Observations – Statistics – Commentary
How Overhauling Derivatives Died
By RANDALL SMITH and SARAH N. LYNCH
Lobbying by Wall Street has blunted efforts to step up regulation on derivatives trading by carving out exceptions or leaving the status quo in place. Derivatives took blame for some of the worst debacles of the financial crisis. But a year after regulators and critics began calling for an overhaul in the way they are traded, some efforts have been shelved and others have been watered down.
CDS market is far less opaque than presumed
From Mr Stewart Macbeth.
Sir, Your article on sovereign credit default swaps, “CDS market needs reform if more drama is to be avoided” (December 18) erred when it said “nobody really knows exactly how low volumes are (or not) since this is an over-the-counter market, conducted away from any exchange”.
Letters to the FT:
Regulatory systems do need regular pruning
From Mr Simon Gleeson.
Sir, Economists are familiar with the “lump of labour” fallacy – the idea that workers are an undifferentiated mass, so that it makes sense to talk about “too much” or “not enough” labour. An equivalent fallacy appears to be taking root in discussions about financial regulation.
The duty of judgment rests with the shareholder
By Andrew Hill
The Financial Services Authority‘s reform of hedge fund and private equity listings has been clumsy at best. But one good thing has come out of it: a proper review of the quality of companies now listing on the London Stock Exchange.
End of ‘broker votes’ promises reform
Mundane elections of company board members are about to get a lot more interesting. Starting next year, the New York Stock Exchange is banning so-called “phantom votes,” or votes cast without guidance from shareholders in elections of corporate directors. Also known as “broker votes,” they can swing the outcome of an election in favor of sitting directors keeping their jobs — even as regular shareholders are calling for those directors’ ouster.
Concerns grow over sovereign debt risk
Attention shifting to managing risk of country defaults
Wall Street casualties savor time off the treadmill
By Samantha Gross
Eighteen months without a job. Fourteen months. Twelve. It’s been a long dry spell for many of the suit-clad Wall Streeters who were handed their pink slips before hardly anyone was talking recovery. But sit down with a handful of ex-finance-industry workers volunteering to work for free as interns in a city-sponsored retraining program, and they seem almost … happy.
Lessons from the decade that shocked the stock market
It has been a decade that many investors would rather forget. On December 31, 1999 the FTSE100 closed at 6,930 and 10 years on it still has some distance to go before it regains this peak, sitting at around just 5,300 last week.
On the threshold of a new decade, Srikumar Bondyopadhyay wonders what investors gained from assets in the year gone by
The first decade of the new millennium draws to a close. The decade was remarkable in its extremes. Financial markets rose to heights never seen before and it toppled over like a house of cards in no time at all. But all’s well that ends well. The year 2009 was one of recovery, of crawling out of the debris left behind by the global financial crisis and start building anew.
Back from the brink (but watch your step)
NEW YORK, Dec 28 — Unless you’re Tiger Woods, 2009 has probably been a heck of a lot better than 2008.
The US no longer makes Australia’s world go round
WHETHER you look back on the past year or forward to the coming decade, you reach the same conclusion: it’s the developing countries of Asia and elsewhere that now do most to drive the world economy and most to influence our economy’s growth.
Gold: the commodity of the year
Lord Mayor denied knighthood after backing bankers’ bonuses
Jeers to you! The 14th annual Lump of Coal Awards
Chuck Jaffe’s Lump of Coal Awards recognize managers, executives, firms, watchdogs and other fund-world types for action, attitude, behavior, execution or performance that is misguided, bumbling, offensive, disingenuous, reprehensible or just plain stupid.
MarketsWiki Recent Updates
Companies, Organizations and Groups
War on Wall Street as Congress Warms to Turn Clock Back to Glass-Steagall
A one-page proposal gaining traction in Congress could turn back the clock on Wall Street 10 years, forcing the breakup of banks, including Citigroup Inc.
Regulators Take Aim at Dark Pools
Dark pools have come under fire as the SEC sets forth three new proposals to rein in the dark venues.
By Cristina McEachern Gibbs
Dark pools have carried an ominous connotation since the term was first coined about five years ago. But despite the unfortunate moniker, dark liquidity pools — which actually have been around since the late 1980s — serve a highly useful purpose for buy-side traders looking to trade large blocks of stock with minimal market impact.
