First Read

Hits & Takes
By JLN Staff

We recently learned of some sad news: Joe Levin, a longtime Cboe vice president, passed away on July 29, 2018 at the age of 71. Before leaving the Cboe in June 2014, he served as the company’s vice president of research and product development. Among his many contributions to the exchange, Levin was instrumental in laying the groundwork for Cboe’s volatility products, including futures and options on the VIX index.
Memorial contributions may be made to Progressive Supranuclear Palsy (www.psp.org).~SR

CFTC Commissioner Chris Giancarlo played banjo on Mike Marlin’s album “Grand Reveal” – album credits here. This audience is more likely to know Mike Marlin from his previous life as one of the founders of systematic trading firm AHL.~SD

Dr. Richard Jarecki, the brother of Dr. Henry Jarecki, passed away on July 25. He was known for having developed a technique for beating roulette machines.~JLN

The New York Post has a story about Hetty Green called “Why Wall Street’s ‘witch’ was actually a woman to be admired.” The story is about a museum exhibit in New York City, “Rebel Women: Defying Victorianism” at the Museum of the City of New York through Jan. 6. I’ll have to make a trip. ~SR

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MWE World of Opportunity – How is Bitcoin Like a Motorboat?

JohnLothianNews.com
“When the government seizes a boat or a house or a car, they auction it off. When the government seizes illegal narcotics – cocaine, heroin you name it – they don’t auction it off to the American people. So, to me, when they seized bitcoin and auctioned it off to the American people, I thought ‘This is legal, this is going to be OK and I need to pay a lot more attention to this.'”

In this video from MarketsWiki Education’s New York event, Jeff Bandman paints a holistic view of the digital asset regulatory landscape, from money laundering to retail investor protection to the lack of a shared vocabulary to describe the instruments in question.

Watch the video here »

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Billionaire Trader Seeks $80 Million for David Hockney Painting
Bloomberg
David Hockney, the 81-year-old British painter of saturated landscapes and portraits, could become the most expensive living artist at auction this year.
Hockney’s “Portrait of an Artist (Pool with Two Figures)” is being offered for sale to auction houses by billionaire Joe Lewis, who’s seeking at least $80 million for the work, according to people with direct knowledge of the matter. The current highest price for a living artist is $58.4 million for Jeff Koons’s orange balloon dog.
/jlne.ws/2vrbRO8

****Soccer fans know Lewis for his ownership role at Tottenham, boating fans know him as the owner of the nearly 100 meter long superyacht Aviva, and Christie’s sees him as a big fat commission.~SD

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The Battery Pioneer Who, at Age 96, Keeps Going and Going
WSJ
In the race to make the next leap in battery technology, there is a 96-year-old who won’t give up.
Four decades ago, John Goodenough helped invent the battery that is used to recharge cellphones, iPads and many other of today’s electronic goods. His work made batteries more powerful and portable by introducing lithium cobalt oxide to their inner workings.
/jlne.ws/2MswboO

****Most people at half his age would be happy to be doing half as much.~JB

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Richard Jarecki, Doctor Who Conquered Roulette, Dies at 86
Daniel E. Slotnik – NY Times
Many gamblers see roulette as a game of pure chance — a wheel is spun, a ball is released and winners and losers are determined by luck. Richard Jarecki refused to believe it was that simple.
/goo.gl/BWJ8rS

****Jarecki was also a precious metals trader and governor of Comex.~SD

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And now professional golf is being ransomed for bitcoin
Jack Morse – Mashable
Raise that single gloved-hand to your mouth in shock: The hackers have gone after golf.
America’s last bastion of proud visor-wearers is scrambling this week, after unknown criminals took over the PGA of America’s servers on Tuesday — locking the golf association out of its files just days before the official Aug. 9 start of the PGA Championship in Missouri. And you better believe those hackers want bitcoin.
/goo.gl/MJduYW

****Ransomware stinks.~JB

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Wednesday’s Top Three
It must be summer time. Our top read stories on Wednesday were led by Forbes’ 6 Books That Will Teach You About The Real Wall Street. Second was another top read from Tuesday, the New York Post’s Inside the bitter divorce war between billionaire exes. Third was the FT’s ‘Skin in the game’ is vital, says Gerald Beeson of Citadel

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MarketsWiki Stats
130,856,513 pages viewed; 23,234 pages; 214,507 edits
MarketsWiki Statistics

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Lead Stories

Trump administration cuts staff at financial markets watchdog: source
Pete Schroeder – Reuters
The Trump administration moved on Wednesday to shrink a government agency tasked with identifying looming financial risks, notifying around 40 staff members they would be laid off, according to a person familiar with the changes. The employees at the Office of Financial Research (OFR) were formally told on Wednesday they will lose their jobs as part of a broader reorganization of the agency that was created in the wake of the 2007-2009 global financial crisis, the source said.
/jlne.ws/2vRDS0B

City watchdog adds staff ahead of Brexit
Lucy McNulty – Financial News London
The UK’s Financial Conduct Authority is recruiting to fill senior Brexit-related roles, offering insight into its priorities as finance firms on both sides of the Channel begin to prepare contingency plans for a chaotic exit.
/jlne.ws/2AUs4jY

US regulators warned against reducing bank capital requirements; Systemic Risk Council says proposals should be modified to protect financial resilience
Robert Armstrong – Financial Times
A group of former government officials, executives and financial experts has warned US regulators against softening a crucial leverage metric for banks. In a letter made public by the Systemic Risk Council on Wednesday, it warned that proposals from the Federal Reserve Board and the Office of the Comptroller of the Currency about capital ratios, if enacted, would cause “the equity in US banks?.?.?.?to fall materially” and should be modified or replaced to protect the resilience of the financial system.
/goo.gl/bzQHej

CFTC Proposes Rules To Simplify Process For Foreign Clearing Organizations To Obtain DCO Registration Exemption
Mondovisione
The U.S. Commodity Futures Trading Commission (CFTC) today voted unanimously to approve a proposal to codify policies and procedures for clearing organizations located outside of the U.S. to obtain an exemption from registration as a derivatives clearing organization (DCO). The proposal will also reduce CFTC staff time and utilize fewer resources to grant exemptions.
/jlne.ws/2vvHhD5

****Giancarlo’s statement here.

The World’s Dominant Crypto-Mining Company Wants to Own AI
Max Chafkin and David Ramli – Bloomberg
In a rare interview, Bitmain’s Jihan Wu talks about his plans to take on Nvidia, Intel, and AMD.
Even by the standards of Bitcoin, things are crazy in China. As the boom in cryptocurrencies has become the biggest speculative bubble in recorded history, a single company in Beijing’s Haidian District has been selling the chips that generate as much as 80 percent of the world’s cryptocoins. “We feel lucky,” says Jihan Wu, the co-chief executive of Bitmain Technologies Ltd., which was more or less unknown two years ago and, according to Wu, booked revenue of $3.5 billion in 2017.
/goo.gl/UEcxQP

Bill Gross’s Bond Fund Assets Fall to Lowest Since November 2014
John Gittelsohn – Bloomberg
Investors pulled money from Bill Gross’s bond fund for the fifth consecutive month in July, reducing assets to the lowest since November 2014, less than two months after he took over the go-anywhere pool.
/jlne.ws/2vu7NfV

Thomson Reuters on offense as Blackstone deal nears
Matt Scuffham – Reuters
Thomson Reuters Corp said it was thinking about acquisition opportunities after reporting quarterly earnings that were ahead of expectations on Wednesday and reaffirming its 2018 forecast.
/jlne.ws/2vtUfB6

****Press release of Thomson Reuters’ Q2 results here

Wall Street doubts recent pledge of top Fed officials that central bank can keep balance-sheet reduction plan
Greg Robb – MarketWatch
Even though the New York Federal Reserve’s top markets official recently insisted the central bank’s campaign to shrink its $4.2 trillion balance sheet is running smoothly and will continue, Wall Street is abuzz with talk that it will end sooner rather than later.
/jlne.ws/2OVeKif

These Three Women Made It to Chief Economist at Big Banks. Here’s How They Got There
Lucy Meakin and Jeanna Smialek – Bloomberg
While women may be taking on prominent roles from Wall Street to the City of London, gender equality is still a long way off.
/jlne.ws/2OP1GLk

States Spar with Trump Administration Over Fintech Oversight
Yuka Hayashi – WSJ
The Trump administration’s plan to expand the federal government’s role in overseeing financial-technology startups has prompted pushback from some states, setting up a fight over who will regulate new markets for online lending and other banking products.
/jlne.ws/2vu42an

Global Participants are Flocking to U.S. Ag Markets
Tim Andriesen – CME OpenMarkets
If you haven’t seen a compelling investment story in agricultural markets in a few years, that may be about to change. Several fundamental and macroeconomic factors are converging to create a busier than normal summer season for ag markets.
/jlne.ws/2vtD2I0

Exchanges, OTC and Clearing

Do Stock Exchanges Deserve Absolute Immunity?
Themis Trading Blog
Earlier this year, the SEC swore in two new Commissioners, Hester Peirce and Robert Jackson. While we have seen a few comments recently from Commissioner Peirce (she wanted to approve the bitcoin ETF and thought the Reg ATS amendments were a bit verbose), we haven’t seen much from Commissioner Jackson. But the folks at Markets Media were able to track him down this week and get his comments on some important issues related to exchanges.
/jlne.ws/2vuTCaN

****Full Markets Media piece here.

Hong Kong stock exchange operator posts record first-half earnings, as blockbuster IPOs help it reclaim No 1 fundraising ranking
Enoch Yiu – South China Morning Post
Bourse operator Hong Kong Exchanges and Clearing reported on Wednesday a 44 per cent increase in interim earnings, boosted by a raft of initial public offerings that helped it regain the top spot in global fundraising rankings.
/jlne.ws/2OOqmDT

CME Group Declares Quarterly Dividend
CME
CME Group Inc., the world’s leading and most diverse derivatives marketplace, today declared a third-quarter dividend of $0.70 per share, payable September 25, 2018, to shareholders of record as of September 10, 2018.
/goo.gl/JBkjhM

NSE says working on a structure to address SGX issue
Livemint
New Delhi: Locked in arbitration proceedings with SGX, the National Stock Exchange on Wednesday said it is working on a “structure” to address the issues and more clarity is likely to emerge in the next two-three weeks.
/jlne.ws/2vtvqVV

Fintech

Regtech sandboxes: who’s helping the market?
bobsguide
Innovative fintech products are fast-becoming the lifeblood of global economic prosperity. Fresh and exciting developments have the power to expand financial inclusion across developing economies, unlock new sources of funding for businesses and help individuals to better understand how they buy, spend and invest. Yet it’s worth pointing out not every pie-in-the-sky fintech concept ends up bearing fruit – and some can even lead down a rocky road to disaster.
/jlne.ws/2vvsSqt

Fintech Frenzy: Hype or Reality? A Closer Look at 6 Key Sectors
Matt Harris – Fortune
I’ve been proven wrong once again.
For eight years running, I’ve predicted that fintech investment is going to plateau. Based on the start of 2018, it hasn’t yet. In fact, we saw more than $5.4 billion invested in fintech during the first quarter of the year, with no signs of slowing momentum. For perspective, fintech investment for all of 2014 was just under $4 billion, so that’s “5x” growth in four years. In 2001, per data from Venture Scanner, it was something like $300 million.
/jlne.ws/2vSNLv4

Market Leader INTL FCStone Leverages Paxos Technology To Automate Precious Metals Trade Confirmations
Mondovisione
Paxos, a financial technology company and the first blockchain-powered trust announced that INTL FCStone Inc.’s Precious Metals Division, is now using Paxos Confirmation Service, a tool built specifically for the post-trade needs of the precious metals market. The new technology automates trade confirmations, reducing errors and securing instantaneous reconciliation. INTL FCStone will use Paxos Confirmation Service to confirm all of the thousands of trades it executes daily for the division.
/jlne.ws/2vtwRnl

Lower taxes lift Broadridge income
Long Island Business News
Lake Success-based Broadridge Financial Solutions’ fourth quarter net earnings increased 11 percent to $207 million, even as revenues slipped, as the firm’s taxes tumbled. – libn.com
CEO Rich Daly said the firm had a “strong fourth quarter to cap off a very strong fiscal 2018,” which he attributed to a “strong performance and lower tax rate.”
/jlne.ws/2Mx35Vl

BMO Harris teams up with fintech programme participants
Finextra
Chicago-based BMO Harris Bank has begun working with two local fintech startups that it met through a mentorship programme.
Genivity and SpringFour were among six firms to take part last year in the first BMO Harris/1871 Fintech Partnership programme, operated by the bank with Chicago tech and entrepreneurship centre 1871.
/jlne.ws/2vQ5rYr

Cryptocurrencies

Crypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin
In the traditional world of securities exchanges, it would be akin to defying gravity. But at Kraken, one of the most popular venues for trading cryptocurrencies, a coin called Tether does it again and again.
/goo.gl/KsQenp

Yale economists share strategy for buying Bitcoin, Ripple, Ethereum
Ali Montag – CNBC
…it might seem impossible for the average investor to figure out which way the digital asset is headed, but a new report by two Yale University economists analyzing historical price patterns suggests there are actually two indicators you can use to get an idea.
/jlne.ws/2vu96vl

****The paper by the Yale economists can be found here.

Opera to Launch Built-In Cryptocurrency Wallet for Desktop Browser
Marie Huillet – Cointelegraph
Opera is launching its desktop web browser with built-in crypto wallet functionality, according to a press release shared with Cointelegraph Wednesday, August 8.
/goo.gl/9nFBEi

Japan to Focus Cryptocurrency Regulation on Speculative Investments
Ricardo Esteves – NewsBTC
The Financial Services Agency, the government agency that oversees banking, securities, and exchange services in Japan, plans to set up stricter requirements on cryptocurrencies and its use for speculative purposes.
/goo.gl/ufdd4u

With Blockchain Technology, You Gotta’ Collect Them All
Andrew Rossow – Forbes
Like Ash Ketchum was first told by Professor Oak in the world of Pokémon, you gotta’ catch them all. But, in the real world, we opt to collect them all.
/goo.gl/86pBHx

The SEC Will Decide on 9 Bitcoin ETFs in the Next 2 Months
Muyao Shen – Coindesk
The U.S. Securities and Exchange Commission (SEC) is set to make final decisions on nine proposed bitcoin exchange-traded fund (ETF) in the next two months.
/goo.gl/v2KKSs

Blockchain Will Disrupt E-Commerce
Giri Devanur – Forbes
The winter of 2017 was spectacular for the cryptocurrency markets, which reached an unprecedented high. 2017 Google Trends indicated how hot Bitcoin was last year — it was the second most searched topic under the global news category, while “How to buy bitcoin” was the third most sought-after “how to” question. Then, in an equally spectacular manner, bitcoin crashed and has lost 70% of its value ever since.
/goo.gl/jfsozQ

‘Bitcoin [Mining] Threatens Our Existence’ Academic Says, Calls for Intervention
Mark Emem – CCN
The ever-increasing amounts of electricity that bitcoin mining consumes threaten to reverse the efforts and gains made so far in mitigating greenhouse gas emissions, an academic has claimed.
According to Dr. Jon Truby, the director of the Centre for Law and Development at Qatar University, bitcoin was designed with no considerations made on its environmental impact and as such ‘threatens our existence’. Truby has thus called for solutions aimed at preventing similar blockchain technologies from emerging.
/jlne.ws/2vTPqk3

Politics

Congressman Collins, son charged with insider trading
Brendan Pierson, Jonathan Stempel – Reuters
Christopher Collins, a Republican U.S. congressman from New York who was one of President Donald Trump’s earliest supporters, was criminally charged on Wednesday with taking part in an insider trading scheme involving an Australian biotechnology company on whose board he served.
/jlne.ws/2OUUXPV

Trump’s trade policy is an exercise in futility
Douglas A. Irwin – Chicago Booth Review
President Donald J. Trump has long believed that other countries have been taking advantage of the United States, treating it unfairly in trade. The consequence, in his view, has been large trade deficits, massive job losses in manufacturing, and the destruction of the middle class. He sees pacts such as the North American Free Trade Agreement as badly negotiated and disastrous, and he has pledged that his administration will begin to undo the damage.
/jlne.ws/2ORT86p

Hackers Already Attacking Midterm Elections, Raising U.S. Alarms
Alyza Sebenius – Bloomberg
The U.S. midterm elections are at increasing risk of interference by foreign adversaries led by Russia, and cybersecurity experts warn the Trump administration isn’t adequately defending against the meddling.
At stake is control of the U.S. Congress. The risks range from social media campaigns intended to fool American voters to sophisticated computer hacking that could change the tabulation of votes.
/jlne.ws/2OUP31p

Is Xi Jinping’s Bold China Power Grab Starting to Backfire?
Peter Martin and Alan Crawford – Bloomberg Businessweek
A few months ago, Xi Jinping seemed unstoppable. He’d just abolished presidential term limits and announced the most sweeping government overhaul in decades. Having hosted Donald Trump for a successful visit in November, Xi seemed to have prevented a trade war with the U.S. Party propagandists were distributing hagiographic accounts of the newly anointed leader for life.
/jlne.ws/2OVijoz

Handling of U.S. trade dispute causes rift in Chinese leadership: sources
Ben Blanchard, Kevin Yao – Reuters
A growing trade war with the United States is causing rifts within China’s Communist Party, with some critics saying that an overly nationalistic Chinese stance may have hardened the U.S. position, according to four sources close to the government.
/goo.gl/WE2cDz

Regulation

SEC Inquired About Tesla CEO Musk’s Tweets
Dave Michaels – WSJ
Securities regulators have inquired with Tesla Inc. about Chief Executive Elon Musk’s surprise announcement that he may take the company private and whether his claim was factual, people familiar with the matter said.
/jlne.ws/2OOpgbf

Study: How Financial Regulation and Innovation Vary Across the World
ACA News
Regulators in the U.S. and internationally are adopting common strategies to promote financial innovation while maintaining rules in financial services industries, but the policies in the U.S. are often divided between state and federal oversight, according to new research from The Pew Charitable Trusts.
/jlne.ws/2vWkD6q

Nadex temporarily suspends member over spoofing
Maria Nikolova – FinanceFeeds
North American Derivatives Exchange (Nadex), a subsidiary of IG Group Holdings plc (LON:IGG), has imposed a fine and has temporarily suspended from trading one of its members over suspicious trading activities. According to a notice, published on Nadex’s website, Eric Leung has violated Nadex’s rules regarding prohibited transactions and activities.
/jlne.ws/2OV17j5

Bitcoin dealt a blow after SEC delays ETF decision
Top Wall Street regulator now has until September 30 to decide on SolidX Bitcoin ETF
Adam Samson – The Financial Times
After a bruising performance this spring, things were finally looking up for bitcoin in July, with the digital currency tacking on $2,000 in a matter of weeks. But it is back on the slide once again — a move that accelerated on Wednesday after Wall Street’s top regulator pushed back an eagerly-waited decision on a bitcoin ETF.
/goo.gl/7FTZeB

Investing and Trading

Four reasons why the stock market is nearing another record
Jeff Cox – CNBC
From tweets to tech to trade wars, investors have had multiple reasons to bail out of stocks this year. Instead, the S&P 500 is just another nudge away from setting a fresh all-time high.
/jlne.ws/2vrq1yC

eVestment’s Top Hedge Funds In July
AlphaWeek
Nasdaq subsidiary eVestment published its monthly ‘most searched funds’ on its platform for July, seeing Contrarian Capital Management’s Contrarian Emerging Markets fund leading the way in both number of total views and largest month-on-month change from June.
/jlne.ws/2OV0LsH

Many Americans Still Feel the Sting of Lost Wealth; The housing crash hurt the poor and middle class more than the rich, who rode the bull stock market.
Noah Smith – Bloomberg
The financial crisis and the Great Recession were absolutely devastating for the wealth of middle- and lower-income Americans. A report from the Federal Reserve Bank of Minneapolis shows just how big of a hit they took:
/jlne.ws/2vPynzH

Institutions

Banks and Private Markets: Making Fresh Connections
Paul J. Davies – WSJ
Private equity and private credit are on fire, but one thing that has kept regulators cool is the idea that banks aren’t deeply tied in to these markets.
/jlne.ws/2OT5TOd

Further legal exposure exposed in new ITG filing
Matt Hurd – Meanderful
In addition to employing too many people for the services offered, ITG has added some indication of further legal rumbling it hopes may be soon behind it. Again, POSIT is the subject of historical meandering over at the SEC.
/jlne.ws/2vvTU0N

Fidelity Bets on Zero-Fee Index Funds
Charles Stein and Annie Massa – Bloomberg
Free mutual funds. It sounds fishy—something that might be advertised on a late-night infomercial. But when Fidelity Investments unveiled two index funds without annual expense charges on Aug. 1, it was the real deal. And if you’ve been watching the money management industry closely, it felt almost inevitable. Several index mutual funds and exchange-traded funds from Fidelity and others were already charging less than a dime for every $100 invested. Why not let the last pennies drop?
/goo.gl/p7PGfT

Money Managers Aren’t Dead
They still have a role to play—and ways to get paid—even if they don’t beat the market.
Justin Fox – Bloomberg
“Many academics have concluded that the value of investment advice is virtually zero,” Princeton economists William Baumol and Burton Malkiel wrote in 1968. “There seems to be no evidence that the selections of professional investment men are superior to selections that are made by throwing darts at the Wall Street Journal.”
/goo.gl/gt8vzQ

Regions

The relentless decline of the Turkish lira, as told through exasperated Financial Times headlines
Edmund Heaphy – Quartz
Buying the Turkish lira, according to one analyst, is like “catching a falling knife.” Writing imaginative headlines about the currency’s unceasing ability to hit new lows, however, is even harder.
/jlne.ws/2vvmwax

Hong Kong’s IPO Takeoff Is Running Out of Runway; Repeated flops are causing investor fatigue.
Nisha Gopalan – Bloomberg
Brace, brace. Hong Kong’s IPO takeoff is going to come to a screeching halt. There’s a flood of deals still in the pipeline, it’s true, from food delivery giant Meituan Dianping to biotech unicorn Innovent Biologics Inc. But investor fatigue is setting in, with many of the hot sales that helped to reignite the market in the past year trading below their offer prices or showing lackluster gains.
/goo.gl/jjwe8H

Vanishing boss of Chinese US$5.1 billion hedge fund casts financial regulations in harsh light
Daniel Ren and Maggie Zhang – South China Morning Post
Regulation in mainland China’s financial markets has come under the spotlight again after the disappearance last month of the head of a Shanghai-based hedge fund that has put at risk some 35 billion yuan (US$5.1 billion) of investors’ money.Zhu Yidong, 36, the chairman of Shanghai Fuxing Group, disappeared at the beginning of July, about five months after China Central Television (CCTV) reported that he had pocketed illicit gains of 600 million yuan by manipulating the stock price of Shenzhen-listed Dalian Insulator Group between 2016 and 2017.
/jlne.ws/2vRtu99

Why Japan is an unexpected threat to financial stability In a crisis, the ability of banks to fund their dollar lending would be in question
John Plender – Financial Times
The reversal of globalisation is by now in full swing in goods markets but nothing remotely comparable is happening to capital flows. Indeed, it is impossible to understand US monetary policy or the gyrations of the Treasury market without considering the distorting impact of central bank asset-buying in Europe and Japan.
/goo.gl/2rXgrc

China Says It Will Set ‘Red Lines’ for State Firms to Curb Debt
Bloomberg
China is increasing its monitoring of indebted state-owned enterprises by creating watch lists and setting alarm levels, underscoring that the government hasn’t abandoned the goal of controlling borrowing.
/jlne.ws/2ORsw5L

Saudi Arabia Threatens More Retaliation Against Canada
Sarah Algethami and Maciej Onoszko – Bloomberg
Kingdom begins to sell Canadian assets in diplomatic dispute; Canada will ‘speak strongly’ on human rights, PM Trudeau says
Saudi Arabia said it will continue to ratchet up pressure on Canada for criticizing the recent arrests of women activists, as Prime Minister Justin Trudeau upheld his stance on human rights.
/jlne.ws/2vrcc3m

Brexit

Bank of England’s Iain McCafferty: ‘Exodus’ of EU bankers from London
Michael Selby-Green – Business Insider
European bankers are leaving London in an “exodus”, a senior Bank of England official claims.
/jlne.ws/2vvJJtf

Britain’s No-Deal Brexit Woes Sink Sterling
Mark Gilbert – Bloomberg
The Bank of England has raised its benchmark rate to the highest level in almost a decade. Figures on Friday are expected to show the pace of expansion in the U.K. economy doubled in the second quarter from the first. And yet the pound is at its weakest in about a year against the dollar and the euro. What gives?
/jlne.ws/2vRe3Oh

The Outsider Who Will Decide If Brexit Is Good for Britain
Jess Shankleman and Lucy Meakin – Bloomberg
Google “Clare Lombardelli” and one of the first items to come up is a description of a fight at the top of government, in which a furious Cabinet minister angrily dismissed her as “that woman.”
It was 2010 and Lombardelli was working as a senior official for George Osborne, then chancellor of the exchequer, during his battle with the work and pensions secretary Iain Duncan Smith over welfare reforms. According to reports at the time, Lombardelli stood her ground during the argument, telling Duncan Smith his proposals were “unworkable,” a verdict that provoked the angry minister to demand she “show some respect.”
/jlne.ws/2vSO1Ky

The tectonic shifts in British politics, explained
Anand Menon – The Washington Post
Roughly a month ago, two British Cabinet ministers involved with Brexit negotiations resigned, objecting to Prime Minister Theresa May’s approach to dealing with the European Union. That moment exposed startling changes within the British party system — and indeed the nation at large — that had been felt first with the Brexit vote.
/jlne.ws/2vV5zpk

‘Computer Says No’ to Jacob Rees-Mogg on Brexit
Therese Raphael – Bloomberg
Brexiters see the World Trade Organization as their best hope for a clean break from the European Union. Maybe it is. But it’s not a very good one.
Nobody can say now where Brexit negotiations will lead, but as the choice looks increasingly between either close alignment with the European Union and no deal at all, Brexit supporters have warmed to a no-deal exit, which they now refer to as trading under WTO rules. Leading Brexiter Jacob Rees-Mogg, a Conservative MP, says “Trading with the EU on WTO terms would work well for the U.K. and allows us to achieve Brexit sooner.”
/jlne.ws/2vRMrbS

‘I’m already stockpiling’: readers preparing for a messy Brexit
The Guardian
Britain could run out of food by this time next year if it cannot maintain the flow of goods after Brexit, the National Farmers’ Union has said. After it emerged that the government was drawing up plans to stockpile food in the event of a no-deal Brexit, the British Retail Consortium and drug manufacturers issued more warnings about possible supply shortages, we asked for your views.
/jlne.ws/2vUFKpD

Miscellaneous

Wellness-Obsessed Workaholics Get $375-a-Month Private Club
Nikki Ekstein – Bloomberg
You know the type: the corner suite executive who manages to reply to every email within 15 minutes – whether it’s from their office, a SoulCycle studio, or through the hole of a massage table.
/jlne.ws/2OWcho3

The post Trump administration cuts staff at financial markets watchdog appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

Today is your last chance to save $75 on tickets for A Leg to Stand On’s Rocktoberfest charity events in Chicago and New York! ~SD

In Q2, ICOs raised $8.3 billion versus $3.3 billion in Q1. The average return of ICO tokens in Q2 was -55 percent.~SD

Brazilian exchange group B3 reported that Q2 average daily volume in its derivatives segment rose 36.7 percent over Q1, and 4.7 percent year-over-year.~JK

According to Preqin, there are now 499 members of the “Billion Dollar Club,” which is what it calls those institutional investors who allocate $1b or more to real estate investments.~SD

Time has a profile of Tim Sweeney, who has achieved tremendous success as the creator of the popular video game Fortnite. The surprising news: he is a ‘Weird Computer Guy’. Who’d have thunk? ~SR

According to FINRA’s Industry Snapshot, there were 3,726 firms registered with FINRA in 2017, down from 4,146 in 2013. Almost the entirety of the decline came from the small firm category – companies with 1-150 registered representatives.~SD

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MWE World of Opportunity – Banks and Fintechs: Friends or Foes?

JohnLothianNews.com
“Many of these startups and fintechs recognize the benefits and strengths of the scale, the stability, the reach, and that regulatory know-how that the incumbents offer. And the smart incumbents, they recognize that insight, that agility, and the benefits of these startups and fintechs.”

In this video from MarketsWiki Education’s New York event, Sadia Halim, managing director, head of CIB Americas innovation with BNP Paribas, discusses the banking industry’s need to explore new fields and ventures as startups in the space threaten the entrenched big banks.

Watch the video here »

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Ex-Goldman Sachs MD alleges bizarre goings-on and sues for $50m. Ongoing fruit trauma at Deutsche Bank
eFinancialCareers
It’s a story that seems to have everything: a Mediterranean superyacht, a dubious businessman with a Germanic accent, Goldman Sachs and $1bn. If you were writing a script for a movie, you couldn’t ask for more.
/jlne.ws/2vAfjWN

**** Another in the “truth is stranger than fiction” category.~JB

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Peak Pegasus: Drifting cargo ship is victim of US-China trade war
Michael Selby-Green – Business Insider
A US cargo ship carrying $20 million worth of soybeans has been circling off the Chinese coast for over a month. The ship became an internet sensation on Chinese social media as it raced to deliver its cargo last month before new Beijing tariffs took effect.
/jlne.ws/2MvcvRm

**** Forget the beans, forget the trade war, forget Louis Dreyfus – how about the crew? Drifting in circles at sea for a month (and counting)… I hope the Wi-Fi is decent. ~SD

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Many of the Best Wall Street Jobs for Women Aren’t on Wall Street
Liz McCormick and John Gittelsohn – Bloomberg
U.S. firms with the highest share of female portfolio managers are located thousands of miles from Manhattan, according to new Morningstar Inc. research. Dodge & Cox and Charles Schwab Corp. — both with headquarters in San Francisco — are top ranked at 30 percent and 28 percent, while Franklin Resources Inc., with $724 billion in assets as of June 30, is tied for the third and based in nearby San Mateo, California.
/jlne.ws/2w0lino

**** If you can’t join them, beat them.~JB

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Thursday’s Top Three
Our top read story of the day yesterday was the New York Times’ piece Richard Jarecki, Doctor Who Conquered Roulette, Dies at 86. Second was the Reuters’ piece on the Office of Financial Research, Trump administration cuts staff at financial markets watchdog: source. Third went to Bloomberg’s Wellness-Obsessed Workaholics Get $375-a-Month Private Club, prompting the question, can you actually be well and be a workaholic?

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MarketsWiki Stats
130,926,855 pages viewed; 23,234 pages; 214,520 edits
MarketsWiki Statistics

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Lead Stories

Big Data: Too Popular for its Own Good?
Institutional Investor
A new report from Greenwich Associates titled “A Buyers Guide to Alternative Data” shows that asset managers are increasing their budgets for alternative data and forecasts that more will be using data sets to inform their investment decisions. Here’s the rub, though: as more investment shops buy alternative data from the same sources, their edge declines, rendering the spending less valuable.
/jlne.ws/2MidWFG

US Remains Center of Hedge Fund Universe
Chief Investment Officer
Home to more managers, investors, and capital than any other region, the US remains the center of the hedge fund universe, holding 72% of the approximate $3.6 trillion in global assets as of the end of May, according to a report from data and intelligence provider Preqin.
/jlne.ws/2vyfVfq

Deutsche Bank Cuts Costs Again. Not Even Fruit Bowls Are Safe
Steven Arons – Bloomberg
The list of perks at Deutsche Bank AG is shrinking fast.
Investment bankers at Germany’s largest lender have been told to travel coach class on trains; fewer are able to attend conferences and some former employees said severance pay was less generous than previous handouts. Even small treats like the daily fruit bowls are disappearing.
/jlne.ws/2MyFcg8

****Apparently, Deutsche Bank’s new COO, Frank Kuhnke, is known as “Frank the Tank.”~SD

US Options Volume on Pace for Record Year Despite Drop Off, Lower Volatility in Q2 TabbFORUM
US options volume remains on track for a record year, despite a volume drop off from the first quarter to Q2 2018. Volatility was lower compared to Q1, but still was elevated relative to the past couple of years. Average bid/ask spreads narrowed from month to month, with June posting the narrowest spreads in 2018. TABB Group’s exclusive US Options Market Review examines market trends in US-listed options markets, including detailed insight into volume trends.
/jlne.ws/2MhY85K

Did Quantitative Easing Help Spur Growth?
Erik Norland – CME Group
When it comes to quantitative easing (QE), go deep or go home. Using nearly a decade of evidence we look at what impact QE had in the United States, UK, Eurozone and Japan. Despite all the hopes and fears generated by the asset-purchase programs of central banks to stimulate their economies, for the most part, as far as we can tell QE had no actual impact on growth. Therefore, there is no reason to fear the ending of QE or even the reversing of QE as in the shrinking of a central bank’s balance sheet bloated by these asset purchases.
/jlne.ws/2M6SG6v

U.S. Oil Vanishing From China Tariffs Reveals American Clout
Bloomberg
Latest China tariff list spares crude and includes only fuels; Regional rivals were buying U.S. crude as China shunned supply
The removal of U.S. crude from goods targeted by Chinese tariffs is a sign that America has become too big to ignore in the oil market.
/jlne.ws/2OQS2Ih

‘The Dude’ Is Back With a $100 Million Bet on Turkish Stocks
Tugce Ozsoy and Constantine Courcoulas – Bloomberg
A single brokerage in Istanbul has been placing outsize bets on Turkish stocks at a time when less adventurous investors are bracing for a crisis.
/jlne.ws/2AXFNql

Exclusive: FTSE Russell may give mainland China stocks more weighting than MSCI
Jennifer Hughes – Reuters
Index provider FTSE Russell could give a greater weighting to mainland Chinese stocks than rival MSCI if it decides to include them in its flagship indices next month, its chief executive told Reuters.
/goo.gl/SqbwSr

FINRA Publishes First Annual Industry Snapshot
FINRA.org
FINRA today published the FINRA Industry Snapshot 2018, its first annual statistical report on the brokerage firms, registered individuals and market activity that FINRA regulates.
/goo.gl/dLGnQh

****This is chock full of charts.

Exchanges, OTC and Clearing

Stacey Cunningham, Head of the New York Stock Exchange, Talks History as She Changes It
Lucy Feldman – Time
Growing up, Stacey Cunningham thought her father was a sock trader. He was in fact a stock trader and hung a LeRoy Neiman painting of the New York Stock Exchange floor in his den. Now Cunningham is president of the exchange – the first woman to run the organization since its founding in 1792.
/jlne.ws/2AX4d3e

B3 Included In The FTSE4Good Emerging Latin America Sustainability Index For The Second Consecutive Year
B3
B3 has been included for the second consecutive year in the FTSE4Good Emerging Latin America index, which evaluates the companies’ performance with regard to their environmental, social and governance (ESG) policies and practices.
/jlne.ws/2vyhB8I

CME Group to Add New S&P Communication Services Select Sector Futures
Markets Insider
CME Group, the world’s leading and most diverse derivatives marketplace, will expand its suite of E-mini S&P Select Sector futures with the addition of a new Communication Services Select Sector futures contract. Pending regulatory review, the new product will be available to trade starting Sept. 10, 2018, alongside CME Group’s existing 10 Select Sector futures products.
/jlne.ws/2AUFHQd

B3 Announces Results For The Second Quarter Of 2018
B3
Brasil, Bolsa, Balcão (“B3” or “Company”; ticker: B3SA3) reported today its second-quarter earnings for the period ending on June 30, 2018 (2Q18). Total revenues reached R$1,386.2 million, a 28.4% increase year-over-year (2Q17), while recurring EBITDA grew 43.8%, which showed the Company’s operational leverage.
/jlne.ws/2vA6kF1

Crypto Derivatives Advance, Somewhat
Rob Daly – Traders News
Since CME Group and Cboe Global Markets launched bitcoin futures contracts in late 2017, it was only a matter of time before others stepped up to offer additional crypto derivatives to institutional investors.
/jlne.ws/2MBVm8I

Fintech

Who’s on first? The confusing state of federal fintech regulation
Rachel Witkowski – American Banker
Federal agencies have recently rolled out a series of efforts aimed at collaborating more on fintech regulation, but one key question remains: who is taking the lead?
At least three agencies have made a claim on the fintech sector, with two doing so just in the past week. A fourth agency is potentially waiting in the wings.
/jlne.ws/2vWQvYB

We’re A Long Way Off From The U.S. Being A Utopia For Fintech
Sarah Kocianski – Forbes
The U.S. Treasury and the Office of the Comptroller of the Currency (OCC) both hit the headlines last week with fintech-related announcements. Treasury released a 222-page report on the subject of Nonbank Financials, Fintech, and Innovation, while the OCC almost immediately followed with the news that it would finally begin accepting National Bank Charter applications from fintechs, in line with Treasury recommendations.
/goo.gl/cFCBSB

Bank of China CIO Says Bank to Increase Investments in Blockchain, Fintech
Max Yakubowski – Cointelegraph.com
The commercial, state-run Bank of China, not to be confused with the People’s Bank of China, announced its plans to invest further in fintech innovation, according to local news outlet The Paper August 9.
/jlne.ws/2vWAlOP

Tech Giants Lead the Way on Fintech Patents, Ahead of Banks
Steve Brachmann – IPWatchdog
British patent data insights firm Cipher recently released an IP strategy report that provides a look at how many firms are patenting technologies in the hopes of disrupting various industry sectors. Among the various highlights of the report include a look at fintech patents, which shows that tech companies and not banks are leading the way in obtaining patents that cover the future of banking.
/jlne.ws/2vY4SLU

Cryptocurrencies

The ICO Market Has Hit the Brakes
Kai Sedgwick – Bitcoin.com
The ICO economy succumbed to a dramatic decline in Q2 of this year. Such was the extent of the slump that its pushed the average ROI for ICOs into the red for the first time since records began. New figures released this week show the severity of the great ICO slowdown.
/jlne.ws/2vUErXO

Cryptoasset Trading
FuturesRadioShow
Colleen Sullivan, CEO, CMT Digital
/jlne.ws/2MfFM5G

Who Buys Bitcoin? 41% Say They Wouldn’t Buy Cryptocurrency
Lucinda Shen – Fortune
Who buys Bitcoin and its cryptocurrency ilk?
A relatively small segment of the population, according to a June survey by cryptocurrency app Gem and analytics firm Harris Insights.
Roughly 8% of Americans invest in cryptocurrencies such as Bitcoin, Ethereum, and Litecoin, the poll of over 2,000 adults revealed. In comparison, roughly 52% of Americans own stock, according to a Gallup poll from 2016.
/jlne.ws/2vupVX0

Chinese Private Equity Firm To Invest $270 Million In Overstock Blockchain Subsidiary
Michael del Castillo – Forbes
Chinese private equity firm GSR Capital has confirmed to Forbes that it signed a letter of intent to invest as much as $270 million in blockchain startup tZero, a subsidiary of e-commerce giant Overstock.com.
/goo.gl/ozMWxS

Illegal Activity No Longer Dominant Use of Bitcoin: DEA Agent
Kevin Helms – Bitcoin.com
A special agent with the U.S. Drug Enforcement Administration (DEA) has reportedly revealed that the use of bitcoin in illegal activities has shrunk to about 10 percent from 90 percent previously. This finding contradicts the popular perception of the cryptocurrency’s primary use.
/jlne.ws/2vWAKkj

Binance Offers First Look At Planned Decentralized Crypto Exchange
Christine Kim – Coindesk
Cryptocurrency exchange Binance unveiled the platform’s first look at its upcoming decentralized exchange (DEX) on Thursday.
/goo.gl/JbT25y

Crypto Exchange Bittrex Expands Adds Ethereum Classic and XRP Trading Pairs
Ana Alexandre – Cointelegraph
Cryptocurrency exchange and wallet service Bittrex has announced plans to launch U.S. dollar (USD) trading pairs for two new cryptocurrencies, according to an official announcement published August 8.
/goo.gl/kUr58S

‘Be Aware’: UK Financial Regulator Sounds Alarm Over Yet Another Crypto ‘Clone Firm’
William Suberg – Cointelegraph
UK regulator the Financial Conduct Authority (FCA) has issued a second warning in a week Wednesday, August 8, over crypto-related “fraudsters” claiming to be an FCA authorized firm.
/goo.gl/ixCkHC

Bitcoin Cash Lead Developer Banned From BCH Slack Channel
CCN
Bitcoin Cash lead creator Amaury Séchet has reportedly been expelled from the cryptocurrency’s Slack community following a dispute over his proposal to reduce transaction times using the “pre-consensus” framework. Prominent Bitcoin Cash promoter Roger Ver broke the news on a Reddit thread that attracted more than 800 comments.
/goo.gl/S5M5Z2

Which Countries Are Best to Start Blockchain Projects?
Darryn Pollock – Cointelegraph
Bitcoin’s boom has spawned more than just a digital currency revolution. Companies across the globe have explored the potential of blockchain technology in a range of different spheres, including cars, phones, and a multitude of disruptive alternatives in banking, government and as well as shipping.
/goo.gl/zTvaRu

Gubernatorial Candidate Wants to Make Colorado a ‘Blockchain Hub’
Ana Alexandre – Cointelegraph
The Democratic candidate for governor of Colorado, U.S Representative Jared Polis, has added a blockchain policy to the list of issues of his gubernatorial campaign this year, according to an announcement on Polis’ website.
/goo.gl/o2mfWH

UK Financial Watchdog Issues Second Crypto ‘Clone Firm’ Warning This Week
Cryptovest.com
The UK Financial Conduct Authority (FCA) has sounded an alarm over yet another clone company on the cryptocurrency scene. In a second such warning in a week, the financial regulator said on Wednesday that a company called Good Crypto was impersonating FCA-authorized firm Arup Corporate Finance to lure and possibly scam investors.
/jlne.ws/2vxI2M0

Politics

US triggers Russia sanctions that could block crude, product imports
Meghan Gordon – Platts
Washington — Fresh US sanctions imposed on Russia on Wednesday are not expected to impede energy trades, but a second round of sanctions that the law could trigger after three months would block a vast swath of Russian exports to the US, including crude and oil products.
/goo.gl/zAQdzT

****Response from Putin’s spokesman – “Anything can be expected from Washington now. [The US] is quite an unpredictable participant in international affairs.”

Cuomo Attacks Trump Plan for Capital Gains Tax Cut
Henry Goldman – Bloomberg
New York state will stop basing its capital gains tax on federal government regulations if President Donald Trump follows through on his proposed unilateral change in how the levy is determined, Governor Andrew Cuomo said.
/jlne.ws/2P1b1js

U.S. to rest its case against Manafort with Chicago bank
Nathan Layne, Karen Freifeld – Reuters
U.S. prosecutors plan to wrap up a case on Friday against former Trump campaign chairman Paul Manafort, with jurors expected to hear about his dangling a Trump administration job to the chief executive of a Chicago bank that gave him $16 million in loans.
/goo.gl/nu9tV3

US tariffs risk hitting highest levels for 50 years, says ECB
Claire Jones – Financial Times
The European Central Bank has warned that US tariffs are in danger of reaching their highest levels for half a century as its concerns mount about the impact of Donald Trump’s trade policy on eurozone growth.
/jlne.ws/2OUZqCh

China paper rebuts trade war criticism, says ‘an elephant can’t hide’
Ben Blanchard and David Stanway – Reuters
China’s top newspaper rebutted growing criticism in government circles that Beijing should have taken a lower profile to head off its trade war with the United States, saying on Friday that, like an elephant, China cannot hide its size and strength.
/goo.gl/nWPWvp

I Won’t Ride the Trump Train Into a Trade War
Robert J. Barro, Harvard – WSJ
Most of my academic colleagues are Democrats. But even the few who are Republicans are for the most part ardent Trump opponents. So I tend to get into trouble whenever I say something positive about administration policies. Common reactions include: “Are you a Trump supporter?” https://jlne.ws/2vDTXYP

Regulation

FCA Analyses Clearing Thresholds
Shanny Basar – MarketsMedia
Regulations covering a small number of large financial counterparties could still capture the vast majority of over-the-counter derivatives activity according to analysis by the UK Financial Conduct Authority.
/jlne.ws/2MyCcjU

Margin ‘big bang’ to catch tenfold more UK firms, FCA estimates
Risk.net
The final phase of the initial margin requirements for non-cleared trades in 2020 will capture 5.9% of UK financial firms – an almost tenfold increase from 0.6% currently – analysis by the Financial Conduct Authority (FCA) shows.
/jlne.ws/2MdsgPW

CFTC seeks $2.26m in penalties against ApuroFX, Jin Choi, and JCI over Forex fraud
Maria Nikolova – FinanceFeeds
Jin Choi, a Korean citizen, lied about ApuroFX being registered with the CFTC as a futures commission merchant and being a member of the National Futures Association.
/jlne.ws/2vwVcZq

CFTC Proposes Rules to Simplify Process for Foreign Clearing Organizations to Obtain DCO Registration Exemption
CFTC Press Release
The U.S. Commodity Futures Trading Commission (CFTC) today voted unanimously to approve a proposal to codify policies and procedures for clearing organizations located outside of the U.S. to obtain an exemption from registration as a derivatives clearing organization (DCO). The proposal will also reduce CFTC staff time and utilize fewer resources to grant exemptions.
/goo.gl/FsXvdJ

The SEC Is Intensifying Its Probe of Tesla
Matt Robinson, Benjamin Bain and Dana Hull – Bloomberg
The U.S. Securities and Exchange Commission is intensifying its scrutiny of Tesla Inc.’s public statements in the wake of Elon Musk’s provocative tweet Tuesday about taking the electric-car company private, according to two people familiar with the matter.
/jlne.ws/2MBy5nn

Ex-Goldman exec sues bank for $50 million, claiming cover-up
Kevin Dugan – NY Post
A former Goldman Sachs managing director filed a blockbuster $50 million suit against his former employer, claiming two executives at the Wall Street powerhouse tried to cover up a botched deal with a shady banker in order to deceive regulators — and then fired him when he wouldn’t play along.
/jlne.ws/2OY9Xgf

ESMA Updates Validation Rules Under EMIR
Mondovisione
The European Securities and Markets Authority (ESMA) has updated today its validation rules regarding the European Markets Infrastructure Regulation (EMIR) with regards to the revised technical standards on reporting under Article 9 of EMIR. The amendments will be applicable from 5 November 2018.
/jlne.ws/2AT0Mum

Investing and Trading

Chinese Alternative Asset Managers Dissolve in Record Number
Regulationasia.com
The Asset Management Association of China says in the first half of 2018, 163 private fund institutions have failed to renew their registration status with the association every three months as required.
/jlne.ws/2vxZu2S

Markets in U.S. Are Defying the Tumult Convulsing Rest of World
Liz McCormick – Bloomberg
The S&P 500 has been edging back toward its January peak, and the U.S. Treasury just auctioned a record amount of 10- and 30-year debt with relative ease. Looking at American markets, there’s little sign of the angst that’s been roiling emerging economies.
/jlne.ws/2P1bB0C

Hedge Funds Continue To Pile Into Short Gold Positions
Kitco
Although analysts continue to highlight the growing risk of a short-squeeze rally in the gold market, fund managers continue to pile in on the short side, according to the latest trade numbers from the Commodity Futures Trading Commission (CFTC). The gold market’s net-short positioning increased for the fifth consecutive week.
/jlne.ws/2vyEhpp

Considerations for designing a fixed income country classification framework
Scott Harman and Nikki Stefanelli – FTSE Russell Blog
In their simplest sense, benchmarks define peer groups: peer groups of investments by asset class (fixed income vs equities; government vs corporate); by industry (industrial vs financial); by country (developed vs emerging), and so on. And there are endless possible permutations thereafter. The method by which this grouping or classifying is achieved has been fundamental to the evolution of many established and widely used benchmarks.
/jlne.ws/2OY0ZiP

UBS Wealth Management urges clients to cut rouble ‘overweight’ positions
Reuters Staff
UBS Wealth Management called on clients to cut back any Russian rouble overweight positions on Friday, saying the threat of U.S. sanctions was likely to take a toll on the currency.
/goo.gl/vNFhGT

Institutions

The spoils of being a partner at an investment bank
Sujeet Indap – Financial Times
If you are star banker, the move in the last decade has been to hang out your own shingle. A document filed in the legal fight between boutique bank Perella Weinberg Partners (PWP) and a team of dismissed restructuring bankers shows us why.
/jlne.ws/2B87ZXR

Tourmaline Partners Adds Industry Veterans Seth Hoenig and Aidan Toomey to Trading Team
GlobeNewswire
Tourmaline Partners, LLC, one of the world’s leading outsourced trading solutions firms, today announced that industry veterans Seth Hoenig and Aidan Toomey have joined as Managing Directors. These new hires represent a significant addition to a robust team of senior trading professionals who are addressing a growing demand for Tourmaline’s trading and commission management services.
/jlne.ws/2vxFM7k

Former Bankers Launch Fncrowd.com. A Financial Services Professional Network
Business Wire
Fncrowd.com, a Professional Network solely focused on Financial Services has been launched by a trio of former Investment Bankers – Jon Carp, Ahmed Alsaleh and Malcolm Ford. The online community is for individuals in Asset Management, Corporates, Investment Banking, Private Equity, VC, Wealth Management among others. Website: https://www.fncrowd.com / App Stores: Fncrowd
/goo.gl/fb2Fov

Regions

More than three quarters of Asia-Pacific firms fear regulatory risk
bobsguide
Investment in data analytics may be the solution to concerns around regulatory uncertainty for Asia-Pacific-based financial market firms, according to a new survey by AxiomSL.
76% of the survey’s Asia-Pacific-based market participants are more concerned this year than last about their ability to comply with regulations.
/jlne.ws/2OX4HJK

Saudi sovereign wealth fund scrambles for resources; Riyadh is taking radical steps to bolster the investment vehicle’s coffers
Anjli Raval, Arash Massoudi and Simeon Kerr – Financial Times
Saudi Arabia’s $2bn bet on electric car company Tesla has reaffirmed the appetite of the kingdom’s powerful sovereign wealth fund for high-profile investments. But the market-moving deal has also increased scrutiny on the finances of the Public Investment Fund, the entity chosen by Crown Prince Mohammed bin Salman to overhaul the kingdom’s oil-dependent economy.
/goo.gl/8Umk2i

Turkey’s Erdogan calls on Turks to buy lira for ‘national struggle’
Reuters
President Tayyip Erdogan called on Turks to exchange hard currency and gold into the lira on Friday, warning that the country would respond to those who had started an “economic war” against it.
/goo.gl/1sPKrF

Diplomatic rift with Washington drives Turkish lira to fresh low
Ayla Jean Yackley, Roger Blitz, Adam Samson and Demetri Sevastopulo – Financial Times
The Turkish lira dropped to a new low against the dollar, losing 4 per cent on Thursday despite government promises of a new economic plan, as pressure mounted on Ankara to reassure investors and resolve an escalating dispute with the US.
/jlne.ws/2AVHd4y

‘Adopt a unicorn’: Indonesia eyes plan to help startups expand across southeast Asia
Reuters Staff
Indonesia wants southeast Asian nations to cooperate in helping startups in the region worth at least $1 billion expand outside their home countries, the communication minister said on Friday.
The effort aims to keep foreign startups from dominating a market of 640 million people by assisting the region’s estimated seven to ten unicorns, or companies that have attained a valuation of $1 billion without tapping the stock markets.
/goo.gl/CCJ1TE

Brexit

Banks’ post-Brexit ‘fragmentation’ plans hold risks and costs
Sinead Cruise, Pamela Barbaglia – Reuters
Banks that move some of their business and staff out of London to cities scattered across Europe after Brexit could be taking on extra risks and costs without being sure of boosting revenues.
/goo.gl/1DrJD3

Pound Vigilantes Limber Up for Battle to Block No-Deal Brexit
Anooja Debnath and Charlotte Ryan – Bloomberg
A public outcry couldn’t do it. Nor could lobbying by businesses, economists or rival politicians. Now currency traders are ratcheting up pressure on Britain and the European Union to avoid a no-deal Brexit.
/jlne.ws/2vWEuSK

No confidence over Brexit
The Economist
Theresa May and several of her cabinet ministers have been on a charm offensive around Europe, trying to sell her Chequers plan for Brexit to doubtful European Union governments. Most recently the prime minister bearded Emmanuel Macron in the French president’s Fort Brégançon holiday retreat in the south of France. Like most EU leaders, Mr Macron is sceptical about the Chequers plan. He is also unwilling to sidestep the EU’s chief Brexit negotiator, Michel Barnier, who has already rejected several of its central elements.
/jlne.ws/2vTSZXF

UK voters should make final Brexit decision if talks with EU collapse: poll
Kylie MacLellan – Reuters
If Brexit talks break down without a deal, half of Britons believe the final decision over whether to leave the European Union should be taken by the public in a referendum, according to a survey of more than 10,000 people published on Friday.
/jlne.ws/2vVnOLn

The post Big Data: Too Popular for its Own Good? appeared first on John Lothian News (JLN).

