Billionaire Stock Picker Jeffrey Vinik to Shut Down Hedge Fund

Oct 24, 2019

First Read

Hits & Takes
By JLN Staff

More than 320 people have signed the petition “Justice for Jitesh Thakkar; CFTC Should Drop Civil Charges and Apologize.” They are expressing their support for Jitesh and the realization of the negative impact this case will have on innovation and cost for the industry, based on such weak evidence that the DOJ dropped their case. Please read the petition and join your fellow industry participants and JLN readers in supporting justice.~JJL

Next week, the FIA EXPO in Chicago will come at a perfect time to secure even more signatures for the petition.~JJL

ALTSO’s 16th Annual Hedge Fund Rocktoberfest – NYC is set for this evening at the Hard Rock Cafe, Times Square. Come on out to see some great musicians from our industry and support a great cause.~JK

Another speaker has just been added to the FIA Expo 2019 lineup: Illinois Governor J.B. Pritzker will be interviewed by DRW Founder and CEO Don Wilson in a “fireside chat” following the presentation of the FIA Innovator of the Year Award on Thursday, Oct. 31.~SR

According to a Bloomberg story, “Billionaire Paul Tudor Jones Says ‘I Love Mayor Pete.’“~JJL

The Colorado Office of Economic Development & International Trade has begun the process of creating special-purpose banking legislation, which will probably be similar to the Special Purpose Depository Institutions (SPDI) law passed by its neighbor, Wyoming. Part of their goal is to give digital asset banking capabilities to the otherwise underbanked cannabis industry in the state.~MR

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The President Has No Defense; After the bombshell testimony by the U.S. envoy to Ukraine, the best Trump can hope for is mercy.
Renato Mariotti – Politico
It’s hard to overstate how much damage the testimony of William Taylor, the U.S. envoy to Ukraine, inflicted on President Donald Trump’s defense in the ongoing impeachment inquiry.
/politi.co/2MIdrnN

***** Renato knows how to make a point.~JJL

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A True Public Servant Deals Trump a Crushing Blow; William Taylor demonstrates how to stand up for integrity and national purpose.
Timothy L. O’Brien – Bloomberg
A career civil servant who is a West Point graduate, soldier, officer, military attache and veteran diplomat told Congress on Tuesday that President Donald Trump personally and explicitly tried to force Ukraine’s president to investigate Trump’s political opponents by withholding crucial military aid and a coveted White House meeting.
/bloom.bg/31DEdSA

****Best headline I have read in a long time, not for politics but for the content.~JJL

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Launching CME SPAN 2
CME Group
CME SPAN 2 will be rolled out for specific product groupings in a phased multi-year approach after extensive testing, starting with major NYMEX Energy futures and options on futures.
bit.ly/2JgxjMM

***** SPAN 2 is almost as much fun as Space Jam 2.~JJL

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Should There Even Be A Market Data “Debate?”
John D’Antona Jr. – Traders Magazine
Is the ongoing market data debate much ado about nothing?
Market data has become a battleground between exchanges, who generate data, and investment managers and brokers, who claim they are forced to buy proprietary data to meet a requirement to demonstrate they are getting the best deals for their customers.
bit.ly/2PmpYyS

*****As long as there is beer, there will be debates about everything.~JJL

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Scariest haunted house in U.S. requires 40-page waiver, doctor’s note, safe word
FOX 8 News
You really don’t want to do this. This is what every person must utter after failing to complete a tour of McKamey Manor.
Russ McKamey owns and operates the most terrifying haunted house experience in America — one you’re not allowed to attend until you watch a two-hour-long video, sign a 40-page waiver, create a safe word, pass a physical, and more.
bit.ly/2MJ0vhx

***** I remember going to a blacked-out haunted house. And they said, whatever you do, don’t go left. All you could do as you felt your way around the house was to go left.~JJL

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Wednesday’s Top Three
Our top story of the day on Wednesday was Bloomberg’s Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges. Second was JLN’s CFTC, Chairman Skate Away From Testifying About Kraft. Third was the New York Post’s ‘Wonder Years’ actress deleted texts from work phone at billionaire’s fund: suit. How many of us watched the Wonder Years?

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Lead Stories

Billionaire Stock Picker Jeffrey Vinik to Shut Down Hedge Fund; The decision comes less than eight months after he started the fund
Juliet Chung – WSJ
Billionaire investor Jeffrey Vinik said he is closing his stock-picking hedge fund less than eight months after he started it, the latest sign of challenges facing the hedge-fund industry.
/on.wsj.com/2BFyykA

Facebook Could Do to Banks What It Did to Newspapers; Libra isn’t just another cryptocurrency. It’s a bid for power.
Elaine Ou – Bloomberg
On Wednesday, Mark Zuckerberg, Facebook’s chief executive, testified about his company’s cryptocurrency project at a hearing held by the House Financial Services Committee. In his testimony, Zuckerberg tried to reassure Congress that Facebook’s Libra cryptocurrency would square the circle between financial inclusion and regulatory adherence, consumer privacy and proactive fraud detection. The one thing he didn’t manage to address is whether the world really wants a crypto offering from the social media giant.
/bloom.bg/2WaL2Kd

