Hits & Takes
Here are two key things you need to know from today’s Lead story about the trading floor culture as it relates to women. First, “A paper by the University of Leicester suggests that female traders outperform males on average, and that more women on the trading floor would reduce crash events.” Secondly, about the improper practices exposed in the currency markets, “None of the chat rooms had female members and not a single woman faced criminal charges for the alleged failings.”~JJL
In a recent Forbes article, Richard Sandor pointed out that open interest in North American carbon futures is topping 700,000 contracts, which is higher than gold’s 564,000 contracts.~JK
The NIBA will hold its Chicago conference on September 12, 2019 at the Stuart School of Business at Illinois Tech. Register HERE.~JJL
Also on September 12, the FIA returns to Hong Kong for their fifth forum. It will be held at the
HKEX Connect Hall. Stay tuned on the protests and airport access to Hong Kong.~JJL
If you don’t want to go to Hong Kong, then the week before you can attend the “FIA Forum: Taipei 2019” to be held September 5, 2019 from 1:30pm to 4:30pm CST at the Humble House Taipei.~JJL
CME Group is launching two new futures contacts in partnership with Shanghai Gold Exchange (SGE) in Q4. Here is a video about the new contracts.~JJL
Congratulations AFX on
Upcoming Launch of AMERIBOR® Futures
August 16, 2019
From Gold Sponsors of Launch Party:
The Spread – LIBOR Edition
This Thursday, Cboe Futures Exchange will be launching AMERIBOR (American Interbank Offered Rate) futures. AMERIBOR is the brainchild of Dr. Richard Sandor, chairman and CEO of the American Financial Exchange, and is an alternative to LIBOR (London Interbank Offered Rate).
In this episode of “The Spread,” we look at the history of the LIBOR, a financial innovation that grew to underpin trillions of dollars of derivatives contracts before becoming the centerpiece of one of the largest financial scandals of our time.
Watch the video »
British Museum adds anti-Brexit ‘banknotes’ to its collection
Curator says Johnson and Rees-Mogg ‘skit money’ illustrates character of society
James Pickford – The Financial Times
The British Museum has acquired two anti-Brexit “banknotes” created by activists to mock the Eurosceptic Conservative politicians Boris Johnson and Jacob Rees-Mogg.
The “skit money” or parody banknote showing the face of Mr Johnson, prime minister, is of the value of £350m, a reference to the contested estimate by the Leave campaign of the weekly gains from departing the EU.
***** British humor at its best.~JJL
What Negative Interest Rates Mean for the World
Tracy Alloway and Joe Weisenthal – Bloomberg
The amount of negative-yielding debt keeps climbing and now includes bonds issued by emerging market countries and some junk-rated companies. On this week’s episode, we talk to Viktor Shvets, Macquarie’s Head of Asia Strategy, about why interest rates keep getting lower and why that’s a problem for the global economy and financial system. He argues that undermining the ‘time value’ of money – or the principle that money available now is worth more than money in the future because you can use it to earn additional money – won’t lead to economic growth. In fact, he says, negative rates are going to end up leading to a rethink of modern capitalism and political society once people realize they have big consequences. He’s also one of the few sell-side analysts who takes Modern Monetary Theory (MMT) pretty seriously.
***** Some negative thinking is needed here.~JJL
Securities or Not; Swap Dealer Misleading Information; Market Abuse
Gary DeWaal – Bridging the Week
Last week a Canada-based social media company answered charges filed against it by the Securities and Exchange Commission in June 2019 that alleged its 2017 initial sale of digital tokens constituted an unlawful securities offering under US securities laws. The company argued that its digital tokens were not securities but were more akin to virtual currency like bitcoin. In any case, said the company, the SEC never provided it with adequate notice regarding what cryptoassets it might consider to be securities.
