Hits & Takes
By JLN Staff
CME Group reported its Secured Overnight Financing Rate (SOFR) futures hit a daily volume record of 152,649 contracts traded on September 17, surpassing the previous record of 86,459 contracts on July 25, 2019.~JK
The American Financial Exchange (AFX), announced a record volume trading day on September 17 with $2.637 billion traded across all AFX products, surpassing the previous record of $2.522 billion traded on April 15, 2019. Since the start of the AFX and the AMERIBOR benchmark, more than $500 billion in value has been transacted. Average daily volume in August was $2 billion and surpasses previous levels on a regular basis. A total of 25 7-day Ameribor futures were traded on Cboe on September 17 with open interest at 122 contracts.~JK
If you want to know what good BNP Paribas is up to, check out this schedule:
Sept. 19 – Corporate Sustainability Debate at Fordham University (Museum of American Finance w BNP Paribas & Moody’s sponsoring)
Sept. 22 – Global Launch of the UN Principles for Responsible Banking at United Nations
Sept. 23 – UN Principles for Responsible Banking – 1st event (BNP Paribas hosting at 787 7th Ave)
Sept. 23 – Positive Innovation Club/Sustainable Future Forum NYC (BNP Paribas hosting at 787 7th Ave)
Sept. 24 – FrenchFounders Startup Tour Competition (BNP Paribas hosting at 787 7th Ave)
Sept. 25 – Screening of a Plastic Ocean (BNP Paribas hosting at 787 7th Ave)
Sept. 30 – Tobacco Free Portfolios Roundtable (BNP Paribas hosting at 787 7th Ave)~JJL
What to make of nat gas’s prospects? A Rocky Mountain Institute study this week, examining $100 billion of planned investment in gas-fired power plants and pipelines in the US will be more costly than 90% of equivalent clean energy portfolios, such as wind and solar. And renewable projects will be cheaper than gas powered plants in 2020. Separately, Duke Energy announced a 100% carbon free goal and plans to double its renewable power by 2030.~JK
I am not sure how I was ever hired for a job, after listening to the incredible presentation from Rob Khoury with his interviewing and career tips. It is well worth listening to and sharing with anyone looking for a job. Rob put a lot of effort and thought into this MarketsWiki Education World of Opportunity talk.~JJL
The CFTC’s Technology Advisory Committee will meet on October 3 in Washington, DC. I will be in DC for it and also for the Security Traders Association regulatory conference that week.~JJL
Holly Duran Real Estate Partners represented Cboe Global Markets in its relocation to Chicago’s Old Post Office at 433 W. Van Buren St. HDREP also simultaneously represented Cboe in its newly signed 40,000 square-foot lease at 141 W. Jackson (the Chicago Board of Trade Building). Cboe will build a new trading floor on the 7th and 8th floors of that building for the S&P 500 Index options and the VIX options.~SR
Donna Heidkamp: Futures Market Myths
In this video from our MarketsWiki Education World of Opportunity event in Chicago, Donna Heidkamp, the executive director of RJO Futures, says the financial industry gives people the opportunity to be lifelong students, continuing to learn about the economy, politics, culture and many other topics. She also explores some of the myths about the futures markets, including that there is too much leverage in commodities, that you have to take delivery, and that nobody makes money in futures.
Watch the video »
T4Youth 2019 Registration Is Officially Open
T4Youth, Chicagoland’s charity tech table tennis tournament, is now accepting team registrations and corporate sponsorships for the blockbuster annual event, which benefits The Chicago Tech Academy (ChiTech), Chicago’s only public high school to incorporate wall-to-wall project-based learning, entrepreneurial principles, STEM coursework, and real-world experiences with Chicago companies into the curriculum. This year’s tournament will be held on November 13, 2019, at SPiN Chicago, and the winner will earn the title of number-one corporate table tennis team in Chicago. The funds from the event will go toward providing much-needed resources for ChiTech, including computers for students and teachers, new digital classrooms, and a new recording studio.
**** For all you beer pong players, here is a chance to show some sober skills.~JJL
People Are Looking At Your LinkedIn Profile. They Might Be Chinese Spies
Ryan Lucas – NPR
One of America’s most recent espionage cases started with a friendly hello over the Internet. It ended with a jury in Virginia finding former CIA officer Kevin Mallory guilty of spying for China. The Mallory case — a rare counterintelligence investigation to go to trial — provides a lesson in how Chinese spies use social media to try to recruit or co-opt Americans.
**** I only use LinkedIn for posting pictures of cats.~SR
BCause LLC has received a proposal to sell its equity interests in BCause Secure, LLC and its cryptocurrency spot exchange platform (the “Spot Exchange”) as part of the chapter 11 bankruptcy cases of BCause LLC and BCause Mining LLC, which are jointly administered as Case No. 19-10562 and pending before the U.S. Bankruptcy Court for the Northern District of Illinois.
