First Read

Hits & Takes
By JLN Staff

DRW’s cryptocurrency division is called Cumberland Mining & Materials LLC., named after the Grateful Dead song “Cumberland Blues,” about a hardworking miner, according to today’s Wall Street Journal story. ~JK

Fun fact: In the first three quarters of 2017, $2.774 trillion of MSCI Index-based futures and options traded globally. That’s nearly 50 percent more than the first three quarters of 2016.~SD

Care to express your views on cryptocurrencies without trading them? Apparently, you can buy ugly crypto holiday sweaters now (and yes, the checkout supports cryptocurrencies). Visual Capitalist has a cool infographic on BTC’s journey to $10,000, too.~SD

JLN Options from yesterday is available HERE.~JJL

Asia Pacific Financial News from John Lothian News – November 27, 2017.~JJL

Matrix Execution Technologies has launched a LinkedIn page.~JJL

++++

Meet the World’s Longest Serving Futures Trader
Debbie Carlson – CME Group OpenMarkets
Had the employment office at Roosevelt College (now Roosevelt University) in Chicago not been next to the student lounge, Lee Stern may never have gotten into trading.
bit.ly/2ib7LGC

***** Don’t ever short Lee Stern.~JJL

Initial Coin Offerings Horrify a Former S.E.C. Regulator
Nathaniel Popper – NY Times
Members of the Securities and Exchange Commission’s staff have been hearing recently from a former colleague with an urgent question: Why aren’t you cracking down on these initial coin offerings?
/goo.gl/RWW3ts

*****”I.C.O.s represent the most pervasive, open and notorious violation of federal securities laws since the Code of Hammurabi,” Mr. Grundfest said in an interview.~JJL

++++

Monday’s Top Three
Our top stories yesterday were led by the mysterious case of “Other reportables” and who those others actually are. Even Citadel wants to know more in the FT’s Unknown traders gain influence in commodities markets. Second went to the baffling but not surprising story of more unknowns about Bitcoin in Fortune’s Lost Bitcoins: 4 Million Bitcoins Gone Forever Study Says. Third went to Bloomberg’s piece on index providers in Index Providers Rule the WorldóFor Now, at Least

MarketsWiki Statistics Sponsored by Level Trading Field

113,025,073 pages viewed 22,926 pages 210,649 edits

Lead Stories

Bitcoin’s Trading Star Is Chicago High-Speed Firm That Nods to the Grateful Dead
Alexander Osipovich – WSJ
DRW’s Cumberland unit jumped in shortly after the digital currency’s plunge in 2014, putting it far ahead of Wall Street banks
One of Chicago’s largest high-speed traders has taken a central role in the bitcoin market, stepping into the vacuum created by Wall Street’s hesitant response to the booming investor interest in digital currencies.
/goo.gl/ifwR83

Itiviti and ULLINK announce tie-up to form $200m tech powerhouse
Hayley McDowell – The Trade
Combined entity will create a firm with $200 million in revenues and 1,000 employees globally.
Trading software providers Itiviti and ULLINK have confirmed plans to merge as they look to form a global capital markets technology powerhouse.
/goo.gl/Gaueiy

BoE chief Mark Carney pushes back on call to resolve LSE row; Central bank will not intervene in planned exit of exchange chief Xavier Rolet
Caroline Binham and Philip Stafford – FT
Bank of England governor Mark Carney has pushed back on a call to intervene in a governance crisis at the London Stock Exchange Group, where an activist investor is trying to force out the chairman and extend the contract of its chief executive.
/goo.gl/wjAkmN

****SD: Reuters – BoE’s Carney ‘mystified’ by CEO spat at London Stock Exchange

EU clearing plans for City run into resistance across bloc; Capitals want to take business from London but are less keen on central oversight
Jim Brunsden in Brussels and Philip Stafford – FT
European Commission plans to potentially force parts of the City of London’s prized clearing business to relocate after Brexit are getting bogged down because of governments’ reluctance to accept more centralised financial services supervision within the EU.
/goo.gl/Jfkxdf

Chicago is buying into bitcoin in a big way
Lynne Marek – Crain’s Chicago Business
Bitcoin backers have created one of the most volatile, active markets on earthóand Chicago’s trading community wants in. CME Group and Cboe Global Marketsótwo of the biggest exchanges in the worldóeach proposed a new bitcoin futures contract in recent months. When the contracts launch, the Chicago companies will convert trading to fees.
/goo.gl/eWZPkX

NEX Data establishes US Treasury benchmarks; Benchmarks will create reference price from transactions and orders on the BrokerTec trading platform.
Hayley McDowell – The Trade
NEX Data has launched a series of US Treasury benchmarks in a bid to provide further transparency and pricing information to the market.
/goo.gl/TzGk7u

Global crypto-currency crackdown sparks search for safe havens
Gertrude Chavez-Dreyfuss – Reuters
When U.S. entrepreneur Bharath Rao looked around for the best place to raise money for his crypto-currency derivatives trading business, the United States did not make his list. Instead he chose the East African island nation Seychelles to sell the trading platform’s tokens.
/goo.gl/1H8YZP

Wells Fargo Bankers, Chasing Bonuses, Overcharged Hundreds of Clients; Employees say lofty rewards tied to revenue pushed foreign-exchange staff to ignore agreed-upon fees
Emily Glazer – WSJ
The whispers among employees had been around for years. They finally heard some facts during a conference call in June led by managers in Wells Fargo & Co.’s foreign-exchange operation: Some of its business customers had been cheated, according to two employees who were on the call.
/goo.gl/9HyCTP

Musk: I Am Not Bitcoin’s Satoshi Nakamoto
Nour Al Ali and Chris Kingdon – Bloomberg
Not only does Elon Musk deny being the mysterious creator of bitcoin Satoshi Nakamoto, but he’s also forgotten where he keeps his cryptocurrency.
/goo.gl/pxMtg4

Flattening yield curve faces test of its predictive powers; Debate rages over trusty gauge’s ability to predict US economic woes
Robin Wigglesworth – FT
In the pantheon of economic indicators the bond market’s “yield curve” enjoys rock star status, thanks to its uncanny ability to predict recessions. Right now it is signalling danger ahead, but can we still rely on this normally trustworthy gauge?
/goo.gl/iwfHDB

Exchanges, OTC and Clearing

London Stock Exchange boss should go, says Carney
Katherine Griffiths – The Times
The governor of the Bank of England has waded into the boardroom row at the London Stock Exchange by signalling that its chief executive, Xavier Rolet, should go quietly.
/goo.gl/PhacsB

CME Group Says Co Entered Into A New Multi-Currency Revolving Credit Facility
Reuters
Effective as of November 2, entered into a new multi-currency revolving credit facility – SEC filing
reut.rs/2ibu3rI

Bull Run: BSE, NSE Set For High Volume Growth
Sreekumar Raghavan – Corporate Ethos
The bull run in the Indian stock market saw the key benchmark indices S&P BSE Sensex hitting a record high of 33,865 while Nifty 50 rose to a record high of 10490 as domestic funds and investors have pumped huge amount of money following the demonetisation and weakening of gold and real estate prices.
/goo.gl/tfQxob

Randolf Roth: “We provide the data for brokers to argue BestEx.”
Eurex
Eurex EnLight – the selective RFQ Platform. An interview with Randolf Roth, Member of the Executive Board, Eurex
/goo.gl/Mmoxuc

REGIS-TR and IHS Markit work together on interoperable SFTR reporting solution
Deutsche Bˆrse Group
REGIS-TR, the Europe-wide leading provider of G20 transaction repository services, will work with IHS Markit, a leader in key information, analytics and solutions, to deliver an interoperable full-service reporting solution under the terms of the Regulation on Securities Finance Transactions (SFTR).
/goo.gl/4H4fFu

Moscow Stock Exchange changed the name of the main index to the MosBirzhi Index
MOEX
On November 27, 2017, the Moscow Stock Exchange changed the name of the main indicator of the Russian stock market: the MICEX Index was renamed into the MosBirzhi Index (the English name of the MICEX Index is changed to MOEX Russia Index).
/goo.gl/wqNBxf

Fintech

Nordic Capital-backed Itiviti Announces the Intention to Combine With ULLINK to Create a New Global
Press Release
Itiviti, backed by Nordic Capital Fund VII, today announces the intention to combine with ULLINK to build a full service technology and infrastructure provider for global and regional financial institutions.
/goo.gl/9YEdZ1

Lime Brokerage Partners with CQG to Offer Algorithms to CQG’s Integrated Client Customers
PRNewswire
Lime Brokerage, a Wedbush Company and a leading provider of technology and market access, today announced a partnership with CQG, a platform for integrated trade routing, global market data, and advanced technical analysis tools, to offer Lime’s suite of premium futures algorithms on CQG’s platform.
/goo.gl/XhFcTT

A New Marketplace to Bet on Blockchain Startups Is Opening Up
Olga Kharif – Bloomberg
BnkToTheFuture to start trading in the second quarter of 2018; More than 50% of major companies could be trading by year-end
A new way for accredited investors to put money into blockchain startups is opening up. A firm called BnkToTheFuture plans to open a market in the second quarter that will let investors trade equity stakes in companies involved with the blockchain, the transaction-tracking technology that underpins digital currencies like bitcoin. BnkToTheFuture will use a blockchain ledger to keep record of those investments for clients.
/goo.gl/tB2zJT

Google adds ‘finance’ tab to search filters, revamps Google Finance
Reuters
Alphabet Inc said on Tuesday users doing a Google search would now be able to filter results with a new “finance” tab, which works in the same way that its “images” or “news” tab does.
/goo.gl/6p2mvg

BoE says banks may be underestimating fintech threat
Huw Jones – Reuters
Britain’s banks may be overstating their ability to stop “fintech” firms stealing customers and eating into profits, the Bank of England (BoE) said on Tuesday.
/goo.gl/TwLsqP

What Bitcoin Critics and Supporters Around the World Have to Say About Crypto
Bloomberg
Bitcoin’s meteoric rise has made it hard for even those in the highest spheres of finance, technology and government to ignore – and many have an opinion about its approximate 1,253 percent gain gain in the past 12 months. People have debated the potential of cryptocurrencies since the mysterious Satoshi Nakamoto released a nine-page paper explaining the technology in 2009. Here’s a look at who’s on which side and what they’re saying.
/goo.gl/pszAdk

This Is How You Can Short Bitcoin
Camila Russo – Bloomberg
Bloomberg’s Joe Weisenthal takes a look at bitcoin’s surge toward $10,000.
Bitcoin’s assault on $10,000 has stirred bears who see fresh evidence of a bubble. There are ways to bet on a crash, but they’re even riskier than trading the cryptocurrency on the way up.
/goo.gl/Kmyo8Q

Politics

Corbyn winning power is ‘bigger risk than Brexit’ for the economy and could send stock markets plummeting, top investment bank warns
James Tapsfield, Political Editor For Mailonline
Jeremy Corbyn winning power is a bigger risk to the economy than a bad Brexit deal, a leading investment bank has warned
/goo.gl/2TxQLP

Casting Wall Street as Victim, Trump Leads Deregulatory Charge
Matthew Goldstein and Stacy Cowley – NY Times
A decade after the financial crisis, the federal government is easing up its policing of Wall Street and the banking industry, even without actually repealing broad swaths of regulation.
/goo.gl/j8WqHH

Senate tax drama intensifies as bill faces key panel vote
David Morgan – Reuters
President Donald Trump’s drive to overhaul the U.S. tax code headed toward a new drama on Tuesday in the Senate, where a pair of Republican lawmakers demanded changes to the party’s tax bill in exchange for their help in moving the measure forward.
/goo.gl/JZFML9

Advantage Trump in the battle over Obama’s Wall St watchdog; The Consumer Financial Protection Bureau is in the president’s sights, writes Edward Luce
Edward Luce – FT
How do you react when your new boss pitches up on his first day with a large bag of doughnuts? That would depend on whether you think he is an imposter. Mick Mulvaney, the new acting head of the Consumer Financial Protection Bureau ó a powerful Obama-era watchdog ó did just that on Monday. Notwithstanding Mr Mulvaney’s sugary offering, it is a safe bet that most of the CFPB’s staff were not prepared to accept his authority.
/goo.gl/BxDFV5

Regulation

SEC Announces Agenda for December 7 Investor Advisory Committee Meeting
SEC
The Securities and Exchange Commission today announced the agenda for the December 7 meeting of its Investor Advisory Committee. The meeting will begin at 9:30 a.m. in the Multipurpose Room at SEC headquarters at 100 F Street, N.E., Washington, D.C. and is open to the public. The meeting will be webcast live and archived on the committee’s website for later viewing.
/goo.gl/iEwp8T

ISDA panel to reconvene on Venezuela CDS auction
Davide Scigliuzzo – Reuters
An industry committee will reconvene on Tuesday to discuss terms of two auctions that will determine the payout on some US$1.5bn of CDS contracts tied to Venezuela’s bonds.
reut.rs/2ib2Y87

Joseph Otting, former banker, sworn in as top U.S. bank regulator
Reuters
Joseph Otting, a former banking executive and associate of U.S. Treasury Secretary Steve Mnuchin, was sworn in as U.S. comptroller of the currency on Monday to serve as the leading regulator of national banks.
reut.rs/2iePg3X

US court charges Chinese ‘hackers’ with attacks on three corporations
BBC
Three Chinese citizens have been charged by a US court with hacking attacks on international corporations.
The three, said to run a cyber security firm in China, targeted Moody’s Analytics, Siemens and GPS maker Trimble, the indictment says.
bbc.in/2i9RJN0

Volkswagen Financial Services Australia pays $216,000 penalty for misleading advertising
ASIC
Volkswagen Financial Services Australia Pty Ltd (VWFSA) has paid a penalty of $216,000 after ASIC issued 20 infringement notices for alleged misleading statements made by VWFSA as part of its ‘1% you can’t ignore’ advertising campaign.
/goo.gl/edPpf6

Investing and Trading

Why Does Sequence of Returns Risk Matter for Retirement?
Peter Tsui – S&P Dow Jones Indices Indexology Blog
Sequence of returns (SoR) risk refers to the situation when the market experiences random movements in such a way that returns are not uniformly distributed. For example, in the 32-year period from 1966 to 1997, the DJIA had an annualized return of 8%. However, the returns were not evenly distributed over time. For the first half of this period, from 1966 to 1981, the Dow began at 1,000 and ended at about the same level. Then, from 1982 through 1997, the Dow grew over 15% per year, taking the index from 1,000 to about 8,000.
/goo.gl/wyL6md

Index Providers Can Make or Break Passive Investors; Does “building consensus” level the playing field?
Matt Levine – Bloomberg
Here are Bloomberg’s Tracy Alloway, Dani Burger and Rachel Evans on the power of index providers:
/goo.gl/zkY6kG

Market’s Numbness to Risk Reminds of Calm Before Storm: Axioma
Andrew Janes – Bloomberg
Cash positions are near 3-5% versus 20% at the start of 2017; U.S.-China trade war is major market risk, d’Assier says
There’s “somewhat of a numbness” to risk among investors right now that’s reminiscent of pre-crisis periods in the past, according to Olivier d’Assier, head of applied research for Asia Pacific at Axioma Inc.
/goo.gl/eoVQ9L

Traders concerned as they anticipate further growth in passive investing; Passive investing set to grow, but just 40% of traders see the rise as a positive development for their companies.
Hayley McDowell – The Trade
A survey has found the majority of traders have seen a shift from active to passive investing and 72% expect this to rise further next year.
/goo.gl/EsFHr2

Bitcoin bubble will burst but blockchain technology will be useful, says private equity investing giant
Lucy White – City AM
The bitcoin cryptocurrency is a bubble which will burst, but the underlying blockchain technology will have some useful applications, according to a director at Harbourvest Private Equity (HVPE).
/goo.gl/56eVW7

Can you compare tulips to Bitcoins? Central banks think so
City AM
“Bitcoin is a sort of tulip”. So said European Central Bank (ECB) Vice President Vitor Constancio in September. For many that might sound like an odd statement to make, but those that know their history – and specifically the history of the stock market – will instantly know what Mr Constancio is talking about.
/goo.gl/o7hd7Q

Institutions

Decade-Old Options Pay Off for Goldman Execs
Liz Hoffman – WSJ
Goldman Sachs Group executives have cashed in on decade-old stock options, once worthless, that have become valuable in the year since Donald Trump’s election.
on.wsj.com/2ib9XOk

SocGen to close 15% of branches as it cuts costs
David Keohane and Martin Arnold – Financial Times
SociÈtÈ GÈnÈrale will close 15 per cent of its branch network and cut up to 900 jobs in France by 2020 as the bank looks to cut costs and accelerate its move into digital banking.
on.ft.com/2ibB5Nj

Credit Suisse CEO Says ‘Everything on Table’ to Return Profits
Jan-Henrik Foerster, Patrick Winters and Francine Lacqua- Bloomberg
‘I’m painfully aware that I had to dilute my shareholders’; Thiam is scheduled to update investors on strategy Thursday
Credit Suisse Group AG Chief Executive Officer Tidjane Thiam said he’s “painfully aware” that shareholders have gone through tough times and that all options are on the table to return cash to investors as profitability improves.
/goo.gl/uBSBk9

Ocado Short Squeeze Wipes Out $73 Million From Hedge Fund Trade
Sofia Horta E Costa – Bloomberg
Hedge funds betting against the fortunes of Ocado Group Plc got a painful surprise on Tuesday after the online grocery retailer said it had landed a client in France.
/goo.gl/CmYoQj

Paytm Aims to Become World’s Largest Full-Service Digital Bank
Saritha Rai – Bloomberg
Paytm Payments Bank to offer services to unbanked millions; Rules allow payments banks to accept deposits, but bar lending
Paytm Payments Bank is targeting to become the world’s largest digital bank with 500 million bank accounts and aims to turn into an integrated financial services company that offers everything from wealth management to share trading.
/goo.gl/kuQPpG

Hedge Funds Too Busy Surviving to Hire Robots; Small firms aren’t investing in AI. They may live to regret it.
Mark Gilbert – Bloomberg
Rumors of the death of hedge funds have been, as the saying goes, greatly exaggerated. The industry nevertheless faces a battle to remain relevant amid the inexorable rise of low-cost passive strategies. And the smaller players are missing a trick that may cost them in the years ahead.
/goo.gl/te3anR

Lightspeed Trading Offers a Wide Range of Trading Tools for Active and Professional Traders
Lightspeed Trading
As one of the industry’s best stock brokers for day trading, Lightspeed Trading offers a comprehensive range of trading tools for professionals in the field. Over the course of their careers, traders develop their own approaches to their day-to-day dealings. On top of that, they constantly adapt and evolve in concert with the market. Because of this, Lightspeed has developed numerous solutions that grant traders a high degree of customization and control.
/goo.gl/RWeu6M

Regions

Philippine Bank Penalized for $35 Million Fraud; Shares Rise
Cecilia Yap and Siegfrid Alegado – Bloomberg
Ordered to allocate capital for risk, directors suspended; Metrobank says it absorbed fraud amount, to set aside more
The Philippine central bank penalized Metropolitan Bank & Trust Co. by suspending some officials and ordering it to set aside funds following an internal fraud that cost the lender 1.75 billion pesos ($35 million).
/goo.gl/M8jYFf

Behind Abe’s Biggest Reform Win, Old Japan Inc. Culture Lives On
Keiko Ujikane and Takako Taniguchi – Bloomberg
Some stock buybacks are linked to companies’ foundations; ‘Isn’t this simply a form of stealing,’ fund manager asks
While Prime Minister Shinzo Abe’s vaunted third arrow — structural reforms — has generally been rated as unsuccessful, his administration has received high marks from Japan analysts for shaking up the country’s corporate-management system.
/goo.gl/kSq35F

Saudi Prince Who Wooed West Finds Few Friends in Tough Times
Erik Schatzker – Bloomberg
Most are quiet as Alwaleed bin Talal remains detained in hotel; Bill Gates broke silence on Monday, praising his philanthropy
For more than a quarter-century, Saudi Arabia’s Prince Alwaleed bin Talal has been making investments and building relationships in the West. He bailed out Citigroup Inc., helped refinance the ill-fated Euro Disney and backed Rupert Murdoch during the U.K. phone-hacking scandal.
/goo.gl/7AtrWV

How the Fall of Finance Led to French Tech’s Rise; After the financial crisis, educated French youth opted for startups instead of conventional job paths.
Pascal-Emmanuel Gobry – Bloomberg
France is emerging as a major European tech hub: La French Tech, as it is known, is improbably beating out Germany and rivaling London for funding levels and company valuations. A significant portion of France’s most talented young people now want to work in an innovation ecosystem rather than in secure jobs in government or traditional industries. The reason for the shift is not Emmanuel Macron, the reformer who has become French president. It long predates his rise.
/goo.gl/BJfCZB

A Manhattan Trial Wreaks Havoc on Turkish Markets: QuickTake Q&A
Asli Kandemir and Ercan Ersoy – Bloomberg
The trial in New York of Turkish banker Mehmet Hakan Atilla, who is accused of conspiring to evade U.S. sanctions on Iran, has been wreaking havoc on Turkey’s markets, after efforts led by President Recep Tayyip Erdogan failed to secure a political resolution to the case. Many investors want to see what gets revealed in that Manhattan court room before taking a risk on Turkey.
/goo.gl/4EkRpE

Drought and Neglect Have Decimated Iraq’s Breadbasket; Kurdish farmers, a key to independence, feel abandoned.
Alex Dziadosz – Bloomberg
East of the Iraqi Kurdish city of Sulaymaniyah, malls and high-rise apartments give way to cement-block factories, warehouses, and junkyards. Tucked among a freeway, a gravel pit, and a trash heap as tall as a barn, Mohammed Osman plucks herbs from four acres of gray, cracked earth fed by sewage from a nearby drainage pipe.
/goo.gl/g6gVJP

Hong Kong’s China-Fueled Equity Rally Is Now at Beijing’s Mercy
Justina Lee – Bloomberg
China said to block funds that want to buy mainly in Hong Kong; Mainland is a key source of offshore inflows for city’s stocks
Hong Kong shares have been among the world’s best performers this year, but concern is mounting that China could take away the punch bowl.
/goo.gl/RhWVVw

Oil traders have message for Opec and Russia: don’t wobble now; Cutting production has proved successful with inventories falling and prices recovering
David Sheppard, Energy Markets Editor – FT
As Opec, Russia and other top oil producers gather in Vienna this week, the world’s top energy traders have a simple message for those trying to underpin the price: now is not the time to wobble.
/goo.gl/8hbsxM

China’s HNA says it will pull out of deals on Beijing’s investment blacklist
South China Morning Post
Company’s chief defends overseas investments and says it will ‘listen to orders’
/goo.gl/shQZvg

Brexit

Brexit to result in a sharp slowdown in UK economic growth, OECD predicts; In 2019, when the UK is set to leave the EU, the OECD expects growth of just 1.1 per cent
Ben Chu – Independent
The OECD expects Brexit to result in a sharp slowdown in UK growth
/goo.gl/wnVk2n

.
London’s Startups Stress Out Over Brexitóand Ping Pong; Vying for victory with Spanish and Italian players.
Edward Robinson – Bloomberg
In table tennis, revenge is a dish best served fast. That’s what scores of employees of Funding Circle, Ltd., the U.K.’s top online lender, craved as Ping Pong Fight Club got under way in a cavernous loft space in London’s East End last week. The stakes were high. In 2016, Funding Circle’s champion, Luis Pinto, was toppled by newcomer Francesco Lo Franco of LendInvest Ltd., another online lender. This year, Lo Franco, a 32-year-old software engineer from Rome, had a new employeróand the same forehand smash.
/goo.gl/xsRhcV

BOE Says Stress Test Shows Banks Can Withstand Disorderly Brexit
Stephen Morris
Barclays and RBS fall short, but don’t have to raise capital; BOE raises countercyclical capital buffer rate to 1%
The Bank of England said the U.K.’s biggest lenders emerged from its latest stress test with the strength to keep lending even during a “disorderly” Brexit.
/goo.gl/7ec6md

BoE tells banks to hold extra £6bn buffer for risks beyond Brexit; Measure designed to prepare lenders for ‘material’ macroeconomic risks
Caroline Binham and Martin Arnold in London – FT
British banks could withstand the impact of a hard Brexit, the Bank of England said, but it has asked them to put aside an extra £6bn in capital to guard against other macroeconomic risks.
/goo.gl/RvNEVL

Miscellaneous

How Opioids Started Killing Americans; A huge study of the epidemic’s acceleration shows most deaths began with a prescription.
Natasha Rausch – Bloomberg
It’s been conventional wisdom for some time now that America’s opioid epidemic began at the pharmacy. Now there are numbers to put any doubt to rest.
/goo.gl/gCrnn1

The post Bitcoin’s Trading Star is DRW’s Cumberland Mining; Itiviti and ULLINK announce tie-up; BoE chief on LSE row appeared first on John Lothian News (JLN).

First Read

Jim Kharouf Resigns as CEO of John J. Lothian & Company, Inc.; Will Continue Work with Company in Freelance Role

Jim Kharouf is stepping down as CEO of John J. Lothian & Company, Inc. at the end of the year after having assumed the role on January 1, 2017. Kharouf is leaving the company as an employee, but will continue to work with John Lothian News and John Lothian Productions as an independent contributor. He will also be exploring his own bespoke initiatives, including in the Fintech sector.

Despite accomplishing much during his tenure at the company and as CEO, Kharouf is departing after philosophical differences with Executive Chairman John Lothian over the direction of the firm and management issues.

“Jim Kharouf did an excellent job as CEO and is one of the most talented journalists I have ever known,” Lothian said. “This new phase in our relationship will allow him to continue to apply his considerable talents as a multi-media journalist to our products and services, while also relieving him of the burden of managing the company. Additionally, this frees him to explore and develop his own entrepreneurial ideas.”

“Change is not a bad thing,” Kharouf said. “Sometimes you try new things and they work and sometimes they don’t work as well as you plan them. In our case, we did what good companies do, we adjusted and pivoted in another, positive direction. Ultimately, we’re aiming for a win-win here in terms of management and content.”

Kharouf is one of the most experienced financial journalists in financial markets, with more than 20 years covering the derivatives and securities space and more than 25 years as a journalist, editor and media executive. He has worked with John Lothian since 2006 when they co-founded the Environmental Markets Newsletter (later renamed JLN Environmental/Energy). He began working full-time with John Lothian News in 2008. Over the past 11 years, Kharouf has helped launch, manage and oversee key editorial properties such as Marketswiki, MarketsReformWiki and the John Lothian newsletters.

He also helped spearhead the expansion of editorial video division, John Lothian Productions, with Patrick Lothian, head of video production for the firm. Kharouf also helped create the format for Marketswiki Education with John Lothian, the international educational event series aimed at educating, informing and inspiring the next generation of professionals in the financial markets.

“Jim has grown tremendously as a journalist during our time together and this new relationship allows him to apply those skills to initiatives of his own,” Lothian said. “We look forward to fully supporting him in any way we can.”

“We are grateful for Jim’s years of service on behalf of the entire company. I can’t say enough good things about Jim as a person and professional. He has been a great example to all our employees of someone growing personally and professionally while an employee of JJLCO.”

“John Lothian is a powerful voice in the industry and will continue to be so with his John Lothian Newsletter, JLN Options, Marketswiki and Marketswiki Education,” Kharouf said. “He will continue to build the company which he started 17 years ago. It is a unique model in the media space, and one of the most trusted sources of news and information in the financial markets globally. That will certainly continue.”

John Lothian will return to the role of CEO in addition to his other roles. Lothian continues to own 100% of John J. Lothian & Company, Inc.

++++

Hits & Takes
JLN Staff

Oxford University is set to issue its first ever bond. Since it’s 2017 and we live in interesting times, it’s expected to have a 100-year duration. I’m not sure if it’s another effect of grade inflation, but Moody’s gave Oxford the top Aaa rating.~SD

Need more proof that there will indeed be an ETP for everything? ProShares just launched two “retail disruption ETFs.” One is long online companies and short companies that derive the majority of their revenue from physical stores while the ETF is just called the “Decline of the Retail Store ETF.” That product is just short exposure via swaps to the “Solactive-ProShares Bricks and Mortar Retail Store Index.”~SD

Asia Pacific Financial News from John Lothian News – November 28, 2017~JJL

Yesterday’s JLN Options newsletter can be found here.~SD

HKEX is expanding its presence in Asia with the opening of a new office in Singapore today! Chief Executive Charles Li was there along with 200 guests. He said the Belt and Road Initiative and fintech are both tremendous growth opportunities. Via LinkedIn.~JJL

Coal generates 24 percent of Europe’s power, but 76 percent of its emissions.~SD

Xavier Rolet dedicates lifetime achievement award to LSE colleagues in a tweet
Courtney Goldsmith – City AM
Praise has already started pouring in for Xavier Rolet, who stepped down as the chief executive of the London Stock Exchange (LSE) Group today.
/goo.gl/YHQfz8

***** Best of luck and wishes for what comes next for Xavier. Thank you for your service to LSE and the markets.~JJL

++++

Tuesday’s Top Three
No surprise on our end that the WSJ’s Bitcoin’s Trading Star Is Chicago High-Speed Firm That Nods to the Grateful Dead, about DRW’s Cumberland Mining, was the top clicked story yesterday. Second was a CME profile on Lee Stern – Meet The World’s Longest Serving Futures Trader. In a fun twist, our third most clicked was a link to the Grateful Dead song that Cumberland Mining derives its name from – Cumberland Blues.

MarketsWiki Statistics Sponsored by Level Trading Field

113,142,816 pages viewed 22,927 pages 210,663 edits

Lead Stories

CEO quits as LSE tries to draw line under management row
Huw Jones – Reuters
London Stock Exchange (LSE.L) CEO Xavier Rolet is stepping down immediately and its chairman will not seek re-election, as the exchange tries to draw a line under a row with a top shareholder over management succession.
/goo.gl/Gtp6eX

****SD: Also see Reuters’ BoE’s Carney ‘mystified’ by CEO spat at London Stock Exchange and the FT’s Rolet quits as London Stock Exchange chief after power struggle

Regulators look to shine more light on U.S. Treasury market
Jonathan Spicer and John McCrank – Reuters
Regulators on Tuesday signaled some desire to raise the curtain on the $14 trillion market for U.S. Treasury debt, suggesting investors and the public could soon take a look at a vast and potentially valuable pool of Wall Street trading data.
reut.rs/2icjoNq

The City establishment closes ranks over Xavier Rolet; Mark Carney forced the resolution of an alarming dispute at London Stock Exchange
John Gapper – FT
It was a bizarre dispute but it was settled in a traditional City of London manner. Xavier Rolet’s departure as chief executive of the London Stock Exchange Group, despite a fierce hedge fund effort to keep him, was achieved by an implacable board of directors, backed by the governor of the Bank of England, Mark Carney.
/goo.gl/v3bRVs

HKEX Expands Its Presence In Asia With An Office In Singapore
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today (Wednesday) expands its presence in Asia with the opening of the Singapore office of The Stock Exchange of Hong Kong Limited (SEHK) and the Hong Kong Futures Exchange Limited (HKFE), wholly-owned subsidiaries of HKEX.
/goo.gl/nnf8Cq

Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says
Kevin Costelloe – Bloomberg
Nobel Prize-winning economist Joseph Stiglitz said “bitcoin is successful only because of its potential for circumvention, lack of oversight.”
/goo.gl/bHo9Mh

Hackers Now Have Incredibly Sophisticated Ways to Breach Banks’ Defenses
Gavin Finch – Bloomberg
Threat has increased rapidly in past 18 months, report says; SWIFT and BAE Systems say banks must build ‘in-depth’ defenses
Global banks need to do more to protect themselves from cyberattacks after a “significant evolution” in the threat level in the last 18 months, according to the SWIFT global payments network.
/goo.gl/QuswQ7

Exclusive: Britain and the EU agree Brexit divorce bill
Peter Foster – The Telegraph
British and EU negotiators have reached a deal over the so-called Brexit bill, opening the door to a potential breakthrough in the talks this December, the Telegraph has learned.
/goo.gl/J8VWTY

Trump Team to Recommend Keeping Dodd-Frank Liquidation Power; Treasury Department to propose tweaking, not scrapping, orderly liquidation authority, a win for backers of Dodd-Frank
Ryan Tracy – Bloomberg
The Trump administration doesn’t plan to recommend stripping regulators of their power to seize and unwind a failing financial firm in a crisis, according to people familiar with the matter, a development likely to make defenders of the 2010 Dodd-Frank financial law breathe a sigh of relief.
/goo.gl/kNGGue

Satellites and sensitive sheep blur insider trading; Technology creates a regulatory minefield and demands a revamp of reporting requirements
Stuart Kirk – FT
A key moment in the history of insider trading rules was the discovery in 1959 of a possible ore deposit in Ontario by the Texas Gulf Sulphur Company. When the find eventually became public five years later, scores of employees (and their relatives and friends) became rich. The Securities and Exchange Commission sued and won. A court agreed that “all investors should have equal access to material information”.
/goo.gl/onqjhp

Exchanges, OTC and Clearing

EuroCCP chief executive to stand down
Samuel Agini – Financial News
The chief executive of EuroCCP and a driving force behind the development of Europe’s market infrastructure over the last decade is stepping down.
/goo.gl/EB8n7N

LSE bites back at ‘damaging’ investor as Xavier Rolet departs early
Lucy Burton – Telegraph
The London Stock Exchange has launched an extraordinary attack on one of its biggest investors in a bitter row that has resulted in boss Xavier Rolet leaving “with immediate effect”, a year earlier than planned.
/goo.gl/8meSzT

LSEG’s Rolet steps down with immediate effect; Xavier Rolet departs immediately due to “great deal of unwelcome publicity, which has not been helpful to the company”.
Hayley McDowell – The Trade
The London Stock Exchange Group’s (LSEG) chief executive officer has stepped down from his position with immediate effect, after weeks of controversy around his decision to leave.
/goo.gl/NxVK4i

HKEX establishes new office in Singapore; New office in Singapore is opened as HKEX looks to expand its presence in South-East Asia.
By Hayley McDowell – The Trade
Hong Kong Exchanges and Clearing (HKEX) has opened a new office for The Stock Exchange of Hong Kong (SEHK) in Singapore in a bid to expand its presence in Asia.
/goo.gl/3qzBiS

London Stock Exchange C.E.O. Rolet to Step Down Immediately
By CHAD BRAY – NY Times
The London Stock Exchange Group said on Wednesday that Xavier Rolet, its chief executive, would step down immediately, amid a public fight with a major investor who claimed Mr. Rolet was being forced out.
/goo.gl/8v9pGf

An Embarrassment to London
By Chris Hughes – Bloomberg
It was always going to be hard for Xavier Rolet to leave London Stock Exchange Group Plc on a high. No-one thought he would be leaving during a crisis.
/goo.gl/trAv5b

Backfiring LSE campaign shows pitfalls of public activism
By David Wighton – Financial News
When the Governor of the Bank of England says you have to go, you really have to go. It always seemed extremely unlikely that Sir Chris Hohn would succeed in his campaign to extend Xavier Rolet’s stay as chief executive of the London Stock Exchange Group. But after Mark Carney’s comments on Tuesday it was inconceivable.
/goo.gl/cD9qcB

Xetra-Gold celebrates its 10th birthday; Europe’s largest gold security with physical deposit; Rapid increase to more than 170 tons of gold; Bavaria and Hesse are particularly willing to deliver Xetra-Gold
Deutsche Bˆrse Group
Xetra-Gold, Europe’s leading gold-backed security, is celebrating its 10th anniversary. On this occasion, trading on the Frankfurt Stock Exchange opened today with the ringing of the stock market bell. After a recent significant increase in gold demand from private and institutional investors, more than 170 tons of Xetra gold worth more than six billion euros are currently stored in the German central safe depository for securities in Frankfurt. At the beginning of 2016, the portfolio was still at 59.25 tonnes.
/goo.gl/XVjJsS

STOXX changes composition of benchmark indices; Results of the fourth regular quarterly review to be effective Dec. 18, 2017
Deutsche Bˆrse Group
STOXX Ltd., the operator of Deutsche Boerse Group’s index business, and a global provider of innovative and tradable index concepts, today announced the new composition of STOXX Benchmarks and their sub and sector indices, among them the STOXX Europe 600 Index, STOXX North America 600 Index and STOXX Asia/Pacific 600 Index.
/goo.gl/cNyZTX

Finalists announced for the Deutsche Bˆrse Photography Foundation Prize 2018
The shortlist artists are: Mathieu Asselin, Rafal Milach, Batia Suter and Luke Willis Thompson; The four finalists for the Deutsche Bˆrse Photography Foundation Prize 2018 are Mathieu Asselin, Rafal Milach , Batia Suter and Luke Willis Thompson .
Deutsche Bˆrse Group
The works of this year’s finalists critically question the production and manipulation of knowledge and political systems with very different stylistic approaches and visual formats. On the one hand, the projects involve a sharp examination of the biotech giant Monsanto (Asselin), an examination of the seemingly harmless methods of state influence and propaganda (Milach), an encyclopaedic collection of visual associations that illustrate how the relative Suter, as well as a very moving cinematic study on grief dealing with the personal consequences of visual representation and media dissemination (Willis Thompson).
/goo.gl/9sPwdQ

Nasdaq Wins Best Clearing Technology of the Year by Risk.net
By GlobeNewswire
The Market Technology business of Nasdaq (Nasdaq:NDAQ) has won ‘Best Central Counterparty Clearing Support Product of the Year’ awarded by Risk.net. The winning entry focused on the Nasdaq Financial Framework. The solution, originally launched in 2016, incorporates the world’s leading multi-asset and real-time clearing, settlement and risk management. It represents a harmonized approach to delivering robust post-trade capabilities in an open, agile environment.
/goo.gl/zZyZEw

SGX proposes to make securities settlement and clearing safer and aligned with global practices
SGX
Singapore Exchange (SGX) plans to make changes in the clearing and settlement of securities in the Singapore stock market.
/goo.gl/71v6QT

Fintech

IPC Collaborates With The Japan Exchange To Provide Low-Latency Connectivity Between JPX And Chicago
Mondovisione
IPC, a leading global provider of secure, compliant communications and networking solutions for the financial markets community, today announced the launch of a new managed service in collaboration with Japan Exchange Group, Inc. (JPX) which will provide a one-stop-shop to for international connectivity between JPX and the financial markets in Chicago.
/goo.gl/4qDCj4

How machine learning creates new professions ó and problems; Leaders face an explosion in demand for knowledge and skills
Richard Waters – FT
It is not often that a new profession springs up almost overnight. It is also unusual for many of the people who find their way into this new field to do it without the formal training provided by the normal institutions of higher education.
/goo.gl/yXzf8v

Bitcoin breaks through $10,000 as appeal grows; Moves to bring cryptocurrency into mainstream financial system fuel sharp price rise
Chloe Cornish in San Francisco – FT
It has been branded “a fraud” by its critics, and its sharp price rise during 2017 has been likened to the 17th century tulip craze. But love it or hate it, bitcoin has defied naysayers and delighted proponents by breaking through the $10,000 price barrier ó a more than tenfold increase in value over the course of this year.
/goo.gl/RERLoJ

How business schools teach cryptocurrencies; Students and executives want an education in bitcoin and others
Martin Arnold in London – FT
David Yermack is a man in great demand. In 2014, the professor of finance at the NYU Stern School of Business helped it become the first major university to launch a course in the nascent field of blockchain and cryptocurrencies.
/goo.gl/doZHKC

Drivers and risks of the cryptocurrency boom;Bitcoin’s surge past $10,000 reflects investor mania seen by some as a bubble
Hannah Murphy – FT
The mushrooming prices of cryptocurrencies are prompting volatility-starved investors to examine ways to join the biggest speculative boom since dotcom fever.
/goo.gl/vfusdo

The U.S. Supreme Court on Wednesday takes up a major test of privacy rights in the digital age as it weighs whether police must obtain warrants to get data on the past locations of criminal suspects using cellphone data from wireless providers.
/goo.gl/GBBepe

Podcast: CFTC Talks EP018: Barry Ritholtz, CIO and Chairman Ritholtz Wealth Management
CFTC
#CFTCTalks has Bloomberg view contributor and blogger at The Big Picture, Barry Ritholtz, on to talk markets and big…
/goo.gl/RydZ1p

The Internet Is Dying. Repealing Net Neutrality Hastens That Death.
Farhad Manjoo – NY Times
Sure, technically, the internet still works. Pull up Facebook on your phone and you will still see your second cousin’s baby pictures. But that isn’t really the internet. It’s not the open, anyone-can-build-it network of the 1990s and early 2000s, the product of technologies created over decades through government funding and academic research, the network that helped undo Microsoft’s stranglehold on the tech business and gave us upstarts like Amazon, Google, Facebook and Netflix.

Politics

The unfortunate exit of an exemplary Fed chair; Janet Yellen has set policy wisely and managed the institution well
FT View
The Federal Reserve can take some blame for failing to see risks building up in the years preceding the global financial crisis. But perhaps more than any other major policymaking institution in the world, the Fed has acquitted itself well in the decade since.
/goo.gl/8ShcYs

Trump Once Said the ‘Access Hollywood’ Tape Was Real. Now He’s Not Sure.
Maggie Haberman and Jonathan Martin – NY Times
Shortly after his victory last year, Donald J. Trump began revisiting one of his deepest public humiliations: the infamous “Access Hollywood” tape of him making vulgar comments about women.
/goo.gl/7D8fXB

Donald Trump is going to build a big, beautiful deficit and rely on China to help pay for it
Andrew Van Dam – Washington Post
Republicans’ tax plans are going to clash headfirst with President Trump’s anti-China, anti-trade-deficit rhetoric. It’s just simple economics.
/goo.gl/vTC995

Regulation

Celebrity Influencers Now Causing Trouble With … Investments?
Jesse Brody, Manatt Phelps and Phillips LLP – Lexology
While the Federal Trade Commission has previously cautioned celebrities and social media influencers about failing to disclose a material connection between an endorser and a product, the Statement from the SEC’s Division of Enforcement and Office of Compliance Inspections and Examinations presents a new wrinkle.
bit.ly/2ie7L8z

U.S. Probe of Malaysian Fund Looks at Rap Star’s Political Donations; Investigators want to know if there was an agreement to back Obama between Pras Michel, of the Fugees, and Malaysian financier Jho Low
Bradley Hope and Tom Wright – WSJ
The Justice Department is investigating more than $1 million of political donations by rap star Pras Michel during the 2012 presidential campaign, after evidence emerged that he received $20 million in gifts around the same time from a Malaysian financier linked to a global fraud scandal, people familiar with the investigation said.
/goo.gl/1hjQBx

Bank rules are ‘tough enough’, says Jay Powell; Trump’s pick as Fed chair signals end to era of tightening financial regulation
Sam Fleming in Washington – FT
Donald Trump’s nominee to chair the Federal Reserve has signalled an end to the era of ratcheting up regulation on US banks, saying the existing rules were “tough enough” to ensure a stable system and that there were ways to tailor the regime.
/goo.gl/BGf4ez

Regulators Open to Making Treasury Market Data Public; Officials weigh benefits of releasing the information
Gabriel T. Rubin – WSJ
U.S. regulators said Tuesday they were considering releasing to the public some of the data on the $14 trillion U.S. Treasury market that they have been collecting since this summer, but no decision was imminent.
/goo.gl/Aa67Ta

NY Fed chief Dudley backs public reporting of Treasury trades
Joe Rennison – FT
The president of the Federal Reserve Bank of New York has offered his support for the introduction of public reporting of treasury transactions.
/goo.gl/igdS51

FINRA Requests Comment on the Effectiveness and Efficiency of Its Payments for Market Making Rule
FINRA
FINRA is conducting a retrospective review of the rule governing payments for market making to assess its effectiveness and efficiency. This Notice outlines the general retrospective rule review process and seeks responses to several questions related to firms’ experiences with this specific rule.
/goo.gl/dEVWu9

Upgrade to Transport Layer Security Version
FINRA
Effective Monday, March 5, 2018, the FINRA TRACE, ADF and ORF Web API reference data download files will no longer be accessible using the Transport Layer Security (TLS) 1.0 protocol. FINRA will disable TLS 1.0, and firms using that protocol will not be able to establish connectivity to FINRA’s secure web servers to download the files. To gain access to the FINRA API reference data downloads, firms must migrate to TLS versions 1.1 or 1.2 by March 5, 2018. If possible, firms should use the most current version, TLS 1.2.
/goo.gl/dMCUKt

Investing and Trading

ETF Buyers Make Same Mistake That Led to Crisis, Regulator Says
Dani Burger – Bloomberg
Investors relying on diversification not due diligence: IOSC; Secretary general of market regulator speaks at conference
Investors are getting blasÈ with their choices of exchange-traded funds, according to the lead international body for securities regulation.
/goo.gl/vSVXrF

Bitcoin and the Fear of Missing Out
Lionel Laurent – Bloomberg
Everyone, from the Uber driver to the hedge-fund manager, appears to be afraid of missing out on the Bitcoin bubble.
/goo.gl/4xEB64

Million-Barrel Oil Hedging Surge Signals Shale Boom Here to Stay
Alex Nussbaum – Bloomberg
Protection grew most since Wood MacKenzie started tracking; New contracts cover annualized 897,000 barrels a day of output
Oil explorers took advantage of a market rally to lock in prices for almost 1 million barrels a day’s worth of future output, signaling the shale boom’s staying power as OPEC ponders the extension of its supply curbs.
/goo.gl/RBMdBG

Why Investors Are Unfazed by North Korea’s Missile Launch
Heejin Kim, Abhishek Vishnoi and Adam Haigh – Bloomberg
Kospi advances as much as 0.4%, while won strengthens; BOK policy meeting, GDP data this week matter more, they say
North Korea launched an intercontinental ballistic missile near Japan, but investors and analysts were unfazed by the latest provocation.
/goo.gl/QtVxKL

Oxford University is planning to issue its first-ever bond
Ciara Linnane – MarketWatch
Storied university is tapping the capital markets as the U.K. government cuts funding following tuition hikes
Oxford University, alma mater to a raft of U.K. prime ministers, former U.S. President Bill Clinton and Nobel Prize – winning physicist Albert Einstein, among countless notables over its nine centuries of history, is planning its first-ever bond issue, and it can expect to price it on good terms.
/goo.gl/KXmEkD

Bitcoin Blasts to Record $10,000 as Bubble Warnings Multiply
Julie Verhage – Bloomberg
Bitcoin surpassed $10,000 for the first time and continued higher, taking this year’s price surge to 11-fold even as warnings multiply that the largest digital currency is an asset bubble.
/goo.gl/6qXFxw

Influential mining investor calls for stronger cash returns; Blackrock’s Evy Hambro says big miners have it in their power to heal old wounds
Neil Hume, Commodities and Mining Editor – FT
Evy Hambro, Blackrock’s chief investment officer for natural resources, says the mining industry can regain the trust of investors and achieve higher stock market ratings if it steps up cash returns.
/goo.gl/6UMNd8

ECB bond buying transforms universe of top tier debt; Sheer volume of purchases has placed huge downward pressure on yields
Thomas Hale – FT
The ramifications of the European Central Bank’s massive bond purchases in recent years register acutely for insurance companies and pension funds alongside other traditional buyers of top tier debt.
/goo.gl/LhJmeb

Opinion: Why it’s now time to break from the stock market’s herd
Richard L. Peterson – MarketWatch
“Rip Van Winkle would be the ideal stock market investor,” Richard Thaler, the Nobel prize-winning behavioral economist, points out. He adds: “Rip could invest in the market before his nap and when he woke up 20 years later, he’d be happy. He would have been asleep through all the ups and downs in between. But few investors resemble Mr. Van Winkle. The more often an investor counts his money – or looks at the value of his mutual funds in the newspaper – the lower his risk tolerance.”
/goo.gl/KE3tWf

How to Avoid the Holiday Debt Trap
Kaitlyn Kiernan – FINRA
There’s no escaping the aftermath of too much holiday cheer, whether it’s a few extra pounds or the dreaded hangover. Binging on gifts and entertaining can leave a lasting pain, too: credit card debt.
/goo.gl/GSpoNc

Institutions

Wells Fargo Is Dubbed a Repeat Offender and Faces New Wrath From Its Regulator; Bank was asked to respond on irregularities in its auto-insurance and mortgage-lending units
Gretchen Morgenson and Emily Glazer – WSJ
A federal regulator has advised Wells Fargo WFC 3.00% & Co.’s board of directors that it is weighing a formal enforcement action against the bank over improprieties in its auto-insurance and mortgage operations.
/goo.gl/zqiDQq

Nomura reopens private equity business; Move comes amid PE-led boom in investment in Japanese companies
Leo Lewis in Tokyo – FT
Nomura is planning to revive its shuttered private equity business in a bet that ageing demographics, economic migration and competitive pressure will propel Japan into a new era of divestment, restructuring and management buyouts.
/goo.gl/FEiSwN

Vanguard Is Finally Bringing Its Active Smart Beta ETFs to the U.S.
Dani Burger – Bloomberg
Better late than never. After years of internal debate, Vanguard Group has taken one of the final steps necessary to sell its first smart beta exchange-traded funds in the U.S. The Valley Forge, Pennsylvania-based firm registered seven actively managed factor funds with the Securities and Exchange Commission that are expected to begin trading in the first quarter of 2018, according to a company statement Tuesday.
/goo.gl/nq6qgA

Barclays Warns Half of Bankers Are at Risk of Pay Cuts
Stephen Morris – Bloomberg
Investment bank CEO wants more differentiation in compensation; Throsby joined in January to turn around worst-performing unit
Barclays Plc’s top investment banker has told staff he’ll sharpen divisions in bonuses this year, boosting pay for top performers while cutting it for those in the bottom half, people familiar with the comments said.
/goo.gl/qk4smT

Goldman Warns Highest Valuations Since 1900 Mean Pain Is Coming
Chris Anstey – Bloomberg
Returns likely to be lower across all assets in medium term; Risk scenario sees inflation jump that ushers ‘fast pain’
A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900, a condition that at some point is going to translate into pain for investors, according to Goldman Sachs Group Inc.
/goo.gl/jkBSDC

Soros Sons to Back New Hedge Fund From Ex-Soros Manager
Katia Porzecanski – Bloomberg
Fund is planned to start trading with maximum of $250 million
Jonathan and Robert Soros to invest in the long-short fund
Santiago Jariton, a former money manager at George Soros’s family office, is planning to start a hedge fund focused on stock bets in Latin America with anchor investments from two of the billionaire’s sons, according to people familiar with the matter.
/goo.gl/jncf8c

Ex-JPMorgan Traders Start Singapore Currency Options Quant Fund
Chikafumi Hodo and Komaki Ito – Bloomberg
Ogaki and Loh to start with $75 million in seed capital; Model tests returned annualized 12.7% gain over past decade
Two former JPMorgan Chase & Co. foreign-exchange option traders will start a quantitative hedge fund in January, using artificial intelligence to trade currency options.
/goo.gl/L6aoue

Maybe Investment Banking Isn’t HSBC’s Thing
Nisha Gopalan, Elaine He – Bloomberg
HSBC Holdings Plc just can’t seem to crack Wall Street.The latest piece of evidence? Matthew Westerman’s departure, less than two years after he was recruited from Goldman Sachs Group Inc. as co-head of global banking.
/goo.gl/KRuH5r

Regions

The Odyssey of a Turkish Trader Now Spilling His Secrets in U.S.
Greg Farrell and Christian Berthelsen – Bloomberg
Zarrab, after two arrests, details Iran sanctions scheme; Pop-star wife, Bond-style toys and an ill-fated Disney trip
Turkish customs agents set off a half decade of intrigue when they boarded a plane that landed unexpectedly at Istanbul’s international airport. They found in the hold, undeclared, a ton and a half of gold.
/goo.gl/2twmJ9

Saudi Prince Released After $1 Billion Deal, Official Says
Alaa Shahine – Bloomberg
Prince Miteb agreed to pay settlement in corruption probe; Saudi crown prince said most graft suspects agreed to settle
Bloomberg’s Zainab Fattah discusses the corruption probe in Saudi Arabia.
Prince Miteb bin Abdullah, one of the most senior Saudi royals detained in the kingdom’s corruption crackdown, has been released after reaching a settlement deal believed to exceed the equivalent of $1 billion, an official involved in the anti-graft campaign said.
/goo.gl/CoFSBi

North Korea claims missile puts all of US in range; Launch of Hwasong 15 makes ‘state nuclear force’ complete, says Kim Jong Un
Bryan Harris in Seoul and Courtney Weaver in Washington – FT
North Korea on Wednesday claimed the successful launch of a new advanced ballistic missile that it said placed the entire US within range.
/goo.gl/LzzBn1

HNA puts $40bn global buying spree into reverse; Chinese group for first time acknowledges it is considering asset sales
FT Reporters
HNA Group has signalled that it is kicking into reverse its $40bn global buying spree, as the Chinese conglomerate finds itself under the microscope by mainland regulators.
/goo.gl/rQJxsC

New Bank of Mexico head seen as safe pair of hands; Alejandro DÌaz de LeÛn takes helm from AgustÌn Carstens ahead of potentially tough year
Jude Webber in Mexico City – FT
Alejandro DÌaz de LeÛn, deputy governor of the Bank of Mexico and considered a rising star in the country’s financial firmament, has been named to the top job, replacing AgustÌn Carstens who is moving to Basel to run the Bank for International Settlements.
/goo.gl/vgSLzd

Brexit

UK bows to EU demands with breakthrough offer on Brexit bill; Britain agrees total liabilities worth EUR100bn but will aim to pay less than half
Alex Barker in Brussels and George Parker in London – FT
Britain has bowed to EU demands and agreed to fully honour its financial commitments as identified by Brussels, removing one of the biggest obstacles to a Brexit divorce settlement.
/goo.gl/NKQrJy

U.K. and EU Agree on Outline Brexit Bill as Irish Block Remains
Nikos Chrysoloras and Ian Wishart – Bloomberg
Negotiators said to have agreed outline deal on divorce bill; Thorny question of Irish border still remains to be solved
U.K. and the European Union negotiators reached an outline deal on the Brexit divorce bill, clearing a hurdle in negotiations and ramping up pressure to find a compromise on the thorny issue of the Irish border. The pound surged.
/goo.gl/KXD7hd

Gilt Traders Should Remain Wary of Brexit Risks, Scotiabank Says
Charlotte Ryan – Bloomberg
Bank says yield curve may steepen on no-deal, Corbyn election; Brexit and Corbyn ‘both pretty scary’ for markets: Investec
While news of a potential breakthrough in Brexit talks on the U.K.’s divorce bill to leave the European Union may have calmed some nerves, gilt investors shouldn’t get too complacent about the risks.
/goo.gl/pdZKSh

20 New Residential Towers Are Being Built in Frankfurt Because of Brexit Demand
Stephan Kahl – Bloomberg
Condominium prices increased by 15% in 2017, new study finds; Germany’s highest residential building to be completed by 2019
The prices for new condominiums in Frankfurt have now reached such a high level that it pays off for project developers to build high-rise residential buildings and more and more such towers are being built in the German financial capital. This emerges from an assessment by consulting company Bulwiengesa AG.
/goo.gl/RXbKZS

Miscellaneous

Taking One for the Team: Companies Foster Collaboration; Collaboration is good for business but is seldom easy; how companies shed silos and get employees communicating.
Sue Shellenbarger – WSJ
More companies are asking employees from different departments to collaborate on projects. But dragging people out of their silos isn’t easy. How do you get aggressive, fast-talking salespeople to cooperate with reserved, detail-oriented engineers? Or intuitive creative types to sync with budget-minded planners?
/goo.gl/b77q3L

The post LSE’s Rolet quits; Regulators look to shine more light on Treasury market; City closes ranks over Rolet appeared first on John Lothian News (JLN).

