London Stock Exchange poised to reject £32bn Hong Kong bid

Sep 12, 2019

First Read

CFTC v Thakkar: a fishing license
Thom Thompson – John Lothian News

Jitesh Thakkar, the Chicago computer programmer charged with aiding and abetting a market manipulation by supplying software, was back in court on Wednesday. Thakkar’s attorney, Renato Mariotti, presented his motion for summary judgment at least to forestall lengthy discovery by the CFTC. The CFTC with its considerably greater resources is playing the long game, seemingly hoping to impoverish the defendant into a guilty settlement plea before the agency loses the same case the Department of Justice already abandoned as unwinnable in July.

To read the rest of this commentary, go here.


Hits & Takes
By JLN Staff

Episode 3 of the CryptoMarketsWiki Podcast is now up! In this podcast Bill Ulivieri, former Cboe market maker and principal of Cenacle Capital Management LLC, talks about bitcoin as a store of value and how he thinks crypto will fit into the future of global finance. Click HERE to listen.~MR

If you want to see just how bad the flooding was in the Midwest this year, see the New York Times’ The Great Flood of 2019: A Complete Picture of a Slow-Motion Disaster.~JK

CQG is holding an Ameribor webinar titled “An Introduction to the AFX AMERIBOR and the CBOE AMERIBOR Futures.” During the webinar, AFX representatives will explain in detail the methodology behind the AMERIBOR (American Interbank Offered Rate) cash markets. A CQG Product Specialist will then walk you through monitoring and trading the AMERIBOR futures contracts.~JJL

Yesterday in the Cboe Three-Month AMERIBOR Futures, 26 traded, but open interest jumped 25 contracts to 88.~JJL

The Security Traders Association (STA) is holding its 86th Annual Market Structure Conference in Washington, D.C. October 2-4 this year. Speakers include SEC Commissioner Hester Peirce, MarketAxess President Chris Concannon, NYSE President Stacey Cunningham, and others. You can go here for more information.~SR

Correction: An early version of Jim Kharouf’s column HKEX and LSE, A Capitalist’s Conundrum stated that SGX was protected from a merger with the Australian Stock Exchange in 2010. It was the Australian government that blocked the SGX bid for ASX in April 2011 on national interest grounds. Apologies for the error. Interestingly, had the deal gone through, SGX-ASX would have been the second largest exchange by market cap in Asia, behind, yep, HKEX.~JK

The Lori Kevin video JLN published today from this summer’s MarketsWiki Education World of Opportunity series is a must watch for anyone in any organization.~JJL


Lori Kevin – Security Threats in Today’s Digital World

In this video from MarketsWiki Education’s World Of Opportunity event in Chicago, Lori Kevin, managing director of operations for CSG, talks about the many security threats companies face in today’s digital world, including identity theft, of which she was a victim, and how to fight off these threats with the right policies and procedures.

Watch the video »


Mosaique and Adjoint Announce Partnership
Mosaique, a Chicago-based FinTech offering multi-asset post-trade solutions, and Adjoint, a Boston headquartered distributed ledger technology firm, announce partnership to transform the manual, costly practices of the prime brokerage lifecycle.

**For those wondering what DLT pioneer Mehdi Zhiri is up to, here you go.~JK


This is not the time to sell a pillar of the City: ALEX BRUMMER on why a bid for the London Stock Exchange from Hong Kong MUST be declined
Alex Brummer – Daily Mail
Hong Kong and London are both global financial centres wracked by political chaos. The idea that this surprise bid comes at a suitable time for the 448-year-old London Stock Exchange to give up its hard-earned independence is preposterous.

