First Read

Are Your Interns Signed Up Yet?

There are three easy ways to sign up your interns in Chicago for our MarketsWiki World of Opportunity Summer Intern Education Series. We have two online sign-up forms, one for individuals and one for firms registering their interns. The last way is simply to email me directly at

The questions we ask are simple and straightforward. What is your name, email, company, name of supervisor, email of supervisor and which sessions do you want to attend. We will email the appropriate party an invoice for your registration.

Firms who are sponsors of the event get 25 free spots at all the sessions. So if you want to support this series, get some good advertising, and get 25 free spots, contact me for more details..

Also, here is the lineup of speaker we have so far and the dates they will be presenting.

On July 29, we have Ed Tilly of CBOE, Tony McCormick of BOX, Tim McDermott of NADEX, Ben Van Vliet of IIT Stuart School of Business and Matthew Rees of R.J. O’Brien

On July 31 we have Chris Hehmeyer of HTG Capital, Julie Holzrichter of CME Group, Mead Welles, Pat Kenny of CQG and Stefani Sandow of Trading Technologies

On August 5 we have Steve Brodsky of Spot Trading, Terry Duffy of CME Group, Chris Edmonds of ICE and Tom Cashman, a 50-year member of the CBOT

On August 7 we have Jim McNulty, John Ruth of ABN AMRO, Jamie Farmer of S&P Dow Jones Indices and Ethan Kahn of Wolverine Trading

Finally on August 8 we have Mike Gorham of IIT Stuart School of Business, Matthew Scharpf of Eurex and Steve Crutchfield of AMEX. We will be adding additional speakers to the latter events.

For more information on the Chicago event, and to access the registration page, click HERE


Why trading volume is tumbling, explained in 5 charts
Where have all the traders gone? That’s been a common refrain in the last few years for many market watchers. These folks worry that lower trading volumes for U.S. stocks might indicate a disturbing lack of confidence in the market, even as stock prices march higher and the Dow Jones Industrial Average DJIA -0.26% cracks 17,000.

***** The rise of futures, the decline of equities.


No Need to Demonize High-Frequency Trading
Bart Chilton, a former commissioner of the Commodity Futures Trading Commission, is a senior policy adviser at DLA Piper and the author of “Ponzimonium: How Scam Artists Are Ripping Off America.”
The accusation by the New York attorney general last month that a British bank misled some of its customers about the likelihood their orders would interact with high-frequency traders gives a glimpse into a big secret: speedy electronic trading is deeply entrenched in modern financial markets and investors’ orders aren’t being filled without them. In today’s world of global stock trading, high-frequency trading results in highly frequent liquidity.

***** The man who called high frequency traders “Cheetahs” now says not to demonize them?


The United States Senate Committee On Banking, Housing, And Urban Affairs: The Role Of Regulation In Shaping Equity Market Structure And Electronic Trading – Jul 8 At 10:00 AM
United States Senate Committee On Banking, Housing, And Urban Affairs
The United States Senate Committee On Banking, Housing, And Urban Affairs will meet on July 8, 2014, in open session to conduct a hearing entitled “The Role of Regulation in Shaping Equity Market Structure and Electronic Trading.”

****** The event of the day. Jeff Sprecher, Joe Ratterman, Ken Griffin & Tom Wittman should be interesting..


CEO Joe Ratterman’s Remarks for U.S. Senate Committee on Banking, Housing, and Urban Affairs
Mr. Ratterman Testifies on Matters Related to the U.S. Equity Capital Market Structure

***** Sneak peek at what Mr. Ratterman will say, I expect dispassionately.


James Gorman on the Future of Finance: Big Banks Will Get Bigger; But the Morgan Stanley CEO Also Expects Most Bank Branches to Disappear—and Cash to Become a Museum Piece
James Gorman, Morgan Stanley, WSJ
The threshold question: Will banks continue to exist? The answer is yes, because society will still need the two essential functions they provide: mobilisation of capital from providers to users, and facilitation of payments for goods and services.

***** Cash will be a museum piece? How will I buy gumballs?


Let’s Not Shortchange The SEC; The agency needs resources and political support to ensure the safety and pre-eminence of U.S. equity markets.
By Robert Greifeld, WSJ
Securities and Exchange Commission Chairman Mary Jo White has recently outlined a comprehensive agenda for the agency, including several initiatives aimed at reforming the nation’s equity markets. On Tuesday her agenda will take center stage at a Senate Banking Committee hearing on market structure and regulation.


ake Shop Crumbs Shuttering All Its Stores

NYT Business
Crumbs says it is shuttering all its stores, a week after the struggling cupcake shop operator was delisted from the Nasdaq.

