Documents unsealed in CFTC v Kraft
Thom Thompson – John Lothian News
On Wednesday, October 2, the Chicago federal district court unsealed 500 hundred pages of documents in the contempt of court dispute between the CFTC and Kraft Foods and Mondelez, as ordered by the Seventh Circuit Court of Appeals. The CFTC had filed on September 13 its motion to prevent the district court from questioning CFTC officials and, if questioning is ever to be allowed, that it be conducted by a different district court judge. The CFTC has scored a victory by so far avoiding the evidentiary hearing scheduled for October 2.
Kraft complained to the district court on August 15, the same day court entered the settlement on its docket, that the CFTC had published three statements on its website that violated Paragraph 8 of the freshly minted settlement agreement. Paragraph 8 states, “Neither party shall make any public statement about this case other than to refer to the terms of this settlement agreement or public documents filed in this case, except any party may take any lawful position in any legal proceedings, testimony or by court order.”
To read the rest of this article, go here.
Hits & Takes
By JLN Staff
“Hi, I’m Heath.” That was how CFTC Chairman Heath Tarbert quickly introduced himself to me before the start the CFTC Technology Advisory Committee meeting yesterday. He then moved on and shook more hands. He stayed for the opening of the meeting, then departed for the rest of the day.~JJL
Thank you to all who responded to my statement on justice for Jitesh Thakkar. It was overwhelmingly positive by email, LinkedIn, Twitter, Facebook and at the TAC meeting.~JJL
Chris Halverson, the new STA chairman and senior vice president at Capital Institutional Services, Inc. cried during his opening remarks at the dinner last night in Washington, DC when talking about his family. The entertainment for the evening, a comedian, quickly made fun of Halverson’s crying in his opening jokes.~JJL
The attorney for Bcause LLC, the cryptocurrency mining farm, was directed by the federal bankruptcy court to draft a plan for orderly liquidation of the company. Bcause admitted to the court on Thursday that it could no longer plan to maintain adequate cash collateral to protect the secured creditor’s interest. Its largest customer and shareholder, SBI, has confirmed that it will not renew its contract, and a once-hoped-for agreement with its second largest customer and largest single creditor, BMG Operations, fell through last month. The prospective sale of Bcause Secure, the spot market platform which has not launched, is not affected so far. The plan will be heard by the court on Tuesday, October 8. If the court does not accept Bcause’s plan, the likeliest alternative is the conversion of the case to a Chapter 7 Bankruptcy, resulting in a potentially very disorderly liquidation. ~Thom Thompson
Our friends at Connamara have a new website.~JJL
Chicago’s Museum of Science and Industry will rename itself after a record $125 million donation from Ken Griffin, the founder and CEO of Citadel. It will become the Kenneth C. Griffin Museum of Science and Industry.~SR
Mike Fishbain – Open Outcry Traders History Project
Mike Fishbain is a former open outcry trader at the Chicago Mercantile Exchange. Today he is part of the customer support team at Trading Technologies, a leading provider of trading screen technology to the futures and options markets. He sat for an interview with John Lothian News as part of the MarketsWiki Education Open Outcry Traders History Project.
Watch the video »
CME Group to Launch E-mini S&P 500 ESG Index Futures
CME Group, the world’s leading and most diverse derivatives marketplace, today announced it will launch E-mini S&P 500 ESG Index futures, a new risk management tool that aligns with environmental, social and governance (ESG) values. The new futures contracts will be available for trading on Nov. 18, 2019, pending regulatory review.
*****Richard Sandor always says, “Do well by doing good.” Here is your chance.~JJL
NFA – CTA and CPO Performance Accounting Changes
Turnkey Trading Partners
National Futures Association submitted two rule submission letters to the CFTC on August 29th, 2019 updating various NFA Rules and Interpretive Notices. Below we will look at some of the key changes and compliance related impacts they will have on various operations.
CTA Performance Accounting and Presentation While it has always been good practice, NFA’s new amendment will require CTAs that trade accounts using notional funds to ensure trade level updates are confirmed in writing from clients. The proposed amendments now require the confirmation to be provided to all clients, regardless of QEP status, and also include an explanation of how cash additions, cash withdrawals and net performance will affect an accounts nominal trade level size.
