Let’s Go Get High On Hemp!
Thom Thompson – John Lothian News
“Hemp processors have reportedly been buying excess flower and distillate currently on the market to make Delta-8 THC.” Hemp Today, March 29, 2021
Will transforming hemp-based CBD into mildly psychoaffective Delta-8 THC save industrial hemp production? It’s complicated.
The common wisdom is that a person does not get high smoking industrial hemp leaves, stems or flowers. We have been following news reports, including those from PanXchange’s monthly benchmark reports, about the growing interest in smokable hemp flower. While the hemp flower, particularly from specialty strains, is known to carry heavy concentrations of non-psychotropic CBD, it turns out that a lot of the demand for smokable hemp flower is associated with the practice of coating it with Delta-8 THC.
Marijuana, industrial hemp’s popular sibling, distinguishes itself from industrial hemp by containing at least 0.3% Delta-9 THC. The presence of sufficient Delta-9 THC makes marijuana a controlled substance. For the most part, laws don’t mention Delta-8 THC. As you might expect, Delta-8 and -9 THC are chemically similar.
To read the rest of this story, go here.
Hits & Takes
John Lothian & JLN Staff
Happy April 1st, or April Fool’s Day. No one has listed vibranium futures, which I still think would be a great April Fool’s joke. Here is the best one from the JLN team’s search, the newest in police dogs, Small Area Evacuation Dogs.
Billy Assimos, the manager of Ceres Cafe in the lobby of the CBOT Building for 26 years, announced his retirement to JLN on Wednesday. He is ending his career in financial district restauranteering that began when he was 6 years old in 1964 when he would peel potatoes for Orlando’s, his father’s restaurant at the corner of Wells and Van Buren streets.
I first met Billy when he worked for his father and I was 17 and working as Tom Cashman’s driver and I would join Tom and several traders for breakfast at a big round table at Orlando’s. Our college years would intersect at Purdue University in West Lafayette, Indiana, where Billy was a senior when I was a freshman and where his father George played college football.
Assimos was a constant presence at Ceres at the CBOT Building, as the restaurant served as a catering venue for the building and Ceres hosted many corporate events. In fact, John Lothian News profiled Assimos in 2016 and gave him the moniker, “The Face of Ceres.” It was our most read story of 2016.
Ceres is famous for its stiff drinks, four ounces of booze in every drink. This boozy tradition was started by Jack Bolling, who owned the Sign of the Trader bar that preceded Ceres in the CBOT Building space and wanted to make his mark. The Sign of the Trader did more cash bar business than any bar in Chicago back in the day. In 1986, Bolling sold his stake to Lou Bournakis, who is 95 and still going strong.
Assimos was at one time a trader, but said he made more money from his memberships than from trading and gave up pit trading to take over managing Ceres. He and his wife hope to return to traveling as soon as the pandemic allows. All the JLN team wishes Billy well.
Steptow, GIR and Lexology are holding a webinar on Thursday, April, 8, 2021 from 1:00 p.m. – 2:00 p.m. ET on “Navigating the Cryptocurrency Enforcement Framework from USDOJ and Regulators – Domestically and Abroad.” You can register HERE.
The latest research from the New York Stock Exchange examines NYSE opening auction volume growth and order entry behavior. It says buyers and sellers are meeting earlier in the NYSE opening auction and key points include: the opening auction remains a key liquidity event across sectors, opening auction share of volume has grown the most in some sectors (e.g., health care), which have seen their share of market volume fall. Also, auction volume is pairing up earlier in the morning, providing a valuable liquidity indicator to the market.
Here are the upcoming product launches by the CME Group on Globex: Ukrainian Wheat (Platts) Futures and Options starts trading on April 11, E-mini Nasdaq-100 Monday and Wednesday Options also on April 11, and Freight Route TC18 (Baltic) Futures begin on April 25. Also, Freight Route Liquefied Petroleum Gas (BLPG3) (Baltic) Futures start trading on April 25 and Micro Bitcoin Futures on May 2.
EEX Group is holding a digital conference with the theme of “Building Markets Together 2021,” on April 15, 2021, 6:00 a.m. – 11:30 a.m CT.
CME Group is looking for an employee communications manager for their Chicago office.
The World Federation of Exchanges has published a research on global circuit breaker practices. This paper, the first of a two-part series, examines and analyses the kind of circuit breakers and other safeguards that are most prevalent among exchanges today and how they were used during the recent COVID-19 related events.
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
I have opened a small brokerage account on the trading app Public to join the stock trading game gang. More on this to come.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Boy, everyone’s trying to make a cryptocurrency these days. The children’s television show, “Teletubbies” are releasing a cryptocurrency – not really, April Fool’s! The company that owns the Teletubbies intellectual property, WildBrain, announced that through the power of “HugTech,” the fake cryptocurrency “employs cutting-edge cryptographology to convey the inherent value of Big Hugs! in the form of exchangeable TubbyCoin BigHugs! tokens.” To “mine” these “tokens,” users on social media must write a post to someone they know who “needs a hug,” and that post must be accompanied with the hashtag, “#TubbyCoin.” The fake announcement has some truth to it, however — WildBrain says that they are donating $5,000 to the charity Kids Help Phone, and will add one dollar to their donation for every #TubbyCoin that is shared on social media, up to a maximum of $10,000. I’ve seen a lot of crypto-related hoaxes in my day, but this one is by far the funniest.~MR
JLN Takes ‘A Deeper Dive into the NYSE Group Retail Liquidity Programs’ Research Report with Kevin Tyrrell
Kevin Tyrrell is the head of research for NYSE. He and his team of researchers and economists were intrigued by the market activity during an unprecedented surge in the price of GameStop shares during January 25-29, 2021, and they wanted to see how different OTC trading platforms responded to the order flow, including NYSE’s Retail Price Improvement (RLP) programs.
We cannot afford not to vaccinate the world; ‘If governments have to choose between jabbing their voters or doing the right thing, we know what choice they’ll make’
Simon Kuper – FT
In Soweto, South Africa, 20 years ago, the roadsides were lined with advertising boards for funeral companies: “Motaung Funeral Directors – We Salute the Spirit of Ubuntu!” You could choose 21st Century Funeral Brokers or give your loved one a “Rasta” burial. Drugs to save people with HIV already existed at the time; unfortunately, poorer countries couldn’t afford them, and millions kept dying.
*****We are brothers and sisters and must take care of each other.~JJL
Covid Isn’t Over, and the Next Wave May Be Worse; It’s way too early to talk about the coronavirus in the past tense, even with more widespread vaccinations. The worst outbreaks are accelerating in places least equipped to deal with them.
David Fickling – Bloomberg
With vaccines spreading through rich countries at gathering speed and lockdown restrictions weakening with the spring sunshine, it’s tempting to believe that the long nightmare of Covid-19 is finally ending. In the U.K., 58% of the adult population has received at least one dose of vaccine. In the U.S., President Joe Biden has doubled an original goal of administering 100 million shots in his first 100 days in office, which would bring the total to 200 million by the end of April. On Google, the search term “after Covid” has been getting more interest than “Covid symptoms” for the past month, suggesting the world is thinking more about what life will be like when things return to normal.
*****Watch the all the numbers.~JJL
PE groups raise more than $20bn from loan investors to fund dividends; Payouts through such deals reach record quarterly high after vigorous investor demand
Joe Rennison – FT
Private equity groups including Ares and Golden Gate Capital have raised more than $20bn in the US leveraged loan market through the companies they own to award themselves a bumper payday.
*****Something in my gut says this sounds like a Ponzi scheme of a different stripe.~JJL
Hundred Trillion Dollar Non-Fungible Fish Token (NFFT) Saves The Global Economy
Z/Yen, the City of London’s leading commercial think tank, has just issued a non-fungible token in order to save the global economy. A non-fungible token (NFT) is a unit of data on a distributed ledger that represents some unique item or portion of an item. In the case of many NFTs, they represent part of a digital item, e.g. 1/1,000,000th of a photo or work of art. ‘Fungible’ means each unit is interchangeable. For example, a unit of a currency or cryptocurrency is fungible. ‘Non-fungible’ means the token represents a specific item or portion of an item.
