HKEX blames software bug for outage as website comes under attack

Sep 6, 2019

First Read

Leo Melamed – Open Outcry Traders History Project
The first video we are releasing from the Open Outcry Traders History Project is of Leo Melamed. In this video, Leo tells of his start as a law student and runner, how he financed his first membership with help from his father and how many times he went broke. Three. There are lots of great stories from Leo – from how he makes his trading decisions to the impact of his career on his family and what kind of father he was. The Chairman Emeritus of the CME has had a long, history-making career.

Interview by John Lothian. Filmed by Michael Forrester, Jr.. Edited by Patrick Lothian

Here is his story

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Hits & Takes
JLN Staff

In honor of the first video from the Open Outcry Traders History Project being published, here is a poem published In 1926 by Florence Sherman, secretary at the Chicago Mercantile Exchange, who wrote the poem for the “Exchange News” which read in part as follows:

HOW IT LOOKS AT THE DOOR
One by one, they trickle in,
Some just quiet, some with din,
Some with lightly tripping toe,
Some with faces filled with woe.
And now approaches eleven o’clock,
The markets cease to roll and rock,
Hundreds of cars are bought and sold,
The record of which the world is told.
The bell has rung the close at last,
The sound of conflict is ebbing fast,
The settlement price is posted too,
It cannot suit each one of you.
Now one by one they trickle out,
Some are sure, some are in doubt,
Some will gain, and some will pay,
Ah, well, tomorrow’s another day. ~JJL

John Henry Waldock Sr., co-founder of Lind-Waldock, died on Sunday, September 1 at the age of 90.~JJL

At Eurex, the VSTOXX futures, a benchmark for European volatility, set a new monthly record. The recent spikes in implied volatility stemming from renewed trade war tensions have led VSTOXX futures to set a monthly record of over 2.1 million contracts traded in August. The new record is over 15% greater than the previous monthly high of 1.8 million in October 2018.~JJL

Eurex is also reporting that buy-side client flows have started to increase, now representing 25% of Eurex’s MSCI derivatives flow with over 250 buy-side managers active on MSCI products. With UMR rules coming into play over the next 2 years, they expect this flow to become stronger. Eurex has partnered with sell side players in core regions, and the expansion of Eurex buy-side outreach in Korea, China, Australia, Brazil, Mexico, and the Middle East will add flows bringing in more hedge funds globally.~JJL

Back in January of 1997, Mike Fritz of Crain’s Chicago Business wrote an in-depth story about CME member James J. Kaulentis titled “PIT BULL.” Fritz labeled Kaulentis among the “toughest” of CME floor traders and brokers and dug into the murky world of broker groups and their influence on floor trading. It is an interesting read still these years later about how things were back in the day and how much the CME has changed.~JJL

ICE’s Brent futures contract has had an average daily volume of more than 1 million contracts traded for five consecutive months. In August, ADV was just over 1 million contracts, up from 796,000 a year earlier.~JK

Cboe Global Markets on Thursday reported that August 2019 ADV in futures was up 42% over August 2018 and up 53% over July 2019. Options ADV was up 24% over August 2018 and up 26% over July 2019. U.S. Equities ADV was up 17% over both August 2018 and July 2019. August ADV in SPX options, RUT options and VIX futures was the highest of 2019.~SR

Yesterday four new pages were added to MarketsWiki: Everette B. Harris?, BondCliQ?, Innovate Finance?, and Clare Black?. Pages updated included International Commercial Exchange, ?Chicago Mercantile Exchange, Rick Kilcollin?, Shenzhen Stock Exchange?, Chris White?, Futures Industry Association?, Emma Davey, ?and Virtu Financial?

On a day of significant news about the $20 million fine for the OCC from the CFTC and the SEC, Thom Thompson’s story “Ah, September! Litigation is in the air” was the most read story. Nice work, Thom.~JJL

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Leo Melamed – Open Outcry Traders History Project

JohnLothianNews.com

The first video we are releasing from the Open Outcry Traders History Project is of Leo Melamed. In this video, Leo tells of his start as a law student and runner, how he financed his first membership with help from his father and how many times he went broke. Three. There are lots of great stories from Leo – from how he makes his trading decisions to the impact of his career on his family and what kind of father he was. The Chairman Emeritus of the CME has had a long, history-making career.

