First Read

Risk Off: How The Industry Can’t Fail
Jim Kharouf, JLN

Bruno Iksil, aka “the London Whale,” has issued a letter to the media arguing that his actions in the market were directed and overseen by senior executives at J.P Morgan Chase when it lost $6 billion in 2012.

What is troubling about the case is that it is still a story. In pre-2008 years, if a trader lost a large sum of money, it was called a losing trade. But these days, it’s cause for a multi-year investigation. The crux of the problem with this case is simply this, J.P. Morgan Chase lost $6 billion, but it HAD and HAS the money to cover the loss. If it didn’t have the cash to cover, then we are talking about something much different indeed.

Of course, in the wake of the 2008 financial crisis, there has been heightened focus on counterparty risk, increased margin and capital requirements, pre-trade risk controls, post-trade analysis and so on. Should the bank fall under scrutiny for failed risk management? Maybe, if such margin and other risk management thresholds were breached. But the case should be done and over with by now. If Iksil did nothing wrong, he should be allowed to move on with his career and life. If J.P. Morgan has learned from the error and implemented better risk management structures, let’s move along.

It would be easy to equate J.P. Morgan’s Whale case with say, AIG or others during the 2008 meltdown, but for this one simple fact – they have the cash to cover the loss.

Of course, we can’t have a heads I win/tails the taxpayers lose situation, either. In 2008, what angered both sides of the aisle is that, after the fact, many of the risk takers did not lose one dollar of their personal fortunes. If the taxpayers are to come to the rescue, it should be after the Bruno Iksils and his superiors have their bonuses clawed back. So the global regulatory overhaul includes capital charges, leverage limits, liquidity coverage and other rules designed to give banks a backstop to prevent a passing of the hat to society at large. The downside of this, of course, is that idle capital is a drag on productivity and growth. Finding that sweet spot continues to be a challenge for our banks.

The danger in today’s environment is that we’re at a point where institutions are not allowed to take risk nor lose money. This has a deleterious effect on the markets, as banks shutter trading operations and pull out of various sectors in the trading ecosystem.

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‘London Whale’ Breaks Silence; Bruno Iksil says J.P. Morgan Chase made him a scapegoat
By LUCY MCNULTY and GREGORY ZUCKERMAN – WSJ
The trader at the center of the “London whale” trading debacle broke nearly four years of silence by taking aim at former employer J.P. Morgan Chase & Co., saying he was made a scapegoat for trades that were “initiated, approved, mandated and monitored” by senior management.
goo.gl/xUsQ2W

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John Lothian News/MarketsWiki Survey 2016 – Four More Days!
Friday, February 26 is the final day to participate in our 2016 reader survey. Help us help you by giving us three minutes of your time and sharing your thoughts. It is also a fun and quirky survey featuring the witticisms of Jim and Doug. The final kicker? You could win an Apple Watch. Click HERE before it’s too late.

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OIC: Trading Options? How a Strong Defense Makes a Strong Offense
February 23, 2016, 3:30 pm CST
Take a deep dive into basic defensive options strategies with a panel of experienced professionals, including Joe Burgoyne and Ed Modla from The Options Industry Council, who will show you how to play defense with smart options strategies to improve your investing playbook.
goo.gl/3M4d3p

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Sit down, let me tell you how this works
Jim Kharouf – JLN
It is interesting to read the London Stock Exchange’s report on small and medium sized businesses. Among the nine or so categories of businesses in the report, the financial technology category appears poised for growth, with 70 percent of financial firms getting loan approvals from lenders in the UK over the past 18 months. And some banks are offering free mentoring services to help entrepreneurs grow, including a service called Mentorsme, which has reached more than 200,000 businesses in the UK.
goo.gl/xK4kCv

***JK: Yesterday’s column mentioned Doha, Bahrain; which was incorrect. Doha is in Qatar. Apologies for the error, which has been corrected. I usually know where I am and have been.

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How Older Women Are Reshaping U.S. Job Market; More female workers delay retirement, a shift that’s helping to transform America’s economy
By NICK TIMIRAOS – WSJ
Connie Blanchette, age 72, is a relative newcomer at the county social-services agency where she works part time, so her retirement plans differ from most longtime government workers. “I will work as long as I can,” she said.
goo.gl/RVpglN

***DA: A heartwarming story? Or a signal of a break in the generational contract? Younger workers struggle to gain a foothold in the job market, as 80 is the new 60.

