Archive for the ‘Uncategorized’ Category

FTF News Chicago DerivOps Conference – April 1, 2014

April 2, 2014

I’ve said this before, here and elsewhere, that I’ve been a great admirer of FTF News for some time. The team at FTF is great at what they do: new aggregation and curation, tremendous original content, and conferences and events in New York, Chicago and London.

Today FTF held their Chicago DerivOps conference. I was honored to chair the event, and to moderate a panel on FMCs with Yvonne Downs from Jefferies, Max Itkin from Pentwater Capital and Rajeev Ranjin from the Chicago Fed. The full conference agenda is here.

As conference chair, I was able to deliver some opening remarks. As I do sometimes, I selected the topic of FCM data, as published by CFTC, as a topic on which to focus. The opening remarks are pasted below, but full disclosure: I pretty much strayed from the text and spoke extemporaneously. I was supposed to talk for 5 to 10 minutes. I had to cut myself off when the clock counted down from 15 minutes to zero.

The lineup was, as always, terrific. I was proud to be able to contribute to the event. My guess is that most attendees got a lot out of it. I certainly did.

My comments:

I want to start by thanking all the fine folks at Financial Technologies Forum – my friend Maureen Lowe, Katie Flanagan, Eugene Grygo, Liz Acury, and the rest of their team. I’ve been fortunate to be a part of this DerivOps conference for a couple of years now, it really is one of the best conferences in Chicago. And I’ve been a big fan of Maureen and the rest of the folks at FTF. If you’re not engaged with this team – on Twitter, in their LinkedIn group, on their website, well, I’d strongly encourage you all to do that. They are excellent at what they do – the content aggregation and curation, the original content they are producing, it is all really terrific stuff. Trust me when I say this, you should be engaged with them in the many ways they are available -it will help you professionally in ways that will surprise you.

I want to thank the sponsors of today’s event: TriOptima, LCH Clearnet, Tradeweb, Options Clearing Corp and Omgeo, Lombard Risk, Misys, Simcorp and MarketAxess. Without these sponsors this event would not be possible, thank you all for participating. And to the attendees, be sure to visit with them during the breaks today – they have a lot to offer in the FinTech space, you should take some time to see what innovations these sponsors are bringing online in the recent past and for the rest of 2014.

Finally, I want to thank all of you, our attendees. Obviously, the purpose of the event, the reason we’re all here, the sponsors, FTF, all the panelists and speakers, is for you. I’m sure you’ll get a lot our of today’s event.

We have an excellent lineup: In a few minutes we’ll get started with a roundtable on SEFs – Swap Execution Facilities, those brand new regulated platforms on which OTC swaps are required to be traded, born out of the Financial Reform Bill that we all know as Dodd-Frank, The moderator for this panel is John McPartland, the Senior Policy Advisor at the Federal Reserve Bank, a fellow I first met a few years ago here at the FTF DerivOps conference in Chicago. Pay attention to this panel, folks – McPartland is one of the really great minds in trading and clearing policies, and he has a top-notch lineup with folks from LCH Clearnet, Citi and Tradeweb.

After a short break we’ll have a presentation by Mary Harris from TriOptima on portfolio reconciliation, and after that we’ll have a panel on Collateral Management, moderated by Larissa Miller, founder of Stuart Investments and a professor at IIT, with panelists from Northern Trust, Nuveen and she’ll have Ted Levroni from Omgeo.

After lunch I’ll be moderating a panel on FCMs – we’ll be touching on some of the points from this morning’s panels, and looking at some of the criteria that firms can and should use to help them choose clearing firms for the OTC and exchange-traded derivatives activity. This panel includes Max Itkin, head of Ops at Pentwater Capital, Yvonne Downs, Chief Operating Office at Jefferies, and Rajeev Ranjin, a policy specialist at the Chicago Fed.

Following that we’ll have a panel on Global Reg Compliance, moderated by Michael Sackheim from the law firm Sidley Austin, with panelists from Gladius Capital Management, the FCM Straits Financial, and with Gavin McConville from Lombard Risk.

That panel will be followed by a presentation Risk and Reconciliation in the derivatives market, by Maan Bsat from Misys.

