Why Profiting From Wall Street Fear is No Longer Easy for Cboe

May 3, 2018

First Read

Crypto Regulation Is Just Getting Started
Jim Kharouf – JLN

One thing is certain about regulation of cryptocurrencies and other digital assets. We’re in the earliest of stages.

And we’re caught between industry participants clamoring for clarity and regulators taking varied and measured approaches. It’s an awkward time for this market as new ideas and uses for initial coin offerings range from the next great financial payment system on blockchain to the world’s first blockchain toothbrush that lets you mine coins by brushing your teeth.

Last month, the Institute For Financial Markets hosted its second Smart Regulation Roundtable event, Implications of Cryptocurrencies, which covered just where we are and where we may be headed with regulation on coins and ICOs. You can find the report John Lothian Productions wrote, The Dawn of Crypto Regulation for the IFM.

To read the rest of this story, go HERE.

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Hits & Takes
JLN Staff

Congratulations to Gary Katz on being awarded the Joseph W. Sullivan Award at the Options Industry Conference. Katz was humble in his description of how previous Sullivan award winners Ivers Riley and David Krell mentored and guided him during his career. He flashed his understated humor in comparing his new initiative in snack foods to the options industry, noting his snacks had “brown shells and the options industry has Shelly Brown (of Miax).~JJL

Here is a picture of Gary Katz on the big screen at OIC while accepting the Options Conference Joseph Sullivan Award. In a nice hat tip to JLN, he said all his thanks to everyone who helped and influenced him would be “longer than the longest MarketsWiki page.”~JJL

Gary Katz said his path back to the options industry involves snack foods, shown here.~JJL

TMX’s OIC beaver swag HIGHlights cannabis options trading success.~JJL

The new TT Crypto platform is now available – and it’s free. Trade #bitcoin, #ethereum and more on @Coinbase’s @GDAX.~JJL

Thank you to all the sponsors of the Options Conference.~JJL

Hanweck sponsored flip flops during the beach party at OIC. They made a good impression on the attendees and the sand.~JJL

After 13 rewarding years Kelly Brown has departed CME Group for other opportunities, he reported on LinkedIn.~JJL

Patrick Thornton-Smith passed this along: The inaugural Futures for Kids (FFK) 10k , and a 5K, fun run to celebrate the 10th anniversary of the charity is on course for a great event on May 23rd at the London Olympic Park. The event is being sponsored and supported by: ION Trading, Calypso, Cinnober, GHF, OSTC, RJO’Brien, Fidessa, FIA, FOW, Kite Consulting, KRM 22, Illuminate Financial, JLN and Cult Wines. Over 100 runners have signed up and they expect to get close to 200. Anyone interested in joining or donating please go here. ~SR

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Nandini Sukumar Explains the WFE’s Mission and Vision

JohnLothianNews.com

Nandini Sukumar took the reins as CEO of the World Federation of Exchanges in 2015. Under her leadership, the 57-year-old organization has been revitalized and its membership now represents more than 200 market infrastructure providers. She spoke with JLN’s Jim Kharouf about how WFE approaches key issues facing exchanges, clearing houses and other market participants. She said one of the organization’s main points of focus, now 10 years since the 2008 financial crisis, is maintaining trust in the exchange space.

Watch the video »

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IFM Publishes New Report: The Dawn Of Crypto Regulation
IFM
On April 11, 2018, regulators, academics and market users gathered in Washington DC to discuss the issues, challenges and future of regulation for the digital asset space. Titled “Smart Financial Regulation Roundtable: Implications of Cryptocurrencies,” the program featured three separate sessions. Here is a full recap from the event and the state of crypto regulation, produced by John Lothian Productions.
/jlne.ws/2rdyin4

**This report features great commentary from CFTC Commissioner Rostin Behnam, Gary DeWaal, Chris Brummer, Paul Atkins, Sara Hanks and others. It contains more than 20 different links to sources on cases, papers and issues in crypto regulation.

