Nasdaq Plans to Pursue Bitcoin Futures Despite Plunging Prices

Nov 27, 2018

First Read
Hits & Takes
JLN Staff

Please stop for a moment today and give to your favorite charities as part of Giving Tuesday, a global giving movement.~JJL

On Wednesday, December 5, 2018, ICAP, part of TP ICAP group, will host its 26th Annual Global Charity Day at its new North American Headquarters in New York City. On that day, 100% of the revenues and commissions ICAP generates globally will be donated to more than 100 charities worldwide.~SR

RJ O’Brien was named 2018’s most trusted brokerage firm by Wealth & Finance Magazine.~JK

Megan Butler, executive director of supervision of the UK’s FCA said, “we are worried that a lot of firms seem overly confident about their ability to manage flagship IT change programmes and keep their systems up to date.” And one-third of the firms do not perform regular cyber assessments, according to Finextra.~JK

The NFA’s Annual Review for 2018 is available.~JJL

There is a story in the ABA banking journal about replacements for LIBOR, including the Dr. Richard Sandor product AMERIBOR.~JJL

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Transcript of President Trump’s Interview With The Wall Street Journal; President discusses U.S.-China trade, including the possibilities of additional tariffs; plant closures at GM, and Fed Chairman Jay Powell
WSJ
President Trump spoke by phone Monday with Wall Street Journal reporter Bob Davis about U.S. trade relations with China, including current U.S. tariffs on $250 billion in Chinese imports and his threats to impose tariffs on the rest of the U.S.’s annual imports from China. Here is the lightly edited transcript of that interview. Small portions of the interview have been excluded from this transcript that were off the record or that have been withheld for future Wall Street Journal articles.
/on.wsj.com/2ApTACr

******Misinformation is the word of the year. How did that happen?~JJL

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Dictionary.com chooses ‘misinformation’ as word of the year
Associated Press
Misinformation, as opposed to disinformation, was chosen Monday as Dictionary.com’s word of the year on the tattered coattails of “toxic,” picked earlier this month for the same honor by Oxford Dictionaries in these tumultuous times.
/yhoo.it/2TSccDY

***** Seems very appropriate.~JJL

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LIBOR transition; Setting your firm up for success
Deloitte
Regulators have signalled the need for firms to transition from LIBOR by the end of 2021. Given the degree of uncertainty and complexity, transition is likely to be one of the biggest transformation programmes many firms will have undertaken.
bit.ly/2TNw2QR

**** Another important read.~JJL

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Monday’s Top Three
Our top stories from Monday were not about shopping. Craig Pirrong’s Streetwise Professor led all clicks with his piece on the recent blow-up of OptionSellers.com in This Is What Happens When You Slip Picking Up Nickels In Front of a Steamroller. Second was Coindesk’s piece about massive layoffs by bitcoin miners. Fortunately, they are just machines being shut down during the incredible shrinking bitcoin implosion 600K Bitcoin Miners Shut Down in Last 2 Weeks, F2Pool Founder Estimates. Third was Bloomberg’s The Myth of Capitalism Exposed

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Lead Stories
Nasdaq Plans to Pursue Bitcoin Futures Despite Plunging Prices, Sources Say
Benjamin Bain – Bloomberg
Wants to introduce the contracts during the first quarter; Will compete with products that have only traded modestly
Nasdaq Inc. is moving ahead with a plan to list Bitcoin futures, according to two people familiar with the matter, betting on sustained interest despite the cryptocurrency’s dramatic plunge over the past year.
/bloom.bg/2ApSJSv

Silicon Valley’s Stock-Exchange Plan Snagged by Opposition at SEC; Tech stars want a long-term exchange, but some regulators worry it’s too founder-friendly
Dave Michaels and Alexander Osipovich – WSJ
Silicon Valley’s plan to build a better stock exchange for the nation’s hottest startups hit a snag earlier this year when a member of the Securities and Exchange Commission opposed it, people familiar with the matter said.
/on.wsj.com/2TVjuXU

The Monopolization of America; In one industry after another, big companies have become more dominant over the past 15 years, new data show.
David Leonhardt – NY Times
The popular telling of the Boston Tea Party gets something wrong. The colonists were not responding to a tax increase. They were responding to the Tea Act of 1773, which granted a tea monopoly in the colonies to the well-connected East India Company. Merchants based in the Americas would be shut out of the market.
/nyti.ms/2Aq3NPn

Asset managers under fire over costs and profits; Accenture research says investment banks destroying shareholder value
Laurence Fletcher – FT
Asset managers and investment banks must do much more to cut costs and improve their profits, according to new research from Accenture.
/on.ft.com/2TMIIYt

The Replacements
By Evan Sparks – BankingJournal.aba.com
Libor—the London Interbank Offered Rate—is perhaps the liveliest dead man walking. It underpins more than $350 trillion in mortgages, commercial loans, bonds and derivatives worldwide; U.S. dollar Libor alone is the reference rate for $200 trillion in financial instruments.
bit.ly/2TQuhCA

What Oil at $50 a Barrel Means for the World Economy
Enda Curran and Michelle Jamrisko – Bloomberg
Oil importers like South Africa, India among biggest winners; Saudi Arabia and Russia revenues will hurt from price slump
Just a couple of months ago, major oil trading houses were predicting the return of $100 crude. Now, with oil prices at half that level, here’s a look at what the slump means for the world economy.
/bloom.bg/2TR7VRe

Farm bankruptcies on the rise in Upper Midwest
AP
The number of farms filing for bankruptcy is increasing across the Upper Midwest, following low prices for corn, soybeans, milk and beef, according to a new analysis from the Federal Reserve Bank of Minneapolis.
bit.ly/2ABoTur

Appointment Of New FSB Chair And Vice Chair
Mondovisione
The Plenary of the Financial Stability Board (FSB) today appointed Randal K. Quarles (Governor and Vice Chairman for Supervision at the US Federal Reserve) as its new Chair and Klaas Knot (President of De Nederlandsche Bank) as Vice Chair, for a three-year term starting on 2 December 2018. The Plenary also agreed that after three years on 2 December 2021 Mr Knot will take over as Chair for the next three-year term.Appointment Of New FSB Chair And Vice Chair
bit.ly/2TP8nQg

IT failures at financial firms have more than doubled says FCA; Financial watchdog said it was ‘deeply concerned’ at extent of tech problems within sector
Caroline Binham in London – FT
The extent of cyber and IT failures within the UK’s financial-services sector has been laid bare by the Financial Conduct Authority, which revealed that firms reported an 138 per cent increase in technology outages over the past year.
/on.ft.com/2TOaF1X

Trump says Brexit deal may damage UK-US trade; US president claims agreement would be ‘great’ for EU at Britain’s expense
Sam Fleming in Washington and Jim Pickard in London – FT
Donald Trump has slammed the UK prime minister’s Brexit deal, saying it would benefit the EU while damaging the UK’s ability to trade with the US.
/on.ft.com/2TR62E8

