Untitled Document

June 21, 2005

Lead Stories

Paving the Way for U.S. Emissions Trading

Grist Magazine

Five years ago, Richard Sandor was a man with a vision: a world in which private companies, universities, and nongovernmental organizations would band together to voluntarily cut greenhouse-gas emissions, making a little money by trading pollution credits along the way. Today, that vision is a reality, in the form of the Chicago Climate Exchange commodities market. But so far, the operative words seem to be "a little money." Will the market pick up steam, or will it languish in the absence of federal emissions regulations? By Jason Margolis

http://www.grist.org/news/maindish/2005/06/14/margolis-ccx/

NYSE.com Now Accepting Online Complaints, Inquiries

NEW YORK, June 20, 2005 – The New York Stock Exchange today announced a significant upgrade to the functionality of nyse.com that allows individual investors to submit online complaints and inquiries relating to sales practices and operational issues at our member firms. “This is an important step for NYSE Regulation in its mission to protect investors and preserve market integrity,” said Richard Ketchum, chief regulatory officer, the New York Stock Exchange. “Submitting complaints and inquiries through our website will yield greater efficiencies for individual investors, while allowing us to identify areas of future regulatory action and investor education.” Development of the new tool began shortly after the arrival of Ketchum at the NYSE last year. Previously, the web site had instructions on how to submit complaints, although actual communication was via traditional channels, such as regular mail, fax and telephone. The new capability permits investors with a web browser and Internet connection to electronically file complaints and inquiries in an easy to use, step-by-step process. To file a complaint regarding an NYSE member or member organization, investors should visit www.nyseregulation.com, and click on “Inquiries & Complaints” on the left side of the page. Or paste this link into a browser: http://www.nyse.com/complaints.

http://www.nyse.com/press/1119263947473.html

CME Appoints Kelly P. Brown As Director, Equity Index Products

http://www.cme.com/about/press/cn/05-8513645.html

***** Another example of a newsletter reader doing well. Coincidence? Of course, it could be talent, experience and a great reputation. Congratulations to Kelly on his new position at the CME.

Commodities stand on their own, amid dollar puzzle

NEW YORK (Reuters) - Undaunted by soaring global prices for raw materials, global commodity consumers and investors are paying top price in many currencies, instead of timing purchases to a weak dollar as they had done until recently. Not clear yet, investors and analysts said, is whether the shift confirms that commodities have come into their own as a viable investment class, or whether it portends a bubble ready to burst. "New trends are developing, exacerbated by a tectonic break in the historic paradigms as relate to inter-market correlation," wrote Gregory Weldon, publisher of Metal Monitor.

http://news.reuters.com/newsArticle.jhtml;jsessionid=ZYQ1KYQ02YWOACRBAELCFFA?type=reutersEdge&storyID=8850550

Portus principal absconded with assets, auditor says

June-20-2005 - Boaz Manor, one of the co-founders of Portus Alternative Asset Management Ltd, allegedly absconded with US$3.1 million of capital from the now-defunct hedge fund and used a large chunk of the money to pay his Israeli lawyer, according to the firm's court-appointed auditor. In its sixth report filed in an Ontario court last week, KPMG LLP said it had located more than US$35.2 million of US$52.8 million in international investors' assets that it says were never invested but instead squirreled away in an offshore account at Turks & Caicos Banking Co Ltd under the name Eidolon.

http://www.marhedge.com/news/Cover.Hedge.asp?s=HedgeH-2005-06-20-13-32-11p1.htm

***** Today’s word of the day is “absconded.”

Futures feud coming to a boil

Harris Brumfield went broke three times on his way to making $250 million at the Chicago Board of Trade. In about a month, he'll have a better sense of whether his second career is going to make the futures pits seem like a day at the beach. He's issued a July 15 ultimatum to Refco Inc., the largest futures TRADING firm in the world, a move that could make or break his high-stakes intellectual property ...

http://chicagobusiness.com/cgi-bin/mag/article.pl?article_id=23859&bt=trading&searchType=all

****** Online Crain’s Chicago Business subscription required.

Ruling allows Spitzer's probe of banks

A federal judge handed New York Attorney General Eliot Spitzer a victory on Monday when he refused to grant a temporary restraining order that would have stopped Spitzer from investigating large U.S. banks for their lending practices to minorities.

