| August 08, 2017 | "Irreverent, but never irrelevant" | | | | John Lothian
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John Lothian News | |
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Hits & Takes
This from Financial Executives International Daily today, "Blockchain can speed up all transaction processing, from fund transfers to proxy voting. That could save investment banks 30 percent of their infrastructure costs by 2025, according to Accenture and McLagan." The report can be found HERE. ~JK
Asia Pacific Financial News from John Lothian News for August 7, is available HERE. ~JJL
Great nicknames continue. Igor Oystacher was known as "Snuggle Bear" and an options trader/s gained the moniker "50 Cent" Â now we have a supposed bitcoin manipulator known as "Spoofy." ~SD
True, China built a huge solar farm shaped like a giant panda. ~JJL
STA's 84th Annual Market Structure Conference in Washington DC will kick off on September 13, 2017 with the 2nd annual STA Women in Finance Symposium, which takes place from 11:30 am to 1:15pm at the JW Marriott.
Panelists include: Jennifer Nayar of Vela Trading Technologies, Ali Lombardo of Marshall Wace, and Natalie Horton of UBS. Brian Fagen of Deutsche Bank will moderate. (Come on, people - you couldn't find one woman to be the moderator? There are binders full of women out there...) ~SR
Some taxes are more unpopular than others it seems. "A new survey by the Illinois Manufacturers' Association shows a stunning 87 percent of county residents questioned do not like Cook County's new penny-an-ounce levy on pop and other sweetened beverages." I can see why. My girlfriend was charged the tax on a bottle of Vitaminwater Zero (has no sugar) which made her unhappy which in turn made me unhappy. ~JB
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Five Steps Financial Services Firms Can Take To Innovate
Daily.financialexecutives.org
The financial services industry is on the cusp of its biggest technology advance in decades thanks to blockchain, artificial intelligence and cloud computing. In order to get the most from these technologies, executives must experiment to learn what works, or risk falling behind.
jlne.ws/2hFYB3V
**Well worth reading the article and linked report from Accenture and McLagan. One more factoid: $280 million spent by capital markets on blockchain with an average estimated savings of 30 percent.~JK
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Back To The Future, After A Fashion
Patrick Thornton-Smith - Commercial Director-Cult Wines Limited
Expert wine tasters often use a very florid lexicon to describe the product (see wine bore) so my most favorite wine commentator wrote of the 2016 vintage, 'All I can say is fill your boots with this stuff, it's amazing. If you play the EP market you will make huge returns. If you manage to stay alive for a decade or more then you will enjoy one of the finest vintages from Bordeaux for years.' My kind of language. The trick is to have an active portfolio across a wide range of vintages so every year there is something extraordinary to drink as, all said and done, as wine is a 'passion asset'
jlne.ws/2vJ597T
**A really nice piece from a futures guy who loves wine and now sells it, and how these markets are so similar. ~JK
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Government Report Finds Drastic Impact of Climate Change on U.S.
NY Times
The average temperature in the United States has risen rapidly and drastically since 1980, and recent decades have been the warmest of the past 1,500 years, according to a sweeping federal climate change report awaiting approval by the Trump administration.
/goo.gl/f2uhGp
**It's not a matter of what the Trump Administration will do about climate change, but what you will do. ~JK
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There's Nothing New Under the Sun - Dennis Dutterer
Education.MarketsWiki.com
"I had developed in my mind a bit of an internal checklist - things I looked at and thought about, regardless of the project I was working on."
In this video from MarketsWiki Education's World of Opportunity event in New York, Dennis Dutterer, an independent financial services consultant and long-time futures industry executive, spoke about overcoming everyday challenges in the financial industry. Using a plethora of historical examples, Dutterer laid out his three step system he said can be used to solve most problems in today's world. By gaining know-how, learning from past experiences and thinking outside the box, Dutterer is confident that you can tackle any problem that comes your way.
Read the rest and watch the video »
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Hackers Demand Millions in Bitcoin for Stolen HBO Files
The Associated Press - NY Times
Hackers using the name "Mr. Smith" posted a fresh cache on Monday of stolen HBO files online, and demanded that the network pay a ransom of several million dollars to prevent further such releases.
