Crypto Exchange Kraken Is Laying Off 57 Employees

Sep 7, 2018

Crypto Exchange Kraken Is Laying Off 57 Employees

Sep 7, 2018

First Read

Hits & Takes
JLN Staff

AFM Chairman Pat Kenny asked me to plug the AFM Autumn Workshop, Current Technologies and Market Trends, in London on September 12, 2018. The workshop will look at the impact that blockchain and cryptocurrencies are making in established markets and processes. Registration is HERE.~JJL

I really liked Tim McCourt’s message from his MarketsWiki Education World of Opportunity presentation: always keep learning. Nice job, Tim. Thank you for participating.~JJL

Cumberland, part of DRW, has done a rebranding.~JJL

FINRA has published an article, “Here’s How to Avoid Crypto Stock Scams.~JJL

Yesterday’s top story about TT included a piece on something called position transfer. If you don’t know what that is, it’s worth a read.~JK

Free online broker Robinhood is going public. The firm is valued at $5.6 billion currently. TD Ameritrade’s market cap is $31.8 billion; Charles Schwab’s is $66.8 billion.~JK

Recent reports that Goldman Sachs is pulling back on plans to launch a bitcoin trading desk are being called “fake news” by CFO Martin Chavez. The so-called fake news pulled crypto prices down in recent days.~JK

FIA played cricket for vs ISDA in London on Tuesday and raised money for Futures For Kids. FIA won. FIA is now my favorite cricket team. Where do I get an FIA cricket jersey in double extra large tall?~JJL

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IFM

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MWE World of Opportunity – Rules for CEOs, Senior Managers, Interns and Bob’s Kids

JohnLothianNews.com
“Understand the implications, the ramifications of what you do – what it does downstream and what it does upstream. Understand the whole process.”

What do “Patton,” “The Right Stuff” and “Goodfellas” have in common? They’re all used by Bob Fitzsimmons, executive price president at Wedbush Securities, to illustrate commonsense, but not necessarily common, rules to live by.
Watch the video here »

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Charity Honors Big-Hearted New Yorker Lost on 9/11
MarketVoice
While memories of 9/11 have faded for some, there are many people within the New York financial community who continue to dedicate their time and energy to honoring the victims of those attacks. One example is a charity formed by a group of traders and brokers in honor of Bill Micciulli, a good friend who lost his life that day. Micciulli, a 30-year-old trader with a wife and two young daughters, worked at Cantor Fitzgerald, the brokerage that occupied several floors high up in the World Trade Center, and lost his life when the towers collapsed.
/jlne.ws/2wRHRvu

****** There are a lot of big hearts in New York.~JJL

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The Regrets of Lewis Ranieri; The father of mortgage-backed securities lives with remorse for his role in the housing crisis
Cezary Podkul – WSJ
When Lewis Ranieri invented mortgage bonds, he never thought it would turn out this way. Four decades ago, Mr. Ranieri was at the helm of a revolution in how Americans finance their homes. Until then, mortgages largely stayed on the books of local savings banks. Mr. Ranieri created a secondary market that packaged mortgages into securities sold to investors.
/jlne.ws/2Nnk0gO

****** Learn from your mistakes and move on. There is no looking back, only forward.~JJL

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The crypto periodic table (sigh)
Jemima Kelly – FT
We’ve written before about how Imperial College London — considered to be one of the world’s top ten universities — has been getting into crypto of late, and not in the most nuanced way. Now another of its academics, Andrei Kirlienko, who is director of the Centre for Global Finance and Technology at the Business School, has produced some more Imperial-branded crypto nonsense of note. Dr Kirlienko has come up with a “periodic table” (full-size here) which “maps the potential returns and the likelihood of these cryptos being adopted”. He charts four groups:
/jlne.ws/2MY50X8

****** This is CuTe.~JJL

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If you bought at the top of the crypto bubble, here’s how much you’ve lost
Kate Rooney – CNBC Markets
Those who bought cryptocurrency at the start of 2017 likely felt pretty savvy in December. But if you bought late last year, that’s certainly not the case today.
/goo.gl/zUsjB2

***** Two calculations you never do: How much have I lost on bitcoin and how much does it cost me to own my boat.~JJL

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Thursday’s Top Three
Yesterday’s top stories were led by Jim Kharouf’s column on Trading Technologies and a blog from TT’s Rick Lane on X_TRADER. The JLN piece topped all stories with X_TRADER Transformed The Industry: Now It’s Time To Do It Again. Second went to Lane’s The End of an Era: X_TRADER’s Final Sunset. Third was the Wall Street Journal video Warren Buffett Explains the 2008 Financial Crisis

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MarketsWiki Stats
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MarketsWiki Statistics

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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.

