van Tets has notified the Supervisory Board that he will not be available for a new term. The Supervisory Board has elected the current Vice-Chairman Dick Sluimers as its next Chairman, subject to regulatory approval.
/goo.gl/ohQE5J

Fixed income ETF options – 4 video interview series with BlackRock
Eurex
/goo.gl/zHkdyY

Nigerian Stock Exchange Celebrates Global Money Week To Further Promote Financial Literacy
Mondovisione
The Nigerian Stock Exchange (“NSE” or “The Exchange”) is pleased to announce that it commemorated the 2018 Global Money Week themed, Money Matters Matter, between Monday, March 12, 2018 and Friday, March 16, 2018, with a series of educational programs aimed at teaching children and youths about the importance of financial literacy.
/goo.gl/8XDggt

Exchange Publishes its Latest Listing Committee Report
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), on Monday published its Listing Committee Report for 2017, a review of the Listing Committee’s work in upholding market quality during the year and an overview of its policy agenda for 2018 and beyond.
/goo.gl/A1rM7u

Adjustment of Power Assets Structured Products, Futures and Options
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) has announced the arrangements for the adjustment to Power Assets Holdings Ltd (Power Assets) structured products, futures and options to account for Power Assets’ special interim dividend.
/goo.gl/YrY1b6

Intercontinental Exchange Announces Transition of Credit Default Swap Open Interest from CME Group to ICE Clear Credit; Launches CDX Clearing at ICE Clear Europe
ICE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced the transition of index credit default swap (CDS) open interest from CME Group to ICE Clear Credit, ICE’s U.S.-based CDS clearing house. This has been the first transition of its kind and it follows CME Group’s announcement in September 2017 that it was exiting the CDS business and would work with customers to transition open positions to an alternate clearing house.
/goo.gl/SmWRiX

Introduction of Artificial Intelligence to Market Surveillance Operations
JPX
Japan Exchange Regulation (“JPX-R”) and Tokyo Stock Exchange, Inc. (“TSE”) decided to apply artificial intelligence (AI) to market surveillance operations to detect such misconduct as market manipulation. Deployment of AI to market surveillance operations will commence today.
/goo.gl/E8LsYo

Fintech

Cyber attacks: the risks of pricing digital cover; With policies against online breaches to be worth $10bn by 2020, insurers rush to gain expertise
Oliver Ralph – FT
US drugmaker Merck was hit by a massive cyber attack on June 27 last year. Manufacturing, research and sales operations around the world were all gummed up. At one point the company had to borrow supplies of a vaccine for the human papilloma virus from a US government stockpile in order to meet demand.
/goo.gl/XgvsYB

How digital footprints paved way to weaponising social media; Profile data used to create algorithms to understand the motivations of millions of users
Murad Ahmed in London, Hannah Kuchler in San Francisco, Matthew Garrahan in New York – FT
If you “like” curly fries on Facebook, you are more likely to have a high IQ.
/goo.gl/8e7ks9

Use Your Brain: Artificial Intelligence Isn’t Close to Replacing It; A mind-uploading startup shows how far we are from true artificial intelligence.
Leonid Bershidsky – Bloomberg
Nectome promises to preserve the brains of terminally ill people in order to turn them into computer simulations — at some point in the future when such a thing is possible. It’s a startup that’s easy to mock. 1 Just beyond the mockery, however, lies an important reminder to remain skeptical of modern artificial intelligence technology.
/goo.gl/zSEKA1

Cryptocurrencies

Overstock Misses out on Bitcoin Magic
Paul Vigna – WSJ
Everybody, it seems, got rich off bitcoin and cryptocurrencies in 2017. After the digital currency’s 1,375% gain, rookie crypto investors made money. Veteran crypto investors made money. Which is why the 2017 loss by Overstock.com’s Medici Ventures unit is such a head-scratcher.
/goo.gl/FYA5GX

