The Short Road From Libor’s Death to ‘Armageddon’; Bretton Woods at 75

Jul 10, 2019

First Read

Hits & Takes
JLN Staff

Newsweek is reporting that tax law changes made during the Trump presidency led to a $54 billion decline in charitable giving. “The president’s tax bill doubled the standard deduction, which gives tax-payers less incentive to itemize deductions like charitable donations.”~JJL

CFTC’s External Affairs Director, Erica Elliott Richardson, is set to leave the CFTC later this summer.~JJL

Some computer historians have reprogrammed a computer from NASA’s Apollo program to mine bitcoin. It takes the Apollo Guidance Computer 10 seconds to compute a single hash value.~JJL

The three largest robo-advisors by AUM are 1) Vanguard with $115 billion, 2) Schwab with $37 billion and 3) Betterment with $16 billion.~SD

In 2018, China’s wealthiest citizens lost a combined $530 billion on the back of stock market declines.~SD

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Equivalence and Other Brexit Concerns
JohnLothianNews.com
In April, the deadline for Brexit was extended to October 31, 2019. Unfortunately, there is still a lack of clarity on a number of key regulatory fronts. In this video, ION Markets Senior Regulatory Adviser Christian Voigt lays out the key concerns for financial markets.
Watch the video »

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tZERO Partners with Atari Movie to Tokenize First Major Motion Picture
Business Wire
tZERO announced today that it has entered a partnership with the producers of the upcoming movie, “Atari: Fistful of Quarters,” to tokenize the first major theatrical motion picture. This will be the first time the film industry leverages the power of blockchain technology, marking yet another milestone towards tZERO’s goal to revolutionizing capital markets. tZERO will develop the Bushnell token, sold by the film production and financing company, Vision Tree.
/bwnews.pr/2JnsMbG

*** I’m wondering if “Fistful of Quarters” will end up being a metaphor for the results.~SD

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CFTC and SEC Invite Public Comment on a Joint Proposal to Align Margin Requirements for Security Futures With Requirements for Similar Financial Products
SEC
The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) (together, the Commissions) have approved a joint proposal to align the minimum margin required on security futures with other similar financial products. The proposal would set the minimum margin requirement for security futures at 15 percent of the current market value of each security future.
bit.ly/2G3l58M

**** Sero Sed Serio. Late but in Earnest.~JJL

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British Ambassador to United States Darroch Resigns
Bloomberg News
Kim Darroch has decided to resign as British Ambassador to the United States, according to an emailed statement, Bloomberg News reports.
/bloom.bg/2YOghva

*****At the beginning of World War II, the ambassador to the United States and Canada was the same man, a certain Lord Lothian.~JJL

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Tuesday’s Top Three
Our top story on Tuesday was The Wall Street Journal’s How a Chicago Suburb Became a Center of ETFs, about little Wheaton, Ill., and the guys who started Powershares and now Innovator. Second was Bloomberg’s How Much Is Jeffrey Epstein Worth? How Did He Make His Money? And third was the New York Post’s How Deutsche Bank could turn into another Lehman Brothers

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Lead Stories

The Short Road From Libor’s Death to ‘Armageddon’; Precious few market participants have grasped the urgency of replacing Libor. A sea of lawsuits may ensue.
Mark Gilbert – Bloomberg
When law firm Linklaters decided to organize a seminar about the forthcoming demise of Libor last week, it planned to hold the event in its London auditorium, which seats about a hundred people. After more than 500 attendees signed up, it was forced to move to a larger venue.
/bloom.bg/2YKKaMO

Bretton Woods at 75: the threats to global co-operation; The system of economic governance established at the 1944 conference is being undermined by rising protectionism and nationalism
Martin Wolf – FT
“We have come to recognise that the wisest and most effective way to protect our national interests is through international co-operation ó that is to say, through united effort for the attainment of common goals.” US Treasury secretary Henry Morgenthau Jr, closing address at Bretton Woods Conference, July 22, 1944
/on.ft.com/2YIP10V

World’s Coffee Growers Seek to Set Minimum Price to Help Poor Farmers; Many growers are switching to other crops or abandoning plantations altogether amid lowest prices in over a decade
Jeffrey T. Lewis – WSJ
Can you make an OPEC-style cartel for coffee? Growers from Brazil, Colombia and more than two dozen other countries will meet in Brazil this week to talk about how to get more money to farmers suffering from the lowest prices on world markets in more than a decade.
/on.wsj.com/2YK33zB

