Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges

Oct 23, 2019

First Read

CFTC, Chairman Skate Away From Testifying About Kraft
Thom Thompson – John Lothian News

In a win for the CFTC, the Seventh Circuit Court of Appeals let the CFTC’s Commissioners breathe a bit more freely on Tuesday afternoon. The court ruled that the commissioners could not be required to provide testimony about their and the commission’s alleged contempt of court, as ordered by District Court Judge John Blakely. The appeals court further affirmed that the individual commissioners were not parties to the consent order that settled the CFTC’s charges of manipulation against Kraft/Mondelez. Furthermore, the appeals court noted that the Commodity Exchange Act expressly allows commissioners to express their views about the matters they vote on.

In a significant loss for the CFTC, the original cause of action – Kraft/Mondelez’s complaint that the CFTC violated the consent order by insinuating in a press release that Kraft/Mondelez was indeed guilty of manipulation – was allowed to go forward and returned to the same district court for adjudication. The CFTC’s application for a writ of mandamus regarded Judge Blakely derisively, arguing that the judge would not treat the CFTC fairly – after all, he wanted to question them! (Saying, “If you haven’t done anything wrong, I am sure you won’t mind answering a few questions” in CFTC investigations should be prohibited from now on.)

To read the rest of this commentary, go here.


Hits & Takes
By JLN Staff

We are at 194 signatures for the campaign titled “Justice for Jitesh Thakkar; CFTC Should Drop Civil Charges and Apologize.” Please read the petition and sign and help us grow and swell the support to encourage the CFTC to drop their case against Thakkar.~JJL

The number of signatures on the petition grew by over 100 yesterday after it was shared in this newsletter. Please help us with this campaign for justice.~JJL

Correction on my comment in yesterday’s newsletter: the OCC’s proposed new regulatory committee was not purely a “good faith” gesture towards the SEC. It was actually part of the OCC’s settlement with the SEC on October 4. The “good faith” aspect of this committee’s inception comes from the fact that, although the OCC was not required to act on the settlement until 2020, they chose to be proactive by initiating it before the month was out.~MR

The CME Group published yesterday a paper titled “SOFR Discounting and Price Alignment Transition – Proposal for Cleared Swaps.”~JJL

Tim Lloyd of The Block Crypto has an article titled “A crown jewel for crypto money laundering is emerging, but no one is paying attention.” Now we are. Thanks Tim.~JJL

On Monday, October 21 in the AMERIBOR futures complex at the Cboe Futures Exchange, a record 665 contracts were traded across both the three-month and seven-day futures contracts, which is equal to $6.02 billion in notional value. Can you say “HUGE?”~JJL

The cryptocurrency exchange Binance is set to offer fiat-to-cryptocurrency trading pairs – specifically, rubles-to-cryptocurrency – using third-party companies, according to an interview Changpeng Zhao did on the Russian TV network RBC Tuesday. Zhao also said that Vladimir Putin is “the most influential person in blockchain,” though he later tweeted that this was a “casual humor half-joke.” My guess is, you don’t get to do business in Russia without paying homage to the Czar.~MR


The Spread: Negative interest rates, VIX for bonds and an options bet that netted a 14,000% return

Will the fed cut rates? Are we headed for negative rates? Fun with acronyms (ICE buys MOVE) and a guy who lucked into a 14,000% return on an options trade making Wall Street Bets on Reddit proud. That and more in this week’s edition of “The Spread.”

Watch the video »


UK lawmakers reject short time frame for Brexit bill, making a deadline extension much more likely
David Reid and Matt Clinch – CNBC
Lawmakers in the U.K. Parliament have voted to reject a limited time frame for reviewing legislation related to Britain’s withdrawal from the European Union.
MPs rejected the timetable, which would have seen the Withdrawal Agreement Bill (WAB) legislation whizz through Parliament in 3 days, by 322 to 308.

*****They are taking the “exit” out of Brexit.~JJL


Climate Change Is Altering the Taste of the World’s Great Wines; From Napa to Sweden, be prepared for flavor fluctuations.
Elin McCoy – Bloomberg
When we grab a bottle off a retail shelf, we have expectations about the wine’s smell and taste. Some Champagnes are richer and rounder than others, but all share refreshing acidity and bright, edgy, mineral, and chalk flavors that wake up taste buds. In 2019 the region’s grapes were very ripe, but because they were balanced by super high acidity, the classic style prevailed this year.

*****We now have the wine snobs on the climate change team.~JJL


WeWork has reportedly postponed thousands of layoffs because it’s too broke to pay workers severance
Julie Bort and Troy Wolverton – Insider
WeWork, it seems, is in a bit of a Catch-22.
With money running short after a failed initial public offering, WeWork has been planning on laying off thousands of employees. There’s only one problem: It’s so short on cash that it doesn’t have enough money to pay severance to affected workers, according to The Wall Street Journal’s Liz Hoffman and Maureen Farrell.