***** I always loved the word “notional.” “Make believe” just does not sound as good.~JJL
What is the Optimal Market Structure for Digital Assets?
It is a hopeful sign of the beginning maturation of the digital asset markets that various players are staking out their positions and arguing their opinions about market structure. The topic often becomes mired in technical details so for this piece, we have taken a step back to discuss a broader set of market structure points, informed by history and experience, aiming to see the forest in addition to the trees.
**** When thinking of digital assets, forests and trees do not leap to mind.~JB
FINRA Foundation Awards 2019 Ketchum Prize to Dr. Olivia S. Mitchell; University of Pennsylvania Professor Recognized for Outstanding Service and Research to Advance Investor Protection and Financial Capability in the U.S.
The FINRA Investor Education Foundation (FINRA Foundation) today awarded Dr. Olivia S. Mitchell the 2019 Ketchum Prize—its highest honor—for her extraordinary research on pensions and retirement income and her efforts worldwide to advance financial literacy.
**** Congratulations, Dr. Mitchell. Great work!~JB
CryptoMarketsWiki Coin of the Week: EOS
The creators of EOS, Block.One, must pay $24 million in penalties for running an unregistered securities offering (in this case, an ICO), according to a press release by the SEC this week. The sale went on for a year and raised $4.1 billion. The tokens concerned in the violation are not the EOS tokens currently in circulation, but rather Ethereum-based ERC-20 “proxy” tokens that were sold during the ICO to be exchanged for actual EOS tokens after the sale.
Thursday’s Top Three
Our top read story Thursday was Crain’s Chicago Business’ Jump Capital raises $200 million venture fund. Second was The Wall Street Journal’s CFTC Says Enforcing Risk-Management Rules Is a Priority. Third was the FT’s What meeting Bernie Madoff taught me about our inability to read others
164,545,386 pages viewed; 23,935 pages; 221,719 edits
Bringing Rupee Trading Home, India Takes Steps to Deepen Markets
Subhadip Sircar – Bloomberg
India plans to allow foreign-exchange settled rupee derivatives trading in specially designated centers as it tries to deepen the local market. The non-deliverable forwards trading will take place in the International Financial Services Centres, the Reserve Bank of India said Friday. GIFT City in Prime Minister Narendra Modi’s home state of Gujarat is currently the only operational venue.
LSE shareholders tell HKEX ‘cash could swing deal’ as deadline looms; But as the clock ticks down, shareholders remain unconvinced that a tie-up with HKEX is superior to sticking with Refinitiv
Samuel Agini and David Ricketts – Financial News
Hong Kong Exchanges and Clearing has just a few days to formalise its hostile takeover bid for the London Stock Exchange or walk away, and shareholders say HKEX must sweeten the offer to be taken seriously.
Betting on bitcoin prices may soon be deemed illegal gambling; Regulators increasingly think crypto-derivatives are unsuitable for retail investors
On September 24th the price of a single bitcoin, the best-known cryptocurrency, fell by $1,000 in 30 minutes. No one knows why, and few people cared. There have been similar drops nearly every month since May. Yet for one obscure corner of the market, it mattered. Exchanges that sell “long” bitcoin derivatives contracts, with which traders bet that prices will rise without buying any coin, soon asked punters for more collateral. That triggered a stampede. By the end of the day $643m-worth of bitcoin contracts had been liquidated on Bitmex, a platform on which such contracts trade. Bets on other cryptocurrencies also became toxic.
Market Abuse Crackdown Could Come for $2 Trillion FX Trades
Silla Brush – Bloomberg
ESMA considers whether rules should cover spot currency market; New oversight could follow billion-dollar fines for rigging
Regulators have the foreign exchange market back in their sights after recently imposing fines for manipulating prices.