Bitcoin’s Crash Looks Like a Real Currency Crisis; In a virtual world without a central bank, who is the buyer of last resort?
Lionel Laurent – Bloomberg
Bitcoin is in crisis. You can never really declare it dead — the idea of an electronic currency that is theoretically borderless and lawless will always live on somewhere — but its price has slumped 80 percent in less than a year, wiping about $700 billion off cryptocurrency markets.
/bloom.bg/2ApbsgU

Ripple, Coinbase back project aimed at revolutionizing the U.S. securities industry
The Block Crypto
Securitize, a startup hoping to use blockchain technology to upend the securities industry, raised a $12.75 Series A investment round led by Blockchain Capital. The venture arms of two giants in crypto — Ripple’s Xpring fund and Coinbase Ventures — also participated in the funding, which the company will use to carry out its vision for “digitizing private and public shares.”
bit.ly/2AwU6i2

Exchanges, OTC and Clearing
Intercontinental Exchange Chairman And Chief Executive Officer Jeffrey C. Sprecher To Present At The Goldman Sachs U.s. Financial Services Conference On December 5, 2018
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 Jeffrey C. Sprecher, ICE’s Chairman and Chief Executive Officer, plans to present at the Goldman Sachs U.S. Financial Services Conference. The presentation will take place on Wednesday, December 5 at 2:00 p.m. ET. The presentation will be available live and in replay via webcast and can be accessed in the Investors section of ICE’s website at www.theice.com.
bit.ly/2TO1zSI

**** So will Adena Friedman from Nasdaq.~JJL

LCH ForexClear compresses $4.5 billion of cleared notional; Citi and Standard Chartered are among the first institutions to actively compress trades with LCH ForexClear.
Hayley McDowell – The Trade
LCH has helped its ForexClear members reduce notional outstanding by $4.5 billion, with Citi and Standard Chartered among the first participants to actively compress their trades through the service.
bit.ly/2TMkPjA

ForexClear compresses $4.5 billion of cleared notional
LCH
Citi and Standard Chartered Bank among first clearing members to actively use ForexClear’s compression service; Compression enables members and their clients to improve capital and operational efficiency by reducing notional outstanding
LCH, a leading global clearing house, today announced that ForexClear members have reduced their notional outstanding by $4.5 billion through the use of the service’s compression solution. Citi and Standard Chartered Bank are among the first participants to actively compress their trades at ForexClear.
bit.ly/2TP0Alp

Euronext announces its financial calendar for 2019
Euronext
Euronext, the leading pan-European exchange in the Eurozone, today announced its financial calendar for 2019, set as follows:
bit.ly/2TOZB4H

MSCI index derivatives: Correction of the fee waiver for selected products
Eurex
With Eurex Clearing circular 094/18, a transaction fee waiver has been announced from 10 December 2018 until 30 June 2019 for selected Asian products during the Asian trading hours.
bit.ly/2TOTRrx

Sanjay Kulkarni Named Chief Marketing Officer and Head of Digital Solutions, TMX Group
TMX
TMX Group today announced the appointment of Sanjay Kulkarni as Chief Marketing Officer and Head of Digital Solutions, effective November 28, 2018. Mr. Kulkarni is an accomplished business and marketing executive with more than 18 years of experience in product development, product marketing, and commercial strategy. He joins TMX from West Corporation where he served as Senior Vice President, West Digital Communications.
bit.ly/2TPK7NB

CME raises margin requirements for energy futures
By Myra P. Saefong – MarketWatch
The CME Group Inc. CME, +1.17% late Monday said it will raise margin requirements for some energy futures contracts on the New York Mercantile Exchange, including the benchmark crude futures contract. Margins are money investors must put up to be able to trade and hold futures contracts. Initial margins for January contracts will increase to $4,100 from $3,650 per contract, effective at the close of business on Tuesday, the CME said. January West Texas Intermediate crude CLF9, -0.48% settled at $51.63 a barrel, up 2.4%.
/on.mktw.net/2TO1pLb

Fintech
Crypto’s $700 Billion Swoon Bloodies ‘Electronic Cash’ Dream
Todd White – Bloomberg
Early vision was for digital coins to be rival payment system; Speed still lags the likes of Visa; values have been tumbling
The world’s biggest digital coin began life promising to become “electronic cash,” but Bitcoin and its swarm of imitators are slipping deeper into the shadows of traditional payment services.
/bloom.bg/2TQBYsh

Fintech venture capitalists talk at Morgan Stanley panel
Dakin Campbell – Business Insider
PayPal is arguably one of the biggest success stories to come out of Silicon Valley in the last 20 years. It launched the careers of Peter Thiel, Elon Musk, and Max Levchin and paved the way for other members of the “PayPal mafia” to make seed investments in a next generation of startups.
But did it make a strategic mistake?
/read.bi/2FECvKW

Japan’s Line partners Mizuho, Tencent in fintech drive; shares jump
Sam Nussey and Taiga Uranaka – Reuters
Japanese chat app operator Line Corp (3938.T) will set up a bank with Mizuho Financial Group Inc (8411.T) and also partner China’s Tencent Holdings Ltd (0700.HK) to offer mobile payment services – plans which saw its stock rise 13 percent on Tuesday.
/reut.rs/2FG9L4n

Cases to Watch: States, U.S. regulator fight for fintech oversight
Dena Aubin – Reuters
Two lawsuits against the U.S. Office of the Comptroller of the Currency filed in federal courts in Manhattan and Washington D.C. could help resolve a fight over whether states or the federal government will be the main regulator for financial technology companies.
/reut.rs/2FI7V39

Morgan Stanley invests $15 million in FX technology platform; Integral currently has more than 200 financial institutions that use its technology services for FX businesses.
Hayley McDowell – The Trade
US investment bank Morgan Stanley has made a $15 million investment in foreign exchange (FX) technology and trading platform provider, Integral.
bit.ly/2TTmXpZ

Stacy Mallon of Vela Wins Women in Finance Award; Recognized by Markets Media for Excellence in Service Providers
BusinessWire
Vela, a leading independent provider of trading and market access technology for global multi-asset electronic trading, today announced that Stacy Mallon, Director, Infrastructure and Security, has been honored for her achievements by Markets Media’s Markets Choice Women in Finance awards presented at a dinner in New York earlier this month.
bit.ly/2TP2jqT

Cryptocurrencies
Bitcoin Continues Steep Fall as Cryptocurrency Collapse Worsens
Steven Russolillo – The Wall Street Journal
Bitcoin slumped 6% Monday, continuing a steep slide and bucking a modest rebound in stocks and oil. The cryptocurrency plunged below $4,000 over the weekend and was recently near $3,800. Last week, it lost nearly a third of its value in seven days, one of its worst weekly selloffs on record. The digital currency has now fallen by about 80% since peaking near $20,000 late last year.
/on.wsj.com/2Ql4PGt

Bitcoin sinks as cryptocurrency sell-off gathers pace
Gertrude Chavez-Dreyfuss – Reuters
Bitcoin plunged more than 12 percent on Monday, extending falls in recent weeks in a broad-based selloff in digital currencies as sentiment sours. Several factors have accelerated the downturn, analysts said, including increased U.S. regulatory scrutiny and a delay to January 2019 of the widely-anticipated launch of bitcoin futures by Bakkt, Intercontinental Exchange’s crypto platform.
/reut.rs/2FJtJLF