America’s Pile of Uneaten Bacon Is the Biggest in 48 Years
Lydia Mulvany and Dominic Carey – Bloomberg
Bulging pork-belly stockpiles come after build in hog herd; As China imports more pork, the belly glut could evaporate
America is sitting on a mountain of uneaten bacon. More than 40 million pounds (18,000 metric tons) of pork bellies, the cut used for bacon making, were sitting in refrigerated warehouses as of Sept. 30, according to U.S. government data released Tuesday. That’s the most for the month since 1971.

******This is a job for Newman. NEWMAN!!!



Tuesday’s Top Three
Our top story of the day was John Lothian’s Petition · Justice for Jitesh Thakkar; CFTC Should Drop Civil Charges and Apologize. Second was the Sen. Jack Reed press release U.S. Senators Seek Investigation Into Possible Market Manipulation Regarding Market Bets Timed to Trump’s Comments on Trade War & Other Geopolitical Events. Third was Bloomberg’s Fidelity Pulls $500 Million From Fisher as Big Clients Flee


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Lead Stories

Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges
Olga Kharif – Bloomberg
Futures daily volume exceeds that of the Bitcoin spot market; Asian-based exchanges cement leadership as volume shifts east
As Bitcoin becomes boring for many in the get-rich-quick crowd with volatility ebbing, trading in derivatives of the largest cryptocurrency is exploding.

Tiny ‘Odd Lot’ Trades Reach Record Share of U.S. Stock Market; Shift follows rise in algorithmic trading and expensive stocks; investors could miss out on best price
Alexander Osipovich – WSJ
Tiny trades are taking over the U.S. stock market. Several decades ago, “odd lot” trades—in which fewer than 100 shares change hands—were an insignificant part of U.S. stock trading. Now, nearly half of all trades are in odd-lot sizes. That is the highest level ever recorded and roughly double the level from 2016, according to New York Stock Exchange data.

The Longer-Term Lessons of the Repo Turmoil; There are more steps the Fed should take. Easing bank regulations isn’t one of them.
Bill Dudley – Bloomberg
People have drawn a lot of far-reaching conclusions from last month’s brief bout of turmoil in money markets. They see implications for bank regulation, for benchmark interest rates and even for the way the Federal Reserve implements monetary policy.

Climate Change Will Cost Us Even More Than We Think; Economists greatly underestimate the price tag on harsher weather and higher seas. Why is that?
Naomi Oreskes and Nicholas Stern – NY Times
For some time now it has been clear that the effects of climate change are appearing faster than scientists anticipated. Now it turns out that there is another form of underestimation as bad or worse than the scientific one: the underestimating by economists of the costs.

Investment Bankers Charged in Global Insider-Trading Scheme; Federal prosecutors say alleged ring resulted in tens of millions of dollars in illegal profits
Rebecca Davis O’Brien – WSJ
They were young lovers in London, working as junior investment bankers at Moelis MC -2.17% & Co. and Centerview Partners LLC. They had affectionate nicknames for each other: Pops and Popsy.

Exxon Misled Investors Over Climate Change, Court Told; Oil company attorney fires back, calling the New York case sad, bizarre and twisted
Corinne Ramey – WSJ
To illustrate how Exxon Mobil Corp. allegedly deceived investors about its climate-change accounting, a lawyer from the New York attorney general’s office showed a packed Manhattan courtroom Tuesday a multicolored world map the company presented to shareholders.

How to Halt Global Warming for $300 Billion
Adam Majendie and Pratik Parija – Bloomberg
UN scientists say reclaiming wasteland could capture carbon; Global effort would stall emissions growth for up to 20 years
$300 billion. That’s the money needed to stop the rise in greenhouse gases and buy up to 20 years of time to fix global warming, according to United Nations climate scientists. It’s the gross domestic product of Chile, or the world’s military spending every 60 days.

Johnson’s Brexit Deal Clears Hurdle in Parliament but His Timetable Is Rejected; Lawmakers endorse prime minister’s divorce agreement with EU but won’t rush to meet Oct. 31 deadline
Max Colchester and Jason Douglas – WSJ
U.K. lawmakers endorsed a Brexit deal for the first time on Tuesday, raising the prospect that the country’s protracted divorce from the European Union is finally entering its endgame.

Commerzbank, Deutsche Börse and MEAG use blockchain for settlement process; Project saw cash and securities tokens swapped for settlement using DLT, and tokenised cash used as collateral for margin requirements.
Hayley McDowell – The Trade
Commerzbank, Deutsche Börse and asset manager MEAG have completed settlement of a secondary market transaction via tokens using blockchain technology.