Here is his story.

Watch the video »

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CME Group Foundation Awards Nearly $1 Million in Grants to Reduce Computer Science Deserts
PRNewswire
CME Group Foundation will award more than $900,000 in new grants to Chicago Public Schools (CPS) and local nonprofits to support in-school and after-school computer science programs with the goal of reducing “computer science deserts” in Chicago.
/jlne.ws/2zWF5X6

***** An oasis of support.~JJL

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Record highs for Eurex KOSPI 200 Options
Eurex
In close partnership, Eurex Exchange and Korea Exchange (KRX) have successfully offered after-hours trading of KOSPI 200 Options and Mini KOSPI 200 Futures since 2010. In August 2019, KOSPI Index, the nation’s benchmark cash market index, has shown a downward curve with high volatility due to the ongoing geopolitical issues.
/jlne.ws/2POu5Wm

***** Little is big.~JJL

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UK Prime Minister Boris Johnson says he’d ‘rather be dead in a ditch’ than delay Brexit
Guy Davies – ABC News
Johnson was asked by a reporter if he could promise not to delay Brexit after making a speech in front of police recruits in West Yorkshire. “Yes, I can. I’d rather be dead in a ditch,” Johnson said. When asked if he would resign rather than delay, he declined to answer, but said a delay would be “totally pointless.”
/jlne.ws/311BSkL

***** He had me at ‘totally pointless.”~JJL

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We’re back baby
RCM Alternatives Blog
It’s hard to concentrate too hard in Chicago today, you know – with the Bears and Packers facing off for the 195th time at Soldier Field tonight and the NFL taking over half the city in the hours-long buildup. If you want to talk a good long term investment, Halas bought the Bears for about $100 per a CBS video hyping the rivalry a few years ago. But as excited as we are for the Bears to be back, what we’re really more excited about is systematic programs like managed futures and global macro staging their best run in years.
/jlne.ws/2zUegTl

*****Welcome back!~JJL

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Reid Hoffman’s New ‘Hamilton’-Inspired Crypto Rap Video Is Straight Fire
Brady Dale – Coindesk
“I myself hold bitcoin,” Reid Hoffman, a co-founder of LinkedIn and a member of the PayPal Mafia, told CoinDesk as he described his reasons for releasing a new hip-hop video about central banks competing against cryptocurrency.
/jlne.ws/2lB3hu6

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Sportspicker AI predicts the NFL season and predicts that the New Orleans Saints will face the New England Patriots in the 2020 Super Bowl
/bit.ly/2lCpece

*****After last night, the predictions for the Chicago Bears to win look pretty sad.~JJL

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CryptoMarketsWiki Coin of the Week: XRP
Members of the XRP community threatened Ripple executives with a “community takeover” of XRP via a hard fork this week. The community members said they were unhappy with Ripple’s practice of selling XRP to its clients, which they said has continuously driven the price of XRP down.
/jlne.ws/2k6pQGP

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Thursday’s Top Three
Our top three were led by Thom Thompson’s JLN piece Ah, September! Litigation is in the air. Thom updated the CFTC v. Kraft/Mondelez spat, the CFTC v Jitesh Thakkar case and Bcause’s bankruptcy plan. Second and third respectively were The Wall Street Journal’s Options Clearing Corp. to Pay $20 Million to SEC, CFTC and the CFTC and SEC announcement SEC and CFTC Charge Options Clearing Corp. with Failing to Establish and Maintain Adequate Risk Management Policies. Litigation and regulation in the air.

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MarketsWiki Stats
162,655,542 pages viewed; 23,907 pages; 221,394 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.

