First Read

FINRA Foundation Publishes In-depth Analysis of U.S. Investors
FINRA.org
The FINRA Investor Education Foundation (FINRA Foundation) announced today the results of its Investors in the United States 2016 report, which provides a detailed analysis of 2,000 survey respondents from across the United States who hold investments in non-retirement accounts.
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***** Research every broker should read.

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Fraser Bell, BSO – Change Is The Only Constant
MarketsWikiEducation.com

“Technology is affecting everyone. Just simple things we take for granted have a massive, massive infrastructure behind them, a massive amount of money behind them, and a massive amount of intellectual capital to make technology seem very simple.”

In this MarketsWiki Education video, Fraser Bell, chief revenue officer with BSO, outlines how fast things can change and how easy it is for us not to notice.

Inevitably, some of those in attendance at the event had to Google directions to get there. But how many people look up information on the computer in their pocket while thinking about the thousands of miles of underwater fiber optic cable and data centers needed to show them those directions?

Or consider this: In 1965, some of the top companies in America were GM, Ford, Exxon Mobil, US Steel and GE. They all produced tangible outputs — cars, commodities and appliances. Now, you can add Apple, Google, Microsoft, Amazon and Facebook to the list. What new company will be on that list in 2030, and how will we comprehend its product in the context of our day-to-day?

Watch the video »

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MarketsWiki Education Videos
Our last four published videos from the London trip are as follows:

Thank you as always to our sponsors, including our Global Premier Sponsor, CME Group.

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Top Ten MarketsWiki Pages
The following were the top viewed MarketsWiki pages the last 30 days.

1. Job_Postings
2. Main_Page
3. Jump_Trading_LLC
4. ION
5. MiFID_II
6. Singapore_Exchange_Limited
7. China_Foreign_Exchange_Trade_System
8. Andrea_Pignataro
9. Dalian_Commodity_Exchange
10. Donald_Ross,_III

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SGX Titan

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IPSX chooses Cinnober for exchange technology
Cinnober
First regulated stock exchange to be dedicated to trading of commercial property securities
Cinnober announces today that it has been selected by the International Property Securities Exchange (“IPSX”) to deliver a managed trading solution. IPSX has applied for approval from the Financial Conduct authority (“FCA”) for a Recognised Investment Exchange (“RIE”) license in order to be able to operate as a regulated stock exchange dedicated to the admission and trading of securities in commercial real estate (“CRE”). It will be the world’s first CRE specialist stock exchange and is anticipated to launch in 2017.
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***** Let me give you the short version. IPSX approved by FCA to be RIE on Cinnober solution.

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Deutsche Börse AG appoints new management in Group Communications and Media Relations/Newsroom
Deutsche Börse
As of January 1, 2017, Kai Fischer, as Managing Director, will assume the role of Group Communications. At the same time, the company is appointing Martin Halusa as press officer of Deutsche Börse AG and thus Head of Department of Media Relations / Newsroom.
/goo.gl/QXDWoS

***** Sometimes the German to English translation is not as smooth as it could be.

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Meet Exxon’s Rex Tillerson, Trump’s Choice for Secretary of State
By CLIFFORD KRAUSS – NY Times
Rex W. Tillerson, the chief executive of Exxon Mobil, was offered the job of secretary of state by President-elect Donald J. Trump on Tuesday.
/goo.gl/QSEicn

***** This story incorrectly says Mr. Tillerson is a “former eagle scout.” Once an eagle scout, always an eagle scout. He served as president of the Boy Scouts of America and is on its executive board. Bob Gates, former Defense Secretary under Bush(2) and Obama, and a former president of BSA, recommended Mr. Tillerson.

