Investors seeking less correlation to increasingly lumpy markets are in some cases casting a favorable eye toward real-commodity investments. The SEC points to muni bonds as a place that could use a hosing down and rule restructure. In an unexpected turn, an MF Global bankruptcy trustee says that ex-clients of the ex-firm may actually get all their money back… maybe.
Analysis: This time its different
Galen Stops – FOW
Things are looking pretty glum for exchange traded derivatives right now. The scandal at Peregrine Financial Group this month came just nine months after the collapse of MF Global and at a time when volumes on most Western exchanges are falling in the face of continued economic and regulatory uncertainty.
**JK – Good analysis of what ails the industry.
CME Group Launches Instant Messaging Platform for Energy Trading Community
CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of CME Direct Messenger, a sophisticated instant messaging platform for traders in the energy markets. CME Direct Messenger will be powered by market-leading instant messaging software developed by Pivot, Inc., which was recently acquired by CME Group.
**JK – CME’s answer to ICE Chat, formerly, YellowJacket.
Hope for MF Global Clients
DEVLIN BARRETT AND AARON LUCCHETTI – WSJ
A bankruptcy trustee sifting through the remains of MF Global Holdings Ltd. expressed confidence that the failed securities firm’s U.S. customers will get all their money back.
**JK – By the way, James Giddens does not share this view, at this time.
Wasendorf Son Subpoenaed in Peregrine Case
JACOB BUNGE AND SCOTT PATTERSON – WSJ.com
Russell Wasendorf Jr., president of Peregrine Financial Group Inc., has been subpoenaed to appear before a federal grand jury examining the alleged wrongdoing that led to the brokerage’s collapse.
**JK – What do you know, Junior?
Three Answers to the Euro Puzzle
Most people have heard of the Marshall Plan. Some might even know what Brady bonds are. But they have not yet heard of the Brunnermeier plan. Or Bishop bonds. Or the Gros accord. That is because they do not exist yet — except as dreamy proposals by economic thinkers to fix the European debt crisis.
Why Investors Willingly Pay Speed Traders Extra Billions
Long-term investors usually get crowded out of the most heavily traded stocks by super-fast speed traders who jump in front of them
Brace for an era of crisis aftershocks
David Rosenberg – FT.com
Here is the reality. We have intense uncertainty on US fiscal, energy and health policies. Nobody knows what their effective tax rate is going to be next year so they cannot plan. When you model that uncertainty in economic terms, you end up with higher liquidity ratios in business and rising savings rates in the personal sector. This damps spending growth and spending is what GDP is all about.
Bill Gross Is Latest to Join ‘Stocks Are Dead’ Club
CNBC via Yahoo! Finance
Stocks will no longer generate the kinds of returns they’ve had over the past century, ending the “cult of equity” that has been Wall Street’s mantra for generations, Bill Gross, managing director at bond giant Pimco, says in his monthly market analysis.
**JK – Interesting view, coming from a bond guy.
NYSE Euronext’s Joe Mecane Discusses Their New Retail Liquidity Program
Joe Mecane is executive vice president and co-head of U.S. listing and cash execution at NYSE Euronext. He spoke with JLN senior editor Sarah Rudolph from the floor of the NYSE about the exchange’s new Retail Liquidity Program, which is set to launch on August 1, 2012.
The new program is designed to attract retail traders by offering them better price improvement than the National Best Bid and Offer (NBBO). Orders placed through the program would interact with non-displayed retail price improvement orders provided by retail liquidity providers.
For Currencies And Commodities, It’s All About The Fed, ECB And Bank Of England This Week
A troika of central bank gatherings this week is garnering keen anticipation from the raw commodity and currency futures markets. The Federal Reserve?s Federal Open Market Committee meeting kicks off the central bank confabs by getting underway Tuesday morning and concluding Wednesday afternoon. The European Central Bank and Bank of England central bank meetings conclude on Thursday, including a key press conference held by ECB chief Mario Draghi after the meeting.
**DA: Apparently, if things get so bad that the government needs to intervene again, that is a bullish signal. Pardon my skepticism.
IMF Predicts Euro Crisis Resolution Will Be Prolonged
The International Monetary Fund said today that the euro-area debt crisis has “exacerbated global financial instability and an orderly adjustment process is likely to be prolonged and costly.