Key U.S. senators see deal on regulatory reform
WASHINGTON (Reuters) – The top Democrat and Republican on the U.S. Senate Banking Committee said on Wednesday they hoped to resolve their differences on financial regulatory reforms before the Senate reconvenes in January.
Bill would cap credit card rates at 16%
**** Welcome to the $250 shipping and handing fee for your credit card bill.
Saudi King Abdullah ‘satisfied with oil price’
RIYADH (AFP) – Saudi king Abdullah described oil prices as satisfactory in an interview published on Saturday, at a time when the largest OPEC producer is seeking price stability.
Obama yet to put dent on lobbyists’ influence
WASHINGTON, Dec 28 — President Barack Obama is preparing to uncork the bubbly as he closes the deal on his most important domestic agenda item — health-care reforms. Celebrating quietly alongside are lobbyists who shaped key parts of the legislation that will overhaul a sector accounting for a sixth of the American economy.
Environmental Trading News
The Lawyers Win in Global Warming
Carbon dioxide air emissions is one of the big issues in global warming debate. However, before you start controlling by putting the carbon in the ground, you first have to put lawyers in a room to argue.
Middle East/Med Region Could Solar Power World
Middle Eastern and North African countries, often referred to under the umbrella term MENA countries, have the potential to create more than 3 times the world’s power needs, according to a new study reported in the Dubai-based Khaleej Times.
S Korea to start carbon emissions trading late next year
Sir Richard Branson: ‘we need a low-carbon world capable of growth, otherwise society will fall apart’
By Rowena Mason
With a certain sense of irony, the billionaire part-owner of five airlines has just jetted into Copenhagen, battleground of the international climate change talks, to warn fellow business leaders, politicians and campaigners about this apocalyptic scenario.
Pay for that big carbon footprint
UPS joins others offering customers ways to offset pollution
By James Bruggers
Airline passengers concerned about the environmental impact of their jetting around have found more options in the last three years to shrink their “carbon footprint.” Now, United Parcel Service, with its international air cargo hub in Louisville, is giving its shipping customers something similar for packages sent throughout the United States.
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
[CBOE] 3:00 p.m. Close on Last Day of Trading for Expiring QIXs
[CBOE] 2010 Liquidity Provider Transaction Fee Sliding Scale, 2010 Firm Proprietary Transaction Fee Sliding Scale and 2010 Fee Changes
Revised: New Year’s Holiday Clearing Schedule-Friday, January 1, 2010.
Banks, Brokers & Dark Pools
Goldman Denies Betting Against Clients
Goldman Sachs has published a response to a recent New York Times story that the firm profited by betting against certain clients.
Swiss bank secrecy emerges from 2009 with holes
GENEVA (AFP) – Switzerland’s finance minister acknowledges that he had a rough time this year after the Swiss bowed to international pressure on banking secrecy under the onslaught of US lawsuits and a crackdown on tax evasion.
Lehman Brothers wants one of its own to handle securities sale
Lehman Brothers, the investment bank liquidating itself in bankruptcy, asked a judge to let it hire its Neuberger Berman money management unit to sell $US180 million ($203 million) in asset-backed securities, says a court filing.
Deal over Lehman Brothers’ UK debts moves closer
The Lehman Brothers’ UK adminstration plan, which will return more than $11bn (£7bn) of assets to hedge funds that lost out when the US bank collapsed last year, looks set to be agreed.
Restaurateurs Slam U.K. Banks on Tight Lending as Diners Return
By Richard Vines
Dec. 25 (Bloomberg) — London restaurateurs are not optimistic they can get financing from banks for new eateries, even though they have fared better in the recession than they expected, said Richard Corrigan, owner of Corrigan’s Mayfair.
As Goldman Sachs thrives, is an ethos fading?
Recently, Lloyd Blankfein hosted a reunion of one of the most elite clubs in American finance: former partners of Goldman Sachs, the Wall Street giant he has led, with controversial success, since 2006.
Pali Capital Names Tim Strazzini Head Of Derivatives
NEW YORK — Pali Capital, Inc., an independent global financial services firm, announced today that Tim Strazzini has been named Head of Derivatives. Mr. Strazzini, who has served as Pali’s Head of U.S. Equity Strategic Sales for the past three years, has extensive experience in the derivatives space, first at Susquehanna and then at Merrill Lynch. Mr. Strazzini replaces Richard Anthony who resigned from the firm.
