Chinese censorship is spreading beyond its borders

Oct 14, 2019

First Read

Hits & Takes
JLN Staff

The SEC has published two educational videos meant to help people spot and avoid fraud. They are titled “The Too-Good-to-be-True Circus” and “Without a Trace.”~JJL

The Nobel Prize in economics was awarded jointly to three economists from the Massachusetts Institute of Technology and Harvard University, Abhijit Banerjee, Esther Duflo and Michael Kremer, for their experimental approach to alleviating global poverty. Duflo is only the second woman to win the Nobel in Economic Sciences.~SR

(Bloomberg also has that story here.) ~SR

Adena Friedman, the president and CEO of Nasdaq, has a new TEDTalk titled “|If You Dream It, We Can Build It]].~JJL

Registration is open for FIA Asia 2019. The conference will be held in Singapore from December 3 to 6.~JJL

Join the FIA community in supporting the Greater Chicago Food Depository on Wednesday, October 30 at the 9th Annual Great Chicago Steak Out, featuring a masquerade twist.~JJL

Following its acquisition by Lanson, Intermarket Communications is now officially Lansons Intermarket.~JJL

CME Group is looking to fill this position: Director, Corporate Communications (Fintech).~JJL

From my 40th high school reunion, I learned that one of my classmates and long lost friends, Dean Menegas, is the general counsel at Spinnaker Capital, vice-chair, board of directors at the Emerging Markets Trade Association (EMTA) and president of the Transatlantic Council of the Boy Scouts of America. He is the president of the Boy Scout Council for the rest of the world besides the US, except for a council in Asia.~JJL


CME Group Reaches Record Asia Pacific Average Daily Volume of 1.2 Million Contracts in Q3
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved its highest quarterly Asia Pacific average daily volume (ADV) on record, with 1.2 million contracts traded during third-quarter of 2019, up 61% year over year and surpassing the previous quarterly record of 1.1 million contracts traded in second-quarter 2019.

****That is a lot of volume from Asia.~JJL


Spoofing; Cross-Market Manipulation; Ether – Yes (CFTC); Bitcoin – No (SEC); Mandamus
Gary DeWaal – Bridging The Week
A broker-dealer and its chief executive officer settled charges brought in 2017 by the Securities and Exchange Commission that the firm facilitated manipulative conduct by a customer, despite being alerted by regulators and an insider at the client that the customer might be engaging in spoofing trading. Unrelatedly, while the new chair of the Commodity Futures Trading Commission proclaimed the digital currency ether a commodity and said there soon might be futures or other derivatives contracts based on the second-largest market cap cryptocurrency, the SEC once again stymied the listing of an exchange-traded fund based on bitcoin. As a result, the following matters are covered in this week’s edition of Bridging the Week:


Cloud in Retail Banking and Capital Markets: Financial Services Leaders Forum NYC Recap (Part Two)
Chuck Mackey – Maven Wave
The Financial Services Leaders Forum (FSL Forum) from Google presented a detailed and comprehensive look at how Google Cloud and its attendant services are acting to drive transformation in the industry. Financial services was long seen as a laggard in embracing the power of the cloud, but that has changed dramatically in the past year or two. The day-long lineup of speakers and presentations at FSL Forum stands as a testament to that fact.

*****The always popular Chuck Mackey recaps.~JJL


Friday’s Top Three
Our top read item on Friday was the JLN History of Traders’s piece on Jacob Morowitz: Open Outcry Traders History Project. Second was Ken Fisher Apologizes for Offensive Remarks Two Days Later from Bloomberg. Third was The Block Crypto’s Jump Capital principal says improving capital efficiency is key for industry



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Lead Stories

Chinese censorship is spreading beyond its borders; Western companies and universities have strong incentives not to offend Beijing
Gideon Rachman – FT
When Xi Jinping greeted African leaders in Beijing last year, his speech contained a very Chinese formula: the “five nos”. In reality, all five negatives could be summed up as a single pledge. Unlike bossy westerners, China would never tell Africans how to run their own countries. There would be “no interference in African countries’ internal affairs”.

