CME’s Hours-Long Trading Malfunction Halts Markets; Goldman Traders Had Most Losing Days in 7-yrs in Q4

Feb 27, 2019

First Read

Hits & Takes
JLN Staff

We have some big news here in Chicago today as the city is about to elect its first African-American female mayor after Lori Lightfoot, a former federal prosecutor, and Cook County Board President Toni Preckwinkle won the votes Tuesday to move to a runoff election in April. Bill Daley was a close third in a field of 14 candidates.~SR

There is a new docuseries coming to Amazon Prime from Adam McKay (of “The Big Short” fame) called “The Giant Beast That Is the Global Economy.” It’s hosted by Kal Penn.~SD

In a disturbing regional update, Pakistan claims to have shot down two Indian fighter jets over the disputed Kashmir border and captured an Indian pilot (some sources say two pilots, some don’t mention a pilot at all). The details are hazy but what is certain is that these are neighbors with nuclear weapons in an escalating dispute. ~SD


Women business leaders need to be respected more than liked
Andromachi Athanasopoulou – Financial Times
In her article, Viv Groskop discussed how women often must appear “likeable” in order to get ahead (February 15). She implied that women put their feminine leadership traits first to become likeable. However, in our study based on interviews with female chief executives we found that the reality is much more nuanced: women develop a unique leadership style whereby they feel comfortable and respected as leaders. Being likeable is just one — often unintended — aspect of this.

****Actress Emma Thompson’s letter about male-female work interactions and the #MeToo movement goes well with the above. ~SD


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You don’t need a PhD anymore to read Fed’s statements
Jason Lange – Reuters
The Fed’s policy statements grew so complicated after the recession that standard gauges of readability suggested people needed four years of university or more to understand them.
That is changing under the Fed’s new leadership, a Reuters analysis has found.
Since Fed Chairman Jerome Powell took the helm in February 2018, statements have grown less complex and opening remarks at the central bank’s news conferences have become easier to follow.

****Great timing! I was looking for some good beach reading for my next vacation. ~JB


Baseball Signs Deal Giving Sportradar Exclusive Data for Wagers
Eben Novy-Williams – Bloomberg
The Swiss firm will be middleman for international sportsbooks; Sportradar also has pact with National Basketball Association
Major League Baseball signed a multiyear contract authorizing Sportradar AG to sell its official data to bookmakers and media companies in the U.S. and abroad, staking a claim to an expected surge in legal sports betting.

****Big data and the need for speed – why does this sound familiar? From the article: “MLB has outfitted all 30 stadiums to capture as much data as possible on pitchers, batters, baserunners and fielders.”~SD


Tuesday’s Top Three
Tuesday’s top story thread was about the best and worst of us. The top item was the CFTC’s release In CFTC Action, Former Trader Krishna Mohan Admits to Engaging in Spoofing and Manipulative Scheme at a Proprietary Trading Firm. Second was the Vanity Fair piece Janet Yellen: Trump Is an Even Bigger Idiot Than He Looks. Third was Barron’s Who Are 2019’s Best Online Brokers?


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Lead Stories

Hours-Long Trading Malfunction Halts World’s Most Popular Markets
Keiko Ujikane and Min Jeong Lee – Bloomberg
A technical error at CME Group Inc forced the world’s biggest exchange operator to halt trading for about three hours, preventing the buying and selling of contracts tied to U.S. Treasuries, stock-futures and commodities.
The issue affected a slew of markets, from eurodollars to metals, grains, crude oil and natural gas. CME halted trade from 6:39 p.m. Central Time on Tuesday, with all contracts reopening at 9:45 p.m., according to a statement from the bourse.

Goldman Traders Had Most Losing Days in Seven Years Last Quarter
Sridhar Natarajan and Brandon Kochkodin – Bloomberg
The end of 2018 proved to be a rough one for Wall Street. Goldman Sachs Group Inc. just showed how bad it got.
The bank’s traders posted losses on at least 19 days in the last quarter of the year, including a day where losses approached almost $100 million, according to its annual regulatory disclosure. It was the worst showing for the bank by that measure since 2011, according to filing data reviewed by Bloomberg.

Top banks’ commodities revenue jumps 45 percent in 2018: report
Commodities-related revenue at the 12 biggest investment banks climbed 45 percent last year despite weak oil trading, boosted by power, gas and base metals markets, consultancy Coalition said on Wednesday.

