Where now for the rules that rocked European finance?; LCH shift heads off UK-EU regulatory battle

May 7, 2019

First Read

A Great Day to Start Trading Micro E-Mini Futures
John J. Lothian

A Trump-influenced lower equity market and then a near rebound produced the perfect day for the CME Group to start trading micro E-mini equity futures contracts yesterday, specifically Micro E-mini futures on the S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average indexes.

The Micro E-mini equity complex volumes were off the board on their first day, trading over 300,000 contracts, which has to be a record.

With the equity markets sharply lower Monday before recovering and with some decent volatility, volume in the Micro E-Mini S&P futures was 159,251, Micro E-mini Nasdaq-100 Index futures volume was 91,928, Micro E-mini Russell 2000 Index futures was 33,996 and the Micro E-mini Dow Jones Industrial Average Index futures was 24,897 on their first day of trading.

To read the rest of the story, go here.


Hits & Takes
JLN Staff

The CME Group Micro E-mini S&Ps traded over 18K contracts overnight.~JJL

FinTEx, a non-profit trade association for fintech firms in the Midwest, is hosting FinTEx Forum May 14 – May 16 in Chicago. Visit their site to request tickets to this series of discussions, presentations, and panels on the future of fintech. ~SR

Women on Boards (WOB) is a measure of how corporate boards are composed – a proxy for gender equality. So who leads the developed world in WOB? France and Norway both have ratios better than 40 percent. The United States is just below 25 percent and the United Kingdom is just above 25 percent. Via FTSE Russell’s Blog post Gender equality – more to be done across the board.~SD

And for those starting out, an FT story highlights how women are turning to other female investors for start-up cash.~JK

Coindesk reports that Warren Buffet Called bitcoin a ‘gambling device.’~JJL

Bcause, the crypto exchange that recently announced bankruptcy, is tentatively scheduled to go live with its spot market on May 23, according to Coindesk. ~SD


The Spread – Grinding Gears
The JLN team was down in Doral, Fla., for the 2019 Options Industry Conference last week. This episode of “The Spread” covers some of the conference happenings (and a few other things that grind the host’s gears).
Watch the video and see the stories referenced here »


Calling all rockstars!
ALTSO’s Call to Musicians: Are you a musician who’s ready to take their garage band out of the garage? A Leg To Stand On (ALTSO’s) 8th Annual Rocktoberfest-Chicago will take place October 10th, at City Winery in Chicago. If you are interested in performing email info@altso.org; capacity is limited and slots are first come, first serve. Since 2004, Rocktoberfest has helped ALTSO provide free prosthetic limbs and mobility solutions to nearly 18,000 children around the world. Nearly 750 leaders from the hedge fund and finance industries will unite on October 10th to Rock For Good, what about you?
Find out more about Rocktoberfest.


CME Group Announces Launch of New Micro E-mini Equity Index Futures
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, announced the successful launch of its new Micro E-mini futures on the S&P 500, Nasdaq-100, Russell 2000 and Dow Jones Industrial Average indexes, which became available for trading today.

***** Over 300K contracts traded has to be a new record for a first day of trading.~JJL


Myanmar Releases Reuters Journalists Jailed for Reporting on Rohingya Crackdown
Russell Goldman and Mike Ives – NY Times
Two prizewinning Reuters journalists were released from prison in Myanmar on Tuesday after more than a year in detention for covering the country’s deadly crackdown on the Rohingya minority group, ending a drama that had brought global scrutiny upon the country’s de facto civilian leader, Daw Aung San Suu Kyi.

***** Welcome news.~JJL


Monday’s Top Three
Our top read item of the day on Monday was Blockchain Hype Missed the Mark, and Not by a Little. Second was Renato Mariotti’s column in JLN, Aggressive Government Positions Expand Liability for Non-Traders. Third was Thom Thompson’s piece on the Thakkar case, Double Jeopardy, Sort Of – U.S. v Thakkar


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Lead Stories

Where now for the rules that rocked European finance?; More than a year on from implementation, calls to amend Mifid II are growing louder
Philip Stafford and Katie Martin – FT
Helping small and medium companies access capital markets was at the heart of Mifid II but more than 16 months on, bankers and regulators are worrying that Europe’s flagship securities-industry overhaul has become more of a problem than a solution.

