First Read

Five-Decade Market Pro Who Called Bond Rally Sees 1% U.S. Yields
Andrea Wong – Bloomberg
Gary Shilling sees Treasury gains as global rates go negative; Former Merrill Lynch top economist says this cycle is unique
A year ago, with U.S. equities approaching record highs and the Federal Reserve moving toward raising interest rates, Gary Shilling was a lonely voice on Wall Street predicting financial-market gloom in the 12 months ahead.

***** I am just hoping to get a 3% 30-year mortgage soon.That would be the rate my parents had for the house I grew up in.


WTI Crude Falls to 12-Year Low at $26.14 per Barrel; Stockpiles at U.S. hub increase to 64.7 million barrels: EIA; WTI oil-price contango increases to widest in five years
Mark Shenk – Bloomberg
Oil tumbled to lowest level in more than 12 years as crude stockpiles at the delivery point for New York futures expanded to a record.

***** The race to the bottom. I have seen crude oil below $10 a barrel before in my lifetime in the markets. I half expect to see it again.


The Oil Industry Got Together and Agreed Things May Never Get Better; Thousands of industry participants gathered in London for their annual get-together, only to find a world awash in crude and hardly a life jacket in sight.
Andy Hoffman, Grant Smith, Javier Blas – Bloomberg
The thousands of attendees seeking reasons for optimism didn’t find them at the annual International Petroleum Week. Instead they were greeted by a cacophony of voices from some of the largest oil producers, refiners and traders delivering the same message:

***** Prices may never get better until they do. The cure for high prices is high prices. The cure for low prices is low prices.


Forget the Great Recession—Welcome to the ‘Great Repricing’; David Rosenberg says the negative-rates experiment is failing.
Luke Kawa – Bloomberg
Six and a half years removed from the Great Recession, we’re now in the midst of the “Great Repricing.”

***** I love living through history.


Nasdaq’s Blockchain Technology to Transform the Republic of Estonia’s e-Residency Shareholder Participation
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ) and the Republic of Estonia have announced that Estonia’s e-Residency platform will be facilitating a blockchain-based e-voting service to allow shareholders of companies listed on Nasdaq’s Tallinn Stock Exchange, Estonia’s only regulated securities market, to vote in shareholder meetings. The country’s e-Residency platform is an electronic identity system used by both Estonian residents and those with business interests in the country to access government services through e-Residency digital authentication. The program marks the second official blockchain project Nasdaq is executing on after successfully delivering the first private securities issuance between an investor and company via Nasdaq Linq, its blockchain-enabled platform.

****** Ironically, it was the European duchy of Grand Fenwick that was the runner up. Anyone know this reference without using Google?


WILD Networking With a Purpose Event
On Thursday, March 3, Women in Listed Derivatives (WILD) is offering an evening of speed networking that uses “smart matching software” to allow participants to target the types of people they are interested in meeting, based on customized matching parameters put together by WILD.
This is the first such event open to men and non members as well as WILD members – a rare chance for men in the financial industry to participate and to help advocate for women’s opportunities as well as to make meaningful connections for themselves.
WHO: This event is open to all professionals (gentlemen welcome)
WHEN: Thursday, March 3: 5:30 p.m. to 7 p.m.
WHERE: BP Offices, 30 South Wacker Drive, Chicago
COST: $25 for members and $50 for non members
This event is sponsored by Eurex and BP.
Full event details HERE


Why Risk Management Failed: Ethical and Behavioral Aspects
Please join us for the inaugural J.B. Finkl Lecture on Ethics and Finance, hosted by the Center for Strategic Finance at the Stuart School of Business, Illinois Institute of Technology.
“Why Risk Management Failed: Ethical and Behavioral Aspects”
Dr. John Boatright, Raymond C. Baumhart Professor of Business Ethics at the Quinlan School of Business, Loyola University Chicago
Thursday, March 3, 2016, 5:30-8:00 p.m.
Stuart School of Business, Downtown Campus, Room C20
565 W. Adams St., Chicago, IL 60661


Thursday’s Top Three
Doug Ashburn – JLN
Cash Mahlmann’s obituary was the top clicked item yesterday, followed by the Bloomberg story on the CFTC’s budgetary woes, CFTC Too Broke to Properly Police Flash Traders, Massad Says. The Business Insider article, This is the best college in America to attend if you want to make a high salary came in third. Spoiler alert: it is MIT. Also, since the fourth place finisher was John Lothian’s column on the power of Facebook (see below), and he was edged out by one click, I thought I would include a mention. He is going to sit in his office and re-click on the story until he cracks the top three anyway.