First Read

Tech firms looking to change the technology stack
Jim Kharouf, JLN

The question for the industry today is whether firms have hit the technology breaking point. In other words, can firms continue to maintain and sustain the technology they’ve built over the past 20-plus years? A new breed of tech firms is emerging to help address this challenge.

There are increasing signs that the so-called “technology stack” at various firms is not economically sustainable, nor is it necessarily more efficient. For years, various technology vendors have been expanding their product mixes to handle front, middle and back office responsibilities for firms. The industry is seeing a mix of established tech vendors expand offerings via acquisition and then a number of startups offering new ways to tackle problems with a whole new business model and set-up.

To read the rest of this story, go HERE.

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Hits & Takes
JLN Staff

On Friday August 17, the 2nd International Blockchain Congress in Chicago takes place at the Aon Center at 200 E. Randolph. Billed as “The Most Comprehensive Blockchain Smart Contracts Event to Date,” it features experts in blockchain technology and smart contracts from all around the world – Western Europe, Eastern Europe, Southeast Asia, Western Asia and North America – who will take part in keynotes, panel discussions, case studies, interactive Q&A, fireside chats, lightning talks, and ICO workshop and an ICO pitch competition.
The event is co-hosted by Microsoft. Here is the link for the agenda and to register for the conference. ~SR

Brad Rosen, former CME member and current writer/analyst at Wolters Kluwer, is a contributor to the new publication “Blockchain, Virtual Currencies and ICOs – Navigating the Legal Landscape”. The book is designed to “assist practitioners that seek to navigate the perplexing terrain of virtual currencies and cut through the fog to gain a measure of clarity” and is available for order online.~SR

TMX‘s second quarter earnings showed its highest revenue division of the firm was its Global Solutions, Insights and Analytics (GSIA), which posted $70.7 million, and included $27.9 million related to Trayport, which it acquired from ICE.~JK

As Millennials continue to kill things, Philadelphia Magazine has a story, How Millennials Killed Mayonnaise. Thank you, Millennials. I hate mayonnaise.~SR

You might find yourself hearing about “glyphosate” more than usual. That is because glyphosate-based weedkillers made by Monsanto are at the center of a recent court ruling. Bayer, which bought Monsanto this year, has taken a tumble as a result of the verdict against Monsanto. This court case is just the first of thousands brought against the company for not disclosing cancer risks posed by the chemical. ~SD

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MWE World of Opportunity – How to Survive the Financial Media Markets for 30+ Years
JohnLothianNews.com
“I met this guy on a job interview – he wanted to sell ads for us. I said, ‘Show me what magazine you’re with.’ He said, ‘Well it’s not a magazine, it’s a website.” It’s November of 1994… I said, ‘What’s a website?” and he showed me the future.”

What do retail sports, art and finance have in common? Bruce Morris, CEO of Tabb Group, for one. In this video from MarketsWiki Education’s New York event, Morris talks about bad bosses, fax machines, his first Blackberry and the connections he made along the way.

Watch the video here »

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Dr Patrick Strange Retires From NZX Board
Mondovisione
NZX announces Dr Patrick Strange’s intention to retire from the board. Dr Strange will step down by the exchange’s 2019 annual meeting.
/jlne.ws/2AZt9ak

****All the best comments I can think of involve spoilers from the new “Avengers” movie…~SD

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Facebook’s Marcus Steps Down From Coinbase Board
Nikhilesh De – CoinDesk
David Marcus is stepping down from the board of directors at cryptocurrency exchange Coinbase, citing his new assignment at Facebook leading the social media giant’s blockchain strategy.
Marcus, a vice president at Facebook since 2014, joined the board at Coinbase, now valued at $8 billion, in December of last year. At the time, CEO Brian Armstrong said Marcus, who was once president of PayPal, would apply his expertise in the “payments and mobile space” to guide Coinbase in its overall mission.
/goo.gl/nrMgGH

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The Spread – 8/10 – Pump up the Vol(ume)
JohnLothianNews.com

In this week’s recap of happenings in the options world we delve into some confusing terms, Spinal Tap and Recep Erdogan’s plight.

Watch the video and see the stories referenced here »

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Spoofing; Post-Trade Allocations; Wash Trades; Supervision; Cryptocurrency Activities
Gary DeWaal – Bridging the Week
A trader who was summarily banned in August 2016 from all CME Group exchanges for 60 days on an emergency basis agreed to pay a fine and be banned for an additional 45 days to resolve disciplinary charges that he purportedly designed and used an algorithmic trading system for spoofing. Separately, one CME Group exchange settled with a non-US trading firm for wash trades and, in the process, further articulated some minimum standards of supervision it expects. In addition, NFA formally issued its Interpretive Notice on certain members’ enhanced disclosure obligations regarding their cryptocurrency activities, including important compliance dates.
/jlne.ws/2w212Sj

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Friday’s Top Three
Our top read story from Friday by a long shot was eFinancial Careers’ piece Ex-Goldman Sachs MD alleges bizarre goings-on and sues for $50m about an odd case of “he did it, no he did it!” And my lawyer is asking for $50 million. Second was kind of fruity, as Deutsche Bank heads toward using storage units for offices, in Bloomberg’s https://jlne.ws/2MyFcg8Deutsche Bank Cuts Again. Not Even Fruit Bowls Are Safe. Third was Institutional Investor’s Big Data: Too Popular for its Own Good? on the value of big data.

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MarketsWiki Stats
130,926,855 pages viewed; 23,234 pages; 214,520 edits
MarketsWiki Statistics

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Lead Stories

Online Stock Trading Has Serious Security Holes
Brian Barrett – WIRED
It’s never been easier to trade stocks; just a few taps or clicks will do the trick. But most of the platforms that millions of market participants rely on to move their money suffer from cybersecurity shortcomings, new research warns. As if stocks weren’t risky enough already.
A new report from Alejandro Hern·ndez, a security consultant at IOActive, found that nearly all of the 40 major online trading platforms he investigated had at least some form of vulnerability. While they range widely in severity and scope, the overall picture is of an industry that has not taken security measures proportional to the sensitive information involved. Hern·ndez will present his research at the Black Hat security conference in Las Vegas on Thursday.
/jlne.ws/2P06qhl

CTAs Are Losing Money and Investors Are Fleeing
Stephen Taub – Institutional Investor
Trend followers and similar funds extended their losses in July, with many down by double-digits.
Investors may be losing their patience with CTAs and other trend-following strategies.Commodity trading advisors, also called managed futures, continued to struggle in July, failing to provide a safe alternative to the increasingly volatile equity markets. All five indexes tracked by Societe Generale Prime Services suffered losses last month.
/goo.gl/TW2qqC

The Mystery Behind Tether, the Crypto World’s Digital Dollar
Paul Vigna and Steven Russolillo – WSJ
A fast-growing digital currency that claims to be backed by U.S. dollars has become a cornerstone of the volatile cryptocurrency market. The problem: There isn’t hard evidence the cash supporting it exists.
/jlne.ws/2vZ2vZi

Eurex’s Asia head says ‘most prop trading firms are already trading digital currencies’
Tom Watkins – The Trade
The regional head of Asia for one of the world’s largest futures exchanges has said most of its proprietary trading firm clients are already trading digital currencies, or are at least observing.
/jlne.ws/2AZEhUE

Citadel converts $10,000 investment in 1990 into $1.3m; Hedge fund’s annualised 19.1% return since inception outstrips Buffett’s Berkshire Hathaway
Chris Flood – Financial Times
An investor with the foresight to have staked $10,000 in Citadel’s first fund when the Chicago-based hedge fund manager was launched by Ken Griffin in 1990 would now be sitting on a pot worth more than $1.3m. A $10,000 stake in shares in Berkshire Hathaway, Warren Buffett’s company, would have grown to $315,000 over the same period, while an S&P 500 tracker fund would have increased to $131,000 (including dividends but excluding fees).
/goo.gl/mGTSnL

Michael Spencer invests $40m in Europe-focused hedge fund; Nex Group chief and ICAP founder sees ‘real opportunity’ in start-up Viewforth Partners
Lindsay Fortado in New York – The Financial Times
Michael Spencer, chief executive of Nex Group, is backing a hedge fund start-up in London with an investment of about $40m made through his private investment group, according to a person familiar with his plans.
/goo.gl/qqWsTm

Alt-Right Against Fintech: One Year Of Technology Against Hate
Madhvi Mavadiya – Forbes
One year on from Charlottesville, technology companies are still ensuring that they are working against, not promoting, those individuals or organizations who are aligned with white supremacists or conspiracy theorists, but what about fintechs?
/goo.gl/B9QZQt

Exchanges, OTC and Clearing

DGCX eyes geographical growth, not look-alike products
Louisa Chender – Global Investor Group
The Dubai Gold and Commodities Exchange (DGCX) is targeting geographical growth and a diversified membership based, while avoiding look-alike products. “I want the DGCX to grow geographically and I partly measure our success in the new members and new clients we bring to the exchange,” Les Male, chief executive officer at DGCX, told FOW. Male, who replaced Gaurang Desai as CEO in February, said he would now like to see further diversification of the membership base at DGCX.
/goo.gl/sdBQqy

TMX Group Limited Reports Another Record Quarter in Q2/18
PR Newswire
Quarterly diluted earnings per share of $1.71, up 44%, or 55% before discontinued operations, from Q2/17
Record quarterly adjusted diluted earnings per share of $1.34, net of a 6 cent lease termination charge, up 6%, or 16% before discontinued operations over Q2/17
Record quarterly revenue of $209.5 million, up 20% compared with Q2/17
Cash flows from operating activities of $119.7 million, up 38% over Q2/17
/goo.gl/qGKg3a

OCC’s move to ‘Cover 2’ won’t cost members more, CRO says; New clearing fund methodology will shift cost burden to firms that take more tail risk; Some clearing members may see a cut in clearing fund contributions
Dan DeFrancesco – Risk.net
The Options Clearing Corporation may have found a way to cover two defaults for the price of one. The Chicago-based clearing house announced in July that the Securities and Exchange Commission had approved a new clearing fund methodology. The new format switches to stress-testing from treble-margin variance; it will flip the OCC’s current contribution requirements to focus on risk; and lastly, it will move the clearing fund to Cover 2 from Cover 1.
/goo.gl/RwNkHM

Shanghai Stock Exchange Adjusted Market-Closing Trading Mechanism To Come Into Effect On Aug. 20 Date
Mondovisione
To further maintain the price stability at the market closing stage, the Shanghai Stock Exchange (SSE) has adjusted the market-closing trading mechanism to adopt the call auction for the 3-minute market closing as approved by the China Securities Regulatory Commission and has revised the “SSE Trading Rules” accordingly.
/goo.gl/S3ZkwK

Nasdaq Dubai to allow individuals to invest in sukuk market by 2019
Reuters
The Nasdaq Dubai exchange plans to allow individuals to invest in sukuk (Islamic bonds) by 2019, the chief executive officer said in remarks published on Monday. Over the past few years, the exchange has been looking at ways to sell sukuk directly to retail investors, expanding the primary market beyond institutional buyers.
/goo.gl/UZHU66

Fintech

UBS trials Netflix-style algorithms for trading suggestions; ‘If you liked that junk bond, you might like this’
Joe Rennison – FT
Picking an investment may soon start to be more like choosing a TV show on Netflix or finding new music on Spotify. UBS is looking at applying recommendation algorithms to suggest trades to its asset management and hedge fund clients, similar to those used by a host of consumer technology companies.
/goo.gl/xL8yNA

London’s insurance market turns to electronic trading; Rise in use of policywriting system comes after pressure from Lloyd’s
Oliver Ralph – FT
Use of a new electronic trading system for London’s specialist insurance market has jumped after Lloyd’s said it would force brokers and underwriters to use it. The London Market Group, which represents both Lloyd’s and the insurers and brokers who work nearby, said that almost 3,000 policies were written on the electronic system in June, about double the amount in the same month last year.
/goo.gl/1JGxiq

Fintech startup in ‘global talent war’ for AI engineers
Tech In Asia
Like most startups and their founders, Chun Dong Chau began with a problem.
When he and his co-founders looked at China’s financial tech industry, they saw a relatively mature market that was helping Chinese consumers and financial institutions alike. When they looked at Southeast Asia, they saw something else. They saw big problems.
/jlne.ws/2w3vewc

Is Southeast Asia ready to go cashless?
Tom O’Connell – Southeast Asia Globe
As investments in fintech continue to surge globally and throughout Southeast Asia, the region may be on its way to solving the divide between mobile connectivity and financial inclusion.
While the region has a 133% mobile connectivity rate (meaning some users own more than one SIM card or mobile phone), only 27% of Southeast Asians have a bank account. Cambodia enjoys the highest mobile connectivity in Southeast Asia, at 173% – but only a 13% banked population, according to a 2017 Asian Development Bank report.
/jlne.ws/2w66ALh

HKMA guidelines on smart banking to help Hong Kong bridge the gap on innovative services with other markets
Enoch Yiu – South China Morning Post
Hong Kong lags behind other developed markets in allowing banks to work with third party service providers to deliver a “smart banking experience” but the Hong Kong Monetary Authority’s latest guidelines may help the city to catch up, according to Citibank.
/jlne.ws/2wc4LwL

Manchester bids for fintech status
Clarke Willmott – Finextra
Manchester is positioned to take a major role in the fintech revolution, which has seen the UK outstrip the US in investment in the last six months, says one of the city’s top lawyers.
/jlne.ws/2w3UK4p

AI tech boosting smart agriculture
The Star Online
AS AN old saying goes, agriculture is a trade “that solely depends on the sky”.
Most livestock and field crops rely heavily on the weather for their comfort, and providing water and energy. But China’s more than 1.3 billion residents, a growing number of whom are becoming mid-income earners, are building up such an appetite that farmers are having to change the way they grow and sell food.
/goo.gl/d9xjzY

Cryptocurrencies

Gambling Apps Surpass CryptoKitties as Blockchain Money Makers
Olga Kharif – Bloomberg
Most blockchain gambling sites aren’t licensed or even legal; Sites can make it easier for participants to remain anonymous
/goo.gl/M3Y8Me

Finn falls for 797m baht BTC scam
Bangkok Post
Police arrested actor Jiratpisit “Boom” Jaravijit, 27, in Chatuchak district on Wednesday for alleged money-laundering following a complaint that he fraudulently lured a foreigner into investing 797 million baht in digital currency.
/jlne.ws/2vAoBCl

****797 million baht = $24 million

$43 Billion Wiped Out of Crypto in 5 Days as Bitcoin Price Rebounds
CCN
Over the past 24 hours, Bitcoin, Ethereum, and Bitcoin Cash recovered by around four percent, as the crypto market added $8 billion to its valuation.
/goo.gl/iJG4jC

How Crypto Reacted to This Week’s SEC Bitcoin ETF Delay
Muyao Shen – Coindesk
It was an expected result at an unexpected time. The news broke on August 7 that the U.S. Securities and Exchange Commission (SEC) is kicking the can on its decision to approve or disapprove a proposed rule change that would let the Cboe BZX Exchange list a bitcoin exchange-traded fund (ETF). Now, the next deadline for something is September 30, though ultimately, the U.S. securities market regulator could push it forward again into 2019.
/goo.gl/MHqLKL

Decentralized Crypto Exchanges Can Solve Fake Volumes And Malpractices
Joseph Young – Forbes
In an interview with Forbes, Sasha Ivanov, the CEO at $200 million smart contracts blockchain Waves and blockchain infrastructure development firm Vostok, said that decentralized crypto exchanges are capable of competing against centralized trading platforms and eliminate fake volumes from the global market.
/goo.gl/8AzjNa

Gujarat’s Bitcoin Scam Raises Questions on Fraud, Demonetisation and Cryptocurrency
The Wire
The unearthing of an alleged scam involving senior BJP leaders in the state, cryptocurrencies and an abduction has caught the party on the wrong foot.
/goo.gl/3hdD6F

The Ledger: Blockchain for Identity, Bitcoin vs Turkey, NYSE and Crypto
Robert Hackett, Jeff John Roberts, and Jen Wieczner – Fortune
I went to the DMV last week and the visit unfolded as you’d expect: A lot of filling out paper forms and waiting on wooden benches. The place is a technology time warp and perhaps that’s not a big dealóafter all, you only have to go there every 5 years if you want to drive a car. The trouble is we use our drivers license for many other things, from boarding a plane to entering a bar. Our license is a powerful document that tells the world who we are.
/goo.gl/PpYhNr

The new miners: Wave of cryptocurrency mining at colleges, businesses raise hacking concerns
Jennifer Schlesigner, Andrea Day
It was the first day of freshmen year at Penn State’s State College campus, and along with bed sheets, clothing and books, Patrick Cines had an unusual looking computer. He did not plan to write term papers or do research on it. Instead, Cines planned on using it to make money while he was out experiencing campus life
/goo.gl/CgsjDr

IBM Is Still A Believer In Blockchain…And Other Small Business Tech News This Week
Gene Marks – Forbes
Here are five things in technology that happened this past week and how they affect your business. Did you miss them?
/goo.gl/LzTFDo

Politics

Lobbyists, letters and money: How banks are taking aim at a post-financial crisis regulation with help from Congress
Lydia Moynihan, Charles Gasparino – Fox Business
Wall Street spent millions of dollars in campaign cash while enlisting some of the most powerful Republican congressmen and women in the banking industry’s latest effort to neuter a key post-financial crisis regulation, FOX Business has learned.
/jlne.ws/2OZEJFu

A U.S.-China Divorce Would Be Ugly
Michael Schuman – Bloomberg
A financial adviser I know, Frank Astorino, says nothing destroys wealth like divorce. That’s a warning China and the U.S. should keep in mind as they intensify their trade war. If they continue down the road they’re on, an economic separation between the world’s two largest economies is a very real possibility. And the costs would likely exceed any marital spat in history.
/goo.gl/zhak3h

Charges against US Congressman reignite stock ownership debate
Kadhim Shubber and Courtney Weaver – Financial Times
Chris Collins at times seemed more excited about private business than public service.
The Republican representative for New York’s 27th congressional district once declared that his epitaph would carry the name of the little-known biotech company where he held a board seat. “It is not going to be ‘member of Congress’,” he told the local Democrat & Chronicle newspaper.
His prediction may yet come true after prosecutors brought insider trading charges connected to dealings in the company, Innate Immunotherapeutics, against Mr Collins, his son Cameron, and Cameron’s fiancÈe’s father.
/jlne.ws/2P1vaWG

Why Wall Street might cheer a blue wave
Ben White – Politico
Wall Street is only just now starting to take seriously the idea that Republicans could lose at least some of their grip on Washington in November. Most investors assume the GOP holds the Senate. But the House is increasingly viewed as likely to flip. Democrats winning one chamber would certainly not be a nightmare scenario for banks or markets. On some fronts, it might turn out to be a positive.
/jlne.ws/2vB8DHV

Trump backs boycott of Harley Davidson in steel tariff dispute
Ginger Gibson – Reuters
President Donald Trump backed boycotting American motorcycle manufacturer Harley Davidson Inc (HOG.N) on Sunday, the latest salvo in a dispute between the company and Trump over tariffs on steel.
/goo.gl/4wgVyd

Analysis: Trump still flirts with racially tinged rhetoric
Julie Pace, Steve Peoples and Zeke Miller – Associated Press
There has been no reset, no moment of national healing. One year after blaming “both sides” for violent clashes between white supremacists and counterprotesters, President Donald Trump still flirts with racially tinged rhetoric ó and feels little blowback from Republican leaders or GOP voters when he does. Black leaders and Democrats argue Trump’s tone and actions on race have gotten even worse in the months since the clashes in Charlottesville, Virginia.
/goo.gl/qBo6uH

Regulation

CFTC Charges Futures Broker With Engaging In Fraudulent Trade Allocation Scheme
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against Christian Robert Mayer of Eden Prairie, Minnesota, for engaging in a fraudulent trading scheme involving unauthorized trades in cattle, crude oil and wheat futures contracts. The CFTC Order requires Mayer to pay a $100,000 civil monetary penalty and imposes permanent trading and registration bans on him. The Order also requires Mayer to cease and desist from further violations of the Commodity Exchange Act, as charged.
/goo.gl/vwzjg3

National Futures Association (NFA) Members Must Disclose Crypto Holdings Per New Requirements
Bitcoin Exchange Guide
The National Futures Association (NFA) has just announced that, from October 31 onwards, all members of this regulator will have to disclose certain information about the risks of investing in cryptocurrencies and outline them for the customer.
/goo.gl/WpMwzG

Lawsuits accuse Tesla’s Musk of fraud over tweets, going-private proposal
Jonathan Stempel – Reuters
Tesla Inc and Chief Executive Elon Musk were sued twice on Friday by investors who said they fraudulently engineered a scheme to squeeze short-sellers, including through Musk’s proposal to take the electric car company private.
/goo.gl/ieGFLJ

Federal Reserve fines Citigroup $8.6 million for faulty mortgage document practices
Reuters
The Federal Reserve said Friday it had fined Citigroup (C.N) $8.6 million over shoddy mortgage documentation practices at a subsidiary.
/jlne.ws/2vAnS45

UK financial watchdog opens record number of cases
Caroline Binham – The Financial Times
FCA workload focuses on financial crime, governance and culture problems
The UK’s financial watchdog is opening more cases than ever before, with a particular focus on financial crime. According to the Financial Conduct Authority’s own statistics, it has a record 504 investigations open as of 1 April, compared with 410 a year previously. Just two years ago, the number hovered at around 100 cases.
/goo.gl/u3Rmzv

Regulators splash out on staff – with few results
The Times
Spending and staffing at the City’s main regulators have soared by more than a third in four years, an investigation by this newspaper has found. The Financial Conduct Authority, the Bank of England and seven other watchdogs have hired hundreds more staff and increased annual spending to £1.4bn since 2014.
/goo.gl/YH4RH6

New Tax-Credit Investigation May Trip Up Wells Fargo; Add low-income housing to the list of legal woes.
Stephen Gandel – Bloomberg
As much as Wells Fargo & Co. wants the public to believe it has put its troubled past behind it, yet another legal tangle shows it still doesn’t have a handle on its own questionable behavior.
/goo.gl/d6gawn

Investing and Trading

This Year’s Big Disrupter: The Dollar
Richard Barley – WSJ
Much of the disruption to global financial markets this year has come from a source close to home: the U.S. dollar.
/jlne.ws/2OZyp0t

The Battle of the Bond Forecasters
Randall W. Forsyth – Barron’s
Never say never. That’s the one lesson I take away from the past four decades, which have seen both record-high stocks and a 22% one-day drop in the Dow, both 20% and 0% U.S. interest rates, and both “Morning in America” and a depressing “New Normal.”
So when JPMorgan Chase Chief Executive Jamie Dimon contends that long-term U.S. interest rates ought to be 4%óand, indeed, that 5% has a higher probability than the conventional wisdom holdsóthat mantra bears repeating.
/jlne.ws/2OXOzHV

Companies with strong ESG scores outperform, study finds; Portfolios in large and medium-sized groups in developed markets, excluding the US, record best results
Jennifer Thompson – Financial Times
Companies with better environmental, social and governance standards typically record stronger financial performance and beat their benchmarks, according to research from Axioma.
/goo.gl/JPWwGM

Soaring US profit margins pose challenge for investors After strong second-quarter results, questions surround whether a peak has been reached
Nicole Bullock – The Financial Times
Profit margins at US companies have jumped to their highest level in at least a decade, raising questions about whether the most recent quarterly results are a peak. With 90 per cent of companies in the S&P 500 having reported their results for the second quarter, net profit margins hit 11.8 per cent, the highest level since financial information provider FactSet began recording the data in 2008.
/goo.gl/ZQF9e9

Institutions

Investment banks in 2Q18, part 3: FICC and equities
Mark Baker – Euromoney Magazine
What an odd quarter for fixed income businesses. It was one where the divergence in US and European conditions came to the fore, with the ability to make money in parts of European FICC severely constrained by continued quantitative easing. Commodities businesses generally rose but some firms have exited the business after past problems. Credit was often weak.
/jlne.ws/2AZzG4W

Barclays shifting ownership of European branches to Irish unit ahead of Brexit: sources
Abhinav Ramnarayan, Lawrence White – Reuters
Barclays has begun shifting direct ownership of its French, German and Spanish branches from a British-based entity to its Irish bank, according to sources with direct knowledge of the plans, ahead of Britain’s exit from the European Union.
/goo.gl/vDCHj8

Franklin Templeton drops out of European top 20; Investors flee New York-listed group over performance concerns
Attracta Mooney – Financial Times
Franklin Templeton has fallen out of a list of the 20 biggest mutual fund managers in Europe in a huge blow for the $734bn investor that once ranked among the continent’s most popular investment houses. The New York-listed group, which has had operations in Europe since just after the second world war, has slipped from its position as Europe’s fifth-largest mutual fund manager in 2013 to outside the top 20 five years later as investors fled over performance concerns.
/goo.gl/mZUoGo

British lawmakers ‘disappointed’ over regulator’s inaction on RBS
The Business Times
[LONDON] A group of British lawmakers has criticised the Financial Conduct Authority (FCA) for not taking further action against Royal Bank of Scotland Group Plc after an investigation into the bank’s treatment of business customers.
/goo.gl/52EaFR

Regions

Russia says will ditch U.S. securities amid sanctions: RIA
Andrey Ostroukh – Reuters
Russia will further decrease its holdings of U.S. securities in response to new sanctions against Moscow but has no plans to shut down U.S. companies in Russia, Finance Minister Anton Siluanov said on state TV on Sunday, RIA news agency reported.
/goo.gl/3A4fY4

Donald Trump has thrown the Turkish lira under the bus; But the argument with America is not the only cause of Turkey’s economic turmoil
The Economist (Opinion)
It had been touted as a speech that would save Turkey’s beleaguered currency, the lira, from falling off a cliffóor at least soften the landing. But just as Turkey’s finance minister, Berat Albayrak, unveiled a new plan for the economy on August 10th, America’s president, Donald Trump, tweeted that he would double tariffs on Turkish steel and aluminium products. The lira plummeted further. In the course of an hour, it reached a new low of 6.80 to the dollar, marking its worst daily performance in over a decade.
/goo.gl/ghR2rZ

Losing Faith Fast, Istanbul Merchants Throw in Towel on the Lira
Firat Kozok – Bloomberg
Currency lost about half its value since Erdogan’s first plea; Shopkeepers in Istanbul bazaar say situation becoming dire
/goo.gl/8xRL6J

Turkish Isbank CEO says Turkey facing serious speculative attack
Reuters Staff
Turkey is under a speculative attack as the recent developments in the lira cannot be explained by the country’s economic fundamentals, Isbank chief executive Adnan Bali said on Monday.
/goo.gl/VhqJ94

Sebi mulls steps to prevent misuse of clients’ securities by stock brokers
The last year has also seen cases of shell accounts being used to carry out fraudulent or non-genuine trades
Press Trust of India
To strengthen the supervision of stock brokers, markets regulator Sebi is mulling additional measures to prevent misuse of client’s securities.
/goo.gl/KETg1b

Brexit

Disorder, deal or dead-end: How will Brexit play out?
Guy Faulconbridge – Reuters
The United Kingdom is due to leave the European Union on March 29, yet little is clear: There is, so far, no divorce deal, rivals to Prime Minister Theresa May are circling and some lawmakers are pushing for a rerun of the 2016 referendum.
/goo.gl/c32MWj

Companies in Brexit ‘supply shock’ as fewer EU citizens come to UK
The Guardian
Companies are suffering from a “supply shock” as fewer EU citizens come to the UK, and companies struggle to fill vacancies, according to a survey of 2,000 employers.
The Chartered Institute of Personnel and Development (CIPD) said the number of applicants per vacancy had fallen since last summer across all levels of skilled jobs, and said shortages were forcing many companies to raise wages.
/jlne.ws/2w4GsAI

May Weighs Brexit Fix that Keeps EU Rules for Longer
Tim Ross – Bloomberg
U.K. Prime Minister Theresa May is drawing up a plan to keep key European Union rules for longer after Brexit in order to break the deadlock in negotiations, a move that risks angering euroskeptics in her party.
According to people familiar with the situation, the U.K. is working on options to avoid a hard border with Ireland, the issue that’s become the biggest obstacle to an orderly divorce. One idea would effectively prolong large parts of the so-called transition phase — the two-year grace period that’s due to run from exit day on March 29 to the end of 2020 — according to one official.
/jlne.ws/2w4SCJI

Miscellaneous

Platforms Are Not Publishers
Jeff Jarvis – The Atlantic
The essential value of the internet is conversation, not contentóand journalists need to embrace it.
/goo.gl/AgDDGr

At NYC’s Iconic ’21’ Club, Deal Talks Are as Chilled as the Martinis
Patrick Clark – Bloomberg
It’s here, in the movie, that Gordon Gekko schools Bud Fox: “Buy a decent suit. You can’t come in here looking like this.”
And here, in real life, that presidents, socialites, stars and deal-makers have been rubbing elbows for nearly a century.
The place is the “21” Club, New York’s iconic power restaurant and former speakeasy — and soon, perhaps, a trophy for some 0.01 percenter.
/jlne.ws/2B7zocq

The post Online Stock Trading Has Serious Security Holes; CTAs Are Losing Money appeared first on John Lothian News (JLN).

First Read

Cinnober’s new CEO will have to consider the next move
Jim Kharouf, JLN
The news that Veronica Augustsson was out as CEO of Cinnober Financial Technologies and newcomer Peter Lenardos was in was a shock.
Augustsson, who had been CEO the past six years and with the firm since 2002, grew up with the company and reached a pinnacle few women ever reach. She did so with warmth and a friendly smile, but she also had a vision to diversify the company into a variety of sectors beyond its core business of real-time clearing, risk and surveillance systems for exchanges. After all, there is a limited number of exchanges with clearing houses – although Cinnober’s portfolio of clients is impressive.
bit.ly/2vLnzDm

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Crypto and the Law at IIT Blockchain Conference
Chuck Mackie, JLN

It used to be said that August was a quiet month for the markets – but apparently no one told that to the boosters of blockchain and cryptoassets, at least in Chicago. The month of August 2018 has no fewer than three significant conferences, each with its own special flavor, kicking off with “Block (Legal) Tech: A conference about the future of the law” on August 9. Hosted by the Law Lab at Illinois Tech Chicago-Kent College of Law and FinTEx, the event gathered experienced lawyers in the cryptoasset space and regulators for a day-long look at the past, present and future of U.S. law and regulations, particularly where it applies to cryptocurrencies.

Not being a lawyer myself, many portions of the event either had too much detail to be of general interest or consisted of pitches or positions that, frankly, may look ridiculous in the not too distant future. For both reasons, I’ll stick to the highlights of what caught my attention:

To read the rest of this story, go here

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Hits & Takes
JLN Staff

John Lothian News has learned that Steven M. Sears, a former Barron’s columnist and senior editor and now chief market strategist at StratiFi, will launch a new financial education website and media ecosystem aimed at democratizing risk management.

The site is called Occam (www.occamize.com) and is named after “Occam’s Razor,” a principle that favors simple, concise analysis. Sears will lead and edit the site, which will publish original and curated news, including action investment ideas. It will also profile successful investors and focus on helping people minimize risk and maximize returns.

In press release JLN acquired prior to its publication expected tomorrow, Sears said:

“Too much financial news, and too many stories about supposed investment opportunities, are driven by marketability, rather than by investment merits. Occam is focused on educating investors, and bringing them information that matters, and that they often cannot access, so they can make better investment decisions. We also want to create a community whose knowledge and interests sharpen each other.”

From my perspective, this is the right service at the right time by the right guy leading it. Steve Sears is a brilliant industry thought leader, and someone with his heart in the right place.~JJL

BTW, I am still recovering at home from my recent hip replacement surgery and doing better every day. This is the first day I have worked on JLN in a meaningful way since my surgery, so the post-surgery fog is starting to lift.~JJL

According to ETFGI, total assets in ETFs and ETPs in the U.S. is $3.63 trillion – a new high. As of July, there were 1,926 ETFs. In 2009, there were 778.~SD

In the wake of all the lira nuttiness, the “uptick rule” is now being applied to short selling of BIST 100 shares. The uptick rule aims to restrict short selling by only allowing short sales when “executed at a price higher than the last trading price.” Borsa Istanbul’s next shareholder meeting is August 31 – there should be some interesting conversations I’d wager.~SD

The Voice of Blockchain brings together many of the leading voices in blockchain for two days – August 24 and 25 – covering some of the most exciting developments in DLT technology, including a strong emphasis on social good, which is one of the fundamental motivations for the creation of cryptocurrencies. John Lothian readers can receive $50 off of registration with this link. ~SR

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Former Federal Prosecutor: “It’s Cheaper on the Front End”
Exchange Analytics
In a new video, produced by John Lothian Productions, former Federal Prosecutor Renato Mariotti cuts to the chase on compliance training: “It’s just cheaper on the front end to make sure that your employees are following the rules, rather than have to hire people like me on the back end to represent them and deal with an enforcement matter.” A seemingly endless parade of regulatory fines and settlements – including $3 million for violating concentration limits and $1.5 million for risk management failures, both of which are Customer Protection Rule transgressions — underscores his comment. The Customer Protection Rule (CFTC Reg. 1.11) is one of the industry’s most complex regulations, and it demands clear and concise training. Maybe that’s why a full 75% of FCMs required to administer Customer Protection Rule training use Exchange Analytics’ interactive course. EA recognizes that there’s a lot at stake for the employee and the firm. Learn more here.

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Monday’s Top Three
Yesterday’s top read stories were led by Jim Kharouf’s piece on technology costs and how firms like Deep Systems are trying to do something about it. The piece, Tech firms looking to change the technology stack, takes a look at new business models that may reshape firms’ IT structures. Second went to Gary DeWaal’s Bridging The Week, with coverage of spoofing, post-trade, wash-trades, supervision issues and cryptocurrency activities. Third was Institutional Investor’s CTAs Are Losing Money and Investors Are Fleeing

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MarketsWiki Stats
130,926,855 pages viewed; 23,234 pages; 214,520 edits
MarketsWiki Statistics

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Lead Stories

Ether Tumbles as Concern Increases That ICOs Are Cashing Out
Camila Russo and Olga Kharif – Bloomberg
Coin was the currency of the realm for blockchain startups; Projects seen cashing out to cover expenses, hedge market drop
Initial coin offerings using the Ethereum blockchain are seen as one of the main catalysts for sending Ether’s price surging last year. Now they’re being blamed for its decline.
/jlne.ws/2KQzRze

Shale boom zaps volatility in US natural gas market; Surge in production allows prices to defy hot summer demand
Gregory Meyer – FT
When US natural gas futures passed a milestone this month, they did so quietly: volatility fell to the lowest levels since the market’s debut nearly 30 years ago.
/jlne.ws/2w63iHX

The pain of Mifid II is worth the gain for investment research; Pointless research loaded charges on to investors that they found hard to identify or control
Jonathan Ford – FT
There are few more wasteful forms of expenditure than when an individual spends someone else’s money on a third party. Milton Friedman might not have been thinking about fund management when he made this observation. But he could have been.
/jlne.ws/2KR2lZu

Controversial US derivatives rules resurface at the SEC; Derivatives rules first introduced in December 2015 have come up on the SEC’s spring 2018 regulatory agenda, with a recommendation the rules be revisited.
Hayley McDowell – The Trade
Rules on the use of derivatives for registered funds in the US have been revived by US regulators three years after they were initially proposed.
/jlne.ws/2KSMycy

Renewables are primed to enter the global energy race
Sam Arie – Financial Times
In 2010, using solar power to boil your kettle would have cost you about £0.03. By 2020, according to estimates by our research team at UBS, the cost will have fallen to half a penny. By 2030, the cost could be so near to zero it will effectively be free.
This is great news for the planet, and probably also for the economy. Abundant, cheap, clean power can be put to many uses ó not just making tea.
But the same simple truthó that renewables could soon be cheaper than all the alternatives ó is contributing to a wave of corporate action in the energy sector.
/on.ft.com/2P64mV8

Cinnober confirms CEO departure; Veronica Augustsson has worked at Cinnober for 16 years, but has been replaced by recently appointed CFO Peter Lenardos.
Hayley McDowell – The Trade
Exchange and clearing technology provider Cinnober has lost its chief executive officer, who has worked with the company for the past 16 years.
/jlne.ws/2KRD41w

****Cinnober release on the moves here.

Meet the German Fintech That’s Now Worth More Than Deutsche Bank
Geoffrey Smith – Bloomberg
A payments provider that gets 5 percent as much revenue as Deutsche Bank AG is now worth more than the German lender deemed by regulators to be one of the world’s most important banks.
/jlne.ws/2KQyQXW

Turkish business feels the pain of currency crisis; Lira’s tumble hits companies that borrowed in euros and dollars for years
Laura Pitel in Istanbul and Martin Arnold – FT
It has been an excruciating few months for Turkey’s normally hard-charging corporate sector. But every day now seems to become more difficult.
/jlne.ws/2KQSrqO

Inside chat app Symphony’s battle to break into a $28 billion Wall Street market – and avoid becoming Bloomberg roadkill
Oscar Williams-Grut – Business Insider Prime
Major Wall Street banks like Goldman Sachs and JPMorgan have invested almost $300 million in Symphony, a startup building encrypted, cloud-based communication tools. Google is also an investor. Almost four years into the project, Symphony has over 300,000 users.
But there are questions around usage, partnerships, and whether it’s really having an effect on Bloomberg.
/jlne.ws/2vHG6R1

Euronext announces acquisition of additional interest in FastMatch
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced the acquisition of approximately 8% of additional interest in FastMatch, a global FX spot market operator, operating as a Euronext company since August 2017. In combination with the stake in the Company that Euronext acquired in August 2017, Euronext now owns an approximate 97.3% interest in FastMatch.
/jlne.ws/2weoImD

Fastmatch Founder Sues Euronext for Unfair Dismissal; June termination of founder and ex-CEO Galinov was allegedly “a Machiavellian scheme”
Victor Golovtchenko – Finance Magnates
The founder and former CEO of Fastmatch, Dmitri Galinov has filed a lawsuit against the company and Euronext. The move comes a touch over a year after the eFX trading venue got acquired by the Amsterdam-headquartered global exchange giant. https://goo.gl/KkJdPkfastmatch

GAM announces liquidation of suspended ARBFs
Beverly Chandler – Hedgeweek
GAM Investments has announced that all subscriptions and redemptions in its CHF7.3 billion unconstrained/absolute return bond funds (ARBF) have been suspended as of 31 July 2018, following redemption requests of over 10 per cent since the suspension of investment director Tim Haywood (pictured).
The high level of requests led to the firm using its ‘redemption gates’ – devices designed to prevent a fund’s collapse during a stress event, more usually caused by extreme market conditions.
bit.ly/2P62XOc

****Financial Times has Was GAM right to block investors taking money out of its funds?

Musk says Silver Lake, Goldman advising on taking Tesla private
Supantha Mukherjee, Greg Roumeliotis – Reuters
Tesla Inc (TSLA.O) Chief Executive Elon Musk tweeted on Monday that he was working with buyout firm Silver Lake and investment bank Goldman Sachs Group Inc (GS.N) as financial advisers on his plan to take the U.S. electric car maker private.
/goo.gl/cGRqHD

Elon Musk’s Vast Oil Conspiracy Ends With Saudi Billions; The Tesla CEO spent years warning of sabotage by oil interests. But nobody is more crude than his newest mega investor.
Tom Randall – Bloomberg
Elon Musk has always hated the fossil-fuel industry. His stated mission for Tesla Inc. is to hasten its demise, and more than once he’s blamed the “unrelenting and enormous” power of oil interests for sabotaging his efforts. But now, in his bid to take Tesla private, Musk is courting billions of oil dollars.
/jlne.ws/2KPXecd

Emerging markets need Turkey to deliver a circuit breaker; Inadequate policy response from Ankara is inflicting damage on other countries
Mohamed El-Erian – FT
The temptation for experienced emerging market investors is to respond to the Turkey-induced sell-off by using a game plan that has worked for many years. But before buying baskets of EM bonds and currencies, an important fact needs absorbing: Turkey’s policy response has so far had little resemblance to one that typically acts as a circuit breaker to the risk of contagion to other markets.
/jlne.ws/2w84Dhx

Chinese regional investment arm in landmark bond default; Xinjiang holding group misses debt payment signalling end of implicit state bailout
Gabriel Wildau in Shanghai – FT
An investment arm of western China’s Xinjiang region has failed to repay a Rmb500m ($73m) bond, marking the first public default by a Chinese government-linked holding company.
/jlne.ws/2KQDULW

Exchanges, OTC and Clearing

NYSE is putting its own interest ahead of investors’
David Swensen, Chief Investment Officer, Yale University – Financial Times
Until 2006, the New York Stock Exchange operated as a not-for-profit enterprise that focused on listing companies and facilitating stock trading. Since becoming profit driven, the Big Board has prioritised services to high-frequency traders in ways that I believe damage market integrity.
/jlne.ws/2P5e4Ha

Euronext increases FastMatch stake amid lawsuit; Euronext has upped its stake in FastMatch as former chief executive files lawsuit claiming he was unfairly dismissed.
Hayley McDowell – The Trade
Pan-European exchange Euronext has increased its stake in FastMatch after facing a lawsuit from Dmitri Galinov, former chief executive of the FX spot market operator.
/jlne.ws/2KRCocu

ISA Approves Leveraged Trading on Tel Aviv Stock Exchange
Finance Magnates
In the coming months, Israeli investors will be able to make speculative investments on the Tel Aviv Stock Exchange under the jurisdiction of the Israel Securities Agency (ISA), according to local news outlet The Marker.
According to the report, customers will be able to bet on CFDs at leverage levels of up to 20:1 and foreign exchange at levels of up to 100:1.
bit.ly/2vGPXqq

American Financial Exchange (AFX) Announces New Daily and Weekly Record Transaction Volumes
AFX press release
American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American financial institutions, announced new daily and weekly record transaction volumes. The Exchange had a record day of $1.096 billion on Thursday, August 9; and $5.096 billion for the entire week of August 6. The volumes are outstanding across all products. AFX facilitates the determination of AmeriborÆ, a transaction-based interest rate benchmark for financial institutions via its electronic trading platform. AFX has transacted more than $185 billion cumulative since it opened in December 2015.

PanXchange Names Lashnits VP of Data, Ops
Amelia Axelsen – WatersTechnology
Lashnits will work with PanXChange CEO Julie Lerner to launch an independent data division at PanXchange.
bit.ly/2MGP1bS

****PanXchange on the hire here and some background on Lashnits from 2016 here via The Title Connection. If you’re unfamiliar with PanXchange, see JLN’s video with Lerner from FIA Boca.

