Episode Transcript
[00:00:06] Welcome to the John Lothian News daily Update podcast for April 3, 2024. I'm your host, John Lothian. This podcast is brought to you by John Lothian News, the home of Markets, wiki and Marketswicky Education. Thank you for joining us.
[00:00:22] Here are the hits and takes comments from today's GLN attention parents of Chicago area students. The STAC Fund scholarship program for the 2024 2025 academic year is now open for applications. This is an incredible opportunity for high school seniors and college students alike to receive financial assistance for their educational pursuits. What's even better, the scholarship is available to all regardless of Stack affiliation. Last year, Stack awarded over $54,000 in scholarships to 18 exceptional local students, and this year it aims to make an even greater impact, spread the word and encourage eligible candidates to apply online before the April 17 deadline. The Security Traders association of Chicago has established this charitable fund to provide scholarship opportunities to deserving students. While stack members, their spouses and dependent children are eligible, relationship to a stack member is not required. Scholarships are non renewable and the number and amount of scholarships awarded annually will be determined by the committee. Candidates must be enrolled as full time students in a regionally accredited college and high school seniors are encouraged to apply. A minimum cumulative GPA of 3.0 is recommended and selection criteria include academic record, involvement in school and community activities, and or work experience.
[00:02:04] Priority is given to applicants residing within the Chicago area.
[00:02:09] Apply now through the Stack website with a link in today's newsletter Civil Clear Europe has joined CCP Global, the global association of Central Counterparties, as an observer member. At the March 2024 monthly meeting of CCP Global, the executive committee accepted CIBO clear Europe into its membership.
[00:02:35] In a recent interview conducted by the Options Insider with Cibo global markets head of global derivatives Catherine Clay. Topics explored included the future trajectory of zero days to expiration or zero DTE options and the feasibility of introducing one day ViX trading. The conversation also touched on the necessity of launching cash settled equity options prior to Tesla and Nvidia zero DTE options, the status of options on bitcoin ETF's and the potential arrival of tradable dispersion products. Furthermore, Clay shed light on CBO's role in re introducing variants to the market, hinting at forthcoming developments in the derivatives landscape. Ben Kaplan has written a book titled pipeline to the how d three small college nobodies rose to rule the NBA. Kaplan is a former Gelberg Group trader and former account executive with Drew Mauch three point communications. He wrote the book with his longtime friend and Chicago radio host Danny Perkins. The book seeks to uncover how a group of guys who could never play in the NBA still managed to infiltrate the best basketball league in the world, Kaplan wrote on LinkedIn.
[00:04:05] Speaking of basketball, the Wall Street Journal has a story about the remarkable run of NC State to get into the Final Four, and the odds, titled this Final Four team isnt a long shot. Its a 23,512 one miracle with the sub headline. Three weeks ago, NC State had next to no chance of making the NCAA tournament. Now theyre two wins away from a national title. The odds of that happening arent just small, theyre lower than the likelihood that youll be struck by lightning, the story says, according to DraftKings. If youd put $100 on NC State to win its first ACC tournament game and rolled over your winnings to bet on the Wolfpack in every game since that $100 would be $660,000, NC State currently has an 18% chance of beating Purdue, which gives a chance of playing in the national title around one in 130,000.
[00:05:15] That $100 bet would pay $3 million. Moral of the story dont bet against Zac Eady and the Purdue Boilermakers the April edition of Focus has been published by the World Federation of Exchanges, replete with reporting from the WFE Clear 2024 conference. Article includes BME CEO Javier Hernani's WFE clear keynote speech, in which he explains the importance of financial markets working together and Richard Haynes, deputy director, risk surveillance at the US Commodity Futures Trading Commission and Nancy Doyle, senior special counsel, sharing their thoughts on the recent BiscPMI Iasco proposals. Other contributors include Jose Manuel Ortiz Rapizzo, head of clearing and repo operations at six Gerard Smith, Nasdaq's head of trade product strategy Orly Grinfeld, head of clearing at the Tel Aviv stock exchange CFTC's summer mersinger and Bryan Steele of DTCC.