**DA: Hey, Dick Tracy! What was your first clue?
Eurozone Crisis: And Now France’s Central Bank Is About To Go Bust
Or at least France’s central bank will go bust if the latest plan to deal with the disaster that is Greece goes through. Intensive discussions now under way among EU policy-makers involve the European Central Bank and a number of central banks taking a significant write-down on their Greek bonds as the price for avoiding a eurozone break-up and losing its weakest link.
**DA: Shuffling one’s losses onto the books of another entity does not make them go away. Every loss has consequences.
MarketsWiki Page of the Day
Scott A. Russo
MarketsWiki Recent Updates
Companies, Organizations and Groups
26,819,964 pages viewed, 7,013 articles, 145,532 edits
Peregrine Trustee Seeks to Subpoena Banks on Transfers
The trustee liquidating Peregrine Financial Group Inc. asked a judge for authority to subpoena the defunct futures brokerage’s banks including JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C) for information about transfers from segregated accounts and proprietary accounts.
Commodity niches lure as markets converge
Eric Onstad – Reuters
As commodity indices increasingly track other markets, investors are targeting niches including timber and other real assets, over the counter (OTC) energy products as well as agriculture markets with more insulation from macro-economic events.
S.E.C. Urges Reforms of Municipal Bond Market
New York Times
The Securities and Exchange Commission said the market was “illiquid and opaque” and that issuers should provide information that investors receive in other financial markets.
Equity hedge funds brave eurozone storm
By Sam Jones – Financial Times
It is hardly the most electrifying of hedge fund strategies: keep calm and carry on. But amid the sometimes violent, sentiment-driven movement of equity markets, there have been signs this year that for some hedge fund managers – those content to keep their heads down and soldier through the macro headwinds and unfolding eurozone debt crisis – money is there to be made in stocks.
Deutsche Bank CEO says profits nearing grim scenario
Reuters via Yahoo! News
Deutsche Bank co-chief Anshu Jain said investment banking profitability had deteriorated as he explained the need for 1,900 job cuts at the flagship lender hit by the euro zone crisis.
UBS’s huge Facebook loss throws doubt on Nasdaq plan
Reuters via Yahoo! News
Facebook’s disastrous May IPO took on a new dimension on Tuesday, as Swiss bank UBS said it lost more than $350 million on botched order execution and would take legal action against Nasdaq for the exchange’s alleged failures.
Deutsche Bank says staff took part in Libor scam
AFP via Yahoo! News
Deutsche Bank, Germany’s biggest lender, confirmed for the first time Tuesday that a “limited number” of its employees had been involved in the Libor interest-rate rigging scandal.
SEC Shows Abject Incompetence in Toxic CDO Case Against Citi Staffer
The verdict is in: nearly 20 years of keeping the SEC budget starved and cowed have rendered a once competent and feared agency incapable of doing more than winning cases on illegal parking, um, insider trading. The SEC’s performance in the case at issue, SEC v. Stoker, was such a total fail that the odds are high that any motivated member of the top half of the NC readership would have done a better job of arguing this case pro se than the SEC did.
SEC Recommends Improvements to Help Investors in Municipal Securities Market
The Securities and Exchange Commission today issued a comprehensive report with recommendations to help improve the structure of the $3.7 trillion municipal securities market and enhance the disclosures provided to investors.
Confirmation.com Selected as a Panelist at the CFTC Public Meeting on Restoring Investor Confidence in the Futures Markets
In a public meeting held last Thursday by the Commodity Futures Trading Commission’s Technology Advisory Committee , Chris Schellhorn, CEO of Confirmation.com, presented a proposed solution that addresses the issues recently surfaced from the $200 million Peregrine Financial Group fraud.