*****There is something fishy about this foolish early April story.~JJL
If People Aren’t Bored Anymore, What Happens to the Stock Market? Latest round of stimulus checks hasn’t translated into retail stock purchases, partly because people are starting to have better things to do
Jon Sindreu – WSJ
Many on Wall Street turn to the “boredom market hypothesis” to explain the stunning rally of the past year: Bereft of travel and other pursuits, stimulus-check recipients gambled on hot stocks ranging from GameStop to electric-vehicle startups. As economies reopen, investors will need to grapple with the consequences of more people spending their checks outdoors.
*****I am still bored.~JJL
Wednesday’s Top Three
The most-read story on Wednesday was the Wall Street Journal’s highly informative What Is a Total Return Swap and How did Archegos Capital Use It? The second most popular was from Investor’s Business Daily, ‘No High-Fives Rule” Keeps Tastytrade’s CEO Grounded. And the third most read was another Wall Street Journal story in Archegos, Archegos’ Collapse Is a Wakeup Call for Regulators.
202,162,336 pages viewed; 25,549 pages; 231,293 edits
|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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A Traditional Wall Street Advantage Is Suddenly Being Threatened; It has been close to impossible for regular people to buy shares at IPO pricing. Now that is changing.
Charlie Wells, Katharine Gemmell, and Suzanne Woolley – Bloomberg
It’s getting easier for regular people to invest in what was once one of Wall Street’s most exclusive domains: an initial public offering. Trading startups Robinhood Markets and Social Finance are looking to offer clients the chance to buy IPO shares early, instead of after they hit the market. Companies planning to go public — like London-based delivery app Deliveroo, which debuted Wednesday — are giving customers access to pre-IPO stock. And fast-growing blank-check firms known as SPACs are a back-door way for some individual investors to get in on an IPO.
From Tokyo to Bordeaux — the future of work takes shape; Lockdown easing will revive big cities but cheaper places are already wooing flexible workers
Janina Conboye, Alice Kantor, Guy Chazan, Claire Bushey and Kana Inagaki – FT
At Irish software company 3D Issue, employees work a four-day week. Paul McNulty, its founder, says the policy helps attract local talent. Since the pandemic began last year, the company, based in the north-west county of Donegal, about 140 miles from Dublin, is having to compete with the capital’s Big Tech groups for new hires.
Archegos Blowup Puts Spotlight on Gaps in Swap Regulation; Critics say swaps contracts used by the firm have long been used to avoid SEC’s disclosure rules
Alexander Osipovich and David Benoit – WSJ
The blowup of Archegos Capital Management is spurring calls for tougher regulation of the shadowy swap trades that fueled billions of dollars of losses at global investment banks. Former regulators and financial-reform advocates say one rule change, in particular, could have prevented the debacle: requiring greater disclosures of the bets that investors such as Archegos place on companies using swaps.
Finally, Progress on Finance: Beyond Brexit
Lizzy Burden – Bloomberg
Taking their first step since Brexit to repair the rupture to banking and trade, the U.K. and the European Union agreed on a new forum on cross-border financial market regulation. Some Brussels officials said securing a common framework could help unlock equivalence talks. The news lifted the pound.
Killing Off Libor Gets Real for Banks as Key Milestone Reached
William Shaw, Silla Brush, and Tasos Vossos – Bloomberg
New bonds and loans pegged to Libor must cease from Thursday; BOE is increasing scrutiny, says bonuses could be at risk
The U.K.’s efforts to disentangle itself from sterling Libor by year-end just went up a gear. Starting Thursday, firms should stop issuing new loans, bonds and securitizations tied to the discredited benchmark, according to the Bank of England. It’s ramped up the pressure in recent days, warning bankers that continued use is a risk for business and could cost them their bonuses. mThe process will be closely watched in the U.S. where firms have until year-end at the very latest to cease issuing any new Libor products. Britain’s cutoff will offer a test case about how to gradually phase out a rate that still underpins hundreds of trillions of dollars of assets around the world.
Yellen Signals Scrutinizing Hedge Funds a Renewed FSOC Focus
Daniel Avis and Robert Schmidt – Bloomberg
She says council has re-established group to study firms; Pandemic showed funds’ leverage can increase stress, she says
President Joe Biden’s council of financial regulators signaled a sharpened focus on hedge funds and whether their trading poses dangers to markets. Treasury Secretary Janet Yellen, speaking at a Wednesday meeting of the Financial Stability Oversight Council, said the group has revived a task force on hedge funds so agencies can better “share data, identify risks and work to strengthen our financial system.” The council was briefed in a separate private meeting on how the funds performed during the Covid-19 crisis, she said, adding that their use of borrowed money added to instability last year.
How U.K. Banks Plan to Entice Workers Back Into the Office
Stefania Spezzati – Bloomberg
Goldman Sachs invited staff to return on day lockdown eased; Standard Chartered is embracing working from anywhere
As the U.K. inches out of its third Covid lockdown and leads the way in vaccinations, some financial firms are starting to entice employees back to deserted offices. Others are doubling down on the lure of living rooms. Goldman Sachs Group Inc. invited London employees back starting March 29, the day the U.K.’s blanket “stay home” mandate was lifted. Standard Chartered Plc is embracing a hybrid working model, mapping out strategies to keep workers productive at home.
Investment Firm’s Collapse Put Unseen Risks on Full Display; Archegos Capital Management’s use of swaps helped conceal its exposure to huge blocks of shares but showed once again how lightly regulated derivatives can shake the financial system.
Matt Phillips – NY Times
After the implosion of a little-known investment firm saddled banks around the world with billions of dollars in losses last week, one big question is being asked all over Wall Street: How did they let this happen? The answer may stem from the way the firm, Archegos Capital Management, with ample assistance from at least half a dozen banks, made bets on stocks without actually owning them.
Meme Stocks, NFTs, Tech Rotation Dominate Crazy Quarter on Wall Street; Investors big and small showed no fear to start 2021
Akane Otani – WSJ
Financial markets went into overdrive in the first quarter of the year. Meme stocks such as GameStop Corp. surged. Celebrities dived into blank-check companies. Christie’s auctioned off a nonfungible token attached to a digital image for $69 million. And just before the quarter’s end, a fire sale of stocks that Archegos Capital Management had bet on caused well-known companies like ViacomCBS Inc. and Discovery Inc. to tumble.
The World Federation of Exchanges Publishes Research on Global Circuit Breaker Practices
The World Federation of Exchanges
The World Federation of Exchanges (“The WFE”), the global industry group for exchanges and CCPs, today published a research paper titled ‘Circuit breakers and other market safeguards,’ as part of the industry’s work on systemic resilience and the structures that support market integrity. This paper, the first of a two-part series, examines and analyses the kind of circuit breakers and other safeguards that are most prevalent among exchanges today and how they were used during the recent COVID-19 related events. The analysis focuses on the equity markets, covering both cash equities and equity derivatives, and reflects exchanges’ views on the topic over the period from June to November 2020, when the survey was conducted.
China’s Commodities Binge Makes America’s Future More Expensive; The U.S. spending plan faces a big problem: Beijing got to all the raw materials first.
Jack Farchy, Alfred, Cang, Mark Burton – Bloomberg
Fresh from passing a $1.9 trillion stimulus bill, U.S. President Joe Biden on Wednesday turned his attention to a similarly vast package of investment in infrastructure, and that means the U.S. is going to need more commodities. There’s just one problem: China.
Archegos debacle reveals hidden risk of banks’ lucrative swaps business; Derivatives that blew up Hwang family office were growing source of revenue for Wall Street
Robert Armstrong – FT
The Archegos Capital debacle has exposed the hidden risks of the lucrative but opaque equity derivatives business through which banks empower hedge funds to make outsize bets on stocks and related assets. The soured wagers made by Bill Hwang’s family office have triggered significant losses at Credit Suisse and Nomura, underscoring how these tools can cause a chain reaction that cascades across financial markets.
Banks must act to control fraud epidemic
Don’t think you are too clever to be conned
Paul Lewis – FT
An epidemic is sweeping the UK. Laying low the old and vulnerable, damaging healthy adults for life and undermining our belief in the systems that are supposed to protect us. It is caused not by a few strands of RNA, but by an intelligent life form. Clever, resourceful and agile, it worms its way into our brains, distorts our perception of reality and makes us pleased to give our money to thieves.
