Hits & Takes
We mourn the passing of former CFTC Commissioner Bart Chilton. He was full of life while he was among us. He and I shared time at Purdue University, though we did not know each other then. My condolences to his family, friends and colleagues. He will be missed.~JJL
We are collecting statements and reflections on the life of Bart Chilton and will be publishing them on a special page here on JohnLothianNews.com. Email your reflections to email@example.com~JJL
Also condolences to the family, friends and colleagues of Sen. Richard Lugar of Indiana on his passing, especially his former aide, FIA President & CEO Walt Lukken. Walt Lukken offered a statement below on both Chilton’s and Lugar’s passing.~JJL
Eurex is holding “Derivatives Forum Amsterdam 2019” on June 13. Derivatives Forum is reserved for Eurex members and representatives of companies active in the field of professional investing.~JJL
My weekend camping trip with the Scouts to Galena, Ill. and Grant’s Pilgrimage was cut short by a spring snowstorm that came much faster than expected. We were packing up and leaving a day early because we were camping on the side of a soft, grassy hill that was going to be difficult to get off of with the snow. Two of our cars did get caught and we had to get a tractor to pull the cars out.~JJL
The Spread – Calm Waters, For Some
The big deal for Harvest Volatility Management fell through, and there were even more regulatory and enforcement happenings of note – we give all the updates in this episode of “The Spread.”
Watch the video and see the stories referenced here »
Statement of FIA President and CEO Walt Lukken on the Passing of Former CFTC Commissioner Bart Chilton
FIA President and CEO Walt Lukken today issued the following statement on the passing of former CFTC Commissioner Bart Chilton: “Our industry mourns the unexpected passing of a former colleague, Bart Chilton, who served with me at the CFTC. Bart was a colorful friend that lived life to the fullest with determination, humor and passion for everything he did in life. We extend our sincere condolences to his wife and family.”
Walt Lukken also had this statement about the passing of former Sen. Richard Lugar:
“It’s difficult for me to articulate the influential impact that Senator Dick Lugar had on my life. He was a model of decency and compassion for all of us who worked for him. A member of the Futures Industry Hall of Fame, he and Patrick Leahy led the first subcommittee of the Senate Agriculture Committee that oversaw the CFTC shortly after its formation. He was part of every CFTC reauthorization for over 30 years and chaired the Agriculture Committee during the passage of the Commodity Futures Modernization Act of 2000 – the bipartisan legislation that implemented principles-based regulation and began an era of unmatched growth and innovation for exchange-traded derivatives. But what I most remember is his deep caring of the staff members who worked for him—the afternoon runs, the stories of meeting Bono and Lou Reed at the White House, or the beautiful hand-written notes noting my accomplishments as well as my personal losses that I will cherish forever. I am deeply saddened by his loss but equally saddened that there are no longer people like Dick Lugar in the world. I hope i can live up to his values and pass them on to my children. Rest In Peace Senator.”~Walt Lukken
Former Sen. Richard Lugar, Advocate for Arms Control, Dies at 87; The Republican represented Indiana for 36 years
Louise Radnofsky and Kate O’Keeffe – WSJ
Richard Lugar, a leading Republican voice on arms control in his 36 years as a senator representing Indiana, died Sunday in a Virginia hospital. He was 87.
*****He was a great senator.~JJL
CFTC, SEC Issue Investor Alert; Guidance warns of websites related to digital assets
The Commodity Futures Trading Commission’s (CFTC) Office of External Affairs (OEA) and the Security and Exchange Commission’s (SEC) Office of Investor Education and Advocacy (OIEA) released, Watch Out for Fraudulent Digital Asset and “Crypto” Trading Websites, an Investor Alert this week to warn investors to scrutinize investment opportunities through websites purporting to operate advisory and trading businesses related to digital assets. These websites often contain “red flags” of fraud including claims of high guaranteed returns and promises that the investments carry little or even no risk.
*****Nice to see the CFTC and the SEC work together.~JJL
Why your latte costs nearly $5, despite plummeting coffee-bean prices
Jeanette Settembre – MarketWatch
The price of a pound of coffee beans may be dropping fast, but that doesn’t mean consumers will get a break on the cost of their morning brew.
A pound of wholesale arabica coffee beans, the type of bean used by big coffee chains including Starbucks has been selling for under $1 since March, the lowest price point in more than a decade. One pound of ground coffee will make about 48 cups.
