Hong Kong’s Global Financial Clout Clouded by Uncertainty; LME bans drinking during work hours

Jun 14, 2019

First Read

Hits & Takes
JLN Staff

I have been asked to participate in a conference in Hong Kong in October. I hope to be able to participate. It will either take some more healing of my hip and some answers, or a lot of pain pills to make that long flight. And hopefully Hong Kong will have settled down by then.~JJL

Someone on Twitter pointed out that normally people protesting are asking for more rights, while protesters in Hong Kong are trying to protect their rights.~JJL

CME Group has agreed to be the sponsor of the backpacks again for the MarketsWiki Education World of Opportunity series in Chicago. Other sponsors include FTSE Russell, Barchart.com, Trading Technologies, Stuart School of Business at Illinois Tech and The IFM. If you are interested in sponsoring the Chicago series, which involves free spots for your interns, please contact me. Or, if you are interested in contributing some swag to give to intern attendees, please let me know.~JJL

We are looking for a sponsor, or sponsors, for our weekly news update. Email me if you are interested.~JJL

Our Coin of the Week is Litecoin (LTC), which was created by former Google and Coinbase employee Charlie Lee. One Twitter user recently quipped that Litecoin has been performing so well in the cryptocurrency markets this year that “Craig Wright will soon be claiming he’s Charlie Lee.”~MR

The first big SPIKES Volatility Index options trade – 15,000 contracts as part of a ratio call spread – was executed on Tuesday. Via Henry Schwartz on LinkedIn.~SD

According to a survey from Broadridge, the top five priorities Wall Street firms have for AI applications are data mining, post-trade processing, market analytics and trading systems.~SD

BarclayHedge’s CTA indices have begun to be updated with May data. With 55% of relevant funds reporting, the cryptocurrency traders index was up 33.9%, bringing YTD returns to 56%. Meanwhile, with 75% of funds reporting, the general CTA index was down .22 percent for May, bringing YTD returns to 2.24 percent.~SD


When commodities get hooked on derivatives; The distortions will damage the welfare of market participants and society at large
Ruslan Kharlamov and Heiner Flassbeck – FT
Pick up marketing materials of any commodity exchange and it’s all about “risk management”. For many bourses, however, a real business lies elsewhere. It needs no advertising and shuns public scrutiny. This is the business of making markets: a licence to set prices for raw materials. As these markets went global, so did the function of their pricing and benefits for those controlling this function.

***** Some rather questionable assertions in here. This echoes the “speculation is evil” themes of the past, coming at a time when open interest on the CME Group is at an all time high. That is people transferring risk, one of the two main purposes of the markets. It discounts the value of mass participation in the markets. Somehow participation in the markets equals price discovery distortion.~JJL


CFTC Relaunches “CFTC Talks” as a Videocast
The Commodity Futures Trading Commission (CFTC) is relaunching its “CFTC Talks” podcast as a videocast. This new series will focus on providing market insights, information, and analysis, leveraging the agency’s extensive data, while also featuring discussions and opinions from derivatives market experts and participants. In addition, these videocasts will focus on analyzing rapid changes to market structure and conditions affecting the broad spectrum of U.S. derivatives markets, including both swaps and futures. New episodes of the videocast will be released monthly.

***** A good first effort, but it has a long way to go. I really like that are taking this step. Too many talking heads in the first one and not enough charts, or interactive charts. Probably a little long, but it will depend on the subject matter.~JJL


OCC Announces Four New Senior Leaders
OCC, the world’s largest equity derivatives clearing organization, today announced the appointment of four new senior leaders, including a new General Counsel.
“We are very pleased to bring these talented individuals on board,” said OCC Chief Executive Officer John Davidson. “These appointments demonstrate OCC’s continued ability to attract the best talent as we work to stay ahead of risk, foster innovation and lead the U.S. equity options industry in developing further efficiencies and growth.”
-Janet Angstadt, EVP and General Counsel
-Saqib Jamshed, SVP, Model Risk Governance
-Pat Hickey, SVP, Product and Business Development
-Sandeep Maira, First Vice President, Head of Risk Solution Delivery and Support

