First Read

Hits & Takes
By JLN Staff

The Giving Tree

This is a different type of giving tree, so hang with me. There are a number of announcements to be made today. If you had not seen the information about the visitation for Les Rosenthal, here it is: Chicago Jewish Funerals, 8851 Skokie Blvd. Skokie IL 60077, today, September 19, between 1:00 p.m to 4:00 p.m. In lieu of flowers, contributions in his memory may be made to a charity of your choice. There are a number of charities listed.

In recent days prior to the sad news, JLN received several announcements regarding charitable events in the industry. Perhaps you would consider any or all of the following on your own, or in memory of Les Rosenthal. All are great charities and great causes worthy of your support.

A Leg To Stand On Rocktoberfest
To really help change a life, you can buy tickets for A Leg To Stand On‘s upcoming event. The charity, co-founded by C. Mead Welles, has helped provide orthopedic care to more than 16,000 kids in need of prosthetic limbs or procedures in developing countries. ALTSO’s Rocktoberfest in Chicago on October 5th is a fantastic evening featuring bands made up from industry professionals, who put on a great show. They’re truly incredible musicians. Because John Lothian & Co. is a media sponsor and annual supporter of this unique event, ALTSO is offering a 2-day deal on tickets for the event today and Wednesday. If you buy three tickets, you get the fourth one free. Just enter the promo code: Lothian – to get the extra ticket and bring another friend. The event truly rocks and also helps kids in need. Here’s the link. Remember to enter Lothian in the promo code box.~JK

Team Muir 2017 – Urban Challenge
For a third year running, we are raising money in memory of our darling John on September 30, 2017. This year “Team Muir 2017” has an impressive line-up with Adrienne and Stuart Muit, Alison Hood, Cathy Lyall, Wendy Deguara, Clive Furness, Clare Black, Katy Birch, Jo Sullivan, Rob Alexander, Jo Shannon and Julie Carruthers. We are running 2.5km, spinning 15km and walking up St. Guy’s Tower (649 stairs/29 flights). All money we raise will go directly to the NICU at Evelina to buy much-needed equipment. Please click here.~JK

Bryan Harkins of CBOE (formerly Bats) and Wall Street Rides FAR
I’m excited to announce the inaugural Wall Street Rides FAR (For Autism Research) charity cycling event benefiting the Autism Science Foundation on October 10th. Our vision was to create an event that would bring the Wall Street and autism communities together for a unique networking opportunity, fun fitness challenge, and promote a cause we feel strongly about. Our best HOPE lies in SCIENCE. To register and find more details for the event, visit

SEC Commissioner Michael Piwowar took a shot at Michael Lewis at the STA Market Structure Conference in D.C. last week, saying it took him a while to find “Flash Boys” at the bookstore as he didn’t realize it was located in the nonfiction section.~SD

Today’s featured speaker from this summer’s MarketsWiki Education World of Opportunity series in Chicago is Advantage Futures CEO Joe Guinan.~JJL


10th Anniversary of Equity Index Futures and Options Nighttime Trading
Osaka Exchange, Inc. (OSE) is celebrating the 10th anniversary of the nighttime trading of equity index futures and options.
Since the nighttime trading of equity index futures and options started on September 18, 2007, the trading hours have been extended to adapt to growing investor needs. In July 2016, trading was made available until 5:30 a.m. (JST) along with the launch of our new derivatives trading system.

***** Someone please give JPX-OSE something tin or aluminum for their 10 year anniversary.~JJL


What Jamie Dimon Got Wrong About Bitcoin and Tulips
Aaron Brown – Bloomberg
The economic value of these services serves as the underlying base of value, just like the value of tulip bulbs supported the tulip futures contracts. But bitcoin became monetized and its value far exceeds the current use value in transactions. Its value is now based on projected future need for protection against the problems it solves. If this be fraud, all money is fraud.

***** I have long said the economic value of Bitcoin is directly related to the cost of money laundering and its utility to be used so. ~JJL


It is hard to talk about suicide, but employers must
Emma Jacobs – FT
When a colleague’s mental health deteriorates, managers must be ready to spot the signs and react appropriately
Michael Mansfield finds that addressing employers about suicide prevention is a way of “channelling the feelings, the anger”. The eminent English barrister’s daughter, Anna, committed suicide in 2015. “I can’t get to grips with it,” he says.