Fixed Income Is Still a Mystery to Many Investors; A survey underscores a lack of understanding, but the bond market doesn’t have to be an impenetrable enigma.
Brian Chappatta – Bloomberg
The top-line takeaway from a BNY Mellon Investment Management national survey on fixed-income investing was stunning: A measly 8% of Americans were able to accurately define fixed-income investments.
/bloom.bg/2oiLnOA

U.S. Currency Manipulation Threat Puts Asia Nations on Guard
Michelle Jamrisko and Chester Yung – Bloomberg
Six of 9 countries on U.S. Treasury’s watchlist are from Asia; Singapore central bank says adverse consequences unlikely
Asia is bracing for the latest U.S. Treasury report on foreign currency manipulators, coming in the middle of a trade war that shows no sign of ending.
/bloom.bg/3610Ofh

Last of the Libor Riggers Face Judge in End to Uneven Crackdown
Chris Dolmetsch – Bloomberg
The long, bumpy road to justice for the global banks and bankers in the Libor-rigging scandal may end in a Manhattan courtroom on Thursday, when a pair of former Deutsche Bank AG traders convicted of manipulating the benchmark interest rate face a federal judge
bit.ly/2JiOzB0

LME in talks over sale of precious metals stake to XTX; Gold and silver futures trading arm has struggled to attract volumes since 2017 launch
Henry Sanderson and Eva Szalay – FT
Electronic trading house XTX Markets has held talks over buying a stake in the London Metal Exchange’s struggling precious metals exchange business, according to people familiar with the matter.
/on.ft.com/32IN0nL

Eurex Clearing clears first cross currency swap transactions
Eurex
J.P. Morgan and Morgan Stanley are the first to use Eurex Clearing’s OTC FX clearing service; Important milestone in Deutsche Börse’s FX strategy
Eurex Clearing, one of the leading CCPs globally and part of Deutsche Börse Group, has cleared the first cross currency swap transactions. The trades were submitted by J.P. Morgan and Morgan Stanley as the first OTC FX clearing participants. Cross currency swaps are an important component of Deutsche Börse’s FX strategy, consisting of the FX offerings of Eurex, Eurex Clearing and 360T.
bit.ly/2MGwGya

Ex-SEC employee charged over leaks about private equity group; Michael Cohn accused of stealing information about company he went on to join
Kadhim Shubber – FT
A former employee of the Securities and Exchange Commission was charged on Wednesday for allegedly leaking information about an investigation into a private equity group that he subsequently joined.
/on.ft.com/32LAtjs

Investors won’t back a stockpicker like me, says Jeff Vinik; Billionaire veteran manager shuts hedge fund, blaming ‘gun shy’ institutions
Ortenca Aliaj – FT
Institutional investors have lost their appetite for stockpickers after years of poor performance, according to the former Fidelity Investments star Jeff Vinik, who announced the closure of his eponymous hedge fund on Wednesday just eight months after it relaunched.
/on.ft.com/2oashKi

RBS Profit Wiped Out by U.K. Insurance Mis-Selling Scandal
Stefania Spezzati – Bloomberg
Bank books higher than expected bad loan charges in quarter; RBS has made total provisions of 6.2 billion pounds for PPI
Royal Bank of Scotland Group Plc’s profit in the third quarter was wiped out by a 900 million pound ($1.16 billion) charge tied to the long running insurance mis-selling scandal that has plagued most British lenders.
/bloom.bg/32FiRFI

Mario Draghi Reaches the End of His Fight to Save Euro
Piotr Skolimowski and Yuko Takeo – Bloomberg
ECB president chairs the final meeting of his term on Thursday; Euro is intact but inflation is weak and colleagues divided
European Central Bank President Mario Draghi will hold his final policy meeting and press conference on Thursday, after eight years of leading the fight to stave off a euro-zone breakup and the threat of deflation.
/bloom.bg/32MrFtm

Germany’s Peace Offering to the European Central Bank; Isabel Schnabel’s ability to see both sides of the monetary argument would make her a first-rate addition to the central bank’s executive board.
Ferdinando Giugliano – Bloomberg
Some good news for the European Central Bank. The German government has nominated Isabel Schnabel, an accomplished economist at the University of Bonn, to replace her compatriot Sabine Lautenschlaeger on the ECB’s executive board. Lautenschlaeger is quitting after the central bank’s decision to restart large-scale bond purchases (known as quantitative easing).
/bloom.bg/2W8IUCE

Exchanges, OTC and Clearing

Tokyo Stock Exchange Starts Proof of Concept Testing for Margin Transaction and Short Selling Data
JPX
Tokyo Stock Exchange, Inc. (TSE) is starting Proof of Concept (PoC) testing for limited public distribution of margin transaction and short selling data. This PoC will provide samples of TSE internal margin transaction and short selling data (trade data), with the objective of using feedback from participants to verify the usability and possible applications of the data. TSE will also consider developing a service to distribute this data, based on the results of the PoC.
bit.ly/2pNPRgr

SCRIPTS Asia and Tokyo Stock Exchange Partner to Provide Japan Investor Event Coverage through TSE PoC Platform
JPX
SCRIPTS Asia Inc. (“SCRIPTS Asia”, CEO: Erik Abbott) and Tokyo Stock Exchange, Inc. (“TSE”, President & CEO: Koichiro Miyahara) today announced that they will provide SCRIPTS Asia’s industry-leading database of Japanese corporate investor events through the TSE’s Proof of Concept (PoC) test environment (note).
bit.ly/2MJIDDe

