This week the entire office, except for Jeff Bergstrom and me, are down in balmy Boca Raton, Florida, for the 39th annual Futures Industry Conference. They will be conducting interviews, making videos, attending panels and hobnobbing with industry execs by the pool. The agenda includes The Financial Times’ Gillian Tett moderating a panel of international exchange CEOs, a keynote address by CFTC Chairman Mark Wetjen, and a lunch with keynote speaker Ted Koppel, whom I had the pleasure and luck to interview several years ago and who is a terrific speaker and a complete gentleman. Jeff and I will be holding down the fort in breezy Chicago. Since nearly everyone in the industry is down in Boca, it will be just us and a few tumbleweeds. If you are not attending the conference, feel free to drop by our offices to keep us from getting too lonely. –Sarah Rudolph
***JB: Since we are stuck in “breezy Chicago” I helpfully included a list of perks some companies provide in a story under “Miscellaneous” below. Just saying…
Duncan Niederauer, NYSE Euronext chief and ICE president
Arash Massoudi – FT.com
Duncan Niederauer learned that nothing lasts forever in financial markets when Goldman Sachs turned to him to figure out how to overhaul its trading business during the high-tech frenzy of the late 1990s.
***SR: At 55, Niederauer has had an amazing career and seen the end of an era for the New York Stock Exchange.
Global Debt Exceeds $100 Trillion as Governments Binge, BIS Says
John Glover – Bloomberg
The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record low interest rates, according to the Bank for International Settlements.
Soft touch FX regulation falls under harsh glare
In July 2006, during lunch at an upmarket restaurant overlooking the sprawling Smithfield meat market in the City of London, Bank of England officials and senior bank dealers discussed evidence of potential manipulation of the foreign exchange market. People at the lunch said the attempts to move the market meant the process of establishing official prices – known as “fixing” – was becoming “increasingly fraught”.
***SR: Voluntary codes of conduct do not always work well when huge amounts of money are involved.
SEC Said to Probe Whether Forex Rigging Distorted Options
Keri Geiger and Silla Brush – Bloomberg
The U.S. Securities and Exchange Commission is investigating whether currency traders at the world’s biggest banks distorted prices for options and exchange-traded funds by rigging benchmark foreign-exchange rates, according to two people with knowledge of the matter.
Carney Faces Leadership Test as Currency Scandal Snares BOE
Scott Hamilton – Bloomberg
Bank of England Governor Mark Carney will face his toughest public testimony to date as he seeks to defend the integrity of an institution that’s become embroiled in the currency-manipulation scandal.
Behind the $100 Billion Commodity Empire That Few Know
Andy Hoffman and Chanyaporn Chanjaroen – Bloomberg
In less than a decade, Marco Dunand and Daniel Jaeggi have turned a 10-person company supplying oil to a pair of Polish refineries into the world’s fourth-largest commodity trader with revenue topping $100 billion last year.
***SR: A little-known energy company is coming up fast.
Bitcoin story makes Newsweek the headline
Matthew Garrahan in Los Angeles – FT.com
On paper, it looked like the story of the year. Newsweek, it appeared, had identified the founder of Bitcoin. The bombshell 4,500-word article adorned the first new cover of an 81-year-old magazine which had disappeared from newsstands in 2012 only to be revived as a print product this week by its new owner, IBT Media. There was just one problem: the relaunched Newsweek may have identified the wrong man.
MarketsWiki Page of the Day
Robert D. Ray
MarketsWiki Recent Updates
Companies, Organizations and Groups
47,522,423 pages viewed, 7,845 articles, 180,365 edits
Green light for Thomson Reuters rates data arm
Philip Stafford – FT.com
Thomson Reuters has won UK regulatory approval for a new subsidiary responsible for oversight of the data company’s role in compiling financial benchmarks, such as the scandal-hit Libor.
Bank of England to hold independent inquiry into FX fixing claims: report
The Bank of England may appoint a judge, academic or senior financial industry executive to run an independent inquiry into its actions in relation to allegations it allowed manipulation of the foreign exchange market, the Sunday Telegraph reported.
Forex probes set to dwarf Libor cases
Daniel Schäfer and Sam Fleming – FT.com
The global probe into possible price rigging in foreign exchange markets has spawned a new industry centred on investigating the £5.3tn a day sector as regulators and global banks throw enormous resources at shedding light on the allegations.
EU aims for deal on tackling failing banks next week
European Union governments and parliamentarians will try to reach a compromise this week on how to wind down failing banks, in marathon talks intended to settle who decides to close banks and who picks up the bill.
