[00:00:06] Welcome to the John Lothian News daily Update podcast for December 12, 2023. I am your host, John Lothian. In this podcast, we provide an overview of the content featured in today's John Lothian newsletter. We'll cover insights from the hits and takes section, share stories from the first read section, highlight the top three stories from the previous editions of both JLN and JLN options, and delve into the first three stories featured in the lead section of today's JLN. This podcast is brought to you by John LothiaNews, the proud home of Marketswiki and Marketswiki education. We invite you to explore our extensive collection of history trading videos on the Marketswiki education
[email protected]. This includes the open Outcry Traders History project and the path to electronic trading video series. Thank you for joining us. Here are the hits and takes comments from today's JLN Today we published our second video interview conducted by Robert Lothian at FIA Asia 2023, this one with Matthias Riteig, senior officer and chief representative of Singapore branch OsE and Tokom Japan Exchange Group. Yesterday, we led off our FIA Asia industry leader video series with an interview of SGX's Lobun Chai. Ken Griffin and Citadel are in the news a bunch today, as Bloomberg reports Citadel is handing back $7 billion in profits to clients after the hedge fund performed better than industry peers in 2023 and earned a nearly 15% return for its flagship fund. Also, Citadel securities revenues jumped to $1.8 billion, up from 1.66 billion from a year earlier, Bloomberg reported. Finally, the real deal reports Citadel and Steve Ross Vornado Realty Trust have agreed to pay $164,000,000 for the air rights from, quote, the Roman Catholic Archdiocese of New York to facilitate the development of 350 Park Avenue.
[00:02:29] There is a terrible story from Bloomberg in the lead section today about a man and his wife suing J. P. Morgan after the couple's $50 million portfolio dwindled to 1.5 million after largely following the advice of J. P. Morgan. The wife says the man is 86 and suffering from dementia and can't testify in court. Rule number one don't put all your eggs in the same basket. Congratulations to former Cboe head of derivatives Ariane Adams, who landed a new job as head of strategy for retail trading app Webull Financial LLC, Bloomberg reports. The former Sibo and Goldman Sachs executive will report to chief executive officer Anthony Denier and work with other senior leaders to shape the firm's expansion into new investing products and regions she will work from Webull's New York office and starts in January. It's going to be time to cash in that penny collection soon. As Bloomberg is reporting, the world's copper supply is suddenly looking scarce.
[00:03:42] On my first day of class in Finance 101 at Purdue University, we learned about the time value of money. Over the weekend, it was reported that japanese baseball star Shohei Otani had signed a 700 million dollar contract with the Los Angeles Dodgers after expectations were that he would sign for a record 500 million dollar contract. He blew right past the $500 million right? Well, Otani is only taking $2 million per year while he is playing and deferring $68 million per year. That means based on the time value of money, his 700 million dollar contract is actually worth about 460,000,000 in today's dollars, the Wall Street Journal reports. Are you stuck for ideas for what to get your loved ones for Christmas? The Wall Street Journal has a story titled 44 stocking stuffers for men and women that are fun and useful that might just give you the item you are looking for.
[00:04:50] The latest draft of the agreement from COP 28 climate summit in Dubai does not directly refer to a phase out of fossil fuels, which is disappointing to many climate advocates and scientists. While many developing countries and the EU are demanding the text explicitly state a phase out, it is unlikely the text will change. According to CNBC, the draft text does not even mention the words oil or gas, the fossil fuels whose emissions scientists say are causing climate change. On LinkedIn, many business groups expressed their unhappiness with the draft in their post. The influential global nonprofit we mean Business Coalition said, quote, that progress on the COP 28 negotiations are now entering their final hours, and the global stock take draft text needs to do significantly better. It provides a menu of optional actions that countries could engage with. As our CEO Maria Mendelus has said, are we really going to risk our future on a shopping list? Unquote. Amir Sokolowski, global director of climate change at CDP, the not for profit charity that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts, posted this statement on LinkedIn. The last draft of the text on the first global stock take fails to achieve the monumental task we need to deal with the climate crisis in any aspect. While I hope this changes, we must remember that the climate crisis remains, whether dealt with here or not, and so do the tools for dealing with it better. Text or not, the road to cop 28 Azerbaijan and to cop 30 starts now. We must act as though the highest ambition text were accepted.
[00:07:05] Our most read stories from our previous edition of JLN options were the cocaine bear ETF keeps on huffing from the Financial Times, the adrenaline fueled trades sweeping the market from the Wall Street Journal and S and P 500 has a quiet start to a big week. Natural gas implodes from Tasty live.
[00:07:28] Subscribe to the free JLN Options newsletter with the link in today's JLN. Here are more stories from the first read section of today's JLN.