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A Verbal Cryptobrawl Breaks Out at Milken Over Bitcoin’s Future
Matthew Leising – Bloomberg
Sides square off on whether cryptoassets can change the world; Nouriel Roubini gets colorful, internet pioneers push back
A cryptocurrencies panel at the Milken Institute Global Conference was more like a cryptobrawl — no punches but a barrage of barbed comments. “All this talk of decentralization is just bullsh*t,” said Nouriel Roubini, an economist known as Dr. Doom for predicting the chaos of the 2008 financial crisis.
/jlne.ws/2FDYTyO

***** Hyperbole meets economic straight talk.~JJL

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The Gambler Who Cracked the Horse-Racing Code; Bill Benter did the impossible: He wrote an algorithm that couldn’t lose at the track. Close to a billion dollars later, he tells his story for the first time.
Kit Chellel – Bloomberg
Horse racing is something like a religion in Hong Kong, whose citizens bet more than anyone else on Earth. Their cathedral is Happy Valley Racecourse, whose grassy oval track and floodlit stands are ringed at night by one of the sport’s grandest views: neon skyscrapers and neat stacks of high-rises, a constellation of illuminated windows, and beyond them, lush hills silhouetted in darkness.
/jlne.ws/2jp4259

***** Any relation to Peaky Blinders?~JJL

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Wednesday’s Top Three
We love milk. Bloomberg’s As Dairy Goes Global, More Farmers Turn to Futures and Options, about hedging with milk futures, was the most read piece yesterday. Second was the Streetwise Professor’s Begging the Question on VIX Manipulation. Third was the Bloomberg piece Economists Invoke Great Depression in Warning to Trump on Trade

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MarketsWiki Stats
124,950,338 pages viewed; 23,091 pages; 212,929 edits
MarketsWiki Statistics

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Lead Stories

Why Profiting From Wall Street Fear is No Longer Easy for Cboe; Number of VIX futures contracts outstanding declined precipitously since early February, ahead of Cboe’s earnings
Gunjan Banerji – WSJ
Anxiety is back on Wall Street. That should be good news for Cboe Global Markets Inc., CBOE -0.47% the operator of the VIX index of expected stock swings, widely known as the market’s fear gauge.
/jlne.ws/2jqItkQ

Stock Exchanges Get Warning Shot From SEC Over Data Profits
Nick Baker – Bloomberg
Regulator took unusual step of blocking request to raise fees; SEC’s chairman has signaled he’s scrutinizing this area
U.S. regulators blocked stock exchanges’ request to raise some fees for market data, an unusual step suggesting closer scrutiny of an increasingly important slice of their businesses.
/jlne.ws/2HNFUYM

Goldman to Add Crypto Contracts Without Trading Bitcoins
Bloomberg
Don’t call Goldman Sachs Group Inc.’s long-awaited Bitcoin-trading business a full-fledged desk, and don’t expect it to buy and sell Bitcoins, at least at first. The bank, preparing to pioneer a new cryptocurrency market on Wall Street, plans to start small and offer a limited number of derivatives, according to a person briefed on the decisions. It will trade Bitcoin futures in a principal, market-making capacity and will also create non-deliverable forward products.
/jlne.ws/2jpamtx

Coinbase is allowing customers to make big trades in the shadows in attempt to lure big Wall Street traders to its exchange
Frank Chaparro – Business Insider
Coinbase is opening an office in Chicago, a city known for its large number of trading firms, to lure in talent to help build-out GDAX’s trading tech.
Coinbase, the San Francisco-based cryptocurrency company, is making big moves to shake off its scrappy startup roots and transform into a first-class trading firm.
/jlne.ws/2FDYUmk

SEC Launches Additional Investor Protection Search Tool; The SEC’s “SALI” Tool Will Allow Investors to Identify Individuals Subject to Judgments or Orders in Enforcement Actions
SEC
The Securities and Exchange Commission today announced the launch of an additional online search feature that enables investors to research whether the person trying to sell them investments has a judgment or order entered against them in an enforcement action. The new tool is intended to assist the public in making informed investment decisions and avoiding financial fraud.
/jlne.ws/2FDgrvb

