First Read

Goodbye SFOA, Hello ICDA
Jim Kharouf – JLN

Adapt or die is a well understood maxim in this industry. And so that’s been embraced by Dan Day-Robinson, the chairman and change merchant for the new International Commodities and Derivatives Association. It was and probably will be better known for some time as the former Swiss Futures & Options Association.

I first started attending the SFOA’s big conference in 1998, when the SFOA Burgenstock conference was really something not to be missed. Located atop a classic resort overlooking Lake Lucerne, it was an event attended by the CEOs of every major exchange and global firm. The venue was not only breathtaking but it was, in it own way, a rather sequestered group of professionals who made the futures world turn. This was our Davos.

But much has changed since. Exchanges eventually went public, which made such a trip more of a hassle than a can’t-miss meeting. The Futures & Options Association’s London event, known as International Derivatives Expo, IDX, gained more traction in June and the Futures Industry Association added the FIA Asia conference in December. Eventually, everyone you wanted to see could be found in London in June, at FIA Chicago in October/November or in Asia in December. SFOA got squeezed. It also got some lousy advice and questionable sponsors over the years, as it struggled to remain relevant.

But this is all a short history lesson. What is relevant now is that Day-Robinson has pushed the association into a new direction – commodities. It has the backing of some major market participants from Nasdaq, ICE and SIX to Goldman Sachs, BNP Paribas and Timber Hill, among others. There is no so-called “Burgenstock Conference” which hasn’t actually be held there for years, on the calendar. Those days are history. It’s time to look at the commodities markets with a new association, under new leadership that is actively trying to address the issues of today and tomorrow. And timing doesn’t hurt either. Given the wild ride commodities have taken, particularly energies along with the growing number of commodities markets globally, ICDA may be needed now more than ever.


SFOA changes name to International Commodities and Derivatives Association
ICDA (Formerly SFOA)
The change has been made to support the latest requirements of the Association’s members, who include global brokers, bankers, investment fund managers, commodities trading firms, market information providers and service companies, as well as exchanges and clearing houses. From now, ICDA is also accepting individual members for the first time in its long history.

***DA: Dan Day-Robinson, ICDA CEO, dropped a hint of this change during his presentation at last fall’s MarketsWiki Education event in London, where he gave among the most spirited, dynamic talks ever. In case you missed it when we ran it a couple weeks ago, have a look.


Dan Day-Robinson, Chairman, Swiss Futures and Options Association – Embracing Change

“…While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do. – Rob Siltanen, the creative genius behind Apple’s “Think Different” campaign”

Dan Day-Robinson will be the first to tell you he has a flair for the dramatic. As a former market maker, investment banker and now head of a trade association, he has hundreds of stories, and he knows how to tell them. He takes us on a rollicking tour through his years in the financial world, including his most recent charge as head of the Swiss Futures and Options Association. He lays out the history of the SFOA, a group that was once much more prominent than it is today, and explains his vision for its future.

Will you see him as one of the crazy ones, or will you see genius?

Watch the video »

WFE Full Year Statistics Show 2015 global equity trading volumes rise 55% as volatility boosts activity
World Exchange News
The World Federation of Exchanges has today published its Market Highlights Report for the first semester of 2015.Total value of share trading rose 41% in 2015 and the number of trades 55% from 2014, according to WFE’s full-year statistics. The increases were driven predominantly by trading activity in the Asia-Pacific region, particularly mainland China. Despite the significant volatility witnessed through the year, Asia-Pacific markets still managed to end the year up 10% in terms of market capitalization compared to the end of 2014.

***DA: A reminder of two things – volatility equals volume, and the fact that market caps are, overall, still higher than a year ago despite the mega-meltdown, demonstrates just how much froth had been pumped into Asian markets.


Education ‘key to entrepreneurial mindset’
Sky news
In his first interview since becoming Australia’s chief scientist Dr Alan Finkel says investment in education will help Australia move towards a more entrepreneurial mindset.