New Hampshire Pulls $239 Million From Ken Fisher in Expanding Exodus
Janet Lorin – Bloomberg
Fisher Investments clients divest more than $2 billion; Iowa, Boston, Philadelphia are among pensions to yank money
New Hampshire’s state pension pulled its $239 million invested with Ken Fisher, bringing the total amount divested from the billionaire’s firm to more than $2 billion.

Businesses turn to blockchain for answers; Five case studies: distributed ledger tech applied in banking, healthcare, legal services and transport
As the use of distributed ledgers increases dramatically, many organisations are looking at how to apply the technology.

Malaysia, Goldman discuss smaller penalty over 1MDB scandal: Bloomberg
Malaysia has discussed a $2 billion to $3 billion settlement with Goldman Sachs over the U.S. bank’s alleged role in the 1MDB scandal, Bloomberg reported on Wednesday, less than half the sum the Southeast Asian nation had demanded earlier.

SIFMA Statement On DOL Electronic Disclosure Rule Proposal
SIFMA today released the following statement from Lisa J. Bleier, SIFMA Managing Director and Associate General Counsel regarding a new rule proposal from the Department of Labor (DOL) on electronic delivery of retirement plans disclosures:

Exchanges, OTC and Clearing

SGX and E-Steel unveil bigger and broader Singapore Iron Ore Week for 2020
Singapore Iron Ore Week (SIOW) 2020 is set to be Asia’s largest event for the ferrous metals industry, as it expands its focus beyond iron ore to feature other key components along the ferrous metals supply chain. To be held on 18-21 May 2020 at Sands Expo & Convention Centre, the 8th SIOW will bring together an unrivalled line-up of industry experts and decision makers globally across the steel-making and trading value chain.

Nasdaq vice chairman Frucher to retire year-end; Sandy Frucher will become a strategic advisor next year after joining Nasdaq in 2008 as vice chairman.
Hayley McDowell – The Trade
The vice chairman of US exchange operator Nasdaq has confirmed his intentions to retire from his position and transition to a strategic advisor role from 1 January 2020.

Management team appointed for Deutsche Börse Buy-in Agent Service; Smooth transition at Eurex Repo
Marcel Naas and Marcus Addison have taken on new responsibilities within Deutsche Börse Group. As Managing Directors, both will be driving the setting up of the Deutsche Börse Buy-in Agent Service. Matthias Graulich will take over the management of Eurex Repo GmbH from Marcel Naas.

Eurex EnLight: Product Scope Extension and Introduction of Option Volatility Strategies Trading for Single Stock Options
Eurex Circular 100/19 Eurex EnLight: Product Scope Extension and Introduction of Option Volatility Strategies Trading for Single Stock Options

Commerzbank, Deutsche Börse and MEAG take another step towards post-trade services via distributed ledger technology
Deutsche Börse
Settlement with securities and cash tokens and re-use of collateral provided by Eurex Clearing – within binding legal framework; Common use cases confirm the suitability of Distributed Ledger technology as the basis for a wide range of services
Commerzbank, Deutsche Börse and MEAG, asset managers of Munich Re and ERGO, have taken another step in examining the possibilities of Distributed Ledger Technology (DLT) for the post-trade services sector. The partners have successfully completed the settlement of a legally binding securities transaction in the secondary market of tokenized money and securities. Commerzbank continued to use the tokenized money as collateral with the central counterparty Eurex Clearing. The prototype scenario completely depreciated a transaction of tokenized securities and the transfer of tokenized money. The goal is to further explore the potential of various comprehensive services based on distributed ledger technology.

Deutsche Börse offers free execution of ETF savings plans; Contribution to the promotion of long-term investment by private investors
Deutsche Börse
Deutsche Börse is now offering a free version for ETF savings plan orders in Xetra trading. This benefits especially savers who want to save their assets over the long term and regularly via ETFs.

“Viewfinder – photography and film in dialogue” – Deutsche Börse Photography Foundation and DFF – Deutsches Filminstitut & Filmmuseum Frankfurt start new cooperation
Deutsche Börse
Works from the Art Collection Deutsche Börse from November 1, 2019 – January 12, 2020 at the DFF to see / Film series in the cinema of the DFF is dedicated from November 1 to November 27, 2019 the theme “hidden glances – voyeurism in the film”

ICE Benchmark Administration Publishes Third Update Regarding the U.S. Dollar ICE Bank Yield Index
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: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.

Nasdaq Announces Quarterly Dividend of $0.47 Per Share
The Board of Directors of Nasdaq, Inc. (Nasdaq: NDAQ) has declared a regular quarterly dividend of $0.47 per share on the company’s outstanding common stock. The dividend is payable on December 27, 2019 to shareholders of record at the close of business on December 13, 2019. Future declarations of quarterly dividends and the establishment of future record and payment dates are subject to approval by the Board of Directors.