Why investors must face up to Libor’s demise; Impending death of the benchmark poses complex problems
Subadra Rajappa – FT
When the death sentence for Libor was first announced, investors’ initial reaction was: “If it ain’t broke, don’t fix it.” But clearly the scandal-ridden benchmark is broken.
/on.ft.com/2YMdxhK

Suspect share trades preceded one in 10 UK takeovers last year; Activity that can indicate insider trading falls to lowest level since at least 2006
Caroline Binham – FT
Suspicious trades that can indicate insider trading occurred before 10 per cent of takeover announcements in the UK in 2018, the financial regulator has revealed.
/on.ft.com/2YGOPPU

SGX invests in research platform Smartkarma; Growing trend towards independent research leads SGX to make strategic investment in research platform provider Smartkarma.
Hayley McDowell – The Trade
Singapore Exchange (SGX) has made a strategic investment in research platform provider Smartkarma on the back of a growing trend towards self-dedicated and independent research.
bit.ly/2YIOM6l

Bond Connect drives record Chinese trading volumes at Tradeweb; Tradeweb set several new average daily trading records in June this year, with Chinese bond trading reaching $1.1 billion.
Hayley McDowell – The Trade
Chinese bond trading volumes reached record highs in June at Tradeweb, after it became the first firm to provide offshore investors with access to the Bond Connect trading link.
bit.ly/2YTwCip

Christine Lagarde shows how to deal with imposter syndrome; She may not be the best qualified candidate for ECB chief, but she is not there by chance
Anne-Sylvaine Chassany – FT
Once again, Christine Lagarde is breaking the glass ceiling ó and facing a chorus of doubters. They have valid concerns this time.
/on.ft.com/2YKzDkX

Why Fund Managers Are Scared of Sudden Withdrawals
John Gittelsohn and Nishant Kumar – Bloomberg
Why have markets been so alarmed over sudden withdrawals from a handful of European investment funds, like London-based H2O Asset Management? And why did their troubles lead the head of the Bank of England to warn that some funds were “built on lies”? The answer has to do with terms familiar to many in the financial world if arcane to many outsiders: “reach for yield,” “style drift” and “liquidity mismatch.”
/bloom.bg/2YUfY1K

Deutsche’s bankers were alienated from their jobs; The way in which Christian Sewing dismissed traders is a symptom of the industry’s lack of loyalty
John Gapper – FT
It is the mark of a strange employer to pay some of its employees millions each year but, when it decides to let them go, instruct them to leave the building rapidly, clutching their belongings.
/on.ft.com/2G5TJi3

The New Deutsche Bank Might Actually Be Better; But authorities should be prepared if it isn’t.
Editorial Board – Bloomberg
One of Europe’s largest financial institutions, Deutsche Bank AG, finally appears poised to do what the entire region’s banking sector needs to do: get rid of bad assets and increase its capacity to absorb losses.
/bloom.bg/2G7pdEu

FIA Calls For Derivatives Reporting Regulations To Be Relaxed In EU
Petar Markoski – Legalgamblingandthelaw.com
Derivatives trading has come under a lot of pressure as European regulators have come down hard on the market. The stringent regulations imposed by the EU has been difficult for traders who have not had much of a say till now.
bit.ly/2G5XrIv

Those Poor U.S. Bond Auctions Are Adding Up; Fading debt demand leads financial commentary. Plus Powell watch and tarnished sterling.
Robert Burgess – Bloomberg
By any credible measure, the U.S. has become less creditworthy under President Donald Trump. Total debt outstanding has risen by $2 trillion to $22 trillion since Trump took office at the start of 2017, and the federal budget deficit has expanded to 4.5% of the economy, the most since 2013. Larry Kudlow, who is Trump’s top economic adviser, said Tuesday that the expanding debt load is “quite manageable” and not “a huge problem right now.” Maybe not now, but the trend at the U.S. government’s bond auctions isn’t encouraging.
/bloom.bg/2G4SW0Y

Exchanges, OTC and Clearing

Nasdaq June 2019 Volumes, 2Q19 Estimated Revenue Capture and Listings Statistics
GlobeNewswire
Nasdaq today reported monthly volumes for June 2019, as well as quarterly volumes, number of listings and estimated revenue capture for the quarter ending June 30, 2019 on its investor relations website.
bit.ly/2YIPhNL

NYSE to help Israel create secondary tech stock exchange
Steven Scheer – Reuters
Israel and the New York Stock Exchange (NYSE) have begun talks on setting up a secondary stock exchange for high-tech companies in Israel that would compete with venture capital funds.
/reut.rs/2G5cna3