Ohio Becomes The First State To Allow Taxpayers To Pay Tax Bills Using Cryptocurrency
Kelly Phillips Erb – Forbes
By now, most taxpayers understand that there are tax consequences associated with cryptocurrency, but ironically, until recently you couldn’t pay those taxes using cryptocurrency. That’s about to change: With the launch of OhioCrypto.com, Ohio will become the first state in the nation to accept tax payments using cryptocurrency.
bit.ly/2Qkq1fz

Tracing Illegal Activity Through The Bitcoin Blockchain To Combat Cryptocurrency-Related Crimes
Rachel Wolfson – Forbes
While cryptocurrencies like Bitcoin have the potential to break traditional financial barriers, there are a number of growing concerns about digital currencies being used to fund illegal activities. According to a study conducted earlier this year, approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illicit activity. Around $72 billion of unlawful activity per year involves Bitcoin, which is close to the scale of the U.S. and European markets for illegal drugs.
bit.ly/2TNxdjq

AMD and Nvidia’s crypto problems ‘will persist longer than expected,’ RBC says
Ethel Jiang – Business Insider
“A high quality crypto mining GPU was still profitable as of last quarter and at this point in time no GPU is profitable,” Mitch Steves, an RBC analyst, said in a note distributed Sunday. Cryptocurrencies have been under pressure this year. Bitcoin, the largest crypto by market value, has tanked 72.5% since January — touching an intraday low of $3,592 a coin on Monday.
/read.bi/2Q0gD1l

Fake Developer Sneaks Malicious Code into BitPay’s Copay Wallet
Yogita Khatri – Coindesk
The Copay wallet from U.S.-based bitcoin payments processor BitPay has been compromised by a hacker, the firm says. Bitpay announced Monday that it learned about the issue from a Copay GitHub report indicating that a third-party JavaScript library used by the apps had been modified to load malicious code.
bit.ly/2ArBD6D

Employees Say Startup Civil Hyped Crypto Returns, But Failed to Pay
Leigh Cuen – Coindesk
Civil was supposed to create a more transparent and democratic model for journalism. But so far, journalists working on its platform have yet to receive all of the compensation they say they were promised when hired.
bit.ly/2AnLKsY

Politics
Koch Industries unit invests $500 million in Getty Images
Reuters
U.S. photo agency Getty Images Inc said on Monday it received a $500 million investment from a unit of Koch Industries.
/reut.rs/2TOTHAv

Alibaba’s Jack Ma is a Communist Party member, China state paper reveals
Reuters
Jack Ma, the head of e-commerce giant Alibaba Group Holding Ltd and China’s best-known capitalist, is a Communist Party member, the official Party newspaper said on Monday, debunking a public assumption the billionaire was politically unattached.
/reut.rs/2AqqXW0

Trump Says He Doesn’t Believe Climate-Change Report’s Economic Predictions; President has long expressed skepticism about global warming and human influence
Rebecca Ballhaus – WSJ
President Trump said Monday that he doesn’t believe the central finding of a report released last week by his administration that global climate change could cause U.S. economic losses of hundreds of billions of dollars a year by the end of the century.
/on.wsj.com/2TR9D56

The Depravity of Climate-Change Denial; Risking civilization for profit, ideology and ego.
Paul Krugman – NY Times
The Trump administration is, it goes without saying, deeply anti-science. In fact, it’s anti-objective reality. But its control of the government remains limited; it didn’t extend far enough to prevent the release of the latest National Climate Assessment, which details current and expected future impacts of global warming on the United States.
/nyti.ms/2TObibP

Regulation
Financial firms not getting basics right on cyber: UK watchdog
Huw Jones – Reuters
Britain’s Financial Conduct Authority will punish firms that are failing to get the basics right on cyber defenses, or whose botched IT projects harm consumers, a senior official at the markets watchdog said on Tuesday.
/reut.rs/2TOtl1A

Noble crime probe looks at EY audits; Singapore authorities target accounts in the 3 years before commodity trader’s big writedown
Stefania Palma and Neil Hume – FT
The criminal investigation into commodity trader Noble Group is looking at the audits conducted by its accountants EY, raising fresh concerns about the effectiveness of the industry.
/on.ft.com/2Apb41W

FCA to delay launch of Credit Information Market Study
UK FCA
We are delaying the launch of our Credit Information Market Study (CIMS) Terms of Reference until June 2019. We remain committed to launching this market study. However, we have decided to delay its launch from Q4 2018/19 to June 2019 because we have had to prioritise resource to launching the market study on general insurance pricing, which was not previously announced in our business plan as a market study.
bit.ly/2TNmRQs

Cyber and technology resilience in UK financial services
UK FCA
Speech by Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists at the FCA, delivered at Bloomberg, London.
bit.ly/2TMPai9

Investing and Trading
Last Bastion of Credit Under Fire as Guggenheim Sees ‘More Pain’
Luke Kawa and Cecile Gutscher – Bloomberg
AAA debt outperforms CCCs by 500 basis points during risk rout; Riskiest junk bonds look set to give up remaining 2018 gains
Investors could be about to lose one of the last ports in the credit storm.
/bloom.bg/2TVfDdo

American Corporations Are Winning Their War on Capitalism; When tech giants stamp out startups, they smother productivity. Second of two excerpts from “The Myth of Capitalism.”
Jonathan Tepper – Bloomberg
America is supposed to be a land of economic dynamism filled with disruptive companies, but the reality is very different.
/bloom.bg/2TPBJxB

Wisconsin dairy farmers barely hanging on as crisis deepens with no end in sight
Rick Barrett, Milwaukee Journal Sentinel Published
This was the year that longtime dairy farmer Jim Goodman decided to call it quits.
The third-generation farmer from Wonewoc, northwest of Madison, milked cows for more than four decades.
bit.ly/2TJJx4d

***”For many farmers, the price they’ve received for their milk hasn’t covered their expenses.”

‘Robo-Advisors’ Can Help You Invest for Cheap — But Ask Yourself These 10 Questions Before Picking One
Paul Schrodt – Money
Money management has long been a luxury available only to those select few with huge assets to invest. The digital age, as it tends to do, has upended that. Robo-advisors provide financial advice and investment strategies using algorithms that have gotten rapidly more advanced, providing you with virtually all the knowhow of a traditional human advisor and a lot of mathematical power — plus they won’t scoff if you have less than a couple hundred thousand in the bank.
bit.ly/2TOKgRx

Why Oil Prices Took Such a Tumble—and What Comes Next; Investors and oil traders had a sudden rethink about how much oil would be pumped onto world markets. Rising inventories could weigh on prices.
Sarah McFarlane and Pat Minczeski – WSJ
It was only at the start of October that analysts were wondering if oil would soon cost $100 a barrel. Then a trap door opened and oil prices have been in a rapid descent since, losing nearly a third of their value in about eight weeks, a wild slide that is reminding investors of the great oil price collapse between 2014 and 2016.
/on.wsj.com/2TR4mea

