No-Deal Brexit Risk Grows After EU Rejects Boris Johnson’s Demands

Jul 26, 2019

First Read

Hits & Takes
JLN Staff

There will be no services for the late C.C. Odom. In a phone interview, Mrs. Roxie Odom, C.C.’s widow, said C.C. did not like funerals and did not want to put his friends through that.~JJL

Former CME Group board member C.C. Odom died Sunday at the age of 76, she said, noting his September birthday. C.C. had been suffering from Alzheimer’s the last four or five years, she said, and she had cared for him at home during this time until the last two months.~JJL

C.C. Odom served on more than 40 boards of directors, or board level committees, during his long career in financial services. Mrs. Odom selected Mission Road Ministries, 8706 Mission Road, San Antonio, Texas 78214, as the beneficiary of any memorial funds, noting Mr. Odom had served on its board.~JJL

If you would like to reach out to Roxie Odom by email, please email me at and I will share her email address. if anyone wants to share their condolences with her or stories about C.C., I am sure she would appreciate hearing from you.~JJL

The CME Group shared the following statement about the passing of C.C. Odom: “The CME Group community is saddened by the passing of C.C. Odom. C.C. was a long-time board member, first of CBOT and then CME Group, and a strong advocate for futures markets around the world.”~Terry Duffy, CME Group Executive Chairman and CEO.~JJL

Phil Mackintosh, the chief economist at Nasdaq, has published an editorial in the Wall Street Journal in response to an earlier op ed by Larry Harris called “The SEC Wants to Give Public Investors a Fair Shot.” Mackintosh defends exchange rebates and Nasdaq’s market model against accusations of unfairness.~SR

CryptoMarketsWiki now has a podcast! Click here to listen.~MR


Understanding Government and Regulation: Lessons From The Inside

MarketsWiki Education

Andy Busch, former chief market intelligence officer at the CFTC, had some pragmatic but alarming advice for interns who attended day one of MarketsWiki Education’s World of Opportunity event: “In D.C., someone is always out to get you.”
In this video, Busch goes into the CFTC’s focus on cryptocurrency and why the agency is hated inside the Beltway.

Watch the video »


US Weather So Hot That Pigs Are Getting Skinnier, Boosting Prices
Lydia Mulvany – Bloomberg
Farmers aggressively sold winter animals, now weights are down; Cash hog prices rebound and are 22% higher than a year earlier
How hot is it? It’s so hot that pigs are losing weight.America has had a fat pig problem in recent months, with a hefty hog herd sending pork prices tumbling. But as the U.S. bakes under scorching heat, the animals are sweating off the pounds.
You’ve reached your free ar

****SD: Johnny Carson – “It was so hot today that Burger King was singing, ‘if you want it your way, cook it yourself.'”


6-year-old YouTuber buys $8 million property
A six-year-old South Korean YouTube star with 30 million subscribers has purchased a multimillion dollar, five-story property in Seoul.
Boram bought the 9.5 billion Korean won ($8 million) building in the trendy Seoul suburb of Gangnam earlier this year, through the Boram Family company, which was set up by the YouTuber’s parents, according to a public real estate registration document.

****JB: What did you accomplish by the age of six?


CryptoMarketsWiki Coin of the Week: Libra
Things aren’t looking good for Libra these days. On July 24, Cointelegraph published a story saying that Alfred F. Kelly Jr., the CEO of Visa, said that not only has Visa only signed up for the Libra Association through a “non-binding” letter of intent, but none of the 27 “member” companies have actually officially signed up for the association. On top of that, a poll conducted by CivicScience showed that, of the 1,799 adults questioned in the survey, only 5 percent indicated any interest in the stablecoin whatsoever.


