First Read

CME Group CEO Terry Duffy on Business and Interest Rates Under the Trump Administration

With a new administration in place and a more optimistic outlook from the market community, CME Group is well positioned to succeed, according to CEO Terry Duffy.

Whereas global regulatory efforts have served as a headwind for the industry since the financial crisis, now the United States is benefiting from the perception that the new administration’s stance on regulation will serve as an tailwind. There is much left to be determined, certainly, but even the shift to no new regulation as opposed to deregulation is sufficiently pro-business to elicit optimism, said Duffy. Adding to that confidence is the Federal Reserve as it primes for more interest rate hikes.

CME Group more than weathered this regulatory storm while building out their interest rate complex in a zero rate interest rate environment with new products. CME’s Fed Fund futures and Ultra 10-Year Treasury futures set daily records for volume on February 22, and the exchange broke open interest records in Treasury futures on 14 consecutive days in February. The result is that CME has a deep pool of interest rate contract liquidity and the true action hasn’t even started yet.

Watch the video »


Rosenthal Collins Group Names Hilton Sheng to Head New Structured Products Division
Rosenthal Collins Group LLC (RCG), a leading independent futures clearing firm, announced today the appointment of Hilton T. Sheng to the new position of President, Structured Products Division. Sheng, who joins RCG with more than 30 years of futures industry experience, will operate out of the New York office and build on the company’s newly established expertise in structured products.

***** RCG gets a lot of points for hiring Hilton.


UBS Raises $110 Million Fund to Invest in Women-Led Firms
Laura Colby – Bloomberg
Venture capital focuses on health, education, environment; Women get 3% of VC investments but bring in better returns
UBS Group AG’s American wealth management unit has helped raise $110 million for a U.S. venture capital fund that will invest in companies in the health, education and environmental areas that are led by or co-managed by women.

***** Timed nicely for International Women’s Day


Long-Time Options Industry Leader Gina McFadden is First Woman to Receive 2017 Sullivan Award
OCC, The Options Industry Council (OIC) today announced that Gina McFadden, a long-time leader in the U.S. listed equity options industry, will be the first woman to receive the 2017 Joseph W. Sullivan Options Industry Achievement Award. This award is given to individuals in recognition of outstanding contributions to the U.S. options industry. The award will be presented at the 35th Annual Options Industry Conference on May 12 in Scottsdale, Arizona.

***** OIC needs a little help with their headline writing, but gets the important stuff right as Gina McFadden is an excellent choice.


Wednesday’s Top Three
Our top stories from Wednesday were led by Business Insider’s State Street Global Advisors’ girl statue in front of Wall Street bull. Second was JLN’s piece on the Nodal exchange titled More power to ’em: Nodal acquired by EEX. Third went to the New York Post’s Wall Street CEO’s most notorious critic not ready to shut up


Would-Be Trump Appointees Say ‘No Thanks’ Due to Lobbying Ban
Ben Brody, Shannon Pettypiece and Bill Allison – Bloomberg
Potential staff members cite ethics order in walking away; White House says there’s no shortage of candidates for posts
One sign of how entrenched the revolving door has become in Washington: Experienced people are forsaking chances to fill key posts in President Donald Trump’s administration partly because of his executive order forbidding federal employees from lobbying for five years after leaving government service.

***** Some very qualified candidates don’t want to give up the long term for a short term opportunity.


How to Become an International Gold Smuggler; Harold Vilches, a 23-year-old Chilean, exported $80 million in contraband gold. It all started with a Google search.
Michael Smith and Jonathan Franklin – Bloomberg
As the minutes ticked by on the afternoon of April 28, 2015, Harold Vilches watched stoically while customs officers at Santiago’s international airport scrutinized his carry-on. Inside the roller bag was 44 pounds of solid gold, worth almost $800,000, and all the baby-faced, 21-year-old college student wanted was clearance to get on a red-eye to Miami. Vilches had arrived at the airport six hours early because he thought there might be some troubleóhe’d heard that customs had recently seized shipments from competing smugglers. But Vilches had done this run, or sent people to do it, more than a dozen times, and he’d prepared his falsified export paperwork with extra care. He was pretty sure he wouldn’t have any trouble.