***** I am old enough to remember a cup of coffee for 10 cents.~JJL
Stablecoin Not Stable?; No More Criminal Prosecution; Foreign Corrupt Practices
Gary DeWaal – Bridging the Week
New York regulators continued an aggressive approach against certain entities engaged in virtual currency businesses when the state’s Attorney General’s office obtained an ex parte order precluding companies associated with a very popular international cryptocurrency exchange and stablecoin from utilizing fiat currency reserves backing the stablecoin to help fund operations of the exchange. The NY AG alleged that the respondents had previously engaged in such activities without disclosure to customers. Separately, the Department of Justice determined not to retry a purported programmer to the “Flash Crash” spoofer following the mistrial declared by the judge overseeing the criminal trial of the programmer earlier this month.
Friday’s Top Three
Our top read story on Friday was Bloomberg’s Tether Issuer, Bitfinex Operator Accused of $850M Cover-Up by NY. Second was Crain’s Chicago Business’ piece Chicago’s crypto industry takes a hit. Third was Bloomberg’s World Trade Volumes Plunge at Fastest Pace in a Decade
149,797,190 pages viewed; 23,695 pages; 218,654 edits
Former U.S. CFTC Commissioner Bart Chilton Dies at Age 58
Hailey Waller and Nick Baker – Bloomberg
Bart Chilton, the former U.S. Commodity Futures Trading Commission official who called for tighter regulation of swaps and derivatives, and was known for his long blond hair that stood out in buttoned-down Washington, has died.
The TV channel RT America, for which Chilton hosted the show “Boom Bust,” announced the death late Saturday, citing an unspecified “sudden illness.” He was 58.
The Chicago Brokerage Chasing Clients Wall Street Left Behind
Catherine Ngai and Cristiane Lucchesi – Bloomberg
R.J. O’Brien looks to target smaller to mid-sized energy firms; Sees natural gas as opportunity due to higher volumes, exports
R.J. O’Brien & Associates LLC is adding staff in offices from Houston to London, in a bid to expand its energy offerings even as major players retreat from commodities amid lackluster profits and increased oversight.
How Schwab Ate Wall Street; The firm was a discount broker for amateurs. Then its CEO turned it into a personal-finance supermarket that’s dragging rivals in its wake.
Lisa Beilfuss – WSJ
When Walt Bettinger’s 3 a.m. alarm sounds, among the first things the Charles Schwab Corp. SCHW -0.90% chief executive does is check how much net new money his company has pulled in over the past 24 hours. Last year, that was an average of $624 million a day—more than its three biggest Wall Street rivals combined.
UK’s financial watchdog launches most dawn raids for a decade; FCA undertook 25 dawn raids in 2018, nearly double the previous year
Caroline Binham – FT
Dawn raids by the UK’s financial watchdog are at their highest level in almost a decade as the Financial Conduct Authority carries out more investigations than ever before and tries to rebuff criticism that it slow to react to misconduct.
UK fraud chief moves to speed up investigations; After taking ‘drains-up’ look at SFO probes, Lisa Osofsky is aiming to improve agency’s focus
Barney Thompson – FT
The UK’s Serious Fraud Office needs to improve the way it handles evidence in fraud and corruption cases in order to speed up its investigations and prosecute the right people, the agency’s director has said.
Deutsche Bank chairman rejects investment bank strategy overhaul; Paul Achleitner defends turnround plan after collapse of merger talks with Commerzbank
Olaf Storbeck – FT
Deutsche Bank’s investment bank does not need a fundamental strategic overhaul in the wake of the collapse of merger talks with rival Commerzbank, according to the German lender’s chairman.
LCH CDSClear adds Banca IMI as first Italian clearing member; Banca IMI now has access to clearing of credit derivatives and will act as a clearing broker for its client base.
Hayley McDowell – The Trade
Banca IMI has signed up as a clearing member for credit default swaps at LCH CDSClear, making it the first Italian clearing member to join the service.
Crypto world keeps faith in Tether, even with news of fraud investigation
Money needs to be able to buy stuff. That’s always been a problem with cryptocurrency. The number of merchants who accept bitcoin directly is small, and converting bitcoin to cash dollars is nontrivial.
Bitfinex Crypto Case Shows Smaller Investors Face Greater Risk
Matthew Leising – Bloomberg
The latest allegations against a major player in the nascent world of cryptocurrencies have something in common with past financial scandals: The little guy may end up holding the bag.
