A Speculative Frenzy Is Sweeping Wall Street and World Markets; ‘Sick man of Europe’: UK cut off over fears about new COVID strain

Dec 21, 2020

First Read

$18,961/$300,000 (6.3%)
Jorge Alegria, David Prosperi

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A Smile on FTSE Russell’s Sean Smith’s Face is Not News, But This Smile is Special
By John J. Lothian – JLN

Sean Smith has a big smile on his face these days. Actually, that is not news, though it is harder to see behind a mask. Sean is normally always smiling. However, his smile is even bigger presently because of a new product announcement by Cboe Global Markets, one of the key partners for Smith’s employer, FTSE Russell.

The Cboe announced last week plans to launch Russell 2000 mini options. This new product incorporates many of the elements of Smith’s career into one small package with huge potential. I spoke with Smith, managing director of derivatives licensing for FTSE Russell, on Friday about the new mini Russell 2000 options.

The Cboe is going to start offering Mini Russell 2000 options in the first quarter of 2021, subject to regulatory review. The contracts are worth 1/10 of the size of the index and about the same notional value as the Russell 2000 ETF options.This latest mini offering is meant to hit the sweet spot of customer demand to help them invest, trade or manage their risk with greater precision.

To read the rest of this commentary, go here.

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Hits & Takes
John Lothian & JLN Staff

Today in JLN we have an obituary for Mark J. Powers, who was one of the founders of financial futures as an economist at the Chicago Mercantile Exchange. Mark died recently at the age of 80. Besides the CME, Mark also worked for the CFTC. His family shared the obituary and we have published it on JohnLothianNews.com.

We published an exclusive report from Joel Fingerman of Fundamental Analytics on Friday that looks at the April 17 collapse in WTI crude oil and the days leading up to it. It is a detailed analytical look at numerous quantitative measures that should have given market operators and regulators more indication something severe was about to happen in the market. Fingerman issued this exclusive report to JLN in response to the CFTC interim report about the crude market action that saw prices go substantially negative.

The Rosebowl is moving to Texas because of the ban on spectator sports in California.

Sen. Kelly Loeffler and her campaign are being criticized for a campaign ad that took a phrase Rev. Raphael Warnock said in an academic discussion out of context. Specifically, Warnock was discussing a phrase used by Rev. Jeremiah Wright, President Obama’s former church’s preacher, that was used against Obama in the 2008 Presidential election. Warnock was speaking about the “truth-telling tradition by the Black church.” Also, an open letter from more than 100 religious leaders, a coalition of African-American pastors in Georgia, criticised Loeffler for her “smear campaign” against Warnock, saying it was a broader attack on the faith traditions of black congregations. Elections are so much fun, aren’t they?

The CME Group’s Simon Raybould received his JLN hoodie that includes the message “The World Needs Journalists” and the JLN logo. Simon received the hoodie down in Australia, where he lives. So the JLN message supporting journalists may not be worldwide yet, but it is truly world down-under.

JLN is not the only organization to try to preserve industry history. Here is a radio interview from 1996 with Leo Melamed that the Capitalist Pig’s Jonathan Hoenig recorded and recently shared again on Facebook. It is a detailed interview about Leo’s early life and the CME. Did you know Leo used to sell firecrackers and male pregnancy prevention attire?

We have two new donations to the JLN MarketsWiki Education GoFundMe campaign. David Prosperi and Jorge Alergria are the latest people to give to the JLN MarketsWiki Education GoFundMe campaign. David was formerly with the OCC and was recently profiled by JLN in a video titled David Prosperi – A Career in Politics, Government, Futures Trading, Insurance and Clearinghouse Public Relations. Jorge is the former CEO of MexDer, the Mexican Derivatives Exchange and is currently working in international markets development in Latin American for the CME Group and as a senior advisor to the president CME Clearing. Thank you to David and Jorge and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.

Today is the first day at JLN for intern Owen Rehling.

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

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The CME Group’s Bitcoin Futures have reportedly hit a record high of $1.47 billion in open interest, according to data from The Block. This represents roughly 17 percent of total aggregate open interest in the bitcoin futures market, according to The Block’s data.~MR

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The Spread: That’s a Wrap
JohnLothianNews.com

This week on The Spread, Cboe announces new products, Massachusetts regulators file a complaint against Robinhood, and JLN says goodbye to Mike Forrester.

Watch the video »

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John Lothian News Readership Survey
John Lothian News is conducting a readership survey to determine key demographic information about subscribers to the John Lothian Newsletter. This helps us attract sponsors to John Lothian News and keeps the cost of JLN down. The questions we ask are quick and easy to answer. To encourage you to complete the survey, we are picking the names of three people who complete the survey and will donate $100 to the charity of their choice in their names. During this pandemic time, there are many worthy causes that are near and dear to our readers. Complete our survey and win the chance at being able to direct the $100 donations from JJLCO.

Click HERE to access the survey.

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CFTC Chief of Staff and Chief Operating Officer Jaime Klima to Depart Agency in January
CFTC
The Commodity Futures Trading Commission today announced that Jaime L. Klima, the CFTC’s Chief of Staff and Chief Operating Officer, will depart the agency for a role in the private sector next month. Ms. Klima has served in her executive leadership role since joining the agency in July 2019, where in addition to being the lead advisor to Chairman and Chief Executive Heath P. Tarbert on legal, policy, and administrative matters, she has been responsible for managing the daily operations of the agency and overseeing its nearly 1,000 personnel.
/bit.ly/3apP6zE

*****I wonder where she will go next.~JJL

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Intercontinental Exchange Appoints Jaime L. Klima as Chief Regulatory Officer of NYSE Group
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced today that Jaime L. Klima has been named Chief Regulatory Officer of NYSE Group, where she will oversee the work of its independent regulatory unit, NYSE Regulation.
/bit.ly/3alomjC

*****My wondering has ended.~JJL

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CME Group Scores 1 For St Jude This Season
Steve Eubanks – LPGA.com
When players showed up at the Ritz Carlton Golf Resort in Naples for obligatory COVID testing before the CME Group Tour Championship, they looked like road-weary travelers in the TSA line. While everyone is grateful for the sponsors, staff, volunteers and venues providing opportunities to play, a summer and fall filled with nasal swabs and temperature checks has deadened the eyes of those who traversed that gauntlet.
/bit.ly/3nEj2Ma

*****There are many good charitable venues to support and St. Judes is one of them, whether you make a hole-in-one or not.~JJL

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Why Dippin’ Dots Might Have a Place in the COVID-19 Vaccine Distribution Plan
Kerry Breen – NBC Bay Area
The coronavirus vaccines are on their way, but the Pfizer-BioNTech vaccine, so far the only option that has been approved in the United States, has one complicating factor: It needs to be stored at -94 F. That’s an incredibly cold temperature, even for vaccines, and has led to concerns that even as the vaccine is distributed, many places may not have the facilities to store it. A potential answer, first reported by PopSci, comes from an unlikely source: Dippin’ Dots.
/bit.ly/3nyQ545

*****Might as well use the facilities from Dippin’ Dots, you sure can’t buy them at a sports event these days.~JJL

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Friday’s Top Three
Our top story Friday was the John Lothian News Survey 2020, which allows you to be in the draw for a $100 donation to your favorite charity, as well as to help us make JLN better with your feedback. Second was JLN’s Broadridge/RJO Deal Shakes Up Post-trade Business, Gives RJO a Single Platform To Grow Its Burgeoning Global Business. Third was SEC Charges Robinhood Financial With Misleading Customers About Revenue Sources and Failing to Satisfy Duty of Best Execution, from SEC.gov.