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Monday’s Top Three
Chicago Magazine’s Power 50 blew away the competition yesterday, with double the clicks of its next closest competitor. I clicked to make sure I was not there. Indeed I was not. Coming in second was the Bloomberg story
NYSE Embarks on High-Stakes Technology Shift for its Exchanges, which would have been on top most days, indicating a strong level of newsletter engagement Monday. Rounding out the top three was Big Data = Big Money, Jim Kharouf‘s look at exchange data fees. This story, which originally appeared in its entirety in Thursday’s newsletter, was still atop people’s minds Friday. In fact, we have received more comments from industry people on this story than any in recent memory. Jim clearly touched a nerve with this one.

Lead Stories

Banks face $27bn risk from failed derivatives payments
Philip Stafford – FT
Investment banks may face an annual $27bn exposure if the counterparties to bespoke swaps trades fail to deliver the insurance payments on time, a new study has argued.
goo.gl/ydoqmD

JPMorgan Quietly Tests ‘Blockchain’ With 2,200 Clients
WSJ
The nation’s largest bank has been testing the program in recent months to move U.S. dollars for about 2,200 clients between the two financial centers using a version of the “blockchain” technology that underpins bitcoin, said Daniel Pinto, head of J.P. Morgan’s corporate and investment bank. The bank wants to see whether the blockchain technology, known as the “distributed ledger,” can be repurposed for currency clearing and settlement to give clients faster turnaround times and reduce the bank’s risk.
on.wsj.com/1oDPu2v

Hong Kong Exchange adds new renminbi futures
Jennifer Hughes in Hong Kong – FT
Hong Kong is poised to introduce a range of new renminbi futures contracts as investors struggle with a fall in offshore liquidity for the Chinese currency following heavy central bank intervention earlier this year.
goo.gl/FEsjGl

Why Brexit Fears Are Sending The Pound Through the Floor
MoneyBeat – WSJ
The plunge in the pound doesn’t necessarily say anything about the long-term health of the U.K. economy in our out of the European Union. The most obvious explanation is simply down to uncertainty over what might come after a vote to leave the EU. That lack of clarity could dampen investment, at least in the short term.
on.wsj.com/1QyD9IU

A New Breed of Trader on Wall Street: Coders With a Ph.D.
The New York Times
As the popularity of E.T.F.s has soared — exchange-traded funds now account for a third of all publicly traded equities — the spreads, or margins, have narrowed substantially, making it harder to profit from the difference. And in many cases, some of the most popular E.T.F.s track hard-to-trade securities like junk bonds, emerging-market stocks and a variety of derivative products, adding an extra layer of risk.
nyti.ms/1QyEJuc

Morgan Stanley combines fintech investing units
Financial News
Morgan Stanley has combined the teams making financial technology investments on behalf of its equities and fixed income divisions, following a slimming down of one of the teams.
goo.gl/frP7YT

BlackRock Warns Bond Traders They’re Underestimating the Fed
Wes Goodman, Anchalee Worrachate – Bloomberg
Koesterich says strengthening inflation may help prompt Fed; Traders see less than 50% chance of rate increase in 2016
BlackRock Inc., the world’s biggest money manager, is warning bond investors they’re not prepared for the Federal Reserve to raise interest rates.
goo.gl/obh1al

G-20 Likely to Reiterate Currency Commitments, Treasury Official Says
WSJ
Global financial leaders likely will reiterate previous currency policy commitments, a senior U.S. Treasury official signaled Monday, despite concerns that lackluster growth around the world may tempt some countries to use devalued currencies to juice exports.
on.wsj.com/1oDPFLd

IOSCO plays a key role in responding to global securities markets’ challenges
IOSCO
The Board of the International Organization of Securities Commissions (IOSCO) met for two days in Madrid to discuss and respond to the many ongoing and emerging challenges facing global securities markets.
/goo.gl/uZu6sP

Speed Trader XTX Hires Goldman Sachs Director for Commodities
Bloomberg Business
Speed trader XTX Markets has hired Goldman Sachs Group Inc. director Jigar Patel to head its electronic commodities business. Patel will start at the electronic market maker in May, according to a statement from XTX on Monday. His LinkedIn profile says he was a director at Goldman.
bloom.bg/24n6Jp0