Institutions
Top hedge fund analysts face 10% pay hit as industry struggles; Returns on track for worst performance in 7 years amid rising market volatility
Lindsay Fortado in New York – FT
Senior investment professionals at hedge funds are projected to take a hit to their pay of more 10 per cent this year as the industry struggles through one of its worst periods since the financial crisis.
/on.ft.com/2TOydno

Front office headcount at top investment banks continues to decline; Index tracking top investment banks found headcount was down in the third quarter this year, with equities suffering the biggest decline.
Hayley McDowell – The Trade
The number of front office staff at the largest investment banks globally continued its downward trend in the third quarter this year, with headcount down for the eighth year in a row according to research from consultancy firm Coalition.
bit.ly/2TR9cIm

Regions
Russia Flexes Muscles as Natural Gas Industry Booms; Russia has emerged this year as a major player in the burgeoning market for liquefied natural gas
Georgi Kantchev – WSJ
Russia is expanding its foothold in the fast-growing natural gas market, despite Western efforts to limit Moscow’s energy influence.
/on.wsj.com/2TOM3WL

Australia regulator extends deadline on new capital rules for loans to 2022
Reuters
Australia’s banking regulator on Tuesday proposed extending the deadline for implementing new capital rules on some loans to Jan. 1, 2022, after lenders raised concerns about the impact on their competitiveness against foreign rivals.
/reut.rs/2TP7jMg

Bank of Israel to start work on financial stability committee
Reuters
The Bank of Israel said on Tuesday a high-ranking committee to monitor the stability of the country’s financial sector would meet for the first time in the coming months after receiving approval this week by the government.
/reut.rs/2TMEJet

How Estonia became centre of Danske money-laundering scandal; Head of country’s regulator does not pull any punches as he criticises Danish bank
Richard Milne in Tallinn – FT
Estonia is well known as a digitally-savvy country that has long warned of the dangers posed by its former occupier, Russia.
/on.ft.com/2TO9obb

Brexit
Markets Won’t Come to the Rescue In a Brexit Crisis; Don’t expect investors to save Theresa May’s deal in Parliament.
Mark Gilbert – Bloomberg
The bond vigilantes seem to have succeeded in persuading the Italian government to think again in its tussle with Brussels over next year’s budget deficit. But anyone expecting market pressure to force the U.K. Parliament to back Theresa May’s Brexit deal is likely to find the currency vigilantes are firing blanks.
/bloom.bg/2TPZLIU

Brexit Case at EU Court May Open Pandora’s Box, Lawyer Says
Stephanie Bodoni – Bloomberg
Judges asked if U.K. can unilaterally reverse Brexit process; EU judges could issue binding ruling as soon as December
European Union judges reviewing a case about whether Brexit can be revoked were given a stark warning: Any ruling would likely be used to sink Prime Minister Theresa May’s proposed deal to leave the EU.
/bloom.bg/2TOxLpc

Brexit deal doomed, says Theresa May’s former cabinet ally; Michael Fallon criticises prime minister’s plan, as pound falls amid uncertainty
George Parker in London – FT
Theresa May’s Brexit deal is “doomed” and “the worst of all worlds”, according to her former cabinet ally Michael Fallon, who suggested that the prime minister’s days in Number 10 could be coming to an end.
/on.ft.com/2TORncP

Brexit heightens focus on UK bank stress tests; Bank of England set to unveil results of annual financial health check on UK lenders
Caroline Binham and David Crow in London – FT
Waiting for exam results is always a stressful time, but for the UK’s seven biggest lenders, this week is particularly disquieting.
/on.ft.com/2TQEbUB

Miscellaneous
About 137 women killed by someone they knew every day in 2017: UN report
Good Morning America
About 137 women killed by someone they knew every day in 2017: UN report originally appeared on abcnews.go.com More than half of the approximately 87,000 women killed in 2017 died at the hands of intimate partners or family members, according to a report released Sunday by the United Nations Office on Drugs and Crime.
/yhoo.it/2TO6za5

On Giving Tuesday, ‘No Act of Giving Is Too Small’
John Otis and Remy Tumin – NY Times
The stamp collector who makes — and gives — millions. The community-minded son of a social worker. The donor who has given $20 a month for more than 20 years.
/nyti.ms/2TOPJI3

John Lothian Newsletter

So you want to know what’s happening in the financial markets?We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

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CEO, Trading Technologies

Past Newsletters

Nasdaq Plans to Pursue Bitcoin Futures Despite Plunging Prices

Nov 27, 2018

First Read

Hits & Takes
By JLN StaffOne takeaway from the CME’s second quarter earnings report yesterday: Average daily volume at the exchange through the first half of the year was 20.2 million. In 2000, ADV was just over 2.5 million.~JKB3, formerly BM&F Bovespa, posted a volume increase of 52 percent on 1.3 billion contracts for the first half of 2018. FOW noted that it topped the Intercontinental Exchange‘s volume, moving B3 into third in terms of volume behind top exchange, CME Group up 20 percent with 2.5 billion contracts and the National Stock Exchange of India, up 43 percent to 1.6 billion contracts.~JKDo you know who invented the “Ring The Bell” marketing event at the stock exchange? Equities.com points to a man named Enzo Villani, now a board member of a new crypto markets infrastructure firm called Alt 5 Sigma.~JKHere is a video of Blythe Masters and her CTO about the partnership between Google and Digital Asset from the Google Next ’18.~JJLThis July, NFA partnered with Six Flags Great America to offer staff discounted admission for the month. NFA auditors will be double checking for fake hand stamps and making sure rider harnesses are nice and tight.~JJL~JK++++Global Blockchain Company AlphaPoint Adds Industry Veteran Kristin Boggiano as Chief Legal Officer to Executive Team
AlphaPoint
AlphaPoint, a leading blockchain company focused on enabling institutions to launch, scale, and operate digital asset networks and exchanges all over the world, today announced the appointment of Kristin Boggiano as its Chief Legal Officer. In this role, Boggiano will oversee the company’s legal, regulatory, and government relations functions as well as contribute as a member of AlphaPoint’s executive team.
/jlne.ws/2LrzdNR**Kristin spoke at our MarketsWiki Education event in New York in 2016 about her trek through the jungles of Ecuador.~JK++++Kudlow says US GDP figure will be ‘big’; Top economic adviser says he has no specific knowledge but wanted to ‘help’
Mamta Badkar – FT
US President Trump’s top economic adviser on Thursday told Fox Business that he expected Friday’s US GDP figure to be “big” but denied knowing the specifics, less than two months after Mr Trump’s tweet in advance of a jobs report drew fire.
/jlne.ws/2JZMcR2***** This is irresponsible.~JJL++++Trump Predicts Data Will Show U.S. Economy in ‘Terrific’ Shape
Greg Sullivan and Toluse Olorunnipa – Bloomberg
Bloomberg survey points to 4.2% expansion in second quarter; Data to be released at 8:30 a.m. in Washington on Friday
President Donald Trump predicted data on Friday will show the U.S. economy is in “terrific” shape amid forecasts that growth topped 4 percent in the second quarter, the fastest since 2014.
/jlne.ws/2JXaZFj***** And so is this.~JJL++++Fake news of Napoleon’s death cited in guidance to help traders
Huw Jones – Reuters
Fake news that Napoleon had died is cited in new analysis aimed at helping commodity, bond and forex traders to stop fraud, an industry body said on Friday.
/jlne.ws/2mLvZWr***** Seems fake news, which we once called rumors, has been around a while.~JJL++++The Girl Scouts have gone from baking and sewing to cybersecurity and financial literacy
Myelle Lansat and Richard Feloni – Business Insider
The Girl Scouts is much more than selling cookies; it’s an organization that provides a foundation for young women to take leadership roles in society. And since Sylvia Acevedo was named CEO of Girl Scouts in 2017, it’s also teaching its members about STEM (science, technology, engineering, and math) — shifting the sole focus away from traditionally female tasks, like baking and sewing.
/goo.gl/kwHCjs***** In the name of fairness, some Girl Scout news.~JJL++++Thursday’s Top Three
Yesterday’s top stories were led by Bloomberg’s How Traders Have Changed Since the Massive Selloff Earlier This Year. Second was Equities.com’s From Exchanges Old To Exchanges New: Chicago Mercantile Exchange and Alt 5 Sigma about new crypto trading systems. Third went to Financefeeds’ FCA approves ION-Fidessa deal++++MarketsWiki Stats
130,088,709 pages viewed; 23,215 pages; 214,399 edits
MarketsWiki Statistics++++