***** Is up the same here as downunder?


Bridging the Week by Gary DeWaal: January 25 – 29 and February 1, 2016 (Money Market Funds; Independent IBs; FERC Jurisdiction; Pre-Execution Communications)
Gary DeWaal, Katten Muchin Rosenman LLP
Last week, one bank was successful in having a lawsuit against it dismissed alleging that it contributed to the demise of a futures commission merchant by prompting the FCM to invest customer funds in an ineligible investment. Also, the US Supreme Court upheld the authority of the Federal Energy Regulatory Commission to enact a regulation that encouraged wholesale market operators to pay electricity consumers not to use electricity during peak times. The Court held that, although these transactions impacted retail sales, they were not prohibited retail transactions within states’ exclusive authority.


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Friday’s Top Three
The story receiving the highest click count friday was the Reuters story College Kids Are Now High Frequency Trading From Dorm Rooms, edging out the number two story, also from Reuters, New York Times’ editorial board calls for financial trading tax. Third place went to a press release from ICE on changes to equity market structure at NYSE during periods of extreme volatility. To be fair, since we ran several stories on the financial transaction tax, and each received dozens of clicks, the FTT story line is Friday’s overall winner.

Lead Stories

IEX Debate Escalates With Public Knock to NYSE’s Systems
Annie Massa – Bloomberg
IEX posts letter saying NYSE has a `speed bump’ of its own; Referencing `Seinfeld,’ NYSE pushed SEC not to approve IEX
IEX Group Inc., seeking U.S. approval to operate a new stock exchange, is dragging one of its potential competitors into the increasingly heated debate.

A NYSE Speed Bump You Weren’t Aware Of
by Don Bollerman, IEX co-founder and Head of Markets & Sales, former Managing Director at Nasdaq via
IEX is applying to become a registered stock exchange and we find ourselves at the center of a fierce debate over what is, and is not, permissible in the operation of a U.S. stock exchange. The heart of the issue is the IEX “Speed Bump,” a coil of fiber optic cable that slows our market down by 350 microseconds, which is one one-thousandth of the time it takes to blink your eye.

CME Takes Action to Curb Price Volatility in Cattle Futures
Lydia Mulvany, Bloomberg Business
CME Group Inc., responding to criticism over price volatility in the cattle futures market, announced measures to help curb price swings while denying that high-frequency traders are to blame.
Cattle futures will be added to an existing CME system that caps how many order updates traders can send in relation to the number of trades they actually execute. The change starts Monday, Chairman Terry Duffy said at a conference organized by the National Cattlemen’s Beef Association in San Diego. The Chicago-based bourse, the world’s largest futures market, is also examining five-to-six-second trading delays that would act as circuit-breakers.

Millennials Are Starting to Change the Stock Market
Sofia Horta E Costa – Bloomberg
Travel and leisure shares outperforming traditional retailers; Experiences trump stuff for generation born between 1980-2000
Alistair Owen pours most of his paycheck into what he calls a travel-and-lifestyle fund. “I’m not saving up to buy anything,” said the 28-year-old engineer, who shares a rented apartment with two flatmates in south London. “I prefer to go out for dinner at a nice place, pay a round at the pub or explore a new area of the world. I feel like I would be losing out on living if I chose to own stuff instead.”

BofA: The Oil Crash Is Kicking Off One of the Largest Wealth Transfers In Human History; A $3 trillion shift.
Joe Weisenthal – Bloomberg
Economists are still hotly debating whether the oil crash has been a net positive for advanced economies. Optimists argue that cheap oil is a good thing for consumers and commodity-sensitive businesses, while pessimists point to the hit to energy-related investment and possible spillover into the financial system

Blythe Masters and JPMorgan trial blockchain project
Ben McLannahan in New York – FT
JPMorgan Chase has begun a trial project using blockchain as it seeks to lead banking-industry efforts to cut the cost and hassle of trading.

Currency War: U.S. Hedge Funds Mount New Attacks on China’s Yuan; Bets against the yuan by hedge funds come at a time of enormous sensitivity for Chinese leaders
Some of the biggest names in the hedge-fund industry are piling up bets against China’s currency, setting up a showdown between Wall Street and the leaders of the world’s second-largest economy.