First Read

Hits & Takes

In a presentation for Risk Management Monitor, John Fennell, OCC’s executive vice president and chief risk officer, discusses how a risk culture audit can help companies identify challenges in corporate behavior and helps them reorient how they think about today’s increasingly complex risk landscape. You can read the article here.~SR

Whether you think the crypto space is a bit-con or legitimate, it was disconcerting to see this article on Bitcoin.com yesterday – How to Buy Bitcoin When You’re Underage.~SD

Yesterday’s JLN Options newsletter can be found here.~SD

Asia Pacific Financial News from John Lothian News – November 29, 2017~JJL

What to learn to trade futures? Check out this course from the CME Institute.~JJL

Are you ready for AOL’s Instant Messenger to go away. Check out this Youtube video about ICE Instant Messenger.~JJL

++++

Other Voices: An Open Letter on Bitcoin Futures
Carl Gilmore via John Lothian News
A lot of ink has been spilled over bitcoin and its variants. Lately, the conversation seems to be focused on whether trading bitcoin futures is a good idea. For what it’s worth, my view is that it isn’t a good idea – it’s a great idea.
/goo.gl/uhWkAJ

***** Carl Gilmore is a bitcoin futures fan!

Tales From The Crypt
The Reformed Broker
Okay, this is crazy. Yesterday I walked into the Marriott Marquis in Times Square and began ascending the escalators. The massive Consensus: Invest Conference, focused on cryptocurrencies, was being held on the fifth floor. But by the time I got to the third floor I could already hear it. By the fourth floor, the buzz was remarkable. By the time I got up to five, it was deafening. There were 1400 paid attendees at almost $2000 a pop according to my contact at Coindesk, the conference organizer. And then hundreds of exhibitors, speakers, AV people, journalists, etc. This thing was absolutely booming.
bit.ly/2BxjMuE

***** Category: What does a mania look like for $11,000?

++++

Jump Trading CTO Hunt departs in shakeup
Frank Chaparro – Business Insider
Steve Hunt, the chief technology officer of Chicago-based trading firm Jump Trading, has left the firm, according to the company.
Hunt’s tenure with Jump, a trading firm with offices in Chicago, New York, London, and Singapore, has spanned more than 10 years, according to his LinkedIn page. Before joining the firm in 2007, Hunt was a vice president at Goldman Sachs.
read.bi/2BwHkzT

**Hunt jumped.~JK

++++

Wednesday’s Top Three
Our top piece of the day on Wednesday was led by Bloomberg’s interview, Bitcoin ‘Ought to Be Outlawed,’ Nobel Prize Winner Stiglitz Says where he says Bitcoin has no social purpose. Second went to Reuters’ piece Regulators look to shine more light on U.S. Treasury market. Third went to Bloomberg’s Hackers Now Have Incredibly Sophisticated Ways to Breach Banks’ Defenses

MarketsWiki Statistics Sponsored by Level Trading Field

113,257,165 pages viewed 22,927 pages 210,678 edits

Lead Stories

Nasdaq Plans to Launch Bitcoin Futures in First Half 2018
Stephanie Yang and Alexander Osipovich – The Wall Street Journal
Nasdaq Inc. and broker Cantor Fitzgerald LP are looking to join the rush on Wall Street to trade bitcoin, which powered above $11,000 on Wednesday.
Nasdaq aims to launch bitcoin futures in the first half of 2018, according to people familiar with the situation. Separately, Cantor said it is seeking to launch bitcoin derivatives on an exchange it owns, also in the first half of next year. The moves come after two major Chicago exchange operators announced similar plans for the digital currency.
/goo.gl/38JFqA

Irish Stock Exchange sold to Euronext
Donal O’Donovan – Independent.ie
The Irish Stock Exchange is understood to have agreed a sale to Euronext, which operates the main Paris exchange.
/goo.gl/cTJ25Q

Bitcoin broke $11,000, then plunged 18%, as thousands of newbies signed up for cryptocurrency wallets
Joon Ian Wong – Quartz
Bitcoin’s price soared past $11,000, plunged as low as $9,300, and then recovered to around $10,000óall in the space of 24 hours of trading yesterday (Nov. 29). It was an object lesson in the volatility of the bitcoin markets. However, the violent price swings didn’t stop hundreds of thousands of users opening cryptocurrency wallets for the first time, according to two major wallet providers.
/goo.gl/ypm3si

Australia bows to years of pressure, announces inquiry into finance sector
Byron Kaye, Paulina Duran – Reuters
The Australian government said on Thursday it will hold a wide-ranging inquiry into a scandal-hit finance sector, arguing one was needed to restore public confidence as it reversed its long-held opposition amid mounting political pressure.
/goo.gl/iNH4G5

Takeover speculation returns after Rolet’s exit from the LSE
Samuel Agini – Financial News
Analysts at JPMorgan are already asking whether Xavier Rolet’s immediate exit from the London Stock Exchange could reinvigorate takeover interest from one of the biggest exchange groups in the world.
bit.ly/2BxFoak

Activist TCI keeps up effort to remove LSE chairman Brydon
Philip Stafford – FT
The Children’s Investment Fund is to go ahead with its attempt to remove Donald Brydon, the chairman of the London Stock Exchange Group.
/goo.gl/zbLCgo

****SD: Also from the FT’s Stafford – Rolet stands down but doubts remain over future of LSE

U.S. Securities Markets Coalition Opposes Senator Wyden’s Proposed Amendment “Modernization of Derivatives Tax Act of 2017”
OCC
The members of the U.S. Securities Markets Coalition (the “Coalition”) write to share our opposition to Senator Wyden’s filed amendment (Wyden #11, Committee #155) to the Chairman’s Mark of the Tax Cuts and Jobs Act that would add the language of his proposed Modernization of Derivatives Tax Act of 2017.
/goo.gl/mkUa4u

Itiviti-ULLINK Combo Sets Sights on Trading Tech Market Leader Fidessa
Intelligent Trading Technology
The planned merger of Nordic front-office trading systems provider Itiviti with rival French supplier ULLINK is aimed at creating a global full-service trading powerhouse with a remit to take on market leader Fidessa. The merger of equals – announced today – expects to meld Itiviti’s trading and market-making capabilities with the equities and listed derivatives expertise of ULLINK, and offer global connectivity via the latter’s NYFIX network and a full range of high- and low-touch order and execution management (OMS/EMS) solutions and services.
/goo.gl/aiwtDs

What is going on in Uncleared Derivative Markets?
Chris Barnes – Clarus Financial Technology
In an age of Clearing Mandates (2017), Regulatory Reforms (MIFID II) and Uncleared Margin Rules (ISDA SIMM) we may be tempted to anticipate the inevitable demise of uncleared markets. We certainly don’t write about them much on this blog.
However, that isn’t the case. There will always be derivatives that are not cleared (see the small volumes in Swaptions or the lack of a cross currency swap solution). There will continue to be legacy trades. There are also counterparties exempt from Clearing Mandates.
/goo.gl/CYA9HS

What Organizations Need to Know about Risk Culture Audits
Risk Management Monitor
John Fennell, OCC’s Executive Vice President and Chief Risk Officer, discusses how a risk culture audit can help companies identify challenges in corporate behavior and helps them reorient how they think about today’s increasingly complex risk landscape.
bit.ly/2BuLlVD

Bitcoin’s price is collapsing and people can’t trade because 2 big exchanges have crashed
Becky Peterson – Business Insider
Bitcoin on Wednesday dropped to about $9,200 from an all-time high of about $11,400 after many users found themselves locked out of two of the biggest cryptocurrency exchanges in the US.
read.bi/2BzaOgI

London lost the Frenchman who has tried to save its $1 trillion clearing business
John Detrixhe – Quartz
One of the UK’s unlikely Brexit championsóa Frenchman who has tried to protect London’s financial sector from European Union officials (including the French ones) who want to dismantle itóhas stepped down. Today (Nov. 29) London Stock Exchange Group CEO Xavier Rolet is leaving the company after its boardroom drama spilled into the public.
/goo.gl/oiMjaH

Turkish gold trader details money laundering scheme for Iran
Brendan Pierson – Reuters
A Turkish-Iranian gold trader described in a U.S. court on Wednesday how he ran a sprawling international money laundering scheme aimed at helping Iran get around U.S. sanctions and spend its oil and gas revenues abroad.
reut.rs/2Bxtk97

****SD: Financial Times here.

Bitcoin Futures Draw Push Back, Not Stop Light From Market Cops
Newsmax
Bitcoin just passed $10,000 and a bid by the world’s largest futures exchange to make it even more mainstream is probably inevitable. But that doesn’t mean U.S. regulators will let trading resemble the Wild West.
/goo.gl/7QxAQE

Carbon Pricing: The Business Case for Low-Carbon Innovation
Rochelle March, Senior Analyst – S&P Dow Jones Indices Indexology Blog
The belief that economic growth is possible without lowering carbon emissions is becoming harder to sell by the minute. A study by the London School of Economics showed that if business-as-usual emissions continue over this century, the value of risk to global financial assets in today’s terms is 1.8%, or USD 2.5 trillion. Likewise, analysis by Trucost shows that operating margins will turn negative for 46% of companies in the chemicals sector by 2030 because emitting carbon will become too expensive.
bit.ly/2BxxJJ9

Bundesbank Says Brexit Deal Could Keep Swaps Clearing in London
Nicholas Comfort – Bloomberg
Dombret says intensive supervisory cooperation would be needed; Such an agreement could obviate need for relocation of firms
Bundesbank Executive Board member Andreas Dombret said an agreement should be reached to prevent Brexit from disrupting financial clearing services, which are currently dominated by firms in London.
/goo.gl/Ax79mY

Exchanges, OTC and Clearing

Euronext expands its federal model with the acquisition of the Irish Stock Exchange
Euronext
Today, Euronext announces the acquisition of 100% of The Irish Stock Exchange plc (“ISE”), for EUR137 million.
/goo.gl/y3qF6V

Payday for brokers as Irish Stock Exchange lands EUR158.8m Euronext deal; Deal allows both sides to position themselves for Brexit opportunities
Mac DÛnaill – The Irish Times
A group of Irish stockbrokers are set to share EUR158.8 million through a deal to sell the Irish Stock Exchange (ISE) to Euronext, operator of the Paris, Amsterdam, Lisbon and Brussels bourses.
/goo.gl/LuK3mg

Euronext buys Irish Stock Exchange in EUR137m Brexit driven deal; The acquisition aims to strongly position Euronext in a post-Brexit landscape.
Hayley McDowell – The Trade
operator looks to strongly position itself in a post-Brexit environment.
/goo.gl/NKFuFg

BaFin approves Deutsche Bˆrse as ARM and APA
Deutsche Bˆrse Group
The German Federal Financial Supervisory Authority (BaFin) has decided that the approved reporting mechanism (ARM) and the approved publication system (APA) of Deutsche Bˆrse AG fulfill all relevant requirements of MiFID II. Deutsche Bˆrse’s Regulatory Reporting Hub (RRH) will offer corresponding ARM and APA services as of 3 January 2018.
/goo.gl/8nqHDm

Trading Charity at the Frankfurt Stock Exchange: acting and helping
Deutsche Bˆrse Group
Deutsche Bˆrse and specialists at the Frankfurt Stock Exchange are donating fees of 6 December to the Association Help for children with cancer Frankfurt eV and the Frankfurt Association for the fight against tumor diseases (FFBT) eV
/goo.gl/cfdbcb

LCH SwapAgent goes live with Cross-Currency Basis Swaps
LCH
Credit Suisse and Deutsche Bank conduct the first Cross-Currency Basis Swap processed through LCH SwapAgent; ICAP acts as interdealer broker for the first brokered trade in LCH SwapAgent; Extends efficiencies and infrastructure of clearing to the non-cleared Cross-Currency Basis Swap market; 14 dealers have already confirmed their support for LCH SwapAgent
LCH SwapAgent, a service for the non-cleared derivatives market, today announced that it has processed its first Cross-Currency Basis Swap. The first trade was conducted between Credit Suisse and Deutsche Bank and was a EUR/USD Cross-Currency Basis Swap. The trade was brokered by ICAP, which is part of TP ICAP group, and was processed through MarkitSERV.
/goo.gl/s5JCmT

LCH adds Belgian debt to repo clearing
Helen Bartholomew – Reuters
LCH has extended its repo clearing service to include Belgian government debt – part of an ongoing effort to enhance netting opportunities against existing cleared repo activities on the RepoClear platform.
reut.rs/2k7wNa3

HKEX Publishes Paper on Investor ID Model for Stock Connect Northbound Trading
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX) today (Thursday) published an information paper on an investor identification (investor ID) model for northbound trading through its mutual stock market access programmes with the exchanges in Shanghai and Shenzhen (Stock Connect).
/goo.gl/Qu28tB

ICE Endex announces results of European gas storage auction for GasTerra
iCE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced the results of the ICE Endex gas storage auction held on November 29 2017, on behalf of GasTerra.
/goo.gl/HwvtAL

Latam Swaps: Trends in IRS and NDF Data
Tod Skarecky – Clarus Financial Technology
I last looked at Latam swaps back in February this year, with the focus on Interest Rate swaps. We learned that both BRL and MXN swaps had migrated to a primarily cleared market at CME. We also then looked at CME margin requirements for these swaps and noted they were more expensive than similar USD swaps.
/goo.gl/K4kx9C

Singapore Exchange Aims for Faster Trade Settlement Next Year
Abhishek Vishnoi – Bloomberg
Plans to cut city’s trade cycle to two days from three; Move will bring it line with U.S., Europe and Hong Kong
Singapore Exchange Ltd. plans to speed up clearing and settlement of securities to reduce systemic risks and bring the island nation’s market in line with global standards.
/goo.gl/Mh5TMC

Hong Kong stock exchange likely to allow weighted voting rights-CEO
Reuters Staff
Hong Kong Exchanges & Clearing Ltd (HKEX) is likely to allow weighted voting rights, its chief executive said, as the Asia financial hub’s exchange operator looks to attract more new economy companies to remain a global listings powerhouse.
/goo.gl/CFZD1o

Bitcoin Mania: Even Grandma Wants In on the Action; The digital currency has gone from tech curiosity to mainstream topic, leading its value to jump more than 10-fold in 2017
Peter Rudegeair and Akane Otani – WSJ
Rita Scott’s grandson convinced her in mid-November to get in on the latest investing sensation and buy bitcoin. “I thought it was a big coin,” the 70-year-old said. “I didn’t even know what it was, a piece of coin? Why would I invest in a piece of coin?”
/goo.gl/w6sFM9

Dark pool trader Liquidnet pledges more AI use to boost portfolio performance; ‘We’ve evolved from being a simple dark pool operator into a global fintech player,’ says Seth Merrin, Liquidnet’s CEO and founder, boosted by its recent acquisition of Otas Technologies
Karen Yeung – South China Morning Post
Officials at Liquidnet say the US-based institutional “dark pool” trading operator has pledged to make even greater use of artificial intelligence in future, to provide more analytical information and increase the use of computer power to improve client portfolio performance.
/goo.gl/kqhgVN

Xavier Rolet’s replacement at the London Stock Exchange: Runners and riders
Jasper Jolly – City AM
Xavier Rolet is a tough act to follow: a strong strategic hand on the tiller at one of the City’s central financial institutions.
/goo.gl/NxXk3z

Alex Brummer: Day of long knives at the London Stock Exchange could not have come at a worse moment
Alex Brummer for the Daily Mail
Only Mark Carney and the Bank of England come out of the boardroom brawl at the London Stock Exchange with credit. The Bank has been keeping a close eye on the LSE ever since the disastrous merger with Deutsche Boerse was unveiled a year ago.
/goo.gl/GsszyW

China’s Dalian Exchange launches 24 single futures price indexes -media
Reuters Staff
China’s Dalian Commodity Exchange launched 24 single futures price indexes on traded agricultural and industrial products, state-backed media cnstock.com reported on Wednesday, citing the bourse, a step to boost China’s commodity derivatives market and attract private capital to futures trading.
/goo.gl/P5bTMd

Japan Exchange Group: Construction Of New Secondary Data Center
JPX
Japan Exchange Group, Inc. (JPX) has advancing discussions on the construction of a new secondary data center (backup center) based on the “Second Report of the Technical Committee on Exchange Transactions” published by the BCP Forum on April 20, 2017. JPX hereby announces its decision to build the new secondary data center in a location that is at a greater distance from the main data center to prevent simultaneous disruption in the event of disaster.
/goo.gl/hJdxb6

NEX’s Spencer Sees a ‘Long Way Down’ for Bitcoin After $20,000
Joe Easton – Bloomberg
NEX Group Plc Chief Executive Officer Michael Spencer, one of London’s best-known financial figures, said he sees bitcoin perhaps reaching $20,000 “but at some point it is going to go back — a hell of a long way back — down.”
/goo.gl/XQbdCp

World’s largest interdealer broker TP Icap grabs rival Coex Partners
Lucy White – City AM
Brokerage giant TP Icap, which was formed just last year in a £1.28bn deal, has hoovered up smaller Marylebone-based rival Coex Partners.
/goo.gl/xTaVhW

Board of the London Stock Exchange accuses activist fund of sabotaging Rolet’s succession
Lucy White – City AM
Xavier Rolet this morning said he will step down immediately (Source: Getty)
The board of the London Stock Exchange (LSE) has today accused activist hedge fund TCI of “damaging” the bourse’s reputation, through its efforts to reinstate outgoing boss Xavier Rolet.
/goo.gl/GkPSri

Fintech

Japan’s bitcoin exchange bitFlyer launches in the US; New York State Department of Financial Services grants virtual currency license to bitFlyer USA
Automated Trader
The New York State Department of Financial Services (DFS) has approved the application of bitFlyer USA for a virtual currency license. With the new DFS license, bitFlyer USA is approved to offer an online digital currency exchange and trading platform as well as provide custodial wallet services for the Bitcoin digital currency.
/goo.gl/nd3yHH

Bitcoin Goes to the Big Four: PwC Accepts First Digital-Currency Payment; PricewaterhouseCoopers said the payment for its advisory services was its first in a virtual currency
Steven Russolillo – WSJ
Accounting firm PricewaterhouseCoopers said it accepted a payment in bitcoin for its advisory services, its first in a virtual currency.
/goo.gl/oj3XB8

Barchart Launches Weekly Commodities Insights Report Series
Barchart.com
Barchart, a leading provider of market data and financial technology, announces the launch of the cmdtyInsights Commodities Weekly report series. The publication is directed at professional traders, analysts, marketers, and end-users participating in the physical and exchange traded commodity markets.
/goo.gl/YqU9Ks

Europe draws in nearly half of funds raised via initial coin offerings – report
Jamillah Knowles – Reuters
Nearly half of the cash that has poured into newly issued cryptocurrencies in recent years has been raised in Europe, research published on Thursday showed.
/goo.gl/CqKbWW

Bitcoin’s price is collapsing and people can’t trade because 2 big exchanges have crashed
Becky Peterson – Business Insider
Two of the biggest cryptocurrency exchanges, Coinbase and Gemini, crashed on Wednesday morning, making it impossible for many users to buy or sell digital currency; Coinbase said it saw “all-time-high traffic” that contributed to system outages; Bitcoin fell to about $9,000 on Wednesday after surging earlier to over $11,000.
Bitcoin on Wednesday dropped to about $9,200, from an all-time high of about $11,400, after many users found themselves locked out of two of the biggest cryptocurrency exchanges in the US.
/goo.gl/2Jd7x5

Bitcoin Is Sucking All the Oxygen
Tim Culpan – Bloomberg
With all this love for bitcoin, spare a thought for the little guy.Despite a plethora of new coins coming online in the past year, and the emergence of ethereum as an alternative cryptocurrency, bitcoin is still sucking up most of the oxygen.
/goo.gl/19kXk1

The 11 biggest names in cryptocurrency right now
Daniel Roberts – Yahoo Finance
Cryptocurrency has arguably never been hotter than it is right now. In November, the price of bitcoin topped $10,000 for the first time and is up about 1,000% this year, ethereum hit $500 for the first time and is up more than 5,000% this year, and litecoin hit $100 for the first time and is up more than 2,000% this year, to name just three of the highest market-cap digital coins.
/goo.gl/wNGi3x

This Is What Could Pop the Bitcoin Bubble
Luke Kawa – Bloomberg
Bitcoin and bubble have become virtually synonymous in the minds of many skeptics during this year’s breathtaking rally. While the digital currency has defied doomsday prophesies, there’s a number of ways this party could end badly for the swelling ranks of bulls.
/goo.gl/pYPXTV

Billions in bitcoins have been lost or deleted
Frank Chung – NY Post
Alex could have been a millionaire. In late 2009, when the digital cryptocurrency bitcoin was still in its infancy and a single PC could “mine” a few coins in a day, the self-described technology enthusiast “got into it just for fun”
/goo.gl/NnauTX

Politics

A moment of truth for our country’s financial future
Alan Simpson and Erksine Bowles – Washington Post
Seven years and almost $7 trillion in new debt ago, we released a bipartisan package of tax and spending reforms as co-chairs of the National Commission on Fiscal Responsibility and Reform. At the time, we declared that the era of deficit denial was over. Sadly, the debate on tax reform in the House and Senate suggests deficit denial is not only back but also stronger than ever. Yet the fundamental fiscal challenges we identified in 2010 remain.
wapo.st/2BwYMEm

Trump Ran for the ‘Forgotten.’ Then He Forgot Them.
Robert Kuttner – NY Times
How does President Trump continue to pass for an economic populist even as his policies and appointees are those of an economic royalist? The Republican tax plans he supports are a prime example: They favor corporations and upper-bracket individuals and rely on the long-discredited “trickle down” theory to offer benefits to workers.
/goo.gl/GzYnUV

Donald Trump is ‘trying to humiliate’ Theresa May with late night tweets
Independent
/goo.gl/Pngifg

SEC Nominees Face Delay as Democratic Senator Puts Up Roadblock; Sen. Tammy Baldwin says she needs answers on activist investors, stock buybacks before agreeing to fast-track votes
Dave Michaels – WSJ
A Democratic senator says she won’t agree to quickly confirm two nominees to the Securities and Exchange Commission until they outline their views on whether regulators should rein in activist investors, stock buybacks and executive pay.
/goo.gl/Qa49LZ

London Mayor: Trump Not Welcome After Retweeting ‘Vile’ Group
Kitty Donaldson and Thomas Penny – Bloomberg
May Urged to Cancel Proposed State Visit Hosted by Queen; U.K Lawmakers Call on Trump to Delete His Twitter Account
Donald Trump is persona non grata in Britain. Ever since Theresa May extended an invitation to the president to come visit the Queen, he has rankled the nation with his off-the-cuff comments about terror attacks in Britain and now with his latest provocation: the sharing of far-right videos and the lashing out against the prime minister for telling him he was wrong.
/goo.gl/WGgnB7

Regulation

CFTC Hits SchoolofTrade Fraudsters with $5 Million Fine
Aziz Abdel-Qadar – Finance Magnates
The US Commodity Futures Trading Commission (CFTC) announced today that it ?obtained a federal court order requiring Joseph Dufresne and Megan Renkow and their company to pay nearly $5 million in disgorgement and penalties for fraudulently marketing their trading educational program. ?
/goo.gl/AxfucE

Bond dealers RegTech spending tops $20 billion; New report finds RegTech spend will bring about compliance checks and improve tools for sales traders.
Hayley McDowell – The Trade
Fixed income dealers are now spending up to $20 billion on regulatory technology (RegTech) a year, according to research.
/goo.gl/FGH4A1

ASIC reports on cyber resilience assessments of financial markets firms
ASIC
An ASIC report on the cyber resilience of over 100 firms operating across Australia’s financial markets has shown a growing understanding of cyber risks, but there is still some progress to be made.
/goo.gl/C4jtzv

ASIC overview of licensing and professional registration – July 2016 to June 2017
ASIC
ASIC has today reported on its approach to and assessment of licence applications and professional registrations for the period July 2016 to June 2017.
/goo.gl/2zCSyV

ECB, ESMA and FSMA seek participants for Euro Risk-Free Rates Working Group
ESMA
The European Central Bank (ECB) has launched a call for expressions of interest to participate in the Working Group on Euro Risk-Free Rates for the euro area. The call is also issued on behalf of the European Securities and Markets Authority (ESMA), the Belgian Financial Services and Markets Authority (FSMA), and the European Commission.
/goo.gl/HC5aXF

ESMA publishes MiFID compliance function peer review results
ESMA
MIFID – INVESTOR PROTECTIONSUPERVISORY CONVERGENCE
The European Securities and Markets Authority (ESMA) has published the results of its Peer Review on the Guidelines on certain aspects of the compliance function under MiFID (Guidelines). The Guidelines cover national competent authorities (NCAs) supervision of investment firms’ compliance functions, particularly how those functions carry out risk assessments, monitor compliance obligations, report to senior management and fulfil their advisory role.
/goo.gl/AiFkRv

Purchase FINRA E-Learning Courses and Library Subscriptions
FINRA
FINRA’s e-learning library and individual courses offer training on a range of compliance topics, including anti-money laundering, variable annuities and ethics.
/goo.gl/KsASYf

FCA commences civil proceedings in relation to alleged misleading statements on pension investments
FCA UK
The Financial Conduct Authority (FCA) has commenced civil proceedings against Avacade Limited (in liquidation), trading as Avacade Investment Options, and Alexandra Associates (U.K.) Limited, trading as Avacade Future Solutions, and against Craig Lummis, Lee Lummis and Raymond Fox.
/goo.gl/1UeJTk

PPI campaign response update; We publish PPI campaign response data during months when we have had live advertising.
FCA UK
This data shows the numbers visiting our website, calling our helpline and contacting us on social media. The data provides useful insight into how many people our campaign has prompted to find out more about PPI via FCA channels. It also shows how satisfied they were with the services we provided.
/goo.gl/fxxgaH

Investing and Trading

Index IDEA: A tale of 16 markets
FTSE Russell Blog
When viewed from the eyes of an astronaut, the world may look very similar from country-to-county, continent-to-continent. And, similarly, when viewed through the lens of a broad global or regional index, individual countries may lose some of their distinct characteristics.
bit.ly/2BxRiRI

Navigating the Financial Side of a Relationship
Maria Teresa Hart – NY Times
Couples can fight about anything, it’s just a fact of relationships. But arguments about money have a tendency to be particularly toxic, since they’re layered with deep emotional and personal history.
/goo.gl/D4Ra9S

Lawsuit questions conduct of Madoff victims’ lawyer
Jonathan Stempel – Reuters
A new lawsuit accuses a lawyer representing hundreds of victims defrauded by Bernard Madoff of cheating her own clients through overbilling, discouraging settlements and having conflicts of interest.
/goo.gl/JPqMev

Bitcoin is ‘digital gold’ for millennials and could reach the ‘$100,000 range,’ says strategist Tom Lee
Berkeley Lovelace Jr. – CNBC
Bitcoin is essentially “digital gold” for millennials, and the cryptocurrency could easily achieve the $100,000 range, Wall Street strategist Tom Lee told CNBC on Wednesday.
/goo.gl/QbiwND

Investors Are Trying to Learn Things About Companies; But amateurs will still be at a disadvantage.
Matt Levine – Bloomberg
“Insider trading is not about fairness,” I often say; “it’s about theft.” It’s not a crime to know things that other people do not know, and to trade on your knowledge. In fact it is good. In fact it is the point of securities markets, or a point of them anyway: Society wants capital to flow to good projects and not to bad ones, and so we encourage people to work hard to get information about which projects are good and which are bad, and to buy the good ones and sell the bad ones.
/goo.gl/hJdTj4

Electricity Prices Plummet as Gas, Wind Gain Traction and Demand Stalls; Texas is a microcosm of pressures facing power generators; ‘It’s too late’ for coal
Erin Ailworth and Russell Gold – WSJ
The rapid rise of wind and natural gas as sources of electricity is roiling U.S. power markets, forcing more companies to close older generating plants.
/goo.gl/tWRK1f

Institutions

Fidelity Customers Blocked from Accounts by ‘Tech Issue’ on Website – MoneyBeat
Chris Dieterich and Sarah Krouse – WSJ
A technical error at Fidelity Investments on Wednesday morning blocked millions of customers from their online brokerage accounts.
For more than two hours, attempts to log in were met with an error message telling users that access to their accounts was “temporarily unavailable.” Around noon, an alert atop the website said that the issue had been resolved and urged investors to “please try again.”
on.wsj.com/2Bz7l1I

Credit Suisse Spares a Thought for Shareholders
Lionel Laurent – Bloomberg
Months after tapping shareholders for cash to bolster their creaking balance sheets, Europe’s investment banks are lining up to present themselves as brimming with excess cash. Some are even starting to talk about dividends and buybacks — heart-warming Christmas promises that not all may be able to keep.
/goo.gl/NGCxjB

Britain’s Oldest Investment Funds Are Going Back to Basics
Lukanyo Mnyanda – Bloomberg
‘There’s going to be a lot of wild cards,’ one manager says; Debt is out and Australian wine or Mexican airports are in
It’s a brave new world in global politics, but it’s back to basics at some of Britain’s oldest investment funds.
/goo.gl/EC7zZH

Credit Suisse vows to return 50% of profits to shareholders by 2019
Ralph Atkins, Laura Noonan – FT
Credit Suisse has vowed to give half its profits back to shareholders after the Swiss bank said its restructuring programme was on track and unveiled fresh cost cutting plans through to 2020.
/goo.gl/vv59sH

Regions

India Restores Faith in Capitalism; Handling bankruptcies right is key to reviving the credibility of India Inc.
Mihir Sharma – Bloomberg
According to one of India’s most respected bankers, it’s a once-in-a-lifetime opportunity — a mammoth sale of distressed assets, some $40 billion in the first round. Much could go wrong, of course, especially given that so many powerful interests have so much money at stake in the process. Fortunately, Prime Minister Narendra Modi’s government, which has stumbled in some of its biggest policy moves recently, appears to be handling this particular challenge with both agility and a sense of urgency. That mindset should now be carried over into other parts of the reform agenda.
/goo.gl/zLmwYh

Analyst bemoans China’s bond market rout to Jay Chou’s tunes, and strikes a chord with traders
Zheng Yangpeng – South China Morning Post
November had been the worst month in two years for Chinese bond traders, as a rout in the country’s market for sovereign debt and corporate notes caused transactions to shrink, reduced their fee income and even put jobs at risk.
/goo.gl/LHiRcu

Russia Plans First Sale of Yuan Bonds, Tapping Chinese Investors for Funds; Issuance of about $1 billion in dim-sum bonds could happen as early as next week
Manju Dalal and Saumya Vaishampayan – WSJ
Russia is planning to sell yuan-denominated sovereign bonds for the first time, as it looks to Chinese investors as a new source of funding during a period of strained relations with Western nations.
/goo.gl/KHN6Uk

The ongoing bitcoin boom is drawing Indian investors like never before
Nupur Anand – Quartz
Even conservative Indian investors can’t seem to resist the bitcoin price boom.
/goo.gl/mdDDwz

Europe’s Longest-Serving Bank Chief Isn’t a Bitcoin Believer
Boris Groendahl and Guy Johnson – Bloomberg
Europe’s longest-serving bank chief isn’t a bitcoin believer. Andreas Treichl, the 65-year-old chief executive officer of Austria’s biggest lender, Erste Group Bank AG, says that his kids think he’s “really stupid” when it comes to cryptocurrencies. “They think they could have made a lot of money and I didn’t allow them to invest in it,” Treichl said in an interview with Bloomberg Television.
/goo.gl/2yjTo8

Aberdeen Finds an Easier Place to Make Money and It’s Not China
Anna Edwards, Manus Cranny and Nupur Acharya – Bloomberg
Asia’s most expensive stock market is getting more love. While China remains a “huge opportunity,” it is India that takes the crown of the favorite emerging market for Standard Life Aberdeen Ltd., which held 670 billion pounds ($902 billion) in group assets at the end of June.
/goo.gl/kUW6n5

India cracks down on ‘promoter’ era of impunity; Swaggering behaviour of influential corporate figures highlights India’s bad loan crisis
Simon Mundy in Mumbai – FT
Billionaire tycoon Sajjan Jindal was in celebratory spirits last week, hitting Twitter with a string of posts extolling a new tightening of India’s corporate insolvency regime.
/goo.gl/H2zhZY

China’s people moved by the markets rather than party diktats; A lucrative service sector has challenged central planners’ hopes of controlling labour
Lucy Hornby in Beijing – FT
Planned economies attempt to control not only the “commanding heights” of industry but also the movement of their people. The transformation of China’s economy into the powerhouse it is today came about only after Chinese were allowed to leave subsistence farms for factories and cities.
/goo.gl/E79ont

Is China’s Central Bank Losing Its Monetary-Policy Mojo?; The gap between policy and market interest rates is widening, throwing up challenges for the PBOC
Shen Hong – WSJ
A widening gap between official and market interest rates in China is making it harder for Beijing to use a key policy tool to manage the world’s second-largest economy.
/goo.gl/Cu8Zex

Brexit

Brexit Cost Rises as Britain Retreats on Divorce Demands
Stephen Castle – NY Times
The proposition that Britain could have its cake and eat it during Brexit, as the foreign secretary Boris Johnson once said, was always dismissed as a fiction by opponents. On Wednesday, it was quietly interred by the government as it capitulated on the amount it will have to pay for a divorce settlement.
/goo.gl/FPGj9d

Migration Falls After Brexit Vote as EU Nationals Shun U.K.
Andrew Atkinson and Kitty Donaldson – Bloomberg
Net migration from EU accounts for three quarters of decline; Businesses say loss of foreign workers will harm U.K. economy
Net migration to the U.K. dropped by a record 106,000 in the year following the Brexit referendum as European Union nationals arrived in fewer numbers, a trend welcomed by some lawmakers and deplored by businesses.
/goo.gl/BWco3h

Record $19 Billion of Investment Suggests Europe Tech Is Doing Fine; But Brexit worries are significant in Atomico’s annual report on the state of the European tech industry
Nate Lanxon – Bloomberg
European startups are on pace to collect a record $19 billion from investors this year, despite concerns the U.K.’s departure from the European Union will weigh on the region’s technology industry, according to an annual report by the London-based venture capital firm Atomico.
/goo.gl/DoRqvp

Miscellaneous

Where Chicago Isn’t the Second City; Trains arrive on time, and the subway has 4G. This is the power of public investment.
William A. Galston – WSJ
Years of congressional dysfunction have shifted power into the executive branch, independent agencies and the courts. This horizontal shift has been accompanied by a vertical one, as states and localities take on greater responsibilities.
/goo.gl/e9Ts1A

Can Markets Save the West’s Most Controversial Bird?; A group of states are experimenting with cap-and-trade conservation.
Daniel Rothberg – Bloomberg
Agee Smith’s Cottonwood Ranch is tucked away in rural Nevada, about 450 miles from Las Vegas and not far from the Idaho border. The area is prime habitat for the greater sage grouse, an imperiled bird found in 11 western states. The male grouse is known for his eccentric mating danceóinvolving strutting, chest puffing and the inflation of two yellow air sacs on his neck.
/goo.gl/6edxbt

Farmers’ Bin Doors Are Locked, The Carry is Everything
By Ashley Davenport – Farm Journal
It might be pretty easy to turn your attention away from the markets as the holidays approach and more time is spent with family and friends, traveling or shopping. However, there could be a holiday market rally soon.
/goo.gl/Yi56rR

The post Nasdaq Plans To Launch Bitcoin Futures; Irish Stock Exchange sold to Euronext; Bitcoin roller coaster appeared first on John Lothian News (JLN).

First Read

Putting on My Broker Hat About Bitcoin
By John J. Lothian, JLN

Everyone is asking about bitcoin. A journalist called and asked to interview me. A magazine called and asked me to write something. A brokerage firm chief risk manager called to ask me my opinion about bitcoin and bitcoin futures. Two weeks ago, a former employer I have not seen in 10 years called me out in Coindesk.com for my bitcoin qualms. At the dinner table my son Robby opened up about owning not just bitcoin, but bitcoin cash, ether and monero. This is a full-fledged mania.

As I was driving home last night and thinking about bitcoin (as opposed to walking and thinking about it or sitting at my desk and doing the same), I asked myself what would John Lothian the broker think of bitcoin.

John Lothian the broker loved new products. He would often be the broker who first traded a new product at his firm or even clearing firm. He loved innovation and new markets and new customers coming to manage risk, or assume it.

However, John Lothian the broker was also John Lothian the risk manager. He was John Lothian, the customer default fund. By that I mean that when customers failed to meet margin calls or left uncollected debits, the funds would come from my commissions.

For the rest of the commentary, go HERE

++++

Hits & Takes

Intercontinental Exchange Chairman & CEO Jeffrey Sprecher will speak at the Goldman Sachs US Financial Services Conference on December 5 at 2:20 p.m. EST. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE’s website. The announcement can be found here.~SR

According to DataTrek, the new(ish) venture from Nick Colas, “In the US, Google searches for bitcoin are 6-7x greater than those for ‘Kim Kardashian.'” ~SD

The SEC has doled out some $176 million to whistleblowers since it started the program in 2012.~SD

FinTank is putting on CryptoCon 2018 in Chicago on February 15 at Northwestern. You can register here. The list of speakers and panelists is coming soon.~SD

One of the main costs associated with cryptocurrency mining is the electricity needed to do it. How to solve that problem? Build a crypto-mining rig in your Tesla automobile and take advantage of free electricity at Tesla charging stations. ~JB

“What’s the deal with volatility cones?” That’s (obviously) not a Seinfeld quote, but if you’ve ever thought it, check out this blog from Bantix – Understanding Volatility Cones.~SD

Yesterday’s JLN Options: VIX-Yield Curve – At the Door of High Volatility?; Limits of Pound Gains; Sector correlations.~JJL

Sixty-one stories in yesterday’s Asia Pacific Financial News from John Lothian News, November 30, 3017 edition.~JJL

++++

Key points from CFTC’s Quintenz at ISDA’s London event
Spencer Doar – JLN

CFTC Commissioner Brian Quintenz addressed ISDA’s Unlocking Value in Derivatives Markets conference in London yesterday and a few timely remarks were included (as well as some shout-outs to Galileo and Prometheus…).

Regarding the crypto elephant in the room

Of all the aspects of the Commodity Exchange Act (CEA), Quintenz brought up the provision that exchanges “may not list a contract that is readily susceptible to manipulation.”

Ink has already been spilled on how thin some of the closing cash auctions can be on the crypto exchanges which these prospective bitcoin futures contracts will use in determining the underlying’s price. With the above comment from Quintenz, it is clear this pricing mechanism is of some concern, regardless of today’s announcement from the CFTC.

Read the rest HERE.

