How the Allure of Mega Wealth Led Brokers Into Fraud Suits; China’s Banks Are Desperate for Capital

Jan 28, 2019

First Read

Hits & Takes
JLN Staff

A polar vortex has invaded the US midwest, dumping snow and record cold temperatures across the region. By some accounts, temperatures will reach lows never recorded before in the 48 contiguous states. On Wednesday in Chicago, the low is expected to reach -26 degrees with a high of -16.

Wednesday will be a stay at home and work from under the blankets day. I have given my staff permission to work from home any day this week they wish if they don’t feel safe in the weather conditions.~JJL

Sunday I completed my three-year term as treasurer of St. Peter’s Church in Elmhurst, IL. I was re-elected to another term as a deacon, but can’t serve more than three consecutive one-year terms as treasurer. My tenure as treasurer was highlighted at the end by a contentious vote for the 2019 budget, which I presented. The budget passed after a 66-22 vote. I have also been appointed the chair of the long range vision team for St. Peter’s, which will explore the short-term and long-term plans to grow the church and its impact.~JJL

On February 1, I officially become a Scoutmaster again, as I will be the leader of girl Troop 117G. The girls of my Exploring Club will become members of Scouts BSA and officially start on the path to Eagle.~JJL

CBS News has a story about the man who is behind one third of the entries on Wikipedia. Wow!~JJL

The Cboe Markets Data team has hired industry veteran Kevin Maude as director of market data sales, based in New York City. Congrats to both on the hire. ~SR

According to Weather.com, Chicago’s weather on Wednesday will be significantly lower than that of Siberia, Russia. ~MR

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‘The aristocrats are out of touch’: Davos elites believe the answer to inequality is ‘upskilling’
Heather Long – The Washington Post
Leaders of the world’s largest and most powerful companies are on edge. A decade after the financial crisis, their businesses are thriving and their pocketbooks are overflowing, but they worry about populism and the threat it poses to the global order they helped build.
Many executives gathered at the exclusive World Economic Forum this week acknowledged that inequality is a major problem fueling populist backlash, and that some middle-class jobs in the West are being lost to trade and automation (even though more jobs overall are being created around the world).
/wapo.st/2sP0iyL

****So if the whole world had the same skill-set as (say) Warren Buffett then everyone in the world would be a billionaire? ~JB

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E*TRADE Reflects on a Year of Corporate Giving, Philanthropy, and Community Service
Businesswire
E*TRADE and its employees across the country teamed up to volunteer and make a difference in their local communities and contribute to national charities. In 2018, more than 2,000 employees participated in 85 volunteer events across the US, in which they:
/read.bi/2FWZCjg

****Missed this last week. Nice work, E*Trade and people.~JJL

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Bridging the Week:: January 21 – 25 and January 28, 2019 (Security Tokens, Utility Tokens; Another Regulator’s Priorities)
Gary DeWaal – Bridging the Week
The UK Financial Conduct Authority issued proposed guidance concluding that only security tokens among the three principal types of cryptoassets are under the regulator’s oversight umbrella. Cryptocurrencies and utility tokens generally are not. Separately, the Financial Industry Regulatory Authority issued its annual Risk Monitoring and Examination Priorities Letter that outlined its principal areas of focus in 2019. Members’ supervision of digital assets business is among the key topics it will evaluate.
/goo.gl/k1z3iu

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Friday’s Top Three
Our top read stories were led by FT’s Intercontinental Exchange plans alternative rate to tarnished Libor. Second was Bloomberg’s Rothschilds Sell Last Piece of Austrian Empire After 200 Years. Third was Bloomberg’s Rally Rd. App Opens Soho Store for Investors in Classic Cars

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Lead Stories

How the Allure of Mega Wealth Led Brokers Into Fraud Suits
Mark Burton and Jonathan Browning – Bloomberg
Hong Kong client sent skillfully forged documents, broker says; Marex executive warns that contract ‘ain’t f–king kosher’
When the man running one of London’s biggest metals brokerages found a new client who wanted to finance large volumes of nickel held in warehouses in Asia, he thought the deal promised major rewards. Less than a year later, he worried that the disastrous decision to go ahead with the trade would cost him his job.
/bloom.bg/2FPD8AA

