First Read
Ron Mark Named President Of The PRICE Futures Group; Futures Broker & Consultant Promotes Director of Business Development to President
The PRICE Futures Group today announced the appointment of Ron Mark to President. Susanna Jung, CEO and former President of the futures broker and consultant, announced the appointment. The PRICE Futures Group, founded in 1988 by Walter T. Price III and a division of Price Holdings Inc., an employee-owned financial services firm, is boosting its focus on investment consulting and risk management expertise to exceed the needs of its institutional clientele.
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***** Congratulations to my former Price Group colleague Ron Mark on being named President. CEO Sue Jung has made a strategic move to strengthen the Price Group.
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Billionaire Paul Tudor Jones to Staff: Learn to Write or I’ll Rip Up Your Memo; A prominent hedge fund manager tells Bloomberg what business people can learn from journalism majors.
Sarah Grant – FT
Billionaire hedge fund manager Paul Tudor Jones has some surprising advice for people who want to succeed in business: Take a journalism class.
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***** I knew my journalism degree was a good idea.
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Nine out of 10 active funds underperform benchmark
FT.com
Nine out of ten actively managed European equity funds have underperformed their benchmark over the past decade, intensifying pressure on stockpicking asset managers to prove their worth. Actively managed UK equity funds have also routinely failed to beat their benchmark, with three-quarters of managers in this category underperforming over the past decade, according to new data from S&P Dow Jones Indices.
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***DA: In a related story, 4 out of 5 dentists still prefer sugarless gum for patients who chew gum.
**** JJL: 14 out of 15 statistics are made up.
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Katie Burgoon, Trading Technologies – Gone But Not Forgotten: How The Floor Trader Mentality Can Prepare Everyone For Success
JohnLothianNews.com
“You would never have met a floor trader who did not live and breathe the markets every day. They literally could not wait for the alarm clock to go off every morning.”
Though the open outcry system of order execution has been relegated to the history books, the trading floor mentality lives on in the hearts and minds of the thousands of former floor participants. And any one of them would say that the things that defined a floor trader – passion, a strong voice and even a confident swagger – can prepare anyone for a successful career. Katie Burgoon, who spent many years on the Chicago Board of Trade floor, now sits on the other side of the hiring line in her role as VP of global human resources at Trading Technologies. She says that, regardless of gender, years of service or role within a company, one should aim to channel the inner floor trader to find success.
Watch the video at MarketsWikiEducation.com »
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Eurex: Trading in Mini-DAX Futures will start on Wednesday.
Eurex
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Bridging the Week by Gary DeWaal: October 19 to 23 and 26, 2015 (Automated Trading Controls; Too Much Regulation; Spoofing; Evasion; Customer Funds Investments)
Gary DeWaal, Katten, Muchin & Rosenman LLP
Last week, two leaders of major regulatory agencies in the United Kingdom and the United States expressed concerns about at least some aspects of the post 2007-2008 financial services regulatory environment, while prudential regulators began rolling out a final rule on margin requirements for uncleared swaps.
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Divorce can galvanise a career as well as ruin it
Lucy Kellaway – FT
When you have lost some financial security, every pay cheque becomes a cause of celebration
At dinner the other night with 50 partners in a corporate law firm, I looked around the room and noticed something alarming. I was one of the oldest people in it.
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***** Paul Tudor Jones will make traders stop trading when they are going through divorces.
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Lead Stories
Treasuries Epicenter Tilts Toward Chicago With High-Speed Firms
Susanne Walker Barton – Bloomberg
As dealers curb risk, internalize trades, HFT sway grows
Windy City rivals Wall Street as destination for bond jobs
Chicago is challenging New York’s long-held position at the center of what’s been called the world’s most important financial market.
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A Global Chill in Commodity Demand Hits America’s Heartland; In China and other emerging markets, growth is waning and demand
for the raw materials that drive the global economy has dried up.