Recently Updated Pages

Recently updated pages include
Binance
Jack Dorsey
Blockchain.com
Ripple

CryptoMarketsWiki Stats

1,226 pages; 10,949 edits
CryptoMarketsWiki Statistics

Lead Stories

HKEX blames software bug for outage as website comes under attack; Cyber security expert criticises lack of detail in exchange’s explanation
Daniel Shane and Hudson Lockett – FT
Hong Kong’s stock exchange has blamed a software bug for disruptions that forced it to suspend operations of its derivatives market on Thursday, as the bourse’s website came under an apparently separate hacking attack on Friday.
/jlne.ws/2HQbZwM

Labour threatens to ban bankers’ bonuses; Shadow chancellor John McDonnell vows to end ‘grotesque’ and ‘offensive’ inequality
Jim Pickard – FT
Financial services companies in the UK will face severe constraints, and perhaps a ban, on awarding bonuses under a future Labour government, the shadow chancellor has warned.
/jlne.ws/2HO7RNK

Here’s How ‘Green Finance’ Aims to Save the Planet
Tom Freke – Bloomberg
The field that’s become known as green finance could be at a tipping point. After a decade of explosive growth, it’s running into a perhaps surprising roadblock: a shortage of projects that are green enough. That’s set off a scramble to create a wider range of debt-market instruments and incentives. Central bank officials and a growing list of investors are pushing to make the $100 trillion bond market — one of the world’s largest pools of money — a driving force in the increasingly urgent efforts to limit climate change.
/jlne.ws/2HNn3e6

Will FX Go the Way of Treasury Futures?
Greenwich Associates
FX futures make up a tiny part of the global foreign exchange market today, but given recent changes, they and similar instruments have the potential to grow fast enough that FX may eventually follow in the footsteps of U.S. Treasuries – a market that was mostly OTC and in which futures now top cash trades in terms of average daily volume (ADV).
/jlne.ws/2A0aGa9

Nasdaq expands data range on Quandl platform; Blockchain Investments & Co. to provide range of crypto asset data to Nasdaq Quandl platform, including forecasting and sentiment data.
John Brazier – The Trade
Nasdaq has expanded the scope of its crypto data platform Quandl to include fundamental crypto rating and price forecasting data.
/jlne.ws/2ZRfr0n

Fitch Downgrades Hong Kong After Months of Protests; Credit ratings company says unrest has dented Hong Kong’s reputation as a well-governed, stable place to do business
Joanne Chiu and Steven Russolillo – WSJ
Fitch Ratings downgraded Hong Kong, saying months of unrest were testing the city’s relationship with mainland China and had dented its reputation as a well-governed, stable place to do business.
/jlne.ws/2HKy4Np

Greening the financial system
Thomas Hale
Economic and financial policy proposals to address climate change have been gathering momentum over recent years — to the point that it’s become fairly difficult to keep track of them all.
/jlne.ws/2HQcB5y

Exclusive: U.S. congressional probe finds possible lapses in Deutsche Bank controls – sources
Mark Hosenball, Matt Scuffham, John O’Donnell – Reuters
U.S. congressional investigators have identified possible failures in Deutsche Bank AG’s (DBKGn.D) money laundering controls in its dealings with Russian oligarchs, after the lender handed over a trove of transaction records, emails and other documents, three people familiar with the matter said.
/jlne.ws/2HQlJXS

Swiss National Bank concerned about digital currencies impact on monetary policy
John Revill – Reuters
Digital currencies like the Facebook-led Libra project which are linked to a basket of currencies could hinder the Swiss National Bank’s ability to conduct monetary policy, SNB Chairman Thomas Jordan said on Thursday.
/jlne.ws/2HKKgOb

JPMorgan Fears New Breed of Crypto Like Libra Face ‘Gridlock’
Alastair Marsh – Bloomberg
The coins lack liquidity facilities common in payments systems; Negative yields threaten reserves needed to fund operations
Stablecoins, a fast-growing subset of cryptocurrencies designed to avoid the large fluctuations of Bitcoin and Ether, could fail to function properly in periods of stress, according to JPMorgan Chase & Co.
/jlne.ws/2ZRrLOm