Thursday’s Top Three
Our top stories of the day on Thursday were led by Bloomberg’s The Logic Behind the Bonds That Eat Your Money. Second was The New York Post’s Jeffrey Epstein found injured on floor of his NYC jail cell. Third was Bloomberg’s On Crypto Exchanges, the Trades Don’t Always Add Up


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Lead Stories

No-Deal Brexit Risk Grows After EU Rejects Boris Johnson’s Demands
Robert Hutton and Joe Mayes – Bloomberg
Barnier, Juncker dismiss Johnson call to scrap Irish backstop; New prime minister puts Gove in charge of preparing U.K.
The scale of the challenge facing Boris Johnson to break Britain’s political deadlock was laid bare in his first days as prime minister, as the European Union immediately rejected his demands for a better Brexit deal.

In CFTC Actions, Two Former Precious Metals Traders Admit To Engaging in Spoofing and Manipulation at New York Banks
The U.S. Commodity Futures Trading Commission today issued two orders filing and settling charges against former precious metals traders at separate financial institutions who entered into formal cooperation agreements with the CFTC’s Division of Enforcement (Division) and admitted to spoofing and manipulative conduct in the futures markets.

The business case against Bretton Woods; International financial institutions designed 75 years ago are no longer fit for purpose
Gillian Tett – FT
The 75th anniversary of the Bretton Woods conference, which took place in July 1944, has seen a plethora of luminaries extolling the virtues of the multilateral system the meeting bequeathed.

IHS Markit: Taking the Distress Out of Distressed Loan Settlement
Chris Kentouris – FinOps
T+66. That’s on average how long it takes to settle a trade in a distressed loan. Now technology and data giant IHS Markit is hoping to reduce the timeframe by leveraging its existing platform for par loans. The settlement cycle for distressed loans is even longer than what it takes a package to travel to most overseas destinations on a cargo ship. It is also multiples of the two days it takes to settle an equities or fixed-income trade because there are reams of paperwork and megabytes of data for internal and external legal teams to manually review. Middle-office operations executives also have their hands full making sure they know who owns what part of the loan.

Ranking Strategy Speed for Top Quants, Market Makers
Paul Rowady – Alphacution Research Conservatory
It’s one thing to build models and share insights about specific players in the trading and asset management universe; it’s an entirely different thing to perform comparative analysis of specific modeling to develop various rankings of a community of players. This latter point is precisely where the accumulation of Alphacution’s modeling and research is now taking us, and that new level of insight is, frankly, a bit mindblowing.

The World Federation of Exchanges issues position paper on the importance of valuing stock market data correctly
The World Federation of Exchanges
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today issued an update on the importance of valuing stock market data correctly. This expands the federation’s January 2019 statement where the WFE discussed some of the reasons why such data has economic value to some market participants. The WFE sets out the key questions and considerations within the framework of the current policy debate for a coherent approach to pricing.

****SD: Full PDF here.

Disruptive ETFs Face a Disruption Themselves
Nir Kaissar, Bloomberg via Yahoo Finance
ETFs have new competition, and its name is ESG.
Exchange-traded funds have been one of the most disruptive forces in investing in recent years. Burned by decades of high fees and underperformance in actively managed mutual funds, investors have turned to low-cost index ETFs in big numbers. They pulled a net $39 billion from mutual funds and handed $1.5 trillion to ETFs since 2015, according to Bloomberg Intelligence.

UBS Whistle-Blower Hunts Trillions Hidden in Treasure Islands
Benjamin Stupples, Alexander Sazonov, and Suzanne Woolley – Bloomberg
Estimates of offshore wealth range as high as $32 trillion; Rich also finding onshore havens in U.S., Hong Kong, London
John Christensen called Jersey home. A native of the scenic isle off England’s southern coast, he was a government economist with a hillside villa that had views of France.

Hong Kong announces new rules to combat backdoor listings
Hudson Lockett – FT
Hong Kong’s securities regulator and stock exchange have announced changes to how they will combat backdoor listings, a tactic used by companies that might not otherwise qualify to list, to skirt strict rules for public offerings in the territory.

Exchanges, OTC and Clearing

LME opens consultation on warehouse reform proposals
London Metal Exchange
The London Metal Exchange (LME) is today launching a consultation process on a package of proposed measures designed to ensure that the LME warehousing network continues to provide best practice storage for the global metals industry.