http://news.yahoo.com/news?tmpl=story&u=/nm/20050621/pl_nm/financial_spitzer_ruling_dc_5

Watson’s Urwin doubts hedge fund capacity

IPE.com 21/Jun/05: GLOBAL – Roger Urwin, global head of investment consulting at Watson Wyatt, says the performance of fund of hedge funds is “in doubt” due to a lack of capacity at some of the managers.

http://www.ipe.com/article_default.asp?article=18959

Environmental Trading News

Anger as G8 go backward on climate change

Climate change is the most urgent global issue facing us today, but you wouldn't know it from the G8's latest Plan of Action on Climate Change. This leaked document is even weaker than the previous draft!

http://www.peopleandplanet.org/news/news.php?story=532

Lobby Intensifies As Climate Change Vote Nears By H. JOSEF HEBERT, Associated Press Writer

WASHINGTON - Industry groups and environmentalists lobbied hard to sway lawmakers' votes Monday as the Senate prepared for a major challenge to President Bush's global warming policy as part of emerging energy legislation.

http://news.yahoo.com/news?tmpl=story&u=/ap/20050621/ap_on_go_co/global_warming_4

No climate change in energy bill - Domenici

By Chris Baltimore WASHINGTON (Reuters) - A key Republican lawmaker declined to back a plan by Senate Democrats to slow the growth of U.S. greenhouse gas emissions, casting doubt on

http://news.reuters.com/newsArticle.jhtml?type=topNews&storyID=8852513

CO2 emissions rise 1.8 percent in 2002//03-EU Agency

BRUSSELS (Reuters) - A cold winter and increased coal-burning power production raised carbon dioxide emissions in 15 EU states by 1.8 percent between 2002 and 2003, the EU environment agency

http://news.reuters.com/newsArticle.jhtml?type=topNews&storyID=8849797

Exchange & ECN News

CBOT Trader Newsletter: June 20, 2005

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1027+28936,00.html

CBOT Strike Price Notice, June 21, 2005

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28999,00.html

New Clearing Member Firm Division

As of June 20 a new clearing division will be effective for FC Stone L.L.C. 06.20.2005

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28942,00.html

New Clearing Sub-Firm

As of June 20 a new clearing sub-firm will be effective for 225 Refco LLC.

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+28943,00.html

Week 6 CME EFP and CME SLEDS Testing

http://www.cme.com/clearing/clr/clradv/13644.html

NYMEX Announces Resignation of Chief Financial Officer

New York, N.Y., June 20, 2005 — NYMEX Holdings, Inc. (the "Company") announced today that its chief financial officer, Lewis A. Raibley, III, has resigned to accept a position with another company. Kenneth D. Shifrin, the Company's vice president and controller, has been appointed acting chief financial officer effective immediately, pending completion of the search process for Mr. Raibley's replacement.

http://www.nymex.com/jsp/news/press_releas.jsp?id=pr20050620a

Best Practices for Member Firms Regarding Customer Notification of Service Fees

http://apps.nyse.com/commdata/PubInfoMemos.nsf/AllPublishedInfoMemosNyseCom/85256FCB005E19E88525701F00577C7F

NYSE Seat Sells for $2,500,000

http://www.nyse.com/press/1119263947312.html

NYSE Seat Sells for $2,500,000

http://www.nyse.com/press/1119263946765.html

Successful listing of Elia on Euronext

http://www.euronext.com/news/press_releases/0,4159,1732_8275,00.html

Euronext se félicite des mesures fiscales annoncées par le Ministère de l’Economie, des Finances et de l’Industrie

http://www.euronext.com/news/press_releases/0,4159,1732_8275,00.html

TSX donates to Alberta flood relief

Exchange will also match employee donations

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29289&IdSection=15&cat=15

OSE, Eurex to negotiate on tieup

OSAKA (Kyodo) The Osaka Securities Exchange said Monday it has agreed with Eurex, Europe's largest financial futures exchange, to launch negotiations on the cross-listing of stock-index futures and other investment instruments.