London clearing house shift heads off UK-EU regulatory battle; Move also represents a relief for Europe’s struggling investment banks
Philip Stafford – FT
As Brexit has unfolded, London has fought a rearguard action for nearly three years to prevent one prized business ó the clearing of euro-denominated interest rate swaps ó from moving to Europe. But quietly, another part of the clearing market is shifting to the eurozone.

Ex-Goldman banker charged in 1MDB scandal released on $20M bond
Emily Saul and Bruce Golding – NY Post
A former Goldman Sachs banker was released on a $20 million bond Monday following his extradition from Malaysia to face charges in a massive money-laundering scandal that helped bankroll the Leo DiCaprio movie “The Wolf of Wall Street.”

Wall Street Chokes on Cannabis Bank Bill; Lobbying filings show that few major banks support a push to give pot companies greater access to financial services
Carol Ryan – WSJ
The U.S. cannabis industry could do with backup from Wall Street as it pushes for banking reform on Capitol Hill. But the most powerful banks are steering clearóand there’s little immediate sign of that changing.

London Metal Exchange in talks to open warehouse in China; Move would be significant step in plans to enter Chinese market
Henry Sanderson – FT
The London Metal Exchange is in talks with authorities in southern China to open its first metal warehouse in the country, a move that would be a significant step in its plan to enter China’s domestic market.

ASX opens testing for post-trade blockchain system; ASX is working to replace its equities clearing and settlement system with blockchain technology.
Joe Parsons – The Trade
The Australian Securities Exchange (ASX) has opened a Customer Development Environment (CDE) for users to test and interact with its new clearing and settlement system, based on technology developed by Digital Asset.

The Liberation Of Futures Markets From Spot Markets, Part II
Kurt Dew – Seeking Alpha
A new set of CFTC-submitted futures contract applications moves the futures industry one more step along the path to independence from spot markets. The unique nature of ownership and control of cryptocurrencies forces the futures exchanges to take a step – management of the spot market underlying their futures contract – that is in the exchanges’ interest in every market. If regulators are not caught napping, this issue will have their full attention, since it blurs the roles of the CFTC (derivatives regulation) and the SEC (securities regulation) decisively. To be coherent, the two agencies will combine.

Big Banks Seek to Liberate Billions of Dollars in Funds; Dodd-Frank forced banks to hold funds in reserve; now some have found a way to free up that cash
Liz Hoffman – WSJ
Big banks have complained for years about a key feature of the Dodd-Frank overhaul requiring them to keep billions of dollars of cash in reserve. Some are trying to find a way around it.

Speculation Mounts That Crypto Exchange Bitfinex Is Planning a Token Sale
Olga Kharif – Bloomberg
Twitter filled with references to $1 billion token offering; Exchange accused by New York of hiding losses of $850 million
What do you do after New York’s highest legal official accuses you of engaging in a scheme to hide about $850 million in losses by commingling corporate and client funds?

“He Thinks We’re Going to Take a Swing at Him?”: Inside the Decades-Long Cage Match Between Mark Zuckerberg and the Winklevoss Twins
Ben Mezrichapril – Vanity Fair
February 22, 2008. The 23rd floor of a nondescript office tower on the outskirts of San Francisco’s Financial District. The usual glass, steel, and concrete sliced and diced into overly air-conditioned, brightly lit cubes. Eggshell-colored walls and industrial-beige carpets. Fluorescent strips bisecting tic-tac-toe-tiled drop ceilings. Bug-eyed watercoolers, chrome-edged conference tables, faux-leather adjustable chairs.

Hong Kong exchange, Euroclear launch ETF tie-up
Hong Kong’s stock exchange operator will partner with Euroclear, Europe’s largest settlement house for securities, on new arrangements to help bring European Exchange Traded Funds (ETF) to Hong Kong, the companies said on Tuesday.