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Tuesday’s Top Three
Yesterday’s top story by a long shot was the Wall Street Journal’s piece How the Biggest E-Mini Futures Trade of 2016 Sent the Market Soaring. Apparently many of you want to know what happened in E-minis the other day.
The second most read piece was about the tech firm Calypso, Calypso Technology to Hire Aggressively in 2017, Following a Record Year in 2016. Third place went to Wired’s piece on how technologists helped build a hedge fund Numerai Used 7,500 Faceless Coders Paid in Bitcoin to Build Its Hedge Fund’s Brain

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Lead Stories

Market Jolts Lead to Record Trading of Fed Futures Contract
By ALEXANDER OSIPOVICH – WSJ
A once-sluggish market for contracts that traders use to bet on Federal Reserve policy has roared to life. Federal-funds futures, used to wager on the central bank’s interest-rate moves, are poised to have a record year in 2016, according to CME Group Inc., the exchange on which they are traded. On average, about 135,000 of the contracts have changed hands each day this year, based on CME data through the first week of December. In comparison, average daily volume was about 18,000 in 2013.
/goo.gl/3NbcQ5

Finance Titans Face Off Over $5 Trillion London Gold Market
by Eddie Van Der Walt – Bloomberg
ICE, CME, LME plan new contracts to compete with LBMA trading; Among banks with stake in outcome are Goldman, JPMorgan, HSBC
Some of the biggest names in finance are fighting for control of the London gold market — a $5 trillion, three-century-old trading hub that is being forced to adapt to a digital age.
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CFTC’s Giancarlo: How US Regulators Can Boost Blockchain in 2017
Coindesk
In this special feature for CoinDesk’s 2016 in Review, Giancarlo discusses why he believes the US needs to rethink its blockchain policy for 2017 and beyond.
I spoke a lot about distributed ledger technology (DLT) this past year because I believe in its promising benefits for the financial marketplace and financial regulators.
/goo.gl/TxkK4L

Jim Armitage: Derivatives, not nationalism, could derail the LSE deal
JIM ARMITAGE- Evening Standard
We Brits can be forgiven for regretting a sale of the London Stock Exchange to the Germans: Sir Thomas Gresham, Elizabethan founder of the Royal Exchange, would be spinning in his codpiece.
/goo.gl/3CcnMg

Big Banks Fight to Block Crisis-Era Lawsuits From Continuing
By VICTORIA FINKLE – NY Times
Big banks are fighting tens of billions of dollars of potential legal costs linked to at least a dozen pending lawsuits arising from the financial crisis. Now they want the Supreme Court to weigh in, arguing that regulators took too long to file their claims.
/goo.gl/zFk2fU

Anthony Scaramucci looking to sell SkyBridge Capital
By Carleton English – NY Post
Anthony Scaramucci may be parting ways with his “local bodega.” The 52-year-old hedgie is mulling a sale of his SkyBridge Capital firm, a fund of hedge funds, The Post has learned.
/goo.gl/XzgRUl

Wells Fargo Sanctioned by U.S. Regulators for ‘Living Will’ Deficiencies;n J.P. Morgan, Bank of America, Bank of New York Mellon and State Street avoid sanctions
By RYAN TRACY and EMILY GLAZER – WSJ
U.S. regulators slapped embattled Wells Fargo & Co. with new sanctions Tuesday, concluding the bank had failed to devise an adequate blueprint for avoiding a taxpayer bailout if it were on the brink of bankruptcy.
/goo.gl/k56ZKw

Brexit

Brexit Bulletin: This Will Take Time
Two years just won’t be enough to seal a Brexit deal, say Hammond and the Lords.
by Ben Sills – Bloomberg
It’s supposed to take two years to extract the U.K. from the European Union. That timeline may be emerging as a point of contention, with some on the continent reluctant to help out the British.
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Post-Brexit Britain Faces a Pay Squeeze
By Mark Gilbert – Bloomberg
Don’t tell tiny Tim, but even if Brexit hasn’t put a damper on Christmas 2016, next year might be a different story. Come January, Britons will pay 5 percent more for their Lego sets, as the Danish company raises prices in response to the pound’s decline in the wake of the U.K. decision to leave the European Union. And if the Office for Budget Responsibility is right, incomes won’t increase by anything like enough to match the higher prices of consumer goods.
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Brexit need not be Farage’s style of Brexit, says Douglas Carswell
Douglas Carswell – The Guardian
Brexit does not need to resemble Nigel Farage’s idea of leaving the European Union, Ukip’s sole MP has said. Douglas Carswell also praised Gina Miller, the woman at the centre of the supreme court case to prevent Theresa May triggering article 50 without parliamentary approval.
/goo.gl/w84dFi