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Lead Stories

Crypto Exchange Kraken Is Laying Off 57 Employees
Camila Russo – Bloomberg
CEO says 57 client services group members are being laid off; Company still expects to have over 1,000 employees by year-end. Kraken, one of the largest cryptocurrency exchanges, is laying off 57 North America-based employees, according to Chief Executive Officer Jesse Powell. The move represents roughly 10 percent of San Francisco-based Kraken’s client services team, Powell said in an emailed response to questions after speculation surfaced on social media platform Reddit that Kraken employees were laid off because of a security breach. The thread also mentioned the exchange was reducing staff after trading volumes had dropped.
/jlne.ws/2MWgNFE

Goldman Sachs CFO says bank is working on bitcoin derivative for clients
Kate Rooney – CNBC
A top Goldman Sachs executive looked to clear the air Thursday about the bank’s cryptocurrency ambitions after reports that it was abandoning plans to open a trading desk for cryptocurrencies.
/goo.gl/CVSXgE

Danske Bank Money-Laundering Probe Involves $150 Billion of Transactions; Transactions uncovered at the bank’s Estonian branch highlight the growing concern about illicit money flows from the former Soviet Union
Bradley Hope, Drew Hinshaw and Patricia Kowsmann – WSJ
Investigators at Denmark’s largest bank are studying around $150 billion of transactions that flowed through its Estonian outpost between 2007 and 2015 as part of an internal money-laundering probe, according to people familiar with the matter.
/jlne.ws/2wSt9n5

The World Federation of Exchanges calls for global reform of Leverage Ratio
WFE
The World Federation of Exchanges (“WFE”) published its response to the four global standard-setting boards assessing the effectiveness of incentives to centrally clear over-the-counter (OTC) derivatives. The WFE calls for prompt and concerted action internationally to address issues confirmed in the August 2018 consultation paper from ‘the Committees’: the Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI), the Financial Stability Board (FSB) and the International Organization of Securities Commissions (IOSCO).
/jlne.ws/2M1DUcx

EU Brexit Plan for Swaps Draws Fresh Warning From U.S. Regulator
Benjamin Bain and Patrick Henry – Bloomberg
CFTC chief rips proposal to expand oversight of clearinghouses; EU bill would allow continued oversight of U.K. firms
The U.S.’s top derivatives regulator is ratcheting up pressure on the European Union to scrap its plan to tighten oversight of foreign clearinghouses, telling senior officials from the bloc that the proposal could damage financial markets and stunt economic growth.
/jlne.ws/2MZ8LMk

The Man Who Became Russia’s Stockbroker
Jake Rudnitsky and Alexander Sazonov – Bloomberg
An obsession with volume turned an old-school rocker from Siberia, Oleg Mikhasenko, into Russia’s largest stockbroker. Now U.S. sanctions are swelling his fortune by pinching his Kremlin-connected competitors.
Mikhasenko’s BCS Financial Group has tripled trading income since 2014, when the U.S. and its allies first imposed financial penalties on Russia, as investors increasingly shun the two biggest state banks, Sberbank PJSC and VTB Group.
/jlne.ws/2NnLwur

Ex-Cantor trader alleges unethical trading activity at investment bank; Former high-yield trader claims he was unfairly dismissed after blowing the whistle
Attracta Mooney in London – FT
A former high-yield trader is suing Cantor Fitzgerald for £1.2m in a British employment tribunal case, claiming he was unfairly dismissed from the New York-based investment bank after blowing the whistle on prohibited trading activity.
/jlne.ws/2NmtSap

