Hits & Takes
By JLN Staff
The Commodity Futures Trading Commission is scheduled to hold a public meeting Monday morning to vote on new rules on position limits and accountability for security futures products and on public rulemaking procedures. The position limit rule change was published for comment in July 2018. It looks like the commission did not publish its proposals for changes to public rulemaking – perhaps in violation of its rules on public rulemaking? It is always smart to keep an eye on changes to public rulemaking procedures at a government agency like the CFTC, but never more so than when it votes on final rules without first publishing a proposal. Since this commission recently agreed to a gag order to expedite settlement in an important manipulation case (CFTC v Kraft/Mondelez), the industry has to be on full alert about changes to the CFTC’s transparency. ~Thom Thompson
STA has added a new speaker for its annual market structure conference in Washington, D.C. October 2-4. Steph Davis, a free solo climber (no ropes), author, and classical pianist with a master’s in literature will be speaking Thursday morning at 11:00.~SR
The U.K. law firm Michelmores recently conducted a study on a sample group of 500 millennials with investable assets of £25,000. The participants were interviewed about their preferred investment practices. According to the research report published last week, the majority of respondents said that they had invested in shares, pensions and annuities, and stocks; one-fifth of them said they had engaged in cryptocurrency trading. A study published by the U.K.’s Financial Conduct Authority (FCA) in March reported that an estimated 3 percent of the U.K.’s total population had engaged in cryptocurrency trading in one form or another.~MR
Square Crypto announced over Twitter this weekend that it had invested $100,000 in an open-source bitcoin payments startup called BTCPay. According to the tweet, this was due to Square’s ongoing attempts to promote the advancement of open-source crypto technology itself. “This isn’t an investment in a competitor,” the tweet said, “it’s an investment in the future of money—something that Square obviously has a stake in.”~MR
My Scouts BSA troop and its brother troop held a turkey feast on Saturday and fed 82 people with 2 large turkeys, two hams and a lot of sides and pies. It was a beautiful day in Chicago and then overnight we got hammered with thunderstorms. It was the worst it has ever rained while I was sleeping in a tent.~JJL
Rob Khoury – Agile Rainmakers
In this video from our MarketsWiki Education World of Opportunity event in Chicago, Robert Khoury, the CEO of Agile Rainmakers, a business development consultant and advisory firm, gives graduating students tips on job interviewing and careers, drawing from his 21 years in the financial industry. He learned a lot from his mistakes, and his practical suggestions are intended to empower those just starting out on a career in the financial industry or in any field.
Watch the video »
Statement by the Directors of the Division of Clearing and Risk and the Division of Swap Dealer and Intermediary Oversight Concerning the Treatment of Separate Accounts of the Same Beneficial Owner
CFTC September 13, 2019
As Directors of the Division of Clearing and Risk and the Division of Swap Dealer and Intermediary Oversight, we wish to reemphasize that all registrants, in particular futures commission merchants (“FCMs”), must comply at all times with all Commission regulations and derivatives clearing organization (“DCO”) and self-regulatory organization rules.
*****We really, really want you to listen to us just in case there was some confusion the first time.~JJL
Democracy Requires Discomfort; Agreeing to disagree is a civic virtue.
Michael R. Bloomberg – Bloomberg
American politics is broken, and too few people are thinking about how to mend it. Donald Trump’s presidency has aroused strong and often angry passions among both opponents and supporters, but the problem runs much deeper than that. More and more, political rage seems to be crowding out political engagement. And make no mistake: Without engagement, liberal democracy can’t survive.
******Yes, politics is broken.~JJL
Failure to Supervise; Misleading the CFTC; Audit Trail; Unauthorized Trading
Gary DeWaal – Bridging the Week
An interdealer broker agreed to pay a fine of US $13 million to the Commodity Futures Trading Commission to resolve charges that it failed to supervise brokers on a swaps desk that allegedly made numerous false or misleading statements to customers regarding executions, bids and offers. The CFTC also claimed the firm failed to respond adequately when an employee raised concerns regarding the conduct of the relevant desk to the firm’s compliance department. Additionally, another employee of the firm purportedly provided false or misleading information to the CFTC during a voluntary interview related to the Commission’s investigation. Separately, a futures commission merchant was sanctioned US $300,000 by the CFTC for allegedly not producing requested complete audit trail records of a customer until almost three years after the Commission’s initial request.