Over 100 London investment firms get EU licences for Brexit hubs – regulator
Huw Jones – Reuters
More than one hundred asset managers, trading platforms and investment firms in London have so far obtained licences to run new hubs in the European Union after Brexit, a top EU regulator said on Thursday.
/jlne.ws/2HSIZVo

Exchanges, OTC and Clearing

Exclusive: LME’s gold, silver contracts in doubt as Societe Generale pulls out
Peter Hobson, Pratima Desai – Reuters
The London Metal Exchange’s gold and silver futures are being thrown into doubt, with the imminent resignation of Societe Generale as a market maker threatening to deepen a decline in trading activity, three sources said.
/jlne.ws/2zTIypd

EU row with Bern: short-term gain, long-term pain for Swiss stock exchange
Josephine Mason – Reuters
A trade dispute between Bern and Brussels has boosted revenue and volumes for Swiss stock exchange SIX, but may eventually hurt investment in Switzerland’s financial markets, SIX’s Chief Executive Officer Jos Dijsselhof said on Thursday.
/jlne.ws/32u2T0H

Introducing Gemini Clearing – Gemini
Jeanine Hightower-Sellitto – Medium
Today, we are thrilled to introduce Gemini Clearing, a fully-electronic clearing and settlement solution for off-exchange or over-the-counter (OTC) crypto trades.
/jlne.ws/2zT1uEE

****SD: Doesn’t seem like there is any guarantee component to this.

Straits Times Index (STI) Quarterly Review – September 2019; Mapletree Commercial Trust to be added to the STI
SGX
FTSE Russell announces that there will be one change to the constituents of the Straits Times Index (STI), following the September quarterly review. Mapletree Commercial Trust will be added to the index and, as a result, Hutchison Port Holdings Trust will be excluded.
/jlne.ws/2zT0sIH

Intercontinental Exchange Reports August Statistics; Average Daily Volume up 15% y/y and Open Interest up 5% y/y
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported August trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/jlne.ws/2zQVQD5

TMX Group Consolidated Trading Statistics – August 2019
TMX
TMX Group Limited today announced August 2019 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.
/jlne.ws/2HNkokQ

Resumption in Derivatives Market Trading
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today confirms that its derivatives market has successfully opened and the market is operating smoothly. There have been no connectivity issues on the trading system reported this morning to date from Exchange Participants.
/jlne.ws/2ZRrUkE

HKEX Statement on Derivatives Market Suspension
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today (Thursday) suspended trading in the afternoon and After-hours sessions of its derivatives market at 2:00 pm, in order to preserve an orderly market. HKEX has now completed its preliminary investigations into the outage that caused the connectivity issues on the Hong Kong Futures Automatic Trading System.
/jlne.ws/2HQngNM

The rise of the buy side fosters new market models
Eurex
Deutsche Börse Group is well on track with its growth strategy “Roadmap 2020”. We now want to take the opportunity to look back at our growth agenda and successes of the past 18 months: in our series “Roadmap 2020 insights” we showcase exciting contributions and developments from our various business areas.
/jlne.ws/2ZTTMEW

CME Group Chief Financial Officer and Chief Accounting Officer to Present at Barclays Global Financial Services Conference
CME Group
CME Group announced today that John Pietrowicz, Chief Financial Officer, and Jack Tobin, Chief Accounting Officer, will present at the Barclays Global Financial Services Conference in New York on Tuesday, September 10, at 7:30 a.m. (Eastern Time).
/jlne.ws/2HOLbx6

Fintech

TradeStation and TradingView’s API Integration Platform Now Live
TradeStation
First online U.S. multi-asset class broker integration with TradingView gives traders a robust trading experience, from a sophisticated suite of charting and modeling tools and a larger community of traders through execution across multiple asset classes
/jlne.ws/2zWFdG4

‘Have a great day!’ – robohelp leaves banking fraud victims cold
Lawrence White – Reuters
“Have a great day!” was not the way Gavin Rennick expected ‘Zlatan’, an agent for his bank, Revolut, to end their instant messaging chat about the 46,000 pounds scammers had stolen from his account in just 24 hours.
/jlne.ws/32AofcX

