NYT : Business Giants to Announce Creation of a Computing System Based on Ethere

Business Giants to Announce Creation of a Computing System Based on Ethereum

SAN FRANCISCO — Microsoft, JPMorgan Chase and other corporate giants are joining forces to create a new kind of computing system based on the virtual currency network Ethereum.
Some 30 companies are set to announce on Tuesday the formation of the Enterprise Ethereum Alliance, which will create a standard version of the Ethereum software that businesses around the world can use to track data and financial contracts.
The new organization, a nonprofit, is part of a broader movement to harness the technological concept known as the blockchain, which was introduced to the world by Bitcoin.
Blockchains offer a way for unrelated computers and companies to simultaneously collect and store information without relying on a central authority, similar to the way that Wikipedia is written and maintained by a group of writers and editors rather than a single author.
The technology is viewed as being harder to corrupt or hack because of its reliance on many people rather than a single authority.
Many big corporations have been looking for ways to use blockchain technology to keep track of information created by unrelated companies, like stock and bond trading transactions.
IBM has made a particularly big push into the blockchain business, and it has been leading a separate collaborative project, known as the Hyperledger Foundation.
The new Ethereum alliance has been described by some of its backers as a way to ensure that the IBM-led blockchain effort is not the only option for businesses looking to use the technology. Other companies like R3 and Chain have also been developing alternative blockchains.
“We are pretty equally spending our time across the different chains,” said Alex Batlin, the global head of blockchain at Bank of New York Mellon, which is joining the Ethereum alliance.
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Ethereum was introduced in 2013 by a developer named Vitalik Buterin, then 19, who had previously worked on Bitcoin. Since its official release in 2015, the Ethereum network has been the target of hackers and theft.
Yet it has also won a large following among programmers who view it as a new and sophisticated way for groups of people and companies to initiate and track transactions and contracts of all sorts.
That has led some companies to bet that Ethereum will win the race to become the standard blockchain for future business operations.
“In every industry that we come across, Ethereum is usually the first platform that people go to,” said Marley Gray, the principal blockchain architect at Microsoft.
The creation of the Ethereum alliance shows a continuing commitment among big companies to making the technology work, in large part because it promises to create much more streamlined databases that require less back-office maintenance.
Accenture released a report last month arguing that blockchain technology could save the 10 largest banks $8 billion to $12 billion a year in infrastructure costs — or 30 percent of their total costs in that area. Accenture is one of 11 companies on the governing board of the Ethereum alliance.
The current Ethereum network has an internal virtual currency known as Ether, the value of which has risen and fallen over the last two years. On Monday, a single Ether was worth around $15, and all the outstanding Ether were worth around $1.3 billion.
Ethereum, however, is much more than just a system for tracking currency. It also allows people to write what are known as smart contracts into the Ethereum blockchain. Two companies could, for instance, create a contract that would automatically send money to one of them if a particular news authority reported that the Chicago Cubs won the World Series or that “La La Land” won the Oscar for best picture. (As the latter example shows, what would happen if the authority was wrong is a more difficult question.)
Because of its capacity for smart contracts — and other complicated computing capacities — Ethereum is viewed as more agile and adaptable than Bitcoin.
As with Bitcoin, however, anyone can join the Ethereum network and see all the activity on the Ethereum blockchain.
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The companies working on the Enterprise Ethereum Alliance want to create a private version of Ethereum that can be rolled out for specific purposes and be open only to certified participants. Banks could create one blockchain for themselves, and shipping companies could create another for their own purposes.
The purpose of the alliance is to create a standard, open-source version of Ethereum that can provide a foundation for any specific use case.
The private systems are not likely to require an Ether virtual currency, although the companies are hoping to create modules that will allow users to put in and take out individual elements of Ethereum as they choose.
Many companies have already been working to create their own versions of Ethereum for specific purposes.
JPMorgan, for instance, has created a version of Ethereum known as Quorum that the bank has been using in tests to move money between JPMorgan branches in different countries. Quorum will become a part of the new version of Ethereum being developed by the alliance.
Some of the companies working in the new alliance hope that the private Ethereum blockchains will, at some point, be able to connect to the public Ethereum blockchain, creating a standard for information storage and movement around the world.
“Even if you create private networks, if you can anchor them to public networks, you get an extremely strong set of links together,” Mr. Batlin, of BNY Mellon, said.
The work on Ethereum has continued despite an attack on an Ethereum project last year in which a hacker gained control of more than $50 million worth of Ether.
Mr. Batlin and others involved in the Ethereum Alliance said the way the Ethereum developers had handled that attack convinced them of the maturity of the technology.
Today, Ethereum has a larger community of volunteer developers, and more computers on its network than Bitcoin. And the members of the new alliance — which include Banco Santander, BBVA, Credit Suisse, ING, Intel, Thomson Reuters and UBS — say the real-world testing of Ethereum makes it stronger than the alternatives.
“Ethereum has this massive advantage of having the public network that has been tested for two years,” Mr. Gray, of Microsoft, said.