Cost pressures could see 20% of buy-side outsource trading desks by 2020
Hayley McDowell – The Trade
Front office outsourcing is expected to surge over the next couple of years, as asset managers struggle to keep on top of regulatory and cost pressures according to new research. A study carried out by consultancy Opimas on the outsourcing trend predicted that by 2020, around 20% of investment managers with assets under management greater than $50 billion will outsource at least some portion of their trading desks.

Banks Sure Don’t Look as If They Need Relief From Dodd-Frank
Mark Whitehouse – Bloomberg
To hear bankers or the Trump administration tell it, the Dodd-Frank financial reform passed after the 2008 credit crisis has weighed heavily on the industry and the economy. Banks struggle under thousands of pages of regulations. They need relief.
Plausible as that might seem, it’s hard to reconcile with the data on banks’ actual performance.

Some Bankers Are Doing Even Worse Than in 2009
Chris Hughes – Bloomberg
It may not feel like it, but some corners of banking are suffering as badly as they did during the depths of the financial crisis. Global volumes of initial public offerings and share placings in January and February have been nearly 60 percent lower than in the same period last year. The numbers are worse than the first two months of 2009. If activity doesn’t pick up soon, it would be worrying evidence of the fragility of investor sentiment.

JPMorgan keeps key profit goal, cautious on U.S. recession risks
Elizabeth Dilts and David Henry – Reuters
JPMorgan Chase & Co, the biggest U.S. bank by assets, said on Tuesday it expects to face rising costs for deposits, a key part of its business, and slowing global economic growth.
Still, senior executives, speaking at the bank’s annual investor day, painted a picture of stable financial performance and maintained a key profit goal for the next three years.

Fed Chairman Jerome Powell to Testify Further on Rates, Regulation
Nick Timiraos – WSJ
Federal Reserve Chairman Jerome Powell returns to Capitol Hill on Wednesday for a second day of testimony about the U.S. economy, interest-rate policy and financial regulation.

Bundesbank Hedges Against Higher Rates Even as Outlook Weakens
Carolynn Look – Bloomberg
Germany’s central bank continued raising risk provisions to prepare for higher interest rates even as the prospect of an increase seems to have diminished amid the euro area’s worsening economic outlook.

SALT Cap Will Leave Nearly 10.9 Million People Feeling Tax Pain
Laura Davison – Bloomberg
About 10.9 million people are losing out on one of their most prized tax breaks — the deduction for state and local taxes.
That’s the number of people the Treasury Inspector General for Tax Administration estimates had tax bills above the $10,000 deduction cap included in the 2017 tax overhaul. The law limited the amount of state and local taxes — or SALT — that taxpayers can write off, a change most acutely felt in high-tax states including New York, New Jersey, Maryland and California, where tax bills can easily exceed the threshold.

MarketAxess gains approval for Dutch operation
Hayley McDowell – The Trade
Fixed income trading specialist MarketAxess has been given the green light by Dutch authorities to operate its trading platform and reporting services in Amsterdam.

Exchanges, OTC and Clearing

Sustainability pays off. Eurex is the first exchange to offer sustainable ESG futures.
The importance of so-called ESG (Environmental, Social, and Governance) information is constantly increasing, because sustainable investing is becoming more and more important and interesting for investors worldwide. The European market for sustainable indices is continuing to grow strongly. Globally, there were 22.89 Trillion USD of assets being professionally managed under responsible investment strategies in 2016, an increase of 25 percent since 2014. In relative terms, responsible investment now stands at 26 percent of all professionally managed assets globally. Clearly, sustainable investing constitutes a major force across global financial markets.

Bourse operator Hong Kong Exchanges and Clearing reports record net profit of HK$9.3 billion, beats estimates
Enoch Yiu – South China Morning Post
Hong Kong Exchanges and Clearing, which operates the Hong Kong stock exchange, the third-largest bourse in Asia, on Wednesday reported a record net profit of HK$9.3 billion (US$1.18 billion) for last year, an increase of 26 per cent over 2017.

London Stock Exchange leads $20 million round in cap markets blockchain startup
Other investors in the round include Santander InnoVentures, law firms Linklaters and Orrick, Aegon’s Transamerica Ventures, MiddleGame Ventures, Digital Currency Group, and Spencer Lake, formerly head of global markets at HSBC.