Family Offices Like Archegos Take Big Risks Like Hedge Funds; Shift in behavior at these below-the-radar institutions has raised concerns on Wall Street
Gregory Zuckerman – WSJ
Enormous losses at Archegos Capital Management have cast a rare spotlight on the growing influence of below-the-radar institutions around the globe called family offices. These firms, which manage huge piles of wealth for individuals or families, are proving to be increasingly important to the financial system. Just 121 of the largest single-family offices represent an estimated net worth of $142.4 billion, according to a report last year by UBS Securities. Sixty-nine percent of these offices were established since 2000, the report found.
The Pandemic’s Wrongest Man; In a crowded field of wrongness, one person stands out: Alex Berenson.
Derek Thompson – The Atlantic
The pandemic has made fools of many forecasters. Just about all of the predictions whiffed. Anthony Fauci was wrong about masks. California was wrong about the outdoors. New York was wrong about the subways. I was wrong about the necessary cost of pandemic relief. And the Trump White House was wrong about almost everything else. In this crowded field of wrongness, one voice stands out. The voice of Alex Berenson: the former New York Times reporter, Yale-educated novelist, avid tweeter, online essayist, and all-around pandemic gadfly. Berenson has been serving up COVID-19 hot takes for the past year, blithely predicting that the United States would not reach 500,000 deaths (we’ve surpassed 550,000) and arguing that cloth and surgical masks can’t protect against the coronavirus (yes, they can).
SEC Opens Probe Into Archegos Trades That Triggered Rout
Matt Robinson and Benjamin Bain – Bloomberg
Review is preliminary, follows banks’ liquidation of positions; Regulator’s inquiry may not lead to allegations of misconduct
The U.S. Securities and Exchange Commission opened a preliminary investigation into Bill Hwang over his leveraged trades that have roiled Wall Street. The SEC started the civil probe in recent days after Hwang’s Archegos Capital Management made a series of wrong-way wagers that prompted brokers to liquidate his positions, said a person familiar with the matter, who asked not to be named because the inquiry isn’t public. The examination is in its early stages and is being led by the asset-management group in the SEC’s enforcement division.
Credit Suisse Shareholder Says Archegos Is ‘Wake-Up Call’
Marion Halftermeyer and Jonathan Ferro – Bloomberg
Harris Associates CIO David Herro speaks on Bloomberg TV; Harris is one of the Swiss lender’s biggest shareholders
David Herro said Credit Suisse Group AG’s expected losses from the Archegos Capital crisis should lead to sweeping changes to its culture and oversight practices.
Women in Finance : Supurna VedBrat : Being on point
Lynn Strongin Dodds – Best Execution
Supurna VedBrat, Global Head of Trading at BlackRock, talks to Lynn Strongin Dodds about strategic planning, diversity of thought and transferable skillsets
Although Supurna VedBrat, Global Head of Trading at BlackRock, did not anticipate a Covid-19 event she had the wealth of experience, emotional intelligence and communication skills to not only help navigate her team through the volatility of the last year but also develop a roadmap for the future.
Pfizer Shot Remains More Than 91% Effective After Six Months
Robert Langreth – Bloomberg
Company releases long-term follow-up data from phase 3 trial; Covid vaccination stopped almost all cases of severe illness
Pfizer Inc.’s Covid-19 vaccine remained highly effective after six months, according to new long-term results that the company said could be used to seek an expansion of its regulatory status.
Canada’s Ontario Returns to Lockdown to Slow Virus, CBC Says
Zoe Ma – Bloomberg
The restrictions start on Saturday and will last for 28 days; The goal is to slow the growing number of Covid-19 cases
The Canadian province of Ontario will return to a lockdown on Saturday, widening restrictions on stores, gyms, restaurants and hair salons for 28 days in an effort to get Covid-19 under control, CBC News reported, citing multiple sources. The new rules to be announced by Ontario Premier Doug Ford on Thursday are intended to counter coronavirus’s spread in Canada’s most populous province, which includes the capital city of Ottawa, CBC said. The restrictions would not be as tight as the province-wide lockdown that was imposed in December, the sources told CBC.
J&J Vaccine Manufacturing Error Affects 15 Million Doses
Josh Wingrove, Riley Griffin, and Emma Court – Bloomberg
Johnson & Johnson shots key to accelerating vaccine supply; Astra vaccine ingredient was mixed in by accident, NYT says
A manufacturing error at a plant involved in Covid-19 vaccine production affected 15 million doses worth of an ingredient for Johnson & Johnson’s vaccine, according to two people familiar with the matter, though the company downplayed the situation and said it met its most recent vaccine delivery target.
EU Review of Astra Vaccine Risks Finds 246 U.K. Adverse Events
James Paton and Naomi Kresge – Bloomberg
Safety committee will issue updated recommendation next week; AstraZeneca shot’s benefits still outweigh its risks, EMA says
The European Union’s drugs regulator said a link between AstraZeneca Plc’s Covid-19 vaccine and a rare type of blood clot is possible, identifying at least 62 cases of the condition while insisting the shot’s benefits still outweigh its risks. The comments further cloud the picture around the vaccine after Germany restricted it to older people this week amid growing concerns about side effects. That could slow Europe’s already lagging immunization program as virus cases surge anew.
J&J sticks to vaccine targets after batch ruined in factory error; Drugmaker reaffirms commitment to deliver 100m jabs by end of May despite production mix-up
Peter Wells – FT
Johnson & Johnson said that it still expected to meet its vaccine production targets despite quality control problems at one of its supplier’s plants that ruined a batch of its single-shot Covid-19 jabs.
Pfizer-BioNTech Covid-19 Vaccine Protects for Six Months, Companies Say; The companies provided an update on the durability of the shot’s response based on a continuing analysis of the late-stage trial
Jared S. Hopkins – WSJ
The Covid-19 vaccine from Pfizer Inc. PFE 0.33% and BioNTech SE BNTX 4.55% is highly effective at protecting against symptomatic Covid-19 up to six months after the second dose, the companies said. The findings, released Thursday, emerged from a continuing review of how volunteers in the shot’s late-stage trial were faring.
Lessons From the Calculated Risk Behind U.K.’s Covid-19 Vaccine Rollout; With limited doses and soaring infections, British officials ripped up the rule book and delayed second shots
Max Colchester and Jason Douglas – WSJ
The U.K.’s bold call to delay giving people a second dose of a Covid-19 vaccine has put it out in front in the race to inoculate the world against the disease. Behind that decision: a group of 16 scientists who advocated a controversial move to overrule some vaccine manufacturers’ guidelines in order to get more first doses to more people.
Factory Mix-Up Ruins Up to 15 Million Vaccine Doses From Johnson & Johnson; A manufacturing subcontractor in Baltimore mixed ingredients from the coronavirus vaccines of Johnson & Johnson and AstraZeneca, delaying U.S. shipments of the “one-and-done” shot.
Sharon LaFraniere and Noah Weiland – NY Times
Workers at a plant in Baltimore manufacturing two coronavirus vaccines accidentally conflated the ingredients several weeks ago, contaminating up to 15 million doses of Johnson & Johnson’s vaccine and forcing regulators to delay authorization of the plant’s production lines.
The Push to Vaccinate 20,000 Holocaust Survivors in New York; One survivor who got her vaccine, Eva Rose, 96, said the last year has been “lousy,” but added: “I am still here, thank God.”
Liam Stack – NY Times
A year spent hiding at home from the coronavirus has given Anne Bertolino, 96, a lot of time to dwell on the past: the anti-Semitic abuse she suffered on the streets of Hamburg as a child; the grandparents who pushed for her and her sister to leave the country for their own safety; and her mother, a widow who was killed in Auschwitz.
Virus Variants Can Infect Mice, Scientists Report; Infected rodents pose no immediate danger to humans, but the research suggests that mutations are helping the coronavirus expand its range of potential hosts.
Apoorva Mandavilli – NY Times
Bats, humans, monkeys, minks, big cats and big apes — the coronavirus can make a home in many different animals. But now the list of potential hosts has expanded to include mice, according to an unnerving new study. Infected rodents pose no immediate risk to people, even in cities like London and New York, where they are ubiquitous and unwelcome occupants of subway stations, basements and backyards.