***** None of the new hires came from the CME Group, which means the pipeline must be drying out. Also, Pat Hickey is the new Chip Dempsey, which are big shoes to fill.~JJL


Thursday’s Top Three
Our top story of the day was the top story on Tuesday as well – Simply Wall Street’s piece about Terry Duffy in How Much Did CME Group Inc.’s CEO Pocket Last Year?. Second was the FIA Principal Traders Group op/ed piece The Time for Reform is Now, about its concern that “the proliferation of venues and order types, artificially boosted by regulation, has resulted in an increasingly complex and unnecessarily costly market structure.” Third was Reuters’ piece China launches Nasdaq-style tech board in Shanghai, expects challenges about the so-called STAR Market, mainland China’s first exchange-run market that allows pre-profit firms to list.


MarketsWiki Stats
155,317,050 pages viewed; 23,810 pages; 220,130 edits
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CryptoMarketsWiki Coin of the Week: Litecoin (LTC)
Litecoin, a cryptocurrency created in 2011 by former Google and Coinbase employee Charlie Lee, has increased in price by 330 percent since the beginning of 2019, consistently outpacing Ethereum, XRP, and Bitcoin Cash. This can be attributed to the upcoming “halving,” a software update for the Litecoin protocol that changes the amount of LTC awarded to Litecoin miners, reducing it by 50%. When similar updates took place in the past, they usually caused a major price surge. Currently, miners are awarded with 25 LTC for successfully mining enough Litecoin transactions; after August 6, they will be awarded 12.5 LTC.


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.

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Lead Stories

Hong Kong’s Clout as a Global Financial Center Clouded by Uncertainty; Extradition bill controversy has prompted more wealthy Chinese in Hong Kong to consider moving money to places like Singapore
Steven Russolillo and Mike Bird – WSJ
The controversial prospect of extraditions from Hong Kong to mainland China has thrown fresh doubt on the city’s status as a global financial hub.

London Metal Exchange calls time on drinking during work hours; The commodities exchange has come under growing scrutiny for its culture
Henry Sanderson and Neil Hume – FT
The long liquid lunch will soon be a thing of the past at the London Metal Exchange, one of the last bastions of face-to-face trading. The world’s biggest marketplace for industrial metals is introducing a policy that will ban floor traders and their support staff from consuming alcohol during working hours.

SEC official calls for scrutiny of CEOs’ social media use; Robert Jackson suggests guidelines for executives on Twitter and Facebook
Robert Armstrong and Robin Wigglesworth – FT
Robert Jackson, one of Securities and Exchange Commission’s four commissioners, said the agency should consider publishing new guidance on chief executives’ use of social media platforms such as Twitter and Facebook, in the wake of controversies involving Tesla founder Elon Musk.

Crypto Exchange Binance.com to Block US Customers from Trading
Nikhilesh De – Coindesk
Binance.com, the world’s largest cryptocurrency exchange, is revamping its internal policies and cracking down on wayward users.

LevelTradingField Announces OX – Ontario Exchange, a Canadian Derivative Exchange for Cannabis; Launch of regulated, futures and options contracts on Cannabis planned for November 2019
LevelTradingField LLC
LevelTradingField, a leading provider of exchange technology, today announced that it plans to form a new Canadian company, Ontario Exchange (OX), which intends to leverage the LevelTradingField technology infrastructure to establish an electronic derivatives marketplace for cannabis in Canada.

Bunds hit new record after renewed investor shift into safe assets; Weak data from China add to worries over geopolitical tension in the Middle East
Michael Hunter and Alice Woodhouse – FT
Investors moved into safe retreats on Friday, pushing government bond yields and stock indices lower after shaky economic data from China added to worries over geopolitical tension in the Middle East.