Does the VIX Need Fixing? Sure Looks That Way; The first step is acknowledging that something is wrong.
John M. Griffin – Bloomberg
Last week, the Chicago Board Options Exchange (CBOE) responded to a research report into manipulation of the monthly settlement of the VIX, sometimes referred to as the stock market’s fear index, and attempted to assure participants that the process was not rigged. “The academic paper’s analysis and conclusions are based upon a fundamental misunderstanding about how VIX derivatives are traded and settled,” the CBOE wrote. I was an author of the research paper. The CBOE’s most recent response has left my “fundamental misunderstanding” still very much unresolved.
/jlne.ws/2w2IMLJ

“Active management really shines in a bear market.”
Joshua M Brown – The Reformed Broker
This is a thing people say all the time, and have said recently quite a bit.
While less than 10% of actively managed stock mutual funds have been able to outperform their benchmarks over five year periods according to SPIVA, the proponents of active strategies bring up the fact that, in a downturn, passive funds bear the full brunt of the market’s losses while they can be more defensive. Managers posit that they’ll be able to lower the risk for investors by owning more defensive names or raising their allocation to cash or employing tax-loss harvesting or adding hedges to their portfolios.
/jlne.ws/2w9lkfY

The Hedge Fund Manager Who Became A Billionaire From Tech
Nathan Vardi – Forbes
With the Nasdaq more than doubling in five years, Philippe Laffont took the stage at the Forbes and Shook Research Top Advisors Summit in Las Vegas in February to talk about technology stocks. You would think an audience made up of hundreds of financial advisors would be used to hearing from hedge fund managers specializing in technology, but Laffont is something of a rarity in the hedge fund world these days.
/jlne.ws/2w7Y0z3

Wall Street’s Big Gender Lawsuit Is 13 Years in the Making; Cristina Chen-Oster’s fight with Goldman Sachs began in 2005. It just got huge.
Dune Lawrence, Max Abelson – Bloomberg
Cristina Chen-Oster was settling into her seat for a late-March Broadway matinee of Mean Girls when she remembered to check her voicemail. The day before, she’d ignored a call from an unrecognized number. Now she hit play and heard the voice of her lawyer, Kelly Dermody: “Huge congratulations!” it said. “Really, really, really, really happy for you.”
/jlne.ws/2FE6lKl

Inside the World’s Most Elite (and Secret) Traders’ Club; The nameless group confers “a hunting license” that lets an investor sit at the “big boy table and make high-level trades not available to stupid amateurs.”
Alastair Marsh – Bloomberg
In an industry where power and influence are measured in dollars and cents, this may be the most exclusive club in finance: The price of admission is at least $25 million.
/jlne.ws/2riXTLp

At Milken, Wall Street touts itself as force for good
Lawrence Delevingne – Reuters
The titans of finance who flock to the annual Milken Institute Global Conference each spring say they believe their quest for profits can also make the world a better place.
/jlne.ws/2FCAkm3

BSE board likely to discuss charges against chairman Sethurathnam Ravi
Shrimi Choudhary – Business Standard
The BSE plans to discuss the ongoing investigation against its chairman, Sethurathnam Ravi, named in the Central Bureau of Investigation’s (CBI’s) First Information Report in connection with the alleged ~6 billion IDBI-Aircel loan fraud. The board of directors of the exchange will meet on Friday to declare the March quarter results.
/jlne.ws/2FEpKLc

Exchanges, OTC and Clearing

London Stock Exchange clearing unit expands Asia offering
Reuters Staff
The London Stock Exchange’s clearing arm LCH has begun clearing interest rate swaps denominated in yuan, won and rupees to bolster its Asia base as euro business faces the threat of relocation
/jlne.ws/2FDYNqU