Thousands of cases of a worrying variant have been reported in the US. These states have the highest numbers
Christina Maxouris, CNN
Thousands of cases of the B.1.1.7 variant have been reported across the US, and experts fear the strain may fuel another Covid-19 surge as states race to vaccinate more residents. The variant, first spotted in the UK, is already wreaking havoc in parts of Europe and health leaders fear that if Americans aren’t careful now, the US could be next.
Exchanges, OTC and Clearing
South Africa Outperforms on Female Directors, With Work to Do
Adelaide Changole – Bloomberg
Johannesburg stocks beat G20 average for women on boards; Exchange targets more progress by requiring gender disclosure
South Africa’s push for female empowerment has led to an outperformance against emerging-market peers when measured by gender diversity in listed company boards, along with a realization that much more needs to be done to pursue equality.
CME Globex Notices: March 29, 2021
Critical System Updates
GLink Network Infrastructure Upgrade at Aurora Co-Location Facility – April 10
CME FX Link Enhancements – May 2
CME FX Link Enhancements: Drop Copy Impact – May 2
iLink 3 SBE Schema Update – May 16
SGX, Enterprise Singapore, and E-Steel announce inaugural Singapore International Ferrous Week
Hybrid event will take place virtually from 12 to 15 July 2021, with select in-person events in Singapore; SIFW’s partners include Aspermont Media, Fastmarkets, S&P Global Platts and TradeWinds
Singapore Exchange (SGX), Enterprise Singapore (ESG) and E-Steel will jointly organise the first-ever Singapore International Ferrous Week (SIFW), bringing participants in the global ferrous ecosystem together to explore partnerships and growth opportunities in the wake of the ongoing COVID-19 pandemic.
Trading Overview in FY2020 & March 2021; Japan Exchange Group released Trading Overview in FY2020 & March 2021.
Cash Equity Market; In FY2020, daily average trading value for the TSE 1st Section reached JPY 2.8091 trillion; In the ETF market, trading value was JPY 68.8180 trillion (daily average: JPY 280.9 billion), the second highest on record; In March 2021, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 3.4688 trillion; The daily average trading value for the ETF market was JPY296.6 billion; Derivatives Market; In FY2020, total derivatives trading volume was 382,771,145 contract; In FY2020, total derivatives trading value reached JPY 2,777 trillion. And trading value for equity index derivatives was JPY 1,636 trillion, the second highest on record.
The Spanish Stock Market Trades 35.2 Billion Euros In March, Up 28% From The Previous Month
The Spanish stock market traded 35.2 billion euros in Equities in March, up 28% from February and down 36.6% from the same month last year. The number of trades was 4.9 million, a 16.4% increase from the preceding month and down 35.7% year on year.
Boerse Stuttgart Records March Turnover Of Around EUR 10.4 Billion – Investment Products And Bonds Show Increase In Trading Volume Compared To The Previous Month
Based on the order book statistics, Boerse Stuttgart generated turnover of around EUR 10,4 billion in March 2021 – so the turnover was almost on a par with the previous month.
Montréal Exchange Interest Rate Derivative Trading Ceases At 13:30 Today – Exchange’s Markets Closed April 2
GPW Awards 2020 Capital Market Leaders
The Stock Market Review Gala 2020 was hosted by Marek Dietl, President of the GPW Management Board. The awards were also presented by Mariusz Bienkowski, President of the Management Board of BondSpot, and Zbigniew Minda, President of the Management Board of GPW Benchmark. The awards went to institutions which reported the best performance in 2020 and made a tangible contribution to the development of the Polish capital market.
SET Hosts 32nd ASEAN Exchanges CEOs Meeting To Step Up Efforts To Develop Regional Sustainable Capital Market
The Stock Exchange of Thailand (SET) organized the 32nd ASEAN Exchanges CEOs virtual meeting on March 30, 2021. CEOs of seven ASEAN Exchanges from six countries namely Bursa Malaysia, Hanoi Stock Exchange, Hochiminh Stock Exchange, Indonesia Stock Exchange, Philippine Stock Exchange, SET and Singapore Exchange collaboratively discussed strengthening co-operation on cross-border products, working together to enhance sustainability in the capital markets, and continuing its joint marketing of ASEAN activities to uplift ASEAN Exchanges to catch global investors’ eyes.
HKEX Proposes Easing Listing Rules to Lure More Overseas Firms
Kiuyan Wong – Bloomberg
Hong Kong’s stock exchange proposed easing listing requirements to attract more overseas firms to sell shares in the financial hub. In a consultation paper released late Wednesday, Hong Kong Exchanges & Clearing Ltd. proposed broadening secondary listings to all companies from now limiting them to high growth and innovative firms as long as they have one vote per share. It wants to lower the minimum market capitalization to HK$3 billion ($386 million), given a listing track record of five years. That’s down from HK$40 billion, or HK$10 billion with revenue of HK$1 billion.
EGX Passes Arab Federation Of Exchanges Chairmanship To Tadawul
The Egyptian Exchange (EGX) passed the chairmanship of the Arab Federation of Exchanges (AFE) to Saudi Arabia Stock Market “Tadawul” for the year 2021, during the AFE’s annual meeting hosted virtually by Saudi Arabia.
Refinitiv Launches Next-Generation Intelligent Content Management Capability for Wealth Management Firms; New capability streamlines advisory process by efficiently connecting in-house research and investment strategy teams with advisors.
Refinitiv announced the launch of House Views and Market Insights (HVMI), its next generation intelligent content management capability for wealth management firms. HVMI enables the efficient distribution of investment recommendations and research by connecting product and content manufacturers teams with wealth advisors.
Atos shares tumble after accounting errors disclosed; French IT group says ‘matters’ uncovered by auditors in US units relate to revenue recognition
David Keohane – FT
French IT group Atos said on Thursday that auditors had discovered several accounting errors in two of its US units, sending shares in the company tumbling more than 20 per cent.
Capitolis secures additional $90 million in latest funding round; The latest funding round took Capitolis’ total funding to $170 million to date and was led by venture capital firm Andreessen Horowitz.
Annabel Smith – The Trade
New York-based foreign exchange novation platform provider Capitolis has secured $90 million in a Series C funding round from the likes of JP Morgan, Citi, and State Street. Its latest funding round was led by venture capital firm Andreessen Horowitz and took Capitolis’ total funding to date to $170 million.
EU’s Fastest Growing Fintech Hub Sees ‘Evolutionary’ Shift Away From Banks
Milda Seputyte – Bloomberg
Lithuania, the European Union’s fastest-growing fintech hub, is seeing an “evolutionary” shift away from traditional banks with surging transactions for e-money and payment companies. The Baltic country, whose financial industry is dominated by Nordic lenders like SEB Bankas AB and Swedbank AB, joined the global push to shakeup traditional banking four years ago by offering simplified, fast licensing covering all 27 EU members. The initiative has taken off: Lithuania ranks fourth in the world for fintech ecosystems. Outgoing Central bank Governor Vitas Vasiliauskas said fintech transactions gained a larger share last year, though he acknowledges money-laundering risks after scandals in neighboring Latvia and Estonia involving illicit cash from the former Soviet Union.
Goldman Sachs Is the Latest to Join the Bitcoin Stampede
Liz Moyer – Barron’s
Add Goldman Sachs to the list of companies putting Bitcoin and cryptocurrencies on the front burner. The investment bank soon will help wealthy clients invest in digital assets, creating a new Digital Assets Group within its private wealth management division. Mary Rich was named as global head of the new unit, according to a memo to employees released Wednesday and reviewed by Barron’s.
Goldman Close to Offering Bitcoin to Wealth Management Clients
Goldman Sachs Group Inc. is close to offering investment vehicles for Bitcoin and other digital assets to clients of its private wealth management unit.
Uphold to Acquire U.S. broker dealer JNK Securities after Regulatory Approval; One of the first crypto firms to own a U.S. broker dealer approved to offer fractional equities on an omnibus basis to retail investors
Uphold, a leading digital money platform serving more than five million customers in more than 150 countries, today announces the regulatory approval for its acquisition of JNK Securities, a U.S. broker-dealer.