[00:06:34] Topping off the issue, Sir Dermont Turing, visiting fellow at Kellogg College, University of Oxford, looks at the battles in the war for clearing of euro denominated swaps. You can read and download focus with a link in today's newsletter. Our most read stories from our previous edition of JLN options were CBO eyes physically delivered vix options for us futures traders from Fow OCC, March 2024 monthly volume data from OCC and oil options markets turned bullish with rising geopolitical risks from Bloomberg. 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 an entry from the streetwise professor the missing the big point on FCM concentration and systemic risk the increasing concentration of future commission merchant, or FCM clearing broker business has been a pronounced feature of the world of derivatives markets in recent years. This has raised concerns among at least some regulators, including CFTC commissioner summer K. Mersinger in a recent speech. Generally Rah Rah Clearing mandates Commissioner Mersinger did raise one discordant note. Specifically, implementation of the Basel three standards would contribute to further concentration in FCMCB space. Second, the Basel III endgame proposal would weaken the clearing system by exacerbating the downward trend in the number of entities offering client clearing services. In January 2004, there were 177 futures commissioned merchants or fcms registered with the CFTC. 20 years later, as of January 2024, there are 62 fcms registered with the CFTC, representing a 65% decline. Over the same period, there has been a dramatic increase in customer funds held at fcms to support derivatives clearing. In January 2004, FCMS held over $87 billion of customer funds. Today, that smaller number of fcms is holding 5.5 times that amount of customer funds, $490 billion. And of that customer money, approximately 60% is concentrated in the top five fcms.
[00:09:28] My comment there's always an interest.
[00:09:32] The always interesting streetwise professor with a good dose of I told you so. Here's another story, this one from Bloomberg. The headline a hedge fund that's also a newspaper. Also Ajax Insider trading. Also Ajax Insider trading, FDIC versus index funds and SV e Sve Rip and Costco hot dog token by Matt Levine Hunterbrook we talked in November about Hunterbrook, a hedge fund that's also a newspaper. These are mostly tough economic times for the news industry, and Hunterbrook hit upon a differentiated media business model. They would start a newsroom, Hunterbrook media, to publish general news and investigative investigative journalism. There is no paywall and no advertising. But before each investigative piece is published, the newsroom would send it to Hunterbrook's affiliated hedge fund, Hunter Brook Capital, which could trade on the news the hedge fund's trading profits. Can, they hope, pay the journalist's salaries. My comment this is not the model I intended, but my original model included me running a CTA to help underwrite John Lothian news. Instead, JLN became all encompassing and self sustaining. Here are the top three stories from Tuesday's JLN. Our top story Tuesday was Nigeria to almost triple energy prices, keep subsidy for poor from Bloomberg. Second was regulating the robots, subtitled current SEC proposals seen as overreaching. But industry watchers see benefits if changes are made by Debbie Carlson for chief investment officer. Third was GE's final split, a breakup 130 years in the making. From the Wall Street Journal here are the top three stories from the lead section of today's GLN. First is from the Wall Street Journal. The headline business schools are going all in on AI. American University other top MBA programs reorient courses around artificial intelligence. It has eaten our world.
[00:12:02] At the Wharton school this spring, Professor Ethan Malek assigns students the task of automating away part of their jobs. Malek tells his students at the University of Pennsylvania to expect to feel insecure about their own capabilities once they understand what artificial intelligence can do. You haven't used AI until you had an existential crisis, he said. You need three sleepless nights.
[00:12:33] Here's another story, this one from Bloomberg. The headline fed blocks tough global climate risk rules for Wall street banks ECB has been pushing Basel committee to set requirements us european officials differ over approach for new standards us regulators, led by the Federal Reserve, have thwarted a push to make climate risk a focus of global financial rules, according to people familiar with the matter. European Central bankers have been advocating for the Basel committee on banking supervision to agree on requiring letters to disclose their strategies for meeting green commitments in closed door meetings. Us officials have cited their narrow mandate and concerns that the Basel committee was overstepping its purpose, some of the people said. Finally, here's another story from Bloomberg. The headline a european fintech hub prepares to get tough on crypto companies crypto sector failed when lightly regulated, Krebsta says Lithuania expects to issue full crypto licenses by 2025. Lithuania, which established itself as a hub for financial technology startups over the past decade, will weed out many of the crypto companies operating there when it starts awarding licenses next year. While some 580 crypto asset firms are registered in Lithuania, the number expected past the hurdle for obtaining full permits will be much lower, says Simonis Krepse, a central bank board member. The process is set to wrap up by June 2025, and unsuccessful applicants will leave the ecosystem, he said in a statement in an interview on Tuesday.
[00:14:28] 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 on 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 Channel 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 by Andrew Lothian.
