First Read

An O-fer
Jim Kharouf

In sports, when you have a rough time and do not get any hits in baseball or shots to fall in basketball, they call that an “o-fer.” In Deutsche Boerse’s case, it looks like they are 0 for 3 in attempts to land the big deal with the London Stock Exchange Group.

It’s not the end of the world for either company if this deal is not approved by the European Union. LSE still has a solid foundation of exchanges, clearing, technology and index businesses. Deutsche Boerse also has its strong stable of exchanges, clearing, banking, technology and index divisions as well.

But it does make some wonder just how EU and British companies will be able to compete on the global stage in the coming years. As consolidation continues in fits and starts, ICE will likely continue its path of strategic acquisitions and growth across the different parts of the value chain. Nasdaq has also never been afraid of making international deals, nor shy about making a run at LSE. And some wonder just when the CME will push out further than it has via acquisition. Is LSE a better fit for CME Group than Deutsche Boerse? Perhaps. Or is it time for Chicago and Frankfurt to join forces again?

The macroeconomics of the exchange space today continue to call for scale – as in scaling up exchanges, clearing, technology, data and product development. Should the EU cancel this deal, there will be more moves available on the chessboard for others to make, perhaps to the detriment of both LSE and Deutsche Boerse.

It should give us all more to talk about in Boca Raton in a couple of weeks.

++++

London Stock Exchange Says Its Merger Is Unlikely to Win Approval
By CHAD BRAY – NY Times
The London Stock Exchange Group said late on Sunday that European regulators were unlikely to approve its merger with Deutsche Börse, which would have created a European heavyweight in a rapidly consolidating industry.
/goo.gl/dEaGXk

****** The fat lady hasn’t sung yet, according to the LSE board, but she is definitely warming up.

++++

Four steps to developing your personal brand
by Jessica Darmoni – The Title Connections
With the advent of social media, personal branding has become more important than ever. LinkedIn profiles and Twitter IDs beg you for a headshot and bio. They also lend themselves well as an outlet to explore your next career move, personal and professional goals as well as your strengths and passions. If you are interested in learning how to leverage social media for these initiatives, read the below steps to help you develop and establish your personal brand.
/goo.gl/ZkWkD4

****** Down in Texas a personal brand is something a little different.

++++

FIA Boca Tennis Tournament
Sponsored by: Trading Technologies, Benefiting Futures for Kids
When: Tuesday, March 14, 9am-12pm
Where: Boca Raton Resort & Club
Registration fee: $50.00 – TT will match all registrations and all proceeds go to FFK
/goo.gl/QSY4DK

**Or register for the charity golf outing https://goo.gl/IZR4Gf

++++

Variation Margin; EFRPs, Wash Sales; Position Limits; Electronic Trader Tags; Cybersecurity
Gary DeWaal – Bridging the Week
Staff of the Commodity Futures Trading Commission issued formal no – action relief, some other regulators referenced exercising discretion, while some additional regulators and regulatory organizations discussed forbearance – albeit not general forbearance. However, overall, during the past two weeks, regulators worldwide recognized the difficulty swap dealers are having in complying with the March 1 deadline to implement certain variation margin requirements for uncleared swaps, and indicated or at least implied they would likely not be taking enforcement action against non-compliers, subject to such entities’ good faith efforts to comply with their obligations expeditiously.
/goo.gl/hZVsHn

***** Dr. Fishing Vest will be holding court in Boca Raton in a couple of weeks.

++++

I Heart Alexa
John Lothian News
Yes, we do love technology and maybe you can too. Help us out with a 3-minute JLN survey so we can learn a bit more about our readers as well as what you like and what you don’t like about our publications and websites. It’s also a great place to leave us comments and suggestions for future content and services. If you fill it out, you could win an Amazon Echo, which answers just about everything but cannot take our survey. Here’s the link to the survey. Alexa says thanks!