In a civil suit filed Thursday, New York’s attorney general accused one of the largest Bitcoin exchanges of hiding the loss of about $850 million in client and corporate cash. Multimillion-dollar accounts were protected, sometimes by the use of custodian banks in New York. Smaller investors received less assurance, with their funds sent to firms around the world, according to two people with knowledge of the matter.
E*Trade may offer trading for Bitcoin and Ethereum; It’s one step closer to taking cryptocurrency into the mainstream.
Jon Fingas – Engadget
Cryptocurrency traders might soon have an important ally. A Bloomberg source claims E*Trade is in the midst of work to enable trading cryptocurrencies, starting with Bitcoin and Ethereum. It would think about adding other currencies going forward, according to the tipster. It’s not certain exactly when trading would open.
Exxon’s Refining `Shocker’ Puts Rockefeller Legacy in Doubt
Kevin Crowley and Joe Carroll – Bloomberg
Oil giant’s fuel-making unit lost almost $3 million a day; Senior vice president defends soundness of integrated model
Exxon Mobil Corp.’s worst refining performance in almost two decades may revive questions about the so-called integrated model engineered by founder John D. Rockefeller and espoused by every CEO in the company’s 149-year history.
Tradeweb’s 50% Rally Sets Stage for Questions About Debt Market
By Felice Maranz – Bloomberg
Bond and derivative trading platform Tradeweb Markets Inc. may face fresh scrutiny about debt trading and fierce competition next week, when some Wall Street analysts are poised to roll out their first comments on a stock that’s gained more than 50 percent since its IPO in early April.
Exchanges, OTC and Clearing
OCC Named Best Clearing House by Markets Media for Second Consecutive Year
OCC, the world’s largest equity derivatives clearing organization, announced today that it was named Best Clearing House by Markets Media for the second consecutive year. The award was presented on April 25 in New York as part of the publication’s 6th Annual Markets Choice Awards.
UOB, SGX and CCOIC sign MOU to help Chinese enterprises use Singapore as a launchpad for ASEAN expansion
United Overseas Bank Limited (UOB), Singapore Exchange Limited (SGX) and the China Chamber of International Commerce (CCOIC) have signed a Memorandum of Understanding (MOU) to help Chinese enterprises use Singapore as a launchpad to expand into ASEAN. The MOU signing was in conjunction with the second Belt and Road Forum in Beijing and was witnessed by Mr Chan Chun Sing, Singapore Minister for Trade and Industry, and Dr Koh Poh Koon, Senior Minister of State for Trade and Industry.
Banca IMI joins LCH’s CDSClear as first Italian clearing member
The investment bank of Intesa Sanpaolo Group live clearing CDS at LCH SA; Latest milestone builds on CDSClear’s continued growth in Europe, with record volumes processed at CDSClear in 2018; CDSClear provides the largest product offering of any credit derivatives clearing service
LCH, a leading global clearing house, today announced that Banca IMI, the investment bank of Intesa Sanpaolo Group, has joined its CDSClear service as its first Italian member. By joining the service, Banca IMI now has access to clearing of credit derivatives referencing both Single Names and Indices. It will also act as a a clearing broker, offering CDS clearing services to its client base.
“Changing Views – 20 Years of Art Collection Deutsche Börse” at the Foam Fotografiemuseum Amsterdam;
Deutsche Börse Photography Foundation
“Changing Views – 20 Years of Art Collection Deutsche Börse” at the Foam Fotografiemuseum Amsterdam; Exhibition with four consecutive presentations from May 3 to July 7, 2019 / Exhibition is part of the Art Collection anniversary program
On the occasion of the 20th anniversary of the Art Collection Deutsche Börse, the Foam Fotografiemuseum Amsterdam is presenting a comprehensive range of works from the important collection of contemporary photography, “Changing Views – 20 Years of Art Collection Deutsche Börse” . The Art Collection Deutsche Börse now comprises around 1,800 works by more than 120 international artists, including greats such as Diane Arbus, Walker Evans, Bernd & Hilla Becher, Rineke Dijkstra or Dana Lixenberg, younger photographers such as Tobias Zielony and Mike Brodie and discoveries such as Gerd Danigel or Gabriele and Helmut Nothhelfer.
Subscription of Frequentis AG started on the Frankfurt Stock Exchange; Price range of 18 to 21 euros / IPO planned for 14 May
The Frankfurt Stock Exchange today launched the subscription to the stock market listing of Frequentis AG (ISIN: ATFREQUENT09 ). The company plans to list in the General Standard . The subscription is expected to continue until 8 May. The price range was set at 18 to 21 euros per share. The first trading day should be May 14th.
