A Crypto Magnate Saw the Risks and Still Was Hammered

Jan 18, 2023

First Read

Hits & Takes
John Lothian & JLN Staff

Sometimes small acts of kindness can have immense impacts. Thomas F. Cashman, a friend and a member of the JLN advisory committee who is the son of my mentor, Thomas J. Cashman, made a donation in my mother’s memory to the Kishwauketoe Nature Conservatory.

Tom also made donations in the names of seven other people, for whom he purchased oak trees to be planted in the conservatory, memorializing loved ones lost during the last year. Among those listed, at the top of the list, was his own mother, Jacqueline Todd Cashman.

Kishwauketoe is just north of the shore of Williams Bay and was the site of a lawsuit in the 1970s that saw Tom’s father and my uncle be sued after they ran for village board on a platform to kill a deal to build a resort with a harbor similar to the Abbey in Fontana. That experience serving together on the village board and defeating that development, and being neighbors, created a bond between the Lothians and the Cashmans that persists to this day.

A few years later the Cashmans would move to the other side of Williams Bay, close to where my family has a home. Tom’s dad would coach my brother in Little League Baseball and after I was hired by Tom’s father to be his driver, I would coach Tom in Little League Baseball in Williams Bay.

As I reflect on this thoughtful gift from Tom, I am brought back to that fight over that resort development and how it forged a relationship between the Cashmans and Lothians that ultimately gave direction to my career and life. And I am in awe of the work Tom’s father and others have done to establish and maintain this beautiful nature conservatory in Williams Bay. And now both our mothers, and other loved ones of Tom’s, will be memorialized with strong oak trees. It is a beautiful thing. Thank you, Tom.

Broadway Technology’s Dan Romanelli has been elected president of the Security Traders Association of Chicago.

Chapman and Cutler LLP announced that Juan M. Arciniegas has joined the firm as a partner in its corporate and securities department and investment management group.

Here is a bad sign for the economy; Party City has filed for Chapter 11 bankruptcy after its balloon finally popped and all that was left was hot air. Party City has secured $150 million in debtor financing to keep running the company, so maybe they can re-inflate this party balloon.

The FIA yesterday issued a statement mourning the passing of industry icon Nick Carew Hunt. Here is a statement from Walt Lukken

“Nick was at the center of some of the biggest evolutions our markets saw across the last four decades. But more importantly, he was a valuable friend and mentor to many across this industry. His deep knowledge as well as his good humour will be missed.” – FIA President and CEO Walt Lukken.

I will be at the STAC Mid-Winter Annual Meeting on Tuesday, January 24, but will be leaving on the 25th to head to West Virginia to see my daughter Kat for her 25th birthday and to take her some furniture for her new apartment.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

*****

The agenda at the World Economic Forum is crowded with sessions addressing climate change and related transitions in food, energy, health and nature. You can watch open sessions of the WEF with a free public membership at My Forum. Register here. In a session yesterday, WEF and Bain & Company released “The Voluntary Carbon Market: Climate Finance at an Inflection Point,” a briefing on the critical challenges that are delaying the voluntary carbon market from achieving scale. You can access the paper here.~SAED

The GlobexChange Destination Net-Zero event is February 27 through March 1 at the Sheraton Centre Toronto Hotel in Toronto, Ontario. The focus will be exploring the key themes and actions needed, and the types of organizations that can make a difference, on the Path to Net Zero. Sustainability business leaders will discuss the 10 priority action areas for the next 10 years to achieve net zero by 2050. You can explore the program and register here. ~SAED

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BMLL appoints Jenny Chen as Head of Sales, Americas; Delivers on its strategic focus to grow US presence due to increased demand for Level 3 Data and analytics
BMLL via Mondovisione
BMLL, the leading, independent provider of harmonized, historical Level 3 data and analytics, today announced the appointment of former Société Générale, Goldman Sachs and UBS executive Jenny Chen as Head of Sales, Americas. The appointment follows the most recent news announcing Rob Laible as Head of Americas (January 2023) and delivers on BMLL’s strategic growth plans for geographic expansion, to meet the increasing client demand for Level 3 data and analytics in the US and globally.
/jlne.ws/3ktBElm

***** Another interesting data point for BMLL.~JJL

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Industry mourns the passing of derivatives legend Nick Carew Hunt; A longstanding pillar of London’s futures community, Carew Hunt passed away on 15 January after a short illness.
Laurie McAughtry – The Trade
Longstanding market secretary of the former London International Financial Futures and Options Exchange (LIFFE) and icon of London’s derivatives industry, Nick Carew Hunt, passed away this week at the age of 71 after a short illness.
/jlne.ws/3XlzyT4

***** The passing of industry icons like Nick Carew Hunt is exactly why we have dedicated all of our efforts to capturing industry history on video by interviewing people like him. I wish we had interviewed him.~JJL

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Tuesday’s Top Three
Our top story Tuesday was the news from Eventus, Eventus closes out record year, with significant plans for enhancing Validus platform in 2023. Second was a tie between The New Case for Social Climbing from The Atlantic, and A millennial founder who sold her company to JP Morgan for $175 million allegedly paid a college professor $18K to fabricate 4 million accounts. Their email exchange is a doozy, from Fortune. And third was Scaramucci Recalls ‘Betrayal’ by SBF: ‘I Considered Him a Friend’, from Decrypt.

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MarketsWiki Stats
27,133 pages; 242,330 edits
MarketsWiki Statistics

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Lead Stories

A Crypto Magnate Saw the Risks and Still Was Hammered; CEO Barry Silbert of Digital Currency Group, a finance veteran who built a crypto conglomerate, now is fighting to keep its brokerage firm out of bankruptcy
Gregory Zuckerman, Vicky Ge Huang and Caitlin Ostroff – The Wall Street Journal
The cryptocurrency crunch is so bad even the pros are getting squeezed. A year ago, Barry Silbert’s 40% stake in Digital Currency Group Inc., or DCG, was valued at more than $3 billion. A crypto conglomerate, with tentacles in nearly every corner of the industry from lending to bitcoin mining, DCG worked out of plush Connecticut offices featuring a marble-countertop kitchen with a coffee barista and a French chef. Mr. Silbert is a 46-year-old finance veteran who began his career working on restructurings and dealing with downturns. Unlike many crypto executives, he tweeted warnings about the risky behavior he saw in digital assets, suggesting he anticipated what could go wrong.
/jlne.ws/3WjDceO

The New Bankers to the World Aren’t on Wall Street; Middle East sovereign funds spent almost $89 billion globally last year, with deal makers using their wealth to diversify their economies and win geopolitical influence
Dinesh Nair, Matthew Martin, Nicolas Parasie and Archana Narayanan – Bloomberg
When Credit Suisse Group AG, Sam Bankman-Fried and Asia’s richest men were hunting for funds in recent months, they all turned to the same place – the Middle East.
/jlne.ws/3XlVSvB

