US threatens to bar EU banks from exchanges

Oct 18, 2018

US threatens to bar EU banks from exchanges

Oct 18, 2018

First Read

Hits & Takes
JLN Staff

FIA Expo, which began Wednesday, is an international conference, with participants coming to Chicago from all over the world, so of course Brexit and reconciliation of EU and US rules were big topics.

CFTC Chairman Christopher Giancarlo woke up the crowd when he criticized the EU’s planned EMIR amendments, calling them “unprecedented and wholly unacceptable.” He said he hoped to be able to negotiate changes, but held out the threat – if that doesn’t work – of stopping EU banks from using US exchanges. ~SR

The Exchange Leaders panel was lively, with Nasdaq CEO Adena Friedman giving a solid and transparent explanation of the 107 million-euro ($125 million) loss on the exchange’s Nordic power market. Hong Kong Exchanges and Clearing Limited CEO Charles Li received audience applause for his extended metaphor calling the relationship between China and the US “an unnecessary divorce.” He said, “There are ways to sort this out; let’s sleep in different bedrooms, and don’t slap people in the face because it can lead to something nobody wanted.”~SR

At the Meet The Innovators Panel, six judges from the financial and technology industries reviewed presentations by five innovators culled from a larger group of 40. First up was Drawbridge Lending, which plans to offer cash loans secured by digital assets, with the loans hedged using futures and options products. FreightWaves, started by a former trucker, has created a “market dashboard” providing fundamental transportation data that will allow companies to hedge their transportation costs in what he believes is an incredibly fragmented market. iComply offers a crypto solution to know your customer problems for companies who want to launch a token, and MSR Indices plans to bring transparency, liquidity and lowered costs to investable indexes with a library of algorithms from which people can create custom indices. Finally, Tookitaki, which means “hide and seek” offers a solution to “huge inefficiencies” in reconciliation and anti-money laundering issues using both supervised and unsupervised self-learning. It promises a 50 percent improvement in reconciliation matching and 99 percent accuracy in detecting breaks in reconciliation. The winner will be decided later today.~SR

FIA CEO Walt Lukken in his opening comments said “our markets are not defined by borders—they are defined by the ingenuity and determination of buyers and sellers—no matter their location.”~JJL

FIA CEO Walt Lukken had his required Pat Kenny reference in his first 5 minutes in opening comments at FIA EXPO, maybe in the 3rd sentence.~JJL

Here is a picture of the hardy softball players who participate in the CQG charity softball game in support of FIA Cares.~JJL

Modern Trader Magazine, formerly Futures Magazine, has not published a new issue since June of this year.~JJL

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FIA Statement on Basel Committee’s Consultation on Capital
FIA
FIA President and CEO Walt Lukken today made the following statement regarding the Basel Committee on Banking Supervision’s announcement of a consultation on the leverage ratio treatment of client cleared derivatives:
/jlne.ws/2J2uUUr

***** Written with a straight face~JJL

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The Onion’s Guide To Blockchain Technology
The Onion
Blockchain technology forms the foundation for cryptocurrencies such as Bitcoin, Dogecoin, and Ethereum, but it can be difficult to understand how it actually works. The Onion answers common questions about blockchain technology.
/jlne.ws/2OAJPeU

***** Not written with a straight face.~JJL

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Wednesday’s Top Three
The top read story yesterday was about the curious case of Don Wilson v. the CFTC, which is now five years old. Crain’s Chicago Business’ Could a ruling in CFTC v. DRW finally be in the offing? was our top story of the day. Second was the The Wall Street Journal’s SEC Ruling Takes Aim at Stock-Exchange Profits. This might make some traders happy and some exchanges mad. The third most read piece was Crain’s observation that the banking street in Chicago is losing its banks in Chicago financial district poised for big change as banks exit

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Lead Stories

US threatens to bar EU banks from exchanges; CFTC escalates dispute over Brussels’ attempt to impose oversight of clearing houses
Philip Stafford in London – FT
One of the US’s top regulators has threatened to stop European banks from using US futures markets if the EU refuses to water down post-Brexit plans to oversee clearing houses.
/jlne.ws/2OACTy7