Rich Crypto Investors Going It Alone Pulls Goldman Off Sidelines
Chanyaporn Chanjaroen and Benjamin Stupples – Bloomberg
Top U.S. banks don’t offer clients direct crypto access yet; Investors expect Bitcoin to gain acceptance, reshape finance
After watching Bitcoin’s stratospheric rise from the sidelines, game developer Adam Dart wanted a piece of the action. The 29-year-old Scot who lives in Singapore reached out to a handful of local and international banks to ask about opening investment accounts to trade crypto with funds from his family’s wealth office. To his surprise, he was told that while bankers could offer their personal opinions on digital currencies, they couldn’t provide investment services.
Damien Hirst hands NFT launch to eco-platform Palm; Auction sales back on track; galleries pop up in Aspen; Russell Tovey picks works for Sotheby’s sale
Melanie Gerlis – FT
Details of Damien Hirst’s non-fungible token project are still shrouded in secrecy, but the artist has confirmed that his “drop” of blockchain-linked paintings will be on a new, more energy-efficient platform called Palm. Most NFTs have so far been issued on the ethereum platform via a minting process on the blockchain that can generate a very high level of CO2 emissions. The Art Newspaper reports that the infamous $69.3m Beeple sale at Christie’s consumed enough electricity to power more than 13 homes for a year.
IRS Lawsuit To Get Crypto Account Holder Information Signals It Is Time For Kraken Crypto Account Holders To Get Taxes In Order.
Guinevere Moore, IRS Watch – Forbes
On March 30, the Department of Justice, Tax Division, filed a petition for leave to serve a “John Doe” summons on Payward Ventures, also known as “Kraken,” requesting account information for all United States taxpayers who held accounts there with the equivalent value of $20,000 or more in cryptocurrency for any one year from 2016 through 2020. In the petition, which is styled In Re Tax Liability of John Does, Docket No. 3:21-cv-02201-JCS in the United States District Court for the Northern District of California , DOJ tax maintains that the “John Doe” summons is needed because it doesn’t know who the account holders are, Kraken does know, and there is reason to believe that Kraken account holders “may fail, or may have failed, to comply with one or more provisions of the internal revenue laws.”
Filecoin Surges 42%, Replaces Litecoin as the 9th Largest Cryptocurrency
Omkar Godbole – Coindesk
Decentralized storage network Filecoin’s FIL token has entered the list of top 10 coins on the back of increased institutional demand. FIL is trading near $217 at press time with a market capitalization of $13.72 billion, having printed a record high of $220 early Thursday, as per data source Coingecko. The cryptocurrency has surged by 42% in the past 24 hours and 150% in seven days, replacing litecoin (LTC) as the 9th largest digital asset by market capitalization. Inflows into the Grayscale Investments’ Filecoin Trust picked up the pace on Thursday, lifting the cryptocurrency higher.
Crypto Entrepreneurs Plan London IPO for NFT Investment Firm
Swetha Gopinath – Bloomberg
Jonathan Bixby and Mike Edwards have founded and taken public companies involved in cryptocurrency mining, esports and cannabis. Now, the entrepreneurs are turning their attention to another investment mania: Non-fungible tokens. The two founded NFT Investments to invest in the blockchain-minted unique digital tokens and are planning an initial public offering this year on the U.K.’s Aquis Stock Exchange, the firm said in a statement Thursday. The deal, which will value the company at 25 million pounds ($34.4 million), would create the first-ever listed firm in the sector, according to the statement. The men are striking now as NFTs have gone from a little-known corner of the digital-token market to a red-hot investment asset over the past couple of months. When a file, such as artwork, is uploaded to an NFT auction market, the unique record on a blockchain ledger can be bought and sold.
Do I need to pay tax on cryptocurrency holdings?
Lucy Warwick-Ching – FT
I put £5,000 into bitcoin in September 2019 and more recently I purchased a dogecoin. I understand that I may need to pay both income tax and capital gains tax. Is this true? If so, what steps do I need to take to ascertain my tax liability? Matthew Watkins, tax director at accountancy and business advisory firm BDO, says it is a myth that the disposal of cryptoassets falls outside the scope of UK taxation on the basis that the profit or gains arising from it are akin to gambling or lottery type winnings. This is not correct. HM Revenue & Customs published guidance in December 2019 explaining its view on how these transactions ought to be taxed. For individuals, anyone selling cryptoassets will be subject to capital gains tax (CGT) on their profits, and this will need to be reported on their self-assessment tax return.
BlackRock Has Begun Trading Bitcoin Futures
Danny Nelson – Coindesk
Investments giant BlackRock has indeed “started to dabble” in the bitcoin market, according to regulatory filings published Wednesday. A source familiar with the matter told CoinDesk the asset manager held $6.5 million in CME bitcoin futures contracts earlier this year. Those contracts had appreciated $360,457 on reporting day, according to documents reviewed by CoinDesk. The holdings represented 0.03% of BlackRock’s massive Global Allocation Fund on reporting day Jan. 31 – “very small,” the source said. (The gains represent just 0.0014%.) BlackRock’s original 37 contracts expired on March 26.
Options Market Shows Call Bias as Bitcoin Prepares for New Price High
Omkar Godbole – Coindesk
Bullishness looks to be building in the bitcoin (BTC, +0.76%) options listed on the dominant Deribit exchange, with the cryptocurrency trading just 4.6% short of a new record high. Options skew, which measures the difference between the call implied volatility and put implied volatility for all options, is creeping up, as tweeted by the options analytics platform Genesis Volatility. In plain English, that call options are again drawing greater demand or premium than puts in a sign of bullish bias. Implied volatility refers to investors’ expectations for price turbulence over a specific period and positively impacts the option’s price. Hence, an uptick in the call-put implied volatility spread is considered a sign of bullish positioning.
UK regulator brings crypto businesses under financial crime reporting obligation
Yogita Khatri – The Block
The U.K.’s Financial Conduct Authority (FCA) has extended its financial crime reporting framework to include cryptocurrency businesses. Announcing the news on Wednesday, the FCA said cryptocurrency exchange and wallet operators would have to submit an annual financial crime reporting document, known as “REP-CRIM,” from March 30, 2022. “We consider it appropriate to include cryptoasset businesses irrespective of their total annual revenue because they pose a higher inherent money laundering and terrorist financing risk,” said the FCA.
FINRA approves crypto company Uphold’s acquisition of broker-dealer JNK Securities
Aislinn Keely – The Block
After nearly three years in limbo, crypto trading platform Uphold has garnered approval from the Financial Industry Regulatory Authority (FINRA) for its acquisition of broker-dealer JNK Securities. News of the acquisition was first circulated in June 2018. The approval makes Uphold one of the first firms to own a broker-dealer that can offer equities to retail traders on an omnibus basis. An omnibus account allows a broker to manage trades for more than one person within one account since the trades are made in the broker’s name. This means that JNK clients will have access to crypto to fiat trading pairs with a degree of anonymity.
Coinbase Taps Morgan Stanley Lawyer to Head Up Enterprise Compliance
Sebastian Sinclair – Coindesk
Ahead of its public listing expected in April, U.S. cryptocurrency exchange Coinbase has hired Morgan Stanley’s global anti-money laundering counsel. According to a report by Bloomberg Law on Wednesday, Ian Rooney will head Coinbase’s enterprise compliance team to ensure a smooth run in the lead up to its direct listing that was recently pushed back from March to April. Coinbase, like other large U.S. cryptocurrency exchanges, wants to appear completely aboveboard in the eyes of regulators, particularly around sensitive areas like money laundering which is often seen as naturally suited to crypto. The addition Rooney should also be helpful as virtual asset firms face an onerous set of anti-money laundering (AML) rules courtesy of the Financial Action Task Force (FATF), with progress to be reviewed in June of this year.
How Cryptocurrency Could Inspire a New Kind of Financial Literacy
Hunter Sunrise – Worth
In the middle of a global pandemic, and the peculiar detachment of the financial markets from the economy, another oddity occurred: a sudden explosion in cryptocurrency investment. In 2020 and into 2021, trading volumes hit record daily highs and Bitcoin quadrupled as new investors flooded into the market. According to a recent study from Cornerstone Advisors, 15 percent of Americans now own cryptocurrency, half of whom invested for the first time last year.