Regulatory

SEC Nods to Multinationals
By TATYANA SHUMSKY – WSJ
The Securities and Exchange Commission is trying to strike a delicate balance: advancing its plans to simplify financial-reporting requirements without making them any less stringent.
goo.gl/8bNo0Y

CFTC Staff to Host a Public Roundtable March 3 Regarding the Residual Interest Deadline
CFTC
The U.S. Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight and the Office of the Chief Economist will host a public roundtable on March 3, 2016 at 10:00 am to discuss a report on the Residual Interest Deadline.
Regulation 1.22 directs staff to complete and publish for public comment by May 16, 2016 a report addressing the practicability of amending the Residual Interest Deadline from 6:00 p.m. Eastern Time to the time of settlement or to some other time of the day. In addition, Regulation 1.22 directs staff to conduct a public roundtable regarding specific issues to be covered by the report.
1.usa.gov/1PTkLqF

Ticket to a Tax Audit: $1 Million
WSJ
The sum of $1 million doesn’t go as far as it used to. But increasingly, it is enough to get you special attention from Uncle Sam. The Internal Revenue Service continued to ramp up its focus on high earners in fiscal 2015, according to data released by the agency Monday.
on.wsj.com/1QyCzuE

Two Ranking Democrats to Offer Bill Aimed at Inversions
The New York Times
Two House Democrats plan to introduce a bill on Tuesday that would seek to curtail a strategy used by former American companies to cut their United States tax bills. The measure takes aim at so-called corporate inversions, where American companies move their headquarters overseas through a merger to save on taxes at home. The biggest such deal is Pfizer’s planned $150 billion merger with Allergan.
nyti.ms/1QyE0JE

Canadian Derivatives Regulation: The New Looming Reality of Compliance and Costs for Energy Companies
Lexology
Canadian energy companies, including energy producers, energy infrastructure companies, energy trading and marketing organizations, natural gas distribution companies, power transmission and generation companies, electric utilities and global companies who enter into over-the-counter (“OTC”) derivatives transactions with Canadian energy companies are now going to have to comply with new regulatory obligations involving the oversight and regulation of OTC derivatives as the reform of Canadian derivatives regulation picks up steam in the Canadian western provinces.
goo.gl/AvJZ2V

Securities Commission Malaysia: Global Body Of Capital Market Regulators To Set Up Asia-Pacific Hub In Kuala Lumpur
MondoVisione
The International Organisation of Securities Commissions (IOSCO), the global body of capital market regulators has approved the establishment of its first ever regional office to be set up in Kuala Lumpur. IOSCO’s membership regulates more than 95% of the world’s capital markets worth approximately USD140 trillion, in more than 115 jurisdictions.
goo.gl/K7NxGu

Exchanges & Trading Facilities

SPX Wednesday Weeklys Begin Trading on Feb. 23
CBOE Options Hub
Beginning Tuesday, February 23, CBOE will list for trading weekly options on the S&P 500 Index which expire on Wednesdays (“SPX Wednesday Weeklys”). Like other SPXW options, SPX Wednesday Weeklys are series of the SPX option class.
goo.gl/G5ptH7

Deutsche Börse and Vienna Stock Exchange extend trading technology agreement
Deutsche Börse
Vienna Stock Exchange will continue to use Deutsche Börse’s trading technology. Both exchanges extended their contract by a further six years, at least until 2021. The co-operation partners of Vienna Stock Exchange will also use Deutsche Börse’s trading infrastructure.
goo.gl/9Ugrq0

Tradition live with Eurex rates swaps order book
Futures & Options World
German exchange giant Eurex and broker Tradition have launched a new service that allows firms to trade swaps at Tradition and clear directly into Eurex’s swaps clearing service, increasing the competitive pressure on Eurex rival LCH. Tradition’s interest rate swap broking unit Trad-X said it launched with Eurex on Monday a central limit order book for EurexOTC cleared interest rate swaps to coincide with the start of swaps onboarding in Europe under the European Market Infrastructure Regulation.
goo.gl/gttcdQ

