First Impressions

Mary Ryan, TD Ameritrade – TD Ameritrade U: Who, What, When, Where, Why & How

“By increasing the financial literacy in a risk-free environment, we can decrease the age of the average investor…which is going to bring more traders and investors to the marketplace.”

Mary Ryan of TD Ameritrade explains the TD Ameritrade U program, which serves to educate students on trading and the financial industry. Ryan discusses the types of tools used in the program, such as giving students access to actual trading platforms, market data and trading support. The goal is to give students the most accurate simulation so they can go out and begin trading in the real world. Ryan also explains the the thinkorswim Challenge, a contest where student teams make trades with a $500k portfolio for four weeks. Prizes are awarded to the students with the highest returns.
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Quote of the Day

“While many banks now have strong clawback policies on paper, absent disclosure, it’s impossible for investors to know when and how they are being applied.”

Scott M. Stringer, New York City comptroller in the story, “U.S. Regulators Revive Work on Incentive-Pay Rules”.

Lead Stories

The La Salle Street Tax fairy tale
Sun-Times Editorial Board
Like Tinkerbells with pixie dust, dozens of candidates for alderman keep trying to spread a complete fantasy: a “La Salle Street tax” would solve all or much of Chicago’s massive financial problems. Don’t believe it. Chicago needs solutions, not fairy tales. A large financial transaction tax almost certainly would backfire and decimate Chicago’s financial markets, draining rather than growing Chicago’s tax base. And a more responsibly measured LaSalle Street tax would generate only a modest sum for our hard-pressed city and state.

How central banks have lost control of the world; From engaging in ‘competitive easing’ to provoking international currency wars, have we finally reached the limit of what monetary policy can achieve? Click on the countries below
Mehreen Khan – The Telegraph
The world’s oldest central bank has ventured into uncharted territory. Last week, Sweden’s Riksbank slashed its main policy rate into negative territory.

CFTC to propose swaps anonymity; Planned action would be a setback for banks, but a victory for hedge funds and high-speed traders
By Katy Burne, WSJ
U.S. regulators are poised to introduce measures that would ensure anonymity for traders in the $700 trillion market for swaps, said people familiar with the discussions, a flip-flop that would hand a victory to hedge funds and speedy trading firms while dealing a blow to banks.

Clearing brokers to raise fee structure for buy-side, says Catalyst
The Trade News
As regulatory change continues to take hold of banks’ profits, clearing fee structures for buy-side firms are estimated to increase this year to deliver 14-15% return on capital, up from the current 1-2%, argues consultancy firm Catalyst. Incoming rules such as central clearing for OTC derivatives in Europe and leverage ratios set out in Basel III has placed higher emphasis on profitability and relationships with clients.

2016 GOP Candidates Have Rand Paul’s Views of the Federal Reserve
Danny Vinik – The New Republic
On Monday, Politico’s Ben White and Katie Glueck reported that Wall Street is becoming increasingly concerned at the idea of Senator Rand Paul in the White House. Paul has been barnstorming around the country promoting his “Audit the Fed” bill and making ignorant statement after ignorant statement about monetary policy. His libertarian audience has eaten it up, which has only reinforced the fear that Paul is a real threat to the economy.

All Bankers Not Remunerated Equal
by Paul J. Davies, WSJ
Income inequality is either a great economic sickness, or the politics of envy depending, perhaps, on your salary.

U.S. Regulators Revive Work on Incentive-Pay Rules; Compensation That Rewards Excessive Risk Taking Is a Concern, WSJ
By Victoria McGrane And Andrew Ackerman
U.S. financial regulators are focusing renewed attention on Wall Street pay and are designing rules to curb compensation packages that could encourage excessive risk taking.

Leveraged Loans Need to Reshape Their Pitch as Individuals Flee
Lisa Abramowicz – Bloomberg
You’d think leveraged loans might regain some of their allure as the Federal Reserve prepares to raise borrowing costs since they have interest rates that track benchmarks. Instead, individuals can’t stop hating the debt.
Mutual funds that buy loans saw $4 billion yanked last month, bringing total outflows for the 12 months ended Jan. 31 $28.7 billion, according to Morningstar Inc. data. That’s the biggest withdrawal for any U.S. debt asset class in the period.