Slack and Spotify debuts tempt companies to cut out the middlemen; Successful ‘direct listings’ cast doubt over the traditional route of an IPO
Richard Henderson – FT
US stock-market listings have roared back to life after a slow start to the year, but a new way of offering shares to the public has left top executives and venture capitalists wondering about following suit.
/on.ft.com/2YKX1yJ

trueEX to shut swaps trading platform; Would-be disruptor will exit business on July 19, leaving swaps market in hands of incumbents
Robert Mackenzie Smith – Risk.net
Interest rate swaps trading platform trueEX will close in less than a fortnight, reinventing itself as a cryptocurrency derivatives exchange, according to a memo seen by Risk.net. The platform’s exit leaves the swaps market in the hands of incumbents: broker-run platforms continue to dominate interdealer trading of interest rate swaps, while dealer-to-client trading will take place on Bloomberg and Tradeweb.
bit.ly/2XFzZIf

LBMA, CME See Unprecedented Record Trading Volume In Gold Market In June
Neils Christensen – Kitco
June saw gold’s best price gains in three years as prices pushed above $1,400 for the first time in six years, and trade data shows that those gains were the result of unprecedented trading activity.
bit.ly/2G7nyyK

Nasdaq and LBMA Expand Access to Precious Metals Data
John D’Antona Jr. – Traders Magazine
Nasdaq (Nasdaq: NDAQ) and the LBMA today announced an expansion of data available to the precious metals market, providing greater transparency to this important industry. The LBMA-i Service has been expanded to include daily market information on platinum and palladium, joining existing daily data sets for gold and silver. All market participants now have access to data that provide comprehensive views of the precious metals market on a daily basis.
bit.ly/2LJcPOM

Egypt Looks Forward to Restructuring Taxes of Bourse Transactions
Asharq Al-Awsat – Aawsat.com
The Egyptian Parliament’s Budget and Planning Committee has approved fixing the stamp tax on the stock exchange transactions at 1.5 per thousand until the Ministry of Finance and Stock Exchange completes the restructuring of the tax system in the market, Chairman of the Egyptian Stock Exchange (EGX) Mohamed Farid told Reuters on Monday.
bit.ly/2G4SnnS

CCP for revisiting policies, documentation of wheat milling business
FP.BRecorder.com
The Competition Commission of Pakistan (CCP) has made a set of recommendations for enhancing productivity and competition in the wheat flour market, stressing the need for revisiting policies, documentation of wheat milling business, a well-functioning commodity exchange and implementation of an integrated agricultural policy. In this regard, the CCP has issued a competition assessment study of wheat flour industry here on Monday.
bit.ly/2G5bQoz

Fintech

Introducing the Trading Technologies Class of 2019 Interns
Alexandra Garza, Marketing Intern – Trading Technologies
Reflecting on the first half of the summer 2019 internship program at Trading Technologies, it’s hard to believe how quickly the weeks are moving by. In June, ten interns from schools across the country joined various departments at TT. Stepping off the elevator at 222 S. Riverside Plaza into the renowned company’s global headquarters, it would be understandable for a college student like me to feel somewhat intimidated.
bit.ly/2NEESRR

BIS Urges Regulators to Address Emergence of Large Technology Firms in Financial Markets
Steven Lofchie, Cadwalader – Tabb Forum
In its Annual Economic Report, BIS advised regulators to address the potential threat to financial stability, competition and data protection posed by the emerging big techs. According to the report, big tech’s superior access to data, superior usage of that data, greater size, larger customer base, and more diverse range of product offerings makes it the overwhelming long-term favorite in a battle with traditional financial service firms.
bit.ly/2XDihVC

Bezos-backed Remitly raises $135m for expansion in remittances; $1bn fintech closed round as Facebook took aim at its core business
Laura Noonan – FT
A fintech firm specialising in remittances and backed by the founder of Amazon, Jeff Bezos, has raised $135m at a valuation of nearly $1bn, just weeks after Facebook launched an assault on its core business.
/on.ft.com/2YGOAEu

Cryptocurrencies

Crypto Firm Diginex Reaches Deal to Go Public in the U.S.
Liana Baker – Bloomberg
Reverse merger poised to value Diginex at $276 million; One company executive used to work with Patriots QB Tom Brady
Diginex Ltd., a Hong Kong-based cryptocurrency and blockchain services company, is going public through a reverse merger with 8i Enterprises Acquisition Corp., people familiar with the matter said.
/bloom.bg/2YJS60Y