All parties interested in making a competing proposal for the Spot Exchange must send an e-mail to BCauseAuction@freeborn.com on or before October 4, 2019 at 5:00 p.m. Central, which includes the following:
- Discloses the identity and contact information for each person or entity interested in the Spot Exchange; and
- A list of requested information necessary to make a proposal relating to the Spot Exchange.
All potential purchasers of the Spot Exchange shall submit an offer, letter of intent, and term sheet, via email to BCauseAuction@freeborn.com on or before October 11, 2019 at 5:00 p.m. Central.
Wednesday’s Top Three
Our top viewed item was JLN’s The Spread debut by Matt Raebel in Backing Bakkt, a curve for Curve Global, and HKEX disappointment. Second was Crain’s Chicago Business’ piece Chris Gladwin of Cleversafe building adventure park in Lemont. Third was Bloomberg’s Chaotic Repo Funding Market Fell Asleep at the Wheel
163,401,787 pages viewed; 23,920 pages; 221,580 edits
Boris Johnson’s lies are plunging Britain into a dark morass; There is not a soul in the long corridors of Whitehall who believes the prime minister is telling the truth
Philip Stephens – FT
What will she be thinking when he next tips up at Buckingham Palace? Queen Elizabeth II is Britain’s longest reigning monarch. As titular head of state, she has granted regular weekly “audiences” to her prime ministers for 67 years. There have been 14 in all — the first, Winston Churchill, the latest, Boris Johnson. The Queen has not divulged a word from these private encounters. Now she hears that, just two months in office, Mr Johnson has been lying to her.
Investors take out record number of options to trade ‘no-deal’ Brexit; Boom in traders seeking to hedge against or speculate on moves in UK bond market
Philip Stafford – FT
Investors have taken out a record number of options contracts to bet on or hedge against moves in UK interest rates, amid rising concerns that Britain may depart the EU at the end of October without an agreement on its future relationship with the bloc.
Brexit: UK has 12 days to set out plans – Finnish PM
Antti Rinne said he and French President Emmanuel Macron agreed the UK needed to produce the proposals in writing by the end of September, adding if not, “then it’s over”.
Finland currently holds the EU’s rotating presidency.
A Downing Street source said: “We will continue negotiating and put forward proposals at the appropriate time.”
EBS Launches Next Generation EBS Direct Platform
EBS, a leading provider of electronic trading platforms and technology services in foreign exchange markets, today announced it is launching a next-generation EBS Direct platform with enhanced capacity and speed, which will deliver round trip processing times below 50 microseconds.
London slips further behind New York in financial centre rankings; Brexit uncertainty and City of London’s relationship with the EU take toll on attractiveness
Cat Rutter Pooley – FT
London has slipped further behind New York in a ranking of the world’s financial centres, as extended uncertainty over Brexit and the City of London’s relationship with the EU has damaged the attractiveness of the UK capital.
Michael Zollweg to leave Trading Surveillance Office after 20 years
Michael Zollweg, Head of the Trading Surveillance Office (TSO) of the Frankfurt Stock Exchange and Eurex Germany, will leave this public position at the end of 2019 at his own request. Zollweg held this position for 20 years and leaves Deutsche Börse AG on the best of terms. The lawyer will continue to be available to the company as a consultant in the area of trading surveillance until the end of 2020. He will then concentrate on new tasks.
Exchange Stocks Rally on Volatility in Markets; Exchange operators are benefiting from large swings in the stock, bond and currency markets
Jessica Menton – WSJ
There is one group benefiting from the pickup in market volatility this week: exchange operators. Shares of CME Group Inc., CME 0.67% Intercontinental Exchange Inc., ICE 0.09% Nasdaq Inc., NDAQ -0.11% MarketAxess Holdings Inc. MKTX 0.44% and S&P Global Inc. SPGI -0.56% each have climbed at least 2.4% so far this week and are all up by double-digit percentages in 2019.
Bond Dealers Show Little Interest in Treasury Ultra Bonds; U.S. agency considers 50-year bonds to lock in low rates
Daniel Kruger – WSJ
The Treasury Department wants to take advantage of falling interest rates to borrow long term, selling bonds that don’t mature for a half-century. Wall Street may not want them.
Bank Reserves: What Are They and Why a Shortage Is Roiling a Key Interest Rate; Not many people realize this but there are two basic types of money in the world
Paul J. Davies – WSJ
Bank reserves are normally obscure, even to bankers and professional investors. But this week they have hit the news when a shortage of them caused a key measure of borrowing costs—known as the overnight repo rate—to spike. That’s a worry, because typically these more wonky areas of finance only become interesting when something is going wrong.
Repo Spike Signals Wrong Kind of Volatility; Wall Street trading desks will suffer as frightened clients retreat
Telis Demos – WSJ
A wild, mysterious ride in short-term funding markets isn’t good news for Wall Street trading desks. Big global investment banks have a love-hate relationship with volatility. With the right kind of price swings, or so-called good volatility, clients see opportunities and start making trades. That is helpful to banks with trading operations. But with the bad kind of volatility, clients retreat from trading out of fear.
