CFTC chair complains to European Commission over regulation jibe

Jun 20, 2019

First Read

Hits & Takes
JLN Staff

The WILD 10-year anniversary video (see below) was a great discussion between WILD President Cathey Curley and Vice President Katie Cleland. JLN is proud to have been a part of the WILD success.~JJL

The 2019 Managed Futures Pinnacle Awards dinner was held last night, sponsored by CME Group and BarclayHedge.

At some juncture in the last week or so, CME Group and BarclayHedge pulled a fast one and swapped the host-and-entertainment for last night’s Managed Futures Pinnacle Awards. It was initially going to be Wanda Sykes, but was changed late in the game to Jeff Garlin.

Fortunately, Garlin turned out to be very funny, the kind of natural comedian who doesn’t need much prepared material and can make things up as he goes along. He made much of the fame of Sol Waksman, president of Backstop BarclayHedge, and he said he sincerely found the managed futures folks to be great people. “Really,” he said, “I thought you would all be jerks.”

The winner of this year’s Pinnacle Achievement Award was Martin Lueck, who is known for his 30 years of work on quantitative trading strategies and is co-founder and research director of Aspect Capital, a $7.3 billion systematic investment manager.

The winner of the best large cap CTA category was Bridgewater Associates; the 5-year best large cap CTA was IPM Informed Portfolio Management.

You can find more information about the award winners, as well as videos about their achievements, here. ~SR and ~SD

As of Tuesday, “the declaration of Force Majeure invoked on May 2, 2019, is no longer in effect” for corn and soybean shipping stations along the Illinois and Mississippi River.~SD

The Streetwise Professor has weighed in on the Facebook Libra with a commentary titled “Can You Spare Me a Zuck Buck? Spare me..~JJL

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Spencer Doar with one of the Pinnacle Awards from the dinner last night. He did not win the award, but it was delightfully heavy and we all enjoyed holding it.

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WILD Celebrates 10 Years of Networking, Education, and More

JohnLothianNews.com

Women In Listed Derivatives (WILD) is celebrating its 10 year anniversary in 2019. In this video, WILD President Cathey Curley and Vice President Katie Cleland spoke with JLN about how WILD started as a networking group and how it has evolved over the years to offer more technology-specific and regulation-focused events, as well as other opportunities for women in the financial industry.

Watch the video »

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Accusing the New York Times of ‘Treason,’ Trump Crosses a Line; The Founders considered it the gravest of crimes. Tossing the charge around is irresponsible and wrong.
A.G. Sulzberger, NY Times for The Wall Street Journal
First it was “the failing New York Times.” Then “fake news.” Then “enemy of the people.” President Trump’s escalating attacks on the New York Times have paralleled his broader barrage on American media. He’s gone from misrepresenting our business, to assaulting our integrity, to demonizing our journalists with a phrase that’s been used by generations of demagogues.
/on.wsj.com/2IUB49D

*****The only industry or occupation expressly protected in the U.S. Constitution is the press. The one person making this accusation is sworn to support and defend the Constitution and clearly does not understand. I am very tired of being called an enemy of the people.~JJL

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Americans are giving less to charity after stock-market volatility and tax-law changes
Leslie Albrecht – MarketWatch
After a record-breaking 2017, charitable giving by individual Americans fell last year in response to a volatile stock market and the new tax law. Charities raked in $427.71 billion overall in 2018, an increase in total dollars from the previous year. But when adjusted for inflation, the figure represented a 1.7% decline in overall giving, according to Giving USA, an annual report on philanthropy released Tuesday.
/on.mktw.net/2IUqRKf

****** As the former treasurer of my church and on the Board of Deacons I can tell you first hand we saw this in action as did other not-for-profit organizations we know.~JJL

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The Case for Thought Leadership as a PR Strategy
Brenna Lemieux – Propllr
Is there something most people don’t understand about your industry that you wish they did? Do you have an excellent way to explain it to them? Do you sometimes find yourself muttering, “I oughtta charge for these ideas”? If so, thought leadership-driven PR might be right for you. Done right, thought leadership can power engagement with your current customers, raise brand awareness among potential customers, and fuel media coverage of your company. Here’s a look at how and why to consider thought leadership-driven PR.
bit.ly/2IP7bHC

***** JLN is happy to publish thought leadership pieces. Contact us.~JJL

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Wednesday’s Top Three
You always wanted to know who was in the principal’s office, didn’t you? I sure did. And that urge never stops, especially when it is Cboe’s disciplinary actions, our top read item of the day on Wednesday. Yes there are firms and yes there are names named. Second was the Bloomberg piece about the Twitter piece by a hedge fund manager in Drew Dickson Says Colts Kenny Moore Saved His Son’s Life. To read this unbelievably touching and heartfelt post by Dickson, you can go HERE. Third was Bloomberg’s piece Facebook Cryptocurrency Plan Faces Opposition in France

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CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

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Lead Stories

CFTC chair complains to European Commission over regulation jibe; Christopher Giancarlo writes to Valdis Dombrovskis over official’s ‘you fell for it’ speech
Philip Stafford and Jim Brunsden – FT
A top US financial regulator has taken an unusual swipe at his EU counterparts in a deepening row over how to supervise international trading.
/on.ft.com/2J1S3qO