China tightens money market regulation
Chris Flood – FT
Growth in China’s money market fund industry has been driven by high retail demand for online funds managed by internet companies such as Alibaba
Regulators in China are planning to impose tighter rules on the rapidly expanding money market fund industry — an industry that has transformed the way millions of Chinese invest their savings.

Are global markets losing faith in central banks?
By WILLIAM WATTS – MarketWatch
There’s never been a shortage of criticism—much of it wildly misplaced—when it comes to quantitative easing and other extraordinary measures launched by central banks in the wake of the financial crisis. But recent events have market watchers worrying that central bankers are starting to lose their ability to steer markets.

The heroes of ‘Flash Boys’ just went off on the New York Stock Exchange
Matt Turner – Business Insider
The war of words between upstart trading venue IEX and the New York Stock Exchange just went up a notch.

Congress directs CFTC to keep $8 billion swap dealer threshold rather than let it fall
Neil Roland, MLex
Congress passed non-binding instructions to the US Commodity Futures Trading Commission last month that it propose a rule maintaining the swap dealer threshold at $8 billion a year or higher, a spokeswoman told MLex.The congressional action adds momentum to a push for CFTC Chairman Timothy Massad to prevent the cutoff falling automatically to $3 billion.

Barclays and Credit Suisse to pay $154m over dark pools
Joe Rennison in New York – FT
Credit Suisse and Barclays have agreed to pay a record $154m to settle investigations by regulators into their share trading venues known as “dark pools”.

Seismic’ shock awaits bond liquidity
Madison Marriage and Attracta Mooney – FT
Fund managers have made a last-ditch attempt to convince European regulators to water down proposed trading rules designed to prevent a repeat of the market turmoil encountered during the financial crisis.

Trader exposes sexist horrors of the Wall Street ‘frat house’
By Maureen Callahan – NY Post
When Maureen Sherry resigned from Bear Stearns after 10 years, she was given a going-away party, a sizable check — and a nondisclosure agreement.

This is exactly how the FBI convinces hedge funders trading on inside information to spill the beans on everyone else
Julia La Roche – Business Insider
When the FBI wants to get a hedge fund portfolio manager to be a cooperating witness in an insider-trading case, they’ll literally follow that person everywhere, according to FBI Special Agent David Chaves.


SEC Announces Agenda for February 2 Meeting of the Equity Market Structure Advisory Committee
he Securities and Exchange Commission will hold the third meeting of the Equity Market Structure Advisory Committee on February 2, beginning at 9:30 a.m. EST. The Commission established the advisory committee to provide a formal mechanism through which the Commission can receive advice and recommendations on equity market structure issues. The meeting will focus on the events of August 24, 2015 and certain issues affecting customers in the current equity market structure.

Deloitte launches regulatory compliance service for asset managers; Precedes introduction of MiFID II
Daniel Flynn – Investment Week
Deloitte has launched a service to help investment managers, banks, and insurance firms comply with increasing levels of global marketing regulation and tax rules.

Global authorities agree derivatives trading identifiers should be linked
Neil Roland, MLex
Global standard-setters informally agree that identification tags for derivatives traders, transactions and products should all be linked together, one of those authorities told MLex.

Exchanges & Trading Facilities

Upstart IEX takes off gloves in fight with critics
By Kevin Dugan – NY Post
IEX, the two-year-old stock trading upstart founded by Brad Katsuyama of “Flash Boys” fame, has switched from playing defense to offense.

Flash Boys market sparks war of words on Wall Street; IEX wants to become a fully-fledged stock exchange, to the chagrin of rival markets
Marion Dakers – Telegraph
A war of words has broken out on Wall Street about a new stock exchange that aims to curb what it sees as unfair advantages granted to high-speed traders.

Face to face with Axel Vischer
Dr. Vischer, how long have you been with Eurex Exchange and what did you do before you joined our company?

