Episode Transcript
[00:00:06] Welcome to the John Lothian News daily Update podcast for February 7, 2024. I am your host, John Lothian. This podcast is brought to you by John Lothian News, the home of markets wiki and markets wiki Education. Thank you for joining us. Here are the hits and takes comments from today's JL I am big enough, I trade enough, and gosh darn it, the SEC wants to regulate me. Yep, the US securities and Exchange Commission finally came out with the new rules for oversight of hedge funds and high speed traders of a certain size participating in the US government bond markets and stock market. At the center of the new rules, which include capital requirements, registration of activities, and activity reporting, is what is the definition of a dealer? The SEC said in a press release that it has adopted rules to include certain significant market participants as dealers or government securities dealers. Research cited by the SEC indicates that unregistered market participants behaving like dealers made up approximately half of the daily treasury trading activity across electronic platforms in recent years, the Wall Street Journal reported. Overall analysis revealed that the new dealer rule could potentially affect up to 43 firms. However, those overseeing assets of less than $50 million would be exempt from compliance. CME Group said it will launch us corporate bond index futures in summer of 2024, expanding its interest rate complex to provide market participants with tools for managing growing credit exposure pending regulatory review. I received a letter in the mail from a company I had never heard of before, Keenan and Associates. The letter explains that it is an insurance brokerage company that provides insurance related risk management and claims services throughout California and to clients across the country. They wrote because they experienced a cybersecurity incident on some Keenan network servers, and that data obtained from Keenan servers included my date of birth, Social Security number, passport number, driver's license number, health insurance information and general health information. Wow. Now what's interesting to me is that I don't ever remember giving my passport number to any healthcare provider. So I'm wondering how Keenan and associates came across that information. Or if the Keenan client was the US government who has access to my passport number, then why would the government want or need my general health information? The letter also includes a free 24 month subscription to experience identity works credit one b product that helps protect the possible misuse of my personal information. Maybe the whole thing is a come on for selling identity theft protection. Who knows? But I guess I will sign up our most read stories from our previous edition of JLN options were Urex launches mid curve options on euro stocks 50 index dividend futures from FX News Group we're heading for new cryptocurrency crisis, predicts Wall street veteran from the Daily Mail. SEC forces hedge funds high frequency traders to register in latest showdown with industry for 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. We have episode six of futures Discovery Futures Discovery regulation and do you need to be registered? Today we're diving headfirst into a crucial topic that affects every trader's journey into the world of futures trading regulation and do you need to be registered? Buckle up as we unravel the intricate web of rules and regulations that shape the landscape of the futures market. You can watch this video on johnlothiannews.com.
[00:04:24] Decline of the Star stock Picker investors pull $150,000,000,000 from equity hedge funds clients tire of managers poor returns in bull and bear markets. Equity long short funds have underperformed the US stock market in nine out of the last ten markets.
[00:04:47] One of the oldest and best known hedge fund strategies has suffered nearly $150,000,000,000 in client withdrawals over the past five years as investors tire of their inability to capitalize on bull markets or protect them during downturns. So called equity long short funds, which try to buy stocks to do well and bet against names set to perform poorly, have underperformed the US stock market in nine out of the past ten years, according to Nasdaq investment, after failing to adapt to markets largely dominated by central banks. My comment the long and short of this is Enie Meanie Minimo is not working as well anymore. Here's another story. This one is from the Financial Times as well. The headline New York Community bank seeks to reassure investors after Moody's downgrade regional bank promotes former flagstar chief to executive role after rating cut to junk us regional lender New York community Bancorp has sought to reassure investors that it is still taking in new deposits after a week in which it saw its share price has more than halved and it was downgraded to junk status by Moody's. The bank also announced that Alessandro Dinelo, the former chief executive of Flagstar bank, which NYCB bought in 2022, would take on an executive role. My comment remain calm. All is well.
[00:06:26] Here's another story, this one from the Financial Times as well. The headline meme lord lit quidity reveals his true identity. Banker, whose satirical alter ego gained, cult like following on Wall street, talks exclusively to the Financial Times, being friends with Hank Medina is a dangerous game, better known by his pen name, lit quidity. He is always quietly looking for content, and even your attire could turn you into a viral meme. People who know him say Medina is the last person you would expect to be the thin meme lord who has built a following of 800,000 followers on Instagram. He is soft spoken, polite, the opposite of his Patrick Bateman meets enthusiastic junior analyst alter ego. My comment? Good thing the identity of meme Lord loquacious has not been discovered yet. I am still safe. Oops. Here are the top three stories from Tuesday's JLN. Our most click item Tuesday was Intercontinental Exchange Reports January 2024 statistics from the Intercontinental Exchange, or ICE. Second was our markets wiki page for Jamal Cole, the founder of my block, my hood, my City. Third was Sibo Global Markets reports trading volume for January 2024 from Sibo Global Markets. Here are the top four stories from the lead section of today's JLN. The first story is from Bloomberg. The headline is SEC increases oversight for hedge funds high speed traders traders and funds have warned that the cost of new rules could lead them to pull back from key markets. Wall Street's top regulator extended its authority into new corners of the financial industry on Tuesday, adopting rules targeting firms that are among the most active buyers and sellers of U. S. Government bonds and stocks. The securities and Exchange Commission will now require dozens of firms, including high speed traders and hedge funds, to face new capital requirements, register their activities and report more information on their transactions. The changes resulted from the SEC's three to two vote to broaden its definition of what it considers to be a securities dealer.
[00:08:54] The next story is from the Financial Times. The headline Brussels agrees new rules to shift derivatives clearing from London EU based traders required to send minimum amount of swaps contracts through active accounts. Brussels has agreed rules that will force derivatives traders to funnel part of their deals through accounts at clearinghouses in the bloc in a plan to wrestle a share of the vast market away from the City of London. The revised rules, agreed early on Wednesday, will force EU based banks trading quantities of contracts that are deemed systemic by regulators to send a minimum amount of business to an EU clearinghouse. The next story is from Bloomberg. The headline U. S. Commercial real estate contagion is now moving to Europe. Bonds on Deutsche PBB suffer over banks property exposure warning signals from US to Asia have multiplied recently. The troubles in the US commercial property market, which have already hit banks in New York and Japan, moved to Europe this week, elevating fears about broader contagion. The latest victim was Germany's Deutsche Flandbrief bank AG, which saw its bonds slump on concern about its exposure to the sector. It responded by issuing an unscheduled statement Wednesday that it had increased provisions because of the, quote, persistent weakness of the real estate markets, unquote. It described the current turmoil as the, quote, greatest real estate crisis since the financial crisis, unquote. Here's another story, this one from Bloomberg. The headline faster us stock trading has currency market anchor ClS on edge. An estimated $65 billion of trades could miss a faster cutoff. CLS says around a third of asset managers not ready for shift. CLS, the world's largest foreign exchange settlement firm, is racing to figure out a way to get the $7.5 trillion a day currency market ready for a huge change to trading in us stocks. The US is less than four months from introducing what's known as t plus one, when it will half the time it takes to complete equity transactions to just one day. The move will leave the world of foreign exchange, where trades typically take two days to complete out of step 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 daily John Lothia newsletter, email yet, you can enjoy a complimentary 90 day trial by visiting johnlothiannews.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 Andrew Lothian.
