John Lothian News Special Report: Unchained: How Blockchain And Bitcoin Are Going Mainstream
Please click on the Special Report image to see the full report, which includes a full feature story, videos from Hans-Ole Jochumsen on Nasdaq’s efforts in blockchain technology and Adam Honoré, CEO of the fintech consulting firm MarketsTech, as well as the best recent Top Stories on the topic.
Quote of the Day
“I would vote no, for two reasons. First, much as the prospect of euro exit frightens everyone — me included — the troika is now effectively demanding that the policy regime of the past five years be continued indefinitely. Where is the hope in that? Maybe, just maybe, the willingness to leave will inspire a rethink, although probably not. But even so, devaluation couldn’t create that much more chaos than already exists, and would pave the way for eventual recovery, just as it has in many other times and places. Greece is not that different.”
Paul Krugman in the story, “Krugman’s Right: The Euro Was The Original Mistake, Vote No For Greek Recovery”
Tsipras Says European Leaders Won’t Dare Kick Greece Out of Euro
Greek Prime Minister Alexis Tsipras said European leaders don’t have the nerve to throw his country out of the euro, striking a defiant tone just hours after imposing capital controls on a country in economic freefall.
Gross Gets Personal: ‘I Just Wanted to Run Money and Be Famous’
Bill Gross is here for his favorite doughnut, the cake one with coconut frosting, but he’s not going to get it, not today. Jacketless under the Southern California sun, Gross ducks beneath the black umbrellas outside Rose Bakery Café, south of Malibu, looking every bit the merry old bond king. A royal-blue tie, with a cheerful pattern of white birds, is draped around his open collar like a Renaissance chain of office. His Mercedes sits hard by.
Who Will Succeed Warren Buffett as CEO of Berkshire Hathaway?; Oddsmaking in Omaha
by Noah Buhayar, Joel Weber, Bloomberg
Warren Buffett is 84. Only the Oracle of Omaha and Berkshire’s board know who’s destined to eventually fill his Brooks running shoes. Speculation spiked in March, when Vice Chairman Charles Munger name-dropped two executives in the company’s annual report: Ajit Jain, who heads its biggest insurance business, and Greg Abel, who oversees energy. (They’re known to be team players, unlike the Old Testament rivals their names evoke.) Who’s the more likely candidate? Let’s compare.
Krugman’s Right: The Euro Was The Original Mistake, Vote No For Greek Recovery
It’s not exactly a secret that Paul Krugman hasn’t been a great fan of the euro over the years. In fact, most economists haven’t been great fans of it: it has always been the political classes urging it on. So, the question now becomes, with the situation in Greece, what should be done next? And the answer is almost certainly to encourage a no vote at the upcoming referendum.
Greece may find it is easier to close banks than re-open them
Capital controls imposed in Greece are likely to stay in place for months and its banks may need billions of euros of new capital or even face nationalisation under a lengthy financial rebuilding, industry sources said.
The decision to close the banks and impose capital controls from Monday was difficult, yet re-opening them and finding a way to lift the measures could prove even tougher, experts warned.
China Stocks Plunge Most Since 1996 as Bubble Warnings Rise
China’s stocks capped their steepest two-week plunge since December 1996 as investors who use borrowed money to buy equities cut holdings and concern grew that valuations were excessive.
Is This the Beginning of the End for Chinese Stocks? Here’s What 11 Top Analysts Have to Say
As China enters a bear market, it’s become the No. 1 question on everyone’s mind: Is this just a dip, like when equities fell 17 percent in mid-2007 before skyrocketing to an all-time high, or the start of something a lot worse, like the selloff that would begin just three months later and wipe 72 percent off the value of the nation’s stocks?
Gundlach says purchased ‘lots’ of Treasuries, Ginnie Maes on Friday
Jeffrey Gundlach, a widely followed investor who oversees DoubleLine Capital, said in an interview on Monday his firm had purchased “lots of Treasuries and Ginnie Maes” on Friday, ahead of new developments in the Greek and Puerto Rico crises.
The U.S. Treasuries market rallied on Monday, with yields falling to one-week lows, as a breakdown in talks between Greece and its creditors stoked bets Athens would default on its debt.
NY bank watchdog sinks teeth into Isdafix rigging
Gina Chon in Washington, FT
FirstFT is our new essential daily email briefing of the best stories from across the web
New York’s banking regulator is probing an emerging benchmark trading scandal relating to the suspected manipulation of US interest rate swaps, according to people familiar with the matter.
Banks, bond insurers shares drop on Puerto Rico worries, options see more falls
Shares of banks and bond insurers exposed to Puerto Rico plummeted on Monday due to growing fears the U.S. Commonwealth would default on its debts, and options activity on many of those shares hinted at further declines to come.
