I’m Feeling a Draft
For those of you living outside the U.S. or those of you who prefer “The Beautiful Game”, skip past the following and move on to real news.
It’s been hard to walk around Rockefeller Center over the past few days without tripping on rabid football fans who were camping out to get a seat for this week’s NFL Draft. The streets are lousy with ranks of video production trucks and power generators. You’d think there was actually a game going on — and in a way, there is. Clearly there are a lot of people who are fascinated by this spectacle — hyped up to a frenzy by the NFL’s formidable marketing machine. And it goes on for three days. Games only take three hours. Yet for the true fan, there is no detail too minute, no pick too low, no talent too minimal to warrant their attention. And this actually seems to add to the popularity and status of the game. As for the draftees, their personal quirks, foibles, and failures only add to the fan interest. It makes for a better story.
Which got me thinking about how this might be applied to other professions held in lesser esteem than football. Imagine if the American Bar Association organized an annual draft for law-school graduates. Or if SIFMA organized a draft for Finance majors. Or if the AICPA organized a draft for newly minted CPAs. (Perhaps including accountants is taking this too far.) Imagine watching hours of Up Close and Personal portraits of bright-eyed young associates in waiting. Or would-be traders before they become spoiled by success. Can’t you see the tension rise as a managing partner from Cravath or Goldman or E&Y stands up to announce a selection before a cheering crowd of thousands and an audience of millions? All the while, we’d be getting selection-by-selection commentary from the Shark Tank panel. I could go on, but…
It’s been big fun sitting in the guest editor’s chair this week. I’d like to thank Jon and Doug and Jim — the late riser of the crew — for doing all the work, as they do every week. Next week Nils-Robert Persson and some of his colleagues at Cinnober will, as they’ve done before, be sitting in for Big John, whom we all look forward to seeing back here soon.
***JM: Been a pleasure having you here, Martin! Great comments, easy to work with, more punctual than me… come back anytime!
CFTC’s O’Malia taking a hard look at HFT
Michael Lewis’ book “Flash Boys” stirred up debate about high frequency trading like no other. Regulators, such as the Commodity Futures Trading Commission (CFTC) are taking a more in-depth look at the trading method to determine if there might be problems with HFT in the futures space as well.
CFTC Commissioner Scott O’Malia, speaking to John Lothian News for its market structure series, said that HFT has been on the agency’s radar screen for some time, and has created a sub-committee to bring experts on both sides of the debate.
ICE chief pledges to simplify stocks trading
Gregory Meyer and Nicole Bullock in New York – FT.com
The new owner of the New York Stock Exchange has waded into the raging debate over high-frequency trading and promised to simplify trading in an effort to restore investor confidence in the world’s biggest equity market.
***MM: As Mies van der Rohe, one of the great innovators of architecture, was fond of saying, less is more. And when one of the great innovators of the exchange world speaks, we’d all do well to listen.
SEC: With the program
Kara Scannell – FT.com
As Wall Street pours billions into high-speed trading platforms – along with big salaries for top software developers – the question is whether regulators can keep up. Mary Jo White, SEC chairman, insists it can.
***MM: Only time — parsed in nanoseconds — will tell.
Exchange’s Dark Pool Reflection
Robert Stowsky – Traders Magazine
This April saw two very different takes on the future of the National Market System and dark pools in particular. In an interview with Bloomberg News, Terrence Duffy, Chairman of the CME, called for eliminating dark pools in an effort to have all equity trading occur on exchanges. “Fix the fragmentation issue, and you’ll fix the problem,” Duffy said. “We need to have 100 percent of that liquidity on exchanges.”
***MM: What happened to Free Markets for Free Men (and women)? I would think the point should be to make exchanges more attractive venues for trading than the alternative.
Yellen: Asset Managers Pose Different Risks Than Banks
Ryan Tracy and Pedro Nicolaci da Costa – WSJ.com
Federal Reserve Chairwoman Janet Yellen and another top Fed official defended the prospect of stricter regulation for large, nonbank financial firms like asset managers as Washington looks to rein in risks emerging outside the traditional banking sector.