Taxation of U.S. derivatives (Section 871 (m) IRC) and migration to new product group
Eurex
Under Section 871 (m) Internal Revenue Code (IRC), withholding taxes are being levied on “dividend equivalent amounts” (DEAs) paid or deemed paid pursuant to derivative contracts that reference United States (U.S.) equity security(ies).
/jlne.ws/2w9hn7L

Factor investing – just a fad? (part 1)
Eurex
“On the contrary,” says Jan-Carl Plagge, Head of Applied Research at STOXX Ltd. “Factor investing is here to stay.” Reason enough to deal with the topic in a series of articles. Part one asks how factor investing has developed, why it is now an integral part of portfolio management, and what contribution Eurex’ Factor Futures are making here.
/jlne.ws/2KQV77Q

Coincapital receives license for fully automated STOXX Blockchain Index
Deutsche Boerse Group
STOXX Ltd., the operator of Deutsche Boerse Group’s index business and global provider of innovative tradable index concepts, has licensed the STOXX Yewno Developed Markets Blockchain Index to the Canadian company Coin Capital Investment Management Inc. ( Coincapital) from Toronto.
/jlne.ws/2KQUNpD

Deutsche Boerse launches seminar series on stock market knowledge; Basic and advanced seminars “Your way to the stock exchange” take place from September to December 2018 in Eschborn
Deutsche Boerse Group
From 10 September, Deutsche Boerse will again hold evening seminars for private investors at its corporate headquarters in Eschborn through its Capital Markets Academy. It offers basic seminars for beginners as well as seven advanced seminars.
/jlne.ws/2w4wv6h

Fintech

Fintech Crowd Dives Into Subprime Credit-Card Lending
AnnaMaria Andriotis and Peter Rudegeair – WSJ
Financial-technology startups are stepping into a void increasingly left by credit-card-issuing banks: lending to customers with poor credit histories.
/on.wsj.com/2w6g9tL

Call for interest: Synchronised settlement in central bank money
Bank of England
The Bank of England’s Real-Time Gross Settlement (RTGS) service lies at the heart of delivering the Bank’s mission for monetary and financial stability. RTGS is used to provide safe final settlement in central bank money for over £600 billion of transactions a day, spanning the vast majority of payments in the UK economy – from salaries to company invoices, from car purchases to coffee sales, from pensions to investment flows.
/goo.gl/sgJazN

IBM Wallops Groupon With a Vintage Patent; Turns out that some early web patents get better with time.
Joe Nocera – Bloomberg
Remember Prodigy, the online service that flourished in the 1990s before flaming out a decade later? Turns out, IBM was one of its original partners and owns Prodigy patents on some of the foundations of e-commerce. You might think they wouldn’t be worth much by now, but you’d be wrong. A few years ago, IBM claimed Groupon and Priceline Group Inc. were violating some of them and demanded millions. Priceline Group, now known as Booking Holdings Inc., settled for $34 million. Groupon decided to fight it out in court.
/jlne.ws/2w81tdF

Bank of China to Raise Fintech Spending, Pursue Blockchain Projects
Angus Loten – WSJ
The Bank of China’s chief information officer recently shared details on the bank’s blockchain efforts as he unveiled plans to boost fintech spending, according to local news reports.
Liu Quiwan said the state-run commercial bank, which is distinct from the central bank of China, will increase investing in a range of fintech tools to more than 1% of its annual operating budget, though the exact amount was unclear, China-based The Paper reported last week.
/on.wsj.com/2KTlPwR

IdentityMind: The FinTech Build vs. Buy Debate
PYMNTS.com
Build vs. buy. The eternal debate. No, not just in homeownership, but in business, too – and especially when it comes to upstart FinTech firms grappling with an ever-onerous compliance landscape.
Here’s the drill: Young firm gets off the ground, with fundraising or bootstrapping in hand. Young firm gets going, with staffers wearing various hats. Young firm – if it is lucky – gets some real traction, where revenues roll in.
And there’s the rub. When it comes to transaction monitoring, there’s only so much the young firm can do with what’s in hand, and in the coffers, and who’s behind the desk.
bit.ly/2w5cGMg

NICE and Cloud9 Technologies partner for voice trading platform; NICE Actimize and Cloud9 Technologies have combined their services for a new voice trading platform.
Hayley McDowell – The Trade
NICE Actimize and Cloud9 Technologies have teamed up to combine their services for a compliance recording and cloud-based voice trading platform.
/jlne.ws/2KRppr9

Cryptocurrencies

Winklevoss Undeterred by Wall Street’s Slow Embrace of Crypto
Olga Kharif – Bloomberg
Gemini crypto exchange operators dealt a blow on ETF proposal; Brothers focusing on increasing individual investor business
Tyler and Cameron Winklevoss aren’t licking their wounds after the Securities and Exchange Commission rejected their proposal for a Bitcoin-based exchange-traded fund last week for a second time.
/jlne.ws/2wbrlWi

Don’t Believe The Institutional Crypto Hype
Themis Trading Blog
Barely a day goes by when we don’t see an article that claims there will soon be a boom in institutional demand for cryptocurrencies. CNBC recently ran an article that proclaimed “Goldman Sachs-backed Circle sees boom in crypto demand from institutional investors, despite bear market” In addition to the media hype, there continues to be a litany of Wall Street and regulatory veterans that are flocking to crypto. The latest announcement was that former SEC Chairman Arthur Levitt has joined the board of Ominex , a crypto trading platform.
/goo.gl/9A6QVG

Carats.io Signs Partnership with World’s Second Biggest Diamond Exchange
Simon Golstein – Finance Magnates
Carats.io, an Israeli blockchain startup, has signed a memorandum of understanding with IDEX, an international diamond trading platform.
/goo.gl/9MspoK

Millennials, Beware of Speculating in Cryptocurrency!
Deborah Lynn Blumberg – Thirtyk.com
A word of to the wise for you young investors looking to profit from ongoing volatility in the cryptocurrency market: That strategy comes with serious financial risk.
Yes, that warning could apply to investors of any age, but it’s worth emphasizing to millennials who are more likely to think a volatile financial market offers a quick path to profits, according to a recently released survey on investing by the American Institute of CPAs (AICPA), the industry trade group for professional accountants.
bit.ly/2KNOiUE

Bitcoin [BTC]’s narrative is still unclear says the cryptocurrency advisor
AMB Crypto
On 13th August, in an interview with CNBC’s Fast Money, Meltem Demirrors, the Chief Strategy Officer at CoinShares said, the narrative of Bitcoin [BTC] is still unclear. She believes that the cryptocurrency space will see more traction and the Bitcoin bubble has burst.
bit.ly/2w5cg8E

Only 8% of Americans Invest in Cryptocurrencies but Younger Generation More Open to the Idea
Mark Alcala – [blokt]
It appears that there is just no stopping the adoption of cryptocurrencies these days. Even institutional investors are joining the fray, while crypto ATMs might soon become a common sight in more cities in the near future if the current installation rate of seven ATMs per day continues. Despite this, a recent report has discovered that crypto ownership in America is just 8 percent.
bit.ly/2KTdFo2

Politics

White House adviser Hassett: U.S. monitoring Turkey situation ‘very closely’
Reuters
White House economic adviser Kevin Hassett said on Monday the Trump administration is monitoring the financial situation in Turkey “very closely” after the Turkish currency fell to a record low against the U.S. dollar on Monday.
/reut.rs/2MGCN2R

****Hassett has also been monitoring the Dow since 1999 – still looking for that key 36k level…

Manafort Turned to Kushner in Bid to Get Banker a Trump Job
David Voreacos and Neil Weinberg – Bloomberg
Stephen Calk sought U.S. Army secretary job, treasury post; Email request surfaced at Manafort fraud trial on Monday
Paul Manafort turned to Jared Kushner for help in an attempt to secure a Trump administration job for a Chicago banker at the center of Manafort’s fraud trial.
/jlne.ws/2w6cf4i

Regulation

FIA And FIA PTG Urge CFTC To Retain Current De Minimis Level For Swap Dealer Definition
FIA
FIA and the FIA Principal Traders Group (together, FIA) today urged the Commodity Futures Trading Commission (CFTC) to retain the current $8 billion de minimis threshold for swap dealer registration and to modify the calculation methodology to better align it with the goals of a well-regulated derivatives market. Among the modifications, FIA supports efforts to except exchange-traded and/or cleared swaps, fina
/goo.gl/AZhwDz

Senior Bloomberg staff leave after internal probe
Samuel Agini – Financial News London
Three of Bloomberg’s electronic trading team have left the financial data provider after an internal probe into their handling of third-party information, which was prompted by a whistleblower.
/jlne.ws/2vCSgui

‘NSE’s May 24 trading errors due to tech glitch’; SEBI panel submits report, asks providers of NOW platform to explain the issue
Palak Shah – The Hindu BusinessLine
SEBI’s Technical Advisory Committee (TAC) has observed that NOW (NEAT on Web), the NSE’s online equity trading platform that had witnessed a ‘tech glitch’ on May 24, had instead of replicating the trade orders, multiplied them, following a system re-boot, sources told BusinessLine. The committee submitted its report earlier this month.
/goo.gl/yQePiv

Sebi proposes changes to consent mechanism for settling market violations
Business Standard News
An expert panel formed by Sebi on Monday proposed sweeping changes to the consent mechanism for settling market violations.
/goo.gl/o7aYwa

Musk’s Tweets on Tesla Buyout Face Scrutiny After Saudi Disclosure; CEO’s statement describes funding that looks less certain than first described
By Dave Michaels and Michael Rapoport – WSJ
Tesla Inc. Chief Executive Elon Musk’s revelations that he has talked to Saudi Arabia’s sovereign-wealth fund to provide the cash to take the company private gives regulators more ammunition to fault how he first disclosed it, securities law experts said.
/jlne.ws/2w1du4s

FINRA Announces Nomination Process to Fill Upcoming Small Firm Vacancy on the National Adjudicatory Council; Petitions for Candidacy Due: September 26, 2018
FINRA
The purpose of this Election Notice is to announce the nomination process to fill one Small Firm vacancy on the National Adjudicatory Council (NAC).
/jlne.ws/2KR3IHC

FINRA Reminds Alternative Trading Systems of Their Obligations to Supervise Activity on Their Platforms
FINRA
FINRA is issuing this Notice to remind Alternative Trading Systems (ATSs) of their supervision obligations. As registered broker-dealers and FINRA members, ATSsólike other broker-dealer trading platformsóare required to maintain supervisory systems that are reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules, including, for example, rules on disruptive or manipulative quoting and trading activity.
/jlne.ws/2w64Em1

Regulators warn public of pension scammer tactics as victims report losing an average of £91,000 in 2017
UK FCA
A new campaign to tackle pension scams launches today as the latest figures reveal that victims of pension scammers lost an average of £91,000 each in 2017.
/jlne.ws/2KNTgRi

Investing and Trading

Turkey contagion fears are overblown
Colby Smith – FT Alphaville
With the lira slipping as much as 11 per cent against the dollar on Monday, and President Recep Tayyip Erdogan warning that those spreading speculation on the banks or currency will “pay”, investors are beginning to worry about contagion risks. We’ve seen some tremors already. Emerging-market currencies are falling sharply. The South African Rand, the most over-traded currency in the world and therefore the best proxy for EM risk according to Charlie Robertson of Renaissance Capital, recorded its steepest drop against the dollar in two years before rebounding slightly. And Indonesia’s rupiah is hovering near three-year lows. But forex desks are overreacting.
/goo.gl/Sg2q5d

Why gold tell us this EM crisis is all about the dollar
John Authers – Financial Times
When attempting to cure contagion, it is necessary to tell the difference between symptoms and causes. And it looks as though Turkey’s financial crisis is only a very severe symptom of the contagion that is moving through emerging market currencies. The underlying cause appears to be the strong US dollar.
/on.ft.com/2vEJvQE

Copper Vulnerable to Supply Shock as Giant Mine Faces Strike
Susanne Barton and Laura Millan Lombrana – Bloomberg
Hedge funds boosted bearish bets as trade war clouds outlook; Traders were net-long going into 44-day strike last year
Copper bears could get caught wrong-footed as a strike looms at the world’s biggest mine.
/bloom.bg/2B7r5Ny

That sinking feeling? Sterling traders prepare for Brexit meltdown
Tommy Wilkes, Ritvik Carvalho and Tom Finn – Reuters
Having sunk to 13-month lows, sterling could fall by up to another 10 percent in the coming months should Britain crash out of the European Union without a deal on future trade ties, luring more speculators to bet against the currency.
/reut.rs/2OZ95bb

Currency Markets Are ‘Hidden Thorns’ for Stocks in Full Bloom
Yakob Peterseil – Bloomberg
Global FX volatility gauge in biggest one-day move since 2016; ‘Matter of time’ before it spills into U.S. stocks: Maley
Currency markets are sounding alarms that U.S. stocks seem hellbent on ignoring.= As Turkey’s lira crisis batters emerging-market currencies while trade tensions intensify and the yuan continues to weaken, a JPMorgan Chase & Co. index of exchange-rate volatility just experienced its biggest surge since 2016’s Brexit vote. The gauge now sits at its highest since February.
/jlne.ws/2w9eW57

Institutions

GAIN Capital Sees Yet Another Significant Drop in Trading Volumes
Aziz Abdel-Qader – Finance Magnates
GAIN Capital Holdings, Inc. (NYSE: GCAP) has just reported its aggregated trading volumes for July 2018. The group’s most recent retail volumes took another step back during the month, continuing with a consecutive string of losses since ending the first quarter on a more positive note.
/goo.gl/nHDxpg

Legg Mason Withdrawals Quicken in Latest Sign of Mutual-Fund Woes
TheStreet
For the U.S. mutual-fund industry these days, it’s insult after injury, and then another injury.
The latest indication of the deterioration came from Legg Mason Inc. (LM – Get Report) , which reported last week that investors pulled $3 billion from its long-term mutual funds in July, along with another $1.6 billion from money-market funds and other liquidity products. The outflows added to a combined $81.4 billion pulled from the Baltimore-based money manager since the end of the fiscal year ended in March 2015.
/goo.gl/TDxikc

Banks Finally Start to Pay Their Depositors
Aaron Back – WSJ
The grim decade in which savers earned near nothing on their bank deposits is ending. That is good news for consumers and bad news for some banks.
/on.wsj.com/2P3d6ex

Top European banks shed $32 billion in op risk
Alessandro Aimone – Risk.net
Operational risk-weighted assets across European banks dropped an aggregate $32 billion over the three months to June, with firms shedding an average of 5% quarter to quarter.
/goo.gl/MYB17j

In This Never-Ending Lehman Short, $170,000 Is Still on the Table; Whitney Tilson made millions when Lehman went bust a decade ago, but he didn’t quite close the deal
Lisa Pham – Bloomberg
It’s been a decade since former New York hedge fund manager Whitney Tilson made millions by betting against Lehman Brothers before it collapsed. But he’s still frustrated by the profit he can’t get his hands on.
/jlne.ws/2KWDHqE

Fidelity rolls out zero-fee funds. What does that mean for you?
Jonathan Clements – MarketWatch
We have finally hit rock-bottom. Fidelity Investments recently announced that it was introducing two index funds with zero annual expenses, while also slashing expenses on its other index funds and dropping the required minimum investment on all funds, both actively managed and indexed.
/on.mktw.net/2P5y2li

Kevin Durant, Will Smith Top the Lineup for a New Venture-Capital Fund for Black Investors
Yoree Koh – WSJ
Silicon Valley stalwart Andreessen Horowitz is launching a novel effort to boost diversity in tech: an exclusive new fund targeted at black celebrities, athletes and media figures.
/on.wsj.com/2vH8G5c

Credit Suisse Is Splitting Its Main Wealth Unit Into 7 Regions
Jan-Henrik Foerster and Patrick Winters – Bloomberg
Credit Suisse is said to be giving more autonomy to regions; Announcement on split could come this week: people familiar
About six months after UBS Group AG decided to merge its wealth management businesses into one super-unit, rival Credit Suisse Group AG is said to be taking a different approach.
/jlne.ws/2KRvPXd

Regions

Investor Lessons From Turkey’s Crash to Earth
James Mackintosh – WSJ
The collapse of Turkey’s currency isn’t only a local catastrophe created by kooky economic policies and by picking a fight with the U.S. It is also a warning to investors in other emerging markets. The long-running bull case of improving economic governance is less solid than they think.
/on.wsj.com/2MIvfNn

Erdogan vows action against ‘economic terrorists’ over lira plunge
Tuvan Gumrukcu – Reuters
President Tayyip Erdogan on Monday accused “economic terrorists” of plotting to harm Turkey by spreading false reports and said they would face the full force of the law, as authorities launched investigations of those suspected of involvement.
/reut.rs/2B9i1rq

Argentina Central Bank Unexpectedly Hikes Key Rate to 45%
Patrick gillespie – Bloomberg
Pledges to hold rate at that level until at least October; Cancels daily dollar auction, unveils plan for Lebac reduction
Argentina’s central bank unexpectedly hiked its key rate and unveiled a plan to gradually eliminate the stock of its short-term notes as the peso slumped to a record low amid a broad selloff of developing nation assets.
/bloom.bg/2MKceKe

Why Saudi Arabia Cut July Oil Production
Tsvetana Paraskova – OilPrice.com
Despite its pledge to boost crude oil supply to offset supply disruptions, Saudi Arabia’s oil production in July slipped by 52,800 bpd from June to average 10.387 million bpd last month, according to the secondary sources in OPEC’s closely watched Monthly Oil Market Report published on Monday.
bit.ly/2B3lVCh

Rupee hits record low, mild RBI intervention seen
Suvashree Choudhury – Reuters
The rupee on Monday touched an all-time low of 69.62 per dollar in early trade, tracking broader weakness in other emerging market currencies on concerns of a spill-over from a crisis-hit Turkey.
/jlne.ws/2P5ciWI

India Looks to Curb U.S. Tech Giants’ Power
Newley Purnell – WSJ
Indian policy makers are looking for ways to tamp down American tech behemoths, a shift that could crimp growth potential in one of the biggest remaining open markets for their expansion.
India wants to slap new rules on Amazon.com Inc., Apple Inc., Alphabet Inc.’s Google, Facebook Inc. and other firms, using a page from China’s playbook to take control of its citizens’ data and shelter homegrown startups.
/on.wsj.com/2B7MhmH

Soviet Collapse Echoes in China’s Belt and Road; Grand investment plans for unproductive regions have caused empires to founder before.
David Fickling – Bloomberg
What causes empires to fall? According to one influential view, it’s ultimately a question of investment. Great powers are the nations that best harness their economic potential to build up military strength. When they become overextended, the splurge of spending to sustain a strategic edge leaves more productive parts of the economy starved of capital, leading to inevitable decline.
/jlne.ws/2KQP5UJ

Turkey Banks Get Respite on Liquidity Moves, Tight Policy Calls
Asli Kandemir – Bloomberg
Moves were needed but “fire’s not out yet,” Garanti CEO says; Foreign investors bought Turkey ETFs as banks plunged Monday
Turkish policy makers’ steps to support the financial system helped bolster investor confidence and gave the nation’s financial sector a much-needed breather on Tuesday.
/jlne.ws/2KRvKmn

Why Saudi Arabia’s oil output figures are drawing scrutiny; A drop in the country’s production in July raises questions about what’s really happening
David Sheppard – FT
Saudi Arabia’s oil production is arguably the most important number in the industry, determining whether the market will be under- or oversupplied. It is closely tracked by a host of actors from oil traders to the White House, so when it throws up surprises it quickly attracts attention.
/jlne.ws/2w4v1sJ

‘One Crop in Seven Years’: Drought Plagues Australia’s Farmers; Lengthy dry spell threatens domestic livelihoods and stands to worsen a global grain shortfall and lower beef prices; hungry kangaroos hit the cities
Rob Taylor – WSJ
A severe drought has gripped an area of Australia more than twice the size of Texas, turning normally fertile crop areas into dust bowls, draining water reserves and leaving wine-producing regions parched. Hungry kangaroos are turning up in cities.
/jlne.ws/2KQ5gln

Brexit

Asset managers grind forward with crash-out Brexit plans
David Ricketts and Lucy McNulty – Financial News London
Time is running out for asset managers, as the increasing threat that the UK will crash out of the European Union in March 2019 without a deal is forcing some to lean on worst-case contingency plans.
/goo.gl/ZrvYkU

Rees-Mogg Tories draw up their own blueprint for a hard Brexit
Oliver Wright- The Times
Conservative Brexiteers plan to challenge Theresa May directly by publishing their own “positive” blueprint for a hard Brexit.
/goo.gl/HSbE5Y

ONS data shows EU workers leaving Britain because of Brexit
Will Martin – Business Insider
Evidence is mounting that the United Kingdom’s impending exit from the European Union is causing workers from EU countries to leave the country and return home.
On Tuesday, the Office for National Statistics released its monthly snapshot of the UK jobs market, looking at the overall rate of employment and unemployment in the UK, as well as the growth of wages for workers.
/read.bi/2w5Em3q

Miscellaneous

Business Book of the Year 2018 – the longlist
Financial Times
The ups and downs of capitalism – past, present and future – are addressed by many of the books in contention for this year’s Financial Times and McKinsey Business Book of the Year Award.
/jlne.ws/2P4nDWU

Those Long Security Lines at Airports? They May Move Quicker Soon
Zach Wichter – NY Times
There is a glimmer of hope that the frustrating, slow airport security experience will get a little smoother over the next few years.
In a partnership with American Airlines, the Transportation Security Administration introduced a new kind of machine last month to screen carry-on bags in Terminal 8 at Kennedy International Airport in New York.
/nyti.ms/2P6tnPN

Exact Spot Where The First Million-Share Block Of IBM Traded On The NYSE
John Navin – Forbes
My idiot classmate was standing on the very spot where we’d been told that a single order of a million shares of International Business Machine had traded earlier that week. He was pretending to be awed and humbled by the powerful, once-in-a-lifetime vibe, but we could tell he was faking it. We were on the floor of the New York Stock Exchange, a first for all of us out-of-towners in this brokerage training class and, one by one, we took turns standing on the very spot where a million-share block of IBM had “changed hands” as they used to put it. A massive bank of computer screens and telephones more or less marked the location.
/goo.gl/kYSuk3

****Reflections from training at a big brokerage back in the day.

The post Ether Tumbles Amid ICO Concerns; Shale boom zaps volatility in US nat gas appeared first on John Lothian News (JLN).

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Hits & Takes
JLN Staff

Don’t miss the profile of Stacey Cunningham, the first female president of the New York Stock Exchange, in Time Magazine.~JJL

Longtime options industry executive Kevin L. Murphy has written a new book, The Three Rooms, which focuses on helping increase awareness of your own thoughts and emotions. Can’t wait to read it.~JK

Joe Lubin, Ethereum’s cofounder, was on Bloomberg talking about the future of transaction speeds and other things – the story is in the newsletter. But if you want some hot gossip on Lubin and other Ethereum insiders, check out the Mechanical Markets blog post – Related Party Transactions In ETH? ~SD

Those Interested in learning more about NFA opportunities can stop by and visit with them from 4:30 – 5:30 p.m. during the NYU Stern School of Business hashtag, #MeetTheFirms, event on August 29th.~JJL

The book, “Billion Dollar Whale” by Tom Wright and Bradley Hope, has made the longlist for FT Business Book of the Year.~JJL

Mayra Rodriguez Valladares first piece as a contributor to Forbes is titled “High Time To Stop The Dodd-Frank Blame Game.”~JJL

Robert Russell, CEO of Minerva Capital Markets, announced via LinkedIn the launch of the first ever BSc (Honours) Financial Trading and Investment Management degree, a collaboration between Sheffield Hallam University and Minerva Capital Markets.~JJL

Richard Sandor sat down with Bart Chilton to discuss Libor, Ameribor and bank standards.~JJL

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Trade War Costs to Consumers, Companies and Nations
Erik Norland – CME Group
The level of U.S. tariffs on Chinese products and the number of goods they cover are constantly changing as the trade dispute between the world’s two largest economies escalate. To help investors evaluate the possible macroeconomic impact from the trade war, we put together a back-of-the-envelope economic analysis (Figure 1). Like any similar approach, it contains many simplifying assumptions and will not fully capture the complex reality of the dispute’s economic impact, but it will provide a framework for evaluating the effects on inflation, corporate profits, Federal revenues and Chinese GDP. As is the case with monetary and fiscal policies and currency movements etc., there are many second and third order possibilities to consider.
/goo.gl/4fBQdU

****This piece has a cool “Back of the Envelope Tariff Impact Calculator” that estimates the impact of “x” percent tariff on U.S. CPI, GDP permutations, etc.

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MWE World of Opportunity – From Corporate Red Tape to Liberated Entrepreneur
JohnLothianNews.com
“Growth … really comes from change. So if you look at when I was in the fixed income business and people were using HP calculators to interpolate their yields – if we’d stuck with that, it would not have driven us forward.”

Ralf Roth, CEO of Quantitative Brokers, has seen colleagues try to meticulously plan for their future or that of their children only to realize that nothing can go exactly as planned. In this video from MarketsWiki Education’s New York event, Roth talks about how he inadvertently ended up meeting his goal of working for a bank, the location of the “i” in team, and the positive side of change.

Watch the video here »

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State sues Trump Tower over Chicago River pollution
Danny Ecker – Crain’s Chicago Business
The state of Illinois is taking the Trump Organization to court, alleging it is polluting the Chicago River without a permit.
A lawsuit filed yesterday by the Illinois attorney general’s office alleges that the Trump International Hotel & Tower’s state permit to discharge a limited amount of pollutant into the river has lapsed, but that it has continued to operate for almost a year without the state’s permission to run that water management system, known as a cooling water intake structure.
/goo.gl/L4zEHC

****This comes one week after the 14-year anniversary of a Dave Matthews Band tour bus emptying its septic tank into the Chicago River, dousing a tour boat with human waste while the bus was crossing the Kinzie Street bridge. In case you forgot. Speaking of waste, Visual Capitalist has a slick infographic with stats on how different parts of the world view waste. ~SD

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With Felix Salmon, Axios Continues Its Push to Commandeer the Bloomberg Set
Joe Pomeo – Vanity Fair
Axios is hiring Felix Salmon and Courtenay Brown to spearhead its foray into coverage of the public markets.
/goo.gl/uDcS1E

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Guys Named Dave Equal Number of Women in FTSE 100 CEO Roles
Amy Thomson – Bloomberg
The chief executive officers of the largest London-listed companies are as likely to be named Dave as they are to be female.
Just seven of the FTSE 100 companies’ CEOs are women, equal to the number of men named Dave or David who lead firms on the index, according to a report released Wednesday by the CIPD and the High Pay Centre. CEOs named Steve and Stephen also match up, with seven represented.
/bloom.bg/2MxNnNb

****Yeah, but what about “Jeffs”? That is what I want to know.~JB

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Tuesday’s Top Three
The top read story of the day yesterday was Jim Kharouf’s column on Peter Lenardos, in Cinnober’s new CEO will have to consider the next move. Second, was Bloomberg’s piece Ether Tumbles as Concern Increases That ICOs Are Cashing Out. Third was the FT’s article NYSE is putting its own interest ahead of investors’

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MarketsWiki Stats
130,926,855 pages viewed; 23,234 pages; 214,520 edits
MarketsWiki Statistics

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Lead Stories

R.J. O’Brien Names Stephen Brodsky to New Role of Chief Strategy Officer
R.J. O’Brien
Chicago-based R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced that Stephen A. Brodsky – long-time exchange, trading and capital markets executive – has just joined the firm as Chief Strategy Officer. Brodsky, also Senior Managing Director, reports to Chairman and CEO Gerald Corcoran in the newly created role.
/goo.gl/ScFVEH

Economists warn on dominance of US corporate giants; The rising grip of a small group of large companies comes under scrutiny
Sam Fleming in Washington and Brooke Fox – FT
America’s biggest companies are grabbing a swelling share of revenues across major sectors while workers see pedestrian wage growth, teeing up a vexed debate over whether public policy needs to respond.
/jlne.ws/2OCkIDE

On Turkey, Trump Turns Trade War to Financial War; U.S. tariffs intensify pressure on the Turkish lira, raising prospect of an open-ended cycle of protectionism and devaluation
Greg Ip – WSJ
Trade wars may be morphing into something more dangerous: financial wars. With Turkey facing a currency crisis, President Trump last week poured fuel on the fire by doubling tariffs on imports of its steel and aluminum to offset the effects of its weaker currency or force the country to release an American pastor. (Mr. Trump’s motive remains unclear.)
/jlne.ws/2OAifKg

AQR: Investor Worries Over Trading Costs May Be Overblown
Julie Segal – Institutional Investor
The total costs of equity trading just went down.
In a new paper, AQR principals Andrea Frazzini, Ronen Israel, and Tobias Moskowitz argue that equity trading costs are actually lower than previous academic studies have shown. What sets their findings apart from previous studies is that the authors used execution data from $1.7 trillion worth of live trades made over 19 years by AQR Capital itself. The underlying data represented trades in 21 developed markets for nearly 10,000 stocks.
bit.ly/2vKFDNZ

****Here’s a link to a PDF of the 88-page research paper. AlphaArchitect posted on the same paper – The Best Research Paper Ever Written on Trading Costs.~SD

Libor’s Heir Presumptive Prepared to Take on Bank Bond Market
Maciej Onoszko – Bloomberg
Financials or corporates may do SOFR-tied notes in months – TD; Fannie Mae, World Bank have already done deals based on SOFR
The heir presumptive to dollar Libor is gaining traction with debt issuers and banks may be ready to sell floating-rate notes linked to it within months.
/goo.gl/GHXXMZ

Cryptocurrencies’ collapse is one for the history books
Aaron Elstein – Crain’s New York Business
Early this year Crain’s called bitcoin frenzy a “textbook investment bubble.” Since then the cryptocurrency has shed most of its value. Bitcoin and its brethren are well on their way to securing their place in history with other infamous market bubbles.
/goo.gl/txDJJw

Coinbase Says It Was Signing Up 50,000 Users a Day
Olga Kharif – Bloomberg
Coinbase Inc., one of the world’s largest cryptocurrency exchanges, was signing up 50,000 new customers a day last year, Chief Executive Officer Brian Armstrong said at the Bloomberg Players Technology Summit in San Francisco.
/goo.gl/5aiVEW

Turkey’s currency steadies, but its leader wants more chaos; As the lira collapses, Erdogan announces a boycott of American electronics
The Economist
As Turkey speeds towards economic disaster, its president, Recep Tayyip Erdogan, has refused to take his foot off the accelerator. On August 14th, just as Turkey’s currency began to recover from one of its worst weeks in decades, Mr Erdogan announced a boycott of American electronic products, escalating a diplomatic crisis with his NATO ally. “If they have the iPhone, there is also Samsung on the other side,” Mr Erdogan said. “We also have our own Venus Vestel,” he added, referring to a Turkish-made smartphone brand.
/goo.gl/F3B41s

Turkish Lira Jumps as Regulator Curbs Bank Swap Transactions
Constantine Courcoulas – Bloomberg
The Turkish lira rallied after the nation’s banking regulator limited lenders’ swap transactions, a move that is likely to deter short-selling in the battered currency.
/bloom.bg/2P8QBoC

Royal Bank of Scotland pays $4.9 billion for crisis-era misconduct
Pete Schroeder – Reuters
Royal Bank of Scotland (RBS.L) will pay $4.9 billion to settle U.S. claims that it misled investors on residential mortgage-backed securities between 2005 and 2008, the U.S. Justice Department said on Tuesday.
/goo.gl/vgPfY1

Goldman Sachs Had No Mandate When Musk Tweeted
Sridhar Natarajan and Alex Barinka – Bloomberg
Silver Lake providing informal advice, not collecting fees; Conversations said to be ongoing between Goldman and Musk
Elon Musk’s announcement about his advisers might be as squishy as his funding.
/bloom.bg/2P9xJFZ

****From NYT – Elon Musk’s Effort to Take Tesla Private to Get Board Oversight.~SD

Fed is no longer worried about every market hiccup, economist Lavorgna says
MarketWatch
Perhaps lulled into a sense of complacency by a Federal Reserve that previously had seemed to attend to the market’s every hiccup, investors seem unprepared for a central bank that now thinks more hawkish medicine is in order, a veteran Fed watcher said Tuesday.
/on.mktw.net/2vH3qi2

Global Agreements Bring New Life to Voluntary Carbon Markets
Forest Trends
Voluntary carbon markets are heating up as companies and consumers are taking action on climate change. After years of at-times sluggish activity, Forest Trends’ Ecosystem Marketplace’s new report called Voluntary Carbon Market Insights: 2018 Outlook and First-Quarter Trends finds that supply and demand for voluntary carbon markets hit record-highs in 2017, at 62.7 million metric tonnes of greenhouse gas emissions (MtCO2e) and 42.8 MtCO2e, respectively.
bit.ly/2OCsrSh

Exchanges, OTC and Clearing

Nasdaq, FINRA to boost reporting fees for dark pool trades
John McCrank – Reuters
Nasdaq Inc (NDAQ.O) and a Wall Street watchdog will raise fees for private stock trading platforms, such as “dark pools,” that report trade executions to a Nasdaq-run entity, in response to higher operational costs and off-exchange trading volumes, according to a recent regulatory filing.
/reut.rs/2vLjjDP

HKEX Appoints Group Chief Communications Officer
HKEX
Hong Kong Exchanges and Clearing Limited (HKEX), today (Wednesday) announced that it has appointed Tori Cowley as its Group Chief Communications Officer. She will relocate from London to Hong Kong and will assume her role in late September 2018.
/jlne.ws/2BjQsM2

Bitcoin ETF Faces Moving Finish Line as Cboe Aims to Be First
Rob Urban and Lily Katz – Bloomberg
SEC delays decision on one fund after rejecting another; Regulators are concerned about market manipulation, liquidity
/goo.gl/cnKt7W

Increasing order book share in Bund options
Eurex
In HY1 2018, average daily volume in Bund options was ca. 192,000 contracts, an increase of more than 15 percent versus 2017. The screen to block volume share for Bund options moved from 30 percent in 2017 to 40 percent in HY1 2018. While higher volumes in the fall-out of the Italian elections were mostly conducted as block trades, screen trading was more strongly driven by an increase in option strategy trading.
/jlne.ws/2BfruO4

Jamaica Stock Exchange Selects Canadian Fintech Company Blockstation to Deliver Cryptocurrency Trading to Investors
Globe Newswire
The Jamaica Stock Exchange (JSE) today announced it has selected Toronto-based Fintech company Blockstation to enable investors to trade blockchain tokens within a recognized and secure regulatory framework. Consequently, the JSE has signed an MOU paving the way for further collaboration.
/goo.gl/zJxpDs

Settlement giant Euroclear considers tender offers, IPO
Financial News
Euroclear has hired investment bankers at Moelis to help it explore alternatives to share buybacks
Euroclear, which is responsible for settling trillions of dollars worth of financial transactions a year, has not ruled out a move to list its shares publicly for the first time.
/jlne.ws/2Ozkc9A

Fintech

‘Fintechs’ sound cautious note on offer of U.S. bank charter
Pete Schroeder and Michelle Price – Reuters
Financial technology companies that lend online are sounding a cautious note on a U.S. banking regulator’s plan to offer them special federal charters because of concerns over legal challenges and requirements that are more onerous than expected.
/reut.rs/2vGlkRE

Charles River Forms Business Alliance with Broadridge to Enable Clients to Reduce Risk and Improve Productivity
Business Wire
Charles River Development and Broadridge Financial Solutions, Inc. (NYSE:BR), have formalized a business alliance to enable better integration with the SWIFT network in the Charles River Investment Management Solution (Charles River IMS).
/goo.gl/PFUE7a

Intel discloses three more chip flaws
Reuters
U.S. chipmaker Intel Corp (INTC.O) on Tuesday disclosed three more possible flaws in some of its microprocessors that can be exploited to gain access to certain data from computer memory.
/goo.gl/gmQtsL

Broadridge Secures Alastair McGill as a General Manager
Celeste Skinner – Finance Magnates
Broadridge Financial Solutions, a provider of business intelligence for the asset management industry, announced today that it has appointed Alastair McGill as General Manager of its Messaging, Reconciliation and Connectivity solutions business (MRC). He will report to Tom Carey, the President of Broadridge International.
bit.ly/2Bj22r8

ION announces despatch of compulsory acquisition notices to Fidessa shareholders
FinanceFeeds
The notices set out ION Bidco’s intention to acquire any remaining Fidessa shares in respect of which the offer has not been accepted.
/goo.gl/X53AWq

Why community banks should negotiate shorter fintech contracts
Nathan DiCamillo – American Banker
When Eddy Arriola moved into banking in 2009, he was shocked at the slow pace of upgrades.
Arriola, CEO of the $600 million-asset Apollo Bank in Miami, was previously an entrepreneur in the call center industry and was used to quicker technology turnover.
“When we did our first core system contract they told us that a commitment of eight years would give us a discount,” he said. “But a discount of what? What tech vendor can guarantee me that they’ll be the best eight years from now?”
bit.ly/2Mujq0f

Square And MetLife Watch Out: Two Fintech Startups Target $21T Markets
Peter Cohan – Forbes
Should established companies spend time watching tiny startups? You could argue that it’s not worth a second of the CEO’s time. For example, I worked for an insurance company before I started my consulting firm in 1994.
In 1995 I pitched Bain Capital on a site that would sell automobile insurance directly to consumers — passing along the lower operating costs and missing agent commissions to them in the form of lower prices.
bit.ly/2Mn3m0n

Cryptocurrencies

World’s largest maker of crypto mining chips said to plan US$3bil IPO
The Star Online
Bitmain Technologies Ltd, the world’s biggest producer of cryptocurrency mining chips, is planning a Hong Kong initial public offering that could raise as much as US$3bil, people with knowledge of the matter said.
/goo.gl/S3xqZD

A team at Northwestern think they have solved one of bitcoin’s biggest problems
Aaron Hankin – MarketWatch
A problem tied to how bitcoin and other cryptocurrency transactions are processed and completed has long dogged enthusiasts of the digital-asset community, but a group of scholars believe that they may have a solution.
/on.mktw.net/2PaEjMD

Goldman Sachs And J.P. Morgan Join $32M Series B in Enterprise Blockchain Startup Axoni
Michael del Castillo – Forbes
Enterprise blockchain startup Axoni has raised $32 million to help it finish moving some of the largest financial infrastructures in the world to technology that interoperates with the ethereum blockchain.
Led by Goldman Sachs and Nyca Partners, the Series B investment will be used to complete work on projects including the Depository Trust and Clearing Corporation’s effort to move its $11 trillion Trade Information Warehouse to a custom-built blockchain.
/goo.gl/7SbPnZ

Ethereum Co-Founder Joseph Lubin Says Speculators Driving Price Swings
Camila Russo and Erik Schatzker – Bloomberg
Speculative ‘trader types’ are driving crypto price swings; Lubin expects Ethereum to co-exist with hundreds of protocols
Ethereum co-founder Joseph Lubin said this past year’s surge in the value of digital currencies was a bubble and the burgeoning ecosystem is stronger because of it even as prices tumble.
/goo.gl/ekXas1

John McAfee Takes on CEO Position at Blockchain Startup
Simon Golstein – Finance Magnates
The eccentric businessman has taken the helm of a security-focused blockchain company.
/goo.gl/oJuVda

Korean Blockchain Groups Blast Plan to Strip Crypto Exchange Benefits
Wolfie Zhao – Coindesk
Several blockchain associations in South Korea are pushing back against a government plan they fear will stifle industry innovation.
The groups are objecting to a proposal aired by South Korea’s Ministry of SMEs and Startups on Monday for an amendment to the country’s existing venture business law that would, if enacted, exclude cryptocurrency exchanges from the category of SMEs and startups and group them instead with entertainment and gambling businesses.
bit.ly/2PcadZ4

Blockchain Could Be Key to Unlocking Internet of Things – ThirtyK
Mark Toner – Thirtyk.com
Blockchain technology is far from ubiquitous, but the internet of things, or IoT, has permeated nearly every industry and sector. Analysts have estimated there would be 11.2 billion connected devices this year. From Amazon’s Alexa to connected sensors in factories and the growing number of drones, the IoT has arrived.
Yet, it may be blockchain that helps IoT reach its full potential, so long as key hurdles can be overcome.
That’s the premise of a joint study by the Boston Consulting Group and Cisco Systems, which argues that challenges ranging from a lack of standards to security and privacy concerns have slowed the adoption of IoT, and that integrating blockchain technology may provide solutions.
bit.ly/2MqaclI

A Crypto Trader’s Guide To Stay Safe While Trading
Mike Genna – Blokt
It’s no secret that trading cryptocurrency can be dangerous. Without regulatory authority, skilled criminals and sleuths have been successful at shutting down servers and stealing millions of dollars worth of altcoins. I say altcoins because Bitcoin is not always stolen, in fact, it is almost never the coin victim to robbery.
A large majority of crypto trading around the world takes place on centralized exchanges like Coinbase, Binance, and Huobi, among others. They are vulnerable to hacking because they represent the biggest targets on the internet as they hold millions of in cryptocurrency for users of wallets. Let’s learn how to make the best choices when trading cryptocurrency.
bit.ly/2P8MjO2

Ripple ‘definitely’ wants to target China with its blockchain-based payments tech, exec says; China is “definitely a target” for Ripple, Jeremy Light, the firm’s VP of EU strategic accounts, told CNBC.
Ryan Browne – CNBC
Ripple wants to target the Chinese market with its distributed ledger technology designed to speed up cross-border payments, an executive at the firm told CNBC.
/jlne.ws/2BlxXHs

Why Is Bitcoin So Desperate For An ETF?
Peter Tchir – Forbes
I miss the days of arguing over the merits of bitcoin and cryptocurrency. Whether it is scalable or not? Whether it serves a valid function or not? Whether it can be a medium of exchange or just a store of value? Whether anonymity can remain a feature or whether government intervention and custodial activities will change all that.
/jlne.ws/2BbLnW6

Politics

Elizabeth Warren has a plan to save capitalism; She’s unveiling a bill to make corporate governance great again.
Matthew Yglesias – VOX
Elizabeth Warren has a big idea that challenges how the Democratic Party thinks about solving the problem of inequality.
/jlne.ws/2Oxh7qs

Trump’s Trade War Is Rattling China’s Leaders
Keith Bradsher and Steven Lee Myers – NY Times
China’s leaders have sought to project confidence in the face of President Trump’s tariffs and trade threats. But as it becomes clear that a protracted trade war with the United States may be unavoidable, there are growing signs of unease inside the Communist political establishment.
/goo.gl/HyXFsQ

China says U.S. solar tariffs violate trade rules, lodges WTO complaint
David Stanway, Muyu Xu – Reuters
China’s commerce ministry said a U.S. decision to subsidize renewable energy firms and impose tariffs on imported products has seriously distorted the global market and harmed China’s interests, firing the latest shot in a broader trade conflict.
/goo.gl/51NP3i

The US restaurant industry could be the big winner of Trump’s trade war
Bob Bryan – Business Insider
President Donald Trump’s trade war is taking its toll on a slew of US industries, but there could be one that comes out on top: restaurants.
While the president’s various tariffs are driving up costs for industries ranging from boat manufacturing to TVs, data provided to Business Insider by restaurant invoice management company Plate IQ showed that restaurants are actually seeing prices for ingredients fall due to the tariffs.
/goo.gl/rxQnAN

China accused of using Belt and Road Initiative for spying
Report identifies growing cyber espionage threat in countries across Asia and Europe
Stefania Palma – The Financial Times
Chinese cyber espionage linked to the Belt and Road Initiative is increasing, with experts warning that Beijing is using the huge infrastructure project to spy on companies and countries as well as to damp down dissent. The country is alleged to have targeted Belarus, the Maldives, Cambodia, European foreign ministries and non-governmental organisations, according to the report by US cyber security company FireEye.
/goo.gl/5JwKNp

Regulation

CFTC delivers on ‘Project KISS’ with proposal to streamline regulations for swap dealers
Todd Ehret – Reuters
Since taking the helm of the U.S. top commodities and derivatives regulator, Christopher Giancarlo has made his ambitions clear to refocus and reinterpret the mission of the Commodity Futures Trading Commission (CFTC). Regulatory change occurs at a snail’s pace but nearly a year into Giancarlo’s chairmanship, there are signs of progress.
/reut.rs/2vLAfKq

Here’s What an SEC Probe of Elon Musk Might Look Like
Matt Robinson and Benjamin Bain – Bloomberg
Regulator’s inquries take an average of two years to complete; Agency examinations very deliberative, ex-SEC officials say
As the bizarre Tesla Inc. go-private saga enters its ninth day, many investors are wondering when regulators will decide whether Elon Musk broke the rules by dripping out details so haphazardly.
/jlne.ws/2OEVQeF

SEC Files Charges in Municipal Bond “Flipping” and Kickback Schemes
SEC
The Securities and Exchange Commission today charged two firms and 18 individuals in a scheme to improperly divert new issue municipal bonds to broker-dealers at the expense of retail investors. According to the SEC’s complaint, the defendants – known in the industry as “flippers” – purchased new issue municipal bonds, often by posing as retail investors to gain priority in bond allocations. The defendants then “flipped” the bonds to broker-dealers for a fee. The SEC also charged a municipal underwriter for accepting kickbacks from one of the flippers.
/goo.gl/7zH7Ca

SEC Bars Perpetrator of Initial Coin Offering Fraud
SEC
The Securities and Exchange Commission today obtained permanent officer-and-director and penny stock bars against the founder of a company who perpetrated a fraudulent initial coin offering (ICO) to fund oil exploration and drilling in California.
/goo.gl/1Egci9

ESMA Closed For Public Holiday On 15 August Date
ESMA
ESMA is closed for public holiday on 15 August. ESMA will reopen on Thursday 16 August.
/jlne.ws/2BarSNC

Sebi eyes framework for timely disclosure of loan defaults by listed firms
Press Trust of India
Markets regulator Sebi is looking to stipulate a framework for timely and detailed disclosures of loan defaults by listed entities to enhance transparency.
/jlne.ws/2B9n7UC

Goldman shareholders can again pursue class action over CDOs
Jonathan Stempel – Reuters
A federal judge on Tuesday said Goldman Sachs Group Inc (GS.N) shareholders may again pursue class-action claims that the bank concealed conflicts of interest when creating risky subprime securities before the 2008 financial crisis.
/goo.gl/4EzmJx

Investing and Trading

Investors pile into US stocks, BofAML survey shows
Kate Allen – Financial Times
Investors’ growing preference for the US at the expense of the rest of the world has spurred them to take the biggest overweight positions in US equities since the start of 2015, with record high sentiment about the outlook for US profits, according to a survey.
/goo.gl/GcnZsD

Spotify’s $8 Billion Rally Is Attracting Loads of Hedge Funds
Jeran Wittenstein – Bloomberg
Spotify Technology SA, the music-streaming company that’s gained 47 percent since its April debut, attracted a number of prominent hedge funds in the second quarter.
/goo.gl/6gkJ9T

The five most common scams that cost pensioners millions
Laura Miller – Telegraph
Scammers are getting their hands on increasing amounts of your pension money, with the figure lost to fraudsters more than doubling last year to £23m – or £91,000 per victim.
/jlne.ws/2BeG9Js

Rich Professionals Are Using Pension Plans as a Tax Dodge
Ben Steverman – Bloomberg
Plans can help older doctors, lawyers stash more than $300,000; Treasury proposed regulations Aug. 8 blocking some strategies
There’s one area where the traditional pension plan is getting new life — as a tax dodge for wealthy business owners.
/jlne.ws/2OCtEsU

Institutions

Brokers Object to New SEC Standard
Daren Fonda – Barron’s
Investors who like BeyoncÈ’s music can now get a cut of the royalties through Hipgnosis Songs (ticker: SONG.UK), a music-royalty fund that recently launched on the London Stock Exchange. But even if you think “Halo” is a terrific song that will be a moneymaker for decades, would an investment in BeyoncÈ really be in your best interest?
/goo.gl/w6wv4L

****The answer to that above question is “yes, go long Beyonce.” (You’d have a smidge of exposure to Jay-Z, too.) ~SD

A $12 Billion Asset Manager Wants Out of the Hedge Fund ‘Fee Racket’
Vernon Wessels – Bloomberg
CEO Wierzycka says hedge funds failing to work as designed; Cape Town-based money manager has fired hedge-fund managers
South African money manager Sygnia Ltd. closed all its hedge-fund products, ending a 13-year history with an investment strategy its chief executive officer now calls a ruse to pocket fees.
/goo.gl/EkBPwK

Regions

Turkey slaps tariffs on American booze, cars as business groups urge diplomacy
Natasha Turak – CNBC
Turkey’s government announced tariffs on American cars, alcohol and cigarettes on Tuesday, ramping up what has become a bitter dispute between the two NATO allies. According to local press, the move doubles tariffs on a number of U.S. products, raising duties on American booze to 140 percent, cars to 120 percent and leaf tobacco to 60 percent.
/goo.gl/nKo5Vq

Turkey Will Put Capital Rules to the Test
Satyajit Das – Bloomberg
A much-touted remedy for financial risk may not be up to the task.
/goo.gl/H2MXJU

Turkey Shifts Toward Russia as Sanctions Sour U.S. Relations
David Gauthier-Villars – WSJ
President Recep Tayyip Erdogan of Turkey stepped up his attacks on the U.S. on Tuesday, calling for a boycott of Apple Inc.’s iPhones and other U.S. electronic goods, while his foreign minister joined his Russian counterpart in criticizing Western sanctions.
/goo.gl/7nkrwU

Interview: Singapore unveils strategy for next wave of commodities, energy growth
Norazlina Jumaat – S&P Global Platts
Singapore is aiming to push its next stage of growth in commodities and energy by striking a balance between grooming local enterprises to become global players, as well as by making its investment climate even more attractive and transparent for international firms looking to set up trading hubs.
/goo.gl/jFSvTj

Russia backs non-dollar trade with Turkey, no promise of help amid lira crisis
Andrey Ostroukh and Tuvan Gumrukcu – Reuters
Russia backs using national currencies, not the U.S. dollar, in its trade with Turkey, Russian Foreign Minister Sergei Lavrov said on Tuesday, but he made no firm commitments that would immediately help Ankara to weather its currency crisis.
/reut.rs/2vIPq76

De-risking agricultural investment in Africa; Climate science can reduce uncertainty in a high-risk environment
Evan Girvetz, CIAT – Financial Times
Beset by frequent drought, unpredictable rainfall, degraded soils, pests, disease and conflict, African farmers struggle to produce a steady supply of crops and livestock for consumption and sale.
/goo.gl/Ubj6fE

China accused of using Belt and Road Initiative for spying; Report identifies growing cyber espionage threat in countries across Asia and Europe
Stefania Palma – FT
Chinese cyber espionage linked to the Belt and Road Initiative is increasing, with experts warning that Beijing is using the huge infrastructure project to spy on companies and countries as well as to damp down dissent.
/jlne.ws/2BcEwM7

Currency pressure forces Hong Kong and Indonesia into action; HKMA defends forex peg as fallout from Turkey’s financial turmoil resonates
Emma Dunkley in Hong Kong and Edward White – FT
Asian currencies came under renewed pressure on Wednesday forcing central banks in Indonesia and Hong Kong to take action and marking an escalation in the fallout across emerging markets from the financial turmoil in Turkey.
/jlne.ws/2BcEALR

Brexit

Significant short-term market impact to no-deal Brexit
Gederts Gelzis – Reuters
The short-term market impact will be significant if Britain leaves the European Union without a deal, British Foreign Secretary Jeremy Hunt said during a visit to Latvia on Wednesday.
Britain is due to quit the EU in less than eight months, but the government has yet to agree with Brussels the terms of its departure. It has stepped up planning for the possibility of leaving without a formal agreement.
/reut.rs/2PbRigX

U.K. Equities Are Global Pariahs Amid Fears of Messy Brexit
Justina Lee – Bloomberg
Can U.K. stocks get any less love on the global stage?
Allocation to British equities dropped to a net 28 percent underweight in a Bank of America Merrill Lynch survey of global fund managers released Tuesday, the biggest drop since May 2016. It is no wonder: in dollar terms, the country’s shares have plunged to the lowest versus global equities since the 1970s, according to MSCI indexes.
/bloom.bg/2PaFMSY

The post RJO hires Stephen Brodsky; Economists warn on US corporate giant dominance appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

Bailey Kessing of Trillium is the focus of today’s video from our MarketsWiki Education World of Opportunity series in New York. I believe Bailey is the youngest person we have had as a speaker at our MWE programs. Bailey was also the 2018 winner of the women’s longest drive contest at FIA Boca, which is a first for us too.~JJL

One of the highlights of The Voice of Blockchain event next week will be a presentation from Brittany Kaiser, the whistleblower who helped expose the abuse of Facebook data by Cambridge Analytica. The event is August 24 and 25 at Navy Pier in Chicago and readers of the John Lothian Newsletter can receive $50 off of registration with this link. Go here for more information.~SR

Eric Dugan of 3D Capital Management had this data point – the S&P 500’s daily trading range is 130 percent greater than last year and 75 percent greater than its 20-year average.~SD

FINRA has changed its arbitration rules to involve penalties for late cancellations of prehearing conferences. FINRA said “late cancellations … have negatively impacted its roster of arbitrators by creating scheduling inconveniences for, and uncompensated work [read: prehearing preparation] by, arbitrators.” FINRA said arbitrators in the past have resigned because the current setup doesn’t provide any cancellation compensation. Now there will be a $100 honorarium for arbitrators if there is a cancellation.~SD

The Economist released its Global Liveability Index for 2018. The top five most liveable cities are Vienna; Melbourne, Australia; Osaka, Japan; Calgary, Canada; and Sydney. The bottom five are Damascus, Syria; Dhaka, Bangladesh; Lagos, Nigeria; Karachi, Pakistan; and Port Moresby, Papua New Guinea.~SD

Last week’s JLN piece Tech firms looking to change the technology stack was a top read article. For more on the topic, check out Steve Grob‘s six-part series Buy v Build.~JK

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MWE World of Opportunity – The Challenges of Crypto Market Trade Surveillance
JohnLothianNews.com

“So what type of trouble can crazy, 85-year-old Aunt Zelda – who’s now a honed market manipulator – get into in the crypto world?”

