Former CFTC Boss Says Vatican Letter Prepared Him To Be ‘Crypto Dad’

Dec 3, 2019

First Read

Hits & Takes
By JLN Staff

Alan Palmer is the subject of today’s MarketsWiki Education Open Outcry Traders History Project interview. Palmer has traded on the Midam, CME and CBOT.~JJL

Do you have a smartphone? Did you trade on an exchange trading floor? Then you can record a video for the Open Outcry Traders History Project with your smartphone and send us the file via Dropbox. Contact me at and I will send you details and the interview questions.~JJL

The poor potato harvest in the U.S. and the potential for a shortage of French fries has nothing to do with the French and any tariffs the US may be hitting them with. Just saying.~JJL

Spring is coming! Registration for FIA Boca is open.~JJL

HKEX’s Summer Internship & Assistant Programme is now open for applications~JJL

OCC released its November volume numbers, announcing that its total cleared contract volume was 395,903,344 contracts, a 9.6 percent decrease compared to last November. Its year-to-date average daily volume is 19,734,063, down 4.7 percent compared to 2018’s record-breaking numbers.~SR

Today is Giving Tuesday. Make a donation to your favorite charities.~JJL

In our ‘Crypto’ section today we have a story in which Dan Matuszewski, the former head of Circle’s OTC desk, claims that the alleged manipulation of bitcoin’s (BTC) price using Tether (USDT) was actually caused by large volumes of arbitrage trading. It’s an interesting read, whether you agree with him or not.~MR


Metadata, AI, and monitoring global risks: Predata’s Hazem Dawani

While at FIA Expo 2019, Predata CEO Hazem Dawani explained metadata and how his company uses it to monitor the economic, social and security risks of more than 180 countries. Metadata allows the company to alert customers as to patterns and anomalous behavior early on that later lead to major events or shifts in online interests.

Watch the video »


Georgia Governor Picks Crypto CEO for Senate Seat, Defying Trump
Laura Litvan – Bloomberg
Loeffler would fill seat opened by Isakson’s retirement; President lobbied for appointment of loyalist Collins
Georgia Governor Brian Kemp is set to pick financial executive Kelly Loeffler to fill the U.S. Senate seat held by retiring GOP Senator Johnny Isakson, the Associated Press and Atlanta Journal-Constitution reported. The choice is a rebuff of President Donald Trump’s lobbying for appointment of one of his biggest supporters in the House.

*****Senator Kelly Loeffler, from the great state of Georgia, has a nice ring to it.~JJL


Mayor Lori Lightfoot fires Chicago’s police superintendent weeks before his retirement: ‘Eddie Johnson intentionally lied to me’
Jeremy Gorner, Gregory Pratt and John Bryne – Chicago Tribune
Mayor Lori Lightfoot fired police Superintendent Eddie Johnson effective immediately Monday for intentionally misleading her and the public about his conduct when he was found asleep in his running vehicle at a stop sign after a late weeknight out in October.

*****Johnson had a few drinks at the Ceres Cafe in the Chicago Board of Trade Building. For an amateur, a couple of Ceres drinks is enough, period.~JJL


Global Temperature Headed Toward 5 Degree Increase, WMO Says
Laura Millan Lombrana – Bloomberg
World set to exceed target to limit warming to 1.5 degrees; Report released at second day of UN climate talks in Madrid
The world’s average temperature is headed toward a gain of 3 degrees to 5 degrees Celsius (5.4 to 9 degrees Fahrenheit) by the end of the century.

*****Should spur demand for more cold drinks at Ceres.~JJL


Monday’s Top Three
Our top story on Monday was the announcement about the MGEX Suspension of SPIKES Futures Trading on Nov. 29. Second was the Chicago Tribune obituary for Donald Claiborne Lisle, a corn trader at the CBOT for 45 years. And third was Seeking Alpha’s LIBOR’s End Will Sting The CME And Derivatives Dealers


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Lead Stories

Former CFTC Boss Says Vatican Letter Prepared Him To Be ‘Crypto Dad’
Michael del Castillo – Forbes
On the morning of February 6, 2018, when CFTC chairman Chris Giancarlo submitted his written remarks on Bitcoin to the Senate Banking, Housing and Urban Affairs Committee he became a celebrity among crypto fans because he warned the Senators that ignoring this paradigm shift in finance (and tech) would be a mistake and that we should embrace it in part because its adoption might be inevitable, based on his own experience at home. He proceeded to tell the story of how engaged his three children had become with the financial world as a result of their interest in Bitcoin; he concluded the regulatory reaction needed to respect the next generation’s hopes and aspirations.

