Charles Schwab to Buy TD Ameritrade for $26 Billion, Reports Say

Nov 21, 2019

First Read

Hits & Takes
By JLN Staff

Today’s MarketsWiki Education Open Outcry Traders History Project series video is of Jeff Bernacchi, a CME member and former member of the CME Group board of directors who recently retired from the board and from trading.~JJL

We want to thank Cboe for being a sponsor for the Open Outcry Traders History Project series. We welcome others to join in becoming sponsors and helping support this project. The videos are getting some nice play and sharing on social media.~JJL

So far we have published videos of Jeff Bernacchi, Donnie Roberts, Bill Dudley, Gary Sagui, Jake Morowitz, Mike Fishbain, Tom Gould, Jordan Melamed and Leo Melamed.~JJL

Markets Media announced its 2019 Markets Choice Awards — Women in Finance at a gala event Wednesday night in Manhattan. Among the winners were Carol Kennedy, who has been doing a terrific job in marketing & communications for Cboe Global Markets for many years, as well as the OCC’s Amy Shelly, Michele Hillery of the DTCC, LiquidityEdge’s Nichola Hunter as CEO of the year, and many others.~SR

The blockchain analysis firm Elliptic recently discerned that approximately $400 million worth of transactions using XRP (approximately 0.2 percent of its total volume) were tied to some form of illicit activity. Compare this to bitcoin, which Elliptic found in September to have about $829 million worth of transactions associated with similar activity (approximately 0.5 percent of its total volume). According to Elliptic’s findings, bitcoin seems like a far more popular choice for criminals than XRP, but why is that? Elliptic’s Chief Scientist Tom Robinson thinks that XRP is too centralized and not liquid enough to serve the needs of most criminals.~MR

John Lothian News is developing a special report about spoofing. The report will include a whitepaper written around the subject from content produced at an anonymous roundtable discussion of a diverse group of industry participants. The special report will also include one-off stories and commentaries, video interviews and various related resources. We are looking for participants and sponsors for the special report. Contact me if you are interested in participating and/or sponsoring the special report.~JJL


Market Expansion, Data Solutions and Software as a Service: Trading Technologies’ Rick Lane, Part I

Rick Lane, Chairman and CEO of Trading Technologies, sat down with JLN at FIA Expo 2019 to talk about market expansion and rebuilding at TT. He explains how TT is using its software as a service platform to try to enrich the data that has been a burden rather than an asset for the global trading community and to lower the cost of accessing data.

Watch the video »


Trading Technologies Discusses the Jitesh Thakkar Case and Its Impact on the Trading Industry: Rick Lane Part II

At FIA Expo 2019, TT’s Rick Lane tells JLN that the Jitesh Thakkar case has already added cost to running businesses like TT. Tech firms have to invest in making sure that when they build bespoke solutions for clients they go through the rigors of making sure they document every step.

Watch the video »


End of Libor Creates Uncertainty for CME’s Giant Eurodollar Market; Navigating the transition from Libor to another benchmark rate is critical for CME, which has made billions of dollars from Eurodollar futures
Alexander Osipovich – WSJ
The clock is ticking on a huge futures market where nearly $3 trillion changes hands on an average day. Eurodollar futures, which let traders bet on moves in short-term interest rates, are poised for the biggest shake-up since they were introduced on the Chicago Mercantile Exchange in 1981.

*****Alexander Osipovich continues to do excellent work.~JJL


Next steps in transition from LIBOR
Speech by Edwin Schooling Latter, Director of Markets and Wholesale Policy at the FCA, delivered at the LIBOR Summit, 2019.

*****Right from the regulator’s mouth.~JJL


Chicago trading titan Don Wilson says Libor’s obituaries are premature; Wilson suspects the scandal-tainted Libor interest-rate benchmark is going to stick around past its 2021 expiration date, defying the expectations of the Federal Reserve and other regulators.
Chicago trading legend Don Wilson suspects the scandal-tainted Libor interest-rate benchmark is going to stick around past its 2021 expiration date, defying the expectations of the Federal Reserve and other regulators.

****And then there is the theory about not betting against Don Wilson, which other regulators have recently learned the hard way.~JJL


These Behaviors Make You a Scam Target
Do you spend a lot of time on social media sites or looking for great online deals? If so, then you wear a bullseye when it comes to scammers hunting for money, according to groundbreaking fraud research from the FINRA Investor Education Foundation, BBB Institute for Marketplace Trust and the Stanford Center on Longevity.

