First Read
Hits & Takes
By JLN Staff
The @JohnLothian Twitter account received 65,120 original impressions yesterday, which is a record for the last 28 days. My LinkedIn profile searches are up 48% for the week.~JJL
Yesterday I attended an event hosted at the Art Institute of Chicago by RBC Global Asset Management about responsible investments. The speaker and panel discussed ESG investing, which I did not know about. ESG stands for Environment, Societal and Governance. Later in the day I was able to apply what I learned during a meeting of the endowment committee of my church, of which I am an ad hoc member, since I am treasurer of my church. Funny how that worked out.~JJL
One of the panelists was Bernie Nelson of Style Research. If I wanted to know more about ESG investing, he would be the one I would ask.~JJL
Check out JLN’s video with Lanre Sarumi, CEO of the quantitative analytics software firm Riskbone and CEO of Level Trading Field, about bitcoin, below.~SD
JJ Kinahan of TD Ameritrade looks a lot better in his OIC 25th Anniversary video than I did.~JJL
I was quoted in a Reuters article about bitcoin titled “Bitcoin to start futures trading, stoking Wild West worries,” which also had a quote from Steve Grob. I also saw that the BBC claimed they interviewed me with a quote that sounded a lot like Steve Grob’s. The BBC did not interview me.~JJL
CME Group is offering a webinar on How to Get Started Trading WTI Crude Oil on Tuesday, December 19 from 11:00 a.m. – 12:00 p.m. Central time. You can register here.~SR
FinTank with Morningstar is hosting: A Discussion on BanQu’s Remarkable Journey & Templum’s Platform to Shape ICOs as Securities – Friday 12/15, 8:00 a.m. CST @ Morningstar, 22 West Washington Street, Chicago. Register.~JK
What do you think is the over-under on how many times circuit breakers will be triggered in the first month of bitcoin futures trading? According to Bloomberg, yesterday’s crazy price action would have paused CME trading twice, then stopped it for a full hour, then had multiple stops and starts toward the end of the trading day as BTC oscillated over and under a 20 percent gain. Buckle up! Obligatory YouTube link to the Ohio Players’ 1975 release, “Love Rollercoaster.”~SD
Scenes of Southern California’s ongoing wildfire look like scenes out of an apocalyptic movie. Newsweek has an article laying out local charities that need your donations.~SD
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The Future of Bitcoin (Futures) – with Lanre Sarumi
JohnLothianNews.com
With the launch of the first bitcoin futures only a couple of days away, JLN asked Lanre Sarumi, the CEO of the quantitative analytics software firm Riskbone as well as CEO of Level Trading Field, a free online financial news and analytics platform, what traders should know before taking the plunge into this very new product. Sarumi spoke about who will be trading the fledgling futures and why, the differences between the proposed contracts at Cboe, CME and Nasdaq, and some strategies traders might use to make the most of the current bitcoin mania.
Watch the video and read the rest here »
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What Does Your Cloud Data Look Like? QuantHouse Is Moving To The Cloud
Jim Kharouf – John Lothian News
The data cloud shift aims to transform how firms research, trade and evaluate their strategies
It’s all about the data.
The lifeblood of trading is simply that – data – how to get it, how to decipher it and how to trade off it. The good news for traders is that it is now more accessible, flexible, and researchable than ever, especially with the rapid evolution of cloud technologies.
jlne.ws/2AFAkkh
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How the Kremlin Tried to Pose as American News Sites on Twitter
Selina Wang – Bloomberg
Twitter has suspended dozens of accounts masquerading as U.S. news sources that had more than 500,000 followers. The Kremlin-backed Russian Internet Research Agency operated dozens of Twitter accounts masquerading as local American news sources that collectively garnered more than half-a-million followers.
/goo.gl/UqnmqU
****** Here is a reason to read JLN, your trusted and transparent source of news.~JJL
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Going local for supplies sparks new frac sand boom; Market is stretched to full capacity amid US shale oil’s drive to extend output cheaply
Gregory Meyer in New York – FT
Windblown dunes in west Texas are the latest front in the shale oil industry’s campaign to extract more barrels at less cost.
/goo.gl/iNyE9a
***** Julie Lerner of PanXchange is quoted in this article.~JJL
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A Trader’s View on Crypto
Mike Unetich, Vice President, Cryptocurrencies, Trading Technologies
I recently saw an industry article with the theme “how I would be thinking about bitcoin if I were to put my old broker hat on.” This was a very timely perspective as Cboe/CFE and CME are launching their bitcoin offerings within the next couple weeks. As the VP of Cryptocurrencies at Trading Technologies and an avid cryptocurrency participant, I’ve been thinking about the same from a trader’s perspective.
