Episode Transcript
[00:00:06] Welcome to the John Lothian News Daily Update podcast for October 28, 2024. I am your host, John Lothian.
[00:00:16] This podcast is brought to you by John Lothian News, the home of Markets Wiki and Markets Wiki Education. Thank you for joining us. Here are the hits and takes comments from today's jln.
[00:00:28] I have more sad news to report this morning. Ann Begin, the retired CME Clearinghouse executive and widow of MGEX CEO Mark Bagan, died on October 20 when her car became submerged in 15ft of water about 20 miles north of Mauston, Wisconsin. Begin, who lost her husband in April of this year, was known to her close knit group of friends as seg. Signifying her role at the CME Clearinghouse, the CME Group issued this statement Ann Bagan was an important part of our clearing team for 25 years, helping to establish standards for financial surveillance that are used by exchanges and market participants around the world. She and her husband Mark were tremendous advocates for our industry and great friends to so many of us. Our hearts go out to Ann's children, family and friends.
[00:01:28] Being a journalist in sensitive situations like this, when loved ones die and you need to get the facts to report, can be very difficult. It gets more difficult when you're in situations where it was sudden, an accident or shooting, and when you are asking parents or brothers and sisters about the events, sometimes passions run high and the role of the journalist is not appreciated. Luckily, I have never been in that sensitive situation and I have never felt like I was the enemy, especially the enemy of the people. One of the candidates for President of the US Is blanketing the press, which would include me with such a label. I consider myself an advocate for the people and for free and open markets. Being able to talk to people in those delicate situations when someone has died involves developing trust and a history of empathy. Trust and empathy are elements of being a friend, not an enemy. Howard Lutnick found a friend that he could trust to tell his 911 stories and other stories too in Anthony Pompliano, who is often called Pomp. He is an American entrepreneur, investor and bitcoin advocate who has become a prominent figure in the cryptocurrency and blockchain industry. He hosts the Pomp podcast, which has garnered over 50 million downloads and features notable guests from tech, crypto and venture capital. His YouTube channel has amassed 480,000 subscribers. Lutnick was front and center at Donald Trump's Madison Square Garden event yesterday, explaining when America was last great in 1900. Lutnick explained that back then there was no income tax, only tariffs. After World War I and World War II, when America embarked on rebuilding Europe and other parts of the world, it lowered its tariffs and instituted the income tax. Lutnick's rousing election presentation would have made you think he was the candidate.
[00:03:46] The securities and Exchange Commission SEC has adopted new rule amendments and a rule aimed at enhanced enhancing the resilience and risk management of covered clearing agencies. These changes incorporate new requirements for intraday margin collection, mandates for reliable risk based margin systems, and elements for recovery and wind down plans. The elements establish requirements for intraday margin collection, which include developing a risk based margin system that can monitor intraday exposures, the authority to make margin calls as necessary, and and documentation for when calls are not made. The rule also demands that clearing agencies use reliable data for their risk systems and has set two compliance deadlines, the first for filing proposed changes within 150 days and the second for implementing those changes within 390 days after publication in the Federal Register. These changes are significant for investors and the broader financial market because they aim to to strengthen the infrastructure of clearing agencies, which play a vital role in the financial system by mitigating counterparty risk. By enhancing margin requirements and recovery plans, the SEC is working to ensure that covered clearing agencies can withstand financial shocks and continue to operate effectively, ultimately supporting market stability and investor confidence.
[00:05:24] Robinhood is launching its first election betting contracts through the Forecast X market, allowing users to wager on the outcome of the 2024 US presidential election. This move follows a federal court decision that effectively legalized election betting in the US forecast. ACTs, owned by Interactive Brokers, debuted this year and expands Robinhood's reach into prediction markets. Starting with a limited rollout, eligible users can purchase contracts for either Kamala Harris or Donald Trump. With contract Prices fluctuating between 2 and 99 cents based on demand, correct predictions will yield a $1 payout per contract. There are stories by the Wall Street Journal, Bloomberg, CNBC and Reuters, and the press release by Robinhood. Here are the headlines from in front of Fow's paywall from some recent stories HKEx to launch first Bitcoin Ether index in November ASX shareholders block executive pay rises for second time CME in talks with regulator over US treasury clearing filing analysis European traders warm to V Stocks options ahead of U.S. elections and analysis Dex to facilitate energy transition with new products Phil Lesh, the innovative bassist and founding member of the Grateful Dead, passed away on October 25, 2024 at the age of 84, Bloomberg reported. Known for his unique approach to bass playing that redefined its role in rock music. Lesh was a crucial element of the Dead's imp improvisational style and psychedelic sound. Originally a classically trained violinist and jazz trumpeter, he joined the band in 1965 and remained an influential figure in the music world throughout his life. Lesh's contributions extended beyond music, as he was also recognized for his philanthropic efforts. His passing, surrounded by his family, marks the end of an era for the iconic band that helped shape the San Francisco sound of the 1960s and beyond.
