White House commits to ending Wall St tax loophole; SEC Chairman Froze Agency’s Approval of Chicago Stock Exchange Sale

Sep 29, 2017

First Read

Hits & Takes
By JLN Staff

Today we have part one of a two part series titled “The CFTC and Fintech Innovation, Goals of LabCFTC” featuring an interview with CFTC Chief Innovation Officer Daniel Gorfine. ~JJL

The FIA has asked me to moderate a panel at EXPO on customer protection. I said yes. ~JJL

The FIA has put out a recommendation on market integrity, “FIA recommendations to streamline CFTC regulations and enhance market integrity.”~JJL

SGX is offering a course titled “Secret Trading Techniques of a Proprietary Trading Firm Revealed (Course Preview).” I am not sure the secrets will still be secrets after the event. ~JJL

Part 2 of the Margie Teller interview by Trading Technologies is available HERE. ~JJL

Former federal prosecutor Renato Mariotti is mulling a run for Illinois attorney general, according to the Chicago Tribune. I am all for it. ~JJL

Eurex has traded 10 billion euros of notional value of the Total Return Futures since they launched. ~JJL

Asia Pacific Financial News from John Lothian News for September 28, 2017 is HERE. ~JJL

The web site for this year’s FIA Expo contains this note, worth mentioning here since it seems as if every day we are highlighting yet another scam somewhere:
“Expo could once again become a target for a potential housing ‘scam.’ ‘National Travel Associates’ (866-595-7666) and ‘Exhibition Housing Management’ a.k.a. ‘Exhibition Housing Services’ (800-367-4414), and potentially others, could claim to have a relationship with FIA and are offering hotel reservation services for the 33rd Annual FIA Futures and Options Expo. These companies are NOT affiliated with FIA and should NOT be used to make hotel reservations.
The Hilton does not and will not make phone calls to FIA members, exhibitors, or attendees, encouraging you to book with them.”
See the web site and proper venue info here. ~SR

I subscribe to email updates from the USDA regarding the release of its varying crop-related reports. Yesterday, I was notified that “Following a careful assessment of the overall effectiveness of and cost efficiency for the Office of the Chief Economist (OCE) email notification service, the decision has been made to terminate the service.” ~SD

On Tuesday October 17 in Chicago (the day of Expo’s opening reception), the FIA’s Market Technology Division will host a panel regarding “Crowd Sourcing in Listed Derivatives.” Click HERE to register. ~SD

Brits are happiest in the pub. Who knew? ~JJL


Amazon Created More Jobs Last Year Than 46 States
Ian Salisbury – Yahoo Finance
Retail giant Amazon’s announcement earlier this month that it wanted to open a second headquarters — which it said would bring “as many as 50,000 high-paying jobs” along with it — has launched a bidding war. Politicians from Oklahoma to Connecticut to Pennsylvania are now falling all over themselves to get themselves noticed, waving tax breaks and other gifts and incentives.

***** You could say that Amazon delivered. ~JJL


The Wall Street Journal to Stop Publishing Europe, Asia Print Editions
By Lukas I. Alpert – WSJ
The Wall Street Journal will cease publishing the European and Asian print editions of the newspaper over the next week, as the company shifts its focus to digital.

****** There go the fish and chips wrappers. ~JJL


A top Goldman Sachs exec explains the skills you need to make it as a stock trader
Frank Chaparro – Business Insider
Technology skills are becoming more important for banks. www.empireonline.com
Young aspiring traders might want to couple their Finance 101 textbook with one on coding if they want to make it on the Street.

***** This makes the Boy Scout Trading Tech 300 program focusing on STEM merit badges even more on target. ~JJL


Google Finance as you know it is going away — here is what will remain
By Max A. Cherney – MarketWatch
Alphabet Inc. has informed users of its Google Finance product last week that the core of the offering, the portfolio feature, will soon disappear as the stocks-focused product undergoes a transformation that bundles it into Google’s dominant search offering.

