First Read

5th Annual WILD Symposium Focuses on Shattering Stereotypes and Glass Ceilings
by Jessica Darmoni – The Title Connections

Women In Listed Derivatives (WILD), a group dedicated to helping women advance in the listed and over-the-counter derivatives space, held their 5th Annual WILD Symposium this week at the UBS Building in Chicago. Sponsored by the Options Clearing Corporation (OCC), Integritas Financial Consulting and the Burling Bank, this year’s conference focused on diversity in the Boardroom, how women can get a seat at the table and how the highest glass ceiling, the one of Oval Office, might be broken next week.

Putting Words Into Action
Craig Donohue, Executive Chairman and CEO of the OCC, made a repeat appearance, kicking off the Symposium for the second year in a row. He talked about how he is surrounded by strong women in his family and how issues impacting the female attendees are also issues he cares about.

In prepared remarks passed out to the audience, Donohue points to a 2014 Catalyst Census highlighting that only 1.4 percent of the CEOs in the S&P 500 finance and industry sector are women, compared to 5% in the overall S&P 500. Also, only 19.8% held board seats in the financial sector versus 20.7 percent of the overall S&P index of companies.

“It is critical to advance women in the financial industry and put our words into action when it comes to the state of gender equality,” said Donohue.

With help from OCC’s Chief Human Resources Officer, Tracy Raben, Donohue put his words into action by conducting a survey on gender pay equality practices at the clearing corporation.
“While our track record is good, Tracy reminded me that there are only about 20% of women on staff and in management roles,” said Donahue. “Our challenge is getting more women in the industry and in the workforce. This is an obstacle playing out in front of an interesting backdrop as we are a week away from potentially electing the first female president. If this happens, I hope to hear glass ceilings shattering everywhere.”

To read the rest of the article, go here


Chicago Cubs’ big Game 6 win leads to massive spike in Game 7 ticket costs
Darren Rovell – ESPN
As the Cubs went up 7-0 early in Game 6 of the World Series against the Indians on Tuesday night, tickets to Game 7 on the resale market exploded, as Chicago fans undoubtedly felt the need to be in Cleveland to potentially celebrate the team’s first title in 108 years.

***JB: After game five ticket prices plummeted. A great example of supply and demand in action.


The Party Winds Down for London’s Tech Bros
Simon Akam – Bloomberg
Not long ago, when London was still a virtual pipsqueak in global tech, a group of startup founders, feeling starved of any type of community, decided they needed to bond through wild parties in exotic locations. The goal: share lessons and frustrations, and revel in the heady rush of entrepreneurship.

***JB: Growing up is such a drag.


Billionaire’s Supersonic Private-Jet Plan Hits Engine Snag
Aerion Corp., backed by Texas billionaire Robert Bass, has hit a snag in one of the most crucial milestones toward building the first business jet able to fly faster than the speed of sound.

***JB: First world problems amiright?


The David Bowie emoji has arrived
What do avocados, owls and the late David Bowie have in common? They all feature in the new batch of emojis released by Apple this week.

***JB: Finally! I can’t tell you how many times I was searching for the perfect emoji but just could not find one that quite fit the situation. Doubtless this will fill that hole.


How the Internet Is Loosening Our Grip on the Truth
Farhad Manjoo – The New York Times
Next week, if all goes well, someone will win the presidency. What happens after that is anyone’s guess. Will the losing side believe the results? Will the bulk of Americans recognize the legitimacy of the new president? And will we all be able to clean up the piles of lies, hoaxes and other dung that have been hurled so freely in this hyper-charged, fact-free election?