By NELSON D. SCHWARTZ and JULIE CRESWELL – NY Times
A thousand miles south of this gritty steel town on the Mississippi River, West Texas oil rigs have shuddered to a halt. Seven hundred miles north, mines in the Iron Range of Minnesota have been stilled.
jlne.ws/2072DPB
Here’s How They Fight on Wall Street
Sonali Basak, Chris Dolmetsch – Bloomberg
Ex-partner Kramer says Weinberg offered to invest in new firm
Four men say firing was ruse to keep their $60 million payout
The knives finally came out in the fight between Peter Weinberg and Michael Kramer.
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StanChart says to exit equity derivatives, convertibles businesses
Reuters
Standard Chartered (STAN.L)(2888.HK) said on Monday it plans to exit from its equity derivatives and convertible bonds businesses, following a step earlier this year to close the bulk of its global equities operations.
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German official says D.Boerse could seal China cooperation deal
Reuters
Deutsche Boerse could soon agree a cooperation deal with a Chinese financial market operator, a German government official said on Monday, ahead of a visit to China by Chancellor Angela Merkel this week.
jlne.ws/1MeEGLL
‘Spoofing’ trial in Chicago to test market clampdown
Gregory Meyer in New York and Philip Stafford in London – FT
The email from meatpacker JBS to the biggest futures exchange bore the subject line “Algo Question”.
jlne.ws/1R8rPiI
Spoofing trial to shine light on secret world of high-frequency trading
HFT critic
Kim Janssen – Chicago Tribune
In less time than it takes you to read this sentence, Michael Coscia could make more money than most Americans earn in an 8-hour day. If you blinked, you miss it.
jlne.ws/1RwWc27
Euronext launches AtomX with post-trade technology from Cinnober
Cinnober
Today Euronext announced the launch of its new flexible service AtomX, powered by Cinnober’s award-winning TRADExpress technology. The new solution will complement Euronext’s existing offering and capture tailored derivatives business that would otherwise have been conducted OTC. The service addresses regulatory changes calling for increased transparency and reduced systematic risk, which will make exchanges even more attractive to derivatives business.
jlne.ws/1Xt6BzV
U.S. Companies Warn of Slowing Economy; Big firms to post first decline in both earnings and sales since the recession
By THEO FRANCIS and KATE LINEBAUGH – WSJ
Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending.
jlne.ws/1MOpJkl
Citi Found Itself Briefly Exposed to $400 Million Hit Through Small London Hedge Fund’s Trades; Executives discovered a giant potential loss; money is recovered
By JENNY STRASBURG – WSJ
A small London hedge-fund firm and a lapse in bank-risk controls caused a panic inside Citigroup Inc. in July, after its executives discovered a series of trades they estimated could cost the bank as much as $400 million, people familiar with internal discussions at the time said.
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Bank directors have lack of technology know-how, study finds
Martin Arnold – FT
Only 6 per cent of the directors overseeing the world’s biggest banks have any technology experience even though issues ranging from cyber security to digital challengers have shot up their boardroom agenda, a study has found.
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The 57-Year-Old Chart That Is Dividing the Fed
Neil Irwin – NY Times
Next week, when Federal Reserve officials meet to decide whether to raise interest rates for the first time in nine years, one question will be front and center: How much faith should be placed in a line on a graph first drawn by a New Zealand economist nearly six decades ago, based on data on wages and employment in Britain dating to the 1860s?
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Betting Markets Call Marco Rubio Front-Runner in G.O.P.
Justin Wolfers – NY Times
It’s official: Jeb Bush is no longer the leading contender to become the Republican candidate for president. Instead, prediction markets now rate Marco Rubio as far more likely to get the nod.
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High-frequency traders more aggressive: ASIC
Michael Roddan – The Australian
High-frequency trading on local futures markets has more than doubled in less than two years and algorithmic traders are conducting business more aggressively, but the Australian Securities and Investments Commission says it isn’t concerned by the findings.