Friday’s Top Three
Our top read item on Friday was the Obituary of John Robert Collins. Second was the Bloomberg piece LSE Slams Door on Hong Kong Exchange’s Takeover Plans. Nice headline. Third was Bloomberg’s story Sex Jokes and Lost Business Fuel Saleswoman’s Fight With Cantor, about the Randee Paston case.
163,273,876 pages viewed; 23,918 pages; 221,543 edits
Why London Spurned Hong Kong; China’s intervention is eroding the city’s economic status.
The Editorial Board – WSJ
The London stock exchange rejected a surprise takeover bid from its Hong Kong rival on Friday, citing “fundamental concerns” about the price and purpose of the offer. More intriguing may be what the bid says about the costs of Chinese political encroachment in Hong Kong.
UK markets watchdog calls for EU action to avoid Brexit disruption
Huw Jones – Reuters
Overlapping British and European Union share trading rules would damage markets “to no good end” and can be avoided if the bloc is more accommodative, Britain’s top markets watchdog said on Monday.
Oil Prices Jump Most on Record After Saudi Arabia Strike
Serene Cheong and Dan Murtaugh – Bloomberg
About 5.7 million barrels — 5% of global market — affected; Brent holds on to $5 gain after surging almost 20% at the open
Oil posted its biggest ever intraday jump, briefly surging above $71 a barrel after a strike on a Saudi Arabian oil facility removed about 5% of global supplies and raised the specter of more destabilization in the region.
What’s Behind the World’s Biggest Climate Victory? Capitalism
Lynn Doan, Brian Eckhouse, Christopher Cannon and Hannah Recht – Bloomberg
The chief executive of the world’s largest private coal company sat before a group of U.S. lawmakers who wanted to know whether the fuel had a future. He didn’t hesitate. “Coal,” he said, “is the future.”
Trump Authorizes SPR Oil Release After Saudi Supply Disruption
Stephen Cunningham and Ari Natter – Bloomberg
SPR tapped in first Gulf War, Hurricane Katrina, Libya crisis; Reserve draw down may help counter potential oil price spike
U.S. President Donald Trump authorized the release of oil from the nation’s emergency oil reserves after a series of drone attacks in Saudi Arabia knocked out half of the kingdom’s crude output, or about 5% of world supplies.
Wall Street Used to Crunch Numbers. They’ve Moved On to Stories
Craig Torres – Bloomberg
Narrative economics set to gain traction with new Shiller book; Hi-tech investors can track how stories about economy spread
U.S. business may have been talking itself into a slowdown. That’s one way of reading a study by the Carlyle Group, using techniques from narrative economics – – an emerging field set to gain momentum with the publication of Nobel prize-winner Robert Shiller’s much-anticipated book on the topic.
Banks Warm to Mortgage Bonds That Burned Them in 2008; Citigroup, Goldman Sachs and Wells Fargo are getting back into the business
Ben Eisen and Telis Demos – WSJ
Banks are getting back into the business of building mortgage bonds, laying the groundwork for a market that stands to grow as the Trump administration tries to reduce the government’s role in housing finance.
Ex-Deutsche Bank CEO Cryan to chair Man Group from January
British hedge fund Man Group (EMG.L) said on Monday that the former Deutsche Bank chief executive John Cryan has been appointed chairman and will start his new role in January 2020, replacing Ian Livingston.
Political crisis overshadows Hong Kong’s financial showcase; Nerves on display at city’s annual event hosted by broker CLSA
Hudson Lockett and Leo Lewis – FT
Delegates attending Asia’s biggest and most exclusive annual investor forum in Hong Kong earlier this week were confronted by a jarring sight.
DoJ charges three JPMorgan metals traders with market manipulation; US prosecutors uncover ‘massive, multiyear scheme’ to defraud customers
Henry Sanderson – FT
The global head of precious metals trading at JPMorgan, one of the biggest bullion banks, has been charged by US prosecutors with running an eight-year conspiracy to manipulate the global precious metals markets and defraud its customers.
Crypto Firms Assess How to Comply With Anti-Money-Laundering Standards; Recent guidance from the Financial Action Task Force has forced the cryptocurrency industry to try to find common ground on adopting stronger controls
Kristin Broughton – WSJ
The cryptocurrency industry is rushing to comply with new anti-money-laundering standards that require exchanges and other firms to share information about their customers.