Libor-Rigging Guilty Verdicts Bolster U.S. Bid to Punish Traders
Chris Dolmetsch – Bloomberg
Two ex-Deutsche Bank traders face prison after jury convicts; Duo tried to manipulate key benchmark to aid trading positions
A U.S. crackdown on the people who rigged key financial-market benchmarks suffered a stinging setback last year when an appeals court tossed out the conviction of two former Rabobank Groep traders.
/jlne.ws/2OxpNBF

Bank of America Is Missing Out on Wall Street’s Boom; A decade after its Merrill Lynch purchase, the bank struggles with investment banking unit
Rachel Louise Ensign and Liz Hoffman – WSJ
Bank of America Corp.’s BAC 1.30% purchase of Merrill Lynch & Co., struck on the panic-filled 2008 weekend that Lehman Brothers failed, was supposed to make the lender a top-flight global investment bank.
/jlne.ws/2Ovfyhf

Bitcoin Trades at $300 Premium on Controversial Crypto Exchange
Olga Kharif and Matthew Leising – Bloomberg
Bitfinex suffers from lack of transparency surrounding Tether; Exchange temporarily paused fiat currency deposits last week
Bitcoin continues to trade at nearly a $300 premium on the Bitfinex cryptocurrency exchange compared with rival platforms on speculation traders are dumping the so-called stable coin Tether in favor of the world’s largest cryptocurrency.
/jlne.ws/2J43u0w

Lessons from two commodity defaults; Regulators and exchanges need to learn from the Greenhat/PJM and Norwegian Nasdaq defaults
Vincent Kaminski – Risk.net
The energy markets on both sides of the Atlantic have been recently roiled by two cases of default related to large size trading positions taken by relatively small firms. The two events took place in markets of different design and operating under different regulatory regimes, but they share many commonalities and offer useful lessons to commodity traders and risk managers.
/jlne.ws/2OwxtnS

Goldman Wades Deeper in Crypto, Betting on BitGo With Billionaire Mike Novogratz
Lily Katz – Bloomberg
Startup guards digital currencies for institutional investors; Bank calls custody a ‘logical precursor’ to market making
Goldman Sachs Group Inc. and a venture founded by one of its former partners, billionaire Mike Novogratz, are investing in cryptocurrency custodian BitGo Holdings Inc., as the bank’s deep-pocketed clients keep asking about secure ways to hold those assets.
/jlne.ws/2OuyY5S

Invesco to Buy OppenheimerFunds from MassMutual; Asset manager also reports increase in profit, stock buyback
Nick Kostov – WSJ
Invesco Ltd. said Thursday it has agreed to buy rival money manager OppenheimerFunds Inc. for roughly $5.7 billion in stock from Massachusetts Mutual Life Insurance Co.
/jlne.ws/2J87368

EU derivatives market valued at EUR660 trillion; Steven Maijoor says EMIR clearing obligation is working as data shows derivatives clearing rates are increasing significantly.
Hayley McDowell – The Trade
The derivatives market in the European Union has been valued at EUR660 trillion, with interest rate derivatives dominating the market
/jlne.ws/2J8bwWo

Exchanges, OTC and Clearing

“We made the industry much safer” – FIA Expo wrap-up (part I)
Eurex
Lately, clearing is the center of everything. No wonder, as it is only a few weeks ago that we as an industry remembered the tenth anniversary of the Lehman default. Central counterparties (CCP) have been making headlines ever since. During the first day of the 34th Annual Futures & Options Expo in Chicago, clearing even accounted for the major part of the exchange leaders panel that our CEO Thomas Book spoke at.
/jlne.ws/2J37Q8c

Eurex Clearing CloudPME – increased margin transparency, no entry barriers, free-of-charge
Eurex
Just imagine you could use a free-of-charge open access, margin estimation service. Good news is, you can! Eurex now enables clients and prospective clients to calculate their portfolios under the Prisma margin methodology. We spoke to Andreas Franke, Head of Unit, Risk Methodology OTC, about this new service offer.
/jlne.ws/2J385jC

New Liquidity Provider scheme for Three-Month SARON® Futures
Eurex
Effective 29 October 2018, the following measures of Eurex Clearing will come into effect:
/jlne.ws/2J5bWwE