Schneiderman Gets NY Supreme Court Greenlight on Barclays Lawsuit
By Faye Kilburn,
The New York State Supreme Court has rejected efforts by Barclays to dismiss a lawsuit filed by New York Attorney General Eric Schneiderman accusing the bank of fraud relating to high frequency trading practices on its dark pool.

France issues arrest warrants for ex-UBS managers – judicial source
French investigating magistrates have issued arrest warrants for three former Swiss managers at UBS in connection with their investigation into whether the bank helped tax dodgers, a judicial source told Reuters on Tuesday.

SocGen Prime Services acquires minority stake in Gmex Group
Societe Generale Prime Services – formerly Newedge – today announced that it has acquired a minority stake in Global Markets Exchange Group International LLP (“GMEX Group”). Following the investment by Deutsche Börse Group AG, Societe Generale becomes the second minority investor in GMEX Group and plans to provide execution and clearing services for clients trading on the exchange.

Rosenthal Collins Group Named Best Boutique FCM by CTA Intelligence Magazine
Rosenthal Collins Group LLC (RCG), a leading independent futures clearing firm, today announced that CTA Intelligence magazine this month named RCG “Best Boutique” Futures Commission Merchant (FCM) in its U.S. CTA Intelligence Services Awards 2015. The awards recognize and honor firms that have provided “outstanding support and services to the North American managed futures industry” and “demonstrated exceptional customer service” over the past 12 months.

Central Banks

Fund manger Seth Klarman criticizes ‘cynical’ Boston Fed president Eric Rosengren on stimulus efforts
Steven Syre – Boston Globe
Here’s a simple question: Who benefitted most from all the extraordinary ways the Federal Reserve has used monetary policy to help get the American economy back on its feet?
Seth Klarman of Baupost Group in Boston would tell you it’s not necessarily your average working stiff. By stimulating the economy, central bankers also propelled the value of many investments owned by wealthy people through the roof.

How the European Central Bank could now finally pull the trigger on a Grexit
Mehreen Khan – The Telegraph
Greece’s stand-off with its creditors shows little signs of abating.
After the latest, unpromising round of talks between the new Greek government and the euro’s finance ministers, both parties have hardened their negotiating positions in the run up to another showdown, temporarily penciled in for Friday.
But before we get to the end of the week, the prospects of a disorderly exit for Greece could be heightened significantly.

Central banks and the bottom line
Barry Eichengreen and Beatrice Weder di Mauro – Swiss Info
Around the world, central banks’ balance sheets are becoming an increasingly serious concern – most notably for monetary policymakers themselves.
When the Swiss National Bank (SNB) abandoned its exchange-rate peg last month, causing the franc to soar by a nosebleed-inducing 20%, it seemed to be acting out of fear that it would suffer balance-sheet losses if it kept purchasing euros and other foreign currencies.

Treasury Yields Approach Highest in 2015 as Refuge Appeal Fades
Susanne Walker and Daniel Kruger – Bloomberg
Treasury 10-year note yields approached a 2015 high amid speculation Greece’s government may seek an extension of its loan agreement and as traders added to bets the Federal Reserve will raise interest rates later this year.
Yields on the benchmark securities for everything from consumer loans to mortgages have risen almost half a percentage point since January. The yield on the two-year note, more sensitive to central-bank policy than longer-term peers, traded at almost the highest this year as the Fed prepares to release minutes of its January meeting Wednesday.


Pressure builds to move more FX trading onto exchanges
By Patrick Graham and Jamie McGeever, Reuters
International regulators struggling to rein in the $5 trillion-a-day global foreign exchange market are finally finding some support from asset managers warming to the idea of moving more trading onto exchanges.

FXCM to Stop Trading in Selected Currencies
Chiara Albanese – WSJ
Foreign-exchange broker FXCM Inc. will stop trading a number of currencies later this week to avoid volatility caused by possible future intervention by governments in currency markets, according to a person familiar with the matter.