++++

Why China’s Silicon Valley Is a Magnet for Tech Millennials
Bloomberg
When Alex Chen and his brother Harrison wanted to get their ping pong-playing robot up and running, it wasn’t Silicon Valley they turned to for help.
Instead it was Shenzhen, a former fishing village bordering Hong Kong that has the strongest claim to be China’s answer to Silicon Valley. About a thousand startup accelerators are active in the city, drawn by its proximity to factories capable to churning out all manner of gadgets.
bloom.bg/2lnUAyh

**JK: Chen says they can make a prototype in China every week, versus every month in Silicon Valley.

++++

Friday’s Top Three
Friday’s top read story of the day continued the first place run for a third straight day, with FOW’s piece on Bob Zagotta and Umesh Gajria in CME to part ways with two senior US directors. Second went to a check of the facts story from Business Insider, with
US trade surpluses, where apparently we’re crushing it in Hong Kong. Finally, more opposition to the LSE-Deutsche Boerse merger in The Independent’s
Theresa May and Mark Carney urged by leading City executives to halt London Stock Exchange merger

++++

MarketsWiki Stats
94,582,096 pages viewed; 22,363 pages; 203,994 edits
MarketsWiki Statistics

++++

Lead Stories

LSE-Deutsche Börse deal in jeopardy over antitrust hurdle; UK exchange says it cannot meet deadline on new condition to sell Italy-based MTS
by: Philip Stafford and Arash Massoudi – FT
The proposed EUR29bn London Stock Exchange and Deutsche Börse deal is on the verge of collapse after the LSE said it would not be able to meet a new condition proposed by antitrust regulators in Brussels.
/goo.gl/AZNG8C

The Multi-Trillion Dollar Brexit Fight: London’s Financial Plumbing; London is a global clearing hub and trillions of dollars flow through the capital every day
By MAX COLCHESTER and JULIA-AMBRA VERLAINE – WSJ
Britain will have many contentious skirmishes during its negotiations to leave the European Union. But one, deep inside the financial system’s plumbing, is shaping up to be especially thorny. It is about the clearing of securities. London is a global clearing hub, and trillions of dollars flow through the capital every day. Will London lose this crown? And what will it mean if it does? Here’s what you need to know, based on interviews with clearing executives, lawyers and consultants.
on.wsj.com/2lMVbuj

Buffett Says $100 Billion Wasted Trying to Beat the Market
by Noah Buhayar – Bloomberg
Billionaire investor Warren Buffett devoted a substantial portion of his annual letter to deepen his long-running critique of investment fees.
/goo.gl/5VknWO

LSE scuppers Deutsche Boerse merger hopes by rejecting EU demand
By Rachel Armstrong, John O’Donnell and Andreas Kröner
The London Stock Exchange has all but ended a planned merger with Deutsche Boerse to create Europe’s biggest stock exchange by ruling out meeting a European antitrust demand, saying it has strong prospects alone.
/goo.gl/zM5yle

LSE Says Deutsche Boerse Deal Unlikely After Year-Long Try
John Detrixhe – Bloomberg
London Stock Exchange Group Plc said its $13 billion tie-up with Deutsche Boerse AG is unlikely to proceed after a new regulatory hurdle signaled a potential end to the companies’ efforts to create a champion European exchange.
/goo.gl/miY3bU

Tooth fairies and the Deutsche Börse-London Stock Exchange merger; It is magical thinking to believe that clearing can be pooled virtually
by: Jonathan Ford – FT
In British takeover parlance, a “commitment” means nothing unless it is certified by an authoritative third party. There is no point in promising the earth unless you have a reputable accountant’s or lawyer’s letter to back it up.
/goo.gl/t3Ot1R

Barclay CTA Index Down 0.73% in January; Trend Reversals Challenge Managed Futures Traders
BarclayHedge
Managed futures traders lost 0.73% in January according to the Barclay CTA Index compiled by BarclayHedge. Seven of Barclay’s eight CTA indices lost ground in January. The Diversified Traders Index was down 1.20%, Systematic Traders lost 0.87%, Currency Traders were down 0.51%, and Financial/Metals Traders gave up 0.33%.
/goo.gl/jwohil

Deutsche Bank Cuts 2016 Bonus Pool by Almost 80%, FAS Reports
Naomi Kresge – Bloomberg
Deutsche Bank AG cut its bonus pool for 2016 by almost 80 percent, Frankfurter Allgemeine Sonntagszeitung reported, a figure unmatched in the bank’s recent history as it tries to counteract the impact of low interest rates and legal expenses.
/goo.gl/1wjGe5