How the Fed Is Trying to Fix Its White Male Problem
Jeanna Smialek – The New York Times
The Federal Reserve’s research staff is far less diverse than the American population it is meant to serve, a reality that the central bank is trying to change as a reckoning over inclusion sweeps through the economics profession. Three in four Fed economists are men and a majority of those are white. That matters beyond optics: Varied backgrounds can help the Fed better understand the people its policies are meant to help, from working mothers to the underemployed.
Quiet start for Cboe’s Brexit share trading hub in Amsterdam
Huw Jones – Reuters
Cboe Europe’s new share trading hub, which launched in Amsterdam on Tuesday, has attracted light trading so far, giving nervous regulators and policymakers in Britain few clues on how much activity will eventually leave London after Brexit.
EU watchdog scrutinises currency market proposals; Esma launches consultation on substantial broadening of regulatory regime
Caroline Binham, Eva Szalay and Philip Stafford – FT
The $2tn-a-day spot foreign-exchange market could be put under regulatory control for the first time, under proposals being weighed by the EU markets watchdog.
Why London’s stock market is losing its lustre; High-profile flops, delistings and Brexit weigh on sentiment
Philip Stafford, Cat Rutter Pooley and Katie Martin – FT
The decision by Shore Capital to scrap its listing in London has thrown a spotlight on a wider problem: the UK stock market is losing its lustre.
U.S. regulator fines RBC Capital Markets $5 million for unlawful trades
Nichola Saminather – Reuters
RBC Capital Markets has been fined $5 million (C$6.7 million) by the U.S. Commodities and Futures Trading Commission for failures that resulted in unlawful trades and other violations between at least late 2011 and May 2017.
Small Business Hiring Slows
James Freeman – WSJ
Small businesses are hiring but still struggling to find help—even as they raise wages. According to the latest monthly employment report from the National Federation of Independent Business, due out later today: Job creation was firm in September, with an average addition of 0.10 workers per firm compared to 0.19 in August. Net job creation has faded steadily since February from 0.52 workers per firm to 0.1; no surprise as “finding qualified workers” to fill job openings hit a record high of 27 percent in August. Finding qualified workers remains a top problem with 23 percent reporting it as their number one problem (down 4 points from August’s record high).
Fed Expected to Give Large Banks a Break on Post-Crisis Rules; Central bank prepares to vote on some of the most significant changes since Trump took office
Andrew Ackerman – WSJ
The Federal Reserve is expected next week to complete some of the most significant changes to bank rules since President Trump took office, setting up a new way of deciding which large banks are hit with its toughest regulations.
Fallen Wall Street Lawyer Gets One Month in College Scandal
Patricia Hurtado and Janelle Lawrence – Bloomberg
Ex-Willkie chair Caplan approached sentencing as ‘broken man’; He paid to fix child’s ACT score; U.S. wanted eight-month term
On a phone call with the mastermind of the biggest college-admissions scam in U.S. history, Gordon Caplan asked what would happen if his daughter got caught cheating on her entrance exam.
Thomson Reuters buys events specialist firm FC Business Intelligence
Thomson Reuters Corp (TRI.TO) (TRI.N) said on Friday it had acquired business-to-business events specialist, FC Business Intelligence (FCBI).
Bank of England Warns On Libor Transition
Shanny Basar – MarketsMedia
The Bank of England has warned that firms are continuing to write new Libor contracts even though the benchmark interest rate is expected to be discontinued after the end of 2021.
Schwab’s Next Target? Your Financial Adviser; Discount brokers are losing revenue from commission-free trading. They have to make it up somewhere.
Nir Kaissar – Bloomberg
There’s a showdown looming between financial advisers and the custodians that safeguard their clients’ money. It’s been brewing for some time, and the move by Charles Schwab Corp. on Tuesday to offer commission-free trading makes the clash all but inevitable.
Exchanges, OTC and Clearing
Intercontinental Exchange Reports September Statistics ; 3Q19 Average Daily Volume up 12% y/y and Open Interest up 11% y/y
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE) today reported September trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
Nodal Exchange Achieves Record 44% Traded Volume in Power Futures
Nodal Exchange continues to improve its strong position in the North American monthly power futures markets with a record 44% market share of traded volume in September 2019 and a record 42% market share of open interest as of September 30, 2019.
