Parliament’s Rejection of Brexit Deal Puts EU in a Bind; U.S. charges hackers, traders with stealing SEC filings

Jan 16, 2019

First Read

Hits & Takes
JLN Staff

The Cboe held its annual Chicago media lunch yesterday in a restaurant in the building where William D. Boyce had offices when he launched the initiative that would become Boy Scouts of America.

The Cboe media lunch featured Executive Chairman and CEO Ed Tilly and new COO Chris Isaacson. Tilly humorously took me to task for calling the recent theft of unused computer servers “substantial” considering that Cboe is a $10 billion company. He did own up to the results of his answer to a question I asked him in March at the FIA Boca Raton International Conference Cboe media lunch. In March I asked Tilly if he would take his bonus in bitcoin. He said at the time and repeated yesterday that he would take it not in a single token, but a basket of tokens. Then he noted that neither option would have worked very well this year.

Tilly and Isaacson also talked about the success of volatility trading during 2018, being the leading U.S. options exchange, successful technology implementations and other things that all point up at the Cboe. Yada, yada, yada.~JJL

Tilly and Isaacson are off to New York for a similar media lunch there today. They will be in London next week to perform for the UK press and attend a WFE meeting.~JJL

So how we doing, Doc? Richard Sandor‘s American Financial Exchange looked pretty good in 2018, the exchange’s third year. Notional volumes in Q4 2018 rose to a daily average of $1.11 billion, up from $306 million a year earlier. Membership for the year rose to 114 in 2018, from 72 a year earlier.~JK

British Prime Minister Theresa May’s Brexit deal was squashed on Tuesday by a 230 vote margin (more than 100 of those votes coming from her own party). But here’s an even more stunning indicator of the failure via Reuters: the loss was “the first British parliamentary defeat of a treaty since 1864.”~SD

Business Insider is hiring a markets reporter in London.~JJL

OIC is holding a webinar today titled “Webinar: Getting Started With Options.”~JJL

Jim Northey has been named chair of the ISO Technical Committee for Global Financial Services Standards, TC 68.~JJL

From the Futures Industry Association (FIA) – Worldwide volume of exchange-traded derivatives was 2.66 billion contracts in the month of December 2018, down 3.8% from the previous month but up 29% from December 2017. On a yearly basis, volume in 2018 was 30.28 billion contracts, up 20.2% from 2017. Total open interest at the end of December was 827.6 million contracts, down 1.4% from a year ago. You can go here for more futures industry data.~SR

The JLN team is grateful for all the readers who have so far paid for their 2019 subscriptions. We ask readers to pay $175 for the newsletter if they find it valuable. That is $3.65 per week, which is a bargain. It takes just one nugget of information in JLN to help someone with a professional or personal interest in the markets find value in one of the stories, or original content we provide. If you would like to pay for your 2019 subscription, go to the JohnLothianNews.com website and click on Payments.~JJL

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Give credit to those who harness power of algos; From Jared Broad, Chief Executive, QuantConnect, Seattle, WA, US
In response to Robin Wigglesworth’s Big Read (” Volatile times”, January 10), algorithms are tools harnessed to implement the will of the managers applying them. Nothing more. Furthermore, the traditional assumptions of volatility and depth being signals of healthy markets need to be challenged and weighed against the efficiency gains brought by algorithmic execution.
/on.ft.com/2SZ3djx

*****Letter to the FT ~JJL

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Trade Talk Blog: Know Your Risk Scores and Replay Your Trading Activity with TT Score for $250/Month
Jay Biondo, Product Manager Surveillance, TT
The Commodity Futures Trading Commission (CFTC) brought a record 26 cases related to manipulative conduct and spoofing in the fiscal year ended September 30, 2018. Several of those civil cases were also accompanied by criminal charges filed by the Justice Department.
bit.ly/2SZ65gj

***** This is award winning CYA software, which seems like a bargain.~JJL

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Tuesday’s Top Three
It’s a Bakkt trifecta. The cash rich crypto market, warehouse, payment system added its first addition to the plan and that caught triple the attention. Topping the list was Fortune’s Bakkt Acquisition Accelerates Plan to Streamline Consumer Payments. Second was Coindesk’s take on it with Bitcoin Futures Market Bakkt Makes Its First Acquisition. Third was Kelly Loeffler‘s announcement on Medium, Our first acquisition. Things are moving at Bakkt, which has some serious backing, with $183 million in funding.