Money market derivatives: New Liquidity Provider scheme for Three-Month SARON® Futures
Eurex
This circular announces a new Liquidity Provider (LP) scheme for Three-Month SARON® Futures. The new scheme will run from 29 October 2018 until 31 December 2020.
/jlne.ws/2J4TofR

STOXX® licenses Global Fintech Index to Sumitomo Mitsui Asset Management
Deutsche Börse Group
STOXX Ltd., operator of the index business of Deutsche Börse Group and a global provider of innovative and tradable index concepts, has licensed the STOXX Global Fintech Index as the basis for an investment fund to Sumitomo Mitsui Asset Management.
/jlne.ws/2J3sJA1

LSEG’s Turquoise cuts rebates as maker-taker debate in the US rages on
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) multilateral trading facility (MTF) Turquoise is set to cut rebates on its lit order book, while maker-taker pricing on exchanges in the US continues to be the subject of critical debate.
/jlne.ws/2OwQaaY

CME Group saw a 41% increase in average daily volume for bitcoin futures in Q3 2018
Steven Zheng – The Block Crypto
The financial derivatives marketplaces announced that the average daily volume for bitcoin futures grew from 3,577 in Q2 2018 to 5,053 in Q3 2018, a 41% increase. CME Group also saw a 19% increase in open interest for its bitcoin futures from 2,405 in Q2 2018 to 2,873 in Q3 2018. (Source: CME Group)
/jlne.ws/2J3vjWX

Shares of US exchanges slip as data fees battle intensifies; Rebuke from regulator signals tougher line on bourses and backing for banks
Philip Stafford in London, Nicole Bullock in New York and Kadhim Shubber in Washington – FT
Shares of US stock exchanges fell after regulators sided with banks and took aim at the fees the exchanges charge for valuable data on the world’s biggest equity market.
/jlne.ws/2Ovd3Ma

NYSE Responds to SEC Decision on Certain Market Data Fees
ICE
Following the SEC decision regarding market data fees relating to NYSE Arca book, as published on October 16, the NYSE has put forward its official statement on the matter:
/jlne.ws/2OtHVMS

PanXchange Celebrates Anniversary of Frac Sand Launch; October 2018 Marks Many Milestones for the Company
PanXchange via Medium
?This month, PanXchange (PX), a Denver-based OTC physical commodity exchange and a market structure solutions provider, marks its one year anniversary since going live in the physical frac sand market.
/jlne.ws/2J58phC

SIX completes shut down of SLS block trading platform; SIX Swiss Exchange decommissioned its SLS dark pool for block liquidity launched in partnership with Liquidnet on 15 October.
Hayley McDowell -The Trade
SIX Swiss Exchange Group has decommissioned its dark pool for block liquidity launched in partnership with Liquidnet for the buy-side in 2011.
/jlne.ws/2J4BeuW

Fintech

Can This Blockchain-Based Fintech Disrupt International Payments After $30M Exchange IPO?
Roger Aitken – Forbes
Australian fintech company Identitii that enables the secure overlay of “transaction-level” detail on top of financial messages using a private blockchain, commenced trading on the Australian Stock Exchange (ASX) today in an initial public offering (IPO) that put a market capitalization of A$41 million (c$29.23 million) on the business.
bit.ly/2NJXcE8

What The IoT Can Learn From Fintech
Michael Babushkin – Forbes
We are still only scraping the surface of what we have to learn and gain from the internet of things (IoT). Conversely, the IoT also has much to learn from other industries to make its vast task simpler. Collecting, processing, compressing, storing and retrieving data is an intrinsic part of the IoT, yet some industries, such as the financial technology (fintech) industry, have been in the business of carrying out those functions for years, even decades. I believe it is time for the IoT people to talk to and learn from the experience of those other industries.
bit.ly/2NQ2mOO

Challenges in fintech regulation
Teresa Donnellan – SmartBrief
The changing regulatory needs of the financial services industry and the potential of regulatory sandboxes were discussed by regulators and fintech representatives alike at the Fintech Ideas Festival Policy Series in Washington, D.C., last week.
bit.ly/2NNJHmL