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MarketsWiki Stats
195,432,925 pages viewed; 24,743 pages; 227,432 edits
MarketsWiki Statistics

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CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

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Lead Stories

A Speculative Frenzy Is Sweeping Wall Street and World Markets
Bloomberg News
Mania is laid bare in IPO surge, options boom and crypto fever; Some strategists warn risk-taking excess is a signal to sell
Animal spirits are famously running wild across Wall Street, but crunch the numbers and this bull market is even crazier than it seems. Global stocks are now worth around $100 trillion. American companies have raised a record $175 billion in public listings. Some $3 trillion of corporate bonds are trading with negative yields. All the while the virus spreads, the economic cycle stays on life-support and businesses get thrashed by fresh lockdowns.
/bloom.bg/2WzAwNC

‘Sick man of Europe’: UK cut off over fears about new COVID strain
Gerhard Mey, Ben Makori – Reuters
The United Kingdom stood shut off from the rest of Europe on Monday after allies cut transport ties over fears of a new coronavirus strain, sowing chaos for families, truckers and supermarkets just days before the Brexit cliff edge.
/reut.rs/3rhf5Px

FIS, Global Payments Held Unsuccessful Talks to Merge; Deal could have been valued at around $70 billion as payments industry continues wave of consolidations
Cara Lombardo and Dana Cimilluca – WSJ
Fidelity National Information Services Inc. FIS -0.51% and Global Payments Inc. GPN 0.47% recently held unsuccessful talks for a merger deal that could have been valued at around $70 billion, people familiar with the matter said, in a sign that a wave of consolidation is still sweeping through the payments industry.
/on.wsj.com/3riMdqg

Europe Moves to Isolate U.K. as Mutant Virus Ruins Christmas
Priscila Azevedo Rocha and Kitty Donaldson – Bloomberg
France, Germany join Italy in suspending flights from U.K.; People flock to train stations in London, airports crowded
The U.K. plunged into Christmas chaos with police blocking people from boarding packed trains, holidays abroad scrapped and travel with Europe banned after London went into an emergency lockdown. France on Sunday suspended inbound travel from the U.K. for 48 hours and Germany halted arriving flights from Britain, which is in the middle of delicate Brexit negotiations with its European Union partners. Those talks are still at a critical stage after the weekend.
/bloom.bg/2WvL7ZR

New COVID-19 strain inflicts pain across markets, triggers volatility
Sujata Rao – Reuters
European shares fell 3% on Monday, the dollar strengthened and volatility surged across asset classes as a fast-spreading new coronavirus strain in Britain threatened to torpedo markets’ optimism over a vaccine-fuelled rebound in economic growth.
/reut.rs/34xF6k5

Robinhood faces questions over business model after US censures; Silicon Valley brokerage’s practices under scrutiny after accusations by regulators
Madison Darbyshire and Eric Platt and David Carnevali – FT
Robinhood’s quest to disrupt Wall Street with its sleek app and promise to “democratise” trading has itself been disrupted by a duo of US regulatory actions that highlight the tougher scrutiny the Silicon Valley broker faces.
/on.ft.com/3avcQ5e

Borrow Now and Tax Later to Save Young Jobs, ECB Study Shows
Paul Gordon – Bloomberg
Young people are hit more than twice as hard as older generations by deep recessions, so governments should borrow as much as needed to save their jobs, according to a study published by the European Central Bank.
/bloom.bg/3pd0Xoy

Frontline Workers and People Over 74 Should Get Shots Next, C.D.C. Panel Says; The recommendation was a compromise aimed at getting the coronavirus vaccine to the most vulnerable of two high-risk groups.
Abby Goodnough and Jan Hoffman – NY Times
Striking a compromise between two high-risk population groups, a panel advising the Centers for Disease Control and Prevention voted Sunday to recommend that people age 75 and older be next in line to receive the coronavirus vaccine in the United States, along with about 30 million “frontline essential workers,” such as emergency responders, teachers and grocery store employees.
/nyti.ms/3p4Eom6

Graphic: A (markets) journal of the plague year
Marc Jones, Ritvik Carvalho – Reuters
Last December the first infection with the new coronavirus was reported to the World Health Organization. Twelve months later, as the charts below show, global financial markets have been on a roller coaster like no other.
/reut.rs/3nDeCoG

Boris Johnson’s government is badly behind the curve; UK needs bold but pragmatic leadership as it faces a bleak midwinter
The editorial board – FT
The pandemic has saved its cruellest blow yet for the moment when newly-approved vaccines gave hope that the end was finally in sight. Millions of Britons have been phoning friends and family to cancel holiday visits after Prime Minister Boris Johnson imposed new restrictions in England, and other UK nations tightened their own. Faced with a highly infectious new virus strain, in effect “cancelling Christmas” for large parts of the country appears sadly unavoidable. But the U-turn, just days after Mr Johnson assured a planned easing of restrictions would go ahead, will make many feel the government is yet again behind the curve.
/on.ft.com/3ayH4UX

No ‘Negative’ News: How China Censored the Coronavirus; Thousands of internal directives and reports reveal how Chinese officials stage-managed what appeared online in the early days of the outbreak.
Raymond Zhong, Paul Mozur, Jeff Kao and Aaron Krolik – NY Times
In the early hours of Feb. 7, China’s powerful internet censors experienced an unfamiliar and deeply unsettling sensation. They felt they were losing control. The news was spreading quickly that Li Wenliang, a doctor who had warned about a strange new viral outbreak only to be threatened by the police and accused of peddling rumors, had died of Covid-19. Grief and fury coursed through social media. To people at home and abroad, Dr. Li’s death showed the terrible cost of the Chinese government’s instinct to suppress inconvenient information.
/nyti.ms/37B7h3c

China says firmly opposes U.S. bill that could remove Chinese firms from U.S. exchanges
Reuters Staff
China said on Monday it firmly opposed U.S. President Trump signing a bill that would kick Chinese companies off U.S. stock exchanges unless they adhere to U.S. auditing standards, saying it contains discriminatory provisions against Chinese companies.
/reut.rs/2Ks0ikz

Charles Schwab UK fined £9m for failing to protect client money; FCA director compares shortcomings at firm to those at collapsed US bank Lehman Brothers
Matthew Vincent – FT
Stockbroking firm Charles Schwab UK has been fined £9m by the UK financial regulator for failing to protect its clients’ assets and “making a false statement” to the authorities.
/on.ft.com/2KocHWF

Global banks boost Singapore hiring to mitigate Hong Kong risk; Financial groups look to trim headcount in Chinese territory after crackdown by Beijing
Mercedes Ruehl and Primrose Riordan – FT
Global financial groups are ramping up hiring in Singapore and shunning Hong Kong as concerns over Beijing’s sweeping national security law in the Chinese territory spur the relocation of key roles.
/on.ft.com/2LWgRFH

Why Germany should shut down BaFin; Regulators in the finance industry must be brought under the same umbrella
Patrick Jenkins – FT
It was an ignominious way to celebrate an 18th birthday. Only a month after BaFin came of age in May, Germany’s financial regulator was confronting a huge national embarrassment: a vast fraud that led to the collapse of payments company Wirecard. It marked the first time in history that a blue-chip Dax 30 company had failed.
/on.ft.com/3pbGCA3

