THE JOHN LOTHIAN NEWS DAILY UPDATE – 12/02/2020

John Lothian

John Lothian

Executive Chairman and CEO


 

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

JLN Staff

Lynne Marek has exited Crain’s Chicago Business. The longtime Crain’s senior reporter covered the financial services and higher education sectors for the publication, but had covered media in the past too. Her stories, carried in JLN, were often the most highly read stories of the day. We wish her well with her next endeavors.

Crain’s Senior Reporter Steve Daniels, who has been with the publication for 25 years, will take over the financial services beat until a long-term plan is
executed. Daniels currently covers banking, insurance and utilities. Daniels can be reached at
sdaniels@crain.com. His Twitter handle is @stevedaniels27.

The Wall Street Journal has a video titled “Options Trading Is More Popular Than Ever Despite the Risks.” Does this mean the options trading boom is over?

The OCC reported November 2020 total volume was up 71 percent from a year ago, which was the highest November ever and second-highest month on record.

The Facebook-Backed Libra Association has changed its name to Diem, Bloomberg reported.

Here’s a feel-good story by Austin Krumpfes he told on his late father’s 83 birthday:

The attached photo is Harlan Krumpfes’ trading jacket from the CBOT, where he was a member for 45 years (grain room). Unbeknownst to Austin and the rest of Harlan’s family, this jacket had been hanging in the coat room ever since his last day on the floor (November 24, 2014, according to the order time-stamps in his pockets). Apparently Harlan hung his jacket up there that afternoon just like he did every day for decades, not knowing at the time that it was to be his last day on the floor. When Harlan passed away earlier this year, the news apparently made its way back to the coat room. Somebody there remembered him, and knew that his jacket was still hanging there in case he ever returned to the floor. Upon hearing the news, that person called Member Services, who gathered up the jacket and a few other items that they found of his, tracked down the Krumpfes family, and then insisted upon hand-delivering them to their home. It totally blew them away when that “time capsule” of his jacket and other mementos showed up. That is a class move by the Member Services staff.

There were no new donations to our JLN MarketsWiki Education GoFundMe campaign yesterday. Help us preserve industry history by donating to our GoFundMe campaign. We have had donations of $16,711 so far.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

*****

International cooperation was the watchword from Loh Boon Chye, CEO of the Singapore Exchange, a keynote speaker at FIA Asia-V, who said that a month after the U.S. presidential election there is renewed commitment to multilateralism and international cooperation, and a sense of optimism in the air. The recent signing of the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between Asia-Pacific nations, puts Asia in a prime position for a new normal, he said.

There are more than 40 countries in Asia, which is “now more than just about competition between China and the U.S.,” he said. “Dynamics and nuances between Asian countries will become more important in a post-COVID, RCEP world.”

The exchange’s SGX FTSE Taiwan Index Futures contract is “among the most successful product launches” and adds to the exchange’s index partnership with FTSE Russell, the fastest liquidity builder of any contract, he said. (Trading in that contract exceeded US$1.5 billion during launch week.) He also touted the SGX Nikkei 225 futures, launched together with the CME, as one of the earliest exchange linkages.

“The challenges of our time require us to come together as a community with a common objective,” he said. One of those challenges is the environment, where there has been a “global awakening.” Asia’s weight in the global economy today can make a decisive impact on climate issues, he said. “Singapore has been one of the few countries to introduce a broad-based carbon tax, and is working on a long term carbon strategy that will define Singapore as an international center. China too has made climate change a priority.”

Many challenges remain, such as standardization, he said, but “where there’s a will there’s a way. Together we can create real impact. Only then can we look back at this moment as Asia’s opportunity to define the decade.” ~SR

The OCC’s cleared volume for November was 677,190,590 contracts, its second-highest month ever. I wonder if someone at the OCC has started ringing a little bell every time they beat their own record? It’s happened a lot this year. ~MR

 

First Read

FIA Asia-V: Asia-Pacific Exchanges Look Back and Ahead
Sarah Rudolph and Suzanne Cosgrove – John Lothian News

In the first panel at FIA’s Asia-V 2020 Expo, exchanges in the Asia-Pacific looked back at their successes during a turbulent year and ahead toward opportunities for cooperation in 2021.

During the unprecedented uncertainty of the past year, Asia-Pacific markets responded with innovation, and the exchanges are thriving, said Ian Nissen, the moderator of the panel.

Amid enormous volatility in March, widespread government actions and continuing global tensions, the exchanges remained liquid and transparent and handled rolling without issues, said Helen Lofthouse, executive general manager, derivatives and OTC markets at ASX.

To read the rest of this story, go here.

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FIA Asia-V: Top Chinese Regulator Pitches Open Mainland Markets
Suzanne Cosgrove – John Lothian News

With a pedigree that includes a Ph.D. in economics from Stanford University and a five-year stint as an investment officer at the World Bank, it is not surprising that the vice chairman of the China Securities Regulatory Committee is a proponent of the opening of China’s markets.

In his position at the CSRC, Fang Xinghai oversees both China’s futures and stock markets, and also is responsible for corporate finance. Interviewed by FIA President and CEO Walt Lukken on the first day of the FIA Asia Conference, Xinghai said the pandemic, “if anything, has accelerated the development of China’s capital markets.”