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Severe widening could make dollar market unfeasible
BY ABHINAV RAMNARAYAN – Reuters
Public sector issuers this week priced US dollar bonds at spreads dramatically wider than they achieved in the summer, triggering worries that funding in the currency may become uneconomical if the trend continues.
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Regulatory
?Bank branches would get LEIs in global derivatives plan
Neil Roland, MLex (Subscription Required)
Global authorities proposed assigning identification tags to banks’ international branches that trade derivatives to help capture banking giants’ overall risk exposure.
jlne.ws/1NuCaEG
ASIC publishes results of new reviews of high-frequency trading and dark liquidity
ASIC
Financial market users have become better able to operate in an electronic and high-speed environment, according to the latest ASIC findings on high-frequency trading and dark liquidity. ASIC today released a report examining the impact of high-frequency trading on Australian equity and futures markets and dark liquidity on Australian equity markets.
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MiFID II / MiFIR – Hurdles & Planning for Implementation
DerivSource
ESMA recently published its draft RTS for MiFID II and MiFIR which has left many compliance and operational teams with over 2,000 pages of information to digest and translate into implementation plans and changes. In this DerivSource podcast, we speak to PJ Di Giammarino from JWG Group about some of the stumbling blocks of MiFID II requirements, such as reference data and the transparency principle, and how financial institutions are implementing changes.
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Keynote Address of CFTC Commissioner J. Christopher Giancarlo before the 2015 ISDA Annual Asia Pacific Conference
CFTC
I want to first address two topics that I think are of keen interest to today’s audience, in particular, and participants in the global swaps markets, in general. Those are the changing dynamics of market trading liquidity and margin on inter-affiliate transactions in uncleared swaps. I then wish to comment broadly on two areas of interest to the CFTC and my fellow commissioners: automated trading and cyber threats.
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Irish regulator highlights challenges to implement CMU
The Trade News
The Central Bank of Ireland (CBI), the Irish regulator, has said it welcomes the EU’s ambitious Capital Markets Union (CMU) project but tacitly acknowledged the challenges of pushing it through member states should not be underestimated.
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U.S. money laundering probe into Deutsche Moscow unit widens – FT
Reuters
U.S. regulators are expanding their probe into Deutsche Bank AG as a money laundering investigation of a Moscow unit has widened into possible sanctions violations, the Financial Times reported, citing sources.
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SEC getting flack for participants in key stock-market reform group
By FRANCINE MCKENNA – MarketWatch
The second meeting of a key group debating how stock markets should operate is scheduled for Tuesday, and there are protests about who and who isn’t participating.
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Exchanges & Trading Facilities
Euronext launches AtomX; New service to complement existing offering and capture bespoke derivatives business that would otherwise have been conducted OTC
Euronext
Euronext today launched AtomX, a flexible service that offers the efficiency and security of the regulated market and central clearing to bilaterally negotiated trades. Through AtomX investors are now able to customise and trade options and futures which will be cleared, via LCH Clearnet, in the same clearing pool as the other Euronext derivatives positions.
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Open Interest of TOCOM Gold Daily Futures Exceeds 70,000 Contracts
TOCOM
The Tokyo Commodity Exchange Inc., announced today open interest of Gold Daily futures was 70,214 contracts reaching beyond the level of 70,000 contracts for the first time since its launch on May 7. 2015
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Emerging market exchanges push plans to demutualise
Philip Stafford – FT
A new band of stock exchanges from emerging markets are pushing ahead with plans to demutualise in coming months, aiming to loosen links with their governments and attract fresh investment.
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SGX welcomes Perennial Real Estate Holdings Limited’s retail bonds
SGX
Singapore Exchange (SGX) today welcomed the listing of Perennial Real Estate Holdings Limited’s three-year retail bonds with a coupon rate of 4.65% per annum, payable half-yearly, on the Mainboard under the stock code, “BIOZ”.