Risk Managers Grapple With Potential Downsides of AI; Most risk managers in financial services say they aren’t capable of assessing the risks associated with artificial intelligence, according to a survey from Accenture
Kristin Broughton – WSJ
A blind spot for risk managers in financial services is itself becoming a risk: Few say they have the know-how to properly analyze the potential downsides of artificial intelligence.

Intercontinental Exchange Adds Fixed Income Capabilities to ICE ETF Hub
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced it has added new functionality to ICE ETF Hub to support US-listed fixed income exchange traded funds (ETFs). Since launching last week, fixed income primary trades for 17 funds, including the iShares Core U.S. Aggregate Bond ETF (AGG) and the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), have passed through the system.

Atlanta Businesswoman Expected to Be Named Georgia Interim U.S. Senator; Choice to be made over President Trump’s objections
Cameron McWhirter and Lindsay Wise – WSJ
Georgia Gov. Brian Kemp has told GOP leaders in recent days that he will pick Atlanta businesswoman Kelly Loeffler to be interim U.S. senator, despite objections by President Trump, according to people familiar with the conversations.

Former CFTC chair takes fintech role at New York law firm
Chris Giancarlo, who was chair of the U.S. Commodity Futures Trading Commission (CFTC) until July, has been named senior counsel to New York-headquartered law firm Willkie Farr & Gallagher, the company said in a statement on Monday.

Analyst coverage shrinks after fee shake-up; Even larger companies are affected as investment banks retrench
Robin Wigglesworth and Philip Stafford – FT
Investment banks’ cuts to their research departments has begun to weigh on their coverage of even Europe’s largest companies, as regulatory and commercial pressures force them to retrench from unprofitable business lines.

Scandal surrounding disgraced investor Ken Fisher spreads to UK clients
Sam Brodbeck – Telegraph
Thousands of British clients are being swept up in the rapid fall from grace of one of America’s best-known investors. Ken Fisher, the outspoken founder of wealth management firm Fisher Investments, has watched as billions of dollars have been pulled from his funds in the wake of lewd remarks he made at a behind-closed-doors industry conference last month.

World’s biggest pension fund strikes blow against short-sellers; Japanese giant GPIF halts stock lending from its equity portfolio
Leo Lewis and Billy Nauman – FT
Japan’s public pension fund has struck a blow against short-sellers, declaring that it will no longer allow overseas shares to be loaned out from its ¥80tn ($733bn) global equity portfolio.

Companies vow to improve climate disclosure after TCI warning; Moody’s and Airbus among those targeted by hedge fund over emissions
Leslie Hook – FT
Companies including Charter Communications and Moody’s have vowed to improve their environmental disclosures after receiving warning letters from activist hedge fund TCI, which has said it will vote against directors at groups that do not publish their carbon dioxide emissions.

Deutsche Börse appoints new head of trading surveillance office; Andreas Mitschke replaces Michael Zollweg, who has led the trading surveillance office at Deutsche Börse for 20 years.
Hayley McDowell – The Trade
German exchange group Deutsche Börse has appointed Andreas Mitschke as head of the trading surveillance office, after confirming Michael Zollweg’s decision to step down from the position in September.

Moral Money special edition: Ford Foundation’s Darren Walker on reforming philanthropy, capitalism and technology; ‘Privileged people don’t like to be made uncomfortable’
Andrew Edgecliffe-Johnson and Gillian Tett – FT
Andrew Carnegie published the first Gospel of Wealth in 1889 and 130 years later the great library builder is still cited as a model for modern philanthropists. Today’s wealthy donors might not care to recall that just three years after his book appeared, Carnegie also violently suppressed a strike at the Homestead steel mill outside Pittsburgh.