*****Number one should be breathing. If you are breathing, then you are behaving in a way you can be scammed. Scams are everywhere.~JJL


Wednesday’s Top Three
The top read story on Wednesday, not surprisingly, was Bloomberg’s The End of the United Kingdom May Be Nearing. Next was Jim Oliff’s page in MarketsWiki. And third was a podcast chat with Doug Cifu of Virtu Financial from Blubrry (who I think needs to buy a vowel).


MarketsWiki Stats
168,105,441 pages viewed; 23,984 pages; 222,531 edits
MarketsWiki Statistics


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

Recently updated pages include
Grayscale Investments
Galaxy Digital

CryptoMarketsWiki Stats

1,300 pages; 11,544 edits
CryptoMarketsWiki Statistics

Lead Stories

Charles Schwab to Buy TD Ameritrade for $26 Billion, Reports Say
Katerina Petroff and Sarah Jacob – Bloomberg
Deal would consolidate an industry reeling from a price war; Schwab last month eliminated commissions for U.S. stocks
Charles Schwab Corp. is buying TD Ameritrade Holding Corp. for $26 billion, with a deal expected to be announced Thursday morning, Fox Business reports, citing unidentified people familiar with the situation.

Ex-JPMorgan trader found guilty in U.S. currency-rigging trial
Brendan Pierson – Reuters
A former foreign exchange trader at JPMorgan Chase & Co was found guilty Wednesday of conspiring to rig trades for his own benefit.

Louis Bacon to shut Moore Capital hedge fund; Closure after three decades follows years of weakened returns
Ortenca Aliaj, Miles Kruppa and Laurence Fletcher – FT
Louis Bacon, the veteran hedge fund manager, is planning to shut his 30-year-old firm Moore Capital Management and return capital to investors, according to two people familiar with the situation.

S&P acquires ESG ratings arm of RobecoSAM; Move is latest in rating agency’s arms race with rival Moody’s for sustainability data
Billy Nauman – FT
S&P Global has acquired the environmental, social and governance ratings arm of RobecoSAM, a Swiss asset manager, escalating an arms race with rival credit rating agency Moody’s as the companies look to capitalise on increasing demand for data on sustainable investments.

UK watchdog sets deadline on Libor interest rate swaps
Britain’s Financial Conduct Authority said on Thursday that it wants banks to stop offering Libor-based interest rate swap contracts from the first quarter of next year.

The Unnerving Mystery of a $6.6 Trillion Dead Calm; An period of unusually low foreign-exchange volatility may presage a turn in the dollar.
John Authers – Bloomberg
Here is a puzzle that is preoccupying the world’s currency dealing rooms. No market is more liquid and nothing is more heavily traded than foreign exchange. The latest survey by the Bank of International Settlements, carried out in April, showed that total currency volumes traded per day reached $6.6 trillion (yes, trillion with a t). In fact, while other markets remain quieter than they were before the global financial crisis, foreign exchange volumes have more than doubled.

How the Discount Window Became a Pain in the Repo Market; The stigma attached to borrowing from the Fed’s emergency lending window has contributed to recent turmoil in overnight lending markets
David Benoit – WSJ
Banks have all but abandoned the Federal Reserve’s discount window, and it is straining Wall Street’s postcrisis infrastructure. Borrowing from the discount window, the Fed’s only channel for lending directly to banks, has plummeted. Through October, banks are on pace to borrow just $750 million from the Fed this year, half of last year’s total and well below the record low of $940 million set in 1961.

The ‘Dirty Doctor’ of Newcastle Still Haunts Former Barclays Employees; A case before the U.K. Supreme Court could establish whether the bank is responsible for sexual assaults alleged to have taken place decades ago—and set a precedent for today’s gig economy.
Max Abelson, Gavin Finch – Bloomberg
It was a beautiful summer day in Newcastle, near England’s northeast coast, and James was practically skipping to a doctor’s appointment. He was small, tough, alone, and 16. He crossed a leafy street, spotted the address, and knocked. The woman who answered let him in and pointed to a flight of stairs. He climbed to the top and saw Gordon Bates.

