The Markets Will Stop a Trade War; Nasdaq’s Crypto Policing Meeting; Forest Fires

Jul 30, 2018

The Markets Will Stop a Trade War; Nasdaq’s Crypto Policing Meeting; Forest Fires

Jul 30, 2018

First Read

Hits & Takes
JLN Staff

We have three changes for the upcoming MarketsWiki Education World of Opportunity series in Chicago. Renato Mariotti was called to Atlanta by CNN on Monday, so he will not be speaking on Thursday, August 2. We have moved Bill Weldon from Tuesday to Monday to fill Renato’s space and moved Jessica Darmoni from Thursday to Tuesday to fill Bill’s vacated spot. There is always some last minute change. ~JJL

Priceonomics posted a blog about which companies in the S&P 500 generated the most revenue per employee (RPE) in 2017. 13 of the top 20 companies belong to the energy sector – Valero is #1 with $9.4m RPE. Only six of the top 50 are financial companies. One of those was Cboe at 23 – $2.5m RPE. ~SD

SEC Commissioner Hester Pierce dissented from the SEC’s bitcoin ETF decision, saying it “undermines investor protection by precluding greater institutionalization of the bitcoin market,” and “I reject the role of gatekeeper of innovation – a role very different from (and, indeed, inconsistent with) our mission of protecting investors, fostering capital formation, and facilitating fair, orderly, and efficient markets.” ~SD

Volumes for ICE’s FANG+ futures last week were 1873 contracts on Monday, 4774 on Tuesday and 2879 Wednesday and 2307 on Thursday. I wonder why there was that uptick… ~SD

The Sultans of Swap (@CFTC) and the Naked Shorts (SEC) took regulatory cooperation to the softball field on a beautiful night in D.C. ~JJL

Russell Rhoads left the Cboe on Friday after 10 years and starts a new role this morning with the TABB Group.~JJL

The Daily Beast has a story titled “How an Ex-Cop Rigged McDonald’s Monopoly Game and Stole Millions,” that is sad and disheartening. When you can’t even get away from the cheating stories on the street and get a quick Big Mac without being part of another crime.~JJL

Columnist George F. Will wrote in a piece in the Washington Post titled “Our socialist president.” Well worth the read.~JJL

CNBC’s John Harwood narrated a video titled “The Trump-Russia ties hiding in plain sight.”~JJL

Eric “Rick” Bruce Peterson, a former S&P 500 pit trader at the CME and trader of Treasury futures at the CBOT, has passed away at the age of 63 from leukemia. He was a well known swim coach, teacher and author.~JJL

Moving abroad can be good for you.~JJL


MWE World of Opportunity – Tech, Big Data, and the Capital Markets
“I met some people working on financial technology. They were really cool and interesting people solving hard problems and I wanted to join them. That was how I made my career decision.”

In this video from MarketsWiki Education’s World of Opportunity event in New York, Mike Beller, CEO of Thesys Technologies, talks about the electronification of markets and the explosion of trading venues it created. Beller says managing the mass amounts of data generated by this phenomenon is the industry’s biggest challenge.
Watch the video here »


Deutsche Bank Is Cutting Staff in Chicago in U.S. Retreat
William Canny and Ivan Levingston – Bloomberg
Deutsche Bank AG is cutting dozens of employees and consolidating space at its Chicago office as part of a broader plan to shrink its U.S. operations, according to people briefed on the matter.

***** Two months before Oktoberfest too.~JJL


Will we ever stamp out fraud?; An entertaining history of financial crime that reveals why we’re still suckers for a scam
Jonathan Ford – FT
The events of October 29 1967, when Reggie Kray murdered Jack “The Hat” McVitie at a party in Stoke Newington, north-east London, are firmly lodged in British criminal folklore. The hit led to the crime boss’s arrest and the fall of “The Firm”, the terrifying 1960s gangland empire he ran with his twin brother Ronnie.

***** Check out the movie “Legend” about the Kray brothers.~JJL


The Spread – Rimshot Please – 7/27

We’ve added more props for this week’s episode of “The Spread” for your viewing pleasure!