Exchanges, OTC and Clearing
Risk parameters change on Derivatives market before trading session start
According to the Risk parameters methodology on Derivatives market before trading session start on September 16, 2019 upper bound of price band and risk bound will be changed for futures on BRENT oil (BR) and Light Sweet Crude Oil (CL). Market risk rates will be set as follows:
The London Stock Exchange was wrong to reject Hong Kong’s US$36.6 billion offer. It needs to think bigger or risk being left behind
Anthony Rowley – South China Morning Post
In rebuffing HKEX’s bid, the London Stock Exchange has failed to consider the role it could play as a funding centre for China’s belt and road. If Brexit happens and its position is diminished as a result, attitudes may well change
London Stock Exchange rejection ‘shows Hong Kong can’t make it alone’; City must align with China’s national interests to make the most of the country’s opportunities, Communist Party mouthpiece says
Amanda Lee – South China Morning Post
The London Stock Exchange Group’s preference for Shanghai over Hong Kong as a Chinese market partner shows that the southern city cannot break away from the mainland and develop on its own, according to a Communist Party mouthpiece.
London stock market is ailing and it deserves the kiss of life; The LSE cannot gloss over the precipitous fall in follow-on funding
Kate Burgess – FT
Helios Towers, operator of mobile masts in Africa, has dusted off old plans to list in London. But even if it achieves a £2bn valuation, it won’t do much to resuscitate the UK’s sluggish market in initial public offerings. The roster of new companies floating on the London Stock Exchange has slowed to a trickle.
SGX Bull Charge Charity Futsal brings together local soccer stars and artistes to raise $178,000
ICBC leads corporate sponsors as tournament’s first title sponsor; All proceeds to be channelled to beneficiaries through Community Chest
The SGX Bull Charge Charity Futsal tournament today brought together local soccer heroes and artistes to raise $178,000 for a meaningful cause.
Fintech company Plaid gets infusion from Visa, Mastercard
Nick Brown – Reuters
Financial technology company Plaid Inc on Monday said it is set to receive new backing from Visa Inc and Mastercard Inc as part of a new round of Series C financing worth a total of $250 million.
Libra is an opportunity to leapfrog Chinese fintech to achieve cashless economy
Peter Morici – MarketWatch
Few things unite Democrats, the Trump administration,the Federal Reserve, and even France’s Finance Ministry like opposition to Facebook’s FB, -0.15% Libra. The principal grievances are that widespread use of Libra could instigate financial instability and further enable the illicit transactions of drug dealers and terrorists.
Virtually all this is disingenuous and reflects the insecurity of the political class.
Wall Street banks are upping bets on their potential fintech competitors
Kate Rooney – CNBC
The biggest banks on Wall Street are increasingly betting on their potential competition. So far this year, major U.S. banks have participated in two dozen financial technology, or fintech, equity deals, according to a recent report by CB Insights. This is tracking to be on par with last year — which saw a 180% increase in bank investments from a year earlier.
Connamara Systems Selected by MaterialsXchange as its Matching Engine Technology Provider
Connamara Systems, a leading provider of exchange matching engine technology, today announced that it has been retained by MaterialsXchange, a startup aiming to create a digital marketplace for raw materials industries.
Market data snafu presents headaches for traders during wild week
The Block Crypto
Adding to the anxiety that gripped Wall Street this week, traders also had to deal with a data glitch that rippled through the market, according to a report by The Wall Street Journal.
Bloomberg takes B-PIPE data feed to the cloud globally with AWS; Bloomberg initially launched its real-time market data feed, B-PIPE, in the cloud with AWS for US clients late last year.
Hayley McDowell – The Trade
Bloomberg has made its real-time market data feed B-PIPE available in the cloud through Amazon Web Services (AWS) for its clients globally, shortly after rolling out the cloud service for clients in the US.
Deutsche Bank Joins JPMorgan’s Crypto Payments Network
Daniel Palmer – Coindesk
JPMorgan’s blockchain-based payments initiative has added Deutsche Bank as its latest member. The addition brings the total number of banks signed up for the Interbank Information Network (IIN) to 320, according to a report from the Financial Times on Sunday. Announced in October 2017, IIN is built on Quorum, the ethereum-based blockchain network developed by the banking giant, and employs a stablecoin dubbed JPM Coin.