EEX Trading Results For April 2018 – EEX Markets On Growth Path
Mondovisione
In April 2018, the European Energy Exchange (EEX) increased volumes on its power derivatives markets by 12% to 246.6 TWh (April 2017: 220.7 TWh). In particular, the markets for Italy (38.8 TWh, +100%) and France (19.8 TWh, +48%) contributed to this development. Also the smaller markets for Spain (7.2 TWh, +54%) and the Netherlands (4.3 TWh, +358%) recorded significant growth. In Options on Phelix-DE Futures, at 36.7 TWh, EEX achieved the highest volume since the launch of this product.
/jlne.ws/2FB1ZUl

ICE posts better-than-expected profit on higher trading volumes
Reuters
Intercontinental Exchange Inc, owner of the New York Stock Exchange, posted a better-than-expected quarterly profit as a spike in market volatility pushed trading volumes higher.
Volatility surged in February after a prolonged calm in 2017, roiling global equities, bonds, currencies and commodities markets, with turbulence remaining elevated through the end of March, benefiting exchange operators.
/jlne.ws/2wenURY

Exchange Traded Commodities: Introduction of options on iShares Physical Gold ETC (IGLN)
Eurex
Effective 22 May 2018, Eurex Clearing AG (Eurex Clearing) will offer clearing services for options on iShares Physical Gold ETC (IGLN) introduced at Eurex Deutschland.
/jlne.ws/2KwkVXO

Increased trading volumes, new records for ETFs; Cash markets were up 127.2 billion euros in April / 20 percent more than in the previous year
Deutsche Börse Group
High trading volumes on the cash markets since the beginning of the year have led to new records in ETF trading on Xetra , Europe’s leading stock exchange exchange traded fund exchange. In total, more than 1.9 million orders were executed in the first quarter of 2018, more than ever since the products were launched in 2000 and around 30 percent higher than in the same quarter of the previous year. The number of tradable ETFs has also hit a new high of currently 1,264.
/jlne.ws/2jnF5qN

ASX Monthly Activity Report – April 2018
ASX
/jlne.ws/2jqoNxy

HKEX Appoints Group Risk Officer
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) has appointed Roland Chai to serve as Group Risk Officer, effective 1 June 2018.
/jlne.ws/2jqyP1i

The Listing Committee censures Mr Zhang Jing Zhi, a former Executive Director of Sound Global Limited (Stock Code: 967), for breaching the Director’s Undertaking
HKEX
/jlne.ws/2KxGPKh

The Listing Committee censures Mr Jiang An Ping, a former Executive Director of Sound Global Limited (Stock Code: 967), for breaching the Director’s UndertakingShare
HKEX
/jlne.ws/2KuZXsq

Nasdaq April 2018 Volumes
By GlobeNewswire
Nasdaq (Nasdaq:NDAQ) today reported monthly volumes for April 2018, on its investor relations website.
/jlne.ws/2KwjoRO

Fintech

UnionBank of the Philippines Chooses FIS to Digitize its Lending Processes
Press Release
FIS announced that UnionBank of the Philippines (UnionBank) has selected its comprehensive suite of risk management, compliance and analytics solutions to help the bank digitize and enhance its commercial lending processes.
/jlne.ws/2w80k9f

Goldman building team to sell its own alternative data; New group tasked with finding data within the securities division that could be sold to clients
Faye Kilburn – Risk.net
Goldman Sachs is getting into the alternative data business. The firm is in the early stages of building a team of quant researchers within its securities division, to identify internal data that might be valuable to clients in both investment and risk management.
/jlne.ws/2FCAdXF

Cryptocurrencies

Nouriel Roubini says bitcoin is ‘bulls – t’ and only attracts ‘suckers’
Carleton English- MarketWatch
Trades barbs with Alex Mashinsky, head of crypto-lending space Celsius Network, and Bill Barhydt, CEO of crypto app Abra
Nouriel Roubini just crapped on the cryptocurrency party. The famously bearish NYU economist — who earned the nickname “Dr. Doom” for predicting the financial crisis — blasted bitcoin BTCUSD, +0.48% fanatics as “suckers” and said repeatedly that its underlying technology was “bulls – t.”
/jlne.ws/2Kytf9G

