Observations – Statistics – Commentary
High-speed traders keep their technology close by
By Michael Mackenzie and Jeremy Grant
Thirty miles outside London near Basildon in Essex, a hangar-shaped building big enough to accommodate three football pitches sits in a featureless industrial park. Inside, NYSE Euronext, parent of the New York Stock Exchange, is building what it hopes is the exchange of the future. It is a far cry from the noisy trading floors of New York. Racks of computer space sit in vast, bomb-proof, air-conditioned halls. They will contain the electronic trading “engines” that allow millions of trades in equities, options and futures contracts to change hands every day on NYSE Euronext’s platforms.
The Commodity Index Reborn
As readers of HardAssetsInvestor.com know, the Commodity Futures Trading Commission spent all summer pushing for tighter regulation of commodity ETFs, which the agency blames (rightly or wrongly) for running up energy prices last year. For the CFTC, it’s not a question of whether they should impose new regulations, but how much: Position limits, tighter regulation of swaps contracts and higher capital and margin requirements for derivatives are all possibilities currently on the table.
Posted by: Matthew Goldstein
The nation’s top commercial banks are poised to generate record revenue from trading derivatives this year. And that’s as good a reason as any why no one should expect the nation’s bank to go along peacefully with a plan to regulate the trading of these sophisticated instruments.
Futures and Options
From Cross-Margining to Risk Management, Trading Across The Two Markets Remains Riddled in Complexities
[Video] George Hanley
Don’t Be Blinded by Window Dressing
By STEVEN M. SEARS
End-of-the quarter trading throws the options market out of whack.
THE OPTIONS MARKET LIKES TO BOAST that what you see is what you get. There is even an acronym for it: WYSIWYG (pronounced wizzy-whig).
How Authentic Leaders ‘Walk the Walk’
By Alan Deutschman
The best leaders take the same hits as their employees and stick to the primary values they promised to uphold
Homeowners in financial trouble often redefault
WASHINGTON – Lenders are ramping up efforts to avoid home foreclosures, but a report by bank regulators says more than half of borrowers who get help fall behind again.
Gorkana US Alert: Wednesday 30th September 2009
The Wall Street Journal / Dow Jones Newswires
Mohammed Hadi, Asia Pacific Editor for Heard on the Street, has relocated to Hong Kong from Singapore. He can be reached on +852 2831 2522 and firstname.lastname@example.org. Andrew Peaple and James Simms, both Heard on the Street Columnists in Asia, remain in Beijing and Tokyo, respectively. Andrew can be reached on +86 10 6588 5848 and email@example.com. James can be contacted on +81 3 6895 7576 and firstname.lastname@example.org
Brother, Can You Give Your Two Cents’ Worth to the Recession Wiki?
By Peter A. McKay
Everyone has a favorite company or person or event to blame for the economic downturn that has gripped the U.S. for nearly two years. Now they’ll have a new venue to argue about it. The Museum of American Finance today launched a new site dubbed Recessipedia, which borrows Wikipedia’s underlying technology and wisdom-of-crowds concept to tackle the relatively narrow topic of the recent recession. But there are some twists.
Social media’s success formula
Influence and trust will be key factors for Google and Microsoft to consider as they enter the social media fray with Facebook and Twitter. Trust me on this: social media continues to revolutionise the internet. According to data released by The Nielsen Company last week, 17 per cent of all time spent on the Internet in August took place on either social networking or blogging sites, a 300 per cent increase from the previous year.
Software Polices Employees’ Twitter, Facebook, LinkedIn Posts
MarketsWiki Recent Updates
Companies, Organizations and Groups
London Stock Exchange to leave FESE
By Jeremy Grant in London
The London Stock Exchange plans to withdraw from the Federation of European Exchanges (FESE), dealing a blow to the trade association for the region’s established bourses as its steps up its lobbying efforts on issues such as “dark pools”. John Wallace, LSE spokesman, told FT Trading Room: “We are reviewing a number of our memberships across the organisation. We have decided to leave FESE and will seek to work more directly with regulators, legislators and the markets we serve across Europe.”