Germany’s U.S. Envoy Urges Temporary Halt to Nord Stream Link
Birgit Jennen – Bloomberg
Beyer calls for removal of ‘roadblock’ in relations with U.S.; Pipeline subject to sanctions levied by Trump administration
Germany’s coordinator for transatlantic relations called for a temporary halt to the construction of the Nord Stream 2 gas link to Russia to give Chancellor Angela Merkel’s government time to work on resetting ties with the U.S. Peter Beyer, a member of Merkel’s Christian Democratic Union, said the nearly completed pipeline in the Baltic Sea is a “roadblock” in relations between Berlin and Washington. The project is subject to U.S. sanctions and a long-running source of friction between the two North Atlantic Treaty Organization allies.
FDR Had the Great Depression, But Biden Has Big Data; Roosevelt couldn’t tap decades of careful economic research to guide his efforts in reviving the country. He didn’t have to worry about China, either.
Noah Smith – Bloomberg
President Joe Biden’s multi-trillion dollar plans to revitalize the U.S. economy are rightfully drawing comparisons to his predecessor Franklin Delano Roosevelt. But while it’s the same goal, the two have somewhat different approaches, reflecting both the distinctive circumstances and the better data available to Biden.
EU rebuffs US concerns over carbon border tax threat; Bloc’s climate tsar says trading partners should expect the tool to be used if they do not meet required standards
Camilla Hodgson – FT
The European Union would have “no hesitation” in using a carbon border tax adjustment to protect its industries if the bloc’s trading partners put companies in the region at a disadvantage over climate targets, the EU climate tsar has said.
Biden’s infrastructure plan aims to turbocharge U.S. shift from fossil fuels; New standard would mandate renewable-energy use by utilities, while tax breaks and spending would promote climate-friendly technologies
Steven Mufson and Juliet Eilperin – Washington Post
President Biden’s infrastructure plan would turbocharge the country’s transition from fossil fuels, using the muscle and vast resources of the federal government to intervene in electricity markets, speed the growth of solar and wind energy, and foster technological breakthroughs in clean power.
Republicans seek to make vaccine passports the next battle in the pandemic culture wars
Annie Linskey, Dan Diamond and Tyler Pager – Washington Post
Republicans are opening a new front in the pandemic culture wars, attacking efforts by the Biden administration to develop guidelines for coronavirus vaccination passports that businesses can use to determine who can safely participate in activities such as flights, concerts and indoor dining.
The complicated geography of vaccine hesitancy
Philip Bump – Washington Post
In nearly every way, the news about the vaccines targeting the coronavirus is good. The vaccines are very effective at significantly reducing the worst effects of a coronavirus infection and, we learned this week, at reducing both infections and spread of the virus. It took a while for vaccine availability to ramp up, but by now many states have vastly expanded the pool of people for whom inoculations are available. The country has secured (if not yet obtained) at least twice the vaccine supply needed to inoculate every adult American.
San Diego woman sentenced for nearly $400M Ponzi scheme
A San Diego businesswoman whose Ponzi scheme bilked hundreds of people out of nearly $400 million was sentenced Wednesday to 15 years in federal prison. Gina Champion-Cain, 57, received more than the sentence recommended by prosecutors. At the sentencing, U.S. District Judge Larry Burns noted that some victims were friends she had known for years, the San Diego Union-Tribune reported.
SEC maintains intense scrutiny of non-transparent ETFs; Regulator’s concern is whether the underlying securities can be traded effectively
Jackie Noblett – FT
Active non-transparent exchange traded fund sponsors are providing reams of information to the Securities and Exchange Commission as the regulator conducts intense scrutiny of the products, which it first approved in 2019.
Who’s afraid of the big bad regulator?
Virginie O’Shea, founder, Firebrand Research via The Trade
There’s been a lot of discussion about how compliance fines continue to be viewed by the industry as “the cost of doing business” in regulatory quarters over recent months. The two GameStop hearings have repeatedly covered the topic and the EU has been abuzz with chat about governance in light of the enduring popularity of ESG. Now, I’ve already discussed the challenges related to instilling a compliance culture across a firm in a previous blog, but what do these discussions herald for the industry going forward?
ASIC bans the sale of binary options to retail clients
ASIC has made a product intervention order banning the issue and distribution of binary options to retail clients. The ban will take effect from Monday 3 May 2021 after ASIC found that binary options have resulted in and are likely to result in significant detriment to retail clients.
ASIC sues CBA for misleading conduct over monthly access fees
ASIC has commenced civil penalty proceedings in the Federal Court against the Commonwealth Bank of Australia (CBA), alleging that it charged monthly access fees to customers when it was not entitled to do so. ASIC alleges that, between 1 June 2010 and 11 September 2019, CBA incorrectly charged monthly access fees to customers who were entitled to fee waivers because they met certain criteria under their contracts with the bank. Almost $55 million in fees were charged to nearly one million customers and more than 800,000 accounts.
Anneli Tuominen to act as Interim Chair of ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, current Vice-Chair Anneli Tuominen, and Director-General at the FIN-FSA, will act as Interim Chair until the next Chair takes office. This is effective from 1 April 2021.
Proposed Rule Change to Extend the Effective Date of the Temporary Amendments set forth in SR-FINRA-2020-026 and SR-FINRA-2020-043
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to extend the expiration date of the temporary amendments initially set forth in SR-FINRA-2020-026 and subsequently extended in SR-FINRA-2020-043 (collectively, the “Temporary Qualification Examination Relief Filings”) from April 30, 2021, to June 30, 2021. FINRA does not anticipate providing any further extensions to the temporary amendments identified in this proposed rule change beyond June 30, 2021.
CFTC Charges Washington State Rancher and Feedyard with $233 Million Phantom Cattle Fraud Scheme
The Commodity Futures Trading Commission today filed a civil enforcement action in the United States District Court for the Eastern District of Washington charging Easterday Ranches, Inc., a Pasco, Washington based cattle feedyard, and Cody Easterday, co-owner and formerly president of Easterday Ranches, for engaging in fraud in connection with the sale of more than 200,000 non-existent head of cattle to a beef processor, making false statements to an exchange, and violating exchange-set position limits.
Effective date for NFA’s swap dealer capital requirements
On September 15, 2020, the CFTC adopted final rules imposing minimum capital and financial reporting requirements for swap dealers (SD) that are not subject to the rules of a prudential regulator (Covered SDs). These rules establish an October 6, 2021 compliance date. The Commodity Exchange Act requires that NFA adopt rules establishing minimum capital and other financial requirements for its Members, which are at least as stringent as the CFTC’s requirements, and to implement a program to monitor and enforce Members’ compliance with NFA’s requirements. As a result, NFA adopted and amended several rules summarized below that will also be effective October 6, 2021.
The importance of purposeful anti-money laundering controls
Speech by Mark Steward, Executive Director of Enforcement and Market Oversight, delivered at the AML & ABC Forum 2021.
Driving Privileges At Risk For Those Who Don’t Pay British Columbia Securities Commission Penalties
The British Columbia Securities Commission (BCSC or Commission) will be able to block the issuance or renewal of a driver’s licence and vehicle licences and vehicle plates to anyone who has not fully paid a BCSC-imposed sanction for investment misconduct.
Greensill Whistleblower Tips Warned German Regulator of Fraud Last Year; An internal German government report shows that authorities were scrutinizing Greensill for more than a year before it unraveled
Duncan Mavin and Julie Steinberg – WSJ
Germany’s banking regulator received a series of whistleblower tips over the past year that made “various allegations of fraud” at Greensill Bank, prompting it to demand improvements at the bank, according to an internal German government report reviewed by The Wall Street Journal.
US Financial Stability Oversight Council Meeting
On Wednesday, March 31, Secretary Yellen presided over a meeting of the Financial Stability Oversight Council (Council) via videoconference. The Dodd-Frank Wall Street Reform and Consumer Protection Act requires the Council to convene no less than quarterly, but the Council has historically convened on a more frequent basis. The meetings bring Council members together to discuss and analyze emerging market developments and financial regulatory issues. The Council is committed to conducting its business as openly and transparently as practicable, given the confidential supervisory and sensitive information at the center of its work. Consistent with the Council’s transparency policy, the Council opens its meetings to the public whenever possible.
