US judge scraps trial into CME Group’s defence of home market; Fed Reserve checking account?

May 7, 2018

US judge scraps trial into CME Group’s defence of home market; Fed Reserve checking account?

May 7, 2018

Spencer Doar

Spencer Doar

Associate Editor

First Read

Hits & Takes
JLN Staff

Former Barron’s columnist Steve Sears has emerged as the chief market strategist for StratiFi Technologies.

Eurex Clearing’s new partnership program, aimed at creating an EU-based clearing facility for interest rate swaps, cleared a record EUR1.7 trillion in March.~JK

Cboe Global Markets’ FX volume rose 37 percent to $762.9 billion in April, up from $554 billion a year earlier. Year-to-date notional volume is up 41 percent.~JK

Did you know Cboe has an office in Quito, Ecuador?~JK

Joe Noviello, the former head of eSpeed, is now managing director of Dealerweb Technologies at Tradeweb, according to the Trading Places Newsletter.~JK

Not one to mince words, Charlie Munger compares cryptocurrencies to “turds” and “dementia”. ~JB

In other fun cryptocurrency news, no sooner did Oscar Mayer launch a “Bacoin” ad campaign than they got a cease and desist notice from Kirk Steele, who started a cryptocurrency called “Bacoin” several years ago.~JD & ~SR

MarketsWiki has exceeded the 125 million page view mark.~JJL

We will publish The Spread later today. We shot it on Friday at the Options Industry Conference from a lookout above the sunken forest with a view of the ocean. There was a live version of The Spread broadcast on Twitter on Friday, but Spencer (“I love the teleprompter”) Doar won’t let me include a link. You will have to find it yourself on my Twitter feed.~JJL

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The case for a five-hour working day; One financial services boss was so productive on his reduced week he has rolled it out
Pilita Clark – FT
The other day I heard a story about something so odd yet compelling that I have not been able to stop thinking about it. It happened in the Australian city of Hobart where the boss of a financial advice firm started working part-time after his wife ó a new mother ó began treatment for cancer.
/jlne.ws/2rq3z7n

***** Note to JLN staff: NO!

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Oscar Mayer Gets Cease and Desist Over Cryptocurrency Ads Because ‘Bacoin’ Already Exists
Rhett Jones -Gizmodo
It’s only been a few days since Oscar Mayer launched its horrendous “Bacoin” ad campaign, and a hero has come along in an attempt to kill it for good. Kirk Steele started a cryptocurrency called “Bacoin” a few years ago, and now he wants Oscar Mayer to cease-and-desist in conducting this viral travesty of a promotion.
/jlne.ws/2jAxQvJ

***** Bacoin is a not the weiner they thought it would be.~JJL

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Rockefeller Trove Ignites Bidding Frenzy With $26,000 Money Clip
Katya Kazakina – Bloomberg
About 1,500 lots are expected to fetch more than $500 million; Christie’s auction draws huge interest from Asian collectors
Get ready for the biggest tag sale in history. More than 1,500 items from the estate of Peggy and David Rockefeller — Impressionist and American paintings, English furniture and silver, 19th century carriages, Persian rugs, Japanese porcelain, Moroccan lamps, a Napoleon’s dinner service, duck decoys, gilded Buddhist deities, African figurines — are coming up for auction, starting May 8 at Christie’s in New York. There is an online sale and six live auctions. Christie’s officially estimated the trove at more than $500 million, while privately whispering that it may be much higher.
/jlne.ws/2jCKwCv

***** How much money was in the clip?~JJL

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Bridging the Week by Gary DeWaal: April 30 to May 4 and May 7, 2018 (Cotton Trading Blues; Source Code Theft; XRP a Security?; Monex Redux)
Katten Muchin Rosenman LLP
Two trading firms within a group structure were fined US $2 million in aggregate by the Commodity Futures Trading Commission for alleged violations of various provisions of law and CFTC rules related to their cotton futures transactions, including purported speculative limit violations. Separately, the conviction of a former programmer for a major investment bank for misappropriating his former employer’s algorithmic trading system source code was upheld by New York’s top appellate court, while a class action lawsuit was filed against Ripple and its chief executive officer, claiming the defendants were engaging in a continuous, unlawful offering of an unregistered security – the XRP digital token. As a result, the following matters are covered in this week’s edition of Bridging the Week:
/jlne.ws/2rs9mZZ