Putting Bakkt’s Bitcoin Futures to the Test
Adam White, Bakkt Blog – Medium
On July 20, 2019, the world marks the 50th anniversary of the first human landing on the Moon. When Neil Armstrong planted his foot on the lunar surface five decades earlier, he made good on what President John F. Kennedy promised would be America’s “moonshot bet.”

**** “On July 22, two days after Apollo 11’s 50th anniversary, Bakkt will initiate user acceptance testing for its bitcoin futures listed and traded at ICE Futures U.S. and cleared at ICE Clear US.”~SD

US Govt says spoof orders placed by Navinder Sarao may have affected thousands of market participants
Maria Nikolova – FinanceFeeds
As the proceedings against former futures trader Navinder Singh Sarao continue, the United States Government is seeking the Court’s approval to establish an alternative form of notification for the multiple victims of the crime.

Nationalize LIBOR-Indexed Funding
Kurt Dew – Seeking Alpha
Should we nationalize the short-term index rate market? The arguments to do so are compelling. The nation’s financial health depends in part on successful reform of the unreliable way we raise and allocate short-term money. We have already nationalized a related market, a portion of the market for mortgage funding, by creating the federal housing agencies, Fannie Mae and Freddy Mac, and the mortgage-backed security.

KPMG to Pay as Much as $50 Million to Settle SEC Probe; Fine, stemming from a leak at an audit regulator, would be one of the highest ever imposed by the SEC on an auditor
Dave Michaels – WSJ
KPMG LLP is preparing to pay as much as $50 million to settle civil claims related to the conduct of former partners who learned which of their audits would be subject to surprise regulatory examinations, according to people familiar with the matter.

Facebook’s New Cryptocurrency, Libra, Gets Big Backers
AnnaMaria Andriotis, Peter Rudegeair and Liz Hoffman – The Wall Street Journal
Facebook Inc. has signed up more than a dozen companies including Visa Inc., Mastercard Inc., PayPal Holdings Inc. and Uber Technologies Inc. to back a new cryptocurrency it plans to unveil next week and launch next year. The financial and e-commerce companies, venture capitalists and telecommunications firms will invest around $10 million each in a consortium that will govern the digital coin, called Libra, according to people familiar with the matter.

Facebook hires British bank lobbyist ahead of cryptocurrency launch; StanChart’s head of public affairs to join social media group as director of public policy
Stephen Morris – FT
Facebook has hired a senior British bank lobbyist as it braces for greater political and regulatory scrutiny in Europe over its plans to launch its own digital currency and other financial services to its 2.4bn users.

Pimco Parent to Offer Active Funds at ‘ETF-Like’ Prices
Stephan Kahl – Bloomberg
Insurer is teaming up with robo adviser in which it has stake; New share class for digital wealth managers created by Allianz
Pimco parent Allianz SE is deepening its foray into digital wealth management.

Rhode Island Looks to Adopt Blockchain For Government Use
Daniel Kuhn – Coindesk
Rhode Island issued a request for proposals aimed at exploring the viability of blockchain technology to improve state operations. This comes on the heels the state relaxing certain security laws for blockchain businesses.

Exchanges, OTC and Clearing

London Metal Exchange Bans Drinking Alcohol During Workday
Mark Burton – Bloomberg
The exchange is seeking to clean up the industry’s image; The LME has discussed the policy with ring-dealing members
The London Metal Exchange is toughening its stance on alcohol consumption with new rules that will prohibit floor traders from drinking during the workday, according to people familiar with the matter.

****The LME’s proposed speed bump isn’t the only thing giving traders pause.~SD

ISLA conference 2019: let’s talk about “Transition, Innovation, Future State”
Just a few days to go until ISLA’s 28th Annual Securities Finance and Collateral Management Conference will open its gate in Madrid. From 18 to 20 June experts will gather to discuss the current confluence of political and regulatory flows that will define much of the industry for the next five to ten years. We asked our participants Jonathan Lombardo, Matthias Graulich, Marcel Naas and Frank Gast which topics are most important to them, what they are looking forward to and their general expectations for the upcoming conference.