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20050621a4.htm

Taiwan to allow SGX electronic MSCI trade for 3 mths

TAIPEI, June 21 (Reuters) - Taiwan will allow its investors to join Singapore's new electronic trading system for trading Taiwan stock futures between July 1 and Sept. 30, the island's regulator said on Tuesday.

http://asia.news.yahoo.com/050621/3/22rm4.html

Estonian Bourse Hit Hard by Co. Departure

The Tallinn stock market has never been more than a bit player among European bourses. But when word came that the company that represented 80 percent of its daily trading was being delisted, some thought the exchange was doomed.

http://biz.yahoo.com/ap/050621/estonia_baltic_bourse_bust.html?.v=1

INSIDER & RULE 144 TRANSACTIONS REPORTED - LAST TWO YEARS

Date Insider Shares Type Transaction Value*

17-Jun-05 SANDNER, JOHN F.

Director 10,000 Direct Sale at $254 - $254.96 per share. $2,545,000

16-Jun-05 MELAMED, LEO

Director 2,000 Direct Sale at $257.15 - $258.5 per share. $516,000

16-Jun-05 MELAMED, LEO

Director 2,000 Direct Planned Sale $512,820

http://finance.yahoo.com/q/it?s=CME

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/dig062005.txt

Court Freezes Assets of Florida Firm Windsor Forex Trading Corp. & Owner in CFTC Foreign Currency (Forex) Anti-Fraud Case

http://www.cftc.gov/opa/enf05/opa5086-05.htm

Accountants Settle CFTC Charges of Audit Failures of CPO; Respondents to Pay $350,000 in Fines & Restitution, and Repay Fees

http://www.cftc.gov/opa/enf05/opa5085-05.htm

7 Reasons to Bid Donaldson a Fond Adieu

No Enemies

You have no enemies, you say?

Alas, my friend, the boast is poor.

He who has mingled in the fray

Of duty, that the brave endure,

Must have made foes. If you have none,

Small is the work that you have done.

You've hit no traitor on the hip,

You've dashed no cup from perjured lip,

You've never turned the wrong to right,

You've been a coward in the fight.

-- Charles Mackay

What a tour of duty it's been for Securities and Exchange Commission Chairman Bill Donaldson. Chosen by President Bush in 2003 to take over for beleaguered Harvey Pitt, he faced the Herculean task of restoring investor confidence and implementing Sarbanes-Oxley in the wake of the Enron, WorldCom, Tyco, and other corporate scandals. Donaldson's selection initially appeared to represent just another male, pale, and Yale face with a patrician air and a Wall Street pedigree.

http://www.fool.com/news/commentary/2005/commentary05062004.htm

NASD Informs Members of Upcoming District Committee and District Nominating Committee Elections

http://www.nasd.com/web/idcplg?IdcService=SS_GET_PAGE&nodeId=5&ssSourceNodeId=5

No evidence of trading abuses by seg funds: report

Effective company controls in place, FSCO says

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29292&IdSection=8&cat=8

FSA publishes guide to help young adults be more confident with money

http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/067.shtml

United Kingdom: Warning to ´Contracts for Differences´ firms on regulatory compliance

http://www.mondaq.com/article.asp?articleid=33227&lastestnews=1

NASD officials visit Sarasota

SARASOTA - The National Association of Securities Dealers, which is charged with establishing ethical standards for investment brokers, came to Sarasota on Monday to offer some cautionary advice to investors in light of many recent scandals.

http://www.bradenton.com/mld/bradenton/business/11945951.htm

Managed Futures - Managed Funds

June 20, 2005: Informed Investor Series - Hedge Fund Investing: Is it a Suitable Investment for You?

http://www.nyse.com/pdfs/Hedge_Fund_Investing.pdf

Some hedge funds dump loss-making debt strategies

LONDON, June 20 (Reuters) - The chaos in credit derivatives markets after the rating downgrades of big U.S. automakers last month has prompted some hedge funds to suspend use of complex strategies that led to losses, fund managers said on Monday.

http://www.reuters.com/financeNewsArticle.jhtml?type=bondsNews&storyID=8838595

Stars fail to shine in the hedge fund universe

The timing could not be more acute. Just as the Financial Services Authority is about to float the idea of retail investors having more access to hedge funds, along comes a salutary warning of the risks involved.

http://news.ft.com/cms/s/bc0cae92-e1bb-11d9-9460-00000e2511c8.html

**** Online FT subscription required.

Convertible Bond Hedge Funds Get Off to Their Worst Start Ever

June 21 (Bloomberg) -- Hedge funds that invest in convertible bonds posted their worst performance ever during the first five months of this year. Convertible-bond arbitrage funds, which have about $45 billion of assets, fell 6.73 percent on average in the five-month period, the biggest losses since Chicago-based Hedge Fund Research Inc. started keeping records in 1990.