Citi Executive Says Currency Chats Were Proof of Trader’s Misconduct
Jonathan Browning – Bloomberg
Rohan Ramchandani was cleared by jury of rigging FX markets; Jamie Forese testifying at ex-trader’s employment hearing
Ex-Citigroup Inc. President Jamie Forese said he found it “disturbing” that a former senior currency trader — who was cleared by a U.S. jury — didn’t see anything wrong with the instant messages he exchanged with rivals.

Saudi Arabia sidelines foreign banks on Aramco IPO; JPMorgan and Morgan Stanley are ‘global co-ordinators’ in name only
Arash Massoudi, Anjli Raval and Simeon Kerr – FT
Global banks advising on the Saudi Aramco flotation have been marginalised in the final stage of the process, as the kingdom turns to local brokers to sell shares in the oil company to domestic investors.

A message to the buy-side on outsourced trading
The Trade
A senior buy-side head trader has penned a stark warning on the rise of front-office outsourcing, and its potential impact on the trading community. At their request, this opinion piece is published anonymously. The TRADE welcomes responses to the arguments presented.

XTX Markets overtakes Citadel Securities and Tower Research as largest ELP SI in Europe; Research from TABB Group found that XTX Markets is now the largest ELP SI in Europe, following record activity across the landscape in October.
Hayley McDowell – The Trade
Systematic internalisers operated by electronic liquidity providers (ELP SIs) in Europe saw record activity October, with XTX Markets taking the top spot as the largest venue.

Westpac scandal dents already bruised Australia banking industry; Lender faces record fine and leadership shake-up over alleged breach of money-laundering laws
Jamie Smyth – FT
Westpac, Australia’s second-largest bank by assets, is facing a record fine and potential leadership shake-up after the country’s financial crime watchdog accused it of a huge breach of money-laundering laws.

Pressure grows on Westpac CEO after massive Australian money laundering scandal
Byron Kaye, Paulina Duran – Reuters
Pressure mounted on the chief executive of Westpac Banking Corp (WBC.AX) on Thursday over the handling of Australia’s biggest money laundering scandal, with the prime minister saying the bank’s board should reflect deeply on Brian Hartzer’s position.

Exchanges, OTC and Clearing

Tradeweb brings portfolio trading platform to European credit market; Portfolio trading has been increasing in popularity with the buy-side amid the launch of Tradeweb’s platform for US credit bonds earlier this year.
Hayley McDowell – The Trade
Electronic trading provider Tradeweb has confirmed the launch of its portfolio trading service for European credit bonds, after first introducing the platform for US credit bonds earlier this year.

La Française des Jeux lists on Euronext; Very successful ipo attracts individual and institutional investors en masse
Euronext today celebrated the listing of La Française des Jeux (FDJ), France’s leading lottery and gaming company, in compartment A of its regulated market in Paris (ticker code FDJ).

Agripower France lists on Euronext Growth; EUR5.75 million raised – market capitalisation EUR15.8 million
Euronext today celebrated the listing on Euronext Growth of Agripower France, a company that specialises in designing, developing and installing individual and collective methanisation solutions for farms.

Gerry Weber International AG: Delisting
On 25 October 2019, the company Gerry Weber International AG announced in an ad hoc message that the insolvency plan approved by the creditors’ meeting had become legally valid. In relation to this, a capital decrease and simultaneous capital increase with exclusion of subscription rights took place, which were entered in the Commercial Register on 31 October 2019.

SGX welcomes Samsung Futures as Derivatives Trading Member
Singapore Exchange (SGX) today welcomed Korea based Samsung Futures Inc. as a Trading Member of its derivatives market. Samsung Futures Inc. originally started as First International Futures Inc. in 1992 as an outbound commodity Futures Commission Merchant (FCM) until it was merged into Samsung Group in 1996 to become a full service derivatives brokerage firm.

BME: Mango Registers Its First Commercial Paper Programme With MARF
MARF, BME’s Fixed Income market, today registered a 200 million-euro new Commercial Paper (CP) Programme from textile group Mango, through its operating company Punto FA. With this new financing tool the company will be able to raise funding in this BME Fixed Income market via the issuance of CPs, which will be placed among professional investors, with nominal per-unit values of 100,000 euros and maturities of up to 24 months .