High Stakes – AFR Boss article

SGX welcomes DA Financial Services as Derivatives Trading Member
Singapore Exchange (SGX) today welcomed DA Financial Services (S) Pte. Ltd. as a Trading Member of its derivatives market.

PanXchange Frac Sand Market Data Now Available on Quandl
PanXchange, an OTC exchange and price discovery platform for physical commodities, today announced that it will distribute its proprietary pricing data for hydraulic fracturing proppants, better known as frac sand, through Quandl, a leading provider of financial and alternative data for financial professionals.


John Hancock Investment Management Arms its Sales Team with YCharts
Press Release
John Hancock Investment Management, a company of Manulife Investment Management, one of the industry’s leading providers of multimanaged investment solutions, announced today that it has entered into an agreement to outfit the company’s sales division with YCharts, a cloud-based investment research and analysis platform.

As the Antitrust Debate Heats Up, It Could Have a Chilling Effect
Eric Newcomer – Bloomberg
Here’s one piece of antitrust news you might have missed last week, amid revelations that the U.S. government is scrutinizing four of the largest tech companies: Mexico said it objected to Walmart Inc.’s $225 million acquisition of a grocery delivery startup called Cornershop.

‘BETSI’ bot optimising equities trading workflow for JP Morgan Asset Management; Equity trading bot launched in Q1 providing automated workflow processes for notifications, indications and RFQs for asset manager’s global equity trading.
John Brazier – The Trade
As automation continues to permeate buy-side technology and trading operations, the use of automated bots within trading technology workflows is also beginning to show signs of value for asset managers.

ION GTP Wins Best Sell-Side OMS At The TradingTech Insight Awards – Latest Accolade Confirms ION’s Leadership In Cleared-Derivatives Workflow Technology
ION has announced that GTP, its derivatives trading platform, has won Best Sell-Side Order Management System at the A-Team TradingTech Insight Awards – North America.

Itiviti’s low-touch trading solution wins Technical Analyst Award
Itiviti, a leading technology and service provider to financial institutions worldwide, has been presented with the 2019 Technical Analyst award. Following an extensive review process, Itiviti’s low-touch trading solution was named a winner in the Best Trading System: Execution category.


Jack Dorsey says now is our chance to build a global currency for the internet
John Detrixhe – Quartz
Jack Dorsey is best known for co-founding Twitter, the micro-posting website that now has around 330 million users around the world. In 2009, the computer programmer also co-founded Square, which was originally designed to help small businesses accept credit cards.

Latest twist in the Kleiman case could upend Craig Wright’s libel lawsuits
Guillermo Jimenez and Ben Munster – Decrypt
A court has given Wright until Monday to produce all of his bitcoin addresses or face consequences. And it could even jeopardize all his libel lawsuits.

A 360% Rally Puts Focus on Litecoin, Crypto’s Top 2019 Performer
Vildana Hajric and Olga Kharif – Bloomberg
Litecoin is outperforming its major peers, including Bitcoin; The token’s mining rewards will be slashed in half in August

Blockchain project Spring Labs gets $23 million in funding
The Block Crypto
Blockchain company Spring Labs has announced it has closed its Series A investment round and pocketed $23 million in funding. GreatPoint Ventures led the round, with participation from existing investors, such as August Capital and General Motors Ventures. The company will use the funds to build applications on its Spring Protocol. The company is focusing first on blockchain-based tools to combat fraud. The first products to be built on Spring protocol are identity verification solution Spring Verify, Spring Defense for fraud monitoring and mitigation, and Spring Protect for loan stacking prevention.

Bakkt Reveals Bitcoin Futures Contract Details Ahead of July Test Date
Nikhilesh De – Coindesk
The Intercontinental Exchange’s pending bitcoin platform Bakkt plans to begin testing its two futures contracts on July 22 of this year. In a blog post that likened Bakkt’s launch to the Apollo 11 moon landing, chief operating officer Adam White wrote Thursday that the platform will “initiate user acceptance testing” for its bitcoin futures contracts, which will be listed and traded by its parent company. Bakkt announced last month that it would begin testing in July, though it did not provide a specific date at the time. In addition to the date, ICE provided new details for Bakkt’s monthly contract, as well as updated the contract specifications for its daily contract.