Reddit to Relaunch Bitcoin Payments (And Add More Cryptos)
Wolfie Zhao – Coindesk
Social media platform Reddit is planning to reinstate cryptocurrency as a payment option for its gold members – and this time bitcoin won’t be the only option.
In an interview with Cheddar on Thursday, the site’s chief technology officer, Chris Slowe, said that, while bitcoin’s spiking transaction fees and an integration issue with its cryptocurrency payments processor Coinbase had led to Reddit dropping bitcoin as a payment method in March, the option is likely to return once the platform has completed a redesign.
/jlne.ws/2w4OpJa

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

Goldman to Add Crypto Contracts Without Trading Bitcoins
Jennifer Surane – Bloomberg
Don’t call Goldman Sachs Group Inc.’s long-awaited Bitcoin-trading business a full-fledged desk, and don’t expect it to buy and sell Bitcoins, at least at first.
/jlne.ws/2jpamtx

Goldman Sachs to Open a Bitcoin Trading Operation
Nathaniel Popper – NY Times
Most big banks have tried to stay far away from the scandal-tainted virtual currency Bitcoin.
/jlne.ws/2FDzntv

Alibaba cannot block cryptocurrency firm from using similar name: U.S. judge
Jonathan Stempel – Reuters
A U.S. judge on Monday rejected Alibaba Group Holdings Ltd’s bid for a preliminary injunction to block the Dubai cryptocurrency firm Alibabacoin Foundation from using the Alibaba name.
/jlne.ws/2FDqrED

Bitcoin Analysts Brace for ‘Dogfight’ With Narrowing Trading Range
Janine Wolf – Bloomberg
The narrowest trading range in about six months has Bitcoin technical analysts scouring price charts to help figure out whether the biggest cryptocurrency is poised to build upon its April rally.
/jlne.ws/2FDhKKy

Cinnober sets up Lightning node to test scalability on the blockchain
Finextra
Capital markets software house Cinnober is running tests on the Lightning Network to determine its potential for scaling up cryptocurrency transactions across the bitcoin blockchain.
/jlne.ws/2FBw0mY

Politics

Kim Jong Un Is Masterfully Playing Trump’s Game; The North Korean leader’s moves show a keen sense of The Art of the Deal.
Marc Champion – Bloomberg
Donald Trump will soon sit down to the most consequential negotiation of his career if, as expected, he becomes the first U.S. president to meet a North Korean leader since the devastating war on the peninsula in the 1950s. Trump, of course, wrote a book on dealmaking, only this time nuclear war and peace will hang in the balance, rather than a real estate contract. And on the evidence so far, his sparring partner Kim Jong Un has mastered The Art of the Deal, too. In fact, frequent North Korea visitor Dennis Rodman told TMZ he gave Kim a copy of the book for his birthday in 2017.
/jlne.ws/2Ku4xXQ

Cambridge Analytica Closing Operations Following Facebook Data Controversy
The data company had lost clients in recent months
Rebecca Ballhaus in Washington and Jenny Gross in London – WSJ
Cambridge Analytica , a data firm that worked for President Donald Trump’s 2016 campaign, is shutting down following allegations about its misuse of Facebook data and the campaign tactics it pitched to clients.
/jlne.ws/2FE4xB3

***** I have seen this trick before.~JJL

Regulation

Wall Street should be worried about Justice Department report
John Crudele – NY Post
This I guarantee. When the next report from Michael Horowitz, the Justice Department’s inspector general, comes out, Wall Street is going to be very interested. And very worried.
/jlne.ws/2jqJ1Hq