***** When the name of the company being IPO’d is “Crumbs,” you can’t expect a lot to be left over.


Scottish Bagpipes Risk Drowning Out Carney Rate Guidance
By Scott Hamilton, Bloomberg
Mark Carney has got markets dancing to the tune of his forward guidance on interest rates. He could soon be drowned out by the sound of bagpipes.

****** Bagpipes are a weapon. You should never doubt that.


John C. Van Eck, Investor in Gold, Non-U.S. Stocks, Dies at 98
By Laurence Arnold, Bloomberg
John C. van Eck Jr., who offered Americans early avenues to invest in non-U.S. stocks and in gold, has died. He was 98. He died on July 1 at his home in Palm Beach, Florida, his company, New York-based Van Eck Global, said yesterday in a statement.

***** A long life, but can’t take the gold with him.


Securities Commission Malaysia: GIFF 2014 To Gather Industry Leaders To Explore Global Linkages For Islamic Finance
The Global Islamic Finance Forum (GIFF) 2014 from 2nd to 4th September 2014 will bring together globally renowned names in Islamic finance and business leaders to discuss opportunities to expand the industry’s reach in emerging and developed markets.

***** The next big thing: Islamic finance.


Navigational Beacon: NASDAQ OMX Group’s Hans-Ole Jochumsen Steering through Challenges
A recurring theme at this year’s IDX London was navigating the many challenges facing the financial sector. In this video, NASDAQ OMX Group’s Hans-Ole Jochumsen talks to John Lothian News about three such challenges – exchange competition, allocation of technology resources, and the global regulatory environment.

Watch the video »



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Lead Stories

Winners (Potentially) in a Goldman Succession
Goldman Sachs’ next CEO after Lloyd Blankfein may be determined in part by the timing of Mr. Blankfein’s next move. Here are five of the people potentially in the race for the top spot (in alphabetical order).

Let’s Not Shortchange The SEC
Robert Greifeld, in the Wall Street Journal
Securities and Exchange Commission Chairman Mary Jo White has recently outlined a comprehensive agenda for the agency, including several initiatives aimed at reforming the nation’s equity markets. On Tuesday her agenda will take center stage at a Senate Banking Committee hearing on market structure and regulation.

Playing Catch Up: Banks & Brokerages Battle for the Self-Directed Investor
by Chris Psaltos, WallStreet & Technology
Investors want easy-to-use interfaces, customized views, and dynamic content. Moving this kind of data to the front-end is a big ask for legacy back-office databases.

Banks Dreading Computer Hacks Call for Cyber War Council
By Carter Dougherty, Bloomberg
Wall Street’s biggest trade group has proposed a government-industry cyber war council to stave off terrorist attacks that could trigger financial panic by temporarily wiping out account balances, according to an internal document.

GoPro’s Surprisingly Muted Options Debut
by Steven Russolillo, WSJ MoneyBeat
Little has been quiet about GoPro Inc.’s stock-market debut. Until now. The camera maker’s options became eligible for trading on Monday, and so far the day has passed with little fanfare. Some 24,000 options contracts traded Monday as of 3:20 p.m. Eastern Time , according to Andrew Wilkinson, chief market analyst at Interactive Brokers. That leaves GoPro’s activity below the top 50 companies with the most actively traded options contracts, he said.

Commerzbank Said Next to Face Penalties in U.S. Probe
By Greg Farrell and Shane Strowmatt
Commerzbank AG (CBK), Germany’s second-largest lender, will probably be the next bank to resolve alleged U.S. sanctions violations, a person with knowledge of the matter said.

European Banks Seen Facing $50 Billion More in Legal Expenses
By Elisa Martinuzzi, Bloomberg
Europe’s banks face a further $50 billion of legal costs as they catch up with their U.S. counterparts, according to analysts at Morgan Stanley.

Big, bad bank fines are here to stay
By John Plender, FT
This is a dangerous game, especially for European banks. The cheery 3.6 per cent rise in BNP Paribas’s share price on the news of its near-$9bn fine for systematic, large-scale violations of US economic sanctions laws seems counter-intuitive, given that the US authorities appear to regard the global banking system as a treasure trove ripe for looting.