****Alex makes some good points.~JJL


The @mlb record for home runs was set tonight at 6106 and climbing
Darren Willman – via Twitter
Here’s an animation of every home run hit this year colored by exit velocity

*****I put baseballs in my juicer every morning for a nice fresh glass of homerun.~JJL


Wednesday’s Top Three
JLN columns took the gold and silver medals on the podium yesterday, if only we actually held a ceremony each day. Our top read story on Wednesday was Jim Kharouf’s JLN column, HKEX and LSE, A Capitalist’s Conundrum. Second was Thom Thompson’s JLN column Bakkt readies CME challenge. Third was the RCG Division of Marex Spectron Statement on the Passing of Futures Industry Pioneer J. Robert Collins


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Lead Stories

London Stock Exchange poised to reject £32bn Hong Kong bid; Shares in HKEX fall amid scepticism over political risk and deal structure
Philip Stafford, Owen Walker and Daniel Thomas and Hudson Lockett – FT
The Hong Kong bourse’s audacious £32bn bid for the London Stock Exchange faces rejection amid doubts about political risk and deal structure, according to people briefed on the offer.

CME Group to Launch New Shanghai Gold Futures Contracts on October 14 Connecting Global Market Participants to the Chinese Physical Gold Market; Shanghai Gold Exchange (SGE) to Introduce New T+N Contracts Linked to COMEX Gold Futures Asia Spot Prices
PR Newswire
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of two new gold futures contracts on October 14, 2019, pending regulatory approvals.

Texas oil tycoon and corporate raider T. Boone Pickens dies at 91; US financial pioneer was one of the most feared dealmakers of his day
Richard Waters – FT
T. Boone Pickens, who has died at the age of 91, was the very model of the corporate raider. His radical views on business, his visceral dislike of big corporations and his instinct to go for the jugular made him one of the most feared dealmakers of his day.

U.K. Could Block Hong Kong Bid for London Exchange; U.S. regulators would also have a say on any deal if offer gains traction
Simon Clark, Anna Isaac and Alexander Osipovich – WSJ
The U.K. government could refuse to approve a potential $36.6 billion takeover of London Stock Exchange Group LSE 0.44% PLC by its Hong Kong rival because it forms too critical a part of the country’s financial infrastructure, according to people familiar with the matter.

U.K. Government Outlines ‘Worst-Case Scenario’ for No-Deal Brexit; Report describes potential shortages of fuel and medicines, long traffic jams at ports and rising food prices
Max Colchester and Stephen Fidler – WSJ
The British government described potential shortages of fuel and medicines, long traffic jams at ports and rising food prices in a report outlining its “reasonable worst-case scenario” if the U.K. left the European Union without a deal to smooth its exit.

Ground Zero Ceremony Marks 18th Anniversary of 9/11 Attacks; For many families of victims, the pain of loss lingers
Katie Honan and Catherine Lucey – WSJ
Marjorie Miller returns often to the place where her husband died, now a memorial of black stone and falling water. But it is on the anniversary of his death that she is most drawn to the site where two 110-story towers stood until Sept. 11, 2001.

Swiss Bank Group Lambasts Negative Rates for Damaging the Economy
Catherine Bosley – Bloomberg
The Swiss Bankers Association criticized the central bank’s policy of negative rates, saying it was causing “massive structural damage” to the economy.

Banks Are Finally Starting to Account for Climate Change Risk; Hidden carbon footprints on the books could be the next dodgy mortgage.
Saijel Kishan – Bloomberg
Behind the scenes at some of the world’s biggest banks, small teams of employees are busy trying to calculate what might prove to be one of the most important numbers any financial institution will ever disclose: how much the assets on their balance sheet are contributing to global warming.

France says it will not support Libra’s development in Europe; Finance minister says cryptocurrency endangers governments’ monetary sovereignty
Harriet Agnew – FT
French finance minister Bruno Le Maire said on Thursday that France refuses to support the development of Facebook’s Libra cryptocurrency in Europe because it puts the monetary sovereignty of states “in danger,” could result in systemic risks, and undermines the fight against financing terrorism.