A Fortune Built on the Back of Prayers
John J. Lothian
Facebook is an amazing tool that connects people on so many levels with thoughts, well wishes and prayers among them. It is an interesting twist for a website that was originally used by Zuckerberg to rate Harvard students as “hot or not.” Today, the service is perhaps as much an example of the power of social media as it is of human power to change things around us. It is my contention that in Facebook, Zuckerberg has created the greatest single tool for the increase in prayer that the world has ever seen.


Lead Stories

Market fears are feeding on themselves
John Authers – FT
This wasn’t supposed to happen. As world stocks at last lapsed into a bear market on Thursday, so currency and bond markets headed in precisely the opposite direction to the one mapped for them by central banks.

Exchanges warn against giving brokers power over key decisions
Nicole Bullock in New York – FT
Exchanges including the New York Stock Exchange and Nasdaq have written to lawmakers arguing against giving brokers and investors power over key decisions affecting the US equities market.

Swedish Bank Move Creates a Global Shudder
Since the financial crisis, it has been gospel for many investors that some combination of actions by central banks — bond buying, bold promises or flirtations with negative interest rates — would be enough to keep the global economy out of recession.

Bank Stocks Sink Further, but Dimon Is Buyer; Dimon buys 500,000 J.P. Morgan shares for $26.6 million
James Dimon’s message to the markets: If no one else wants to buy bank stocks, I will.

BATS Global Markets withdraws support for IEX exchange push
Nicole Bullock in New York – FT
BATS Global Markets has withdrawn its support for efforts by IEX, the start-up trading venue, to become a registered exchange, in the latest sign that the fracas over IEX’s application shows no sign of dying down.

Dimon Just Spent a Year’s Pay on JPMorgan Stock After Bank Rout
Hugh Son – Bloomberg
Chief executive buys 500,000 shares for $26.6 million; JPMorgan climbs 2.9 percent in extended trading in New York
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., spent $26.6 million to buy shares of his bank Thursday after they tumbled to the lowest price in more than two years.

Yellen keeps open option of negative rates but says move unlikely
Shawn Donnan and Sam Fleming in Washington – FT
Janet Yellen said the Federal Reserve was keeping open the option of taking interest rates negative as headwinds grow in the global economy but played down the likelihood of such a move.

Sweden’s Central Bank Cuts Main Interest Rate Further Below Zero; Riksbank seeks to hold down currency to support recovery in inflation
Sweden’s central bank cut its main interest rate even further below zero on Thursday as it sought to hold down the national currency to support a recovery in the inflation rate toward a 2% target.

Why Sweden’s Negative Deposit Rate Isn’t as Scary as It Looks
The decision by Sweden’s Riksbank Thursday to take borrowing costs further into negative territory left its deposit rate—the one paid on money stashed at the central bank—at a startling minus 1.25%.

Negative rates: Why does Sweden’s move matter?
Claire Jones in Frankfurt and Michael Mackenzie in London – FT
Sweden is a small economy. Why should we care about what its central bank does?
The Riksbank’s decision to delve deeper into negative territory and chop another 15 basis points off its benchmark main repo rate matters because it is part of a global trend.

The New Frontier of Negative Interest Rates
By Clive Crook – Bloomberg
When central banks start exploring strange new worlds, the results aren’t always ideal.

‘Flash Boys’ Market Loses Support From Bats as Opposition Mounts
Annie Massa – Bloomberg
Bats Global Markets Inc. has changed its mind about IEX Group Inc.’s controversial proposal to become a U.S. stock exchange.

The world can’t afford another financial crash – it could destroy capitalism as we know it
By Allister Heath
They bounce back after terrorist attacks, pick themselves up after earthquakes and cope with pandemics such as Zika. They can even handle years of economic uncertainty, stagnant wages and sky-high unemployment. But no developed nation today could possibly tolerate another wholesale banking crisis and proper, blood and guts recession.