China’s Banks Are Desperate for Capital; Lenders can’t continue this pace of loan growth without a bigger cushion. Beijing needs to make fundraising easier.
Christopher Balding – Bloomberg
In the past decade, China has relied primarily on credit growth to fund its economic ambitions. The country’s banks are now feeling the constraints of this lending binge and need to raise a lot of capital over the next couple of years.
/bloom.bg/2G2pXM6

Hedge fund premier league fared better than rivals in 2018; The top 20 managers have delivered nearly half the sector’s long-term gains
Lindsay Fortado – FT
The all-time top 20 best-performing hedge fund managers made $23.2bn for their investors last year, while the rest of the industry lost $64.2bn in a tumultuous period for financial markets.
/on.ft.com/2FTI3k7

Deutsche Bank bosses mulled merger with BNP Paribas, SociÈtÈ GÈnÈrale; While Berlin lawmakers try to lure Germany’s largest bank into a tie-up with Commerzbank, it emerges that Deutsche sought partners further afield.
Handelsblatt staff
Beset with legal and financial troubles, Deutsche Bank executives have been looking at merger options at home and abroad that contrast with the Finance Ministry’s ideas about a marriage with Commerzbank.
bit.ly/2FSdnjb

Deutsche Bank to Get Qatari Commitment for More Funds
Steven Arons and Dinesh Nair – Bloomberg
Investment is likely to be made through sovereign wealth fund; Qatari royal family already owns stake in German lender
Deutsche Bank AG won a commitment for new investment from Qatar as the troubled German lender moves toward a potential merger with Commerzbank AG.
/bloom.bg/2G2j3X0

Hong Kong explores digital settlement of securities; HKEX will develop new systems for the proposed paperless regime, which could be in place by early 2022.
Hayley McDowell – The Trade
Hong Kong’s financial regulator, alongside the Hong Kong Exchanges & Clearing (HKEX), has proposed implementing a fully digital operational model for the settlement of securities in the region.
bit.ly/2FVXJDi

A $4 Trillion Scapegoat for Market Volatility: the Fed’s Shrinking Portfolio; Some investors blame the stock market’s volatility on the Federal Reserve shrinking its bond portfolio, but the critique puzzles Fed officials and some economists
Nick Timiraos – WSJ
Some investors blame the stock market’s volatility on the Federal Reserve shrinking its bond portfolio. But the critique puzzles Fed officials and some economists because there is little evidence of turmoil in the two markets where the central bank actively intervened: Treasurys and mortgage debt.
/on.wsj.com/2FSTI2u

China Created a New Tech Unicorn Every 3.8 Days Last Year
Bloomberg News
The pace of billion-dollar startup births slid last quarter; Tech investment may be decelerating as the economy weighs
The pace of billion-dollar startup creation slowed markedly in China in 2018’s final quarter as the country’s largest tech startups shored up their dominance and the economy decelerated.
/bloom.bg/2FRFvTD

Former Barclays Executive Said He Couldn’t Sleep After Secret Qatari Deal
Franz Wild – Bloomberg
Four former Barclays executives on trial on fraud charges; Second week of six-month trial started Monday in London
A former Barclays Plc executive told a bank attorney that he couldn’t sleep because of worries that reporters might discover the lender’s secret payment to Qatar, which helped prop up the bank during the 2008 financial crisis.
/bloom.bg/2FUzTbg

Brexit will leave the UK ‘unstable’ for decades with violence on the streets and independence referendums in Scotland and Northern Ireland, EU intelligence secret report warns
Zoie O’Brien, Tim Sculthorpe – Mailonline
Violence could erupt on the streets of Britain in the wake of Brexit according to a secret report by European officials. Senior intelligence officials warned that civil unrest and rioting is almost inevitable and the UK will be left ‘unstable’ for decades.
/dailym.ai/2FToE2I