S&P Lawyer Abrams Says Ratings Bill Would Deter Competition
By Caroline Salas
Sept. 30 (Bloomberg) — Proposed U.S. legislation to make credit-ratings companies liable for one another’s missteps would discourage competition, according to Floyd Abrams, an attorney representing Standard & Poor’s.
Ex-Moody’s employee warned SEC about muni issues
WASHINGTON – As Congress steps up scrutiny of the credit rating industry, allegations by another former employee of Moody’s Investors Service have come to light and the big rating agency is being called to account before a House panel.
Options Market Wins Ally In Bid To Get Short Sale Exemption
By Tennille Tracy
NEW YORK (Dow Jones)–The options market has gained an important ally as it attempts to secure an exemption from future short-selling restrictions. Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, has asked the U.S. Securities & Exchange Commission to grant an exemption to market makers in the options market, saying these traders engage in “legitimate short selling activity.”
Geithner: Proposal is a ‘revolution’
By EAMON JAVERS
Treasury Secretary Timothy Geithner on Tuesday highlighted one area of the Obama administration’s keynote proposals in the regulatory reform debate, arguing that the planned overhaul of the derivatives market is the kind of sweeping change that will help prevent another market meltdown.
CTFC pushed to curb speculators
By Gregory Meyer in New York
The US senator who last year blocked key appointments to the US commodities regulator wants nominees to the watchdog to back a clampdown on speculators. Maria Cantwell, a Democrat, wants the nominees to support “strong position limits” to be set by regulator, a spokeswoman said. Some members of the Commodity Futures Trading Commission have voiced reservations about planned regulatory changes, which would impose strict caps on the number of energy futures held by investors because of concerns that they are inflating prices.
Italy’s Berlusconi backs ban of futures markets
ROME, Sept 29 (Reuters) – Italian Prime Minister Silvio Berlusconi said on Tuesday futures’ markets should be heavily regulated and possibly even scrapped altogether to fight speculation.
TD AMERITRADE Institutional Survey: Independent Registered Investment Advisors Upbeat about Career and Economy
OMAHA, Neb.–(BUSINESS WIRE)–A new survey of independent registered investment advisors (RIAs), released by TD AMERITRADE Institutional, a division of TD AMERITRADE Holding Corporation (NASDAQ:AMTD – News), shows advisors are upbeat about their jobs and the outlook on the U.S economy.
Pro-Business ‘New Democrats’ Try to Shape Financial Regulations
Sept. 30 (Bloomberg) — After traveling to Manhattan this month to rally support for overhauling financial regulations, President Barack Obama invited several lawmakers to fly with him back to Washington on Air Force One. Among the chosen few: Jim Himes, a first-term congressman from Connecticut.
Gordon Brown: ‘City is ideologically bankrupt’
Prime Minister promises that bankers ‘will pay back the British people’ in a speech positioning the Government against the Square Mile.
I.M.F. Calls for Overhaul of Financial System
By CARTER DOUGHERTY
Banks still have to write off $1.5 trillion in bad loans or worthless securities, the International Monetary Fund estimated in a new report.
Environmental Trading News
First Trading Platform for Voluntary Emission Credits Announced
HONG KONG, September 29 /PRNewswire/ — Irish Investment Bank and CITIC GROUP Begin Joint Venture Carbon Bank Ireland, Ltd., an Irish investment bank, today announced the execution of a joint-venture agreement with the Chinese financial conglomerate, CITIC GROUP, to implement a trading platform for Voluntary Emission Credits (VERs).
Europe proposes carbon trading VAT fraud crackdown
James Murray, BusinessGreen, 30 Sep 2009
The European Commission yesterday set out proposals designed to tackle the surge in VAT fraud that reportedly dogged the EU’s emissions trading scheme over the summer, prompting several countries to suspend VAT on carbon allowances.
$100 Billion Annual Climate-Change Adaption Costs Forecast by World Bank
Developing countries will need as much as $100 billion per year until 2050 to adapt to climate change, an amount that would nearly double current foreign aid flows from developed nations, the World Bank said.