Release of fourth edition of the ASX Corporate Governance Principles and Recommendations
The final version of the fourth edition maintains the same flexible, non-mandatory ‘if not, why not’ approach to disclosure as in earlier editions. It also has the same structure – eight core principles, supporting recommendations, and commentary with guidance on implementing the recommendations.

Performance Bond Requirements: Interest Rate Margins – Effective February 27, 2019

Arcure joins Euronext Growth Paris
Euronext today welcomed Arcure, a company that harnesses artificial intelligence to create customised image processing solutions for industry, to its Euronext Growth market.


Sofi invested in Apex after failing to acquire it
Dan DeFrancesco and Dakin Campbell – Business Insider
Lending startup SoFi was in late-stage talks to acquire a fintech backing some of the industry’s top robo advisors in an attempt to grow its digital wealth platform, Business Insider has learned.
The $4 billion San Francisco-based fintech firm held discussions in recent months to buy Apex Clearing, a custody and clearing firm that services fintechs like Betterment and Stash, but deal talks fell through, according to people familiar with the matter. Acquiring Apex would have helped SoFi continue to grow beyond its lending roots to become a personal finance hub for managing people’s money across the board.

SoFi Isn’t Aiming at an IPO This Year, CEO Says
Ben Walsh – Barron’s
SoFi, the fintech startup that is valued at more than $4 billion, isn’t likely to be joining the public markets any time soon.
An initial public offering isn’t a priority for the company in 2019, chief executive Anthony Noto told reporters on Tuesday morning. Noto emphasized that it remains the company’s long-term goal to go public.

****SoFi has made news multiple time these last few weeks – first for launching a commission-free brokerage, and then for launching zero-fee ETFs.~SD

Thomson Reuters posts earnings beat, hunts for acquisitions
Matt Scuffham – Reuters
Thomson Reuters reported better-than-expected earnings on Tuesday, helping push its shares to a record high, and said it is continuing to look for acquisitions to bolster its Legal and Tax & Accounting units, where demand is up in part because of U.S. tax reforms.


Coinbase responds to its controversial acquisition of blockchain intelligence platform Neutrino
Steven Zheng and Frank Chaparro – The Block
Coinbase, one of the largest crypto firms, is speaking out about the fiery debate it ignited over a recent acquisition.
The firm earlier this month snapped up Neutrino, an Italy-based company founded in 2016 led by Giancarlo Russo, Marco Valleri, and Alberto Ornaghi.

Blockchain’s `Irrelevant’ in Plan to Automate Investment Banking
Justina Lee – Bloomberg
Nivaura raises $20 million; Santander, Aegon among fundersl Financial firms keep toe in new tech that may use blockchain
The London fintech firm behind the first regulated cryptocurrency bond is attracting investors to help it automate capital markets without using the blockchain — for now.

SoFi to launch cryptocurrency trading in partnership with Coinbase
Kate Rooney – CNBC
Online finance start-up SoFi is moving into cryptocurrency. The San Francisco-based company will allow users to buy digital currencies through a partnership with popular exchange Coinbase, SoFi announced on Tuesday. The crypto capability will be available to SoFi users in the second quarter of this year.

Jamie Dimon says JP Morgan’s new cryptocurrency could one day be used by the consumer
Hugh Son – CNBC
Jamie Dimon hinted at J.P. Morgan Chase’s annual investor day that the bank’s new cryptocurrency could one day be used for retail payments. “JP Morgan Coin could be internal, could be commercial, it could one day be consumer,” Dimon, 62, said during a question-and-answer session.

Bolivars to Bitcoin: Activists Take Down Venezuela’s Maduro in Crypto Art Exhibit
Bailey Reutzel – Coindesk
Venezuelan president Nicolas Maduro will be taken down today. At least his visage, painted on 1,000 bolivars by cryptocurrency-focused artist cryptograffiti, will be. The destruction of the artist’s newest piece – an 11-foot by 10-foot portrait of the Venezuelan leader – will happen in Cucuta, Colombia, about 500 yards from the Simon Bolivar Bridge, a landmark hundreds of thousands of Venezuelans have walked across to escape the poverty of their home country.