John McAfee Offers to Build Cuba’s First Cryptocurrency
Diana Aguilar – Coindesk
The cybersecurity expert and tech entrepreneur John McAfee recently declared his willingness to work with Cuba’s government as a crypto advisor. McAfee declared his intentions soon after Cuba’s government officials revealed their intention to develop a cryptocurrency to be used to avoid economic sanctions imposed by United States. According to Reuters, McAfee assured that the cryptocurrency project is not only viable, but rather simple. So simple, in fact, that he even offered his guidance pro bono.
bit.ly/2NKikzs

GoldGram to Deploy a Native GGC Token on R3’s Blockchain Platform Corda
GoldGram Press Release
GoldGram Pte. Ltd., creator of the new digital asset-backed token GGC GoldGramCoinÆ, and R3, the world’s leading developer of enterprise blockchain solutions for business, announced today that they have entered into a partnership program agreement to develop a native GGC GoldGramCoin token for R3’s Corda blockchain platform.
/prn.to/2S8I1YJ

The Cryptocurrency Rush Transforming Old Swiss Gold Mines
Michael Hardy – Wired
The small village of Gondo, high in the Alps on the Simplon Pass between Switzerland and Italy, traces its origins to the 17th-century gold mines of Kaspar Stockalper. It was a boom town, but when the mines closed in the late 1800s, the town went into a long decline; today it has around 50 full-time residents. But a few years ago Gondo began to attract a new kind of prospectorócryptocurrency miners attracted by the mountain town’s cool temperatures and cheap hydroelectric power.
bit.ly/2xC5xEc

Is Volatility In Cryptocurrency A Good Thing?
Christopher Swenor – Forbes
Cryptocurrency continues to climb, and the value of the cryptocurrency market is now $242.4 billion, up 91% from the beginning of this year, according to CoinMarketCap. Where these numbers will be at the time this article goes online is anyone’s guess, but I don’t think the trend will differ much. One thing many on both the pro or con sides of cryptocurrency agree on is that the space is volatile.
bit.ly/2Jy3QNz

Poloniex now allows fiat-to-crypto trading, credit card purchases
Frank Chaparro and Yogita Khatri – Coindesk
Cryptocurrency exchange Poloniex is rolling out new functionality for its user base as it attempts to resurrect its marketplace. The exchange announced Tuesday that it’ll now allow fiat-to-crypto trading, meaning customers can deposit and withdraw funds using bank accounts, as well as purchase crypto assets trading on Poloniex with debit and credit cards. Poloniex, founded in 2014 and acquired by Goldman Sachs-backed Circle for $400 million last year, said it is bringing fiat connectivity “for the first time.”
bit.ly/2Y2CkBn

Uber Subsidiary Grants Ethereum Startup Access To Entire American Fleet
Michael del Castillo – Forbes
Ride-sharing giant Uber has taken another step towards blockchain with news today that its healthcare subsidiary, Uber Health, has granted access of its entire American fleet to Solve.Care, a startup using the ethereum blockchain to connect nearly every aspect of the healthcare ecosystem via a shared ledger of transactions.
bit.ly/2XzQK7H

Fidelity International Exploring Blockchain by Cryptocurrency Testing
Teuta Franjkovic – Coinspeaker
Both the European and Asia branches of Fidelity International are exploring the perception of customers towards cryptocurrencies via a newly launched trading simulator specifically designed for digital assets. Fidelity International’s European and Asian branches have started to explore blockchain and the perception of customers towards cryptocurrencies. They have launched a new trading simulator specifically designed for digital assets.
bit.ly/2S8yxgj

Facebook Defends Libra Token Ahead of Congressional Scrutiny
Austin Weinstein – Bloomberg
Social network giant tells senators coin will help consumers; Lawmakers have set two hearings on company’s plans next week
Facebook Inc., facing fury from skeptical lawmakers, sought to mitigate concerns that have been raised about its proposed cryptocurrency, stating that the token’s purpose is to create a secure and low-cost way for consumers to move money around the world.
/bloom.bg/2YN4tJI

****More on Facebook via Forbes – Possible Regulatory And Transparency Consequences Of Libra On Cryptocurrency Markets – and Bloomberg – Facebook Has No Plans for Calibra or Cryptocurrency in India

Visa, Blockchain Capital, a16z Back $40 Million Series B Round for Crypto Custodian Anchorage
Daniel Palmer – Coindesk
Anchorage, a company providing crypto custody services for institutional investors, has just raised $40 million in a Series B funding round.
bit.ly/2G6PO4A