Little-Known Surveillance Program Captures Money Transfers Between U.S. and More Than 20 Countries; Law-enforcement agencies across the U.S. have direct access to over 150 million transactions housed at an Arizona nonprofit
Dustin Volz and Byron Tau – The Wall Street Journal
Hundreds of federal, state and local U.S. law-enforcement agencies have access without court oversight to a database of more than 150 million money transfers between people in the U.S. and in more than 20 countries, according to internal program documents and an investigation by Sen. Ron Wyden.
/jlne.ws/3kj3qAF

Germany Learned Its Lesson From Russia Gas Dependence, Chancellor Scholz Says; Chancellor sees need to diversify the energy supply chain; Securing LNG supplies will remain a challenge for the country
Michael Nienaber and Petra Sorge – Bloomberg
Germany learned a lesson from the war in Ukraine that it shouldn’t depend on just one country for its energy supplies, Chancellor Olaf Scholz said in an interview. Energy has dominated the start of Scholz’s tenure after Russian President Vladimir Putin’s invasion of Ukraine exposed the fragility of Germany’s security. With Russia supplying 55% of the nation’s gas before the war, Scholz’s administration was forced into urgent action to head off concerns about shortages this winter.
/jlne.ws/3Wlpkk0

EU must update Mifid II in order to remain competitive, urge industry associations; Trade associations including EFAMA, BVI, EFSA and NSA have issued an open letter outlining their priorities for the Mifir/Mifid II review: warning against rising market data costs and recommending a suspension of the volume cap in Europe, along with the removal of some pre-trade transparency requirements.
Laurie McAughtry – The Trade
A collection of Europe’s most influential trade associations have issued an open letter outlining their thoughts on the ongoing Mifir review, warning that in its current form the regulation could result in a loss of competitiveness for Europe against third parties including the UK.
/jlne.ws/3Hfz5fE

Libor phase out leads to record SOFR derivatives volumes; Derivatives exchange CME Group achieved a record of 7.6 million SOFR-based contracts traded, with record open interest of 35.7 million contracts.
Wesley Bray – The Trade
Interest rate benchmark Libor has historically been used in financial markets to determinine interest rates for financial contracts globally. However, since the global financial crisis in 2008/9, activity in the markets that Libor measures reduced, leading the benchmark to become unsustainable.
/jlne.ws/3ZMleV0

Crypto exchange Coinbase says it will halt Japan operations
Reuters
Cryptocurrency exchange Coinbase Global Inc on Wednesday said it will halt operations in Japan due to volatile market conditions. All Coinbase Japan customers will have until Feb. 16 to withdraw their fiat and crypto holdings, the company said in a blog post.
/jlne.ws/3Hf4vma

How ‘Extraordinary Measures’ Can Postpone a Debt Limit Disaster; Treasury Secretary Janet L. Yellen will soon need to use accounting maneuvers to keep the United States from defaulting on its debt.
Alan Rappeport – The New York Times
The United States is expected to hit a cap on how much money it can borrow this week, a development that will result in the Treasury Department employing what are known as “extraordinary measures” to ensure that the federal government has enough money to pay its bills.
/jlne.ws/3CVtY1v

715 Million in Investment Threatened by ConsenSys Shareholder Win – Arthur Falls
Arthur Falls – PR Newswire
On the 5th of January 2023, the Supreme Court of the Canton of Zug ruled in favour of a shareholder request to audit the founding transaction of ConsenSys Software Incorporated (CSI). The transaction, code named “Project North Star” transferred major products and business units (Metamask, Infura, and others) from the Swiss-based ConsenSys AG to the US-based CSI. On the basis of its ownership of these assets, CSI raised $715 Million between 2020 and 2022.
/jlne.ws/3HcEUu4

Bank of Japan Governor Digs In for Standoff With Markets; Central bank dashes expectations of further lifting of interest-rate target
Megumi Fujikawa – The Wall Street Journal
The Bank of Japan’s governor expressed confidence that he could prevail in a standoff with markets over his cap on government bond yields, but some analysts remained skeptical. The bank on Wednesday dashed market expectations for another policy change and maintained its cap for the yield on 10-year Japanese government bonds at 0.5% after it raised the ceiling on Dec. 20 from 0.25%.
/jlne.ws/3CYN0E2

In Davos, Leaders Fret Over Fragmenting Global Economy; Officials warn of threat to business and the challenges of regulatory compliance as global powers diverge on trade, industrial policy
Greg Ip – The Wall Street Journal
Geopolitical rivalry, technology decoupling and protectionism have increasingly altered the world’s business and political landscape, adding new risks and threats and, for some, opportunity, say executives and officials meeting this week at the World Economic Forum. “We are very concerned about geoeconomic fragmentation,” said Gita Gopinath, the number two official at the International Monetary Fund, in an interview. In conversations with member countries and in Davos, “this is something that comes up a lot.”
/jlne.ws/3iKL3nR

Semafor explores options to buy out Sam Bankman-Fried’s interest; Disgraced FTX founder was media start-up’s biggest outside backer
Alex Barker and Anna Nicolaou – Financial Times
Media start-up Semafor is exploring ways to buy out its biggest outside backer Sam Bankman-Fried, the disgraced founder of the FTX cryptocurrency exchange, in a plan that would hold the money in custody. Before the collapse of FTX last year, Bankman-Fried contributed more than a third of the $25mn in initial funding for the news venture launched by Justin Smith, the former Bloomberg Media chief executive, and Ben Smith, the ex-New York Times columnist.
/jlne.ws/3CYk1Aq

3 events that will determine the fate of cryptocurrencies
David Gura – NPR
It was touted as the future of finance. Today, the world of cryptocurrencies is in disarray. The fallout from the catastrophic collapse of crypto exchange FTX is spreading, and a so-called “crypto winter,” which has dragged on for months, shows no signs of letting up. The value of bitcoin is down almost 70% from its all-time high hit on November 2021. It’s a big change from a year ago. Back then, crypto companies were shelling out tens of millions of dollars to market their trading platforms during the Super Bowl broadcast, with celebrity endorsers like Tom Brady, promising they would democratize finance.
/jlne.ws/3WkY3yp

Russia and Iran are working on a gold-backed cryptocurrency to take on the dominant dollar, report says
Zahra Tayeb – Business Insider
Russia and Iran are reportedly working together to launch a cryptocurrency backed by gold, with the idea the “stablecoin” could replace the US dollar for payments in international trade. The two sanction-hit countries want to issue a “token of the Persian region” for use in cross-border transactions, Russian news agency Vedmosti reported Monday. The plan is to launch it in a special economic enclave in Astrakhan in southern Russia, which already handles Iranian shipments.
/jlne.ws/3iP7acX

Nord Stream 2 investor to exit Russia; Wintershall Dea criticised over exploration and production of gas and oil after Kremlin’s invasion of Ukraine
Patricia Nilsson – Financial Times
Wintershall Dea, one of the main European investors in the Nord Stream 2 gas pipeline, has said it will exit Russia following criticism over its continued exploration and production of gas and oil in the country following the invasion of Ukraine.
/jlne.ws/3Wiwupu

