Observations – Statistics – Commentary

Insight: The masters lost our trust
Sherman McCoy, the fictional 1980s “Master of the Universe” Wall Street bond trader, had his sights set on a deal which could earn him $1.7m in commission payments, money he needs to pay off the mortgage on a lavish Park Avenue apartment. “The only real problem was the complexity of the whole thing,” readers of Tom Wolfe’s “The Bonfire of the Vanities” are told. Yet, by today’s standards, the deal in question appears rather straightforward.
http://news.yahoo.com/s/ft/20081030/bs_ft/fto103020081351559282

**** This is an excellent analysis.

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MF Global Rebuffs Partnership Offer From Interactive Brokers
MF Global Ltd., the derivatives broker whose chief executive officer quit this week, rebuffed a partnership offer by Interactive Brokers Group Inc., saying it didn’t fit with the company’s future plans. Interactive Brokers CEO Thomas Peterffy offered MF Global his company’s trading and risk-management systems in return for the use of the broker’s sales force, a partnership known as an introducing-broker arrangement. MF Global, whose stock skidded almost 90 percent this year, rejected the offer days after receiving Peterffy’s letter this week. “It has no validity for our business model,” MF Global spokeswoman Diana DeSocio said, declining further comment. Peterffy declined to comment on MF Global’s reaction.

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French priest responsible for locating 800 Holocaust mass graves to speak at fundraising dinner in Chicago
Six million Jews were killed during the 1933-1945 Holocaust. Today, one man is devoting his life to bringing them justice. The Rev. Patrick Desbois, a French Catholic priest, has spent the past seven years traveling through Ukraine in an effort to locate every mass grave of Holocaust victims.
…He will be introduced by former Chicago Mercantile Exchange Chairman Leo Melamed. When Melamed was 8 his family fled Poland to escape the Nazis, according to the museum.
http://news.medill.northwestern.edu/chicago/news.aspx?id=103047

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Debt Markets in U.S., Europe Suffer Worst Month on Record
Corporate debt markets in the U.S. and Europe endured their worst month as the credit crisis spread beyond financial firms to industrial companies amid the prospect of a global recession.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a6xgAnuHRaXo&refer=home

Crude heads for worst monthly Nymex decline
Oil prices slipped below $65 a barrel Friday, heading for what will likely become the sharpest monthly decline in crude prices since futures trading began on the New York Mercantile Exchange.
http://news.yahoo.com/s/ap/20081031/ap_on_bi_ge/oil_prices;_ylt=AtwPc7_OTIgAHCvhx2TSwTJu24cA

**** Not a good month.

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In the eye of the storm
Have chief financial officers ever mattered more—or been less prepared?
http://www.economist.com/business/displaystory.cfm?story_id=12516536

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More Homeowners Have Mortgage Higher Than House Is Worth as Prices Plunge
Almost 20 percent of U.S. mortgage borrowers owed more on their loans in the third quarter than their house was worth as foreclosures depressed prices and the economy weakened, according to First American CoreLogic.
http://www.bloomberg.com/apps/news?pid=20601213&sid=aYyk2_TLjGao&refer=home

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Gold May Pay Only in Case of Maximum Despair: Jane Bryant Quinn http://www.bloomberg.com/apps/news?pid=20601212&sid=ae.xb05JePEE&refer=home

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Politics Flunks Test as Stock-Market Predictor: Caroline Baum
http://www.bloomberg.com/apps/news?pid=20601039&sid=attZrqehx.3Y&refer=home

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The first wiki president? Obama adviser votes ‘yea’
Even Republicans will probably concede that Barack Obama’s campaign made good use of the Internet in the last year. Now an advisor is saying that an Obama administration would do the same, even turning to wikis to discuss topics like privacy.
http://news.cnet.com/8301-13578_3-10079575-38.html

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Jobs, Jobs, Jobs

On MarketsWiki we have a Jobs Posting page (http://www.marketswiki.com/mwiki/Job_Postings), as many of you know. We would like to add more job postings to that page. If you have jobs you are looking to fill, please email me back with details and web links for the listings.

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You don’t wan to know

You don’t want to know why the bottles of Listerine have disappeared from the members’ trading floor level washroom at the CME Group’s Chicago Board of Trade Building. Nor do you want to know why they removed all the doors to the stalls. It is ugly beyond belief and another reason by trading electronically is growing in popularity at the CME Group.

Lead Stories

LCH.Clearnet and LIFFE agree new clearing arrangement
LCH.Clearnet Ltd (“LCH.Clearnet”) has signed a new clearing arrangement with LIFFE, the international derivatives market of NYSE Euronext (NYX), further to LIFFE’s announcement of 25th March 2008.
http://www.lchclearnet.com/media_centre/press_releases/2008-10-31.asp

NYSE EURONEXT ENTERS INTO NEW CLEARING ARRANGEMENTS WITH LCH.CLEARNET LIFFECLEAR
SERVICE ANTICIPATED TO COMMENCE FIRST QUARTER
2009 NYSE Euronext (NYX) today announces that its derivatives subsidiary, LIFFE Administration & Management (“LIFFE”), is to take full responsibility for clearing activities in its London market, subject to regulatory approval, with the target of beginning operations in the first quarter of 2009.
http://www.nyse.com/press/1225448189370.html

Liffe to self-clear from Q1 next year
To terminate its LCH.Clearnet clearing contract the London-based derivatives exchange owned by Nyse Euronext will make a one-time payment of EUR260 million. Liffe will become a self-clearing Recognised Investment Exchange, but will still outsource certain clearing functions to LCH.Clearnet. The new clearing arrangement will be known as LiffeClear.
http://tinyurl.com/5skohv

NYSE Euronext pays 260 mln euros to amend clearing deal
NYSE Euronext plans to launch an in-house clearing service for its European derivatives exchange in the first quarter of next year, paying LCH.Clearnet EUR260 million to shrink their existing trade-processing arrangement.
http://www.marketwatch.com/news/story/NYSE-Euronext-pays-260-mln/story.aspx?guid={10B93D5A-6AF3-491C-84BE-143D874792F0}

DTCC May Raise Credit-Default Swap Disclosure Amid Criticism
The Depository Trust & Clearing Corp., which operates a central registry for the $55 trillion credit- default swap market, may agree to disclose more data to counter criticism the derivatives amplified the financial crisis.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a1lF5ibQBk9w&refer=home

Wall Street ‘made rod for own back’
Wall Street unwittingly created one of the catalysts for the collapse of Bear Stearns, Lehman Brothers and American International Group by backing new bankruptcy rules that were aimed at insulating banks from the failure of a big client, lawyers and bankers say. The 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company’s assets until a court decides how to apportion them among creditors.
http://www.ft.com/cms/s/85790440-a6c3-11dd-95be-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F85790440-a6c3-11dd-95be-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus

Bankers’ Bonuses, Acquisitions Violate Federal Bailout Program, Frank Says http://www.bloomberg.com/apps/news?pid=20601087&sid=a8qoddHX5Yiw&refer=home

Niederauer and Greifeld Anticipate New Short-Sale Rule
The heads of the two biggest exchange groups are reconciled to a new short-sale rule, even though neither considers it necessary.
http://www.tradersmagazine.com/news/102376-1.html

Credit crisis to spur futures market oversight
U.S. lawmakers’ zeal for new regulations will soon spread beyond the battered financial sector to futures markets as a newly elected Congress pounces on the credit crisis to expand government oversight.
http://www.reuters.com/article/reutersEdge/idUSTRE49T6GE20081030

MPs split over action on commodity speculators.
The Treasury Select Committee has no plans to follow up on a fledgling investigation into the role of speculators in driving up food and fuel prices. Meanwhile US politicians are renewing efforts to scrutinise futures markets and their influence on commodity prices.
http://www.trustnet.com/general/news/display-story.aspx?scope=general&id=33271

Treasury, FDIC Consider $500 Billion to Back Mortgages, Slow Foreclosures
The U.S. Treasury and the Federal Deposit Insurance Corp. are considering a program that may offer about $500 billion in guarantees for troubled mortgages to stem record foreclosures, people familiar with the matter said.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aPFaqO.S_m.g&refer=exclusive

Senator Jack Reed queries SEC, NY Fed on CDS market
Senator Jack Reed asked the head of the Securities and Exchange Commission to clarify what authority he would like the SEC to have in overseeing the credit derivatives market.
http://www.reuters.com/article/marketsNews/idUSN3029818120081030

Taming derivatives
It’s conventional wisdom that credit default swaps – the $55 trillion in derivatives contracts widely blamed for bringing down AIG – need oversight. But as Washington debates how to regulate what Senator Tom Harkin (D-Iowa) calls “casino capitalism,” exchanges like the CME and NYSE are proposing their own free-market solution.
http://money.cnn.com/2008/10/28/magazines/fortune/CDSclearinghouses_demos.fortune/?postversion=2008103010

Fed `Hopeful’ Clearinghouses May Begin in November (Update1)
Oct. 31 (Bloomberg) — The Federal Reserve Bank of New York said it’s “hopeful” that one or more credit-default swap clearinghouses will begin guaranteeing trades in November or December as it pushes dealers to reduce market risks. The New York Fed had set a deadline today for U.S. futures exchanges, including one backed by dealers, to submit written plans on how they’ll curb risks in the more than $47 trillion market, four people familiar with the discussions said earlier this week. Intercontinental Exchange Inc. and CME Group Inc. are among companies vying to create clearinghouses that would back trades and absorb losses in the event a dealer defaults. If well-managed, a clearinghouse “will reduce the systemic risk associated with counterparty credit exposures,” the New York Fed said in a statement today.

How Credit Default Swaps Spread Financial Rot
If bad mortgages got the financial system sick, credit default swaps helped spread the illness worldwide.
http://www.npr.org/templates/story/story.php?storyId=96333239

French trader probed over massive bank loss
A French judge has opened an investigation into a possible breach of trust by a dealer suspected of losing a bank more than 750 million euros in unauthorised trading in derivatives, judicial officials said Thursday.
http://news.yahoo.com/s/afp/20081030/bs_afp/financeeconomybankingfrancecompanycaisse_081030212838;_ylt=Ai9BK6yLEo2oP5l24fldHUymOrgF

A substitute for the ‘gold ring’ of partnership
For generations, most Wall Street and City of London investment banks were clubby institutions, usually partnerships where gentleman bankers worked as a team and shared the resulting profits. That changed in the 1970s and 1980s as top US institutions such as Morgan Stanley and Merrill Lynch either sold shares to the public or were acquired by retail banks that were publicly traded.
http://www.ft.com/cms/s/efc161be-a621-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fefc161be-a621-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Refco’s Tone Grant Begins 10-Year Sentence for Fraud
Former Refco Group Ltd. President Tone Grant, a decorated U.S. Marine Corps veteran, entered a U.S. prison to begin serving a 10-year sentence for defrauding investors of $2.4 billion in an eight-year accounting scheme.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amSDPUaFV6Ak&refer=home

Environmental Trading News

Italy Denounces EU Cost Estimate of Hitting Climate Change Goal
The Italian government attacked the European Commission’s calculations of what it will cost the 27 members of the European Union to fight climate change, demanding “changes” to a package that doesn’t take into account an imminent recession.
http://www.bloomberg.com/apps/news?pid=20601130&sid=aT6iLjviY4ds

‘Carbon trading’ now big business
While recent months have seen a global contraction in both debt and equity markets, at least one financial market has been booming this year, a market that scarcely existed five years ago. The global market for “carbon trading” grew 36 percent between January and September, to $84 billion from $67 billion, according to New Energy Finance, a London-based company that tracks activity in energy markets. By year’s end, the market is expected to surpass $100 billion.
http://www.post-gazette.com/pg/08304/923931-28.stm

Office-Related Carbon Emissions Surge
Despite ongoing efforts to improve energy efficiency in the workplace, the world’s growing reliance on the Internet is leading to a rapid increase in greenhouse gas emissions.
http://www.enn.com/sci-tech/article/38545

Australia May Have `Substantial’ Demand for UN Carbon Credits
Australia may have “substantial” demand for United Nations-certified carbon credits created in developing countries to help meet greenhouse gas reductions targets, said law firm Baker & McKenzie.
http://www.bloomberg.com/apps/news?pid=20601130&sid=aYz4XJakSR0E

ATA Chief Executive Criticizes European Aviation Emissions Trading Scheme
The Air Transport Association of America (ATA), the industry trade organization for the leading U.S. airlines, today expressed harsh opposition to the European Parliament’s Oct. 24 final approval of legislation covering the world’s airlines under the European Emissions Trading Scheme (ETS).
http://www.amtonline.com/article/article.jsp?siteSection=1&id=6682

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

BATS Europe Goes Live – Efficient, Low Latency System Launches Ahead Of Schedule
BATS Trading Limited (BATS Europe), a fully-owned subsidiary of BATS Holdings, Inc., announces live trading on its Multilateral Trading Facility in Europe.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78509

NYSE Euronext Announces Third Quarter 2008 Financial Results
NYSE Euronext (NYX) today reported net income of $174 million for the quarter ended September 30, 2008, or $0.66 per diluted share (including $0.65 from continuing operations and $0.01 from the discontinued operations of GL Trade) as compared to net income of $258 million, or $0.97 per diluted share, for the quarter ended September 30, 2007. Included in the results of operations for the quarter ended September 30, 2007 was a $32 million gain on the sale of the member firm regulatory functions of NYSE Regulation to FINRA, and a $55 million deferred tax benefit related to an enacted reduction of the UK corporate tax rate from 30% to 28%. These results are presented in accordance with U.S. generally accepted accounting principles (GAAP).
http://www.nyse.com/press/1225361953301.html

NYSE Euronext Profit Falls as Derivative Trades Slow (Update2)
NYSE Euronext, the world’s largest owner of stock exchanges, said third-quarter profit declined 33 percent after it cut fees and trading slowed on the European derivatives market.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amapHzoOF1ro&refer=home

Distaste For Derivatives Hits NYSE Euronext
LONDON – The subprime crisis has created a distaste for derivatives, those complex financial products whose value is based on an underlying asset like a mortgage, commodity or interest rate, and NYSE Euronext has been feeling the after-effects in Europe.
http://www.forbes.com/markets/2008/10/31/derivatives-euronext-decline-markets-equity-cx_vr_1031markets13.html

NYSE Euronext to axe 200 European jobs
http://www.efinancialnews.com/investmentbanking/index/content/3352342712

CME rival takes lead in swaps race
IntercontinentalExchange Inc. agreed Thursday to buy Chicago-based Clearing Corp., a move that puts CME Group at a disadvantage as the two futures exchanges vie for pole position in the $55 trillion credit default swaps market.
http://www.chicagotribune.com/business/chi-fri-ice-cme-oct31%2C0%2C4656517.story

ICE deal signals new clearing house for credit default swaps
IntercontinentalExchange, the US-based electronic futures exchange, yesterday raised the stakes in its effort to expand in the $54,000bn credit default swap market by announcing a deal to take over The Clearing Corporation (TCC), the bank-operated clearing house. The move is the latest salvo in a battle between ICE and the CME Group, the world’s largest futures exchange, to develop central counterparty clearing infrastructure for the CDS market.
http://www.ft.com/cms/s/60facd78-a6ec-11dd-95be-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F60facd78-a6ec-11dd-95be-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

CME remains confident in long-term growth prospects
Trading volume in CME Group Inc.’s core interest rate futures complex continued to slide in the third quarter of 2008, dragging down total volumes and contributing to a 16% decline in net income for the Chicago exchange company. Interest rate futures volumes have been on the decline since the beginning of the year, and CME Chief Executive Craig Donohue continued to describe the drop as “cyclical in nature.”
http://www.marketwatch.com/news/story/cme-remains-confident-long-term-growth/story.aspx?guid=%7BECD384D2-A970-4FA5-9959-FD97C63650B2%7D&dist=msr_1

CME suffers from pullback in derivatives trading
The CME Group, the world’s biggest futures exchange, said yesterday that its third-quarter profits were up slightly from the same period last year as growth in the derivatives trade was hit by falling volumes from financial institutions damaged by the crisis.
http://www.ft.com/cms/s/0/ee8a40bc-a622-11dd-9d26-000077b07658.html

GFI Group Inc. Announces the Retirement of Head of E-Commerce
GFI Group Inc. an inter-dealer brokerage, market data, trading platform and analytical software provider specializing in over-the-counter derivatives products and related securities, announced today the retirement of Jurgen Breuer, Head of E-Commerce, effective October 31, 2008. The Company noted that Mr. Breuer is stepping down for health reasons.
http://www.marketwatch.com/news/story/GFI-Group-Inc-Announces-Retirement/story.aspx?guid=%7BAEE3DCBF-2D95-41B3-B6D1-016703B8E850%7D

GFI Group Inc. Announces Third Quarter 2008 Results; Implements Restructuring Initiative; Declares Quarterly Cash Dividend
http://www.marketwatch.com/news/story/GFI-Group-Inc-Announces-Third/story.aspx?guid=%7B33573A50-6D25-4ED9-AE71-84717E15694C%7D

GFI Group shares plunge on Q3 loss, lower outlook
GFI Group Inc’s shares plunged as much as 28 percent to a 52-week low Friday, a day after the inter-dealer broker posted a quarterly loss, forecast lower fourth-quarter revenue and said it cut jobs.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/31/afx5633455.html

LSE names former Lehman banker as dark pool head
London Stock Exchange on Thursday appointed former Lehman banker John Wilson as chief executive of Baikal and promised to announce a revised plan for the pan-European non-display, or ‘dark pool’, platform in a few weeks.
http://sg.news.yahoo.com/rtrs/20081030/tbs-lse-baikal-7318940.html

New Record Set On FORTS
On October 30, 2008 on the Futures and Options on RTS market (FORTS) a number of trades on futures contracts hit record high.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78502

Russia’s Micex Volume Tumbles as 23 Halts Send Trade to London
The value of shares traded on the Micex Stock Exchange, Moscow’s biggest by volume, fell by two- thirds after stock prices slumped and investors turned to London to trade Russian equities as the bourse halted trading 23 times.
http://www.bloomberg.com/apps/news?pid=20601085&sid=axEvWzhWU5Ts

Deutsche Börse Makes Additions to Guide to Equity Indices
The Executive Board of Deutsche Börse AG in consultation with the Working Committee for Equity Indices today decided to make additions to the Guide to Equity Indices effective as per 3 November 2008.
http://deutsche-boerse.com/dbag/dispatch/en/notescontent/gdb_navigation/press/10_Latest_Press_Releases/INTEGRATE/mr_pressreleases?notesDoc=845F4466CA993C02C12574F3004E346C&newstitle=deutscheboersemakesadditionsto&location=press

NYSE Welcomes the Listing of Eletrobrás, S.A.
The New York Stock Exchange today welcomed the listing of Centrais Elétricas Brasileiras S.A. (Eletrobrás), a leader in the Latin American energy sector. Brazil-based Eletrobrás listed its American Depositary Shares on the NYSE under the ticker symbols “EBR” and “EBR.B”.
http://www.nyse.com/press/1225189883403.html

Bolsas y Mercados Españoles’ Net Profit In The First Nine Months Of 2008 Totals 145.5 Million Euros – Solid Results In Difficult Circumstances
Bolsas y Mercados Españoles (BME) posted a net profit of €145.5 million in the first nine months of 2008, a solid performance given the difficult moment for financial markets. The figure represents a 3.4% decrease from the same period a year earlier and a 57.9% increase from the same nine-month period in 2006. It also exceeds by 11.5% the net profit for the entire year of 2006.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78506

Malawi Stock Exchange Weekly Report
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78510

MCX Weekly Market Report – October 31, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78503

ASX: Review of Trading by Directors Q3 2008
http://www.asx.com.au/about/pdf/mr_311008_review_director_trading_oct08.pdf

Shanghai Futures Exchange October 2008 Daily Volume and Open Interest (Chart)
http://groups.google.com/group/chinaheadlines/web/shanghai-futures-exchange-october-2008-daily-volume-and-open-interest-chart

FORTS: Deployment Of New Version Of The Trading System
Due to implementation of the new version of the trading system, there will be no evening session held on FORTS on November 1st, 2008, Saturday.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78501

HKEx: Report On Initial Public Offering Applications, Delisting Proceedings And Suspensions(As At 31 October 2008)
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78507

Days When Swedish Financial Supervisory Authority (Finansinspektionen) Is Closed
http://www.exchange-handbook.co.uk/index.cfm?section=news

Eurex: Migration to the TARGET2 Payment System: Another Simulation http://www.eurexchange.com/download/documents/circulars/cf2672008e.pdf

eGains Service: Supported by Eurex Clearing AG
http://www.eurexchange.com/download/documents/circulars/cf2662008e.pdf

Q-Cells AG: Name Change
http://www.eurexchange.com/download/documents/circulars/cf2652008e.pdf

Instruments in Cash Market CCP – Amendments
http://www.eurexchange.com/download/documents/circulars/cfni1002008e.pdf

RTS Stock Exchange: Odd Lot Trading Session Transferred
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78504

Tokyo Grain Exchange: The Daily Price Limits For Nov. 4, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78508

ICE Futures Canada: 2008 Christmas/New Year’s Trading Schedule – Futures And Options Markets
http://www.exchange-handbook.co.uk/index.cfm?section=news

Brokers & Dark Pools

DTCC passes Lehman hurdle
A major hurdle in the clean-up after the default of Lehman Brothers was overcome yesterday when The Depository Trust & Clearing Corporation, the vast US post-trade services group, said it had “successfully closed out” over $500bn in market participants’ -exposure from the bank’s collapse.
http://www.ft.com/cms/s/0/a848f63e-a6ea-11dd-95be-000077b07658.html

MF Global Appoints Avram Kornberg as Chief Information Officer
MF Global Ltd. (NYSE: MF), a leading broker of exchange-listed futures and options, has appointed Avram Kornberg, 49, as its new chief information officer.
http://www.mfglobalinvestorrelations.com/phoenix.zhtml?c=194911&p=irol-newsArticle&ID=1220412&highlight=

Do the brokey-cokey
Where will hedge funds put their business in future?
IN, OUT, shake it all about. The fall of Bear Stearns earlier this year persuaded many hedge funds to switch to Goldman Sachs and Morgan Stanley as their prime brokers. The two firms are the industry leaders in the (once) lucrative business of providing hedge funds with financing, lending them shares for short-selling purposes, settling trades and housing fund assets. Lots more switched again once Lehman Brothers went bankrupt in September. This time, the flow was towards the banks, as hedge funds realised that the broker-dealer model was much wobblier than they thought. JPMorgan Chase, now the owner of Bear, has seen a 25% rise in prime-brokerage assets over the past few weeks.
http://www.economist.com/finance/displaystory.cfm?story_id=12465393

AIG’s credit default swaps shows rescue skepticism: JPMorgan
A rise in credit default swaps on American International Group (AIG.N: Quote, Profile, Research, Stock Buzz) debt indicates the market may be skeptical about a government program to support the insurer, JPMorgan said on Friday.
http://www.reuters.com/article/ousiv/idUSTRE49U5GF20081031

Barclays looks to Middle East for £7.3bln cash boost
Barclays said on Friday it would raise 7.3 billion pounds, most of it from oil-rich investors in Abu Dhabi and Qatar, to bolster finances amid the global credit crunch.
http://news.yahoo.com/s/afp/20081031/bs_afp/financeeconomybritainbankingcompanystructure_081031134441

Barclays raises $12 billion, sources say
CoBa may tap state Barclays tapped Middle East investors for the bulk of its 7.3 billion pounds ($12.1 billion) cash injection, while sources familiar with the situation said Commerzbank is interested in German state funds.
http://news.yahoo.com/s/nm/20081031/bs_nm/us_financial_barclays_commerzbank_2

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig103108.htm

Market Downturn Triggers Wave of Lawsuits
When Jacob Froess’ certificate of deposit from AmTrust Bank matured, he went to a Florida branch of the Cleveland-based retail bank in October 2007 to put $70,000 into another CD. But a teller suggested the 56-year-old auto mechanic in Plantation speak instead with a financial adviser from the brokerage AmTrust Investment Services Inc. The adviser allegedly said rates on CDs were low and that if Froess bought shares in a Mutual Series Mutual Discovery fund, he would make more money.
http://www.thestreet.com/story/10445370/1/market-downturn-triggers-wave-of-lawsuits.html?puc=_tscrss

SEC Charges Lazard Capital Markets, Former Employees For Improper Gifts And Entertainment To Fidelity Employees
The Securities and Exchange Commission today charged privately-held, registered broker-dealer Lazard Capital Markets LLC with failing to supervise three employees who collectively spent more than $600,000 while improperly entertaining traders at Fidelity Investments in an effort to generate brokerage business. The SEC also charged the three employees and a supervisor for their roles in securities laws violations by Fidelity traders.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78495

CESR delivers its response to the European Commission’s request for assistance on the UCITS management company passport
CESR publishes today its advice to the European Commission (Commission) on the UCITS management company passport (Ref. CESR/08-867). The advice follows a short public consultation carried out in the first half of October, as well as a call for evidence published in July. CESR also held an open hearing at its premises on 13 October.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78512

SEC, NASAA Announce IARD System Fee Waiver
The Securities and Exchange Commission and the North American Securities Administrators Association (NASAA) today announced they will waive the initial set-up and annual system fees paid by investment adviser firms to maintain the Investment Adviser Registration Depository (IARD) system. Separately, NASAA announced that for next year it will also waive those system fees paid by investment adviser representatives (IARs).
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78494

SEC Sues Miami Resident For Conducting Multi-Million Dollar Ponzi Scheme
The Securities and Exchange Commission today charged Miami resident Andres L. Pimstein and two private companies, The Bottom Line of South Florida, Inc. and Summit Trading LLC, with securities fraud for conducting a $30 million Ponzi scheme.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78493

“Commentary”-Now May Be The Time For Commission Consolidation
http://www.pbs.org/nbr/site/onair/transcripts/081030f/

ASIC facilitates withdrawals from frozen funds
ASIC today announced measures that will facilitate operators of mortgage funds providing early withdrawal for members where there is hardship.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/08-214%20ASIC%20facilitates%20withdrawals%20from%20frozen%20funds?opendocument

ASIC issues report on relief applications
ASIC today released a report outlining recent decisions on applications for relief from the corporate finance, financial services and managed investment provisions of the Corporations Act (the Act) between 1 April and 31 July 2008.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-48%20ASIC%20issues%20report%20on%20relief%20applications?opendocument

New account switching service
Switching bank accounts to get a better deal is now easier following the introduction today of a new account switching service. ASIC Chairman, Mr Tony D’Aloisio, said Authorised Deposit-taking Institutions (ADIs), which include banks, credit unions and building societies, would now provide account-switching services to consumers that are switching their personal transaction accounts.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/08-213%20New%20account%20switching%20service?opendocument

ASIC bans Melbourne man from managing corporations for three years
ASIC has disqualified former Melbourne lawyer Mr Michael Richard Brereton from managing corporations for three years.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-47%20ASIC%20bans%20Melbourne%20man%20from%20managing%20corporations%20for%20three%20years?opendocument

SEBI passes Consent Orders in the matter of IPO irregularities
http://www.sebi.gov.in/press/2008/2008242.html

Investments – Indexes – Managed Futures – Managed Funds

Citadel winds down $1bn fund of hedge funds
Citadel Investment Group, the alternative investment house, is winding down its $1bn fund of hedge funds and redeploying the capital to support new hedge funds as they emerge in the coming months. The move suggests Citadel is positioning itself to back managers who have exited the business or been forced to shut their funds in recent weeks as they launch new funds in the coming months.
http://www.ft.com/cms/s/25f86546-a6ec-11dd-95be-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F25f86546-a6ec-11dd-95be-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Reserve Management Starts Mailing $26 Billion to Primary Fund Investors
Reserve Management Corp. began mailing $26 billion in checks to Reserve Primary Fund retail direct shareholders today, more than initially planned, and will wire money to all other shareholders tomorrow as it liquidates and returns cash to investors.
http://www.bloomberg.com/apps/news?pid=20601213&sid=a3NVJshFMPf4&refer=invest

Hedge funds working to limit redemptions
Dozens of hedge funds have told investors they cannot get their money back right now as managers try to limit a wave of redemptions to safeguard all their clients’ investments — as well as their own futures.
http://www.reuters.com/article/hedgeFundsNews/idUSLNE49U02T20081031

31 Rydex ETFs List on NYSE Arca
NYSE Euronext (NYX) announced that its fully-owned subsidiary NYSE Arca today began trading 31 Rydex Exchange Traded Funds (ETFs) on a listed basis after the group transferred listing from NYSE Alternext US (formerly, the American Stock Exchange).
http://www.nyse.com/press/1225361945023.html

JP Morgan Chase & Co. KEYnotes Exchange Traded Notes Linked to the First Trust Enhanced 130/30 Large Cap Index (JFT) Lists on NYSE Arca NYSE Euronext (NYX) announced that its fully-owned subsidiary
NYSE Arca today began trading the JP Morgan Chase & Co. KEYnotes Exchange Traded Notes Linked to the First Trust Enhanced 130/30 Large Cap Index (“JFT”) on a listed basis after the ETN transferred listing from NYSE Alternext US (formerly, the American Stock Exchange).
http://www.nyse.com/press/1225361945075.html

Two Barclays Exchange Traded Notes List on NYSE Arca
NYSE Euronext (NYX) announced that its fully-owned subsidiary NYSE Arca today began trading two Barclays Exchange Traded Notes (“ETNs”) – iPath® CBOE S&P 500 BuyWrite Index ETN (NYSE Arca: BWV) and Barclays GEMS IndexTM ETN (NYSE Arca: JEM) on a primary listed basis. The ETNs joined NYSE Arca as a transfer from NYSE Alternext US (formerly the American Stock Exchange).
http://www.nyse.com/press/1225361953226.html

Small-Caps Trail S&P 500 by Most in 6 Years on Record Sales by Hedge Funds
The smallest U.S. companies are trailing larger stocks by the widest margin in six years after hedge funds sold equities to pay back customers.
http://www.bloomberg.com/apps/news?pid=20601213&sid=aqAeiu7RNS0Y&refer=invest

New Exchange Traded Funds (ETFs) on the SIX Swiss Exchange
http://www.swx.com/media_releases/online/media_release_200810311309_en.pdf

Search Is on for Iceland-Like Hedge Fund in Asia: William Pesek
http://www.bloomberg.com/apps/news?pid=20601039&sid=a2yu_u8yY0To&refer=home

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Scuffle in HK protest over Lehman-linked products
Investors in financial products linked to collapsed U.S. investment bank Lehman Brothers Holdings Inc. scuffled with security guards at a bank in Hong Kong on Friday, as some 200 people protested in the financial district against institutions that sold the now worthless products.
http://news.yahoo.com/s/ap/20081031/ap_on_bi_ge/as_hong_kong_lehman_protest_2

Consumer body mulls Lehman lawsuit
The Consumer Council is contemplating helping investors who have purchased Lehman minibonds take legal action to protect their interests.
http://www.chinadaily.com.cn/hkedition/2008-10/31/content_7160507.htm

ZCE Set PTA Futures Trading Volume Record On Oct. 30, 2008, the trading volume in the Pure Terephthalic Acid (PTA) futures contract on ZCE ( Zhengzhou Commodity Exchange ) peaked at 494086 contracts, surpassing the previous record of 480490 contracts set on Aug.5, 2008.
http://english.czce.com.cn/News.aspx?newspath=news/20081031151122.html

CSRC joins probe into CITIC Pacific debt
The China Securities Regulatory Commission has joined hands with the local watchdog to investigate the foreign currency debt exposure of CITIC Pacific (0267), a mainland paper reported.
http://www.thestandard.com.hk/breaking_news_detail.asp?id=8843&icid=1&d_str=20081031

HK’s CITIC Pacific share suspended -HKex
Trading in shares of CITIC Pacific (0267.HK: Quote, Profile, Research, Stock Buzz) was suspended on Friday after local media reported China’s securities watchdog will join Hong Kong authorities to investigate suspected unauthorised currency trading.
http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSHKG1326720081031

Taiwan eyes financial cooperation agreement with China
Financial officials from Taiwan and China will meet for the first time in Taipei next week to discuss various cross-Taiwan Strait financial issues, including the signing of a memorandum of understanding for cooperation on financial regulation and supervision, officials said Thursday.
http://www.etaiwannews.com/etn/news_content.php?id=776906

Taiwan FSC adjusts risk-based capital rules for insurance cos
The Financial Supervisory Commission (FSC) said it will adjust risk-based capital rules for insurance companies to help the industry better deal with the current round of financial turbulence.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/30/afx5629782.html

Guru Jim Rogers headlines Citigold series in KL
CITIGOLD is teaming up with world-renowned commodities guru, Jim Rogers, to host the Citigold Wealth Management Leadership Series on Saturday, August 23, at the Mandarin Oriental, Kuala Lumpur. This will be Rogers’ first public appearance in Malaysia.
http://www.btimes.com.my/Current_News/BTIMES/articles/citigold_xml/Article/

Frontier Markets

Edited by Robert Luke, robertluke@johnlothian.com

EMERGING MARKETS – BANK LIQUIDITY
Fed pumps liquidity into emerging-market countries The Daily Deal The Federal Reserve is extending a helping hand to the central banks in four emerging-market countries as it takes its efforts to unfreeze money markets on the road. The Fed is opening four $30 billion liquidity swap facilities with the central banks of Brazil, Mexico, South Korea and Singapore until April 30, giving each country access to dollars at close to the same rates that G-7 countries enjoyed until the credit crunch turned into a credit crisis. European Union countries received unlimited access to dollars on Oct. 13.
http://www.thedeal.com/dealscape/2008/10/fed_lends_a_helping_to_emergin.php
*RL – Consequently…

Emerging-Market Bonds Advance as Stocks Rally Bolsters Demand
Bloomberg Emerging-market bonds gained for fourth day as a rally in global stocks boosted the appeal of higher-yielding assets. Demand for developing-nation debt also picked up after the Federal Reserve agreed to provide $90 billion to central banks in Brazil, Mexico, South Korea and the International Monetary Fund doubled borrowing limits for emerging-market countries.
http://www.bloomberg.com/apps/news?pid=20601086&sid=awOoJs73nf8E&refer=news
*RL – And yet…

Sell Emerging-Market Currencies on Rally, Morgan Stanley Says Bloomberg
The recovery in emerging-market currencies is temporary and investors should sell on rallies and hedge against further weakness, according to Stephen Jen, Morgan Stanley’s global head of currency research. Interest-rate reductions by central banks around the world, liquidity injections and currency swap facilities may not be enough to ward off a global recession, Jen said in a research note yesterday.
http://www.bloomberg.com/apps/news?pid=20601091&sid=aliC2lCYqmhs&refer=india

AFRICA – BANKING INDUSTRY
Sh240 billion rescue plan for African banks Business Day (Nigeria) The World Bank is preparing a multi-billion shilling package to help cushion banks in African countries from effects of the raging global financial crisis that has led to the collapse of major banks in US and Europe.
http://www.bdafrica.com/index.php?option=com_content&task=view&id=10967&Itemid=5812

EASTERN EUROPE – CURRENCY CRISIS
Panic Strikes East Europe Borrowers as Banks Cut Franc Loans Bloomberg Imre Apostagi says the hospital upgrade he’s overseeing has stalled because his employer in Budapest can’t get a foreign-currency loan. The company borrows in foreign currencies to avoid domestic interest rates as much as double those linked to dollars, euros and Swiss francs.
http://www.bloomberg.com/apps/news?pid=20601095&sid=awd1vGnyyBJQ&refer=east_europe
*RL – Story later adds: “Foreign-denominated loans helped fuel eastern European economies including Poland, Romania and Ukraine, funding home purchases and entrepreneurship after the region emerged from communism. The elimination of such lending is magnifying the global credit crunch and threatening to stall the expansion of some of Europe’s fastest-growing economies.”

MIDDLE EAST – BANK LIQUIDITY
Liquidity crunch prompts outlook cut for Gulf banks Arabian Business Standard & Poor’s has cut the outlook on five Gulf banks, among them Emirates NBD, the biggest Gulf bank by assets, and major Islamic lender Kuwait Finance House, as the global turmoil hit the region.
http://www.arabianbusiness.com/536629-liquidity-crunch-prompts-rating-change-for-gulf-banks

Fears after run on Kuwait bank
The outlook for Kuwait’s banking system is shifting towards negative for the first time in a decade, Moody’s rating agency said yesterday – a sign likely to heighten concerns about potential weaknesses in the nation’s financial services. The Moody’s report comes days after a run on Gulf Bank, Kuwait’s second-largest commercial bank, following revelations that it had incurred significant losses as a result of derivatives trading.
http://www.ft.com/cms/s/7f90db24-a6ec-11dd-95be-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F7f90db24-a6ec-11dd-95be-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

MCX may launch stock exchange
New Delhi: After launching carbon trading and currency futures, the Multi Commodity Exchange (MCX), a leading Indian bourse, has secured the nod from markets watchdog Securities and Exchange Board of India (SEBI) to start stock exchange operations in the country.
http://sify.com/finance/fullstory.php?id=14787678

Futures market flooded with illiquid contracts
Are Indian commodity exchanges facing a problem of plenty as far as contracts are concerned? If the response to some newly-introduced contracts is any indication, the exchanges are in deep trouble following an increase in illiquid Futures. According to experts, with commodity exchanges introducing new contracts almost every month, the Futures market is flooded with various types of contracts in agriculture, metals and energy. India is perhaps the only country to have over 100 commodities approved for Futures trading.
http://www.commodityonline.com/news/Futures-market-flooded-with-illiquid-contracts-12485-3-1.html

Miscellaneous News

`New Bretton Woods’ Rendezvous Beckoned by Hotel That Hosted the First One
The Mount Washington Hotel in Bretton Woods, New Hampshire, has a message for world leaders: There’s still room at the inn.
http://www.bloomberg.com/apps/news?pid=20601109&sid=asA0zVAoz4cA&refer=exclusive

Observations – Statistics – Commentary

Dear Readers:

I was stunned this morning to learn of the death of longtime Liffe executive Juliette Proudlove. Juliette passed away last night after battling cancer for some time. Juliette had many titles over the years at Liffe, including head of corporate communications, but first and foremost she was a great person.

It has been my pleasure and joy to have gotten to know her since I started this newsletter and it is with great sadness that I report her passing. My sympathy goes to her family and many friends, especially in this industry.

Below are comments from two people who knew her better than I, Ray Carmichael of Strategics, Inc. and her former Liffe associate Jim Johanik, now with Tradehelm.

Regards,

John J. Lothian

From Ray Carmichael:

Today this industry lost another great friend and colleague, , or as many of us fondly called her, Jools. She was a short woman with a tall stature. She was feisty for the cause yet did it all with a loving heart. She took the knocks for many because she knew it was the right thing to do.

I knew Jools for some twenty-five years yet I know many in the futures industry who knew her longer. I had the honor of working with her and for her and I learned from her what loyalty was all about. Even when she was in the midst of being treated rather roughly, I never heard a disparaging word from her. She lived that great quote, “Damn the torpedoes, full speed ahead.” I have never known anyone with such vigor, spunk, energy and drive who did it all with love and compassion.

Jools lived through the best of times and the worst of times at Liffe. She hired and mentored many and had to give out the pink slips when times were rough. Yet each time I spoke to her about the hard things she had to do, I heard a crack in her voice, holding back the tears and pain that she felt for the people.

A perfectionist at heart, Jools never let you get away with anything but your best. She was dedicated to bringing out the best in each person and program, but she also knew when to let go – a great quality that is hard to learn.

Jools fought for this industry both on the front lines and behind the scene. She loved both the traders and the politicians. She loved the “members” (when there were such things). She knew them all by name and most importantly she knew them as people.

Jools was one who made the system work, and work well. She lived through more corporate iterations than most of us will ever know and always knew how to get the job done even when she wasn’t sure who her next boss was going to be. And as many of us will remember, she did it all with that infectious high pitched laugh and smile.

I know Jools was in a lot of pain towards the end. I last saw her this summer when I was in London for mutual friend’s memorial service. She wasn’t feeling well enough to go to the service so I went out to her house to spend some time with her in her garden. She seemed pretty frail, but when I had to go she walked me to the train station, kissed me on the cheek and said, “See you at Expo”. It won’t be the same without her.

From Jim Johanik:

John, I’m at a loss for words…..

Juliette’s passing is a tremendous loss for me and for anyone who ever had the opportunity to work with her. During my days with LIFFE I will always remember Juliette as a towering personality in a diminutive frame. She was a friend, a loyal professional, and a caring human being who was always more interested in others than herself.

She will be sorely missed.

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From Homeless to Multimillionaire
It’s not every day you get the chance to pick the brain of a man whose real-life rags-to-riches story was turned into a Hollywood movie starring one of America’s top actors. But the other day I had the opportunity to spend time with Chris Gardner, subject of the 2006 movie The Pursuit of Happyness, in which Gardner was played by Will Smith.
http://news.yahoo.com/s/bw/20081030/bs_bw/jul2007sb20070723608918;_ylt=AlHLcY1RSM_u5j9YJMJ4g7OyBhIF

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Today in NYSE History (NYSE.com)
29 Oct. 1929 — “Black Tuesday” – the most dramatic day of the 1929 Crash. The DJIA was off nearly 12 percent on volume of 16 million shares – a record that would stand for decades.
http://www.nyse.com/about/history/1089312755484.html

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Tapped Out?
A $60 million painting by Kazimir Malevich. A $40 million self-portrait by Francis Bacon. It hardly seems the ideal moment to be selling such pricey art. As Sotheby’s, Christie’s and Phillips de Pury brace for their big fall auctions in New York, starting with a sale of 71 Impressionist and Modern paintings, drawings and sculptures at Sotheby’s on Monday night, anxiety is the dominant mood. Only 10 days ago, Sotheby’s reported a loss of $15 million in guarantees — the undisclosed amount that the houses promise to sellers regardless of the outcome of a sale — from recent auctions in Hong Kong and London. Millions of dollars of art went unsold at those September and October sales, with many works going for well below their estimates. Since then auction house officials have been busy trying to get sellers to lower their expectations. Much of the art up for auction this week and next was secured early in the summer, when the world seemed a far different place. Now, with the net worth of so many buyers plummeting, auction houses have been trying to persuade sellers to lower their reserves, that is, the undisclosed minimum price that a bidder must meet for the art to be sold.
http://www.nytimes.com/2008/11/02/arts/design/02voge.html

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GFI Sponsors ‘Stand Up For Heroes’
Supporting Bob Woodruff Family Foundation
http://www.marketwatch.com/news/story/GFI-Sponsors-Stand-Up-For/story.aspx?guid=%7B29BF4ED9-BF52-4A34-9D78-FB20B08E5A1B%7D

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Important Expo Announcement
You Must Register Online for Expo Prior to Monday, November 10 to Attend the Opening Reception! Even though sessions don’t begin until Tuesday, be sure to arrive early on Monday, November 10 to attend the special kick-off reception in the historic Chicago Stock Exchange Trading Room at the renowned Art Institute of Chicago. The reception begins at 6:00 p.m. An RSVP is not necessary, however you must register to attend the Expo (or conference sessions) online prior to Monday, November 10 in order to attend the opening reception. No on-site registration will be available on Monday.
https://www.futuresindustry.org/expo-2008-online-registration.asp

Expo Preview
http://www.futuresindustry.org/downloads/Expo_Preview.pdf

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Orc Software at FIA Futures & Options Expo 2008
Join Orc Software at the 2008 FIA Futures & Options Expo in Chicago, IL from November 10 – 12. The Expo is one of the largest derivatives-focused events in the world with over 4,000 attendees. Orc Software will be discussing Orc Trading, a best-in-class platform for advanced derivatives trading including algorithmic trading and market making throughout the show.