++++

I’m a Depression historian. The GOP tax bill is straight out of 1929.
Robert S. McElvaine – Washington Post
“There are two ideas of government,” William Jennings Bryan declared in his 1896 “Cross of Gold” speech. “There are those who believe that if you will only legislate to make the well-to-do prosperous their prosperity will leak through on those below. The Democratic idea, however, has been that if you legislate to make the masses prosperous their prosperity will find its way up through every class which rests upon them.”
wapo.st/2kdnjtY

****SD: Ohhhh, at first I thought he was a historian of clinical depression…

NFA Board Update – November 2017 Meeting
NFA
NFA Vice-Chairman Maureen Downs and President Tom Sexton discuss highlights and other notable information from NFA’s November Board meeting, including NFA’s upcoming Long-Range Planning meeting and Board elections. The video is intended to keep NFA Members and the investing public apprised of the important topics discussed by NFA’s Board.
/goo.gl/UbFvu6

++++

Thursday’s Top Three
Our top three stories were led by Carl Gilmore’s column, Other Voices: An Open Letter on Bitcoin Futures. Second went to the Business Insider piece Jump Trading CTO Hunt departs in shakeup. Third went to Business Insider’s Coinbase, Gemini exchanges face issues as bitcoin surges past $11K

MarketsWiki Statistics Sponsored by Level Trading Field

113,372,183 pages viewed 22,929 pages 210,723 edits

Lead Stories

CFTC Opens Way to Bitcoin Futures; Regulator says it will allow launches by Chicago exchanges CME Group and Cboe Global Markets
Alexander Osipovich – WSJ
The U.S. Commodity Futures Trading Commission said it will allow two major Chicago exchanges to launch bitcoin futures.
/goo.gl/MprAQQ

****SD: Not to be lost – this includes Cantor Exchange’s bitcoin binary options, too.

CME Group to launch bitcoin futures contract on Dec. 18
Reuters Staff
CME Group Inc (CME.O) on Friday said it will launch its bitcoin futures contract on Dec. 18 to provide a regulated trading platform for the cryptocurrency futures market.
/goo.gl/rXUtFZ

Brexit May Leave Banks on the Hook for Impossible Contracts
John Glover – Bloomberg
Bankers, Carney highlight risks as derivative exposure flees; Arguing Brexit made contract illegal no defense, lawyers sayr.
As far as Brexit headaches go, Barclays Plc’s John McFarlane says that while his bank is on top of job relocations, he’s more concerned about rewriting “hundreds of thousands” of contracts.
/goo.gl/3ZatmL

Coinbase ordered to give the IRS data on users trading more than $20,000
Taylor Hatmaker -TechCrunch via Yahoo
Coinbase ordered to give the IRS data on users trading more than $20,000
Most digital currencies exist in a sort of twilight state just beyond the grasp of federal regulators, but the U.S. tax authority is starting to get savvy to this whole bitcoin thing.
/goo.gl/8Pv3Mo

Goldman’s Blankfein voices prospect of being replaced by co-chiefs; Contest to succeed Wall Street bank’s head is one of the most keenly watched in finance
Ben McLannahan in New York – FT
Lloyd Blankfein has held out the prospect of being replaced by co-chief executives at Goldman Sachs, suggesting that the Wall Street bank is contemplating a break from the structure in place for the past 18 years.
/goo.gl/K1yPSY

CME Group Self-Certifies Bitcoin Futures to Launch Dec. 18
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it has self-certified the initial listing of its Bitcoin futures contract to launch Monday, December 18, 2017.
/goo.gl/cwxfDQ

Alarm Bells Are Sounding Over Gigantic Run-Up in Momentum Stocks
Aleksandra Gjorgievska – Bloomberg
Morgan Stanley, JPMorgan say trade could be getting stretched; Rotation between stock winners/laggards becoming more frequent
One of the most lucrative strategies in stock investing this year may be heading for a pause.
/goo.gl/dmPUaX

VIX-Yield Curve: At the Door of High Volatility?
Erik Norland – CME Group
We freely admit: Figure 1 is probably the strangest chart that you will ever see, at least in finance. You may be wondering: did they throw blue spaghetti noodle on paper for inspiration and then write an economics article about it? Or, have they spent too much time with disciples of psychologist Timothy Leary, a proponent of experimenting with psychedelic drugs?
/goo.gl/2xXbRL

Bitcoin could threaten financial stability: Fed governor
Channel News Asia
Digital currencies like bitcoin could pose a threat to financial stability as they gain wider use, a chief Federal Reserve banking oversight official said on Thursday (Nov 30).
/goo.gl/5XVt2c

SEC Changes Hiring Process for In-House Judges to Address Legal Concerns; Agency says commissioners will appoint judges directly to allay worries about their legitimacy
Dave Michaels – WSJ
A gambit by the Securities and Exchange Commission to bring more enforcement actions through its in-house courts has partly backfired.
/goo.gl/6Lsz6Q

Goldman eschews bitcoin but wants to help clients crypto-trade
Olivia Oran – Reuters
Goldman Sachs Group Inc (GS.N) is trying to figure out how to cater to investors who want to trade bitcoin even though the digital currency remains too volatile for the Wall Street bank to trade itself, according to comments by a representative and its chief executive officer on Thursday.
/goo.gl/oyZ1TP

US finance leaders are least likely to embrace bitcoin, and some see a fraud: CFO survey;
Anthony Volastro – CNBC
Bitcoin could very well be the investing story of 2017, with its meteoric rise in price (up more than 1,100 percent year-over-year, according to Coinbase). Comments from billionaires and business barons who have called it a bubble ó including Jamie Dimon, Jack Bogle, Warren Buffett and Mark Cuban ó haven’t deterred believers. And you can add to the doubters’ list another group of big-name market skeptics.
/goo.gl/k2ZvwP

Trump Plans to Nominate Fifth Third’s Top Lawyer to Lead Key Banking Regulator
Jesse Hamilton – Bloomberg
Jelena McWilliams would run a key U.S. banking regulator; She would succeed FDIC Chairman Gruenberg, an Obama appointee
President Donald J. Trump plans to nominate Fifth Third Bancorp’s top lawyer to lead the Federal Deposit Insurance Corp., a key banking regulator that has been run by a Barack Obama-appointee throughout Trump’s first 11 months in office.
/goo.gl/6rKd5y

Electricity Prices Plummet as Gas, Wind Gain Traction and Demand Stalls; Texas is a microcosm of pressures facing power generators; ‘It’s too late’ for coal
Erin Ailworth and Russell Gold – WSJ
The rapid rise of wind and natural gas as sources of electricity is roiling U.S. power markets,
/goo.gl/tWRK1f

Exchanges, OTC and Clearing

Cboe Submits Product Certification for Bitcoin Futures
Cboe
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced that Cboe Futures Exchange (CFE) has filed a product certification with the Commodity Futures Trading Commission (CFTC) to offer bitcoin futures trading. The product certification is subject to regulatory review.
/goo.gl/6fWQXF

Cboe selects big xyt’s Liquidity Cockpit; Cboe deploys Liquidity Cockpit to track execution quality and LIS trading activity in line with ESMA thresholds
Automated Trader
Big xyt, the independent provider of smart data and analytics capabilities, has announced that Cboe Europe Equities is using its Liquidity Cockpit, designed to give global trading and investment firms enhanced visibility over dark and lit liquidity, and the ability to navigate and analyse European market share across a market landscape in transition.
/goo.gl/KhzEoX

Cboe Reports Increasing Usage of New Complex Order Options Functionality
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, has announced increasing usage of complex order functionality on its Cboe EDGX Options Exchange, one month after the new technology was launched.
/goo.gl/vbWHfu

Stock Exchange of Thailand trades domestic clouds for international providers
Melissa Chua – Asia Cloud Forum
The Stock Exchange of Thailand (SET), Thailand’s center for securities trading, began using the cloud’s compute power four years ago, primarily to enhance the stability of its stock trading platform.
/goo.gl/jJ4EVH

OCC News – November 2017
OCC
Dave Hoag, Chief Information Officer, shares his insights into the impact technology has on the exchange-listed options industry; OCC Celebrates 25 Years of OIC Educating Options Investors; OCC and EquiLend Clearing Services Bringing Greater Access to Central Clearing in Securities Financing and more.
/goo.gl/GjB2dm

London Stock Exchange sets out defence of its chairman; Activist investor TCI presses on with efforts to oust Donald Brydon
Philip Stafford – FT
The London Stock Exchange has set out a defence of its chairman Donald Brydon after an activist investor, the Children’s Investment Fund, said it would press on with efforts to oust him.
/goo.gl/2EGCYA

Euronext acquires 100 percent of Irish Stock Exchange in ‘strategic’ move
CNBC
Pan-European exchange Euronext has announced its acquisition of 100 percent of the Irish Stock Exchange (ISE) for EUR137 million ($162.48 million).
/goo.gl/PGmUjP

TP ICAP scoops up UK rival
Philip Stafford – FT
TP ICAP, the world’s largest interdealer broker, has returned to the acquisition trail by scooping up smaller UK rival Coex Partners.
/goo.gl/5skXmf

SGX: Listed Products Daily Turnover In November Averaged S$97 Million
SGX
In the month of November, SGX listed Structured Warrants, Daily Leverage Certificates (DLCs) and Exchange Traded Funds (ETFs) generated a combined daily average turnover of S$97 million with Structured Warrants contributing S$74 million (+163% Y-o-Y) of the total.
/goo.gl/Wqka38

Japan Exchange Group released Trading Overview in November 2017
Japan Exchange Group
Cash Equity Market – In November 2017, the daily average trading value for the TSE 1st Section (domestic common stocks) reached JPY 3.6648 trillion, a high in 2017.
Derivatives Market – In November 2017, total derivatives trading volume reached 38,131,495 contracts, a high since January 2016 and the highest record for November.
/goo.gl/q6nexb

At EUR 154.2 billion, cash markets posted their highest turnover since March 2015; Increase of 24 percent over the previous year
Deutsche Bˆrse Group
With a turnover of 154.2 billion euros in November, the highest turnover since March 2015 was achieved on the cash markets of Deutsche Bˆrse. In November 2016, sales still amounted to EUR 124.7 billion.
/goo.gl/Cg39yg

Markets watchdog investigates D. Boerse’s handling of new CEO hire
Reuters Staff
Germany’s financial markets watchdog BaFin is questioning Deutsche Boerse over how it communicated the appointment of Theodor Weimer as chief executive, the regulator said on Friday.
/goo.gl/Q3zfge

trueEX and Markit settle legal dispute; trueEX initially sought legal action taken following Markit’s decision to prohibit access to its trade processing service, MarkitSERV.
Hayley McDowell – The Trade
US interest rate swaps trading venue trueEX has settled a legal dispute with Markit after it sought legal action against the firm for anti-competitive reasons earlier this year.
/goo.gl/Gd9X8i

Thomas Book: “Our Total Return Futures are a real-life example of futurization.”
Eurex
One year ago, Eurex launched EURO STOXX 50Æ Index Total Return Futures. We talked to Thomas Book, CEO of Eurex, about this successful product, which offers returns analogous to Equity Index Total Return Swaps, thus representing a functional replacement for these OTC instruments.
/goo.gl/43T6qb

Liquidity Provider schemes 2018: Product Specific Supplements to the Liquidity Provider Agreement
Eurex
With the introduction of the contractual framework for Liquidity Provisioning at Eurex Deutschland and Eurex Z¸rich AG (together: the Eurex Exchanges) and Eurex Frankfurt AG, the existing, commercial Market-Making schemes will be converted into Liquidity Provider schemes as of 1 January 2018.
/goo.gl/4wHHBY

Regulatory Market-Making and Liquidity Provisioning: Implementation details
Eurex
With Eurex circular 102/17, Eurex Deutschland and Eurex Z¸rich (collectively: the Eurex Exchanges) have announced the introduction of Regulatory Market-Making and the introduction of the Eurex Liquidity Provider Framework.
/goo.gl/LVL4ev

HKEX to Revise Strike Intervals for its Most Actively Traded Stock Index Options
HKEX
Revise strike intervals for HSI, Mini-HSI, HSCEI and Mini-HSCEI options from 22 January 2018; Aim to give investors more choices for trading
Hong Kong Exchanges and Clearing Limited (HKEX) announced that it will revise the strike intervals for its four most actively traded stock index options contracts – Hang Seng Index (HSI) Options, Hang Seng China Enterprises Index (HSCEI) Options, Mini-HSI Options and Mini-HSCEI Options – from Monday, 22 January 2018 (details are shown in the table below).
/goo.gl/PUXXQi

Fintech

Machines ‘beat humans’ for a growing number of tasks; The AI Index attempts to assess overall impact of artificial intelligence
Richard Waters in San Francisco – FT
Artificial intelligence is getting close to or beating humans on a growing number of yardsticks, according to one of the first attempts to assess the overall impact of AI.
/goo.gl/deT3bC

Looking Back
Blue Trading Systems News, Events, and Highlights
As the holidays approach, we reflect on an eventful and productive 2017. Conversations with a diverse group of potential customers we met at various industry events revealed new market opportunities and began what we hope will be several mutually beneficial relationships. We adapted our strategy accordingly, broadening our focus, which has traditionally concentrated on options trading, to include futures and introduced our new product, BTS Spark.
/goo.gl/sZeojM

Money.net now has more than 80,000 subscribers
Kevin Dugan – NY Post
Money.net, an online platform for financial data and news, says it has grown its ranks of subscribers to more than a quarter the size of industry behemoth Bloomberg’s.
/goo.gl/6sVjcC

The CIO of a crypto hedge fund explains the value in cryptocurrency ó and why the market will explode over the next 2 years
Jacqui Frank, Kara Chin and Trevor N. Cadigan – Business Insider
Ari Paul, CIO of cryptocurrency hedge fund BlockTower Capital, talks with Business Insider executive editor Sara Silverstein about the value in cryptocurrency and where he thinks the market is headed in the next two years. Following is a transcript of the video.
/goo.gl/PmPEHQ

There are many reasons to be cautious about bitcoin; The craze for initial coin offerings ignores financial fundamentals
Jean Tirole – FT
The current craze for cryptocurrencies seems boundless. The dollar value of bitcoin has been multiplied by 10 since the beginning of the year, and by 30,000 since January 1 2011. “Initial coin offerings”, through which companies finance themselves by issuing “tokens” (cryptocurrencies newly minted for the occasion), have raised $3.5bn so far this year. We should be cautious of this trend: investors must be protected and regulated banks, insurance companies and pension funds should be prevented from building exposures to these instruments.
/goo.gl/3vp1UB

Politics

It’s War, and the Washington Post Knows It
Francis Wilkinson – Bloomberg
The Washington Post exposed a fraud this week, which is not particularly remarkable. But there was something unusual about it. Leading institutions of the American press sometimes behave as if they soar so high above the antics of partisan buffoons — is that a gutter I spy way down there? — that it’s hardly worth acknowledging their existence, let alone their tactics.
/bloom.bg/2kdTlG4

Legislators ponder cybersecurity of market auditing system
BY JOE UCHIL – The Hill
Members of the House Financial Services Committee mulled concerns over cybersecurity and the pace of development for a consistently delayed project to bolster Wall Street records collection during a hearing Thursday.
/goo.gl/DQoPch

Corbyn lashes out at financial sector ‘speculators and gamblers’; UK Labour leader singles out Morgan Stanley and warns he is a ‘threat’ to big banks
Jim Pickard, Chief Political Correspondent – FT
Jeremy Corbyn has labelled the financial sector “speculators and gamblers who crashed our economy”, warning global banks that operate out of the City of London that he would be a “threat” to their business if he became prime minister.
/goo.gl/xB9qKX

Trump puts talks to boost China economic ties on ice; Treasury’s David Malpass says Beijing is not liberalising economy as hoped
Sam Fleming in New York and Shawn Donnan in Washington – FT
Donald Trump’s administration has put its main programme for bolstering economic relations with China on ice as it complains about the two countries’ swollen trade imbalance, and says Beijing’s efforts to liberalise its economy have gone into reverse.
/goo.gl/mgZrfy

How Donald Trump uses tribal loyalty to drive economic optimism; Democrats beware: it might not be ‘the economy, stupid’ after all
Gillian Tett – FT
At least two big questions about tax are convulsing Washington DC this week. One is what type of tax reform bill might eventually squeak its way through Congress. The other is whether this bill will offer sweeteners to maintain voter support for President Donald Trump.
/goo.gl/Sh2taQ

Regulation

CFTC Statement on Self-Certification of Bitcoin Products by CME, CFE and Cantor Exchange
CFTC
Today, the Chicago Mercantile Exchange Inc. (CME) and the CBOE Futures Exchange (CFE) self-certified new contracts for bitcoin futures products, and the Cantor Exchange (Cantor) self-certified a new contract for bitcoin binary options.
/goo.gl/wtYiW3

SEC Charges Florida Penny Stock Operators With Defrauding Elderly Investors in Push to Crack Down on Repeat Offenders; Miami Office’s Recidivist Initiative Nets 23 Enforcement Actions to Date
SEC
The Securities and Exchange Commission today charged two individuals with defrauding elderly investors in a penny stock scheme involving Florida entertainment companies and their “Spongebuddy” product. The charges are part of the Miami Regional Office’s Recidivist Initiative which has thus far resulted in enforcement actions against 23 individuals, nine of whom also have been charged by criminal authorities.
/goo.gl/pji5Co

Division of Corporation Finance Chief Accountant Mark Kronforst to Leave SEC
SEC
The Securities and Exchange Commission today announced that Mark Kronforst, Chief Accountant of the SEC’s Division of Corporation Finance, plans to leave the SEC in early January after 13 years of public service with the investor protection agency.
/goo.gl/GKMWQi

More Than $16 Million Awarded to Two Whistleblowers
SEC
The Securities and Exchange Commission today announced awards of more than $8 million each to two whistleblowers whose critical information and continuing assistance helped the agency bring the successful underlying enforcement action.
/goo.gl/tWqA1i

SEC Ratifies Appointment of Administrative Law Judges
SEC
The Securities and Exchange Commission today announced that it has ratified its prior appointment of Chief Administrative Law Judge Brenda Murray and Administrative Law Judges Carol Fox Foelak, Cameron Elliot, James E. Grimes, and Jason S. Patil.
/goo.gl/1k5pCH

SEC short-selling focus snares Millennium over lapse in simple rule
Todd Ehret – Reuters
U.S. securities regulators on the lookout for manipulative trading violations have gotten very good at uncovering them, and firms must be on their guard to prevent infractions. This was evident last week when the U.S. Securities and Exchange Commission (SEC) settled a case that involved short-selling in stocks of companies planning follow-on secondary offerings and then illegally purchasing shares in the offerings.
reut.rs/2BzczdH

US Department Of Justice: Russian Cyber-Criminal Sentenced To 14 Years In Prison For Role In Organized Cybercrime Ring Responsible For $50 Million In Online Identity Theft And $9 Million Bank Fraud Conspiracy
Mondovisione
A Russian cyber-criminal was sentenced today to 14 years in prison for his role in a $50 million cyberfraud ring and for defrauding banks of $9 million through a hacking scheme.
bit.ly/2kdg3ye

CFTC Staff Grants Time-Limited Extension of Swap Data Reporting Relief for Certain Swap Dealers and Major Swap Participants Established under the Laws of Australia, Canada, the European Union, Japan or Switzerland
CFTC
The Commodity Futures Trading Commission’s (CFTC) Division of Market Oversight (Division) today extended relief it provided certain CFTC-registered swap dealers (SD) and major swap participants (MSP) in November 2016 (CFTC Letter No. 16-79).
/goo.gl/9gti2t

ASIC bans Bell Potter Securities Ltd trader Damien Rodr from providing financial services
ASIC
ASIC has banned Mr Damien Rodr, of Sydney, from providing financial services under s920A of the Corporations Act following an ASIC investigation into trading in the shares of DirectMoney Ltd (‘DirectMoney’; ASX code: DM1).
/goo.gl/fHmZnT

Big U.S. banks in last-ditch push on regulatory relief bill
Pete Schroeder, Michelle Price, Olivia Oran – Reuters
Wall Street banks and big regional lenders are scrambling to secure changes to a U.S. Senate bill easing rules on smaller banks ahead of a key lawmaker meeting next week, several bank lobbyists told Reuters.
/goo.gl/pfvdrZ

Uncle Sam is coming after your bitcoin gains
Anora M. Gaudiano – MarketWatch
A judge’s ruling in favor of the U.S. Internal Revenue Service in its suit against Coinbase, a cryptocurrency exchange, once again proves that death and taxes are about the only certain things in life.
/goo.gl/sFKFuk

Verena Ross Keynote Address at ASIFMA Annual Conference 2017
ESMA
Verena Ross, ESMA Executive Director, gave a keynote address at the ASIFMA Annual Conference 2017 in Hong Kong. The two-day conference is one of the largest fora to discuss issues influencing the development of Asia’s capital markets.
/goo.gl/Jwttyt

Podcast: CFTC Talks EP019 CEA Chairman Kevin Hassett
CFTC
This week on CFTC Talks, we bring on Chairman of the Council of Economic Advisors, Kevin Hassett. We discuss what tax…
/goo.gl/rvkpCZ

Investing and Trading

The 12 Signs a Cheap Stock Is a ‘Value Trap’; Stocks that look cheap may never substantially rebound.
Nicholas Colas – Bloomberg
The historically high price-to-earnings ratios being placed on equities today make cheap stocks even more alluring. That makes sense, but be advised that the market is littered with “value traps” — stocks that look cheap but never substantially rebound.
/goo.gl/JMXuAW

Bitcoin is already dwarfing some of the largest financial market bubbles of all time
Patti Domm – Business Insider
Bitcoin already has the look of one of the biggest financial market bubbles of all time.
/goo.gl/iTc3Us

Bitcoin craziness spreads to Overstock, Square
Matt Egan – CNN
Bitcoin insanity is invading far-flung corners of the stock market.
/goo.gl/uWdVn5

Bubble, Bubble, Bitcoin Trouble? More Popular Than Kim Kardashian, Bigger Than Mexico
Crystal Kim – Barron’s
The price of bitcoin hasn’t recovered since it hit above $11,000 Wednesday and is now trading hands around $9,400 and falling, based on CME Group’s (ticker: CME) Bitcoin Real Time Index. Meanwhile, the Bitcoin Investment Trust (GBTC) is down more than 7% so far Thursday, according to Morningstar.
/goo.gl/AWzCHy

Cryptocurrencies could be worth ‘trillions of dollars,’ top VC says
Arjun Kharpal – Business Insider
Cryptocurrencies have a high chance of being worth trillions of dollars in the future, according to one top venture capitalist.
/goo.gl/8o25Gr

Vanguard Founder Jack Bogle Says ‘Avoid Bitcoin Like the Plague’
Nico Grant – Bloomberg
Bitcoin has been on a spree, but legendary investor Jack Bogle doesn’t think you should pull your money from the S&P 500 just yet.
/goo.gl/Egh3B2

MIT Study Suggests U.S. Vastly Overstates Oil Output Forecasts
Jim Polson and Tim Loh – Bloomberg
Estimates from EIA exaggerate impact of fracking technology; New well output could undershoot EIA forecasts by 10% in 2020
Turns out, America’s decade-long shale boom might just end up being a little too good to be true.
/goo.gl/S8ZCQe

This Six-Man Biotech Firm’s Stock Has Jumped 2,000% in Three Days
Joe Easton – Bloomberg
Shares of a tiny biotech firm with six employees in a business park in Oxford, England, have risen about 2,000 percent in three days.
/goo.gl/EGqU4H

Institutions

Banks with better capital will not stifle investment and growth
From David Miles, Professor of Financial Economics, Imperial College – Letter to FT
Sir, Your reports on the Bank of England stress tests repeatedly speak of banks being told to “hold” more capital (“BoE tells banks to hold extra £6bn as buffer against disruption”, November 29). The reports also talk of capital buffers as being “?.?.?.?intended to force lenders to put aside more capital?.?.?.” Lombard (November 29) adds to the impression, saying the Bank is “?.?.?.?demanding that lenders hold an extra £6bn in capital?.?.?.?”
/goo.gl/SC35FR

U.S. regional banks delve deeper into advisory services to boost growth
Sweta Singh – Reuters
Squeezed by lower loan growth as interest rates finally begin to rise, regional U.S. banks have been giving more financial advice to mid-sized companies and affluent Americans to drive revenue growth.
/goo.gl/5qkTpz

Legg Mason launches ‘cutting edge’ parental leave plan; Men and women in asset manager’s US workforce offered three months paid in full
Attracta Mooney and Jennifer Thompson – FT
Legg Mason will offer both men and women across its US workforce three months of fully paid parental leave from January as the $755bn New York-listed investment manager attempts to improve workplace equality.
/goo.gl/6nSfGf

Regions

Cradle of Cryptocurrency: Digital Money and Africa
Simon Golstein – Finance Magnates
Yesterday, the price of one bitcoin hit $10,000 for the first time, which was big news in the West. However two weeks earlier, while the coin was trading at around $8,000 at most exchanges, it had actually reached $14,000 in Zimbabwe as political crisis and economic turmoil caused people to turn to Bitcoin as a safe haven asset lest their savings be wiped out by hyperinflation.
bit.ly/2Bz9lXD

Chinese Pump Record Cash Into Hong Kong Stocks as Rally Teeters
Emma Dai and Kana Nishizawa – Bloomberg
Net inflows top $10 billion in November to fuel Hang Seng; Funds may take profit toward end of year: First Shanghai
Chinese investors have driven Hong Kong’s stock surge in November, buying a record amount of equities in the city even as concern grows that the rally is starting to lose momentum.
/goo.gl/pNzXYz

Australian Banks’ U-Turn on Misconduct Probe Is Bid to Cut Risk
Emily Cadman – Bloomberg
Government sets up Royal Commission into alleged failings; Tight deadlines, strict terms may limit potential damage
If you can’t beat ’em, join ’em. That’s the calculation Australia’s biggest banks and the government have made in deciding to cave in to pressure for a public inquiry into alleged misconduct in the financial industry.
/goo.gl/dqg9pn

Indian stock market overtakes Canada, becomes world’s eighth-biggest
Financial Express
India is now home to the world’s eighth-biggest stock market, overtaking Canada for the first time in almost a decade.
/goo.gl/azNgey

Renminbi global transactions share at multiyear low; Beijing’s ‘heavy-handed intervention’ in markets erodes currency’s international appeal
Roger Blitz in London and Hudson Lockett in Hong Kong – FT
China’s hopes of achieving global acceptance for the renminbi have been set back by data showing the share of international transactions in its currency at its lowest level in more than three and a half years.
/goo.gl/a3ENpV

Invest in Bitcoin ‘At Your Own Risk,’ Bank of France Says
Fortune
Bitcoin is a speculative asset and people who invest in it do so at their own risk, the Bank of France Governor Francois Villeroy de Galhau warned on Friday after recent volatile trading.
/goo.gl/1fGTdK

China’s AI dreams stymied by shortage of talent, with the US home to lion’s share of experts; Not only does the US lead in AI academic research, it has almost twice as many AI start-ups than China
Celia Chen – South China Morning Post
China is suffering from a serious shortage of qualified people to staff its ambitions to become a leader in artificial intelligence, part of a global mismatch as countries employ advanced computing sciences to drive the next stage of growth, according to a report released Friday.
/goo.gl/hSspRL

China banking regulator targets ‘invisible shareholders’
Gabriel Wildau – FT
China’s banking regulator is preparing new rules to forbid “invisible shareholders”, a response to the widespread use of shell companies and proxies to disguise the true owners of major Chinese banks and other companies.
/goo.gl/DdYH8W

Cold Blast Headed for Europe Won’t Faze a Very Warm 2017
Rachel Morison and Kelly Gilblom – Bloomberg
December forecast to be coolest since 2010 despite warm tail; Power, gas markets to be well-supplied unless cold is extreme
Europe’s coldest December for seven years is unlikely to derail what will probably be one of the warmest years on record.
/goo.gl/cwGd5U

Recep Tayyip Erdogan Allowed Turkish Banks to Help Iran Make Illegal Payments, Witness Says; Reza Zarrab’s testimony in trial of banker could further strain U.S.-Turkish relations
Nicole Hong – WSJ
A U.S. government witness said Thursday that Turkish President Recep Tayyip Erdogan had approved an alleged scheme to help Iran circumvent U.S. sanctions, testimony that threatens to further strain relations between the two North Atlantic Treaty Organization allies.
/goo.gl/jMgxUH

Brexit

Sweden Extends Post-Brexit Trade-Deal Olive Branch to the U.K.
Nick Rigillo – Bloomberg
Trade Minister Linde offers ‘Canada plus plus plus’ deal; Sweden still not happy with May’s promise on divorce bill
Sweden has made a post-Brexit peace offering to the U.K. by proposing an extensive free-trade agreement between the European Union and Britain that also covers financial services.
/goo.gl/QTbJJK

U.K. Backs Away From Monday Dec. 4 Deadline for Brexit Progress
Tim Ross – Bloomberg
Prime Minister’s office says working towards Dec. 14 summit; EU says it will assess U.K.’s Brexit offer on Dec. 6
The U.K. is pushing back against European Union demands to make a better offer on its divorce terms by Monday Dec. 4, amid signs that any breakthrough in Brexit talks is at risk.
/goo.gl/FAPm4s

EU Reaches First Brexit Compromise in Carbon Market Plan
Ewa Krukowska, Mathew Carr and Ian Wishart – Bloomberg
Member states approve measure to shield EU cap-and-trade; Regulation addresses U.K. concerns, protects emissions market
The European Union and the U.K. reached the first compromise on Brexit in vote on a contingency plan for the world’s biggest emissions market.
/goo.gl/wN32HQ

Brexit arrives early in Frankfurt property market; Big rise in demand for office space as financial businesses firm up relocation plans
Claire Jones and Olaf Storbeck in Frankfurt – FT
Bankers have strolled along Marienstrasse, a side street off one of the main arteries of Frankfurt’s financial district, since the 19th century. Back then they hailed from the Brentano family; soon they will come from Goldman Sachs.
/goo.gl/kcsfRh

Miscellaneous

Can Wikipedia’s Jimmy Wales fix the news?
FT
Traditional media is broken, the tech entrepreneur says. But will his new reader-funded service be any better?
/goo.gl/pGwbxh

The post CFTC Opens Way to Bitcoin Futures; More Bitcoin; Brexit May Leave Banks on the Hook for Impossible Contracts appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

The “Putting on my broker hat about bitcoin” commentary by John Lothian had 1778 views on LinkedIn since it was published Friday. ~JJL

The @JohnLothian twitter handle had 46,664 organic impressions on Friday. ~JJL

The story by John Lothian, “FANG+ Puts the UMPH Back into the Markets and Exchange Competition” had 16,605 impressions on Twitter so far and is @JohnLothian’s top tweet of the last month. ~JJL

CME Group is offering a webinar on “The ABC’s of Spread Trading with Futures” on Tuesday, December 12 from 11:00 a.m. to 12:00 p.m. CT. You can register for the webinar here. ~SR

Cboe set a VIX options volume record on Friday when 3.1 million contracts were traded. The previous daily record was 2.6 million contracts. ~SD

The Moscow Exchange will host a Russia investment forum on Dec 6 in London. ~JJL

Question: When bitcoin futures hit the 20% price limit, do the underlying exchanges have the bandwidth to take the extra potential volume? ~JJL

++++

A New Exchange, a Different Asset Class and a Hearty Dose of Blockchain
Spencer Doar – JLN

Want to see a proper use case for the ever-buzzworthy blockchain?

Look no further than the New York Interactive Advertising Exchange (NYIAX), an exchange for guaranteed advertising contracts that runs on Nasdaq’s technology and deploys the blockchain to track trades, positions and, in the end, streamline reconciliation. On October 10, NYIAX’s product went live and the exchange continues to line up publishers and advertisers to use the platform. Then on October 19, NYIAX announced it had raised $5.6 million in seed capital to support its growth.

“One of the things that excites us the most is that we have intellectual property with Nasdaq that is a long term relationship. It’s not just intellectual property for the advertising industry,” Carolina Abenante, NYIAX’s president and co-founder said. “There are certainly markets that we’re interested in potentially expanding our technology to help with those industries.”

Read the rest HERE.

++++

The CMW Group Loses Irreplaceable Talent With Kim Taylor’s Retirement
Jessica Darmoni – The Title Connection
My friend Kim announced her retirement from the CME Group on Friday, Dec 1. When I first heard the news, my initial thought was that the CME will lose an irreplaceable and unparalleled talent. As one of the most powerful women in the capital markets, Kim taught me that gender doesn’t matter but rather it’s your hard work that sets you apart.
/goo.gl/zQTdMX

***** I could not agree more with Jessica. Kim Taylor is one of a kind. ~JJL

++++

The Cost of Devaluing Women
Sallie Krawcheck – NY Times
My first job out of college in the late 1980s was at Salomon Brothers, a trading house of cigar-smoking, expletive-spewing strivers. One day, I leaned over a colleague’s desk to work on a spreadsheet, and heard loud laughter from behind me; one of the guys was pretending to perform a sex act on me. Almost every day, I found a Xerox copy of male genitalia on my desk.
/goo.gl/swEWuF

****** Sallie Krawcheck with a story you must read. ~JJL

++++

New Whitepaper from Trading Technologies: TT Score -Trade Surveillance with Machine Learning
Trading Technologies
One of the biggest challenges that both regulators and compliance staff face is consistently ensuring that the market participants they supervise stay fully compliant with current market regulations.
/goo.gl/2Ux3ig

****** “Fully compliant” is a funny term. ~JJL

++++

Bitcoin, EFRPs, Wash Sales, Spoofing
Gary DeWaal – Bridging the Week
After a week of significant volatility, Bitcoin moved a step closer to mainstream acceptance as three exchanges regulated by the Commodity Futures Trading Commission self-certified on December 1 new cash-settled derivatives contracts tied to prices on spot Bitcoin markets. The CFTC declined to stop the self-certifications despite acknowledging, “there are concerns about the price volatility and trade practices of participants in these markets.” According to the Commission, the three exchanges agreed to “significant enhancements” in their original proposals to address the concerns. Separately, CME Group exchanges brought and resolved disciplinary actions involving claims of wrongful trading practices.
jlne.ws/2jM4Rop

++++

Friday’s Top Three
Our top read story (by far) on Friday was John Lothian’s column about John Lothian the broker and watcher of Bitcoin in Putting on My Broker Hat About Bitcoin. Second went to the The Wall Street Journal article Bitcoin Futures Set to Start Trading as Regulator Gives Thumbs Up, paving the way for Cboe and CME to launch futures contracts on the cryptocurrency. Third went to the The Washington Post’s I’m a Depression historian. The GOP tax bill is straight out of 1929.

MarketsWiki Statistics Sponsored by Level Trading Field

113,701,775 pages viewed 22,929 pages 210,729 edits

++++

Lead Stories

Bond Investors Are Worried About Bond Market Liquidity; No one is around to make sure you can buy or sell at a moment’s notice.
Matt Levine – Bloomberg
Here’s the central intellectual problem in bond market liquidity. Practitioners — bond traders and investors — all go around saying that liquidity in corporate bond trading is bad. If you call up your dealer and ask her to buy a big slug of bonds from you, she will put you on hold and call other customers to see if they’re interested in buying those bonds. If they are, she’ll buy from you and sell to them; if they’re not, there’s no trade. In the good old days she’d just buy them herself and deal with the risk of finding buyers later, but now she is too nervous and capital-constrained and Volcker-limited.
/goo.gl/FmrW3y

Saudi Arabia signs major markets upgrade with Nasdaq
Philip Stafford – FT
Saudi Arabia has signed a deal with US group Nasdaq to upgrade the country’s financial markets infrastructure, another step towards its long-term goal of diversifying its economy.
/goo.gl/9Q8xK7

Bitcoin Heads to Wall Street Whether Regulators Are Ready or Not
Rob Urban and Benjamin Bain – Bloomberg
CME, CBOE futures bring bitcoin to banks it was built to beat; Regulators have struggled to sort out just what bitcoin is
Two U.S. exchanges, including the parent of the venerable Chicago Mercantile Exchange, are racing to embrace bitcoin, dragging federal regulators into a realm skeptics call a fad and fraud.
/goo.gl/kgHNQQ

Digital-Currency Fever May Spread to Federal Reserve; As electronic-payment methods rise in popularity, central bankers ponder whether they might need to get in the game
Michael S. Derby – WSJ
It is time to start thinking about Fedcoin. For years central bankers have seen digital currencies as a curiosity to keep an eye on. But now they are increasingly looking at whether they should create their own.
/goo.gl/FR3RJ9

Banks Build Line of Defense for Doomsday Cyberattack; The Sheltered Harbor project is meant to ensure that every U.S. bank has a protected, unalterable backup that can be used to serve customers in case of a major hack
Telis Demos – WSJ
U.S. banks have quietly launched a doomsday project they hope will prevent a run on the financial system should one of them suffer a debilitating cyberattack.
/goo.gl/rPRUVo

Bitcoin Is the World’s Hottest Currency, but No One’s Using It; As businesses accepting bitcoin payments find few takers, the virtual currency is a long way from its traditional counterparts
Georgi Kantchev, Steven Russolillo, Paul Vigna and Christopher Whittall – WSJ
A three-bedroom house in south London, a vineyard and a “fully vegan” tattoo parlor are among a rush of new businesses offering to accept bitcoin as payment.
/goo.gl/SzaZZL

The 92-Year-Old Woman Who Is Still Shaking Up Wall Street; Law professor Tamar Frankel is considered the intellectual godmother of the fiduciary rule
Jason Zweig – WSJ
Most people measure patience in hours, weeks or months. Tamar Frankel measures it in decades.
/goo.gl/TyBWiQ

Odd Lots: An MIT Professor Explains His Original Theory for How Markets Really Work; Andrew Lo’s evolutionary theory for the market ecosystem.
Tracy Alloway and Joe Weisenthal – Bloomberg
There are two popular schools of thought when it comes to how markets work. There’s the efficient markets hypothesis (EMH) which says that it’s basically impossible to beat the market, because all information is completely priced in at all times (more or less). On the other side is an increasingly popular behavioral view which argues that various human emotions and biases are always creating situations that aren’t justified by the data.
/goo.gl/Twt6Me

Bitcoin Storms Wall Street
ByAvi Salzman – Barron’s
Bitcoin traders have no time to pop the champagne anymore.
The crypto-rocket shot past $11,000 last week just hours after eclipsing $10,000, which itself was mere days after pushing past $9,000. It then slid sharply before surging yet again.
/goo.gl/GbXJTC

Transaction costs could be bitcoin’s downfall; Rising transaction costs are likely to be a good predictor of the next crash in the price of bitcoin, according to CME Group.
Jessica Yun – Investor Daily
Speaking to InvestorDaily, CME Group executive director and senior economist Erik Norland said a crash in the bitcoin market was just a matter of time.
/goo.gl/uRf9y2

Exchanges, OTC and Clearing

Nasdaq just backed away from a controversial data product
Frank Chaparro – Business Insider
Nasdaq, the US exchange operator, filed to withdraw a controversial data product, according to a filing with the Securities and Exchange Commission; Nasdaq Pathfinders helps clients monitor the buying and selling behavior of market participants.
The exchange also requested to withdraw three other data products
Nasdaq appears to be taking a step back in its foray into the world of big data.
/goo.gl/x8M6pS

Saudi Stock Exchange signs post-trade tech deal with Nasdaq; The exchange’s technology overhaul is expected to be completed in the second half of 2020.
Joe Parsons – The Trade
Nasdaq has agreed to revamp the Saudi Stock Exchange’s post-trade technology infrastructure, and will implement new registry, depository and risk management systems.
/goo.gl/uTBGCR

Saudi Stock Exchange will transform its post-trade infrastructure
Nasdaq
Nasdaq to deliver new cash and derivatives clearing, central securities depository (CSD) and post-trade risk management technologies
The Saudi Stock Exchange (Tadawul) and Nasdaq have officially signed an agreement to transform Tadawul’s post-trade technology infrastructure, which includes registry, depository and risk management technologies. In addition to the post-trade area, Nasdaq will continue to support the existing trading and market surveillance technology at Tadawul.
/goo.gl/CtQqTr

CME Rival Cboe Suggests its Coming Futures Market Would Include Bitcoin Cash
Bitcoin.com
Bitcoin Cash (BCH) only months old is being floated as a possible addition to a futures offering family by Cboe Global Markets (Cboe). Cboe is looking to differentiate itself from a growing chorus of rivals as it prepares to launch futures contracts by year’s end.
/goo.gl/RWuPbt

CME Group Reached Average Daily Volume of 18 Million Contracts in November 2017, up 21 Percent from October
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that November 2017 average daily volume (ADV) reached 18 million contracts, down 14 percent from the record November 2016 average daily volume, but up 21 percent compared with October 2017 and representing the second highest monthly average daily volume to date in 2017. CME Group November 2017 options volume averaged 3.5 million contracts per day, down 18 percent versus November 2016, with electronic options averaging 2.2 million contracts per day, down 6 percent from the same period last year. Open interest at the end of November was 123 million contracts, up 9 percent from the end of November 2016.
/goo.gl/9a1YsQ

Second-Best November Is Recorded At MGEX
Mondovisione
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), has recorded the second-highest monthly exchange volume number for November with 245,980 contracts. This number is also 9% greater than last year’s November total.
jlne.ws/2kcU3U7

OneChicago Announces Trading Volume For November 2017
OneChicago
OneChicago, LLC (OCX), a securities finance exchange, today announced its November 2017 volume of 866,510, a decrease of 6% year-over-year. OneChicago is a CFTC and SEC regulated exchange offering Single Stock Futures (SSF), a Delta One product, on approximately 1,800 equities, including ADRs and ETFs.
/goo.gl/NMdLcT

CBOE, CME to jump into bitcoin futures trading
Samantha Bomkamp – Chicago Tribune
Bitcoin futures are coming to Chicago’s two main financial exchanges, allowing investors to bet on price swings of the prevailing digital currency and providing perhaps the biggest validation yet to a financial product that’s still largely unknown by the average consumer.
/goo.gl/sT6X6f

Cboe Plans December 10 Launch of Bitcoin Futures Trading
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today announced that Cboe Futures Exchange (CFE), plans to offer trading in bitcoin futures beginning at 5:00 p.m. CT on Sunday, December 10, 2017, at the start of Global Trading Hours. Monday, December 11, will be the first full day of trading, and trading will be free1 through December.
jlne.ws/2jNs0a3

Activist hedge fund TCI sets out reasons to oust the London Stock Exchange’s chairman Donald Brydon
Lucy White
Activist hedge fund TCI, which last week forced the London Stock Exchange (LSE) to call a shareholder meeting, has set out its reasons for wanting to oust the bourse’s chairman.
/goo.gl/PMEu4a

Xetra trading ready for MiFID II; Deutsche Börse’s T7 trading system receives update / Regulatory requirements implemented
Deutsche Börse Group
Today, Xetra trading is ready for the regulatory requirements of the EU Financial Markets Directive MiFID II, which will enter into force at the beginning of 2018. The underlying trading system T7 of Deutsche Börse was updated to release 6.0.
/goo.gl/eek7Rb

HKEX and SZSE Hold Seminar to Celebrate the 1st Anniversary of Shenzhen Connect
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX), the Shenzhen Stock Exchange (SZSE) and China Securities Depository and Clearing Co Ltd (CSDC) co-hosted a seminar in Shenzhen on 2 December to celebrate the first anniversary of Shenzhen-Hong Kong Stock Connect and explore ways to further improve the Connect programme.
/goo.gl/jSNZ3P

Fintech

Metascarcity and Bitcoin’s future
Jon Evans – TechCrunch
The problem with writing about Bitcoin is that the subject has become so emotional. The very name inspires triumph, greed, resentment, or fury. Triumph from those handful of hodlers (yes, really) who are watching the destiny they long foretold actually come true before those eyes. Greed from those hundreds of thousands of newbies who just bought in. Those two groups are, of course, bitcoin believers.
/goo.gl/FJtQGf

The Equifax Hack Didn’t Have to Be This Bad; Using Social Security numbers makes us vulnerable.
Elaine Ou – Bloomberg
If your personal information is ever compromised in a data breach, the hacked company might send you an apology letter with an offer of free identity theft protection from a credit-reporting agency. But what happens when the reporting agency is the one that gets breached?
/goo.gl/tEMWZg

Even Robots Are Joining the Bitcoin Craze as Quants Seek an Edge
Dani Burger – Bloomberg
Researchers say momentum, carry, value factors work in tokens; Systematic trend-followers begin to invest in cryptocurrencies
Quant blended with cryptocurrency sounds like a cocktail poured in hell. But behind closed doors, a few intrepid souls in the investing world are starting to drink it.
/goo.gl/9rFWVa

Battle for ‘True’ Bitcoin Is Just Getting Started
Yuji Nakamura and Olga Kharif – Bloomberg
In August, the bitcoin world split in two when bitcoin cash broke away from bitcoin. It was the culmination of years of growing tension about how to improve the world’s most popular cryptocurrency. The divide has set up a battle over which is the “true” bitcoin, pitting rivals whose combined market value has eclipsed that of Citigroup Inc. and Coca-Cola Co. Now, investors are bracing for volatility and a fight that could define what a cryptocurrency can or should be.
/goo.gl/VS8SKK

A.I. Will Transform the Economy. But How Much, and How Soon?
Steve Lohr – NY Times
There are basically three big questions about artificial intelligence and its impact on the economy: What can it do? Where is it headed? And how fast will it spread?
/goo.gl/2cGbWG

How Winklevoss twins used $11m Facebook payout to become world’s first Bitcoin billionaires
James Titcomb – Bloomberg
The twin brothers who sued Mark Zuckerberg claiming he stole the idea for Facebook are worth more than $1bn after capitalising on the astonishing rise in Bitcoin.
/goo.gl/Usc48U

De Beers to invest in blockchain-based diamond platform
Henry Sanderson – FT
De Beers, the world’s largest supplier of diamonds, is investing in a blockchain-based platform that will enable greater tracking of its stones.
/goo.gl/FWe1VJ

Politics

The launch of bitcoin futures is getting politicians’ attention
Jonathon Trugman – NY Post
There’s a new thing sweeping the international investment landscape. Its price is climbing the charts even faster than Taylor Swift’s new album “Reputation,” which sold 1.2 million copies in its first week.
/goo.gl/BJCsRC

Political risk on Wall Street? Buy the dip!
Noel Randewich – Reuters
An abrupt stock selloff on Friday, sparked by a report that magnified concerns about President Donald Trump’s potential links with Russia, prompted Wall Street’s favorite reaction in recent months: “Buy the dip.”
/goo.gl/gYJ1rG

Is Donald Trump an idiot? The answer is truly worrying
South China Morning Post
Yonden Lhatoo finds questions about Donald Trump’s mental fitness not only justified but ominous as well, given the real threat of war and disaster under his leadership
/goo.gl/audZ1Z

Republican Tax Plan for Colleges Is a Self-Inflicted Wound; The changes would undermine higher ed, one of the few areas where America still earns top marks.
Noah Smith – Bloomberg
The tax reform plan now making its way through Congress has a number of measures that would hurt higher education in the U.S. The most worrying feature is that it would tax tuition waivers for graduate students as income, making it much more expensive for most students to get a Ph.D. It would also end tax deductibility for student-loan interest payments, dramatically increasing the already-crushing burden of debt for many former students, and deterring many young people from going to college in the first place.
/goo.gl/oPcR1W

Farewell Uncle Sam, hello Uncle Donald; The Trump administration is undermining some of America’s closest alliances
Gideon Rachman – FT
All over the world there are countries that rely on the protection and leadership of the US. But dependable old Uncle Sam seems to have gone on a long vacation — and his malicious twin, Uncle Donald, has taken up residence in the White House. The result is confusion and soul-searching among some of America’s closest allies.
/goo.gl/9wH5dz

Regulation

NFA Investor Advisory—Futures on Virtual Currencies Including Bitcoin
NFA
The purpose of this investor advisory is to remind investors that, just like any other speculative investment, trading futures on virtual currencies, including Bitcoin, have certain benefits and various risks. While futures on virtual currencies must be traded on regulated futures exchanges, trading these products involves a high level of risk and may not be suitable for all investors.
/goo.gl/BuU7Ys

Tax Changes for Overseas Cash Could Ripple Through Markets; A tax break for repatriations could distort currency markets and squeeze funding for firms that benefit from the money held abroad
Mike Bird – WSJ
A provision in the GOP tax plan giving U.S. companies a one-time cut for repatriation of earnings and cash held overseas could ripple through financial markets, including currencies, foreign savings vehicles and dollar funding for global banks.
/goo.gl/D8hLmc

Treasury crackdown on Bitcoin over concerns it is used to launder money and dodge tax
Robert Mendick – Telegrap
Ministers are launching a crackdown on the virtual currency Bitcoin amid growing concern it is being used to launder money and dodge tax.
/goo.gl/A2cvT4

Richmond Fed Said to Tap McKinsey’s Barkin as Its President
Christopher Condon and Craig Torres – Bloomberg
Leadership pick likely to disappoint Fed diversity critics; Barkin to succeed Lacker, who was forced to resign in April
Directors at the Federal Reserve Bank of Richmond have chosen Thomas Barkin, a senior executive at global consulting firm McKinsey & Co., as the institution’s next president, said a person familiar with the decision.
/goo.gl/9cNeBK

Venezuela to Create a Cryptocurrency Amid Bolivar’s Free Fall
Jose Orozco – Bloomberg
Maduro says cryptocurrency to be known as the ‘petrocurrency’; To be backed by reserves in oil, natural gas, gold, diamonds
Venezuela’s currency is in free fall. Cryptocurrencies such as bitcoin are going precisely the other direction. And there, President Nicolas Maduro sees a way out of his country’s economic ills.
/goo.gl/Jnq1Lo

Swiss banks step up reports of suspicious activity by Saudi clients; Rash of referrals to money laundering office follows Riyadh’s anti-corruption purge
Patrick Jenkins and Ralph Atkins – FT
Switzerland’s banks have begun reporting suspicious account activity among some of their Saudi Arabian clients to the Swiss Money Laundering Reporting Office, part of the federal police service, according to people close to the situation.
/goo.gl/hqBPYC

Central banking has never looked more daunting; The line between fiscal and monetary policy is increasingly blurred
Charles Bean – FT
The Bank of England’s Monetary Policy Committee has just celebrated its 20th birthday. In its first decade, growth was steady and inflation close to target. We — along with our peers — thought we had this central banking business cracked. Nemesis arrived in the shape of the global financial crisis. Rates have been rock bottom ever since and central banks’ balance sheets have ballooned. Banking regulations are being tightened. And macro-prudential policy is still a work in progress. Central banking has never looked more daunting.
/goo.gl/j6i9AJ

If Central Banks Issue Cash, They Can Issue Cryptocurrencies; Consumers want the anonymity that cash and digital currencies provide.
Ferdinando Giugliano – Bloomberg
Central banks and cryptocurrencies seem to come from different planets. While monetary authorities are the guardians of price and financial stability, the likes of bitcoin and ethereum have ignited a speculative frenzy mirroring the tulip mania of the 17th century.
/goo.gl/L5gyFa

Supreme Court to Hear Arguments Over Sports-Betting Ban; Ruling could open up more of the country to wagering and generate up to $15 billion a year
Chris Kirkham and Brent Kendall – WSJ
A U.S. Supreme Court case next week could dramatically reshape the landscape of American sports betting, with major ramifications for casino operators and European betting shops, as well as professional sports leagues and college athletics.
/goo.gl/jFEVyc

Merrill Lynch Equities (Australia) Ltd pays $140,000 in infringement notice penalty
ASIC
Merrill Lynch Equities (Australia) Limited (‘MLEA’) has paid a total penalty of $140,000 to comply with an infringement notice given to it by the Markets Disciplinary Panel (‘the MDP’).
/goo.gl/w3qKxv

Assessing the value of financial advice
UK FCA
Speech by Megan Butler, Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered to The Personal Investment Management and Financial Advice Association (PIMFA) in London.
/goo.gl/H5somM

Investing and Trading

El-Erian: Bitcoin isn’t a ‘fraud,’ but it’s not for long-term investors, either; Anyone looking to put money into bitcoin needs to separate the issue into two categories: the blockchain technology and the product, Mohamed El-Erian said; The Allianz economic advisor said he doesn’t think bitcoin is a “fraud” but also doesn’t recommend it for long-term investors.
Jeff Cox – CNBC
Investors thinking about putting money into bitcoin need to separate the issue into two categories: the technology and the product, economist Mohamed El-Erian said Friday.
/goo.gl/YFck3r

Economists Seem to Back Off Economic-Growth Claim for Tax Cuts
Lynnley Browning – Bloomberg
Mnuchin embraced estimate of 3 percent growth over a decade; Conservative economists appear to back off after challenge
A group of conservative economists appear to be backing off their claim, embraced this week by Treasury Secretary Steven Mnuchin, that Congress’s proposed corporate tax cut would lead to 3 percent economic growth within a decade.
/goo.gl/xWf595

Overseas Investors (Finally) Join the U.S. Stock-Market Party; Foreign buyers’ spree comes after several years of pulling money out of American shares
Michael Wursthorn and Riva Gold – WSJ
Foreign-investor money is pouring into the U.S. stock market at the fastest clip in years, ending a long period of selling and providing a fresh boost to a more than eight-year rally.
/goo.gl/S5eEQQ

Debt redemption wave of $1tn looms in 2018; Investors face challenge in replacing higher yielding bonds in their portfolios
Kate Allen – FT
A $1tn wave of fixed-income debt is set to mature in Europe, the Middle East and Africa in the coming year, posing a significant challenge for investors searching for returns, according to new research.
/goo.gl/w3WAaY

BlackRock and Vanguard’s $20 Trillion Future Is Closer Than You Think; Two towers of power are dominating the future of investing.
Rachel Evans , Sabrina Willmer , Nick Baker , and Brandon Kochkodin – Bloomberg
Imagine a world in which two asset managers call the shots, in which their wealth exceeds current U.S. GDP and where almost every hedge fund, government and retiree is a customer.
/goo.gl/v66PZJ

98,750,067,000,000 Reasons to Be Worried About 2018
Mark Gilbert, Marcus Ashworth – Bloomberg
As 2017 enters its final month, here are 12 charts to illustrate what a year it’s been in markets. Far be it from us to be party-poopers; but let’s just say what we see makes us slightly nervous about 2018.
/goo.gl/gt1WRt

Many bitcoin investors are in it for the long haul
Ed Zwirn – NY Post
The life of a bitcoin investor certainly has its ups and downs, based on the dramatic price swings of the cryptocurrency.
/goo.gl/cyCxvU

Institutions

Hedge fund Tudor shuts one portfolio; Jones to play bigger role
Svea Herbst-Bayliss – Reuters
Paul Tudor Jones, one of Wall Street’s most prominent investors, is restructuring his Tudor Investment Corp. by liquidating one portfolio and planning to play a bigger role in managing money at the hedge fund firm he founded nearly four decades ago.
/goo.gl/LNsp6n

Mass firings at top digital currency investment bank
Kevin Dugan – NY Post
It’s a bit-bloodbath. The largest investment bank catering to the red-hot cryptocurrency sector was in total disarray on Friday after management fired nine employees — including the entire tech team, The Post has learned.
/goo.gl/vHxyjw

Regions

France’s butter crisis is a perfect lesson in basic economics
Chris O’Brien – Quartz
A visit to the Sena Fromager at the Marché des Carmes brought more bad news. Daniel, the knowledgeable and personable fromager who gamely tolerates my poor French, looked grimly at the display case when I inquired about butter.
/goo.gl/q9fGah

Opportunity flows when it comes to Swiss stocks
Victor Reklaitis – MarketWatch
Strategists are blowing their alpenhorns about the opportunity in Swiss stocks. The alpine country’s shares are changing hands below their typical premium, the Swiss franc appears poised to slide further against the euro, and earnings growth looks good.
/goo.gl/MuZs71

Hedge Funds Signal Trust in OPEC
Jessica Summers – Bloomberg
WTI crude net-long position at highest in about nine months; Producer group agrees to cut output through the end of 2018
Hedge funds are giving Saudi Arabia and Russia a big vote of confidence.
/goo.gl/qTwydN

20 years after Yamaichi’s collapse, Japanese securities industry still grappling with recovery
Japan Times
The failure in 1997 of Yamaichi Securities Co., then one of Japan’s Big Four brokerage houses, kicked off a turbulent era that brought about significant changes in the domestic securities industry.
/goo.gl/pR8Vq3

Yes, this time is different: A new and strong Japan emerges
Jesper Koll – Japan Times
“This time is different.” These are four very dangerous words. When you hear them it always pays to be extra skeptical, especially in the context of someone giving you financial advice or presenting an economic forecast. Personally, I always hold on to my wallet extra tight when the “trust me, this time is different” clause gets invoked. We’ve all been there in our respective professions and passions: It takes a thief to know a thief.
/goo.gl/7wAmKC

Vietnam’s ex-president admits Fukushima disaster played role in ditching foray into atomic power
Japan Times
HO, CHI MINH CITY – Vietnam last year abandoned plans to build its first nuclear power plants with Japanese and Russian assistance due to heightened concern over the safety of atomic power following events including the Fukushima disaster, according to former President Truong Tan Sang.
/goo.gl/ztcgS3

China Likely to Overtake U.S. as Largest Importer Within 5 Years; Shift to a more consumer-focused economy causing the change, CICC researchers say
Bloomberg News
From iron ore to baby formula, electronic parts to durian that smells like gym socks, China is buying everything you can think of, and that will soon make the world’s biggest exporter the top importer in the next few years.
/goo.gl/abaB1X

Brexit

The Best News on Brexit Has Just Come From Germany
Marcus Ashworth – Bloomberg
Good Brexit news has broken out in Europe, and some semblance of sanity as well. While investors are focused on progress in the divorce negotiations, the best development has actually come out of the Bundesbank. Executive board member Andreas Dombret has called for an agreement to keep financial services clearing in London.
/goo.gl/bVAqxA

Corbyn Signals Labour Could Be Open to Second Brexit Referendum
Alex Morales and Joao Lima – Bloomberg
Opposition leader declines to rule out another vote on Brexit; Corbyn speaks to reporters in Lisbon after meeting with Costa
U.K. Labour Party leader Jeremy Corbyn hinted that he could be open to holding a second referendum on Brexit as the consequences of leaving the European Union become clearer.
/goo.gl/HURked

Even £50bn will not buy Britain very much; The ratification of trade agreements cannot be contractually agreed, it is always political
Wolfgang Münchau – FT
What does £50bn buy? A trade agreement? The answer is probably yes, but almost certainly not the type of deal the UK is seeking in its withdrawal negotiations with the EU.
/goo.gl/u3eGyN

EU’s Barnier Sees a Likely Brexit Breakthrough
Ian Wishart – Bloomberg
Barnier briefed lawmakers before May-Juncker lunch meeting;nEU and U.K. said to plan joint statement after meeting
European Union chief negotiator Michel Barnier told European lawmakers that a breakthrough is likely on Monday in Brexit talks as Theresa May arrived in Brussels. The pound rose.
/goo.gl/osdWe9

BofA’s Brexit Planners Are Said to Have Mulled Bigger Paris Move
Laura J Keller – Bloomberg
Managers are said to pitch quick move to gain recruiting edge; Bank is likely to take more measured approach, moving hundreds
Bank of America Corp. has been debating proposals from Chief Operating Officer Tom Montag’s subordinates to rapidly build out a European trading hub in Paris, according to people with knowledge of the talks.
/goo.gl/RrkjhR

Brexit: EU and UK battle over ‘an accession in reverse’; Britain imagines it is an equal partner in the exit talks. But negotiations over its 1973 entry illustrate who has the upper hand
Alex Barker in Brussels – FT
The 280-page report is stamped “CONFIDENTIAL” for good reason. Britain’s chief negotiator is crushingly frank: from the start, Europe’s position amounted to making the UK “swallow the lot, and swallow it now”. And this, he admitted, “by and large, we had to do”.
/goo.gl/CBdCHy

Resigned to Not Getting Special Treatment, London’s Bankers Brace for Brexit; EU officials say financial services aren’t among their most pressing Brexit worries
Max Colchester – WSJ
After Britain voted for Brexit, the U.K.’s finance industry launched a vast lobbying offensive: The European Union had better help London’s banks, or the continent’s businesses and consumers would suffer. That pitch hasn’t worked.
/goo.gl/GvxF5A

Miscellaneous

Looking for leadership guidance in classic philosophy
With critical distance, you gain perspective on who you are and what kind of leader you can become, writes Nathan Harter
London School of Economics and Political Science
Some people contend that authentic leadership is more ethical and compelling. Authenticity depends on aligning what you do and say on the outside with who you are on the inside. They recommend looking inward to find your true self and core beliefs. Experts offer to help leaders bring to the surface what they find deep down.
/goo.gl/3A712S

How to break into venture capital; VC is the cool career choice for MBA graduates, but getting hired is difficult
Jonathan Moules – FT
An MBA from London Business School was key to Joe Krancki securing a job in venture capital — but not because of anything he learnt in class. What counted was being a full-time student on campus, surrounded by people with connections to the best jobs in London’s financial services industry. A tip-off from a banker Mr Krancki bumped into outside the computer room led to a summer internship with 3i, the private equity firm. There he met Mike Reid, who would later found Frog Capital, the tech VC firm, and who hired Mr Krancki as part of his founding team.
/goo.gl/t3d8p9

The ‘unretired’: coming back to work in droves; Rising numbers of older people are swapping pensions and hobbies for corporate life
Emma Jacobs – FT
Eighteen months ago, Tom Harvey retired. Then this year he changed his mind and unretired. He is far from alone. In the UK, according to research in Aging & Society, 25 per cent of retirees return to work, about half of these within five years of retirement.
/goo.gl/jQiAgj

The post Bond Investors Are Worried About Bond Market Liquidity; Saudi Arabia signs major markets upgrade with Nasdaq appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

Mutual Admiration Society member Steve Grob has a blog post titled “Bitcoin futures – the best idea ever?“~JJL

Lanre Sarumi, the CEO of Level Trading Field, is chumming the bitcoin waters with a blog post on Coindesk.com titled “Bitcoin Futures: Make Way for a New Kind of Whale.~JJL

According to Coindesk’s State of Blockchain Q3 2017 report, the top five best performing cryptocurrencies of the quarter (through 9/30) were Pura (return of 2666 percent), NoLimitCoin (return of 1334 percent), Triggers (return of 856 percent) Rise (return of 771 percent) and AdEx (return of 590 percent). ~SD

As Bitcoin hit record highs (again), news outlets picked up the story that the Winklevoss twins were now the first Bitcoin billionaires. But, as Dealbreaker snarkily had to point out, the “The Winklevii, Who Are Two People, Are Not A Bitcoin Billionaire, Because They Are Two People.” ~SD

FANG+ had a record 1422 contracts traded yesterday on ICE Futures US. ~JJL

The @JohnLothian Twitter handle had 54,844 organic impressions on Twitter yesterday, a new record for the 30 days. The average number of original impressions a day for @JohnLothian is 26.5K ~JJL

Asia Pacific Financial News from John Lothian News – December 4, 2017 ~JJL

Lynne Fitzpatrick, managing director of corporate development and treasurer at CME Group, was named to Crain’s Chicago Business 40 under 40 List.~JJL

“The Future of FinTech is Female” will be held on Monday, December 11 at Morningstar’s offices in Chicago.~JJL

Yesterday’s JLN Options edition had the headline: “Cboe Plans December 10 Launch of Bitcoin Futures Trading; VIX Options Set New Daily Volume Record on Friday, December 1.”~JJL

++++

Cboe Throws Launch Date Punch at Crosstown Rival CME
Spencer Doar – JLN

Aren’t people supposed be getting into holiday mode? Isn’t December supposed to be slow, with nothing but junior staff running around trying not to mess things up? In the cryptocurrency space, that’s clearly not the case.