/goo.gl/65PScg
***** Article references my broker bitcoin piece, but without attribution.~JJL
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Thursday’s Top Three
Yesterday’s top read story was JLN’s piece on Kim Taylor and Maureen Downs stepping down from their respective positions in Two Powerful Futures Industry Female Leaders Step Down. Second went to the FT’s Wall Street banks push back on launch of bitcoin futures. Third went to the Wall Street Journal’s Traders Want to Know What Exchanges Earn From Market Data. Have a great weekend everybody.
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Lead Stories
Bitcoin Futures Coming From Team That Rebounded From Epic Snafu
Nick Baker – Bloomberg
Cboe tech staff came from Bats, which once botched its own IPO; Launch of bitcoin futures will be watched even more closely
Cboe Global Markets Inc. is preparing to release bitcoin futures into a bitcoin-obsessed world. Its tech staff knows how badly these things can go.
/goo.gl/4nGA6G
***** OUCH!!!~JJL
Big banks not willing to support launch of bitcoin futures; Chicago’s Cboe plans to start trading late on Sunday evening a week before CME
Philip Stafford in London – FT
A number of the largest US futures brokers will not immediately clear bitcoin trades for their clients, such as JPMorgan and Citigroup, according to people with knowledge of the banks’ plans.
/goo.gl/SCW3qB
Self-driving finance could turn into a runaway train; No one knows who’s liable if a program goes haywire, as regulators struggle to keep pace
Gillian Tett – FT
The mysteries of bitcoin are turning heads yet again this week. At the start of the year, the digital token was worth $1,000; on Thursday, it breached $16,000. This is eye-popping, particularly given that so few investors actually understand how cryptocurrencies really work.
/goo.gl/wUfDhW
The world’s biggest banks reportedly want to halt bitcoin futures launch
David Reid – CNBC
Wall Street banks have raised objections to the introduction of bitcoin futures trading, highlighting fears that the financial system can’t cope with the cryptocurrency’s volatile price swings.
/goo.gl/y83n8Q
Why you might want to move your money to a socially responsible bank
Spencer Tierney – MarketWatch
If you buy local to support neighborhood businesses, avoid shopping at stores known for paying their workers poorly or protest projects criticized for being environmentally harmful, you might want to make sure your bank accounts are also supporting your values.
/goo.gl/ZkwH7h
UK reaches historic Brexit divorce deal
Alex Barker and Jim Brunsden in Brussels and Arthur Beesley in Dublin – FT
Britain has reached a historic deal on its EU exit terms, enshrining special rights for 4m citizens and paying EUR40bn to EUR60bn in a hard-fought Brexit divorce settlement that clears the way for trade talks next year.
/goo.gl/ggJmmS
Inside Big Banks, Bitcoin Futures Are Riling Trading Executives
Dakin Campbell, Sonali Basak and Laura J Keller – Bloomberg
Some say their desks are eager to wade into the new market; But many confidentially list concerns and unresolved questions
Bitcoin is coming to Wall Street on Sunday, and some executives at the world’s biggest banks aren’t sleeping well.
/goo.gl/Ec1rHk
Goldman Sachs will clear bitcoin futures for some of its clients
Akin Oyedele – Business Insider
Goldman Sachs will clear bitcoin futures trading for some of its clients, according to a person familiar with the plans.
/goo.gl/S83T6K
The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market; A few massive investors can rock it with a shrug.
Olga Kharif – Bloomberg
On Nov. 12, someone moved almost 25,000 bitcoins, worth about $159 million at the time, to an online exchange. The news soon rippled through online forums, with bitcoin traders arguing about whether it meant the owner was about to sell the digital currency.
/goo.gl/48tVCN
CFTC Talks about Bitcoin futures contracts
Wolters Kluwer
In a recent CFTC Talks podcast, a number of Commission leaders engaged in a lively roundtable discussion to explore a wide arrange of issues associated with the much talked about Bitcoin futures contracts. The new trading products are scheduled to be launched by year-end at the Chicago Mercantile Exchange, Inc. (CME) and the CBOE Futures Exchange (CFE).
/goo.gl/AjtKdY
ECB plans major market infrastructure overhaul; The ECB plans to create a T2S-style collateral management system to harmonise processes for EU central banks.
Joe Parsons – The Trade
The European Central Bank (ECB) has announced two major changes to Europe’s market infrastructure including the introduction of a harmonised collateral operations platform.