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Lead Stories

U.K. Parliament’s Rejection of Brexit Deal Puts European Union in a Bind; Faced with a damaging no-deal departure, bloc must now decide whether to offer concessions to Britain to secure an agreement and avoid an Irish border
Laurence Norman – WSJ
The British Parliament’s overwhelming rejection of the Brexit agreement raises an uncomfortable question for the rest of the European Union: whether it has been too successful in negotiating the U.K.’s departure from the bloc.
/on.wsj.com/2SSz6dO

U.S. charges hackers, traders with stealing SEC filings
Jonathan Stempel – Reuters
U.S. authorities on Tuesday charged a suspected Ukrainian computer hacker and several traders with scheming to trade on market-moving corporate earnings news stolen from a U.S. Securities and Exchange Commission database.
/reut.rs/2SXmi5X

May’s defeat spells trouble for the EU’s Brexit approach; Brussels sees outcome as a reality check on timing, renegotiation and Irish backstop
Alex Barker – FT
The House of Commons vote against Theresa May’s Brexit deal is not just a historic blow for the British prime minister; it is also a moment of reckoning for the longstanding EU strategy on the UK’s exit from the bloc.
/on.ft.com/2ANdEjp

Government shutdown begins to harm US economy; History suggests political impasse will also dent consumer and business confidence
Sam Fleming and Brooke Fox – FT
The record-breaking US government shutdown is triggering ripple effects across the US economy and risks denting confidence among companies that have already been fretting about trade disputes and stock market turbulence.
/on.ft.com/2AP4Ppc

EU Expresses Horror at Brexit Vote, Refuses to Reopen Deal
Ian Wishart – Bloomberg
European Commission’s Juncker tells May: ‘Time is almost up’; Macron: EU won’t help fix U.K.’s ‘internal political problem’
The European Union said it was horrified by the massive scale of the U.K. Parliament defeat of the Brexit deal agreed to with Prime Minister Theresa May but said there was no option to renegotiate.
/bloom.bg/2SWCIeP

Trump Orders Thousands Back to Work Without Pay to Blunt Shutdown Disruption
Jennifer A Dlouhy – Bloomberg
Safety inspectors are being recalled to monitor flights, food; Trump set to sign bill on Wednesday to give workers back pay
The Trump administration has ordered thousands of furloughed federal employees back to work without pay to inspect planes, issue tax refunds, monitor food safety and facilitate the sale of offshore oil drilling rights.
/bloom.bg/2T39L0V

A tale of two CCPs
Louie Woodall – Risk.net
Clearing houses are designed to manage the derivatives market’s systemic counterparty risks, by centralising them, collecting margin and applying rules for the orderly sharing of losses. In theory, when a default hits, the pain is kept within the thick walls of the central counterparty, rather than spilling out into the wider markets.
bit.ly/2DcjHiT

****(Not paywalled.) From the story: “Ice Clear Europe’s futures and options service incurred a whopping $1.2 billion peak breach of its own, nearly 20 times larger than anything on record prior.” According to Risk.net sources, the Ice breach was due to a single member’s carbon futures trading activity ó that member was able to meet Ice’s margin call.~SD

International stock trading scheme hacked into SEC database
Kate Fazzini – CNBC
Federal prosecutors are set to unveil charges in an international stock trading scheme that involved hacking into the Securities and Exchange Commission’s EDGAR corporate filing system.
/cnb.cx/2Dc0I8h

Multiplying risks, including shutdown, bolster Fed call for ‘patience’
Reuters
Multiplying risks to the U.S. recovery, including now a self-imposed government shutdown, have broadened calls among even hawkish Federal Reserve officials to be patient before raising interest rates again.
/reut.rs/2Dcts0A