BME Clearing Starts Clearing Repo Trades On European Sovereign Debt – Italian, Portuguese, German, French, Dutch And Austrian Sovereign Debt To Be Covered
BME Clearing, BME’s Central Counterparty (CCP), today started offering clearing of repo trades on sovereign bonds from several European countries, in addition to the clearing of Spanish sovereign debt repo trades that it already offers.

Colombian stock exchange launches crowd funding platform for start-ups
Colombia’s stock exchange on Wednesday launched an internet crowd funding platform meant to help small businesses and start-ups raise funds from the public.

Exchanges file rules with U.S. SEC aimed at spurring ETF market
John McCrank – Reuters
U.S. stock exchange operators have filed plans with the U.S. Securities and Exchange Commission aimed at lowering the cost and speeding up the process of launching new exchange-traded funds, which could give a boost to the more-than $3 trillion market.


Bill Gates Says Open Research Beats Erecting Borders in AI
Vlad Savov and John Micklethwait – Bloomberg
Cooling U.S.-China ties have slowed cross-border collaboration; Open R&D approach is highly advantageous for tech development
Microsoft Corp. co-founder Bill Gates spoke out against protectionism in technological research around topics like artificial intelligence, arguing that open systems will inevitably win out over closed ones.

Goldman’s CEO Defends Apple Card, Says ‘There’s No Gender Bias’
Cathy Chan – Bloomberg
Goldman Sachs Group Inc. Chief Executive Officer David Solomon forcefully denied customer allegations of gender bias in setting credit limits for the Apple Card, pledging to address a social media and political uproar with more transparency when making decisions.

Trade War Threatens Tech Sectors in China and Silicon Valley
Bloomberg News
VC, entrepreneurs voice concern over Washington-Beijing rift; Fight to control tech lies at the heart of trade tensions
While the U.S-China trade war rages on, the tensions are exposing growing rifts between China and Silicon Valley.

Investors pour almost $400m into African fintech in a week; Interswitch, OPay and PalmPay are expanding payments networks across the continent
Neil Munshi – FT
Investors have poured almost $400m into payments companies based in Nigeria in the past week, in a sign of how seriously venture capital firms are taking the opportunity to build financial networks across the continent.

Robinhood’s commission-free share trading a headache for investors or rivals?
Oliver Hall – Proactive Investors
Since Robinhood’s launch in the States six years ago, other larger firms have slashed their fees for trading equities and other securities, sparking prediction of similar moves in the UK

Itiviti Partners With NBTrader To Offer Alternative Path For Order Routing
Itiviti, a leading technology, and service provider to financial institutions worldwide, has partnered with NBTrader, an independent specialist on the development and supply of trading technologies for the Professional and Private Investor UK market.


Singapore proposes to regulate bitcoin futures
Singapore’s central bank plans to bring bitcoin and other similar cryptocurrency futures traded on approved exchanges under its regulation in response to interest from international institutional investors, it said on Wednesday.
Market watchdogs worldwide have been debating whether and how they should regulate the cryptocurrency industry. Many have focused their attention initially on investor protection issues given concerns about market manipulation and cryptocurrencies’ volatility.

The Federal Reserve is looking into developing a digital currency in the US, Powell confirms
Gina Heeb – Markets Insider
US central bankers have explored the possibility of developing a digital currency that would be directly available to businesses and households. “We have assessed and we continue to carefully analyze the costs and benefits of pursuing such an initiative in the U.S.,” Federal Reserve Chairman Jerome Powell wrote in a letter to lawmakers this week. In September, Reps. French Hill and Bill Foster said the central bank should consider a US-backed cryptocurrency to remain competitive.

Ameribor Financial Exchange, LLC (AFX) Announces AMERIBOR on the Blockchain
Mondo Visione (press release)
American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announced today the launch of its AMERIBOR® on the blockchain. AFX now mints two ERC-721 non-fungible tokens for each AMERIBOR transaction on the AFX platform (for each counterparty to the transaction). The pair of tokens is automatically minted when the transaction is repaid by the borrowing counterparty to the lending counterparty.