We’ll wrap thing up this afternoon with a panel moderated by Larissa Miller from Stuart Investments and IIT, the topic there will address how firms can cope with the new rules and requirements for clearing. Larissa will have Joe Corcoran from OCC, Kevin Walker from Nuveen, and Joe Kamnick, a director at the SEC, who is really sharp and who was on one of my panels at last year’s conference. He’s a great guy and a really good sport. We were a little hard on him last year, as a representative of one of the market regulators, but he came though that okay. The proof is that he is back again this year. I’m looking forward to hearing what Joe has to say.

Let me wrap up my comments with a few stats, some raw numbers to keep in the back of your mind as you speak to the sponsors, as you listen to the speakers, as we go through the day. People often refer to the explosion of exchange volumes as a sign of robust health and growth in the US Capital markets. They often make the same case when talking about outstanding notional amounts for the swaps market. My own suspicion is that volume alone, or outstanding notional amount alone, only tells part of the story. Certainly volume figures are indicative of exchange and clearinghouse health, but I’m not sure that the same can be said of the overall health of the US financial markets.

As you all know, FCMs and broker dealers are required to submit, to CFTC, FOCUS reports, or FCM 1FR forms if they’re not a broker dealer, and the CFTC uses these reports to produce their FCM Financial Data reports every month. There is an extensive archive of these reports at CFTC’s website: cftc.gov. These reports have a ton of useful information that anyone can review, and can use to draw some conclusions about the relative health of the US futures market, and by extension, the US swaps market, the US securities markets, and the US financial world in general.

Since the focus of my consulting practice is mainly in the FCM back-office technology world, I look at these reports pretty often. In preparation for this years DerivOps conference, I took a look at the year-end reports for 2013, posted by CFTC in February, and year-end from 10 years before, in 2003. As one might expect, the pure raw figures provided by CFTC show some positives and some negatives.

For example: in those 10 years, between 2003 and 2013, the amount of US Customer Segregated Funds more than doubled – from a little over $71 million in 2003, to $143.7 million in 2013. That is a clear sign of outstanding growth. And it is worth noting that during this period, the US and the global economy went through staggering upheaval: from the collapse of the US housing market, the global recession, the international credit crisis, the collapse of Lehman and Bear Stearns, the bankruptcy of what was then one of the top-10 FCMs in the US – MF Global, and all the attendant upheaval from that – missing customer money, accusations of mismanagement and malfeasance. MF Global’s collapse was followed in short order by the revelations out of Cedar Falls Iowa that Russ Wasendorf had stolen more than $200 million of his own customer’s money to fund his lavish lifestyle and to fund his divorce settlement with his ex-wife. Russ Wasedorf’s actions led to the demise of a mid-tier FCM called Peregrine Financial, or PFG Best, as it was rebranded.

Fun Fact, as an aside: in the months just after MF Global failed, US customers took more than $10 million out of the US Futures Markets. That sounds like a mind-bogglingly large figure, but at the time, it was only one-fifteenth of the total ledger balance of what was then around $153 million in US Customer funds.

So that’s some good news. Here is some news that might be considered less-good:

Between 2003 and 2013, the concentration of US Customer Seg at the top end of the spectrum has grown. In 2003, the top-5 FCMs had 41.7% of the total reported Customer Seg, and the top-10 had 65% of the Seg Funds reported. By 2013, the top-5 reported 49.6% and the top-10 had 75% of the US Customer Seg balance. That’s right, as of December 2013, more than thee quarters of all the US Customer Seg funds were held at just 10 FCMs.

I’ll leave it to others to decide whether that is a sign of health in the US futures industry. But here are some figures that I, and many others, consider definitely bad news.

In 2003, 177 FCMs submitted FOCUS reports or FCM 1FRs to CFTC. In 2013 only 100 did.
In 2003, 102 FCMs reported that they held Customer Seg funds to CFTC. As of December 2013, just 69 FCMs reported that they are clearing Customer Seg.

So in ten years, while the amount of Customer Seg more than doubled, we’ve seen a decrease of roughly 30% in the number of FCMs, and in the number of FCMs who clear customer business. In oder to promote a healthy, robust, vibrant US capital market, that is a trend that I think we should all commit ourselves to reversing.

With that said, with those figures fresh in your mind, let’s get started with today’s program. First up is the roundtable on SEFs, so I’ll turn the dais over to a man I greatly admire, John McPartland from the Chicago Fed.

If you were at the event, drop a comment in below and let me know what you thought of it, or e-mail me at my G-Mail address and say hello. (You can find the G-Mail address on my Twitter profile, my LinkedIn profile, the Needham Consulting Facebook Page, or my Google+ profile page.