Watch the video and see the stories referenced here »


Times publisher asks Trump to reconsider anti-media rhetoric
Darlene Superville – AP
The publisher of The New York Times said Sunday he “implored” President Donald Trump at a private White House meeting this month to reconsider his broad attacks on journalists, calling the president’s anti-press rhetoric “not just divisive but increasingly dangerous.”

**** Some newsrooms have armed guards in front of them now.~JJL


Between Bridges – July 27, 2018: National Futures Association Proposes Interpretive Notice Requiring FCM, IB, CTA and CPO Disclosures Regarding Virtual Currency Activity
Gary DeWaal – Bridging The Week
The National Futures Association has proposed to adopt an Interpretive Notice that would require futures commission merchants, introducing brokers, commodity trading advisors and commodity pool operators to affirmatively make certain disclosures to customers, counterparties or investors that engage or may engage in activities related to spot virtual currencies or derivatives based on virtual currencies with or through them.


Friday’s Top Three
Friday’s top three shared the common theme of value – and whether something is as valuable as you thought. Bloomberg led with Up to Two-Thirds of Bitcoin Transactions Have No Economic Value. Second was the FT’s look at the value of Virtu, in High speed trader Virtu’s profits miss the mark. Third was Bloomberg’s Hedge Fund Titans Who Bet Big on India Now Say They Were Scammed, who thought they found value but then didn’t.


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Lead Stories

The Markets Will Stop a Trade War; If the tariffs hurt growth, expect a major selloff. President Trump will be forced to reverse course.
Roger C. Altman – WSJ
The Trump administration is on the verge of launching a global trade war, the magnitude of which the world hasn’t seen in a century. The president got elected promising to end what he calls “cheating” on trade by China and other nations. He believes America’s trade partners have more to lose in such a battle than does the U.S. But if all the threatened Trump tariffs take effect, and the targeted countries respond with the expected retaliatory tariffs on American exports, everyone will lose.

Nasdaq Holds Closed Door Event to Discuss Policing Crypto
Julie Verhage – Bloomberg
The road to shaking its history of shady transactions and fraud is proving long for cryptocurrencies, but Nasdaq Inc. thinks it can help get the industry on the path to legitimacy

Scorched earth: the world battles extreme weather; Significant forest fires are up 40% in Europe this year and affecting countries previously untouched. Scientists say nations must be better prepared
Leslie Hook and Kerin Hope – Financial Times
Thanasis Kontidis was hosing down the veranda of his family’s summer home in Mati on Monday afternoon when he caught a whiff of acrid smoke. “I looked up and saw the sky was a beige colour so I knew there was a fire somewhere. But I didn’t realise it was getting close.” Half an hour later the 22-year-old university student was fleeing for his life.

The FCA is ‘failing to enforce’ new Mifid II rules; The Mifid II directive is being ignored and private investors are not given details of all costs involved
Mark Atherton – The Times
The chief City regulator is failing to ensure financial groups comply with new Mifid II regulations on fund charges, say campaigners.

Special Report: Spiders, sewage and fees – the other side of renting from Wall Street
Michelle Conlin – Reuters
The rental home seemed so beautiful when McKayla Ferreira first laid eyes on it. The roof had three gables, fruit trees grew in the backyard, and the front porch gleamed with a fresh coat of paint.

From the Poker Table to Wall Street
Steve Friess – NY Times
There is almost nothing on Vanessa Selbst’s tidy, unadorned desk on the second floor of this suburban office building that would suggest its occupant is the most successful female player in the history of professional poker except, perhaps, a neat stack of $5 bills to the left of her three monitors.

New York Regulator Revokes Its Approval of Charter, Time Warner Cable Merger; State commission also fines Charter another $1 million for failing to meet targeted expansion to rural areas
Kate King and Shalini Ramachandran – WSJ
A New York state regulator on Friday penalized Charter Communications Inc. for failing to fulfill its obligations under its 2016 merger with Time Warner Cable Inc., and essentially ordered the cable provider to exit its operations in the state.