Friday’s Top Three
It’s always interesting to see the firm that seemingly prints money, lose money. So when Virtu Financial posted a loss in the second quarter, that made Yahoo Financial News’ piece Why Virtu Financial Stock Plunged Today our top story of the day on Friday. Virtu was also mentioned in the second most read piece of the day, The Wall Street Journal’s NYSE Antennas Spark High-Speed Trader Backlash. Third was a job opening at OCC for Vice President, Public Relations
161,160,564 pages viewed; 23,874 pages; 221,107 edits
Trading floor culture remains a barrier for senior female staff; Drive to recruit more women in foreign exchange stymied by intimidating atmosphere
Eva Szalay – FT
After her best year trading currencies, a female trader on a large US investment bank’s foreign exchange desk was expecting good news at the bonus meeting. It was, after all, the late 1990s, the heyday of currency trading. But when her boss told her the sum, which was a fraction of what male members of the team were awarded, she stood up and went back to her desk in silence. When she later told her boss she was disappointed, he turned around and snarled: “And how much does a nurse get?!”
Fear of legal action stifles fund management innovation; Asset managers can learn many lessons from product development in life sciences
Gabriel Altbach – FT
Imagine if front-line medics said “no thanks” to a revolutionary cancer drug out of fear of being sued by patients who still had to be given older, less effective medicine.
IEX adopts first fee structure for extra connectivity; The most active trading members at IEX will be charged $100 to access additional logical ports as of October.
Hayley McDowell – The Trade
Investors Exchange (IEX) has said it will soon introduce market access charges for the first time on its most active trading members.
Once-Unpopular Carbon Credits Emerge as One of the World’s Best Investments; Heat wave in Europe drives carbon-credit prices to near record high
David Hodari – WSJ
Carbon-emission credits, long shunned by traders, are now one of the world’s best-performing investments. The price of the credits, doled out by governments in Europe to polluting power plants and steel mills to curtail the production of greenhouse gases, has soared more than fivefold over the past two years.
The World Federation of Exchanges names Dr Pedro Gurrola-Perez as Head of Research
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, is pleased to confirm the appointment of Dr Pedro Gurrola-Perez as Head of Research. Pedro joins the WFE from the Bank of England, where he led the Financial Market Infrastructures (FMI) Directorate Research Team. He joined the Bank of England in 2013 from the UK Financial Services Authority.
Investment bank job cuts near 30,000 as outlook sours; Falling interest rates, weak trading volumes and automation create brutal summer
Robert Armstrong – FT
Global investment banks are shedding tens of thousands of jobs as falling interest rates, weak trading volumes and the march of automation create a brutal summer for the sector.
Burford alleges market manipulation ahead of ‘short attack’; Litigation financing specialist is embroiled in a dispute with short seller Muddy Waters
Myles McCormick – FT
Burford Capital, the litigation financing specialist embroiled in a stand-off with short seller Muddy Waters, has alleged there was market manipulation in the trading of its shares last week designed to artificially alter the price of the stock.
Bitcoin and Gold Are Monuments To Irrationality; Investors are turning to both assets amid market uncertainty, but digital currency is a strange idea of a haven and the metal’s track record is patchy.
Lionel Laurent – Bloomberg
With worries about a currency war growing and bond yields collapsing, investors have reached for their usual haven of gold. Only this time it has a friend (as my colleague Tim Culpan wrote this week): Bitcoin.
Greenland’s Rapid Melting Is a Hugely Underplayed Story; It’s officially time to panic. (Or at least pay more attention.)
Stephen L. Carter – Bloomberg
The announcement that 11 billion tons dropped off the Greenland Ice Sheet in one day turned out to be a made-for-television example of the effects of climate change. Dramatic videos of water pouring off the glaciers went viral. But apart from the occasional spectacular image, it’s hard to focus the attention of the news media on the Greenland Ice Sheet. And that’s too bad.
The Great Land Robbery; The shameful story of how 1 million black families have been ripped from their farms
Zora J. Murff – The Atlantic
I. Wiped Out
“you ever chop before?” Willena Scott-White was testing me. I sat with her in the cab of a Chevy Silverado pickup truck, swatting at the squadrons of giant, fluttering mosquitoes that had invaded the interior the last time she opened a window. I was spending the day with her family as they worked their fields just outside Ruleville, in Mississippi’s Leflore County. With her weathered brown hands, Scott-White gave me a pork sandwich wrapped in a grease-stained paper towel. I slapped my leg. Mosquitoes can bite through denim, it turns out.