Bloomberg is investing in ways to make complex alternative data sets easier to use for hedge funds
Dan DeFrancesco – Business Insider Prime
One of the largest data providers in the world wants to make it easier for investors to digest complex, unique data sets. Bloomberg LP is working to help investment firms, such as hedge funds, use alternative data despite lacking the resources or experience often required to digest it. The efforts come just over six months after Bloomberg announced a move into the booming market for data such as stats on drug approvals, retail foot traffic tracked through cellphones, and construction permits. Bloomberg is now working to make alternative data even more mainstream by making it easier for a wider variety of its customers to use the unique information as they try and find new ways to beat the market.
/jlne.ws/2zW9KDU

AcadiaSoft completes Phase 4 UMR onboarding; Counterparties within scope for Phase 4 of initial margin compliance have been onboarded to the AcadiaSoft platform.
John Brazier – The Trade
Derivatives collateral management services provider AcadiaSoft has announced the successful completion of onboarding for firms covered by Phase 4 of initial margin regulations under the Uncleared Margin Rules (UMR).
/jlne.ws/2ZMYEeY

Robots Displacing Jobs Means 120 Million Workers Need Retraining
Shelly Hagan – Bloomberg
More than 120 million workers globally will need retraining in the next three years due to artificial intelligence’s impact on jobs, according to an IBM survey.
/jlne.ws/2HO7eUo

Fintech Startup Stripe Will Lend Money to Customers
Julie Verhage – Bloomberg
Stripe Inc. became one of the most valuable financial-technology startups by helping businesses accept online payments. Now it’s getting into lending.
/jlne.ws/2ZOAX65

Cryptocurrencies

Binance Launches Dollar-Backed Crypto Stablecoin With NYDFS Blessing
Nikhilesh De – Coindesk
Crypto exchange Binance is launching a dollar-backed stablecoin in the U.S. Moreover, the new Binance USD (BUSD) has received the blessing of the New York Department of Financial Services (NYDFS). The exchange announced Thursday that NYDFS had approved the new offering, which Binance is launching in partnership with the Paxos Trust Company.
/jlne.ws/2lG2MPi

Binance launching its own USD-pegged stablecoin ‘BUSD,’ with Paxos as custodian
Yogita Khatri – The Block
Binance, the world’s largest cryptocurrency exchange by trading volumes, is launching its native stablecoin. The upcoming stablecoin, dubbed Binance USD (BUSD), will be pegged 1:1 to the U.S. dollar, according to an announcement Thursday. A Binance spokesperson told The Block that BUSD will be built on the Ethereum blockchain, but notes that it may “migrate to Binance Chain in the future.”
/jlne.ws/2kkjRyl

Record Bitcoin-Yuan Divergence Suggests New Trade-War Fallout
Todd White – Bloomberg
Bitcoin is increasingly moving in an opposite direction to China’s currency — suggesting it may have become a refuge for people hedging the yuan’s depreciation.
/jlne.ws/2HMlpt5

China’s digital currency will be like Facebook’s Libra, says central bank official
The Block Crypto
A senior official from China’s central bank has offered some further details on the country’s upcoming digital currency, saying that its design would be similar to Facebook’s proposed cryptocurrency Libra.
/jlne.ws/2HQ2SMG

China says new digital currency will be similar to Facebook’s Libra
Reuters
China’s proposed new digital currency would bear some similarities to Facebook’s Libra coin and would be able to be used across major payment platforms such as WeChat and Alipay, a senior central bank officer said.
/jlne.ws/2HMyAu3

Bitcoins worth $1 billion just moved to an unknown wallet
The Block Crypto
Over 94,000 bitcoins, currently worth over $1 billion, have just been moved to an unknown wallet; possibly associated with Bakkt.
/jlne.ws/2ZN5SzC