DGCX Welcomes Zee Gold DMCC As Broker Member
The Dubai Gold & Commodities Exchange (DGCX) is pleased to welcome Zee Gold DMCC as a Broker Member of the Exchange. Zee Gold DMCC is a subsidiary of Shirpur Gold Refinery Limited and part of Essel Group, a leading global conglomerate.

BSE tweaks norms for classifying stocks in 3 new groups
The Hindu
The Bombay Stock Exchange will bring in changes to parameters for determining the classification of securities exclusively listed on its platform for three new sub-groups — XC, XD and XT — from February 1.

For Departing Nasdaq CFO Lee Shavel, Next Stop Is ITG Board
Annie Massa – Bloomberg
Latest leadership change at ITG in aftermath of dark pool fine; Shavel used to work as investment banker at Bank of America
Lee Shavel, whose plan to retire as Nasdaq Inc.’s chief financial officer was announced Thursday morning, has joined the board of Investment Technology Group Inc., a brokerage seeking to recover from a regulatory fine.

Qatar Stock Exchange Organizes Margin Trading Public Awareness Sessions
As part of the policy, aiming to promote knowledge and investment awareness among all investors, Qatar Stock Exchange (QSE) will be organizing a series of lectures on margin trading.

NCDEX takes action against four members in castor seed futures case; Places their trading terminals on square off mode, implying that no fresh trading would be allowed to them
Business Insider
After suspending futures trading in castor seeds, the NCDEX today placed the trading terminals of some of its members under square off mode. This means they can only square off their open position and no fresh trading would be allowed to them.


Singer, Griffin Give Combined $5 Million to Super-PAC Backing Rubio; Rubio also scored some Bush defectors.
William Allison – Bloomberg
Billionaire hedge fund managers Paul Singer and Kenneth Griffin each gave $2.5 million to a super-PAC supporting Marco Rubio’s run for the White House, bolstering the arsenal behind the U.S. Senator as the primary season begins.

Wall Street’s Donor Role Expands as Money Flows Into 2016 Election; Financial-services industry emerging as particularly key funding source for Republicans and Democrats, FEC reports show
Wall Street is emerging as a particularly dominant funding source for Republicans and Democrats in the presidential election, early campaign-finance reports filed with the Federal Election Commission show. The trend comes even as candidates seek to cast themselves as uniquely able to take on the bankers and investors who contributed to the economy’s collapse almost a decade ago.

Hedge Funds & Managed Futures

The Negative Side of Negative Rates
Lisa Abramowicz – Bloomberg Gadfly
Jan 29, 2016 1:09 PM CST Japan has a new plan to get its banks to lend more: Tax them for being too conservative with their cash

Corporate Murder Charge That Destroyed Company’s Stock Is Now in Doubt; California indicted AAC Holdings after one patient died. A coroner contends it was natural causes, but nobody asked him.
Paul Barrett – Bloomberg
AAC Holdings, a publicly traded chain of addiction treatment centers, saw its stock plummet last August after the company and its president were charged with second-degree murder in the death of a patient in California. Now AAC is asking for the case to be thrown out, citing a local coroner who appears to exonerate it.

Alan Howard Predicts ‘Exceptional’ Trading Opportunity
Nishant Kumar – Bloomberg
Slowdown may make it hard for central banks to support markets
Says divergent policy to `materially’ improve opportunities
Billionaire hedge fund manager Alan Howard says there will be “exceptional opportunities” to make money in 2016 because of divergent monetary policies and as four years of low market volatility comes to an end.

Opinion: It’s time to put your fear about this stock market to rest
By CHUCK JAFFE – MarketWatch
After a horrible January for the stock market, investors understandably are scared.

Sovereign wealth funds drive turbulent trading
Attracta Mooney – FT
Asset managers have blamed outflows from sovereign wealth funds for one of the worst starts to the year for markets. The collapse in the price of oil resulted in state-backed investment vehicles becoming “forced sellers”.

Time to Question Quasi-Sovereign Bonds’ True Nature; Bonds with implicit or explicit government backing are suddenly being looked at with new eyes
In emerging markets, quasi-sovereigns have looked a bit too sovereign in recent years. A more realistic assessment of the risks seems to be in motion.

