Traders Fear Labour’s $11 Billion Tax Will Crush London Market; Schwab bulks up for fee war with $26bn TD Ameritrade deal

Nov 25, 2019

First Read

Hits & Takes
By JLN Staff

Ray Dalio, refuting a story from Friday, says Bridgewater has no net short bet against stocks. For the record, no hedge fund ever has a net short bet. That is not what they do. Hedge funds hedge, in some way.~JJL

Cboe has a nice message with graphics in LinkedIn celebrating Carol Kennedy and Arianne Criqui for being honored for excellence in their fields at the 5th Annual Markets Media Women in Finance awards!~JJL

Bob Fitzsimmons of Wedbush shared this on LinkedIn about our videos of Gary Sagui and Bill Dudley: “Bill Dudley and Gary Sagui have done much more than teach a younger generation to trade. They were true mentors, in every sense of the word, to many of us. They taught us about integrity, loyalty, honesty, and hard work. They also showed us how to have fun and laugh along the way. As you can see from their interviews, although both took their work seriously, they never viewed themselves as being better than others. They were also never afraid to ask the “dumb question” – which was an invaluable lesson for me.”~JJL

Last week ADMIS employees collected 941 pounds of shelf staple food items to donate to the Greater Chicago Food Depository, according to a post on LinkedIn.~JJL

Charlotte Croswell was ranked number 26th in the list of the top 100 influencers of the women in finance.~JJL

Cutting through the BS, Paul Tudor Jones gets it, sharing that public companies not paying living wages is a ‘tax on society’.~JJL

The U.S. is set to post the smallest agricultural trade surplus since 2006 – $5.2 billion in the fiscal year that ended in September – as more expensive imports shrink the difference between the value of exports and inbound shipments, Bloomberg reported. ~SR

Friday was Francine McKenna’s last day at MarketWatch. She is staying in Washington, DC and will teach.~JJL


Tariffs, Transitions, and Stirs: Wedbush’s Bob Fitzsimmons at FIA Expo

Bob Fitzsimmons, executive VP at Wedbush Securities, spoke with JLN at FIA Expo 2019 about the transition away from Libor to Sonia, SOFR and Ameribor, the potential for bitcoin contracts, FCM consolidation, and the impact of tariffs on the agricultural community.

Watch the video »


The Spread: The CEM Gets SA-CC’d

This week on The Spread: the CEM is succeeded by the SA-CCR after a final ruling by the Fed, the FDIC, and the Office of the Comptroller of the Currency (the other OCC); MIAX launches SPIKES futures.

Watch the video »


Request for Public Representative Nominations for NFA’s Board of Directors
The terms of five of NFA’s current Public Representatives—Ronald H. Filler, Arthur W. Hahn, Jim Marshall, Mary M. McDonnell, and Michael H. Moskow—will expire at the Board of Directors’ (Board) regular Annual Meeting on February 20, 2020. NFA is asking for nominations to fill the five Public Representative vacancies. NFA’s Articles of Incorporation (Articles) permit Public Representatives to be nominated by either NFA Members or non-Members.

*****Let’s hope for little drama around this.~JJL


Michael Bloomberg Joins Crowded 2020 Democratic Field
Mark Niquette – Bloomberg
Former New York mayor already spending record amounts on ads; Bloomberg to bypass early contests in Iowa, New Hampshire
Former New York Mayor Michael Bloomberg announced he is running for the Democratic presidential nomination, offering his own mix of moderate policy stances and experience in business, government and philanthropy as the way to beat President Donald Trump.

******Get your “I LIKE MIKE” buttons now.~JJL


The Secret Life and Strange Death of Quadriga Founder Gerald Cotten | Vanity Fair
Nathaniel Rich – Vanity Fair
When Canadian blockchain whiz Gerald Cotten died unexpectedly last year, hundreds of millions of dollars in investor funds vanished into the crypto ether. But when the banks, the law, and the forces of Reddit tried to track down the cash, it turned out the young mogul may not have been who he purported to be.

*****Strange and stranger. Jeff Daniels will be starring in the movie for sure.~JJL


Uber Loses London License Over Concerns for Rider Safety
Nate Lanxon – Bloomberg
Ride-hailing firm can continue to operate during an appeal; Ruling is a blow to Uber’s 45,000 drivers in the U.K. capital
Uber Technologies Inc. lost its license in London for the second time in less than three years, putting one of its biggest markets outside of the U.S. at risk after the transport regulator said it failed to address safety concerns.

****This is a real loss to the living conditions in London.~JJL


Leader of the (Blockchain) Pack; Audit Trail for Block Trades; Cyber Risk
Bridging the Week – Gary DeWaal
The chairman of the Commodity Futures Trading Commission said it’s important for the United States to lead in blockchain technology and heralded the agency’s own principles-based approach to regulation as a model that could be followed to achieve leadership. Separately, a futures commission merchant operating as a voice broker was sanctioned by the CFTC for numerous purported regulatory lapses in connection with its execution of block trades and audit trails prepared and maintained regarding such transactions.