Europe isn’t that scared of Boris Johnson
Analysis by Luke McGee, CNN
Boris Johnson is trying to scare Europe into giving him a better Brexit deal. He hasn’t been terribly subtle about this. During his campaign to replace Theresa May, Johnson repeatedly said that if he became prime minister, he would ramp up preparations for leaving the European Union without a deal.
Greta Thunberg and ‘Flight Shame’ Are Fueling a Carbon Offset Boom; High-profile climate activism is pushing more flyers than ever to try and assuage their carbon guilt.
Timothy Abington , Mathew Carr , and William Wilkes – Bloomberg
Campaigning by climate activist Greta Thunberg and filmmaker-naturalist David Attenborough is persuading pollution-conscious fliers to try and mitigate the environmental damage caused by their flights.
Exchanges, OTC and Clearing
Tradeweb reports new quarterly record for average daily volume of USD753.8 billion
Electronic marketplace operator Tradeweb has reported a new quarterly record for average daily volume (ADV) of USD753.8 billion, representing an increase of 39.6 per cent.
Eurex EnLight: Temporary transaction fee waiver for certain Eurex EnLight trades
Eurex Circular 081/19 Eurex EnLight: Temporary transaction fee waiver for certain Eurex EnLight trades
Equity Index Highlights – August 2019 edition
Global equity markets generally drifted for most of July before finishing weakly. The focus recently has been towards the extraordinary fixed income landscape that sees new records on the notional of negative yielding debt. This not only spans government debt and investment grade credit but also some corners of the ‘high-yield’ universe. It’s clear irony, but also a worrying distortion brought about by years of accommodative central bank policy.
IEX to impose connectivity fees for the first time; Upstart exchange says its heaviest users will have to pay for extra connections
Richard Henderson – FT
IEX will charge a group of highly active brokers on its platform an additional fee to access the market, denting its rigid stance against the connectivity fees levied by its larger rivals.
Despite initial windfall, Swiss stock exchange wants EU spat resolved
The ability to trade Switzerland-listed shares on stock markets in the European Union must be restored if Swiss stocks are to remain attractive, the chief executive of Swiss stock exchange SIX said in remarks published on Sunday.
A New Standard for Exchange Economics
Bradley Katsuyama – Via LinkedIn
Our team at IEX published a white paper earlier this year titled, “The Cost of Exchange Services,” which gave detailed transparency on our costs to provide connectivity and market data to our Members. For IEX, it wasn’t a hard decision to be the first stock exchange to provide this type of disclosure – we did it because it’s consistent with what we stand for as an exchange.
JP Morgan doubles down on machine learning for FX algorithms; After launching its machine learning-based FX algo trading tool in April, JP Morgan says it is looking to increase adoption of the technology in FX.
Hayley McDowell – The Trade
JP Morgan is backing the use of machine learning for the future of foreign exchange algorithmic trading, after applying the technology to its FX algos earlier this year.
Billionaire Thiel Supports Encryption as U.S. Pushes for Access
Ben Brody – Bloomberg
Giving law agencies more access exposes data to leaks, he says; Facebook director: ‘I don’t trust the FBI’ to protect privacy
Peter Thiel, the Silicon Valley billionaire and board member of Facebook Inc., pushed back against the U.S. government’s efforts to get technology companies to provide law enforcement access to encrypted communications.
How Brexit Will Affect the UK Fintech Industry? Experts Answer
Max Yakubowski – Cointelegraph
Back in 2016, there was a referendum that caused Brexit, which has since been affecting all spheres of British life. Would Brexit’s effects be positive or negative for the fintech industry in the United Kingdom? We asked experts from the London Fintech Week, the U.K. in a Changing Europe, the University of Nottingham and more. Meanwhile — and this should be underlined — a lot of experts declined to give comments on such a politically sensitive topic.
Snoop Dogg-backed firm now Europe’s biggest fintech startup, valued at $5.5B
Rachel Tesler – Fox Business
Swedish online payment firm Klarna, whose shareholders include Snoop Dogg, announced Tuesday it reached a $5.5 billion valuation following a $460 million funding round, asserting its status as Europe’s largest private fintech Opens a New Window. company.