Ukraine Invasion

Ukraine closer to receiving modern Western battle tanks, more Patriots
Tom Balmforth – Reuters
Ukraine is a step closer to winning approval for German-made modern battle tanks to confront invading Russian forces and has secured a pledge of more Patriot defence missiles as its allies appear ready to rally for the next phase of the war. Germany’s Leopard 2 tank, operated by armies in about 20 countries, is regarded as one of the West’s best. The tank weighs more than 60 tons, has a 120mm smoothbore gun and can hit targets at a distance of up to five km.
/jlne.ws/3CWR8oc

Video Shows Drone Dive Bomb Entrenched Russian Soldiers: Ukraine
Anna Skinner – Newsweek
Russian soldiers were recently subjected to drone attacks in Bakhmut as the Ukrainian city remains on the front lines of the war. Last week, the Wagner Group-a private Russian paramilitary company-claimed “liberation” of Soledar, a salt-mining city 9 miles north of Bakhmut. Fighting continues in the area, and the Institute for the Study of War (ISW) published a report that said Russian forces began advancing toward Bakhmut after capturing Soledar. Ukraine continues to deny that Russia has completely captured Soledar, Newsweek previously reported. Ukraine continues to fight back, and the General Staff of the Armed Forces of Ukraine shared a Facebook post Tuesday morning accompanied by a video showing a recent drone attack against Russian forces.
/jlne.ws/3H9gQr1

Ukraine’s Interior Minister, at Least 17 Others Killed in Kyiv Helicopter Crash; Cause of the crash, which took place in heavy fog, couldn’t immediately be determined
Ian Lovett and Jared Malsin – The Wall Street Journal
Ukraine’s interior minister and other senior officials were among at least 18 people killed when a helicopter crashed near a kindergarten on the edge of Kyiv on Wednesday morning, Ukrainian officials said. The minister, Denys Monastyrsky, a first deputy minister, and another senior official were killed in the crash, Ukrainian police said. Nine of those killed had been on board the aircraft when it crashed in Brovary, on the outskirts of Kyiv, Ukraine’s national police chief said on his official Telegram channel.
/jlne.ws/3IWV3oN

Putin could be ready to announce a second mobilization drive
Holly Ellyat – CNBC
Russian President Vladimir Putin could be ready to announce another mobilization round, as Russia looks to bolster its armed forces in Ukraine, analysts believe. “Putin may announce a second mobilization wave to expand his army in the coming days- possibly as early as January 18,” analysts at the Institute for the Study of War said Tuesday.
/jlne.ws/3Xx2WFK

Exchanges, OTC and Clearing

Regulatory Scrutiny Drives Growth in Third-Party Certification of Green, Social and Sustainability Bonds in 2022, According to Report from ICE
ICE
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today released the company’s annual full-year Impact Bond Report, which shows impact bond issuance fell 13% in 2022 to US$771 billion after reaching an all-time high in 2021. When compared to a 61% decline in overall bond issuance in 2022, the smaller decrease in issuance of sustainability bonds over the same period signals a relatively buoyant continuation in impact bond issuance, especially in green bonds with only a 1% year on year decline.
/jlne.ws/3kj5M2t

Kiatnakin Phatra Securities Advances Surveillance & Market Integrity Efforts in Thailand with Nasdaq Trade Surveillance
Nasdaq
Nasdaq (Nasdaq: NDAQ) and Kiatnakin Phatra Securities (KKPS), a leading securities company in Thailand, announced today that KKPS will leverage Nasdaq Trade Surveillance technology to advance its surveillance and market integrity efforts. The first local broker in Thailand to leverage Nasdaq Trade Surveillance, KKPS will benefit from rich functionality to effectively monitor for market abuse. “Kiatnakin Phatra Securities is pleased to be partnering with Nasdaq’s Trade Surveillance system. Given Nasdaq’s leading position as a provider of market surveillance systems, the Nasdaq Trade Surveillance technology will allow KKPS to enhance its market surveillance capabilities and keep pace with global surveillance standards,” commented Mr. Aphichart Chongsanguanpradab, Managing Director, Head of Legal and Compliance at KKPS. He further emphasized “Our partnering with Nasdaq introduces new technologies, approaches, and solutions for our global client base.”
/jlne.ws/3iTyKFP

Circular on Releasing the Revised Futures Contract Specifications and Related Implementing Rules
Shanghai Futures Exchange
The Board of Directors of the Shanghai Futures Exchange (SHFE) has approved the 15 revised futures contract specifications such as the SHFE Copper Cathode Futures Contract Specifications and 6 implementing rules such as the Delivery Rules of the Shanghai Futures Exchange and the Standard Warrant Management Rules of the Shanghai Futures Exchange. All these revisions have been reported to the China Securities Regulatory Commission and will be implemented as of April 2, 2023 (Among them, the revised provisions on the delivery date of the contract will start from the 2304 contracts of the 15 products except Gold ).
/jlne.ws/3Xx5m7i

Special Changes in KOSPI 200, KRX 300, etc.
KRX Market
KRX will change the constituents of KOSPI 200, KRX 300, KRX 100, etc since the stock exchange between Meritz Financial(138040) & Meritz Insurance(000060)
/jlne.ws/3QVabVO

Replacement in Nifty SME Emerge index
NSE
The Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make the following exclusion from Nifty SME Emerge index on account of proposed migration of the company from NSE’s SME Emerge platform to NSE’s Capital Market segment (Main Board). The change shall become effective from January 25, 2023 (close of January 24, 2023).
/jlne.ws/3Wlslkk

Fintech

Without Consciousness, AIs Will Be Sociopaths; ChatGPT can carry on a conversation, but the most important goal for artificial intelligence is making it understand what it means to have a mind
Michael S.A. Graziano – The Wall Street Journal
ChatGPT, the latest technological sensation, is an artificial intelligence chatbot with an amazing ability to carry on a conversation. It relies on a massive network of artificial neurons that loosely mimics the human brain, and it has been trained by analyzing the information resources of the internet. ChatGPT has processed more text than any human is likely to have read in a lifetime, allowing it to respond to questions fluently and even to imitate specific individuals, answering queries the way it thinks they would. My teenage son recently used ChatGPT to argue about politics with an imitation Karl Marx.
/jlne.ws/3kovfHU

Microsoft to Lay Off 10,000 Workers as It Looks to Trim Costs; The job cuts, which amount to less than 5 percent of the company’s work force, are its largest in roughly eight years.
Karen Weise – The New York Times
Microsoft plans to lay off 10,000 workers, the company said Wednesday, as it looks to trim costs amid economic uncertainty and to refocus on strategic priorities, such as artificial intelligence. The company employed about 221,000 workers as of the end of June, and the cuts amount to less than 5 percent of its global work force.
/jlne.ws/3IXUeMv