Commerzbank leads $9 million investment in FICC analytics firm; Commerzbank and Octopus Ventures lead $9 million funding round in fixed income analytics provider Mosaic Smart Data.
Hayley McDowell – The Trade
Fixed income, currencies and commodities (FICC) analytics specialist Mosaic Smart Data has gained a $9 million investment led by Commerzbank’s venture capital fund, CommerzVentures.
How Big Tech is struggling with the ethics of AI; Companies criticised for overruling and even dissolving ethics boards
Madhumita Murgia and Siddarth Shrikanth – FT
After Jack Poulson quit Google, he was ushered into a meeting with Jeff Dean, the head of the company’s artificial intelligence division. Mr Poulson, a former Stanford professor who worked on machine intelligence for Google, had resigned in protest at “Project Dragonfly”, a plan to develop a censored search engine for China, saying the company had promised just two months earlier not to design or deploy technology that “contravenes [?.?.?.] human rights”.
Brokers leading the next generation of algorithmic trading
John Brazier – The Trade News
As end users become more comfortable and knowledgeable about the algorithms they are using, and in some cases placing them at the centre of their trading strategies, brokers and banks must stay ahead of the pace of change and provide consistent results to their clients. The results of The TRADE’s 2019 Algorithmic Trading Survey for long-only buy-side firms.
Why Everyone In Crypto Is Talking About DeFi
Jeff Kauflin – Forbes
A new movement is pumping oxygen into the cryptocurrency industry despite asset prices that remain 75% lower than where they were in late 2017. It’s called DeFi, short for decentralized finance—it’s the notion that crypto entrepreneurs can recreate traditional financial instruments in a decentralized architecture, outside of companies’ and governments’ control.
Finra Grants ATS License To Cryptocurrency Startup Circle
Billy Bambrough – Forbes
Capital markets are, despite efforts to modernize them, stuck in the past, with startups having to struggle through traditional systems in order to raise funding from investors. That’s beginning to change, however, and now regulators are catching up.
Jaguar Land Rover planning to allow helpful car drivers to earn cryptocurrency
Gertrude Chavez-Dreyfuss – Reuters
Jaguar Land Rover, Britain’s largest auto manufacturer, said on Monday it is testing software that will allow drivers of its cars to earn the IOTA cryptocurrency as a reward for sharing data. The company is developing what it calls “smart wallet” technology to be installed in its automobiles. This would reward Jaguar car drivers with IOTA coins for actions such as enabling their vehicles to automatically report useful data, such as traffic congestion or potholes to navigation providers or local authorities.
E*Trade Is Close to Launching Cryptocurrency Trading
Julie Verhage – Bloomberg
E*Trade Financial Corp. is getting ready to let customers trade cryptocurrencies on its platform, according to a person familiar with the matter. The firm will start by adding Bitcoin and Ethereum, and will consider adding other currencies in the future, said the person, who asked to remain anonymous because the matter is private. A spokesman for E*Trade declined to comment.
Bitfinex Faces Legal Action From NY Attorney General: Here’s What This Means
Aaron van Wirdum and Colin Harper – Bitcoin Magazine
The New York Office of the Attorney General (AG) wants to take a closer look into the business operations of Bitfinex and related stablecoin issuer Tether (USDT). According to a legal petition filed with the Supreme Court of New York, the NY Attorney General Office of Letitia James is applying for a court order to investigate Bitfinex’s suite of interrelated companies (including its umbrella firm iFinex and Tether Holdings Limited) for “ongoing fraud” to the tune of $850 million. What does the news mean for Bitfinex, Tether and Bitcoin?
Security Tokens vs. Utility Tokens?—?How different are they?
Katalyse.io – Medium
There is no doubt that Blockchain technology is poised to cause major disruptions in almost all industries in existence by making it possible to create a vast array of new business models. It has brought forth useful innovations such as decentralization and trustless networks. One of the significant factors that has contributed to the success of this technology is the use of tokens.
***One could argue that there are more than two types of digital token, but this article does a good job of explaining what “security” and “utility” tokens are without too much jargon.~MR
What Will Crypto’s Market Structure Look Like?