Nasdaq Reports Third Quarter 2019 Results; Delivers Broad-Based Revenue Growth and Strong Capital Returns
Third quarter 2019 net revenues1 were $632 million. Revenues in the non-trading segments2 increased 10% versus the prior year period, primarily driven by organic growth, while Market Services revenues increased 2%.

Moscow Exchange Trading Schedule For November Public Holidays
Moscow Exchange announces the trading schedule for its markets over the November public holiday period.

DGCX Welcomes RAKBANK To The Exchange, Underpinning Its Expanding Member Community – RAKBANK Went Live As A Trade Member On 10th Of October, Executing Its First Trades In The Indian Rupee-Dollar Futures Contract
The Dubai Gold and Commodities Exchange (DGCX) today announced that RAKBANK has been listed as a new Trade Member of the Exchange. The move underpins DGCX’s rapidly growing member community, and highlights the mounting interest from large, regionally based financial institutions to access the Exchange for hedging and investment opportunities.

GPW starts a crowdfunding programme for brokers
Warsaw Stock Exchange (GPW) has today approved the GPW Partner Firm – GPW Crowdfunding Partner Programme for crowdfunding and crowdinvesting . The Programme is addressed to local and international brokers who offer crowdfunding and crowdinvesting services.


Database secrets help groups streamline services; 10 case studies: data strategies for speeding up processes
Most organisations still struggle to form effective data strategies, none more so than in the legal sector, where, ironically, data touches every part of a business’s operation. The nominees here reveal how powerful the use of data can be in streamlining business processes.

The great integration of data, technology and services; Overview: the Intelligent Business report showcases dramatic changes in how organisations operate
Reena SenGupta – FT
Young drivers who have held a driving licence for less than two years are more likely than experienced motorists to be in a car crash. As a result, the cost of insurance is higher for all new drivers, even the cautious ones.

How Do Stock Trading Algorithms Work? Stock trading algorithms make millions everyday through the practical use of Machine Learning.
Trevor English
Trevor English –
The stock market can be a voracious beast to those that don’t understand it, but nowadays, you don’t even need to understand it to make money. The rise of the digital information age and AI has brought about a new way of stock trading called algorithmic trading.

Google Claims a Quantum Breakthrough That Could Change Computing
Cade Metz – NY Times
Google said on Wednesday that it had achieved a long-sought breakthrough called “quantum supremacy,” which could allow new kinds of computers to do calculations at speeds that are inconceivable with today’s technology.


Bitcoin Speculators Gain Upper Hand as Derivative Trading Surges
Olga Kharif – Forbes
As Bitcoin becomes boring for many in the get-rich-quick crowd with volatility ebbing, trading in derivatives of the largest cryptocurrency is exploding. At $5 billion to $10 billion a day, the amount of derivatives traded globally exceeds Bitcoin spot volume by 10 to 18 times, according to estimates from data trackers Skew and The volumes were about equal at the start of the year, through definitive figures for both are hard to come by from exchanges.

The threat and the promise of digital money; Cryptocurrencies look overhyped, the new payment platforms useful and Libra worrying
Martin Wolf – FT
What is the future of money in a digital age? This was the subject of an event at the Peterson Institute for International Economics last week. This seminar was the intellectual high point of my time at the annual meetings of the IMF and World Bank in Washington. The first answer to that big question is: “It is complicated.” The second is: “It is really important” — especially since Facebook’s Libra project.

Facebook Lays On the Charm for Its Libra Cryptocurrency Plan
Cecilia Kang and Nathaniel Popper – The New York Times
Facebook’s ambitious plan to create a cryptocurrency that would replace traditional money all over the world appears to be on life support. Regulators and lawmakers have mocked it. Key partners like Visa and Mastercard have stepped away from it. But the company isn’t backing down. Facebook executives fanned out in the capital last week to court lawmakers and regulators to the cryptocurrency project, called Libra. And on Wednesday, Mark Zuckerberg, Facebook’s chief executive, is expected to testify about Libra at a hearing held by the House Financial Services Committee.

Shell Companies Called National Security Threat By Treasury Intelligence Center
Ted Knutson – Forbes
Kenneth Blanco, director of the Financial Crimes Enforcement Network (FinCEN), the Treasury Department’s anti-money laundering and financial intelligence center warned Monday shell companies have become a national security threat. He said FinCEN is seeing many shell companies being used by all sorts of bad actors. “It puts us at risk more and more,” said Blanco.

There are now 11 blockchain unicorns in the world, with over $1B valuation, including Binance, Ripple and Coinbase
Yogita Khatri – The Block Crypto
The blockchain industry worldwide now has 11 unicorns, companies with over $1 billion in valuation, including cryptocurrency exchanges Binance and Coinbase, as well as blockchain payments firm Ripple. Research firm Hurun published its inaugural list of global unicorns for 2019 on Monday, ranking the world’s billion-dollar tech startups founded in the 2000s and yet to get listed on a public exchange.