Bitfinex Is Starting to Buy Back and ‘Burn’ Its LEO Exchange Token
Daniel Palmer – Coindesk
Cryptocurrency exchange Bitfinex has announced a transparency initiative that will see it put on full view the buying back and “burning” of its LEO exchange token. In an announcement Friday, the firm said as part of its token redemption process, the UNUS SED LEO Transparency Initiative will provide a dashboard allowing the public to see parent firm iFinex use its gross revenues to purchase circulating LEO tokens at market rates. These will then be destroyed, or burned, as the firm effectively pays back those who bought the exchange token in a $1 billion sale early last month.

IRS Agent Who Took Down ‘Silk Road’ Turns His Attention To Recreational Bitcoin Investors
Hank Tucker – Forbes
The Internal Revenue Service has a message it wants to get out to recreational bitcoin investors who think they can dodge taxes on their cryptocurrency gains ó it knows what’s going on, and people won’t be able to get away with it for long.

US customers to be blocked from trading on Binance.com
Larry Cermak – The Block Crypto
Binance has announced that it will stop serving US individual and corporate customers on Binance.com in September. Non-verified U.S. customers will likely still be able to bypass the restrictions and trade on Binance.com using a VPN. Binance currently gets approximately 15% of traffic from U.S. customers.

Google Cloud Integrates Chainlink Oracles in Analytics Data Warehouse With ETH DApp Support
Marie Huillet – Cointelegraph
The Google Cloud team has integrated Chainlink’s oracle middleware with its BigQuery enterprise cloud data warehouse, allowing for an on-chain and cloud-based interaction with Ethereum decentralized applications and smart contracts. The news was revealed in a development report published on June 13. As previously reported, a blockchain oracle is a system that provides the necessary external data ó i.e. the variables to be evaluated ó to trigger the execution of a smart contract when the original terms of the contract are met.

Facebook reportedly brings on Visa, Mastercard, and PayPal as backers of its cryptocurrency
The Block Crypto
Social media giant Facebook’s yet-to-launch cryptocurrency appears to have attracted three major payments companies as backers, according to a report by The Wall Street Journal.


Foreign Election Interference Is Wrong, President Trump
Michael R. Bloomberg – Bloomberg
It was extraordinary to hear a U.S. president declare that the FBI director is “wrong” for saying that candidates should report to the FBI ó as the law clearly intends ó any effort by foreign agents to aid a political candidate by passing along opposition research. President Trump does not understand the value of the law prohibiting campaigns from such aid, nor does he appear to have any intention of following it.

Trump’s tariffs have wiped out a major US manufacturer’s corporate tax cut
Heather Timmons – Quartz
US president Donald Trump’s trade wars are hurting American companies and threaten the stability of the global economy, a group of Fortune 500 CEOs told reporters in Washington, DC today.
Some companies are suffering more than others.
All of the gains that Indiana engine-maker Cummins received from Trump’s 2017 corporate tax cut will be lost this year to the extra tariffs the company now must pay, said Cummins CEO Tom Linebarger.

How the US is weaponising the world economy; Donald Trump likes to use commerce for coercion, but the tactic could backfire
Tim Harford – FT
Back in 2002, serious people were worried about the possibility of a nuclear exchange between India and Pakistan. Millions might have died ó and the prospect seemed real enough that both the US and the UK advised their citizens to flee the region. How, then, was the crisis defused?


Abraaj Founder Arif Naqvi Accused of Misappropriating More Than $250 Million in New Indictment; Three more executives of failed private-equity firm Abraaj are named; companies and individuals assert losses of more than $1 billion
Simon Clark – WSJ
U.S. prosecutors accused Abraaj Group founder Arif Naqvi of misappropriating more than $250 million in a widening investigation into the world’s biggest failed private-equity firm. The accusation was made in an updated criminal indictment published Thursday.