U.S. bankers seize on repo-market stress to push for softer liquidity rules
Katanga Johnson, David Henry – Reuters
Big U.S. banks are using the recent chaos in short-term funding markets as an opportunity to pressure the Federal Reserve to ease liquidity requirements they have long despised.
There Ain’t No Party Like a Brexit Party Cuz a Brexit Party Is Quite Hard to Pin Down; Those planning for the big national send-off don’t know for sure when it’s going to happen; ‘we’ve been burned in the past’
Lauren Almeida – WSJ
Britons divided over whether the U.K. should leave the European Union are finding common ground on one thing. The occasion deserves to be marked by a party.
In Cryptocurrency, Will Asia Surpass the US? Exclusive Interview with SEC Commissioner Hester Peirce
Emily Parker – LongHash.com
Hester Peirce, Commissioner at the US Securities and Exchange Commission, is not a typical government official. She is a libertarian regulator whose friendliness toward digital currency has earned her the name “crypto mom.”
Banker tells German court of ‘vast network’ at center of fraud trial
John O’Donnell – Reuters
A banker at the center of a trading scheme German prosecutors say resulted in hundreds of millions of euros of illegitimate tax rebates told a court the scheme had taken on an “industrial scale” involving a network of banks and other institutions.
U.S. derivatives watchdog calls on EU for more trust
Huw Jones – Reuters
The European Union should provide clarity on when it will intervene in a foreign clearing house for derivatives to avoid potentially impeding cross-border co-ordination among supervisors, a senior U.S. regulator said on Thursday.
‘Flash Boys’ exchange is expanding, now wants to save corporations fleeced by speed traders
Hugh Son – CNBC
IEX, the stock exchange made famous by the Michael Lewis book “Flash Boys,” has set its sights on another arena where high frequency traders drive up transaction costs: corporate buybacks.
IEX’s Katsuyama is no flash in the pan
Gregg Schoenberg – Techcrunch
When you watch a commercial for one of the major stock exchanges, you are welcomed into a world of fast-moving, slick images full of glistening buildings, lush crops and happy people. They are typically interspersed with shots of intrepid executives veering out over the horizon as if to say, “I’ve got a long-term vision, and the exchange where my stock is listed is a valuable partner in achieving my goals.” It’s all very reassuring and stylish. But there’s another side to the story.
Exchanges, OTC and Clearing
CME Group Announces SOFR Futures Trading Volume and Open Interest Records
CME Group, the world’s leading and most diverse derivatives marketplace, today announced Secured Overnight Financing Rate (SOFR) futures reached a daily volume record of 152,649 contracts traded on Sept. 17, surpassing the previous single-day volume record of 86,459 contracts traded on July 25, 2019. SOFR futures open interest also reached an all-time high of 351,662 contracts on Sept. 17, surpassing the prior record of 311,371 contracts on Sept. 16.
Equity index derivatives: Introduction of derivatives on STOXX® Europe ESG Leaders Select 30 and STOXX® Europe 600 ESG-X indices
The Management Board of Eurex Deutschland took the following decisions with effect from 21 October 2019:
De-listing of 29 LDX IRS Constant Maturity Futures (GE02 – GE30)
The Management Board of Eurex Deutschland decided to de-list 29 LDX IRS Constant Maturity futures (GE02 – GE30) with effect from 30 September 2019.
GMEX taps IBM Blockchain to support digital assets; GMEX Fusion Digital Capital Markets Technology Suite to power live transactions for DAG Global across two leading cryptocurrency exchanges
GMEX Technologies Ltd.
GMEX Technologies Ltd., a wholly owned subsidiary of GMEX Group providing multi-asset post-trade business and technology solutions, today announced the latest release of its GMEX Fusion Digital Capital Markets technology suite (GMEX Fusion), built on IBM (NYSE: IBM) Blockchain Platform, this technical advancement empowers institutional investors with a hybrid solution supporting multiple digital assets, including cryptocurrencies, security tokens, and more.
Bursa Malaysia Extends Agreement to Host its Derivatives Products on CME Globex, and Plans to Acquire the Remaining 25% Equity Interest in Bursa Malaysia Derivatives
Bursa Malaysia Berhad today announced that it has extended its agreement with Chicago Mercantile Exchange Inc to host Bursa Malaysia Derivatives Berhad’s (“BMD”) products on CME Globex until September 2025 (with the option of successive renewal terms of 3 years thereafter). Bursa Malaysia will in turn acquire the 25% equity interest in BMD currently held by CME Group Strategic Investments LLC (“CMEGSI”) following the exercise of the Put Option as prescribed under an agreement entered into on 30 November 2009..
Moscow Exchange:Revised Maximum Quantity Of Securities Eligible As Collateral On Derivatives Market
CCP NCC changes maximum quantity of securities eligible as collateral on Derivatives Market starting from 7:00 p.m. on September 26, 2019:
What Are the Listing Requirements for Nasdaq? Got a great new tech company? Nasdaq might be the place for you.