*****Free markets demand freedom of speech and expression. I believe in free markets and freedom of speech, expression and assembly.~JJL

Asset managers must use their votes to tackle climate change; Tasked with voting for directors on behalf of millions of savers, they have the power to make a difference
Natasha Landell-Mills – FT
As we emerge from the 2019 voting season for listed companies — the time of year when shareholders elect company leaders — asset managers have once again ducked their responsibility to help address the climate crisis. At ExxonMobil, Chevron, BP, Shell and Total, directors were appointed with an average 97 per cent support from shareholders.

Global regulators put pressure on Libra with enhanced scrutiny; Facebook seeks to rally support for digital currency as more partners jump ship
Chris Giles, Kiran Stacey and Hannah Murphy – FT
Facebook’s plans for a digital currency are coming under further pressure as global regulators step up their scrutiny of the struggling Libra project.

UK to expand powers to block foreign takeover deals
Britain plans to strengthen its powers to block or intervene in the foreign purchase of any company that could affect national security, it said on Monday.

Blackstone Talked With Ken Griffin’s Citadel About Buying Stake; Flagship hedge-fund operation could be worth up to $7 billion
Rachael Levy and Liz Hoffman – WSJ
Blackstone Group Inc. BX 1.29% has held talks to buy a stake in Ken Griffin’s Citadel LLC, a deal that would unite two of the biggest names in investing.

Amber accuses Lagardère of trying to ‘intimidate’ shareholders; Activist investor responds to lawsuit issued against it by the French media group
Harriet Agnew – FT
Amber Capital, the activist hedge fund locked in a battle with Lagardère, has hit back at a lawsuit launched against it by the French media group, calling it “as aggressive as it is baseless”.

The TRADE Magazine, Autumn 2019; John runs through what you can find in the latest issue of The TRADE, now available to read online.
John Brazier – The Trade
The latest issue of The TRADE is now available to read online, so now you’ve had time to adjust to being back at work and dropped the kids off at school, dive into all the best content from the Autumn 2018 issue:

‘Back Door’ Capital Outflows Should Worry Beijing; Officially, China has been successful in preventing citizens from moving cash abroad to avoid a weakening yuan—but all might not be what it seems.
Nathaniel Taplin – WSJ
The Chinese talk of “walking through the back door”—meaning finding a way around the rules, and often implying graft or the use of personal connections.

Kim Jong Un May Be Hiding a Hog Apocalypse From the World
Heesu Lee – Bloomberg
African swine fever is said to have spread across North Korea; Virus risks becoming endemic, dispersing to neighboring states
By official accounts, the pig contagion wreaking havoc across Eastern Asia has virtually skipped over North Korea, with a single outbreak reported there in May. But wayward feral pigs have stoked concern that Kim Jong Un’s reclusive state is hiding an African swine fever disaster.

World’s Biggest Pork Producer Warns of Bacon Shortage
Lydia Mulvany – Bloomberg
Spread of pig disease in China will have global ripples; U.S. ham market could also face deficit, Smithfield says. It’s scary news for bacon fans: The U.S. could see tight supplies, or even some shortages of pork bellies along with ham next year as the spread of a pig-killing disease in China ripples through the global market.

How to hide a billion dollars; A guide for kleptocrats worried by foreign prosecutors
The Economist
So you’ve stolen a billion dollars. That was the easy part. The country of which you are president may be poor, which is a pity, but it is also lawless, which creates opportunities. The auditors, police and prosecutors who should have slapped the hand you put in the treasury chose to kiss it instead. So your pockets are bulging with ill-gotten loot. There is just one snag: the world has grown less tolerant of kleptocrats.

Plans for ‘offshore renminbi Nasdaq’ in Macau submitted to Beijing; Official involved in submitting proposal to central government says he hopes plan might be approved as a ‘birthday gift’ on 20th anniversary of city’s return to Chinese administration; Announcement of plan’s submission made at forum in Guangdong province on Saturday
He Huifeng, Eric Ng – South China Morning Post
A proposal to set up an offshore yuan-denominated “Nasdaq” in Macau has been submitted to Beijing for consideration, according to a senior official from neighbouring Guangdong province.