Lead Stories

Up to Two-Thirds of Bitcoin Transactions Have No Economic Value
Olga Kharif – Bloomberg
Services developing tools to add clarity to blockchain data; Value of activity about half of what appears, researcher says
On any given day, as much as two-thirds of the transaction activity registered on the Bitcoin network has nothing to do with buying goods and services or trading the virtual currency.
/jlne.ws/2K5LOAMBitcoin Drops as U.S. Rejects Winklevoss ETF for Cboe Trading
Todd White – Bloomberg
Technical indicator also moves into bearish territory; Digital currency has declined after more than 30% July rally
Bitcoin fell for a third day, slipping below $8,000, after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss.
/jlne.ws/2K14LEnFacebook’s $119 Billion One-Day Rout Makes U.S. History
Sophie Caronello – Bloomberg
It’s official. Facebook Inc. just had the biggest stock-market wipeout in American history. Shares tumbled 19 percent on Thursday to close at $176.26 after sales and user growth disappointed investors. The drop translates to a $119.4 billion decline in market capitalization, the largest-ever loss of value in one day for a U.S. traded company.
/jlne.ws/2JWxavvFINRA Announces Enforcement Structure, Senior Leadership Team; Integration of Enforcement Functions Complete; Unified Enforcement Program Key Outcome of FINRA360
FINRA
FINRA announced today the Department of Enforcement’s new structure and senior leadership team. This marks the completion of the final phase of the integration of FINRA’s enforcement functions—a process that began with the July 2017 promotion of Susan Schroeder to FINRA’s Head of Enforcement to create a unified enforcement function.
/jlne.ws/2K02VDGTwitter Shares Plunge 17% as Monthly Users Decline
Selina Wang – Bloomberg
Company reports 1 million fewer visitors from previous quarter; Revenue climbs to $711 million, topping analyst’ projections
Twitter Inc. said monthly users dropped by 1 million in the second quarter, and predicted that number will decline further as the company continues to fight against spam, fake accounts and malicious rhetoric on its social network. The shares plunged 17 percent in early trading.
/jlne.ws/2JWSiBOHedge Fund Titans Who Bet Big on India Now Say They Were Scammed
Olivia Carville, Anto Antony, and Jeanette Rodrigues – Bloomberg
Axon Capital, CIFF say they are victims of a massive fraud; Dispute is playing out in courts in India and Mauritius
The $1.5 billion India wager that went horribly wrong for some of the world’s biggest hedge funds began with a tantalizing offer.
/jlne.ws/2K0v9hOJuncker’s Trade Pitch to Trump: ‘I Can Be Stupid, as Well’; How bravado, flip cards and a White House ally helped European official sell U.S. president on trade detente
Valentina Pop and Vivian Salama – WSJ
When Jean-Claude Juncker arrived at the White House on Wednesday, he had no idea how the meeting with President Donald Trump would end.
/jlne.ws/2K01wNFHigh speed trader Virtu’s profits miss the mark
Nicole Bullock – FT
Virtu Financial, the high speed trader, reported adjusted net income of $59.6m in the second quarter below Wall Street expectations amid a “markedly worse” operating environment, the company said.
/jlne.ws/2LunLRp‘F’ Is For? This ETF Is Named After FANGs and Holds No Facebook
Carolina Wilson and Sarah Frier – Bloomberg
Fund, known by ticker FNG, sold out of Facebook during scandal; Earlier, ETF had dumped Apple holdings ahead of earnings boost. What’s in a name? When hearing the acronym FANG, four technology stocks come to mind: Facebook Inc., Amazon.com. Inc., Netflix Inc., and Alphabet Inc.’s Google.
/jlne.ws/2JXeQ5fSeveral banks dismissed from U.S. metals price-fixing lawsuits
Jonathan Stempel – Reuters
A U.S. judge has dismissed five large banks from two antitrust lawsuits by investors alleging multi-year conspiracies to rig prices for hundreds of billions of dollars of transactions in the global silver and gold markets.
/jlne.ws/2JWBVFnFyre Festival Promoter Pleads Guilty to Ticket-Scam Charges
Bob Van Voris – Bloomberg
Billy McFarland, the architect of the failed 2017 Fyre Festival, pleaded guilty to new charges that he ran a fraudulent ticket business while on bail facing earlier fraud charges connected to the disastrous luxury concert series in the Bahamas.
/jlne.ws/2K0AoOwFannie Mae Debt Sale Sets Milestone For New Borrowing Benchmark; New index taking aim at scandal-ridden Libor passes $6 billion test.
Vipal Monga and Daniel Kruger – WSJ
A benchmark lending rate that regulators and investors hope can replace the scandal-plagued Libor as the foundation for trillions of dollars of debt from credit cards to business loans easily passed a key test.
/jlne.ws/2JYY9GR