Jack Ma Makes Ant Offer to Placate Chinese Regulators; Trying to salvage his relationship with regulators in a Nov. 2 meeting, the Chinese billionaire said he was ready to do what the country needed
Lingling Wei – WSJ
As Jack Ma was trying to salvage his relationship with Beijing in early November, the beleaguered Chinese billionaire offered to hand over parts of his financial-technology giant, Ant Group, to the Chinese government, according to people with knowledge of the matter.
/on.wsj.com/3atdr7y

ESMA reports huge EUR78 million increase in market abuse sanctions in 2019; The EU regulator said that a total of EUR88 million in fines relating to 339 actions under the market abuse regulation were imposed in 2019, up from EUR10 million in 2018.
Annabel Smith – The Trade
ESMA has released its annual market abuse report confirming that it saw market abuse sanctions significantly increase to EUR88 million in 2019, up from just EUR10 million in the previous year.
/bit.ly/3axGIxJ

The TRADE Talks: Looking Back and Looking Forward
Kiays Khalil – The Trade
After a wild year packed with uncertainty, The TRADE’s editorial team is back in the latest podcast episode to cover the latest news and people moves. Hayley McDowell, Annabel Smith, and Kiays Khalil are joined by guest Adam Inzirillo, head of equities for North America at Cboe, to discuss the key trends for 2021.
/bit.ly/34yKjb5

The TRADE’s Crystal Ball 2021: Buy-side and trading venues; Gaze into The TRADE’s crystal ball for insights from buy-side market participants, exchange operators and trading venues on their predictions for the year ahead.
Hayley McDowell – The Trade
Predictions are a bit of a dangerous game after the curve balls 2020 threw at us! However, experience has taught me that the City is a resilient beast, and we will find a way forward despite the COVID-19, Brexit and recessionary headwinds coming our way.
/bit.ly/3azoR9M

Coronavirus

Sweden announces toughest Covid measures yet; Announcement follows king’s admission that country had ‘failed’ to manage pandemic
Richard Milne – FT
Sweden announced its toughest measures yet against coronavirus, including its first recommendation to use face masks, as its death toll continued to increase.
/on.ft.com/38lb6J2

Why Are So Many Italians Dying of Covid-19? Italy thought it could prevent a repeat of spring’s tragedy, but the surging death toll suggests otherwise
Margherita Stancati – WSJ
Italy, the first non-Asian country hit by the coronavirus pandemic early this year, once again is struggling with one of the world’s deadliest outbreaks. Around 611 people are dying of Covid-19 in Italy on an average day, behind only Brazil and the U.S. This year Italy has recorded about 68,900 confirmed deaths from the virus, the highest total in Europe and fifth in the world after the U.S., Brazil, India and Mexico—which all have much bigger populations.
/on.wsj.com/3aqVir3

Sweden’s PM Promises to Fix Shortcomings Exposed by Covid Crisis
Rafaela Lindeberg – Bloomberg
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. Sweden’s Prime Minister Stefan Lofven has promised to fix the societal flaws exposed by the coronavirus once the nation has emerged from the pandemic.
/bloom.bg/34yikIN

France Considers Banning Flights, Trains to U.K., Official Says
Flavia Krause-Jackson – Bloomberg
France is considering banning flights and trains to the U.K., an official familiar with the deliberations said. No decision has been made and France will coordinate with the EU.
/bloom.bg/2KJGJnq

Women Won’t Recover Easily From India’s Pandemic; The Covid-19 crisis has made their already daunting road to economic and social independence even more difficult.
Shruti Rajagopalan – Bloomberg
Amid the Covid-19 crisis, three out of four Indians are experiencing their first recession. As might be expected, women are bearing the brunt of the pain — and the consequences could be long-lasting.
/bloom.bg/2WzDBNS

London Begins Emergency Lockdown as U.K. Fights New Virus Strain
Tim Ross and Eddie Spence – Bloomberg
Capital, southeast England move into new tier; trains jammed; New mutation forces Johnson to scrap five-day Christmas easing
More than 16 million Britons are now required to stay at home as a lockdown came into force Sunday in London and southeast England, part of Boris Johnson’s attempt to control a fast-spreading new strain of the coronavirus.
/bloom.bg/2WvJ6wL

Vaccines Don’t Mean We’ll See the Last of Covid, Experts Warn; Past immunization campaigns suggest the disease may never be fully eradicated
John Lauerman and James Paton – Bloomberg
In record speed, vaccines are here, and more are on their way. Less than a year since the coronavirus began ravaging the world, the first shots are raising hopes for wiping the Covid-19 pandemic from the face of the earth. Today’s programs in the U.S. and the U.K. are precursors to immunization campaigns intended to reach the planet’s entire population — all 8 billion people in every corner of the globe.
/bloom.bg/3h6HT8J

U.K.’s Hancock Says New Covid Mutation Is ‘Out of Control’
Kitty Donaldson – Bloomberg
Hancock sees restrictions in place until vaccination rollout; Johnson’s Tories urge parliamentary vote on new restrictions
U.K. Health Secretary Matt Hancock warned that the new strain of the coronavirus is “out of control” and suggested parts of England will be stuck in the new, highest tier of restrictions until a vaccine is rolled out.
/bloom.bg/3h4VflX

India hits 10 million coronavirus cases but pace slows
Shilpa Jamkhandikar – Reuters
India exceeded 10 million infections of the new coronavirus on Saturday, much later than predicted only a month ago as the pace of infections slows, despite many in the country giving up on masks and social distancing.
/reut.rs/2WAqrjr

New COVID variant may be in countries beyond UK – science advisor
Reuters Staff
Britain’s chief scientific adviser said a new, more transmissible variant of the coronavirus, which has forced the government to ramp up social restrictions in London and south east England, is likely to be present in other countries too.
/reut.rs/34wlXit

Global COVID-19 cases surpass 75 million
Kavya B, Roshan Abraham – Reuters
Global coronavirus infections surpassed the 75 million mark on Saturday, according to a Reuters tally, as several nations around the world begin vaccinating against the virus.
/reut.rs/2J8msaX

New coronavirus variant: What do we know?
James Gallagher – BBC
The rapid spread of a new variant of coronavirus has been blamed for the introduction of strict tier four mixing rules for millions of people, harsher restrictions on mixing at Christmas in England, Scotland and Wales, and other countries placing the UK on a travel ban.
/bbc.in/2Kpo2Wr

Biden to receive coronavirus vaccine on Monday as U.S. inoculation effort mounts
David Brunnstrom – Reuters
U.S. President-elect Joe Biden plans to publicly receive a COVID-19 vaccine injection on Monday in an effort to boost confidence in its safety ahead of its wide distribution next year.
/reut.rs/3rjPpBK

China regulator tightens guideline on biological products, including vaccines
Reuters Staff
China’s market regulator said on Monday it had tightened up a guideline for inspection of biological products, including vaccines, before a batch is sold or imported.
/reut.rs/3phawTH

Australia’s Covid Success Has Bred Complacency; After effectively stamping out the virus earlier this year, compliance has grown lax and infections are spreading.
David Fickling – Bloomberg
Compared with the rest of the world, Australia’s latest bout of coronavirus might seem to barely register. The cluster of 83 infections connected to the affluent beachside suburb of Avalon in northern Sydney is equivalent to the number of new cases registered in the U.S. every 30 seconds or so. Still, with much of the country now closing its borders to people from Sydney, the circumstances offer a warning to other regions when they start to emerge from the pandemic’s shadow.
/bloom.bg/3re2JYu