Mark Carney Is Preparing for Brexit and the Next Crisis; What it’s like to be the U.K.’s central bank chief as Britain negotiates its traumatic exit from the EU.
Stephanie Flanders – Bloomberg
Mark Carney seemed revolutionary enough in 2013 when he became the first non-British citizen to be appointed governor of the Bank of England. But the 53-year-old has since had to contend with a much greater upset: the U.K.’s vote to leave the European Union. In an interview last month, he revealed that he spends half his time preparing the financial system and economy for Brexit, which takes effect in March.

Why Libor Will Disappear – and What It Means for You
Adam Schneider – Partner, Retail & Business Banking and Digital at Oliver Wyman; Pin Su – Associate, Corporate & Institutional Banking at Oliver Wyman
Libor is sometimes called the “world’s most important number.” The London Interbank Offered Rate (Libor) is everywhere in the financial landscape. It is the reference interest rate in a wide range of wholesale and retail financial products, the total notional outstanding value of which exceeds $240 trillion.

Bank of America shakes up derivatives trading team in Europe; The changes come after futures and options volumes shot up in the first half of 2018
Samuel Agini – Financial News
Bank of America Merrill Lynch has shaken up one of its key trading teams after a period of increased activity in the global exchange traded derivatives market.

Exchanges, OTC and Clearing

Startup Exchange IEX Still Has No Listings; IEX has approached hundreds of companies including Amazon, Starbucks as it seeks to woo firms away from NYSE and Nasdaq
Alexander Osipovich – WSJ
A startup stock exchange has discovered it isn’t easy to pull corporate America away from the mighty New York Stock Exchange and Nasdaq Inc.

Buy-side warming to Virtu Financial’s SI, chief says; Virtu Financial CEO Doug Cifu outlines growth of its systematic internaliser and targets further growth of the service in Europe.
Hayley McDowell – The Trade
Virtu Financial’s systematic internaliser (SI) has gained ground in Europe with the market maker’s chief executive highlighting significant opportunity for further growth in the future.

Japan Exchange Group, Inc. and Consolidated Subsidiaries Consolidated financial results for the three months ended June 30, 2018, (Based on IFRS), unaudited

Bloomberg to Launch New Data Service to Increase Transparency in UST and IRS Pricing
Bloomberg announced today that it will launch a new data service consolidating NEX’s BrokerTec US Treasuries data with USD Spread-Over data from Tradition’s Trad-X platform. This service, called Bloomberg Capital Markets Package (“BCMP”), will be the most liquid and transparent US capital market reference available, representing the two largest electronic wholesale markets in UST and IRD. This service will be available via the Bloomberg Terminal and as a data feed.
(No Link)

First day of trading for Audiovalley on Euronext Growth
AudioValley, a pioneer in BtoB digital audio, listed today on the Euronext Growth market in Paris.

Paper: how Eurex offers synthetic exposure to the MSCI Korea Index
As institutional investors increasingly shift their focus towards emerging markets, and in particular towards the Korean Peninsula, the South Korean market is gaining more and more attention. We have now published a paper illustrating how Eurex creates synthetic exposure to the MSCI Korea Index and showing how this exposure could be achieved at substantially below 1 percent tracking error from 2012 to 2017.

Decommissioning of two low-frequency trading gateways in the T7 production environment
In the fourth quarter of 2018, Eurex Exchange is planning to decommission two of the low-frequency trading gateways (L05 and L06) in the T7 production environment. Sessions currently assigned to the affected gateways will be re-assigned to the remaining gateways.

Kazakhstan – the 57th direct connection to Clearstream
Deutsche Bˆrse Group
Clearstream, the international central securities depository (ICSD) of Deutsche Bˆrse Group, is expanding its international network to connect the Kazakh domestic markets as of 30 July 2018. The connection gives foreign investors access to the local market. Clearstream will be able to settle Kazakh government bonds and treasury bills from the Kazakh central bank. Citibank Kazakhstan JSC, a subsidiary of Citibank, NA, acts as a local custodian and money correspondence bank.