Tracy Alloway and Joe Weisenthal – Bloomberg
Recently, the cryptocurrency exchange Binance delisted a Bitcoin offshoot, causing its price to fall. Crypto’s market structure is still in its early days, and the move raises questions around decentralization and the power of exchanges. Alex Gordon-Brander has been thinking a lot about what crypto’s market structure will look like as his company, Omega One, is building a crypto dark pool. He joins this week’s Odd Lots podcast to discuss crypto market structure, where it’s headed and how Omega One will choose which coins to list.
A Glimpse of Banking’s Future, Live on the Ethereum Blockchain
Michael J Casey – Coindesk
At first glance, this week’s move by the investment bank Societe Generale to issue a security token-like bond in which it was both the issuer and the sole investor might seem like a pointless act. Not so much a peer-to-peer transaction; just a peer transaction.
Nike poised to break into the crypto space with ‘CryptoKicks’
Jordan Heal – Yahoo Finance
In what could be one of the biggest announcements in the cryptosphere so far in 2019, trainer behemoth Nike seem poised to break into the crypto space after filing for a trademark on ‘CryptoKicks.’ The news was announced by Josh Gerben on Twitter. Gerben is the founder of Gerben Law Firm, a trademark law firm which works with clients worldwide.
Finland now has a law for a cryptocurrency industry
Tanya Abrosimova – FX Street
The President of Finland Sauli Vainamo Niinisto approved the legislation that covers cryptocurrency0related services providers, including exchanges, trading platforms, crypto wallets and digital coin issuers. The law will take effect on May,1, according to the announcement made by the Finnish regulator (Fin-FSA) on Twitter.
Blockchain Is The Next Big Thing For Renewable Energy
James Ellsmoor – Forbes
Blockchain has been touted as the next big technological advance – impacting everything from online transactions to e-government. But what does it mean for renewable energy? Essentially an online register that securely stores information, blockchain serves as a repertoire of knowledge accessible to everyone. Rather than being controlled by one entity, blockchain is spread across multiple computers and uses a form of data logging to ensure that the information cannot be changed or corrupted by anyone else.
Ransomware Hits Yet Another U.S. Airport
Lee Mathews – Forbes
It wasn’t exactly business as usual at Cleveland Hopkins International Airport last week. Several information systems were disrupted by a ransomware outbreak. According to local NBC affiliate WKYC, the malware impacted computers linked to the Hopkins email, payroll, and digital records systems. Digital signage around the airport was also affected, with most displaying only black screens as the ransomware took hold.
$112 Million: French Banking Giant Societe Generale Issues Massive Euro Bond on Ethereum
Mark Emem – CCN
The blockchain bug seems to have bitten French banking giant Societe Generale to a point of no return. A little over a year ago, the third largest bank in France by assets unveiled a blockchain-based trade finance platform for all its corporate clients, the we.trade platform.
Creditor Takes Crypto Startup London Block Exchange to Court
Ian Allison, Anna Baydakova – Coindesk
A creditor has taken the London Block Exchange (LBX) to court in a bid to wind up the cryptocurrency exchange, but the startup’s CEO has denied it is going out of business. Law firm Squire Patton Boggs (UK) LLP served the petition to LBX on March 19 in London’s High Court of Justice. A hearing on the matter is scheduled to take place Tuesday, according to London Block Exchange CEO Benjamin Dives.
Australian Crypto Scam Reports Rose Almost 200% in 2018
Yogita Khatri – Coindesk
Australia saw a surge in reports of scams involving cryptocurrencies last year, according to the country’s consumer watchdog. In 674 cases, victims reported to the the Australian Competition and Consumer Commission (ACCC) and other government agencies that cryptocurrency had been used to pay scammers in 2018, with reported losses of AU$6.1 million (US$4.3 million), the ACCC said in its tenth annual “Targeting Scams” report on Monday. The figure is 190 percent higher than the reported AU$2.1 million (US$1.48 million) lost to crypto scams in 2017.
$325 Million Bitcoin-Accepting Real Estate Project in Dubai Pauses Operations
Helen Partz – Cointelegraph
The Aston Plaza in Dubai, a major bitcoin (BTC) real estate project, is reportedly pausing its operations, British daily news agency The Times reports on April 28. The $325 million project — developed by founder of the Ultimo lingerie brand Michelle Mone and her billionaire partner Douglas Barrowman back in 2017 — includes 1,300 luxury apartments, with at least 150 units planned to be sold in bitcoin.
Stung by Trump’s Trade Wars, Wisconsin’s Milk Farmers Face Extinction; The flagship industry in a pivotal swing state faces an economic crisis.
