Episode Transcript
[00:00:06] Welcome to the John Lothian News daily podcast for September 30, 2023. I am your host, John Lothian. 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 cabinets from today's GLN the CFTC's Division of Clearing and Risk will hold a public roundtable on October 16 to address key clearing issues, including custody and delivery of digital assets, digital asset margins, full collateralization, 24/7 trading, and conflicts of interest in vertically integrated entities such as derivatives, clearing organizations, futures commission, merchants, end users, proprietary traders, and state regulators. The goal is to gather expert insights into emerging challenges in the clearing sector. The 2024 Women in financial markets, or WIFM, awards celebrated. Exceptional women and allies across various categories emerge. Award winners were Christina Diaz, DTCC Simone Kramer, Bloomberg, Alexis Megdanoff, Nomura, Michelle Mullen, bank of America, Emily Scott, Elseg. Rising stars included Sarah Dickey, Allie Hunt, Tradeweb, Katie Oliverio, Alliance, Bernstein Tierney Siddal, Rainbow bank and Kelsey Stokes. S. P. Dow Jones Trailblazers recognized Laura Chepukovich, bank of America Jennifer Ilku, Ice, Laura Kimple, DTCC Ulla McCrindle, Nomura Doctor Tina Hasenpusch, CME and Elizabeth King, Ice were game changers, while Penny Foley, TCW received the Luminary Lifetime Achievement Award. NFA is hiring for the summer 2025, interns and full time roles in its regulatory departments. Check out its job opportunities at Hash NFA, which includes generous benefits and in depth training.
[00:02:36] Gary Flagler, head of international business development markets and data at Bolsa de Valores, wants to remind you that Tuesday, October 1, 2024, is a public holiday in Mexico to honor the swearing in of the new president. The mexican markets, including the Bolsa Mexicana de Valores and Mercado Mexicano derived, will be closed for the day and reopen on Wednesday, October 2, 2024.
[00:03:13] On Friday, I mentioned I did not have access to the FTS Lex column titled Lex rivals are not the only reason for CME's lost luster. The author, Jennifer Christopher Hughes of the FT, sent me the contents, which can be boiled down to this CME group, once dominant in interest rate futures, is facing competitive challenges and lagging investor enthusiasm. Despite record open interest across its six asset classes in 2024, its shares have underperformed rivals Ice and Nasdaq. Competition has intensified, notably from BGC groups new short term interest rate products backed by Goldman Sachs and Citadel. While CME benefits from cross margining advantages making it cost effective for clients the complexities of its business model and looming economic uncertainties have dampened market sentiment, limiting its recent stock performance.
[00:04:13] I am on my way to Florida and a friend was telling me there was another hurricane I should worry about. He told me about a YouTube channel. He follows Mister Weatherman on YouTube channel focused on tracking hurricanes, tropical storms and severe weather in the Caribbean, Gulf of Mexico and tropical Atlantic. Brian, the host brings decades of forecasting experience and has credentials in geography, broadcast meteorology, emergency management and volcanology.
[00:04:46] His top priority is safety, and the channel is part of a ministry associated with St. Margaret Mary Catholic Church. For more information, visit www. Dot YouTube dot comisterweatherman. Here are excerpts from in front of Fow's paywall from some recent stories the London Metal Exchange, or LME, will require aluminum emissions reporting starting in June 2025. Continuing its efforts to enhance sustainability in metal training at LME week, CEO Matthew Chamberlain emphasized the Green agenda's impact on future metals demand, positioning the LME as a key player in the decarbonization shift. Experts stress that governments must implement unified regulations to meet energy transition goals. Meanwhile, CME group will introduce spodumene futures, adding to its suite of battery metals contract, underscoring the importance of metals like copper and cobalt for a green future.
[00:05:58] The CME group issued a disciplinary notice regarding Nomura Securities International, Inc. Case number CBOT 20 317 oh seven BC, effective September 27, 2024, related to the Chicago Board of Trade.
[00:06:17] For more details, you can read the full notice with the link in today's newsletter.