The State of Security Token Regulations in Asia
Antony Lewis and Xiang Ying Cheng – Coindesk
Since the cryptocurrency boom and initial coin offering craze of 2017, many countries in Asia have taken steps to clarify their regulations surrounding cryptocurrencies and security tokens.
/jlne.ws/2HQkjfZ

Blockchain, Cryptocurrency Not Proven Safe Havens Says Investor Mark Mobius
William Foxley – Coindesk
Mark Mobius, major investor and founding partner of Mobius Capital Partners, is still bearish on cryptocurrencies and blockchain technology… with some caveats.
/jlne.ws/2ZU0Z7Y

Politics

Trump Administration Aims to Privatize Fannie Mae and Freddie Mac; After years of bipartisan talk of abolishing the firms, Treasury launches process to diminish government control over time
Andrew Ackerman and Kate Davidson – WSJ
The Trump administration said it would support returning mortgage-finance giants Fannie Mae FNMA 1.71% and Freddie Mac FMCC -0.36% to private hands, a development that could keep the companies at the center of the housing market for decades to come.
/jlne.ws/2HQcHKs

Trump Has a Favorite Number When He Makes Big Claims: 10,000
Jordan Fabian – Bloomberg
President invokes it for stock market, ISIS fighters, migrants; A big round number helps sway an audience, professor says
When President Donald Trump wants to convey that something is a big deal, he often reaches for the same big number: 10,000.
/jlne.ws/2HKHY1x

Farm loan delinquencies surge in U.S. election battleground Wisconsin
Jason Lange, P.J. Huffstutter – Reuters
Farm loan delinquencies rose to a record high in June at Wisconsin’s community banks, data showed on Thursday, a sign President Donald Trump’s trade conflicts with China and other countries are hitting farmers hard in a state that could be crucial for his chances of re-election in 2020.
/jlne.ws/2HRpXyx

Regulation

Hearing to determine CFTC’s contempt in Kraft Foods matter continued until October
Brad Rosen – Wolters Kluwer
In this closely watched case, Judge Sharon Johnson Coleman of Northern District of Illinois granted the CFTC’s emergency motion filed on August 28, 2019, under seal, to continue a previously scheduled hearing for September 12, 2019 to October 2, 2019.
/jlne.ws/2zWpVRO

The ASIC Podcast; Episode 56: ASIC’s case against former director Bradley Silver
ASIC
In the episode, we discuss ASIC’s case against Bradley Silver, a former director of a property development company who defrauded his clients of $4.7 million.
/jlne.ws/2HPtEVj

Ex-Goldman Banker Must Pay $9 Million in Corruption Case
Franz Wild – Bloomberg
Ellias Preko must pay in three months or face 10 years in jail; Preko guilty of helping Nigeria’s Ibori in stealing millions
A former Goldman Sachs Group Inc. investment banker convicted of laundering money for a Nigerian official was ordered to pay 7.3 million pounds ($9 million) within three months or face a 10-year jail sentence.

Investing and Trading

Insight from Brussels
Siobhan Hall – S&P Global
Trading tags guaranteeing renewable or low-carbon properties could be a key way to secure the EU gas industry’s long-term future in a decarbonized energy system. The EU will soon consider enshrining a 2050 netzero emissions goal into law, after the European Commission’s president-elect, Ursula von der Leyen, promised to propose this by early 2020. A net-zero commitment is a step up from the current EU goal to cut emissions by at least 80% on 1990 levels. Von der Leyen promised to focus on decarbonizing energy demand from transport and buildings – both sectors where renewable and decarbonized gases could contribute to emission cuts.
/jlne.ws/2zWYvLj

U.S. Crude Oil Is Gaining on Brent Crude. Why That Matters.
Myra P. Saefong – Barron’s
U.S. benchmark oil has outperformed the global benchmark this year, leading prices in recent weeks to the narrowest spread in more than a year. Analysts say the move isn’t about the trade war.
/jlne.ws/2HRtzAJ