Boris Johnson Does Wonders for Turkey Sales; Hard lockdowns in southeast England are terrible news for retailers, but curbing Christmas mixing is a short-term gift for supermarkets.
Andrea Felsted – Bloomberg
Britain’s retailers and restaurant groups thought it couldn’t get worse after the November Covid lockdown. It just did. The U.K. government’s announcement of new ultra-stringent “Tier 4” restrictions in London and the southeast of the country — closing non-essential shops and telling people to stay home where possible — inflicts another blow on struggling store groups. The British Retail Consortium, the industry’s trade body, said stores would lose 2 billion pounds ($2.4 billion) a week under the new restrictions.
/bloom.bg/3aqq5nQ

Hospitals Are Still Short on Masks and Other Protective Gear; Health care workers are urging the incoming Biden administration to use the Defense Production Act to increase domestic manufacturing of personal protective equipment.
Andrew Jacobs – NY Times
As Americans celebrate the rollout of a coronavirus vaccine, many of the doctors and nurses first in line for inoculation say a victory lap is premature. They fear that the optimism stirred by the vaccine will overshadow a crisis that has drawn scant public attention in recent months: the alarming shortage of personal protective equipment, or P.P.E., that has led frontline medical workers to ration their use of the disposable gloves, gowns and N95 respirator masks that reduce the spread of infection.
/nyti.ms/38ptxfD

Exchanges, OTC and Clearing

Cboe Global Markets Announces Election of Ivan Fong and Alexander J. Matturri, Jr. to Board of Directors
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced its Board of Directors elected Ivan Fong, Senior Vice President, General Counsel and Secretary of 3M Company, and Alexander J. Matturri, Jr. former Chief Executive Officer of S&P Dow Jones Indices LLC, as new members to its Board of Directors.
/bit.ly/34qQ3DR

PROFILE – Charles Li: Chief engineering officer
Thomas Blott – IFR
There are at least two reasons why it is worth listening to Charles Li, outgoing chief executive of Hong Kong Exchanges and Clearing, the Hong Kong bourse operator.
/bit.ly/3h3Xiqt

Nasdaq Resolves Connectivity Issue That Hit Some Customers
Ksenia Galouchko and Ryan Vlastelica – Bloomberg
Earlier connectivity issue has been resolved, Nasdaq says; S&P 500 futures tumbled as much as 3% Monday on virus jitters
Nasdaq said it has resolved an issue with connectivity to the exchange affecting some customers. “The earlier issue with connectivity to the exchange for a subset of OUCH and FLITE ports has been resolved,” the bourse said in a statement on its website
/bloom.bg/3aIITPt

Cost Impacts From NZX IT And Cybersecurity Reviews
Mondovisione
NZX has considered the recommendations and potential cost impacts following the completion of reviews commissioned by the NZX Board from independent service providers into the clearing and settlement incidents between March and April 2020, and the Distributed Denial of Service (DDoS) attacks that began in August 2020. NZX accepts that it did not meet its own high standards in certain areas of its technology systems.
/bit.ly/3rhpbA0

Shenzhen Stock Exchange Launches The CNI Xiangmi Lake Culture And Creativity Index http://
Mondovisione
To comprehensively reflect the operation status of the listed companies in the cultural and creative industries in Shenzhen and Hong Kong, create new cultural and creative models, promote deeply integrated development of “culture + finance”, and better support the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the pilot demonstration zone of socialism with Chinese characteristics, on 17 December 2020, SZSE’s wholly-owned subsidiary Shenzhen Securities Information Co., Ltd. and the People’s Government of Futian District jointly launched the CNI Xiangmi Lake Culture and Creativity Index (Abbreviation: Culture & Creativity. Code: 980046).
/bit.ly/3pdOMIk

Closure Of Bursa Malaysia In Conjunction With The Christmas And 2021 New Year Celebrations
Bursa Malaysia
Bursa Malaysia Berhad and its subsidiaries will be closed on these dates in conjunction with the following public holidays: Christmas: Friday, 25 December 2020
/bit.ly/3aIMn4v

Application for Gold, Silver, Platinum, and Palladium Regularity
CME Group
Notice is hereby given that Manfra, Tordella & Brookes, Inc. has applied to become an Approved Depository for gold, silver, platinum, and palladium at the following location:
/bit.ly/3at4xqE

OTC Production Advisory – USD, CLP, COP Curve Input Changes – Effective December 18, 2020
CME Group
As mentioned in advisory # 20-466, CME Clearing will be incorporating the following changes to USD LIBOR 3M, CLP TNA 1D and COP IBR 1D forecasting curves:
/bit.ly/3asd25j

About publication of materials of Specialist Working Group for Recurrence Prevention Measures (3rd meeting)
JPX
Specialist Working Group for Recurrence Prevention Measures (3rd meeting) was held and post the materials of this Working Group.
/bit.ly/34yDztY

FCA fines Charles Schwab UK £8.96 million over safeguarding and compliance failures
UK FCA
The Financial Conduct Authority (FCA) has fined Charles Schwab UK Ltd (CSUK) £8.96 million for failing to adequately protect client assets, carrying out a regulated activity without permission and making a false statement to the FCA.
/bit.ly/3pgy8rh

SolarWinds Orion cyber incident
UK FCA
We are aware of an ongoing cyber incident affecting the SolarWinds Orion suite of IT management tools. The National Cyber Security Centre (NCSC) has published guidance to firms to help identify if they may be affected. It includes a list of immediate actions to take if you are using these tools. We have been asked, along with regulatory bodies across other sectors, to assist NCSC in promoting this guidance.
/bit.ly/2KoaieB

ESMA Updates EMIR Q&AS
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its Questions and Answers on OTC requirements and reporting issues under the European Markets Infrastructure Regulation (EMIR).
/bit.ly/38pjhEf

ESMA sees significant increase in EU market abuse sanctions to EUR88 million in 2019
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its annual report on administrative and criminal sanctions, as well as other administrative measures, issued under the Market Abuse Regulation (MAR) in 2019. The Report shows that National Competent Authorities (NCAs) and other authorities imposed a total of EUR88 million in fines related to 339 administrative and criminal actions under MAR.
/bit.ly/3aDKUMq

SEC Charges Biotech Company and CEO With Fraud Concerning COVID-19 Blood Testing Device
SEC
The Securities and Exchange Commission today announced charges against California-based biotechnology company Decision Diagnostics Corp. and its CEO, Keith Berman, with making false and misleading claims in numerous press releases that the company had developed a working, break-through technology that could accurately detect Covid-19 through a quick blood test. The SEC temporarily suspended trading in Decision Diagnostics’ securities on April 23, 2020.
/bit.ly/3rkpycX

SEC Releases 2020 Office of Credit Rating Reports
SEC
The Securities and Exchange Commission today issued the Annual Report on Nationally Recognized Statistical Rating Organizations (NRSROs) and the 2020 Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization. The annual report discusses, among other topics, the state of competition, transparency, and conflicts of interest among the firms. The exam report provides a comprehensive overview of the Office of Credit Rating (OCR)’s examinations of the NRSROs, including, among other things, the staff’s essential findings and recommendations.
/bit.ly/34sPdGL

