Little pay-for-performance among mutual fund managers
James Saft – Reuters
In the mutual fund industry the one thing fund managers are not paid for, as a general rule, is performance.
A new study using the publicly available tax returns of mutual fund managers in Sweden portrays a mutual fund industry in which the interests of fund company owners and their managers are aligned, but those of fund managers and investors only kind of bump along together, almost randomly.
**JK: We could use a bit more alignment.
Yahoo’s Top Lawyer Resigns and C.E.O. Marissa Mayer Loses Bonus in Wake of Hack
Yahoo’s top lawyer, Ronald S. Bell, resigned Wednesday, and its chief executive, Marissa Mayer, lost her 2016 bonus after a board investigation of the 2014 theft of information on more than 500 million user accounts.
**JK: I’ve switched my personal email to Gmail.
Should You Move (Your Money) to Canada?
Some anxious Americans say they have at least considered the option of opening bank accounts in Canada, figuring that stashing some money outside of the country may provide peace of mind in uncertain times.
**JK: TMX would love for you to shift some money to Canada’s markets.
5 Questions with Ilan Levy-Mayer of Cannon Trading
Ilan Levy-Mayer is the vice president of Cannon Trading Company and chief trader for LEVEX Capital Management Inc., a commodity trading advisor. Levy-Mayer specializes in futures and commodities trading using technical analysis and algo trading. He oversees trading systems, risk and online marketing at Cannon while also running a trading program with LEVEX. A former professional basketball player, Levy-Mayer has been in the futures industry since 1998.
**JK: Read about his cross-over.
Workers Are Working Longer — and Better
When Bonnie Leonard retired from academia at age 65, she knew she was not done working.
“Not for a minute!” said Ms. Leonard, now 79. “I just thought about what I wanted to do next.”
After nearly 20 years as dean of continuing education at Wellesley College in Massachusetts, she thought she might go back into teaching, or move into development work, because fund-raising had been part of her job at the college. Instead, she decided to learn how to help others manage change: Since 2002, Ms. Leonard has been running her own coaching business, focusing on middle-aged women who are looking to make career and life transitions.
**JK: Love what you do and you won’t work a day in your life.
Wednesday’s Top Three
In a rare occurrence, we had a tie for our top read stories. The Word Federation of Exchanges’ Q&A on Bill Brodsky and Reuters piece on the LSE and Deutsche Boerse, Europe left exposed by demise of Anglo-German exchange merger, were our top two, or one; whichever you want to call it. Our John Lothian News video interview with Walt Lukken Three ideas for Trump and FIA Boca Optimism was third.
94,798,182 pages viewed; 22,367 pages; 204,045 edits
London Stock Exchange fiasco does not bode well for post-Brexit Brussels
Deutsche Boerse’s Carsten Kengeter is none too happy about being abandoned by his proposed merger partner. Yesterday’s passive aggressive comments about the LSE’s decision against complying with an antitrust demand from Brussels followed stories claiming that the UK side of the £21bn deal was looking for an excuse to call it all off.
Bridgewater Associates, World’s Biggest Hedge Fund, Shakes Up Leadership
Dealbook – NY Times
Ray Dalio, the billionaire founder of Bridgewater Associates, the world’s biggest hedge fund, is stepping down from its day-to-day operation as he continues to struggle to find a successor to run the firm, known for its unusual culture of “radical transparency.”
EU Carbon Permits Jump After Ministers Agree on Market Overhaul
Deal includes option to cancel some allowances in reserve
Plan allows removal of permits from market at faster pace
European Union emission allowances climbed to the highest in almost two months and trading surged after environment ministers agreed on a carbon-market overhaul aimed at reducing a glut and boosting prices from 2019.
In Snap’s I.P.O., Evidence of Bankers’ Strategy
Dealbook – NY Times
Snap’s bankers deserve more than the commissions they will receive for a successful, perhaps flawless, initial public offering.
The offering priced on Wednesday at $17 a share, more than the earlier expected range of $14 to $16. That will value the company at nearly $24 billion and make the company’s founders, Bobby Murphy and Evan Spiegel, worth more than $3 billion each.
What Booming Markets Are Telling Us About the Global Economy
The stock market reached yet another new high on Wednesday, the latest development to make a mockery of what savvy economic commentators thought they knew about the world.
Consider how things looked one year ago. The world economy seemed hopelessly trapped in a cycle of low growth and inflation. Markets recoiled at the mere possibility that the Federal Reserve would raise interest rates. Populist political insurgencies seemed to threaten yet more financial market chaos.
Dow Pierces 21,000 After Trump Speech, Rate-Hike Chatter
The Dow on Wednesday blasted through the 21,000 mark for the first time after U.S. President Donald Trump’s measured tone in his first speech to Congress lifted optimism and investors viewed a looming interest rate hike as a glass half full.
The three main stock indexes surged more than 1.3 percent to close at record highs.
Surging Goldman Shares Keep Powering Dow to Records
MoneyBeat – WSJ
Big banks kick-started the postelection rally and they continue to drive it.