****** Gold smuggling is an old profession.


MarketsWiki Stats
95,200,588 pages viewed; 22,373 pages; 204,217 edits
MarketsWiki Statistics


Lead Stories

New Force on Wall Street: The ‘Family Office’; Clans with nine-figure fortunes are increasingly investing through unregulated firms known as family offices, impinging on the business of investment banking and private equity
Anupreeta Das and Juliet Chung – WSJ
On a warm October day in 2014, envoys from 15 of America’s wealthiest families gathered at Circle T, Ross Perot Jr.’s 2,500-acre ranch outside Dallas. Skeet-shooting was on the agenda, but the real purpose of the two-day retreat was for the families to get acquainted and eventually team up to pursue investments.

The Past and the Future
ISDA derivatiViews
There’s a lot we take for granted in the derivatives space. The fact there’s a common language, for example – an agreed set of definitions and standard terms everyone can agree on. This means there’s a common foundation for negotiating trades, whatever the product and whatever the jurisdiction. But it wasn’t always like this, and it certainly wasn’t inevitable we’d get to this point.

Corporate Insiders Haven’t Been This Uninterested in Buying Stocks Since Ronald Reagan Was President; There were 279 insider buyers in January, the lowest in records going back to 1988
Chris Dieterich and Ben Eisen – WSJ
Corporate executives are buying their own firms’ shares at the slowest pace in at least 29 years, the latest sign of uncertainty as the booming U.S. stock bull market this week enters its ninth year.

Technology outsmarts the human investor; Automation eats into the financial profession by unbundling jobs
John Gapper – FT
To grasp why Standard Life agreed to buy Aberdeen Asset Management for £3.8bn this week, it helps to recall an experiment at the Oregon Research Institute in the 1960s, that rated how good doctors were at making judgments compared with formulas they helped to design.

Gutting Dodd-Frank Is Hard, So Republicans Turn to Easier Things
Elizabeth Dexheimer – Bloomberg
Key Republican lawmakers turn to less controversial measures; Rolling back Dodd-Frank financial law isn’t close at hand
Here’s the latest indication Wall Street regulations won’t be gutted anytime soon: Republicans who write financial laws are starting to focus on other things.

Goldman Sachs’ lessons from the ‘quant quake’
Robin Wigglesworth – Financial Times
It was a typical New York summer day, the kind where arriving at Goldman Sachs’ perfectly air-conditioned offices in downtown Manhattan was a blissful release from the humid weather outside. But for Gary Chropuvka it proved to be one of the worst days of his life.

Hedge funds adopt novel methods to hunt down new tech talent; Wall St tries coding competitions and data challenges to find new recruits
Robin Wigglesworth – FT
Graphic novels, coding competitions, mammoth pay packets and even entire university research centres are just some of the tactics hedge funds are turning to as they seek to win an intensifying war for technology talent.

Watkins Steps In as Gill Retires from BNYM
Profit & Loss
Dan Watkins has been appointed head of BNY Mellon Markets in Europe, the Middle East and Africa (EMEA). He succeeds Richard Gill, who is retiring from the business after 22 years with the group. Gill joined Bank of New York in 1995 as head of its spot FX trading team, before being appointed global co-head of FX trading and senior global markets officer in Europe at BNY Mellon.

Debt Ceiling Quandary Unleashes Volatility in Treasury Bills
by Alex Harris and Liz McCormick – Bloomberg
Treasury is cutting bill sales to meet statutory threshold; CBO says the U.S. is likely to run out of cash in the fall
Get ready again for some wild fluctuations in the U.S. Treasury bill market. On March 16, the statutory limit on the nation’s debt, better known as the debt ceiling, will be reinstated.

Trump SEC Pick Made Millions Representing Banks, Hedge Funds
Benjamin Bain and Elizabeth Dexheimer – Bloomberg
Jay Clayton’s clients include Goldman Sachs, Pershing Square; He’s earned $7.62 million at law firm since 2015, form shows
President Donald Trump’s pick to lead the Securities and Exchange Commission has earned $7.62 million since 2015 representing some of Wall Street’s biggest firms, including Goldman Sachs Group Inc. and Bill Ackman’s Pershing Square Capital Management, according to a federal disclosure form.