***** There are many risks to manage; this is an important one.~JJL


Boat Services strengthens team for catastrophe modelling shared service offering
Boat Oasis
Boat Services today announced the addition of Matt Jones and Bert Kerr as consultants to further develop the company’s fast growing catastrophe risk modelling business. Together they bring 30 years of industry expertise in (re)insurance catastrophe (cat) risk management to the Boat Oasis platform.

****** This brings new meaning to a catastrophic hire.~JJL


The Cycle of Life – Joe Guinan

“It shocks me every day at five o’clock when I see the race to the elevator, as if only the first few will make it out of the building. Just because you have to work till five at the beginning of your career, doesn’t mean you can only work till five.”

In this video from MarketsWiki Education’s World of Opportunity event in Chicago, Joe Guinan, CEO of Advantage Futures, spoke about navigating the ups and downs in the financial industry. Every year, millions join the ranks of those with investable assets and for that reason, Guinan is bullish on starting a career in finance because all of that money needs to be managed. Entering the workforce as a young professional can be tough and Guinan stresses the importance of relentlessly striving to prove yourself over and over. Some people look at graduating from college as the finish line. Guinan says the race just started.
Watch the video »


Monday’s Top Three
Yesterday’s top story was Rosenthal Collins Group Statement On The Passing Of Futures Industry Pioneer Les Rosenthal followed by Leslie Rosenthal’s MarketsWiki Page. Third went to the revelation that Global debt may be understated by $13 trillion according to the BIS.


MarketsWiki Stats
107,828,172 pages viewed; 22,785 pages; 209,301 edits
MarketsWiki Statistics


Lead Stories

The Fed, a Decade After the Crisis, Is About to Embark on the Great Unwinding; After a historic buildup of its bond portfolio to support the U.S. economy, the central bank plans to shrink its holdings, entering uncharted territory
Nick Timiraos – WSJ
The Federal Reserve resorted to a series of shock-and-awe stimulus campaigns to stabilize the economy after the financial crisis. Now the Fed is preparing the final move to unwind its supportóand it wants to be as boring as possible.

BTS Makes Play For Futures Market With BTS Spark
Blue Trading Systems, an innovative and leading provider of derivatives trading and risk analytics software, has launched BTS Spark, a comprehensive, reliable, and extremely fast platform for futures traders. Users leverage a functionally robust futures interface and have the ability to create and operate synthetic spreads. Software updates are controlled by the trader, leaving final authority in the customer’s hands.

Nasdaq Completes Acquisition of Sybenetix
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today announced the completion of its acquisition of Sybenetix, a leading surveillance provider that combines behavioral analytics and cognitive computing with financial markets expertise.

The Financial System’s Weak Link: Zombie Firms; Failing companies need not be a problem if banks are sound.
Ferdinando Giugliano – Bloomberg
Whether you think of subprime mortgages or auto loans, there is little doubt that consumers were the symbol of the 2008 financial crisis. Since then, households have gone through a painful process of deleveraging, as central banks kept interest rates at rock bottom to help them pay back their debts.

The Bitcoin Bandwagon: Central Banks Consider Their Own Cryptocurrencies; BIS report weighs up risks and rewards from virtual currencies’ surging popularity
Steven Russolillo – WSJ
Central banks should consider introducing their own cryptocurrencies to counter the risks from the explosive growth in bitcoin and other virtual currencies, the Bank for International Settlements said in a new report.

Wall Street’s Bond Gurus Have the Fed’s Balance-Sheet Unwind All Wrong
Brian Chappatta – Bloomberg
During periods of central-bank purchases, Treasury yields rose; Fed likely to announce start of balance-sheet runoff this week
On Wall Street, the conventional wisdom is that once the Federal Reserve finally starts to whittle down its crisis-era debt investments, U.S. Treasury yields will have nowhere to go but up.

Bitcoin’s Wild Ride Shows The Truth: It Is Probably Worth Zero; The digital currency’s value depends on it becoming digital goldóor on criminals
James Mackintosh – WSJ
Behind every bubble is a good idea bursting to get out, and bitcoin kind of looks like a good idea, at least if you squint a bit. A digital currency without borders that governments can’t control and that allows secret online transactions? I’m in. Bitcoin itself? Not so much.