Morgan Stanley to shut down its Russian banking business in first quarter 2020
Morgan Stanley is planning to send a formal notice to the Russian central bank that it will close down its banking operations in the country in the first quarter of 2020, its Russian unit said in its annual report.

Trump Could Cost Future Retirees Billions; Abandoning the fiduciary rule was a mistake.
Ethan Schwartz – Bloomberg
Last year, the Trump administration abandoned a regulation designed to protect U.S. savers from conflicted investment advice. Known as the fiduciary rule, it would have required more brokers and insurance agents to disclose when they’re getting paid to steer people into certain investments. It also would have banned the sale of certain retirement products when they aren’t in savers’ “best interest.”

Exchanges, OTC and Clearing

Nasdaq on the future of technology and the exchanges
Long thought of as a global exchange company for buying and selling securities, Nasdaq has used the large volumes of data available to it to leverage itself into a partner and provider for market structure, exchange and settlement guidance for markets of all types.

Beirut stock market closed, awaits resumption of work at c.bank – source
Trading on the Beirut Stock Exchange was suspended for a second consecutive day on Tuesday for technical reasons because work is yet to return to normal at the central bank, where workers are on strike, a stock exchange source said.

Hong Kong exchange in talks to open first authorised metals warehouse in China to ease deliveries, expand LME’s business
Enoch Yiu – South China Morning Post
The proposed warehouse, to be authorised by the Hong Kong bourse’s wholly owned London Metal Exchange (LME) unit, will be a breakthrough as it adds a vital waypoint for the physical delivery of metal contracts traded on the marketplace. Currently, LME’s deliveries can only be done in Taiwan, South Korea or Singapore, adding to the transport and customs clearance costs for traders based in mainland China.

Trading Overview in April 2019; Japan Exchange Group released Trading Overview in April 2019.
Cash Equity Market – In April 2019, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.4902 trillion
Derivatives Market – In April 2019, total derivatives trading volume was 23,626,345 contracts.

The Position Limits on Securities Options
OSE has set the position limits on Securities Options, which will be applied from May 10, 2019.

Nasdaq April 2019 Volumes
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for April 2019, on its investor relations website.

TMX Group Consolidated Trading Statistics – April 2019
TMX Group Limited today announced April 2019 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha) and MontrÈal Exchange (MX).

ASX Opening of DLT Customer Development Environment 2019

HKEX Signs MOU with Shanghai Ganglian E-Commerce and Wuxi Stainless Steel Exchange
Hong Kong Exchanges and Clearing Limited (HKEX) today (Tuesday) is pleased to have signed a Memorandum of Understanding (MOU) with both Shanghai Ganglian E-Commerce; and Wuxi Stainless Steel Exchange, to strengthen communications and cooperation, as well as to promote mutual business development in financial and commodities markets.

TradeTech Paris 2019: the financial sector looks to the future
It was not surprising that the most important points of discussion were once again artificial intelligence and data. Buyside has clearly jumped on the bandwagon, but is aware that changing market structures and the big question mark of Brexit mean that nothing can be taken for granted.

Euronext extends acceptance period of its offer on Oslo B¯rs VPS
Euronext, the leading pan-European exchange, announces today that it is amending its Offer to acquire Oslo B¯rs VPS’s outstanding shares by extending the Acceptance Period thereof. As a result, Euronext will continue to receive and accept acceptances of the Offer up to 31 May 2019 at 18:00 Central European Time. All other terms of its Offer as revised remain unchanged.

Greater adoption of ETFs in Hong Kong depends on more fee-based advisers, Nasdaq says; The fee-based model was a “critical” point in the growth of ETFs in the United States, according to Nasdaq’s Robert J. Hughes
Chad Bray – South China Morning Post
Greater adoption of exchange-traded funds (ETFs) by Hong Kong investors will depend on the further development of the fee-based financial adviser community in the city, according to Nasdaq.