To schedule a meeting or learn more about Orc Software, please contact sales_chicago@orcsoftware.com

To register for an exhibit hall pass from Orc Software and learn more about the FIA Futures & Options Expo, go to
https://www.futuresindustry.org/complimentary-exhibitsonly-pass.asp?spid=2022

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Wall Street’s Jobless Go Back to B-School, This Time to Mix Purple Hooters
Bryan Gunderson tried to master the intricacies of structured-equity investments until he lost his job at JPMorgan Chase & Co. Now he’s learning the subtleties of Purple Hooters.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAUbEhO7AJH0&refer=news

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Lead Stories

IntercontinentalExchange, The Clearing Corporation and Nine Major Dealers Announce New Developments in Global CDS Clearing Solution
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global regulated futures exchanges and over-the-counter (OTC) markets, and The Clearing Corporation (TCC), today announced new agreements intended to advance their previously announced joint global clearing solution for Credit Default Swaps (CDS). Together with nine of the major global investment banks who are dealers in the CDS markets, ICE and TCC have entered into memorandums of understanding (MOUs) to develop a joint global clearing solution and to effect the acquisition of TCC by ICE. Under the terms of the new agreements, ICE will acquire TCC and will form ICE US Trust (ICE Trust), a New York limited purpose trust company and subsidiary of ICE, with the support of Bank of America, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch, Morgan Stanley and UBS. As previously announced, ICE and TCC continue to work closely with regulators, other market participants and industry groups to develop a comprehensive central counterparty clearing solution for the CDS market. This customized solution is currently undergoing final testing in preparation for launch.
http://ir.theice.com/releasedetail.cfm?ReleaseID=344066

Spotlight on role of e-trading in volatility
Hugh Marsden, a London stockbroker since 1960, has seen many bear markets. But the stomach-churning volatility of the past two months is unlike anything he has witnessed before. Now a broker at investment manager Brewin Dolphin, he suspects that electronic trading – and specifically computer-driven algorithmic trading – may be to blame. “I think there’s no doubt that without any human touch you are going to get effects that you cannot necessarily predict,” he says. necessarily predict,” he says. Michael Bloomberg, mayor of New York and founder of the financial information business that made him his fortune, told a securities industry conference this week: “Computers are deciding when to buy and when to sell. When the herd mentality gets automated, the stampede [in and out of markets] gets turbocharged.”
http://news.yahoo.com/s/ft/20081029/bs_ft/fto102920081557599082

Intercontinental to Buy Clearing Corp. in CDS Plan
By Matthew Leising
Oct. 30 (Bloomberg) — Intercontinental Exchange Inc., the second-largest U.S. futures market, will buy the Clearing Corp., its partner in a plan to guarantee trades in the $55 trillion credit-default swap market. Intercontinental has signed memorandums of understanding with the nine banks that own the Clearing Corp., including Bank of America Corp. and Goldman Sachs Group Inc., the Atlanta-based exchange known as ICE said in a statement today. Terms of the acquisition weren’t released. ICE Chief Executive Officer Jeff Sprecher, 53, has increased volume by acquiring exchanges as his company benefits from the energy commodities boom. ICE is vying to guarantee trades in the credit-default swap market after the contracts contributed to the failure of Lehman Brothers Holdings Inc. last month and forced the U.S. government to provide American International Group Inc. with a $123 billion cash infusion.

A Question for A.I.G.: Where Did the Cash Go?
The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.
http://www.nytimes.com/2008/10/30/business/30aig.html?em

Japan announces $275 billion stimulus package
TOKYO – Japanese Prime Minister Taro Aso announced a 27 trillion yen ($275 billion) stimulus package to shore up the world’s No. 2 economy Thursday, vowing to dispel fears over the global financial crisis with expanded credits for small businesses and a cash payback to every household.
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/as_japan_stimulus_package;_ylt=Aga3TXyv5LDgiFfajcGvcIpu24cA

Goldman Sachs ready to hand out £7bn salary and bonus package… after its £6bn bail-out
Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses – despite asking the U.S. government for an emergency bail-out.
http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package–6bn-bail-out.html?ITO=1490

Wall Street Won’t Surrender on Bonuses, Veterans Say (Update1)
Wall Street’s chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a07o5ltdIKLg&refer=us

Debt Protection Costs Plunge on Swap Agreements, Lower Rates
Oct. 30 (Bloomberg) — The cost of protecting Asia-Pacific bonds from default tumbled after the Federal Reserve increased cross-border funding and the U.S., China, Hong Kong and Taiwan cut interest rates to boost economic growth. The benchmark index of credit risk for investment-grade borrowers in Asia outside Japan fell the most since it was created in September 2007. The Markit iTraxx Asia credit-default swap index of 50 borrowers, including Thailand and Hong Kong’s Hutchison Whampoa Ltd., fell 110 basis points to 450, according to ICAP Plc data as of 3:22 p.m. in Hong Kong.
http://www.bloomberg.com/apps/news?pid=20601080&sid=azS9w15coauA&refer=asia

Fed Comes To Rescue Of South Korea
As South Korea ran into a severe scarcity of dollars amid the global credit crisis, the U.S. Federal Reserve lent a helping hand, providing a multibillion-dollar line of liquidity to the country’s central bank. The move will help stem the won’s steep slide, which has made borrowing from abroad more expensive and raised concerns about South Korea’s risk of default.
http://www.forbes.com/markets/2008/10/30/fed-currency-swap-markets-econ-cx_twdd_1030markets3.html

Ex-Fannie Mae chief wishes he said “no” more often: report
Former Fannie Mae Chief Executive Daniel Mudd wished he said “no” to more of the things the company was asked to do, he told the Wall Street Journal in an interview.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_fannie_mudd;_ylt=Ao0lapf6d1A6VcXO0UGSOki573QA

America Needs an Independent Clearinghouse for OTC, CDS
http://seekingalpha.com/article/102576-america-needs-an-independent-clearinghouse-for-otc-cds?nick_was_taken=&additional_ids=294076#comment-294076

Outside risk advice seen as best for central banks
One of the most striking figures contained in this week’s Bank of England’s financial stability report concerns the amount of money central banks and governments have pledged to support funding markets since April: £5,000bn.
http://news.yahoo.com/s/ft/20081029/bs_ft/fto102920081557589080;_ylt=ArA8G_1lDb0oSmQE9Mm6x7L2ULEF

Insight: The CDS sector is not the central villain
Last week saw an important milestone in the credit default swaps sector, when counterparties to CDS trades on Lehman Brothers cash-settled their transactions.
http://www.ft.com/cms/s/0/9e609634-a5d4-11dd-9d26-000077b07658.html

Greenspan Slept as Off-Balance-Sheet Toxic Debt Evaded Scrutiny
As George Miller welcomed 60 bankers to the chandeliered Charlotte City Club one evening in September, the focus was on more than the recent bankruptcy of Lehman Brothers Holdings Inc. From their 31st-floor perch, members of the American Securitization Forum, which Miller leads, fretted about the future of their $10.7 trillion industry.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYJZOB_gZi0I&refer=home

Kass: Private Equity Is the Next Shoe to Drop
The casualty count in the world of finance is about to expand in scope. At the epicenter of the leveraged binge of the last decade were the private equity shops’ “deals.” These firms funded their “products” to individuals, endowments, hedge funds and to other institutions around the world with the promise of turning waste into gold.
http://www.thestreet.com/story/10445033/1/kass-private-equity-is-the-next-shoe-to-drop.html

CBS posts $12.5 billion loss with write-down
CBS Corp reported a massive quarterly loss on Thursday, as a rapidly deteriorating advertising market tarnished the TV and radio broadcaster’s results and the economic crisis prompted it to take a $14 billion non-cash charge.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_cbs;_ylt=AtZNLvM9TlmkXGodpAj0Q26573QA

Exxon Mobil posts biggest US quarterly profit ever
Exxon Mobil Corp., the world’s largest publicly traded oil company, says it shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/earns_exxon_mobil

Shift to cleared trade could unblock oil markets
Exchange-style clearing offers a way forward for the multi-billion dollar over-the-counter market in oil derivatives that has seized up because of the credit crisis.
Volumes of over-the-counter (OTC) trade slumped in September after the crisis in the banking sector made participants nervous about counterparty credit risk.
http://www.guardian.co.uk/business/feedarticle/7956989

The Mais Lecture On ‘Maintaining Stability In A Global Economy’ Given By The UK Chancellor Of The Exchequer At The Cass Business School, London EC1
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78477

NZX Acquires ProFarmer Australia Pty Limited
NZX today announced the acquisition of Australian-based ProFarmer Australia Limited Pty. ProFarmer, established in 1994, is based in Perth, Australia. ProFarmer is Australia’s leading provider of agricultural news, commodity market information and strategic grain market analysis, which it provides to customers via weekly newsletters, market price updates and specialist reports. ProFarmer also provides historical agricultural commodity price data and farm consulting, training and other agri-business services to grain farmers and leading market analysts.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78474

Environmental Trading News

Carbon market’s future hangs in the balance
LONDON, Oct 29 (Reuters) – The future of global carbon markets is finely poised as recession threatens the political will to shoulder costs but New Zealand, Australia and Japan follow Europe with their own cap and trade schemes.
http://www.guardian.co.uk/business/feedarticle/7952434

Study: Cleantech funding hit record $1.6B in Q3
Capital investments in U.S. cleantech companies reached a record $1.6 billion in the third quarter, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. A total of $3.3 billion was invested in the first three quarters of 2008, surpassing the figure for the same period last year by 71 percent, the report said.
http://www.bizjournals.com/baltimore/stories/2008/10/27/daily38.html?ana=from_rss

Govt ‘still considering options’ for emissions trading targets
Prime Minister Kevin Rudd says the Government will look at a range of reduction targets and carbon prices before deciding on a final emissions trading policy later this year.
http://au.news.yahoo.com/a/-/latest/5113239/govt-still-considering-options-for-emissions-trading-targets/

Point Carbon Foresees Major Changes in REC Markets
New Report Explains Impacts of Carbon Caps on Renewable Energy Certificates and Carbon Offset Credits; Offers Recommendations to Buyers, Sellers and Regulators

Emissions trading ‘to cost $1 a day’
Emissions trading will cost households a dollar a day when it starts in 2010. Comprehensive economic modelling released by Treasury on Thursday has painted a rosy picture of how emissions trading will affect the economy and households.
http://au.news.yahoo.com/a/-/latest/5113006/emissions-trading-to-cost-1-a-day/

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

CME Globex Notice
http://view.exacttarget.com/

IntercontinentalExchange Reports Third Quarter 2008 Earnings; Diluted EPS of $1.04, up 12%
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global exchanges and over-the-counter (OTC) markets, reported consolidated net income for the third quarter of 2008 of $75 million, a 12% increase compared to $67 million for the third quarter of 2007. Diluted earnings per share (EPS) in the third quarter were $1.04, up 12% over the prior year’s third quarter of $0.93. Consolidated revenues in the third quarter rose to $201 million, the second highest quarterly revenues in the company’s history and a 33% increase over third quarter 2007 revenues of $152 million. Revenue of $606 million in the first nine months of 2008 has already set a new annual record, surpassing the 2007 full-year record.
http://ir.theice.com/releasedetail.cfm?ReleaseID=344068

CME quarterly profit falls on writedowns
http://us.rd.yahoo.com/finance/external/reuters/SIG=1165jh9eu/
http://www.reuters.com/legacyArticle?duid=mtfh20922_2008-10-29_23-30-24_n29499859_newsml&rpc=44&type=marketsNews

CME 3rd-qtr profit falls 16 percent on charges
http://finance.yahoo.com/news/CME-3rdqtr-profit-falls-16-apf-13410519.html

Earnings Slide 16% at CME Group
CME Group Inc.’s third-quarter net income fell 16% despite a “strong” rate per contract, largely because of a tax adjustment.
http://online.wsj.com/article/SB122531285721881437.html?mod=yahoo_hs&ru=yahoo

CME Group Inc. Reports Strong Third-Quarter Revenues and Operating Income
http://finance.yahoo.com/news/CME-Group-Inc-Reports-Strong-prnews-13408232.html

LSE delays plans for Russia office
The London Stock Exchange has put on the back burner plans to open an office in Russia, once one of the most promising sources of initial public offerings, due to “market conditions”. “We continually monitor our options with regard to the further development of our business in Russia, including the opening of an office in Moscow, which remains under consideration,” the LSE said.
http://www.ft.com/cms/s/9fac6e7c-a620-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F9fac6e7c-a620-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

‘Baikal’ strategy remains unclear
When Lehman Brothers collapsed, one of the issues lost in the storm of the fallout was what would happen to a key part of its business in Europe: the 700-strong equities trading team, based in London. Lehman was the largest provider of share trading orders to the London Stock Exchange, as well as being the exchange’s main corporate broker.
http://www.ft.com/cms/s/ad317176-a622-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fad317176-a622-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

NYSE Euronext to Issue Third-Quarter 2008 Financial Results and Conduct Conference Call on October 31, 2008
NYSE Euronext (NYX) will announce corporate earnings for the third-quarter 2008, ending September 30, 2008, before the market opens on Friday, October 31, 2008. A news release will be issued at approximately 3:30 a.m. (New York)/ 8:30 a.m. (Paris) and a conference call with remarks by NYSE Euronext senior management will begin at 8:00 a.m. (New York)/ 1:00 p.m. (Paris).
http://www.nyse.com

Deutsche Börse: Social and Community Commitment in Q3
http://deutsche-boerse.com/dbag/dispatch/en/notescontent/gdb_navigation/press/10_Latest_Press_Releases/INTEGRATE/mr_pressreleases?notesDoc=7E54A2C031ACF248C12574F2003B7EBD&newstitle=deutscheboerse:socialandcommun&location=press

Quadriserv, Inc. and Cinnober advance development of the AQS(TM) Securities Lending Platform
Quadriserv, Inc., and Cinnober announced today that they have completed integration testing and are currently conducting industry-wide testing of Quadriserv’s AQS securities lending platform. This milestone materially advances Quadriserv’s objective of launching AQS on schedule in early 2009. As recently announced, Quadriserv and the Options Clearing Corporation (“OCC”) are working collaboratively to provide clearinghouse services for all securities lending transactions submitted through AQS, enhancing market structure, transparency and efficiency.
http://hugin.info/139660/R/1264915/278152.pdf

Bond Exchange Of South Africa: Statement By The Board Of Directors
Following BESA’s announcement on Monday 27 October in response to the JSE’s firm intention to make an offer to shareholders for their shares in BESA, the board re-iterates that it is taking independent advice on the offer. The board will as soon as possible communicate its formal response to the offer in terms of the Rules of the Securities Regulation Panel.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78486

Julia Sanz López, New Independent Director Of Bolsas y Mercados Españoles
The Board of Directors of Bolsas y Mercados Españoles (BME) today agreed to appoint Julia Sanz López as a new Board member. The appointment was made during the company’s meeting, held today, at the request of the Nomination and Remuneration Committee.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78485

Russia MICEX halts stock trade as index surges
http://malaysia.news.yahoo.com/rtrs/20081030/tbs-markets-russia-halt-7318940.html

ACGC SUBMITS ITS GUIDEBOOK FOR AUDIT COMMITTEES IN SINGAPORE TO MAS, ACRA AND SGX
~ A PRESS RELEASE BY THE AUDIT COMMITTEE GUIDANCE COMMITTEE
http://info.sgx.com/webnewscentre.nsf/bcb6f015b16e5258482569a7001af139/48256838002f07b1482574f200374e57?OpenDocument

Volkswagen AG: Adjustment of Minimum Price Change in Futures Contracts
http://www.eurexchange.com/download/documents/circulars/cf2642008e.pdf

HKFE Announces Revised Margins For Futures Contracts
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78479

Initial Margin For FORTS Trades Increased For Public Holidays
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78478

Brokers & Dark Pools

Deutsche Bank reports surprise 3rd-quarter profit
Deutsche Bank AG reported a surprise third-quarter profit on Thursday, helped by new European Union accounting rules that limited its write-downs to 1.2 billion euros ($1.5 billion).
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/eu_germany_earns_deutsche_bank;_ylt=AtuWFlOW4FBYCEf84fxl4reyBhIF

DTCC Successfully Closes out Lehman Brothers Bankruptcy
NEW YORK, Oct 30, 2008 (BUSINESS WIRE) — The Depository Trust & Clearing Corporation (DTCC), the leading post-trade clearance and settlement infrastructure for the U.S. capital markets, announced today that it successfully closed out over $500 billion in market participants’ exposure from the Lehman Brothers, Inc. (Lehman) bankruptcy which occurred the week of Sept. 22. This was the largest close-out in DTCC’s history. DTCC reports it does not expect there to be any impact to its retained earnings or to market participants’ clearing fund deposits as a result of closing out these pending trade obligations.
http://www.marketwatch.com/news/story/DTCC-Successfully-Closes-out-Lehman/story.aspx?guid=%7BA6E847E2-05A3-4123-845E-4C33FA0AE745%7D

Questions emerge over dark pool share trading project as dust from Lehman collapse begins to clear
When Lehman Brothers collapsed, one question lost in the fallout was the fate of a key part of its European business: the 700-strong equities trading team based in London, writes Jeremy Grant in London. Lehman had been the largest provider of share trading orders to the London Stock Exchange and was also the exchange’s main corporate broker, advising on strategic issues.
http://www.ft.com/cms/s/c58872d8-a622-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc58872d8-a622-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

Merrill Lynch, Goldman Sachs, J.P. Morgan and Credit Suisse Provide Strategic Investment to Accelerate FTEN Inc Global Expansion
FTEN, Inc. (“FTEN”) announced today that Merrill Lynch (MER), Goldman Sachs (GS), J.P. Morgan (JPM) and Credit Suisse (CS) have provided a strategic investment to accelerate expansion of FTEN’s risk management, compliance, high-frequency trading gateway, and market data offerings for multi-asset class and multi-prime broker sponsored access in Europe and Asia.
http://tinyurl.com/67abn4

Barclays told clients AIG fund was ‘secure’
Barclays Wealth is facing questions after describing the recently frozen AIG enhanced fund as an “extremely secure account” offering “instant access” to funds in client correspondence.
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=175567&d=340&h=341&f=342

Credit Suisse aims to benefit from UBS weakness in U.S: report
Credit Suisse Group AG aims to benefit from rival UBS AG’s weakness in the United States, its chief executive said in an interview published on Thursday.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_creditsuisse;_ylt=AoncfdQ_64.o6Yogi3B85zq573QA

Goldman Sees No Limits on Leverage, Analyst Says
Goldman Sachs may have morphed into a bank holding company, but the Wall Street firm doesn’t feel compelled to lower its leverage or pull back in any of its business lines.
http://dealbook.blogs.nytimes.com/2008/10/30/goldman-sees-no-limits-on-leverage-analyst-says/

How Goldman Will Keep Its Elite
It seems like an odd moment for Goldman Sachs to cut the number of bankers it admits to its coveted inner circle of partners, Breakingviews muses.
http://dealbook.blogs.nytimes.com/2008/10/30/how-goldman-will-keep-its-elite/

HSBC installs biometrics
HSBC has become the first bank to install facial-recognition technology at its two new data centres in the UK following recent high-profile cases of identity theft.
http://www.theengineer.co.uk/Articles/Article.aspx?liArticleID=308638

Barclays takes Lehman team back into munis
Tuesday marked a milestone of sorts for Barclays Capital in the U.S. municipal bond market. The investment banking unit of British bank Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) won its first competitive deal and priced its first negotiated deal as senior underwriter.
http://www.reuters.com/article/reutersEdge/idUSTRE49S8J220081029

optionsXpress® Launches First Interactive Trading Quotient Test ”What’s Your TQ Score?”
optionsXpress Holdings, Inc. (Nasdaq: OXPS) today announced it has launched Trading Quotient, an interactive tool which allows investors to measure their investing aptitude while also competing against their peers. Dubbed “TQ,” this interactive test utilizes game-like functions to provide an aptitude score. TQ also guides users to free educational resources that help improve areas of weakness revealed by the test.
http://tinyurl.com/5bpeoe

MF Global’s chief executive exits after value of derivatives broker sinks by 90% in a year
MF Global, the derivatives broker spun off from FTSE 100 hedge fund giant Man Group last year, has ousted its long-time chief executive and issued another set of disappointing results. Kevin Davis, who has been with the company for 17 years, bowed to calls from shareholders and is being replaced by Bernie Dan, the former head of the Chicago Board of Trade (CBOT) derivatives exchange, who joined the company in the summer. Brought low by the credit crisis, the collapse of Lehman Brothers and by a rogue trading scandal, MF Global has lost 90 per cent of its value since Man floated it on the New York Stock Exchange.
http://www.independent.co.uk/news/business/news/mf-globals-chief-executive-exits-after-value-of-derivatives-broker-sinks-by-90-in-a-year-978564.html

Bank of Russia to join MICEX trading next month
http://www.rbcnews.com/free/20081030093329.shtml

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig082108.htm

Now or never for financial watchdogs shake-up
If the banking crisis of 2008 fails to do the trick, then there is little hope Washington will ever summon the will to reorganize its creaking, disjointed system of financial regulation.
http://www.reuters.com/article/reutersEdge/idUSTRE49S6PD20081029

Japan’s Financial Services Agency Strengthens Restrictions On Short Selling
The Financial Services Agency (FSA) decided today to take additional measures to strengthen the restrictions on short selling of stocks.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78473

Fund Managers Are `Sanguine’ on Bonuses, FSA Says (Update1)
Senior hedge fund managers are “overly sanguine” that their long-term bonus systems prevent market abuse, Britain’s financial regulator said today.
http://www.bloomberg.com/apps/news?pid=20601127&sid=aGiccdSLUl_8

FSA fee update: Regulator to help new firms – insurers’ fees to be raised
The FSA is proposing new rules to ensure newly authorised firms and firms extending their permissions are not paying too much in fees and levies in their second year.
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=175704&d=340&h=341&f=342

DFSA Signs MoU With Capital Market Authority of Oman
http://www.complinet.com/dfsa/display/display.html?rbid=1547&element_id=6235

Investments – Indexes – Managed Futures – Managed Funds

U.S.-based Hedge Funds to Cut Total IT Spending by 40% in 2009 to $882 Million, Says New TABB Study
http://tinyurl.com/55pbmp

SAC’s Cohen, Einhorn Raise Money as Most Hedge Funds Shrink
Steven Cohen, David Einhorn, Paul Singer and Alan Howard are doing what most hedge-fund managers can’t these days — raising money from investors.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYUpBdvzdbBw&refer=worldwide

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Regulator likely to delay stock market reforms
THE stock market slump coupled with a global financial meltdown and an economic slowdown has made Chinese financial regulators delay the launch of several market reforms, sources said today.
http://www.shanghaidaily.com/article/?id=378832&type=Business

China hopes for step-by-step progress of low carbon economy
Developing the Low Carbon Economy (LCE), a strategic option to cope with global warming, should follow a step-by-step pattern in accordance with a country’s situation, China’s Vice Environment Minister Zhou Jian said here Thursday.
http://news.xinhuanet.com/english/2008-10/30/content_10283016.htm

China’s Policies and Actions for Addressing Climate Change
Global climate change and its adverse effects are a common concern of mankind.
http://www.egovmonitor.com/node/21786

Chinese Securities Firms Test Systems For Margin Trading
A round of online test over operational systems was conducted in China on October 25, 2008 for the margin trading business to start in the country in the near future, citing a report.
http://www.tradingmarkets.com/.site/news/Stock%20News/1974825/

Regulator likely to delay stock market reforms
THE stock market slump coupled with a global financial meltdown and an economic slowdown has made Chinese financial regulators delay the launch of several market reforms, sources said today
http://www.shanghaidaily.com/sp/article/2008/200810/20081030/article_378832.htm

China to enhance finance monitoring cooperation with Ireland
BEIJING, Oct. 30 (Xinhua) — China’s banking regulator said on Thursday it will enhance financial monitoring cooperation with Irish Financial Services Regulatory Authority (IFSRA).
http://news.xinhuanet.com/english/2008-10/30/content_10283025.htm

Central gov’t pledges support for HK economy
The central government has pledged to help Hong Kong weather global economic turmoil by speeding up infrastructure projects and safeguarding food supplies, the Hong Kong Special Administrative Region’s government said.
http://www.chinadaily.com.cn/bizchina/2008-10/30/content_7159454.htm

Just take a look at what happened to Hong Kong
While the upcoming visit of China’s Association for Relations Across the Taiwan Strait Chairman Chen Yunlin for the second round of talks with Straits Exchange Foundation Chairman Chiang Pin-kung may seem focused on economic issues, we must remember that the Chinese Communist Party (CCP) is a political creature and that the talks will have undertones that will be aimed at damaging Taiwan’s sovereignty.
http://www.taipeitimes.com/News/editorials/archives/2008/10/30/2003427341

Citic Pacific stress tests HK
Doubts have been raised over the future of Hong Kong’s status as an international financial center and its autonomy under the vaunted “one country, two systems” form of government following Citic Pacific’s warning last week that it faced losses of as much as US$2 billion from unauthorized foreign-exchange bets.
http://www.atimes.com/atimes/China_Business/JJ31Cb01.html

FSC Decides to Adopt International Accounting Standards
In line with the practice of the U.S., Taiwan will embrace the adoption of the International Financial Reporting Standards (IFRSs) outright, possibly in 2014, a move which will have the greatest effect on domestic banks and insurance firms, announced the Financial Supervisory Commission (FSC) on Oct. 28.
http://news.cens.com/cens/html/en/news/news_inner_25206.html

Philippine bankers to halve FX trading position-sources
Philippine banks will cut by half their foreign exchange purchases from the market to ease pressures on a weak peso in one of three measures agreed by a big industry group, sources from the group said on Thursday. Banks would also tighten scrutiny of offshore investments of clients to prevent arbitrage and speculation amid the worst financial crisis in decades, members of the influential industry group Bankers Association of the Philippines said.
http://ph.news.yahoo.com/rtrs/20081030/tbs-philippines-economy-banks-8bedc88.html

Goldman hires Citi’s Sondhi for wealth mgmt – sources
Goldman Sachs has hired Ajay Sondhi as a managing director for private wealth management in Asia from Citigroup , where he headed the unit that oversaw rich Indian clients, sources said on Thursday.
http://malaysia.news.yahoo.com/rtrs/20081030/tap-goldmansachs-asia-c3bb44c.html

Mobile Money Ventures Powers Mobile Financial Services for Citibank Hong Kong
Mobile Money Ventures LLC (MMV), a joint venture of Citi (NYSE:C) and SK Telecom (NYSE:SKM), today announced that it is providing Citibank Hong Kong with a new service platform that supports mobile banking and mobile stock trading, giving Citibank Hong Kong customers another way to manage their financial lives quickly, easily and securely. Additionally, MMV has customized features for iPhone 3G users including a mobile stock trading application to enhance the end user experience.
http://www.centredaily.com/business/technology/story/933013.html

Frontier Markets

Trading futures
The crisis has been with us for some time. It is now six weeks since Lehman Brothers went under; it is three weeks since Iceland’s prime minister warned that that country was close to national bankruptcy. Over the past few weeks there has been a flurry of high-level meetings, as global decision-makers slowly begin to understand that this is not a run-of-the-mill sort of crisis, this is something that needs concerted international action. Yet the overall movement in this time has been disappointing. There is general understanding that reform of the sort that Gordon Brown suggested — internationalising regulatory frameworks — will have to be introduced; but there has been absolutely no movement towards outlining what form these new structures will take.
http://www.indianexpress.com/news/Trading-futures/379127

Banks must stick to core competency
Does the Indian Government stand sufficiently chastened by the ongoing financial crisis that has had its roots in the launch of complex financial derivative products (of which many understand little), rampant leveraging, excessive risk taking and ineffective regulation? Lessons have no doubt emanated from the ongoing turmoil and it appears some of them may have been absorbed by policymakers back home.
http://www.thehindubusinessline.com/2008/10/30/stories/2008103050941800.htm

Miscellaneous News

SunGard’s Fame Market Data, News and Alerting Available to NYSE Issuers
http://www.marketwatch.com/news/story/SunGards-Fame-Market-Data-News/story.aspx?guid=%7BFE202256-692C-4FD7-82FC-37475927DC82%7D

National Council On Economic Education (NCEE) President and CEO to Ring the NASDAQ Stock Market Closing Bell
Robert Duvall, President and CEO of the National Council on Economic Education (NCEE), will preside over the Closing Bell in honor of The 2008 Visionary Awards. The NCEE, led by Craig Donohue, CEO of the CME Group, Inc. and Chairman of the Board of Directors of the NCEE, will hold their third-annual Visionary Awards dinner at the St. Regis Hotel in New York City on Thursday, October 30th.
http://www.marketwatch.com/news/story/National-Council-On-Economic-Education/story.aspx?guid=%7B9E225928-E889-4C2C-8DB7-0809C8D691A6%7D

National Council on Economic Education: 2008 Visionary Awards Dinner To Honor Champions of Economic Empowerment
NCEE Visionary Awards will be presented to John W. Rogers, Jr., Mary Schapiro, Julie Stav, and the Verizon Foundation. The Visionary Awards Dinner will be hosted by Craig Donohue, CEO of the Chicago Mercantile Exchange.
http://www.prweb.com/releases/2008/10/prweb1539684.htm

Observations – Statistics – Commentary

Dear Readers:

I was stunned this morning to learn of the death of longtime Liffe executive Juliette Proudlove. Juliette passed away last night after battling cancer for some time. Juliette had many titles over the years at Liffe, including head of corporate communications, but first and foremost she was a great person.

It has been my pleasure and joy to have gotten to know her since I started this newsletter and it is with great sadness that I report her passing. My sympathy goes to her family and many friends, especially in this industry.

Below are comments from two people who knew her better than I, Ray Carmichael of Strategics, Inc. and her former Liffe associate Jim Johanik, now with Tradehelm.

Regards,

John J. Lothian

From Ray Carmichael:

Today this industry lost another great friend and colleague, , or as many of us fondly called her, Jools. She was a short woman with a tall stature. She was feisty for the cause yet did it all with a loving heart. She took the knocks for many because she knew it was the right thing to do.

I knew Jools for some twenty-five years yet I know many in the futures industry who knew her longer. I had the honor of working with her and for her and I learned from her what loyalty was all about. Even when she was in the midst of being treated rather roughly, I never heard a disparaging word from her. She lived that great quote, “Damn the torpedoes, full speed ahead.” I have never known anyone with such vigor, spunk, energy and drive who did it all with love and compassion.

Jools lived through the best of times and the worst of times at Liffe. She hired and mentored many and had to give out the pink slips when times were rough. Yet each time I spoke to her about the hard things she had to do, I heard a crack in her voice, holding back the tears and pain that she felt for the people.

A perfectionist at heart, Jools never let you get away with anything but your best. She was dedicated to bringing out the best in each person and program, but she also knew when to let go – a great quality that is hard to learn.

Jools fought for this industry both on the front lines and behind the scene. She loved both the traders and the politicians. She loved the “members” (when there were such things). She knew them all by name and most importantly she knew them as people.

Jools was one who made the system work, and work well. She lived through more corporate iterations than most of us will ever know and always knew how to get the job done even when she wasn’t sure who her next boss was going to be. And as many of us will remember, she did it all with that infectious high pitched laugh and smile.

I know Jools was in a lot of pain towards the end. I last saw her this summer when I was in London for mutual friend’s memorial service. She wasn’t feeling well enough to go to the service so I went out to her house to spend some time with her in her garden. She seemed pretty frail, but when I had to go she walked me to the train station, kissed me on the cheek and said, “See you at Expo”. It won’t be the same without her.

From Jim Johanik:

John, I’m at a loss for words…..

Juliette’s passing is a tremendous loss for me and for anyone who ever had the opportunity to work with her. During my days with LIFFE I will always remember Juliette as a towering personality in a diminutive frame. She was a friend, a loyal professional, and a caring human being who was always more interested in others than herself.

She will be sorely missed.

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From Homeless to Multimillionaire
It’s not every day you get the chance to pick the brain of a man whose real-life rags-to-riches story was turned into a Hollywood movie starring one of America’s top actors. But the other day I had the opportunity to spend time with Chris Gardner, subject of the 2006 movie The Pursuit of Happyness, in which Gardner was played by Will Smith.
http://news.yahoo.com/s/bw/20081030/bs_bw/jul2007sb20070723608918;_ylt=AlHLcY1RSM_u5j9YJMJ4g7OyBhIF

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Today in NYSE History (NYSE.com)
29 Oct. 1929 — “Black Tuesday” – the most dramatic day of the 1929 Crash. The DJIA was off nearly 12 percent on volume of 16 million shares – a record that would stand for decades.
http://www.nyse.com/about/history/1089312755484.html

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Tapped Out?
A $60 million painting by Kazimir Malevich. A $40 million self-portrait by Francis Bacon. It hardly seems the ideal moment to be selling such pricey art. As Sotheby’s, Christie’s and Phillips de Pury brace for their big fall auctions in New York, starting with a sale of 71 Impressionist and Modern paintings, drawings and sculptures at Sotheby’s on Monday night, anxiety is the dominant mood. Only 10 days ago, Sotheby’s reported a loss of $15 million in guarantees — the undisclosed amount that the houses promise to sellers regardless of the outcome of a sale — from recent auctions in Hong Kong and London. Millions of dollars of art went unsold at those September and October sales, with many works going for well below their estimates. Since then auction house officials have been busy trying to get sellers to lower their expectations. Much of the art up for auction this week and next was secured early in the summer, when the world seemed a far different place. Now, with the net worth of so many buyers plummeting, auction houses have been trying to persuade sellers to lower their reserves, that is, the undisclosed minimum price that a bidder must meet for the art to be sold.
http://www.nytimes.com/2008/11/02/arts/design/02voge.html

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GFI Sponsors ‘Stand Up For Heroes’
Supporting Bob Woodruff Family Foundation
http://www.marketwatch.com/news/story/GFI-Sponsors-Stand-Up-For/story.aspx?guid=%7B29BF4ED9-BF52-4A34-9D78-FB20B08E5A1B%7D

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Important Expo Announcement
You Must Register Online for Expo Prior to Monday, November 10 to Attend the Opening Reception! Even though sessions don’t begin until Tuesday, be sure to arrive early on Monday, November 10 to attend the special kick-off reception in the historic Chicago Stock Exchange Trading Room at the renowned Art Institute of Chicago. The reception begins at 6:00 p.m. An RSVP is not necessary, however you must register to attend the Expo (or conference sessions) online prior to Monday, November 10 in order to attend the opening reception. No on-site registration will be available on Monday.
https://www.futuresindustry.org/expo-2008-online-registration.asp

Expo Preview
http://www.futuresindustry.org/downloads/Expo_Preview.pdf

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Orc Software at FIA Futures & Options Expo 2008
Join Orc Software at the 2008 FIA Futures & Options Expo in Chicago, IL from November 10 – 12. The Expo is one of the largest derivatives-focused events in the world with over 4,000 attendees. Orc Software will be discussing Orc Trading, a best-in-class platform for advanced derivatives trading including algorithmic trading and market making throughout the show.

To schedule a meeting or learn more about Orc Software, please contact sales_chicago@orcsoftware.com

To register for an exhibit hall pass from Orc Software and learn more about the FIA Futures & Options Expo, go to
https://www.futuresindustry.org/complimentary-exhibitsonly-pass.asp?spid=2022

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Wall Street’s Jobless Go Back to B-School, This Time to Mix Purple Hooters
Bryan Gunderson tried to master the intricacies of structured-equity investments until he lost his job at JPMorgan Chase & Co. Now he’s learning the subtleties of Purple Hooters.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAUbEhO7AJH0&refer=news

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Lead Stories

IntercontinentalExchange, The Clearing Corporation and Nine Major Dealers Announce New Developments in Global CDS Clearing Solution
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global regulated futures exchanges and over-the-counter (OTC) markets, and The Clearing Corporation (TCC), today announced new agreements intended to advance their previously announced joint global clearing solution for Credit Default Swaps (CDS). Together with nine of the major global investment banks who are dealers in the CDS markets, ICE and TCC have entered into memorandums of understanding (MOUs) to develop a joint global clearing solution and to effect the acquisition of TCC by ICE. Under the terms of the new agreements, ICE will acquire TCC and will form ICE US Trust (ICE Trust), a New York limited purpose trust company and subsidiary of ICE, with the support of Bank of America, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch, Morgan Stanley and UBS. As previously announced, ICE and TCC continue to work closely with regulators, other market participants and industry groups to develop a comprehensive central counterparty clearing solution for the CDS market. This customized solution is currently undergoing final testing in preparation for launch.
http://ir.theice.com/releasedetail.cfm?ReleaseID=344066

Spotlight on role of e-trading in volatility
Hugh Marsden, a London stockbroker since 1960, has seen many bear markets. But the stomach-churning volatility of the past two months is unlike anything he has witnessed before. Now a broker at investment manager Brewin Dolphin, he suspects that electronic trading – and specifically computer-driven algorithmic trading – may be to blame. “I think there’s no doubt that without any human touch you are going to get effects that you cannot necessarily predict,” he says. necessarily predict,” he says. Michael Bloomberg, mayor of New York and founder of the financial information business that made him his fortune, told a securities industry conference this week: “Computers are deciding when to buy and when to sell. When the herd mentality gets automated, the stampede [in and out of markets] gets turbocharged.”
http://news.yahoo.com/s/ft/20081029/bs_ft/fto102920081557599082

Intercontinental to Buy Clearing Corp. in CDS Plan
By Matthew Leising
Oct. 30 (Bloomberg) — Intercontinental Exchange Inc., the second-largest U.S. futures market, will buy the Clearing Corp., its partner in a plan to guarantee trades in the $55 trillion credit-default swap market. Intercontinental has signed memorandums of understanding with the nine banks that own the Clearing Corp., including Bank of America Corp. and Goldman Sachs Group Inc., the Atlanta-based exchange known as ICE said in a statement today. Terms of the acquisition weren’t released. ICE Chief Executive Officer Jeff Sprecher, 53, has increased volume by acquiring exchanges as his company benefits from the energy commodities boom. ICE is vying to guarantee trades in the credit-default swap market after the contracts contributed to the failure of Lehman Brothers Holdings Inc. last month and forced the U.S. government to provide American International Group Inc. with a $123 billion cash infusion.