****** From bad to what? ~JJL


Thursday’s Top Three
Yesterday’s top 3 stories were led by Reuters’ piece on bitcoin, Backers withdraw two proposals to list U.S. bitcoin funds. Second went to the FT’s focus on commodities open interest, Commodities markets swell in size despite price slide. Third was the announcement, Quantitative Brokers adds Thomas Ascher to board


Breaking Through: Margie Teller, Part 2
Trading Technologies
In addition to Friends for the Cure, your foundation for diabetes research, what other projects do you have in flight?
Margie: I just finished a novel titled Front Runner, a financial intrigue story with a touch of romance. I’ve been working on it for just about 13 years. It is now officially a period piece. So that is done, though it’s not published yet. And the thing that’s really taking up a lot of my time now is a TV pilot I’m working on about the trading floor from 1986 to probably about 2005. I’ve been working on that for about 18 months. The pilot should be written within the next six weeks or so, which I’m excited about.

**Do you have a great story from the trading floor? It just might make it into a TV show.~JK


The CFTC and Fintech Innovation, Part 1 – Goals of LabCFTC


“Our chairman has articulated very clearly that you can’t be an analog regulator in an increasingly digital world. So, our focus is on facilitating market enhancing innovation while ensuring market integrity.”

On May 17, the CFTC announced the launch of its new fintech initiative, LabCFTC. The CFTC hired Daniel Gorfine, a lawyer with a background in financial policy who previously worked for a fintech company, to lead the initiative and become the CFTC’s chief innovation officer on July 10. Gorfine sat down with JLN to discuss how the CFTC plans to become a 21st century regulator.

Watch the video »


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Lead Stories

White House commits to ending Wall St tax loophole
Barney Jopson – Financial Times
The White House vowed to push ahead with President Donald Trump’s commitment to scrap the “carried interest” tax break enjoyed by hedge fund and private equity managers as it fended off charges that its tax plan was a gift to the wealthy.

SEC Chairman Froze Agency’s Approval of Chicago Stock Exchange Sale; The move by Chairman Jay Clayton came after consulting with the White House
Dave Michaels – WSJ
The Securities and Exchange Commission’s chairman made the decision to freeze his staff’s plan to approve the sale of the Chicago Stock Exchange to a Chinese-led group after consulting about the subject with the White House, people familiar with the matter said.

CBOE Talks With ICE About Dutch Clearing Arm
Luke Jeffs – Global Investor
CBOE’ European arm, formerly Bats Europe, is in talks with the Intercontinental Exchange about the possibility of ICE Clear Netherlands clearing a new suite of CBOE European equity derivatives.

Europe’s Financial Reforms Raise Questions for the U.S.; The new MiFID rules are causing headaches, but their goal is sound.
The Editors – Bloomberg
Europe is embarking on an ambitious project to make its capital markets more transparent and investor-friendly. The U.S. should pay close attention if it wants to maintain its reputation as the world’s best place to raise and deploy money.

Rich People Would Consider Google, Amazon to Manage Their Wealth
Simone Foxman and Suzanne Woolley – Bloomberg
Forget traditional wealth management firms. If Google, Apple, Facebook or Amazon offered financial services, more than half of rich people might sign up.

European Parliament seeks to toughen clearing house rules
Philip Stafford – FT
The European Parliament wants to toughen existing plans that give regulators more power over clearing houses, ensuring the institutions and the banks that use them shoulder the financial burden if they run into trouble.

Nasdaq explores ‘alternatives’ for its PR and digital media units; Trading venue owner is refocusing on technology, data and analytics
Nicole Bullock – FT
Nasdaq is exploring “strategic alternatives” for its public relations and digital media services units, stepping up its efforts to reshape the company to focus on technology, data and analytics.