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Eurex Exchange’s equity index derivatives newsletter – October 2015
Eurex
Global market volatility is on the rise, which is positive for our equity index segment. Investors and traders are increasing their hedging and trading activities, which has led to greater liquidity and larger open interest in our broad- as well as narrow-based products. Now is an ideal time to explore our products.
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Hedge Funds & Managed Futures
The Law School Debt Crisis
By THE EDITORIAL BOARD – NY Times
In 2013, the median LSAT score of students admitted to Florida Coastal School of Law was in the bottom quarter of all test-takers nationwide. According to the test’s administrators, students with scores this low are unlikely to ever pass the bar exam.
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On the greatness of the great moderation
Lola Gadea, Ana Gomez-Loscos, Gabriel Pérez-Quirós – VOX
The Great Moderation is one of the most important changes in the US business cycle since statistics where gathered. This column contributes three main ideas – that output volatility remains subdued despite the tumult created by the Great Recession, that the Great Moderation structural break is found when considering a long historical dataset, and that the nature of the volatility reduction associated with the Great Moderation is linked to the features of expansion phases, in particular, to the absence of high growth recoveries.
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Hedge Funds Are Getting Their Gold Bets Wrong
Megan Durisin – Bloomberg
Net-long wagers reach 8-month high before prices slump
Money managers increased bullish holdings for five weeks
Gold prices are befuddling hedge funds, which are posting a track record no better than a coin flip when it comes to betting on the metal.
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Fund houses lose $700bn in ‘particularly brutal’ Q3
Attracta Mooney – FT
Seven of the world’s largest fund managers collectively lost more than half a trillion dollars in assets during the third quarter as they struggled to cope with the fallout from Black Monday. The slump has sparked fears investors will pull more money during the final months of the year.
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Asset managers suffer as oil funds withdraw cash
Madison Marriage and Chris Newlands – FT
Global asset managers are facing a double hit to their fees, as sovereign wealth funds withdraw billions to support their oil-dependent economies — and switch to a cheaper in-house investment approach.
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Pimco promises ‘no entitlements’ under new incentive scheme
Stephen Foley in New York – FT
Pimco is overhauling a compensation system for senior staff which lies at the heart of co-founder Bill Gross’s $200m-plus lawsuit against the asset management group.
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Bill Ackman’s Terrible, Horrible, No Good, Very Bad Week Just Got Worse
By DAVID BENOIT – WSJ
The activist investor has been front-and-center in the turmoil at Valeant Pharmaceuticals International Inc.VRX.T +5.41%, which has been rocked by accusations from a short seller and questions about its business model. Mr. Ackman is close to Valeant chief executive Michael Pearson and spent much of the past year endorsing him as the next big thing in pharmaceutical companies.
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Banks & Brokers
RBS signs up bankers for Facebook at Work
Emma Dunkley in London and Hannah Kuchler in San Francisco – FT
Bankers will soon be using Facebook to communicate with colleagues, swap information and could even offer banking services to the public through the social network, after Royal Bank of Scotland became the world’s first bank to adopt Facebook at Work.
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Malaysia Listed Derivatives: The Next Chapter for the Market & Local Brokers
DerivSource
In a DerivSource Q&A, Azila A. Aziz, CEO and Head of Listed Derivatives for Kenanga Deutsche Futures Sdn Bhd and President of the Malaysia Futures Brokers’ Association offers an update on the developments in the Malaysian Listed Derivatives market and explains how local brokers are differentiating their services in line with global standards to take advantage of new opportunities in post-trade and beyond.
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Greece’s banks race to boost capital ahead of stress tests
Eleftheria Kourtali in Athen – FT
Greek banks are racing to pre-emptively boost their capital amid hopes that they will come through stress tests in better shape than was thought, potentially sparing existing investors the pain of large losses.
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Deutsche splits asset and wealth management
David Ricketts and Sandra Heistruvers – FT
Deutsche Bank has announced a sweeping overhaul of its asset and wealth management unit, a division it created just three years ago, which will see Michele Faissola, its head, leave the group.