Aiful Credit Swaps Ruling May Come Next Week After UBS Request
Dec. 26 (Bloomberg) — UBS AG’s request for a ruling on credit contracts linked to Aiful Corp. was accepted by an international group governing swaps and derivatives, paving the way for debt holders of the Japanese company to get repaid.
RBS Could Sell $4.8B of Foreign Assets
Royal Bank of Scotland (RBS Quote) is planning 3 billion pounds ($4.8 billion) worth of asset sales in the new year, with its Asian operations likely to secure a buyer before the end of the year, the Observer reported Sunday.
Aberdeen eyes RBS asset business – sources
Cecilia Valente and Douwe Miedema
Aberdeen Asset Management is interested in buying the funds arm of Royal Bank of Scotland , two sources familiar with the situation said, in a deal worth up to 100 million pounds.
Morgan Stanley Sees 5.5% Note as U.S. Faces Deficits (Update2)
By Oliver Biggadike and Daniel Kruger
Dec. 28 (Bloomberg) — If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.
Banks getting bum rap on lending, some say
By Bernard Condon and Stevenson Jacobs
Unlike big-city bankers, Stan Wilmoth didn’t make lots of dumb loans during the boom. After the crash, he accepted not a dime of taxpayer money for his bank. His salary? “Substantially less” than the $1 million the former head of Merrill Lynch spent remodeling his office, he says. He credits his grandfather, a Protestant minister, with giving him “moral fiber.” But judging from the rhetoric coming out of the Obama administration, Wilmoth, the folksy 58-year-old president of Heritage Bank of Reno, Nev., should be scorned, not praised. His sin? He’s shirking his patriotic duty by not lending enough money to his community.
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.
Ponzi payoff probe
Billionaire R. Allen Stanford may not be going anywhere for a while. The jailed accused fraudster — who last week was denied a request to be released, in which he cited symptoms of a nervous breakdown — is under investigation by the.
UBS whistleblower seeks prison postponement
MIAMI (Reuters) – A key informant in the U.S. tax evasion case against Swiss bank UBS AG has asked a federal court in Florida to postpone the scheduled January 8 start of his prison term so that he can cooperate further with the U.S. government to uncover tax cheats.
JPMorgan, BNP Paribas Sue K1 Invest, Kiener, Say They Lost $152 Million
JPMorgan Chase & Co. and BNP Paribas sued K1 Invest Ltd. and K1 Group founder Helmut Kiener, claiming they lost money through a “fraudulent circular investment scheme” conducted by K1 and its affiliates.
FSA publishes Newsletter No.81
Investments – Indexes – Managed Futures – Managed Funds
New Hedge Funds Start to Emerge
Investors’ appetite for hedge-fund start-ups is returning, but some managers are raising smaller amounts and granting concessions.
2010 set to be year of indices trading
Index products like fixed-income, volatility and weather to broaden basket for hedging.
A fixed-income index, a volatility index (VIX) and indices of commodities and weather (rainfall, temperature and moisture) will be available for trading from 2010.
Hedge fund chiefs’ pay boost after stellar year
By Louise Armitstead
Hedge funds, many of which only narrowly survived the financial crisis of 2008, have over the past 12 months generated stellar returns that will convert to multi-million pound rewards for their star managers.
Brazil’s Top Hedge Funds Dump Homebuilders on Interest-Rate Rise Concerns
JGP SA and Polo Capital Gestao de Fundos Ltda., two of Brazil’s best-performing hedge funds, are paring holdings of homebuilders on concern higher interest rates next year may weaken the industry after shares rose 196 percent.
Macquarie Group to Acquire Wholesale Electric Marketing and Trading Portfolio from Integrys Energy Services
Most Profitable CEOs Get Smallest Gains in S&P 500 (Update2)
By Alexis Xydias
Dec. 28 (Bloomberg) — Brown-Forman Corp.’s Paul Varga and Johnson & Johnson’s William Weldon are among chief executive officers left behind in the 2009 stock-market rebound even after they created the most value for their companies.