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Friday’s Top Three
Our top read stories of the day were led by Bloomberg’s piece VIX Faces Probes With Controversial Auction at Issue. Second went to The New York Times’ story The Problem With Prosecuting ‘Spoofing’. Third went to Bloomberg’s Inside the World’s Most Elite (and Secret) Traders’ Club

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MarketsWiki Stats
125,303,518 pages viewed; 23,091 pages; 212,941 edits
MarketsWiki Statistics

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Lead Stories

US judge scraps trial into CME Group’s defence of home market; 14-year-old case had been expected to shed light on exchange’s influence
Philip Stafford and Joe Rennison – FT
A US judge has cancelled a planned trial into the practices of CME Group defending its home turf against rivals, throwing into doubt whether a 14-year-old lawsuit alleging the world’s largest futures exchange violated antitrust laws is heard in public.
/jlne.ws/2roZeB1

Federal Reserve should give everyone checking accounts, new study says
Greg Robb – MarketWatch
Word that the Federal Reserve was open to the prospect of launching a cryptocurrency made headlines late last year, but what is actually much likelier is that the Fed will create “central bank electronic money for all,” researchers at the St. Louis Fed say in a new blog post.
/jlne.ws/2rq45Cl

Libor Refuses to Die, Setting Up $370 Trillion Benchmark Battle
Alex Harris – Bloomberg
Key rate seeks second life after regulators sound death knell; Presumptive heir faces challenges as futures trading begins
A struggle that will dictate the future of financial markets is brewing. Long beleaguered Libor is fighting to preserve its status as the premier global benchmark for dollar-based assets just as questions pile up over the credibility of its presumptive heir.
/jlne.ws/2jANsiT

New Crypto Exchanges Don’t Want (to Hold) Your Money
Benjamin Robertson, Matt Leising, Andrea Tan – Bloomberg
Just as stocks are untradable without an exchange, the same is true for Bitcoin and other digital currencies. That has made crypto exchanges a crucial — and sometimes problematic — element of the rapidly emerging world of digital currencies. On the surface, they look a lot like stock markets, matching buyers with sellers and publishing prices. Yet in many ways they differ vastly, potentially exposing investors to risks they may not fully appreciate. That’s worrying regulators and prompting new exchanges to come up with ways to mitigate the dangers.
/jlne.ws/2rnxLjw

Amid Blockchain Hype, Few Deployments, Limited Interest, Survey Finds; Yet companies that ignore blockchain do so at their own peril, Gartner says
Angus Loten – Bloomberg
Inadequate technology, a skills shortage and a lack of interest, among other issues, are keeping companies away from blockchain technology – for now, Gartner Inc. reports.
/jlne.ws/2rlaO0f

Barron’s Alum Steve Sears’ Next Act: Helping Advisors
Steve Garmhausen – Barron’s
It looks like my old Barron’s colleague Steven Sears is finally making an honest living: He’s joined the startup world, with an eye toward helping financial advisors.
/jlne.ws/2jzELFm

Foes of market data fee hikes encouraged by SEC scrutiny
John McCrank – Reuters
A recent move by U.S. securities regulators demanding stock exchanges do a better job justifying price changes for public market data feeds could lead to more transparency around data costs, the head of one of the world’s largest trading firms said on Friday.
/jlne.ws/2rplevP