Six Keys to Running an Efficient Green Business
By Andre de Fontaine
With unprecedented energy price volatility and looming climate regulations, businesses face a new and complex energy paradigm that few are fully prepared to manage. While individual approaches will vary by sector and company, new research from the Pew Center on Global Climate Change shows a growing number of companies recognize that energy efficiency must form the backbone of any corporate strategy to address the new energy frontier.
Senators’ Climate Draft Mirrors House Bill, With Some Exceptions
Senate May Seek Greater U.S. Carbon Cuts Than House
Alternative Energy Projects Stumble on a Need for Water
By TODD WOODY
Many plans to meet the nation’s demand for power with renewable energy could consume billions of gallons of water every year.
For more environmental trading news, subscribe to the Environmental Markets version of the John Lothian Newsletter edited by Jim Kharouf.
Visit http://www.jlnenvironmental.com to subscribe.
Exchange & ECN News
LCH.Clearnet inks interoperability pact with EMCF; partners FIS on clearing for fertilizer swaps
LCH.Clearnet Ltd (LCH.Clearnet) and the European Multilateral Clearing Facility (EMCF) have signed a master link agreement to achieve interoperability by November 2009.
Boerse Stuttgart extends scope of Euwax Sentiment Index
Intraday figures particularly valuable to investors with short-term horizons / Lammersdorf: Euwax Sentiment proving to be a popular information tool for market assessments
Beginning today, Boerse Stuttgart, Europe’s leading exchange for investment and leverage products, will be offering investors an extended version of the Euwax Sentiment Index. The new intraday chart will now be updated every minute in response to many requests from retail investors, for whose investment behaviour an ongoing, intraday version of the index is of real value. Boerse Stuttgart’s retail investor index offers a scientifically based picture of the investment behaviour of retail investors and provides an important aid in decision-making.
NYSE’s 400,000 sq ft data centre in New Jersey
Toronto Stock Exchange and TSX Venture Exchange land in Los Angeles
September 30, 2009 (LOS ANGELES) – Toronto Stock Exchange and TSX Venture Exchange’s 2009 U.S. Campaign arrives in Los Angeles today to highlight how California-based companies can benefit from listing on the Canadian equity exchanges.
ASX seeks compo for shake-up
THE Australian Securities Exchange will demand compensation from the Rudd Government as a result of a sweeping shake-up of market regulation which will see the exchange operator stripped of some of its powers to supervise brokers.
ASX Limited Annual General Meeting Results
RTS Stock Market Weekly Trading Results: September 21 – September 25, 2009
FORTS Weekly Trading Results: September 21 – September 25, 2009
CBSX Trader News Update CBSX to Update Clearly Erroneous Policy Effective October 5, 2009
CBOEdirect Version 8.1 System Enhancements
Banks, Brokers & Dark Pools
Bank of America to Sell Columbia Management’s Long-Term Asset Management Business to Ameriprise Financial
CHARLOTTE, N.C., Sept. 30 /PRNewswire/ — Bank of America Corporation today announced it has signed an agreement to sell the long-term asset management business of Columbia Management to Ameriprise Financial, Inc. for approximately $1 billion, subject to certain adjustments.
BofA to sell asset management unit for $1 billion
NEW YORK (Reuters) – Bank of America Corp has struck a deal to sell a long-term asset management business, part of its Columbia Management division, to Ameriprise Financial Inc for about $1 billion.
MTF status may weaken appeal of broker dark pools
Europe’s broker-owned dark pools or crossing engines will be more open to toxic flow and less able to provide price improvement if they are forced to register as multilateral trading facilities (MTFs), brokers claim.
Northern Trust joins ‘safer prime brokerage’ push
Northern Trust has become the latest custodian to tap into the hedge fund sector’s heightened awareness of counterparty risk by partnering with a prime broker to offer better safeguarding of client assets.
No truth to CIT-IndyMac merger talk: source
By Joseph A. Giannone
NEW YORK (Reuters) – CIT Group Inc (CIT.N) shares surged on Tuesday following a newspaper report that hedge fund Paulson & Co wants to combine the cash-strapped lender with a Paulson-affiliated bank once known as IndyMac. But a person familiar with the matter denied the report.