The CFTC on Friday said CME Group and Cboe Global Markets were okay to launch their respective bitcoin futures products through the self-certification process. CME quickly announced it would launch bitcoin futures on December 18, and then Monday morning, Cboe announced a December 10 launch date and free trading for the first month to help the contract gain traction. Cboe’s contract will trade on the CFE, its futures exchange.

Despite the velocity at which developments occur in the crypto space, Cboe CEO and Chairman Ed Tilly said the exchange’s “conversations with the CFTC were very, very intense and I think as thorough as I can ever remember in launching a new product.”

Read the rest HERE.

++++

Bitcoin Futures May Be the Next Big Short
Bloomberg Markets
Bloomberg’s Sonali Basak discusses betting on bitcoin futures. She speaks with Bloomberg’s Vonnie Quinn and Shery Ahn on “Bloomberg Markets.”
/goo.gl/F61h71

*****The tweet of @JohnLothian on this story had the most original impressions of any of its tweets yesterday. ~JJL

++++

World’s Biggest Starbucks to Open in Shanghai
Bloomberg News
China set to become biggest market within decade, Schultz says; Roastery outlet in Shanghai is key element of upscale push
Starbucks Corp. sees China surpassing the U.S. as its largest market within a decade as it counts on the country’s affluent consumers to offset stagnant growth in the rest of the world.
/goo.gl/ZEWQwy

****** I know somewhere that is now on Nasdaq’s Allan Schoenberg’s list of places to visit. ~JJL

++++

The Republican tax bill punishes American families who use public schools
Heather Timmons – Quartz
The US Senate tax bill that Republicans passed early this morning faces scathing criticism for the debt burden it creates for the next generation, the tax breaks it gives to the rich, and the hasty way it was cobbled together.
/goo.gl/68XFfQ

***** This bill undermines so many things, including long term economic growth. I am a stalwart believer in the value of public education, and this tax bill makes the job harder, while rewarding private schools. ~JJL

++++

John Anderson, Who Ran For President as an Independent in 1980, Dies at 95; The 10-term Illinois Congressman became disillusioned with the GOP
Chris Gordon – WSJ
John B. Anderson, the former 10-term congressman who mounted an independent challenge for the presidency in 1980, died Sunday night in Washington, his family announced in a statement Monday. He was 95 years old.
/goo.gl/GqDxWx

***** My first vote in a Presidential election was for John Anderson. And I even had a pair of glasses like the ones he wore. ~JJL

++++

Monday’s Top Three
The top read story yesterday wasn’t about Bitcoin, which might be a top story itself. Yesterday’s readers clicked on two stories about women in business, led by The New York Times’ The Cost of Devaluing Women. Second went to Jessica Darmoni’s piece for The Title Connection, The CME Group Loses Irreplaceable Talent with Kim Taylor’s Retirement. Third was The Telegraph’s story on, you guessed it, Bitcoin, in How Winklevoss twins used $11m Facebook payout to become world’s first Bitcoin billionaires

MarketsWiki Statistics Sponsored by Level Trading Field

113,817,506 pages viewed 22,929 pages 210,750 edits

++++

Lead Stories

How AI Will Invade Every Corner of Wall Street; Machine learning, with its prowess in producing insights from data, is poised to have a hand in 99 percent of investing, CEO says.
Kevin Hong – Bloomberg
It was AI versus Warren Buffett. The artificial intelligence was unleashed by Winton, the London hedge fund, to test an old principle of the Berkshire Hathaway Inc. chairman with a view to trading on it: that major acquisitions usually hurt the buyers’ shareholders. Researchers collected and analyzed data on almost 9,000 U.S. deals back to the 1960s.
/goo.gl/1Dtmcu

Brussels ends Mifid fears with US derivatives trading ruling
Philip Stafford – FT
Brussels has closed off one of the key outstanding concerns from its imminent new Mifid II rules by allowing European banks and companies to continue trading derivatives in US markets.
/goo.gl/CEaD6F

U.K.’s Net Worth Nears 10 Trillion Pounds After Record 2016 Jump
David Goodman and Jill Ward – Bloomberg
Almost 9 percent gain from previous year biggest since 2004; Increase reflects increases in the price of property, shares
At 5 trillion pounds, land value has increased more then fivefold since 1995, and now makes up more than half the U.K.’s total worth. Photographer: Chris Ratcliffe/Bloomberg
The U.K.’s net worth increased the most on record last year, as the value of land continued to increase.
/goo.gl/6dXRH1

CBOE to launch bitcoin futures on Sunday; trading to be free through December
Tomi Kilgore – MarketWatch
CBOE Global Markets Inc. CBOE, -0.92% said Monday that it will launch trading of bitcoin futures on Sunday, Dec. 10. Trading will begin, under the ticker symbol “XBT,” at the start of global trading hours at 6 p.m. ET, and will be free through December. The futures will be cash-settled contracts based on Gemini’s auction price for bitcoin, denominated in U.S. dollars. “Given the unprecedented interest in bitcoin, it’s vital we provide clients the trading tools to help them express their views and hedge their exposure,” said CBOE Chief Executive Ed Tilly.
/goo.gl/df8C

Bitcoin is a ‘dangerous speculative bubble,’ Yale expert says; Stephen Roach, a widely regarded economist, had harsh words about bitcoin as an investment in a Tuesday interview with CNBC; “This is a dangerous speculative bubble by any shadow or stretch of the imagination,” he said.
Dan Murphy – CNBC
With the price of bitcoin moving toward $12,000, a top economist on Tuesday sent a stark warning to investors: The cryptocurrency is in a “dangerous speculative bubble.”
/goo.gl/e2GEua

Bitcoin futures – the best idea ever?
Steve Grob – Fidessa Fragmentation Index
I read yesterday that Cboe is bringing forward the launch date for its Bitcoin futures contract in a bid to usurp its rivals at the CME. This set me thinking about the likely impact of these contracts on the price of Bitcoin itself.
jlne.ws/2BK4WB5

Bitcoin, Ignorance, and You
Jason Zweig
The gravity-defying rise of bitcoin has been drawing in new money from people who appear to know nothing about the cryptocurrency other than the fact that its price has gone up a lot in a hurry.
/goo.gl/QyhkCL

SEC Targets Initial Coin Offering ‘Scam’; Regulator accuses Canada’s PlexCorps of violating securities laws by selling up to $15 million of cryptocurrencies
Paul Vigna – WSJ
The U.S. Securities and Exchange Commission on Monday announced its first-ever enforcement action by its new cyber unit against an initial coin offering, alleging a Canadian company violated U.S. securities laws in raising $15 million through this new, red-hot area of finance.
/goo.gl/K1yCzf

Is It Time to Regulate Bitcoin?; As the digital currency grows in size, it will be hard for regulators to resist the urge to step in
James Mackintosh – WSJ
Bitcoin has been the ideal proving ground for investment’s most powerful advice: caveat emptor, buyer beware.
/goo.gl/Qi87ce

EU, UK regulators look to crackdown on bitcoin
Ali Breland – The Hill
European countries are plotting a crackdown on the digital currency bitcoin as its value hits record highs.
/goo.gl/LtbuJC

Activist TCI lays out case for LSE chairman ouster
Philip Stafford – FT
The Children’s Investment Fund, the activist investor trying to oust Donald Brydon as chairman of the London Stock Exchange Group, has laid out its case saying that “shareholders have lost faith” in Mr Brydon.
/goo.gl/ZQeD9R

China Assumes Green Power Mantle, Leaving Germany, U.S. Behind
Brian Parkin – Bloomberg
Chinese exports of environmental goods, services have tripled; German government says it’s ok with taking a subsidiary role
Chinese exports of environmental goods and services surged ahead of Germany and the U.S., according to a report that shows how the climate change fight is shifting international trade.
/goo.gl/khUfYu

Foreign investment in Shenzhen stocks exceeded mainland trade in Hong Kong shares in link’s first year
South China Morning Post
Shenzhen-Hong Kong Stock Connect success has contributed to inclusion of A shares in MSCI index, says China Securities Regulatory Commission vice-chairman
/goo.gl/GimjWs

Barclays CEO Whistle-Blower Verdict Is Said to Be Delayed Again
Suzi Ring and Stephen Morris – Bloomberg
U.K. FCA decision to come early next year instead of December; Regulators probing CEO Staley under new senior manager rules
U.K. regulators investigating Barclays Plc Chief Executive Officer Jes Staley’s attempts to unmask a whistle-blower have pushed back their decision a second time, with the probe now expected to be concluded early 2018, people with knowledge of the process said.
/goo.gl/3kQTT8

Bitcoin Futures ‘Trustworthy’ to Investors, Says Bandman
Bloomberg Daybreak: Americas
Jeff Bandman, founder and principal at Bandman Advisors, talks about what futures trading of bitcoin means to investors. He speaks with Bloomberg’s Alix Steel on “Bloomberg Daybreak: Americas.”
/goo.gl/Q92dpS

Google’s Hinton says AI poses new challenges to regulators
Alastair Sharp – Reuters
Expansion of artificial intelligence in financial services, healthcare, transportation and other fields poses new challenges to governments charged with regulating those industries, according to an executive with Google who is a pioneer in the field of machine learning.
/goo.gl/mztzTw

Overbond Appoints Former Head of Bloomberg Global Markets to Lead U.S. Expansion; George Harrington joins Overbond as Head of U.S. Business Development
Business Wire
Overbond Ltd., the first end-to-end capital markets platform for primary bond origination and fixed income deal execution, has announced the appointment of George Harrington as the company’s Head of U.S. Business Development. Based in Overbond’s office in New York, he will take up this new role with immediate effect.
/goo.gl/SkWhTt

Exchanges, OTC and Clearing

CBOE to launch bitcoin futures trading on December 10
Adam Samson – FT
Bitcoin futures trading is almost here. CBOE Global Markets said on Monday it will launch trading in futures tracking the controversial cryptocurrency next week, giving many mainstream investors their first shot at speculating on its price.
/goo.gl/nPnjdT

Eurex Daily Futures on KOSPI 200 Derivatives: No trading at Eurex Exchange on 5 December 2017 due to technical constraints
Eurex
Due to limited access to relevant Eurex KOSPI market data by Korean participants, Eurex Deutschland and Eurex Zürich AG have decided not to open the Eurex KOSPI Products (OKS2, FMK2) from 5 December 2017 until further notice.
/goo.gl/oh9PPR

MiFID II/MiFIR: Changes to Eurex T7 configuration and introduction of additional reports
Eurex
The regulatory changes of the revised Markets in Financial Instruments Directive (MiFID II) and the associated Markets in Financial Instruments Regulation (MiFIR) will come into effect on 3 January 2018.
/goo.gl/88PHMo

Eurex reaching major milestones in 2017
Eurex
2017 has been an important year for Eurex, Europe’s largest derivatives exchange and part of Deutsche Börse Group. It provided both major challenges and opportunities, and called for the exchange to once again act as innovation leader to best support the markets.
/goo.gl/iLj3Eg

Partnership program reaches further strategic milestone; Five major trading platforms support Eurex Clearing’s OTC service
Deutsche Börse Group
Eurex Clearing, one of the world’s leading central counterparties (CCP) and part of Deutsche Börse Group, is working with major trading platforms for interest rate swaps traded on the OTC market to further improve price transparency, pricing and liquidity. BGC Partners, Bloomberg, iSwap – a member of the TP ICAP group -, Tradeweb and Tra-X, a traditional platform, each seek to be recognized as a “recognized platform” under the Eurex Clearing Partnership Program. https://goo.gl/9DWwqd

Xetra trading ready for MiFID II; Deutsche Börse’s T7 trading system receives update / Regulatory requirements implemented
Deutsche Börse Group
Today, Xetra trading is ready for the regulatory requirements of the EU Financial Markets Directive MiFID II, which will enter into force at the beginning of 2018. The underlying trading system T7 of Deutsche Börse was updated to release 6.0.
/goo.gl/eek7Rb

LCH clears over $700 million in G10 NDF in one month
LCH
Five G10 currency pairs now available for clearing at ForexClear; Expansion of ForexClear builds on current emerging market NDFs offering; Record volume of over $110 billion in notional cleared across entire ForexClear service in one day, on 28 November; Follows service’s rapid growth in clearing volumes since introduction of uncleared margin requirements
LCH, a leading global clearing house, today announced that it has cleared a total of $745 million G10 FX NDFs currency pairs through its ForexClear service. This volume was achieved within one month of the new product’s go live at LCH. By clearing these additional currency pairs at ForexClear, market participants will benefit from the efficiencies of clearing over a broader product set.
/goo.gl/eGB9ZV

Euronext announces volumes for November 2017; Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for November 2017.
Euronext
Cash Trading – In November 2017, the average daily transaction value on the Euronext cash order book stood at EUR8,141 million, up +11.0% compared to November 2016 and up +13.5% from the previous month.
Derivatives trading – In November 2017, the overall average daily volume on derivatives reached 629,767 contracts, up +15.9% compared to November 2016 and up +26.5% compared to the previous month. In details,
/goo.gl/qN9b1o

Hong Kong leader, bourse officials visit Saudi king
Reuters
Top Hong Kong officials met Saudi Arabian King Salman in Riyadh on Sunday, Saudi state news agency reported, as the world’s leading stock exchanges compete to list oil giant Saudi Aramco
/goo.gl/CQsvAi

SGX, ABS, ISCA, Law Society and SID jointly launch guide on prevention of insider trading
SGX
Singapore Exchange (“SGX”), together with the Association of Banks in Singapore (ABS), the Institute of Singapore Chartered Accountants (ISCA), the Law Society of Singapore and the Singapore Institute of Directors (SID), is launching a guide on the prevention of insider trading.
/goo.gl/ZDCVWv

ASX Monthly Activity Report – November 2017
ASX
/goo.gl/by7MVW

Eurex adds Bloomberg, Tradeweb and TP ICAP platforms to OTC clearing scheme; Major execution platforms are seeking approval to join Eurex Clearing’s partnership programme.
Hayley McDowell – The Trade
Several major execution firms for interest rate swaps have sought to become approved platforms for Eurex Clearing’s profit sharing partnership programme.
/goo.gl/3hMLYX

LiquidityBook opens London office as MiFID II prompts new business; New office in Holborn to serve growing client base as firm sees growing demand for platform ahead of MiFID II.
Hayley McDowell – The Trade
New York-based platform provider LiquidityBook has established a new office in London as it looks to serve its growing client base in Europe ahead of MiFID II.
/goo.gl/ACZh3e

CME’s long-serving global clearing head to retire; Kim Taylor will retire at the end of the year after working at CME Group for more than 28 years.
Joe Parsons- The Trade
CME Group’s president of post-trade and clearing and industry veteran Kim Taylor has announced she will retire at the end of the year.
/goo.gl/VgxWBh

Five top bosses were ousted by LSE chairman, claims hedge fund boss as stock exchange bust-up grows
By James Burton For The Daily Mail
London Stock Exchange chairman Donald Brydon has a toxic track record and must be fired before he causes more havoc, a top investor has warned.
/goo.gl/4SzVC1

First U.S. Bitcoin Futures to Start Trading Next Week; Cboe and CME seek to cash in on surging investor interest in the digital currency
Alexander Osipovich – WSJ
The first U.S. bitcoin futures will start trading next week, as dueling Chicago futures exchanges seek to cash in on surging investor interest in the digital currency.
/goo.gl/8GmSfs

Decommissioning of servers for MOEX terminals with Internet access
MOEX
Dear users of the MOEX terminals (Equity & Bond, FX and Money Market) with Internet access,
/goo.gl/DChsNi

Nasdaq Stockholm Issues Warning To Morgan Stanley
MondoVisione
The Disciplinary Committee of Nasdaq Stockholm has found that Morgan Stanley & Co. International Plc (“Morgan Stanley” or the “Member”) has breached the Nasdaq Nordic Member Rules ver. 3.1, December 1, 2016 (“NMR”) and has therefore issued a warning to the Member.
/goo.gl/DX1tT6

Borsa Italiana Launches FTSE Italia PIR Mid Cap Futures
Mondovisione
Exane and Societe Generale will provide liquidity as market makers from launch date
Borsa Italiana today announces that its Italian Derivatives Market (IDEM) has further extended its product range with the launch of FTSE Italia PIR Mid Cap Futures
/goo.gl/mdmEXG

Fintech

China’s central bank believes bitcoin will die
Zheping Huang – Quartz
China once dominated the bitcoin markets, accounting for over 90% of global trading. But in September, its central bank banned initial coin offerings (ICOs) and stopped cryptocurrency exchanges from serving local customers. Looking back at the crackdowns, Pan Gongsheng, a deputy governor of the People’s Bank of China, believes Beijing made the right decisions.
/goo.gl/AV38u5

Why Coinbase’s blip isn’t all bad
Maria Terekhova – Business Insider
Coinbase, a leading US cryptocurrency exchange, has been ordered to give the IRS the account details of users who bought, sold, sent, or received $20,000-plus worth of Bitcoin between 2013 and 2015 to help the regulator investigate potential cases of tax avoidance on the exchange, after it discovered conspicuously few Bitcoin-related gains and losses filed for 2015.
/goo.gl/nx6DC8

Why The Best Blockchain Innovations Will Come From Wall Street
Kirby Darcy – Forbes
Fintech happens to be one of my favorite industries because there are few others that work so consistently towards progress. The notion of money has changed so drastically over millennia and arguably even more so during the last few decades alone. There are countless influential names that are working daily to redefine how we think about finance, and I was recently lucky enough to sit down with one of them. Jim Preissler, CEO of Trade.io, discussed with me the idea of blockchain and Wall Street’s growing involvement in it.
/goo.gl/vzXKVz

Government-Run Digital Currencies Could Disrupt U.S. Dominance; Venezuela’s plans to issue a cryptocurrency are an early warning of an attack on the Western-dominated global financial system.
Leonid Bershidsky – Bloomberg
Looking for a way around sanctions. Photographer: Federico Parra/AFP/Getty Images
Venezuelan President Nicolas Maduro’s announcement that the Latin American country will issue a cryptocurrency called the petro to overcome a “financial blockade” by the U.S. probably mirrors the thinking of other maverick regimes. The possibility of sanctions-busting, and generally finding a way to work outside the Western-dominated global financial system, makes cryptocurrencies attractive to non-Western nations, and the more so to rogue regimes.
/goo.gl/U9cA2e

TORA Launches AI-Driven Pre-Trade Analytics Tool to Help Firms Meet Stricter MiFID II Best Execution Requirements
GlobeNewswire
TORA, provider of the industry’s most-advanced cloud-based order and execution management system (OEMS), today announced the launch of its artificial intelligence (AI)-driven pre-trade transaction cost analysis (TCA) solution designed to help firms meet the stricter best execution requirements imposed by MiFID II. TORA’s new AI TCA product moves beyond traditional TCA by using AI techniques to accurately estimate price slippage for trades before they enter the market.
/goo.gl/gGr47j

Column: Befuddled by bitcoin: One man’s quest to comprehend cryptocurrency
Bitcoin
Robert Reed – Chicago Tribune
If you ask me to stand on one leg and quickly describe what bitcoin is, I’d fall down.
/goo.gl/LX4DB8

Calypso Cloud Services have gained the ISO / IEC 27001:2013 certification
PR Newswire
International Organization for Standardization recognizes Calypso Technology for following best practices for information security management of its Cloud Services
/goo.gl/wvnR8h

Politics

Trump’s tweets have more of an effect on market volatility than North Korean missile tests, finds Goldman Sachs
Lucy White – City AM
Investors trading in the Vix might find it useful to predict Trump’s reaction (Source: Getty)
Whether US President Donald Trump is making any headway in his campaign to Make America Great Again is hard to gauge. But there is one area where he is having a quantifiable impact, according to Goldman Sachs: market volatility.
/goo.gl/JhfhYf

Mueller Subpoenas Trump Deutsche Bank Records
Steven Arons – Bloomberg
Mueller is said to ask about bank’s dealings with president; Trump owes lender about $300 million for real estate loans
Special prosecutor Robert Mueller zeroed in on President Donald Trump’s business dealings with Deutsche Bank AG as his investigation into alleged Russian meddling in U.S. elections widens.
/goo.gl/yexKMN

Deutsche Bank receives subpoena from Mueller on Trump accounts: source
Reuters Staff
Special Counsel Robert Mueller has asked Deutsche Bank (DBKGn.DE) to share data on accounts held by U.S. President Donald Trump and his family, a person close to the matter said on Tuesday.
/goo.gl/cSrPLo

Germans see Trump as bigger problem than North Korea or Russia
Reuters Staff
Germans see U.S. President Donald Trump as a bigger challenge for German foreign policy than authoritarian leaders in North Korea, Russia or Turkey, according to a survey by the Koerber Foundation.
/goo.gl/AanVcW

Regulation

New CFPB Chief Curbs Data Collection, Citing Cybersecurity Worries; Decision is part of Mulvaney’s effort to improve the agency’s data-security program
Mick Mulvaney said the decision is part of his effort to improve the agency’s data-security program.
Yuka Hayashi – WSJ
The Trump administration’s interim director of the Consumer Financial Protection Bureau said he has frozen the agency’s collection of personal information due to cybersecurity concerns, a step in changing policies criticized by the financial industry.
/goo.gl/Zw79wv

U.S. SEC’s cyber unit files charges in alleged initial coin offering fraud
Michelle Price – Reuters
The U.S. Securities and Exchange Commission said on Monday its newly created cyber unit had filed its first charges against an “initial coin offering” (ICO), alleging that a privately held company called PlexCorps and its top two officials had defrauded investors.
/goo.gl/iGmTP4

SEC sues cryptocurrency company for ripping off customers
Carleton English – NY Post
This is what regulators might call low-hanging fruit. A Canadian cryptocurrency company that raised $15 million by promising investors a whopping 1,354 percent return on their money in just 29 days has been sued by US regulators for ripping off its customers.
/goo.gl/7fPvFN

ESMA opens a call for experts for the Consultative Working Group of ESMA’s Corporate Finance Standing Committee
ESMA
The European Securities and Markets Authority (ESMA) is looking to newly constitute a Consultative Working Group (CWG) for the ESMA Corporate Finance Standing Committee (CFSC) as the two-year-term of the existing CWG will expire shortly. ESMA is therefore calling for expressions of interest from stakeholders by 5 January 2018 to become a member of the CWG.
/goo.gl/kyCwy5

FIX Format Changes
FINRA
Starting Monday, March 5, 2018, FINRA will require a change to FIX Tag 22007 (Execution Time) to more accurately process execution time during Daylight Savings Time (DST) changes. This update affects firms’ transaction reports for all FINRA Multi Product Platform Products (MPP), including TRACE, The Over the Counter Trade Reporting Facility (ORF) and The Alternative Display Facility (ADF).
/goo.gl/538tAJ

Digital Display Advertising Firm, Executives Charged With Bilking Investors
SEC
The Securities and Exchange Commission today charged a Seattle-area outdoor digital signage advertising company and two of its senior executives with stealing more than $2 million from retail investors.
/goo.gl/ogVAz3

Audit Firm Charged With Fraud Relating to Auditing of Penny Stock Companies
SEC
A California-based audit firm is being charged with conducting flawed audits and reviews of financial statements, which are critical sources of information for investors.
/goo.gl/CmpzhS

SEC Emergency Action Halts ICO Scam
SEC
The Securities and Exchange Commission today announced it obtained an emergency asset freeze to halt a fast-moving Initial Coin Offering (ICO) fraud that raised up to $15 million from thousands of investors since August by falsely promising a 13-fold profit in less than a month.
/goo.gl/A5ETHT

National Futures Association: Proposed Technical Amendments to NFA
NFA
/goo.gl/dwyaHN

FCA reveals next round of successful firms in its regulatory sandbox
UK FCA
The Financial Conduct Authority (FCA) today unveils the firms that were successful in their applications to begin testing in the third cohort of the sandbox.
/goo.gl/zq5nDy

Investing and Trading

Bitcoin steals gold’s shine as new investing in bullion drops by a fifth
Courtney Goldsmith – Cathy AM
Bitcoin is stealing the spotlight from gold as trading among first-time buyers slid to the lowest point since the metal’s price sank in 2015, new data suggests.
/goo.gl/5mzLjd

Going Deep on Contrarian Factor Timing
AQR
Our new paper, Deep Value, looks at episodes where the valuation spread between cheap and expensive securities is wide relative to its history. One innovation is that we do this not just for individual equities, as is most common in related studies, but also across equity index futures, currencies, and global bonds.
jlne.ws/2BKA03Q

Spotify, Like Google, Wants to Reinvent the Tech IPO; The music-streaming services wants to sidestep Wall Street’s underwriting fees by launching a direct listing of its shares early next year
Stephen Wilmot – WSJ
Early next year music-streaming service Spotify is due to mount what is arguably the greatest challenge to the Wall Street IPO machine since Google went public in 2004. Silicon Valley’s startup giants will be watching closely.
/goo.gl/Y4eR3L

EDF faces forked path to renewable future; Talk of break-up has mounted as France seeks to end dependence on nuclear
David Keohane in Paris – FT
In the port of Saint Nazaire on the Atlantic coast, France’s first floating wind turbine is being readied for a trip out into deep water, where it will form part of France’s push into renewable energy.
/goo.gl/DVPmjc

Calm Down. Cryptocurrency Is Still a Microscopic Asset in the Financial Market
Bloomberg via Fortune
Bitcoin’s blistering rally needs to be viewed with some perspective. Yes, its market cap of about $180 billion is the same as Coca-Cola’s. And yes, it’s more than 10-fold increase has become near legendary — it touched yet another record today as it climbed to $11,845. But in the broader scheme of the financial market, it’s a gnat — equivalent to less than 2 percent of any major class and 400 (!) stocks have bigger gains this year.
/goo.gl/rafgCu

Riot Blockchain says Coinsquare has received CAD10.5 million investment
Ciara Linnane – MarketWatch
Riot Blockchain Inc. RIOT, +0.47% said Monday it has closed a CAD$10.5 million investment in its Coinsquare holding, led by an unnamed global asset manager with more than a trillion dollars in assets under management. Coinsquare is a Candian digital currency exchange, whose valuation is now more than 3 times what it was when Riot invested in it in September. Riot Blockchain started life as diagnostic machinery biotech stock Biopix Inc., before pivoting to cryptocurrencies and changing its name. The company aims to support blockchain technologies, which underlie digital currencies, such as bitcoin. Shares were last up 10% premarket, and have gained 291% in 2017, while the S&P 500 SPX, -0.11% has gained 18%.
/goo.gl/vxhZDe

Why Central Banks Continue to Put Asset Prices Out of Whack; A protracted exit from easy money will continue to create market puzzles
Richard Barley – WSJ
Even as the world’s central banks edge away from the extraordinary policies of the past decade, huge market distortions remain. The unwinding of years of easy money will continue to puzzle investors.
/goo.gl/eMDXN1

Private equity investors are paying through the nose for midsize companies
Matthew C Klein – FT
If finance academics have taught us anything, it’s that you make more money buying things when they’re cheap than when they’re expensive.
/goo.gl/KDeH3h

Americans’ Nest Eggs Have Never Been Bigger
Jordan Yadoo – Bloomberg
Fidelity data show average 401(k) account balances near $100k; Fed figures show just half of households feeling the windfall
As U.S. stocks continue hitting new highs, President Donald Trump is encouraging Americans to check out their retirement accounts.
/goo.gl/yNSM9L

Institutions

Citi poaches eBay’s chief data officer in Asian retail push; Banks push back against tech groups’ raiding of their digital talent
Don Weinland in Hong Kong
Citigroup has poached eBay’s chief data officer to head up data and analytics for its retail operations in Asia, a sign that banks are pushing back against a trend that is sapping their talent to feed a boom in financial services at competing tech companies.
/goo.gl/CmQoJR

IG Group expects healthy H1 revenue, braces for regulatory crackdown
Hannah Murphy – FT
IG Group, the UK’s largest online trading platform by market share, said it expected healthy revenue growth in the first half of its financial year, as it braces for a likely regulatory shakeup of the retail investment sector in 2018.
/goo.gl/jhBqj9

Deutsche Bank to rebrand its asset management arm; Lender to limit power of minority shareholders in soon-to-be listed fund division
Olaf Storbeck in Frankfurt – FT
Deutsche Bank will rebrand its asset management arm and use a corporate structure that will give minority shareholders limited influence over the company irrespective of the size of their equity stake in the soon-to-be listed fund unit.
/goo.gl/eLBzH4

QuantHouse provides low-latency access to Sun Trading’s Systematic Internaliser; Providing clients with access to Sun Trading’s liquidity pool via a single API
Finextra
QuantHouse, the independent global provider of end-to-end high performance market data and trading through API based technologies, today announced the availability of easy access to Sun Trading’s Systematic Internaliser (SI) platform through its QuantFEED and QuantLINK offering.
/goo.gl/u8Pb5i

Regions

Goldman Sachs to beef up Polish operations; US investment bank plans to hire about 250 new staff in Warsaw
James Shotter in Warsaw and Laura Noonan in London – FT
Goldman Sachs is planning to boost its Polish headcount by close to 50 per cent next year, in the latest endorsement of the central European country’s status as an operations hub for global banks.
/goo.gl/c6RZaj

‘Mr LNG’ plans to pivot Jera into global trading powerhouse; Liquefied natural gas venture eyes investments as it prepares for imports to decline
David Sheppard, Neil Hume and Emiko Terazono in Tokyo – FT
The world’s largest buyer of liquefied natural gas has vowed to transform itself into a global trading powerhouse as it moves to defend its position as the biggest purchaser of the super-cooled fuel.
/goo.gl/qDJT3R

Brexit

Five reasons why the Brexit negotiations have just got more difficult; The DUP’s last-minute hitch changes everything and leaves Theresa May as perhaps the loneliest figure in politics
Dan Roberts – The Guardian
As all the parties to Britain’s botched divorce deal dust themselves down, a new question was convulsing weary officials on Tuesday: what next?
/goo.gl/12orJQ

Will the UK get a Brexit deal on research? That’s the EUR160bn question; Eighteen months have passed since the EU referendum and the government’s position on science and research is no clearer – we need certainty
Ludovic Highman – The Guardian
The government isn’t committing to a Brexit deal for universities, but we need a new partnership in science and innovation between the EU and the UK – and we need it urgently. The stakes are high: the continued ability of British universities to produce high quality research, and of the UK to retain its status as a leading knowledge economy, depend upon it.
/goo.gl/bebFeF

Jeremy Corbyn’s Labour must use its power to stop Brexit – now; Labour has the chance to prove itself a party that believes in the European social model – by whipping its MPs (in true British style) to vote for the reversal of this farce
Paul Fisher – The Independent
Reform is always progressive, right? Not so. Some reforms can set us back generations.
/goo.gl/CcS8CU

Miscellaneous

So Long, Year of the Bond-Market Rooster
Marcus Ashworth – Bloomberg
For European government bond markets, QE is staggering through its finale. Some borrowers will have a tougher time dealing with the end of days.
/goo.gl/1oMWHj

The Avocado Price Surge Is Over
Megan Durisin – Bloomberg
Guacamole fans take heart. Good weather and better pest control are expected to boost Mexico’s Hass avocado production in the year that began in July, the U.S. Department of Agriculture said in an update last week. Wholesale prices have already come down from the records set this summer, and the larger crop should prevent costs from reaching those peaks again.
/goo.gl/Lj3V6F

The post How AI Will Invade Every Corner of Wall Street; Brussels ends Mifid fears with US derivatives trading ruling appeared first on John Lothian News (JLN).

First Read

Hits & Takes

Tom Farley is just having too much fun as CEO of NYSE. He is making the most of the NYSE media platform. Yesterday he was hanging out with George Springer of the Houston Astros, the World Series MVP, on the floor of the NYSE with the World Series trophy.~JJL

Net Neutrality Update: This all happened around Thanksgiving, but it is worth sharing that Comcast, which had promised not to block, throttle, or discriminate against lawful content, deleted that pledge the same day the FCC announced it would repeal net neutrality.

A tweet @loresjoberg posted regarding Comcast promising not to throttle content sums it up well:

“We never will, but it’s very important that we be able to. But we won’t. So let us do it. Because we won’t do it. Which is why we’re spending so much money to make sure we can. But we won’t. But let us.”

If you want to find out how you can help stop this, visit: https://www.battleforthenet.com/
~JB

Yesterday’s JLN Options had top stories covering the short volatility trade. ~SD

A few months ago JPMorgan CEO Jamie Dimon called bitcoin a “fraud”. Now JPMorgan is backing Bitcoin as the new gold. ~JB

Asia Pacific Financial News from John Lothian – https://goo.gl/4cSKq7December 5, 2017 ~JJL

@JohnLothian‘s tweets earned 784.9K impressions over this 28 day period. On average during the last 28 days, @JohnLothian earned 46 Retweets per day ~JJL

++++

The Silent Screams of the Bitcoin Shorts
By John J. Lothian

If bitcoin were a standard commodity or securities instrument, headlines would be screaming about how the “shorts” were being squeezed. With bitcoin in a parabolic price rise, some calling it a mania, there are no shorts to scream bloody murder.

Many commodities and companies have key constituents who apply political pressure when futures markets are moving so sharply that common sense tells you there is something wrong or unbalanced happening in the market.

Sometimes rules are changed or obscure procedures exercised at futures exchanges in order to accommodate an orderly liquidation of positions in cases where the powers that be can’t take the political heat anymore.

However, bitcoin is unlike other commonly traded markets because of its asymmetrical feature. There is little ability to short (physical?) bitcoin, so there are no shorts to squeeze.

For the rest of the commentary, click HERE

***** The magazine that asked me to write this column chose not to publish it as they said I “wrote a lot of different ideas but I (they) couldn’t tie them all together.” Oh well. ~JJL

++++

Bitcoin Futures: What? Me Worry?
The Streetwise Professor
The biggest news in derivatives world is the impending launch of Bitcoin futures, first by CBOE, then shortly thereafter by CME. The slow transaction times and relatively high transaction fees of Bitcoin mean that it sucks as a medium of exchange, especially for retail-sized transactions. And its price volatility relative to fiat currencies – which also means that its price volatility denominated in goods and services is also huge – undermines its utility as a store of value: that utility is based on the ability to convert the putative store into a relatively stable bundle of goods.
/goo.gl/HGak8B

***** The professor is always worth the read. ~JJL

++++

Technology-driven Trading: Is It For You? (PT 1); Insights from IMC traders. Part 1
IMC
Trading is a quantitative discipline but people with very different backgrounds and skillsets can succeed. Find out what it takes at IMC in our 4-part blog series
/goo.gl/W22sfe

***** Yes, it is. ~JJL

++++

Crypto Land of Confusion; In the world of finance, one of the first signs of success is when regulators fight over oversight. In that regard, cryptocurrencies have arrived.
James M. Falvey
This is the time, This is the place, So we look for the future, But… Tell me why, this is the Land of Confusion. -Land of Confusion, Genesis, 1986
/goo.gl/cn8oeQ

***** Our friend Jim Falvey writing on Bitcoin for the former Futures Magazine. ~JJL

++++

Opinion: There’s overwhelming evidence that the U.S. stock market is heading for disaster
John Mauldin – MarketWatch
Bonfires are fun to watch, but they eventually burn out. Human folly apparently doesn’t, so we just keep adding to the absurdities. The volume of daily economic lunacy that lights up my various devices is truly stunning, and it seems to be increasing. (You can find a previous series of charts in my free newsletter, Thoughts from the Frontline.)
/goo.gl/kHJkEk

******The markets need many opinions for price discovery to work, even those that want you to run for the hills. ~JJL

++++

Thoughts on Bitcoin
Kevin Darby – Blue Trading Systems
I have a keen interest in industry developments that could give our clients an edge and John Lothian’s “Putting on My Broker Hat About Bitcoin” got me thinking about the imminent listing of Bitcoin futures at the CME and CBOE’s Chicago Futures Exchange. Crypto-mania commentary has focused on the merits of Bitcoin and how the associated technology might revolutionize finance and other aspects of our lives, but I do not see much earnest technical analysis of the system and its flaws.
jlne.ws/2AVYmtC

***** Another bitcoin commentary that includes John Lothian in the first paragraph. Head shake. ~JJL

++++

Tuesday’s Top Three
Our top story was led by Bloomberg’s How AI Will Invade Every Corner of Wall Street. Second went to Steve Grob’s piece Bitcoin futures – the best idea ever?. Third went to Spencer Doar’s JLN piece, Cboe Throws Launch Date Punch at Crosstown Rival CME

MarketsWiki Statistics Sponsored by Level Trading Field

113,933,277 pages viewed 22,931 pages 210,760 edits

++++

Lead Stories

‘We may be stupid’ for waiting on bitcoin futures, NYSE owner says
Mike Murphy – MarketWatch
CEO Jeff Sprecher admits he doesn’t ‘know what to make of cryptocurrencies’
The owner of the New York Stock Exchange said Tuesday he may end up regretting not jumping at the chance to offer bitcoin futures, unlike his competitors.
/goo.gl/itqEPD

***** Jeff Sprecher is not stupid. He is brilliantly positioning ICE in true game theory style.

New York Stock Exchange owner ICE holds back on crypto-futures
John McCrank – Reuters
Intercontinental Exchange Inc (ICE.N) has put a lot of thought into the idea of futures contracts on cryptocurrencies like bitcoin, but has yet to move forward due to the opaque nature of the underlying markets, the New York Stock Exchange owner’s chief executive officer said on Tuesday.
/goo.gl/jWSxvw

CME fee rises vex struggling high-speed trading industry; Lobby group weighs options amid mood ranging from anger to resignation
Gregory Meyer in New York – FT
A rise in transaction fees for futures contracts at CME Group is angering the exchange operator’s most active customers at a time when their business models are being challenged by subdued market volatility.
/goo.gl/weZPCd

Bloomberg’s rising terminal count signals hope for the beleaguered bond trader
John Detrixhe – Quartz
Life hasn’t been easy for Wall Street traders in recent years—their ranks were thinned after the last financial crisis, and regulations since the subprime meltdown have made their jobs less profitable (and thus more expendable). Traders’ employers have paid billions of dollars in fines for the dumb things they’ve said in chat rooms (and for, you know, trying to rig markets). And if that’s not enough, it has become fashionable for bank CEOs to talk openly about automating as much of their workforce as possible.
/goo.gl/sYKzCE

‘Responsible’ investor group toughens code on global members
Ross Kerber – Reuters
A UN supported group pushing for “responsible” investment said it has adopted tougher rules aimed at making fund managers deliver on pledges to pay attention to environmental, social and governance (ESG) issues.
/goo.gl/7ESXL9

There’s an $814 Million Mystery Near the Heart of the Biggest Bitcoin Exchange
Matthew Leising – Bloomberg
After Wells Fargo severed ties, Tether won’t name its banks; Bitfinex says it’s hired a law firm to contest false claims
Among the many mysteries at the heart of the cryptocurrency market are these: Does $814 million of a digital token known as tether really exist? And what is tether’s connection to Bitfinex, the world’s biggest bitcoin exchange?
/goo.gl/LswuU9

MiFID Spells Decline of Off-Exchange Bond, Derivatives Trading
Silla Brush – Bloomberg
Deloitte survey indicates shifts to trading venues from OTC; Survey of 12 buy-side firms shows impact of rule from February
The European Union’s MiFID II law is expected to drive a significant, rapid shift in trading of bonds and derivatives to electronic and other trading venues.
/goo.gl/z4eoL5

Prime Brokers Add Valuation-Fluffing To Menu Of Services
Jon Shazar – Dealbreaker
Valuing illiquid assets is a delicate and dangerous business. Mark them too low, and your portfolio managers and investors start getting pissy. Mark them too high, and your regulators and investors start getting litigious. But mark them you must, even if they haven’t traded in years, and since securities are only worth what people will pay for them, that means making up a price that someone might conceivably pay for them—and making it up just right, or else, see above.
jlne.ws/2AU1rL4

Plot to Assassinate U.K. Prime Minister Theresa May Is Foiled, Sky Reports
Brendan Scott – Bloomberg
U.K. Prime Minister Theresa May was the target of an assassination attempt by Islamist militants that was broken up last week with the arrests of two men, Sky News reported.
/goo.gl/UDx2iR

Why Wall Street’s Finally Pushing to Add Women on Boards; BlackRock, Vanguard, State Street get behind shareholder bids.
Laura Colby – Bloomberg
BlackRock, Vanguard, State Street get behind shareholder bids; This story is part of a series on the future of investing
The big money on Wall Street is finally throwing its weight behind boardroom diversity.
/goo.gl/o4uEv5

The Central Risk Book: Rethink Risk, Rethink Trading
Larry Tabb – TABB Forum
What if risk management within a bank could be used to manage profitability as well as risk?
jlne.ws/2klt4pt

How to Grow When You Have 100% Market Share, Swedish CEO Asks
Hanna Hoikkala and Niklas Magnusson – Bloomberg
The world’s electronics companies manufacture 4 billion advanced flat-panel displays a year for smartphones, TVs and tablets, and every one of them is made with technology from a little-known Swedish company. While 100 percent market share might be the dream of many executives, for Lena Olving at Mycronic AB, it’s a challenge.
/goo.gl/QLCwVG

Are Top-Managed Companies a Good Investment?; The Drucker Institute will launch an exchange-traded fund that aims to find out
Ken Brown – WSJ
Peter Drucker is a legend among management consultants. But can he pick stocks? The late Mr. Drucker built his legacy telling executives to focus on “doing the right things well.” That advice has been distilled into the Management Top 250 ranking of the most effectively managed U.S. companies. Next they will be turned into an investment product to see whether Mr. Drucker’s philosophy can make money for investors.
/goo.gl/52xvEb

Exchanges, OTC and Clearing

NYSE’s Owner Resists Rushing Into Bitcoin; ICE’s Sprecher raises doubts about the wisdom of being the first U.S. exchange to offer bitcoin futures
Alexander Osipovich – WSJ
The owner of the New York Stock Exchange is taking a wait-and-see approach to bitcoin, even as two of his main competitors prepare for the launch of futures markets based on the fast-rising cryptocurrency.
/goo.gl/ns3dtc

Tokyo Financial Exchange Takes First Step Toward Bitcoin Futures
Daisuke Sakai and Yuji Nakamura – Bloomberg
Working group planned to start analyzing bitcoin in January; Legislation would be needed for Japan to copy U.S. moves
One of Japan’s leading financial exchanges is starting preparations to launch bitcoin derivatives, echoing U.S. rivals that plan to list contracts tracking the cryptocurrency as soon as this month.
/goo.gl/Lqknin

Gartman says Cboe is giving bitcoin some ‘legitimacy,’ but he’s still not buying; Bitcoin’s value may have nearly doubled over the past month, but Dennis Gartman still isn’t biting; Still, Gartman says he thinks the Cboe’s bitcoin futures trading lends the cryptocurrency “some sense of legitimacy.”
Chloe Aiello – CNBC
Bitcoin has almost doubled in value since November, when commodities king Dennis Gartman last disparaged the cryptocurrency. Bitcoin’s biggest bear still won’t bite, though.
/goo.gl/UynrHQ

Ex-head of global markets at Bloomberg joins bond trading start up; George Harrington worked at Bloomberg for more than 10 years and most recently at Eris Exchange in global business development.
Hayley McDowell – The Trade
The former head of global markets at Bloomberg has joined a Toronto-based fixed income trading platform start up to lead its expansion into the US.
/goo.gl/H1ejPT

Cboe Europe hires block trading sales veteran from Liquidnet; Matt Beales joined Cboe LIS last month after building buy-side relationships at Liquidnet for 15 years.
Hayley McDowell – The Trade
A block trading sales veteran at Liquidnet has left the firm to join Cboe Europe in a senior role overseeing sales for the exchange’s large-in-scale (LIS) trading platform.
/goo.gl/eYgUP6

Cboe Futures Exchange (CFE) Authorized To Provide Automated Trading Services In Hong Kong; CFE to allow Hong Kong firms to become trading privilege holders (TPHs); connect directly to CFE; Cboe Global Markets opens office in Hong Kong as exchange’s Asian outreach continues
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today announced that Cboe Futures Exchange (CFE) recently received approval in Hong Kong to allow corporations that are licensed by the Hong Kong Securities and Futures Commission under Part V of the Hong Kong Securities and Futures Ordinance to become CFE Trading Privilege Holders (TPHs).
/goo.gl/pgm4kN

Deutsche Boerse to use access cash for buy backs, acquisitions
Reuters Staff
Deutsche Boerse has agreed to launch a new share buy back worth roughly 200 million euros ($237 million), the German stock exchange operator said in a statement on Tuesday.
/goo.gl/npJAxr