Should the Fed Create ‘FedCoin’ to Rival Bitcoin? A Former Top Official Says ‘Maybe’; If cryptocurrency and blockchain technology really are the future of money, the world’s central banks need to get involved, a former Fed governor argues.
Neil Irwin – NY Times
Many enthusiasts of Bitcoin and other cryptocurrencies are motivated by deep skepticism of the central banks that control the world’s money supply.
/jlne.ws/2rl7n9R

Cboe says VIX just needs more liquidity as manipulation rumblings continue
Rachel Koning Beals – MarketWatch
SEC and CFTC are taking a look, Bloomberg reported this week
That’s the stance taken Friday by the Chicago Board Options Exchange, part of Cboe Global Markets Inc. as allegations its widely used VIX stock-market volatility benchmark is manipulated continued to swirl.
/jlne.ws/2rqqYWa

OCC’s Morrison on combating the cyber threat to clearing; Cyber security chief eyes analytics and machine learning to help anticipate – and defend against – breaches
Dan DeFrancesco – Risk.net
Mark Morrison’s resumÈ speaks for itself, and that’s fortunate considering most of his previous employers can’t do it for him. The chief information security officer at the Options Clearing Corporation has an ideal CV for cyber security, with stints at the US Department of Defense, Office of the Director of National Intelligence, Defense Intelligence Agency, and National Security Agency.
/jlne.ws/2jAZ997

China is letting in foreign firms, but will the financial market really be open?; Analysts say recent flurry of activity is a response to looming trade war with the United States, but Beijing insists it is expanding access on its own terms
Frank Tang – South China Morning Post
China’s financial regulators are fast-tracking approvals for foreign firms to access some parts of the market, as Beijing tries to reposition itself as an “open” advocate of “free trade” amid an escalating row with the United States.
/jlne.ws/2rpAokD

Bank of Montreal Planning Actively Managed Exchange-Traded Funds
Kristine Owram – Bloomberg
ETF head Kevin Gopaul says he’ll avoid thematic strategies; BMO is Canada’s second-largest ETF company with C$48.5 billion
Bank of Montreal plans to start offering actively managed ETFS but will avoid the exotic niches that some of its competitors offer.
/jlne.ws/2rqJs8M

Exchanges, OTC and Clearing

Cboe Global Markets Reports April 2018 Trading Volume; Year – to – date ADV across all Cboe exchanges up over 2017; April ADV in options, U.S. equities and global FX up over year ago
Cboe
Cboe Global Markets, Inc. today reported April monthly trading volume and average revenue per contract (RPC)/net revenue capture data at www.cboe.com/monthlyvolrpc.
/jlne.ws/2rph1s6

Nasdaq CEO on gender parity: We need to fix the recruitment issue
Haley Draznin – CNN
Nasdaq CEO Adena Friedman tells CNN’s Poppy Harlow that we need to encourage more women to go into tech and finance in order to achieve gender parity in the financial industry.
/jlne.ws/2rqMIRH

Euronext Announces Volumes for April 2018
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for April 2018. Following the completion of the acquisition of the Irish Stock Exchange on 27 March 2018, the monthly volumes press release now includes historical data[1] and monthly figures on Euronext Dublin activity.
/jlne.ws/2jAVM27

Record Activity in Eurex Clearing’s Partnership Program
Eurex
In March, Eurex Clearing’s OTC Interest Rate Derivatives (IRD) segment saw record activity under the new Partnership Program. Volumes increased around elevenfold compared to March 2017 with a total of EUR 1.7 trillion notional cleared. The total notional outstanding reached EUR 4.7 trillion compared to EUR 1.2 trillion in March 2017.
/jlne.ws/2KB5fmk

TMX Group pledges support to flood relief efforts in New Brunswick
TMX
TMX Group has donated $15,000 to the Canadian Red Cross New Brunswick Floods Appeal, to provide emergency relief to help those affected by severe flooding in New Brunswick.
/jlne.ws/2rpajSM

TMX Group Equity Financing Statistics – April 2018
TMX
TMX Group today announced its financing activity on Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) for April 2018.
/jlne.ws/2jAWYCt