No need to fight over the OCC’s fintech charter
Brian Knight – American Banker
The Office of the Comptroller of the Currency’s decision to move forward with a new banking charter to benefit certain lenders and money transmitters that utilize innovative technology and do not accept federally insured deposits (the so-called “fintech charter”) has been controversial to say the least. Both sides’ arguments have merit and acknowledging each of them points toward a way to resolve the bank wars that have bedeviled efforts to modernize regulation.
bit.ly/2NKOV2B

Bank Regulator Sees Action on Fintech Charters in Mid-2019
Bloomberg
The Office of the Comptroller of the Currency should be ready to approve or deny bank charters for fintech companies by the middle of next year, agency chief Joseph Otting said Oct. 17.
bit.ly/2NKPIAB

Fintech bolsters Bahrain’s bid to revive finance hub status; The kingdom is trying to carve out a niche amid tough competition from regional rivals
Simeon Kerr – FT
Bahrain rose to prominence as a financial centre during Lebanon’s civil war more than 30 years ago, usurping Beirut as regional hub by positioning itself as a global offshore banking centre with easy access to Saudi Arabia. But Dubai wrested this position from the kingdom a decade ago. “Dubai stole the services sector away from Bahrain,” in the words of one banker.
/jlne.ws/2P9cK5R

Goldman Sachs, Two Sigma and Citi invest further $20 million in data science startup; Crux Informatics closes second funding round raising $20 million from Goldman Sachs, Two Sigma and Citi.
Hayley McDowell – The Trade A data science and engineering startup has secured a further $20 million investment from Goldman Sachs, Two Sigma and Citi in a second funding round.
/jlne.ws/2J3RDQ9

Cryptocurrencies

DTCC Test Shows Blockchain Can Support 100m Trades Per Day
David Kimberley – Finance Magnates
The Depository Trust & Clearing Corporation (DTCC), a post-trade market infrastructure provider for the financial services industry, announced the results of a benchmark study on Wednesday which demonstrated for the first time ever that distributed ledger technology (DLT) is capable of supporting average daily trading volumes in the US equity market of more than 100 million trades per day.
bit.ly/2NLXXg0

Blockchain media startup Civil is issuing full refunds to all buyers of its cryptocurrency
Kate Clark – TechCrunch
Many doubted The Civil Media Company’s ambitious plan to sell $8 million worth of its cryptocurrency, called CVL. The skeptics, as it turns out, were right. Civil’s initial coin offering, meant to fund the company’s effort to create a new economy for journalism using the blockchain, failed to attract sufficient interest. The company announced today that it would provide refunds to all CVL token buyers by October 29.
/tcrn.ch/2yrzUxX

No one knows what Civil’s failed token sale means
Russell Brandom – The Verge
Yesterday, the world’s most ambitious media blockchain company had a very public embarrassment. It was the last day of a public token sale for the Civil Foundation, a media project using blockchain to launch a new generation of ad-free media startups. But when it came time to sell the token at the center of it all, the project came up short.
bit.ly/2P8G6EA

Prestigious Accounting Association Takes On Blockchain Technology
Andrea Tinianow – Forbes
There is global interest in what a shared distributed ledger means for the accounting industry. With more than 7,000 members worldwide, one need look no further than the American Accounting Association — the premier organization of accounting academics—for proof.
bit.ly/2NN9lbs

Can This Blockchain-Based Fintech Disrupt International Payments After $30M Exchange IPO?
Roger Aitken – Forbes
Australian fintech company Identitii that enables the secure overlay of “transaction-level” detail on top of financial messages using a private blockchain, commenced trading on the Australian Stock Exchange (ASX) today in an initial public offering (IPO) that put a market capitalization of A$41 million (c$29.23 million) on the business.
bit.ly/2QXTVmv

Essential Advice for Businesses Considering the Blockchain
Robert Hackett – Fortune
Blockchain technology began with Bitcoin, but it has since been coopted by businesses as the preferred brand name for all sorts of cryptographically spruced up databases. Just about every corporate innovation program is experimenting with, or at least eyeing, the trend—look, boss, we’re innovative! But how should companies really approach the technology, if at all?
/for.tn/2QX5r1x