Tier 1 buy-side equity traders are realising the importance of algos for dark liquidity access, finds new report; Coalition Greenwich finds that algorithms’ access to dark liquidity saw the largest increase in demand from Tier 1 European equity traders from 2021 to 2022.
Annabel Smith – The Trade
Around 60% of European buy-side equity traders at Tier 1 institutions listed access to dark pool liquidity as a key selection criteria for algorithmic trading, a Coalition Greenwich report has found.
/jlne.ws/3CVVnR1

Former Societe Generale, Goldman Sachs and UBS executive appointed as BMLL’s head of sales for the Americas; New head brings more than 20 years’ experience working in the global financial industry to BMLL, joining from big xyt where she served as head of sales, Americas.
Wesley Bray – The Trade
Historical Level 3 data and analytics provider BMLL has appointed Jenny Chen as head of sales, Americas. She joins BMLL from big xyt, where she served in the same role. Prior to that, Chen spent eight years at Société Générale in a variety of senior positions including managing director, head of global execution services, Americas, where she was responsible for all agency execution teams, sales, trading coverage, and algos.
/jlne.ws/3CVW90n

Cybersecurity

Warner: Cybersecurity shouldn’t be an ‘afterthought’
Ben Leonard, Carmen Paun, Ruth Reader and Erin Schumaker – Politico
Sen. Mark Warner (D-Va.) says he hopes to introduce legislation this quarter to bolster health care organizations’ defenses and possibly require them to meet minimum standards. Health care cybersecurity is a pressing issue. Nearly 50 million patients’ data was breached in 2021 alone, according to HHS.
/jlne.ws/3ITOJOX

The cybersecurity talent shortage: The outlook for 2023
Sue Poremba – Cybersecurity Dive
The global cybersecurity workforce grew to encompass 4.7 million people, reaching its highest-ever levels, according to (ISC)2 2022 workforce study. That’s the encouraging news.
However, the same study found that there is still a need for more than 3.4 million security professionals, an increase of over 26% from 2021’s numbers. This reverses a trend seen in (ISC)2’s 2021 study, where the number of open cybersecurity jobs actually dropped over a two-year period.
/jlne.ws/3D0eBVt

Cybersecurity Trends To Look Out For In 2023
Tom Okman – Forbes
Cybersecurity is in a constant state of evolution. As the distinction between our digital and “real” lives become increasingly blurry with each new technological feat, the surface area for malicious cyber activities grows. On the one hand, this is what makes cybersecurity such an exciting field to work in because it is always about the journey rather than the destination, and each day brings new challenges. On the other hand, the ever-changing nature of cybersecurity, combined with the high risk that comes with being poorly protected, inflicts the cybersecurity landscape with high-stakes uncertainty.
/jlne.ws/3WePxRz

A royal mess in the U.K. points to the risks of cyberattacks on mail delivery
Tim Starks with research by Aaron Schaffer – The Washington Post
A cyberattack on the United Kingdom’s largest mail delivery service that has snarled international parcel exports for a week is illustrating the cyber risks for mail services. The incident was first confirmed as a cyberattack on Tuesday by Royal Mail CEO Simon Thompson. There are no signs of when the disruption will end, and U.K. businesses say it is hitting them in their pocketbooks.
/jlne.ws/3GS33EL

TurboTax, QuickBooks owner slammed after MailChimp data breach
Lydia Moynihan – NY Post
A little-reported data breach at a marketing email service owned by Intuit is raising concerns about security protocols at its better-known properties such as TurboTax, QuickBooks and Credit Karma, The Post has learned. Intuit, a sprawling, publicly traded business-software empire with a market capitalization of $110 billion, admitted last week that 133 accounts using its MailChimp site were hacked. The company did not say who was responsible.
/jlne.ws/3WlUkka

Cryptocurrencies

FTX Discloses ‘Substantial Shortfall’ of Customer Assets; Newly disclosed balances contrast with statements by Sam Bankman-Fried that U.S. customers can be made whole; about half of the crypto assets stored in FTX’s U.S. exchange were stolen during a hack, documents show
Alexander Saeedy – The Wall Street Journal
FTX said Tuesday that a probe of its balance sheet showed holdings of customer funds were lower than the exchange’s internal accounts had indicated, acknowledging for the first time there was a shortfall of funds at the U.S. exchange.
/jlne.ws/3IX609P

FTX reports $415 million in hacked crypto, Bankman-Fried says FTX US is solvent
Dietrich Knauth – Reuters
Bankrupt crypto exchange FTX said in a report to creditors on Tuesday that about $415 million in cryptocurrency had been stolen in hacks. FTX has said it had recovered over $5 billion in crypto, cash and liquid securities, but that significant shortfalls remained at both its international and U.S. crypto exchanges. FTX attributed some of the shortfall to hacks, saying that $323 million in crypto had been hacked from FTX’s international exchange and $90 million had been hacked from its U.S. exchange since it filed for bankruptcy on Nov. 11.
/jlne.ws/3ZLC5Hw

$90 Million in FTX US Assets Were Moved via ‘Unauthorized Transfers’ After Bankruptcy
Stacy Elliott – Decrypt
Half of the $181 million worth of assets identified by FTX US, the U.S.-based arm of Sam Bankman-Fried’s bankrupt crypto empire, was “subject to unauthorized third-party transfers” following its bankruptcy filing, according to a presentation made to the FTX creditor committee today. It’s taken a “Herculean investigative effort for our team to uncover this preliminary information,” newly appointed FTX CEO John Ray said in a statement about the meeting.
/jlne.ws/3XwlGFm

$1.4 trillion wipeout hits crypto industry at Davos – except for a lone flashy orange bitcoin car
Arjun Kharpal – CNBC
Over the past few years at the World Economic Forum in Davos, Switzerland, the number of cryptocurrency industry attendees has boomed. But after a near $1.4 trillion wipeout in 2022, the crypto industry is being a bit more reserved with how it splashes the cash and several companies spotted last year are not in attendance. 2022 was marked by failed crypto projects, liquidity issues and bankruptcies, topped off by the collapse of major exchange FTX.
/jlne.ws/3QLWfgK

US bank Silvergate sinks to $1bn loss as crypto crisis takes a toll; Lender braced for ‘sustained period of lower deposits’ even as its faith in digital asset industry remains intact
Nikou Asgari – Financial Times
Crypto-focused US bank Silvergate swung to a $1bn loss in the last three months of 2022, underscoring how the lender has been rocked by the collapse of crypto prices and implosion of exchange FTX. The California-based bank reported a $1.05bn net loss for the fourth quarter, compared with a profit of $18.4mn in the same period a year earlier, and said it would slash its product offering and remove non-core customers in an attempt to cut costs.
/jlne.ws/3wbToEh

Bankman-Fried says claims made by FTX lawyers ‘misleading’
Juby Babu – Reuters
FTX founder Sam Bankman-Fried in a blog post refuted some claims made by the company’s lawyers on Tuesday, saying that they were “extremely misleading” and that FTX U.S. was and is solvent.
/jlne.ws/3GRYtGE