Friday’s Top Three
Our most read story on Friday was Entertainment Weekly’s SNL cowbell sketch ‘ruined’ Christopher Walken’s life, says Will Ferrell. Apparently everyone feels really bad for Christopher Walken. Second was Forbes’ After Conviction On ‘Spoofing,’ Defendant Questions His Previous Counsel’s Representation. And third was The
Financial Times How quants and QE shook the cult of the stockpicker


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Lead Stories

Traders Fear Labour’s $11 Billion Tax Will Crush London Market
Viren Vaghela and Silla Brush – Bloomberg
Traders in London say the Labour Party’s proposal to introduce a broad financial transaction tax risks paralyzing trading activity in the city. The opposition party led by Jeremy Corbyn announced a plan Thursday to raise as much as 8.8 billion pounds ($11.4 billion) a year from levies on trades such as derivatives or large volumes of currency, where London currently dominates the market.

Schwab bulks up for fee war with $26bn TD Ameritrade deal; The combination will create a US online broking powerhouse that may draw regulatory scrutiny
Eric Platt and Myles McCormick – FT
Charles Schwab has agreed to buy its rival online brokerage TD Ameritrade for $26bn, as a savage price war forces the industry to consolidate.

Nasdaq-powered DX.Exchange is going through bankruptcy proceedings, just weeks after shutting down
Yogita Khatri – The Block
Crypto platform DX.Exchange is reportedly going through bankruptcy proceedings; 78 current and former employees of the firm behind DX.Exchange have filed a petition to dissolve the exchange; Several suppliers have also sued the exchange
Less than a month after shutting down, cryptocurrency trading platform DX.Exchange, is reportedly going through bankruptcy proceedings.

Negative Rates Can Do a Lot More Damage Yet: Nordic Warning
Kati Pohjanpalo – Bloomberg
$55 billion Ilmarinen fund says we’re just at start of cycle; Negative rates are now the norm across most of Nordic region
After half a decade of negative interest rates, one of the biggest Nordic pension funds is wondering whether this is just the beginning.

Russia’s Largest Bitcoin Mine Turns Water Into Cash; Power-hungry crypto mining has found an ideal home in the city of Bratsk, where the weather is cold and the electricity is cheap.
Yuliya Fedorinova, Gem Atkinson – Bloomberg
Bitriver, the largest data center in the former Soviet Union, was opened just a year ago, but has already won clients from all over the world, including the U.S., Japan and China. Most of them mine bitcoins.

Woodford scandal casts long shadow over investment sector; Funds have a role to help manage risk, not create risk for individuals or the economy
Chris Cummings – FT
The UK investment management industry’s reputation has been tested like never before in 2019. The suspension and now imminent closure of one high profile fund has cast a long shadow and led to a broader discussion about the role of fund managers, and how companies look after the savings of people across the country.

Investment Advisers Fear Losing Out in Schwab-TD Ameritrade Deal; Takeover plan vexes those who park their clients’ money with big online brokerages
Alexander Osipovich – WSJ
Wall Street has roared its approval for Charles Schwab Corp.’s plan to buy TD Ameritrade Holding Corp. , but the proposed deal isn’t sitting well with one key group: the financial advisers who park their clients’ money with the big online brokerages.

Canada racks up 400-tonne cannabis mountain after production binge; Pot price falls and inventories grow as legal and illicit markets compete for customers
Gregory Meyer – FT
Warehouses in Canada are piled high with unsold marijuana after cannabis producers overestimated demand for the drug, which was legalised a year ago.

European banks slash $280bn from main US businesses; Deutsche Bank leads trend of moving assets into lightly policed branches
Laura Noonan – FT
Europe’s four biggest investment banks cut $280bn of assets from their main US holding companies in the past three years as they withdrew from Wall Street and moved business away from the glare of regulators.

What is a Market Maker and Why Do We Need Them?
Rachel Cautero – Yahoo Finance
A market maker is typically a large bank or institution. They help ensure the liquidity of a market by offering to both buy and sell securities. As an investor, there are some things you need to know about market makers. Here’s how they work, why they’re important to the market, and how they use supply and demand.

How Russia-China Gas Pipeline Changes Energy Calculus
Olga Tanas, Anna Shiryaevskaya, and Dan Murtaugh – Bloomberg
Russia is pivoting its energy business to the east. The world’s largest exporter of natural gas has built an enormous pipeline running from Siberia to the Chinese border to feed China’s insatiable energy appetite. The new conduit, called the Power of Siberia, is part of a plan by Russian President Vladimir Putin to reduce his country’s dependence on gas markets in Europe and tap into the fast-growing economies of Asia. For China, whose domestic energy production can’t keep up with demand, the pipeline offers a vital new source of supply.

We’re Sensing Some Negativity About Sub-Zero Rates; The evidence is growing that they make it harder for financial markets and modern economies to operate.
John Authers – Bloomberg
What is so bad about negative interest rates? We know that President Donald Trump would like to see them in the U.S., and is angry with the Federal Reserve for not cutting rates below zero. Plenty of other central banks have of course done so.