Pico Continues Global Expansion With New Co-Lo Facility And Direct Connectivity To Hong Kong Exchanges And Clearing
Pico, a leading infrastructure, connectivity, data and cloud technology provider to the global financial services community, today announced its continued global expansion with the launch of a new colocation facility and direct connectivity to the Hosting Services Data Centre of Hong Kong Exchanges and Clearing Limited (HKEX).

Robo-Trading Electrifies Sleepy Municipal Bond Market; Electronic trading has surged in municipal-bond trading, leveling the playing field for small investors
Matt Wirz – The Wall Street Journal
Every morning, money manager Brian Dixon puts 75 to 100 municipal bonds up for sale to about 80 Wall Street brokers. But his biggest buyer is TMC Bonds, one of the electronic-trading systems that is transforming the municipal-bond market and leveling the playing field for individual investors.

Pimco deploys Algomi ALFA system for fixed income trading; US fixed income investment firm Pimco will use Algomi ALFA to source and aggregate bond liquidity.
Hayley McDowell – The Trade
US fixed income investment manager Pimco has implemented Algomi’s Automated Liquidity Filtering & Analytics (ALFA) technology system within its trading and data infrastructure.

Fenics Market Data partners with Symphony to distribute real-time IRS datasets
Press Release
Fenics Market Data, a division of Fenics Software Limited, an entity within BGC Partners, Inc., today announced it has partnered with Symphony, the leading secure team collaboration platform, to allow Symphony users to access live Fenics MD’s data on the Symphony platform.


Bitfinex and Tether parent challenges N.Y. Attorney General’s regulatory authority
Aaron Hankin – MarketWatch
The parent company of cryptocurrency outfits Bitfinex and Tether has questioned the New York Attorney General’s oversight authority in an official court response to accusations that its subsidiaries covered up some $850 million in losses.

ASX Is Letting Clients Test Its In-the-Works Blockchain Settlement System
Yogita Khatri – Coindesk
The Australian Securities Exchange (ASX) is now allowing clients to test its in-development blockchain-based equities clearing and settlement system.

Crypto exchange COBINHOOD parts ways with co-founder and CEO; citing his ’emotional instability’
The Block Crypto
COBINHOOD, the cryptocurrency exchange, announced that its co-founder and CEO, Tai-yuan Chen, has “ceased to participate” with the firm since late April 2019. According to COBINHOOD, Chen’s “emotional instability and personal behaviors have caused safety concerns” for its employees. The firm also notes that it has filed a police report against Chen and has ordered employees to work from home until “personal safety can be ensured.”

DUST Adds Physical Products to the Blockchain
John Biggs – Coindesk
A new blockchain-powered startup led by three physical scientists promises to paint the world in diamond dust. DUST Identity’s service, known as DUST Ledger, allows users to enroll all manner of physical objects onto a blockchain, the founders claim. The system uses a product called the Diamond Unclonable Security Tag (DUST), a coating that uniquely identifies an object when it’s placed under a scanner. The coating is tagged to the specific object, be it a shipping container or transistor, allowing users to track the product’s provenance around the world, DUST Identity says.

FCC Eyes Blockchain to Better Manage Scarce Wireless Spectrums
Daniel Palmer – Coindesk
The Federal Communications Commission (FCC) could one day use blockchain to monitor and manage wireless spectrums to support the growing requirements of the internet of things (IoT).

Microsoft Releases Ethereum App Development Kit for Azure Cloud
Yogita Khatri – Coindesk
Tech giant Microsoft has released a suite of tools allowing clients to build ethereum-based apps on its cloud computing platform Azure.

How a New Cryptocurrency Token Could Help Bitfinex Leave Scandal Behind
Olga Kharif – Fortune
What do you do after New York’s highest legal official accuses you of engaging in a scheme to hide about $850 million in losses by commingling corporate and client funds? Apparently, in the case of cryptocurrency exchange Bitfinex, you make plans to raise up to $1 billion from investors to shore up the company’s financials through what’s become known as an initial exchange offering.

US CFTC Chair Says Interest in Crypto Could Bring About More Clearinghouses
The United States Commodity Futures Trading Commission (CFTC) chairman Christopher Giancarlo said that the “explosion in interest” in cryptocurrencies will likely lead to new applications for clearinghouses. Giancarlo delivered his comments in a speech published on May 1.