FT : Greeks resume pulling cash from banks; deposits slump to lowest since 2011

Greeks resume pulling cash from banks; deposits slump to lowest since 2011


Oh no. The Greek bank deposit flight chart is back.

Mounting concerns over the state of Greece’s bailout programme are hurting the country’s banking system, which logged its second consecutive month of deposit outflows in January.

Greek businesses and household pulled €1.63bn of deposits from banks in January compared to December, pushing the financial system’s total deposits to the lowest since 2001 at €119.75bn, according to figures from the Bank of Greece.

The resumption of cash withdrawals reverses a steady rise in deposits seen after Athens agreed a new three-year bailout programme that bought it back from the brink of default in the summer in 2015.

But conflict between Greece’s creditors in the EU and IMF have marred a tentative economic recovery, with the jitters also being felt in the banking system.

Greece’s economy contracted by 0.4 per cent in the last three months of 2016 – a period which coincided with a setback in its rescue programme after prime minister Alexis Tsipras made a series of unannounced government spending plans that irked creditors led by Germany.

As it stands, Athens is waiting for creditors to sign off on its bailout progress in order to unlock its latest round of bailout cash, estimated at around €6bn. The country will need the cash to make a series of debt repayments due in July.

Bailout monitors from the EU and IMF have returned to the country this week to begin their assessment of the reforms demanded as part of the €86bn programe (read more from the FT’s Jim Brunsden here).

But the major divisions are between the Brussels and the IMF rather than with the left-wing Syriza government. The Washington-based Fund wants EU creditors to grant Greece bolder debt relief in order to facilitate its return to the international bond markets after its bailout ends in 2018.

Greece’s banking system still labours under the capital controls the government was forced to impose in the summer of 2015 to staunch cash flows from banks.

>>> Target sinks 10% in response to disappointing earnings/guidance, currently t

\Target sinks 10% in response to disappointing earnings/guidance, currently trading around the $60 level in pre-market (66.91)
  • Co cited a rapidly-changing consumer behavior with very strong digital growth but unexpected softness in physical stores. Co noted that guidance reflects the impact of the Company's transition to a new financial model, which will be covered in the Company's meeting with the financial community later today.
  • Related stocks: Walmart (WMT), Kohl's (KSS), J.C. Penney (JCP), Sears Holdings (SHLD), Best Buy (BBY), Bed Bath & Beyond (BBBY), SPDR S&P Retail ETF (XRT)