[00:07:38] Here's the video mentioned earlier from our FIA Asia 2023 coverage JPX's strategic initiatives in response to regulatory changes and market dynamics unveiled in JLN FIA Asia interview Matthias Reitig, senior officer and chief representative of Singapore branch OsE and Tokom Japan Exchange Group, recently sat down for an interview with Robert Lothian of John Lothian News during the FIA Asia conference, Reitig offered insights on JPX's latest developments and its strategic approach to evolving market dynamics. You can watch this video on johnlothiannews.com.
[00:08:24] Here's a story from the Financial Times an opinion piece from Sheila Baer regulators must resist banks'magical thinking the latest wheeze from lenders is to use credit linked notes for capital relief. The late, great Charlie Munger once said that derivative trading desks made witch doctors look good. That was certainly true of credit default swaps used by banks to circumvent capital requirements in the run up to the 2008 financial crisis. Unbelievably, as regulators now proposed further toughening of capital rules through the Basil three endgame, banks want more leeway to use similar financial alchemy to counter the impact. Regulators should resist my comment. The Shell game starts all over again with a new twist. Here's a story from Bloomberg mentioned earlier. Citadel's Ken Griffin taps St. Patrick's air rights to boost NYC office tower. Citadel is working with Warnado Rudin to build new skyscraper. Archdiocese says money will likely go to Cathedral's upkeep. Citadel's Ken Griffin is in contract to purchase air rights from St. Patrick's Cathedral in Manhattan to build a giant skyscraper that will house Citadel on Park Avenue. Griffin, alongside Varnado Realty Trust and Rudin have been working to map out plans for a 1.7 million square foot tower that would replace three properties at 350 Park Avenue. My comment one could call this a heavenly purchase. Here's another story, this one from Bloomberg Headline Harvard's deepening disunity pits alumni against faculty professors urge board to resist political pressure to oust gay Bill Ackman has repeatedly attacked Harvard's president. Harvard University is fracturing. More than 700 faculty have signed a petition urging the school's leadership to resist political pressures, quote, at ODS, with Harvard's commitment to academic freedom, including calls for the removal of president Claudine Gay, unquote. At the same time, over 1000 students and alumni, including billionaire donors such as Bill Ackman, are demanding the school replace its leader. In the wake of rising antisemitism on campus and her responses, I am wondering if alumni's grade can be retroactively changed, as they may be failing the university. Failing to pay pledges is just one part here's the top three stories from Monday's JLN our top story on Monday was CME Group's press release CME Group to create unified global NDF trading venue, expanding access and enhancing liquidity for participants. Second was from Coindesk, US, South Korea Japan discussed north korean crypto thefts in trilateral meeting. Our third most read story was also from Coindesk. Bitcoin having is poised to unleash darwinism on miners. Here are the top three stories from the lead section of today's JlN. The first story is from Bloomberg. The headline desperate retail investors drive India's options craze. While the frenzy mimics Wall street, trading in derivatives has outstripped the underlying stock market more than in any other country. Intervention is needed.
[00:12:16] An uncontrolled popular urge to speculate in financial markets is giving regulators a headache everywhere. It is especially worrying in India, where trading in futures and options is now more than 400 times bigger than the underlying cash market turnover. This is a slow transfer of wealth from the real economy to a financial elite, the full impact of which may only be felt when it's too late to stop it. The securities and Exchange Board of India's crackdown on social media influencers pedling advice is a losing battle. Although nine out of the ten individual traders are losing money, retail investors can't get enough of derivatives. A smartphone led gamification of investing is complete.
[00:13:08] Here's another story, this one from the Financial Times. The headline, Deutsche Boris's aborted proposal to Euronext highlights Europe's ipo woes. Discussions took place at a senior level and highlight obstacles in building a capital market to compete with the US. A short lived proposal by Deutsche Bors to form a joint venture with rival Euronex to revive european stock listings has underscored the region's challenges in building a capital market to rival the US. Accounts of the precise nature of the discussions between the two largest stock exchange operators in the eurozone vary, but the proposals show discussions have taken place at senior levels in an effort to reverse the long standing shift of capital away from Europe and to New York. And then finally, here's a story from the Financial Times. Volatility ebbs as $26 billion pours into option writing ETFs exchange traded funds backed by covered calls draw investors into search of steady income. Investors on the hunt for regular income have this year poured almost $26 billion into exchange traded funds that sell options tied to stocks, inspiring a wave of copycats and raising questions about their effects on market volatility. The funds, also known as covered call etFs, have surged in popularity to contain roughly $59 billion in combined assets, up from only $3,000,000,000.03 years ago, according to Morningstar Direct. The number of etfs in the category has nearly tripled in that time, to about 60 in the US.
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