Eric Reed – The Street
There is no such thing as “the stock exchange.” To be more specific, there is no such thing as one, single stock exchange. Instead traders do business on many exchanges around the world. Which ones they choose depend on the specific companies they want to trade, the markets that interest them and (often) the country in which they live.
ALEX BRUMMER: China having a grip on our stock exchange is fraught with danger – it must be resisted
Alex Brummer – Daily Mail
Sitting in the shadow of St Paul’s Cathedral, the London Stock Exchange (LSE) is a shining symbol of the City’s huge contribution to Britain’s economy. Banking, insurance and finance earn this country a surplus of £60 billion a year on services provided to the rest of the world. They account for more than 10 pc of national output. And they are Britain’s biggest taxpayers.
Chicago options exchange to move headquarters, open new trading floor; Cboe Global Markets, parent company of the Chicago Board Options Exchange, will move its headquarters to the Old Post Office; the trading floor is moving to the Chicago Board of Trade Building.
David Roeder – Runtimes
The parent company of the former Chicago Board Options Exchange said Tuesday it will move its headquarters into the Old Post Office and will build a new trading floor in the Chicago Board of Trade Building at 141 W. Jackson.
BSO integrates IX Reach core network to create a global network powerhouse
BSO has successfully integrated IX Reach into its award-winning low-latency global infrastructure, providing customers with exceptional performance, speed and scale, engineering talent, and the latest advancements in SDN networking and automated cloud provisioning.
Seed CX partners with Itiviti to offer NYFIX connectivity for cryptocurrency customers
Itiviti, a leading technology and service provider to financial institutions worldwide, today announced a partnership with Seed CX, an institutional exchange and settlement platform for digital assets. This partnership ensures that traditional institutional firms currently utilizing Itiviti’s NYFIX network, now can access Seed CX’s digital asset exchange and settlement ecosystem.
NICE Actimize launches cloud-based, holistic trade surveillance platform; SURVEIL-X solution aims to provide single view of market manipulation and abuse through multi-source data capture and analytics.
John Brazier – The Trade
NICE Actimize has launched a new artificial intelligence-based surveillance platform aimed at providing financial services firms and regulators with a single overview of market abuses.
Deutsche Bank stake lifts German fintech company to EUR1bn valuation; Deal worth EUR50m with Hamburg-based Deposit Solutions marks largest fintech investment for lender
Olaf Storbeck – FT
Deutsche Bank is paying EUR50m for a 4.9 per cent stake in open-banking start-up Deposit Solutions in a transaction that values the Hamburg-based start-up at more than EUR1bn ($1.1bn).
It’s Time to Bust Some Myths in the Market Data ‘Debate’
Jeff Kimsey – TABB Forum
Too often the market data debate retreads the same ground, as exchanges that provide market data first have to chop through a forest of misinformation. The myths that surround market data often are perpetuated by aspiring competitors or well-financed special interests, says Nasdaq’s Jeff Kimsey. Here, he dispels the top market data myths, citing Nasdaq revenue data that has not been disclosed previously.
Early Ethereum advisor Steven Nerayoff arrested in alleged multi-million dollar cryptocurrency extortion scheme
The Block Crypto
Steven Nerayoff, a technology entrepreneur involved with Ethereum, CasperLabs, tZero and dozens of other initial coin offerings (ICOs) and cryptocurrency projects, was arrested today along with Michael Hlady on charges of extortion. The U.S. Attorney for the Eastern District of New York and the FBI’s New York Field Office jointly announced the charges.
Everyone’s Worst Fears About EOS Are Proving True
Brady Dale – Coindesk.
In early September, one of the small companies that helped to get the EOS blockchain off the ground called it quits. EOS Tribe, which participated in the launch of the first EOS chain, announced on Steemit that it was stepping away from EOS as a block producer (BP) candidate, focusing on other blockchains and other implementations of the EOSIO software.
Blockchain goes extra-terrestrial
Jemima Kelly – FT
An other-worldly blockchain press release crash-landed into the our inbox this week. It contained some somewhat sigh-enducing sentences such as: “SpaceChain’s vision is to remove barriers and allow a global community to access and collaborate in space.”
What Is Going On With Bitcoin-Rival Stellar?
Billy Bambrough – Forbes
Bitcoin-rival stellar, a top ten cryptocurrency by value that’s seen its price plummet since peaking in early 2018, suddenly soared today – only to fall back almost instantly. While the bitcoin price remains mostly flat, and other major altcoins including ethereum, Ripple’s XRP, and litecoin, make some reasonable gains, stellar jumped a massive 30% in the last few hours, just to fall back again, according to the latest prices on the U.S.-based bitcoin and cryptocurrency exchange Coinbase.
Mark Zuckerberg Struggles to Keep Libra Alive
Lionel Laurent – Bloomberg
Mark Zuckerberg’s cryptocurrency project, Libra, has become the regulatory equivalent of a pinata: Everyone is lining up to hit it with a stick. France’s finance minister Bruno Le Maire calls it an assault on sovereignty and a risk to financial stability, an attack backed up by his German counterpart Olaf Scholz who dubbed it a “parallel currency.”