No changes in the stock indices of Deutsche Börse; Rebalancing of the indices effective 18 December 2017
Deutsche Börse Group
Deutsche Börse reviewed the composition of its stock indices on Tuesday. In the indices DAX, MDAX, SDAX and TecDAX there are no changes to this regular date. The quarterly rebalancing of indices with the unchanged composition will take effect on 18 December 2017.
/goo.gl/YJ7T5s

LCH’s SwapClear expands Australian Dollar offering
LCH
LCH, a leading global clearing house, today announced that it has extended its SwapClear service to offer clearing of Australian Dollar BBSW vs AONIA overnight basis swaps (AUD BOBs). With SwapClear clearing approximately 85% of the the AUD interest rate derivatives market today, this addition will enable members and their clients to clear AUD BOBs alongside their existing SwapClear portfolio of interest rate derivatives. This allows participants to potentially achieve improved margin efficiencies by recognising offsets between AUD BOBs exposures and other interest rate derivative exposures in SwapClear.
/goo.gl/Av9qvj

TMX Group Consolidated Trading Statistics – November 2017
TMX
TMX Group Limited today announced November 2017 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange (Alpha), Montréal Exchange (MX) and NGX.
/goo.gl/i8kUKD

INTERCONTINENTAL EXCHANGE REPORTS NOVEMBER STATISTICS
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today reported November 2017 trading volume and related revenue statistics, which can be viewed on the company’s investor relations website at http://ir.theice.com/ir-resources/supplemental-information in the Monthly Statistics Tracking spreadsheet.
/goo.gl/UUxdKo

CME Group Inc. (Nasdaq: CME) to Ring The Nasdaq Stock Market Opening Bell in Celebration of Its 15th Anniversary
By GlobeNewswire
CME Group Inc. (Nasdaq:CME), the world’s leading and most diverse derivatives marketplace, will visit the Nasdaq MarketSite in Times Square in celebration of its fifteenth anniversary.
/goo.gl/sV4ZHA

LSEG Board Appointment
London Stock Exchange Group
London Stock Exchange Group plc (LSEG) today announces that Val Rahmani will join the Group Board as an Independent Non-Executive Director, with effect from 20 December 2017. Val brings considerable technology knowledge and expertise, which will be of significant benefit as we continue to build on our position as a global financial markets infrastructure provider. Val has previously been a non executive director of Aberdeen Asset Management and is currently a Non executive director of US listed companies RenaissanceRe Holdings Ltd and Computer Task Group, Inc.
/goo.gl/ejvH8e

SGX reports market statistics for November 2017
SGX
Securities – Total Securities market turnover value was at S$28.5 billion, up 19% month-on-month (m-o-m) and down 3% year-on-year (y-o-y), over 22 trading days. There were 21 trading days in October 2017 and 22 in November 2016.
Derivatives – Total Derivatives volume was 18.0 million, up 21% month-on-month (m-o-m) and up 9% year-on-year (y-o-y).
/goo.gl/ZQQCHk

Japan Exchange Group Joins the Sustainable Stock Exchanges Initiative
JPX
Japan Exchange Group, Inc. (JPX) has joined the Sustainable Stock Exchanges (SSE) initiative today as a partner exchange.
/goo.gl/gUQvJ5

Icap European Sef faces axe as US, EU reach equivalence deal; Dual-registered venue no longer necessary under US-EU substituted compliance regime, say lawyers
Joanna Wright – Risk.net
Mutual recognition of trading venues by European Union and US regulators, agreed on December 5, could spell the end for TP Icap’s dual-registered swap execution facility in Europe.
/goo.gl/hwESZ2

Fintech

Cappitech Enables Regulatory Reporting on AccessFintech’s Exception Network
Cappitech
Cappitech Regulation, a RegTech firm specializing in automating regulatory transaction reporting for investment firms, has concluded integration of its Capptivate platform with AccessFintech’s ecosystem. With the integration, AccessFintech users can incorporate Capptivate’s MiFID II and EMIR reporting, tracing regulatory reporting exceptions in its life cycle management portal.
/goo.gl/Wb6mkL

Martin Adams Joins CloudMargin as Head of Client Operations
CloudMargin
CloudMargin, the multi-award winning creator of the world’s first web-based collateral and margin management solution, announced that Martin Adams has joined the firm’s senior leadership team as Head of Client Operations. Adams is a 26-year veteran of derivatives operations, with extensive experience in over-the-counter (OTC) and listed derivatives, as well as fixed income and foreign exchange (FX) products.
jlne.ws/2BNWssW

Welcome to the API World
Rival Systems
In the current technology ecosystem, APIs have come to hold a critically important role and the future promises an even greater status for them going forward. But why are APIs so important, what are some of the ways trading firms utilize an API to support their operations, and what should you look for when evaluating an API?
/goo.gl/mo2PAB

The Crypto Company Launches First Phase of Trading Operations for Digital Currencies OTC Markets:CRCW
The Crypto Company (OTC:CRCW), one of the first publicly traded technology companies in the digital currencies and blockchain sector, today announced the Crypto Company’s first group of traders will actively trade the most liquid cryptocurrencies using in-house capital. The Company’s full plans call for the build-out of a full-scale trading floor with high capacity for experienced crypto traders. The company is in the process of spearheading the development of high frequency trading (HFT) and program trading software platforms specifically for the cryptocurrency markets. These future phases are under development and require complex technology due to regulatory and security concerns unique to the crypto markets.
/goo.gl/aHPqTs

Bitcoin miner: ‘I haven’t paid for heat in three years’
Krystal Hu – Yahoo Finance
It was roughly 30 ºF outside in Durham, North Carolina, on a recent day in late November, but Rahdi Fakhoury’s 1650-square-foot house was so warm he left a window open a bit. The heater he was using? Two bitcoin mining machines and two Ethereum mining machines.
/goo.gl/MwGVRZ

Politics

GOP Tax Plan: Live Coverage
WSJ
Join WSJ’s tax-policy experts to follow the twists and turns of Congress’s attempt to make the most significant tax-code changes since 1986. Two New Polls Show Majorities Opposed to GOP Tax Plan
/goo.gl/hkoExk

Gundlach says ‘strange environment’ to be cutting U.S. corporate taxes
Jennifer Ablan – Reuters
DoubleLine Capital Chief Executive Jeffrey Gundlach, who voted for President Donald Trump, warned on Tuesday that it is a “strange environment” to be cutting U.S. corporate taxes with the economy already in its eighth year of expansion.
/goo.gl/N6an1J

Ray Dalio Says End of the SALT Deduction Will Further Divide the Nation
Katia Porzecanski and Hema Parmar – Bloomberg
Billionaire Ray Dalio said the expected elimination of state and local income-tax deductibility proposed by lawmakers will take a toll on high-tax areas due to lower revenues as high-income earners move out of state.
/goo.gl/wNWw7V

The GOP Tax Plan Would Make America’s Housing Crunch Even Worse
Patrick Clark – Bloomberg
Changes could send already low U.S. home inventories lower; Losing deductions will be especially tough in high-tax states
In San Francisco and Scarsdale, Jersey City and Greenwich, the real estate talk is the same: Just how bad will this Republican tax overhaul hurt?
/goo.gl/TYsfdy

Fate of $700 Billion Power Trade Hinges on One Trump Buzzword
Naureen S Malik , Mark Chediak , and Jim Polson – Bloomberg
Energy Department wants to prop up struggling coal and nuclear; Utilities focus on protecting power lines from extreme weather
Hurricane winds and raging wildfires knocked out power to millions of people from Florida to California this year, underscoring the need to protect America’s electric grid from disaster.
/goo.gl/RjZg5K

Regulation

SEC in Transition: Commission Appoints a Fixed Income Advisory Committee
Anthony Perrotta – TABB Forum
The evolution of equity market structure began in the early 1970s and continues today. Changing the structural makeup of large financial markets takes time. More important, it takes effort, expertise, and compromise. As the SEC embarks on its first foray into an assessment of fixed income market structure, the endeavor will be challenging; Rome was not (re)built in a day.
jlne.ws/2knqxLG

Bipartisan Bank-Relief Bill Wins Approval From Senate Panel
Elizabeth Dexheimer – Bloomberg
Midsize lenders would lose too-big-to-fail label in Crapo plan; Democrats’ support boosts chances measure get through Congress
A key U.S. Senate panel has cleared a bill that could bring financial firms a significant chunk of the regulatory relief they’ve sought since the Dodd-Frank Act became law in 2010.
/goo.gl/PLXAwX

Trump Team to Slash Budget, Staff at Financial-Data Office; Office of Financial Research Director Richard Berner, who is stepping down at the end of the year, is scheduled to testify before a House committee on Thursday. The agency has been told to expect budget and staffing cuts.
Ryan Tracy – WSJ
The Trump administration has told employees of the U.S. Office of Financial Research to expect deep budget and staffing cuts, according to people familiar with the matter, the latest example of its efforts to undo policies put in place under former President Barack Obama.
/goo.gl/6KDNWW

EU and US reach agreement on derivatives trading ahead of MiFID II; Decision means banks and traders can use US venues to trade derivatives in compliance with MiFID II.
Hayley McDowell – The Trade
The European Commission and the derivatives regulator in the US have agreed on terms, which will see mutual recognition of trading venues weeks before MiFID II.
/goo.gl/6g4jHB

Verena Ross Keynote Speech at ICI Global Conference
ESMA
Today, Verena Ross, Executive Director, gave a keynote address at the ICI 2017 Global Capital Markets Conference in London. The full text of her speech can be found here.
/goo.gl/XRFNLq

ESMA latest Risk Dashboard sees no change in overall risk levels
ESMA
RISK ANALYSIS & ECONOMICS – MARKETS INFRASTRUCTURE INVESTORS
The European Securities and Markets Authority (ESMA) has issued today the Risk Dashboard No.4 2017, covering risks in the EU’s securities markets for Q3 2017. ESMA’s overall risk assessment remains unchanged from Q2 at high levels.
/goo.gl/Fd8Heb

6 Tips To Stay Safe Online This Holiday Season
KAITLYN KIERNAN – FINRA
Do crowded stores spewing holiday music sound like your worst nightmare? Would you rather kick back on the couch and do your shopping from home? If so, you aren’t alone. More Americans than ever are opting online over long lines to check off gifts from their holiday shopping list.
/goo.gl/UpxPQS

Former Company Insider Earns More Than $4.1 Million for Whistleblower Tip
SEC
The Securities and Exchange Commission today announced an award of more than $4.1 million to a former company insider who alerted the agency to a widespread, multi-year securities law violation and continued to provide important information and assistance throughout the SEC’s investigation. The whistleblower is the third awarded by the SEC in the past week.
/goo.gl/s1BwJV

Podcast: CFTC Talks EP020: Roundtable with CFTC leaders on Bitcoin
CFTC
This week on CFTC Talks, we bring on a roundtable panel made up of CFTC leaders to discuss what Bitcoin is, what the…
/goo.gl/fHkgZA

Using artificial intelligence to keep criminal funds out of the financial system
UK FCA
Speech by Rob Gruppetta, Head of the Financial Crime Department at the FCA, delivered to the FinTech Innovation in AML and Digital ID regional event, London.
/goo.gl/dBt6se

FCA fines Bluefin £4m for misleading customers
UK FCA
The Financial Conduct Authority (FCA) has today fined Bluefin Insurance Services Limited (Bluefin) £4,023,800 for having inadequate systems and controls and failing to provide information to its customers about Bluefin’s independence in a way that was clear, fair and not misleading.
/goo.gl/1fM3Jr

Further success in reducing pension funds’ costs and charges
UK FCA
Actions taken by the FCA, the DWP and pension providers, together with Independent Governance Committees (IGCs) and trustees, result in lower costs and charges to consumers on about £24.9bn in workplace pension schemes.
/goo.gl/3EH8qr

Investing and Trading

Gundlach Says Yellen’s Legacy at the Fed Is Looking ‘Pretty Good’
John Gittelsohn – Bloomberg
Manager sees no evidence of recession on horizon in next year; Powell may find attaining consensus ‘is not going to be easy’
Billionaire bond manager Jeffrey Gundlach says Janet Yellen’s legacy as Federal Reserve chair looks strong because she started raising interest rates and reducing the Fed balance sheet.
/goo.gl/pf9rhA

Disrupt This! Innovation ETFs are storming the market
Chris Taylor – Reuters
Amazon.com (AMZN.O) is disrupting retail. Airbnb is disrupting hotels. Uber is disrupting transportation. Who is going to be disrupted next?
/goo.gl/iJRsCi

This artificial intelligence ETF is one of the most popular fund launches of 2017
Ryan Vlastelica – MarketWatch
One of the most notable success stories on Wall Street in 2017 isn’t exactly a human-interest story. The AI Powered Equity ETF AIEQ, -0.94% an exchange-traded fund that uses artificial intelligence technology to select the stocks it holds, has emerged as one of the most successful new funds of the year, proving so popular with investors that it has stunned its own (human) creators.
/goo.gl/aTjzFZ

Opinion: Only ‘sheeple’ are buying bitcoin at this point
Jared Dillian – MarketWatch
This tweet was getting retweeted all over the place recently. Apologies for the bad language.
/goo.gl/74omM4

Famed trader Mark Fisher: Bitcoin is very similar to the silver run in the 1970s; “Bitcoin was what silver was back in the late ’70s and ’80s — for sure,” MBF’s Mark Fisher says.
Berkeley Lovelace Jr. – CNBC
Bitcoin’s run is very similar to that of silver’s nearly 40 years ago, renowned trader Mark Fisher told CNBC on Tuesday.
/goo.gl/QYrrZz

Making the Case for Bitcoin $400,000
Bloomberg Markets
Mark Yusko, founder and chief investment officer at Morgan Creek Capital Management, makes the case for how bitcoin’s value can reach $400,000. He speaks with Bloomberg’s Jonathan Ferro on “Bloomberg Markets: The Open.”
/goo.gl/yJHt5j

Bitcoin Soars Past $12,000 as Futures Move Closer to Reality
Dave Liedtka – Bloomberg
Bitcoin surpassed $12,000 for the first time amid speculation that the widespread use of futures will help lead to digital currencies being viewed as a legitimate asset class for mainstream investors.
/goo.gl/FZ2igZ

Copper Is Flashing Red as Stockpiles and Spreads Point Bearish
Mark Burton – Bloomberg
Spreads and inventories signal the market isn’t short of metal; Concerns are creeping in about the strength of Chinese demand
Copper is coming off the biggest one-day slump in two years and the mood in the market is souring. Even though prices are still up dramatically this year, here are four reasons traders are cautious for the future.
/goo.gl/V2bnML

Low Food Prices Are Hurting Farm State Economies; Iowa and South Dakota’s economies shrink as farmers add to a global food glut
Sharon Nunn and Benjamin Parkin – WSJ
Farmers are producing too much food, holding down prices and holding back economies in states with big agricultural industries.
/goo.gl/TczsP8

Stockpickers, Rejoice! Correlations Are Falling Again; The correlation between S&P 500 sectors last week fell below 20%, near its lowest level ever
By Chelsey Dulaney – WSJ
U.S. stock-sector movements haven’t been this disjointed in nearly two decades.
/goo.gl/4eQB28

Institutions

Bank Failure Could Still Spark Crisis, Treasury Researcher Says
Ben Eisen – WSJ
The failure of a large financial institution could still set off or magnify a crisis, according to a report published Tuesday by an independent arm of the U.S. Treasury Department.
/goo.gl/L6Cdjo

Broker and adviser Numis sees share price dip despite strong profits
Lucy White – Telegraph
City stockbroker and corporate adviser Numis has seen its share price dip this morning, despite a healthy increase in revenues and profits.
/goo.gl/bVTMzh

E*TRADE to Host Interactive Options Forum; New to options or want a refresher on the basics? Trading options and ready to dive even deeper?
BUSINESS WIRE
E*TRADE Financial Corporation (NASDAQ: ETFC) today announced it will host its interactive Options Forum on Saturday, December 9, 2017. The online virtual event offers a number of complimentary sessions for investors and traders who are looking to start trading options or to take their options trading to the next level. Options Forum sessions run from 11:00 a.m. to 6:15 p.m. ET. At this event, attendees will:
/goo.gl/tBCHH9

Regions

Malaysia 1MDB Scandal Is ‘Kleptocracy at Its Worst,’ Sessions Says
Elffie Chew – Bloomberg
Some $4.5 billion were allegedly laundered via opaque deals; Justice seeking to seize $1.8 billion in assets linked to 1MDB
The alleged corruption related to a Malaysian state investment fund is “kleptocracy at its worst” and the U.S. is working to provide justice to the victims, Attorney General Jeff Sessions said on Monday.
/goo.gl/YzSRBu

Maduro’s cryptocurrency to fare no better than Venezuela itself: analysts
Brian Ellsworth – Reuters
Venezuela’s plan to create an oil-backed cryptocurrency faces the same credibility problems that dog the ruling Socialist Party in financial markets and is unlikely to fare any better than the struggling OPEC member itself, investors and technical experts say.
/goo.gl/VFnukM

In the World’s Strangest Bull Market, Most Stocks Are Falling
Jeanny Yu – Bloomberg
Shanghai Composite’s gain has left a majority of shares behind; It’s a break with history and makes the gauge a global outlier
Every bull market is unique, but the one in China right now looks downright strange.
/goo.gl/GdfrX7

Eurozone members split over Brussels’ reform plan; Blueprint to reshape single currency area will include idea of European Monetary Fund
Jim Brunsden and Mehreen Khan in Brussels – FT
The European Commission is facing resistance from Berlin and other capitals to the ambitious blueprint for eurozone reform that it will lay out on Wednesday.
/goo.gl/5SR7fW

Hong Kong’s Surging Stocks Are Too Hot for Beijing; Mainland Chinese regulators have moved to tamp down the city’s market, which has outperformed Shanghai, Shenzhen this year
Steven Russolillo in Hong Kong and Shen Hong in Shanghai – WSJ
Chinese regulators have succeeded in cooling the mainland’s once-volatile stock markets this year. Now, their attention is turning to Hong Kong.
/goo.gl/vLUQMw

Brexit

Most Brits Still Want Brexit But Expect It All to End Badly
Robert Hutton – Bloomberg
Survey finds majority think May is mishandling divorce talks; May has until end of week to get derailed talks back on track
British voters increasingly think Brexit is being mishandled. But that doesn’t mean they’re turning their backs on the idea of abandoning the European Union — just on Prime Minister Theresa May’s Conservative government.
/goo.gl/tMxWgF

With Brexit Talks Torpedoed, Hammond Makes a Pitch for Finance
Flavia Krause-Jackson – Bloomberg
A day after debacle in Brussels, chancellor addressed the City; Calls to protect ‘durable and fair’ trading arrangements
Hammond tried to reassure the world of finance about his government’s aim to preserve London as a world-leading financial center.
/goo.gl/eZfDzd

With Brexit Talks Torpedoed, Hammond Makes a Pitch for Finance
Flavia Krause-Jackson – Bloomberg
A day after debacle in Brussels, chancellor addressed the City; Calls to protect ‘durable and fair’ trading arrangements
Hammond tried to reassure the world of finance about his government’s aim to preserve London as a world-leading financial center.
/goo.gl/eZfDzd

Blocking a Brexit divorce deal is a high-stakes game; It is in everyone’s interests to help Theresa May keep the show on the road
fastFT
One does not often lose money betting on the intransigence of Northern Ireland’s Democratic Unionist party. With Theresa May’s government dependent on DUP backing, the party’s decision to block a carefully crafted deal that would unlock the next phase of Brexit talks was an accident waiting to happen. However, it is also a mistake that could have serious consequences for all concerned — not least the DUP.
/goo.gl/eZGkVN

Bank of England mulls ordering banks to raise buffers against disorderly Brexit =Tim Wallace – Telegrap
Banks could be ordered to set aside another £5bn to guard against the risk of a disorderly Brexit which threatens to cut finance firms off from their continental customers, the Bank of England has said.
/goo.gl/hmm6zA

Miscellaneous

TheStreet cuts staffers, refocuses on subscriptions
Max Willens – Digigday
TheStreet is pivoting to consumer revenue in 2018 after forays into video and branded content failed to take off.
/goo.gl/EK6Ua1

The post ‘We may be stupid’ for waiting on bitcoin futures, NYSE owner says; New York Stock Exchange owner ICE holds back on crypto-futures; CME fee rises vex struggling high-speed trading industry appeared first on John Lothian News (JLN).

First Read

Hits & Takes

Wedbush’s margin policy for bitcoin trading found its way to my inbox. In order to trade the Cboe bitcoin futures, a trader must have a minimum equity of $10K in their account. For accounts under $1 million in total equity, the margins are two times the exchange minimums. For the CME’s bitcoin futures, the account size is $50K minimum and if less than $5 million, you get double exchange margins. ~JJL

STA Chicago’s marketing material for the 92nd Annual Mid-Winter Meeting – held Jan 10 through 12 – is Game of Thrones themed. *tips cap* ~SD

Asia Pacific Financial News from John Lothian News – December 6, 2017 ~JJL

There were 53,400 original impressions with 146 tweets yesterday for Twitter account @JohnLothian. ~JJL

Bitcoin trader Sean Ristau is starting a new position as director, exchange integration & education at bcause, LLC. ~JJL

The latest edition of the CFTC Talks podcast was released this week. In it, they put together a “roundtable panel made up of CFTC leaders to discuss what Bitcoin is, what the self-certification process of new contracts on Bitcoin is, and what the CFTC role in regulating the new derivatives contracts is. Panelists include: LabCFTC’s Daniel Gorfine, DMO’s Amir Zaidi, DCR’s Brian Bussey and DSIO’s Matt Kulkin.” ~SD

Net Neutrality Update: If you are interested, today there will be nationwide protests in support of net neutrality at Verizon stores (and a few other places). Verizon because Ajit Pai, chairman of the FCC, used to be associate general counsel for the company. You can find a location near you here. ~JB

++++

Two Powerful Futures Industry Female Leaders Step Down
By John J. Lothian

Kim Taylor of the CME Group and Maureen Downs of RCG have stepped down from prominent positions of power in the futures industry in the last couple of weeks.

Downs has stepped down as president of RCG, a position she was named to in 2007. She is also the vice chairman of the board of directors of the National Futures Association, though her board seat is up in February of 2018.

Taylor stepped down as president, global operations, technology and risk at the CME Group recently. She was named to the position on December 9, 2016 after Terry Duffy ascended to the CEO role at the CME on November 11, 2016, replacing Phupinder Gill.

For the rest of the story, go HERE

++++

Quantitative Brokers Appoints Ralf Roth as CEO
BusinessWire
Quantitative Brokers has appointed Ralf Roth as Chief Executive Officer and named Thomas Ascher as Executive Chairman.
jlne.ws/2BNKXSf

***** Quality moves for a quantitative firm.

++++

Breaking Through: Brynne Kelly, Part 2
Trading Technologies
For Part 1 of this interview between our VP of Customer Success Kara Grygotis and Brynne Kelly, see Breaking Through: Brynne Kelly, Part 1.
Kara: You’ve mentioned that your time trading electricity at Aquila was a key moment because the relationships you formed there created opportunities throughout your career. That leads into my next question: what do you do to get, network or exchange information, whether it’s from other traders or peers or an online source now? What’s your information-gathering mechanism?
jlne.ws/2BNGQWp

**Interesting interview of the then and now with an energy trader.~JK

++++

BOX Appoints Two New Directors; Sean Flynn and John F. Sandner Will Oversee Growing Exchange
BOX Options Exchange LLC
BOX Options Exchange LLC, an innovator in market structure and client services, is pleased to announce the additions of Sean Flynn and John F. Sandner to the Exchange Board of Directors.
/goo.gl/6H6Ufb

***** Tony McCormick pal and former CME chairman Jack Sandner joins the BOX board.~JJL

++++

R.J. O’Brien Wins 2017 FOW International Award for Best Non-Bank FCM
RJO
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, has won the 2017 FOW International Award for Best Non-Bank Futures Commission Merchant (FCM) of the Year – earning the honor for the second consecutive year.
/goo.gl/FaUwhF

***** They also won an award for the best non-bank independent clearing firm and futures commission merchant with an Irish name.~JJL

++++

Wednesday’s Top Three
Yesterday’s top stories were led by Craig Pirrong’s piece on, what else, bitcoin, in the
Streetwise Professor’s Bitcoin Futures: What? Me Worry?. Second went to the Financial Times’ CME fee rises vex struggling high-speed trading industry. Third went to John Lothian’s piece The Silent Screams of the Bitcoin Shorts

MarketsWiki Statistics Sponsored by Level Trading Field

114,042,530 pages viewed 22,931 pages 210,781 edits

++++

Lead Stories

Wall Street banks push back on launch of bitcoin futures
Philip Stafford in London – FT
Draft letter to US regulators says financial system ill-prepared for cryptocurrencies
The world’s largest banks are pushing back on the introduction of bitcoin futures, raising concerns with US regulators that the financial system is ill-prepared for the launch of the contracts as the value of the volatile cryptocurrency has soared.
/goo.gl/36x71N

Traders Want to Know What Exchanges Earn From Market Data; Banks, asset managers ask SEC to regulate exchanges’ market-data feeds
By Dave Michaels – WSJ
Some of Wall Street’s biggest banks, asset managers and high-speed trading firms have united in a battle over a shared adversary: stock exchanges and the profit they earn from selling market data.
/goo.gl/26BY84

Blockchain Scores Major Win as Aussie Exchange Plans Shift
Matthew Burgess and Vivek Shankar – Bloomberg
ASX will use Digital Asset Holdings technology to track trades; Cash debt market may also see switch, says bourse CEO Stevens
Australia’s main stock exchange just announced one of the finance industry’s biggest bets yet on blockchain.
/goo.gl/Cxr6pR

Coinbase: The Heart of the Bitcoin Frenzy
Nathaniel Popper – NY Times
The booming stock market of the 1920s had the New York Stock Exchange. The tech bubble of the 1990s had Nasdaq and E-Trade. And the virtual currency market of the last year has had Coinbase.
/goo.gl/PZFGcy

Business is becoming a battle of the giants; The rise of Amazon, Facebook and Google means antitrust rules need to be rewritten
John Gapper – FT
The biggest influence on this week’s $69bn deal by CVS Health, the US pharmacy chain, to acquire the insurer Aetna, went unmentioned. The threat of Amazon selling prescription drugs is shaking up the US healthcare industry.
/goo.gl/RF68m9

Bitcoin Shakes Off Bubble Warnings in Race Past $15,000 Mark
Natasha Doff and Adam Haigh – Bloomberg
New network designed to streamline trading tested successfully; Brokerages say plans for futures contracts rushed to market
Bitcoin touched $15,000 for the first time on Thursday, extending its advance this month to more than 50 percent as concerns mounted the cryptocurrency’s rapid rise masks risks.
/goo.gl/Rnge34

Bitcoin to start futures trading, stoking Wild West worries
John McCrank, Anna Irrera – Reuters
Bitcoin fans are salivating over the potential of long-awaited legitimacy for the cyptocurrency when futures trading launches this weekend, but experts worry the risks associated with bitcoin’s Wild West-like nature could overshadow the debut.
/goo.gl/9JqZCz

Hackers Steal $70 Million in Bitcoin; Theft prompts shutdown of NiceHash, which markets itself as the largest cryptomining marketplace
Steven Russolillo – WSJ
Nearly $70 million worth of bitcoin was stolen from a cryptocurrency-mining service called NiceHash following a security breach, causing the company to halt operations for at least 24 hours.
/goo.gl/KM9BPo

Bitcoin hits $15,000 and is already trading at $19,000 in Korea
Stan Schroeder – Mashable
If you bought 1 bitcoin yesterday, it would’ve cost you $12,000 and someone in your family probably would’ve called you a mad man. Just one day later, however, you’d be able to sell that bitcoin for $15,000.
/goo.gl/T4MxNi

Digital currency exchange NiceHash says bitcoin worth nearly $64 million hacked
Reuters Staff
Cryptocurrency marketplace NiceHash said the contents of its bitcoin wallet had been stolen in a security breach and one executive said nearly $64 million had been lost.
/goo.gl/eLU6As

You Can Have Your Momentum Factor and Eat it Too
AQR
My colleagues’ new paper Implementing Momentum examines the real world applicability of systematic momentum investing. Momentum is one of the strongest, if not the strongest, of the major market “anomalies” documented in the literature. But most academic studies ignore real world costs and other forms of slippage when examining factors, which is likely a larger issue for momentum due to its higher turnover. The concern is that momentum is so costly to trade that its return premium is diminished in the real world.
/goo.gl/ahrrA1

Bitcoin Futures Criticized by Brokers for Overlooking Risks
Sam Mamudi – Bloomberg
Futures Industry Association sends critical letter to CFTC; Two major U.S. bourses will debut bitcoin contracts this month
Some of the world’s biggest derivatives brokerages criticized plans by U.S. exchanges to offer bitcoin futures and options, saying the contracts have been rushed to market without proper consideration of the risks.
/goo.gl/fohCPf

Mifid II impact on investment banking ‘exaggerated’; Less than 3% of investment banks’ annual revenue from Emea will be eroded, report says
Laura Noonan in London – FT
The much-hyped EU Mifid II investor protections coming into force on January 3 will erode less than 3 per cent of investment banks’ annual revenue from Europe, the Middle East and Africa, a new study has found.
/goo.gl/qT46Sq

U.S. and EU Ink Deal on Derivatives Trading; Agreement smooths concerns ahead of EU rules that kick in Jan. 3
Gabriel T. Rubin – WSJ
European Union banks and other firms that trade derivatives can continue to use U.S. trading platforms once new EU rules come into effect next month, the European Commission said Tuesday.
/goo.gl/uDRaqM

Bitcoin Bears Are Excited About Futures; But will shorting bitcoin keep the price a little closer to reality?
Matt Levine – Bloomberg
Bitcoin futures start trading next week, and people who have spent the last few years convinced that bitcoin is a dumb bubble are very excited to finally be able to put their money where their mouths are and start shorting bitcoin. But is this right?
/goo.gl/fDspBd

Exchanges, OTC and Clearing

The Great Bitcoin Futures Race
Themis Trading
Over the years, we have documented numerous examples of conflicts of interests at the major, for-profit stock exchanges. We understand that exchanges are public companies and they need to grow the bottom line. But in their quest to increase shareholder wealth, they have often cut corners and introduced products which have advantaged their largest customers at the expense of long term investors.
jlne.ws/2BO1PZb

ASX selects distributed ledger technology to replace CHESS
Reuters Staff
Australia’s main bourse ASX Ltd on Thursday said it would replace its existing technology used to record shareholdings and manage the clearing and settlement of equity transactions in Australia, with blockchain developed by its technology partner Digital Asset (DA).
/goo.gl/K4CaCG

ASX chooses blockchain for equities clearing; Australian bourse becomes first big exchange to commit to the technology
Jamie Smyth in Sydney – FT
The Australian Securities Exchange is planning to use blockchain technology to manage the clearing and settlement of equities.
/goo.gl/BWBMpN

Australia is now home to the world’s first blockchain-based stock exchange
Zheping Huang – Quartz
The Australian Securities Exchange (ASX) said today (Dec. 7) that it would use blockchain to clear and settle trades, becoming the world’s first mainstream equity market to employ the technology behind bitcoin for its core services.
/goo.gl/QnYq3P

ASX Selects DLT to Replace CHESS – Media Release 7 December 2017
ASX
/goo.gl/by7MVW

FinClear joins Australian third-party clearing market with Dion Global
Finextra
Dion Global Solutions (Dion | BSE: 526927) announced that FinClear is live on their comprehensive front to back technology solution – TradeCentre and iBROKER. FinClear, the Australian clearing and settlement provider, is the only third-party equities clearer to be admitted to the ASX in two years.
/goo.gl/QCZDiB

Australia’s stock exchange is moving to a blockchain style system for trade settlements
Chris Pash – Business Insider
Australia’s equity market the ASX has decided to replace its CHESS system to record changes in shareholding with distributed ledger technology found in blockchain.
/goo.gl/AS2q1j

Eurex Exchange takes home two FOW awards
Eurex
The winners of this year’s FOW International Awards were unveiled at yesterday’s annual gala dinner in London. Eurex took home the award for “Most Innovative New Contract” in the category equities and equity indexes as well as “Prop Traders’ Exchange of the Year.”
/goo.gl/d86Z1T

Nasdaq SMARTS Receives FOW Award for Best New Technology Product – Market Surveillance
GlobeNewswire
Nasdaq (Nasdaq:NDAQ), the world’s leading provider of market technology, was selected as having the ‘Best New Technology Product – Market Surveillance’ in this year’s FOW International Awards. Nasdaq’s SMARTS Surveillance solution received the award for its Depth View, which enables compliance analysts to visualize order-book imbalance with alert-specific views of large data sets – allowing for effective processing of information and more efficient surveillance.
/goo.gl/uRY128

SGX proposes to enhance continuous disclosure rules
SGX
Singapore Exchange (SGX) is proposing to recalibrate disclosure requirements under the Listing Rules for areas of concern to both the market and the exchange.
/goo.gl/jLhd3K

Bittrex Customers Locked Out: Are Crypto Exchanges Ready for Bitcoin?
Bitcoin.com
Bittrex users took to social media to voice their concerns: something is wrong at the third largest cryptocurrency exchange in the world. Customers openly complain they’re having issues with withdrawals, and this has been going on for weeks. Certainly every popular platform has had its share of problems with runs in the wake of price spikes, but until yesterday the exchange offered no formal, public explanation.
/goo.gl/pA9YPZ

Fintech

Hanweck to Add Real-Time Analytics on Bitcoin Futures as of December 10, 2017
Hanweck
Hanweck, a leading provider of real-time risk analytics on global derivatives markets, today announced that it will expand its real-time futures analytics offering to cover bitcoin futures scheduled to launch on the Cboe Futures Exchange (CFE) on Sunday, December 10, 2017. Hanweck will also offer analytics on the CME’s bitcoin futures contract when it debuts on December 17, 2017, for trade date of December 18. Hanweck will calculate risk vectors for the bitcoin futures as part of Hanweck Scenario Analytics.
jlne.ws/2AYHjaA

Fidessa voted Trading System of the Year at FOW Awards; F&O platform wins for the sixth consecutive year
Fidessa group plc
Fidessa group plc (LSE: FDSA) today announced that its futures and options trading platform has been named Sell-side Trading System of the Year at the FOW International Awards for the sixth successive year. Judged by a panel of industry experts drawn from across the market, the awards recognise the best and brightest innovations in the derivatives industry.
/goo.gl/Gp9qP1

Trillium Announces Q4 Feature Releases For Its Surveyor Trade Surveillance Platform
PRNewswire
Trillium today announced a new slate of covered markets and new detection filters for its award-winning Surveyor trade surveillance platform.
Surveyor now supports surveillance of trading on ICE’s U.S. and European futures exchanges, the Cboe Futures Exchange, Eurex’s futures exchanges, and Euronext’s equity and index derivatives products.
jlne.ws/2AU9VSl

Axioma Taps UBS Delta’s Ian Lumb to Lead Risk Solutions
WatersTechnology
Former UBS Delta global head Ian Lumb has joined risk management technology provider Axioma as the vendor’s new head of risk solutions.
jlne.ws/2BPIYgj

The most explosive cryptocurrency these days is not bitcoin
Shawn Langlois – MarketWatch
Bitcoin BTCUSD, +10.77% has, for good reason, dominated the financial headlines lately, but its sizzling performance over the past month pales compared with what’s happening in another corner of the crypto market.
/goo.gl/uLoAUD

Bitcoin Is Still a ‘Joke,’ These Finance Giants Say
Bloomberg via Fortune
First the Nordea Bank AB chief executive called it a “joke” and an ” absurd” construction. Then Danish banks said they wouldn’t touch cash from bitcoin speculation. Now, one of Scandinavia’s biggest investors is airing its skepticism.
/goo.gl/KoUCXt

Gaming platform Steam ditches bitcoin support, citing ‘high fees and volatility’; Steam says it will no longer support the cryptocurrency due to its “high fees” and “volatility.”; Bitcoin’s price rocketed past $14,000 Wednesday
Ryan Browne – Business Insider
Gamers can no longer pay with bitcoin on the gaming platform Steam. Steam, which is owned by developer Valve Corporation, said in a blog post Wednesday that it could no longer support the virtual currency because of its “high fees” and “volatility”.
/goo.gl/XmA1zZ

The apps of these major banks were just found to have security flaws
Maria LaMagna – Bloomberg
Your banking app may not be as safe as you think it is. Three researchers created a tool to check the security of 400 different apps that require high levels of security, including apps for banking, trading, accessing cryptocurrency and browsing the internet securely.
/goo.gl/2srmt2

London fintech business WorldRemit valued at close to £500 million as it raises $40 million
Oscar Williams-Grut – Business Insider
Mobile money transfer service WorldRemit has raised $40 million (£29.7 million) from LeapFrog Investments and existing investors Accel Partners and Technology Crossover Ventures.
/goo.gl/BgQkwq

Bank of America Wins Patent for Crypto Exchange System
Nikhilesh De – Coindesk
Bank of America may be looking into cryptocurrency exchange services for its corporate clients – or at least keeping its options open should they become interestes
/goo.gl/8dgxbr

Politics

Trump’s global credibility is shot
Frida Ghitis – CNN
No, the entire world is not obsessed with Donald Trump, but you have to travel far to reach a place where people are not following closely — and worrying deeply — about what’s happening in Washington.
/goo.gl/1r75jY

Climate Change Costs a Lot More Than We Recognize; Most estimates ignore the sociopolitical repercussions.
Mark Buchanan – Bloomberg
The latest U.S. government report on climate change illustrates how expensive the phenomenon can be: It estimates that more frequent flooding, more violent hurricanes and more intense wildfires, among other things, have cost the country $1.1 trillion since 1980.
/goo.gl/tFdskH

It’s Official: Putin Says He’ll Run for Re-Election
Stepan Kravchenko, Henry Meyer, Ilya Arkhipov, and Andrey Biryukov – Bloomberg
After 18 years in power, Putin runs for term likely to be last; Victory all but certain, polls show, but infighting may loom
President Vladimir Putin, who’s ruled Russia for 18 years, announced he will seek a new six-year term in March. Constitutional limits mean it’s likely to be his last.
/goo.gl/kjsCsB

Regulation

Regulatory Armies and Bitcoin 12,000; Also kitty securities, taxes and rockets.
Matt Levine – Bloomberg
How’s the CFPB doing? The people at the Consumer Financial Protection Bureau, who signed up to work there because they wanted to protect consumers from financial companies, are a little bummed that the CFPB’s new acting director Mick Mulvaney has been cutting back on the agency’s enforcement and regulatory actions:
/goo.gl/pBJyRY

Commentary: How the CFPB Fight Is a Sign of the Next Financial Crisis
Michael S. Barr and Joe Valenti – FT
The Consumer Financial Protection Bureau (CFPB) was created after the 2007 – 08 financial crisis as an independent watchdog for the public. The crisis demonstrated that while abusing consumers might be profitable in the short term, it leads to greater long-term risks if left unaddressed.
/goo.gl/e25Xks

SEC Halts a Silly Initial Coin Offering; A case that was good entertainment, but not very informative.
Matt Levine – Bloomberg
Still waiting for clarity. Photographer: Roberto Machado Noa/LightRocket via Getty Images
Last year some Ethereum developers raised money from investors for a thing called the Decentralized Autonomous Organization, which was meant to pool the investors’ money and invest it in some Ethereum-projects-to-be-named-later under a complicated governance structure. It was all very blockchainy and 2016, and it raised its money — more than $150 million worth of ether at the time — without doing anything to comply with U.S. (or anywhere else’s) securities laws. This was totally illegal! But that was the least of the DAO’s problems. It also got hacked and had its money stolen and led to a fork of the Ethereum blockchain and was generally a pretty deep soul-searching moment for the cryptocurrency community.
/goo.gl/4T9Mcs

Shares in Hong Kong financial firm Convoy suspended after reports of raid by graft watchdog
South China Morning Post
The shares fall 7 per cent after the media reports, and the suspension follows similar action by regulators against companies connected to Convoy executive director Cho Kwai-chee
/goo.gl/EGtR5P

City watchdog is slammed for refusing to reveal full report on toxic RBS team: Group is accused of deliberately wrecking small businesses; RBS’s global restructuring group was meant to save firms during the financial crisis; Critics say it instead wrecked small business to seize assets and boosts profit; The Financial Conduct Authority commissioned a report that found conflicts; The FCA published a summary but will not release the full uncensored report
By James Burton Banking Correspondent For The Daily Mail
Campaigners have blasted the City watchdog for refusing to release a full report on a toxic business rescue unit at Royal Bank of Scotland.
/goo.gl/zQBnrN

ASIC updates guidance on conflicted remuneration
ASIC
ASIC has updated its guidance on conflicted remuneration to more closely reflect a range of regulatory changes since the guide was issued in 2013.
/goo.gl/gWWJd9

Ex-NFL player gets 40 years for running $10M fraud scheme
Associated Press
A former University of Virginia and pro football player has been sentenced to 40 years for running a $10 million fraud scheme that victimized more than 50 investors.
/goo.gl/THpB2p

FINRA Requests Comment on Proposed Amendments to the Codes of Arbitration Procedure Relating to Requests to Expunge Customer Dispute Information
Comment Period Expires: February 5, 2018
FINRA
FINRA seeks comment on establishing a roster of arbitrators with additional training and specific backgrounds or experience from which a panel would be selected to decide an associated person’s request for expungement of customer dispute information. The arbitrators from this roster would decide expungement requests where the underlying customer-initiated arbitration is not resolved on the merits or the associated person files a separate claim requesting expungement of customer dispute information. The Notice also proposes additional changes to the expungement process that would apply to all requests for expungement of customer dispute information.
/goo.gl/kyLdqe

SEC Continues Crackdown on Brokers Defrauding Customers
SEC
The Securities and Exchange Commission today continued its crackdown on brokers who defraud customers, charging two New York-based brokers with making unsuitable trades that were costly for customers and lucrative for the brokers. The case follows similar charges of excessive trading by brokers brought in January, April, and September.
/goo.gl/xT671Z

Investing and Trading

What is VIX Predicting about Future Volatility?
Hamish Preston – S&P Dow Jones Indices Indexology Blog
VIX closed last night at 11.33. What, if anything, does that mean?
We recently published a research paper, together with a more digestible practitioner’s guide, that provides a method for converting a given VIX level into an expectation for S&P 500 volatility over the next 30 days. Exhibit 1 shows that these estimates have provided a reasonable, but imperfect, guide for what was observed.
jlne.ws/2BKwNBb

Book Review: Adaptive Markets
Janet J. Mangano – CFA Institute Enterprising Investor
In Adaptive Markets: Financial Evolution at the Speed of Thought, Andrew W. Lo challenges practitioners directly in his meatiest chapter, “Adaptive Markets in Action.” He asks and answers the question, “What are the practical implications of the adaptive markets hypothesis for the front lines of investing and portfolio management?” Lo writes beautifully, and the book reads quickly.
jlne.ws/2BPxx84

Multi-factor indexes: The power of tilting
FTSE Russell Blog
As factor investing has made its way into the mainstream, a lively debate has begun regarding the best way to combine multiple factors into a single index. At FTSE Russell, we have created a bottom-up sequential tilting or “tilt-tilt” methodology. Unlike a top-down approach — which simply takes the weighted average of single factor indexes — we found the tilt-tilt methodology minimizes the dilution of competing factors. By preserving factor exposure, the tilt-tilt approach results in an index that has the potential to capture a greater share of risk premia associated with the targeted factors.
jlne.ws/2BO7Ipa

Bitcoin investors are gunning for the exclusive ’21 million club’ — but membership is getting pricey
Chris Weller – Business Insider
Bitcoin owners have set a benchmark for the “21 million club.”; To gain entry, you must own a full bitcoin, currently valued at nearly $13,000; The 21 million figure refers to how many bitcoin will ever be in circulation; Many people who missed buying out when bitcoin was cheaper now fear they’ll never become a member.
Bitcoin is having quite the year. Since it first hit $1,000 on January 2, the value of one bitcoin has risen to nearly $13,000 as of December 6.
/goo.gl/Qx27Jb

Here’s what bitcoin’s monster 2017 gain looks like in one humongous chart
Ryan Vlastelica – MarketWatch
In early February, the digital currency bitcoin hit a startling milestone when its price surpassed $1,000 for the first time ever. That seems awfully quaint now that the world’s largest cryptocurrency has added another zero to the end of its price and shows no signs of stopping its rise.
/goo.gl/QLJpoc

What on earth is going on with bitcoin?
Daniel Shane – CNNMoneyInvest
2017 has become the year bitcoin went big.
/goo.gl/S7zzQR

Why the Stock Wobble Isn’t Helping Gold
Eddie Van Der Walt – Bloomberg
Bullion drops to lowest in four months having fallen all week; Monetary policy outweighs crises in North Korea, Israel
Falling stock prices and geopolitical risks haven’t done much to support gold amid expectations of tighter U.S. monetary policy.
/goo.gl/UH3GZw

Wall Street Tells Frackers to Stop Counting Barrels, Start Making Profits; The shale-oil revolution produces lots of oil but not enough upside for investors
Bradley Olson and Lynn Cook – WSJ
Twelve major shareholders in U.S. shale-oil-and-gas producers met this September in a Midtown Manhattan high-rise with a view of Times Square to discuss a common goal, getting those frackers to make money for a change.
/goo.gl/R4wbbU

Institutions

Banks May Lose Up to 15% of Europe Stock Trading Revenue Under MiFID
Donal Griffin and Viren Vaghela – Bloomberg
Total corporate, investment bank revenue to fall 2.6%; MiFID rules take effect Jan. 3, many firms not prepared
The world’s biggest banks may lose as much as 15 percent of their revenue from trading stocks in Europe as a result of new rules overhauling the industry that take effect next month, according to research firm Coalition Development Ltd.
/goo.gl/kzKwie

Citigroup CFO Sees $20 Billion Hit If Senate Tax Bill Signed
Dakin Campbell – Bloomberg
Noncash charge driven by writedown of deferred tax assets; Reduction of regulatory capital will be $4 billion, CFO says
Citigroup Inc. expects to take a noncash charge to earnings of about $20 billion if the U.S. Senate’s version of the tax reform bill is enacted, Chief Financial Officer John Gerspach said.
/goo.gl/V9WU83

Bear Stearns’ Last CEO Tries to Keep Guggenheim Together
Sonali Basak and John Gittelsohn – Bloomberg
Endowment consultants caution clients about investing in firm; Schwartz sends companywide memos to assure staff and lift mood
Alan Schwartz didn’t sign up for this. Not at 67, almost a decade after going down as the last chief executive officer of the ill-fated Bear Stearns Cos. But the straight-talking dealmaker has landed in the eye of yet another Wall Street storm — this time at Guggenheim Partners, the $295 billion investment firm.
/goo.gl/Yu7Lo4

UBS Ex-Strategist Claims Retaliation and Seeks Damages
Chris Dolmetsch and Erik Larson – Bloomberg
Trevor Murray says he was pressured to alter his research; Rare whistle-blower case citing Sarbanes-Oxley gets under way
A former UBS Group AG strategist told a New York jury that the Swiss bank deprived him of millions of dollars in pay and pushed him into a long-lasting depression by firing him five years ago after he blew the whistle on efforts to influence his published research.
/goo.gl/5dsKXn

New Twist in Race to the Bottom for Fund Fees
Julie Edde – Bloomberg
New rules next year may push up licensing cost of indexes; Managers turn to ‘soft-indexing’ and cheaper index providers
In the race to the bottom for fund fees, Europe’s regulators are about to introduce a new twist.
/goo.gl/w59B7i

After Decades of Hints, Buffett’s Heir May Now Be More Apparent; The pressure to dismantle Berkshire will mount. The bulwark against that impulse is his successor, whose identity is one of the business world’s best-kept secrets.
By Noah Buhayar – Bloomberg
“If I die tonight, I think the stock would go up tomorrow.”
/goo.gl/2baxyA

Making Credit Suisse Swiss Again Drives Its Turnaround; Credit Suisse chief pivots business to home turf but with an eye on Asia
Brian Blackstone – WSJ
Tidjane Thiam is putting the “Suisse” back into Credit Suisse . CS -0.65%
/goo.gl/4XYEhB

Regions

Asia’s Booming Bond Market Leaves Distressed-Debt Investors With Few Options
David Yong and Lianting Tu – Bloomberg
Noble Group is seeking to restructure $3.5 billion of debt; Keshik sees opportunities in ‘epic’ NPL cleanup in India
Asia’s booming bond market is leaving distressed-debt investors with few options to bet on for the new year.
/goo.gl/zWLnWM

China’s Push to Trade Oil in Yuan Faces a Key Hurdle
Enda Curran and Chris Anstey – Bloomberg
Proposal for a yuan crude oil futures contract gains attention; Success seen hinging on how much freedom officials will allow
China’s moves to set up trading oil in yuan have sparked enthusiasm about what could be a shift in the global financial system: a reduced role for the U.S. dollar. Players like Adam Levinson, founder of hedge fund Graticule Asset Management Asia, call it a “huge story” to come.
/goo.gl/A1rQZ8

A Bitcoin Frenzy Like No Other Is Gripping South Korea
Kyungji Cho , Yuji Nakamura , and Narae Kim – Bloomberg
Korean investors are piling in as bitcoin tops $12,000
Concerned regulators have formed a cryptocurrency task force
Like thousands of South Koreans, Moonsung Bae is infatuated by bitcoin.
/goo.gl/BWQCkE

South Korean Financial Regulators Ban Bitcoin Futures Trading
Bitcoin.com
It appears that South Korea is bowing out of the race for bitcoin futures trading, leaving the field wide open to the Americans and Japanese. This is not because established financial companies are reluctant to offer the new instruments in the bitcoin obsessed country, but due to another official ban.
/goo.gl/pGXfVw

Over $36 Million Worth of Bitcoin at Stake in Singapore’s First Ever Crypto Trial
Bitcoin.com
Singapore International Commercial Court (SICC) has refused summary judgement, sending litigants B2C2 and Quoine to trial in order to sort out the gory details involving $36 million (at press time) of bitcoin. It’s a case bound to be watched around the world, as cryptocurrency begins to enter mainstream business life and establish legal precedence.
/goo.gl/WwYCzA

Europe Faces ‘Sky High’ Egg Prices After Contamination Scare
Megan Durisin – Bloomberg
Egg costs are surging in Europe after a contamination scare swept across the region earlier this year.
/goo.gl/sjcqQh

The $64 Million Question: Is Goldman Embracing Tiny Asian IPOs?
Ben Scent and Crystal Tse – Bloomberg
Wall Street bank ranks 30th among Hong Kong IPO arrangers; Goldman launches $64 million IPO for orthopedic device maker
Goldman Sachs Group Inc. has nearly vanished from the Hong Kong IPO scene this year.
/goo.gl/btPXD1

Indonesia to Ban Digital Currency Transactions by Fintech Firms
Karlis Salna and Tassia Sipahutar – Bloomberg
Central bank still assessing trading of digital currencies; Bank Indonesia issues new set of rules for fintech companies
Indonesia’s central bank will bar financial technology companies from using digital currencies on their platforms as a global frenzy around bitcoin continues to lure more investors.
/goo.gl/gsGch1

Hong Kong risks losing listings crown to New York; NYSE has become venue of choice for Chinese tech groups in 2017
Emma Dunkley in Hong Kong – FT
Hong Kong is poised to lose its title as the leading global venue for flotations this year, following a drop in the number of local “jumbo” listings and a rising preference among Chinese companies for the US.
/goo.gl/KF5trZ

Brexit

Britons’ Brexit views unchanged — but more expect bad deal; Three polls reveal pessimism over talks and growing support for second referendum
John Burn-Murdoch in London – FT
Britons’ views on whether Brexit was the right decision have not changed but an increasing number expect it to be botched, according to a range of new polls.
/goo.gl/BxycHf

U.K. Business Leader Says Brexit Chaos Is Looming Over Everything
Alex Morales – Bloomberg
Financial firms prepare to take ‘no turning back’ decisions; Drechsler warns jobs, investment, EU citizens will leave U.K.
With Prime Minister Theresa May’s Brexit plans up in the air, the world of business looks on disconcerted — banks especially are close to their point-of-no-return.
/goo.gl/PynWat

Miscellaneous

Study abroad appeals to more U.S. college students, but costs can mount
Gail MarksJarvis – Reuters
While most college seniors are still hoping to land a good job after graduation, Kelsey Berg is set.
/goo.gl/e1AXs8

The post Wall Street banks push back on launch of bitcoin futures; Traders Want to Know What Exchanges Earn From Market Data; Blockchain Scores Major Win as Aussie Exchange Plans Shift appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

The @JohnLothian Twitter account received 65,120 original impressions yesterday, which is a record for the last 28 days. My LinkedIn profile searches are up 48% for the week.~JJL

Yesterday I attended an event hosted at the Art Institute of Chicago by RBC Global Asset Management about responsible investments. The speaker and panel discussed ESG investing, which I did not know about. ESG stands for Environment, Societal and Governance. Later in the day I was able to apply what I learned during a meeting of the endowment committee of my church, of which I am an ad hoc member, since I am treasurer of my church. Funny how that worked out.~JJL

One of the panelists was Bernie Nelson of Style Research. If I wanted to know more about ESG investing, he would be the one I would ask.~JJL

Check out JLN’s video with Lanre Sarumi, CEO of the quantitative analytics software firm Riskbone and CEO of Level Trading Field, about bitcoin, below.~SD

JJ Kinahan of TD Ameritrade looks a lot better in his OIC 25th Anniversary video than I did.~JJL

I was quoted in a Reuters article about bitcoin titled “Bitcoin to start futures trading, stoking Wild West worries,” which also had a quote from Steve Grob. I also saw that the BBC claimed they interviewed me with a quote that sounded a lot like Steve Grob’s. The BBC did not interview me.~JJL

CME Group is offering a webinar on How to Get Started Trading WTI Crude Oil on Tuesday, December 19 from 11:00 a.m. – 12:00 p.m. Central time. You can register here.~SR

FinTank with Morningstar is hosting: A Discussion on BanQu’s Remarkable Journey & Templum’s Platform to Shape ICOs as Securities – Friday 12/15, 8:00 a.m. CST @ Morningstar, 22 West Washington Street, Chicago. Register.~JK

What do you think is the over-under on how many times circuit breakers will be triggered in the first month of bitcoin futures trading? According to Bloomberg, yesterday’s crazy price action would have paused CME trading twice, then stopped it for a full hour, then had multiple stops and starts toward the end of the trading day as BTC oscillated over and under a 20 percent gain. Buckle up! Obligatory YouTube link to the Ohio Players’ 1975 release, “Love Rollercoaster.”~SD

Scenes of Southern California’s ongoing wildfire look like scenes out of an apocalyptic movie. Newsweek has an article laying out local charities that need your donations.~SD

++++

The Future of Bitcoin (Futures) – with Lanre Sarumi
JohnLothianNews.com

With the launch of the first bitcoin futures only a couple of days away, JLN asked Lanre Sarumi, the CEO of the quantitative analytics software firm Riskbone as well as CEO of Level Trading Field, a free online financial news and analytics platform, what traders should know before taking the plunge into this very new product. Sarumi spoke about who will be trading the fledgling futures and why, the differences between the proposed contracts at Cboe, CME and Nasdaq, and some strategies traders might use to make the most of the current bitcoin mania.