Exchanges, OTC and Clearing

Bats Europe steps up challenge to top index providers
Samuel Agini – Financial News
Bats Europe, the region’s largest stock exchange, is continuing its bid to compete with established index providers by launching eight new benchmarks covering mainland Europe. The exchange operator said in a December 13 statement that it will launch benchmark indices for the French, German, Swiss and Italian markets on December 19. Bats made its first steps into the index business with the launch of 18 UK-focused benchmarks in June.
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Lights out for Credit Suisse’s ‘Light Pool’ stock trading venue
John McCrank – Reuters
Credit Suisse is the latest bank to shutter one of its private U.S. stock trading venues, as increasing regulatory scrutiny makes it harder to justify the costs of running such trading systems. Credit Suisse on Tuesday confirmed through a spokeswoman that it had shuttered its alternative trading system known as Light Pool on Nov. 18 after a strategic review of its algorithmic trading offerings.
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Bats Launches New Benchmark Indices for French, German, Italian and Swiss Markets
BATS
Bats Europe (Bats), the region’s largest equities exchange, today announced it will launch eight new benchmark indices for the French, German, Swiss and Italian markets on 19 December 2016. The indices will offer real-time, high-quality and low-cost alternatives to those provided by the incumbent index providers.
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Nasdaq fined EUR5.6 million due to cyber security failures in Sweden
Hayley McDowell – The Trade
Nasdaq has been slapped with a combined fine totalling just under EUR5.6 million by regulatory watchdogs in Sweden, for failing to manage cyber risks. The Swedish Financial Supervisory Authority or Finansinspektionen (FI) found Nasdaq Clearing and Nasdaq Stockholm failed to acquire information from its outsourced cyber security provider to assess the quality of its services.
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CME Group Announces 2017 Annual Meeting Date
CME
CME Group Inc. (NASDAQ: CME), the world’s leading and most diverse derivatives marketplace, today announced that its 2017 Annual Meeting of Shareholders will be held at 10:00 a.m., Central Time, on Wednesday, May 24, 2017, in the Auditorium at CME Group, located at 20 South Wacker Drive, Chicago, Illinois.
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Producers air dissent on CME discount
Tristateneighbor.com
Volatility in the market is the No. 1 issue facing cattlemen right now, according to South Dakota Cattlemen’s Association President Todd Wilkinson. “It trickles down all the way through to your operations,” he told producers Nov. 30 at the association’s convention in Watertown.
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ICE Futures Europe Emissions Auction Result
ICE
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced that today’s auction of 3,489,500 EU Allowances (EUAs) held on behalf of the UK Government’s Department for Business, Energy & Industrial Strategy (BEIS) was cancelled as a result of the total volume of bids falling short of the volume of the allowances being auctioned.
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Horizontal Software celebrates its first day on Alternext; EUR6 million raised, market capitalisation totals EUR18 million
Euronext
Euronext is pleased to welcome Horizontal Software, a software company that offers SaaS solutions for Human Capital Management, for its first day of trading on Alternext Paris.
/goo.gl/m5aufN