SGX Index Edge licenses index to Nikko Asset Management as investors increasingly turn to thematic investing
SGX
Singapore Exchange (SGX) today announced it is licensing its iEdge-FactSet Global Internet Index to Nikko Asset Management (Nikko AM). Nikko AM, one of Asia’s largest asset managers, will adopt the index for exchange-traded fund (ETF) listing.
bit.ly/32K0yPQ

SGX reports 1Q FY2020 net profit of S$114 million
SGX
Singapore Exchange (SGX) today reported 1Q FY2020 net profit of S$114.2 million (S$91.1 million), with revenues of S$247.6 million (S$208.9 million). EBITDA came in at S$156.4 million (S$121.6 million), and earnings per share was 10.7 cents (8.5 cents).
bit.ly/2MHM9hg

JSE Trade Connect conference highlights need for local impetus; South African securities markets seek to promote structural strength in the face of economic headwinds.
Richard Schwartz – The Trade
The first morning of the JSE’s Trade Connect event in Johannesburg brought into stark contrast the difference in sentiment between macro-economic factors and assessments of local market structure.
bit.ly/32GLvXa

Eurex clears first FX swaps from JP Morgan and Morgan Stanley; The two US banks were the first to act as clearing participants for Eurex Clearing’s OTC FX clearing service.
Hayley McDowell – The Trade
Eurex Clearing has said it has cleared its first cross-currency swap transactions, as its parent company, Deutsche Börse, continues to build out its FX trading services via the clearinghouse and trading platform 360T.
bit.ly/32Ke99R

EEX Group Announces Winners Of The Excellence Awards 2018 – Deadline For Excellence Award 2019 Submissions – 31st October
Mondovisione
At yesterday’s autumn reception in Brussels, EEX Group honored the 2018 winners of the EEX Group “Excellence Award”. The reception was held under the motto “From the Energy Union to the Climate Union”. As a guest speaker, EEX Group welcomed Saïd El-Khadraoui, a former Member of the European Parliament and adviser to the European Policy Strategy Centre.
bit.ly/2JkyBXb

ICE Benchmark Administration Publishes Third Update Regarding the U.S. Dollar ICE Bank Yield Index
Press Release
Intercontinental Exchange, Inc. (ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Benchmark Administration Limited (IBA) has published its third update regarding the U.S. Dollar ICE Bank Yield Index.
bit.ly/2JjGX11

Fintech

SS&C reshuffles Eze Software leadership; SS&C Technologies said former CEO and general manager of Eze Software, Jeff Shoreman, will leave the firm next month.
Hayley McDowell – The Trade
SS&C Technologies has appointed a new general manager of execution and order management systems provider Eze Software, a year after the tech giant acquired the firm for $1.45 billion.
bit.ly/32TuHfL

ErisX integrates FIS back-office services for digital asset futures; ErisX partnership with FIS will allow investors to process crypto futures through existing back-office workflows.
Hayley McDowell – The Trade
Digital asset trading platform ErisX has teamed up with FIS to use the tech vendor’s back-office services to support its crypto futures contracts.
bit.ly/2ocXpJa

BGC Partners Reports Third Quarter 2019 Financial Results; BGC Declares Quarterly Dividend
BGC Partners, Inc.
BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners,” “BGC,” or the “Company”), a leading global brokerage and financial technology company, today reported its financial results for the quarter ended September 30, 2019.
bit.ly/2BDESbY

Thierry Breton steps down from Atos in EU Commission bid; Tech boss nominated by French president to be country’s European commissioner
Victor Mallet – FT
Thierry Breton will step down as chairman and chief executive of French technology group Atos after being nominated by President Emmanuel Macron as France’s candidate to be a European commissioner, Atos and Mr Breton announced.
/on.ft.com/2PgbNM3

False-flag hackers present a major security concern; Russia-linked group’s use of stolen tools has worrying repercussions
The editorial board – FT
In the sordid world of cyber war, there is no such thing as professional courtesy. That was the finding of a report this week, which said a Russian cyber espionage unit carried out attacks under the guise of being Iranian. The growing difficulty of finding the provenance of hacks is only matched by the rising damage which cyber attacks can achieve. The risks from misguided retaliation demand continued efforts to identify the origins of attacks.
/on.ft.com/33SUzbs

Cryptocurrencies

Facebook, Zuckerberg Dig In for Long Haul on Cryptocurrency; Zuckerberg defends social network’s libra in testimony before House Financial Services Committee
Peter Rudegeair and Ryan Tracy – WSJ
Facebook Inc. CEO Mark Zuckerberg vowed to move ahead with plans to create a cryptocurrency-based payments network despite strong opposition from some lawmakers, sounding a note of defiance in a hearing where he and the social-media giant were pressed over issues of trust and credibility.
/on.wsj.com/2BH7hOB

Five things to come out of Zuckerberg’s Libra testimony; Facebook chief makes the case to Congress for his digital currency project
Hannah Murphy and Kiran Stacey – FT
Mark Zuckerberg testified in front of the US Congress on Wednesday about his company’s plans to launch a new, global digital currency.
/on.ft.com/2WaSZit