Mobile stock trading apps ignore critical flaw warnings
IOActive has discovered severe security issues with today’s most popular stock trading applications, but it appears that the developers behind the apps are not interested.
On Tuesday, the security firm released the results of research into 21 popular mobile stock trading applications available on iOS and Android, which have millions of users worldwide and process billions of dollars in transactions per year.

Former SEC chief says regulator not equipped to take on bitcoin
John McCrank – Reuters
Arthur Levitt, a former chairman of the U.S. Securities and Exchange Commission, said on Thursday he believed the regulator was ill equipped to deal with bitcoin, the digital currency that has seen a meteoric price rise, prompting concerns of a bubble.

Bitcoin fund pulls listing plan after hitting SEC roadblock; Digital currency investment trust no longer headed to NYSE’s Arca trading platform
Chloe Cornish in San Francisco – FT
A bid by the New York Stock Exchange to list a bitcoin investment fund has been scuttled, in a further sign that regulation remains a hurdle for financiers attempting to bring digital currencies to mainstream markets.

One of the world’s largest financial services firms is mining bitcoins
Joon Ian Wong – Quartz
The head of one of the world’s largest asset management firms came out today (May 23) as a huge fan of bitcoin. Abigail Johnson, chief executive of Fidelity, which manages $1.9 trillion in mutual fund assets, told an audience at the 2017 Consensus conference—a blockchain technology summit—in New York that she was there because she “loves this stuff.”

Some Market Myths Hurt Investors; Historical data undercut these rules of thumb.
Ben Carlson – Bloomberg
There are a number of rules of thumb and aphorisms that investors accept without investigating their merits based on the historical evidence. For example, many assume that buying individual bonds is safer than owning a bond mutual fund or ETF because it will shield them from interest-rate risk. The idea is that bond funds can fall in value but individual bonds will mature at par, so you don’t have to worry about losses when you hold them directly.

EU watchdog sees no risk of chaos over new trading rules
Huw Jones – Reuters
New European Union trading rules from next January could trigger some glitches, but broader disruption is not anticipated, the bloc’s securities watchdog said on Thursday.
The EU rules, known as MiFID II, change how stocks and bonds are traded by increasing transparency. They also play catch up with advances in technology, such as ultra-fast trading speeds.

Morgan Stanley fined $500k for overcharging clients; Clients of Morgan Stanley were overcharged more than $1.5 million for exchange and clearing fees.
Hayley McDowell – The Trade
Morgan Stanley has been fined $500,000 for overcharging client exchange and clearing fees due to automated system failures.

Proposed Changes to Fluid Milk Pricing; And Why Farmers Need to Care
The beverage milk industry is a risky business. One of the more complicated provisions of the complicated Federal Milk Marketing Order system is in fluid or beverage milk pricing. Buying and selling milk going into fluid milk beverages is confusing because of Federal Milk Marketing Order end-product pricing formulas, along with an inability for processors to directly forward contract milk intended for fluid use and a lack of a commercially traded futures contract for beverage milk.

IEX continues its self-promotion & anti-rebate rhetoric, despite data telling a different story
Viable Markets
As I perused the Curatia news brief earlier this week, I was struck by seeing my article on exchange quote quality followed directly by an article that was essentially an IEX marketing piece. It was a fascinating juxtaposition; Readers first saw an article, that summarized billions of quote messages processed in August to show how exchanges quote quality compared. As it pertains to IEX, the analysis showed that IEX has failed to attract even a reasonable fraction of the liquidity of the listing exchanges. The following article, which portrays IEX as an upstart poised for future success, used no data, repeated fraudulent claims about IEX’s value proposition and essentially restated their marketing story. Then, today, IEX published another self-serving piece riddled with misleading statements, so here we go again…

Treasury review not a rollback of reforms, says CFTC counsel; Trump order is a chance to ease some rules and promote cross-border regulatory deference
Olesya Dmitracova – Risk.net
A review of US financial rules led by the Treasury is not an attempt to dismantle them or undermine global regulatory standards, says an official at the Commodity Futures Trading Commission. Rather, it is a chance to tweak some overly onerous provisions and move towards more “hands-off” supervision of foreign firms.