Revamp BOE or Yield to ‘Tyranny of Consensus,’ Blanchflower Says
Lucy Meakin – Bloomberg
The Bank of England rate-setting committee should be drastically overhauled to follow the model of the Federal Reserve, otherwise it will remain hostage to the “tyranny of consensus,” according to former policy maker Danny Blanchflower.

Michigan Pulls $600 Million From Ken Fisher After Lewd Remarks
Janet Lorin – Bloomberg
Backlash after billionaire investor’s comments at conference; Other customers are evaluating relationship with Fisher
The State of Michigan Retirement Fund’s pension account, worth more than $70 billion, ended its relationship with the investment firm of Ken Fisher in the latest backlash to offensive remarks the billionaire made this week at a conference. Fisher has apologized for sexist and off-color remarks he made at the Tiburon CEO summit in San Francisco, but it hasn’t stopped the outrage.

Exchanges, OTC and Clearing

BME: MARF Registers A New 100 Million-Euro Commercial Paper Programme By PRYCONSA
BME’s Fixed Income Market, MARF, has admitted a new commercial paper (CP) programme by Pryconsa to trading. Through this new tool the company will be able to place CPs with a maximum outstanding volume of 100 million euros and maturities up to twenty-four months.

Interactive Brokers clients worldwide can now trade on Moscow Exchange
Moscow Exchange (MOEX) today announces that Interactive Brokers Group (Nasdaq: IBKR), a global electronic broker, has begun providing access to the Russian market for all its clients in the US and worldwide.

CME’s physical aluminum delivery gains traction in Asia warehouses
Min Zhang, Shivani Singh – Reuters
CME Group Inc’s physical delivery of aluminum has gained traction since September after expanding its warehousing network beyond the United States into Europe and Asia, fueled by growing liquidity in Asian market, a company official said. “We are starting to see actually more and more materials coming into our warehouses,” Young-Jin Chang, CME’s Global Head of Metals told Reuters by telephone on Friday, adding more stocks of the light metal were expected in Asian locations.

The Future of Investing, Adena Friedman, Nasdaq CEO
Yahoo Finance
In a conversation with Yahoo Finance, Adena Friedman, Nasdaq CEO, discusses how to appeal to younger investors, the state of the U.S. and global economies, cryptocurrencies and blockchain tech, the U.S. IPO market and companies remaining private for longer periods.


Cyber fraud techniques evolve into confidence trick arms race
Social engineering becomes more sophisticated in convincing victims to co-operate
Siddharth Venkataramakrishnan – The Financial Times
While talk of cyber security breaches may conjure up images of advanced weapons, elite hackers and system-wide disruption, many attacks rely on less technically demanding techniques. Some are the result of social engineering: the art of getting targets to do something that the fraudster wants them to.

Symphony will not go public until it is profitable, says chief; Goldman-led messaging platform has attracted investment from other big banks
Laura Noonan and Eva Szalay – FT
The Goldman Sachs-led messaging platform Symphony, created to wean traders off Bloomberg’s chat function, will not go public until it is profitable, chief executive David Gurle told the Financial Times, outlining a timetable that rules out a listing until late 2021.

Companies urged to bolster infrastructure cyber defences; Experts say critical facilities present attractive targets for hackers
Hannah Murphy – FT
Hackers have traditionally focused their attention on computer software, resulting in a mushrooming of cyber security companies that promise protections for office-based clients.

A hacker’s paradise? 5G and cyber security; Internet-connected devices using fifth-generation mobile networks offer prime targets for criminals
Nick Huber – FT
The rollout of fifth-generation mobile networks — which offer the potential for downloads speeds of up to 10 times faster than today’s — will change how we communicate, work and stream video.

Does cyber security cross the line when crossing borders? Wider use of technology to screen travellers raises privacy and safety concerns
Siddarth Shrikanth – FT
Potential visitors to the US were recently confronted with a new requirement on the long and complicated visa application form — to provide information about their social media identities.