>>> Target misses by $0.06, reports revs in-line; guides Q1 and FY18 EPS well be

--> -10% pre open

Target misses by $0.06, reports revs in-line; guides Q1 and FY18 EPS well below consensus (66.91)
  • Reports Q4 (Jan) earnings of $1.45 per share, excluding non-recurring items, $0.06 worse than the Capital IQ Consensus of $1.51; revenues fell 4.3% year/year to $20.69 bln vs the $20.69 bln Capital IQ Consensus, reflecting a 1.5 percent decline in comparable sales combined with the removal of pharmacy and clinic sales from this year's results.
    • Comparable digital channel sales grew 34 percent and contributed 1.8 percentage points of comparable sales growth.
    • Segment earnings before interest expense and income taxes (EBIT), which is Target's measure of segment profit, were $1,344 million in fourth quarter 2016, a decrease of 13.5 percent from $1,554 million in 2015. Fourth quarter EBITDA and EBIT margin rates were 9.5 percent and 6.5 percent, respectively, compared with 9.8 percent and 7.2 percent, respectively, in 2015.
    • Fourth quarter gross margin rate was 26.9 percent, compared with 27.9 percent in 2015, reflecting markdown pressure from promotional and clearance activity and costs associated with the mix shift between the Company's store and digital channels, partially offset by the benefit of the sale of the Company's pharmacy and clinic businesses, a favorable merchandise mix, and cost of goods savings.
  • Warned: Co guided Q4 EPS $1.45-1.55 vs. $1.65 consensus; comps (1.5)-(1%) on Jan 18.
  • Co issues downside guidance for Q1, sees EPS of $0.80-1.00, excluding non-recurring items, vs. $1.33 Capital IQ Consensus Estimate.
  • Co issues downside guidance for FY18, sees EPS of $3.80-4.20, excluding non-recurring items, vs. $5.33 Capital IQ Consensus Estimate.
  • Target's 2017 guidance reflects the impact of the Company's transition to a new financial model, which will be covered in the Company's meeting with the financial community later today.
  • Under the current program, the Company invested $264 million in the fourth quarter, leaving ~$4.7 billion remaining under the current program at the end of the quarter.
  • "Our fourth quarter results reflect the impact of rapidly-changing consumer behavior, which drove very strong digital growth but unexpected softness in our stores," said Brian Cornell, chairman and CEO of Target. "At our meeting with the financial community this morning, we will provide detail on the meaningful investments we're making in our business and financial model which will position Target for long-term, sustainable growth in this new era in retail. We will accelerate our investments in a smart network of physical and digital assets as well as our exclusive and differentiated assortment, including the launch of more than 12 new brands, representing more than $10 billion of our sales, over the next two years. In addition, we will invest in lower gross margins to ensure we are clearly and competitively priced every day. While the transition to this new model will present headwinds to our sales and profit performance in the short term, we are confident that these changes will best-position Target for continued success over the long term."

WSJ : ‘Inverted’ Model Said to Be Considered for NYSE’s Newest Exchange

‘Inverted’ Model Said to Be Considered for NYSE’s Newest Exchange
Such exchanges flip the standard fee model of U.S. equities trading

The New York Stock Exchange is considering a time-honored move to boost market share: copy an innovation from competitors.
NYSE has approached market participants about launching a so-called “inverted” exchange, a move that would borrow from the playbook of rivals Nasdaq Inc. and Bats Global Markets Inc., people familiar with the situation said.
Inverted or “taker-maker” exchanges flip the standard fee model of U.S. equities trading on its head.

Most U.S. exchanges collect a “taker” fee for each incoming trade that immediately executes against a standing buy or sell order posted on the exchange, removing it from the exchange’s order book. Meanwhile, the exchange pays a “maker” rebate to the firms that posted those orders in the first place. The idea of the model, called “maker-taker,” is to encourage firms to quote more competitive prices for the securities traded on the exchange.
In contrast, an inverted exchange pays rebates for incoming trades that execute against standing orders, while charging the firms that posted those orders -- the opposite of maker-taker.
For instance, if an investor decides to buy 100 shares of General Electric Co. at the lowest price being quoted in markets, his or her broker could route that order to NYSE’s flagship exchange, which has maker-taker pricing. NYSE would charge the broker about 30 cents. Meanwhile, the GE seller on the other side of the trade—oftentimes an electronic trading firm that continually posts buy and sell orders, a “market-maker”—would collect a rebate of around 22 cents from NYSE.
Alternatively, the broker could send the investor’s order to Bats’ BYX exchange, an inverted venue. There, BYX would pay the broker a rebate of 10 cents for the order, while charging the market-maker a fee of 18 cents.


Of the dozen U.S. exchanges currently in operation, Bats’s BYX and EDGA and Nasdaq’s BX are inverted. Together they had 9.2% of U.S. equities trading volume in January, according to data from brokerage Rosenblatt Securities Inc.
Adding an inverted venue could help 224-year-old NYSE capture some trades that are now flowing to younger players in the hypercompetitive U.S. stock-exchange landscape.
NYSE is said to be considering applying the taker-maker model to the former National Stock Exchange, or NSX, the most recent addition to its collection of four equities exchanges. NYSE’s three other stock exchanges use maker-taker pricing.