A Question for A.I.G.: Where Did the Cash Go?
The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.
http://www.nytimes.com/2008/10/30/business/30aig.html?em

Japan announces $275 billion stimulus package
TOKYO – Japanese Prime Minister Taro Aso announced a 27 trillion yen ($275 billion) stimulus package to shore up the world’s No. 2 economy Thursday, vowing to dispel fears over the global financial crisis with expanded credits for small businesses and a cash payback to every household.
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/as_japan_stimulus_package;_ylt=Aga3TXyv5LDgiFfajcGvcIpu24cA

Goldman Sachs ready to hand out £7bn salary and bonus package… after its £6bn bail-out
Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses – despite asking the U.S. government for an emergency bail-out.
http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package–6bn-bail-out.html?ITO=1490

Wall Street Won’t Surrender on Bonuses, Veterans Say (Update1)
Wall Street’s chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a07o5ltdIKLg&refer=us

Debt Protection Costs Plunge on Swap Agreements, Lower Rates
Oct. 30 (Bloomberg) — The cost of protecting Asia-Pacific bonds from default tumbled after the Federal Reserve increased cross-border funding and the U.S., China, Hong Kong and Taiwan cut interest rates to boost economic growth. The benchmark index of credit risk for investment-grade borrowers in Asia outside Japan fell the most since it was created in September 2007. The Markit iTraxx Asia credit-default swap index of 50 borrowers, including Thailand and Hong Kong’s Hutchison Whampoa Ltd., fell 110 basis points to 450, according to ICAP Plc data as of 3:22 p.m. in Hong Kong.
http://www.bloomberg.com/apps/news?pid=20601080&sid=azS9w15coauA&refer=asia

Fed Comes To Rescue Of South Korea
As South Korea ran into a severe scarcity of dollars amid the global credit crisis, the U.S. Federal Reserve lent a helping hand, providing a multibillion-dollar line of liquidity to the country’s central bank. The move will help stem the won’s steep slide, which has made borrowing from abroad more expensive and raised concerns about South Korea’s risk of default.
http://www.forbes.com/markets/2008/10/30/fed-currency-swap-markets-econ-cx_twdd_1030markets3.html

Ex-Fannie Mae chief wishes he said “no” more often: report
Former Fannie Mae Chief Executive Daniel Mudd wished he said “no” to more of the things the company was asked to do, he told the Wall Street Journal in an interview.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_fannie_mudd;_ylt=Ao0lapf6d1A6VcXO0UGSOki573QA

America Needs an Independent Clearinghouse for OTC, CDS
http://seekingalpha.com/article/102576-america-needs-an-independent-clearinghouse-for-otc-cds?nick_was_taken=&additional_ids=294076#comment-294076

Outside risk advice seen as best for central banks
One of the most striking figures contained in this week’s Bank of England’s financial stability report concerns the amount of money central banks and governments have pledged to support funding markets since April: £5,000bn.
http://news.yahoo.com/s/ft/20081029/bs_ft/fto102920081557589080;_ylt=ArA8G_1lDb0oSmQE9Mm6x7L2ULEF

Insight: The CDS sector is not the central villain
Last week saw an important milestone in the credit default swaps sector, when counterparties to CDS trades on Lehman Brothers cash-settled their transactions.
http://www.ft.com/cms/s/0/9e609634-a5d4-11dd-9d26-000077b07658.html

Greenspan Slept as Off-Balance-Sheet Toxic Debt Evaded Scrutiny
As George Miller welcomed 60 bankers to the chandeliered Charlotte City Club one evening in September, the focus was on more than the recent bankruptcy of Lehman Brothers Holdings Inc. From their 31st-floor perch, members of the American Securitization Forum, which Miller leads, fretted about the future of their $10.7 trillion industry.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYJZOB_gZi0I&refer=home

Kass: Private Equity Is the Next Shoe to Drop
The casualty count in the world of finance is about to expand in scope. At the epicenter of the leveraged binge of the last decade were the private equity shops’ “deals.” These firms funded their “products” to individuals, endowments, hedge funds and to other institutions around the world with the promise of turning waste into gold.
http://www.thestreet.com/story/10445033/1/kass-private-equity-is-the-next-shoe-to-drop.html

CBS posts $12.5 billion loss with write-down
CBS Corp reported a massive quarterly loss on Thursday, as a rapidly deteriorating advertising market tarnished the TV and radio broadcaster’s results and the economic crisis prompted it to take a $14 billion non-cash charge.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_cbs;_ylt=AtZNLvM9TlmkXGodpAj0Q26573QA

Exxon Mobil posts biggest US quarterly profit ever
Exxon Mobil Corp., the world’s largest publicly traded oil company, says it shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/earns_exxon_mobil

Shift to cleared trade could unblock oil markets
Exchange-style clearing offers a way forward for the multi-billion dollar over-the-counter market in oil derivatives that has seized up because of the credit crisis.
Volumes of over-the-counter (OTC) trade slumped in September after the crisis in the banking sector made participants nervous about counterparty credit risk.
http://www.guardian.co.uk/business/feedarticle/7956989

The Mais Lecture On ‘Maintaining Stability In A Global Economy’ Given By The UK Chancellor Of The Exchequer At The Cass Business School, London EC1
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78477

NZX Acquires ProFarmer Australia Pty Limited
NZX today announced the acquisition of Australian-based ProFarmer Australia Limited Pty. ProFarmer, established in 1994, is based in Perth, Australia. ProFarmer is Australia’s leading provider of agricultural news, commodity market information and strategic grain market analysis, which it provides to customers via weekly newsletters, market price updates and specialist reports. ProFarmer also provides historical agricultural commodity price data and farm consulting, training and other agri-business services to grain farmers and leading market analysts.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78474

Environmental Trading News

Carbon market’s future hangs in the balance
LONDON, Oct 29 (Reuters) – The future of global carbon markets is finely poised as recession threatens the political will to shoulder costs but New Zealand, Australia and Japan follow Europe with their own cap and trade schemes.
http://www.guardian.co.uk/business/feedarticle/7952434

Study: Cleantech funding hit record $1.6B in Q3
Capital investments in U.S. cleantech companies reached a record $1.6 billion in the third quarter, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. A total of $3.3 billion was invested in the first three quarters of 2008, surpassing the figure for the same period last year by 71 percent, the report said.
http://www.bizjournals.com/baltimore/stories/2008/10/27/daily38.html?ana=from_rss

Govt ‘still considering options’ for emissions trading targets
Prime Minister Kevin Rudd says the Government will look at a range of reduction targets and carbon prices before deciding on a final emissions trading policy later this year.
http://au.news.yahoo.com/a/-/latest/5113239/govt-still-considering-options-for-emissions-trading-targets/

Point Carbon Foresees Major Changes in REC Markets
New Report Explains Impacts of Carbon Caps on Renewable Energy Certificates and Carbon Offset Credits; Offers Recommendations to Buyers, Sellers and Regulators

Emissions trading ‘to cost $1 a day’
Emissions trading will cost households a dollar a day when it starts in 2010. Comprehensive economic modelling released by Treasury on Thursday has painted a rosy picture of how emissions trading will affect the economy and households.
http://au.news.yahoo.com/a/-/latest/5113006/emissions-trading-to-cost-1-a-day/

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

CME Globex Notice
http://view.exacttarget.com/

IntercontinentalExchange Reports Third Quarter 2008 Earnings; Diluted EPS of $1.04, up 12%
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global exchanges and over-the-counter (OTC) markets, reported consolidated net income for the third quarter of 2008 of $75 million, a 12% increase compared to $67 million for the third quarter of 2007. Diluted earnings per share (EPS) in the third quarter were $1.04, up 12% over the prior year’s third quarter of $0.93. Consolidated revenues in the third quarter rose to $201 million, the second highest quarterly revenues in the company’s history and a 33% increase over third quarter 2007 revenues of $152 million. Revenue of $606 million in the first nine months of 2008 has already set a new annual record, surpassing the 2007 full-year record.
http://ir.theice.com/releasedetail.cfm?ReleaseID=344068

CME quarterly profit falls on writedowns
http://us.rd.yahoo.com/finance/external/reuters/SIG=1165jh9eu/
http://www.reuters.com/legacyArticle?duid=mtfh20922_2008-10-29_23-30-24_n29499859_newsml&rpc=44&type=marketsNews

CME 3rd-qtr profit falls 16 percent on charges
http://finance.yahoo.com/news/CME-3rdqtr-profit-falls-16-apf-13410519.html

Earnings Slide 16% at CME Group
CME Group Inc.’s third-quarter net income fell 16% despite a “strong” rate per contract, largely because of a tax adjustment.
http://online.wsj.com/article/SB122531285721881437.html?mod=yahoo_hs&ru=yahoo

CME Group Inc. Reports Strong Third-Quarter Revenues and Operating Income
http://finance.yahoo.com/news/CME-Group-Inc-Reports-Strong-prnews-13408232.html

LSE delays plans for Russia office
The London Stock Exchange has put on the back burner plans to open an office in Russia, once one of the most promising sources of initial public offerings, due to “market conditions”. “We continually monitor our options with regard to the further development of our business in Russia, including the opening of an office in Moscow, which remains under consideration,” the LSE said.
http://www.ft.com/cms/s/9fac6e7c-a620-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F9fac6e7c-a620-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

‘Baikal’ strategy remains unclear
When Lehman Brothers collapsed, one of the issues lost in the storm of the fallout was what would happen to a key part of its business in Europe: the 700-strong equities trading team, based in London. Lehman was the largest provider of share trading orders to the London Stock Exchange, as well as being the exchange’s main corporate broker.
http://www.ft.com/cms/s/ad317176-a622-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fad317176-a622-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

NYSE Euronext to Issue Third-Quarter 2008 Financial Results and Conduct Conference Call on October 31, 2008
NYSE Euronext (NYX) will announce corporate earnings for the third-quarter 2008, ending September 30, 2008, before the market opens on Friday, October 31, 2008. A news release will be issued at approximately 3:30 a.m. (New York)/ 8:30 a.m. (Paris) and a conference call with remarks by NYSE Euronext senior management will begin at 8:00 a.m. (New York)/ 1:00 p.m. (Paris).
http://www.nyse.com

Deutsche Börse: Social and Community Commitment in Q3
http://deutsche-boerse.com/dbag/dispatch/en/notescontent/gdb_navigation/press/10_Latest_Press_Releases/INTEGRATE/mr_pressreleases?notesDoc=7E54A2C031ACF248C12574F2003B7EBD&newstitle=deutscheboerse:socialandcommun&location=press

Quadriserv, Inc. and Cinnober advance development of the AQS(TM) Securities Lending Platform
Quadriserv, Inc., and Cinnober announced today that they have completed integration testing and are currently conducting industry-wide testing of Quadriserv’s AQS securities lending platform. This milestone materially advances Quadriserv’s objective of launching AQS on schedule in early 2009. As recently announced, Quadriserv and the Options Clearing Corporation (“OCC”) are working collaboratively to provide clearinghouse services for all securities lending transactions submitted through AQS, enhancing market structure, transparency and efficiency.
http://hugin.info/139660/R/1264915/278152.pdf

Bond Exchange Of South Africa: Statement By The Board Of Directors
Following BESA’s announcement on Monday 27 October in response to the JSE’s firm intention to make an offer to shareholders for their shares in BESA, the board re-iterates that it is taking independent advice on the offer. The board will as soon as possible communicate its formal response to the offer in terms of the Rules of the Securities Regulation Panel.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78486

Julia Sanz López, New Independent Director Of Bolsas y Mercados Españoles
The Board of Directors of Bolsas y Mercados Españoles (BME) today agreed to appoint Julia Sanz López as a new Board member. The appointment was made during the company’s meeting, held today, at the request of the Nomination and Remuneration Committee.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78485

Russia MICEX halts stock trade as index surges
http://malaysia.news.yahoo.com/rtrs/20081030/tbs-markets-russia-halt-7318940.html

ACGC SUBMITS ITS GUIDEBOOK FOR AUDIT COMMITTEES IN SINGAPORE TO MAS, ACRA AND SGX
~ A PRESS RELEASE BY THE AUDIT COMMITTEE GUIDANCE COMMITTEE
http://info.sgx.com/webnewscentre.nsf/bcb6f015b16e5258482569a7001af139/48256838002f07b1482574f200374e57?OpenDocument

Volkswagen AG: Adjustment of Minimum Price Change in Futures Contracts
http://www.eurexchange.com/download/documents/circulars/cf2642008e.pdf

HKFE Announces Revised Margins For Futures Contracts
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78479

Initial Margin For FORTS Trades Increased For Public Holidays
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78478

Brokers & Dark Pools

Deutsche Bank reports surprise 3rd-quarter profit
Deutsche Bank AG reported a surprise third-quarter profit on Thursday, helped by new European Union accounting rules that limited its write-downs to 1.2 billion euros ($1.5 billion).
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/eu_germany_earns_deutsche_bank;_ylt=AtuWFlOW4FBYCEf84fxl4reyBhIF

DTCC Successfully Closes out Lehman Brothers Bankruptcy
NEW YORK, Oct 30, 2008 (BUSINESS WIRE) — The Depository Trust & Clearing Corporation (DTCC), the leading post-trade clearance and settlement infrastructure for the U.S. capital markets, announced today that it successfully closed out over $500 billion in market participants’ exposure from the Lehman Brothers, Inc. (Lehman) bankruptcy which occurred the week of Sept. 22. This was the largest close-out in DTCC’s history. DTCC reports it does not expect there to be any impact to its retained earnings or to market participants’ clearing fund deposits as a result of closing out these pending trade obligations.
http://www.marketwatch.com/news/story/DTCC-Successfully-Closes-out-Lehman/story.aspx?guid=%7BA6E847E2-05A3-4123-845E-4C33FA0AE745%7D

Questions emerge over dark pool share trading project as dust from Lehman collapse begins to clear
When Lehman Brothers collapsed, one question lost in the fallout was the fate of a key part of its European business: the 700-strong equities trading team based in London, writes Jeremy Grant in London. Lehman had been the largest provider of share trading orders to the London Stock Exchange and was also the exchange’s main corporate broker, advising on strategic issues.
http://www.ft.com/cms/s/c58872d8-a622-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc58872d8-a622-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

Merrill Lynch, Goldman Sachs, J.P. Morgan and Credit Suisse Provide Strategic Investment to Accelerate FTEN Inc Global Expansion
FTEN, Inc. (“FTEN”) announced today that Merrill Lynch (MER), Goldman Sachs (GS), J.P. Morgan (JPM) and Credit Suisse (CS) have provided a strategic investment to accelerate expansion of FTEN’s risk management, compliance, high-frequency trading gateway, and market data offerings for multi-asset class and multi-prime broker sponsored access in Europe and Asia.
http://tinyurl.com/67abn4

Barclays told clients AIG fund was ‘secure’
Barclays Wealth is facing questions after describing the recently frozen AIG enhanced fund as an “extremely secure account” offering “instant access” to funds in client correspondence.
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=175567&d=340&h=341&f=342

Credit Suisse aims to benefit from UBS weakness in U.S: report
Credit Suisse Group AG aims to benefit from rival UBS AG’s weakness in the United States, its chief executive said in an interview published on Thursday.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_creditsuisse;_ylt=AoncfdQ_64.o6Yogi3B85zq573QA

Goldman Sees No Limits on Leverage, Analyst Says
Goldman Sachs may have morphed into a bank holding company, but the Wall Street firm doesn’t feel compelled to lower its leverage or pull back in any of its business lines.
http://dealbook.blogs.nytimes.com/2008/10/30/goldman-sees-no-limits-on-leverage-analyst-says/

How Goldman Will Keep Its Elite
It seems like an odd moment for Goldman Sachs to cut the number of bankers it admits to its coveted inner circle of partners, Breakingviews muses.
http://dealbook.blogs.nytimes.com/2008/10/30/how-goldman-will-keep-its-elite/

HSBC installs biometrics
HSBC has become the first bank to install facial-recognition technology at its two new data centres in the UK following recent high-profile cases of identity theft.
http://www.theengineer.co.uk/Articles/Article.aspx?liArticleID=308638

Barclays takes Lehman team back into munis
Tuesday marked a milestone of sorts for Barclays Capital in the U.S. municipal bond market. The investment banking unit of British bank Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) won its first competitive deal and priced its first negotiated deal as senior underwriter.
http://www.reuters.com/article/reutersEdge/idUSTRE49S8J220081029

optionsXpress® Launches First Interactive Trading Quotient Test ”What’s Your TQ Score?”
optionsXpress Holdings, Inc. (Nasdaq: OXPS) today announced it has launched Trading Quotient, an interactive tool which allows investors to measure their investing aptitude while also competing against their peers. Dubbed “TQ,” this interactive test utilizes game-like functions to provide an aptitude score. TQ also guides users to free educational resources that help improve areas of weakness revealed by the test.
http://tinyurl.com/5bpeoe

MF Global’s chief executive exits after value of derivatives broker sinks by 90% in a year
MF Global, the derivatives broker spun off from FTSE 100 hedge fund giant Man Group last year, has ousted its long-time chief executive and issued another set of disappointing results. Kevin Davis, who has been with the company for 17 years, bowed to calls from shareholders and is being replaced by Bernie Dan, the former head of the Chicago Board of Trade (CBOT) derivatives exchange, who joined the company in the summer. Brought low by the credit crisis, the collapse of Lehman Brothers and by a rogue trading scandal, MF Global has lost 90 per cent of its value since Man floated it on the New York Stock Exchange.
http://www.independent.co.uk/news/business/news/mf-globals-chief-executive-exits-after-value-of-derivatives-broker-sinks-by-90-in-a-year-978564.html

Bank of Russia to join MICEX trading next month
http://www.rbcnews.com/free/20081030093329.shtml

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig082108.htm

Now or never for financial watchdogs shake-up
If the banking crisis of 2008 fails to do the trick, then there is little hope Washington will ever summon the will to reorganize its creaking, disjointed system of financial regulation.
http://www.reuters.com/article/reutersEdge/idUSTRE49S6PD20081029

Japan’s Financial Services Agency Strengthens Restrictions On Short Selling
The Financial Services Agency (FSA) decided today to take additional measures to strengthen the restrictions on short selling of stocks.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78473

Fund Managers Are `Sanguine’ on Bonuses, FSA Says (Update1)
Senior hedge fund managers are “overly sanguine” that their long-term bonus systems prevent market abuse, Britain’s financial regulator said today.
http://www.bloomberg.com/apps/news?pid=20601127&sid=aGiccdSLUl_8

FSA fee update: Regulator to help new firms – insurers’ fees to be raised
The FSA is proposing new rules to ensure newly authorised firms and firms extending their permissions are not paying too much in fees and levies in their second year.
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=175704&d=340&h=341&f=342

DFSA Signs MoU With Capital Market Authority of Oman
http://www.complinet.com/dfsa/display/display.html?rbid=1547&element_id=6235

Investments – Indexes – Managed Futures – Managed Funds

U.S.-based Hedge Funds to Cut Total IT Spending by 40% in 2009 to $882 Million, Says New TABB Study
http://tinyurl.com/55pbmp

SAC’s Cohen, Einhorn Raise Money as Most Hedge Funds Shrink
Steven Cohen, David Einhorn, Paul Singer and Alan Howard are doing what most hedge-fund managers can’t these days — raising money from investors.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYUpBdvzdbBw&refer=worldwide

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Regulator likely to delay stock market reforms
THE stock market slump coupled with a global financial meltdown and an economic slowdown has made Chinese financial regulators delay the launch of several market reforms, sources said today.
http://www.shanghaidaily.com/article/?id=378832&type=Business

China hopes for step-by-step progress of low carbon economy
Developing the Low Carbon Economy (LCE), a strategic option to cope with global warming, should follow a step-by-step pattern in accordance with a country’s situation, China’s Vice Environment Minister Zhou Jian said here Thursday.
http://news.xinhuanet.com/english/2008-10/30/content_10283016.htm

China’s Policies and Actions for Addressing Climate Change
Global climate change and its adverse effects are a common concern of mankind.
http://www.egovmonitor.com/node/21786

Chinese Securities Firms Test Systems For Margin Trading
A round of online test over operational systems was conducted in China on October 25, 2008 for the margin trading business to start in the country in the near future, citing a report.
http://www.tradingmarkets.com/.site/news/Stock%20News/1974825/

Regulator likely to delay stock market reforms
THE stock market slump coupled with a global financial meltdown and an economic slowdown has made Chinese financial regulators delay the launch of several market reforms, sources said today
http://www.shanghaidaily.com/sp/article/2008/200810/20081030/article_378832.htm

China to enhance finance monitoring cooperation with Ireland
BEIJING, Oct. 30 (Xinhua) — China’s banking regulator said on Thursday it will enhance financial monitoring cooperation with Irish Financial Services Regulatory Authority (IFSRA).
http://news.xinhuanet.com/english/2008-10/30/content_10283025.htm

Central gov’t pledges support for HK economy
The central government has pledged to help Hong Kong weather global economic turmoil by speeding up infrastructure projects and safeguarding food supplies, the Hong Kong Special Administrative Region’s government said.
http://www.chinadaily.com.cn/bizchina/2008-10/30/content_7159454.htm

Just take a look at what happened to Hong Kong
While the upcoming visit of China’s Association for Relations Across the Taiwan Strait Chairman Chen Yunlin for the second round of talks with Straits Exchange Foundation Chairman Chiang Pin-kung may seem focused on economic issues, we must remember that the Chinese Communist Party (CCP) is a political creature and that the talks will have undertones that will be aimed at damaging Taiwan’s sovereignty.
http://www.taipeitimes.com/News/editorials/archives/2008/10/30/2003427341

Citic Pacific stress tests HK
Doubts have been raised over the future of Hong Kong’s status as an international financial center and its autonomy under the vaunted “one country, two systems” form of government following Citic Pacific’s warning last week that it faced losses of as much as US$2 billion from unauthorized foreign-exchange bets.
http://www.atimes.com/atimes/China_Business/JJ31Cb01.html

FSC Decides to Adopt International Accounting Standards
In line with the practice of the U.S., Taiwan will embrace the adoption of the International Financial Reporting Standards (IFRSs) outright, possibly in 2014, a move which will have the greatest effect on domestic banks and insurance firms, announced the Financial Supervisory Commission (FSC) on Oct. 28.
http://news.cens.com/cens/html/en/news/news_inner_25206.html

Philippine bankers to halve FX trading position-sources
Philippine banks will cut by half their foreign exchange purchases from the market to ease pressures on a weak peso in one of three measures agreed by a big industry group, sources from the group said on Thursday. Banks would also tighten scrutiny of offshore investments of clients to prevent arbitrage and speculation amid the worst financial crisis in decades, members of the influential industry group Bankers Association of the Philippines said.
http://ph.news.yahoo.com/rtrs/20081030/tbs-philippines-economy-banks-8bedc88.html

Goldman hires Citi’s Sondhi for wealth mgmt – sources
Goldman Sachs has hired Ajay Sondhi as a managing director for private wealth management in Asia from Citigroup , where he headed the unit that oversaw rich Indian clients, sources said on Thursday.
http://malaysia.news.yahoo.com/rtrs/20081030/tap-goldmansachs-asia-c3bb44c.html

Mobile Money Ventures Powers Mobile Financial Services for Citibank Hong Kong
Mobile Money Ventures LLC (MMV), a joint venture of Citi (NYSE:C) and SK Telecom (NYSE:SKM), today announced that it is providing Citibank Hong Kong with a new service platform that supports mobile banking and mobile stock trading, giving Citibank Hong Kong customers another way to manage their financial lives quickly, easily and securely. Additionally, MMV has customized features for iPhone 3G users including a mobile stock trading application to enhance the end user experience.
http://www.centredaily.com/business/technology/story/933013.html

Frontier Markets

Trading futures
The crisis has been with us for some time. It is now six weeks since Lehman Brothers went under; it is three weeks since Iceland’s prime minister warned that that country was close to national bankruptcy. Over the past few weeks there has been a flurry of high-level meetings, as global decision-makers slowly begin to understand that this is not a run-of-the-mill sort of crisis, this is something that needs concerted international action. Yet the overall movement in this time has been disappointing. There is general understanding that reform of the sort that Gordon Brown suggested — internationalising regulatory frameworks — will have to be introduced; but there has been absolutely no movement towards outlining what form these new structures will take.
http://www.indianexpress.com/news/Trading-futures/379127

Banks must stick to core competency
Does the Indian Government stand sufficiently chastened by the ongoing financial crisis that has had its roots in the launch of complex financial derivative products (of which many understand little), rampant leveraging, excessive risk taking and ineffective regulation? Lessons have no doubt emanated from the ongoing turmoil and it appears some of them may have been absorbed by policymakers back home.
http://www.thehindubusinessline.com/2008/10/30/stories/2008103050941800.htm

Miscellaneous News

SunGard’s Fame Market Data, News and Alerting Available to NYSE Issuers
http://www.marketwatch.com/news/story/SunGards-Fame-Market-Data-News/story.aspx?guid=%7BFE202256-692C-4FD7-82FC-37475927DC82%7D

National Council On Economic Education (NCEE) President and CEO to Ring the NASDAQ Stock Market Closing Bell
Robert Duvall, President and CEO of the National Council on Economic Education (NCEE), will preside over the Closing Bell in honor of The 2008 Visionary Awards. The NCEE, led by Craig Donohue, CEO of the CME Group, Inc. and Chairman of the Board of Directors of the NCEE, will hold their third-annual Visionary Awards dinner at the St. Regis Hotel in New York City on Thursday, October 30th.
http://www.marketwatch.com/news/story/National-Council-On-Economic-Education/story.aspx?guid=%7B9E225928-E889-4C2C-8DB7-0809C8D691A6%7D

National Council on Economic Education: 2008 Visionary Awards Dinner To Honor Champions of Economic Empowerment
NCEE Visionary Awards will be presented to John W. Rogers, Jr., Mary Schapiro, Julie Stav, and the Verizon Foundation. The Visionary Awards Dinner will be hosted by Craig Donohue, CEO of the Chicago Mercantile Exchange.
http://www.prweb.com/releases/2008/10/prweb1539684.htm

Observations – Statistics – Commentary
Dear Readers:

I was stunned this morning to learn of the death of longtime Liffe executive Juliette Proudlove. Juliette passed away last night after battling cancer for some time. Juliette had many titles over the years at Liffe, including head of corporate communications, but first and foremost she was a great person.

It has been my pleasure and joy to have gotten to know her since I started this newsletter and it is with great sadness that I report her passing. My sympathy goes to her family and many friends, especially in this industry.

Below are comments from two people who knew her better than I, Ray Carmichael of Strategics, Inc. and her former Liffe associate Jim Johanik, now with Tradehelm.

Regards,

John J. Lothian

From Ray Carmichael:

Today this industry lost another great friend and colleague, , or as many of us fondly called her, Jools. She was a short woman with a tall stature. She was feisty for the cause yet did it all with a loving heart. She took the knocks for many because she knew it was the right thing to do.

I knew Jools for some twenty-five years yet I know many in the futures industry who knew her longer. I had the honor of working with her and for her and I learned from her what loyalty was all about. Even when she was in the midst of being treated rather roughly, I never heard a disparaging word from her. She lived that great quote, “Damn the torpedoes, full speed ahead.” I have never known anyone with such vigor, spunk, energy and drive who did it all with love and compassion.

Jools lived through the best of times and the worst of times at Liffe. She hired and mentored many and had to give out the pink slips when times were rough. Yet each time I spoke to her about the hard things she had to do, I heard a crack in her voice, holding back the tears and pain that she felt for the people.

A perfectionist at heart, Jools never let you get away with anything but your best. She was dedicated to bringing out the best in each person and program, but she also knew when to let go – a great quality that is hard to learn.

Jools fought for this industry both on the front lines and behind the scene. She loved both the traders and the politicians. She loved the “members” (when there were such things). She knew them all by name and most importantly she knew them as people.

Jools was one who made the system work, and work well. She lived through more corporate iterations than most of us will ever know and always knew how to get the job done even when she wasn’t sure who her next boss was going to be. And as many of us will remember, she did it all with that infectious high pitched laugh and smile.

I know Jools was in a lot of pain towards the end. I last saw her this summer when I was in London for mutual friend’s memorial service. She wasn’t feeling well enough to go to the service so I went out to her house to spend some time with her in her garden. She seemed pretty frail, but when I had to go she walked me to the train station, kissed me on the cheek and said, “See you at Expo”. It won’t be the same without her.

From Jim Johanik:

John, I’m at a loss for words…..

Juliette’s passing is a tremendous loss for me and for anyone who ever had the opportunity to work with her. During my days with LIFFE I will always remember Juliette as a towering personality in a diminutive frame. She was a friend, a loyal professional, and a caring human being who was always more interested in others than herself.

She will be sorely missed.

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From Homeless to Multimillionaire
It’s not every day you get the chance to pick the brain of a man whose real-life rags-to-riches story was turned into a Hollywood movie starring one of America’s top actors. But the other day I had the opportunity to spend time with Chris Gardner, subject of the 2006 movie The Pursuit of Happyness, in which Gardner was played by Will Smith.
http://news.yahoo.com/s/bw/20081030/bs_bw/jul2007sb20070723608918;_ylt=AlHLcY1RSM_u5j9YJMJ4g7OyBhIF

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Today in NYSE History (NYSE.com)
29 Oct. 1929 — “Black Tuesday” – the most dramatic day of the 1929 Crash. The DJIA was off nearly 12 percent on volume of 16 million shares – a record that would stand for decades.
http://www.nyse.com/about/history/1089312755484.html

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Tapped Out?
A $60 million painting by Kazimir Malevich. A $40 million self-portrait by Francis Bacon. It hardly seems the ideal moment to be selling such pricey art. As Sotheby’s, Christie’s and Phillips de Pury brace for their big fall auctions in New York, starting with a sale of 71 Impressionist and Modern paintings, drawings and sculptures at Sotheby’s on Monday night, anxiety is the dominant mood. Only 10 days ago, Sotheby’s reported a loss of $15 million in guarantees — the undisclosed amount that the houses promise to sellers regardless of the outcome of a sale — from recent auctions in Hong Kong and London. Millions of dollars of art went unsold at those September and October sales, with many works going for well below their estimates. Since then auction house officials have been busy trying to get sellers to lower their expectations. Much of the art up for auction this week and next was secured early in the summer, when the world seemed a far different place. Now, with the net worth of so many buyers plummeting, auction houses have been trying to persuade sellers to lower their reserves, that is, the undisclosed minimum price that a bidder must meet for the art to be sold.
http://www.nytimes.com/2008/11/02/arts/design/02voge.html

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GFI Sponsors ‘Stand Up For Heroes’
Supporting Bob Woodruff Family Foundation
http://www.marketwatch.com/news/story/GFI-Sponsors-Stand-Up-For/story.aspx?guid=%7B29BF4ED9-BF52-4A34-9D78-FB20B08E5A1B%7D

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Important Expo Announcement
You Must Register Online for Expo Prior to Monday, November 10 to Attend the Opening Reception! Even though sessions don’t begin until Tuesday, be sure to arrive early on Monday, November 10 to attend the special kick-off reception in the historic Chicago Stock Exchange Trading Room at the renowned Art Institute of Chicago. The reception begins at 6:00 p.m. An RSVP is not necessary, however you must register to attend the Expo (or conference sessions) online prior to Monday, November 10 in order to attend the opening reception. No on-site registration will be available on Monday.
https://www.futuresindustry.org/expo-2008-online-registration.asp

Expo Preview
http://www.futuresindustry.org/downloads/Expo_Preview.pdf

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Orc Software at FIA Futures & Options Expo 2008
Join Orc Software at the 2008 FIA Futures & Options Expo in Chicago, IL from November 10 – 12. The Expo is one of the largest derivatives-focused events in the world with over 4,000 attendees. Orc Software will be discussing Orc Trading, a best-in-class platform for advanced derivatives trading including algorithmic trading and market making throughout the show.

To schedule a meeting or learn more about Orc Software, please contact sales_chicago@orcsoftware.com

To register for an exhibit hall pass from Orc Software and learn more about the FIA Futures & Options Expo, go to https://www.futuresindustry.org/complimentary-exhibitsonly-pass.asp?spid=2022

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Wall Street’s Jobless Go Back to B-School, This Time to Mix Purple Hooters
Bryan Gunderson tried to master the intricacies of structured-equity investments until he lost his job at JPMorgan Chase & Co. Now he’s learning the subtleties of Purple Hooters.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aAUbEhO7AJH0&refer=news

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MarketsWiki Recent Updates

People

Kevin R. Davis; Mark G. Bagan

Companies, Organizations and Groups

IntercontinentalExchange, Inc.; HSBC Holdings Plc; Boston Options Exchange; BM&FBovespa; Sandler O’Neill‎;

Miscellaneous

Carbon registries; Emergency Economic Stabilization Act of 2008; Deposits

Lead Stories

IntercontinentalExchange, The Clearing Corporation and Nine Major Dealers Announce New Developments in Global CDS Clearing Solution
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global regulated futures exchanges and over-the-counter (OTC) markets, and The Clearing Corporation (TCC), today announced new agreements intended to advance their previously announced joint global clearing solution for Credit Default Swaps (CDS). Together with nine of the major global investment banks who are dealers in the CDS markets, ICE and TCC have entered into memorandums of understanding (MOUs) to develop a joint global clearing solution and to effect the acquisition of TCC by ICE. Under the terms of the new agreements, ICE will acquire TCC and will form ICE US Trust (ICE Trust), a New York limited purpose trust company and subsidiary of ICE, with the support of Bank of America, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Merrill Lynch, Morgan Stanley and UBS. As previously announced, ICE and TCC continue to work closely with regulators, other market participants and industry groups to develop a comprehensive central counterparty clearing solution for the CDS market. This customized solution is currently undergoing final testing in preparation for launch.
http://ir.theice.com/releasedetail.cfm?ReleaseID=344066

Spotlight on role of e-trading in volatility
Hugh Marsden, a London stockbroker since 1960, has seen many bear markets. But the stomach-churning volatility of the past two months is unlike anything he has witnessed before. Now a broker at investment manager Brewin Dolphin, he suspects that electronic trading – and specifically computer-driven algorithmic trading – may be to blame. “I think there’s no doubt that without any human touch you are going to get effects that you cannot necessarily predict,” he says. necessarily predict,” he says. Michael Bloomberg, mayor of New York and founder of the financial information business that made him his fortune, told a securities industry conference this week: “Computers are deciding when to buy and when to sell. When the herd mentality gets automated, the stampede [in and out of markets] gets turbocharged.”
http://news.yahoo.com/s/ft/20081029/bs_ft/fto102920081557599082

Intercontinental to Buy Clearing Corp. in CDS Plan
By Matthew Leising
Oct. 30 (Bloomberg) — Intercontinental Exchange Inc., the second-largest U.S. futures market, will buy the Clearing Corp., its partner in a plan to guarantee trades in the $55 trillion credit-default swap market. Intercontinental has signed memorandums of understanding with the nine banks that own the Clearing Corp., including Bank of America Corp. and Goldman Sachs Group Inc., the Atlanta-based exchange known as ICE said in a statement today. Terms of the acquisition weren’t released. ICE Chief Executive Officer Jeff Sprecher, 53, has increased volume by acquiring exchanges as his company benefits from the energy commodities boom. ICE is vying to guarantee trades in the credit-default swap market after the contracts contributed to the failure of Lehman Brothers Holdings Inc. last month and forced the U.S. government to provide American International Group Inc. with a $123 billion cash infusion.

A Question for A.I.G.: Where Did the Cash Go?
The American International Group is rapidly running through $123 billion in emergency lending provided by the Federal Reserve, raising questions about how a company claiming to be solvent in September could have developed such a big hole by October. Some analysts say at least part of the shortfall must have been there all along, hidden by irregular accounting.
http://www.nytimes.com/2008/10/30/business/30aig.html?em

Japan announces $275 billion stimulus package
TOKYO – Japanese Prime Minister Taro Aso announced a 27 trillion yen ($275 billion) stimulus package to shore up the world’s No. 2 economy Thursday, vowing to dispel fears over the global financial crisis with expanded credits for small businesses and a cash payback to every household.
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/as_japan_stimulus_package;_ylt=Aga3TXyv5LDgiFfajcGvcIpu24cA

Goldman Sachs ready to hand out £7bn salary and bonus package… after its £6bn bail-out
Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses – despite asking the U.S. government for an emergency bail-out.
http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package–6bn-bail-out.html?ITO=1490

Wall Street Won’t Surrender on Bonuses, Veterans Say (Update1)
Wall Street’s chief executives will hunker down and pay bonuses this year in the face of the worst financial crisis since the Great Depression, a taxpayer bailout and mounting political outcry, industry veterans say.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a07o5ltdIKLg&refer=us

Debt Protection Costs Plunge on Swap Agreements, Lower Rates
Oct. 30 (Bloomberg) — The cost of protecting Asia-Pacific bonds from default tumbled after the Federal Reserve increased cross-border funding and the U.S., China, Hong Kong and Taiwan cut interest rates to boost economic growth. The benchmark index of credit risk for investment-grade borrowers in Asia outside Japan fell the most since it was created in September 2007. The Markit iTraxx Asia credit-default swap index of 50 borrowers, including Thailand and Hong Kong’s Hutchison Whampoa Ltd., fell 110 basis points to 450, according to ICAP Plc data as of 3:22 p.m. in Hong Kong.
http://www.bloomberg.com/apps/news?pid=20601080&sid=azS9w15coauA&refer=asia

Fed Comes To Rescue Of South Korea
As South Korea ran into a severe scarcity of dollars amid the global credit crisis, the U.S. Federal Reserve lent a helping hand, providing a multibillion-dollar line of liquidity to the country’s central bank. The move will help stem the won’s steep slide, which has made borrowing from abroad more expensive and raised concerns about South Korea’s risk of default.
http://www.forbes.com/markets/2008/10/30/fed-currency-swap-markets-econ-cx_twdd_1030markets3.html

Ex-Fannie Mae chief wishes he said “no” more often: report
Former Fannie Mae Chief Executive Daniel Mudd wished he said “no” to more of the things the company was asked to do, he told the Wall Street Journal in an interview.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_fannie_mudd;_ylt=Ao0lapf6d1A6VcXO0UGSOki573QA

America Needs an Independent Clearinghouse for OTC, CDS
http://seekingalpha.com/article/102576-america-needs-an-independent-clearinghouse-for-otc-cds?nick_was_taken=&additional_ids=294076#comment-294076

Outside risk advice seen as best for central banks
One of the most striking figures contained in this week’s Bank of England’s financial stability report concerns the amount of money central banks and governments have pledged to support funding markets since April: £5,000bn.
http://news.yahoo.com/s/ft/20081029/bs_ft/fto102920081557589080;_ylt=ArA8G_1lDb0oSmQE9Mm6x7L2ULEF

Insight: The CDS sector is not the central villain
Last week saw an important milestone in the credit default swaps sector, when counterparties to CDS trades on Lehman Brothers cash-settled their transactions.
http://www.ft.com/cms/s/0/9e609634-a5d4-11dd-9d26-000077b07658.html

Greenspan Slept as Off-Balance-Sheet Toxic Debt Evaded Scrutiny
As George Miller welcomed 60 bankers to the chandeliered Charlotte City Club one evening in September, the focus was on more than the recent bankruptcy of Lehman Brothers Holdings Inc. From their 31st-floor perch, members of the American Securitization Forum, which Miller leads, fretted about the future of their $10.7 trillion industry.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYJZOB_gZi0I&refer=home

Kass: Private Equity Is the Next Shoe to Drop
The casualty count in the world of finance is about to expand in scope. At the epicenter of the leveraged binge of the last decade were the private equity shops’ “deals.” These firms funded their “products” to individuals, endowments, hedge funds and to other institutions around the world with the promise of turning waste into gold.
http://www.thestreet.com/story/10445033/1/kass-private-equity-is-the-next-shoe-to-drop.html

CBS posts $12.5 billion loss with write-down
CBS Corp reported a massive quarterly loss on Thursday, as a rapidly deteriorating advertising market tarnished the TV and radio broadcaster’s results and the economic crisis prompted it to take a $14 billion non-cash charge.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_cbs;_ylt=AtZNLvM9TlmkXGodpAj0Q26573QA

Exxon Mobil posts biggest US quarterly profit ever
Exxon Mobil Corp., the world’s largest publicly traded oil company, says it shattered its own record for the biggest profit from operations by a U.S. corporation, earning $14.83 billion in the third quarter.
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/earns_exxon_mobil

Shift to cleared trade could unblock oil markets
Exchange-style clearing offers a way forward for the multi-billion dollar over-the-counter market in oil derivatives that has seized up because of the credit crisis.
Volumes of over-the-counter (OTC) trade slumped in September after the crisis in the banking sector made participants nervous about counterparty credit risk.
http://www.guardian.co.uk/business/feedarticle/7956989

The Mais Lecture On ‘Maintaining Stability In A Global Economy’ Given By The UK Chancellor Of The Exchequer At The Cass Business School, London EC1
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78477

NZX Acquires ProFarmer Australia Pty Limited
NZX today announced the acquisition of Australian-based ProFarmer Australia Limited Pty. ProFarmer, established in 1994, is based in Perth, Australia. ProFarmer is Australia’s leading provider of agricultural news, commodity market information and strategic grain market analysis, which it provides to customers via weekly newsletters, market price updates and specialist reports. ProFarmer also provides historical agricultural commodity price data and farm consulting, training and other agri-business services to grain farmers and leading market analysts.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78474

Environmental Trading News

Carbon market’s future hangs in the balance
LONDON, Oct 29 (Reuters) – The future of global carbon markets is finely poised as recession threatens the political will to shoulder costs but New Zealand, Australia and Japan follow Europe with their own cap and trade schemes.
http://www.guardian.co.uk/business/feedarticle/7952434

Study: Cleantech funding hit record $1.6B in Q3
Capital investments in U.S. cleantech companies reached a record $1.6 billion in the third quarter, according to an Ernst & Young LLP analysis based on data from Dow Jones VentureSource. A total of $3.3 billion was invested in the first three quarters of 2008, surpassing the figure for the same period last year by 71 percent, the report said.
http://www.bizjournals.com/baltimore/stories/2008/10/27/daily38.html?ana=from_rss

Govt ‘still considering options’ for emissions trading targets
Prime Minister Kevin Rudd says the Government will look at a range of reduction targets and carbon prices before deciding on a final emissions trading policy later this year.
http://au.news.yahoo.com/a/-/latest/5113239/govt-still-considering-options-for-emissions-trading-targets/

Point Carbon Foresees Major Changes in REC Markets
New Report Explains Impacts of Carbon Caps on Renewable Energy Certificates and Carbon Offset Credits; Offers Recommendations to Buyers, Sellers and Regulators

Emissions trading ‘to cost $1 a day’
Emissions trading will cost households a dollar a day when it starts in 2010. Comprehensive economic modelling released by Treasury on Thursday has painted a rosy picture of how emissions trading will affect the economy and households.
http://au.news.yahoo.com/a/-/latest/5113006/emissions-trading-to-cost-1-a-day/

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

CME Globex Notice
http://view.exacttarget.com/

IntercontinentalExchange Reports Third Quarter 2008 Earnings; Diluted EPS of $1.04, up 12%
IntercontinentalExchange, Inc. (NYSE: ICE), a leading operator of global exchanges and over-the-counter (OTC) markets, reported consolidated net income for the third quarter of 2008 of $75 million, a 12% increase compared to $67 million for the third quarter of 2007. Diluted earnings per share (EPS) in the third quarter were $1.04, up 12% over the prior year’s third quarter of $0.93. Consolidated revenues in the third quarter rose to $201 million, the second highest quarterly revenues in the company’s history and a 33% increase over third quarter 2007 revenues of $152 million. Revenue of $606 million in the first nine months of 2008 has already set a new annual record, surpassing the 2007 full-year record.
http://ir.theice.com/releasedetail.cfm?ReleaseID=344068

CME quarterly profit falls on writedowns
http://us.rd.yahoo.com/finance/external/reuters/SIG=1165jh9eu/*http://www.reuters.com/legacyArticle?duid=mtfh20922_2008-10-29_23-30-24_n29499859_newsml&rpc=44&type=marketsNews

CME 3rd-qtr profit falls 16 percent on charges
http://finance.yahoo.com/news/CME-3rdqtr-profit-falls-16-apf-13410519.html

Earnings Slide 16% at CME Group
CME Group Inc.’s third-quarter net income fell 16% despite a “strong” rate per contract, largely because of a tax adjustment.
http://online.wsj.com/article/SB122531285721881437.html?mod=yahoo_hs&ru=yahoo

CME Group Inc. Reports Strong Third-Quarter Revenues and Operating Income
http://finance.yahoo.com/news/CME-Group-Inc-Reports-Strong-prnews-13408232.html

LSE delays plans for Russia office
The London Stock Exchange has put on the back burner plans to open an office in Russia, once one of the most promising sources of initial public offerings, due to “market conditions”. “We continually monitor our options with regard to the further development of our business in Russia, including the opening of an office in Moscow, which remains under consideration,” the LSE said.
http://www.ft.com/cms/s/9fac6e7c-a620-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F9fac6e7c-a620-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

‘Baikal’ strategy remains unclear
When Lehman Brothers collapsed, one of the issues lost in the storm of the fallout was what would happen to a key part of its business in Europe: the 700-strong equities trading team, based in London. Lehman was the largest provider of share trading orders to the London Stock Exchange, as well as being the exchange’s main corporate broker.
http://www.ft.com/cms/s/ad317176-a622-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fad317176-a622-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

NYSE Euronext to Issue Third-Quarter 2008 Financial Results and Conduct Conference Call on October 31, 2008
NYSE Euronext (NYX) will announce corporate earnings for the third-quarter 2008, ending September 30, 2008, before the market opens on Friday, October 31, 2008. A news release will be issued at approximately 3:30 a.m. (New York)/ 8:30 a.m. (Paris) and a conference call with remarks by NYSE Euronext senior management will begin at 8:00 a.m. (New York)/ 1:00 p.m. (Paris).
http://www.nyse.com

Deutsche Börse: Social and Community Commitment in Q3
http://deutsche-boerse.com/dbag/dispatch/en/notescontent/gdb_navigation/press/10_Latest_Press_Releases/INTEGRATE/mr_pressreleases?notesDoc=7E54A2C031ACF248C12574F2003B7EBD&newstitle=deutscheboerse:socialandcommun&location=press

Quadriserv, Inc. and Cinnober advance development of the AQS(TM) Securities Lending Platform
Quadriserv, Inc., and Cinnober announced today that they have completed integration testing and are currently conducting industry-wide testing of Quadriserv’s AQS securities lending platform. This milestone materially advances Quadriserv’s objective of launching AQS on schedule in early 2009. As recently announced, Quadriserv and the Options Clearing Corporation (“OCC”) are working collaboratively to provide clearinghouse services for all securities lending transactions submitted through AQS, enhancing market structure, transparency and efficiency.
http://hugin.info/139660/R/1264915/278152.pdf

Bond Exchange Of South Africa: Statement By The Board Of Directors
Following BESA’s announcement on Monday 27 October in response to the JSE’s firm intention to make an offer to shareholders for their shares in BESA, the board re-iterates that it is taking independent advice on the offer. The board will as soon as possible communicate its formal response to the offer in terms of the Rules of the Securities Regulation Panel.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78486

Julia Sanz López, New Independent Director Of Bolsas y Mercados Españoles
The Board of Directors of Bolsas y Mercados Españoles (BME) today agreed to appoint Julia Sanz López as a new Board member. The appointment was made during the company’s meeting, held today, at the request of the Nomination and Remuneration Committee.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78485

Russia MICEX halts stock trade as index surges
http://malaysia.news.yahoo.com/rtrs/20081030/tbs-markets-russia-halt-7318940.html

ACGC SUBMITS ITS GUIDEBOOK FOR AUDIT COMMITTEES IN SINGAPORE TO MAS, ACRA AND SGX
~ A PRESS RELEASE BY THE AUDIT COMMITTEE GUIDANCE COMMITTEE
http://info.sgx.com/webnewscentre.nsf/bcb6f015b16e5258482569a7001af139/48256838002f07b1482574f200374e57?OpenDocument

Volkswagen AG: Adjustment of Minimum Price Change in Futures Contracts
http://www.eurexchange.com/download/documents/circulars/cf2642008e.pdf

HKFE Announces Revised Margins For Futures Contracts
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78479

Initial Margin For FORTS Trades Increased For Public Holidays
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78478

Brokers & Dark Pools

Deutsche Bank reports surprise 3rd-quarter profit
Deutsche Bank AG reported a surprise third-quarter profit on Thursday, helped by new European Union accounting rules that limited its write-downs to 1.2 billion euros ($1.5 billion).
http://news.yahoo.com/s/ap/20081030/ap_on_bi_ge/eu_germany_earns_deutsche_bank;_ylt=AtuWFlOW4FBYCEf84fxl4reyBhIF