2013 Year-End FCM Financial Data Report

February 16, 2014

Here are the 2013 results from the CFTC report on financial data for U.S. FCMs. The ORIGINAL source is here: CFTC Financial Data for FCMs

The same data sorted by U.S. Customer Seg required (FCM Data 2013 Year-End) is posted here. (Downloads as an Excel spreadsheet.)

For perspective, the same data (sorted by U.S. Customer Seg required) for year-end 2012 is posted here: (FCM Data 2012 Year-End) 2012 Year-End Results. (Also downloads as an Excel spreadsheet.)

The Details

The TOTAL US Customer Seg amount reported in 2013 was $143,741,158,888, compared to a 2012 amount of $145,900,203,492, down almost $2.15 billion. or roughly 1.5%.

Following is a list of all US FCMs that reported Customer Seg requirements in their December 2013 reports to CFTC.

1. Goldman Sachs – 1st in 2013, 1st in 2012, 2013 Seg required was $19,505,062,033 down about $600 MM.

2. JP Morgan Securities- 2nd in 2013, 2nd in 2012, 2013 Seg required was $16,068,072,825 down more than $2 B.

3. Newedge – 3rd in 2013, 3rd in 2012, 2013 Seg required was $13,164,428,650 down about $1.7 B.

4. Deutsche Bank – 4th in 2013, 4th in 2012, 2013 Seg required was $12,402,354,155 UP about $1.5 B.

5. Morgan Stanley – 5th in 2013, 7th in 2012, 2013 Seg required was $10,233,308,793 UP about $1.3 B.

6. Merrill Lynch – 6th in 2013, 8th in 2012, 2013 Seg required was $10,097,450,250 UP about $3 B.

7. UBS Securities – 7th in 2013, 5th in 2012, 2013 Seg required was $8,191,731,999 UP about $400 MM.

8. Credit Suisse – 8th in 2013, 9th in 2012, 2013 Seg required was $7,918,920,731 UP about $1.4 B.

9. Barclays Capital – 9th in 2013, 10th in 2012, 2013 Seg required was $6,377,915,171 UP about $170 MM.

10. Citigroup – 10th in 2013, 6th in 2012, 2013 Seg required was $4,844,742,715 down about $2.8 B.

11. RJ O’Brien – 11th in 2013, 11th in 2012, 2013 Seg required was $3,703,754,600 down about $100 MM.

12. ADM Investor Services – 12th in 2013, 12th in 2012, 2013 Seg required was $2,931,401,486 UP about $150 MM.

13. Mizuho Securities – 13th in 2013, 17th in 2012, 2013 Seg required was $2,054,124,905 UP about $300 MM.

14. BNP Paribas Prime Brokerage – 14th in 2013, 15th in 2012, 2013 Seg required was $2,019,918,460 UP bout $100 MM.

15. ABN AMRO Clearing Chicago – 15th in 2013, 13th in 2012, 2013 Seg required was $1,981,333,752 down about $500 MM.

16. Interactive Brokers – 16th in 2013, 16th in 2012, 2013 Seg required was $1,939,801,946 UP a little under $200 MM.

17. Jefferies Bache – 17th in 2013, 14th in 2012, 2013 Seg required was $1,879,889,000 down about $500 MM.

18. FC Stone – 18th in 2013, 19th in 2012, 2013 Seg required was $1,582,727,766 UP about $30 MM.

19. RBS Securities – 19th in 2013, 20th in 2012, 2013 Seg required was $1,449,331,490 down about $80 MM.

20. Rosenthal Collins Group – 20th in 2013, 18th in 2012, 2013 Seg required was $1,412,661,189 down about $17 MM.

21. MacQuarie Futures – 21st in 2013, 22nd in 2012, 2013 Seg required was $1,228,662,410 UP more than $230 MM.

22. HSBC Securities – 22nd in 2013, 21st in 2012, 2013 Seg required was $1,048,317,517 UP about $30 MM.

23. RBC Capital Markets – 23rd in 2013, 29th in 2012, 2013 Seg required was $913,109,618 UP about $350 MM.

24. BNP Paribas Securities – 24th in 2013, 31st in 2012, 2013 Seg required was $867,187,524 UP more than $300 MM.

25. Goldman Sachs Execution & Clearing – 25th in 2013, 24th in 2012, 2013 Seg required was $847,350,112 UP about $60 MM.

26. McVean Trading & Investments – 26th in 2013, 23rd in 2012, 2013 Seg required was $780,942,381 down about $140 MM.

27. Merrill Lynch Professional Clearing – 27th in 2013, 26th in 2012, 2013 Seg required was $768,875,721 UP about $160 MM.

