Untitled Document

July 14, 2005

Lead Stories

Emissions prefer regulated market

By Kevin Morrison

Fears about a possible rise in credit defaults in the carbon emissions trading market is helping to drive more trades through regulated exchanges rather than through the informal over the counter (OTC) market.

Emission traders believe there is a growing risk of credit default, as the European emissions market has many participants with little credit history in gas and power markets, markets that are entwined with emissions. Traders said that, with carbon emission prices rising from €6.50 a tonne at the start of the year to almost €30 last week, the size of the trades had risen and so had counterparty risk. Carbon emissions futures were €1.40 lower at €27.55 yesterday. The OTC market has dominated the European emissions trading market since it started in January.

http://news.ft.com/cms/s/529255ba-f404-11d9-af32-00000e2511c8.html

LSE hints it may turn the tables on bidders

Senior executives of the London Stock Exchange hinted yesterday that they might make an acquisition rather than be taken over by Deutsche Börse or Euronext.

http://www.guardian.co.uk/business/story/0,3604,1528074,00.html

Understanding of market risk measure "spotty", report says

S&P says value-at-risk measure has limitations

http://www.investmentexecutive.com/client/en/News/DetailNews.asp?Id=29653&IdSection=137&cat=137

Thomas H. Lee Partners & Refco Group Ltd. LLC. Hit by an International Fraud Lawsuit, $1.02 Billion Claim Undisclosed

PARIS--(MARKET WIRE)--Jul 14, 2005 -- Thomas H. Lee Partners, the world’s second largest buyout firm, and Refco, the world’s largest independent futures broker, both together with their legal representatives Mr. Thomas H. Lee, Mr. Scott A. Schoen & Mr. Phillip Bennett, are the target of a criminal complaint filed on June 30, 2005 with the Paris High Court. “They did not disclose in their SEC filings several major lawsuits, including criminal proceedings in Paris, and a major pending claim in New York,” the French lawyer Maître Jean-Marc Descoubes said.

http://biz.yahoo.com/iw/050714/090732.html

**** Please note this is a press release, not a news story.

Knight Ridder and Tribune Hurt by Circulation

NEW YORK (Reuters) - Publisher Knight Ridder Inc.on Thursday said quarterly earnings fell 14 percent due to circulation declines, while rival Tribune Co. (TRB.N) relied on cost cutting to help it post higher profits.

Circulation declines at both media companies underscored the problems the industry has faced in subscription drives since do-not-call lists began blocking telemarketers. At the same time, more readers are getting their news from new media such as the Internet rather than traditional newspapers.

http://www.nytimes.com/reuters/business/business-media-knightridder-earns.html?

A barrel of oil to join ranks of London shares

LONDON (Reuters) - Private investors who fancy a $60 flutter on buying a barrel of oil will soon be able to do so through their stockbroker at the same time they invest in Vodafone or Google shares.

The executives who introduced gold bullion securities for trading on the London Stock Exchange two years ago said on Thursday they will introduce Oil Securities to make it easier to invest in crude prices

http://today.reuters.co.uk/news/newsArticle.aspx?type=personalFinanceNews&storyID=2005-07-14T111728Z_01_NOA430207_RTRUKOC_0_ENERGY-OIL-SECURITIES.xml

NYSE Says SEC Proposal Will Make Bond Market More Transparent to Investing Public

http://www.nyse.com/press/1121164484699.html

Clearstream Wins the JPMorgan Chase ‘Quality Recognition Award’

http://deutsche-boerse.com/dbag/dispatch/en/listcontent/gdb_navigation/press/10_Latest_Press_Releases/Content_Files/13_press/pm_news_clearstream_140705.htm

NYSE must turn over docs in Archipelago deal

(AP) — The New York Stock Exchange must turn over documents and analyses related to its pending acquisition of Archipelago Holdings Inc. to three seat holders who are suing to block the deal, a state judge ruled Wednesday.

http://chicagobusiness.com/cgi-bin/news.pl?id=17103

Big Board Ordered to Submit Data on Deal

http://www.nytimes.com/2005/07/14/business/14nyse.html

EU Plans No New Hedge Fund Regulations

EU internal market commissioner Charlie McCreevy said Thursday he had no plans for regulating the booming hedge fund industry amid pressure from Germany for tighter rules.

http://www.dw-world.de/dw/briefs/0,1574,1649062,00.html

Environmental Trading News

Chicago Climate Futures Exchange SO₂ Allowance

Cash and Futures Market Prices Survey Report

Thursday, July 14, 2005 -11:45 a.m. Central Time Report

SO₂ Allowance Cash Market Survey

Vintage Bid Offer Last

2005 (or earlier) $800 $815 $805 (July 14)