Bond insurers were hit the hardest. Assured Guaranty shares fell 15.8 percent while MBIA Inc fell 21 percent. Ambac Financial Group dropped 11 percent. All three have sold insurance against potential defaults of Puerto Rican debt.
German regulator says Deutsche Bank CEO misled Bundesbank: FT
Deutsche Bank’s (DBKGn.DE) co-chief executive Anshu Jain may have “knowingly made inaccurate statements” to Germany’s Bundesbank during investigations into manipulation of the inter-bank rate setting process, the Financial Times reported online, citing a confidential report from German regulator BaFin.
Goldman Sachs eyes tilt to EU if UK backs ‘Brexit’: paper
Goldman Sachs (GS.N) would shift resources toward locations in continental Europe and away from Britain should the country’s voters choose to end the country’s membership of the EU, a senior executive told the Frankfurter Allgemeine Sonntagszeitung.
Deutsche Bank’s Head of Mergers and Acquisitions Said to Be Leaving
Dealbook – NY Times
Henrik Aslaksen, the global head of mergers and acquisitions at Deutsche Bank, is preparing to leave the company, according to a person briefed on his departure.
Mr. Aslaksen, who is based in London, has been with the German bank since 2002 and served in a variety of positions, including as co-head for mergers and acquisitions for Europe. He joined the bank from Merrill Lynch.
Bank of America U.S. Interest-Rate Strategist Misra Departs
Bank of America Corp.’s Priya Misra has left the company, according to a memo obtained by Bloomberg.
Shyam Rajan, a member of the rates team for the past six years, was named the head of U.S. rates strategy, according to the memo, whose contents were confirmed by Selena Morris, a Bank of America spokeswoman.
ECB’s Coeure Says Greek Exit From Euro Area Can’t Be Ruled Out
European Central Bank Executive Board member Benoit Coeure said Greece’s future in the euro area isn’t guaranteed, though he still sees room for a political deal to keep it.
“The exit of Greece from the euro area, which was a theoretical point, can unfortunately no longer be ruled out,” he said in an interview with Les Echos published late on Monday. “This is the result of the choice of the Greek government to put an end to the discussion with its creditors and to call a referendum, prompting the Eurogroup not to extend the second aid program.”
Greek drama not likely to waylay Federal Reserve
The fuse may be lit for a Greek exit from the euro zone but the fallout in the United States is expected to be modest and not enough to throw the Federal Reserve’s likely September rate hike off course, said former Fed officials and outside analysts watching the latest turn in Greece’s crisis.
Major U.S. stock indexes closed down about two percent on Monday following sharp declines in Europe and Asia, while yields on Treasury bonds fell as investors piled into U.S. debt, as is typical in times of overseas stress. But the gyrations in the markets were not dramatic enough to waylay the Fed, analysts said.
Here’s How Fed Officials Are Likely to Weigh Greek Crisis Impact
A Greek exit from the euro zone could give Federal Reserve policy makers reason to put off an interest-rate increase. Some investors are already betting on a delay.
Federal funds futures traders reduced the probability of a September increase to 35 percent on Monday in New York from 45 percent Friday. The yield on the 10-year Treasury note dropped by the most since October.
Fed’s Dudley says September rate hike ‘very much in play’: FT
A September interest rate hike is “very much in play” if the U.S. economy continues to strengthen, though the Federal Reserve could also wait until December to start tightening policy, an influential Fed official said in a newspaper interview.
The Next Few Days Have the Potential to Transform Greece and Europe
As it turns out, the Greek crisis ends not with a bang, but with a referendum.
It has been easy to ignore the doings in Greece for the last few years, with the perpetual series of summits in Brussels that never seem to resolve anything. But it’s time to pay attention. These next few days are shaping up to become a transformational moment in the 60-year project of building a unified Europe. We just don’t yet know what sort of transformation it will be.
Reverting to Drachma May Send Greek Currency at Least 40% Lower
Greece’s citizens would see a 40 percent drop in their purchasing power should the nation replace the euro with its erstwhile currency, according to analysts.
“Initially there would be a massive selloff, something in the region of 30 to 40 percent depreciation against the dollar,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. “We will get fresh all-time lows” for the drachma, he said.
Greece Is Likely to Keep Euro in 2015, Bookmakers Odds Show
Greece will probably keep the euro in 2015, according to odds from bookmakers including Paddy Power Plc, even as one firm suspended gambling on the nation’s fate.