Banks hail ‘golden age’ in FX amid evolving buy-side relationships; Panel of major banks at TradeTech FX agree the sell-side have changed the mentality around new product development, as the buy-side seeks increased automation and integration.
Hayley McDowell – The Trade
Foreign exchange trading businesses at sell-side institutions are experiencing a ‘golden age’ in comparison to equities and fixed income, as banks continue to adapt to the buy-side’s needs in terms of new product development.

Exchanges, OTC and Clearing

London Stock Exchange Bid Is Latest in String of U.K. Deals
Michael Msika and William Canny – Bloomberg
If the appetite for U.K. equities is still pretty weak among asset managers, that’s not the case for overseas companies. While Brexit has dominated headlines lately, another major theme has been the sale of U.K. Plc. The latest target is the venerable London Stock Exchange, which can trace its roots back to 1698. As Britain’s divorce appears to near its conclusion, the trend might continue.

LSE board poised to decide fate of Hong Kong exchange’s $39 billion offer
Jennifer Hughes, Sumeet Chatterjee, Sinead Cruise – Reuters
The London Stock Exchange’s (LSE.L) board will meet in coming days to make a decision on the Hong Kong bourse’s surprise $39 billion takeover proposal, a source close to the British company said on Thursday, as the market poured cold water on the deal.

Clearstream Staff Suspected of Misleading Authorities on Tax Fraud Scandal
Karin Matussek – Bloomberg
Clearstream unit’s role in German tax scheme bigger than known; Warrant cites meeting with Barclays, emails to Scotia Capital
Deutsche Boerse AG’s Clearstream unit may have had a bigger role than previously known in Germany’s most controversial tax scandal, and may have misled authorities about it, according to a warrant in the case.

Hong Kong stock market operator shares slide after £32bn LSE bid; Investors wipe off more than $1bn in value with London bourse poised to reject offer
Daniel Shane and Hudson Lockett – FT
Shares in the operator of the Hong Kong stock market dropped a day after it made a £32bn takeover bid for the London Stock Exchange, in a transaction that is expected to be rejected in the face of pushback from investors and regulators.

The Hong Kong Exchange’s bid for the LSE highlights its desire to finally build the data business it’s lacked to compete with its rivals
Dan DeFrancesco – Business Insider
Selling data is big business for exchanges, and the Hong Kong Exchange wants in on the party.

HKEX yet to realise its grand ambitions for London Metal Exchange; Group’s existing City asset has not been the bridge to China envisaged by its chief
Henry Sanderson and Neil Hume – FT
Hong Kong Exchanges and Clearing already owns one venerable City of London institution — the London Metal Exchange.

Euronext announces quarterly review results of the AEX®, AMX® and AScX®
Euronext today announced the results of the quarterly review of the AEX®, AMX® and AScX® indices. The changes due to the review will be effective from Monday, 23 September 2019.

Fixed Income Highlights – September 2019 edition
The French and Italian segments continue to grow, having outperformed YoY growth of the core benchmark sectors. We are starting to see our Fixed Income ETF options segment picking up and I’m excited by what we can potentially achieve in this space. Again, thank you to our members and partners for supporting us on this journey.

Equity Index Highlights – September 2019 edition
Just when investors thought it was safe to step away for a well-earned August holiday, the markets decided to get interesting! Most of the negative equity returns struck in the first half of August as markets absorbed the one-two punch of an escalating Sino-American trade war with neither side backing down, combined with the US 2yr / 10yr yield curve inversion.

Introduction of a “Product Specific Supplement for Inter-Product Spreads in fixed income futures” to the Liquidity Provider Agreement
The Management Board of Eurex Deutschland and the Executive Board of Eurex Frankfurt AG took the following decision with effect from 16 September 2019:

Deutsche Börse opens new office in Cork
Deutsche Börse
Deutsche Börse and Clearstream, the Group’s post-trade service provider, today celebrated the official opening of their new office building in downtown Cork, Ireland. The associated expansion shows that Cork has become a major center for investment fund business and one of Clearstream’s key locations.

