First Impressions

Building Bricks: T-Bricks Could Be New Cornerstone For Orc
JohnLothianNews.com

Jonas Hansbo and his team left Orc in 2006 to focus on his own brand of trading and financial technology with a startup called TBricks. But Hansbo and his colleagues were brought back to the mothership in January when when Orc purchased TBricks. Now, Hansbo said the two firms will bring their respective strengths together.
“Orc has been evolving since we left it, and very much focused on reinventing their electronic trading platform for connectivity and electronic execution,” Hansbo said. “So what we thought would be a very interesting fit for the two companies was to make a combination of our offer in trading together with Orc’s global reach.”
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Quote of the Day

“Ajit Jain and Greg Abel are proven performers who would probably be under-described as ‘world-class’. Each is a better business executive than Buffett.”

Charles Munger in the story, “A Two-Man Race Is On to Succeed Buffett at Berkshire”.

Lead Stories

The 15 Most Miserable Economies in the World
Michelle Jamrisko, A Catarina Saraiva and Andre Fonseca Tartar – Bloomberg
Inflation is a disease that can wreck a society, Milton Friedman, the late Nobel laureate economist, once said. Add rising unemployment to the diagnosis, and his profession ascribes a rather non-technical term to the debilitating effect on people: misery.
That affliction this year will be most acute in Venezuela, Argentina, South Africa, Ukraine and Greece — the five most painful economies in which to live and work, according to Bloomberg survey data that make up the so-called misery index for 2015. (It’s a simple equation: unemployment rate + change in the consumer price index = misery.)
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Fund Managers’ Love of Consumer Stocks Is Paying Off
Michael P Regan – Bloomberg
Hedge funds have long had a fancy for shares of consumer-discretionary companies, even though the love went unrequited in 2014 as the group trailed the return of the broader market for the first time in seven years.
This year, however, the tide has shifted back in their favor. The group of retailers, restaurant chains and other companies that want a piece of your spare cash is up about 6 percent for the year, more than double the gain in the Standard & Poor’s 500 Index. You can probably thank cheap gasoline, a strong dollar and, at least in the case of the high-flying Netflix Inc., Kevin Spacey.
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Don’t weaken leverage ratio, U.S. bank regulator tells peers
Douwe Miedema – Reuters
Regulators shouldn’t weaken a rule that limits banks’ borrowing, a senior U.S. bank supervisor said on Monday, indicating a possible split with the derivatives watchdog over the issue.
Tom Hoenig, second-in-command at the Federal Deposit Insurance Corp (FDIC), said he disagreed with the head of the Commodity Futures Trading Commission who has expressed concerns about the so-called leverage ratio.
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Institutions Pour Cash Into Bond ETFs; Move to exchange-traded funds comes as big investors deal with bond-trading challenges
By Katy Burne
Institutions are piling into exchange-traded bond funds at the fastest pace on record, driven by forces reshaping the increasingly illiquid corporate-debt market and their desire to stay nimble ahead of expected interest-rate moves.
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A Two-Man Race Is On to Succeed Buffett at Berkshire; Both fit Buffett’s description of right CEO for Berkshire
Anupreeta Das – WSJ
Warren Buffett once wrote to shareholders of Berkshire Hathaway Inc. that if he, his partner Charles Munger and his deputy Ajit Jain were ever on a sinking boat and only one of them could be saved, “Swim to Ajit.”
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Warren Buffett Rails Against Investment Bankers
By DAVID GELLES, NY Times
Warren E. Buffett is regarded as one of the world’s great deal makers, orchestrating a series of big acquisitions that have turned Berkshire Hathaway into one of the world’s largest conglomerates.
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Bill Gross Goes to the Dogs
Paul Vigna – WSJ
The Janus Capital JNS +1.15% money manager, whose monthly investment letters are famous for their flights of fancy, begins this month’s offering with an extended musing on dogs, and ends with a stark warning about the dangers to investors of the currency war that none dare call a currency war.
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Gross Says He’s Got Up to Four Years to Re-Establish Mark
Mary Childs – Bloomberg
Bill Gross, the money manager who jumped to Janus Capital Group Inc. in September from the bond giant he co-founded, said he’ll keep trading for the next two to four years to prove he can still beat the market.
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Biggest Global Banks Go to Pieces Under Pressure From Regulators
By Michael J. Moore, Yalman Onaran and Nicholas Comfort, Bloomberg
Global regulators have issued dozens of rules aimed at making the biggest banks safer. That’s leading to another result some wanted: making them shrink. Lenders, unable to use borrowed money to fund as much of their business as they once did, have cut profitability targets and are weighing more drastic actions to meet them.
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European Banks’ Reciprocity Draws Scrutiny; Banks give work to competitors partly based on how much business they receive in return
By David Enrich and Shayndi Raice
When Deutsche Bank AG hired 25 banks last summer to help it raise about $9 billion of new capital, it made some unusual selections. In addition to a handful of Wall Street stalwarts, three Italian banks made the cut. Japan’s Nomura Holdings Inc. was on the list. So was a large Austrian bank.
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China Short Sellers Shun Stock Link With Zero Trade on Debut
by Kana Nishizawa, Eduard Gismatullin, Bloomberg
Hong Kong’s stock exchange says its new platform for bearish bets through the city’s bourse link with Shanghai is running smoothly. There’s just one thing missing: short sellers.
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Vanguard tops mutual fund survey with $291bn in new business
David Oakley, Investment Correspondent, FT
Vanguard was the world’s most popular investment group last year as it attracted more new business than any other asset manager in the $29tn global mutual fund industry.
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Leon Black of Apollo Global Got $331 Million Payout in 2014
By WILLIAM ALDEN, NY Times
Only in the rarefied world of private equity would an annual payout of more than $300 million for a top executive constitute a decline from the previous year.
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Central Banks