Wall Street Sees Big Promise in Facebook Coin, With a Lot of Ifs
Felice Maranz – Bloomberg
Analysts say Libra has the potential to be very disruptive; But they’re dismissing any quick impact, flagging obstacles
Facebook Inc.’s bid to create a new cryptocurrency has the potential to some day disrupt the global money system, analysts say. That’s if the new stablecoin, called Libra, can gain enough traction. In the meantime, they say, the plan probably means little for existing payments companies, like Mastercard Inc., Visa Inc. and PayPal Holdings Inc. — which are all partners with Facebook.
/bloom.bg/2IWHkO6

The City faces an ‘existential skills crisis’, says chancellor’s taskforce; With graduate recruitment falling and current staff left behind on new tech, a government taskforce says the City needs to up its game
Emily Horton – Financial News
The UK chancellor’s Financial Services Skills Taskforce has warned the Square Mile is facing an “existential skills crisis”, with the sector struggling to attract graduates and current staff threatened by rapidly evolving technology.
bit.ly/2J0dYP7

Hedge funds are struggling to find a role; Trials facing John Paulson are symbolic of the whole industry
The editorial board – FT
Hedge funds are under pressure. John Paulson, the fund manager made famous by his lucrative crisis-era bets against US mortgages is closing his London office and considering taking his fund private. The moves, by one of the most visible figures in the industry, is a symbol of the troubles facing a model that can thrive when others fail but has struggled to find a role in the decade of cheap money since the crash.
/on.ft.com/2IVkhn0

What Does It Take for a New Hedge Fund to Make It? $250 Million
Hema Parmar and Katia Porzecanski – Bloomberg
Launches below that level have a 50-50 chance of survival; Goldman report details the tough environment managers face
For a baby sea turtle there’s a 1 in 1,000 chance of making it to adulthood. If you’re starting a hedge fund, the odds may look just as daunting.
/bloom.bg/2IUeii8

China’s small banks turn to exchanges for cash as money markets tighten
Winni Zhou, David Stanway – Reuters
China’s smaller banks and brokers are turning to stock exchanges to borrow short-term cash this week to escape the typical end of June pressure in money markets and more recent worries over credit risks in the sector.
The volume of repurchase agreements on the Shanghai stock exchange, in which banks and other financial firms borrow money from each other using bonds as collateral, surged as borrowers sought an alternative to the over-the-counter interbank money market.
/reut.rs/2Xn0Ix4

****One month repo has nearly doubled in June. WSJ – Warning Lights Are Flashing in China’s Money Market.~SD

Investors get new tools to speed up bond trading
Matt Wirz – Financial News
Electronic bond-trading platforms are racing to expand their offerings as traders demand greater integration of the technology that is transforming how they buy and sell holdings.
Trade-data aggregator Algomi announced Tuesday a feature allowing clients to execute trades directly on platforms Liquidnet and Trumid through its own interface. With the move, Algomi is pushing to be first to market with a bond execution-management system, or EMS, akin to those that have existed for more than a decade in equity markets.
bit.ly/2Xnw3Q1

Don’t let Facebook capture the monetary system; The road to Libra is paved with good intentions
Martin Sandbu – FT
It was only a matter of time before Facebook barged into the payments and money transfer industry. On Tuesday, the tech giant duly published a set of papers on its new venture, a supposedly blockchain-based “cryptocurrency” called Libra.
/on.ft.com/2J1SUI2

One of the Most Powerful Women in Hedge Funds Doesn’t Run Money; Ilana Weinstein, headhunter for top hedge funds, reflects on ‘Billions,’ myths and dearth of women in industry
Rachael Levy – WSJ
In the overwhelmingly male world of hedge funds, Ilana Weinstein is one of the most powerful women. But Ms. Weinstein doesn’t manage money. Instead, she scouts the people who do.
/on.wsj.com/2IUxdJM

Facebook Wants to Know If You’d Trust It With Your Money; The company’s new Libra cryptocurrency unveiled amid privacy concerns and regulatory pressure.
Kurt Wagner – Bloomberg
When Facebook Inc. recently unveiled Libra, its long-awaited cryptocurrency, the company used the announcement as a chance to convey just how much care has gone into the digital asset. David Marcus, the former PayPal Holdings Inc. president who’s the social network’s blockchain boss, said at a June 11 preview held under the vaulted ceilings of the old San Francisco Mint that libra was a unit of measure in ancient Rome and is the astrological symbol for balance and justice. “Freedom, justice, money,” Marcus said. “Basically everything we want this endeavor to become.”
/bloom.bg/2J0ga9d

Women Working Longer Hours, Sleeping Less, as They Juggle Commitments; Labor Department’s annual time use survey highlights the challenges for working women
David Harrison and Soo Oh – WSJ
Working women put in longer hours on the job last year, spent more time caring for their children and did more work around the house.
/on.wsj.com/2IVMcDj

Deutsche Bank faces FBI investigation for possible money-laundering lapses: source
Reuters
The U.S. Federal Bureau of Investigation is examining whether Deutsche Bank complied with laws meant to stop money laundering, a person with knowledge of the matter said on Thursday.
/reut.rs/2IU9REb

Bond Investors Get New Tools to Speed Up Trading; Electronic bond-trading platforms are racing to expand their offerings as traders demand greater integration of the technology that is transforming how they buy and sell holdings
Matt Wirz – WSJ
Electronic bond-trading platforms are racing to expand their offerings as traders demand greater integration of the technology that is transforming how they buy and sell holdings.
/on.wsj.com/2J1XS7E

