Episode Transcript
[00:00:00] Foreign welcome to the John Lothian News Daily Update podcast for January 14, 2024. 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 marketswiki.com, linkedIn, Facebook, Instagram X and threads. Lets dive in. Here are the hits and takes Comments from today's JLN the Commodity Futures trading commission, or CFTC, is reviewing the legality of Crypto.com's Super bowl betting contracts, which allow investors to wager on major football games. The contracts, launched before Christmas, may violate gaming laws, prompting a potential 90 day review, Bloomberg reported. Despite Crypto.com's defense, which points to legal clarity from a recent ruling on political prediction markets, the CFTC's stance on events contracts, particularly sports related bets, remains ambiguous. Meanwhile, the rise of sports betting, including crypto based platforms, raises ethical concerns. Mitchell S. Jackson, in a commentary in Esquire article, argues that the gambling industry, especially its targeted ads within black communities, resembles the predatory practices of Big Tobacco, exploiting vulnerable populations. Jackson highlights the detrimental effects of gambling, particularly on marginalized groups and the industry's promotion of unhealthy relationships with money, drawing parallels with historical exploitation.
[00:01:58] I've always judged a market based on its economic purpose, whether it genuinely serves a productive value, creating function or is Simply gambling. The CFTC's scrutiny of crypto.com's Super bowl bets should find that these markets fail this test. Additionally, they risk undermining the public good, much as Big Big Tobacco did by targeting people in economically strained communities with products that encourage unhealthy financial behaviors. Gambling markets should be examined more closely to ensure they don't exacerbate inequality or exploit people's financial desperation. The parade of officials announcing their departure from the CFTC continues. Clark Hutchison, the director of the Commodity Futures Trading Commission's Division of Clearing in Risk, will depart the agency on January 15, 2025, after nearly six years in the role appointed in 2019, Hutchinson guided the division through significant market growth, volatility and structural changes. CFTC Chairman Rostam Benham praised Hutchinson for his thoughtful management and extensive market expertise, noting his impact on the agency's oversight of derivatives clearinghouses. Hutchison, who previously held leadership roles at global financial institutions and advisory positions with industry boards, expressed gratitude for the opportunity to lead the division and thanked the CFTC staff his future career plans remain unannounced.
[00:03:47] I am moderating a panel at next week's Security Traders association of Chicago's 99th annual Midwinter Meeting, which runs from January 22 to January 23, 2025. It will be held at the Hilton Chicago at 720 S. Michigan Ave. The keynote speakers are Gina Martin Adams, Global Head of Portfolio Strategy and Chief Equity Strategist at Bloomberg Intelligence, and Henry Schwartz, Vice President, Global Client Engagement at CBOE Global Markets. Thank you to all who have given to Sarah and Scott and their family, the sister in law and brother in law of Patrick Lothian who lost their homes in the fires in Los Angeles. The Rebuild hope for Sarah and Scott's family GoFundMe campaign now exceeds $45,000, exceeding the initial goal of $40,000. The new goal is $100,000 and includes some familiar names from this newsletter and some readers. I did not know you are most blessed and precious people. Thank you.
[00:04:59] Here are the headlines from in front of Fow's paywall from some recent stories US Treasury Clearing Service passes $2 trillion milestone Gulf Mercantile Exchange volumes up 12% after Saudi investment EEX Power Derivatives volumes surged 63% in 2024 C Mark's third senior departure before Trump inauguration and analysis EEX questions Europe's virtual hub Electricity pricing plan Our most read stories from our previous edition of JLN Options were Bridging the Liquidity Divide, a path to smarter Options trading from Traders Magazine Traders brace for biggest S and P earnings day reactions ever from Bloomberg and Options trades in China ETF swing from gain to $100 million loss 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. The first is a video from our FIA Expo coverage. Trading Technology expands Multi Asset Offerings and Innovations Trading Technologies is set to expand its global reach and multi asset capabilities, fueled by partnerships and innovations executives Keith Todd and Alan Green revealed in an interview with John lothian. News@fia expo. The firm plans to introduce access to CBOE's complex INDE options by early 2025, addressing growing demand from international clients, particularly in Asia. We also have the videos from Jonathan Kellner, CEO of Memex, and Saram Krishnan of the National Stock Exchange that you can view on johnlothianews.com Here's a story from Business Insider. The headline Jamie Dimon says Bitcoin is the Crypto choice of Sex traffickers, Money Launderers and Ransomware. Dimon, the CEO of JP Morgan Chase, cast doubt on the value of Bitcoin once again in an interview with CPS News Lesley Stahl we are going to have some kind of digital currency at some point, dimon said. I am not against crypto. You know, Bitcoin itself has no intrinsic value. It's used heavily by sex traffickers, money launderers, randomware.
