Episode Transcript
[00:00:00] Foreign welcome to the John Lothian News Daily Update podcast for January 28, 2025. I am your host, John Lothian. If you're not subscribed to the John Lothian Newsletter, you can do so on johnlothiannews.com follow us on markets, wiki, LinkedIn, Facebook, Instagram and Blue Sky.
[00:00:28] Lets dive in. Here are the hits and takes cabinets from today's JLN There are plenty of stories about Deep Seek in JLN this morning and about Liang Wen Feng, the man behind it. Here's a quick summary description of Liang from a story by Gregory Zuckerman and Rafael Huang of the Wall Street Journal titled Deep Sea Chief's Journey from Math Geek to Global Disruptor. The Chinese engineer built the AI company after founding a successful hedge fund. Liang Wen Feng, the founder and CEO of Deepseek, is a Chinese engineer and entrepreneur whose journey from math Prodigy to Global Disruptor has positioned him as one of the most influential figures in artificial intelligence. Born in 1985 in Zanjiang, China, Liang excelled academically, teaching himself calculus in junior high before attending Zhang University. His passion for math and programming led him to develop AI algorithms to analyze market data, and in 2015 he co founded High Flyer, one of China's largest quantitative hedge funds, managing 8 billion billion.
[00:01:57] Inspired by Jim Simons of Renaissance Technologies, Liang pioneered the use of advanced AI techniques in medium frequency trading, achieving consistent outperformance despite occasional setbacks. Liang's transition into AI began in 2019, culminating in the founding of Deepseek, whose AI Chet bot has rivaled global competitors with remarkable efficiency and scalability. Liang's decision to make DeepSeq's code open source underscores his mission to democratize technology and challenge big tech monopolies. Known for his hands on leadership, Liang often works alongside his team, refining algorithms and tackling challenges. Despite his low profile, deepsea's rapid rise has made waves globally, catching even Silicon Valley off guard. Liang continues to push boundaries, focusing on Deep Seek's next generation AI model while embracing his role as both an innovator and disruptor in the tech world.
[00:03:09] A coalition of financial associations including sifma, mfa, fia, ISDA and others have has urged the SEC to extend the implementation timeline for its clearing rule by at least 12 months. The rule mandates the clearing of cash transactions and repos involving U.S. treasury securities, aiming to enhance market resilience and reduce risk. However, the associations highlight unresolved complexities, including issues around liquidity management, double margining, extraterritorial impact and legal documentation. These hurdles require additional time for market participants, clearing agencies and regulators to ensure an orderly transition without an extension. The associations warn of potential disruptions to the treasury market. The letter emphasizes the significant challenges firms face in building the infrastructure needed for compliance, including upgrading systems, addressing regulatory ambiguities and finalizing done away market structures. They also stress the importance of resolving issues like mixed CUSIP transactions, inter affiliate exemptions and capital requirements to avoid adverse impacts on market liquidity. The associations recommend extending key deadlines, such as the March 31, 2025 implementation date to allow time for necessary adjustments and collaboration among stakeholders supporting the clearing rules goals. They caution that an accelerated timeline could undermine its success and stability.
[00:04:57] Nick Baker, a veteran journalist with Bloomberg and more recently CoinDesk, has written a freelance piece for the Dispatch titled Trump's New Meme Coins Explained the President and first Ladies launch of their own cryptocurrencies has drawn attention and scorn from enthusiasts. Nick, who left CoinDesk amidst the recent editorial purge, does a good, balanced job of explaining the role of crypto and meme coins. He even quoted from JLN and used quotes from me in the finishing flurry of his piece. Sean Feeney has stepped down as head of US options at Nasdaq, he announced on LinkedIn. Guy Mulamid, the co founder and CEO of Exbury, announced on LinkedIn that he is stepping down as CEO of the firm. Registration is open for the FIA Law and Compliance Division Conference 2025. The conference will be April 23rd 25th at the Gaylord National Resort just outside Washington, D.C. here are the headlines from in front of FOW's paywall from some recent stories Former ECB chair Enria takes larger role at bank of England Euronext raises stakes in battle for Nordic power futures analysis Trade bodies wary of European active account reforms New CFTC chair to target conflicts of interest digital assets Euronext to buy Nasdaq Nordic power arm months after EEX bid and DORA raising the bar for operational resilience One of the people who received a pardon from President Trump for their participation in the January 6th attack on the US Capitol. Capitol was shot and killed in Indiana yesterday during a traffic stop when he resisted arrest while armed. The shooting is being investigated. I am just wondering if the J6 pardon crowd, who have other outstanding criminal legal issues, might find themselves confronting less than friendly law officers upset by the pardoning of people who attacked law enforcement personnel at the Capitol. It will be interesting to see if a trend develops between the emboldened J6 pardoned and law enforcement with a chip on their shoulder Our most read stories from our previous edition of JLN Options were Wall Street Options Pro Play It Cool before key Earnings week from Bloomberg Trading Technologies advances data and analytics from Traders Magazine and traders who bought VIX calls last week get protection from Rout from Bloomberg. Subscribe to the free JLN Options newsletter with a link in today's jln. Here are more stories from the First Read section of today's jln. Here's a sponsored content contribution from our friends at jpx the recent upturn in Japanese stocks has drawn attention from domestic and overseas investors. Originally listed in 1997, Japan's single stock stock options market is set for a dynamic revitalization. JSSOs are attracting both domestic and international investors. Together with Nikkei 225 and Topex, derivatives are poised to be an important part of the Japanese equity derivatives markets in 2024. Osaka Exchange has made groundbreaking changes. Revised margin rul and dedicated SSO accounts for lower additional margin requirements for certain trades Expanded the number of eligible underlying assets, including popular stocks favored by retail investors Created an enhanced market making environment for individual stock SSOs improved rules for setting strike prices, making trading more attractive in addition to the existing local and international brokers. With the entry of new brokerage firms, the JSSO market is becoming more accessible to retail investors. This wave of improvements is expected to significantly boost market participation and liquidity. Investors are encouraged to explore the exciting opportunities in Japan's revitalized SSO market, poised for substantial growth and offering diverse investment prospects. Join the momentum and capitalize on the emerging potential of Japan's single stock options market today.