SEC probes alleged fraud at fast trader Infinium: SEC letter
The Securities and Exchange Commission has launched an inquiry into whether high-speed trader Infinium Capital Management violated federal securities laws, according to a SEC letter obtained by Reuters.
London Financial Vacancies Up 11% Last Month, Survey Says
Ambereen Choudhury – Bloomberg
Job vacancies at London’s financial-services companies rose 11 percent last month as firms hired temporary workers and staff to manage risk, according to a recruitment firm’s survey.
Buffett Move Shows Currency Dip Won’t Fix Canadian Plants
Theophilos Argitis, Gerrit De Vynck and Ilan Kolet – Bloomberg
Derek Friesen thought he would be following in his father’s footsteps when he became the third generation of his family to work at H.J. Heinz Co.’s tomato processing plant in his hometown of Leamington, Ontario.
Lawsky to step up assault on Wall Street’s corporate wrongdoing
Kara Scannell in New York – FT.com
Benjamin Lawsky, New York’s aggressive banking regulator who is campaigning to clean up Wall Street, is turning his sights on the individuals as well as the institutions who squeeze struggling homeowners or help banks violate US sanctions.
Bitcoin founder’s writing matches nothing in Dorian Nakamoto’s background
Karl Smith | FT Alphaville
We’ve already mentioned Felix Salmon’s thoughtful critique of the Newsweek cover story by Leah McGrath Goodman, but there’s one point we want to elaborate on.
Studies reveal role of donations in shaping US regulation
Alexander Campbell – Risk Magazine
Analysis of voting patterns on two recent financial regulatory bills in the US House of Representatives shows the crucial role played by campaign contributions from large banks to influential politicians in determining the shape of the US regulatory landscape. Two studies discussed at a conference held by the London School of Economics’ Systemic Risk Group last week show links between congressmen who received cash from the financial sector and proposals to water down the Dodd-Frank Act’s restrictions on derivatives trading, and to resist moves to audit the Federal Reserve Board.
***JB: Surprising no one.
European Banking Authority Consults On Draft Technical Standards On Data Waiver
Exchanges & Trading Facilities
BM&FBOVESPA Publishes February Market Performance
In February 2014 the equities market’s (BOVESPA segment) financial volume totaled BRL 131.54 billion against BRL 136.95 billion in January. Daily average was BRL 6.57 billion against BRL 6.22 billion in the previous month. Total number of trades in February was 17,943,360 against 17,612,258 in January. Daily average number of trades was 897,168 against 800,557 in January.
Global Media Company, Discovery Communications Lists €300m Corporate Bond On The Irish Stock Exchange
TOM MTF Statistics Week 10, 2014
OneChicago Holiday Notice – April Expiration On Thursday, April 17, 2014
Euronext celebrates International Women’s Day
Hedge Funds & Managed Futures
A Deeper Conversation on Women in Hedge Funds
WHITNEY TILSON – NYTimes.com
Dozens of people responded to my recent column on Evaluating the Dearth of Female Hedge Fund Managers with thoughtful comments on why the problem exists and some ideas to address it.
Conflicting claims worry Pimco investors
Pimco investors have expressed concern about the latest outbreak of acrimony in the world’s biggest bond house’s management suite after Bill Gross, its co-founder, said his departing chief executive was seeking to “undermine” him.
El-Erian Exit Is Pimco Distraction as Gross Saves Legacy
Alexis Leondis – Bloomberg
Bill Gross, in an investment outlook in April entitled “Man in the Mirror,” questioned whether he was truly a great investor as he pondered his legacy in a new era of shrinking bond returns.
Gold Most Bullish Since 2012 as Goldman Sees Slump: Commodities
Elizabeth Campbell, Megan Durisin and Debarati Roy – Bloomberg
Gold is getting more attractive to hedge-fund managers even as Goldman Sachs Group Inc. says the metal’s surprising rally this year will soon fizzle.
Hedge funds and other speculators expanded bets on higher prices for a fourth week in New York futures and are now the most bullish since December 2012, government data show.
High-yield bonds draw investors as emerging debt loses them
Carolyn Cohn – Reuters
Shove over, emerging markets – high-yield debt has taken your place.
Emerging-market bonds, star performers just a year ago, are being replaced by high-yielding corporate debt from developed markets by investors searching for yield.
Head of Retail Investing Departs K.K.R.