Coinbase may be planning to launch its own regulated insurance firm
The Block Crypto
Coinbase may be looking for an alternative to self-insuring. Cryptocurrency exchange Coinbase has reportedly been discussing the possibility of launching its own regulated insurance company with the assistance of insurance broker Aon, Coindesk writes.
bit.ly/2G4LyTs

Politics

Trump Can’t Block Critics From His Twitter Account, Appeals Court Rules; The decision may have broader implications for how the First Amendment applies to officials’ accounts in the social-media era.
Charlie Savage – NY Times
President Trump has been violating the Constitution by blocking people from following his Twitter account because they criticized or mocked him, a federal appeals court ruled on Tuesday. The ruling could have broader implications for how the First Amendment applies to the social-media era.
/nyti.ms/2YOmaZi

Donald Trump’s boom will prove to be hot air; His policy of regressive Keynesianism shows the Republicans have given up on fiscal responsibility
Martin Wolf – FT
“The economy has come roaring back under President Trump.” Thus reads a statement on the White House website. This claim needs sober evaluation.
/on.ft.com/2YOk9fG

Tom Steyer Mastered Markets and Now He Wants to Topple Trump
Edward Robinson
Steyer grew Farallon into $20 billion fund before activism; He says he’ll spend $100 million of fortune on White House run
Tom Steyer has the sort of pedigree that’s been successful in American politics for generations. The son of a lawyer, he was raised on Manhattan’s Upper East Side, attended boarding schools and then Yale and Stanford universities. He learned merger arbitrage at Goldman Sachs Group Inc. under the tutelage of future U.S. Treasury Secretary Robert Rubin, before starting his own hedge fund.
/bloom.bg/2YKQunz

Regulation

Spot Month Limits: Necessary, But Not Sufficient, to Prevent Market Power Manipulation
Streetwise Professor
In my recent post on position limits, I suggested that at most spot month limits are justified as a means of constraining market power manipulation. It is important to note, however, that setting spot month limits at levels that approximate stocks in deliverable position may not be sufficient to prevent the exercise of market power during the delivery period, with the resultant deleterious effects on prices.
bit.ly/2NSUnGi

The Story McKinsey Didn’t Want Written; Tied to the global consulting giant is a massive investment fund. Based on its reaction to this story, McKinsey likely doesn’t want you reading much about it.
Michelle Celarier – Institutional Investor
Fraud ran aplenty in 2008, and as frauds go New Stream Secured Capital was fairly quotidian.
As the Securities and Exchange Commission would later assert, the Connecticut-based “hedge fund fraud . . . cost investors millions of dollars when the hedge fund failed in the fall of 2008, after the defendants perpetrated a scheme to mislead investors . . . to keep the hedge fund afloat and their management fees flowing.” New Stream Capital managing partner David Bryson would be sentenced in 2015 to 33 months in prison, but, with Bernie Madoff taking the bulk of financial fraud media attention, the firm by and large avoided public scrutiny.
bit.ly/2JmZKch

Ex-hedgie Mark Nordlicht and associate found guilty of fraud
Kevin Dugan – NY Post
An alleged Ponzi schemer ó whose trial turned into a circus when he got caught on video trying to physically attack a federal prosecutor ó was found guilty of three counts of fraud on Tuesday. Mark Nordlicht in May had lunged at Assistant US Attorney Lauren Elbert during a court break, and was trying “for over 10 seconds to pursue the prosecutor while his wife almost pulled his suit jacket off while trying to restrain him,” according to court papers.
/nyp.st/2YOmUh2

FINRA File Transfer Service Outage
FINRA
FINRA File Transfer service, (filetransfer.finra.org), experienced technical issues affecting some users intermittently between 7/8/2019 10 PM and 7/9/2019 7 AM. Some connections were going through fine but others were challenged with a new server Host key. If you have any questions, please contact FINRA Helpdesk.
bit.ly/2G6MWok

Financial Capability Study, Part I: Does a Rising Tide Lift All Boats?
FINRA
The U.S. economy is improving, but not all Americans are benefiting equally. Many Americans are failing to save money, struggling with student loan debt and facing decreasing financial literacy, according to the new FINRA Foundation Financial Capability Study.
bit.ly/2G7GBZR