NFA Investor Newsletter
FINRA offers 6 tips to spot investment scams
Seniors should beware when navigating perilous social media waters
Investor alert highlights features and perils of exchange-traded notes
Recent Enforcement Actions
Speech By SEC Commissioner: Remarks On News Conference Call About The SEC’s Report On The Municipal Securities Market By SEC Commissioner Elisse B. Walter
SEC: Remarks At Society Of Corporate Secretaries & Governance Professionals, 66th National Conference On “The Shape Of Things To Come”
BCSC Executive Director’s Bulletin: Securities regulator issues notice of hearing alleging life insurance agent committed fraud
SIFMA Statement On SEC Report On Municipal Securities Market
ISDA: Response To The Third FSB Progress Report On Implementation Of OTC Derivatives Market Reforms
ISDA: Letter On EMIR Concerns Regarding Timing And Scope Of Application Of Obligations Of Clearing Members Of CCPs, To EC Internal Market And Services, EBA And ESMA
Exchanges & Trading Facilities
Moscow Exchange picks new derivatives head
Tom Osborn – Financial News
Russia’s largest exchange operator has named the former head of futures trading at Deutsche Bank’s Moscow office as the new head of its derivatives market.
TMX Deal Puts Canada Finance Firms in Charge of Exchange
Some of Canada’s biggest financial institutions are poised to own the country’s main stock exchanges, derivatives bourse and securities clearing house after sealing a C$3.73 billion takeover of the Toronto Stock Exchange owner.
CBOE Holdings, Inc. Board Increases Quarterly Dividend; Extends Share Repurchase Program
CBOE Holdings, Inc. today announced that its Board of Directors approved a 25-percent increase to its quarterly cash dividend to $0.15 per share from $0.12 per share and authorized the company to repurchase an additional $100 million of its outstanding unrestricted common stock.
Maple And TMX Group Announce Take Up Under Maple Offer; All Conditions to Maple Offer Have Been Satisfied
Aggregated Market Shares In Finland, July 2012 – Burgundy And Nasdaq OMX
Aggregated Market Shares In Sweden, July 2012 – Burgundy And Nasdaq OMX
Boerse Stuttgart Welcomes Draft Law To Control High-Frequency Trading Precise Definitions Needed For Different Investor Groups
[LSE] Three new issuers raise £275m on retail bond market in July
Changes to Market-Makers’ Continuous Quoting Obligations in Hybrid Classes Effective August 6, 2012
August 2012 Fee Changes
Bermuda Stock Exchange Will Be Closed For Bermuda ‘Cup Match’ Public Holidays
Toronto Stock Exchange, TSX Venture Exchange, TMX Select And Montreal Exchange Closed For Civic Holiday
Athens Exchange: Market Operations Committee Decision
Hedge Funds & Managed Futures
Hedge Funds Getting Burned in Offshore Insurance: Street Whispers
TheStreet.com via Yahoo! Finance
John Paulson’s newest foray into reinsurance is off to a poor start, after falling roughly 10% in the second quarter.
Credit funds get boost from JP Morgan loss: survey
Reuters via Yahoo! News
The type of hedge funds that bet against JP Morgan and made money from its $5.8 billion “London Whale” trading loss has risen to the top of investors’ buying lists for the coming quarter, a survey showed.
Exodus from Cargill’s Singapore operation
Alex Davis – Risk.net
Global agricultural trading firm Cargill’s entire Asia trading team for palm and vegetable oils has left the group’s Singapore-based subsidiary, Cargill International Trading, according to industry sources.
Markit expanding OIS capability for derivatives valuations
Markit, a leading, global financial information services company, today announced its Portfolio Valuations service has enhanced its overnight indexed swap (OIS) discounting methodologies to allow for more accurate valuations of collateralised and uncollateralised trades.
Thomson Reuters says Europe business worse than expected
Reuters via Yahoo! News
Thomson Reuters Corp said it expects net sales to financial institutions to continue to decline for the rest of this year as conditions in Europe have deteriorated more than anticipated and major banks are still slashing costs.
Thomson Reuters Reports Second-Quarter 2012 Results
Behringer Harvard and Prospect Capital Management Announce Joint Venture to Launch Alternative Investment Programs
Behringer Harvard Holdings LLC and Prospect Capital Management LLC announced today the launch of their joint venture targeting the development, management, and distribution of alternative investment programs.
F-Squared Investments to Sub-Advise New Series of Target Risk Retirement Funds Designed to Provide Downside Tail Risk Protection
F-Squared Investments today announced that it will serve as sub-advisor on the newly launched Reliance Trust AlphaSector Target Risk Collective Trust Funds.