Watch the video and read the rest here »

++++

What Does Your Cloud Data Look Like? QuantHouse Is Moving To The Cloud
Jim Kharouf – John Lothian News
The data cloud shift aims to transform how firms research, trade and evaluate their strategies
It’s all about the data.
The lifeblood of trading is simply that – data – how to get it, how to decipher it and how to trade off it. The good news for traders is that it is now more accessible, flexible, and researchable than ever, especially with the rapid evolution of cloud technologies.
jlne.ws/2AFAkkh

++++

How the Kremlin Tried to Pose as American News Sites on Twitter
Selina Wang – Bloomberg
Twitter has suspended dozens of accounts masquerading as U.S. news sources that had more than 500,000 followers. The Kremlin-backed Russian Internet Research Agency operated dozens of Twitter accounts masquerading as local American news sources that collectively garnered more than half-a-million followers.
/goo.gl/UqnmqU

****** Here is a reason to read JLN, your trusted and transparent source of news.~JJL

++++

Going local for supplies sparks new frac sand boom; Market is stretched to full capacity amid US shale oil’s drive to extend output cheaply
Gregory Meyer in New York – FT
Windblown dunes in west Texas are the latest front in the shale oil industry’s campaign to extract more barrels at less cost.
/goo.gl/iNyE9a

***** Julie Lerner of PanXchange is quoted in this article.~JJL

++++

A Trader’s View on Crypto
Mike Unetich, Vice President, Cryptocurrencies, Trading Technologies
I recently saw an industry article with the theme “how I would be thinking about bitcoin if I were to put my old broker hat on.” This was a very timely perspective as Cboe/CFE and CME are launching their bitcoin offerings within the next couple weeks. As the VP of Cryptocurrencies at Trading Technologies and an avid cryptocurrency participant, I’ve been thinking about the same from a trader’s perspective.
/goo.gl/65PScg

***** Article references my broker bitcoin piece, but without attribution.~JJL

++++

Thursday’s Top Three
Yesterday’s top read story was JLN’s piece on Kim Taylor and Maureen Downs stepping down from their respective positions in Two Powerful Futures Industry Female Leaders Step Down. Second went to the FT’s Wall Street banks push back on launch of bitcoin futures. Third went to the Wall Street Journal’s Traders Want to Know What Exchanges Earn From Market Data. Have a great weekend everybody.

MarketsWiki Statistics Sponsored by Level Trading Field

114,148,251 pages viewed 22,934 pages 210,806 edits

Lead Stories

Bitcoin Futures Coming From Team That Rebounded From Epic Snafu
Nick Baker – Bloomberg
Cboe tech staff came from Bats, which once botched its own IPO; Launch of bitcoin futures will be watched even more closely
Cboe Global Markets Inc. is preparing to release bitcoin futures into a bitcoin-obsessed world. Its tech staff knows how badly these things can go.
/goo.gl/4nGA6G

***** OUCH!!!~JJL

Big banks not willing to support launch of bitcoin futures; Chicago’s Cboe plans to start trading late on Sunday evening a week before CME
Philip Stafford in London – FT
A number of the largest US futures brokers will not immediately clear bitcoin trades for their clients, such as JPMorgan and Citigroup, according to people with knowledge of the banks’ plans.
/goo.gl/SCW3qB

Self-driving finance could turn into a runaway train; No one knows who’s liable if a program goes haywire, as regulators struggle to keep pace
Gillian Tett – FT
The mysteries of bitcoin are turning heads yet again this week. At the start of the year, the digital token was worth $1,000; on Thursday, it breached $16,000. This is eye-popping, particularly given that so few investors actually understand how cryptocurrencies really work.
/goo.gl/wUfDhW

The world’s biggest banks reportedly want to halt bitcoin futures launch
David Reid – CNBC
Wall Street banks have raised objections to the introduction of bitcoin futures trading, highlighting fears that the financial system can’t cope with the cryptocurrency’s volatile price swings.
/goo.gl/y83n8Q

Why you might want to move your money to a socially responsible bank
Spencer Tierney – MarketWatch
If you buy local to support neighborhood businesses, avoid shopping at stores known for paying their workers poorly or protest projects criticized for being environmentally harmful, you might want to make sure your bank accounts are also supporting your values.
/goo.gl/ZkwH7h

UK reaches historic Brexit divorce deal
Alex Barker and Jim Brunsden in Brussels and Arthur Beesley in Dublin – FT
Britain has reached a historic deal on its EU exit terms, enshrining special rights for 4m citizens and paying EUR40bn to EUR60bn in a hard-fought Brexit divorce settlement that clears the way for trade talks next year.
/goo.gl/ggJmmS

Inside Big Banks, Bitcoin Futures Are Riling Trading Executives
Dakin Campbell, Sonali Basak and Laura J Keller – Bloomberg
Some say their desks are eager to wade into the new market; But many confidentially list concerns and unresolved questions
Bitcoin is coming to Wall Street on Sunday, and some executives at the world’s biggest banks aren’t sleeping well.
/goo.gl/Ec1rHk

Goldman Sachs will clear bitcoin futures for some of its clients
Akin Oyedele – Business Insider
Goldman Sachs will clear bitcoin futures trading for some of its clients, according to a person familiar with the plans.
/goo.gl/S83T6K

The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market; A few massive investors can rock it with a shrug.
Olga Kharif – Bloomberg
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency.
/goo.gl/48tVCN

CFTC Talks about Bitcoin futures contracts
Wolters Kluwer
In a recent CFTC Talks podcast, a number of Commission leaders engaged in a lively roundtable discussion to explore a wide arrange of issues associated with the much talked about Bitcoin futures contracts. The new trading products are scheduled to be launched by year-end at the Chicago Mercantile Exchange, Inc. (CME) and the CBOE Futures Exchange (CFE).
/goo.gl/AjtKdY

ECB plans major market infrastructure overhaul; The ECB plans to create a T2S-style collateral management system to harmonise processes for EU central banks.
Joe Parsons – The Trade
The European Central Bank (ECB) has announced two major changes to Europe’s market infrastructure including the introduction of a harmonised collateral operations platform.
/goo.gl/fXJSs5

Bitcoin’s Wildest Rise Yet: 40% in 40 Hours; Virtual currency’s gains this year have accelerated recently, bringing its year-to-date rise to more than 1,500%
Paul Vigna and Steven Russolillo – WSJ
Bitcoin mania reached new highs Thursday as the price of the digital currency jumped about 40% in 40 hours, smashing through five separate $1,000-barriers and surging past $16,000.
/goo.gl/bZociT

Glass Lewis backs LSE chairman against activist investor
Philip Stafford – FT
A second influential shareholder advisory group has urged investors in the London Stock Exchange Group to back chairman Donald Brydon against the activist investor trying to unseat him.
/goo.gl/rrLHt3

Could fintech be opening the door to more financial crime?
CFA Institute Contributor – via City AM
Fintech startups aim to disrupt current practices and to do it fast. The emerging business model requires product managers find a buyer need, put out a minimum viable product, and iterate change in response to customer use.
/goo.gl/oT1VdX

****SD: A whole new genre of heist films around the corner?

Deutsche Bank says more regulation of cryptocurrencies needed
Reuters Staff
More regulation and some degree of security are needed to make cryptocurrencies such as bitcoin a serious new asset class for investors, Deutsche Bank Chief Investment Officer Christian Nolting said.
/goo.gl/7T1wcQ

As the bitcoin boom accelerates, so does scrutiny from regulators
Seema Mody – CNBC
The rapid surge in bitcoin has prompted Washington to take a closer look at digital currencies and the rise of initial coin offerings ó a method used by internet entities to raise capital in exchange for a new cryptocurrency.
/goo.gl/zYMbfT

Tomorrow’s financial crisis today
Matthew Yglesias – Vox.com
Most Americans probably don’t care much about yesterday’s move to recognize Jerusalem as the capital of Israel, but the decision-making process that went into it is crucial to understand.
/goo.gl/AtoUU6

Flash Crashes More Common Than Thought in World’s Biggest Market
Lananh Nguyen – Bloomberg
Flash crashes in the pound and Swiss franc have roiled the currency market in the last couple of years — but there have been dozens of others that have gone under the radar.
/goo.gl/thPhUF

Stuttgart bourse buys BX Swiss exchange
Reuters Staff
German stock exchange operator Boerse Stuttgart GmbH is buying a majority stake in Swiss peer BX Swiss as part of a strategic partnership.
/goo.gl/5mRnYX

Exchanges, OTC and Clearing

Bitcoin Wildness Highlights Worries as Futures Trading Nears
Nick Baker, Annie Massa, Brian Louis and Camila Russo – Bloomberg
Price zooms up to almost $20,000 on Coinbase, then crashes; Big traders warned that futures have been rushed to market
Bitcoin’s poised to go legit. Is it really ready? Three days before Cboe Global Markets Inc., one of the world’s biggest regulated exchanges, debuts futures on the cryptocurrency, it had one of its wildest sessions ever. On Coinbase Inc.’s GDAX exchange, prices zoomed up to almost $20,000 from $16,000 in only about 90 minutes — then crashed back down. The largest digital currency is still up more than 16-fold this year, trading at 16,126.32 as of 11:52 a.m. in Hong Kong, according to Bloomberg composite pricing.
/goo.gl/EUemfX

Euronext announces quarterly review results for the AEX, AMX, AScX
Euronext
Euronext today announced the results of the quarterly review of the AEX, AMX and AScX indices. The changes following the review will be effective from Monday 18 December 2017.
/goo.gl/yutGXT

Euronext announces quarterly review results of the PSI 20
Euronext
Euronext today announced the results of the quarterly review for the PSI 20. The changes due to the review will be effective from Monday 18 December, 2017.
/goo.gl/BsVvkL

Euronext announces quarterly review results of the BEL 20, BEL Mid and BEL Small
Euronext
Euronext today announced the results of the quarterly review of the BEL 20Æ, BEL MidÆ and BEL SmallÆ. The revised composition will be effective from Monday 18 December 2017.
/goo.gl/Kh3JUJ

Trading hours at Eurex Exchange on 22 December and 29 December 2017
Eurex
This year, Friday, 29 December 2017 will be the last exchange trading day at Eurex Exchange. This is also the last day of the year on which settlement can be done. On XetraÆ and at the Vienna Stock Exchange there will be shortened trading hours on the last trading day of the year 2017.
/goo.gl/e6pR78

Intercontinental Exchange Recognized for Excellence in Clearing by Risk and FOW
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that two of its clearing houses received awards from Risk and FOW for excellence in clearing.
/goo.gl/NH6Mxm

Fintech

Blockchain’s Real Cool Cats
By Tim Culpan, David Fickling – Bloomberg
ASX Ltd. had a choice. The operator of Australia’s main stock exchange could develop a new version of Chess, its faithful but aging clearing and settlements system introduced in 1994, or it could build for the future.
/goo.gl/sH1uMa

No, Bitcoin Won’t Boil the Oceans; Concerns about the cryptocurrency’s energy use are overblown.
By Elaine Ou – Bloomberg
While much of the world marvels at bitcoin’s meteoric rise, another part is focused on an environmental byproduct: The sheer amount of electricity that crypto-currencies use. By some estimates, bitcoin’s consumption alone exceeds — or will exceed — that of Ireland, Denmark, Japan or even the entire world.
/goo.gl/LBCNRN

Now Tech Moguls Have to Work to Appear Not-Evil; Silicon Valley is feeling the backlash against its wealth and power.
By Shira Ovide – Bloomberg
Something weird is happening in the technology industry: Giant companies are suddenly worrying about what people think of them. It’s not that Apple Inc. or Facebook Inc. didn’t give a fig before. It’s just that they’ve come to realize that people doubt their sincerity when it comes to industry slogans like “Don’t be evil.”
/goo.gl/tcKkv4

Here’s a big bitcoin problem I just discovered
Rick Newman – Yahoo Finance
I bought a fraction of a bitcoin in October, and my little investment has appreciated about 150% since then. But if I want to cash out, I might have a problem ó because apparently it’s not so easy to sell.
/goo.gl/re8AUC

ARTIFICIAL INTELLIGENCE SEEKS AN ETHICAL CONSCIENCE
Wired.com
LEADING ARTIFICIAL-INTELLIGENCE RESEARCHERS gathered this week for the prestigious Neural Information Processing Systems conference have a new topic on their agenda. Alongside the usual cutting-edge research, panel discussions, and socializing: concern about AI’s power.
/goo.gl/wtfcqJ

Satire: It’s Time to Admit No One Knows What the Blockchain Is
By Ashwin Rodrigues – Fortune
Certain innovations, seen as superfluous at the time of their inception, are no-brainers today. The Internet, for example. Penicillin, for another. Could blockchainóthe technology DJ Khaled and others say is a major key to fundamentally changing capital marketsóprove to be just as transformative?
/goo.gl/DymvrQ

Coinbase was number one on Apple’s app store after bitcoin’s wild surge; Coinbase was ranked the most popular app on the Apple Store on Thursday, according to data by market statistics firm App Annie; Its service was so overcrowded that its website went down for roughly an hour; Coinbase said the site has been experiencing “record high traffic.”
Ryan Browne – CNBC
Bitcoin exchange Coinbase briefly flew to the top spot on Apple’s U.S. app store after the cryptocurrency skyrocketed in price Thursday.
/goo.gl/WztVHa

AI is now so complex its creators can’t trust why it makes decisions
Dave Gershgorn – Quart
Artificial intelligence is seeping into every nook and cranny of modern life. AI might tag your friends in photos on Facebook or choose what you see on Instagram, but materials scientists and NASA researchers are also beginning to use the technology for scientific discovery and space exploration.
/goo.gl/VuNNqk

Politics

Mueller’s Investigation Just Got Some Insurance; The Flynn plea makes it difficult for Trump to can the special counsel without inviting charges of a cover-up and sparking a constitutional crisis.
By Greg Farrell , Tom Schoenberg , and Neil Weinberg – Bloomberg
The Dec. 1 plea deal struck with President Trump’s former national security adviser, Michael Flynn, marked a big step forward in Robert Mueller’s Russia investigation. It may also have provided some protection for Mueller against being fired by the presidentóand helped ensure that his probe will continue, even if one day he’s not leading it.
/goo.gl/FSnJqG

Trump team eyes bitcoin, blockchain ascent
By Blake Burman, Jennifer Schonberger – Fox Business
The list of those delving into blockchain technology seems to be expanding by the day, including investors, technology shops, banks and curious minds executing simple Google searches.
/goo.gl/23GdLh

Exclusive: Wells Fargo sanctions are on ice under Trump official – sources
Patrick Rucker, Pete Schroeder – Reuters
The new acting head of the U.S. consumer finance watchdog is reviewing whether Wells Fargo & Co (WFC.N) should pay tens of millions of dollars over alleged mortgage lending abuse, according to three sources familiar with the dispute.
/goo.gl/fGiasJ

Ethanol Hostages on Capitol Hill; Energy policy favoritism imperils Trump’s nomineesóagain.
By The Editorial Board – WSJ
Trump Administration’s nominees should enjoy an easy path to Senate confirmation, given GOP control of Congress and the White House. But the federal government’s warped ethanol policy is pitting corn-state Republicans against refinery-state Republicans, and the conflict has devolved into a hostage crisis involving several Trump nominees.
/goo.gl/xmCmxe

Neo-Nazis are also profiting from bitcoin’s massive boom
Shona Ghosh – Business Insider
Cryptocurrency bitcoin has shot up massively in value over the last few days, currently sitting at $15,338; That’s profited anyone who holds the cyrptocurrency ó including neo-Nazis forced to accept anonymous donations in bitcoin after being banned from legitimate fundraising services; Pro-Nazi publisher Counter Currents and neo-Nazi internet troll Andrew “weev” Auernheimer have raised thousands of dollars in bitcoin; The news will do little to counter bitcoin’s reputation as a currency for criminals and other undesirable players.
The massive boom in the value of bitcoin has ended up profiting neo-Nazis who have taken thousands of dollars in donations, according to an investigation by Mic.
/goo.gl/BAeHM7

Regulation

New Basel rules on capital hit European banks; Draghi hails measure but provisions may not take effect until two decades after crisis
Caroline Binham and Martin Arnold in London and Claire Jones in Frankfurt – FT
Top international central bankers and regulators have struck a long-awaited deal on bank capital rules that Mario Draghi hailed as the final step of post-financial crisis reforms and which resolves a transatlantic rift on the treatment of the industry.
/goo.gl/yB9tP9

Does Deregulation Move Markets? Be Skeptical; To understand how a rollback of regulations might affect stock prices, listen to John Maynard Keynes.
By Cass R. Sunstein – Bloomberg
From the very start of his presidency, Donald Trump has made it a high priority to reduce the level of federal regulation. And in 2017, the stock market has boomed. Many business leaders believe that this is hardly a coincidence, and that Trump’s deregulatory efforts have fueled the boom. Are they right?
/goo.gl/5oPr4D

Broker Charged With Defrauding Investors
SEC
The Securities and Exchange Commission charged a registered representative in Pennsylvania with operating a long-running offering and investment advisory fraud.
/goo.gl/xJwMJL

Daniel Michael Named Chief of Enforcement Division’s Complex Financial Instruments Unit
SEC
The Securities and Exchange Commission today announced that Daniel Michael has been named chief of the Enforcement Division’s Complex Financial Instruments Unit.
/goo.gl/84Hxqe

U.S. Recovers Millions in Laundered Funds from Guernsey
By Samuel Rubenfeld – WSJ
The U.S. recovered more than $14 million linked to two criminal cases in which the money was laundered via Guernsey, the U.K. dependency, in a first-time sharing of forfeited assets by officials there, prosecutors said.
/goo.gl/51y3BP

Fed Plans to Disclose More About Big-Bank Stress Tests; Proposal calls for publishing how loan portfolios fare under Federal Reserve’s statistical models
By Ryan Tracy – WSJ
The Federal Reserve on Thursday proposed disclosing more about its big-bank stress tests, in response to criticism from bankers who have said the exams’ results are hard to understand.
/goo.gl/8dMYqP

Global banking regulator sends a warning to bitcoin investors; Stefan Ingves, chairman of global regulators at the Basel Committee and governor of Sweden’s Riksbank, said investing in bitcoin was a “dangerous” prospect; Bitcoin was trading at around $16,029 on Friday morning, according to industry site CoinDesk, after wild price swings in recent days; “If you look at what has happened in the past when it comes to reaching those type of heights, being it tulip bulbs or a bunch of other things over the centuries, the odds are against those who actually think that this is going to be the future,” Ingves said
Sam Meredith, Annette Weisbach – CNBC
Bitcoin investors could learn a valuable lesson from the Dutch tulip bulb mania of the 1630s, according to a global banking regulator.
/goo.gl/NwdZJ6

ASIC cancels AFS licence of Michael James Haley
ASIC
The Australian Securities and Investments Commission (ASIC) has cancelled the Australian Financial Services (AFS) licence of Michael James Haley after finding he has ceased to carry on a financial services business.
/goo.gl/najdbN

ASIC calls on preparers to focus on financial report quality and new requirements
ASIC
ASIC has called on companies to focus on giving information for users of financial reports that is useful and meaningful, and to address the impact of major new accounting requirements.
/goo.gl/3MZQPH

Update on MiFID II registers from 3 January 2018
ESMA
The European Securities and Market Authority (ESMA) will provide updated Registers information in line with requirements under MIFIR/MiFID II. The launch, on 3 January 2018, will update existing registers under MiFID I and also provide for new registers under MiFID II/MiFIR. ESMA compiles the registers based on data provided by the National Competent Authorities of the Member States of the European Economic Area (EEA) on and from the 3 January 2018.
/goo.gl/VgqnmX

Bonds in a Bull Market? 7 Tips Before You Invest
PETE CHANDLER – FINRA
In the midst of a bullish stock market, it can be hard to hear that calm voice of investing reason telling us that asset allocation is an important aspect of prudent, long-term investing.
/goo.gl/6ZeL44

Podcast: CFTC Talks EP021: FERC Chairman Neil Chatterjee
CFTC
This week on CFTC Talks, we bring on FERC Chairman Neil Chatterjee. We talk energy regulation, electricity grid,…
/goo.gl/ip7uZe

Investing and Trading

Bitcoin is about to join the big leagues on Wall Street, but some fear it is far from ready
Patti Domm – CNBC
As U.S. exchanges get set to offer bitcoin futures, some major global financial institutions feel the rollout is happening too fast, and some retail brokers say they will look hard at the new market before offering related products to customers without steep restrictions.
/goo.gl/cGcsyX

Investors pour $1.5bn into financial sector funds; Banks are big winners from a sector rotation triggered by hopes of lighter regulation
Nicole Bullock and Eric Platt in New York – FT
Investors poured $1.5bn into funds that buy financial stocks in the latest week, extending a rotation into the sector on optimism about the prospects of lighter regulation and less tax.
/goo.gl/tbHcDi

A Venture Capitalist Talks About Her Best and Worst Investments; Cyan Banister of Founders Fund offers the lessons she has learned from both winning and losing
By Chris Kornelis – WSJ
After Cisco Systems Inc. bought IronPort in 2007, Cyan Banister, an early employee of the acquired company, found herself with money from the acquisition that she didn’t know what to do with. She considered putting it in the stock market or in land, but settled on startups. The first check she wrote was to SpaceX.
/goo.gl/5f3Tun

Banks Emerge Winners From Final Post-Crisis Capital Rules
By Boris Groendahl , Nicholas Comfort , Silla Brush , and Edward Robinson – Bloomberg
Basel III agreement completes post-crisis regulatory framework; Draghi says ‘difficult’ implementation of rules will now begin
Banks emerged relatively unscathed from global regulators’ final batch of post-crisis capital rules, with few lenders needing to raise major new funds.
/goo.gl/XGbmym

World’s No. 1 Miner Sees Bigger Role for Carbon-Capture Systems
Bloomberg News
BHP sees possible pilot projects with China steel companies; Investments in such systems stalled last year at $184 billion
BHP Billiton Ltd., the world’s biggest mining company, said wider use of systems that trap carbon emissions will be needed to meet international climate goals, even as investments in the technology stall.
/goo.gl/HsiYGK

ETF Investors Are Ditching Corporate Credit for Treasuries
By Carolina Wilson and Dani Burger – Bloomberg
Almost $1.4 billion yanked from funds holding corporate debt; Ultra-short Treasury bond ETF sees record shares outstanding
Investors in exchange-traded funds are done with corporate bonds.
/goo.gl/vjDhz6

Death Rattle or Just More Boom? Europe Embraces Risky Credit
By Samuel Potter – Bloomberg
Burger King France sells PIK notes synonymous with market top; Spreads have widened as caution seeps into global markets
After another bout of caution rippled through global markets this week, a flurry of high-yield deals can be taken one of two ways. It’s either a last-minute dash for cash before the cycle peaks or proof of market resilience.
/goo.gl/6NXAn9

Forget missing out on bitcoin mania, and be glad you didn’t short it
By Anora M. Gaudiano – MarketWatch
What would be worse than missing out on the outrageous cryptocurrency rally that you dismissed as the next tulip mania? Shorting bitcoin.
/goo.gl/ZdZaxd

The murky relationship between the bitcoin price and “tether” tokens is raising suspicions
Joon Ian Wong, John Detrixhe – Quartz
As the bitcoin price has surged, so has the supply of a digital token called tether. Tethers are tokens backed by US dollar deposits, with each tether always worth one dollar. This allows cryptocurrency traders to cash in and out of bitcoin quickly, using tethers to transfer proceeds to other exchanges or digital wallets while avoiding the lengthy process of converting the sums in and out of fiat currency.
/goo.gl/c8e9ow

So You Want to Trade Bitcoin Futures…
Crystal Kim – Barron’s
The price of bitcoin just keeps climbing, hitting above $15,500 so far Thursday, according to Coindesk.com. Bitcoin Investment Trust (GBTC) soared 8% to $1,800 so far today, trading at a 70% premium to its net asset value.
/goo.gl/Z2dDBD

When Even Value Investors Can’t Find Any
By Shuli Ren – Bloomberg
Are disciples of Benjamin Graham throwing in the towel in Asia? According to Ronald Chan, founder and chief investment officer of Chartwell Capital Ltd., value investors have become powerless in the face of a tidal wave of liquidity. Since January, mutual funds and ETFs have poured $116 billion into Asian equities, with much of that flowing to blue-chips. Receiving particular attention have been the so-called dragon heads, stocks investors believe are likely to benefit from a broad-based economic recovery. Small and medium caps are being left behind.
/goo.gl/nAxFDx

Dogged $4 Billion Investor Is Sticking to Shale
By Sharon Cho and Serene Cheong – Bloomberg
Shale producers have potential for bigger growth: Reynolds; Van Eck fund’s top picks include Parsley, Newfield, Concho
Shawn Reynolds is sticking to shale, with the $4 billion fund manager unshaken in his resolve that the U.S. industry’s stocks are due for a rebound after a lackluster 2017.
/goo.gl/YMjW9L

Bill Gross Says Bitcoin Limits Make It an Unlikely Currency Alternative
By John Gittelsohn , Scarlet Fu , and Julia Chatterley – Bloomberg
The limited supply of bitcoin may drive up its value for now, but also makes it an unlikely substitute for currencies or gold in times of economic distress, according to Bill Gross, the billionaire bond manager with Janus Henderson Group Plc.
/goo.gl/aYVDGZ

Cobalt miners play a strong hand in price setting; Carmakers struggling to lock down supplies of metals needed for batteries
Henry Sanderson – FT
Robert Friedland calls it the “revenge of the miners”. As demand increases for battery materials, producers will find themselves in the driving seat as carmakers scramble to roll out their electric vehicle fleets, according to the billionaire investor.
/goo.gl/Qq8vDH

Bitcoin has gone beyond the absurdity of the 17th-century tulip bulb mania: Dennis Gartman; Bitcoin’s rapid rise over the past few days is “utter and complete nonsense,” Dennis Gartman said; He called it a “classic bubble.”; However, the addition of futures contracts should help moderate the market over the long term, said Gartman.
Michelle Fox – CNBC
Bitcoin is in a “classic bubble” and has even gone beyond the “absurdity” of Holland’s tulip bulb mania in the 1630s, widely followed investor Dennis Gartman told CNBC on Thursday.
/goo.gl/W9FTWs

Institutions

Citigroup’s $20 Billion Write-Down Would Be Just the Ticket
By ANTONY CURRIE – NY Times
A $20 billion accounting loss can be a good thing, when the company in question is Citigroup. The lender’s woes during the financial crisis a decade ago helped make “write-down” a household word. Now the $200 billion colossus may take another whopping great hit. But this time the potential loss, sparked by planned tax cuts, is actually pretty helpful.
/goo.gl/56M86d

Morgan Stanley fires Harold Ford Jr for alleged misconduct; Former Democratic congressman denies allegations
Ben McLannahan in New York – FT
Morgan Stanley has fired one of its managing directors for alleged misconduct after a former business contact complained he subjected her to harassment, intimidation and physical assault.
/goo.gl/7ptcNs

RBS CEO Sees Diminishing Chance of DOJ Settlement This Year
By Manus Cranny and Stefania Spezzati – Bloomberg
McEwan says bank is in ‘very strong’ capital position; Chief praises Brexit breakthrough as ‘good news’ for business
Royal Bank of Scotland Group Plc Chief Executive Officer Ross McEwan said the likelihood is waning that the lender will settle a U.S. mortgage-bond probe before the end of the year as he’d hoped, though it’s well-capitalized to handle a settlement.
/goo.gl/sYUjCg

New York pension fund seeks more pay disclosure from Wells Fargo
Dan Freed – Reuters
New York state Comptroller Thomas DiNapoli is asking Wells Fargo & Co (WFC.N) to disclose more information about employee incentive pay, an issue that was at the heart of a scandal that has roiled the third-largest U.S. lender for more than a year.
/goo.gl/B41Eg7

Goldman Traders Are Caught Up in a Bizarre, Tense Hedge Fund Battle
By Sridhar Natarajan and Nabila Ahmed – Bloomberg
Firm is said to have $200 million position in Hovnanian battle; Bank said to have sold CDS on builder that GSO wants triggered
In a year of missteps across its trading business, Goldman Sachs finds itself in a dicey situation again.
/goo.gl/bwUEvq

JP Morgan Launching Managed Futures ETF
ETF.COM
J.P. Morgan is rolling out another alternatives strategy in an ETF wrapper today. The JPMorgan Managed Futures Strategy ETF (JPMF) will be actively managed and seek to provide exposureódirectly or via derivativesóto the performance of equities, debt securities, commodities and currencies.
/goo.gl/Xaz521

Regions

How to Launder $1 Billion of Iranian Oil; Over six days on the stand, a star witness for the FBI spun a stunning tale of corruption and double-dealing.
Reza Zarrab. – Bloomberg
Looking nervous and somber, the FBI’s star witness entered from the lockup and shuffled across the New York federal courtroom in a beige prison smock. The Turkish-Iranian gold trader took a seat at the witness stand for the hearing on Nov. 29, the second day of testimony in a money laundering and sanctions-evasion case brought by the U.S. government. Asked to state his name, he said he was Reza Zarrab.
/goo.gl/CbFjV5

Schulz’s ‘United States of Europe’ Proposal Unites Everyone Against Him
By Patrick Donahue and Birgit Jennen – Bloomberg
Martin Schulz accused of ‘radicalism’ with 1925 party point; German Left leader calls Schulz language ‘otherworldly’
German Social Democratic leader Martin Schulz used a 75-minute speech Thursday to make an urgent pitch to his restive party base for fresh talks with Chancellor Angela Merkel’s bloc. But one line on Europe ended up alienating allies and foes across the political spectrum.
/goo.gl/Czo3Ew

Trudeau Leaves China Empty-Handed
By Chris Fournier and Josh Wingrove – Bloomberg
Canada wants to fight populism by pushing progressive policies; But PM’s ‘one-size-fits-all’ approach fell flat in Beijing
Justin Trudeau saw a third way for trade, preaching “progressive” values as a fix to a global order put on the defensive by populists like Donald Trump. But this week in China, he got a crash course on how difficult it is to sell.
/goo.gl/Ao9WYV

Brexit

U.K., EU Reach Deal on Brexit Divorce Terms; The agreement means EU leaders are likely to agree for talks to advance on a trade deal
By Laurence Norman – WSJ
The U.K. and the European Union have reached an agreement on Brexit divorce terms after six months of tense talks, opening the way for negotiations to advance on a trade deal.
/goo.gl/qNjtWj

Recruiters Say Brexit Is Making Britain’s Skills Shortage Even Worse
By Jill Ward – Bloomberg
Accounting, financial, nursing and IT workers in strong demand; EU citizens quitting U.K. leave firms with fewer candidates
Robust demand for staff in the U.K. led to more people being placed in permanent jobs and a pickup in pay inflation last month, according to a report published Friday.
/goo.gl/CVRpW4

Brexit Deal in Brussels: What Small Print Says and What It Means
By Ian Wishart – Bloomberg
Theresa May got her Brexit breakthrough, ending six months of negotiations with the European Union. But celebration could be short-lived as the agreement she signed up to contains political booby traps down the line.
/goo.gl/sWHiAf

RBS CEO Says Brexit Deal Won’t Halt Its EU Relocation Plans
By Gavin Finch and Manus Cranny – Bloomberg
Royal Bank of Scotland Group Plc Chief Executive Officer Ross McEwan said the U.K.’s breakthrough in Brexit negotiations would not alter their plans to establish an alternative trading hub inside the European Union.
/goo.gl/5uTqyn

Miscellaneous

TSA Failed to Plan for PreCheck’s Popularity, Watchdog Says
By Daniel Flatley – Bloomberg
Inspector General describes backlog, staffing problems; TSA trying to enroll 25 million people by 2019 in PreCheck
The Transportation Safety Administration failed to plan for the popularity of its PreCheck program, causing staffing headaches and a backlog of paperwork, according to a new report.
/goo.gl/q3ejQm

Open-minded people have a different visual perception of reality
Olivia Goldhill – Quartz
Psychologists have only begun to unravel the concept of “personality,” that all-important but nebulous feature of individual identity. Recent studies suggest that personality traits don’t simply affect your outlook on life, but the way you perceive reality.
/goo.gl/FYWwqD

The post BTC Futures Coming From Team That Rebounded From Epic Snafu; Big banks not willing to support BTC futures appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

If you, too, want to help crash the Cboe website, or check out its bitcoin futures prices, you can click HERE.~JJL

As of 7:20 AM Chicago time, 2918 contracts of Cboe bitcoin had traded.~JJL

Breaking news: A pipe bomb exploded at the Port Authority Bus Terminal near Times Square. One person is reportedly in custody and he apparently was the only one injured.~JK

Congratulations to the CME Group, which raised $186,000 for its Movember Foundation campaign, including its $125,000 corporate donation, to shine the spotlight on men’s health in the areas of prostate and testicular cancer and suicide prevention.~JJL

John Lothian News has started a new Friday feature named “The Spread with Spencer Doar.” This is a recap of key stories in the world of options trading with a video introduction by JLN’s one and only Spencer Doar.~JJL

Joe Newton, the legendary York Community High School cross country coach died Saturday at the age of 88. He won 28 state titles in 53 years of coaching at Elmhurst, IL’s community high school, including coaching former JLN interns Evan Fabry and Timothy Lothian. -Via the Chicago Tribune ~JJL

All of the winners of the Risk Awards 2018 can be found here along with a profile on the company/product/individual.~SD

++++

The Spread – Week of 12/4 – 12/8

JohnLothianNews.com

A JLN debut! The Spread is a brief weekly recap of some of the notable activity in the options world. (It won’t always be this crypto heavy – we swear.)

The following are stories referenced in this week’s episode of The Spread:

• WSJ – What Could Stir Up the VIX? Higher Inflation

• Bloomberg – Pound’s Acid Test on Brexit Is Yet to Come for Options Traders

• Highly Evolved Vol Blog – The Crowded Short Vol Trade

• JLN – Cboe Throws Launch Date Punch at Crosstown Rival CME

• Bloomberg – Congress Passes Two-Week Spending Bill to Avoid Dec. 9 Shutdown

Watch the video here »

++++

Deutsche Bˆrse AG turns 25; Foundation of Deutsche Bˆrse as a stock corporation in December 1992
Deutsche Bˆrse AG celebrated its 25th anniversary on the floor of the Frankfurt Stock Exchange on Monday. On December 11, 1992, the then owners of the three independent companies Frankfurter Wertpapierbˆrse AG, DTB Deutsche Terminbˆrse GmbH and Deutsche Kassenverein AG decided on the merger, which took effect on January 1, 1993 – the birth of Deutsche Bˆrse AG. As a result, an integrated provider of exchange services emerged in Frankfurt and Germany for the first time.
/goo.gl/HNGn8K

***** I believe this means they get cheaper auto insurance rates now they have turned 25.~JJL

++++

Bitcoin Options Would Tame This Beast
Andy Mukherjee – Bloomberg
The seminal financial event of this year, the current decade, and possibly our generation is here: Futures trading in bitcoin has begun.
/goo.gl/z8Hxh3

***** Excellent idea!~JJL

++++

Bridging the Week by Gary DeWaal: December 4 – 8 and December 11, 2017 (Bitcoin Futures; Report Card; Initial Coin Offering; Disclosing Customer Information)
Bridging the Week
After a week that witnessed Bitcoin soaring to over US $17,000 at one point, CBOE Futures Exchange commenced trading cash-settled Bitcoin futures on Sunday night – albeit with a temporary website crash. But CFE’s launch of its newest futures contract, as well as other upcoming scheduled launches of cash-settled Bitcoin derivatives contracts, is not without controversy. Separately, CME Group exchanges received a generally good report card from the Commodity Futures Trading Commission following a rule enforcement review. However, CFTC staff raised concerns about certain warning letters issued by constituent exchanges and recommended that either the exchanges or futures commission merchants heighten surveillance to ensure that suspended traders don’t trade.
/goo.gl/tpV4Qk

++++

Annoying office drone forces overworked Japanese employees to knock off at night
Amanda Woods – MarketWatch
A Japanese company has created a torturous new device to force overworked employees out of the office at night ó a drone that buzzes around blaring “Auld Lang Syne.”
/goo.gl/k6WGBP

***** Sounds like a fly by night operation.~JJL

++++

Friday’s Top Three
No surprise – our list is a bitcoin trifecta. The most clicked was Bloomberg’s piece Bitcoin Futures Coming From Team That Rebounded From Epic Snafu. Second was a piece on digital assets from Trading Technologies’ Blog A Trader’s View on Crypto. In third was a JLN video – The Future of Bitcoin (Futures) – with Lanre Sarumi.

MarketsWiki Statistics Sponsored by Level Trading Field

114,403,004 pages viewed 22,940 pages 210,833 edits

++++

Lead Stories

Prices soar as new bitcoin futures start trading; Cboe Global Markets forced to halt trading twice due to ‘heavy traffic’
Philip Stafford and Gregory Meyer – FT
Bitcoin futures surged more than 20 per cent on their debut on Monday, forcing a major US derivatives exchange to halt trading twice as Wall Street seeks to ride a wave of interest in the controversial digital currency.
/goo.gl/NJCcpY

****More in our exchanges section.

Two of the Nicest Stock Exchanges Make a Fine Couple; Companies will be protected from short-term activists, and investors won’t have to deal with predatory high-frequency traders.
Matt Levine – Bloomberg
Yesterday the Long-Term Stock Exchange and IEX announced that they are teaming up to be the very nicest stock exchange, or subset of a stock exchange
/goo.gl/KFfcdU

****Press release here

Another leadership change at Deutsche Boerse?
Handelsblatt
After a tumultuous year, the head of Deutsche Bˆrse’s supervisory board, Joachim Faber, is said to be discussing plans to leave his post in 2019. The company’s shareholders appear to support the idea.
/goo.gl/iHGNY4

LSE moves quickly in search for new chief executive; Exchange begins interviews ahead of activist investor’s vote to oust chairman
Philip Stafford – FT
The London Stock Exchange Group has begun interviewing candidates for chief executive, a sign of the board’s growing confidence it will fend off an activist investor’s attempt next week to oust the chairman.
/goo.gl/4qMECL

****The Telegraph – City’s big guns will back LSE chairman in leadership battle

The New Face of Treasury Auctions; There has been a shift since the financial crisis in who is buying U.S. government bonds
Daniel Kruger and Peter Santilli – WSJ
In the depths of the financial crisis, the borrowing needs of the U.S. more than tripled, surpassing $2 trillion on an annual basis each year since 2009. Foreign investors and Wall Street banks bought most of the debt at government bond auctions.
/goo.gl/k8xk6S

HSBC set free from deferred US criminal charges; Department of Justice decision lifts five-year threat of prosecution hanging over bank
Martin Arnold in London – FT
The US Department of Justice has given HSBC a significant boost by dismissing the deferred criminal charges that have been hanging over the bank since it was fined for money laundering and sanctions breaches five years ago.
/goo.gl/Ngfufm

Bitcoin fairy dust sends other niche assets soaring; Chipmakers and investment vehicles linked to cryptocurrency rocket in value
Robin Wigglesworth, US markets editor – FT
The bitcoin mania is spilling over into semi-related, niche areas of the broader financial markets, where a clutch of cryptocurrency funds, blockchain companies and digital currency groups have rocketed in value.
/goo.gl/R4qZgF

CBOE Launches Bitcoin Futures, Site Immediately Crashes
CoinTelegraph
In a vindication of cryptocurrency exchanges which have had their share of growing pains this year, CBOE launched Bitcoin futures trading at 5 PM Central time and their website went down within minutes. CBOE has confirmed that the slowness (and 404 errors) users are receiving are due to much higher than normal traffic
/goo.gl/KcEjsm

Singapore exchange to increase derivatives trading fees; Annual levies to rise as much as 10-fold to S$25,000 from next year
Emma Dunkley in Hong Kong – FT
The Singapore Exchange is to increase fees as much as 10-fold for derivative trading members next year, following a recent large technology upgrade.
/goo.gl/ibJLT3

SEC Delays New Mutual Fund Disclosures, Citing Risk of Hacking; Details about positions in stocks, bonds and derivatives will be disclosed starting in 2019
Dave Michaels – WSJ
Mutual funds will get a nine-month reprieve from sending detailed portfolio information to their regulator as the government reviews how to ensure the valuable data isn’t hacked.
/goo.gl/69hDNe

Deutsche Bank Economist Says a Bitcoin Crash Would Endanger Global Markets
David Z. Morris – Fortune
An economist at Deutsche Bank thinks a crash in the price of bitcoin will be among the top risks to broader markets in 2018.
/goo.gl/UxLbDe

Investors Will Never Get the Answer to “Why Now?”
Joshua M Brown – The Reformed Broker
Andrew Lo’s heuristic to understanding why markets are resistant to rules is that we can’t think about them as though they’re governed by physics or mechanics. He refers to markets as biological systems, which are highly susceptible to unpredictability, adaptation and evolution. I think that’s right, based on everything I’ve seen, read and experienced over the last twenty years. Or, I should say, this is the best explanation I’ve seen anyone make.
/goo.gl/Jd2Mp6

‘A Christmas Story’ actor runs digital sports financial exchange
John Aidan Byrne – NY Post
Zack Ward ó the actor who played Scut Farkus, the bully who wore the ridiculous raccoon hat in the 1983 holiday classic “A Christmas Story” ó has a brand-new gig. He’s CEO of Global Sports Financial Exchange, which former NHL All-Star Bernie Nicholls has called a “revolutionary technology and platform.” Nicholls praised the novel way the site and app give fans of the NFL, NBA, NHL and MLB a “fantasy” sporting chance to buy and sell their favorite teams.
/goo.gl/cWkPYj

Exchanges, OTC and Clearing

Bitcoin Futures Start With a Bang as 26% Rally Triggers Halts
Rob Urban, Camila Russo and Yuji Nakamura – Bloomberg
Cboe website stalls, bitcoin’s price spikes as contracts start; Products should ease wagers on cryptocurrency’s rise or fall
Bitcoin has landed on Wall Street with a bang. Futures on the world’s most popular cryptocurrency surged as much as 26 percent in their debut session on Cboe Global Markets Inc.’s exchange, triggering two temporary trading halts designed to calm the market. Initial volume exceeded dealers’ expectations, while traffic on Cboe’s website was so heavy that it caused delays and outages. The website’s problems had no impact on trading systems, Cboe said.
/goo.gl/z3rEa7

****SD: WSJ – U.S. Bitcoin Futures Climb in First Day of Trade; Reuters – Hotly anticipated bitcoin futures surge 21 percent on debut

Cboe Bitcoin Futures Open for Trading
Cboe
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced that Cboe bitcoin futures (XBT) began trading exactly as planned at 5:00 p.m. CT on Sunday, December 10, 2017, at the start of Global Trading Hours.
/goo.gl/jz5RW7

What Comes After Bitcoin Futures?
Tiffanie Bederman – Bantix Blog
CBOE and CME are both listing Bitcoin futures products in the upcoming couple of weeks (see below for a few differences or go to our blog post for a more robust contract comparison and how to view bitcoin in QuikStrike). Established exchanges are better positioned to handle large volumes of trading like those that have presumable hobbled the major cryptocurrency exchanges today.
jlne.ws/2j7aVvv

****SD: Also from the Bantix Blog – Bitcoin Futures: CBOE vs CME

Intercontinental Exchange Appoints Boudewijn Duinstra as Head of First Line Clearing Risk for ICE Clear Europe
ICE
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that Boudewijn Duinstra has joined ICE Clear Europe as Head of First Line Clearing Risk.
/goo.gl/u3mGMN

Intercontinental Exchange Announced Election of Sharon Bowen to ICE Board of Directors
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced that its Board of Directors has elected Sharon Bowen as a new Director effective December 8, 2017. She fills a newly created seat on the Board.
/goo.gl/ZQZMDF

CME Group Named Exchange of the Year in 2018 Risk and FOW Awards
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the company was named ‘Exchange of the Year’ at the 2018 Risk Awards. In addition, CME Group was named ‘US and Canada Exchange of the Year’ and ‘Trade Repository of the Year’ by FOW in its annual international awards. Both sets of awards seek to showcase the work of firms and individuals in the derivatives markets and risk management and are widely recognised as being the most prestigious in the industry.
/goo.gl/tfUXro

London Stock Exchange bounces back to top Europe’s IPO charts
Jasper Jolly – City AM
The London Stock Exchange (LSE) is set to end the year atop the European podium for company floats, bouncing back from a weak 2016 at a crucial time for the exchange.
/goo.gl/TuQRiZ

Bitcoin exchange warns customers of system collapse if prices crash
Courtney Goldsmith – City AM
A leading bitcoin exchange has warned that customers may be unable to get their money out quickly in the event of a crash in the cryptocurrency’s price. Writing in a blog post last week, Coinbase’s co-founder and chief executive Brian Armstrong, said despite “sizeable and ongoing” increases in the firm’s technical infrastructure and engineering staff, access to Coinbase services could become “degraded or unavailable during times of significant volatility or volume”.
/goo.gl/7QhRE3

MSCI South Africa Index Futures: Withdrawal of availability for trading for U.S. Participants
Eurex
As of 8 January 2018, tradability of the MSCI South Africa Index (Eurex product code: FMZA) will be withdrawn for Eurex Participants and investors domiciled in the U.S.
/goo.gl/3Es7cP

Fintech

R.J. O’Brien becomes latest distributor of Fidessa workstation
Fidessa
Fidessa group plc (LSE: FDSA) today announced that R.J. O’Brien has signed a global agreement to distribute Fidessa’s award-winning futures and options workstation in order to meet demand from its institutional clients, initially in the UK and Europe. R.J. O’Brien is one of the largest independent futures brokerages and one of the world’s premier clearers specialising in exchange-traded futures and options.
/goo.gl/s91JhX

G. H. Financials Limited Implements Born Technology’s CrossCheck Solution for MiFID II Real-time Surveillance
Born Technology
Today Born Technology announced that G. H. Financials Limited, the global clearer of exchange traded derivatives, is implementing CrossCheck to manage their real-time surveillance needs mandated by the MiFID II regulation in Europe. The gold standard for compliance with MiFID II real-time monitoring obligations, CrossCheck consolidates multiple data feeds of real-time trading activity to provide surveillance and alert notification capabilities.
/goo.gl/Daiqem