HKEX Receives CFTC Certification For Its MSCI AxJ Futures
The US Commodities Futures Trading Commission (CFTC) has certified that effective 27 July 2018, Hong Kong Exchanges and Clearing Limited’s (HKEX) MSCI AC Asia ex Japan Net Total Return Index (MSCI AxJ) Futures contract meets certain requirements of the US Commodity Exchange Act. This means that intermediaries may offer or sell the contract to customers in the US without any further regulatory action from the CFTC.


Twitter User Numbers Slip as It Shuts Fake Accounts; Stock Drops; Company says monthly users fell by a million in the second quarter, could continue to fall
Marc Vartabedian – WSJ
Twitter Inc. said its number of monthly users dropped in the second quarter and could continue to fall as the social-media company purges fake accounts.

Human Bankers Are Losing to Robots as Nordea Sets a New Standard
Niklas Magnusson – Bloomberg
Something interesting happened in Swedish finance last quarter. The only big bank that managed to cut costs also happens to be behind one of the industry’s boldest plans to replace humans with automation.

GLMX Appoints Repo Veteran As Managing Director For Europe
GLMX Europe Limited (GLMX), a comprehensive technology solution for the trading of repurchase agreements (“repo”) and securities lending transactions, has named Phil Buck as Managing Director for Europe. Buck brings to GLMX over 20 years of direct experience in repo and securities lending technology solutions. He will report directly to CEO and Co-Founder Glenn Havlicek and will play a key role in expanding the Company’s European presence.

Social Media Has Failed Its Self-Driving Test
Leonid Bershidsky – Bloomberg
The big problem with artificial intelligence right now isn’t that it’s taking over; it’s that it’s being entrusted with serious tasks with real-world consequences before it works properly. It’s the equivalent of letting self-driving cars operate in a city without lane markings.

Michael Russo, Options VP, Product Management (Photo: Business Wire)
Business Wire
Options, the leading managed service and IT infrastructure provider to the global capital markets industry, has today announced the appointment of former Finastra and OpenLink Financial executive Michael Russo to its management team. Russo joins the New York team as VP, Product Management where he will be responsible for driving new business growth and supporting the firm’s Managed Application services.


A former Goldman Sachs exec is joining a crypto-trading firm as it eyes a major global expansion
Frank Chaparro – Business Insider
Circle, the cryptocurrency exchange operator, has snagged a former Goldman Sachs executive to help navigate the murky regulatory waters as it expands globally, Business Insider has learned.

Bitcoin Bounces as Traders Seek Silver Lining in SEC ETF Denial
Olivia Schaber and Rachel Evans – Bloomberg
Dissenting SEC Commissioner Peirce reiterated support for ETF; Peirce was outvoted 3-1 when regulator rejected the fund
Cryptocurrency traders don’t know who to believe in the long-running battle to create an exchange-traded fund that invests in Bitcoin.

New Gallup Poll Shows Only 2% of US Investors Own Bitcoin, But 26% Are ‘Intrigued’
Maxwell William – Cointelegraph
The results of a Wells Fargo/Gallup poll published July 27 finds that only two percent of U.S. investors own Bitcoin, but 26 percent are intrigued by it.

Largest Movie Theater Chain in Thailand Going Crypto
Kevin Helms –
Thailand’s largest movie theater chain, Major Cineplex, is reportedly integrating crypto payments to allow customers to pay for its services and products with cryptocurrency, including movie tickets and popcorn. Thailand recently began regulating crypto businesses.

Have a Cryptocurrency Company? Bermuda, Malta or Gibraltar Wants You
Nathaniel Popper – NY Times
Hedge funds go to the Cayman Islands to incorporate. Big companies are generally domiciled in Delaware. And online poker companies often set up their bases in Gibraltar and Malta.

Coinbase Launches Crypto Gift Card Service in Europe
Wolfie Zhao – Coindesk
U.S.-based cryptocurrency exchange Coinbase now offers a way for customers to purchase retail goods and services using crypto assets, thanks to a new partnership with a digital gift card startup.