A currency war would be no bad thing
The Interpreter
The European Central Bank has finally begun to engage in quantitative easing. The euro depreciated on the news, which is good for the Europeans but bad for the rest of the world, right? It’s another currency war – a zero sum game leading to, at best, nothing but debased currencies. At least that’s what we’ve been told.

Indexes & Index Products

New MSCI hire eyeing SMSFs
SMSF Adviser
MSCI’s vice president for ETF client coverage in Australia will be keeping SMSFs in his sights in his new role. MSCI hired Tim Bradbury to the position early this week, and he will be responsible for driving visibility, awareness and usage of the MSCI indexes within the ETF market in Australia, with a special focus on retail distribution networks and SMSFs.

MSCI index shake-up challenges China managers
China fund managers are preparing for ‘controversial’ changes to the benchmark index, which could also prompt adjustments to Investment Association definitions.

VALX: A New Guru ETF That Mimics The All-Time Greats
Smarter Analyst
When it comes to investing, originality is overrated. You get no brownie points for using only your own research. Returns are returns. So, if you can piggyback on the research of famous investors like Warren Buffett or Peter Lynch, why wouldn’t you?

Inside Money: ETFs – greatest ever innovation or looming disaster for investors? – Your Money – NZ Herald News
I thought it was loom bands but legendary investor, Jack (aka John) Bogle has named exchange-traded funds (ETFs) as “the greatest marketing innovation of the 21st century”. But as Bogle, the godfather of passive investing, told the Financial Times (FT), he doesn’t mean that in a good way.

MSCI index shake-up challenges China managers
Investment Week
China fund managers are preparing for ‘controversial’ changes to the benchmark index, which could also prompt adjustments to Investment Association definitions.


When Currencies Go to War, Investors May Look to Gold
The rapid and massive response when the Swiss unpegged the franc from the euro will ripple across the hedge fund, brokerage and financial systems. It also will infect other currencies, according to Bob Moriarty of Gold, he believes, will be the last man standing. In this interview, he tells The Gold Report where he is looking for love among midtier gold and silver stocks and explains why he has no love for overpaid CEOs.

Barrick Gold Corp chairman keeps investors guessing on miner’s next move: ‘I’m looking into a black hole’
Liezel Hill – Bloomberg via Financial Post
On an icy late-January evening in Toronto, more than 30 Barrick Gold Corp. mine managers and country heads gathered in the basement of a pub to hear their executive chairman’s vision for the world’s largest gold producer.
In town for year-end meetings, the group listened intently as John Thornton outlined a plan to give them the authority they needed to run their units like their own businesses, according to a person present. Barrick’s Toronto headquarters would shrink in size and reach.

Banking Heir Who Lost Millions in Gold Wants to Raise More
by Thomas Biesheuvel, Bloomberg
Peter Hambro, descended from a wealthy line of Anglo-Danish bankers, recalls receiving a bottle of whisky as a gift from his mother’s gardener. It was a token of thanks after seeing a good return on his investment in Hambro’s Russian gold mining business. “I’ve made so much money, the least I can do is give you a drink,” Hambro, 70, remembers the gardener saying at the time.
Those days are long gone.

Divers in Caesarea find largest treasure of gold coins ever discovered in Israel – Israel News
The Jerusalem Post
The largest treasure of gold coins discovered in Israel was found in recent weeks on the seabed in the ancient harbor in Caesarea National Park, the Israel Antiquities Authority (IAA) said on Tuesday.
A group of divers from the diving club in the harbor reported the find to the IAA whose officials then went with the divers to the location with a metal detector and uncovered almost 2,000 gold coins from the Fatimid period (eleventh century CE) in different denominations: a dinar, half dinar and quarter dinar, of various dimensions and weight.

Gold Moves Forward In Arizona
Keith Weiner – Forbes
On February 4, I testified before the Arizona House Federalism and States’ Rights Committee in support of HB 2173. The bill recognizes gold and silver as legal tender and eliminates taxes on them.
Sometimes, the best and most effective thing you can do is show up. I think the outcome of the vote was all but predetermined, but I made new friends, and renewed friendships with liberty movement activists. Everyone in the room favored the passage of the bill, with the exception of a few legislators.

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