Alan Rappeport – NY Times
For decades, Denise and Tom Murray rose before 5 a.m. and shuffled through mud and snow to milk cows on the farm that has been in their family since 1939. This month, after years of falling milk prices and mounting debt, the Murrays sold their last milk cow, taking pictures while holding back tears as the final one was loaded onto a truck and taken away.
Oil Extends Decline After Trump Renews His Call for Lower Prices
Heesu Lee and Grant Smith – Bloomberg
U.S. president said he has personally pressed OPEC on prices; WTI falls as much as 1.3% after losing 4.5% in three sessions
Oil fell again, extending its biggest retreat in two months, after U.S. President Donald Trump renewed his push for lower prices and Russia said it would soon resolve a problem with contaminated supplies.
An Unexpected Current That’s Remaking American Politics
Michael Grunwald – Politico
At the annual National Republican Congressional Committee dinner in Washington this month, President Donald Trump made news with some curious remarks about wind power. What went viral was his untrue suggestion that the noise from wind turbines causes cancer, but his warning that home values instantly plunge 75 percent when a windmill is built nearby was equally false. He also claimed wind power is inordinately expensive, when in fact in much of America it is now the cheapest source of electricity.
Wall Street Democrats on 2020 field: “There’s tremendous fear.”
Wall Street Democrats are concerned about the fate of the nearly two dozen Democrats in the presidential circuit, New York magazine’s Gabe Debenedetti writes for “Intelligencer”
Three Influential Activists Have Launched an Organization to Mobilize Women in U.S. Politics
Julia Pace – Time
Three of the nation’s most influential activists are launching an organization that aims to harness the political power of women to influence elections and shape local and national policy priorities. Dubbed Supermajority, the organization is the creation of Cecile Richards, the former head of Planned Parenthood; Alicia Garza, co-founder of Black Lives Matter; and Ai-jen Poo, executive director of the National Domestic Workers Alliance.
How The New Movements, Not The Old Media, Are Driving Politics
Ben Smith – Buzzfeed News
If you covered American politics between 1976 and 2012, you developed a sense of the rhythm of a party primary: A big field of candidates would rise and fall for months, as voters — guided by the media — would light upon one, appreciate their strengths, and then discover their weaknesses and move onto the next one. You’d hear talk about the “flavor of the month” and who was “hot” this week. For a manic stretch of 2012, we all believed seriatim that Michele Bachmann, Rick Perry, and Herman Cain were the likeliest Republican nominee.
Bart Chilton, former CFTC commissioner, 1960-2019; Flamboyant, folksy image signalled his identification with the ‘little man’
Philip Stafford – FT
Bart Chilton, one of the most distinctive and controversial figures in financial-market regulation, has died at the age of 58.
ASIC bans two Sydney men from providing financial services for six years
ASIC has banned Mr Jeffrey Worboys and Mr Matthew Barnett from providing financial services for six years following an ASIC investigation. Mr Worboys and Mr Barnett were, until February 2018, joint chief executive officers of Australian Mutual Holdings Limited. This company is an Australian financial services licence holder and a responsible entity which operates a number of managed investment schemes, including previously managing the Courtenay House Capital Investment Fund. Mr Worboys remains as the sole chief executive officer of Australian Mutual.
Queensland director jailed on fraud charges
Former company director, Christopher Edward Eric Skelly, of Lark Hill, Queensland, has been sentenced to imprisonment on one charge of fraud after an investigation by ASIC.
EBA faces calls to reform after dropping Danske Bank probe; Europe’s banking watchdog criticised for closing investigation into money-laundering
Jim Brunsden – FT
Europe’s financial regulation chief has called for the EU to overhaul its money-laundering safeguards after the bloc’s banking watchdog shelved an investigation into the EUR200bn Danske Bank scandal.
Iliad Chairman Fined for Insider Trades for Him and Girlfriend
Gaspard Sebag – Bloomberg
Maxime Lombardini sold shares weeks before T-Mobile US offer; Iliad also fined in French probe for delaying market statement
Iliad SA Chairman Maxime Lombardini was fined 600,000 euros ($670,000) by French regulators who accused him of selling some shares before the phone company’s stock tumbled the most in almost eight years when it made a surprise 2014 takeover bid for T-Mobile US Inc.
ESMA updates publication schedule for transparency calculations in May and June 2019
The European Securities and Markets Authority (ESMA) considers, that following the extension of Article 50(3) in relation to the United Kingdom’s withdrawal from the European Union, it is necessary to provide clarity to stakeholders that transparency calculations due in May and June as well as in the following months will now be published.