***JB: Truth! You can’t handle the truth! (read in Jack Nicholson’s voice)


Tuesday’s Top Three
How could this not be yesterday’s most read story? This Bloomberg story certainly got my attention as it is something I think everyone would like to know. How a Smooth Talker Convinced Bankers to Invest $32 Million, Then Vanished. The number two story is also something many are curious about. In our Options newsletter there have been numerous stories showing volatility increasing. What Happens to the Markets if Donald Trump Wins?. And in third, who wouldn’t want one of these for their front room? London’s Iconic Red Trading Sofas Find a New Home in China


Lead Stories

Deutsche Bank Thinks Draghi’s Gone Over to the ‘Dark Side’
Grim mutterings about European Central Bank policy can probably be heard echoing around the skyscrapers of Frankfurt’s financial district on any given day: Low interest rates, tough supervision, no bonds left out there to buy, etcetera.
David Folkerts-Landau, chief economist of Deutsche Bank AG has taken those concerns to a whole new level, and has just published an excoriating attack on ECB policy. The research note is entitled “The Dark Sides of QE.” Here’s a taste:

Why Treasury’s plan for government debt transparency falls short
Francine McKenna – MarketWatch
A new plan by the federal government aimed at preventing volatility in the government debt market could allow banks to gain an information edge over futures traders, according to an industry veteran. MarketWatch asked John Lothian to talk about how the proposed changes in post-trade transparency for the cash Treasurys market could impact the related futures and options markets. Lothian runs an online media and financial services firm in Chicago that publishes a daily newsletter about the global exchange traded derivatives, securities and related over-the-counter markets.

Ripple’s Chris Larsen Steps Down as CEO, Will Remain as Chairman
Finance Magnates
Ripple, the New York regulated San Francisco based blockchain firm, just announced that Chris Larsen has decided to transition from his operational role as chief executive officer of Ripple to executive chairman of Ripple’s board of directors. He has named Brad Garlinghouse his successor as CEO of Ripple, effective January 1, 2017.

On Wall Street, a high-ranking few still avoid email
Olivia Oran In an age when most bankers use keyboards to communicate with each other, a small group of the Wall Street elite refuses to say anything substantive in an email, text or chat, and some will not communicate digitally at all.

US exchanges pin hopes on post-election volatility rebound
Philip Stafford in London and Nicole Bullock in New York – FT
Low volatility and weak volumes last quarter have raised the stakes for the rest of the year
Indications from the owner of the New York Stock Exchange on Tuesday of a weak autumn are the latest in a string of downbeat corporate updates in recent weeks.

Pound Climbs in Role Reversal as U.S. Election Risk Hurts Dollar
Marianna Duarte De Aragao – Bloomberg
For once, the pound is benefiting from increased political risk.Sterling rose to an almost two-week high versus the dollar after the U.S. currency was hurt by signs Republican Donald Trump is closing the gap in the race for the White House. That marks a role reversal for the pound, which is 2016’s worst-performing major currency and has been dumped by investors concerned that they still have no clear idea about what Britain’s future outside the European Union looks like.

Bitcoin Isn’t Anonymous Enough
Elaine Ou – Bloomberg
The anonymity of bitcoin gained it myriad adherents among anarchists and drug dealers around the world. Now, though, it’s looking like the digital currency isn’t quite anonymous enough.


London Judges Said to Rule on Brexit Challenge Thursday Morning
A panel of senior judges will rule Thursday morning on a challenge to Prime Minister Theresa May’s plan to begin Britain’s exit from the European Union, a lawyer in the case said.

German Economists Urge EU to Shun Brexit Taboos to Keep U.K. In
Rainer Buergin – Bloomberg
The European Union’s balance of power will shift against its more market-oriented members if the U.K. drops out, the German government’s council of economic advisers said, calling for “constructive negotiations” to keep Britain in the EU despite the Brexit referendum.

Three in four bankers think London will remain the financial capital of Europe
Natasha Clark – City A.M.
Nearly three in four bankers think that London will still be the financial centre of Europe in five years time – even after the UK leaves the EU.
According to a survey of 80 banking executives released by Synechron, 72 per cent said they think the UK will remain the most attractive place for financial services in the coming years, despite warnings that some are considering moving elsewhere.
The survey also said that 55 per cent of British banks had set up “Brexit steering committees” to prepare for life outside the EU.

Exchanges, OTC and Clearing

ICE to appeal UK antitrust ruling on Trayport acquisition
Philip Stafford – Financial Times
Intercontinental Exchange will appeal a UK antitrust ruling that its purchase of an energy trading software platform hurt competition, saying the watchdog’s decision was “simplistic” and “set a terrible precedent”.