A lesson in how not to lose $40 billion in stock overnight
Emma Richards – Asian Correspondent
Losing over US$40 billion from a company’s market value almost instantaneously is not something most of us will have to deal with throughout our professional lives, but that’s exactly what Hong Kong-British conglomerate Jardine Matheson experienced on Thursday as they saw an 83 percent drop in share price overnight.
bit.ly/2FWWYtQ

ISDA Lays Out CCP Best Practices Following Nasdaq Default
Garima Chitkara – Regulation Asia
Clearinghouses should consider multiple risk factors in determining exposure and put more of its own capital on the line to manage defaults before dipping into the member default fund.
bit.ly/2FU7PEY

Virtu Provides Update Regarding Acquisition of ITG
Virtu
Virtu Financial, Inc. (NASDAQ: VIRT) (“Virtu”), a leading technology-enabled market maker and liquidity provider to the global financial markets, today provided the following update regarding its previously announced agreement to acquire Investment Technology Group, Inc. (“ITG”), a global financial technology company that helps top brokers and asset managers improve returns for investors around the world:
bit.ly/2DBrJlC

Exchanges, OTC and Clearing

Joint consultation on the model for an uncertificated securities market
HKEX
The Securities and Futures Commission (SFC), Hong Kong Exchanges and Clearing Limited (HKEX) and the Federation of Share Registrars Limited (FSR) today jointly issued a consultation paper proposing a revised operational model for implementing an uncertificated securities market in Hong Kong Note.
bit.ly/2FTljkc

21st Annual Shorcan Charity Day Raised Over $720,000
TMX
Shorcan Brokers Limited (Shorcan), TMX Group’s fixed income interdealer broker, held its 21st Annual Charity Day on January 24, 2019, raising more than $720,000 in support of a range of Canadian charitable organizations. Each year, Shorcan donates revenue from the trading day to a variety of designated charities, resulting in a total of $9.9M raised since the inaugural event in 1999.
bit.ly/2FSW0yC

Adjustment of Eurex’s Contract Specifications
Eurex
The Management Board of Eurex Deutschland took the decision to adjust the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland (Contract Specifications) to reflect the respective changes of the Clearing Conditions of Eurex Clearing AG, as published in Eurex Clearing circulars 102/18, 112/18 and 001/19. In particular, these changes are as follows:
bit.ly/2FUlfkl

Fixed Income Futures: Introduction of a Liquidity Provider Scheme for Mid-Term Euro-BTP Futures (FBTM)
Eurex
Effective 1 February 2019, the Management Board of Eurex Deutschland and the Executive Board of Eurex Frankfurt AG decided the following:
bit.ly/2FUxAVr

Turning disruptions into opportunities: the fintech trends 2019
Eurex
New technologies such as artificial intelligence, machine learning and blockchain are changing the financial industry. What will we see in 2019? Which new trends will come up and which will even intensify? We have compiled the most important technology trends that experts expect to disrupt, shift and change the way we do business.
bit.ly/2FTAw4K

London Stock Exchange Group CEO Gives Keynote Address At World Federation Of Exchanges London New Year Reception
Mondovisione
David Schwimmer, Chief Executive Officer, London Stock Exchange Group (LSEG), gave one of the keynote speeches at the World Federation of Exchanges (WFE) London New Year reception on Monday, 21 January.
bit.ly/2FSOYdt

Fintech

DriveWealth Expands Partnership with Stake to Bring Commission-Free Trading in U.S. Equities to South America; Successful DriveWealth/Stake Relationship to Expand from Australia to South America
DriveWealth, LLC
DriveWealth, LLC, a leader in global digital trading technology, today announced the expansion of its partnership with Stake, the first non-U.S. company to offer commission-free trading in U.S. stocks, Exchange-Traded Funds (ETFs) and American Depositary Receipts (ADRs). The DriveWealth platform is fueling the new offering, giving South American users their first zero-commission digital access to the U.S. equity markets, beginning in Brazil in early March.
/prn.to/2FTFfn5