[00:06:22] Our most read stories from our previous edition of JLn options were execution prices across retail option brokers vary significantly from Traders magazine Wall Street's ETF assets hit $10 trillion milestone from Bloomberg and Crystal ball breaks as traders fail to get rich in new study from Bloomberg via Yahoo Finance 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 story from David Klotz of Metro trade via LinkedIn. That's why we did that. What we do earlier this summer, I spent some time on the east coast with my wife's family, and I got the inevitable question. So you said you started your own business. How's it going? After trying and failing to adequately explain what I do for the fourth or fifth time, I decided to just write it all and send them a link to this article. That's why I can hopefully gain four or five more monthly subscribers. And maybe my mom will stop thinking I'm a sort of stockbroker. My comment David Klotz continues his what we do campaign.
[00:07:49] Heres a story from Reuters. The headline JPMorgans Jamie Premium to be tested as CEO succession looms, questions hang over who will succeed JPMorgan Chase CEO Jamie Dimon and when, but analysts and investors say one thing is almost certain, the bank stock will slump when the powerful bank chief eventually departs. JP Morgan shares reflect a so called Jamie Premium of ten to 15% that could evaporate when the longest running chief of a major Wall street bank decides to leave, according to estimates from four investors and three analysts. My comment this is such a tart premium. That's a Ted Lasso reference. Here's a story from Bloomberg. The headline Harvard's not so smart money two decades of poor returns and rich pay. Its money managers underperformed after changing personnel and strategies at the worst times.
[00:08:55] Harvard University alumni and business luminaries gathered at the memorial service in midtown Manhattan. They were there to honor Ron Daniel, a McKinsey and company managing partner and Harvard's treasurer from 1989 to 2004. Daniel, who died at the age of 93, oversaw astonishing growth of the school's endowment as chair of the funds board. Under his leadership, the university built up a kind of in house hedge fund, Harvard Management Company, or HMC, from Boston's Federal Reserve building with sweeping views of the harbor, HMC pioneered a strategy of long term investments in then exotic fare for endowments such as private equity and hedge funds. My comment this is such smart money.
[00:09:53] Here are the top three stories from Friday's JLN our top story Friday was how the US is helping the world use AI for good by Secretary of State Anthony Blinken from the US Department of State. Second was Shigeru Isheba to be next japanese prime minister after winning LDP leadership from the Financial Times. Third was FIA forum Treasury clearing 2024 the evolution of agency clearing from the FIA here are the top three stories from the lead section of todays JlN. The first story is from the Financial Times. The headline new titans of Wall street how trading firms stole a march on big banks a handful of secretive businesses, including Jane street and Citadel securities, have seized market share from the old guard in Manhattan. Goldman Sachs and Jane street are separated by a street a century and a 160% average pay gap. Goldman and its rival investment banks were once the titans of trading. Now its Jane street, that paid an average of over $900,000 per employee last year to Goldmans $340,000, according to FT calculations. The upstart founded at the turn of the millennium is among the handful of highly secretive trading firms, also including Citadel Securities, Susquehanna International Group, XTX Markets and DRW, to have capitalized on the electronification of financial markets to seize market share from less nimble and more heavily regulated banking stalwarts and reshaped wall streets trading landscape in the process. Heres another story, this one from Bloomberg.
[00:11:59] India regulators set to curb booming options frenzy as risks aboundhe it may limit options with weekly expiry raise contract size nine out of every ten retail traders lose money in f and o.
[00:12:17] Sebi Indias securities market regulator consider rules to limit a surge in derivatives trading in the nation, people familiar with the matter said after growing retail participation took the speculative bets to the highest level in the world. The securities and Exchange Board of India will discuss the measures proposed earlier in July, including limiting the number of options with weekly expirations and raising the minimum contract size at a board meeting Monday, the people said, asking not to be identified before a final announcement. And then one more story, this one from Bloomberg. The headline the mavericks of metal are back rocking a $15 trillion market. In 2002, the metals industry was jolted into uproar after a us warehouse owner announced it would start charging a fee to safely buckle up each cargo being trucked from its depots in the LON and metal exchanges storage network.
[00:13:25] Overnight traders trying to access metal backing the LME's futures contracts were hit with tens of thousands of dollars in extra costs for work that took a matter of minutes. If any refused to pay, their metal stayed put, meaning the warehouse could keep charging rent.
[00:13:46] After furious complaints, Metro International trade services was reprimanded by the LME for charging to discourage withdrawals from its sheds.
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