China’s PBC Is Warming Up To Digital Currencies — Good News For Bitcoin, ETH, XRP, and LTC
Panos Mourdoukoutas – Forbes
China’s Central Bank, the People’s Bank of China (PBC), is planning to introduce its own digital currency. That’s according to an article published in Globaltimes last week, which says that the PBC applied for 74 patents involved with digital currencies to the National Intellectual Property Administration, in order to speed up the development of a legal digital currency.
The IRS Is Blindly Coming After Cryptocurrency Traders — Here’s Why
David Kemmerer – Cointelegraph
Over the past month, we have seen the IRS, the tax collecting agency of the United States, send out more than 10,000 warning and action letters to suspected cryptocurrency holders and traders who may have misreported digital assets on their tax returns. Letters like the 6174-A, 6173 and CP2000 have appeared in the mailboxes of cryptocurrency traders throughout the country, and the crypto tax software company that I run has seen an influx of frantic customers coming to us for tax help out of fear of penalties.
Bakkt in the (Crypto) Saddle
The Streetwise Professor
ICE is on the verge of launching Bitcoin futures. The official start date is 23 September.
The ICE contract is distinctive in a couple of ways.
Trump Executive Order Banning A Cryptocurrency Could Mutate Into Far-Reaching Law
Michael del Castillo – Forbes
There are at least 20 bills related to blockchain in various stages of being considered by the United States Congress, but only one is of imminent, potentially urgent concern to cryptocurrency users, according to Jason Brett, founder and CEO of the Value Technology Foundation, a newly formed research firm in Washington, D.C., dedicated to blockchain law.
Exclusive: Libra Investment Token Vendors “Selling Thin Air”
David Kimberley – Finance Magnates
Speaking to Finance Magnates at the Ethereal Summit in Tel Aviv on Sunday, Tomer Barel, the chief operating officer at Facebook’s blockchain project Calibra, said that the social media giant has no connection to trading that is taking place in Libra investment tokens.
US Sanctions Three Alleged Crypto Hacking Groups from North Korea
Richard Meyer – Coindesk
The U.S. has sanctioned three North Korean entities for cyber crimes, mentioning cryptocurrency thefts as one of the reasons for the action. In a Sept. 13 announcement, the U.S. Department of the Treasury identified the Lazarus Group, Bluenoroff and Andariel as entities now on its the sanctions list, who are believed to be responsible for the theft of $571 million worth of cryptos from five exchanges in Asia in 2017 and 2018.
OKEx South Korea to Delist Five Privacy Coins
Celeste Skinner – Finance Magnates
The South Korean branch of OKEx, a cryptocurrency exchange, has announced that it is delisting all five privacy coins – monero (XMR), dash (DASH), zcash (ZEC), horizen (ZEN) and super bitcoin (SBTC). According to the statement from the crypto exchange, the privacy coins “violate regulatory laws”.
Deutsche Bank Joins Financial Services Blockchain Project
Kinsey Grant – Morningbrew.com
What’s a $17.5 billion German lender to do after being raided as part of a money laundering investigation, planning to cut 18,000 jobs, and getting tied up in the president’s finances? Pivot to blockchain.
Kaleido’s Enterprise Clients Can Now Transfer Tokens In Complete Privacy
Daniel Kuhn – Coindesk
Kaleido’s software-as-a-service blockchain solution will now offer an advanced privacy protection service.
Neufund Gets Nod from Liechtenstein Regulator for Token Offerings
William Foxley – Coindesk
Fintech startup Neufund has begun launching public offerings on its tokenized equity platform after receiving clearance from a financial regulator in Liechtenstein.
Report: Crypto QR code hacking on the rise
John Galt – Decrypt via Yahoo Finance
So just how common is QR code hacking in crypto? A recent report says it’s happening a lot more than people think. Researchers from crypto wallet provider ZenGo recently began looking into QR code integration and came across reports of sites using that method to scam users out of bitcoin, according to the report. As they began investigating, they discovered these incidents weren’t isolated, but part of a widespread fraud designed to direct transfers not to user’s wallets, but to the hackers’ own.