Appointment of Chairman Approved
HKEX
Reference is made to the announcement of Hong Kong Exchanges and Clearing Limited (“HKEX”) dated 26 April 2018 in relation to the appointment of Mrs Cha May-Lung, Laura as the Chairman of the Board of Directors of HKEX (the “Chairman”).
/jlne.ws/2rldCdN

New Hong Kong dual-share listings to be tradeable through Stock Connect schemes
South China Morning Post
Index compiler’s decision means mobile phone maker Xiaomi will join Hang Seng Composite Index, allowing both mainland Chinese and international investors to trade its shares
/jlne.ws/2jDBdCa

CapBridge names SGX’s Chew Sutat as non-executive director; bags S$5m Series A funding
Businesstimes.com.sg
SINGAPORE-based startup CapBridge announced it has appointed Singapore Exchange’s (SGX) Chew Sutat as a non-executive director.
/jlne.ws/2rq0qEi

Fintech

StratiFi Technologies Announces Series A Funding Round
Business Wire
StratiFi Technologies Inc., whose technology solutions help advisors improve investment outcomes for clients, while increasing the stability of their own businesses, has announced a Series A funding round that was led by Anthemis Group.
/jlne.ws/2jCkejK

Adapt or Die: What Can Brokers Do to Keep Pace in a Rapidly Evolving Industry?; Brokers’ reluctance to change is only hurting themselves, with clients demanding new technology and solutions.
Silviu Pojar – Finance Magnates
Brokers are continuously faced with difficult challenges, among them the ongoing evolution of technology and client approaches. Many retail venues have opted to just continue the status quo, leading to a stagnation of the mindset towards innovation and improvements in recent years.
/jlne.ws/2jBZ6K8

Goldman Sachs is setting up a research lab in Stockholm with a ‘no shoes’ policy
Oscar Williams-Grut – Business Insider
Goldman Sachs is tripling its headcount in Stockholm as part of a push to set up a fintech hub in the region.
/jlne.ws/2rq9NUJ

Metamako turns 5! A look back at our Top 5 achievements
by Annekathrin Hase – Metamako
It has been exactly 5 years, on the 6th May 2013, since we flipped the switch (no pun intended) and set out to transform networks. Dave, Charles and Scott opened an office in Sussex Street/Sydney together with a handful of world class engineers and Lalitha looking after operations … Metamako was born. We are intending to pop the corks across continents and office locations later today but wanted to share a little of the excitement and look back at some of the things we have achieved.
/jlne.ws/2jzSrAg

Cryptocurrencies

Ripple Hit With Class-Action Suit Over ‘Never Ending ICO’
Lily Katz – Bloomberg
Plaintiff alleges Ripple sold unregistered securities; Startup created XRP tokens ‘out of thin air,’ complaint says
Ripple Labs Inc., the fintech startup that controls the world’s third-largest cryptocurrency, was hit by a lawsuit alleging that it led a scheme to raise hundreds of millions of dollars through unregistered sales of its XRP tokens.
/jlne.ws/2jCnRpE

Will the Real Bitcoin Please Stand Up?
Jen Wieczner – Fortune
The great Bitcoin fork of 2017ówhen the original blockchain split last August to create Bitcoin Cashóappears to have ended pleasantly, at least for investors. The sum of the parts turned out to be greater than the whole: Within a week of the split, the two assets together were worth more than $15 billion in additional market value that didn’t exist prior to the fork.
/jlne.ws/2rqLO7L

J.P. Morgan Files Patent for Blockchain-Powered Payments
Polina Marinova – Fortune
Here we go. J.P. Morgan Chase has applied for a patent to facilitate payments between banks using the blockchain.
/jlne.ws/2rpy0dE

Top crypto exchange Coinbase prepares for a monster increase in trading
Kate Rooney – CNBC
In a response to New York Attorney General Eric Schneiderman’s inquiry into exchanges, Coinbase said it increased its transaction capacity by 1000 percent year over year. The private company doubled the size of its full-time engineering staff and has overhauled much of the the platform’s code to gear up for more activity. The leading U.S. marketplace for cryptocurrencies has been quietly preparing for a monster increase in trading volume.
/jlne.ws/2rp6gG4