The Big Beneficiary of Negative Rates: Gold; Worries about the stability of the global financial system has prompted a surge in gold prices
Investors are piling into gold, seeking shelter amid concerns that a turn toward negative interest rates in some countries is threatening to destabilize the global financial system.

Wall St. Whistle-Blowers, Often Scorned, Get New Support
Becoming a whistle-blower by reporting wrongdoing on Wall Street or in a federal agency that regulates Wall Street takes lots of guts. And a strong argument can be made that whistle-blowers should be celebrated and rewarded for their courage.

Wall Street Is Trying to Beat Silicon Valley at Its Own Game; Banks race to beat the patent trolls—and Silicon Valley.
Susan Decker, Elizabeth Dexheimer – Bloomberg
Banks and Silicon Valley are on a collision course, the future of finance may be at stake, and one side is brandishing its most dreaded weapon: the PowerPoint presentation.

Many suspects behind murderous markets
John Authers – FT
Actors Sean Connery and Vanessa Redgrave appear on the poster for the film ‘Murder On The Orient Express’, based on the novel by Agatha Christie, 1974. (Photo by Movie Poster Image Art/Getty Images)©Getty
Spoiler alert. I am about to give away the ending to the classic Agatha Christie whodunnit thriller, Murder on the Orient Express. There are 12 suspects and it turns out all of them took turns to stick the dagger into the victim.


SEC drops case against Chinese executive over Qihoo trades
The U.S. Securities and Exchange Commission has dismissed its complaint against a Chinese online gaming executive whom it alleged had engaged in “suspicious” trading activity ahead of a $10 billion deal by U.S.-listed China-based technology company.

U.S. Libor Verdicts Upheld, Helping Ease Cross-Border Probes
Patricia Hurtado – Bloomberg
Judge rejects claim prosecutors relied on `tainted’ evidence; Ex-Rabobank traders rigged $350 trillion benchmark for rates
The conviction of two British traders for rigging interest rates will stand after a U.S. judge found a key witness’s testimony wasn’t tainted by a related U.K. probe, a decision that could help smooth the way for American prosecutors using evidence gathered in cross-border probes.

Lagarde Set for Second IMF Term as No Challengers Emerge
Andrew Mayeda – Bloomberg
Former French finance minister has gained support across globe; U.S. gives formal backing for Lagarde remaining at fund’s helm
Christine Lagarde is set to win a second term as managing director of the International Monetary Fund, after no candidates emerged to challenge her.

CFTC Says Alleged Spoofer’s Trading Leads to New Complaints
Janan Hanna, Brian Louis – Bloomberg
Oystacher’s T-Note futures orders cited as CFTC seeks ban; Regulator asks judge to allow evidence of Oystacher activity
Commodities regulators suing alleged spoofer Igor Oystacher said some of his trading activity this month has generated new complaints about market manipulation.

Sebi looks to present rules in more simplified manner; The initiative comes at a time when efforts are being made at various levels to attract more investors into the capital market
Business Standard
Securities and Exchange Board of India (Sebi) is looking to present its rules and regulations in a simpler manner, as part of efforts to help investors have a better understanding of the markets, a senior official said on Friday.

Self-Regulatory Organization (SRO) Rulemaking and National Market System (NMS) Plans

    • 17d-2: Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities Between the Financial Industry Regulatory Authority, Inc. and ISE Mercury, LLC (Release No. 34-77132, File No. 4-697)
    • BATS: Notice of Filing of Partial Amendment No. 2 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Partial Amendment No. 2, to Adopt Rule 11.27 regarding the Data Collection Requirements of the Tick Size Pilot (Release No. 34-77105; File No. SR-BATS-2015-102; February 10, 2016)
    • FINRA: Notice of Designation of a Longer Period for Commission Action on Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change to Adopt FINRA Rule 3210 (Accounts at Other Broker-Dealers and Financial Institutions), as Modified by Partial Amendment No. 1, in the Consolidated FINRA Rulebook (Release No. 34-77103; File No. SR-FINRA-2015-029; February 10, 2016)
    • NYSEMKT: Notice of Filing and Immediate Effectiveness of Proposed Change Modifying the NYSE Amex Options Fee Schedule (Release No. 34-77106; File No. SR-NYSEMKT-2016-18; February 10, 2016); see also Exhibit 5

Exchanges & Trading Facilities

NCBA: Concerns CME Group Changes Won’t Fix Market Volatility
The CME Group has proposed a number of recent changes in an effort to resolve instability seen in cattle markets. National Cattlemen’s Beef Association (NCBA) officials say the moves aren’t addressing the problem areas and more communication is needed between the organizations.