WeChat bans cryptocurrency transactions in its payment channels
The Block Crypto
Chinese social-media and payments app WeChat has updated its payment policy, stating that users who engage in crypto trading will have their accounts terminated.

Founding partner Kavita Gupta is stepping down from ConsenSys Ventures
Isabel Woodford and Celia Wan – The Block Crypto
Kavita Gupta, head of ConsenSys Ventures, is stepping down, she has told The Block.

Alternative News Sources:

Tron Discloses Critical Vulnerability Which Could Have Crashed Its Blockchain
Adrian Zmudzinski – Cointelegraph

Crypto Community Monitors Bitfinex Wallets and the Strange 6% BTC Premium
Jamie Redman – Bitcoin.com News

Facebook Acquires ‘Libra’ Trademark to Work on Its Secretive Cryptocurrency
Adrian Zmudzinski – Cointelegraph


Trump May Redefine Poverty, Cutting Americans From Welfare Rolls
Justin Sink – Bloomberg
The Trump administration may alter the way it determines the national poverty threshold, putting Americans living on the margins at risk of losing access to welfare programs.
The possible move would involve changing how inflation is calculated in the “official poverty measure,” the White House Office of Management and Budget said in a regulatory filing on Monday.

China says tariffs won’t resolve any problems in trade dispute with U.S.
Tariffs won’t resolve any problems in the ongoing bilateral trade dispute between China and the United States, China’s foreign ministry said on Tuesday.

Treasury Department Rejects Request for Trump Tax Returns; Move is likely to send the dispute into federal court
Richard Rubin – WSJ
Treasury Secretary Steven Mnuchin rejected House Democrats’ request for President Trump’s tax returns, a move that was expected after he had contended for weeks that lawmakers were trying to expose details of the president’s finances rather than conducting legitimate legislative oversight.

Trump would have been charged with obstruction were he not president, hundreds of former federal prosecutors assert
Matt Zapotosky – Washington Post
More than 450 former federal prosecutors who worked in Republican and Democratic administrations have signed on to a statement asserting special counsel Robert S. Mueller III’s findings would have produced obstruction charges against President Trump ó if not for the office he holds.


Transaction Tax Proposed, Again
Rob Daly – MarketsMedia
In the attempt to rein in high-frequency trading Democrats in the US House of Representatives and Senate have filed identical bills to establish a transaction tax across a broad range of listed and over-the-counter products that likely will result in throwing out the baby with the bath water.

SEC may allow wider cross-margining of single-name CDS; Banks want to cross-margin single-name CDS against options, indexes and cash products
Joanna Wright – Risk.net
Banks are pressing US regulators to permit cross-margining of single-name credit default swaps (CDS) against not only CDS indexes but also cash products and options.

AI in law enforcement needs clear oversight; Predictive policing risks reinforcing known biases in law enforcement
The Editorial Board – FT
In the film Minority Report, mutants predict future crimes, allowing police to swoop in before they can be committed. In China, stopping “precrime” with algorithms is a part of law enforcement, using the country’s immense surveillance infrastructure to identify potential dissidents. Predictive policing tools are in use in the US and Europe as well, although for ostensibly less repressive purposes. Yet without sufficient oversight, they can potentially do more harm than good.

FCA changes mortgage advice rules to encourage consumer choice
The Financial Conduct Authority (FCA) has today published proposals for changes to its mortgage sales requirements which will help to give consumers more choice in how they buy a mortgage.

CFTC Announces Approximately $1.5 Million Whistleblower Award
The Commodity Futures Trading Commission (CFTC) today announced a whistleblower award of approximately $1.5 million to be paid to an individual whistleblower. The CFTC granted the whistleblower’s award application for both a CFTC action and a related action brought by another federal regulator. In ordering the award, the CFTC recognized the contribution of a whistleblower who sought to report his or her concerns internally prior to reporting to the CFTC.