Binance to use third-party services for providing direct fiat-crypto trading, says CEO
Yogita Khatri – The Block Crypto
Cryptocurrency exchange Binance’s upcoming direct fiat-to-crypto trading facility, starting with Russian rubles, will be provided through third-party services. The information was revealed by Binance CEO Changpeng Zhao “CZ”, in an interview with Russian news outlet RBC on Tuesday. CZ did not disclose the names of those third-party services. The Block broke the news earlier this week that is preparing to add support for direct trading between fiat and crypto on its platform.

Ripple opens new office in Washington D.C. to woo policymakers
Yogita Khatri – The Block Crypto
Blockchain payments firm Ripple has opened a new office in Washington D.C. with an eye for building closer ties with lawmakers. The office would focus on educating policymakers on cryptocurrencies and blockchain technology, according to an announcement Tuesday. Craig Phillips, former counselor to U.S. Treasury Secretary Steven Mnuchin, has joined Ripple’s board of directors to advise the firm on regulatory affairs. Phillips has over 35 years of experience, having worked as managing director at Morgan Stanley, BlackRock and Credit Suisse, according to his LinkedIn profile.

US Lawmaker Introduces Bill Classifying Stablecoins as Securities
Nikhilesh De – Coindesk
Congress may consider a bill to classify stablecoins – cryptocurrencies whose values are pegged to a fiat currency or other assets – as securities. In a draft bill published Tuesday, Rep. Sylvia Garcia (D-Texas) introduced legislation to the House Financial Services Committee to regulate stablecoins under the Securities Act of 1933, seeking to provide clarity in an area the bill suggests lacks regulatory guidance.

Regulate Stablecoins – Don’t Squash Them
Nathan Kaiser – Coindesk
Recent developments with blockchain-based payments systems and stablecoins have invited close scrutiny from government regulators and policymakers. While some of these projects get headlines, policymakers should take note of the People’s Bank of China proposal for a digital currency backed by the yuan that could be used across major payment platforms such as WeChat and Alipay. Global competition for the next wave of financial innovation is heating up. China, South Korea, Japan and much of Europe have moved fast to embrace mobile wallets and contactless payments through credit cards and other smart devices.

Yale Prof and Goldman Sachs Veteran Design DLT-Based Facebook Rival
Helen Partz – Cointelegraph
A Yale professor and Goldman Sachs veteran are planning to complete a new project of a blockchain-based Facebook rival in 2020. David Gelernter, a Yale’s professor of computer science and Mirror Worlds creator, and Rob Rosenthal, a 19-year veteran of Goldman Sachs, are collaborating on a new social network called Revolution Populi, Business Insider reports Oct. 22.

US Treasury to Monitor Libra Over Possible Financial Risks
Daniel Palmer – Coindesk
The U.S. Department of the Treasury has committed to monitoring the Facebook-led cryptocurrency project Libra. The news was announced by Emanuel Cleaver, II, congressman for Missouri’s fifth district, on Tuesday. Cleaver said he’d written to the Financial Stability Oversight Council (FSOC), and the Office of Financial Research (OFR) in August calling on the regulators to “proactively examine Libra and Calibra for possible systemic risk.”

Zuckerberg: Facebook will ‘not be a part of launching Libra’ unless US regulators approve
Celia Wan – The Block Crypto
Facebook CEO Mark Zuckerberg told lawmakers that the social media giant will “not be a part of launching the Libra payments system anywhere in the world” unless U.S. regulators give the green light.

Zuckerberg faces grilling on Facebook’s ambitious digital currency plans
Pete Schroeder – Reuters
Facebook Inc (FB.O) chief executive Mark Zuckerberg will be grilled by lawmakers over the company’s plan to launch a digital currency and efforts to prevent foreign election interference when he appears before a Congressional panel on Wednesday.


The Stock Market Has a Lot of Money Riding on the 2020 Election; Populist Democratic policies could hinder some industries—but might jolt the economy out of its slow-growth rut.
Michael P. Regan – Bloomberg
In her office at RBC Capital Markets in Lower Manhattan, stock market strategist Lori Calvasina has been looking at the polling charts of 2020 presidential candidates the way she looks at stock charts. The takeaway? If politicians were stocks, she would advise shorting Joe Biden, whose poll numbers “remind us of a broken large cap.” Elizabeth Warren, on the other hand, looks like a buy. The Massachusetts senator’s chart reminds Calvasina of “a hot small-cap momentum stock that’s in the midst of breaking out.”

