Episode Transcript
[00:00:06] Welcome to the John Lothian News daily Update podcast for August 7, 2024. I am your host, John Lothian. This podcast is brought to you by John LothiaNews, the home of Marketswiki and Marketswiki education. Thank you for joining us. Here are the hits and takes comments from today's JLN back on August 1, CNBC published a video titled Putin's Trader that was about a big inside trading ring on Wall street run by the russian oligarch Vladislav Kliushin, the owner of a cyber security company in Moscow called M 13. His firm was secretly a front for a hacking and insider trading operation that plagued Wall street for years, generating more than $90 million in illicit profits, CNBC said. CNBC was ready to go with the story about insider trading when Kyushin was among the eight Russians repatriated as part of the prisoner swap that brought home the Wall Street Journal reporter Evan Gurshkovic and ex US Marine Paul Whelan. You can watch the YouTube version of the report by CNBCS Eamon Javers that reveals shocking details of this audacious criminal enterprise and an interview with a former russian spy.
[00:01:39] Bloomberg has a story about how japans $1.1 trillion stock meltdown rewrote the record books to summarize the story, Japan's stock market experienced a dramatic three day crash, with the topics index and Nikai 225 plunging 12% on Monday, marking their largest decline since Black Monday in 1987. Over three days, the market dropped 20%, wiping out $1.1 trillion in value, equivalent to Sweden's entire stock market cap. Monday also saw the highest value of shares ever traded at 7.97 trillion. Japanese yen, or $55 billion. Volatility surged, triggering ten circuit breakers, the most in a single day since 2016. Despite a sharp 10% rebound on Tuesday, the market remained significantly impacted, with only 20 out of over 2000 stocks rising on Monday.
[00:02:44] The Department of justice issued a press release yesterday titled Pakistani national with ties to Iran charged in connection with foiled plot to assassinate a politician or us government official that media outlets are saying was a plot to assassinate former President Donald Trump, or not, depending on the coverage. Here is your coverage from CNN and Reuters.
[00:03:10] Bloomberg reported that the Federal Reserve's reverse repo agreement RRP facility usage fell below $300 billion, down from a peak of 2.55 trillion in December 2022. This indicates reduced excess liquidity in the financial system. The Fed's slower pace of balance sheet reduction since June has eased money market rate strains. JP Morgane Dick's RRP balances will remain slightly below 300 billion through year end. Demand for the facility dropped by $1.8 trillion from June 2023 to April 2024, but has stabilized with lower bill issuance and interest rate cut. Uncertainties balances have been declining since mid July.
[00:04:04] Cibo Global Markets today announced plans to launch options on VIX features to expand their volatility product suite. The new options based on front month VIX futures aim to provide a new tool for managing market volatility and meet global demand for hedging. These CFTC regulated options will be available on October 14, 2024, pending regulatory review, and will allow more market participants to express views on equity market volatility.
[00:04:36] I was headed to bed last night. It was late, but my wife was up watching the Olympics and she called me into the living room to see something speed climbing. I had never seen this sport before. It is climbing a climbing wall as fast as you can. The Wall Street Journal has a story about it titled the most gruesome 4.75 seconds at the Olympics, with the sub headline speed climbing is the fastest sport at the Paris Games, which is a good thing since it inflicts a catalog of stomach churning injuries, including fingernails that get torn clean out of their beds.
[00:05:16] Michael Everett has joined tradition as global head of e commerce and digitalization, based in London. He shared on LinkedIn Eric Cott is starting a new position as director of sales marketing at RIA database. He shared on LinkedIn our most read stories from our previous edition of JLN options were former ABN AMro executive Mike Dennis discusses market trends and opportunities in crypto and fixed income at Options conference from John Lothian News Agricultural Futures navigating the Fields Futures Discovery episode twelve from John Lothian News and S and P 500 put option volume hit record on Monday from Market Watch. 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 episode twelve of futures discovery agricultural navigating the fields today, we are delving into the intricate world of agricultural futures, a realm shaped by the rhythm of nature and the pulse of global markets. In this episode, well explore the quantitative challenges that traders face in the real world. It's not just about numbers on a screen. It's about the unpredictable nature of weather, critical data on crop reports, and a global dance of trade policies. Watch this video with an interview with Jack Scoville by Cortez Draper on johnlothianews.com.