Intercontinental Exchange Inc., the parent company of NYSE, agreed to buy NSX in December. NYSE has renamed the exchange “NYSE National” and halted its operations in preparation for a reboot. It hasn't yet announced its plans for NYSE National.
“NYSE will engage with NSX members, buy-side participants and retail brokerage firms before finalizing operational plans for the exchange’s relaunch,” NYSE said in a Jan. 31 press release.
Inverted exchanges tend to be smaller than standard maker-taker exchanges, but they can be attractive to brokers who handle trades for institutional or retail investors. Such customers will often decide to buy or sell shares at the best price displayed in the markets rather than waiting for the price to improve. When investors submit such orders, brokers typically send them to inverted exchanges first, in hopes of capturing a rebate, before routing them to maker-taker exchanges that would charge the broker a fee, market experts say.
That has led some critics to complain that inverted exchanges skew brokers’ incentives so they don’t always send trades to the venue that offers the best result for the customer.
“You’ve got this hidden piping system in which brokers are able to take revenue out of orders that the customer doesn’t know about,” said Larry Harris, a finance professor at the University of Southern California’s Marshall School of Business.
Others say big exchange groups are simply offering customers a variety of pricing schemes, and that the emergence of a complex, fragmented marketplace with maker-taker and taker-maker exchanges is the result of regulation.
While the maker-taker model dates back to the late 1990s, its inverted cousin is a more recent development. Nasdaq introduced the first taker-maker pricing scheme on an equities exchange in 2009, and Bats followed suit in 2010.
The Big Board has shown a willingness to borrow ideas from competitors before. In January it said it would add a 350-microsecond “speed bump,” a feature that imposes a delay on orders, to another one of its smaller exchanges. The speed bump was pioneered by IEX Group Inc., the upstart exchange made famous by Michael Lewis’ 2014 book “Flash Boys.”

>>> Safran activist TCI responds to company's defence of proposed Zodiac acquisi


Safran activist TCI responds to company's defence of proposed Zodiac acquisition

Safran [EPA:SAF] activist TCI Fund Management has published five new documents to its website dedicated to arguing against the company's offer to acquire Zodiac Aerospace [EPA:ZC], which can be accessed here.
Two documents appear to be presentations of the activist's arguments, updated since Safran's most recent response.
A letter regarding Safran's corporate governance dated 27 February and signed by TCI's Sir Chris Hohn is available here.
A letter from Hohn on 27 February calling for the French market reguator AMF to regard Zodiac's family shareholders, the French government, FFP and Fonds Strategique de Participations as "concert parties" in relation to Safran, is available here.
A fifth document instructs Safran shareholders on how to qualify for double voting rights.

>>> LSE/Deutsche Boerse's regulatory problems may be due to French political pre

LSE/Deutsche Boerse's regulatory problems may be due to French political pressure - report

The European Commission’s (EC) late request for the London Stock Exchange Group [LON:LSE] to sell its majority holding in the Italian exchange business MTS as a condition of approval for the LSE’s proposed merger with Deutsche Boerse [ETR:DB1] may have been due to political pressure from France, The Times reported.
The newspaper cited a source close to the LSE who said “the French” may have wanted, in addition to the acquisition of LSE’s French clearing business LCH SA by Euronext, control over all European platforms and trading.
The LSE said on 26 February that the EC had requested the MTS disposal, a request that Deutsche Boerse and the LSE were not expecting, according to the report.
Deutsche Boerse and the LSE had agreed to sell LCH SA to Euronext [EPA:ENX] for EUR 510m (GBP 434m) as a concession to the EC, as previously reported.
The LSE has indicated that it cannot agree to sell its shareholding in MTS as it considers the measure to be disproportionate and might put its relationship with Italian regulators at risk, The Times report said.
There remains a slim chance of the proposed merger proceeding, although that is unlikely because the EC has already dismissed the LSE’s proposal of another remedy other than selling its MTS stake, the item said.
A report from this news service yesterday cited a person familiar with the situation who said the EC's statement of objections indicated that the regulator wanted to ensure that repo trading feeds provided by MTS would still go through LCH SA after the proposed merger.
The EC wanted MTS sold specifically to Euronext, a second person familiar added.
A Financial Times report mentioned talk that the US-based exchange operators CME Group [NASDAQ:CME] and InterContinental Exchange [NYSE:ICE] might make offers for either Deutsche Boerse or LSE, in light of the likelihood of their proposed merger being blocked by the EC.
A separate report in The Times, however, said suggestions of an offer from ICE for the LSE were considered unrealistic due to the UK government’s apparently protectionist stance.
The Daily Telegraph quoted one banker working on the deal who said he considered an offer from ICE or CME to be unlikely.