Deutsche Bank board member says staff not quitting over bonus cuts-paper
Reuters
Bonus cuts at German flagship lender Deutsche Bank (DBKGn.DE), announced in January, have so far not led to a mass exodus of employees, one of its board members told a German weekly newspaper.
/goo.gl/SqxjHD

How Dangerous Is a Stock Market of Mindless Robots?
Jason Zweig – WSJ
Investors are turning into automatons. So-called robo-advisers manage investments electronically; index mutual funds and exchange-traded funds roll entire markets up into a single bundle; target-date portfolios hold a predetermined mix of assets, marching savers mechanically toward retirement. Could all these millions of people investing on autopilot be pushing an already expensive market even higher? Consider a few numbers.
/goo.gl/IxISKu

Steve Weisman: How to spot a modern-day Charles Ponzi
USA Today
This Friday, March 3, will be the 135th birthday of Charles Ponzi. Although he died in 1949, the fraud that bears his name lives on and is still effectively used to this day by scam artists, the only criminals we call artists.
/goo.gl/sGVu2E

From Arab Sheiks to Dakota Frackers: The Oil Industry’s Go-To Analyst
Alison Sider – WSJ
Nobody in the oil industry is better connected than Gary Ross. An energy economist who got his start in New York during a tumultuous period for oil in the 1970s, Mr. Ross today boasts a personal network that spans the globe: from the Saudi royal family to west Texas wildcatters to Wall Street oil traders.
/goo.gl/AHWS0c

Defending the Euro Starts With Cleaning Up the Banks; Why European bad loans are more than just an economic burden
By PAUL J. DAVIES – WSJ
Fix Europe’s bad debts and you can start fixing Europe. That is the bigger imperative as the European Central Bank gets set finally to push the Continent’s lenders to clean up their combined EUR1 trillion bad-debt pile.
/goo.gl/rzTkT1

‘Bad Banks’ Spread Across China; Nearly 40 asset-management companies are vacuuming up bad debts, but it’s more like sweeping problems under the rug
By ANJANI TRIVEDI – WSJ
China is going back to basics when it comes to bad-debt management.
/goo.gl/VybDOP

Exchanges, OTC and Clearing

LSE refutes sale of MTS for Deutsche Boerse merger; LSE and Deutsche Boerse merger ‘unlikely’ to go ahead after LSE rejects Commission’s request to sell MTS business.
By Hayley McDowell – The Trade
The London Stock Exchange’s (LSE) potential merger with Deutsche Boerse has been scuppered by the European Commission’s request it sells its 60% stake in fixed income trading platform MTS.
/goo.gl/EEVrNg

Exchange Group Plc And Deutsche Börse AG – Update On The European Commission Phase II Proceedings
Mondovisione
On 28 September 2016, the European Commission (“Commission”) announced the commencement of Phase II proceedings in connection with its review of the proposed merger between London Stock Exchange Group plc (“LSEG”) and Deutsche Börse AG (“Deutsche Börse”) (the “Merger”). As announced on 7 February 2017, the Commission began a period of market testing based on LSEG’s and Deutsche Börse’s submitted commitments, comprising of the proposed sale of LCH SA to Euronext N.V..
/goo.gl/ULA4n6

“We are not in a bazaar”: German minister rules out HQ compromise in London Stock Exchange-Deutsche Boerse talks
William Turvill – City AM
The London Stock Exchange and Deutsche Boerse agreed a £21bn merger last March (Source: Getty)
Politicians in Frankfurt appear determined to accept nothing but the headquarters of the combined London Stock Exchange and Deutsche Boerse, with an influential minister making clear he is not interested in compromise.
/goo.gl/WqIcnw

How five meetings are raising questions over the London Stock Exchange’s takeover by a German rival ; Top brass have met Cameron, May, Osborne and Hammond in the last year; Forty City grandees have called for the deal to be delayed; Letter warns of risk to the UK if merger is not delayed until after Brexit
By James Burton For The Daily Mail
London Stock Exchange bosses have held talks with Ministers five times since its controversial takeover by a German rival was announced.
/goo.gl/jH3NB3