Nasdaq ‘Innovation Lab’ Unveils Suite of Trading Performance Analytics
Nasdaq releases the first three products from its new Innovation Lab, designed to help traders refine their trading strategies by comparing them to the market and their peers.

Bats Global Markets Completes Acquisition Of Javelin SEF – Deal Broadens FX Instruments Available To Trade
Bats Global Markets, Inc. (Bats: BATS) today completed its acquisition of Javelin SEF, LLC (Javelin), a swap execution facility (SEF). The deal was announced on August 11, 2016 and received approval from the Commodity Futures Trading Commission (CFTC) on October 23, 2016. Javelin has been integrated with Bats Hotspot, the institutional FX trading platform, in order to enable trading in non-deliverable forwards (NDFs). Hotspot already offers trading in outright deliverable forward contracts.

NYSE-owner ICE’s profit rises as London calls
John McCrank and Richa Naidu – Reuters
Intercontinental Exchange Inc (ICE.N), which saw a jump in profits in the latest quarter, is evaluating opportunities to expand in Britain following the UK’s vote to leave the European Union, the head of the exchange and clearing house operator said on Tuesday.

Aquis Exchange sees volume surge
Hayley McDowell – The Trade
Aquis Exchange has revealed its average daily value (ADV) traded in October this year soared 79% compared to October in 2015, according to an independent venue analysis by TCA specialist LiquidMetrix.

BSE gets Sebi’s in-principle approval for global exchange
Business Standard
Leading bourse BSE has received in-principle approval from the Securities and Exchange Board of India (Sebi) to set up international exchange and clearing corporations at GIFT city. BSE plans to operationalise the international exchange by early next year, the bourse said in a statement on Tuesday. Mock trading for the same commenced from October 3.

Red Kite head warns LME fees, high-speed trading hit volumes
Likens high speed trading to illegal front-running

Borsa Istanbul Trading Session Hours Change
By the decision of the Council of Ministers no. 2016/9154 dated September 7, 2016, which went into force after being published in the Official Gazette no. 29825 dated September 8, 2016, the daylight saving practice will continue during the whole year.


Hillary Clinton: Wall Street’s favorite enemy
Hillary Clinton began her presidential campaign by promising to do what it takes to rein in Wall Street. Boosted by Wall Street’s toughest critics, U.S. senators Bernie Sanders and Elizabeth Warren, the Democratic candidate has declared “the deck is still stacked in favor of those at the top” and said she would raise bank fees and tighten banking regulations. She has encouraged regulators to break up too-risky banks.

***JB: This is called a “frenemy”.

Election Angst Spreads as Stocks Drop, Bonds Rise With Gold, Yen
James Regan and Kelly Gilblom – Bloomberg
Global stocks fell toward a three-month low and bonds jumped as investors crowded into haven assets after polls showed Donald Trump gaining ground in next week’s U.S. presidential election.

The U.S. Stock Market Isn’t Going Clinton’s Way
Few institutions have a better track record calling presidential races than the U.S. stock market. At the moment, it’s sending information that counts against Democrat Hillary Clinton.

Financial markets jolted as US election polls tighten
Wall Street ‘fear gauge’ jumps as investors rethink long-held bets on Clinton victory
Nicole Bullock and Adam Samson in New York and Courtney Weaver in Washington – FT
Tightening polls just a week before the US presidential election have sent tremors through financial markets, as investors rethought their long-held bets on a Hillary Clinton victory.
The Vix index, a measure of expected US stock market volatility known as Wall Street’s “fear gauge”, neared highs last seen in the aftermath of the UK’s vote to leave the EU this summer, and Asian markets on Wednesday extended a sell-off in equities that had begun accelerating the previous day in the US.

Europe’s Bonds Surge as U.S. Election Stress Fuels Safety Demand
Anooja Debnath – Bloomberg
European government bonds advanced as investors sought their relative safety after the latest polls suggested that the outcome of next week’s U.S. presidential election is not clear cut.