TSE Admits Remote Trading Participant from Hong Kong
Tokyo Stock Exchange will welcome Citadel Securities (Hong Kong) Limited as its remote trading participant* on October 7, 2019. With the admission of the participant, the number of general trading participants will be 89.
TMX Group Limited announces release date for Q3 2019 financial results and analyst conference call
TMX Group Limited will announce its financial results for the third quarter ended September 30, 2019 in the evening of Thursday, November 7, 2019. An analyst conference call to review the results will be held at 8:00 a.m. EST on Friday, November 8, 2019.
Eurex further on the way up: September figures overall satisfying
Eurex, Europe’s largest derivatives exchange and part of Deutsche Börse Group, could enjoy a special highlight with a monthly record in September in Total Return Futures on EURO STOXX® 50 with 433,238 traded contracts.
BSE, NSE shut today on account of Mahatma Gandhi Jayanti; The trading activity will begin on Thursday, October 3, which makes it a truncated week.
BSE Limited and the National Stock Exchange of India are closed for trading on Wednesday, October 2, 2019, on account of Mahatma Gandhi Jayanti. Wholesale commodity markets, including metal and bullion, will also be closed. There will be no trading activity on forex and commodity futures markets as well.
Swiss SIX exchange lists bitcoin and ether exchange-traded product
The Block Crypto
An exchange-traded product (ETP) with a combination of bitcoin (BTC) and ether (ETH) is going live tomorrow on Switzerland’s primary stock exchange SIX.
MGEX Announces The Board Of Directors Election Results
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announced the results of its annual Board of Directors (Board) election, held on October 3, 2019. Re-elected to the Board were Albert Cyrlin and Murray Stahl. Newly elected to the Board was Thomas P. Gallagher. All were elected to serve two-year terms.
big xyt unveils new data platform for fragmented equity market; Fidessa’s former group strategy director, Steve Grob, will work with big xyt on the equity market data platform.
Hayley McDowell – The Trade
Market data analytics provider big xyt has launched a new platform for an aggregated overview of fragmented European equity market information.
Symphony Pivots to Market Solutions and Workflows as Part of Rebrand; It also unveiled new applications and features for the platform during its annual Innovate conference.
Emilia David, Rebecca Natale
Symphony Communication Services has unveiled a rebrand of its messaging and collaboration platform, dubbed Symphony 2.0, which the company hopes will reposition it as an end-to-end market automation and workflow platform.
PayPal on the verge of quitting Facebook’s Libra project; Payments company did not attend meeting for participants in mooted digital currency
Hannah Murphy and Kiran Stacey – FT
PayPal is on the verge of quitting Facebook’s Libra project after having pulled out of a key meeting in Washington on Thursday.
Coinbase Reinstates UK Bank Deposits and Withdrawals
William Foxley- Coindesk
Coinbase has reinstated U.K. bank deposits and withdrawals following a months-long banking holdup.
Apple has no plans to launch cryptocurrency, says CEO Tim Cook
The Block Crypto
Tim Cook, the chief executive officer of tech giant Apple, has said that the company is not intending to launch its own cryptocurrency.
Bitcoin Gains Correlate With Tether Issuance, Researcher Says
Olga Kharif – Bloomberg
TokenAnalyst finds prices rise as much as 70% of the time; Correlation depends on which blockchain the tokens are minted
It’s becoming a little clearer just how much the stablecoin Tether contributed to the rally that saw Bitcoin more than double in value this year.
Two Congressmen encourage the Federal Reserve to develop a digital US dollar
The Block Crypto
Two U.S. lawmakers, Representative French Hill (R-Arkansas) and Rep. Bill Foster (D-Illinois), have asked the Federal Reserve, the country’s central bank, to consider developing a digital dollar.
A look at BitMEX futures volume
Matthew Yamamoto – The Block Crypto
Although Bakkt launched its bitcoin derivatives trading platform last week, its current volume falls well below its competitors. BitMEX has been the market leader with reported futures volume generally averaging well above $2 billion per day.