WILLIAM ALDEN – NYTimes.com
Michael M. Calbert, a 14-year veteran of Kohlberg Kravis Roberts who led the team that invests in the retail industry, has left the private equity giant, a spokeswoman said on Friday.
Fidelity promotes Prior to head $750 bln fixed-income unit
Fidelity Investments on Friday named Nancy Prior as president of its fixed-income unit, with more than $750 billion in assets, continuing to boost the power of insiders.
Incredible Shrinking Management Fee
Jason Zweig – MoneyBeat – WSJ
Professional portfolio management has long cost too much. If a new company has its way, it could be free. This past week, WiseBanyan, an online-only investment adviser, publicly launched a service that builds and manages diversified portfolios of exchange-traded funds for nothing.
Funds of funds look to separate account model
Ben Harrington – Financial News
A growing number of private equity fund of funds managers are setting up separate accounts for clients as it become increasingly harder for them to raise new money, according to new research from data provider Preqin.
Paulson, Ackman Among Hedge-Fund Managers to Beat S&P In February
Rob Copeland – MoneyBeat – WSJ
Several high-profile hedge fund managers posted big gains in February, even as the broader industry trailed a strong month for stocks.
T Rowe reviews total return strategies
Joe McGrath – Financial News
T Rowe Price is assessing the opportunities for new fixed income total return strategies, with Arif Husain, the recently appointed head of international fixed income, heading up the review.
CFTC Commitments Of Traders Reports Update
Banks & Brokers
Big banks face up to €10bn in legal costs
Daniel Schäfer and Sam Fleming in London – FT.com
Five of Europe’s largest lenders face up to another €10bn in litigation costs in the next two years due to alleged foreign exchange manipulation and other legal issues, underscoring how past misbehaviour continues to drag down profits.
Credit Agricole FX head no longer working at bank-sources
Credit Agricole’s global head of foreign exchange Vincent Leclercq is no longer working at the bank, two sources familiar with the matter told Reuters on Friday.
Behind Barclays’ About-Face on Bonuses
Antony P. Jenkins, the chief executive of the British bank, made some startling remarks this week about compensation at its investment bank, which has had a big presence on Wall Street since it acquired Lehman Brothers’ remains in 2008.
JP Morgan Chase’s sale of private equity arm stalls
The auction of JP Morgan Chase’s private equity business, One Equity Partners, in the market since at least November, has hit an impasse, according to three people with knowledge of the situation.
Deutsche Bank denies it knew of forex woes since 2006
Deutsche Bank denied a German newspaper report on Friday that claimed a senior bank official knew of alleged currency market manipulation efforts as far back as 2006.
Goldman Sachs partners reduce stake in company
Partners in Goldman Sachs Group Inc exercised options and sold shares in February, cutting their stake in the company from 11 percent to 10.2 percent, according to a company disclosure.
Goldman Sachs Partners Reap $175 Million From ’08 Options
Michael J. Moore – Bloomberg
Goldman Sachs Group Inc. (GS) partners exercised more than 4 million options that were awarded at the end of 2008, reaping $175 million while cutting their ownership of the firm in recent weeks.
***JB: Seems the financial crisis was very good to them.
Clearing & Settlement
CME Group Clearing: NYMEX Options Expiration Operational Procedures for the Trading Floor and Clearing Members (GX) Effective Monday, March 10, 2014
Indexes & Products
Russell Said to Lure Blackstone to Bain for $3 Billion Sale
Matthew Monks, Matthew Leising and David Carey – Bloomberg
Russell Investments, the indexing and fund-management unit of Northwestern Mutual Life Insurance Co., is drawing takeover interest from suitors including Blackstone Group LP (BX) and Bain Capital LLC as Goldman Sachs Group Inc. solicits bids for the firm, people with knowledge of the matter said.
Vanguard seeks SEC permission to issue actively managed ETFs
Vanguard Group, the No. 1 U.S. mutual fund company, on Friday took a step towards offering exchange-traded fund versions of dozens of its well-known actively managed mutual funds.
CESC Replaces Schneider Electric Infrastructure In The Constituents Of FTSE IDFC India Infrastructure 30 Index – Following 2014 Semi-Annual Review
Euronext first exchange to start ETF NAV Trading
Euronext, a wholly owned subsidiary of IntercontinentalExchange Group (NYSE: ICE), today announced that it is the first exchange to trade ETFs on the NAV Trading Facility. This initiative will open up the ETF market to a broader investor base by offering a regulated on-exchange forward pricing solution for order execution at Net Asset Value (NAV). ABN Amro Basic Funds N.V. is the first firm to benefit from the platform by launching its first ETFs— AABF ETF ES50 and AABF ETF AEX on February 6th 2014.