Bakkt’s monthly bitcoin futures hit nearly $5M in trading volume
Yogita Khatri – The Block Crypto
Cryptocurrency derivatives exchange Bakkt has witnessed a jump in the trading volume of its physically-settled monthly bitcoin futures. The volume hit ~$4.81 million on Wednesday; the figure is more than the total volume over the nine previous trading days combined. The jump is likely because bitcoin saw increased volatility yesterday, as its price crashed by about 6% in a few minutes. The total volume of Bakkt’s monthly bitcoin futures now stands at $20.22 million since its launch on Sept. 23. It means the average volume has been ~$0.88 million a day over the last 23 trading days.
bit.ly/31Gy08r

CEO: Coinbase Has Earned $2 Billion in Transaction Fees Since 2012
William Foxley – Coindesk
Coinbase has earned more than $2 billion in transaction fee revenue since launching in 2012, according to CEO Brian Armstrong.
bit.ly/2WcpQ6t

Binance US Announces Dogecoin Listing
William Foxley – Coindesk
Crypto-lands favorite meme-coin is hitting another U.S.-based exchange. Binance.US has announced Thursday the listing of dogecoin under the DOGE/USDT trading pair. For now, only deposits are open until trading is live at 1:00 UTC.
bit.ly/2MJpP6Z

Telegram investors agree on postponement of TON blockchain launch; not to demand money back
Yogita Khatri – The Block Crypto
The majority of Telegram investors have reportedly agreed to postpone the launch of the messaging giant’s native blockchain network TON, and therefore, will not demand their funds back. Forbes Russia reported the news on Wednesday, citing “two sources close to the Telegram team.” Last week, Telegram wrote a letter to its investors that it wants to push the deadline for the TON launch from Oct. 30 to April 30, 2020, after the Securities and Exchange Commission (SEC) sued it for conducting an “illegal” sale of “digital-asset securities called Grams.”
bit.ly/2BFfanF

Bitcoin and cryptocurrencies are having a very bad day
Jonathan Shieber – Tech Crunch
The price of Bitcoin and other cryptocurrencies tanked today, continuing a months-long slide that has seen the value of the digital currency slide by more than $2,000 from highs of above $10,000 earlier in the year. Investors are still speculating about the cause of the crash, but hopeful cryptocurrency bulls before today had hoped that $8,000 would be the new floor for Bitcoin. No longer. Today the price of Bitcoin dropped to $7,448.75, down from around $8,000 earlier in the day.
/tcrn.ch/2p0kOy9

Startup Targets Cryptocurrency Crime – But Will The Big Banks Come On Board?
Trevor Clawson – Forbes
Will cryptocurrencies ever be considered mainstream? Millions of people around the world are invested in Bitcoin and its rivals, of course, but from the point of view of governments, regulators and financial institutions, virtual coins and tokens are still viewed with a considerable degree of suspicion.
bit.ly/2NcYDMY

CEO: Coinbase Has Earned $2 Billion in Transaction Fees Since 2012
William Foxley – Coindesk
Coinbase has earned more than $2 billion in transaction fee revenue since launching in 2012, according to CEO Brian Armstrong. Speaking onstage at a Vanity Fair event, Armstrong said Coinbase has turned a profit the last three years – including during the 2018 bear market – and has earned more operating profit than venture capital raised to date, estimated at nearly $550 million in nine funding rounds, according to CrunchBase. The firm is currently valued at $8 billion.
bit.ly/2BBlKvv

CFTC Makes Its Fintech, Blockchain Research Lab a Full-Fledged Office
Nikhilesh De – Coindesk
The U.S. Commodity Futures Trading Commission (CFTC) is upgrading its financial technology research wing, LabCFTC. The derivatives regulator announced Thursday that LabCFTC would become its own independent office within the CFTC, reporting directly to the agency’s chairman, Heath Tarbert. The group will continue its mission of acting as the agency’s research wing into new financial technology, including blockchain and cryptocurrency tools. LabCFTC has fallen under the CFTC Office of General Counsel’s oversight since its formation in 2017, Tarbert said in prepared remarks shared with CoinDesk.
bit.ly/2qIOtwb

Bitcoin briefly drops below $7,500, touching five-month low
Steven Zheng – The Block Crypto
Bitcoin prices fell from $8,000 to as low as $7,450 this morning — a downswing of more than 7%. According to data from Rekto, over the past hour, derivatives exchange BitMEX saw over $205 million worth of XBT Perpetual Swap contracts liquidated. That is to say, a large number of bitcoin levered positions have been automatically closed by BitMEX’s system. The low represents a new bottom over the past five months. The price has since settled slightly above $7,500 at the time of this writing.
bit.ly/2Pfdn0w

Binance to become first exchange to list Blockstack’s tokens
Celia Wan – The Block Crypto
Cryptocurrency exchange Binance announced on Wednesday that it will be listing Blockstack (STX) starting Oct. 25. At launch, the exchange plans on offering STX/BNB, STX/BTC, and STX/USDT trading pairs. The firm now accepts STX deposits in preparation for trading. Binance will be the first exchange to list STX. According to Blockstack’s website, as of now, users cannot purchase STX via any exchanges. However, U.S. investors are still not able to access STX through any “exchange or alternative trading system,” according to Blockstack.
bit.ly/2qHokOf

Binance’s direct fiat-to-crypto trading facility goes live, starting with Nigerian naira pairs
Yogita Khatri – The Block Crypto
Cryptocurrency exchange Binance has listed the first direct fiat-to-cryptocurrency trading pairs, starting with Nigerian naira (NGN). Announcing the news on Thursday, Binance said users can deposit NGNs and buy bitcoin (BTC), Binance coin (BNB) and Binance’s native dollar-pegged stablecoin BUSD.
bit.ly/2PfBPis