Blockchain Enters Opaque Territory With First Structured Note
Yakob Peterseil – Bloomberg
London-based Marex creates first note using crypto technology; Industry’s sales fell 3% from last year on regulatory shift
Blockchain, the technology promising to usher in simplicity and transparency to finance, is entering one of the industry’s most obscure corners.
/goo.gl/6fe6Gb

Ripple’s new chief market strategist: Crypto regulation will ‘separate the wheat from the chaff’
Daniel Roberts – Yahoo Finance
Cory Johnson was a founding editor of Slam Magazine, Vibe Magazine, and The Street, and most recently a host on Bloomberg TVónow he’s a cryptocurrency executive. Johnson joined Ripple this month as its first chief market strategist.
/goo.gl/uo7CJT

Cryptocurrency leaves investors vulnerable to hacking
Ed Zwirn – NY Post
Cryptocurrencies aren’t called “crypto” for nothing. A large part of the attraction of bitcoin, ethereum and other digital currencies for investors is that the blockchain transactions through which they function are anonymous and decentralized.
/goo.gl/HuDX7z

Bitcoin is falling out of favor with one key constituencyócriminals, says report
Aaron Hankin – MarketWatch
The price of the No. 1 digital currency, bitcoin, has been on a punishing tailspin of late, falling 40% in 2018 and more than 70% since its peak in December of 2017. And perhaps adding insult to cyber injury, the popular virtual currency finds itself out of favor with another group of users.
/goo.gl/iM5fCo

AI and Blockchain Tech Are The Future of Successful Trading
Reuben Jackson – Readwrite
In the past five years, the global financial industry has experienced major disruptions thanks to innovative technologies in AI, Machine Learning, and Blockchain. The rate at which supercomputers are taking over the financial sector is leaving no doubt that the future of finance will largely depend on computer scientists and big data experts rather than the traditional financial advisors and traders.
/goo.gl/w9BDZy

Bundesbank’s Buch adds to calls for cryptocurrency regulation
Gernot Heller – Reuters
Regulation of cryptocurrencies must be considered, Bundesbank vice president Claudia Buch told Reuters, even though she does not believe they pose a threat to financial stability.
/goo.gl/GEqFNM

Ether plunges after SEC says “dozens” of ICO investigations underway
Ars Technica via Yahoo
The price of ether, the cryptocurrency of the Ethereum network, has fallen below $500 for the first time this year. The decline comes days after a senior official from the Securities and Exchange Commission acknowledged that the agency had “dozens” of open investigations into initial coin offerings. The price of ether has fallen 19 percent in the last 24 hours, from $580 to $470. “We’re doing obviously a lot in the crypto space, and we’re seeing a lot in the crypto space,” said Stephanie Avakian, co-director of the SEC’s Enforcement Division, at a conference on Thursday.
/goo.gl/bcXDui

Bitcoin Mining Banned for First Time in Upstate New York Town
Lily Katz – Bloomberg
Plattsburgh places 18-month moratorium on mining operations; Rule breakers to pay up to $1,000 each day they violate law
A small lakeside town in upstate New York is fed up with Bitcoin miners using up so much of its low-cost electricity.
/goo.gl/KnCpAb

Investors in Bitcoin and other cryptocurrencies face hefty tax bills; According to the Internal Revenue Service, anything purchased using a digital currency is liable to be taxed as a capital gain
Edward Helmore – The Guardian
The rollercoaster ride for some cryptocurrency investors could be about to take another tax-time lurch, according to experts, as the taxman looks for his share of transactions made using bitcoin and its like.
/goo.gl/8McGsN

Fewer Americans Hold Cryptocurrencies Than You Probably Think
Olga Kharif – Bloomberg
More than 90 percent of American adults don’t own cryptocurrencies — and most have a lot of concerns about the coins, a new survey from Finder found.
/goo.gl/JFYDFD

Is Telegram’s ICO Overvalued? Here’s One Way to Figure It Out
Olga Kharif – Bloomberg
Aaron Brown looked at usage of internet websites and Silk Road; The tokens may be worth $200 billion in five years, he said
Messaging app Telegram is finishing up the biggest digital token sale in history, hoping to raise $2.55 billion. Valuing it requires unusual computational gymnastics like pondering illegal weapons sales.
/goo.gl/qkS1wa