Exchanges, OTC and Clearing

Eurex won CTA Intelligence European Services Awards
Eurex was awarded the ‘Best Exchange – Overall’ in the CTA Intelligence European Services Awards 2017 as a recognition of their footprint in the European CTA investment manager community. Eurex has been regarded as the leading exchange in this client segment, a reflection on both the quality of the listed derivatives suite at the exchange and also the relationships and client services that are provided.

TechShare prepares growing number of promising Tech companies for market success;
Euronext is pleased to announce the launch of the third edition of TechShare, a unique educational programme that familiarises high-potential European tech companies with capital markets.

Financial Conduct Authority approves NEX Regulatory Reporting’s Abide Financial DRSP Ltd as an ARM under MiFID II
NEX Regulatory Reporting, a NEX Group business which provides regulatory reporting services across global regulatory regimes, announces today that Abide Financial DRSP Ltd has received approval from the Financial Conduct Authority (FCA) as an Approved Reporting Mechanism (ARM), with effect from 3 January 2018. The authorisation will allow NEX Regulatory Reporting to report client transactions to National Competent Authorities (NCA) across Europe under MiFID II.

NSE aims for listing in second half of 2018
Abhirup Roy, Devidutta Tripathy and Rafael Nam, Reuters – Business Standard News
The new chief executive of the National Stock Exchange (NSE) told Reuters he does not expect the bourse’s eagerly awaited listing to take place until the second half of 2018.
The exchange had originally planned to go public this year, in what could be one of the country’s biggest ever initial public offerings (IPOs).

JPX Report 2017
We are glad to inform you of the publication of the JPX Report 2017.
Prepared as part of our efforts toward integrated reporting, the report offers stakeholders and the general public a deeper insight into our corporate philosophy, social raison d’être, and our initiatives toward sustainable corporate development.

Indian Renewable Energy Development Agency (IREDA) chooses London to launch first Green Masala Bond
London Stock Exchange
Becomes first green Masala bond on London Stock Exchange’s new International Securities Market (ISM); IREDA Chairman and MD, Mr. Kuljit Singh Popli, opens London trading to celebrate the bond launch; Reinforces London’s status as most international financial centre and India’s partner of choice

The Listing Committee criticises China Environmental Energy Investment Limited (Stock Code: 986) and two current executive directors, Ms Chen Tong and Mr Xiang Liang, for breaching the Exchange Listing Rules and the Director’s Undertaking respectively


Bitcoin Exchange Giant BitFlyer Gets Key License in Japan; Digital-currency exchanges bolster cryptocurrency’s status in world’s third-largest economy
Paul Vigna – WSJ
Japan’s Financial Services Agency on Friday handed out its first licenses for digital-currency exchanges, allowing them to operate legally in the country and further solidifying the upstart currency’s status in the world’s third-largest economy.

IHS Markit Wins Best Carbon Credit Registry Award for Eighth Straight Year
Business Wire
IHS Markit (Nasdaq: INFO), a world leader in critical information, analytics and solutions, was named Best Registry Provider in Environmental Finance magazine’s 2017 Voluntary Carbon Markets Rankings. IHS Markit has won the award for eight straight years.

Australian Securities Exchange sees blockchain replacing current post-trade system
Neil Hughes -OneWorldIdentity.com
The company overseeing Australia’s largest stock exchange believes that its future for resolving post-trade settlements lies in blockchain, based on technology created by U.S.-based fintech company Digital Asset Holdings.