How Savvy Crypto Traders Gamed Coinbase’s Latest Listing for a 35% Payday
Sam Ouimet – Coindesk
If there’s money to be made in the crypto markets, you can bet traders will be the first on the scene. Such was the case at least last week, when Coinbase Pro, the cryptocurrency trading platform operated by San Francisco startup Coinbase, announced it would list the cryptocurrency 0x (ZRX), a move that put the “Coinbase effect” on display when ZRX surged nearly 40 percent on the news.
bit.ly/2AfRztH

Politics

There’s a Lot of Gasoline, But Not Enough for Trump; Pump prices are stubbornly high just ahead of the midterms, despite a surge of fuel in storage.
Liam Denning – Bloomberg
Some good news for President Donald Trump ahead of the midterm elections: There is plenty of gasoline sitting around. Some bad news: Average pump prices are still almost $3 a gallon. Some worse news: Pump prices have more to do with Middle East intrigue than Midwest inventory.
/jlne.ws/2OzyX0L

Trump’s Crackdown on Leaks Snares Senior Treasury Official
Saleha Mohsin , David Voreacos , and Tom Schoenberg – Bloomberg
Manafort, Rick Gates, Russian Embassy files given to reporter; Most recent article tied to leak was published Monday
President Donald Trump’s hunt for leakers in his administration snared a senior Treasury Department employee who was charged with giving a journalist bank records about suspicious transactions involving Paul Manafort, Rick Gates, and accused Russian agent Maria Butina.
/jlne.ws/2OzyNGH

Donald Trump is destroying the American brand
Matt Bai – National Political Columnist,Yahoo News
Before he was treasury secretary, Steve Mnuchin was a movie producer, so maybe he’d appreciate that when I think about him showing up at this “Davos in the Desert” confab in Saudi Arabia next week, my mind goes to “Lost in Translation,” the film with Bill Murray and Scarlett Johansson.
/jlne.ws/2J5fOOb

Twitter releases 10m tweets from fake news probe; Social media group publishes cache to allow independent analysis by researchers
Camilla Hodgson in London – FT
Twitter announced on Wednesday it had released a data cache of more than 10m tweets from accounts suspected of being involved in disinformation campaigns, to allow it to be independently investigated.
/jlne.ws/2OtJ334

Saudi Arabia is putting money in Trump’s pocket. Is that shaping U.S. policy?
Paul Waldman – The Washington Post
As hard as it is to resist writing about the fact that on Tuesday the president of the United States called the adult film actress to whom he paid hush money “Horseface,” I want to focus on a different aspect of this presidency that we’re seeing play out right now.
/jlne.ws/2OtFXfv

Trump Attacks the Weak Link Powell Can’t Ignore in Fed Rate Plan
Rich Miller – Bloomberg
President questions why rates are rising when inflation is low; Fed chair says inflation may not be best signal of overheating
Donald Trump has attacked the soft underbelly of the Federal Reserve’s campaign to raise interest rates, exposing what Jerome Powell himself probably recognizes is a potential vulnerability.
/jlne.ws/2OuXZOD

Bank Push for Benchmark-Rate Delay Makes Headway in Brussels
Alexander Weber and Silla Brush – Bloomberg
EU parliament, member states consider extending life of Eonia; Rider on extension may be attached to carbon benchmarks bill
Banks are finding allies in Brussels with their call for extra time to adopt a new euro benchmark lending rate as Europe tries to put a spate of rigging scandals behind it.
/jlne.ws/2Oyp96U

Regulation

U.S. watchdog threatens retaliation over EU clearing rules
Michelle Price and Huw Jones – Reuters
U.S. banks and securities houses could be barred from trading on exchanges in the European Union if the bloc refuses to water down “irresponsible” proposals for regulating foreign clearing houses, a top U.S. regulator said on Wednesday.
/jlne.ws/2OvgLVP

Stamford hedge fund co-founder charged with defrauding investors of $19.6M
Kevin Zimmerman – WestFairOnline.com
Jason Rhodes, co-founder of Stamford hedge fund Sentinel Growth Fund Management, was arrested on Oct. 16 on conspiracy, securities fraud, wire fraud and investment adviser fraud charges.
/jlne.ws/2OtF1I1