Do you have an aunt named Zelda? Do you own cryptocurrency? Ever had an awkward conversation at Thanksgiving dinner?

In this video from MarketsWiki Education’s event in New York, Bailey Kessing, head of business development for Trillium, uses a few examples to demonstrate how market manipulation in cryptocurrencies could occur.

Watch the video here »

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Newspaper editorials across U.S. rebuke Trump for attacks on the press
Alex Dobuzinskis, Brendan O’Brien – Reuters
Hundreds of U.S. newspapers devoted print space on Thursday to a coordinated defense of press freedom and a rebuke of President Donald Trump for saying some media organizations are enemies of the American people.
/jlne.ws/2Mkph9g

***** We would add our names to this list. I believe you can’t have free markets without free press. And don’t mess with my free markets!~JJL

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Future FinTech Launches New Line of Enzyme Drink Products
PRNewswire via MarketWatch
A financial technology company and an integrated producer of fruit juice related products, today announced the release of its first product line of enzyme drinks under the Company’s Hedetang brand called Xian Mei Duo, featuring healthy enzyme drinks made from high-quality seasonal fruits.
/on.mktw.net/2MPvS7C

****A beverage company (formerly Skypeople Fruit Juice) pivots to fintech and rebrands, while remaining primarily a beverage company? Where have I seen this before?~SD

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Wednesday’s Top Three
People want to know what other people are doing. So our top read piece of the day by a few miles was the RJO announcement R.J. O’Brien Names Stephen Brodsky to New Role of Chief Strategy Officer. Second was the Marketwatch article A team at Northwestern think they have solved one of bitcoin’s biggest problems. Third was the piece on waste, as in, how much garbage we all produce. The US topped the list in Visual Capitalist’s Infographic: Visualizing What the World Thinks About Waste

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MarketsWiki Stats
130,926,855 pages viewed; 23,234 pages; 214,520 edits
MarketsWiki Statistics

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Lead Stories

The Man Who Triggered a $10 Billion Commodity Collapse Finally Speaks
Javier Blas and Andy Hoffman – Bloomberg
Arnaud Vagner has been a mystery for more than three years. Noble Group, once one of the world’s biggest commodity trading houses, characterized him as a disgruntled former junior employee behind a series of reports by Iceberg Research, an anonymous group that began attacking its accounting practices in 2015.
/jlne.ws/2PcZttt

Firms That Bossed Agriculture for a Century Face New Threat: Farmers; Running expanded, consolidated operations, farms are pushing Cargill and ADM for better prices and are sometimes competing with them directly
Jacob Bunge – WSJ
Across the U.S. Farm Belt, the balance of power is swinging away from multibillion-dollar agribusinesses.
/jlne.ws/2MmgvY6

Banks Say No Thanks to Volcker Rule Changes; A proposal by Trump-appointed regulators to ease restrictions on trading could hurt large banks, firms say
Lalita Clozel – WSJ
Trump-appointed financial regulators set out to ease the Volcker ruleóa controversial postcrisis restriction for banksóand instead have drawn the industry’s ire.
/jlne.ws/2Pd1t4X

U.S. Pursues One of the Biggest Mortgage-Fraud Probes Since the Financial Crisis; At issue is whether income from apartment complexes was falsified to support larger loans–which often became part of mortgage securities.
Cezary Podkul – WSJ
Owners of an apartment complex near Pittsburgh, who wanted to take out a mortgage on the buildings, allegedly made vacant units look occupied by turning on radios, placing shoes and mats outside doors and in one instance having a woman tell inspectors her boyfriend was asleep inside.
/jlne.ws/2PdA9mU

In eye of the storm, Turkey’s new finance chief faces credibility test
Humeyra Pamuk – Reuters
Turkish Finance Minister Berat Albayrak faces a key credibility test on Thursday when he hosts a conference call with global investors to reassure them that policy makers can contain the country’s worst currency crisis since 2001.
/jlne.ws/2PeE0jS

Emerging market stocks in bear territory after 20 percent drop since January
Marc Jones – Reuters
A leading emerging market stock index extended its slump since January to 20 percent on Wednesday in a fresh wave of selling which took it into territory commonly regarded as a bear market.
/reut.rs/2MPc6cy

Bitcoin Bulls Regain Upper Hand as Extinction Concern Subsides
Olga Kharif – Bloomberg
Bitcoin recovered from the lowest level since June and scores of smaller digital tokens rallied as concern eased that investors are giving up on the virtual alternatives to cash after this year’s collapse in prices.
/jlne.ws/2MhMcCb

Tesla subpoenaed by SEC over Elon Musk tweet; Regulator raises questions after founder says ‘funding secured’ for take-private plans
Shannon Bond and James Fontanella-Khan – FT
The US Securities and Exchange Commission has subpoenaed Tesla, said a person familiar with the matter, as part of an investigation into a tweet by founder Elon Musk over plans to take the electric carmaker private.
/jlne.ws/2PfBqtE

***** Here is the WSJ version.~JJL

Replacing the IBORS: A Mammoth Global Effort
George Bollenbacher – TABB Forum
The replacement of the various interbank offered rates is one of the largest and most difficult transitions ever done in the capital markets. It touches a wide variety of markets and instruments, and utilizes new rates that differ significantly from the old ones, as well as from each other. TABB Group’s new head of fixed income research George Bollenbacher looks at the challenges and implications of the IBOR replacement effort as well as an approach that maximizes the chances of success.
/goo.gl/i6ygQb

Erdogan and Trump battle it out in the lira blame game; Thanks to US sanctions, the Turkish leader can claim there is an effort to sabotage him
Katie Martin – Financial Times
“Our relations with Turkey are not good at this time!” Donald Trump tweeted last week. In fact, on the economic front at least, the US president is really his Turkish counterpart’s best friend.
/jlne.ws/2P85TKp

MiFID II: not all doom and gloom
Jamie Powell – FT Alphaville
If you bothered to read the news over last Christmas you may have heard about something called Mifid II. The European legislation, the second iteration of the Markets in Financial Instruments Directive, came into force on January 3.
/jlne.ws/2PcUg4T

Exchanges, OTC and Clearing

USD Spreadovers and SEF Market Share
Chris Barnes – Clarus Financial Technology
We last looked at Asset Swaps back in May 2017 and looked in detail at USD Spreadovers in January 2017. That means we’ve got 18 months of history to catch up on in this blog, so read on to find out what’s been happening.
/goo.gl/vUuhpP

How are Futures on Bitcoin doing?
Amir Khwaja – Clarus Financial Technology
We last looked at Bitcoin Futures in January 2018, shortly after their launch by CBOE and CME, so high time to re-visit these to see how volumes have performed.
/goo.gl/oBYRxr

For The First Time – The Israeli Public Will Be Able To Compare Trading Fees -TASE Will Publish Trading Fees Comparison Table For Investors On Its Website
Mondovisione
For the First Time, the Tel-Aviv Stock Exchange (TASE) has started publishing on its website trading and clearing fees that TASE members charge their clients, in a manner that enables comparison between fees charged by different TASE members.
/goo.gl/yBFcCg

AITE Group report (part 1): MSCI exchange-traded derivatives and recent trends in the market structure
Eurex
For us at Eurex, MSCI is a major strategic focus point. That is why we constantly explore market developments and continuously expand our MSCI offering. To research MSCI exchange-traded derivatives (ETDs) in today’s market structure, we teamed up with AITE Group. The first part of the three-piece study focuses on MSCI ETDs and explains recent trends and changes in the market structure.
/jlne.ws/2MhTKEN

Single Stock Dividend Futures: Fee classification from 1 September 2018 to 31 August 2019
Eurex
For the period from 1 September 2018 to 31 August 2019, Eurex Clearing will introduce a fee classification for each individual Single Stock Dividend Future (SSDF).
/jlne.ws/2PdOsYM

Appendix 4E and Annual Report
ASX
/www.asx.com.au/documents/investor-relations/Appendix4EandAnnualReport2018.pdf

Fintech

CEO CHAT: AIR’s Stephenson Discusses Initiatives, Buy Side Tech and Market Structure
John D’Antona Jr. – Traders Magazine
Bill Stephenson spent 20 years at Franklin Templeton Investments, ultimately becoming Global Head of Trading and one of the most recognizable figures in the buy side trading community. After leaving the firm in 2017, he’s now leading the AIR Summit, a buy-side only event focused on showcasing the companies with the most innovative new solutions to help drive alpha.
/goo.gl/5omT9W

Move Over FANGs, FinTech ETF is Hot Now
Neena Mishra – Nasdaq
Investors love tech stocks and ETFs as tech continues to be the best performing sector this year, up about 15%. Some niche tech ETFs have done much better. One of them is the Global X FinTech ETF ( FINX ) that focuses on the emerging financial technology industry. It has risen about 24% this year.
/goo.gl/4npxWa

What The Treasury Department’s FinTech Report Means For Advisors
Samuel Steinberger – Wealth Management
Aggregated data today is far more robust than a table of transactions or the odd portfolio report. Information funneled between fintech firms, custodians, advisor portals, banks, server storage centers, even mobile phones, with powers systems that turn data into cues for when an advisor should reach out to a client provide financial context to voicebots like Amazon’s Alexa and are fueling speculation about the role of artificial intelligence in financial services.
bit.ly/2P9u2jA

U.S. Treasury: Regulators should back off FinTech, allow innovation
Lucas Mearian – Computerworld
The Treasury Department recently released a report urging state and federal regulators to revamp outdated statutes and support technological innovations such as AI, machine learning and blockchain that could make the U.S. financial system more nimble and competitive.
bit.ly/2PcWgtV

Thomson Reuters Eikon Brings Leading Minds to Investment Managers’ Desktops with Content from Financial Streaming Platform Real Vision
Business Wire
Thomson Reuters has taken another step to inform investment managers, announcing that it will now offer clients access to in-depth content from Real Vision, the premiere video-on-demand service for financial and business media. The agreement will enable banks, brokerage houses, asset managers, hedge funds and other Thomson Reuters clients to purchase Real Vision subscriptions for employees, and for retail investment customers to gain insight and make more informed investment decisions. Real Vision video content will be available on the Reuters Insider online platform, which delivers interviews, financial data and other information to subscribers.
/goo.gl/9QgDKW

Senior Bloomberg staff leave after internal probe; Investigation finds handling of third-party information should have been escalated through appropriate internal channels
Samuel Agini – Financial News
Three of Bloomberg’s electronic trading team have left the financial data provider after an internal probe into their handling of third-party information, which was prompted by a whistleblower.
/jlne.ws/2vCSgui

Intapp acquires DealCloud
Finextra
Intapp, a leading provider of industry solutions for the $2 trillion global professional services industry, today announced the acquisition of DealCloud, which specializes in CRM and deal management for investment banking and private equity firms.
/jlne.ws/2Mk2o5T

Investment Association adds first FinTech member to boost buy-side engagement; Addition of RegTech firm ClauseMatch as IA member aimed at increasing buy-side engagement with FinTechs.
By John Brazier – The Trade
The UK’s Investment Association (IA) has added its first FinTech member in a move designed to encourage engagement between technology firms and its buy-side membership.
/jlne.ws/2Pgrlgq

Cryptocurrencies

U.S. investor sues AT&T for $224 million over loss of cryptocurrency
Gertrude Chavez-Dreyfuss – Reuters
U.S. entrepreneur and cryptocurrency investor Michael Terpin filed a $224 million lawsuit on Wednesday against telecommunications company AT&T (T.N), accusing it of fraud and gross negligence in connection with the theft of digital currency tokens from his personal account.
/reut.rs/2MR2k9Y

Bearish Cryptocurrency Market – SEC ETF Decision Triggers Extended Investor Panic
Malek Mezni – Blokt
The crypto market’s recent, and much-publicized, plunge had drawn plenty of theories and speculation regarding where prices are heading to next. Investor panic ensued, but it looks like some basic fundamentals are driving momentum in this young yet extremely volatile market.
bit.ly/2PeWFfb

With Bitcoin Sinking, Crypto Miners Just Dig Deeper
Justina Lee – Bloomberg
With Bitcoin falling, you might expect mining activity to follow. That hasn’t happened.
The combination of declining prices and a rising hash rate — which measures computing power — shows how complex the economics of cryptocurrency mining are. An increasing hash rate means Bitcoin mining is still profitable enough for many players to stay put, defying speculation that prices have fallen past break-even points.
/bloom.bg/2MsQeqs

Inside the Vegas nightclub that launched its own cryptocurrency
Jack Morse – Mashable
It’s 11:15 p.m. on a Friday night and a man in a white button-down shirt named Joey just ordered me a shot of Fireball. It’s a little hard to hear him over the music blasting from the other side of the velvet ropes, but the club’s director of services leans in close to make sure I can hear him.
/goo.gl/98FNSP

Ten experts debate bitcoin’s recent declines and the future of cryptocurrency
Thomas Catenacci – CNBC
Bitcoin’s price was above $8,000 at the end of July. Now, in the middle of August, the cryptocurrency is down to around $6,500.
/goo.gl/RRxppY

Cryptocurrency Startup Swarm Is Selling Tokens Backed by Robinhood Shares
CCN
Cryptocurrency startup Swarm has an ambitious plan to democratize venture capital, and it has today taken a major step toward that goal by listing tokens that allow investors to purchase fractional shares in privately-owned fintech darling Robinhood.
/goo.gl/nYSVDY

UK Watchdog: Summer’s Cryptocurrency Fraud Costs £2 Million in Losses
Samburaj Das – CCN
The UK’s national policing lead for fraud has revealed figures wherein victims have reported 203 instances of cryptocurrency fraud totaling a little over £2 million ($2.54 million) in losses.
In an announcement published this on August 10, Action Fraud – the UK’s national fraud and cybercrime reporting center – warned the public of fraudsters pushing ‘get rich quick’ investment schemes related to mining and trading in cryptocurrencies.
bit.ly/2PeCLkr

Kurt Russell Stars in Cryptocurrency Thriller ‘Crypto’ – Exclusive Preview
Jake Kleinman – Inverse
Cryptocurrency values may have peaked in December 2017, but the cryptocurrency movie has nowhere to go but up ó at least, that’s what the producers of Crypto are hoping. The upcoming film, currently in post-production, tells a classic crime thriller set against the backdrop of shady cryptocurrency dealings (think “Michael Clayton meets Sicario”).
/goo.gl/4H3G1G

Tyler Winklevoss: ‘It Will Take Time’ for Wall Street to Make Crypto Jump
CCN
Crypto exchange Gemini CEO Tyler believes “it will take time” for the majority of Wall Street to enter the cryptocurrency sector.
/goo.gl/LkwYkw

CLS And IBM Launch Blockchain App Store With Banks And Fintechs
Tom Groenfeldt – Forbes
CLS, the global foreign exchange settlement bank founded to eliminate Herstatt risk ó the risk of one side in an FX trade will fail before paying its leg of a transaction ó is now partnering with IBM to offer a blockchain app store called CLS LedgerConnect.
/jlne.ws/2PfsTHt

Goldman Sachs leads $32M round into enterprise blockchain startup Axoni
BY DUNCAN RILEY – Silicon Angle
Enterprise blockchain startup Axoni Communications Inc. today said it has raised $32 million in new funding.
/jlne.ws/2PdCgXS

Politics

Trump says his steel tariffs will save the U.S. industry: WSJ
Reuters Staff
President Donald Trump said on Wednesday his tariffs on foreign steel are saving the U.S. industry and he predicted that in the future American steelmakers will mostly face domestic competition, the Wall Street Journal reported.
/jlne.ws/2MlGxe7

Documents Reveal Successful Cyberattack in California Congressional Race
Andy Kroll – Rolling Stone
FBI agents in California and Washington, D.C., have investigated a series of cyberattacks over the past year that targeted a Democratic opponent of Rep. Dana Rohrabacher (R-CA). Rohrabacher is a 15-term incumbent who is widely seen as the most pro-Russia and pro-Putin member of Congress and is a staunch supporter of President Trump.
/rol.st/2OFTj46

Trump, Seeking to Relax Rules on U.S. Cyberattacks, Reverses Obama Directive; It isn’t clear what rules the president is adopting to replace the existing ones
Dustin Volz – WSJ
President Trump has reversed an Obama-era memorandum dictating how and when the U.S. government can deploy cyberweapons against its adversaries, in an effort to loosen restrictions on such operations, according to people familiar with the action.
/jlne.ws/2PcDinb

Regulation

SEC Charges Ameriprise Financial Services For Failing To Safeguard Client Assets
SEC
The Securities and Exchange Commission today announced that Ameriprise Financial Services Inc. will pay $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives.
/goo.gl/D4y5m7

ICI, SIFMA offer recommendations on proposed Reg BI
Amanda Maine, J.D. – Wolters Kluwer
Several organizations have written letters to the SEC commenting on its proposed Regulation Best Interest (Reg BI) and related proposals regarding investment advice professionals’ standards of conduct at the close of the comment period last week, including the Investment Company Institute (ICI) and the Securities Industry and Financial Markets Association (SIFMA). Both organizations were largely supportive of the SEC’s proposals, but described areas in need of improvement or clarification.
/goo.gl/m51cun

Sebi sets eyes on commodity index derivatives, works on guidelines; Commodity contracts, instead of commodities, which are the underlying, will be components of the index. Second, it will be a future price index and not a spot price index
Rajesh Bhayani – Business Standard
Securities and Exchange Board of India Chairman Ajay Tyagi has said in an annual report “there are plans to consider more commodity options contracts to be launched, besides working on guidelines for index products”. Sebi will have to first finalise guidelines, which, according to sources, will suggest common standards for preparing commodity indices and later there will be regulations regarding trading.
/jlne.ws/2MktJEL

Alberta Securities Commission panel denies order against short seller Cohodes
CBC
The Alberta Securities Commission has rejected a requested order to prevent American short-seller Marc Cohodes from trading shares in or providing misleading information about Calgary-based Badger Daylighting Ltd.
/goo.gl/1zNkpr

Monthly Disciplinary Actions August 2018
FINRA
/jlne.ws/2Mk4kvb

Proposed Rule Change to Amend FINRA Rule 7730 (Trade Reporting and Compliance Engine (TRACE)) to Remove Computer-to-Computer Interface (“CTCI”) as a Technological Option for TRACE Reporting
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 7730 to modify the technological connectivity options available to members for reporting transactions to TRACE.
/jlne.ws/2PeTuEn

Proposed Rule Change to Amend FINRA Rule 1220(a)(4) (Financial and Operations Principal and Introducing Broker-Dealer Financial and Operations Principal)
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 1220(a)(4) (Financial and Operations Principal and Introducing Broker-Dealer Financial and Operations Principal) to: (1) reflect that certain firms remain exempt from the requirement to designate an individual as a Financial and Operations Principal (“FINOP”) or an Introducing Broker-Dealer Financial and Operations Principal (“Introducing FINOP”); and (2) provide that the individual designated as Principal Financial Officer and Principal Operations Officer of these exempt firms is not required to be qualified and registered as a FINOP or an Introducing FINOP.
/jlne.ws/2PfvtNF

Information for customers of Premier FX Limited
UK FCA
On 13 August 2018, on the application of the Financial Conduct Authority (FCA), the High Court appointed administrators in respect of Premier FX Limited (Premier). Premier is authorised by the FCA under the Payment Services Regulations 2017 to perform money remittance services.
/jlne.ws/2PeJ7R6

Investing and Trading

Barclays Trader Faces $19 Million Loss on Turkey Bonds
Donal Griffin and Alastair Marsh – Bloomberg
Senior trader Kirbay’s trade decline occurred over three days; Bank says Turkish trades are a small part of credit business
A senior Barclays Plc trader has faced losses of about 15 million pounds ($19 million) on Turkish bonds over the past few days, according to people familiar with the matter.
/bloom.bg/2MOO29K

Dollar has become the haven for investors seeking shelter; US economy seen powering along and expose comparatively weaker rivals
Roger Blitz – FT
“King Dollar” is that overused market terminology investors resort to any time the reserve currency is the dominant trading trend. And right now, such a term seems appropriate.
/jlne.ws/2Pc3E8J

Commentary: Dollar surge, EM turmoil echo Greenspan’s 1998 ‘oasis of prosperity’ warning
Jamie McGeever – Reuters
“It is just not credible that the United States can remain an oasis of prosperity unaffected by a world that is experiencing greatly increased stress,” opined Alan Greenspan almost exactly 20 years ago.
/reut.rs/2MSI2gk

Copper hits lowest level in more than a year
Fred Imbert – CNBC
Copper prices hit their lowest levels in 13 months on Wednesday, potentially signaling an economic slowdown is happening around the world.
/cnb.cx/2OFFYIR

Hedge Funds Are Losing Their Appetite for FANGs
Daren Fonda – Barron’s
Amazon aside, the FANGs appear to be losing some luster with big hedge funds. The FANGs refer to Facebook (FB), Amazon.com (AMZN), Netflix (NFLX) and Google’s parent Alphabet (GOOGL). The stocks have been hugely popular with hedge funds, many of which have made a killing as the stocks have surged.
/goo.gl/CtA4K1

Investors should not rely on the share buyback surge lasting
John Authers – Financial Times
Buyback derangement syndrome has us back in its grasp.
That is mainly because companies are buying back their own stock at a record rate this year, particularly in the US where repatriation flows have helped, but also in the rest of the world. But the fascination with the shrinking of public markets and the resulting growth of private markets has also been given extra piquancy by some shocking stories as managers and founders attempt to have the best of both worlds.
/on.ft.com/2MQ5RoX

Commodities Meet Their Wile E. Coyote Moment; A chasm just opened under metals.
David Fickling – Bloomberg
There comes a moment in every market where traders suddenly feel the ground dropping away beneath their feet. Like Wile E. Coyote, the Warner Bros. cartoon character who hovered in midair after running off the edge of a cliff before plummeting to the valley below, conditions can even feel weirdly normal for a while.
/jlne.ws/2Pj7s8q

***Wile E. Coyote always makes a great metaphor. ~SR

Institutions

R.J O’Brien appoints strategy chief in new role; US futures broker R.J O’Brien has hired industry veteran Stephen Brodsky as chief strategy officer in a newly created role.
By Hayley McDowell – The Trade
US futures broker and clearing house R.J O’Brien has appointed Stephen Brodsky as chief strategy officer in a newly-created role.
/jlne.ws/2MlrLE4

Let’s talk big bank capital
Victoria Guida and Aubree Eliza Weaver – Politico
Big banks are pushing to lower a capital surcharge that applies only to them and is becoming increasingly important in their rulebook. It’s still not politically easy for megabanks to push for looser regulation, with the wounds of the financial crisis fresh in people’s minds. But there’s at least one argument that banks hope will resonate with policymakers: The surcharge is hurting their international competitiveness.
/goo.gl/hXDFwn

Morgan Stanley’s new comp plan could pinch pay for some brokers
Bruce Kelly – InvestmentNews
The wirehouse will penalize advisers if they cannot sell enhanced services to clients with smaller accounts
When Morgan Stanley released its 2019 compensation plan for its 15,632 financial advisers and brokers late last month, it made a point of saying that any changes to the grid, as it is known in the industry, would all be positive.
/goo.gl/QmR7X3

Gotcha! 10 lessons from brokers gone bad
InvestmentNews
How many activities can regulators scrutinize to nab brokers and advisers? Let us count the ways.
/goo.gl/wwPAKC

Regions

Turkey’s new finance chief faces credibility battle with markets
Humeyra Pamuk – Reuters
Facing Turkey’s gravest currency crisis since 2001 in his first month in the job, Finance Minister Berat Albayrak has the daunting task of reassuring global investors that the economy is not hostage to political interference.
/reut.rs/2MO0x5s

How Freaked Out Are Italian Investors? Very.; The information in the short-end selloff shows serious skepticism about the budget process.
Marcus Ashworth – Bloomberg
Italian bonds have been getting hit pretty hard lately, and it’s understandable, given the turmoil in Turkey and the serious worries about the nation’s budget. But when markets turn risk-off, as they did earlier this week, it can be hard to assess just how worried investors in Italy really are.
/jlne.ws/2MhoKok

Italy Needs to Wake Up and Fix Its Banks; The euro area’s most vulnerable economy is heading into a storm.
Ashoka Mody – Bloomberg
The renewed turmoil in financial markets should send Italy’s leaders an urgent message: They must speed up a costly and possibly disruptive repair of their fragile banks to prevent even greater costs and disruption later.
/jlne.ws/2P9rbam

Why financial market shocks will be the new normal as central banks tighten their liquidity belts; Nicholas Spiro says the volatility on Wall Street in February and the turbulence in Italy, China and Turkey are not isolated events but the outcome of quantitative tightening
Nicholas Spiro – South China Morning Post
One of the buzzwords in financial markets this year has been “idiosyncratic”. A series of shocks that began in early February with a sudden eruption of volatility in US stock markets and have since put Italy, China and now Turkey under strain have been treated by international investors as disparate sell-offs, each with their own causes and catalysts.
/jlne.ws/2Mmps3V

HKMA intervenes to support HK dollar for second day
Emma Dunkley – FT
Hong Kong’s de facto central bank has been forced to intervene to prop up the local currency for a second consecutive day after it slumped to HK$7.85 against the dollar.
/jlne.ws/2Mloogo

Israel’s Central Bank Wants Increased Regulation on Algorithmic Trading
John D’Antona Jr. – Traders Magazine Online News
There will be no “Algos Gone Wild” in Israel’s stock markets if its regulator gets its way.
As first reported in Calcalist Tech, the country’s leading regulator, Bank of Israel, said it wants to review the need to restrict HFT in all financial assets traded on the exchange. Since HFTs employ algorithms and hyper fast computer technology, the move is in line with the country’s desire to reduce the risk of trading and exchange failures and manipulation.
/goo.gl/p7jvi4

Brexit

Markets Should Stop Panicking Over Brexit, Duncan Smith Says
Thomas Penny – Bloomberg
Former Conservative Party leader says U.K. economy is ‘robust’; Defends Johnson’s right to freedom of speech over burqa jibes
Iain Duncan Smith, a former leader of Prime Minister Theresa May’s Conservative Party and a leading Brexiteer, urged investors to calm down as he accused financial markets of overreacting to negative forecasts in the run-up to Britain leaving the European Union.
/jlne.ws/2Mmh9Vw

E.U. Sees Real Brexit Talks at Last ó and Real Dangers
Steven Erlanger – NY Times
From the start of the torturous negotiations over Brexit, as Britain’s exit from the European Union is known, the talks have followed an all too familiar dynamic.
The Europeans set the agenda; the British push for concessions or special deals, while trying to work out among themselves what they really want. The Europeans say no, sticking to a pretty hard line.
/nyti.ms/2MvDS0A

EU rebuffs idea of escalating Brexit talks to leaders’ summit
Jennifer Rankin – The Guardian
European officials have poured cold water on hopes that Theresa May could negotiate Brexit with other EU leaders in September to break the deadlock over Britain’s departure.
Diplomatic sources have rejected suggestions that May could hold direct talks on Brexit with the 27 other EU heads of state and government at a summit in Salzburg next month.
bit.ly/2PbDOBI

This Pro-Brexit Seaside Town Is Starting to Fret; Bournemouth contemplates life as just another U.K. coastal resort.
Jill Ward – Bloomberg
On any given weekday in the British seaside town of Bournemouth, surfers can be found dragging in their boards from the sandy beach to get smoothies and beers. Retirees and office workers take midday strolls along a seaside path lined with busy seafood restaurants and ice cream stalls.
/jlne.ws/2PbDVNE

Miscellaneous

FT chief executive to return pay after staff criticism
Matthew Garrahan – Financial Times
John Ridding, chief executive of the Financial Times, is to return a portion of his 2017 pay to the company following staff criticism of a sharp jump in remuneration that took his total package to more than £2.5m.
/on.ft.com/2OFXk8t

The post The Man Who Triggered a $10 Billion Commodity Collapse Finally Speaks; Big Ag Firms Face New Threat appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

SGX reported an open interest record in its USD/CNH futures contract on August 16 of 49,631 contracts, with a notional value of $4.96 billion.~JK

The WILD Chicago Event: Sexual Harassment at work in the #MeToo Era, which was originally scheduled to take place August 16, has been rescheduled for October 4, 2018. The event, presented by Women in Listed Derivatives, will be conducted by Jennifer Schoen Gilbert of Stowell & Friedman, Ltd., a law firm dedicated to defending employees’ civil rights including against sexual harassment. The workshop will provide an open ended discussion and practical tips and tools for employees. It costs $35 and takes place at the Union League Club in Chicago from 4:30 p.m. (program starts at 5:15 p.m.) to 8:30 p.m., including a networking reception. It is open to all and is designed to elicit discussion on this important topic. You can go HERE to register.~SR

Register for FIA Expo on or before August 31 to get a deal on ticket pricing. ~SD

Platinum hit 10-year lows.~SD

In case you missed the story about Steve Sears‘ latest endeavor, check out this press release: Occam To Advance Investor Education, Risk-Adjusted Investing~JJL

Where can I get a hat to become a Pastafarian. Right, my kitchen drawer.~JJL

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MWE World of Opportunity – You Actually Do Understand Blockchain
JohnLothianNews.com
“The most common mistake people make is not realizing that blockchain technology… is another app. It’s another way of doing something – it’s another way of communicating information.”

Gary DeWaal, special counsel for Katten Muchin Rosenman, has context to provide. He supported himself through law school as a journalist (you could do that back in the day, apparently), then learned he hated securities law, worked for the CFTC and an array of law firms and now has dived into the realm of crypto.

In this video from MarketsWiki Education’s World of Opportunity event in New York, DeWaal weaves a story that pulls all those pieces together.

Watch the video here »

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Emails show RBS bankers joked about crashing US housing market before 2008
Michael Selby-Green – Business Insider
Royal Bank of Scotland (RBS) bankers joked about destroying the US housing market and senior staff described the loans they were trading as “total f***** garbage,” according to transcripts released by the US Department of Justice.
/read.bi/2PjgVfY

****Any number of quotes from this piece will make you queasy. This one is particularly disheartening – “The chief credit officer at RBS wrote to colleagues saying that loans were being pushed by ‘every possible … style of scumbag,’ and it was ‘like quasi-organised crime.'”~SD

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Research shows decentralised crypto ecosystem is ‘highly connected’
Conner Guidry – The Trade Crypto
Study conducted by crypto trading platform Coinigy identifies ‘high connectivity’ among a number of crypto projects and their investment backings.
bit.ly/2nKvpJg

****** Decentralized is not what it used to be~JJL

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Imposter Posed as SEC to Tank Shares, Penny-Stock Pot Firm Says
Lily Katz – Bloomberg
MassRoots Inc., a company that runs a marijuana-rating app, believes a short-seller may have impersonated someone from the Securities and Exchange Commission on a conference call to sink its stock.
/bloom.bg/2vO3Qmr

**** One has to wonder what this guy was smoking when he came up with this scheme.~JB

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Mnuchin Says Turkey Faces More Sanctions If Pastor Not Released
Justin Sink – Bloomberg
Trump says U.S. helped free Turkish citizen in unnamed country; Erdogan moved to bolster alliances in Europe and Middle East
Treasury Secretary Steven Mnuchin said the U.S. is ready to slap Turkey with more sanctions if President Recep Tayyip Erdogan refuses the quick release of an American pastor, escalating a diplomatic rift that has roiled global financial markets.
/jlne.ws/2Bgimsq

***** Can I make a suggestion? Send Jesse Jackson over to secure the release of the pastor.~JJL

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Inc. 5000 2018: America’s Top Entrepreneurs
Inc.com
If entrepreneurs are the lifeblood of an economy, consider Inc.’s ranking of 5,000 companies America’s circulatory system. Our annual report looks at these fast-growing innovators–and how they made our list.
bit.ly/2MwYo17

**** Well over 200 of these companies are in financial services.~JB

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Thursday’s Top Three
It’s amazing what a former employee can do. Our top read story of the day on Thursday was about Arnaud Vagner in Bloomberg’s The Man Who Triggered a $10 Billion Commodity Collapse Finally Speaks. Second went to the infographic story from Clarus Financial Technology in How are Futures on Bitcoin doing? Third went to the Wall Street Journal piece Firms That Bossed Agriculture for a Century Face New Threat: Farmers

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MarketsWiki Stats
131,357,179 pages viewed; 23,252 pages; 214,611 edits
MarketsWiki Statistics

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Lead Stories

NYSE veteran Peggy Sullivan joins exec team at Vela; Peggy Sullivan has been acting as a consultant for Vela but has now been appointed chief of staff.
Hayley McDowell – The Trade
Trading and market access technology provider Vela has appointed a former executive and veteran of the New York Stock Exchange (NYSE) as its new chief of staff.
/jlne.ws/2OIOuXs

****Vela release here.

Nvidia’s Crypto Business Dries Up, Worrying Investors; Shares of chip maker drop after hours despite robust sales and profits for latest quarter
Micah Maidenberg – WSJ
Nvidia Corp. NVDA -0.63% reported robust sales and profits during its second quarter, but warned that revenue from products geared toward cryptocurrency mining would be sharply weaker than expected.
/jlne.ws/2BmbI40

****Bloomberg here

Trump asks SEC to study ending quarterly earnings reports; President advocates semi-annual reporting for greater flexibility
Mamta Badkar – FT
US president Donald Trump on Friday advocated for ending quarterly earnings updates and said he has asked the US Securities and Exchange Commission to study allowing American companies to report on a semi-annual basis.
/jlne.ws/2BkaJ4m

***** WSJ version of this story.~[JJL]]

Global equity market shrinks as buybacks surge; Repurchases outstrip new issuance by most in more than two decades
Robin Wigglesworth – FT
The global equity market is shrinking at the fastest pace in at least two decades, as a wave of corporate share buybacks swamps the overall volume of companies going public, issuing new stock or selling convertible debt.
/jlne.ws/2OJcxWj

ASX says its blockchain will slice super costs
James Eyers – Australian Financial Review
The ASX said the adoption of blockchain technology could help the superannuation industry save hundreds of millions of dollars in costs by removing multiple databases of share ownership information, while also creating new revenue opportunities.
Announcing underlying net profit up 7.2 per cent to $465.3 million – helped along by a 46 per cent jump in the amount of capital raised by listed companies over the past year – CEO Dominic Stevens unveiled a strategic vision for the ASX to become the trusted infrastructure governing big-data analytics as the financial services industry is reshaped by new technology.
/goo.gl/CRSzYE

****Coindesk here.

A Reality Check for Blockchain in Commodity Trading
Antti Belt and Steven Kok – BCG
To the commodity traders that support it, blockchain technology is a panacea. Blockchain-based platforms promise to improve the way the commodity-trading industry operates by addressing its struggles: with inefficiencies and issues of trust and with the complexity of transactions, which typically involve multiple counterparties. It’s no surprise, then, that senior executives are lining up to invest in blockchain.
/on.bcg.com/2MPDk2x

Huobi, One of World’s Largest Crypto Exchanges, Invests in OpenFinance Network
BusinessWire
Huobi, one of the largest crypto exchanges in the world, has entered into a strategic partnership, including a significant investment, with OpenFinance Network (OFN), the premier US-compliant security token trading platform.
/goo.gl/zg4uZv

**JLN story about OpenFinance Network: So You Have A Token, Now What? OpenFinance Network Aims To Offer Trading, Clearing And Settlement All On the Blockchain

There’s Front-to-Back and Then There’s Front-to-Back
Klaus Holse, SimCorp – TABB Forum
The recent spell of vendor acquisitions, including State Street Global’s buyout of OMS provider Charles River Development, has tightened the net on tech vendors in the financial industry, causing a new wave of disruption on the buy side. But what value do these deals offer the buy-side market, and do they truly solve the buy-side challenges that are causing a strain on investment operations today?
/goo.gl/cJKVqa

Tide about to turn for markets as easy-money decade ends
Sujata Rao, Dhara Ranasinghe – Reuters
Swept along by super-easy money, investors have debated for years how world markets will react when this central bank largesse inevitably ends. Now the liquidity tide is about to turn, and they have only a few months to adjust.
/reut.rs/2vR1FP4

ETP leader reckons on risk reduction to crack FX market
Paul Golden – Euromoney Magazine
Flow Traders is confident that the approach that has made it the leading player in the European exchange-traded products (ETP) market can be replicated in FX as it looks to cash in on increased interest in non-bank market makers.
bit.ly/2vRrUoA

Why ABCD Sing the Blues, Part II: Increased Farm Scale Leads to Greater Competition in Capacity and Less Monopsony Power
Streetwise Professor
In “Why Are ABCD Singing the Blues?” I called bull on the claim that ag trading firms were suffering through a rough period because of big crops and low prices. I instead surmised that gains in capacity, in storage and throughput facilities, had outstripped growth in the amount of grain handled, and that this was pressuring margins. In yesterday’s WSJ, Jacob Bunge (no relation, apparently, to the grain trading family) had a long and dense article that presents a lot of anecdotal support for that view. The piece also provides other information that allows me to supplement and expand on it.
/goo.gl/Fs2VTN

Corporate power on the agenda at Jackson Hole; Central bankers to discuss whether business concentration is keeping wages low
Sam Fleming – FT
Central bankers will debate the increasing market power of massive corporations, as well as the impact of increased online activity, when they gather for their annual meetings in Jackson Hole, Wyoming, next week.
/jlne.ws/2OFRvrI

EU plan for capital markets union faces delay, warns Brussels; Project aiming to improve cross-border investment at risk due to slow progress by governments
Jim Brunsden – Financial Times
The EU’s financial services chief has warned that the bloc’s flagship project to boost private sector investment in business is in jeopardy, with governments lagging in approving the necessary laws. Valdis Dombrovskis, the European Commission vice-president responsible for the euro, said the EU’s goal of creating a capital markets union by 2019 might not be reached.
/goo.gl/5qjqW1

Former UBS graduate reports rape claim to London police; Swiss bank did not contact the UK financial regulator at any time during its six-month probe into the woman’s allegations
Chris Newlands – Financial News
The former female graduate at UBS who has accused the Swiss bank of seriously mishandling a rape allegation she made against one of its senior managers has reported her claims of sexual assault to the Metropolitan Police.
/goo.gl/oFhd5h

Analysts question GAM’s ‘heavy handed’ suspension of manager; Critics of chief executive Alexander Friedman warn of panic withdrawals from the Zurich asset manager’s other funds
David Ricketts – Financial News
GAM Holding’s suspension of senior manager Tim Haywood, and the announcement that the Zurich-listed asset manager would liquidate the nine bond funds and the CHF7.3bn he oversaw, has been criticised as an overreaction that could spur clients to pull their investments from the firm.
/goo.gl/ev7x2d

Exchanges, OTC and Clearing

MCX inks MoU with IBJA to set up bullion spot exchange
Business Standard News
Multi Commodity Exchange of India (MCX) today said it has signed a memorandum of understanding (MoU) with India Bullion and Jewellers Association (IBJA) to set up bullion spot exchange.
/goo.gl/pXEhht

IEX-LTSE listings partnership in doubt
Nicole Bullock – FT
IEX’s partnership with a start-up exchange to offer corporate listings aimed at buy-and-hold investors has been cast into doubt after the withdrawal of a regulatory application related to their plans.
/jlne.ws/2OIHl9B

****Reters here

Exchange Publishes Conclusions from its Consultation on Exempting Aircraft Leasing Activities from its Notifiable Transaction Rules
HKEX
Exchange to amend Listing Rules to exempt qualified aircraft leasing activities, which include aircraft leasing with aircraft operators and acquisitions/disposals of aircraft, from its notifiable transaction rules; The exemption will be available to listed issuers that are principally engaged in aircraft leasing, subject to certain criteria and conditions; The amendments will take effect on 15 October 2018
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) published its conclusions from responses to its Consultation Paper on Proposed Exemption for Aircraft Leasing Activities1 (Consultation Conclusions).
/jlne.ws/2OK37Kp

Launch of TOPIX Small500
JPX
Tokyo Stock Exchange, Inc. will calculate and publish a new index called “TOPIX Small500” from October 9, 2018 as a part of the Size-based TOPIX Sub-Indices lineup. Details of the index can be found in the files listed below.
/jlne.ws/2OEIQpp

Congo Copper Faces Increased LME Scrutiny With Audits
Mark Burton – Bloomberg
The London Metal Exchange will start requiring that copper producers which source metal from the Democratic Republic of Congo carry out independent audits to prove their material is ethically sourced, according to people familiar with the matter.
/goo.gl/3qBQ9f

Fintech

Tradeweb Brings RFQ Trading to the Options Industry
Tradeweb
Tradeweb Markets, a global leader in electronic financial marketplaces, today announced the launch of the Tradeweb U.S. options platform for institutional customer-to-dealer trading.
/goo.gl/1oWB9v

Tradeweb launches RFQ platform for US options; Tradeweb’s RFQ US equity options platform allows traders to send multiple price requests for more control and tighter spreads.
Hayley McDowell – The Trade
Fixed income and derivatives trading specialist Tradeweb has established a new platform for US equity options using request for quote (RFQ) functionality.
/jlne.ws/2OHfOp2

EDI’s comprehensive and complete reference & corporate action datasets now featured on Crux.
financial-data-provider.blogspot.com
Exchange Data International (EDI), a provider of global security corporate actions, pricing and reference data, is pleased to announce a partnership with Crux a leading data engineering and information supply chain operator.
bit.ly/2vNERQs

The World Economic Forum warns that AI may destabilize the financial system
Will Knight – MIT Technology Review
Artificial intelligence will reshape the world of finance over the next decade or so by automating investing and other servicesóbut it could also introduce troubling systematic weaknesses and risks, according to a new report from the World Economic Forum (WEF).
/goo.gl/S7hZba

German fintech Deposit Solutions raises $100 million
Oscar Williams-Grut – Business Insider
A German fintech startup that lets people access the best interest rates from multiple banks without having to open up new accounts has raised $100 million to fuel its expansion.
/read.bi/2MwXEZT

AZ Regulatory Sandbox Fintech Program Now Accepting Applications
Luis Urbina – The National Law Review
Arizona recently became the first state in the U.S. to create a “regulatory sandbox” program to facilitate the development of innovative financial products and services. Such products would either incorporate new or emerging technology or reimagine uses of existing technology. The program would exempt participants from certain state financial regulations, but not federal requirements.
bit.ly/2PiugVw

Monzo poised to join ranks of Europe’s fintech ‘unicorns’; UK digital bank lines up fundraising as it eyes $1.5bn valuation
Martin Arnold, Banking Editor – FT
Monzo, the British digital bank popular with millennials, is set to become the latest European fintech “unicorn” with a fresh round of fundraising expected to put a valuation on the company of up to $1.5bn.
/jlne.ws/2MjIg3D

Cryptocurrencies

Strong US Dollar, Not ICOs, Drove Recent Cryptocurrency Market Decline: Analyst
CCN
The cryptocurrency markets experienced a slight pullback on Thursday but have more or less managed to maintain the midweek recovery that followed Monday’s massive sell-off.
/goo.gl/9N6Vm8

US Senate set to meet to discuss blockchain and energy efficiencies
Coin Insider
The U.S. Senate has set a date to explore the efficiencies – or lack – of blockchain technologies for next week.
According to a public announcement released by the Senate, a full committee meeting – with 23 of the members invited – will be hosted on Tuesday 21st August 2018 in order to discuss the costs of energy consumed by companies using blockchain and similar technologies.
bit.ly/2MuNJnA

The “Fapiao” Case: How China Is Fighting Corruption With Blockchain
Cointelegraph
China has been on the verge of blockchain adoption as of late. The technology, in fact, has become part of the country’s national, president-signed program. The latest advancement in the field relates to the country’s old corruption staple ó fake invoices used to embezzle corporate and state funds.
bit.ly/2Mzt0Pt

Nvidia says crypto-mining boom is over for now
Therese Polletti – MarketWatch
The extra boost Nvidia Corp. received from selling its graphics chips to cryptocurrency miners appears to be over, at least for now. Nvidia NVDA, -0.63% Chief Financial Officer Colette Kress surprised investors ó who had already been anticipating lackluster crypto sales ó with an even more downbeat forecast for crypto-mining sales Thursday.
/goo.gl/w4JDEu

Founder of Coevals ICO Hit with Default Judgment over Fake ‘Crypto Options’
Aziz Abdel-Qader – Finance Magnates
Operators of scheduled-but-cancelled Monkey Capital ICO have reportedly been hit with a $1.17 million judgment over alleged violations of Florida state and federal securities laws.
/goo.gl/hHgtWP

Blockchain Technology Set To Revolutionize Global Stock Trading
Eric Ervin – Forbes
If early adoption is any sign of what the future holds, blockchain technology can revolutionize stock market trading around the world.
/goo.gl/qsejvx

Meet the Man with a Radical Plan for Blockchain
Andrew Leonard – Wired
IN A CAF… on the Upper East Side of Manhattan, a one-time videogame developer turned political theorist named Santiago Siri is trying to explain to me how his nonprofit startup, Democracy.Earth, aims to fix the world’s broken politics with the help of the blockchain.
/goo.gl/kzRBnQ

VeChain Price Explodes 30% as Cryptocurrency Market Extends Recovery
CCN
The vechain price (VET) exploded by 30 percent on Thursday, headlining a widespread recovery that raised the cryptocurrency market cap by more than $5 billion over the past 24 hours.
/goo.gl/C6kvdi

With Bitcoin Sinking, Crypto Miners Just Dig Deeper
Justina Lee – Bloomberg
Rising hash rate shows many miners are still making a profit; Smaller miners are getting squeezed out at $6,000 price level
With Bitcoin declining this year, you might expect mining activity to follow. That hasn’t happened.
/jlne.ws/2OMSTsL

Politics

Crypto Lobbyists Moving to Shape Policy in Washington
Alex Lielacher, Brave New Coin – TABB Forum
A regulatory stalemate creates an opportunity for cryptocurrency startups and advocates to influence lawmakers toward passing crypto-friendly legislation. This is exactly what blockchain lobbyists are trying to achieve in Washington.
/goo.gl/EERcZH

Donald Trump uses dispute with Turkey to rally evangelicals; US president’s stance on detained pastor bolsters support from core voters
Demetri Sevastopulo – FT
As President Donald Trump presses Turkey to release an American pastor under house arrest, one group in particular has praised his administration’s efforts ó the evangelical Christians who claim Andrew Brunson as one of their flock.
/jlne.ws/2OJZYKB

US interior secretary’s school friend crippling climate research, scientists say; Trump administration forces some scientific funding to be reviewed by adviser who was high-school football teammate of Ryan Zinke
Mallory Pickett – The Guardian
Climate scientists say a policy enacted by US interior secretary Ryan Zinke, pictured with Donald Trump and Rick Perry, is holding up scientific research funding. Photograph: Steve Helber/AP
Prominent US climate scientists have told the Guardian that the Trump administration is holding up research funding as their projects undergo an unprecedented political review by the high-school football teammate of the US interior secretary.
/jlne.ws/2OFWI2K

Russian oil industry would weather U.S. ‘bill from hell’
Oksana Kobzeva, Dmitry Zhdannikov – Reuters
Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology.
/goo.gl/ojLisb

Regulation

Trump Seeks SEC Study of 6-Month Reporting Instead of Quarterly
Terrence Dopp and Benjamin Bain – Bloomberg
President Donald Trump said he’s asked the U.S. Securities and Exchange Commission to study ending quarterly reporting for U.S. businesses in order to ease regulations and spur growth.
/jlne.ws/2BjBqWM

Thai SEC Clears Seven Cryptocurrency Operators to Serve Clients, Reviews Two More
William Suberg – Cointelegraph
Thai regulators announced Thursday, August 16, that they have so far approved seven business entities to conduct cryptocurrency operations as part of the formalization of the country’s domestic market.
/goo.gl/AJY1r5

Whistleblower makes shocking IRS, insider trading allegations
John Crudele – NY Post
A whistleblower made this shocking allegation to me last week: the IRS was tipping off members of Congress to corporate takeovers so the elected officials could profit from insider trading.
/nyp.st/2MQ0hmk

SEC fines Citi after traders make $81 million loss; The US regulator says that Citi traders mismarked illiquid positions in proprietary accounts they managed, leading to $81 million loss.
By Hayley McDowell – The Trade
Citigroup has been fined a total of $10 million by the US financial regulator in two enforcement actions, one of which related to a $81 million loss made by three of its traders.
/jlne.ws/2OJZkwj

Citi settles SEC charges over bad controls, supervision
Reuters Staff
Citigroup agreed to pay $10.5 million to settle two separate complaints, one relating to bad loans made by its Mexican subsidiary, Banamex, between 2008 and 2014, U.S. regulators said on Thursday.
/jlne.ws/2OF6XEm

FINRA Planned Termination of Support of CTCI Protocol for Reporting Trades to TRACE AND ORF
FINRA
FINRA currently supports three methods for the reporting of transactions to its TRACE and Over-The -Counter Reporting (ORF) products – FIX, Computer-to-Computer Interface (CTCI) and TRAQS. Subject to SEC approval, beginning in early first quarter 2020, FINRA would no longer support the CTCI protocol (CTCI/TCP; CTCI/MQ) for both TRACE and ORF transaction reporting. Any client, including Service Bureaus, that currently utilizes CTCI and wishes to continue to deliver electronic transactions (i.e. not via TRAQS) would need to migrate to the FIX protocol by Monday, February 3, 2020.
/jlne.ws/2BqG3hE

Proposed Rule Change to Amend FINRA Rule 6710 to Modify Agency Debt Security Dissemination Protocols
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend FINRA Rule 6710 to modify the dissemination protocols with respect to Agency Debt Securities.
/jlne.ws/2BlewOW

