080 Exchange Invest Weekly Podcast February 6th, 2021

TRANSCRIPT This week in the parish of forces and market structure. GameStop GameStop, GameStop. London Stock Exchange, optimism on equivalence and more, as NASDAQ thank the cloud for reliability while selling eSpeed to Tradeweb. Robinhood raise billions and seek a settlement revolution…. Or what we've been proposing for the past 25 years. Meanwhile, China launches peanut futures! My name is Patrick L. Young. Welcome to the bourse business, weekly digest. It's the Exchange Invest Weekly Podcast, episode 80.  Further to my comments last week, what most perplexes me about the Gamestop story of last week was not how It raised controversy, but the sheer lack of insight into financial markets by so many people, I mean, things got so bad, the legacy media was actually doing a decent job in some quarters. The stories were often flawed. The messages amounted to nonsense, and the questions raised usually appeared elementary with appalling, flawed conclusions. In that respect, it was difficult to tell the scheduled news, the legacy media, the politicians, and indeed the late night comedians apart in terms of their overall conclusions.  Bipartisanship with Senator Ted Cruz and Congressman Alexandra Ocasio, Cortez, agreeing on an issue leads me to immediately presume that anything that rather wacky pair believe has to be plainly wrong. Meanwhile, Maxine Waters demonstrated almost total financial illiteracy by attacking hedge funds when it seems some hedges were donating umpteen billions into the hands of retail investors. Or was it all smoke and mirrors in terms of a hedge fund on hedge fund proxy war with a kind of retail frontend on the GUI? Nevertheless, Melvin Capital alone lost half their capital, but funnily enough, amongst others, Citadel rode to its rescue... At the same time, given Representative Waters is chair of the Financial Services Committee of Congress, that fills me with a certain grim foreboding. It's an ugly situation. The conclusions have already been drawn by the usual crowd of comedians, politicians, and journalists. Yet nobody is really asking coherent questions. Although we might yet see an end to “payment for order flow.” Perhaps for the wrong reasons. And Robinhood is now likely to be company of the year at the annual Bar Council Awards for attracting such an influx of funding into class actions suits across the brokerage community. Short-selling may take a pasting which is shortsighted, but then again, some of the sellers appear to have been somewhat egregious in their actions. But all in all it is a sort of perfect storm for incoming SEC chairman Gary Gensler. Can he value better markets over scoring political points? I have long being committed to the free Robinhood, gaining stock execution by selling orders to Citadel, Virtu et all being on the high end of the “This will end in tears” priority list. Now we have Gary Gensler coming in at the SEC on the whole Gamestop farago to boot, which is going to be a lot more difficult to unpick. However, I think those $10 bounties for skewing retail orders off exchange in vast bulk and giving a payment for order flow is going to be very, very dead indeed, Very, very soon, indeed. And that's even before we get to considering the politics here. Committed hard-line Democrat Gensler would be removing a U S specific product line, which is provided by Vertu QV it's supremo Vinnie, Viola, who was almost Secretary Of The Army under president Trump, until he withdrew from consideration. And Citadel, run...