How does a stock market operate in war? Syria — a case study
Jack Davies – TradingFloor.com
Despite enduring more than half a decade of conflict leaving an estimated 400,000 dead and 11.4 million displaced, Syria retains an active stock market. Established as part of a programme of economic reforms, the Damascus Securities Exchange opened its doors in 2009, two years before the onset of the crisis.
/goo.gl/xi2Z9k

Presentation by HKEX Chief Executive Charles Li and Group Chief Financial Officer Paul Kennedy on 2016 Final Results Announcement
HKEX
/goo.gl/TuvBGX

HKEX 2016 Final Results
HKEX
/goo.gl/LQoMw8

HKEX 2016 Consolidated Financial Statements
HKEX
/goo.gl/CB6dM3

Cash market declines hurt HKEX profits; Average daily turnover of cash markets at HKEX saw 37% drop in 2016 compared with the year prior.
By Hayley McDowell – The Trade
HKEX reported a 17% decrease in total Group revenues in 2016 with cash markets average daily turnover declining 37% compared to the year prior.
/goo.gl/4DyhKH

Fintech

Blockchain Banking Consortium R3 Gets Into Semantic Tornado Over Blockchain – Bitcoiners Jeer from Sidelines
Richard Kastelein – Blockchain News
R3CEV, the largest Blockchain consortium got caught in a semantic whirlwind last week when it was noted in a slide presentation at an event for its Distributed Ledger Technology or Private Blockchain platform Corda – that they have officially moved on from ‘Blockchain technology’ development. The cryptocommunity lined up en masse to digitally jeer the bankers, particularly at Reddit.
/goo.gl/kdqcQv

Trax and Droit launch EMIR and derivatives reporting tool; Tool combines Trax’s reporting service with Droit Financial’s eligibility tool for EMIR derivatives regulatory requirements.
By Hayley McDowell – The Trade
Trax has partnered with Droit Financial to launch a tool to determine eligibility and reporting requirements under EMIR for derivatives.
/goo.gl/rq0qb1

CloudMargin partners with SmartDX for OTC derivatives rewrites; The two companies will allow traders to rewrite their OTC derivatives agreements and pass on the operational workflow.
By Joe Parsons – The Trade
FinTech firm CloudMargin and SmartDx have partnered to allow buy-side derivatives traders to repaper their OTC agreements, with impending collateral rules set to come into force on 1 March.
/goo.gl/M5mFeO

Fintech, the Buzzword Finance Loves and Hates: QuickTake Q&A
by Edward Robinson – Bloomberg
You’ve heard it at conferences, in meetings and maybe even bandied about at dinner parties. Ever since a wave of financial technology startups emerged after the 2008 subprime mortgage crack-up, “fintech” has become shorthand for a digital revolution that could sweep away antiquated banking practices. But its definition has become so elastic that it’s hard to know precisely what it is, let alone what it augurs for a global financial industry in dire need of innovation. Here’s a primer.
/goo.gl/SXrDkk

Goldman Sacked: How Artificial Intelligence Will Transform Wall Street
Kevin Maney – Newsweek
For the past year, we as a society have been worried sick about artificial intelligence eating the jobs of 3 million truck drivers. Turns out that a more imminently endangered species are the Wall Street traders and hedge fund managers who can afford to buy Lamborghinis and hire Elton John to play their Hamptons house parties.
/goo.gl/lBvyNT

Traiana Launches Electronic Management Of Confirmations And Payments For Equity Swaps
MondoVisione
Traiana, a NEX Group business which monitors pre-trade risk and automates post-trade processing of financial transactions, announces today that it has launched Swaps Centre, a suite of services which enable swaps providers to electronically manage payments and confirmations in equity swaps.
/goo.gl/Zbu0x3

Politics

White House media ban is ‘unconstitutional censorship’, America’s National Press Club warns
The Independent
The National Press Club has condemned Donald Trump’s exclusion of select media outlets from a White House press conference, calling the unprecedented action “deeply disturbing” and likening it to censorship.
/goo.gl/kqwjBt

