First Impressions

A Leg To Stand On: Power To Help
Rich Hansen

To all that care:
Power. The power to hurt, the power to ignore, the power to help. It comes in so many forms and is used in so many ways. Many people don’t even consider how much power they have in most given situations. And, of those people who do, very often they make the choice to use their power to ignore what is happening by not getting involved, by not lending a hand – even when it takes very little effort.

We can often think of those we see with their hand out as being someone deserving of their state, someone who has created their own fate, whether or not that be true. But what if that person was a child holding out a cup, with their one and only hand and asked you for help. It’s obviously no fault of their own – you know that.

Now. You have the power to help. Would you give a dollar, ten dollars, fifty, five hundred? Now think for a moment, you know these children are out there. Do you really need to be standing in front of them to help, to use your power?

ALTSO is a non-profit organization that has provided free prosthetic limbs and corrective surgery to more than 13,500 children in developing countries who lost their limbs in traumatic accidents or suffer from congenital limb disabilities.

There are so many of us with lists and lists of LinkedIn contacts, Facebook friends, Twitter accounts, et al. Will you donate? Will you help to do some real good and forward this to all? We ask for referrals all the time, do we not? Isn’t this a more noble endeavor? Come support us.
The New York event is at Capitale, 130 Bowery, New York on Thursday October 15th, 7 PM to Midnight. Tax deductible tickets cost $275 Click here to register

The Chicago event is at City Winery Chicago, 1200 West Randolph on Thursday Oct 22nd, 6 PM to 11 PM. Tax deductible tickets cost $200 Click here to register
Can’t make it? For a donation of any size go to:

And to give you some idea how amazingly far your donations go:
$25 – provides clubfoot brace, $100 – provides leg braces, $250 – provides prosthetic limb, $500 provides corrective surgery. We treated almost 2000 children last year. How many will we help this year? Take a moment and help. Don’t wait until later. You have the power. Use it wisely.
Rich Hansen can be reached at

Quote of the Day

“Anything positive is relatively good. Treasuries, by the process of elimination, have been the winner.”

Marc Fovinci, head of fixed income at Ferguson Wellman Capital Management Inc, in the story, “Treasuries Escape Shadow of Fed Liftoff to Eclipse Other Assets”

Lead Stories

Strategists’ Outlook – Uncertainties around China, Fed tightening prospects create an inflection point – GMO Q4
Russell Investments
Russell Investments’ global team of investment strategists today released the 2015 Global Market Outlook – Q4 Update, offering a summary of the economic insights and market forecasts that help to guide the firm’s multi-asset portfolios and services. The outlook is dominated by uncertainties around China and the prospect of U.S. Federal Reserve tightening, and the strategists describe the markets as ‘struggling to find direction” to underscore the importance of separating ‘market noise from signal’. Volatility reached its highest level in four years in August when the Volatility Index (VIX) spiked to 40 as markets around the world pulled back, including 10% in the U.S., and around 15% in the U.K., Europe, Australia and Japan. However, the U.S. economy is viewed as robust and the strategists do not believe China will derail the global economy.

With Consumer Lenders Under Regulatory Glare, Big Banks Tighten Purse Strings
Peter Eavis – NY Times
Consumer lending firms that focus on borrowers with weak credit have done surprisingly well in the last few years. Many survived the financial crisis of 2008, the Great Recession, and even went on to post strong profits in the face of an onslaught of new regulations. Now, though, these lenders face pressure from an unlikely source: the big Wall Street banks that have long provided the financial underpinnings for their operations.

The credit bubble, the bears and the central bankers
Gillian Tett – Financial Times
When officials at the International Monetary Fund and World Bank first decided to hold this year’s annual meeting in Peru, some hoped that the location would offer a celebratory backdrop.
For after the 2008 western financial crisis, it initially seemed as if emerging markets — including those in Latin America — had seized the baton of global growth. After all, they were not involved in the craziness of the credit bubble that led up to the crisis, with all its subprime mortgage sins.

Treasuries Escape Shadow of Fed Liftoff to Eclipse Other Assets
Daniel Kruger – Bloomberg
With the specter of a Federal Reserve interest-rate increase looming over global financial markets all year, the asset class most susceptible to rising rates — Treasuries — has topped other U.S. investments through the first three quarters of 2015.
The slow economic growth and financial-market volatility that have caused the Fed to delay liftoff have benefited U.S. government bonds as other asset classes stumbled. With plunging commodity prices pushing inflation expectations to the lowest since 2009, Treasuries have been a haven as global equities slumped and bond yields in Germany and Japan touched all-time lows.

