May 19, 2005
Lead Stories
Greenspan slams Freddie, Fannie again
Federal Reserve Chairman Alan Greenspan took aim on Thursday yet again at Fannie Mae and Freddie Mac while other
New exchange seen as big step on long march to yuan reform
CBOT Exchange-Wide Open Interest Surpasses 15 Million Contracts
Open interest in Ten-Year U.S. Treasury Note contracts set new records
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1036+28305,00.html
US must create single financial regulator
By Gary DeWaal
Recent announcements of acquisitions and initial public offerings by the New York Stock Exchange, Nasdaq and the Chicago Board of Trade have helped draw attention to a tectonic shift in the structure of global financial markets. Regulators in most of the world's large financial centres have recognised and responded to this change. But not in the
Present US financial regulation is founded on a faulty premise: that there is such a fundamental difference between securities and futures markets that a bifurcated system of regulation is necessary, with equities and bond issuance and trading subject to one regulatory system and futures trading to another. This approach may have made sense in another era, when most futures contracts covered commodities and foodstuffs rather than government securities, equities and currencies, which now dominate trading. Today, most of the world's financial regulators view all types of financial instruments as deserving a common regulatory scheme. This approach is not only preferable for market users but it is also a much more efficient use of government resources.
**** Online FT Subscription required. Mr. DeWall is Fimat’s General Counsel.
Senator Questions NYSE, Nasdaq Mergers
With the New York Stock Exchange and the Nasdaq Stock Market both planning mergers that will make them bigger and more dominant, a key senator expressed concern Wednesday that the market-shaping changes could hurt competition and affect investors.
http://www.toptechnews.com/news/Senator-Questions-Mergers/story.xhtml?story_id=10200AB6C1NO
SEC's
U.S. Senate Democrats plan to propose Annette Nazareth as the newest member of the Securities and Exchange Commission, turning to one of the agency's top officials at a time of partisan wrangling over the scope of regulation.
http://www.bloomberg.com/apps/news?pid=10000103&sid=adXMPlFb0zlM&refer=us
Senate Dems tap SEC staffer for commission seat
Senate Democrats are recommending a U.S. Securities and Exchange Commission staff member, Annette Nazareth, to fill a Democratic slot on the commission that is expected to open up this summer, lawmakers said on Wednesday.
http://www.reuters.com/newsArticle.jhtml?type=politicsNews&storyID=8533111
MarketAxess joins credit derivatives fray
Two weeks after TradeWeb announced plans to launch an online market for credit default swap (CDS) indices, rival platform MarketAxess says it is developing its own CDS index dealing system which will be launched later in the year.
http://www.finextra.com/fullstory.asp?id=13690
New CDS trading platform on track
MarketAxess said yesterday its electronic trading platform for dealing in credit default swap indices was on course to launch in the second half of the year. The announcement followed a similar statement by rival Tradeweb last week and highlighted the increased attention being paid to the trading of credit derivatives.
http://news.ft.com/cms/s/a30e362c-c802-11d9-9765-00000e2511c8.html
BoE governor warns on derivatives risk
Sir Andrew Large, deputy governor of the Bank of England, on Wednesday joined the ranks of central bankers who have warned recently about the risks inherent in the growth of the derivatives markets. Speaking at a banking conference in
http://news.ft.com/cms/s/14ec840c-c7df-11d9-9765-00000e2511c8.html
Oil-oriented ETF filed with SEC
Standard Asset Management has filed an exchange-traded fund with the Securities and Exchange Commission that, if approved, would track the price of crude oil.
World’s First Commodity Index ETF Launched in the XTF Segment
Deutsche Börse is providing a further innovative product in its segment for exchange-traded index funds. The world’s first commodity index ETF has been available for trading in XTF since Thursday. EasyETF GSCI, which tracks the Goldman Sachs Commodity Index, is issued by AXA Investment Managers (AXA IM) and BNP Paribas. Goldman Sachs will act as designated sponsor.