U.S.-based chip-tech group moving to Switzerland over trade curb fears
Stephen Nellis, Alexandra Alper – Reuters
A U.S.-based foundation overseeing promising semiconductor technology developed with Pentagon support will soon move to Switzerland after several of the group’s foreign members raised concerns about potential U.S. trade curbs.

Goldman Sachs unveils internal campaign on use of gender identity pronouns
Goldman Sachs Group Inc (GS.N) said on Friday it has launched an internal campaign to promote awareness about pronouns and how employees self-identify.

Exchanges, OTC and Clearing

Deutsche Börse 360T completes first trade in streaming NDFs; FX marketplace 360T has launched streaming NDFs in response to market demand for an alternative hedging venue.
Hayley McDowell – The Trade
Deutsche Börse’s FX business and platform 360T has launched streaming non-deliverable forwards (NDFs) after recently completing the first trade.

Euronext announces its financial calendar for 2020
Euronext, the leading pan-European exchange in the Eurozone, today announced its financial calendar for 2020, set as follows:

Trading hours at Eurex Exchange on 30 December 2019
This year, Monday, 30 December 2019 will be the last exchange trading day at Eurex Exchange. This is also the last day of the year on which exercises can be done.

Persistently high demand for gold: Xetra-Gold exceeds its 200-ton mark for gold for the first time; Growth of just under 19 tonnes of gold since the beginning of the year / Europe’s largest physical-backed gold security
Deutsche Börse Group
The gold holdings of the Xetra-Gold exchange-traded bearer debenture (ISIN: DE000A0S9GB0) exceeded the 200-ton mark for the first time today. Currently, 200,076 tons of gold are held in the German central safe deposit for securities. That’s a plus of almost 19 tons since the beginning of the year. Xetra-Gold is thus the leading European gold security, in which the precious metal is also physically deposited.

DekaBank selects Clearstream for European post-trade services
Deutsche Börse Group
DekaBank relies on Clearstream’s investor CSD model for European settlement, custody and asset servicing; Austria is DekaBank’s first market to be processed via Clearstream’s investor CSD model; The Eurobonds market, Belgium, the Netherlands, France, Italy, Spain and other European markets are expected to follow in 2020/21.
DekaBank, the securities house of the Sparkassen-Finanzgruppe, selects Clearstream, the post-trade service provider of Deutsche Börse Group, to provide post-trade services such as liquidation, custody and asset servicing for its activities in the European securities market.

ICBC, CCDC and SGX partner to promote ChinaBond-ICBC Bond Indices to global investors
ICBC and CCDC have launched ChinaBond-ICBC RMB Bond Indices for institutional investors investing in RMB bonds in China; SGX will be the first exchange to display these bond indices outside of China; The three parties will explore the feasibility of developing index fund products using the Bond Indices as the underlying, to be listed on SGX
Industrial and Commercial Bank of China (ICBC), China Central Depository & Clearing Co., Ltd (CCDC) and Singapore Exchange Limited (SGX) have signed a memorandum of understanding (MOU) to jointly promote the newly-launched suite of ChinaBond-ICBC RMB Bond Indices – comprising ChinaBond ICBC Key Terms Treasury Bond Index, ChinaBond ICBC 1-5 year Key Terms Policy Bank Bond Index and ChinaBond ICBC 3-5 year Credit Bond Index (Bond Indices) – which will provide another avenue for international investors to tap on investment opportunities in China, while giving impetus to China’s efforts to internationalise the RMB.

SGX bags excellence award for 2nd consecutive year
Vivienne Tay – BusinessTimes
THE Singapore Exchange (SGX) on Monday said it has won an “Exchange of the Year” award for excellence for the second year running. Given out by Regulation Asia, which tracks and analyses financial regulation across Asia, the award recognised SGX for its targeted approach to market regulation, and for demonstrating a commitment to moving to a ‘community’ approach.

IG Group to leverage U.S. beachhead with major reorg of U.S. unit
Valentina Kirilova –
UK online trading leader IG Group Holdings plc (LON:IGG) is barely into its new fiscal year, and it is already making major shifts in its U.S. executive suite, as it rolls out its new strategy for leveraging its hard-won re-entry into the U.S. marketplace. The London-based giant in the spreadbetting and CFD trading arena, had once been a major player in the state-side scene, but had exited in 2011. When an ESMA regulatory clampdown threatened to curtail revenues, the firm applied for new licenses and finally opened an office in Chicago in January. Ian Peacock will now lead a newly formed division to expand IG’s revenue base going forward.

Nodal Exchange And IncubEx To Launch Three New REC Futures
Nodal Exchange and IncubEx announced today they will launch three new Renewable Energy Certificate (REC) futures on December 3, 2019, pending regulatory review.