28. Santander Investment – 28th in 2013, 30th in 2012, 2013 Seg required was $755,009,247 UP about $190 MM.

29. JP Morgan Clearing – 29th in 2013, 32nd in 2012, 2013 Seg required was $700,772,180 UP about $170 MM.

30. Timber Hill – 30th in 2013, 27th in 2012, 2013 Seg required was $697,230,646 UP about $85 MM.

31. Morgan Stanley Smith Barney – 31st in 2013, 25th in 2012, 2013 Seg required was $541,746,031 down about $110 MM.

32. Vision Fin’l Markets – 32nd in 2013, 28th in 2012, 2013 Seg required was $508,664,310 down a little more than $100 MM.

33. KCG Americas – 33rd in 2013, 34th in 2012, 2013 Seg required was $479,067,087 UP about $63 MM.

34. Advantage Futures – 34th in 2013, 33rd in 2012, 2013 Seg required was $472,691,258 down about $18 MM.

35. Tradestation – 35th in 2013, 35rd in 2012, 2013 Seg required was $405,195,906 UP about $17 MM.

36. State Street – 36th in 2013, 44th in 2012, 2013 Seg required was $313,855,544 UP more than $210 MM.

37. Rand Financial – 37th in 2013, 36th in 2012, 2013 Seg required was $305,541,900 down about $70 MM.

38. EFL Futures – 38th in 2013, NOT ON LIST in 2012, 2013 Seg required was $251,656,003 UP $251 MM.

39. ED&F Man Capital Mkts – 39th in 2013, 61st in 2012, 2013 Seg required was $224,076,887 UP around $200 MM.

40. Gain Capital – 40th in 2013, 43rd in 2012, 2013 Seg required was $141,613,581 UP around $28 MM.

41. Dorman Trading – 41st in 2013, 40th in 2012, 2013 Seg required was $139,473,664 UP around $5 MM.

42. CHS Hedging – 42nd in 2013, 39th in 2012, 2013 Seg required was $138,600,871 down around $62 MM.

43. Phillip Futures – 43rd in 2013, 38th in 2012, 2013 Seg required was $128,018,797 down around $90 MM.

44. UBS Financial Services – 44th in 2013, 42nd in 2012, 2013 Seg required was $127,693,950 UP around $11 MM.

45. BNY Mellon Clearing – 45th in 2013, 41st in 2012, 2013 Seg required was $127,163,740 UP a little over $2 MM.

46. TD Ameritrade – 46th in 2013, 45th in 2012, 2013 Seg required was $125,798,949 UP around $26 MM.

47. Straits Fin’l – 47th in 2013, 47th in 2012, 2013 Seg required was $105,553,578 UP around $21 MM.

48. Marex North America – 48th in 2013, 50th in 2012, 2013 Seg required was $103,751,249 UP around $26 MM.

49. Optionsxpress – 49th in 2013, 48th in 2012, 2013 Seg required was $88,080,380 UP around $2.5 MM.

50. Cunningham Commodities – 50th in 2013, 49th in 2012, 2013 Seg required was $78,442,862 down around $5 MM.

51. Linn Group – 51st in 2013, 51st in 2012, 2013 Seg required was $76,819,233 UP around $1.3 MM.

52. Crossland – 52nd in 2013, 46th in 2012, 2013 Seg required was $76,240,649 down around $8 MM.

53. Institutional Liquidity* – 53rd in 2013, NOT ON LIST in 2012, 2013 Seg required was $54,415,840 UP $54.4 MM.

54. York Business Associates – 54th in 2013, 53rd in 2012, 2013 Seg required was $50,049,543 down around $9.6 MM.

55. Nomura Securities – 55th in 2013, 59th in 2012, 2013 Seg required was $48,479,739 UP around $17 MM.

56. AMP Global Clearing – 56th in 2013, 56th in 2012, 2013 Seg required was $42,518,643 UP around $4.5 MM.

57. E Trade Clearing – 57th in 2013, NOT ON LIST in 2012, 2013 Seg required was $39,409,278 UP $39 MM.

58. Mid Co Commodities – 58th in 2013, 55th in 2012, 2013 Seg required was $36,944,999 down around $2 MM.

59. Ironbeam – 59th in 2013, 54th in 2012, 2013 Seg required was $36,264,716 down around $11.5 MM.

60. Xchange Financial Access – 60th in 2013, NOT ON LIST in 2012, 2013 Seg required was $27,685,254 UP $27.6 MM.

61. Frontier Futures – 61st in 2013, 60th in 2012, 2013 Seg required was $25,658,100 down a little less that $5 MM.

62. Wells Fargo Securities* – 62nd in 2013, NOT ON LIST in 2012, 2013 Seg required was $21,409,743 UP $21.4 MM.