Bitcoin.com Set to Launch Exchange
John D’Antona Jr. – Traders Magazine Online News
Industry leader Bitcoin.com has announced plans to launch a new cryptocurrency exchange on Monday, September 2. The exchange offers a user-friendly place to trade with a clean, simple interface to promote easy navigation, along with high-liquidity and a powerful matching engine to support fast trading.
Gemini Exchange Added to CME Group’s Pioneering Crypto Benchmarks
Marie Huillet – Cointelegraph
The Winklevoss twins’ Gemini platform is being added as a constituent exchange to the Chicago Mercantile Exchange (CME Group) CF Bitcoin and Ether-Dollar Reference Rate and Real-Time Index.
Korea Exchange Affiliate Koscom to Launch DLT Platform for Unlisted Shares; Koscom to launch blockchain-based unlisted shares trading service in H2 2019
Helen Partz – Cointelegraph
Launched by South Korea’s Ministry of Finance and primarily backed by the Korea Exchange, Koscom plans to launch its blockchain-based platform for unlisted securities in the second half of 2019, local newspaper The Chosun Ilbo reported on Aug. 6.
When bitcoin bros talk cryptography
Jemima Kelly – Financial Times
You might remember that last month, chief bitcoin bro Anthony Pompliano — better known as “Pomp” — had a go at talking global finance (it didn’t go terribly well). This time round, the crypto fund manager talked cryptography. You know, that old practice of using codes (where words and numbers are converted into different words and numbers) and ciphers (where a message is converted on a letter-by-letter basis) in order to protect, or “encrypt” secrets. A practice that dates back to roughly 1900BC, when some unusual hieroglyphs were carved into the wall of a tomb in the Old Kingdom of Egypt.
The Woz and the crypto wonga
Jemima Kelly – Financial Times
You might be aware that Steve “the Woz” Wozniak, co-founder of Apple, has been getting into crypto of late. Last year, a few months after telling CNBC that he thought bitcoin should become the single global currency because “that is so pure thinking”, he joined a crypto venture that had failed to complete its ICO. That was Equi, a venture founded by Lady Mone of Mayfair — the lingerie tycoon-turned-Tory-baroness-and-QVC-saleswoman — and her soon-to-be-husband, Doug Barrowman, a businessman linked to tax avoidance schemes for contractors who are now being pursued by HMRC. (A somewhat motley crew, it seems fair to say.)
China’s PBOC Says Its Own Cryptocurrency Is ‘Close’ to Release
PBOC’s currency to assert state control of digital currencies; Central banks seen accelerating work after Facebook’s Libra
The People’s Bank of China is “close” to issuing its own cryptocurrency, according to a senior official. The bank’s researchers have been working intensively since last year to develop systems, and the cryptocurrency is “close to being out,” Mu Changchun, deputy director of the PBOC’s payments department, said at an event held by China Finance 40 Forum over the weekend in Yichun, Heilongjiang. He didn’t give specifics on the timing.
Coinbase UK Dropping Support for Cryptocurrency Zcash
Daniel Palmer – Coindesk
The U.K. arm of Coinbase appears to be dropping support for the privacy-focused cryptocurrency zcash.
Who Is David Marcus: Bitcoin Believer Turned Facebook’s Libra Boss
Kirill Bryanov – Cointelegraph
David Marcus, the man spearheading Facebook’s blockchain effort, has gotten a tremendous amount of spotlight lately. The rapid emergence of Libra has dominated the coverage of other crypto-related developments, as it became apparent that the social media giant’s inroad into the realm of digital assets will have most serious consequences for both the blockchain sector and the global financial system in general.
New Zealand Gives Greenlight for Cryptocurrency Income and Salary Payments
Tolu Ajuboye – Coinspeaker
New Zealand has published a ruling by its tax authorities that allows paying workers’ salaries with cryptocurrency. The publication also includes specific requirements regarding this issue.
NYC-Based Quontic Bank Opens its Doors to Crypto Companies
Rachel McIntosh – Finance Magnates
“We’re looking to diversify our product offering and our customer mix by entering into [cryptocurrency.]” A little-known, NYC-based bank called “Quontic” has become the latest of a handful of US-based financial institutions to have agreed to work with the cryptocurrency sector, according to a recent report from CoinDesk.