MiFID II periodic auctions survive intense regulatory scrutiny; ESMA’s final report on periodic auctions says venues are not used to evade MiFID II dark trading rules, as fears of outright ban are dampened.
By Hayley McDowell – The Trade
Periodic auctions operating in the new trading environment under MiFID II will not be significantly constrained or banned outright by authorities in Europe after months of scrutiny.

ESMA Updates Q&A on EMIR Data Reporting
The European Securities and Markets Authority (ESMA) has issued today an update of its Q&A on practical questions regarding the European Markets Infrastructure Regulation (EMIR).

Podcast: A View into the WTI Crude Oil Derivatives Market Structure

Effective date for amendments to incorporate swaps supervision requirements and make technical changes to certain NFA Rules and Interpretive Notices
NFA recently amended several Compliance Rules and Interpretive Notices to expressly incorporate supervision requirements for Members’ swaps activities. As amended, NFA Compliance Rule 2-9(a) will specifically apply to the commodity interest activities of futures commission merchant (FCM), introducing broker (IB), commodity pool operator (CPO) and commodity trading advisor (CTA) Members, thereby covering the swaps activities of those Member categories. In addition, NFA adopted Compliance Rule 2-9(d), requiring swap dealer (SD) Members to diligently supervise the swaps activities of their employees and agents. NFA also amended several related Interpretive Notices primarily to identify the supervisory obligations that apply to specific Member categories and made a number of non-substantive technical amendments.

Reactions Mixed to Reg BI Passage
John D’Antona Jr. – Traders Magazine Online News
Regulation Best Interest is almost in the books.
And opinions are divided on the final product. It appears to be a case of ‘you can please some of the people some of the time. But you can’t please everyone all of the time.’

CFTC commissioner backs non-cleared margin docs relief; Stump calls for US to enact BCBS-Iosco $50m threshold for operational requirements
Noah Zuss – Risk.net
Dawn DeBerry Stump, a commissioner at the Commodity Futures Trading Commission, has urged US regulators to transcribe recent international relief on non-cleared margin thresholds into local rules.

Investing and Trading

E*TRADE Study Reveals Dads and Moms Are Significantly More Likely to Embrace New Tech & Tools to Manage Finances
Parents outpace the general population in wanting to leverage mobile, voice, social, and other new technologies in managing their investments

The Market’s Inflation Expectations Aren’t Making Sense; Inflation expectations pointing to risks of deflation in Europe and an inflation surge in the U.K. are probably misfiring
Jon Sindreu – WSJ
Inflation expectations implied by the price of financial assets are a key guide for central bankers and investors alike. Seeing how they have behaved of late, their credibility should be questioned.

Green bonds investors cite benefits of ESG sector; Environment, social and governance products seen as a solid means of boosting returns
Billy Nauman – FT
More than half of all retail investors who have placed money in so-called impact investment products, such as green bonds, expect to increase their share of the sector in the next two years, a survey by the Rockefeller Foundation and Longitude Group shows.

Slack’s Direct Listing Leaves Wall Street Fighting for Fees; Banks can still make money when companies skip a traditional IPO, but the spoils go to a select few.
Sonali Basak, Ellen Huet, Crystal Tse – Bloomberg
Wall Street had good reason to be anxious last year when music streaming company Spotify Technology SA did a so-called direct listing, putting shares on the market without opting for a traditional initial public offering. Underwriting and advising on IPOs are among the biggest fee generators for the biggest banks, and it suddenly looked like companies had a new, cheaper alternative. Now another hot tech company, Slack Technologies Inc., is giving a direct listing a try on June 20. Wall Street is about to find out how afraid it should be.