AIA Rises as Incoming CEO Seen Boosting China Growth, Fintech
Bei Hu – Bloomberg
AIA Group Ltd. shares rose in Hong Kong trading as investors welcomed the appointment of a new chief executive officer, who is seen as well-placed to lead a faster expansion in China. The stock jumped as much as 3.8% in early trading Monday, after industry veteran Lee Yuan Siong was named the next CEO, replacing Ng Keng Hooi. Lee joins from rival Ping An Insurance (Group) Co., where he was co-CEO and chief insurance business officer.

Top Fintech Trends Transforming the Financial Landscape
Quantzig, a global data analytics and advisory firm, that delivers actionable analytics solutions to resolve complex business problems has announced the completion of its latest article that offers comprehensive insights on the Fintech trends transforming the financial sector.

Fintech Unicorn Transferwise Adds Malaysia to its Growing List of Countries Where its Service is Available
JD Alois – Crowdfund Insider
Transferwise, a breakout Fintech hit, has added Malaysia to its list of countries where it offers its currency transfer services. According to a blog post, last year, Malaysia’s international money transfers grew 23.3%, to RM 41 billion (USD $9.9 billion). But most of these transfers are using traditional banks which tend to gouge customers by charging hidden fees and not using the “real exchange rate.” This is Transferwise’s fourth Asian country where it has launched it services. Alongside Malaysia, Transferwise is available in Hong Kong, Japan and Singapore.


CFTC Jurisdiction Over Cryptocurrency – Implications for Industry Participants
On October 10, 2019, CFTC Chairman Heath Tarbert commented on Ether’s status as a commodity: “We’ve been very clear on bitcoin: bitcoin is a commodity under the Commodity Exchange Act. We haven’t said anything about Ether – until now. It is my view as Chairman of the CFTC that Ether is a commodity, and therefore it will be regulated under the CEA. And my guess is that you will see, in the near future, Ether-related futures contracts and other derivatives potentially traded … It’s my conclusion as Chairman of the CFTC that Ether is a commodity and therefore would fall under our jurisdiction.”

What is China’s digital currency plan? The central bank has been quietly working on the project for five years
Yuan Yang and Hudson Lockett – FT
China is aiming to be the first country in the world to launch a digital currency, after five years of research by a team in its central bank.

Bitcoin Matches Record Losing Run in Fall to Six-Month Low
Joanna Ossinger and Eric Lam – Bloomberg
PBOC crackdown is adding to warnings from China watchdogs; The cryptocurrency is still up more than 75% for the year
Bitcoin sank more than 10% to the lowest level in six months, extending last week’s slide past the weekend on concerns about a crackdown on cryptocurrency operations by China.

Bitcoin Drops Below $7,000 as China Euphoria Fades
Steven Russolillo and Stella Yifan Xie – WSJ
When Chinese leader Xi Jinping touted blockchain technology in October, the price of bitcoin surged, searches for “blockchain” on one of China’s biggest search engines soared and shares of related companies jumped. A month later, the euphoria is over. Bitcoin slumped below $7,000 over the weekend, dropping to a six-month low as China reaffirmed its tough stance on companies involved in cryptocurrency trading and fundraising. That wiped out the gains last month—when bitcoin briefly topped $10,000—which followed Mr. Xi’s statement that China should speed up research into blockchain, the open-ledger system behind cryptocurrencies.

China Central Bank Cracks Down on Cryptocurrency Trading in Shanghai
Winni Zhou, Samuel Shen and John Ruwitch – Reuters
The move came a day after financial regulators in Shenzhen launched a similar campaign, and as the People’s Bank of China (PBOC) is preparing to launch its own digital currency. PBOC’s Shanghai headquarters said in a statement it would crack down on a resurgence of illegal activities around virtual currencies, and cautioned investors not to confuse such instruments with blockchain technology. “The issuance, financing and trading of virtual currencies involve multiple risks,” PBOC said, vowing to uproot such activities.

Nomura gains approval for crypto custody and depositary in Jersey; Nomura’s joint venture platform, Komainu, is aiming to create a cryptocurrency ecosystem fit for institutional investors.
Jonathan Watkins – The Trade
Nomura’s bid to bring custody and depositary services for cryptocurrencies to institutional investors has been boosted by the receipt of regulatory approval from the Jersey Financial Services Commission.

China: Shenzhen Identifies 39 Crypto Exchanges Defying Trading Ban
William Suberg – Cointelegraph
Cryptocurrency exchanges operating illegally in one city in China will face the wrath of a joint government effort to oust them, reports claim. On Nov. 22, authorities in Shenzhen have identified a total of 39 exchanges falling foul of China’s cryptocurrency trading ban, according to local news outlet Sanyan Finance. The operation reportedly included participation from China’s central bank, the People’s Bank of China (PBoC), the Economic Investigation Bureau of the Municipal Public Security Bureau and the Municipal Communications Administration.