Investing and Trading

Opinion: These are the seven stupidest ETFs on the planet
Exchange-traded funds are all the rage, and for good reason. Research shows that low-cost, long-term investing via index funds can be a massively powerful way to grow your nest egg and reduce expensive mistakes and management fees.

Hedge Fund Manager Odey Says U.K. Stocks Could Plummet 80%
Crispin Odey, whose main hedge fund has lost about 43 percent this year, says U.K. stocks could slump 80 percent as the economy is roiled by a recession and higher inflation following the vote to leave the European Union.


This Investment Bank Sold All U.K. Assets Before Brexit Vote
Carnegie Investment Bank AB, which manages $17.2 billion for clients, sold all of its U.K. holdings as opinion polls narrowed ahead of the June vote to exit from the European Union.

UBS to cut several dozen wealth management jobs: sources
UBS will cut several dozen jobs at part of its private bank, three sources familiar with the matter told Reuters, part of a previously announced organizational restructure.

Profile of Digital Mint
FinTEx Chicago
Bitcoin remains an enigma: misunderstood and often unappreciated. The cryptocurrency has an undeserved reputation as a channel for money laundering. Banks wonder about its impact on their cross-border infrastructure and whether there is a way to harness blockchain, the technology upon which bitcoin was built, for themselves.

Nasdaq, Goldman Sachs agree major ‘dark pool’ deal
Nasdaq will use the bank’s technology.
By Kevin Dugan – MarketWatch
Nasdaq Inc. and Goldman Sachs Group are taking the plunge together in the first major “dark pool” deal — but getting there was more Marco Polo than synchronized swimming.
Bob Greifeld’s exchange will operate most of Lloyd Blankfein’s “dark” stock trading system, called Sigma X, starting early next year, in what’s likely to be just the first deal among banks to outsource their technology to Nasdaq

BRIEF-Interactive brokers group inc says for Oct, 603 thousand daily average revenue trades, 8% lower than prior year


Big Data and Expected Returns
Matt Levine – Bloomberg View
Here’s a keynote speech that Commissioner Kara Stein of the Securities and Exchange Commission gave to the “Big Data in Finance Conference” last week, titled “A Vision for Data at the SEC.” It’s about how the SEC does and should use data to catch crimes and prevent crashes and so forth.

Vela Adds to Global Feed Handler Tally, Ups Asia Markets Coverage
New York-based low-latency data platform and feed handler provider Vela Trading Technologies (formerly SR Labs) has released a raft of global feed handlers, including several serving Asia-pacific exchange feeds in response to client demand for expanded Asian coverage.

Trading compliance firm Droit gets $16 million in funding from Goldman, Wells Fargo
Droit, a financial technology company whose software helps improve compliance in derivatives trading, said on Tuesday it has raised $16 million from investors, including Goldman Sachs Group Inc, Wells Fargo & Co and trading firm DRW Holdings.


David H. Brooks, 61, Dies Serving Time for Insider Trading
NY Times
David H. Brooks, a former military contractor who was found guilty of insider trading and fraudulently enriching himself through company funds, died on Thursday in prison in Danbury, Conn. He was 61.

Former BlackRock Manager Pleads Guilty to Insider Trading
Suzi Ring – Bloomberg
Mark Lyttleton, a former BlackRock Inc. portfolio manager, pleaded guilty to two counts of insider trading, becoming the latest high-profile figure snared in the U.K. regulator’s crackdown on the crime.
Lyttleton entered his plea Wednesday in a London court after a third count was dropped. He was accused by the U.K. Financial Conduct Authority of insider dealing relating to trading in shares of EnCore Oil Plc in October 2011 ahead of news about a proposed takeover and, a month later, call options in Cairn Energy Plc related to the discovery of oil in Greenland.

CFTC to probe banks’ interest rate swaps business, says Citigroup
The Trade
Citigroup said the US Commodity Futures Trading Commission (CFTC) has launched an industry-wide investigation into some of the biggest interest rate swaps dealers. In a regulatory filing, it stated the derivatives watchdog is probing the “trading and clearing of interest rate swaps by investment banks”, and that “Citigroup is cooperating with the investigation”.