Pimco Joins Chorus of Negative Rate Detractors as Backlash Grows
Piotr Skolimowski – Bloomberg
Bond manager sees evidence policy is having adverse effects; Even central banks are now fretting about risky consequences
Bond powerhouse Pacific Investment Management Co. has become the latest high-profile critic of negative interest rates, warning that one of the key central-bank tools in economically beleaguered Europe and Japan may do more harm than good.

Schwab CFO: Finances were not ‘big driver’ in decision to move HQ to North Texas
Brian Womack – Dallas Business Journal
The Charles Schwab Corp. may be moving from San Francisco to North Texas, but a key executive doesn’t want you to think it’s all about saving money.

Karvy Stock Broking Case: 90% Investors Get Back Securities On Prompt SEBI Action
Bloomberg Quint
Markets regulator Securities Exchange Board of India’s prompt action against Karvy Stock Broking Ltd. has resulted in nearly 83,000 investors getting back their securities that were illegally transferred by the broker to its own account and w

Exchanges, OTC and Clearing

SGX RegCo sharpens tools used to deal with market manipulation risk
Singapore Exchange Regulation (SGX RegCo) has sharpened the tools used to deal with manipulation risk in the stock market by restricting accounts involved in unusual activities in a stock and concurrently issuing a Trade with Caution alert on the same stock.

CME Group Averaged 18.2 Million Contracts Per Day in November 2019
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 18.2 million contracts during November 2019. Open interest (OI) at the end of November was 131 million contracts.

Nasdaq November 2019 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for November 2019, on its investor relations website.

Equity phobia: New Frankfurt School study explains German investment behavior
Deutsche Börse
The Frankfurt School of Finance & Management presented its new study “Zum Rätsel der Aktienmarktteilnahme in Deutschland” on Monday, 2 December in the Frankfurt Stock Exchange. In their study, commissioned by Deutsche Börse, scientists from the Frankfurt School and Goethe University conclude that the combination of risk aversion and overestimated risk, which is mainly caused by an information deficit, prevents Germans from investing more shares ,

Cash markets will turnover 126.7 billion euros in November
Deutsche Börse
Deutsche Börse’s cash markets generated sales of EUR 126.7 billion in November (previous year: EUR 140.4 billion). Of this, EUR 113.4bn was attributable to Xetra (previous year: EUR 129.0bn), bringing the average Xetra daily turnover to EUR 5.4bn. 2.7 billion euros were transacted at the Frankfurt Stock Exchange (previous year: 2.8 billion euros) and 10.6 billion euros at the Tradegate Exchange (previous year: 8.6 billion euros).

Andreas Mitschke will be the new head of the Market Surveillance
Deutsche Börse
As of January 1, 2020, Andreas Mitschke will take over the management of the Trading Surveillance Office (HÜSt) of the Frankfurt Stock Exchange and the derivatives exchange Eurex Deutschland. He succeeds Michael Zollweg, who retires ( as reported in September ) from this public office after 20 years.

Commerzbank, Credit Suisse and UBS launch first live transactions on the Deutsche Börse / HQLAx securities lending platform; Successful introduction of DLT-based operating model
Deutsche Börse
Deutsche Börse and HQLA X have successfully launched their jointly developed DLT (Distributed Ledger Technology) solution for the smooth exchange of collateral in the securities lending market. The live transactions were conducted by Commerzbank, Credit Suisse and UBS on the Eurex Repo F7 trading system.

OCC November Cleared Volume Down 9.6 Percent
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in November reached 395,903,344 contracts, a 9.6 percent decrease compared to last November. OCC’s year-to-date average daily cleared contract volume is 19,734,063 down 4.7 percent compared to 2018’s record-breaking pace


XTX Markets hires eFX client analytics head from BNP Paribas; Andrew Webber joins XTX Markets after just over two years with investment bank BNP Paribas.
Hayley McDowell – The Trade
The head of eFX client analytics at French investment bank BNP Paribas has departed to join the global distribution team at XTX Markets.

Plato and BMLL Technologies introduce free market quality data tool; Platometrics provides market data on European equities, including a view of liquidity across venues, order fill rates and intraday volatility.
Hayley McDowell – The Trade
Plato Partnership has teamed up with data engineering and analytics firm BMLL Technologies to launch Platometrics, which provides data on market quality free of charge.