/goo.gl/fXJSs5
Bitcoin’s Wildest Rise Yet: 40% in 40 Hours; Virtual currency’s gains this year have accelerated recently, bringing its year-to-date rise to more than 1,500%
Paul Vigna and Steven Russolillo – WSJ
Bitcoin mania reached new highs Thursday as the price of the digital currency jumped about 40% in 40 hours, smashing through five separate $1,000-barriers and surging past $16,000.
/goo.gl/bZociT
Glass Lewis backs LSE chairman against activist investor
Philip Stafford – FT
A second influential shareholder advisory group has urged investors in the London Stock Exchange Group to back chairman Donald Brydon against the activist investor trying to unseat him.
/goo.gl/rrLHt3
Could fintech be opening the door to more financial crime?
CFA Institute Contributor – via City AM
Fintech startups aim to disrupt current practices and to do it fast. The emerging business model requires product managers find a buyer need, put out a minimum viable product, and iterate change in response to customer use.
/goo.gl/oT1VdX
****SD: A whole new genre of heist films around the corner?
Deutsche Bank says more regulation of cryptocurrencies needed
Reuters Staff
More regulation and some degree of security are needed to make cryptocurrencies such as bitcoin a serious new asset class for investors, Deutsche Bank Chief Investment Officer Christian Nolting said.
/goo.gl/7T1wcQ
As the bitcoin boom accelerates, so does scrutiny from regulators
Seema Mody – CNBC
The rapid surge in bitcoin has prompted Washington to take a closer look at digital currencies and the rise of initial coin offerings ó a method used by internet entities to raise capital in exchange for a new cryptocurrency.
/goo.gl/zYMbfT
Tomorrow’s financial crisis today
Matthew Yglesias – Vox.com
Most Americans probably don’t care much about yesterday’s move to recognize Jerusalem as the capital of Israel, but the decision-making process that went into it is crucial to understand.
/goo.gl/AtoUU6
Flash Crashes More Common Than Thought in World’s Biggest Market
Lananh Nguyen – Bloomberg
Flash crashes in the pound and Swiss franc have roiled the currency market in the last couple of years — but there have been dozens of others that have gone under the radar.
/goo.gl/thPhUF
Stuttgart bourse buys BX Swiss exchange
Reuters Staff
German stock exchange operator Boerse Stuttgart GmbH is buying a majority stake in Swiss peer BX Swiss as part of a strategic partnership.
/goo.gl/5mRnYX
Exchanges, OTC and Clearing
Bitcoin Wildness Highlights Worries as Futures Trading Nears
Nick Baker, Annie Massa, Brian Louis and Camila Russo – Bloomberg
Price zooms up to almost $20,000 on Coinbase, then crashes; Big traders warned that futures have been rushed to market
Bitcoin’s poised to go legit. Is it really ready? Three days before Cboe Global Markets Inc., one of the world’s biggest regulated exchanges, debuts futures on the cryptocurrency, it had one of its wildest sessions ever. On Coinbase Inc.’s GDAX exchange, prices zoomed up to almost $20,000 from $16,000 in only about 90 minutes — then crashed back down. The largest digital currency is still up more than 16-fold this year, trading at 16,126.32 as of 11:52 a.m. in Hong Kong, according to Bloomberg composite pricing.
/goo.gl/EUemfX
Euronext announces quarterly review results for the AEX, AMX, AScX
Euronext
Euronext today announced the results of the quarterly review of the AEX, AMX and AScX indices. The changes following the review will be effective from Monday 18 December 2017.
/goo.gl/yutGXT
Euronext announces quarterly review results of the PSI 20
Euronext
Euronext today announced the results of the quarterly review for the PSI 20. The changes due to the review will be effective from Monday 18 December, 2017.
/goo.gl/BsVvkL
Euronext announces quarterly review results of the BEL 20, BEL Mid and BEL Small
Euronext
Euronext today announced the results of the quarterly review of the BEL 20Æ, BEL MidÆ and BEL SmallÆ. The revised composition will be effective from Monday 18 December 2017.
/goo.gl/Kh3JUJ
Trading hours at Eurex Exchange on 22 December and 29 December 2017
Eurex
This year, Friday, 29 December 2017 will be the last exchange trading day at Eurex Exchange. This is also the last day of the year on which settlement can be done. On XetraÆ and at the Vienna Stock Exchange there will be shortened trading hours on the last trading day of the year 2017.
/goo.gl/e6pR78
Intercontinental Exchange Recognized for Excellence in Clearing by Risk and FOW
ICE
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that two of its clearing houses received awards from Risk and FOW for excellence in clearing.
