ABN Amro takes $200m hit from failure of a single client

Mar 26, 2020

First Read

Hits & Takes
By John Lothian and JLN Staff

The challenge of the coronavirus outbreak has been compared to a war. Yesterday, there was a story that compared our current situation to World War II. It is a good comparison, because there are going to be wins and setbacks. The cost of survival is just that. You are all in. In this case, we all need to be all in. From this war, like other wars, there will be leaders that emerge. Sometimes those leaders are in your squad or at the top of the command structure. In your squad could mean some group you are part of, whether a company, a neighborhood, or church or similar organization.

In the past in similar situations, some of those leaders, especially top military leaders, have emerged as national leaders and have gone on to win the presidency of the U.S. The first example was George Washington. Then Andrew Jackson. Dwight D. Eisenhower is another.

In this case, the leaders that are emerging are the governors of various states, like New York’s Andrew Cuomo, Illinois’ JB Pritzker and California’s Gavin Newsom. There are others too.

Another aspect of this emerging is the difference in leadership in states and how that impacts the quality of life. In Florida, the governor has not called for a shelter-in-place order, although 25 counties have cases of coronavirus. The value of the spring break revenue is too much to give up, evidently.

The future political landscape of the U.S. is being shaped right now by those leaders who put the lives of people first. They will be rewarded in future national elections, I believe.

And those leaders who end up with incredible losses of lives under their stewardship will be sent to exile and the bowels of history. Just like generals who lead their soldiers into slaughter, they will be remembered for their folly and infamy.

On another note, the baseball season would have opened yesterday. And I don’t really care.~JJL


The FIA sent along an article, “U.S. Congress advances $2.2 trillion in COVID-19 relief” detailing Congress’s bipartisan rescue package, the largest in U.S. history. You can read it here. ~SR

Adam Honoré has left the CME Group and is now a financial services business development manager – service development at Amazon Web Services (AWS)~JJL


Fledgling Illinois Canna Business Clipped by COVID-19

The coronavirus has had a profound impact on all market sectors, including botanicals. In the latest John Lothian News report on canna business, the principals of the consultancy Supercritical, Jay Caauwe, Kerry Jordan and Sparky Rose, talk about how COVID-19 has disrupted parts of the cannabis supply chain, and which companies are expected to remain standing when the dust clears.

Watch the video »


Billionaires Want People Back to Work. Employees Aren’t So Sure
Max Abelson and Donald Moore – Bloomberg
‘We’ll gradually bring those people back and see what happens’; Goldman veterans Blankfein and Cohn want the economy ‘back on’
The billionaire Tom Golisano was smoking a Padron cigar on his patio in Florida on Tuesday afternoon. He was worried. “The damages of keeping the economy closed as it is could be worse than losing a few more people,” said Golisano, founder and chairman of the payroll processor Paychex Inc. “I have a very large concern that if businesses keep going along the way they’re going then so many of them will have to fold.”

*****Here is a perfect example of how having money does not make one smart, moral or humane. There is no economy without people. There is nothing without people. People come first. It is not even close.~JJL


The new wartime economy in the era of coronavirus; Recalling the second world war, the UK government is defining ‘rules of the road’ for businesses and citizens
Jonathan Ford in London – FT
In the dog days of July 1938, amid German rumblings in Czechoslovakia’s Sudetenland, the British government led by Neville Chamberlain acquired a collection of fields and a sewage works beside Castle Bromwich airfield in the West Midlands.

*****Be Prepared!!~JJL


The Coronavirus Is the Worst Intelligence Failure in U.S. History; It’s more glaring than Pearl Harbor and 9/11—and it’s all the fault of Donald Trump’s leadership.
Micah Zenko – ForeignPolicy.com
Last September, I met the vice president for risk for a Fortune 100 company in Washington, D.C. I asked the executive—who previously had a long career as an intelligence analyst—the question you would ask any risk officer: “What are you most worried about?” Without pausing, this person replied, “A highly contagious virus that begins somewhere in China and spreads rapidly.” This vice president, whose company has offices throughout East Asia, explained the preventative mitigating steps the company had subsequently adopted to counter this potential threat.