Libra Alarm Sounded in EU With Warning on High Bar for Approval
Kati Pohjanpalo and Leo Laikola – Bloomberg
ECB’s Coeure sees ‘very strong concerns’ on cryptocurrencies; Facebook’s Libra has attracted scrutiny from EU regulators
The European Central Bank warned Facebook Inc. that the bar for regulatory approval of its planned Libra project has been set very high as governments in the region express concerns about digital currencies.
Hodl Hodl Wants You to Clone Its Bitcoin Exchange
Anna Baydakova – Coindesk
Hodl Hodl plans to make its software freely available so anyone can launch their own version of the peer-to-peer bitcoin exchange.
Trump Is Cornered by the Saudi Drone Attacks; The president’s inconsistency on Iran and his ties to the Saudis don’t bode well for how he will handle a monumental foreign policy challenge.
Timothy L. O’Brien – Bloomberg
A small squadron of drones — and possibly cruise missiles — penetrated Saudi Arabia’s air defenses on Saturday, laying waste to a significant, valuable portion of two of the world’s most essential oil processing facilities. Amid worries about the impact of the strikes on global oil markets (half of the kingdom’s oil output was affected) and fears about broader military confrontations upending a region perennially vexed by crossed swords, ancient religious rifts, geopolitical maneuvering and greed, facts and conjecture began jockeying for attention.
Donald Trump Will Have To ‘Face The Music’ After Court Revives Emoluments Case, Harvard Law Professor Says
Alexandra Hutlzler – Newsweek
Harvard Law professor Laurence Tribe said Donald Trump will have to “face the music” after the U.S. Court of Appeals for the Second Circuit on Friday revived a lawsuit alleging the president is violating the Constitution with his business entanglements.
The reckless analogy between China and Nazi Germany; The more Beijing is described as an enemy, the more it will behave like one
Edward Luce – FT
I made the mistake last week of contradicting a China hawk on Twitter. He had compared China today to Nazi Germany “circa 1935”. My response — “China is not Nazi Germany: reckless analogy” — triggered an onslaught of Sinophobic invective. “Definitely worse. The Nazis didn’t have wholesale organ harvesting,” said one. “Count the bodies. The CCP is no better than the Nazis,” said another. “The only reckless thing is appeasement idiots like you downplaying what the CCP really is,” said another. Unless you are a fan of Twitter threads, which can go on indefinitely, it is a poor forum for engaging in intellectual persuasion. So here you go Swampians.
Warren’s plans for Big Tech and Big Banks are big trouble
Jonathon Trugman – NY Post
Last week, Elizabeth Warren made it clear she wants to reign in the banks and Wall Street, and break up Big Tech.
Lawmakers Make Long-Shot Bid to Check Presidential Tariff Powers; Trump’s trade disputes spur bipartisan efforts, but veto power remains a hurdle
Lindsay Wise – WSJ
In Sen. Jerry Moran ‘s home state of Kansas, support for President Trump remains high. But so does anxiety among farmers and manufacturers about the economic fallout from the tariffs Mr. Trump has imposed.
Hong Kong Protesters Defy Police Ban To March Through Downtown; Thousands of protesters took to the streets again on Sunday, chanting slogans and waving U.S. and British flags.
Thousands of demonstrators chanted slogans and marched through downtown Hong Kong on Sunday in defiance of a police ban, as shops shuttered amid fears of renewed violence in the semiautonomous Chinese territory that has been unsettled by months of protests.
We’ll Miss Pax Americana Once It’s Gone; The postwar structure set up by the U.S. made the world safer and more prosperous.
Noah Smith – Bloomberg
Pax Americana – the global state of relative order, peace and free trade that characterized the era of U.S. economic and military supremacy – may be on the verge of unraveling. And if it does, it will have grave economic consequences.
The Conservative Case for Clean Air Regulations; New research should cause opponents of government intervention to rethink their position.
Karl W. Smith – Bloomberg
Skepticism of government regulation is one of the main tenets of economic conservatism, and for the most part is it justified. In one area, however, conservatives need to rethink their position: New research shows that air pollution is much deadlier than previously realized, so they should support greater government efforts to reduce it.
Trump Administration Scraps 20 Miles of Wall After Savings Fade
Joe Schneider – Bloomberg
The Trump administration scrapped three border wall projects that it said it intended to build using money found from cost savings in constructing other portions of the barrier along the southern border.