Investment Fund Co-Founder From Area Charged In Multi-Million Dollar Fraud
Zak Failla, Joe Lombari – DailyVoice.com
The former co-founder of a multi-million dollar hedge fund is facing charges claiming that he lied to his investors and misappropriated nearly $20 million as part of a Ponzi scheme.
/jlne.ws/2Oxlw1m

SEC mulls consultation on easing quarterly reporting rules
Katanga Johnson – Reuters
The U.S. Securities and Exchange Commission (SEC) said in a notice that it will consider seeking public comment on ways to ease the quarterly reporting burden on publicly listed companies.
/jlne.ws/2OxqhHZ

The Treasury’s currency report was all about China.
Colby Smith
For the fourth time, the Treasury department has denied President Trump what he wants: to label China as a currency manipulator.
/jlne.ws/2J5hfvY

Former Deutsche Bank traders found guilty in Libor rigging case; New York jury convicts pair in victory for US justice department
Kadhim Shubber in Washington – FT
Two former Deutsche Bank traders were found guilty on Wednesday for their role in rigging the Libor benchmark rate.
/jlne.ws/2J2oNQ2

Risk of Bank-Like Regulation Fades for Big Financial Firms; The federal council overseeing financial stability rescinded oversight of Prudential Financial
Ryan Tracy – WSJ
U.S. regulators released Prudential Financial Inc. PRU 1.91% from federal oversight Wednesday, the strongest signal yet that the risk of heightened post-financial-crisis supervision is fading for firms outside the banking sector.
/jlne.ws/2J8b6zi

ASIC cancels AFS licence of retail OTC derivative issuer Direct FX Trading Pty Ltd* for serious compliance failures
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of Direct FX Trading Pty Ltd (AFS licence 305539) (Direct FX) following serious and continued compliance failures.
/jlne.ws/2J6nf7M

ASIC updates guidance as crowd-sourced funding regime extends to proprietary companies
ASiC
ASIC has released updated regulatory guides to coincide with the extension of the crowd-sourced funding (CSF) framework to eligible proprietary companies. This starts on 19 October 2018.
/jlne.ws/2J5RDiq

ESMA data analysis values EU derivatives market at EUR660 trillion with central clearing increasing significantly
ESMA
The European Securities and Markets Authority (ESMA) today publishes its first Annual Statistical Report (Report) on the European Union’s (EU) derivatives markets. The Report, based on data submitted under the European Markets and Infrastructure Regulation (EMIR), provides the first comprehensive market-level view of the EU’s derivatives markets, which in 4Q17 amounted to EUR660tn of gross notional outstanding transactions.
/jlne.ws/2J4BR7M

SEC Announces 2018 Government-Business Forum to Be Held at The Ohio State University
SEC
The Securities and Exchange Commission today announced it is partnering with the National Center for the Middle Market at The Ohio State University Max M. Fisher College of Business to host the SEC’s annual Government-Business Forum on Small Business Capital Formation on Dec. 12. This annual forum provides a platform to highlight additional measures to improve small business capital formation.
/jlne.ws/2J7crpK

Remarks of Chairman J. Christopher Giancarlo at FIA Expo Chicago, Illinois; “A Week in the Life of the CFTC”
CFTC
Thank you. I especially want to thank the organizing committee, Walt Lukken, and the rest of the speakers. Thank you for the invitation to speak here. This expo is advertised as the “hub” of the derivatives and swaps universe. Indeed, it is, and I am pleased to have this time with you.
/jlne.ws/2J9Tx1T

CFTC Chairman Giancarlo Announces Sponsors for Advisory Committees
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced today that Commissioner Dawn Stump will sponsor the Global Markets Advisory Committee and Commissioner Dan Berkovitz will sponsor the Energy and Environmental Markets Advisory Committee.
/jlne.ws/2J4BWIC

