[00:00:06] Welcome to the John Lothian News daily Update podcast for August 14, 2024. I am your host, John Lothian. This podcast is brought to you by John Lothian News, the home of Marketswickie and Marketswicky Education. Thank you for joining us. Here are the hits and takes comments from today's GLN the Financial Times reported that Japans Prime Minister Fumio Kishida announced he will step down as leader of the ruling Liberal Democratic Party in September, effectively ending his tenure as prime minister. His decision follows months of low approval ratings, rising living costs, and a political funding scandal that led to the dismissal of four cabinet ministers in 2023. Kushida emphasized the need for the LDP to demonstrate change, starting with his resignation. This leadership change occurs as Japan strengthens its defense role in the Pacific and deepens security ties with the US amid concerns over Chinas rise economically, Japan has started to recover from prolonged deflation and low growth, attracting investors wary of geopolitical risks in China.
[00:01:32] Australia's market regulator, the Australian securities and Investments Commission, has sued the Australian Stock Exchange for making misleading and deceptive statements about its failed blockchain based clearing and settlement system upgrade, the Financial Times reported. Initially launched in 2017 as a pioneering project to integrate blockchain into global capital markets, the upgrade was abandoned in November 2022 after significant delays, ASICS lawsuit highlights a February 2022 ASX statement that falsely suggested the project was on track for an April 2023 launch. However, a subsequent review by Accenture revealed the project was only 63% complete. ASIC views this failure as a critical breach of trust impacting the entire market. ASX wrote off 250 million australian dollars in cost due to the projects failure and penalized former CEO Dominic Stevens by stripping him of 3 million australian dollars in long term bonuses. Current ASX CEO Helena Lufthaus acknowledges the seriousness of the legal proceedings.
[00:03:09] The SEC has charged Otclink, a us broker dealer and significant alternative trading system, with failing to file required suspicious activity reports, or SARS, over a three year period starting in March 2020, the Financial Times FT Alphaville Financial and Markets Regulation column reported. Despite being responsible for monitoring high risk micro cap and penny stock transactions, OTC links, anti money laundering, or AML efforts were minimal, with its chief compliance officer dedicating only 2 hours per month to AML oversight. The SEC alleges that Otclinc ignored numerous red flags, such as unusual trading volumes and patterns in micro cap stocks, and did not adequately review alerts from its automated surveillance system. The firm agreed to settle the charges by paying a $1.19 million fine without admitting guilt. Critics argue the penalty is insignificant compared to the firm's failures, amounting to little more than a cost of doing business. The veteran journalist, editor and corporate communications professional Eugene Coulter is joining MSCI as head of corporate communications. He has been with Tiaa, Nuveen, Blackrock, Pimco and peppercorn since leaving the Wall Street Journal as a news editor. Mandini Sukumar, CEO of the World Federation of Exchanges, appeared on CNBC Africa and discussed the surge in investor appetite for listed securities in the first half of 2024, noting that trading values are up 11.7% and volumes increasing by 9.6%, making the highest trading activity in five years.
[00:05:16] Our most read stories from our previous edition of JLN options were OCC welcomes Mayx Sapphire as newest options exchange from OCC WFE data trading value and volume surge as investors flock to markets from WFE and Wall streets crowded options trade survives recent stock market turmoil from Bloomberg subscribe to the free jail and options newsletter with a link in todays JLN. Here are more stories from the first read section of todays JLN. Heres a video from our OIC coverage trade stations James Putra talks with JLN about options, crypto, derivatives, AI and other trading tools at the OIC conference JLN spoke with James Putra, vice president and head of product at tradestation at the Options Industry conference in Asheville, North Carolina. The interview is part of the JLN industry video leader series sponsored by Occdez. In the interview, Putra talked about the pressure on the spot crypto market and said that trying to squeeze it into traditional finance is not necessarily better for the individual customer and brings high risk for that customer. Watch this video on johnlothianews.com.