*****This story speaks for itself.~JJL


Malaria Drug Chloroquine No Better Than Regular Coronavirus Care, Study Finds
Michelle Fay Cortez and Claire Che – Bloomberg
Small study of 30 patients is early look at highly-touted drug; Medicine already being given to patients in New York
Hydroxychloroquine, a medicine for malaria that President Donald Trump has touted as a treatment for coronavirus, was no more effective than conventional care, a small study found.

*****The good news is that a version of chloroquine will help keep your fish tank clean.~JJL


Seattle realtors ask: ‘Can you see yourself being quarantined here?’
Joshua McNichols – KUOW
Open houses are banned. But people still want to buy homes as badly as ever.
If you’re shopping for a home this weekend in Seattle — you’ll have a hard time finding open houses. That’s because the nonprofit that publishes real estate listings shut down open houses last week, due to coronavirus concerns. But the real estate market is still hot, so realtors are experimenting with new strategies.

*****I am starting to finish things around the house I have never gotten to before. I started with the bottle of brandy, then to Knob Creek. Amazing how good I feel when finally completing things.~JJL


Unemployment benefit claims skyrocket to 3.283 million
Heidi Chung -Yahoo Finance
The COVID-19 pandemic is wreaking havoc on the U.S. economy, and data released Thursday morning reflected the severe damage being done to the labor market.

*****Only 43 million more to go. This week’s would have likely been more, but for political interference and websites that failed.~JJL


The TRADE appoints Hayley McDowell as editor to lead new-look team; New line-up at The TRADE sees an expanded team and a growing focus on multimedia and digital.
Editors – The TRADE
The TRADE is pleased to announce the appointment of Hayley McDowell as editor, heading up a new team dedicated to growing the print, digital, research and events arms of the publication. McDowell takes over after five years with The TRADE, most recently as senior reporter.

*****Congratulations to Hayley and her team. Keep up the great work! Also, The Trade’s spring 2020 magazine is now out.~JJL


Wednesday’s Top Three
Our most read story Wednesday was Bloomberg’s Countries Starting to Hoard Food, Threatening Global Trade, a more disturbing trend than your neighbors hoarding toilet paper. Next was a three-peat from both Monday and Tuesday, JLN’s story Trouble at Ronin? by Thom Thompson. Third was another repeat, We’re Looking at a System-Wide Margin Call from Bloomberg Opinion.


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Lead Stories

ABN Amro takes $200m hit from failure of a single client; Dutch bank was forced to close out positions at substantial loss
Nicholas Megaw – FT
Dutch bank ABN Amro has announced a $200m hit to its profits after recent market volatility led to the failure of a client in its business catering to proprietary trading firms. ABN Amro Clearing was forced to close out the positions of its unnamed client at a significant loss after the firm was unable to meet margin calls on its trades in US options and futures.

Coronavirus pandemic is a make or break moment for the EU; There are signs that European institutions are learning from early mistakes
Martin Sandbu – FT
“Europe will be forged in crises, and she will be the sum of the solutions brought forth to solve them”, said Jean Monnet, the EU’s founding father. On that view, the bloc will be shaped for many years to come by what is arguably the worst crisis since its creation.

When central banks take over securities markets
Izabella Kaminska – Bloomberg
There are only a handful of global experts on how eurodollar markets, dollar swaps, shadow banks and money market funds interact with central banks. International monetary and economic expert Robert McCauley, a senior research associate at the Global History of Capitalism project, is one of them. He’s sent us a useful account of the extraordinary moves central banks like the Federal Reserve are now taking to stabilise securities markets and how exceptional they are in relation to recent precedents.

Mortgage Mayhem Hits Broker ED&F With Mounting Margin Calls
By Sridhar Natarajan and Matthew Leising – Bloomberg
ED&F Man Capital margin calls tied to souring mortgage hedges; MBSCC sees ‘significantly higher’ margin calls across industry
The aftershocks of a chaotic rush to offload mortgage bonds are spilling over to regional broker-dealers facing mounting margin calls. ED&F Man Capital Markets Inc. has been hit with growing demands to post more capital to cover souring hedges in its mortgage division, according to people with knowledge of the matter. The requests are coming from central clearinghouses and exchanges, forcing the firm to put up almost $100 million on Friday alone, the people said, asking not to be identified because the information isn’t public.