63. Oppenheimer & Co. – 63rd in 2013, 58th in 2012, 2013 Seg required was $13,893,625 down around $19 MM.

64. GH Financials – 64th in 2013, 68th in 2012, 2013 Seg required was $6,012,801 UP about $5.5 MM.

65. Daiwa Capital Mkts America – 65th in 2013, 64th in 2012, 2013 Seg required was $4,340,614 UP about $1.3 MM.

66. Friedberg Mercantile Group – 66th in 2013, 62nd in 2012, 2013 Seg required was $3,996,235 down about $5 MM.

67. LEK Securities – 67th in 2013, 63rd in 2012, 2013 Seg required was $2,309,600 down about $2.5 MM.

68. Cantor Fitzgerald – 68th in 2013, 67th in 2012, 2013 Seg required was $1,312,018 UP about $100K.

69. Alpari (US) – 69th in 2013, 66th in 2012, 2013 Seg required was $322,439 down about $1.7 MM.

* – Institutional Liquidity and Wells Fargo Securities were both on the list as an FCM in 2012 but both FCMs had zero for Customer Seg Required.

U.S. FCM Violations: Customer Segregated and Secured, Minimum Capital Violations

September 27, 2013

UPDATE:: I am going to start adding Secured (30.7) violations and FCM minimum capital violations too. I also changed the blog post title. This post still does not include LIBOR violations, nor various precious metal scams, nor simple supervision violations.

Since, alas, it has become so hard to keep track of all the FCM violations of Customer Seg Funds regulations, I decided to create this so I have one place to refer to in the future. Note please that these are only Customer Seg violations, not violations of 30.7 regs nor of Retail Foreign Exchange Dealer (RFED) net capital requirements. Not various and sundry other ponzi schemes, fraudulent precious metal scams, or other violations. These are all just violations of the U.S. Customer Segregation rules and regulations. This post also doesn’t include the many and varied enforcement actions against all the bankers caught up in the LIBOR rip-off/scandal.

Source: Enforcement actions as archived on the CFTC website.

2013
September 30, 2013: ADM Investor Services (ADMIS): Ugh. Add ADM to the list. Caught commingling customer and prop accounts in their Customer Seg account. ADMIS This appears to have ended in July 2011 and probably was self-reported.

September 27, 2013: Vision Financial: fined for Seg violations in 2008/09. Vision Financial

September 27, 2013: R.J. O’Brien: an inter-account transfer from Secured (30.7) to Seg, for a non-clearing FCM for whom RJO cleared, put the non-clearing FCM into a Secured deficit. RJO Ops apparently made the transfer to cover a Seg margin deficiency for the omnibus account but never told the non-clearing FCM, nor called the non-clearing FCM for additional funds. R.J. O’Brien

June 19, 2013: ABN Amro Chicago: fined for violations in 2011. ABN Amro

April 9, 2013: Interactive Brokers: the firm “failed to compute on a currency-by-currency basis the amount of customer funds on deposit and required to be on deposit in segregated accounts.” Interactive Brokers

February 19, 2013: Enskilda Futures Limited (EFL), a London-based Futures Commission Merchant (FCM) fined $125,000 for failure to maintain adequate capital after undermargining a proprietary omnibus account. Enskilda

January 3, 2013: Muzuho Securities fined for Secured 30.7 violations. Mizuho Securities

2012
December 3, 2012: MBF: Federal Court Orders MBF Clearing Corp. to Pay $650,000 for Violating Customer Fund Segregation Requirements. MBF judgement

November 21, 2012: Cantor Fitzgerald:operational inadequacies and under seg. Cantor Fitz

October 10, 2012: Farr Financial. (I had somehow missed this one last year. I’d also never heard of Farr Financial before now.) Improper investment of customer segregated funds. Farr Financial

July 10, 2012: Peregrine Financial: the infamous Russ Wasendorf theft of $215 million. Peregrine Financial and Russ Wasendorf.