Swiss Watchdog Continues War on Unregistered Crypto Brokers
Aziz Abdel-Qader – Finance Magnates
Fraudulent cryptocurrency brokers which promise to offer related investment or trading products are on the rise in Switzerland, and the country’s watchdog is putting investors on alert. FINMA, the Swiss Financial Market Supervisory Authority, today named Crypto Capitals as one of companies that are suspected of conducting unauthorized activities in the country’s financial markets.

Julius Baer gets into crypto banking with SEBA partnership
Brenna Hughes Neghaiwi – Reuters
Julius Baer plans to offer access to digital assets through a partnership with Swiss start-up SEBA Crypto in the latest move into cryptocurrencies by a Swiss private bank.

Blockchain-for-Banks Startup Switches From Hyperledger to R3’s Corda
Ian Allison – Coindesk
MonetaGo, a software development company that builds private blockchains for financial institutions and central banks, has decided to change its underlying architecture from Hyperledger Fabric to R3’s Corda platform.

Widow of QuadrigaCX CEO Denies Hiding Assets from Crypto Creditors
Nikhilesh De – Coindesk
Jennifer Robertson, widow of QuadrigaCX CEO Gerald Cotten, asked a judge to put a restructuring specialist in charge at the failed crypto exchange, saying her management role has brought unwanted public attention.

Cryptocurrencies Await Four Key Developments
Aaron Brown – Bloomberg
The market for cryptocurrencies has gotten off to a lackluster start this year, with the Bloomberg Galaxy Crypto Index up just 3.50 percent through Monday, versus 11.5 percent for the S&P 500 Index. Four scheduled events in the rest of 2019 should help determine what comes next for digital currencies.

Hacked Exchange Cryptopia Discloses Estimate of Stolen Crypto
Yogita Khatri – Coindesk
New Zealand-based cryptocurrency exchange Cryptopia has given an idea of the losses arising from a hack on its platform last month.
After being almost silent since the breach, the firm published a series of updates via Twitter on Wednesday. Most notably, Cryptopia provided an update on how much of the total assets held by the platform was lost in the cyber-attack, saying:

Sony, Fujitsu Aim to Make Educational Data ‘Unfalsifiable’ With Blockchain
Daniel Palmer – Coindesk
Two Japanese tech giants have teamed up on an initiative using blockchain to provide educational records that cannot be faked.
Announced by Sony on Wednesday, Sony Global Education, Fujitsu Ltd. and the Fujitsu Research Institute have launched a field trial to evaluate the utility of blockchain tech in the management of course records and exam grades. Also collaborating on the trial is Human Academy, an educational institution that serves foreign students.


Credit reporting agencies face pressure from skeptical U.S. Congress
Pete Schroeder – Reuters
The nation’s major credit reporting agencies faced renewed scrutiny from Congress on Tuesday, as lawmakers consider legislation overhauling the industry.

U.S. Cyber Command operation disrupted Internet access of Russian troll factory on day of 2018 midterms
Ellen Nakashima – Washington Post
The U.S. military blocked Internet access to an infamous Russian entity seeking to sow discord among Americans during the 2018 midterms, several U.S. officials said, a warning that the Kremlin’s operations against the United States are not cost-free.

Jerome Powell Says the Concept of MMT Is ‘Just Wrong’
Liz McCormick – Bloomberg
Blasts idea that dollar’s status means deficits are irrelevant
Joins former New York Fed chief Dudley pushing back on theory
Jerome Powell just ripped proponents of modern monetary theory and threw cold water on the idea that the Federal Reserve would ever help out combating the impact of spiraling deficits by keeping interest rates low.


Musk Lays Into SEC With More Tweets After U.S. Contempt Claim
Elisabeth Behrmann – Bloomberg
Elon Musk kept up his attack on the U.S. Securities and Exchange Commission on Twitter, even after landing in more regulatory trouble with potential penalties that at worst could see him being barred from running Tesla Inc.

Government Probes Fidelity Over Obscure Mutual-Fund Fees
Gretchen Morgenson – WSJ
The Labor Department is investigating Fidelity Investments over an obscure and confidential fee it imposes on some mutual funds, according to a person familiar with the inquiry.

ESMA Chair Maijoor’s Keynote On Crypto-Assets
ESMA Chair Steven Maijoor delivered today a keynote speech at the FinTech Conference 2019 – FinTech and Regulation – in Brussels. The keynote dealt with crypto-assets: time to deliver.