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Even the biggest banks cannot afford $6bn systems errors
Simon Samuels – FT
The revelation last week that Deutsche Bank accidentally sent $6bn to one of its customers, and that it did not recover the money until the next day, is a vivid reminder that banks deal in large numbers — billions of dollars and billions of transactions on a daily basis. To do this without error requires robust IT systems — and, while there is no suggestion that the Deustche Bank episode was directly an IT failure, it is entirely possible that under-investment in IT was at least a contributory factor to what happened.
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Swiss banks warned over global expansion
Ralph Atkins in Bern and Patrick Jenkins in London – FT
Switzerland would toughen further the capital requirements for its two biggest banks if they expanded significantly, the country’s financial regulator has warned. That is even after last week, when the regulator set a global “gold standard” on high-quality assets that the banks must hold in case of crises.
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J.P. Morgan junior bankers fired for cheating on test; Cheating on internal tests appears to be growing on Wall Street
By SUE CHANG – MarketWatch
It is never a good thing when cheating shows up in the same sentence as banking. But on the heels of a cheating scandal at Goldman Sachs, J.P. Morgan Chase & Co. found itself mired in a similar situation.
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Clearing & Settlement
Clearing Obligation For Derivatives – Switzerland
Mondaq News Alerts
In line with recognised international standards (in particular, the European Market Infrastructure Regulation), the Federal Council and the Swiss Financial Market Supervisory Authority (FINMA) have recently published draft versions of their implementing rules (ie, the Financial Market Infrastructure Ordinance and the FINMA Financial Market Infrastructure Ordinance), which regulate the clearing obligation in more detail and define the criteria according to which derivatives are subject to a clearing obligation. The clearing obligation is expected to enter into force in 2016.
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The Clearing House Drives Closer to Standing-Up New Innovative National Real-Time Payment System
MarketWatch
The Clearing House (TCH) announced it has entered into a letter of intent with VocaLink, the UK-based international payment systems provider, to help build and deliver core elements of TCH’s new real-time payment system for the United States.
jlne.ws/1WdzfCz
Euronext Unveils AtomX Service for OTC Trading
Finance Magnates
AtomX will allow users to fully customize and trade both options and futures, each of which will be cleared through LCH Clearnet.
jlne.ws/1WdyNEg
Indexes & Products
S&P report: UK active funds struggle to beat benchmark over long term
Investment Week
A large proportion of active UK equity funds fail to beat their benchmarks over long time periods, despite strong one-year numbers, according to a report from S&P Dow Jones Indices.
jlne.ws/1WdzFst
Indexers must warm to low carbon investing
FT.com
Investors concerned about the risks of climate change, whether environmental or financial, are not aligning their investments with their concerns. Most portfolios are invested largely or wholly in line with stock market indices and as currently constituted, those indices are out of line with the aim of limiting the average rise in global temperature to 2° Celsius.
jlne.ws/1Wdzr4M
Alibaba Gains From MSCI China Inclusion: $1.6 Billion Passive Buying Seen
Barrons.com
U.S.-listed Chinese companies will be included in the MSCI China Index in November. The official weighting and stock names will be released on November 12 after market close and the official inclusion will occur after the close on November 30.
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The Rieger Report: Puerto Rico – a 22% Weight on the High Yield Muni Market
Indexology – S&P Dow Jones Indices
As the Puerto Rico saga continues it has created a drag on the high yield municipal bond market. The weight of Puerto Rico debt in the market place as measured the market value of bonds in select indices as of September 29, 2015
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MSCI’s move to include Hong Kong-China ADRs in EM index may hit Indian stocks
The Economic Times
Global index provider MSCI’s move to include Hong Kong-China American Depositary Receipts (ADRs) into the EM index starting from November may lead to outflows from Indian equities. According to Morgan Stanley, India could see outflows of Rs 3,700 crore between November and May 2016 due to the proposed changes.