An early bitcoin investor explains what most people get wrong about the cryptocurrency
Ali Newhard, Kara Chin and Jacqui Frank – Business Insider
Jeffrey Wernick is an independent investor whose portfolio includes early holdings in Uber and Airbnb. Wernick was also an early investor in bitcoin. He started buying it in 2009, the year it was created.

The biggest crypto firm on Wall Street just took a $134 million loss on bitcoin’s plunge; Former Wall Street macro trader Mike Novogratz’s Galaxy Digital took a $134 million hit in the first quarter.
Kate Rooney – CNBC
Crypto merchant bank Galaxy Digital took a $134 million hit in the first quarter as bitcoin lost half its value and other cryptocurrencies struggled to break out of a bear market.

Bitcoin believers are flocking to a sympathetic SEC commissioner’s Twitter account
John Detrixhe – Quartz
Crypto Twitter is rallying behind a sympathetic watchdog at the US Securities and Exchange Commission. Not long after commissioner Hester Peirce dissented from the agency’s rejection of a bitcoin exchange-traded fund, her count of Twitter followers soared:

Novogratz’s Crypto Bank Makes Belated Debut After Bitcoin Plunge
Doug Alexander and Erik Schatzker – Bloomberg
Galaxy Digital to start trading Aug. 1 on Canadian exchange; Founder Novogratz predicts profit by second quarter of 2019
Mike Novogratz is past the point of no return. Two days from now, his cryptocurrency-focused merchant bank, Galaxy Digital LP, will start trading on Toronto’s TSX Venture Exchange. It should be a triumphant moment for the former Goldman Sachs Group Inc. partner and a milestone for the industry, yet Novogratz is having second thoughts. He reflects on the “frustrating” demands of Canadian regulators that dragged out Galaxy’s listing for months and trapped his investors as Bitcoin collapsed and crypto fever cooled.

Citigroup, Barclays Near End of Blockchain Test Managed by IBM
Matthew Leising – Bloomberg
Banks are hoping to pool tech resources to cut spending; Project offers shared applications on a blockchain network
Barclays Plc and Citigroup Inc. are poised to complete a test of how blockchain technology can streamline their operations as part of a group organized by IBM and one of the world’s largest financial infrastructure providers.


Trump Says He ‘Opened Up Europe’ for Farmers. Europeans Disagree; The gap over what was agreed to at the White House on Wednesday indicates the perils of rifts re-emerging
Jacob M. Schlesinger and Emre Peker – WSJ
A day after President Trump hailed “a breakthrough agreement” on trade with Europe, European officials said the president and his aides are exaggerating the scope of their new pact. While Mr. Trump told an Iowa crowd Thursday that “we just opened up Europe for you farmers,” officials in Brussels later said he did no such thing.

Republicans Are Now Conceding Their Core Values
Charles Sykes –
Political parties do not lose their souls or their identities all at once. Usually, it is a gradual process of compromises that make sense in the moment, but which have a cumulative effect ó like a frog being gradually boiled.

Trump’s Misguided Trade War; The president’s approach to China is a threat to American prosperity.
Editorial Board – Bloomberg
U.S. President Donald Trump may sincerely think he’s battling to win Americans a better deal on trade with China. In fact, he’s making a better deal harder to achieve ó and threatening to inflict grave economic damage on the U.S. economy in the process.

The death of Don Draper
New Statesman
Advertising, once a creative industry, is now a data-driven business reliant on algorithms. The implications are deeply sinister – not only for the consumer but for democracy itself.

Cryptocurrency Rules Should Be Congress’s Focus, Key Lawmaker Says
Elizabeth Dexheimer – Bloomberg
‘Muddied and fairly opaque’ markets need oversight, he says; Michigan Republican may seek to lead financial services panel
A key member of the House Financial Services Committee wants to see lawmakers focus next year on oversight of the “muddied and fairly opaque” markets for initial coin offerings and trading digital tokens.

Democrats demand more information from Trump’s consumer watchdog pick
Katanga Johnson – Reuters
Democratic lawmakers stepped up pressure on President Trump’s pick to lead the Consumer Financial Protection Bureau, demanding more information on her role in the administration’s immigration policies and her stance on consumer finance issues, according to letters seen by Reuters on Friday.