***DA: Of course, the Fed’s free money policy and tacit backstop of risky assets has exacerbated the buildup of risk.
Traders Scan Brains in Hunt for Profit-Enlarging Pill
Michael P. Regan and Sam Mamudi – Bloomberg
The second-floor loft on William Street in lower Manhattan, normally abuzz with young equity-options traders connected to Sang Lucci Capital Partners, was quiet for a week last month. The Sang Lucci crew went to Los Angeles in a quest to find an upgrade for a piece of trading software they say others in the profession have neglected: the human brain.
***MM: Isn’t that the plot for Total Recall?
Young Bankers Fed Up With 90-Hour Weeks Move to Startups
Some of the best and brightest of Wall Street’s young investment bankers are bailing out of their high-paying, prestigious jobs at big financial institutions. Many are setting up their own businesses, especially in technology.
***MM: This is a new trend? Tell that to Jeff Bezos, to name one.
Getting Ahead in Fragmented Markets
Join Citi, Wells Fargo Securities, Futures & Options World and Object Trading to understand how to turn market proliferation into a unique selling point for your business, Tuesday, May 13, 2014, 10am CDT/11:00am EDT/4pm GMT. This webinar will examine how the leading firms in the market are aligning their trading infrastructure to overcome the modern market complexity. Register below:
***MM: Do you think someone sent an invite to Terrence Duffy?
MarketsWiki Page of the Day
MarketsWiki Recent Updates
Companies, Organizations and Groups
48,801,846 pages viewed, 7,949 articles, 182,716 edits
NYSE to Curtail Order Types Amid Debate Over Their Fairness
Sam Mamudi and Matthew Leising – Bloomberg
The New York Stock Exchange wants to pare back the types of orders customers can place, potentially quieting critics who say their proliferation gives high-frequency traders an unfair edge. NYSE staff have identified more than a dozen to abolish, pending regulatory approval, IntercontinentalExchange Group (ICE) Chief Executive Officer Jeffrey Sprecher said today.
European Commission keen to delay bank rules on clearing
Philip Stafford – FT.com
European authorities are planning a six-month delay to rules that will force banks not using its designated clearing houses to apply higher capital rules to their off-exchange derivatives trades.
Two arrested in Australia forex probe
Jamie Smyth in Sydney – FT.com
Australian police have arrested a government employee and a banker for alleged offences related to insider trading and abuse of public office, following a probe into suspicious trading in foreign exchange markets.
RFQ an obstacle to new entrants, says FIA PTG chairman
Joe Rennison – Risk.net
“Historical relationships” will make it difficult for prop traders and others to make markets on Sefs, says the chairman of the Futures Industry Association’s principal traders group
What Timothy Geithner Really Thinks
ANDREW ROSS SORKIN – NYTimes.com
“This is kind of like a hearing,” Timothy Geithner said, swaying uncomfortably, face scrunched and hair perfectly tousled. “Do you guys always do it this way?”
Election Commission Votes to Allow Bitcoin Donations
The Federal Election Commission on Thursday voted to allow political committees to accept Bitcoin donations and outlined the ways that the virtual currency can be used by federally regulated campaigns.
U.S. SEC’s Stein says investor rules need reform
A top U.S. regulator called on Thursday for a broad swath of investor reforms, from new measures to empower shareholders in corporate elections to better disclosure on how retail orders are routed and executed.
Regulator Suggests End to Banks’ Self-Grading
PETER EAVIS – NYTimes.com
Self-grading has obvious limitations in education. Now, a senior regulator at the Federal Reserve wants to banish it from bank regulation.
Lopsided Approach to Wall Street Fraud Undermines the Law
Ted Kaufman – NYTimes.com
Today, Justice Department and bank regulators are wrestling with the question of whether the government can criminally indict a foreign bank, to show that no bank is immune from prosecution. In my view, this question has taken the Justice Department down a rabbit hole.
Worst Wall St. Offenders Should Face Criminal Charges, Expert Says
Pedro Nicolaci da Costa – MoneyBeat – WSJ
The only way to appropriately ensure that financial firms will not repeat the shady practices that led to the financial crisis is to charge the banking sector’s worst offenders as criminals, Boston College Professor Edward Kane said Thursday.
Esma proposes moratorium on derivatives deals
Philip Stafford – FT.com
Banks and large swap dealers should be given respite from new European requirements to clear some of their derivatives transactions while the new rules are finalised, the main European markets regulator has proposed.