The state of the Libra project
FT
From hostile takeovers to C-suite intrigue, Behind the Money takes you inside the big business and financial stories of the moment with reporting from Financial Times journalists around the world. Hosted by Aimee Keane.
/on.ft.com/2p8yAOY

Politics

The White House Wants to Privatize Fannie and Freddie. It Needs Wall Street’s Help; The two mortgage giants would potentially have to raise billions of dollars from investors, and financial firms are laying the early groundwork
Juliet Chung and Ben Eisen – WSJ
The Trump administration wants to put Fannie Mae FNMA -7.69% and Freddie Mac FMCC -7.84% back into private hands after more than a decade in government control. The path to doing so will likely lead through Wall Street.
/on.wsj.com/32LBdFg

If Trump Is Removed, What Happens Next? It’s still quite unlikely that the president will be ousted from office. But a thought experiment is nonetheless useful.
Jonathan Bernstein – Bloomberg
I was all ready to criticize a column in the Washington Post on Wednesday titled, “If Republicans don’t stand by Trump, they risk losing their base forever.” But it turns out that while the item makes several outlandish assertions, it doesn’t make the particularly outlandish one in the headline. Even so, it’s a good excuse for a thought experiment: What would President Donald Trump’s political clout be like in the (still unlikely) event that he’s actually ousted from office?
/bloom.bg/2BE0R2P

Maxine Waters Urges Facebook to Drop Libra Until It Fixes Other Issues
Jesse Westbrook – Bloomberg
House Financial Services Committee Chairwoman Maxine Waters said Facebook Inc. should cease work on its cryptocurrency project until the company addresses a series of unrelated “deficiencies” in its social-media business.
/bloom.bg/31JhIvA

‘Smoking Gun’ Testimony Accelerates Democrats Timeline on Impeaching Trump
Billy House – Bloomberg
Taylor’s statement provides key piece for House inquiry; Lawmakers expect public hearings to start in matter of weeks
The explosive testimony of senior U.S. diplomat William Taylor handed Democrats a key to unlock their impeachment case against President Donald Trump, which soon will be brought into public view.
/bloom.bg/2oeIwpT

Democrats Start to Sense Impeachment Checkmate
Kathleen Hunter – Bloomberg
In the words of one Democratic impeachment investigator, there’s now “smoking gun sitting on top of smoking gun.” Maryland Representative Jamie Raskin’s description of the House probe following U.S. diplomat William Taylor’s explosive testimony explains why the pace of the inquiry has accelerated, with several Democrats saying they now expect closed-door witness interviews to conclude in about two weeks. That would be followed by public hearings.
/bloom.bg/32Hs4xe

Trump Threatens to Veto Bill on Foreign Influence in Elections
Jordan Fabian – Bloomberg
House passes measure that White House calls ‘overly broad’; Campaigns would be required to report contact with foreigners
The White House on Wednesday threatened a veto of a bill backed by House Democrats aimed at stopping foreign interference in U.S. elections, even as an impeachment inquiry into President Donald Trump centered on the issue.
/bloom.bg/32KVdaK

Can you believe your eyes? How deepfakes are coming for politics; As AI-generated videos spread disinformation, start-ups and academics battle to stay one step ahead
Siddharth Venkataramakrishnan – FT
Matteo Renzi, Italy’s former prime minister and founder of the new Italia Viva party, sits in an opulent-looking office, face to the camera. An oil painting hangs to one side of him, on the other sits a Renaissance bust.
/on.ft.com/2JiN85r

The E.U.’s looking at a ‘carbon border tax.’ What’s a carbon border tax? The climate change plans of Biden and Warren discuss these, too.
Bentley B. Allan – Washington Post
The incoming European Commission president, Ursula von der Leyen, was elected on a promise to deliver a “European Green Deal.” A key component of her agenda is a carbon border tax.
/wapo.st/2MGQ5Px

Regulation

CFTC Sues Unregistered Retail Forex Exchange Dealer
CFTC
The U.S. Commodity Futures Trading Commission today announced it issued an order filing and settling an enforcement action against Treasury Vault, LLC of Lehi, Utah for acting as an unregistered retail foreign exchange dealer.
bit.ly/31DBJne

CFTC’s Energy and Environmental Markets Advisory Committee to Meet November 7
CFTC
The U.S. Commodity Futures Trading Commission’s Energy and Environmental Markets Advisory Committee (EEMAC) announced today that it will hold a public meeting on November 7, 2019, at CFTC’s Washington, DC, headquarters.
bit.ly/2W8RT77

Beware of Spoofed Websites Offering Phony Certificates of Deposit – Investor Alert
SEC
The SEC’s Office of Investor Education and Advocacy (OIEA) is issuing this Investor Alert to warn investors about phony Certificates of Deposit (CDs) promoted through internet advertising and “spoofed” websites – websites that mimic the actual sites of legitimate financial institutions. Investors should be extremely cautious when purchasing CDs from sites found only through internet searches.
bit.ly/2W8RL7D