Coinbase asks Japan customers to withdraw holdings as it halts operations
Pradipta Mukherjee – Forkast
Coinbase Global Inc., the world’s second largest cryptocurrency exchange by trade volume, has asked customers in Japan to withdraw crypto and fiat holdings by Feb. 16, as it halts operations “to conduct a complete review” of its business in the country.
/jlne.ws/3XjL0i5

Coinbase Confirms it is Halting Operations in Japan
Jamie Crawley – CoinDesk
Cryptocurrency exchange Coinbase (COIN) said it is halting its operations in Japan, citing “market conditions” as the reason. Customers have until Feb. 16 to withdraw their fiat and crypto holdings from the exchange, Coinbase announced on Wednesday. Fiat deposits will be halted on Jan. 20.
/jlne.ws/3XHBrcz

DeFi-Focused Startup Blue Comes Out of Stealth With $3.2M Raise
Elizabeth Napolitano – CoinDesk
Blue, which offers know-your-customer (KYC) and anti-money laundering (AML) identity verification solutions for traders on DeFi protocols, has come out of stealth with $3.2 million in funding. The funds were raised in a seed round co-led by Blockchange Ventures and Fenbushi Capital, with participation from DoraHacks, Knollwood Investment Advisory, Gate.io, and Wave Financial, according to an announcement on Tuesday.
/jlne.ws/3XBcBec

Can Barry Silbert Delay the Inevitable?
Daniel Kuhn – CoinDesk
Bitcoin, after months of laggard movements downward, has seen a notable rally. The largest cryptocurrency by market value is now trading above $20,000. This is significant not only because it’s the first meaningful jump since the collapse of the FTX exchange, but also because bitcoin has appreciated by enough to put many crypto mining companies and token holders in profit, according to a Glassnode report.
/jlne.ws/3HcFlEI

A Crypto Magnate Saw the Risks and Still Was Hammered
Gregory Zuckerman, Vicky Ge Huang and Caitlin Ostroff – The Wall Street Journal
The cryptocurrency crunch is so bad even the pros are getting squeezed. A year ago, Barry Silbert’s 40% stake in Digital Currency Group Inc., or DCG, was valued at more than $3 billion. A crypto conglomerate, with tentacles in nearly every corner of the industry from lending to bitcoin mining, DCG worked out of plush Connecticut offices featuring a marble-countertop kitchen with a coffee barista and a French chef.
/jlne.ws/3GGOV1e

In Africa, FTX Posed as Haven From Tumbling Currencies, Inflation; Cryptocurrency exchange’s ambassadors recruited new customers through glitzy events, $5 sign-up bonuses and giveaways
Alexandra Wexler – The Wall Street
Weeks before cryptocurrency exchange FTX filed for bankruptcy, dozens of young Nigerians in skintight dresses and brightly colored suits shimmied under limbo bars, posed for photos in front of the company’s logo and sipped expensive liquor at a swanky beachfront venue.
/jlne.ws/3wcJAd3

A Bored Ape Whale Just Spent Nearly $1 Million on DeGods NFTs
Andrew Hayward – Decrypt
DeGods has dominated the Solana NFT space, racking up more trading volume in SOL than any other project. It now plans to move over to Ethereum, and the project appears to have already caught the eye of at least one big investor in the space.
/jlne.ws/3XkkpkV

Politics

The Hard Reality of a Debt-Ceiling Showdown; Do House Republicans have a strategy that will keep them unified when the political clamor about default looms?
The Editorial Board – The Wall Street Journal
The first rule of political negotiation is never take a hostage you’re not prepared to shoot. That’s advice for House Republicans to contemplate as they gear up for a high-stakes showdown with President Biden over raising the federal borrowing limit. The U.S. will reach its $31.4 trillion limit on gross federal debt on Thursday, and Treasury is resorting to special measures that on present revenue trend can delay default into the spring. Speaker Kevin McCarthy has promised his Members he won’t move to raise the limit without spending concessions from President Biden. But Mr. Biden says he won’t negotiate at all over the debt limit.
/jlne.ws/3ZKUfJv

Republicans target proxy advisers ISS and Glass Lewis in ESG backlash; Attorneys-general take aim at pair with influence over corporate shareholder votes
Patrick Temple-West – Financial Times
Republican state attorneys-general in the US have taken aim at corporate proxy advisers, challenging Institutional Shareholder Services and Glass Lewis over their recommendations tied to climate and social goals. The two companies, which dominate the business of guiding investors on board votes and shareholder resolutions, are the latest financial groups to receive pressure from Republican state officials on the attack over sustainable investing principles.
/jlne.ws/3XlDram

U.S. asks court to reverse order banning airplane mask mandate to combat COVID
David Shepardson – Reuters
The Justice Department on Tuesday asked an appeals court panel to reverse an April 2021 ruling that declared unlawful a government order requiring masks on airplanes, buses, trains, ridesharing services and at airports and other transportation hubs. A three-judge panel of the 11th Circuit Court of Appeals heard arguments on the government’s appeal of a ruling by a U.S. district court judge in Florida that found the U.S. Centers for Disease Control and Prevention (CDC) lacked legal authority to issue a nationwide travel mask mandate to combat COVID-19.
/jlne.ws/3ZHb7ky

GOP introduces bill to end public health emergency
Tina Reed – Axios
Rep. Brett Guthrie (R-Ky.) launched a House Republican effort Tuesday to officially declare an end to the COVID-19 public health emergency. Why it matters: The measure could set up a symbolic vote similar to the one the Senate took last year that President Joe Biden would likely veto.
/jlne.ws/3Wip99h

Biden reaches a vital new tipping point on Ukraine
Stephen Collinson – CNN
The West has reached its latest fateful crossroads over Ukraine. Looming decisions on deepening support for Kyiv’s fight against Russian President Vladimir Putin’s onslaught have been rendered even more critical by a winter battlefield that was more dynamic than the expected frozen stalemate. Time is also fast ebbing for the US and its allies to send more powerful weapons and to train Ukrainian soldiers how to use them before the second, possibly decisive year of the war, which could see Russia launch a ferocious new offensive.
/jlne.ws/3XGJAha

Regulation

Nearly Half of SEC Crypto Enforcement Actions in 2022 Were Against ICOs
Andrew Asmakov – Decrypt
The U.S. Securities and Exchange Commission (SEC) brought a record number of crypto-related enforcement actions last year, up 50% as compared to 2021, per a report released by consulting firm Cornerstone Research. The report found that over the course of 2022, the SEC brought a total of 24 litigation actions in U.S. federal courts and six administrative proceedings. The number of litigations increased from 14 cases registered the previous year.
/jlne.ws/3krAu9W

Live Discussion on Twitter with Dave Lauer & SEC Chair Gensler
Gary Gensler – Twitter
When I got to SEC (@SECGov), I asked for a copy of our best execution rule. Only then did I learn we didn’t have our own best ex rule. I think best ex is too important to our mission not to have our own Commission standard. I spoke with Dave Lauer (@dlauer) about this recently.
/jlne.ws/3HfqLMY