Global investors brace for China crash, says IIF
Heather Stewart – The Guardian
Global investors will suck capital out of emerging economies this year for the first time since 1988, as they brace themselves for a Chinese crash, according to the Institute of International Finance.
Capital flooded into promising emerging economies in the years that followed the global financial crisis of 2008-09, as investors bet that rapid expansion in countries such as Turkey and Brazil could help to offset stodgy growth in the debt-burdened US, Europe and Japan.

We Just Got the Perfect Snapshot of the Global Economy
Joe Weisenthal – Bloomberg
If you want to understand what’s happening with the global economy right now, then all you need to do is look at some of the data that came out in the last 24 hours.
As it stands, there are two, big opposing trends in the world economy. The first is that much of the world, particularly China and the emerging markets, is currently in slowdown mode. The other is that the U.S. domestic economy, particularly the consumer, is a beast.

1,129 Days Later… Bank Deal Approved
Rachel Louise Ensign – WSJ
Exactly 1,129 days after M&T Bank Corp. announced plans to buy Hudson City Bancorp Inc., the Federal Reserve blessed the deal.
The U.S. banking regulator approved the merger of the two banks Wednesday, clearing the biggest hurdle for a tie-up that was initially valued at $3.7 billion but has since swelled in value due to a rise in M&T’s stock.
It is the longest delay ever for a U.S. deal valued at more than $1 billion, according to Dealogic, a three-year wait that chilled other banks’ appetite for deal making even as it boomed elsewhere.

JPMorgan prevails in $8.6 bln Lehman lawsuit
A federal judge ruled in favor of JPMorgan Chase & Co in an $8.6 billion lawsuit brought on behalf of Lehman Brothers Holdings Inc creditors.

Fears of a Chinese ‘hard landing’ trigger mass exodus from emerging markets
Peter Spence – The Telegraph
Investors are on track to pull $541bn (£357bn) out of emerging markets this year, as fears that China is headed for a ‘hard landing’ have prompted the greatest flight for safety since 1988.

Ex-Deutsche Bank Trader Accuses FCA of ‘Shaming But Not Naming’
Suzi Ring – Bloomberg
The U.K. Financial Conduct Authority has an approach of “shaming but not naming” traders in penalty notices against banks, denying them the opportunity to rebut allegations about their behavior, a lawyer for an ex-Deutsche Bank AG trader told a London court.

Deutsche Bank could be forced into riskier lending
Tim Wallace – The Telegraph
Deutsche Bank’s new chief executive must slash costs quickly or he could be forced to either push into riskier loans or to disappoint investors with low returns indefinitely, analysts have warned.

Effort to Force Vote on Ex-Im Bank Reauthorization Gains Some GOP Support
Nick Timiraos and Kristina Peterson – WSJ
A vote to reauthorize the Export-Import Bank by using a rarely successful procedure has gained support from House Republicans, an important step that marks a rebuke to party leaders who allowed the bank to close this summer.
Several Republicans said Thursday they expected to have enough support for a discharge petition that would successfully bring the bill up for a vote, despite the poor historical record of the legislative procedure.

How Your Bank Is Rapidly Adapting to Millennial Banking Habits
Stefanie O’Connell – GOBankingRates
Millennials are notoriously skeptical of traditional institutions, and big banks are no exception. According to a study by Viacom Media, 71 percent of millennials said they would rather visit the dentist than hear what banks have to say. The study went on to find that the four biggest U.S. bank brands — JP Morgan, Wells Fargo, Bank of America and Citigroup — are the least loved by millennials.

The Future Belongs to Peer-To-Peer Money Transfer Services
Finance Magnates
Today, when cash moves much faster and electronic money transfers are routinely used by millions, an invisible war is wagered by traditional service providers and innovative peer-to-peer operators. The latter are fighting an uphill battle to unseat the current elite, while banks and money transfer giants such as MoneyGram and Western Union are clinging to their dominant position. They’ve got the numbers, the expertise and the political support, but nothing can indefinitely stop the advancements of technology.

No Green Shoots For Greek Banks
Paul J. Davies – WSJ
Greek stock markets have been no rose garden for investors this year with the banks having the roughest ride.
As a recapitalization looms, existing investors face wipeout no matter what the European-led assessment of the banks’ books throws up this month.
Yet, there is hope that private money will play some part with bank executives either leading pitches to potential new investors or trying to sell assets that others might buy.

Central Banks

Thrills and spills: America is at the center of a global monetary disorder
The Economist
John Maynard Keynes observed that in the late 19th century London’s influence on the global financial system was such that the Bank of England could be considered the world’s orchestra conductor. Today America is like the dominant rapper in an anarchic transnational collective. Some politicians reckon that the global monetary system is a source of American soft power. This article will argue that it is unstable and, if unreformed, poses a threat to American interests.