Esma frontloading fix leaves risks, dealers warn
Matt Cameron, Fiona Maxwell, Duncan Wood – Risk.net
New plans to remove the pricing uncertainty arising from one element of Europe’s over-the-counter derivatives clearing regime appear to be only a partial success, according to dealers, who claim questions would remain – particularly in the event of a client defaulting before the regime takes effect.
BOX Tops Half a Billion Dollars in Cumulative Savings to Investors
The BOX Options Exchange (BOX) announced today it has achieved half a billion dollars in savings for investors through its price improvement period (PIP). April was also an impressive month in BOX’s history with price improved contracts averaging 300,510 per day, which represented a 38% increase over the same period last year.
Exclusive: U.S. banking regulators hire math geeks of their own
A few years ago, famed financial engineer Andrew Lo built a computer model that allowed one of the biggest U.S. banks to figure out which customers were most likely to fall behind on credit-card payments. More recently, the Massachusetts Institute of Technology finance professor has been laboring for another client: the U.S. government.
Remarks To The Council Of Institutional Investors, SEC Commissioner Kara M. Stein, Washington, D.C., May 8, 2014
Speech By Federal Reserve Governor Tarullo On Rethinking The Aims Of Prudential Regulation At The Federal Reserve Bank Of Chicago Bank Structure Conference, Chicago, Illinois
Exchanges & Trading Facilities
IntercontinentalExchange Q1 earnings beat estimates
IntercontinentalExchange Group Inc , the exchange and clearing house operator, on Thursday reported stronger-than-expected first-quarter earnings due to income from new businesses.
ICE stock sinks on outlook for rising expenses
IntercontinentalExchange Group Inc shares sank on Thursday on a higher cost outlook overshadowing the exchange and clearing house operator.
Euronext reports first-quarter profit of $36 mln ahead of IPO
European exchange group Euronext, which is planning a stock market listing next month, earned net income of $36 million in the first three months of the year, a regulatory filing showed on Thursday.
Dark Pool for Dealers Addresses Shortfall in Corporate Bond Liquidity
Ivy Schmerken – Wall Street & Technology
A new dark pool for trading U.S. corporate bonds has emerged to help dealers identify trading opportunities across their positions and orders as a way to solve the problem of constrained balance sheets.
Oslo Børs Fixed Income Marketplaces Continue To Set New Records
The volume of new issues so far this year is higher than the record level set for the same period last year. Never before have there been so many borrowers and so many fixed income issues on the Oslo Børs and Nordic ABM marketplaces.
Profit at Brazil’s BM&FBovespa, Cetip in line with estimates
Brazilian securities clearinghouse Cetip SA Mercados Organizados and financial exchange BM&FBovespa SA posted quarterly profit in line with analysts’ estimates, as they curbed exposure to flagging local capital markets.
Toronto Stock Exchange operator’s profit rises 23 pct
TMX Group Ltd, the operator of the Toronto Stock Exchange, reported a 23 percent rise in first-quarter profit as a budding recovery in trading activity picked up speed.
TMX Group Limited Reports Results For The First Quarter 2014
Irish Stock Exchange Statistics April 2014
NYSE Plans Corporate Actions Data Changes
Michael Shashoua – WatersTechnology
The exchange announced new information to be added to its corporate actions data services, and changes to licensing rules and pricing, taking effect September 1
BATS CHI-X Europe Successfully Operates Exchange From Disaster Recovery Office – Company Executes Critical Infrastructure Test On 1st May 2014
Xetra/Börse Frankfurt: IPO In Prime Standard: SLM Solutions Group AG
NZX Congratulates The INFINZ Industry Awards 2014 Winners
NZX Gender Diversity 1st Quarter 2014 Statistics
Hedge Funds & Managed Futures
Hedge fund rivals put Man Group at centre of shorting battle
Miles Johnson, Hedge Fund Correspondent – FT.com
Be it curtain twitching, loud parties or careless rubbish disposal, there are many ways one can fall foul of a neighbour. Or, in the case of the hedge fund managers of London’s upmarket Mayfair district, you can just short their shares.