SEC Halts South Florida Alternative Investments Scheme Targeting Retail Investors
The Securities and Exchange Commission today announced fraud charges and an asset freeze against the operators of a South Florida-based investment fund scheme, one of whom has a prior felony conviction and is on parole after nearly 20 years in prison.

CFTC to Hold an Open Commission Meeting on March 7, 2019
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced today that the CFTC will hold an open meeting on Thursday, March 7, 2019, at 10:00 a.m.

Brent J. Fields Named Associate Director In The Division Of Investment Management
The Securities and Exchange Commission today announced that Brent J. Fields has been named Associate Director of Disclosure Review and Accounting in the Division of Investment Management.

SEC Names S.P. Kothari as Chief Economist and Director of the Division of Economic and Risk Analysis
The Securities and Exchange Commission today announced that S.P. Kothari has been named Chief Economist and Director of the agency’s Division of Economic and Risk Analysis (DERA). Dr. Chyhe Becker, who has served as DERA’s Acting Director while the SEC completed its search, will continue to serve both as Deputy Director and Associate Director of Litigation Economics.

Press Release SEC Names Vanessa Countryman Acting Secretary
The Securities and Exchange Commission today announced that Vanessa Countryman has been named Acting Secretary. Ms. Countryman will replace Brent Fields, who is stepping down as Secretary effective March 11, 2019, to accept a position in the Commission’s Division of Investment Management.

Hong Kong’s Securities And Futures Commission Suspends CMS’s Former Responsible Officer Wu Yinong For 18 Months
Press Release
The Securities and Futures Commission (SFC) has suspended the licence of Mr Wu Yinong, a former responsible officer (RO) of China Merchants Securities (HK) Co., Limited (CMS), for 18 months from 25 February 2019 to 24 August 2020 for breaching the SFC’s Code of Conduct and the Sponsor Guidelines (Notes 1, 2 & 3).

ESMA Publishes Responses To Its Consultation On Reporting Guidelines Under The MMF Regulation
The European Securities and Markets Authority (ESMA) has published the responses received to its Consultation on draft guidelines on the reporting to competent authorities under article 37 of the MMF Regulation.

Keynote address at Group of 100 Dinner
Keynote address by John Price, Commissioner, Australian Securities and Investments Commission at the G100 dinner, (Melbourne, Australia) 26 February 2019

Investing and Trading

Positively Negative: Stock-Bond Correlation and Its Implications for Investors
DE Shaw & Co.
One of the most important shifts in the investment landscape over the past two decades has been the emergence of a negative correlation between stock and bond returns. This shift has transformed the basic hedging properties of bonds, giving them a more substantial role in the construction of efficient, diversified portfolios for investors

Citadel’s Ken Griffin forecasts more market volatility in 2019
Lindsay Fortado – Financial Times
Ken Griffin, the billionaire founder of the hedge fund Citadel, says he is optimistic about creating lucrative trading opportunities amid what he expects to be a continuation of the heightened volatility that whipsawed financial markets last year.

Commodities Are Good News for Banks Again as Revenues Rebound
Nicholas Larkin – Bloomberg
Commodities revenues at major investment banks have finally picked up.
Combined income at 12 top banks including Goldman Sachs Group Inc. and Citigroup Inc. climbed 45 percent to $3.6 billion last year, according to analytics firm Coalition Development Ltd. That marks a turnaround after three years of worsening results driven by increased regulatory scrutiny, curbs on proprietary trading and reduced investment by hedge funds.

Citigroup Warns Global Economy More Vulnerable to U.S. Slump
Simon Kennedy – Bloomberg
Study published after Goldman said U.S. threatened by world; Citi sees Argentina, Mexico, Canada among the most exposed
A sudden slowdown in the U.S. economy would infect global growth and the impact would be bigger than before the financial crisis, according to Citigroup Inc.


Goldman warns legal losses could be $1.9bn more than expected
Nell Mackenzie – Financial News London
Goldman Sachs has warned that ongoing lawsuits, including cases related to the 1MDB fraud, could cost the bank up to $1.9bn more than it has already planned for.