As the Dow Jones Industrial Average crossed 21000 for the first time in its history on Wednesday, Goldman Sachs Group’s share price, at $253, makes it the most-influential member of the 30-stock average. Goldman’s stock advance of more than 36% since Election Day translates into 453, or 16%, of the nearly 2800-point advance, according to WSJ Market Data Group. The Dow is price-weighted, meaning pricey stocks have more influence that cheaper ones.
Exchanges, OTC and Clearing
Old School Trading Pits to Remain After High-Tech Exchange Deal
When Roma Colwell-Steinke arrived at the Chicago Board Options Exchange in October 1989, she couldn’t believe how many floor traders there were in their colorful jackets, calling out orders.
“We get to the gallery there and I looked out at the CBOE and I’d never seen anything like that,” said Colwell-Steinke, who was in her 20s at the time. “There are 4,500 people running around all over.”
LME Announces Fee Schedule And Latest Clearing Members For LMEprecious
The London Metal Exchange (LME) and LME Clear are pleased to announce a competitive fee schedule for their precious metals contracts, with nine LME clearing members having already expressed their intention to trade and clear the contracts.
Four more intend to sign up as clearing members of LME’s precious contracts
Four more financial firms, including Bank of China International, have agreed to participate as clearing members in the London Metal Exchange’s new suite of precious metals contracts when they launch on June 5, the LME said on Thursday.
Bank of China International, Commerzbank, Marex Financial and Macquarie Bank have agreed to take part in the LMEprecious suite of gold products, including spot, futures and options contracts, that the LME announced in August.
Moscow Exchange announces results for the full year 2016
Press Release – Moscow Exchange
Moscow Exchange (MOEX) today announces its financial results in accordance with International Financial Reporting Standards (IFRS) for the year ended 31 December 2016. The Exchange delivered solid financial results driven by record fees and commission income from its Derivatives, Fixed Income and Money Markets.
Wall Street Still Waiting on Blockchain
Wall Street still needs to wait an elusive “couple more years” before it can expect to see distributed ledger-based applications running across financial services firms, according to an audience survey taken during the DTCC’s Fintech Symposium 2017 in Midtown Manhattan.
Colt to launch 100Gbps services in Hong Kong by July 2017
Colt Technology Services has announced that it is expanding its IQ network to Hong Kong by July 2017, launching high-speed bandwidth up to 100Gbps.
Turquoise connects mid-point matching engine with QuantHouse data f…
QuantHouse, the global provider of innovative market data services, trading and infrastructure solutions, today announced that Turquoise® has extended the QuantHouse real-time primary market data feeds to its Turquoise Plato™ midpoint matching services
F.C.C., in Potential Sign of the Future, Halts New Data Security Rules
The Federal Communications Commission on Wednesday halted new government rules related to data security from taking effect this week, in a potential prelude to a broader repeal of privacy protections for users of high-speed internet.
After a 2-to-1, party-line vote by the Republican-led commission, Ajit Pai, the chairman, announced that a portion of privacy rules passed in October would be temporarily stayed.
U.S. Senators draft bill to boost employee private stock ownership
A bipartisan pair of lawmakers on the U.S. Senate Banking Committee are planning to introduce a bill that aims to entice private corporations to give their employees larger equity stakes in their companies and promote longer-term investing.
Trump Taj Mahal sold after losing owner $300m
Billionaire investor Carl Icahn has reached a deal to sell the shuttered Trump Taj Mahal casino in Atlantic City to Hard Rock International and two New Jersey investors.
The sale comes four months after Icahn closed it amid a crippling strike.
A sale price was not revealed.
Trump Faces the Tyranny of High Expectations
The stock market is setting the bar higher and higher for President Donald Trump. Investors had better hope he clears it.With stocks rocketing to new highs on Wednesday in the wake of Mr. Trump’s speech before Congress Tuesday night, it is worth recounting what has happened this week to spur the rally.
WSJ Wealth Adviser Briefing: Fiduciary Rule Delayed – MoneyBeat
MoneyBeat – WSJ
Will it stay? Will it go? Or will it be revised? We’re talking about the fiduciary rule, of course, in light of the Labor Department’s proposal to delay its April 10 implementation by 60 days (at least). And while many in the industry welcome a delay in the rule’s implementation and are hopeful that it will […]
SEC Takes First Step on Disclosure of Bank Loans to States, Localities
The Securities and Exchange Commission took a first step toward shedding light on loans from banks to states and localities that are increasingly being used to finance infrastructure projects, rather than issuing debt in public markets.
The SEC on Wednesday unanimously voted to propose new requirements that state and local governments disclose the details of the bank loans, helping to illuminate a corner of the nearly $4 trillion municipal-bond market where there is currently no consistent reporting.
SEC advisory committee to question Snap’s transparency for investors
An investor committee that advises the U.S. Securities and Exchange Commission will next week review if Snap Inc’s decision to deny shareholders voting rights might also reduce the social media company’s public disclosures on executive pay and other governance matters, the head of that committee told Reuters on Wednesday.