To read the rest of this story, go here.

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FIA Asia-V: Adapting to the New Normal
Matt Raebel – John Lothian News

“Never let a good crisis go to waste.” This quote by Winston Churchill (or former Chicago Mayor Rahm Emmanuel, depending on who you ask) was brought up by Stella Gan, the FIA’s head of operations for the Asia-Pacific region on the first day of FIA Asia-V, as speakers from all over the derivatives industry discussed via Zoom how the industry has adapted to the “new normal” in the wake of the coronavirus pandemic.

To read the rest of this story, go here.

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FIA Asia-V: CCP Resilience Does Not Dissuade Industry From Self Assessment
Thom Thompson – John Lothian News

Jackie Mesa, who is FIA’s COO and Senior VP of Global Policy, moderated Asia-V’s panel, “The CCP Perspective on the Asia-Pacific Clearing Environment.” Her panelists were Kate Birchall from LCH, Agnes Koh, from Singapore Exchange, Vikram Kothari from NSE Clearing Limited, Daisuke Miyauchi of the Japan Securities Clearing Corporation, Hamish Treleaven from ASX and Simon Walker from Morgan Stanley.

The panelists echoed many of the themes about industry resilience during the March markets meltdown that have become familiar. The panelists agreed that while they were not expecting the volatility, they were nonetheless pretty much prepared for it. There were some hiccoughs early on but those were more closely associated with adapting to work from home than financial issues.

To read the rest of this story, go here.

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David Prosperi – A Career in Politics, Government, Futures Trading, Insurance and Clearinghouse Public Relations
JohnLothianNews.com

David Prosperi has had a long career in public relations in the markets and politics. John Lothian interviewed Prosperi over Zoom about his career and the events that saw him move from national politics to the White House and to jobs at the Department of Energy and the Department of the Interior. He was later recruited to join the CBOT to work with CBOT CEO Tom Donovan and entered the world of markets, where he remained the rest of his career. He worked for the four biggest and most important financial giants in Chicago: the Chicago Board of Trade, the CME Group, Aon and the OCC. The interview includes stories of being with President Reagan the day he was shot, working with a soccer club in the Premier League to tell their business story, and helping turn the OCC into an industry thought leader. Here is our interview with David Prosperi.

Watch the video »

++++

OCC November 2020 Total Volume Up 71 Percent from a Year Ago; Highest November ever and second-highest month on record
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that November 2020 total cleared contract volume was 677,190,590 contracts, up 71 percent from November 2019. This marks the highest November ever and the second-highest month on record. Year-to-date average daily cleared contract volume through November was 29,295,206 contracts, up 48.4 percent from November 2019.
/jlne.ws/36sYkZs

*****71% is a big number!~JJL

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The Future of Finance Is in Wealth Management and Retail Trading; A look at the data shows where the industry’s money is being made.
Jennifer Surane, Sridhar Natarajan, and Larry R Tabb – Bloomberg
Banks have faced a challenging decade, with disruptive financial technology startups and low interest rates around the world placing pressure on many of their key businesses. But many have found ways to thrive, often by creating services to move or manage money. Here you’ll find a look at some of the areas that have seen the biggest change in the past decade, as well as a glimpse at what might come next.
/jlne.ws/37wj8yB

*****Yes, that is Larry Tabb, head of market structure for Bloomberg LLP, in the byline.~JJL

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Women outpace men in signing up to investment platforms; Companies report a rush of interest from women this year
Madison Darbyshire – FT
Women are signing up to investment platforms at faster rates than men, as investors flock to trading to take advantage of market volatility and lower prices.
/jlne.ws/33CsqrA

*****Money for nothing and women trade for free.~JJL

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Nasdaq CEO Pushes Corporate Boards to Diversify; Adena Friedman discusses the exchange operator’s diversity plan with The Wall Street Journal.
Alexander Osipovich – WSJ
Nasdaq Inc. on Tuesday proposed new rules that would require the boards of its listed companies to meet certain minimum diversity requirements, or explain in a public disclosure why they aren’t doing so. Nasdaq Chief Executive Adena Friedman discussed the exchange operator’s diversity plan with The Wall Street Journal. This interview has been edited for clarity.
/jlne.ws/39Bh8rs

*****Here is the press release from Nasdaq that speaks to the new initiative.~JJL

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CDC Panel Recommends Giving First Covid-19 Vaccines to Health Workers, Nursing Homes; A decision could come Wednesday, as drug makers await word in coming weeks of emergency-use authorization of two vaccines
Peter Loftus, Jared S. Hopkins and Betsy McKay – WSJ
A federal vaccine advisory panel recommended that health-care workers and residents of long-term care facilities be the first to receive any Covid-19 vaccine doses from the limited supply that will be available initially.
/jlne.ws/2KRY2Tq

*****So much for the Eurodollar options pit getting the vaccine first.~JJL

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Tuesday’s Top Three
Our top story Tuesday was Salon’s New Kelly Loeffler ad claims multimillionaire knows what “it feels like waiting on that paycheck.” Second was Yahoo Life’s It Only Takes This Long to Get COVID in a Room With Someone Who Has It. Third was The New York Times’ 1918 Germany Has a Warning for America.

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