Why Hedge Funds Are Going Mainstream
Hedge funds have been reserved mainly for wealthy investors and institutional investors, but as average investors look for profits, 13 percent of retail revenues come from alternative investments.
The Hedge Fund Manger That Helped JP Morgan Unwind The Whale Trade Is Finally Talking About What Happened
Now that the smoke is clearing, we’re finally getting a sense of what was happening as JP Morgan scrambled to unwind the $2 billion trading lost discovered in its London Chief Investment Office.
Banks & Brokers
DeCarley Trading has joined Zaner Group
Tullett sees challenging outlook as profits fall
Tullett Prebon (TLPR.L) said it does not expect much improvement in the next six months as a sluggish global economy and euro zone debt crisis inevitably reduced trading volumes resulting in a 7 percent fall in its first-half profit.
Societe Generale Profit Falls 42% on Weak Economy
The French bank Société Générale said on Wednesday that its second-quarter profit slumped 42 percent from a year earlier after it wrote down the value of two poorly performing units in the United States and Russia and signaled further problems at a subsidiary in Greece as the economy there continued to plunge.
GAIN Capital Reports 2012 Second Quarter Results
GAIN Capital Holdings, Inc., a leading global provider of online trading services, reported net income of $4.4 million, or $0.11 per share, and adjusted net income of $5.0 million, or $0.13 per share, for the second quarter ended June 30, 2012, on net revenue of $45.7 million.
Concept Capital Markets, LLC adds to its institutional sales team
Concept Capital Markets, LLC has hired a team of seasoned sales professionals to complement its existing institutional sales and trading effort. Joining the firm are Edwin Leon, Scott Klym, Francis Fiolek, Michael Sepe and Peter Walsh. The team will operate from Concept Capital’s office in Greenwich, CT.
FUTURES INTERNATIONAL Announces addition of director of INSTITUTIONAL BUSINESS DEVELOPMENT, Mark Metzger
Futures International, a subsidiary of independent interdealer broker OTC Global Holdings (OTCGH), announced today the addition of Mark Metzger as director of institutional business development. Metzger is an agricultural commodities trading veteran with nearly four decades of experience in a dozen domestic and international markets.
Thomson Reuters And FX Alliance Inc. (FXall) Announce Expiration Of Hart-Scott-Rodino Act Waiting Period Relating To Tender Offer For Shares Of FXall
Clearing & Settlement
Creditors should face clearing failure hit
Philip Stafford – FT.com
Creditors of clearing houses facing collapse should accept losses rather than demand full contractual repayments from default funds, global regulators proposed on Tuesday.
Clearing houses told to get “living wills” ready
By Huw Jones – Reuters
Clearing houses must plan for an orderly rescue and even their own demise to prevent their growing importance in the financial system from becoming a source of market disruption when things go wrong, global regulators said on Tuesday.
Omgeo and YSS Tech Partner to Increase Post-Trade Automation in Investment Management Firms in China
Omgeo, the global standard for post-trade efficiency, today announced that it has signed a partnership agreement with Shenzen YSS Tech Info-tech Co, a leading provider of financial technology to China’s financial services industry, in order to bring increased levels of automation to international equity and fixed income trade processing for Chinese investment managers.
BayernLB Starts Clearing OTC Interest Rate Swaps
Indexes & Products
FTSE Announces The Launch Of The FTSE Global Minimum Variance Index Series
20 Companies In The Warsaw Stock Exchange RESPECT Index
iForex Introduces the DAX 30 Index into Its Tradable Products
Fidessa growth hit by broking restructuring
Philip Stafford – FT.com
It has been a tough first half for Fidessa. While interim sales rose 2 per cent, consolidation and restructuring among its broking and institutional customers sliced 7 percentage points off growth rate.
SunGard Announces Second Quarter 2012 Results
Business Wire via Yahoo! Finance
SunGard, one of the world’s leading software and technology services companies, today reported results for the second quarter ended June 30, 2012. For the second quarter, revenue was $1.08 billion, down 4% year over year .
BGC Partners And Thesys Technologies Form Epsilon Networks To Create The Fastest High-speed Microwave Financial Information Network
BGC Partners, Inc., a leading global brokerage company servicing the wholesale financial and property markets, today announced it has signed an agreement with Thesys Technologies, to invest in the creation of high-speed microwave data networks for the financial community, starting with the fastest route between Illinois and New Jersey, designed to transmit critical trading data related to the futures, equities, fixed income and other markets, between the Chicago Mercantile Exchange, NASDAQ, BGC and ELX Futures data centers.