Fixing the ‘Brain Damage’ Caused by the I.P.O. Process
Andrew Ross Sorkin – NY Times
“It seems like a way of living in hell without dying.” That was the way James Freeman, the founder of Blue Bottle Coffee, described the process of taking a company public in the modern era ó and the way he explained why he sold his company instead to NestlÈ last week.

This former hedge fund guy is a one-man nonprofit investigating some of America’s shadiest companies
Laura Hazard Owen – Nieman Lab
“You can’t stop these guys from getting rich as hell and doing things, but I can at least have a marker laid out there in the cyber world saying: Hey, take a hard look.”
Earlier this year, U.S. Senator Claire McCaskill (D-MO) launched an investigation into the role of America’s drug makers in fueling the country’s opioid crisis. Her first report, “Fueling an Epidemic: Insys Therapeutics and the Systemic Manipulation of Prior Authorization,” was released on September 6 and detailed how Insys “repeatedly employed aggressive and likely illegal techniques to boost prescriptions for its fentanyl product Subsys,” beginning around 2014.

Exchanges, OTC and Clearing

Meet the woman fighting Wall Street’s Flash Boys
Dominic Rushe – The Guardian
Like many people on Wall Street and beyond, Sara Furber devoured Michael Lewis’s Flash Boys, the best-selling book that argued high-speed traders had rigged the world’s biggest stock markets. Now, Furber has been tasked with proving that executives and investors really want an alternative.

Swaps body tells regulators to make clearing house recovery a ‘top priority’; International Swaps and Derivatives Association does not want regulators distracted by political bickering
Samuel Agini – Financial News
The trade body for the $483tn swaps market has told regulators to worry less about the future of euro-clearing after Brexit and more about avoiding the taxpayer bailout of a major clearinghouse.

Clearstream Monthly Report: Inflows in funds recover with increasing political stability
Deutsche Bˆrse
Clearstream’s fund business shows strong growth in investment funds and ETFs due to increased customer demand / thinkers will discuss the future of the fund industry at the Clearstream Fund Summit on 28 September in Luxembourg

Deutsche Bˆrse Photography Foundation and Foam Fotografiemuseum Amsterdam announce cooperation
Deutsche Bˆrse
The Deutsche Bˆrse Photography Foundation and the Amsterdam Foam Photography Museum have today announced a cooperation in the area of ??the promotion of young artists. The Deutsche Bˆrse Photography Foundation will support the Talent Edition of the Foam Magazine, the international touring exhibition Foam Talent and the associated accompanying program.

OTC Clear Welcomes BNP as its First Clearing Member from France
OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX) that was set up in 2013 to provide clearing services for over-the-counter, or OTC, derivatives, welcomes BNP Paribas (BNP) as 17th clearing member1 and first member from France.

Powernext Is Appointed To Operate The National Registry Of Energy Savings Certificates
Powernext has been appointed by the French Ministry of Ecological and Inclusive Transition as the new National Registry of Energy Savings Certificates operator. This nomination, announced by the Ministry in August 2017, will be effective on 1st January 2018 for an initial period of 5 years. Powernext will succeed Locasystem International which has been the registry operator since 2006.


SimCorp and TradingScreen form strategic front office alliance
Institutional Asset Manager
SimCorp and TradingScreen have formed a new strategic alliance which, by combining the companies’ respective expertise and products in the order and execution management system (OEMS) space, is aiming to provide the the global buy-side with aseamless and tightly-knit solution for use across the entire investment and trading lifecycle.

Fintech: Where necessity is the mother of invention
Helen Avery – Euromoney Magazine
Cutting-edge technologies are being harnessed to bring affordable financial services to hundreds of millions of people in emerging markets. They offer a glimpse into how financial services in the rest of the world may develop.

Capgemini’s Financial Services Unit Boosts Its Capital Markets Expertise with Two Key Hires
Press Release
Capgemini, a global leader in technology, consulting and outsourcing services, has expanded its capital markets technology capabilities with the hiring of Ziad Chammaa and Ferreol de Naurois, the former founders of Iridium Consulting, a provider of consulting and technology expertise for financial institutions with a unique focus on capital markets.

CAT Takes Shape
For many years, the notion of a consolidated audit trail was just that, a notion ó pondered by regulators and discussed at industry conferences, almost as an academic exercise.