J.P. Morgan’s Daniel Ciment: Artificial intelligence won’t kill trading jobs
Sarah Butcher – efinancialcareers
If you’re a trader who’s fearful that your entire species will be displaced by intelligent algorithms, don’t be. Daniel Ciment of J.P. Morgan says it won’t happen, and Ciment should know. Ciment is J.P. Morgan’s global head of electronic equities trading.
/goo.gl/DBEuyx

Bitcoinófriend or foe?; The now infamous cryptocurrency is sparking interest among the institutional investor community but will its dark history, volatility and technological issues hold it back?
Sarfraz Thind – The Trade
The never-ending rise of bitcoin has been both meteoric and frightening. The cryptocurrency price hit the fabled $10,000 mark in November, from just $1033 at the start of the year, while market capitalisation has surged tenfold to $160 billion leaving those who had the nerve to remain invested with some of the highest returns of any asset in the world.
/goo.gl/5Pwqgc

Thomson Reuters platform to help further develop Hong Kong’s fintech offerings
South China Morning Post
News and data giant says platform can help fintechs distribute their products (at a fee) as well as use its technology, tools and data to create products, for free
/goo.gl/W1pzmj

Politics

The Trump-Russia Probe Is About to Get Uglier; Unpleasant facts are spilling out. Republicans don’t want to know them.
Albert R. Hunt – Bloomberg
Here are two certainties about the Trump-Russia investigation. It won’t end soon. It will get uglier.
/goo.gl/aTT6PS

Wall Street lobbies against measure hitting high-tax states; Bankers say provision in Republican bill could drive high earners out of New York
Ben McLannahan, James Fontanella-Khan and Courtney Weaver – FT
Wall Street executives have begun lobbying against controversial provisions in the Republican tax overhaul bill that would hit high-tax states, arguing they could damage New York’s financial industry by driving out bankers and fund managers.
/goo.gl/UHWmH9

Trump, Brexit and Echoes of World War I; A Q&A with the historian Sir Max Hastings on worrisome parallels with the Great War.
Tobin Harshaw – Bloomberg
Of all the famous things Mark Twain never actually said, perhaps none is repeated more often and with less justification than “history doesn’t repeat, but it rhymes.” And since the election of Donald Trump as president, history as verse has become a farce:
/goo.gl/eHdfaf

Small Investors Face Steeper Tax Bill Under Senate Proposal; Senate bill would require investors unloading partial stakes in a company to sell oldest shares first
Michael Wursthorn and Veronica Dagher – WSJ
A little-discussed provision in the Senate tax bill could lead to a higher tax bill for millions of small investors and cause many to unload stocks before year-end to avoid those costs.
/goo.gl/BajMTm

Senate Tax Plan Could Also Hit Digital Wealth Advisers; Algorithms that prioritize sales of share lots that have lost value would become less effective
Michael Wursthorn and Veronica Dagher – WSj
The Senate’s proposed tax change could also hurt digital wealth advisers who rely on algorithms to make investment decisions for investors.
/goo.gl/Mn4ypr

Regulation

Labour considers moving Bank of England to Birmingham; Relocation would be part of attempt to create regional economic policy hub
Henry Mance – FT
Labour is considering relocating most of the Bank of England to Birmingham if it wins power at the next general election, a move that would shake up more than three centuries of association between the Old Lady and the City of London.
/goo.gl/YrfSgR

Monitoring of Basel Rules will be Critical
ISDA Blog
Publication of the latest package of capital requirements – often dubbed Basel IV – has been a long time coming. A year later than expected after a disagreement between European and US regulators over the level of an output floor, banks finally have clarity on the detail of the final framework.
/goo.gl/2oxcNb

China Levies Large Fine on Bank Over Bond Guarantees; Penalty is a sign Beijing is ramping up crackdown on ways banks have been hiding risks
Chao Deng and James T. Areddy – WSJ
China’s banking watchdog fined a midsize bank more than $100 million for its role in a bond default last year, one of the largest penalties levied on a Chinese bank and a sign Beijing is ramping up a crackdown on ways banks have been hiding risks.
/goo.gl/aDAWHu

Not even an SEC probe can damp demand for initial coin offerings; PlexCorps action likened to ’70s cases against sellers of whisky and orange-tree groves
Ben McLannahan – FT
Scams require at least two things: a perpetrator and a victim. In the case of PlexCorps, it appears we have perps: Dominic Lacroix and his partner, Sabrina Paradis-Royer, who are said to have conspired to defraud investors of $15m. That, at least, is the charge from America’s Securities and Exchange Commission, which launched a debut action from its cyber crime unit this week.
/goo.gl/JcxfFn

The FCA fines Bluefin £4m
Ida Axling – Insuranceage
Regulator says broker failed to manage conflict arising from being owned by Axa in 2011 to 2014.
/goo.gl/kQXWCS

FCA Fines Return to New Normal With 10-Fold Increase in 2017
Suzi Ring – Bloomberg
Regulator levied $307 million in fines over the last 12 months; Fines fell to decade low last year after Libor, FX probes end
U.K. Financial Conduct Authority fines increased 10-fold in 2017 from the previous 12 months, returning to figures more commonly seen from the regulator in the last five years.
/goo.gl/EoDP1U

Chinese Regulator Cracks Down on Booming Hedge-Fund Industry
Bloomberg News
Regulator says it’s probing 10 cases involving private funds; CSRC cites misuse of Shanghai-Hong Kong stock connect
China’s securities regulator is cracking down on the fast-growing hedge-fund industry, investigating 10 cases of alleged wrongdoing.
/goo.gl/Efo51Z

Trump Says Wells Fargo Fines Will Not Be Reduced
Alan Rappeport and Jessica Silver-Greenberg – NY Times
President Trump warned on Friday that Wells Fargo could face severe penalties for mistreatment of its customers and dismissed reports that the new leadership at the Consumer Financial Protection Bureau will go easy on banks.
/goo.gl/wktVx7

ASIC’s MoneySmart Teaching Program makes a difference in school communities
ASIC
ASIC’s MoneySmart Teaching Program aims to strengthen the financial capability of students across Australia. An independent evaluation found that the Program supports stronger student financial literacy and greater engagement with teachers and the wider school community in financial literacy education.
/goo.gl/zF4ya3

SEC Modifies Approach to Form N-PORT Filing Requirements
SEC
In recognition of the importance of sound data security practices and protocols for sensitive, non-public information, the Securities and Exchange Commission today modified its approach to the pending requirement for registered investment companies to file Form N-PORT electronically while the agency continues its previously announced review and uplift of its EDGAR and other systems.
/goo.gl/Dm1QeA

CFTC Approves Exemption from SEF Registration Requirement for Multilateral Trading Facilities and Organised Trading Facilities Authorized Within the EU
CFTC
The Commodity Futures Trading Commission (CFTC) today announced the issuance of an order exempting certain multilateral trading facilities (MTFs) and organised trading facilities (OTFs) authorized within the European Union (EU) from the requirement to register with the CFTC as swap execution facilities (SEFs). The order will become effective on January 3, 2018.
/goo.gl/tu1MQ4

FCA sets out its approach to authorisation and its approach to competition
UK FCA
The Financial Conduct Authority (FCA) has today published its approach to authorisation and its approach to competition.
/goo.gl/3vxUro

Investing and Trading

Can CalPERS Time the Market?
Amy Whyte – Institutional Investor
For nearly nine years straight, U.S. stock prices have been on the rise. By many measures, valuations are high. No one knows where the current bull run will end ó but the aging market cycle is enough to make investors nervous.
Attempts to time the market, however, can have mixed results: Sell too soon, and miss out on gains from the continuing market rally. Fail to de-risk in time, and suffer during the crash. And when the portfolio being invested is beholden to government officials and future retirees, not to mention a board, rebalancing is often easier said than done.
jlne.ws/2jcleOW

Here’s what bitcoin futures could mean for the price of bitcoin
Jacqui Frank – Business Insider
Grey Dwyer, BitMEX head of business development, talks with Business Insider executive editor Sara Silverstein about how futures contracts are going to impact the bitcoin community. Following is a transcript of the video.
/goo.gl/gKT2q8

Bring On the Bitcoin Futures Trading Insanity!
Brian Sozzi – The Street
This quote says it all about bitcoin: Be honest about three things this weekend: (1) You hate bitcoin; (2) You don’t get bitcoin; and (3) You wish the media, which really doesn’t understand bitcoin, would stop talking about bitcoin. Nevertheless, here we are on the precipice of watching bitcoin futures trading kicking off on the Cboe Sunday.
/goo.gl/nQddF1

An Expert’s Guide to Navigating the World of Bitcoin; A Q&A between Julie Verhage and Elaine Ou on crypto-assets and the resources involved in bitcoin mining.
By Elaine Ou And Julie Verhage – Bloomberg
Elaine Ou, a blockchain engineer and Bloomberg View columnist, answered questions about cryptocurrencies from Bloomberg Terminal customers in a TOPLive chat on Tuesday with Julie Verhage, who covers markets for Bloomberg News. Since then, bitcoin has skyrocketed to new heights and Cboe Global Markets Inc. plans to launch bitcoin futures trading on Sunday. Here’s a lightly edited transcript.
/goo.gl/Mdg3v9

Invest in workers, not tax cuts, to boost US productivity; Too often labour has been viewed as a balance sheet cost rather than as an asset
Rana Foroohar
Defenders of proposed tax reform legislation in the US, a corporate boondoggle being hashed out in Congress, insist tax cuts for business will ultimately be good for labour, since some of that money would trickle down in the form of more jobs and higher wages.
/goo.gl/R2p74V

Could Bitcoin’s ‘Whales’ Manipulate the Market?
By David Z. Morris – Fortune
Bitcoin has captured the public imagination this year ó or at least, as its price skyrocketed, tapped into public greed. But bitcoin was built by a tight-knit community of technology buffs and entrepreneurs, and a relatively small number of them own an outsized share of the cryptocurrency. As smaller investors enter the market, some are asking whether those “whales” are in a position to take advantage of the newcomers.
/goo.gl/V77HpZ

Bitcoin feeding frenzy fuelled by 15 times leverage, says exchange; Investors on Tokyo’s bitFlyer drive cryptocurrency price higher
Robin Harding in Tokyo – FT
The Japanese exchange at the heart of bitcoin’s recent surge has said its investors are fuelling the cryptocurrency’s feeding frenzy as they buy in with leverage up to 15 times their cash deposit.
/goo.gl/Xp5tER

Bitcoin bubble follows classic pattern of investment mania; Growth story is only an absurd appendage to what is already a craze in everything
John Authers – FT
Investment bubbles must be respected. They do not come from thin air, but rather from a reality that has been misperceived.
/goo.gl/i3ssjo

Gold’s Time Is Nigh
David Fickling – Bloomberg
Remember gold?It seems like only six years ago the shiny metal was flavor of the month, hitting a record $1,900 a troy ounce while its backers prophesied the end of the fiat money system.
/goo.gl/m22Wqe

This Harvard PhD’s AI Startup Aims to Help Analysts Triple Coverage
Adam Haigh – Bloomberg
Firm run by 31-year old Harvard alum began with Fed statements; Recommendations more useful for short-term trades: investor
After applying his machine learning programs to central bank policy statements to churn out trading calls, a hedge fund-backed political economy specialist is aiming his sights on corporate earnings announcements.
/goo.gl/JC5Mrb

You Can Trade Bitcoin Futures. But Should You?
Annie Massa – Bloomberg
Trading in bitcoin futures opened today on Cboe Global Markets Inc. Its rival, CME Group Inc., will soon follow suit. It’s a milestone in the acceptance of the digital currency by the world of mainstream investing, spurred in part by bitcoin’s meteoric rise this year. Skeptics still abound, however, including executives at some of the world’s largest banks. For the doubters, at least there’s this silver lining: Futures trading may add an opportunity to burst what they see as a bubble.
/goo.gl/xoUkBR

Institutions

Go with the flow
The Trade
Broker crossing networks will be banned and various new trading venues are entering the scene in 2018, so where the order flow will go and who will be the winners and losers, asks Hayley McDowell.
/goo.gl/Nb8rya

Traders and bankers will get some of their bonuses in bitcoin
John Aidan Byrne – NY Post
Wall Street is unveiling the bitcoin bonus for employees. Banks and brokerages will show them the money ó wads and wallets of bitcoins and cryptocurrencies to digitally juice big year-end payouts of hard cash and deferred stock awards to traders and bankers, Wall Street insiders claim.
/goo.gl/2J7x3X

Danske Bank’s Wealth Management Robot Now Has 11,500 Clients
Tasneem Hanfi Brogger – Bloomberg
In just over half a year, Danske Bank A/S has attracted 11,500 clients to an investment service provided by a robot. Denmark’s biggest financial firm now hopes the project will help it expand its wealth management operations.
/goo.gl/fB5ffH

Cantor Fitzgerald PB founder exits to join Cerberus
HFM Week
Noel Kimmel joins private equity and hedge fund giant after eight year stint
/goo.gl/2wXsdM

Regions

10 Japanese Cryptocurrency Exchanges and Tokyo Police Unite to Fight Cyber Crime
Bitcoin.com
Ten Japanese cryptocurrency exchanges have signed an agreement with the Tokyo Metropolitan Police Department to collaborate to prevent cyber crime. Along with growing bitcoin adoption in Japan is the number of cybercrime cases including unauthorized access to online accounts and money laundering.
/goo.gl/nBKPsm

‘Well, there’s no limit on it’: Ohio student makes a fortune buying Canadian-invented ether cryptocurrency; Eddy Zillan, 18, has made over $500K betting on the virtual currency
Anne Gaviola – CBC
Eddy Zillan is an 18-year-old high school senior in Cleveland. He loves going to car shows and he plans to attend dental school after he graduates to become an orthodontist. In many ways, he’s like most students his age except for the fact that he’s made a fortune buying and selling cryptocurrencies.
/goo.gl/MREsf3

North Korea is hacking bitcoin exchanges as currency value soars, expert says
Katherine Lam – Fox News
As bitcoin’s value continues to surge, North Korean hackers are taking advantage by targeting exchanges to gain financial profit, experts said on Friday as sanctions against Kim Jong Un’s regime threaten to impede on economic development.
/goo.gl/g3nUr5

China’s ethical bonds take it to top spot in green paper league; Country is joint-largest source of issuance, along with France
Kate Allen and James Kynge in London – FT
Chinese banks are using ethically labelled bonds to refinance existing loans, helping to propel the country to become the world’s biggest issuer of green paper.
/goo.gl/VHPJJr

Bank of Japan’s $150 Billion ETF Binge Looks Likely to Slow Next Year
Min Jeong Lee and Emi Urabe – Bloomberg
BOJ will cut annual target by a third, UBS and Daiwa SB say; Bank currently aims to spend $53 billion a year on ETFs
As stocks surge and consumer prices inch higher, investors say it’s time for the Bank of Japan to reduce equity purchases that have been criticized for distorting the market.
/goo.gl/4B9aVJ

World’s Largest Water Diversion Plan Won’t Quench China’s Thirst
Bloomberg News
$40 billion spent so far on aqueducts to feed northern cities; Government taps technology, boosts food imports to save water
Autumn rains came too late to save the stunted stalks of Shu Xinguo’s corn crop, withered by a dry July growing season.
/goo.gl/eD1VZV

China Audit Finds Provinces Faked Data and Borrowed Illegally
Bloomberg News
Fiscal revenues inflated, building sales faked to boost income; Xi had ordered data fraud ‘throttled’ after string of scandals
China found some local governments inflated revenue levels and raised debt illegally in a nationwide audit, a setback for Beijing in its bid to boost the credibility of economic data after a run of scandals.
/goo.gl/3LBBZJ

Norway faces dilemma over oil fund without oil; Questions raised whether sovereign wealth fund could sell out of asset it was built on
Richard Milne in Oslo – FT
An oil fund without oil. The divestment of all petroleum companies would be a momentous change for Norway’s $1tn investment fund, itself fuelled by the country’s oil and gas revenues.
/goo.gl/ZHSR7r

The decline of the Swiss private bank; A clampdown on tax evasion is forcing the closure of many institutions
Ralph Atkins and Laura Noonan in Zurich – FT
Laurent Gagnebin does not fit the traditional image of a Swiss private banker. Fifteen years ago, he worked as a manager at a luxury hotel in Gstaad. Now he is putting his hospitality skills to work as head of Rothschild’s Swiss private bank.
/goo.gl/xwNH4p

Brexit

Ex-London Brokers Cash In on Brexit as Luxembourg Lures Bankers
Stephanie Bodoni – Bloomberg
Shop selling Brit delicacies is already bustling, owners say; Grand Duchy proving to be appealing EU hub for funds, insurers
Two former London brokers in Luxembourg have hit on an old-fashioned way to hedge against Brexit.
/goo.gl/Hjh5LV

Only One Side Compromised for This Brexit Breakthrough; The U.K. bowed to EU demands on all the main issues and will have to keep doing so during trade talks.
Leonid Bershidsky – Bloomberg
After U.K. and EU negotiators reached a deal opening a path for trade negotiations on Friday, arch-Brexiter Michael Gove declared British Prime Minister Theresa May had “won.” That is a statement worthy of all the now-debunked Brexit slogans. The parties’ agreement shows the EU has given up virtually no ground, and that’s what’s likely to happen in the trade talks, too.
/goo.gl/jjBdTJ

Single market deal might halt London bank exits; Some bankers willing to reverse Brexit departures in event of eleventh-hour agreement
Laura Noonan in London – FT
Some of the City’s most influential bankers say they would halt or even reverse moves out of London if there was an eleventh-hour deal to keep the UK in the single market, in a significant departure from previous warnings of an imminent “point of no return”.
/goo.gl/xXeb6k

As Brexit Looms, Paris Tries a Business Makeover
David Segal – NY Times
The phone rings a lot at Paris Region Entreprises, a one-stop shop for companies deciding whether to move employees to the City of Light. Typically, callers ask about visas and minutiae of employment law. But not long ago, an executive from Japan called with a stumper: Where, he asked, are the dancing clubs?
/goo.gl/x58qSo

Brexit: City of London will lose 10,500 jobs on day one, says EY; Dublin and Frankfurt are most likely to benefit from UK’s departure from EU, says accountancy firm
Jill Treanor – The Guardian
City firms plan to move 10,500 jobs out of the UK on “day one” of Brexit, with Dublin and Frankfurt the financial centres most likely to benefit from the UK’s departure from the EU.
/goo.gl/b1RWKc

Miscellaneous

Climate Change Might Make Chocolate Taste Better, Which Gives Us Mixed Feelings
Janissa Delzo – Newsweek
Good news, chocolate-lovers: climate change may have a silver lining. In fact, it could make the delicious, sweet treat even tastier. According to a recent study, the type of weather that a cocoa tree is raised in can impact how the fermented seedsóthe main ingredient in chocolateótaste.
/goo.gl/SV9RE8

How to give the gift of bitcoin this holiday season
CBNC
The crazy rise of bitcoin is certainly going to be the topic at holiday dinners this season. Forget giving out lotto ticket scratch-offs. This season you should be giving the gift of bitcoin.
/goo.gl/2m7FXp

Men in positions of authority are in dire need of rules on appropriate workplace behaviour
Peter Guy – South China Morning Post
As a journalist, I love to witness people being burned at the stake. The spectacle never gets boring. The theme that represents the “stake” and the type of heresy may change. But the cheering crowd never fails to congregate – especially on the internet.
/goo.gl/69Bgpe

The post Bitcoin futures start trading; IEX and LTSE team up; Another Deutsche Boerse leadership change? appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

A new survey from DTCC shows geopolitical risk as a top 5 concern of 69 percent of those surveyed – an all-time high. Plenty of other fun stats and infographics in there to digest.~SD

Deutsche Boerse turned 25 years old. I believe I was once told that the average age of the people who started it was 28. ~JJL

Have you seen the Chicago Blockchain Project?~JJL

Yesterday’s JLN Options newsletter covered the lack of FX volatility, the potential for bitcoin options and the short vol trade.~SD

The NFA staff coordinated the donation of over 645 books to children from Chicago through the #OperationSanta program. via LinkedIn~ JJL

Asia Pacific Financial News from John Lothian News – December 11, 2017.~JJL

CME Group will launch Bitcoin futures, based on the CME CF Bitcoin Reference Rate (BRR), on December 18, 2017.~JJL

The @JohnLothian Twitter account had 53,828 original impressions on Monday.~JJL

++++

++++

Former Facebook exec says social media is ripping apart society
CNBC
Another former Facebook executive has spoken out about the harm the social network is doing to civil society around the world. Chamath Palihapitiya, who joined Facebook in 2007 and became its vice president for user growth, said he feels “tremendous guilt” about the company he helped make. “I think we have created tools that are ripping apart the social fabric of how society works,” he told an audience at Stanford Graduate School of Business, before recommending people take a “hard break” from social media.
/goo.gl/ZHKSGj

****** Toy of the year for this holiday season is a Russian Troll.~JJL

++++

Exchange chief accuses derivatives lobby of ‘cheap shot’ over bitcoin futures
Samuel Agini – Financial News
Edward Tilly told Financial News that comments last week from the Futures Industry Association’s CEO Walt Lukken, who suggested that bitcoin futures had come to market too quickly, were “irresponsible”.
jlne.ws/2B65wvh

****SD: FIA conferences just got more interesting.

++++

Marshall Loeb, Editor Who Shaped Money and Fortune Magazines, Dies at 88
Robert D. Hershey Jr. – NY Times
Marshall R. Loeb, a business journalist who turned a floundering Money magazine into one of the nation’s most successful publications in the 1980s and then led a similar revival at Fortune, died on Saturday in Manhattan. He was 88.
/goo.gl/neqNms

***** A giant among financial journalists.~JJL

++++

Bitcoin Futures Set Scene for More Gambling
Richard Beales – NY Times
Bitcoin action is now available without the Bitcoin. The Chicago Board Options Exchange started offering futures on the cryptocurrency late on Sunday. The new contracts open fresh avenues for trading, but for now they have little utility beyond speculation.
/goo.gl/2tR1VV

***** Bitcoin is a currency default swap. That is their utility.~JJL

++++

Monday’s Top Three
Bitcoin, Bitcoin, Bitcoin! Our top viewed item yesterday was the Cboe Bitcoin Futures landing page. Second went to Bloomberg’s piece Bitcoin Options Would Tame This Beast. Third went to the FT’s opening day coverage in Prices soar as new bitcoin futures start trading

MarketsWiki Statistics Sponsored by Level Trading Field

114,488,664 pages viewed 22,941 pages 210,863 edits

Lead Stories

US financial regulators warn investors on bitcoin risks; CFTC raises concerns on volatility and SEC clamps down on initial coin offerings
Chloe Cornish – FT
Two top US financial regulators on Monday weighed into the frenzy surrounding trading in cryptocurrencies, warning investors about the risks connected with volatile digital assets on the day bitcoin made its whirlwind debut in the mainstream financial system.
/goo.gl/8XCLeJ

****SEC Chairman Jay Clayton’s statement here and CFTC Chairman Giancarlo’s here. WSJ’s take here.

Meet Chicagoans jumping into the world of bitcoin
Samantha Bomkamp – Chicago Tribune
In January, Mike Haynes’ salary was cut in half as the tech startup he worked for restructured. By spring, he had burned through most of his savings. Now he’s one of the many speculators chasing their fortunes though bitcoin investing.
/goo.gl/VtqDyX

The Force Behind Bitcoin’s Meteoric Rise: Millions of Asian Investors; Bulk of trading in the virtual currency is driven by individual investors in the East
Steven Russolillo and Eun-Young Jeong – WSJ
Behind the stunning rise of bitcoin lies a new force in global financial markets: millions of individual Asian investors.
/goo.gl/aYsvDC

Bitcoin’s rise is no joke, it is a sign of the failure of financial services
Dave Morris – Financial News
Bitcoin’s surge past $17,000 late last week reinforces an important economic theory: a rapidly-expanding asset bubble will always draw a crowd. But it should also reinforce fears about a situation that is not limited to a few foolish retail punters and a few swashbuckling hedge funds. This is a crisis for financial services.
/goo.gl/t6pswT

Meet the exchange boss ready for another run at Mifid; Though he was leading a scrappy upstart in Mifid I, Mark Hemsley believes there will be opportunities for giants like Cboe this time around
Samuel Agini – Financial News
Mark Hemsley was in a very different position the last time European lawmakers put the region’s traders on red alert.
/goo.gl/vU2Pf9

Must-Reads of 2017: How Finance Ate Everything; Three books chronicle the financial revolution that’s transforming our world.
Pankaj Mishra – Bloomberg
Three decades ago, a revolution occurred in the world economy. Today, we’re living through its extensive political consequences. This revolution consisted of financialization. Financial services, from banks and hedge funds to trading houses, became the largest industry in the U.S. Market speculation replaced industrial productivity as the motor of U.S. growth, while mobile capital was steadily liberated from tax and regulatory regimes around the world.
/goo.gl/bBh2Jg

ETFs shattered their growth records in 2017
Ryan Vlastelica – MarketWatch
Exchange-traded funds have been in the investing mainstream for years. In 2017, they became the default.
/goo.gl/WWkqvr

R.J. O’Brien Limited Hires Veteran UK Institutional Brokerage Team: Global Macro Fixed Income Specialists Marnane, Tesi
R.J. O’Brien & Associates
R.J. O’Brien & Associates (RJO) announced that veteran institutional brokers Barry Marnane and Neil Tesi have joined its London-based affiliate, R.J. O’Brien Limited (RJO Limited). Operating as a team for 16 years, Marnane and Tesi specialize in global macro fixed income futures and options execution.
/goo.gl/8KX6zZ

Why the Future Could Be Bumpy for High-Tech Hedge Funds
WSJ
Machine learning, a set of techniques that empowers computers to find patterns in data without using rules prescribed by humans, has been producing advances in a range of fields, from robotics to weather forecasting to language translation. The technique is at the heart of efforts to build self-driving cars.
/goo.gl/QduKpj

Bitcoin ‘Sect’ Stuns Online Broker in Sweden With 50-Fold Jump
Hanna Hoikkala and Niklas Magnusson – Bloomberg
Bitcoin futures just became a reality on Wall Street, but Sweden has been offering derivatives on the cryptocurrency for years. That gentrification has driven bitcoin trading in Scandinavia’s biggest economy to alarming levels, according to an online brokerage that facilitates the transactions.
/goo.gl/pdn4sK

Why Arbitrage Traders Are Salivating Over Bitcoin Futures
Annie Massa and Sonali Basak – Bloomberg
Cboe’s contracts have traded at an eye-catching 13% premium; But CEO says it’ll take time for that gap to disappear
The proverbial free lunch is just sitting there in the hours-old bitcoin futures market. So why isn’t it being gobbled up?
jlne.ws/2B7uudN

Fed finalises new market benchmarks
Central Banking
The Federal Reserve has finalised its proposals for replacing US dollar Libor, confirming on December 8 that three new market benchmarks will launch in 2018.
The three rates are calculated as the volume-weighted median of transactions data from US Treasury markets, rather than the bank submissions that underpinned Libor, which ultimately proved flawed. The New York Fed will be responsible for publishing the rates, with their launch set for the second quarter of 2018.
/goo.gl/QitRVS

Exchanges, OTC and Clearing

‘More to come’ after bitcoin futures launch: Cboe CEO
John McCrank – Reuters
The generally smooth launch of bitcoin futures on Cboe Global Markets (CBOE.O) could pave the way for other cryptocurrency-related products like options and ETFs, the head of the exchange operator said in an interview on Monday.
jlne.ws/2B5xyHa

Cboe Bitcoin Futures (XBT) Close First Day of Trading; Post Volume of More Than 4,000 Contracts
Cboe
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, today announced Cboe bitcoin futures (XBT) traded a reported 4,127 contracts in their first day of trading. XBT futures debuted Sunday, December 10, at 5:00 p.m. CT, the beginning of Global Trading Hours. The first trading session closed at 3:15 p.m. CT today, December 11.
/goo.gl/as7tYj

Qatar Investment Authority puts weight behind LSE chairman in battle with activist investor Sir Chris Hohn
Jasper Jolly – City AM
The Qatar Investment Authority (QIA) will back the chairman of the London Stock Exchange (LSE) in a vote next week on removing him, dealing a significant blow to the efforts of the activist hedge fund behind the campaign.
/goo.gl/uCj1oG

Bitcoin Contracts Are Still Tiny in the World of Commodity Futures
Elena Popina – Bloomberg
Just over $50 million traded in first 15 hours after open; Nasdaq 100, copper futures move more than $3 billion apiece
The first reliable lens into tick-by-tick liquidity for bitcoin shows a financial commodity that is still a baby relative to its peers.
jlne.ws/2B6OI7v

Low-Volatility 2017 Marks High Demand for VSTOXX
Eurex
Trading in derivatives tied to the EURO STOXX 50 Volatility Index, or VSTOXXÆ, will end 2017 with record volumes as more investors turn to the benchmark as a gauge of political and market risk in Europe.
/goo.gl/cDFjqz

Bitcoin Buyers Get Unwanted Message: Wait in Line; Exchanges that handle trading of cryptocurrency struggle to cope with a surge in volumes
Gregor Stuart Hunter – WSJ
Some of the world’s biggest cryptocurrency exchanges have experienced disruptions in recent days as interest in bitcoin surged in the weeks leading up to Sunday’s launch of bitcoin futures.
/goo.gl/jQMvam

MSCI South Africa Index Futures: Withdrawal of availability for trading for U.S. Participants
Eurex
As of 8 January 2018, tradability of the MSCI South Africa Index (Eurex product code: FMZA) will be withdrawn for Eurex Participants and investors domiciled in the U.S.
/goo.gl/3Es7cP

Singapore exchange to increase members’ derivatives fees; Annual levies to rise as much as 10-fold to S$25,000 from next year
Emma Dunkley – FT
The Singapore Exchange is to increase fees as much as 10-fold for derivative trading members next year, following a recent large technology upgrade.
/goo.gl/ibJLT3

Bitcoin futures volumes outstrip cautious expectations; Debut of derivatives is a watershed moment for the digital currency
Gregory Meyer in New York and Philip Stafford in London – FT
More than $75m worth of bitcoin futures traded on their first day in financial markets, representing a modest but significant sum for derivatives on a digital currency whose underlying utility is still a matter of debate.
/goo.gl/9P74DV

Bitcoin futures off to slow start at Cboe
Lynne Marek – Crain’s Chicago Business
Trading in Cboe Global Markets’ new bitcoin futures contract got off to a slow start, but traders expect it will increase before larger rival CME Group unleashes a competing contract next week.
/goo.gl/jMoSwY

New Bitcoin ETF Filings Follow CBOE Futures Debut
Stan Higgins – Coindesk
New public filings suggest that the launch of new bitcoin futures products in the U.S. has renewed a push to create exchange-traded funds (ETFs) tied to the cryptocurrency.
/goo.gl/5HKpXE

FTSE Russell confirms launch of new index showcasing Italian brands
FTSE Russell
New FTSE Italia Brands Index due to go live on 18 December 2017; Index comprises initial 22 constituents* of Italian Listed Brands; Italian Listed Brands was established by Borsa Italiana to promote the best Italian brands by creativity, excellence, intuition and innovation.
FTSE Russell has confirmed that it will expand its FTSE Italia Index Series with the launch of a new FTSE Italia Brands Index. The new index will comprise the initial 22 constituents* in the FTSE Italia All-ShareÆ Index that are included in the Italian Listed Brands, as defined by Borsa Italiana in October this year. The new index is due to go live on Monday 18 December 2017.
/goo.gl/SPX5Yn

NASDAQ becomes shareholder of Kazakh AIFC
Azernews.com
The NASDAQ stock exchange has become a strategic partner and shareholder of the Astana International Financial Center’s (AIFC) Stock Exchange.
/goo.gl/S1E4mZ

November 2017: ETFs turnover reaches all-time high
SIX News
The statistical monthly report contains the latest trade and turnover figures for SIX Swiss Exchange.
/goo.gl/PYfe6W

Fintech

UBS to Launch Live Ethereum Platform with Barclays, Credit Suisse and More
Michael del Castillo – CoinDesk
Just in time for the implementation of stringent new regulatory requirements, some of the largest banks in the world have revealed a pilot designed to simplify compliance using ethereum.
jlne.ws/2B6Xcev

R.J O’Brien to distribute Fidessa’s trading tools; Demand for Fidessa’s futures and options workstation from institutional clients has grown ahead of MiFID II.
By Hayley McDowell – The Trade
Futures broker R.J O’Brien has signed a global agreement with Fidessa to distribute its futures and options trading workstation.
/goo.gl/imvVih

Vela ready for Bitcoin futures trading on Cboe and CME
Vela
Vela, the premier market access technology provider, today announced the support of Bitcoin futures. Firms that wish to take advantage of the new Bitcoin futures contracts from Cboe Futures Exchange (CFE) and CME Group Inc. (CME) will be able to receive market data and trading access without delay from launch. Data and trading access to the Nasdaq Bitcoin Futures contracts will also be available on launch in 2018.
jlne.ws/2B5wsv1

Two banks join Baton for high-speed FX settlement
Helen Bartholomew – Reuters
Baton Systems, a two-year old fintech firm, is working with two of the largest banks in foreign exchange trading for the Q1 launch of a new payment system.
jlne.ws/2B4Q1ng

The Top 8 Metamako Moments of 2017
Annekathrin Hase – Metamako Blog
2017 was a momentous year for us. We released new products, doubled our client base and bagged recognitions from journalists and the media. To share our excitement, here are our Top Metamako Moments of the year.
jlne.ws/2B7aPe0

Liquidnet Launches Customizable Virtual High TouchÆ Workflow for Fixed Income; New workflow and audit trail represents a MiFID II compliant solution to corporate bond trading
BusinessWire
Liquidnet, the global institutional trading network, today announced the launch of Virtual High Touch (VHT) for Fixed Income. VHT is an intelligent execution workflow designed to augment the corporate bond trader’s decision making process. It evaluates order characteristics, market data, liquidity conditions, and user preferences to suggest an optimal execution strategy for different groups of orders.
/goo.gl/cTv6N6

People are ramping up bitcoin-related job searches after its massive rally
John Detrixhe – Quartz
A growing number of people are looking to hitch their careers to bitcoin’s rally this year by seeking out jobs in the crypto industry. Searches for roles mentioning “blockchain”, “bitcoin,” or “cryptocurrency” have increased more than tenfold in the US over the past two years, according to employment website Indeed.
/goo.gl/jCpnVC

Politics

Goldman Warns of U.S. Nafta Exit as Negotiators Seek Small Wins
Josh Wingrove, Andrew Mayeda and Eric Martin – Bloomberg
Investors remain on alert over the threat of Nafta talks failing even as negotiators meet this week in Washington and seek minor victories on less contentious issues.
jlne.ws/2B4H9xY

Goldman Sachs Is Coming for Tea and Cookies With U.K.’s Labour
Svenja O’Donnell and Anna Edwards – Bloomberg
McDonnell says U.S. bank approached him requesting meeting; Hits back at suggestion Labour would trigger run on the pound
McDonnell speaks with Bloomberg’s Anna Edwards about Labour’s vision for Brexit.
U.K. Shadow Chancellor John McDonnell is preparing to meet Goldman Sachs Group Inc. in a further sign that companies are starting to take seriously the possibility of a Labour government.
/goo.gl/VA72hM

Regulation

Statement on Cryptocurrencies and Initial Coin Offerings
SEC Chairman Jay Clayton
The world’s social media platforms and financial markets are abuzz about cryptocurrencies and “initial coin offerings” (ICOs). There are tales of fortunes made and dreamed to be made. We are hearing the familiar refrain, “this time is different.”
/goo.gl/gbZTr3

Stock Trader Charged in Insider Trading Ring
SEC
The Securities and Exchange Commission today charged a former day trader with making more than $1 million in illegal insider trading profits as part of a ring that allegedly stole confidential information from investment banks and clients so they could trade in advance of secondary stock offerings.
/goo.gl/bNLtX8

Company Halts ICO After SEC Raises Registration Concerns
SEC
A California-based company selling digital tokens to investors to raise capital for its blockchain-based food review service halted its initial coin offering (ICO) after being contacted by the Securities and Exchange Commission, and agreed to an order in which the Commission found that its conduct constituted unregistered securities offers and sales.
/goo.gl/UdLLVz

Statement From Enforcement Division Co-Directors on Jury Verdict in Financial Fraud Case
Stephanie Avakian, Co-Director, SEC Division of Enforcement; Steven Peikin, Co-Director, SEC Division of Enforcement
“We are pleased by the jury’s verdict holding Revolutions Medical Corp. and its CEO Rondald L. Wheet liable for violating the antifraud provisions of the federal securities laws. This verdict affirms that corporate executives must be completely truthful when they speak about their companies in press releases. Investors are entitled to accurate information, and when CEOs cross the line from truth to lies, we will seek to hold them accountable.”
/goo.gl/FdP4gL

Giancarlo Commends SEC Chairman Clayton on ICO Statement
CFTC
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo issued the following statement commending Securities and Exchange Commission (SEC) Chairman Jay Clayton’s statement on initial coin offerings:
/goo.gl/fXud8z

CFTC Staff Issues Interpretive Guidance Clarifying Commodity Trading Advisor Registration Requirements Resulting from the European Union’s MiFID II Research Compensation Provisions for Investment Managers
CFTC
The Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight (DSIO) today issued interpretative guidance providing that a futures commission merchant (FCM), swap dealer (SD), or introducing broker (IB) that receives separate compensation for commodity trading advice is not required to register as a commodity trading advisor, provided that the offered advice is “solely incidental” to the conduct of the FCM’s or SD’s business, or “solely in connection with” the operation of the IB’s business.
/goo.gl/G3dxnA

Upcoming Board Meeting
FINRA
The FINRA Board of Governors meets this week for the final time in 2017. As is customary for each year’s December meeting, the Board’s discussions will review 2017 accomplishments and FINRA’s 2018 goals and budget. In addition, we are reviewingóas part of the FINRA360 organizational reviewóthe guiding principles that inform how we manage our finances.
/goo.gl/GFjRKe

ASIC broadens fintech cooperation with Canadian regulators
ASIC
ASIC has today announced a Cooperation Agreement with Canadian regulators on fintech cooperation. This agreement expands the existing framework for information sharing and also allows the referral of innovative fintech businesses to and from Canada
/goo.gl/RZLJSG

ASIC’s regulatory sandbox proposal to remain unchanged
ASIC
ASIC has today released a review of its regulatory sandbox, introduced in December 2016. In the review ASIC proposes to retain class waivers known as the fintech licensing exemption, that allow eligible financial technology (fintech) businesses to test certain specified services without holding an Australian financial services or credit licence. ASIC had committed to reviewing its fintech licensing exemption following 12-18 months’ operation.
/goo.gl/5Qzgyw

Bitcoin surge prompts legal bid to remove Mt Gox from bankruptcy; Creditors say 40-fold rise in value means exchange’s assets now dwarf its liabilities
Leo Lewis in Tokyo – FT
A group of creditors pursuing a potentially vast bitcoin fortune from the imploded Mt Gox exchange have begun a legal action in Tokyo that would, if successful, remove the company from bankruptcy, disburse more than $3bn worth of coins among depositors and stop its former chief executive emerging from the debacle as a multibillionaire.
/goo.gl/E7p4Rg

British Ex-Banker Appeals Conviction for Slaying Two Women in Hong Kong
Associated Press
A British banker sentenced to life in prison for the gruesome slayings of two Indonesian women appeared in a Hong Kong court on Tuesday to appeal his conviction.
/goo.gl/Fckkyq

FCA makes it easier for people to compare bank accounts
UK FCA
The Financial Conduct Authority (FCA) has today published final rules which will require providers of personal current accounts and business current accounts to publish information that will help customers to compare the service they could receive from different providers.
/goo.gl/pLPZqR

Investing and Trading

U.S. fund firms make new push for bitcoin ETFs as futures debut
Trevor Hunnicutt – Reuters
Fund managers are racing to launch exchange-traded funds (ETFs) based on bitcoin after futures contracts based on the high-flying digital currency began trading on Sunday.
jlne.ws/2B5VslR

Stop Talking About Bitcoin’s Market Cap; Comparisons to real companies, currencies and countries are flawed measures for the cryptocurrency
Aaron Back – WSJ
Bitcoin is taking over the world. Its rapidly rising value is making it bigger than some major financial companies, some big currencies and many of the world’s countries. Or so the bitcoin cheerleaders say.
/goo.gl/JZAMBL

Commodity assets under management at highest in 4 years; Rising oil prices and stronger fund inflows into energy resources drive sector
Emiko Terazono in London – FT
A rising oil price and robust global growth has helped drive the amount of money invested in commodities to the highest in more than four years, according to Citigroup.
/goo.gl/L18TiH

US company sues China’s HNA over failed deal; Complaint alleges group intentionally misled American authorities and disguised ownership
Don Weinland in Hong Kong – FT
HNA Group is facing a lawsuit in the US over a failed acquisition, with its takeover target alleging the Chinese conglomerate intentionally gave false information to US authorities and disguised its true ownership structure.
/goo.gl/fxDcV6

What Hedge Funds Will Do After the Hedge Fund Model Dies; As long-short strategies take a beating, managers see niches like private debt as fuel for future returns.
Katherine Burton – Bloomberg
As long-short withers, firms turn to niches like private debt; This story is part of a series on the future of investing
The long and short on hedge funds is that long and short isn’t working so well anymore.
/goo.gl/FrooVh

Bitcoin Frenzy Poses No Threat to Bullion, Goldman Sachs Says
Ranjeetha Pakiam – Bloomberg
The flurry of excitement over bitcoin and the lackluster performance of gold have begged the question: is the cryptocurrency taking demand from bullion?
/goo.gl/3Dgdy4

Who’s Afraid of Bitcoin? The Futures Traders Going Short; Bitcoin bears got steamrolled by bulls on first day of futures
Alexander Osipovich and Gunjan Banerji – WSJ
Bullish bitcoin traders overpowered bearish ones on Monday, as the much-heralded launch of bitcoin futures further fueled exuberance for the nine-year-old digital currency.
/goo.gl/tgWxHC

Bitcoin Futures and Banky Thoughts
Matt Levine – Bloomberg
“It is rare that you see something more volatile than bitcoin,” said consultant Zennon Kapron to Bloomberg News, “but we found it: bitcoin futures.” Congratulations then! Cboe Global Markets Inc.’s bitcoin futures started trading at 6 p.m. Eastern time yesterday, and promptly blew through trading halts at up 10 percent and up 20 percent from their opening price of $15,000. The January contract hit a high of $18,850 overnight, though it is lower this morning.
/goo.gl/egDKJA

Missed the bitcoin boom? Five more baffling cryptocurrencies to blow your savings on
Alex Hern – The Guardian
If you are worried you’ve missed out on making millions by betting on bitcoin, don’t worry: there will be plenty more bizarre, borderline-incomprehensible digital bubbles in the future, and their value is only going to go up (until it all comes crashing down, that is). Here are five assets each competing to be the next bitcoin.
/goo.gl/rPWsPo

Institutions

ING deploys AI to bond trading desk; Katana tool aims to reduce trading costs and allow traders to provide faster pricing for buying and selling bonds.
Hayley McDowell – The Trade
ING is rolling out a new artificial intelligence (AI) powered bond trading tool which has already been used on the firm’s emerging markets desk.
/goo.gl/ZVZ7m8

ING launches artificial intelligence bond trading tool Katana; Technology will help Dutch bank’s traders to gather better prices faster
Laura Noonan, in London – FT
Dutch lender ING has become the latest bank to embrace the trading room robot revolution with the introduction of technology that will help human traders to swiftly gather better bond prices.
/goo.gl/h8xPnL

Tradeweb to operate as an OTF for MiFID II; Tradeweb gains regulatory approval from the FCA to operate as an OTF for MiFID II.
Hayley McDowell – The Trade
Tradeweb will operate an organised trading facility (OTF) once MiFID II comes into effect following regulatory approval by the Financial Conduct Authority (FCA).
/goo.gl/9eyCNr

Passport Capital to Shut Flagship Hedge Fund After Losses, Redemptions; ‘Returns over the past two years are unacceptable,’ John Burbank wrote to investors
Rob Copeland – WSJ
John Burbank’s Passport Capital, famed for its profitable bets against subprime housing ahead of the financial crisis, will shutter its flagship fund after persistent losses, according to a letter to investors.
/goo.gl/mLmCfc

The Future Is Bumpy: High-Tech Hedge Fund Hits Limits of Robot Stock Picking; Voleon is among investors deploying machine learning, a technology in which computers develop trading strategies. It’s harder than it sounds.
Bradley Hope and Juliet Chung – WSJ
For Michael Kharitonov, building a hedge fund based on machine learning has been a rule of threes: It was three times as hard, and it took three times as long, as anticipated.
/goo.gl/ZatSFT

Glencore’s Trading Prowess Sets Unit Up for Second-Best Year
Thomas Wilson and Mark Burton – Bloomberg
Miner will hold a conference call for investors later today; ‘Marketing is highly cash generative across the cycle’
Glencore Plc said its powerful trading business will be a star performer again this year.
/goo.gl/vofrhc

RBS Leaves Bonus Pool Flat for First Time Since Crisis
Stefania Spezzati – Bloomberg
Bonuses have dropped 75% since 2010 at government-owned lender; Lender has made progress on capital as U.K. eyes stake sale
Royal Bank of Scotland Group Plc is likely to leave its bonus pool little changed this year, according to people with knowledge of the matter, ending a spate of annual declines in payouts dating back to the financial crisis.
/goo.gl/sGyHKk

UBS to Launch Live Ethereum Compliance Platform
Michael del Castillo – Coindesk
Just in time for the implementation of stringent new regulatory requirements, some of the largest banks in the world have revealed a pilot designed to simplify compliance using ethereum.
/goo.gl/jztahB

UBS leads blockchain data reporting pilot ahead of new EU rules
Brenna Hughes Neghaiwi, Anna Irrera – Reuters
Financial companies led by Swiss bank UBS (UBSG.S) are testing a blockchain platform to help them comply with new European Union trade data standards due to come into force next year.
/goo.gl/HsGYXK

Regions

British investment firm Man Group launches China hedge fund
Reuters
British investment firm Man Group PLC said it has launched a hedge fund in China, becoming the first foreign firm to run a quantitative investment fund in the country.
/goo.gl/GCDYWa

Former Turkish investigator tells U.S. jury of uncovering bribe scheme
Brendan Pierson – Reuters
A former Turkish police investigator on Monday told jurors in the trial of a Turkish bank executive charged with evading U.S. sanctions against Iran that he found shoeboxes full of cash in the home of another high-ranking Turkish banker.
jlne.ws/2B5MSU7

The race is on to make London the smartest city in the world
Theo Blackwell – City AM
Connectivity is now just as important as the supply of energy and water (Source: Getty)
As London’s first chief digital officer, with more than 20 years of experience in the tech sector, I know how technology has the power to transform all our lives.
/goo.gl/aWgMVa

City would be wise to watch Bitcoin bubble from sidelines
Matthew Lynn – Telegraph
A currency that sort of exists and sort of doesn’t. Which you are buying not now, but in the future. And where you pay a bit of the money upfront, with the rest on tick. Oh, and you aren’t actually buying the thing itself, assuming it exists that is, but a synthetic derivative of it. So, in effect, you are investing in an imaginary asset, with money that doesn’t exist, in a time and place yet to be determined. What could possibly go wrong? It sounds like a sure bet!
/goo.gl/m9n2mK

China Influence Fears Cost a Rising Political Star His Job; Australian lawmaker Sam Dastyari had taken donations from a billionaire Chinese businessman
Rob Taylor – WSJ
The downfall of a prominent lawmaker is fueling a growing sense of unease in Australia about Chinese influence in the country’s domestic affairs, and raising tensions with its most important trading partner.
/goo.gl/J3NtwF

Austrian Explosion Rattles Europe’s Gas Market
Rob Verdonck, Mathew Carr and Anna Shiryaevskaya – Bloomberg
Explosion at one of Europe’s main hubs roils markets; Britain already coping with cold snap, cracked North Sea pipe
U.K. natural gas prices jumped the most in more than eight years after an explosion at one of Europe’s biggest supply hubs threatened to curb flows during a cold snap.
/goo.gl/JV3YCR

Brexit

Brexit is turning into a civilised divorce; Britain and the EU both want to re-establish an amicable relationship
Gideon Rachman – FT
Divorce metaphors are unavoidable when talking about Brexit. The good news about last week’s preliminary deal is that the separating couple seem to have moved beyond the phase in which they simply hate each other’s guts. Instead, Britain and the EU are getting down to the sad, hard business of hammering out a permanent separation. Both sides know that there will be damage done. But they also seem to share an aspiration to re-establish an amicable, working relationship ó eventually.
/goo.gl/2fzxSx

Miscellaneous

Business Takes a Hit When Fake News Baron Tries to Play It Straight; Partisan news publisher thinks he’s following Facebook’s rules, but it’s not working
Sarah Frier – Bloomberg
Cyrus Massoumi spent the last few years building exactly what he thought would thrive on Facebook: A series of inflammatory conservative websites, finely tuned to produce the most viral and outrageous version of the news. The social network rewarded him with an audience.
/goo.gl/YUqWTS

He Sparked the Fake News Boom. Then Facebook Broke His Business; Outrage. Clickbait. Misleading headlines. These tactics snowballed into the phenomenon we now know as fake news.
Sarah Frier and Aki Ito – Bloomberg
From a young age, Cyrus Massoumi knew he wanted to become rich one day. In 2012, he figured out how: by creating an inflammatory, hyper-partisan news site that used Facebook to make its articles go viral. This week, Bloomberg Technology’s Sarah Frier and Aki Ito talk to Cyrus about how MrConservative.com’s success sparked a frenzy of other sites like it. Cyrus watched the phenomenon snowballóuntil one day he realized he had created a monster.
/goo.gl/CdNYBJ

The post US financial regulators warn investors on bitcoin risks; Asian buyers spur bitcoin rise appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

The CFTC’s Technology Advisory Committee will meet in Washington, DC on January 23, 2017. As a TAC member, I will be in attendance.~JJL

Asia Pacific Financial News from John Lothian News – December 12, 2017~JJL

Interest in volatility products is not limited to the Cboe – Eurex will end 2017 with record trading volumes in its VSTOXX futures and options.  Options ADV has roughly doubled and daily futures trading is up some 37 percent.~SD

The @JohnLothian twitter account yesterday tweeted 139 times and had 50,707 original impressions.~JJL

CME Group has already raised the initial margin requirements for its bitcoin futures product from 35 percent to 47 percent, citing volatility. ~SD

Yesterday’s JLN Options newsletter had lead stories covering ambiguity vs. volatility, clearing of forex options and the “war on Dutch prop shops.”~SD

When reading a Reuters article about the rise of esports in China, I got to wondering about the total size of the digital gaming market. (Maybe all this talk of Bitcoin’s market cap has me thinking this way?) According to market intelligence firm Newzoo, the global games market will hit $116 billion in 2017, growing to $143 billion in 2020. For some context, that is already pretty close to the global sports business, estimated at some $130 billion to $150 billion annually.~SD

Former Eris Exchange executive Chris Rodriguez is now global head of workflow at Symphony.~JJL

SGX FTSE China A50 futures’ average daily turnover grew 58% m-o-m to hit a 20 month high of US$4.4 billion (332,381 contracts) in November 2017. Open interest grew 7% m-o-m to appx. US$9 billion (698,683 contracts).~JJL

My Boy Scout troop earned its 3rd Journey to Excellence Award at the gold level, which is the highest you can earn. The troop is the only one in its district to have earned 3 straight gold level JTE awards.~JJL

++++

Breaking Through: Linda Raschke, Part 1
Kara Grygotis – Trading Technologies Blog
Our final piece in this series is a conversation with Linda Raschke, who moved from the trading floor to the trading screen by chance, yet went on to have an extremely successful career. Read on to learn about Linda’s career path, how she bounces back from losses and more.
jlne.ws/2B9OnAO

****SD: Love the answer to “how’d you get into futures?” as it’s pretty much “I had to occupy my time as an equity options trader somehow.” Biggest lesson learned? “Don’t sell straddles on takeover stocks.”