IRS Warnings to Bitcoin Traders Offer Clues to Coming Tax Guidance
Nikhilesh De – Coindesk
The IRS’ recent warning letters to 10,000 traders offer hints at what its forthcoming guidance on crypto taxes might say. While the letters are not guidance, the tea leaves indicate the IRS might be changing its required methods for calculating the value of crypto holdings and the forms and schedules for reporting them. Major questions remain unresolved, including how hard forks and airdrops should be treated.
In Big Block Hard Fork, Craig Wright’s Bitcoin Has Left Nodes Behind
Alyssa Hertig – Coindesk
In the wake of a recent network upgrade, a number of nodes have been separated from the bitcoin SV blockchain, a development that highlights why “hard forks” have long been the subject of passionate infighting among cryptocurrency developers.
Exchange Hacks Are On The Decline, Bank Says; The Bank cites a marked improvement in custodial solutions as a key deterrent
Paddy Baker – Cryptobriefing.com
Exchange hacks are the biggest threats to crypto holders, as Binance users were recently reminded. But digital thieves are finding fewer opportunities to steal cryptocurrencies from investors and exchanges, according to a new report from a Liechtenstein bank.
Why the US Cryptocurrency Revolution Could Be Pushed Overseas
Nick Spanos – Observer.com
Right now, there is a glitch in tax law created by President Donald Trump’s tax reform bill, also known as the Tax Cuts and Jobs Act of 2017, that inadvertently imposes a harsh tax on cryptocurrency and hurts U.S productivity. This law needs to be changed in a way that leaves these transactions tax free and imposes a tax only when one “cashes out” from cryptocurrency to the dollar. If left untouched, this law will drive even more innovation overseas and further hurt U.S. innovation and entrepreneurship.
Derivatives Drama: The Unintended Consequences of Crypto Regulation
Noelle Acheson – Coindesk
Last week’s kerfuffle over the launch-that-wasn’t of LedgerX’s physically delivered futures platform highlights two very important lessons, one obvious and one less so.
Binance’s US Subsidiary Is Weighing 30 Different Cryptos For Listing
Daniel Kuhn – Coindesk
Binance, the world’s largest cryptocurrency exchange by trading volume, has said that it is considering 30 potential cryptocurrencies and digital assets for its forthcoming U.S. subsidiary.
Trump’s Threats to Devalue the Dollar Aren’t Credible; U.S. policy makers don’t currently have the tools necessary to weaken the greenback
Jon Sindreu – WSJ
The U.S. dollar is unlikely to come out on top in a currency war. Last week, the Chinese yuan breached the closely watched threshold of seven to the dollar for the first time in a decade. China’s central bank controls the value of its currency, so many investors see this as a sign that officials will seek to offset tariffs imposed by the U.S. on their goods by cheapening the exchange rate.
Moscow, Hong Kong and the liberalism of the streets; Events in both places show how single-grievance protests can evolve into wider movements
Gideon Rachman – FT
According to Vladimir Putin, Russia’s president, “the liberal idea has become obsolete”. Maybe so. But illiberalism does not seem to be doing so well either, to judge from my recent visits to Moscow and Hong Kong.
Does Trump really want to debate mental fitness?
Max Boot – Washington Post
President Trump projects so much that it’s a wonder he hasn’t gotten a job in a movie theater. At 6:44 p.m. on Saturday, about the time that normal people are getting ready for dinner, he tweeted: “Joe Biden just said, ‘We believe in facts, not truth.’ Does anybody really believe he is mentally fit to be president? We are ‘playing’ in a very big and complicated world. Joe doesn’t have a clue!”
Trump’s Wine War Is Giving Macron a Headache; The U.S. president is threatening to impose tariffs on French wine in response to Macron’s digital tax. It’s not going down smoothly.
Lionel Laurent – Bloomberg
U.S. President Donald Trump has taken aim at France’s most famous export: wine. His threats to slap higher import tariffs on grands crus, champagnes and the like in retaliation to a new French tax on big tech firms have left Didier Guillaume, France’s Agriculture Minister, apoplectic. It’s an “absurd” and “stupid” response, he fumed, to a legitimate attempt by a sovereign state to get the likes of Amazon.com Inc. and Apple Inc. pay their fair share in France.