U.K. Watchdog Promises ‘High Level of Scrutiny’ for HKEX-LSE Bid
Viren Vaghela and Silla Brush – Bloomberg
Britain’s top market watchdog promised tough scrutiny for Hong Kong Exchanges & Clearing Ltd. if it presses forward with its bid for London Stock Exchange Group Plc. “It’s a high level of scrutiny due to the significance of the stock exchange,” Financial Conduct Authority Chief Executive Officer Andrew Bailey said Monday in a Bloomberg Television interview. “There’s no formal proposal on the table yet, so we are in listening mode. It’s a very important piece of infrastructure.”
UK watchdog says has no view yet on Hong Kong exchange bid for LSE
Britain’s markets watchdog said on Monday it has yet to take a position on whether the Hong Kong exchange’s $39 billion rebuffed offer for the London Stock Exchange should go ahead.
FCA chief calls on EU to soften stance on markets in event of no-deal Brexit; Andrew Bailey pushes for more equivalence permits to smooth potential disruption
Philip Stafford – FT
The head of the UK markets regulator has called on Brussels to offer more equivalence permits to smooth potential disruption to markets if the UK leaves the EU without a deal next month.
Precious Metals Traders Charged With Rigging Futures Contracts
Tom Schoenberg – Bloomberg
Two current, one ex-trader indicted in racketeering probe; Head of global precious metals desk Nowak charged in case
Two current and one former precious metals traders at JPMorgan Chase & Co. were charged with manipulating the markets for precious metals futures contracts.
Esma hits back at FCA’s criticism of fund rules; Regulators’ divergent views flag tensions about post-Brexit plans
Chris Flood – FT
One of Europe’s top financial regulators has rebuffed criticism suggesting that design flaws in European regulations contributed to the meltdown at the flagship investment fund run by Neil Woodford, the UK stockpicker.
Tullett Prebon to pay $13 million for swaps trading desk compliance failures; The CFTC said that Tullett Prebon’s voice brokers made false or misleading statements to clients related to certain trades, bids and offers in US dollar interest rate swaps.
Hayley McDowell – The Trade
Interdealer broker Tullett Prebon has been fined $13 million by the US derivatives watchdog for failing to supervise its interest rate swaps trading desk, which made false statements on transactions to clients.
CFTC Orders Interdealer Broker to Pay $13 Million for Supervisory Failures and False Statements
The U.S. Commodity Futures Trading Commission today issued two orders filing and settling charges against Tullett Prebon Americas Inc., an interdealer broker and CFTC-registered introducing broker headquartered in New Jersey. The combined orders require Tullett to pay a total of $13 million for failing to supervise employees and making false or misleading statements to CFTC staff.
CFTC Market Risk Advisory Committee Approves Plain English Disclosures at Public Meeting
The U.S. Commodity Futures Trading Commission’s Market Risk Advisory Committee (MRAC) approved plain English disclosures for new derivatives referencing the London Interbank Offered Rate (LIBOR) and other IBORS at its September 9, 2019 public meeting. Commissioner Rostin Behnam is the sponsor of MRAC.
CFTC Extends Public Comment Period for Proposed Rules Pertaining to Cross-Border Clearing
The U.S. Commodity Futures Trading Commission announced today that it is extending to November 18 the comment period for the proposal for an alternative compliance framework for derivatives clearing organizations (DCOs) organized outside of the United States that do not pose substantial risk to the U.S. financial system. Under the proposal, these DCOs would be able to register with the CFTC yet comply with the core principles applicable to DCOs in the Commodity Exchange Act through compliance with their home country regulatory regime, subject to certain conditions and limitations. The original comment period for the proposed rule was to expire on September 17.
Joint Statement of the CFTC and the European Commission Following Meeting on Cross-Border Derivatives Regulatory Issues
The following statement is released following a meeting between Heath Tarbert, Chairman, U.S. Commodity Futures Trading Commission and John Berrigan, Deputy Director General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), European Commission held in Washington, DC on September 5, 2019:
Investing and Trading
Wall Street’s first cannabis analyst names her top US marijuana stocks
Zack Guzman – Yahoo Finance
Top Cowen analyst Vivien Azer started covering the main cannabis players in 2016, about two years before Canada even legalized adult recreational use.
Blindsided Bond Traders Can’t Count on Fed Dots; The market’s guess on where interest rates go next is as good as central bankers’ at this point.