[00:07:53] In the past, Dimon has said cryptocurrencies are as useful as quote unquote pet rocks, stating Bitcoin is fraudulent like a Ponzi scheme. My comment I have similar feelings about crypto as Mr. Diamond. Where I personally have issues is with crypto contributing to making it easier and more efficient for the sex traffickers, money launderers and the ransomware criminals to transfer their ill gotten gains. That is an individual issue for me and the economic decisions I make. If other people want to trade crypto, let them trade crypto. Here's another story. This is a press release from FIA Tech Cernova Financial Joins FIA Tech's Data Bank Network FIA Tech, a leading technology provider to the exchange traded derivative industry, announced today that Cernova Financial, a leading provider of outsourced post trade clearing processes for financial services, has joined the FIA Tech Data Bank Network and will be integrating FIA Tech's exchange fees, cross reference symbology and core contract specifications data, including position limits, into its client offering. Cernova Financial will be the first outsourced outsourcing provider to join the Data Bank Network. The Data Bank Network is FIA Tech's interoperable global network. To simplify the use of reference data analytics and software solutions, FIA Tech adds royalty to its Data Bank Network here's another story, this one from Bloomberg, a podcast the Hidden History of eurodollars Part 1 Cold War origins At more than $10 trillion outstanding, the eurodollar market is one of the biggest forms of shadow banking activity out there. It's also one of the most interesting markets in existence, allowing non US Banks to hold and lend offshore dollars that effectively sit outside the Federal Reserve's control. But where did Eurodollars come from? Why did the US Allow these shadow dollars to exist at all? And what do Eurodollars mean for the Greenbeck's role in the global financial system? In this special three part series, we look back at the hidden history of the Eurodollar market. The story is told by Columbia Law Professor Lev Menand and Federal Reserve bank of New York Policy Advisor Josh Younger. We start in the aftermath of World War II, when Europe is in the midst of an expensive reconstruction and the world is in the early throes of the Cold War. It's here that the Eurodollar is Born. My ooh ooh, I love this stuff. Do we get to go to a basement and open a crypt and find a lost cache of Eurodollars from the Cold War?
[00:11:07] Here are the top three stories from Monday's jln. Our top click story Monday was Prediction Markets Venue Calshi appoints Donald Trump Jr. As advisor from the Wall Street Journal. Second was gambling, murder and Mayhem. Welcome to the New Futures Markets of today by John Lothian. That's me from JLN. Third was CFTC announces departure of enforcement director Ian McGinley from the CFTC. Here are the top three stories from the lead section of today's JLN. The first story is from Bloomberg. The headline Superbowl bets on crypto.com poised for CFTC review of legality Federal regulators are deciding whether to probe the legality of trading into crypto.com futures contracts that let investors bet on who will win major football games, including the Super Bowl. The five member Commodity Futures Trading Commission is in the process of voting on a measure to subject the contracts to a 90 day review. According to people familiar with the matter who weren't authorized to speak publicly, the agency lacks the power to halt trading immediately, and the review would extend until well past the Super Bowl's February 9th game day. But the commission could ban this type of contract after its examination is completed.
[00:12:37] Here's another story, this one from Bloomberg. The headline at Charles Schwab A fresh start After a close call, the venerable brokerage firm risked falling into the SVB vortex. But it's back on its feet with a new home in Texas. Two years ago, as relatively obscure regional banks in California and New York sputtered towards oblivion, a far better known pillar of Main street finance found itself sucked downward by association. Charles Schwab Corporation, the brokerage and more recently bank founded by a guy Americans have known as Chuck from countless TV ads, faltered when its paper losses ballooned. Investors feared it was suffering from a similar mismatch of assets and liabilities. These days, Schwab is back on more solid footing and out of the headlines again. Although it took a year and a half for the company stock to fully recover, the unrealized losses have been abating, and Schwab in December upped its 2024 growth outlook to as much as 3.5%. As storms come and storms go, said Walt Bettinger, who stepped down as chief executive officer on December 31, here's another story, this one from the Financial Times. The headline Robinhood to Pay Biggest Fine among more than $100 million imposed by SEC broker agrees $45 million settlement as part of data Breach While Blackstone and KKR are among Those penalized by US regulator, Robinhood has agreed to pay fines of US$45 million to cover data breach and record keeping failures, one of a series of penalties levied by U.S. regulators on Monday against financial groups including units of Blackstone and kkr. The online broker paid the biggest penalty in a group of settlements announced by the securities and Exchange Commission that totaled more than $100 million in fines.
[00:14:59] 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 marketzwiki and Markets Wiki 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 Lothian.