DTCC Successfully Closes out Lehman Brothers Bankruptcy
NEW YORK, Oct 30, 2008 (BUSINESS WIRE) — The Depository Trust & Clearing Corporation (DTCC), the leading post-trade clearance and settlement infrastructure for the U.S. capital markets, announced today that it successfully closed out over $500 billion in market participants’ exposure from the Lehman Brothers, Inc. (Lehman) bankruptcy which occurred the week of Sept. 22. This was the largest close-out in DTCC’s history. DTCC reports it does not expect there to be any impact to its retained earnings or to market participants’ clearing fund deposits as a result of closing out these pending trade obligations.
http://www.marketwatch.com/news/story/DTCC-Successfully-Closes-out-Lehman/story.aspx?guid=%7BA6E847E2-05A3-4123-845E-4C33FA0AE745%7D

Questions emerge over dark pool share trading project as dust from Lehman collapse begins to clear
When Lehman Brothers collapsed, one question lost in the fallout was the fate of a key part of its European business: the 700-strong equities trading team based in London, writes Jeremy Grant in London. Lehman had been the largest provider of share trading orders to the London Stock Exchange and was also the exchange’s main corporate broker, advising on strategic issues.
http://www.ft.com/cms/s/c58872d8-a622-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc58872d8-a622-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fsearch.ft.com%2Fsearch%3FqueryText%3Djeremy%2Bgrant%26aje%3Dtrue%26dse%3D%26dsz%3D

Merrill Lynch, Goldman Sachs, J.P. Morgan and Credit Suisse Provide Strategic Investment to Accelerate FTEN Inc Global Expansion
FTEN, Inc. (“FTEN”) announced today that Merrill Lynch (MER), Goldman Sachs (GS), J.P. Morgan (JPM) and Credit Suisse (CS) have provided a strategic investment to accelerate expansion of FTEN’s risk management, compliance, high-frequency trading gateway, and market data offerings for multi-asset class and multi-prime broker sponsored access in Europe and Asia.
http://tinyurl.com/67abn4

Barclays told clients AIG fund was ‘secure’
Barclays Wealth is facing questions after describing the recently frozen AIG enhanced fund as an “extremely secure account” offering “instant access” to funds in client correspondence.
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=175567&d=340&h=341&f=342

Credit Suisse aims to benefit from UBS weakness in U.S: report
Credit Suisse Group AG aims to benefit from rival UBS AG’s weakness in the United States, its chief executive said in an interview published on Thursday.
http://news.yahoo.com/s/nm/20081030/bs_nm/us_creditsuisse;_ylt=AoncfdQ_64.o6Yogi3B85zq573QA

Goldman Sees No Limits on Leverage, Analyst Says
Goldman Sachs may have morphed into a bank holding company, but the Wall Street firm doesn’t feel compelled to lower its leverage or pull back in any of its business lines.
http://dealbook.blogs.nytimes.com/2008/10/30/goldman-sees-no-limits-on-leverage-analyst-says/

How Goldman Will Keep Its Elite
It seems like an odd moment for Goldman Sachs to cut the number of bankers it admits to its coveted inner circle of partners, Breakingviews muses.
http://dealbook.blogs.nytimes.com/2008/10/30/how-goldman-will-keep-its-elite/

HSBC installs biometrics
HSBC has become the first bank to install facial-recognition technology at its two new data centres in the UK following recent high-profile cases of identity theft.
http://www.theengineer.co.uk/Articles/Article.aspx?liArticleID=308638

Barclays takes Lehman team back into munis
Tuesday marked a milestone of sorts for Barclays Capital in the U.S. municipal bond market. The investment banking unit of British bank Barclays Plc (BARC.L: Quote, Profile, Research, Stock Buzz) won its first competitive deal and priced its first negotiated deal as senior underwriter.
http://www.reuters.com/article/reutersEdge/idUSTRE49S8J220081029

optionsXpress® Launches First Interactive Trading Quotient Test ”What’s Your TQ Score?”
optionsXpress Holdings, Inc. (Nasdaq: OXPS) today announced it has launched Trading Quotient, an interactive tool which allows investors to measure their investing aptitude while also competing against their peers. Dubbed “TQ,” this interactive test utilizes game-like functions to provide an aptitude score. TQ also guides users to free educational resources that help improve areas of weakness revealed by the test.
http://tinyurl.com/5bpeoe

MF Global’s chief executive exits after value of derivatives broker sinks by 90% in a year
MF Global, the derivatives broker spun off from FTSE 100 hedge fund giant Man Group last year, has ousted its long-time chief executive and issued another set of disappointing results. Kevin Davis, who has been with the company for 17 years, bowed to calls from shareholders and is being replaced by Bernie Dan, the former head of the Chicago Board of Trade (CBOT) derivatives exchange, who joined the company in the summer. Brought low by the credit crisis, the collapse of Lehman Brothers and by a rogue trading scandal, MF Global has lost 90 per cent of its value since Man floated it on the New York Stock Exchange.
http://www.independent.co.uk/news/business/news/mf-globals-chief-executive-exits-after-value-of-derivatives-broker-sinks-by-90-in-a-year-978564.html

Bank of Russia to join MICEX trading next month
http://www.rbcnews.com/free/20081030093329.shtml

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig082108.htm

Now or never for financial watchdogs shake-up
If the banking crisis of 2008 fails to do the trick, then there is little hope Washington will ever summon the will to reorganize its creaking, disjointed system of financial regulation.
http://www.reuters.com/article/reutersEdge/idUSTRE49S6PD20081029

Japan’s Financial Services Agency Strengthens Restrictions On Short Selling
The Financial Services Agency (FSA) decided today to take additional measures to strengthen the restrictions on short selling of stocks.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78473

Fund Managers Are `Sanguine’ on Bonuses, FSA Says (Update1)
Senior hedge fund managers are “overly sanguine” that their long-term bonus systems prevent market abuse, Britain’s financial regulator said today.
http://www.bloomberg.com/apps/news?pid=20601127&sid=aGiccdSLUl_8

FSA fee update: Regulator to help new firms – insurers’ fees to be raised
The FSA is proposing new rules to ensure newly authorised firms and firms extending their permissions are not paying too much in fees and levies in their second year.
http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=175704&d=340&h=341&f=342

DFSA Signs MoU With Capital Market Authority of Oman
http://www.complinet.com/dfsa/display/display.html?rbid=1547&element_id=6235

Investments – Indexes – Managed Futures – Managed Funds

U.S.-based Hedge Funds to Cut Total IT Spending by 40% in 2009 to $882 Million, Says New TABB Study
http://tinyurl.com/55pbmp

SAC’s Cohen, Einhorn Raise Money as Most Hedge Funds Shrink
Steven Cohen, David Einhorn, Paul Singer and Alan Howard are doing what most hedge-fund managers can’t these days — raising money from investors.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYUpBdvzdbBw&refer=worldwide

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Regulator likely to delay stock market reforms
THE stock market slump coupled with a global financial meltdown and an economic slowdown has made Chinese financial regulators delay the launch of several market reforms, sources said today.
http://www.shanghaidaily.com/article/?id=378832&type=Business

China hopes for step-by-step progress of low carbon economy
Developing the Low Carbon Economy (LCE), a strategic option to cope with global warming, should follow a step-by-step pattern in accordance with a country’s situation, China’s Vice Environment Minister Zhou Jian said here Thursday.
http://news.xinhuanet.com/english/2008-10/30/content_10283016.htm

China’s Policies and Actions for Addressing Climate Change
Global climate change and its adverse effects are a common concern of mankind.
http://www.egovmonitor.com/node/21786

Chinese Securities Firms Test Systems For Margin Trading
A round of online test over operational systems was conducted in China on October 25, 2008 for the margin trading business to start in the country in the near future, citing a report.
http://www.tradingmarkets.com/.site/news/Stock%20News/1974825/

Regulator likely to delay stock market reforms
THE stock market slump coupled with a global financial meltdown and an economic slowdown has made Chinese financial regulators delay the launch of several market reforms, sources said today
http://www.shanghaidaily.com/sp/article/2008/200810/20081030/article_378832.htm

China to enhance finance monitoring cooperation with Ireland
BEIJING, Oct. 30 (Xinhua) — China’s banking regulator said on Thursday it will enhance financial monitoring cooperation with Irish Financial Services Regulatory Authority (IFSRA).
http://news.xinhuanet.com/english/2008-10/30/content_10283025.htm

Central gov’t pledges support for HK economy
The central government has pledged to help Hong Kong weather global economic turmoil by speeding up infrastructure projects and safeguarding food supplies, the Hong Kong Special Administrative Region’s government said.
http://www.chinadaily.com.cn/bizchina/2008-10/30/content_7159454.htm

Just take a look at what happened to Hong Kong
While the upcoming visit of China’s Association for Relations Across the Taiwan Strait Chairman Chen Yunlin for the second round of talks with Straits Exchange Foundation Chairman Chiang Pin-kung may seem focused on economic issues, we must remember that the Chinese Communist Party (CCP) is a political creature and that the talks will have undertones that will be aimed at damaging Taiwan’s sovereignty.
http://www.taipeitimes.com/News/editorials/archives/2008/10/30/2003427341

Citic Pacific stress tests HK
Doubts have been raised over the future of Hong Kong’s status as an international financial center and its autonomy under the vaunted “one country, two systems” form of government following Citic Pacific’s warning last week that it faced losses of as much as US$2 billion from unauthorized foreign-exchange bets.
http://www.atimes.com/atimes/China_Business/JJ31Cb01.html

FSC Decides to Adopt International Accounting Standards
In line with the practice of the U.S., Taiwan will embrace the adoption of the International Financial Reporting Standards (IFRSs) outright, possibly in 2014, a move which will have the greatest effect on domestic banks and insurance firms, announced the Financial Supervisory Commission (FSC) on Oct. 28.
http://news.cens.com/cens/html/en/news/news_inner_25206.html

Philippine bankers to halve FX trading position-sources
Philippine banks will cut by half their foreign exchange purchases from the market to ease pressures on a weak peso in one of three measures agreed by a big industry group, sources from the group said on Thursday. Banks would also tighten scrutiny of offshore investments of clients to prevent arbitrage and speculation amid the worst financial crisis in decades, members of the influential industry group Bankers Association of the Philippines said.
http://ph.news.yahoo.com/rtrs/20081030/tbs-philippines-economy-banks-8bedc88.html

Goldman hires Citi’s Sondhi for wealth mgmt – sources
Goldman Sachs has hired Ajay Sondhi as a managing director for private wealth management in Asia from Citigroup , where he headed the unit that oversaw rich Indian clients, sources said on Thursday.
http://malaysia.news.yahoo.com/rtrs/20081030/tap-goldmansachs-asia-c3bb44c.html

Mobile Money Ventures Powers Mobile Financial Services for Citibank Hong Kong
Mobile Money Ventures LLC (MMV), a joint venture of Citi (NYSE:C) and SK Telecom (NYSE:SKM), today announced that it is providing Citibank Hong Kong with a new service platform that supports mobile banking and mobile stock trading, giving Citibank Hong Kong customers another way to manage their financial lives quickly, easily and securely. Additionally, MMV has customized features for iPhone 3G users including a mobile stock trading application to enhance the end user experience.
http://www.centredaily.com/business/technology/story/933013.html

Frontier Markets

Trading futures
The crisis has been with us for some time. It is now six weeks since Lehman Brothers went under; it is three weeks since Iceland’s prime minister warned that that country was close to national bankruptcy. Over the past few weeks there has been a flurry of high-level meetings, as global decision-makers slowly begin to understand that this is not a run-of-the-mill sort of crisis, this is something that needs concerted international action. Yet the overall movement in this time has been disappointing. There is general understanding that reform of the sort that Gordon Brown suggested — internationalising regulatory frameworks — will have to be introduced; but there has been absolutely no movement towards outlining what form these new structures will take.
http://www.indianexpress.com/news/Trading-futures/379127

Banks must stick to core competency
Does the Indian Government stand sufficiently chastened by the ongoing financial crisis that has had its roots in the launch of complex financial derivative products (of which many understand little), rampant leveraging, excessive risk taking and ineffective regulation? Lessons have no doubt emanated from the ongoing turmoil and it appears some of them may have been absorbed by policymakers back home.
http://www.thehindubusinessline.com/2008/10/30/stories/2008103050941800.htm

Miscellaneous News

SunGard’s Fame Market Data, News and Alerting Available to NYSE Issuers
http://www.marketwatch.com/news/story/SunGards-Fame-Market-Data-News/story.aspx?guid=%7BFE202256-692C-4FD7-82FC-37475927DC82%7D

National Council On Economic Education (NCEE) President and CEO to Ring the NASDAQ Stock Market Closing Bell
Robert Duvall, President and CEO of the National Council on Economic Education (NCEE), will preside over the Closing Bell in honor of The 2008 Visionary Awards. The NCEE, led by Craig Donohue, CEO of the CME Group, Inc. and Chairman of the Board of Directors of the NCEE, will hold their third-annual Visionary Awards dinner at the St. Regis Hotel in New York City on Thursday, October 30th.
http://www.marketwatch.com/news/story/National-Council-On-Economic-Education/story.aspx?guid=%7B9E225928-E889-4C2C-8DB7-0809C8D691A6%7D

National Council on Economic Education: 2008 Visionary Awards Dinner To Honor Champions of Economic Empowerment
NCEE Visionary Awards will be presented to John W. Rogers, Jr., Mary Schapiro, Julie Stav, and the Verizon Foundation. The Visionary Awards Dinner will be hosted by Craig Donohue, CEO of the Chicago Mercantile Exchange.
http://www.prweb.com/releases/2008/10/prweb1539684.htm

FIA Futures Cares Charity Dinner gives companies and individuals in the futures and options industry the opportunity to provide funds to feed people in need. All proceeds from the dinner benefit the Greater Chicago Food Depository, a nonprofit food distribution and training center providing food for hungry people. The Food Depository distributes donated and purchased food through a network of 600 food pantries, soup kitchens and shelters to 500,000 adults and children every year. Last year, the Food Depository distributed more than 46 million pounds of nonperishable food and fresh produce, dairy products and meat, the equivalent of more than 95,000 meals every day.

Honorary Committee:

• Terrence Duffy, CME Group, Event Chairman
• William Brodsky, Chicago Board Options Exchange
• Bernie Dan, MF Global
• Chris Hehmeyer, Penson GHCO
• Jim Heinz, Marquette Partners
• Rob Moore, Marquette Partners
• Richard Sandor, Chicago Climate Exchange
• Jeffrey Sprecher, IntercontinentalExchange
• Donald Wilson, DRW Trading Group

Click here to purchase FIA Futures Cares Charity Dinner tickets.
http://www.chicagosfoodbank.org/fia

Click here for a PDF with more information on how you can help.
http://www.futuresindustry.org/downloads/CharityDinnerSponsorship.pdf

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Short Sellers Aren’t Jackals, They’re Bears, Fleckenstein Says
A six-foot stuffed grizzly bear guards the entrance to the offices of Fleckenstein Capital Inc., located on a quiet, leafy street in the Capitol Hill neighborhood of Seattle. The bear sends a clear message: The man inside, Bill Fleckenstein, founder and president of the firm, is a short seller and proud of it.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a758oOpYTQrE&refer=home

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Social Media Redefining Retail Financial Services Web Experience
Corporate Insight today released a new groundbreaking report detailing the evolution of social media – such as blogs, forums and online communities – among major financial services companies, providing a clear understanding of market trends and leading tactics. The research reveals that social media is beginning to reshape the way financial services firms communicate with their customers, as well as how investors interact with each other.
http://biz.yahoo.com/bw/081029/20081029005977.html

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Lead Stories

MF Global Appoints Bernard W. Dan as Chief Executive Officer; Kevin R. Davis Resigns After 17 Years with the Company
MF Global Ltd. (NYSE: MF), a leading broker of exchange-traded futures and options, announced the company’s board of directors has appointed Bernard W. Dan, currently president and chief operating officer, as chief executive officer, effective immediately. He will succeed Kevin R. Davis, who has resigned from the company and its board of directors after 17 years with MF Global.
http://www.mfglobalinvestorrelations.com/phoenix.zhtml?c=194911&p=irol-newsArticle&ID=1218872&highlight=

Citadel Drops ELX Board Seat; Will Remain User – Source
Citadel Investment Group is reducing its ties with a planned rival to CME Group Inc. (CME) in favor of its new joint venture with the Chicago derivatives exchange operator.
http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200810291212DOWJONESDJONLINE000770_univ.xml

Detailed talks begin on credit derivatives clearing house
Regulators yesterday started a series of detailed meetings with potential providers of a clearing house for the thus-far unregulated credit derivatives market. The move is part of efforts to kickstart implementation of this crucial risk-reduction plan by next month. The meetings, held in New York and likely to continue for several days, are being attended by representatives from the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The regulators have decided to work closely together to ensure that a clearing house meets all of their requirements, according to people involved in the discussions.
http://www.ft.com/cms/s/1bf9100c-a559-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F1bf9100c-a559-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

CME Group Profit Rises on Equity Index Trades, Nymex Contracts
By Matthew Leising
Oct. 29 (Bloomberg) — CME Group Inc., the world’s largest futures market, said third-quarter profit rose 3 percent as volatility in stock markets triggered by economic uncertainty led to record trading in equity index and currency derivatives. Net income rose to $278 million, or $4.13 a share, from $269 million, or $4, a year earlier, Chicago-based CME said in a statement distributed by PR Newswire. Revenue rose 6 percent to $787 million. CME Group controls 97 percent of U.S. futures trading.

Davis quits as MF Global chief
The chief executive of MF Global, one of the world’s biggest financial derivatives brokerages, on Wednesday bowed to investor demands to resign, capping a disastrous year for the company during which it has lost more than 90 per cent of its value. Kevin Davis, who had led the brokerage for a decade, leaves a company much weakened following its spin-off last year from Man Group, the London-listed hedge-fund manager. MF Global’s share price, which was trading at more than $30 in January, closed at $2.25 on Tuesday.
http://www.ft.com/cms/s/c92dfd18-a5be-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc92dfd18-a5be-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus

Citadel, Allying With CME Group, Said to Give Up ELX Board Seat
By Matthew Leising
Citadel Investment Group LLC fortified its ties to CME Group Inc. by dropping off the board of the Electronic Liquidity Exchange, a would-be competitor to the Chicago market, said three people familiar with the decision. Citadel, the $16 billion hedge fund firm, had placed Faraz Javaid, its head of business development for high-speed trading, on ELX’s board. He’s forfeiting his seat as Citadel ramps up its collaboration with CME Group on a plan to capture trading in credit-default swaps, according to the people, who declined to be identified because Javaid’s departure hasn’t been disclosed. ELX, formed in 2007 by a group of banks and hedge funds including Citadel, has said it plans to compete for trades in CME Group’s $209 trillion Treasury futures market.

McCreevy weighs up code of conduct for derivatives market
The European Commission has floated the issue of whether there should be choice in where exchange-traded derivatives trades are cleared, in the latest sign that the financial crisis is prompting a rethink of the way securities and derivatives markets are structured and regulated. Charlie McCreevy, EU internal markets commissioner, is examining whether to extend a so-called code of conduct he brokered two years ago with exchanges and providers of post-trade services beyond cash equities to derivatives. The code of conduct is a non-binding agreement designed to open the way for market participants trading shares in Europe to be able to chose where their shares are cleared, once they have executed trades on a European exchange or alternative trading facility.
http://www.ft.com/cms/s/17f4b888-a55b-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F17f4b888-a55b-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

World According to TARP No Laughing Matter for U.S. (Update1)
The financial crisis exacerbated by credit derivatives is costing so much to fix that speculators are now using those same instruments to bet on governments as the price tag for bailing out banks approaches $3 trillion.
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=a2VdrjC1TWxE

Nasdaq, NYSE want global answers to OTC problems
The chief executives of the two largest U.S. equities exchange operators, Nasdaq OMX (NDAQ.O: Quote, Profile, Research, Stock Buzz) and NYSE Euronext Inc (NYX.N: Quote, Profile, Research, Stock Buzz), expressed on Tuesday a preference for global solutions to recent OTC market problems, rather than a U.S.-only approach.
http://www.reuters.com/article/americasRegulatoryNews/idUSN2841945520081028

Exchanges must submit CDS plans to Federal Reserve by Friday
Major exchanges vying for a role in a possible clearinghouse for credit default swaps must present their proposal to the Federal Reserve by Friday, a New York Fed spokesman said on Tuesday. The $55 trillion market, criticised as a major contributor to the current financial crisis, is heading for much tighter regulation and a number of exchanges are trying to get a piece of the action.
http://www.reuters.com/article/marketsNews/idUSN2859006320081028

Fed Sets Deadline for Details on Backing Credit Swaps
The Federal Reserve has given U.S. futures exchanges until Oct. 31 to present written plans on how they’ll make the $55 trillion credit swaps market less risky, according to four people familiar with the discussions.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCTW7d3Af.og&refer=home

BM&F CFO Says Extent of Derivatives Losses Is Unknown (Update1)
Brazilian financial regulators don’t know the full extent of losses on currency derivatives owned by the country’s companies, BM&FBovespa SA Chief Financial Officer Carlos Kawall said. “Most of the problems occurred in the over-the-counter contracts and because of lack of transparency, no one knows the size of the problem,” Kawall said at a conference in New York.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aCDdpYoiW.Ms&refer=latin_america

Citigroup, Credit Suisse Link Loans to Swaps in Shift (Update3)
Citigroup Inc. and Credit Suisse Group AG are among banks tying corporate loan rates to credit- default swaps, raising borrowing costs and exposing companies to derivatives accused of crippling the financial system.
http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_C/threadview?m=tm&bn=2895&tid=347304&mid=347304&tof=6&frt=2

Goldman Sachs Names 94 Partners
Goldman Sachs has added 94 names to its elite list of partners, continuing a tradition whose roots go back to the firm’s long history as a private firm. Membership in the partnership pool is one of Goldman’s highest honors, and it comes with the right to share in a special bonus pool. New partners are named every two years. Goldman’s additions for 2008 include Jan Hatzius, Goldman’s chief U.S. economist; and L. Brooks Entwistle, who runs the company’s banking operations in India, Bloomberg said, citing an internal memo that a company spokeswoman confirmed was authentic.
http://dealbook.blogs.nytimes.com/2008/10/29/goldman-names-94-partner-managing-directors/

Buy Side Reevaluates Counterparty Risk and Reliance on Sell-Side Trading Platforms
After the demise of Lehman Brothers, buy-side firms are focusing on counterparty risk, measuring their exposures to sell-side trading systems as well as trading partners.
http://www.financetech.com/feed/showArticle.jhtml?articleID=211601159&cid=RSSfeed_FTN_All

Environmental Trading News

World’s first carbon exchange traded commodity to launch on LSE
Investors will be able to access the rapidly growing carbon futures market later this week with the launch of the world’s first carbon exchange traded commodity (ETC) on the London Stock Exchange.
http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=318978

Nations see REDD in rush for carbon credits
SINGAPORE (Reuters) – In the far north of Indonesia’s Sumatra island lies a vast stretch of forest brimming with orangutans and rare Sumatran tigers and elephants. In a quirk of fate, a decades-long insurgency in Aceh province prevented illegal loggers from stripping the place bare.
http://www.enn.com/wildlife/article/38515

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

CME Group Inc. Reports Strong Third-Quarter Revenues and Operating …
http://cmegroup.mediaroom.com/index.php?s=43&item=2741

Deutsche Börse: German Equity Forum Fall 2008 In Frankfurt In November – Largest Forum On Equity Financing Expects 5,000 Participants
From 10 to 12 November, Deutsche Börse and KfW Mittelstandsbank will be holding the German Equity Forum Fall 2008 in Frankfurt/Main. The forum is Europe’s largest and most successful platform for equity-seeking and already listed SMEs. Over 5,000 investors, analysts, entrepreneurs and intermediaries are expected at the three-day German Equity Forum.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78425

CME swaps clearinghouse could be up and running by January
CME Group’s planned clearinghouse for credit default swaps will be ready to go at the end of this week—and can begin operating after it gets regulatory approvals and completes testing with trading firms, CME managing director Tim Doar said today.
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081028/REG/810289972/1036

Equiduct Trading’s VBBO Is Now Available From Bloomberg
On 31st October, Bloomberg will introduce coverage of Equiduct’s European Volume-weighted Best Bid and Offer (VBBO), the first Pan European consolidated view of equity prices in the post MiFID trading environment.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78433

AltX Celebrates 5 Years
On Monday, AltX at the Johannesburg Stock Exchange, celebrates five years of success, both for itself as an exchange and for the 78 companies presently listed and their shareholders.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78437

Mercado Alternativo Bursátil Approves The Incorporation Of Nordkaap And One To One Capital Partners As Registered Advisers
The Board of Directors of the Mercado Alternativo Bursátil (MAB) have agreed the appointment of Nordkaap and One to One Capital Partners as Registered Advisers and their registration on the Advisers Register. These firms, together with DCM Asesores, registered on June 19th, will be added to the initial group of Registered Advisers, which comprises 16 firms.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78430

Oslo Børs: Criticism Of SEB Enskilda For Breach Of The Exchange’s Trading Rules
At its meeting on 29 October 2008, the Board of Directors of Oslo Børs resolved to issue an official criticism of SEB Enskilda AS for breach of the exchange’s trading rules in connection with its action in registering certain orders for a customer.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78454

Restrictions on Transactions in Building Materials Holding Corporation (BLG)
http://www.cboe.org/publish/RegCir/RG08-141.pdf

Instruments in Cash Market CCP – Amendments
http://www.eurexchange.com/download/documents/circulars/cfni0992008e.pdf

HKEx: Status Report On New Product And Market Development Initiatives (Status As Of 15 October 2008)
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78429

RTS Stock Exchange: Maximum Amount Of Securities Accepted As Initial Margin Changed
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78428

HKEx Publishes 30th Edition Of Its Quarterly Publication – Exchange
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78427

Dubai Gold And Commodities Exchange Xchange Newswire – October 27, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78424

Tokyo Grain Exchange: Margin Requirements For November 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78422

Tokyo Grain Exchange: The Daily Price Limit For Oct. 30, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78432

Brokers & Dark Pools

Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Item 1.01 Entry into a Material Definitive Agreement
On October 23, 2008, MF Global Inc., a subsidiary of MF Global Ltd. (the “Company”), and Man Group plc (acting through agents) entered into a settlement agreement (the “Settlement Agreement”) with certain insurance companies in connection with the recovery of $75 million in settlement and litigation costs paid by the Company to the Receiver ad litem for the Philadelphia Alternative Asset Fund Ltd. in connection with a related legal proceeding. The Company previously recorded an expense of $76.8 million in the year ended March 31, 2008. Excluding previously recorded legal fees, the Company expects to recognize $62 million in insurance proceeds which will be presented in net revenues in the financial statements for the quarter ending December 31, 2008.
http://biz.yahoo.com/e/081029/mf8-k.html

Credit Suisse Cuts 500 Investment Bank, Support Jobs (Update1)
Credit Suisse Group AG, Switzerland’s second-biggest bank, plans to eliminate 500 jobs in its securities unit and some support functions, adding to 1,565 cuts announced over the past year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFj1YxfayMII&refer=home

Deutsche Bank May Post Loss as Pressure Builds to Raise Capital
Deutsche Bank AG probably will report its largest loss in five years on asset writedowns and trading losses, adding to pressure on Chief Executive Officer Josef Ackermann to raise capital.
http://www.bloomberg.com/apps/news?pid=20601085&sid=aMUbanKoSlbA&refer=europe

Morgan Stanley Begins Initiatives to Build New Bank Deposits
Morgan Stanley announced today that it had begun new initiatives, including leveraging its 8,500 Financial Advisors, 500 retail offices, and new Bank Holding Company structure, to build new bank deposits. The Firm said that one of its bank subsidiaries, Morgan Stanley Bank, N.A, had raised $3 billion in certificates of deposit (CDs) in just the past four weeks.
http://www.morganstanley.com/about/press/articles/7107.html

Singapore’s DBS Says Lehman-Linked Notes Worthless
Singapore’s DBS Group said 103 million Singapore dollars ($68 million) of structured notes linked to bankrupt U.S. brokerage Lehman Brothers Holdings are now worthless. That’s about a quarter of the amount of Lehman-linked securities sold to clients in Singapore and Hong Kong, The Associated Press said.
http://dealbook.blogs.nytimes.com/2008/10/29/singapores-dbs-says-lehman-linked-notes-worthless/

Investors losing faith in Citigroup
What now, Citigroup? That is the biggest question that investors are itching to have answered by the nation’s fourth largest bank by deposits.
http://money.cnn.com/2008/10/29/news/companies/citigroup/index.htm?section=money_latest

France nabs trader over Caisse d’Epargne losses
French police on Wednesday detained a trader from the Caisse d’Epargne bank for questioning over the loss of 750 million euros in derivatives trading amid this month’s market turmoil, officials said.
http://afp.google.com/article/ALeqM5j86wUbCVOaMqxY4ymF3qwLnhMnmA

ABN Amro’s Ex-Chief Regrets Sale, Would Help Clean Up (Update2)
Rijkman Groenink, the former chief executive officer who earned about $33 million from the sale of ABN Amro Holding NV, said he regrets the takeover and wants to work again for the Dutch lender.
http://www.bloomberg.com/apps/news?pid=20601208&sid=afr0fqJ_U7tg

Barclays Chooses KANA to Provide UK Customers with Safe, Secure Online Communication
KANA Software Inc has been selected by Barclays to provide its Secure Messaging technology in the UK. KANA will provide Barclays with the technology to support its customers to use its online channel with the peace of mind of a secure environment and communication. With accompanying personalized services and marketing campaigns, the initiative is a keystone of Barclays multi-channel customer communication strategy to improve customer satisfaction, reduce customer attrition and increase online sales.
http://www.centredaily.com/business/technology/story/930365.html

HSBC banking platform pays for itself
HSBC’s $6bn global project to move its disparate banking systems onto one global platform has now paid for itself halfway through the scheme – which is due to finish by 2011.
http://uk.news.yahoo.com/16/20081029/ttc-hsbc-banking-platform-pays-for-itsel-6315470.html

UBS exits listed funds business
UBS plans to close its listed investment funds business, which covers the UK investment trust sector and other alternative investment funds, as part of plans announced at the beginning of the month to refocus the investment bank on core activities.
http://www.efinancialnews.com/homepage/index/content/3352315840/restricted

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig102908.htm

China, Hong Kong Regulators May Review Short Selling (Update1)
China and Hong Kong regulators may review short selling of stocks in the two markets to stem a slump in equities, newspapers said.
http://www.bloomberg.com/apps/news?pid=20601080&sid=aDlohptqRfYs&refer=asia

Requests Regarding Tighter Regulations of Short Selling
On October 27, 2008, the Financial Services Agency (FSA) announced that it will implement the following measures, which will be effective temporarily until the end of FY2008. The FSA will also immediately develop and/or amend any related government ordinances, etc.
http://www.tse.or.jp/english/news/200810/081029_a.html

UK FSA Bolsters Legal Advice Team; Says Move Long Planned
The U.K.’s Financial Services Authority confirmed Wednesday it is bolstering its legal advice team but said this is not connected to concerns about the insurance sector.
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20081029\ACQDJON200810290831DOWJONESDJONLINE000527.htm&&mypage=newsheadlines&title=UK%20FSA%20Bolsters%20Legal%20Advice%20Team;%20Says%20Move%20Long%20Planned

OSFI eases capital requirements for seg funds
The Office of the Superintendent of Financial Institutions (OSFI) has published new rules aimed at giving life insurers a reprieve from falling stock markets. OSFI, which oversees federally regulated banks and insurance companies, changed the rules Tuesday that dictate how much money insurers must put aside for their segregated funds businesses.
http://www.investmentexecutive.com/client/en/News/DetailNews.asp?id=46703&IdSection=8&cat=8&BImageCI=1

FSA fines firm and MLRO for money laundering controls failings
The Financial Services Authority (FSA) has today fined Sindicatum Holdings Limited (SHL) £49,000 and its money laundering reporting officer (MLRO), Michael Wheelhouse, £17,500 for not having adequate anti-money laundering systems and controls in place for verifying and recording clients’ identities. This is the first time the FSA has fined a money laundering reporting officer.
http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/125.shtml

J.P. Turner Fined $250,000 for Failing to Supervise Commissions Charged on Stock Trades
The Financial Industry Regulatory Authority (FINRA) announced today that it has imposed a $250,000 fine against J.P. Turner & Company, LLC of Atlanta, GA, for failing to have an adequate supervisory system designed to ensure that its registered representatives charged customers fair and reasonable commissions on stock trades.
http://www.finra.org/Newsroom/NewsReleases/2008/P117322

Former director of concrete foundation company committed on multiple charges
Mr Evan Con Drakos, of Adelaide, South Australia, appeared yesterday in the Melbourne Magistrates’ Court and was committed to stand trial in the Melbourne County Court following an investigation by ASIC. Mr Drakos, 56, faces eleven charges of dishonestly using his position as a director of a company with the intention of gaining an advantage for himself or someone else.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-46%20Former%20director%20of%20concrete%20foundation%20company%20committed%20on%20multiple%20charges?opendocument

Missing half a billion? ASIC urges unclaimed money owners to collect
ASIC has renewed its call for the owners of almost $500 million in unclaimed money to stake their claim. ‘While we’ve successfully returned more than $36 million to its rightful owners over the past six months, we’ve recently added another 33,994 records worth around $151.2 million’, said ASIC’s Senior Executive Leader, Consumers and Retail Investors, Ms Delia Rickard.
http://www.asic.gov.au/asic/asic.nsf/byheadline/Better+regulation?openDocument

Global financial crisis and Japan’s experience in the 1990s
Keynote speech by Dr. Takafumi Sato, Commissioner, Financial Services Agency
Symposium on Building the Financial System of the 21st Century
October 25, 2008
http://www.fsa.go.jp/en/announce/state/20081025.html

AMF: Working Papers No 6 – Block Trades, Fragmentation and the Markets in Financial
Instruments Directive: What can we learn from historical Data on the Paris Exchange?
http://www.amf-france.org/documents/general/8483_1.pdf

Order against M/s. Mayank Goel, Member, UPSE
http://www.sebi.gov.in/press/2008/2008240.html

Orders in the matter of Manna Glass Tech Industries Ltd
http://www.sebi.gov.in/press/2008/2008241.html

Investments – Indexes – Managed Futures – Managed Funds

Hedge-Fund Redemptions Seen Haunting Exchanges In 2009
When CME Group Inc. (CME) chose Citadel Investment Group founder Ken Griffin to front the first in a series of corporate advertisements last year, the symbiotic relationship between exchanges and hedge funds was at its peak.
http://online.wsj.com/article/BT-CO-20081029-706789.html?mod=crnews

Sale of single $4.5bn portfolio
The extent of the deleveraging in global credit markets was illustrated on Tuesday by the size of a single portfolio being liquidated in the markets, which included $1.5bn worth of global corporate bonds and $3bn in credit derivatives. Barclays Bank was auctioning the portfolio, according to a number of people familiar with the request for bids, and it was widely believed in the market to be a package of so-called basis trades from a single owner.
http://www.ft.com/cms/s/580904e2-a524-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F580904e2-a524-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Soros sees ‘shakeout’ downsizing hedge fund world
The global financial crisis will reduce the hedge-fund industry to as little as a third of its current size, billionaire investor George Soros said on Tuesday.
http://www.reuters.com/article/vcCandidateFeed2/idUSLNE49S05Y20081029

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

China defends energy policy after scathing report
China on Tuesday defended its energy policy a day after three influential green organisations criticised its dependence on coal.
http://afp.google.com/article/ALeqM5i6KTiMsgaylQNAIetaCrEv4LqNJg

China calls for reform of global financial system
China on Tuesday called for “effective and comprehensive reforms” of the international financial system, elaborating on its stance in response to the on-going international financial crisis.
http://www.chinadaily.com.cn/bizchina/2008-10/29/content_7155275.htm

Chinese commodities distribution center in Europe completes construction
The Chinese Commodities Distribution Center in Europe has completed construction and held a ceremony to mark the occasion here Tuesday.
http://english.people.com.cn/90001/90776/90884/6523523.html

Investors demand compensation
A group of angry Citic Pacific shareholders yesterday in Hong Kong asked the company to buy back their shares after it delayed the disclosure of its HK$15.5 billion loss from currency trading.
http://www.cs.com.cn/english/ei/200810/t20081029_1636830.htm

‘Daunting’ challenges spawn task force
Chief Executive Donald Tsang yesterday appointed 10 members to serve on the Task Force on Economic Challenges, which is established in response to the global financial downturn.
http://www.chinadaily.com.cn/hkedition/2008-10/29/content_7151780.htm

SICOM’s New Trading System From NASDAQ Launches Successfully
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Singapore Commodity Exchange (SICOM) report successful launch of e-SICOM, SICOM’s new electronic trading and clearing system for commodity derivatives. e-SICOM went live on September 29th, and has since received acknowledgment from participating members and investors.
http://www.huliq.com/13/71554/sicoms-new-trading-system-nasdaq-launches-successfully

Korea Exchange halts programme buying
Korea Exchange suspended programme buying on the main Seoul share index on Wednesday morning trade, citing volatility in futures prices.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/28/afx5617050.html

Frontier Markets

Edited by Robert Luke, robertluke@johnlothian.com

EMERGING MARKETS – EQUITIES OUTLOOK
Tiger stocks are eaten alive
Daily Mail (UK)
While mayhem raged for most Western banks over the last six weeks, those groups with strong Asian and Latin American roots looked rock solid. The assumption among traders was that emerging markets had divorced themselves from the richer Western nations. There has been a huge change of perception over the last 10 days as a queue of emerging market countries have come knocking on the doors of the International Monetary Fund.
http://www.dailymail.co.uk/money/article-1081412/ALEX-BRUMMER-Tiger-stocks-eaten-alive.html

EMERGING MARKETS – GOVERNMENT BONDS
Emerging Market Credit Risk Signals Test for IMF’s Resources
Bloomberg
The cost of default protection on bonds sold by 11 emerging-market nations has surged near distressed levels, triggering speculation the International Monetary Fund’s ability to bailout countries may be stretched.
http://www.bloomberg.com/apps/news?pid=20601086&sid=auEPqDcSNysg&refer=latin_america
*RL – For more, see story on Hungary’s IMF bailout in our Eastern Europe section below.

AFRICA – REGIONAL TRADE
Africa’s giant trading bloc years in making
Reuters
A much-heralded giant African trading bloc may be years in the making despite strong political will from heads of state for the three economic groups aiming to harmonise trade between 26 countries. Leaders from around the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the South African Development Community (SADC) agreed in Uganda last week in principle to create a unified free trade zone.
http://africa.reuters.com/wire/news/usnLS710068.html
*RL – See Monday’s FMN for background piece on the proposed new trade association.

LATIN AMERICA – EQUITY MARKETS
Argentine Pension Fund Seizure May Cause Brazil Stock Fire Sale
Bloomberg
Argentina’s planned nationalization of its retirement system may trigger a fire sale of Brazilian stocks as private pension funds are forced to shed foreign holdings.
http://www.bloomberg.com/apps/news?pid=20601086&sid=akTPWjuGavug&refer=latin_america
*RL – Story later notes: “Pension funds in Argentina owned 1.8 billion pesos ($541 million) of Brazilian stocks including Cia. Vale do Rio Doce, Petroleo Brasileiro SA and Banco Bradesco SA as of Oct. 15, according to the regulator’s Web site. Although that’s only 0.1 percent of Brazil’s total market value, it represents 21 percent of average daily trading in the past week.”

MENA REGION – ISLAMIC FINANCE
Islamic bond market ‘wrecked’ by critical remarks
Arabian Business
Debates over how sharia-compliant Islamic bonds really are have “wrecked” the sukuk market, causing issues to fall to $14 billion this year from up to $50 billion last year, a leading expert said on Tuesday.
http://www.arabianbusiness.com/536401-islamic-bond-market-wrecked-by-critical-remarks

Gulf Bank head steps down after losses on derivatives
The crisis in Kuwait’s banking sector deepened yesterday when the chairman of Gulf Bank resigned over derivatives losses and Fitch Ratings downgraded the bank, the country’s second biggest lender. Kutayba Al Ghanim replaced his brother, Bassam Al Ghanim, as chairman of Gulf Bank after depositors started to withdraw deposits from the stricken lender on Sunday – the first known bank-run in the region during the crisis – even though the Kuwaiti central bank pledged to support the bank and guarantee all deposits in the country.
http://www.ft.com/cms/s/63831a34-a55a-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F63831a34-a55a-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

HE Dr Omar Bin Sulaiman – Governor Of The Dubai International Financial Centre And Vice Chairman Of The Central Bank Of The UAE – Hosts US Deputy Treasury Secretary
His Excellency Dr Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC) and Vice Chairman of the Central Bank of the UAE yesterday hosted Mr. Robert Kimmitt, the Deputy Secretary of the US Department of Treasury. During his address, Mr. Kimmitt spoke about the United States’ policy response to global financial developments and the US government’s commitment to maintaining policies that help foster sustained economic growth. Of particular interest to audiences in Dubai was his discussion of the United States’ open investment policies.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78423

NSE pips peers in currency futures membership race
MUMBAI: The National Stock Exchange (NSE) has pipped rival stock exchanges in terms of attracting the largest number of members in the recently-l
aunched currency futures segment.
http://economictimes.indiatimes.com/Market_News/NSE_pips_peers_in_membership_race/articleshow/3649327.cms

dbFX to discuss FX trading strategies in volatile markets
dbFX, the online FX trading platform from Deutsche Bank will be discussing FX trading strategies in volatile markets in a seminar for individual investors to be held in Dubai on 3 November at the DIFC.
http://www.ameinfo.com/173566.html

FIA Futures Cares Charity Dinner gives companies and individuals in the futures and options industry the opportunity to provide funds to feed people in need. All proceeds from the dinner benefit the Greater Chicago Food Depository, a nonprofit food distribution and training center providing food for hungry people. The Food Depository distributes donated and purchased food through a network of 600 food pantries, soup kitchens and shelters to 500,000 adults and children every year. Last year, the Food Depository distributed more than 46 million pounds of nonperishable food and fresh produce, dairy products and meat, the equivalent of more than 95,000 meals every day.