SEC Issues Multiple Whistleblower Awards Totaling Over $3.6 Million
SEC
The Securities and Exchange Commission today announced whistleblower awards in connection with three separate enforcement actions totaling over $3.6 million.
/bit.ly/38nPSKz

Small Business Advocate Releases Annual Report for Fiscal Year 2020
SEC
The SEC’s Office of the Advocate for Small Business Capital Formation issued its Annual Report for Fiscal Year 2020 today. The report provides comprehensive data on the state of small business capital formation, a summary of the Office’s activities in supporting small business and their investors, and policy recommendations from the Office.
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SEC Announces the Creation of the Security-Based Swaps Joint Venture, Led by Division of Examinations and Division of Trading and Markets
SEC
The Securities and Exchange Commission today announced the creation of the Security-Based Swaps Joint Venture, a collaborative venture among several SEC divisions and offices that will be responsible for coordinating functions related to the regulation of security-based swaps (SBS) and oversight of certain entities that will be required to register with the SEC (SBS entities).
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Annual Report to Congress on Nationally Recognized Statistical Rating Organizations – June 26, 2019 – June 25, 2020
SEC
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2020 Summary Report of Commission Staff’s Examinations of Each Nationally Recognized Statistical Rating Organization (Office of Credit Ratings)
SEC
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Statement after the Enactment of the Holding Foreign Companies Accountable Act
SEC
Harmonizing the Act and the Report of the President’s Working Group on Financial Markets
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Fintech

China could restrict bank tie-ups with fintech platforms, official suggests
Reuters Staff
China’s former finance minister Lou Jiwei suggested that China could restrict the number of banks a single fintech platform can partner with, to prevent any platform from gaining too much market share, state media reported on Sunday.
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MoneyGram, After Spending Millions on Compliance, Wants Stronger Due-Diligence Rule; The money-transfer company supports a proposal to broaden the scope of transactions for which institutions need to collect and pass along information
Mengqi Sun – WSJ
A proposal by regulators that would require financial institutions to collect and pass along sender and receiver details on more transactions has raised concerns at many firms about compliance costs. But one of the largest money-transfer companies is putting its weight behind the effort.
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2021: Year of Fintech Product Opportunities | by Himanshu Bharadwaj
Himanshu Bharadwaj – Medium
The fintech revolution began in the last decade around the 2008 financial crisis with companies like Affirm, Credit Karma, Betterment, Kickstarter, Avant, Kabbage, Square, Stripe, Venmo, etc. Recession, in general, is a good time to create startups. Whatsapp, Groupon, Instagram, Uber, Pinterest, Slack, GV, Cloudera were all founded between 2008 -2010 timeframes.
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Citigroup builds fintech marketplace
Finance Feeds – Andrew Saks
It will be interesting to see if this rather less stable or credible market compared to the interbank FX market that Citigroup used to major on will be more successful for the bank than its own attempt to go down the retail FX route, having canned that after just a few years.
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Allianz chief urges stricter fintech rules after Wirecard scandal; Oliver Bäte says regulation is ‘major problem’ and similar high-profile cases are likely
Oliver Ralph, Patrick Jenkins and Olaf Storbeck – FT
The chief executive of Allianz, Europe’s largest insurance company, has called for stricter regulation of the areas where technology meets finance in the wake of the Wirecard scandal.
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Tradefeedr raises $3 million to upgrade analytics workflows; The majority of the $3 million in funding came from private investment firm IPGL.
Annabel Smith – The Trade
Foreign exchange trading data platform Tradefeedr has raised $3 million in a funding round from private investment firm IPGL and others to modernise its trading analytics workflows.
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Cryptocurrencies

Cboe’s latest data deal lays the foundation for a wide range of new crypto market products
Frank Chaparro – The Block
Derivatives exchange operator Cboe Global Markets is preparing to launch crypto indexes after inking a partnership with trading software firm CoinRoutes.
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Crypto FOMO Makes Even a 350% Premium on Bitcoin Look Appealing
Katherine Greifeld – Bloomberg
Buyers are paying the equivalent of about $100,000 for Bitcoin; Despite premiums, ‘there aren’t really better options’: BI
Bitcoin’s awe-inspiring surge to record highs has investors racing for exposure to the rally — even if it means paying an absurdly high markup. As the largest cryptocurrency rocketed above $23,000 for the first time this week, the mania pushed the price of the Bitwise 10 Crypto Index Fund (ticker BITW) as much as 650% above the value of its holdings and is currently trading near 350%, according to data compiled by Bloomberg. Meanwhile, the premium on the Grayscale Bitcoin Trust (ticker GBTC) swelled to 34% amid the rally.
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Decentralized Stock Trading Launches on DeFi Platform Injective Protocol
Tanzeel Akhtar – Coindesk
Injective Protocol, a decentralized derivatives exchange platform, is launching trading in tokenized stocks of major companies like Google.
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2020: The year bitcoin went institutional
Izabella Kaminska – FT
On December 11, a prominent but very private financial newsletter author noted to clients that while he had never previously written about bitcoin, it was correct to say that institutional capital had now started to arrive in scale and that it would be churlish to pick a fight with it. Demand for bitcoin would now outstrip supply. Bitcoin, he observed, would become an excellent metaphor for risk appetite in 2021 as a result. Less than a week later, Coindesk confirmed that UK-based asset manager Ruffer had accumulated some £550m of bitcoin since November, representing some 2.7 per cent of the firm’s AUM.
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Bankrupt Bitcoin Platform Cred Avoids Trustee Takeover, Faces Examiner’s Probe
Andrew Scurria – FT
A bankruptcy judge declined to place cryptocurrency platform Cred Inc. under the control of an outside trustee but ordered an examination of how and why the company failed. Judge John Dorsey of the U.S. Bankruptcy Court in Wilmington, Del., appointed an examiner to look into Cred’s management, including co-founder and former PayPal Holdings Inc. executive Daniel Schatt, who was removed as chief executive earlier this month.
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Some Cryptocurrency Trader Disclosure Required in Proposed Rules
Paul Kiernan – WSJ
The Treasury Department unveiled a plan Friday to require some cryptocurrency traders to provide information about their identities in an effort to curb the anonymous transfer of assets by criminals using the new technology. The proposed regulations, coming as the price of bitcoin hovers near a record high, seek to deliver on a longstanding goal of U.S. policy makers: to hold entities that transact in cryptocurrencies to the same standards required of traditional financial institutions. The proposals would focus on a type of tool known as unhosted wallets, which allow the owner of a unique digital key to store cryptocurrencies, such as bitcoin and ethereum, and transact with others directly—without going through a financial institution.
on.wsj.com/2JeAqIo