Economists Have Been Demoted in Washington. That’s a Bad Idea.
Sendhil Mullainathan – NY Times
Academic economists have received a demotion. The Trump administration has been filling out its cabinet and, unlike in the Obama administration, the chairman of the Council of Economic Advisers will not be part of it.
/goo.gl/T3caEt

Robert Mercer: the big data billionaire waging war on mainstream media
Carole Cadwalladr – The Guardian
Just over a week ago, Donald Trump gathered members of the world’s press before him and told them they were liars. “The press, honestly, is out of control,” he said. “The public doesn’t believe you any more.” CNN was described as “very fake news… story after story is bad”. The BBC was “another beauty”.
/goo.gl/YShGhz

Wind Farm Divides North Carolina Republicans; GOP-controlled state legislature has been cooler to renewable energy, but wind project has helped some residents
By VALERIE BAUERLEIN and CASSANDRA SWEET – WSJ
More than 100 giant wind turbines started producing power this month amid 22,000 acres of cotton, soy and wheat fields.
/goo.gl/Vtm2m2

Markets risk rude awakening if Trump address underwhelms
Investors want details on 3 growth plans: tax reform, deregulation and infrastructure
by: Mohamed El-Erian – FT
On Tuesday evening, Donald Trump will head to Capitol Hill to deliver an address to both houses of Congress. Such speeches have provided the US president’s predecessors with the opportunity to convey three main messages: their assessment of the country’s overall situation, the domestic legislative programme they hope Congress will pass in coming months and the main areas of global focus — all this in the context of the administration’s overall strategic vision.
/goo.gl/6yhkuE

Trillions of Dollars Are at Stake When Trump Speaks to Congress
by Liz McCormick and Dani Burger – Bloomberg
Policy specifics seen as needed to sustain election rally; Reflation trade shows sign of fatigue in stock, bond markets
Donald Trump’s address to Congress on Tuesday is taking on the importance of a State of the Union speech when it comes to U.S. financial markets.
/goo.gl/YHYvI9

Regulation

Brussels sets out tough new line on equivalence
Jim Brunsden and Lindsay Fortado – Financial Times
The City of London’s hopes of maximising access to the EU are set to be dealt a blow by European Commission plans to take a tough stance on rules that could provide a post-Brexit lifeline for the UK financial sector. A document obtained by the Financial Times sets out Brussels’ goal of a more thorough approach on whether to deem other jurisdictions’ rules as “equivalent” — a vital issue for the City.
/goo.gl/9S3Dlt

Citigroup focus of federal probe into foreign hiring practices
Wallace WItkowski – MarketWatch
Citigroup Inc. said late Friday that federal officials have launched a probe into the bank’s foreign hiring practices, according to a Securities and Exchange Commission filing.
/goo.gl/NX5Pvz

Score One for the Bank Whistle-Blowers
Gretchen Morgenson – NY Times
Here is something to celebrate: The United States Supreme Court just handed whistle-blowers one of their bigger wins in a long time. People who expose wrongdoing in the workplace or among government contractors have taken a beating in recent years. The Obama Administration was especially assiduous in its pursuit of whistle-blowers, and President Trump has also singled them out for scorn.
/goo.gl/plql8a

As Wall Street Thrives, America’s Little Guy Chokes on Paperwork
by Craig Torres – Bloomberg
Small businesses are getting a shrinking share of lending pie; From QE to compliance, post-crisis policy has favored bigness
If some American banks are too big to fail, others have begun to feel they’re too small to succeed.
/goo.gl/buhVgC

FIX Trading adds MiFID II functions to protocol; FIX Protocol now includes data and documents on MiFID II reporting, clock synchronisation and transparency requirements.
By Hayley McDowell – The Trade
FIX Trading Community has extended its FIX Protocol to meet the requirements of MiFID II and MIFIR.
/goo.gl/r9bUR8

Mutual Funds and Fees: What You Should Know
FINRA
All mutual funds charge fees. Because small percentage differences can add up to a big dollar difference in the returns on your mutual funds, it’s important to be aware of all the fees associated with any fund you invest in.
/goo.gl/tZD1sc