Twitter is reportedly planning to ban cryptocurrency ads; Changes in Twitter’s advertising policies could come within two weeks
Andrew Liptak – The Verge
Following Facebook and Google’s footsteps, Twitter is reportedly planning to ban advertisements for cryptocurrencies and initial coin offerings (ICOs), according Sky News.
/goo.gl/aFZj2h

Politics

Behind the Dodd-Frank Freakout Elizabeth Warren thinks moderate Democrats are helping Trump to gut Obama’s Wall Street reforms. Is she wrong?
Michael Grunwald – Politico
Nellie Liang spent six years running the Federal Reserve’s financial stability division, which was created after the financial crisis of 2008 to try to prevent another one. So she has paid close attention to the bipartisan legislation the Senate passed this week to loosen some bank regulations. Liberal critics like Elizabeth Warren have savaged the bill as a recipe for the next financial catastrophe, an egregious sellout to Wall Street, and a dramatic rollback of the Dodd-Frank financial reforms.
/goo.gl/FbhHRQ

Republicans Find Undoing Bank Rules Is Easier Said Than Done
Alan Rappeport and Emily Flitter – NY Times
Republican have spent years hoping to roll back the tough bank regulations imposed after the 2008 financial crisis. The reality, they are finding, is that it is easier said than done.
/goo.gl/hL4VR9

Donald Trump’s other attorney general problem; In Illinois, the race for the state’s top legal job has turned into a Democratic primal scream against the president.
Natasha Korecky – Politico
Turn on any TV in Illinois and you’ll see ads from a slew of candidates for state attorney general who are vowing to battle a notorious tyrant, a racist fear-monger whom they view as a threat to democracy itself.
/goo.gl/MTDDM2

Democrats Regain Double-Digit Advantage Over GOP in Voter Sentiment Poll; Republicans lost ground even as Trump’s job-approval rating improved
Janet Hook – WSJ
Democrats have regained a double-digit advantage over Republicans on which party voters want to control Congress after the 2018 midterm elections, while at the same time President Donald Trump’s job approval has improved, a new Wall Street Journal/NBC News poll has found.
/goo.gl/r93Vmp

Facebook in storm over Cambridge Analytica data scandal; Calls for Zuckerberg to testify after whistleblower says 50m users were exploited
Hannah Kuchler and Matthew Garrahan – FT
Facebook is under increasing pressure to explain how data collected on 50m users were exploited for political gain, following claims that data firm Cambridge Analytica used the leaked information to help Donald Trump win the US presidency.
/goo.gl/tbYtzd

Newly Emboldened, Trump Says What He Really Feels
Maggie Haberman – NY Times
For months, President Trump’s legal advisers implored him to avoid so much as mentioning the name of Robert S. Mueller III, the special counsel, in his tweets, and to do nothing to provoke him or suggest his investigation is not proper.
/goo.gl/dwV1Yx

Regulation

CFTC set to partner with SEC on CDS supervision; Move could open the door to single-name clearing mandate, say experts
Robert Mackenzie Smith – Risk.net
The top US markets regulators have reached a tentative agreement to jointly regulate single-name credit default swaps (CDS), Risk.net has learned. The deal will pave the way for the Commodity Futures Trading Commission to propose a clearing rule for single-name CDS, fulfilling a key provision of the Dodd-Frank Act.
/goo.gl/PWLeag

SEC liquidity rule delay a double-edged sword for asset managers; Some mutual funds say a staggered approach to implementation will add to their workload
Faye Kilburn – Risk.net
Last month, the US Securities and Exchange Commission handed mutual funds a gift in the form of a six-month delay in implementation of the trickier aspects of its liquidity risk management (LRM) programme rule.
/goo.gl/YVQmC5

Court Overturns Obama-Era Rule on Retirement Planners
Tara Siegel Bernard – NY Times
A federal appeals court ruled on Thursday that the Department of Labor overstepped its authority when it wrote a rule that required financial professionals, including brokers and insurance agents, to put their customers’ financial interests ahead of their own.
/goo.gl/51De4W