OptionsCity Software’s Metro 5.0 Powers Traders into Global Markets
OptionsCity Software, a global provider of electronic trading solutions for professional futures and options traders, today announced the release of Metro 5.0, a major update to its flagship trading and market-making platform. Metro 5.0 contains functionality and enhancements that allow traders and brokers to manage global risk and efficiently navigate electronic markets.
Fidessa Preps BMV Feed, Further LatAm Growth
Faye Kilburn – WatersTechnology
Trading technology and market data vendor Fidessa is integrating a new market data feed from the national stock exchange of Mexico, Bolsa Mexicana de Valores (BMV), into its trading platform, as part of ongoing plans to expand its coverage in Latin America.
Fixnetix Co-Founder Moore Becomes Non-Exec
Faye Kilburn – WatersTechnology
Alasdair Moore, a co-founder of UK-based low-latency data and trading infrastructure provider Fixnetix is stepping down from his executive role as business development director at the vendor and will take up a new non-executive position on Fixnetix’s board of directors.
Former Jefferies Trader Found Guilty of Fraud
SYDNEY EMBER – NYTimes.com
A federal jury on Friday found Jesse C. Litvak, a former senior trader at the Jefferies Group, guilty of deceiving his customers about the prices of mortgage-backed securities he sold to them after the financial crisis.
Whistle-Blower Gets $63.9 Million as a Result of JPMorgan Settlement
RACHEL ABRAMS – NYTimes.com
A Louisiana man who helped federal prosecutors make their case against JPMorgan Chase’s mortgage lending practices has earned $63.9 million for his efforts.
Bitcoin Charges Against Miami Man May Proceed, Judge Says
Susannah Nesmith – Bloomberg
A Florida man can be charged with money laundering in a case involving the use of Bitcoins, a judge ruled, rejecting a defense claim that he did nothing illegal because the online currency isn’t money.
***JB: I am told repeatedly around here that Bitcoin is *not* a currency. Guess it is a currency when it suits the powers that be. This also goes to show that despite a pervasive belief that bitcoin is shadowy (it certainly can be) it is not all that hard for law enforcement to bust people using it to skirt the law.
Environmental & Energy
An Energy Weapon vs. Russia?
Michael Levi – Council on Foreign Relations
As the standoff between Russia and Ukraine drags on, there are increasing calls to use U.S. oil and gas exports to weaken Vladimir Putin’s hand. There’s something to this, but it’s likely to be a lot less powerful than most pundits seem to think.
***JK – Nice analysis of how the real world works, compared to the political ferryland.
White House downplays role of natural gas policy in Ukraine crisis
The White House on Friday appeared to downplay the possibility of changing U.S. policy on exporting natural gas to address the situation in Ukraine.
EEX: March Starts With High Volumes In Italian Power Futures
HKEx: Prepared for Greater RMB Volatility
The Renminbi (RMB) has been making headlines in recent days because of its decline relative to the US dollar. In fact, the RMB has fallen the most since new foreign exchange rate policies were introduced in 2005, plummeting 1.4 per cent in only three weeks.
Non Jordanian Investment At The Amman Stock Exchange During February 2014
Nigerian Stock Exchange Stock Market Report For March 07, 2014
MCX Weekly Market Report – February 28, 2014 – March 06, 2014
Bigger pig pens create challenges for farmers
M.L. JOHNSON – AP
The big pens and electronic feeding systems at Fair Oaks Farms in Indiana could be the future of the pork industry as consumers pressure farmers to move pregnant pigs out of individual stalls too narrow for the animals to turn around. The switch from gestation stalls is not as simple as many consumers believe, however. It’s expensive, there are debates over pen designs and it takes time to train pigs to use feeders and other equipment. In short, farmers are spending millions of dollars with no certainty yet that the changes are best for the animals.
***SR: See the below story for their ultimate fate.
Wake up and smell the bacon … with a bacon app
Want to wake up to the sound of bacon sizzling on the stove with its aroma drawing you out of bed?
There’s an app for that.
The Five Most Outrageous Company Perks in the World [Video]
In the battle for top talent… Who cares about competitive pay and good health benefits? More companies are luring workers with outrageous perks. In Bloomberg’s Ranx, we go beyond the paycheck.
***JB: Some of these seem sensible to me. Others are just awesome. Hope my boss sees this and takes note (hint hint).