Worst growth in decade for corporate bond market fuels concern
?India’s bond market remains small compared with other major economies.
Divya Patil – Bloomberg
There’s yet another sign that India’s push to quickly expand its corporate debt market is faltering, as borrowers turn more to banks already struggling with one of the world’s worst bad debt ratios.
bit.ly/2J0dHeX

QuadrigaCX CEO Set Up Fake Crypto Exchange Accounts With Customer Funds
Marc Hochstein, Nikhilesh De – Coindesk
QuadrigaCX’s late founder and CEO used customers’ funds to trade for his own account on other cryptocurrency exchanges, the Canadian firm’s bankruptcy trustee said.
bit.ly/2IWPN3V

A British Fund Star’s Fall Shows the Peril of Illiquid Holdings; The crisis at Woodford Equity Income holds lessons for investors everywhere.
Suzy Waite, Annie Massa – Bloomberg
Neil Woodford is a famous fund manager in the United Kingdom. At a time when individual investors are pouring money into anonymously run index funds, there aren’t many of those left anywhere in the world. He now faces a crisis after he froze investors’ redemptions in his flagship U.K. fund, LF Woodford Equity Income, which has fallen about 22% in the past year. The freeze—a rare step for a fund aimed at ordinary investors—is supposed to buy him time to offload a bunch of “unquoted and less liquid” stocks in the fund’s portfolio, according to his firm’s website.
/bloom.bg/2x53x7l

UBS ‘Chinese Pig’ Apology Doesn’t Fly; At least one Chinese client dropped UBS from a bond deal and traders at some asset managers stopped dealing with the bank
Stella Yifan Xie, Steven Russolillo and Julie Steinberg – WSJ
A week after a UBS economist’s offhand comment about pigs in China morphed into an online scandal, the bank is still feeling the pain in one of its most important markets.
/on.wsj.com/2x5i6rc

Exchanges, OTC and Clearing

Disruption Without Interruption
David Parker, Head of MTS Markets International
Technological advancements are quietly – and sometimes not so quietly – altering the fixed income trading landscape in the US and globally. Trading models that once relied solely on human interaction now contain a heavy electronic element or, in some cases, may run completely on technology. Recent Greenwich Associates data shows that over 90% of corporate bond market trades under US$100,000 are traded electronically. In the market at large, well over 30% of trades are now traded or processed electronically.
bit.ly/2J0jrW9

Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange Closed for Canada Day
TMX
Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange will be closed on Monday, July 1, 2019, for the Canada Day holiday.
bit.ly/2x5QwdK

Fintech

UnaVista welcomes new firms to its partner programme to ease industry SFTR burden
London Stock Exchange Group
UnaVista, part of London Stock Exchange Group, is pleased to announce that 25 Independent Software Vendors (ISVs) within UnaVista’s Partner Programme are now looking to include SFTR services as part of their offering to clients. Partner firms include Calypso Technology, Equilend, IHS Markit, MarketAxess Trax, Message Automation and Murex S.A.S. The Partner Programme has been instrumental in helping reduce the burden of previous reporting obligations, such as MiFID II.
bit.ly/2ZHn6yT

Refinitiv makes strategic investment in BattleFin
Institutional Asset Manager
Refinitiv has made a strategic investment in alternative data platform and marketplace BattleFin forming a partnership which will provide customers with access to alternative datasets across its data platforms, including quantitative data management platform QA Direct in the Cloud.
bit.ly/2Xo8c2K

Sterling Trading Tech Names Erik Schmidt Managing Director of Client Services
BusinessWire
Sterling Trading Tech (STT) is pleased to announce the appointment of Erik Schmidt as Managing Director of Client Services. Erik is an industry veteran with two decades of experience in capital markets. His career began on the trading floors of Chicago, which led him to Europe and Asia where he opened and managed trading offices to run international portfolios.
bit.ly/2XlOvIR

Avelacom Promotes Vincent Harrison To Managing Director, Global Sales Amid Expansion Plans In The Americas
Avelacom
Avelacom, the high-performance connectivity and IT infrastructure solutions provider for the financial services industry, has promoted Vincent Harrison to Managing Director, Global Sales, to drive business growth and further develop Avelacom’s low latency network across the Americas, EMEA and APAC.
bit.ly/2ZyuegD

Equinix expands partnership with IBM Cloud
Maria Nikolova – FinanceFeeds
Global interconnection and data center company Equinix Inc today announced an expanded partnership with IBM Cloud which aims to bring private and scalable connectivity to global enterprises at the digital edge via Equinix Cloud Exchange Fabric (ECX Fabric). This expansion builds upon the long-standing Equinix and IBM relationship where IBM Cloud Direct Link Exchange is deployed in more Equinix International Business Exchange (IBX) data centers worldwide.
bit.ly/2XlOuVh

Slack Wants to Replace Email. Is That What We Want?; As the office chat start-up prepares to go public, some of us are still figuring out how available we want to be — and whether it’s O.K. to ping the C.E.O.
John Herrman – NY Times
Slack is coming for your job. The workplace chat company, valued at more than $7 billion at the time of its last funding round, is going public this week. It claims to already have more than 10 million daily users and, in its listing prospectus, bills itself as the answer to bloated inboxes everywhere.
/nyti.ms/2IVoXt4