Make sure contracts terms are fair, FSA tells firms
The Financial Services Authority today set out the standards it expects regulated financial services firms to meet when writing contracts for their products and services. The watchdog has issued a Statement of Good Practice about fairness of contract terms as part of its work to help retail customers achieve a fair deal, one of its three business priorities.
http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/051.shtml
Exchange & ECN News
LSE boasts of beating Borse and Euronext
LONDON Stock Exchange chief executive Clara Furse came out fighting today, declaring that the LSE had done much better than its two European rivals who looked at taking it over in the past six months.
http://www.thisislondon.co.uk/news/business/articles/timid400674?source=This%20is%20Money#
LSE profits up as talks continue
The London Stock Exchange (LSE), which was at the centre of a failed takeover bid by German exchange Deutsche Boerse, has announced a rise in annual profits.
http://news.bbc.co.uk/1/hi/business/4561699.stm
LSE's Dutch trading service under review
The London Stock Exchange is reviewing the performance of its EuroSets Dutch Trading Service, which has fallen well short of expectations by capturing less than two per cent of the market since launching in May last year.
http://www.finextra.com/fullstory.asp?id=13695
Deutsche Bank chief to quit in two years at latest
Deutsche Bank chief Josef Ackermann is to step down as head of
CME Announces Certified Options Partner Program
As part of its initiative for increasing the volume of electronic trading for options on foreign exchange, equity indexes and interest rates, CME, the largest futures exchange in the
http://biz.yahoo.com/prnews/050519/cgth031.html?.v=10
**** Note from CME Source: This announcement means that twelve front-end providers are now certified to allow customers to trade CME options on CME Globex. Five of the listed providers are critical since they will be able to provide mass quoting capabilities and market maker functionality. This demonstrates that CME is gearing up for increased trading of options on CME Globex, particularly in
Exchange Announces Procedures for the Transition of the e-miNY Futures Contracts to NYMEX ClearPort
New York Mercantile Exchange, Inc., will transition its e-miNYsm crude oil and natural gas futures contracts to NYMEX ClearPortsm from the Chicago Mercantile Exchange GLOBEX® system on June 20. After the transition, the contracts will be referred to as the NYMEX miNYsm contracts.
http://www.nymex.com/jsp/news/press_releas.jsp?id=pr20050518b
Program Trading Averaged 54.9 Percent of NYSE Volume during May 9-13
The New York Stock Exchange today released its weekly program-trading data submitted by its member firms. The report includes trading in all markets as reported to the NYSE for May 9-13.
http://www.nyse.com/Frameset.html?displayPage=/press/2_2005.html
CBOT Financial Options Expiration
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28294,00.html
CBOT Dow Jones Industrial Average Index Futures Options Expiration
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28293,00.html
CBOT Clarification to Regulations 431.01 & 431.06 Margins
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28299,00.html
CBOT Agricultural Options Expiration
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28295,00.html
E-CBOT Dow Jones Strike Price Notice, May 19, 2005
http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28292,00.html
Regulatory News
The SEC News Digest
The SEC News Digest provides daily information on recent Commission actions, including enforcement proceedings, rule filings, policy statements, and upcoming Commission meetings.
http://www.sec.gov/news/digest/dig051705.txt
Investment Telemarketer Settles With FTC
The Federal Trade Commission settled a lawsuit yesterday against a man the agency accused of using deceptive telemarketing calls to dupe investors into losing money on foreign currency speculation.
http://www.dmnews.com/cgi-bin/artprevbot.cgi?article_id=32835
Managed Futures - Managed Funds
A Little Fund With Big Demands
TCI has moved to the forefront of a new breed of restless shareholders in
http://www.businessweek.com/magazine/content/05_21/b3934161_mz035.htm
Reports
Bond Talk Today's Events
http://www.bondtalk.com/global.cfm?S=todaysevents
USDA Today
http://www.usda.gov/nass/PUBS/TODAYRPT/TODAY.HTM
Miscellaneous News
Cargill Gets Approval for Acquisition of Romanian Oil Company, Olpo
Cargill has received approval from the Romanian competition authorities for the acquisition of the oilseed crushing, refining and bottling company, Olpo.
http://www.cargill.com/news/news_releases/050518_olpo.htm#TopOfPage
Morgan Stanley Legal Loss Adds to Pressure on Purcell
Morgan Stanley faces potential legal costs of about $1.4 billion, the latest setback for Philip Purcell as he fends off calls for his ouster as chief executive officer of the world's biggest securities firm by market value.