Warning Issued After Bitcoin And Litecoin Wallets Targeted By Malware
Billy Bambrough – Forbes
Bitcoin and the wider cryptocurrency market’s huge price rise over the last few years meant that criminals quickly began taking a closer interest in crypto. A rapid increase in crypto scams and thefts came along with mainstream bitcoin awareness. Now, cyber security researchers have warned that malware could be stealing bitcoin and litecoin wallet information.
Blockchain consulting firm allegedly extorted crypto start-up with threats to hijack its initial coin offering
Kate Fazzini – CNBC
A New York blockchain consulting firm allegedly extorted a Seattle crypto start-up with threats to hijack its initial coin offering, in a case announced Wednesday by the Eastern District of New York prosecutor. The anonymous Seattle start-up signed an agreement with Maple Ventures, an offshot of Alchemist LLC, which purported to be a blockchain consulting firm and “accelerator” based in New York, according to a complaint filed by the Eastern District Sept. 17.
North Korea is developing its own cryptocurrency
The Block Crypto
North Korea is in the early stages of developing its own cryptocurrency, according to a report from VICE news. A representative for the regime told VICE that the goal of the cryptocurrency is to “avoid international sanctions and circumvent the U.S.-dominated global financial system.”
Ether Just Had Its Longest Winning Run Since Late May
Omkar Godbole – Coindesk
Ether, the native cryptocurrency of ethereum, has logged its longest daily winning run in nearly four months. The world’s second-largest cryptocurrency by market value closed (UTC) with 1.47 percent gains on Wednesday, having risen by 3.9, 1, 3.5, and 6.2 percent on Saturday, Sunday, Monday and Tuesday, respectively, according to CoinMarketCap data. The five-day winning streak is the longest since the end of May, as seen in the chart below.
Abra to Add Cash-to-Crypto Outlets at All Philippines 7-Elevens
Daniel Palmer – Coindesk
Investment app provider Abra is to sell cryptocurrency for cash at 6,000 outlets across the Philippines. The expansion comes after the firm inked a deal with local payments company ECPAY to access its network that includes all 7-Eleven stores in the country. The service lets any user of an Abra wallet purchase crypto via 7-Eleven’s CLIQQ app or kiosks.
Binance to Add Fiat-to-Crypto OTC Trading in a Month, Co-Founder Says
Richard Meyer – Coindesk
Crypto exchange Binance is planning to add over-the-counter (OTC) trading to its platform in a month to provide users with fiat currency gateways. Binance’s co-founder and chief marketing officer He Yi said at a media session on Tuesday during the Shanghai Blockchain Week that the exchange will specifically support fiat on-ramp via OTC for Chinese yuan.
Libra Seen as Threat to National Currency Sovereignty, Pleads With G-7
Stephen O’Neal – Cointelegraph
Public authorities across the globe continue to press the developers of Libra, Facebook’s proposed stablecoin-like digital asset. On Sept. 16, Libra representatives met with the Committee on Payments and Market Infrastructure (CPMI), a part of the Bank for International Settlements (BIS) — an umbrella group for 60 central banks and monetary authorities — to discuss the regulatory hurdles around stablecoins developed by large financial institutions and tech companies.
SEC Charges Token Sale Platform For Illegal $14M Securities Offering
Joeri Cant – Cointelegraph
The United States Securities and Exchange Commission (SEC) has sued ICOBox and its founder Nikolay Evdokimov for conducting an illegal securities offering and for acting as unregistered brokers.
Warning Issued After Bitcoin And Litecoin Wallets Targeted By Malware
Billy Bambrough – Forbes
Bitcoin and the wider cryptocurrency market’s huge price rise over the last few years meant that criminals quickly began taking a closer interest in crypto.
Arab Bank’s Swiss Arm is Launching Cryptocurrency Services
Daniel Palmer – Coindesk
The Swiss branch of one of the top financial institutions in the Middle East is launching a suite of cryptocurrency-based services.
North Korea Plans Bitcoin-Like Cryptocurrency to Sidestep Sanctions
Daniel Palmer – Coindesk
North Korea is working on building its own cryptocurrency to get around the tough international sanctions. Development is apparently still in its early stages and follows a similar project from Venezuela, which launched its oil-backed petro token last year – also to avoid U.S.-led sanctions.
Blockchain Mortgages Could Help The Impending Recession
Biser Dimitrov – Forbes
Lately there’s been a lot of discussion about a potential new financial recession being at our doors. All the signs are already present, from the stock market being shaky and the US economy being sluggish, the European banks on a downtrend, the China and US trade war continuing to linger and the Federal Reserve cutting interest rates for the first time since the last financial crisis, then doing it again two-months later to the Repo markets interest rate spike.
New Bitcoin Mutual Fund Eases Crypto for Wary Asian Investors
David Pan – Coindesk
Hong Kong-based venture capital group CMCC Global launched its Liberty Bitcoin Fund to provide crypto currency access to accredited investors in Asia who are very interested but have been slow to buy the coins directly.