Analysis of $400M in illicit XRP activity shows it’s mostly theft and Ponzi schemes
David Canellis – The Next Web
Cyberbaddies won’t use Ripple (XRP) ‘cos its too centralized. Cryptocurrency analysts have identified $400 million worth of illicit Ripple transactions — mainly Ponzi schemes and exchange thefts. The illicit XRP activity detected by London-based firm Elliptic amount to less than 0.2 percent of all XRP payments processed to date, which is less than other cryptocurrencies like Bitcoin. In press materials shared with Hard Fork, Elliptic chief scientist Tom Robinson attributed this to two main factors: XRP is simply not as liquid as Bitcoin or Ethereum, so it’s not as easy to “cash-out” large amounts of illicit cryptocurrency.

Venezuelan oil in storage tanks to back sanctioned cryptocurrency -Maduro
Deisy Buitrago, Luc Cohen, Marianna Parraga – Reuters
Venezuelan President Nicolas Maduro on Wednesday said some 30 million barrels of oil sitting in storage tanks would serve as backing for the OPEC nation’s state-run cryptocurrency, the petro, which has been sanctioned by the United States. The statement came as part of a renewed push by Maduro’s socialist government to promote use of the petro in recent weeks, as inflation continues to erode Venezuelans’ meager salaries and Washington’s sweeping sanctions complicate Caracas’ ability to engage in overseas financial transactions.

Fidelity’s Crypto Branch Nabs Tricky To Acquire NY Trading License
Darryn Pollock – Forbes
Boston-based Fidelity Investments became one of the early believers in the future of blockchain and cryptocurrency, going so far as to launch a subsidiary company Fidelity Digital Assets. This branch of the major Investment company has now been granted a license by New York’s financial regulator. The license allows the company to offer its cryptocurrency trading and custody services to companies based in the State, something that has not been easy to do in the past.

Too Early to Tell if Libra Is a Security, CFTC Chairman Says
Daniel Palmer – Coindesk
Heath Tarbert, chairman of the U.S. Commodity Futures Trading Commission (CFTC), says it is not yet clear what sort of product Libra will be – including whether it might be a security. Speaking to CNBC at the sidelines of the CME Group Global Financial Leadership conference Tuesday, Tarbert addressed the current U.S. regulatory stance on cryptocurrencies and blockchain, and the nation’s global position regarding the technology.

Zero-Commission Trading Is Coming to Crypto as Boom Times Fade
Olga Kharif – Bloomberg Law
Zero-fee trading first came to exchanged-traded funds and then to online stock and option transactions. Now the strategy is spreading into the cryptocurrency sphere. Seen as the most profitable sector of digital-asset world, trading platforms are feeling the pressure as industry heavyweights such as Binance Holdings Ltd. and BitMex grab market share with both trading volume and coin prices sagging. ShapeShift, which has operated an exchange since 2014, said Wednesday it’s begun offering free “perpetual” trades.

Bitcoin Mining Company Canaan Raises $90 Million in U.S. IPO
Crystal Tse – Bloomberg
Canaan Inc., a maker of Bitcoin mining machines, raised $90 million after pricing its U.S. initial public offering at the bottom of its marketed range. The Hangzhou, China-based company sold 10 million American depository shares for $9 apiece on Wednesday, according to data compiled by Bloomberg. The shares had been marketed for $9 to $11, according to filings with the U.S. Securities and Exchange Commission.

PayPal CEO claims he wasn’t “spooked” by regulatory scrutiny when he withdrew from Facebook’s Libra
Yilun Cheng – The Block Crypto
PayPal CEO Dan Schulman says that he pulls the company out of the Libera Association to focus on its core business, but regulatory risks associated with the project might also play a part. The company is working on its own blockchain and cryptocurrency projects although Schulman remains suspicious toward crypto.

Binance acquires Indian crypto exchange WazirX to serve over 1 billion people of the country
Yogita Khatri – The Block Crypto
Binance, the world’s largest cryptocurrency exchange by trading volumes, has acquired Indian cryptocurrency exchange WazirX to serve over 1 billion people of the country. Announced Thursday, the acquisition will allow Indians to buy and sell cryptocurrencies with local fiat currency Indian rupees (INR), starting Nov. 25. WazirX CEO Nischal Shetty told The Block that Binance now owns 100% of WazirX, but did not disclose the price details due to a non-disclosure agreement. The price is reportedly in the range of $5-$10 million.