Investors Are Buying Troubled Golf Courses and Giving Them Makeovers
When the Gaillardia Golf and Country Club opened in 1998, it was to be the crown jewel of golf in Oklahoma City, complete with an 18-hole P.G.A. championship course and a 55,000-square-foot clubhouse of Norman-style architecture. The Gaylord family, best known as Oklahoma media moguls and owners of the Grand Ole Opry, sank a reported $59 million into the project

Wall Street Offers Clinton a Thorny Embrace
As its relationship with Democrats hits a historic low, Wall Street sees a solution on the horizon: Hillary Rodham Clinton.

Germany’s CFD providers look to boost market share
by Michael Marray,
Contracts for difference continue to nip at the heels of the leveraged structured products market in Germany, helped in part by having escaped the attention of regulators. But given their risky reputation and the shortage of major banks willing to offer them, can CFDs mount a serious challenge? Michael Marray reports


High-Speed Trading Risk Blamed on U.S. Regulations
Dave Michaels and Cheyenne Hopkins, Bloomberg
A technology arms race that risks destabilizing U.S. stock markets has emerged because of regulations intended to promote competition among the exchanges, Wall Street executives will tell a Senate committee.

Banks Face Added Capital Requirements; Basel Committee May Reduce Lenders’ Latitude on Weighing Risk
By Viktoria Dendrinou And David Enrich
Global banking regulators are considering new measures that would make it harder for banks to understate the riskiness of their assets, including potentially ending the long-standing treatment of all government bonds as automatically risk-free, according to people familiar with the discussions.

SEC Names Thomas J. Krysa as Associate Regional Director in Denver Office
The Securities and Exchange Commission today announced that it has named Thomas J. Krysa as the associate regional director for enforcement in its Denver office, where he will oversee enforcement efforts in seven western states.

Competition policy in regulated markets
Speech by Mary Starks, Director of Competition, FCA, at Chatham House, London
Today’s topic – competition policy in regulated markets – is close to my heart. I was hired last year from the Office of Fair Trading (OFT) to start up the FCA’s competition function. So to the extent that there is a “fence” between competition and regulation, I’ve worked on both sides of it.

ECB Summons Bankers for Catch-Up as Stress Test Looms
By Jeff Black, Shane Strowmatt and Sonia Sirletti, Bloomberg
Europe’s lenders are running out of time to get their books in order before the European Central Bank passes judgment on them.

Exchanges & Trading Facilities

Nasdaq OMX NLX latest to suffer data glitch
Luke Jeffs
Nasdaq OMX NLX, the nascent European rates market, suffered its second operational problem in a month when two of its data portals were unavailable as the market opened on Monday. The exchange said in a statement: “Primary server for FIX Drop and Market Data ports was temporarily unavailable earlier today. Both servers are now up and running.”

TFEX’s Derivatives Volume Leaps 38 Pct In H1 2014
Thailand Futures Exchange PCL (TFEX), under the Stock Exchange of Thailand group, revealed that its first-half derivatives trading volume increased 38 percent to 93,834 contracts per day from a year earlier, underpinned by newly launched mini SET50 futures and stock futures, reinforcing TFEX’s commitment to boost liquidity and develop new products to the Thai capital market.

Donna Oosthuyse, Managing Director And Chief Country Officer For Citi South Africa To Join JSE Executive
The JSE is delighted to announce that Donna Oosthuyse, currently the Managing Director and Chief Country Officer of Citi South Africa will join the JSE Executive as the Director: Capital Markets in August.

SGX Launches Liquidity Hub In Hong Kong
Singapore Exchange (SGX) today announced the launch of its liquidity hub at Hong Kong Exchanges and Clearing Limited’s (HKEx) Data Centre.

Dubai’s DMCC considers new agricultural contracts, delays spot gold
The Dubai Multi Commodities Centre (DMCC) said it would delay launch of a spot gold contract to the third quarter to ensure that the technical aspects run smoothly and was studying possible contracts for several agricultural commodities.

Senior Systems Engineer – Monitoring – Belfast
CME Technology and Support Services is relentlessly focused on developing the worlds most advanced electronic trading, post trade processing and risk management systems. As part of CME Group, we are the world’s leading and most diverse derivatives market place providing risk management solutions that help drive the global economy. Our customers include leading investment and commercial banks, hedge funds, proprietary trading firms, pension funds, sovereign wealth funds, asset managers, corporations, and individual traders.

BATS Global Markets Announces June Volume and Activity
Market Share Remains Strong Globally; Company Plans New York, Chicago Expansion

Hedge Funds & Managed Futures

Hard-hit macro hedge funds stage nascent turnaround; Gains Come After Three Consecutive Years of Losses
By Laurence Fletcher, WSJ
Global macro hedge funds are showing signs of life after weathering a difficult period. These funds, which bet on movements in instruments as diverse as bonds, equities, currencies and commodities, are famous for large returns and big directional trades by the likes of billionaire George Soros. In recent years, the funds’ returns have been hurt by the difficulty of predicting the moves of politicians and lawmakers.