The Great Global Monetary Easing of 2015 May Be Done by Midyear
Bloomberg
The rush began in Tashkent, capital of Uzbekistan, on Jan. 1.
The former Soviet state enacted the first interest-rate reduction of 2015. Since then, the cuts have come thick and fast, with the People’s Bank of China on Saturday becoming the 17th central bank of 57 monitored by Bloomberg News to pare its benchmark.
By the end of this week, the list will probably include Poland. Some economists also forecast Australia and Canada will act for the second time this year.
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Federal Reserve has ‘golden’ chance to tighten: Druckenmiller
CNBC
To avoid wreaking havoc on markets, the Federal Reserve should raise interest rates sooner rather than later, Stanley Druckenmiller said on Monday.
“If the Fed was ever going to raise rates and not have it dramatically impact financial conditions, this is a golden opportunity right here,” Druckenmiller, founder of hedge fund Duquesne Capital Management, said in an interview with CNBC.
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Foreign Banks Brace for Fed Stress Tests
Ryan Tracy And Matt Turner – WSJ
The Federal Reserve’s growing scrutiny of global banks has set off a scramble among foreign firms as they staff up and revamp operations to meet the central bank’s rising expectations.
The Fed’s stress tests are expected to find shortcomings in risk management at the U.S. units of some foreign banks, including Deutsche Bank AG and Banco Santander SA, according to people familiar with the matter. The Fed announces preliminary results of this year’s tests on Thursday and full results on March 11.
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Bill Gross: Central banks have gone ‘too far’
Jeff Cox – CNBC
Ultra-easy central bank monetary policies are about to come back to bite the global economy, bond guru Bill Gross said in his latest letter to investors.
Institutions including the U.S. Federal Reserve fired the first shot in global competitive currency devaluation at the height of the financial crisis as a means to increase liquidity and push investors toward taking more risk.
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Currencies

Speculator Mania for Danish Krone Makes No Sense, OECD Says
by Peter Levring, Bloomberg
The obsession with holding kroner that has gripped speculators since mid-January is hard to explain given the state of Denmark’s economy.
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Do Cryptocurrencies Such as Bitcoin Have a Future?
WSJ
Despite the mystery, the whiff of scandal, and general public unfamiliarity with the concept, somebody out there is buying, and selling, not just bitcoin but dozens of other cryptocurrencies as well. The total market capitalization for these unregulated electronic forms of payment was roughly $4.04 billion as of mid-February, according to coinmarketcap.com, a website that tracks trading in alternative currencies. More than 500 altcoins, as they are also known, were represented on the site recently.
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Indexes & Index Products

Are Index Funds Really Better Than Actively Managed?
WSJ
Index funds or actively managed funds? There’s a bright line dividing these two fundamentally different approaches to investing. Numerous studies have shown that index funds, with their low costs and ability to closely mimic the returns of markets both broad and narrow, steadily outperform the returns of most actively managed funds.
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Xignite to Distribute MSCI’s Global Equity Indexes via API
ProgrammableWeb
Financial market data provider Xignite has inked a deal with MSCI to distribute its MSCI Global Equity Indexes through Xignite’s cloud API platform. MSCI is one of the largest providers of indexes that are used by investors and fund managers to track financial markets and create performance benchmarks. The MSCI Global Equity Indexes are some of the most widely used, and according to MSCI, they serve as the basis for more than 650 exchange traded funds around the world.
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Gold

$4.8M in Gold Bars Stolen in Armored Truck Heist on Highway
MICHAEL BIESECKER – Associated Press via ABC News
Shortly after dusk along a lonely stretch of Interstate 95, armed robbers hijacked an armored truck, tied up the two guards and disappeared into the night with 275 pounds of gold bars.
The guards working for Transvalue Inc. of Miami reported pulling off to the side of the interstate about 6:30 p.m. Sunday after their vehicle began having mechanical problems in eastern North Carolina, according to the Wilson County Sheriff’s Office.
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