A new bitcoin futures fund has been filed with SEC
The Block Crypto
Asset management firm Stone Ridge has filed a prospectus with the U.S. Securities and Exchange Commission (SEC) for a new bitcoin futures fund. Dubbed “NYDIG Bitcoin Strategy Fund,” the fund aims to achieve capital appreciation by investing in bitcoin futures contracts, according to the prospectus filed Wednesday.
Vanguard begins testing blockchain technology for FX trading
The Block Crypto
Mutual fund giant Vanguard Group is testing a new peer-to-peer foreign exchange (FX) trading platform for assets managers through a partnership with Symbiont, a blockchain technology provider, according to a Bloomberg report.
ASC issues emergency cease-desist order for cryptocurrency exchange
Donna Thornton – Gadsen Times
The Alabama Securities Commission issued an emergency cease and desist order against a binary option and cryptocurrency exchange selling illegal investment contracts in binary options, Forex and cryptocurrency trades to Alabama residents.ASC Director Joseph P. Borg said the commission took this action in the public interest to protect Alabama investors. The suspected business Fxcryptofair and the account manager going by the name Barbara Lawson have been ordered to immediately cease and desist from sales of any securities in Alabama.
Andreessen Horowitz launches crypto startup school
The Block Crypto
Venture capital firm Andreessen Horowitz has announced the launch of a startup school for entrepreneurs looking to develop cryptocurrency projects.
US House Committee Pressuring Zuckerberg to Testify on Libra: Report
William Foxley – Coindesk
Facebook CEO Mark Zuckerberg is facing pressure to testify before U.S. lawmakers on the firm’s cryptocurrency project Libra.
Trading Bitcoin may soon be classed as gambling
Rajan Dhall – FX Street
According to an article by the Economist, the Financial Conduct Authority may be looking into regulating the Bitcoin trading market as gambling. “Now the Financial Conduct Authority (FCA), a British watchdog, is proposing a blanket ban on selling crypto-derivatives to retail investors. A consultation ended on October 3rd. Its decision is expected in early 2020.” (The Economist) Interestingly, the Economist says that unlike traditional currencies cryptocurrencies are not legally treated as money as they have no store of value. So when trading crypto derivative you cannot claim they are for hedging purposes like you can with FX forwards, futures and options.
An Early Bitcoin Millionaire Loses ‘Love for the Industry’
Olga Kharif – Bloomberg
Jered Kenna has rebuilt his life outside of crypto, in beer; ‘Now the only thing people focus on is making money,’ he says
As Bitcoin crashed 20% in late September, Jered Kenna — one of the first Bitcoin millionaires — returned to Twitter after a three-year hiatus with a startling statement, saying he “lost the love for the industry.”
Treasury Officials Pressured I.R.S. on Trump Tax Audit, Whistle-Blower Alleges
Alan Rappeport – NY Times
An Internal Revenue Service whistle-blower filed a complaint alleging that senior Treasury officials tried to exert influence over the mandatory audit of President Trump’s tax returns, according to a person familiar with the matter.
President Warren would not destroy American business; Democratic contender has prompted consternation in the corporate world
Tom Braithwaite – FT
You would think Marx was moving into the White House. Elizabeth Warren’s rise to the top of the Democratic contenders for the US presidency has caused consternation in the business world.
Trump suggests his administration look at starting its own news network
Aris Folley – The Hill
President Trump suggested his administration look at starting its own news network while railing against CNN and the rest of the news media during a speech in Florida on Thursday.
Cheesed-off European dairy producers dismayed at U.S. tariffs
Andrea Ciociola, Gus Trompiz – Reuters
European cheese makers complained on Thursday of being held “hostage” in a transatlantic trade battle that had nothing to do with them after the United States slapped 25% tariffs on the sector in retaliation for state aid to aerospace group Airbus.
Trump Publicly Urges China to Investigate the Bidens
Peter Baker and Eileen Sullivan – The New York Times
President Trump, already facing impeachment for pressuring Ukraine to investigate his political rivals, publicly called on China on Thursday to examine former Vice President Joseph R. Biden Jr. as well, an extraordinary request for help from a foreign power that could benefit him in next year’s election.