Svenska Handelsbanken Uses Other Banks’ Misery to Its Advantage
Frances Schwartzkopff and Niklas Magnusson – Bloomberg
One Swedish bank is making hay from its lack of a major presence in the Baltics as a money-laundering scandal sweeps the Nordic region.
Svenska Handelsbanken AB, Sweden’s biggest lender by assets, is trying to get investors to buy its riskiest bonds by making sure they’re aware it does very little business in Estonia, Latvia and Lithuania. The bank sold $500 million in additional Tier 1 notes this month with a promise that creditors would face “negligible Baltics exposure.”

Investment bank research teams suffer deepest job cuts
Paul Clarke – Financial News
Investment banks’ research divisions were the hardest hit by job cuts last year, as sweeping European trading regulations introduced in January 2018 started to impact analyst numbers.

Germany Agrees to Extend Weidmann’s Term as Bundesbank Chief
Birgit Jennen – Bloomberg
German Chancellor Angela Merkel’s cabinet agreed to extend Jens Weidmann’s term as head of the Bundesbank by another eight years from May as he waits to see if he is picked later this year for the top job at the European Central Bank.

Piper Jaffray Companies Agrees to Acquire Weeden & Co., L.P.
Piper Jaffray Companies, a leading investment bank and asset management firm, today announced that it has reached a definitive agreement to acquire 100% of Weeden & Co., L.P. (“Weeden & Co.”), a broker-dealer focused on providing institutional clients with premier execution services. Upon closing, Weeden & Co. will convert to and operate as Piper Jaffray & Co.

INTL FCStone Inc. Announces New Three-Year Credit Facility
INTL FCStone Inc. today announced that it has agreed to amend its existing $262 million senior secured credit facility, to extend the maturity through February 2022 and to increase the size of the facility to $350 million. The amended facility is comprised of a $175 million revolving credit facility and a $175 million Term Loan A facility. This credit facility will continue to be used to finance working capital needs of INTL FCStone Inc. and certain of its subsidiaries.

Saxo Bank marks 138% increase in net profit in 2018
Maria Nikolova – FinanceFeeds
Saxo Bank reports a record profit of DKK 955.8 million for 2018 following the sale of its shareholding in Saxo Payments.

Ally Bank Coaxes Consumers to Look at Rivals’ Lousy Online Ratings
Steve Cocheo – The Financial Brand
Americans consult online ratings and reviews for just about everything. Except, apparently, who to bank with.That’s the conclusion Ally reached following a study the bank commissioned examining how people select their banking provider. The scrappy online bank has launched a multi-media marketing push predicated on the findings of its research. Ally is provoking a change in people’s how people shop for financial services with a campaign that emphasizes humor and consumer choice, encourage people to do a more thorough job evaluating their options when it comes to banking providers.

Paul Volcker on Conflicts, Ethics, and the US Banking Industry
Mike Mayo, Wells Fargo – CFA Institute Enterprising Investor Blog
In his recent memoir, Keeping At It, Paul Volcker gave me greater perspective on the trials and tribulations of leading the US Federal Reserve and pursuing public policy. That’s hardly a surprise. Few public servants over the last several generations can rival Volcker’s breadth of experience or knowledge. After all, this is the man who stared down the stagflation of the late 1970s and ushered in the so-called “Volcker recession.” He doubled interest rates to put the squeeze on runaway inflation, thus laying the foundation for the last four decades of price stability — talk about civic duty and toughness!


How to Make 19,267% in China and Lose It All in 24 Hours
Michael Patterson – Bloomberg
Even by the boom-bust standards of China, the moves are incredible: gains as large as 19,267 percent in one trading session, a near-complete wipeout in the next. Welcome to the country’s options market, where outsized swings are par for the course and trading has never been more feverish. As volatility in Chinese stocks soars, some brave speculators are using options to magnify their bets.

Saudi Aramco adds Goldman Sachs as bookrunner for planned bond – sources
Reuters – DUBAI
Saudi Aramco has added U.S. investment bank Goldman Sachs as a bookrunner for a planned bond which it will use to help finance its acquisition of a stake in Saudi Arabian Basic Industries Corp (SABIC) , two sources familiar with the matter told Reuters.
The bank flew out a team of senior executives including partner Dina Powell, a veteran of the administration of U.S. President Donald Trump, to pitch for the deal, the sources said.