These three 2020 crypto venture funding deals are some of the industry’s largest
MK Manoylov – The Block
2020 was a historic year for many reasons. Venture funding deals in the crypto industry were no different. Bakkt took first place with its $300 million Series B round. Funds came from M12, Pantera Capital, PayU, CMT Digital, and Boston Consulting Group. Bakkt is tied with Coinbase for the second-largest ever funding deal in the crypto or blockchain vertical.
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A Slowing of Grayscale Bitcoin Fund Inflows Could Prompt Price Correction: JPMorgan
Tanzeel Akhtar – Coindesk
JPMorgan strategists have said the odds of a bitcoin correction would rise if flows into the Grayscale Bitcoin Trust slow down dramatically. Such a drop in flows into the largest bitcoin fund would increase the likelihood of a price correction similar to the one seen in the second half of 2019, according to a note from the bank’s quantitative strategists led by Nikolaos Panigirtzoglou, as reported by Bloomberg Monday. The digital asset manager’s bitcoin inflows “are too big to allow any position unwinding by momentum traders to create sustained negative price dynamics,” the strategists said.
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Why Ledger Kept All That Customer Data in the First Place
Marc Hochstein – Coindesk
First, the good news, in a manner of speaking: Ledger customers can now see firsthand whether their personal information was exposed in the hack discovered in July. Someone posted the complete lists of 1 million email addresses and 272,000 names, mailing addresses and phone numbers belonging to customers of the France-based maker of hardware cryptocurrency wallets. The latter list is a lot bigger than the number previously disclosed by Ledger (9,500). Ledger did not address the discrepancy in a tweet storm Sunday apologizing again for the breach. A spokesperson did not immediately respond to an email requesting comment.
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Dogecoin Jumps 20% After Musk’s Twitter Shout-Out; Bitcoin Joke Spurs Dialogue With Saylor
Zack Voell, Kevin Reynolds – Coindesk
Why Elon Musk was tweeting about dogecoin early Sunday morning is anyone’s guess. But the small cryptocurrency spiked 20% following the SpaceX CEO’s weekend Twitter antics. It also started a dialogue with MicroStrategy CEO and noted bitcoin evangelist Michael Saylor.
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Road to IPO: Coinbase’s Power Struggles
Jeff Roberts – Coindesk
“Some people lead by loyalty and inspiration. Balaji [Srinivasan] leads by fear and by money,” says Nathalie McGrath who, as Coinbase’s VP of People, watched as infighting engulfed the company. Balaji’s style as he led the charge for a non-corporate vision of crypto was abrasive but effective. For someone who by all accounts did not work well with others, [Coinbase’s former CTO] was remarkably good at office politics. Anyone in his way got edged aside with alacrity. Balaji either fired them outright or, through back-office maneuvering, stripped them of influence until, totally demoralized, they quit on their own accord.
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Square’s Cash App Now Lets Customers Get Bitcoin Back on Purchases
Kevin Reynolds – Coindesk
Cash App, the cash-transferal app of payments giant Square, is now allowing customers to get bitcoin back on every transaction. Previously, Cash App had only allowed clients to get U.S. currency back on transactions. In November, in the company’s Q3 earnings report Square said Cash App generated $1.63 billion of bitcoin revenue, up 11 times from the year-ago period. The move is another sign of the growing mainstream acceptance of bitcoin and the increasing importance of the leading cryptocurrency to Cash App and to its parent. It’s also likely a move to stay a step ahead of rival PayPal, which recently dove head first into the cryptocurrency arena.
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Musk Inquires About Moving ‘Large Transactions’ to Bitcoin
Will Wade – Bloomberg
Elon Musk inquired about converting “large transactions” of Tesla Inc.’s balance sheet into Bitcoin in a Twitter exchange with Michael Saylor, a prominent booster of the digital currency.
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Politics

Explainer-Russia’s potent cyber and information warfare capabilities
Andrew Osborn, Gabrielle Tétrault-Farber – Reuters
U.S. Secretary of State Mike Pompeo said on Friday that Russia was responsible for a cyber attack that embedded malicious code inside U.S. government software systems and those of other governments and companies across the world.
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Biden Calls Climate Change ‘Existential Threat of Our Time’
Jennifer A Dlouhy and Josh Wingrove – Bloomberg
Introduces nominees for Energy, Interior, EPA at event; Promises to rejoin Paris climate accord, restore EPA
President-elect Joe Biden introduced on Saturday key members of the team he is assembling to fulfill his pledge to combat climate change, calling them brilliant and qualified.
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America Isn’t Finished Paying for Trump’s Incompetence; Vaccine rollout confusion and the Russian cyberattack are reminders that the president isn’t doing his job.
Timothy L. O’Brien – Bloomberg
In 2016, a few months before Donald Trump was elected president, I wrote a column about his long history as a mismanager that cited this chestnut from his book “Crippled America”:
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Russia ‘Acted With Impunity’ in Hack on U.S., Senator Says
Olivia Rockeman – Bloomberg
Romney faults Trump’s response, Warner sees ‘big haul’; Calls for a cyber-response from U.S. on equivalent scale
U.S. officials say a lengthy effort lies ahead to identify the extent of a suspected Russian hack on federal agencies and private companies, and to craft an appropriate response.
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Yellen Sets Out to Build Treasury Team With Obama Alumni
Saleha Mohsin and Liz McCormick – Bloomberg
Carpenter, Barr considered to head Treasury’s domestic finance; Top Treasury Department jobs require Senate confirmation
Janet Yellen is focusing on several Obama-administration alumni for key posts in the U.S. Treasury, according to people familiar with the matter, as critical decisions loom on everything from debt funding to international economic ties.
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Georgia’s millionaire senators won’t drain the swamp. They are the swamp; Obscene wealth, financial speculation, cavalier indifference – yet Republicans Kelly Loeffler and David Perdue claim their Democratic challengers are out of touch
Moira Donegan – The Guardian
Kelly Loeffler and David Perdue, the two Republican Senate incumbents from Georgia facing runoff elections on 5 January, are trying to nationalize their respective races. They have spent much of their time saying that if their opponents win, thereby giving Democrats a narrow majority in the senate, the country will be unrecognizably altered.
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Pastors: Kelly Loeffler’s Smear Of Rev. Raphael Warnock Is Broad Assault On The Black Church; Their open letter equates support for social justice with an article of faith, and Loeffler’s attacks as an assault on religion.
headshot
Mary Papenfuss – Huff Post
A stinging open letter signed by a coalition of African-American pastors in Georgia blasted Republican Sen. Kelly Loeffler’s attacks on rival Rev. Raphael Warnock as a broader assault on the faith traditions of Black congregations.
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It’s Easier for a Woman to Become Chancellor Than CEO in Germany
Raymond Colitt – Bloomberg
Critics say it lacks both ambition and teeth. Germany’s proposed bill to set quotas for women on executive boards is touted by its backers as a breakthrough for the country’s gender-equality push. Its detractors, however, point out that it will still leave Europe’s biggest economy with among the most male-dominated corporate suites in the developed world.
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Regulation

FCA fines Charles Schwab’s UK arm for failing to protect client assets
Reuters Staff
Britain’s financial watchdog has fined U.S.-listed Charles Schwab’s UK business 8.96 million pounds ($11.88 million) for failing to protect client assets, likening it to missteps taken by Lehman Brothers before the 2008 financial crisis.
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Update on ASIC’s review of November’s ASX Trade outage
ASIC
ASIC continues to assess the impact of the ASX Trade outage and subsequent issues with its Centre Point dark-pool trade matching service, order cancellations and a delay to clearing and settlement that occurred during the week of 16 November 2020.
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Hong Kong Securities And Futures Commission Previews New Electronic Licensing Services
Mondovisione
The Securities and Futures Commission (SFC) today unveiled new electronic licensing functions on WINGS (Note 1), an online platform for submitting information to the regulator. These functions are a cornerstone of the fully digitalised licensing process which the SFC plans to launch in 2021.
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FCA introduces rule to enhance climate-related disclosures
UK FCA
The FCA has published a Policy Statement and final rule and guidance promoting better climate-related financial disclosures for UK premium listed commercial companies.
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Regulation alone will not strengthen Europe’s digital sector; The EU needs more risk-taking capital and reformed product markets
Martin Sandbu – FT
It has been a rough month for Big Tech. US authorities launched blockbuster antitrust lawsuits against Facebook and Google. The European Commission presented new regulations, including the ability to levy swingeing fines and in extremis break up offending companies in the technology sector.
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Lessons from an investment scandal; The FCA should take to heart the failings exposed by the LCF collapse
The editorial board – FT
Low interest rates have been a challenge for savers in much of Europe and the US ever since the financial crisis, tempting many to seek out investments that promise high returns. The natural desire to make money can blind investors to risk — or encourage them to put their savings into products that are not properly regulated by financial watchdogs. That challenge has only been compounded by the pandemic as central banks everywhere have rushed to keep borrowing rates low to keep their economies afloat. The concern is that, faced with the prospect of an extended period of ultra-low or even negative rates, millions more savers will plough their hard-earned capital into speculative schemes.
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Investing and Trading