Accelerating Opportunities in Market Infrastructure Technology
Peter Lenardos – Cinnober
Two weeks have passed since we announced that Nasdaq’s acquisition of Cinnober Financial Technology is complete and Cinnober is joining forces with Nasdaq’s Market Technology business. We truly believe that our clients will benefit from an even stronger technology partner that is forming out of deep technological know-how, the vast intellectual capital of our people and a drive to shape tomorrow’s markets both with the promise of leveraging new technologies and the commitment to improve the effectiveness and efficiency of what we offer today.
bit.ly/2FTXmsT

Cryptocurrencies

Bitcoin Price Drops to Lowest in Month as 2019 Fall Continues
Eddie van der Walt – Bloomberg
Bitcoin’s painful 2018 crash continues, with the original cryptocurrency touching the lowest in more than a month on Monday.
Falling as much as 5.2 percent since the weekend, the largest digital asset in the space dragged the Bloomberg Galaxy Crypto Index to its worst decline in more than two weeks. Ether and Bitcoin Cash both fell more than 10 percent.
/bloom.bg/2MBRYeH

Iran inches closer to unveiling state-backed cryptocurrency
Maziar Motamedi – Aljazeera
Islamic Republic’s embrace of virtual currency could provide workaround as its economy takes a hit from US sanctions. Shut out of the global financial system, Iran is inching closer to a workaround to US sanctions with the possible unveiling of its first state-backed cryptocurrency in the near future.The virtual currency is anticipated to be announced at the annual two-day Electronic Banking and Payment Systems conference, which kicks off on January 29 in the capital, Tehran. The theme of this year’s gathering is “blockchain revolution”.
bit.ly/2MCf058

Love Crypto But Not Its Volatility? Meet Stablecoins
Matt Leising – Bloomberg
One of the biggest hurdles facing digital currencies is their extreme volatility. Bitcoin traded near $20,000 in December 2017 only to plummet to around $6,000 two months later — a range of price swings that makes Bitcoin nearly unusable for business owners or consumers. For some, the answer is a stable cryptocurrency, or stablecoin. While the idea isn’t entirely new and the best-known example, Tether, has been trading since 2015, a host of new stablecoins hit the market last year.
/bloom.bg/2G9IYvU

Are ICO Tokens Securities? Startup Wants a Judge to Decide; Kik Interactive plans to fight an expected SEC enforcement action over a 2017 initial coin offering
Paul Vigna and Dave Michaels – WSJ
A Canadian social-media startup is gearing up to challenge Washington’s ability to regulate the fledgling cryptocurrency industry.
/on.wsj.com/2G5ACWr

Chat App Kik Says It Will Fight SEC Over Possible ICO Action
Yogita Khatri – Coindesk
Canada-based messaging app company Kik is planning to fight a likely U.S. Securities and Exchange Commission (SEC) enforcement action over its 2017 initial coin offering (ICO).
bit.ly/2FU2mxW

Bitcoin’s Proof-of-Work Algorithm Needs Replacing, Argues BIS Study
Yogita Khatri – Coindesk
The proof-of-work (PoW) algorithm used by bitcoin and some other cryptocurrencies is not viable in the long-term and needs to be replaced, argues a new study from the Bank of International Settlements (BIS).
bit.ly/2FU3qlq

Two Groups Account for $1 Billion in Cryptocurrency Hacks, New Report Says
Paul Vigna – WSJ
Two groups of highly sophisticated cyber criminals likely have stolen some $1 billion in cryptocurrency hacks, a sum that accounts for the majority of the money lost in such scams, according to a new report from Chainalysis. Moreover, the two entities probably are still active, said Philip Gradwell, the chief economist at Chainalysis, a maker of software that tracks cryptocurrency transactions.
/on.wsj.com/2MDXeOJ