Exchanges, OTC and Clearing

CME to launch six gasoline futures contracts
Reuters Staff
CME Group says it plans to launch six gasoline futures contracts effective on Aug. 26 and for trading from Aug. 27
/jlne.ws/2K0xN7eCME Group Achieves International Average Daily Volume of 4.2 Million Contracts in Q2 2018, Up 13 Percent from Q2 2017
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that it achieved quarterly international (defined as outside of the US) average daily volume (ADV) of 4.2 million contracts during the second quarter of 2018, up 13 percent over the same period last year.
/jlne.ws/2K07pdJCME profits miss despite bump in trading volumes; Concerns around global protectionism sparked higher trade, particularly in agricultural products
Joe Rennison – FT
CME Group, the world’s largest futures exchange, today reported mixed earnings, tempered by trade concerns fuelling volumes as investors sought to protect against price fluctuations.
/jlne.ws/2K1xgSmCME quarterly earnings boosted by volumes, market data
John McCrank – Reuters
CME Group Inc (CME.O), the world’s largest futures exchange operator, said on Thursday its second-quarter earnings rose on the back of higher trading volumes and market data fees, as it works toward the close of its $5.5 billion acquisition of NEX Group (NXGN.L).
/jlne.ws/2K5ifiuMGEX Reports 25th Best Electronic Volume Day
MGEX
MGEX, a Designated Contract Market (DCM) and Derivatives
Clearing Organization (DCO), reports July 25th as the fourth July date on the Daily Electronic Volume’s top 25 records list. Coming in at 19,396 contracts and beating out the previous title holder by 160 contracts, yesterday’s electronic volume now occupies the 25th-best overall spot.
/jlne.ws/2K0yeP4While the ECB holds on to its monetary policy, why not visit the home of the euro yield curve?
Eurex
The European Central Bank has decided to keep its monetary policy unchanged and freeze its benchmark interest rate on the deposit facility at -0.40 per cent. This is again a good opportunity to take a closer look at what Eurex interest rate derivatives have to offer.
/jlne.ws/2LqwSCwExchange Publishes CG Code Consultation Conclusions and Guidance for Boards and Directors
HKEX
Proposed changes to CG Code and related Listing Rules receive strong support; Amendments to CG Code and related Listing Rules to take effect 1 January 2019; Exchange publishes “Guidance for Boards and Directors” to help directors to be more effective
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) conclusions from its consultation on its Corporate Governance Code (CG Code) and related Listing Rules (Consultation Conclusions on Review of the Corporate Governance Code and Related Listing Rules, or Consultation Conclusions)1 along with “Guidance for Boards and Directors”.
/jlne.ws/2LuV7iW

Fintech

FIA Announces Partnership With Rise New York, Created By Barclays, To Promote Innovators Pavilion
Press Release
FIA today announced that Rise New York, created by Barclays, has joined the FIA Innovators Pavilion as a community partner. Rise New York will help FIA promote the Innovators Pavilion, FIA’s annual fintech showcase. Now in its fourth year, the Innovators Pavilion is part of FIA Expo, the world’s largest gathering of professionals in the derivatives markets. This year’s FIA Expo will take place in Chicago on Oct. 16-18.
bit.ly/2vbiG5HGoodbye HipChat: Slack and Atlassian Team Up on Chat Software; Stewart Butterfield’s startup will subsume Atlassian’s corporate chat tools to take on Microsoft.
Dina Bass and Ellen Huet – Bloomberg
Atlassian Corp. is selling its corporate chat software to rival Slack Technologies Inc. and taking a small stake in the startup, as they face greater competition from Microsoft Corp.
/jlne.ws/2JYY3isFortnite Mania Fuels Epic Growth to $8.5 Billion; Epic Games’ profits on the game have made “legendary character” Tim Sweeney a billionaire.
Devon Pendleton, Christopher Palmeri – Bloomberg
Tim Sweeney made Fortnite a phenomenon by doing something that sounds crazy: He gave it away. That strategy has made him a billionaire. In an industry chock-a-block with monster hits, such as Candy Crush and Pokemon Go, Fortnite’s popularity isn’t surprising. Its revenues are. Between the release of the current version in September and the end of May, Fortnite brought in more than $1.2 billion, according to SuperData Research. As of early June, it has been played by 125 million people.
/jlne.ws/2LoVcF5Schroders CEO: fintech is the ‘greatest opportunity we face’
Mark Cobley – Financial News
Peter Harrison, the boss of one of the UK’s largest asset managers, has said innovations in financial technology are the “single biggest opportunity” for his industry right now — as his firm Schroders steps up its efforts to build links with fintech entrepreneurs.
Speaking as the fund manager reported its first-half results on July 26, Harrison told Financial News the “really interesting step-change for our industry will come from technological innovation”. He added: “We are working with 25 or 26 fintechs across the business, across a whole range of different things — I see this as the single biggest opportunity we face.”
bit.ly/2v5pTnECySEC to Establish FinTech Innovation Hub with Focus on Blockchain
David Kimberley – Finance Magnates
Regulatory financial technology (FinTech) initiatives have been springing up across the globe over the past few years. This Friday, the main Cypriot regulator, the Cyprus Securities and Exchange Commission (CySEC), announced that it would also be creating an innovation hub.
bit.ly/2vaVB2ZAlexa, What’s Wall Street Saying About Amazon’s Earnings Beat?
Joe Easton and Jeran Wittenstein – Bloomberg
Shares up 4 percent pre-market amid cloud, advertising boost; Goldman Sachs, others raise price targets for the stock
Amazon.com Inc.’s record second-quarter profit drew a flurry of price target boosts on Wall Street. Analysts say strength in the cloud and advertising business, as well as operational improvements, have positioned the company for long-term growth. The shares rose 4 percent in pre-market trading in New York and are on track to open at a record high.
/jlne.ws/2K1e4nNThomson Reuters unit to be renamed Refinitiv after Blackstone deal
Reuters Staff
Thomson Reuters Corp’s (TRI.TO) Financial and Risk unit, in which U.S. private equity firm Blackstone Group (BX.N) is buying a majority stake, will be renamed Refinitiv once the deal closes, the company said in a statement on Friday.
/jlne.ws/2LptpnM