Crypto Margin Trading Challenged by U.S. Derivatives Regulator
Benjamin Bain and Matthew Leising – Bloomberg
CFTC explains what ‘actual delivery’ of digital currency means; Guidance distinguishes spot trades from futures contracts
The main U.S. derivatives regulator is taking a significant step in defining the sometimes blurry line between cryptocurrency futures and trading in the spot market.

Trade Associations Urge UMR Implementation Delay
Colin Lambert – Profit & Loss
In response to the COVID-19 pandemic, 21 financial industry associations have submitted a letter on behalf of their members requesting BCBS (Basel Committee on Bank Supervision), IOSCO (International Organization of Securities Commissions), and other global regulators to suspend the current timeline for the initial margin phase-in. The letter says this will to allow market participants to focus their resources on ensuring continued access to the derivatives market.

Fed Is ‘Not Going to Run Out of Ammunition,’ Powell Vows
Christopher Condon, Steve Matthews, Matthew Boesler, and Rich Miller – Bloomberg
Fed chair speaks in rare TV interview on anti-virus measures; Says lending programs a bridge to get U.S. past virus threat
Federal Reserve Chairman Jerome Powell said the central bank will maintain its muscular efforts to support the flow of credit in the U.S. economy as Americans hunker down from the coronavirus pandemic. “We will keep doing that aggressively and forthrightly, as we have been,” Powell said in a rare interview on NBC’s “Today” show Thursday. “When it comes to this lending we’re not going to run out of ammunition. That doesn’t happen.”

WHO Issues a Rare Public Scolding, Saying Countries Wasting Time
Thomas Mulier, Corinne Gretler, and Naomi Kresge – Bloomberg
World isn’t ready for a pandemic, emergencies chief Ryan says; Countries should maintain lockdowns despite cost, Tedros says
Governments should stop wasting precious time needed to fight the coronavirus after squandering an opportunity to prevent the Covid-19 pandemic, the World Health Organization’s head said.

We face a war against coronavirus and must mobilise accordingly; Higher public debt levels will become an economic feature and be accompanied by private debt cancellation
Mario Draghi – FT
The coronavirus pandemic is a human tragedy of potentially biblical proportions. Many today are living in fear of their lives or mourning their loved ones. The actions being taken by governments to prevent our health systems from being overwhelmed are brave and necessary. They must be supported.

How coronavirus is affecting pasta’s complex supply chain; From farm to fork, labour shortages and border closures provide many obstacles
Emiko Terazono and Judith Evans – FT
“Please get ready for the storm to hit — because hit it will,” Mark Schneider, chief executive of Nestlé, the world’s largest food manufacturer, told staff on Monday. “We need to focus our efforts on securing supplies, manufacturing and logistics every step of the way. For those areas that are not affected yet, get prepared by building inventories of critical supplies and products.”

Coronavirus stress hits Wall Street’s bonus pool, layoffs on the table
Elizabeth Dilts Marshall, Imani Moise – Reuters
Wall Street bonuses will fall roughly 30% this year, and firms are considering layoffs to preserve profits during the coronavirus recession, according to industry insiders and bank executives.

Now The World’s Hospitals Are Running Out of Vital Rubber Gloves
K Oanh Ha and Anuradha Raghu – Bloomberg
Malaysia’s factories forced to cut production due to lockdown; The country supplies two-thirds of the world’s medical gloves
An impending glove shortage is hitting the world, compounded by measures to contain the deadly coronavirus in a country that dominates production: Malaysia.

Coronavirus chaos lures Japanese back to stock market; Equities turmoil and work-from-home orders trigger record openings of online accounts
Leo Lewis – FT
Market turbulence, an old investment proverb and orders to work from home due to coronavirus have lured record numbers of Japanese to open new online trading accounts and dive into the stock market — in many cases for the first time.