FBI Warns FaceApp Could Pose Counterintelligence Threat; The viral app and similar products could be exploited by the Russian government, federal authorities say
Sarah E. Needleman – WSJ
The Federal Bureau of Investigation warned that certain Russian-made software, including the viral hit FaceApp, pose a potential counterintelligence threat and could put Americans’ private data at risk.

Is the fintech bubble bursting?
Jemima Kelly – FT
This year, it has felt like hardly a week has passed without some fintech declaring nonchalantly that it’s raised another few hundred million pounds. On Monday, it was the turn of a little-known (to us anyway) start-up called Hastee, which gives employees access to their pay as they earn it. It announced that it had raised £208m in its latest funding round.

California’s Fintech Startups Are Invading New York; Brex has moved its CFO to Manhattan, and Stripe is on a New York hiring spree. But the city’s fintech sector still lags California’s.
Julie Verhage – Bloomberg
When two Irish brothers started Stripe Inc. together in 2010, there was little question about where they should put their headquarters. It had to be San Francisco.

OnixS CME iLink 3 Binary Order Entry Handler SDK GA Release Now Available
Migration from iLink 2 to iLink 3 is a CME mandated change for access to CME Globex platform Market Segment Gateway (MSGW) sessions. To enable this, the OnixS CME iLink 3 Binary Order Entry Handler SDK GA release is now available.


Former head of Circle OTC says there’s more to the Tether narrative
Aislinn Keely – The Block Crypto
The former head of Circle’s OTC desk, Dan Matuszewski, went on record with On The Brink with Castle Island’s Nic Carter this week, talking about Circle’s involvement with Tether. Matuszewski sought to dispel much of the concern surrounding the creation of large swaths of Tether in 2017, saying a spread between Bitfinex and Coinbase led to a unique investment opportunity resulting in the creation of so many Tethers. He also said the Tethers were legitimately issued, since he, himself, funneled millions towards their generation.

WisdomTree Launches Physically Backed Bitcoin ETP on SIX Swiss Exchange
Daniel Palmer – Coindesk
WisdomTree Launches Physically Backed Bitcoin ETP on SIX Swiss Exchange
A new bitcoin exchange traded product (ETP) has just listed on Switzerland’s SIX stock exchange, and it’s physically backed by the underlying crypto.

Forget the paper trail — blockchain set to shake up trade finance; Technology could streamline process and open up market for creditors and borrowers
Laurence Fletcher – FT
Blockchain technology could radically shake up trade finance, one of the most archaic corners of the financial world, by reducing its reliance on paper documents.

Huobi Says It’s Joining a Chinese Government-Led Blockchain Alliance
David Pan – Coindesk
Huobi China has joined a state-backed blockchain alliance envisioned to be one of the most influential infrastructure services providers in the country. The Chinese branch of Huobi Group announced its membership in the Blockchain-Based Services Network (BSN) Development Alliance at its launch on Sunday in Hangzhou of Southern China, the company told CoinDesk.

Opinion: 6 things retirees — and advisers — should know about new guidelines for cryptocurrency tax treatment
Katie Von Kohorn – MarketWatch
On Oct. 9, 2019, the IRS issued its first guidance since 2014 on the tax treatment of virtual currency. Although few retirees may now own bitcoin or other cryptocurrencies, risk-tolerant retirees may be interested in investing in virtual currency in the future. What does this guidance mean for cryptocurrency investors?

Another bitcoin exchange-traded product gets launched, this time by traditional asset manager WisdomTree
Yogita Khatri – The Block
Traditional asset management firm WisdomTree Investments, with over $60 billion in client assets, has ventured into the cryptocurrency space with the launch of a bitcoin exchange-traded product (ETP).

Binance acquires Chinese blockchain data startup DappReview for undisclosed sum
Yogita Khatri – The Block
Cryptocurrency exchange Binance has acquired Beijing-based blockchain data startup DappReview, which tracks nearly 4,000 decentralized applications (dapps) built on over 10 public blockchains, including Ethereum and Tron.

What Is Bitcoin Halving? Definition, Date And More
Ron Mendoza – International Business Times
The crypto world is bracing itself for the next Bitcoin (BTC) “halving,” but the event’s actual impact is ostensibly mere forecasts rooted from statistical models and historical comparisons. Yet those who possess a hoard of the popular crypto and even those who are just gadfly spectators are paying close attention to this upcoming change to Bitcoin’s fundamentals. But what is halving? When will it happen? And how can anyone gauge the likely consequences of this supply limiting protocol programmed to the world’s favorite crypto?