Trump’s Currency War With China Could Be Bitcoin’s Do-or-Die Moment
Michael J Casey – Coindesk
The global economy faces its biggest crisis in 11 years. In theory, this should be bitcoin’s moment to shine, a chance to prove itself as an uncorrelated asset immune from political risks. Eventually, that result may bear out. But a rocky road lies ahead – for bitcoiners and nocoiners alike.
The Global Machine Behind the Rise of Far-Right Nationalism; Sweden was long seen as a progressive utopia. Then came waves of immigrants — and the forces of populism at home and abroad.
Jo Becker – NY Times
Johnny Castillo, a Peruvian-born neighborhood watchman in this district of Stockholm, still puzzles over the strange events that two years ago turned the central square of this predominantly immigrant community into a symbol of multiculturalism run amok.
Elizabeth the Vampire Slayer; The Senator takes out the garlic and crosses against private equity.
The Editorial Board – WSJ
Elizabeth Warren’s favorite image for businesses is that they “suck” profits out of American society like vampires. Her latest targets are private-equity firms that invest in struggling companies, often replace management and bet on a turnaround. She wants to put them out of business.
Robinhood Receives FCA Authorization to Operate in the UK; Appoints Wander Rutgers As President
U.S. fintech Robinhood announced on Wednesday it received authorization from the Financial Conduct Authority (FCA) to operate as a broker in the UK. According to Robinhood, the authorization will enable us to bring its investing platform to customers in the UK and is a “critical step” to achieve our mission of democratizing finance for all.
Financial Conduct Authority looking into Muddy Waters short attack on Burford Capital
Anna Menin – City AM
The Financial Conduct Authority (FCA) has said it is making “wide-ranging enquiries” into the circumstances surrounding the publication of a shortselling report on Burford Capital by Muddy Waters.
NFA orders San Francisco, Calif. swap dealer Wells Fargo Bank, N.A. to pay a $2,500,000 fine
NFA has ordered San Francisco, Calif. swap dealer Wells Fargo Bank, N.A. (Wells Fargo Bank) to pay a $2,500,000 fine.
Federal Court Orders Defendants to Pay More Than $2.7 Million in a Forex Fraud Scheme
The U.S. Commodity Futures Trading Commission today announced that the U.S. District Court for the Northern District of Georgia entered a default judgment against defendants Kevin Andre Perry and Lucrative Pips Corporation of Atlanta, Georgia in an enforcement action in which the Commission alleged the defendants fraudulently solicited and misappropriated nearly $700,000 from more than 50 clients in a forex trading scheme.
FINRA Requests Comment on Rules and Issues Relating to Senior Investors
FINRA is conducting a retrospective review to assess the effectiveness and efficiency of its rules and administrative processes that help protect senior investors from financial exploitation. The protection of senior investors is a top priority for FINRA. As such, FINRA is interested in whether additional tools, guidance or changes to FINRA rules or administrative processes are appropriate to further address suspected financial exploitation and other circumstances of financial vulnerability for senior investors.
ASIC updates guidance on climate change related disclosure
ASIC has today published updates to clarify the application of ASIC’s existing regulatory guidance to the disclosure of climate change related risks and opportunities.
Former financial advisor and consultant charged with dishonest conduct
Mark Damion Kawecki, of Frankston Victoria, has been charged with five counts of dishonest conduct. Mr Kawecki appeared before the Melbourne Magistrates Court today.
Authorised corporate directors to face FCA industry review; UK regulator tells ACDs assessment will be carried out once dust has settled on Woodford affair
Owen Walker – FT
Britain’s City regulator has told several authorised corporate director companies to prepare for an industry probe, as the niche service providers face scrutiny after the high-profile implosion of Neil Woodford’s investment business.
Burford Capital Alleges of Potential Market Manipulation
Lisa Pham – Bloomberg
Trading analysis shows evidence of manipulation, Burford says; Company has alerted authorities, considering its own options
Burford Capital Ltd., the latest target of short seller Muddy Waters, said it found evidence of illegal market manipulation after a preliminary analysis of trading that led to last week’s record stock slump.