Honorary Committee:

• Terrence Duffy, CME Group, Event Chairman
• William Brodsky, Chicago Board Options Exchange
• Bernie Dan, MF Global
• Chris Hehmeyer, Penson GHCO
• Jim Heinz, Marquette Partners
• Rob Moore, Marquette Partners
• Richard Sandor, Chicago Climate Exchange
• Jeffrey Sprecher, IntercontinentalExchange
• Donald Wilson, DRW Trading Group

Click here to purchase FIA Futures Cares Charity Dinner tickets.
http://www.chicagosfoodbank.org/fia

Click here for a PDF with more information on how you can help.
http://www.futuresindustry.org/downloads/CharityDinnerSponsorship.pdf

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Short Sellers Aren’t Jackals, They’re Bears, Fleckenstein Says
A six-foot stuffed grizzly bear guards the entrance to the offices of Fleckenstein Capital Inc., located on a quiet, leafy street in the Capitol Hill neighborhood of Seattle. The bear sends a clear message: The man inside, Bill Fleckenstein, founder and president of the firm, is a short seller and proud of it.
http://www.bloomberg.com/apps/news?pid=20601109&sid=a758oOpYTQrE&refer=home

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Social Media Redefining Retail Financial Services Web Experience
Corporate Insight today released a new groundbreaking report detailing the evolution of social media – such as blogs, forums and online communities – among major financial services companies, providing a clear understanding of market trends and leading tactics. The research reveals that social media is beginning to reshape the way financial services firms communicate with their customers, as well as how investors interact with each other.
http://biz.yahoo.com/bw/081029/20081029005977.html

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Lead Stories

MF Global Appoints Bernard W. Dan as Chief Executive Officer; Kevin R. Davis Resigns After 17 Years with the Company
MF Global Ltd. (NYSE: MF), a leading broker of exchange-traded futures and options, announced the company’s board of directors has appointed Bernard W. Dan, currently president and chief operating officer, as chief executive officer, effective immediately. He will succeed Kevin R. Davis, who has resigned from the company and its board of directors after 17 years with MF Global.
http://www.mfglobalinvestorrelations.com/phoenix.zhtml?c=194911&p=irol-newsArticle&ID=1218872&highlight=

Citadel Drops ELX Board Seat; Will Remain User – Source
Citadel Investment Group is reducing its ties with a planned rival to CME Group Inc. (CME) in favor of its new joint venture with the Chicago derivatives exchange operator.
http://news.morningstar.com/newsnet/ViewNews.aspx?article=/DJ/200810291212DOWJONESDJONLINE000770_univ.xml

Detailed talks begin on credit derivatives clearing house
Regulators yesterday started a series of detailed meetings with potential providers of a clearing house for the thus-far unregulated credit derivatives market. The move is part of efforts to kickstart implementation of this crucial risk-reduction plan by next month. The meetings, held in New York and likely to continue for several days, are being attended by representatives from the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. The regulators have decided to work closely together to ensure that a clearing house meets all of their requirements, according to people involved in the discussions.
http://www.ft.com/cms/s/1bf9100c-a559-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F1bf9100c-a559-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

CME Group Profit Rises on Equity Index Trades, Nymex Contracts
By Matthew Leising
Oct. 29 (Bloomberg) — CME Group Inc., the world’s largest futures market, said third-quarter profit rose 3 percent as volatility in stock markets triggered by economic uncertainty led to record trading in equity index and currency derivatives. Net income rose to $278 million, or $4.13 a share, from $269 million, or $4, a year earlier, Chicago-based CME said in a statement distributed by PR Newswire. Revenue rose 6 percent to $787 million. CME Group controls 97 percent of U.S. futures trading.

Davis quits as MF Global chief
The chief executive of MF Global, one of the world’s biggest financial derivatives brokerages, on Wednesday bowed to investor demands to resign, capping a disastrous year for the company during which it has lost more than 90 per cent of its value. Kevin Davis, who had led the brokerage for a decade, leaves a company much weakened following its spin-off last year from Man Group, the London-listed hedge-fund manager. MF Global’s share price, which was trading at more than $30 in January, closed at $2.25 on Tuesday.
http://www.ft.com/cms/s/c92dfd18-a5be-11dd-9d26-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc92dfd18-a5be-11dd-9d26-000077b07658.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus

Citadel, Allying With CME Group, Said to Give Up ELX Board Seat
By Matthew Leising
Citadel Investment Group LLC fortified its ties to CME Group Inc. by dropping off the board of the Electronic Liquidity Exchange, a would-be competitor to the Chicago market, said three people familiar with the decision. Citadel, the $16 billion hedge fund firm, had placed Faraz Javaid, its head of business development for high-speed trading, on ELX’s board. He’s forfeiting his seat as Citadel ramps up its collaboration with CME Group on a plan to capture trading in credit-default swaps, according to the people, who declined to be identified because Javaid’s departure hasn’t been disclosed. ELX, formed in 2007 by a group of banks and hedge funds including Citadel, has said it plans to compete for trades in CME Group’s $209 trillion Treasury futures market.

McCreevy weighs up code of conduct for derivatives market
The European Commission has floated the issue of whether there should be choice in where exchange-traded derivatives trades are cleared, in the latest sign that the financial crisis is prompting a rethink of the way securities and derivatives markets are structured and regulated. Charlie McCreevy, EU internal markets commissioner, is examining whether to extend a so-called code of conduct he brokered two years ago with exchanges and providers of post-trade services beyond cash equities to derivatives. The code of conduct is a non-binding agreement designed to open the way for market participants trading shares in Europe to be able to chose where their shares are cleared, once they have executed trades on a European exchange or alternative trading facility.
http://www.ft.com/cms/s/17f4b888-a55b-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F17f4b888-a55b-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

World According to TARP No Laughing Matter for U.S. (Update1)
The financial crisis exacerbated by credit derivatives is costing so much to fix that speculators are now using those same instruments to bet on governments as the price tag for bailing out banks approaches $3 trillion.
http://www.bloomberg.com/apps/news?pid=20601170&refer=home&sid=a2VdrjC1TWxE

Nasdaq, NYSE want global answers to OTC problems
The chief executives of the two largest U.S. equities exchange operators, Nasdaq OMX (NDAQ.O: Quote, Profile, Research, Stock Buzz) and NYSE Euronext Inc (NYX.N: Quote, Profile, Research, Stock Buzz), expressed on Tuesday a preference for global solutions to recent OTC market problems, rather than a U.S.-only approach.
http://www.reuters.com/article/americasRegulatoryNews/idUSN2841945520081028

Exchanges must submit CDS plans to Federal Reserve by Friday
Major exchanges vying for a role in a possible clearinghouse for credit default swaps must present their proposal to the Federal Reserve by Friday, a New York Fed spokesman said on Tuesday. The $55 trillion market, criticised as a major contributor to the current financial crisis, is heading for much tighter regulation and a number of exchanges are trying to get a piece of the action.
http://www.reuters.com/article/marketsNews/idUSN2859006320081028

Fed Sets Deadline for Details on Backing Credit Swaps
The Federal Reserve has given U.S. futures exchanges until Oct. 31 to present written plans on how they’ll make the $55 trillion credit swaps market less risky, according to four people familiar with the discussions.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCTW7d3Af.og&refer=home

BM&F CFO Says Extent of Derivatives Losses Is Unknown (Update1)
Brazilian financial regulators don’t know the full extent of losses on currency derivatives owned by the country’s companies, BM&FBovespa SA Chief Financial Officer Carlos Kawall said. “Most of the problems occurred in the over-the-counter contracts and because of lack of transparency, no one knows the size of the problem,” Kawall said at a conference in New York.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aCDdpYoiW.Ms&refer=latin_america

Citigroup, Credit Suisse Link Loans to Swaps in Shift (Update3)
Citigroup Inc. and Credit Suisse Group AG are among banks tying corporate loan rates to credit- default swaps, raising borrowing costs and exposing companies to derivatives accused of crippling the financial system.
http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_C/threadview?m=tm&bn=2895&tid=347304&mid=347304&tof=6&frt=2

Goldman Sachs Names 94 Partners
Goldman Sachs has added 94 names to its elite list of partners, continuing a tradition whose roots go back to the firm’s long history as a private firm. Membership in the partnership pool is one of Goldman’s highest honors, and it comes with the right to share in a special bonus pool. New partners are named every two years. Goldman’s additions for 2008 include Jan Hatzius, Goldman’s chief U.S. economist; and L. Brooks Entwistle, who runs the company’s banking operations in India, Bloomberg said, citing an internal memo that a company spokeswoman confirmed was authentic.
http://dealbook.blogs.nytimes.com/2008/10/29/goldman-names-94-partner-managing-directors/

Buy Side Reevaluates Counterparty Risk and Reliance on Sell-Side Trading Platforms
After the demise of Lehman Brothers, buy-side firms are focusing on counterparty risk, measuring their exposures to sell-side trading systems as well as trading partners.
http://www.financetech.com/feed/showArticle.jhtml?articleID=211601159&cid=RSSfeed_FTN_All

Environmental Trading News

World’s first carbon exchange traded commodity to launch on LSE
Investors will be able to access the rapidly growing carbon futures market later this week with the launch of the world’s first carbon exchange traded commodity (ETC) on the London Stock Exchange.
http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=318978

Nations see REDD in rush for carbon credits
SINGAPORE (Reuters) – In the far north of Indonesia’s Sumatra island lies a vast stretch of forest brimming with orangutans and rare Sumatran tigers and elephants. In a quirk of fate, a decades-long insurgency in Aceh province prevented illegal loggers from stripping the place bare.
http://www.enn.com/wildlife/article/38515

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

CME Group Inc. Reports Strong Third-Quarter Revenues and Operating …
http://cmegroup.mediaroom.com/index.php?s=43&item=2741

Deutsche Börse: German Equity Forum Fall 2008 In Frankfurt In November – Largest Forum On Equity Financing Expects 5,000 Participants
From 10 to 12 November, Deutsche Börse and KfW Mittelstandsbank will be holding the German Equity Forum Fall 2008 in Frankfurt/Main. The forum is Europe’s largest and most successful platform for equity-seeking and already listed SMEs. Over 5,000 investors, analysts, entrepreneurs and intermediaries are expected at the three-day German Equity Forum.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78425

CME swaps clearinghouse could be up and running by January
CME Group’s planned clearinghouse for credit default swaps will be ready to go at the end of this week—and can begin operating after it gets regulatory approvals and completes testing with trading firms, CME managing director Tim Doar said today.
http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081028/REG/810289972/1036

Equiduct Trading’s VBBO Is Now Available From Bloomberg
On 31st October, Bloomberg will introduce coverage of Equiduct’s European Volume-weighted Best Bid and Offer (VBBO), the first Pan European consolidated view of equity prices in the post MiFID trading environment.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78433

AltX Celebrates 5 Years
On Monday, AltX at the Johannesburg Stock Exchange, celebrates five years of success, both for itself as an exchange and for the 78 companies presently listed and their shareholders.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78437

Mercado Alternativo Bursátil Approves The Incorporation Of Nordkaap And One To One Capital Partners As Registered Advisers
The Board of Directors of the Mercado Alternativo Bursátil (MAB) have agreed the appointment of Nordkaap and One to One Capital Partners as Registered Advisers and their registration on the Advisers Register. These firms, together with DCM Asesores, registered on June 19th, will be added to the initial group of Registered Advisers, which comprises 16 firms.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78430

Oslo Børs: Criticism Of SEB Enskilda For Breach Of The Exchange’s Trading Rules
At its meeting on 29 October 2008, the Board of Directors of Oslo Børs resolved to issue an official criticism of SEB Enskilda AS for breach of the exchange’s trading rules in connection with its action in registering certain orders for a customer.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78454

Restrictions on Transactions in Building Materials Holding Corporation (BLG)
http://www.cboe.org/publish/RegCir/RG08-141.pdf

Instruments in Cash Market CCP – Amendments
http://www.eurexchange.com/download/documents/circulars/cfni0992008e.pdf

HKEx: Status Report On New Product And Market Development Initiatives (Status As Of 15 October 2008)
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78429

RTS Stock Exchange: Maximum Amount Of Securities Accepted As Initial Margin Changed
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78428

HKEx Publishes 30th Edition Of Its Quarterly Publication – Exchange
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78427

Dubai Gold And Commodities Exchange Xchange Newswire – October 27, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78424

Tokyo Grain Exchange: Margin Requirements For November 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78422

Tokyo Grain Exchange: The Daily Price Limit For Oct. 30, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78432

Brokers & Dark Pools

Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Item 1.01 Entry into a Material Definitive Agreement
On October 23, 2008, MF Global Inc., a subsidiary of MF Global Ltd. (the “Company”), and Man Group plc (acting through agents) entered into a settlement agreement (the “Settlement Agreement”) with certain insurance companies in connection with the recovery of $75 million in settlement and litigation costs paid by the Company to the Receiver ad litem for the Philadelphia Alternative Asset Fund Ltd. in connection with a related legal proceeding. The Company previously recorded an expense of $76.8 million in the year ended March 31, 2008. Excluding previously recorded legal fees, the Company expects to recognize $62 million in insurance proceeds which will be presented in net revenues in the financial statements for the quarter ending December 31, 2008.
http://biz.yahoo.com/e/081029/mf8-k.html

Credit Suisse Cuts 500 Investment Bank, Support Jobs (Update1)
Credit Suisse Group AG, Switzerland’s second-biggest bank, plans to eliminate 500 jobs in its securities unit and some support functions, adding to 1,565 cuts announced over the past year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aFj1YxfayMII&refer=home

Deutsche Bank May Post Loss as Pressure Builds to Raise Capital
Deutsche Bank AG probably will report its largest loss in five years on asset writedowns and trading losses, adding to pressure on Chief Executive Officer Josef Ackermann to raise capital.
http://www.bloomberg.com/apps/news?pid=20601085&sid=aMUbanKoSlbA&refer=europe

Morgan Stanley Begins Initiatives to Build New Bank Deposits
Morgan Stanley announced today that it had begun new initiatives, including leveraging its 8,500 Financial Advisors, 500 retail offices, and new Bank Holding Company structure, to build new bank deposits. The Firm said that one of its bank subsidiaries, Morgan Stanley Bank, N.A, had raised $3 billion in certificates of deposit (CDs) in just the past four weeks.
http://www.morganstanley.com/about/press/articles/7107.html

Singapore’s DBS Says Lehman-Linked Notes Worthless
Singapore’s DBS Group said 103 million Singapore dollars ($68 million) of structured notes linked to bankrupt U.S. brokerage Lehman Brothers Holdings are now worthless. That’s about a quarter of the amount of Lehman-linked securities sold to clients in Singapore and Hong Kong, The Associated Press said.
http://dealbook.blogs.nytimes.com/2008/10/29/singapores-dbs-says-lehman-linked-notes-worthless/

Investors losing faith in Citigroup
What now, Citigroup? That is the biggest question that investors are itching to have answered by the nation’s fourth largest bank by deposits.
http://money.cnn.com/2008/10/29/news/companies/citigroup/index.htm?section=money_latest

France nabs trader over Caisse d’Epargne losses
French police on Wednesday detained a trader from the Caisse d’Epargne bank for questioning over the loss of 750 million euros in derivatives trading amid this month’s market turmoil, officials said.
http://afp.google.com/article/ALeqM5j86wUbCVOaMqxY4ymF3qwLnhMnmA

ABN Amro’s Ex-Chief Regrets Sale, Would Help Clean Up (Update2)
Rijkman Groenink, the former chief executive officer who earned about $33 million from the sale of ABN Amro Holding NV, said he regrets the takeover and wants to work again for the Dutch lender.
http://www.bloomberg.com/apps/news?pid=20601208&sid=afr0fqJ_U7tg

Barclays Chooses KANA to Provide UK Customers with Safe, Secure Online Communication
KANA Software Inc has been selected by Barclays to provide its Secure Messaging technology in the UK. KANA will provide Barclays with the technology to support its customers to use its online channel with the peace of mind of a secure environment and communication. With accompanying personalized services and marketing campaigns, the initiative is a keystone of Barclays multi-channel customer communication strategy to improve customer satisfaction, reduce customer attrition and increase online sales.
http://www.centredaily.com/business/technology/story/930365.html

HSBC banking platform pays for itself
HSBC’s $6bn global project to move its disparate banking systems onto one global platform has now paid for itself halfway through the scheme – which is due to finish by 2011.
http://uk.news.yahoo.com/16/20081029/ttc-hsbc-banking-platform-pays-for-itsel-6315470.html

UBS exits listed funds business
UBS plans to close its listed investment funds business, which covers the UK investment trust sector and other alternative investment funds, as part of plans announced at the beginning of the month to refocus the investment bank on core activities.
http://www.efinancialnews.com/homepage/index/content/3352315840/restricted

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig102908.htm

China, Hong Kong Regulators May Review Short Selling (Update1)
China and Hong Kong regulators may review short selling of stocks in the two markets to stem a slump in equities, newspapers said.
http://www.bloomberg.com/apps/news?pid=20601080&sid=aDlohptqRfYs&refer=asia

Requests Regarding Tighter Regulations of Short Selling
On October 27, 2008, the Financial Services Agency (FSA) announced that it will implement the following measures, which will be effective temporarily until the end of FY2008. The FSA will also immediately develop and/or amend any related government ordinances, etc.
http://www.tse.or.jp/english/news/200810/081029_a.html

UK FSA Bolsters Legal Advice Team; Says Move Long Planned
The U.K.’s Financial Services Authority confirmed Wednesday it is bolstering its legal advice team but said this is not connected to concerns about the insurance sector.
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20081029\ACQDJON200810290831DOWJONESDJONLINE000527.htm&&mypage=newsheadlines&title=UK%20FSA%20Bolsters%20Legal%20Advice%20Team;%20Says%20Move%20Long%20Planned

OSFI eases capital requirements for seg funds
The Office of the Superintendent of Financial Institutions (OSFI) has published new rules aimed at giving life insurers a reprieve from falling stock markets. OSFI, which oversees federally regulated banks and insurance companies, changed the rules Tuesday that dictate how much money insurers must put aside for their segregated funds businesses.
http://www.investmentexecutive.com/client/en/News/DetailNews.asp?id=46703&IdSection=8&cat=8&BImageCI=1

FSA fines firm and MLRO for money laundering controls failings
The Financial Services Authority (FSA) has today fined Sindicatum Holdings Limited (SHL) £49,000 and its money laundering reporting officer (MLRO), Michael Wheelhouse, £17,500 for not having adequate anti-money laundering systems and controls in place for verifying and recording clients’ identities. This is the first time the FSA has fined a money laundering reporting officer.
http://www.fsa.gov.uk/pages/Library/Communication/PR/2008/125.shtml

J.P. Turner Fined $250,000 for Failing to Supervise Commissions Charged on Stock Trades
The Financial Industry Regulatory Authority (FINRA) announced today that it has imposed a $250,000 fine against J.P. Turner & Company, LLC of Atlanta, GA, for failing to have an adequate supervisory system designed to ensure that its registered representatives charged customers fair and reasonable commissions on stock trades.
http://www.finra.org/Newsroom/NewsReleases/2008/P117322

Former director of concrete foundation company committed on multiple charges
Mr Evan Con Drakos, of Adelaide, South Australia, appeared yesterday in the Melbourne Magistrates’ Court and was committed to stand trial in the Melbourne County Court following an investigation by ASIC. Mr Drakos, 56, faces eleven charges of dishonestly using his position as a director of a company with the intention of gaining an advantage for himself or someone else.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-46%20Former%20director%20of%20concrete%20foundation%20company%20committed%20on%20multiple%20charges?opendocument

Missing half a billion? ASIC urges unclaimed money owners to collect
ASIC has renewed its call for the owners of almost $500 million in unclaimed money to stake their claim. ‘While we’ve successfully returned more than $36 million to its rightful owners over the past six months, we’ve recently added another 33,994 records worth around $151.2 million’, said ASIC’s Senior Executive Leader, Consumers and Retail Investors, Ms Delia Rickard.
http://www.asic.gov.au/asic/asic.nsf/byheadline/Better+regulation?openDocument

Global financial crisis and Japan’s experience in the 1990s
Keynote speech by Dr. Takafumi Sato, Commissioner, Financial Services Agency
Symposium on Building the Financial System of the 21st Century
October 25, 2008
http://www.fsa.go.jp/en/announce/state/20081025.html

AMF: Working Papers No 6 – Block Trades, Fragmentation and the Markets in Financial Instruments Directive: What can we learn from historical Data on the Paris Exchange?
http://www.amf-france.org/documents/general/8483_1.pdf

Order against M/s. Mayank Goel, Member, UPSE
http://www.sebi.gov.in/press/2008/2008240.html

Orders in the matter of Manna Glass Tech Industries Ltd
http://www.sebi.gov.in/press/2008/2008241.html

Investments – Indexes – Managed Futures – Managed Funds

Hedge-Fund Redemptions Seen Haunting Exchanges In 2009
When CME Group Inc. (CME) chose Citadel Investment Group founder Ken Griffin to front the first in a series of corporate advertisements last year, the symbiotic relationship between exchanges and hedge funds was at its peak.
http://online.wsj.com/article/BT-CO-20081029-706789.html?mod=crnews

Sale of single $4.5bn portfolio
The extent of the deleveraging in global credit markets was illustrated on Tuesday by the size of a single portfolio being liquidated in the markets, which included $1.5bn worth of global corporate bonds and $3bn in credit derivatives. Barclays Bank was auctioning the portfolio, according to a number of people familiar with the request for bids, and it was widely believed in the market to be a package of so-called basis trades from a single owner.
http://www.ft.com/cms/s/580904e2-a524-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F580904e2-a524-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Soros sees ‘shakeout’ downsizing hedge fund world
The global financial crisis will reduce the hedge-fund industry to as little as a third of its current size, billionaire investor George Soros said on Tuesday.
http://www.reuters.com/article/vcCandidateFeed2/idUSLNE49S05Y20081029

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

China defends energy policy after scathing report
China on Tuesday defended its energy policy a day after three influential green organisations criticised its dependence on coal.
http://afp.google.com/article/ALeqM5i6KTiMsgaylQNAIetaCrEv4LqNJg

China calls for reform of global financial system
China on Tuesday called for “effective and comprehensive reforms” of the international financial system, elaborating on its stance in response to the on-going international financial crisis.
http://www.chinadaily.com.cn/bizchina/2008-10/29/content_7155275.htm

Chinese commodities distribution center in Europe completes construction
The Chinese Commodities Distribution Center in Europe has completed construction and held a ceremony to mark the occasion here Tuesday.
http://english.people.com.cn/90001/90776/90884/6523523.html

Investors demand compensation
A group of angry Citic Pacific shareholders yesterday in Hong Kong asked the company to buy back their shares after it delayed the disclosure of its HK$15.5 billion loss from currency trading.
http://www.cs.com.cn/english/ei/200810/t20081029_1636830.htm

‘Daunting’ challenges spawn task force
Chief Executive Donald Tsang yesterday appointed 10 members to serve on the Task Force on Economic Challenges, which is established in response to the global financial downturn.
http://www.chinadaily.com.cn/hkedition/2008-10/29/content_7151780.htm

SICOM’s New Trading System From NASDAQ Launches Successfully
The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) and the Singapore Commodity Exchange (SICOM) report successful launch of e-SICOM, SICOM’s new electronic trading and clearing system for commodity derivatives. e-SICOM went live on September 29th, and has since received acknowledgment from participating members and investors.
http://www.huliq.com/13/71554/sicoms-new-trading-system-nasdaq-launches-successfully

Korea Exchange halts programme buying
Korea Exchange suspended programme buying on the main Seoul share index on Wednesday morning trade, citing volatility in futures prices.
http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/28/afx5617050.html

Frontier Markets

Edited by Robert Luke, robertluke@johnlothian.com

EMERGING MARKETS – EQUITIES OUTLOOK
Tiger stocks are eaten alive
Daily Mail (UK)
While mayhem raged for most Western banks over the last six weeks, those groups with strong Asian and Latin American roots looked rock solid. The assumption among traders was that emerging markets had divorced themselves from the richer Western nations. There has been a huge change of perception over the last 10 days as a queue of emerging market countries have come knocking on the doors of the International Monetary Fund.
http://www.dailymail.co.uk/money/article-1081412/ALEX-BRUMMER-Tiger-stocks-eaten-alive.html

EMERGING MARKETS – GOVERNMENT BONDS
Emerging Market Credit Risk Signals Test for IMF’s Resources
Bloomberg
The cost of default protection on bonds sold by 11 emerging-market nations has surged near distressed levels, triggering speculation the International Monetary Fund’s ability to bailout countries may be stretched.
http://www.bloomberg.com/apps/news?pid=20601086&sid=auEPqDcSNysg&refer=latin_america
*RL – For more, see story on Hungary’s IMF bailout in our Eastern Europe section below.

AFRICA – REGIONAL TRADE
Africa’s giant trading bloc years in making
Reuters
A much-heralded giant African trading bloc may be years in the making despite strong political will from heads of state for the three economic groups aiming to harmonise trade between 26 countries. Leaders from around the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the South African Development Community (SADC) agreed in Uganda last week in principle to create a unified free trade zone.
http://africa.reuters.com/wire/news/usnLS710068.html
*RL – See Monday’s FMN for background piece on the proposed new trade association.

LATIN AMERICA – EQUITY MARKETS
Argentine Pension Fund Seizure May Cause Brazil Stock Fire Sale
Bloomberg
Argentina’s planned nationalization of its retirement system may trigger a fire sale of Brazilian stocks as private pension funds are forced to shed foreign holdings.
http://www.bloomberg.com/apps/news?pid=20601086&sid=akTPWjuGavug&refer=latin_america
*RL – Story later notes: “Pension funds in Argentina owned 1.8 billion pesos ($541 million) of Brazilian stocks including Cia. Vale do Rio Doce, Petroleo Brasileiro SA and Banco Bradesco SA as of Oct. 15, according to the regulator’s Web site. Although that’s only 0.1 percent of Brazil’s total market value, it represents 21 percent of average daily trading in the past week.”

MENA REGION – ISLAMIC FINANCE
Islamic bond market ‘wrecked’ by critical remarks
Arabian Business
Debates over how sharia-compliant Islamic bonds really are have “wrecked” the sukuk market, causing issues to fall to $14 billion this year from up to $50 billion last year, a leading expert said on Tuesday.
http://www.arabianbusiness.com/536401-islamic-bond-market-wrecked-by-critical-remarks

Gulf Bank head steps down after losses on derivatives
The crisis in Kuwait’s banking sector deepened yesterday when the chairman of Gulf Bank resigned over derivatives losses and Fitch Ratings downgraded the bank, the country’s second biggest lender. Kutayba Al Ghanim replaced his brother, Bassam Al Ghanim, as chairman of Gulf Bank after depositors started to withdraw deposits from the stricken lender on Sunday – the first known bank-run in the region during the crisis – even though the Kuwaiti central bank pledged to support the bank and guarantee all deposits in the country.
http://www.ft.com/cms/s/63831a34-a55a-11dd-b4f5-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F63831a34-a55a-11dd-b4f5-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

HE Dr Omar Bin Sulaiman – Governor Of The Dubai International Financial Centre And Vice Chairman Of The Central Bank Of The UAE – Hosts US Deputy Treasury Secretary
His Excellency Dr Omar Bin Sulaiman, Governor of the Dubai International Financial Centre (DIFC) and Vice Chairman of the Central Bank of the UAE yesterday hosted Mr. Robert Kimmitt, the Deputy Secretary of the US Department of Treasury. During his address, Mr. Kimmitt spoke about the United States’ policy response to global financial developments and the US government’s commitment to maintaining policies that help foster sustained economic growth. Of particular interest to audiences in Dubai was his discussion of the United States’ open investment policies.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78423

NSE pips peers in currency futures membership race
MUMBAI: The National Stock Exchange (NSE) has pipped rival stock exchanges in terms of attracting the largest number of members in the recently-l
aunched currency futures segment.
http://economictimes.indiatimes.com/Market_News/NSE_pips_peers_in_membership_race/articleshow/3649327.cms

dbFX to discuss FX trading strategies in volatile markets
dbFX, the online FX trading platform from Deutsche Bank will be discussing FX trading strategies in volatile markets in a seminar for individual investors to be held in Dubai on 3 November at the DIFC.
http://www.ameinfo.com/173566.html

Observations – Statistics – Commentary

The Flight To Safety Is A Boon For Agency Brokers
by Alex McCallum
The thunderbolts that have flashed through Wall Street this year and forever changed its face have sparked a healthy upswing in business for independent agency brokerage firms – the conflict-free intermediaries that trade for institutional clients and charge for their services on a commission basis only. The main reason? Safety. “A good part of the reason for the influx of buy-side business is a concern for the safety of their soft dollar balances,” comments Kevin Carroll, a managing partner of Pulse Trading, Inc., a Boston-based agency broker.
http://insuranceassetmanager.com/news.php?newsID=3233

*** Marketforum.com’s Alex McCallum exercising his journalistic skills.

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How Best to Restore Confidence in Our Markets?
Philip McBride Johnson, Great Falls, Va.
I give the most serious and thoughtful consideration to anything that Arthur Levitt says (“How to Restore Confidence in Our Markets,” op-ed, Oct. 22). But his suggestion (again) that our economy will thrive if only the Commodity Futures Trading Commission and the Securities and Exchange Commission were merged, has been considered and rejected many times before. Why? Securities issued by the government or by banks — nearly half of total futures volume — are largely regulated by agencies other than the SEC, whose remit is confined principally to the securities issued by companies.
http://online.wsj.com/article/SB122515163565974273.html?mod=googlenews_wsj

**** Philip McBride Johnson fires back.

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Fed Sets Deadline for Details on Backing Credit Swaps (Update1)
By Matthew Leising
Oct. 28 (Bloomberg) — The Federal Reserve has given U.S. futures exchanges until Oct. 31 to present written plans on how they’ll make the $55 trillion credit swaps market less risky, according to four people familiar with the discussions. CME Group Inc. and Intercontinental Exchange Inc., the two biggest U.S. futures markets, are among companies vying for a share of the market for guaranteeing credit-default swaps, the volatile contracts blamed for the current financial crisis. As much as $100 million in revenue may be generated within a year by processing the trades, according to Wachovia Capital Markets.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aCTW7d3Af.og&refer=home

**** Would it be wrong to put them at a clearinghouse and make trading liquidation only?

**** If this is a $55 Trillion notional business and firms had to put up 5% margin of the notional value (just for the sake of picking a number), then it would take $2.75 trillion in margin. If the $55 trillion was boiled down to $5 trillion, it would take $250 billion in margins put up to the clearinghouse at 5 % margins. I don’t know what 5 days of margin are, as mentioned by CME Executive Chairman Terry Duffy on CNBC last week. Where is the margin money coming from, or when you apply the true economics to CDS, do they not make economic sense any more? Or am I missing something? Even if it were only 1%, at $5 trillion, that is still $50 billion. Isn’t there a more capital efficient manner to manage default risk?

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optionMONSTER Group Introduces Online Brokerage trade
MONSTER Chicago trading veterans launch new era in online trading for self-directed investors CHICAGO, October 28, 2008 — optionMONSTER, a leading provider of news, education and market intelligence on the options and stock markets, today introduced trade MONSTER, a next-generation online brokerage designed by professional traders for self-directed investors. Co-founded by Jon (‘DRJ’) Najarian and Pete Najarian, professional options traders, well-known market analysts and CNBC contributors, the optionMONSTER group of companies provides tools and information designed to narrow the gap between individual investors and professional traders. trade MONSTER, a subsidiary of optionMONSTER Holdings, Inc., offers powerful trading tools, easy customization, integrated education, expert support and low, transparent commissions.
http://www.optionmonster.com/cms/messages/tm_press_release/index.html

OptionMonster launches online trading site
NEW YORK (MarketWatch) — OptionMonster, the online news, and information site for options investors, said Tuesday it is launching its own new retail online broker called TradeMonster where clients can trade stocks, bonds, options, and mutual funds.
http://www.marketwatch.com/news/story/story.aspx?guid=%7BC535953E%2D19B1%2D4F23%2DA746%2D9D14B280967C%7D&siteid=rss

**** MarketsWiki sponsor optionMonstor gets into the brokerage business.

**** If I am going to be an optionMonstor for Halloween, do I have to wear a ponytail or do I have to just shout like I am on CNBC?

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Asia Risk Names The Winners Of Its Annual Awards For Risk Management And Derivatives
Expertise Asia Risk magazine has published the winners of its highly sought-after awards for risk management and derivatives expertise in its October issue. The awards – ranging from prizes for all the main asset classes to those for hedge funds and corporates to local awards by country – have been running for nine years. And this year, competition was as fierce as ever and the judges’ decisions were even tougher, in view of the wildly turbulent markets.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78390

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Firms Recognized with Diversity Leadership Awards at SIFMA Annual Meeting
Today, at its Annual Meeting, the Securities Industry and Financial Markets Association (SIFMA) awarded Edward Jones, Merrill Lynch and Pershing with its Diversity Leadership Awards.
http://www.sifma.org/news/news.aspx?id=8542

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DOD jumps on wiki bandwagon
Defense Department officials have launched a wiki as a way to improve collaboration among agency scientists, engineers, acquisition workers and military service members. DOD Techipedia is similar to online encyclopedia Wikipedia and the intelligence community’s Intellipedia, said John Young, undersecretary of Defense for acquisition, technology and logistics http://www.fcw.com/online/news/154203-1.html

**** The official wiki bandwagon is now pulled by a tank.

++++

Events – Chicago

Understanding the Economics of Innovation – An Introduction to the World’s First Financial Exchange with an IP Focus

As part of the Ocean Tomo auction, David Silverman, COO of the Intellectual Property Exchange International (IPXI), will be speaking on “Understanding the Economics of Innovation – An Introduction to the World’s First Financial Exchange with an IP Focus”

When: Thursday, October 30 at 11:30AM

Where: Trump Tower, 17th Floor, Grand Salon, 401 N. Wabash Avenue Chicago, IL 60611

Please proceed to the Ocean Tomo registration desk on the 16th floor of the Trump and tell them you will be going to the IPXI presentation. No need to sign up in advance. For more information please contact Jessica Zemple at 312-377-4861 or jzemple@ipxi.com

****

The Financial Crisis and Its Aftermath
Thursday, November 13, 2008, 5:00 p.m. – 7:00 p.m.

It started off as the U.S. subprime crisis and it lives on as markets continue their downward spiral. As the crisis unfolded, housing markets around the world have tumbled; financial institutions have booked billions in losses; venerable institutions have vanished; financial authorities have frantically searched for solutions; and newspapers, such as the Financial Times, have run articles with headlines like “Undertakers deliver last rites for US capitalism.” Please join us on Thursday, Nov. 13 when Dr. Chris Culp shares with us his thoughts on the financial crisis.

SCHEDULE:
5:00 Registration
5:30 Start
6:35 Q&A
7:00 Event ends

VENUE: Deloitte & Touche LLP, 111 S. Wacker Drive, Chicago, IL 60606-4301

FEE: Free for PRMIA sustaining members, $10 for all others.
RSVP: Space is limited. RSVP by 5:00 P.M., Monday, November 10.

For more information or to register, please visit: http://www.prmia.org/events/view_events.php?eventID=3217

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Humor is the Best Medicine

As Readers Digest always said, humor is the best medicine, and this is funny.

http://sadguysontradingfloors.tumblr.com/

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Lead Stories

Wall St leaders say new, not more, regulation needed
NEW YORK (Reuters) – Even as markets plunge amid a crisis of confidence, Wall Street officials argued on Tuesday that the world’s financial institutions need a new and different kind of regulation, rather than more of it. As the securities industry’s reputation sank to new lows, nearly a thousand Wall Streeters braved rain and plunging bank stocks to attend the Securities Industry and Financial Markets Association’s annual meeting. Officials ranging from New York Mayor Michael Bloomberg and former SEC Chairman Harvey Pitt called for streamlined regulation and a system that can better handle the market’s dramatic changes of the past decade.
http://news.yahoo.com/s/nm/20081028/bs_nm/us_brokers_regulation_1

Finra CEO Schapiro Calls For Two-Tier Regulatory System
By Suzanne Barlyn, Of DOW JONES NEWSWIRES NEW YORK -(Dow Jones)- A future U.S. regulatory system should include two tiers – one to monitor systemic risk and another to deal with business conduct, according to Mary Schapiro, chief executive of the Financial Industry Regulatory Authority. Schapiro spoke at a panel during the 2008 annual meeting of the Securities Industry and Financial Markets Association on Tuesday.
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20081028%5cACQDJON200810281219DOWJONESDJONLINE000571.htm&&mypage=newsheadlines&title=Finra%20CEO%20Schapiro%20Calls%20For%20Two-Tier%20Regulatory%20System

Regulation Helps Exchanges, Hurts Banks
http://us.rd.yahoo.com/finance/external/tsmfe/SIG=12ff554dr/
http://www.thestreet.com/_yahoo/newsanalysis/financial-services/10444610.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Morgan Stanley, Goldman Bond Risk Increases, Default Swaps Show
By Abigail Moses Oct. 28 (Bloomberg) — The cost of protecting bonds sold by Morgan Stanley and Goldman Sachs Group Inc. rose, according to traders of credit-default swaps. Contracts on Morgan Stanley jumped 31 basis points to 448, and Goldman Sachs increased 26 basis points to 335, according to CMA Datavision prices at 11:15 a.m. in New York.
A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
http://www.bloomberg.com/apps/news?pid=20601103&sid=asOmgy.t2teE&refer=news

Japan’s Nomura hit by trading losses
By Robin Harding in Tokyo
Nomura, Japan’s largest brokerage, reported heavy losses in the second quarter as market turmoil hit its domestic business as well as its equity, credit and derivative traders. The Japanese financial group lost Y72.9bn ($763m) in the second quarter, before any impact from its acquisition of the Asian operations and European equities division of Lehman Brothers. This is the third consecutive quarter that Nomura has reported a loss.
http://www.ft.com/cms/s/0/c3e62a4c-a4c4-11dd-b4f5-000077b07658.html

BM&F CFO Says Extent of Brazil Derivatives Losses Isn’t Known
By Fabio Alves and Deirdre Bolton
Oct. 28 (Bloomberg) — Brazilian financial regulators don’t know the full extent of losses on currency derivatives owned by the country’s companies, BM&FBovespa SA Chief Financial Officer Carlos Kawall said. “Most of the problems occurred in the over-the-counter contracts and because of lack of transparency, no one knows the size of the problem,” Kawall said at a conference in New York.
http://www.bloomberg.com/apps/news?pid=20601086&sid=aCDdpYoiW.Ms

Brazil assesses impact of currency crisis
Contradictory signals emerged yesterday on the extent of the damage suffered by Brazil’s companies and banks caused by failed bets on the domestic currency, a crisis dubbed “Brazilian subprime”. Problems have mounted during the Brazilian real’s sharp devaluation against the US dollar over the past few months.
http://www.ft.com/cms/s/de1f9834-a48e-11dd-8104-000077b07658,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fde1f9834-a48e-11dd-8104-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Iceland bank CDS volumes around $71 bln – DTCC
NEW YORK, Oct 27 – Around $71 billion in credit default swaps on defaulted Icelandic banks Glitnir, Kaupthing and Landsbanki will be settled in auctions next week, according to the Depository Trust & Clearing Corp, which clears the majority of trades in the credit derivative market.
http://malaysia.news.yahoo.com/rtrs/20081027/tbs-swaps-dtcc-7318940.html

Environmental Trading News

Japanese exchange trials carbon-neutral power trade
By Risa Maeda
TOKYO, Oct 28 (Reuters) – The Japan Electric Power Exchange (JEPX) plans an Internet site to bring together parties wanting to trade carbon-neutral power that is generated from renewable sources or from fossil fuels offset by U.N. carbon credits. An exchange official said on Tuesday that the aim was to start the site by mid-November, initially on a trial basis.
http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUST27143620081028

EcoloCap Signs New Carbon Credit Projects in China
MONTREAL, QUEBEC, Oct 28, 2008 (MARKET WIRE via COMTEX) — EcoloCap Solutions, Inc. today announced that it has in the past two weeks reached carbon credit purchase agreements with several large Chinese industrial companies which represent a 100% increase in the company’s supply of CERs over the next 5 years.
http://www.marketwatch.com/news/story/EcoloCap-Signs-New-Carbon-Credit/story.aspx?guid=%7B65AD16EF-F40D-4362-B1C1-ED30A0E1A4F4%7D

ETF Securities To List Europe’s First Carbon
ETC ETF Securities Limited (ETFS), the global pioneer in Exchange Traded Commodities (ETCs), will list the world’s first Carbon ETC on the London Stock Exchange (LSE) in the dedicated ETC segment. ETFS Carbon offers investors, for the first time ever in Europe, the opportunity to gain simple and direct exposure to the carbon emissions allowance futures market. It is expected that the first day of trading will be Thursday 30th October.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78402

Ethical Funds unveils investor strategy for reducing oil sands risks
Too much development too fast in Alberta’s oil sands is creating negative environmental and social impacts that bring risks to energy companies and their investors, says The Ethical Funds Co. in its latest white paper.
http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=46630&IdSection=149&cat=149

Introduction of a Spread Trade Facility Between EUA and CER Futures
ECX and ICE Futures Europe today announce the introduction of a CER/EUA Futures Spread trade facility between the ICE ECX CFI EUA Futures (‘EUA Futures’) Contracts and the ICE ECX CFI CER Futures Contracts (‘CER Futures’) which will be available on the ICE platform as from Friday 24 October 2008.
http://www.ecx.eu/default_flash.asp?page=http%3A//www.ecx.eu/content.asp%3Fid%3D6%26sid%3DCEREUAsprnews

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Click here to subscribe: jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

Eleven PowerShares DB Exchange Traded Funds Scheduled to Move to the NYSE Arca
http://biz.yahoo.com/bw/081028/20081028006042.html?.v=1

NYSE Arca Options to list ISE FX Options
The International Securities Exchange (ISE) and NYSE Euronext (NYSE Euronext: NYX) announced today that they have entered into an agreement to license the right to list ISE FX Options® products on the NYSE Arca Options platform. This allows NYSE Arca Options to trade options on all currency pairs traded at ISE. The unique, dollar-based structure of ISE’s FX options creates an underlying value similar to traditional equity or index options and provides investors with a simple tool to trade their views on the strength of the U.S. dollar in relation to foreign currencies. NYSE Arca Options began trading options on the first of six currency pairs, the U.S. dollar/euro (Symbol: EUI), on Monday, October 27, 2008. The products are fungible with ISE’s existing FX options contracts.
http://www.nyse.com/press/1225189880663.html

Scoach and EDG Make Certificate Development
Transparent Scoach, the Frankfurt exchange for structured products, and the European Derivatives Group (EDG) are implementing the concept they developed together for the analysis of certificate performance. New certificate indices mean that for the first time, there are transparent yardsticks for the most important products.
http://deutsche-boerse.com/dbag/dispatch/en/notescontent/gdb_navigation/press/10_Latest_Press_Releases/INTEGRATE/mr_pressreleases?notesDoc=89106962B4853048C12574F0003EA192&newstitle=scoachandedgmakecertificatedev&location=press

Tokyo Stock Exchange Group, Inc. and Markit Group Limited Sign a Memorandum of Understanding (MOU)
Tokyo Stock Exchange Group, Inc. (TSE Group) and Markit Group Limited agreed upon a Memorandum of Understanding (MOU) on October 28.
http://www.tse.or.jp/english/news/200810/081028_b.html

TSE to Launch Mini-10-year JGB futures
As part of its efforts to further expand its fixed income product line up, the Tokyo Stock Exchange, Inc. (TSE) announced its plan today to launch mini-sized 10-year JGB futures. These futures are scheduled to become available on March 23, 2009.
http://www.tse.or.jp/english/news/200810/081028_a.html

Bond Exchange Of South Africa Receives Takeover Offer From The JSE
The Bond Exchange of South Africa (“BESA”), of which NZX is the largest shareholder at 22% as a result of capital raising that closed on October 6, 2008, has over the weekend received an unsolicited takeover offer from the Johannesburg Stock Exchange (“JSE”). The takeover offer is at a 23% premium to the valuation at which NZX acquired its shares on October 6, 2008.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78391

Xetra Release 9.1 Simulation – Distribution and Installation…
http://www.eex.com/en/document/39593/2008-10-27%20Release%20Xetra%209.1_Simulations-Update%20Kit%201.pdf

New Release EEX Communicator 3.0 available for Production
http://www.eex.com/en/document/39589/Customer%20Information%202008-10-27%20EEX%20Communicator%20-%20Launch%20Production%20Release.pdf