Hybrid warfare: the new face of global competition; Businesses and governments targeted by cyber attacks, subversion and espionage
Scott Tait – FT
It is alternatively called “grey zone” conflict and is in the news almost daily. Yet the main focus to-date of “hybrid warfare” — which uses non-military means to achieve warlike ends — has predominantly been on tactical methods such as cyber attacks, fake news campaigns and espionage. But understanding hybrid warfare’s strategic context equips political and business leaders better to address it.

US private equity group to buy Sophos for £3.1bn; Latest in a wave of investments by software-focused buyout group Thoma Bravo
Philip Georgiadis – FT
US private equity group Thoma Bravo has agreed to buy Sophos in a deal which values the British cyber security group at £3.1bn including net debt.The deal is the latest in a wave of investments by the software-focused American buyout group, which has made a series of aggressive bets in recent years, and its first outside of the US.

Sophos Becomes Latest U.K. Tech Target in $3.8 Billion Deal
Giles Turner and Kit Rees – Bloomberg
Sophos shares surge as much as 38% on cash buyout offer; Deal is the biggest takeover of a U.K. tech firm this year
Private equity firm Thoma Bravo agreed to buy Sophos Group Plc for $3.8 billion, taking the British cybersecurity firm private in the biggest takeover of a U.K. technology firm this year.

kACE partners with China’s Hangzhou Erayintong Software Limited to offer Electronic Distribution of FX Options in China
BCG Partners Inc.
kACE, a division of Fenics Software Limited, an entity within BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners,” “BGC” or the “Company”), a leading global brokerage and financial technology company, today announced it is partnering with Hangzhou Erayintong Software (“ERAYT”), a leading Chinese technology company providing front end distribution services to local bank branches, to offer FX Options solutions to the China market.

IHS Markit Acquires Novation Analytics
aftermarketNews Staff
IHS Markit, a world leader in critical information, analytics and solutions, recently announced the acquisition of Novation Analytics, a specialist provider of software solutions, data analysis and advisory services to the automotive industry. Novation Analytics focuses on the modeling of vehicle energy efficiency and CO2 emissions compliance. The team is based in Auburn Hills, Michigan, and headed by Greg Pannone and Heidi Schroeder.


Cryptocurrency Investors Get New IRS Income-Reporting Rules
Laura Davison and Allyson Versprille – Bloomberg
Tax guidance tells investors how to treat coin splits; IRS is increasingly enforcing tax rules for cryptocurrency
Cryptocurrency holders know more about what the Internal Revenue Service expects to see on their tax returns, thanks to new guidance from the agency.

SEC, CFTC, FinCEN Warn Crypto Industry to Follow US Banking Laws
Nikhilesh De – Coindesk
The heads of three U.S. financial regulators warned the cryptocurrency industry to abide by banking laws in a joint statement published Friday.

Bitcoin No Longer Seen as the Driving Force in Crypto Market
Brandon Kochkodin – Bloomberg
Indexica points to a growing cryptocurrency ecosystem; Moves spurred by competing coins, new blockchain technologies
Bitcoin has plunged more than 30% since hitting a year-to-date high. That fact is clear, but explaining why the world’s largest digital currency has lost momentum in the second half of the year is anything but.

Facebook’s Libra currency abandoned by major financial companies
Pete Schroeder, Shanti S Nair, Katie Paul – Retuers
Facebook Inc’s ambitious efforts to establish a global digital currency called Libra suffered severe setbacks on Friday, as major payment companies including Mastercard and Visa Inc quit the group behind the project.

U.S. Regulators Sue Crypto Startup Telegram Over Initial Coin Offering
Dave Michaels – WSJ
U.S. regulators sued a company that raised $1.7 billion through a cryptocurrency offering that became one of the largest such deals ever. The Securities and Exchange Commission on Friday said it obtained a legal order to halt Telegram Group Inc. from distributing its crypto asset, known as gram. Telegram, founded by two Russian brothers, developed a messaging app that is popular with cryptocurrency traders and developers.

There’s A New Question On Your 1040 As IRS Gets Serious About Cryptocurrency
Kelly Phillips Erb – Forbes
Days after the Internal Revenue Service (IRS) released two new pieces of guidance for taxpayers who engage in transactions involving virtual currency, the IRS announced another compliance measure: a checkbox on form 1040. The checkbox, which appears on the early release draft of the form 1040, asks taxpayers about financial interests in virtual currency.