Is Bitcoin a Safe Investment?
Ellen Chang – U.S.News & World Report
The recent volatility in bitcoin and other cryptocurrencies has made many investors wary along with the continued hacking of the exchanges where people buy and sell the digital currencies.
/jlne.ws/2jFDtch

Warren Buffett says cryptocurrencies ‘will come to bad endings’
MarketWatch
Billionaire investor Warren Buffett hasn’t become any fonder of cryptocurrencies. In reply to a question at Berkshire Hathaway’s annual meeting on Saturday, the chairman and chief executive reiterated …
/jlne.ws/2rpx3SC

Tokenised diamonds to test limits of cryptocurrency investing; Digital issues backed by Siberian assets the latest in a clutch of experimental sales
Don Weinland and Krithika Varagur – FT
A Russian state-owned fund has a novel strategy for attracting investment to the tundra and swamps of Siberia: selling its forests, gas, gold, even its fresh water and fish, one digital token at a time.
/jlne.ws/2jzktvJ

Cryptocurrency exchanges step away from Japan and Hong Kong; Big industry players find homes where regulators are not as strict
Masayuki Yuda – Nikkei
Asia is becoming a less attractive market for large cryptocurrency exchange operators due to regulatory uncertainties. At least three major exchanges have announced or voiced the idea of fleeing the region.
/jlne.ws/2rp5Iju

Telegram Token Sale Is Likely a Victim of Rising ICO Scrutiny
Camila Russo and Olga Kharif – Bloomberg
Telegram Group Inc., an encrypted messaging app, has reportedly scrapped plans to issue digital tokens in a public sale after raising a whopping $1.7 billion privately.
/jlne.ws/2Kzc1ci

Crypto Pioneers Head to Brooklyn to Reshape Finance
Rob Urban and David M Levitt – Bloomberg
Bushwick, Williamsburg neighborhoods sprout cultural ferment; Employees followed Ethereum guru Joseph Lubin to borough
The building looks abandoned, but inside the graffiti-covered door, 200 workers tap at laptops with the goal of reshaping the world.
/jlne.ws/2jB2zJd

Crypto Brokers Push for Transparency Before Rules Get Made
Todd White – Bloomberg
Quest for regulation may be a sign crypto market is maturing; Austria’s Bitpanda, eToro in U.K. both see benefit from rules
The latest calls to regulate the exploding cryptocurrency market come from an unusual place.
/jlne.ws/2jABVjx

Politics

FBI Probing Possible Banking Fraud by Trump Lawyer Michael Cohen: Report
David Morris – Fortune
As his client Donald Trump steamrolled political opponents in early 2016, lawyer Michael Cohen engineered access to as much as $774,000 in new credit. The FBI and federal prosecutors are reportedly investigating whether Cohen may have committed bank fraud in obtaining the credit lines, which some speculate may have been opened in anticipation of hush-money payments to protect Trump. Fraud charges could be used to compel Cohen’s cooperation in the ongoing Mueller investigation into Russian campaign meddling, or in criminal investigations targeting Trump.
/jlne.ws/2jCnvzk

Trump Repeats Threat of Federal Shutdown to Get His Border Wall
Toluse Olorunnipa – Bloomberg
Says at tax-focused event that trade relationships must change; Appearance in Ohio comes days before Republican primary vote
President Donald Trump renewed a threat to close down the federal government when current funding runs out in September if immigration reforms and funding for a wall on the U.S. border with Mexico aren’t forthcoming.
/jlne.ws/2rpfsdI