Politics

The Perfect Weapon: How Russian Cyberpower Invaded the U.S.
By ERIC LIPTON, DAVID E. SANGER and SCOTT SHANE – NY Times
When Special Agent Adrian Hawkins of the Federal Bureau of Investigation called the Democratic National Committee in September 2015 to pass along some troubling news about its computer network, he was transferred, naturally, to the help desk.
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Republican Leaders Join Call for Probe of Russian Hacking of U.S. Election; Donald Trump is increasingly alone in questioning conclusion that Moscow stole
By SHANE HARRIS and SIOBHAN HUGHES – WSJ
Momentum to hold investigations into alleged Russian hacking during the U.S. presidential election picked up steam on Monday, with the Senate’s top Republican joining Democrats, the White House and other GOP leaders in calls for a probe, despite repeated dismissals by President-elect Donald Trump of intelligence assessments of the hacking.
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Robert Mercer’s Trade of the Century
Michelle Celarier – Institutional Investor
Lunch at Renaissance Technologies — the secretive, $32 billion quantitative hedge fund headquartered in East Setauket, New York — has long been a communal affair. In a sparse dining room overlooking a tree-dotted Long Island lawn, the computer scientists and mathematicians who develop Renaissance’s trading algorithms gather to dine on deli takeout and bottled water. The conversations typically tend toward mundane workday chatter: children, vacations, sports. Yet in this remote 50-acre setting, far from Manhattan’s financial district and Connecticut’s hedge fund row, one person — co-CEO Robert Mercer — stands out for expressing a singular passion: politics.
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Every “Unified Republican Government” Ever Has Led to a Financial Crash
The Reformed Broker
Josh here – below, I bring you a guest post from the mysterious and clever Wall Street Ranter, whose work you’ve seen on these pages before. You can, of course, argue correlation vs causation about the below, and that’s fine. But the fact remains – unified GOP governments have universally led to financial crises and market crashes. I know this is at odds with the enthusiasm everyone seems to be feeling now. That’s fine.
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Donald Trump’s Pledge to Loosen Regulations on Businesses Is a Heavy Lift; President-elect has a handful of ways to reach his goal, but they mostly point to a slow death of attrition for Obama rules rather than immediate elimination
By AMY HARDER and RYAN TRACY – WSJ
President-elect Donald Trump’s promise to eliminate regulations on U.S. businesses will likely take years to fulfill given the complex steps involved in reversing them and political and legal challenges from Democratic lawmakers and state attorneys general.
/goo.gl/GMqVg5

Democratic House Candidates Were Also Targets of Russian Hacking
By ERIC LIPTON and SCOTT SHANE – NY Times
WASHINGTON — South Florida has long been a laboratory for some of the nation’s roughest politics, with techniques like phantom candidates created by political rivals to siphon off votes from their opponents, or so-called boleteras hired to illegally fill out stacks of absentee ballots on behalf of elderly or disabled voters.
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Investing and Trading

Stock, bond markets could see sharp declines: U.S. financial watchdog
Lisa Lambert – Reuters
Stock and bond markets may be riding for a fall as equity prices soar and interest rates stay low, a federal monitor of U.S. financial stability said on Tuesday, warning that such a tumble could inflict serious damage on banks, life insurers and other important parts of the economy.
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When Your Hedge Fund Manager Buys a Ferrari, Find a New Manager
by Dani Burger – WSJ
Study shows link between sport car owners, volatile returns; Funds more likely to terminate, report fraud, paper finds
Maybe David Einhorn was on to something when he bought his Honda Odyssey.
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Anxious Mutual-Fund Industry Holds ‘Seismic Shift Senior Leadership Forum’; Rivals gathered to halt trend of clients leaving for index-tracking funds that match the market
By SARAH KROUSE – WSJ
About 60 rival mutual fund executives gathered inside OppenheimerFunds’ Manhattan office tower in early November to discuss a problem many of them can’t shake: persistent client withdrawals.
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Fund managers most overweight bank stocks ever: BAML
Jamie McGeever – Reuters
Fund managers have built up their biggest overweight position ever on bank stocks following Donald Trump’s surprise U.S. presidential election victory, a survey showed on Tuesday.
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Gundlach Says 10-Year Treasuries Topping 3% Would Punish Markets
by John Gittelsohn – Bloomberg
Manager says U.S. stocks, bonds and housing could suffer; DoubleLine fund has beaten 90% of peers over last three years
Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said interest rates may climb to 3 percent on 10-year Treasuries by next year as deficits and inflation rise under a Donald Trump presidency, a move that would hurt markets.
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Investors make record bet on banks in Trump euphoria; Shareholders have record overweight position in lenders, according to new survey
by: Mehreen Khan and Richard Blackden – FT
Investors are making a record bet on global bank shares following the US election, according to a new survey of institutional money managers that also highlights the risks to the sector if Donald Trump fails to deliver faster economic growth.
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How Donald Trump May Actually Widen the U.S. Trade Deficit; A strengthening dollar signals a widening gap between imports and exports
By IAN TALLEY – WSJ
Donald Trump says his platform for reviving economic growth is designed to slash the nation’s trade deficit, restoring the country’s exports to past glory.
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Institutions