/goo.gl/5y3oaL
***** The preferred currency of crime.~JJL
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The Man Who Wrote Those Password Rules Has a New Tip: N3v$r M1^d!; Bill Burr's 2003 report recommended using numbers, obscure characters and capital letters and updating regularlyÂhe regrets the error
By Robert McMillan - WSJ
The man who wrote the book on password management has a confession to make: He blew it.
/goo.gl/1qzwfh
****** IKNEWTHATWASABADIDEA ~JJL
****I tried in vain for years to get a co-worker of mine to understand this. The cartoon XKCD has an excellent, short and easy to understand explanation of this. ~JB
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Monday's Top Three
Our top three stories were led by what everyone is worried about, in Marketwatch's piece Former Facebook exec paints a grim picture of where the U.S. will be in 30 years. Second went to another thing we're really worried about, in Bloomberg's article MiFID Threatens Global Market Rupture as EU Pursues Trading Fix. Third went to what we really want and how to get it in Time's The Secret to Happiness Is Helping Others
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MarketsWiki Stats
105,709,253 pages viewed; 22,662 pages; 207,594 edits
MarketsWiki Statistics
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| Lead Stories | Euronext renews deal with LSE business in clearing u-turn
Reuters
Pan-European exchange Euronext has extended its contract with Britain's LCH in a surprise move that could help defuse tension over where euro-denominated trades are cleared after Brexit. Clearing, an arcane part of the plumbing of financial markets, has become highly politicized since Britain's vote to leave the European Union in June last year.
/goo.gl/HiwqRi
CFTC Finds that The Bank of Tokyo-Mitsubishi UFJ, Ltd. Engaged in Spoofing of Treasury Futures and Eurodollar Futures
CFTC
The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) for engaging in multiple acts of spoofing in a variety of futures contracts on the Chicago Mercantile Exchange and the Chicago Board of Trade, including futures contracts based on United States treasury notes and Eurodollars.
/goo.gl/fhtGoL
Investors Have Never Been More Short Volatility Futures
By Cecile Vannucci - Bloomberg
Never mind strategists warning of a potential VIX rebound, or historical data showing the index tends to jump the most in August. The number of short positions on VIX futures has hit a fresh peak, and an exchange-traded fund that benefits when volatility falls just saw its biggest weekly inflows since June, following three weeks of withdrawals. That's even as the CBOE Volatility Index hovers within 1 point of its record-low close.
/goo.gl/ssT44J
This Is How The Options Clearing Corporation Transformed To A Risk-Oriented Culture
Jason Bloomberg - Forbes
Options trading is central to the complex, risk-adverse equity derivatives industry and leading the clearing of such trades is The Options Clearing Corporation (OCC).
/goo.gl/Bxd2eF
This CEO Says Many Traders Aren't Ready for Europe's Huge Regulatory Overhaul
By Annie Massa - Bloomberg
ICE's Sprecher says industry not prepared for Europe's rules; Rule change has implications for traders around the world
With only five months to go before Europe's MiFID II overhaul of financial markets, the head of one of the world's biggest exchanges says many firms aren't ready.
/goo.gl/Rv4ny8
Mega-Hedge Funds Are Reporting Big Gains
Hema Parmar - Bloomberg
Rallying stock markets are helping lift returns at mega-hedge funds including Viking Global Investors and Renaissance Technologies.
jlne.ws/2vIuYFh
Single Trader with Enormous Bankroll is Manipulating Bitcoin Price, But to What End?
David Dinkins - cointelegraph.com
Rumors are swirling about a trader with nearly unlimited funds who is manipulating the Bitcoin markets. This trader, nicknamed "Spoofy," received his nom de guerre because of his efforts to "spoof" the market, primarily on Bitfinex.
jlne.ws/2vIeLQz
****SD: ZeroHedge with expanded coverage here.
Crypto Researchers Brace For Quantum Computing's Threat To Security; Researchers say quantum computing threatens modern cryptographic systems
By Sara Castellanos - WSJ
Companies are advancing toward commercializing the world's first large-scale quantum computer sooner than previously thought, which has cryptography experts racing to develop new encryption systems capable of thwarting a quantum computing attack on internet security by a hacker or rogue nation state.
/goo.gl/txNG6b
The August of our Discontent: Once More Unto the Breach?