Merger Between CIT and IndyMac Unlikely, Reports Say
Doubt has been cast in a report that that hedge fund Paulson & Co. wants to combine cash-strapped lender CIT Group with a Paulson-affiliated bank once known as IndyMac.
Macquarie to Buy Investment Bank Fox-Pitt Kelton for About $146.7 Million
Macquarie Group Ltd., Australia’s largest investment bank, agreed to buy Fox-Pitt Kelton Cochran Caronia Waller LLC, an investment bank focused on financial services, for about $146.7 million.
Morgan Stanley’s Mack Proposes Single Regulator to Oversee Banks Worldwide
Morgan Stanley Chief Executive Officer John Mack, who struggled to return the bank to profitability amid the financial crisis, said a single regulator should oversee financial institutions worldwide.
Bank of New York Mellon appointed as depositary bank by Hikma Pharmaceuticals
Bank of New York Mellon, the global leader in asset management and securities servicing, has been selected by Hikma Pharmaceuticals PLC (Hikma) as the depositary bank for its American depositary receipt (ADR) program.
BNY Mellon Appointed as Depositary Bank by Sinotel Technologies Limited
NEW YORK, Sept. 30 /PRNewswire-FirstCall/ — BNY Mellon, the global leader in asset management and securities servicing, has been selected by Sinotel Technologies Limited (Sinotel) as the depositary bank for its American depositary receipt (ADR) program.
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.
SEC Is `Dog Chasing Its Own Tail’ on Probes, Investigators Say in Survey
The U.S. Securities and Exchange Commission, which was faulted for missing Bernard Madoff’s fraud, is unwise when choosing cases and rewards “quantity” rather than “quality,” according to its own investigators.
In Harsh Reports on S.E.C.’s Fraud Failures, a Watchdog Urges Sweeping Changes
SEC develops post-Madoff rules
The internal watchdog at the US Securities and Exchange Commission yesterday released two large reports detailing ways to improve the SEC’s enforcement and.
Schapiro: Securities lending rules ‘may need to be improved’
By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) — Securities and Exchange Commission head Mary Schaprio said Tuesday that the major financial crisis has raised questions about the multi-trillion dollar practice of securities lending, where investors such as hedge fund managers borrow shares from institutional investors for a price.
Two Senators Say S.E.C. Panel is “Stacked” Against Banning Naked Short Sales
On the eve of a second day of roundtable discussions of securities practices, Sens. Ted Kaufman (D-DE) and Johnny Isakson (R-GA) said Tuesday evening that the Securities and Exchange Commission’s has, in effect, stacked discussions on the practice of selling stocks short before first buying the shares.
Attitudes to derivatives reform either side of the Atlantic appear to be diverging. While US regulators last week pushed for more stringent rules than those set out in the Treasury Bill, officials in Europe seem to be playing down broad-brush regulation in favour of a more piecemeal approach. Helen Bartholomew reports.
New Jersey Trader Is a Fraud, SEC Says
By ADAM KLASFELD
NEWARK (CN) – New Jersey-based investor Robert J. Sucarato pocketed $494,000 in a Ponzi scheme, the SEC says in Federal Court. Sucarato, 40, whose “last known place of residence” was in New Brunswick, N.J., lied about his education and experience, falsified documents, including audits and business records, and claimed he was managing $7 billion when he actually had $110,000, the SEC says.
SEC Charges Virtual Reality Product Maker and Individuals in Boiler Room Fraud
Washington, D.C., Sept. 29, 2009 — The Securities and Exchange Commission today charged a virtual reality technology company, its principals, and three former sales agents for conducting a fraudulent offering scheme that garnered investors primarily through telemarketer sales out of a boiler room in the company’s Delray Beach, Fla., offices.