SEC appoints new cyber unit chief to police ICOs and other blockchain ‘violations’
Yogita Khatri – The Block Crypto
The U.S. Securities and Exchange Commission (SEC) has appointed Kristina Littman as the new chief of its cyber unit, which targets “violations” involving initial coin offerings (ICOs) and distributed ledger or blockchain technology. Littman succeeds Robert Cohen, who left the SEC in August, according to an announcement Monday. Cohen led several cryptocurrency cases, including suing Kik Interactive for allegedly selling unregistered securities as part of its $100 million ICO. Cohen left the SEC to join law firm Davis Polk & Wardwell LLP as a partner.

Sanctions Weren’t Discussed at North Korea Crypto Conference, Attendee Says
Brady Dale – Coindesk
An Italian citizen who attended the North Korean cryptocurrency conference in April says the U.S. government’s charges against his friend and ethereum developer Virgil Griffith are overblown. Griffith has been charged under the International Emergency Economic Powers Act for allegedly providing technological training that would make it easier for the Democratic People’s Republic of Korea (DPRK) to evade U.S. economic sanctions. He is in federal custody for providing “highly technical information to North Korea,” as U.S. Attorney Geoffrey S. Berman put it in last week’s announcement.

Former Charlie Shrem Attorney to Represent Arrested Ethereum Dev
Marie Huillet – Cointelegraph
Renowned trial attorney Brian Klein has revealed he will represent Virgil Griffith, the developer recently arrested for participating in a blockchain conference in North Korea. In a tweet posted on Dec. 3, Klein stated that his client disputes the “untested allegations in the criminal complaint” and had been temporarily released from jail pending his trial.

Ethereum Developer Virgil Griffith to Be Released From Jail Pending Trial
Brady Dale – The Block
A judge ruled that the U.S. Department of Justice has enough evidence to move a case against ethereum developer Virgil Griffith to trial.

Institutional Crypto is Coming
Galen Stops – Profit & Loss
Major financial institutions will move into the crypto space, despite the fact that many of them have avoided it thus far, argues David Mercer, CEO of LMAX Exchange Group, in a new video interview with Profit & Loss.


Bloomberg in 2020: The Buyout, Not the Candidate; Were the financial-data company Michael Bloomberg founded ever to do a deal, it would be a momentous event for fintech investors
Telis Demos – WSJ
When most people think about a race for Bloomberg, they probably have in mind Michael Bloomberg joining the Democratic primary. But investors might imagine something else entirely: the race for his eponymous financial data giant, Bloomberg LP.

Trump campaign denies Bloomberg reporters access to events; Media company accused of bias after billionaire owner launches 2020 presidential run
Anna Nicolaou and Demetri Sevastopulo – FT
Donald Trump will not grant Bloomberg News reporters access to his campaign events, accusing the media company of bias as its billionaire owner Michael Bloomberg runs for president, the Trump campaign said on Monday.

France vows EU retaliation after Donald Trump’s tariff threat; US president adds to investors’ trade fears by warning that China deal could come after election
Victor Mallet, James Politi and Jim Brunsden – FT
Paris has hit back at the Trump administration’s threat to impose 100 per cent tariffs on up to $2.4bn of French goods with France’s finance minister vowing the EU was ready to retaliate with “a strong riposte”.

Why Digital Taxes Are the New Trade War Flashpoint
William Horobin and Aoife White – Bloomberg
Big internet companies have long been the target of complaints that they don’t pay enough in taxes. Fed up, France imposed a 3% levy on the digital revenue of companies that make their sales primarily in cyberspace, such as Facebook Inc. and Alphabet Inc.’s Google. Other countries also are targeting companies, many of which are American, that have multinational earnings that often escape the taxman’s grip. The U.S. isn’t taking this sitting down.

Trump Wields Tariffs Again in a Reminder How Much He Likes Them
Shawn Donnan – Bloomberg
If you are a believer in the apparent market consensus that President Donald Trump’s trade wars have peaked and that sunny days lay ahead for the global economy, then Monday was a very bad day and Tuesday isn’t looking much better.