jlne.ws/1WdznSA
Technology
Duco Reconciles All Types Of Data But Stops Short of Failed Relationships
Forbes
London-based Duco with its Duco Cube platform brings plain English and intuitive Web interfaces to the process of reconciliation across businesses, a back office process where complexity is more common than clarity. Duco, which is a graduate of the Accenture Fintech Innovation Lab in London, uses algorithms, artificial intelligence and a natural rule language for Duco Cube that lets non-tech users create matching rules and filter data, to encompass any data in any format for business processes, from portfolio reconciliations to complex inter-company controls.
jlne.ws/1GB4xBp
Platts Announces the Launch of Platts Analytics
Comprehensive Insight to Improve Commodity Market Forecasts
Platts
Platts, the leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets, today announces the launch of Platts Analytics. The new offering combines the company’s analytical capabilities into a new product portfolio which helps customers to make better informed trading and business decisions by understanding the drivers of, and contributing factors to, the supply and demand dynamics which ultimately drive commodity prices.
jlne.ws/1OQPiak
Assessing FinTech’s Current Influence on the Banking Industry
International Banker
The rapidly growing financial-technology sector (FinTech) has made many headlines in 2015, especially regarding the impact it has been having on the culture of the global-banking industry. The buzzword used to describe this impact thus far has been “disruption”, with September in particular being the most “disruptive” month of the year in this regard, a month that was rounded off by news that FinTech marketplace lender SoFi received $1 billion of primary capital led by Japan’s SoftBank.
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Enforcement
FCA bans Magnus Michael Peterson from the financial services industry
UK FCA
The Financial Conduct Authority (FCA) has today banned Magnus Michael Peterson, the former head of the hedge fund Weavering Macro Fixed Income Fund Limited, from performing any function related to any regulated activity. On 19 January 2015 Mr Peterson was convicted of a range of fraud offences through his hedge fund resulting in losses to clients of approximately $536m. Mr Peterson was sentenced on 23 January 2015 to a total of 13 years’ imprisonment at Southwark Crown Court.
jlne.ws/1WdfBvJ
Australian former Rabobank trader arrested over Libor rate-rigging scandal; Paul Thompson arrested on extradition order over allegation, which emerged in 2012, that former Rabobank traders colluded to fix the benchmark interest rate
The Australian
A Western Australian man is in jail awaiting extradition to the United States for his alleged role in the Libor interest rate-rigging scandal.
jlne.ws/1k4rcM0
If Iceland Can Jail Bankers For The Crash Then Why Can’t America?
Tim Worstall – Forbes
It’s entirely true that Iceland has successfully been jailing bankers for their part in the Great Crash of the financial markets and then of Iceland’s economy. And this is leading, as of course it would, to people on the left shouting about how if Iceland can do it then why can’t the US? And it’s a useful question too. Why is that an icy social democracy can jail people and a great democracy like the US cannot or does not? The answer being given is that it’s all about that social part of the democracy. The US is too in hock to the Wall Street interests to actually take action against them. This isn’t, however, how it is. The truth is that those bankers jailed in Iceland did things that would get them jailed in the US too. And the bankers in the US did not do things that would have got them jailed in Iceland.
jlne.ws/1MeGbJY
Rabobank traders to testify in own defense in Libor trial
By Nate Raymond – Reuters
Two former Rabobank traders from Britain facing U.S. charges that they engaged in a scheme to manipulate Libor interest rates plan to testify in their own defense, their lawyers said on Friday.
jlne.ws/1LR2yFZ
Environmental & Energy
Indexers must warm to low carbon investing
Pauline Skypala – FT
Mainstream investment not supportive of decarbonised economy
Investors concerned about the risks of climate change, whether environmental or financial, are not aligning their investments with their concerns. Most portfolios are invested largely or wholly in line with stock market indices and as currently constituted, those indices are out of line with the aim of limiting the average rise in global temperature to 2° Celsius.