Investing and Trading

Are Jumpy U.S. Equities Hiding a Nasty Surprise?; Investors have started to take notice of rising interest rates.
Peter Coy – Bloomberg
It was quiet out there in the markets—spooky quiet. All five of the calmest quarters for U.S. stocks in the past 20 years have occurred since the start of 2017. Then came Oct. 10-11, when markets were hit by a storm that came out of the clear blue sky. The S&P 500 fell 5.2 percent over two days. That represented the fifth-biggest increase in volatility in the almost 90-year history of the index and its predecessors, according to Rocky Fishman, a Goldman Sachs Group Inc. equity derivatives strategist.
/jlne.ws/2OtGvlz

Investors Are Digging Gold Again; The ascent of companies like Barrick Gold, AngloGold Ashanti and Acacia Mining marks a turnaround from recent episodes of jittery markets
Riva Gold – WSJ
In times of market turmoil, investors often embrace gold. And when that happens, gold-mining stocks tend to do even better.
/jlne.ws/2J2pKrA

Institutions

Is Your Bank Ready For The Next Crisis?
William Baldwin – Forbes
Equity makes banks stable. Maybe we should go all out with 100% equity. The campaign for financial deregulation should have you worried. Is bank supervision tight enough to prevent another meltdown? Is it loose enough to let the economy grow? The Trump Administration will tell you that it is scoring on both counts, but you may harbor doubts.
/jlne.ws/2OyEMLK

Danske Bank forced to resume CEO search after regulator’s rejection
Stine Jacobsen – Reuters
Danske Bank (DANSKE.CO), reeling from a money laundering scandal, will resume its search for a new chief executive after a Danish regulator rejected its internal candidate for the job, and analysts said it would be forced to look outside the bank.
/jlne.ws/2OuX14X

Prudential Financial taken off US ‘too big to fail’ list; Ending of extra-close supervision further undermines Obama-era post-crisis regulation
Alistair Gray in New York – FT
Washington is ending its “too big to fail” supervision of Prudential Financial, further undermining the post-crisis financial regulatory regime introduced by former President Barack Obama.
/jlne.ws/2OAErbp

HSBC Gears Up for China Listing Through Shanghai-London Link
Benjamin Robertson , Alfred Liu , and Viren Vaghela – Bloomberg
Bank is first U.K. firm to confirm interest in program; Trading link will let companies cross-list in each market
HSBC Holdings Plc is examining plans for the upcoming Shanghai-London trading link, a move that could see Europe’s largest bank list shares in China.
/jlne.ws/2OypyWY

Goldman and Morgan Stanley Want to Lend the Ultra-Rich More Money
Sonali Basak – Bloomberg
Banks multiplied the size of their private-bank loan books; Goldman says it’s hiring for international lending push
For Goldman Sachs Group Inc.’s millionaire clients, it can take the firm 5 minutes to underwrite a loan to start a new business or pay down taxes. At Morgan Stanley, bankers are keen to give you bridge financing so you can bid for your mansion in cash.
/jlne.ws/2Ox44Kp

Edward Lampert, the Hedge-Fund Star Who Bet on Sears, Is Unrepentant; He made billions for investors in his ESL Investments fund by bucking naysayers. At the storied American retailer, his instincts proved wrong.
Suzanne Kapner, Rachael Levy and Juliet Chung – WSJ
A day after Sears Holdings Corp. filed for bankruptcy protection, the hedge-fund manager who bet his career on the retailer addressed nearly 1,000 employees gathered at its somber headquarters.
/jlne.ws/2J8aVE8

Regions

The Table Is Rigged Against Macau Stocks; Shares in major casino operators in the world’s largest gambling market have been tumbling, but it isn’t time for investors to up their bets
Jacky Wong – WSJ
Investors have been folding their Macau bets: It’s too early to return to the table. Shares of casino operators in the world’s largest gambling market have lost more than a third of their value, or $52 billion, since May. Their valuations, in terms of enterprise value to expected earnings before interest, taxes, depreciation and amortization, are close to levels last seen during the previous trough, when China’s anticorruption campaign drove high rollers away from the city: Macau’s gambling revenue dropped for 26 consecutive months from 2014 to 2016.
/jlne.ws/2OyElRC