Life in Emmanuel Macron’s inner circle; Lots of reform, little sleep and a population to persuade: inside the president’s first year
Anne-Sylvaine Chassany – FT
Something was bugging the French president ó a small line in a draft bill about Romanian physiotherapists. The paragraph that caught Emmanuel Macron’s eyes a few months ago stated that a lack of response from the French regulator would mean the rejection of any foreign practitioner’s application to settle and work in France. Macron knew the inertia of the government all too well. The clause could become a protectionist tool that would go against his Europhile principles. So he requested further technical assessment. Civil servants were stunned. “We don’t expect that level of detail from a president,” one said.
/jlne.ws/2rpOZMS

Revealed: Trump team hired spy firm for ‘dirty ops’ on Iran arms deal; Israeli agency told to find incriminating material on Obama diplomats who negotiated deal with Tehran
Mark Townsend and Julian Borger – The Guardian
Aides to Donald Trump, the US president, hired an Israeli private intelligence agency to orchestrate a “dirty ops” campaign against key individuals from the Obama administration who helped negotiate the Iran nuclear deal, the Observer can reveal.
/jlne.ws/2jzFma8

Regulation

Ex-State Street employee accused by U.S. of defrauding insurer
Nate Raymond – Reuters
A former State Street Corp employee in Massachusetts was arrested on Friday and charged with participating in a scheme to defraud an insurance company by applying hidden fees to fixed income trades conducted for funds advised by the insurer.
/jlne.ws/2jCo8ZI

Insider Trading Needs a Law That Says What It Is; Practically all bad stuff with securities is lumped into a single statute.
Matt Levine – Bloomberg
Here are a blog post and related paper from Miriam Baer of Brooklyn Law School with the excellent title “Insider Trading’s Legality Problem,” describing one reason why it’s bad that there’s no actual statute defining and prohibiting insider trading:
/jlne.ws/2rprELu

Fed’s Quarles says paying ‘a lot’ of attention to spread of machine learning in finance
Howard Schneider – Reuters
Federal Reserve vice chair for supervision Randal Quarles said the central bank is in the early stages of studying how the expanding use of machine learning in the financial sector may change its regulatory approach, but that so far it fits within the existing regulatory framework.
/jlne.ws/2jC3b1b

Volatility InvestingóNot for the Faint of Heart
FINRA STAFF
The investor on the other end of the line was distraught. He put virtually all of his family’s assets into an exchange-traded product (ETP) that tracked the inverse of the performance of futures on the Cboe Volatility Index or VIX.
/jlne.ws/2rpw6tG

Proposed Rule Change to Create a $100 Fee and Honorarium for Late Cancellation of a Prehearing Conference
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rules 12500 and 12501 of the Code of Arbitration Procedure for Customer Disputes (“Customer Code”) and FINRA Rules 13500 and 13501 of the Code of Arbitration Procedure for Industry Disputes (“Industry Code” and together, “Codes”), to charge a $100 per-arbitrator fee to parties who request cancellation of a prehearing conference within three business days before a scheduled prehearing conference.
/jlne.ws/2rp62P5

Investing and Trading

A Small College’s Endowment Manager Beat Harvard With Index Funds; How little Carthage College surpassed the Crimson giant’s returns on its $37 billion trove, and most others.
Janet Lorin – Bloomberg
From his home office in Charlotte, one of the most successful investors in higher education plies his trade in blissful obscurity. Bill Abt employs no stable of hotshot bond traders. He doesn’t dabble in the fanciest Silicon Valley venture capital funds, hedge funds, or the latest computer-driven brainchildren of Ivy League physicists and mathematicians.
/jlne.ws/2JWykYk

Fight the Faangs, not China; The Trump administration must break the power of big tech
Rana Foroohar – FT
The US and China are heading in different directions when it comes to technology, the sector that will drive global growth over the next several decades. Last week’s demands by US officials that China eliminate state support for its own high tech industry won’t fly ó Beijing has made it very clear that it will never disband its China 2025 plan, which aims to make the Middle Kingdom independent from American technology within the next few years.
/jlne.ws/2jFCJ6Z