EU Pledges Restraint as U.S. Moves to Add Tariffs
Emre Peker – WSJ
The European Union signaled it wouldn’t immediately retaliate against new U.S. tariffs, seeking to avoid a broader trade war as Washington moves to punish the bloc over Airbus SE subsidies the World Trade Organization ruled illegal. U.S. Trade Representative Robert Lighthizer on Wednesday said Washington would impose levies starting Oct. 18 on $7.5 billion of European goods—including commercial jetliners, Irish and Scotch whiskies, cheeses and hand tools—tapping the WTO’s biggest-ever arbitration award.
Opening Statement of Chairman Heath P. Tarbert Before the Technology Advisory Committee Meeting
Good morning, and thank you all for being here. I would especially like to thank Commissioner Quintenz and his staff for convening this meeting of the Technology Advisory Committee (TAC). My thanks also to Meghan Tente [TEN-tay], the Designated Federal Officer for the TAC, for organizing the meeting. And of course, thank you to the TAC members for traveling from near and far and taking the time to share your valuable perspectives.
FCA sets out potential remedies to tackle concerns about general insurance pricing
The FCA has today published the interim report of its market study into the pricing of home and motor insurance. The FCA found that competition is not working well for all consumers in these markets. It sets out concerns about how pricing in these markets leads to consumers who do not switch or negotiate with their provider paying high prices for their insurance.
Opening Statement of Commissioner Dan M. Berkovitz Before the CFTC Technology Advisory Committee Meeting
Today the TAC will address a number of advanced issues regarding cryptocurrencies, distributed ledger and cybersecurity. I look forward to hearing from the panels on these important topics.
Statement of Commissioner Dawn D. Stump Regarding the CFTC Technology Advisory Committee Meeting
Thank you Commissioner Quintenz for convening today’s meeting of the Technology Advisory Committee (TAC). I also want to extend my appreciation to the Committee members and presenters for their participation and engagement.
Opening Statement of Commissioner Brian Quintenz Before the CFTC Technology Advisory Committee
Good morning and welcome to our fourth meeting of the Technology Advisory Committee (TAC or Committee). Before we begin, I would like extend a warm welcome to Chairman Tarbert. This is Chairman Tarbert’s first TAC meeting at the Commission and I hope he finds them as informative and engaging as I have. I would also like to take a moment to recognize Meghan Tente, the Committee’s new Designated Federal Officer. Thank you, Meghan, for seamlessly assuming the leadership role for the Committee and for working so diligently to ensure today goes off without a hitch.
Registration Open for CFTC’s Second Annual Fintech Forward Conference
Fintech Forward 2019 to Focus on “Exploring the Unwritten Future”
The U.S. Commodity Futures Trading Commission today announced that registration has opened for the agency’s second annual Fintech Forward Conference and that this year’s theme will be “Exploring the Unwritten Future.” The conference will take place on October 24, 2019 at the CFTC’s Washington, DC headquarters.
September 2019 Board Update
FINRA CEO Robert Cook and members of the FINRA Board of Governors provide updates from the September 2019 FINRA Board of Governors meeting.
ESMA Consults on the Commercial Terms for Providing Client Clearing Services Under EMIR
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published a consultation paper (CP) on draft technical advice to the European Commission (EC) on specifying the conditions under which commercial terms are to be considered fair, reasonable, non-discriminatory and transparent (FRANDT) where clearing service providers offer clearing services to clients.
Steven Maijoor delivers keynote speech at AFME’s Legal and Compliance Conference
Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA), has delivered the keynote speech at today’s session of AFME’s Legal and Compliance Conference in Paris.
ASIC warns AFS licensees to meet financial reporting obligations on time
ASIC is reminding all Australian Financial Services (AFS) licensees to lodge their annual financial statements and auditor reports by the due date as required under the Corporations Act 2001.