Investing and Trading
Even Richard Branson’s SPAC Is Struggling Now; The sudden cooling off in the SPAC market could disrupt previously announced deals.
Chris Bryant – Bloomberg
Launching a special purpose acquisition company has been pretty easy with all the money sloshing around the financial system. Finding a target for the SPAC that shareholders get excited about is another matter. Billionaire entrepreneur Richard Branson knows plenty about dealmaking. Even he’s struggling now.
Miley Cyrus’s Offer Shows How Stocks Are Now Cool; The singer’s social-media followers have a chance to win $1 million in shares being given away by Cash App.
Misyrlena Egkolfopoulou – Bloomberg
Free shares have turned into coveted celebrity merch. Pop singer Miley Cyrus on Wednesday promoted $1 million worth of stocks being offered by financial payments company Square Inc.’s Cash App. Fans can enter the giveaway — timed for the 15th anniversary of the premiere of her television series Hannah Montana — by commenting on her Twitter or Instagram profiles.
SPACs Flood Spotify Venture Capitalist With Offers That He’s Rejecting
Rafaela Lindeberg – Bloomberg
Northzone’s Parson says SPAC model ‘not very interesting’; Spotify seed investor airs doubts over blank-check construct
The Swedish venture capitalist who over a decade ago ignored the skeptics and backed Spotify is now voicing skepticism toward blank check companies as he gets inundated by bids. Northzone’s Par-Jorgen Parson says he’s “been getting calls from many SPACs from all over the world wanting to buy our portfolio companies.” But as a model, the special purpose acquisition company “is not very interesting” for Northzone, he said in an interview from Stockholm.
Why the World’s Biggest Bond Market Needs a Revamp
Liz McCormick – Bloomberg
The $21 trillion Treasuries market is the bedrock of the global financial system. It’s not good when bedrock shivers, let alone shakes! But bouts of Treasuries turmoil have been happening more frequently and at times triggering large-scale interventions from the U.S. Federal Reserve. Pandemic-sparked volatility in March 2020 caused liquidity in the world’s biggest bond market to plunge to its worst since the 2008 financial crisis, sparking the Fed to go on a buying spree of Treasuries and mortgage-backed securities that peaked at more than $100 billion a day to support smooth market functioning. While that crisis passed, further shivers have created doubts about the long-touted mantra that Treasuries represent the world’s deepest and most liquid market. Treasury Secretary Janet Yellen, who was Fed chair during one market wobble, says “extreme policy interventions” are a sign that some repair work is needed.
U.S. Treasuries’ Worst Quarter Since 1980 Upended Global Markets
Greg Ritchie, Farah Elbahrawy, Vildana Hajric, and Andres Guerra Luz – Bloomberg
Dollar climbed, commodities jumped, stock manias abounded; Evidence of ‘aggressive’ U.S. outperformance: Harvey
The promised end of the pandemic draws closer with every shot in the arm. So in the first three months of 2021, traders raced to position themselves for a post-Covid world by girding for super-charged growth and higher inflation.
Reconsider your retirement plan, Vanguard says; Traditional wisdom requires an update, according to fund house research
Madison Darbyshire – FT
Investors should recalibrate their plans to draw down money from their pension portfolios in light of pandemic-induced volatility, new research has suggested. When markets fell in March 2020 at the start of Covid-19 lockdowns, retirees were facing the first significant hit to their investments after a decade-long bull run.
Lane Says Pandemic Shock Only First Step of ECB’s Challenge
Carolynn Look and Alexander Weber – Bloomberg
Chief economist says inflation outlook remains subdued; Price increases in 2021 due not constitute a ‘sustained shift’
The European Central Bank will still have more work to do to boost inflation after the pandemic as increased price pressures this year will not be sustained, chief economist Philip Lane wrote in a blog post.
Environmental, Social and Corporate Governance
The EU’s Carbon Market Is About to Enter Its Turbulent 20s; As the emissions trading system prepares for its third decade, it’s also bracing for a major price spike.
Nathaniel Bullard – Bloomberg
Europe has had a carbon market—the world’s first—for more than 15 years. In its first decade, prices did what prices do in a young market filled with uncertainty: They fluctuated. Traders entering the market in the early 2010s, however, were in for a snooze. For the first half of the last decade, the price of one EU emissions allowance, which represents one ton of carbon emissions, bounced around in a range between four and 10 euros. That’s a low price, in the sense that it cost emitters relatively little and therefore did little to change their behavior.
Clean Energy Boom Is Fueling Bubble Fears
Claire Ballentine, Justina Lee and Will Mathis – Bloomberg
The market froth propelling clean-energy technology stocks has delivered billions of dollars of trading profits to investors across the globe and led to the creation of dozens of funds designed to prosper from the surge in prices. Whether it’s electric-vehicle makers like Tesla Inc. and its lesser-known rivals, or companies such as QuantumScape Corp. that are developing next-generation lithium-ion batteries, or solar-panel manufacturers like Enphase Energy Inc., these stocks have almost all gone in one direction, and that’s higher.
Share of black employees in senior US finance roles falls despite diversity efforts; Significant growth has occurred only in the most junior positions, according to FT research
Laura Noonan and Taylor Nicole Rogers – FT
Black employees held a lower share of top US financial services jobs in 2018 than they did more than a decade earlier, according to new research by the Financial Times, underlining the shortcomings of Wall Street’s long-running efforts to improve racial diversity.
Europe’s chance to lead the green technology race; Opportunities for investors are increasing, with the region’s companies leading change
Stephanie Butcher – FT
The market consensus will tell you there is no technology sector in Europe. Sure, there is the odd global beacon in ASML, SAP or Spotify but they are “exceptions that prove the rule”. If an investor wants technology, growth and innovation they go to the US or Asia. Europe is there in the minds of many investors to provide added cyclical spice at specific points within the economic cycle.
Partner Insight: The turning point for ESG
The road to this point has been bumpy, with several stumbling blocks making it harder to implement a ‘true’ style of ESG investing in the fixed income space. One of the biggest issues is that fixed income investors do not get a seat at company AGMs, and are therefore unable to vote. At the same time, the availability of data in the fixed income space is much less transparent than in equities; it is estimated that at least a third of the bond investment universe is not currently covered by publicly available data. While being challenging, true ESG investing in this asset class is by no means impossible and does not have to be more difficult than in the stock market, according to Graeme Anderson, partner and portfolio manager at TwentyFour Asset Management. The key, he says, is to have the right building blocks, meaning the underlying data and research to inform investment decisions.
How Masayoshi Son’s ‘Money Guy’ Lex Greensill Went From Hero to Zero
Giles Turner, Lucca De Paoli, and Pavel Alpeyev – Bloomberg
SoftBank invested $1.5 billion in London-based finance firm; Greensill collapse shows Vision Fund’s ‘negative’ synergies
In February 2020, SoftBank Group Corp.’s Masayoshi Son visited Indonesia, offering to invest billions of dollars toward the development of a new capital city. Lex Greensill, at the time a favorite of Son’s, was part of the entourage. SoftBank had invested $1.5 billion in Greensill’s eponymous finance company, but in a meeting with Indonesian president Joko Widodo, Son introduced Greensill as the “money guy,” according to local TV footage.
Deutsche Bank Dodged Archegos Hit With Quick $4 Billion Sale
Steven Arons, Erik Schatzker, and Donal Griffin – Bloomberg
Firm was among those to help Bill Hwang make leveraged bets; Hedge fund Marshall Wace was among the buyers in Deutsche sale
Deutsche Bank AG sold about $4 billion of holdings seized in the implosion of Archegos Capital Management in a private deal Friday, helping it emerge unscathed from a scramble that may cost some rivals billions of dollars. The German bank executed the direct sale after Archegos defaulted on margin loans used to build up highly leveraged bets on stocks, people with knowledge of the matter said. At the time, other lenders had already started selling and the pressure was on Deutsche Bank to rid itself of the exposure or potentially get stuck with losses.