LME said trading volume fell a sixth in January
Futures & Options World
The London Metal Exchange reported a heavy fall in total trading activity for the first month of the year, with a 17.6% drop in volumes compared to January 2015. The LME’s North American aluminium alloy contract was down 34.4% to 31,599 contracts, its lead contract fell 26% to 863,977 lots and copper was off 24.8% to 3,149,626 contracts.

HKEx: Changes Of Designated Securities For Short Selling
The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), announces that with effect from 19 February 2016 (Friday), 32 additional securities will be eligible for short selling and 12 existing designated securities will be removed from the list. The total number of designated securities for short selling will be 870 after the revision.

Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced the results of the ICE Endex gas storage auction held on February 10, 2016, on behalf of GasTerra.

NSEL merger decision likely by Monday; Maharashtra to begin auctioning attached properties from next month
Business Standard
The Union finance ministry on Thursday asked the ministry of corporate affairs (MCA) to decide by Monday on the issues relating to merge of scam-hit National Spot Exchange (NSEL) with its erstwhile promoter, Financial Technologies (FTIL).

TMX Group posts fourth-quarter loss on charges
TMX Group Ltd, which owns and operates the Toronto Stock Exchange, reported a fourth-quarter loss, hurt by impairment charges and sustained low commodity prices impacting its large portion of resource-based issuers.


Senate panel to hear from U.S. antitrust bosses
The Senate Judiciary Committee’s antitrust subcommittee will hear from the top U.S. antitrust bosses next month to discuss a wave of big mergers over the past year, according to a staffer briefed on the hearing.

U.S. lawmakers hammer financial companies on retirement advice rule
Two influential U.S. lawmakers on Thursday criticized the financial industry for saying in public that a new rule on retirement advice could have “dire consequences,” but then speaking optimistically about it with shareholders.

Alan Grayson’s Double Life: Congressman and Hedge Fund Manager
The hedge fund manager boasted that he had traveled to “every country” in the world, studying overseas stock markets as he fine-tuned an investment strategy to capitalize on global companies’ suffering because of economic or political turmoil.

Hedge Funds & Managed Futures

Investor John Paulson sees stock market ‘overreacting’
Billionaire hedge fund investor John Paulson, closely followed for his views on the markets, said on Thursday the sliding stock market is “overreacting” and that the United States economy remains strong.

Billionaire Dan Och’s Hedge Fund Firm Plunges By 26%
Nathan Vardi – Forbers
There have been plenty of indications in recent months of the troubles being faced by prominent hedge fund managers who have been unable to navigate volatile markets without suffering setbacks. Big names like Bill Ackman, David Einhorn, Leon Cooperman and Larry Robbins have posted big losses in their hedge funds since last summer.

Gold surges to 1-year high on financial uncertainty
Gold vaulted more than 5 percent on Thursday to a one-year high, on track for its biggest daily jump in more than seven years as financial uncertainty, a lower dollar and tumbling stock prices around the world prompted investors to seek refuge in bullion

Hedge Funds See Selloff in European Bank Stocks as Buying Opportunity; European Central Bank support and reduced leverage speak in favor of banks
The massive selloff in European bank stocks and bonds is overdone and presents a “phenomenal” buying opportunity, according to some of Europe’s top hedge-fund managers.

John Paulson Says He’s Still Considering Move to Puerto Rico
Michelle Kaske, Alexander Lopez – Bloomberg
Hedge-fund manager speaks at investment conference in San Juan; Paulson plans hotel expansion and condominium development; John Paulson hasn’t given up on Puerto Rico.
The hedge-fund manager said he’s still considering moving to the Caribbean island from New York after flirting with the idea in 2013.