/goo.gl/NH6Mxm
Fintech
Blockchain’s Real Cool Cats
By Tim Culpan, David Fickling – Bloomberg
ASX Ltd. had a choice. The operator of Australia’s main stock exchange could develop a new version of Chess, its faithful but aging clearing and settlements system introduced in 1994, or it could build for the future.
/goo.gl/sH1uMa
No, Bitcoin Won’t Boil the Oceans; Concerns about the cryptocurrency’s energy use are overblown.
By Elaine Ou – Bloomberg
While much of the world marvels at bitcoin’s meteoric rise, another part is focused on an environmental byproduct: The sheer amount of electricity that crypto-currencies use. By some estimates, bitcoin’s consumption alone exceeds — or will exceed — that of Ireland, Denmark, Japan or even the entire world.
/goo.gl/LBCNRN
Now Tech Moguls Have to Work to Appear Not-Evil; Silicon Valley is feeling the backlash against its wealth and power.
By Shira Ovide – Bloomberg
Something weird is happening in the technology industry: Giant companies are suddenly worrying about what people think of them. It’s not that Apple Inc. or Facebook Inc. didn’t give a fig before. It’s just that they’ve come to realize that people doubt their sincerity when it comes to industry slogans like “Don’t be evil.”
/goo.gl/tcKkv4
Here’s a big bitcoin problem I just discovered
Rick Newman – Yahoo Finance
I bought a fraction of a bitcoin in October, and my little investment has appreciated about 150% since then. But if I want to cash out, I might have a problem ó because apparently it’s not so easy to sell.
/goo.gl/re8AUC
ARTIFICIAL INTELLIGENCE SEEKS AN ETHICAL CONSCIENCE
Wired.com
LEADING ARTIFICIAL-INTELLIGENCE RESEARCHERS gathered this week for the prestigious Neural Information Processing Systems conference have a new topic on their agenda. Alongside the usual cutting-edge research, panel discussions, and socializing: concern about AI’s power.
/goo.gl/wtfcqJ
Satire: It’s Time to Admit No One Knows What the Blockchain Is
By Ashwin Rodrigues – Fortune
Certain innovations, seen as superfluous at the time of their inception, are no-brainers today. The Internet, for example. Penicillin, for another. Could blockchainóthe technology DJ Khaled and others say is a major key to fundamentally changing capital marketsóprove to be just as transformative?
/goo.gl/DymvrQ
Coinbase was number one on Apple’s app store after bitcoin’s wild surge; Coinbase was ranked the most popular app on the Apple Store on Thursday, according to data by market statistics firm App Annie; Its service was so overcrowded that its website went down for roughly an hour; Coinbase said the site has been experiencing “record high traffic.”
Ryan Browne – CNBC
Bitcoin exchange Coinbase briefly flew to the top spot on Apple’s U.S. app store after the cryptocurrency skyrocketed in price Thursday.
/goo.gl/WztVHa
AI is now so complex its creators can’t trust why it makes decisions
Dave Gershgorn – Quart
Artificial intelligence is seeping into every nook and cranny of modern life. AI might tag your friends in photos on Facebook or choose what you see on Instagram, but materials scientists and NASA researchers are also beginning to use the technology for scientific discovery and space exploration.
/goo.gl/VuNNqk
Politics
Mueller’s Investigation Just Got Some Insurance; The Flynn plea makes it difficult for Trump to can the special counsel without inviting charges of a cover-up and sparking a constitutional crisis.
By Greg Farrell , Tom Schoenberg , and Neil Weinberg – Bloomberg
The Dec. 1 plea deal struck with President Trump’s former national security adviser, Michael Flynn, marked a big step forward in Robert Mueller’s Russia investigation. It may also have provided some protection for Mueller against being fired by the presidentóand helped ensure that his probe will continue, even if one day he’s not leading it.
/goo.gl/FSnJqG
Trump team eyes bitcoin, blockchain ascent
By Blake Burman, Jennifer Schonberger – Fox Business
The list of those delving into blockchain technology seems to be expanding by the day, including investors, technology shops, banks and curious minds executing simple Google searches.
/goo.gl/23GdLh
Exclusive: Wells Fargo sanctions are on ice under Trump official – sources
Patrick Rucker, Pete Schroeder – Reuters
The new acting head of the U.S. consumer finance watchdog is reviewing whether Wells Fargo & Co (WFC.N) should pay tens of millions of dollars over alleged mortgage lending abuse, according to three sources familiar with the dispute.