Here’s What Happens to Markets If U.S. Tariffs on China Kick in Dec. 15
Eric Lam and Gregor Stuart Hunter – Bloomberg
President Donald Trump’s latest missives on trade are a wake-up call to markets close to record highs that a major deadline is looming with China.

Trump Impeachment Is Based on Law, Not Politics; The constitutional standard is clear: No president is a king.
Cass R. Sunstein – Bloomberg
With the coming impeachment vote in the House and a possible trial in the Senate, the U.S. has reached a rare defining moment.

Georgia Governor Picks Crypto CEO for Senate Seat, Defying Trump
Laura Litvan – Bloomberg
Georgia Governor Brian Kemp is set to pick financial executive Kelly Loeffler to fill the U.S. Senate seat held by retiring GOP Senator Johnny Isakson, the Associated Press and Atlanta Journal-Constitution reported. The choice is a rebuff of President Donald Trump’s lobbying for appointment of one of his biggest supporters in the House.

Trump Doesn’t Understand Currency Wars, Either; His misguided decision to reinstate steel tariffs on Brazil and Argentina misses one thing: Depressed currencies mean they are the losers.
John Authers – Bloomberg
What a difference a decade makes. Back in September 2010, Guido Mantega, Brazil’s then-finance minister, was complaining bitterly about “currency wars,” and claiming the Federal Reserve’s ultra-loose monetary policy of the time was unfairly hurting his economy. “We’re in the midst of an international currency war, a general weakening of currency,” he said then. “This threatens us because it takes away our competitiveness.”

Warren Win Unlikely to ‘Crush’ Equity Market, Bernstein Says
Felice Maranz – Bloomberg
Economists say presidential races don’t dominate markets; World War II and dot-com bust pushed down stocks, not election
Elizabeth Warren’s run for president won’t necessarily send stocks tumbling, as argued by some on Wall Street like Leon Cooperman and hedge fund manager Paul Tudor Jones, according to Bernstein. Especially if the economy continues to grow.


Kristina Littman Named Chief of the Cyber Unit
The Securities and Exchange Commission today announced that Kristina Littman has been named Chief of the Division of Enforcement’s Cyber Unit, a national, specialized unit that focuses on protecting investors and markets from cyber-related misconduct. Ms. Littman succeeds Robert Cohen, who left the Commission in August 2019.

CFTC’s Market Risk Advisory Committee to Meet December 11
The U.S. Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC) will hold a public meeting on December 11, 2019 at CFTC’s Washington, DC headquarters. CFTC Commissioner Rostin Behnam is the sponsor of the MRAC.

CFTC Commissioner Behnam Announces Two New Subcommittees of the Market Risk Advisory Committee
U.S. Commodity Futures Trading Commission Commissioner Rostin Behnam today announced the creation of the Central Counterparty (CCP) Risk and Governance and Market Structure Subcommittees (Subcommittees) from the current membership of the Market Risk Advisory Committee (MRAC). Commissioner Behnam is the sponsor of the MRAC.

Guidance on the annual affirmation requirement for entities currently operating under an exemption from CPO or CTA registration
The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end, which is February 29, 2020 for this affirmation cycle.

Lagarde’s green push in monetary policy would be huge step; Critics say climate change is political but economists say it could be part of ECB remit
Martin Sandbu – FT
Last week’s gush of enthusiasm for green finance suggests European politicians might finally walk the walk on climate change.

Investing and Trading

To Battle Passive Funds, Active Investors Shun Diversification; Stock pickers are making more concentrated bets, hoping to distinguish themselves from passively managed, diversified index funds. Trouble is, the results haven’t been great.
Mischa Frankl-Duval – WSJ
Conventional investing wisdom holds that the safest portfolios are highly diversified and spread across a considerable number of assets. But that isn’t stopping plenty of stock pickers from running in the opposite direction.

Investors snap up NY Fed loans as cash crunch fears linger; Central bank’s year-end repo auction attracts demand in excess of $25bn on offer
Joe Rennison – FT
Investors clamoured on Monday to secure financing over the end of the year, snapping up $25bn of short-term loans offered by the US Federal Reserve in an attempt to insulate themselves from a potential spike in borrowing costs.