Robinhood aims at IPO as the fintech startup seeks CFO
Josh Constine – Techcrunch
Now valued at $5.6 billion, zero-fee stock trading app and cryptocurrency exchange Robinhood is starting preparations to go public. Just a year and a half ago, it was still largely under the radar. But then it raised a $110 million Series C at a $1.3 billion valuation in April 2017 and then just a year later scored a $363 million Series D, both led by Russian firm DST Global. Combined with the growth of its premium subscription for trading on margin called Robinhood Gold, the startup now has the firepower and revenue to make a viable Wall Street debut.
/jlne.ws/2Nsw4gE

Five surprising outcomes of the 2008 financial crisis; We learnt the dangers posed by ‘too big to fail’ banks but now they are even bigger
Gillian Tett – FT
Predictions are difficult, especially about the future; or so the old Danish joke goes. But that has not prevented financial pundits from feverishly speculating this autumn about the future of finance — and debating who predicted the 2008 financial crisis.
/jlne.ws/2NnSqjn

Bank Sues New York Fed Over Lack of Account; TNB USA asks federal court to order regional reserve bank to open an account that the bank needs to carry out its business strategy
Michael S. Derby – WSJ
A new bank is suing the Federal Reserve Bank of New York, saying it is unfairly preventing the firm from pursuing a novel business strategy. TNB USA Inc.—run by a former top New York Fed staffer—said its primary business activity will be to enable large institutional money-market investors to earn higher interest rates from the Federal Reserve than they could otherwise, according a complaint filed in federal court Friday. Such investors include pension funds, companies and other entities managing large sums of money.
/jlne.ws/2NpzqRv

US accuses North Korea over global cyber crime wave; Charges cover WannaCry attack, Sony hack and robbing Bangladesh central bank
Kadhim Shubber and Demetri Sevastopulo in Washington – FT
US prosecutors have accused the North Korean regime of orchestrating a global cyber crime wave that included robbing $81m from Bangladesh’s central bank and spreading the global WannaCry malware attack last year.
/jlne.ws/2MWlizN

Danske Bank Says Laundering Issues Bigger Than First Thought
Frances Schwartzkopff – Bloomberg
Danske Bank A/S underscored its concern that a money laundering case tied to its operations in Estonia is likely to be bigger than previously thought. Chairman Ole Andersen said “as we have previously communicated, it is clear that the issues related to the portfolio were bigger than we had previously anticipated. We take the matter very seriously, and are committed to understanding the full picture.”
/jlne.ws/2NlQqbD

Nowhere to Hide In Crypto as Digital Asset Ties Tighten in Slump
Camila Russo – Bloomberg
Correlation between coins has increased during recent rout; Cryptocurrencies remain uncorrelated to other major assets
Bitcoin’s ties to other cryptocurrencies are becoming suffocating in the rout. Digital coins are famously uncorrelated to other assets but they’re highly correlated with each other. That lifted the whole market up last year, but this year it means they’re all falling together, leaving crypto investors with little refuge.
/jlne.ws/2MWjSWe

Exchanges, OTC and Clearing

TP ICAP launches two data sets for SOFR derivatives; Data sets for derivatives linked to SOFR will support trading and risk modelling as volumes are expected to rise.
Hayley McDowell – The Trade
The data and analytics business at TP ICAP has launched two data packages for derivatives that are linked to the Secured Overnight Financial Rate (SOFR) index.
/jlne.ws/2wOxwzR

Factor investing – liquidity is everything (part II)
Eurex
Part II of our factor investing article series deals with the iSTOXX® Europe Factor Index Futures. In an interview, Zubin Ramdarshan, Eurex’ Head of Equity & Index Product Design, talks, among others, about the importance of liquidity, the motivation of market participants and the impact of macroeconomic metrics on factor combinations.
/jlne.ws/2wMef1Q

TMX Group Consolidated Trading Statistics – August 2018
TMX
TMX Group Limited today announced August 2018 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha) and Montréal Exchange (MX).
/jlne.ws/2NWPQhq