SEC seeks blockchain data provider to monitor risk, improve compliance, and inform policy
UK FCA
The U.S. Securities and Exchange Commission (SEC) is getting ever more serious about blockchain data. While many of the world’s governments and politicians focus on Facebook’s recently introduced Libra and data sharing among virtual asset providers, the SEC is seeking more data on public blockchains.
bit.ly/2G2IGGs

FINRA Requests Comment on a Proposal to Publish ATS Volume Data for Corporate Bonds and Agency Debt Securities on FINRA’s Website
FINRA
FINRA requests comment on a proposal to expand the alternative trading system (ATS) volume data that it publishes on its website to include information on transactions in corporate bonds and agency debt securities that occur within an ATS and are reported to FINRA’s Trade Reporting and Compliance Engine (TRACE).
bit.ly/2G6GkXf

Agencies Adopt Final Rule to Exclude Community Banks from the Volcker Rule
SEC
Five federal financial regulatory agencies announced on Tuesday that they adopted a final rule to exclude community banks from the Volcker Rule, consistent with the Economic Growth, Regulatory Relief, and Consumer Protection Act.
bit.ly/2G5Cduu

CFTC Staff Issues Advisory Clarifying $50 Million Initial Margin Threshold and Documentation Requirements
CFTC
The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued a Staff Advisory noting that CFTC’s uncleared swap margin rules do not require documentation governing the posting, collection and custody of initial margin until the initial margin threshold amount exceeds $50 million. The Advisory is issued in furtherance of the March 2019 statement by the Basel Committee on Banking Supervision (BCBS) and the International Organization of Securities Commissions (IOSCO) concerning initial margin implementation.
bit.ly/2G5SVd1

Statement of Commissioner Dan M. Berkovitz Regarding the Proposed Amendments for Customer Margin Rules for Security Futures
CFTC
I support issuing the joint notice of proposed rulemaking (“Proposal”) with the Securities Exchange Commission (“SEC”) (collectively with the CFTC, “Commissions”) to amend the security futures margin requirements.
bit.ly/2G98LDY

Erica Elliott Richardson, External Affairs Director, To Leave CFTC
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that Erica Elliott Richardson, Director of the CFTC’s Office of External Affairs (OEA), will leave the agency later this summer.
bit.ly/2G7mDyi

Senior Managers and Certification Regime: Finalising FCA rules
UK FCA
We have been working closely with HM Treasury on preparation of the Commencement Order needed to enable the FCA to publish final rules on the extension of the Senior Managers and Certification Regime (SM&CR).
bit.ly/2G5UPdM

Unauthorised firm and directors to pay restitution to consumers
UK FCA
The High Court has consented to an order by which Samuel Golding, Shantelle Golding, Digital Wealth Limited and Outsourcing Express Limited will pay funds held by them to the Financial Conduct Authority (FCA) for distribution to investors. The funds were raised by the defendants in unauthorised investment schemes operated by them.
bit.ly/2G7Hbqv

Investing and Trading

Best Execution: Unit of Measurement
Quantitative Brokers
We are often asked why our Transaction Cost Analysis (TCA) is primarily based in ticks (minimum price increments) as opposed to basis points (bps). For those experienced in equities, they’ll be familiar with bps as the conventional unit for equities TCA. When we were initially building QB, we first looked for an external TCA provider in the futures space but could not find one, promptly realizing that we had to build one to showcase our performance and assist our clients.
bit.ly/2JqYIMt

Grant Thornton and PwC criticised for substandard audits; FRC findings add to cloud over sector after Patisserie Valerie and Carillion scandals
Cat Rutter Pooley – FT
PwC and Grant Thornton have been singled out for criticism by their regulator after between a third and half of their largest audits fell below its expected standard, adding to the cloud hanging over the industry after scandals.
/on.ft.com/2YLlROL

Default Isn’t a Bad Word. Recovering $0, That’s Scary; Camsing International creditors face the possibility of getting wiped out. That’s yet another reason to be wary of China’s private firms.
Shuli Ren – Bloomberg
Before being detained by police in Shanghai, Lo Ching was lauded as the new-age Hua Mulan, the legendary female Chinese warrior. Now the downfall of Lo, chairman of a Hong Kong-listed conglomerate, has become a parable of the dangers of investing in China.
/bloom.bg/2G59W7p