From Harleys to Hasbro, the Trade War Headaches Intensify
Brendan Murray – Bloomberg
Some of the most prominent engines of the global economy are showing signs of trade war fatigue. The next big concern is that the drivers will grow weary, too.

U.S., U.K. issue joint warning about activity of ‘Turla’; Purpose of hacks was intelligence collection, advisory says
Alyza Sebenius – Bloomberg
A Russia-linked group is believed to have utilized Iranian tools to conduct cyber attacks against dozens of countries, in an apparent effort to mask their identities, according to joint advisories by the U.S. and the U.K.

Taxing the Rich to Fund Welfare Is the Nobel Winner’s Growth Mantra
Vrishti Beniwal – Bloomberg
Lowering taxes to boost investments is a myth, says Banerjee; Distributing tax money among the poor seen driving consumption. How do you spur demand in an economy? By raising taxes, not cutting them, says this year’s winner of the Nobel prize for economics.

U.S. House votes to advance bill curbing anonymous shell companies
Pete Schroeder – Reuters
The U.S. House voted on Tuesday to advance legislation that would require most companies to disclose who actually owns them, as well as handing banks a long-sought update to anti-money laundering rules.

Trump Officials Battle Over Plan to Keep Technology Out of Chinese Hands; The administration is split over restrictions on exporting sensitive technologies that are vital to protecting national security.
Ana Swanson – Reuters
The Trump administration is divided over how aggressively to restrict China’s access to United States technology as it looks for ways to protect national security without undercutting American industry.

Trump Tied Ukraine Aid Directly to Probing Biden, Envoy Says
Billy House – Bloomberg
Taylor told impeachment panels of a quid pro quo Trump denies; Giuliani ran a back channel, acting ambassador to Ukraine says
The top U.S. envoy to Ukraine testified that a senior diplomat told him in early September that President Donald Trump made U.S. security aid to Ukraine entirely dependent on a public promise to investigate former Vice President Joe Biden and the 2016 election.


Exxon Mobil should pay up to $1.6B for ‘hiding’ climate change risks: AG’s office
Priscilla DeGregory – NY Post
New York Attorney General Letitia James’ Office wants Exxon Mobil to pay investors as much as $1.6 billion in restitution for allegedly hiding the financial costs of climate change from investors.

Trio of investment bankers charged with insider trading; US prosecutors allege ‘wide-ranging international scheme’ to exchange tips for cash
Kadhim Shubber, and Cat Rutter Pooley and David Crow – FT
US federal prosecutors have charged a trio of investment bankers with insider trading, accusing them of participating in a “wide-ranging international scheme” that reaped tens of millions of dollars in profits.

Goldman VP, Poker Player and Lovers In Insider-Trading Plot
Franz Wild and Matt Robinson – Bloomberg
Insider trading ring formed by movie-worthy cast of characters; Traders, bankers allegedly made millions in illicit profits
It’s like the cast of a new “Ocean’s 11” movie: a Greek with a chain of Manhattan restaurants, the son of a pharmaceuticals company board member, a poker-playing securities trader in Monaco, a Goldman Sachs Group Inc. vice president and a London investment banking couple who called each other “Pops” and “Popsy.”

Judge rules ex-Deutsche Bank traders can be prosecuted under wire fraud law for alleged ‘spoofing’
Dawn Giel – CNBC
A federal judge on Monday said that a deceptive commodities trading tactic known as spoofing can be prosecuted under the wire fraud statute, a decision that will allow a criminal case against two ex-Deutsche Bank precious metals traders to move forward.

An Australian regulator’s view on financial technology
A speech by ASIC Commissioner Cathie Armour at the China Financial Summit 2019, 22nd China Beijing International High-Tech Expo, Beijing, 23 October 2019.

ASIC suspends the AFS licence of KP International Group Australia Pty Ltd
ASIC has suspended the Australian financial services (AFS) licence of Sydney-based financial services provider KP International Group Australia Pty Ltd (KP International) until 23 September 2020.

ASIC assessment of Bloomberg Tradebook Australia Pty Ltd
The Australian Securities and Investments Commission (ASIC) has reported on its assessment of the markets operated by Bloomberg Tradebook Australia Pty Ltd (BTA).

SEC Investor Advisory Committee to Meet on Nov. 7
The Securities and Exchange Commission’s Investor Advisory Committee will hold a public meeting on Nov. 7. The meeting will begin at 9:30 a.m. Eastern Time in the Multipurpose Room at SEC headquarters at 100 F Street, N.E., Washington, D.C. and is open to the public. The meeting will be webcast live and archived on the committee’s website for later viewing.

Turning technology against financial crime
Speech by Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered at the Royal United Services Institute, London.

Securities Numbering Body Launches Task Force to Standardize Digital Assets
William Foxley – Coindesk
The Association of National Numbering Agencies (ANNA) has launched a task force to address digital asset labelings across financial markets.

