Episode Transcript
[00:00:06] Welcome to the John Lothian News daily Update podcast for July 23, 2024. I am your host, John Lothian. This podcast is brought to you by John LothiaNews, the home of Marketswickie and Marketswicky Education. Thank you for joining us. Here are the hits and takes comments from today's JLN.
[00:00:25] The us presidential race was swinging towards Donald Trump. The markets were showing the Trump trade and the Democrats were at Joe Biden's heels to end his race for the democratic nomination for president. He stepped down and Kamala Harris was endorsed and the Trump trade was being reassessed. On her first day as a candidate, Harris reversed the republican fundraising advantage for former President Trump, raising a record $81 million in 24 hours. The Wall Street Journal reported that the democratic committee says that they pulled in $81 million from 888,000 donors. According to the campaign, 60% of these people were making their first contribution of the 2024 cycle. Harris also secured enough delegates to win the democratic nomination for president, Bloomberg reported. She was endorsed by former House Speaker Nancy Pelosi, Gavin Newsom, governor of California, JB Pritzker of Illinois, and Gretchen Whitmer of Michigan. That is a good first day as a candidate. Bloomberg reported that the world recorded its hottest day ever on June 21, with many parts of the Mediterranean facing extreme wildfire risks. According to provisional data from the EU's Copernicus climate change service. Sunday set the highest average temperature on earth, surpassing a previous record. Global temperatures have already hit or exceeded a key climate threshold for twelve months, underscoring the challenge of limiting global warming to below 1.5 celsius above pre industrial levels. Climate change is intensifying heat waves, flooding and wildfires, with southern Europe experiencing temperatures over 40 degrees celsius for two weeks. Increasing wildfire threats in Greece, Spain, southern France and Italy. Berlin and Paris are also set for heat waves in early August. Extreme heat has disrupted the global economy, affecting air travel and power grids. The average temperature through June 2024 was 1.64 celsius degrees higher than the 1850 to 1900 era, and June 2024 was the hottest June on record, the 13th consecutive month to set a new temperature record. Today, Fow reported behind its paywall that expury has partnered with Google to offer its cloud trading infrastructure technology through Google cloud marketplace, marking a significant milestone that allows customers to develop market or exchange solutions using expiry's advanced technology. Meanwhile, the International Swaps and Derivatives Association IsDa reported that the time to negotiate key derivatives documents has not improved since 2006, emphasizing the need for increased efficiency, automation additionally, the association for Financial Markets in Europe has released a paper advocating for better financial regulation in the UK, enhanced EU integration, and addressed current issues in financial services. Fow published the following stories in front of its paywall on July 22, including that Abex recently launched a new commodity venue in Singapore, culminating a multi year development effort with a robust technology infrastructure poised for rapid growth. Meanwhile, the Financial Stability Board, or FSB, released a report emphasizing the increasing significance of non bank financial institutions. That's NBFIs in global finance. Cibo Global Markets is set to relaunch its redesigned S and P 500 hundred variance futures contract in September, pending regulatory approval. A study by Invesco highlights that geopolitical tensions, particularly between the US and China, are prompting sovereign investors to diversify geographically and seek safe haven assets. In another development, the UK Chartered Institute for securities and Investments has partnered with the Institute and Faculty of Actuaries to help actuaries address ethical issues in using AI for risk management. Additionally, in a story fully available on Fow, the emergence of us spot ETF's and corresponding futures has facilitated basis trading among institutional investors, leading to increased short positions by hedge funds and leveraged funds exploiting positive basis opportunities.
[00:05:49] Nice work by the interns of the National Futures association. The New York NFA interns delivered care packages for residents at Ronald McDonald House New York and Chicago. Interns packaged and delivered welcome bags to residents at Guest House, the NFA shared on LinkedIn. My wife has informed me she will not be available after 06:30 p.m. friday, when the Summer Olympics begin. Luckily, the New York Times has come out with a list to help her enjoy the Olympics. The story is titled Ten French Wines to drink while watching the Olympics. The girls of Troop 117 G, the Scouts BSA Troupe I co founded back in 2017 when girls were allowed into the renamed Boy Scout program, are at summer camp this week. I am happily retired from unit level scouting and thus sleeping comfortably in my own bed with the air conditioning on. The troop is going strong with its third scoutmaster and about 25 girls in the troop. While I wish I could be at camp with them, those days are long past.