Federal Court Freezes Assets of Texas Trading Firms M25 Investments, Inc. and M37 Investments, LLC, and Scott Kear, Sr., Jeffrey Lyon and David Seaman, Charged by the CFTC with an $8 Million Forex Fraud,
ASC issues “recovery room” warning
York-Rio and TLC Explorations investors targeted by scheme
“Recovery room” schemes that are reportedly surfacing in Manitoba, Saskatchewan and British Columbia, the Alberta Securities Commission warned Tuesday. Recovery room schemes involve companies that contact investors who may have lost money in an illiquid investment with an offer to buy their shares at an inflated price. Once investors agree to the deal, the operators of the scheme ask them to pay a fee for the transaction. The scammers keep the fee but do not repurchase the shares.
U.K.’s Biggest Banks Probed for the First Time Over Tax Payments by FSA
Britain’s financial regulator is demanding information from the country’s biggest banks on how they structure themselves to minimize tax payments and what tax advice they give corporate clients, advisers to the banks said.
FSA spells out priorities as it publishes Turner feedback
The Financial Services Authority has set out its stall on how it will carry out financial regulation in the UK in the next few months, as it published industry feedback to its Turner Review, which it launched in March.
FSA feedback: the key points
The Financial Services Authority today published a response to the feedback received to the Turner Review, in a document that outlines the key priorities for the regulator in the coming months. Here Financial News takes a look at the key points.
Canadian regulators seek comment on the introduction of dark pools and orders
Issues of transparency, liquidity, fairness and information leakage outlined in consultation paper
Canadian securities regulators have issued a consultation paper on the development of dark pools in Canada….
Metavante court ruling retains swap safe harbor-ISDA
NEW YORK, Sept 30 – The safe harbors attributed to derivatives in bankruptcy are not threatened by a recent, widely-watched decision in a New York-bankruptcy court, according to an internal memo by a trade association.
Investments – Indexes – Managed Futures – Managed Funds
Man Group Assets Rise on Lower Outflows
Man Group, the world’s largest listed hedge fund firm, said slowing outflows helped lift assets to an estimated $43.8 billion at end-September, at the top end of forecasts, boosting its shares.
Man Group Stems Redemptions, Lifts Assets To $43.8B In 1H
Man Group Assets Rise Through September; Profit Falls as Fee Income Slides
Man Group Plc, the largest publicly traded hedge-fund manager, said assets under management rose in its fiscal second quarter, the first gain in more than a year, and that first-half profit will fall as fee income dropped.
London begins to lose appeal for hedge funds
By Sam Jones, Hedge Fund Correspondent
London’s position as the world’s number two city for hedge funds is beginning to slip after almost a decade of gaining ground. New York, meanwhile, is reasserting itself in spite of the Madoff scandal, the fall of Lehman Brothers and a series of high-profile fund liquidations.
Peter Thiel: Too Dignified For Hedge Funds
By Ryan Tate
Peter Thiel is not a clown. The PayPal co-founder and Facebook investor sees right through bubbles and rampant, ongoing Wall Street fraud, or at least says he does. So why is he running a hedge fund, again?
We Call Upon the Hedge Funds
Mises Daily by Dan O’Connor
The brains and talent of the financial industry have been moving enormous pools of wealth away from the highly regulated commercial and investment banks into the fast-paced, creative, and aggressive hedge funds. This is because, in many ways, the hedge funds represent a more pure capitalist system.
Taibbi’s Naked-Shorting Rage: Goldman’s Lobbying, SEC’s Fail
Hedge Funds Become Sugar Daddies
Hedge funds, it seems, are getting high on sugar. Massive bets by hedge funds are pushing sugar prices near 30-year highs, much like their previous moves on crude oil sent prices doubling, The New York Post reported.
Leaping off of the Hedge Fund slush pile: How to get noticed during Capital Intros
How to get noticed at capital intros, meet-the-manager forums, and other close encounters with potential investors — With increased competition…
Derivatives markets tackle trade dispute procedures
By Karen Brettell
NEW YORK, Sept 29 (Reuters) – Large derivatives dealers and fund managers are developing new methods to resolve disputes over collateral used to back the trades which if left unchecked can threaten large unexpected losses.