‘Robo-advisers’ try to calm investor nerves
Ben McLannahan in New York – FT
The biggest “robo-advisers” are relying on old-school call centres and blog posts to calm anxious investors, trying to persuade them that there is no need to abandon the algorithms in times of heightened volatility.

Banks & Brokers

Several large bank stocks could rise 20 percent by year-end: Barron’s
The stock prices of several of America’s largest banks are poised to rise up to 20 percent in 2016 as valuations recover from an overreaction to turmoil in the energy markets, Barron’s said.

Case Sheds Light on Goldman’s Role as Lender in Short Sales
It would be easy to overlook the case against Goldman Sachs filed by the Securities and Exchange Commission on Jan. 14. It involved a complex piece of Wall Street plumbing, led to a minuscule $15 million fine and came on the same day that Goldman agreed to pay up to $5 billion to settle prosecutors’ claims that it sold faulty mortgage securities to investors.

Wall Street banks out to dominate European equities trade
By Tim Burke and Tim Cave – Financial News
Wall Street’s biggest investment banks are stepping up efforts to grow their European equities trading activities, having wrestled business from local rivals in 2015 to reach a record share of regional trading.

Julius Baer on takeover trail as U.S. tax case nears end; Underlying net profit 701 mln Sfr, misses poll estimate; Proposes raising div by 10 pct, aims for 40 pct payout ratio; Sees Swiss market consolidation, ready to pounce
By Michael Shields and Angelika Gruber – Reuters
Swiss private bank Julius Baer is again looking for acquisitions now that a final settlement of U.S. allegations that it helped rich Americans dodge tax is within reach.

Brokerage firm RCS Capital files for bankruptcy
RCS Capital Corp, a brokerage firm tied to real-estate investor Nicholas Schorsch, filed for Chapter 11 bankruptcy protection to reduce debt and as per the plan its key lenders will assume control of the company.

Clearing & Settlement

LCH.Clearnet receives recognition as a clearing house in Singapore by MAS
Firms subject to Singapore’s proposed clearing mandate will be able to meet their obligations by clearing at LCH.Clearnet; Underscores LCH.Clearnet’s continued commitment to the Singaporean market and broader Asia-Pacific region
LCH.Clearnet Ltd (“LCH.Clearnet”), the global clearing house, today announced that it has been formally granted the status of Recognised Clearing House by the Monetary Authority of Singapore (MAS). Recognition applies to LCH.Clearnet’s EnClear (Freight Division), ForexClear and SwapClear services.

The New Threat to Bank-to-Bank Lending
Katy Burne, Dow Jones Business News, via
A dispute over technology could pose a new threat to Wall Street’s plumbing by severing a link that allows big banks to borrow freely from one another, according to market participants.
A unit of Depository Trust & Clearing Corp., the dominant processor of repurchase agreements, or repos, between securities dealers, has told traders it will stop facilitating certain interbank repos as of July 15. The roadblock affects an estimated $45 billion in daily repo loans, short-term loans through which banks and other financial firms exchange cash and securities to raise funds for their trading activities.

B of A Readying Blockchain Patents: Report
American Banker
B of A had filed 15 blockchain patents as of December, Bessant said. They include a cryptocurrency wire transfer system and a cryptocurrency transaction payment system, according to the patent office’s website.

Indexes & Products

MSCI to exclude some Hong Kong stocks with highly concentrated ownership
MSCI will exclude from its global indices Hong Kong stocks that have been warned by the local regulator over their high concentration of shareholders, the benchmark provider said on Monday, in a blow to Hong Kong’s reputation as a financial centre. The new rules come amid growing investor concerns over market manipulation of Hong Kong stocks, which are often held by a small number of shareholders, following a series of unusual price movements last year.

Inclusion in World Index : Korea in a Bid to Join MSCI World Index
The Korean government has been in pursuit of inclusion in the MSCI World Index in order to cope with a higher volatility of the global financial market to follow the Fed’s interest rate hike. Countries in the Emerging Markets Index, such as Korea, Russia and Brazil, are considered to be more vulnerable to foreign capital outflow in the event of an emergency in the international financial market.