CEO of Van Eck Associates: Demand for Bitcoin is Moving to Gold
Celeste Skinner – Finance Magnates
The cryptocurrency bear market is forcing investors to look elsewhere, even back to traditional commodities. Over the past couple of weeks, Bitcoin has not been able to rise above $4,000. Because of this, demand for the digital asset, which was once drawing people away from traditional investments such as gold, is waning and attention is moving elsewhere.
bit.ly/2DDGQel

Cryptos Would Only Have Value in ‘Dystopian’ Economy: JPMorgan
Yogita Khatri – Coindesk
Investment bank JPMorgan Chase has said that cryptocurrencies would only have value in a dystopian economy.
bit.ly/2FTJHSK

Stories from Alternative Crypto Sources

Bitcoin [BTC]: ATMs can now be used to purchase cryptocurrency via debit card in New York
Jibin M George – AMB Crypto
bit.ly/2sPmMPQ

Billionaire Mike Novogratz Raising $250M Should Reassure Crypto Investors, Even in the Bear Market
Joseph Young – CCN
bit.ly/2FUIvyC

Venezuela Gives Maduro the Boot, Will This be the End of His Petro Cryptocurrency?
Tedra DeSue – CCN
bit.ly/2RXAkrB

Politics

As Warren Eyes White House, Big Banks Brace for Browbeating; Wall Street wary of Democratic senator’s antiregulatory platform taking center stage in presidential primary
Andrew Ackerman and Reid J. Epstein – WSJ
Elizabeth Warren’s presidential bid will be driven by her populist assault on big banks that rose to prominence during the financial crisis and in her successful 2012 Massachusetts Senate race.
/on.wsj.com/2FTYop2

Soros Warns China Uses Algos to Find Threats to One-Party Rule
Saijel Kishan , Katherine Burton , and Melissa Karsh – Bloomberg
Criticizes President Xi Jinping as danger to democracies; Billionaire also blasts Russia and technology companies
Billionaire George Soros warned of the “mortal danger” of China’s use of artificial intelligence to repress its citizens under the leadership of Xi Jinping, whom he called the most dangerous opponent of democracies.
/bloom.bg/2FSf6oI

Majority of Americans Think U.S. on Wrong Track, Poll Shows
Ros Krasny – Bloomberg
Those seeing U.S. in wrong direction highest of Trump’s term; President’s approval rating holds steady at 43%: NBC/WSJ
A sizable majority of Americans say the U.S. is headed in the wrong direction under President Donald Trump, according to an NBC News/Wall Street Journal poll taken before the 35-day partial government shutdown ended on Friday.
/bloom.bg/2G2jr7U

Trump Lifts Rusal, En+ Sanctions as Glencore Shuffles Stake
Saleha Mohsin – Bloomberg
U.S. Treasury also removes restrictions on En+, EuroSibEnergo; Aluminum drops in London as curbs lifted, Rusal shares advance
The U.S. Treasury Department lifted sanctions on three firms tied to Russian tycoon Oleg Deripaska, including United Co. Rusal, a move that will provide relief to the global aluminum market. The metal fell in London.
/bloom.bg/2G4i2hh

Trump Ditches ‘How’s Your 401(k)?’ for ‘Crime Will Fall!’ Slogan
Toluse Olorunnipa – Bloomberg
President shifted message to border as stock market faltered; Promised gains from 2017 tax overhaul haven’t materialized
President Donald Trump has largely dropped “one of the great campaign lines” from his repertoire in recent months as a turbulent stock market made wild swings: “How’s your 401(k) doing?”
/bloom.bg/2FTrzsc

Kamala Harris’ complicated history with Wall Street will come under scrutiny in the 2020 race
Carmin Chappell – CNBC
Sen. Kamala Harris’ history with Wall Street and the banking industry is about to come under scrutiny in a big way as the California Democrat joins what is expected to be large group of candidates seeking to topple President Donald Trump in 2020.
/cnb.cx/2FSowk4