Canadian Securities Regulators Implement Investor Protection Reforms, Strengthening The Client-Registrant Relationship Across Canada
The Canadian Securities Administrators (CSA) today published rule amendments to implement the Client Focused Reforms (the reforms) across Canada. These reforms are based on the fundamental concept that clients’ interests come first in their dealings with firms and individuals that are registered to give investment advice and trade in securities (registrants).
Canadian Securities Regulators Propose Changes To Auditor Oversight Rules
The Canadian Securities Administrators (CSA) today published for comment proposed amendments to National Instrument 52-108 Auditor Oversight (The Notice) intended to provide the Canadian Public Accountability Board (CPAB) with improved ability to perform audit inspections. Under the proposed changes, some reporting issuers and audit firms may be required to take steps to provide CPAB with enhanced access to audit working papers, particularly in foreign jurisdictions.
U.S. Attorney General William P. Barr Delivers Remarks At The U.S. Securities And Exchange Commission’s Criminal Coordination Conference, Washington, DC
Good afternoon. I appreciate the kind introduction. Thank you to Chairman Clayton and the Commission for extending the invitation to speak at today’s conference. I would also like to thank the SEC’s Co-Directors of Enforcement, Steven Peikin and Stephanie Avakian, for putting this conference together.
Investing and Trading
Bond Markets’ Tea Leaves Send Sobering Signal: Trouble Is Ahead
Liz McCormick and John Ainger – Bloomberg
U.S. services, manufacturing data give recession warning; It’s a ‘massive move’ into deepest, most liquid debt markets
The world’s biggest government-debt markets are sending a clear signal that global economic growth is stalling and inflation expectations are fading fast.
“STOP THE STEALIN” – Cattlemen Rally for Fair Market in Omaha
Organizers sought to capture some of the same fire they held in 1994 when a large packer at the time stopped buying cash cattle for several weeks, crashing the live cattle markets and sparking a similar rally at the same Omaha hotel. “We did raise some hell back in ’94,” said Mike Callicrate, a Kansas cattle producer and advocate for independent cattle producers. “We didn’t have any competition then for fat cattle, and we don’t have any competition now for fat cattle.”
The Stock Market Can Be a Humbling Place; A week of disappointments leads market commentary. Plus, smart-money signals, a default jaw-dropper and more.
Robert Burgess – Bloomberg
It was only last week that the S&P 500 Index was near its highest levels since July after recovering from its August sell-off. The thinking was that better-than-forecast data on housing, factory orders and industrial production meant talk of a looming recession was overdone. This week showed that those signs of resilience may have been little more than a mirage.
WeWork seen as startup lesson in what not to do in Silicon Valley
Jane Lanhee Lee – Reuters
The implosion of office space company WeWork this week is being digested as a lesson for Silicon Valley startups – in what not to do.
How hedge funds are thriving in a world of negative-yielding debt; The unnerving world of sub-zero rates still offers managers ways to eke out gains
Laurence Fletcher – FT
This article was originally published as part of the ‘Negative Yields’ series on 15 August 2019. The growing pool of negative-yielding debt makes this a hostile environment for most bond investors. Yet some hedge funds have still managed to find ways to turn a profit from the advent of sub-zero rates.
Lazard axes 7% of jobs from asset management unit; New York-based fund house pulls back from a range of subscale funds
Peter Smith – FT
Lazard Asset Management, the New York-based fund house with assets of $214bn, has axed more than 60 staff as it withdraws from a range of subscale funds that have failed to win investor support.
Former Goldman Sachs vice-chair joins Ken Griffin’s Citadel fund
Robert Armstrong and Lindsay Fortado – FT
Pablo Salame, a former Goldman Sachs vice-chairman and co-head of securities, will join Citadel, the $32bn hedge fund run by Chicago billionaire Ken Griffin, as its head of global credit.
TradeStation Unlocks Commission-Free Stock, Options & ETF Trading for Customers; Commission-free trading underscores TradeStation’s commitment to breaking down barriers to enter the markets
TradeStation Group, Inc.
TradeStation Securities, Inc., the award-winning* online broker-dealer and FCM operating subsidiary of TradeStation Group, Inc., is excited to announce it will now be offering commission-free trading to customers who use its web and mobile platforms for exchange-listed stocks, options and exchange-traded funds (ETFs). Customers trading options will continue to pay $0.50 per contract without a commission charge. This new commission-free offering on the TradeStation web and mobile platforms is branded TSgo.