U.S. regulators push new ETF rules despite industry’s howl
Trevor Hunnicutt – Reuters
U.S. regulators are advancing rules this week to tighten standards on the ballooning exchange-traded fund industry over the objections of asset managers including BlackRock Inc (BLK.N) and Invesco Ltd (IVZ.N).

For one glorious moment, business TV perfectly captured what’s going on in markets right now
Linette Lopez – Business Insider
There was one glorious moment on Wednesday, when simultaneous interviews on Bloomberg TV and CNBC perfectly captured the market we’re in right now.

J.P. Morgan
J.P. Morgan conducted an online FX E-Trading survey to provide you with a snapshot of upcoming trends. Nearly 200 institutional FX traders participated in November 2016.

Trump White House job promised to Scaramucci goes elsewhere
Lisa Beilfuss – MarketWatch
Financier Anthony Scaramucci’s move from Wall Street to Washington has become unlikely after the Trump administration communications job he was offered in January was handed to someone else.

Oil prices back under pressure with WTI dropping under $50; Renewed concerns about a supply glut send ripples through the currency market
Mamta Badkar, Gregory Meyer and Robin Wigglesworth – FT
Oil prices were back under pressure on Thursday, with the West Texas Intermediate benchmark falling under $50 for the first time since December.

Shale Billionaire Hamm Says Industry Binge Can ‘Kill’ Oil Market
Javier Blas and David Wethe – Bloomberg
WTI plunges 5% to year-low just above $50 on oversupply fears; Saudi Arabia has warned about U.S. output growing ‘too fast’
Harold Hamm, the billionaire shale oilman, said the U.S. industry could “kill” the oil market if it embarks into another spending binge, a rare warning in a business focused on fast growth to compete with OPEC.

Exchanges, OTC and Clearing

London Stock Exchange Group Announces New International Securities Market
London Stock Exchange Group
London Stock Exchange Group (LSEG) today announces an additional market for the issuance of primary debt targeted at institutional and professional investors, the International Securities Market (ISM). The exchange-regulated multilateral trading facility (MTF) market will operate alongside London Stock Exchange plc’s (LSE plc) other markets. LSE plc will publish a market consultation at the end of March on the ISM’s proposed rulebook, prior to the launch of the ISM expected in Q2 2017, subject to regulatory approval.

MTS Equips Customers for MiFID II Compliance Across European Trading Venues
London Stock Exchange Group
Customers can benefit from LSEG and Boat Services TRADEcho OTC trade reporting service
MTS, one of Europe’s premier fixed income electronic trading venues, is helping buy- and sell-side customers across its electronic marketplaces prepare for compliance with MiFID II and MiFIR regulatory standards ahead of the introduction of the new legislation in January 2018 with the launch of a dedicated web portal and trade reporting service.

CEO Chat: Sean Debotte, Omega Securities
John D’Antona – MarketsMedia
Sean Debotte, chief executive officer of Canada’s Omega Securities, operator of the Omega and Lynx ATS, has set his sights high ó looking to grow his market share to 10% within 18 months. Debotte sat down with Traders Magazine recently to explain just how his two venues will achieve this. Omega and Lynx operate where Nasdaq Canada and the behemoth TMX Group’s multiple exchanges garner the lion’s share of press.

ASX automates futures and options contracts
Hayley McDowell – The Trade
The Australian Securities Exchange (ASX) is automating the creation and rollovers of 20,000 futures and options contracts annually through the use of GoldenSource’s technology.

The Other London Stock Exchange
This week Patrick Birley discusses how you can invest in brands you won’t find on any other exchange and introduces you to one of our issuers, Sandal.

Sydney’s ASX tower a Quay sale for Malaysian owner
Ben Wilmot – Australian Business Review
The Exchange Centre in the heart of Sydney’s central business district is poised to hit the market with the asset likely to reap a price of more than $325 million as the precinct in which it sits is dramatically overhauled. The building, just a block from Circular Quay, is in an area that is being almost entirely redeveloped with projects by AMP Capital, Lend Lease and Mirvac Group, as well as China’s Dalian Wanda and Poly Group.