Carl Icahn’s son, partner, to launch hedge fund management firm -WSJ
Carl Icahn’s son, Brett Icahn, and David Schechter are launching a hedge fund management company that will take money from outside investors, according to The Wall Street Journal, which cited people familiar with the plan.
Hedge Funds on the Schnide
Paul Vigna – MoneyBeat – WSJ
This bipolar market – up a few days, down a few days – isn’t hard on just the unsophisticated investor. For a second straight months, hedge funds as a group were in the red, only the second back-to-back down months since 2012. WSJ’s Rob Copeland stopped by the MoneyBeat desk to talk about the industry’s schnide.
Dutch pension funds grapple with permanent revolution
Mark Cobley – Financial News
The Netherlands’ giant pension funds, already among the largest pools of investment capital in Europe, look set to get even bigger.
ADM names veteran grain chief to run cocoa unit after dropping sale plan
Archer Daniels Midland Co has appointed a veteran grains trader to run its niche cocoa operations in a management reshuffle just weeks after the U.S. agribusiness scrapped plans to sell the business.
Banks & Brokers
Citigroup Tops Euromoney FX Poll After 12-Year Gap
Citigroup Inc. has snatched back its position as the world’s biggest currencies-dealing bank after a 12-year hiatus, taking the crown from Deutsche Bank AG, according to a closely followed industry survey. Barclays PLC retains its third-place slot in the annual benchmark rankings announced by publisher Euromoney Institutional Investor on Thursday.
Was Barclays the problem, or was it the business model?: James Saft
When the world applauds your obituary, as it has the death of Barclays Plc’s global ambitions, it seems you have been doing something wrong.
JPMorgan Backs an Online Broker, Motif Investing
WILLIAM ALDEN – NYTimes.com
Motif Investing, an upstart online broker, has attracted the nation’s biggest bank as a backer.
Credit Suisse says doing everything it can to settle U.S. tax probe
Credit Suisse is doing everything in its power to reach a settlement with U.S. authorities who are probing whether and how its private bankers helped wealthy Americans dodge their taxes, executives will tell the bank’s shareholders on Friday.
Edward Jones Brokerage Takes On a More Urban Style
After nearly a century of catering to small-town investors, Edward Jones is trying to make it in the big city. The brokerage firm is expanding in Boston, Chicago, San Francisco and other urban areas as more young adults opt for the city life. But the shift is a challenge for a company that has thrived in quieter locales, where its brokers go door to door, soliciting clients where they live and work.
GFI Group Wins Top Broker Award for HRC Steel Derivatives and Thermal Coal Futures
GFI Group Inc. is pleased to announce that GFI Group was distinguished by SGX AsiaClear with two awards: Top HRC steel derivatives IDB and Top thermal coal futures IDB.
ICAP Energy launches global iron ore electronic platform
ICAP, the leading markets operator and provider of post trade risk and information services, announces that it successfully launched its global iron ore electronic platform on 5 May, coinciding with Singapore Iron Ore Week 2014.
Goldman Sachs to Present at Sanford C. Bernstein’s 2014 Annual Strategic Decisions Conference
Clearing & Settlement
CME changes margins across agricultural futures complex
CME Group Inc, parent of the Chicago Board of Trade, changed initial margins for agricultural commodity futures on Thursday.
Trade reporting: the lack of standards is hurting the industry’s efforts to comply
Two months in and the industry is still struggling to comply
Indexes & Products
Buy a Stock-Buyback Fund, Short Housing?
John Kimelman – Barron’s
What’s better than companies that routinely buy their own shares? A nifty exchange-traded fund that invests in such companies. The PowerShares Buyback Achievers (ticker: PKW) is not cheap when compared to many popular ETFs—it has an expense ratio of 0.71%. But it’s probably worth it.
ETFGI: Assets Of ETFs And ETPs Listed In The United Sates Reached US$1.76 Trillion, A New Record High, At The End Of April 2014
Launch Of The Solactive Canadian Select Universe Bond Index – Listing Of Horizons HBB ETF On Toronto Stock Exchange
Instinet Adds Electronic Trading Support For The Philippines
Instinet Incorporated today announced the addition of the Philippines to its Direct Market Access (DMA) and Algorithmic Trading platforms.
