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
Yahoo news is reporting that there were several large bitcoin payments to right-wing political activists a month before the Capitol riot, but after President Trump invited supporters to “walk down Pennsylvania Avenue” and “take back our country.” The firm Chainanalysis is tracking the path of the money to try to determine its original source, which could be a foreign actor.
And FINCEN has extended the comment period for the rule “Aimed at Closing Anti-Money Laundering Regulatory Gaps for Certain Convertible Virtual Currency and Digital Asset Transactions. Given the above news, that sounds like a smart move.
The Cboe has joined the ranks of exchanges who are halting donations from their Political Action Committees. I should have mentioned Cboe too when I first asked where firms stood. Thank you to Cboe for doing the right thing.
Michael Bloomberg in a Blomberg News editorial is calling for the Senate to vote on Trump’s removal and “be done with it.” There is no reason to dawdle.
It turns out that you should turn off your cell phone before engaging in the insurrection that happened at the Capitol on January 6. When you walk into the Capitol with your phone on, you are automatically tracked. That includes your Apple Watch too. I probably would need to leave my Tile device on my keys at home too.
Monday is Martin Luther King, Jr. Day in the U.S. and markets will be closed for observance of the holiday. JLN will be published Monday, but not JLN Options. I will be teaching a merit badge class for the PathWay to Adventure Council of the Boy Scouts of America. In my Communication merit badge class, 10 of the participants will be girls and 2 boys.
We had two new donations to the JLN MarketsWiki Education GoFundMe campaign, from Richardo Manrique of FTSE Russell and Phil Slocum, a retired Cboe executive. Phil Slocum was part of the class of Cboe executives who retired after long and meritorious service to the exchange company in 2017. He was the Cboe’s chief risk officer and former head of trading operations at the time of his retirement. Phil is now retired and enjoying life, while also making thoughtful donations. Ricardo is a former marine who has embarked on a financial services career that makes him Mr. Index, with stops at JP Morgan, Dow Jones, STOXX, MCSI, State Street and now FTSE Russell, where he is head of strategy. He is also Sean Smith’s boss, which is an enviable role. Thank you to Phil and to Ricardo and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
One way you can help, short of giving us cash, is by sharing our videos on your social media accounts and letting us know what you thought. Help spread the word about our history so more people understand our markets and how we got to where we are today. Thank you to all of you who already do share our videos and stories on your Linkedin, Facebook or Twitter accounts.
Note to Walt Lukken – the Purdue Boilermakers basketball team beat the Indiana Hoosiers for the 8th straight time, which is the longest winning streak in 100 years.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Elevated Risk Levels, Volatility Seen Continuing as 2021 Debuts
Suzanne Cosgrove and Matt Raebel – John Lothian News
The pandemic of 2020 and its associated economic fallout pushed the Cboe Volatility (VIX) Index to record highs, and it’s expected to stay elevated even as COVID-19 vaccines are rolled out and dispensed and global economies begin to recover in 2021, two analysts said in a presentation sponsored by the Cboe Options Institute.
“In 2020, the S&P 500 experienced its second highest annualized realized volatility and intra-year high to low price range of the past 80 years, only behind the Great Financial Crisis in 2008,” said Stacey Gilbert, derivatives portfolio manager at Glenmede Investment Management LP. She said that coming off a year of volatility and options trading volume as high as 2020’s would make it unlikely for things to return to “normal” anytime soon. Historically, she said, “it takes about 8½ months for volatility to return to normal.”
To read the rest of this story, go here.
NFA Bars Futures Broker Gary Fullett from Membership for Five Years; Surprising it Took This Long
John Lothian – John Lothian News
The National Futures Association has barred broker Gary Fullett from being an NFA member for five years and fined him $50,000 if he ever wants to come back, among other actions. This NFA Business Conduct Committee action is about twenty years too late. I am surprised he was not barred from NFA membership for life years ago. He has been flouting NFA regulations for years. I am surprised it took the NFA this long to bring charges and adjudicate a bar-worthy case.
Fullett was a broker I first met on the Internet back in the 1990s. He frequented a Usenet discussion group, misc.invest.futures, where Jon Matte and I were active participants. Usenet was an early part of the internet that was later rolled up by a firm named Deja.com for whom Richard Gorelick was the general counsel. Matte, a start-up Introducing Broker clearing Alaron at the time, had been one of the early professional participants of misc.invest.futures.
To read the rest of this commentary, go here.
Ray Carmichael – The History of Financial Futures Part I
Carmichael Led Communications at the Chicago Board of Trade During a Decade of Incredible Growth in Financial Futures
Ray Carmichael joined the Chicago Board of Trade in 1980, hired by then-CBOT president Thomas Donovan to lead communications for the exchange. Carmichael had come from the nonprofit world, so he understood how committees work in organizations.
Ray Carmichael – The History of Financial Futures – Part 2
Carmichael Led Communications at the Chicago Board of Trade During a Decade of Incredible Growth in Financial Futures.