Foreign investors now trust India story: London Stock Exchange
Business Standard
The central government and regulators have stepped up engagement with foreign investors, for enabling home companies to raise funds from the international market, said senior executives of the London Stock Exchange (LSE), in an interaction with Business Standard.

PEX Issue 83 February 2017
Palestine Exchange
Investor Monthly Newsletter Issue


Equinix moves New York headquarters
Equinix has signed a ten-year lease for the entire 16th floor of 1133 Avenue of the Americas building near Bryant Park, New York. The company is moving to the 22,111 square foot (2,054 sq m) office from its current New York headquarters in Times Square.

Broadridge’s Move To Newark Will Bring 1000 Jobs, Company Says
How does the addition of 1,000 jobs to the city sound, Newark? That’s how many positions that Broadridge Financial Solutions expects to bring along when it moves to its new home at 2 Gateway Center in downtown Newark, according to a company news release.

Telstra pledges to make job interview shortlists include at least 50% women: Lessons for your startup
In an announcement to coincide with International Women’s Day, Telstra chief executive Andy Penn unveiled a plan to build the telco’s “female talent pipeline” by requiring that interview shortlists for roles be made up of at least 50% women candidates, or 25% for roles in which there’s a known gender imbalance in available candidates in the job market.

Equinix to raise $2.8b ahead of Verizon asset purchase
Telecom Asia
Equinix revealed plans yesterday to raise at least $2.875 billion in public offerings over the next few weeks. The data center giant is lining up the necessary funds to make their previously announced purchase of a selection of US operator Verizon’s data center footprint.

TradingScreen Expands European Operations
PR Newswire
TradingScreen, the leader in electronic trading solutions, has announced the expansion of its European operations with the opening of a new office in Frankfurt, Germany.

Facebook fires four more shots into the server market
Julie Bort – Business Insider
In just six years, Facebook’s Open Compute Project (OCP) has become a major phenom in the data center hardware industry that has attracted an almost cult-like following among engineers. And on Wednesday, Facebook upped the bar yet again. Facebook announced that it was giving away four new designs for brand-new types of computer servers invented at Facebook.

Alphabet Leads Investment in U.K. Payments Startup Currencycloud
Adam Satariano – Bloomberg
London-based startup provides tools for cross-border payments; Funding of finance-focused startups fell globally last year
Alphabet Inc.’s venture capital unit led a $25 million investment in the U.K. payments startup Currencycloud, which lets users to electronically send money internationally via mobile apps.


Banks spent record amounts on lobbying in recent election
Pete Schroeder – Reuters
Banks and other financial companies expecting big benefits from Republican-led deregulation spent record amounts on lobbying in the last election cycle, according to an advocacy group report released on Wednesday.

Wall Street spends record $2bn on US election lobbying; Survey finds banks and hedge funds ramp up efforts to reshape government rules
Ben McLannahan and Barney Jopson – FT
Wall Street spent a record $2bn on lobbying and campaign contributions during the last US election cycle, according to a new survey, as big banks, hedge funds and other financial institutions stepped up efforts to reshape rules to their advantage.

Watchdog presses U.S. lawmakers to probe Icahn’s role with Trump
Chris Prentice – Reuters
A government watchdog group, Public Citizen, said on Wednesday it has asked lawmakers to investigate whether Carl Icahn violated lobbying disclosure laws, a complaint the billionaire investor denied and called a “witch hunt.”

‘It’s like kumbaya:’ Trump’s genial private meetings with CEOs jar with public attacks
Ginger Gibson and David Shepardson – Reuters
When the bosses of some of the world’s largest pharmaceutical companies headed to Washington in January to meet U.S. President Donald Trump, it had all the makings of a potentially hostile meeting.

China grants preliminary approval to 38 new Trump trademarks
Erika Kinetz – AP
China has granted preliminary approval for 38 new Trump trademarks, paving the way for President Donald Trump and his family to potentially develop a host of branded businesses from hotels and golf clubs to bodyguard and concierge services, public documents show.

