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
The biggest story of the day, reported by every major news organization, is President Trump’s declining to commit to a peaceful transfer of power after the election. This spells trouble for democracy and for the markets. The markets have been telling us to expect volatility up to and after the election. Trump yesterday even said that a new Supreme Court judge needed to be confirmed to replace Notorious RBG so the election could be decided by the court, and not a 4 to 4 tie. If you don’t know how to trade options, now would be a good time to learn to help you protect your portfolio, or to speculate if that is your cup of tea.
Cargill Incorporated was fined $500K by the CME Group for violating rules about engaging in conduct or proceedings inconsistent with just and equitable principles of trade and committing an act which is detrimental to the interest or welfare of the Exchange or to engage in any conduct which tends to impair the dignity or good name of the Exchange. The violations involved a grain merchant’s actions regarding the soft red winter wheat market.
We finally published the second installation of The Path to Electronic Trading series, an interview with Dan Gramza. Dan was very involved with helping SGX traders transition from the floor to the screen. He tells his story and then how he helped the SGX traders. Our friends at CQG are our sponsor for the episode with Gramza.
Yesterday was my 31st wedding anniversary. On September 23, 1989, Cheryl Lee Howard became Cheryl Lothian. For our honeymoon, we did the Circle Tour of Lake Michigan and stayed a couple of nights up on Mackinac Island in Michigan and then in Sister Bay in Wisconsin. For our 31st anniversary, I have convinced Cheryl to go camping. Cheryl has not camped since the kids were in Cub Scouts, so this is a major victory and opportunity.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
The SEC’s approval of a series of amendments Wednesday to its whistleblower program did not go down well with all parties concerned, according to Compliance Week and other publications. Democratic Commissioners Allison Herren Lee and Caroline Crenshaw, who joined the commission in August, voted no and excoriated an amendment that addressed the agency’s evaluation of large awards. The SEC discarded a proposal to allow staff to reduce awards of more than $30 million after outcry from whistleblower advocates.~SR
Dan Gramza – The Path to Electronic Trading
Dan Gramza sat for an interview with John Lothian News for the MarketsWiki Education The Path to Electronic Trading video series. Gramza tells the story of how he got started in trading with stock options in 1974. In 1980, he moved to the Chicago Board Options Exchange and traded delta neutral strategies. He realized he had not eliminated risks, but changed them. He moved to the Chicago Board of Trade on a rice membership to trade price. Then he started working for exchanges, including the SGX, teaching how to trade. He explains the difference between being a floor trader and an upstairs trader.
Stocks perform better when a Democrat is in the White House. History proves it.
Matt Egan – CNN
President Donald Trump has warned of economic and financial Armageddon if Joe Biden and the Democrats retake the White House next year. But history paints a very different story.
Both the stock market and the real economy tend to do better when Democrats, not Republicans, are in charge.
***** There are always Democrats in the White House. Sometimes they are even in power.~JJL
How an Amazon Bribery Scheme Became a $100 Million Swindle
Spencer Soper and Isabelle Lee – Bloomberg
It sounds like the plot of a made-for-Netflix crime drama. A Brooklyn businessman stuffs $8,000 in cash in a suitcase and calls an Uber to send it to accomplices. Hundreds of thousands of dollars crisscross the globe via MoneyGram, PayPal, and foreign bank accounts in a plot to swindle more than $100 million from the world’s most valuable internet retailer and its customers.
*****Everything is big with Amazon, even the swindles.~JJL
CDC director says more than 90% of Americans remain susceptible to the coronavirus
Will Feuer – CNBC
A majority of the U.S. remains susceptible to a coronavirus infection, Dr. Robert Redfield, director of the Centers for Disease Control and Prevention, told lawmakers Wednesday.
******Don’t let your guard down. Stay vigilant. Stay safe. Stay smart.~JJL
Airlines Face Desolate Future as Attempts to Reopen Crumble; With no return to normal in sight, they are desperate to cut costs and raise financing.
Anurag Kotoky, Angus Whitley – Bloomberg
Airlines have felt the pain of the coronavirus pandemic more than other companies. Almost overnight the bulk of their business ceased. But in mid-2020 there was at least hope that Covid-19 might not be as virulent as first thought; that warmer months would bring some respite; that travel corridors—agreements allowing passengers to fly between two countries without quarantine—might get people back in the air.
*****I predicted it would take five years before the travel industry would return to some kind of normal activity. Whether there will be a travel industry remains a question, it seems.~JJL
The Most Important Climate Pledges Aren’t the Splashy Ones
Nathaniel Bullard – Bloomberg
It’s Climate Week in New York, which brings with it a raft of announcements from companies outlining their new decarbonization targets and clean investment strategies. Some of the declarations are hefty, like Walmart Inc.’s plan to reach zero emissions across its global operations in 20 years without relying on carbon offsets. Others, like Morgan Stanley’s commitment to reach “new net-zero financed emissions by 2050,” are long-dated and light on the details. Then there’s General Electric Co’s pledge to stop supplying equipment to new coal-fired power plants, 138 years after its founder, Thomas Edison, built the first coal power generating station in Lower Manhattan. (GE won’t be entirely out of the industry it created. It’ll still supply and service the existing coal plant fleet, but it won’t service its growth.)
***** I like our world and want it to remain healthy. Maybe we should all work a little harder to keep it that way.~JJL
Wednesday’s Top Three
Our top story Wednesday was Crain’s Chicago Business’s The chiefs of Cboe and CME have a warning for city hall. That warning is, basically, if you tax our financial transactions, we are outta here. Second was John Lothian News’s USA v Vorley and Chanu: DOJ Looking For Conviction Against Spoofers, Thom Thompson’s continued coverage of the spoofing trial taking place in Chicago. Third was the Financial Times’s Singapore and India exchanges end dispute over derivatives, about the SGX’s NSE Nifty 50 index futures.