The Art of a Banking Compromise; On fixing Dodd-Frank, the House shouldn’t be a potted plant.
The Editorial Board – WSJ
After passing a bipartisan banking bill 67-31 that would remedy some of the Dodd-Frank Act’s flaws, many Senators want to call it a wrap. But Congress is a bicameral legislature, and the House deserves an opportunity to improve on the Senate’s work.
/goo.gl/C3XizP

Overstock Says SEC Crypto Probe Threatens Business, ICO
Lily Katz, Jeran Wittenstein – Bloomberg
Shares plummet as retailer issues warning during earnings; Investigation may have ‘material adverse effect,’ firm says
Overstock.com Inc. didn’t disappoint the crowd of short sellers who bet against the online retailer ahead of its earnings report.
/goo.gl/74hqCa

Investing and Trading

Why It Matters That the Libor-OIS Spread Is Widening: QuickTake
Alex Harris – Bloomberg
Short-term borrowing costs in the U.S. have risen to levels unseen since the financial crisis, and recent moves in two closely watched indicators — the London interbank offered rate and its spread with the Overnight Index Swap rate — are causing some consternation. The spread has expanded to its widest level in more than eight years, raising questions about whether risks might be brewing within credit markets.
/goo.gl/4fUo6Z

Opinion: How financial advisers can give investors a socially conscious portfolio that works
Greg Vigrass – MarketWatch
Two powerful and seemingly disparate forces are shaping wealth management today: technology and sustainable investing.
/goo.gl/kyDoiA

Claire’s Becomes Latest Retailer to Go Bankrupt
Emma Orr, Katie Linsell – Bloomberg
Tween jewelry chain Claire’s Stores Inc. has become the latest victim of the retail apocalypse.
/goo.gl/dUrYv7

Federal Reserve meeting to set tone for markets and investors; Jay Powell will hold his first press conference as chair of the US central bank
FT Reporters
A new trading week will be dominated by the US Federal Reserve meeting. Investors are expecting an interest rate tightening, and scrutinising of the accompanying statement, while closely following Jay Powell undertaking his first press conference as chair of the central bank.
/goo.gl/1uhSSh

Stockpickers show signs of turnround after lagging behind markets; More than half of active managers focused on UK and Europe outperformed last year
Chris Flood – FT
Just over half of the actively managed funds focused on UK and pan-European equities beat their benchmarks last year in a marked improvement in performance after a dismal showing by stockpickers in 2016.
/goo.gl/WeF2bH

A Deeper Look at the Flattening Yield Curve; The long-awaited repricing of the U.S. bond market has stalled once again
Daniel Kruger – WSJ
The long-awaited repricing of the U.S. bond market has stalled once again. The 10-year U.S. Treasury yield has been stuck between 2.8% and 2.9% after an early 2018 debt selloff took the yield within a hair of 3% for the first time in four years. The rise in yields since 2016 signals investors no longer fear the global economy will suddenly fall apart, but the recent leveling-off suggests investors doubt growth is truly picking up in a sustained way.
/goo.gl/19pxnW

Institutions

Last Head of Bear Stearns Taking on Wall Street Goliaths at Guggenheim; Alan Schwartz is ‘building something, instead of just working somewhere’
Justin Baer – WSJ
A decade after the financial crisis, the U.S. economy is cruising again and the stock market keeps climbing. But for many of the men and women at the center of the extraordinary events that nearly led to the collapse of the U.S. banking system, those frantic days changed their lives permanently.
/goo.gl/VW2GdQ

Justice Department Widens Wells Fargo Sales Investigation to Wealth Management; The FBI has interviewed employees at the bank’s wealth-management business
Emily Glazer – WSJ
A federal investigation into sales practices at Wells Fargo WFC -1.64% & Co. now includes the bank’s wealth-management business, extending the probe beyond the firm’s retail-banking unit where the problems originated, people familiar with the matter said.
/goo.gl/s4w9fN