Goldman Faces $260 Million Hit From Equity Bets as Uber Plunges
Sridhar Natarajan – Bloomberg
Four stocks that boosted second-quarter results saw turnaround; Firm’s investments can offer big gains as well as volatility
Goldman Sachs Group Inc.’s bets on four companies delighted investors a quarter ago. This time around, they’re inflicting about $260 million of pain.
Fall of China’s biggest rubber trader unsettles global market; Chongqing General Trading Chemical said to have misjudged bets in international trade
Sun Yu in Beijing – FT
China’s largest trader of rubber has ceased operations after failing to honour contracts with its local and foreign business partners, unsettling the global market for the commodity.
Iran’s stock market outstrips global rivals; Tehran bourse is best performer over 12 months as savers seek refuge from inflation
Najmeh Bozorgmehr – FT
The stock market of Iran, for a long time dogged by US sanctions, has notched up a notable achievement: ranking among the world’s best performing over the past 12 months, as domestic investors seek refuge from rampant inflation.
BlueCrest’s emerging market traders decamp to Geneva; Moves led by department head have echoes of post-crisis exodus to Switzerland
Laurence Fletcher – FT
A team of fund managers at BlueCrest Capital, the publicity-shy investment firm headed by billionaire trader Mike Platt, is relocating to Switzerland, a rare move in an industry that a decade ago saw an exodus of traders to the lower-tax centre.
China launches world’s first stainless steel futures
China on Wednesday started the trading of yuan-denominated stainless steel futures, the first of its kind worldwide targeting the material widely used in transportation, environmental protection and medical industries.
Boris Johnson: Brexit plan ‘genuine attempt to bridge chasm’
Prime Minister Boris Johnson has said he has made a “genuine attempt to bridge the chasm” in order to get a fresh Brexit deal with the EU. He told MPs his plan – which would see Northern Ireland stay in the European single market for goods but leave the customs union – were a “compromise”. But Jeremy Corbyn criticised the “unrealistic and damaging proposals”. Irish PM Leo Varadkar said the new plans were welcome, but “fall short in a number of aspects”.
Why a hard Brexit is a threat to the euro as well as sterling; Taking out some kind of insurance for single currency assets looks a smart course of action
Katie Martin – FT
With the UK’s messy divorce from the EU clattering towards its conclusion, signs of complacency are popping up in the currency markets. The exchange rate is relatively tranquil. Options markets are showing few signs of concern. If Brexit goes badly, the currency could take a beating. But the currency in question is not the pound — it’s the euro.
Gibraltar Thrown Into Disarray Before Brexit
Charles Penty -Bloomberg
British territory faces possible shortages of goods, medicines; Gibraltar heavily dependent on Spanish workers crossing border
When Fabian Picardo became chief minister of Gibraltar — the rocky relic of British colonialism at the tip of Spain — he could scarcely have imagined that his main concern one day would be keeping shelves stocked at the local supermarkets.
Boris Johnson Gets One Week to Improve His Brexit Offer or Face Delay
Ian Wishart – Bloomberg
Intense talks resume as prime minister told to soften position; Conservative MPs give leader boost by uniting around plan
Prime Minister Boris Johnson and the European Union have given themselves a week to agree on a Brexit plan. Otherwise, the U.K. will be heading for either a no-deal exit or another humiliating postponement of its departure from the EU.
Boris Johnson Is Stymied, but So Are His Opponents
John O’Sullivan – The New York Times
After delivering a Tory conference speech that knocked off the nation’s socks yesterday and presenting a new U.K. – EU Brexit deal today that might conceivably be endorsed by Parliament, Boris Johnson should perhaps be enjoying a good press. But the message of most media commentary is that Boris is stymied yet again, or still, or maybe forever — the Prisoner of Downing Street kept confined by a slim majority of MPs united on nothing except their opposition to him, to Brexit, and to holding a new election.