Wall Street’s Top Pessimist Says VIX May Be Flashing a Warning
Joanna Ossinger – Bloomberg
‘Fear gauge’ high given S&P 500’s current levels: Cecchini; Cantor strategist still says to sell large-cap U.S. stocks
The VIX with a 15-handle might be less benign than it seems.

Copper price is being held hostage by macro jitters; Trade war and supply angst overshadow strong fundamentals for industrial metals
Neil Hume – FT
The macro is trumping the micro in commodity markets. Since US President Donald Trump’s May 6 tweet threatening higher tariffs on hundreds of billions of Chinese goods, major raw materials have been in the doldrums with only gold, iron ore and a few weather-hit crops managing to buck the trend. Everything else has been under pressure.


Jay Feuerstein, “Top Trader of 2008,” re-emerges as Trident Capital Management LLC
PRNewswire via Yahoo
Jay Feuerstein, Futures Magazine “Top Trader” of 2008, has re-emerged as Trident Capital Management LLC, which touts a systematic, cutting edge, three-pronged investment approach steeped in fundamental underpinnings, rather than the traditional technical trend following strategy.

HSBC Carves Special Role as Banker to Saudis; As kingdom tries to attract investment after Khashoggi killing, bank draws on decadeslong ties to build business
Rory Jones and Margot Patrick – WSJ
When Saudi Arabia wanted to demonstrate it was open again for global investors after the killing of journalist Jamal Khashoggi, officials turned to a longtime banker to the kingdom: HSBC Holdings PLC.

Former Fidelity Manager, Accused of Harassment in 2017, Plots a Comeback; Fidelity partnered with former employee in his new fund, then reversed course
Juliet Chung and Corrie Driebusch – WSJ
One of Fidelity Investments’ star stock pickers left the firm in 2017 following allegations of sexual harassment. Nearly two years later, he’s attempting a comeback.

UBS Economist’s ‘Chinese Pig’ Comment Hits a Nerve; Chief economist Paul Donovan made a reference to Chinese pigs in a discussion about rising consumer prices in the country
Shen Hong and Mike Bird – WSJ
An errant comment from a London-based economist at UBS Group AG has sparked furor among Chinese securities professionals, even after the economist apologized and said he didn’t intend to offend anyone with his remarks.

Chinese brokerage severs ties with UBS over pig comment; Securities body calls for Swiss bank to fire economist over remark in research note
Hudson Lockett and Daniel Shane – FT
A Chinese financial group has suspended business between its Hong Kong unit and UBS after remarks about swine fever in China made by the Swiss bank’s chief economist drew the ire of a nationalist tabloid and an industry group called for his removal.


Gulf of Oman Attacks Scramble a Crucial but Dangerous Shipping Route
Costas Paris, Summer Said and Benoit Faucon – WSJ
Attacks on two tankers carrying Saudi and Emirati oil products are jacking up insurance rates for ship operators in the region, and forcing some captains to forgo setting sailóthreatening one of the biggest disruptions to crude trading in the Gulf of Oman in years.

The World Cries Out for Onion Derivatives
Mike Bird – WSJ
The cost of onions is causing tears in India. An onion futures market, which would damp volatility in the price of the aromatic bulb, might help dry them.

Turkey seeks jail terms for two Bloomberg reporters
Laura Pitel – FT
Turkey has launched a criminal investigation into two Bloomberg journalists over a story published at the height of a currency crisis that struck the country last summer.

Huatai Securities to raise as much as $1.7bn in London listing; Chinese brokerage prices stock towards lower end of range
Sarah Provan – FT
Brokerage Huatai Securities, the first Chinese group to list in London as part of a link between the two financial centres, has priced its stock towards the lower end of its range to raise as much as $1.7bn.

Italy’s Euroskeptic Market Regulator Favors European Safe Asset
Marco Bertacche – Bloomberg
Paolo Savona, the euroskeptic who heads Italy’s market regulator, made a surprising admission on Friday: he supports a call by the European Central Bank to create a so-called European safe asset.