Litecoin Turns 8 — Charlie Lee Says Foundation Not Near Bankruptcy
Marie Huillet – Cointelegraph
As Litecoin (LTC) celebrated its eighth birthday on Oct. 13, its founder Charlie Lee had to fend off crypto Twitter’s FUD — fear, uncertainty and doubt — about the altcoin. Lee’s original post was the exuberant announcement that: “Litecoin network has been up and running continuously for the past 8 years with zero downtime. And in that span of time, over $500,000,000,000 worth of LTC have been transacted. Looking forward to the next 8 years and more! “

G7 Evaluates Stablecoins as Risk to Global Financial Stability
David Pan – Coindesk
The world’s biggest economies are assessing stablecoins as a potential risk to the global financial system, according to a statement from the Financial Stability Board (FSB). In a letter to G20 finance ministers and central bank governors on Sunday, the FSB’s chair Randal Quarles said the G7 working group is delivering an assessment report on opportunities and challenges posed by global stablecoins.

Coinbase Eyes European Growth After Winning Irish E-Money License
William Foxley – Coindesk
Cryptocurrency exchange Coinbase has been granted an e-money license by the Central Bank of Ireland. Writing in a company blog Saturday, Coinbase UK CEO Zeeshan Feroz said the exchange is one of the very first firms to receive the license from the central bank, following a Dublin office opening a year ago. The license will also help open up EU and European Economic Area (EEA) markets for Coinbase customers, Feroz said.

Coinbase Eyes European Growth After Winning Irish E-Money License
William Foxley – Coindesk
Cryptocurrency exchange Coinbase has been granted an e-money license by the Central Bank of Ireland.

Kik Announces It’s ‘Here to Stay’ in Apparent Reversal of Fortunes
Marie Huillet – Cointelegraph
Canadian social media and messaging app Kik has revealed it’s “here to stay,” in an apparent reversal of earlier plans to shut down amid legal difficulties. In an official tweet posted on Oct. 13, the company announced: “Great news: Kik is here to stay!!!!AND there’s some really exciting plans for making the app even better. More details coming soon. Stay tuned.”


Russia looks at alternatives to dollar for energy transactions; Settling in roubles or euros would limit exposure to US, says economy minister
Max Seddon and Henry Foy – FT
Russia is exploring currency settlements in euros and roubles for its vast energy exports in an attempt to avoid the dollar and insulate Moscow from the US-led global financial system.

Russia cyber aggression fuels tensions with west; Experts say attacks have switched from information gathering to offensives and disruption
Michael Imeson – FT
Russian government-backed cyber aggression is heightening concerns from the west following a spate of high-profile incidents, prompting threats of countermeasures from the likes of Nato, the EU and UK.

Trump’s hailing of $50 billion in Chinese farm purchases seen as ‘meaningless’
Dominique Patton – Reuters
China is still a long way from forking out $50 billion for farm goods from the United States, agriculture industry analysts said on Monday, cautioning that getting there is contingent on removing substantial technical and political hurdles.

Coal Bankruptcies Pile Up as Utilities Embrace Gas, Renewables; Despite President Trump’s promise to boost coal, at least seven large coal producers have filed for bankruptcy since October 2018
Jonathan Randles – WSJ
More than half a dozen large U.S. coal companies have filed for bankruptcy in the past year, a signal that the one-time king of American energy is fading as it faces competition from cheap natural gas and renewable-energy sources while reckoning with the retirement of coal-fired power plants.

Elizabeth Warren’s Facebook ad proves the social media giant still has a politics problem
Kayla Epstein – The Washington Post
The campaign of Democratic presidential candidate Sen. Elizabeth Warren trolled Facebook on its own turf last week, stoking the debate about how aggressively the social media giant, whose massive reach was exploited during the 2016 elections, should tackle disinformation and political ads.

Billionaires Could Face Tax Rates Up to 97.5% Under Sanders
Rich Miller and Laura Davison – Bloomberg
Warren would levy taxes up to 62% on richest Americans; new model depicts how candidates would tax by income group. Billionaires may have much more to fear from a Bernie Sanders presidency than they do from an Elizabeth Warren administration, according to two economists advising both candidates.