2006 $795 $810

Cash Market Price Survey Overview

The SO₂ cash market price information provided above reflects central values
of price ranges gathered from randomly selected market participants from energy,
brokerage and financial firms. The 9:30 a.m. Central Time report is based on information
gathered between 9:10 and 9:25 a.m. Central Time. The 11:45 a.m. Central Time report is based
on information gathered between 11:25 and 11:40 a.m. Central Time.

www.chicagoclimateexchange.com

Exchange & ECN News

Record volumes revealed by IPE

The International Petroleum Exchange, the custodian of the Brent crude oil futures contract, said its benchmark contract struck record volumes this week, rising almost 90 per cent from the daily average before the London exchange moved to fully electronic trading in April.

http://news.ft.com/cms/s/31ab4aa6-f403-11d9-af32-00000e2511c8.html

Bursa Malaysia unit starts clearing OTC-traded derivatives deals

BURSA Malaysia Derivatives Clearing Bhd, a subsidiary of Bursa Malaysia Bhd, is to clear over-the-counter (OTC)-traded derivatives contracts from today.

The clearing house currently clears futures and options traded on Bursa Malaysia Derivatives Bhd including the Kuala Lumpur Composite Index futures, crude palm oil futures, crude palm kernel oil futures, Kuala Lumpur Interbank Offered Rate futures and Malaysian Government Securities futures.

http://www.nst.com.my/Current_News/BT/Friday/Corporate/BT494197.txt/Article/index_html

Lower USDA Numbers & Weather Stabilize Corn & Beans

Grain prices showed a mixed response to the latest USDA production and supply/demand revisions released Thursday.

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1213+29331,00.html

CBOT July 13, 2005 Treasury Conversion Factors

CBOT U.S. Treasury Bond and Note complex conversion factors.

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1027+20356,00.html

CBOT Strike Price Notice July 14, 2005

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+29337,00.html

Dow Jones Industrial Average Index Futures Options Expiration

http://www.cbot.com/cbot/pub/cont_detail/0,3206,1032+29338,00.html

Strike Listing Rule Changes and Minimum Tick Size Changes

http://www.cme.com/clearing/clr/clradv/14293.html

Expanded CME Eurodollar Bundle Listings on CME Globex

http://www.cme.com/clearing/clr/clradv/14291.html

CORPORATE EVENT: Nextel Communications, Inc - Anticipated adjustment due to proposed merger

http://www.cme.com/clearing/clr/clradv/14295.html

Amendments to Rule 3.03, Disqualification from Board and Committee Service

http://www.nymex.com/jsp/shareholder/notice_to_member.jsp?id=ntm285&archive=2005

Gasoline-Crack, Heating Oil-Crack, and Calendar Spread Options Expiration Operational Procedures for the Trading Floor and Clearing Members

http://www.nymex.com/jsp/shareholder/notice_to_member.jsp?id=ntm290&archive=2005

2005 Cotton Forum

The 2005 Cotton Forum had another successful year – this year at the New York Board of Trade (NYBOT) from Thursday, July 7 – Friday, July 8. The two-day event included a mock trading session on the NYBOT trading floor on Thursday, followed by an evening out at Yankees Stadium watching the Yanks play the Cleveland Indians.

http://www.nybot.com/cotton/Cotton%20Forum%20July%202005

Wiener Borse Extends Agreement with OMX Technology

STOCKHOLM, Sweden, July 14, 2005 (PRIMEZONE) -- Wiener Borse, the Austrian stock and derivatives exchange, today signed an agreement with OMX Technology, the trading technology and solutions provider, regarding a five-year extension of the support contract for the CLICK(TM) trading system and the SECUR(TM) clearing system. Wiener Borse was one of OMX Technology's first customers and began using

http://au.biz.yahoo.com/050714/21/62f3.html

Program Trading Averaged 55.8 Percent Of NYSE Volume During July 5-8

http://www.exchange-handbook.co.uk/news_story.cfm?id=53998

OneChicago To List Six New Single Stock Futures Contracts July 18

CHICAGO, IL – July 13, 2005 – OneChicago, LLC today announced that six new single stock futures contracts will begin trading at the Exchange Monday, July 18. The new listings will increase the number of single stock futures available for trading at OneChicago to 186. Each single stock futures contract is equivalent to 100 shares of the underlying stock or exchange-traded fund. The new listings are:

Affiliated Computer Services Inc. (ACS1C)

Liberty Media Corp. (L1C)

News Corp. (Class A) (NWSA1C)

NTL Inc. (NTLI1C)

OSI Pharmaceuticals Inc. (OSIP1C)

Kerr-McGee Corp. (KMG1C)

http://www.onechicago.com/060000_press_news/press_news_2005/07132005.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/dig071305.txt