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[00:07:44] Here's a story from Bloomberg. The headline hedge funds battle to turn GBT from intern into analyst Chris Pullman used to spend two days prepping previews for central bank meetings. Now it can take the chief economist at Blasny Asset Management as little as 30 minutes. Thanks to a new amped up generation of artificial intelligence, chat batts are now carrying out his time consuming research chores, everything from summing up the views of Wall street economists and generating charts to extracting the latest pronouncements from monetary officials and more. With Putman's input, the AI program then plugs all that market wisdom into a template to showcase his interest rate. Call my comment when chatgpt gets a boat ride at the end of the summer and has too much to drink, then it will have moved from intern to analyst. Here's another story, this one from the Financial Times. The headline cocoa costs barely affect what you pay for a freto.
[00:08:58] For that, be glad pond prices move inversely to yields. A recent main FT piece dissecting the jumping price for Australia's Fretto frog chocolates, known simply as frettos in the UK because it's obvious who Fredo is, prompted a valid response from readers that austere organ chocolate enthusiasts are presumably divided on this point. On the one hand, it's legally speaking a chocolate as opposed to something that is merely chocolate flavored. On the other hand, it, like most milk chocolate, is mainly a lot of things that are chocolate. Cocoa is the main problem for chocolate makers because its price has gone up. As a result, they'd really prefer to sell you as little chocolate as possible when you buy chocolate. My comment I'm just glad I don't eat chocolate frogs or any kind of frogs. Here are the top three stories from Tuesday's JLN. Our top story Tuesday was OCC welcomes my sapphire as newest options exchange from the OCC. Second was a sky full of our stars checking in on the graviton particle of economics from the Financial Times. Third was WFE data trading value and volume surge as investors flock to markets from the World Federation of Exchanges here are the top three stories from the lead section of todays JLN. The first story is from the Financial Times. The headline how hedge funds are fighting back against the SECs aggressive agenda funds have taken aim at us regulators authority in challenge to rule that would have forced greater transparency.
[00:10:51] In February 2022, the chief legal officer of hedge fund Citadel, Sean Fagan rang Eugene Scalia, the top lawyer who has made a career out of taking on us regulators.
[00:11:06] Fagan wanted Scalias help in challenging a newly aggressive securities and Exchange Commission, which under chair Gary Gensler was proposing rules that would bring private equity firms and hedge funds, part of a shadow banking sector whose rapid growth has alarmed regulators under closer supervision. It was a natural choice. Feigen had known Scalia for many years, having been a clerk at the US Supreme Court in the days when Eugene's father, Anton Scaglia, a conservative justice idolized by Republicans for his steadfast opposition to perceived government overreach, was on the court following the call.
[00:11:53] Citadel and other hedge funds and private equity firms opposing the plans decided on a strategy altogether more drastic than simply quibbling about individual aspects of the rule. They did not like challenging in court the SEC's very authority to introduce such legislation.
[00:12:15] Here's another story. This is also from the Financial Times. The headline australian regulators sue stock exchange over botched blockchain upgrade corporate watchdog says ASX made misleading statements about its clearing and settlement system Australias main regulator has sued the countrys stock exchange, alleging it made misleading and deceptive statements about its plan to upgrade its clearing and settlement systems to blockchain technology. The Australian securities and Investments Commission, which regulates companies in Australia, said in a lawsuit filed on Wednesday that there had been a collective failure by ASX's board and management when it tried to transfer its aging systems for settling trades to a blockchain based platform.
[00:13:10] And then finally, one more story, this one from Bloomberg. The headline world's top steel producer warns of severe industry crisis the worlds biggest steel producer sounded the alarm about an industry crisis in China that carries the potential to ripple around the globe and plunge the sector into a deeper downturn. Conditions in Chinas steel sector are like a harsh winter that will be longer, colder and more difficult to endure than we expected, China babu Steel group Corp. Chairman Hu Wangeming told staff at the company's half year meeting, warning of worse challenge than major traumas of 2008 and 2015.
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