Bond traders turn to portfolio trading in volatile market conditions; Tradeweb has seen a surge in portfolio trading among its clients as traders look to engage in an increasingly volatile market environment.
Hayley McDowell – The Trade
Fixed income traders are increasingly looking to portfolio trading strategies to move large amounts of risk with dealers in the current volatile market conditions. According to Tradeweb, it has seen a steady increase in the number of clients adopting its portfolio trading tool globally in the past few weeks, with the number of daily line items executed via the protocol up more than 100% in March, compared to the first two months of the year.

Hedge fund manager to lead Norway sovereign fund after $124 billion loss
Terje Solsvik, Gwladys Fouche – Reuters
Norway’s sovereign wealth fund, the world’s largest, named a London-based hedge fund manager as its new chief executive on Thursday and said it had lost $124 billion this year as stock markets tanked due to the coronavirus pandemic.

Exchanges, OTC and Clearing

Nasdaq Pledges Business and Philanthropic Support in Response to COVID-19; Makes $6 million cash and in-kind donation to relief organizations and business partners
Nasdaq, Inc.
Nasdaq, Inc. (Nasdaq: NDAQ) announced today its philanthropic support in response to the Coronavirus COVID-19 pandemic. With our global community experiencing this unprecedented time in history together, Nasdaq is taking action to commit cash and in-kind donations totaling $6 million to COVID-19 response and relief efforts to provide immediate assistance to those who are most at risk.

*****An example worth following.~JJL

NeoXam collaborates with ICE Data Services
Press Release
NeoXam, a leading provider of financial data management and transaction software solutions, announced it has integrated ICE Data Services’ pricing and reference data with NeoXam’s “NeoXam DataHub”, a leading platform for Enterprise Data Management (EDM solution). ICE Data Services is a global leader in market data, analytics and connectivity services, and is part of Intercontinental Exchange (NYSE: ICE).

TMX Group Interim CEO and CFO John McKenzie Participates in a Virtual Fireside Chat with TD Securities
TMX Group Interim CEO and CFO John McKenzie participated in a virtual fireside chat today with Graham Ryding of TD Securities.

SIX closes in on BME acquisition with further approval in Spain; Spain’s CNMV has approved SIX Group’s bid to acquire BME following approval from the Spanish Economy Ministry earlier this week.
Kiays Khalil – The Trade
SIX Group is a step closer to finalising its EUR2.8 billion acquisition of Spanish stock exchange Bolsas y Mercados Españoles (BME) after gaining approval from Spain’s National Securities Market Commission (CNMV).

Maintaining Robust Markets in Turbulent Times
Charles Li Direct – HKEX
Global markets are undergoing one of their most volatile periods in history, reflecting the uncertain macro environment and impact of the COVID-19 outbreak. HKEX’s markets have continued to operate with resilience, maintaining a fair and orderly trading environment while at the same time ensuring the safety and wellbeing of our people. Our goal is to continue providing market access while taking the utmost care of our employees, partners and communities in the face of current uncertainties.

ICE Futures Europe EU Aviation Allowances Auction Result
Intercontinental Exchange
Intercontinental Exchange (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced that today’s auction of 1,669,000 EU Aviation Allowances (EUAAs) held on behalf of the UK Government’s Department for Business, Energy & Industrial Strategy (BEIS) was cancelled as a result of the total volume of bids falling short of the volume of the allowances being auctioned.


Fintech Startups Scaling Up to Re-Bundle Services
Trader’s Magazine (press release)
The trend of global funding to venture-backed fintech companies growing in the later stages but with a pullback in the seed-stage indicates a general consolidation towards the maturing of fintech sector, where the startups are looking to scale up beyond their boundaries, says GlobalData, a leading data analytics company.

Forward Thinking – The Travel Industry Is In Crisis But One Fintech Sees Hope In Partnerships
Trevor Clawson – Forbes
Given the circumstances, Matt Crate could be forgiven for feeling at least a little despondent. As the newly appointed Managing Director of currency exchange platform WeSwap, he is running a travel industry-dependent company at a time when borders have been closed, airlines are slashing schedules and millions of consumers around the world are being told by their governments to “stay at home.” For a business that has styled itself as a travel fintech, these are not promising times.