Bill Gross rivalry with Pimco hinges on US economic performance
Stephen Foley in New York – FT
The rivalry between Bill Gross and his former company Pimco looks set to hinge on the performance of the US economy this year, as the two take diverging views on the outlook for interest rates.

Banks & Brokers

Goldman in $27.5 mln settlement over Hudson CDOs
Goldman Sachs Group Inc has reached a $27.5 million settlement of a class-action lawsuit accusing it of defrauding investors in subprime mortgage offerings that some U.S. senators faulted after investigating causes of the 2008 financial crisis.

Société Générale: Paris mismatch
Bank tries to woo jilted shareholders but gets slapped around the chops
Hell hath no fury like a shareholder scorned. On Thursday, Société Générale, enacting the stereotype of Gallic infidelity, tried to woo jilted shareholders back with the financial equivalent of flowers and a contrite note: a two-thirds increase in its 2015 dividend and a 10-percentage point rise in its payout ratio. Its reward was bared teeth and a vicious slap around the chops. The share price fell by an ungrateful 13 per cent.

Morgan Stanley realigns wealth management amid new leadership: memo
Morgan Stanley reshuffled its wealth management division following the earlier appointment of Andy Saperstein and Shelley O’Connor as co-heads, according to a memo reviewed by Reuters and confirmed by a Morgan Stanley spokeswoman on Thursday.

RBS poaches JPMorgan banker to head Coutts
Emma Dunkley – FT
Royal Bank of Scotland has poached a senior banker from JPMorgan Chase to head its private bank Coutts, as Michael Morley steps down after seven years at the helm.

Goldman Sachs Bankers Said to Depart on Guidelines Breach
Ambereen Choudhury, Ruth David, Dinesh Nair – Bloomberg
Two bankers in Dubai, one in London said to leave in December; Staff said to not identify themselves at Americana meeting
Three bankers have left Goldman Sachs Group Inc. after the U.S. firm determined they breached internal guidelines in connection with the bank’s advisory role on the planned acquisition of a consumer company in the Middle East, according to people with knowledge of the matter.

With Shares Plunging, Deutsche Bank Sets Out to Prove It Can Be Fixed
After John Cryan took the helm of Deutsche Bank in July, he set out to quickly clean up the mess left by his predecessors. The bank has taken earnings-crushing charges, slashed costs and pulled out of countries that it has been in for decades.

Clearing & Settlement

The swaps market, Euribor and Mifid II
Alexander Campbell – Bloomberg
New regulatory capital requirements could force an upheaval in the swaps market, with the success of Citadel’s cleared swaps business providing both a threat and a temptation to banks wanting to sidestep the Fed’s capital and liquidity standards. If they go ahead, the result could be a very different – and more diverse – swaps market in a few years’ time.

US and EU Ink Substitute Compliance Deal
Markets Media
After three year of intense negotiations, the U.S. Commodity Futures Trading Commission and the European Commission have struck an agreement on substitute compliance for central counterparty clearinghouses. “This approach, once fully implemented, will permit U.S. and European CCPs to continue providing clearing services to entities in each other’s jurisdiction,” said CFTC Chairman Timothy Massad. “Doing so will ensure that our global derivatives markets remain robust, while keeping our financial system as stable and resilient as possible.”

U.S., EU Reach Agreement on Clearing Rules for Derivatives Market
ABA Banking Journal
After extensive negotiations, the U.S. and the European Union agreed on Wednesday to accept each other’s derivatives rules in order to preserve the smooth functioning of the $550 trillion global derivatives market. The arrangement will allow U.S. clearinghouses or central counterparties to continue providing services to EU banks, and EU CCPs will be able to do business with U.S. customers while complying with EU rules deemed comparable to U.S. rules. In addition, the agreement provides a partial carve-out from EU rules for derivatives contracts on U.S. agricultural products.