jlne.ws/1GsFr7W
EU failed to heed emissions warnings in 2013
Jim Brunsden and Christian Oliver in Brussels – FT
Despite the warning sounded by Janez Potocnik, the then EU environment commissioner, Brussels did not take swift action to crack down on the practice but instead left in place an earlier plan that allowed the emissions loopholes exploited by Volkswagen to remain through to 2017.
jlne.ws/1RwUldD
California’s Growers Bear Brunt of Drought Woes; Even as water costs mount, farmers find it difficult to raise prices for fruits, vegetables
By DAVID KESMODEL – WSJ
California’s historic drought is forcing farmers in the dominant produce-growing state to fallow hundreds of thousands of acres and spend millions of dollars to access water. Yet U.S. grocery shoppers are barely feeling an impact.
jlne.ws/1S5T5yV
Oil traders threaten London market exit over EU ‘position limits’
David Sheppard and Neil Hume – FT
Some of the world’s largest oil traders are threatening to pull their business from London’s derivative exchanges because of tough new European rules that would place limits on their ability to manage price swings.
jlne.ws/1k4t73p
As oil industry bleeds jobs, Asia’s green energy drive offers bright spot; Global oil sector has cut 200,000 jobs in downturn -recruiter; Industry fears talent exodus as oil sector loses its lure; Record hiring in renewables, led by Asia, offers opportunities; China and India have massive solar, wind programmes
By Jacob Gronholt-Pedersen – Reuters
Renewables are powering a rare bright spot in the energy industry, with record job hiring in solar, wind and hydro partly offsetting the biggest round of job losses in the oil and gas sector in almost two decades.
jlne.ws/1N29oNf
Obama’s carbon reduction plan under attack from 24 states and Republicans
Suzanne Goldenberg, US environment correspondent – The Guardian
Twenty-four states have filed lawsuits against Barack Obama’s rules for cutting carbon pollution from power plants, the first wave of a much-anticipated legal and political onslaught against his climate change plan.
jlne.ws/1Xt91hR
Oklahoma Earthquakes Are a National Security Threat; North America’s biggest commercial oil storage hub is already on guard against terrorism, but quakes could prove the bigger risk.
Matthew Philips – Bloomberg
In the months after Sept. 11, 2001, as U.S. security officials assessed the top targets for potential terrorist attacks, the small town of Cushing, Okla., received special attention. Even though it is home to fewer than 10,000 people, Cushing is the largest commercial oil storage hub in North America, second only in size to the U.S. government’s Strategic Petroleum Reserve. The small town’s giant tanks, some big enough to fit a Boeing 747 jet inside, were filled with around 10 million barrels of crude at the time, an obvious target for someone looking to disrupt America’s economy and energy supply.
jlne.ws/1OWqjRB
Asia-Pacific
‘Deflationary boom’ in prospect as China slows
Diana Choyleva – FT
Fall in demand would spark rise in western spending
The slowdown in Chinese growth, confirmed by last week’s third-quarter GDP report, is feeding fears that the world economy faces a prolonged period of stagnation, perhaps even a new crisis. In fact, China’s weakness is one of the reasons to be optimistic about global growth.
jlne.ws/1k4puKN
A China bond market nuttiness deadline?
David Keohane – FT
Stop me if you’ve heard this one before…
China’s bond markets are nuts — particularly at the moment — and are doing a poor job of pricing risk. Over a future unspecified timeframe the government will have to normalise their operations or risk everything getting out of control and messy. In the shorter term we can only gawp and remember that said government has the firepower to keep things going for quite a while… assuming, which we do, that it wants to.
jlne.ws/1R8uFEr
Why It’s Not So Easy for China to Ease
By AARON BACK – WSJ
China’s savers are once again earning a negative real return on their deposits. That may be an intentional part of stimulus efforts, but it will be a double-edged sword for banks—and for the broader economy.
jlne.ws/1MeEb4y
‘New China’ Stocks Find Success in Middle Class; Makers of cosmetics and condoms, as well as local tech and media firms, see revenue grow in weak economy
By WEI GU – WSJ
China’s economic transformation has become a painful, slow affair. But a new group of winners is already emerging that is drawing the attention of investors.
