The John Lothian Daily Update is a podcast turning the daily JLN hits and takes comments, our original content and the stories and quips in the top box of First Read into a daily podcast.
Hits & Takes
Inquiring minds want to know if the CME Group and ICE and other large corporate and Wall Street players in the markets will be following the lead of other Wall Street and corporate giants and refrain from making political donations. Giving money is considered the equivalent of free speech, and if that speech is supporting extremism, then that represents a HUGE problem for companies’ reputations.
JPMorgan Chase, Citigroup and Goldman Sachs have stopped ALL political donations to both the Republicans and the Democrats.
This is not a time to equivocate. It is a time to stand for the American principles that our markets were founded upon. It is time to take a step back. It is a time to be careful with our words and with our money, as both are dependent on free speech.
If any people or firms wish to exercise their right to free speech in monetary form, that is their right. But there are some leading corporate firms out there that have decided now is not the time to fan the flames and are discontinuing corporate political giving.
Just keep in mind, the situation in the U.S. can still get worse. In fact the FBI has issued a warning of possible armed protests at all 50 state capitols from January 16 to 20. Where do you stand?
The Federal Reserve of the United States sent the U.S. Treasury $88.5 billion in profits for 2020. That is based on about a $7 trillion balance sheet. Based on the standard 2 and 20 percent management and incentive fees, the Fed should have kept $140,000,000,000 in management fees and $1.4 trillion.
The World Federation of Exchanges published a research working paper on the procyclicality of CCP margin models.
On Twitter, Diane Swonk, chief economist at Grant Thornton, disclosed that she has been “diagnosed with breast cancer on December 23.” She caught it early. And wants to remind people of the need to keep your checkups current, despite the pandemic.
Scott Parsons, managing partner of Delta Strategy Group, a Washington, DC-based consulting firm, and former CME Group board member Jeffrey Bernacchi were the latest to give to the JLN MarkersWiki Education GoFundMe campaign. Scott is a southern gentleman who spent two years as an executive vice president of the Managed Funds Association and six years at the Commodity Futures Trading Commision, where he was chief of staff and COO under then-Chairman Jim Newsome. Jeff Bernacchi is a longtime trader and exchange leader whom we profiled for the Open Outcry Traders History Project. Thank you to Scott and Jeff and all who have given and all who have yet to give. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Worried about the investment landscape in 2021? A Wednesday webinar with Mandy
Xu, chief equity derivatives strategist at Credit Suisse, and Stacey Gilbert, a portfolio manager from Glenmede Investment Management LP, will address risk factors that include looming macroeconomic issues and the impact of implied volatility on strategy performance. Hosted by the Cboe Options Institute as part of its derivatives education series, the free webinar will be held at 11 a.m. CT. You can register here. ~SC
Democrats move to impeach Trump as fears grow over further US unrest; US president accused of inciting insurrection amid worries of more violence in run-up to Biden inauguration
Lauren Fedor – FT
House Democrats on Monday introduced an article of impeachment against Donald Trump for the second time, levelling an unprecedented charge against the US president of inciting an insurrection.
*****It looks like it is going to happen.~JJL
Business must set aside self-interest to battle extremism
Michael Moritz – FT
As events unfold in Washington, I have been thinking about my grandfather who, just over a century ago, fought for the German army at Verdun. That battle, the bloodiest of the first world war, lasted about as long as the US presidential election campaign and was fought to a stalemate even though it cost 750,000 casualties. The unexploded shells lying just beneath the surface of this patch of France still claim lives and much of the area on which the armies fought are too poisoned to be farmed or occupied.
******Here is some good advice.~JJL
Corporate America pulls political donations after Capitol assault; Wall Street banks and Big Tech among those to halt or review funding for lawmakers
Laura Noonan and Andrew Edgecliffe-Johnson – FT
Many of the biggest corporate donors on Wall Street and across the US are reviewing their political spending after last week’s assault on the Capitol building, threatening to pull millions of dollars from lawmakers whose opposition to the presidential election result contributed to the unrest.
*******Here are some people leading by example.~JJL
‘An Epiphany Moment’ for Corporate Political Donors May Have Arrived; As companies put their donations to candidates on hold, they should reassess political giving entirely, making the halt permanent.
Andrew Ross Sorkin – NY Times
As companies from Coca-Cola to Amazon to Citigroup appear to be tripping over each other to declare that they are “pausing” or “reassessing” donations to Republicans who sought to overturn the election — and, in some cases, suspending giving to both parties — they might want to look at a company that didn’t say anything. That company is IBM.
******Now is the time to have an epiphany about corporate political giving.~JJL
FBI Warns of Possible Nationwide Armed Protests Ahead of Biden Inauguration; Internal memo warns demonstrations may start later this week
Sadie Gurman and Dustin Volz – The Wall Street Journal
The FBI is warning in an internal memo of the possibility of armed protests at all 50 state capitols and in Washington, D.C., ahead of President-elect Joe Biden’s Jan. 20 inauguration, a law-enforcement official said.
******It could get a lot worse. Be prepared.~JJL
Monday’s Top Three
Our top story Monday was Yahoo News’ Trump reportedly told Kelly Loeffler he’d ‘do a number on her’ if she didn’t back Electoral College challenge. Second was
Bloomberg’s U.K. Regulator Warns Crypto Investors Risk Losing ‘All Their Money’. (“The FCA’s concerns include price volatility, the complexity of products offered and the lack of consumer protection regulation around many of the products,” the story says.) Third was John Lothian News’ newly released documentary JLN Launches the History of Financial Futures Episode: Game Changers, Part II.