Eurex Clearing set to lose CRO; Thomas Laux stepping down next year
James Ryder – Risk.net
Eurex Clearing’s chief risk officer, Thomas Laux, is to leave the firm, Risk.net has learned. Laux, who is understood to be leaving his position to pursue other interests, will continue working with the central counterparty’s new CRO until at least 2019, according to a spokesperson. Thomas Book, Eurex chief executive, announced the move at a recent townhall meeting.
/jlne.ws/2wNsMdG

Fintech

EU guidelines on fintech to include ‘sandbox’ design recommendations
Huw Jones – Reuters
The European Union’s banking watchdog said guidelines being drawn up for nurturing cross-border fintech companies will include recommendations for the core design of a “sandbox” and innovation hub.
/jlne.ws/2wPhd5S

New CyrusOne Tower Colocation Service Offers Wireless Access for Trading Firms on Aurora Financial Data Center Campus
CyrusOne
CyrusOne, a premier global data center REIT, announced today the availability of colocation services for trading firms on a new tower on the company’s data center property in Aurora, IL. Service is anticipated to begin early in the fourth quarter of 2018. The tower offers the first on-campus wireless access for trading firms and will support both microwave and millimeter wireless antenna colocation. The CyrusOne Aurora I data center houses the world’s leading and most diverse derivatives marketplace.
/goo.gl/4o224k

Europe’s fintech firms are on pace to set an IPO record this year
John Detrixhe – Quartz
European fintech startups are parlaying enthusiasm for their budding sector into stock market listings. Seven of these financial firms have announced or completed initial public offerings (IPOs) this year, on pace to set an annual record, according to PitchBook data. The market is humming: Adyen’s stock skyrocketed after the payment processor’s listing, and this week Funding Circle said it’s planning a high-profile IPO.
/jlne.ws/2MTbRRM

UK fintech sector in buoyant mood as valuations soar; Sector given extra boost by the UK regulator’s adoption of EU open banking rules
Martin Arnold – FT
While British politicians squabble about Brexit, one group seems immune to the uncertainty hanging over the country: the new generation of financial technology companies that have sprung up in the past decade to challenge traditional banks.
/jlne.ws/2Np4uRD

Fintech Seen Contributing $150 Billion to Africa’s GDP by 2022
Eric Ombok – Bloomberg
The contribution of the financial-technology industry to sub-Saharan Africa’s economic output will increase by at least $40 billion to $150 billion by 2022, according to Financial Sector Deepening Africa, a development-finance organization.
/jlne.ws/2M51rZX

Two Sigma invests in data science startup; Two Sigma invests in Crux Informatics, a data startup already supported by Goldman Sachs and Citi.
Hayley McDowell – The Trade
Quantitative hedge fund Two Sigma has made a minority equity investment in a data science and engineering startup that is already supported by Citi and Goldman Sachs.
/jlne.ws/2wLFgSU

Trading Technologies to phase out flagship X_TRADER futures trading platform; Trading Technologies will begin the phase out of X_TRADER in the fourth quarter this year, with plans to end all support by early 2020.
Hayley McDowell – The Trade
Derivatives trading software provider Trading Technologies is to phase out its flagship futures trading platform X_TRADER beginning this year, according to its chief executive.
/jlne.ws/2NSO6FR

Former TradingScreen and Liquidnet CFO joins blockchain specialist; Kevin Held spent 13 years with Liquidnet and the past three years as CFO at TradingScreen.
Hayley McDowell – The Trade
The former chief financial officer at TradingScreen and Liquidnet has joined a blockchain technology firm that specialises in launching digital asset networks for financial institutions.
/jlne.ws/2NVlKLk

Cryptocurrencies

Bitcoin Price Crash: Nowhere to Hide In Cryptocurrency Slump
Camila Russo – Bloomberg
Bitcoin’s ties to other cryptocurrencies are becoming suffocating in the rout.
Digital coins are famously uncorrelated to other assets but they’re highly correlated with each other. That lifted the whole market up last year, but this year it means they’re all falling together, leaving crypto investors with little refuge.
/jlne.ws/2wLGXzK