China lawyers play down suspicions over Trump trademarks; Experts on country’s IP law say approvals and timing were the result of due process
Lucy Hornby in Beijing – FT
Donald Trump has basketball star Michael Jordan to thank for securing trademarks in China, legal experts in the country said on Thursday, as they played down concerns that Beijing’s decision represented a special concession to the new US president.

Trump Promised to Eliminate National Debt in Eight Years. Good Luck With That; His administration plans to balance the budget with what he says will be huge gains in economic growth.
Peter Coy – Bloomberg
Last April, lunching amid construction debris at his new hotel five blocks from the White House, Republican presidential candidate Donald Trump told the Washington Post he would get rid of the national debt “over a period of eight years.” It may have been the boldest promise he’s ever made, considering the U.S. hasn’t been debt-free since 1835. The debt at the time was more than $19 trillion, and rising. Trump predicted he could turn back the tide even though he thought the country was headed for a “very massive recession.”

Donald Trump could be impeached on four grounds, former Labor Secretary Says
Samuel Osborne – The Independent
There are now four grounds to impeach Donald Trump and a fifth is “on its way”, according to former Labour Secretary Robert Reich.

Donald Trump: Psychiatry professors say ‘dangerous’ US President must be removed from post for public safety; ‘The military powers entrusted to him endanger us all,’ say academics
Katie Forster – Independent
Donald Trump is “dangerous” and drastic steps must be taken to protect the public from him, two leading psychiatrists have warned.


SEC nominee Clayton vows separation from his Wall Street law firm
Amanda Becker – Reuters
Wall Street attorney Jay Clayton will recuse himself from matters involving Barclays Bank, Deutsche Bank AG and other clients he has recently represented if confirmed to head the U.S. Securities and Exchange Commission under the terms of an ethics agreement disclosed on Wednesday.

Investors chained to bitcoin bets as U.S. ETF decision looms
Gertrude Chavez-Dreyfuss and Trevor Hunnicutt – Reuters
Investors are betting market regulators will approve what would be the first U.S. exchange-traded fund to track the price of bitcoin.

Basel III Leverage Ratio
Amir Khwaja – Clarus Financial Technology
The Basel III Leverage Ratio, often referred to as the Supplementary Leverage Ratio (SLR), is one of the important new metrics introduced as a response to the Financial Crisis of 2007-08 and one which continues to receive a lot of press coverage and discussion. In this article I will provide an overview and some of the detail that is most relevant to cleared derivatives.

Bitcoin Tax Fight Brews as Digital Chamber Set to Battle IRS
Matthew Leising – Bloomberg
Users of virtual currencies like bitcoin are backing an industry group to oppose tax authorities’ efforts to collect detailed information about the customers of a popular digital currency exchange.

Signs, Signs, Everywhere a Sign: Changes in Store for SEC Enforcement under the Trump Administration
Cadwalader, Wickersham & Taft LLP – JDSupra
Even before President Trump’s nomination of Jay Clayton as the next Chairman of the Securities and Exchange Commission (“SEC” or “Commission”), signs have been appearing that changes are afoot within the Division of Enforcement (“Enforcement Division”).

ESMA seeks two candidates for its stakeholder representative group
The European Securities and Markets Authority (ESMA) is seeking candidates to represent the interests of users of financial services, a category which includes individuals and/or individuals or associations delivering services and advice to retail users, as members of its Securities Markets Stakeholders Group (SMSG).

Corporate and Securities Alert: New SEC Rule Calls for Hyperlinks to All Exhibits Filed with Registration Statements and SEC Reports
Fenwick & West LLP – JDSupra
The U.S. Securities and Exchange Commission on March 1, 2017, adopted rules requiring reporting companies to include in their 1933 Act registration statements and 1934 Act periodic and current reports and registration statements a hyperlink to, essentially, all documents that are filed as exhibits to that registration statement or report. The new rules become effective for filings made on or after September 1, 2017, with limited exceptions for certain small filers.