Trump Has Real Reasons to Fixate Over the Stock Market
Lu Wang and Tatiana Darie – Bloomberg
Study finds a measurable tie between share returns and voting; ‘An opportunity for politicians to cater through this channel’
No president in modern history has followed the stock market more obsessively as a barometer of success than Donald Trump. You can see it in the dozens of tweets he’s sent referencing the Dow Jones Industrial Average, in the way every record is celebrated while lurches are pinned on the Democrats.

Trump’s Shameful Abandonment of the Kurds; The U.S. owes the Syrian Democratic Forces some loyalty for their fight against Islamic State.
Editorial Board – Bloomberg
“Turkey will soon be moving forward with its long-planned operation into Northern Syria,” the White House announced late Sunday. U.S. forces “will no longer be in the immediate area.” The Trump administration thus granted Turkey’s President Recep Tayyip Erdogan tacit permission to attack Kurdish forces in Syria — forces that have been vital U.S. allies in the fight against Islamic State.


CFTC Extends Public Comment Period for Proposed Rules Pertaining to Cross-Border Clearing
The U.S. Commodity Futures Trading Commission announced today that it is extending to November 18 the comment period for the proposal for an alternative compliance framework for derivatives clearing organizations (DCOs) organized outside of the United States that do not pose substantial risk to the U.S. financial system. Under the proposal, these DCOs would be able to register with the CFTC yet comply with the core principles applicable to DCOs in the Commodity Exchange Act through compliance with their home country regulatory regime, subject to certain conditions and limitations. The original comment period for the proposed rule was to expire on September 17.

Former FDIC head criticises financial company sold to Blackstone; Promontory’s business model ‘games’ deposit insurance rules, says Sheila Bair
Mark Vandevelde – FT
A former top US financial regulator has struck a multibillion-dollar deal with Blackstone to sell a company that helps savers obtain extra deposit insurance, in what one former bank supervisor called a way of “gaming” financial rules.

FCA assures ‘pragmatic approach’ to MiFID & EMIR reporting supervision as Brexit looms; Firms have been urged by the FCA to take reasonable steps to prepare with post-Brexit MiFID and EMIR reporting requirements.
Hayley McDowell – The Trade
The UK financial watchdog has said it will take a ‘pragmatic’ approach to the supervision of MiFID transaction reporting and EMIR trade reporting requirements upon the advent of Brexit.

ASIC ‘calls time’ on disclosure reliance
In a joint report published today, ASIC and the Dutch Authority for the Financial Markets (AFM) looked at the effectiveness of disclosure for financial products on consumer outcomes. The report covers a decade of case studies across a broad range of financial products and services in Australia, the Netherlands, the UK and the US. It finds that reliance on mandated disclosure and warnings has often proved ineffective, and at times even backfired contributing to more consumer harm.

SEC Halts Alleged $1.7 Billion Unregistered Digital Token Offering
The Securities and Exchange Commission today announced that it has filed an emergency action and obtained temporary restraining order against two offshore entities conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds.

SEC Educational Videos Aim to Help Investors Spot and Avoid Fraud
The SEC’s Office of Investor Education and Advocacy and Retail Strategy Task Force this week released new videos and Investor Alerts to help show investors what fraud looks like. Fraudsters will use every gimmick they can think of to get their hands on investors’ hard-earned money. These videos, along with our other investor education materials on, provide practical information that Main Street investors can use to avoid fraud and become empowered to make the best investment decisions possible for a strong financial future.

NFA announces webinars for Swaps Proficiency Requirements Administrators
NFA’s Swaps Proficiency Requirements will launch and become accessible online on January 31, 2020. For details regarding who must fulfill these requirements, see Notice to Members I-19-09.

Gabriel users share suggestions for our new data collection platform
Our online survey was completed by Gabriel users. The feedback will be used to improve the user experience.