Repo market outstandings in Europe stable despite decline in G-SIFIs repo books says ICMA
FTSE Global Markets
A new survey sets the baseline figure for the European repo market at EUR5,608bn at December 9th last year, broadly unchanged over the previous six months, according to the European Repo and Collateral Council of the International Capital Market Association (ICMA). The relative stability of outstandings between the two surveys is down to the expansion of non-EU banks’ European repo books. Meanwhile, the study notes a decline in the activity of Global Systemically Important Financial Institutions (G-SIFIs), the banks most affected by new regulation.

Spotlight on benefits of CCP services for Beneficial Owners
Eurex Clearing at the Beneficial Owners conference
At this year’s U.S. IMN Beneficial Owners’ conference, Gerard Denham, Senior Vice President Clients & Markets and Tim Gits, Senior Vice President, Business Development at Eurex Clearing, hosted an interactive workshop dedicated to Beneficial Owners.
Some 40 Beneficial Owners from across the U.S.A. and Canada attended to learn more on how to take advantage from Eurex Clearing’s unique CCP offering for securities lending.

Clearstream’s January 2016 figures
Deutsche Boerse
In January 2016, the overall value of assets under custody held on behalf of customers registered an increase of 1 percent to EUR 13.0 trillion (compared to EUR 12.8 trillion in January 2015).

Indexes & Products

Bitten but Not Mauled, Low Volatility ETFs Attract Fans; Money is pouring in from investors looking to soften a bear market beating.
Eric Balchunas – Bloomberg
As wild stock market swings fray investor nerves, exchange-traded funds promising a measure of calm are, not surprisingly, gaining adherents. Such low-volatility ETFs offer a way to stay in the market while sidestepping the beating everyone else is getting.

China’s Handling of Market Volatility May Thwart MSCI Inclusion
Bloomberg Business
China’s response to volatility in its stock and currency markets may have an impact on the country’s bid for entry into MSCI Inc.’s global equity benchmarks, according to the index provider.

Paschi Falls to Record Low as MSCI Prepares to Remove From Index
Bloomberg Business
Banca Monte dei Paschi di Siena SpA, the Italian bank saddled with bad debt and seeking a buyer, plunged to a record low after MSCI Inc. said it plans to pull the stock from that country’s index.

Global stock index enters bear market territory
Chicago Tribune
The world is in a bear market, or a plunge in stocks of 20 percent. In the U.S., the Dow Jones industrial average and the Standard & Poor’s 500 index defy the typical bear definition, since the large companies within those indexes have fallen only about 14 percent from their highs hit in 2015.

Don’t be charmed by the smart beta genie
The term “smart beta” conjures up an image of an all-knowing, all-powerful investment genie. This may help to explain why smart-beta funds have become increasingly popular over the past few years – more than $150bn worth of investment has flowed into them since 2013, according to the Financial Times. But many people buying these products aren’t exactly sure what they are paying for, or what risks they are taking.


Bitcoin’s future threatened by software schism
Richard Waters in San Francisco – FT
A schism among software developers that threatens the future of bitcoin has broken into the open with Wednesday’s release of a rival version of the technology behind the digital currency.

Nasdaq brings the blockchain to…Estonia
By Anna Irrera – Financial News
Investors in Estonian companies will soon be able to vote at shareholder meetings using blockchain technology, via a pioneering scheme being run by Nasdaq.

Interactive Data Loses COO Nadler, Infrastructure CTO Caudell; The departures follow the exit of chairman Mason Slaine and chief executive Stephen Daffron last month.
Max Bowie – Waters Technology
Two more senior executives have departed Interactive Data, following the completion of its takeover by Intercontinental Exchange in December. Chief operating officer Jay Nadler and chief technology officer for infrastructure Scott Caudell both left the vendor last month, Inside Market Data has learned.


SEC: California Man Sold Investors Phony Stock to Pay Gambling Debts
The Securities and Exchange Commission today charged an unregistered broker in Oceanside, Calif., with fraudulently selling purported stock in a medical device company and pocketing investors’ money. The SEC alleges that Gregory Ruehle raised approximately $1.9 million from more than 100 investors but never delivered or transferred the securities as promised while using the money to pay gambling debts among other personal expenditures.

Ex-Rabobank traders lose bid in U.S. to overturn Libor convictions
Two former Rabobank traders on Thursday lost a bid to overturn their convictions arising from an international investigation into the manipulation of Libor, the leading global benchmark for pricing financial transactions.