FINRA Provides Guidance to Firms Regarding Suspicious Activity Monitoring and Reporting Obligations
FINRA is issuing this Notice to provide guidance to member firms regarding suspicious activity monitoring and reporting obligations under FINRA Rule 3310 (Anti-Money Laundering Compliance Program).

OTC Transparency Data Issue (Resolved)
As announced in a Technical Notice on April 1, 2019, there was an issue where firm data was being displayed under multiple names. This was occurring when there was a mid-reporting period name change. FINRA has updated the display requirements to reflect only the Name associated with the MPID at the start of the reporting period. All historical data has now been updated. In addition, there may have been instances where firm data was not being attributed specifically for certain securities, but was being aggregated into a De Minimis bucket. That issue has also been resolved.

ESMA Newsletter – N∫4
Welcome to the fourth edition of ESMA’s newsletter. This month ESMA’s Board of Supervisors will meet and we look ahead to a busy month of speaking appearances by ESMA staff. We also catch up on the full list of publications from April and take a closer look at ESMA’s opinions on proposed product intervention measures by NCAs.

Former financial adviser pleads guilty to dishonestly obtaining client funds
Former financial adviser, Mr Trevor William Martin, has pleaded guilty in the District Court of NSW, to three counts of dishonestly obtaining client funds under the NSW Crimes Act.

Fed Flags Risky Business Debt as Vulnerability for U.S. Financial System; In second financial stability report, officials warn of growth in leveraged loans and elevated asset prices
Andrew Ackerman – WSJ
The Federal Reserve identified rising sales of risky corporate debt as a top vulnerability facing the U.S. financial system, according to a report released Monday.

How Mifid has made its mark in the US; Fund managers across America, nudged by the SEC, seek to replicate European rules
Richard Henderson – FT
The launch of Mifid II represented Europe’s biggest shake-up in the relationship between banks and investors in a generation. Now an unusual switch from US regulators may help elements of it to spread across the Atlantic.

Investing and Trading

You’re Going to Hear Some Bold Bets at the Sohn Investment Conference. Ignore Them.
Michelle Celarier – Institutional Investor
The annual Sohn Investment Conference is being held in New York City on Monday, but investors might want to think twice before tapping their phones and placing trades based on the views of the cognoscenti on the stage at Lincoln Center’s Avery Hall.
Last year’s stock picks ó both longs and shorts ó by some of the biggest names in hedge funds have fallen an average of 2.3 percent since they were presented at Sohn.

In Tough Times for Hedge Funds, These Are the Ones That Stand Out
Eric Uhlfelder – WSJ
The hedge-fund industry continued its losing streak last year.
The industry once again trailed the market in 2018, marking 10 straight years it has underperformed the S&P 500, according to data from BarclayHedge.

Two Pillars of the Stock Market Just Became Two Reasons to Sell
Luke Kawa – Bloomberg
Trade hopes and Fed rate cuts helped fuel equity rally; Investors see parallels to last year’s market toubles
The conventional wisdom that the Fed’s next move would be down and the trade spat with China would end just got dealt a one-two punch.

Banks Look Safer With Deposits; Also Oxydarko, clearinghouses and balconies.
Matt Levine – Bloomberg
The business of banking, it is often said, is “maturity transformation,” or “borrowing short to lend long.” A classic simple bank funds itself with deposits ó people put their money in the bank with the understanding they can withdraw the entire amount they put in at any time ó and uses those deposits to make mortgages and loans that won’t be repaid for years. If all the depositors want their money back at the same time, the bank won’t have enough money to pay them back immediately, and bad things will happen.


S&P Dow Jones Indices aims for world dairy index by year-end: company official
S&P Dow Jones Indices is planning to launch an index for the global dairy industry by end of this year, a senior company official told Reuters on Tuesday.

How Asset Managers Are Trying to Combat Falling Fees
Amy Whyte – Institutional Investor
With operating margins at their lowest levels since the financial crisis, asset managers are being forced to “get creative,” according to consulting firm Cerulli Associates.