/goo.gl/fGiasJ
Ethanol Hostages on Capitol Hill; Energy policy favoritism imperils Trump’s nomineesóagain.
By The Editorial Board – WSJ
Trump Administration’s nominees should enjoy an easy path to Senate confirmation, given GOP control of Congress and the White House. But the federal government’s warped ethanol policy is pitting corn-state Republicans against refinery-state Republicans, and the conflict has devolved into a hostage crisis involving several Trump nominees.
/goo.gl/xmCmxe
Neo-Nazis are also profiting from bitcoin’s massive boom
Shona Ghosh – Business Insider
Cryptocurrency bitcoin has shot up massively in value over the last few days, currently sitting at $15,338; That’s profited anyone who holds the cyrptocurrency ó including neo-Nazis forced to accept anonymous donations in bitcoin after being banned from legitimate fundraising services; Pro-Nazi publisher Counter Currents and neo-Nazi internet troll Andrew “weev” Auernheimer have raised thousands of dollars in bitcoin; The news will do little to counter bitcoin’s reputation as a currency for criminals and other undesirable players.
The massive boom in the value of bitcoin has ended up profiting neo-Nazis who have taken thousands of dollars in donations, according to an investigation by Mic.
/goo.gl/BAeHM7
Regulation
New Basel rules on capital hit European banks; Draghi hails measure but provisions may not take effect until two decades after crisis
Caroline Binham and Martin Arnold in London and Claire Jones in Frankfurt – FT
Top international central bankers and regulators have struck a long-awaited deal on bank capital rules that Mario Draghi hailed as the final step of post-financial crisis reforms and which resolves a transatlantic rift on the treatment of the industry.
/goo.gl/yB9tP9
Does Deregulation Move Markets? Be Skeptical; To understand how a rollback of regulations might affect stock prices, listen to John Maynard Keynes.
By Cass R. Sunstein – Bloomberg
From the very start of his presidency, Donald Trump has made it a high priority to reduce the level of federal regulation. And in 2017, the stock market has boomed. Many business leaders believe that this is hardly a coincidence, and that Trump’s deregulatory efforts have fueled the boom. Are they right?
/goo.gl/5oPr4D
Broker Charged With Defrauding Investors
SEC
The Securities and Exchange Commission charged a registered representative in Pennsylvania with operating a long-running offering and investment advisory fraud.
/goo.gl/xJwMJL
Daniel Michael Named Chief of Enforcement Division’s Complex Financial Instruments Unit
SEC
The Securities and Exchange Commission today announced that Daniel Michael has been named chief of the Enforcement Division’s Complex Financial Instruments Unit.
/goo.gl/84Hxqe
U.S. Recovers Millions in Laundered Funds from Guernsey
By Samuel Rubenfeld – WSJ
The U.S. recovered more than $14 million linked to two criminal cases in which the money was laundered via Guernsey, the U.K. dependency, in a first-time sharing of forfeited assets by officials there, prosecutors said.
/goo.gl/51y3BP
Fed Plans to Disclose More About Big-Bank Stress Tests; Proposal calls for publishing how loan portfolios fare under Federal Reserve’s statistical models
By Ryan Tracy – WSJ
The Federal Reserve on Thursday proposed disclosing more about its big-bank stress tests, in response to criticism from bankers who have said the exams’ results are hard to understand.
/goo.gl/8dMYqP
Global banking regulator sends a warning to bitcoin investors; Stefan Ingves, chairman of global regulators at the Basel Committee and governor of Sweden’s Riksbank, said investing in bitcoin was a “dangerous” prospect; Bitcoin was trading at around $16,029 on Friday morning, according to industry site CoinDesk, after wild price swings in recent days; “If you look at what has happened in the past when it comes to reaching those type of heights, being it tulip bulbs or a bunch of other things over the centuries, the odds are against those who actually think that this is going to be the future,” Ingves said
Sam Meredith, Annette Weisbach – CNBC
Bitcoin investors could learn a valuable lesson from the Dutch tulip bulb mania of the 1630s, according to a global banking regulator.
/goo.gl/NwdZJ6
ASIC cancels AFS licence of Michael James Haley
ASIC
The Australian Securities and Investments Commission (ASIC) has cancelled the Australian Financial Services (AFS) licence of Michael James Haley after finding he has ceased to carry on a financial services business.
/goo.gl/najdbN
ASIC calls on preparers to focus on financial report quality and new requirements
ASIC
ASIC has called on companies to focus on giving information for users of financial reports that is useful and meaningful, and to address the impact of major new accounting requirements.