Bank investments in technology not yet driving significant revenue growth: Accenture
Anna Irrera – Reuters
The $1 trillion invested by traditional banks globally over the past three years to improve their technology has not yet delivered the revenue growth that had been expected, according to an Accenture report released on Thursday.
/reut.rs/2IXms9t

Slack IPO will be a test case for direct route to market; Initial turbulence likely with no indication of how many sellers there will be
Richard Waters – FT
What happens when unpredictable demand meets equally unpredictable supply? That roughly summed up the state of affairs as enterprise chat app Slack approached its stock market listing on Thursday.
/on.ft.com/2J0eBIn

Exchange Data International (EDI) Appoints Its New Advisory Panel
Mondovisione
EDI in its 25th year has appointed an Advisory Panel to advise it on its next stage in growth. This panel includes three industry experts that will assist EDI in developing its strategies for both acquisition and organic growth. The three members are: Bob Magri, Peter Sluka and Steven Goldstein.
bit.ly/2IUA5Gt

AI: not so benevolent after all
Jemima Kelly
You’ve probably read endless articles about how bitcoin miners consume more energy than [insert a random small country or commodity]. And we’ve written more broadly about the increasingly large carbon footprint the universe of consumer-facing digital services has (or, as Izzy once put it, the “technology world’s dark little energy guzzling secret”).
/on.ft.com/2IXQf1E

5 Steps Financial Leaders Can Take To Cultivate Innovation
Mary Hayes Weier – Forbes
The CFO’s impact on innovation was a strong theme at this year’s Wall Street Journal CFO Network Annual Meeting on June 11 in Washington D.C. Setting the tone was the opening discussion with Sean Boyle, CFO at Amazon Web Services.
bit.ly/2J0cior

Algomi adds Liquidnet and Trumid execution to ALFA platform; Traders can now interact with corporate bond liquidity from Liquidnet and Trumid via the ALFA platform.
Hayley McDowell – The Trad
Algomi has bolstered its ALFA platform to include the option to execute orders with Liquidnet and Trumid in a bid to simplify fixed income trading for institutions.
bit.ly/2x7lD8K

Broadridge Adds New Private Market Data To Its Distribution Insight Platform For Institutional Asset Managers
Mondovisione
Broadridge Financial Solutions, Inc. has entered into an agreement with Preqin, the leading provider of global private market data, to offer clients private assets and flows data for alternative products. The Preqin data comprises intelligence on approximately $10.42 trillion of assets in private equity, venture capital, hedge funds, real estate, infrastructure, private debt and natural resources.
bit.ly/2x7jABu

Cryptocurrencies

Cryptoasset Valuation: Fair Value or Fair Game?
Chris Kentouris – FinOps
Fair value – the term used by accountants to refer to the correct valuation of assets for financial reporting purposes — should not be taken at face value by fund managers or investors when comes to cryptoassets.
bit.ly/2Y1lIGC

Blockchain and Cryptocurrency Could Change Farming Forever; Farmers will soon realize the benefits blockchain technology provides as they grapple with a need for transparency, supply chain supervision, and financing.
Catalin Zorzini – YFS Magazine
Nearly everyone in the developed world has heard or probably read about Bitcoin, the almighty digital currency that has dominated headlines in recent years.
bit.ly/2ITJ4I1

Facebook called before Senate panel over digital currency project
Pete Schroeder – Reuters
Facebook Inc’s plans to create a global cryptocurrency will face scrutiny from the U.S. Senate Banking Committee on July 16, the latest sign that policymakers around the globe are casting a wary eye on the project.
/reut.rs/2J1FkUK

Unpopular Opinions in Crypto
Matt Lucas – Collaborative Fund Blog
The truth of a proposition has nothing to do with its popularity. And vice versa. This is as true in investing as in anything else, and especially important to keep in mind in a nascent area like crypto where there are still far more open questions than answers. We wanted to share some of our reactions, thoughts, and perspectives on the relevance of some recently-expressed “unpopular opinions” (some of which are hopefully not so unpopular anymore) to crypto and investing more broadly.
bit.ly/2XpS4xU

Facebook’s cryptocurrency Libra aims to ‘put the currency back in cryptocurrency’
Daniel Roberts – Yahoo Finance
Libra, the Facebook-supported cryptocurrency coming in 2020, has very ambitious plans and, already, vociferous critics. Facebook on Tuesday announced dual crypto ventures coming in 2020: Libra, a cryptocurrency that will be governed by the Libra Association, an “independent” consortium of 28 “founding members”; and Calibra, a Facebook subsidiary that will offer a digital wallet app for storing and sending Libra.
/yhoo.it/2Fmdge1

Cryptocurrency Startups Are in Limbo as Regulators Grapple With Risks
Dave Michaels and Alexander Osipovich – Wall Street Journal
Dozens of startups that want to make the leap from unregulated cryptocurrency dealer to licensed brokerage are waiting for regulators to open the door to let them proceed. Around 35 to 40 companies involved in digital assets have applied with U.S. securities watchdogs to become brokerages, with many hoping to launch electronic trading platforms, according to the Blockchain Association, an industry group. None of the applications has been approved since regulators stepped up enforcement actions against issuers of cryptocurrencies in early 2018.
/on.wsj.com/2XkQJIF

Facebook discussed the launch of its cryptocurrency with the Fed, Jerome Powell says
Michael Sheetz – CNBC
Facebook announced on Monday that it is leading a group to create Libra, a new digital currency. Federal Reserve Chairman Jerome Powell said Facebook spoke to the central bank about Libra. “There are potential benefits here; there are also potential risks, particularly of a currency that could potentially have large application,” Powell said.
/cnb.cx/2J8dTJh