The Year in Deals Can Be Summed Up in 4 Letters; This year was all about the SPAC.
Michael J. de la Merced – NY Times
It was a difficult year for deal makers to describe. Early on, the pandemic made the notion of corporate takeovers seem, for a few months, like something from a lost era. But then came a burst of activity like few had ever seen before, even as the health crisis raged. Amid the twists and turns, the single biggest thing on merger advisers’ minds can be summed up in four letters: SPAC.
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Small Businesses, Hit Hard by Pandemic, Are Being Starved of Credit; Banks lend less to small companies today than they did before the financial crisis. Loans to big businesses, meanwhile, have multiplied.
Peter Rudegeair – NY Times
Small businesses that cleared the hurdle of the coronavirus shutdowns are now encountering an all-too-familiar obstacle: Banks don’t want to lend to them. The Paycheck Protection Program funneled $525 billion in forgivable loans to millions of small businesses in the pandemic’s early days. Yet that massive infusion masked a yearslong contraction in small-business lending that happened alongside a big-business borrowing boom.
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Why a Former GM Executive Quit to Start a Blank-Check Company; Barry Engle’s Qell Acquisition isn’t looking for the next Tesla.
David Welch – Bloomberg
Just five years after being recruited for an executive post at General Motors Co., Barry Engle in November 2019 ascended to president of the automaker’s $100 billion North American business, the company’s profit center. Then in August, not even a year in that post as one of the automaker’s top five executives, he quit.
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JPMorgan, Goldman to Restart Buybacks as Fed Gives Green Light
Jesse Hamilton and Yalman Onaran – Bloomberg
Industry has been source of strength during pandemic, Fed says; But dividends still restricted amid economic uncertainty
The Federal Reserve, showing confidence in how banks are weathering the pandemic, gave industry leaders a green light to resume billions of dollars in stock buybacks. Lenders including JPMorgan Chase & Co. and Goldman Sachs Group Inc. said they’ll take the Fed up on its offer.
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Commodities Are Back In Fashion as Investors Get Ready for Boom
Jack Farchy and Nishant Kumar – Bloomberg
Prices have already surged to highest in more than six years; Inflation fears are drawing investors back to resources sector
For the best part of a decade, commodities have been deeply out of fashion. Now, as investors scour the market for the great reflation play, they’re hot again. Investing luminaries from Point72 to Pimco are calling for commodity prices to move higher. Goldman Sachs Group Inc., the bellwether of Wall Street, is predicting a new commodity bull market to rival the China-driven boom of the 2000s and the oil price spikes of the 1970s.
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Tesla debuts into S&P after frantic Friday trading
Reuters Staff
Tesla Inc will on Monday make its much anticipated debut into the benchmark S&P 500 index, after rising to a record high on Friday in a frantic day of trading.
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Tesla Slides in First Day of Trading on the S&P 500 Index
Esha Dey – Bloomberg
Shares of electric vehicle maker drops 6.4% in premarket trade; Today marks the first trading of trading on the S&P 500
Tesla Inc.’s shares fell as much as 6.4% in premarket trading on its first day after being added to the S&P 500 Index, as the broader market slid and the stock retraced gains from Friday when tens of millions of shares were purchased by index-fund managers.
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Environmental, Social and Corporate Governance

Putting the green in greenback? ESG investors target corporate accounts
Simon Jessop, Matthew Green – Reuters
Five years ago, many investors and executives would have politely told Jill Atkins to buzz off.
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Why Corporations’ Control of the Seed Supply Worries This Chef; Dan Barber on what consolidation is doing to the diversity of our food crops.
Bloomberg News
Just look at what’s happened in the last decade: We have four multinational corporations—Bayer, Corteva, ChemChina, BASF—that control more than 60% of our seed supply. Four multinationals control the future of our food.
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Putting the green in greenback? ESG investors target corporate accounts
Simon Jessop, Matthew Green – Reuters
Five years ago, many investors and executives would have politely told Jill Atkins to buzz off. Now they listen keenly when the British academic presents her work, known as “extinction accounting”, which shows how companies are contributing to the demise of honeybees, as well as other species – and how that could come back to sting them.
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Sweden Says EU Plan to Hit World’s Busiest Green Debt Market
Frances Schwartzkopff – Bloomberg
Swedish buildings eligible for green bond funding face big cut; Varying national energy rules make common ground hard to find
Sweden is fighting a draft European climate measure that it says could harm its world-beating green bond market.
/bloom.bg/2LLupUf

U.S. Falls Further Behind Europe in Fast-Growing ESG Market
Alastair Marsh – Bloomberg
Europe dominates in green bond issuance and fund inflows; Divided politics in U.S. has discouraged sustainable finance
For all the talk about ESG, the U.S. is a real laggard. With many U.S. money managers still struggling with the trade-off between generating returns and taking environmental, social and governance factors seriously, European firms have built a seemingly unassailable lead in the booming $40 trillion sustainable finance industry.
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The Unfinished Business of Office Diversity Training; Companies announced major diversity initiatives amid last summer’s protests—half a year later, progress has been inconsistent
Krithika Varagur – WSJ
For a few weeks last June and July, Seyi Fabode’s phone rang off the hook. “I was constantly roped into calls with 20 other white founders as the ‘Black founder’ to talk about my experience,” says Mr. Fabode, an entrepreneur in Austin, Texas, and co-founder of Varuna, which provides software and sensors for water utilities. He was happy to recommend talented Black job candidates when asked.
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Fracking: From Breaking Shale to Breaking Even; Understanding the mechanics and economics of fracking can help investors understand the dizzyingly cyclical nature of energy markets
Jinjoo Lee – WSJ
Everyone seems to have an opinion about fracking. The revolutionary and controversial oil-and-gas exploration technique has raised the ire of oil sheikhs, investors and environmentalists while minting billionaires and wiping out tens of billions of dollars fronted by many of their lenders and investors.
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Institutions