Institutions

CIBC Agrees to Acquire Milwaukee Boutique Firm Cleary Gull
Doug Alexander – Bloomberg
Takeover adds middle-market investment banking to CIBC roster; CIBC’s Dubczak sees ‘nice overlay’ with existing coverage
Canadian Imperial Bank of Commerce agreed to acquire Milwaukee-based boutique investment banking firm Cleary Gull Inc. to further expand its deal-making capabilities in the U.S.
Cleary Gull, a firm founded in 1987, specializes in mid-sized mergers and acquisitions, private capital placement and debt advisory across the U.S., Toronto-based CIBC said Tuesday in a statement. Terms of the deal, which is expected to close in the fourth quarter, weren’t disclosed.
/bloom.bg/2NIzCg6

H2O blames ‘unfair’ media for EUR8bn fund outflows; Natixis-owned asset manager says ‘rampage’ stemmed from questions over liquidity
Laurence Fletcher – FT
H2O Asset Management says it has seen EUR8bn of investor outflows from some of its funds, blaming “deeply unfair” media interest in its portfolio of illiquid bonds for sparking a “rampage”.
/on.ft.com/2YLn6gT

Neil Woodford investors blocked from leaving Hargreaves platform; Chief of rival says it is ‘unacceptable’ that customers are unable to shift
Owen Walker- FT
Hargreaves Lansdown customers locked in Neil Woodford’s stricken Equity Income fund have been blocked from transferring their holdings to other investment platform providers, according to evidence submitted to the UK government inquiry into the scandal.
/on.ft.com/2YKm2Kf

Size matters less than skill in asset management’s new world; The scales are tipping: some colossi will survive but the smarter money will flow elsewhere
Charlie Ruffel – FT
It is hard to gain a clear view into a business roiled by kinetic change. Asset management is such a business. We discern differences but not yet outcomes, although the outlines are coming into focus.
/on.ft.com/2YFEp33

Critics round on Deutsche Bank for generous golden parachutes; German lender paid EUR52m in severance to departing senior executives in 14 months
Olaf Storbeck – FT
Deutsche Bank is coming under fire for the lavish golden parachutes it has paid out to top executives who left during a period of management turmoil over the past year.
/on.ft.com/2YIP5hb

GAM Rises as Investors See Impact of Haywood Scandal Easing
Patrick Winters and Ross Larsen – Bloomberg
Assets under management increase this year after plunge in 2018; Firm expects to sell off funds connected to Haywood by July 15
GAM Holding AG shares jumped after the company said assets rose and it’s on track to liquidate funds tied to ousted bond manager Tim Haywood, clearing the way for a possible sale of the company.
/bloom.bg/2YNIEtA

Deutsche Bank Lured Staff to Florida. What Comes Next Is Secret
Jonathan Levin – Bloomberg
Firm persuaded some New York staff to transfer to Jacksonville; The company isn’t commenting on how deep job cuts may go there
They live in rows of tidy townhouses, setting out early every weekday for a short walk to Deutsche Bank AG’s lush corporate campus. For the closest, it’s just across the street.
/bloom.bg/2YH0LBm

China Wants Its Own Goldman Sachs. It Has a Big Headache Instead
Cathy Chan – Bloomberg
Wave of resignations could derail CLSA’s global ambitions; Culture clash reached tipping point six years after takeover
The man tasked with building a Goldman Sachs for Communist China was done playing nice.
/bloom.bg/2YLjxav

UBS creates team to promote private capital markets deals
Reuters
UBS Group (UBSG.S) has created a private capital markets team to help wealth management clients invest in the burgeoning sector, the Swiss bank said on Wednesday.
/reut.rs/2G5ZH2y

Regions

Mexican Finance Minister Resigns After Clashes With President; Peso Slides; Surprise departure deepens doubts among investors over economic policy under leftist AndrÈs Manuel LÛpez Obrador
Anthony Harrup and Juan Montes – WSJ
Finance Minister Carlos Urz˙a resigned, a surprise departure that deepened doubts among investors over economic policy under President AndrÈs Manuel LÛpez Obrador, including fears he may eventually undermine Mexico’s financial stability.
/on.wsj.com/2YOlnri

Germany sells new Bund with no coupon for first time since 2016; Latest debt sale comes amid vigorous demand for sovereign debt
Adam Samson – FT
Germany has sold new Bunds that do not provide investors with regular interest payments for the first time since the aftermath of the 2016 Brexit vote, highlighting the scale of the rally in Europe’s fixed income market.
/on.ft.com/2YMdK4w

‘Fat finger’ error sends airline stock on wild ride; Collapse in stock of Manila-based Cebu Air is latest in long line of trading glitches
Daniel Shane – FT
Shares in one of the Philippines’ largest airlines plunged by almost 40 per cent before recovering almost all of their value, prompting talk among brokers of a ‘fat finger’ error.
/on.ft.com/2YKzX39