Musk, SEC Settle Legal Fight Over His Tweets About Tesla
Bob Van Voris and Dana Hull – Bloomberg
Agency had sought contempt-of-court ruling against CEO; Musk tweets he accepts blame for ‘the foolish things I say’
A regulatory fight over Elon Musk’s tweeting habit may be over — at least for now.
Investing and Trading
Negative Yields Deepen Along With Europe’s Problems; The amount of negative-yielding government bonds outstanding through 2049 has risen by 20% this year
Daniel Kruger – WSJ
A growing number of investors are paying governments in Europe for the privilege of holding their bonds. The amount of negative-yielding government bonds outstanding through 2049 has risen by 20% this year to about $10 trillion, the highest level since 2016, according to data from Deutsche Bank Securities.
Oil Volatility Picks Up, Putting 2019 Rally Under Scrutiny; President Trump stoked price swings when he ended Iran sanction waivers and then asked OPEC to boost supply
Amrith Ramkumar – WSJ
Volatility is picking up in oil markets following a powerful 2019 rally, prompting a retreat among portfolio managers into less-risky investments in a sector that many investors still view as hot.
Why triple-C bonds are still too hot to handle; Central banks have boosted assets but some ultra-risky borrowers continue to struggle
Joe Rennison – FT
In the autumn of last year, US bond investors fully expected Cloud Peak Energy to pay back the money it had borrowed. A bruising fourth-quarter sell-off across commodities has since put that in doubt, as the Wyoming-based miner has missed a series of interest payments.
Is This a Market Melt-Up? Here Are Some Ways to Tell
Kailey Leinz and Luke Kawa – Bloomberg
Once again, stocks are hot. Following a drubbing late last year, benchmark indexes have been grinding higher as investors keep piling in, setting fresh all-time highs in the process. Is this another rally justified by dovish pivots from major central banks around the world, green shoots in global activity, and earnings results that are surpassing Wall Street’s expectations? Or is it something that rings alarms, a melt-up? BlackRock Inc.
What Oil at $100 a Barrel Would Mean for the World Economy
Enda Curran and Michelle Jamrisko – Bloomberg
Energy costs the latest headwind for slowing global growth; Higher prices will hit different economies in different ways
Surging crude prices are posing another headwind for the world economy after President Donald Trump’s “zero” pledge on Iran oil sales.
Low Inflation Is Boosting Markets for the Wrong Reasons; Investors can play the greater fool theory and ride the rally, but a safer approach is warranted.
Komal Sri-Kumar – Bloomberg
It was only a few months ago that the U.S. Federal Reserve was intent on continuing to increase interest rates. But now, some policy makers are even hinting that the next move may be a rate cut, and they may even pursue other forms of policy easing despite equities reaching record highs again. If that is the message Fed Chairman Jerome Powell will provide at his press conference Wednesday following a two-day meeting with policy makers, it would spur equities to even greater heights and drive yields on Treasury securities even lower.
A Little Market Chaos Is Just Fine With These Stock Traders
Sarah Ponczek and Lu Wang – Bloomberg
Correlations falling at one of the fastest rates in a decade; Earnings and rotation mean strength offsets other’s weakness
Under a bland surface, anarchy reigns in stocks. For the people paid to trade them, that’s not a bad thing.
Wells Fargo hired shady broker who depleted family’s finances: claim
Kevin Dugan – NY Post
Wells Fargo tapped a stockbroker with a spotty work history — including a stint at a Mafia-linked boiler room — and turned a blind eye to years of suspicious trades that left a New Jersey widow and mother of three flat broke, according to an explosive arbitration claim.
Popular absolute return funds notch up high trading costs; Mifid II disclosures show funds incurred transaction costs almost equal to headline charges
Siobhan Riding – FT
Popular alternative and absolute return funds run by JPMorgan Asset Management and Aviva Investors notched up high trading costs in 2018, according to new disclosures that will sit badly with investors bruised by the funds’ one-year underperformance.
UBS seeks to claw back lost ground with DWS tie-up; Swiss-German alliance would create new European champion
Chris Flood – FT
UBS and Deutsche Bank are in talks about a merger of their asset management businesses in a deal that would create a EUR1.4tn European champion better equipped to compete against BlackRock, Vanguard and Amundi.