Goldman Sachs to Name David Solomon, Harvey Schwartz to Succeed Gary Cohn; Goldman Sachs plans to also name R. Martin Chavez as chief financial officer
By LIZ HOFFMAN – WSJ
Goldman Sachs Group Inc. plans to elevate David Solomon and Harvey Schwartz to be top lieutenants to Chief Executive Lloyd Blankfein, according to people familiar with the matter, filling a void left by No. 2 executive Gary Cohn, who is leaving the bank to join the Trump administration.
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Cohn exit puts Goldman spotlight on succession and strategy
Ben McLannahan in New York and Laura Noonan in London – Financial Times
Gary Cohn’s resignation from Goldman Sachs to join Donald Trump’s administration has opened up a couple of crucial questions for the Wall Street bank: how, and when, to replace Lloyd Blankfein, who is about to embark on his 12th year at the top. Mr Cohn, who like Mr Blankfein rose through the commodities trading unit, was long considered his heir apparent. As president and chief operating officer, he substituted for Mr Blankfein as the face of Goldman when the chairman and chief executive endured a gruelling bout of chemotherapy about a year ago.
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US Agencies Announce Determinations on October Resolution Plan Submissions of Five Systemically Important Domestic Banking Institutions
Press Release
The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board on Tuesday announced that Bank of America, Bank of New York Mellon, JP Morgan Chase, and State Street adequately remediated deficiencies in their 2015 resolution plans. The agencies also announced that Wells Fargo did not adequately remedy all of its deficiencies and will be subject to restrictions on certain activities until the deficiencies are remedied.
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Wells Fargo fails ‘living will’ test, faces restrictions: regulators
Dan Freed and Patrick Rucker – Reuters
Wells Fargo would damage financial markets if it were pushed to bankruptcy, U.S. regulators said on Tuesday as they imposed restrictions on the bank’s business. The nation’s largest banks must offer regulators ‘living wills’ that outline how they would be unwound in an orderly way. Wells Fargo was one of five banks to fail an initial assessment in April. On Tuesday, regulators determined that Wells Fargo’s living will still fell short and that the San Francisco-based bank would be sanctioned, the Federal Deposit Insurance Corporation said in a statement.
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Billionaire Michael Hintze Is Having A Great Year With Main Hedge Fund Up 30%
Nathan Vardi – Forbes
Michael Hintze, the billionaire hedge fund manager specializing in credit investing, is having a terrific year while most hedge fund managers continue to struggle. Hintze’s main hedge fund, the $2.7 billion CQS Directional Opportunities Fund, is up 30.2% in the first eleven months of 2016, making Hintze one of the year’s big hedge fund winners.
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Banks get 5 more years to comply with Volcker rule
BY HAZEL BRADFORD – Pensions & Investments
Banks required by the Volcker rule to dispose of illiquid funds have five more years to do so, the Federal Reserve Board announced late Monday.
/goo.gl/FKL3QZ