PeerNova Validates Shift to Enterprise Blockchain with $31 Million Funding
David Pan – Coindesk
Blockchain startup PeerNova has received $31 million in a Series B round, bringing the company’s total fundraising to $74 million.

Commissioner Behnam to Discuss the Impact of Climate Change on Financial Stability at a Global Financial Markets Center Event

Investing and Trading

‘Wonder Years’ star Crystal McKellar deleted texts from work phone at billionaire’s fund: suit
Richard Morgan – NY Post
A former child TV actress who allegedly tried to undermine a venture fund co-founded by Silicon Valley billionaire Peter Thiel had something to hide — on her cell phone, the fund claims.

Federal Reserve steams back into the US Treasury bill market; Central bank’s short-term debt holdings soar as it tries to head off liquidity crunch
Colby Smith – FT
The Federal Reserve could soon own 12 per cent of the market for US Treasury bills, according to Oxford Economics, as it attempts to see off a repeat of the cash crunch that sent short-term lending rates spiralling in September.

Private Equity Titans Quietly Discover How to Get Richer
Tom Metcalf and Gillian Tan – Bloomberg
Robert Smith helped to popularize sales of minority stakes; Vista’s $6 billion man has sold off about a third of the firm
Robert Smith built Vista Equity Partners into a money machine. The private equity firm has racked up more than $120 billion of deals since its 2000 inception, mostly in technology companies, and produced some of the highest returns in the industry.

Where Howard Marks Looks for Signs of Market Trouble; The co-chairman of distressed debt investor Oaktree Capital says he worries when people start clamoring to get into risky investments.
Erik Schatzker – Bloomberg
The last cycle ended in the biggest economic collapse since the Great Depression. How do you think this one will end? The last one was marked by great excesses, not in the real economy but in the financial world. This time, I don’t see systemic excesses like those. The financial institutions are somewhat chastened by their experiences of 10 years ago. They haven’t been permitted to get nearly as levered as in the past, and they haven’t been permitted to engage in the same risky behavior. I don’t like to make predictions—and I never say never—but I don’t think we’re heading for a crash of similar proportions.

Debt markets split into the ‘haves’ and ‘have nots’; Investors worried about a turn in the cycle give some companies the cold shoulder
Robert Smith – FT
The longer that central banks have tried to pump up the economy by keeping interest rates low, the staler the jokes about “the formerly high-yield bond market” have grown.

Millennial investor Q&A: how do I know if an investment is a scam?
Marianna Hunt – Telegraph
I’m on a mission to beat the odds and use the stock market to take my first steps onto the property ladder within a decade. After 10 columns and a lot of Googling, I’m finally starting to get to grips with investing – but there’s always more to learn.

Coleman Research Launches Expert Relationship Management Platform – Global Primary Research Provider Rolls Out Enhanced Functionality To Provide A Complete Solution To Manage Expert Research Data
Coleman Research, a leading global provider of primary research, today announced the launch of its Expert Relationship Management (ERM) platform, a SaaS offering that helps research providers and buyside firms manage their interactions with industry experts. The cloud-based service offers a full solution to manage a database of expert profiles and the workflows associated with managing expert relationships.


State Street tech chief departs amid strategy review; State Street’s global chief technology officer of four years has departed, as the bank undergoes a review of its technology ecosystem.
Joe Parsons – The Trade
State Street is on the hunt for a new chief technology officer (CTO), with the Boston-based investment bank undertaking a review of its technology strategy.

TD Ameritrade Revenue Forecast Tops Analyst Estimates; Electronic broker expects revenue to fall about 15% next year after it nixed trading commissions
Lisa Beilfuss – WSJ
TD Ameritrade Holding Corp. AMTD 1.33% said it expects revenue to fall about 15% next year after the electronic broker nixed trading commissions, an estimate that isn’t as severe as analysts predicted.

Vanguard goes on offensive in European fund price war; Asset manager seeks to undermine rivals with fee cuts on 46 products
Chris Flood – FT
Vanguard has fired a broadside at rival asset managers throughout Europe by escalating the price war raging across the European investment fund market.

Morgan Stanley elbows out rivals for plum role in $1.5 billion IPO relaunch: sources
Scott Murdoch, Julie Zhu – Reuters
Morgan Stanley (MS.N) has usurped rivals including Deutsche Bank, Citigroup, Credit Suisse and Goldman Sachs to lead the relaunch of a $1.45 billion IPO – Hong Kong’s second-largest this year – in an unusually brutal shuffling of banks’ roles on a big deal.

Sugar rush from India’s tax cut starts to wear off; Slowest growth rate in six years is expected to limit boost to earnings
Benjamin Parkin – FT
It was a fitting image. Days after his finance minister announced a surprise $20bn corporate tax cut last month, India’s prime minister Narendra Modi strolled on to a stage in Houston with none other than the US’s own tax cutter-in-chief.