ESMA sees significant room for improvement in national regulators’ supervision of derivatives data
ESMA
The European Supervisory Authorities (ESAs) have today issued a Supervisory Statement in order to promote a consistent application by national competent authorities (NCAs) of the scope of the Regulation for packaged retail and insurance-based investment products (PRIIPs Regulation) to bond markets.
bit.ly/2Bl0UjO

U.K. Regulator Asks Asset Owners, Managers to Consider ESG; New Financial Reporting Council’s stewardship code applies to pension funds, insurance firms, fund managers and others
Nina Trentmann – WSJ
A U.K. regulator launched a new code for asset owners and managers, asking them to consider environmental, social and governance factors at companies they are investing in.
/on.wsj.com/2MHxqTM

SEC to probe India’s Infosys over whistleblower claims; Investigation by US regulator comes as company also faces class action lawsuit
Benjamin Parkin – FT
Infosys said on Thursday that the US Securities and Exchange Commission had launched a probe into the Indian technology group after receiving anonymous complaints from whistleblowers over alleged unethical practices.
/on.ft.com/2qGR35O

Federal Agencies Found to Be Lax in Halting Fake Comments on Proposed Rules; Online rule-making comment systems are ‘being abused,’ a Senate report says; federal agencies have taken little action, even with comments from dead people
James V. Grimaldi – WSJ
Senate investigators found that federal agencies do little or nothing to stop crimes and abuses committed in the systems they use to collect public comments on proposed regulations.
/on.wsj.com/2Jiyoni

CFTC Commissioner Berkovitz to Participate in a Fireside Chat at the Institutional Investor Legal Forum’s Fall Roundtable
CFTC
bit.ly/2MIbN5G

DoJ drops investigation into Snap; Social media company said US ended probe into whether it misled investors during IPO
Hannah Murphy – FT
While Facebook’s Mark Zuckerberg faces a mounting stack of federal and state investigations into its competition and privacy practices and a grilling in Congress today, smaller rival Snap can celebrate.
/on.ft.com/2NaaLhW

CFTC’s Energy and Environmental Markets Advisory Committee to Meet November 7
CFTC
The U.S. Commodity Futures Trading Commission’s Energy and Environmental Markets Advisory Committee (EEMAC) announced that it will hold a public meeting on November 7, 2019, at CFTC’s Washington, DC, headquarters.
bit.ly/36a5ks2

CFTC Sues Unregistered Retail Forex Exchange Dealer
CFTC
The U.S. Commodity Futures Trading Commission today announced it issued an order filing and settling an enforcement action against Treasury Vault, LLC of Lehi, Utah for acting as an unregistered retail foreign exchange dealer.
bit.ly/31DBJne

Investing and Trading

The average lifespan of a fiat currency isn’t 27 years
Jemima Kelly – FT
A crypto news site ran an intriguing story last week, under the headline “Bitcoin Has Already Reached 40% of Average Fiat Currency Lifespan”. We could hear the tiny sound of your eyeballs rolling to the skies before you even got to the headline.
/on.ft.com/31Kxu9k

Fed to increase repo market interventions again ahead of month-end; Dramatic boost to size of the operation catches some participants off guard
Colby Smith and Joe Rennison – FT
The Federal Reserve surprised some traders on Wednesday by saying it would increase the amount of money it is injecting into overnight lending markets, seeking to avoid a repeat of the cash crunch that sent short-term borrowing rates soaring in September.
/on.ft.com/2MI8prp

Short-sellers sink teeth into Beyond Meat; After a well-received IPO, bearish bets are mounting ahead of the lock-up expiry
Emiko Terazono in London – FT
Shares in Beyond Meat have lost their sizzle, with investors placing increasingly bearish bets on the company that launched one of the most successful public offerings in the US this year.
/on.ft.com/2W9bunD

Investors starve US shale drillers of capital; Bankruptcies are mounting across the sector, underlining a squeeze on funding
Gregory Meyer and Joe Rennison – FT
The money pipeline is running dry for large portions of the US shale oil sector, tipping drillers into bankruptcy and threatening the industry’s breathtaking growth in oil production.
/on.ft.com/2BIt1JG

Twitter Stock Plunges as Quarterly Sales and Forecast Disappoint Wall Street
Kurt Wagner – Bloomberg
‘Product issues’ weigh on performance of advertising business; Daily active users up 4% to 145 million from previous quarter
Twitter Inc. reported quarterly revenue and gave a sales forecast that fell far short of Wall Street’s estimates, saying privacy issues involving its advertising business will continue to weigh on its performance. The shares plunged.
/bloom.bg/2MGEujt

Global Banks Hung on $1.5 Billion of Loans as Investors Cut Risk
Davide Scigliuzzo – Bloomberg
Shutterfly, Monotype among deals that struggled to sell; Slowdown concerns crimping demand for the riskiest debt
Risky corporate loans are gradually piling up on the books of some of the world’s largest banks.
/bloom.bg/2WaXz09

The Repo Market, Explained
WSJ
The repo market shook the financial world in September when an unexpected rate spike choked short-term lending, spurring the Federal Reserve to intervene. WSJ explains how this critical, but murky part of the financial system works, and why some banks say the crunch could have been prevented.
/on.wsj.com/2Pqnn7t