Soft commodities prices at historic highs
Rise set to send retail prices higher
Ken Kam On Asset Allocation
The memory of getting burned badly in stocks is receding, but systematic risks still lurk and could bite the unprotected.
Out with the Aughts: ‘D’ is for death
Peter J. Thompson
One day you will die. This is sad. It is also an investment opportunity.
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.
ASEAN, Japan, China Form $120 Billion Reserve Pool (Update1)
By Aki Ito and David Yong
Dec. 28 (Bloomberg) — The Association of Southeast Asian Nations, together with Japan, China, and South Korea, signed an agreement to create a $120 billion foreign-currency reserve pool.
Renminbi set to replace US dollar for trade in Asia Pacific
‘Hot Money’ Adds to China Asset Volatility, Fan Says (Update1)
Beijing stuck with a fistful of dollars
In the second of a three part series, Satyajit Das explores the unstable co-dependency of the Chinese and US economies.
Nathaniel Rothschild Said to Be Rusal IPO Investor (Update1)
By Simon Casey, Bei Hu and Maria Kolesnikova
Dec. 28 (Bloomberg) — Nathaniel Rothschild’s private investment company may buy shares in United Co. Rusal’s $2 billion Hong Kong initial public offering, said three people familiar with the plan.
In Southeast Asia, Unease Over Free Trade Zone
By LIZ GOOCH
KUALA LUMPUR — When the clock strikes midnight on New Year’s Eve, China and 10 Southeast Asian nations will usher in the world’s third-largest free trade area. While many industries are eager for tariffs to fall on everything from textiles and rubber to vegetable oils and steel, a few are nervously waiting to see whether the agreement will mean boom or bust for their businesses.
Thailand should watch out for the year of the tiger
The year 2009 has been a nightmare for bankers even though the financial markets have been rebounding since March in the aftermath of the collapse of Lehman Brothers. Thailand, meanwhile, has suffered few deep wounds from the global crisis because local banks and corporations had learned difficult lessons in 1997.
Tokyo Stock Exchange: Revisions To The Index Guidebook Regarding Stock-Swaps And Absorption-Type Mergers
HKEx Announces Temporary Holiday Risk Management Arrangements
How emerging markets came out on top in 2009
Investor sentiment this year was dominated by fear for the first three months, but March saw the nadir of this emotion and greed was back in charge. World markets have rallied since these lows, but by far the best investment has been in emerging markets. This is partly because they suffered from a stronger sell-off in 2008, but it is also down to the fact that these economies will return to growth faster than Europe and the US.
Taking Financial Markets to the Masses
The topic means different things to different people—to some, it means financial inclusion and reaching basic banking services to every Indian. To others, it means using technology and microfinance to either provide or improve livelihoods across the country. To those in the capital market, it is the need to increase India’s investor population by eliminating fear and distrust, now that technology has created the capacity to expand reach. All this was reflected in the views of the panelists.
Kuwait’s Global Distressed Fund ranked among top ten worldwide
Global Investment House (Global) announced on Monday that the Global Distressed Fund was ranked within the top ten funds in the world by Eurekahedge and BarclayHedge.
Trading would help investment in electricity
The Dubai shock: What to learn from our previous bubbles
By TERUHIKO MANO
With one real estate megaproject after another, including an man-made resort island shaped like a coconut tree and the world’s tallest skyscraper, Dubai has been aiming to turn the tiny emirate into the financial center of the Middle East.
Kuwait Turkish Participation Bank (Dubai) Limited Joins The DIFC – Bank To Provide Full Range Of Islamic Finance Banking Services Out Of DIFC
Kuwait Turkish Participation Bank (Dubai) Limited has received a licence from the Dubai Financial Services Authority (DFSA) to provide a full range of Islamic finance banking services out of the Dubai International Financial Centre (DIFC).
The Indian Stock Market 101
by Manoj Singh
Mark Twain once divided the world into two kinds of people – those who have seen the famous Indian monument the Taj Mahal, and those who haven’t. The same could be said about investors. There are two kinds of investors – those who know about the investment opportunities in India and those who don’t. India may look like a small dot to someone in the U.S., but upon closer inspection, you will find the same things you would expect from any promising market.
Bahrain bourse to become shareholding firm
Bahrain Stock Exchange (BSE) has been given the green light to operate as a shareholding company, to be regulated within six months, Gulf Daily News reported.