ProShares files for bitcoin ETF, and one to bet against it; ProShares, which is the 10th largest ETF company, according to ETF.com, filed Wednesday with the SEC for two bitcoin ETFs; The ETFs will track bitcoin futures contracts traded on the Chicago Board of Options Exchange, the filing said; However, those futures contracts aren’t available yet and VanEck withdrew its application for a similar bitcoin ETF for that reason.
Evelyn Cheng – Business Insider
One of the largest sellers of exchange-traded funds has filed for two bitcoin ETFs.

Blockchain may finally rid the world of fax machines
John Detrixhe – Quartz
The finicky, archaic fax machine still somehow survives in the back offices of some big financial institutions. But this technology may finally face extinction as execs update their operations with blockchain-based systems.

Wall Street Starts Trading Tokens With Overstock’s New ICO Exchange
By Jeff John Roberts – Fortune
When the Securities and Exchange Commission cracked down on so-called initial coin offerings (ICOs) in July, some feared it would be the end of a novel way for companies to raise money by selling digital tokens. As it turns out, the SEC ruling may mark the true beginning of the ICO era.


In Trump Tax Plan, a Windfall for Businesses Large and Small
David Gelles – NY Times
A lower tax rate for corporations. Reduced taxes for partnerships like law firms. An easy way to bring overseas profits back to the United States without being taxed.

What Awaits Wall Street in Trump Tax Plan; A 20% corporate tax rate would boost profits, but there are downsides to the administration’s framework
Telis Demos, Liz Hoffman, Justin Baer and Rachel Louise Ensign – WSJ
Wall Street has hungered for a tax overhaul, and with good reason. If it spurs stronger economic growth, corporate borrowing and finance firms’ profits could jump.

Treasury Secretary Steven Mnuchin: GOP Tax Plan Would More Than Offset Its Cost; ‘Not only will this tax plan pay for itself, but it will pay down debt,’ he says
Kate Davidson – WSJ
Treasury Secretary Steven Mnuchin said Thursday a sweeping GOP tax overhaul would generate more than enough economic growth to offset the cost, pressing the administration’s argument that the plan would pay for itself.

Treasury Removes Paper at Odds With Mnuchin’s Take on Corporate-Tax Cut’s Winners
Richard Rubin – WSJ
The Treasury Department has taken down a 2012 economic analysis that contradicts Secretary Steven Mnuchin’s argument that workers would benefit the most from a corporate income tax cut.


FIA recommendations to streamline CFTC regulations and enhance market integrity
FIA responded to the CFTC’s call for suggestions on simplifying and modernizing CFTC rules via Project KISS today.
FIA’s Project KISS response is a single comprehensive letter addressing priority areas where the CFTC can make its regulatory regime more effective and efficient without requiring significant agency resources or resulting in significant costs for market participants.

CFTC Orders Connecticut-Based Tillage Commodities, LLC To Pay A $150,000 Civil Monetary Penalty For Supervision Failures
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Connecticut-based Tillage Commodities, LLC (Tillage), a Commodity Pool Operator (CPO), for failure to supervise its fund administrator’s operation of the commodity pool’s bank account containing pool participants’ funds. Tillage has been registered as a CPO with the CFTC since 2013, with its principal office located in Stamford, Connecticut.

CFTC Orders Morgan Stanley & Co. LLC to Pay $500,000 for Supervision Failures; Firm’s Failure to Implement and Maintain Adequate Systems and Procedures for Reconciliation of Exchange and Clearing Fees Led to Customer Overcharges at Times
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Morgan Stanley & Co. LLC (MSCO), a Delaware limited liability company headquartered in New York City, for failing to diligently supervise the reconciliation of exchange and clearing fees with the amounts it ultimately charged customers for certain transactions on the CME Group, ICE Futures US, and other exchanges. MSCO is registered with the CFTC as a Futures Commission Merchant and a provisionally registered Swap Dealer.

Andrew Calamari, Regional Director of the SEC’s New York Office, to Leave the Agency After 17 Years of Service
The Securities and Exchange Commission today announced that Andrew M. Calamari, Director of the agency’s New York Regional Office, is planning to leave the agency in October after 17 years of service.