Trump Expected to Sign Hong Kong Bill Despite China Threats
Daniel Flatley and Justin Sink – Bloomberg
House passes Senate bill backing Hong Kong protest movement; China says measure is a grave violation of international law
U.S. President Donald Trump is expected to sign legislation passed by Congress supporting Hong Kong protesters, setting up a confrontation with China that could imperil a long-awaited trade deal between the world’s two largest economies.

China demands Trump veto bills on Hong Kong
Associated Press
China on Thursday demanded President Donald Trump veto legislation aimed at supporting human rights in Hong Kong and renewed a threat to take “strong countermeasures” if the bills become law.

Kissinger Says U.S. and China in ‘Foothills of a Cold War’
Bloomberg News
Former U.S. Secretary of State speaks to NEF forum in Beijing; Says hopes trade talks open door for political discussions
Former U.S. Secretary of State Henry Kissinger said the U.S. and China were in the “foothills of a Cold War,” and warned that the conflict could be worse than World War I if left to run unconstrained.

Delisting Chinese Firms From U.S. Is a ‘Terrible Idea,’ Hank Paulson Says
Bloomberg News
Ex-Treasury Secretary Hank Paulson warns against decoupling; Washington, Beijing must cooperate to tackle next big crisis
Former U.S. Treasury Secretary Hank Paulson said calls to oust Chinese companies from American stock indexes was contrary to the foundations of capitalism, as he warned against the dangers of decoupling the world’s two largest economies.

China Is Out of Economic Ammo Against the U.S.; It has maxed out tariffs and other trade barriers, and selling Treasuries is ineffective.
Noah Smith – Bloomberg
The Chinese government has issued vague but stern-sounding warnings that it will retaliate for a bill passed by Congress that would require the White House to protect human rights and ensure the territory’s autonomy. But China’s options for economic retaliation are limited. And most of these options have already been exercised amid President Donald Trump’s trade war.

Why US farmers are falling out of love with Donald Trump; As impeachment gathers momentum, anger over ethanol policy threatens the president in the Corn Belt
Gregory Meyer – FT
Three stickers decorate a fire door inside the Siouxland Energy Co-operative of north-west Iowa. One with a green heart declares “I Love Ethanol”. Another shows a cartoon character urinating on the word Opec. A third says, “write your congressman”.

Fed shows little appetite for bold policy change sought by Trump
Ann Saphir – Reuters
As U.S. Federal Reserve officials hone their monetary policy playbook in preparation for the next economic downturn, it appears they will eschew more controversial approaches tried by other global central banks, including one that President Donald Trump has called on the Fed to try.


SEC Announces Conference on Macroeconomic and Structural Trends and Dynamics Affecting the Capital Markets; Event Will Be Held on Dec. 4 in Washington, DC
The Securities and Exchange Commission today announced that it will host a conference on Dec. 4 entitled “The State of Our Securities Markets.”

Chairman Tarbert Discusses U.S. Leadership in Digital Assets on CNBC
U.S. Commodity Futures Commission Chairman Heath Tarbert joined CNBC’s “The Exchange” yesterday for an interview on digital assets and the importance of U.S. leadership in this space. Full video and highlights from the interview are below:

FCM and IB Members—FinCEN updates list of FATF-identified jurisdictions with AML/CFT deficiencies
On November 12, 2019, the Financial Crimes Enforcement Network (FinCEN) issued an Advisory announcing that the Financial Action Task Force (FATF) had updated its list of jurisdictions with strategic AML/CFT deficiencies. NFA Member FCMs and IBs should review this Advisory to ensure that their AML programs have the most current information on FATF-identified jurisdictions with AML/CFT deficiencies and revise their AML programs accordingly. A copy of the Advisory is available on FinCEN’s website.

FCA fines Janus Henderson £1.9 million for ‘closet tracker’ rip-off
Daniel Grote – CityWire
FCA fines Janus Henderson £1.9 million for ‘closet tracker’ rip-off
The Financial Conduct Authority (FCA) has fined fund group Janus Henderson £1.9 million for overcharging retail investors in two funds it was effectively running as ‘closet trackers’.

US Department Of Justice: Former Trader For Major Multinational Bank Convicted For Price Fixing And Bid Rigging In FX Market
A former currency trader was convicted today in New York for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today.