Fintech

Edge Financial Technologies Introduces RiskResponder, the Proactive Realtime Risk Management Solution
www.prweb.com
“Trading has changed to be always on, highly automated, spread across multiple platforms and brokers. The ability to monitor and control trading is more important than ever, and solutions on the market have not kept up. RiskResponder monitors trading activity in real-time across ISVs, brokers, and exchanges. RiskResponder detects behavior outside of risk parameters, and rapidly responds to slow down or halt the trading activity, protecting profits and limiting losses.” said Jitesh Thakkar CEO of Edge Financial Technologies.
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Ex-Barclays CEO joins Blockchain board amid record growth
Hayley McDowell – The Trade
Former chief executive officer at Barclays, Anthony Jenkins, has joined the board of Blockchain, following the launch of his start-up in the distributed ledger tech space. Blockchain runs the largest production distributed ledger technology platform and has reported record growth this year, since its launch in 2011.
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Fintechs May Soon Get Bank Charters
Emilia David – WatersTechnology
Financial technology firms may have the chance to be considered special-purpose national banks as the Office of the Comptroller of the Currency (OCC) will move forward with plans to accept applications for special-purpose national bank charters.
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Forget Bitcoin and Mobile Pay. Cash Is Still King of the World; A study of seven countries shows reports of the death of cash have been greatly exaggerated.
by Ben Steverman – Bloomberg
Everywhere you look, someone is trying to kill off cash.
India eliminated 23 billion notes from circulation in an effort to fight tax evasion and corruption. Bitcoin and mobile payments are still hyped as the wave of the future while credit cards offer increasingly aggressive rewards. An influential U.S. economist wants to stop printing denominations of $20 and above. His goal: help central banks impose negative interest rates as monetary policy.
/goo.gl/H3XVFk

Regulation

Manhattan U.S. Attorney Announces Charges Against Six Individuals In International High-Yield Investment Fraud Scheme; Scheme Participants Impersonated Federal Reserve Officials to Swindle Over $50 Million from Investors in the United States and Foreign Countries
U.S. Department of Justice
Preet Bharara, the United States Attorney for the Southern District of New York, Angel M. Melendez, Special Agent In Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (“HSI”), and Deirdre L. Fike, Assistant Director in Charge of the Los Angeles Field Office of the Federal Bureau of Investigation (“FBI”), announced the unsealing of an Indictment charging six defendants with conspiracy, wire fraud, impersonation of Federal Reserve Bank of New York (“New York Fed”) officials, money laundering, and other crimes in connection with a fraudulent high-yield investment scheme that resulted in the theft of over $50 million from investors in the United States and around the world.
/goo.gl/qD1lNI

Regions

China’s Draconian Rule Over The Renminbi Is A Double-Edged Sword
Frederic Li – The Market Mogul
A flash crash occurs when there is a deep, speedy and breakneck price movement of a financial asset within an extremely short period of time, generally milliseconds. It is a result of the technique of high-frequency trading (HFT) through which, without proper execution and examination, billions of dollars can be wiped out in a few minutes or even seconds.
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Trader Nidera Said to Find $150 Million Financial Hole in Brazil
by Isis Almeida and Javier Blas – Bloomberg
Chinese food company Cofco owns the Dutch grain trader; Nidera said it review found a balance-sheet “overstatement”
Nidera BV, a division of China’s largest food company, has found a $150 million hole in the accounts of its Brazilian division, according to a person familiar with the matter.
/goo.gl/zLzzu5

Japan, Looking for Money, Is Poised to Legalize Casino Gambling
By JONATHAN SOBLE and NEIL GOUGH – NY Times
Japan is set to deal itself into the multibillion-dollar casino industry.
/goo.gl/ZVdToZ

Miscellaneous

Cargill Donates $3 Million Over Three Years to Feeding America to Support Nutrition Solutions
Cargill
Today, Feeding America, the largest domestic hunger-relief organization, announced a $3 million grant from Cargill to provide children and families with nutrition solutions. This three year gift will help food banks provide nourishing meals to people in need by increasing access to fruits and vegetables, providing nutrition education, investing in a diabetes prevention pilot program and funding food safety measures to ensure the highest qualities of food distribution.
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