AQR
This month is the ten-year anniversary of the "quant crisis" or "quant quake" - that one week period in August 2007 when quantitative equity strategies like factor investing and statistical arbitrage suffered very large losses and then, in the next few weeks, made an almost full recovery. Given the current popularity of factor investing it seems a good time to review what happened that summer and discuss its relevance for today.
/goo.gl/327V8C
IEX overcomes further hurdle in listings venue push;SEC approval for process to open and close the market comes as it eyes October launch
Nicole Bullock in New York - FT
IEX passed a major hurdle to becoming a listing venue to challenge the New York Stock Exchange and Nasdaq after winning regulatory approval for a process to open and close the market.
/goo.gl/R3jZgK
Bitcoin Wrestles With Spoofy the Trader
By Lionel Laurent - Bloomberg
Bitcoin has hit a new record of more than $3,300. Just another day at the office for a crypto-currency that's risen 50 percent in one month, 200 percent in six months and 30,000 percent in five years.
/goo.gl/k1cYWf
Low volatility weighs on Virtu results
Nicole Bullock - FT
Persistently low volatility weighed on Virtu's business last quarter amid a cost-cutting effort associated with integrating its $1.4bn purchase of trading rival KCG.
The company said in supplemental materials released with its earnings that it had cut KCG headcount to 610 from 952.
/goo.gl/4agzM1
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| Exchanges, OTC & Clearing | | Top news from exchanges, clearing, settlement and trade execution facilities | Euronext agrees new derivatives clearing deal with LCH
Philip Stafford - FT
Euronext has finalised a deal to keep its derivatives clearing with LCH in France, in a move that ends the European exchange operator's threat to take its business to rival ICE Clear Europe.
/goo.gl/rKgYp6
Euronext tears up ICE clearing contract to stick with LCH; LCH's French business will provide derivatives and commodities clearing to the European exchange operator for the next 10 years
By Samuel Agini - Financial News
Euronext has terminated a clearing deal signed with Intercontinental Exchange just four months ago in favour of renewed ties with the London Stock Exchange clearing business it failed to buy earlier this year.
/goo.gl/bStxfn
Euronext to renew agreement for derivatives clearing with LCH SA and become a minority shareholder
Euronext
Euronext, the leading pan-European exchange in the Eurozone, announces it has signed binding terms with LCH SA, LCH Group and London Stock Exchange Group for the continued provision of clearing services for its derivatives products.
/goo.gl/UMBPZn
Euronext takes minority stake in LCH SA as part of clearing deal; Deal gives Euronext members 10-years of clearing certainty.
By John Bakie - The Trade
Euronext is to take a minority stake in LCH SA, the firm it had previously offered to buy in full from owner London Stock Exchange Group (LSEG).
/goo.gl/tcRkiC
LCH SA and Euronext N.V. to sign binding terms for continued provision of derivatives clearing services
LCH
LCH, a leading global clearing house, is delighted to announce that it has signed binding terms with Euronext N.V. ("Euronext") for the continued provision of clearing services for listed financial and commodity derivatives with LCH SA, the Group's continental European operating subsidiary. The agreement is expected to be finalised in Q4 2017.
/goo.gl/rBmmfg
TP ICAP looks to buy trading software platform Trayport; Interdealer broker cut 175 jobs as part of the integration of ICAP business
Philip Stafford
TP ICAP, the world's largest interdealer broker, has confirmed it is interested in purchasing Trayport, the UK commodity trading software platform put up for sale by its owner Intercontinental Exchange.
/goo.gl/xgGKur
Will the 140-year old London Metal Exchange survive the 21st century?
Aluminum Insider
There is no question that the London Metal Exchange (LME) is the biggest metals exchange on Earth. However, questions have lately arisen as to whether the 140-year-old exchange is fit for purpose. The members-only exchange is, in some ways, a throwback to the old days of financial exchanges.
/goo.gl/xvQuUP
UK's TP ICAP reports H1 underlying profit up 23 pct
Reuters
TP ICAP Plc, the world's largest voice broker, reported a 23.1 percent rise in underlying operating profit to 144 million pounds ($188 million) on Tuesday.
/goo.gl/NGvWL4
Sony restored to Japan's JPX-Nikkei 400 index
Alice Woodhouse - FT
Sony has been restored to the JPX-Nikkei 400, an index of Japanese companies with good governance, while Fujifilm, Nikon and advertising company Dentsu were all demoted.Sony was among the 400 stocks selected for the debut grouping of the JPX-Nikkei 400 which was launched in January 2014 only to be ejected in the first index reshuffle later that year following a series of annual losses.