Buying and Holding the Market Has Many Pitfalls; Trying to mimic the performance of the S&P 500 leaves you overexposed to overvalued companies, and underexposed to undervalued ones.
Aaron Brown – Bloomberg
Perhaps the best-known piece of financial advice is that retail investors should buy and hold the market, which in practice usually means owning an index mutual fund or exchange-traded fund that mimics the performance of the S&P 500. This has been a winning strategy for investors over the decades, outperforming fads that come and go and paying for active management.
/jlne.ws/2roGpOm

Nestle Pays $7.2 Billion to Sell Starbucks Coffee
Thomas Mulier and Corinne Gretler – Bloomberg
CEO Mark Schneider makes Nestle’s third-largest acquisition; Upfront payment is for marketing licenses, no fixed assets
For years, a smoldering George Clooney would sip his espresso and ask: “Nespresso…what else?” Turns out the answer is: Starbucks.
/jlne.ws/2rr3tw0

The threat of secular stagnation has not gone away; The economy is prone to sluggish growth ó if the past few years are anything to go by
Save to myFT
Lawrence Summers – FT
Unemployment in the US is below 4 per cent and growth in the economy is accelerating. By recent standards growth in Europe and Japan is also strong. In these circumstances many believe the idea of secular stagnation can be written off.
/jlne.ws/2jANoj9

Institutions

Fidelity Employees Fired After Alleged Misuse of Reimbursement Programs; In some instances, employees purchased computer equipment and immediately canceled their orders but still collected the company’s reimbursement
Sarah Krouse and Rob Barry – WSJ
Fidelity Investments has fired or allowed more than 200 employees to resign over alleged misuse of workplace-benefits programs, according to people familiar with the matter.
/jlne.ws/2jBNQgT

Deutsche Bank to Close Houston Office, Cut About 70 Jobs; Under new CEO Christian Sewing, the German lender is cutting investment-banking staff to reduce costs
Jenny Strasburg – WSJ
Deutsche Bank AG DB 1.10% will close its Houston office and cut around 70 investment-banking jobs primarily focused on advising oil-and-gas companies in the U.S., according to people familiar with the matter and an internal memo.
/jlne.ws/2roSoLV

Deutsche Bank to move NY headquarters from Wall Street
Reuters Staff
Deutsche Bank AG will shift its New York headquarters from Wall Street to a location midtown, at a time when Germany’s largest bank is scaling back its U.S. operations.
/jlne.ws/2rl5sCb

Commonwealth Bank admits it lost backup data for 20m accounts; The bank, one of the Australia’s big four, assures customers the information has not been compromised
Australian Associated Press
The Commonwealth Bank is reportedly facing renewed investigations after admitting it lost backup data on tape for more than 15 years of customer statements in 2016, affecting almost 20 million accounts.
/jlne.ws/2jAjTxS

Carlyle set to close new Asia fund at $6.5 billion: sources
Sumeet Chatterjee, Kane Wu – Reuters
Carlyle Group (CG.O) is set to close its biggest-ever Asia private equity fund at $6.5 billion, people with direct knowledge of matter said, in a deal that adds to the record levels of funds seeking deals in the region.
/jlne.ws/2rpMjiz

Goldman’s $1 Billion Bankers Are Benchmark in Asia’s Wealth Race
Chanyaporn Chanjaroen – Bloomberg
Relationship managers at private banks running larger pools; Goldman Sachs topped Asian private banks in assets per manager
For years, Asia’s biggest private banks have been on a hiring spree to keep pace with the ranks of newly minted millionaires. Now, they’re squeezing more out of their bankers.
/jlne.ws/2jCHjTm

Regions

Greek Banks’ Clean Bill of Health Frees Bailout Funds
Marcus Bensasson, Christos Ziotis and Paul Tugwell – Bloomberg
ECB says largest lenders had sufficient capital in stress test; Results leave 20 billion euros of bailout cash untouched
Greece’s biggest banks emerged unscathed after a stress test, giving European policy makers one less worry as they plan for the end of the nation’s latest bailout in August.
/jlne.ws/2rqGrFu