Medical Manufacturer Settles Accounting Fraud Charges
A Massachusetts-based medical manufacturer has agreed to pay more than $13 million to settle charges that it committed accounting fraud through its subsidiaries to meet revenue targets and made improper payments to foreign officials to increase sales in certain countries.

SEC Provides Regulatory Relief and Assistance for Hurricane Victims
The Securities and Exchange Commission today announced that it is providing regulatory relief to publicly traded companies, investment companies, accountants, transfer agents, municipal advisors and others affected by Hurricane Harvey, Hurricane Irma, and Hurricane Maria. The loss of property, power, transportation, and mail delivery due to the hurricanes poses challenges for some individuals and entities that are required to provide information to the SEC and shareholders.

FCA chief urges against protectionism in regulatory policy
Caroline Binham – FT
The head of the UK’s financial watchdog has warned against regulations with a protectionist bent, urging instead a common global approach as Brexit nears.

FCA’s Bailey Says Regulators Eager to Solve MiFID Research Snag
By Trista Kelley and Nejra Cehic – Bloomberg
Banks, asset managers held meeting with FCA on MiFID solutions; Firms can ‘get stuck in the middle’ of EU, U.S. rules
Regulators are working to find a solution for asset managers and banks that will be stuck between U.S. and European Union rule books when MiFID II takes effect in January, said Andrew Bailey, the U.K. Financial Conduct Authority’s chief executive officer.

CFTC’s Giancarlo signals priorities; focus on swaps, algos, position reporting
Todd Ehret – Reuters
The U.S. top commodities regulator has been operating with as few as two commissioners in 2017 and hasn’t had a full slate of five commissioners for nearly three years. Now, finally after some recent confirmations by the U.S. Senate, the commission is nearing its intended size and is now signaling its priorities ahead.

SEC Detects Brokers Defrauding Customers
The Securities and Exchange Commission today charged three New York-based brokers with making unsuitable recommendations that resulted in substantial losses to customers and hefty commissions for the brokers. One of the brokers agreed to pay more than $400,000 to settle the charges.

ESMA consults on Guidelines for non-significant benchmarks
The European Securities and Markets Authority (ESMA) has launched a consultation on Guidelines detailing the obligations which apply to non-significant benchmarks under the Benchmarks Regulation (BMR).

ESMA updates Q&A on MAR
The European Securities and Markets Authority (ESMA) has updated its Questions & Answers (Q&A) document regarding the implementation of the Market Abuse Regulation (MAR).

ESMA finalises MiFID II’s derivatives trading obligation
The European Securities and Markets Authority (ESMA) has issued today its final draft Regulatory Technical Standard (RTS) implementing the trading obligation for derivatives under the Markets in Financial Instruments Regulation (MiFIR). ESMA’s draft RTS provides the implementing details for on-venue trading of interest rate swaps (IRS) and credit default swaps (CDS).

ESMA appoints new standing committee chairs
ESMA has appointed new chairs for its Corporate Finance, Corporate Reporting, Financial Innovation, Market Integrity, Post-Trading and Secondary Markets Standing Committees as well as its Commodity Derivatives Task Force.

ESMA updates Q&As on the Benchmarks Regulation
The European Securities and Markets Authority (ESMA) has published updated Questions and Answers (Q&As) regarding the implementation of the Benchmarks Regulation (BMR).

Former Victorian financial adviser banned for forgery
The Australian Securities and Investment Commission (ASIC) has permanently banned financial adviser Koresh Daniel Houghton from providing financial services because he had engaged in misleading, deceptive and dishonest conduct and failed to act in his clients’ best interests when providing advice.