[CBOE] SPX Pit Expansion
http://www.cboe.org/publish/InfoCir/IC08-180.pdf

Volkswagen AG Ordinary Shares: Information on Trading Options and Futures Contracts
http://www.eurexchange.com/download/documents/circulars/cf2622008e.pdf

Volkswagen AG: Change of Strike Price Display / Reduction of Decimal Places for the Single Stock Future
http://www.eurexchange.com/download/documents/circulars/cf2612008e.pdf

Market-Making in Equity Options: New Quote Obligations for VOW http://www.eurexchange.com/trading/products/EQU/news_EQU/productNews_2008_10_28_883_en.html

Weekly Top Insider Buys: CME Group Inc., CSX Corp., Peabody Energy Corp., Avery Dennison Corp., Manpower Inc.
Directors Patrick B Lynch and Joseph Niciforo bought shares of CME in October and June respectively. The price per share has decreased more than 9% since. Directors Robert F Corvino, Leo Melamed, and Gary M Katler sold shares of CME in September and May respectively.
http://www.gurufocus.com/news.php?id=37618

Brokers & Dark Pools

Fortis Financial Statements Are Probed by Prosecutors (Update1)
By John Martens Oct. 28 (Bloomberg) — Brussels prosecutors appointed an investigating judge today to probe whether Fortis, once Belgium’s largest financial-services firm, gave investors false information about its solvency and liquidity as early as August 2007.
http://www.bloomberg.com/apps/news?pid=20601085&sid=aRWlNNWSpbFc

Defense Lawyers See Bonanza From Lehman, Bear, Other Collapses
By Patricia Hurtado, David Voreacos and Lindsay Fortado
Oct. 27 (Bloomberg) — Defense lawyers are bullish on Wall Street. A rising number of defendants and suspects in government probes of collapsed financial firms may yield the biggest fee bonanza for the defense bar since the days of Enron Corp. and WorldCom Inc. The largest cases can generate millions in revenue. Former Enron Chief Executive Officer Jeffrey Skilling alone paid $23 million in legal fees even before he went on trial for fraud and was convicted.
http://www.bloomberg.com/apps/news?pid=20601203&sid=awuOjwqgyeN8

Citigroup, HSBC Still Seek Buyers for Dubai’s $6 Billion Loan
By Haris Anwar Oct. 28 (Bloomberg) — Citigroup Inc., HSBC Holdings Plc and seven other banks are still seeking buyers for $6 billion of loans to Investment Corp. of Dubai, more than two months after underwriting the debt for the state-owned holding company. Demand for Dubai loans has dried up on investor concern that the worldwide credit crunch will hurt the Persian Gulf state’s ability to finance itself. Dubai’s government-controlled companies owe at least $47 billion, more than the emirate’s 2006 gross domestic product, according to Moody’s Investors Service.
http://www.bloomberg.com/apps/news?pid=20601104&sid=apvaaIfrc0Pk

DTCC Names Vice President for Global Sales, Asset Services
http://biz.yahoo.com/bw/081028/20081028005444.html?.v=1

UBS and Paramax Capital settle swap dispute
STAMFORD, Conn. – Private equity firm Paramax Capital International said Monday it has “amicably” reached a settlement with UBS AG that resolves an outstanding dispute over a credit default swap transaction.
http://www.forbes.com/feeds/ap/2008/10/27/ap5609494.html

UAE INVESTORS EXPOSED TO LEHMAN BROTHERS LAUNCH WEBPAGE
A group of United Arab Emirates (UAE)-based investors, with investments linked to failed American investment bank Lehman Brothers, have launched the webpage www.victimsoflb.com in a concerted effort to protect their rights and investments.
http://malaysia.news.yahoo.com/bnm/20081028/tbs-uae-lehman-ceeeaba.html

Regulatory News

Free-market maestro’s reputation in tatters
ANALYSIS: SPARE A thought for Alan Greenspan. For years lauded as the “maestro”, the subprime mortgage market meltdown and the ensuing financial crisis has seen his reputation torn to shreds. “If anyone is to blame for the current situation, it is Mr Greenspan,” said 2008 Nobel Prize-winning economist Paul Krugman, adding that the former US Federal Reserve chairman “pooh-poohed warnings about an emerging bubble and did nothing to crack down on irresponsible lending”.Italian finance minister Giulio Tremonti even asked last week whether Greenspan is, “after bin Laden, the man who hurt America the most”.
http://www.irishtimes.com/newspaper/finance/2008/1028/1225061111023.html

The time for hedge fund regulation is now
http://www.menafn.com/qn_news_story.asp?StoryId=%7bB366358F-AA25-470D-A1BE-D6C236E76E53%7d

SEC Urged To Resist ‘Political Pressure’ On Accounting
WASHINGTON -(Dow Jones)- The Securities and Exchange Commission should ignore pleas for political interference in mark-to-market accounting rules, Financial Accounting Foundation Chairman Robert Denham said in a letter issued on the eve of an SEC roundtable discussion of the issue.
http://www.nasdaq.com/aspxcontent/NewsStory.aspx?cpath=20081028%5cACQDJON200810281219DOWJONESDJONLINE000572.htm&&mypage=newsheadlines&title=SEC%20Urged%20To%20Resist%20′Political%20Pressure’%20On%20Accounting

French prosecutors probe Caisse d’Epargne trade losses
PARIS (AFP) – French prosecutors on Monday announced a probe into how the Caisse d’Epargne bank lost more than 700 million euros in risky derivatives trading at the height of the global finance crisis.
http://news.yahoo.com/s/afp/20081027/bs_afp/financeeconomybankingfrancecompanycaisseprobe_081027175046;_ylt=AromkeRGdV3E8c3KNRi8oremOrgF

Paris Probes Trading Loss at Caisse d’Epargne
The Paris prosecutor’s office said Monday it opened an investigation into a €751 million ($945.1 million) trading loss at French mutual bank Caisse d’Epargne that prompted the resignation of its top executives.
http://online.wsj.com/article/SB122514841480674029.html?mod=googlenews_wsj

State Aid: European Commission Approves German Support Scheme For Financial Institutions
The European Commission has approved, under EC Treaty state aid rules, a German rescue package intended to stabilise financial markets by providing capital and guarantees to eligible financial institutions. Following close cooperation with the German authorities and the submission of a comprehensive set of commitments to ring-fence the application of the measures, the Commission found the scheme to be in line with its Guidance Communication on state aid to overcome the current financial crisis (see IP/08/1495). The package constitutes an adequate means to remedy a serious disturbance in the German economy while avoiding undue distortions of competition and is therefore compatible with Article 87.3.b. of the EC Treaty. In particular, the package provides for non discriminatory access, is limited in time and scope and foresees adequate safeguards to minimise distortions of competition.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78405

Deputy US Treasury Secretary Robert M. Kimmitt Remarks At The Dubai International Financial Centre – “The Stabilizing Force Of Open Investment In The Global Economy”
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78412

Bank Of England Financial Stability Review – Issue 24: Rebuilding Confidence In The Financial System
The Bank of England is today publishing its bi-annual Financial Stability Report. The Report analyses the developments that have culminated in the turmoil of recent weeks and the actions taken by the UK authorities and other countries. It sets out the Bank’s views on the near-term prospects for the financial system and the reforms necessary to address systemic risks.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78392

Brazil finance minister plans no derivatives rescue
Brazil’s government has no plans to rescue firms in distress because of bad currency bets with foreign exchange derivatives, Finance Minister Guido Mantega said on Monday.
http://www.reuters.com/article/usDollarRpt/idUSN2732643620081027

National Futures Association – News Facts Actions – Fall 2008 In this issue:
• New provisions of Commodity Exchange Act prompt amendments to NFA forex rules • NFA prepares for influx of forex registrations • FINRA announces increase in examination fees • Board Actions • News Briefs
http://www.nfa.futures.org/member/newsLetter2.asp

Requirements for disclosure and reporting of short sales from 19 November 2008
On 21 October 2008, the Australian Securities and Investments Commission (ASIC) announced that it expected to lift the ban on covered short selling of non-financial stocks from 19 November 2008. ASIC and the Australian Securities Exchange (ASX) have been working with industry participants to develop arrangements for disclosure and reporting of short sales when the ban is lifted. These arrangements are outlined below and complement the disclosure regime for securities lending proposed by the Reserve Bank in its release of 24 October 2008.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/08-211%20Requirements%20for%20disclosure%20and%20reporting%20of%20short%20sales%20from%2019%20November%202008?opendocument

Victorian man pleads guilty to five charges
Mr Timothy John McKenzie, of Boronia, Victoria, has today pleaded guilty to three charges of obtaining a financial advantage by deception and two charges of theft in the Melbourne County Court.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-45%20Victorian%20man%20pleads%20guilty%20to%20five%20charges?opendocument

FMA issues temporary prohibition on naked short selling of shares of Erste Group Bank AG, Raiffeisen International Bank-Holding AG, UNIQA Versicherungen AG and WIENER STÄDTISCHE Versicherung AG Vienna Insurance Group
http://www.fma.gv.at/cms/site/EN/presseaussendung_detail.html?doc=CMS1225122783194&channel=CH0055

Tip leads to NBSC cease trade order
Two securities companies were ordered in September by a New Brunswick Securities Commission (NBSC) panel to cease trading in all securities after a New Brunswick resident filed a complaint against Global Energy Group Ltd. and New Gold Ltd. Partnerships.
http://www.investmentexecutive.com/client/en/News/DetailNews.asp?id=46688&IdSection=8&cat=8&BImageCI=1

Consolidation of holdings under Takeover Regulations
http://www.sebi.gov.in/press/2008/2392008.html

Investments – Indexes – Managed Futures – Managed Funds

Treasury puts $34B in 18 regional banks
The Treasury Department has placed more than $34 billion in 18 regional banks in a renewed push to ease the nation’s credit crisis, amid growing complaints that the recipients of the taxpayer bailout are using the money not to lend to customers but to buy their competitors.
http://www.washingtontimes.com/news/2008/oct/28/treasury-puts-34-billion-in-18-regional-banks/

Treasury predicts huge government borrowing needs
http://us.lrd.yahoo.com/_ylt=AmzwtwJlk3DMC8eoW8s2SdK7YWsA/SIG=11q2bjnp6/
http%3A//biz.yahoo.com/ap/081028/meltdown_treasury.html

US to plow billions into major banks, but shares dive globally
WASHINGTON (AFP) – US markets plunged just ahead of the close Monday as investors shrugged off the start of government capital injections into banks and the possibilities of more interest rate cuts in both the United States and Europe.
http://news.yahoo.com/s/afp/20081027/bs_afp/financeeconomyworld_081027231504;_ylt=Ap2mUinzyxUkaWrKTqYEi1amOrgF

BP reports record $10 billion profit
LONDON (Reuters) – British oil major BP Plc may have marked the oil industry’s high point by reporting a record $10.0 billion third quarter replacement cost profit on Tuesday, as the recent collapse in crude prices ensures a tougher outlook.
http://news.yahoo.com/s/nm/20081028/bs_nm/us_bp;_ylt=Ap_zn58.xrcWK3ILjibT2.0DW7oF

Margin Calls, Redemptions Weigh on Market
What started as a bank-solvency scare on the stock market has turned into a self-perpetuating margin call. Traders and investment managers are attributing much of the October stock-market rout to hedge funds and other investors trading with borrowed money being forced into the market to sell stock.
http://online.wsj.com/article/SB122513281830072753.html?mod=googlenews_wsj

KLD Indexes And FTSE Group Announce New Global Partnership – Global Index Provider
FTSE To Offer Indexes In Partnership With Sustainability/SRI Index Leader KLD KLD Research & Analytics, Inc., the leading provider of environmental, social and governance (ESG) research and indexes, and global index leader FTSE today announce a strategic partnership to offer a comprehensive suite of ESG indexes. FTSE will collaborate with KLD on the conception, design and worldwide marketing of co-branded ESG indexes.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78407

October 2008 “Islamic Market’s Measure” – Preliminary Report: Monthly Report On The Performance Of The Dow Jones Islamic Market Indexes
Based on the close of trading on October 27, the global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, lost -24.05% month-to-date, closing at 1547.45. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of -25.51%, closing at 134.79.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=78398

DJ-AIG Commodity Fund Investment Drops $20 Billion (Update2)
By Millie Munshi Oct. 27 (Bloomberg) — Investments in funds tracking the Dow Jones-AIG group of commodity indexes plunged $20 billion, or 36 percent, in the third quarter amid financial market turmoil and concerns the global economy may fall into a recession. About $35 billion tracked the commodity indexes at the end of the third quarter, Dow Jones said today in an e-mailed statement. That compares with $55 billion at the end of the second quarter as the index surged toward a record on July 3.
http://www.bloomberg.com/apps/news?pid=20601103&sid=awUm_WekTl.k&refer=us

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCalendar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

SGE mulls over physical gold options trading
Shanghai. October 28. INTERFAX-CHINA – The Shanghai Gold Exchange (SGE) is currently considering offering physical gold options trading, an SGE official told Interfax on Oct. 28.
http://www.interfax.cn/news/6450/

Climate Exchange to boost emission trading
A month after two environment and energy exchanges opened virtually simultaneously in Beijing and Shanghai in August, an environmental trading platform was established in Tianjin municipality, one of most vigorously developing cities in China.
http://www.chinadaily.com.cn/bizchina/2008-10/27/content_7144537.htm

Investor account tax scrapped
The central government announced yesterday that tax would be temporarily scrapped on the interest income from securities accounts of individual investors.
http://english.peopledaily.com.cn/90001/90776/90884/6521642.html

China’s listed companies post profits, earnings growth slows
Third-quarter net profits of 645 Chinese listed firms fell by an average 16.07 percent from the previous quarter, although profits for the first nine months were up 30.1 percent from the same period last year, the Shanghai Securities Journal reported on Monday.
http://english.people.com.cn/90001/90776/90884/6522263.html

Stocks dive 6.3% to 25-month closing low
China’s main stock index tumbled 6.32 percent on Monday to a 25-month closing low as worries about faltering corporate profits mounted during the peak week of the third-quarter earnings reporting season.
http://www.chinadaily.com.cn/bizchina/2008-10/27/content_7146066.htm

Frontier Markets

Kuwait traders walk out again as Gulf share slide goes on
Traders on the Kuwait stock market walked out again after emergency financial measures by Kuwaiti authorities failed to prevent fresh falls in prices as stocks sank on all Gulf bourses.
http://afp.google.com/article/ALeqM5jFKVsGu2EsAAYRwJdzV_sOh0Rfyg

Miscellaneous News

ProSignal Inc. Releases a Fully Automated Online Forex Currency Trading Platform
http://biz.yahoo.com/iw/081028/0446786.html

`Hedge Fund Wives’ Author Sues Sister Over Authorship (Update2)
By Erik Larson Oct. 27 (Bloomberg) — Tatiana Boncompagni, the author of “Hedge Fund Wives,” a novel to be published in May by News Corp.’s HarperCollins, sued her sister Natasha over claims she copied parts of the manuscript and sought copyright protection as its co-author.
http://www.bloomberg.com/apps/news?pid=20601103&sid=a9nIiC9XDoR8

NY judge orders medical exam for swindler NY judge orders physical, mental tests for hedge fund swindler who abandoned his SUV on bridge
http://biz.yahoo.com/ap/081028/fugitive_executive.html?.v=1

www.ONN.tv Announces Partnership with TheChicagoSchoolofTrading.com CHICAGO–(BUSINESS WIRE)–The Options News Network (“www.ONN.tv”), provider of daily options news, trading ideas, and strategies, today announced a strategic alliance with TheChicagoSchoolofTrading.com, an educational company offering video-based options and futures courses and mentoring services for aspiring options and futures traders.
http://www.businesswire.com/portal/site/home/template.NDM/news/more/?javax.portlet.tpst=0b2c9a4dd5f89b80977dd367cc87b42f_ws_MX&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_viewID=news_view_popup&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsLang=en&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_ndmHsc=v2*A1222599600000*B1225240817000*DgroupByDate*J2*L1*N1000837*Zfutures%20trading&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsId=20081027006466&beanID=202776713&viewID=news_view_popup&javax.portlet.begCacheTok=com.vignette.cachetoken&javax.portlet.endCacheTok=com.vignette.cachetoken

BGC’s Dollar OIS and EONIA Pages Confirmed as ISDA® Pricing References Simultaneously, Singapore dollar and Hong Kong dollar interest rate swap pages (IRS) confirmed News follows previous acceptance of euro and US dollar IRS pages
LONDON & NEW YORK–(BUSINESS WIRE)–BGC Partners, Inc. (Nasdaq: BGCP), one of the world’s leading inter-dealer brokers, announced today the publication of its US dollar overnight index swap (OIS) and euro overnight index average (EONIA) pages as price references by the International Swaps and Derivatives Association (ISDA®). Today’s announcement also confirmed the acceptance of BGC’s Singapore dollar and Hong Kong dollar interest rate swap pages and follows the previous announcement by BGC that ISDA has published its euro and US dollar interest rate swap pages as pricing references.
http://www.businesswire.com/portal/site/home/template.NDM/news/more/?javax.portlet.tpst=0b2c9a4dd5f89b80977dd367cc87b42f_ws_MX&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_viewID=news_view_popup&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsLang=en&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_ndmHsc=v2*A1222599600000*B1225240817000*DgroupByDate*J2*L1*N1000837*Zfutures%20trading&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsId=20081028005463&beanID=202776713&viewID=news_view_popup&javax.portlet.begCacheTok=com.vignette.cachetoken&javax.portlet.endCacheTok=com.vignette.cachetoken

eSignal Launches Two Products to Give Futures Traders an Edge in Agriculture Markets
http://www.businesswire.com/portal/site/home/template.MAXIMIZE/news/more/?javax.portlet.tpst=0b2c9a4dd5f89b80977dd367cc87b42f_ws_MX&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_viewID=news_view&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsLang=en&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_ndmHsc=v2*A1222599600000*B1225240817000*DgroupByDate*J2*L1*N1000837*Zfutures%20trading&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsId=20081028005042&beanID=202776713&viewID=news_view&javax.portlet.begCacheTok=com.vignette.cachetoken&javax.portlet.endCacheTok=com.vignette.cachetoken

IBFX Again Crowned Fastest Growing Company in Utah
http://www.businesswire.com/portal/site/home/template.MAXIMIZE/news/more/?javax.portlet.tpst=0b2c9a4dd5f89b80977dd367cc87b42f_ws_MX&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_viewID=news_view&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsLang=en&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_ndmHsc=v2*A1222599600000*B1225240817000*DgroupByDate*J2*L1*N1000837*Zfutures%20trading&javax.portlet.prp_0b2c9a4dd5f89b80977dd367cc87b42f_newsId=20081028006084&beanID=202776713&viewID=news_view&javax.portlet.begCacheTok=com.vignette.cachetoken&javax.portlet.endCacheTok=com.vignette.cachetoken

Futures Lose Clarity, Place Fed in Dark on Reaction (Update1)
Federal Reserve Chairman Ben S. Bernanke and his colleagues usually sit down for their interest- rate meetings with a clear idea of what investors think they’ll do. Not this time.
http://www.bloomberg.com/apps/news?pid=20601103&sid=aZYcXbWIqHJI&refer=news

World Is `Drowning in Oil’ (Again) After Drought: Caroline Baum
Three months ago, the world was running out of oil. Seriously. I kid you not. Everywhere you turned, you heard whispers that the day of petroleum reckoning was at hand.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=aZ_wEtBdohjM

Observations – Statistics – Commentary

The Bet That Blew Up Wall Street
Steve Kroft examines the complicated financial instruments known as credit default swaps and the central role they are playing in the unfolding economic crisis.
http://www.cbsnews.com/stories/2008/10/26/60minutes/main4546199.shtml

*** 60 Minutes on CBS television takes a hard look at credit derivatives. Worth watching if you missed it last night.

++++

Amid downturn, Wall Streeters leaving NYC for smaller firms in other states, overseas
ALBANY, N.Y. (AP) _ Bankers and brokers looking to escape the financial meltdown are scrambling to relocate their families, possessions and rarified talent far from Wall Street to places such as Florida, Chicago, Milwaukee, Virginia and Asia. Travis Lacey left investment bank Jeffries & Co. and Wall Street behind in September to work for Baird in Chicago. He also left behind the nagging sense of worry that had plagued him since his company had started announcing layoffs earlier in the year. “Anyone in that environment, you never know what’s going to happen,” Lacey said. “There are a lot of good bankers that unfortunately are at the wrong place at the wrong time, especially in New York.”
http://www.chicagotribune.com/business/sns-ap-wall-street-exodus,0,979956.st
ory

From Friday: Looking for a Job on Wall Street?
On CNBC a moment ago, a great quip from Morgan Stanley’s irrepressible David
Darst:

“We tell the young people who are looking for a job on Wall Street now; it’s either Shanghai, Mumbai, Dubai, or goodbye.”
http://thefloat.typepad.com/the_float/2008/10/looking-for-a-job-on-wall-stre
et.html

++++

Lucrative deal in works of CME
BY DAVID ROEDER
Financial regulation in Washington is a jumble, as Congress and the bureaucrats kick around ideas for putting freewheeling credit default swaps under somebody’s control. CME Group (CME), owner of the Chicago Mercantile Exchange and the Chicago Board of Trade, has center stage in the negotiations and is liable to benefit hugely from regulatory change.
http://www.suntimes.com/business/roeder/1243213,curious-102608.article

**** Some risk should be managed. Some risks should be eliminated. Credit Default Swaps will fall in that category.

++++

Man On A Mission
The oil and gas maven is on a mission to lessen America’s dependence on foreign oil. Charlie Rose reports.
http://www.cbsnews.com/video/watch/?id=4546585n

**** Good profile of T-Boone Pickens on 60 Minutes.

++++

Net Capital Requirements for Forex Dealer Members
On October 22, 2008, the Commodity Futures Trading Commission approved increases to NFA’s capital requirements for Forex Dealer Members (FDMs). As stated in a July 23, 2008 Notice to Members, the minimum requirement will be $10 million as of October 31, 2008, $15 million as of January 17, 2009, and $20 million as of May 16, 2009.
http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2198

****

DGCX strengthens Indian Rupee Future Contract • New cash settlement mechanism in US Dollars • Monthly contract expiries for 12 months forward • New last trading day and extended trading hours
Dubai, October 27, 2008: Dubai Gold & Commodities Exchange (DGCX) today announced changes to its Indian Rupee futures contract. The revised Indian Rupee futures contract will be available for trading from November 3, and will provide cash settlement in US Dollars, facilitating the settlement process for both local and international market participants. More contracts will be available on a monthly basis out to twelve months forward and trading hours will be extended to 08.30 to 23:30 (Dubai time; GMT +4).
In addition, the last trading day will be two business days prior to the last business day of the contract month.
http://www.dgcx.ae/AboutUs.aspx

++++

Haunted Hike
Saturday night we took the Cub Scout Pack on a haunted hike the Boy Scouts put on. Despite the gore, blood, screaming zombies and guys with chain saws; the markets the last 6 weeks are still scarier.

My favorite part of the haunted hike was the cabin with the maze inside and all the walls painted black. They tell you whatever you do, “don’t turn left,” and of course the first turn is left.

The boys were so much braver when the hike was all done.

+++++

Lead Stories

LSE hunts for new chief
By Jeremy Grant
The London Stock Exchange has hired a City headhunter to find a replacement for its chief executive, Dame Clara Furse, signalling the beginning of the end of her long tenure at the exchange.
http://www.ft.com/cms/s/0/c6726c8a-a357-11dd-942c-000077b07658.html

LSE seeking Furse successor
SUCCESSION planning has already begun at the London Stock Exchange (LSE) to find a replacement for Dame Clara Furse, the company’s chief executive. The LSE yesterday confirmed its board was looking for a successor to Furse, but that her departure was not imminent. The LSE added: “Clara remains fully committed to the exchange’s continued success and, in particular, to the completion of its integration with Borsa Italiana.”
http://business.scotsman.com/business/LSE–seeking–Furse.4630961.jp

LSE Said to Hire Recruiting Company to Find Successor for CEO
By Nandini Sukumar Oct. 26 (Bloomberg) — London Stock Exchange Group Plc, which operates Europe’s oldest independent bourse, has hired a recruiting firm to find a successor to Chief Executive Officer Clara Furse, according to a person familiar with the matter. Furse, 51, will likely remain the company’s CEO until the end of 2009 to oversee the exchange’s purchase of Borsa Italiana SpA, said the person, who declined to be identified.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aIfdZa91sijA

Evil Wall Street Exports Boomed With `Fools’ Born to Buy Debt
By Mark Pittman
(Bloomberg) — Tom Bosh lowered the telephone receiver into its cradle, making a decision on the way down. “We’re not buying any more,” he told his traders at Bank of New York Co. “Nothing.” It was May 2007, and Bosh, who managed $25 billion from the bank’s 13th-floor trading room above Times Square, had just hung up on Ralph Cioffi at Bear Stearns Cos. a dozen blocks away. Bosh had invested $50 million in notes from an issuer Cioffi controlled, and he was ready to pull the plug. “I had a bad feeling,”
Bosh, 45, recalled. “Cioffi was just bulldogging everyone. He was saying, `These assets are good, the collateral is paying down, and I know more than you.’ That type of attitude.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0jln3.CSS6c

SEC Brings Second-Highest Number of Enforcement Actions in Its History
The U.S. Securities and Exchange Commission brought 671 enforcement actions in fiscal year 2008, the second-highest total in the agency’s history. The SEC also repeated last year’s total of distributing more than $1 billion to investors harmed by others’ actions during fiscal 2008, which ended on Sept.
30.
http://biz.yahoo.com/law/081027/e37174d6b25e766abb8051a9fc54607a.html?.v=1

Citadel Projects Calm; Call to Merge the Regulators
Citadel, the hedge fund in Chicago run by the wunderkind Kenneth C. Griffin, has found just how hard it is to calm investors during these troubled times.
http://www.nytimes.com/2008/10/27/business/27views_ready.html

US hedge fund admits 35% plunge in value since downturn
One of the world’s biggest hedge fund managers, Citadel, told clients last night that two of its main funds have lost 35% of their value this year after rumours swept the market about its financial position. The Chicago-based firm, which has $20bn (£12.5bn) of funds under management, blamed “panic” and “dislocation” on global exchanges for its predicament.
http://www.guardian.co.uk/business/2008/oct/25/hedge-fund-market-turmoil-cit
adel

Cramer: A Vulnerable Citadel
http://www.thestreet.com/story/10444377/1/cramer-a-vulnerable-citadel.html

CITADEL TURMOIL
HURDLES MOUNTING ON GRIFFIN’S BIG PLANS FOR FIRM Efforts by Citadel Investment Group’s Ken Griffin to morph his highflying hedge fund into a financial titan appear to be running into stiff headwinds.
http://www.nypost.com/seven/10272008/business/citadel_turmoil_135466.htm

Hedge Fund Withdrawals Stress Market; Citadel Reassures Clients
By Saijel Kishan and Katherine Burton Oct. 25 (Bloomberg) — Hedge funds are aggravating the worst market selloff in 50 years as they dump assets to meet investor redemptions and keep lenders at bay. U.S. hedge-fund managers may lose 15 percent of assets to withdrawals by year-end while their European rivals shed as much as 25 percent, Huw van Steenis, a Morgan Stanley analyst in London, wrote yesterday in a report to clients. Combined with investment losses, industry assets may shrink to $1.3 trillion, a 32 percent drop from the peak in June.
http://www.bloomberg.com/apps/news?pid=20601170&sid=a8.xpaCUzHSI

Hedge funds face pressure from brokers
By Chris Hughes and Kate Burgess in London
The survival of a raft of hedge funds is being threatened by fresh pressure to stump up more collateral for trades made in a range of illiquid assets. So-called prime brokers, who provide a range of services to hedge funds, are imposing tougher conditions on their clients and charging more for financing following the collapse of Lehman Brothers in mid-September, raising fears that more funds face collapse.
http://www.ft.com/cms/s/0/7b63fa12-a22e-11dd-a32f-000077b07658.html?nclick_c
heck=1

‘Panic’ in U.S. Futures Rattles Investors Worldwide
Oct. 27 (Bloomberg) — U.S. stock-index futures are becoming less reliable as predictors of market moves. With equity investors around the world contending with the worst drop since the Great Depression, futures on the Standard & Poor’s 500 Index misstated gains or losses by an average 1.4 percentage point in October, twice the gap in the third quarter, data compiled by Bloomberg show. One of the biggest misses was Oct. 24, when futures fell as much as 60 points, while the index itself dropped 37 points in the first half hour of trading, before closing down 31.
http://www.bloomberg.com/apps/news?pid=20601213&sid=aPjqFQVftPqo&refer=home

Why imperfect hedging makes sense
By Lionel Martellini
A recent surge in worldwide inflation has increased the need for investors to hedge against unexpected changes in prices. In this context, novel forms of institutional investment solutions have been promoted by asset managers and investment banks. They have focused on designing customised liability-matching portfolios, to hedge away the impact of unexpected changes in risk factors that affect liability values, most notably inflation risk.
http://www.ft.com/cms/s/0/45482ed0-a21a-11dd-a32f-000077b07658.html

JSE, Spurned for a Decade, Bids to Buy Bond Exchange
By Vernon Wessels and Garth Theunissen
Oct. 27 (Bloomberg) — JSE Ltd. offered 173.2 million rand ($15.4 million) for the Bond Exchange of South Africa Ltd. in a bid to combine Africa’s biggest stock and bond markets, after its approaches to the debt bourse were spurned for a decade.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFdaXyfyK5ks

World markets slump as Nikkei hits 26-year low
LONDON – European stock markets fell heavily Monday after the Nikkei index in Japan closed at its lowest in 26 years as the financial crisis raised recession fears and drove up the yen, piling the pressure on the country’s exporters.
http://news.yahoo.com/s/ap/20081027/ap_on_bi_ge/world_markets;_ylt=Al7TmF9Qg
4EOsdi.Mk9VwyKyBhIF

Environmental Trading News

Betting on climate change
Investor Daily: Businesses that work to offset global warming could be safer bets in a recession.
http://money.cnn.com/2008/10/24/magazines/fortune/copeland_climatechange.for
tune/index.htm?section=money_latest

Blue Skies for Green Trading
New options in climate-sensitive plays.
THE CLOUDY SPECTER OF CLIMATE change is lined with green: growing acceptance of environmental challenges is making commodity-linked “cleantech” investing a hot spot — and long-view investors might want to pay heed. According to HSBC’s assessment, annual revenue for the 390 companies in the climate-change sector have already reached $300 billion. Still loosely defined, cleantech revolves around carbon-management and conservation themes. Some cleantech segments, like plant-based biofuels, are already familiar to commodity investors. But in November, the nearly four-year-old Chicago Climate Futures Exchange will offer futures and options contracts based on the Dow Jones Sustainability World and Sustainability North America indexes. “The climate-change challenge isn’t going away,” says Jack Robinson, president and founder of Winslow Management, which runs a pair of green mutual funds.
http://online.barrons.com/article/SB122488818586468317.html?mod=googlenews_b
arrons

Climate Exchange to boost emission trading
A month after two environment and energy exchanges opened virtually simultaneously in Beijing and Shanghai in August, an environmental trading platform was established in Tianjin municipality, one of most vigorously developing cities in China. The newly unveiled Tianjin Climate Exchange
(TCX) is a joint venture of US-based Chicago Climate Exchange (CCX), China National Petroleum Corporation Assets Management Co Ltd (CNPCAM) along with Tianjin Property Rights Exchange (TPRE).
http://www.chinadaily.com.cn/bizchina/2008-10/27/content_7144537.htm

CCX featured on CNN.Money
http://money.cnn.com/video/?/video/news/2008/10/23/news.corneroffice.ccx

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf. Click here to subscribe:
jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

Bats Exchange promotes Tami Schademann to chief regulatory officer
Bats Holdings, an innovative global financial markets technology company, announces the promotion of Tami Schademann to chief regulatory officer of Bats Exchange, while also naming her senior vice president.
http://tinyurl.com/57d2lt

Corporate executives raise funds for charity at SGX Bull Charge
SINGAPORE : Executives from Singapore’s corporate sector traded in their suits for shorts at the Singapore Exchange (SGX) Bull Charge run on Friday afternoon. The event, which aims to promote corporate social responsibility, raised over S$12 million for a record 19 charities. And for the first time, an overseas charity was also a beneficiary.
http://ph.news.yahoo.com/cna/20081025/tap-213-corporate-sector-execs-raise-f
un-231650b.html

Minneapolis Grain Exchange going electronic
The days of shouted trades on the floor of the Minneapolis Grain Exchange will end in December when the exchange converts to an all-electronic-trading format. The exchange, which opened in the 1880s, announced the change Friday.
http://www.bizjournals.com/twincities/stories/2008/10/20/daily49.html?ana=fr
om_rss

Minneapolis Grain Exchange to move to electronic trading
The Minneapolis Grain Exchange announced Friday that it will move to electronic trading exclusively Dec. 19, eliminating its trading floor and “open outcry” trading of grain futures and options. The exchange noted a dramatic shift toward electronic trading in the past year. Officials with the Kansas City Board of Trade were unavailable for comment Friday but in a statement said: “We have no intention at this time of closing our trading floor. About one-third of our daily trading volume is still conducted on the trading floor. “We believe that maintaining both venues provides our market participants with choice of access to satisfy their risk management needs.”
http://www.kansascity.com/business/story/857473.html

Bourse temporarily halts trading to calm investors
MANILA, Philippines – For the first time in its 81-year existence, the Philippine Stock Exchange (PSE) temporarily halted trading in a bid to calm the frantic sell-off in local shares, which sent the main index falling by more than a tenth of its value.
http://www.gmanews.tv/story/129593/Bourse-temporarily-halts-trading-to-calm-
investors

NYSE’s new rules to eliminate specialists’ “look”
By Jonathan Spicer
NEW YORK, Oct 24 (Reuters) – The New York Stock Exchange, often criticized for its slow transition to automated markets, said on Friday securities regulators had approved plans that will stop trading floor specialists from seeing orders before the public.
http://www.reuters.com/article/marketsNews/idINN2452708120081024?rpc=44

NASDAQ OMX Group Hosts Its First Middle East Investor Conference In Dubai To Provide Issuers With Access To Gulf Investors – Exchange Will Ring NASDAQ Opening Bell From Dubai On November 20
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8367

Brown-Forman Corporation – Cl. B (”BF/B /BFB1C”)
5-for-4 Stock Split
Ex-Distribution Date: October 28, 2008
http://www.onechicago.com/?p=1212

21 Claymore ETFs Begin Trading on NYSE Arca
http://www.nyse.com/press/1224844298182.html

Performance Bond Requirement Changes – Effective – Thursday, October 27,
2008
http://www.cme.com/clearing/rmspan/pbadv/Chadv08-291.html

Additional Contract Months Listed for Soybeans Futures-Effective Monday, November 3, 2008
http://www.cme.com/clearing/clr/clradv/Chadv08293.html

CME Group Delivery Dates for November 2008
http://www.cme.com/clearing/clr/clradv/Chadv08292.html

New Daily Volume Record on ECX
http://www.europeanclimateexchange.com/content.asp?id=6&sid=RecVol23OCT

BASF: Further Information on the Takeover Offer to the Shareholders of Ciba Holding AG
http://www.eurexchange.com/download/documents/circulars/cf2592008e.pdf

Exchange Transition Information
Information on the BATS transition from ECN to Exchange and how it will affect you.
http://www.batstrading.com/exchange/

NASDAQ OMX Announces Third Quarter 2008 New Listings Statistics
http://www.nasdaq.com/newsroom/news/newsroomnewsStory.aspx?textpath=pr2008\A
CQPMZ200810270300PRIMZONEFULLFEED152998.htm&cdtime=10%2f27%2f2008%20+3%3a00A
M&title=NASDAQ%20OMX%20Announces%20Third%20Quarter%202008%20New%20Listings%2
0Statistics

Close-Out Requirement for Market Makers Under Temporary Rule 204T of Regulation SHO (REVISED)
http://www.cboe.org/publish/RegCir/RG08-138.pdf

Brokers & Dark Pools

Deutsche Bank Derivatives-Trading Loss Said to Top $400 Million
Oct. 27 (Bloomberg) — Deutsche Bank AG, Germany’s biggest bank, lost more than $400 million on equity derivatives trades as stock markets headed for their biggest rout since the 1930s, two people with direct knowledge of the matter said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=agaXIo6ul0OU

Instinet Starts CSA Program in Canada
October 27, 2008 – Instinet has made BrokerShare, its commission sharing arrangement program, available through its Canadian subsidiary.
http://www.securitiesindustry.com/news/22908-1.html

Picking through Lehman’s remains
By Anousha Sakoui
What is surprising about walking into 25 Bank Street, until recently Lehman Brothers’ London headquarters, is that it does not feel very different to when the bank was still thriving.
http://www.ft.com/cms/s/0/c680c66c-a3c6-11dd-942c-000077b07658.html

Fed takes $2.7bn paper loss on Bear
By Francesco Guerrera in New York
The Federal Reserve on Thursday said it had suffered a $2.7bn paper loss on the $29bn portfolio of toxic assets it took over from Bear Stearns in March as part of JPMorgan Chase’s government-brokered takeover of the stricken investment bank. News of the unrealised losses, revealed in a filing that also showed that American Insurance Group has already used up three-quarters of a $123bn Fed loan, could fuel the political and public backlash over the use of government funds to rescue financial institutions.
http://www.ft.com/cms/s/0/bc104618-a163-11dd-82fd-000077b07658.html

Nomura’s Lehman Acquisition May Lead to Historic Loss
By Takahiko Hyuga and Shingo Kawamoto Oct. 27 (Bloomberg) — The acquisition that Nomura Holdings Inc. Chief Executive Officer Kenichi Watanabe called a “once in a generation opportunity” may lead to another historic event at Asia’s biggest securities firm: its largest annual loss.
http://www.bloomberg.com/apps/news?pid=20601101&sid=a6eZiiGvHrAY&refer=japan

Goldman chief sought Citi tie-up talks
Merger suggestion ahead of government bail-out
http://www.ft.com/cms/s/0/15d9f6ac-a39f-11dd-942c-000077b07658.html

Lehman’s European Operations Hit by Delays from Other Banks
The disentangling of Lehman Brothers‘ European operations is taking longer than hoped thanks to slow cooperation from other banks, The Financial Times reported, citing lead administrator Tony Lomas.
http://dealbook.blogs.nytimes.com/2008/10/27/lehmans-european-operations-hit
-by-delays-from-other-banks/

Lehman Brothers bosses blew £10million on luxuries before bank collapsed
Fat cat bosses at Lehman Brothers blew £10million on lavish meals and first class travel just a month before their bank collapsed. Executives around the world ran up the massive bills on their exclusive corporate American Express cards. Now the debts are unlikely to be paid and Amex staff fear the losses may lead to job cuts.
http://www.mirror.co.uk/news/top-stories/2008/10/26/lehman-brothers-bosses-b
lew-10million-on-luxuries-before-bank-collapsed-115875-20840920/

Lehman work ‘may take years’
Winding up Lehman Brothers’ operations in London is taking longer than expected, and may not be completed for many years, according to the man in charge of the investment bank’s administration.
http://www.thisislondon.co.uk/standard-business/article-23578100-details/Leh
man+work+’may+take+years’/article.do

Goldman called Citi for merger in September: source
LONDON (Reuters) – Goldman Sachs Chief Executive Lloyd Blankfein called Citigroup Inc head Vikram Pandit last month about a possible merger, but Pandit rejected the proposal, a source familiar with the matter said on Monday.
http://news.yahoo.com/s/nm/20081027/bs_nm/us_goldman_citi;_ylt=AidWS4PVtfxUd
YFqMtaZ_tu573QA

MUFG to raise $10.6 billion, Japan to take bank action
TOKYO (Reuters) – Mitsubishi UFJ Financial Group (8306.T), Japan’s biggest bank, said it would raise up to $10.6 billion to replenish a capital base depleted by a plunging stock market and its investment in Morgan Stanley .
http://news.yahoo.com/s/nm/20081027/bs_nm/us_financial_japan;_ylt=AmX9RLsu4o
.dcjkegHaz4Oi573QA

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig102408.htm

FBI Probe of JPMorgan Fees Focuses on Swaps Roiling Muni Debt
Oct. 27 (Bloomberg) — Joseph Ambrosini says the deal looked so easy.
JPMorgan Chase & Co. bankers told him there was really no risk. All he had to do was sign a public financing contract, and the bank would give $280,000 to his school district in New Castle, Pennsylvania. “They basically said, unless the world goes under the sea, we’d be in good shape,” says Ambrosini, the district’s business manager.
http://www.bloomberg.com/apps/news?pid=20601014&sid=aIL9gsK5wG40

Defense Lawyers See Bonanza From Lehman, Bear, Other Collapses by Patricia Hurtado, David Voreacos and Lindsay Fortado
Oct. 27 (Bloomberg) — Defense lawyers are bullish on Wall Street. A rising number of defendants and suspects in government probes of collapsed financial firms may yield the biggest fee bonanza for the defense bar since the days of Enron Corp. and WorldCom Inc. The largest cases can generate millions in revenue. Former Enron Chief Executive Officer Jeffrey Skilling alone paid $23 million in legal fees even before he went on trial for fraud and was convicted.
http://www.bloomberg.com/apps/news?pid=20601109&sid=awuOjwqgyeN8

Swiss prosecutors probe UBS execs over subprime crisis – report
ZURICH, Switzerland – Swiss prosecutors are examining whether officials at UBS AG broke any laws by withholding information about the bank’s exposure to the subprime mortgage crisis, according to a newspaper report Sunday.
http://www.gmanews.tv/story/129536/Swiss-prosecutors-probe-UBS-execs-over-su
bprime-crisis—report

Ex-US Treasury head Rubin: no return to Washington
http://www.reuters.com/article/politicsNews/idUSTRE49P2OQ20081027

Mark-to-market accounting isn’t going away: analyst
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49Q5A520081027

U.S. financial overhaul will take years: Fed official
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49Q2NR20081027

Congress Weighs Forming Special Panel for Overhaul of Financial Regulations
WASHINGTON — Congressional leaders are considering whether to create a special bipartisan panel to draft legislation to overhaul financial-services regulations next year.
The hope is that a single committee, possibly comprising senior lawmakers from the House and Senate, could help cut through the turf wars that often come with industry overhauls. Having a separate group of staffers also could help relieve the pressure on existing financial-committee staffers, some of whom have had to put on the back burner less-pressing responsibilities in order to deal with the financial crisis.
http://online.wsj.com/article/SB122506476673970483.html?mod=googlenews_wsj

United Airlines spent $550,000 lobbying in 3Q
WASHINGTON – United Airlines spent $550,000 lobbying during the third quarter on energy issues, passenger rights legislation and more, according to a disclosure form filed this week. One bill United lobbied on would establish a cap-and-trade system aimed at reducing greenhouse gas emissions.
As major fuel users, airlines have opposed cap-and-trade, saying it would amount to a new tax on their fuel consumption. The company also lobbied on two Senate bills that would direct the Environmental Protection Agency to decrease greenhouse gas emissions, according to the disclosure form filed Monday. Oil prices have retreated from the summer high that at one time looked like it threatened the whole business model of airlines. United lobbied on bills aimed at stopping what the airlines have called energy speculation, as well as legislation to regulate over-the-counter trading of energy derivatives. It also lobbied on a bill that would give the Commodity Futures Trading Commission authority over off-exchange foreign currency transactions.
http://www.forbes.com/feeds/ap/2008/10/24/ap5601765.html