Investing and Trading

Investors Pull Money Out of Stock Funds, Squeezing Money Managers; Pullback from stock funds set to weigh on firms’ third-quarter earnings
Dawn Lim – WSJ
Cautious investors pulled $60 billion out of stock funds in the third quarter, ratcheting up pressure on money managers. The net outflows accounted for the most money leaving stock funds in a quarter since 2009, according to Morningstar data on U.S. mutual funds and exchange-traded funds.

Lossmaking tech shares face rough ride as lock-up clauses expire; Lock-up periods for big newly-listed stocks including Uber expire before end of 2019
Richard Henderson – FT
Some of the biggest US tech stocks could be heading for a tough end to the year, as company insiders and pre-IPO investors get their first green light to start selling.

Goldman and Morgan Stanley expected to suffer IPO earnings hit; WeWork’s failed listing and weak investment banking likely to weigh in third quarter
Laura Noonan and Robert Armstrong – FT
Earnings expectations for Morgan Stanley and Goldman Sachs have been sharply pared back ahead of this week’s results, after a torrid run of stock market listings and a slowdown in M&A activity weighed on investment banking performance.

200% Stock Surge Makes Li Ning World’s Hottest Sportswear Firm
Richard Frost – Bloomberg
The hottest sportswear brand in the world right now — at least in the stock market — is a Chinese firm founded by former Olympic gymnast Li Ning.

Chinese Shoppers and Investors Are Losing Their Appetite for Gold
Bloomberg News
Consumption to drop in 2019 before stabilizing next year; Investors worried gold is ‘looking rich,’ Kavalis says
China’s shoppers and investors lost their appetite for gold this year — and there’s little expectation of any major improvement in 2020 as slowing growth and higher prices crimp consumer spending.

When God Is Your Portfolio Manager; Biblically responsible investing is booming, as some Christians move to match their faith with their stock buys
Jason Zweig – WSJ
What would Jesus buy? That question is spreading in the investing world, as evangelicals and other Christians seek investment management and financial planning to match their interpretation of biblical principles. The latest sign of the rise of faith-based investing was the launch of the Inspire International ESG exchange-traded fund on Sept. 30. Its ticker symbol? WWJD, short for the popular expression “What would Jesus do?”


HSBC plans First Direct relaunch to compete with digital rivals; New features could include in-app marketplace and automated savings top-ups
Nicholas Megaw – FT
HSBC is planning an overhaul of its First Direct brand to attract younger customers and compete with fast-growing new digital rivals such as Monzo.

Spying scandal weighs on Tidjane Thiam’s tenure at Credit Suisse; The share price has halved and reputations are at stake amid intrigue in Zurich
Patrick Jenkins – FT
When Tidjane Thiam arrived at the helm of Credit Suisse in the summer of 2015, he was a hero. Plucked from the same role at UK insurer Prudential, where he had doubled the share price in six years, he had big plans to shrink the Swiss group’s investment bank, slash costs, raise fresh capital and expand in Asia.

The Fed is extending its overnight funding operations through January 2020
Jeff Cox – CNBC
The Federal Reserve will be extending its temporary overnight repo operations through at least January. In addition, the central bank said it will be buying short-duration Treasury bills through at least the second quarter of 2020. Both announcements come as the Fed is looking to address issues in the short-term lending markets.

Michigan pension fund moves $600M out of Fisher Investments after offensive remarks
Crain’s Detroit Business
The State of Michigan Retirement Fund’s pension account, worth more than $70 billion, ended its relationship with the investment firm of Ken Fisher in the latest backlash to offensive remarks the billionaire made last week at an investment conference. Fisher has apologized for sexist and off-color remarks he made at the Tiburon CEO summit in San Francisco, but it hasn’t stopped the outrage.

Activists thought BlackRock, Vanguard found religion on climate change. Not anymore
Eric Rosenbaum – CNBC
BlackRock and Vanguard voted in 2017 to require Exxon Mobil to produce a climate change report. At the time many thought it would prove to be a major milestone in investor-led climate efforts, but the two giant money managers have voted in favor of few similar resolutions since. “We thought they had gotten religion on climate change,” said one climate investor. “That was a generous interpretation.”