Why Cash Is King for This Small-Cap Investor
By Steven Russolillo, WSJ
With the Dow Jones Industrial Average above 17000 and the market setting new highs on an almost daily basis, one investor is sticking to cash.
Eric Cinnamond of Aston/River Road Independent Value is among a small group of mutual-fund managers who are comfortable letting cash pile up in their portfolios. Some 70% of his fund’s assets are in cash, earning almost nothing. Yet he is confident that the ultra-conservative position will prove beneficial in the long run.

Coconut Water Beating Hedge Funds Lures Ex-Trader
By Bei Hu, Bloomberg
When former hedge-fund trader Jane Gottschalk went back to work in Hong Kong after having five children, the finance world wasn’t her top pick.

Banks & Brokers

At Goldman, Board Samples New Guard; Firm Uses Private Dinner Meetings to Help Assess Next Generation of Leaders
By Justin Baer, WSJ
Goldman Sachs Group Inc. has stepped up its efforts to groom a new generation of leaders, as it broadens the list of executives who could eventually run the Wall Street firm.

ICAP’s Co-Head of EBS Market Leaves Broker; Nichola Hunter Departs Currencies-Trading Platform
By Jenny Strasburg, WSJ
The co-head of ICAP IAP.LN -2.14% PLC’s flagship electronic currencies-trading platform has left the London-based firm, just over a year after she was promoted to the position, according to people familiar with the move.

Liquidnet hires from Macquarie for global role
Anna Irrera and Matt Turner, Financial News
US-based dark pool operator Liquidnet has hired a senior electronic trading executive from Macquarie Bank into a new global role overseeing its ancillary businesses.

Former Barclays CEO Bob Diamond Signs Up for Twitter
By David Enrich and Francesco Guerrera, WSJ
The Twitter-sphere has its newest celebrity user: Bob Diamond. OK, so the former Barclays CEO isn’t exactly Justin Bieber or Katy Perry. But in the finance world, they don’t come much bigger than Mr. Diamond, who stepped down as CEO of Barclays in July 2012 after the British bank admitted trying to rig benchmark interest rates. These days, Mr. Diamond is spending much of his time helping run Atlas Mara, which is focused on buying banks in Africa.

TradeKing Enters the Online Advisory Market
by Ivy Schmerken, WallStreet & Technology
As robo-advisers target independent investors with automated tools, TradeKing teamed with Morningstar’s Ibbotson Associates to deliver professionally managed portfolios with low fees.

Top Wall Street Analyst Heads Back to School
by Sarah Krouse and Mike Foster, WSJ MoneyBeat
Brad Hintz, a Sanford C. Bernstein analyst and one of the leading names covering U.S. bank stocks, will retire later this year and become a professor at a top business school.

Clearing & Settlement

Clearing houses to publish risk models
By Philip Stafford, FT Trading Room
Clearing houses will be required to publish their models for calculating traders’ risk in their derivatives trades under principles set to be endorsed by global securities regulators.

Germany Seeks Savings With First Collateral on Rate Swaps
The Federal Finance Agency, which manages the Finance Ministry’s budget and short-term liquidity funding, plans to increase savings on the interest-rate swaps it currently uses by offering collateral on as much as 8 billion euros ($10.9 billion) of the trades as early as next year, agency spokesman Joerg Mueller said July 5 by phone. The agency may at the same time opt to use a central derivative clearing house in London and appoint a company such as Eurex Clearing AG to settle the transactions, he said.

MarkitSERV Connects to KRX for Swaps Clearing
Marina Daras,
MarkitSERV, Markit’s electronic trade processing service for over-the-counter (OTC) derivative transactions, has connected to Korea Exchange (KRX) for the clearing of interest-rate swaps.

Questions remain over US CCP liquidity rules
By Joe Rennison,
CME has been waiting seven months for its liquidity plans to be approved Markets regulators will not require CCPs to have contractual liquidity commitments – but Fed is said to retain concerns and CCPs need approval from both camps

Eurex Clearing Publishes White Paper On The Systemic Role Of Central Counterparties – Central Counterparties (CCPs) Reduce Systemic Risk In Financial Markets/ Specific Recovery And Resolution Frameworks For Financial Market Infrastructures Support The Benefits Of The CCP Model
Central clearing significantly reduces systemic risk and their amplifying factors in financial markets.