Institutions

CEO Schwarzman Defends Blackstone as Firm’s Profit Climbs; Assets under management rose 21% in latest quarter; distributable earnings fell
Miriam Gottfried – WSJ
Blackstone Group Inc. BX 4.91% ‘s Chief Executive Stephen Schwarzman on Wednesday delivered an impassioned defense of his firm’s record, appearing to strike back against recent criticisms of the private-equity industry by politicians.
/on.wsj.com/32HoGCw

Schroders to take reins of Neil Woodford investment trust; Shares in investment vehicle soar as UK asset manager agrees to take over
Owen Walker and Jennifer Thompson – FT
UK asset manager Schroders has been picked to manage the investment trust once run by Neil Woodford, sending shares in the investment vehicle up almost 30 per cent on Thursday.
/on.ft.com/32GJfPG

Bankers push back against ‘greenwashing’ criticism; Green bonds issued by companies contributing to emissions have been called ‘oxymoronic’
Patrick Temple-West – FT
Banks in the booming green bond market are bristling against claims from sceptical investors that some issuers’ eco-friendly credentials are little more than marketing.
/on.ft.com/2BDAMAC

Tracker fund giant Vanguard cuts fees after Woodford debacle
Elizabeth Burden – The Times
One of the world’s biggest asset managers has escalated a price war in Britain by cutting fees on its tracker funds in the wake of the Woodford affair.
bit.ly/2p8yEOI

RBS swings to third-quarter loss after PPI complaints surge; UK bank forced to set aside £900m to deal with last-minute compensation demands
Nicholas Megaw – FT
Royal Bank of Scotland swung to a loss in the third quarter after it was forced to set aside £900m to deal with a late influx of complaints about payment protection insurance.
/on.ft.com/2Phl3iM

Ex-Citi Banker Fights Claim He Pushed to Pay Nephew’s Debt
Ellen Milligan – Bloomberg
Sattar — one of bank’s most senior employees — fired in 2013; Lawyer says banker was ill and couldn’t understand allegations
Citigroup Inc. says that Mukarram Sattar, one of its most senior employees, was desperately trying to help his unemployed nephew pay off credit card debt owed to the bank in the aftermath of the financial crisis. So he asked his junior colleagues to negotiate a settlement.
/bloom.bg/361keRg

Bill Daley leaves BNY Mellon; He joined the New York-based bank less than six months ago but opted to depart after CEO Charlie Scharf left to run Wells Fargo.
Steve Daniels – Crain’s Chicago Business
Bill Daley’s Big Apple corporate adventure ended in less than a New York minute.
bit.ly/2PfMeKV

Regions

China Willing to Buy $20 Billion of U.S. Farm Goods in Year One
Bloomberg News
Purchases are predicated on U.S.-China signing phase-one deal; China to issue more tariff waivers for 4m-5m tons of grain
China aims to buy at least $20 billion of agricultural products in a year if it signs a partial trade deal with the U.S., and would consider boosting purchases further in future rounds of talks, people familiar with the matter said.
/bloom.bg/2MKDavK

Germany’s Wealth Fund to Go Where Even Norway Fears to Tread
Stephan Kahl – Bloomberg
Kenfo moves to illiquid assets after relying on stocks, bonds; Norway declined to allow its fund to invest in private equity
Germany’s little-known sovereign wealth fund is about to become a lot bolder in its investments than its much larger Norwegian counterpart.
/bloom.bg/2BDzIwC

Riksbank Seeks End to Negative Rates in Pivot Away From Herd
Rafaela Lindeberg and Sveinung Sleire – Bloomberg
Bank sees repo rate returning to 0% by the end of this year; But outlook remains shaped by ‘considerable’ uncertainty
Sweden’s Riksbank made clear it wants to put an end to half a decade of negative interest rates, as it breaks away from the monetary orthodoxy of the day despite continued signs of weakness in the largest Nordic economy.
/bloom.bg/31Nu9qp

The U.S. May Finally Join the Global Negative Interest-Rate Club; If the economy stumbles, Federal Reserve cuts and bond buying may push bonds across the zero line.
Vivien Lou Chen – Bloomberg
Government bonds in Denmark, Germany, Japan, Sweden, and Switzerland carry negative yields—meaning it will cost money for investors to hold them to maturity. A big question for fixed-income markets in 2020 is whether it could happen in the U.S., too.
/bloom.bg/2odIq1E

U.S. Fears Mass Boycott as Chinese Turn to Homegrown Brands; A wave of nationalism sweeping the mainland could be bad news for Western brands.
Shelly Banjo, Thuy Ong – Bloomberg
When a Chinese automaker set out to find a celebrity endorser for its new electric cars earlier this year, the talent agency it tapped suggested Captain America actor Chris Evans. Signing up one of the stars of Avengers: Endgame, the highest-grossing film of all time, would be perfect for a splashy global ad campaign, the agency figured.
/bloom.bg/31Gt6Iz

U.K.’s Dirty Money Trail Leads to Private Schools, Crocodile Handbags
Edward Robinson – Bloomberg
London is awash in illicit funds amid crackdown, report says; Transparency International calls for overhaul of supervision
Dirty money worms its way into banks, law firms, and accounting agencies. It seeps into properties, companies, and even schools. And despite a crackdown by British lawmakers and police, the $418 billion flood shows no signs of receding as criminals from around the world continue to make the U.K. a hub for corrupt wealth.
/bloom.bg/2odHKJE