Japan OTC Exchange to offer CME cleared trading in March – Natural Gas
Platts News Article & Story
Japan OTC Exchange Inc said Monday that it will start the trading of LNG derivatives linked to the Rim DES Japan LNG assessment which can cleared and settled through CME in March 2016. The LNG DES Japan (Rim) futures contract will be 10,000 MMBtu in size, and will be cash settled referencing the Spot LNG Price Assessment, DES Japan by Rim Intelligence, according to CME.
goo.gl/ojMbEB

Politics

Bashing Brussels is Boris Johnson’s brand not conviction, friends say
FT.com
When Boris Johnson was a young reporter in Brussels, he once arrived late at a press conference with the immortal words, “So what is going on and why is it bad for Britain?” Years later, as a politician, he delivered a thunderous speech attacking the EU, and then whispered to a member of the audience, “You know I don’t believe a word of it”. Such tales underline why even Mr Johnson’s friends have refused to take his Euroscepticism seriously: bashing the EU was his brand, not his conviction.
on.ft.com/1QyCION

Analysts Question Viability of Deep Tax Cuts Proposed by Republican Candidates
The New York Times
The tax plans of the Republican presidential candidates would cut federal revenues as much as $12 trillion over a decade, a post-World War II record eclipsing the deep tax cuts of George W. Bush, Ronald Reagan and John F. Kennedy. And they would come just as America faces the costs of its aging baby-boom generation.
nyti.ms/1QyDzyQ

Hedge Funds & Managed Futures

Fund managers can’t pick fund managers – study
By Mark Cobley – Financial News
Managers who specialise in running diversified growth funds, a type of multi-asset product popular in the UK, are struggling to prove they have the skills to pick between other fund managers and asset classes, new research suggests.
goo.gl/GccCNr

Carlyle to shut DGAM hedge fund-of-funds unit
Reuters
Alternative asset manager Carlyle Group LP said on Monday it would shut its hedge fund-of-funds manager Diversified Global Asset Management Corp (DGAM), two years after it added the unit to its investment platform. Toronto-based DGAM, which manages funds that invest in other hedge funds, had more than $6 billion in managed and advised assets as of April 30, 2015.
reut.rs/1QyCsPG

Negative rates: ECB seeks ways to ease pain for banks
FT.com
Unease about how far below zero the European Central Bank can cut interest rates without ravaging the region’s lenders is set to play an important role in policymakers’ discussions on further monetary loosening, with top officials mooting a change to the way they set borrowing costs.
on.ft.com/1QyF8Nr

Amid Commodities Gloom, a Few Bright Spots Emerge; Some industrial metals are doing well this month, including aluminum, copper and nickel
By GREGOR STUART HUNTER – WSJ
Commodities have been an unloved asset class for a while, but some have had a pretty good year so far. Not that you’d know it from listening to those who produce or trade the world’s metals.
goo.gl/Y9sqGI

Jamie Dimon Is Up a Cool $2.3 Million on His New J.P. Morgan Shares
MoneyBeat – WSJ
James Dimon’s decision to buy battered shares of his firm earlier this month is looking pretty good at the moment. The J.P. Morgan Chase & Co. chief bought 500,000 shares on Feb. 11 for $26.6 million, according to a regulatory filing. That turned out to be the recent bottom for the lender’s shares. As of Friday’s close, his purchase is worth $28.9 million, making for a cool $2.3 million of paper gain in less than a month.
on.wsj.com/1QyFqnq

Kyle Bass returns funds amid retreat on pharma shorting campaign
Stephen Foley and David Crow in New York – FT
Kyle Bass, the Dallas-based short seller, has returned most of the $700m he raised last year for a high-profile campaign against pharmaceuticals companies and their drug patents.
goo.gl/lEydDa

Banks & Brokers

J.P. Morgan Lays Out Its Technology Plans
MoneyBeat – WSJ
The largest U.S. bank by assets is expected to detail its technology spending strategy throughout different presentations from Chief Executive James Dimon and his top lieutenants. Actions range from new spending on fintech to cutting costs on technology that keeps the bank running.
on.wsj.com/1QyDYS0

US bank lobbyists blast ‘excessive’ capital requirement rules
FT.com
The top lobby groups for banks in the US have blasted proposals to make them build bigger buffers against losses, saying that the “excessive” requirements could restrict the flow of credit to the world’s biggest economy. The lobbyists were responding to proposals set out late last year by the US Federal Reserve, which were part of a global effort designed to end the problem of lenders whose size and influence renders them “too big to fail”.
on.ft.com/1QyFi7n