Protecting fracking sites cost police £13m, UK spending watchdog says; Report highlights ‘financial pressures’ placed on police and councils by nascent industry
Nathalie Thomas and Andy Bounds – FT
Police forces in the north of England spent more than £13m in less than two and a half years providing security at shale gas sites when only one well was fracked, according to the UK’s public spending watchdog.

Hong Kong formally scraps extradition bill that sparked protests
Hong Kong’s legislature has formally withdrawn a controversial extradition bill that has sparked months of unrest. The bill – which would have allowed for criminal suspects to be extradited to mainland China – prompted outrage when it was introduced in April. Hundreds of thousands of people took to the streets and the bill was eventually suspended. But protesters have continued regular demonstrations, which spiralled into a wider pro-democracy movement.

Hong Kong extradition bill officially killed, but move unlikely to end unrest
Jessie Pang, Twinnie Siu – Reuters
Hong Kong’s legislature on Wednesday formally withdrew planned legislation that would have allowed extraditions to mainland China, but the move was unlikely to end months of unrest as it met just one of five demands of pro-democracy protesters.

Chinese billionaire claims he is victim of Australian ‘dark forces’; Huang Xiangmo denies being an ‘agent of influence’ and disputes A$140m tax demand
Jamie Smyth – FT
A Chinese billionaire at the centre of a dispute over Beijing’s influence in Canberra has accused Australia’s tax authorities of being a “tool of political persecution” and its politicians of being no different to white supremacists.

China’s conveyor belt of ‘unicorns’ is slowing down; Only 36 start-ups with a valuation of at least $1bn were created in first half of 2019
Mercedes Ruehl – FT
China’s ability to produce valuable new start-ups, or “unicorns”, has plummeted compared with last year, according to research, as a deepening economic slowdown hits the country’s tech heartland and venture capital fundraising dries up.


Brexit May Be Delayed. But Markets Have a Bigger Problem
Michael Msika – Bloomberg
If there’s one thing that is relatively clear from last night, it’s that the risk of no-deal Brexit has dropped. While we await to see if the EU will agree to another delay and if there will be a general election, any negative reaction on European equities and U.K. domestic stocks in particular should be contained, judging by the limited retreat in futures this morning. But there might be a bigger problem for investors: the macro landscape is still deteriorating.

Brexit: Boris Johnson and Jeremy Corbyn meet after timetable rejected
BBC News
Boris Johnson has met Labour leader Jeremy Corbyn amid uncertainty over what happens next with Brexit. The meeting comes after MPs rejected the PM’s plan to fast-track a bill to implement his deal through Parliament. During PMQs, Mr Johnson said MPs had “willed the end but not the means” and it was now the EU’s decision whether to grant an extension beyond 31 October. Mr Corbyn told the Commons MPs must “have the necessary time to improve on this worse-than-terrible treaty”.

Brexit: Irish PM Varadkar backs January extension
Jayne McCormack – BBC News
The Irish prime minister has said he will support an extension of the Brexit deadline until 31 January 2020. Taoiseach Leo Varadkar was speaking after talking to European Council President Donald Tusk on Wednesday. The EU is yet to confirm how long it will approve another delay for, following the UK’s request on Saturday. Prime Minister Boris Johnson “paused” his Brexit bill on Tuesday after MPs rejected his plan to get it signed off in three days.

Brexit’s Risk to the Union Is Becoming Clearer
Alan Crawford – Bloomberg
Far from the arcane drama at Westminster, warning signs are flashing that Boris Johnson’s path to leaving the European Union carries peril for the integrity of the U.K. itself.

Brexit Has the British Fleeing to Europe; Britons aren’t just getting second passports for convenience. Increasing numbers are leaving for good.
Leonid Bershidsky – Bloomberg
Five years ago, I emigrated to Germany from Russia, because it had abandoned any pretense of wanting to be a European country. Now, I’m watching in amazement as Britons — people we Russians have long considered the epitome of Europeanness — are doing the same, in droves, for the same reason.


If Journalists Want to Save Journalism, They Should Stop Asking Google for Money
Stefano Feltri
A new report claims Google has been using its Google News Initiative to stage a “media takeover” and reveals the increasing influence of the company on newsrooms.
Politico Europe’s Playbook claims to be “the most reliable political newsletter in Brussels”—a morning must-read for journalists, policymakers, and political junkies. In 2015, Playbook readers noted a surprising small change: The newsletter was now “sponsored by Google.” It is no coincidence that, exactly at that moment, Google was under investigation by the European Commission for breaching antitrust laws. In 2015, the number of Google grants to European media suddenly spiked—from almost zero to more than 260.

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