Regulators Debate Cryptocurrency Legislation Ahead of G20 Summit
Diana Aguilar – Coindesk
Cryptocurrency regulation will take a step forward during the upcoming V20 Summit where country representatives will assess the new course of legal action proposed by the international Financial Action Task Force (FATF). FATF will release proposals on June 21 in hopes of setting new international standards for crypto businesses. Legislators support the summit, which will also bring together national blockchain associations and the world’s leading Virtual Asset Service Providers (VASPs).
/bit.ly/2NddHOb

U.S. video streaming app YouNow files cryptocurrency offering with SEC
Gertrude Chavez-Dreyfuss – Reuters
NEW YORK (Reuters) – U.S. live video streaming company YouNow on Wednesday filed with the Securities and Exchange Commission a public offering circular to distribute its own digital currency called Props. The company said it does not intend to raise funds or sell the tokens at the public offering. It comes after Facebook Inc announced on Tuesday plans to launch its own cryptocurrency called Libra in efforts to expand into global payments and e-commerce. Speculation about Facebook’s proposed token has helped resuscitate a cryptocurrency market in recent weeks that went through a slump last year.
/reut.rs/31LvKya

Tala CEO: How Facebook’s Libra Cryptocurrency Can Help Companies Scale
Lucinda Shen – Fortune
Facebook’s ambitious plan to release its own cryptocurrency dubbed Libra has been met with an avalanche of concern from regulators worldwide. House Financial Services Chairwoman and U.S. Rep. Maxine Waters (D.-Calif.) called for Facebook (FB, -0.58%) to pause work on Project Libra, which is slated for release next year, for further regulatory scrutiny. Markus Ferber, a German member of the European Parliament warned the social media giant could turn into a shadow bank. Bank of England Governor Mark Carney noted that if it takes off, “it will have to be subject to the highest standard of regulation.”
/bit.ly/2WQ6FDg

CME: Open Interest in Bitcoin Futures Contracts Hit All-Time High
Max Boddy – Cointelegraph
The Roybal Bank of Scotland (RBS) has hired a former executive from cryptocurrency finance firm Circle, according to a report by the Financial Times on June 18. Marieke Flament, who formerly worked as the European managing director of Circle, will reportedly join RBS as CEO of Mettle, its digital service for small and medium-sized enterprises (SMEs).
/bit.ly/2WPDwYO

Royal Bank of Scotland Onboards Former Circle Exec to Head Fintech Project
Max Boddy – Cointelegraph
The Roybal Bank of Scotland (RBS) has hired a former executive from cryptocurrency finance firm Circle, according to a report by the Financial Times on June 18. Marieke Flament, who formerly worked as the European managing director of Circle, will reportedly join RBS as CEO of Mettle, its digital service for small and medium-sized enterprises (SMEs). Mettle has reportedly been operational since November 2018, and RBS is aiming to roll out a standalone version of the service in August.
/bit.ly/31KAuUs

Facebook’s crypto presents a massive privacy problem
Matthew De Silva – Quartz
The world is rapidly approaching an inflection point in financial inclusion and privacy. When Facebook announced the Libra, its new cryptocurrency, on June 18, the company said it hoped to bring billions without bank accounts into the digital economy, providing them with basic financial services through their cellphones.
bit.ly/2IUaYDR

Facebook’s Bold Move Spurs D.C. to Confront Its Crypto Dithering
Robert Schmidt and Benjamin Bain – Bloomberg
Libra coin could jumpstart efforts to regulate digital tokens; Lawmakers’ skepticism toward Facebook might trigger action
Facebook Inc.’s decision to create its own digital money – – with the grandiose ambition of establishing an alternative global financial system – – is jumpstarting a long simmering debate in Washington over how to regulate cryptocurrency.
/bloom.bg/2IXREFs

Bitcoin’s Rally Forgets These Asia Crypto Shares
Eric Lam – Bloomberg
This year’s resurgence of Bitcoin and other cryptocurrencies has yet to translate into the same kind of gains for some of Asia’s more prominent crypto-linked stocks.
/bloom.bg/2IUpCe3

PwC launches solution to support audit of cryptocurrency
The Star.com.my
PwC has launched its new software tool to provide audit and other assurance services to clients holding or transacting in cryptocurrency.
bit.ly/2IXhvgT

Four big questions facing Facebook’s Libra coin; Regulators will want answers before currency launches
Caroline Binham – FT
Hours after Facebook revealed its plan to launch a new global digital currency called Libra, regulators, central bankers and politicians were ready with their responses.
/on.ft.com/2IVKxO5

LINE’s Crypto Exchange Could Win Japan License This Month, Report Says
Wolfie Zhao – Coindesk
Japanese messaging giant LINE may soon be able to open a cryptocurrency exchange for users based in the country, according to a report from Bloomberg.
bit.ly/2IVKa69

Politics

Americans Blame Trump for Nation’s Negative Political Discourse
Misyrlena Egkolfopoulou – Bloomberg
80% say ‘heated’ language could lead to violence, survey shows; Half say talking about politics is stressful, frustrating
A large majority of Americans feel the nation’s political discourse has become more negative, as well as less respectful, fact-based and substantive — and they say President Donald Trump is a major reason.
/bloom.bg/2IXjiT9