MoneyGram to pay $13 million to end money transfer probe
MoneyGram International Inc will pay $13 million to settle an investigation by U.S. states stemming from customer complaints that scam artists duped them into wiring funds via the money transfer service, state attorneys general said on Thursday.

FINRA Bars Two Brokers for Fraudulent Sales of a Hedge Fund
The Financial Industry Regulatory Authority (FINRA) announced today that it has barred two Buffalo-based brokers – Timothy S. Dembski and Walter F. Grenda – from the securities industry for fraud in connection with the sale of a hedge fund, the Prestige Wealth Management Fund, LP. Dembski and Grenda’s misconduct occurred while they were employed with Mid Atlantic Capital Corporation.

Morgan Stanley to Pay $3.2 Billion to End Government Mortgage Probes; Bank admits employees received information that certain loans being packaged into bonds didn’t comply with underwriting guidelines
Morgan Stanley will pay $3.2 billion to complete agreements with the U.S. Justice Department and several states to resolve civil charges that it misled investors about the quality of mortgage bonds it sold in the run-up to the 2008 financial crisis.

Environmental & Energy

Former oil trader files whistleblower suit against Carlyle
Gregory Meyer in New York – FT
A former oil trader has sued Carlyle Group, alleging the private equity group fired him after he warned of an “Enron-like situation” in which the founders of its commodities hedge fund hid big losses from investors.

Oil Glut: What Storage Signals Mean for Prices; A gusher of oil at an Oklahoma crude-delivery point has put extreme pressure on U.S. prices
There is only a one-letter difference between Cushing and crushing. The latter is what the storage depots at the small Oklahoma town are doing to the global oil market this week.

Two-thirds of US students are taught climate change badly, study finds
By Suzanne Goldenberg – The Guardian
Nearly two-thirds of schoolchildren in the US are taught lessons on climate change that do not rise to the level of a sound science education, according to new research on Thursday.


First Word Asia: Is it Time for a Fiscal Bazooka?
Bloomberg Business
On First Word Asia, Bloomberg’s Bryan Curtis and Doug Krizner asked their guests if a fiscal response might be needed. Guests included Shane Oliver, Head, Investment Strategy at AMP Capital Investors, and Enzio Von Pfeil, Investment Strategist, Private Capital Ltd.

Financial experts call for caution amid risks in capital market
EJ Insight
Financial experts warned investors to be wary of potential risks in the capital market and urged them to act in accordance with their risk tolerance, the Hong Kong Economic Journal reported on Friday. The Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung cited the divergent monetary policies of major central banks as one of the chief factors clouding the Hong Kong stock market.

Japan’s FinMin hints at intervention to curb yen’s rise
Shanghai Daily
Japan’s Finance Minister Taro Aso said on Friday that rapid swings in currency markets were undesirable, hinting his ministry will intervene in the market to counter the yen’s rapid appreciation if necessary.

Frontier Markets

India gears up for mobile money for everyone through UPI; Platform will give very small borrowers a choice of lenders whom they can repay via mobile at the end of the day
Alnoor Peermohamed – Business Standard
In the next two years, a bank can lend a vegetable vendor of a few hundred rupees which she will be able to repay at the end of the day. All this will be done via mobile in a matter of a few minutes and in fact, she’ll have a number of firms offering her loans allowing her to pick and choose the one that suits her the best.


Bunge wants resolution on Egypt wheat shipment
Gregory Meyer in New York and Emiko Terazono in London – FT
International food commodities trader Bunge said it still intended to deliver a cargo of wheat to Egypt after the government rejected it in a case closely watched in the grain market.

Cargill starts domestic production of Envirotemp FR3 in Kurkumbh, Maharashtra; Cargill’s Envirotemp FR3 natural ester transformer oil will help Indian power and transmission companies reduce carbon footprint
Cargill India has opened a state-of-the-art manufacturing facility for Envirotemp FR3 fluid in Kurkumbh, in the state of Maharashtra. The dielectric fluid, which was previously imported from the United States, will now be manufactured in India by using Cargill’s patented technology. The FR3 fluid that is manufactured in India will meet the specifications of international standards like IEC and IEEE.

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