65% of investment managers bullish on Canadian equities: Russell
But a growing number believe Canadian stocks are overvalued
Athens Exchange S.A.: The First Multimarket ETF On The New Greek Turkish Index GT30
Briefing.com Economic Calendar
CBOE Events Calendar
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.
SGX wins exchange of year award
By Mok Fei Fei, Channel NewsAsia
SINGAPORE : The Singapore Exchange (SGX) has been named Asia’s “Exchange of the Year” by trade magazine Energy Risk.
The long road to success in China
By Barbara Kollmeyer
MADRID (MarketWatch) — With the stock market in China having soared from its lows a year ago, talk of a bubble has been growing louder. But veteran investors say you should avoid any attempt to time the volatile China market and simply ride out the ups and downs for what promises to be steady long-term gains.
China Investors Opened 350,382 New Stock Accounts Last Week
Shanghai beckons biggies
Investment banks, securities brokerages and law firms are actively preparing to assist multinational companies to list on the proposed Shanghai international board although the timing of the bourse’s launch has yet to be announced.
Need for more money managers depends on results of Fund study
By Moneth Deposa
The NMI Retirement Fund’s board of trustees will soon decide whether to hire or retain more money managers once the results of an assets liability study are issued and endorsed for board approval.
Japan set to end 115-year-old raw silk futures trading
Tokyo: Japan on Wednesday will end 115 years of raw silk futures trading that help to support its modernisation through the latter half of the 19th century but declined during the course of post-war industrial restructuring.
HKEx: Report On Initial Public Offering Applications, Delisting And Suspensions (As At 30 September 2009)
Are investors missing out on sub-Sahara Africa?
By Alonzo Fulgham
Washington – Here’s some good, if counterintuitive, news for American investors. Normally, by the time an investment tip makes its way into a newspaper, conventional wisdom says the money is already off the table. Not so in the case of sub-Saharan Africa. American investors and companies are overlooking an investment opportunity in plain sight. And the smart money will climb aboard before the economic tide rises. The rest will miss a fast-moving boat.
India extends commodity bourse investment deadline
MUMBAI, Sept 30 – India has given a final six-month extension to foreign firms who have to reduce their individual stakes in local commodity exchanges to 5 percent to meet foreign investment regulations, the government said on Wednesday.
Abu Dhabi bourse warns banks on Saudi exposure
By Stanley Carvalho
ABU DHABI, Sept 30 – The Abu Dhabi Securities Exchange has directed banks to provide details of exposure and provisions taken to troubled Saudi groups Saad and Algosaibi as part of regulatory measures, the bourse said on Wednesday.
Ivorian Cocoa, Coffee Bourse Workers Threaten Strike (Update1)
By Monica Mark
Sept. 29 (Bloomberg) — Workers at Ivory Coast’s cocoa and coffee exchange threatened to disrupt the new season that begins on Oct. 1 unless the government clarifies the effects of proposed budget cuts and reforms, a labor union official said.
Sharjah Islamic Bank Loaned 55.4 Million Dirhams to Algosaibi
CQG Adds Price Capturing and Risk Tools to Futures Trading Platform
CQG said Tuesday it has added real-time price capture, error detection and risk management features to its trading platform, by working with algorithm supplier Progress Software. This is the second result of a partnership first disclosed in November. That gave the CQG futures trading platform the ability to automate trading activity and employ custom algorithms provided by Progress Apama. CQG gives futures traders routing, graphics and technical analysis tools.
Cogent Consulting Releases Free Broker Review System for Hedge Funds
SUMMIT, N.J.–(BUSINESS WIRE)–Cogent Consulting LLC today announced a free version of its HedgeTrak web-based broker review and evaluation service for hedge funds. HedgeTrak Lite enables hedge funds to properly value trading and research services provided by their brokerage firms, in anticipation of upcoming registration requirements, and to meet the competitive requirements demanded by clients.
Improving OTC Derivatives Valuations
ROCKVILLE, MD–(Marketwire – 09/30/09) – MarketResearch.com has announced the addition of TowerGroup’s new report “How Much Is That Security in the Window?
Integral Development Corp. Launches TrueFX