Indexes & Products

S&P Dow Jones goes equal weight on commodity index
by Richard Jory,
S&PDJI moves DJ-UBS commodity index to equal weighting; Nasdaq partners with ETRE Financial for Reit indexes; Six launches new sustainability index; Stoxx licenses minimum variance to Japan’s Resona Bank


Pierpont Selects SunGard’s Loanet for Securities Finance
By Jake Thomases,
Pierpont Securities, a specialized fixed income shop, has selected SunGard’s Loanet to help manage its securities finance operations, including trading, inventory management, accounting and settlement.


Trial of Rajaratnam’s brother ends as defense says U.S. case flawed
By Nate Raymon, Reuters
A lawyer for Rengan Rajaratnam on Monday compared the government’s insider trading case against the younger brother of Galleon Group founder Raj Rajaratnam to a jigsaw puzzle where the pieces had been wrongly jammed together.

Environmental & Energy

A California Oil Field Yields Another Prized Commodity
The 115-year-old Kern River oil field unfolds into the horizon, thousands of bobbing pumpjacks seemingly occupying every corner of a desert landscape here in California’s Central Valley. A contributor to the state’s original oil boom, it is still going strong as the nation’s fifth-largest oil field, yielding 70,000 barrels a day.

PEGAS: Introduction of order books for Gas Quality-Spreads
PEGAS will open quality spread order books between H-gas and L-gas on 17 July 2014. As a result market participants will be able to trade the price difference between gas qualities of Lgas and H-gas inside the market areas of GASPOOL and NCG.


Chi-X calls for real competition reform in financial markets
Financial Review
Chi-X has called for “genuine reform” of the way competition works within local financial markets, as it highlighted the pitfalls of operating against a dominant entity such as the Australian Securities Exchange.

HKEx: On-Floor & Off-Floor Trading Statistics
Transaction in Terms of Turnover and Number of Trades Conducted On-floor and Off-floor Main Board + Trading Only Stock

Dalian Commodity Exchange: Q & A On Night Trading
Dalian Commodity Exchange
At 21:00 on July 4, Dalian Commodity exchange (DCE) will officially launch the night trading, bringing the number of the domestic products with night trading to eight and thus forming the more comprehensive and diversified “Chinese commodities sector” in the trading hours of the international market.

HKEx Welcomes May Tan to its Risk Management Committee
Hong Kong Exchanges and Clearing Limited (HKEx) welcomes Tan Siew Boi, May, the new Chairman of the Hong Kong Interbank Clearing Limited (HKICL), to its Risk Management Committee (RMC).

Frontier Markets

Clearing terminal is discontinued due to the closure of Standard sector
Moscow Exchange
Due to the closure of Standard sector of Equity market, the Clearing terminal software operation and support ends on 21 July 2014.

Moscow Exchange Monthly Market Report: June 2014
Moscow Exchange
The total monthly trading volume on the Moscow Exchange’s markets in June was RUB 37.2 tln. The average daily trading volume was RUB 1.86 tln, up 2% MoM. Trading in securities, RDRs, and mutual fund units made up 2.1% (RUB 0.76 trln) of the total trading volume, the bond market’s share was 2.2% (RUB 0.8 trln), the derivatives market made up 9.4% (RUB 3.5 trln), and the FX and money market accounted for a combined 86.1% (RUB 32.4 tln).

Dubai’s DMCC considers new agricultural contracts, delays spot gold
By Maha El Dahan, Reuters
The Dubai Multi Commodities Centre (DMCC) said it would delay launch of a spot gold contract to the third quarter to ensure that the technical aspects run smoothly and was studying possible contracts for several agricultural commodities.

Sebi rejects MCX request to hold on to stake in MCX-SX
By Reena Zachariah & Ram Sahgal, ET Bureau
The Securities & Exchange Board of India, or Sebi, has shot down commodity bourse MCX’s request not to club its shareholding in MCX Stock Exchange (MCX-SX) with that of Financial Technologies, which the regulator found unfit to own shares in bourses following its alleged role in the Rs 5,600-crore National Spot Exchange (NSEL) scandal.

MCX proposes sharp scale-down of software contract with FTIL
Sharleen D’souza, Business Standard
Sources say the move is to bring the contract to a sensible level, failing which MCX would be looking for another software vendor


French police dismantle illegal Bitcoin exchange
French police have dismantled an illegal Bitcoin exchange and seized 388 virtual currency units worth some 200,000 euros ($272,800) in the first such operation in Europe, a public prosecutor said on Monday.

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