Wall Street’s China Entry Just Got Harder (Again); Banks are now required to spin off their wealth-management products into subsidiaries. That means even more competition for foreign players.
Nisha Gopalan – Bloomberg
The world’s fund managers just can’t seem to catch a break. Pressured by everything from cheap passive funds to burdensome regulations, big asset managers have been pinning their future on China’s growing $15 trillion fund industry. And for a while there, things looked pretty good. Beijing was cracking down on wealth-management products, whose eye-popping returns had propelled erstwhile rivals in the shadow-banking sector. Officials even permitted foreign fund managers and investment banks to control their China joint ventures. Many now await approval for their applications, which they were allowed to submit in April.
/bloom.bg/2AMXmac

We’ve Entered a World of Digital Risk We’re Only Beginning to Understand
Greg Satell – Barron’s
“Now I am become Death, the destroyer of worlds,” said J. Robert Oppenheimer, quoting the Bhagavad Gita. It was July 16th, 1945, and he had just witnessed the world’s first nuclear explosion as it shook the plains of New Mexico. It was clear that as a species we had crossed a Rubicon and there was no turning back.
bit.ly/2SZkoS4

Exchanges, OTC and Clearing

American Financial Exchange (AFX) Achieves Record Growth In Volume And Membership In 2018.
Press Release
American Financial Exchange (AFX), a centralized, electronic, self-regulated, fully transparent platform launched in 2015 to directly reflect true unsecured funding costs for a nationally broad base of U.S. banks and financial institutions in the private sector, announces its 2018 results.
bit.ly/2HerOiX

Nasdaq to Deliver Technology to ATG
GlobeNewswire
Nasdaq (Nasdaq:NDAQ) and AB Trav och Galopp (ATG), the Swedish gaming operator, have announced that ATG will leverage Nasdaq’s technology to strengthen its pari-mutuel offering.
bit.ly/2ARjqjM

OCC overhauls legacy clearing system with Cinnober; The Options Clearing Corporation will replace its current clearing system with the help of Cinnober.
Hayley McDowell – The Trade
The Options Clearing Corporation (OCC) has said that it will replace its legacy clearing system with Cinnober’s TRADExpress RealTime Clearing system.
bit.ly/2T3cjw1

London Stock Exchange Group launches ‘Companies to Inspire Africa 2019’ report
London Stock Exchange Group
Today, London Stock Exchange Group launches the second edition of its ‘Companies to Inspire Africa’ report, identifying and celebrating some of Africa’s most dynamic growth businesses. David Schwimmer, CEO, London Stock Exchange Group was joined by International Development Secretary Penny Mordaunt to welcome guests including the CEOs of featured companies, African government representatives, Africa-focused investors and trade groups to the Group’s London headquarters. Also in attendance were official partners to the report, the African Development Bank, Asoko Insight, CDC Group and PwC, together with sponsors Instinctif Partners and Stephenson Harwood.
bit.ly/2AO5zuu

Euronext presents the second edition of its report on CAC 40 and SBF 120 shareholder profiles
Euronext
At the 8th Euronext Annual Conference, Euronext presented the second edition of its report on trends among direct shareholders of the companies that collectively form the CAC 40 and SBF 120 indices.
bit.ly/2AMmU7q

Bloomberg gets green light for Dutch MTF; Financial regulator in the Netherlands gives Bloomberg authorisation to establish a cross-border MTF in Amsterdam for its European clients.
Hayley McDowell – The Trade
Bloomberg has confirmed that it has gained regulatory approval from the financial authority in the Netherlands to operate a trading venue in Amsterdam ahead of Brexit.
bit.ly/2APQhpa

MarketAxess takes bond trading modernisation to private banks
Samuel Agini – Financial news
MarketAxess, an electronic marketplace bidding to modernise the way bonds are traded, is building its presence in the staid world of European private banking in its latest push to vanquish the telephone.
bit.ly/2SXrkzj

PSE working with SGX to provide more products
Iris Gonzales – The Philippine Star
The Philippine Stock Exchange Inc. (PSE), the operator of the local bourse, is working with its counterpart in Singapore to provide more products to local and foreign investors.
bit.ly/2DbZolP