HSBC: Solving the Puzzle of Its Dividend Yield
WSJ
What is the sound of one hand clapping? This kind of impossible Buddhist riddle, or koan, is meant to aid enlightenment. HSBC is itself a koan, but rather than inner peace, it is giving investors a headache.
on.wsj.com/1QyHJH4

Standard Chartered’s Stock Price Horror Show is Getting Even Worse
By MIKE BIRD – WSJ
Standard Chartered STAN.LN -5.74% is having yet another miserable day. This morning the bank revealed its first loss since 1989, driven by exposure to wobbly emerging markets and plunging commodity prices.
goo.gl/ju1Dzn

Credit Suisse’s dark pool market share fell by a fifth after US settlement
By Tim Cave – Financial News
The market share of Credit Suisse’s US equities dark pool fell by more than a fifth in the week after it settled allegations from regulators that it misled clients.
goo.gl/qNSGCz

French banks swim against retreating European tide
BY MAYA NIKOLAEVA AND JULIEN PONTHUS – Reuters
French banks, unlike their European rivals, are vowing to hang on to a broad array of businesses and even grow market share, a strategy backed by long-term investors but penalized by the market.
goo.gl/kWPS6i

Clearing & Settlement

Trade Settlement Giant DTCC to Host Blockchain Event
CoinDesk
Post-trade financial services giant DTCC has announced it is to host a blockchain event next month in New York City.
Called the Blockchain Symposium, the day-long event will explore the business applications of blockchain technology for financial market infrastructures and the industry.
goo.gl/dp7LYd

Banks face $27bn risk from failed derivatives payments
Financial Times
Investment banks may face an annual $27bn exposure if the counterparties to bespoke swaps trades fail to deliver the insurance payments on time, a new study has argued.
Brokers may also have to rethink their view that such failures are “business as usual” in the face of likely sharply rising operational costs, according to a survey by PwC and DTCC-Euroclear Global Collateral, a joint venture between two of the world’s largest securities settlement houses.
on.ft.com/1XK6AHz

JPMorgan Quietly Tests ”Blockchain” With 2,200 Clients
NASDAQ
J.P. Morgan Chase & Co. is quietly testing technology that underpins the digital currency bitcoin on U.S. dollar transfers between London and Tokyo, part of an effort to boost its spending to deal with emerging threats from Silicon Valley.
The nation’s largest bank has been testing the program in recent months to move U.S. dollars for about 2,200 clients between the two financial centers using a version of the “blockchain” technology that underpins bitcoin, said Daniel Pinto, head of J.P. Morgan’s corporate and investment bank. The bank wants to see whether the blockchain technology, known as the “distributed ledger,” can be repurposed for currency clearing and settlement to give clients faster turnaround times and reduce the bank’s risk.
goo.gl/2qhvXX

Frontloading starts under EMIR
Global Investor Magazine
Major swaps dealers began the controversial concept of ‘frontloading’ this week, a unique requirement to Europe’s approach of migrating derivatives trades from bilateral to central clearing.
goo.gl/LR6jGs

CFTC Staff Clarifies Registration Relief Available to Non-US Asset Managers
The National Law Review
No-action relief confirms that non-US asset managers may rely on an exemption from CFTC registration when trading uncleared swaps in the United States for the accounts of their non-US clients, an issue that had been in doubt following Dodd-Frank’s enactment.
goo.gl/O0iSNU

Indexes & Products

Open Interest for Options on MSCI Emerging Markets Index (MXEF) Grows to 6,229 Contracts
CBOE Options Hub
Open interest for options on the MSCI Emerging Markets Index (MXEF) recently rose above 6,200 contacts for the first time. Over the past month the MXEF options open interest grew from 98 to 6,229 contracts.
goo.gl/pUluiz

Good Times for Exchange-Traded Funds
The New York Times
Exchange-traded funds account for as much as a third of all publicly traded stocks. Or think of it this way: An E.T.F. that tracks a basket of hard-to-trade emerging-market stocks or high-yield bonds will, on any day, attract more buy and sell orders than a bellwether like Microsoft or General Electric.
nyti.ms/1QyC8R6