Fund manager fined £2m after overcharging thousands of savers for almost five years for a ‘closet tracker’ while waiving fees for big investors
James Salmon – Daily Mail
A blue-chip fund manager has been fined £2million and accused of treating thousands of ordinary savers with contempt after overcharging them for almost five years while waiving fees for corporate clients.

Investing and Trading

Big Marijuana Embraced Convertibles. Now They’re Under Water
Kristine Owram and Crystal Kim – Bloomberg
Billions of converts are underwater as pot stocks languish; Aurora gave holders option to convert early at lower price
The bear market in pot stocks has left billions in convertible debentures underwater, meaning cash-starved companies may have to “creatively restructure” their debt or pay a bill they didn’t expect would come due.

Investors lose billions as bubble in two HK companies bursts; Marble producer wiped out on MSCI U-turn while furniture maker reels after short-seller’s report
Hudson Lockett and Daniel Shane – FT
Billions of dollars were wiped off the market value of two Hong Kong companies on Thursday, marking the latest examples of spectacular wipeouts in the city’s equity market.

Investors Lose Their Marbles as MSCI U-Turn Spurs 98% Stock Plunge; After a near 40-fold increase this year, Hong Kong-listed ArtGo was on the verge of inclusion in influential indexes
Xie Yu – WSJ
A marble-mining stock crashed 98% in a morning, shedding $5.7 billion of market value, after MSCI Inc. dropped plans to add the Hong Kong-listed company to its indexes.

BoJ’s stock-buying programme starts to sputter; Scheme has sparked criticism that heavy central-bank purchases are warping the market
Leo Lewis – FT
The Bank of Japan has gone 40 days without making a big purchase of domestic stocks, prompting speculation that it has begun “stealth tapering” the controversial stimulus programme which is soon to enter its tenth year.

Wall Street powers on but with less and less conviction; Investors’ belief that ‘there is no alternative’ has propelled gains for a decade
Richard Henderson- FT
Two powerful forces shaping the US stock market are fighting for primacy across Wall Street. One is Tina — there is no alternative. It has been a rallying cry of fund managers celebrating the near-unbroken rise of US stocks since the financial crisis. Tuesday saw another record for the S&P 500 index, bringing total returns over the past 10 years to more than 250 per cent.

Managers are enriching themselves at shareholders’ expense; Stock buyback and issuance programmes are an overlooked transfer of wealth
Ben Hunt – FT
In poker, the “rake” is the cut that the casino dealer takes out of every pot. It is usually a couple of dollars per hand — barely noticeable, certainly not to a novice player like me.

CMC Markets shrugs off regulatory crackdown with profits boost; Spreadbetting group’s pre-tax figures even outstrip levels hit before European leverage limit curbs came in
Cat Rutter Pooley – FT
Spreadbetter CMC Markets shrugged off the effects of a European crackdown on highly leveraged derivatives trades in the first half of its financial year, reporting profits that were higher even than the level two years ago before the restrictions came in.

William Hill sales hurt by crackdown in UK on betting limits; Bookmaker says revenue from gaming machines hit as gamblers focus more on sports
Alice Hancock – FT
William Hill, the UK bookmaker, said revenues from gaming in its retail shops fell by more than a third after it cut 700 shops from its estate following the implementation of a £2 limit on highly addictive gaming machines.


Charles Schwab in talks to buy smaller rival TD Ameritrade: CNBC
Charles Schwab Corp (SCHW.N), the largest U.S. discount brokerage, is in talks to buy smaller rival TD Ameritrade (AMTD.O) and a deal could be announced as early as Thursday, CNBC reported, citing a source familiar with the matter.

Big banks would get climate stress tests under proposed U.S. law
Katanga Johnson – Reuters
U.S. Democratic Senator Brian Schatz of Hawaii on Wednesday introduced a bill that would direct the Federal Reserve to subject large banks to so-called “stress tests” measuring their resilience to climate-related financial risks.

ECB may lower bar for bank mergers but not green finance
Francesco Canepa – Reuters
The European Central Bank may soften its demands for some banks in the euro zone to raise capital and offload bad loans before merging to help speed up consolidation in the profit-starved sector, one of the ECB’s top supervisors said on Thursday. Separately, another senior ECB supervisor poured cold water on the notion floated by some European politicians that it should lower capital requirements for banks’ exposure to environmentally sustainable, or green, projects.