Not Your Keys: 92% of Institutional Investors Keep Crypto on Exchanges
William Suberg – Cointelegraph
Cryptocurrency institutional investors overwhelmingly keep their wealth on exchanges despite the inherent security risks, new data claims. Compiled by cryptocurrency exchange Binance on Nov. 22, a survey asked 76 institutional investors who used its platform about their trading habits. The survey was part of Binance’s Institutional Market Insights research, which is now in its second edition. Among the most surprising results was that 92% of participants chose to keep their crypto — Bitcoin (BTC), stablecoins and others — with trusted third parties, and not under their own control.

Binance CEO: ‘We Will Be Suing’ The Block Over China Police Raid Story
William Suberg – Cointelegraph
The CEO of cryptocurrency exchange Binance has vowed to sue industry media outlet The Block over alleged false reporting. In an ongoing Twitter exchange on Nov. 22, Changpeng Zhao, known as CZ in crypto circles, promised to take legal action over an article that claimed Binance’s Shanghai office was receiving attention from Chinese police. “We will be suing them,” he wrote in one tweet. The offending piece originally surfaced on Friday and was part of multiple reports of a fresh crypto clampdown by China. At the same time, Bitcoin (BTC) slid to below $7,000. The Block initially made its claims under the headline “Binance’s Shanghai office shut down following visit by authorities, sources say.”

JPMorgan’s Blockchain Products, Explained by Ex-JPM Tech Leads
Stuart Popejoy, Will Martino – Cointelegraph
JPMorgan Chase — whose CEO, Jamie Dimon, once notably expressed skepticism over cryptocurrency — was actually one of the first financial institutions to “learn to love the blockchain.” In 2015, the bank created a division dedicated to exploring emerging technology such as blockchain. We were two of the first members of the JPMorgan blockchain team. We built some of its earliest blockchain technology and vetted other blockchain providers for the bank’s strategic investment and adoption. In this article, we’ll discuss the technology we developed during our time at the bank and our insights into the current suite of JPMorgan blockchain products, from Quorum to JPM Coin.

Hedge funds were net short CME bitcoin futures going into this downturn, CFTC report shows
Frank Chaparro – The Block Crypto
Some hedge funders out there appear to have made a stronger bet on the short side of the CME bitcoin futures market over the past week, data from the Commodities Futures Trading Commission shows. As per a research report by The Block’s Ryan Todd, hedge funds were overwhelmingly short during the week of November 12th compared to the sell-side, asset managers, and other groups. Specifically, net short positioning (Short OI – Long OI) among hedge funds that trade the CME bitcoin product was at an all time high over the last two weeks of COT report prints.

Thailand looks to amend crypto rules to facilitate growth
Yogita Khatri – The Block Crypto
Thailand’s Securities and Exchange Commission (SEC), the country’s financial regulator, plans to amend cryptocurrency rules to boost the growth of digital assets.

Jury Convicts Crypto Ponzi Scheme OneCoin’s Lawyer on Fraud Charges
Danny Nelson – Coindesk
Mark Scott, the lawyer behind Ruja Ignatova’s OneCoin, was found guilty of laundering $400 million for the Ponzi scheme on Thursday.


The Trade War Won’t Be Won or Lost by President Trump; China was losing global export market share before the trade war
Nathaniel Taplin – WSJ
China-U.S. tensions may not matter for global trade as much as investors seem to think. Talk of a Sino-American trade war has dominated newspaper headlines, market reports and corporate boardroom discussions for the past 18 months. But, in some ways, what the escalating tariffs have shown most clearly is how difficult it is for one country—even one as central to the global economy as the U.S.—to reorder global trade on its own.

Private equity comes under fire in Washington; Industry steps up lobbying after finding itself in the crosshairs of politicians — and a singer
Mark Vandevelde – FT
Private equity firms are lobbying politicians in Washington as their industry’s far-reaching role in the US economy draws fire from constituencies as diverse as unions, prison reform advocates, Hollywood screenwriters — and Taylor Swift.

Buttigieg’s ‘big tent’ appeal rises in Silicon Valley; Tech friendly candidate wins influential backers for Democratic nomination
Miles Kruppa and Richard Waters – FT
When US investors and Silicon Valley power couple Matt Rogers and Swati Mylavarapu organised their first fundraising event for Pete Buttigieg in February, it was a small affair — 25 people in their living room. Now Mr Rogers says that whenever the 37-year-old candidate for the Democratic nomination stops in San Francisco, they have to book a venue big enough for 2,000 people.

Rudy Giuliani Sought Role in Ukraine Bank Case While He Dug for Dirt
Greg Farrell and Daryna Krasnolutska – Bloomberg
Talks with Privatbank lawyers over summer did not lead to deal; Trump’s lawyer examined Kroll report on Kolomoisky, Privatbank
Rudy Giuliani discussed representing a state-owned Ukrainian bank in a legal dispute over the summer even while publicly pressing Ukraine on behalf of the U.S. president.

Trump Tax Cut Sets Off Boom in Once Sleepy Corner of Muni Market
Amanda Albright – Bloomberg
Vanguard, Eaton Vance say they’re buying more taxable munis; Refinancing causes biggest spike in issuance since 2010
At Eaton Vance’s daily 8:45 a.m. meetings with fixed-income executives, a usually overlooked segment of the bond world has been coming up more often.