[00:06:57] here's a story from the Financial Times the headline why you should sell shares in your company immediately. Diversifying exposure away from an employer makes cold financial sense. I have enjoyed a long career in the financial advice business, so it's no surprise that I am often asked what is the best advice given to me. This came from a grizzled colleague many years ago. Rob when your employee stock vest, sell it immediately. Wait a week. If the only investment that you can think of putting all that cash back into is the same stock, then buy it back again. When I thought of it like that, of course I never bought it back in my comment. Sometimes you can and sometimes you can't. Here's another story, this one from the Financial Times Stephen Schwartzman runs into Newt headache at his 80 million pound UK estate Blackstone boss regaled Chancellor Rachel Reeves with planning ordeal before her us trip. Stephen Schwartzman is used to besting Wall street rivals, but amid the rolling hills of southern England, the Blackstone boss has run into a formidable new opponent. The great crested Newt. Schwartzman has been updating Rachel Reeves, UK chancellor on the hopes that he has to go through to avoid disturbing the amphibians during work at his 80 million pound country estate in Wiltshire. My comment this could turn into a real froglum for Schwartzmande. Here's another story, this one from the Financial Times. The headline Musk's esks sues brands and trade group over advertising boycott billionaire owner of social media platform has accused global alliance for responsible media and some of its members of illegal collusion.
[00:09:03] Elon Musk's ex is suing a marketing industry, trade body and advertisers, including Unilever and Mars, for an illegal boycott of the platform that it claims violates antitrust law, escalating a spat between the billionaire and some of the social media's app's biggest sources of revenue. My comment it's not collusion. When many people independently reach the same conclusion and act in their self interest and that of their companies, stupid is as stupid does. Here are the top three stories from Wednesday's Jelna our top click story on Wednesday was Cub Scouts race Pinewood derby cars at Woodfield, a video from Chicago's WGN Channel nine News. Second was the treasury market scandal hiding in plain sight from the Wall Street Journal. Third was the life tributes page from the family of the late Scott Eisner on the Morris Funeral and Cremation Care website. Here are the top three stories from the lead section of today's JLN. The first story is from Bloomberg. The Japan morphs into center of worry for global investors, sharp rise in the yen undercuts profitable carry trades market whipsaw with steepest drop in more than 30 years in less than a week, Japan has completely upended the world's expectations for its markets and economy. The country was the darling of the financial world for over a year. Its weak currency pushed the stock market to record highs and rekindled inflation after decades. Then the bank of Japan hiked rates last Wednesday, and Governor Kazuo Uida indicated he intended to keep going, helping trigger a sharp rise in the yen and wild gyrations across global markets. Traders and investors were forced to abandon strategies based on macro views that japans currency would stay weak and interest rates wouldnt rise too fast. The next story is from the Financial Times. The headline unwinding of yen Kerry trade still threatens markets, say analysts resurgent japanese currency forces speculators to shut down years worth of bets that could run into trillions of dollars. The global unwinding of the world's biggest carry trade has the potential to destabilize markets further, analysts have said, as the resurgent japanese currency forces speculators to shut down bets that could run into hundreds of billions of dollars over the past three years. The yen version of the carrying trade, borrowing in a low interest rate country to fund investment in assets elsewhere that offer high returns, has exploded because of the Japan's ultra low rates.
[00:12:01] And then finally, here's another story, this one from the Financial Times. The headline SEC investigating Wall street banks over billions in lost interest payments lenders face scrutiny over sweeping idle client cash into other investments and pocketing the difference. The US securities and Exchange Commission is investigating allegations that Wells Fargo, Morgan Stanley and other Wall street groups have been systematically cheating customers out of billions of dollars of interest payments. The probe into cash sweep accounts comes as a number of companies have increased the interest they are paying clients, but the rates being offered to savers, particularly by the nations largest banks, remain far lower than the returns paid to banks based on short term interest rates set by the Federal Reserve.
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