ASIC remakes ‘sunsetting’ class order providing licensing relief for trustees of wholesale equity schemes
ASIC has remade Class Order [CO 07/74] Wholesale equity schemes: Licensing relief for trustees, which provides relief, in specified circumstances, to trustees of wholesale equity schemes from the requirement to obtain an Australian financial services (AFS) licence. The Class Order was due to expire (‘sunset’) on 1 October 2017.

Investing and Trading

Bond Trader Up $10 Million by Joining Bets Yield Curve Too Flat
Brian Chappatta and Edward Bolingbroke – Bloomberg
Big futures trade adds to steepening momentum amid selloff; Treasuries slide as 10-year yield exceeds 200-day average
Traders in the $14.1 trillion Treasuries market are signaling that the persistent flattening of the yield curve this year has gone far enough.

Take the Fed’s Long-Run Forecasts With a Big Pinch of Salt; Deep uncertainty about a key monetary policy variable means investors shouldn’t rely on lower Fed forecasts
James Mackintosh – WSJ
The most important message for economists from the Federal Reserve last week was the lowering of rate-setters’ long-run forecast for interest rates. Fed policy makers dropped their average prediction for long-run interest rates from 3% to 2.8%, implying that if the economy were working perfectly, rates wouldn’t need to be so high to stop inflation taking off.

The world’s largest hedge fund told clients the Fed is making a mistake
Rachael Levy – Business Insider
The world’s largest hedge fund told clients the Federal Reserve was making a mistake by raising interest rates.
“The Fed is basing its moves on classic cyclical indicators and the desire to ‘normalize’ the balance sheet,” Bridgewater Associates told clients in a private note, which was seen by Business Insider. “Based on the calculations that we do, we doubt that the Fed will be able to execute its plan without causing problems.”

Bread and Butter Research Makes Manulife Canada’s Top Stock Fund
Kristine Owram – Bloomberg
‘We learned a lot about the sandwich business,’ manager says; Dividend income fund more than doubles index over 10 years
The managers of Canada’s best-performing large equity fund know their sandwiches.

Buffett Has the Edge on Wealth Managers, Too
Andy Mukherjee – Bloomberg
Warren Buffett may have won his decade-long bet against hedge funds, but can his advice to investors to use only low-cost index funds beat the red-hot record of wealth managers?


What Barclays Should Do to Win Back Shareholder Love; Stop investing in non-existent growth and return cash to shareholders
Paul J. Davies – WSJ
Banks need a good story to explain what they are about. Barclays BCS 1.08% PLC wants to tell a tale of growth, but its audience is struggling to suspend its disbelief.

Volatility Revival Fear Pits Societe Generale Against Barclays
Sam Unsted – Bloomberg
SocGen foresees “insatiable frenzy for yield” fading; No catalyst to upset risk-asset valuations: Barclays
Strategists are taking sides on the outlook for volatility in the months ahead. Barclays Plc reckons markets are unlikely to be spooked by tighter U.S. monetary policy, while valuations and positioning don’t suggest a pullback from risk is in the offing.

World’s Highest Office Yields Are in India, Knight Frank Says
Pooja Thakur Mahrotri – Bloombrerg
Three Indian cities offer the highest yields for prime office space as a shortage of supply allows owners to push up rents, according to Knight Frank LLP.

Deutsche Bank Rating Cut by Fitch as Cryan Turnaround Stalls
Michael J Moore – Bloomberg
Fitch cuts long-term rating to BBB+, three levels above junk; ‘Deutsche Bank has further to go’ than its peers, Fitch says
John Cryan is facing increasing skepticism he can revive growth at Deutsche Bank AG as the lender struggles to win back clients and market share after last year’s slump.

Whitney Tilson to Close Kase Capital Hedge Fund; Tilson’s firm had managed $180 million at its peak in 2010
Gregory Zuckerman and Rob Copeland – WSJ
Whitney Tilson is closing his hedge fund, the latest high-profile investor to close shop amid an extended period of disappointing returns for the industry.