Initial Coin Offerings (ICOs)óWhat to Know Now and Time-Tested Tips for Investors
FINRA
Your digital assetsóthose assets you have stored electronically on your computer or on the internetótake many forms: the unique logo you designed for your company, the photographs stored on your phone, and your eclectic iTunes music collections. Digital assets also include cryptocurrencies, and other crypto coins and tokens, which may be offered to you in an Initial Coin Offering, or ICO.
/jlne.ws/2BvrTfB

RBC whistleblower protections under FCA scrutiny; Regulator made aware of at least five further complaints after whistleblowing former employee wins unfair dismissal case
Katie Martin and Caroline Binham – FT
Whistleblower protections at Royal Bank of Canada are under scrutiny by the UK’s Financial Conduct Authority, after a former trader at the bank won his case for unfair dismissal and at least five more potentially similar cases came to light.
/jlne.ws/2BgrsFA

Investing and Trading

Buyback Derangement Syndrome What sufferers accuse Apple of is a contradiction in terms – self-liquidating to a value of $1 trillion.
Clifford Asness, AQR – WSJ
Share buybacks are when a company purchases its own common shares on the open market. After a buyback, a company is left with less cash and fewer shares outstanding. Buybacks, along with ordinary dividends, are one of the main ways companies return cash to investorsóthe ultimate objective of any investment. So why have buybacks become the subject of vitriolic criticism? Prominent publications have run headlines calling buybacks, among other things, a “scam” that is “killing the American economy” and asserting that they “loot the future.”
/goo.gl/NBvmbQ

Futures vs. ETFs: How to Gain Japanese Equity Exposure
CME Group
An investor who is gaining exposure to international markets, specifically Japanese markets, faces a few decisions. They must decide which index to track capital against, and for the sake of this paper we will compare TOPIX and MSCI Japan. The MSCI Japan Index, like the TOPIX, is designed to measure the performance of the broader Japanese market. The two indices have tracked similarly since 2010, as shown by the below graph1.
bit.ly/2vNwl3G

Tearful Musk Tells NYT Nobody Reviewed Tesla Funding Tweet
Angus Whitley and Elisabeth Behrmann – Bloomberg
CEO wrote post about buyout plans in his car on way to airport; Strained Musk tells of sleep medication use, personal toll
Elon Musk said no one saw or reviewed his tweet about the plan to take Tesla Inc. private before he posted it, the New York Times reported, citing an interview in which the billionaire frequently teared up and discussed the personal strain of leading the electric-car maker.
/jlne.ws/2BibJ8Z

$1.5 Trillion in Corporate Cash Is Coming to America
Annie Massa – Bloomberg
Asset managers angling for clients with overseas cash troves; Risks abound: Cisco pulled 5 billion euros from Deutsche Bank
The biggest U.S. asset managers are going head-to-head to win a piece of a $1.5 trillion corporate cash comeback.
/jlne.ws/2OJ4Dfv

Trade Fears Throw Future of U.S. Natural Gas Into Question; As trade disputes continue, the promising U.S.-China energy relationship is compromised
By Stephanie Yang and Timothy Puko – WSJ
U.S.-China trade tensions threaten a promising area of growth in U.S. energy: natural-gas exports.
/jlne.ws/2Bgkfp0

Funding Secured: For the U.S. Government, That Means Domestic Bond Buyers; U.S. investors have so far financed all of this year’s increase in the federal government’s borrowing
By Daniel Kruger – WSJ
The U.S. government has been issuing more debt, but it’s not getting more foreign buyers in the door. As a result, U.S. investors have so far financed all of this year’s increase in the federal government’s borrowing.
/jlne.ws/2OEWxET

Cost of junk debt casts doubt on US expansion; Concerns that further increases in interest rates could spark trouble for the market
Joe Rennison and Eric Platt in New York – FT
Companies with speculative-grade credit ratings are spending a growing portion of their profits on interest payments as debt costs rise, causing concern as investors and economists debate the durability of the US expansion.
/jlne.ws/2OLOwOz

Institutions

SAXO Bank Reports Slow H1-2018 Earnings, Net Profit Fell by a Whopping 53%
The Industry Spread
The Copenhagen-based multi-asset broker, SAXO Bank on Thursday has published its interim financial results for the first half of 2018. The company in its first-half results has defied the industry trend of strong earnings and has reported a slowdown in overall business operations. The slowdown in result may be caused due to the company’s massive restructuring operation in which it is focusing its major part of the resources in developing Chinese operation.
/goo.gl/E1gqZ2

5 impacts the OCC ruling could have for bank CTOs
Bobsguide
The US OCC will soon be accepting applications from non-deposit taking fintech organisations to operate as banks on a nationwide basis, and early predictions suggest many firms will seize the opportunity.
/goo.gl/7YAyKS

Gender diversity on Bank Board of Directors and performance
Ann Owen and Judit Temesvary – Bank Underground
The representation of women on boards of US bank holding companies has increased (chart 1), but nevertheless remains well below the share of women in the overall employee base (chart 2). While this also raises questions of equity, our research asks if a lack of gender diversity on bank boards has an economic impact on their performance. We find that it does, and that this effect depends on 1) the existing level of gender diversity on the board, and 2) the level of bank capitalization. If risk-weighted capital ratios are a proxy for the quality of bank management, our findings suggest that at well-managed banks, gender diversity has a positive impact on bank performance- but only once a threshold level of diversity is reached.
/goo.gl/b8LGMV

Goldman agreed to support fund with Lars Windhorst ties; German financier in spotlight after lawsuit against US investment bank
Robert Smith – FT
Goldman Sachs agreed to act as prime broker to a fund linked to Lars Windhorst, the European financier in the spotlight after a whistleblower complaint against the US investment bank.
/jlne.ws/2Bk35XB

Regions

Turkey’s lira intervention raises questions for investors; Costs on borrowing the currency doubled between Monday and Wednesday
Jonathan Wheatley and Martin Arnold – Financial Times
After days of sustained declines for Turkey’s currency, the country’s policymakers stepped into action on Wednesday with measures that sent the lira up about 5 per cent. However, with the currency down about a third this year and Turkey’s economic imbalances still unaddressed, investors are examining what exactly Turkish authorities did and whether it will be enough to stem a crisis that has bled into other emerging markets.
/goo.gl/vz9d4u

Turkey is dumping US debt
Michael Selby-Green – Business Insider
Turkey’s holdings of US sovereign debt dropped by 12% between May and June.
The country’s US Treasury bond holdings fell to $28.8 billion in June from $32.6 billion the month before, Zero Hedge and RT reported. Since the end of last year, Turkey has reportedly liquidated 52% of its US bonds, bills, and notes.
/goo.gl/EohJaU

China’s Nio woos potential investors with ambitious vision; Listing documents for its planned NYSE IPO reveal costly plans to forge relationships with clients
Peter Campbell, Motor Industry Correspondent – FT
In the great Chinese electric car race, Nio is gambling on using the stock market to help it pull away from the pack.
/jlne.ws/2BimlVk

Sberbank’s solution first to get approval of Bank of Russia’s regulatory sandbox
Financefeeds
Sberbank’s service that helps remotely control permissions to carry out transactions using corporate client accounts is the first service to pass the pilot in Bank of Russia’s regulatory sandbox.
/goo.gl/ykYZjh

Indian Markets Look Headed for Further Extremes
By Andrew Peaple – WSJ
“Incredible India,” goes the tourism ad jingle. Incredible is one word for markets in the giant Asian economy right now.
/jlne.ws/2OK7KnG

Russian oil industry would weather U.S. ‘bill from hell’
Oksana Kobzeva, Dmitry Zhdannikov – Reuters
Stiff new U.S. sanctions against Russia would only have a limited impact on its oil industry because it has drastically reduced its reliance on Western funding and foreign partnerships and is lessening its dependence on imported technology.
/jlne.ws/2Pm4eB4

Brexit

UK faces rising chance of disorderly Brexit, Fitch warns
Kate Allen – The Financial Times
Credit rating agency Fitch has scaled back its expectations of the UK reaching an orderly transition deal with the EU on Brexit, warning that “an acrimonious and disruptive no-deal Brexit is a material and growing possibility”. Since Britain’s vote to leave the EU in June 2016, the leading credit rating agencies have anticipated that an orderly departure, including a transition period, was the most likely outcome. However Fitch said on Thursday that this was no longer the case, in its view.
/goo.gl/cWFJgz

EU plan for capital markets union faces delay, warns Brussels; Project aiming to improve cross-border investment at risk due to slow progress by governments
Jim Brunsden in Brussels – FT
The EU’s financial services chief has warned that the bloc’s flagship project to boost private sector investment in business is in jeopardy, with governments lagging in approving the necessary laws.
/jlne.ws/2MjSEZo

The post NYSE vet Peggy Sullivan joins exec team at Vela; Nvidia’s Crypto Business Dries Up appeared first on John Lothian News (JLN).

First Read

Report from the International Blockchain Congress
By Chuck Mackie and Sarah Rudolph – JLN

The second International Blockchain Congress (IBC) took place on Friday at the Aon Center in Chicago. Topics ranged from crypto trading to smart contracts to the regulations surrounding ICOs. While the Congress was run much more efficiently than the first version, which fell hours behind schedule, this iteration saw much less in the way of attendance and speakers from outside the U.S. That said, a couple of speakers from Asia shed interesting light on cryptocurrency markets that those in the West rarely see or understand. Highlights from IBC included:

Panel: Crypto Trading 2018

Somewhat surprisingly, the Crypto Trading panel actually had very little to say about trading cryptocurrencies. Part of this stemmed from the fact that the panel was moderated by Tom Sosnoff from TastyTrade. Sosnoff is a very active trader himself, making between 10 and 15 thousands trades each year, but crypto trading will not appeal to him because the current composition of the crypto market bears little resemblance to the highly-regulated, centralized futures, equity and options products that he routinely transacts in. Simply put, there is a large gulf between crypto markets and the markets that Sosnoff is used to.

To read the rest of this report, go HERE.

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Hits & Takes
By JLN Staff

I will be in the JLN CBOT Building offices this afternoon. This will be my first visit since my hip replacement surgery on August 2. I am down to using just one crutch to get around.~JJL

The New Yorker’s George Packer has written a retrospective on the 2008 financial crisis.~JJL

It is not too early to sign-up for FIA EXPO in Chicago on October 16-18. The early bird rate is good through August 31.~JJL

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The Spread – Caddyshack Market – 8/17

JohnLothianNews.com

Another week, more Turkey worries. We don’t talk about that at all in this week’s options news recap, instead taking a peek at security, average bid/ask spreads and regulation.

Watch the video and see the stories referenced here »

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Can’t Afford a House? Blame the Apocalypse; New Zealand’s ban on foreign property buyers is crude, but it’s hard not to feel some sympathy.
Chris Bryant – Bloomberg
If one day you’re banned from buying your dream second home (or third, or tenth, or whatever) in the country of your choice, you’ll know whom to blame: tech tycoon Peter Thiel.
/jlne.ws/2BACvKa

****** When the apocalypse comes, ownership comes from lead, not paper.~JJL

ICO Halted; Misappropriation of Client Funds Not Halted; Rogue Trading
Gary DeWaal – Bridging the Week
The Securities and Exchange Commission banned the founder of a company that it claimed was involved in an illicit initial coin offering of a new digital token from ever serving as an officer or a director of a publicly-traded or reporting company. Importantly, although this action involved an ICO, the relevant digital token was not associated with any proposed new application on any blockchain. The SEC also fined a combined investment adviser and broker-dealer for not having written policies and procedures designed to detect misappropriation of customer assets by rogue representatives. And, unfortunately, misappropriation occurred.
bit.ly/2L8JmK4

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Friday’s Top Three
Two of our top three stories on Friday had readers thinking about our moral compass over the weekend. Our top read story of the day was Business Insider’s piece Emails show RBS bankers joked about crashing the US housing market before 2008. Traders joke about just about everything. Sometimes it ain’t so funny. Second went in a more positive direction, The Trade’s NYSE veteran Peggy Sullivan joins exec team at Vela. Third went back to the compass in the New York Post’s Whistleblower makes shocking IRS, insider trading allegations for alleged doings in 2003 to 2005. Could the SEC investigate the IRS? TBD.

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MarketsWiki Stats
131,497,003 pages viewed; 23,254 pages; 214,626 edits
MarketsWiki Statistics

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Lead Stories

Wall Street Erases the Line Between Its Jocks and Nerds; There used to be a strict hierarchy: Traders made money and won glory while programmers wrote code and stayed out of sight. Those days are over.
Liz Hoffman and Telis Demos – WSJ
Meet the straders. Part risk-taking trader and part computer-whiz “strategist,” they are prowling the halls at Goldman Sachs Group Inc., GS 0.16% erasing a once-religious line between the jocks and the nerds. “You say ‘trader’ and I don’t even know what we’re talking about,” said Adam Korn, a 16-year Goldman veteran. “Everyone who comes to sales and trading needs to know how to code.”
/jlne.ws/2ORl9dz

Britain is digging in for civil war over Brexit, destroying the pound
Jeremy Warner – Telegraph
Have no fear; everything will be fine. That has been the message over the past week from any number of politicians and commentators urging a clean, Leave means Leave, no-deal divorce from the European Union. It is not, however, what foreign exchange markets – in a characteristically cold, dispassionately calculating manner – are saying.
bit.ly/2vXkTCX

Bloomberg: Euronext considering $1B+ bid for IHS MarkitSERV
Seeking Alpha
Bloomberg reports that Euronext is the lead bidder to acquire IHS (INFO +0.1%) business MarkitSERV for at least $1B. The London Stock Exchange is also reportedly interested.
IHS initiated the sale process for the derivatives processing business back in May.
bit.ly/2nTp4eA

Cobinhood Founders Raise $20 Million for Blockchain That Processes 1 Million Transactions Per Second
CCN.com
The founders of cryptocurrency exchange Cobinhood are commissioning the development of a new blockchain capable of processing 1 million transactions per second, a massive undertaking given that Bitcoin transaction can take hours to complete and Ethereum transactions range from 1-5 minutes, with even Visa’s ~2000 tx/s being dwarfed in comparison.
/jlne.ws/2BsxC5D

Tariffs Will Hurt U.S. More Than Rest of World, Maersk Says
Christian Wienberg – Bloomberg
The U.S. economy will be hit many times harder than the rest of the world by an escalating global trade war, according the chief executive officer of A.P. Moller-Maersk A/S.
/jlne.ws/2nTenIY

Gold Investors ‘Give Up Hope’ as Biggest Short in History Builds
Ranjeetha Pakiam, Elizabeth Burden, Yakob Peterseil, and Eddie van der Walt – Bloomberg
Gold is hitting new milestones of misery.
Exchange-traded funds tracking the metal have bled assets for 13 consecutive weeks, the longest run in five years, investors have placed the biggest gold short on record, and bullion’s chief foe — a strong dollar — is extending its market grip.
/bloom.bg/2La4f7z

Beijing Enjoys the Bluest Skies in a Decade
Bloomberg News
Pollution readings fall since last summer as gas replaces coal; China’s clean air targets boost gas and steel rebar prices
Beijing residents have been breathing some of the cleanest air in a decade as they begin to reap the benefits of China’s anti-smog push.
/jlne.ws/2BunPMw

JonesTrading Names Cabot Henderson As Market Strategist
JonesTrading
JonesTrading Institutional Services LLC named Cabot Henderson as Risk Arbitrage Market Strategist. This enhances JonesTrading’s capabilities as the leading block trading firm in risk arbitrage and event driven trading situations.
/goo.gl/qQcWyf

Gundlach Warns Record Treasury Shorts Risk Pain on Squeeze
Adam Haigh and Ruth Carson – Bloomberg
DoubleLine Capital CIO sees risk of Treasuries short squeeze; Net short speculative positions hit highest on record
A giant of fixed-income markets is warning that a build-up of speculative short positions in the U.S. Treasuries market is setting those traders up for pain ahead.
/jlne.ws/2ORe7pi

Mifid II impact on small and mid-cap brokers fuels consolidation talk; New European investment research rules trigger sharp drop in commissions
Hannah Murphy – FT
The UK’s small and mid-cap stockbrokers have begun to feel the impact of new European markets rules, prompting predictions of consolidation across the industry.
/jlne.ws/2OR0K8j

Stock Market Is Taking Cues From the Private Market; Ample venture capital and low rates offer companies myriad options for raising capital without going through expensive IPOs
Ben Eisen – WSJ
The rise of private markets where companies are free from the constraints of quarterly reporting is already reshaping the makeup of the public stock market.
/jlne.ws/2ONLU2w

The Woman Who Has a Plan for Wall Street to Help Cure Blindness; Karen Petrou spent years trying to hide her blindness. Now she has come up with a plan to get private investors to bankroll a cure.
By Christina Rexrode – WSJ
Karen Petrou, an influential adviser to bankers and regulators, has made a career of deciphering complicated financial regulations. Now she’s trying to decode another type of puzzle.
/jlne.ws/2Bu7qaW

Exchanges, OTC and Clearing

The World Federation of Exchanges proposes enhancements to FSB’s Cyber Lexicon
WFE
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published its response to the Financial Stability Board’s (FSB) Cyber Lexicon Consultation.
bit.ly/2w53ybl

CME extends bitcoin futures incentive scheme | News
Global Investor Group
The exchange is also listing E-mini S&P Communication Services Select Sector Index futures
bit.ly/2vXjDiU

Rubber futures to trade on MCX; Trading to start Aug. 16; to help ‘price discovery, hedging’
The Hindu
The Multi Commodity Exchange of India (MCX), the country’s largest commodity exchange in terms of market share, will commence trading in rubber futures contracts from August 16
/jlne.ws/2ByZbKq

BSE, NSE to suspend trading in up to 9 firms from Sep 10; While both BSE and NSE will together suspend Gitanjali Gems, Amtek Auto, Easun Reyrolle and Panoramic Universal, BSE will suspend trading in 5 other companies
Business Standard
Leading exchanges BSE and NSE will suspend trading in shares of as many as nine firms, including banking fraud accused Mehul Choksi’s Gitanjali Gems, from September 10 for not complying with listing norms pertaining to submission of financial results.
/jlne.ws/2BssQ8b

Fintech

Bank of England chief economist warns on AI jobs threat
Kamal Ahmed – BBC
The chief economist of the Bank of England has warned that the UK will need a skills revolution to avoid “large swathes” of people becoming “technologically unemployed” as artificial intelligence makes many jobs obsolete.
/jlne.ws/2MF6W5Y

Citi invests in fixed income e-trading technology startup; TransFICC has secured a strategic investment from Citi and has become the first external company to join its Innovation Lab in London.
Hayley McDowell – The Trade
Citi has made a strategic investment in an electronic trading technology startup for fixed income and derivatives markets, The TRADE can reveal.
/jlne.ws/2OPgbxM

Let’s Get Personal: How Fintech Will Save The High Street
Madhvi Mavadiya – Forbes
UK high street retailers are struggling with customer footfall because of technological advancements in recent years, ensuring that consumers have easier, faster and cheaper ways of purchasing what they need.
While this is just a marker of transformation through innovation, what hasn’t changed is that customers still want to use services provided by companies that they trust and it is clear is that the high street need to introduce new innovative rewards for it to thrive again.
bit.ly/2wg0qIL

As financial technology pushes ahead, push for updating regulations grow
Brian Croce – Pensions & Investments
A number of new reports and proposals are calling for an update to regulations surrounding fast-changing financial technology, a move that institutional investors said would bring certainty to the market and increase efficiencies.
bit.ly/2wiuVh6

FIS signs big office lease in Milwaukee
Sean Ryan – Milwaukee Business Journal
Fidelity National Information Services is moving its Milwaukee-area offices to West Parkland Avenue from Menomonee Falls.
/jlne.ws/2BAEYEq

Cryptocurrencies

Crypto is Taking Over Venezuela, Due to the Country’s Destroyed Fiat System
Thomas Delahunty – NewsBTC
Venezuela is facing hyperinflation and international sanctions that have brought the economy and its people to their knees. In response, President Nicolás Maduro recently mandated that his Petro crypto will become the nation’s second official currency starting tomorrow, August 20.
bit.ly/2wmPLw7

Study claims that over 60% of the top 100 currencies don’t have a working product
Richard Allen – Chepicap
Of the world’s 100 biggest cryptocurrencies by market cap, research has shown that just 36% of them have what the researches call a “working product.”
bit.ly/2whO4j8

Wall Street Interest in Crypto at All Time High
bitGuru
Speculation surrounding Wall Street and cryptocurrencies continues to be at the heart of crypto markets. It is being reported that Wall Street interest in crypto is as an all time high.
Although the general crypto markets have seen an 80% decline throughout 2018, Wall Street firms are showing particular interest in bitcoin and crypto related products such as, crypto custody and asset management.
bit.ly/2L8ox1y

Bitcoin’s energy usage is huge – we can’t afford to ignore it
Alex Hern – The Guardian
The cryptocurrency uses as much CO2 a year as 1m transatlantic flights. We need to take it seriously as a climate threat
Bitcoin’s electricity usage is enormous. In November, the power consumed by the entire bitcoin network was estimated to be higher than that of the Republic of Ireland. Since then, its demands have only grown. It’s now on pace to use just over 42TWh of electricity in a year, placing it ahead of New Zealand and Hungary and just behind Peru, according to estimates from Digiconomist. That’s commensurate with CO2 emissions of 20 megatonnes – or roughly 1m transatlantic flights.
/jlne.ws/2nTeJzi

What next for cryptocurrencies after bubble bursts?; Bitcoin, the original and most valuable crypto, has plummeted from $19,000 to $6,000-$8,000
Chloe Cornish and Hannah Murphy in London – FT
The cryptocurrency bubble has burst. In January, the total market capitalisation of cryptocurrencies had climbed beyond $800bn, up from just $18bn a year earlier according to data provider CoinMarketCap. Now the market has lost three-quarters of its value to stand at $200bn.
/jlne.ws/2nQKf0B

Coinbase Isn’t Adding 50k Users Each Day, But Blockchain’s Wallet Is
Nick Chong – Ethereum World News
Earlier this week, Ethereum World News reported that Coinbase CEO Brian Armstrong explained in an interview that his cryptocurrency platform was receiving an influx of “more than 50,000 (people) a day signing up.” Many individuals saw this as a bullish sign, with many noting that this figure indicates that the market is continuing to garner the interest of individuals, despite the overall downtrend in prices.
bit.ly/2wcNALn

What It’s Like to Be a Woman In China’s Get-Rich-Quick Crypto Culture
Sa Wang – Coindesk
We hear a lot about women (or the lack thereof) in the cryptocurrency and blockchain space.
Confirming what many of us already suspected, CoinDesk’s Q2 2018 State of the Blockchain Report found that only 4 percent of crypto investors are women. In tandem, reporters regularly call the “blockchain bros” on the carpet for elbowing women out of yet another lucrative emerging industry.
bit.ly/2L9H25F

As Iran turns to Bitcoin and its own cryptocurrency to avoid sanctions, maybe it’s time to build another Stuxnet
Morgan Wright – The Hill
Iran is doing what every respectable state sponsor of terrorism does when their economy is going down the drain. They turn to bitcoin. Just like North Korea did (and still does). As bitcoin outpaces the Rial (Iran’s currency), the next wave of ransomware attacks will be coming soon, courtesy of Iranian hackers. And the payment will, of course, be in bitcoin.
/jlne.ws/2Burt9a

China’s biggest-ever bitcoin heist: three held over theft of US$87 million in cryptocurrency; Suspects detained in coordinated raids on suspicion of stealing millions in virtual money from computers
Alice Yan – South China Morning Post
Three men have been detained on suspicion of hacking into computers and stealing about 600 million yuan (US$87 million) worth of virtual currency, police in northwest China said.
/jlne.ws/2BnwCQh

4 Women Who Make a Difference in Blockchain
Avi Salzman – Barron’s
Big technology companies have routinely failed to hire women for new projects, or promote them to management and board positions. But with blockchain, women have led the way on some of the most important projects, both at tech companies and start-ups.
/jlne.ws/2BsA4ZN

A team at Northwestern think they have solved one of bitcoin’s biggest problems
Aaron Hankin – MarketWatch
A problem tied to how bitcoin and other cryptocurrency transactions are processed and completed has long dogged enthusiasts of the digital-asset community, but a group of scholars believe that they may have a solution.
/jlne.ws/2BEbtBF

Politics

Vernon Jordan: ‘It’s not a crime to be close to Wall St’; The White House and Wall St powerbroker on race, his friends the Clintons and being a Beltway insider
Sujeet Indap – FT
We have barely sat down and the mobile phone of one of the most connected men in America is ringing. Vernon Jordan and I have just arrived at San Pietro, the homey Italian power lunch spot in Midtown Manhattan where he is a regular. He apologises but really must take this call. Is it perhaps a senator or captain of industry? By the time the call ends San Pietro is humming with Masters of the Universe, and I soon have to move to Jordan’s side of the table to hear him above the din. My back is to the throng, but occasionally I turn my head and confirm that — yet again — he is the only black person in the room.
/jlne.ws/2nTiip6

Trump Tax Cut Unlocks Millions for a Republican Election Blitz
Jim Tankersley and Michael Tackett – NY Times
Republicans are struggling to make the $1.5 trillion Trump tax cuts a winning issue with voters in the midterm congressional elections, but the cuts are helping the party in another crucial way: unlocking tens of millions of dollars in campaign donations from the wealthy conservatives and corporate interests that benefited handsomely from it.
/jlne.ws/2MAf2gk

Who Is ‘Q’? Behind the Conspiracy Theory Erupting at Trump Rallies
AP
Amid the “Trump 2020” placards, the “Women for Trump” signs and the “CNN SUCKS” T-shirts, the most inscrutable message that came out of Donald Trump’s Tampa rally on Tuesday evening was a letter.
/jlne.ws/2BsUvpH

Lieu: Giuliani saying ‘truth isn’t truth’ is another step toward ‘authoritarianism’
Brett Samuels – The Hill
Rep. Ted Lieu (D-Calif.) said Sunday that Rudy Giuliani’s argument that he’s hesitant to allow President Trump to interview with the special counsel because “truth isn’t truth” harkens back to former President Nixon’s defense of his actions during the Watergate scandal.
/jlne.ws/2OR5ZFc

From Alternative Facts to “Truth Isn’t Truth”
Ros Krasny and Mark Niquette – Bloomberg
Lawyer says sitting down with Mueller may be a perjury trap; Says 2016 NYC meeting with Russia was to seek Clinton dirt
“Truth isn’t truth,” Donald Trump’s lawyer Rudy Giuliani said on Sunday in discussing why having the president be interviewed by Special Counsel Robert Mueller for the probe into election interference isn’t a good idea.
/jlne.ws/2ON6gci

Why Trump Should Stay the Course With Mueller; It’s clear that ending the investigation would make matters worse for his administration.
Jonathan Bernstein – Bloomberg
President Donald Trump’s supporters are pushing hard for him to do something about Special Counsel Robert Mueller. The president himself and his legal team are stressing cooperation, though that position can change in a matter of hours in this administration (and may have changed if Thursday night’s comments on the Justice Department are any guide).
/jlne.ws/2Bolv9y

David Stockman: ‘Unhinged White House’ to cause stock market crash
Stephanie Landsman – CNBC
Just days before the anniversary of what’s expected to be the longest bull market in U.S. history, David Stockman is warning investors a crash is inevitable.
/jlne.ws/2OLSGG3

Carbon emission proposals to boost Trump’s drive to revive coal; Release of plans coincides with rally in West Virginia heartland ahead of midterm elections
Ed Crooks in New York – FT
The US administration has drawn up proposals to replace Obama-era rules on carbon dioxide emissions with measures to support coal-fired power plants, as President Donald Trump seeks to fulfill his campaign pledge to “put our miners back to work”.
/jlne.ws/2BtueHI

Democracy Needs the Press as the ‘Opposition Party; The Founding Fathers understood opinion journalism as key for informing the public, by presenting another point of view than the president’s.
Noah Feldman – Bloomberg
What’s the main value in a free press? To hear the press tell it — as in many of the 350-plus editorials published in coordination last week in response to the president’s anti-press rhetoric — the answer is factual, objective coverage of events.
/jlne.ws/2BswI99

Regulation

After the Financial Crisis, A Decade of Damage
Jacob Soll – The New Republic
We already know much of the story that Adam Tooze tells in Crashed: How a Decade of Financial Crises Changed the World, his ambitious study of the causes and effects of the financial meltdown that caused the Great Recession. The opening pages of his book recount the events of September 16, 2008, “the day after Lehman.” In a matter of hours, the Dow Jones plummets “778 points, wiping $1.2 trillion off the value of American businesses.” The entire financial system begins to unravel and it becomes clear that the mortgage-based CDOs and credit default swaps that underpinned world banking are nearly worthless. Mutual funds pull back from investing and banks face an immediate shortage of funding. World lending begins to freeze altogether. European countries face capital shortages. The entire world economic system is on the edge of collapse.
bit.ly/2wjOIwW

British watchdog says cryptocurrency scams on the rise
Reuters Staff
Cryptocurrency scams are using images of celebrities and upmarket London addresses to hoodwink consumers into parting with cash, Britain’s Financial Conduct Authority has said.
/jlne.ws/2BsK8lF

Brussels to act against tech groups over terror content; Threat of fines after commission sees insufficient progress on voluntary action
Mehreen Khan in Brussels – FT
Brussels plans to force companies including Facebook, YouTube and Twitter to identify and delete online terrorist propaganda and extremist violence or face the threat of fines.
/jlne.ws/2BtycA0

‘Useless and toothless’ UK accounting regulator fines KPMG £2m for ethical standards breach
Karin Matussek – BusinessDay
For KPMG, another week, another rebuke from UK accounting regulators.
KPMG was fined £2.1m by the Financial Reporting Council (FRC) following its admission of misconduct on Ted Baker’s financial statements in 2013 and 2014. In addition, a KPMG partner, Michael Francis Barradell, was reprimanded by the regulator and fined an additional £46,800.
bit.ly/2Lafygm

SEC Adopts Amendments to Simplify and Update Disclosure Requirements
SEC
The Securities and Exchange Commission today announced that it has voted to adopt amendments to certain disclosure requirements that have become duplicative, overlapping, or outdated in light of other Commission disclosure requirements, U.S. Generally Accepted Accounting Principles (GAAP), or changes in the information environment.
/jlne.ws/2BnAq41

Reminder – FINRA Changes to FIX Trade Reporting Related to Processing of Execution Time
FINRA
FINRA reminds clients that beginning Monday, August 20, 2018, a change to all FIX trade reporting related to the processing of execution time during Daylight Savings Time (DST) will go into effect. This update affects clients’ transaction reports for all FINRA Multi Product Platform products (MPP), including TRACE, the OTC Trade Reporting Facility (ORF), and The Alternative Display Facility (ADF).
/jlne.ws/2BtTkX7

Reminder – Equity Short Sale Validations
FINRA
FINRA reminds clients that effective Monday, August 20, 2018, validations will be applied to the OTC Trade Reporting Facility (ORF) and the Alternative Display Facility (ADF) for equity transactions submitted with the Short Sale Indicator.
/jlne.ws/2ORhWe8

Investing and Trading

The Case for a 50-Year Bull Market
Steve Garmhausen – Barron’s
As head of Merrill Lynch Wealth Management, Andy Sieg oversees the so-called thundering herd of 14,820 financial advisors, the second-largest workforce among the big brokers.
/jlne.ws/2OT7KBV

JPMorgan to Shut Investment Accounts for Foreign Retail Clients
Michelle Davis – Bloomberg
JPMorgan Chase & Co. retail clients who don’t live in the U.S. will no longer be able to keep investment accounts as the bank shuts a business that it’s operated for decades.
/jlne.ws/2BulX6s

Too close for comfort: the incestuous ties that bind auditors and watchdogs; Concerns that audit market is too beholden to the clients whose numbers it vets
Madison Marriage and Jonathan Ford in London – FT
Stephen Haddrill has the look of a man with the weight of the world on his shoulders. At his most recent public appearances, the 62-year-old boss of Britain’s accounting watchdog appeared tired and grey.
/jlne.ws/2BpVdUI

The Biggest Risks for U.S. Equity Investors; Diverging growth in the global economy tops the list; Turkey is at the bottom.
Mohamed A. El-Erian – Bloomberg
In recent weeks, U.S. stock markets have moved up and down in response to issues that go well beyond the traditional direct drivers of economic growth and corporate earnings. These “known unknowns,” to borrow a phrase from former Defense Secretary Donald Rumsfeld, include the aftermath of the currency crisis in Turkey, the trade tariffs and sanctions skirmishes, the more uncertain outlook for the global economy and the exit from unconventional monetary policy.
/jlne.ws/2OPIo7L

What connects God, speeding and ‘the next epic economic crisis’
Shawn Langlois – MarketWatch
The Wall Street Journal once described him as “perhaps the most powerful journalist in America.” President Donald Trump, however, isn’t nearly as impressed, having called him a “political moron.” Oh, and “a total dope” and “a loser.” With mixed reviews like that, it’s no wonder George Will’s colorful prediction of a looming fiscal crisis stirred up plenty of buzz over the weekend.
/jlne.ws/2BsNlBM

U.S. value stocks capitalize on ‘FANG’ stumbles, with room to run
James Thorne – Reuters
The summer roller-coaster in two of the four big-cap ‘FANG’ names – Facebook Inc, Amazon.com Inc, Netflix Inc and Google-parent Alphabet Inc – has led to a shift, albeit slight, into value stocks.
/jlne.ws/2ORiUa9

Institutions

State Street acquires FX TCA startup BestX; State Street makes another move into front office trading technology with acquisition of FX TCA provider BestX.
Hayley McDowell – The Trade
Boston-based custodian giant State Street has acquired a transaction cost analysis (TCA) specialist for foreign exchange (FX) markets in the bank’s latest move to boost front office capabilities.
/jlne.ws/2Bs6a7X

State Street acquires London foreign exchange startup BestX; Acquisition follows State Street’s purchase of Charles River Development for $2.6bn
Samuel Agini – Financial News
State Street has acquired a London-based forex startup in a deal that underscores how fund managers are turning to new technologies to help gain an edge in markets and stay on the right side of regulation.
/jlne.ws/2BrYvGH

Former UBS worker calls for police investigation into alleged assault; ‘I want some form of justice — he wronged me’
Laura Noonan in London – FT
A former UBS employee has asked UK police to investigate an alleged sexual assault by a more senior colleague after deciding the bank had failed in its attempts to deal fairly with her case.
/jlne.ws/2OPJDny

Former Lehman Brothers staff are hosting a secret party on the 10-year anniversary of the bank’s collapse
Will Martin – Business Insider
The 10-year anniversary of the collapse of Lehman Brothers is just weeks away and, for most people, it will be a reminder of the banking excesses that led to the financial crisis.
/jlne.ws/2BsvieV

Credit Suisse Sees Asia Wealth Race Shift From Offshore Hubs
Chanyaporn Chanjaroen and Alfred Liu – Bloomberg
Seeking at least $10 billion of assets in each Asia market; Credit Suisse APAC wealth head de Ferrari speaks in interview
After years of racing to accumulate assets in the key offshore centers of Singapore and Hong Kong, the challenge for wealth managers in Asia is shifting to cities such as Manila, Jakarta and Shanghai.
/jlne.ws/2ONEQ60

BNP Paribas Sees Profit Revival in Asia’s Best Equity Market
Santanu Chakraborty – Bloomberg
Nifty 50 earnings growth to hit 25% in FY19, analysts predict; BNP’s Shah says consumer stocks will give “good growth”
Earnings at companies listed in India, Asia’s best-performing stock market this year, can return to 2006 highs if the nation doesn’t enact any more “disruptive” economic policies, according to BNP Paribas Asset Management.
/jlne.ws/2BsJg0n

Goldman Faces Losses on Venezuelan Bond Deal That Drew Criticism; Venezuela bond declines underscore the risk Goldman and its clients took on with an opportunistic investment in a country facing challenges
Matt Wirz – WSJ
Goldman Sachs Group Inc.’s GS 0.16% approximately $865 million purchase of bonds from Venezuela’s central bank last year attracted criticism from around the world.
/jlne.ws/2BsVoP3

Deutsche Bank CFO Urges Staff to Travel Less to Hit Cost Targets
William Canny and Steven Arons – Bloomberg
Deutsche Bank AG’s chief financial officer wants staff to think twice before booking a flight.
/jlne.ws/2Bu6h38

Regions

Trade war imperils foreign banks’ China plans; Scramble to take majority stakes in mainland operations under threat
Martin Arnold in London and Gabriel Wildau in Shanghai – FT
As the trade war between the US and China intensifies, there is a growing expectation that collateral damage could spill on to Wall Street, disrupting US banks’ plans to expand in mainland China.
/jlne.ws/2nSaX9p

Venezuela’s 95% Devaluation Adds to Chaos After Drone Attack
Eduardo Thomson and Fabiola Zerpa – Bloomberg
Harsh economic measures may test Maduro’s grip on power; Inflation likely to worsen after devaluation, wage increase
Venezuelan President Nicolas Maduro carried out one of the greatest currency devaluations in history over the weekend — a 95 percent plunge that will test the capacity of an already beleaguered population to stomach even more pain.
/jlne.ws/2nYicwB

Hong Kong Bears Pile Into Short Bets on Chinese Automakers
Jeanny Yu and Cindy Wang – Bloomberg
Several Chinese automakers are among the worst performers in Hong Kong’s equity markets this year, and their slump may be far from over.
Bets to go short BYD Co. soared to the highest in at least 12 years this month, according to IHS Markit Ltd. data, turning the Warren Buffett-backed Chinese manufacturer into the second-most shorted stock in the city. Bearish wagers on Brilliance China Automotive Holdings Ltd. are near the highest in more than six years. Since May, investors have also boosted short interest in Great Wall Motor Co. as a percentage of shares outstanding to a one-year high after their bets surged more than a year ago, Markit data show.
/bloom.bg/2wikE4u

Turkey Gets Swap Deal With Qatar to Bolster Lira as Markets Fret
Constantine Courcoulas – Bloomberg
Traders brace for thin liquidity amid weeklong public holiday; First phase of deal expected to be $3b, according to Anadolu
Qatar agreed to help the Turkish economy weather a currency rout with a credit line to backstop its financial system, the first concrete measure after the Gulf nation pledged as much as $15 billion of investment in Turkey.
/jlne.ws/2OQTJVf

U.K. Home Prices Dip With London Leading `Late Summer Sale’
Karoliina Liimatainen – Bloomberg
August drop was the biggest for the month since 2001; First-time homes are now the cheapest since 2015 in London
U.K. home sellers are offering the deepest summer price cuts on record as they try to get rid of their homes during the holidays.
/jlne.ws/2BsJ9lt

Indian Markets Look Headed for Further Extremes
Andrew Peaple – WSJ
“Incredible India,” goes the tourism ad jingle. Incredible is one word for markets in the giant Asian economy right now.
/jlne.ws/2OK7KnG

Iran lawmakers target Rouhani’s finance minister as sanctions bite
Reuters Staff
Iranian lawmakers launched impeachment proceedings against the finance minister on Sunday, ramping up pressure on the president who is already facing attacks from hardliners over his handling of the economy in the face of new U.S. sanctions.
/jlne.ws/2Bts4b4

Brexit

Buy-side looks to keep location of trading desks in spite of Brexit; Study by Liquidnet found that 87% are not looking to relocate trading desks ahead of the UK’s departure from the EU, but this could be temporary.
Hayley McDowell – The Trade
The majority of asset managers and hedge funds are looking to keep trading desks where they are despite many institutions establishing bases in Europe outside of the UK ahead of Brexit.
/jlne.ws/2Bs1fEf

EU migrants will be given right to stay in event of no-deal Brexit, Cabinet papers reveal
Steven Swinford – Telegraph
Britain will give EU migrants a unilateral right to stay in the UK in the event of a no deal Brexit amid concerns that failing to do so would lead to labour shortages, leaked Cabinet papers reveal.
/jlne.ws/2BphNN0

No-Deal Brexit: A Lose-Lose for UK and EU Financial Stability
John Glover – Insurance Journal
With Brexit talks back from the summer holidays, it’s worth considering one way in which failure to reach a deal before the U.K.’s departure in March would also be bad for the European Union.
Such an outcome would unsettle the City of London, the motor of the British economy. But the danger for the EU is that Britain responds by emulating the U.S. in cutting taxes and deregulating. A low-regulation nirvana would go against the EU’s desire for a “level playing field” after Brexit, while also threatening financial stability in the other 27 member states — just as the bloc is being sucked into a trade war with Donald Trump.
bit.ly/2L8rcby

Miscellaneous

Think you can spot a fraud? This $80 million art scam fooled the experts
Scott Cohn – CNBC
The biggest art fraud in modern U.S. history was shockingly simple. Yet it went on for 15 years, duped some of the world’s most sophisticated collectors, brought down a 165-year-old New York gallery, and brought in more than $80 million. It is also a cautionary tale for anyone thinking of dabbling in the art world.
/jlne.ws/2BrWx9h

Why it’s so hard to resist the lure of #fakenews
Quentin Fottrell – MarketWatch
President Trump’s relationship with the media just reached a new level of acrimony. On Thursday, some 350 American newspapers published editorials taking issue with Trump’s description of the media as “the enemy of the American people.” Earlier this month, The Boston Globe reached out to editorial boards to send a message to the White House. ”We are not the enemy of the people,” Marjorie Pritchard, deputy managing editor for the editorial page of The Boston Globe, told the Associated Press. Trump’s tweet referenced what he called “fake news.”
/jlne.ws/2BpPr5t

Control Alt Delete, by Tom Baldwin; A personal memoir of the fake news crisis in British and American journalism
Review by George Parker – FT
Tom Baldwin has a lot to get off his chest. When we first met some 25 years ago, he and I were regional newspaper hacks sharing a crowded Victorian office at Westminster; Baldwin would smoulder with frustration in the corner, behind a yellowing pile of old papers, occasionally erupting with a splutter of indignation as he chronicled the activities of his local MPs.
/jlne.ws/2Bu6Cmq

The post Wall Street Erases the Line Between Its Jocks and Nerds appeared first on John Lothian News (JLN).

First Read

Custody Battle Brewing Over Crypto Assets, and That’s a Good Thing
Jim Kharouf, JLN

It was just a few months ago that the cryptocurrency markets were bemoaning the lack of institutional-grade custody services. Without them, no right-minded fund or asset manager was going to get anywhere near this market.

And if they did, they had already written their firm’s obituary and put it in a drawer just in case. It reads something like this: “Thank you, dear customer, for investing your hard-earned fiat currency into our kick-ass digital asset fund. Unfortunately, someone in the Seychelles, Pyongyang, Kiev, Tehran or all of the above has stolen our crypto assets. With regret, we will be liquidating the fund. With no crypto assets left, there will be no repayment. Please come back and invest more hard currency in this space when we launch our next and hopefully more secure fund.” This narrative is changing rather quickly.

For the rest of this story, go HERE.

++++

Hits & Takes
By JLN Staff

Yesterday’s most read story was Bloomberg’s Can’t Afford a House? Blame the Apocalypse about New Zealand’s ban on foreign ownership of homes. A Guardian piece said from 2008 to 2014, two-thirds of property purchases in London were made by companies from just four overseas tax havens.~JK

It’s not too late to sign up for the Voice of Blockchain Conference 2018 – August 24th and 25th at Navy Pier. Click here and enter the code “vob18” for a $50 discount on registration. ~CM

ISDA Quarterly (IQ) is out. A PDF copy can be found here.~SD

The Canadian ETF business, much like that of the U.S., is booming. According to ETFGI, ETFs and ETPs listed in Canada reached a record high of $123 billion in assets in July. ~SD

Going into the office yesterday was a more painful experience than I expected, after the fact. Perhaps I am not quite there physically yet.~JJL

++++

MWE World of Opportunity – Transitioning Between Startups and Large Companies

JohnLothianNews.com
“One of the things you need to understand about yourself is how you manage your personal finances. A lot of people don’t talk about that. But if you want the flexibility to go to a startup, you can’t do that with two car payments, and a mortgage at the top rate, and credit card debt.”

All companies are not created equal. Healthcare, time off, travel – these aspects of a job will differ depending on the firm. In this video from MarketsWiki Education’s Chicago event, Adam Honoré, executive director, head of product management, data services with CME Group, discusses the differences between working at a startup compared to a large, established company and the skills needed to succeed in both.