Hedge Funds Suffer Worst Month in Two Years
Adam Manzor – Bloomberg
February returns snap 15 straight months in the black; Fixed Income Relative Value only survivor in a sea of red
Hedge Fund returns overall fell 2.19 percent in February, wiping out January gains and leaving them nearly unchanged for the year at up 0.07 percent, according to the latest numbers out of the Bloomberg Hedge Fund Database.
/goo.gl/PFVEL2

Edward Bramson’s activist fund takes 5% interest in Barclays; Sherborne investment adds pressure on bank to turn round performance
Martin Arnold – FT
Edward Bramson’s activist investment fund has acquired an interest in Barclays that gives it voting rights over just over 5 per cent of the British bank, increasing pressure for it to turn round its faltering performance.
/goo.gl/ixkMxY

Oil Hedge Fund BBL Looks to Launch $1 Billion Macro Fund; Firm says work on oil and other commodities gives it a unique view into global trends
Alison Sider – WSJ
BBL Commodities LP, one of the biggest energy focused hedge funds, is looking to raise $1 billion for a new fund that will wager on macroeconomic trends via bonds, stocks, currencies and commodities.
/goo.gl/LWUfDN

Ex-Bear Stearns CEO Is Off Wall Street But Still Mixing It Up at the Bridge Table; James Cayne is ‘retired and doing what he loves the best’
Justin Baer – WSJ
A decade after the financial crisis, the U.S. economy is cruising again and the stock market keeps climbing. But for many of the men and women at the center of the extraordinary events that nearly led to the collapse of the U.S. banking system, those frantic days changed their lives permanently.
/goo.gl/b6jsSR

Regions

U.S. Charges Russia With Attacking American Energy System
Christopher Alessi – WSJ
The Trump administration on Thursday issued its first sanctions on Russia for its interference in the 2016 presidential election and for waging cyberattacks on U.S. energy infrastructure, reports The Wall Street Journal’s Ian Talley.
/goo.gl/nGYNwV

Exclusive: Qatar asks U.S. to investigate UAE bank for ‘financial warfare’
Dmitry Zhdannikov – Reuters
Qatar has asked U.S. regulators to investigate the U.S. subsidiary of the largest bank in the United Arab Emirates, accusing it of “bogus” foreign exchange deals designed to harm its economy as part of a blockade by Gulf neighbors.
/goo.gl/dy84He

Kenya’s 4G Capital plans tokenised bond via cryptocurrency; Microfinance and training company looks to raise up to $10m next month
John Aglionby in Nairobi – FT
4G Capital, a Nairobi-based microfinance and training company, is to become the first such financial institution to issue a tokenised bond using cryptocurrencies.
/goo.gl/gwXLyz

Yi Gang Picked to Take Helm of People’s Bank of China; American-trained economist has pushed for pro-market overhauls
Lingling Wei – WSJ
President Xi Jinping has picked an American-trained economist known for pushing pro-market overhauls to run the central bank, adding to an economic team strong on proponents of liberalization.
/goo.gl/jmk1jn

Brexit

U.K. Lawmakers Say Britain Should Consider Delaying Brexit
Stephen Castle – NY Times
Britain should seek to postpone its exit from the European Union if talks drag on during the next few months, an influential committee of lawmakers concluded on Sunday.
/goo.gl/dPz6BT

Miscellaneous

Reuters just got $10 billion to build a sustainable news business. How should it spend it?; Reuters News just won the lottery. What will it do with all that money?
Felix Salmon – Recode
It’s the biggest assignment in journalism: Take a set-in-its-ways 167-year-old news organization and reconfigure it radically so that it can compete on the global stage against countless young digital upstarts. If it’s done right, billions of people could end up with trusted, independent, impartial news they would never otherwise have had access to. On the other hand, if it’s done wrong ó or if it’s not assigned at all ó then one of the world’s most storied newswires might be entering its final years.
/goo.gl/ZNtZR8

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

Pin It on Pinterest

Share This Story