Notice of Appeal Filed in Legal Challenge to Department of Labor Rule that Prevents Financial Professionals from Best Serving Retirement Savers
SIFMA
The U.S. Chamber of Commerce, Financial Services Institute, Financial Services Roundtable, Insured Retirement Institute, and Securities Industry and Financial Markets Association (Co-Plaintiffs) issued the following statement on their notice of appeal to the U.S. Court of Appeals for the Fifth Circuit, which was filed today:
/goo.gl/F1AfjM

What The New SEBI Chairman Must And Must Not Do
Somasekhar Sundaresan – Bloomberg
The Securities and Exchange Board of India will have a new chairman in days. Here are three things the SEBI chairman must do and three things he must not do:
Must Do:
/goo.gl/XMtKkL

Investing and Trading

Bizarre Oil Trades Pose Menace for OPEC in Its Prized Market
Serene Cheong and Sharon Cho – Bloomberg
OPEC pumped at will the past two years to defend its turf against rivals. Its recent volte-face has left it contending with additional threats in the world’s biggest oil market.
/goo.gl/pTZTKM

Warren Buffett Is One Stock Picker Who Believes He Can Still Beat the Market; In letter to Berkshire shareholders, Buffett reasserts faith in own ability to pick winners and losers
By NICOLE FRIEDMAN – WSJ
Warren Buffett was dismissive of professional money managers in his widely read letter to Berkshire Hathaway Inc. shareholders. But the billionaire reasserted his belief in his own ability to pick winners and losers.
/goo.gl/MmHIXT

Bond Traders Master French Politics as Latest Treasuries Trigger
Brian Chappatta – Bloomberg
Trump, Yellen speeches are highlights on this week’s calendar; Yet last week showed French election developments also key
While speeches by President Donald Trump and Federal Reserve Chair Janet Yellen loom large for Treasuries traders this week, unforeseen developments in Europe may wind up fueling the most volatility.
/goo.gl/Jqe77z

Warren Buffett Says Sell in Annual Letter
Stephen Gandel – Fortune
Warren Buffett, the world’s most famous stock picker, wants everyone to know that he also sells. In his annual letter to shareholders, which was released on Saturday, Buffett, who is the CEO of Berkshire Hathaway, says there has been some misunderstanding about his investment method. He even added a line to a section that has been included nearly unchanged in the letter every year since 1983 to clear up the confusion.
/goo.gl/vRL5kO

What Does the French Election Mean for the Euro?
Mike Bird – WSJ
This spring, France will vote in a presidential election that has raised questions over the country’s continued use of the euro. National Front candidate Marine Le Pen has said she would pull her country, one of the European Union’s founding nations, out of the common currency. That has sent yields on French bonds climbing to their highest level against German debt since 2012. It has also hit the bonds of weaker European economies as questions resurface over the euro project.
/goo.gl/gD3btP

Bond Market Is Flashing Warning Signal on Trump Reflation Trade
Min Zeng – WSJ
Stocks and bonds are again moving in tandem after diverging in recent months—a sign some investors may be losing faith in the so-called reflation trade. The Dow Jones Industrial Average has soared more than 1,000 points so far this year and closed at a record of 20821.76 Friday. Bond prices, too, are rising, driving down the yield on the benchmark 10-year Treasury note to 2.317% Friday, the lowest since late November, from 2.446% at the end of 2016. Yields fall as bond prices rise.
/goo.gl/6RpZXQ

Why the stock market’s tight trading range isn’t worrying Wall Street yet
Sue Chang – MarketWatch
This past week, the Dow Jones Industrial Average did something that it hasn’t done in 10 years — it managed to trade less than 1% in either direction for 53 sessions in a row. While this has sparked concerns that the stock market is running out of steam, the absence of wide swings does not necessarily portend the demise of the record-setting rally of the past few months.
/goo.gl/X5LEXX

ETFs Provide Some Good News at Deutsche Bank; Lender’s currency-hedged X-tracker funds have attracted investors despite parent’s restructuring and legal headaches.
By ASJYLYN LODER – WSJ
Deutsche Bank AG’s exchange-traded funds are enjoying a resurgence.
/goo.gl/23Hj77