SGX named “Derivatives Exchange of the Year” by Asia Risk for sixth consecutive year
Award recognises SGX’s robust risk management solutions across asset classes;mJudges highlight product innovations, including Asia’s first portfolio compression service for listed derivatives
Singapore Exchange (SGX) has been named “Derivatives Exchange of the Year” by Asia Risk magazine for the sixth consecutive year, retaining a prestigious award that recognises best practices in risk management.

Article by Tan Cheng Han, chairman of SGX RegCo, for the SID Directors Conference Book SGX
This article by Tan Cheng Han, chairman of Singapore Exchange Regulation, first appeared in the SID Directors Conference Book 2019 published by the Singapore Institute of Directors.

SGX deepens cooperation with Chongqing Bureau to promote capital flows and facilitate fundraising for central and western China enterprises
Singapore Exchange (SGX) today entered into a Memorandum of Deepening Cooperation (Memorandum) with Chongqing Municipal Financial Regulatory Bureau (Chongqing Bureau, formerly known as Chongqing Financial Affairs Office or Chongqing FAO) that strengthens joint efforts to encourage capital flows and enterprise fundraising.

ETFs in the focus of private and institutional investors
The “ETF-KnowHow” event series organised by the Swiss stock exchange provides ETF investment newcomers as well as experienced investors with expert knowledge.


Superhuman AI Bots Pose a Threat to Online Poker Firms, Morgan Stanley Says
Sam Unsted – Bloomberg
The threat for online poker players is not the human desktop card sharks playing against you, but the superhuman artificial intelligence bots that could infiltrate games, according to analysts at Morgan Stanley.

BNP Paribas gives FX algos a voice with launch of ‘ALiX’ digital trading assistant; BNP Paribas takes a leaf out of Silicon Valley’s book with a Siri-style digital trading assistant, which is launching alongside real-time market analytics and interactive algorithms as part of major upgrade to the bank’s Cortex FX trading platform.
Hayley McDowell – The Trade
BNP Paribas has unveiled its newly revamped FX algorithmic trading platform following a major upgrade, which includes the launch of interactive algo­rithms and real-time analytics delivered via an artificial intelligence-based digital trading assistant known as ‘ALiX’.

Goldman Sachs to distribute Trading Technologies’ platform to clients; The deal is a major coup for Trading Technologies, which has invested heavily in expanding its offerings in recent years.
Jonathan Watkins – The Trade
Goldman Sachs has contracted Trading Technologies (TT) to distribute the vendor’s platform to its global client base. Through the agreement, Goldman Sachs’ international client base will gain access to the TT platform’s full range of professional trading tools, including Autospreader and a new advanced options analytics functionality.

FX automation a gradual refinement of processes; now making headway into execution; Panelists at TradeTech FX Europe extol virtues of automation for FX trading and how trading processes will have to adapt to keep up.
John Brazier – The Trade
The automation of the foreign exchange trading markets is continuing apace and focus is now starting to shift towards how it affects trading decision-making.

Bloomberg launches real-time data in the cloud; Expanded global collaboration with Amazon Web Services supports immediate and reliable data delivery
Bloomberg announced today that B-PIPE, Bloomberg’s flagship real-time market data feed, will now be available to clients globally in the cloud through Amazon Web Services (AWS). Building on Bloomberg’s initial launch of B-PIPE in the cloud for U.S.-based clients, Bloomberg will work with AWS to support customers around the world to gain immediate and reliable access to real-time market data.


Powerful New Ethereum Miner Reaches Final Stage Before Mass Production
Wolfie Zhao – Coindesk
After a nine-month delay and $3.8 million of investment, an upstart manufacturer is ready to produce its first batch of powerful new machines for mining cryptocurrencies ethereum and ethereum classic. Linzhi, based in Shenzen, China, said Wednesday it had ordered 37 wafers from Taiwan Semiconductor Manufacturing Company, the main parts that will allow it to build about 200 application-specific integrated circuit (ASIC) miners.