Czech Tycoon’s Company Cancels $1.5 Billion Hong Kong IPO
Peter Laca and Krystof Chamonikolas – Bloomberg
Lender cites market conditions for scrapping share sale; Decision comes one day after Alibaba’s $11 billion offering
Home Credit NV, the consumer lender owned by Czech billionaire Petr Kellner, scrapped a $1.5 billion share offering in Hong Kong, where authorities are keen to demonstrate that months of street protests haven’t disrupted business.

Hong Kong Stock Plunges 91% After Short Seller Aandahl’s Attack
Jeanny Yu – Bloomberg
Kasen International Holdings’ stock was later suspended; Blue Orca report questioned Kasen’s Cambodia investments
A Chinese furniture maker plunged as much as 91% before the stock was suspended in Hong Kong, after being targeted by short seller Soren Aandahl.

Finland Has an App Showing Shopping’s True Carbon Footprint
Kati Pohjanpalo – Bloomberg
Payment provider Enfuce uses shopping data to gauge CO2 output; Amazon, Mastercard are working with Enfuce on the product
Shoppers will soon be able to work out the true carbon footprint of their purchases thanks to an app from one of the most digitally savvy nations in the world.

Hong Kong’s Rich Open More Offshore Accounts as Backup Plan, Bankers Say
Bloomberg News
Top bankers say Hong Kong’s wealthy are opening more offshore accounts to ensure they have an emergency escape route for their cash if the city’s civil unrest worsens.

Hong Kong’s Wealthy Aren’t Giving Up on the City Just Yet
Enda Curran – Bloomberg
Even after a turbulent week, few signs of a capital exodus; Henry Kissinger, Bill Winters, Ronnie Chan offer their views
Is Hong Kong’s run as one of the world’s most important financial hubs coming to an end?

Trade commission finds Chinese aluminum wire, cable export harms U.S. industry
The U.S. International Trade Commission (ITC) on Wednesday said it had determined that U.S. industry was materially injured by below-cost imports of aluminum wire and cable from China, locking in U.S. antidumping and countervailing duties.


UK growth will dip to 1% even if no-deal Brexit avoided, warns OECD
Phillip Inman – The Guardian
The UK’s GDP growth rate will slip to 1% next year even if a no-deal Brexit is avoided, according to the Organisation for Economic Development and Cooperation. The OECD said the economy would slow down from growth of 1.2% this year if parliament passes Boris Johnson’s Brexit deal before the 31 January deadline, before returning to 1.2% in 2021. However, the OECD also warned that a no-deal departure would significantly damage the economy and leave the UK more exposed to a global downturn.

Brexit Bulletin: Tax Less, Spend More
David Goodman – Bloomberg
What’s happening? U.K. political parties are ramping up their spending pledges before next month’s election. The anti-Brexit Liberal Democrats promise to use a “remain bonus” to fund public services, while the prime minister gave a glimpse into Conservative plans for tax cuts for workers. After being excluded from last night’s election debate, the Lib Dems — who hold 20 of 650 seats in the House of Commons — tried to break into the spotlight today with a plan that leader Jo Swinson says “starts with stopping Brexit.” The party calculates that staying in the European Union would generate £50 billion more for the economy over five years than their rivals’ plans — a positive twist on the usual assessments showing the damage of leaving.

Johnson’s ‘Get Brexit done’ drumbeat cannot drown out reality for ever
Rafael Behr – The Guardian
One test of a campaign slogan is how efficiently it helps voters explain their preference to others and to themselves. Why Donald Trump? To make America great again. Why leave the EU? To take back control. Simple. Boris Johnson has found that kind of groove with his pledge to “Get Brexit done”, which is why he beat the phrase like a drum in televised leader debates this week. It packs a lot into four syllables: release from the EU for those who really care, and relief from having to think about it to those who don’t. It has the pleasing crispness of a page being turned, while making Labour’s policy feel like a threat to reread a grim chapter all over again.

Corbyn Unveils Manifesto to Rile U.K.’s Bankers and Billionaires
Jessica Shankleman -Bloomberg
Labour leader Jeremy Corbyn will urge voters in the U.K. election to take down bankers and billionaires who “profit from a rigged system.”

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CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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