April 4, 2012: JP Morgan: fined $20 million for using the customer seg funds of a FCM called LBI as “net free equity” covering intra-day credit that JP Morgan extended to LBI over a 22-month period. During the Lehman bankruptcy, when LBI requested JP Morgan to release the customer seg funds, JP Morgan refused because it was using the customer money to cover LBI proprietary credit lines. J. P. Morgan 2012

March 13, 2012: MBF: This is the original CFTC complaint against MBF, settled on December 3rd above. MBF original charges.

New CFTC FCM Data Released (May 2013)

July 16, 2013

http://cftc.gov/MarketReports/FinancialDataforFCMs/index.htm

CFTC just published the May month-end report for FCM Financial Data. The raw link is above. I have sorted the data differently, ad posted the resorted data below.

This is from FCM 1FR reports, or CFTC/SEC FOCUS reports if the FCM is also a broker-dealer. Attached here is the CFTC report sorted by customer assets in Seg, and another version sorted by Customer Seg Required. I believe this is the best metric for measuring the depth and breadth of the U.S. futures industry, much moreso than simple exchange volumes and or FCM trading volumes. To me, trading volume is a good measurement of exchange/clearinghouse health (and revenue, naturally). But for industry health, I think customer assets is a better measurement.

Here is the May 2013 CFTC FCM Data sorted by Seg assets, and…

here is the same data sorted by U.S. Customer Seg Required.

Note that those are both download-able Excel Spreadsheets.

Weird fact: JP Morgan and Goldman are the two biggest FCMs as measured by U.S. Customer Seg amounts. Interestingly, Goldman has higher Seg Required (column J) than JPM, by about $1B. But JPM has more assets in Seg than GS, by about $600MM.

The four largest FCMs – GS ($17.5B), JPM $16.5B), Newedge ($14.3B), Deutsche Bank ($14.1B) – completely dwarf the rest. The 5th biggest FCM – UBS ($8.4B) – has way less than half the Cust Seg Required that Goldman carries.

The largest FCM, measured by U.S. Customer Seg Required, that is also *not* a broker dealer: RJ O’Brien, with $3.7MM in Cust Seg Required.

The largest FCM that has zero required in 30.7 funds (from foreign boards of trade): McVean Trading in Memphis. This means that 100% of their customer positions and assets are on U.S. boards of trade.

The total amount of Customer Seg required across all FCMs is $143.4B. Total Customer Seg assets is $154.5B, so an excess of $11.1B exists in FCM Seg bank accounts.

49.5% of all Customer Seg is carried at the top five FCMs: JPM, Goldman, Newedge, Deustsche Bank, and UBS. Nearly 75% of U.S. Customer Seg Required is carried at the top ten FCMs: the top five above plus Merrill, Citi, Morgan Stanley, Credit Suisse and Barclays.

The total number of FCMs even carrying U.S. Customer Seg balances – meaning the number of FCMs clearing customer business – was 70 in May, 2013. In November 2003 that number was 102, so we’re down more than 30% in FCMs clearing customer business in less than 10 years. In 2003, 102 FCMs reported $67.1B in Customer Seg. May 2013 reports showed $143.4B spread among 30% fewer FCMs.

I would argue that the number of FCMs carrying customer business is really on the only sign of ill-health in the U.S. futures industry. All other signs, especially growth of Customer Seg (and also exchange volumes) point to good health in the futures industry.

I’d be very interested to know what you all have to think about the signs of health in the futures industry, still recovering from MF Global and the Wasendorf fraud. What do these figures mean to you?

On Voluntary Subscriptions

January 9, 2013

I am a believer that folks should use whatever free resources available to them, both professionally and personally. Facebook, Twitter, LinkedIn, and Instagram are examples of services that are free for ordinary users/consumers, and I use all of them, for personal or professional purposes. (Sometimes I use one or more of them for both.) My usage for each of these services is based on their cost to me – nothing! If one or more of these services started to charge for the servies, then I’d make a value judgement on what the overall worth was, to me, and either pay or jettison the service, as my values dictated.