Watch the video here »

++++

Could Trade War Lead to the Real Thing?; Historically, we’ve failed to see tipping points until too late.
Kevin Rudd – Bloomberg
News that China and the U.S. will resume trade talks this week swiftly lifted markets. This follows the first meetings at the annual summer retreat of the Chinese Communist Party leadership at the beachside resort of Beidaihe. As might be expected, the main topic this summer has been the U.S.-China trade war, where it might lead and what could conceivably be done to avert it without an unacceptable loss of political face.
/jlne.ws/2MDvcW5

***** Yes, they can.~JJL

++++

The Most Powerful Fed Economist You’ve Never Heard Of Is Retiring
Craig Torres – Bloomberg
David Wilcox, the Federal Reserve division director who guided three chairs on the outlook for the U.S. economy, will retire at year end, the central bank’s Board of Governors said on Monday.
As director of the Division of Research and Statistics in Washington since July 2011, Wilcox, 59, served under chairs Ben Bernanke, Janet Yellen and Jerome Powell. A search for his successor will begin later this year.
/bloom.bg/2OQyZNo

****** Who?~JJL

++++

Roland Schwinn leaves Eurex
Eurex
Roland Schwinn, regional head for Asia at Eurex, has decided to resign for personal reasons as of 31 August. “I thank Roland very much for his excellent work and commitment to our business”, says Eurex CEO Thomas Book, who is also Executive Board Member of Deutsche Boerse Group. “He contributed significantly to Eurex’ success and growth in Asia, being a highly valued contact for our clients, regulators and Eurex colleagues all over the world.”
/jlne.ws/2OPL31g

***** Best wishes to Mr. Schwinn.~JJL

++++

Monday’s Top Three
Our top stories of the day were led by Bloomberg’s piece Can’t Afford a House? Blame the Apocalypse on the curious step New Zealand is taking to ban foreign ownership of real estate, making London readers go “hmmmmm.” Second is the Wall Street Journal piece Wall Street Erases the Line Between Its Jocks and Nerds, as part of the non-stop categorization trend. Third was the JLN report on the only Congress that appears to be working, in Report from the International Blockchain Congress

++++

MarketsWiki Stats
131,545,226 pages viewed; 23,256 pages; 214,652 edits
MarketsWiki Statistics

++++

Lead Stories

CME pulls ahead in race to control bitcoin futures; Rival Cboe relaxes trading rules in attempt to bolster cryptocurrency business
Gregory Meyer in New York – FT
The world’s largest exchange group is pulling ahead in the nascent bitcoin derivatives market and its rival has retooled its product to stay in the race.
/jlne.ws/2MCO7Aq

Winklevoss Effort to Self-Regulate Cryptocurrency Gets Members; Exchanges will use new association to push for standards, transparency
Paul Vigna – WSJ
Several cryptocurrency exchanges have signed on to what appears to be the industry’s first self-regulatory organization, a step toward transparency in the notoriously opaque and volatile market.
/jlne.ws/2BvXFZF

Jump Trading joins challenge to banks in Treasury market making; High-frequency trader aims to take asset management and pension fund clients
Joe Rennison in New York – FT
One of the biggest high-frequency trading firms is looking to cut into banks’ long-held dominance in Treasury markets, as non-bank dealers increase their reach in the world’s largest government bond market.
/jlne.ws/2MGtm73

Bakkt CEO: Crypto Trading Platform Won’t Support Margin Trading
Muyao Shen – Coindesk
Two weeks after the Intercontinental Exchange (ICE) introduced Bakkt, a new digital assets platform, the latter’s CEO has set out to explain what the service will offer consumers. Bakkt chief executive Kelly Loeffler outlined the fundamentals for a platform to trade, store or spend cryptocurrencies in a post published on August 20. The platform is currently working with what she described as “a proven framework that underpins exchanges” which will include three characteristics: it will be consistent with existing regulations, provide a transparent system for price discovery and offer “institutional quality pre-and post-trade infrastructure.”
/jlne.ws/2ORhVXu

***** Kelly Loeffler is the CEO of Bakkt? How did I miss that? It was announced the day after my surgery. There you go. Congratulations Kelly~JJL

The Biggest Digital Exchanges Are Teaming Up To Police the Crypto Space
Matthew Leising – Bloomberg
The Virtual Commodity Association seeks to stamp out cheating; Members include Gemini, Bitstamp, BitFlyer and Bittrex
Several of the world’s largest digital exchanges joined an effort to root out bad behavior in the $214 billion cryptocurrency industry.
/jlne.ws/2nSns4u

JP Morgan to unveil new investing app with an eye-catching, disruptive price: Free
Hugh Son – CNBC
J.P. Morgan Chase is about to lob a grenade into the increasingly competitive world of retail investing. The bank is rolling out a digital investing service next week that comes bundled with free or discounted trades, a sophisticated portfolio-building tool and no-fee access to the bank’s stock research. Anyone who downloads J.P. Morgan’s mobile banking app or uses its website can get at least 100 free trades in the first year.
/jlne.ws/2MLj7hA

Exclusive: Trump demands Fed help on economy, complains about interest rate rises
Jeff Mason, Steve Holland – Reuters
U.S. President Donald Trump said on Monday he was “not thrilled” with the Federal Reserve under his own appointee, Chairman Jerome Powell, for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.
/goo.gl/RxdKTd

Row erupts as Sibos takes hard line on ‘ragbag’ crypto firms
Yolanda Bobeldijk – Financial News
The organiser of Sibos, the world’s biggest banking technology conference, has taken a hard line on cryptocurrency firms exhibiting at its upcoming conference in Australia, sparking a row between the events company and the fintech sector. Fintech firms have been told by sales representatives at Sibos that the annual gathering — which will see more than 8,000 people gather in Sydney in October — is cracking down on crypto startups presenting their products at the event, according to people familiar with the matter.
/goo.gl/ngcMyV

Ex-Barclays Trader’s Win Opens Path for Fired London Bankers
Jonathan Browning and Kaye Wiggins – Bloomberg
Fotheringhame wins long-shot court case to permit return; Banker had been fired at 2015 request of New York regulator
David Fotheringhame said he doesn’t bear grudges. The former Barclays Plc trader, fired at the behest of a New York regulator for misusing an electronic trading program, was pursuing the longest of shots in his fight against the bank. Sitting without an attorney, facing top lawyers on the other side of a London courtroom, Fotheringhame insisted from the very outset he wanted his old job back.
/jlne.ws/2nUbcRh

Eurekahedge: Hedge Funds Trailing Behind Last Year’s Performance
AllAboutAlpha
According to Eurekahedge, with the July numbers on hedge fund performance now available, 8.5% of hedge fund managers have posted double-digit gains in 2018 to date. Most of that gain is focused on those with a long/short equities mandate.
That number is quite low. Eurekahedge contrasts it with the first seven months of 2017, when roughly 22.7% of the fund managers had posted double-digit gains.
/goo.gl/3k6qkh

Credit Suisse becomes first bank to issue debt tied to Sofr
Joe Rennison in New York – FT
Credit Suisse has become the first bank to issue debt tied to the new US interest rate chosen to replace the London Interbank Offered Rate (Libor), selling a $100m six-month certificate of deposit on Monday.
/jlne.ws/2MEGzxg

Interactive Brokers fined $5.5 million for violating short selling rules; FINRA has fined Interactive Brokers for failing to comply with short selling rules between 2012 and 2015.
Hayley McDowell – The Trade
Interactive Brokers has been fined $5.5 million by US financial authorities for violating regulations related to short selling and supervisory failures.
/jlne.ws/2OWdVoN

Korea Exchange says it checking Merrill Lynch trades because of public concerns
Hayoung Choi, Cynthia Kim – Reuters
The Korea Exchange (KRX) said on Tuesday it was monitoring Merrill Lynch’s (BAC.N) Seoul operations after media reports and petitions regarding the investment bank’s trades.
/goo.gl/zJvjNK

Exchanges, OTC and Clearing

trueEX exploring sale of post-trade derivatives platform; Derivatives platform truePTS launched just under three months ago, but trueEX confirms it is looking for a buyer.
Hayley McDowell – The Trade
US-based swap execution facility trueEX is looking for a buyer for its derivatives processing platform just weeks after it was officially launched, The TRADE understands.
/jlne.ws/2BvuZQn

Euro Fixed Income Futures: Definition of reporting and position limits for September 2018
Eurex
The reporting and position limits for the September 2018 contracts in the
Euro Fixed Income Futures were set as follows:
/jlne.ws/2OSKdAK

OTC Clear Welcomes New Clearing Member After Volume Surges Nearly 500 Per Cent
HKEX
The volume of OTC Clearing Hong Kong Limited (OTC Clear), a subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), has surged nearly 500 per cent this year while it welcomes China CITIC Bank International (CNCBI) as its 22nd Clearing Member.
/jlne.ws/2BtRRA4

Fintech

What, Exactly, Is Under the Hood at Fintech Companies?
Ben Walsh – Barron’s
There was a time when fintech had a novel idea: What if you could take social media data, run a bunch of analysis on it, and use it to make lending decisions?
Mortgages priced using Facebook profiles! Credit card offers based on how many times you Instagram from expensive restaurants. Or, in reality, far less whimsical things like “big data underwriting for payday loans.”
bit.ly/2OO1dbm

KPMG: Fintech investments in China sets new record
Enterprise Innovation
Fintech investment in China hit a record high in the first half of 2018, buoyed by record-setting fundraising and a number of massive deals, finds KPMG’s latest Pulse of Fintech report.
bit.ly/2LenEoe

Derivatives Vet Tessier Named Minium CEO
Hamad Ali – WatersTechnology
London-based Minium, a provider of real-time, post-trade technology and services to international investment banks and brokers, has promoted Patrick Tessier to CEO, following last week’s departure of Veronica Augustsson from parent company Cinnober, who served as CEO of Minium in her role as group CEO.
/goo.gl/k23avM

Shenwan Hongyuan Securities chooses Itiviti’s technology for ETF options market making; Itiviti services a substantial and diversified client base in China.
Markets Insider
Itiviti, the leading global provider of multi-asset trading technology and financial infrastructure, today announced that Shenwan Hongyuan Securities Co., Limited (Shenwan Hongyuan), one of China’s leading securities firms has selected Itiviti’s market making solution to support its ETF options market making business. Itiviti currently services 25 buy-side and sell-side clients in mainland China, including large asset managers, securities houses, trading firms and brokerages.
/jlne.ws/2nUYRfv

Thomson Reuters and the Singapore FinTech Association join forces to fight financial crime
Valentina Kirilova – Reuters
Information giant Thomson Reuters (NYSE:TRI) and the Singapore FinTech Association (SFA) have announced that they have committed to join forces on projects and initiatives contributing to the development of the FinTech industry in Singapore. The collaboration will involve working closely with financial institutions, local universities and startups, focusing on leveraging emerging technologies to solve issues around financial crime.
bit.ly/2OWDl5J

Nikko Asset Management Selects FactSet for its Fixed Income Operations
FactSet
FactSet, a global provider of integrated financial information, analytical applications, and industry-leading services, announced today that Nikko Asset Management (“Nikko AM”) has selected the FactSet Linear Multi Asset Class (MAC) risk model to help manage risk across its global fixed income portfolios.
/goo.gl/78939i

‘Amazon Bank’ Is Already Here
Steve Cocheo – The Financial Brand
Nothing can stop Amazon. Not even banking regulators or geographic borders can slow them down. With patents, patience, a willingness to fail, a huge and devoted customer base, a universe of data, and gobs of money, Amazon represents a real threat to the traditional banking industry.
/goo.gl/uXD64r

Cryptocurrencies

Here’s What Maduro Has Said of Venezuela’s Petro Cryptocurrency
Eric Lam – Bloomberg
Petro token will fluctuate in price, Maduro said on television; Critics have questioned whether the cryptocurrency is a ‘scam’
Venezuela’s 95 percent devaluation of the bolivar over the weekend is generating fresh interest in its cryptocurrency, which was designed to be devaluation-proof. Yet, months after the Petro was first offered to the public, President Nicolas Maduro has yet to remove some of the mystery surrounding the mechanics of the digital coin.
/jlne.ws/2MEp6Vz

The Biggest Digital Exchanges Are Teaming Up To Police the Crypto Space
Matthew Leising – Bloomberg
Several of the world’s largest digital exchanges joined an effort to root out bad behavior in the $214 billion cryptocurrency industry.
Created by Gemini Trust co-founders Cameron and Tyler Winklevoss, the Virtual Commodity Association expanded its roster of exchange participants to include Bitstamp, BitFlyer USA and Bittrex, according to a statement Monday. Representatives from the four marketplaces will meet for the first time in September to discuss setting up the self-regulatory organization.
/goo.gl/DnxWSQ

Gap Between Ethereum Longs and Shorts Rises to its Highest Level Ever
Trustnodes.com
The biggest disparity between ethereum longs and shorts has been seen on August 19th when 75% were betting ethereum’s price will rise (long), while just 25% thought it would fall (short).
That disparity is bigger than even during the peak in November-December when longs were slightly lower at 74%, and bigger than during April when longs were at 70%.
bit.ly/2ORpEVq

‘Bitcoin Jesus’ Is Having a Hard Time Winning Over True Believers
Olga Kharif – Bloomberg
Roger Ver, the virtual currency advocate often referred to as Bitcoin Jesus, is finding it tough to win converts to the supposed second coming of the the world’s biggest cryptocurrency.
/bloom.bg/2w11UHn

After the Bitcoin Boom: Hard Lessons for Cryptocurrency Investors
Nathaniel Popper and Su-Hyun Lee – NY Times
Pete Roberts of Nottingham, England, was one of the many risk-takers who threw their savings into cryptocurrencies when prices were going through the roof last winter.
/jlne.ws/2MLjl8q

Bitcoin Bulls’ Favorite Lingo On the Decline as Crypto Prices Fizzle
Lily Katz – Bloomberg
A popular slang term among Bitcoin believers is losing steam as the slump in global cryptocurrency prices continues.
/jlne.ws/2MHY4wk

The SEC Is Weighing a Bitcoin Futures ETF – Here’s What That Means
Christine Kim – Coindesk
The U.S. Securities and Exchange Commission (SEC) will decide on two proposed bitcoin exchange-traded funds (ETFs) this week – but what are they weighing exactly?
ProShares, the tenth largest provider of ETFs according to CNBC, has two proposals in the running, both based upon bitcoin futures contracts approved by the Commodity Futures Trading Commission in 2017.
bit.ly/2Lc9QdK

Key Executive Exit Leaves Tron’s Acquisition of BitTorrent Lacklustre
Nilesh Maurya – Coingape
The much-celebrated acquisition of BitTorrent by Tron seems to be on bumpy roads already, especially as far as retaining talent is concerned. In the recent news that is surfacing reports that two senior management employees which were from BitTorrent have already resigned. The report also states that three other employees that came to Tron from BitTorrent have also been fired.
bit.ly/2OTIefB

Three Minutes With Joseph Hernandez, Founder Of Chicago Blockchain Project
Jessica Darmoni – Hehmeyer
“The world is moving from competition to collaboration, and Chicago Blockchain Project aims to accelerate that change starting right here in Chicago,” said Joe Hernandez, founder and CEO of the Chicago Blockchain Project (CBP), which will host its inaugural Voice of Blockchain conference on August 24th and 25th at Chicago’s Navy Pier.
/jlne.ws/2OSQoVs

An evolving market; The need for trusted price formation
Kelly Loeffler
Two weeks ago we introduced Bakkt, a new company designed to bring digital assets to the mainstream and help unlock the potential of this important technology. We appreciate the response to our announcement and the conversation since.
/jlne.ws/2Bwsm0Z

ICE’s Bakkt CEO: Platform Won’t Support Margin Trading, Contracts to Be Fully Collateralized
Cointelegraph
ICE’s Bakkt CEO: Platform Won’t Support Margin Trading, Contracts to Be Fully CollateralizedNEWS
Bakkt — the forthcoming regulated global ecosystem for crypto assets recently unveiled by Intercontinental Exchange (ICE) — will not support margin trading for its Bitcoin (BTC) contract, according to an official Medium post published August 20.
/jlne.ws/2OVL6sG

Politics

Trump complains over Fed chair Powell interest rates at GOP fundraiser
Bob Bryan – Business Insider
During a Republican fundraiser on Friday, President Donald Trump reportedly privately attacked Federal Reserve Chairman Jerome Powell’s interest-rate hikes.
According to Bloomberg, Trump complained that Powell — the president’s own pick for the Fed’s top job — was raising interest rates instead of delaying rate hikes and keeping monetary policy loose.
/read.bi/2vYurNJ

New Russian Hacking Targeted Republican Groups, Microsoft Says
David E. Sanger and Sheera Frenkel – NY Times
The Russian military intelligence unit that sought to influence the 2016 election appears to have a new target: conservative American think tanks that have broken with President Trump and are seeking continued sanctions against Moscow, exposing oligarchs or pressing for human rights.
/jlne.ws/2nXRNyB

*****FT Version, NY Times Version

Brexit and Corbynism usher in paranoid politics; The lesson of Trump for the UK is the value of a row in defining one’s enemies
Robert Shrimsley – FT
Sometimes the signal is the noise. And in a fairly quiet summer the primary din has been politicians fostering division where once they endeavoured to build coalitions.
/jlne.ws/2MIi1Dk

Trump Accuses China, EU of Currency Manipulation
Saleha Mohsin – Bloomberg
President’s accusation conflicts with Treasury report; U.S. doesn’t officially consider any nation to be manipulator
President Donald Trump accused China and the European Union of manipulating their currencies as he tries to wrestle concessions from two of the U.S.’s largest trade partners.
/jlne.ws/2MGVXJi

Fed chief navigates treacherous political and economic waters; Jay Powell’s first Jackson Hole address comes as Trump adds to wider debate on rates
Sam Fleming in Washington – FT
On the surface, the economic backdrop to Jay Powell’s first Jackson Hole address as Federal Reserve chairman could hardly look much more benign.
/jlne.ws/2nUd1h5

Regulation

SEC Charges Unregistered Brokers Who Sold Woodbridge Securities to Main Street Investors
SEC
The Securities and Exchange Commission today charged five individuals and four companies for unlawfully selling securities of Woodbridge Group of Companies LLC to retail investors. Woodbridge collapsed into bankruptcy in December 2017 and the SEC previously charged the company, its owner, and others with operating a massive $1.2 billion Ponzi scheme.
/goo.gl/EvKq1R

FINRA Fines Interactive Brokers $5.5 Million for Regulation SHO Violations and Supervisory Failures
FINRA
FINRA announced today that it has fined Interactive Brokers LLC (Interactive) $5.5 million for Regulation SHO violations and supervisory failures spanning a period of at least three years.
/goo.gl/P2qUJM

Interactive Brokers Fined $5.5 Million for Naked Short Selling Violations; Industry regulator Finra settles with retail brokerage firm over what it says were ignored red flags
Alexander Osipovich – WSJ
A unit of Interactive Brokers Group Inc., IBKR 1.23% one of the largest U.S. retail brokerages, has been fined $5.5 million over allegations that it broke federal rules on the “naked” short selling of stocks thousands of times over a three-year period.
/jlne.ws/2Bx5MVO

Federal Reserve: David W. Wilcox, Director Of The Division Of Research And Statistics, To Retire At Year End
Press Release
David W. Wilcox, director of the Division of Research and Statistics, will retire at the end of this year after 30 years of service with the Federal Reserve Board, including seven years as the director of the division.
/goo.gl/7Pgt1a

Former managing director of mining company found guilty of insider trading
ASIC
Mr Darren James Lind, aged 47 of Brighton, South Australia, has been found guilty of two charges of insider trading in shares of ASX listed mining exploration company Minotaur Exploration Ltd (Minotaur).
/jlne.ws/2MEjhHI

Key Findings from DSB Consultation on OTC ISINs; Industry looks to DSB for additional use cases for OTC ISINs
Mondovisione
Following extensive consultations with industry which began earlier this year in May, ending July 27th, the Derivatives Service Bureau (DSB), has today announced the publication of their Industry Consultation Report, August 2018. This report comprehensively captures industry feedback, and documents a significant call from industry for the DSB to create additional use cases for ISINs on OTC Derivatives.
/jlne.ws/2MEy0CC

Merrill Lynch to Pay $8.9 Million to Settle Conflict-of-Interest Charge; SEC says 1,500 accounts through relationship with third party are at issue
Lisa Beilfuss – WSJ
Merrill Lynch will pay $8.9 million to settle charges it failed to disclose a conflict of interest, the Securities and Exchange Commission said Monday.
/jlne.ws/2BrXvlW

Proposed Rule Change to Amend Section 4(c) of Schedule A to the FINRA By-Laws Relating to Qualification Examination Fees
FINRA
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to amend Section 4(c) of Schedule A to the FINRA By-Laws to
/jlne.ws/2OYmYFR

SEC Adopts Rule Amendments to Improve Municipal Securities Disclosure
SEC
The Securities and Exchange Commission adopted amendments to enhance transparency in the municipal securities market. The adopted amendments to Rule 15c2-12 of the Securities Exchange Act will focus on material financial obligations that could impact an issuer’s liquidity, overall creditworthiness, or an existing security holder’s rights.
/jlne.ws/2OToKHY

CFTC Revokes Eurex Zurich AG FBOT Registration after Voluntary Closure
CFTC
The Commodity Futures Trading Commission (CFTC) announced today that it issued an order revoking the foreign board of trade (FBOT) registration of Eurex Zurich AG (EZAG).
/jlne.ws/2OSjZ1h

Statement of CFTC Commissioner Brian Quintenz Regarding the Virtual Commodity Association
CFTC
Given the absence of federal oversight jurisdiction in the crypto market, in February and again in March of this year I called on the crypto platform community to come together and develop a self-regulatory organization-like entity that could develop and enforce rules.[1] I am pleased that progress has been made on such a concept. Ultimately, an independent and empowered SRO-like entity could have a meaningful impact on the integrity and credibility of this young marketplace. Today’s announcement is a positive step towards that realization.
/jlne.ws/2Bxm5SN

FCA commences criminal prosecution against Mark Starling in relation to an unauthorised investment scheme
UK FCA
The Financial Conduct Authority (FCA) has commenced a criminal prosecution against Mark Barry Starling (date of birth: 23/01/1961) of Farnham, Surrey, for three offences relating to unauthorised investment schemes alleged to have been operated between 1 August 2008 and 25 April 2017.
/jlne.ws/2OQDU0O

Investing and Trading

This Year’s Best Performing Commodity Is Seen Set to Double
Anna Shiryaevskaya – Bloomberg
Carbon Tracker sees CO2 price at 35-40 euros a ton from 2019; Rally to speed up switch to natural gas, phaseout of lignite
Energy traders should get ready for European carbon allowance costs to almost double in the next year, boosting demand for cleaner-burning natural gas, a prominent forecaster said.
/jlne.ws/2nSsldQ

At Heart of New Fed Debate: Bonds or Bills?; The Federal Reserve must decide how to manage the mix of long-term versus short-term in its Treasury portfolio
Nick Timiraos – WSJ
Federal Reserve officials left many important questions unanswered when they decided last year to begin shrinking the central bank’s $4.5 trillion portfolio of mostly mortgage and Treasury securities.
/jlne.ws/2MEDaP0

Trade Outsourcing Picks Up
Rob Daly – MarketsMedia
More and more buy-side firms are re-examining ways to improve their workflow and operational efficiencies as market regulations like MiFID II eliminate many past practices such as research bundling and soft dollaring.
/goo.gl/fxmd44

Gundlach Proves a Short Squeeze Excites Everyone; DoubleLine’s CIO again marvels at speculators’ big bet against U.S. Treasuries.
Brian Chappatta – Bloomberg
Jeffrey Gundlach left the mostly unchanged U.S. Treasury market with a warning heading into this past weekend: Everything could change soon.
/jlne.ws/2nW2VvY

US bull market poised to become its longest; S&P 500 is set to have gone 3,453 days without a drop of 20% or more
Nicole Bullock – FT
What has been labelled the most hated bull market in US history is poised to become the longest.
/jlne.ws/2MBYRiF

Commodity prices suffer as emerging markets tumble; Fear that slumping resources prices are harbinger of weaker growth in China
Henry Sanderson and David Sheppard – FT
The sell-off in emerging markets has spilled into commodities, hitting prices of key resources from copper to oil.
/jlne.ws/2MMzwmh

Global liquidity squeeze looks set to continue; All eyes will be on the central bankers’ annual jamboree at Jackson Hole
John Plender – FT
Against a background of heightened geopolitical risk, intensifying trade war and a squall in emerging market currencies, the recent weakness in the gold price may seem counter-intuitive.
/jlne.ws/2OWa8I5

Institutions

What’s in a name? For TCA by ETrade, everything
Jeff Benjamin – InvestmentNews
as Trust Company of America hitched its wagon to a star or turned its back on loyal clients?
It depends on whom you ask.
Either way, the $275 million acquisition in April of TCA by discount broker ETrade has the custodian world buzzing.
/goo.gl/vHrvAJ

A lack of forethought leaves GAM hoping for smooth redemption; Shareholders are entitled to ask why GAM is running funds that have to be immediately liquidated if more than 10% of investors withdraw
David Wighton – Financial News
Some of the world’s most successful asset managers have a strict rule: never buy shares in an asset manager.
Despite their reputation as reliable cash machines, insiders know that most traditional fund companies are actually highly volatile businesses, dependent on fickle investor confidence, a few successful products and a handful of star managers. An apparently small hiccup can lead to a life-threatening spiral of decline.
/goo.gl/J8ZMN7

Deutsche Bank Confirms Bid to Buy Noble Bonds
Manju Dalal and Saurabh Chaturvedi – WSJ
Deutsche Bank said Saturday that it is acting on its own to buy bonds of Noble Group Ltd., days before a crucial shareholder vote on a $3.5 billion restructuring of the Singapore-listed commodity trader.
/on.wsj.com/2w0piF1

Wealthsimple Launches No-Fee Trading Service in Canada
Julie Verhage – Bloomberg
A new free stock trading app is coming to Canada. Wealthsimple Inc., a Toronto-based startup currently offering investing and savings products, is launching a stock trading platform with zero commissions for its Canadian users. Popular trading app Robinhood, a natural competitor, is still only available in the U.S.
/bloom.bg/2w0HRJh

****Missed this near the end of last week.

Paul Singer, Doomsday Investor; The head of Elliott Management has developed a uniquely adversarial, and immensely profitable, way of doing business.
Sheelah Kolhatkar The New Yorker
On May 18, 2017, Jonathan Bush was standing at the stern of his luxury catamaran, the Zenyatta, named for a champion Thoroughbred racehorse, when he received a text message from a colleague warning him not to answer calls from phone numbers he didn’t recognize.
/jlne.ws/2MHWfzu

StanChart Private-Equity Spinout Gets Backing From ICG
Donal Griffin , Kiel Porter , and Joyce Koh – Bloomberg
Bank may sell $1 billion of assets to ICG as part of deal; Unit’s CEO Jaisingh would lead team taking over portfolio
The managers of Standard Chartered Plc’s private-equity unit have secured backing for a multibillion-dollar spinoff from Intermediate Capital Group Plc as the British-based bank exits that business, according to people with knowledge of the matter.
/jlne.ws/2MIuOFO

US hedge funds join chorus for change at Europe’s conglomerates; Vocal investors increasingly behind corporate shake-ups on the continent
Michael Pooler in London and Patrick McGee in Frankfurt – FT
There was a time when a person might count on a Philips product at almost any waking hour of the day.
/jlne.ws/2MDgA9m

JO Hambro announces sudden departure of chief executive; Ken Lambden has left JO Hambro with immediate effect and has been placed on gardening leave for his six-month notice period.
Hayley McDowell – The Trade
Less than two years after taking up the role, the chief executive at JO Hambro Capital Management (JOHCM) is leaving the company with immediate effect.
/jlne.ws/2OVDzKq

Nikko Asset Management upgrades fixed income operations with FactSet; FactSet has deployed its multi-asset risk model to help Nikko Asset Management manage risk across its fixed income portfolios.
Hayley McDowell – The Trade
Nikko Asset Management has implemented a risk model service and analytics from FactSet to update and enhance its global fixed income operations.
/jlne.ws/2OTMbkr

Regions

Swiss Cows Get Too Fat for Their Own Good
Mara Bernath – Bloomberg
Smaller cows are more efficient at producing milk: farm group; Swiss farmers reared bigger cows through targeted breeding
As parched pastures force farmers across Europe to purchase expensive feed crops for their hungry herds, a Swiss dairy association may have part of the answer: smaller beasts.
/jlne.ws/2MLJh48

Doors Slam Shut for China Deals Around the World; Tighter rules for CFIUS are echoed in great scrutiny from Europe to Australia.
Nisha Gopalan – Bloomberg
Doors are slamming shut in the developed world not just to Chinese investment in technology but potentially to a wave of acquisitions with a tech element, as diverse as smart heaters and robotic lawnmowers.
/jlne.ws/2MLn2ei

Chinese ETF Investors Throw Gold a Lifeline
Luzi-Ann Javier – Bloomberg
Bosera Gold attracts over $1 billion this year as prices fell; Limits on China property buying helping boost gold demand
Just when you thought investors have given up on gold, the Chinese swooped in.
/jlne.ws/2MLJVP6

Market ructions to delay Greece’s post-bailout bond sale
Abhinav Ramnarayan, Virginia Furness – Reuters
Greece celebrated the end of eight years of bailouts on Monday, but expectations that it will mark its new-found fiscal independence with a much-anticipated bond sale next month may be dashed as wider tensions play out.
/goo.gl/GsoH6r

Greece’s Bailout Is Ending. The Pain Is Far From Over.
Liz Alderman – The New York Times
When Dimitris Zafiriou landed a coveted full-time job two months ago, the salary was only half what he earned before Greece’s debt crisis. Yet after years of struggling, it was a step up.
“Now, our family has zero money left over at the end of the month,” Mr. Zafiriou, 47, a specialist in metal building infrastructure, said with a grim laugh. “But zero is better than what we had before, when we couldn’t pay the bills at all.”
/goo.gl/nkkizS

Brexit

Risk of a no-deal Brexit matters for European bank bonds; Fund managers worry that paper sold under English law may not comply with EU rules
Robert Smith – FT
The rising threat of a no-deal Brexit is causing consternation for investors who are worried that more than EUR100bn of European bank debt issued under English law could no longer comply with the EU regulation.
/jlne.ws/2MH979b

Britain can’t afford to close door to EU banks after Brexit
Huw Jones – Reuters
Britain is expected to keep the door open for European Union banks and investors after Brexit to try to preserve London’s global financial clout, irrespective of whether it gets a good trade deal from the bloc, bankers and industry officials say.
Nerves in the City of London financial district were rattled last month when the UK government proposed future financial services trade with the EU based on “reciprocal” arrangements.
/goo.gl/9TgSRj

The post CME pulls ahead in race to control bitcoin futures appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

Whenever CME Group and Nex Group close their deal, it is expected to boost to CME’s international revenues 35 percent, according to a Q1 report from the exchange.~JK

++++

Tom Scanlan and NEX Group ran a Trading Tech 300 merit badge workshop yesterday in Chicago, featuring the geocaching merit badge. Thank you to Tom and NEX for their great contributions to Boy Scouts.

More data on the problem with overfitting: according to a recent study covering 215 alternative beta strategies from 17 investment banks (which included both backtest and live data), only 18 of the strategies had a live Sharpe Ratio equal or greater than the backtested one.~SD

Check out this finding from Pew Research – “The audience for nearly every major sector of the U.S. news media fell in 2017 – with the only exception being radio.” ~SD

++++

MWE World of Opportunity – How to Take The Wheel and Drive Your Own Career Path

JohnLothianNews.com
“One of the best pieces of advice I could share is get involved with an industry activity.”

Networking is essential for any career, but after a handshake and an exchange of business cards, what do you do? Do you follow up with those individuals?

In this video from MarketsWiki Education’s Chicago event, Jessica Darmoni, founder of The Title Connection, shares some tips for how to establish yourself and take control of your career narrative.

Watch the video here »

++++

Facebook Says It Removed Influence Efforts From Iran, Russia
Sarah Frier – Bloomberg
State-directed actors tried to mislead on politics, elections
Facebook Inc. for the first time named a country other than Russia that has been using fake accounts to manipulate global politics: Iran.
The social network said it removed 652 pages, groups and accounts for “inauthentic behavior” that originated in Iran and targeted people with news and information including political content in the U.S., U.K., Middle East and Latin America.
/goo.gl/TurtTi

***** How did something that started to connect college students come to this?~JJL

++++

Venezuela pulls ‘Who Wants to Be a Millionaire?’, top prize meaningless
Newshub
Venezuela has pulled the TV show Who Wants to Be a Millionaire? after devaluing its currency, which is now worth so little, the top prize was meaningless.
bit.ly/2nX52j4

**** If the show wanted to give a $1 million (US) prize to the winner they would have to come up with over 248.5 billion Bolivars at the current exchange rate.~JB

++++

Tuesday’s Top Three
Our top read stories on Tuesday were about crypto, crypto custody and Jump. The most read piece was the FT’s CME pulls ahead in race to control bitcoin futures. Second was Jim Kharouf’s column for JLN, Custody Battle Brewing Over Crypto Assets, and That’s a Good Thing about the big names moving into the custody services space. Third was the FT piece Jump Trading joins challenge to banks in Treasury market making

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MarketsWiki Stats
131,590,554 pages viewed; 23,256 pages; 214,670 edits
MarketsWiki Statistics

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Lead Stories

A Messy Battle Brews in the Options Market; Craig Donohue, CEO of the only U.S. options clearinghouse, is clashing with traders over his plans
Gunjan Banerji – WSJ
Craig Donohue’s turnaround plan for the nation’s options clearinghouse has hit a roadblock. Mr. Donohue has boosted the prominence of Options Clearing Corp., which acts as a guarantor for every trade in the U.S. listed options market. Clearinghouses—critical parts of the financial system—came under greater scrutiny after the last financial crisis and are responsible for preventing potential defaults from rippling through markets.
/jlne.ws/2PvwDVh

JPMorgan to launch low-cost digital trading platform; US bank hopes to attract a younger generation of customer with the new venture
Laura Noonan in London and Danielle Verbrigghe in New York – FT
JPMorgan Chase is launching a new low-cost digital trading platform, throwing down the gauntlet to online brokerages such as Charles Schwab and TD Ameritrade.
/jlne.ws/2PtQO5O

CFTC Unanimously Adopts Rule Amendments Simplifying Chief Compliance Officer Duties and Annual Report Rules for FCMs, Swap Dealers and Major Swap Participants
CFTC
The Commodity Futures Trading Commission (CFTC) unanimously approved final amendments clarifying and simplifying its regulations governing chief compliance officer (CCO) duties and annual compliance reporting requirements for futures commission merchants (FCM), swap dealers and major swap participants.
/goo.gl/hahNqE

FCA brings charges over alleged futures-trading scheme
Caroline Binham in London – FT
Investors were lied to as part of a criminal unauthorised futures-trading scam, the UK’s financial watchdog has alleged in court.
/jlne.ws/2w4cnC2

Germany calls for global payments system free of US; Foreign minister seeks European autonomy on issues such as Iran
Guy Chazan in Berlin – FT
Germany’s foreign minister has called for the creation of a new payments system independent of the US as a means of rescuing the nuclear deal between Iran and the west that Donald Trump withdrew from in May.
/jlne.ws/2Pt0kGx

***Reuters on the same story here.

Exclusive: Britain extends lead as king of currencies despite Brexit vote
Andrew MacAskill, Tommy Wilkes – Reuters
Britain has extended its lead in the global currency trading business in the two years since it voted to leave the European Union, in another sign London is likely to continue to be one of the world’s top two financial centres even after Brexit.
/reut.rs/2nW9AGs

An Independent Asset Manager Takes on Volatile FX Markets
Paul Golden – CME Group
The ever-changing investment environment places considerable demands on asset managers. Clients with long term liabilities – such as pension funds, endowments and insurance companies – have had to diversify their investments more internationally in recent years. That introduces an element of currency risk that tends to increase a portfolio’s volatility without increasing its return.
bit.ly/2nUWkSr

Competition is not the only problem for bankers at Jackson Hole
Robin Harding – Financial Times
Rampant corporate mergers have led to falling competition, higher profits, lower investment and a decline in the share of US national income that goes to workers. This may be the most important hypothesis in economics today. If correct, it explains many of the economic ills plaguing America, and suggests a simple solution. Fire up competition policy, smash some monopolists and make the world a better place. So popular has the theory become, it is on the agenda for this week’s confab of central bankers in Jackson Hole, Wyoming.
/on.ft.com/2Lf2kyL

A Case for Asymmetric Speed Bumps in U.S. Equities
Richard Johnson – Greenwich Associates
A key driver of success in trading the modern U.S. equities markets is speed.
When all market participants have access to the same information, the winners are those who can analyze and interpret this information effectively, but also those who can implement their ideas before the market re-prices and the alpha is lost.
/goo.gl/nwaExz

SEC Could Face Backlash if Elon Musk Is Exonerated
Matt Robinson and Benjamin Bain – Bloomberg
Agency is said to feel pressure to bring case over CEO’s tweet; Investigation is highest-profile of Chairman Clayton’s tenure
For months, the U.S. Securities and Exchange Commission had been quietly and methodically scrutinizing Tesla Inc.
/jlne.ws/2PuFBlK

Ten years after Lehman collapse few lessons have been heeded; Rating agencies still wield huge influence and investment executives remain unaccountable
Arturo Cifuentes – FT
Anniversaries call for reflections. And 10 years after the collapse of Lehman Brothers, the largest bankruptcy in American history, some inexplicable issues linger unresolved.
/jlne.ws/2w4oBe1

Coinbase Publishes Its Institutional Strategy, as the US Competition Rises; The new principle follow the exchange’s launch of a range of institutional products and solutions
David Kimberley | Finance Magnates
Coinbase, the largest cryptocurrency exchange in the United States, released a statement this morning regarding its institutional service offering. The statement lays out five core principles that the firm says will guide its institutional service offering.
/jlne.ws/2w5A3Gi

Exchanges, OTC and Clearing

CME Group SONIA interest rate futures to launch in October; CME Group will launch two SONIA interest rate futures contracts on 1 October pending regulatory approval.
By Hayley McDowell – The Trade
US exchange group CME Group is set to launch Sterling Overnight Index Average (SONIA) interest rate futures contracts on 1 October.
/jlne.ws/2PuL4Ji

***The press release is here.

Options Clearing Corp.’s Ratings Are Unaffected By Risk-Management Developments
S&P Global Ratings
S&P Global Ratings today said that two recent developments in Options Clearing Corp. (OCC)’s risk management practices have no immediate impact on our ‘AA+’ rating on the company.
On July 30, the Securities and Exchange Commission (SEC) announced its approval of OCC’s updated financial safeguards framework. OCC will size its clearing fund to formally provide enough resource to cover the simultaneous default of its largest two clearing members (“cover 2”) versus a default of its single largest clearing member (“cover 1”) in the current framework.
No Link

CME Group to Streamline Short-Dated Standard and E-mini S&P 500 Options Strike Prices
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, plans to reduce the number of listed strike prices for Standard and E-mini S&P 500 options, pending regulatory review. This change is designed to offer a more relevant mix of strike prices for short-term investors. It will apply to Monday, Wednesday and Friday weekly expirations that are listed after Oct. 1, 2018. This change will exclude Standard and E-mini S&P 500 options that expire on the third Friday of every month, as well as end-of-month and quarterly E-mini S&P 500 options.
bit.ly/2w2RIhQ

SGX partners M-Daq to roll out prototype for multi-currency securities trading
Claudia Chong – The Business Times
THE Singapore Exchange (SGX) is looking into a new service that will allow investors to view, trade and settle in multiple currencies in addition to exchange-listed ones.
/jlne.ws/2MHRzd9

Tel Aviv exchange gets green light for stake sale to hedge fund Manikay
Steven Scheer – Reuters
The newly privatised Tel Aviv Stock Exchange (TASE) has won approval from Israel’s securities regulator for a deal to sell nearly 20 percent of the exchange to investment fund Manikay Partners and another 19 percent to four other foreign investors.
/reut.rs/2ByHcE6

South Korea exchange ups scrutiny of Merrill Lynch trading; Local investors allege big losses due to high-frequency trades causing ‘market disruptions’
Song Jung-a in Seoul and Emma Dunkley in Hong Kong – FT
South Korea’s stock exchange has stepped up its monitoring of high-frequency trading by the Seoul branch of Bank of America Merrill Lynch after local investors complained about alleged unfair stock trades by the US brokerage.
/jlne.ws/2w5UEtZ

Eurex loses key Asia head who spearheaded expansion throughout the region; Roland Schwinn, head of Asia at Eurex, has resigned due to personal reasons and will leave the exchange at the end of this month.
By Hayley McDowell – The Trade
The regional head for Asia at derivatives exchange operator Eurex has resigned from his position due to personal reasons and will leave the firm on 31 August.
/jlne.ws/2Pv4hu7

The art of designing markets. Part IV; Exchange participant connectivity
Eurex
Market design recognizes that well-functioning markets are more than the confluence of supply and demand. They depend on detailed rules. Market designers try to understand the rules and procedures as well as the workings and requirements of particular markets well enough to fix problems or to build completely new markets when they seem promising.
/jlne.ws/2w1J6rO

Fintech

Fintech Eyes Opportunity in $15 Billion Title-Insurance Business
Katherine Chiglinsky and Julie Verhage – Bloomberg
Tech-focused startups are knocking on the door of a $15 billion industry that’s dominated by just four companies: Title insurance.
A California regulator announced Tuesday that, for the first time, it gave approval to a tech-focused startup title insurer to operate in the biggest U.S. state by population. States Title Inc. joins newcomers including OneTitle National Guaranty Co. and Spruce Holdings Inc. that have gained footholds in other U.S. regions to enter the complex and closely regulated world of title insurance.
/bloom.bg/2MLcf3K

Mexico’s new government wants fintech, banks to help financial inclusion
Stefanie Eschenbacher – Reuters
Mexico’s next government will look to fintech companies and large corporate banks to increase financial inclusion in the country, where only one-third of adults have a bank account, senior officials said on Tuesday.
Arturo Herrera, one of two future deputy finance ministers, said in an interview that the lack of financial inclusion was one of the biggest obstacles in the new government’s fight against poverty, inequality and slow economic growth.
/reut.rs/2MGO06R

Lawmaker Questions FinTech Industry Over Lending Practices
Kate Patrick – Government Technology
Financial technology (fintech) companies are increasingly lending to minorities and consumers with subprime credit scores, drawing attention from regulators who worry that the lack of oversight and transparency are allowing unfair or discriminatory practices to proliferate.
bit.ly/2o1vyrM

A Major Shift Is Coming in How Advisors Use Fintech
Joe Elsasser – ThinkAdvisor
Full integration will overtake open architecture as the theme of the next decade. For years, financial advisors have looked for solutions that integrate, but have been provided with open architecture, which is simply the ability to connect multiple external systems to each other and transfer common information from one system to another without double entry. If we wanted to call this type of connection “integration,” we’d have to call it “loose integration,” at best.
bit.ly/2nXmcNH

Connectivity Provider BSO Links with Tel Aviv Stock Exchange
Finance Magnates
BSO of London has signed a partnership with the Tel Aviv Stock Exchange which will provide a direct trading connection between London and Israel.
/goo.gl/QcXbyL

Titan launches its mobile ‘not a hedge fund’
Josh Constine – TechCrunch
What Robinhood did to democratize buying individual stocks, Titan wants to do for investing in a managed portfolio. Instead of being restricted to rich accredited investors willing to pour $5,000 or even $500,000 into a traditional hedge fund that charges 2 percent fees and 20 percent of profits, Titan lets anyone invest as little as $1,000 for just a 1 percent fee on assets while keeping all the profits. Titan picks the top 20 stocks based on data mined from the most prestigious hedge funds, then invests your money directly in those with personalized shorts based on your risk profile.
/tcrn.ch/2nUVJjN

Thomson Reuters Provides QUICK Market Commentary Services Through Eikon For Global Customers – QUICK Offers Equity And Derivatives Commentary In Japanese
Mondovisione
Thomson Reuters today announced that it is providing paid market commentary services on Japanese equity and derivatives through a new collaboration with Japanese financial information firm, QUICK. The services are available now to global clients outside of Japan using Thomson Reuters Eikon.
bit.ly/2Ljo3pu

Thomson Reuters joins forces with the Singapore FinTech Association to fight financial crime
Reuters
Thomson Reuters and the Singapore FinTech Association (SFA) have committed to join forces on projects and initiatives contributing to the development of the FinTech industry in Singapore. The collaboration will involve working closely with financial institutions, local universities and startups, focusing on leveraging emerging technologies to solve issues around financial crime.
/tmsnrt.rs/2MGf5XU

Fintech Eyes Opportunity in $15 Billion Title-Insurance Business
Katherine Chiglinsky and Julie Verhage – Bloomberg
California’s approval of new title insurer a first for state; Upstarts work in other regions too, facing web of oversight
Tech-focused startups are knocking on the door of a $15 billion industry that’s dominated by just four companies: Title insurance.
/jlne.ws/2PvXh0g

Cryptocurrencies

Here’s How Blockchain Technology Is Changing Commercial Banking
Thirtyk.com
Blockchain technology has made significant inroads into commercial banking, with systems entering production in three vital areas: cross-border payments, trade finance and syndicated lending.
That’s a key takeaway from research recently conducted by Celent, which focuses on the viability of present-day use cases and identifies the consortia and technology providers bringing blockchain to commercial banking.
bit.ly/2nWTGvs

Newsflash: Bitcoin Price Spikes Near $6,900 as BitMEX Goes Offline
CCN
The bitcoin price took a major leap on Wednesday morning, spiking nearly $300 in less than a minute to break out of what had been two days of mostly sideways trading for the flagship cryptocurrency.
/goo.gl/DGceca

Inside the bluster and lies of Petro, Venezuela’s cryptocurrency scam
Katia Moskvitch – Wired U.K.
For Jorge Farias, boss of Venezuelan startup Cryptobuyer, the Petro is personal. Anything in the crypto world is.
/goo.gl/oJ11na

Ethereum Scam App Appears on Google Play Store, Malware Researcher Reports
Helen Partz – Cointelegraph
Android’s Google Play Store has recently become a spot for hosting another reported Ethereum (ETH) scam application, The Next Web reports August 21.
/goo.gl/wjZrtL

China’s Social Media Giant WeChat Blocks a Number of Crypto Media Accounts, Sources Say
Marie Huillet – Cointelegraph
WeChat, the 1 billion-user Chinese social media platform developed by Tencent, has reportedly blocked a number of crypto and blockchain related accounts, local financial news outlet Lanjinger reported August 21.
/goo.gl/yA8JFQ

The Trick to Selling Blockchain Solutions? Don’t Say ‘Blockchain’
Ian Allison – Coindesk
When Adrian Patten, co-founder of FX blockchain project Cobalt, pitches to banks these days, he chooses his words carefully.
/goo.gl/YEqXFe

China shuts down blockchain news accounts, bans hotels in Beijing from hosting cryptocurrency events
Zheping Huang – South China Morning Post
China has shut down numerous blockchain-related news accounts on the WeChat social app, and banned hotels in downtown Beijing from hosting events promoting cryptocurrencies, in a renewed crackdown on activities related to the digital money.
/goo.gl/vb9zG7

What Vitalik Buterin’s tweetstorm means for the future Ethereum blockchain
Lucas Mearian – ComputerWorld
It took 75 tweets, but Ethereum blockchain founder Vitalik Buterin has clarified the roadmap for implementing a new consensus mechanism that promises to greatly increase the speed with which new entries can be added to the distributed electronic ledger technology.
/goo.gl/W6iUQd

How Bitcoin’s Crash Compares to History’s Biggest Bubbles
Eric Lam and Adrian Leung – Bloomberg
Bitcoin’s dramatic rise and fall has left many investors wondering whether the cryptocurrency is destined to enter the history books as one of the world’s biggest bubbles. After an almost 60-fold increase over the past three years to nearly $20,000 in December, Bitcoin has tumbled by about 70 percent from its peak on concern that regulatory and security hurdles will prevent widespread adoption. By comparison, the Nasdaq Composite Index recorded a 78 percent peak-to-trough decline after the dot-com bubble burst in 2000.
jlne.ws/2FyF7oY

Two Things That Don’t Mix Well: Bitcoin Rehypothecation And Chain Forks
Caitlin Long – Forbes
Several astute readers asked follow-up questions about the risks facing Wall Street amid a Bitcoin chain fork, a topic that I introduced in a recent Forbes.com piece (here). Put simply, chain forks and rehypothecated bitcoins don’t mix well and could cause the financial system to experience losses if it has any uncovered exposure to bitcoins amid a hard fork.
/jlne.ws/2w4mqal

Politics

Elizabeth Warren proposes banning Congress from owning stocks as part of sweeping anti-corruption bill
Joseph Lawler – Washington Examiner
Elizabeth Warren on Tuesday proposed banning members of Congress from owning individual stocks as part of what she described as the “most ambitious anti-corruption legislation” since Watergate.
/washex.am/2nVkpJ5

If Trump Can Strong-Arm the Fed, U.S. Assets May Not Be So Great
Liz McCormick and Aline Oyamada – Bloomberg
Dollar may weaken as desired, but Fed credibility may be hit; Long-term yields at risk of rising on inflation concerns
Donald Trump may want to watch what he wishes for. If Federal Reserve boss Jerome Powell does what the president wants, American assets could lose their appeal as a global haven.
/jlne.ws/2w64LyT

Wall Street Isn’t Ruling Out a Trump Move to Weaken the Dollar
Katherine Greifeld – Bloomberg
Deliberate move to weaken dollar isn’t so far-fetched anymore; Pitched trade war with China puts U.S. intervention into focus
The United States of America, a currency manipulator? It’s a label more frequently slapped on developing export economies and one that President Donald Trump took up just this week to browbeat China and Europe in his increasingly pitched trade war.
/jlne.ws/2vZgI9F

Cohen Has ‘Knowledge’ of Russia Campaign Conspiracy, Lawyer Says
Shannon Pettypiece , Jennifer Jacobs , and Terrence Dopp – Bloomberg
Lawyer for Cohen says he’s willing to tell Mueller of hacking; Manafort guilty verdict came at same time as Cohen plea deal
President Donald Trump’s former personal lawyer, Michael Cohen, has “knowledge” about computer hacking and collusion that may interest Special Counsel Robert Mueller in his investigation into Russian interference in the 2016 election, Cohen’s lawyer said.
/jlne.ws/2PvWyMr

U.K. Says Putin Is Testing the West, Urges EU to Boost Sanctions
Thomas Penny – Bloomberg
Britain’s top diplomat accused Russian President Vladimir Putin of testing the resolve of Western nations, and praised President Donald Trump as he appealed to the European Union to step up sanctions against Moscow.
/jlne.ws/2w3ViYZ

Regulation

South Korea exchange ups scrutiny of Merrill Lynch trading; Local investors allege big losses due to high-frequency trades causing ‘market disruptions’
Song Jung-a and Emma Dunkley – Financial Times
South Korea’s stock exchange has stepped up its monitoring of high-frequency trading by the Seoul branch of Bank of America Merrill Lynch after local investors complained about alleged unfair stock trades by the US brokerage.
/on.ft.com/2nVeJ1B

IG Index fights claim it encouraged ‘risky’ trades
Hannah Murphy – Financial Times
IG Index, Europe’s largest online trading website, appeared in court on Tuesday to fight a claim that it encouraged a UK businessman to place “risky” trades that were “against his best interests”, wooing him with hospitality and gifts.
/on.ft.com/2LdxyXd

Ontario Securities Commission Announces Roundtable Agenda On Derivatives Registration And Business Conduct Regimes
Mondovisione
The Ontario Securities Commission (OSC) today announced details for an upcoming roundtable it will host as part of the Canadian Securities Administrators (CSA)’s ongoing consultation process on the proposed derivatives registration and business conduct regimes.
/goo.gl/8fKQPj

Investor spoofed on HBO’s ‘Silicon Valley’ settles SEC charges
By Nicolas Vega – NY Post
A hard-partying Silicon Valley investor has settled charges with the SEC that he bilked clients out of millions of dollars to fund his elaborate shindigs.
/jlne.ws/2PtbLht

Statement of CFTC Chairman J. Christopher Giancarlo Regarding the Final Rule on Chief Compliance Officer Duties and Annual Report Requirements for Futures Commission Merchants, Swap Dealers, and Major Swap Participants
CFTC
As part of the CFTC’s Project Kiss efforts, this final rule will streamline and clarify a Chief Compliance Officer’s (CCO) obligations, as well as harmonize certain provisions with the Securities and Exchange Commission’s (SEC) rules. Clarifying the role and responsibilities of the CCO should enable greater accountability and improve overall compliance, as well as reduce burdens on CCOs and uncertainty for registrants. The rule continues to impose a duty on CCOs to resolve matters but within the practical limits of their position at the CFTC-registered entity. The rule also continues to impose a duty for the CCO to undertake an annual review but reduces the burdens associated with the review, which will allow the CCO to devote more time and resources to compliance activities at the registrant. In addition, further harmonizing definitions and CCO duties of dual CFTC-SEC registrants should improve efficiency and further reduce the burdens on CCOs.
/jlne.ws/2PvDvSm

Investing and Trading

No Quant Is Safe as Global Stress Hits Risk-Parity Investing
Dani Burger – Bloomberg
Diversification method challenged as vol rose to 2-year high; Risk-parity managers fret investors to chase returns elsewhere
Choppy markets around the world are hurting one of Wall Street’s hottest quantitative trades, belying its status as a port in the storm.
/bloom.bg/2LdDJKQ

Volatility Trades Are Reborn as Two-Tier Market Spurs New Short
Yakob Peterseil – Bloomberg
Macro forces spur growing divergence across stocks, industries; Dispersion trade is advancing beyond hedge-fund investors
Call it the volatility trade, squared. As macro shocks hit global markets, a complex strategy that bets the gap between stock winners and losers will grow is spreading across hedge funds, real-money managers and even private banks.
/jlne.ws/2w1GgTG

S&P Dow Jones Indices Launches Index Family for Risk Parity Strategy
PRNewswire
S&P Dow Jones Indices (“S&P DJI”) today announced the launch of the S&P Risk Parity Indices, its first index family designed to replicate a multi-asset risk parity strategy. The indices will follow S&P DJI’s standards of transparent, rules-based methodologies for index construction, enabling a reflection of the risk and return characteristics of the investment discipline.
/prn.to/2nWJBip

The Bull Market Is Really Old. Does That Mean It’s at Death’s Door?
Sarah Ponczek and Elena Popina – Bloomberg
Age alone does not mean the bull market must be late cycle; Easy monetary policy, QE makes this cycle hard to compare
In nature, things are cyclical. If only it were as clear cut in stocks.
/jlne.ws/2w5MZMf

Institutions

Gross’s fund lost more than 40% of its assets over the past year, Morningstar data show
Mark DeCambre – MarketWatch
Bill Gross’s signature fund at Janus Henderson has shed more than 40% of its assets, in a humbling period of redemptions and wrong-way bets for the fixed-income luminary, data from Morningstar show.
/jlne.ws/2w5Oxpx

Regions

Chinese traders ditch cheap U.S. coal for domestic supply as tariffs loom
Meng Meng, Josephine Mason – Reuters
Some Chinese coal traders handling U.S. imports have begun sourcing future supplies domestically, people with knowledge of the matter said, as they await delivery of the last U.S. cargoes to arrive before hefty tariffs kick in on Thursday in a deepening trade row between the world’s top two economies.
/jlne.ws/2w1Dkq8

Australia is devastated by drought, yet it won’t budge on climate change
Angela Dewan, CNN
Australia is suffering its worst drought in living memory, as dozens of bushfires are blazing out of control. It’s hard to believe that it’s winter “down under.” Summer is yet to come.
/jlne.ws/2w5cgX3

Pope’s Army Gets Help From Ex-Central Banker for Vatican Revamp
Catherine Bosley – Bloomberg
New barracks are needed for the Vatican’s Swiss Guards; Former SNB chief Roth estimates costs about 50 million francs
Pope Francis’s guards need a new barracks and they’re getting help from a different kind of power — a central banker.
/jlne.ws/2w66O61

Brexit

Banking is surprise item on list of Brexit ‘no-deal’ impact papers
Dan Sabbagh – The Guardian
A Brexit “no-deal” impact paper for financial services has been listed among the first batch of official assessments due to be published on Thursday, at a time when banks and insurers have been warning about the risks of a disorderly exit from the EU.
bit.ly/2nYP5cf

London’s Fight to Remain a Financial Hub After Brexit, Explained
Silla Brush and Alexander Weber – Bloomberg
Can the City of London survive Brexit? Banks are preparing for the worst and are pretty sure they will lose much of the freedom they now enjoy to trade with the European Union. But just how bad Brexit gets for banks hinges on the details that will be worked out in political negotiations, as well as in private talks between firms and supervisors. There are five battlegrounds that could spell the difference between a modest and a major hit.
/jlne.ws/2vZkIab

Brexit Talks Will Be Non-Stop From Now With Markets Jittery
Ian Wishart – Bloomberg
The U.K. and the European Union will negotiate on Brexit “continuously” from now on, the bloc’s chief negotiator Michel Barnier said, with time running out to avoid Britain crashing out without a deal.
“The negotiations are now entering the final stage,” Barnier told reporters in Brussels after meeting Brexit Secretary Dominic Raab on Tuesday. “We can find common ground” but it will need Britain to “respect the single market.”
/bloom.bg/2MLcYSw

EU vows to get tough on UK’s market access after Brexit; Plan to step up oversight of ‘equivalence’ rules that finance sector will rely on
Jim Brunsden in Brussels – FT
The EU’s financial services chief has warned that Brussels will be strict in policing the Britain’s rights of access to the bloc’s market after Brexit.
/jlne.ws/2w6r3k5

Miscellaneous

Arctic’s strongest sea ice breaks up for first time on record
Usually frozen waters open up twice this year in phenomenon scientists described as scary
Jonathan Watts – The Guardian
The oldest and thickest sea ice in the Arctic has started to break up, opening waters north of Greenland that are normally frozen, even in summer.
/jlne.ws/2Psevvs

How the financial crisis changed our reading habits; From fantastical yarns to dystopian fiction, what type of books did we turn to?
Alex Clark – FT
When the global financial crisis struck a decade ago, there was no reason to think that publishing would be immune from its effects. The golden goose of the celebrity autobiography was on the wane; Amazon was gearing up to wreak its deep-discounting havoc on the traditional retail model. Despite the dictum that books are comparatively recession-proof — they don’t cost very much and yield an impressive bang for their buck in terms of entertainment — the future looked shaky. “The key,” as Britain’s Arts Council put it in its review of 2009, “is not to panic”.
/jlne.ws/2w3WtYp

The post A Messy Battle Brews in the Options Market appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

Register now for Eurex’s Derivatives Forum in Stockholm, which they are co-hosting with Danske Bank and SEB! This year’s conference will focus on key issues that will shape the derivatives industry of the future. Find the complete agenda here.~JJL

Register today for the Montreal Exchange’s next webinar and find out how to use TD’s Advanced Dashboard and its options trading tools. For more details and registration click here.~JJL

FIA’s Walt Lukken was a guest on the Feehery Theory Podcast talking about “10 years, The great disruption, Sports as metaphor.”~JJL

Michael Shore, a longtime industry communications professional, is now director of media, PR and communications with William Blair.~SD

Got milk? Yesterday, the European Energy Exchange (EEX) recorded the first trade in its new liquid milk futures.~JK

Check out this growth stat from the Reuters story Copper and the (very) big fund short – “CME’s copper options … turnover totalled 35,140 contracts last month, more than was traded in the whole of 2015.”~SD

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MWE World of Opportunity – Listen Both Ways Before Crossing!