Mizuho Is Said to Face $90 Million in Possible Archegos Losses
Taiga Uranaka and Yuki Hagiwara – Bloomberg
Joins Nomura and MUFG among Japanese banks facing fallout; Unwinding of leveraged bets by U.S. investor has roiled banks
Mizuho Financial Group Inc. faces about 10 billion yen ($90 million) in potential losses tied to Bill Hwang’s Archegos Capital Management, a person with knowledge of the matter said. The Japanese lender’s U.S. unit has transactions with Archegos, the Nikkei newspaper reported earlier, without saying where it got the information.
Mizuho investigates possible losses from Archegos collapse; Bank at threat of becoming third Japanese institution caught in New York stock sell-off
Leo Lewis – FT
Mizuho is investigating whether it suffered significant losses from the collapse of Archegos Capital as it emerged that the Japanese bank had a close client relationship with the US-based family office, according to people with knowledge of the situation.
Greensill insurance mystery turns up the heat on Credit Suisse
Tom Bergin – Reuters
Credit Suisse told investors the debt in its $7.3 billion finance fund was low risk because it was insured but the bank failed to ensure the policies would pay out, two sources told Reuters.
If Your Mutual Fund Becomes an ETF, Here’s Why
Claire Ballentine – Bloomberg
Index funds emerged from the world of mutual funds in the early 1970s, and two decades later they helped create the first exchange-traded funds. Now, in the latest asset management evolution, some mutual funds are converting into ETFs in what could be the start of a trend across Wall Street. In the process, money managers embracing the new wrapper are set to accelerate the shift of assets into the already rapidly growing ETF industry.
Archegos fallout wipes over $9 billion from market value of Credit Suisse, Nomura
Investors on Wednesday tallied the fallout from Archegos Capital’s dramatic meltdown, with Nomura and Credit Suisse shares losing a collective $9 billion while heightened scrutiny of the hedge fund industry loomed.
Disaster strikes as Deliveroo becomes ‘worst IPO in London’s history’; Short sellers and bad advice both blamed as food delivery app falls more than a quarter on opening day
Tim Bradshaw and Attracta Mooney – FT
Short sellers, an unfortunate roadshow and terrible timing were all blamed as Deliveroo lost more than a quarter of its value on its first day of trading, becoming in the words of one of its bankers: “the worst IPO in London’s history”.
London deserves better than to become another Spac oddity; Transatlantic listings envy should not overshadow FCA’s consultation on blank-cheque acquisition vehicles
Bryce Elder – FT
Nothing helps change an opinion like $205bn. That’s the amount raised on US markets by special purpose acquisition companies in the three-and-a-bit years since the Financial Conduct Authority last rejected a more welcoming approach to the gambit.
Brexit reality only hitting now, EU’s Barnier says
The European Union’s former Brexit negotiator, Michel Barnier, said on Wednesday the reality of Britain’s decision to leave the bloc was only now being felt, years after the British 2016 referendum on membership.
Listing the changes that Brexit has brought since Jan. 1, when Britain ended a transition out of the bloc, Barnier said trade barriers, limits on citizens’ movement and work visas were inevitable. “For many people the real consequences of the referendum are only now starting to sink in,” Barnier told an event in Switzerland via video link from Paris. “The reality, which has become clear for all to see, is that Brexit means recreating trade barriers that had not existed for 47 years,” he said.
Brexit: Counting the cost of the Irish sea border
Emma Vardy – BBC News
It is now three months on since the UK’s separation from the EU and the greatest tension in that time has been over the creation of a brand new border within the UK – the Irish Sea border. It is part of the Northern Ireland Protocol – a contentious aspect of the Brexit deal, which introduced checks on goods crossing the Irish Sea as a compromise in order to avoid checks on the land border with the Republic of Ireland. However these checks have proved to be controversial and the protocol is opposed by Northern Ireland’s unionist parties, who see it as undermining their place in the UK.
N Ireland hospitality sector faces Brexit ‘trouble’ after lockdown
Peter Foster – FT
The Northern Ireland hospitality sector will face severe Brexit-related difficulties as it comes out of coronavirus lockdown after its suppliers in Great Britain were told they were not covered by a UK extension of the “trusted trader” scheme designed to smooth supermarkets’ supply to the region. Haulage, hospitality and food wholesale industry groups have warned of “trouble” ahead after UK government officials said hospitality was not covered by the temporary cuts to border bureaucracy for goods coming to Northern Ireland from the mainland. The controls are required under the so-called Northern Irish protocol, which was agreed alongside the Brexit deal to protect the EU single market on the island of Ireland. It means all goods travelling from Great Britain to Northern Ireland must comply with EU customs and food hygiene rules.
Trading relationships three months after Brexit
Douglas Fraser – BBC
Three months on, new trading relationships are being sought, but the disruption to European trade has been significant. Starting with fish, it extends across the food sector, and a different set of problems beset Scottish engineering firms. Smaller companies face the biggest problems with multiple consignments in one truck. And without guaranteed delivery, customer sentiment is shifting, to find more reliable trading partners. Duncan Ross is a specialist at growing biodynamic and organic herbs in a walled garden on the Black Isle, overlooking the Cromarty Firth.
UK shellfish farmers threaten legal action over ban on exports to EU
Rajeev Syal and Lisa O’Carroll – The Guardian
The environment secretary, George Eustice, is facing a threat of legal action from shellfish farmers over claims that the government has misled the industry over its post-Brexit arrangements with the EU. A solicitor representing 20 shellfish firms told the Guardian the government had shown “negligence and maladministration” and that a group action was being considered for compensation. Separately, an exporter of mussels sent a legal letter to the secretary of state saying the firm would sue for damages if the shellfish market with the EU were not opened up by September.
Re-named Brexit Party – Reform UK – announces by-election candidate
An IT consultant has been chosen to stand for the re-named Brexit Party in the Hartlepool by-election. John Prescott, 46, who previously stood for the party in Stockton, has been chosen to represent Reform UK. Dr Paul Williams has been selected as Labour’s candidate to replace Mike Hill, who resigned amid allegations of sexual harassment which he denies. Farmer Jill Mortimer will represent the Conservatives in the election which will be held on 6 May. Thelma Walker, the former Labour MP for Colne Valley, has been chosen to represent the newly formed Northern Independence Party.
Red Sox Owners Receive Investment From RedBird, LeBron James
Rob Golum – Bloomberg
Boston Red Sox owner Fenway Sports Group received an investment from RedBird Capital Partners and said a group including Los Angeles Lakers star LeBron James will become shareholders as well. Terms of the RedBird deal weren’t given, but Fenway Sports Group said Wednesday that the transaction gave the company an enterprise value of $7.35 billion. Led by billionaire John Henry, Fenway Sports also owns the Liverpool Football Club, Fenway Park and a 50% stake in Nascar’s Roush Fensy Racing, among other assets.
Buy this FTAV employee on the blockchain! Due to deteriorating media market conditions, Alphaville is narrowing the range of its first immortalised-on-the-blockchain offering to 5-8 pence per pixel. Or $1m per Jemima Kelly.
Izabella Kaminska – FT
Yeah yeah. The New York Times sold an NFT column for $560,000. Impressive. But here at FT Alphaville we like to go one step better with media reinvention and contrarian thinking. Why sell one singular column as an NFT, when you can sell an entire team member?
Overheard in the Clubhouse at 11am; FTAV is experimenting with a markets chat on Clubhouse. Join them.
FT Alphaville is taking a stab at some Clubhouse chitter chatter. Every day at 11am GMT. Come in, have a listen and do raise your hand if you want to comment. You can find us by searching for our club, which is called FT Alphaville. Check Twitter if you can’t find a link on the app.
Steve Cohen’s Mets Make Their Move With 10-Year, $341 Million Deal for Francisco Lindor; After a quiet winter, the Mets’ new billionaire owner makes a bid to shift the balance of baseball power in New York on the eve of Opening Day
Jared Diamond – WSJ
With just hours to go before the first pitch of the 2021 season, Steve Cohen finally made the move that will define the early part of his tenure as New York Mets owner. Cohen, a hedge-fund manager who bought the team for $2.4 billion in November, agreed to give star shortstop Francisco Lindor a 10-year contract extension worth $341 million. The deal, which as of early Thursday morning hadn’t been announced, doesn’t start until 2022, potentially keeping Lindor in Queens for more than a decade.