The Man Who Would Be Argentina’s President Terrifies Investors; Alberto Fernandez spent his entire political career as the man behind the scenes. Now he’s on the brink of winning power.
Patrick Gillespie, Jorgelina Do Rosario – Bloomberg
Alberto Fernandez’s march to the threshold of Argentina’s presidency began in the upstairs room of a Buenos Aires bar.
/bloom.bg/31K38nE

Californians Endure Blackouts Again as Wildfire Threat Increases
Mark Chediak, David R Baker, and Brian K Sullivan – Bloomberg
Power shutoffs begin in counties near Sacramento, Napa Valley; Wind gusts set to strengthen this weekend, forecaster says
California utilities are once again cutting electricity to prevent wildfires, in the first stage of a mass blackout that could eventually leave more than a million people without power.
/bloom.bg/2BBCUZM

Chinese banks look at swaptions pricing; Switch to market rate for loans prompts lenders to explore hedging tools
Blake Evans-Pritchard – Risk.net
China’s four large state-owned banks are looking at pricing renminbi interest rate swaptions – a move some see as an indication that the authorities are paving the way for cheaper and more flexible hedging for domestic firms.
bit.ly/2odWUi1

Australia’s AMP sees record outflows from wealth management arm; Financial sector suffers continued fallout from damaging inquiry into misconduct
Daniel Shane and Jamie Smyth – FT
Australia’s AMP saw record net outflows from its wealth management business in the third quarter as the financial services group struggled to contain damage to its reputation following a high-profile public inquiry into misconduct in the sector.
/on.ft.com/2MHxNOa

Doing business in China becomes easier after cutting red tape; Latin America ‘a sinking continent’ in competitiveness terms, World Bank warns
James Politi – FT
China has leapfrogged France, the Netherlands and Switzerland as a place to do business according to a flagship annual ranking produced by the World Bank, after slashing red tape by expanding the use of technology by its bureaucracy.
/on.ft.com/32ISleN

Brexit

What If Macron Blocked a Brexit Delay? His Reasons to Be Tempted
Ian Wishart – Bloomberg
French President is most vocal opponent of postponement; EU officials say it’s unimaginable he’d carry threat through
Emmanuel Macron is playing the tough guy on Brexit again. As the European Union discusses whether to give Prime Minister Boris Johnson the Brexit delay he has asked for but doesn’t really want, the French president has signaled he’s ready to block it.
/bloom.bg/31GsYc3

Boris Johnson Contradicted Over Northern Ireland Border Checks: Brexit Update
Thomas Penny and Alex Morales – Bloomberg
Boris Johnson canceled a cross-examination session by senior Members of Parliament as speculation mounted the prime minister will try again to force a general election to break the Brexit deadlock. He is still waiting for the European Union’s response to his letter seeking a divorce delay to Jan. 31, and rejected opposition Labour Party leader Jeremy Corbyn’s timetable proposal to get his Brexit deal through Parliament. It does not appear at all on the program for business in the House of Commons next week.
/bloom.bg/2pRPEbX

Brexit deal would be ‘considerable challenge’ for Scottish economy
Douglas Frase – BBC News
Boris Johnson’s Brexit deal would bring “considerable challenges” for the Scottish and UK economies, according to the Fraser of Allander Institute. Its regular update on the state of the Scottish economy calculates that there has already been a £3bn hit to output. Total output per year is currently running 2% below what had been predicted before Brexit negotiations. The UK government said Mr Johnson had “secured a deal which works for the whole of the UK”.
/bbc.in/2pdBrpQ

EU mulls delay as Britain says Johnson’s deal is the Brexit endgame
Guy Faulconbridge, Michel Rose – Reuters
The United Kingdom will ultimately leave the European Union on the terms of Prime Minister Boris Johnson’s deal, a senior Downing Street source said on Thursday, as EU leaders mulled offering London a three-month flexible Brexit delay. More than three years after voting 52%-48% to be the first sovereign country to leave the European project, the United Kingdom is waiting for the EU to decide how long the latest delay to Brexit should be.
/reut.rs/32LIF3c

EU Keeps Boris Johnson Waiting Over Length of Brexit Extension
Ian Wishart and Alex Morales – Bloomberg
Ambassadors meeting in Brussels delay decision over next steps; U.K. prime minister is fighting to win backing for his deal
The European Union left Boris Johnson hanging on Wednesday night as officials in Brussels debated whether to grant him a third extension to the Brexit process.
/bloom.bg/2JgPvGc

A Weary EU Moves Toward New Brexit Delay; European leaders, while yearning to move on, consider giving U.K. until Jan. 31 to ratify divorce deal
Laurence Norman and Bojan Pancevski – WSJ
European leaders are torn between their desire to end the Brexit saga and their conviction that they can’t be the cause of the U.K. leaving the bloc without a divorce deal.
/on.wsj.com/36bTZYu

Miscellaneous

The Artist Who Tried to Sink His Own Market—and Almost Succeeded; A new documentary explores the complicated, uncompromising life and work of abstract expressionist Clyfford Still.
Katya Kazakina – Bloomberg
Clyfford Still was not an easy man. He called the paintings of fellow abstract expressionist Barnett Newman “pathetic” and referred to influential art critic Clement Greenberg as “a small and lecherous man.” He destroyed one of his own canvases by cutting a chunk out of it after a collector dared to disobey his wishes. He turned down sales, rejected exhibitions, and forbade reproductions.
/bloom.bg/32FiGKy

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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...

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