JohnLothianNews.com
“I had this happen to me. I came in in the morning. A wonderful colleague, a great person, says, ‘Billy, how are you doing?’ ‘I’m doing great.’ ‘Really? Tell your face.'”

What is the authentic you? How do you act under pressure? Is that reflective of your authentic self? In this video, Bill Weldon, who’s in the business of executive coaching after years in trading, talks about how to deal with stressful situations.

Watch the video here »

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Invitation to the event Future of the Financial Center Germany in Europe; Dear journalists,
Deutsche Boerse AG
We cordially invite you to an event hosted by Deutsche Boerse AG with Chancellor Dr. Ing. Angela Merkel, the Prime Minister of the State of Hesse, Volker Bouffier and the CEO of Deutsche Boerse AG, Dr. med. Theodor Weimer, a. Theme of the evening is the future of the financial center Germany in Europe.
/jlne.ws/2LfK8VP

***** Alas, I must send my regrets.~JJL

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Welcome to the longest bull market in Wall Street history
Sue Chang – MarketWatch
The bull market in U.S. stocks on Wednesday became the longest in history, with even President Donald Trump chiming in as optimistic investors argue that the journey is far from over.
The bull has thrived amid a decade of financial and political upheaval, thanks in part to the all-you-can-eat liquidity feast hosted by the Federal Reserve and other major central banks. Now the Fed has shifted to a tighter monetary-policy regime even as the same risks that have dogged this market over the years, including elevated valuations, persist, prompting some pundits to predict an imminent demise of the bull.
/goo.gl/TPk6gy

***** That is a lot of bull.~JJL

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Big oil asks government to protect it from climate change
Will Weissert – AP News
As the nation plans new defenses against the more powerful storms and higher tides expected from climate change, one project stands out: an ambitious proposal to build a nearly 60-mile “spine” of concrete seawalls, earthen barriers, floating gates and steel levees on the Texas Gulf Coast. Like other oceanfront projects, this one would protect homes, delicate ecosystems and vital infrastructure, but it also has another priority — to shield some of the crown jewels of the petroleum industry, which is blamed for contributing to global warming and now wants the federal government to build safeguards against the consequences of it.
bit.ly/2MNwJsE

******What universe is this we are living in now?~JJL

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IBM looks for caffeine buzz with coffee delivery drones; Patent filing even shows sensors predicting espresso needs of flagging employees
Camilla Hodgson in London – FT
IBM has spent much of the last decade turning away from its hardware roots towards new, fast-growing technologies like artificial intelligence and cloud computing. A new patent filing suggests the 107-year-old computing stalwart is looking to adapt another tech trend for fun and profit: smart coffee delivery drones.
/jlne.ws/2LjxG7y

****** Nasdaq’s Allan Schoenberg is going to need to get that no-fly zone over Times Square lifted.~JJL

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Wednesday’s Top Three
Wednesday’s top stories were led by the Wall Street Journal’s piece on OCC, in A Messy Battle Brews in the Options Market. A distant second went to the FT’s FCA brings charges over alleged futures-trading scheme. Third was the CFTC announcement CFTC Unanimously Adopts Rule Amendments Simplifying Chief Compliance Officer Duties and Annual Report Rules for FCMs, Swap Dealers and Major Swap Participants. If only CFTC could add a little more wording to its headlines.

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MarketsWiki Stats
131,641,587 pages viewed; 23,256 pages; 214,675 edits
MarketsWiki Statistics

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Lead Stories

Wall Street’s sector shakeup will let more tech stocks shine
Noel Randewich – Reuters
Chipmakers, cloud-computing sellers and even credit card payment companies will have a greater chance to stand out in the information technology sector next month following the largest-ever shakeup of Wall Street’s industry classification system.
/jlne.ws/2LkmJCH

European Payment System Isn’t a Pipe Dream; A German proposal for thwarting U.S. sanctions on Iran could work. Just look at Russia’s banks.
Leonid Bershidsky – Bloomberg
As President Donald Trump increasingly strains ties with U.S. allies, German leaders, including Chancellor Angela Merkel, have suggested that their country and other European nations should take steps to lessen their dependence on America. Now, Foreign Minister Heiko Maas has called for the creation of “U.S.-independent payment channels” to help shield European companies from unilateral U.S. sanctions such as the ones Trump has imposed on Iran.
/jlne.ws/2Lkjxab

CME to launch Libor-substitute contract linked to BoE rate meetings
Huw Jones – Reuters
CME Group has said it will launch a ground-breaking futures contract linked to Bank of England interest rate meetings as part of global efforts to scrap use of the Libor benchmark that banks sought to manipulate.
/jlne.ws/2LncoG2

Exclusive: Aramco IPO halted, oil giant disbands advisers – sources
Clara Denina, Alex Lawler, Marwa Rashad – Reuters
Saudi Arabia has called off plans for the domestic and international listing of state oil giant Aramco, billed as the biggest stock flotation in history, four senior industry sources said on Wednesday.
/jlne.ws/2LjWpbQ

What soyabeans teach us about tariffs; ‘The soya saga is just a taste of what could happen if trade wars disrupt other supply chains’
Gillian Tett – FT
Alan Blinder, esteemed Princeton economics professor and former vice-chairman of the US Federal Reserve, recently found himself owning up to a surprising new interest: the soyabean.
/jlne.ws/2LneK7Q

SEC to Rehear Dozens of Cases That Went Before In-House Judges; Decision follows Supreme Court ruling that faulted how administrative judges were appointed
Gabriel T. Rubin – WSJ
The Securities and Exchange Commission said it plans to rehear dozens of cases that were pending before its in-house administrative-law judges, following a June Supreme Court ruling that faulted the appointment process for those judges.
/jlne.ws/2Llj9YX

Short Squeeze Roils Wall Street’s Favorite Bond Trade; This month’s decline in 10-year yields stems from a host of factors, investors and portfolio managers say
By Daniel Kruger – WSJ
A robust August rally in the Treasury market is foiling one of Wall Street’s most popular trades, a bet that solid U.S. economic growth, rising inflation and eroding government finances will compel investors around the world to sell bonds.
/jlne.ws/2LfHPSF

World’s Top Crypto Miner May Be Losing Its Edge, Bernstein Says
Blake Schmidt – Bloomberg
Bitmain is facing growing competition as it plans for an IPO; Analyst says TSMC should require full prepayment from Bitmain
Bitmain Technologies Ltd., the designer of cryptocurrency mining chips that’s planning a landmark initial public offering, may be losing its technological edge, according to Sanford C. Bernstein & Co.
/jlne.ws/2LlkBub

UK Warns No-Deal Brexit to Raise Prices and Burden Pensioners
Robert Hutton – Bloomberg
British retirees in EU may lose access to U.K. bank accounts; Consumers will see the cost of using their credit cards go up
Britons face higher prices when buying from the European Union unless the government can secure a Brexit deal, while retirees in countries like Spain risk losing access to pensions paid into U.K. banks.
/jlne.ws/2LmAYqr

SEC rejects nine proposals for bitcoin ETFs
Reuters Staff
The U.S. Securities and Exchange Commission (SEC) on Wednesday rejected applications for nine bitcoin-based exchange-traded funds (ETF) from three separate companies.
/jlne.ws/2LkkUWn

Elon Musk and Tesla Might Not Have to Worry About the SEC; The hesitant, understaffed regulator may have a hard time applying its outdated rules to the founder’s tweets.
Robert Schmidt, Benjamin Bain – Bloomberg
Elon Musk’s tweet about taking Tesla Inc. private has brought intense scrutiny, mostly of Musk, but also of U.S. securities regulators. The Securities and Exchange Commission would seem to have a strong case that Musk was at the very least being misleading when he tweeted on Aug. 7 that he’d “secured” financing for a privatization deal. He appeared to indicate he hadn’t closed a deal in a subsequent blog post. That could be a violation of securities laws. Yet the probe is fraught with minefields.
/jlne.ws/2LjvXPC

Exchanges, OTC and Clearing

EEX targets local Asia, US commodity markets
Louisa Chender – Global Investor Group
EEX Group CEO says obtaining a clearing licence in Singapore was a big hurdle to overcome
bit.ly/2nZzUPZ

SGX FX Futures volume rises above US$93 billion in July amid surge in USD/CNH trading; year-on-year growth climbs to 173%
SGX
Rising concerns that protracted trade tensions between China and the US may evolve into a full-fledged currency war kept the market on tenterhooks in July. While emerging markets are typically more volatile, the threat of a spillover of trade issues has the potential to upset most economies. The growing trade war rhetoric has only served to accentuate how convergence of geopolitical concerns and country-specific issues can damage fragile recoveries in the global economy.
/goo.gl/5QqdHF

AITE Group report (part II): how margin cost drives the choice of exchange
Eurex
For us at Eurex, MSCI is a major strategic focus point. That is why we constantly explore market developments and continuously expand our MSCI offering. To research MSCI exchange-traded derivatives (ETDs) in today’s market structure, we teamed up with AITE Group. In the second part of the three-piece study, the importance of margin cost in choosing an exchange is outlined.
/jlne.ws/2Ln8ehz

Fintech

Cinnober: Q2 2018 Presentation
Cinnober
Regarding our balance sheet and our commitment to self-fund our ongoing business operations and growth initiatives:
On 30 June 2018, Cinnober had SEK 99.0 million in cash on its balance sheet, compared to SEK 86.8 million on 31 March 2018.Despite the ongoing funding of operating losses and our investment in KRM22, cash increased quarter-on-quarter as a result of the 60% sale of our Irisium market surveillance subsidiary, and more effective management of working capital.
While we expect our cash balance to decline throughout the remainder of the year, we believe that continued active management of working capital will ensure sufficient funding.
In addition, we expect our operating losses to significantly decline as we progress throughout the remainder of the year. I want to be very clear on this point: we have no plans, nor do we anticipate, asking shareholders for equity capital.
bit.ly/2Ms3wnT

Vela Partners With CoinMarketCap To Include Cryptocurrencies In SuperFeed
Vela
Vela, a leading independent provider of trading and market access technology for global multi-asset electronic trading, today announced a partnership with CoinMarketCap, the world’s most trusted and accurate source of data for cryptocurrencies. This exclusive agreement marks a new addition to the asset class coverage for Vela’s Market Data Feed service, SuperFeed.
/jlne.ws/2LhbxXs

Thomson Reuters to provide MiFID II reference data to Trax
Finextra
Thomson Reuters has entered into an agreement with Trax to provide its trusted reference and market data to support Trax’s MiFID II regulatory reporting and Systematic Internaliser (SI) determination services.
/goo.gl/HinP6A

Temenos partners with U.S. headquartered UMB Fund Services to drive exchange traded fund growth
Finextra
Temenos, the banking software company, today announced that Milwaukee, Wisconsin-based UMB Fund Services (UMB) signed an agreement to modernize its Exchange Traded Funds (ETF) administration capabilities using Temenos’ Multifonds platform.
/goo.gl/hFsbsE

TD Ameritrade Launches AI-Powered Chat Bot Experience for WeChat in Hong Kong
TD Ameritrade
Individual investors in Hong Kong can access market updates and investor education in English and simplified Chinese using WeChat HONG KONG – TD Ameritrade Holding Corporation (Nasdaq: AMTD) is bringing financial market updates, investor education and research to retail investors in Hong Kong through WeChat, which recently hit 1 billion daily active users.1
/goo.gl/Fy2LDQ

Cryptocurrencies

China Seeks to Block Access to 124 Foreign Crypto Exchanges
Wolfie Zhao – Coindesk
Chinese regulators are moving to block more than 100 overseas crypto exchanges offering trading services to domestic investors.
Shanghai Securities Times, a mouthpiece of the Chinese financial authorities, reported on Thursday that the China National Fintech Risk Rectification Office has so far identified 124 trading platforms with overseas IP addresses but that are still available in the country.
bit.ly/2MJ6TpL

Bitcoin spiked after a major trading platform went down, and it created a golden opportunity for traders
Sam Jacobs and Frank Chaparro – Business Insider
Bitcoin’s value surged Tuesday evening, rocketing from around $6,450 to nearly $6,900 almost instantly. The move coincided with scheduled maintenance on BitMEX, a derivatives trading platform for bitcoin and other cryptos. And insiders say the move precipitated some wild trading.
/goo.gl/ng55XD

The World Bank Is About to Settle a Blockchain Bond Worth $73 Million
Wolfie Zhao – Coindesk
The World Bank is expected to settle its first blockchain-based bond worth $73 million this month. Australia’s Commonwealth Bank (CommBank), which was selected as the sole arranger of the issuance by the World Bank early in August, said the bond is to be transacted on Aug. 28, as reported by Reuters on Thursday.
/goo.gl/Qspvi6

Japan Has No Plans to Curb Crypto, Seeks Further Growth
Prateek Dimri – NewsBTC
Japan’s positive stance on cryptocurrencies just got reaffirmed. “We have no intention to curb (the crypto industry) excessively,” said Toshihide Endo, the commissioner of Financial Services Agency (FSA), Japan’s top financial regulator.
bit.ly/2MJCpnH

Kaspersky Lab: North Korea Hacks Cryptocurrency Exchange With ‘First’ macOS Malware
William Suberg – Cointelegraph
North Korean hackers have infected a cryptocurrency exchange with malware for both Windows and macOS for reportedly the first time, Russian internet security company Kaspersky Lab announced Thursday, August 23.
/goo.gl/q61nM7

Liechtenstein Bank Issues Own Crypto Stable Coin, Aims to Become ‘Blockchain Investment Bank’
William Suberg – Cointelegraph
Liechtenstein bank Union Bank AG announced it was issuing its own security tokens and in-house cryptocurrency backed by fiat in a press release Friday, August 17.
/goo.gl/Z1y7en

Politics

Trump Predicts Stock Market Crash If He’s Impeached
Terrence Dopp and Justin Sink – Bloomberg
President Donald Trump said he doesn’t see a reason for Congress to impeach him but that the stock market would plummet and Americans would be poorer if lawmakers did so.
/jlne.ws/2LlIZfw

Massachusetts securities regulator faces primary challenge, focus on election handling
Tim McLaughlin, Nate Raymond – Reuters
Massachusetts Secretary of State William Galvin, one of the most aggressive U.S. securities law enforcers, next month will face his first primary challenge in over a decade from a rival who claims Galvin has neglected his role as the state’s top election overseer.
/jlne.ws/2LlmbMD

Business groups urge Trump, Erdogan to meet as dispute hits investments
Lesley Wroughton – Reuters
U.S.-Turkey business groups on Tuesday warned that a political dispute between the NATO allies was affecting investor confidence and had forced some firms to suspend investment plans.
/jlne.ws/2LoZyHc

Why Do Republicans Want To Gut Bank Regulations Even More?
Mayra Rodriguez Valladares – Forbes
Not satisfied with the regulatory relief that legislators bestowed upon banks under the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) signed earlier this year, seven Republican senators want to gut bank regulations even more.
/jlne.ws/2LoZXcG

Political tension frays key US and Turkey cotton trade; Collapse of lira this year has raised cost of imports as they are priced in dollars
Gregory Meyer in New York – FT
The sharp decline in Turkey’s lira and worsening tensions between President Recep Tayyip Erdogan and his US counterpart Donald Trump are fraying one of the most important trade relationships between the two countries — cotton sales.
/jlne.ws/2LlO2wi

Regulation

ESMA defines disclosure standards under Securitisation Regulation
ESMA
The European Securities and Markets Authority (ESMA) has issued today a set of draft regulatory and implementing standards (RTS/ITS) under the Securitisation Regulation, which concern the details of a securitisation to be made available by the originator, sponsor and SSPE, as well as the format and templates for doing so.
/jlne.ws/2LjEVw5

Exchanges hope to escalate high-frequency trading case to Supreme Court
Declan Harty – S&P Global
The largest U.S. exchange operators have petitioned the U.S. Supreme Court to take up a case questioning whether exchanges favor Wall Street’s fastest traders.
Brought in the wake of Michael Lewis’ 2014 book Flash Boys, the case hinges on whether exchanges sell and offer products and services that illegally favor high-frequency traders over slower institutional investors such as pension and retirement funds. Plaintiffs in the case include the city of Providence, R.I., and a group of pension and retirement funds.
/goo.gl/Y38wEQ

ISDA 2018 U.S. Resolution Stay Protocol
ISDA
The ISDA 2018 U.S. Resolution Stay Protocol (US Stay Protocol) was created to allow market participants to comply with regulations issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The US Stay Regulations impose requirements on the terms of swaps, repos and other qualified financial contracts (QFCs) of global systemically important banking organizations (G-SIBs).
/goo.gl/yEqFbo

New Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities—Action Required
Ropes & Gray LLP via JD Supra
On August 9, 2018, the National Futures Association (“NFA”) announced that, effective October 31, 2018, NFA members are required to make additional disclosures in connection with their virtual currency activities in accordance with recently adopted Interpretive Notice 9073 (the “Interpretive Notice”).1 The Interpretive Notice applies not only to asset managers that use virtual currency derivatives, but also to asset managers that use spot market virtual currencies. The disclosure requirements apply to promotional materials, disclosure documents and other offering documents.
/jlne.ws/2LgOsnK

Former banker pleads guilty in U.S. to role in laundering embezzled PDVSA funds
Reuters Staff
A former executive with Swiss bank Julius Baer pleaded guilty on Wednesday for his role in a billion-dollar scheme to launder money embezzled from the Venezuelan state-owned oil company PDVSA, the U.S. Justice Department said.
/jlne.ws/2LjUHr1

U.S. banking regulators ease liquidity rules for municipal securities
Pete Schroeder – Reuters
U.S. banking regulators said on Wednesday they were easing liquidity rules on the treatment of municipal securities, allowing banks to count more of the assets toward certain liquidity requirements.
/jlne.ws/2LlJW7A

Statement of CFTC Chairman J. Christopher Giancarlo on CFTC approval of NASDAQ Oslo ASA and Osaka Exchange as FBOTs
CFTC
I am pleased that we have moved forward with the Foreign Board of Trade (FBOT) applications of the NASDAQ Oslo ASA and Osaka Exchange. Granting FBOT applications demonstrates our commitment to deferring to the regulation and supervision of comparable governmental authorities.
/jlne.ws/2LgSkFi

CFTC Issues Orders of Registration to Osaka Exchange and Nasdaq Oslo ASA to Permit Trading by Direct Access from the U.S.
CFTC
The Commodity Futures Trading Commission (CFTC) announced today it has issued Orders of Registration to Osaka Exchange, Inc. (OSE), a Foreign Board of Trade (FBOT) located in Japan, and Nasdaq Oslo ASA (Nasdaq Oslo) an FBOT located in Norway. Under the Orders, OSE and Nasdaq Oslo are permitted to provide their identified members or other participants located in the U.S. with direct access to their electronic order entry and trade matching systems.
/jlne.ws/2LlNzKK

Investing and Trading

U.S. economy expected to slow, damaged by trade war: Reuters poll
Hari Kishan, Manjul Paul – Reuters
U.S. economic growth will slow steadily in coming quarters after touching a four-year high in April-June, according to a Reuters poll of economists, who expect President Donald Trump’s trade war to inflict damage.
/jlne.ws/2Li8ZrT

Fed officials suggest rates likely to rise soon, worry about trade war
Jason Lange – Reuters
Federal Reserve officials discussed raising interest rates soon to counter excessive economic strength but also examined how global trade disputes could batter businesses and households, minutes of the U.S. central bank’s last policy meeting showed.
/jlne.ws/2Ln3OY1

Institutions

Merrill Lynch Joins Brigade Downplaying Money-Market Mutual Funds; Clients’ uninvested cash now will be automatically routed to bank deposits
Jason Zweig – WSJ
Starting Sept. 4, Bank of America Corp.’s Merrill Lynch brokerage unit will no longer sweep its customers’ cash into money-market mutual funds, moving it instead into deposits at affiliated banks.
/goo.gl/PsCjqJ

Credit Suisse freezes $5 billion of Russian money due to U.S. sanctions
Brenna Hughes Neghaiwi, John O’Donnell – Reuters
One of Switzerland’s largest banks, Credit Suisse, has frozen roughly 5 billion Swiss francs ($5 billion) of money linked to Russia to avoid falling foul of U.S. sanctions, according to its accounts, further increasing pressure on Moscow.
/jlne.ws/2LjSnAe

Credit Suisse fires 2 employees after sexual assault investigation; Senior banker and manager based in London have had their contracts terminated
Stephen Morris in London – FT
Credit Suisse has fired two male employees in London after uncovering new evidence during an investigation into a historic sexual assault.
/jlne.ws/2LnnomN

Two Sigma Launches China-Focused Fund; It is the latest quant firm to launch a hedge fund targeting the country.
Stephen Taub – Institutional Investor
Another quant giant has launched a hedge fund that invests in China.Two Sigma, the world’s fourth-largest hedge fund firm, is currently raising money for Two Sigma China Core Equity Fund, L.P., according to a regulatory filing. The firm declined to comment.
/goo.gl/Ze2vBF

Goldman Sachs secures $1.5 billion sale, leaseback of London HQ
Reuters Staff
Goldman Sachs (GS.N) said on Wednesday it had sold its new, unfinished European headquarters in London to South Korea’s National Pension Service for 1.17 billion pounds ($1.49 billion) before moving staff to the site next year.
/jlne.ws/2LgRBny

Citigroup Has a Three-Year Plan to Reverse Its Falling Diversity
Jordyn Holman – Bloomberg
CEO Michael Corbat wants 8% of U.S. managers to be black; Bank’s diversity in U.S. workforce has dropped since 2009
After years of scant progress on diversity measures, Citigroup Inc. has created hard targets for raising the percentages of women and African Americans in management positions by 2021, according to an internal memo signed by Chief Executive Officer Michael Corbat and the Executive Management Team.
/jlne.ws/2Lkd3I4

Deutsche Bank London Threatens to End Business With Russia
Steven Arons and Olga Voitova – Bloomberg
Request for more information said to be part of broader push; Lender said to have sent letter to Russian government in June
Deutsche Bank AG threatened to end business with Russia’s government earlier this year in a letter sent to the state demanding that it provide more information related to know-your-customer records.
/jlne.ws/2LjWVXk

Stricken absolute return bond fund is a warning for investors; There is far from an obvious single culprit for GAM liquidating its $11bn vehicle
Robert Smith – FT
What do the following three bonds have in common? An unrated bond sold by a Chinese chipmaker’s British Virgin Islands subsidiary; a Turkish bank bond that now yields more than 14 per cent; and a bond that can convert into the shares of a company aiming to mine the Yorkshire moors for a niche industrial mineral.
/jlne.ws/2LlrhIT

JP Morgan to cut around 100 jobs in asset management; Approximately 100 jobs will be cut across the asset management business at JP Morgan as part of a routine review, according to the bank.
By Hayley McDowell – The Trade
JP Morgan is moving forward with plans to cut around 100 positions globally within its asset management division following a business review, The TRADE understands.
/jlne.ws/2Lk2GUM

Regions

Bundesbank’s Weidmann warns risks of trade war hit now higher
Claire Jones – FT
Germany’s top central banker has said the risks of a trade war denting global economic growth had risen, but said the European Central Bank still needed to press ahead with plans to ditch some of its crisis-era monetary support.
/jlne.ws/2Lp0Xxs

The Next Big Bet in Fracking: Water
Christopher M. Matthews – WSJ
Some investors see fortunes to be made in the U.S.’s hottest oil field – by speculating in water, not crude.
Fledgling companies, many backed by private equity, are rushing to help shale drillers deal with one of their trickiest problems: what to do with the vast volumes of wastewater that are a byproduct of fracking wells.
/on.wsj.com/2BBX20L

Europe’s new data law upends global online advertising
Kate Holton – Reuters
Europe’s new data privacy law has put a small army of tech firms that track people online in jeopardy and is strengthening the hand of giants such as Google and Facebook in the $200 billion global digital advertising industry.
/jlne.ws/2LjTYGe

German businesses under fire for low investment; Rising corporate savings blamed for huge external surplus
Guy Chazan in Berlin – FT
Germany’s massive current account surplus is usually blamed on a penny-pinching government obsessed with balanced budgets and frugal households hoarding cash. Yet the main culprit is German business.
/jlne.ws/2LoWESO

Puerto Rico Bonds: A Surging Force
Kevin Horan – S&P Dow Jones Indices
After wreaking havoc on the municipal bond markets, Puerto Rico bonds have recently been adding value through their recovery. Bonds rallied after the latest debt restructuring deal was struck between the commonwealth and the bond holders. Additional supporting news, as mentioned in an article from Reuters,[1] was a federal court ruling affirming the budgetary powers and enforcement of fiscal discipline by the federal oversight board that was created by the 2016 federal PROMESA Act.
/goo.gl/gojKCE

Vietnam’s coffee growers face profit squeeze from bumper crop; Farmers fear record output and competition from other countries will depress prices
John Reed in Buon Ma Thuot – FT
Vietnam’s robusta coffee growers are anticipating a bumper crop this reason — good news for fans of an instant cup but bad for the profit margins of hard-pressed farmers in the world’s largest exporter of the commodity.
/jlne.ws/2LndotM

Goldman Sachs closes two lacklustre Asia-Pacific hedge funds; Tokyo, Hong Kong managers to depart company as regional market struggles
Emma Dunkley in Hong Kong- FT
Goldman Sachs is closing two Asia-Pacific focused hedge funds with $1.4bn in assets combined following lacklustre performances, in the latest sign of the sector’s recent challenges across the region.
/jlne.ws/2LlP4IG

Brexit

Red tape, border delays if no Brexit deal, Britain warns firms
Kylie MacLellan – Reuters
British companies trading with the European Union will face a tangle of red tape and possible delays at the border if the government fails to negotiate an exit deal before Britain leaves the bloc, official papers showed on Thursday.
/jlne.ws/2LlJMwO

Fog in the Channel? How have equity markets reacted to Brexit news?
Srdan Tatomir, Iryna Kaminska, Marek Raczko and Gregory Thwaites – Bank Underground
How have equity markets responded to news about Brexit? To answer this we split firms into those whose share prices are particularly sensitive to Brexit-related news, and those which are not. The latter group provides a “control sample”, against which to assess the impact of individual pieces of news on the former. The ratio of the two groups’ prices gives a barometer of equity market sentiments around Brexit. So far, this measure points to downward pressure on valuation of companies more exposed to Brexit. The bulk of the fall occurred on the night of the referendum, with little movement afterwards, suggesting little additional “news” from subsequent developments beyond the immediate aftermath.
/goo.gl/JMK4hk

Britons living in EU could lose access to UK bank accounts in no-deal Brexit
Huw Jones, Andrew MacAskill – Reuters
Britons living in the European Union could lose access to their UK bank accounts and businesses on the continent could be cut off from investment banks in London if there is a no-deal Brexit, the British government said on Thursday.
/jlne.ws/2LoW33w

The Rich Still Want to Move to London Despite Visa Review
Neil Callanan – Bloomberg
More than 90 immigrants to the U.K. were granted investor visas in the second quarter as Britain continues to draw wealthy people. Prime Minister Theresa May said earlier this year that the government was reviewing the so-called Tier 1 investor program after Labour Party lawmaker Yvette Cooper questioned the origin of money from 700 Russians who have been granted the visas. The number of applicants fell sharply in 2015 after the government doubled the minimum investment for the permit to 2 million pounds ($2.6 million) and new anti-money laundering due diligence checks were introduced.
/jlne.ws/2Lk9X6U

The post Wall Street’s sector shakeup will let more tech stocks shine appeared first on John Lothian News (JLN).

First Read

Hits & Takes
By JLN Staff

On Wednesday, Matthew Kelly of the CME Group taught the law merit badge to a group of scouts as part of the Trading Tech 300 program for the 3rd year in a row. Thank you to Matt and his associates who helped, and to the CME Group for hosting this workshop. I greatly appreciate the CME Group’s historical support for Scouting.~JJL

Yesterday, our friends at US Bank held a personal finance merit badge clinic as part of Trading Tech 300. Thank you to US Bank for the incredible experience you gave the Scouts.~JJL

Clarification: In yesterday’s newsletter we mentioned a webinar presented by the Montreal Exchange but did not make it clear that the webinar was directed only to our non-U.S. readers. According to SEC rules, foreign stock options are only available to U.S. residents who are “qualified institutional buyers” subject to a number of specific “familiarization” procedures. ~SR

A headline in Sky News reads: Parrots able to make complex economic decisions, study shows. Write your own punchline – it’s too easy. ~SR

Put Optiver’s Tech Blog on your reading list.~JJL

There is one week left to save on #FIAExpo full conference & single day session passes! Register by August 31 for early bird rates & join us in Chicago this October.~JJL

Here are details about LME Week in London.~JJL

++++

MWE World of Opportunity – Why Fundamentals are Important

JohnLothianNews.com
“If you want to be a really good trader… understand the cash markets to the best of your ability. Crawl inside of them so you know what’s going on.”

After years of market focus shifting away from fundamental analysis, Dan Basse, president of AgResource, thinks the pendulum is finally swinging back. In this video from MarketsWiki Education’s Chicago event, Basse talks about a few essential tools everyone should have to help analyze agricultural futures markets.

Watch the video here »

++++

CFTC Wins Permanent Ban Against ‘Vicious’ Bitcoin Operator
Patricia Hurtado – Bloomberg
The Commodities Futures Trading Commission won a court order permanently banning a cryptocurrency promoter that a judge said preyed on investors in “a bold and vicious fraud.”
/jlne.ws/2w95Vtm

***** We have a special place in regulatory hell for vicious fraudsters.~JJL

++++

At Hedge Funds, Where Are the Women?; Women run only two of the top 50 funds; instead they cluster in positions away from the money
Rob Copeland – WSJ
At hedge funds, women do just about any job—but rarely run the money. Of the largest 50 U.S. hedge funds by assets under management, only two have women as their top investment executive, according to a Wall Street Journal analysis of data from researcher Absolute Return. In that same group of 50 hedge funds, half the investor-relations or marketing departments have female heads or co-heads.
/jlne.ws/2waX4aO

****** The question answers itself. We need more.~JJL

++++

Thursday’s Top Three
Our top read stories on Thursday were led by Reuters’ Wall Street’s sector shakeup will let more tech stocks shine. Second was Reuters’ CME to launch Libor-substitute contract linked to BoE rate meetings. Third was S&P Global’s piece Exchanges hope to escalate high-frequency trading case to Supreme Court

++++

MarketsWiki Stats
131,703,219 pages viewed; 23,256 pages; 214,681 edits
MarketsWiki Statistics

++++

Lead Stories

Illinois Court refuses to dismiss indictment against software developer in spoofing conspiracy case
Maria Nikolova – FinanceFeeds
A spoofing case targeting Jitesh Thakkar, the founder and principal of Edge Financial Technologies Inc., continues at the Illinois Northern District Court after the Honorable Robert W. Gettleman has refused to dismiss the indictment against the defendant.
/goo.gl/UuJ675

**** Law360 has the story here and the initial indictment from February can be found here.~SD

Bitcoin ETFs Aren’t Coming Any Time Soon Thanks to the SEC
Rachel Evans and Lily Katz – Bloomberg
Commissioner Peirce tweets that SEC is reviewing rejections; Peirce’s push to reexamine ruling seen unlikely to succeed
Don’t hold your breath for a U.S. exchange-traded fund that invests in Bitcoin. Prospects for such a fund took a nosedive on Wednesday when the Securities and Exchange Commission rejected requests to list nine cryptocurrency funds, citing continuing concerns about manipulation and market surveillance. Hester Peirce — one of four commissioners currently at the SEC — has since said the agency will review that decision. A ruling reversal is however unlikely.
/jlne.ws/2w9EY9b

Wiretaps Show French Crackdown on Insider Trading; Once ignored, the offense is being targeted in a push to fight white-collar crime.
Gaspard Sebag – Bloomberg
It was a busy Thursday, and Stephane Fima was on edge. After wrapping up a conference call with colleagues, the Société Générale SA managing director rang his friend Thomas Seligman. Fima stammered that he was worried and wanted “to stay safe,” then started reading a series of seemingly random figures. “Just write them down,” the banker said, before asking Seligman if he had another phone.
/jlne.ws/2waHewW

Eurodollar Whale Betting on Fed Rates Looks Well Beyond December
Edward Bolingbroke – Bloomberg
Large bets have been amassed in puts expiring in 2020-2021; December eurodollars face IOER uncertainty, among other risks
It looks as though there’s a new eurodollar options whale in town who doesn’t care whether the Federal Reserve raises rates in December. With the market assigning near-even odds to a fourth rate increase in 2018, the newly popular wager is on where the benchmark rate will come to rest well beyond that.
/jlne.ws/2w79noE

U.S. banking profits hit record $60 billion in second quarter: FDIC
Pete Schroeder – Reuters
The U.S. banking sector reported a record $60.2 billion in profits in the second quarter, up 25.1 percent from the same period one year ago.
/reut.rs/2o31g7Z

UniCredit, SocGen decline to comment on tie-up report
Reuters Staff
UniCredit (CRDI.MI) and Societe Generale (SOGN.PA) declined to comment on a report that Italy’s biggest bank was working with a senior Rothschild banker to advise it on a possible merger with the French lender.
/goo.gl/XE6wiK

Little-known Chicago fund wins big in US IPO bonanza; Driehaus Capital invested in more than half of 20 best-performing new listings in 2018
Lindsay Fortado and Nicole Bullock in New York – FT
The best picker of initial public offerings in the US this year is not one of the Wall Street’s celebrated money managers or big-name investment gurus but a Chicago-based mutual fund group with less than $9bn under management.
/jlne.ws/2w9zlYx

Fed’s Fork in the Road: Even Higher Rates or Pause
Bluford Putnam and Erik Norland – CME Group
As has been the case several times in the current tightening cycle, there is a large gap between what the Federal Reserve (Fed) suggests it is likely to do and what the market believes the Fed will accomplish. The Fed’s “dot plot,” a survey of Federal Open Market Committee (FOMC) members’ expectations for future policy, suggests that the Fed will likely hike twice more in 2018, three times in 2019 and two times in 2020. That’s seven more rate hikes before the Fed calls it quits. Moreover, unless long-term bond yields rise, seven more rate hikes would be enough to invert the curve and bring short-term interest rates to around 75 basis points (bps) over 30-year rates.
/goo.gl/LnfbkC

ECB hawk Weidmann sees chances dimming of succeeding Draghi
Paul Carrel, Balazs Koranyi – Reuters
Germany’s Jens Weidmann is seeing his prospects of becoming European Central Bank president fade, amid signs that trade issues handled in Brussels are eclipsing Berlin’s concerns about securing its man to steer monetary policy.
/reut.rs/2BH4qYL

Financial firms are increasingly giving away their services for free
John Detrixhe – Quartz
Zero is the most sought-after number in personal finance right now. TransferWise, for example, has spent years grinding down the cost of sending money across borders. The end goal is to make transfers as easy as sending email—meaning potentially even free.
/jlne.ws/2w9sHl0

SEC to review decision rejecting bitcoin ETFs
Trevor Hunnicutt, Michelle Price – Reuters
The U.S. Securities and Exchange Commission said on Thursday it will review a decision by its staff to block nine bitcoin-based exchange-traded funds from coming to market.
/jlne.ws/2w9IEYf

The Fed Worries About Corporate Monopolies. Investors Should Just Buy Them; Shareholders should embrace companies with a commanding position in their business, limited competition and less need to invest
James Mackintosh – WSJ
Is rising corporate power hurting capital spending, wage growth and U.S. productivity? Central bankers meeting in Jackson Hole, Wyo., to discuss the issues will be worrying that the answer is yes. Investors should be thrilled if it is.
/jlne.ws/2wbhtMP

Exchanges, OTC and Clearing

SGX, Nasdaq and Singapore regulator to develop blockchain settlement system; MAS and SGX have been among the leaders in promoting the use of blockchain technology in financial markets.
Joe Parsons – The Trade
Singapore Exchange (SGX), Nasdaq and the Monetary Authority of Singapore (MAS) will collaborate with two other tech vendors to create a blockchain settlement system for cryptocurrencies.
/jlne.ws/2w99DmM

MAS and SGX partner Anquan, Deloitte and Nasdaq to harness blockchain technology for settlement of tokenised assets
SGX
The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) today announced a collaboration to develop Delivery versus Payment (DvP)[1] capabilities for settlement of tokenised assets across different blockchain platforms. This will allow financial institutions and corporate investors to carry out simultaneous exchange and final settlement of tokenised digital currencies and securities assets, improving operational efficiency and reducing settlement risks.
/jlne.ws/2Lq0ICB

China CSD goes live with DvP settlement for Bond Connect; The adoption of the new settlement system could significantly boost foreign investment into the Chinese domestic bond market.
Joe Parsons – The Trade
China’s main central securities depository (CSD) has gone live with delivery verses payment (DvP) settlement for its cross-border fixed income trading platform.
/jlne.ws/2whpakT

Connection fee rebates for new Trading Members affiliated with existing Trading Member
Eurex
To support new Trading Members with an affiliated existing Trading Member, Eurex Frankfurt AG will offer a temporary rebate on the connection fees of new Trading Members effective from 1 October 2018 to 31 March 2019.
/jlne.ws/2waL5Kq

CCP Release 16.0: Introduction announcement
Eurex
With this circular, Eurex Clearing announces the introduction of CCP Release 16.0 on 19 November 2018, which will have an impact on the CCP services. It is voluntary for all Clearing Members of Eurex Clearing and contains the following changes:
/jlne.ws/2w9P8qa

Green and Sustainable Finance Cluster Germany presents baseline report; Mobilizing the financial sector for climate protection and sustainable investments
Deutsche Börse Group
The Green and Sustainable Finance Cluster Germany presented its baseline report on Friday in Frankfurt with an inventory of sustainability activities in Frankfurt as a financial center. The report is the first publication of the cluster, which merged in the spring of 2018 from the Green Finance Cluster Frankfurt of the Hessian Ministry of Economic Affairs and the Accelerating Sustainable Finance Initiative of Deutsche Börse. The aim of the cluster is to mobilize the financial sector more for climate protection and sustainable investment
/jlne.ws/2w9BkvX

ICE Data Indices, LLC Successfully Completes Independent Assurance Review on its Implementation of the IOSCO Principles for Financial Benchmarks
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, today announced that ICE Data Indices, LLC, has successfully completed an assurance engagement on its implementation of the IOSCO Principles for Financial Benchmarks. ICE engaged PricewaterhouseCoopers LLP (PwC) to perform the assurance engagement.
/jlne.ws/2LkXaBf

HKEX Announces Details of Launch of NB Investor ID Model on 17 September
HKEX
EPs must assign a unique number to each of their Northbound trading clients and provide Client Identification Data to HKEX; HKEX will facilitate market readiness and compliance by providing a secure file transfer protocol service for EPs to submit the required information from 27 August
Hong Kong Exchanges and Clearing Limited (HKEX) today (Friday) announced the launch details of the investor identification model for Northbound trading (NB Investor ID Model) through its mutual stock market access programme with the exchanges in Shanghai and Shenzhen (Stock Connect) after market regulators said the model will be launched on 17 September 2018 (Monday).
/jlne.ws/2LrAdfM

Exchange Publishes Frequently Asked Questions on Listing of Companies from Emerging and Innovative Sectors
HKEX
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) Frequently Asked Questions (FAQs) for prospective applicants under Chapters 8A, 18A and 19C of the Main Board Listing Rules (New Chapters).
/jlne.ws/2LmGj1b

Energy Producer Statkraft to Integrate Nasdaq’s SMARTS for Trade Surveillance
GlobeNewswire
Statkraft, Europe’s largest producer of renewable energy has selected Nasdaq’s SMARTS Trade Surveillance to monitor trading behavior across power markets in the EU and Norway, in line with the Market Abuse Regulation (MAR).
/jlne.ws/2Lmzug4

SEDOL Masterfile expands its data offering with US fixed income additions
London Stock Exchange Group
London Stock Exchange’s SEDOL service, is pleased to announce significant enhancements to the SEDOL Masterfile. 11 new security types have been added to the Data Dictionary incorporating approximately 1.5 million fixed income SEDOL codes covering all US Municipal and US Corporate Bond data. The data is provided by Mergent, part of FTSE Russell.
/jlne.ws/2LoBMLI

OSE Receives FBOT Registration from U.S. CFTC
JPX
Osaka Exchange, Inc. (OSE) is pleased to announce that on August 22, 2018, the U.S. Commodity Futures Trading Commission (CFTC) issued an Order granting OSE registration as a Foreign Board of Trade (FBOT) under the U.S. Commodity Exchange Act. The registration permits OSE to provide trading participants located in the U.S. with direct access to OSE’s trading system*.
/jlne.ws/2LoCBnM

Fintech

Look, no beard: Goldman Sachs’ Marcus subverts the fintech story
Patrick Collinson – The Guardian
We’ve seen the future of banking. Those fintechs clustered around London’s “Silicon roundabout”, such as Monzo (900,000 current account customers already) and Revolut (2 million customers since launch in 2015) have attracted smartphone-obsessed millennials with their digital prowess. But a new bank quietly launched on Thursday, called Marcus, turns the conventional fintech story upside down.
bit.ly/2Nfdsxx

What A No Deal Brexit Could Mean For Fintech
Madhvi Mavadiya – Forbes
Today, Brexit Secretary Dominic Raab discussed his plans for what has been dubbed as a no deal Brexit and suggested that Britons who are visiting the European Union could face extra credit card charges once Article 50 is triggered.
While ministers said that a deal is more than likely to be made, as reported in the BBC, the cost of card payments will “likely increase” and will not be covered by a ban on surcharges. Alongside this, companies that trade with the EU should plan for new customs checks and pay for new software.
bit.ly/2NdR7jU

Mexico’s new government wants fintech, banks to help financial inclusion
Stefanie Eschenbacher – Reuters
Mexico’s next government will look to fintech companies and large corporate banks to increase financial inclusion in the country, where only one-third of adults have a bank account, senior officials said on Tuesday.
/jlne.ws/2w781dy

Deutsche Bank Pushes Digital With Second Fintech Deal This Year
Sonali Basak and Steven Arons – Bloomberg
Deutsche Bank AG beefed up its digital banking operations again with a second investment in a fintech startup within four months, a move that points to a slow revolution at one of its most important divisions.
The German lender, which has been shrinking staff and operations internationally, agreed to buy an unspecified stake in Dallas-based startup ModoPayments, aiming to bolster its Global Transaction Bank and tap into the fast-growing channels outside of traditional banking.
/bloom.bg/2NjrGxu

Deutsche Bank takes minority stake in payments fintech ModoPayments; Start-up develops digital payments solutions for smartphones
Olaf Storbeck – FT
Deutsche Bank invested an undisclosed sum into US-based fintech company ModoPayments, acquiring a minority stake in the start-up that develops payments solutions for smartphones.
/jlne.ws/2LohUrV

Mexico’s new government wants fintech, banks to help financial inclusion
Kitco News
Mexico’s next government will look to fintech companies and large corporate banks to increase financial inclusion in the country, where only one-third of adults have a bank account, senior officials said on Tuesday.
Arturo Herrera, one of two future deputy finance ministers, said in an interview that the lack of financial inclusion was one of the biggest obstacles in the new government’s fight against poverty, inequality and slow economic growth.
bit.ly/2NeTZwG

Cryptocurrencies

John McAfee Launches McAfee Market News
[blokt]
John McAfee doesn’t seem to stop in his endeavor to influence the direction of the crypto community. After relentlessly backing the BitFi wallet, he recently announced the launch of a website called “McAfee Market News,” which will provide quotes, charts, and news for 1,800 coins. It will also offer analysis tools, blogs and real-time updates for the coins. As usual, the tweet and the project received some flak from the Twitterati.
bit.ly/2Ney9tj

Cryptocurrency exchange Bittrex teams with registered trading venue Rialto
Anna Irrera – Reuters
U.S.-based cryptocurrency exchange Bittrex is partnering with registered broker-dealer Rialto Trading to offer a trading venue for blockchain-based digital assets, the companies said on Thursday.
/reut.rs/2BFnqqn

The bitcoin bubble’s real losers
Katie Martin – Financial Times
A once-in-a-lifetime chance has emerged to invest in SchadenfreudeCoin — a decentralised digital token pegged to the smugness of No-Coiners who were never sucked into the ailing cryptocurrency fad.
The highly scalable, next generation, disruptive new coin comes with the backing of social media celebrities and provides the perfect hedge against the declining value of bitcoin. Hand over your bank details now.
/on.ft.com/2BDYyj5

China warns public over ‘blockchain’ Ponzi schemes; Retail investors told to be on guard against buzzwords and dubious marketing claims
Gabriel Wildau in Shanghai – FT
China’s government has warned of “criminals” attracting retail investors into Ponzi schemes using buzzwords such as “blockchain” and “virtual currency”, as official concerns over risk trump support for financial innovation.
/jlne.ws/2wbIsb3

A New York bond broker has partnered with Bittrex to develop a crypto trading platform; Rialto Trading and crypto exchange Bittrex are looking to launch a trading platform for blockchain-based digital securities.
Hayley McDowell – The Trade
A New York-based fixed income broker-dealer is teaming up with cryptocurrency exchange Bittrex to develop a digital securities trading platform.
/jlne.ws/2wcgCeK

Time For A Clean Up? Market Manipulation Concerns Loom Large Over Bitcoin ETF Rejections
Aaron Stanley – Forbes
The Securities and Exchange Commission rejecting proposals for bitcoin exchange traded funds is officially the crypto community’s ‘dog bites man’ news story.
/jlne.ws/2waH3BM