Bittrex Partnering to Launch Cryptocurrency Trading Platform for Latin America and the Caribbean
Georgi Georgiev – Bitcoinist
The new digital asset trading platform in Latin America and the Caribbean will supposedly see an enhanced focus on user experience. Bittrex is partnering up with Cryptofacil – a fintech digital asset trading platform which will be responsible for customer operations, support, compliance, marketing, and sales. The team responsible for all of the above is based in Uruguay.
/goo.gl/k1pqPE

$1.8 Million Crypto Heist Mastermind Admits Guilt, Declines to Snitch
CCN
A New Jersey male has admitted stealing cryptocurrency worth almost two million dollars using the old-fashioned way – kidnapping and issuing threats of violence.
/goo.gl/JhR8LU

Bitcoin bloodbath — cryptocurrency plunges 20% in two days
Paul R. La Monica – CNN
Bitcoin investors are getting their digital butts kicked lately. Hard. Bitcoin prices have plunged more than 20% in the past two days.
/goo.gl/F3oBSj

Bitcoin’s Meltdown Looks to Grow Worse Before Things Get Better
Olga Kharif – Bloomberg
Directional Movement Index shows bullish buying has ended; Cryptocurrency’s price peaks are consistently lower this year
If you think that Bitcoin has hit bottom after the latest round of violent price drops, think again.
/jlne.ws/2NoZLiR

IBM Makes Another Blockchain Identity Play With Health Data App
Ian Allison – Coindesk
IBM’s blockchain division is widening its work in the nascent field of “self-sovereign identity” – technology designed to give individuals greater control over their personal data.
/goo.gl/S2BGCK

Grayscale Makes $6.3 Million Bet on Cryptocurrency Zen
Jeff John Roberts – Fortune
Grayscale Investments, the company behind the Bitcoin Investment Trust, is creating a new fund whose sole focus is on Horizen, a little known platform that hosts a currency called Zen.
/goo.gl/KXKL1g

Coinbase is exploring a crypto ETF, and it has sought help from $6 trillion Wall Street giant BlackRock
Frank Chaparro – Business Insider
Coinbase, the cryptocurrency exchange operator, is looking into getting a crypto exchange-traded fund off the ground, and it has sought help from the $6 trillion asset manager BlackRock.
/jlne.ws/2Nr3uMJ

Goldman Sachs CFO says bank is working on bitcoin derivative for clients; Goldman Sachs Chief Financial Officer Martin Chavez called a report that the bank was ditching plans to launch a cryptocurrency trading desk “fake news.”
Kate Rooney – CNBC
A top Goldman Sachs executive looked to clear the air Thursday about the bank’s cryptocurrency ambitions after reports that it was abandoning plans to open a trading desk for cryptocurrencies.
/jlne.ws/2Npwww5

Politics

Market Won’t Crash If Trump Faces Impeachment, Barclays Says
Ksenia Galouchko – Bloomberg
President Donald Trump has warned that the stock market would plummet if he were impeached. Barclays Plc disagrees.
“We doubt that capital markets would collapse if President Trump’s administration was endangered, either electorally or indeed legally,” William Hobbs, head of investment strategy at Barclays Investment Solutions in London, said in a blog post. “The forward momentum of the world economy, and therefore its capital markets, has little to do with the actions of the White House, past, present or future, in our opinion.”
/jlne.ws/EIBLED

Credit Suisse chief denies he will run in Ivory Coast election; Tidjane Thiam speaks out as media speculation mounts of presidency bid
Martin Arnold, Banking Editor – FT
Tidjane Thiam has announced that he will not leave Credit Suisse to run for president in his native Ivory Coast — an unusual move, particularly as bank bosses usually refuse to talk publicly about any potential career change.
/jlne.ws/2MXRp27

Trump’s Thumps Don’t Cause Stock Slumps
Peter Eavis – NY Times
Wall Street is learning to live with President Trump’s criticism of prominent companies. Mr. Trump has made a habit of attacking well-known public corporations, including Amazon, Harley-Davidson and Google. In some cases, his supporters have piled on with threats to boycott the companies’ products or services. The stocks of those firms have come under pressure as investors worry that business will suffer.
/jlne.ws/2wTX3HE