The SEC-Induced Stock Market Morass
First, we examine the reaction of three small exchanges to the fragmented stock markets resulting from the ill-conceived NMS.
Stock market participants at the institutional level have been dealt a new hand of cards by the SEC’s forced exchange designation for IEX. Michael Lewis’ book “Flash Boys” vilified high frequency trading (HFT) and the exchanges that promote it. His attack squeezed the SEC into a favorable decision on IEX – a nascent exchange that promises protection from HFT strategies for the buy-side traders that believe they need it.
FCA finalise plans to place a deadline on PPI complaints
The final deadline for making a new PPI complaint will be 29 August 2019. To encourage consumers to decide whether to act about PPI before the deadline, the FCA will run a two-year consumer communications campaign, which will be launched in August 2017.
Investing and Trading
Reluctant Bull Says This Rally Isn’t About Fundamentals
Wall Street stock strategists are starting to throw their weight behind this bull market
Skeptical Wall Street stock strategists are starting to throw their weight behind the recent rally.
Savita Subramanian, Bank of America Merrill Lynch equity and quant strategist, is now calling for the S&P 500 climb another 3.7% by the end of this year as stock market fundamentals “take a back seat to sentiment and technicals.” Ms. Subramanian raised her price target on the stock benchmark to 2450 from 2300 in a research report published on Wednesday.
E*Trade Financial joins rivals in cutting trade commission
Discount brokerage E*Trade Financial Corp joined rivals in slashing trade commissions amid intense competition to attract customers.
Credit Suisse to transfer Swiss asset management business to new entity
Credit Swiss will transfer its Swiss asset management business to a new entity due to begin operations under its own license at the end of March, the bank said on Thursday.
Hedge Funds – Despite Outflows, 2017 Much Improved Start vs. 2016
After the industry endured its most difficult period of redemption pressure in 2016 since the end of the financial crisis, we have been eager to see what kind of sentiment investors would bring to their hedge fund allocations in 2017. Despite flows being negative in January, the level of redemptions does not appear concerning. Outflows were centralized within products which underperformed in 2016, and there were many positive metrics at the fund level.
China’s New Watchdog to Tackle Shadow Banking, Property Bubbles
Wealth-management products now exceed $4 trillion, CBRC says
Guo hopes to ‘expose the financing hidden in the shadows’
China’s banking regulator outlined wide-ranging efforts to rein in financial risks, including clamping down on shadow lending and curbing funding for property speculation.
Hedge Funds May Be Falling Back in Love With Commodities
Hedge funds are raising their exposure to commodities as prices rally and investors respond to macro shifts including the prospect of accelerating inflation under U.S. President Donald Trump, according to Citigroup Inc.
Japan bank consortium plan to use blockchain technology from Google-backed Ripple to make payments
Saheli Roy Choudhury – CNBC
A consortium of Japanese banks is planning to use distributed ledger technology — better known as blockchain — from a Google-backed fintech start-up to make domestic and international payments.
Asia markets surge after Trump’s speech ‹ Japan Today: Japan News and Discussion
Asian markets surged Thursday, picking up the baton from record performances in New York and Europe where traders cheered upbeat U.S. economic data and Donald Trump’s conciliatory speech to Congress.
The U.S. president’s much-anticipated address on Tuesday, while lacking details, was broadly welcomed as he promised a trillion-dollar infrastructure splurge and tax cuts—music to bullish investors’ ears.
China says supports WTO after U.S. trade threat
China supports the work of the World Trade Organization (WTO), the country’s foreign ministry said on Thursday, after U.S. President Donald Trump’s administration said it might defy WTO rulings it viewed as interfering with U.S. sovereignty.
Maintaining a fair and open multilateral system with the WTO at its center benefits global economic growth and is in the interests of everyone, foreign ministry spokesman Geng Shuang said.
For China’s Factories, a Weaker Currency Is a Double-Edged Sword
At first glance, given the way that China controls its currency, the Guangdong Chigo Air Conditioning Company might seem like a winner.
For the past three years, China has allowed its currency, the renminbi, to weaken in value compared with the American dollar. On paper, that should bolster Chigo’s profits. Half of its $1.2 billion in annual sales come from abroad, mostly in dollars, and a weaker renminbi gives Chinese companies an advantage when they sell their products in other countries.
Japan’s long-depressed stock market could bring spectacular returns soon
The best investment decisions are almost always those that feel most uncomfortable at the time they are made. George Soros says he gets terrible backache when running his biggest positions. ‘If it ain’t hurting, it ain’t working’ is a good motto to put on your computer screen.
US agency freezes assets of Maybank KE Singapore customers on suspicions of insider trading
The United States Securities and Exchange Commission (SEC) has frozen the assets of certain unknown customers of Singapore broker-dealer Maybank Kim Eng Securities on suspicions of insider trading.