Washington lobbying business surges to eight-year high
Fredreka Schouten – CNN
Lobbying activity in Washington surged to $3.4 billion last year — its highest level since 2010 — as companies, trade groups and other interests raced to shape policies on international trade, drug prices and other issues during President Donald Trump’s second year in office, a new tally shows.
/cnn.it/2FX17ho

Michael Bloomberg Roasts Trump As ‘Pretend CEO,’ Likens Presidency To Horror Film
Amy Russo – Huffington Post
Ahead of news that the partial government shutdown had ended, Michael Bloomberg made a round of speeches mocking President Donald Trump as a competence-free “pretend CEO,” comparing his tenure to a scary movie.
bit.ly/2FUtuwN

Regulation

LIBOR transition and contractual fallbacks
UK FCA
Speech by Edwin Schooling Latter, Director of Markets and Wholesale Policy at the FCA, delivered at the International Swaps and Derivatives Association (ISDA) Annual Legal Forum.
bit.ly/2FUGRwG

The FCA and Practitioner Panel launch joint survey for 2019
UK FCA
The FCA and Practitioner Panel (link is external) joint survey is sent annually to a sample of the firms that we regulate. It gives firms the opportunity to provide feedback to the FCA on how we regulate the industry.
bit.ly/2FUHbvo

SEC Investigates Nissan Over Carlos Ghosn’s Pay Disclosures; Nissan said it was cooperating Sean McLain – WSJ
The U.S. Securities and Exchange Commission is investigating Nissan Motor Co. NSANY 2.72% in connection with former Chairman Carlos Ghosn’s pay disclosures, requesting documents from both the car maker and Mr. Ghosn, according to people familiar with the matter.
/on.wsj.com/2FVVU9q

Poland’s Ex-Bank Regulator Freed After Two Months in Detention
Marek Strzelecki – Bloomberg
Marek Chrzanowski, the former head of Poland’s financial-industry regulator, was released from detention Saturday two months after his arrest on corruption charges.
/bloom.bg/2FQvUwt

Investing and Trading

Harvard study questions benefits of fund manager diversity; Findings surprise fund industry execs who champion women and ethnic minorities
Chris Flood – FT
Investment companies that have a high level of female or ethnic minority ownership do not deliver significantly different returns from non-diverse competitors, says a new report.
/on.ft.com/2FVVC2k

The next big test of Wall Street’s debt machine; Financing of $6.9bn takeover of Dun & Bradstreet is a gauge of investor demand
Eric Platt – FT
A company known for producing millions of reports on companies will next week offer Wall Street another vital piece of information: a check on investors’ appetite for the riskiest kinds of debt.
/on.ft.com/2FTXDMI

Powell on the Spot After Fed’s Monetary Messages Whipsaw Market
Craig Torres and Rich Miller – Bloomberg
Slowing global growth, shutdown have eased urgency to tighten; Investors tuned to what Fed chief will say on balance sheet
Federal Reserve Chairman Jerome Powell has some further explaining to do after the central bank’s monetary messages whipsawed financial markets over the last month.
/bloom.bg/2FTCpOX

U.S. Treasury Set to Borrow $1 Trillion for a Second Year to Finance the Deficit
Liz McCormick , Saleha Mohsin and Alexandre Tanzi – Bloomberg
The U.S. Treasury Department is set to maintain elevated sales of long-term debt to finance the government’s widening budget deficit, with new issuance projected to top $1 trillion for a second-straight year.
/bloom.bg/2FPMagY

‘Responsible’ fund managers must do better to impress millennials; On the evidence available, ESG investing will not slow climate change or take plastic out of the oceans
Pauline Skypala – FT
The reported preference of millennials and generation Z for sustainable investment comes as no surprise. Born between 1980 and 2010, these people are inheriting a world of biodiversity loss, climate change and plastic infestation.
/on.ft.com/2FSfYtr