New Multi Commodity Management Platform Expected To ‘Significantly Reduce’ New Commodity Contract Launch Timescales For Exchanges
Ex-brokerage employees avoid prison in U.S. muni bid-rigging case
Two former employees of a California brokerage who became cooperating witnesses in a broad U.S. government investigation of bid-rigging in the $3.7 trillion municipal bond market avoided prison time at their sentencing Thursday.
BCSC: Securities regulator alleges fraud and illegal distribution
Environmental & Energy
Warning of $1tn gamble on high-cost oil projects
Damian Carrington, theguardian.com
Over $1tn is being gambled on high-cost oil projects that will never see a return if the world’s governments fulfil their pledge to tackle climate change, according to a new report.
***LB: Also in this story “The Carbon Tracker Initiative (CTI) research found that $1.1tn of capital expenditure is expected in the next decade in expensive oil sands, deepwater and Arctic projects but that this investment will be lost if policymakers agree to slash carbon emissions.”
Climate change making food crops less nutritious, research finds
Damian Carrington, theguardian.com
Rising carbon dioxide emissions are set to make the world’s staple food crops less nutritious, according to new scientific research, worsening the serious ill health already suffered by billions of malnourished people.
***LB: Also in this story “The field trials of wheat, rice, maize and soybeans showed that higher CO2 levels significantly reduced the levels of the essential nutrients iron and zinc, as well as cutting protein levels.”
Energy efficiency bill doomed?
Laura Barron-Lopez and Timothy Cama, The Hill
Déjà vu: The past certainly feels like prologue for the Senate when it comes to passing a bipartisan energy efficiency bill. The bill, led by Sens. Jeanne Shaheen (D-N.H.) and Rob Portman (R-Ohio), is on the verge of collapse as Democrats and Republicans are stuck in a vicious cycle.
***LB: Also in this story “Senate Majority Leader Harry Reid (D-Nev.) “filled the tree” on Wednesday, making it so Republicans couldn’t get the four energy-related amendments they want.”
Red-Hot Web in China Richly Rewards Foreign Investors
In June 2001, a South African media company called Naspers paid $34 million to acquire a big stake in a struggling Chinese start-up. Today that start-up — Tencent — is an Internet colossus worth nearly $120 billion, far more than web pioneers like eBay or Yahoo. And Naspers is $40 billion richer because of its well-timed bet.
Japan’s Financial Services Agency Exchanges Letters For Cooperation With The Bank Of Thailand
The EOL provides a formal basis for ongoing cooperation between the two authorities in sound financial regulatory mechanisms, particularly, financial administration, financing for small and medium-sized enterprises (SMEs), and reference rate reform. Additionally, both authorities may extend the cooperation to cover other mutually agreeable areas.
China to Relax Foreign Investment Limits in Listed Companies
China’s State Council, the country’s cabinet, said it would relax limits on foreign investment in listed companies and study preferential tax policies, as part of measures to deepen capital market reform.
HKEx – Charles Li Direct
Shanghai-Hong Kong Stock Connect is a big step in a long journey
SGX welcomes listing of Hanwha Chemical GDR
HKEx: Forfeiture Of Unclaimed Final Dividend For 2007
HKFE Announces Revised Margins For China Telecom Futures
HKEx: Changes Of Designated Securities For Short Selling
After Barclays, a Former Chief Strives to Revive His Reputation in Africa
CHAD BRAY and MICHAEL J. DE LA MERCED – NYTimes.com
When Barclays announced on Thursday that it planned to slash the size and scope of its investment bank, the British effectively halted a long campaign to become a true Wall Street powerhouse, one to rival Goldman Sachs and JPMorgan Chase.
Financial Technologies (India) Ltd. Board Meeting Outcome – Response To Arrest Of FTIL CMD, Jignesh Shah By Mumbai Police
The Company is distressed at the arrest of its CMD, Mr. Jignesh Shah by the Mumbai Police, despite Mr. Shah co-operating fully not only with the Mumbai Police but also with all other authorities, ever since the NSEL crisis surfaced in August 2013. The Company has full faith in the judicial system and is confident that Justice will be done in the case of Mr. Shah. The Company will continue to extend its full co-operation and support to all the authorities.
MCX Weekly Market Report – May 02, 2014 To May 08, 2014
Malawi Stock Exchange Weekly Trading Report – 09 May 2014