Upstart analysts show banks the way in new era for research
By Alasdair Pal – Reuters
From a non-descript office in south London, Mark Hiley may be showing the way for Wall Street giants such as JPMorgan and Merrill Lynch to adapt to new European rules requiring them to charge an explicit fee for investment research.
/goo.gl/3UMO2W

Institutions

Investors’ flight from hedge funds slows in January
Carleton English – MarketWatch
Investors are still fleeing hedge funds, but not as quickly as they were this time last year. Investors yanked $5.2 billion from the $3 trillion hedge fund industry in January, according to eVestment data. But eVestment does not view the outflows as “concerning.”
/goo.gl/zo9Yxo

$10,000 for a single phone call with a bank analyst
Madison Marriage – Financial Times
Asset managers and banks are locked in fierce negotiations over how much fund companies should pay for investment research, with some lenders demanding $10,000 for a single phone call with their most senior analysts.
/goo.gl/4frv6s

Vanguard’s Offer to Shareholders: Cede Power in Exchange for Lower Costs
Sarah Krouse – WSJ
Indexing pioneer Vanguard Group wants its funds’ shareholders to relinquish some of their powers in exchange for potentially lower costs. The $4 trillion money manager filed a request earlier this month with the Securities and Exchange Commission asking for the ability to hire or fire internal managers for about 160 of the company’s roughly 190 funds. Currently, Vanguard fund shareholders have to bless major changes to fund management or managers’ contract terms.
/goo.gl/aIFXQb

Vast losses at RBS are a legacy of a failed system
Will Hutton – The Guardian
It may have been nine years ago, but the financial crisis continues to throw its long shadow over Britain. Last week, RBS, at the time of the crisis the world’s biggest bank, announced another stunning loss of £7bn – so chalking up cumulatively some £58bn of losses since 2008.
/goo.gl/MSF9Fz

Schwarzman’s $425 Million Payout Leads Private Equity Titans
Melissa Mittelman – Bloomberg
In an industry whose top executives don’t make small change, Steve Schwarzman once again took home the most money among private equity titans for the year.
/goo.gl/DFjJ2s

Deutsche Bank cuts bonus pool by ‘almost 80%’; Executive announces figure as German lender looks to shore up its finances
by: James Shotter in Frankfurt – FT
Deutsche Bank has cut its 2016 bonus pool by “almost 80 per cent”, one of its top managers has said, as Germany’s biggest bank battles to shore up its financial position in the wake of heavy fines.
/goo.gl/Bx0LlH

Populism Is Shaking the Edifice of Central Bank Independence
by Jeff Black , Craig Torres , and Jeanette Rodrigues – Bloomberg
Politicians pushing against power of institutions on policy; Central banks being forced to take account of equality issues
As populism grips Europe, the U.S. and elsewhere, there are few targets as ripe for political assault as the institutions stuffed with unelected technocrats wielding the power to affect the economic fate of millions
/goo.gl/J0ms55

A Small Part of Standard Chartered Is Giving the Bank Big Problems
by Donal Griffin and Stephen Morris – Bloomberg
Principal finance division lost $650 million last year; Winters chose to exit business after scrapped sale to managers
One of the smallest parts of Standard Chartered Plc, the U.K. bank with operations sprawling across Asia and Africa, has become one of its biggest losers.
/goo.gl/n5MaUj

Regions

The World’s Most Radical Experiment in Monetary Policy Isn’t Working
John Lyons and Miho Inada – WSJ
During Japan’s go-go 1980s, Hiromi Shibata once blew a month’s salary on a cashmere coat, wore it a few times, then retired it. Today, her daughter’s idea of a shopping spree is scrounging through her mom’s closet in Shizuoka, a provincial capital. “About a third of my wardrobe is hand-me-downs from my mom,” says 26-year-old Nanako Shibata, who lives in Tokyo. To save on the 112-mile trip home, she rides the bus instead of the speedy bullet train, once a symbol of Japan’s rise.
/goo.gl/rmiadg

