First Impressions

Back to Work
By John J. Lothian
I am back to work today. Today will be my first day back in the office after going under the knife for shoulder surgery. Of course, I will be taking tomorrow off, but that is only to get the stitches out.

Thank you for all the good wishes and prayers, not only for my surgery but also for the passing of my uncle, Thomas A. Lothian, II. They really helped me.

Thank you to my great team for working so hard in my absence and JLN coming out without a hitch. You are a great group and I could not be more proud of you.

Now, back to work!

Quote of the Day

“My famous (infamous?) ‘short of a lifetime’ trade on the German bund market was well-timed but not necessarily well-executed. Still, it was a prime example of opportunities hatched by the excess of global monetary policy.”

Bill Gross in his June investment outlook for Janus Capital Group Inc. from the story, “Gross Calls Bet Against Bund Well-Timed, Poorly Executed”.

Lead Stories

Gross Calls Bet Against Bund Well-Timed, Poorly Executed
By Charles Stein – Bloomberg
Bill Gross acknowledges doing a poor job of implementing his recommendation to bet against German government bonds.
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Dimon Chides ‘Lazy’ Shareholders Who Follow Proxy Advisers
By Hugh Son – Bloomberg
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon chided shareholders as “lazy” for casting votes at annual meetings based on the advice of proxy advisers that have questioned his pay and power.
“God knows how any of you can place your vote based on ISS or Glass Lewis,” Dimon, 59, said Wednesday at an investor conference in New York. “If you do that, you are just irresponsible, I’m sorry. And you probably aren’t a very good investor, either.”
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Wall Street Is Using the Power of Dodd-Frank Against Itself
By Adam Davidson – NY Times
Regulating Wall Street is an Old Testament sort of affair: Like Leviticus, it is all about the persnickety details. But politicians try to talk about it in New Testament terms, with sinners and saints, salvation and damnation. Only they can’t agree on who the sinners are — the bankers or the bureaucrats — and wherein lies salvation. Such moralizing, however, does very little to shine light on the benefits and drawbacks of the byzantine 2010 banking regulations known as Dodd-­Frank.
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Why Lehman Brothers lives on
By Edward Hadas – Reuters
The repercussions of Lehman Brothers’ bankruptcy can still be felt. It has been almost seven years since the U.S. broker’s failure sparked a global financial crisis and deep recession in most developed countries. Yet the real damage is only now becoming clear.
Larry Summers says this is the era of secular stagnation, by which the Harvard economist and former U.S. Treasury Secretary means a slowdown in the GDP growth rate in much of the world. His catch-all phrase captures something real, but his focus on real policy interest rates is painfully simplistic. GDP growth is not slower because monetary policy is wrong, but because the crisis revealed, caused or amplified many economic problems.
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EU officials dismiss Greek statement on aid agreement being drafted
By Lefteris Papadimas – Reuters
Greece’s government on Wednesday said it is starting to draft an agreement with creditors that would pave the way for aid, but European officials quickly dismissed that as wishful thinking.
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Bernanke: ‘I don’t see anything that’s extreme’ in US markets
By Christine Kim – Business Insider
Former Federal Reserve Chairman Ben Bernanke said on Wednesday there were no signs of extreme movements in the U.S. real estate and financial markets.
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First Taiwan Billionaire of 2015 Minted on Shanghai Stock Surge
By Jill Mao – Bloomberg
Hsung Yueling, chairman of Ningbo Techmation Co., became the first billionaire minted in Taiwan this year after the company surged to a record.
Hsung, who’s also known as Xiong Yulin, owns about 60 percent of Ningbo Techmation with his wife, Chou Shanshan, giving him a net worth of at least $1.1 billion, according to the Bloomberg Billionaires Index.
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Income inequality is not growing because of rising CEO pay
By Stephen Gandel – Fortune
A new study published by the National Bureau of Economic Research says that income equality is a result of a pay gap between firms.
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China Blows Its Debt Bubble Bigger
By William Pesek – Bloomberg View
There are plenty of reasons one could argue China isn’t on the verge of a debt crisis: The country has $3.7 trillion in currency reserves, a closed financial system and ambitious leaders who claim to be on the case. And doesn’t the biggest rally in Chinese stocks since 2008 count for anything?
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Opinion – Problem isn’t currency manipulation; it’s low savings
By Stephen S. Roach – MarketWatch
As the U.S. Congress grapples with the ever-contentious Trans-Pacific Partnership — President Barack Obama’s signature trade legislation — a major stumbling block looms.
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Central Banks

Grand Central – What We’ve Learned from Yellen and Fischer
By Jon Hilsenrath – WSJ
The Federal Reserve’s top two leaders – Chairwoman Janet Yellen and Vice Chairman Stanley Fischer – have spoken extensively in the past few days about the outlook for the economy and monetary policy.
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Bank of England Official Received Emails Relating to Libor Manipulation, Prosecutor Says
Dow Jones Business News – NASDAQ
A senior Bank of England official received emails that were part of an alleged campaign to rig benchmark interest rates, according to evidence presented in a London trial Wednesday.
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The Street’s Fed Blame Game
NASDAQ
When the economy and the stock market eventually flag, Wall Street has a convenient scapegoat at the ready: the Federal Reserve and its plan to raise interest rates.
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Fed’s Lacker says letting banks fail will restore market discipline
By Michael Flaherty – Reuters
Policymakers must ensure that financial industry creditors do not expect government bailouts and must be willing to let firms fail in order to restore market discipline, a top Federal Reserve official said on Tuesday.
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Carney Plan to Cut BOE Decision Frequency Proposed to Parliament
By Jill Ward – Bloomberg
Mark Carney’s plans to move the Bank of England to a Federal Reserve-style decision schedule received the backing of Prime Minister David Cameron, who proposed a law enshrining the changes on Wednesday.
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Currencies