Regulation

Justice Department Probing Wells Fargo’s Wholesale Banking Unit; Probe focuses on potential employee fraud related to altering client documents
Emily Glazer – WSJ
The Justice Department is probing whether employees committed fraud in Wells Fargo WFC -1.73% & Co.’s wholesale banking unit, following revelations that employees improperly altered customer information, people familiar with the matter said.
/jlne.ws/2MWgivg

CFTC Talks EP060: JPMorgan Sandie O’Connor
CFTC
This week on CFTC Talks, we dive into the key interest rate market issue of Libor and SOFR with $200 trillion in contracts impacted. Will SOFR replace Libor? What are the key differences in the two rates? Is there a date in the future the transition will happen? All these questions answered and more! 28:47
/jlne.ws/2MUXwnW

Canadian Securities Regulators Propose Rule Regarding Non-GAAP And Other Financial Measures
Mondovisione
The Canadian Securities Administrators (CSA) today published for comment Proposed National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure (the Proposed Instrument), which establishes disclosure requirements for issuers that disclose non-GAAP and other financial measures. These measures often lack standardized meanings, resulting in potentially misleading or confusing disclosure.
/jlne.ws/2MYu7cs

SEC Awards More Than $54 Million to Two Whistleblowers
SEC
The Securities and Exchange Commission is awarding $39 million to one whistleblower and $15 million to another whose critical information and continued assistance helped the agency bring an important enforcement action. The $39 million award is the second-largest award in the history of the SEC’s whistleblower program.
/jlne.ws/2MVrmsr

Remarks by Chairman J. Christopher Giancarlo at the Eurofi Financial Forum, Vienna, Austria
CFTC
Good evening. It is my great pleasure to be here again at Eurofi. I wish to thank David Wright, Didier Cahan and Marc Truchet for organizing once again a great conference. Thanks also to our Austrian colleagues for their gracious hospitality.
/jlne.ws/2NnFMku

NYSE Regulation: ING Financial Markets to pay $5 Million to Settle Charges
ICE
New York Stock Exchange Regulation (“NYSE Regulation”) announced today that ING Financial Markets LLC (“ING”) has agreed to pay $5 million to settle charges for improperly handling “pre-released” American Depository Receipts (“ADRs”).
/jlne.ws/2MTyIwD

Ageing population + low returns – globalised capital = political reaction & litigation; If pension management fails its beneficiaries, it will face regulation in the courts
John Dizard – FT
There is a lot of talk in the American political world now about how sinister “deep state operatives” or admirable “responsible patriots” have deftly pried the Trump administration’s fingers off the controls of government.
/jlne.ws/2NnwpRT

ESMA updates its Benchmarks Register
ESMA
Today, the European Securities and Markets Authority (ESMA) has moved its register for benchmark administrators and third country benchmarks to the ESMA registers database.
/jlne.ws/2NWcs1C

CE Council and FINRA Request Comment on Potential Enhancements for the Securities Industry Continuing Education Program
FINRA
The Securities Industry/Regulatory Council on Continuing Education (CE Council) is seeking comment on enhancements under consideration for the continuing education requirements for registered persons.
/jlne.ws/2wQAsMa

Information regarding NFA’s review of swap valuation dispute submissions
NFA
NFA’s Interpretive Notice to NFA Compliance Rule 2-49, which became effective January 2, 2018, specifies the types of swap valuation disputes and the relevant information that swap dealers (SD) are required to report to NFA. Among other things, SDs must identify the counterparty to any filed dispute.
/jlne.ws/2NSQaO8

Investing and Trading

Growth in Tight Oil Shakes Up Futures Markets and Hedging Needs
Jessica Summers – Bloomberg
Declines in open interest of WTI forward contracts seen: CFTC; Shale boom has shifted producers’ need to hedge farther out
The vibrations of the shale boom are now shaking the futures market. A visible decline in open interest of West Texas Intermediate crude futures contracts for delivery five or more years in the future is due to the growth of tight oil fields and the shift in producers’ need to hedge oil so far out in the future, according to a study by the U.S. Commodity Futures Trading Commission. That’s because oil extraction has become more efficient in tight oil fields compared to conventional wells and producers have more flexibility in turning on and off the taps in response to oil prices.
/goo.gl/eiG1kX