INTL FCStone expanding commodities market analysis team
Brokerage INTL FCStone is broadening its commodity analysis team to cover metals, agriculture and energy outside of the Americas an executive said on Tuesday.

SocGen profits fall as it pushes ahead with restructuring; French bank offloads Slovenian SKB subsidiary but says overhaul is bearing fruit
Harriet Agnew and Myles McCormick – FT
Societe Generale reported a 26 per cent fall in profits on Friday as the French bank pushes ahead with a far-reaching overhaul that its chief executive said was starting to bear fruit.

Baillie Gifford targets European growth with new Frankfurt office; Baillie Gifford has established a new office in Frankfurt, making it the first client office in mainland Europe for the UK asset manager.
Hayley McDowell – The Trade
UK investment management firm Baillie Gifford has opened a new office in Frankfurt as it targets growth in mainland Europe.

Ex-Goldman Banker in Plea Talks Over 1MDB Charges, Judge Says; Move could aid the Justice Department in building a case against the bank and its employees in the Malaysian fund scandal
Yantoultra Ngui, Nicole Hong and Aruna Viswanatha – WSJ
A federal magistrate judge on Monday said the Justice Department is engaged in plea negotiations with a former managing director of Goldman Sachs Group Inc. who was extradited from Malaysia, a development that could help prosecutors build a case against the bank and Goldman employees in the scandal involving a Malaysian government fund.

Bridgewater Co-CEO Eileen Murray Weighs Leaving World’s Largest Hedge Fund; Wells Fargo representatives most recently discussed with her open CEO job
Rob Copeland – WSJ
Bridgewater Associates co-Chief Executive Officer Eileen Murray has held repeated conversations inside and outside of the firm about leaving the world’s largest hedge fund, according to people familiar with the matter.

Amherst Pierpont becomes ‘primary dealer’ for US Treasury debt
Joe Rennison – FT
Amherst Pierpont Securities has become the first new dealer to be given responsibility for ensuring the sale of the US government’s debt since Well Fargo in April 2016, offering a boost to a Treasury market that has been in the slow grip of evolution.

Cheap ETFs Are Hot, But BlackRock’s Premium Funds Pay the Bills; The world’s largest money manager gets almost half its ETF revenue from higher-cost products aimed at pros.
Brandon Kochkodin – Bloomberg
It’s no secret low-cost ETFs are big business for BlackRock Inc. Over the past decade, the money manager’s suite of iShares exchange-traded funds has become the most popular on the planet, amassing almost $2 trillion of client assets along the way.

Goldman Lost the Uber IPO, It Has a 12,000% Consolation Prize Instead
Sridhar Natarajan – Bloomberg
A 2011 wager pays big even as Morgan Stanley wins lead mandate; ‘I bear-hugged the relationship,’ Gary Cohn says of Uber ties
Goldman Sachs Group Inc. is missing out on leading the hottest IPO in years, Uber Technologies Inc.

Singapore central bank studying licences for virtual banks
Singapore’s central bank is studying whether to allow financial technology firms to operate digital-only banks in the city-state, it said, following moves by regulators in other Asian markets to issue virtual banking licenses.

Harvard Piles Into Hedge Funds as New Chief Overhauls Endowment
Michael McDonald – Bloomberg
It’s a contrarian bet as other institutions head for the exits; Success could help the school turn around its lagging returns
Harvard University’s N.P. “Narv” Narvekar is doubling down on an investment that has fallen out of fashion: hedge funds.


Investors Flee Turkish Lira as Istanbul Election Rocks Outlook
Justin Villamil and Constantine Courcoulas – Bloomberg
A decision by Turkey’s highest electoral body to nullify the Istanbul municipal elections has sent the Turkish lira tumbling as investor concern about political instability mounts.
The ruling, which is final, met a request by the ruling party of President Recep Tayyip Erdogan.

Investors take on Germany Inc; Scandals over ‘cosy’ relationships at several top German companies have led shareholders to demand better governance
Guy Chazan – FT
“Herr Baumann, what have you done to our Bayer?” The question, posed by Joachim Kregel of the German Association for the Protection of Investors, was just one of dozens of emotional tirades against Werner Baumann, Bayer’s chief executive, at the aspirin-to-crop chemicals conglomerate’s annual meeting in late April.