MyTravel fined £240,000 for Listing Rule breach

http://www.fsa.gov.uk/pages/Library/Communication/PR/2005/080.shtml

Company head ordered to resign over undocumented loans

http://www.bcsc.bc.ca/release.asp?id=2646

SEC Nominee Cox Details Stock Holdings

http://www.forbes.com/work/careers/2005/07/13/0713autofacescan01.html?partner=rss

SEC Not Looking To Regulate Leverage

The SEC may be wary of hedge fund leverage but has no interest in regulating it, according to Commissioner Roel Campos . "I do not advocate our agency establishing regulation over leverage," Campos told Reuters after a Managed Funds Association symposium.

http://www.compliancereporter.com/default.asp?page=1&SID=524545&ISS=17517&pressbox=1

Financial Services: European Commission Proposes Improvements To The European Market For Investment Funds

http://www.exchange-handbook.co.uk/news_story.cfm?id=53994

Managed Futures - Managed Funds

Hedge-fund industry has an extra layer of leverage

SAN FRANCISCO (MarketWatch) -- Turmoil in credit markets earlier this year highlighted the risks inherent in hedge funds' aggressive borrowing to enhance returns, but a recent study suggests even the funds themselves sometimes aren't aware of the extent of leverage in the industry. While concerns about hedge-fund leverage usually focus on individual managers pumping up their bets, the report, by Optima Fund Management, highlights another layer of borrowed money in the industry that aids returns in good times but can cause trouble if performance sours.

http://www.investors.com/breakingnews.asp?journalid=29013207&brk=1

John W. Henry & Company, Inc.

The John W. Henry & Company, Inc. web site – www.jwh.com – has been updated with detailed estimated composite performance information on our various investment portfolios through the month of June 2005.

To view the June 2005 JWH Monthly Commentary, click here.

MFA Presents Inaugural London Symposium

http://www.mfainfo.org/images/PDF/MFAPresentsInauguralLondonSymposiumFeaturingSECComm.pdf

The Barclay Group and MARHedge Announce Database Distribution Agreement

New York, July 13, 2005 - The Barclay Group and MARHedge, a subsidiary of Metal Bulletin plc, have reached an agreement in which MARHedge will publish, starting in September 2005, The Barclay Group's proprietary hedge fund and CTA performance data.

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

FIA Chicago Sponsors Golf Outing in September

FIA Chicago will be holding its First Annual Golf Outing to benefit the scholarship fund for children of division members. In addition, part of the proceeds raised from the event will help fund other activities and general operating expenses of FIA Chicago. The outing will be held on Sept. 20 at the Oak Meadows Golf Club in Addison, Ill. Tickets are $145.00 per golfer. Registration fee includes golf, golf carts, two-hour open bar and a buffet dinner, plus door and golf prizes. Dinner-only reservations are $65/person.

https://www.futuresindustry.org/fiachica-2571.asp

Commodity Strategists; Sugar May Rise 10% on Brazil (Update1)

July 14 (Bloomberg) -- Sugar prices may rise about 10 percent in the coming year as Brazil, the world's biggest producer, curbs exports to increase use of the commodity as a car fuel amid surging oil prices, according to Sucden (U.K.) Ltd.

http://www.bloomberg.com/apps/news?pid=10000086&sid=a9BG_2aKjWa4

BMO Nesbitt Burns Ranked Top Equity Research Group for the 25th Consecutive Year by Brendan Wood International

http://www.newswire.ca/en/releases/archive/July2005/14/c1136.html

Purcell Files to Sell $40.8 Mln of His Morgan Stanley Stock

U.S. July 14 (Bloomberg) -- Philip Purcell filed to sell more than $40 million of his Morgan Stanley shares a week after leaving as the firm's chairman and chief executive officer under pressure from unhappy investors.

http://www.bloomberg.com/apps/news?pid=10000103&sid=a8nnGS8nl_8E

Shareholders will challenge Morgan Stanley board

NEW YORK (MarketWatch) -- An institutional shareholder, outraged by compensation awarded to departing Morgan Stanley executives, said it may challenge the board at its annual meeting next spring.

http://www.marketwatch.com/enf/rss.asp?guid=%7B320E8C1F-491B-4AF2-858C-7D5F67E51865%7D&dist=rss&siteid=mktw

Morgan Stanley's Mack Tells Staff He's Busy Hiring (Update1)

U.K. July 13 (Bloomberg) -- Morgan Stanley Chairman and Chief Executive John Mack told employees in London that he's in discussions with a number of ``high-profile people in the industry'' about joining or coming back to the securities firm.

http://www.bloomberg.com/apps/news?pid=10000102&sid=ahrn5XeijteY

New Non-Price Indices From FTSE Group And GWA

http://www.exchange-handbook.co.uk/news_story.cfm?id=53991

The Perfect Beer Is All About the Tap

Ordering a beer may never be the same if the founder of TurboTap realizes his dream. The beer-loving engineer has invented, and is selling, a nozzle that doubles the speed of pouring and pares spillage by 30%.