Junk Bonds Are a Haven in a Twitter Storm; Twitter doesn’t really need to raise money, but it’s $600 million debut in the high-yield market will no doubt be welcomed with open arms.
Marcus Ashworth – Bloomberg
Twitter Inc. is joining its peers in the Big Tech club by issuing regular corporate debt. It’s bringing an inaugural high-yield bond this week to raise $600 million at an eight-year maturity.

Jolt of Espresso May Cost More as Drought Wilts Indonesia’s Coffee
Yoga Rusmana – Bloomberg
Output could decline to the lowest level in almost a decade; Drought-hit regions are mostly producers of robusta coffee
Coffee production in Indonesia will probably shrink to the smallest in almost a decade after a drought withered flowering, damping prospects for next year’s harvest, according to an industry association.


Deutsche Bank’s top internal dealmaker joins hedge fund; Departure of James Ruane comes as lender prepares for capital markets day
Olaf Storbeck – FT
Deutsche Bank’s top internal dealmaker has quit to join a hedge fund, underlining the challenge Germany’s biggest bank faces in keeping senior executives during the most radical restructuring in its 149-year history.

TCI does more on climate action than ethical green funds; Investor Christopher Hohn seeks same reaction as campaigner Greta Thunberg
Matthew Vincent – FT
When a hedge fund manager worries about the rest of humanity, you know it must be serious. That is one reading of the headline “Hedge fund TCI vows to punish company directors over climate change”. TCI, however, is not a typical hedge fund. Founded in 2003 by Christopher Hohn, it has always been more of a long-term activist, seeking engagement with listed businesses. And, as befits someone who named his firm after The Children’s Investment fund it runs, Sir Christopher’s paternal instincts already give rise to $150m of donations to climate groups each year.

Dalio’s Bridgewater Falls Out of Favor at UOB Private Bank
David Ramli – Bloomberg
Ray Dalio’s Bridgewater Associates LP, the world’s biggest hedge fund, has fallen out of favor at a Singapore-based private bank that advises some of Asia’s wealthiest people.

JP Morgan becomes primary dealer in Israel government bonds
JP Morgan has agreed to become a primary dealer in Israel’s bond market, the country’s Finance Ministry said on Tuesday.

Nomura’s Departing CEO Leaves a Work in Progress; The stock’s revival has helped Koji Nagai avoid humiliation, but his successor still has plenty to do.
Nisha Gopalan – Bloomberg
Koji Nagai has had the last laugh. Having withstood pressure from shareholders to quit earlier this year, the Nomura Holdings Inc. chief executive officer looks to be leaving the role on his own terms. Shares of Japan’s biggest brokerage have surged almost 70% since June, when he was reappointed to the board with the narrowest margin of his seven-year reign. He will sense vindication.


OPEC and Aramco Are Too Close for Comfort; Saudi Arabia’s push to extend OPEC’s oil production cuts justifies investor concerns about the company’s close relationship with the state
Spencer Jakab and Rochelle Toplensky – WSJ
This week will bring another reminder that Aramco isn’t a normal oil company, and its initial public offering is highly abnormal.

Indonesia looks to set up sovereign wealth fund; Initiative would be modelled on Singapore’s Temasek with focus on start-ups
Henny Sender – FT
Indonesia is looking to establish a sovereign wealth fund modelled on Singapore’s state investment vehicle, Temasek Holdings, or Khazanah, the Malaysian equivalent, to support local start-ups and to boost economic growth.

Chinese bank accused of forcing Hong Kong employee to quit over protests; Ex-economist alleges Bank of Communications did not want a local representing it
Primrose Riordan, Leo Lewis and Alice Woodhouse – FT
A former chief economist of Bank of Communications, the Chinese state-owned bank, has alleged he was forced to resign because he was a Hong Konger, highlighting concerns of a purge in the city’s financial services industry following months of pro-democracy protests.

OPEC+ Set to Debate Oil-Cut Cheating as Russia Seeks Rule Change
Olga Tanas – Bloomberg
Moscow will ask for condensate to be accounted for differently; Saudis signal they won’t accommodate poor cuts compliance
OPEC+ is poised for a debate about lax implementation of oil-production cuts in Vienna this week, with Russia asking to discuss a rule change that would exclude some of its oil production from the group’s quota.