/goo.gl/3MZQPH
Update on MiFID II registers from 3 January 2018
ESMA
The European Securities and Market Authority (ESMA) will provide updated Registers information in line with requirements under MIFIR/MiFID II. The launch, on 3 January 2018, will update existing registers under MiFID I and also provide for new registers under MiFID II/MiFIR. ESMA compiles the registers based on data provided by the National Competent Authorities of the Member States of the European Economic Area (EEA) on and from the 3 January 2018.
/goo.gl/VgqnmX
Bonds in a Bull Market? 7 Tips Before You Invest
PETE CHANDLER – FINRA
In the midst of a bullish stock market, it can be hard to hear that calm voice of investing reason telling us that asset allocation is an important aspect of prudent, long-term investing.
/goo.gl/6ZeL44
Podcast: CFTC Talks EP021: FERC Chairman Neil Chatterjee
CFTC
This week on CFTC Talks, we bring on FERC Chairman Neil Chatterjee. We talk energy regulation, electricity grid,…
/goo.gl/ip7uZe
Investing and Trading
Bitcoin is about to join the big leagues on Wall Street, but some fear it is far from ready
Patti Domm – CNBC
As U.S. exchanges get set to offer bitcoin futures, some major global financial institutions feel the rollout is happening too fast, and some retail brokers say they will look hard at the new market before offering related products to customers without steep restrictions.
/goo.gl/cGcsyX
Investors pour $1.5bn into financial sector funds; Banks are big winners from a sector rotation triggered by hopes of lighter regulation
Nicole Bullock and Eric Platt in New York – FT
Investors poured $1.5bn into funds that buy financial stocks in the latest week, extending a rotation into the sector on optimism about the prospects of lighter regulation and less tax.
/goo.gl/tbHcDi
A Venture Capitalist Talks About Her Best and Worst Investments; Cyan Banister of Founders Fund offers the lessons she has learned from both winning and losing
By Chris Kornelis – WSJ
After Cisco Systems Inc. bought IronPort in 2007, Cyan Banister, an early employee of the acquired company, found herself with money from the acquisition that she didn’t know what to do with. She considered putting it in the stock market or in land, but settled on startups. The first check she wrote was to SpaceX.
/goo.gl/5f3Tun
Banks Emerge Winners From Final Post-Crisis Capital Rules
By Boris Groendahl , Nicholas Comfort , Silla Brush , and Edward Robinson – Bloomberg
Basel III agreement completes post-crisis regulatory framework; Draghi says ‘difficult’ implementation of rules will now begin
Banks emerged relatively unscathed from global regulators’ final batch of post-crisis capital rules, with few lenders needing to raise major new funds.
/goo.gl/XGbmym
World’s No. 1 Miner Sees Bigger Role for Carbon-Capture Systems
Bloomberg News
BHP sees possible pilot projects with China steel companies; Investments in such systems stalled last year at $184 billion
BHP Billiton Ltd., the world’s biggest mining company, said wider use of systems that trap carbon emissions will be needed to meet international climate goals, even as investments in the technology stall.
/goo.gl/HsiYGK
ETF Investors Are Ditching Corporate Credit for Treasuries
By Carolina Wilson and Dani Burger – Bloomberg
Almost $1.4 billion yanked from funds holding corporate debt; Ultra-short Treasury bond ETF sees record shares outstanding
Investors in exchange-traded funds are done with corporate bonds.
/goo.gl/vjDhz6
Death Rattle or Just More Boom? Europe Embraces Risky Credit
By Samuel Potter – Bloomberg
Burger King France sells PIK notes synonymous with market top; Spreads have widened as caution seeps into global markets
After another bout of caution rippled through global markets this week, a flurry of high-yield deals can be taken one of two ways. It’s either a last-minute dash for cash before the cycle peaks or proof of market resilience.
/goo.gl/6NXAn9
Forget missing out on bitcoin mania, and be glad you didn’t short it
By Anora M. Gaudiano – MarketWatch
What would be worse than missing out on the outrageous cryptocurrency rally that you dismissed as the next tulip mania? Shorting bitcoin.
/goo.gl/ZdZaxd
The murky relationship between the bitcoin price and “tether” tokens is raising suspicions
Joon Ian Wong, John Detrixhe – Quartz
As the bitcoin price has surged, so has the supply of a digital token called tether. Tethers are tokens backed by US dollar deposits, with each tether always worth one dollar. This allows cryptocurrency traders to cash in and out of bitcoin quickly, using tethers to transfer proceeds to other exchanges or digital wallets while avoiding the lengthy process of converting the sums in and out of fiat currency.