Trump’s Auto Misfire Will Do Nothing for Detroit; Another round of enforced cost increases is the last thing carmakers need.
Anjani Trivedi – Bloomberg
The latest salvo in President Donald Trump’s trade war promises to do more damage than good to an already-anxious American auto industry.

Koch Network Says Trump Trade Moves Causing Long-Term Damage
John McCormick – Bloomberg
Conservative group has long opposed protectionism in trade; Network showing more bipartisan tone with Congress in play
The conservative political network led by billionaire Charles Koch opened a conference in Colorado with sharp criticism of President Donald Trump’s trade policies and leadership style, as it sought to demonstrate a desire for more bipartisan solutions.

Russian Hackers Appear to Shift Focus to U.S. Power Grid
David E. Sanger – NY Times
State-sponsored Russian hackers appear far more interested this year in demonstrating that they can disrupt the American electric utility grid than the midterm elections, according to United States intelligence officials and technology company executives.


Facebook is sued after stock plunge ‘shocked’ market
Jonathan Stempel – Reuters
Facebook Inc (FB.O) and its chief executive Mark Zuckerberg were sued on Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $120 billion of shareholder wealth.

Swiss financial firm to pay $10.25 million to avoid U.S. prosecution
Reuters Staff
The U.S. Justice Department on Friday said that Switzerland’s Mirelis Holding S.A., a financial and asset management firm, will pay $10.25 million to the United States in order to avoid prosecution for tax-related criminal offenses.

SEC Charges Recidivist In Stock Manipulation Scheme
The Securities and Exchange Commission today charged Howard M. Appel with manipulating the stocks of three microcap companies while on supervised release following his criminal conviction for a prior securities fraud.

No One Needs Paper Piles; SEC Should Get Smart About Broker Disclosure; Innovative ideas for disclosure can help investors be better informed
Jason Zweig – WSJ
Regulators are trying to make it less confusing to learn what you need to know about your stockbroker or financial adviser. But that effort could create new confusion of its own.

Barclays FX trader seeks to dismiss US charges over HP deal; Lawyers argue bank had no ‘fiduciary’ duty to US tech group on Autonomy acquisition
Martin Arnold – FT
The US head of foreign exchange trading at Barclays has asked a judge to dismiss criminal charges against him for allegedly defrauding Hewlett-Packard by front-running a £6bn currency deal linked to its takeover of UK software maker Autonomy.

UK watchdog proposes tougher rules for peer-to-peer lending
Huw Jones – Reuters
Britain’s markets watchdog proposed toughening up rules on Friday for loans offered by crowdfunding platforms to give consumers clear and accurate information and ensure they understand the risks.

NFA Proposes Enhanced Disclosure Requirements for Members Engaging in Virtual Currency Activities
The National Futures Association (“NFA”) recently proposed an interpretive notice updating disclosure requirements for its members engaged in virtual currency (i.e. cryptocurrency) activities. Self-Regulatory Organizations are increasingly interested in their members’ activities in the emerging virtual currency market, with the NFA’s notice following on the heels of a FINRA Regulatory Notice encouraging its members to self-report their virtual currency activities. (See here for detail on FINRA’s notice).

Investing and Trading

Big Oil Leaves Analysts Fuming About Being in the Dark on Refinery Outages
Kevin Crowley – Bloomberg
Profit misses show disconnect between companies and the market; Exxon, Shell, Chevron leaders all started on the refiner side
Darren Woods, Ben van Beurden and Mike Wirth, three of the world’s most powerful oil executives, forged their reputations by efficiently managing razor-thin margins at their companies’ refineries.

Facebook Dive Sparks Investor Calls to Loosen Zuckerberg’s Grip
Gerrit De Vynck and Emily Chasan – Bloomberg
Co-founder is CEO, chairman; special shares give total control; When Facebook soared, corporate governance took a back seat
Facebook Inc. has always had one absolute leader, cemented by a share class structure that maintained Mark Zuckerberg’s voting control even when he sold millions of shares. Some investors grumbled, but most were happy to stay quiet as the stock surged. This week’s plunge upended that dynamic, increasing calls for changes at the top.