No new blockbuster device: Are Apple’s days as growth stock coming to an end?
ET Retail
Apple has been reclassified as a value stock before. FTSE Russell, which makes several closely followed stock indexes, found in 2013 that Apple no longer met its criteria to be treated purely as a growth stock. Some of the company’s enormous market capitalization was reallocated to the Russell Value Index, as well as being in the Russell Growth Index. A year later, when the company’s sales had risen strongly with the introduction of the iPhone 6, FTSE Russell placed Apple solely back in the growth index.

S&P Dow Jones Indices Market Attributes: Correlation & Dispersion
Press Release
Our January dashboard reports above-average dispersion and high or exceedingly high correlations in the majority of equity indices, globally. The historical chart of S&P 500 dispersion is suggestive of a more permanent change in regime from the compressed market performances that characterized the U.S. Federal Reserve’s zero-interest rate era. January’s 7.5% reading is the highest in four years. Cross-asset correlations remain slightly below average; cross-asset dispersions slightly above average.

Why January’s Commodity Performance Is Promising
Jodie Gunzberg – Indexology – S&P Dow Jones Indices
Considering commodities were on pace to set the worst January since 1975 at one point, down 14.3% by Jan. 20, the final monthly loss of just 5.2% is impressive. The S&P GSCI Total Return rebounded 10.6% with nine of the twenty four commodities posting gains for the month.
Does this mean commodities hit the bottom or that this is just a bounce in a much darker scenario? That probably depends on the oil supply decisions from Saudi Arabia, Russia and Iran, in addition to Chinese demand growth, the strength of the dollar and the weather. However, an examination of the historical annual performance of the S&P GSCI based on the direction of returns in January for single commodities and sectors gives hope that 2016 may be a positive year.


RHB goes live with Fidessa across Asia
Fidessa group plc (LSE: FDSA) today announced that RHB Investment Bank (RHB), a premier Malaysian bank, has implemented Fidessa as its strategic trading platform across Asia.

Optimus Futures Now Supports OptionsCity’s CityTrader, Offering Clients Unparalleled Access to Options on Futures
OptionsCity Software, a global provider of futures and options trading and analytics solutions, today announced that Optimus Futures now supports CityTrader, OptionsCity’s cloud-based trading platform. CityTrader provides active traders robust tools and functionality to trade both futures and options on futures.

Horizon Software to offer connectivity to Borsa Istanbul
Horizon is the leading provider of electronic trading and algorithmic technology to the world’s exchanges, banks, brokers and fund managers and provides advanced trade order routing and execution connectivity to more than 80 exchanges. This latest integration will give institutions high-performance connectivity directly to Borsa Istanbul Derivatives Market (VIOP) via Horizon.

The New Threat to Bank-to-Bank Lending; A technology rift could sever a link that enables repo loans
A dispute over technology could pose a new threat to Wall Street’s plumbing by severing a link that allows big banks to borrow freely from one another, according to market participants.


Barclays and Credit Suisse to Settle ‘Dark Pool’ Inquiries
Barclays and Credit Suisse will pay a combined $154.3 million to settle allegations that they misrepresented their private stock trading services. The systems, known as dark pools, are supposed to offer a haven to traditional traders and investors from predatory trading behavior.

Environmental & Energy

The Next Victim of 2015 Natural Gas Rout? Traders’ Bonus Checks
Kelly Gilblom, Rachel Morison – Bloomberg
EU bonuses seen falling to half the levels of five years ago; Desks now focusing on volatility amid broader price slump
Bonuses for trading power and natural gas in Europe and the U.S. aren’t what they used to be.

Government and green energy in court showdown over solar subsidies
Mark Leftly – Independent
The Government will clash with green energy companies at the Court of Appeal tomorrow about claims it acted unlawfully over the sudden, “cynical” ending of solar subsidies in 2014.

Is the party over for Clive Palmer?
Jamie Smyth in Sydney – FT
In November 2010, Clive Palmer donned a Santa hat and posed in front of photographers as he gave A$10m of Christmas bonuses, including 55 Mercedes cars, to staff at Townsville’s Yabula nickel refinery.