Fintech

Big data to boost prospects for female star managers; Men and women perform better when they work together in mixed teams
Amin Rajan – FT
“Nothing is stronger than an idea whose time has come,” wrote Victor Hugo, author of the classic Les MisÈrables. Much the same applies to the premium placed on the attributes that female portfolio managers bring to investing.
/on.ft.com/2ARiBHI

Fortnite Flaw Put Millions of Players at Risk, Researchers Say
Gwen Ackerman – Bloomberg
Account takeovers main attack vector last year, research says; Check Point says Epic Games has patched the Fortnite flaw
A flaw in Epic Games Inc.’s Fortnite opened the accounts of millions of users to the risk of a malicious attack, researchers from Check Point Software Technologies Ltd. said in a report Wednesday.
/bloom.bg/2APgUe9

Phillip Capital Inc. selects Softek’s Credit Management Solution
Softek
Softek, a leading provider of Capital and Credit Management solutions today announced that Phillip Capital Inc. (“Phillip Capital”), a self-clearing broker/dealer, offering institutional brokerage and clearing services, has selected Softek to support their recently approved portfolio margin business, providing overnight and intraday credit and risk monitoring.?
bit.ly/2SYsbzI

MarketFactory Secures Funding from Accel-KKR
Darren Jer – MarketFactory
MarketFactory has secured a strategic investment from Accel-KKR, a leading Silicon Valley technology-focused investment firm. The funding will accelerate MarketFactory’s expansion into new markets and services to currency traders globally.
bit.ly/2ST9lKe

Alternative Data in Action: Web-Scraping
Richard Johnson – Greenwich Associates
In December, Nasdaq announced they intended to acquire Quandl, an alternative data company. As we wrote at the time, this represents an inflection point for the industry as alternative data goes mainstream.
bit.ly/2SVUE9d

Cryptocurrencies

Ethereum Seeks to Prove a Crypto Fork Need Not Be Contentious
Olga Kharif – Bloomberg
The term “fork” has acquired a negative connotation in cryptocurrency circles lately. A November software upgrade of the Bitcoin Cash network wiped out nearly half its market value. Yet for Ether investors, a pending update should be good news.
/bloom.bg/2FvOWaW

Ethereum Clients Release New Software In Wake of Hard Fork Delay
Nikhilesh De, Christine Kim – Coindesk
Major ethereum clients, including Go-Ethereum (Geth) and Parity, have released software updates following an earlier decision to delay the planned system-wide upgrade dubbed Constantinople. The upgrade was postponed Tuesday during a developers call, a move that came after blockchain audit firm Chain Security discovered a security vulnerability in Ethereum Improvement Proposal (EIP) 1283, one of the planned changes included in Constantinople.
bit.ly/2FyxKkB

Here’s what to know about a pending ‘hard fork’ in ethereum
Aaron Hankin – Market Watch
The looming hard fork of the ethereum network ó the popular blockchain for crypto-related ventures ó is scheduled for late Wednesday Eastern Time and unlike recent cryptocurrency forks, the change isn’t expected to create friction. The latest version of the software, known as Constantinople, will be implemented after block number 7,080,000 is mined: A block is a set of data that is validated and confirmed in the process known as crypto mining.
/on.mktw.net/2TMdTCa

Ford to use blockchain in pilot to trace cobalt mined in Congo; Automaker to use platform in bid to improve supply chain transparency
Henry Sanderson- FT
Ford will use a blockchain-based platform to trace supplies of cobalt from a Chinese-owned mine in the Congo to the batteries in its electric cars, in an attempt to ensure they are not linked to human rights abuses.
/on.ft.com/2AQRIDR

Ethereum’s Constantinople Upgrade Faces Delay Due to Security Vulnerability
Christine Kim – Coindesk
Ethereum’s long-anticipated Constantinople upgrade has just been delayed after a critical vulnerability was discovered in one of the planned changes.
bit.ly/2SZUnlU

Bankrupt Bitcoin Miner Giga Watt Forced to Cease Daily Operations
Yogita Khatri – Coindesk
Bankrupt U.S.-based bitcoin mining firm Giga Watt has been forced to shut down day-to-day operations. The firm sent an email to customers on Tuesday, a copy of which was obtained by CoinDesk, which states that, while it had continued to operate in the two months since the bankruptcy filing, “at present, both access and power to the facilities in which Giga Watt operates have been closed to the company.”
bit.ly/2SZQFIQ