/goo.gl/m7pYtH
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| Fintech | | A roundup of today's market tech news and a look at tomorrow's disruptors | Colt, Equinix to deliver secure cloud service to enterprises
itp.net
Colt Technology Services and Equinix have entered into a partnership that will see enterprises benefit from secure, high bandwidth connectivity to cloud services
/goo.gl/PBTKpg
Banks tell fintech talent: No need for Shoreditch switch; Big banks are getting better at nurturing innovation in their battle to hang on to talent
By Yolanda Bobeldijk - Financial News
Banks are trying to stop senior staff from defecting to fintech companies by allowing them to work on their ideas in-house in a bid to keep pace with technological innovation.
/goo.gl/B2trF6
Op Ed: The Role of Trading Bots in the Cryptocurrency Market
bitcoinmagazine.com
But to generate passive  or active  income in these industries, you must be paying attention to current market trends and activity. Market shifts happen so fast, you can lose a lot of money if you don't act soon enough, or don't have time to trade when it's opportune. That's exactly why chat and trading bots have exploded on the scene.
/goo.gl/s4GHQr
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| Politics | | An overview of politics as it relates to the financial markets | How do you shut down a failing financial giant? Lawmakers can't seem to agree
By Jim Puzzanghera - LA Times
In the aftermath of the 2008 financial crisis, a consensus quickly developed in Washington: no more bank bailouts.
/goo.gl/c9yfkU
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| Regulation & Enforcement | | For more regulatory, visit MarketsReformWiki, our website focused on current market reform efforts. | Despite S.E.C. Warning, Wave of Initial Coin Offerings Grows
By NATHANIEL POPPER - NY Times
The cautionary words of American regulators have done little to chill a red-hot market for new virtual currencies sold by start-ups.
/goo.gl/R5fSKM
***** There is a new coin offering backed by marijuana called "Token."
CFTC Vacates DCO Registration of CME Clearing Europe
CFTC
At the request of CME Clearing Europe Ltd. (CMECE), the U.S. Commodity Futures Trading Commission (CFTC) issued an order today that vacates the registration of CMECE as a derivatives clearing organization (DCO) effective August 8, 2017.
/goo.gl/Dc7yBZ
Japanese bank fined for spoofing treasury and Eurodollar futures; Bank of Tokyo-Mitsubishi informed the CFTC one of its traders had engaged in spoofing activity.
By Hayley McDowell - The Trade
The Bank of Tokyo-Mitsubishi UFJ has told authorities in the US that one of its traders had engaged in spoofing the treasury and Eurodollar futures markets, leading to a $600,000 fine.
/goo.gl/1Mcp8u
ESMA updates its MiFID II guidelines on transaction reporting, order record keeping and clock synchronisation
ESMA
The European Securities and Markets Authority (ESMA) has issued today an update of its Guidelines on transaction reporting, order record keeping and clock synchronisation under the Markets in Financial Instruments Directive (MiFID II). The updates corrects some unintended factual mistakes, typos and inconsistencies in the technical part of the Guidelines.
/goo.gl/ZewGo6
Latest Issue of IQ: ISDA Quarterly Now Available: Speaking Out
ISDA
/goo.gl/yvr6z
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| Investing & Trading | | Today's top stories from equities, indices and FICC (fixed income, currencies and commodities) | Mega-Hedge Funds Are Reporting Big Gains
By Hema Parmar - Bloomberg
Year-long stock rally helps RIEF, Viking surge almost 9%; Griffin's flagships Kensington and Wellington up almost 7%
Rallying stock markets are helping lift returns at mega-hedge funds including Viking Global Investors and Renaissance Technologies.
/goo.gl/3KwQsj
A Tale of Two Metals Rallies
By David Fickling - Bloomberg
In a metals market dominated by China's voracious materials demand, it's tempting to believe that what's good for the goose is good for the gander.
/goo.gl/oYnmyE
Funds target 'unknown' stocks as Wall Street cuts analyst jobs
David Randall - Reuters
With a nearly 30-percent gain in 2017, shares of industrial products maker Handy & Harman Ltd are outpacing hot stocks like Google-parent Alphabet Inc and Visa Inc. Yet few on Wall Street have ever heard of the $412-million market-cap company, in large part because no sell-side research analysts publish any estimates of its earnings.