SEC Chief Pitches Investors, Brokers to Back Rule Targeting Stockbroker Conflicts; Jay Clayton starts effort to promote agency’s proposal on investment advice
Dave Michaels – WSJ
Wall Street’s chief regulator took to the road Wednesday to promote proposed stricter rules on how stocks brokers advise their clients, saying they would help investors and not hurt the brokerage industry.
/jlne.ws/2KzexiQ

Fund says Wells Fargo unit worsened ‘vol-mageddon’ losses: court filing
Trevor Hunnicutt – Reuters
A Chicago fund manager that suffered catastrophic losses in a market plunge earlier this year has blamed the actions of its broker, a Wells Fargo & Co unit, according to court documents filed on Wednesday.
/jlne.ws/2wb7n0Y

Bigger say for Hong Kong’s securities watchdog will lead to better investor protection: study; Study finds Hong Kong lags behind the NYSE when it comes to protecting shareholders’ interests, which can be boosted by sharpening the city’s edge in corporate governance
Alice Shen – South China Morning Post
The Securities and Futures Commission should have more power over listed companies to protect shareholders’ interests, a study said on Wednesday.
/jlne.ws/2FCBFJB

Ex-CEO Faces Third Trial Over Insider Tip to Ex-Orioles Fielder
Edvard Pettersson – Bloomberg
Despite two whiffs, the U.S. will get a third chance to win an insider-trading conviction against the former chief executive officer of a Southern California medical supply company. James Mazzo, who headed Advanced Medical Optics Inc., was charged over a tip he allegedly gave almost 10 years ago to his friend, former Baltimore Orioles third baseman Doug DeCinces, about an imminent takeover by Abbott Laboratories.
/jlne.ws/2FCZ6lS

SEC Launches Searchable Database of Individuals With Enforcement Record; SALI helps identify registered and unregistered individuals who have been parties to past SEC enforcement actions and against whom federal courts have entered judgments.
Melanie Waddell – Think Advisor
The Securities and Exchange Commission said Wednesday that it has launched a searchable database that allows investors to find information on brokers and advisors with a judgment or order against them in an enforcement action.
/jlne.ws/2FE235H

New York Bans NRA Insurance Program and Fines Broker; State regulator says the National Rifle Association’s Carry Guard program unlawfully provides liability insurance to gun owners for certain acts of intentional wrongdoing
Leslie Scism – WSJ
New York financial regulators on Wednesday said an insurance program for members of the National Rifle Association violates state law, and have imposed a $7 million fine on the broker who arranged it.
/jlne.ws/2FEQ73t

Sebi disposes off show-cause notice against ex-official of FTIL; Vaidyalingam was holding managerial position in MCX, FTIL and NSEL from May 2005 to June 2012
Press Trust of India
Markets regulator Sebi today disposed of a show-cause notice against Hariharan Vaidyalingam, a former official of MCX, NSEL and FTIL, after charges of insider-trading could not be established.
/jlne.ws/2FEUnjx

SocGen Is Ready to Pay Up to $1 Billion to End U.S. Probes
Tom Schoenberg and Fabio Benedetti Valentini – Bloomberg
French authorities will receive a portion of the penalties; Settlement would resolve Libor rigging, Libya bribery cases
Societe Generale SA is nearing an agreement to pay as much as $1 billion to resolve two U.S. probes — into the rigging of benchmark interest rates and allegations of bribery in Libya — according to people familiar with the matter.
/jlne.ws/2FDZnoC

ESMA announces Meet-the-Market workshop on ESEF in Warsaw 28 May
ESMA
The European Securities and Markets Authority (ESMA) is organising a MTM workshop for software developers on the European Single Electronic Format (ESEF), on 28 May (afternoon).
/jlne.ws/2Kwlgty

FINRA Revises the Sanction Guidelines
FINRA
FINRA is revising its Sanction Guidelines to instruct adjudicators in the disciplinary process to consider customer-initiated arbitrations that result in adverse arbitration awards or settlements when assessing sanctions. Thus, when a respondent’s disciplinary history, and history of arbitration awards and arbitration settlements together with the violation found in a disciplinary case, form a pattern, the Sanction Guidelines advise that adjudicators should consider imposing more stringent sanctions.
/jlne.ws/2jnPCCf