http://www.bloomberg.com/apps/news?pid=10000103&sid=abEu5bisDOC0&refer=us

Portus, Norshield shake investor trust, says CIFPs chairman

Advisors gather in Niagara Falls

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29284&IdSection=3&cat=3

Market Risk - Hedge Funds Are Growing, Is This Good or Bad?

http://www.garp.com/risknews/newsfeed.asp?Category=6&MyFile=2005-06-21-11029.html

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

Steps to reduce swaps effective

The size of the credit default swaps market shrank by almost a fifth in terms of notional outstanding contracts this year as infrastructure developments allowed banks and other investors to net off contracts more effectively and tidy up their trading books.

http://news.ft.com/cms/s/526aa4fa-e1ff-11d9-bf18-00000e2511c8.html

Daiwa Securities deploys Athena trading platform

Investment bank Daiwa Securities America has implemented the Athena trading software from New York-based Aegis Software as its next-generation direct market access platform.

http://www.cbronline.com/article_news.asp?guid=344098EB-25DA-4F4C-9B25-19FD70D25583

Trading currencies takes nerve and a fat wallet

http://www.theglobeandmail.com/servlet/ArticleNews/TPStory/LAC/20050621/RCURRENCIES21/TPBusiness/MoneyMarkets

Japan considers going superlong

To some global bondwatchers, the news that the Japanese government might in the future issue a 50-year bond came none too soon.

http://news.ft.com/cms/s/1a56f49c-e1ff-11d9-bf18-00000e2511c8.html

Futures firms move towards arbitrage

A Chinese official is reported to have revealed that the State Council will allow some futures companies to do a certain type of futures trading on the overseas market by cross-market arbitrage practices.

http://www.chinadaily.com.cn/english/doc/2005-06/20/content_452849.htm

eSignal and Hotspot FX Unveil Spot FX Data

eSignal, a division of Interactive Data Corporation and a leading provider of streaming, real-time financial market data, news, analytics and decision support tools to professional and individual traders, together with Hotspot FX, Inc, operator of premier institutional and retail foreign exchange trading marketplaces and provider of anonymous, real-time trading on live, streaming, multibank

http://biz.yahoo.com/bw/050621/215187.html?.v=1

China resists 'Frankenbean' and sees windfall

BEIJING (Reuters) - While farmers around the world are switching in droves to hardy, genetically modified soybeans, China's producers are finding an unexpected windfall growing the conventional crop.

Consumers in Europe and other countries are still worried about the safety of the so-called GMO products, which some have dubbed "Frankenstein food."

http://news.reuters.com/newsArticle.jhtml;jsessionid=ZYQ1KYQ02YWOACRBAELCFFA?type=reutersEdge&storyID=8850627

UAE s first real-time stock information and online trading engine

Mubasher, a subsidiary of the National Technology Group (NTG), one of the largest Information & Communication Technology Groups in the region, has launched Mubasher Trade and Mubasher Market, the first bilingual real-time stock market information service and online trading engine, in the UAE.

http://www.itp.net/news/details.php?id=16307&category=

Morgan Stanley Hopes for Verdict Reduction

Attorneys for Morgan Stanley are asking a judge to reduce the $1.45 billion verdict awarded to financier Ron Perelman in his fraud lawsuit against the firm.

http://news.yahoo.com/news?tmpl=story&u=/ap/20050621/ap_on_bi_ge/morgan_stanley_sued_3

ICAP takes delivery of Alerts Direct, Rolfe & Nolan’s New Risk Management Tool

London, 21st June 2005. Rolfe & Nolan today announced that it has delivered Alerts Direct, its comprehensive risk management solution, to ICAP Futures. Alerts Direct is an integrated risk management solution that works in tandem with ICAP’s existing futures & options processing solution to deliver advanced real-time risk assessment for proprietary and customer business.

http://www.rolfeandnolan.com/default.aspx.locid-0fdnew07e.htm

Events – Chicago

Trading seminar - Chicago

STIR trading: outrights, calendar spreads, butterflys, condors, packs and bundles

You are invited to attend a seminar hosted by Patsystems with a guest speaker from Euronext.liffe. The seminar will focus on a demonstration of the latest technology and trading products for Short Term Interest Rate traders, outline recent developments of the pack and bundle market and the new opportunities available to you. You will also be able to experience the advanced trading functionality of the Grid screen - part of the new Pro-Mark front-end - with a demonstration by the Patsystems team.