/goo.gl/wFYe6n
Hedge-Fund Manager Crispin Odey's Bearish Bets Backfire Again; Veteran investor's positions in stock markets have fared poorly
By Laurence Fletcher - WSJ
Crispin Odey, one of Europe's best-known hedge-fund managers, ran up a 10% loss in one of his hedge funds last month, in what is fast turning into a bad year for some big-name managers.
/goo.gl/2pvHyk
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| Banks, Brokers & Managed Funds | | The latest from banks, brokers, hedge funds and managed futures | The Bank of England, 1914 War Loans and a Patriotic Cover-Up
By David Goodman - Bloomberg
Poor demand for War Loan in 1914 saw BOE to plug gap; Disclosure of failed fundraising would have been 'disastrous'
The Bank of England secretly plugged a multi-million-pound hole in Britain's finances during World War I, covering up the failure of one country's apparent patriotic triumphs.
/goo.gl/K2LuHd
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| Regions | | Stories of local interest from the Americas, EMEA and Asia-Pacific regions | Malaysia Forex Probe May Lead to Prosecution of Former Prime Minister; Opposition leaders slam inquiry as a political ploy by Najib Razak
By Associated Press via WSJ
Malaysia's government on Tuesday launched an inquiry into massive foreign-exchange losses by the central bank more than two decades ago, in a probe that could lead to criminal prosecution of former Prime Minister Mahathir Mohamad.
/goo.gl/Mm24xt
Egypt Moves to End State Monopoly of Natural Gas Market
Salma El Wardany, Mirette Magdy and Tamim Elyan - Bloomberg
New gas market regulator to be set up to govern sector; Private sector can participate in transport, distribution
Egypt is opening the door to private participation in its natural gas sector, moving to end the state's monopoly as it pushes ahead with reforms meant to encourage investment and revive the economy.
/goo.gl/xq35SA
Jignesh Shah blames Chidambaram, babus for his woes
Economic Times
Jignesh Shah, founder of Financial Technologies India--now known as 63 Moons Technologies--defended his relatives and former associates accused by the Securities and Exchange Board of India of insider trading.Shah, who was talking to reporters at a press meet in Mumbai on Friday, also said an enquiry should be initiated against former finance minister P Chidambaram and some bureaucrats for "carrying out a conspiracy against the group".
/goo.gl/kn4w5E
Jignesh Shah refutes charges of insider trading by FTIL, MCX executives; Jignesh Shah says he was being targeted by Sebi in its investigations into the NSEL scam
Jayshree P. Upadhyay - Livemint
Mumbai: Jignesh Shah, chairman emeritus of 63 Moons Technologies Ltd (formerly Financial Technologies India Ltd, or FTIL), on Friday denied any violation of insider trading norms by current or former executives of his company.
/goo.gl/HVhPhw
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| Brexit | | Financials stories regarding the decision of the United Kingdom to leave the European Union | Brexit Is Quietly Strangling Science; A Nobel Prize winning physicist considers taking his research elsewhere, while applications from foreign researchers have plummeted.
Simon Parkin - Bloomberg
For many years Andre Geim was best known for designing an experiment that looked more like a parlor trick than a serious piece of scientific research. One Friday evening, in a moment of boredom at his Dutch lab, the Soviet-born physicist casually poured a glass of water onto a super-electromagnet. When the water struck the magnet it didn't spill to the floor, as Geim had expected, but instead began to float as a cluster of pristine liquid balls. Geim, with characteristic wit and flourish, published his findings in the April 1997 issue of Physics World alongside a picture he took of a live frog sitting pensively on the levitating droplets.
/goo.gl/SX7Rbt
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Disclaimer: All John Lothian Newsletters, JohnLothianNews.com, MarketsWiki.com and MarketsReformWiki.com are products of John Lothian News, a division of John J. Lothian & Company, Inc. The opinions expressed in all John J. Lothian & Company, Inc. publications are strictly those of their respective editors. They are intended solely for informative purposes and are not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers. Futures and options trading involve risk. Past results are no indication of future performance. Nothing on any John J. Lothian & Company site should be considered an endorsement by any sponsor of any website or newsletter content.
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