Ethereum Co-Founder Joe Lubin Joins Hyperledger Board
Daniel Palmer – Coindesk
Joseph Lubin, co-founder of Ethereum, is to join the governing board of the Linux Foundation-led blockchain consortium Hyperledger. The move comes as ConsenSys, the Ethereum development startup founded by Lubin, becomes the latest Hyperledger premier member, ConsenSys announced on Wednesday.

Why China’s Rushing to Mint Its Own Digital Currency
Bloomberg News
The People’s Bank of China is poised to become the first major central bank to issue a digital version of its currency, the yuan, seeking to keep up with — and control of — a rapidly digitizing economy. Unlike cryptocurrencies such as Bitcoin, though, dealing in the digital yuan won’t have any presumption of total anonymity, and its value will be as stable as the physical yuan, which will be sticking around too.

Russell Rhoads’ Derivatives Look Forward: Pseudo Bitcoin ETF Enters the Market (Video)
Russell Rhoads – TABB Forum
The ongoing bitcoin ETF saga took a twist last week. VanEck and SolidX announced and launched a 144A bitcoin investment vehicle targeting institutional investors. There are some similarities and differences between this and the companies’ ongoing ETF efforts, explains TABB Group head of derivatives research Russell Rhoads.

Tiny Pacific Nation Makes a Go of Its Own Digital Currency
Joanna Ossinger – Bloomberg
An isolated island nation in the Pacific Ocean with a population of about 75,000 continues to break ground in the cryptocurrency space. The Marshall Islands is proceeding with the creation of a blockchain-based national currency, the Marshallese sovereign or SOV, the country said in a statement.

Binance.US Will Open User Registration Next Week
Joeri Cant – Cointelegraph
Major cryptocurrency exchange Binance announced that it will open registration and deposits on its platform for United States-based clients next week, Wednesday Sept. 18.

eToroX Launches API for Algo Trading
Arnab Shome – Finance Magnates
eToro’s cryptocurrency division eToroX on Wednesday announced the launch of its institutional-grade application program interface (API) trading program. Dubbed AlgoX Prime, the API is designed to meet the requirements of institutional traders with eToro’s liquidity pool and tight spreads. This will cater to both the traders of mainstream instruments and crypto assets.

NASAA Enforcement Yields $1 Billion in 2018, ICOs Included
Aziz Abdel-Qader – Finance Magnates
The North American Securities Administrators Association (NASAA) today announced its 2018 annual enforcement and compliance results, highlighted by a series of high-impact cases involving charges with manipulation, crypto fraud, and unlawful use of customer funds.

Iranian Crypto Miners Tax Exempt If They Repatriate Offshore Earnings
Joeri Cant – Cointelegraph
Cryptocurrency miners in Iran will be eligible for a tax exemption if they agree to repatriate their overseas earnings, according to Iran’s National Tax Administration (INTA). Per a report by local English-lanuage news daily Financial Tribune, INTA introduced a repatriation tax exemption similar to the one it offers non-oil exporters. INTA considers cryptocurrency mining a taxable business, like any other industrial activity, and as such, believes it should follow the requirements set by the Central Bank of Iran in repatriating their overseas earnings.

Zero Hash Adds Support for Derivatives Settlements; Traders will be able to customize settlement frequency as well.
Arnab Shome – Finance Magnates
Commenting on the development, Brian Liston, co-founder of Seed CX and president at Zero Hash, said: “Derivatives are a rapidly evolving area within the digital asset industry, yet there is a critical demand in the market for a regulated post-trade settlement utility, like Zero Hash.”

Bitwise Taps BNY Mellon as Transfer Agent for Proposed Bitcoin ETF
Nikhilesh De – Coindesk
Bitwise has tapped Bank of New York Mellon to serve as the administrator and transfer agent for its proposed bitcoin exchange-traded fund (ETF).