Remarks of Commissioner Brian Quintenz at FIA’s 40th Annual Law and Compliance Conference
CFTC
Good afternoon and thank you for that very kind introduction. I’m delighted to be here with you today at FIA’s 40th Annual Law and Compliance Conference. Before I begin, let me quickly say that the views contained in this speech are my own and do not represent the views of the Commission.
/jlne.ws/2jnGj5n

CFTC Staff Issues Interpretive Guidance Regarding Exemption from Aggregation
CFTC
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight today issued interpretive guidance regarding CFTC Regulation 150.4(b)(1), which is an exemption from position aggregation requirements for certain commodity pool investors.
/jlne.ws/2jp9SDB

Investing and Trading

Oil trader Gunvor slumps to lowest profit in seven years
David Sheppard and Neil Hume – Financial Times
Gunvor, one of the world’s largest independent energy traders, saw its profits almost half last year as its faced tough market conditions that squeezed margins as it invested heavily to build a presence in the US.
The Geneva-based commodity trader said net profits dropped by 48 per cent to $162m in the year to December, the lowest level since at least 2010.
/jlne.ws/2w7YOE5

Markets Are Underestimating the Fed; The recent acceleration in inflation poses significant risks to the current slow normalization approach.
By Charles Lieberman – Bloomberg
The Federal Reserve will release its latest statement on monetary policy today, and although no change is anticipated, it’s becoming clearer that interest rates are too low and the risk of an acceleration in the pace of rate increases is much higher than currently perceived by investors.
/jlne.ws/2FERhfl

Grain Giants Expect Higher Profits From Bad Weather; ADM, Bunge say trading and processing business is improving after years of bumper harvests
Jacob Bunge – WSJ
Grain-trading firms are making more money again after struggling for years against a global oversupply of crops.
/jlne.ws/2FG5jxg

British banking leverage remains ‘dangerously high’; Regulators have fallen short in imposing capital requirements, says John Vickers
Martin Arnold , Banking Editor – FT
Leverage in the British banking system remains “dangerously high” after regulators “fell short” in the capital requirements they imposed on lenders, one of the main architects of the UK’s post-crisis financial regulation said.
/jlne.ws/2FEprA2

U.S. stock pickers beat benchmarks amid volatility
David Randall – Reuters
The volatility that stopped the bull market in U.S. stocks in its tracks after hitting record highs in January is rewarding stock-picking fund managers.
/jlne.ws/2FEjRNT

Institutions

Wall Street Slaps Down NYC Again With AllianceBernstein’s Move to Nashville
By Patrick Clark and Noah Buhayar – Bloomberg
The asset manager is shifting about 1,050 jobs to Nashville; It’s part of a trend as financial firms look to reduce costs
New York is losing more than a thousand financial-industry jobs — and Manhattan’s loss is Music City’s gain.
/jlne.ws/2FDxJbe

Deutsche Boerse to cut 300 jobs in cost-cutting drive
Reuters
Deutsche Boerse AG (DB1Gn.DE) plans to cut around 300 jobs as new CEO Theodor Weimer seeks to lower operating costs by 100 million euros ($120 million) through to 2020, Handelsblatt reported on Wednesday.
/jlne.ws/2w7Wgpr

Rising margin costs could slash hedge fund returns; Regulatory change may see hedge funds subject to 70% additional margins.
By John Brazier – The Trade
Hedge funds could see returns plummet due to additional margin costs set by clearing houses as a result of regulatory changes.
/jlne.ws/2js8m3E

Flint prepares new strategy as HSBC puts troubled years behind it; Plan expected to involve building up asset management and insurance businesses
Henny Sender in Hong Kong – FT
John Flint, chief executive of HSBC, has some much needed breathing space to put together his three-year plan for Europe’s biggest bank as it emerges from a scandal-plagued past.
/jlne.ws/2KwdTTa