TORA integrates OTAS analytics for best execution; OTAS Technologies analytics have been integrated within TORA’s OEMS and aim to reduce trading costs.
Hayley McDowell – The Trade
TORA has integrated OTAS Technologies’ portfolio and trading analytics within its OEMS platform in a bid to help clients meet MiFID II’s best execution requirements.

Wall Street Blockchain Alliance Adds BlockEx And RiskSpan As Corporate Members – New Members Represent Innovations In Trading, Risk And Big Data Analytics
The Wall Street Blockchain Alliance (WSBA), an industry leading non-profit trade association, has announced that BlockEx and RiskSpan have joined the organization as its newest corporate members.


Soros hatred is a global sickness; For a new generation of nationalists, the investor has become the perfect villain
Gideon Rachman – Financial Times
George Soros, the billionaire investor and philanthropist, has had a busy year. Since the beginning of 2017, he has faked a chemical attack in Syria, funded anti-Trump marches in Washington, come up with the “Soros plan” to flood Hungary with refugees, forced a change of government in Macedonia, undermined the Israeli prime minister and got several key White House aides sacked. Not bad for a man of 87.


Judge all but tosses case against ‘rogue’ trader Guy Gentile
Kevin Dugan – NY Post
A federal judge all but tossed the government’s case against “rogue” trader and ex-FBI informant Guy Gentile ó likely ending the 18-month civil fraud case that Gentile claims was brought in retaliation.

US launches criminal probe into Equifax breach; Report of insider trading investigation adds to pressure on credit reporting agency
David J Lynch and Ben McLannahan – FT
The US Department of Justice has launched a criminal investigation of the Equifax data breach that exposed personal informa

Ex-SAC trader says he forgot facts, seeks to void insider trading plea
Jonathan Stempel – Reuters
A former trader at billionaire Steven A. Cohen’s former hedge fund SAC Capital Advisors LP wants to withdraw his 2013 insider trading guilty plea, saying he had forgotten about two instant messages that show he committed no crime.

Swiss shut down ‘fake’ E-Coin in latest cryptocurrency crackdown
Joshua Franklin- Reuters
Switzerland’s financial watchdog has closed down what it said was the provider of a fake cryptocurrency and is investigating around a dozen other possible fraud cases, in the latest clamp-down on the risks involving virtual money.

Equifax Stock Sales Are the Focus of U.S. Criminal Probe
Tom Schoenberg, Anders Melin and Matt Robinson – Bloomberg
The U.S. Justice Department has opened a criminal investigation into whether top officials at Equifax Inc. violated insider trading laws when they sold stock before the company disclosed that it had been hacked, according to people familiar with the investigation.

Sydney man faces charges for market manipulation
Mr Benjamin Amzalak, 46, of Bondi in New South Wales, has appeared by his counsel before the Downing Centre Local Court today on 10 charges of market manipulation brought by ASIC.

ASIC’s 2017-20 data strategy launched
The Australian Securities and Investments Commission has today launched its data strategy for 2017-20. The strategy, which outlines how ASIC will capture, share and use data, will transition ASIC into a more data-driven and intelligence-led organisation.

Responses To Frequently Asked Questions Regarding Covered Agency Transactions Under FINRA Rule 4210

ISDA Proposes Risk-based Framework for Cross-border Comparability Determinations
The International Swaps and Derivatives Association, Inc. (ISDA) has published a new paper that sets out a risk-based framework for cross-border comparability assessments, based on a set of risk-based principles.

Investing and Trading

‘Buyback trade’ fizzles as stock repurchases slow; The rewards to companies that buy back shares have declined along with the practice
Robin Wigglesworth – FT
The lucrative “buyback trade”, that rewarded investors who bought shares in US companies actively repurchasing their own stock, has fizzled this year, even as the market has marched to record highs.

How Traders Are Making Money as Oil Prices Go Nowhere
Stephanie Yang – WSJ
A placid oil market is emboldening traders to adopt strategies that reap modest gains on small price moves, while risking big losses in the event of larger ones. U.S. oil futures have spent much of 2017 in a range around $50 a barrelótheir least-volatile period in three years… Many traders are adapting by pursuing what is known on Wall Street as a mean-reverting strategy, generally one that wagers prices will fall when oil is above a certain level and rise when it declines below a threshold.