++++

Hooray for Bitcoin (but Don’t Buy It); The price reached $19,000 last week. It is certain to hit zero.
Lawrence Baxter – WSJ
The price of bitcoin broke $19,000 last week, and traders and speculators are giddy. Fortunes are being made. But in the long run, the smart bet is against bitcoin, for at least four reasons.
/goo.gl/RTGXHo

****SD: Certain to hit zero, eh? Recall the quote from record holding ex-NHL coach Scotty Bowman, “There is nothing so uncertain as a sure thing.”

++++

Tech Upgrade Commands CFO’s Focus; Amy Shelly of Options Clearing Corp. faces several challenges in replacing the organization’s outdated platform.
David McCann – CFO Magazine
The privately held financial-market utility that settles and clears transactions for all 15 U.S. option exchanges and 3 futures exchanges has a problem: Its technology is woefully outdated.
/goo.gl/Kq1s6Y

**Who do you know who has great clearing technology for sale?~JK

++++

Tuesday’s Top Three
Our top read piece yesterday was a simple link to Chicago Blockchain Project. Do you know what that is? Second was the Chicago Tribune’s piece Chicagoans are jumping into the world of bitcoin: ‘Everyone thinks I’m crazy’. Third went to the CNBC piece about Chamath Palihapitiya, the Former Facebook exec says social media is ripping apart society. What? Only one Bitcoin story in the top 3? This fad is fading.

MarketsWiki Statistics Sponsored by Level Trading Field

114,587,523 pages viewed 22,942 pages 210,873 edits

Lead Stories

America’s economic unique selling points are at risk; Entrepreneurship, educational institutions and capital markets all face challenges
Dambisa Moyo – FT
Ask people who remain positive about America’s long-term economic future about the reasons for their optimism and many will point to three unique selling points of the country: entrepreneurial spirit, world-class educational institutions and the depth of its financial capital markets.
/goo.gl/cZorUq

Investors Pledge Cuts to Fossil-Fuel Commitments at Paris Meeting
William Horobin – WSJ
Several global institutions pledged to cut financing of fossil-fuel projects at a summit in Paris, backing French President Emmanuel Macron’s call for the private sector to do more to combat greenhouse-gas emissions after President Donald Trump said the U.S. would withdraw from the Paris climate agreement.
/goo.gl/k3wusV

Bitcoin futures broker to allow negative bets; U-turn by Interactive Brokers could shift trading dynamics for soaring cryptocurrency
Gregory Meyer in New York – FT
The biggest broker for bitcoin futures says it will start to allow customers to bet against the cryptocurrency, in a move that could change the dynamics of the nascent market. Interactive Brokers will by the end of this week give its customers the opportunity to take bearish “short” positions on bitcoin futures, said Thomas Peterffy, its chairman, reversing a decision to only allow bullish, long trades.
/goo.gl/X9KmKk

Survival of the fittest: regtechs face a year of consolidation
Yolanda Bobeldijk – Financial News
When Ancoa, a UK-based market surveillance startup, was snapped up by Swedish software firm Cinnober in May 2017, the deal was widely viewed as a lifeline.
That was not to say that Ancoa did not have a viable product or good people in its team. But Cinnober confirmed that Ancoa was running out of funding fast, and it had little choice but to be acquired. Due to the challenges of selling a regtech product to banks ó the average sale cycle is a lengthy 12 to 24 months ó many regtechs are simply running out of money before they can complete a deal.
jlne.ws/2jBtxnK

A minor change in market trading rules could save taxpayers billions of dollars
P‰r Holmberg – London School of Economics and Political Science
Society could save billions of dollars every day if trading in commodities, energy and securities was made more competitive and efficient through a minor rule change. That is the topic of my new research paper.
/goo.gl/5a81p7

SEC May Soften Stance on U.S. Trading Database, SIFMA Says
Yalman Onaran – Bloomberg
Regulator may allow reporting of proxy client data to CAT; Broker-dealers must start contributing data in November 2018
A group lobbying on behalf of big banks and brokers said it’s hopeful that regulators will soften their stance on how investor data is collected for the Securities and Exchange Commission’s far-reaching new market-surveillance system.
/goo.gl/xRxsTJ

Jim Simons, the Numbers King
D.T. Max – The New Yorker
Algorithms made him a Wall Street billionaire. His new research center helps scientists mine data for the common good.
jlne.ws/2jBW8JF

Russell’s new chief says it’s time to get ‘personal’; Michelle Seitz on her rise to the top and new-found frankness about being a working mother
Attracta Mooney – FT
Michelle Seitz is on a whirlwind visit to London. The recently appointed chief executive of Russell Investments is on a 24-hour trip and is cramming in a meeting with the Financial Times, dinner with clients and making the opening address for the $289bn asset management company’s European investor summit.
/goo.gl/ChTtBF

Opinion: Bitcoin is still a good bet as long as greater fools are buying
Richard Peterson – MarketWatch
Don’t believe the hype ó just ride it as long as possible
In 2011 a friend of mine ó a brilliant college graduate from a top university ó worked on hardware and coding projects for MarketPsych. To save money he lived in his car in Venice Beach, Calif., near our office. He’s a free spirit and a technical genius, and in 2013 he set up cryptocurrency mining software on our spare server space. He accumulated a good deal of coins through his mining. Needless to say, he no longer needs to live in his car.
/goo.gl/peX6Qz

*****Behavioral economist and psychiatrist Richard L. Peterson is the CEO of MarketPsych, a training and sentiment analytics firm.

Crack and Explosion Show Risks of Europe’s Aging Energy Networks
Kelly Gilblom and Jonathan Tirone – Bloomberg
A blast in Austria and a faulty pipe in Britain hobble systems; With temperatures falling, prices spike on supply concerns
Just before 9 a.m. Tuesday, the gray skies over the far eastern reaches of Austria lit up with an explosion at a natural gas switching station, killing one worker, injuring almost two dozen others–and sending shockwaves through Europe’s energy supply infrastructure.
/goo.gl/soh4wu

Overstock chief explores sale to fund blockchain venture; Patrick Byrne plans to help build global property registry using technology
Chloe Cornish in San Francisco – FT
Patrick Byrne, the controversial entrepreneur who runs Overstock.com, is exploring options to sell the online retailer, whose stock has soared amid cryptocurrency mania, and plans to use the money to create a digital global property registry.
/goo.gl/whzmKv

Winklevoss Twins Say Futures Trading Is Just the Beginning Phase for Bitcoin
Lily Katz – Bloomberg
Cameron and Tyler Winklevoss, thought to be among the largest holders of bitcoin, said the advent of futures is just the beginning of a phase of greater acceptance for the cryptocurrency that is often derided as a bubble.
/goo.gl/cta1Hf

The Hottest ICOs Are the Ones That Have Done the Least Amount of Work
Camila Russo and Olga Kharif – Bloomberg
Those without working projects did best in first trading month; Almost two-thirds of coin sales with testable projects slumped
The man known as Bitcoin Baba is, as you might have guessed, a true believer in the power of cryptocurrencies to change the world.
/goo.gl/ZSPJ5n

India Probes Unregulated Bitcoin Exchanges After Valuations Jump
Iain Marlow – Bloomberg
Official declines to give details citing ‘ongoing operations’; Government panel set up to decide stance on cryptocurrency
India’s income tax officials are investigating transactions at various illegal bitcoin exchanges, a week after the country’s central bank cautioned users of the virtual currency about potential risks.
/goo.gl/vLyZ5t

Crypto startup wants to revive the non-dollar petrocurrency idea
Gregory Meyer, Alexandra Scaggs – FT
Back when Bart Chilton was CFTC commissioner, he warned about the market-distorting effects of “massive passive” investors like pensions and exchange-traded funds.
/goo.gl/LUCyN1

Exchanges, OTC and Clearing

Citi, JPM join truePTS for swaps processing
Helen Bartholomew – Reuters
TruePTS, the post-trade processing arm of swap execution facility trueEX, has signed Citigroup and JP Morgan as its first clients. The agreement comes just days after the start-up platform resolved a legal dispute with legacy provider, IHS Markit.
jlne.ws/2jyr7pY

Higher Margins Set for CME’s Soon-to-Launch Bitcoin Futures
Annie Massa – Bloomberg
Initial margin requirement for CME bitcoin futures set at 47%; CME set to follow Cboe in launching contracts this weekend
Margin requirements for CME Group Inc. bitcoin futures will be 47 percent next week when the contracts start trading, an increase from the previous plan.
/goo.gl/Pw8jm5

One of Europe’s biggest derivatives exchanges opened late after experiencing ‘serious issues’
Will Martin – Business Insider
Deutsche Boerse’s trading platforms experience major “issues” on Wednesday morning; Outages force both the Eurex and Xetra platforms to begin trading late; By 8.00 a.m. GMT issues had been dealt with, Deutsche Boerse said.
Two of the trading platforms at Deutsche Boerse opened late on Wednesday morning after experiencing “issues.”
/goo.gl/evSGmG

Qataris to back LSE chairman in activist fight
Samuel Agini – Financial News
One of the London Stock Exchange’s biggest shareholders will vote against an activist hedge fund’s campaign to remove the company’s chairman at a meeting in a week’s time.
jlne.ws/2jCriQN

LSE investors should abstain at meet to oust chairman – advisor PIRC
Reuters Staff
Shareholder advisory group PIRC recommended on Tuesday that LSE shareholders abstain in a vote on a resolution put forward by activist hedge fund TCI to oust chairman Donald Brydon.
/goo.gl/5S7AqP

Singapore bourse clears first Dubai/Kuwait/India Sling LNG futures
Jacqueline Woo – Straits Times
The Singapore Exchange (SGX) has cleared the world’s first futures contract for liquefied natural gas (LNG) delivered to Dubai, Kuwait and India.
/goo.gl/NoCW7P

Cryptocurrency exchanges Coinbase, Bitfinex down
Reuters Staff
Digital currency exchange operators Coinbase and Bitfinex reported problems with service through their websites on Tuesday, frustrating traders seeking to cash in on the latest surge in the value of bitcoin and other cryptocurrencies.
/goo.gl/m31cpv

Fee report “CB169 MM Fee Refund”: Description of extension regarding the Stress Presence Building Block
Eurex
With Eurex circular 107/17, Eurex Deutschland and Eurex Z¸rich (collectively: the Eurex Exchanges) announced the introduction of rebates for the Stress Presence Building Block within Eurex’ Liquidity Provider Framework. The introduction of rebates for liquidity provisioning for the Stress Presence Building Block results in enhancements to the monthly fee report CB169 MM Fee Refund which will become effective in production as of January 2018.
/goo.gl/JrwjZi

VSTOXX derivatives: Delisting of options on VSTOXX Index
Eurex
The Management Board of Eurex Deutschland and the Executive Board of Eurex Z¸rich AG (collectively: the Eurex Exchanges) took the decision to delist options on the VSTOXX Index (OVS) effective 5 February 2018.
/goo.gl/fjaTyP

Pioneering Komodo bond market launches in London
London Stock Exchange
London Stock Exchange today welcomes the listing of the world’s first Indonesian offshore rupiah-denominated bond – a Komodo bond – issued by an Indonesian State Owned Enterprise to its new International Securities Market.
/goo.gl/eW42ww

Fintech

Bantix Adds Bitcoin Trading Analytics Capabilities to QuikStrike
Bantix
Bantix Technologies, the industry leader in futures and options analytics, announced Tuesday that it will expand its trading analysis capabilities in QuikStrike to include cryptocurrencies. The new features will launch on December 17th, 2017 coinciding with the initial listing of bitcoin futures at the CME.
jlne.ws/2jCc8uO

Rival Systems Rolls Out New Options Algorithm Design Functionality
Rival
Rival Systems (Rival), an award-winning provider of trading and risk management software, announced the roll-out this week of new options algorithm design functionality in its Rival Trader platform. The new functionality allows traders to easily design, test and execute options algorithms for futures and equity options with global market data and execution capabilities.
jlne.ws/2C00AoS

Vanguard looks to blockchain for index data
Ross Kerber – Reuters
Vanguard Group Inc is moving to use blockchain to simplify how it updates index data underlying mutual funds, executives said on Monday, an important sign of confidence for the new financial technology.
/goo.gl/qyCJPJ

****Press release here

I Was Wrong About Bitcoin. Here’s Why.
Kevin Roose – NY Times
Several years ago, tech enthusiasts in San Francisco began buzzing about a new and mysterious thing called Bitcoin. There were rumors that the virtual money, invented by a pseudonymous math genius named Satoshi Nakamoto, would revolutionize modern finance and render government-backed currency obsolete. Or maybe it was just a passing fad.
/goo.gl/LA5ivf

Facebook Exec Joins Coinbase Board
Jeff John Roberts – Fortune
Coinbase, a popular site for buying cryptocurrencies, is soaring. In the last week, Coinbase’s app shot to No. 1 in the iTunes store, while a flood of interest from institutional investors briefly caused its trading platform to buckle from unprecedented volume.
/goo.gl/dwvak9

The next bitcoin enterprise in Chicago: Mining the cryptocurrency
Steve Hendershot – Crain’s Chicago Business
Chicago entrepreneur Jimmy Odom, who co-founded local-delivery startup WeDeliver in 2012, is announcing his next startup this week: BitCap, short for Bit Capital Group, which aims to expand access to a cryptocurrency practice called mining. Former Chicago Bear Israel Idonije is a partner and investor.
/goo.gl/hLQUpu

Google launching artificial intelligence research center in China
Reuters Staff
Alphabet Inc’s (GOOGL.O) Google said on Wednesday it is opening an artificial intelligence (AI) research center in China to target the country’s local talent, even as the U.S. search firm’s products remain blocked in the country.
/goo.gl/iem28s

Investec Provides U.K. Fintech With $67 Million for Online Loans
Edward Robinson – Bloomberg
MarketInvoice will originate loans for bank’s business clients; New EU open banking law may be driving fintech deals in U.K.
In a sign that a sweeping new European Union banking law may be spurring banks and fintech startups to tie-up, Investec Plc has formed a pilot program with MarketInvoice Ltd., a British online lender to businesses.
/goo.gl/bGSrmC

Politics

European Parliament Report Accuses Wilbur Ross of Insider Trading
Hannah Levintova – Mother Jones
Senate Democrats recently called for an investigation into Commerce Secretary Wilbur Ross’ finances, following reports that he vastly overvalued his wealth and failed to disclose his holdings in a Russian shipping company partly owned by Vladimir Putin’s son-in-law. Now the embattled mogul, whose long relationship with Donald Trump has been tested by the disclosures, is facing scrutiny by European lawmakers over allegations that he engaged in insider trading related to his 2014 sale of shares in the Bank of Ireland.
/goo.gl/LUiss6

Trump signs into law U.S. government ban on Kaspersky Lab software
Dustin Volz – Reuters
President Donald Trump signed into law on Tuesday legislation that bans the use of Kaspersky Lab within the U.S. government, capping a months-long effort to purge the Moscow-based antivirus firm from federal agencies amid concerns it was vulnerable to Kremlin influence.
/goo.gl/S43QcL

Trump Tweets Consumer Confidence Is at Record High, But It’s Not
Scott Lanman – Bloomberg
President Donald J. Trump tweeted Tuesday that consumer confidence “is at an All-Time High.” In fact, it was higher when a Clinton was in the White House.
/goo.gl/4QkASL

‘Shelby Mafia’ Is Helping Trump Deregulate Wall Street; The Trump administration is picking people with ties to Sen. Richard Shelby (R., Ala.) for key financial roles as it works to roll back postcrisis rules
Andrew Ackerman – WSJ
The Trump administration, in its effort to ease Wall Street rules, has turned to a network of current and former aides to Sen. Richard Shelby (R., Ala.), a group that lobbyists jokingly call the “Shelby mafia.”
/goo.gl/HMJaEn

USA Today bashes Trump as ‘not fit to clean the toilets’ in Obama’s presidential library
Chris Cillizza, CNN Editor-at-large
USA Today isn’t known for its blistering opinion pieces. Which makes the one the paper’s editorial board just published on President Donald Trump all the more savage.
/goo.gl/SNWGpq

Pessimism and Paralysis in the Aftermath of the Financial Crisis
Paul Krugman – NY Times
Unemployment, not so structural after all Credit Federal Reserve Bank of St. Louis
The latest job report was very good, except for one thing: wage growth is still much lower than it was before the financial crisis. And this reminds me of a controversy that raged around four or five years ago, during what now seems like a golden age – an era when it seemed as if facts and reasoned debate might actually matter for policy.
/goo.gl/SJRphu

Roy Moore’s stunning defeat reveals the red line for Trump-style politics
Richard Wolffe – The Guardian
There’s no sugar coating the stunning defeat for Donald Trump and his cronies in Tuesday’s senate contest.
/goo.gl/B5bq8o

‘No shame’: how the Trump administration granted big oil’s wishlist
Oliver Milman in New York – The Guardian
The Trump administration’s zeal for environmental rollbacks has enabled it to fulfill almost all of the top priorities in a “wishlist” drawn up by the American Petroleum Institute (API), the leading lobby group for US oil and gas companies.
/goo.gl/kHDwyz

Regulation

MiFID II’s Biggest Unintended Consequence? The Rise of ‘Super’ Bulge-Bracket Firms
Tim Cave – TABB Forum
Regulators intended for MiFID II to protect investors with a stronger regulatory framework, greater choice through unbundled services, and a more balanced playing field for firms big and small. But a consistent theme running through all of TABB Group’s equities research this year is that the largest sell-side and buy-side firms are likely to emerge as the big winners of MiFID II.
jlne.ws/2jCqICT

SEC chairman: Bitcoin offers ‘substantially less investor protection’ than other markets
Victor Reklaitis – MarketWatch
What does the head of the U.S. securities watchdog think of the cryptocurrencies boom? Securities and Exchange Commission Chairman Jay Clayton is highlighting its risks. He also is telling mom-and-pop investors to be careful with initial coin offerings, or ICOs.
/goo.gl/tQ5cZF

New York Regulator’s Fintech-Charter Lawsuit Dismissed; Lawsuit against Office of the Comptroller of the Currency is premature, judge says
Lalita Clozel – WSJ
A federal judge in Manhattan has dismissed a state regulator’s lawsuit challenging the Office of the Comptroller of the Currency’s federal-fintech-charter effort, finding that legal challenges to the initiative were premature.
/goo.gl/ejJmiK

Regulators on Bitcoin and other digital currencies: Investors beware
Donna Borak – CNN
Bitcoin euphoria is prompting two top U.S. regulators to reiterate warnings about the potential risks of investing in digital currencies
/goo.gl/X6TVgP

Millions of People Post Comments on Federal Regulations. Many Are Fake.; A Wall Street Journal investigation uncovered thousands of fraudulent posts on agencies’ dockets, in hot-button areas such as net neutrality and payday lending
James V. Grimaldi and Paul Overberg – WSJ
A comment posted on the Federal Communications Commission’s public docket endorses a Trump-administration plan to repeal a “net neutrality” policy requiring internet providers to treat all web traffic the same.
/goo.gl/aRrdES

FINRA and Georgetown University’s McDonough School of Business Announce Partnership to Deliver Certified Regulatory and Compliance Professional Program
FINRA
The Financial Industry Regulatory Authority (FINRA) and Georgetown University’s McDonough School of Business today announced a partnership to deliver the FINRA Institute at Georgetown Certified Regulatory and Compliance ProfessionalTM (CRCPTM) Program in Washington, DC.
/goo.gl/B59Ria

The Financial Literacy Gender Gap is NarrowingóHere’s How You Can Help Close It
Michelle Volpe-Kohler – FINRA
Historically, women have fallen behind men in financial literacy, and that has held true across age groups. Financial literacyóhaving the knowledge to make informed financial decisionsóis important because it affects our day-to-day well-being and financial future, including the ability to retire with a sufficient nest egg. But it looks like women are catching up.
/goo.gl/jwVNL6

SEC Appoints New Chairman and Board Members to PCAOB
SEC
The Securities and Exchange Commission today announced the appointment of William D. Duhnke III as Chairman and J. Robert Brown, Kathleen M. Hamm, James G. Kaiser, and Duane M. DesParte as Board members of the Public Company Accounting Oversight Board (PCAOB).
/goo.gl/xFgZhD

SEC Charges Biopharmaceutical Company With Failing to Properly Disclose Perks for Executives; Former CEO and CFO Also Charged
SEC
The Securities and Exchange Commission today charged a biopharmaceutical company with committing a series of accounting controls and disclosure violations, including the failure to properly report as compensation millions of dollars in perks provided to its then-CEO and then-CFO.
/goo.gl/2rmCDx

CFTC’s Technology Advisory Committee to Meet on
CFTC
The Commodity Futures Trading Commission’s (CFTC) Technology Advisory Committee (TAC) will hold a public meeting on January 23, 2018 at CFTC’s Washington, DC, headquarters.
/goo.gl/3XQq5j

Federal Court Orders Kevin Michael Symons of Foot Hill Ranch, California and His Firm, FTS Financial, Inc., to Pay over $5 Million Total for Fraud and Jerry Austin Simmons of Charlotte, North Carolina to Pay $360,000 for Fraud and Failure to Register with the CFTC
CFTC
The Commodity Futures Trading Commission (CFTC) announced that Judge Ronnie Abrams of the U.S. District Court for the Southern District of New York entered a Consent Order against Defendants Kevin Michael Symons of Foothill Ranch, California, and his California company, FTS Financial, Inc. (FTS), and a Consent Order against Jerry Austin Simmons of Charlotte, North Carolina. The Orders find that the Defendants fraudulently promoted Simmons’ “Real Time Trade Room” (the Room), an online futures “trading” forum marketed by the Defendants as a way to observe Simmons as he purported to trade futures contracts “live” and that Simmons solicited clients to open managed futures trading accounts without being registered as required with the CFTC as an Associated Person (AP) of a Commodity Trading Advisor (CTA).
/goo.gl/YhZsjU

CFTC Issues Proposed Exemptive Order to Permit ICE Clear Credit, ICE Clear US, and ICE Clear Europe to Invest Customer Funds in French and German Sovereign Debt
CFTC
The Commodity Futures Trading Commission (CFTC) has approved for publication in the Federal Register a proposed exemptive order that would permit derivatives clearing organizations ICE Clear Credit LLC, ICE Clear US, Inc., and ICE Clear Europe Limited (ICE DCOs) to invest, subject to certain conditions, futures and swap customer funds in French and German sovereign debt. The order would also expand the universe of counterparties and depositories that the ICE DCOs may use in connection with these investments.
/goo.gl/Es4NyN

FCA consults on how firms and individuals will transition to the Senior Managers and Certification Regime
UK FCA
The Financial Conduct Authority (FCA) has today published a package of proposals on how firms and individuals will move to the Senior Managers and Certification Regime. The aim of the new regime is to make individuals more accountable for their conduct and competence.
/goo.gl/Dnv2YG

Investing and Trading

Tired of Pricey FANGs? Try Shenzhen; For those willing to stomach a little political risk, a shift into Shenzhen now might prove rewarding
Nathaniel Taplin – WSJ
Fund managers love to moan about how pricey U.S. equities are, particularly the pointy-toothed FANGs (Facebook, Amazon, Netflix and Google) that have led this year’s bull market.
/goo.gl/ityNtk

Why Own Just One? Crypto Index Opens Up World Beyond Bitcoin
Crystal Kim – Barron’s
The first bitcoin futures-based exchange-traded fund may not see the light of day until next year, but there are other options.
San Francisco-based Bitwise Asset Management launched a cryptocurrency index fund on Tuesday. The private index fund holds the top 10 largest cryptos determined by inflation-adjusted market capitalization. Coins that make the cut — bitcoin, ethereum, bitcoin cash, litecoin, ripple, dash, monero, zcash, ethereum classic and neo — are weighted according to that market-cap.
jlne.ws/2jz0vVL

Hey Google, Am I Diversified? Why Fidelity Fears Silicon Valley; Consumers are ready to trust tech giants with financial services, but regulatory hurdles might get in the way
Sabrina Willmer and Nishant Kumar – Bloomberg
“Alexa…will I meet my retirement goal?” “You are not on track to meet your retirement goal,” replies Amazon.com Inc.’s voice-activated digital assistant, with not a bit of sugar-coating. Then she suggests turning over $76 a month to Fidelity Investments and its advisers.
/goo.gl/Lpc9jj

Bitcoin euphoria puts other retail bets in shade
Ankur Banerjee, Sweta Singh – Reuters
If you wondered why 18-year old twitterati and seasoned speculative traders alike have bet on bitcoin’s surge toward $20,000 this week, look no further than the comparison with the past year’s new stock exchange floatations.
/goo.gl/j3tGMR

Bitcoin Arbitrage and Tax Math; Also machine learning, ambiguity and unicorn options.
Matt Levine – Bloomberg
So, bitcoin. We talked yesterday about the launch of bitcoin futures at Cboe Global Markets Inc., and about the fact that a January bitcoin future was going for about $1,000 more than a bitcoin today. “When regular trading hours start today,” I said, “you might expect more professionals to come in and arbitrage away some of the price differences,” but nah: As of 8:15 this morning, the futures were still more than $1,000 above the spot price. You could borrow $16,889, buy one bitcoin, sell a future for $18,000 on Cboe, wait a month, sell the bitcoin and deliver the cash to settle the future. The extra $1,111 — minus your cost of borrowing — would be risk-free profit. Everyone finds it a little odd:
/goo.gl/acJSCG

Opinion: Why it matters if bitcoin is a currency or a commodity
George Friedman – MarketWatch
Until there’s consensus on this crypto-asset, there will be problems
Bitcoin has transformed from an idea that some treated with great enthusiasm to an asset of strikingly growing value.
/goo.gl/mjA18u

Bitcoin bubble? Roughly 90% of the top 100 digital currencies are in rally mode
Mark DeCambre – MarketWatch
Tuesday marked a notable day for digital-currency trade, which saw cryptocurrencies on an astounding tear, driven at least partially by what appears to be an avalanche of speculative interest in anything remotely linked to virtual assets.
/goo.gl/FYyvNm

The psychology behind bitcoin: How to spot a bubble
Raj Persaud – City AM
At the time of writing, the price of bitcoin is almost $17,000. In April, it was $1,000, which means that if you had bought then, you would have made more than seventeen times your investment.
/goo.gl/Y8Tt7j

Institutions

Hedge Funds Flock to Broker That Embraced Bitcoin Futures Early
Sonali Basak – Bloomberg
ED&F Man signed up at least 35 investors, many new to bitcoin; Smaller firm wins business as large banks cool toward futures
A London-based brokerage is going where many large banks fear to tread — and it’s paying off.
/goo.gl/pyKEdG

John Burbank’s Passport Hedge Fund Hopes for New Savior in Bitcoin; Fund plans to launch a new arm that focuses only on cryptocurrencies
Rob Copeland and Peter Rudegeair – WSJ
John Burbank made millions spotting a bubble in subprime mortgages before the financial crisis. Now he is circling his next big score: cryptocurrencies.
/goo.gl/AZd9BB

AQR to explore use of ‘big data’ despite past doubts; Hedge fund runs experiments to see if it can find profitable patterns using machine learning
Robin Wigglesworth in New York – FT
The $208bn hedge fund group led by Clifford Asness has begun to explore how “big data” such as satellite imaging can help it manage money, a departure for a company that has been sceptical of the field.
/goo.gl/492Psp

UBS Ex-Strategist Felt Like ‘Damaged Goods,’ Psychiatrist Says
Erik Larson – Bloomberg
Firing can be ‘trigger’ for depression, witness testifies; Murray says he was fired for blowing whistle on CMBS traders
A former UBS Group AG senior strategist for commercial mortgage-backed securities developed suicidal thoughts and felt like a “pariah” in the industry after his 2012 firing and later lawsuit against the Swiss bank, a psychiatrist told a jury.
/goo.gl/waos7J

The Big Bank Bonuses Aren’t in Europe
Stefania Spezzati and Donal Griffin – Bloomberg
Fixed income likely to see 10% drops — and some ‘doughnuts’; M&A bankers are some of the few likely to see awards rise
For European investment banks pining for the return of outsized bonuses, 2017 promised so much yet delivered so little.
/goo.gl/S1gfXZ

AQR rates and FX trading head joins OpenDoor; Hicham Hajhamou will oversee the treasury inflation protected securities business at OpenDoor.
Hayley McDowell – The Trade
The former head of rates and FX trading at hedge fund AQR Capital Management has departed to join all-to-all fixed income trading firm OpenDoor Securities.
/goo.gl/mF9tii

JP Morgan and Citi back start-up AI post-trade platform; Two of the biggest swaps dealers have signed up to the AI post-trade platform operated by trueEX.
Joe Parsons – The Trade
JP Morgan and Citi have become the first users of truePTS, a derivatives processing platform which uses robotics and artificial intelligence (AI) to automate back-office functions.
/goo.gl/cHzi5e

GAIN Capital Launches AI-Enhanced Trading App, GetGo; New mobile app gives users access to financial market trading via smart signals and easy-to-use interface
PR NEWSWIRE
GAIN Capital Holdings, Inc. (NYSE: GCAP), a global provider of online trading services, today launched GetGo, an innovative financial trading app. The new mobile-only service uses a smart AI-enhanced algorithm to spot statistical trends in financial markets and provide users with compelling trading signals based on historical data.
/goo.gl/Zr3vTZ

Regions

Macron’s Climate Summit Draws Pledges to Make Coal a Risky Bet
Jess Shankleman, Francois De Beaupuy and Gregory Viscusi – Bloomberg
AXA, World Bank and Storebrand join in divesting fossil fuels; Paris summit seeks to galvanize action on greenhouse gases
Some of the world’s biggest investors turned their backs on U.S. President Donald Trump’s plan to revive the coal industry, pledging to divest from fossil fuels at a conference organized by French President Emmanuel Macron.
/goo.gl/uCN4VB

Gas prices rise in freezing Europe after explosion and pipeline closure
CNN
Energy markets were shocked Tuesday by the closure of a pipeline in the North Sea and a major explosion at a facility in Austria that helps move natural gas from Russia.
/goo.gl/da6nTr

Bitcoin Battle: South Korea Eyes Taxing Cryptocurrency Trade; Emergency meeting held as fears mount about bitcoin addiction and widespread speculation
Eun-Young Jeong and Steven Russolillo – WSJ
South Korea’s government is pushing ahead with new rules to curtail the widespread speculation on cryptocurrencies that has swept the Asian nation this year, following an emergency meeting of officials and regulators Wednesday.
/goo.gl/Tor1A5

South Korea Considers Steps to Rein in the Bitcoin Frenzy
David Meyer – Fortune
South Korea will move to rein in the frenzy around bitcoin by banning minors from opening accounts on exchanges, and possibly by taxing capital gains from the trading of cryptocurrencies.
/goo.gl/8SwTqs

‘Speculative Mania.’ Bitcoin Is More Likely to Appeal to Criminals Than Consumers, RBA Governor Says; We’re in the midst of bitcoin mania Roslan RahmanóAFP/Getty Images
Bloomberg
Australia’s central bank chief added his voice to growing criticism of Bitcoin, saying the cryptocurrency that’s soared above $17,000 is more likely to appeal to criminals than consumers.
/goo.gl/wZSgpb

U.S., Japan Express Concern Over China’s Interest in Saudi Oil Giant; Officials urge international offering for Aramco, rather than selling a stake to Beijing, which they fear would boost its standing in Middle East
Sarah McFarlane, Summer Said and Mayumi Negishi – WSJ
The U.S. and Japan have urged Saudi Arabia to pursue an international listing for oil giant Aramco, fearing the possible sale of a stake to China would give Beijing too much sway in the Middle East, people familiar with the matter said.
/goo.gl/hg5rex

OPEC Wakes Up to the Threat of U.S. Shale 2.0
Grant Smith – Bloomberg
Stronger U.S. output is blunting OPEC’s effort to clear glut; Once expected in third quarter 2018, reblancing now seen later
OPEC predicted that global oil markets won’t rebalance until late next year after boosting forecasts for supplies from the U.S. and other rivals.
/goo.gl/SYT1P9

Bitcoin Is History’s Biggest Bubble, Turkey’s Simsek Says
Cagan Koc – Bloomberg
Speculation on Bitcoin has turned the cryptocurrency into “the biggest bubble in finance history,” Turkey’s Deputy Prime Minister Mehmet Simsek said in comments on Twitter on Wednesday.
/goo.gl/Z1vxBz

Australian central bank mulls electronic banknotes; RBA studies blockchain technology but dismisses bitcoin fever as ‘speculative mania’
Emma Dunkley and Alice Woodhouse in Hong Kong – FT
Australia’s central bank is exploring creating electronic banknotes using the technology underpinning bitcoin, as major central banks around the world race to bring cash into the digital age.
/goo.gl/TMg1zp

Alwaleed’s investment kingdom reels without its prince; Value of billionaire Saudi’s company has slumped since his detention in graft purge
Simeon Kerr in Dubai – FT
When Citigroup was battling to survive the financial crisis, Prince Alwaleed bin Talal was quick to come to the aid of the US bank. As its shares tumbled, the Saudi billionaire publicly backed Vikram Pandit, Citi’s then-chief executive, and raised his stake in the group from 4 per cent to about 5 per cent. His intervention helped cement his reputation as the “Warren Buffett of Arabia”.
/goo.gl/xa5ZcM

Banks warned over North Korea’s complex finance web; Report highlights Pyongyang’s use of foreign banks to sidestep payment sanctions
Don Weinland in Hong Kong – FT
A new report from research groups in Washington and Seoul has highlighted the sophisticated ways that North Korea’s international finance network uses foreign banks to sidestep sanctions targeting the reclusive regime.
/goo.gl/CJDSEH

Brexit

EU Offers U.K. Carrot, Warning Over Breaking Brexit Promises
Ian Wishart – Bloomberg
EU to remain cautious and vigilant over pledges, Barnier says; Brexit Secretary Davis says deal will be put into legal text
The European Union warned the U.K. against rowing back on the agreements it made last week as leaders prepare to hand Britain its first reward in the Brexit negotiations.
/goo.gl/ZSzwoV

Brussels rules out early Brexit trade talks; Diplomats say EU irritated by Davis comment that divorce deal is only statement of intent
Jim Brunsden and Mehreen Khan in Brussels – FT
EU countries have toughened their stance on Brexit, making clear that talks on a future EU-UK relationship will not begin until March and insisting Britain will stay fully covered by EU rules during a transition ó while losing its voice within regulatory agencies ó after it leaves the bloc in 2019.
/goo.gl/aJ4kuS

EU parliament backs outline Brexit deal
Reuters Staff
The European Parliament urged EU leaders on Wednesday to allow the next phase of EU negotiations to start, backing a motion that recognized the talks had made sufficient progress as a well a line criticizing Britain’s Brexit negotiator David Davis.
/goo.gl/8BcPWQ

Brexit Refugees Heading to Amsterdam Raise Local Housing Concern
Ellen Proper – Bloomberg
Dutch capital has only about 3,000 houses for sale or rent; EMA people expected to spread across greater Amsterdam area
If Brexit refugees moving to Amsterdam from London have their sights set on owning one of the city’s famed canal-facing houses, they’re in for a disappointment.
/goo.gl/di8qh6

Tech groups accused of failing to protect online users from abuse; UK ethics watchdog wants laws to force Facebook, Google and Twitter to police content
Doreen Wainainah and Aliya Ram in London – FT
The UK ethics watchdog has accused Facebook, Google and Twitter of failing to properly protect online users from abuse, in a highly critical report that will heap pressure on technology companies to police the content on their websites more closely.
/goo.gl/JHfrrS

Miscellaneous

Bitcoin Started With All Men. Now Crypto Is Opening Up to Women
Bloomberg
Something new is happening in the world of cryptocurrencies. The roughly $460 billion digital currency world, spawned eight years ago from the almost exclusively male domain of bitcoin, is starting to open to women. Four out of 30 of the largest initial coin offerings this year through October had female co-founders, and two of their ICOs were among the largest so far.
/goo.gl/f5aVcF

How to Design Your Own Luck: Traits that Attract Success with Alec Litowitz
TV.Ivy.com
Alec Litowitz is the renowned Founder & CEO of Magnetar Capital, a leading alternative asset management firm with more than $14 billion under management. In this episode, Litowitz offers us unfiltered knowledge and perspective on growing a successful business, and which traits are most useful in attracting success.
/goo.gl/BVRLm3

The post America’s economic selling points at risk; Investors’ fossil-fuel cut commitments; Bitcoin futures broking appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

We are rolling out the first of the videos from the MarketsWiki Education recruiting event held the Monday of EXPO week in Chicago. The first video features Cboe’s Ed Tilly.~JJL

Recall the “broker fee wars” earlier in the year? Fidelity, TD, Schwab and a whole bunch of others started slashing commissions and fees, bringing much of the $7 per equity trade shops down to $5 a trade and some of the discount brokers even lower. Then there’s tastyworks’ $1 to open/free to close options trading setup. Well, unicorn-valued trading app Robinhood just fired another salvo, announcing free options trading yesterday. As of this writing, more than 250k people have signed up for early access. The democratization of trading continues! Ready for the uptick of one contract trades by millennials?~SD

More than 2,000 University of Michigan students have used the TT platform to develop strategies, manage orders and experience real-world trading through #TTCConnect.~JJL

Asia Pacific Financial News from John Lothian News – December 13, 2017.~JJL

The FCC is due to vote today on rolling back net neutrality regulations. This despite 18 attorneys general asking them to delay the vote. The FCC received over 2 million public comments wanting to repeal net neutrality, but it turned out most were bogus and included many dead people. Polling shows that 83 percent of Americans oppose this rollback (including 3 out of 4 Republicans, so it is a rare bipartisan issue these days). Even with that support in mind the FCC is apparently emboldened in its effort to end net neutrality. It is still worthwhile to call your representatives and let them know how you feel about this. ~JB

Crypto Fact of the Day: Each bitcoin (BTC) is divisible to the 8th decimal place, so each BTC can be split into 100,000,000 units. Each unit of bitcoin, or 0.00000001 bitcoin, is called a satoshi. A satoshi is the smallest unit of Bitcoin.~JJL

The @JohnLothian Twitter account had 45,098 original impressions yesterday with 132 Tweets. During the 28 days, the accounts averaged 33.8K impressions per day.~JJL

HKEX’s annual RMB FIC Conference is set for 12 June 2018 at the Grand Hyatt #HK. They are now inviting sponsors to support the event. Here are the packages.~JJL

I am working on a story on the impact of bitcoin on the metals markets (deadline next week). If anyone would like to share their opinion with me on this, or has a knowledgeable source to recommend, please feel free to contact me at sarahrudolph@johnlothian.com. Thank you!~SR

Yesterday’s JLN Options newsletter featured lead stories about OCC’s tech upgrade, the launch of free options trading on Robinhood and VIX options plays by “50 Cent.”~SD

++++

Ed Tilly – Staying Ahead of the Technology Curve
MarketsWikiEducation.com

In this video from MarketsWiki Education’s Intern Recruiting Event event in Chicago, Ed Tilly, chairman and CEO of Cboe Global Markets, discusses how changes in technology force you to adapt to stay ahead of the curve. Tilly breaks down what’s going on in the exchange space and how the Cboe has changed over the years. With the explosion of screen trading and the end of open outcry trading, exchanges have had to roll with the punches and make sure customers are happy. Tilly’s goal is to bring transparency and liquidity to the marketplace.

Watch the video here »

++++

Illinois Drives People Away; The taxpayer migration continues from the Land of Ever Higher Taxes.
The Editorial Board – WSJ
If Republicans succeed in limiting the state-and-local tax deduction, one hope is that this could finally inspire a come-to-Jesus moment in prodigal high-tax states. Democrats in Illinois ought to be especially chastened by new IRS data showing an acceleration of out-migration.
/goo.gl/wob6Uj

***** I am still here.~JJL
*** I’m not leaving. Probably ever.~SD

++++

Rice Dairy LLC Announces Formation of Advisory Board
Rice Dairy LLC
Rice Dairy LLC, a dairy commodities brokerage firm, is announcing the formation of its Advisory Board, which brings together top financial industry leaders to help guide the future direction of the company. The Board includes Jim Oliff, Fritz Hirsch, and Andrew Friedman, all leaders who have made a significant impact in their respective companies and industries.
/goo.gl/9QU6HD

***** Jim Oliff is among the new advisors to Rice Dairy. When they took the group picture, did they say, “Everyone say cheese?”

++++

Cameron Decries Trump’s Attacks on the Media
Franz Wild – Bloomberg
Cameron says Trump is diverting attention from real abuses; Former official was giving speech to anti-corruption group
Former British Prime Minister David Cameron joined the chorus criticizing U.S. President Donald Trump for his tirades against journalists.
/goo.gl/XHEHCF

***** Free markets need a free and independent press.~JJL

++++

US surrounds new London embassy with a moat; Heavily defended yet delicate glass box is city’s first new moated building since medieval era
Edwin Heathcote in London – FT
It is central London’s first new moated building since the medieval era. The new US embassy in Nine Elms is a paradox, a heavily defended delicate glass box. Its architect calls it a “crystalline radiant beacon”; in fact, it resembles a corporate cube.
/goo.gl/Wd3W2C

**** Is there a vat of ready-to-boil tar for the defenders? Not many embrasures I see for the firing of arrows… Also of note – the $1 billion price was not paid for with taxpayer dollars, but rather funded by real estate sales to a Qatari company. The former embassy is being turned into a 5-star hotel.~SD

++++

Wednesday’s Top Three
Three stories tied for second place yesterday. One of those stories was actually NOT about bitcoin. Go figure. The top story was Hooray for Bitcoin (but Don’t Buy It). The three way tie was between Bloomberg’s Higher Margins Set for CME’s Soon-to-Launch Bitcoin Futures, NY Times’ I Was Wrong About Bitcoin. Here’s Why. and the profile from Trading Technologies, Breaking Through: Linda Raschke, Part 1.

MarketsWiki Statistics Sponsored by Level Trading Field

114,697,669 pages viewed 22,942 pages 210,877 edits

Lead Stories

Bitcoin Points Way to ‘Massive Change’ for Commodity Businesses
Luzi-Ann Javier – Bloomberg
Blockchain ledgers can cut trading costs, minimize fraud risk; Promise of more security, fewer documents draws BP, Tyson, UBS
Blockchain is upending the world’s financial markets with the rise of bitcoin, and now the digital-ledger system is poised to do the same next year for raw materials like food and energy.
/goo.gl/CVvLTK

Chicago trading chief predicts more stock exchange mergers; Executive who helped lead the year’s landmark exchange deal says there is more to come
Samuel Agini – Financial News
The chairman and chief executive of Cboe Global Markets, which expanded this year by acquiring one of the world’s biggest equities exchanges, has predicted more landmark deals ahead.
/goo.gl/XZMiSn

All Chinese Oil Traders Want for Christmas Is a Futures Contract
Bloomberg News
Speculation growing that domestic contract will be listed soon; Chinese commodities trading has slowed this year, data shows
Unlike Mariah Carey, all Yuan Quwei wants for Christmas is to trade oil futures on a Chinese exchange. She’s among the mass of speculators that have pumped trillions of yuan into the country’s fledgling commodities bourses, trading in everything from eggs to iron ore futures with extraordinary intensity. She’s now waiting for the launch of China’s long-delayed domestic crude contracts, and hoping it’ll be in time for Christmas.
/goo.gl/bJqFMT

The final countdown: MiFID II is coming, ready or not
Tony Freeman – City AM
With just three weeks to go before the implementation of the Markets in Financial Instruments Directive II (MiFID II), how close is the industry to being ready for the biggest change in financial markets infrastructure for decades?
/goo.gl/t1sgz1

Fed raises interest rates, keeps 2018 policy outlook unchanged
Howard Schneider, Lindsay Dunsmuir – Reuters
The Federal Reserve raised interest rates on Wednesday but left its rate outlook for the coming years unchanged even as policymakers projected a short-term jump in U.S. economic growth from the Trump administration’s proposed tax cuts.
/goo.gl/WTM4rX

Who’s Looking to Cash In on the Bitcoin Boom Now? The Taxman; Emergency meeting held as fears mount about bitcoin addiction and widespread speculation
Eun-Young Jeong and Steven Russolillo – WSJ
South Korea’s government is pushing ahead with new rules to curtail the widespread speculation on cryptocurrencies that has swept the Asian nation this year, following an emergency meeting of officials and regulators Wednesday.
/goo.gl/LneQu1

What Next? Regulation, Technology and Innovation In the Trade Lifecycle
NEX
The financial crisis, as we all know, highlighted extensive life cycle shortcomings, particularly in derivatives, which has led to revolution in our rule books. In NEX’s latest white paper (attached), we look at the impact of regulation across the complete trade life cycle and how we need to innovate and embrace the technology to stay ahead of the game.
/goo.gl/Df6SRq

EU clears deal on U.S. stock exchanges removing major MiFID II hurdle
Francesco Guarascio – Reuters
The European Commission adopted decisions on Wednesday to allow European investors to continue trading in shares listed in several stock exchanges in the United States, Australia and Hong Kong after new EU market rules come into force in January.
/goo.gl/ZkihTZ

Banks lobby for reprieve on key part of Mifid II rules; Investors could be shut out of deals because they will not have trade identifiers
Philip Stafford, Laura Noonan and Hannah Murphy – FT
Banks are pushing for an eleventh-hour reprieve for a key part of new European markets rules because about a fifth of their clients do not have the vital tag they will need to continue trading.
/goo.gl/CNxeuo

Initial Coin Offerings Surge Past $4 Billionóand Regulators Are Worried; Some regulators say ICOs should be regulated like securities
Steven Russolillo – WSJ
Money raised from initial coin offerings has surged past $4 billion for the first time, even as regulators world-wide have escalated warnings about the new form of corporate funding.
/goo.gl/t4Nkww

US Treasury Market 2018 – A New Ecosystem to Navigate
Colby Jenkins – TABB Forum
For the majority of institutional investors, the Request-for-Quote process is still central to their understanding of the US Treasury market structure and best-ex practices. In fact, for many, RFQ not only is the easiest form of satisfying best-ex requirements, it’s the only method on which they rely. Market innovation, however, is beginning to change this paradigm. A renewed focus on trade data has given firms the ability to explore new execution methodologies and strategies, reports TABB’s Colby Jenkins.
jlne.ws/2o2zU4W

Libor’s Rise Matters for Trillions of Debt
Liz McCormick – Bloomberg
Scandal-plagued benchmark rises to an almost decade-high; Goldman sees tax reform growth-effect requiring more Fed hikes
While the rest of the bond market takes the Federal Reserve’s latest interest-rate increase in stride, Libor is surging. And that still matters.
/goo.gl/z2XVd2

Bringing Back the Money-Fund Buck?; Fight brews over whether to reverse crisis-era rules meant to prevent another run on money funds
Andrew Ackerman – WSJ
A fight is brewing over whether to reverse rules meant to prevent another crisis-triggered exodus from a corner of the mutual-fund industry, the latest front in a broad push to undo postcrisis regulations.
/goo.gl/Jy1b3J

Making Sense of the Chaos ETFs Have Created; Where do you start? The same way as when you’re in a store: One aisle at a time.
Joel Weber and Eric Balchunas – Bloomberg
Right now there are about 2,100 ETFsó2,087 if you want to get specific about it. That’s a lot of stuff to choose from. How should you approach navigating a store with this much selection? One aisle at a time.
/goo.gl/r8PQuh

This Market Says Maybe America Isn’t So Great Again Yet
Scott Lanman and Daniel Moss – Bloomberg
America’s GDP is growing at an amazing 3 percent! Unemployment is at the lowest level in 16 years! The stock market is reaching a new record high every day! The U.S. economy is just going to keep on booming, right? Well, not so fast. The stock market might be surging, but the bond market is painting a more nuanced picture. David Ader, chief macro strategist at Informa Financial Intelligence, joins Dan and Scott for a tutorial on Treasuries.
/goo.gl/NiDAhh

It’s As If the Craziest Week in European Gas Never Happened
Lars Paulsson, Anna Shiryaevskaya and Mathew Carr – Bloomberg
It’s like the craziest week in European gas markets for as long as anyone can remember never happened.
/goo.gl/4T7g8P

The Wall Street legend who helped blow up the world explains why his ‘Frankenstein’ creation went so wrong
Alex Morrell – Business Insider
Lewis Ranieri is considered the father of the mortgage-backed security; His invention enabled millions of Americans to afford homes, but its distortion and manipulation also helped cause the financial crisis; He told Institutional Investor he never imagined ratings agencies and regulators would fail so badly, but also accepted part of the blame; “It’s absolutely true that many of us tried to stop it. But the fact is, it didn’t stop,” Ranieri said. “We, the creators, should never forget.”
In the early 2000s, Lewis Ranieri was named one of the most influential Americans of the past century, before transforming a few short years later into one of the Americans who blew up the world.
/goo.gl/pqS6Jk

QuantConnect platform jostles in crowded field of DIY quants; New Zealand founder is unbowed by the scepticism over freelance coders ability to beat markets
Robin Wigglesworth – FT
Jared Broad was a teenager when he learnt a painful, but valuable, lesson: humans are imperfect traders, and emotionless machines are the future of financial markets.
/goo.gl/xwZWdF