Brian Chappatta – Bloomberg
Heading into September, the $16 trillion U.S. Treasury market was signaling dark days ahead for America’s economy.
Fed trades ‘remarkably positive’ for ‘no precedents’ after volatile year
Howard Schneider – Reuters
A year ago, U.S. Federal Reserve Chair Jerome Powell held a “remarkably positive outlook” for an economy enjoying a “historically rare” combination of good news including low unemployment, steady inflation and strong growth that were all expected to continue.
Index Funds Face Heightened Risk From Climate Change
Jeff McMahon – Forbes
Index funds and the investors who own them face an unmanageable risk from climate change, according to the director of Stanford University’s Sustainable Finance Initiative. Many of those investors are pensions.
How to Avoid Financial Deadlock—or Worse—After One Spouse Dies
Cheryl Winokur Munk – Barron’s
In many relationships, it’s common for one spouse to play money manager and the other to take a more passive role. This, however, can lead to major complications when the financially dominant partner dies first.
UK financial sector optimism falls as bosses brace for economic slowdown
James Warrington – City AM
The majority of top executives at UK financial institutions are less optimistic about the country’s economic outlook than they were a year ago.
Worried about the stock market? Here are easy ways to cut risk
Philip van Doorn – MarketWatch
Growth has beaten value in the stock market for many years. But if you are feeling uncertain about the market — the trade standoff, Brexit, the health of the European Union, the threat of a recession and years of unprecedented stimulus by central banks — it may be time for you to diversify or consider a value-oriented strategy.
Crispin Odey Opens His Hottest Hedge Fund to External Clients
Irene Garcia Perez – Bloomberg
The Odey Concentrated Natural Resources fund has returned 32%; Most of the returns have come from short selling shares
Crispin Odey, whose main fund has seen excruciating losses and spectacular gains, is opening up his firm’s best performing money pool to external investors.
Hedge Fund Manager Leon Cooperman Calls Private Equity A Scam
Lawrence Carrel – Forbes
Legendary hedge-fund manager Leon Cooperman wasn’t pulling any punches as he sat for an interview in front of about 100 members of the hedge fund industry. First he lambasted the Securities and Exchange Commission (SEC), calling it abusive and mean. Then someone asked what he thought of private equity.
Standard Chartered Couldn’t Tell Regulator How Some Rich Clients Got Rich
Harry Wilson, Gavin Finch, and Ambereen Choudhury – Bloomberg
Dubai authorities found numerous source-of-wealth breaches; Bank is reviewing roughly 8,000 clients at its private bank
Standard Chartered Plc, fined billions of dollars since 2012 for regulatory violations, has discovered that it cannot explain how some of its wealthiest clients acquired their fortunes and is reviewing thousands of customer accounts at its private bank.
Bank Profits Plunge in Denmark as Negative Rates Take Toll
Frances Schwartzkopff – Bloomberg
Net income fell 20% in first half of 2019, lobby group says; Central bank had pointed to solid profits in defense of policy
Banks in Denmark have seen their aggregate profits sink this year, according to calculations by the industry’s main lobby group, which has repeatedly urged monetary policy makers to provide relief from long-term negative interest rates.
BNP Paribas Apologizes for Employee’s Post on Hong Kong Protests
Alfred Liu and Bei Hu – Bloomberg
Employee deleted offensive posting after BNP takes action; French lender is latest firm to respond amid rising tensions
BNP Paribas SA became the latest global firm to be dragged into the tensions roiling Hong Kong after the French lender publicly apologized for a posting on an employee’s personal social media account.
Have asset managers put enough money aside to deal with a crisis? In the wake of liquidity issues at GAM and H20, rival groups are grappling with how they would cope
Attracta Mooney – FT
Liquidity resurfaced as a worrying theme in the fund industry as GAM, Woodford Investment Management and H2O were jolted by panicky investors charging for the exits. The focus is on whether the sector has put enough money aside to deal with unexpected risks.
Former Deutsche Bank chief Cryan appointed chairman of Man Group; John Cryan was CEO of Deutsche Bank from July 2016 until April 2018, amid a turbulent time for the investment bank.
Hayley McDowell – The Trade
UK hedge fund Man Group has confirmed the appointment of former Deutsche Bank chief executive officer, John Cryan, as its new chairman.