Kakao’s Klay Cryptocurrency to Make First Exchange Listing
Richard Meyer – Coindesk
South Korean messaging giant Kakao’s “klay” token – the native cryptocurrency of its recently launched Klaytn blockchain – is soon make its first official exchange listing on Upbit’s platform.

Bobby Lee Returns With Ballet, a Crypto Hardware Wallet for the Masses
Wolfie Zhao – Coindesk
More than a year after he sold one of China’s longest-running bitcoin exchanges, Bobby Lee, co-founder and former CEO of BTCC, is back.


The Marker of an Authoritarian; Trump insists on editing reality to conform to his own needs—if necessary, with a Sharpie.
Quinta Jurecic – The Atlantic
In retrospect, perhaps the nation should have seen President Donald Trump’s spat with the weather report coming. He began his presidency not only by lying about the crowd size at his inauguration but also about the rain: Speaking before the CIA, he announced that the sky had immediately cleared of rain when he began his inaugural address, when in fact it had sprinkled steadily throughout the speech. So his refusal to let go of a misleading tweet stating that Hurricane Dorian would affect Alabama—a saga that has expanded to include numerous tweets, a defaced map, and reportedly, threats by a Cabinet official to fire staffers at the National Oceanic and Atmospheric Administration—is less than surprising.

Negative rates are no ‘elixir’: strategist on Trump’s latest tweet
Julie Hyman – Yahoo Finance
President Donald Trump stepped up his criticism of the Federal Reserve Wednesday, upping the ante by declaring the Fed should explore negative interest rates. Investors and economists say this could be a disaster for the U.S.

Trump Ignores the Downsides of Negative Interest Rates
Randall W. Forsyth – Barron’s
President Donald Trump now wants the Federal Reserve to lower interest rates to zero or below. But he should consider the minuses of negative rates, which have failed to spur strong growth in Europe and Japan and would likely cause a firestorm among U.S. savers.

China Seeks to Narrow Trade Talks With U.S. in Bid to Break Deadlock; Beijing is looking to put thornier national-security issues on a separate track
Lingling Wei and Chao Deng – WSJ
China is looking to narrow the scope of its negotiations with the U.S. to only trade matters, putting thornier national-security issues on a separate track in a bid to break deadlocked talks with the U.S.

How Donald Trump can manipulate the 2020 election; The US president considers victory in next year’s poll to be an existential necessity
Edward Luce – FT
Donald Trump, as the saying goes, should be taken literally as well as seriously. Mr Trump often raises the prospect of securing an illegal third term in 2024. He recently told global football officials that he should still be America’s president when it hosts the World Cup in 2026. Mr Trump often follows up by saying: “Only kidding”. Then he raises the theme again — twice in the past week; once at a rally in North Carolina, the second time on Twitter.

Trump Says Fed Should Cut Rates to ‘Zero, or Less,’ Attacks Jerome Powell Again; Some economists warn president’s push might send up long-term Treasury yields, making it harder to achieve goal of locking in low rates
Kate Davidson and Catherine Lucey – WSJ
President Trump renewed his call for lower interest rates and his criticism of the Federal Reserve on Wednesday, by pressing for the central bank to cut short-term rates to “ZERO, or less,” negative rates that the U.S. avoided even after the 2008 financial crisis.


CFTC Commissioner Stump to Keynote at the 2019 ISDA Annual Europe Conference

Negative Deposit Rates Trigger Legal Review at Nordea’s Watchdog
Kati Pohjanpalo – Bloomberg
Finland’s financial regulator is trying to figure out whether it’s legal for banks to pass on negative interest rates to retail depositors.

EU financial regulators highlight risks of a no-deal Brexit and search for yield
The European Union’s (EU) banking, insurance, pensions and securities sectors continue to face a range of risks, the latest report on “Risks and Vulnerabilities in the EU Financial System” published today by the Joint Committee of the European Supervisory Authorities (ESAs) shows.

FCA steps up efforts to ensure firms are getting ready for a no-deal Brexit
The Financial Conduct Authority (FCA) is stepping up its efforts to ensure firms are aware of what they need to do to prepare for the potential of a no-deal Brexit. Firms who have not prepared appropriately may risk an impact on their business.