BitGo announces partnership that puts it up against the largest crypto exchanges
Frank Chaparro – The Block Crypto
BitGo, the crypto custody provider, is teaming up with a trading firm to offer its institutional clients the ability to buy and sell crypto for the first time on its platform. The new offering, announced Wednesday, allows clients to trade the crypto held in their BitGo custody account without having to move it onto an exchange. Genesis Trading, as part of the deal, will execute trades on behalf of BitGo for its clients. BitGo clients will not have to open Genesis accounts to use the service.
bit.ly/2SYfkNM

The Maturation Of Crypto In 2019
Casey Kuhlman, Forbes Technology Council – Forbes
2018 was a year of transitions for both the enterprise and cryptocurrency sides of the blockchain technology market. For those of us in the technology ecosystem ó I’m the CEO of a company based on open-source blockchain tech ó this year provided us with very strong signals that cryptocurrency technology is certainly here to stay.
bit.ly/2RV3dUq

How STOs Could Drive The Crypto Markets in 2019
Jim Preissler – Forbes
One area of potential excitement for the evolution of crypto markets in 2019 is the coming fruition of issuing securities using blockchain technology. Many crypto enthusiasts believe one of the next big things in the cryptocurrency markets is the expectation that Security Token Offerings (STOs) could become the eventual replacement for Initial Coin Offerings (ICOs). While this expectation is contingent upon a number of key issues and barriers being overcome, with the largest hurdle being clear regulations, STOs could drive the next wave of blockchain innovation.
bit.ly/2MhmCKg

Stories from Alternative Crypto Sources

Ethereum Constantinople Delayed, ETH Down 5%
Nick Chong – Ethereum World News
bit.ly/2ANZYo5

France’s Largest Bank BNP Paribas Loses $80 Million Due to Trader’s Pre-Vacation Snafu
Jimmy Aki – CCN
bit.ly/2CmrgCa

ABCC Exchange Partners With Tron to Become First Platform to List TRC10 Tokens
Helen Partz – Cointelegraph
bit.ly/2MfcH7G

Politics

White House considering former PepsiCo CEO, Treasury official to lead World Bank: source
Reuters
White House is considering former PepsiCo Inc (PEP.O) Chief Executive Indra Nooyi, Treasury Department official David Malpass and Overseas Private Investment Corp CEO Ray Washburne among candidates to head the World Bank, an administration official said on Tuesday.
/reut.rs/2Ded1Rp

Trump AG pick concerned by Silicon Valley ‘behemoths’
Reuters
President Donald Trump’s nominee for U.S. attorney general, William Barr, told lawmakers on Tuesday that he would focus attention on the “huge behemoths” in Silicon Valley at the center of a debate over antitrust enforcement.
/reut.rs/2DcLgZs

Shutdown could drive US growth to zero, warns JPMorgan chief; Jamie Dimon joins corporate leaders raising alarm about standoff’s mounting damage
Sam Fleming and Laura Noonan – FT
The record-long US government shutdown could drive economic growth down to zero in the current quarter, JPMorgan Chase’s chief executive said on Tuesday, as big companies amplify their warnings over the mounting damage from the stand-off.
/on.ft.com/2AORYTX

More Than Half of IRS Employees to Work During Tax-Filing Season, Treasury Says; In a reversal of past practice, the agency will issue tax refunds even if the partial government shutdown continues
Richard Rubin – WSJ
More than half of Internal Revenue Service employees will work during the coming tax-filing season, the Treasury Department said Tuesday, as the government tries to implement the 2017 tax law during the partial government shutdown.
/on.wsj.com/2ANTbux

Maria Bartiromo Was a Generational Icon for Financial Television. What Happened?; Inside the Fox Business Network star’s transformation
William D. Cohan – Institutional Investor
Over at the Fox Business Network, believe it or not, there seems to be considerable schizophrenia when it comes to President Donald Trump
bit.ly/2ANSS2R