UK £2bn power grid auction derailed by Labour party pledge; Final bids for Electricity North West were due in June but process hit by nationalisation plan
Arash Massoudi and Nathalie Thomas – FT
A £2bn auction for Electricity North West has been derailed by the Labour party’s plan to nationalise UK energy networks if it wins power.
/on.ft.com/2YKRisB

Singapore Convicts Front-Runners for Insider Trading in First Case
Bloomberg News
Singapore’s main financial regulator said it’s just seen the first-ever convictions for front-running prosecuted as an insider-trading offense in the city-state, one the the world’s most sophisticated financial hubs.
/bloom.bg/2YUeLYg

SNB Study Finds Evidence of 1,000-Franc Banknote Hoarding
Catherine Bosley – Bloomberg
The majority of Switzerland’s high-denomination bills are effectively parked in vaults or stuffed under mattresses, according to a Swiss National Bank working paper.
/bloom.bg/2YKy0Un

Turkey Is Heading for Economic Collapse, Ashmore Says
Selcuk Gokoluk – Bloomberg
President Recep Tayyip Erdogan risks pushing Turkey’s economy into an economic collapse similar to those seen in Latin America under populist regimes, according to Ashmore Group Plc.
/bloom.bg/2YQmZRy

Uber Drivers Say Central London Levy Puts Them Out of Business
Kaye Wiggins – Bloomberg
Union say mayor’s new congestion fee amounts to discrimination; Lawsuit is latest to expose rivalry with traditional taxis
London Mayor Sadiq Khan’s decision to charge Uber Technologies Inc. drivers to operate in the city center amounts to racial discrimination and puts some out of business, lawyers for the drivers said Wednesday in court, in the latest stage of a long-running battle between those working for the ride-hailing firm and traditional cabbies.
/bloom.bg/2YNIiDg

Norway wealth fund backs ECB plan for pan-European debt securities platform
Reuters
Norway’s $1 trillion wealth fund, the world’s largest, has become the first major investor to publicly back a proposal by the European Central Bank to create a harmonised European issuance platform for debt securities.
/reut.rs/2G471vw

Brexit

No-deal Brexit poses ‘real risk’ of break-up of United Kingdom, cabinet told; Challenge of holding Union’s four nations together would grow, ministers warned
George Parker – FT
There is a “real risk” of the United Kingdom breaking up, with all four nations going their own way in the event of a no-deal Brexit, Theresa May’s cabinet has been warned.
/on.ft.com/2YKCRVF

Major Threatens to Sue If Parliament Suspended: Brexit Update
Joe Mayes, Kitty Donaldson and Alex Morales – Bloomberg
Former Prime Minister John Major threatened to seek a judicial review if the next premier suspends Parliament to force through a no-deal Brexit — something Boris Johnson, the front-runner to succeed Theresa May, has refused to rule out.
/bloom.bg/2YOgTRu

Miscellaneous

The Chicago Defender, Legendary Black Newspaper, Prints Last Copy
Monica Davey and John Eligon – NY Times
Decade by decade, the newspaper told the story of black life in America. It took note of births and deaths, of graduations and weddings, of everything in between. Through eras of angst, its reporters dug into painful, dangerous stories, relaying grim details of lynchings, clashes over school integration, and of the shootings of black men by white police officers. Among a long list of distinguished bylines: Langston Hughes and Gwendolyn Brooks.
/nyti.ms/2Jpf3kF

LinkedIn and the art of boastful self-promotion; The network is home to entertaining posts that expose insecurities and tribalism
Rhymer Rigby – FT
Harry Barnes runs a Twitter account called The State of LinkedIn with more than 100,000 followers. On it, he tweets a curated selection of the most egotistical, self-unaware, jargon-ridden posts from LinkedIn members.
/on.ft.com/2YUhAbO

Financier in sex abuse case went from math whiz to titan
Michael R. Sisak an dJim Mustian – AP
He has rubbed elbows with a prince and flown a former president on his private jet. He amassed a fortune that includes a 100-acre island in the Caribbean and one of the biggest mansions in New York.
bit.ly/2G6R5bS

Epstein story shows investigative journalism is thriving
Dave Bauder – Associated Press
The Miami Herald’s stories on sex trafficking charges against billionaire financier Jeffrey Epstein illustrate a counter-intuitive trend: Investigative journalism is thriving as the news media industry struggles.
/yhoo.it/2G5Mg2F

John Lothian Newsletter

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