Cryptocurrencies

The Winklevoss Twins Want To Sell You A Bitcoin Fund; The Winklevoss twins filed a form with the SEC that’s the first step to selling shares in a fund that would track the price of Bitcoin. A look at the next move for the Facebook-suing twins.
Matthew Zeitlin – BuzzFeed News
Tyler and Cameron Winklevoss, impossibly strong-jawed and broad-shouldered rowers, tech entrepreneurs, and famous litigators of Mark Zuckerberg, are now two of the biggest and most famous players in Bitcoin, the cryptographic, digital currency whose wild price gyrations and security issues captivated the business press for a few weeks in March and April of this year. In April, the twins revealed to The New York Times that they owned some $11 million worth of Bitcoin.
/jlne.ws/2K14a5XWinklevoss-Backed Bid for Bitcoin-ETF Rejected by Regulators
Benjamin Bain – Bloomberg
Cryptocurrency declines after SEC announces its decision; Agency raises concern about oversight of Bitcoin’s spot market
Bitcoin fell after the U.S. Securities and Exchange Commission rejected a request to list an exchange-traded fund run by Tyler and Cameron Winklevoss, showing the regulator remains skeptical that the market for the cryptocurrency is sufficiently free of abuse to bring trading to the masses.
/jlne.ws/2K1syEaBrock Pierce: The Hippie King of Cryptocurrency
Neil Strauss – Rolling Stone
Twenty-six men and women are seated along four folding tables laid end to end in the ballroom of a former Masonic lodge in Old San Juan, Puerto Rico. An eclectic mix, ranging from local charity workers to Silicon Valley investors to cryptocurrency early adopters, they all believe that they’re about to make history. Specifically, they are here to help Brock Pierce – a child actor turned video-game entrepreneur turned crypto titan – give away a billion dollars to charity. Not in a will after his death, but now, in the prime of his life and the peak of his career, at age 37.
/rol.st/2v8YBwBBitcoin $500,000 Creates a Buzz, But Technicals Point to Rally
Olivia Schaber – Bloomberg
Hedge fund manager predicts correction, then massive rally; Directional index shows biggest divergence since last year=
Comments from Morgan Creek Capital Management hedge fund manager Mark Yusko that Bitcoin could reach $500,000 in six years are heartening battered crypto bulls. They may be better served taking a look at some underlying technicals in the meantime.
/jlne.ws/2K5gIJgCrypto Futures Expansion Won’t Happen Soon, CME’s Duffy Says
Brian Louis – Bloomberg
Exchange head reiterates cautious approach to other contracts; Rival Cboe has hinted at wanting to expand crypto derivatives=
CME Group Inc. Chief Executive Officer Terry Duffy said that in his nearly four decades in trading, Bitcoin futures “might have been the most controversial launch of a product” and he reiterated the company’s not in a hurry to list more cryptocurrency-related contracts.
/jlne.ws/2K1Qdo9The World’s Dominant Crypto-Mining Company Wants to Own AI; In a rare interview, Bitmain’s Jihan Wu talks about his plans to take on Nvidia, Intel, and AMD.
Max Chafkin and David Ramli – Bloomberg
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. (On June 4, a Bitmain spokesman said Wu misspoke and the actual figure was $2.5 billion.)
/jlne.ws/2K1LT8jCrypto Coin Tether Defies Logic on Kraken’s Market, Raising Red Flags
Matthew Leising, Mira Rojanasakul, Demetrios Pogkas and Brandon Kochkodin – Bloomberg
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.
/jlne.ws/2KjhdViSelf-Regulatory Organizations; Bats BZX Exchange, Inc.; Order Setting Aside Action by
Delegated Authority and Disapproving a Proposed Rule Change, as Modified by Amendments
No. 1 and 2, to List and Trade Shares of the Winklevoss Bitcoin Trust
SEC
/jlne.ws/2K1BbP9As Crypto Meets Prediction Markets, Regulators Take Notice
Matthew Leising – Bloomberg
The next confrontation between government regulators and a blockchain startup appears set to ensnare a prediction market platform that goes by the name Augur.
/jlne.ws/2K0zFNiMike Novogratz’s Crypto Firm Lost $134 Million in the First Quarter
Doug Alexander – Bloomberg
Crypto-focused merchant bank releases first financial results; Quarterly losses led by trading digital assets, investments
Galaxy Digital LP, the crypto-focused merchant bank founded by Mike Novogratz, posted a $134 million loss in its first quarter, when the value of Bitcoin and other cryptocurrencies plunged.
/jlne.ws/2K0dYwN

Politics

Butina Sought a Secret Kremlin Line to the U.S. A Rockefeller May Have Helped
Polly Mosendz , Greg Farrell , and Ilya Arkhipov – Bloomberg
O’Neill hosted 2017 dinner for prayer-breakfast delegates; A Russian-language guide to Rohrabacher and other guests
A scion of the Rockefeller clan, George D. O’Neill Jr., was one of the U.S. conservatives who allegedly helped Mariia Butina’s efforts to build a secret line of communication back to the Kremlin, judging by details in recent U.S. filings.
/jlne.ws/2JZwAgDMueller Examining Trump’s Tweets in Wide-Ranging Obstruction Inquiry
Michael S. Schmidt and Maggie Haberman – NY Times
For years, President Trump has used Twitter as his go-to public relations weapon, mounting a barrage of attacks on celebrities and then political rivals even after advisers warned he could be creating legal problems for himself.
/jlne.ws/2K07PRfSteve Bannon’s plot for the downfall of old Europe; The next EU parliament elections are a chance to defeat the far-right
FT
As an architect of Donald Trump’s 2016 presidential election victory, Steve Bannon knows a thing or two about unconventional political warfare. Now the godfather of the US alt-right is gearing for combat in Europe. His arena is the campaign for the next European Parliament elections, scheduled for May 23-26 2019. His chosen weapons, as in the US, are set to be the stoking of social tensions, economic nationalism, incitement of public anger at elites, systematic attempts to discredit reasoned argument and the spread of misinformation.
/jlne.ws/2K5jAWy

Regulation

U.S. regulator stands by decision to block Winklevoss bitcoin ETF
Trevor Hunnicutt, Michelle Price – Reuters
The U.S. Securities and Exchange Commission on Thursday stood by a decision blocking an exchange-traded fund that would have tracked bitcoin, citing concerns about market manipulation.
/jlne.ws/2K06iuzFinTech Regulation Bridges Silicon Valley and Washington D.C.
Stephanie MacConnell – Forbes
The FinTech community is closely watching the latest developments within the Consumer Financial Protection Bureau (CFPB). Recently, Kathy Kraninger was nominated as Director of the CFPB and, if confirmed, she will succeed acting Director Mike Mulvaney, who previously attacked the Bureau’s very existence and has worked to change policies and cut budget since taking the helm in November 2017.
/jlne.ws/2JZzO3JThe regulator is looking at platforms and so should you
Taha Lokhandwala – InvestorsChronicle
The Financial Conduct Authority (FCA), the financial services regulator, is investigating whether investment platforms are competitive and work in the interests of investors. It has recently published an interim report on its Investment Platforms Market Study, which has highlighted a number of areas of concern, including the difficulties in switching platforms and the poor rates of interest they offer on cash.
/jlne.ws/2K0xM3kCFTC Chairman Giancarlo To Keynote The West Texas Legislative
CFTC
/jlne.ws/2K1aXMDPodcast: CFTC Talks EP053: MARK YALLOP FMSB Part Two
CFTC
This week on CFTC Talks, we speak with Mark Yallop, chair of the Fixed Income, Currencies and Commodities Markets Standards Board. We cover the enormous cost to the world financial system of bad behavior, how to historically break down market misconduct into 7 categories and why trust is the heart of the financial markets.
/jlne.ws/2K1qLz8Nordic Credit Rating AS registered as Credit Rating Agency
ESMA
The EFTA Surveillance Authority (EFTA SA) has registered today the Nordic Credit Rating AS (NCR) as a credit rating agency under Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (the CRA Regulation), as incorporated into the Agreement on the European Economic Area (EEA Agreement). This decision comes into effect on 3 August 2018. NCR is based in Oslo, Norway, with a branch in Stockholm, Sweden. NRC intends to issue corporate ratings.
/jlne.ws/2mMeNQzFCA proposes changes to rules for crowdfunding platforms
FCA
Following a post-implementation review of its crowdfunding rules, the Financial Conduct Authority (FCA) is opening a consultation on new rules for loan-based crowdfunding platforms.
/jlne.ws/2mSFeo5