Aluminum: Supply and Demand Dynamics
Erik Norland – CME Group
U.S. aluminum prices soared between January and April in anticipation of the Administration’s 10% import tariff. Prior to the tariffs, U.S. prices were about 10% higher than the global average. Now, they are almost 20% higher. S
/jlne.ws/2NrLGku

Williams Says Fed Shouldn’t Be Afraid to Invert the Yield Curve
Matthew Boesler – Bloomberg
Fed’s goals may require short-term rates above long-term ones; Unemployment and inflation ‘about as good as it gets,’ he says
The Federal Reserve shouldn’t hesitate to invert the yield curve if raising short-term interest rates above long-term yields becomes necessary to achieve the U.S. central bank’s targets, New York Fed President John Williams said.
/jlne.ws/2Nv6eJe

Credit Derivatives Dethroned by ETFs as Managers Fret Downturn
Yakob Peterseil – Bloomberg
Hedge-fund managers show passive preference: Greenwich survey; Investors are choosing ‘liquidity’ over ‘specificity’
Battle-ready investors on the prowl to hedge a looming reversal in the global debt cycle are embracing weapons familiar to Mom and Pop — and falling out of love with complex derivatives.
/jlne.ws/2Nr3AUB

Institutions

Top banks’ first-half commodities revenue climbs 38 percent: report
Reuters
Commodities-related revenue at the 12 biggest investment banks in the first half gained 38 percent year on year, driven by the energy and base metals sectors, consultancy Coalition said on Thursday.
/jlne.ws/2oKhlzR

Deutsche Bank Top Investor HNA Is Said to Plan Exiting Stake
Bloomberg News
Chinese conglomerate said to sell amid government pressure; Move could open door for other investors to take a bigger role
Deutsche Bank AG’s top investor, China’s HNA Group Co., plans to exit its entire stake in Germany’s largest lender as it reverses a debt-fueled acquisition spree, according to people briefed on the matter.
/jlne.ws/2NvV0UR

Star Broker Accuses UBS of Gender Discrimination
Sabrina Willmer – Bloomberg
Lawyers point to a shift to subtle from brazen discrimination; Women accuse firms of freezing them out of lucrative accounts
Christine Carona was a star broker at UBS Group AG. In the Boston office, she managed more than $300 million and was a member of the President’s Council, an elite club for top producers.
/jlne.ws/2NpcTVe

Deutsche Bank Courts New York Hedge Funds After Cuts
Steven Arons , Sonali Basak , and Melissa Karsh – Bloomberg
German lender has tried to shift some business away from U.S.; On Thursday, its leaders privately met clients it aims to keep
Deutsche Bank AG’s hedge fund clients have had a front-row view of tumult this year, as the lender’s new leader unveiled another strategy, dramatically shrinking its U.S. prime brokerage.
/jlne.ws/2MRQPD7

Hedge funds and Wall St banks cash in on carbon market’s revival; EU sparks huge rally in carbon credits after overhauling broken system
David Sheppard, Energy Editor – FT
A select group of specialist traders at hedge funds and investment banks, including Morgan Stanley and Goldman Sachs, are churning bumper profits from a once niche commodity that has risen phoenix-like from a decade-long slump.
/jlne.ws/2MRWhG9

HNA, Under Pressure From Beijing, to Sell Its Overseas Empire; The assets HNA wants to shed are currently valued at more than $10 billion
Julie Steinberg and Stella Yifan Xie – WSJ
One of China’s largest conglomerates intends to unload its entire stake in Deutsche Bank AG and sell off the vast majority of overseas investments it made in recent years, according to people familiar with the matter, a significant comedown for a once-highflying company.
/jlne.ws/2NWgs1W