The EU’s Secret Plan for a Catastrophic Grexit; A new book, The Last Bluff, reports on official preparations for the disaster that almost was.
Viktoria Dendrinou, Eleni Varvitsioti – Bloomberg
A small team of 10 EU economists and lawyers huddled on the 15th floor of the Charlemagne building, the European Commission’s economic headquarters in Brussels, and dusted off the old Plan B in case negotiations failed and Greece defaulted. The reasons for secrecy remained the same as 2012. But the plan had to be renamed because Croatia had since joined the EU. Thus, the 157-page “Albania Contingency Analysis & Plan, Sovereign Default 2015” was all about what to do to minimize the economic and humanitarian catastrophe should Greece be forced out of the EU and the euro zone.

Hyperinflation Forces Venezuela to Roll Out Three New Large Bills
Andrew Rosati and Patricia Laya – Bloomberg
Venezuela said it will introduce large-denomination bolivar notes as hyperinflation erases the currency’s value and complicates the most ordinary purchases in the crisis-ravaged nation. On Wednesday, the country’s central bank posted a statement on its website saying it would begin circulating the new 10,000, 20,000 and 50,000 bills to make payments “more efficient” and “facilitate business transactions” without providing further details.


A no-deal Brexit would be a lunacy wrapped up in a stupidity
Martin Wolf – FT (Opinion)
After three years and two missed deadlines, we must leave the EU on October 31.” Thus did Boris Johnson launch his campaign for leadership of the Conservative party at a pivotal moment in the UK’s history. Choices made now will reverberate for generations. Trusting Mr Johnson’s words is always foolhardy. But the implications are clear: if he cannot obtain a better deal than Theresa May’s (which the House of Commons has rejected three times), he must either turn tail or choose a no-deal Brexit.

IoD calls on business to speed up no-deal Brexit preparation; Lobby group’s members told they cannot afford to put faith in politicians to produce resolution
Daniel Thomas – FT
British businesses have made little progress preparing for Brexit in October in spite of the growing possibility that the UK will leave without a withdrawal agreement with the EU, according to the Institute of Directors.

Brexit: UK in “pretty good shape” for no-deal says top civil servant
BBC News
The government is in “pretty good shape” to cope with a no-deal Brexit, the head of civil service has said. Speaking at an event organised by the Institute for Government, Cabinet Secretary Sir Mark Sedwill said there had been “a lot of preparation”. He said: “We have got the government in pretty good shape and public services in pretty good shape for it”.

Conservative Muslim chair to quit if Johnson wins leadership race
BBC News
The chairman of the Conservative Muslim Forum has told the BBC he will resign his party membership if Boris Johnson wins the leadership race. Mohammed Amin said the MP was not “sufficiently moral” to be PM. He criticised Mr Johnson’s comments about burkas and his denial that he had mentioned potential Turkish membership of the EU when campaigning for Brexit. But MP Priti Patel defended Mr Johnson, who had apologised for any offence caused and had defended women’s rights.


Cargill warns goal of halting deforestation will be missed; Continued conversion of forests into farms scuppers 2020 target set by 50 global groups
Gregory Meyer and Andres Schipani – FT
Cargill has warned that global companies will not meet their goal of halting the conversion of forests into farms by next year, dampening optimism for a critical resource to stem climate change.

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AT&T data on ‘nearly all’ wireless customers accessed in hack

AT&T data on ‘nearly all’ wireless customers accessed in hack

First Read Hits & Takes John Lothian & JLN Staff The Wall Street Journal reported that AT&T announced that a hacker downloaded call and text-message metadata covering almost all of its wireless subscribers from a third-party cloud system. The data breach,...

Citadel Securities Crafts Plan to Shake Up Banks’ Trading Desks

Citadel Securities Crafts Plan to Shake Up Banks’ Trading Desks

First Read Hits & Takes John Lothian & JLN Staff Bloomberg's Katherine Doherty is making waves this week with her impactful reporting, with her second story, co-written with Sridhar Natarajan, as the lead story in the John Lothian Newsletter. After breaking...

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