Chinese Real Estate Has Eaten the Asian Junk-Bond Market; Nearly all Asian high-yield debt issued in the first quarter came from Chinese property companies
Betting the House
Mike Bird – WSJ
Asia’s high-yield-bond market is being overwhelmed by Chinese real-estate companies, leaving it increasingly dependent on the questionable health of a single sector.

GrainCorp shares slide after LTAP withdraws takeover offer
Daniel Shane – FT
Shares in Australian agricultural group GrainCorp plunged as much as 12 per cent in Tuesday morning trading after it said Long Term Asset Partners had withdrawn its A$2.4bn ($1.8 bn) bid to buy the company.

A $400 Billion Wave of Japanese Cash May Be Heading Overseas
Cormac Mullen – Bloomberg
Maturing Japanese government bonds could be recycled abroad; JPMorgan sees portfolio outflows sending the yen lower
Japanese investors faced the first trading day of a new era on Tuesday with fresh eyes, but the same old problem — where to put their money given rock-bottom interest rates.

U.K. Sets Record for Life Without Coal
Jeremy Hodges – Bloomberg
Britain plans to exit coal in power generation by 2025; oal-free periods will be the new normal, grid operator says
The U.K. has gone more than five days without burning coal, the longest streak the country has managed without burning the fuel since the Industrial Revolution.


With Brexit talks floundering, a public vote is May’s only chance of getting her deal through
Polly Toynbee -The Guardian
The charade starts again, the charivari, the pantomime “negotiations” between team May and the Corbyn crew. The play-acting, the feinting and feigning, still pretending there is progress, scarifying both parties’ rank and file. Rory Stewart exposed his wet-behind-the-ears arrival in the cabinet by obediently delivering Downing Street’s line that “our positions are only a quarter of an inch apart”. Well, that’s the longest quarter-inch in history.


The Great War and the Bank of England as Market Maker of Last Resort
Mike Anson, David Bholat, Mark Billings, Miao Kang, Kilian Rieder and Ryland Thomas – Bank Underground
During the global financial crisis, some central banks acted as market makers of last resort, buying and selling securities in financial markets when trading in them had stalled. Some commentators claimed this role was “a completely new” one for central banks. In this blog, we show, on the contrary, that the Bank of England acting as a ‘market maker of last resort’ has precedent.

America’s $1.6 trillion student debt woe spurring suicidal thoughts: survey
The $1.6 trillion in U.S. student debt may not pose a direct threat to the economy, but it’s causing anguish that goes far beyond financial concerns for the people who owe it.

John Lothian Newsletter

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Past Newsletters

GameStop and Bitcoin Renewed a Push to Digitize the Stock Market

GameStop and Bitcoin Renewed a Push to Digitize the Stock Market

First Read $34,126/$300,000 (11.4%) ++++ Hits & Takes John Lothian & JLN Staff There is a new Van Gogh exhibit in New York billed as Van Gogh - The Immersive Experience. The site of this exhibit is the former trading floor of the NYMEX. The NYMEX trading floor...

SGX and NZX seal partnership on dairy derivatives to unlock growth

SGX and NZX seal partnership on dairy derivatives to unlock growth

First Read $34,126/$300,000 (11.4%) Andrew Mauck, Ernesto Pinto and Brian Rice ++++ Hits & Takes John Lothian & JLN Staff The NFA is holding a Town Hall Webinar on Tuesday, April 20, at 9:30 a.m. CT. NFA Board Chairwoman Maureen Downs, NFA Public Directors Ron...

How Ken Griffin rebuilt Citadel’s ramparts

How Ken Griffin rebuilt Citadel’s ramparts

First Read $33,626/$300,000 (11.2%) Charlie Carey ++++ Trading Technologies Announces Matching Program to Benefit GoFundMe Campaign for MarketsWiki Education Video Series and John Lothian News As a pioneer of electronic trading, we at Trading Technologies value our...

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