Trump Believes He Has the Authority to Replace Powell at Fed
Jennifer Jacobs and Saleha Mohsin – Bloomberg
President is not planning to demote Fed chairman, for now; Powell says he will serve his full term despite criticism
President Donald Trump has told confidants as recently as Wednesday that he believes he has the authority to replace Jerome Powell as chairman of the Federal Reserve Board, according to people familiar with the matter.
/bloom.bg/2IXRH46

Fed Signals Law Is on Its Side If Trump Tries to Remove Powell
Saleha Mohsin , Christopher Condon , and Jennifer Jacobs – Bloomberg
Central bank appears to have confidence to ‘plant a flag’; Law says Fed chairman must be removed for cause, not rates
The world’s most powerful central bank is making clear it thinks the law is on its side if President Donald Trump tries to remove Jerome Powell as Federal Reserve chairman.
/bloom.bg/2IUqrn9

Pelosi Says Trump Threatening Fed Chairman Is ‘Very Wrong’
Laura Litvan – Bloomberg
House Speaker Nancy Pelosi defended the independence of the Federal Reserve on Wednesday, following comments from President Donald Trump hinting that Chairman Jerome Powell’s tenure depends on the Fed’s rate decisions.
/bloom.bg/2IUr4gM

Trump Is a Threat to Democracy, House Intelligence Chairman Says
Steven T. Dennis – Bloomberg
Schiff sets out rationale for panel’s continuing investigation; President tweets that the Democrats’ hearings are “rigged’
House Intelligence Chairman Adam Schiff said President Donald Trump’s words and actions encourage “grave” threats to democracy and the 2020 elections, and he said his panel is exploring whether the president’s financial interests compromised his foreign policy.
/bloom.bg/2J9dp5F

Poll: Democratic support for impeachment grows
Quint Forgey – Politico
More than two-thirds of Democratic voters believe Congress should launch impeachment proceedings against President Donald Trump, as support in the party rises for kicking off the process, a POLITICO/Morning Consult poll found.
/politi.co/2J9csdB

The National Debt Is Still a Problem
N. Gregory Mankiw – NY Times
“I’m the king of debt.” So declared Donald Trump while running for president in 2016. Alas, he was not kidding. When President Trump moved into the White House, the government debt held by the public stood at $14.4 trillion. The most recent figure is $16.1 trillion. And under current law, that number will keep rising with no end in sight.
/nyti.ms/2IU9wRV

China’s US Treasury holdings are not a viable trade war weapon
Colby Smith
The pace at which China is selling its holdings of US Treasuries has accelerated dramatically since the beginning of 2018.
/on.ft.com/2x8EkIQ

Regulation

UK government pushed on GAM-Greensill probe
Duncan Mavin – Financial News
The UK government has been asked if it will investigate a fund run jointly by Zurich-based GAM and Greensill, the finance company whose relationship with a GAM portfolio manager was a key focus of an ethics probe last year that left the Swiss fund management firm in turmoil.
bit.ly/2XwjTEV

Brian Bussey, Director of the Division of Clearing and Risk, to Take Early Retirement after 22 Years of Federal Government Service
CFTC
After more than two decades of federal government service, Brian Bussey, 53, the Director of the Division of Clearing and Risk (DCR) at the Commodity Futures Trading Commission (CFTC), is taking early retirement from government service, the agency announced today. His last day as Director will be July 12, 2019; he will continue in federal service until July 29, 2019.
bit.ly/2Y2ZLqW

Big government costs the little guy
Adam Michel – The Hill
Big government is expensive. It is so expensive, in fact, that no matter how much you soak them, even the rich cannot afford it. Progressives in the United States hold out Europe as a model for caring governance. They talk a lot about the benefits of universal health care, subsidized college, mandatory leave, and other “generous” government initiatives. They rarely mention the costs and never discuss who will pay for these proposals.
bit.ly/2J9fmiv

Fraudster’s Infamous East Hampton Hideaway Will Soon Be Listed by DOJ; The Arc House is yet to be priced. The seized property, an architectural outlier in the tony beach community, last sold to Joseph Meli’s wife for $3 million.
Polly Mosendz – Bloomberg
True crime fans with a flair for modern architecture are in luck: the Department of Justice will soon list the Arc House in East Hampton, N.Y.
/bloom.bg/2J0gu7V

Top ECB supervisor unhappy with bankers’ cash bonuses
Reuters
Several euro zone banks are falling short of the European Central Bank’s expectations by paying bonuses in cash, which fosters a short-sighted approach to management, the ECB’s top supervisor Andrea Enria said on Thursday.
/reut.rs/2IUnSSk

Tiger 21 Wealth Management, trading as United Brokers (clone of FCA authorised firm)
UK FCA
Fraudsters are using the details of firms we authorise to try to convince people that they work for a genuine, authorised firm. Find out more about this ‘clone firm’.
bit.ly/2IWsdo0

FCA opens review into handling of Connaught fund collapse; Liquidated in 2012
Mike Sheen – InvestmentWeek
The Financial Conduct Authority (FCA) has opened a review into the regulatory handling of firms involved in the collapse of the Connaught Income fund.
bit.ly/2IUuUq6

Independent reviews of Interest Rate Hedging Products and the Connaught Income Fund Series 1
UK FCA
The FCA has appointed Independent Reviewers for the lessons learned reviews commissioned by the FCA’s Board. One review will cover the redress scheme for Interest Rate Hedging Products and the other will cover the regulation of firms involved with the Connaught Income Fund Series 1.
bit.ly/2ITrbZQ