Nomura, RBS lose bid to overturn $839 million mortgage bond award
Brendan Pierson – Reuters
A man holding an umbrella walks in front of a signboard of Nomura Securities outside its branch in Tokyo October 29, 2013. REUTERS/Issei Kato/File Photo
NEW YORK (Reuters) – Nomura Holdings Inc (8604.T) and Royal Bank of Scotland Group Plc (RBS.L) lost a U.S. court appeal on Thursday to overturn an order requiring them to pay $839 million for making false statements while selling mortgage-backed securities to Fannie Mae (FNMA.PK) and Freddie Mac(FMCC.PK).

Invesco to buy Guggenheim Investments’ ETF business for $1.2 billion
Claudia Assis – MarketWatch
Invesco Ltd. IVZ, -0.35% said late Thursday it has agreed to buy the ETF business of Guggenheim Investments for $1.2 billion in a cash-and-debt deal. The acquisition is expected to close in the second quarter, pending approvals, Invesco said. With the deal, Invesco’s ETF assets under management would total more than $196 billion, the company said. Shares of Invesco fell 0.2% in late trading after ending the regular session down 0.4%.


South Korea Joins Cryptocurrency Crackdown; Regulator bans ‘initial coin offerings,’ will step up inspections of virtual-currency exchanges
Gregor Stuart Hunter – WSJ
South Korea will step up inspections of virtual-currency exchanges and has banned so-called initial coin offerings, joining in a widespread cryptocurrency crackdown.

World’s Biggest Oil Company Promised Expats Idyllic Lifestyle—Then Fire Erupted; Saudi Aramco ignored warnings from its own safety experts about the construction of a compound housing foreign workers and their families
Justin Scheck and Bradley Hope – WSJ
As dawn broke on Aug. 30, 2015, Nighat Razi’s neighbors were already screaming. Smoke was spreading through her building in an apartment complex for employees of Saudi Arabia’s state oil company.

Denmark woos big London-based asset managers; Finance minister-led delegation promotes Copenhagen’s appeal after Brexit
Attracta Mooney – FT
Denmark’s business minister will meet big asset managers and banks in London on Friday as the Scandinavian country steps up efforts to lure companies away from the UK capital after Brexit.

Hong Kong Economy Most at Risk of Financial Crisis: Nomura Gauge
Colin Simpson – Bloomberg
China is next most at-risk economy according to latest update; Emerging markets rated at higher risk than developed markets
Hong Kong is the economy most at risk of suffering a financial crisis, with China the second most vulnerable, according to the latest update of an early warning system devised by Nomura Holdings Inc.

China’s bitcoin market alive and well as traders defy crackdown; Activity moves to peer-to-peer exchanges and messenger apps after Beijing’s order to close exchanges earlier this month
Reuters via SCMP
Weeks after Beijing banned fundraising through token launches and ordered some bitcoin exchanges to shut, casting a chill over the cryptocurrency industry, traders say that the market is far from dead.

BofA to relocate 300 traders, support staff to Paris
David Keohane, Laura Noonan – FT
Bank of America is preparing to relocate around 300 traders and support staff to Paris, in another post-Brexit boost to France and its president Emmanuel Macron.


Will the World’s Most Powerful People Lose Their Jobs?; Some of the most powerful people may be out of a job in the next two years.
By Scott Lanman and Daniel Moss – Bloomberg
Every week, hosts Dan Moss and Scott Lanman bring you a jargon-free dive into the stories that drive the global economy. Some of the planet’s most powerful people may be out of a job in the next two years. Beginning in the next few months, terms start ending for the central bankers who control the price of money in the world. First Janet Yellen, whose term ends February. Up next, Haruhiko Kuroda in April. England’s Mark Carney departs in 2019 as does Mario Draghi of the European Central Bank. How many of them will survive and, if they depart, what will be their legacy? Guest Adam Posen, president of the Peterson Institute for International Economics, walks Dan and Scott through the horse race.

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