China opens iron ore futures market to foreigners; Glencore among investors despite volatility concern
Tom Hancock and Neil Hume – FT
China opened trading in Dalian iron ore futures to overseas investors on Friday, aiming to increase its pricing influence over the commodity of which it is the world’s largest importer.
/goo.gl/sFc4K6

How to Lose $20,000 in Hong Kong’s IPO Slot Machine; Making a killing on day one is far from guaranteed.
Shuli Ren – Bloomberg
Any stock market is a dead pool without IPOs. But too many share sales can give investors indigestion. Take Ping An Healthcare & Technology Co., or Good Doctor. It struggled on its first day on Friday, despite being 653 times oversubscribed. Its performance is in sharp contrast to Tencent Holdings Ltd. spinoff China Literature Ltd., which soared 86 percent when it debuted in November.
/jlne.ws/2jC8bmy

At World Bank, China Moves to the Grown-Up Table; Borrowing less and lending more: This is what it looks like when a “developing nation” develops.
Daniel Moss – Bloomberg
The World Bank will scale back loans to China. No matter, China wins anyway.
/jlne.ws/2jyUC7f

China Is Quietly Setting Global Standards; A little-noticed effort could be a very big deal.
Andrew Polk – Bloomberg
High-level trade talks last week between the U.S. and China grabbed headlines around the world, but in many ways they were beside the point. In the years ahead, tariffs and industrial policy — the main focus of the talks — will probably matter less in the growing competition between the two countries, while another, much quieter initiative will matter more.
/jlne.ws/2roPvL5

One of India’s largest jewellery chains is caught in a stock market spiral
Suneera Tandon – Quartz India
Over the last five months, PC Jeweller has been caught in a spiral that has wiped off billions in investor wealth. To be precise, since Jan 19, 2018, the jewellery chain from New Delhi has lost over 75% of its market value, worth $2.8 billion up until last week, on the BSE.
/jlne.ws/2jAjgo0

EU Set to Settle Antitrust Case Against Gazprom Soon; Move could be seen as bending to the Russian state-owned company
Natalia Drozdiak and Emre Peker – WSJ
The European Union is poised to settle its long-running antitrust case against PAO Gazprom as soon as this month, according to people familiar with the discussions, a move that could be perceived as bending to the Russian state-owned energy giant and at a time of rising tensions between Moscow and the West.
/jlne.ws/2rpgFlb

Chinese banks are big. Too big?
Jeff Spross – The Week
Lots of things are bigger in China: the population, the IPOs, the electrical dams, the Starbucks, even the mosquitos. Turns out the banks are bigger too.
/jlne.ws/2rnWa8q

US hedge funds drive surge in Asia investor activism; Number of campaigns up almost tenfold since 2011 amid search for higher returns on risk
Don Weinland in Hong Kong and Leo Lewis in Tokyo – FT
Activist investment campaigns have surged almost tenfold in Asia since 2011 as US hedge funds seek higher returns, Japan’s corporate governance reforms begin to bite and Asia’s tycoon families slowly loosen their grip on their companies.
/jlne.ws/2jCeTJf

Brexit

Brexit and bankruptcies to raise UK trade credit insurance prices; Euler Hermes chief executive expects cost of protection to increase 5%
Oliver Ralph, Insurance Correspondent – FT
Brexit and a string of bankruptcies are driving up the cost of UK companies protecting against their customers going out of business, the head of the world’s largest credit insurer has said.
/jlne.ws/2jCtGn0

Miscellaneous

Yes, It’s Bad. Robocalls, and Their Scams, Are Surging.
Tara Siegel Bernard – NY Times
It’s not just you. Those pesky robocalls ó at best annoying disturbances and at worst costly financial scams ó are getting worse.
/jlne.ws/2rqcPrT

John Lothian Newsletter

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John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

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