FXCM Germany (clone of authorised firm)
UK FCA
Fraudsters are using the details of firms we authorise to try to convince people that they work for a genuine, authorised firm. Find out more about this ‘clone firm’.
bit.ly/2J08ALx

Serious Fraud Office arrests fifth man over £236m mini-bond scandal; Paul Careless, founder of Surge, was released on bail and not charged
Caroline Binham – FT
The head of the company that marketed unregulated mini-bonds for a firm at the centre of a £236m scandal has become the fifth man arrested over the matter.
/on.ft.com/2x5yrMF

Governance and Risk Management Forum – Keynote Panel
ASIC
Keynote panel discussion by John Price, Commissioner, Australian Securities and Investments Commission at the Governance and Risk Management Forum, (Melbourne, Australia) 20 June 2019
bit.ly/2x3sH69

SEC Chairman Clayton Announces Events for Main Street Investors in Boston
SEC
Securities and Exchange Commission Chairman Jay Clayton announced today two events for Main Street investors to be held in Boston on Monday, July 8.
bit.ly/2x7FGUw

Investing and Trading

Value of negative yielding debt hits record $12.5tn; Central bank dovishness has sent a jolt through fixed income markets
Robin Wigglesworth – FT
The universe of negative-yielding bonds has jumped to a new record of $12.5tn, after the European Central Bank poured more fuel on the global fixed income rally by hinting that it could restart its “quantitative easing” programme.
/on.ft.com/2IRbh28

Powell Is No Longer Failing to Communicate; A welcome message from the Fed leads market commentary. Plus, tumbling Treasury yields, Iceland on ice and more.
Robert Burgess – Bloomberg
The consensus in the markets going into Wednesday was that Federal Reserve Chairman Jerome Powell was in a no-win situation. Stocks had already rallied hard – including a 6% gain in the S&P 500 Index this month alone – in anticipation that the central bank would signal its willingness to cut interest rates as soon as July. In essence, everything was priced in and there was nothing Powell could say to spur stocks even higher, so expectations were for a “buy on the rumor, sell on the news” type of event.
/bloom.bg/2IRaOwU

Bond Market Screams at Fed: Don’t Dawdle on Those Rate Cuts
Liz McCormick – Bloomberg
It looks like the U.S. Treasury market just goaded the Federal Reserve into shifting gears on interest rates, to consider the first reduction in more than a decade. Now, the world’s biggest bond market has further marching orders for Chairman Jerome Powell and his colleagues at the central bank: Don’t dawdle on those cuts.
/bloom.bg/2J09Z4L

Institutions

Citigroup cuts list of FX trading partners after $180m scare
Samuel Agini – Financial News
Citigroup has cut the number of proprietary trading companies that it deals with in the vast foreign exchange markets, having been exposed to $180m in losses from a client’s risky bets last year.
The US investment bank has called time on relationships with a number of trading partners following a review of its foreign exchange prime brokerage business, according to people familiar with the matter.
bit.ly/2MYdb6s

Bank of America CEO: ‘We want a cashless society’
Javier E. David – Yahoo Finance
Bank of America (BAC) CEO Brian Moynihan embraced the digital money movement on Wednesday, saying his firm has “more to gain than anybody” from the booming trend of non-cash transactions.
/yhoo.it/2IP4xBG

Banks to Fight Over $18 Trillion Held By the Poorest of the Rich
Patrick Winters – Bloomberg
Fortunes of $1 million and less in wealth managers’ sights; Regulations, scandals impacting returns from offshore wealth
People with assets of $250,000 to $1 million are set to become a new battleground for the world’s financial firms as declining margins push them to seek out pockets of wealth further down the scale.
/bloom.bg/2IUa3TK

Priciest active investment funds perform worst, study finds; Research group accuses expensive managers of exploiting retail investors
Siobhan Riding – FT
Funds with large price tags tend to perform worse net of fees than cheaper alternatives, according to new research that challenges the argument that active management is worth paying a premium for.
/on.ft.com/2IP30LW

Hargreaves Lansdown chief ‘angered’ by Woodford affair; Chris Hill ‘putting pressure’ on fund manager to pay back customers
Kate Beioley – FT
Hargreaves Lansdown’s chief executive has told customers he is “angered by the lack of resolution” over the meltdown of investor Neil Woodford’s flagship fund and said the company was “putting pressure” on the manager to find ways to pay back customers.
/on.ft.com/2IZymzC

Falling down: hedge fund Lansdowne suffers string of bad bets; Flagship fund of one of Europe’s biggest managers has lost money over the past 3 years
Laurence Fletcher – FT
At the end of 2004 equity analyst George Michelakis left Lansdowne Partners, once viewed as the gold standard of equity hedge funds, to set up shop on his own.
/on.ft.com/2J1DhA2

Deutsche Bank Is Investigated by U.S. Over Money Laundering: NYT
Dale Crofts – Bloomberg
Deutsche Bank AG is being investigated by U.S. federal authorities for potential lapses in money laundering compliance, the New York Times reported, citing unidentified people with knowledge of the inquiry.
/bloom.bg/2IY5PKJ