Mysterious Stock Surge Produces Indonesia’s Newest Billionaire
Yoojung Lee – Bloomberg
Pollux Properti’s gain has boosted Nico Purnomo Po’s net worth; Some market observers say the stock’s rally is unjustified
Ask Nico Purnomo Po about the world-beating stock rally that turned him into Indonesia’s latest billionaire, and he’ll tell you the market is rewarding his property company’s ability to complete big projects in prime locations.

African Swine Fever Could Cut Philippines’ Ham Sales by $780 Million
Andreo Calonzo – Bloomberg
The ban imposed by Philippine provinces on pork products from the main Luzon island in response to African swine fever will cut processed meat sales by an estimated 40 billion pesos ($780 million) annually, an industry group said.

Korea’s Top Hedge Fund Freezes $710 Million As Investors Try to Withdraw
Heejin Kim -Bloomberg
Lime’s CEO and CIO explain fund freeze to reporters Monday; Firm said it suspended withdrawals from more funds on Monday
Lime Asset Management Co., South Korea’s largest hedge fund with about $4 billion of assets, suspended withdrawals from more funds on Monday, freezing a total of $710 million of its portfolio, after the firm said last week it couldn’t sell assets fast enough to meet redemption demands.

Hong Kong’s Top Securities Regulator Alder to Step Down in 2020
Kiu Yan Wong – Bloomberg
Ashley Alder, chief executive officer of Hong Kong’s Securities and Futures Commission,? will step down after his appointment expires in September of next year.

The World Loses $400 Billion of Food Before It Reaches Stores
Agnieszka de Sousa – Bloomberg
Food wastage causes unnecessary pressure on environment: FAO
The world loses about $400 billion of food before it even gets delivered to stores, according to the United Nations.

Russia’s Pizza King Wants to Use the Cloud to Take Over the World; The founder of Dodo Pizza says it’s “half food and half tech”—and he wants to open another 1,000 restaurants in five years.
Ilya Khrennikov and Jake Rudnitsky – Bloomberg
Once you crack the profit code for delivering hot pizzas in the Arctic, where blocks of cheese arrive on nuclear icebreakers, expanding into more hospitable climes like Britain and Nigeria is as easy as pie.


Light at the end of the Brexit tunnel; Ireland’s support of Boris Johnson’s deal will make shifting no-deal blame harder for both sides
Wolfgang Münchau – FT
I concluded last week that there was a deal to be done or a gamble to be lost. Boris Johnson and Leo Varadkar decided to go for a deal. The meeting on Thursday between the British and Irish prime ministers was the first serious Brexit development since the UK parliament rejected Theresa May’s withdrawal deal for the third and final time in March.

Brexit Deal in Sight as Negotiators Wrestle With the Details
Ian Wishart – Bloomberg
Focus is on U.K. idea of aligning Northern Ireland to EU rules; Talks set to go on for three days before Oct. 31 exit deadline
The U.K. and European Union signaled a Brexit deal is in sight, with negotiators heading into intensive talks in Brussels as a potential compromise over the Irish border starts to emerge.

Brexit Cloud Hangs Over Energy Supplies From Dublin to Belfast
Olivia Konotey-Ahulu and Jeremy Hodges – Bloomberg
No-deal Brexit would leave energy market with uncertain future; Power supply would initially continue as usual after Brexit
The Irish border issue isn’t the only Brexit-induced headache the island is facing. How to keep the lights on in the long term is also far from resolved.

Avoiding Brexit Altogether Would Give U.K. $106 Billion Boost
David Goodman – Bloomberg
Corbyn’s Brexit stance better for economy than Johnson’s; Bloomberg Economics says the two scenarios are ‘worlds apart’
Remaining in the European Union could give the U.K. economy an 85 billion-pound ($106 billion) boost compared with a no-deal Brexit, according to Bloomberg Economics.


Secrets of the successful dual-career couples; How keeping your focus on long-term goals helps relationships thrive over decades
Emma Jacobs – FT
A constant challenge, is how Chris Bryant describes managing working and family life. Mr Bryant, an antitrust and competition lawyer, works three days a week at law firm Bryan Cave Leighton Paisner, and has two children with his partner, Catriona Stirling, a barrister on maternity leave.

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Past Newsletters

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