ICAP Investment (clone of authorised firm)
Fraudsters are using the details of firms we authorise to try to convince people that they work for a genuine, authorised firm. Find out more about this ‘clone firm’.

Investing and Trading

Sustainable investor group representing $90 trillion mobilizes against Amazon fires
Dieter Holger – MarketWatch
The world’s largest responsible investor group is mounting a campaign to end the man-made fires in the Amazon rainforest.

Global Drop in Currencies Bruises Investors; Economic concern and U.S.-China trade dispute ripple through markets
Ira Iosebashvili – WSJ
Currencies around the world are tumbling to multiyear lows, bruising investors’ portfolios and fanning the flames of a global trade war.

End of Era: Passive Equity Funds Surpass Active in Epic Shift
John Gittelsohn – Bloomberg
Stock pickers overtaken as investors run toward index funds; The balance of power has changed in the stock-fund industry
It’s official: inexpensive index funds and ETFs have finally eclipsed old-fashioned stock pickers.

Why Rate Cuts in Europe Could Do More Harm Than Good; Stimulus measures that weaken the euro may lead to fresh tensions with the U.S.
Paul J. Davies – WSJ
The European Central Bank is likely to launch a fresh wave of loose-money policies Thursday to jolt its stubbornly low inflation rate. But many suspect its primary target is something else: the euro.

Offshore Wind-Power Prices Are Plunging
Will Mathis – Bloomberg
Renewable generation is becoming competitive with fossil fuels; Scottish Power began operations at East Anglia One this week
The cost of offshore wind in the U.K. could soon drop below the level where renewable developers get compensated to add capacity in the latest round of an auction that has subsidized the industry.

ECB cuts rates and restarts bond-buying; Fresh stimulus comes as global slowdown weighs on eurozone growth and inflation
Martin Arnold – FT
The European Central Bank is to launch a new round of stimulus for the eurozone economy in a bid to tackle sluggish growth and persistently low inflation.

Wyoming’s Carbon Valley aims to turn ‘coal into gold’; America’s largest coal-producing region is focusing on advanced products to offset a decline in output
Gregory Meyer – FT
California has Silicon Valley. Wyoming’s Powder River Basin wants to be known for the element one row up the periodic table. “Carbon Valley” is a vision of the future for America’s largest coal-producing region. The basin’s officials dream of a high-tech place where thick seams of coal are turned into graphene, aircraft fuselages, wind turbine blades and the black granules in water filters.

Gold investor group calls on mid-tier gold miners to merge
Henry Sanderson – FT
Some of the largest gold investors have said there are “far too many” mid-tier gold companies and they need to merge in order to reduce wasteful corporate spending.


Jeffrey Epstein Used Opaque Charity Account at Deutsche Bank for Own Benefit; Gratitude America attempted to transfer money to St. Thomas foundation in lieu of Epstein paying Virgin Islands fine directly
Rebecca Davis O’Brien and Jenny Strasburg – WSJ
When Jeffrey Epstein created his Gratitude America Ltd. foundation in 2012, the nonprofit’s purpose was to “support the expression of gratitude for the ideals of America,” according to incorporation records filed in the U.S. Virgin Islands.

EU’s banking misfortunes share a common thread; There are weaknesses in the laws and framework for dealing with ailing institutions
Ignazio Angeloni – FT
What do a giant German lender with global ambitions and a small Mediterranean retailer overloaded with costs and rotten loans have in common? Nothing, except for one thing: they are both problems that European Central Bank supervisors seem unable to solve.


Hong Kong Is the Lung Through Which Chinese Banks Breathe; The city’s GDP relative to China’s keeps shrinking, but that belies its role in the country’s banking system
Mike Bird – WSJ
“The naked truth about Hong Kong’s future can be summed up in two words: It’s over,” said Fortune Magazine.