Moody’s cuts Hong Kong’s outlook to ‘negative’ amid growing risks; Rating agency warns of ‘erosion in the strength of Hong Kong’s institutions’
Hudson Lockett – FT
Moody’s has downgraded Hong Kong’s rating outlook to negative, citing growing risks to the Asian financial hub’s institutional strength, but maintained its current rating in a break with the recent downgrade by rival Fitch Ratings.
Hong Kong’s financial war chest is big enough to withstand any 1998-like short sellers’ attack, says monetary authority’s chief
Enoch Yiu – South China Morning Post
Short sellers could not successfully attack the Hong Kong stock and futures markets now like they did in the Asian financial crisis because the city’s financial market is much larger and they would need “much more bullets” than they could afford, said Norman Chan Tak-lam, chief executive of the Hong Kong Monetary Authority, the city’s de facto Central Bank.
China’s Bond Traders Stuck With a Market That Just Doesn’t Move
Worst week since April was tiny relative to global bond rout; Benchmark 10-year yield moving in narrowest range since 2012
While most of the world’s bond markets swing between massive gains and losses, traders in China are getting increasingly stuck.
The $24 Billion Online Casino Boom China Is Struggling to Halt; The Communist Party is hard-pressed to stop the spread of digital gambling in Asia.
K Oanh Ha, Jinshan Hong and Andreo Calonzo – Bloomberg
It’s 6:30 on a Monday morning in China, and the Guangdong Club online gambling platform is humming as a stream of wagers placed in Chinese yuan flows through the portal. The club, which lists its place of registration as Costa Rica, hosts operators offering hundreds of sessions for such popular games as baccarat and blackjack, lotteries, and sports betting—many of them in Chinese. A single baccarat table can draw betting volumes touching 75,000 yuan ($10,500) in a 30-second game.
Farage says Brexit will be delayed again when Johnson’s deal falls
Guy Faulconbridge – Reuters
Brexit campaigner Nigel Farage says he believes Britain’s departure from the European Union will be delayed again because parliament will reject Prime Minister Boris Johnson’s attempt to do a last-minute deal with Brussels.
We will not extend Brexit transition period – UK PM Johnson’s spokesman
Britain has no intention of seeking an extension to the transition period after it leaves the European Union if a divorce deal is struck with the bloc, Prime Minister Boris Johnson’s spokesman said on Monday.
British PM ‘cautious’ ahead of Brexit talks with EU’s Juncker
Foo Yun Chee, Elizabeth Piper – Rueters
British Prime Minister Boris Johnson was feeling “cautious” as he went into talks on a Brexit deal with European Commission chief Jean-Claude Juncker on Monday, as rhetoric from both men over the weekend suggested their positions remain far apart.
Brexit: Deutsche Bank cuts probability of no-deal to 35% vs 50%
Deutsche Bank said on Monday it cut its probability that Britain will crash out of the European Union on Oct. 31 without a deal to 35% from 50% previously after lawmakers passed a law that could force Prime Minister Boris Johnson to delay the process.
Tony Blair: All Brits are sick of Brexit
David Cohen – Politico
Former British Prime Minister Tony Blair said Sunday the British people all agree on one thing about Brexit: They are sick of hearing about it.
Boris Johnson’s Nightmare on Downing Street
Tim Ross, Jess Shankleman, and Alex Morales – Bloomberg
U.K. premier came close to firing top minister during panic; Johnson’s top aide urges everyone to act cool like ‘The Fonz’
Boris Johnson put down the phone and panicked. It was Saturday night and he had just received a call from his work and pensions secretary, Amber Rudd, who told him that after only six weeks in his cabinet, she could no longer stand his reckless leadership and was resigning.
How to be a CEO
Joy Burnford – Forbes
Given the shockingly low number of women CEOs across the globe, I went in search of some insights into what it takes for a woman to reach the very top of her profession. Here Catherine Crump, CEO of insight and innovation consultancy, Decidedly (formerly FreshMinds), shares her journey.
Hey CEOs, Have You Hugged the Uncertainty Monster Lately? Businesspeople are haunted, and sometimes paralyzed, by uncertainty. This monster, however, can be a friend.
John D. Stoll – WSJ
Uncertainty is the monster that lives under the bed of every CEO. It waits until the door is shut and the lights are out, and even then, it bides its time. Pulses race, sweat beads, no move seems the right one.