FCA Fires Warning Shot Over Research Commission Failures
Neil Scarth, Frost Consulting – TABB Forum
Asset managers continue to struggle with research valuation and unbundling requirements, which are about to become much more stringent under MiFID II. Falling foul of the regulators can be fatal.

NFA Board Update
NFA Vice-Chairman Maureen Downs and President Dan Roth discuss highlights and other notable information from NFA’s February Board meeting, including Board and Executive Committee election results, the collection of market and credit risk data from swap dealers, and Member education. The video is intended to keep NFA Members and the investing public apprised of the important topics that NFA’s Board discusses.

Investing and Trading

IOSCO adamant bond liquidity has not declined
Hayley McDowell – The Trade
The board of the International Organisation of Securities Commissions (IOSCO) has rejected industry claims that liquidity in secondary corporate bond markets has declined.

DurationóWhat an Interest Rate Hike Could Do to Your Bond Portfolio
If you own bonds or have money in a bond fund, there is a number you should know. It is called duration. Although stated in years, duration is not simply a measure of time. Instead, duration signals how much the price of your bond investment is likely to fluctuate when there is an up or down movement in interest rates. The higher the duration number, the more sensitive your bond investment will be to changes in interest rates.

Risk of faster US interest rate cycle looms; Market conversation moves to how quickly Fed will raise rates after March move
Roger Blitz and Michael Mackenzie – FT
A new urgency is gripping financial markets. Talk of a Federal Reserve rate increase next week is no longer the main conversation, with interest rate futures now pricing it as a near certainty. How quickly the Fed moves after March is now the hot topic.

Wilmar scooping up sugar in bulk buys
Straits Times
Wilmar International is buying unprecedented amounts of sugar on the United States futures exchange, the Wall Street Journal has reported, creating confusion in one of the world’s most volatile commodity markets.

****SD: In case you missed the WSJ story a few days ago.

FTSE Russell turns to investors on Snap voting rights quandary
Ross Kerber – Reuters
FTSE Russell will consult with big investors on whether to include companies like Snap Inc (SNAP.N) in its widely followed stock indexes even if their shares lack voting rights, an executive said.

Sulphur cap will hurt fuel oil sales: Analyst
Jacqueline Woo – Straits Times
The market for fuel oil – mainly used for ships – may well have a gloomy future given recently-announced global regulations to limit sulphur emissions from ships, according to an industry analyst.

Michael Bloomberg’s Money Manager Steps Down; Alice Ruth succeeded by Brad Briner and Andrew Mulderry
Juliet Chung – WSJ
Michael Bloomberg’s long-time money manager, Alice Ruth, has stepped down from that role and is considering other money-management positions, said people familiar with the matter.

Bill Gross’s Bond Bear Market Looms as 10-Year Yield Nears 2.6%
Brian Chappatta – Bloomberg
Janus market veteran called it a key technical level; Fibonacci analysis points to 2.64% as a crucial area
To Bill Gross, the bear is about to roar in the $13.9 trillion Treasuries market.

Assessing the Markets’ Shift to a ‘Presidential Put’
Mohamed A. El-Erian – Bloomberg
Stock-market investors, especially the very bullish ones who have been proven right and have been richly rewarded in recent years, are in the midst of a gradual transition in their operating regime.

What are odds of stock market meltup? meltdown?
Adam Shell – USA TODAY
What better time to opine on what comes next for the stock market than on the 8th anniversary of the current bull market.

Why U.S. soldiers may want to start brushing up on investing
Alessandra Malito – MarketWatch
New military recruits will have a new retirement system to learn. The life of a military service member has never been an easy one, but one perk has been the guaranteed pension after 20 years of service. That’s about to change.


Morgan Stanley hires Obama counterterrorism advisor as technology executive
Olivia Oran – Reuters
Morgan Stanley (MS.N) has hired a former senior counterterrorism advisor in the Obama administration, Jen Easterly, to advise the bank on managing technology risk.

John Leonard Joins Macquarie Group’s Delaware Investments as Head of Equities
Macquarie Group’s Delaware Investments today announced that John Leonard has joined the firm as head of equities. With more than 25 years of industry experience, Leonard is responsible for providing strategic oversight of the firm’s nine US-based equity investment teams. Based in Philadelphia, he reports to Shawn Lytle, president of Delaware Investments. Leonard is a member of the global management committee led by Ben Bruck, global head of Macquarie Investment Management.