Trump’s $28 Billion Bet That Rural America Will Stick With Him; Farmers caught in the trade war have become dependent on government payments.
Mario Parker, Mike Dorning – Bloomberg
U.S. Secretary of Agriculture Sonny Perdue was fielding questions at a farm show in Decatur, Ill., in late August when his boss rang his cellphone. Perdue put the call on speaker and placed it next to the microphone so the crowd could hear Donald Trump speak. During the almost seven-minute call the president defended his handling of the trade conflict with China, which has cut off American farmers from one of their most important export markets. Yet he was quick to remind them that he’s tried to salve their pain. “I sometimes see where these horrible dishonest reporters will say that ‘oh jeez, the farmers are upset.’ Well, they can’t be too upset, because I gave them $12 billion and I gave them $16 billion this year,” said Trump, who then added, “I hope you like me even better than you did in ’16.”
When Presidents Pummel the Fed; Before Bill Clinton, such browbeating was the norm. Powell has endured Trump’s assaults with dignity.
Alan S. Blinder – WSJ
Two and a half cheers for my friend (that’s a disclosure) Jay Powell, chairman of the Federal Reserve Board. I’ll come back to the half, but the two cheers are for the exemplary way he has conducted himself in office. That includes most of his decisions, his efforts to enhance the Fed’s communications, and, most important, the way he has stood up to the blusterer in chief—steadfastly, but with dignity.
Fed Chairman Jerome Powell Masters the Art of Saying Nothing; By refusing to elaborate on what the central bank will do next, Powell leaves less room for misinterpretation and forces market to think for itself
Greg Ip – WSJ
Asked Wednesday when the Federal Reserve would be done cutting interest rates, Chairman Jerome Powell answered: “When we think we’ve done enough.”
EU’s New Boss, Invoking ‘European Way of Life,’ Sparks Partisan Brawl; Not yet in office, Ursula von der Leyen thrills far right with new titles for her deputies
Valentina Pop – WSJ
Partisan bickering between Europe’s left and right is threatening to engulf the once-insulated technocratic institution of the European Commission as new leaders take charge.
Trump Makes the Fed His Punching Bag. Again; “No ‘guts,’ no sense, no vision! A terrible communicator!”
Mark Gongloff – Bloomberg
Imagine you go to your job and do what’s expected of you and then your boss tweets to the world that you have failed again, having “No ‘guts,’ no sense, no vision! A terrible communicator!” I can easily imagine it, but my employers have so far kept such thoughts to themselves.
Zuckerberg Heads to Capitol Hill to Push His Version of Internet Regulation; Facebook founder will seek to placate lawmakers who are weighing tougher moves
John D. McKinnon – WSJ
Facebook Inc. FB 0.03% CEO Mark Zuckerberg will travel to Capitol Hill on Thursday to pitch his vision for moderate internet regulation and seek to placate lawmakers who are weighing tougher moves.
Powell Finds Trust With Stock Investors That He Lost With Trump
Vildana Hajric and Sarah Ponczek – Bloomberg
Central bank cut rates for the second straight meeting; Powell says Fed is prepared to ‘be aggressive’ if data turns
Donald Trump may have lost faith in Jerome Powell but the stock market hasn’t.
Bill Gates Is Right to Support a Wealth Tax; The money he pays could go to important projects that he wouldn’t fund himself.
Leonid Bershidsky – Bloomberg
In his new book on how to fix inequality, French economist Thomas Piketty may have gone a little too far with a call for a 90% wealth tax for billionaires and multimillionaires, but putting a tax on huge fortunes may well make sense. Bill Gates, the second richest man in the world, thinks so. His case makes it clear why governments should go for it.
FCA finds MiFID II research unbundling rules working well for investors
The Financial Conduct Authority (FCA) has today published multi-firm review findings indicating the Markets in Financial Instruments Directive’s (MiFID II) research unbundling rules have improved asset managers’ accountability over costs, saving millions for investors.
CFTC’s Technology Advisory Committee to Meet on October 3
The U.S. Commodity Futures Trading Commission’s Technology Advisory Committee (TAC) announced today that it will hold a public meeting on Thursday, October 3, 2019, at the CFTC’s Washington, DC headquarters.
NFA bars Chicago, Ill. commodity trading advisor Systra LLC and its principal Robert H. Kopp from membership
NFA has permanently barred Systra LLC (Systra), an NFA Member commodity trading advisor located in Chicago, Ill., and its sole principal and associated person Robert H. Kopp from membership and from acting as a principal of an NFA Member.
Keynote Address of Commissioner Dawn D. Stump at the 2019 ISDA Annual Europe Conference; From Pittsburgh with Love Dramatic Reforms, Ten Years Later
I am pleased to join you here in London for ISDA’s Annual Europe Conference. Before we get started, I want to say that the views I express today are my own and may differ from those of the Commission that I am honored to serve upon. While this is my first trip to the United Kingdom since being sworn in as a CFTC Commissioner, prior professional endeavors enabled me to experience and appreciate not only the city, but also the financial services industry expertise and market infrastructure here in London. More recently, I have had the privilege to develop working relationships with several fellow market regulators both here in the U.K. and within Continental Europe. The tremendous responsibility to regulate global derivatives markets in today’s dynamic environment makes fast friends among those who share this charge.