Statement Regarding National Trust and Fiduciary Services Company, Inc., et al.
Commissioner Hester M. Peirce and Commissioner Mark T. Uyeda – SEC
We write separately to clarify our view that this Order should not be read to suggest that a statement that one fee is waived is not necessarily rendered misleading by the receipt of another fee. The Commission’s Order finds that National Trust and Fiduciary Services Company, Inc. (“NTFS”), a non-depository trust company, violated Sections 17(a)(2) and (3) of the Securities Act of 1933 when it stated that there were “no annual fees” for one of its product offerings, including by stating in trust instruments that the annual trustee fee was “waived.”[1] According to the Order, these statements were misleading because NTFS failed to disclose that: (1) trust assets were invested in mutual fund share classes that charged recurring Rule 12b-1 fees, and (2) these Rule 12b-1 fees were paid to a broker-dealer subsidiary of NTFS that routed the fees to NTFS after deducting its expenses and satisfying its net capital requirements.[2]
/jlne.ws/3IYcXHU

SEC Obtains Judgment Against Florida Man in Microcap Fraud
SEC
On January 12, 2023, the U.S. District Court in Boston entered a final judgment by consent against Florida resident Todd Zinkwich, whom the SEC charged for engaging in a scheme to manipulate the market for numerous microcap stocks. The District Court had previously entered a partial judgment against Zinkwich, imposing multiple injunctions against him.
/jlne.ws/3w8aJhv

Michael Nascimento sentenced for failing to pay confiscation order
FCA
In 2018, Mr Nascimento was sentenced to 11 years’ imprisonment for his role in a £2.8 million investment fraud, where he was convicted with five associates of defrauding investors through a series of boiler room companies. Members of the public were cold-called and subjected to high-pressure sales tactics to persuade them to buy shares in a company that owned land on the island of Madeira. Investors were promised guaranteed returns of between 125% and 228%. The money was, in fact, used to maintain the fraud and to fund the lifestyle of Mr Nascimento.
/jlne.ws/3iMZrw4

Midway Limited pays $33,000 infringement notice penalty for alleged continuous disclosure breach
ASIC
Australian wood-fibre processor and exporter Midway Limited has paid a $33,000 infringement notice over ASIC concerns that it failed to comply with its continuous disclosure obligations.
ASIC issued the infringement notice following an investigation into announcements made by Midway on the Australian Securities Exchange (ASX).
/jlne.ws/3XBl1Cm

FMA appoints Stuart Johnson to new Chief Economist role
Financial Markets Authority
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko has appointed Stuart Johnson to the newly created role of Chief Economist. Mr Johnson brings nearly 20 years’ experience to the FMA, as an economist and behavioural science expert within the financial services industry spanning banking, insurance and government regulation. He joins the FMA from London, UK, where he has been Head of Behavioural Economics, Conduct Risk and Customer Experience, at major international banking and insurance firms since 2015. He has as an MSc from London School of Economics.
/jlne.ws/3IWY4FD

Investing and Trading

Why Orange Juice Is So Expensive Right Now; Destructive weather and greening disease have led to the weakest crop in decades
Ryan Dezember and David Uberti – The Wall Street Journal
Florida orange growers are harvesting their smallest crop in nearly 90 years, the result of an ill-timed freeze, two hurricanes and citrus disease that is laying waste to its groves. The Sunshine State is expected to produce just 18 million 90-pound boxes of oranges, the Agriculture Department said last week. That would be less than half the size of last year’s poor crop and a 93% decline from Florida’s peak output in 1998.
/jlne.ws/3wdt4d2

Brady bonds 2.0; Can it work though?
Robin Wigglesworth – Financial Times
It’s hard to miss the stench of doom hanging over many developing countries right now. Some are even predicting another big nasty emerging-markets crisis akin to those in the late 1990s and 1980s. Can anything be done? Perhaps. Our colleague Martin Wolf has highlighted an intriguing proposal on how to address the budding wave of sovereign defaults from two of the field’s more prominent experts.
/jlne.ws/3w9AhuD

Investor letter to FTSE chairs calls for new group to ease stewardship concerns; Fresh discussions needed to settle contentious topics such as executive pay and overboarding
Daniel Thomas – Financial Times
Some of the world’s largest investors have called for a new group to be formed with FTSE 100 boards to calm a brewing argument over the role of stewardship and corporate governance in the UK. The Investor Forum, which represents shareholders with more than £800bn in UK equities, has written to FTSE chairs calling for fresh discussions to help settle contentious topics such as executive pay and overboarding ahead of the 2023 AGM season.
/jlne.ws/3ZKYYuJ

U.S. mortgage interest rates fall to lowest levels since September, MBA says
Reuters
The average interest rate on the most popular U.S. home loan dropped to its lowest level since September as more evidence inflation is past its peak sent Treasury yields lower, data from the Mortgage Bankers Association (MBA) showed on Wednesday. The average contract rate on a 30-year fixed-rate mortgage fell by 19 basis points to 6.23% for the week ended Jan. 13. Financial markets have been buoyed by a string of recent data that shows high inflation is slowing, allowing the Federal Reserve to scale back its hefty interest rate hikes and plan a stopping point this spring.
/jlne.ws/3WjMasu

Environmental, Social and Corporate Governance

Davos: why stakeholder capitalism is under attack | FT Moral Money
Financial Times – YouTube
For decades some of the world’s most powerful people have gathered at the Swiss resort Davos for the annual meeting of the World Economic Forum. As FT Moral Money editor Simon Mundy explains, many follow the philosophy of stakeholder capitalism. But is this a vital means of achieving a fairer, more enlightened world economy, or a dangerous idea that will strengthen an unaccountable global elite?
/jlne.ws/3krFdbG

European Executives Eye Biden’s Green Plan With Envy in Davos; Businesses want a continental version of the US plan; Huge US incentives could lure investment from Europe
Saleha Mohsin, Alberto Nardelli and Akshat Rathi – Bloomberg
Brussels is coming under pressure from European business to respond to the US’s multi-billion dollar clean energy subsidy plan or risk losing investment and falling behind in the green energy revolution. The region’s reaction to the Inflation Reduction Act has become the key issue in meetings between industry leaders and politicians at the World Economic Forum’s annual gathering in Davos this week. It includes billions in financial aid that Europe fears will unfairly benefit US businesses.
/jlne.ws/3GQfHEp

Brazilian meat giant under fire for allegedly misleading investors; JBS sold more than $3 billion worth of ‘green bonds’ in the U.S., but a watchdog group says its impact on Amazon forests belies its pledges
Steven Mufson – The Washington Post
A small activist group called Mighty Earth is taking on the Brazilian-based food giant JBS over whether its “green” bonds deserve that Earth-friendly connotation. In 2021, JBS, the world’s biggest meat company and mammoth food-processing firm, sold $3.2 billion worth of “green bonds” linked to the company’s sustainability goals. If JBS fails to reach its targets for greenhouse gas emissions, it will be penalized and will pay bondholders a “step up amount or premium payment,” the company says. On Tuesday, Mighty Earth filed a complaint with the Securities and Exchange Commission alleging that JBS is already failing to meet its emissions targets.
/jlne.ws/3GPlOc3