UK accused of spoiling the green bond party; International investors have flagged concerns over liquidity and price
Nikou Asgari – FT
At last month’s G7 summit in Biarritz, UK prime minister Boris Johnson pledged funding to tackle deforestation in the Amazon. But when it comes to green bonds — whose proceeds would be used to help tackle climate change at home — Britain is standing against the current, resisting calls from investors to join the ranks of sovereign issuers.
/jlne.ws/2HRfWRX

Markets reflect too much confidence in US-China trade deal; Investors learn not to rely unduly on central banks, but still show undue optimism
Mohamed El-Erian – FT
The more it changes, the more it remains the same. Markets and central banks have been stuck in an unhealthy co-dependence since the global financial crisis. Spoiled by too many years of timely and significant liquidity support from central banks, investors have long transitioned away from their traditional role of pressing for favourable policy changes — their longstanding role of “vigilantes” — to happily backing policies that have narrow chances of delivering durable economic improvements.
/jlne.ws/2HRrdBJ

A Paradigm Shift in Markets? Probably Not; Big market moves don’t always reflect reality. Plus central bank pushback, slumping soybeans and more.
Robert Burgess – Bloomberg
Over the long term, markets are generally rational and efficient entities. On a day-to-day basis? Not so much. That was proven on Thursday as global equities surged to cap their biggest two-day gain since January and government debt securities tumbled. The popular iShares 20+ Year Treasury Bond exchange-traded fund plunged 1.81% in its biggest drop since March 2017.
/jlne.ws/2HRrp3V

BOJ’s Kuroda says deepening negative rates is among options: Nikkei
Daniel Leussink, Leika Kihara – Reuters
Bank of Japan Governor Haruhiko Kuroda said cutting interest rates further into negative territory is among the bank’s policy options, according to an interview with the Nikkei newspaper published on Friday.
/jlne.ws/2HPk7ha

Mohamed El-Erian on the bond markets: ‘If you stick with the old rules, you will lose’
Matt Clinch – CNBC
Economist Mohamed El-Erian told CNBC Friday that investors need to think differently about the global bond market, saying that the asset class should be treated in an “opportunistic” manner rather than as a core part of a portfolio.
/jlne.ws/2HMw72U

The Explosion of ‘Alternative’ Data Gives Regular Investors Access to Tools Only Hedge Funds Used to Have
William Watts, MarketWatch
“Alternative data” is going mainstream as fund managers are projected to spend more than $1 billion this year to beat the market averages and stave off the rise of low-cost passive investing.
/jlne.ws/2HPJXkW

With 49 Deals in 30 Hours, U.S. Corporate Bond Market Ignites
Molly Smith , David Caleb Mutua , and Gowri Gurumurthy – Bloomberg
Record-breaking issuance comes amid plunging debt yields; Companies are mostly refinancing instead of investing
Corporate America is lining up at the debt trough again. Companies are borrowing $74 billion in the U.S. investment-grade bond market this week, the most for any comparable period since records began in 1972. Since Tuesday, corporations including Coca-Cola Co., Walt Disney Co., and Apple Inc. have sold notes as yields have dropped.
/jlne.ws/2ZTZVku

Institutions

Deutsche Bank Wealth Management – a dark horse?
Euromoney Magazine
At the end of 2018, DBWM had $243 billion under management – about one-10th the amount at UBS.
Indeed, it might be tempting to write the business off as a basketcase, given the constant turmoil at Deutsche Bank more broadly – including the 18,000 jobs being culled within the latest restructuring plan.
/jlne.ws/2zUbhtY

Hedge Fund Loses $1 Billion in One Month on Argentina Bet; Autonomy Capital’s founder, Robert Gibbins, is known for making concentrated investments
Rachael Levy – WSJ
Hedge fund Autonomy Capital lost about $1 billion last month largely on investments tied to Argentina, making it one of the most prominent investors caught on the wrong side of market turmoil in that country.
/jlne.ws/2HPW5Tc

Woodford crisis shines spotlight on fund supermarket ‘best buy’ lists; Experts warn of the dangers of investors’ reliance on platforms’ recommendations
Siobhan Riding – FT
Where do you go when you want a recommendation for a book, album, TV series or film? Like many UK consumers, the chances are that you are more likely to consult the lists of top picks offered by Amazon, Spotify or Netflix, rather than browse the shelves of your local shop.
/jlne.ws/2HRgfMB