SEC Charges ICO Incubator and Founder for Unregistered Offering and Unregistered Broker Activity
The Securities and Exchange Commission today sued ICOBox and its founder Nikolay Evdokimov for conducting an illegal $14 million securities offering of ICOBox’s digital tokens and for acting as unregistered brokers for other digital asset offerings.
SEC Halts Alleged $125 Million Offering Fraud
The Securities and Exchange Commission today announced that it has filed an emergency action and obtained a temporary restraining order and asset freeze against three individuals and three entities in connection with an alleged fraudulent, ongoing international trading program that has placed at risk more than $125 million of investor funds.
Ravi Menon Appointed Chair Of The Bank for International Settlements (BIS) Asian Consultative Council
The Board of Directors of the Bank for International Settlements (BIS) has appointed Ravi Menon as Chair of the BIS Asian Consultative Council (ACC) from 26 September 2019. Mr Menon is Managing Director of the Monetary Authority of Singapore. The term of appointment for the ACC Chairman is two years.
Investing and Trading
Scott Mushkin, Top Ranked Food Retail and Consumer Staples Analyst by Institutional Investor and Thomson Reuters, Launches R5 Capital in partnership with Analyst Hub
Analyst Hub, LLC
Analyst Hub, LLC, an independent research infrastructure platform company that provides talented sell-side analysts a path to owning their own enterprises, and R5 Capital, a boutique consumer-centric equity research and consulting firm focused on utilizing proprietary data and significant “boots on the ground” analysis to identify unique investment opportunities and provide strategic advice for companies, today announced their partnership with the launch of R5 Capital, LLC. R5 is the 17th independent research provider to join Analyst Hub’s rapidly growing roster of leading IRPs.
Fed Injects More Into Money Markets After Banks Bid Heavily for Funds; Short-term funding spike raises hopes for future Fed cuts
Paul J. Davies and Sam Goldfarb – WSJ
Banks on Wednesday snapped up $75 billion on offer from the Federal Reserve Bank of New York in a second day of intervention meant to ease a crunch in overnight funding markets.
‘Green-friendly’ ETFs hold shares in groups with coal operations; Investments by two State Street-run funds raise questions over fund managers’ practices
Billy Nauman – FT
Two exchange traded funds explicitly marketed as excluding fossil fuels are holding thousands of shares in mining and energy companies with significant coal operations, raising questions about fund managers’ marketing practices and the responsibility of regulators to clear confusion around what investments should count as green.
KPMG UK to cut hundreds of admin roles in cost-saving drive; Partners asked to file their own expenses
Tabby Kinder and Madison Marriage – FT
KPMG UK plans to make redundant about a third of its 630 administrative assistants in a wave of cost-cutting.
Solar and Wind Power So Cheap They’re Outgrowing Subsidies; The government aid renewable energy developers once relied on is fading away
Mark Chediak, Brian Eckhouse – Bloomberg
For years, wind and solar power were derided as boondoggles. They were too expensive, the argument went, to build without government handouts.
Why We Love to Call Everything a Bubble; It’s not always easy to understand why assets get expensive, but that doesn’t mean every risk in the market is about to pop.
Joe Weisenthal – Bloomberg
Dear investors, I wanted to give you an update and share some good news: The Bubble Opportunity Hedge Fund is up more than 22% this year thanks to our significant holdings of long-term government bonds, Bitcoin, and urban real estate.
Swiss National Bank helps banks brace for long-term negative rates
John Revill – Reuters
The Swiss National Bank expects to stick to its ultra-loose monetary stance for the long haul after it kept its policy on hold on Thursday and handed banks hit by its negative interest rates extra breathing space.
The Fed Gets Schooled in Basic Economics; Rate cuts and the law of diminishing returns lead market commentary. Plus, hawk detectors, yuan correlation and more.
Robert Burgess – Bloomberg
Every first-year economics student learns about the law of diminishing returns, which basically states that adding more of one factor to production will eventually yield lower incremental returns. That economic truism is being played out Wednesday in real time in the stock market, this time with the Federal Reserve as the student.
Jittery Repo Market Has Calmed, But Fed Plans to Intervene Again
Liz McCormick and Alex Harris – Bloomberg
Fed plans to offer $75 billion cash injection on Thursday; Similar actions this week have eased pressures in key market
Let’s do it again. The Federal Reserve made crystal clear that it doesn’t want U.S. money market rates to spike again like they did early this week, announcing it will — for the third day in a row — inject cash into this vital corner of finance.
BNY Mellon strikes major front-office alliance to integrate custody data; Custodian follows up on BlackRock deal in April with integration of its custody and fund accounting data with most-used OMS in the market.