jlne.ws/1Xt6Nz7
Chinese group accused over US metal duty – FT
An American trade association has brought a case against China Zhongwang Holdings, the Hong Kong-listed aluminium producer, alleging that it has evaded duties on exports to the US.
jlne.ws/1jKUcc5
Frontier Markets
NSE considers ETFs based on broader indices, different asset classes
Live Mint
CEO Chitra Ramkrishna says market for ETF is growing and NSE will launch newer products to capture that
jlne.ws/1jKSqb0
Congratulations To Bolivarian Socialism: Publishing The Exchange Rate Is Now Cyber-Crime
Tim Worstall – Forbes
The latest stage of Bolivarian Socialism’s descent into fascistic farce has just been announced. The government of Venezuela is now trying to prosecute a website, run from America, that publishes the exchange rate for the bolivar. That this website publishes the rate at which people actually exchange bolivars for dollars, rather than the rate at which the government thinks they should exchange dollars for bolivars, is now being described as “cyber-crime”. Reporting reality is thus a crime. No doubt Nicolas will soon be going after those who insist that water really is wet you know, or whatever else it is that contrasts with Chavezian orthodoxy.
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Venezuela sues currency website over claims of cyberterrorism
Complaint filed in US accuses Venezuelan exiles of sowing economic chaos through website DolarToday which tracks black market value of bolivar
The Guardian
Venezuela’s central bank has filed suit in the US against a website widely used to track the plummeting black market value of the country’s currency.
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Power Play: Do not get out of emerging markets completely
CNBC
Many investors have been pulling out of emerging markets as growth slows in China, but one veteran strategist tells CNBC’s “Power Lunch” on Thursday, you need to invest in EM long-term.
jlne.ws/1WdB0zs
Why Sebi’s ‘Dividend Policy’ for listed companies will make stock picking easy; If implemented this will be a good step in bringing clarity and transparency for the investors as well as broaden the investor base in the country
Shishir Asthana – Business Standard
Indian markets have seen their biggest reforms and policy changes happening after a scam reminds policy makers of the loopholes in the system. Open outcry system gave way to electronic exchanges after the Harshad Mehta scam. The dematerialisation scam resulted in strict KYC (Know Your Clients) norms being implemented by brokers. The latest Jignesh Shah–NSEL scam has resulted in tighter norms for commodity exchanges and the commodity regulator FMC (Forward Market Commission) itself being merged with market regulator SEBI.
jlne.ws/1WdBghS
Hasten merger of similar schemes, Sebi tells AMCs; Under Sebi regulations, two schemes can be merged if the fundamental attribute of the surviving one remains the same
Jayshree P Upadhyay – Business Standard
The Securities and Exchange Board of India (Sebi) is pushing asset management companies (AMCs) to merge similar schemes. In the latest missive, the market regulator says that it has set up an internal team to monitor the progress.
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Miscellaneous
The Offshore Game of Online Sports Betting; The story of Pinnacle Sports is a case study in how bookmaking sites, illegal in the United States, manage to operate on American soil.
By JAMES GLANZ, AGUSTIN ARMENDARIZ and WALT BOGDANICH – NY Times
Hard by the High Line, in a vintage industrial building with a Romanesque arch, lights flash on powerful computers in row after row of metal cabinets and cages. Power lines connect the equipment to diesel generators on the roof. Cables route data through the building to conduits beneath New York City streets.
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The most influential women in financial services in 2015
By Lucy McNulty – Financial News
Financial News’s honour roll of the most influential female executives working in financial services is this year dominated by those striving to set new standards of behaviour in the industry.
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Head of Egg Industry Group Steps Down After Vegan Mayo Issue
NY Times
The CEO of the American Egg Board has stepped down earlier than planned, following the release of emails indicating she tried to stop the sale of a vegan mayonnaise at Whole Foods.
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