What Sanctions? Russia’s Richest Are Biggest Winners This Year
Alexander Sazonov and Jack Witzig – Bloomberg
The country’s wealthiest have expanded their fortunes by 10.8%; U.S. top 10 are second, as Chinese billionaires slump
The mood among the average Russian may be souring with inflation eating into their purchasing power, but the country’s richest are world beaters when it comes to making money.
/jlne.ws/2J6jkI6

China Stock Market Rocked by Forced Sellers; Yuan Hits Fresh Low
Bloomberg News
‘Extreme pessimism’ is pervading the market, fund manager says; Shanghai Composite Index has dropped about 30% since January
Chinese shares extended the world’s deepest slump and the yuan touched its weakest level in almost two years, testing the government’s ability to maintain market calm as risks mount for Asia’s largest economy.
/jlne.ws/2J5VRa7

U.S. to Triple Emergency Swap Line for Mexico to $9 Billion
Andrew Mayeda and Eric Martin – Bloomberg
Swap line can be used as loan if Mexico faces financial stress; Mexico has had $3 billion swap line with Treasury since 1994
The U.S. Treasury plans to triple the size of an emergency swap line for Mexico to $9 billion, giving the Latin American nation more of a financial cushion as emerging markets come under pressure from rising U.S. interest rates. The peso pared its losses.
/jlne.ws/2Ovi86V

Brexit

Brexit Has 4 Possible Endgames. They All Carry Costs
Robert Skidelsky – Barron’s
The United Kingdom’s “Remainers,” who still hope to reverse Britain’s decision to leave the European Union, have placarded British cities with a simple question: “Brexit—Is It Worth It?” Well, is it?
/jlne.ws/2J3MOGx

Brexit Talks Stall At ‘Moment Of Truth’ Summit : NPR
Merrit Kennedy – NPR
As U.K. Prime Minister Theresa May meets with EU leaders in Brussels, a deal for her country’s imminent departure from the trade bloc appears far out of reach.
“We need much time, much more time and we continue to work in the next weeks,” EU Brexit negotiator Michel Barnier said Wednesday, according to The Associated Press.
/n.pr/2NMdgVR

‘Brextra time’: what the papers say about PM’s Brussels cameo
Kate Lyons – The Guardian
News that Theresa May might be prepared to delay Britain’s departure from the EU until the end of 2021 has caused fury on the front pages of several newspapers today.
The Daily Mail is scathing: “Another year in Brexit limbo?”, asks the paper’s shrill headline, reporting that the “PM ‘could make UK wait even longer’ to avoid no-deal cliff edge (but we’d have to keep paying EU billions)”. The Mail says delaying leaving the bloc until the end of 2021 means it won’t happen until “five and a half years after the vote to leave”.
bit.ly/2NOgE2m

How Brexit killed tolerance; ‘Once you become truly obsessed, you cannot accept that a dissenting view might have been rationally reached’
Robert Shrimsley – FT
We have, it seems, reached the final circle of Brexit hell. After years of living with extreme Brexiters, we now face the depressing phenomenon of masses of rabid Remainers. Brexit has taken us to a place where the moderates have become militant, the liberals illiberal and the sensible rendered senseless by rage.
/jlne.ws/2OtNriF

John Lothian Newsletter

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CME to permanently close most trading pits

CME to permanently close most trading pits

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NYSE Says More Staff Can Return to Trading Floor If Vaccinated

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First Read $40,526/$300,000 (13.5%) ++++ Hits & Takes John Lothian & JLN Staff Welcome to Star Wars Day. May the 4th be with you! -- Google Environmental derivative firm IncubEx has raised $11.7 million in its latest fundraising round (FT). But what was more...

Americans Can’t Get Enough of the Stock Market

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First Read $40,526/$300,000 (13.5%) ++++ Hemp Farming Looking For Credit; Carbon Credit, That Is Thom Thompson - John Lothian News Well, it is now May, and in most of the United States it is high time to get the field crops planted. Among them is hemp, industrial...

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

CME to permanently close most trading pits

CME to permanently close most trading pits

First Read $40,626/$300,000 (13.5%) Anonymous ++++ Hits & Takes John Lothian & JLN Staff Without fanfare or amplification from its executives, the CME Group shut the books on most -- but not all -- of its floor trading history Tuesday afternoon with the...

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