15 Additional Banks Plan to Seek U.S. Aid
The Treasury Department plans to provide funds for 20 to 22 lenders in the current round of a $250 billion bank recapitalization program.
http://www.nytimes.com/2008/10/28/business/economy/28assist.html?ref=busines
s

BCSC panel orders frauster to pay more than $440,000 in penalties Former VCE officer diverted investors’s funds for personal gain
http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=46613&Id
Section=8&cat=8

Exemptive Orders and Exemptive, Interpretive, and No-Action Letters BATS Exchange, Inc. (October 23, 2008)
http://www.sec.gov/divisions/marketreg/mr-noaction/2008/bats102308.pdf

NMS Plans: Notice of Filing and Immediate Effectiveness of the Fourteenth Substantive Amendment to the Second Restatement of the Consolidated Tape Association Plan and the Tenth Substantive Amendment to the Restated Consolidated Quotation Plan (Release No. 34-58838; File No.
SR-CTA/CQ-2008-04; October 23, 2008)
http://www.sec.gov/rules/sro/nms/2008/34-58838.pdf

NYSE: Notice of Filing of Amendment Nos. 2 and 3 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3, to Create a New NYSE Market Model, with Certain Components to Operate as a One-Year Pilot, That Would Alter NYSE’s Priority and Parity Rules, Phase Out Specialists by Creating a Designated Market Maker, and Provide Market Participants with Additional Abilities to Post Hidden Liquidity (Release No. 34-58845; File No. SR-NYSE-2008-46; October 24, 2008)
http://www.sec.gov/rules/sro/nms/2008/34-58838.pdf

Short selling relief for convertible securities expanded
We have expanded our existing relief from the covered short selling ban for people who hold a convertible security (eg a convertible bond) to hedge their exposure to the underlying share.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-44%20Short%20selling%20
relief%20for%20convertible%20securities%20expanded?opendocument

Western Virginia Man Found Guilty of 37 Counts Related to Defrauding Commodity Pool Investors out of Millions
http://www.cftc.gov/newsroom/enforcementpressreleases/2008/pr5567-08.html

California Resident Jinsup Choi Ordered to Pay More than $10 Million in Restitution and a $1 Million Monetary Penalty for Defrauding Investors in a “Ponzi” Scheme Involving Commodity Futures Contracts
http://www.cftc.gov/newsroom/enforcementpressreleases/2008/pr5568-08.html

DFSA Licenses Swiss Life Private Placement (Middle East) Limited as an Authorised Firm
http://www.complinet.com/dfsa/display/display_main.html?rbid=1547&element_id
=13263

Mary Schapiro Remarks From the FINRA Fall Securities Conference—10/23/08
http://www.finra.org/Newsroom/Speeches/Schapiro/P117297

FINRA Announces Agreements in Principle with Three Additional Firms to Settle Auction Rate Securities Violations—10/23/08
http://www.finra.org/Newsroom/NewsReleases/2008/P117292

FSA Deputy Commissioner for International Affairs is elected to the position of Vice Chairman of the IAIS Executive Committee
http://www.fsa.go.jp/en/news/2008/20081020.html

NFA permanently bars Pompano Beach, Florida firm, The Miller Group and its principal
http://www.nfa.futures.org/news/newsRel.asp?ArticleID=2197

Treasury begins to deploy financial rescue plan
WASHINGTON – The government will begin doling out $125 billion to nine major banks this week as part of its effort to contain a growing financial crisis, a top Treasury official said Monday.
http://news.yahoo.com/s/ap/20081027/ap_on_bi_ge/treasury_meltdown;_ylt=AqHkq
QQJQHh2gy6__68IgcWyBhIF

Investments – Indexes – Managed Futures – Managed Funds

Ex-NYSE president says rebound could take years Johnston says all suffer when stock market goes down
http://www.bizjournals.com/birmingham/stories/2008/10/27/story7.html?ana=fro
m_rss

Citadel hedge fund will survive turmoil, bullish Griffin tells analysts
By Stephen Foley
Ken Griffin, the ambitious Chicago-based hedge fund manager, assembled Wall Street analysts on a conference call yesterday to insist that his Citadel Investment Group remained solvent after weeks of rumours about spiralling losses. More than 700 investors, analysts and other market players who have been nervously watching developments in the hedge fund industry swamped phone lines to hear Mr Griffin and his lieutenants declare this was a period of unprecedented panic and that the banking system would be different forever – but that Citadel was hunkering down and able to survive the turmoil.
http://www.independent.co.uk/news/business/news/citadel-hedge-fund-will-surv
ive-turmoil-bullish-griffin-tells-analysts-972982.html

Jayhawk Capital Management liquidates U.S. hedge fund
Jayhawk Capital Management liquidated its U.S.-focused hedge fund, Jayhawk Institutional Partners, and returned the capital to investors.
http://www.bizjournals.com/kansascity/stories/2008/10/20/daily29.html?ana=fr
om_rss

Hedge Fund Firm Led by Biden Son Wins Suit Dismissal (Update1)
By Andrew Harris Oct. 23 (Bloomberg) — Paradigm Global Advisors, the hedge fund firm run by R. Hunter Biden, won dismissal of a New Jersey lawsuit brought by a fired executive seeking almost $920,000 in pay and expenses. U.S. District Judge Garrett E. Brown Jr. in Trenton threw out the suit filed in June by the firm’s one-time president, Charles Provini of Red Bank, New Jersey, saying it was unclear whether the court had jurisdiction over Paradigm.
http://www.bloomberg.com/apps/news?pid=20601127&sid=aFF.DPwM5u7k

LAMPERT’S A HUGE LOSER: $30M/HOUR
RICHARD WILNER
Even for a billionaire hedge-fund titan, losing $30 million an hour has got to be a bummer. That’s what Eddie Lampert, the chairman of Sears Holdings, has experienced with just his nine largest holdings since Sept. 19 – over just 26 trading days.
http://www.nypost.com/seven/10262008/business/lamperts_a_huge_loser__30m_hou
r_135402.htm

Hedge Fund Industry’s Role in Wall St. Crisis
By Nancy Trejos
Hedge funds seemed unstoppable during the boom years, lavishing riches upon their investors and managers alike. Now that those riches are quickly disappearing, some analysts are blaming them for propagating the high-risk culture that led to the crisis on Wall Street. We try to shed some light on the hedge fund industry.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/24/AR2008102403
485.html?sub=AR

Desjardins Weeds Out Hedge Fund-Linked Products
Desjardins Group, Canada’s largest financial cooperative, is shutting down lines of hedge fund-linked products as it joins insurers such as Manulife Financial and Sun Life Financial in dealing with problems in guaranteed investments that have been hammered by the current market crisis.
http://dealbook.blogs.nytimes.com/2008/10/27/desjardins-weeds-out-hedge-fund
-linked-products/

$OMEBODY PLEASE HELP!
PROFESSIONALS WEIGH IN WITH ADVICE ON KEY TOPICS By GREGORY BRESIGER With stocks crashing about 40 percent this year, investors have seen their retirement and investment portfolios lose years of hard-fought gains – dropping, in some circumstances, to levels they were…
http://www.nypost.com/seven/10262008/business/omebody_please_help__135399.ht
m

Facing up to the failure of long/short funds
By Suchita Nayar
A lot will be said about 2008 as it lumbers on painfully in its final quarterly stretch home. By any measure, it has been an excruciating year for hedge fund managers, leaving many wondering where the industry goes from here. Many hedge funds have failed to do what they were supposed to:
preserve capital and provide absolute returns, says James Rutherford, founder and investment chief of London-based Sourcecap International, an investment firm running hedge funds and long-only funds seeking absolute returns.
http://www.ft.com/cms/s/3ff22fc6-a21a-11dd-a32f-000077b07658,Authorised=fals
e.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F3ff22fc6-a21a-11d
d-a32f-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Citadel officials quell rumors, CEO ‘enthusiastic’ about market opportunities
http://www.chicagobusiness.com/cgi-bin/news.pl?id=31551

Spread betting boom as Britons gamble on turbulent markets
LONDON, (AFP) – The credit crunch has sparked a surge in spread betting in Britain, as people speculate tax-free on the financial markets rather than sink their capital into turbulent stocks.
http://news.yahoo.com/s/afp/20081026/bs_afp/financeeconomybritaingaminggambl
ing_081026050223;_ylt=AlBkhb1u2PuR5haqTDvUWCGmOrgF

HSBC dives more than 10 percent in stock sell-off
HONG KONG (Reuters) – Shares in blue-chip heavyweight HSBC (0005.HK) plunged more than 10 percent to a six-year low on Monday, joining a global equities sell-off on fears of the impact of a global recession on corporate profits.
http://news.yahoo.com/s/nm/20081027/bs_nm/us_hsbc_stock;_ylt=Av_OQrCnUi.mxJP
194ep4sG573QA

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCal
endar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News

Market swings expose Chinese offshore derivatives trades
By Jamil Anderlini in Beijing and Justine Lau in Hong Kong
Large fluctuations in global commodity and currency markets have exposed a string of offshore derivatives trades made by large Chinese companies, prompting the government to issue a warning to speculators. China has been largely insulated from the direct effects of the global financial crisis because of its tight cross-border capital controls, but last week a procession of state-owned companies with offshore operations reported large losses from bad currency and commodity bets
http://www.ft.com/cms/s/f60740aa-a3c6-11dd-942c-000077b07658,Authorised=fals
e.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff60740aa-a3c6-11d
d-942c-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

G-7 countries worried about Japanese currency
WASHINGTON – The world’s leading industrial countries are worried about the recent sharp rise in the value of the Japanese currency.
http://news.yahoo.com/s/ap/20081027/ap_on_bi_ge/g7_currencies;_ylt=AtiUdmlUB
5UxEVcs3N9aE9du24cA

Edited by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Zhengzhou Commodity Exchange To Change Margins For White Sugar Futures Contracts
Zhengzhou Commodity Exchange today announced margin changes for all of the white sugar futures contracts from 6% to 7%, effective at the close of business on 27th October, 2008.
http://english.czce.com.cn/News.aspx?newspath=news/20081024154726.html

Investor account tax scrapped
The central government announced yesterday that tax would be temporarily scrapped on the interest income from securities accounts of individual investors.
http://english.peopledaily.com.cn/90001/90776/90884/6521642.html

Stocks dive 6.3% to 25-month closing low
China’s main stock index tumbled 6.32 percent on Monday to a 25-month closing low as worries about faltering corporate profits mounted during the peak week of the third-quarter earnings reporting season.
http://www.chinadaily.com.cn/bizchina/2008-10/27/content_7146066.htm

Shenzhen Stock Exchange Signs MOU With Istanbul Stock Exchange
http://www.mondovisione.com/index.cfm?section=news&action=detail&id=78365

Macao to follow Hong Kong’s solution to Lehman minibonds disputes
The Secretary for economy and finance of Macao Special Administration Region
(SAR) Tam Pak Yuen said over the weekend that local distributors of the minibonds tied to the collapsed investment bank Lehman Brothers should “follow the buyback measures taken by their Hong Kong parent companies.
http://english.people.com.cn/90001/90776/90884/6521973.html

Unusual Price and Trading Volume Movements
http://www.hkex.com.hk/news/hkexnews/0810272news.pdf

Noteworthy Market Statistics on 27 October 2008
http://www.hkex.com.hk/news/hkexnews/081027news.htm

Compensation for CITIC investors unlikely: Academics
Eric Chung, a 63-year-old retiree, and his 28-year-old son always wanted to make some money from the stock market. They believed investing in blue chip enterprises was a sound decision that could generate stable income. But recently they lost a lot of money investing in Citic Pacific. They said they made the investment decision based on insufficient information.
http://www.chinadaily.com.cn/hkedition/2008-10/25/content_7140198.htm

Frontier Markets

Financial Storm Hits Gulf
Speculative Currency Trades Plunge Kuwait Into Bank Bailout ABU DHABI — The global financial storm rolled across the Persian Gulf on Sunday, as Kuwait’s central bank guaranteed bank deposits and cobbled together a hasty bailout for one of the country’s largest banks.
http://online.wsj.com/article/SB122501263428669773.html

Edited by Robert Luke, robertluke@johnlothian.com

EMERGING MARKETS – FINANCIAL FALLOUT
Into the storm
How the emerging world copes with the tempest will affect the world economy and politics for a long time The Economist FOR much of the past year the fast-growing economies of the emerging world watched the Western financial hurricane from afar. Their own banks held few of the mortgage-based assets that undid the rich world’s financial firms.
http://www.economist.com/opinion/displaystory.cfm?story_id=12471135
*RL – Story later notes: “This credit crunch will be grim, but most emerging markets can avoid catastrophe. The biggest ones are in relatively good shape. The more vulnerable ones can (and should) be helped.”

IMF Wants Credit Line for Emerging Economies International Herald Tribune
The International Monetary Fund is working to arrange a huge credit line that would allow emerging-market countries desperate for foreign capital to borrow dollars, according to several officials. The IMF is already in negotiations with several countries to provide emergency loans, but the list of countries under threat is growing by the day, and now includes developing stalwarts like Brazil, South Africa and Turkey.
http://www.istockanalyst.com/article/viewiStockNews+articleid_2738877.html

EMERGING MARKETS – ALTERNATIVE ASSETS
Emerging Nations to Save Art Market From Slump, Christie’s Says Bloomberg Christie’s International has assembled $350 million of art in Abu Dhabi, combining highlights from its Oct. 30 auction in nearby Dubai with a Rothko, a Bacon and two Monet works as it seeks to woo emerging-market buyers.
Christie’s is betting that cash from emerging markets in the Middle East, Asia and Russia will stop the biggest financial crisis since the Great Depression from triggering a similar slump in the art market.
http://www.bloomberg.com/apps/news?pid=20601088&sid=aB6F0nHq58AQ&refer=muse

EMERGING MARKETS – BONDS OUTLOOK
Emerging market bonds – a safe place to be?
Financial Times
Are emerging markets a safe haven in the current crisis? To judge by emerging market share prices, investors should flee and not come back for a good, long while. The MSCI Emerging Markets index has fallen by well over 50 per cent since the start of the year, compared with about 35 per cent for the Dow Jones Industrial Average.
http://www.ft.com/cms/s/0/3a7854a8-a21a-11dd-a32f-000077b07658.html

EMERGING MARKETS – CURRENCIES OUTLOOK
Opportunities for Currency Investors Amid Market Turmoil Seeking Alpha Investors in currencies are confronted with some uncomfortable realities.
Currency prices do not respond to the same events that drive equity and bond prices, so the investor must look for different signals. World demand for a specific currency is influenced by an uncountable number of factors, and no academic study has ever pinpointed a single variable that is a reliable predictor of future currency prices.
http://seekingalpha.com/article/102030-opportunities-for-currency-investors-
amid-market-turmoil

Miscellaneous News

SARAH REMEMBERS HER FRIENDS
WHEN ever-loyal Sarah Ferguson heard Denise Rich was honoring Cantor Fitzgerald CEO Howard Lutnick at her cancer research fund-raiser, the former Duchess of York jetted over from London. It seems Lutnick and his wife, Allison, once gave office space to the frisky redhead when her marriage to Prince Andrew went bad, helping her back on her feet. Lutnick has raised $180 million for survivors of Cantor employers killed on 9/11.
http://www.nypost.com/seven/10242008/gossip/pagesix/sarah_remembers_her_frie
nds_134989.htm

WSJ to Warren Buffett: “Time to Get a New Crystal Ball”
http://www.msnbc.msn.com/id/27400058/

Forbes Magazine Turns to Its Boss for Calm
By STEPHANIE CLIFFORD
Steve Forbes makes an appearance on the cover of the free-market proponent to reassure readers about the economic upheaval.
http://www.nytimes.com/2008/10/27/business/media/27mag.html?ref=business

Observations – Statistics – Commentary

The Bet That Blew Up Wall Street
Steve Kroft examines the complicated financial instruments known as credit default swaps and the central role they are playing in the unfolding economic crisis.
http://www.cbsnews.com/stories/2008/10/26/60minutes/main4546199.shtml

*** 60 Minutes on CBS television takes a hard look at credit derivatives. Worth watching if you missed it last night.

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Amid downturn, Wall Streeters leaving NYC for smaller firms in other states, overseas
ALBANY, N.Y. (AP) _ Bankers and brokers looking to escape the financial meltdown are scrambling to relocate their families, possessions and rarified talent far from Wall Street to places such as Florida, Chicago, Milwaukee, Virginia and Asia. Travis Lacey left investment bank Jeffries & Co. and Wall Street behind in September to work for Baird in Chicago. He also left behind the nagging sense of worry that had plagued him since his company had started announcing layoffs earlier in the year. “Anyone in that environment, you never know what’s going to happen,” Lacey said. “There are a lot of good bankers that unfortunately are at the wrong place at the wrong time, especially in New York.”
http://www.chicagotribune.com/business/sns-ap-wall-street-exodus,0,979956.st
ory

From Friday: Looking for a Job on Wall Street?
On CNBC a moment ago, a great quip from Morgan Stanley’s irrepressible David
Darst:

“We tell the young people who are looking for a job on Wall Street now; it’s either Shanghai, Mumbai, Dubai, or goodbye.”
http://thefloat.typepad.com/the_float/2008/10/looking-for-a-job-on-wall-stre
et.html

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Lucrative deal in works of CME
BY DAVID ROEDER
Financial regulation in Washington is a jumble, as Congress and the bureaucrats kick around ideas for putting freewheeling credit default swaps under somebody’s control. CME Group (CME), owner of the Chicago Mercantile Exchange and the Chicago Board of Trade, has center stage in the negotiations and is liable to benefit hugely from regulatory change.
http://www.suntimes.com/business/roeder/1243213,curious-102608.article

**** Some risk should be managed. Some risks should be eliminated. Credit Default Swaps will fall in that category.

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Man On A Mission
The oil and gas maven is on a mission to lessen America’s dependence on foreign oil. Charlie Rose reports.
http://www.cbsnews.com/video/watch/?id=4546585n

**** Good profile of T-Boone Pickens on 60 Minutes.

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Net Capital Requirements for Forex Dealer Members
On October 22, 2008, the Commodity Futures Trading Commission approved increases to NFA’s capital requirements for Forex Dealer Members (FDMs). As stated in a July 23, 2008 Notice to Members, the minimum requirement will be $10 million as of October 31, 2008, $15 million as of January 17, 2009, and $20 million as of May 16, 2009.
http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2198

****

DGCX strengthens Indian Rupee Future Contract • New cash settlement mechanism in US Dollars • Monthly contract expiries for 12 months forward • New last trading day and extended trading hours
Dubai, October 27, 2008: Dubai Gold & Commodities Exchange (DGCX) today announced changes to its Indian Rupee futures contract. The revised Indian Rupee futures contract will be available for trading from November 3, and will provide cash settlement in US Dollars, facilitating the settlement process for both local and international market participants. More contracts will be available on a monthly basis out to twelve months forward and trading hours will be extended to 08.30 to 23:30 (Dubai time; GMT +4).
In addition, the last trading day will be two business days prior to the last business day of the contract month.
http://www.dgcx.ae/AboutUs.aspx

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Haunted Hike
Saturday night we took the Cub Scout Pack on a haunted hike the Boy Scouts put on. Despite the gore, blood, screaming zombies and guys with chain saws; the markets the last 6 weeks are still scarier.

My favorite part of the haunted hike was the cabin with the maze inside and all the walls painted black. They tell you whatever you do, “don’t turn left,” and of course the first turn is left.

The boys were so much braver when the hike was all done.

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Lead Stories

LSE hunts for new chief
By Jeremy Grant
The London Stock Exchange has hired a City headhunter to find a replacement for its chief executive, Dame Clara Furse, signalling the beginning of the end of her long tenure at the exchange.
http://www.ft.com/cms/s/0/c6726c8a-a357-11dd-942c-000077b07658.html

LSE seeking Furse successor
SUCCESSION planning has already begun at the London Stock Exchange (LSE) to find a replacement for Dame Clara Furse, the company’s chief executive. The LSE yesterday confirmed its board was looking for a successor to Furse, but that her departure was not imminent. The LSE added: “Clara remains fully committed to the exchange’s continued success and, in particular, to the completion of its integration with Borsa Italiana.”
http://business.scotsman.com/business/LSE–seeking–Furse.4630961.jp

LSE Said to Hire Recruiting Company to Find Successor for CEO
By Nandini Sukumar
Oct. 26 (Bloomberg) — London Stock Exchange Group Plc, which operates Europe’s oldest independent bourse, has hired a recruiting firm to find a successor to Chief Executive Officer Clara Furse, according to a person familiar with the matter. Furse, 51, will likely remain the company’s CEO until the end of 2009 to oversee the exchange’s purchase of Borsa Italiana SpA, said the person, who declined to be identified.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aIfdZa91sijA

Evil Wall Street Exports Boomed With `Fools’ Born to Buy Debt
By Mark Pittman
(Bloomberg) — Tom Bosh lowered the telephone receiver into its cradle, making a decision on the way down. “We’re not buying any more,” he told his traders at Bank of New York Co. “Nothing.” It was May 2007, and Bosh, who managed $25 billion from the bank’s 13th-floor trading room above Times Square, had just hung up on Ralph Cioffi at Bear Stearns Cos. a dozen blocks away. Bosh had invested $50 million in notes from an issuer Cioffi controlled, and he was ready to pull the plug. “I had a bad feeling,”
Bosh, 45, recalled. “Cioffi was just bulldogging everyone. He was saying, `These assets are good, the collateral is paying down, and I know more than you.’ That type of attitude.”
http://www.bloomberg.com/apps/news?pid=20601109&sid=a0jln3.CSS6c

SEC Brings Second-Highest Number of Enforcement Actions in Its History
The U.S. Securities and Exchange Commission brought 671 enforcement actions in fiscal year 2008, the second-highest total in the agency’s history. The SEC also repeated last year’s total of distributing more than $1 billion to investors harmed by others’ actions during fiscal 2008, which ended on Sept.
30.
http://biz.yahoo.com/law/081027/e37174d6b25e766abb8051a9fc54607a.html?.v=1

Citadel Projects Calm; Call to Merge the Regulators
Citadel, the hedge fund in Chicago run by the wunderkind Kenneth C. Griffin, has found just how hard it is to calm investors during these troubled times.
http://www.nytimes.com/2008/10/27/business/27views_ready.html

US hedge fund admits 35% plunge in value since downturn
One of the world’s biggest hedge fund managers, Citadel, told clients last night that two of its main funds have lost 35% of their value this year after rumours swept the market about its financial position. The Chicago-based firm, which has $20bn (£12.5bn) of funds under management, blamed “panic” and “dislocation” on global exchanges for its predicament.
http://www.guardian.co.uk/business/2008/oct/25/hedge-fund-market-turmoil-cit
adel

Cramer: A Vulnerable Citadel
http://www.thestreet.com/story/10444377/1/cramer-a-vulnerable-citadel.html

CITADEL TURMOIL
HURDLES MOUNTING ON GRIFFIN’S BIG PLANS FOR FIRM Efforts by Citadel Investment Group’s Ken Griffin to morph his highflying hedge fund into a financial titan appear to be running into stiff headwinds.
http://www.nypost.com/seven/10272008/business/citadel_turmoil_135466.htm

Hedge Fund Withdrawals Stress Market; Citadel Reassures Clients
By Saijel Kishan and Katherine Burton Oct. 25 (Bloomberg) — Hedge funds are aggravating the worst market selloff in 50 years as they dump assets to meet investor redemptions and keep lenders at bay. U.S. hedge-fund managers may lose 15 percent of assets to withdrawals by year-end while their European rivals shed as much as 25 percent, Huw van Steenis, a Morgan Stanley analyst in London, wrote yesterday in a report to clients. Combined with investment losses, industry assets may shrink to $1.3 trillion, a 32 percent drop from the peak in June.
http://www.bloomberg.com/apps/news?pid=20601170&sid=a8.xpaCUzHSI

Hedge funds face pressure from brokers
By Chris Hughes and Kate Burgess in London
The survival of a raft of hedge funds is being threatened by fresh pressure to stump up more collateral for trades made in a range of illiquid assets. So-called prime brokers, who provide a range of services to hedge funds, are imposing tougher conditions on their clients and charging more for financing following the collapse of Lehman Brothers in mid-September, raising fears that more funds face collapse.
http://www.ft.com/cms/s/0/7b63fa12-a22e-11dd-a32f-000077b07658.html?nclick_c
heck=1

‘Panic’ in U.S. Futures Rattles Investors Worldwide
Oct. 27 (Bloomberg) — U.S. stock-index futures are becoming less reliable as predictors of market moves. With equity investors around the world contending with the worst drop since the Great Depression, futures on the Standard & Poor’s 500 Index misstated gains or losses by an average 1.4 percentage point in October, twice the gap in the third quarter, data compiled by Bloomberg show. One of the biggest misses was Oct. 24, when futures fell as much as 60 points, while the index itself dropped 37 points in the first half hour of trading, before closing down 31.
http://www.bloomberg.com/apps/news?pid=20601213&sid=aPjqFQVftPqo&refer=home

Why imperfect hedging makes sense
By Lionel Martellini
A recent surge in worldwide inflation has increased the need for investors to hedge against unexpected changes in prices. In this context, novel forms of institutional investment solutions have been promoted by asset managers and investment banks. They have focused on designing customised liability-matching portfolios, to hedge away the impact of unexpected changes in risk factors that affect liability values, most notably inflation risk.
http://www.ft.com/cms/s/0/45482ed0-a21a-11dd-a32f-000077b07658.html

JSE, Spurned for a Decade, Bids to Buy Bond Exchange
By Vernon Wessels and Garth Theunissen Oct. 27 (Bloomberg) — JSE Ltd. offered 173.2 million rand ($15.4 million) for the Bond Exchange of South Africa Ltd. in a bid to combine Africa’s biggest stock and bond markets, after its approaches to the debt bourse were spurned for a decade.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aFdaXyfyK5ks

World markets slump as Nikkei hits 26-year low
LONDON – European stock markets fell heavily Monday after the Nikkei index in Japan closed at its lowest in 26 years as the financial crisis raised recession fears and drove up the yen, piling the pressure on the country’s exporters.
http://news.yahoo.com/s/ap/20081027/ap_on_bi_ge/world_markets;_ylt=Al7TmF9Qg
4EOsdi.Mk9VwyKyBhIF

Environmental Trading News

Betting on climate change
Investor Daily: Businesses that work to offset global warming could be safer bets in a recession.
http://money.cnn.com/2008/10/24/magazines/fortune/copeland_climatechange.for
tune/index.htm?section=money_latest

Blue Skies for Green Trading
New options in climate-sensitive plays.
THE CLOUDY SPECTER OF CLIMATE change is lined with green: growing acceptance of environmental challenges is making commodity-linked “cleantech” investing a hot spot — and long-view investors might want to pay heed. According to HSBC’s assessment, annual revenue for the 390 companies in the climate-change sector have already reached $300 billion. Still loosely defined, cleantech revolves around carbon-management and conservation themes. Some cleantech segments, like plant-based biofuels, are already familiar to commodity investors. But in November, the nearly four-year-old Chicago Climate Futures Exchange will offer futures and options contracts based on the Dow Jones Sustainability World and Sustainability North America indexes. “The climate-change challenge isn’t going away,” says Jack Robinson, president and founder of Winslow Management, which runs a pair of green mutual funds.
http://online.barrons.com/article/SB122488818586468317.html?mod=googlenews_b
arrons

Climate Exchange to boost emission trading
A month after two environment and energy exchanges opened virtually simultaneously in Beijing and Shanghai in August, an environmental trading platform was established in Tianjin municipality, one of most vigorously developing cities in China. The newly unveiled Tianjin Climate Exchange
(TCX) is a joint venture of US-based Chicago Climate Exchange (CCX), China National Petroleum Corporation Assets Management Co Ltd (CNPCAM) along with Tianjin Property Rights Exchange (TPRE).
http://www.chinadaily.com.cn/bizchina/2008-10/27/content_7144537.htm

CCX featured on CNN.Money
http://money.cnn.com/video/?/video/news/2008/10/23/news.corneroffice.ccx

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf. Click here to subscribe:
jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

Bats Exchange promotes Tami Schademann to chief regulatory officer
Bats Holdings, an innovative global financial markets technology company, announces the promotion of Tami Schademann to chief regulatory officer of Bats Exchange, while also naming her senior vice president.
http://tinyurl.com/57d2lt

Corporate executives raise funds for charity at SGX Bull Charge
SINGAPORE : Executives from Singapore’s corporate sector traded in their suits for shorts at the Singapore Exchange (SGX) Bull Charge run on Friday afternoon. The event, which aims to promote corporate social responsibility, raised over S$12 million for a record 19 charities. And for the first time, an overseas charity was also a beneficiary.
http://ph.news.yahoo.com/cna/20081025/tap-213-corporate-sector-execs-raise-f
un-231650b.html

Minneapolis Grain Exchange going electronic
The days of shouted trades on the floor of the Minneapolis Grain Exchange will end in December when the exchange converts to an all-electronic-trading format. The exchange, which opened in the 1880s, announced the change Friday.
http://www.bizjournals.com/twincities/stories/2008/10/20/daily49.html?ana=fr
om_rss

Minneapolis Grain Exchange to move to electronic trading
The Minneapolis Grain Exchange announced Friday that it will move to electronic trading exclusively Dec. 19, eliminating its trading floor and “open outcry” trading of grain futures and options. The exchange noted a dramatic shift toward electronic trading in the past year. Officials with the Kansas City Board of Trade were unavailable for comment Friday but in a statement said: “We have no intention at this time of closing our trading floor. About one-third of our daily trading volume is still conducted on the trading floor. “We believe that maintaining both venues provides our market participants with choice of access to satisfy their risk management needs.”
http://www.kansascity.com/business/story/857473.html

Bourse temporarily halts trading to calm investors
MANILA, Philippines – For the first time in its 81-year existence, the Philippine Stock Exchange (PSE) temporarily halted trading in a bid to calm the frantic sell-off in local shares, which sent the main index falling by more than a tenth of its value.
http://www.gmanews.tv/story/129593/Bourse-temporarily-halts-trading-to-calm-
investors

NYSE’s new rules to eliminate specialists’ “look”
By Jonathan Spicer
NEW YORK, Oct 24 (Reuters) – The New York Stock Exchange, often criticized for its slow transition to automated markets, said on Friday securities regulators had approved plans that will stop trading floor specialists from seeing orders before the public.
http://www.reuters.com/article/marketsNews/idINN2452708120081024?rpc=44

NASDAQ OMX Group Hosts Its First Middle East Investor Conference In Dubai To Provide Issuers With Access To Gulf Investors – Exchange Will Ring NASDAQ Opening Bell From Dubai On November 20
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8367

Brown-Forman Corporation – Cl. B (”BF/B /BFB1C”)
5-for-4 Stock Split
Ex-Distribution Date: October 28, 2008
http://www.onechicago.com/?p=1212

21 Claymore ETFs Begin Trading on NYSE Arca
http://www.nyse.com/press/1224844298182.html

Performance Bond Requirement Changes – Effective – Thursday, October 27, 2008
http://www.cme.com/clearing/rmspan/pbadv/Chadv08-291.html

Additional Contract Months Listed for Soybeans Futures-Effective Monday, November 3, 2008
http://www.cme.com/clearing/clr/clradv/Chadv08293.html

CME Group Delivery Dates for November 2008
http://www.cme.com/clearing/clr/clradv/Chadv08292.html

New Daily Volume Record on ECX
http://www.europeanclimateexchange.com/content.asp?id=6&sid=RecVol23OCT

BASF: Further Information on the Takeover Offer to the Shareholders of Ciba Holding AG
http://www.eurexchange.com/download/documents/circulars/cf2592008e.pdf

Exchange Transition Information
Information on the BATS transition from ECN to Exchange and how it will affect you.
http://www.batstrading.com/exchange/

NASDAQ OMX Announces Third Quarter 2008 New Listings Statistics
http://www.nasdaq.com/newsroom/news/newsroomnewsStory.aspx?textpath=pr2008\A
CQPMZ200810270300PRIMZONEFULLFEED152998.htm&cdtime=10%2f27%2f2008%20+3%3a00A
M&title=NASDAQ%20OMX%20Announces%20Third%20Quarter%202008%20New%20Listings%2
0Statistics

Close-Out Requirement for Market Makers Under Temporary Rule 204T of Regulation SHO (REVISED)
http://www.cboe.org/publish/RegCir/RG08-138.pdf

Brokers & Dark Pools

Deutsche Bank Derivatives-Trading Loss Said to Top $400 Million
Oct. 27 (Bloomberg) — Deutsche Bank AG, Germany’s biggest bank, lost more than $400 million on equity derivatives trades as stock markets headed for their biggest rout since the 1930s, two people with direct knowledge of the matter said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=agaXIo6ul0OU

Instinet Starts CSA Program in Canada
October 27, 2008 – Instinet has made BrokerShare, its commission sharing arrangement program, available through its Canadian subsidiary.
http://www.securitiesindustry.com/news/22908-1.html

Picking through Lehman’s remains
By Anousha Sakoui
What is surprising about walking into 25 Bank Street, until recently Lehman Brothers’ London headquarters, is that it does not feel very different to when the bank was still thriving.
http://www.ft.com/cms/s/0/c680c66c-a3c6-11dd-942c-000077b07658.html

Fed takes $2.7bn paper loss on Bear
By Francesco Guerrera in New York
The Federal Reserve on Thursday said it had suffered a $2.7bn paper loss on the $29bn portfolio of toxic assets it took over from Bear Stearns in March as part of JPMorgan Chase’s government-brokered takeover of the stricken investment bank. News of the unrealised losses, revealed in a filing that also showed that American Insurance Group has already used up three-quarters of a $123bn Fed loan, could fuel the political and public backlash over the use of government funds to rescue financial institutions.
http://www.ft.com/cms/s/0/bc104618-a163-11dd-82fd-000077b07658.html

Nomura’s Lehman Acquisition May Lead to Historic Loss
By Takahiko Hyuga and Shingo Kawamoto Oct. 27 (Bloomberg) — The acquisition that Nomura Holdings Inc. Chief Executive Officer Kenichi Watanabe called a “once in a generation opportunity” may lead to another historic event at Asia’s biggest securities firm: its largest annual loss.
http://www.bloomberg.com/apps/news?pid=20601101&sid=a6eZiiGvHrAY&refer=japan

Goldman chief sought Citi tie-up talks
Merger suggestion ahead of government bail-out
http://www.ft.com/cms/s/0/15d9f6ac-a39f-11dd-942c-000077b07658.html

Lehman’s European Operations Hit by Delays from Other Banks
The disentangling of Lehman Brothers‘ European operations is taking longer than hoped thanks to slow cooperation from other banks, The Financial Times reported, citing lead administrator Tony Lomas.
http://dealbook.blogs.nytimes.com/2008/10/27/lehmans-european-operations-hit
-by-delays-from-other-banks/

Lehman Brothers bosses blew £10million on luxuries before bank collapsed
Fat cat bosses at Lehman Brothers blew £10million on lavish meals and first class travel just a month before their bank collapsed. Executives around the world ran up the massive bills on their exclusive corporate American Express cards. Now the debts are unlikely to be paid and Amex staff fear the losses may lead to job cuts.
http://www.mirror.co.uk/news/top-stories/2008/10/26/lehman-brothers-bosses-b
lew-10million-on-luxuries-before-bank-collapsed-115875-20840920/

Lehman work ‘may take years’
Winding up Lehman Brothers’ operations in London is taking longer than expected, and may not be completed for many years, according to the man in charge of the investment bank’s administration.
http://www.thisislondon.co.uk/standard-business/article-23578100-details/Leh
man+work+’may+take+years’/article.do

Goldman called Citi for merger in September: source
LONDON (Reuters) – Goldman Sachs Chief Executive Lloyd Blankfein called Citigroup Inc head Vikram Pandit last month about a possible merger, but Pandit rejected the proposal, a source familiar with the matter said on Monday.
http://news.yahoo.com/s/nm/20081027/bs_nm/us_goldman_citi;_ylt=AidWS4PVtfxUd
YFqMtaZ_tu573QA

MUFG to raise $10.6 billion, Japan to take bank action
TOKYO (Reuters) – Mitsubishi UFJ Financial Group (8306.T), Japan’s biggest bank, said it would raise up to $10.6 billion to replenish a capital base depleted by a plunging stock market and its investment in Morgan Stanley .
http://news.yahoo.com/s/nm/20081027/bs_nm/us_financial_japan;_ylt=AmX9RLsu4o
.dcjkegHaz4Oi573QA

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig102408.htm

FBI Probe of JPMorgan Fees Focuses on Swaps Roiling Muni Debt
Oct. 27 (Bloomberg) — Joseph Ambrosini says the deal looked so easy.
JPMorgan Chase & Co. bankers told him there was really no risk. All he had to do was sign a public financing contract, and the bank would give $280,000 to his school district in New Castle, Pennsylvania. “They basically said, unless the world goes under the sea, we’d be in good shape,” says Ambrosini, the district’s business manager.
http://www.bloomberg.com/apps/news?pid=20601014&sid=aIL9gsK5wG40

Defense Lawyers See Bonanza From Lehman, Bear, Other Collapses
by Patricia Hurtado, David Voreacos and Lindsay Fortado
Oct. 27 (Bloomberg) — Defense lawyers are bullish on Wall Street. A rising number of defendants and suspects in government probes of collapsed financial firms may yield the biggest fee bonanza for the defense bar since the days of Enron Corp. and WorldCom Inc. The largest cases can generate millions in revenue. Former Enron Chief Executive Officer Jeffrey Skilling alone paid $23 million in legal fees even before he went on trial for fraud and was convicted.
http://www.bloomberg.com/apps/news?pid=20601109&sid=awuOjwqgyeN8

Swiss prosecutors probe UBS execs over subprime crisis – report
ZURICH, Switzerland – Swiss prosecutors are examining whether officials at UBS AG broke any laws by withholding information about the bank’s exposure to the subprime mortgage crisis, according to a newspaper report Sunday.
http://www.gmanews.tv/story/129536/Swiss-prosecutors-probe-UBS-execs-over-su
bprime-crisis—report

Ex-US Treasury head Rubin: no return to Washington
http://www.reuters.com/article/politicsNews/idUSTRE49P2OQ20081027

Mark-to-market accounting isn’t going away: analyst
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49Q5A520081027

U.S. financial overhaul will take years: Fed official
http://www.reuters.com/article/GCA-CreditCrisis/idUSTRE49Q2NR20081027

Congress Weighs Forming Special Panel for Overhaul of Financial Regulations
WASHINGTON — Congressional leaders are considering whether to create a special bipartisan panel to draft legislation to overhaul financial-services regulations next year.
The hope is that a single committee, possibly comprising senior lawmakers from the House and Senate, could help cut through the turf wars that often come with industry overhauls. Having a separate group of staffers also could help relieve the pressure on existing financial-committee staffers, some of whom have had to put on the back burner less-pressing responsibilities in order to deal with the financial crisis.
http://online.wsj.com/article/SB122506476673970483.html?mod=googlenews_wsj

United Airlines spent $550,000 lobbying in 3Q
WASHINGTON – United Airlines spent $550,000 lobbying during the third quarter on energy issues, passenger rights legislation and more, according to a disclosure form filed this week. One bill United lobbied on would establish a cap-and-trade system aimed at reducing greenhouse gas emissions.
As major fuel users, airlines have opposed cap-and-trade, saying it would amount to a new tax on their fuel consumption. The company also lobbied on two Senate bills that would direct the Environmental Protection Agency to decrease greenhouse gas emissions, according to the disclosure form filed Monday. Oil prices have retreated from the summer high that at one time looked like it threatened the whole business model of airlines. United lobbied on bills aimed at stopping what the airlines have called energy speculation, as well as legislation to regulate over-the-counter trading of energy derivatives. It also lobbied on a bill that would give the Commodity Futures Trading Commission authority over off-exchange foreign currency transactions.
http://www.forbes.com/feeds/ap/2008/10/24/ap5601765.html

15 Additional Banks Plan to Seek U.S. Aid
The Treasury Department plans to provide funds for 20 to 22 lenders in the current round of a $250 billion bank recapitalization program.
http://www.nytimes.com/2008/10/28/business/economy/28assist.html?ref=busines
s

BCSC panel orders frauster to pay more than $440,000 in penalties
Former VCE officer diverted investors’s funds for personal gain http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=46613&Id
Section=8&cat=8

Exemptive Orders and Exemptive, Interpretive, and No-Action Letters BATS Exchange, Inc. (October 23, 2008)
http://www.sec.gov/divisions/marketreg/mr-noaction/2008/bats102308.pdf

NMS Plans: Notice of Filing and Immediate Effectiveness of the Fourteenth Substantive Amendment to the Second Restatement of the Consolidated Tape Association Plan and the Tenth Substantive Amendment to the Restated Consolidated Quotation Plan (Release No. 34-58838; File No.
SR-CTA/CQ-2008-04; October 23, 2008)
http://www.sec.gov/rules/sro/nms/2008/34-58838.pdf

NYSE: Notice of Filing of Amendment Nos. 2 and 3 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment Nos. 1, 2, and 3, to Create a New NYSE Market Model, with Certain Components to Operate as a One-Year Pilot, That Would Alter NYSE’s Priority and Parity Rules, Phase Out Specialists by Creating a Designated Market Maker, and Provide Market Participants with Additional Abilities to Post Hidden Liquidity (Release No. 34-58845; File No. SR-NYSE-2008-46; October 24, 2008)
http://www.sec.gov/rules/sro/nms/2008/34-58838.pdf

Short selling relief for convertible securities expanded
We have expanded our existing relief from the covered short selling ban for people who hold a convertible security (eg a convertible bond) to hedge their exposure to the underlying share.
http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/AD08-44%20Short%20selling%20
relief%20for%20convertible%20securities%20expanded?opendocument

Western Virginia Man Found Guilty of 37 Counts Related to Defrauding Commodity Pool
Investors out of Millions
http://www.cftc.gov/newsroom/enforcementpressreleases/2008/pr5567-08.html

California Resident Jinsup Choi Ordered to Pay More than $10 Million in Restitution and a $1 Million Monetary Penalty for Defrauding Investors in a “Ponzi” Scheme Involving Commodity Futures Contracts
http://www.cftc.gov/newsroom/enforcementpressreleases/2008/pr5568-08.html

DFSA Licenses Swiss Life Private Placement (Middle East) Limited as an Authorised Firm
http://www.complinet.com/dfsa/display/display_main.html?rbid=1547&element_id
=13263

Mary Schapiro Remarks From the FINRA Fall Securities Conference—10/23/08
http://www.finra.org/Newsroom/Speeches/Schapiro/P117297

FINRA Announces Agreements in Principle with Three Additional Firms to Settle Auction Rate Securities Violations—10/23/08
http://www.finra.org/Newsroom/NewsReleases/2008/P117292

FSA Deputy Commissioner for International Affairs is elected to the position of Vice Chairman of the IAIS Executive Committee
http://www.fsa.go.jp/en/news/2008/20081020.html

NFA permanently bars Pompano Beach, Florida firm, The Miller Group and its principal
http://www.nfa.futures.org/news/newsRel.asp?ArticleID=2197

Treasury begins to deploy financial rescue plan
WASHINGTON – The government will begin doling out $125 billion to nine major banks this week as part of its effort to contain a growing financial crisis, a top Treasury official said Monday.
http://news.yahoo.com/s/ap/20081027/ap_on_bi_ge/treasury_meltdown;_ylt=AqHkq
QQJQHh2gy6__68IgcWyBhIF

Investments – Indexes – Managed Futures – Managed Funds

Ex-NYSE president says rebound could take years Johnston says all suffer when stock market goes down
http://www.bizjournals.com/birmingham/stories/2008/10/27/story7.html?ana=fro
m_rss