CME Group to Launch Black Sea Sunflower Oil Financially Settled (Platts) Futures
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of Black Sea Sunflower Oil Financially Settled (Platts) futures (based on Sunflower Oil FOB Black Sea Ukraine), to begin trading on August 26, 2019, pending all relevant regulatory review periods.

MarketAxess and Charles River partner on connectivity to credit markets; MarketAxess Auto-X will be integrated with Charles River’s order and execution management system.
Hayley McDowell – The Trade
State Street’s Charles River and fixed income electronic trading firm MarketAxess have teamed up to provide connectivity to clients across global credit markets.

Former LCH chief to lead FICC standards group as CEO; Martin Pluves will join FMSB in October as chief executive officer, following a decade at London clearinghouse LCH.
Hayley McDowell – The Trade
The former chief executive of LCH has been appointed CEO of the fixed income, currencies and commodities (FICC) market standards board (FMSB).

Stock Connect Inclusion Arrangements for A+H Companies Listed on STAR Market Agreed
The Stock Exchange of Hong Kong (SEHK), Shanghai Stock Exchange (SSE), and Shenzhen Stock Exchange (SZSE) today announce that Stock Connect inclusion arrangements for companies with A-shares listed on the SSE’s Sci-Tech Innovation Board (STAR Market), and H-shares listed in Hong Kong, have been agreed.

Exchange Publishes Conclusions on Proposed Rule Changes Associated with Backdoor Listing and Shell Activities to Strengthen Long-term Health, Quality and Sustainability of the Market
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published conclusions on its consultation paper regarding backdoor listing, continuing listing criteria and other Listing Rule (Rule) amendments.


Big Tech is heading for a Wall Street-style cost explosion; Forget fines and break-up talk — infrastructure and compliance are the lead weights
Tom Braithwaite – FT
Acolytes of Benjamin Graham and Warren Buffett have had a trying 10 years scouring balance sheets in search of undervalued gems. Tech has blown everything away.

Twitter’s Costs Rise, but More Users Flock to Platform; Number of daily users climbs to 139 million amid effort to curb toxic, abusive behavior
Georgia Wells – WSJ
Twitter Inc. posted solid user and revenue growth in its latest quarter, signs that investments to improve civility on its social network and show users more relevant content are working.

Moody’s expands buy-side analytics with RiskFirst acquisition; RiskFirst provides risk analytics to asset managers, endowments and pension funds, expanding Moody’s services to the buy-side.
Hayley McDowell – The Trade
Ratings and research house Moody’s has acquired analytics firm RiskFirst to extend its range of services to the buy-side.


Kraken Futures snags a former OTC trader to attract big investors with enticing rebates
Celia Wan and Frank Chaparro – The Block
Things are heating up for Kraken’s newly acquired futures trading arm, and its hoping a new hire from the over-the-counter trading world will help it reach new heights. Former B2C2 managing director Kevin Beardsley has joined Kraken Futures, formerly known as Crypto Facilities, to sell big trading firms in Europe on their market for so-called perpetual futures. Such contracts, which were first popularized by trading giant BitMEX, offer a synthetic way to trade cryptocurrencies.

Verizon eyes new blockchain project, looking to recruit engineers for a ‘distributed network’
Isabel Woodford – The Block
Verizon, the Telecom giant, is looking to build a blockchain team, according to the company’s job site. The firm is advertising for five blockchain engineers, as well as a “blockchain technology development” lead. In addition, a keyword search of ‘blockchain’ shows 35 job-openings where blockchain knowledge is required. Details about the new roles suggest that Verizon to seeking to build a customer-facing product geared towards privacy, security, and payments.

tZERO Crypto App Now Available On Android
Business Wire
tZERO, the global leader in blockchain innovation for capital markets, through its tZERO Crypto unit, announced today that an Android version of its recently launched cryptocurrency mobile app (the “tZERO Crypto App”) is now available.