FinTech Veteran Dan Henry Tapped To Lead Green Dot
Branchless bank and FinTech Green Dot has reported that Dan Henry will step in as its new president and CEO, and will also join the board of directors. Henry took the reins on Wednesday (March 25), replacing interim CEO William I. Jacobs and interim President Christopher Brewster. Jacobs will remain as the board’s chairperson and Brewster will move to the board and serve as chairperson of the audit committee, Green Dot said in a statement.

Your Pandemic Survival Guide: Fintech Edition
Jen Wieczner and David Z. Morris – Fortune (subscription)
About two weeks ago, as we at Fortune and many others elsewhere prepared to work from home indefinitely, I noticed something unsettling on my last commute back from the office. It wasn’t just the grocery stores with lines out the door, but also the ATMs, with queues of people filling small vestibules, waiting to withdraw cash.

Africa turns to mobile payments as a tool to curb COVID-19
Jake Bright – Tech Crunch
Africa is using digital finance as a means to stem the spread of COVID-19. Governments and startups on the continent are implementing measures to shift a greater volume of payment transactions toward mobile money and away from cash — which the World Health Organization flagged as a conduit for the spread of the coronavirus.

TRADERS Q&A: Stino Milito, DASH Financial Technologies
John D’Antona Jr. – Trader’s Magazine
The COVID-19 pandemic has affected the options market along with equities. While the broad financial media has focused on the vacillations of the stock market and red ink posted by thousands of securities, there is one derivative market that is holding up relatively well – options.


Telegram token investors are now ready to take refund offer – report
Yogita Khatri – The Block
Some investors in Telegram’s blockchain project, the Telegram Open Network (TON), are reportedly ready to get their money back. “What I see now among various investors is that many, at least 10 investors with whom I spoke, are inclined to take away 72% of the invested funds,” Yakov Barinsky, head of Russian crypto investment firm Hash CIB, told local news agency TASS, in a report published on Monday. “Considering what is happening in the financial markets, this offer now looks like much better than in October,” said Barinsky.

Devs Plot Launch of Telegram’s Blockchain Without Company’s Involvement
Anna Baydakova – Coindesk
A U.S. court order may have barred Telegram from launching its blockchain, but that doesn’t mean others can’t. So says the TON Community Foundation, a group of more than two dozen software developers and investors, who are now discussing possible ways to launch the Telegram Open Network (TON) without the messaging platform’s participation. “We consider it seriously,” the group’s founder, former communications manager at TON Labs Fedor Skuratov, told CoinDesk. The community is now discussing options and no final decision has been made, he said.

Bitcoin’s mining difficulty sees the second-largest drop in history
Yogita Khatri – The Block
Bitcoin’s mining difficulty, an indicator of competition among bitcoin miners, has seen the second-largest decline in the network’s history. The difficulty has dropped by around 16% to ~13.90 trillion on March 26, as compared to 16.55 trillion in the previous cycle recorded on March 9. The difficulty is designed to adjust itself every 2,016 blocks or about two weeks.

China’s digital Yuan, Libra may be ‘good reasons’ to prioritize ‘Digital Dollar’
Biraajmaan Tamuly – AMB Crypto
In late 2019, former CFTC Chairman J. Christopher Giancarlo’s op-ed for the Wall Street Journal turned a lot of heads in the community. Giancarlo had publicly proposed the idea of digitizing the U.S fiat currency in a blockchain-based system, adding that the dilemma of a declining U.S dollar could be necessarily solved by this solution. Fast forward to 2020 and the digital dollar project has undergone significant developments, with Accenture emerging as a partner to push for a U.S central bank digital currency.

Bitcoin Firms Report Uptick in Demand for Inheritance Services
William Foxley – Coindesk
Cryptocurrency startups are reporting increased demand for estate-planning services as the coronavirus outbreak motivates users to make sure their coins are passed onto heirs when they die. Casa Hodl and Unchained Capital said they have seen a dramatic rise in requests for proof-of-death or similar multi-signature wallet schemes that enable customers’ bitcoin to be transferred to a loved one following an untimely death.

A new Ethereum 2.0 audit has highlighted potential security vulnerabilities
Yilun Cheng – The Block
An audit of the ETH 2.0 specifications highlighted the need to address potential vulnerabilities with the protocol’s peer-to-peer (P2P) networking layer and block proposer system, according to the published findings. At the Ethereum Foundation’s request, technology security firm Least Authority started its review of ETH 2.0 specs in January and worked closely with the Foundation throughout the process.