http://online.wsj.com/article/0,,SB112130747570985459,00.html?mod=home%5Fpage%5Fone%5Fus

**** Online WSJ subscription required. You have to love innovation like this!

Panopticon signs enterprise wide contract with Reuters

Stockholm, Sweden, 14th July, 2005 – Panopticon Software (Panopticon), a member of the Hamsard Group, announced today that Reuters <RTR.L> has signed an enterprise-wide deal to integrate Panopticon’s visualisation treemap technology in its products. Reuters initial target group is around 100 000 users in the high and mid tier space.

www.panopticon.com

Second Quarter Interim Report

http://www.orcsoftware.com/Company/IR/InterimReports.htm

Events – Chicago

Security Traders Association of Chicago presents...
Seminar: Secular Vs. Cyclical featuring Ralph Acampora, Prudential Equity Group, LLC

Tuesday, July 19     4:00 - 5:30 pm
Bear Stearns & Co.     70 W. Madison, 24th Floor

STAC Members: Complimentary     Non-Members: $50.00

Ralph Acampora, Prudential Equity Group, LLC.offers a unique technical perspective on the market and a vision of STA’s educational opportunities in this seminar.

More information and online registration

http://www.stachicago.org/seminar.htm

Questions? Contact the STAC office at info@stachicago.org or 312.461.0811

***** I am considering joining the STAC. Anyone have any thoughts or experiences with STAC?

John's Comments

CBOE Seat Prices

Seat Market Information

Last Modified on: 7/14/2005 9:52:13 AM

Seat Market

Class	Bid	Offer	Last Sales
Full Membership	$650,000	$740,000	$700,000 on 07/14/2005

******

Leah McGrath Goodman Stories for Dow Jones

Blackstone, Battery Hike 20% Nymex Bid To $200M -Sources

By Leah McGrath Goodman Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Private-equity firms Blackstone Group (BGP.XX) and Battery Ventures VI LLP (BVV.XX) increased their bid for a 20% equity stake in the New York Mercantile Exchange to about $200 million from $185 million, sources close to the exchange said. But Blackstone and Battery Ventures trimmed other parts of the Nymex bid, taking a previous offer to buy trading rights for up to 75 of the exchange's 816 seats off the table, the sources said. With trading rights included, the earlier bid made in April totaled as much as $278.8 million, the sources said.

IPE Oil Vols On Screen More Than Half Nymex Oil Vols

By Leah McGrath Goodman Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Volumes of Brent blend crude oil futures, which trade electronically on London's International Petroleum Exchange, leapt to a record high Tuesday, posting more than half the crude oil futures volumes at its rival marketplace, the New York Mercantile Exchange. The rising IPE volumes demonstrate traders' growing interest in screen trading as an alternative to open-outcry - the method pushed by Nymex, the world's largest energy-futures marketplace.

********

Brent Crude Watch

IPE Brent Volume: 187,295 * record

NYMEX Brent Crude Volume: 10,418

NYMEX Percent of Total Volume: 5.27%

********

Chicago Electronic Trading Scorecard for July 13, 2005

Percent Electronic

CBOT: 56.49%

CME: 62.68%

CME Eurodollars: 81.92%

CME Live Cattle: .79%

CME Currency Products: 87.16%

CBOT Soybeans: 4.83%

CBOT Options: 6.07%

CME Options: 3.96%

Volume

OneChicago Volume: 66,306

Eurex US Volume: 5731

Euronext.liffe Eurodollar Volume: 9053

CBOE Futures Exchange Volume: 2077

Market Share

CBOT 100 oz. Gold Volume: 1107

NYMEX 100 oz. Gold Volume: 43,931

CBOT Share: 2.46%

CBOT 5000 oz. Silver Volume: 183

NYMEX 5000 oz. Silver Volume: 11,664

CBOT Share: 1.54%

CBOT Mini Gold Volume: 355

CBOT Mini Silver Volume: 228

CME Emini Russell 1000 (100X) Volume: 2801

Eurex US Mini Russell 1000 (100X) Volume: 422

NYBOT Mini Russell 1000 (50X) Volume: 932

CFE Mini Russell 1000 (100X) Volume: 20

CME Emini Russell 2000 Volume: 93,856

Eurex US Mini Russell 2000 Volume: 2516

CFE Mini Russell 2000 Volume: 40

Notes: The IPE set a new daily volume record of 187,295 Brent Crude Oil contracts, the second consecutive volume record. The CBOE Futures Exchange traded 2007 VIX futures yesterday.

Liffe Eurodollar Over-Under

Liffe/Globex: 1.00%

Liffe/CME: .82%

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
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