Winner of $4.6m Buffett lunch apologises for self-promotion; Cryptocurrency entrepreneur Justin Sun delays event because of illness
Don Weinland – FT
The Chinese cryptocurrency entrepreneur who paid a record $4.6m to have lunch with Warren Buffett has apologised for self-promotion and “immature” behaviour as questions swirl over why he later postponed the meal.

MIT Fellow Says Facebook ‘Lifted’ His Ideas for Libra Cryptocurrency
Ian Allison – Coindesk
Avid students of the literature on monetary innovation might feel deja vu when reading Facebook’s Libra white paper. Several aspects of the social network’s much-ballyhooed global cryptocurrency project uncannily resemble the vision laid out in a paper published last year in the Royal Society’s Open Science publication. For example, the Libra paper described a digital coin that would maintain its value because it was backed by a basket of fiat currencies and short-term debt.

Ripple CEO Brad Garlinghouse Concerned About Effects of Facebook’s Libra
Ana Alexandre – Cointelegraph
Brad Garlinghouse, CEO of blockchain and crypto firm Ripple, is concerned about potentially stricter regulation for the digital currency industry that could result from Facebook’s not-yet-issued Libra stablecoin. Garlinghouse delivered his comments in an interview with Fortune on July 25. Garlinghouse said, “You just want to make sure that you don’t get caught in the crossfire. It is important to me that when regulators start asking questions that they don’t lump us into one big bucket.”

BitGo moves into cryptocurrency staking market
Tim Copeland – Decrypt via Yahoo Finance
Crypto custody provider BitGo is now supporting cryptocurrency staking as part of its insured custody services. Previously, the Palo Alto-based company offered secure storage of cryptocurrencies but they weren’t accessible for features like staking, where coins generate interest by maintaining a proof-of-stake network, like Dash. Now, staking providers will be able to store their coins at BitGo—and pass the staking rewards on to their customers.

Crypto Investors Receiving IRS Letter 6174-A Don’t Need To Panic, Here’s Why
Tyson Cross – Forbes
Earlier this month, the IRS offshore compliance unit in Austin, Texas started sending letters to taxpayers it apparently suspects of underreporting their cryptocurrency income. The letter is clearly intended to scare the recipients into action and threatens “future civil and criminal enforcement activity” if the recipients don’t amend their tax returns to accurately report their cryptocurrency related income.

How US Investors Are Buying Bitfinex’s Blocked LEO Cryptocurrency
Nikhilesh De – Coindesk
U.S. investors have been able to purchase Bitfinex’s LEO exchange tokens, if only indirectly. Seattle-based Arrington XRP Capital and Los Angeles-based Arca both said they invested in LEO tokens, despite Bitfinex’s stated policy of refusing to sell them to U.S. residents or entities. Both investment management firms told CoinDesk that, rather than purchasing the tokens from Bitfinex, they acquired them, legally, from third parties. The distinction is important because, in an ongoing court battle with the New York Attorney General (NYAG), Bitfinex maintains that it banned U.S. individuals from its platform in August 2017 and U.S. corporates a year later.

How bitcoin entrepreneur lost his $4.6M lunch with Warren Buffett
Kevin Dugan – NY Post
A Chinese bitcoin entrepreneur with ties to Jack Ma issued a long, groveling apology on Thursday for “excessive self-promotion” after he bragged about a planned lunch with Warren Buffett.


U.S. to pay farmers $15-$150 per acre from August, part of $16-billion trade aid
Humeyra Pamuk, Karl Plume – Reuters
The U.S. government will pay American farmers between $15 to $150 per acre starting from mid- to late-August, Department of Agriculture officials said on Thursday, as part of its $16-billion aid package to compensate those hurt by the trade war with China.

Your money under a Boris Johnson government; The new prime minister has hinted at radical policy shifts that could affect tax, investments and housing
Claer Barrett, James Pickford and Lucy Warwick-Ching – FT
“People who bet against Britain are going to lose their shirts.” This warning to the world was issued on the steps of Number 10 by the new British prime minister, neatly summing up what investors have termed the “Boris Johnson trade”.