Millennials Are Using One of the Riskiest ETFs to Speculate on Oil
Bloomberg Business
Perhaps millennials should just stick to investing in index funds—or at least the exchange-traded funds that their robo-advisers put them in. According to research from online brokerage TD Ameritrade Holding Corporation, one particularly risky ETF is attracting the millennial demographic far more than other age groups. In fact, it was one of the top 10 stocks traded by millennials in 2015.
bloom.bg/20QZ6m7

Mutual Funds approach Sebi with 16 new fund offers; Retirement, fixed maturity plan (FMP) and equity are some of the themes that for which mutual fund houses have filed applications
Business Standard
To tap the growing demand from retail investors, mutual fund houses have filed draft papers with market regulator Sebi to launch 16 New Fund Offers.
goo.gl/zowV3E

Technology

Nasdaq and Digital Reasoning Establish Exclusive Alliance to Deliver Holistic Next Generation Surveillance and Monitoring Technology
Nasdaq
Nasdaq and Digital Reasoning, a leader in cognitive computing, have announced a strategic alliance to offer next generation, holistic surveillance technology to the global capital markets, including the buy-side, brokers, regulators and exchanges. Digital Reasoning’s eComms monitoring for proactive compliance and Nasdaq’s industry leading and award-winning SMARTS Surveillance solutions will deliver a unified approach through the integration of trade surveillance alerts with natural language processing and machine intelligence-based technology all within a single interface. In addition, Nasdaq has participated in Digital Reasoning’s Series D investment round.
goo.gl/Xs3LVJ

For Apple, the Moral High Ground Lacks Clearly Defined Boundaries
The New York Times
What does it mean to be a good corporate citizen? That’s one of the questions being tested as Apple and the federal government battle over whether Apple should help the Federal Bureau of Investigation unlock an iPhone to gain access to encrypted data that officials say is necessary for their investigation of the San Bernardino, Calif., shootings that killed 14 people.
nyti.ms/1QyDIlU

TABB Group Identifies the Challenges Facing Blockchain In Disrupting The Status Quo
Mondovisione
While the idea of moving to real-time settlement is especially intriguing, firms must first understand the industry’s fears before re-engineering the current processes. In TABB Group’s latest research, “Blockchain Clearing and Settlement: Crossing the Chasm,” TABB CEO Larry Tabb explains that details over informational leakage, how the securities lending and foreign exchange markets operate, as well as what actually occurs in the clearing process today, must be addressed before the industry begins restructuring firms’ processing facilities with blockchain technology.
bit.ly/1QyHmfL

Enforcement

CFTC Charges Florida-Based North American Asset Management, LLC, Alexi Bethel, and Steven Labadie with Engaging in Illegal, Off-Exchange Precious Metals Transactions
CFTC
According to the CFTC Complaint, from at least March 2012, and continuing through at least March 2013, NAAM, by and through its employees, including Bethel and Labadie, solicited retail customers by telephone to engage in leveraged, margined, or financed precious metals transactions. During that period, NAAM collected $2,565,272 from at least 66 of its customers with precious metals transactions and of this amount received commissions and fees totaling $648,759.60. The Complaint also alleges that NAAM accepted customer orders and funds, and therefore acted as a Futures Commission Merchant (FCM), but failed to register with the CFTC as an FCM, as required.
1.usa.gov/1oxCpHg

WH Ireland fined £1.2m by the FCA for market abuse failures
John Murray Brown – FT
Stockbroker and wealth manager WH Ireland has been fined £1.2m by the Financial Conduct Authority after an investigation into breaches of the rules on risk management and oversight of the business.
goo.gl/gdy2I9

Environmental & Energy

Oil supply glut to last into 2017, warns IEA
FT.com
The global supply glut that has battered the budgets of big oil-producing nations and forced energy companies to slash billions dollars of investment will continue into 2017 as ballooning stocks prevent a recovery in prices, the world’s leading energy forecaster has warned.
on.ft.com/1QyCiYR

Seas Are Rising at Fastest Rate in Last 28 Centuries
The New York Times
The worsening of tidal flooding in American coastal communities is largely a consequence of greenhouse gases from human activity, and the problem will grow far worse in coming decades, scientists reported Monday. Those emissions, largely from the burning of fossil fuels, are causing the ocean to rise at the fastest rate since at least the founding of ancient Rome, the scientists said. They added that in the absence of human emissions, the ocean surface would be rising less rapidly and might even be falling.
nyti.ms/1QyEUpp