Joe Parsons – The Trade
BNY Mellon has struck its another deal with a major front-office system, as the world’s largest custodian looks to connect its data to leading global trading platforms.
Warren Buffett Protege to Leave Berkshire, Start Own Firm; Tracy Britt Cool says she wants to work with companies ‘too small for Berkshire’
Nicole Friedman – WSJ
Tracy Britt Cool, one of Warren Buffett ‘s key lieutenants in recent years, is leaving Berkshire Hathaway Inc. BRK.B 0.36% to create a mini Berkshire of her own.
Danske Overtakes Rival Banks With Shrewd Debt-Sale Tactics
Frances Schwartzkopff – Bloomberg
Danske Bank A/S is racing ahead of its rivals in issuing a key type of debt as investors desperate for yield look past the lender’s history of financial scandal.
Hargreaves Lansdown Gets Rid of Exit Fees Amid Woodford Fallout
Lucca De Paoli – Bloomberg
Firm calls on other platforms to join in scrapping exit fees; Platform came under scrutiny as a longtime backer of Woodford
Hargreaves Lansdown Plc has scrapped the fee it charged customers to leave the investment platform as it tries to rebuild investors’ trust after being caught up in the tumult surrounding Neil Woodford’s decision to freeze his flagship fund.
Deutsche Bank Faces Yet More Awkward Questions; The ECB is considering a probe of the bank for alleged trading in its own riskiest debt without approval. This is a big test for the regulator too.
Elisa Martinuzzi and Marcus Ashworth – Bloomberg
For the umpteenth time, Deutsche Bank AG is ensnared in an alleged regulatory blunder. Except this time, the stakes are greater than its own integrity: Confidence in its regulator, the European Central Bank, is on the line too.
Exclusive: Deutsche Bank has discussed adding assets to bad bank if sales go well – sources
Matt Scuffham – Reuters
Some senior Deutsche Bank AG (DBKGn.DE) officials have discussed the possibility of putting additional problematic assets worth billions of euros into a unit it created earlier this year, if the bank is able to sell assets already held within that “bad bank,” according to three bank sources.
ECB Gives Banks 3.4 Billion Euros for Free as Stimulus Steps Up
Piotr Skolimowski – Bloomberg
TLTRO-III is the third series of long-term loans to lenders; Plan is to boost investment and spending to revive inflation
The European Central Bank gave the region’s lenders 3.4 billion euros ($3.8 billion) in free long-term loans as it revived a policy intended to boost economic growth and inflation.
How Britons forgot that history can hurt; Centuries of stability have created a country careless about risk
Simon Kuper – FT
Walking around Cambridge, you see Britain’s unbroken past. The town centre hasn’t changed much since Isaac Newton’s day. If he reappeared at Trinity College tomorrow, he’d easily find his way around.
Top Shadow Banker Calls Time on India’s Credit Crisis
Divya Patil and Baiju Kalesh – Bloomberg
Interest-rate cuts and liquidity infusion will ease situation; The market may return to normalcy by December: Edelweiss’ Shah
One of India’s top shadow financiers by assets is betting that central bank easing will bring an end to the nation’s prolonged credit crisis, even as fresh strains in the sector emerged this week.
The Political Will to Avert a No-Deal Brexit Is Ebbing Fast
Ian Wishart and Tim Ross – Bloomberg
It’s like two cars hurtling toward each other, official says; U.K. sent EU limited set of written documents on Thursday
Brexit from afar is looking like a disaster about to happen. One European official, watching the situation up close, compared it to two cars driving at high speed toward each other with each expecting the other to swerve out of the way first.
Brexit Has Cost London Just 1,000 Investment Bank Jobs
Silla Brush – Bloomberg
A fraction of expected staff moves to EU have occured, EY says; ‘Building blocks in place’ for Brexit but firms await clarity
With just over six weeks until the U.K. is due to quit the European Union with or without a deal, the much feared investment banker exodus out of London is still just a trickle.
Boris Johnson Hints He Could Suspend Parliament Again in Court Filing
Tony Aarons – Bloomberg
The government told the Supreme Court that it would consider suspending Parliament a second time even if it loses the current case.
Bank of England Says Brexit Uncertainty May Weaken Inflation
Jill Ward – Bloomberg
U.K. central bank keeps benchmark interest rate unchanged; Says underlying growth has slowed, but should remain positive
The Bank of England said that inflation may be weaker than expected if the uncertainty surrounding Britain’s departure from the European Union persists.
The British Company That Doesn’t Fear a Hard Brexit; Next is facing a sales slowdown but is better placed than most retailers if the U.K. crashes out of the European Union.
Andrea Felsted – Bloomberg
As Britain appears to be careering toward a no-deal Brexit, Next Plc Chief Executive Simon Wolfson is trying to reassure investors that the company should come out largely unscathed. That sounds overly optimistic, but Next has less to fear than most retailers.
Japan’s richest man says Brexit practically impossible
Tadashi Yanai, one of the world’s richest businessmen, is warning that Brexit is hurting the UK’s reputation for being an open economy.