Ireland’s largest betting company put the odds on Greece staying in the euro-region this year at 4/9, meaning a successful 9-euro ($17) wager wins 4 euros. Ladbrokes Plc has Greeks backing the July 5 referendum on austerity measures at 4/7, with a rejection at 5/4.
Confidence in euro maintained despite chaos
Though Asian currencies depreciated against the US dollar along with the euro, UOB Research does not expect significant market distress in Asia at this point, unless the Greek drama turns into a global financial market contagion.
Georgia man pleads guilty to running Forex trading ponzi scheme – LeapRate Fraud Watch
Stafford S. Maxwell, the former owner and Chief Executive Officer of Millennium Capital Exchange, Inc., has pleaded guilty to 10 counts of wire fraud for orchestrating a multi-million dollar foreign exchange market Ponzi scheme.
“Maxwell lured investors to his forex firm with bravado and false promises of trading success,” said Acting U.S. Attorney John Horn. “Maxwell’s claims led to nothing more than common theft, as he used lies and deceit to fleece people of their savings.”
Indexes & Index Products
MSCI Says China Faces Complex Process to Join Index
An executive at index provider MSCI Inc. on Monday said Chinese regulators face a complex process to satisfy requirements to join one of its widely tracked indexes. “You cannot underestimate the complexity of the process involved in making the necessary changes,” said Chris Ryan, MSCI’s head of Asia-Pacific. The country’s securities regulator, the China Securities Regulatory Commission, “has to coordinate amongst nine or more government agencies,” he said
MSCI says China faces “massive job” to join A-shares index
MSCI Inc said on Monday China’s securities reglator faces a “massive job” to coordinate the changes needed for domestic shares to be listed in its key emerging markets index.
The BIS on ETFs and bond market liquidity
Izabella Kaminska FT
The latest BIS Annual Report, released on Sunday, cites numerous concerns about the unseen damage being caused to financial stability on account of ultra-low interest rates.
Russell Rebalancing: The Day Every Investor ‘Needs to Think Like a Trader’
In Brussels, they’re scrambling to avoid a collapse of the Greek talks, and all the scary implications of that. In China, they’re watching their stock market crater. But in the U.S., those things will take a backseat to “rebalancing day,” the one day of the year when Russell Indexes makes a plethora of changes to its stock indexes.
S&P DJI launches indices for sustainable investors
S&P Dow Jones Indices (S&P DJI) has launched two new indices aimed at providing investors with improved exposure to securities that meet sustainability investing criteria. The S&P 500 Environmental & Socially Responsible Index and the S&P International Environmental & Socially Responsible Index have been licensed to Goldman Sachs Asset Management (GSAM), which worked with S&P DJI on their development.
Banks slash payments to index funds for Russell rebalance
With the annual rebalance of the Russell stock indexes just a day away, brokerage firms are shaving the discounts they typically offer to big index funds on what is usually one of the biggest trading days of the year.
Gold’s Relaxed Take on Greece
It should’ve been a manic Monday for gold.
It isn’t often that markets come off a weekend when Greece puts a foot over the edge of the cliff, China scrambles to cut rates to halt a stock-market slide and even Puerto Rico lets slip it might have some really bad news for the municipal-bond market. Gold’s response? A measly gain of less than 1%.
Europeans Rush to Gold Coins as Bank of Greece Stops Sales
European investors are increasing purchases of gold as Greece’s turmoil boosts the appeal for an alternative to the euro.
Demand from Greek customers for Sovereign gold coins was double the five-month average in June, the U.K. Royal Mint said in an e-mailed statement. CoinInvest.com, an online retailer, said sales on Saturday and Sunday were the highest since Cyprus limited cash withdrawals in 2013, driven by a jump in German, French and Greek buyers.
Frenzied gold rush sweeps north Niger
At least 100 men sleep on mats at the bus station in Agadez. They are gold panners, heading for the far north of Niger or returning as gold fever sweeps the country.
Some say a banal incident triggered the rush. “Some people got their car bogged down in sand in the desert. When they cleared it, they found a few nuggets. That was in 2013, near Djado,” says El-Hadj Mohamed Sale, a former guide who knows the Sahara well.
With 61 Seconds in a Minute, Markets Brace for Trouble
by Bob Ivry, Yuji Nakamura, Bloomberg
On June 30, time will stand still. Just for a second — a leap second. Since 1967, when clocks went atomic, human timekeeping has been independent of the earth’s rotation. The problem is, the planet is slowing down and clocks are not. So every few years, to get everything back in sync, scientists add a second. They’ve done it 25 times since 1972. The last time was 2012, but that was on a weekend. June 30 will be the first leap second during trading hours since markets went electronic.