/goo.gl/c8e9ow
So You Want to Trade Bitcoin Futures…
Crystal Kim – Barron’s
The price of bitcoin just keeps climbing, hitting above $15,500 so far Thursday, according to Coindesk.com. Bitcoin Investment Trust (GBTC) soared 8% to $1,800 so far today, trading at a 70% premium to its net asset value.
/goo.gl/Z2dDBD
When Even Value Investors Can’t Find Any
By Shuli Ren – Bloomberg
Are disciples of Benjamin Graham throwing in the towel in Asia? According to Ronald Chan, founder and chief investment officer of Chartwell Capital Ltd., value investors have become powerless in the face of a tidal wave of liquidity. Since January, mutual funds and ETFs have poured $116 billion into Asian equities, with much of that flowing to blue-chips. Receiving particular attention have been the so-called dragon heads, stocks investors believe are likely to benefit from a broad-based economic recovery. Small and medium caps are being left behind.
/goo.gl/nAxFDx
Dogged $4 Billion Investor Is Sticking to Shale
By Sharon Cho and Serene Cheong – Bloomberg
Shale producers have potential for bigger growth: Reynolds; Van Eck fund’s top picks include Parsley, Newfield, Concho
Shawn Reynolds is sticking to shale, with the $4 billion fund manager unshaken in his resolve that the U.S. industry’s stocks are due for a rebound after a lackluster 2017.
/goo.gl/YMjW9L
Bill Gross Says Bitcoin Limits Make It an Unlikely Currency Alternative
By John Gittelsohn , Scarlet Fu , and Julia Chatterley – Bloomberg
The limited supply of bitcoin may drive up its value for now, but also makes it an unlikely substitute for currencies or gold in times of economic distress, according to Bill Gross, the billionaire bond manager with Janus Henderson Group Plc.
/goo.gl/aYVDGZ
Cobalt miners play a strong hand in price setting; Carmakers struggling to lock down supplies of metals needed for batteries
Henry Sanderson – FT
Robert Friedland calls it the “revenge of the miners”. As demand increases for battery materials, producers will find themselves in the driving seat as carmakers scramble to roll out their electric vehicle fleets, according to the billionaire investor.
/goo.gl/Qq8vDH
Bitcoin has gone beyond the absurdity of the 17th-century tulip bulb mania: Dennis Gartman; Bitcoin’s rapid rise over the past few days is “utter and complete nonsense,” Dennis Gartman said; He called it a “classic bubble.”; However, the addition of futures contracts should help moderate the market over the long term, said Gartman.
Michelle Fox – CNBC
Bitcoin is in a “classic bubble” and has even gone beyond the “absurdity” of Holland’s tulip bulb mania in the 1630s, widely followed investor Dennis Gartman told CNBC on Thursday.
/goo.gl/W9FTWs
Institutions
Citigroup’s $20 Billion Write-Down Would Be Just the Ticket
By ANTONY CURRIE – NY Times
A $20 billion accounting loss can be a good thing, when the company in question is Citigroup. The lender’s woes during the financial crisis a decade ago helped make “write-down” a household word. Now the $200 billion colossus may take another whopping great hit. But this time the potential loss, sparked by planned tax cuts, is actually pretty helpful.
/goo.gl/56M86d
Morgan Stanley fires Harold Ford Jr for alleged misconduct; Former Democratic congressman denies allegations
Ben McLannahan in New York – FT
Morgan Stanley has fired one of its managing directors for alleged misconduct after a former business contact complained he subjected her to harassment, intimidation and physical assault.
/goo.gl/7ptcNs
RBS CEO Sees Diminishing Chance of DOJ Settlement This Year
By Manus Cranny and Stefania Spezzati – Bloomberg
McEwan says bank is in ‘very strong’ capital position; Chief praises Brexit breakthrough as ‘good news’ for business
Royal Bank of Scotland Group Plc Chief Executive Officer Ross McEwan said the likelihood is waning that the lender will settle a U.S. mortgage-bond probe before the end of the year as he’d hoped, though it’s well-capitalized to handle a settlement.
/goo.gl/sYUjCg
New York pension fund seeks more pay disclosure from Wells Fargo
Dan Freed – Reuters
New York state Comptroller Thomas DiNapoli is asking Wells Fargo & Co (WFC.N) to disclose more information about employee incentive pay, an issue that was at the heart of a scandal that has roiled the third-largest U.S. lender for more than a year.