Nasdaq to step up blockchain trials
By Philip Stafford and Nicole Bullock in New York, FT.com
Nasdaq, the US exchanges operator, this year plans to increase the number of trials with the decentralised network that underpins bitcoin. The New York group expects to debut three or four trials of the ledger in trade processing in the next 12 months, in a move that Bob Greifeld, the group’s chief executive, hopes could radically reshape some of the US’s sometimes cumbersome and slow-moving market plumbing.
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Samourai Wallet – A Serious Darkwallet Contender
By Jamie Redman – CoinTelegraph
A new anonymous Bitcoin wallet has entered the crypto universe. It’s called Samourai wallet, and its main focus is security and privacy. The developers of the wallet, who have been in the digital currency environment since its inception, call themselves the “samourais.” Their idea is to create a wallet with many never-before-seen features, and to make it the mobile counterpart to Darkwallet.
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Indexes & Index Products

Invesco PowerShares and FTSE Russell Expand Smart Beta Relationship with Complete Pure Style Portfolios
PR Newswire
The PowerShares Russell Pure Style Portfolios include six ETFs that can be used as tactical tools to tilt an existing style allocation according to market dynamics. Unlike traditional style indexes that weight constituents based upon market capitalization, the Russell Pure Style Index methodology weights constituents based upon their relative style characteristics, delivering enhanced style precision and eliminating the overlap between growth and value stocks that is inherent in traditional methodology.
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Deutsche Börse welcomes Van Eck Global as new ETF issuer ETFs based on global companies in the gold mining industry
Press Release
Two exchange-listed index funds from the new issuer Van Eck Global are tradable on Xetra and Börse Frankfurt from Wednesday for the first time. Investors can choose between two Market Vectors ETFs that enable access to global gold mining companies.
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MSCI-Multi years before UAE, Qatar indices to be upgraded again
By Siddesh Suresh Mayenkar – Gulf News
A reclassification of the UAE and Qatar indices could be a multi-year process, that may take about 8-10 years depending on accessibility for foreign investors, Sebastien Lieblich, head of index research at MSCI told Gulf News.
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STOXX Changes Composition Of Benchmark Indices
Press Release
STOXX Limited, the market-moving provider of innovative, tradable and global index concepts, today announced the new composition of STOXX Benchmarks and their sub and sector indices, among them the STOXX Europe 600 Index, STOXX North America 600 Index and STOXX Asia/Pacific 600 Index.
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Gold

China sets up giant gold fund to expand its market power
By Laura He – MarketWatch
China has set up its largest gold-investment fund ever, expected to total 100 billion yuan ($16 billion), aiming to invest in mining projects in the region and enhance Chinese influence in global gold markets, local media reports said Wednesday.
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The End Game Continues – Austria Repatriates Gold
ETF Daily News
After increasing pressure from the Austrian people on the government and the central bank to increase the ratio of the gold effectively held in the Austrian Central Bank in Vienna, the central bank has finally made the decision to effectively do so.
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Gold smuggling at all-time high, seizures total Rs 1,000cr
By Deeptiman Tiwary – The Times of India
For the first time in the history of gold smuggling in India, the seizure in illicit trade has crossed Rs 1,000 crore mark in one financial year with customs, police and revenue agencies seizing more than 3,500 kg of gold in 2014-15. In 2012-13, the same figure stood at merely Rs 100 crore with just about 350 kg gold seized. In two years–since government increased duty on gold to 10% to rein in a yawning current account deficit—gold smuggling has grown by 900%.
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Strategies for building a ‘starter-kit’ gold mine
By James Wilson – Financial Times
Gold miners call it “the first pour” — the moment when liquid gold, the initial ounces recovered from tonnes of crushed and chemically treated rock, is carefully channelled into a mould. An ingot of precious metal is formed; the assembled workforce cheers; and a miner’s arduous life once more seems worthwhile.
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Miscellaneous

Self-Taught Investor Beating Peers With Lesson From Lynch
By Charles Stein – Bloomberg
Finny Kuruvilla has a master’s from Massachusetts Institute of Technology and a doctorate and medical degree from Harvard University.
In his spare time, he taught himself how to invest. Turns out he’s pretty good at it.
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US economic recovery masks tale of many cities
By Sam Fleming and Demetri Sevastopulo – Financial Times
Nearly half of the biggest US metropolitan areas have yet to recoup all the lost jobs from the Great Recession and almost a third have failed to return to previous levels of output, according to analysis that underscores the fragmenting urban fortunes beneath the surface of America’s recovery.
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