Old Farmers, Aging Trees Get Blame for Indonesia’s Cocoa Misery
Yoga Rusmana – Bloomberg
Cocoa production may drop to record low in 2019, group says; Country may kick off national program to boost production
Cocoa plantations in Indonesia are passing through a bitter phase, and the bulk of the blame falls on old farmers and aging trees.

Mexico raids the piggy bank to prop up Pemex; Analysts fear $5bn injection into state oil company could erode state accounts
Jude Webber and Colby Smith – FT
By raiding its coffers and making a bold bid to sweep away upcoming debt payments, Mexico’s government has bought precious time for its struggling state oil company, Pemex.

IEA warns Opec it faces huge oil surplus in 2020; Forecast likely to add pressure to Saudi Arabia to consider greater production cuts
David Sheppard – FT
Opec faces a growing surplus in the oil market next year that will push prices lower, the International Energy Agency said on Thursday, in a forecast likely to increase pressure on the Saudi Arabian oil minister to consider deeper production cuts.

Big U.S. Investment Banks Crowd Into Aramco IPO; As Saudi Arabia tries to attract investment after Khashoggi killing, global bankers are guiding the kingdom’s reform plans
Rory Jones and Summer Said and Maureen Farrell – FT
Global investment bankers launched the underwriting process for the initial public offering of Saudi oil giant Aramco in Dubai on Thursday, a sign financiers who shunned the kingdom in the immediate aftermath of the murder of journalist Jamal Khashoggi are turning the page.

Canada’s Oil Market Finds Outlet in U.S. Demand; Canadian exports have jumped since the U.S. imposed sanctions on Venezuela’s state-owned oil giant
Vipal Monga – WSJ
TORONTO—A glut of oil in Canada is easing, thanks to higher demand for dense crude from U.S. Gulf Coast refineries and government-imposed production cuts that have offset a shortage of pipeline capacity.


Legal challenge in Belfast against no-deal Brexit dismissed
Tara John and Peter Taggart, CNN
Belfast, Northern Ireland (CNN)UK Prime Minister Boris Johnson was dealt a rare piece of good news on Thursday when a judge in Belfast dismissed a legal challenge to a no-deal Brexit, rejecting a claim that it undermined the Good Friday Agreement.

Will Brexit Trigger the Nation’s Next Civil War? A history lesson from the counties scarred by the seventeenth century conflict.
Alan Crawford – Bloomberg
At the outbreak of the English Civil War in 1642, Warwick Castle was attacked by soldiers loyal to the king who tried without success to unseat the Parliamentarian forces that held it. While a minor skirmish, the outcome would foreshadow the broader struggle for the country.

U.K. Warns of Sweeping Risk of Chaos From No-Deal: Brexit Update
Robert Hutton , Alex Morales , and Tim Ross – Bloomberg
The U.K. published warnings of disruption to trade, financial services and food supplies if it leaves the European Union without a deal on Oct. 31.

No-deal Brexit would be ‘existential threat’ to many Northern Irish businesses, Boris Johnson hears; PM told to consider going back to plan for province-only backstop
Arthur Beesley and George Parker – FT
Boris Johnson was warned by Northern Ireland business leaders on Wednesday that a no-deal Brexit was an “existential threat” to many companies, and told to rethink his opposition to a carve-out for the region in the EU single market.

No deal Brexit is not a hedge fund conspiracy
Jamie Powell, John Burn-Murdoch and Thomas Hale – FT
Yesterday the Byline Times outlined some £4.6bn of aggregate short equity positions from hedge funds that, the site claimed, “directly or indirectly bankrolled Boris Johnson’s leadership campaign”, and thus a no deal Brexit.

EU parliament will not accept Brexit deal without backstop
Jim Brunsden – FT
The president of the European Parliament has criticised Britain for failing to provide “legally credible” solutions for avoiding a hard Irish border after Brexit, warning that MEPs will never accept a deal that does not include a “backstop.”

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