The pick of last weeks stories from Sol Steinberg

O’Malia to head ISDA
Outgoing commissioner of the Commodities Futures Trading Commission Scott O’Malia will assume the role of CEO of the International Swaps and Derivatives Association on August 18. O’Malia, who is the longest-serving CFTC commissioner from the current panel, plans to leave the CFTC on August 8. ISDA chairman Stephen O’Connor cited O’Malia’s role in calling for international cooperation in derivatives rule-making as one example of the leadership he brings to his new role. O’Malia will succeed Robert Pickel, who headed the association for 17 years. 

http://www2.isda.org/news/scott-omalia-appointed-chief-executive-officer-of-international-swaps-and-derivatives-association

Argentina closer to debt default as stalemate lingers
Argentina is closer to a technical default as a bond dispute between the country and investors remains at an impasse. Argentina has until July 30 to either reach an agreement with creditors who participated in two prior restructurings, or to default. NML Capital, one of the lead creditors involved in the dispute, has accused Argentina of “a total lack of willingness” to solve the problem. Argentina has suggested it needs to find a solution that would avoid triggering a so-called RUFO clause, which could lead to lawsuits if the holdouts get better terms than investors in 2005 and 2010 received. The country is also asking for a stay, to reach a “fair, equitable, legal and sustainable” solution. US District Court Judge Thomas Greisa made efforts to keep both sides together last week, but neither Greisa nor the creditors have agreed to a stay, and so far the dispute remains unresolved. 
http://in.reuters.com/article/2014/07/25/argentina-debt-default-idINL6N0Q051420140725

Lagging wages give Fed leeway to keep rates low
Many of the U.S. economic indicators are pointing up, but Fed Chair Janet Yellen has indicated that she sees stubbornly slow wage growth as a sign that the economy is not as healthy as it otherwise appears. Some economists have warned that the U.S. central bank risks falling behind the inflation curve, but data released Tuesday shows that the Fed’s inflation gauge is still below target. In congressional testimony last week, Yellen said the Fed was “closely watching” wage growth. The Fed has its policy meeting on July 29 and 30 and it is expected to keep rates low for some time.  
http://www.reuters.com/article/2014/07/24/us-usa-fed-idUSKBN0FT0BY20140724

European hedge fund segregation issue remains unsettled

The European Securities and Markets Authority (ESMA) is still working out how strictly to enforce the segregation of hedge fund clients' assets held at prime brokers, as mandated by the Alternative Investment Fund Managers Directive (AIFMD). Prime brokers say that if they can’t hold alternative investment fund and non-alternative investment fund assets in a pooled account, it will be more expensive to provide financing to clients. Proponents of the rule note that in the past, in situations where prime brokers have experienced business problems, it has been harder for investors to retrieve funds that had been comingled. A resolution could come at ESMA’s next board meeting on September 25. 
http://www.risk.net/hedge-funds-review/news/2357001/esma-board-fails-to-agree-aifmd-prime-broker-segregation-position

Volcker rule less restrictive of commodities derivatives trading that previously thought
Banks are finding that the Volcker rule, which curtains proprietary trading is not as disruptive to commodities trading as expected. Firms had been worried that the wording of the rule would have prevented them from making markets in commodity derivatives. Many firms are finding that an exemption for market making, coupled with less strict wording in the final version of the bill, succeeded in limiting proprietary trading while still allowing firms to make markets in commodity derivatives. 
http://www.risk.net/energy-risk/news/2356927/commodity-desks-breathe-sigh-of-relief-over-volcker
 
Banks band together to develop less-costly chat service
Goldman Sachs is reportedly leading a multi-firm effort to develop an alternative to Bloomberg’s chat service that will be less costly for financial firms. The tool is code named “Babble” and is intended to be less expensive than Bloomberg and designed to work on a wider array of different systems. Bloomberg charges $20,000 a year per terminal, and firms are trying to cut costs due to regulatory expenses and changing market conditions. Bloomberg reportedly has more than 320,000 subscribers who use its Instant Bloomberg chat service. 
http://www.ft.com/cms/s/2/5c5734aa-11ad-11e4-b356-00144feabdc0.html#axzz38gG0ytEg

Why this is the most-hated bull market ever
Several articles in recent weeks and months have given the current market the “most-hated-bull-market” label. Among the reasons cited for that title are that the income of the top 1 percent is so high that earners in the top 1 percent can’t possibly spend a proportionate amount of their income to stimulate the economy. In addition, the current economy can’t support an expansion of GDP without economic stimulus, and we are currently reducing economic stimulus. There are also signs that there are more short coverings in the market as short investors are attempting to predict the top of the market. Short covering can add to the price of stocks – until the market does top off and take a turn in the downward direction.
http://seekingalpha.com/article/2339085-why-this-is-the-most-hated-bull-market-of-all-time-understanding-the-folly-of-financial-engineering