Big Bets on Japan Are Put to the Test; As central bank resorts to negative rates to spur stalling economy, fund managers who flocked to Tokyo shares say they’re standing pat
Some money managers who loaded up on Japanese stocks since the start of Abenomics aren’t backing off their bets despite the central bank’s unexpected move Friday to lower a key interest rate below zero.

BOJ Market Magician Kuroda Pulls Another Rabbit From His Hat
Enda Curran – Bloomberg
Shift to negative rates may spur banks to increase lending; Economists skeptical latest BOJ gambit can revive Japan
The Bank of Japan continues to push the boundaries of monetary policy.

The Battle for the Yuan: How China’s Big Mama Hurt Speculators
Bloomberg News
PBOC tackled yuan speculators over December and January; Officials warn that short bets on the yuan will fail
Chinese officials are using military analogies to describe the People’s Bank of China’s bruising attack on speculators who were betting against the nation’s currency.

China equities absorb third of all global trade
Philip Stafford – FT
Share trading by retail investors in mainland China during last year’s stock market bubble was so great it accounted for more than a third of the total amount of equities traded globally.

Negative Rates Worsen Headache for Cash-Rich Japanese Banks; Banks may be forced to make riskier investments in negative-rate environment as loan growth falters
Japanese bank shares fell sharply on Monday despite a rise in the overall market, a reflection of how the Bank of Japan’s move to negative interest rates puts the nation’s commercial bankers in a tough spot.

China Calls Lending Platform Ezubo a $7.6 Billion Ponzi Scheme; Officials arrest 21 suspects linked to Ezubo and its parent on charges including illegally soliciting funds from the public and fraud
Chinese authorities accused an online financing platform of bilking mostly small investors of more than 50 billion yuan ($7.6 billion) through a Ponzi scheme—the latest allegation of fraud against a loosely regulated part of China’s financial-products market.

Arrests in China over $7.6bn Ponzi scheme
Tom Mitchell in Beijing – FT
Chinese police have arrested more than 20 people associated with “a complete Ponzi scheme” that allegedly took more than Rmb50bn ($7.6bn) from investors, according to the official Xinhua news agency.

Nearly one million investors may have been fleeced in China’s latest Ponzi scheme
Richard Macauleyn- Quartz
Twenty one executives from China’s largest peer-to-peer money lending platform have been arrested, on suspicion of fleecing investors of 50 billion yuan ($7.6 billion).

Frontier Markets

Are global markets losing faith in central banks?
By WILLIAM WATTS – MarketWatch
There’s never been a shortage of criticism—much of it wildly misplaced—when it comes to quantitative easing and other extraordinary measures launched by central banks in the wake of the financial crisis. But recent events have market watchers worrying that central bankers are starting to lose their ability to steer markets.

Battered by War, Iraq Now Faces Calamity From Dropping Oil Prices
Iraqis seeking to withdraw money from banks are told there is not enough cash. Hospitals in Baghdad are falling back to the deprivation of the 1990s sanctions era, resterilizing, over and over, needles and other medical products meant for one-time use.

Malaysia funds liquidate London office real estate holdings
Michael Peel in Bangkok and Judith Evans in London – FT
Malaysian state investment funds are cashing out of lofty positions in the London property market, in a sign of the country’s growing financial woes as it grapples with claims of multibillion-dollar corruption involving government companies.


Wall Street’s unbelievable secret history
Business Insider
Wall Street and the surrounding financial district in lower Manhattan are a center of world commerce. But the streets beneath bankers’ feet are rich with their own history and secrets.

Global steel industry expected to return to growth
Michael Pooler – FT
The global steel industry is expected to edge back into growth this year in spite of waning Chinese demand, at a time when low prices for the metal are casting a shadow over producers.

A Comic Take on Wall Street by an Ex-Bear Stearns Executive
A strong, intelligent woman struggles to break through the double-pane glass ceiling of a top investment firm on Wall Street.

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