Bail-In Bond Clarity Leaves Swedish Banks Better Off Than Feared
Frances Schwartzkopff – Bloomberg
Swedish banks will need to issue $56 billion to meet MREL; Analysts say guidelines are “softer” than first indicated
Scandinavia’s biggest economy won’t be quite as tough on bank bondholders as first feared. Sweden last week unveiled a framework designed to ensure taxpayers never pay for finance industry failures. The main takeaway is that so-called minimum requirements for own funds and eligible liabilities (MREL) won’t be as draconian as initially signaled.
/goo.gl/yLxhJJ

Markets Spotlight: Time to focus on the individuality of EMs
Zosia Wasik – FT
Our round-up of the week’s best comment and analysis from the Financial Times focuses on the future of emerging markets, Snap IPO and China’s performance.
/goo.gl/C4ulxw

Zimbabwe is staring at currency chaos again
Tony Hawkins – Financial Times
Celebrating his 93rd birthday on Saturday at a lavish party in the Matopos Hills near Bulawayo, President Robert Mugabe made it clear: he is going nowhere and intends to fight next year’s presidential election.
/goo.gl/i17hL1

Man Who Moved Oil With His Words Won’t Talk About It Anymore
by Sharon Cho and Serene Cheong – Bloomberg
Former Saudi Oil Minister Ali al-Naimi now interested in solar; Al-Naimi says he’s left oil prices and crude markets behind
For more than two decades, the oil market hung to Ali al-Naimi’s every word — whether he was taking a characteristic stroll at dawn on Vienna’s Ringstrasse, hurrying through a hotel lobby after a conference, or dodging throngs of reporters at an OPEC meeting.
/goo.gl/XaEith

Brexit

Wanted: Post-Brexit Trade Lawyers Willing to Work on the Cheap
Patrick Gower and Jonathan Stearns – Bloomberg
Seven months after then-Prime Minister David Cameron said the U.K. would need to “tool up” on trade experts because of the British vote to leave the European Union, the country is following through with a recruitment campaign that faces market hurdles. The Government Legal Department has published vacancies for as many as 17 London-based trade lawyers who would receive a starting annual salary of 48,400 pounds ($60,747). While the going rate for British government lawyers, that’s as much as 60 percent less than what similar private-sector positions offer.
/goo.gl/AxGnlm

There May Be a Huge Brexit Fight Over Financial Plumbing
Max Colchester and Julia-Ambra Verlaine – WSJ
Britain will have many contentious skirmishes during its negotiations to leave the European Union. But one, deep inside the financial system’s plumbing, is shaping up to be especially thorny. It is about the clearing of securities. London is a global clearing hub, and trillions of dollars flow through the capital every day. Will London lose this crown? And what will it mean if it does? Here’s what you need to know, based on interviews with clearing executives, lawyers and consultants.
/goo.gl/RbcVRA

Hi-tech financial firms flee UK amid doubts over Brexit
Daniel Boffey – The Guardian
An exodus of “fintech” companies from Britain has begun, the chief executive of a leading firm has said, dashing the government’s hopes of building the UK into a world leader for the industry.
/goo.gl/nZrbpa

Brexit Terrified This CEO. Then Business Jumped 50%; Samir Desai doesn’t know why business is booming, but his Funding Circle has been on a tear.
by Edward Robinson – Bloomberg
At sunrise on June 24, Samir Desai rushed to his offices near St. Paul’s Cathedral in London. Britain had just voted to quit the European Union and he knew his staff at peer-to-peer lender Funding Circle Ltd. would be freaking out.
/goo.gl/70SFwX

Miscellaneous

Bloomberg saleswoman sues over rape, rampant drug culture
Kevin Dugan – NY Post
A former Bloomberg LP sales executive drugged and raped a saleswoman on his staff twice over a number of weeks, an explosive lawsuit claims.
/goo.gl/HU3K9d

William D. Cohan – Why Wall Street Matters
Brenda Jubin – ValueWalk
The book is short, only about a hundred pages. It reads like an op-ed piece with expansive footnotes for the uninitiated. Responding to the Wall Street bashing that prevailed, from Bernie Sanders to Donald Trump, during the presidential campaign and to the ever critical Elizabeth Warren, Cohan sets out to show “why it is important to nearly everything we hold dear, and why we wouldn’t much like to live in a world without Wall Street.
/goo.gl/MBR6bA

Pin It on Pinterest

Share This Story