Pimco revamps BOND ETF, changing fund’s name and managers
Trevor Hunnicutt and Jennifer Ablan – Reuters
Pacific Investment Management Co (Pimco) is replacing the full slate of managers on its Total Return Active Exchange-Traded Fund (BOND.P) and changing its name, a spokeswoman for the fund management company said on Wednesday, the latest transformation for what was once the largest actively managed ETF.


Germans Really, Really Love the Euro
Lorcan Roche Kelly – Bloomberg
As worries over the future of the euro zone heat up, the union’s biggest member is doubling down on the single currency in an underappreciated way.

The United States of Inertia
Daniel Moss and Scott Lanman – Bloomberg
Americans like to think of themselves as great risk takers, rolling back frontiers and imbued since birth with a spirit of entrepreneurship. But what if the technological revolutions spawned in Silicon Valley were, ironically, symptoms of a risk-averse country? Underneath the latest app for sex or music, we are becoming older and more comfortable with stasis and statism, according to guest Tyler Cowen. Dan and Scott ask him why we’ve become more like Europe and poster children for sclerosis: France, Germany and Italy.

French Banks Still Blackball Le Pen as Companies Reach Out
Helene Fouquet and Stefania Spezzati – Bloomberg
National Front leader holds first talks with Cac 40 CEO; French mid-cap lobby group requests meeting this month
Marine Le Pen is making inroads with corporate France weeks before the presidential election, though the country’s lenders and investors are still shunning her anti-euro agenda.

The ECB Faces a Balance Sheet Dilemma
Danielle DiMartino Booth – Bloomberg
Nature versus nurture. That philosophical debate is more pertinent than ever when it comes to the interventionist efforts of central banks that seek to will their economies back onto a sustainable growth path. But even the noblest of intentions can bump up against limitations when nature, in this case the free functioning of financial markets, is hampered to a great degree.

This $430 Billion Wealth Manager Says to Pass on U.K. Stocks
Aleksandra Gjorgievska – Bloomberg
In a world where investors are betting on stocks tied to economic growth, the U.K. equity market is not the place to be.

Enter Berlusconi: A Man, a Ban, and His Plan to Restore the Lira
Marco Bertacche and Chiara Albanese – Bloomberg
Former PM proposes a parallel currency system for Italy; Italy is euro’s least enthusiastic member: Eurobarometer
Markets wincing at every twist in Marine Le Pen’s electoral fortunes have helped revive political risk in the heart of the euro zone.


U.S. insurer AIG makes Luxembourg its EU hub to cope with Brexit
Carolyn Cohn – Reuters
U.S. insurer AIG plans a European Union hub in Luxembourg following Britain’s decision to leave the bloc, the biggest financial services firm so far to detail such a move.

U.K. to Raise $2.3 Billion More in Bank Surcharge Amid Brexit
Richard Partington – Bloomberg
Bank corporation tax surcharge to net more than U.K. planned; Higher forecast comes as some lenders plan to move operations
The U.K. forecast an additional 1.9 billion pounds ($2.3 billion) of tax on bank profits over the next five years, even as some global lenders prepare to relocate operations following Brexit.

May’s Brexit Vow to Retake Control Puts BOE’s Sway at Risk
John Glover – Bloomberg
Demand for access to single market may diminish BOE autonomy; Lawmaker says British financial regulators face a ‘quandary’
Prime Minister Theresa May’s promise to “take back control” by leading the U.K. out of the European Union may leave the Bank of England with less influence than ever over the financial rules it enforces.


The big news is tiny returns for media groups from Facebook; Publishers are not securing revenues they hoped for from ‘distributed content’ services
Matthew Garrahan – FT
The unexpected election victory and chaotic early days of Donald Trump’s presidency have been a boon for newspaper publishers, which have reported sharp rises in subscriptions. The New York Times added a record 277,000 new digital subscribers in the fourth quarter, while the Wall Street Journal gained 110,000 in the same period.

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