Ocasio-Cortez set to join Maxine Waters on key financial services committee
Gregg Re – Fox News
Self-described socialist Alexandria Ocasio-Cortez announced on Twitter late Tuesday that she will join California Democratic Rep. Maxine Waters on the influential House Financial Services Committee, which oversees Wall Street and the housing industry.
/fxn.ws/2SW2HmA

Regulation

SEC Brings Charges in Edgar Hacking Case
SEC
The Securities and Exchange Commission today announced charges against nine defendants for participating in a previously disclosed scheme to hack into the SEC’s EDGAR system and extract nonpublic information to use for illegal trading. The SEC charged a Ukrainian hacker, six individual traders in California, Ukraine, and Russia, and two entities. The hacker and some of the traders were also involved in a similar scheme to hack into newswire services and trade on information that had not yet been released to the public. The SEC charged the hacker and other traders for that conduct in 2015 (see here, here and here).
bit.ly/2AOpbip

Monthly Disciplinary Actions – January 2019
FINRA
FINRA has taken disciplinary actions against the following firms and individuals for violations of FINRA rules; federal securities laws, rules and regulations; and the rules of the Municipal Securities Rulemaking Board (MSRB).
bit.ly/2AP7teC

Job InterruptedóA To-Do List for Tough Times
FINRA
Many of us can identify with the plight of the furloughed federal worker. That’s because we have experienced economically stressful times at one or more points in our working lifeóand may again.
bit.ly/2AOrMsF

Member obligations under NFA Bylaw 1101 and Compliance Rule 2-36(d) with respect to CPOs/CTAs exempt from registration
NFA
The CFTC requires any person that claims an exemption from CPO registration under CFTC Regulation 4.13(a)(1), 4.13(a)(2), 4.13(a)(3), 4.13(a)(5), an exclusion from CPO registration under CFTC Regulation 4.5 or an exemption from CTA registration under 4.14(a)(8) (collectively, exemption) to annually affirm the applicable notice of exemption within 60 days of the calendar year end. Persons that fail to file the affirmation notice by March 1, 2019, will be deemed to have requested a withdrawal of the exemption and, therefore, may be required to be registered and NFA Members.
bit.ly/2APS9yc

ESMA reports on accepted market practices under MAR
ESMA
The European Securities and Markets Authority (ESMA) has published today its annual report on the application of accepted market practices (AMP) in accordance with the Market Abuse Regulation (MAR). AMPs are a defence against allegations of market manipulation. In particular, dealings in financial markets which are carried out for legitimate reasons and in conformity with an established AMP will not constitute market manipulation.
bit.ly/2ANf6Cn

ASIC imposes licence conditions on Kaz Capital
ASIC
ASIC has imposed additional conditions on the Australian Financial Services licence of Kaz Capital Pty Ltd (Kaz). ASIC is concerned with the adequacy and effectiveness of Kaz’s compliance framework, including how it monitors its advisers and whether it meets its compliance obligations under the Corporations Act.
bit.ly/2AMgdSI

Investing and Trading

New investors: don’t be afraid to ask stupid questions; For beginners, the world of investment is a minefield of jargon
Moira O’Neill – FT
Many of us started 2019 vowing this would be the year we finally start a long-term investment plan. The recent downturn in markets is troubling for older investors, but it is spurring younger investors into action. I know this from the spike in Google searches for articles about how to begin investing.
/on.ft.com/2ANe49t

Institutions

INTL FCStone continues prime brokerage push with new hires; INTL FCStone expanded into the US prime services market at the back-end of last year after it brought on three former senior executives at Cowen Group.
Joe Parsons – The Trade
The new prime brokerage team at INTL FCStone Financial, set up by three former senior executives at Cowen Group, has made a string of hires as it looks to take to market a full prime offering.
bit.ly/2AQSv7N

Bank of America Profit Rises Sharply; Higher interest rates have helped consumer lenders like BofA, which reported results Wednesday.
Rachel Louise Ensign – WSJ
Bank of America Corp. said Wednesday that fourth-quarter profit rose sharply from a year ago.Quarterly profit at the Charlotte, N.C.-based bank, the second largest in the U.S. by assets, was $7.28 billion, compared with $2.37 billion a year ago. Per share, earnings were 70 cents. Analysts polled by Refinitiv had expected 63 cents per share.
/on.wsj.com/2AYTTFJ