If China Is A ‘Currency Manipulator’, Then Every Country Is
John Tamny – Forbes
In the late 1980s, national football power and frequent Rose Bowl participant Washington fell on hard times. While the Huskies had not infrequently finished seasons in the early ’80s with 10 wins or more, suddenly 6, 7 and 8 win campaigns became more common.
Investing and Trading
ESG investing sparks race in tech and hiring at asset managers; Fund groups aim to meet rising demand by ensuring they have the right tools and specialists
Attracta Mooney – FT
Asset managers are splashing the cash to gain a foothold in environmental, social and governance investing as their clients demand that their money is used to do good as well as to generate returns. This year they have bought stakes in ESG businesses, created internal ratings tools and hired specialists. Just last month Schroders, the UK’s second-largest listed asset manager, bought a majority stake in BlueOrchard Finance, an impact investing fund manager.
The partnership is dead. Long live the partnership; WeWork is readying for its IPO with a complex corporate structure
Eric Platt – FT
Goldman Sachs long ago abandoned its partnership. Yes, the Wall Street behemoth still names new partners every two years. But with its 1999 initial public offering, the partnership was dead.
Lower Mortgage Rates Aren’t Boosting U.S. Housing; The residential real estate market is less affordable now than anytime since before the financial crisis.
Danielle DiMartino-Booth – Bloomberg
Federal Reserve Chairman Jerome Powell is facing a housing conundrum. The market is in the midst of a 15-month slump, with home price gains and sales having slowed dramatically and permits to build new dwellings slumping by 6.6% to the lowest level in more than two years. This despite a big drop in market interest rates thanks to the Fed’s dovish pivot earlier this year.
The Single Best Investment for the Next Decade
Mark Hulbert, MarketWatch
“For money you wouldn’t need for more than 10 years, which ONE of the following do you think would be the best way to invest it—stocks, bonds, real estate, cash, gold/metals, or bitcoin/cryptocurrency?”
Investors Ponder Negative Bond Yields in the U.S.; Last week’s slide in Treasury yields is deepening worries about lackluster growth, low inflation
Sam Goldfarb and Daniel Kruger – WSJ
A steep slide in U.S. government-bond yields last week wrong-footed investors and left some pondering what was once unthinkable: whether interest rates in America could one day turn negative.
Making One Billion People Resilient To Climate Change By 2030
Joan Michelson – Forbes
“World food security increasingly at risk due to ‘unprecedented’ climate change impact, new UN report warns.” That’s the official United Nations website announcing a new report from the U.N. Intergovernmental Panel on Climate Change (IPCC).
The Turn in the Yield Curve; What the upside-down gap between shorter- and longer-term bond yields is indicating about the markets and the economy
Daniel Kruger and Peter Santilli – WSJ
A key market barometer of the risk of future recessions is sounding its loudest warning since April 2007, months before the start of the last financial crisis.
Sustainable funds more likely to be top performers, study shows; Number of European fund launches in 2019 set to beat last year’s total, says Morningstar
Jennifer Thompson – FT
European funds marketed as sustainable are more likely to be top performers, according to research. Close to two-thirds of sustainable funds beat the average performer in their category, as classified by data provider Morningstar, which groups products by the kind of assets they invest in such as bonds or equities.
Deutsche Bank admits it faces struggle to revive IPO business; Lender loses out to rivals in advising European companies on equity-related transactions
Olaf Storbeck and Stephen Morris – FT
Deutsche Bank faces an uphill battle to revive its struggling equity capital markets business, one of the bank’s top executives has admitted.
Depositors Are Next as Nordic Banks Buckle Under Negative Rates
Kati Pohjanpalo and Frances Schwartzkopff – Bloomberg
Nordea’s main investor says retail depositors can’t be spared; Likelihood of cost being passed on is seen as much higher now
Ever since negative interest rates became a thing, banks have been too afraid to pass them on to retail depositors. That may be about to change.
Swiss Bank Accounts Aren’t as Great as They Used to Be; UBS, Credit Suisse and Julius Baer are all passing on negative rates to large account holders. It’s bizarre to argue that this should affect ECB policy.