[00:09:57] You can learn more with a link in today's newsletter.
[00:10:02] Here's a video from our FIA Expo coverage. CQG expands global footprint with MyEx, Onyx launch, AI powered trading and South American Growth initiatives CQG is gearing up for the launch of the Miami Futures Exchange launch in early 2025 of its Onyx platform, which CQG lent some expertise to help them develop, ali Brennan, Managing Director, Head of the Americas and emea, told John Lothian News in an interview at FIA Expo in November. Brennan was interviewed alongside CQG Vice President of Execution Technology Kevin Darby. You can watch this video on johnlothiannews.com we also have interviews from Nick Johnson of IMX and Suzanne Sprague of CME Group. You can find them on johnlothiannews.com Here's a message from FIA FIA FIATG Trade Associations Request Extension of U.S. treasury Clearing Mandate FIA, FIA Principal Traders Group and six other financial services trade associations wrote to the SEC requesting an extension of the U.S. treasury clearing mandate. Specifically, the letter requests extensions of at least 12 months for both the cash and repo clearing mandates, currently 31 December 2025 and 30 June 2026 respectively. The letter also encourages the SEC to maintain the 31 March 2025 deadline for FICC required access and risk management changes while allowing impacted FICC members additional time to comply.
[00:12:06] There's a link with a copy of the letter with footnotes in today's newsletter and then here's the story from Nick Baker Trump's new meme Coins explain the President and First Lady's launch of their own cryptocurrencies has drawn attention and scorn from enthusiasts. Cryptocurrencies were created as a way to make payments built atop an innovative ledger technology known as blockchain. After existing for a decade and a half, they have largely not achieved their goal of upending how money moves around the globe. However, they have become a hot asset class for investors to stash money and encompass a whole lot of territory beyond that well known turf and stir befuddlement for most everyone besides true believers in the digital assets as they move closer to the mainstream with major financial firms adopting them and a friendly administration taking control of the White House this month. Outlining the differences among types of cryptocurrencies can shed light on what makes them popular and risky.
[00:13:18] You might remember Nick from my interview with him. Nick Baker's big, interesting and weird stories at CoinDesk turn consequential with FTX scoops and CoinDesk comprehensive coverage.
[00:13:33] There's a video interview attached.
[00:13:36] Here are the top three stories from Monday's gln. Our top story on Monday was Bloomberg's the Three Forces Shifting the Investment Landscape, an opinion piece by Mohammed A. El Arian. Second was another publicly traded firm stockpiling bitcoin from decryption. Third was Spain warns far right is exploiting anger over climate Disasters from the Financial Times Here are the top three stories from the Lead section of today's jln. The first is a press release from Euronext. Euronext to acquire Nasdaq's Nordic Powers futures business, Euronext, the leading European capital market infrastructure, and nasdaq, a leading transit company. Atlantic market operator and global technology company today announced the signing of a binding agreement under which Euronext will acquire Nasdaq's Nordic Power futures business subject to receipt of applicable regulatory approvals. The agreement entails the transfer of existing open positions in Nasdaq's Nordic Power derivatives currently held in Nasdaq Clearing to Euronext Clearing with approval of the members. Trading of Power Futures will be operated from Euronext Amsterdam and will be cleared through Euronext Clearing.
[00:15:05] Here's another story, this one from the Financial Times. The headline Memecoin ETF filings sparked concerns over casino type speculation. Proposed funds are among multiple cryptocurrency ETFs filed in wake of Trump's victory. Three US asset managers are preparing to launch exchange traded funds investing in so called meme coins linked to US President Donald Trump and his acolyte Elon Musk. The proposed funds are among a flurry of exotic cryptocurrency ETFs that could be unleashed in the US in the wake of Trump's election victory. The latest filings are likely to prove controversial though, given that meme coins are a particular kind of digital asset that has no cash flow, business model or practical use underpinning their valuations. And then here's one more story, this one from the Financial Times. The headline Judgment Day for the AI Rally Machine God has forsaken the US Stock Market.
[00:16:16] Here's a parable A powerful king decided he wanted to make a machine God that would be omniscient and omnipotent. After lots of experimentation, the king started to make progress. Miracles started to occur. People feared that this machine God would be unmerciful and make humanity irrelevant or possibly end all life entirely. The early successes only made the king more radical, however, and fueled his obsession. Huge amounts of time, energy and ideals were sacrificed in hopes of the wealth and prosperity the machine God could bring. Another king nearby was working on a machine God of his own, but he decided omniscient and omnipotence weren't his goal. Instead, he wanted to make a lesser deity that could perform miracles that would be similar to machine God but without its ravenous hunger for sacrifice. Once the lesser deity was unveiled, the machine God's people were very displeased. Why, they wondered, did they sacrifice so much to try to create a potentially apocalyptic and cruel machine God who still doesn't exist, when the benefits could easily be reaped with less sacrifice?
[00:17:41] If you enjoyed this episode, please leave us a review on your preferred listening platform. This podcast is brought to you by John Lothian News, the home of Market Zwiki and Market Zwiki Education. Thank you for joining us. Have a great day and stay safe and treat people the same way you want to be treated with respect, equality and Justice. This has been John Lothian. Goodbye. This podcast has been produced by John.