Will Andrew Forrest’s $6bn green bet pay off? Plus, a legal test case for the sustainability-linked bond sector
Simon Mundy and Kenza Bryan – Financial Times
Welcome back. Before you get stuck in to our latest Davos update, take a look at our fun new video – digging into the controversy around the World Economic Forum’s “stakeholder capitalism” agenda. Yesterday’s big speech here came from European Commission president Ursula von der Leyen, who sought to allay fears that the continent could be left behind by a surge of green investment across the Atlantic following Joe Biden’s Inflation Reduction Act.
/jlne.ws/3ZHVtW1

EV Chargers, Biofuel Makers Square Off in Billion-Dollar Tussle; Carbon credit programs for transport fuels spread globally; Draft EU legislation pushes EV charging funding to biofuels
Ryan Fisher – Bloomberg
Your decision to dump a gas-fueled car for an electric car will probably depend in part on your confidence there are enough chargers to keep you on the road. That decision may become easier if tens of billions of dollars are poured into charging networks from relatively unknown carbon credit programs in North America and Europe. Lobbyists, however, have been tussling over who the flow of funds from these credits should favor.
/jlne.ws/3XC5MsX

How to Understand the Correction in the ESG Fund Market
Tasneem Hanfi Brogger and Frances Schwartzkopff – Bloomberg
For years, financial professionals made exaggerated ESG claims that fed a market boom with little in the way of oversight. That era of exuberance around environmental, social and governance investing is now coming to an end with increasingly consequential waves of regulations. In the US, where ESG has also become embroiled in partisan politics, the fallout is evident in the shrinking pool of assets carrying an ESG label: down by more than half over the past two years. In Europe, new regulations led the world’s biggest asset managers to strip coveted ESG tags from more than $140 billion in aggregate client funds in the latter part of 2022. And there’s more to come.
/jlne.ws/3iFZ8TP

The Mounting Cost of Anti-ESG Movements; As some states continue to push back on ESG and positive impact strategies, new research shows the financial burden of these moves
Banking Exchange
State boycotts of managers based on anti-ESG stances could cost taxpayers more than $700 million a year in additional borrowing costs, according to new research. The work by Philadelphia-based Econsult Solutions found such boycotts could increase states’ cost of borrowing by between $264 million and $708 million. The research looked at municipal bond financing costs for Kentucky, Florida, Louisiana, Oklahoma, West Virginia and Missouri.
/jlne.ws/3ITxkpy

The Payments Association Launches New ESG Initiative To Drive Sustainable Change; Project ESG Will Deliver A Programme Of Insights, Learning And Developments, Supported By ESG Ratings Agency EthicsGrade’s CEO, Charles Radclyffe
Mondovisione
The Payments Association, which celebrates innovation and collaboration across the payments industry, today announces the launch of Project ESG. The Payments Association’s seven Projects drive industry change to shape the future of the payments landscape. Project ESG will aim to encourage companies in the payments industry to adopt progressive strategies for how they impact the environment, our society and their governance in a sustainable way. The new project will be supported by over 20 payments firms that will seek to represent the collective view of The Payments Association and its members at industry-critical moments. This includes board directors and owners to managers and those working on the front line. This holistic view ranges from banks to new and established fintechs and payment firms, consultancies, and end users like merchants – as the whole industry must go beyond financial imperatives and address societal issues which matter to their stakeholders.
/jlne.ws/3krkaWq

Britishvolt’s Failure Reinforces UK Car Sector’s Existential Dread; Britain risks being left behind in the global race for green tech self-sufficiency.
Craig Trudell and Rachel Morison – Bloomberg
The writing was on the wall when Britain finalized its break from the European Union: The UK sorely lacked the battery manufacturing capability that would be absolutely critical to the auto industry’s future, leaving the country’s already declining car sector in a make-or-break bind. The failure of Britishvolt Ltd. to get past the stage of developing prototypes for an industry still vital to the UK’s economy casts further doubt on its prospects in the global race by nations to become self-sufficient in greener technology. The three-year-old startup filed for Britain’s equivalent of bankruptcy on Tuesday, letting go of all but a couple dozen employees.
/jlne.ws/3ZJ9pPy

GFXC to entice buy-side code adoption with ESG tie-ups; Rating agency partnerships would link FX code adoption to ESG scores
Natasha Rega-Jones – Risk.net
For years, one of the prime focuses of the Global Foreign Exchange Committee (GFXC) has been to encourage greater adoption of the FX Global Code among buy-side market participants. Since the code was updated in 2019, however, the GFXC’s success in this endeavour has been rather limited. According to the committee’s official register, of the 1,162 financial firms that have signed the FX Global Code to date, 12% include asset managers, corporate treasuries, hedge funds, insurance companies, pension funds and sovereign wealth funds. This is a slight improvement on 2019 when just 9% of code signatories were from the buy side. But for the majority of buy-side market participants there remains a reluctance to sign up, with many feeling that the code doesn’t fully apply to them. Others have suggested that a simpler version should be created for buy-side firms to help achieve greater adherence.
/jlne.ws/3WpidqW

Institutions

Deutsche Bank Names New Compliance Chief as Part of Reshuffle; Changes come as German lender revamps compliance programs following several investigations in recent years
Mengqi Sun – The Wall Street Journal
Deutsche Bank AG tapped a veteran of Barclays PLC and American Express Co. to be its new chief compliance officer and reshuffled other positions as the German lender works to revamp its compliance programs in the wake of several regulatory investigations in recent years over its business conduct and compliance controls.
/jlne.ws/3Hfs7r0

Solomon Says Goldman Pushed Too Quickly Into Consumer Banking
Daniel Taub – Bloomberg
Goldman Sachs Group Inc. was overly aggressive in pushing into the consumer space, doing “too much, too quickly,” which contributed to worse-than-expected fourth-quarter earnings, Chief Executive Officer David Solomon said. “We obviously had a disappointing quarter and we tried to own that upfront,” Solomon said in a CNBC interview Wednesday at the World Economic Forum in Davos, Switzerland.
/jlne.ws/3ZIWqxc

Credit Suisse Chief Not Concerned Over Conflicts in Klein Deal; ‘I have zero concerns,’ Ulrich Koerner tells CNBC at Davos; Ex-board member Klein plans to sell his firm to Credit Suisse
Myriam Balezou – Bloomberg
Credit Suisse Group AG’s top executive said he’s not concerned about potential conflicts of interest in the bank’s dealings with Michael Klein, the former board member who is slated to sell his advisory boutique to the Swiss lender. “I have zero concerns,” Ulrich Koerner, the chief executive officer of Credit Suisse, said in an interview with CNBC when asked about potential conflicts of interest. “We can deal with a situation like that in the utmost professional way,” he said, adding that Klein is an “excellent banker and dealmaker.”
/jlne.ws/3CSYUiQ