Kremlin-backed RT fined by UK over breaches of impartiality rules; Media regulator censures broadcaster over ‘serious and repeated failures of compliance’
Patricia Nilsson – FT
Ofcom, the UK media regulator, has fined Kremlin-backed broadcaster RT £200,000 for failing to comply with rules on impartiality.

How Trump is democratising toxic stress; The US president will probably leave America considerably less mentally healthy
Edward Luce – FT
A few days ago a psychologist friend told me something that was at once startling and unsurprising; she is seeing far more patients than before Donald Trump was elected — and they tend to be suffering from deeper anxiety. Some people call this the Trump Anxiety Syndrome (TAD), or Post Trump Stress Syndrome (PTSD). People of a more Trumpian flavour might dismiss it as Liberal Snowflake Disorder (LSD), or old-fashioned anecdotal exaggeration. I concede that there is no definitive data to back it up.

Mueller Spoke. Was Anyone Listening?
Lisa Lerer – The New York Times
One could imagine a world where a well-respected government lawyer warning of widespread, ongoing foreign interference in American elections in nationally televised congressional testimony would prompt bipartisan outcries and action. An interagency task force. Some package of legislation. Or even any kind of consensus that there’s a problem.

Russia Targeted Elections Systems in All 50 States, Report Finds
David E. Sanger and Catie Edmondson – NY Times
The Senate Intelligence Committee concluded Thursday that election systems in all 50 states were targeted by Russia in 2016, an effort more far-reaching than previously acknowledged and one largely undetected by the states and federal officials at the time.


Industry groups urge SEC to harmonize with CFTC on security-based swaps
Lene Powell – Wolters Kluwer
In a comment letter on a recent SEC proposal on cross-border issues involving security-based swaps (SBS), SIFMA and the Institute of International Bankers (IIB) urged the SEC to further harmonize its rules with the CFTC by eliminating certain aspects of the requirements altogether. Alternatively, the groups recommended many detailed changes.

U.S. to Study Effects of MiFID II Research Unbundling
Ivy Schmerken – FlexTrade Blog
U.S. lawmakers authorized a study focusing on the provision of investment research for small issuers, a sign they are wary of the U.S. adopting the European Union’s MIFID II unbundling rules which have brought sweeping changes to the research business.

FCA fines investment firm Cathay over lax financial reporting
Caroline Binham – FT
The UK’s financial regulator has pushed ahead with fining Cathay International, a Hong Kong-based holding company listed in London, along with its chief executive and finance director, a total of £865,000 for lax reporting to the market.

LCF probe will not be able to force regulators to be interviewed; Former Court of Appeal judge probing UK’s financial watchdog’s failings around scandal
Caroline Binham – FT
The former Court of Appeal judge conducting an independent probe into the UK’s financial watchdog’s failings around a £236m mini-bond scandal has no powers to force regulators to attend an interview.

SEC Plan Gives Audit Relief to Firms That Wiped Out Over $290 Million; Proposed exemption has drawn criticism from accountants but praise from businesses
Dave Michaels – WSJ
A government proposal to exempt more companies from audit requirements would give relief to 11 companies that restated financial results in 2018 and wiped out more than $290 million in market value.

Episode 53: Creating Shared Value
In this episode with Peter Yates, Chairman of the Shared Value Project and Deputy Chairman of AIA Australia, ASIC’s Laura Higgins (Senior Executive Leader, Financial Capability) explores how the concept of shared value challenges companies to realign the interest of business and society by redefining their purpose so that generating economic value also produces value for society.

Optimising the Senior Managers and Certification Regime: Policy Statement 19/20 and Feedback to CP 19/4
Today we publish final rules on the extension of the Senior Managers and Certification Regime (SM&CR) to FCA solo-regulated firms, including claims management companies.

SEC Plan Gives Audit Relief to Firms That Wiped Out Over $290 Million; Proposed exemption has drawn criticism from accountants but praise from businesses
By Dave Michaels – WSJ
A government proposal to exempt more companies from audit requirements would give relief to 11 companies that restated financial results in 2018 and wiped out more than $290 million in market value.