How Banks Lost the Battle for Power on Wall Street; Profits, assets and influence have moved from investment banks like Goldman Sachs to money-management giants like BlackRock and Vanguard, the asset managers collectively known as the ‘buy side’
Liz Hoffman – Bloomberg
Catch him in an unguarded moment, and Lloyd Blankfein will tell you his biggest strategic regret in 12 years running Goldman Sachs Group Inc. GS -1.28% It isn’t the mortgage trades that invited public wrath or the congressional testimony that fanned the flames, although there are things he would do differently on both fronts. It is a missed deal.
/jlne.ws/2NW61eT

Credit Suisse director and engineer departs after 20 years; Neil Horlock has spent 20 years with Credit Suisse overseeing exchange connectivity for order routing and market data in Europe.
Hayley McDowell – The Trade
One of Credit Suisse’s most senior technical managers and engineers has left the Swiss investment bank after more than 20 years, The TRADE understands.
/jlne.ws/2wTgsZc

Regions

The Australian Dollar Is Acting Like an Emerging-Market Currency
Ruth Carson – Bloomberg
Currency has tumbled almost 4% in past month, more than rupiah; Aussie used as proxy trade for risks in region, Gibbs says
Australia’s dollar is finding itself in unusual company these days, getting sold along with former emerging-market darlings such as the Indonesian rupiah and Indian rupee.
/jlne.ws/2NnqvQJ

Mexico’s Next President Says Historic Oil Auctions Will Continue
Amy Stillman and Eric Martin – Bloomberg
“We are already preparing tenders for the drilling of wells”; AMLO to meet with oil company representatives on Saturday
Mexico’s next president said he will continue with oil auctions in the first signs that he is backtracking on plans to scale back the country’s historic 2014 energy reforms.
/jlne.ws/2NpziS1

Bank of Japan bond buying leaves traders twiddling their thumbs; Yield curve control means 10-year yields have lost their value as an indicator
Leo Lewis – FT
Watching the Japanese government bond market as it enters its third year under the Bank of Japan’s “yield curve control” (YCC) later this month, explains one Tokyo-based investor, is like watching pro-wrestling: implausibly outsized figures in a totally foregone fight.
/jlne.ws/2MXRkvl

S&P Global Plans Custom Credit-Ratings Scale for China
Bloomberg News
S&P Global Ratings is studying a credit-ratings scale tailored for China as part of its application to secure a license to rate bonds in the country, according to a document on its website.
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Brexit

UK China post Brexit relationship threatened by South China Sea showdown
Will Martin – Business Insider
A showdown between the British and Chinese navies in the disputed South China Sea could derail the two nations’ trading relationship after Brexit, the state-run China Daily newspaper has said.
The incident saw a British warship, HMS Albion, sail through waters claimed by China close to Chinese-occupied territories in the Paracel Islands in late August. The Chinese navy instructed the British vessel to leave the area, and the situation did not escalate further, according to Reuters.
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FCA chief warns against fencing off EU financial activity post-Brexit
Caroline Binham – Financial Times
The UK’s top financial regulator has warned his European counterparts against fencing off financial activity within the European Union after Brexit, urging them to commit to a plan floated by the UK government that would continue to allow mutual access.
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Brexit: EU and UK face potential ‘severe political crisis and turmoil’
Simon Carswell – The Irish Times
Britain is potentially facing the worst domestic political turmoil since the Second World War over Brexit and a severe political crisis with the EU, the UK’s former chief EU diplomat Sir Ivan Rogers has said.
Speaking at an event in Dublin, the former chief Brussels adviser to David Cameron and Theresa May said Brexit negotiations were entering “a very critical few months” and warned against a “no-deal Brexit” as both sides remained deadlocked over an agreement ahead of the UK quitting the EU in March 2019.
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May urged to ignore ‘Three Stooges’ in Brexit negotiations
Lisa O’Carroll – The Guardian
An EU commissioner has likened Boris Johnson, Jacob Rees-Mogg and Nigel Farage to the “Three Stooges” and issued a stern warning to Theresa May that there would be no Brexit deal next March if she insisted on sticking to her Chequers proposal.
In a speech in Ireland on Friday, Phil Hogan said the EU would fight to the end to preserve the union of nations that has stood for the past 60 years.
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CEO, Trading Technologies

Past JLN Newsletters

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