Bloomberg News Sets Out How It Will Cover Its Owner; A fraught moment for a newsroom that, its editor in chief says, will not do in-depth investigations of Mike Bloomberg or any other Democrats running for president.
Marc Tracy – NY Times
Get ready to cover the boss’s presidential campaign, with some caveats. That is the message roughly 2,700 journalists at Bloomberg L.P., the financial data company owned in large part by Michael Bloomberg, received on Sunday morning after Mr. Bloomberg, the former mayor of New York City, formally announced his candidacy for president as a Democrat.

Time to call out and remove Putin’s propagandists; Here’s what a ‘Soviet-style’ process actually looks like, Republicans
Jennifer Rubin – Washington Post
Republicans are not “merely” violating their oaths of office for failing to support impeachment of a president who arguably has committed more serious “high Crimes and Misdemeanors” and acts of bribery than all his predecessors combined. None of them sacrificed national security to obtain a political advantage. President Trump has been disloyal to the United States, not only in giving Russia a leg up in its war against Ukraine, but also in broadcasting his propaganda. And for that, Republicans are just as guilty.

Can the Fed Fight Inequality? Kashkari Says Yes, Hires an Ally
Matthew Boesler – Bloomberg Minneapolis chief backs monetary policy that can help low-paid; He hired Obama economist to head new institute for inclusion
From Bernie Sanders to Warren Buffett, almost everyone says U.S. inequality is a problem. In 2019, big ideas about how to solve it have been in the air. One of the most unlikely solutions is emerging from a far-flung corner of the Federal Reserve.

Fiona Hill and the American Idea; A naturalized American exposes Trump’s attack on what America is and must be.
Roger Cohen – NY Times
For a naturalized American, raised in Britain, I found Fiona Hill’s testimony at impeachment hearings this week to be a powerful reminder of what makes America great and of how President Trump has taken a sledgehammer to “its role as a beacon of hope in the world.”


BGC to pay $3 million for voice trading and reporting violations; The CFTC found that BGC failed to capture voice trade communications over five years.
Hayley McDowell – The Trade
US broker-dealer BGC Financial will pay $3 million to settle charges related to various reporting and voice trading recordkeeping violations over a five-year period.

CFTC Orders BGC Financial, L.P. to Pay $3 Million for Supervision, Reporting, and Recordkeeping Violations
The U.S. Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against BGC Financial, L.P., a futures industry voice broker and registered futures commission merchant (FCM), for numerous supervision, reporting, and recordkeeping violations spanning over five years.

London broker pleads guilty to conspiring to evade FATCA
Pedro Gonçalves – International Investment
A former Beaufort Securities wealth manager has pleaded guilty at a federal court in Brooklyn to charges of securities fraud and violating FATCA.

Regulation will change the ESG market, says Aviva
Imogen Tew – FT Adviser
Greenwashing is likely to be a thing of the past as regulation will stamp out bad practice in the industry over the next few years, according to Aviva’s investment lead.

Investing and Trading

Bets on Coal End Where They Started: In Bankruptcy; Aspiring coal barons who amassed distressed mines have seen their businesses wind up in chapter 11
Becky Yearn – WSJ
Businessmen Tom Clarke and Jeff Hoops Sr. thought they could make money cobbling together financially troubled mines into larger coal producers, taking advantage of the industry’s distress.

Stocks Are Finally Diverging After Trading in Tandem; Easing market tensions have allowed investors to refocus on company fundamentals, opening a window for stock picking
Karen Langley – WSJ
Conditions for stock picking are improving. After months of frequently trading together, shares of big U.S. companies have begun to diverge, more often rising or falling on fundamentals or company-specific news.

A year in which the IPO market sobered up; Disappointment for high-profile listings comes even as US stocks hit record
Patrick Mathurin and Chris Campbell – FT
The excitement earlier this year at the prospect of disruptive tech companies hitting the public markets seems a long time ago. For all the euphoria over the likes of ride-sharing app Uber, the chief feature (apart from the lack of profits) of several of these companies since their listing has been their disappointing performance. Uber shares, for example, have plunged more than 30 per cent since the group’s IPO.

Big investors fight back over dual-class shares; Controversial structures are the ‘scourge of corporate governance’
Attracta Mooney – FT
Institutional investors are fighting back against the prospect of dual-class shares in the UK after Downing Street held exploratory talks about altering listing rules to attract high-growth companies.

The WeWork debacle has reset expectations on Wall Street; The recent weakness in new listings has injected a dose of reality
Richard Henderson – FT
After the dotcom bust, Dan Chung, chief investment officer for Alger, a tech-focused fund manager based in New York, was desperate for hot stocks to fire up his portfolios.

AIG fights attempt to make it pay $100m in bonuses; Employees won ruling last year over cancelled crisis-era payouts
Oliver Ralph and Jane Croft – FT
AIG is heading to the London courts on Monday to fight an attempt to make the insurance group pay more than $100m in crisis-era bonuses to 23 former staff.

