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
I have a correction in my reflection about Peter Wind. After talking with his son Christian Wind yesterday, I found out that Stephanie Wind, Peter’s wife, was home at the time Peter collapsed. When she found him, she applied CPR and called 911. Peter could not be revived. My deepest apologies for the error. It has been corrected in the story and the audio podcast version of the story.
We had additional reflections of Peter on JohnLothianNews.com. The reflections are from Michael Cahill, Tony Drake, Doug Ashburn and Chris Hehmeyer. If you have a reflection about Peter and his impact on your life, please email it to me at firstname.lastname@example.org
Our GoFundMe campaign exceeded $10,000 yesterday. We have received more donations to the JLN MarketsWiki Education GoFundMe campaign, including a $1000 donation from Gerry Corcoran and a $500 donation from Martin Mosbacher. Others contributing included Thomas F. Chlada and Earle Combs. Gerry Corcoran is the CEO of RJ O’Brien, an industry-leading non-bank futures commission merchant. Martin Mosbacher is the president at Lansons Intermarket, a fim JLN has worked with for many years. He is also a member of the John J. Lothian & Company, Inc. advisory committee. Tom Chlada is a managing director at RCM Alternatives and Earle Combs is a trader and CBOT member from a historic Chicago Board of Trade family and member firm. Thank you to Gerry, Martin, Tom and Earle 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.
The FIA has issued a white paper on the impact of pandemic volatility on CCP margin requirements. The paper found that central counterparty (CCP) margin requirements rose dramatically during pandemic. The FIA calls for improvements to margin models to reduce liquidity risk.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Steptoe & Johnson LLP Makes Good Use of Pandemic Time with Financial Services University Video Series
By John J. Lothian
Matthew Kulkin of Steptoe & Johnson LLP figured out a new way to help his law firm during the coronavirus pandemic. When he came back to Steptoe after a tenure at the CFTC, after taking the spot previously occupied by now-author Eileen Flaherty as director of the Division of Swap Dealer & Intermediary Oversight, he was impressed with how many different pieces of the firm “plug into the financial services industry,” he said.
He started thinking about how to communicate that to their customers and colleagues in the company around the world. He came up with the idea of a Financial Services University, consisting of a series of video interviews of colleagues across the organization.
He wanted to help both to understand the opportunities to leverage the vast skills of Steptoe in financial services.
To read the rest of this commentary, go here.
FIA Data Underscores Explosive 2020 Growth in Equity, Commodity Volume
By Suzanne Cosgrove – John Lothian News
Global volume in futures and options is on track for a banner year in 2020, with growth fueled largely by equity derivatives amid unparalleled levels of volatility. Equity derivatives saw a total of more than 7 billion contracts traded in the third quarter, according to data compiled by the FIA.
Total volume for all exchanges tallied 11.8 billion contracts for the third quarter, compared with 8.6 billion in third-quarter 2019. For the year 2020 through September, the volume tally was 33.7 billion contracts.
Looking at the top five exchanges by total volume, the FIA ranked the National Stock Exchange of India as No.1 with about 6.1 billion contracts traded in the nine months from January through September 2020, followed by the B3 (Brasil, Bolsa, Balcão), which was ranked as No. 2 with 4.5 billion contracts. CME Group’s exchanges came in at No. 3 with a combined total of about 3.8 billion contracts, ICE was No. 4 with 2.1 billion and Cboe Holdings was No. 5 with 1.9 billion contracts traded.
To read the rest of this story, go here.
U.S. Election Seen As Possible Pivot Point for Cannabis Legislation
Initiatives to legalize marijuana are on the ballot in five states this Election Day, giving voters the chance to move the industry toward wider acceptance. In addition, several Senate and gubernatorial races are seen as key to unlocking stalled legislation. JLN talks with Kerry Jordan, co-founder and managing partner of Supercritical, about how the vote is expected to impact the cannabis landscape.
FIA Issues White Paper on the Impact of Pandemic Volatility on CCP Margin Requirements; Paper finds central counterparty (CCP) margin requirements rose dramatically during pandemic; FIA calls for improvements to margin models to reduce liquidity risk
FIA today released a white paper that examines the dramatic increase in margin requirements at derivatives clearinghouses during the first quarter of 2020 due to increased market volatility related to the pandemic. Although the clearing system performed well during exceptional volatility and trading volume, the increase in margin requirements created a large and sudden demand for liquid assets that contributed to stress in the financial markets. FIA views this episode as an important test of the clearing system and in this paper puts forward several recommendations to improve margin models.
*****The FIA is keeping busy, even while preparing for EXPO-V.~JJL
GOP Sen. Kelly Loeffler: ‘Not familiar’ with Trump’s infamous 2005 ‘Access Hollywood’ tape
Savannah Behrmann, USA TODAY
Sen. Kelly Loeffler, R-GA., claimed Wednesday night she was “not familiar” with President Donald Trump’s now-infamous 2005 “Access Hollywood” tape where he described sexually assaulting women. Loeffler, who is in a tight reelection race, gave a vague answer when local reporters asked Wednesday if she was aware Trump had been recorded talking about groping women, after saying previously she’d never disagreed with anything Trump has said or done.
*****She has said she never disagreed with anything President Trump has said or done? I have never heard of anything like that. ~JJL
The Pandemic Is Affecting The Mental Health Of The Rich More Than The Poor
Mark Travers – Forbes
A recent Axios-Ipsos poll found that high earners and the highly educated showed sharper declines in emotional well-being during the pandemic. New research forthcoming in the Journal of Applied Psychology corroborates this finding. A team of psychologists led by Connie Wanberg of the University of Minnesota found that the two defining features of socio-economic status (SES), education and income, were both associated with greater declines in psychological well-being over the course of the pandemic.
*****Money can’t buy you pandemic wellness.~JJL
A Covid-19 Outbreak at Wisconsin Pushes College Football Toward the Edge; A contender for the College Football Playoff, the Badgers have been sidelined by the virus. It’s a sign of how hard it will be to make it to a championship game.
Laine Higgins – WSJ
The fragile foundation of college football in 2020 is at risk of buckling in Wisconsin, where a Covid-19 outbreak on the No. 9 Badgers is showing how little room for error the sport has in attempting to complete its pandemic season. College football has already been in near chaos thanks to the fact that the major conferences have taken different approaches to staging a season. The conferences started play at different times, have different protocols for dealing with the virus and have had to rearrange schedules on the fly to try to stay on track.
*****The Badgers were down to asking their mascot “Bucky the Badger” to play quarterback.~JJL
Wednesday’s Top Three
Our top story Wednesday was The Guardian’s How does one of the world’s biggest pork firms go bust during a boom? Second was a repeat from Tuesday – The Atlanta Journal-Constitution’s Loeffler and Sprecher’s $31 million year. Third was the Los Angeles Times’s Investor Bill Gross accused of blaring ‘Gilligan’s Island’ song on loop to torment neighbor, which was our top story Tuesday.