Diminishing returns: hedge funds look to keep it in the family; Lower income and higher costs are forcing some funds to close, but others are shunning outsiders to look after their own money
Robin Wigglesworth, Lindsay Fortado and Laurence Fletcher – FT
When the financial storm clouds started to darken in 2007, John Paulson, a little-known hedge fund manager who had been prescient enough to stock up on the equivalent of umbrellas, racked up one of the biggest hauls in investing history.
/on.ft.com/2FXz4P5

Corporate Debt Binge Reaches a Firm That Once Employed Lincoln
By Davide Scigliuzzo – Bloomberg
Dun & Bradstreet seeks to raise $4 billion for its buyout; Costs cuts and leverage in focus as debt load set to treble
One of the original credit raters is now undergoing some thorough credit analysis of its own.
/bloom.bg/2FUGFgZ

Institutions

JPMorgan makes late push to become ETF heavyweight; New York lender raises fund sales tenfold, outpacing State Street and Invesco
Chris Flood – FT
JPMorgan’s bid to join the top tier of exchange traded fund managers was boosted last year as the New York-listed group increased sales tenfold.
/on.ft.com/2FPFiAc

HSBC promotes internal candidate to lead global markets division; Georges Elhedery to relocate to head bank unit that includes equities and fixed income
David Crow – FT
HSBC has appointed an internal candidate to lead its markets division as it seeks to bolster the unit following the sudden departure of the previous executive in charge.
/on.ft.com/2FSPmbV

Here’s What Goldman Conference Attendees Think Markets Will Do
Joanna Ossinger – Bloomberg
Equities seen as best performer this year, rising 5%-10%; Asia ex-Japan region, technology industry may be winners
Equities were chosen to be the best global asset class this year, followed by emerging-market credit and cash, according to a survey of attendees at a Goldman Sachs Group Inc. conference last week in Hong Kong.
/bloom.bg/2G4fdN7

JPMorgan Says Stocks, Credit Still Haven’t Priced Fed Pivot
Chris Anstey – Bloomberg
Stocks, corporate debt have some upside room yet: strategists; Money markets by contrast front-loaded a Fed pause: JPMorgan
While U.S. stocks and corporate debt have rallied from their December lows, there’s scope for further gains from an official Federal Reserve confirmation that it’s pivoting away from monetary tightening for now, according to JPMorgan Chase & Co.
/bloom.bg/2G6SdNp

Bridgewater, RenTech Make $13 Billion in a Grim Year for Hedge Funds
Nishant Kumar – Bloomberg
Ray Dalio’s Bridgewater Associates and Jim Simons’ Renaissance Technologies beat their rivals in a tough year for hedge funds in 2018, making a combined $13 billion for their investors.
/bloom.bg/2G9I5U6

An Ex-Nomura Trader Starts Hedge Fund at Tencent-Backed Firm
Narae Kim – Bloomberg
Desmond How’s long-short fund to focus on EM corporate debt; How joined GaoTeng Global in 2017 as head of fixed income
An ex-Nomura Holdings Inc. trader has started a hedge fund focused on emerging-market corporate bonds at a money manager backed by Tencent Holdings Ltd.
/bloom.bg/2FTJDCz

Regions

Europe’s Sputtering Economy Gives Investors the Jitters; As political struggles weigh on the region’s economy, many investors are jumping ship
Ira Iosebashvili – WSJ
Investors are backing away from European assets, as worries over slowing growth and political uncertainty push the European Central Bank to rethink plans to tighten monetary policy this year.
/on.wsj.com/2FUBoWW

Soy Prices Are in a Trough After China’s Sick-Pig Slaughter; The country is culling hogs in hopes of stopping the spread of a virus, which is bad news for U.S. soybean farmers
Lucy Craymer – WSJ
China’s pig population is shrinking, and that’s bad news for American soybean farmers. The country is the world’s largest importer of soybeans, which are mostly crushed to produce oil and soybean mealóa high-protein feed for livestock, including pigs, cattle and even fish. China’s 400 million-plus hogs are the biggest consumer of the lot.
/on.wsj.com/2FTz5mS