http://www.bloomberg.com/apps/news?pid=10000103&refer=us&sid=aKKAkyUPNNsg
HedgeStreet Unveils Incentives for Market Participants
HedgeStreet, Inc., the first U.S. government-designated online financial market that lets traders buy and sell innovative financial instruments based on economic events, today rolled out a package of incentives designed to further enhance liquidity and make trading on the exchange even more accessible and cost efficient.
http://biz.yahoo.com/bw/050519/195361.html?.v=1
What's Second Prize? A reality check on what 'The Apprentice' winners won
As the winner of the second "Apprentice," Kelly Perdew should be in line for a top job in the Trump organization. But you'd never know that from his office. His desk is in a small, windowless space next to the assistant to Donald Trump's wife, Melania (Perdew has no assistant).
http://www.msnbc.msn.com/id/7856555/site/newsweek/
***** Wait… a TV game show that doesn’t accurately represent that the true outcome is more pointless and boring than was presented??? Good heavens, it’s almost as if it’s… entertainment!
Other Voices
From email received today…
PENSON WORLDWIDE TO ACQUIRE COMPUTER CLEARING SERVICES
Penson Expands Global Client Base to over 225 Following Acquisition
Penson Worldwide, Inc., a leading provider of execution, clearing, custody and technology infrastructure products and services to the global securities market, today announced that its subsidiary, SAI Holdings, Inc., intends to acquire Computer Clearing Services (CCS). Headquartered in
Daniel P. Son, President of Penson Worldwide, says: “CCS’ focus on leading edge technology in the
Richard W. Barber, President, CCS, comments: “Penson’s host of leading-edge solutions and streamlined services provide superb added-value to our customer base. Penson and CCS’ business models share their focus on ensuring the most efficient use of technology to enable our respective clients to build and maintain their competitive edge. Now, as a combined team, we look forward to helping our customers continue their business growth, offering the most efficient and effective solutions within a flexible framework.”
Thanks to this acquisition, CCS correspondent clients will have access to Penson’s comprehensive range of products, services and technology solutions, from Direct Market Access execution, OMS, historical and real-time market data to clearing, custody and settlement services. Of particular interest to CCS’ retail and institutional broker-dealer client base, Penson can provide immediate access to its futures and currencies trading, international markets and proprietary trading platforms.
The closing of this acquisition is subject to obtaining various consents and the fulfillment of certain conditions and is expected to occur during the third quarter of 2005
John's Jon’s Comments
E-MOO Volume
No, not emus, I’m talking about e-Livestock numbers from the CME. Yesterday showed more than a thousand meat contracts trading, 480 cattle & 613 hogs.
In Defense of Repetition
Mr. Lothian, who normally edits this newsletter for those not keeping track, noted that last week during my brief appearance I had repeated some of his links from previous days. His contention was that I hadn’t been reading his newsletter carefully enough… or even, at all. While I will not comment on this scurrilous attack against my financial literacy, I feel obliged to point out that keeping track of which of the 8,253,847 links I had to sift through were included in yesterday’s newspaper is somewhat more difficult than rocket science.
And Finally…
I’m still preparing something interesting and useful to say that’s suitable for a grand exit from my position as Reluctantly Appointed Guest Editor. Meanwhile, I hereby issue a challenge to everyone in the financial community, to use the word “moxie” at least once in a conversation today. It’s a heck of a good word, even though it’s fallen out of favor in the last, oh, eighty years or so, and Mr. Dictionary (that’s me) says it’s high time to bring it back!
For those of you who didn’t know, “moxie” means courage and go-getter energy all together. The origin of the word is, of all things, the name of a soft drink whose popularity peaked in the 1920’s, quite possibly also when the popularity of the word also peaked. For more details on the history of Moxie, the beverage, check out http://www.cgazette.com/towns/Newark/history/1094739873167.htm
Regards,
Jon Matte, Editorius Usurpius
…on behalf of,
John J. Lothian
Publisher
John Lothian Newsletter
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Disclaimer: The John Lothian Newsletter is a product of John J. Lothian & Company, Inc. The opinions expressed are strictly the opinion of John Lothian, and not necessarily those of his employer, The Price Group and its management, and is intended solely for informative purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is obtained from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Security futures are not suitable for all customers.
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