Flattest Curve in Developed World Tells the Bond Market’s Tale
Maciej Onoszko – Bloomberg
Canada’s two-to-30-year spread is narrower than Japan’s; Inflation ‘dead for so long’ it’s hard to see it returning
To get a sense of how blasÈ investors are about inflation look no further than Canada, which sports both the fastest growth among its developed peers and the flattest yield curve.

Bond King Bill Gross Falls to the Middle of the Pack; Three years after leaving Pimco, he’s doing just OK.
John Gittelsohn – Bloomberg
Bill Gross once oversaw $2 trillion in assets and was named fixed-income manager of the decade in 2010 by mutual funds researcher Morningstar Inc. A 2004 biography called him “the bond king.” In an era of index investing, he’s one of a handful of mutual fund managersómuch less bond fund managersówhose name is known outside Wall Street.

Oil Majors Cut Greenhouse Gas Pollution; Big Oil had started fighting climate change before President Donald Trump took office
Anna Hirtenstein – Bloomberg
The world’s five biggest oil companies — Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp., BP Plc and Total SA — collectively curbed their pollution by an average of 13 percent between 2010 and 2015, according to a report from Bloomberg New Energy Finance released ahead of its conference in London on Monday. BP cut the most at 25.5 percent. Exxon, the largest emitter among listed companies, pushed it down by 14 percent.


Eurekahedge: Hedge Fund Index Gains 0.76% In August On CTA, Macro Strength
Hedge funds continued their positive momentum through August, according to an update of Eurekahedge’s Hedge Fund Index, as CTAs and macro strategies shined.

Banking: Throwing the bail-in out with the bath water
Louise Bowman – Euromoney Magazine
What was supposed to have brought clarity is in danger of only adding to the confusion. That is the lesson of a summer of European bank bail-ins and bailouts in the shadow of the region’s Bank Recovery and Resolution Directive (BRRD), which came into effect last year. The resolution of Spain’s Banco Popular ticked all the BRRD boxes regarding private capital and the absence of the state but is now subject to numerous legal challenges.

Hugh Hendry Murders His Hedge Fund; Investors may rue the day the macro strategy died.
Mark Gilbert – Bloomberg
Hugh Hendry is killing off his Eclectica Fund after 15 years. Moreover, he predicts that investors won’t be willing to back other hedge-fund managers pursuing similar strategies — just when they might be most needed.

The World’s Biggest Wealth Fund Hits $1 Trillion
Mikael Holter and Sveinung Sleire – Bloomberg
Norway’s sovereign wealth fund hit $1 trillion for the first time on Tuesday, driven higher by climbing stock markets and a weaker U.S. dollar.


Qatar Pours More Billions Into Local Banks as Crisis Drags On
Zainab Fattah – Bloomberg
Public sector deposits climbed 10.5% in August vs July; Support helped offset drop in foreign deposits, data show
Qatari authorities stepped up their support of domestic banks for the third month in a row in August in an attempt to offset foreign withdrawals as the showdown between the Gulf emirate and a Saudi-led alliance show no sign of abating.

Sasfin Fires KPMG in Wake of South African Gupta Scandal
Renee Bonorchis – Bloomberg
Company chooses Deloitte & Touche as independent sponsor; Financial services company puts auditor role out to tender
Sasfin Holdings Ltd., a South African financial-services company, said it’s firing KPMG LLP as its independent sponsor and searching for a new auditor, becoming the second company to announce it has dumped the firm because of work it did for the politically connected Gupta family.

Russia’s banking woes mount as state-run firms withdraw billions
Max Seddon – FT
State-run firms are withdrawing billions from Russia’s largest privately held lenders as panic spreads following the largest ever bank collapse in the country’s history.


Reuters surveys UK financial services jobs post-Brexit
Reuters Staff
Around 10,000 finance jobs will be shifted out of Britain or created overseas in the next few years if the UK is denied access to Europe’s single market, according to a Reuters survey of firms employing the bulk of workers in international finance.

Brexit Row Deepens as Johnson Discusses Life After Government
Robert Hutton and Tim Ross – Bloomberg
Foreign secretary teases May with hint that he might resign; May to hold Brexit cabinet meeting Thursday, official says
U.K. Prime Minister Theresa May’s attempt to silence Foreign Secretary Boris Johnson in the Brexit debate backfired as he gave an interview in which he openly discussed leaving office.

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