BlackRock’s growth goes into reverse; World’s biggest fund manager suffered a 5 per cent fall in assets last year
Owen Walker – FT
BlackRock’s turbo-charged growth of recent years went into reverse last year, as the world’s biggest manager suffered a 5 per cent fall in assets under management.
/on.ft.com/2ANEF6a

Deutsche Bank Has Started New Internal Probe Into Danske Case
Steven Arons – Bloomberg
Deutsche Bank AG Chief Executive Officer Christian Sewing last year launched a further internal investigation into the lender’s role as correspondent bank for scandal-ridden Danske Bank’s Estonian unit, even though he hasn’t seen any evidence of wrongdoing.
/bloom.bg/2ANUQQN

Goldman Says Rich People Will Drag Down the U.S. Economy by Spending Less
Joanna Ossinger – Bloomberg
Wealth effect could hurt GDP growth by 0.5 ppt, economist says; Spending on jewelry, pleasure boats strongly tied to market
The stock-market sell-off is going to be a significant drag on the U.S. economy this year as wealthy households feel its impact, according to Goldman Sachs Group Inc.
/bloom.bg/2AOvjad

Wounded Hedge Fund Titan Crispin Odey Isn’t Celebrating His Roaring Comeback
Nishant Kumar – Bloomberg
With a gain of 53%, he beat his greatest rivals last year; But Odey has a long way to go to undo his worst losing streak
Considering he just pulled off a stunning turnaround, Crispin Odey sounded unusually restrained.
/bloom.bg/2AMiQnG

Regions

China injects record $84bn to boost economy and avoid cash squeeze; Central bank acts on growth fears and higher lunar new year cash demand
Gabriel Wildau – FT
China’s central bank injected a record Rmb570bn ($84bn) into the country’s banking system via open market operations on Wednesday in the latest effort to boost liquidity and promote increased lending to a slowing economy.
/on.ft.com/2ANDl3c

Turkey Extends Rate Pause as Currency Laggard Stalks Economy
Cagan Koc – Bloomberg
Turkey’s central bank held rates for a third straight meeting as a weak lira stalks an economy still reeling from a summer currency crash. The lira gained.
/bloom.bg/2SYfUeq

Brexit

May’s Crushing Loss Is Proof Brexit Has Failed; Two options remain: Leave with no deal, or no Brexit at all.
Editorial Board – Bloomberg
“Defeat” is too small a word for the rebuke Britain’s Parliament handed Prime Minister Theresa May yesterday. Her Brexit deal, laboriously negotiated over many months, was voted down Tuesday by a massive 230 votes ó a far bigger margin than expected, and the worst loss of any British government in modern times.
/bloom.bg/2AQmnkS

Luxembourg says no-deal Brexit plans now ‘full steam’ ahead
Reuters
Luxembourg is intensifying its preparations for a chaotic British departure from the European Union, the country’s premier said on Tuesday after the British parliament rejected a draft withdrawal agreement. “We need a fast and clear plan on how to proceed,” Prime Minister Xavier Bettel said on Twitter. “Our internal preparations to limit the damage in case of a no-deal will go ahead at full steam.”

Brexit Pushes U.K. to Brink as Government Fights to Survive
Robert Hutton, Kitty Donaldson and Tim Ross – Bloomberg
No-confidence vote in May’s leadership could trigger election; May humiliated by biggest defeat in modern history on Brexit
The U.K. stands at its most dangerous crossroads in decades after Parliament emphatically rejected Theresa May’s Brexit deal and left her facing an uncomfortable vote to oust her government.
/bloom.bg/2AR4kef

Michel Barnier insists rejected Brexit deal is still ‘best compromise’; Leadsom says UK government will not seek extension in Article 50 divorce process
Mehreen Khan and Henry Mance i- FT
Michel Barnier has warned the UK parliament to determine quickly “very clearly” what it wants in a new EU exit deal, but insisted the agreement overwhelmingly rejected by British MPs remains the “best compromise” Brussels can offer.
/on.ft.com/2AP3i2q

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