Bill Ackman’s $500 Million Bet on Himself Pays Off After Losing Streak
Tom Maloney and Scott Deveau – Bloomberg
Shares of Pershing Square Holdings have surged 47% this year; Fund rebounds after wrong-way bets on Valeant and Herbalife
Bill Ackman made a big bet on himself even as some investors were second-guessing the future of his hedge fund, Pershing Square Capital Management. So far, it’s paying off.
/jlne.ws/2HRfd3b

Goldman is culling the ranks of its richest employees amid CEO David Solomon’s internal review
Hugh Son – CNBC
David Solomon is cleaning house atop Goldman Sachs. At least a dozen partners are in negotiations to leave the firm in coming weeks, according to a person with knowledge of the situation.
/jlne.ws/2ZU0N8K

Regions

Hong Kong’s withdrawal of extradition bill adds more awkward questions for China; Beijing’s National Day celebrations face prospect of being overshadowed by Hong Kong counter-protests
Tom Mitchell and Xinning Liu and Nicolle Liu – FT
In the end it was a 20-minute leaked audio recording that prompted the biggest surrender by Chinese president Xi Jinping since he assumed power in late 2012.
/jlne.ws/2HS6duy

China’s Education Stocks Teach Investors a Lesson; Tighter regulation is inevitable in the country’s financially promising but politically sensitive school system
Jacky Wong – WSJ
Investors in the Chinese education system have learned a hard but necessary lesson: Ignore Beijing at your peril.
/jlne.ws/2HRgDL3

Australia’s Westpac faces fee-for-no-service lawsuit
Byron Kaye – Reuters
Australia’s Westpac Banking Corp (WBC.AX) has been served a class action lawsuit accusing it of charging thousands of pension fund customers for services they never received, joining a parade of big-ticket litigation arising from a major inquiry into the financial sector.
/jlne.ws/2HRox7b

Brexit

Boris Johnson Bungles His Dream Job; This week has tested the capacities of Britain’s constitution-free democracy.
Mark Gongloff – Bloomberg
Boris Johnson always wanted to be prime minister, and now part of him must wonder why. On Tuesday and Wednesday he lost his parliamentary majority, his first four House of Commons votes, 21 members of his party and control over the Brexit process. Today his own brother bailed on him, he talked so much he made a cop faint, and a constituent politely told him to leave town. When saying you’d “rather be dead in a ditch” than delay Brexit is the highlight of your week, you’re not exactly having a good one.
/jlne.ws/2HRny6Z

Boris Johnson Wins Second Legal Challenge Over Parliament Suspension
Jeremy Hodges and Jonathan Browning – Bloomberg
Case will go to straight to U.K. Supreme Court on Sept. 17; Giving up would be a dereliction of our duties, Miller says
U.K. Prime Minister Boris Johnson won a second legal challenge over his plan to suspend Parliament ahead of a deadline to leave the European Union, pushing an appeal to the country’s top court after the start of prorogation.
/jlne.ws/2HPjHY8

UK PM Johnson’s brother quits parliament, torn between family loyalty and national interest
William James – Reuters
British Prime Minister Boris Johnson’s younger brother, Jo, has resigned as a junior minister and said he would also step down as a lawmaker, citing a conflict between family loyalty and the national interest.
/jlne.ws/2ZWUdhT

Miscellaneous

People Like You More Than You Think; A behavioral economist answers questions on making friends, sliding-scale pricing and buying a new car
Dan Ariely – WSJ
You will be relieved to know that most of us tend to underestimate how much people enjoy our company. In 2018, Erica J. Boothby and colleagues published a paper about the “liking gap”—the difference between how much we think other people like us and how much they actually like us. In one of their studies, they asked first-year college students to rate how much they liked a given roommate and how much they believed their roommates liked them, starting in September and continuing throughout the school year.
/jlne.ws/2HSdeLU

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Past Newsletters

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