S&P Global Gets Approval for China Local Rating Business
Lianting Tu – Bloomberg
Chinese regulators have allowed S&P Global Ratings’ Beijing-based wholly owned unit to conduct credit rating business on the mainland, according to a statement from the People’s Bank of China.
/bloom.bg/2FTRn7p

Juan GuaidÛ urges UK to safeguard Venezuela’s gold; Bank of England is refusing to hand over $1.2bn in bullion to Maduro
Gideon Long – FT
The leader of Venezuela’s opposition has written to Theresa May and Bank of England governor Mark Carney urging them not to send $1.2bn from any sale of Venezuelan gold reserves to “the illegitimate and kleptocratic regime” of President Nicol·s Maduro.
/on.ft.com/2FPNuQY

China Is the Climate-Change Battleground; The U.S. and other developed nations must pitch in and help clean up the world’s dirtiest economy.
By Noah Smith – Bloomberg
Climate change is a menace. The Intergovernmental Panel on Climate Change just issued a report showing how serious the situation is. If warming continues on its current trajectory, the report warns, then by the end of this century average temperatures will be 4 degrees Celsius (7.2 degrees Fahrenheit) higher than at the start of the Industrial Revolution.
/bloom.bg/2FSpj4w

Brexit

How will the EU respond to a request to delay Brexit?; Diplomats see refusal as almost inconceivable but there will be terms and conditions
Alex Barker – FT
During past crises, EU leaders have turned playing the clock and deferring decisions into something resembling performance art. Brexit is likely to prove no exception.
/on.ft.com/2FVUtry

U.K. Could Avoid $1.5 Billion EU Tax Bill on No-Deal Brexit
Stephanie Bodoni – Bloomberg
Crashing out raises questions over EU investigations of U.K.; EU courts could cease to be main appeals forum from March 30
A no-deal Brexit could create yet another headache for the European Union as it prepares to hand dozens of U.K.-based companies a tax bill that is expected to top $1.5 billion.
/bloom.bg/2G5l7xr

Wallenberg Family Fortune Feels the Sting of Brexit, Trump
Hanna Hoikkala – Bloomberg
Firms owned are adjusting supply chains, building inventory; Political uncertainty is upending corporate efforts to plan
The holding company that manages about $37 billion in assets for Sweden’s Wallenberg family says political risk stemming from trade wars and Brexit could have serious repercussions for a number of its investments.
/bloom.bg/2G6Xe8P

Now Banks Look Like They’re Worried About Brexit; Lenders have moved business out of London for two quarters in a row.
Mark Whitehouse – Bloomberg
The exodus from London is getting real. Ever since the U.K. voted to leave the European Union in June 2016, people have been watching for signs of how the prospect might affect London’s role as a global financial center. It stood to reason that it should: Assuming the breakup meant that the U.K. units of global banks would lose their passports to sell services throughout the EU, they would have to move staff and assets onto the continent — to Paris, to Frankfurt, to Dublin.
/bloom.bg/2FW19WE

‘Get a grip on Brexit’, businesses tell UK’s quarrelling politicians
Guy Faulconbridge – Reuters
British businesses implored politicians on Monday to stop quarrelling over Brexit and agree an orderly exit from the European Union, as some big firms set up emergency situations rooms to cope with the possible tumult of a no-deal divorce.
/reut.rs/2FSgDuV

Miscellaneous

Florida metal hunters found a World War II-era grenade ó and brought it to a local Taco Bell
Alex Horton – The Washington Post
The magnet fishermen hauled up the catch of the day ó a few metal scraps mixed in with a World War II-era hand grenade ó and secured it in the trunk of a car. At this point, many people would call the police to report a potentially dangerous explosive weapon.
/wapo.st/2CRcqn8

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Food groups’ fight over wheat manipulation re-erupts

Get a FREE 90 day trial of John Lothian Newsletter First ReadHits & TakesJLN StaffThe CFTC Kraft/Mondelez Global announcement is not worth two bits. Claiming to win the case, without clarity of the specific actions that were manipulative,...

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