Norway’s $1 Trillion Fund Loaded Up on Stocks Amid Rout
Sveinung Sleire – Bloomberg
Norway’s $1 trillion sovereign wealth fund bought a net $22 billion in equities at the end of 2018 and continued to make “significant” purchases at the start of this year to take advantage of a market rout as it builds its global holdings.

How Zimbabwe caught the world off guard with another new currency
Chris Muronzi – Quartz
When Zimbabwe’s central bank chief John Mangudya announced his monetary policy last week, the majority of Zimbabweans did not expect major policy interventions and shocks.

China Opens to Foreign Credit Raters to Boost Bond Credibility
Chris Anstey and Lianting Tu – Bloomberg
This should be a great time to get into the credit analysis business in China. Policymakers in what will soon be the world’s second-largest bond market are inviting more international investors to pile in. And there should be plenty of demand for guidance now that authorities are allowing a record number of borrowers to default—a big change from just a few years ago. Yet foreign ratings companies may find China a tricky market to assess.

This Trillion-Dollar City Doesn’t Know How Rich It Is
Hong Kong is rolling in fiscal reserves and budget surpluses. It also faces questions over its long-term financial future.
Andy Mukherjee – Bloomberg
Hong Kongers want their government to loosen its purse strings. The city has shortages of doctors and housing, leaving families with long waits for medical appointments and fueling anxiety over the world’s most expensive home prices. Students fret for their future, unsatisfied with an administration that pays their examination fees for secondary school diplomas though appears reluctant to guarantee more basic needs.

Citgo formally cuts ties with Venezuela-based parent company: sources
Marianna Parraga – Reuters
U.S. refiner Citgo Petroleum Corp is formally cutting ties with its parent, state-run oil firm Petroleos de Venezuela SA, to meet U.S. sanctions imposed on the OPEC country, two people close to the decision told Reuters on Tuesday.


Implications for Business and Trade of a No Deal Exit on 29 March 2019
Her Majesty’s Government
The Government’s primary aim is to ensure that the UK leaves the EU on 29 March with a negotiated deal which will honour the result of the referendum. However, as a responsible government, it continues to plan for all eventualities, including one in which the UK leaves the EU without a deal.

Brexit Shadow Turns Art Collectors Into Currency Traders
Katya Kazakina – Bloomberg
With a parade of Monets, Picassos and Basquiats heading to the auction block in London during the next two weeks, art collectors are keeping a keen eye on the daily drama over Brexit and currencies.
Christie’s, Sotheby’s and Phillips are offering as much as 700 million pounds ($927 million) of Impressionist, modern, postwar and contemporary art, in the first big test of the market this year.

A second Brexit referendum is now essential
Martin Wolf – Financial Times
Theresa May’s aim is to convert fear of a no-deal Brexit into acceptance of her bad deal, which would leave the UK at the EU’s mercy. In the end, the rhetoric about “taking back control” has come down to a choice between suicide and vassalage. This march of folly needs to be stopped, for the UK’s sake and Europe’s. The only politically acceptable way to do this is via another referendum. That is risky. But it would be better than sure disaster.
Let us count the ways in which what is now happening is quite insane.

City of London Faces New Hurdles to EU Markets After Brexit
Alexander Weber – Bloomberg
U.K. financial firms were dealt a blow after European Union policy makers agreed to tighten the rules governing the City of London’s access to the bloc after Brexit.
Under a deal reached late Tuesday, the European Commission will gain greater powers in determining who will be given access to EU clients.


The bank CEO who’s learning how to code in Python
Thierry Iochem – eFinancialCareers
Should you learn to code in Python if you want to keep your job in banking? If SocGen CEO Frédéric Oudéa is anything to go by, the answer is yes. Oudéa himself has been learning to code in Python for the past two years, alongside his day job running one of France’s largest banks.

Money Managers Get Break for Plane Purchases in Trump Tax Law
Lynnley Browning – Bloomberg
Wall Street money managers love to purchase fancy airplanes.
Thrive Capital Management, the venture capital firm run by Jared Kushner’s brother Joshua, bought a used Bombardier Challenger 300 earlier this year. Hedge fund manager Harsh Padia bought a used Bombardier Global Express last spring. Lincoln Avenue Capital, a real estate fund founded as an affiliate of the Matthew Bronfman family office, bought and registered a used Bombardier 600 just days before Christmas.

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