Goldman Sachs vote backs pay, shows less support for stock plan
David Henry and Ross Kerber – Reuters
Goldman Sachs Group Inc (GS.N) leaders said more than 87 percent of shares were voted in favor of its executive pay at its annual shareholder meeting, and that a stock plan for employees was approved by more than 65 percent of votes cast.
/jlne.ws/2FDp6xB

Regions

China’s Xiaomi files for Hong Kong IPO
Louise Lucas in Hong Kong – FT
Xiaomi kicked off what is set to be one of the world’s biggest initial public offerings to raise up to $10bn, filing a prospectus that gives investors their first look at the Chinese handset maker’s financials. It is due to list in early July.
/jlne.ws/2Kzck6W

UBS Group becomes first global bank to apply for majority control of Chinese securities venture
Laura He – South China Morning Post
China’s top securities regulator has accepted and is reviewing an application by the UBS Group to increase its stake in its Chinese securities venture to 51 per cent, after the Swiss bank became the first global financial institution to apply for a controlling share in its local operations.
/jlne.ws/2w8JRl9

Danske reprimanded over weak money-laundering controls; Danish regulators uncover ‘serious weaknesses’ in the bank’s governance
Richard Milne, Nordic Correspondent – FT
Danske Bank has been extensively criticised and reprimanded by Danish regulators over weak or non-existent money-laundering controls that gave rise to suspected “criminal activities involving vast amounts of money”.
/jlne.ws/2jsVnOZ

Has China Really Kicked Its Debt Addiction?; While analysts were raving about China’s campaign against debt last year, overall credit growth barely slowed
Nathaniel Taplin – WSJ
Here’s a widely told yarn: Last year China successfully curtailed skyrocketing debt issuance without hurting growth.
/jlne.ws/2FEVnEi

China Shunning U.S. Soybeans on Trade Tensions, Bunge CEO Says
Mario Parker – Bloomberg
China is ‘very deliberately not buying anything from the U.S.’; Bunge CEO Schroder says Canada, Brazil picking up sales
The world’s biggest oilseed processor just confirmed one of the soybean market’s biggest fears: China has essentially stopped buying U.S. supplies amid the brewing trade war.
/jlne.ws/2FEMtXl

It appears China has stopped buying soybeans from the US altogether because of trade fight
Evelyn Cheng – CnBC
China is apparently no longer buying U.S. soybeans amid the rise in trade tensions, Bloomberg reported Wednesday.
/jlne.ws/2FDa4HS

Miscellaneous

Boy Scouts unveil new name: Scouts BSA
CBS News
For 108 years, the Boy Scouts of America’s flagship program has been known simply as the Boy Scouts. With girls soon entering the ranks, the group says that iconic name will change. On Wednesday, the organization announced a new name for its Boy Scouts program: Scouts BSA. The change will take effect next February.
/jlne.ws/2FGTBmo

Bloomberg’s New Paywall Will Charge Users $35 a Month; The paywall, which allows visitors to read 10 articles a month for free, includes a $39.99 option that comes with a subscription to Bloomberg Businessweek and access to events
By Benjamin Mullin – WSJ
For more than a decade, Bloomberg has allowed readers to devour journalism on its consumer-facing website at no charge, in the hopes of burnishing its brand, generating advertising dollars and complementing its core terminal business.
/jlne.ws/2FBtDR6

A Letter From Our Editor-in-Chief About the New Bloomberg Digital; We’ve introduced big changes to our offerings.
John Micklethwait
Dear Reader, As editor-in-chief, I usually try to keep out of your way. But today marks an important moment for us: We’re launching a subscription business for Bloomberg Digital, with a redesigned website, a twice-daily regional newsletter and a host of other new features. And it deserves a brief explanation.
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Past JLN Newsletters

CME to permanently close most trading pits

CME to permanently close most trading pits

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

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