Questions About Leak at Federal Reserve Escalate to Insider-Trading Probe
Aruna Viswanatha, Kate Davidson, Brody Mullins and Christopher M. Matthews – WSJ
A high-profile investigation into a leak of sensitive information from the Federal Reserve in 2012 has escalated to an insider-trading probe led by a key market surveillance agency and federal prosecutors in Manhattan, according to people familiar with the matter.

Global finance: Why some emerging-market leaders say they want the Fed to hike
The Economist
Scarcely is one Federal Reserve meeting over before the doves and hawks start circling again. The hawks, who hope for a rate increase, had some unlikely companions in their flock in the run-up to the September meeting: central bankers from India, Indonesia, Mexico and Peru. These emerging-market policymakers have said that since everyone is expecting a hike by the end of this year, it would be better to get it over and done with sooner (October) rather than later (December).

Atlanta Fed slashes third quarter view on U.S. economic growth
The U.S. economy is on track to grow 0.9 percent in the third quarter after a bigger-than-expected widening of the trade gap for goods in August, the Atlanta Federal Reserve’s GDPNow forecast model showed on Thursday.

Fed Is Introducing Valuation Distortion, Monetary Policy Adjusted PE Ratio Offered to Investors
Press Release – PRNewswire
P/E for market valuation is affected by interest rates, inflation, and U.S. Dollar. Has the Fed distorted markets valuation? The Wall Street Challenger, LLC introduces the Monetary-Adjusted Price-Earnings ratio (MAPE); it improves Shiller’s CAPE accuracy in signaling market tops or bottoms as a result of expected monetary policy effects.

ECB’s Jazbec says no need to change quantitative easing
The European Central Bank’s money printing program is working and there is no need to change it now, ECB Governing Council member Bostjan Jazbec said on Thursday.

More Stimulus Is Likely From Bank of Japan, Says Ex-Deputy Governor Iwata
Toru Fujioka and Masahiro Hidaka – Bloomberg
The Bank of Japan probably will need to add stimulus as there is nothing driving inflation amid emerging signs that the economy has slipped back into recession, according to a former deputy governor.


Currencies Trading Needs Further Cleanup, Regulators Say
Chiara Albanese – WSJ
Banks need to go further in their efforts to clean up currencies trading after a manipulation scandal, according to global regulators.
The Basel-based Financial Stability Board, which coordinates global financial regulatory efforts, has been working to overhaul the $5.3 trillion a day market since 2014, when a long-running probe into whether currency traders tried to manipulate markets led to some of the banks involved paying billions in fines.

Heads Dollar Wins, Tails It Rises: It’s All Good for Greenback
Liz McCormick – Bloomberg
U.S. economic strength is a boon for the dollar, and evidence of weakness may not prove much of an obstacle. The rally in the greenback is set to stay on course in either scenario, say strategists at Credit Suisse Group AG.
The dollar has gained against major peers since Sept. 17, when the Federal Reserve kept its target rate near zero. For a hint at the currency’s path forward, traders are fixated on Friday’s release of September U.S. jobs figures.

FX Volumes Decline During September at Both HotspotFX and FastMatch
Ron Finberg – Finance Magnates
With October arriving, the latest monthly volume reports of trading venues and brokers for September are also becoming available. Among FX ECNs, September trading for both HostpotFX and FastMatch is now available.

Foreign-Exchange Broker FXCM Says Hacker Accessed Customer Accounts
Chiara Albanese and Ezequiel Minaya – WSJ
Foreign-exchange broker FXCM Inc. informed clients Thursday of a cybersecurity breach in its systems that led to a “small number” of unauthorized wire transfers from customers’ accounts.
The New York-based broker said all funds have been returned and an internal investigation has been launched with the aid of a cybersecurity firm, along with a separate Federal Bureau of Investigation probe.

FXStreet launches currencies signal-based news feed
Automated Trader
FXStreet has launched Algo Rythms, a signal-based news feed for more than 30 currency pairs, developed in collaboration with FinTech start-up Qubitia Solutions.
Working to CMT guidelines, FXStreet has composed around 100 intricate market scenario signals and applied them over 30 currency pairs. That represents a total of 3000 strategies running at the same time. When a specific technical set-up is found, a signal is created and backtested to enable each alert to hit the right note at the right time.