ECB Set to Gain Another German QE Skeptic on Executive Board
Jana Randow and Alexander Weber – Bloomberg
Schnabel suggests she would have voted against asset purchases; Professor warns against wrong, aggressive narratives about ECB
The European Central Bank just received a hint that traditional German views on monetary policy will continue to feature prominently in its internal debate.

Latvia Nominates Kazaks to Lead Scandal-Hit Central Bank
Aaron Eglitis – Bloomberg
Euro-area member is replacing Rimsevics, who’s facing trial; First task will be to rebuild image after dirty-money scandals
Latvia’s ruling coalition nominated Martins Kazaks to become the central bank’s next governor and replace Ilmars Rimsevics, who’s finishing his term under a cloud of bribery allegations and a criminal trial.

Traders Look to Profit in China Bond Market That Won’t Move
Bloomberg News
Yield on 10-year note trades in narrowest range in seven years; Fund managers buy policy bank bonds, dollar-denominated debt
Making money in a market that moves so little has become a key challenge for China’s sovereign-bond traders. With 10-year notes trading in the narrowest range in seven years, investors are casting their nets far and wide to enhance returns. It’s policy bank bonds for JPMorgan Asset Management and PineBridge Investments Asia Ltd., dollar-denominated debt for Nissay Asset Management Corp. and convertible bonds for Morgan Stanley Huaxin Fund Management Co.

Bankers Hit by Record Negative Rates Are Warned of Next Wave
Morten Buttler – Bloomberg
After living with negative interest rates longer than anyone else, bankers in Denmark need to prepare for the next big threat.


Moody’s Cuts Outlook for U.K. Banks, Citing Brexit Concern
Harry Wilson – Bloomberg
EU trade deal won’t offset economic hit of withdrawal: Moody’s; Mortgage competition driven by ring-fencing is also a headwind
British banks have worked hard to bolster their finances since the global crash a decade ago, but Brexit might be about to undo their good work, according to a warning from Moody’s Investors Service.

Britain’s ‘Brexit election’: All you need to know about the vote
David Child – Al Jazeera
London, England – Britons will head to the polls on December 12 for a snap general election which was called to break the country’s Brexit impasse. The ballot is expected to shape how, or whether, the United Kingdom finally quits the European Union almost three and a half years after the EU referendum. Prime Minister Boris Johnson’s Conservative Party and Jeremy Corbyn’s main opposition Labour Party have presented radically different proposals for ending months of political deadlock over the issue. The electorate, also deeply divided over Brexit, will now have its say in a poll dubbed the “most important” for a generation. Here is what you need to know.

General election 2019: Nigel Farage urges tactical voting to back Brexit
BBC News
Brexit Party leader Nigel Farage has urged people who want the UK to leave the EU to vote tactically in the general election. He urged Labour and Tory voters to back his party if they thought its candidate would fight harder for Brexit. Speaking in Buckley, Flintshire, Mr Farage said the Brexit Party was a danger to Labour’s dominance in Wales. He denied that Prime Minister Boris Johnson’s pro-Brexit stance had left his party struggling for relevance. The Brexit Party is standing in 275 of the 650 constituencies after a decision not to contest the seats won by the Conservatives in 2017.

General election 2019: Opposition warning over post-Brexit US trade deal
BBC News
Opposition leaders are using Donald Trump’s visit to the UK to raise concerns about the terms of a post-Brexit trade deal with the US. Jeremy Corbyn said there would be “no deal” under a Labour government if the US insisted the NHS was included in trade talks, while the SNP reiterated its call for a “legal lock” to stop it. Boris Johnson said he “categorically ruled out” the NHS being on the table. In a press conference, Mr Trump denied having any interest in the NHS.


Why Entrepreneurs Don’t Learn From Their Mistakes
Francis Greene – WSJ
Part of the folklore about successful entrepreneurs is that they succeeded because they first failed. “Fail fast,” entrepreneurs are often told, and you’ll learn valuable lessons that will help you in your next venture. But this is a myth. While second-chance stories are comforting, my research shows that entrepreneurs don’t learn from their mistakes. In fact, it’s the opposite: Fail once and you’re most likely to fail again.

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