UBS Chairman Kelleher Slams EU Impasse Over Banking Union
Steven Arons and Nicholas Comfort – Bloomberg
The European Union’s failure to complete banking union is putting the continent’s lenders at a strong disadvantage, according to UBS Group AG Chairman Colm Kelleher. “Europe is massively losing out competitively to the US banking system” because it can’t break down national barriers to banking, Kelleher said on a panel at the World Economic Forum in Davos on Wednesday. The region “needs a markets-based banking system,” he said.
/jlne.ws/3ktHhju

Morgan Stanley investment banking slump overshadows wealth management growth; Despite reductions in revenues overall, the bank also reported positive earnings in fixed income, with revenues up 15% to $1.4 billion in Q4 compared with 2021.
Wesley Bray – The Trade
Morgan Stanley’s investment banking arm saw revenues plummet by nearly 50%, overshadowing growth in wealth management revenues for the fourth quarter. Full year revenues were down 10% to $53.7 billion in comparison with 2021 on the back of a slump in investment banking also echoed in the results of fellow Wall Street banks Citi and Goldman Sachs released in the last week.
/jlne.ws/3XHel5U

Work & Management

What if Diversity Trainings Are Doing More Harm Than Good?
Jesse Singal – New York Times (opinion)
Diversity trainings have been around for decades, long before the country’s latest round of racial reckoning. But after George Floyd’s murder – as companies faced pressure to demonstrate a commitment to racial justice – interest in the diversity, equity and inclusion (D.E.I.) industry exploded. The American market reached an estimated $3.4 billion in 2020. D.E.I. trainings are designed to help organizations become more welcoming to members of traditionally marginalized groups. Advocates make bold promises: Diversity workshops can foster better intergroup relations, improve the retention of minority employees, close recruitment gaps and so on. The only problem? There’s little evidence that many of these initiatives work. And the specific type of diversity training that is currently in vogue – mandatory trainings that blame dominant groups for D.E.I. problems – may well have a net-negative effect on the outcomes managers claim to care about.
/jlne.ws/3WhjMqX

Wellness Exchange

Covid-19 killed fewer people in the US in 2022, but early data suggests it was still a leading cause of death
Deidre McPhillips – CNN
Covid-19 has killed more than 1 million people in the United States since the start of the pandemic, and life expectancy has been cut by nearly 2.5 years since 2020. A very early look at data from 2022 suggests that there were significantly fewer Covid-19 deaths in the third year of the pandemic than there were in the first two. More than 267,000 people died of Covid-19 in 2022, according to preliminary data from Johns Hopkins University, compared with more than 350,000 Covid-19 deaths in 2020 and more than 475,000 Covid-19 deaths in 2021.
/jlne.ws/3CXqICR

Eating Less Beats Intermittent Fasting for Weight Loss, Study Says
Low De Wei – Bloomberg
Eating smaller meals and cutting calories is a more effective way to manage weight than intermittent fasting, when consumption is restricted to a narrow window of time. That’s the conclusion of researchers from Johns Hopkins University School of Medicine who studied the eating, sleeping and waking patterns of 547 adults over a six-month period. Their findings appear Wednesday in the Journal of the American Heart Association.
/jlne.ws/3GSAQxX

China Masses Take Covid Fight Into Own Hands as Xi Sits Back; Citizens turn to grassroots groups, companies for medical help; Government absence weakens confidence in Communist Party
Bloomberg News
Left to fend for herself after China abruptly ended the world’s strictest Covid restrictions, 31-year-old Share Xue and her daughter found themselves with 40C (104F) fevers and an expired bottle of Motrin. “I didn’t think it would be that difficult to get drugs,” she said from the southern city of Guangzhou, recalling how she had expected the government to take charge and give out medicine during her illness last month. With hospitals overwhelmed, she turned to social media instead – and found an app on WeChat facilitating donations to those in need.
/jlne.ws/3waqPXF

Regions

China’s Shrinking Population Is Deeper Problem Than Slow Growth for Its Economy
Stella Yifan – The Wall Street Journal
Economists said China’s shrinking population poses a major future challenge for the world’s second-largest economy, while President Xi Jinping’s top economic adviser sought Tuesday to restore investor confidence after one of the most disappointing growth rates in decades. China has already rolled back the zero-Covid policies that restrained growth for much of 2022, setting the stage for a recovery this year. The U-turn, in the wake of public protests, was part of a broad policy reset aimed at boosting the economy, including an easing of regulations on the property sector and signals that the clampdown on the tech sector has ended.
/jlne.ws/3ZKZ3P3

Europe Has Good News – Gas Reserves May Be Full Well Before Next Winter
Bloomberg
Europe has for months been grappling with the crucial question of how it will fill its gas stockpiles – the key buffer that protects the region against cold blasts and demand surges – in the absence of a major chunk of Russian supply. One report has some good news.
/jlne.ws/3HdfxZ6

Europe Is Winning the Winter War by Sheer Luck; Gas supplies are ample even if cold weather returns in force. The bad news is that it means climate change is still happening.
Javier Blas – Bloomberg (opinion)
It may sound flippant to argue winter is over – after all, the weather has just turned cold in Europe, it’s still the middle of January, and February and March lie ahead. For the European natural gas market, however, the season is done and dusted. This week, Europe is crossing the halfway point of its heating quarter. On average, the coming days are typically the coldest of the year. Almost like clockwork, wintry weather returns and snow bedecks the annual meeting of the World Economic Forum in the Alpine resort of Davos. Indeed, from London to Berlin, temperatures have now dropped to freezing. But even if the rest of the winter turns to be colder-than-normal, the region would have enough gas in storage to avert the worst-case scenario: running out as a result of Russia reducing exports as part of its strategy against Ukraine’s allies.
/jlne.ws/3Hd4j6R

Ukraine Seeks to Add Steel to Grain Export Deal, Minister Says; Kyiv wants to expand current deal allowing grain shipment; Svyrydenko calls on Ukraine allies to provide heavy weapons
Alberto Nardelli and Daryna Krasnolutska – Bloomberg
Ukraine wants to expand a crucial grain-export agreement to include steel shipments as a way to support an economy battered by Russia’s war, Economy Minister Yuliia Svyrydenko said in an interview. The cabinet minister called for building on the deal brokered last July by the United Nations and Turkey, which opened three Ukrainian Black Sea ports that had been blockaded by Russian forces for food exports to alleviate the global market.
/jlne.ws/3WeQXvn

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Music financing boom reverberates to markets

Music financing boom reverberates to markets

First Read Hits & Takes John Lothian & JLN Staff Yesterday morning I checked the status of my investment accounts after the market opening as I often do and I was like, "WOW!" But then I saw there were problems with some of the opening auctions at the NYSE and...

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