AlgoSpan launches Borsa Italiana IDEM connectivity and market data
AlgoSpan has announced that Borsa Italiana has accredited its low latency market access services for connectivity to the Italian Derivatives Exchange Market (IDEM).
SunGard Named a Category Leader in Chartis Research’s RiskTech Quadrant for Basel III Solutions
Chartis, a research and advisory firm that provides technology and business advice to the global risk management industry, analyzed a range of Basel III solutions for their completeness and market potential. SunGard’s Adaptiv and Ambit solutions for on-and-off-balance sheet risk management scored highly in both dimensions.
FINRA Expels Biremis, Corp. and Bars President and CEO Peter Beck
The Financial Industry Regulatory Authority (FINRA) announced today that it has expelled Biremis, Corp., formerly known as Swift Trade Securities USA, Inc., and barred its President and Chief Executive Officer, Peter Beck, for supervisory violations related to detecting and preventing manipulative trading activities such as “layering,” short sale violations, failure to implement an adequate anti-money laundering program, and financial, operational and numerous other securities law violations.
DealBook: Ex-Citigroup Manager Cleared in Suit
New York Times
The Securities and Exchange Commission lost its lawsuit against Brian Stoker, who was accused of negligence in preparing sales materials for a complex mortgage-related investment.
Environmental & Energy
What’s the long-term impact of the EU’s carbon market crisis?
The European Union’s new plan to shore up its Emissions Trading Scheme (ETS) following a plunge in carbon prices underscores just how volatile – and vulnerable – the carbon emissions trading market has become.
Preview of the EU Emissions Trading System Meeting
US State Department Special Briefing Transcript
Hi, folks. It’s [Moderator]. I’m sorry for the late notification for the call. We’ve been getting a couple of inquiries on ETS, and we have for you today [Senior Administration Official]. The ground rules for the call are we’re going to do this on background, attributable to a Senior Administration Official. There will be a time for a few questions before [Senior Administration Official] has to leave, but with that I will turn it over to [Senior Administration Official].
Senate panel votes to shield U.S. airlines from EU fees
A Senate panel voted Tuesday to prevent U.S. airlines from paying billions in fees to Europe for the emissions from their planes.
Asia’s Manufacturers Falter Amid Global Slowdown
MARTIN VAUGHAN – WSJ.com
A slowdown in China’s manufacturing sector in July added to a broader ramp-down in the region, as slack demand in Europe and the U.S. continued to erode growth in Asia’s export-driven economies.
The Asian Economy’s ‘Canary In The Coal Mine’ Just Got Crushed
Goldman Sachs considers Korean trade data to be Asia’s ” canary in the coal mine ” due to its high correlation to economic activity in mainland Asia. Unfortunately, the canary is looking sick.
TSE : Statement by President & CEO in response to the draft outline of amendments to the Companies Act
Today, the Ministry of Justice released the draft outline of amendments to the Companies Act (hereafter the “draft outline of amendments”). We would like to welcome the fact that a certain consensus was reached as a result of rigorous discussions involving concerned parties and knowledgeable persons including those from the business community.
[TFX] Trading Volume in July 2012
[OSE] Trading Overview in July 2012
Tokyo Grain Exchange Monthly Trading Report July 2012
[TSE] Reduction in Trading Fee pertaining to Individual Securities Options Trading
Jeff Singer Completes Successful Four Years As CEO Of NASDAQ Dubai To Take Up New Position At DIFC Authority – Hamed Ali Is Appointed Chief Operating Officer
NASDAQ Dubai today announced that Jeff Singer has stepped down as Chief Executive after four successful years at the region’s international exchange. Mr. Singer takes up the position of Chief Executive of the Dubai International Financial Centre (DIFC) Authority, which operates the onshore financial centre in which NASDAQ Dubai is located, effective August 1, 2012.
DIFC Authority Reorganises Into Two Independent Entities To Prepare For Next Phase Of Growth
Saudi Stock Exchange (Tadawul) Monthly Statistical Report – July 2012