By John J. Lothian

A year ago at this time,  John J. Lothian & Company, Inc. was showing people something that we were working on behind the curtain; MarketsReformWiki.

We showed people the site and what we had, what we hoped to have and what we thought we needed.  On February 28, we will celebrate the one year anniversary of the launch of this global regulatory reform online tool.  The pressing question in the office is whether we will reach 1 million page views in the first year.  We just passed 900K this week.

On Your Calendar
Jim Kharouf, editor-in-chief

A little over a month ago, I asked an exchange executive about falling volumes in the options space, to which he said. “January is going to tell us a lot.”

January’s message to the options industry wasn’t kind. Most exchanges are reporting lower volumes for the month. Some may call it an off month, but given a host of events that have hit the financial markets – futures, options, stocks and currencies – January may be a harbinger for a rough 2012.

CNBC’s Bob Pisani wrote a good story about equity market volume drops and its causes. He pointed out that too much Eurozone uncertainty, less proprietary volume and lower volatility were to blame. In the futures industry, there are three elements to point fingers at as well – Eurozone uncertainty which is like an oft repeated bad joke, regulatory uncertainty and its ongoing saga of Dodd-Frank rules and finally and arguably the biggest buzz kill of them all – the collapse of MF Global and subsequent mess it has created for the futures industry.

CME Group released the following statement on February 2, 2012:

CME Group Establishes $100M Fund to Provide Additional Protection for Family Farmers and Ranchers
Fund Launched as Initial Step in Restoring Confidence of Market Users
Press Release

CHICAGO, Feb. 2, 2012 /PRNewswire/ — CME Group today announced that it will establish a $100 million fund designed to provide further protection of customer segregated funds for U.S. family farmers and ranchers who hedge their business in CME Group futures markets.  In light of the recent MF Global failure, in which a clearing firm violated CFTC regulations and misused customer monies that should have been kept segregated, CME Group is adding this extra security measure to protect the country’s food producers who are using CME Group futures markets to hedge their crops and livestock that feed the world.

Who wants to be a Millionaire?

By John J. Lothian

In the television game show “Who Wants to be a Millionaire,” contestants have 4 choices on how to answer the questions.  They can answer themselves, or if they don’t know the answer, they can use one of three lifelines to try to come up with the answer.

There are three types of lifelines that were used when I watched the Regis Philbin US version of the show: 50/50, Phone a Friend and Poll the Audience.

Each one of these lifelines has a unique approach to problem solving.  50/50 is purely probability based.  You get the increased probability of being successful by having 2 of the 4 answers removed from the choices.

The NFA released the following statement on January 18:

Futures industry self-regulatory organizations form joint committee to address customer segregation issues

CME Group and National Futures Association (NFA) today announced, in conjunction with the InterContinental Exchange (ICE), the Kansas City Board of Trade (KCBOT) and the Minneapolis Grain Exchange (MGEX), the formation of a joint committee to review how self-regulatory organizations can strengthen current safeguards for customer segregated funds held at the firm level in light of the MF Global bankruptcy.

Louis J. Freeh, Chapter 11 trustee of MF Global Holdings Ltd., filed the list January 3rd. JPMorgan Chase tops the list with over $1.2 billion in revolving credit facilit7 debt. Other financial institutions include Wilmington Trust, Banco Monex, UBS and Citibank.

Curiously, the global IT consulting firm Headstrong Services, LLC is owed almost $4 million in trade payable debt, good enough for number five on the list.

Click here for the entire court document (PDF).

Director of Sales
John Lothian News
Chicago, IL

The title is the only boring thing about this job. We’re looking for someone who can do a bunch of things at once – marketing, sales, networking, and developing ideas that make this company different from any other media firm.

The main responsibility of the Director of Sales is to plan and implement sales and marketing activities in order to retain existing sponsors, develop new sponsors for existing products and find sponsors for new products. That said, a unique skill set can take this position in almost any direction.

The latest news on the MF Global bankruptcy and fallout, published in the John Lothian Newsletter (subscribe here) the morning of December 29, 2011.

In the wake of the MF Global bankruptcy, John Lothian Newsletter has created a special section on JohnLothianNewsletter.com devoted to news, information and commentary. The section features archived news stories featured in the John Lothian Newsletter, analysis and breaking news. Check regularly for updates. See the MF Global news section here.

William Brodsky, chief executive of CBOE Holdings, reflects on a remarkable year for the exchange.
2011 has been a remarkable year for William Brodsky and the Chicago Board Options Exchange with the launch of a new exchange, a market beating share price rise and numerous front page interviews and behind the scenes discussions extolling the benefits of the futures and options industry. However, 2011 will be remembered as the year that the exchange’s Volatility Index, the VIX, came of age. Elise Coroneos caught up with the man at the helm of the US’s largest independent derivatives exchange for his take on a busy year.

• FOW article »
• William Brodsky MarketsWiki page »
• CBOE MarketsWiki page »
• VIX MarketsWiki page »

We’ve created a list of the five most influential stories of 2011 for each of our newsletters, as well as from MarketsReformWiki, to help define what was a very eventful year across almost every market and industry sector.

The year was punctuated by one major story inside another. The bankruptcy of MF Global, which requires its own top five list, became tied to another top story, the European sovereign debt crisis sequel – Greece and Italy.

Of course, the downgrade of U.S. debt in August and assorted European states raised the ire of politicians and regulators who called for more regulation, not just of rating agencies themselves but of speculators, hedge funds and others. Even Paul Volcker made a comeback. It’s the year when Bart Chilton became a swear word among family members of derivatives traders and Gary Gensler was forever linked to the word “recuse.” It’s also a year when Congress’ Super Committee was anything but and when that trend of indecision led gold over $1,900.