/goo.gl/B41Eg7
Goldman Traders Are Caught Up in a Bizarre, Tense Hedge Fund Battle
By Sridhar Natarajan and Nabila Ahmed – Bloomberg
Firm is said to have $200 million position in Hovnanian battle; Bank said to have sold CDS on builder that GSO wants triggered
In a year of missteps across its trading business, Goldman Sachs finds itself in a dicey situation again.
/goo.gl/bwUEvq
JP Morgan Launching Managed Futures ETF
ETF.COM
J.P. Morgan is rolling out another alternatives strategy in an ETF wrapper today. The JPMorgan Managed Futures Strategy ETF (JPMF) will be actively managed and seek to provide exposureódirectly or via derivativesóto the performance of equities, debt securities, commodities and currencies.
/goo.gl/Xaz521
Regions
How to Launder $1 Billion of Iranian Oil; Over six days on the stand, a star witness for the FBI spun a stunning tale of corruption and double-dealing.
Reza Zarrab. – Bloomberg
Looking nervous and somber, the FBI’s star witness entered from the lockup and shuffled across the New York federal courtroom in a beige prison smock. The Turkish-Iranian gold trader took a seat at the witness stand for the hearing on Nov. 29, the second day of testimony in a money laundering and sanctions-evasion case brought by the U.S. government. Asked to state his name, he said he was Reza Zarrab.
/goo.gl/CbFjV5
Schulz’s ‘United States of Europe’ Proposal Unites Everyone Against Him
By Patrick Donahue and Birgit Jennen – Bloomberg
Martin Schulz accused of ‘radicalism’ with 1925 party point; German Left leader calls Schulz language ‘otherworldly’
German Social Democratic leader Martin Schulz used a 75-minute speech Thursday to make an urgent pitch to his restive party base for fresh talks with Chancellor Angela Merkel’s bloc. But one line on Europe ended up alienating allies and foes across the political spectrum.
/goo.gl/Czo3Ew
Trudeau Leaves China Empty-Handed
By Chris Fournier and Josh Wingrove – Bloomberg
Canada wants to fight populism by pushing progressive policies; But PM’s ‘one-size-fits-all’ approach fell flat in Beijing
Justin Trudeau saw a third way for trade, preaching “progressive” values as a fix to a global order put on the defensive by populists like Donald Trump. But this week in China, he got a crash course on how difficult it is to sell.
/goo.gl/Ao9WYV
Brexit
U.K., EU Reach Deal on Brexit Divorce Terms; The agreement means EU leaders are likely to agree for talks to advance on a trade deal
By Laurence Norman – WSJ
The U.K. and the European Union have reached an agreement on Brexit divorce terms after six months of tense talks, opening the way for negotiations to advance on a trade deal.
/goo.gl/qNjtWj
Recruiters Say Brexit Is Making Britain’s Skills Shortage Even Worse
By Jill Ward – Bloomberg
Accounting, financial, nursing and IT workers in strong demand; EU citizens quitting U.K. leave firms with fewer candidates
Robust demand for staff in the U.K. led to more people being placed in permanent jobs and a pickup in pay inflation last month, according to a report published Friday.
/goo.gl/CVRpW4
Brexit Deal in Brussels: What Small Print Says and What It Means
By Ian Wishart – Bloomberg
Theresa May got her Brexit breakthrough, ending six months of negotiations with the European Union. But celebration could be short-lived as the agreement she signed up to contains political booby traps down the line.
/goo.gl/sWHiAf
RBS CEO Says Brexit Deal Won’t Halt Its EU Relocation Plans
By Gavin Finch and Manus Cranny – Bloomberg
Royal Bank of Scotland Group Plc Chief Executive Officer Ross McEwan said the U.K.’s breakthrough in Brexit negotiations would not alter their plans to establish an alternative trading hub inside the European Union.
/goo.gl/5uTqyn
Miscellaneous
TSA Failed to Plan for PreCheck’s Popularity, Watchdog Says
By Daniel Flatley – Bloomberg
Inspector General describes backlog, staffing problems; TSA trying to enroll 25 million people by 2019 in PreCheck
The Transportation Safety Administration failed to plan for the popularity of its PreCheck program, causing staffing headaches and a backlog of paperwork, according to a new report.
/goo.gl/q3ejQm
Open-minded people have a different visual perception of reality
Olivia Goldhill – Quartz
Psychologists have only begun to unravel the concept of “personality,” that all-important but nebulous feature of individual identity. Recent studies suggest that personality traits don’t simply affect your outlook on life, but the way you perceive reality.
/goo.gl/FYWwqD
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