‘Next Big Thing’ at Risk as Fewer Women, Minorities Get Patents
Evan Sully – Bloomberg
U.S. patent office proposes to track race, gender of inventors; Congress had asked patent agency to study underrepresentation
Plenty of women and members of minority groups are hoping to invent the next iPhone, blockbuster medicine or top-selling toy, but too often they don’t get patents that would ensure they get paid for their ideas.

Firms Warn of Risks in Plan to Take Fannie Mae, Freddie Mac Private; Mortgage investors want a guarantee for mortgage-finance companies’ debt
Andrew Ackerman – WSJ
WASHINGTON—Some of the biggest names in finance are warning that the government’s plan to return Fannie Mae and Freddie Mac to private ownership risks disrupting a market critical to the U.S. housing system.

OK Boomer, Who’s Going to Buy Your 21 Million Homes? Baby boomers are getting ready to sell one quarter of America’s homes over the next two decades. The problem is many of these properties are in places where younger people no longer want to live.
Laura Kusisto | Cassidy Araiza – WSJ
When this Phoenix suburb opened on Jan. 1, 1960, it was billed as the original retirement community. From above, it would look like a UFO landing site, laid out in rings to mimic halos surrounding the sun. Just past the entrance, a billboard flanked by rows of palm trees promised “An Active New Way Of Life.”

High-Beta Stock Trade Seizes Up Right After Everyone Piled In
Vildana Hajric and Sarah Ponczek – Bloomberg
Mutual fund cyclical exposure rises to two year high: Goldman; Heath care, utilities, real estate sectors led last two weeks
The market, it’s said, finds a way to maximize the pain. For everyone who fell in love with cyclical shares just in time for them to drop the most in two months this week, it’s an adage they can relate to.

Traders Send Grain ‘Over Chicago’ in Unusual Corn-Market Move
Isis Almeida and Dominic Carey – Bloomberg
High eastern prices drive rare corn shipments from the west; Farmer sales likely to pick up next year: ADM, Pacific Ethanol
The most-delayed U.S. corn harvest on record has divided the Midwest market, jumbling trade routes for the grain that usually flows south.


Charles Schwab-TD Ameritrade deal would show fallacy of ‘free’ trade
Jonathon Trugman – NY POST
Just weeks after Charles Schwab turned the industry upside down by cutting online stock trading commissions to zero, word broke Thursday that it is in discussions to acquire rival TD Ameritrade for $26 billion.

Charles Schwab to Buy TD Ameritrade, Extending Brokerage-Industry Sway
Annie Massa – Bloomberg
Combined company will relocate headquarters to Westlake, Texas; TD Ameritrade’s shares rose nearly 17% after reports of a deal
Charles Schwab Corp. said it would acquire TD Ameritrade Holding Corp. in a multibillion-dollar deal that will reshape the retail brokerage business. Schwab agreed to acquire TD Ameritrade in an all-stock transaction the companies say is valued at $26 billion, or about $48.50 per share — a 19% premium based on Schwab’s share price as of close on Nov. 20. TD Ameritrade stockholders will receive 1.0837 Schwab shares for each TD Ameritrade share.

The farmer turned banker who watched history being made; From JPMorgan and Barings to RBS, Symon Drake-Brockman had a ringside seat as crises unfolded
Laurence Fletcher – FT
Few executives better embody the seismic shift that has taken place in the debt markets over the past decade than Symon Drake-Brockman. The 58-year-old was once a senior banker at Royal Bank of Scotland, running its global debt markets business before overseeing its frantic efforts to reduce US mortgage exposure during the credit crisis.

Woodford a convenient target in Verseon blame game; Fallen fund manager’s backing should not distract from biotech venture’s own role in Aim exit
Kate Burgess – FT
Verseon, the biotech-blockchain business, cast the blame far and wide for its decision last week to quit London’s Alternative Investment Market.

HSBC’s top duo put futures on line with radical overhaul; Interim CEO Noel Quinn and CFO Ewen Stevenson know plan to streamline brings risks
David Crow – FT
When Noel Quinn accepted the job of interim chief executive of HSBC in August, he had one condition. He told chairman Mark Tucker he did not want to be a caretaker manager who would keep the bank chugging along until a permanent successor was appointed, according to people briefed on the negotiations.

Franklin Templeton appoints new chief executive; Jennifer Johnson, chief operating officer at Franklin Templeton, will assume the role of chief executive in February.
Hayley McDowell – The Trade
Franklin Templeton has promoted its chief operating officer, Jennifer Johnson, to lead the company as its new president and chief executive.

UK equity managers back St James’s Place as hedge funds up short positions; Firm gets backing amid fee structure criticism
David Brenchley – Investment Week
UK equity fund managers have leapt to the defence of beleaguered wealth manager St James’s Place (SJP) as hedge funds have upped their bets that the firm’s share price will plunge.