Ferdinando Giugliano – Bloomberg
Would you pay a bank for the privilege of holding your money? This is a question that wealthy savers are having to ask themselves as lenders start passing negative interest rates onto their biggest account holders. The Swiss banks UBS Group AG and Credit Suisse AG are in the vanguard of these moves, as you might expect given their focus on rich customers.
Government Urges Protesters to Leave Airport: Hong Kong Update
Natalie Lung and Shawna Kwan – Bloomberg
Flights to and from city scrapped; Cathay shares tumble; Chinese official warns protesters showing signs of ‘terrorism’
Hong Kong airport authorities canceled remaining flights on Monday after protesters swarmed the main terminal building for a fourth day, the biggest disruption yet to the city’s economy since demonstrations began in early June.
Shrinking UK economy is a Brexit warning; A contraction in the second quarter shows the need to avoid no deal
The editorial board – FT
Britain’s economy contracted for the first time in seven years during the second quarter of 2019. A combination of Brexit-related uncertainty, stockpiling ahead of the original exit date and global trade tensions all led the economy to shrink by 0.2 per cent compared with the previous three months. The data could not be a stronger warning to the governing Conservative party not to take further unnecessary risks with an already weak economy.
MPs have few options to stop no-deal Brexit, says think-tank; Ways of changing course including no-confidence vote or election unlikely to succeed
Robert Wright – FT
MPs will have almost no way to prevent the government from pushing ahead with a no-deal Brexit when they return from their summer recess in September, one of the country’s most respected think-tanks has warned.
Clues for Brexit Future May Be Found on Islands Far, Far Away
Eddie Spence – Bloomberg
New Zealand saw export shock as Britain joined Common Market; Pacific nation needed two decades to recover from the blow
There may be insights for the U.K. on leaving the European Union without a deal from a long time ago on the other side of the world.
Remainer MPs are plotting to force Boris Johnson to request a Brexit extension
Thomas Colson – Business Insider
Members of Parliament are plotting to force Boris Johnson to break his pledge to leave the European Union on October 31 and seek a last-minute Brexit extension, according to a report.
No-deal Brexit could deepen Europe’s shortage of medicines – experts
Francesco Guarascio – Reuters
As the Oct. 31 deadline for Britain to leave the European Union approaches, health professionals are warning that shortages of some medicines could worsen in Europe in the event of a no-deal Brexit.
U.S. adviser Bolton courts Brexit Britain with a trade deal talk
Steve Holland – Reuters
U.S. President Donald Trump wants to see a successful British exit from the European Union that Washington will support with a U.S.-UK free trade agreement, national security adviser John Bolton told British officials on Monday.
Beware of Employees Who Are Very Engaged in Their Work; Deeply engaged employees are likely to have difficulties in their personal lives and can become difficult to manage
Alina Dizik – WSJ
Increasing work engagement has become a mantra for companies looking to get the most from their employees. When employees are engaged at work, academic research shows, they tend to stay longer on the job and are more productive, self-motivated and happier coming to the office. Engaged employees are also more likely to see their job as a calling and derive deeper meaning from the day-to-day work.
Wealth of Jeffrey Epstein’s Brother Is Also a Mystery; Mark Epstein’s assets appear to be smaller than those of the deceased financier, but hard to assess
Gretchen Morgenson – WSJ
Jeffrey Epstein claimed a net worth of $550 million when he was asking to be released on bail from the jail where he was found dead from an apparent suicide on Saturday.
French ministers demand French inquiry into Epstein; Gender equality and health ministers say probe is ‘essential’
Victor Mallet – FT
Two members of the French government have called for an inquiry in France into alleged sexual abuse of underage victims by Jeffrey Epstein, the financier who died in custody in New York at the weekend following his arrest over his activities in the US.
The Potentially High Cost of Being Friends With the Boss; When the office knows who’s getting a bonus, managers favor other employees to avoid the appearance of bias
Heidi Mitchell – WSJ
Friends with the boss? It turns out that might cost you. Studies have shown that managers typically give preferential treatment to those who are close to them or share something in common, like a group identity.