Crypto Exchange Coinbase Lists ‘Core Principles’ for Institutional Services
David Hundeyin – CCN
Coinbase has unveiled a set of guiding principles designed to facilitate the adoption and growth of its new range of products and services aimed at institutional investors.
In a blogpost signed by Coinbase Vice President and General Manager Adam White, the company stated that these ‘North Star’ principles will create a framework for the market participant experience on Coinbase to ensure fairness, security, transparency, access to all participants, high-quality infrastructure and processes, protection from malicious activity and provision of all necessary information.
bit.ly/2Nfa7hX

Politics

Trump Says the Stock Market Will Crash if He’s Impeached. Here’s What History Says
Ben Levisohn – Barron’s
It’s hard to ignore the possibility of impeachment when even President Donald Trump is talking about it. In an interview with Fox News that aired Thursday, Trump claimed the stock market would crash if he were impeached. Maybe it would. History, however, suggests that the specter of presidential impeachment has little impact on the market.
/goo.gl/TeoZRt

****Politico has the op ed below:

No, impeachment will not crash the stock market
Ben White – Politico
The longest bull market run in American history could get killed off by a financial collapse in Turkey, a policy mistake by the Federal Reserve or a plain old economic recession.
/politi.co/2BH71Sy

Will Stock Market Crash If Trump Is Impeached? What Analysts Say
Lu Wang and Sarah Ponczek – Bloomberg
Combined profit in the S&P 500 has soared under his policies; Question is whether any of that would be lost if he were gone
/bloom.bg/2BNaTBg

Manhattan D.A. Eyes Criminal Charges Against Trump Organization
William K. Rashbaum – NY Times
The Manhattan district attorney’s office is considering pursuing criminal charges against the Trump Organization and two senior company officials in connection with Michael D. Cohen’s hush money payment to an adult film actress, according to two officials with knowledge of the matter.
/jlne.ws/2w9EJuN

Tim Cook, Jamie Dimon Among CEOs Fearing ‘Harm’ From Trump Immigration Policy
Ben Brody – Bloomberg
Roundtable says growth risk from policy toward skilled workers; Business leaders write to DHS Secretary outlining their worry
Dozens of top U.S. business leaders including Apple Inc.’s Tim Cook, JPMorgan Chase & Co.’s Jamie Dimon and Pepsico Inc.’s Indra Nooyi signed a letter expressing “serious concerns” about the Trump administration’s immigration policy changes and their potential to undermine economic growth.
/jlne.ws/2w7e55C

Constitutional crisis and financial markets
Dan McCrum – FT
The boring if safe strategist response to politics is to mutter about uncertainty, animal spirits and fundamentals.
/jlne.ws/2w9xdjs

Regulation

CFTC Wins Trial against Virtual Currency Fraudster; Court Orders Defendants to Pay over $1.1 Million in Penalties and Restitution in Connection with the “Vicious Defrauding of Customers”
CFTC
A New York federal court entered final judgment ordering Patrick K. McDonnell of Staten Island, New York, and CabbageTech, Corp. d/b/a Coin Drop Markets (CDM), McDonnell’s New York-based company, to pay over $1.1 million in civil monetary penalties and restitution in connection with a lawsuit brought by the Commodity Futures Trading Commission (CFTC) alleging fraud in connection with virtual currencies, including Bitcoin and Litecoin.
/jlne.ws/2Lsr9HO

CFTC Unanimously Approves a Proposal to Amend the Clearing Requirement to Help End-Users
CFTC
The Commodity Futures Trading Commission (CFTC) today unanimously approved a swap clearing requirement proposed rule that would reduce unnecessary burdens on bank holding companies, savings and loan holding companies, and community development financial institutions.
/goo.gl/zAnCVm

****Giancarlo statement on the amendments here.

Podcast: CFTC Talks EP058: Craig Phillips, US Department of the Treasury
CFTC
This week on CFTC Talks, we talk with Counselor to the Secretary of the US Department of Treasury Craig Phillips…
/jlne.ws/2LrCxn0

Statement on Investor Roundtables Regarding Standards of Conduct for Investment Professionals Rulemaking
SEC.gov
In April 2018, the Commission proposed for public comment a significant rulemaking package designed to serve our Main Street investors that would (1) require broker-dealers to act in the best interest of their retail customers, (2) reaffirm and in some cases clarify the fiduciary duty owed by investment advisers to their clients and (3) require both broker-dealers and investment advisers to clarify for all retail investors the type of investment professional they are, and disclose key facts about their relationship.
/goo.gl/kvHURq

****The SEC also announced one in Baltimore.

SEC Names Matthew S. Jacques As Chief Accountant In Enforcement Division
Mondovisione
The Securities and Exchange Commission today announced that Matthew S. Jacques has been named the new chief accountant in the SEC’s Division of Enforcement.
/goo.gl/aLhpVL

Barry Miller, Associate Director in Division of Investment Management, to Leave SEC After More Than 40 Years of Public Service
SEC
The Securities and Exchange Commission today announced that Barry D. Miller, Associate Director of Disclosure Review and Accounting in the Division of Investment Management, will retire from the SEC at the end of this month after more than 40 years of public service, including more than 30 years of service at the SEC.
/goo.gl/xei3AB

Bifurcated Settlement Agreement
SEC
Gary S. Williky is a 55-year-old resident of Colleyville, Texas, who was an investor-relations consultant for the Evansville, Indiana-based public company Imperial Petroleum, Inc., from February 2010 through December 2011… While working for Imperial, Williky attempted to increase Imperial’s trading volume, which conveys to investors liquidity of – and public demand for – a stock.
/goo.gl/V7BN71

SEC v.Fishoff, et al.
SEC
This case involves unlawful trading in one issuer’s stock as part of a serial insider trading scheme perpetrated by a group of stock traders led by Fishoff. The overall scheme involved numerous stocks and generated over $5.5 million in total trading profits for Fishoff’s group over the course of several years. Of those total profits, $1.5 million was generated by the illegal insider trading that is the subject of this action.
/goo.gl/uNMSFB

Treasury Moves to Block New Yorkers’ Path Around Cap on State Tax Deductions; New regulations would blunt high-tax states’ efforts to bypass a new limit on state and local tax deductions with donation programs
Richard Rubin – WSJ
The Treasury Department moved Thursday to block attempts by New York, New Jersey and Connecticut to let taxpayers circumvent the new $10,000 cap on state and local tax deductions.
/jlne.ws/2wbgyMr

EU extends emergency ban on selling binary options to retail clients
Hannah Murphy – FT
Europe’s financial regulator has said it will extend a temporary ban on complex speculative products known as binary options to retail punters, as it continues to wield its new “emergency intervention” powers.
/jlne.ws/2waJFQ6

Two former company directors convicted for engaging in illegal phoenix activity
ASIC
Allan Raad of Wentworthville, NSW and his brother-in-law Yousef Joseph Bazouni of Sandringham, NSW, have been convicted and sentenced in the Downing Centre District Court after pleading guilty to ASIC charges concerning a breach of director’s duties and the fraudulent removal of company assets.
/jlne.ws/2Lq0BqF

ESMA to renew prohibition on binary options for a further three months
ESMA
The European Securities and Markets Authority (ESMA) has agreed to renew the prohibition of the marketing, distribution or sale of binary options to retail clients, in effect since 2 July, from 2 October 2018 for a further three-month period. ESMA has also agreed on the exclusion of a limited number of products from the scope of the measure.
/jlne.ws/2Lohsdd

Custom-Built Index Funds—Are You the Right Customer?
Pete Chandler – FINRA
There are custom homes, custom cars and custom clothes. Now, there are even custom index funds. Non-traditional index funds, or custom funds, can include mutual funds or exchange-traded funds (ETFs). These funds typically use more complex or targeted investing strategies than traditional index funds that track a particular market index. Rather than replicate an existing market index, these funds use custom-built indexes to select a fund’s investments.
/jlne.ws/2LmHe1D

Investing and Trading

Surging Production Is Killing Sugar Prices
Myra P. Saefong – Barron’s
Sugar prices have fallen to their lowest levels in a decade and are likely to drop further as record worldwide production collides with healthier eating.
Raw sugar futures traded on the ICE Futures U.S. exchange settled at 10.1 cents a pound on Monday, the lowest finish for a front-month contract since June 10, 2008, according to Dow Jones Market Data. Year to date, prices have lost more than 33%—the biggest percentage decline so far among major commodities.
bit.ly/2BE23Gf

Opinion: If you missed out on the FAANGs, then it’s time to buy the BAITs
Michael Brush – MarketWatch
For anyone who went to business school, a conversation with money manager Albert Meyer is like a trip back in time — straight to accounting class, that is.
/jlne.ws/2wcwyxC

For many young investors, the stock market’s only gone up
The Associated Press
Meet the generation of investors who haven’t known a bear market.
The U.S. stock market has been on the upswing for nine and a half years, during which a cohort of younger investors has never dealt with a 20 percent drop in the S&P 500 — the classic definition of a bear market. Such a decline has historically happened on average every four or five years.
/goo.gl/k9C5UC

Has Gold Lost Its Safe Haven Status?
Jim Iuorio – CME Group OpenMarkets
Before we pull back the layers on this topic, I would like to make a solemn promise to avoid the temptation of using trite and tired analogies to describe the descending price of gold, such as “lost its luster”. We can all agree that it is time to retire that one.
bit.ly/2BG0xTL

Dear Investor, That Cocky Voice in Your Head Is Wrong; The findings from the field of behavioral economics apply to everyone. Especially you.
Jason Zweig – WSJ
As much as all of us investors wish we were perfectly logical calculating machines, we are human: emotional, distractible, impatient, inconsistent. Behavioral economics is the study of how real human beings—not the walking, talking spreadsheets that traditional economists pretend we are—make financial decisions. Unfortunately, it’s all too easy to persuade yourself that the findings of behavioral economics apply to everyone else but you. After more than 20 years of studying research in that field, here’s how I think most investors interpret it. How many of these sound like you? I know many of them sound like me.
/jlne.ws/2w4rQlF

Space Investors Urged to Get Their Heads in the Clouds
Kamaron Leach – Bloomberg
Recent events accelerate significance of ‘space economy’; Adobe, Boeing, Facebook and Softbank among the stocks to gain
If you know nothing about what’s happening kilometers above the clouds, maybe you shoul
/bloom.bg/2BHFpN4

U.S. Hemp Firm Charlotte’s Web Boosts Canada IPO to $77 Million
Scott Deveau – Bloomberg
Boulder-based company originally sought to raise $50 Million; Latest U.S. cannabis company to list on Canadian exchange
Charlotte’s Web Holdings Inc., a producer of hemp-based cannabidoil products, boosted its Canadian initial public offering 52 percent to C$100.1 million ($77 million).
/jlne.ws/2w9xDGB

Institutions

Credit Suisse says committed to Russia after U.S. sanctions
Reuters
Credit Suisse (CSGN.S) said it remained committed to Russia after it ringfenced 5 billion Swiss francs ($5.02 billion) of customer money linked to Russia for fear of falling foul of U.S. sanctions.
/reut.rs/2BF1onI

Firstrade Moves To Free Online Trading – Stocks, ETFs, Options, Mutual Funds
Firstrade
Firstrade Securities, Inc., a leading online brokerage firm, has eliminated its commissions for all stocks, exchange-traded funds (ETFs), options, and mutual funds, effective today. Firstrade customers will now be able to trade for free with no time restrictions, no limits on the number of trades allowed and no minimum account requirements. The move is part of Firstrade’s ongoing commitment to offer the best investment choices for self-directed investors at little or no cost.
/goo.gl/DVUgRg

JPMorgan Is Planning to Hire for its Midsize Banking Push Abroad
Michelle Davis – Bloomberg
Calderon joins from Barclays in Mexico as part of the effort; Will have to compete with local banks’ longstanding ties
JPMorgan Chase & Co. is seeking to do more business with midsize companies abroad, expanding in a market that’s traditionally dominated by local banks, according to people briefed on the matter.
/jlne.ws/2w73B6u

Goldman Sachs opens digital consumer bank in Britain
Reuters Staff
Goldman Sachs (GS.N) has opened its digital consumer savings platform Marcus to its own staff in Britain ahead of a wider roll-out to the public in the coming weeks, according to an internal memo sent to staff on Thursday and seen by Reuters.
/jlne.ws/2w967J6

Deutsche Bank Pushes Digital With Second Fintech Deal This Year
Sonali Basak and Steven Arons – Bloomberg
Deutsche Bank AG beefed up its digital banking operations again with a second investment in a fintech startup within four months, a move that points to a slow revolution at one of its most important divisions.
/jlne.ws/2w8ujeQ

Regions

Norway $1 Trillion Fund’s Plan to Dump Big Oil Meets Resistance
Sveinung Sleire and Mikael Holter – Bloomberg
Norway’s $1 trillion sovereign wealth fund is meeting resistance on its plan to dump more than $40 billion in oil and gas stocks.
/jlne.ws/2wbi2X1

Foreign investors play defensive with China A-shares; Consumer companies seen as relatively insulated from external risks such as trade wars
James Kynge – FT
Overseas investors getting to grips with China’s A-share market show navigational tendencies similar to self-driving cars. “Obstacle avoidance” appears to be the overriding priority guiding foreign funds nearly three months after A-shares were included in the benchmark emerging markets’ index for the first time.
/jlne.ws/2wbd9Nv

Brexit

U.K. Outlines Plan to Avert Chaos of a No-Deal ‘Brexit’
Stephen Castle – NY Times
The British government issued its first contingency plans on Thursday for leaving the European Union without an agreement, seeking to prepare the public for possible disruptions without spreading alarm that could undermine support for the entire undertaking.
/nyti.ms/2NeL26K

UK food exports to EU may be stalled by ‘no deal’ Brexit: NFU
Reuters Staff
Britain could be barred from exporting some food to the European Union for months if it leaves the bloc without a deal, the National Farmers Union said on Thursday after the government published reports on that scenario.
/jlne.ws/2w7d7q0

Hunt says parliament will only approve Brexit deal consistent with vote
Reuters Staff
Britain’s foreign minister, Jeremy Hunt, said on Thursday he believed the British parliament would only approve a Brexit deal that was consistent with the “letter and spirit” of the 2016 referendum result in favor of leaving the European Union.
/jlne.ws/2w6YZwO

No-deal Brexit will bring tangle of red tape, Britain warns companies
Kylie MacLellan, Kate Holton – Reuters
Britain on Thursday told companies trading with the European Union they would face a tangle of red tape, possible border delays and more costly credit card payments if the government fails to negotiate an exit deal before Britain leaves the bloc.
/jlne.ws/2wchznk

Dublin Isn’t Showing It’s Luring Bankers Because of Brexit Just Yet
Peter Flanagan – Bloomberg
Irish capital’s luxury housing market cools amid uncertainty; City had been expecting surge of finance workers to relocate
In Dublin, bankers seeking shelter from Brexit are thin on the ground. So far. Ireland’s luxury homes market had been pegged as one potential big winner from U.K. firms seeking a base within the European Union. Yet, Ireland’s booming capital is seeing little impact from bankers relocating, even after Bank of America Corp. and Barclays Plc chose the city as their European hubs.
/jlne.ws/2waRzZP

Miscellaneous

The fake news about journalism; Simon Kuper responds to common charges against his profession
Simon Kuper – FT
One oddity of being a journalist these days is that non-journalists are always critiquing the profession. It isn’t only Donald Trump. Many see broadsheet newspapers and public-sector broadcasters as a liberal cartel that cooks up ” fake news”. But few of our accusers understand our everyday working practices. That’s normal: hardly anyone knows much about life in other professions. I’ve only the vaguest idea of how people in construction or advertising do their jobs, or how they think of themselves. Below I have responded to common charges against contemporary upmarket journalism by explaining how it actually works day by day.
/jlne.ws/2w9MFfl

The post Illinois Court refuses to dismiss indictment against software developer in spoofing conspiracy case appeared first on John Lothian News (JLN).

First Read

A Couple of Takes on the Voice of Blockchain Conference
By Sarah Rudolph and Chuck Mackie – JLN

A few folks from JLN attended the Voice of Blockchain Conference at Navy Pier this past Friday and Saturday. Here are some observations from two of them:

Sarah Rudolph:
The Voice of Blockchain event at Navy Pier was big – at least, the room where it was held was enormous, with the microphones on each stage just loud enough to drown out the echo from the microphones on the other stages. There was perhaps an overabundance of stages and topics from which to choose, but there were some interesting speakers as well as startup companies with vendor booths.

Denny Chared of DC Finance provided some outspoken humor at a panel on Funds of Funds vs Family Wealth moderated by Kim Parnell, CEO of Blank. Chared called many of the ideas and whitepapers coming out of the crypto sphere “crazy,” and said some of the people involved are “fanatics” who wanted to get rid of mediators (“referees” who have a role in keeping matters impartial or safe).

For the rest of the story, go here.

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Hits & Takes
JLN Staff

U.S. Senator John McCain died over the weekend. What I think about with John McCain is the life defining moment when he chose trustworthiness and loyalty to his fellow soldiers over his own personal well being after his plane was shot down during the Vietnam war and he was taken prisoner. He was offered the opportunity to go home because of his stature as the son of a high ranking U.S. Navy admiral. However, he would not leave until those who were captured before him were released. It took courage and fortitude to make that decision and stay with it. I will always remember him for his trustworthiness, loyalty and courage.~JJL

“London is adding 40,000 trees to its skyline in a bid to turn the sprawling British metropolis into a “national park city”.~World Economic Forum

From the MFA and AIMA petition to the SEC on trading fees: “many exchanges have continued to increase securities market data fees year-after-year, by some estimates 20 percent or more a year for the last five years.”~JK

Take a look at Dan Basse’s presentation from MarketsWiki Education World of Opportunity. It is a great primer on the importance of fundamentals and the current state of grain fundamentals around the world.~JJL

I will be in JLN’s Chicago offices again today. This will be my second day in the office after my recent hip replacement surgery. Let’s see if this goes any better than the last time.~JJL

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Bridging the Week: August 20 to 24 and August 27, 2018 (CCOs; Annual Compliance Report; Bitcoin Futures ETPs; Reg SHO: Virtual Currency)
Gary DeWaal – Bridging the Week
The Commodity Futures Trading Commission revised its rule related to the responsibilities of chief compliance officers of futures commission merchants, swap dealers and major swap participants, as well as the obligations of such registrants for the annual compliance reports they are mandated to prepare and file with the CFTC. The goal is to make the rule simpler and clearer. Separately, on August 22, the Securities and Exchange Commission through its staff declined to approve two exchanges’ proposed rule changes to authorize the listing and trading of nine exchange-traded products based on CFTC-sanctioned bitcoin futures contracts.
/goo.gl/3Vz9b4

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Friday’s Top Three
Our top read story by a long shot yesterday was the case update on Jitesh Thakkar in Finance Feeds’ piece Illinois Court refuses to dismiss indictment against software developer in spoofing conspiracy case. Second was the intro to Optiver’s new technology blog page. More to come from that firm. And third was Bloomberg’s coverage of CabbageTech in CFTC Wins Permanent Ban Against ‘Vicious’ Bitcoin Operator

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MarketsWiki Stats
131,816,609 pages viewed; 23,257 pages; 214,720 edits
MarketsWiki Statistics

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Lead Stories

Are Superstar Firms and Amazon Effects Reshaping the Economy?; The biggest companies may be influencing things like inflation and wage growth, possibly at the expense of central bankers’ power to do so.
Neil Irwin – NY Times
Two of the most important economic facts of the last few decades are that more industries are being dominated by a handful of extraordinarily successful companies and that wages, inflation and growth have remained stubbornly low.
/jlne.ws/2PEtgeK

Hedge funds seek review of market data fees, ‘pickles’ and all
John McCrank – Reuters
The two main hedge fund trade groups have joined a growing chorus of stock market participants asking U.S. regulators to reign in “unreasonable” data fees charged by some exchanges, which they said restrict trading and harm competition.
/jlne.ws/2whIttZ

When independent directors are not so independent; Three recent cases question whether investors were properly represented in deals that benefited insiders
Sujeet Indap – FT
Just what makes a director of a listed US company “independent”? Elderly care company New Senior Living argued in court that a board member was unconflicted when he helped approve a 2015 buyout that benefited private equity titan Wes Edens. This director also happened to get the chance to buy a stake in the Milwaukee Bucks basketball team whose lead owner happened to be Wes Edens.
/jlne.ws/2whksTV

The Student Debt Problem Is Worse Than We Imagined
Ben Miller – NY Times
Millions of students will arrive on college campuses soon, and they will share a similar burden: college debt. The typical student borrower will take out $6,600 in a single year, averaging $22,000 in debt by graduation, according to the National Center for Education Statistics.
/jlne.ws/2whbrKJ

Goldman Cashes In on Passive-Investing Boom With Big 4 P.M. Trade; Banks crash exchanges’ end-of-day party
Alexander Osipovich and Liz Hoffman – WSJ
In lower Manhattan, the New York Stock Exchange’s bell rings at 4 p.m. ET each trading day, signaling a giant auction that determines the closing prices for thousands of stocks.
/jlne.ws/2whcQAP

Not Even $515 Million in New Tether Can Help This Crypto Dump
Matt Leising – Bloomberg
It’s getting hard to pump amid the dump in the $209 billion cryptocurrency market.
At least that appears to be the case when you look at Tether, one of the most-traded digital assets and also one that’s allegedly been used to manipulate the price of Bitcoin. Over half a billion dollars of Tether has been created in August alone, a move that in the past would have often coincided with a rally in Bitcoin, yet the larger cryptocurrency has fallen 15 percent.
/goo.gl/o1SC88

Tinkering will not deliver a stronger role for the euro; Giving the currency a bigger global function means rewiring the EU’s machinery
Wolfgang M¸nchau – FT
Heiko Maas, the German foreign minister, was right to call on the EU to play a bigger geopolitical role. I wish him well, but fear that the most important part of his proposal may be not have been sufficiently thought through.
/jlne.ws/2PHrIRd

St. Louis Fed’s Bullard warns of recession risk in raising rates
Ann Saphir and Howard Schneider – Reuters
St. Louis Federal Reserve Bank President James Bullard on Friday raised new alarm bells over the U.S. central bank’s plan to keep raising interest rates, warning that even one more rate hike could set the stage for recession.
/jlne.ws/2PHlZLl

Field of contenders for ECB top job widens after Weidmann setback; If Germany does not push its leading candidate, who will succeed Mario Draghi?
Jim Brunsden, Mehreen Khan and Claire Jones – FT
Much of the speculation over who will succeed Mario Draghi as president of the European Central Bank next year has centred on one man: Jens Weidmann of Germany.
/jlne.ws/2PEGeZT

Exchanges, OTC and Clearing

HKEX’s USD Gold Futures Receive Approval in Taiwan
HKEX
The Financial Supervisory Commission of the Taiwan Securities and Futures Bureau approved the inclusion of Hong Kong Exchanges and Clearing Limited’s US dollar Gold Futures (GDU) contract in its list of offshore exchanges and contracts for which FCMs have trading authorisation.
/jlne.ws/2PEMyAJ

OCC Recovery Tools, Recovery and Orderly Wind-Down Plan Approved by SEC
OCC
OCC, the world’s largest equity derivatives clearing organization, today announced that the U.S. Securities and Exchange Commission approved the company’s proposed recovery tools and proposed recovery and orderly wind-down (RWD) plan, providing critical tools designed to enable OCC to successfully manage extreme market disruptions in future financial crises.
/goo.gl/jUWpxx

What’s Driving 24-hour Trading of WTI Options?
Jeff White – CME Group OpenMarkets
You may already know CME Group’s NYMEX WTI options on futures are among the most actively traded commodity options in the world. You may also know that traders from global macro hedge funds to physical oil producers all use WTI options each day to hedge risk or express market opinions. What you may not know is that trading during non-U.S. hours by traders outside the U.S. has been the fastest growing component of the WTI options market. Volume growth outside U.S. hours has outpaced U.S. trading hours volume by over 20% year-to-date in 2018.
/goo.gl/Bxotn6

Regulator tightens rules on foreign-invested futures firms
Asia Times
According to the new rules, the proportion of shares held by foreign shareholders, including direct holding and indirect control, of foreign-invested futures companies shall be in line with the country’s arrangements for the opening up of the futures industry.
bit.ly/2Mzq71V

Renewal of FCM Regulations; Amendments to the Clearing Conditions and the Price List of Eurex Clearing AG; Consultation on amendments to Special Provisions
Eurex
In February 2016, the Commodity Futures Trading Commission (“CFTC”) granted Eurex Clearing the Status of a Derivatives Clearing Organization (ÑDCO”) for the clearing of Swaps.
/jlne.ws/2PHKmIz

SGX welcomes the listing of Nikko AM SGD Investment Grade Corporate Bond ETF, the first-of-its-kind in Singapore
SGX
Singapore Exchange (SGX) today welcomed the listing of Nikko AM SGD Investment Grade Corporate Bond ETF, the first exchange-traded fund (ETF) that offers investors easy access to a basket of Singapore Dollar-denominated, investment grade corporate bonds in affordable units.
/jlne.ws/2wcd64f

Borsa Istanbul begins work on setting up swap market
Reuters Staff
Turkey’s Borsa Istanbul has started work on setting up a swap market, beginning with foreign currency markets, the stock exchange said in a statement on Monday.
/jlne.ws/2PHOZlQ

MCX to roll out rubber futures contracts from August 16
Sutanuka Ghosal – ET
Multi Commodity Exchange of India Ltd (MCX) will commence trading in rubber futures contract effective August 16, 2018. This new agri contract is targeted towards offering an effective hedging solution to the rubber value chain participantsógrowers, traders, exporters, importers, and tyre manufacturing companies among others.
/jlne.ws/2wfRwfe

London Stock Exchange Registers Netherlands-Based Identifiers for Turquoise; Identifier codes for Turquoise have been registered ahead of a potential hard Brexit in 2019.
amsterdam-city-skyline
Hamad Ali, James Rundle – Waters Technology
Turquoise offers 4,500 stocks with uniform access to 19 major European markets. The multilateral trading facility is majority owned by the LSEG, in partnership with 12 banks.
/jlne.ws/2PBUEKi

Fintech

Look, no beard: Goldman Sachs’ Marcus subverts the fintech story
Patrick Collinson – The Guardian
Goldman Sachs breaks into fintech with the launch of Marcus. Photograph: Richard Drew/AP
We’ve seen the future of banking. Those fintechs clustered around London’s “Silicon roundabout”, such as Monzo (900,000 current account customers already) and Revolut (2 million customers since launch in 2015) have attracted smartphone-obsessed millennials with their digital prowess. But a new bank quietly launched on Thursday, called Marcus, turns the conventional fintech story upside down.
/jlne.ws/2wgPHhY

Nokia secures 500 million euro EU loan for 5G development
Reuters Staff
Finnish telecom network equipment maker Nokia has secured a 500 million euro ($572 million) loan from the European Investment Bank to step up development of next-generation 5G technology capable of faster speeds, wider coverage and more stable connections.
/goo.gl/J8Ruk5

New digital exchange seeks to host Islamic finance startups
Bernardo Vizcaino – Reuters
A new digital exchange aims to attract listings from sharia compliant financial technology startups, its chief executive said on Monday, part of a growing number of firms looking to modernize Islamic finance.
/goo.gl/c9yn93

Cryptocurrencies

It Was Meant to Be the Better Bitcoin. It’s Down Nearly 90%
Alexander Osipovich – WSJ
The bear market in cryptocurrencies has punished investors who bought bitcoin at the height of cryptomania last year. But losses have been even more brutal for those who invested in once-promising rivals of bitcoin.
/on.wsj.com/2o9oeKU

Crypto Tycoons Are About to Learn How Rich They Really Are
Blake Schmidt – Bloomberg
Mining-gear moguls are prepping for initial public offerings; Their firms have grown quickly, but crypto crash poses risks Some of the world’s biggest cryptocurrency tycoons are about to find out how much they’re really worth.
/jlne.ws/2wgEYnC

India Central Bank Forms New Unit to Tackle Blockchain Regulation
Wolfie Zhao – Coindesk
India’s central bank has reportedly formed a new unit devoted to researching regulatory frameworks for blockchain, cryptocurrencies and other technologies.
/goo.gl/a95yXW

UK Government Pilots Storage of Digital Evidence on a Blockchain
CCN
The UK Government has disclosed plans to conduct a pilot project for storing digital evidence on a blockchain.
/goo.gl/TCUnp5

Chinese bitcoin mining rig makers aim to raise billions in HK IPOs: sources
Alun John, Julie Zhu – Reuters
Three of the world’s largest bitcoin mining equipment makers plan to raise billions of dollars with initial public offerings in Hong Kong, even as other companies report plunging demand for the chips needed to make bitcoin and a halving in the price of the cryptocurrency.
/goo.gl/LCihqr

Cryptocurrency: Virtual money, real power, and the fight for a small town’s future
CBS News
Driving into the small town of Wenatchee, Washington, about three hours east of Seattle, a sign welcomes you to the “Apple Capital of the World.” But not far from the abundant orchards, a very different industry is taking root. As unlikely as it may seem, this rural community has become a hub for cryptocurrency mining.
/goo.gl/2DFntt

Bitcoin advocate Charlie Shrem: Here’s how long you should hold your crypto
JP Mangalindan – Yahoo Finance
Cryptocurrency may be notoriously unpredictable, but don’t let the price volatility deter you from investing, advises Crypto.IQ Chief Visionary Officer Charlie Shrem.
/jlne.ws/2PH6nqT

Politics

Mexico-U.S. Nafta Negotiators Signal Confidence After Marathon Sunday Session; ‘If we weren’t on track, we wouldn’t be coming back’ Monday, Mexico’s chief trade negotiator said
Josh Zumbrun – WSJ
Trade negotiators from the U.S. and Mexico are set to resume talks Monday morning after they worked late into Sunday evening haggling over a dwindling list of issues, and sending new signals they were close to resolving their bilateral differences.
/goo.gl/GXXG9e

Artificial Intelligence Is Now a Pentagon Priority. Will Silicon Valley Help?
Cade Metz – NY Times
In a May memo to President Trump, Defense Secretary Jim Mattis implored him to create a national strategy for artificial intelligence.
/jlne.ws/2PBMmSG

The Prosecutors Who Have Declared War on the President; The Office of the U.S. Attorney for the Southern District of New York isn’t done digging into the Trump Organization.
Noah Feldman – Bloomberg
In the span of one week, we learned that the Office of the U.S. Attorney for the Southern District of New York had both secured a guilty plea from Trump Organization lawyer Michael Cohen and offered an immunity deal to the company’s chief financial officer, Allen Weisselberg. President Donald Trump should be worried. Once the Southern District gets its jaws onto a string of crimes, it doesn’t let go.
/jlne.ws/2PEX8rt

The Full-Spectrum Corruption of Donald Trump; Everyone and everything he touches rots.
Peter Wehner – NY Times
There’s never been any confusion about the character defects of Donald Trump. The question has always been just how far he would go and whether other individuals and institutions would stand up to him or become complicit in his corruption.
/jlne.ws/2PFVjdC

Is capitalism losing or socialism gaining? Yes.
Greg Krieg – CNN
Sen. Bernie Sanders calls himself a democratic socialist. Sen. Elizabeth Warren says she is a capitalist to her “bones.” And yet, the pair are widely viewed to be competing for the same territory in a potential 2020 Democratic presidential primary. Not that anyone should be surprised. Both Sanders and Warren made their names railing at the excesses and failures of an increasing unequal economy — one that voters across the ideological spectrum routinely describe as unfair or, in many cases, “rigged.”
/jlne.ws/2PHUC3s

Regulation

ASIC requires Morgan Stanley Wealth Management Australia to amend false claim of independence
Eurex
ASIC has required Morgan Stanley Wealth Management Australia Pty Ltd (MSWMA) to amend a false claim of independence that could mislead consumers and investors.
/jlne.ws/2PI6JxI

Revised FINRA Transaction Fee Transfer Agreement
FINRA
FINRA has revised the FINRA Transaction Fee Transfer Agreement to clarify the intended scope of paragraph 2b. The FINRA Transaction Fee Transfer Agreement applies to FINRA members and their respective clearing firms that choose to utilize FINRA Trade Reporting Facilities – the Alternative Display Facility (ADF), the FINRA/Nasdaq TRF, the FINRA/NYSE TRF, or the OTC Reporting Facility (ORF) – to transfer a transaction fee on trades between FINRA members reported to one of the Facilities, pursuant to applicable FINRA rules. Firms that currently have an executed Agreement on file with FINRA do not need to execute a new Agreement. Firms executing a new Agreement after the date of this Notice should use the revised version, which is now online at FINRA.org.
/jlne.ws/2PIe5kW

Sebi plans ‘on tap’ bond market
Reena Zachariah, Sugata Ghosh – ET
‘Bond tap’, which gives corporates the flexibility to time the market, prune cost, and dramatically cut down on paperwork for raising money, will soon be a reality in India. Capital market regulator Sebi is preparing the ground to allow ‘on tap public issue of bonds’ ó a mechanism that will let corporates use stock exchanges to sell bonds directly to investors, including retail investors, any time and as many times during a financial year, after filing a single prospectus.
/jlne.ws/2PEGgRz

Sebi planning to deploy technology to beef up monitoring activities; Sebi has invited expression of interests (EoIs) from companies for enhancement of analytical capabilities and setting up of private cloud to provide infrastructure, storage and computing capacity
Press Trust of India
Eyeing a major technological leap in its surveillance and investigation functions, markets watchdog Sebi plans to build a private data storage cloud, automate its inspection of brokers and make greater use of data analytics.
/jlne.ws/2weO5FI

Musk’s U-turn on Tesla deal could intensify his legal, regulatory woes
Michelle Price – Reuters
Tesla Inc (TSLA.O) Chief Executive Elon Musk’s decision to abruptly abandon a plan to take his electric carmaker private will not resolve his mounting regulatory and legal woes, and may even make them worse, some securities lawyers said.
/goo.gl/t3EcXW

Investing and Trading

Public Bravado, Private Doubts: Inside the Unraveling of Elon Musk’s Tesla Buyout; As his team hustled to put form to his idea, lining up investors willing to put up tens of billions of dollars, Mr. Musk was having second thoughts
Liz Hoffman and Tim Higgins – WSJ
The Tesla Inc. board convened Thursday at the company’s factory in Fremont, Calif., in a conference room where Elon Musk often spent the night. His sleeping bag was still on the floor.
/jlne.ws/2wgt4dJ

Ferraris a Better Bet Than Stocks in Age of Market Exuberance
Adam Haigh – Bloomberg
A day after U.S. stocks smashed out yet another record, a vintage Ferrari went under the hammer for the highest price ever — the latest sign that while investors may grumble about frothy financial asset valuations, they’re still prepared to pay up.
/jlne.ws/2PFYiCQ

Noble Group Shareholders Back Survival Plan as Brough to Bow Out
Krystal Chia – Bloomberg
Chairman says commodity trader had ‘near-death’ moment in 2017; Debt-for-equity proposal follows default, billions in losses
Noble Group Ltd.’s shareholders have endured years of torment as a default, billions in losses, and allegations of improper accounting pushed the commodity trader to the brink. After a 90-minute meeting Monday, they backed the company’s bid to salvage itself.
/jlne.ws/2wiSeZ5

****Reuters here

‘I Was Cheated’: Tales From the Collapse of a Commodity Giant
Krystal Chia and Andrea Tan – Bloomberg
Noble Group retail investors tally losses before vote on deal; Plan was approved by 99.96 percent of votes cast at SGM Monday
Francis Tay feels cheated. The former Singapore civil servant said he lost almost S$50,000 ($36,600) in the implosion of Noble Group Ltd., the commodity trading giant. He also said shareholders like him have been let down by regulators whose job it is to protect them from the sort of crisis that’s brought the company to the brink.
/jlne.ws/2PEx2EV

U.S. stock fund investors show no fear of King Dollar
Trevor Hunnicutt – Reuters
U.S. fund investors are in no rush to shore up defenses against the strong dollar. The greenback’s 6 percent leap over the past six months has flummoxed markets from Turkey to Argentina, whose governments have to repay debt in dollars.
/goo.gl/rXrqDL

Opinion: How to invest in a stock market that’s due for a hard landing
Vitaliy Katsenelson – MarketWatch
I simply don’t trust the fundamentals of the global economy right now. The system is built on quicksand.
/jlne.ws/2wgOyH6

At Fed’s Jackson Hole Retreat, Central Bankers Eye New Economic Risks; Without mentioning Trump by name, global economic leaders make clear they are concerned about his trade policy
Nick Timiraos and Paul Kiernan – WSJ
Central bankers around the world have finally reached the point, after many years, when a period of strong economic growth allows them to unwind their postcrisis easy money policies.
/jlne.ws/2why5Tc

Franchise Quality Score: A Metric for Intangibles
Gautam Dhingra and Christopher J. Olson – CFA Institute Blog
The high valuations of Amazon, Facebook, Alphabet, Netflix, and other tech stocks can be puzzling ó especially for value investors. The prices of these stocks have skyrocketed despite valuations that are already exceptionally high based on traditional metrics like price-to-earnings (P/E) and price-to-book (P/B) ratios.
/goo.gl/5ChzYh

Direct Indexing: Passive investment with potential tax benefits
Rolf Agather – FTSE Russell Blog
In the United States – and many other countries – investors are required to pay capital gains taxes on profits generated from their investments. Since US regulations require mutual funds and ETFs to pass any capital gains to shareholders annually, tax efficiency can be limited for these index vehicles. Separately managed accounts (SMAs) that fully replicate an indexóthus providing a solution that can offer a tax benefitóhave generally only been available for large investors. An innovative solution called Direct Indexing enables indexes to be passively tracked even in accounts with small balances.
/goo.gl/9Pm1BP

Institutions

Vanguard nips at BlackRock’s heels for fund crown; Money manager attracted $112bn of net new flows in first half while bigger rival brought in $77bn
Owen Walker, Asset Management Correspondent – FT
Vanguard is fast catching up on BlackRock as the world’s biggest money manager as the two titans of the global asset management industry, who collectively manage $11.5tn, battle for even greater market share.
/jlne.ws/2wiSreF

Deutsche-Commerzbank deal seen as a question of when, not if; Bankers point out that any merger would have to be radical to be successful
Olaf Storbeck in Frankfurt – FT
To many observers in Frankfurt a tie-up between Deutsche Bank and Commerzbank is not seen as a question of if, but when.
/jlne.ws/2wpc3OD

The Big Hedge-Fund Strategy That Isn’t Working; Despite terrible returns, so-called trend-following funds have attracted $300 billion in assets
Laurence Fletcher – WSJ
Following trends in financial markets was once one of the most profitable investment strategies around. Now the approach is being battered as cheap replica funds crowd into the space.
/jlne.ws/2whdA95

Top oil hedge funds suffer big losses after July price plunge: sources
Devika Krishna Kumar, Maiya Keidan – Reuters
Two of the world’s largest energy-focused hedge funds, Andurand Capital and BBL Commodities, suffered double-digit percentage losses in July as oil prices plunged by the most in two years, sources familiar with the matter told Reuters on Friday.
/jlne.ws/2PH9wY0

New Mizuho chief pledges to save Japan from SME succession crisis; Tatsufumi Sakai foresees M&A boom as demographic fall threatens corporate know-how
Leo Lewis in Tokyo – FT
Mizuho Financial Group has a “big mission” to protect decades of accumulated Japanese technological know-how from demographic decline and a national business succession crisis, said the bank’s new chief executive.
/jlne.ws/2wiv5WR

Rising number of bankers switch to careers in private equity; Study finds uptick in job moves despite marginally lower average pay
Javier Espinoza, Private Capital Correspondent- FT
A rising number of former bankers are joining the ranks of private equity groups in Europe despite sometimes taking a pay cut to do so, according to new research.
/jlne.ws/2wgPJ9u

Regions

Saudi Aramco loses its ‘in perpetuity’ oil and gas rights; Kingdom’s switch to a 40-year contract reveals power struggle with state energy group
Anjli Raval – FT
Saudi Arabia has cut the length of time that its state energy company has exclusive rights to the kingdom’s vast oil and gasfields, raising questions about Saudi Aramco’s long-term production and revealing a power struggle between the company and the government.
/jlne.ws/2whGTZn

Has the emerging markets crisis cycle ended?
JosÈ Antonio Ocampo – Financial News London
Judging by the limited contagion from the Turkish crisis, it seems that longstanding patterns in emerging markets may no longer apply
/goo.gl/b2PpZZ

Emerging Vulnerabilities in Emerging Economies
Michael Spence – Project Syndicate
For many emerging economies, it is imperative to pursue a rebalancing of growth patterns, with a more active approach to managing debt and capital flows and their effects on asset prices, exchange rates, and growth. Otherwise, the dangers of unsustainable growth patterns will bring expansion to an abrupt halt.
/goo.gl/swmxVc

Why World Worries About Russia’s Natural Gas Pipeline
Elena Mazneva, Anna Shiryaeskaya – Bloomberg
A planned new natural-gas pipeline into Europe from Russia is shaking up geopolitics. Nord Stream 2, as it’s called, worries leaders in Eastern Europe, has stirred the ire of U.S. President Donald Trump and has put German Chancellor Angela Merkel on the hot seat.
/jlne.ws/2whnVC2

Brexit

More Brexit-influenced austerity will add to public debt, and hurt British exporters. It’s time the government understood that
Ann Pettifor – The Independent
On holiday in the safe Tory seat of Richmondshire in the Yorkshire Dales this week, we watched as a dedicated sheep farmer demonstrated the skills and athleticism of his working dogs. Five generations of Richard Fawcett’s family have, since 1918, farmed The Croft at Hardraw, Wensleydale. Today, he explained to the watching crowd, the family enterprise was under threat from the possible removal of subsidy.
/jlne.ws/2PDMEsa

EU contracts safe after Brexit, say most insurers; Groups say they will be able to pay claims regardless of the outcome of talks
Oliver Ralph – FT
Most large UK insurers have executed contingency plans to ensure cross-border contracts are honoured if there is a no-deal Brexit.
/jlne.ws/2whrdFh

The post Are Amazon Effects Reshaping the Economy?; Hedge funds seek data fees review appeared first on John Lothian News (JLN).

First Read

Hits & Takes
JLN Staff

The most recent episode of “The Spread” – JLN’s options news recap – can be found here. ~SD

If you are not a fan of “The Spread” and Spencer Doar, you should be. It is fun to see his creative and whacky side come out while sharing the news in the world of options trading. And by the way, we are looking for a firm or firms willing to sponsor this video series.~JJL

In Wells Fargo’s most recent quarterly SEC filing, there were 6,250 words dedicated to legal liabilities and “efforts to rebuild trust.” That stat comes via a Huff Po article from the weekend that skewered the bank – Why Does Wells Fargo Still Exist?. In other not-so-good Wells Fargo news, CNN reported that Bloomberg reassigned a reporter who covered Wells Fargo after the bank’s CEO complained about the reporter’s conduct.~SD

Rumi Morales will host a presentation and discussion in Chicago for blockchain + AI enthusiasts on September 5th from 6:00-8:30pm with the CEO and CTO of Fetch.AI. An Outlier Ventures portfolio company, Fetch has built what it calls “the world’s first truly smart ledger,” allowing data to act autonomously.~JJL

Chicago Blockchain Project is now an approved provider of Continuing Legal Education credit for the State of IL.~Via LinkedIn.

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MWE World of Opportunity – How to Spot Financial Fraud
JohnLothianNews.com
“As an auditor, if I start to look at recurring transactions and I ask the question, ‘What’s the economic purpose for this transaction?’ and I don’t get the right answer, I keep asking that question.”

Before Barings Bank went belly-up, John Hague, recently retired from RSM, recalls giving a presentation to back office personnel. Some Barings people were there – apparently they didn’t pay attention to Hague’s talk.

In this video from MarketsWiki Education’s Chicago event, Hague reviews some well known frauds, the characteristics they share and some of the best market movies to watch.

Watch the video here »

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Is It Only Chicagoans That Think Chicago Is Great?
Jessica Darmoni – The Title Connection
As a hard core Chicagoan, I could never have asked the question that panelist Donnie Benjamin from ConsenSys asked on my panel at the Voice of Blockchain conference looking at why Chicago is positioned to be the Blockchain capital of the world.
“What is preventing Chicago from being a global hub,” said Benjamin, who moved to Chicago from New York to open the ConsenSys office here. “Everyone in Chicago sees it but it’s not known nationally or internationally.”
/goo.gl/qKprHo

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Trading Technologies Extends TT Platform into Brazil via the B3 Data Center
Trading Technologies
Trading Technologies International, Inc. (TT) today announced that execution and client connectivity services through the TT platform are now available in Brazil through the B3 Data Center. This move establishes regional access to TT’s worldwide network of data centers while providing colocated connectivity to B3 for unprecedented global execution of latency-sensitive strategies.
/jlne.ws/2ohnpzH

***** Sounds like TT is now playing bingo.~JJL

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Monday’s Top Three
There may be a new party coming called “The Data Fees Are Too Damn High.” Our top read story of the day on Monday was Reuters’ Hedge funds seek review of market data fees, ‘pickles’ and all about the MFA and AIMA’s petition to the SEC about fees.
By the way, Jimmy McMillan, the “Rent Is Too Damn High” guy ran for councilman last year, and is running for governor in New York this year. Second was the Wall Street Journal’s piece Goldman Cashes In on Passive-Investing Boom With Big 4 P.M. Trade about the so-called “guaranteed close.” Third was the JLN recap piece A Couple of Takes on the Voice of Blockchain Conference, where Chuck Mackie said Jimmy Song’s presentation “was a major disappointment.”

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MarketsWiki Stats
131,842,996 pages viewed; 23,259 pages; 214,725 edits
MarketsWiki Statistics

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Lead Stories

CME Group floats plan to buy out Class B shareholders, shrink board of directors
Lynne Marek – Crain’s Chicago Business
The exchange operator has proposed buying out holders of Class B shares handed out to seat-holders in 2000 as the company pursued its IPO. If OK’d, the board – one of the nation’s largest – would shrink.
/goo.gl/RiodHV

****Now seems like a good time to revisit Jeff Carter’s op-ed on B shares from 2014 – Why you should care CME plans to cut B shareholder reps on board by half

SEC urges completion of long-delayed trading database
John McCrank – Reuters
The U.S. Securities and Exchange Commission on Monday urged stock and options exchanges to work together with industry members to complete a long-overdue trading data base the regulator needs to police the market.
/jlne.ws/2BUol6J

The Dirty Banks Down Under; Australia’s finance industry came through 2008 with flying colors. Then it got cocky.
Emily Cadman – Bloomberg
After navigating the 2008 global financial crisis with barely a bump, Australian banks looked to most observers like paragons of virtue. But to Jeff Morris, a financial planner at Commonwealth Bank of Australia, the country’s biggest lender, they were anything but. From his insider’s vantage point, he saw a toxic, bonus-obsessed culture where star employees forged documents and steered unwitting customers into high-risk investments that often tanked. “I watched fleas do over innocent people,” he says.
/jlne.ws/2BQGnXk

Aegon, Transamerica in $97.6 million SEC settlement for misleading investors
Jonathan Stempel – Reuters
Four Transamerica entities will pay $97.6 million to settle U.S. Securities and Exchange Commission charges that they sold investments that were supposedly based on quantitative models but which did not work as intended, the regulator said on Monday.
/reut.rs/2oeZn8t

Markets may be signaling rising recession risk: Fed study
Ann Saphir – Reuters
A narrowing gap between short-term and long-term borrowing costs could be signaling heightened risk of a U.S. recession, researchers at the San Francisco Federal Reserve Bank said in a study published on Monday.
/reut.rs/2PK2hi7

****The study can be found here.

U.S. to Pay Farmers $4.7 Billion to Offset Trade-Conflict Losses
Jesse Newman and Heather Haddon – WSJ
The Trump administration said it would make $4.7 billion in payments to U.S. farmers to offset losses from trade battles rippling across the globe.
Agriculture Secretary Sonny Perdue said on Monday the funds constitute an initial payment to farmers hit by tariffs from major U.S. trading partners, which have left producers of commodities from soybeans to pork to apples vulnerable during a steep downturn in the agricultural economy.
/on.wsj.com/2PJ1r4T

****Reuters here

Why London Is Becoming a Global Blockchain Hub
Benjamin Yablon – Entrepreneur
As the blockchain and cryptocurrency ecosystem evolves, London is emerging as the major financial capital likeliest to become the global hub for the nascent industry. Other potential major hubs, such as the United States, should take notice or risk a brain drain as entrepreneurs move their startups to friendlier locations.
/jlne.ws/2ohlNGb

Exchanges, OTC and Clearing

Deutsche Boerse invests in blockchain start-up for securities lending; Exchange group expands partnership with HQLAx as it looks to build a blockchain-based solution for securities lending transactions.
Joe Parsons – The Trade
German exchange group Deutsche Boerse has purchased a minority stake in HQLAx, a start-up which aims to bring blockchain technology to the securities lending market.
/jlne.ws/2C3b8sq

Bursa to encourage higher public participation in derivatives trading
Tennielle Chua – The Star Online
Bursa Malaysia Derivatives Bhd (BMD), the derivatives arm of Bursa Malaysia, is going on an overdrive to generate public awareness in its derivatives to get higher public participation.
/goo.gl/qPYYTW

Our ear to the ground: Eurex sales staff in interview
Eurex Exchange
The best product development in the world is of little use if customers do not get to hear about new products and services. Clients need a contact at Eurex who listens to them and takes their interests to heart. We speak to two Eurex Sales colleagues, Simona Simon and Andreas Stadelmaier, who are both in constant touch with their clients. Simona is Senior Vice-President in Global Equity & Index Sales and Andreas Senior Vice-President in our Fixed Income EU Sales unit. In the first part of this series, we focus on client needs.
/goo.gl/6Y26ZT