US asset manager puts pressure on Japan’s TBS to offload assets; Whitebox urges media company’s board to increase dividends and return on equity
Kana Inagaki – FT
A US-based asset manager has launched a campaign to urge one of Japan’s largest media groups, Tokyo Broadcasting System, to offload its substantial array of noncore holdings to improve returns for shareholders.

Westpac to strip executives of bonuses after laundering scandal; Australia’s treasurer said that bank board may be forced to resign
Jamie Smyth – FT
Westpac will close the payments system implicated in one of Australia’s biggest ever money laundering scandals and strip its executives of their short-term bonuses following an accountability review.


Yankee dollar is king in anti-imperialist Venezuela; Nicolás Maduro has failed in his efforts to ‘liberate’ economy from US currency
Gideon Long – FT
In the upmarket Sambil mall, the loudspeaker is blaring “Rudolph, the Red-Nosed Reindeer” in Spanish as Venezuelans do their early Christmas shopping.

The Job of a Hong Kong Stock Analyst Has Rarely Been This Tough
Elena Popina – Bloomberg
Shares almost three times as volatile as when protests began; Stocks rise as pro-democracy candidates dominate elections
Hong Kong stock analysts have recently been called upon to assess U.S.-China trade tensions, judge local recession risk, and gauge the impact of a landslide election victory for pro-democracy forces.

China Plans Record Sale of Dollar Bonds With Possible $6 Billion Offering
Annie Lee, Rebecca Choong Wilkins, and Ina Zhou – Bloomberg
Third straight year for China to sell sovereign dollar debt; Chinese 2019 offshore bond issuance setting record pace
China is planning a record sale of sovereign bonds in dollars, with a potential $6 billion offering, according to people familiar with the discussions.

Sweden is Becoming Europe’s Texas for Wind Power; The Nordic nation’s renewable energy boom has lots in common with the decades of expansion in the Lone Star state.
Jesper Starn and Lars Paulsson – Bloomberg
In a remote area almost eight times the size of Manhattan covered by millions of young fir trees, Europe’s biggest onshore wind park is emerging.

Chinese importers scoop up Brazilian soybeans amid U.S. trade uncertainty
Hallie Gu, Dominique Patton – Reuters
Chinese buyers scooped up at least 20 cargoes of Brazilian soybeans last week due to uncertainty over a trade deal with the United States that sent them rushing to lock in supplies, traders said on Monday.

Egypt news outlet raided after report on Sisi’s son; Journalists detained in ‘dangerous escalation’ of regime crackdown
Heba Saleh – FT
Egypt’s security services on Sunday raided the office of Mada Masr, one of the last remaining independent media outlets in the country, in another sign of the diminishing space for freedom of expression under the regime of President Abdel Fattah al-Sisi.

Private Equity Spies Profit in India’s Distress; Workers in rich nations may gain from a debt blowout that’s devastating ordinary people half a world away.
Andy Mukherjee – Bloomberg
India’s financial crisis has hit ordinary people hard. School teachers and electrical engineers have seen their pension savings get stuck in bonds of defaulted institutions. More than a million depositors of a cooperative bank can’t access their cash. Homeowners have spent billions of dollars on apartments that will never be finished.


Fund chiefs quit London as Brexit disruption lingers; German and French asset managers have redeployed UK-based CEOs back home
Siobhan Riding – FT
Fund management, one of the jewels in the crown of the City of London since the financial crisis, had hoped to escape the worst of Brexit disruption. But mounting evidence suggests that the UK capital’s primacy as an investment management hub may be fading as a result of Brexit.

UK companies hit by sharpest activity drop since Brexit vote
Phillip Inman – The Guardian
Britain’s private sector companies suffered the sharpest drop in activity this month since the EU referendum, as the prospect of a general election added to Brexit-related uncertainty. Most businesses blamed a contraction in activity in November on faltering confidence among both domestic and overseas customers, who are worn out by continuing political indecision.

Yen at one-week low as renewed trade hopes lift risk sentiment
Sujata Rao – Reuters
Positive news flow on the Sino-U.S. trade front lifted market sentiment on Monday, driving the Japanese yen to a one-week low and fuelling 0.2-0.3% gains on trade-focused currencies, from the Norwegian crown to the New Zealand dollar. The British pound climbed, too, with opinion polls continuing to point to a firm lead for Prime Minister Boris Johnson’s Conservative Party, whose election manifesto pledged a quick Brexit, tax cuts and more spending.


Barclays Joins Exodus From Prince Andrew Charity After Jeffrey Epstein Furor
Tom Metcalf – Bloomberg
Barclays Plc became the latest company to withdraw support from Prince Andrew’s beleaguered charity.

From ‘Godfather’ to ‘Irishman’, Mafia is gift that keeps on giving
Jill Serjeant – Reuters
Stories about the mob have become offers that Hollywood cannot seem to refuse. “The Irishman,” Martin Scorsese’s new movie arriving on Netflix on Wednesday about the Bufalino crime family and famed union boss Jimmy Hoffa, marks the latest entry in a genre that has fascinated audiences and filmmakers for decades.

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Past JLN Newsletters

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