Alphabet says to continue talks with DoJ in antitrust review
Alphabet Inc on Thursday acknowledged a broader U.S. Department of Justice antitrust review of large technology firms and said it will continue to engage with the regulator.

Investing and Trading

For Monster Gains With World’s Largest ETF, Trade It After Hours
Olivia Rinaldi and Vildana Hajric – Bloomberg
Waiting for the trading floor to clear for the night might be the best way to notch up gains using the world’s largest exchange-traded fund.
Buying the SPDR S&P 500 ETF, or SPY, at the close of trading and selling it at the next day’s market open has yielded more than 670%, excluding dividends, since 1993, according to Bespoke Investment Group. That compares with a loss of more than 11% if you bought the fund at the open and sold at the close on the same day.

Why US bond yields could be going the way of Germany and Japan; Without a dose of ‘shock and awe’ from the Fed, long-term rates could drop below zero
Bob Michele – FT
Ten-year US Treasury yields could be headed to zero. This is not a forecast. This is not a bold prediction. This is not something that we hope happens.


Ex-JPMorgan Banker Petermann Plans $500 Million Hedge Fund
Nishant Kumar and Suzy Waite – Bloomberg
Merlyn Advisors fund could begin trading in the third quarter; Fund will bet on special situations such as spinoffs, mergers
Maarten Petermann, who spent nearly two decades at JPMorgan Chase & Co., is preparing to start a hedge fund with at least $500 million of assets.

SoftBank plans to launch second Vision Fund with $108bn; Saudi Arabia and Abu Dhabi governments currently absent from list of investors
Kana Inagaki in Tokyo and Arash Massoudi – FT
SoftBank has said it plans to launch a second Vision Fund, and will raise $108bn from investors including Microsoft, Apple and the sovereign wealth fund of Kazakhstan to invest in technology start-ups.

Schroders buys majority stake in BlueOrchard; Deal values impact investing specialist at more than £100m
Peter Smith – FT
Schroders has become the first large European fund group to place a sizeable bet on the “impact investing” market after buying a majority stake in BlueOrchard Finance in a deal valuing the specialist boutique at more than £100m.

Costs of OppenheimerFunds acquisition weigh on Invesco; Atlanta-based fund group falls well short of second-quarter earnings expectations
Richard Henderson – FT
Invesco has fallen short of earnings expectations as the costs of its acquisition of rival OppenheimerFunds weigh on the business.

Mizuho hires former Citi executive for new EMEA investment banking head role; Slava Slavinsky will lead investment banking in EMEA at Mizuho in a newly created position.
Hayley McDowell – The Trade
Japanese bank Mizuho International has appointed a former Citi executive as its head of investment banking for Europe, the Middle East and Africa (EMEA), in a newly create role.

Citi hires JP Morgan AM trading head to lead execution services in Asia Pacific; Curt Engler will oversee the regional cash equities execution business in Asia Pacific after nine years with JP Morgan Asset Management.
Hayley McDowell – The Trade
US investment bank Citi has appointed the head of trading for the Americas at JP Morgan Asset Management as its head of execution services in Asia Pacific, according to a company statement.

Swiss supreme court gives green light to UBS client data transfer to France
Switzerland’s supreme court on Friday voted in favor of handing over historical data on over 40,000 UBS clients to French authorities in a landmark ruling.


Vietnam’s star rises
Christopher Vass, Senior Product Manager – FTSE Russell
Amid the trade tension that has been felt globally, one star in Asia has been glowing ever brighter. Vietnam has emerged as one of the fastest growing countries in the East. As shown in Chart 1, Vietnam’s real GDP growth was 7.1% in 2018, the highest growth rate in more than a decade and only beaten by India in the region.

Danske Bank Shares Worth $520 Million Sold by Foreign Investors
Christian Wienberg – Bloomberg
Foreign investors have this year dramatically reduced their share holdings in Danske Bank A/S, as they digest news of its involvement in a vast money laundering scandal.