Citadel hedge fund will survive turmoil, bullish Griffin tells analysts
By Stephen Foley
Ken Griffin, the ambitious Chicago-based hedge fund manager, assembled Wall Street analysts on a conference call yesterday to insist that his Citadel Investment Group remained solvent after weeks of rumours about spiralling losses. More than 700 investors, analysts and other market players who have been nervously watching developments in the hedge fund industry swamped phone lines to hear Mr Griffin and his lieutenants declare this was a period of unprecedented panic and that the banking system would be different forever – but that Citadel was hunkering down and able to survive the turmoil.
http://www.independent.co.uk/news/business/news/citadel-hedge-fund-will-surv
ive-turmoil-bullish-griffin-tells-analysts-972982.html

Jayhawk Capital Management liquidates U.S. hedge fund
Jayhawk Capital Management liquidated its U.S.-focused hedge fund, Jayhawk Institutional Partners, and returned the capital to investors.
http://www.bizjournals.com/kansascity/stories/2008/10/20/daily29.html?ana=fr
om_rss

Hedge Fund Firm Led by Biden Son Wins Suit Dismissal (Update1)
By Andrew Harris
Oct. 23 (Bloomberg) — Paradigm Global Advisors, the hedge fund firm run by R. Hunter Biden, won dismissal of a New Jersey lawsuit brought by a fired executive seeking almost $920,000 in pay and expenses. U.S. District Judge Garrett E. Brown Jr. in Trenton threw out the suit filed in June by the firm’s one-time president, Charles Provini of Red Bank, New Jersey, saying it was unclear whether the court had jurisdiction over Paradigm.
http://www.bloomberg.com/apps/news?pid=20601127&sid=aFF.DPwM5u7k

LAMPERT’S A HUGE LOSER: $30M/HOUR
RICHARD WILNER
Even for a billionaire hedge-fund titan, losing $30 million an hour has got to be a bummer. That’s what Eddie Lampert, the chairman of Sears Holdings, has experienced with just his nine largest holdings since Sept. 19 – over just 26 trading days.
http://www.nypost.com/seven/10262008/business/lamperts_a_huge_loser__30m_hou
r_135402.htm

Hedge Fund Industry’s Role in Wall St. Crisis
By Nancy Trejos
Hedge funds seemed unstoppable during the boom years, lavishing riches upon their investors and managers alike. Now that those riches are quickly disappearing, some analysts are blaming them for propagating the high-risk culture that led to the crisis on Wall Street. We try to shed some light on the hedge fund industry.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/24/AR2008102403
485.html?sub=AR

Desjardins Weeds Out Hedge Fund-Linked Products
Desjardins Group, Canada’s largest financial cooperative, is shutting down lines of hedge fund-linked products as it joins insurers such as Manulife Financial and Sun Life Financial in dealing with problems in guaranteed investments that have been hammered by the current market crisis.
http://dealbook.blogs.nytimes.com/2008/10/27/desjardins-weeds-out-hedge-fund
-linked-products/

$OMEBODY PLEASE HELP!
PROFESSIONALS WEIGH IN WITH ADVICE ON KEY TOPICS By GREGORY BRESIGER With stocks crashing about 40 percent this year, investors have seen their retirement and investment portfolios lose years of hard-fought gains – dropping, in some circumstances, to levels they were…
http://www.nypost.com/seven/10262008/business/omebody_please_help__135399.ht
m

Facing up to the failure of long/short funds
By Suchita Nayar
A lot will be said about 2008 as it lumbers on painfully in its final quarterly stretch home. By any measure, it has been an excruciating year for hedge fund managers, leaving many wondering where the industry goes from here. Many hedge funds have failed to do what they were supposed to:
preserve capital and provide absolute returns, says James Rutherford, founder and investment chief of London-based Sourcecap International, an investment firm running hedge funds and long-only funds seeking absolute returns.
http://www.ft.com/cms/s/3ff22fc6-a21a-11dd-a32f-000077b07658,Authorised=fals
e.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F3ff22fc6-a21a-11d
d-a32f-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Citadel officials quell rumors, CEO ‘enthusiastic’ about market opportunities
http://www.chicagobusiness.com/cgi-bin/news.pl?id=31551

Spread betting boom as Britons gamble on turbulent markets
LONDON, (AFP) – The credit crunch has sparked a surge in spread betting in Britain, as people speculate tax-free on the financial markets rather than sink their capital into turbulent stocks.
http://news.yahoo.com/s/afp/20081026/bs_afp/financeeconomybritaingaminggambl
ing_081026050223;_ylt=AlBkhb1u2PuR5haqTDvUWCGmOrgF

HSBC dives more than 10 percent in stock sell-off
HONG KONG (Reuters) – Shares in blue-chip heavyweight HSBC (0005.HK) plunged more than 10 percent to a six-year low on Monday, joining a global equities sell-off on fears of the impact of a global recession on corporate profits.
http://news.yahoo.com/s/nm/20081027/bs_nm/us_hsbc_stock;_ylt=Av_OQrCnUi.mxJP
194ep4sG573QA

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCal
endar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News

Market swings expose Chinese offshore derivatives trades
By Jamil Anderlini in Beijing and Justine Lau in Hong,Kong
Large fluctuations in global commodity and currency markets have exposed a string of offshore derivatives trades made by large Chinese companies, prompting the government to issue a warning to speculators. China has been largely insulated from the direct effects of the global financial crisis because of its tight cross-border capital controls, but last week a procession of state-owned companies with offshore operations reported large losses from bad currency and commodity bets
http://www.ft.com/cms/s/f60740aa-a3c6-11dd-942c-000077b07658,Authorised=fals
e.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Ff60740aa-a3c6-11d
d-942c-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

G-7 countries worried about Japanese currency
WASHINGTON – The world’s leading industrial countries are worried about the recent sharp rise in the value of the Japanese currency.
http://news.yahoo.com/s/ap/20081027/ap_on_bi_ge/g7_currencies;_ylt=AtiUdmlUB
5UxEVcs3N9aE9du24cA

Edited by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Zhengzhou Commodity Exchange To Change Margins For White Sugar Futures Contracts
Zhengzhou Commodity Exchange today announced margin changes for all of the white sugar futures contracts from 6% to 7%, effective at the close of business on 27th October, 2008.
http://english.czce.com.cn/News.aspx?newspath=news/20081024154726.html

Investor account tax scrapped
The central government announced yesterday that tax would be temporarily scrapped on the interest income from securities accounts of individual investors.
http://english.peopledaily.com.cn/90001/90776/90884/6521642.html

Stocks dive 6.3% to 25-month closing low
China’s main stock index tumbled 6.32 percent on Monday to a 25-month closing low as worries about faltering corporate profits mounted during the peak week of the third-quarter earnings reporting season.
http://www.chinadaily.com.cn/bizchina/2008-10/27/content_7146066.htm

Shenzhen Stock Exchange Signs MOU With Istanbul Stock Exchange
http://www.mondovisione.com/index.cfm?section=news&action=detail&id=78365

Macao to follow Hong Kong’s solution to Lehman minibonds disputes
The Secretary for economy and finance of Macao Special Administration Region
(SAR) Tam Pak Yuen said over the weekend that local distributors of the minibonds tied to the collapsed investment bank Lehman Brothers should “follow the buyback measures taken by their Hong Kong parent companies.
http://english.people.com.cn/90001/90776/90884/6521973.html

Unusual Price and Trading Volume Movements
http://www.hkex.com.hk/news/hkexnews/0810272news.pdf

Noteworthy Market Statistics on 27 October 2008
http://www.hkex.com.hk/news/hkexnews/081027news.htm

Compensation for CITIC investors unlikely: Academics
Eric Chung, a 63-year-old retiree, and his 28-year-old son always wanted to make some money from the stock market. They believed investing in blue chip enterprises was a sound decision that could generate stable income. But recently they lost a lot of money investing in Citic Pacific. They said they made the investment decision based on insufficient information.
http://www.chinadaily.com.cn/hkedition/2008-10/25/content_7140198.htm

Frontier Markets

Financial Storm Hits Gulf
Speculative Currency Trades Plunge Kuwait Into Bank Bailout
ABU DHABI — The global financial storm rolled across the Persian Gulf on Sunday, as Kuwait’s central bank guaranteed bank deposits and cobbled together a hasty bailout for one of the country’s largest banks.
http://online.wsj.com/article/SB122501263428669773.html

Edited by Robert Luke, robertluke@johnlothian.com

EMERGING MARKETS – FINANCIAL FALLOUT
Into the storm
How the emerging world copes with the tempest will affect the world economy and politics for a long time The Economist FOR much of the past year the fast-growing economies of the emerging world watched the Western financial hurricane from afar. Their own banks held few of the mortgage-based assets that undid the rich world’s financial firms.
http://www.economist.com/opinion/displaystory.cfm?story_id=12471135
*RL – Story later notes: “This credit crunch will be grim, but most emerging markets can avoid catastrophe. The biggest ones are in relatively good shape. The more vulnerable ones can (and should) be helped.”

IMF Wants Credit Line for Emerging Economies International Herald Tribune
The International Monetary Fund is working to arrange a huge credit line that would allow emerging-market countries desperate for foreign capital to borrow dollars, according to several officials. The IMF is already in negotiations with several countries to provide emergency loans, but the list of countries under threat is growing by the day, and now includes developing stalwarts like Brazil, South Africa and Turkey.
http://www.istockanalyst.com/article/viewiStockNews+articleid_2738877.html

EMERGING MARKETS – ALTERNATIVE ASSETS
Emerging Nations to Save Art Market From Slump, Christie’s Says Bloomberg Christie’s International has assembled $350 million of art in Abu Dhabi, combining highlights from its Oct. 30 auction in nearby Dubai with a Rothko, a Bacon and two Monet works as it seeks to woo emerging-market buyers.
Christie’s is betting that cash from emerging markets in the Middle East, Asia and Russia will stop the biggest financial crisis since the Great Depression from triggering a similar slump in the art market.
http://www.bloomberg.com/apps/news?pid=20601088&sid=aB6F0nHq58AQ&refer=muse

EMERGING MARKETS – BONDS OUTLOOK
Emerging market bonds – a safe place to be?
Financial Times
Are emerging markets a safe haven in the current crisis? To judge by emerging market share prices, investors should flee and not come back for a good, long while. The MSCI Emerging Markets index has fallen by well over 50 per cent since the start of the year, compared with about 35 per cent for the Dow Jones Industrial Average.
http://www.ft.com/cms/s/0/3a7854a8-a21a-11dd-a32f-000077b07658.html

EMERGING MARKETS – CURRENCIES OUTLOOK
Opportunities for Currency Investors Amid Market Turmoil Seeking Alpha Investors in currencies are confronted with some uncomfortable realities.
Currency prices do not respond to the same events that drive equity and bond prices, so the investor must look for different signals. World demand for a specific currency is influenced by an uncountable number of factors, and no academic study has ever pinpointed a single variable that is a reliable predictor of future currency prices.
http://seekingalpha.com/article/102030-opportunities-for-currency-investors-
amid-market-turmoil

Miscellaneous News

SARAH REMEMBERS HER FRIENDS
WHEN ever-loyal Sarah Ferguson heard Denise Rich was honoring Cantor Fitzgerald CEO Howard Lutnick at her cancer research fund-raiser, the former Duchess of York jetted over from London. It seems Lutnick and his wife, Allison, once gave office space to the frisky redhead when her marriage to Prince Andrew went bad, helping her back on her feet. Lutnick has raised $180 million for survivors of Cantor employers killed on 9/11.
http://www.nypost.com/seven/10242008/gossip/pagesix/sarah_remembers_her_frie
nds_134989.htm

WSJ to Warren Buffett: “Time to Get a New Crystal Ball”
http://www.msnbc.msn.com/id/27400058/

Forbes Magazine Turns to Its Boss for Calm
By STEPHANIE CLIFFORD
Steve Forbes makes an appearance on the cover of the free-market proponent to reassure readers about the economic upheaval.
http://www.nytimes.com/2008/10/27/business/media/27mag.html?ref=business

Observations – Statistics – Commentary

The Essence of Success
Successful is the person who has lived well, laughed often and loved much, who has gained the respect of children, who leaves the world better than they found it, who never lacked appreciation for the earth’s beauty, who never fails to look for the best in others or give the best of themselves.
http://english.kofa.or.kr/

**** As I was working on MarketsWiki today amidst the limit down open in stock indices, I ran across this on the English version of the Korea Futures Association’s website. I could not help but notice that this “Essence of Success” had nothing to do with portfolios, 401Ks or as the joke goes, 201Ks.

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Bats exchange goes live
BATS Holdings, an innovative global financial markets technology company, announces today’s much anticipated launch of BATS Exchange, one of the fastest-growing, top-tier equity markets in the US. “This milestone marks a tremendous day for BATS and for our industry,” BATS CEO Joe Ratterman said.
“We look forward to participating directly in the national market system while competing on a level playing field with our primary competitors, Nasdaq and the New York Stock Exchange. http://www.marketwatch.com/news/story/bats-exchange-goes-live/story.aspx?gui
d={7AC3FDA2-F43D-4E44-8D75-49B5D7648C0C}&dist=hppr

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MGEX Board Recommends Trading Exclusively Electronically
After a long history of futures and options open outcry trading, MGEX (Minneapolis Grain Exchange or Exchange) is closing its trading pits effective December 19, 2008. The decision to make the transition to exclusively electronic trading was unanimously approved by the MGEX Board of Directors and is pending MGEX ownership approval. The Exchange’s electronic trading operations on the CME Globex® electronic trading platform will remain unchanged. MGEX will continue to host the cash market from a newly remodeled location in the historic Grain Exchange Building. This space will include a new member lounge as well as desk space for electronic trade execution. This decision comes after an exhaustive study done by MGEX Management at the request of the Board of Directors. Over the past 12 months there has been a dramatic trend away from open outcry and towards electronic trading witnessed by all U.S. exchanges, including MGEX.
http://www.mgex.com/documents/MGEXBoardRecommends102408.pdf

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Trader Sues For Not Getting The Full Bonus He Awarded Himself!
With impeccable timing, a City trader’s case was being heard in London’s Court of Appeal Tuesday. He is claiming an additional $150,000 related to his 2006 bonus payout.
http://news.hereisthecity.com/news/business_news/8382.cntns

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Congress Hits Smaller Forex Traders
In the wake of the massive bailout of investment banks (” ‘Distasteful’
Capital,” Review & Outlook, Oct. 15) it is astounding to me that Sen. Tom Harkin recently supported, and Congress passed, legislation to eliminate the participation of medium-sized and smaller financial firms in a very competitive and potentially profitable sector of the global markets: foreign exchange trading.
http://online.wsj.com/article/SB122481079648865205.html?mod=googlenews_wsj

+++

How To Reduce Your Chance Of Getting A ‘Pink Slip’ Or A P45
Make no mistake, this downturn is different. Don’t believe anyone in the markets who says that they have seen it all before. No-one alive today has witnessed this. What we are seeing is not just a market correction, it will result in a major reassessment of how companies raise capital, how banks make money and how individuals choose to invest any surplus funds. Some say, in fact, that this is even the end of capitalism as we know it.
http://news.hereisthecity.com/news/business_news/8387.cntns

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New Market Trades on Sports Knowledge
Players Use Real Cash to Build ‘Sportfolios’
http://online.wsj.com/article/SB122471163578159995.html

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Foreclosure Phil
Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the center of the housing credit crisis, he pulled a sly maneuver in the Senate that helped create today’s subprime meltdown. Who’s to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate for lead perp is former Sen. Phil Gramm.
Eight years ago, as part of a decades-long anti-regulatory crusade, Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America?
Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain’s presidential campaign and advises the Republican candidate on economic matters. He’s been mentioned as a possible Treasury secretary should McCain win. That’s right: A guy who helped screw up the global financial system could end up in charge of US economic policy. Talk about a market failure.
http://www.motherjones.com/news/feature/2008/07/foreclosure-phil.html

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This Hedge Fund Manager Tries to Short Himself
The first time I sensed the alarming change in my soul was when I caught myself, five minutes after the market open, reaching for a reefer.
Trust me, I didn’t amass legacy wealth (underestimated by Forbes magazine in the high eight figures) by smoking weed during trading hours. Exhaling that first hit I thought and might even have moaned aloud: “Whoa, dude! Why are you even running a hedge fund?” The markets were collapsing, and so was my passion.
http://www.bloomberg.com/apps/news?pid=20601039&sid=a5PEgwA8j68M&refer=home

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Starving cattle amid high prices for feed in Neb.
The dead were stacked in two piles, 70 cows in one, 30 in another, hidden away in the crevices of this scenic, hilly ranch country where cattle outnumber people.
http://news.yahoo.com/s/ap/20081024/ap_on_bi_ge/farm_scene_starving_cattle;_
ylt=Al4mQvFjcGbRksEYY582YNJu24cA

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Lead Stories

Greenspan Concedes Error on Regulation
WASHINGTON — For years, a Congressional hearing with Alan Greenspan was a marquee event. Lawmakers doted on him as an economic sage. Markets jumped up or down depending on what he said. Politicians in both parties wanted the maestro on their side. But on Thursday, almost three years after stepping down as chairman of the Federal Reserve, a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending.
http://www.nytimes.com/2008/10/24/business/economy/24panel.html?_r=2&ref=bus
iness&oref=slogin&oref=slogin

Greenspan says flaw in market system
Former Federal Reserve Chairman Alan Greenspan, describing the current financial crisis as a “once-in-a-century credit tsunami” acknowledged Thursday that the crisis has exposed flaws in his thinking and in the workings of the free-market system.
http://news.yahoo.com/s/ap/greenspan;_ylt=AkLvKrXNkx0ymN8dPlaV.5MDW7oF

Wall Street layoffs could surge past 200,000
Traders and investment bankers might have more to worry about than dwindling bonus pools this year as mass firings on Wall Street are set to hit a record.
http://ap.google.com/article/ALeqM5h_5yBHNpuzJ6X6VhNDxV2LIRrPYgD940D5G00

SEC’s Cox says supports merger of agency, CFTC
The chairman of the U.S. Securities and Exchange Commission said on Thursday he “strongly” supported a merger between his agency and the Commodity Futures Trading Commission.
http://news.yahoo.com/s/nm/20081024/bs_nm/us_financial_regulation_merger;_yl
t=AsjsjPLu.WAYMByOJklALTe573QA

SEC’s Cox Backs Merger With CFTC
The SEC’s chairman said he strongly supports merging his agency with future-markets regulator CFTC.
http://online.wsj.com/article/SB122480710183665011.html?mod=testMod

Up to 30 pct of hedge funds could close
Up to 30 percent of the world’s hedge funds could disappear “in a Darwinian process,” according to the co-chief executive of one of Europe’s biggest, GLG Partners. Emmanuel Roman was quoted by several British newspapers as saying many hedge funds would either go bust or decide that the meagre profits were not worth the effort. “This will go down in the history books as one of the greatest fiascos of banking in 100 years,” he was quoted as saying. “There needs to be some scapegoats, and the regulators are going to go hunt people. That will be good in the long run.”
http://www.reuters.com/article/hedgeFundsNews/idUSLNE49N02620081024

States call for IMF ‘critical role’ in crisis
Asian and European leaders meeting in China’s capital will demand that the International Monetary Fund play a “critical role” in helping countries hardest-hit by the global financial meltdown, according a draft statement seen by The Associated Press on Friday.
http://news.yahoo.com/s/ap/20081024/ap_on_bi_ge/as_asia_europe_imf;_ylt=Am8q
PltohO3Nk.GK.Itt89Zu24cA

British dispute delays Iceland deal with IMF: report
Iceland’s decision to seek a rescue loan from the International Monetary Fund has been delayed by failure to reach a deal with London over British savings frozen in an Icelandic bank, media reports said Thursday.
http://news.yahoo.com/s/afp/20081023/bs_afp/financeeconomyicelandbritainimf_
081023181204;_ylt=Ak7smNHQex7cROHRK68nldamOrgF

Central banks need to calm disorderly FX markets
The world’s major central banks urgently need to calm wild swings in major exchange rates, the latest manifestation of a deepening global financial crisis and one which has sent the U.S. dollar and Japanese yen soaring against European and emerging markets currencies.
http://uk.news.yahoo.com/22/20081024/tbs-uk-currencies-intervention-366e51d.
html

Sarkozy plans new French wealth fund
President Nicolas Sarkozy on Thursday said France would set up a new “strategic investment fund” to stop French companies from falling into the hands of foreign “predators”. The new fund will be operated by Caisse des Dépôts et Consignations – the country’s existing sovereign wealth fund – but would be “more active, more offensive, more mobile” in defence of French industrial assets, Mr Sarkozy said.
http://www.ft.com/cms/s/0/e1f97c38-a10d-11dd-82fd-000077b07658.html

U.S. Companies Led by Citigroup Head to Georgia for Trade Talks
A group of about 20 U.S. companies led by Citigroup Inc. will take part in two-day trade talks in Georgia starting on Oct. 27 aimed at rebuilding the country’s economy following its five-day war with Russia in August.
http://www.bloomberg.com/apps/news?pid=20601095&sid=aTKKpK9A71w8

DTCC-LCH.Clearnet Deal Highlights Bank-Exchange Battle
The planned merger of the largest clearinghouses in Europe and the U.S.
marks the latest effort by banks to stem the loss of profitable clearing business to financial exchanges. New York-based Depository Trust & Clearing Corp., or DTCC, announced plans Wednesday to acquire London-based LCH.Clearnet, creating what would be the world’s largest processor and guarantor of equity, bond and derivative trades. The preliminary deal between the two user-owned companies, following almost two years of talks, comes amid multiple efforts by exchanges to internalize clearing and offer services to third parties. The global financial crisis has also intensified regulatory interest in clearinghouses, which stand between trades to provide a guarantee that contracts will be honored. The banks and hedge funds that dominate trading across asset classes have long expressed concern that the consolidation among exchanges could drive up fees, singling out clearing as a key area of concern.
http://online.wsj.com/article/BT-CO-20081022-717351.html?mod=wsjcrmain

Top Firm CEO Gets Death Threat
ABC News reports that the US Postal Service has posted a $100,000 reward after a number of letters were sent to offices of JPMorgan Chase which contained a powdery substance, and said: ‘It’s payback time. What you have just breathed in will kill you in 10 days’. The white power turned out to be harmless calcium. The letters are thought to have been sent by someone clearly miffed about the bank’s recent acqusition of Washington Mutual.
http://news.hereisthecity.com/news/business_news/8389.cntns

Deutsche Bank Chief Ackermann Declines to Accept German Award
Deutsche Bank AG Chief Executive Officer Josef Ackermann won’t accept an award offered to him by a German initiative to honor his efforts for promoting Germany as a financial center.
http://www.bloomberg.com/apps/news?pid=20601100&sid=abAiX9RpOhcQ

Hedge Fund Panic Said Likely To Close Down Markets
The Times reports that Nouriel Roubini, a New York University professor, has said that regulators around the world may be forced to step in and close the markets in order to stem the panic from the expected imminent implosion of a number of hedge funds.
http://news.hereisthecity.com/news/business_news/8390.cntns

The Credit Rating Agencies’ Moment of Shame
Investors ought to take a look at the embarrassing information that came out about the credit rating agencies’ botched handling of subprime securities before the House Committee on Oversight and Government Reform. Internal memos at the agencies, email exchanges, instant messages all point to how insiders at these companies knew they were botching the job-and did little to stop the worst credit crisis in history from happening.
http://emac.blogs.foxbusiness.com/2008/10/23/the-credit-rating-agencies-mome
nt-of-shame/

Mexico and Brazil Step In to Fight Currency Declines
Underscoring the growing impact of the global financial crisis on Latin America, central banks in Mexico and Brazil deployed billions of dollars of reserves on Thursday to stem steep currency declines that are testing the region’s hard-won economic stability.
http://online.wsj.com/article/SB122480413886264801.html?mod=googlenews_wsj

Keeping Up (Barely) with the Market’s Wild Volatility
If you think you’ve been on a roller coaster ride watching your brokerage account, spend some time with the professional traders, platform operators, and stock exchange executives who deal with stock prices on a minute-by-minute basis.
http://www.time.com/time/business/article/0,8599,1853612,00.html?xid=rss-top
stories

S&P 500 Futures Reach Limit Down In Electronic Trade
http://us.rd.yahoo.com/dailynews/external/fox_rss/rss_fox_bs/httpwwwfoxbusin
esscomstorymarketsindustriesmediaspfuturesreachlimitelectronictrade/28941904
/SIG=1218d4rrv;_ylt=AtYAxxriJ7.q1eTT2db1DeJxiIt4/*http://feeds.foxbusiness.c
om/~r/foxbusiness/yahoo/~3/430604206/

Environmental Trading News

Funding becoming harder to get for green startups
Saving the planet is looking a lot less profitable than it was a few months ago, and investors once enamored with finding the next high-flying alternative energy startup are retrenching.
http://www.reuters.com/article/smallBusinessNews/idUSTRE49N3SA20081024

Japan Power Bourse to Start U.N. Carbon-Credit Trade Next Month
The Japan Electric Power Exchange will start trading United Nations-emission credits and carbon- free electricity next month, a bourse official said.
http://www.bloomberg.com/apps/news?pid=20601207&sid=aONOvuE5jcHE

Carbon finance seen as solid despite global crunch
Carbon finance has escaped a hit from the global credit jitters but regulators must act fast to speed up project delays to maintain the momentum to combat climate change, World Bank and industry officials said.
http://www.enn.com/business/article/38486

FACTBOX: Aviation in the EU Emissions Trading Scheme
European Union governments gave their formal approval on Friday to include aviation in the bloc’s emissions trading scheme, they said in a statement.
http://uk.news.yahoo.com/22/20081024/twl-environment-us-eu-aviation-emission
s-1202b49.html

Japan utilities may join trial CO2 scheme
Each Japanese utility will consider participating in the planned domestic trial carbon dioxide trading scheme, keeping in mind the industry’s voluntary goals under the Kyoto Protocol, the chairman of an industry association said on Friday.
http://ph.news.yahoo.com/rtrs/20081024/tbs-utilities-japan-climate-9a48464.h
tml

For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf. Click here to subscribe:
jimkharouf-request@johnlothiannewsletter.com?subject=subscribe

Exchange & ECN News

NYSE Aims to Maximize Market Quality and Competitiveness
With Newly Approved Enhancements of Trading Model
The New York Stock Exchange, a subsidiary of NYSE Euronext (NYX), is moving forward with a revised rule set and advanced trading tools designed to maximize the NYSE’s market quality and competitiveness in today’s increasingly electronic trading environment. The initiatives further distinguish the NYSE from competitors and provide greater value to customers by enhancing the Exchange’s unique market model with new benefits and functionality.
http://www.nyse.com/press/1224844297395.html

NYSE Euronext And EasyETF Launch European Low-Carbon Index & ETF Managed By BNP Paribas Asset Management In Partnership With AgriSud, GoodPlanet.org And WWF
Today, at a conference in Paris, organised by BNP Paribas Investment Partners on “Finance and Environmental issues”, NYSE Euronext announced the launch of a new carbon index identifying European companies with a low carbon footprint: the “Low Carbon 100 Europe® Index”. This conference attracted investors, asset management professionals, NGOs and academics.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8349

Nasdaq OMX Europe cuts fees
In a sign of an intensifying price war in European equities trading Nasdaq OMX Europe yesterday cut the fees it charges for using its trading facility only a month after launch. The move was designed to “position Nasdaq OMX Europe as the most competitively priced trading platform in Europe”, it said.
http://www.ft.com/cms/s/0/596295f2-a163-11dd-82fd-000077b07658.html

ECX Reports New Daily Trading High Of 39 Million Tonnes As Participants Roll Positions Forward
The European Climate Exchange (ECX) established a new daily record volume on 23rd October with a combined total of 39,169 contracts, representing just over 39 million tonnes of underlying emissions permits. The daily record consisted of 35,690 EUA (European Union Allowance) futures and 3,479 CER (Certified Emission Reduction) futures. The previous record day of 34,316 contracts was set on 6th June 2008. Average daily volumes for October 2008 are running at 17,293 contracts, up from 4,819 contracts in October 2007 representing an increase of 259%.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8343

NZX Announces NPAT Up 20% In Third Quarter 2008
NZX Group has today released a financial result showing NPAT up 20% to $7.80 million year to date. NZX CEO, Mark Weldon said, “NZX has changed the shape of the business ahead of the need to do so. NZX has spent the last three years planning and seeding these options and as a result we are in good shape to meet the challenges market conditions are throwing at us.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8339

Bursa Malaysia Registers Net Profit Of Rm90.9 Million, 52% Lower Than Last Year Due To Weak Market Performance – Market Integrity Remains Bursa Malaysia’s Top Priority Bursa
Malaysia Berhad (Bursa Malaysia) today reported a net profit of RM90.9 million for the nine-month period ended 30 September 2008 – a 52% decline compared to the net profit of RM191.1 million for the corresponding period in 2007. Operating revenue fell by 35% to RM228.7 million from RM350.5 million recorded in the same period last year. The drop in profit was primarily due to the decreased trading revenue, resulting from the weak performance of the equities market, as similarly experienced by global bourses.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8345

Equity Trading Halted On RTS
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8350

Malawi Stock Exchange Weekly Report
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8352

MCX Weekly Market Report
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8340

RG08-138 Close-Out Requirement for Market Makers Under Temporary Rule 204T of Regulation SHO (REVISED)
http://www.cboe.org/publish/RegCir/RG08-138.pdf

A: Introduction of three new SSFs;Introduction of six SSFs due to Corporate Actions; B: Contract Specifications of Options on Cie Financière Richemont AG (CFR); C: Admission Withdrawal of 21 Single Stock Futures and one Stock Option
http://www.eurexchange.com/download/documents/circulars/cf2582008e.pdf

HKFE Announces Revised Margins For Ping An Insurance Futures
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8341

Zhengzhou Commodity Exchange To Change Margins For White Sugar Futures Contracts
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8351

Tokyo Grain Exchange: The Daily Price Limits For Oct. 27, 2008
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8344

Brokers & Dark Pools

Freddie Mac seeks Lehman probe of missing $1.2 billion
NEW YORK (Reuters) – Mortgage finance company Freddie Mac has asked a U.S.
bankruptcy judge for the ability to conduct an investigation into $1.2 billion it claims it is owed by bankrupt investment bank Lehman Brothers Holdings Inc .
http://news.yahoo.com/s/nm/20081024/bs_nm/us_financial_freddiemac_lehman;_yl
t=Ao4bTTUWbjYtlppibFlRpi2573QA

Bear Stearns $30 billion mortgage portfolio falls 9 percent
NEW YORK (Reuters) – A Bear Stearns mortgage portfolio backed by the U.S.
government racked up $2.7 billion of losses in the third quarter, amounting to a 9 percent decline on about $30 billion of assets, the Federal Reserve said Thursday.
http://news.yahoo.com/s/nm/20081023/bs_nm/us_jpmorgan_mortgages;_ylt=Aql8Mpk
JsJXQsIY0Fe12bxW573QA

Interactive Brokers Group Announces Strong Third Quarter Results
http://tinyurl.com/5fx9oo

French probe finds problems at Caisse bank
An initial investigation into how French mutual bank Caisse d’Epargne lost about $810 million trading derivatives during the worldwide stock market plunge discovered “serious holes” in the bank’s system of controls, French Finance Minister Christine Lagarde said Friday.
http://biz.yahoo.com/ap/081024/eu_france_bank_probe.html?.v=1

Nomura Names Former Lehman Bankers as Regional Equity Heads
Nomura Holdings Inc., Japan’s biggest brokerage, appointed two former bankers from Lehman Brothers Holdings Inc. as regional heads of its equity operations in Europe, the Middle East, Africa and Asia-Pacific.
http://www.bloomberg.com/apps/news?pid=20601104&sid=azM1Gm1YWFsw

Peninsula cities take big hit from Lehman Brothers bankruptcy
Stung by the $150 million hit their investment pool took from the Lehman Brothers bankruptcy, officials from East Palo Alto and other Peninsula cities are facing the prospect of having to make cuts, freeze positions or dip into reserves.
http://www.mercurynews.com/ci_10801555?source=rss

Lehman Brothers Holdings Inc. Announces Filing of Motion Seeking Restrictions on Trading in Lehman Stock by “Substantial Equityholders,”
Effective as of October 15, 2008
http://biz.yahoo.com/bw/081024/20081024005185.html?.v=1

Goldman Sachs said to cut 10 percent of work force
NEW YORK – Goldman Sachs Group Inc. is cutting about 10 percent of its work force amid the ongoing downturn in the credit and lending markets, a person briefed on the plan said Thursday.
http://news.yahoo.com/s/ap/20081023/ap_on_bi_ge/goldman_sachs_job_cuts;_ylt=
Asy7KFDokRw_kWs6aa0A4BRu24cA

Penson says Q4 earnings may be flat sequentially
http://www.reuters.com/article/marketsNews/idINBNG36425820081023?rpc=44

Regulatory News

The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/2008/dig102408.htm

SEC’s Cox Calls for Closing Financial Services Regulatory Gaps
The credit crisis shows regulatory gaps need to be closed on credit default swaps and investment bank supervision, the chairman of the U.S. Securities and Exchange Commission said on Thursday.
http://www.insurancejournal.com/news/national/2008/10/24/94973.htm

Regulator to require CFD disclosure next year
The Financial Services Authority said on Thursday it planned to make investors disclose holdings of more than 3 percent in companies through contracts for difference.
http://www.reuters.com/article/hedgeFundsNews/idUSLNE49N05320081024

FSA moves on contracts for difference
The City watchdog is pushing ahead with plans to force disclosure of derivatives that help investors stealthily build positions in target companies. The Financial Services Authority on Thursday confirmed that investors who build up positions through contracts for difference will have to disclose their holdings when they reach 3 per cent of a company’s outstanding stock – just as if they had bought the shares outright.
http://www.ft.com/cms/s/b9aef1ae-a14e-11dd-82fd-000077b07658,Authorised=fals
e.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fb9aef1ae-a14e-11d
d-82fd-000077b07658.html&_i_referer=http%3A%2F%2Fwww.futuresindustry.org%2F

Regulators examining market close stock surges U.S. regulators are taking a closer look at unprecedented volatility in stock markets near the close of trading, hunting for any signs of manipulation.
http://www.reuters.com/article/ousiv/idUSTRE49M8WC20081023

Regulators Hunt for Signs of Market Manipulation
http://www.cnbc.com/id/27356732

How Linda enforces securities laws
The position of Linda Chatman Thomsen, director of the enforcement division of the US Securities and Exchange Commission, is fast moving from tenuous to untenable. Already facing disciplinary action — hopefully involving the phrases “Clear your desk” and “grand jury subpoena” — following the inspector general’s report into the handling of L’Affaire Aguirre, she’s now alleged to have tipped a wink or two in the general direction of her old boss, Stephen Cutler, during the JPMorgan-Bear Stearns stitch-up.
http://nakedshorts.typepad.com/nakedshorts/

FSA in High Court to wind up Cameron Farley
http://www.accountancyage.com/accountancyage/news/2228996/fsa-court-wind-cam
eron-farley

Turkish regulator says suspends Raymond James
http://www.reuters.com/article/governmentFilingsNews/idUSLO43651620081024

Certificate of registration of M/s. Rosy Blue Securities Pvt. Ltd., suspended http://www.sebi.gov.in/press/2008/2008235.html

Investments – Indexes – Managed Futures – Managed Funds

Russian hedge funds face closure
Up to half of Russian hedge funds could go out of business as the financial crisis sends investors fleeing and the stock market continues to fall, according to industry experts. Speaking at the Russia Alternative Investment Summit on Wednesday, Simon Fentham-Fletcher, head of fund of hedge funds at Raiffeisen Bank, said in a worst-case scenario, 50 percent of Russian hedge funds could close.
http://www.reuters.com/article/rbssInvestmentServices/idUSLN73967420081023

Investors Flee as Hedge Fund Woes Deepen
The gilded age of hedge funds is losing its luster. The funds, pools of fast money that defined the era of Wall Street hyper-wealth, are in the throes of an unprecedented shakeout. Even some industry stars are falling back to earth.
http://www.nytimes.com/2008/10/23/business/23hedge.html?em

Swap spreads turn negative
The turmoil in the financial markets has taken hold of the strategically important trade in long-term interest rate derivatives, pushing rates to levels once thought to be a “mathematical impossibility”.
http://www.ft.com/cms/s/0/3b8ebf34-a14e-11dd-82fd-000077b07658.html

Nathanial Rothschild’s Atticus hedge fund adds to his problems
The hedge fund chaired by Nathanial Rothschild has lost billions of pounds after underestimating the global economic slowdown. Mr Rothschild, who is embroiled in an explosive public row with George Osborne, the Shadow Chancellor, is co-chairman of Atticus Capital, a New York hedge fund. Atticus has been forced to issue a frank apology to some of its wealthy investors after their investment in the fund almost halved in less than a year.
http://www.telegraph.co.uk/news/newstopics/politics/conservative/georgeosbor
ne/3248203/Nathanial-Rothschilds-Atticus-hedge-fund-adds-to-his-problems.htm
l

What’s Behind the Surge in the VIX?
As the stock market continues to post big swings and sharp declines, the VIX, often known as the fear index, is getting a lot of attention. It has spiked to unprecedented heights and reinforced many investors’ reluctance to buy stocks. That surge in the VIX isn’t only the result of fear that markets will remain unsettled. There also has been a scramble among Wall Street traders to close out money-losing bets that volatility would subside.
Many market participants say that rush of buying in the options market may be artificially inflating the VIX. As a result, it may be overstating expectations for more big declines to come.
http://online.wsj.com/article/SB122477812298862775.html?mod=googlenews_wsj

Star Mutual-Fund Managers Don’t Give Up, Buy Carefully
What is the smart money buying? Cheap stocks that should hold up — and some stocks outside the savants’ normal comfort zone. With the Dow Jones Industrial Average down nearly 35% this year, amid neck-snapping volatility, a half-dozen money managers with good long-term records say the worst is likely not over. The recession will be deep and long, they warn.
http://online.wsj.com/article/SB122480725513165017.html

FTSE & ATHEX Launch The FTSE/ATHEX Liquid Mid Index
Today the Athens Exchange in partnership with FTSE Group (“FTSE”), the global index provider, announced the introduction of a new index: the FTSE/ATHEX Liquid Mid Index. The new index will be launched on the 3rd November 2008, with a starting value of 2,000 points.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8348

FTSE, ATHEX & CSE Launch The FTSE/ATHEX-CSE Banking Index
Today the Athens Exchange and the Cyprus Stock Exchange in partnership with FTSE Group (“FTSE”), the global index provider, announced the introduction of a new index: the FTSE/ATHEX-CSE Banking Index. The new index will be launched on the 3rd November 2008 with a starting value of 2,000 index points.
http://www.exchange-handbook.co.uk/index.cfm?section=news&action=detail&id=7
8346

While Greenspan Pans Derivatives Price Modeling, Vendors Fine-Tune Their Offerings
http://www.wallstreetandtech.com/blog/archives/2008/10/while_greenspan.html

Reports

Briefing.com Economic Calendar
http://www.briefing.com/Investor/Public/MarketAnalysis/Calendars/EconomicCal
endar.htm

USDA Today
http://www.nass.usda.gov/Publications/index.asp

Event Calendar
The CBOT Event Calendar provides a list of current US and global events for the upcoming year.
http://www.cbot.com/cbot/calendar/month

CBOE Events Calendar
http://www.cboe.com/AboutCBOE/EventCalendar.aspx

Economic Release Calendar
The Economic Release Calendar (PDF) is a schedule of government, academic and industry economic releases, provided as a service to CME customers.
http://www.cme.com/files/economicreleasecalendar.pdf

Asia-Pacific News
by Ted Naganawa
http://www.marketswiki.com/mwiki/Ted_Naganawa
http://groups.google.com/group/chinaheadlines

Asia Eyes $80 Billion FX Swaps Fund by Mid-2009
http://www.cnbc.com/id/27352505

Frontier Markets

When will Currency Futures become big in India?
MUMBAI: The initial response to currency futures, launched with much fanfare on the last Friday of August, has been muted. Not many companies have come forward so far to use this tool that could help them hedge against currency fluctuations.
http://www.commodityonline.com/futures-trading/currency/When-will-Currency-F
utures-become-big-in-India-93-1.html

Frontier Markets Newsletter
Edited by Robert Luke, robertluke@johnlothian.com

EMERGING MARKETS – EQUITIES OUTLOOK

Global financial crisis? Managers are finding stocks to buy ex-U.S.
Money managers that focus on non-U.S. investments are finding values even as the credit crunch roils markets worldwide. Many managers still think emerging markets, in particular those in Asia, will continue to be attractive, although growth in that region most likely will not be as high as in the past few years.
http://www.pionline.com/apps/pbcs.dll/article?AID=/20081022/REG/810219950/10
39

The case for emerging markets
Are emerging markets a bargain right now? The instinct is right, as developing-country indexes have taken a serious thumping this year.
Year-to-date, Argentina’s main index is down 51%. China’s is down 63%.
Russia is down 68%. Overall, the MSCI Emerging Markets index is down 52% year-to-date, versus just a 34% drop for the S&P 500.
http://money.cnn.com/2008/10/22/magazines/fortune/emerging_markets.fortune/?
postversion=2008102311

EMERGING MARKETS – CURRENCIES OUTLOOK

Emerging Markets: Foreign Currency Debt Troubles
When Daniel Ion bought his first home last year, his monthly mortgage payment was $704. Now it’s $939—and rising. “We wanted so much to have our own house, but now we are really starting to feel the burden,” says Ion.
Soon, he frets, his salary as a manager at a toy factory may not be sufficient to cover the payments.
http://www.businessweek.com/magazine/content/08_44/b4106040079485.htm?chan=g
lobalbiz_europe+index+page_top+stories

*RL – The story later notes: “Many developing countries still look strong on paper, with big foreign reserves and healthy trade surpluses. But the statistics can mask heavy dependence on offshore loans to keep economies buoyant.”

Emerging markets tapping reserves
Developing nations are buckling under the weight of the credit crisis and are eating into their currency reserves as borrowing costs surge, the value of their currencies sinks and investors flee. Many are struggling to finance their current account deficits, a situation that will likely force more nations to join the likes of Iceland, Hungary, Pakistan and Belarus and approach the International Monetary Fund for financial assistance.
http://www.financialpost.com/story.html?id=904686

SE AFRICA – REGIONAL TRADE

Kampala Summit Adopts Trade Accords Program
The three economic sub-regions, Common Market of Southern and East Africa (COMESA), Southern Africa Development Community (SADC) and the East Africa Community (EAC) Wednesday in Kampala, Uganda, agreed to implement a trade accords harmonization program.
http://allafrica.com/stories/200810240122.html

Miscellaneous News

Electronic Trading and Risk Will Continue to See IT Spend
At an event sponsored by Interactive Data at the Nasdaq MarketSite entitled, “Fragmented Liquidity and its Impact on Market Data,” Larry Tabb, CEO of Tabb Group was on hand to present on the topic and share his thoughts on what firms should do coming out of these turbulent market times.
http://www.advancedtrading.com/infrastructure/showArticle.jhtml%3Bjsessionid
%3DMZDY1YLUZ5KRIQSNDLOSKH0CJUNN2JVN?articleID=211600156&_requestid=233058

A (Slight) Pall Descends on Gala for Women Bankers
http://dealbook.blogs.nytimes.com/2008/10/22/a-slight-pall-descends-on-gala-
for-women-bankers/