Episode Transcript
[00:00:06] Welcome to the John Lothian News daily Update podcast for July 17, 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 JLN.
[00:00:27] Miami International Holdings, Inc. Or MIH, announced that the SEC has approved Mayx Safire LLCs application to become a national securities exchange.
[00:00:42] Mayx Sapphire, MIH's fourth national securities Exchange for US multi listed options, will feature both an electronic exchange launching on August 12, 2024 and a physical trading floor opening in 2025. This will be the first national securities exchange to establish a presence in Miami, Florida, and will include advanced trading facilities, office space, conference rooms and a media broadcast area.
[00:01:17] Bloomberg is reporting new research from a senior fellow at the Wharton School challenges the idea that the correlation between wealth and happiness plateaus after reaching a certain income level. Matthew Killingsworth's updated study finds that millionaires and billionaires are significantly happier than those earning over $500,000 annually, extending the positive association between money and well being far up the economic ladder. This study builds on previous work, including reanalysis with psychologist Daniel Kahneman. Disputing a 2010 paper that suggested happiness levels off at incomes between 60,000 and $90,000. Killingsworth findings indicate that people with higher net worths report significantly greater life satisfaction compared to those with lower incomes, highlighting a substantial, substantial difference in happiness between the richest and middle income groups. If you don't have the money to be happy, you might check out doctor Ruth Westheimer's tips for a happy life, courtesy of the New York Times.
[00:02:40] Stephanie Dobbs Brown posted to LinkedIn that after seven years and much reflection, she has decided to step down as chief marketing officer at ICE and NYSE. We thank her for all her great work and wish her well at what she does next, which I know will be terrific.
[00:03:00] In his July 15 column, Bloomberg's Matt Levine explores the potential for lucrative non disclosure agreements in finance, particularly in the context of whistleblower protection rules enforced by the US securities and Exchange Commission, or SEC. Levine humorously suggests a scenario where one could profit by reporting confidentiality agreements to the SEC, which interprets such NDAs as potentially obstructive to whistleblowing. The SEC can fine companies for these NDAs, and whistleblowers may receive a substantial portion of the fine as a reward.
[00:03:41] Additionally, Levine touches on various topics, including sports, gambling limits, the fintech company stripe, and the evolving landscape of stablecoins and meme coins. He provides insights into how these elements interact within the broader financial and regulatory environment. Reflecting his extensive background in finance and law, Memex recently made some changes to their equity fee tiers because of a surge in activity with stocks priced under $1 in June. These sub dollar one stocks made up 17% of all trades and Memex captured a significant 46.2% of the TRF market share. The month also saw a higher than usual auction volume due to index rebalances, making up 13.9% of total volume. Memex options market is also doing well with a 4.3% share of regular electronic trading in June, which has increased to 5.4% so far in July. In terms of popular ETF's mammock's regular electronic options, market share this month is 7.8% for SPY and 4.9% for QQQ and 6.8% for IWM. Notably, Memex options quoting performance has improved significantly, ranking second out of 17 exchanges for spy trading this month. On July 17, Fow reported several noteworthy updates behind its paywall. The International Swaps and Derivatives association, or ISDA, is seeking new members for its ISDA futures leaders in derivatives, or IFLD program to conduct research on collateral and liquidity. CME Group announced it will delist its Bloomberg administered BSBY futures on October 11, marking its exit from the controversial credit sensitive rate market. Wells Fargo has become the latest member to join LCH forex clear, making it the third new member in the past year. European regulators plan to establish a cyber attack coordination committee ahead of new regulations coming into effect next year.
[00:06:16] Lastly, global FX derivatives volumes plummeted in the second quarter of 2024 due to significant rule changes in India, severely impacting the world's largest FX market.
[00:06:31] On July 16, Fow reported several significant stories that are behind its paywall. Merrick's has appointed Mackenzie Billings from CME Group to head its new division, overseeing introducing brokers in derivatives. Additionally, Merex hired Malcolm Bradford from Bank of America Merrill lynch to enhance its futures options and OTC clearing sales following its recent Nasdaq listing. The European Energy Exchange, or EEX, saw a significant increase in power futures volume in the first half of the year, driven by high demand for german, french, italian and spanish power futures as well as dutch natural gas futures. Horizon Trading Solutions expanded its services to asian clients by launching mutualized hosting services via Hong Kong exchanges and clearing, building on recent successes in North America. Lastly, CME Group's expansion in its rates franchise is showing promising results with a notable surge in options trading on us treasuries, reflecting a broader shift in market structure.
[00:07:51] Coindesk is reporting that after the recent court case, Craig Wright has added an admission to his website that he is not Satoshi Nakamoto, the alleged inventor of bitcoin. He has also added a notice to his website that he is, however, batmandhouse our most read stories from our previous edition of Jalen options were Blackrock says active ETF's poised to hit $4 trillion by 2030. From Bloomberg crypto options traders can soon target bets on us presidential results from Bloomberg and my skepticism persists despite BlackRock's Larry Fink's reversing stance, declaring bitcoin a legitimate financial instrument of from John Lothian News 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.