‘Diva of Distressed’ Tilton takes stand in SEC fraud trial
By Nate Raymond | NEW YORK – Reuters
Financier Lynn Tilton took the stand on Tuesday to defend herself against U.S. Securities and Exchange Commission charges that she defrauded investors in three debt funds that loaned money to distressed companies.
Tilton, the founder of private equity firm Patriarch Partners, told an SEC administrative law judge in Manhattan that investors were routinely provided information allowing them to know what steps she was taking with regard to those companies.

Ban on trading tips through Whatsapp: Sebi at the receiving end of social media flak
Business Standard
Stock market watchdog Securities and Exchange Board of India (Sebi) was at the receiving end of social media flak on Tuesday. Sebi had proposed to ban unauthorised trading tips through SMSes, WhatsApp, Twitter, Facebook and other social media platforms, as also games, competitions and leagues relating to the securities market.

AMF official elected to IADI Executive Council
The Autorité des marchés financiers (the “AMF”) is pleased to announce that Patrick Déry, AMF Superintendent, Solvency, was elected to the Executive Council of the International Association of Deposit Insurers (IADI) at the 15th IADI Annual General Meeting.

FCA bans six for UCIS fraud
The Financial Conduct Authority (FCA) has banned six individuals from regulated financial services a year after they were convicted of a £4.3m fraud that trapped 100 investors.

German financial watchdog says Basel IV draft bank rules unacceptable for Germany
A new draft of proposed international bank regulation is unacceptable for Germany because the rules might restrict lending by the country’s banks, the head of Germany’s financial regulatory agency said.
The Basel Committee of bank supervisors from nearly 30 countries intends to deliver the new Basel IV rules by the end of this year. The rules aim to avoid repeats of the financial crisis of 2008-09, when taxpayers had to bail out under-capitalized lenders.


Asset Bubbles From Stocks to Bonds to Iron Ore Threaten China
John Lyons and Shen Hong – WSJ
A succession of asset bubbles has formed in China, caused by a torrent of speculative money sloshing from stocks to bonds to commodities. The biggest apparent bubble is in housing, but prices have surged for niche assets, too, such as calligraphy, antiques and art. In May, futures prices for soybean meal, used as pig feed, jumped 40%. The trading volume of 600 million tons was nine times higher than China’s annual consumption. The pipe-making material PVC is up 40% so far this year on the Dalian Commodity Exchange.

Egypt Extends Delay on Capital Gains Tax Amid Currency Crunch
Ahmed Feteha and Abdel Latif Wahba – Bloomberg
Egypt delayed the introduction of a capital gains tax on equities for three more years, as it tries to attract investors to help ease a hard currency crunch that’s hurting growth. Stocks rose.

Fear of Failure and Japan’s Entrepreneur Gap
Bloomberg View
The total value of venture capital deals completed in Japan was just $800 million last year, according to Ernst & Young — about one-third the amount in Israel and one-ninetieth the sum in America. Michael Schuman warns that outdated business practices and misguided policies are preventing the “creative destruction” needed to revitalize the country’s economy.

Exclusive: Brazil prosecutor investigates funds’ investment in Trump Hotel Rio
Anthony Boadle and Stephen Eisenhammer – Reuters
A Brazilian prosecutor has opened a criminal investigation into investments made by two state pension funds in a luxury Rio de Janeiro hotel that is part of the Trump franchise, according to a court filing reviewed by Reuters on Tuesday.


Gannett, Tronc end merger talks, terms not ‘acceptable’
Liana B. Baker and Jessica Toonkel – Reuters
The long-awaited merger between Gannett Co Inc (GCI.N), the publisher of USA Today, and Tronc Inc (TRNC.O), the publisher of the Chicago Tribune and the Los Angeles Times, fell apart on Tuesday after months of talks.

Thomson Reuters to cut 2000 jobs
David Bond – Financial Times
Thomson Reuters is to cut 2000 jobs across its global operations as part of a $200-$250m streamlining of the business. A spokesman for Thomson Reuters confirmed chief executive Jim Smith had written to staff on Tuesday morning announcing the lay offs. The spokesman added that there would be “no net impact” on the Reuters newsroom.

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