U.S. says farmers could get cash aid by October but will not be made whole
Hugh Bronstein – Reuters
U.S. farmers could receive cash payments from a planned $12 billion aid package as soon as late September, U.S. Agriculture Secretary Sonny Perdue told Reuters on Saturday, warning that the program will not make tariff-hit farmers whole.

U.S. Almond Farmers Are Reeling From Chinese Tariffs; Prices for California almonds have fallen by more than 10% over past two months
Lucy Craymer – WSJ
U.S. almond farmers are getting crunched from all sides as they head into what is likely to be a record harvest season.

Citi sees ‘gathering market storm’ and warns against ‘complacency’; Bank questions equity market’s rebound from spring lows
Camilla Hodgson – FT
Analysts at Citigroup have warned that the recent stocks rally may be unjustified in the face of fundamentally unchanged geopolitical risks, and that investors should avoid becoming complacent.


BlackRock’s Rieder halved fund’s emerging market exposure
Trevor Hunnicutt – Reuters
Top BlackRock Inc (BLK.N) bond investor Rick Rieder halved exposure in recent months to a once-major bet in his portfolios on emerging markets on concerns including that the dollar could move higher, he told Reuters on Friday.

The top tech executive at $41 billion investment firm Fortress is leaving to start his own data-focused fund
Frank Chaparro – Business Insider
Hylton Socher, the chief technology and information officer of Fortress Investment Group, the $41 billion hedge fund, is leaving the fund to start his own venture, Business Insider has learned.

NXP Was a Popular Hedge-Fund Trade Before Its Qualcomm Deal Collapsed; It is not known if the funds changed their positions before the deal fell apart on Wednesday
Rachael Levy – WSJ
Qualcomm Inc. QCOM -1.40% wasn’t the only one betting on a purchase of Dutch chip maker NXP Semiconductors . NXPI 2.33% The potential deal attracted some of the hedge fund industry’s biggest names.

AmEx Raised Currency Prices on Business Clients Without Warning, Employees Say; The forex division’s commissions-driven culture was cited by current and former employees as fueling the practice
AnnaMaria Andriotis – WSJ
For more than a decade, American Express Co.’s AXP 1.32% foreign-exchange unit recruited business clients with offers of low currency-conversion rates before quietly raising their prices, according to people familiar with the matter.


Hong Kong prepares to usher in virtual banks, as 60 firms apply to be pioneers in financial revolution
Enoch Yiu – South China Morning Post
When SagaDigits, a HK$2 million (US$254,820) start-up, wanted to add post-merger shareholders and signatories to its corporate bank account, its chief executive approached a Hong Kong bank for help.

The $500 Billion Market the World Never Thought It Would See; After the financial crisis, China called for a new reserve currency to replace the U.S. dollar. Now it’s swimming in dollar-denominated bonds.
Chris Anstey and Narae Kim – Bloomberg
China used to rail against the outsize role of the U.S. dollar. But in a major turnaround, the world’s second-biggest economy has started embracing the currency of its larger rival.

South Africa’s Biggest Bank Heist Leaves Trail of Destruction
Sam Mkokeli and Renee Bonorchis – Bloomberg
Customers of VBS queue before dawn to recover their deposits; Directors have been accused of siphoning off 1.5 billion rand
South Africa’s biggest bank heist took place without a single shot being fired.

BoJ intervenes for third time as investors eye policy meeting; Speculation has intensified that central bank could tweak vast stimulus programme
Leo Lewis and Emma Dunkley – FT
The Bank of Japan intervened in the bond market on Monday for the third time in a week in a show of resolve to cap bond yields within a target range as traders bet the central bank might adjust its multi-trillion yen stimulus programme.


Europe’s development bank set to stick with London; EBRD mulls Canary Wharf move as it shuns other capitals in post-Brexit boost for UK
Judith Evans – FT
The European Bank for Reconstruction and Development is considering a move to Canary Wharf as it looks set to stick with London rather than move staff to the continent.