[00:08:50] Here's a video from our OIC coverage. Options Education goes mobile how Matt Cashman is bringing Wall street to your pocket in the dynamic world of financial derivatives, Matt Cashman of the Options Industry Council, or OIC, is on a mission to demystify the complex realm of options trading. As part of the OIC's investor education team, Cashman is at the forefront of a digital revolution in financial literacy, adapting to the changing habits of a new generation of traders. You can watch this video on johnlothiannews.com.
[00:09:29] here's a commentary on LinkedIn from Metro trade. The headline that's why we did it. The case for Chicago Chicago has been taking it on the chin for a few years, so we felt it was time to go on a fence and review why we chose to make the city of big shoulders our corporate home. We decided to start our business in Chicago for three strategic reasons. Chicago's financial background as a hub and center of expertise for the futures business the ecosystem of supporting businesses, exchanges and infrastructure that background has created and sustains, and the strategic location and connectivity of Chicago provides my comment. David Klotz and I have one thing in common for sure. We love Chicago.
[00:10:22] Here's a posting to LinkedIn from FIA Inc. FIA, June 2024 highlights of on June 17 19th, FIA hosted its annual international derivatives Expo in London, bringing together the clearing firms, exchanges and vendors that drive the growth of the clear derivatives industry in Europe and around the world. FIA held panels, keynotes, fireside chats and debates on regulation, the future of markets, operational efficiency and resilience, commodity markets in Europe and the latest innovative technology. FIA president and CEO Walt Lucan set the tone for the conference during his opening remarks highlighting the good news stories in our industry, from growing volumes and competition to the transformative technologies impacting our markets for the better.
[00:11:16] The FIA was busy in June.
[00:11:20] Here's a story from blockworks from Byron Gilliam the headline trust matters history's first known currency is thought to be Barley, which was used in ancient Mesopotamia from around 3000 bc as both a unit of account and a means of exchange, a seminal first step away from barter based economies and towards markethood based ones.
[00:11:50] An interesting look at trust and trustlessness.
[00:11:55] Heres a story from the Wall Street Journal hearing and secret trial of falsely accused Wall Street Journal reporter Evan Gurchkovich brought forward proceedings initially scheduled to take place on August 13 are now slated for July 18.
[00:12:14] Proceedings in the secret trial of Wall Street Journal reporter Evan Gurshevich are set to resume Thursday, almost a month earlier than originally scheduled, after a request from his defense team, according to the russian court, where he faces a false accusation of espionage. The 32 year old american journalist has been imprisoned since March of last year, when he was arrested by the country's federal security service, or FSB, while on a reporting assignment in Jetaderenburg, around 900 miles east of Moscow. My comment free Evan now here are the top three stories from Tuesday's JLN. Our top story Tuesday was the Washington Post representative Wexton, confronting degenerative disease, finds her voice through AIH. Second was pity hedge funds that lost in electricity chaos? No, really, an opinion piece from Javier Blass at Bloomberg. Third was OCC's tech overhaul poised to reshape options trading? A JlN video interview with Mike Hanson at Occ.
[00:13:31] Here are the top three stories from the lead section of today's JLN. Here's a story from Bloomberg. The headline Wall street starts calling time on ESG labels after backlash, an institutional investor keeper of Wall Street's version of the oscars for financial analysts. The winner in one category this year is nobody. The red carpet is being formally rolled up for the three letters ESG. The 57 year old II has dropped the label, short for environmental, social and governance, from its annual analyst rankings. In its place, is sustainability, a synonym many banks and money managers are using instead, amid the increasingly politicized debate over climate change and corporate diversity in the US. This is how it is these days for ESG in american finance, the label, which emerged from obscurity only to be hyped by Wall street and then attacked by republican politicians, being scrubbed from some investment products and job titles.
[00:14:37] Here's another story, this one from Bloomberg. The headline a fintech's collapse raises questions about a hot business model. Tech companies found a way to sell FDIC back to accounts without being banks. Then one firm lost track of customers money.
[00:14:57] Over the past decade, dozens of financial technology companies have linked up with small and mid sized banks across the country. The idea? The fintechs would create slick smartphone apps and offer useful new services to lure customers. And banks would hold onto the deposits, generating lucrative fees from transactions. Importantly, the arrangement allowed the fintechs to tout protection from the Federal Deposit Insurance Corporation. But now, as millions of dollars worth of deposits remain frozen months after the collapse of a company called Synapse Financial Technologies, that supposed FDIC protection has come into clearer focus. And those partnerships are facing tough questions.
[00:15:47] Here's another story, this one from Bloomberg the headline Charles Schwab sinks after vowing to shrink bank over time Charles Schwab Corporation shares suffered their biggest intraday drop since the depths of last year's regional bank crisis after the investing giant warned it will have to shrink itself in order to protect profits going forward, Schwab is planning to rely more on off balance sheet arrangements to house customer deposits. Chief executive officer Walt Bettinger sat on a conference call with analysts. By relying on partners like Toronto Dominion bank, such deals would allow Schwab to more efficiently use capital, he said.
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