Bankers Cleared After Seeing Tips Pop Up on Phone of Train Passenger
Gaspard Sebag – Bloomberg
Alexandre Zaluski did nothing wrong, French regulators say; Another banker, UBS are also cleared in market-abuse case
UBS Group AG and two bankers were cleared by French enforcers after facing accusations of inappropriately obtaining a tip about a secret $15 billion Iliad SA takeover plan and then approaching the French carrier to offer financing.
Saudi Arabia to open up bond market to retail investors; Smaller increments for bond purchases aim to draw in new market participants
Simeon Kerr and Andrew England – FT
Saudi Arabia is seeking to open up its government bond market to retail investors as part of sweeping reforms intended to develop a savings culture.
Russia’s state-owned Gazprom doubles profit on higher gas sales; The monopoly exported more gas than ever to Europe and Turkey last year
Nastassia Astrasheuskaya – FT
Russia’s state-owned group Gazprom doubled its full-year net profit and exported more gas than ever to Europe and Turkey, the energy company said on Monday.
JPMorgan bans staff from Brunei-owned hotels over gay law; US bank joins boycott after kingdom enacts death by stoning for homosexuality and adultery
Stephen Morris and Mark Vandevelde – FT
JPMorgan Chase has banned its staff from staying in any of a dozen hotels owned by the Sultan of Brunei, joining a backlash against the Asian kingdom that has enacted death by stoning as a punishment for gay or extramarital sex.
Britain Is Brimming With Natural Gas
Anna Shiryaevskaya, Vanessa Dezem, and Mathew Carr – Bloomberg
LNG arrives as Norway pipeline maintenance trims supply; Increase in gas shipments come before Trump visit to the U.K.
Britain’s appetite for natural gas usually declines in the summer, but this season is different with a record number of LNG tankers due to land this month.
Brexit threatens pound’s status as global currency, surveys says; Central bank reserve managers signal reluctance to hold sterling after UK leaves EU
Claire Jones – FT
Brexit is likely to threaten the pound’s status as a global reserve currency according to a survey of central bank money managers who say Britain’s departure from the EU will alter their views on sterling.
Warren Buffett ready to buy in Britain regardless of Brexit; Billionaire investor is looking beyond US for large acquisitions
Oliver Ralph, Eric Platt and Robert Armstrong – FT
Billionaire investor Warren Buffett has said he is “ready to buy something in the UK tomorrow”, handing a big endorsement to Britain ahead of Brexit.
Carney’s Not Sorry About Brexit Forecasts as Next Round Unveiled
David Goodman and Lucy Meakin – Bloomberg
Bank of England to publish new outlook on Thursday in London; Economists expect predictions for stronger growth, inflation
The Bank of England got its Brexit forecasts wrong, according to lawmakers and pundits. Mark Carney would beg to differ.
Brexit: Wales’ first minister refuses to back another vote
Wales’ first minister has refused to back a promise to hold another Brexit referendum as part of Labour’s manifesto for May’s European elections. Labour is redrafting European election leaflets after accusations of ignoring a pledge to hold another vote on leaving the EU, the BBC has been told. About 100 Labour MPs and MEPs want such a promise in the party manifesto.
Brexit: Labour to redraft European Parliament election leaflets
Labour is redrafting European election leaflets after accusations of ignoring a pledge to hold a further Brexit referendum, the BBC has been told. They will now refer to the party’s preparations for a general election, with a referendum if necessary to avoid what it calls a “bad Tory deal”. Jeremy Corbyn says Labour’s ruling body will make a decision on Tuesday about backing a public vote on any deal.
First They Came for Plastic Bags. Coffee Cups Are Next; As local and national governments move to tax — or ban — to-go cups, Starbucks and Dunkin’ race to find an alternative
Emily Chasan and Hema Parmar – Bloomberg
The People’s Republic of Berkeley, Calif., takes pride in its leadership on all things civic and environmental. The small liberal city east of San Francisco was one of the first U.S. cities to adopt curbside recycling. It banned styrofoam and was early to take on plastic shopping bags. Earlier this year, the Berkeley city council put on notice a new environmental scourge: The to-go coffee cup.
The Missouri River Is Just Going to Keep On Flooding; Humans have been struggling to confine it for more than a century. The costs seem to be higher than the benefits.
Justin Fox – Bloomberg
The Missouri River used to be out of control. “It cuts corners, runs around at nights, fills itself with snags and traveling sandbars, lunches on levees, and swallows islands and small villages for dessert,” is how the humorist George Fitch (pretty accurately) described it in 1907.