Ray Carmichael was in the thick of the new markets, the early days of electronic trading and huge change in the futures industry globally as the head of corporate communications for the Chicago Board of Trade. He was there when financial futures grew dramatically at the CBOT, making it “the most exciting time in the world to be at the Board of Trade; it was the glory days.”
Cboe Global Markets Statement on Political Action Committee Donations
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today issued the following statement: The Cboe Global Markets Political Action Committee (PAC) is temporarily pausing all donations following the assault on the U.S. Capitol last week.
*****Thank you to Cboe for doing the right thing.~JJL
Exclusive: Large bitcoin payments to right-wing activists a month before Capitol riot linked to foreign account
Jenna McLaughlin – Yahoo News
On Dec. 8, someone made a simultaneous transfer of 28.15 bitcoins — worth more than $500,000 at the time — to 22 different virtual wallets, most of them belonging to prominent right-wing organizations and personalities. Now cryptocurrency researchers believe they have identified who made the transfer, and suspect it was intended to bolster those far-right causes. U.S. law enforcement is investigating whether the donations were linked to the Jan. 6 assault on the U.S. Capitol.
*****This is a story to follow and see where it leads. We might not like the answer.~JJL
Dozens of people on FBI terrorist watch list came to D.C. the day of Capitol riot
Devlin Barrett, Spencer S. Hsu and Marissa J. Lang – Washington Post
Dozens of people on a terrorist watch list were in Washington for pro-Trump events Jan. 6, a day that ended in a chaotic crime rampage when a violent mob stormed the U.S. Capitol, according to people familiar with evidence gathered in the FBI’s investigation.
*****How many of them were among those getting bitcoin payments?~JJL
FinCEN Extends Comment Period for Rule Aimed at Closing Anti-Money Laundering Regulatory Gaps for Certain Convertible Virtual Currency and Digital Asset Transactions
The Financial Crimes Enforcement Network (FinCEN) announced today it is reopening the comment period for its recent proposed rulemaking regarding certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA). Under the Notice of Proposed Rulemaking (NPRM), banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.
*****Anonymous, maybe not.~JJL
U.S. says Capitol rioters meant to ‘capture and assassinate’ officials – filing
Brad Heath, Sarah N. Lynch – Reuters
Federal prosecutors offered an ominous new assessment of last week’s siege of the U.S. Capitol by President Donald Trump’s supporters on Thursday, saying in a court filing that rioters intended “to capture and assassinate elected officials.”
*****There were some people with more on their minds than taking selfies.~JJL
Arrested Capitol rioters had guns and bombs, everyday careers and Olympic medals
Brad Heath, Sarah N. Lynch – Reuters
United by political grievances, they came in costumes, snapping selfies, calling themselves patriots. Some came armed for battle and planning for “war.”
*****And some had more than cell phones.~JJL
The U.S. Mustn’t Follow Weimar Germany and Ancient Rome; In its moment of crisis, the American republic can find warnings but also inspiration in the past.
Andreas Kluth – Bloomberg
Since the ransacking of the U.S. Capitol on Jan. 6, America’s institutions, leaders and citizens have been groaning under one of the most severe tests in the history of the republic. Are there lessons to draw on from the past? History, according to a famous aphorism, may not repeat itself, but it rhymes. Here, then, is my own personal musing on two republics that failed, with consequences for the whole world: pre-Imperial Rome between 133 BCE and 27 BCE, and Weimar Germany between 1919 and 1933.
*****Probably good advice considering how those two turned out.~JJL
The Paycheck Protection Program will open for most borrowers next week.
Stacy Cowley – NY Times
After giving small lenders a head start, the Paycheck Protection Program will open for all applicants on Tuesday, the Treasury Department said on Wednesday. The stimulus package passed last month included $284 billion in funding to restart the small-business relief effort, which made $523 billion in loans last year to 5.2 million recipients. The new funding will be available both to first-time applicants and to some returning borrowers.
*****John J. Lothian & Company, Inc. qualifies for this program and we will be applying again for a forgivable loan.~JJL
Thursday’s Top Three
Our top story Thursday was “A more perfect union: FIA President and CEO Walt Lukken shares a personal perspective on Washington riots” from the FIA. Second was the JLN exclusive by John Lothian, Transact Futures Bought By Owner Of Ninjatrader Brokerage, An Introducing Broker. Third was the NFA notice, NFA permanently bars Orland Park, Ill. introducing broker LTG Trading LLC and bars its former principal Gary Fullett from membership for five years.
CryptoMarketsWiki Coin of the Week: Polkadot (DOT)
Polkadot’s DOT token has overcome XRP to become the fourth-largest cryptocurrency by market cap, according to data by Messari. This was likely due in large part to an ongoing XPR selloff triggered by the U.S. SEC’s lawsuit against Ripple.