Orca SMT FX Trade Execution Interface Enters Beta Phase
Profit & Loss
Orca SMT, the new FX pricing, execution and management interface designed for use by foreign exchange salespeople, has announced its beta launch. Orca SMT provides salespeople at institutional FX dealing desks with client-specific historical trade information, core liquidity and margin potential within a single application. This enables them to provide quotes with better information at the point of trade, resulting in more optimised and accurate prices for their FX clients, the firm claims.

Indexes & Index Products

BATS Will Offer to Pay Companies to List ETFs on Exchange
Bradley Hope and Leslie Josephs – WSJ
BATS Global Markets Inc. is going to new lengths to grab more of the market for exchange-traded funds, offering to pay companies rather than charge them to list the popular investment products on its exchange.

Dumb Investor Behavior Negates Benefits Of ‘Smart Beta’
Chris Dieterich – Barron’s
Investing with souped-up indexes that seek to capture specific market attributes is all the rage.
Boat loads of academic research point to market anomalies that can be exploited by investing in “value” or “low volatility” stocks. These ideas are among the powerful engines driving so-called “smart” or “strategic” beta exchange-traded funds that have flooded the market in recent years.

A Record Number Of New ETF/ETP Providers Have Entered The US ETF Industry In 2015 According To ETFGI
Press Release
A record number of new ETF/ETP providers have entered the US ETF industry in 2015 according to ETFGI

S&P Dow Jones Indices Market Attributes: U.S. Index Dashboard
Press Release
S&P Dow Jones Indices Market Attributes: U.S. Index Dashboard (LINK)

J.P. Morgan Asset Management Expands ETF Strategic Beta Suite with US Equity ETF: JPUS
J.P. Morgan Asset Management announced that its newest ETF will begin trading today, the JPMorgan Diversified Return US Equity ETF (JPUS). JPUS is the fourth strategic beta ETF offered by J.P. Morgan, and seeks to provide US exposure with the potential for better risk-adjusted returns.

Nasdaq Announces Launch of 16 New Indexes Effective Thursday, October 15, 2015
Press Release – Nasdaq
Effective Thursday, October 15, 2015, Nasdaq will begin disseminating 16 new First North Indexes as an expansion of the existing First North Index Family on the Nasdaq Global Index Data ServiceSM (GIDS).

MSCI to keep Peru bourse in ’emerging market’ group for now
Index provider MSCI Inc opted on Wednesday to keep Peru’s bourse in its “emerging market” group but warned it might downgrade the stock exchange to a higher-risk “frontier” status in nine months if liquidity sinks further. MSCI’s decision to hold off on a reclassification will likely boost Peru’s select and general stock indices when trading reopens on Thursday.


South Africa’s Gold Miners Turn to Machines to Stay Afloat
Alexandra Wexler – WSJ
South Africa’s gold-mining companies are facing a question of life or death—and the answer is likely robots.
With more than half of the country’s gold mines currently unprofitable, companies are looking for ways to stay in business long enough to mine what is left of the world’s largest gold deposit. That means miners have to figure out how to dig up more gold less expensively from deeper underground than ever before.

Gold mining costs continue to come down
Peter Koven – Financial Post
Gold miners have managed to cut their costs significantly since prices started to freefall in 2013. And, fortunately, it appears that trend is not slowing down.

Newcrest Offloads Stake in Australian Gold Miner
Rhiannon Hoyle – WSJ
Newcrest Mining Ltd. has offloaded its stake in a rival Australian gold producer, mirroring moves by miners around the world to sell assets with the aim of cutting massive debts accumulated during a decadelong mining boom.

Fed delay has been great news for gold
Bob Bryan – Business Insider
Markets have been struggling every since the Federal Reserve’s decision not to raise the Federal funds interest rate, but there has been one winner: gold.
According to analysts at RBC Capital Markets, the recent jump in gold prices has been in part due to the decision by the FOMC not to raise rates.


Insights: Financial Capability—A Snapshot of Investor Households in America
Approximately 6 in 10 households in the United States own securities investments—typically through taxable accounts, IRAs or employer-sponsored retirement plans. However, this figure drops to a little over 3 in 10 if only taxable investments are considered. Households that own taxable accounts are more likely to be older, affluent, college educated and white relative to households with only retirement accounts or households without investment accounts. They also have much higher levels of financial literacy and moderately higher risk-tolerance levels. Certain demographic groups are significantly under-represented among investor households, including blacks and Hispanics—although these differences narrow after controlling for factors such as income, education and age.

Silver-coin shortage shows bright side of precious metal collapse
Marcy Nicholson, A. Ananthalakshmi and Jan Harvey – Reuters
The global silver-coin market is in the grips of an unprecedented supply squeeze, forcing some mints to ration sales and step up overtime while sending U.S. buyers racing abroad to fulfill a sudden surge in demand.

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