Investing and Trading

Is the Key to Beating the Market Written in the Stars?; Henry Weingarten invests his clients’ money by charting the movement of heavenly bodies.
Simon van Zuylen-Wood – Bloomberg
It’s 11 a.m. at the Princeton Club in Midtown Manhattan. A number of financial professionals have gathered here for the “AFund June 2018 Natural Resources Investment Symposium.” Our first speaker is HSBC’s chief precious metals analyst, the aptly named James Steel, who promotes gold as a hedge against populist upheaval. After Steel, there are slideshows from several mining companies seeking investors. After that, lunch. A generic networking event, by all appearances.
/jlne.ws/2K1DDVRECB Keeps to Policy Path to End Bond Purchases
Carolynn Look – Bloomberg
Mario Draghi holds media briefing at 2:30 p.m. in Frankfurt; President will be quizzed on economic risks as QE exit nears
The European Central Bank stuck to its plan to end bond purchases as the European Union and U.S. stepped back from a trade war and the currency bloc’s economic expansion remained solid.
/jlne.ws/2K0B2LOU.S. domestic stock funds report more demand than peers abroad: Lipper
James Thorne – Reuters
Investors in U.S. funds traded international equities for domestic stocks during the latest week as earnings beat expectations while trade tensions simmered, Lipper data showed on Thursday.
/jlne.ws/2K1vfFMWall Street faces up to “bombshell guidance” at Facebook
Jamie Powell
Facebook’s second-quarter results — which prompted the company’s shares to plunge as much as 24 per cent (!!) overnight — was the first time the surveillance-capitalism machine’s revenue growth had missed expectations since 2015.
/jlne.ws/2K5QE0UIt’s All About Social Media Contagion, Not FAANGs: Taking Stock
Arie Shapira – Bloomberg
Stock futures are holding on to their slight gains thanks to Amazon decoupling from most of its FAANG peers, though momentum gets hit from another whiff from a social media bellwether as Twitter plunges ~16% on weak monthly active user numbers.
/jlne.ws/2K5lDKe

Institutions

What Does a Bank Meltdown Cost? Not Much, Actually; Sabadell hasn’t suffered enough from the fiasco at Britain’s TSB.
Edward Evans – Bloomberg
It was a spectacular fiasco, made even worse by the clumsy way in which it was handled. TSB Banking Group Plc’s attempt in April to transfer the records of its 5 million customers to a new IT system left about a million of them unable to access their accounts and vulnerable to fraud. At first, TSB said things were running smoothly. It makes you wonder what their idea of chaos is.
/jlne.ws/2JWQvN6A $14 Billion Fund Manager Feels ‘Vindicated’ by Facebook Plunge
Olivia Carville and Emily Chasan – Bloomberg
John Streur, an investor who sold his fund’s Facebook Inc. holding after the Cambridge Analytica privacy scandal, said he felt “vindicated” watching the social media giant’s free-fall Thursday.
/jlne.ws/2JWSUaAHere’s How ETFs With Biggest Facebook Exposure Traded Today
Elena Popina , Sarah Ponczek , and Carolina Wilson – Bloomberg
A six-week old Communication Services Select Sector SPDR Fund just had its worst day ever. A rout in Facebook Inc. is to blame for that.
/jlne.ws/2K5PBy0UBS to review misconduct policies after rape claim; Woman alleged she was assaulted by a more senior bank employee
Laura Noonan in New York – FT
UBS is reviewing how it handles sexual misconduct allegations after an employee who claimed she was raped by a colleague contacted the head of its investment bank, Andrea Orcel, to complain about how the bank dealt with her case.
/jlne.ws/2JZQGHmUBS Is Cutting Dozens of Staff in Wealth-Management Revamp
Emily Chasan and Sonali Basak – Bloomberg
16.18CHF+0.18+1.16%
UBS Group AG is laying off dozens of staff at its wealth-management division as it revamps the unit’s leadership team, according to people briefed on the matter.
/jlne.ws/2K1BjhwThe $5 Trillion Question: How Did the Firm That Pioneered ETFs Lose Its Lead?; State Street developed a hit investment product 25 years ago. Then more-focused rivals came along with better marketing and lower costs. Now the trust bank is No. 3 in the market it started.
Asjylyn Loder – WSJ
For State Street Corp. STT -0.32% , the company that pioneered the $5 trillion exchange-traded fund industry, it’s been a long way down.
/jlne.ws/2JZIqr5

Regions

Why Is China’s Currency Falling?; Worries about competitive devaluation are almost certainly misplaced.
Christopher Balding – Bloomberg
Since April, the yuan has fallen by almost 8 percent against the U.S. dollar. This has led many analysts and politicians to speculate that China is intentionally trying to devalue its currency to offset the effect of President Donald Trump’s tariffs. It almost certainly isn’t.
/jlne.ws/2K1K2QZHey Buddy, Can You Spare 2 Million for Coffee?
Vivianne Rodrigues – Bloomberg
ONE. MILLION. PERCENT. That’s how high inflation will climb in Venezuela by year’s end, according to the latest forecast by the International Monetary Fund.
/jlne.ws/2JYUKryChina should really start to worry about Trump; As Europe wins a reprieve over trade the portents for Beijing have commensurately darkened
Edward Luce- FT
It was Wednesday so Europe went from being a “foe” of America to a “great friend”. Next Monday might be different. Perhaps Europe will still be in Donald Trump’s good books. The only person who can say for sure is Mr Trump. Even he probably has little idea. But my hunch is that the ceasefire he struck with Jean-Claude Juncker, president of the European Commission, will hold. Mr Trump loves applause and the last-minute trade agreement with Brussels earned a transatlantic ovation. Europe has won a reprieve. The portents for China have commensurately darkened.
/jlne.ws/2K5RWZOMizuho Eyes $11 Trillion Held by Japan’s Rich Elderly
Gareth Allan and Yuki Hagiwara – Bloomberg
Bank began offering tailor-made trusts for wealthy retirees; Also expanding consulting for Japan pension funds, CEO says
Mizuho Financial Group Inc.’s trust banking arm has its sights set on exactly where the wealth is in Japan: the $11 trillion held by the nation’s elderly.
/jlne.ws/2JZS8tiRussia Extends Rate Pause as Risks to Inflation Halt Easing
Olga Tanas and Anna Andrianova – Bloomberg
Benchmark kept at 7.25% for third meeting, in line with survey; Central bank stays just a step short of level deemed ‘neutral’
Russia’s central bank kept interest rates unchanged for a third consecutive meeting and warned that external risks and the highest inflation expectations in almost a year mean monetary easing probably won’t resume until 2019.
/jlne.ws/2K1O0cf

Brexit

U.K.’s Brexit Options Narrow as Perilous Choices Loom for May
Tim Ros , Emma Ross-Thomas, and Jess Shankleman – Bloomberg
Barnier rejects compromise at heart of May’s Brexit strategy; Chances of no-deal exit, another election creep higher
The U.K.’s Brexit options are narrowing, and most of the choices are hazardous for Prime Minister Theresa May.
/jlne.ws/2K0YwR5Major French Tech Company’s CEO Fears Effects of Hard Brexit
Giles Turner and Mark Barton – Bloomberg
Capgemini SE Chief Executive Officer Paul Hermelin is predicting a hard Brexit will cause a knock-on effect to its British clients, potentially weakening demand.
/jlne.ws/2JYXmpn

Miscellaneous

‘Disappeared’ U.S. Records on Detained Migrant Kids Sparks Probe
Erik Larson – Reuters
Claims by a U.S. ethics watchdog that the Department of Homeland Security and other agencies may have lost or destroyed files relating to the separation of migrant children at the border have triggered a government probe into the proper retention of records.
/jlne.ws/2K01vJm*****Unforgivable.~JJL

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