Grid has been designed exclusively for Short Term Interest Rate (STIR) traders and allows the user to custom-design a single screen for trading outrights, calendar spreads, butterflys, condors, packs and bundles in multiple contracts.

Jim Johanik, SVP US Technology Strategy, Euronext.liffe, will speak on the practicalities of trading packs and bundles and the inherent advantages and opportunities provided by the utilisation of this type of strategy trading on LIFFE CONNECT.

Date: Wednesday, July 13, 2005

Venue: The Hyatt Regency, Acapulco Room, West Tower, 151 E. Wacker Drive, Chicago, IL 60601

Programme:

2:30pm Registration and tea/coffee

3:00pm Introduction: Pat Kenny, Managing Director North America, Patsystems

3:10pm Trading Packs and Bundles on LIFFE CONNECT, Jim Johanik, SVP US Technology Strategy, Euronext.liffe

3:30pm Demonstration of Pro-Mark, Patsystems' new front-end, Brian Goodman, Commercial Director North America, Patsystems

4:00pm Q&A session

4:15pm Drinks & canapés*

5:00pm Close

RSVP via email to jennifer.respondi@patsystems.com no later than Tuesday July 5

*an appetizer consisting of a piece of bread or toast or a cracker topped with a savory spread (as caviar or cheese)

***** Is this a fancy way of saying “cheese and crackers will be served?” Isn’t it redundant to be serving a “savory spread” after a seminar on “spreads?” Will there be “STIRred martinis?”

John's Comments

Brent Crude Watch

IPE Brent Volume: 99,241

NYMEX Brent Crude Volume: 2577

NYMEX Percent of Total Volume: 2.53%

********

Chicago Electronic Trading Scorecard for June 20, 2005

Percent Electronic

CBOT: 54.45%

CME: 74.17%

CME Eurodollars: 81.58%

CME Live Cattle: .36%

CME Currency Products: 87.13%

CBOT Soybeans: 4.06%

CBOT Options: 4.06%

CME Options: 4.52%

Volume

OneChicago Volume: 1743

Eurex US Volume: 6620

Euronext.liffe Eurodollar Volume: 13,776

CBOE Futures Exchange Volume: 38

Market Share

CBOT 100 oz. Gold Volume: 1174

NYMEX 100 oz. Gold Volume: 49,247

CBOT Share: 2.33%

CBOT 5000 oz. Silver Volume: 331

NYMEX 5000 oz. Silver Volume: 24,580

CBOT Share: 1.33%

CBOT Mini Gold Volume: 834

CBOT Mini Silver Volume: 950

CME Emini Russell 1000 (100X) Volume: 2218

Eurex US Mini Russell 1000 (100X) Volume: 490

NYBOT Mini Russell 1000 (50X) Volume: 193

CFE Mini Russell 1000 (100X) Volume: 0

Russell Indexes Rank #1 in Institutional Usage

Russell indexes continue to rank as the most widely used set of performance benchmarks among institutional investment products and, for the first time, now account for more than half of the benchmarks in funds used by corporate pension plans and other institutional investment organizations.

http://biz.yahoo.com/bw/050621/215333.html?.v=1

CME Emini Russell 2000 Volume: 80,024

Eurex US Mini Russell 2000 Volume: 3754

CFE Mini Russell 2000 Volume: 10

Notes: On Sunday night the CBOT set new electronic trading records in Soybean volume and Corn volume.

Liffe Eurodollar Over-Under

Liffe/Globex: 1.82%

Liffe/CME: 1.49%

Regards,

John J. Lothian

Publisher

John Lothian Newsletter

www.johnlothiannewsletter.com

Futures Brokerage - Business Intelligence

John J. Lothian
President- Electronic Trading Division

The Price Futures Group, Inc.
141 West Jackson Blvd., Suite 1340A
Chicago, IL 60604

jlothian@pricegroup.com
johnlothian@johnlothian.com
IM: LothianJohnJ
http://www.pricegroupetd.com

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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.

Futures and options trading involve risk. Past results are no indication of future performance.

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