Hedge fund manager Paulson pulls out of London; Investor made famous by ‘The Big Short’ scales back after crisis-era glow fades
Robert Smith and Lindsay Fortado- FT
Hedge fund manager John Paulson, who made billions of dollars on bets against the US housing market in the run-up to the financial crisis, is closing what remains of his London operations as he prepares to stop managing money for external clients.
/on.ft.com/2IVKodv

Regions

Bank of Japan joins Fed in signaling easing if needed, keeps policy steady for now
Leika Kihara, Daniel Leussink -Reuters
The Bank of Japan kept monetary policy steady on Thursday but Governor Haruhiko Kuroda signaled readiness to ramp up stimulus as global risks cloud the economic outlook, joining U.S. and European central banks in dropping hints of additional easing.
/reut.rs/2IWsIhS

Half of Americans Are Now Over the Age of 38
Alexandre Tanzi and Shelly Hagan – Bloomberg
The graying of America continues. The national median age rose to 38.2 years last year, according to newly released data from the U.S. Census Bureau. That suggests half of the U.S. population is more than 38-years-old and half is younger. By gender, the median for woman is 39.5 while for men its 36.9 years.
/bloom.bg/2IR9PwI

Investors Flock to World’s Happiest Nation in Search of Deals
Kati Pohjanpalo – Bloomberg
The value of deals targeting Finnish companies rises 400%; M&A interest in Finland is set to continue, Nordea Bank says
Investors are discovering that there’s good business to be done in the world’s happiest nation.
/bloom.bg/2IY7bVP

Growth in Global Financial Wealth Screeched to a Halt in 2018
Suzanne Woolley – Bloomberg
Personal wealth grew at slowest rate in five years, BCG says; Africa, Asia fared the best, while North America trailed
Gains in global personal wealth ground to a near-halt in 2018, rising just 1.6% for the weakest growth in five years.
/bloom.bg/2J1TkhA

Beware of Tremors in China’s Commercial Property Market
Mike Bird – WSJ
Things are getting worse in the Chinese commercial property market. Given the fragility of China’s opaque financial system, investors would be wise to keep an eye on the situation.
/on.wsj.com/2J1ST6W

China banks face liquidity squeeze in wake of Baoshang takeover; Government intervention disrupts larger institutions’ willingness to lend to smaller ones
Don Weinland – FT
Banks in China are facing a pinch on liquidity following the government takeover of a commercial bank that is resetting the rules for trading in the country’s interbank market.
/on.ft.com/2IUzqEZ

Proposed emerging market bond index revamp splits opinion; Korea, Singapore, Israel and Taiwan could be stripped from corporate bond flagship
Steve Johnson – FT
JPMorgan has proposed stripping a swath of middle-income Asian countries from its influential emerging market corporate bond indices in a move that could raise returns for investors but increase risk.
/on.ft.com/2IWQydh

Why Irish Bankers May Be Losing the Battle to Get Bonuses Back
Dara Doyle – Bloomberg
Government considers lifting post-crisis pay restrictions; For minority administration, issue remains politically toxic
For high-flying Irish bankers hoping to get bonuses again, the mood music is increasingly grim.
/bloom.bg/2x5ggqi

Australia’s Central Bank Chief Isn’t Friending Facebook’s Cryptocurrency Just Yet
Chris Bourke – Bloomberg
Australia’s central bank chief has a message for those waiting to use Facebook Inc.’s proposed cryptocurrency: don’t hold your breath.
/bloom.bg/2x541KH

Brexit

When Boris Johnson Talks Brexit, MPs Hear What They Want to Hear
Kitty Donaldson and Robert Hutton – Bloomberg
Johnson’s campaign is focused on private meetings with MPs; He has won support from pro-EU and hardline Brexit factions
Boris Johnson is fighting his campaign to become U.K. prime minister largely behind closed doors, wooing as many 16 Conservative members of Parliament a day in a borrowed office. As supporters emerge from their private chats, each has a different account of what the front-runner says.
/bloom.bg/2x7IssR

Scotland: Brexit uncertainty revives independence debate; The prospect of leaving the EU without a deal has put the nation’s future back on the agenda
Mure Dickie in Gretna – FT
On a rainy summer afternoon there is a melancholy air to the Auld Acquaintance Cairn, a monument to the three-century old union of England and Scotland tucked away in a field behind a pub on the border between the two nations. The cairn, an orderly mound of rocks with a central open chamber of local stone, was built in the run-up to the 2014 Scottish independence referendum.
/on.ft.com/2x8D4pa

Miscellaneous

New Study Links Toxic Sept. 11 Dust to Prostate Cancer; Research finds exposure to toxins at World Trade Center site may have increased an inflammatory T-cell
Melanie Grayce West – WSJ
Physicians and researchers have long known that men exposed to toxic dust after the collapse of the World Trade Center on Sept. 11, 2001, may have an increased risk of developing prostate cancer. The challenge has been to provide a link between exposure and the cancer.
/on.wsj.com/2J9bPRh

Latest Suicide Data Show the Depth of U.S. Mental Health Crisis; While material well-being has improved, America’s emotional distress has climbed to crisis levels.
Cynthia Coons – Bloomberg
So many statistics say that life in the U.S. is getting better. Unemployment is at the lowest level since 1969. Violent crime has fallen sharply since the 1990s—cities such as New York are safer than they’ve ever been. And Americans lived nine years longer, on average, in 2017 than they did in 1960. It would make sense that the psychic well-being of the nation would improve along with measures like that.
/bloom.bg/2x5ygkt

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