An example of this was the recent Chicago Tribune decision to switch from entirely-free content to limited free content, with a paywall behind which “premium content” was stored. This change came in November, 2012. For years before the switch I read the Trib online, paying nothing for all the content. When the premium content – mainly, opinion columnists, but also content from Trib partners publications like Forbes and The Economist, along with digital archives dating to the 1850s – was moved behind the paywall, I had to make a decision on whether to subscribe. (Ultimately I chose to subscribe. The Trib was and is, after all, my original hometown newspaper, and during the month I was considering whether to subscribe, I found I really missed a lot of the newly-minted “premium” content.)

The examples above – free applications/content, mandatory subscriptions – are two examples of how application providers and content providers deliver their apps and content to consumers. There is a third type, however, referred to sometimes as “voluntary subscriptions.”

One example of “voluntary subscriptions,” and one that I cite every once in a while when I’m talking about this topic, is science fiction author John Scalzi. Science fiction fans know Scalzi as the Hugo Award-nominated author of Old Man’s War, or maybe as the Campbell Award winner as best new Sci-Fi author in 2005. Scalzi also served as president of the Science Fiction and Fantasy Writers of America.

Not everyone knows, though, that Scalzi’s first two novels, including the Hugo-nominated Old Man’s War, were published under a voluntary-pay model on his website.

The real purpose of this post is to highlight another voluntary subscription content provider: the John Lothian Newsletter, and to encourage consumers of this daily newsletter to subscribe to the service.

We’re all familiar with the stats that Lothian publishes a couple times per year: MarketsWiki.com with 15.5 million views in 2012, more than 33 million views since it launched; MarketsReformWiki.com with 3 million page views since launching.

It is possible that many are not aware, though, that these wikis are funded entirely from the newsletter subscriptions (plus whatever sponsorship revenues the newsletter generates).

But there is more to the Lothian Newsletter than just the newsletter itself, and the associated wikis. There is also the Futures Crowd site launched after the collapse of MF Global, which solicited input from all over the capital markets industry on addressing concerns rising out of that firm’s failure (and to which I contributed); there is the Restoring Customer Confidence video series; there is the MarketsWiki.TV video series that covers a wide variety of captial markets industry-related topics, from the listing of new types of futures contracts to social media strategies for market participants.

The daily Lothian newsletter provides valuable, essential information to market participants at every level of the food chain, from traders to technologists, from front-office staff to back-office operations professionals, and especially for consultants like me. Put another way, if you don’t read the newsletter every day, then I’m smarter than you are, because I do read it every day.

This post is not some Public Television pledge drive, though, and it is not a paid advertisement either. I am a fan of the work that Lothian and his team do. I believe that this team is providing a genuinely valuable and vital service to the industry in which I work, and I believe that they deserve recognition, and that they deserve payment, for the terrific work they do.

So if you’re a participant, like I am, in the global capital market or futures industry, and you already subscribe to the newsletter, it is time to renew that subscription. Do that now. If you participate in the capital markets/futures industry and you don’t subscribe to the newsletter, you are doing yourself and your career a great disservice and you should fix that now by subscribing.

Yes, it is voluntary. But it is important, too, to all of us, to support the work that the team behind the Lothian Newsletter, and MarketWiki, MarketsReformWiki, the Restoring Customer Confidence video series and MarketsWiki.TV, are doing.

Subscribe.

John P. Needham
January 4, 2012
11:05 AM
Aurora, IL

2012 in review

December 31, 2012

The WordPress.com stats helper monkeys prepared a 2012 annual report for this blog.

Here’s an excerpt:

600 people reached the top of Mt. Everest in 2012. This blog got about 3,500 views in 2012. If every person who reached the top of Mt. Everest viewed this blog, it would have taken 6 years to get that many views.

Click here to see the complete report.

Normandy Beach, NJ – Post Sandy #2

November 15, 2012

A friend I’ve never met (but will, someday, I swear) – Sal Arnuk – put together this little video. Vocals and guitar are from Sal. He also took the pictures from Normandy Beach. Notice that there is a boat in the parking lot of the big church with the green tile roof. Bailey Needham, our oldest son (12 years old in January) was baptized in that church in the summer of 2001.

FIA Chicago Golf Outing

September 27, 2011

It was cold. It was rainy. We had a blast and finished three-under-par to boot.

The Needham Consulting group at the FIA-Chicago golf outing. From left to right: Mike Wilkins, Rick Asken, Steve Ishmael. (not pictured = me)

UPDATE:
Adding this image of Mike Wilkins’ follow-through on our 16th hole, a par-3 over water. This hole was sponsored by Options Clearing Corp.


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