Bill Gates Q&A on Climate Change: ‘We Need a Miracle’
Ashlee Vance – Bloomberg
The Microsoft co-founder and philanthropist penned a letter with his wife about why children are our energy future.
All we need is an energy miracle. No pressure, kids. So came the call from Bill Gates on Monday evening with the release of his annual letter. It tackles heady subjects with the billionaire’s usual optimistically sober tone. Unlike letters past, Gates aimed this year’s missive at teenagers instead of adults, arguing they’re our best shot at solving the world’s energy crisis.
goo.gl/ZCCNmK

The Trickle of U.S. Oil Exports Is Already Shifting Global Power
Joe Carroll, Harry Weber – Bloomberg
After 40 years on sidelines, U.S. crude oil sails the seas; Saudis and Russians stand to be losers from end of export ban
The sea stretched toward the horizon last New Year’s Eve as the Theo T, a red-and-white tug at her side, slipped quietly beneath the Corpus Christi Harbor Bridge in Texas. Few Americans knew she was sailing into history.
goo.gl/itQ51y

Asia-Pacific

Chinese investors welcome new regulator, await new regulations
BY PETE SWEENEY AND RYAN WOO – Reuters
China’s new securities regulator Liu Shiyu, a former central banker, has a tough job on his hands – not least managing a huge weight of expectation from millions of small investors smarting from a recent stock market collapse.
goo.gl/Wie1pu

Xi Jinping’s News Alert: Chinese Media Must Serve the Party
By EDWARD WONG – NY Times
The Chinese news media covered President Xi Jinping’s most recent public appearances with adulation befitting a demigod. Front-page headlines across the nation trumpeted Mr. Xi’s visits to the headquarters of the three main Communist Party and state news organizations on Friday. Photographs showed fawning journalists crowding around Mr. Xi, who sat at an anchor’s desk at the state television network. One media official wrote the president an adoring poem. The blanket coverage reflected the brazen and far-reaching media policy announced by Mr. Xi on his choreographed tour: The Chinese news media exists to serve as a propaganda tool for the Communist Party, and it must pledge its fealty to Mr. Xi.
goo.gl/9zcLLS

Hong Kong’s budget problem: Big surplus, unhappy people
MarketWatch
Hong Kong has more riding on its budget than usual this Wednesday, with just about everyone having something to complain about.
In recent years Financial Secretary John Tsang has made a habit of presiding over a series of unexpected bumper fiscal surpluses, while at the same time warning of gloom to come. This year should be no different when, for the ninth time, there will be an “unexpected” surplus in the region of HK$80 billon, yet he may finally be on the mark with his doom-laden predictions.
on.mktw.net/1KGJ8ZV

China names new securities regulator head after $US5 trillion stock exchange rout
Financial Review
The new head of China’s securities regulator has been tasked with restoring confidence after policy missteps by his predecessor rattled investors and helped deepen a $US5 trillion ($6.9 trillion) rout.
goo.gl/eKYGdc

Frontier Markets

African assets fall out of favour as investors reassess risk
BDlive
Investors are yanking their cash from African assets, until recently a popular play for the adventurous, as a toxic confluence of factors overhangs the continent.
Crashing commodity prices, a Chinese slowdown and a string of policy failures are forcing investors to reassess the risk of investing in Africa after years of optimism about its growth prospects.
goo.gl/fcYcGD

Emerging market shares show signs of capitulation – GMO’s Divecha
Reuters
Emerging market shares are showing signs of investor capitulation after some of the steepest declines in the global stock market sell-off and that should make them attractive over the long run, said Arjun Divecha, who manages $7.4 billion as head of GMO’s emerging markets equity division.
reut.rs/1KGIVGd

How Technology Could Unwind a Decade-Long Trend in Global Trade
Bloomberg
Two of the biggest forces influencing global economic activity over the past three decades—globalization and automation—have had polar-opposite effects on workers in emerging markets.
The former pushed multinationals to move production to countries with cheaper labor costs than advanced economies, while the latter effectively substitutes capital for labor in the production process.
bloom.bg/1KGJ1h3

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