[00:06:59] Our most read stories from our previous edition of Jail and options were Cboe announced planned launch of new CBO S and P variance features from CBOE CME Group volatility index from CME Group BlackRock forecasts active ETF's will hit $4 trillion by 2030 from the Financial Times 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 commentary I wrote over the weekend. Immigrants are risk takers, and I like risk takers. Last week during the GOP convention in Milwaukee, we heard a lot of bad things about immigrants. This is actually a very old story in american politics. A bill passed by the very first Congress of the United States, the Naturalization act of 1790, limited naturalization to free white persons of good character, explicitly excluding Native Americans, indentured servants, enslaved people, free Africans and Asians from citizenship. Read the whole commentary on johnlothiannews.com. here's a story from Matt Levine of Bloomberg Opinion. The headline bad trades are also valuable fx, back running crypto interns, Ray Dalios, non compete Azempic and HBS if you are a good trader, a good skill to have is buying stuff that will go up. If the stuff, stocks, bonds and currencies, whatever that you buy reliably goes up, then you can make a lot of money. You can make a lot of money simply by buying the stuff, having it go up and then selling it for more money than you paid. But there are other ways to monetize the skill. You can start an investment newsletter and charge people a fee for telling them what stuff will go up. You can start a hedge fund buying stuff for other people and taking a cut of their profits.
[00:09:07] Matt Levine also picked up on the disciplinary action story by the CME against Wingfeng Futures limited we shared yesterday. Here's a story from Crane Chicago business Ken Griffin lists Gold coast penthouse for $11 million Ken Griffin listed his top floor Gold coast condominium for sale, the latest of the billionaire hedge fund founders Chicago Condos, to hit the market since he announced his personal and corporate moves to Florida in 2022. The listing, the unfinished 38th floor at number nine Walton, came on the market yesterday priced at $11 million. Griffin paid more than $58 million for the building's top four floors in 2017. Of that, the purchase price for the top floor was almost $21.2 million. The 7500 square foot space has 16 foot ceilings, two outdoor terraces, four tandem parking spaces, a private elevator and its own rooftop pool. The listing, which touts the opportunity for the buyer to create their dream home by customizing the space, is represented by Emily Sachs Wong of at property properties, Christie's international real estate. Number nine Walton is a spectacular building, but this is the icing on the cake, Wong said. Most buildings don't even have a pool this nice, so it's pretty outstanding. My comment this is part of Ken's never ending supply of Chicago condos to sell.
[00:10:48] Here are the top three stories from Wednesday's JLN our top story Wednesday was Joe Biden drops out of us election and endorses Kamala Harris from the Financial Times. Second was Joe Bidens tweet announcing he was dropping out of the race. And third was the CME groups disciplinary action against Wingfeng Futures Limited. Here are the top three stories from the lead section of todays JLN. The first is by the Wall Street Journal. Lenders tout a new way to transfer risk, but why bother? Banks such as Ally Financial are turning to structured finance to flatter their capital ratios. Ally Financial has joined the ranks of banks doing deals known as synthetic credit transfers. These deals for a price might make lenders look less risky for certain purposes. They dont transfer any loans off their books. Behold the wonder of structured finance. Companies simultaneously can accomplish different objectives that one might think should be mutually exclusive. In this case, Ally gets to make itself looks less leveraged, even while issuing more debt. A neat trick. Here's how it works. In its second quarter earnings presentation last week, Ally said it recently issued $330 million of a type of debt that comes with an unusual twist. The amount Ally pays back will depend on the performance of a $3 billion pool of auto loans to customers with high credit scores. If the loan performs well as expected, Ally will repay the principal in full with interest. If the losses are worse than expected, Ally won't have to pay back the full amount. Or at least that is the plan.
[00:12:44] Here's a story from the Wall Street Journal. The headline Google talks to acquire cybersecurity startup Wiz Fall apart the search giant was in talks to acquire Wiz for $23 billion. Alphabet unit Google's talks to acquire the cybersecurity startup Wiz for a planned $23 billion have fallen apart, according to a person with knowledge of the discussions. In an email to employees sent Monday and viewed by the Wall Street Journal, Wiz chief executive Assaf Rapoport said the company is now aiming for an initial public offering. Here's another story, this one from Bloomberg. Crowdstrike outage is another sharp warning for banks. Relying on a handful of third party vendors creates risks for the financial industry the chaos that froze digital systems around the world on Friday is exactly the kind of crisis that financial regulators have been fretting about in recent years. What's worse, us bank supervisors have recently criticized leading lenders for poor management of such operational risks in private report cards. Together, theyre a wake up call about the dangers of a few dominant third parties providing critical services to the industry were 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 johnlotheanews.com trial. Thank you for your valued support.
[00:14:42] 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.