Deutsche Bank shifts half of euro clearing from London to Frankfurt; German lender’s move is latest Brexit blow as European rivals win City business
Olaf Storbeck – FT
Deutsche Bank has moved almost half its euro clearing activities from London to Frankfurt, in the latest sign of European cities winning financial business from the UK ahead of Brexit.

Boum! The Rebirth of Paris Has London Rattled; Office construction and foreign investor sentiment are edging ahead in the French capital.
Lionel Laurent – Bloomberg
Perception isn’t reality, but it matters. A new EY survey has ranked Paris above London as the most attractive destination for foreign investment, for the first time since the accounting firm started doing yearly reports on the subject.

It’s Not Rationing: Brexit Britain Plans to Stockpile Essentials; Britain is relying on a bit of wartime spirit in the event of it crashing out of the European Union. It could get messy.
Emma Ross-Thomas – Bloomberg
Brexit campaigners have long urged Prime Minister Theresa May’s government to do more to prepare for a no-deal departure from the European Union. They said it would bolster her negotiating position by making threats to walk out more credible.


The Train Robbery Capital of the World
Andrea Navarro and Nacha Cattan – Bloomberg
Raids start with Jesse James-era trick: piling rocks on tracks; Swarms of marauders then swoop in to cart off the loot
Head southeast out of Mexico City for about four hours or so and you will come upon the town of Acultzingo. It is an impoverished, dusty little place nestled up against the rugged peaks of the Sierra Madre. Most inhabitants work the land for a living. They grow corn and avocados and raise cattle and pigs. They also rob trains. Lots of trains. So many, in fact, that Acultzingo (pronounced ah-coolt-ZEEN-go) is not only the train robbery capital of Mexico but, arguably, of the world.

Gender should be on the agenda of business schools; With sexual harassment being outed, have we reached a tipping point toward gender inclusivity in b-schools? ask Sharon Mavin and Carole Elliott
London School of Economics and Political Science
As business and management educators we have a role to develop greater awareness and appreciation of diversity in society and our workplaces. Gender should be on the agenda of business schools. Gender-inclusive organisations and gender-inclusive management and leadership should be non-negotiable. Business schools have ethical, social and economic imperatives for integrating gender inclusivity into their cultures and curricula.

At Rich Kid Summer Camp, Big Banks Try to Hook Heirs for a Lifetime; Attendees at Next Gen functions hosted by the likes of UBS, Citi Private Bank, and Credit Suisse will one day rank among the world’s most sought-after clients.
Suzanne Woodley – Bloomberg
Fifty-two heirs to lavish fortunes luxuriate in sleek splendor at the Four Seasons. They sip designer lattes and speak the language of wealth. The talk is of money, noblesse oblige, technology, Formula One. At lunchtime, out comes chilled rosÈ, with a tasting led by Jon Bon Jovi’s son Jesse. Welcome to Camp Rich.

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Global Banks Warn of Market Chaos If Court Abolishes Libor

Global Banks Warn of Market Chaos If Court Abolishes Libor

First Read $24,451/$300,000 (8.2%) Larry Arnowitz and Mark Spanbroek ++++ Hits & Takes John Lothian & JLN Staff Vice President Mike Pence rebuffed the U.S. House of Representatives' call for implementing the 25th amendment of the U.S. Constitution, so the...

Wall Street Visionaries Provide Chilling Views on Next Big Risk

Wall Street Visionaries Provide Chilling Views on Next Big Risk

First Read $24,251/$300,000 (8.1%) Scott Parsons, Jeff Bernacchi ++++ Hits & Takes John Lothian & JLN Staff 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...

U.K. Regulator Warns Crypto Investors Risk Losing ‘All Their Money’

U.K. Regulator Warns Crypto Investors Risk Losing ‘All Their Money’

First Read $23,651/$300,000 (7.9%) Matt Wolfe ++++ JLN Launches The History of Financial Futures Episode: Game Changers, Part II The creation of Liffe, DTB and Eurex By John Lothian Productions Eleven years ago John Lothian News began work on a video series about the...

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