Goldman’s Gary Cohn Saga Thrusts Clawback Shortcomings Into Spotlight
Anders Melin – Bloomberg
Directors don’t often recoup money from executives in scandals; Seldom used, clawbacks give boards cover on accountability
It seemed like a decisive move by Goldman Sachs Group Inc.’s board of directors: Compel a dozen executives to give back millions of dollars to hold them publicly accountable for the 1MDB corruption scandal.
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Christmas Lunch Hedge Fund Is Bad for Your Wealth; Bold contrarian predictions – made at boozy lunches or otherwise – can sometimes work out very well. The problem is, most of the time they don’t.
John Authers – Bloomberg
Contrarian trades are where the big money is. Investors who hold their nerve and are greedy when everyone else is fearful, and vice versa, can make huge bucks. The nature of the market, and its tendency to overshoot, more or less guarantees this.
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It’s a Good Time to Be an Elite Banker; For the dominant players in global finance, 2021’s pandemic fixes will probably yield yet more bounty.
Elisa Martinuzzi – Bloomberg
When the world’s biggest health crisis in a century struck in February, central bankers and politicians rushed to protect their economies. The devastation of lockdown threatened even the soundest financial firms, whose collapse would have worsened the crisis.
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Jailed Banker’s Wife Loses Final Appeal on U.K. Asset Freeze
Aoife White and Ellen Milligan – Bloomberg
Hajiyeva was first target of U.K.’s unexplained wealth orders; Banker’s wife became famous after Harrods spending sprees
The wife of a jailed Azeri banker must give British authorities information on her assets after losing a Supreme Court challenge to the country’s first so-called unexplained wealth order.
/bloom.bg/38sfpSO

Citi Trial Puts Banks on Notice to Make Sure They’re Not Next
Chris Dolmetsch, Katherine Doherty, and Jennifer Surane – Bloomberg
Case could be ‘transformational’ for their duties, liability; Whoever wins, $900 million fail highlights internal controls
Win or lose, Citibank’s battle to recover half a billion dollars from an accidental payment is sure to prompt a review of internal controls in the industry and could have a lasting impact on the more than $1 trillion syndicated loan market.
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Regions

Xenophobia Surges as Covid-19 Slams South African Economy
Gemma Gatticchi and Lwazi Maseko – Bloomberg
Anti-immigrant groups demand mass deportation of foreigners; Key province plans to limit the right of foreigners to trade
As the coronavirus outbreak has slammed the South African economy and pushed unemployment to a 17-year high, it’s awakened a recurrent social demon: xenophobia.
/bloom.bg/3h6GPSh

A Covid-19 Surge and Conspiracy Theories Roil Pakistan; Public apathy and suspicion, and the government’s inability to enforce health restrictions, are feeding a second wave in a country with a limited social safety net.
Zia ur-Rehman and Emily Schmall – NYTimes
Iqbal Shaheen, a taxi driver, drove his sick father to this city’s three main hospitals. All of their intensive care beds and ventilators were occupied.
/nyti.ms/37BLsR9

China issues national security rules on foreign investment
Reuters Staff
China published rules on Saturday for reviewing foreign investment on national security grounds, potentially broad measures that it insisted did not amount to protectionism.
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London Luxury Homes Are a Prime Location to Hide Dirty Money
Olivia Konotey-Ahulu – Bloomberg
U.K. residential sector attracts money launderers: government; Pandemic makes real estate more vulnerable, report finds
The U.K. property market is increasingly a prime target for money laundering, with London’s most expensive homes attracting criminal buyers as a way to hide dirty cash. There’s now a high likelihood of buyers using U.K. real estate to disguise illegal activity, up from a medium risk three years ago, the U.K. government said in a December report assessing money laundering and terrorist financing this year. The findings also upgraded the risk to the estate agency sector to medium.
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At Banque Havilland, Abu Dhabi’s Crown Prince Was Known as ‘The Boss’; A private bank in Luxembourg provided special treatment, including advice on how to attack Qatar’s financial markets.
Gavin Finch, Harry Wilson – Bloomberg
Financier David Rowland, who used Britain’s Prince Andrew as an unofficial door opener, has another close relationship with a member of royalty. This one lives in the Middle East, and executives at Rowland’s Banque Havilland referred to him as “the Boss.”
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Iraq devalues currency by a fifth as oil-price collapse hits; Revenues in Opec’s second-largest crude producer have been halved by price crash
Chloe Cornish – FT
Iraq has devalued its local currency by a fifth as it battles a deep financial crisis triggered by the collapse in the global oil price.
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Brexit

Brinkmanship or Bluster? On Brexit and Pandemic, Boris Johnson Leaves It Late; Critics say the British prime minister’s penchant for last-minute decisions has complicated the handling of the coronavirus and narrowed the window for scrutiny of any trade deal with the E.U.
Mark Landler and Stephen Castle – NY Times
Prime Minister Boris Johnson’s 11th-hour reversal on a Christmas lockdown on Saturday so rattled Britain that it managed to overshadow the other down-to-the-wire drama he was staging: the trade negotiations in Brussels between his country and the European Union.
/nyti.ms/37yloq5

Britain digs heels in as deadline looms on post-Brexit trade talks
Kate Abnett, Elizabeth Piper – Reuters
Britain reiterated on Saturday that it would prefer to leave the European Union with no trade deal rather than compromise its independence while there was no word from Brussels on whether progress had been made after a crucial day of talks.
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Britons scramble for residency in Spain and Portugal ahead of Brexit
Victoria Waldersee, Isla Binnie – Reuters
In October, Michelle Jones and her husband Gary boarded a ferry in England for a new life in Spain. Had they left it beyond Britain’s period of transition out of the European Union, things would have been much more complicated.
/reut.rs/38sd4ay

U.K. Confronts Threat of Food Crisis as Virus Blocks Trade
Alex Morales, Christopher Jasper, Siddharth Vikram Philip, and Lizzy Burden – Bloomberg
‘This is the nightmare before Christmas,’ food group says; Trucks line up at Dover crossing waiting for ferries to France
The U.K. confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus, offering Britain a preview of the border chaos to come in the absence of a Brexit deal.
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Miscellaneous

It Always Pays to Take Sabbaticals and Vacations; A Citigroup perk for its employees isn’t just benevolent. It prevents burnout and boosts productivity.
Sarah Green Carmichael – Bloomberg
No sooner had Citigroup announced its new sabbatical policy — 12 weeks at 25% pay for employees who’d been at the bank at least five years — than the debate erupted: In the highly competitive world of finance, would it be a career-killer to take advantage of that kind of deal? I’m not surprised some people asked. In 2018, the average American full-time employee earned 23 paid days off a year, but only used 17 of them, according to a study funded by the nonprofit U.S. Travel Association using data from the Bureau of Labor Statistics and Bureau of Economic Analysis.
/bloom.bg/2KJlMcx

The Work-From-Home Boom Is Here to Stay. Get Ready for Pay Cuts; White-collar workers are taking advantage of a newfound flexibility to leave expensive coastal cities, even as companies move to “localize” their pay.
Noah Buhayar – Bloomberg
Rachel Musiker was on maternity leave, stuck in a two-bedroom basement apartment with a newborn, when Covid-19 started spreading in New York City. Her husband, who works in the insurance industry, was still commuting on the subway, so she started making him shower before holding the baby. “It was just starting to feel unsafe to even go for walks,” Musiker says. So, on March 14, they packed a few bags and drove to Rochester, N.Y.
/bloom.bg/3mA1lfm

Time spent in the pub is a wise investment; Covid homeworking makes it harder to build bonds and network with colleagues
Sarah O’Connor – FT
When I joined the Financial Times as a trainee in 2007, I spent a lot of time learning about credit default swaps and a similar amount of time in the pub. The CDS knowledge proved useful in the ensuing financial crisis, but 13 years later, I am glad of the hours spent in the pub too.
/on.ft.com/2KioINs

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Past JLN Newsletters

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CME to permanently close most trading pits

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Americans Can’t Get Enough of the Stock Market

Americans Can’t Get Enough of the Stock Market

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