[00:07:58] Our most read stories from our previous edition of JLN Options were Futures industry still grappling with Post Trade challenges, expert says From John Lothian News Selling stock concentration is ETF Industries big idea from Bloomberg and options market suggests less than 10% probability of Bitcoin reaching $100,000 by year end. From Crypto News. Subscribe to our 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 that story mentioned earlier from JLN Futures industry still grappling with Post Trade Challenges, expert says in an interview with John Lothian. That's me of John Lothian News. Joanna Davies, a managing director at Ostra, shed light on the ongoing challenges in the futures industry post trade processes. The discussion centered around the findings of an Acuity report and the industry's response to issues that flared up in 2020. Davis emphasized that the Acuity report served as a validation of Ostra's understanding of the problems plaguing the industry. Quote, two themes emerged. She noted the risk introduced by the heavy handed position transfer process in the ETD market and the complexity and cost of collateral margin optimization. On quote the reaction from clients to the report was one of fatigue, according to Davies. Watch this video on John Lothian News. Com. Here's a story from the Washington Post. The headline some billionaires CEOs hedge bets as Trump Vows Retribution with the race tight, some business elites are toning down past criticism of the former president at a five star resort in California last week. Wall street executives, fast food CEOs, a few dozen other industry titans and two former presidents gathered for off the record conversations. One subject that inevitably came up, according to two people familiar with the matter the possibility that former President Donald Trump could return to the White House the gathering of the Business Council, an invitation only association of Chief Executives that the Waldorf Astoria Monarch beach in Dana Point was not supposed to be about the election. But some attendees wound up discussing how to protect themselves and their companies if Trump wins the presidency next week and tries to use the power of the Oval Office against his perceived enemies, the people said, speaking on the condition of anonymity to describe private conversations. My comment CEO's always hedge, but this time the stakes are a bit higher. Here's another story, this one from Bloomberg. The headline How 1% of Poly Market betters are boosting Trump's odds analysis of millions of transactions shows a handful of accounts with outsized impact since September 1, more than 102,000 poly market users have bet on whether Donald Trump or Kamala Harris will be the next president of the United States, propelling Trump's likelihood of victory to a high of 66.4% on Tuesday. Despite polls remaining closed, according to trading activity, a small number of users are having an outsized impact on the odds. My comment Here's a market that no U.S. citizens are allowed to participate in that is being used to influence the election through substantial trades by a concentrated interest. Does not sound like a market to me. Of course US Citizens are likely accessing the market despite being prohibited from trading on it by US Law. Here are the top three stories from Friday's jln. Our top red story Friday was Bloomberg's Wall street takes Tax loss Harvesting to the next level. Second was ICE and Dun and Bradstreet to launch climate data and analytics for broad universe of public and private companies from Intercontinental Continental Exchange. And third was another ICE press release. The New York Stock Exchange plans to extend weekday trading on its NYSE ARCA equities exchange to 22 hours a day.
[00:12:58] Here are the top three stories from the lead section of today's JLN, though I rearranged them a little bit. Here's the first story. It's from CNBC. The headline Robinhood jumps into election trading, giving users chance to buy Harris or Trump contracts Upstart broker Robinhood is jumping into the prediction betting game, announcing Monday users can begin trading the 2024 presidential election that is eight days away. Users can trade a Kamala Harris or Donald Trump contract starting Monday, said the company, as long as they meet certain criteria that include being a US CIT citizen. The trading is being offered through its Robinhood derivatives unit and Forecast X, which is operated by Interactive Brokers. Robinhood jumps into a suddenly crowded politics prediction market field that grew this month after platform Kalshi won a key ruling against the Commodity Futures Trading Commission, which was seeking to stop the election outcome trading. The CFTC is appealing the ruling shortly after interactive brokers launched various political contracts, including on the election here's another story, this one from Bloomberg that I moved up Election Loss Sparks concern about making Tokyo financial center the shock loss of the majority for Japan's ruling coalition is making bankers in Tokyo worried about the new government's commitment to revitalizing financial markets, including a push to boost its presence in asset management. A disastrous showing for the Liberal Democratic Party and the Komito Party at lower house elections over the weekend was casting doubts about a pledge to make Japan a leading asset management center.
[00:15:04] That had been a positive factor, unquote, for the Japanese stock market with clear appeal to overseas investors, said Mashiro Ichikawa, chief market strategist at Sumitomo Mitsui DS asset management company. The market will likely adopt a wait and see attitude to see whether the policy will be continued, he said.
[00:15:32] Here's another story, this one from Reuters. The headline Asset Managers roll out new ETFs to tap into AI buzz exchange traded funds focused on artificial intelligence are proliferating as asset managers offer new ways to tap into the traditional market enthusiasm for AI Even while it remains unclear which companies will emerge as the long term winners from the latest technology revolution, more than one third of the two dozen ETFs that include artificial intelligence or AI in their name have been launched in 2024 alone, according to data from Morningstar. In the past week, three more joined their ranks, including a cloud computing ETF rebranded and revamped to specifically target AI. The AI ETF group now has assets of $4.5 billion, drawing it closer to the 5 point billion nuclear power themed ETF Universe and pushing it well above the cannabis sector which has 1.37 billion in assets. We're grateful for your attentive listening to the John Lothian News Daily Update. Please spread the word about our podcast among your friends. We would greatly appreciate it if you could spare a moment to leave a review on Apple Podcasts or whatever platform upon which you access this podcast. Your reviews play a crucial role in introducing our content to new listeners. Also, if you haven't subscribed to the daily John Lothian Newsletter, email yet, you can Enjoy a complimentary 90 day trial by visiting johnlothianews.com trial. Thank you for your valued support. 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 Andrew Lothian.