Money Managers Turn to Turkish Exporters After Surge in Banks
Tugce Ozsoy and Aine Quinn – Bloomberg
After a bumper run for Turkey’s banking stocks this year, some money managers are betting that industries outside the financial sector will make bigger gains.

U.S. Firms Want Nigeria Reforms Before Investing, Official Says
Tope Alake – Bloomberg
U.S. councelor says Nigeria ‘needs to think strategically’; Fuel-price peg hinders investment in top African oil producer
Nigeria, Africa’s biggest oil producer, could attract more U.S. investment if the oil and gas sector becomes less opaque and a fuel-price peg is removed, according to a U.S. official.

Why China’s Getting Ready to Shake Up Interest Rates
Bloomberg News
The People’s Bank of China has indicated it’s getting ready to liberalize its system of interest rates, probably this year, in what would be another milestone in the landmark reforms started four decades ago to loosen state control of the economy. The changes are part of the government’s aim to let markets play a “decisive” role in the world’s second-largest economy.

Santander’s Tussle With Jilted CEO Hire Intensifies; Andrea Orcel has filed a lawsuit in Spain asking for EUR100 million in damages alleging the bank broke its contract
Patricia Kowsmann and Margot Patrick – WSJ
A disagreement between Spain’s Banco Santander SA chairman Ana Botín and high-profile investment banker Andrea Orcel over the bank’s U-turn on his appointment as its chief executive is escalating as it reaches court, with both sides accusing each other of acting in bad faith.

Another Month, Another Chinese Bank Bailout; What appears to be the state rescue of Bank of Jinzhou will deepen the moral hazard problem at the heart of China’s banking system
Nathaniel Taplin – WSJ
Beijing dislikes bailing out state companies—particularly banks—but can’t seem to kick the habit. The latest example is Bank of Jinzhou.


Game Theory Backs Johnson’s Hard Line; By committing to a come-what-may strategy, Britain’s new leader could force Europe to compromise.
Mohamed A. El-Erian – Bloomberg
In his maiden speech as prime minister on Wednesday, Boris Johnson repeated that the U.K. will “come out of the European Union on October 31st, no ifs or buts.” Some may view this position as irresponsible — either for prematurely tying the country’s hands in what are likely to be tricky negotiations with the EU or for forcing Johnson to break a very public and oft-repeated promise less than 100 days after assuming office. Yet, in the game theory framework I set out last December to explain why the approach of his predecessor Theresa May risked getting stuck in the muddle-middle, Johnson’s approach may offer both the EU and the U.K. a way out of an impasse that is harming both sides.

Welsh can save the monoglot Brits — and the United Kingdom; Learning the language would show the English are taking seriously the reality of the multinational state
Gavin Jackson – FT
The number of Britons learning a foreign language continues to fall. Within the EU, the British are by far the least proficient in speaking a second language. Partly, that reflects the pre-eminent international role of English, but also the trouble schools have teaching the subjects. Recent British Council research found that fewer poorer students are studying languages, viewing them as pointless post-Brexit. There is a long-term shortage of teachers too. But I have a proposal that could not only arrest the decline but also help preserve the United Kingdom: teach Welsh in English schools.

Boris Johnson Turns to Maverick Brexit Architect to Deliver EU Split; Prime Minister Boris Johnson puts the blunt political strategist in charge of making sure the U.K. can get out of the EU
Max Colchester and Alexa Corse – WSJ
LONDON—Dominic Cummings, an architect of the 2016 British referendum campaign to leave the European Union, has spent the past three years railing against the government for its failure to break with the bloc.


‘Billions’ Writer Outguns Hedge Fund Titans at Charity Poker
Amanda L Gordon – Bloomberg
Lasry, Einhorn bust out of tournament before final tables; Mezrich shares crown with players working in tech and theater
At first, it looked like the rivalry between Avenue Capital’s Marc Lasry and “Billions” show runner Brian Koppelman would fuel the evening. The hedge fund manager who’s made a cameo on the Showtime series and its co-creator started the Take ‘Em to School Poker Tournament at the same table.

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