043 Exchange Invest Weekly

Transcript Cushing we have a problem. This was the week where a West Texas Intermediate settlement issue became the biggest burning factor in the parish without a single barrel going up in smoke, as we record somewhere out there in exchange traded derivatives land for at least half a billion dollars in unaccounted losses floating around the system. That's before we start thinking about China and the rest of the world and the Exchange Traded Products business. These were accrued as a result of the meltdown settlement when oil prices went negative, exacerbated by a problem some had been complaining about for 12 years on more.    My name is Patrick L. Young. Welcome to the bourse business weekly digest: it's the Exchange Invest Weekly Podcast.   Regardless of whether CME are hoping their Cushing crush amounts to a temporary storm in an oil drum or are just in plain denial, the market is moving away from the one time dominant monopolist. “Cushing we have a problem!” is now a key phrase for the parish. It's always sad that for all the great efforts of so many parishioners in ensuring uptime during the COVID crisis, it ends up being oversight failures that have helped plunge us into a mire of headlines.  Fortunately, the media mostly think it's just an oil price problem. They don't quite realize how much of a pricing due to contract oversight issue is looming, and just how many lawsuits are liable to be triggered to resolve, or not, a series of issues which ought never to have been allowed to happen in a holistic managed environment. I'm only going to skim across the surface of the issues here in this podcast. The full story has been in Exchange Invest Daily for the past week. It was worth a subscription for the past seven issues alone, including our unique Sunday special.    So CME beat their estimates but ultimately the sludgy oil settlement conundrum dragged them down. From the start of this crisis CME messaging has been poor. When they sent Terry Duffy out to CNBC, the TV auto cuties of the retail financial news channel didn't really appreciate the scale of the problem, but Chairman and CEO Duffy opened up by noting on 22nd of April.    “The small retail investors are somebody that we do not target. We go for professional participants in our marketplace.”   Yet a week later on his Q1 analyst call the self same Supreme Commander of the CME stated    “Our retail business was up more than 70% growth with considerable strength in the US, Europe and Asia. “   Does somebody sense at least an E micro if not an E mini of contradiction between these statements?    Elsewhere Duffy added   “The headlines were not good on day one. I think that was a lot because a lot of people didn't understand exactly what happened. That narrative has changed dramatically. I'm sure you've seen. So I think that the narrative and the headline associated with what went on in negative pricing is completely different than it was a week ago, Monday. So I just to make sure that we're clear on that.”   Ladies and gentlemen, the problem with this assertion: do I really need to even finish that sentence?    Then we get on to what was a remarkable series of assertions in their own right about WTI and also a key competitor benchmark Brent crude. CME appears to have sought to smear competitors with not having deliverable products while persistently suggesting their...