TRON Taps into P2P App Metal Pay to Access US Crypto Market
Aziz Abdel-Qader – Finance Magnates
TRON’s native token is one step closer to the cryptocurrency folks in the US following a new partnership with San Francisco-based peer-to-peer payments platform Metal Pay. This collaboration will see TRX integrated into Metal Pay’s mobile application, enabling its 130,000 users to buy the token using crypto and fiat currency alike. They can also use their cash balance, debit cards and transfer money from a linked bank account.

Malta Financial Regulator Warns Against Unauthorized Crypto Firms
Danny Nelson – Coindesk
Malta’s financial regulator has issued warnings against two crypto websites that falsely claimed to be licensed by the nation. The Malta Financial Services Authority (MFSA) called out the “COINMALEX” and “Crypto Foxtrades” crypto exchanges in twin warnings Wednesday. Both entities had claimed to be licensed, registered or domiciled in Malta, all of which MFSA denied.

Report: Crypto Investment Wealth Is Highest in San Francisco Bay Area
Samuel Haig – Cointelegraph
Crypto taxation tool CoinTracker has released a report comparing the prevalence of cryptocurrency ownership across major cities in the United States. The report is based on user data that CoinTracker has been collecting since 2013. CoinTracker found that the top four ranked cities by average crypto portfolio size are all in California’s San Francisco Bay Area, with San Francisco proper at approximately $55,000 followed by Palo Alto with $39,000, Oakland with $35,000 and San Mateo with $30,600.

European Commission Defense Program Offers Grants for Blockchain Solutions
Sebastian Sinclair – Coindesk
The European Commission is calling for future-oriented defense solutions including innovative blockchain concepts. A European Defense Industrial Development Programme (EDIDP) tender, issued March 24, includes a 42-strong itemized list calling for small-to-medium enterprises (SMEs) to offer up solutions that drive innovation and adapt technologies for civil and defense purposes. The program will accept proposals relating to “infrastructure, based on real-time cloud and on-premise digital twin benefiting from blockchain technologies’ robustness.”

Casper Labs Aims to Raise $3 Million via IEO
Arnab Shome – Finance Magnates
Blockchain firm Casper Labs has partnered with BitMax.io for the sale of its native token. Announced on Wednesday, the validator tokens will be listed on BitMax’s Exchange Validator Offering (EVO) platform, the initial exchange offering (IEO) platform of the exchange. As detailed by the announcement, the company is aiming to raise $3 million by selling CLX tokens. It has mined a total of 10 million of the native token on the Casper Labs blockchain.


Trump says reopen by Easter, Corporate America says not so fast
Diane Bartz – Reuters
President Donald Trump wants America to get back to business by Easter, suggesting some efforts to slow the spread of coronavirus outbreak will no longer be needed by then, but Corporate America is taking its lead from health professionals.

US puts pressure on Saudi Arabia to end oil price war; Pompeo calls on Riyadh to ‘rise to the occasion’ as crude level remains at 17-year lows
David Sheppard and Derek Brower and Katrina Manson – Reuters
The US has raised the pressure on Saudi Arabia to change course in its oil price war with Russia, calling on the kingdom to “rise to the occasion” and start working to stabilise global energy markets.

U.S. Calling on Saudis to Halt Plan to Unleash Record Oil Supply
Glen Carey, Javier Blas, Nick Wadhams, and Stephen Cunningham – Bloomberg
Pompeo, Saudi Crown Prince speak before G20 conference call; U.S. secretary of state urges kingdom to reassure markets
The Trump administration is pressing Saudi Arabia to dial back its plan to flood the oil market after a price war with Russia sent crude prices crashing to their lowest levels in almost two decades.

The coronavirus should not stop the US census; ‘We all need to find ways to uphold civil society and democracy right now — and the census is a cornerstone of this’
Gillian Tett – FT
Last week an envelope dropped through my front door marked “Census 2020” and “Your Response Is Required By Law”. In normal circumstances, I might have chucked it on to my pile of bills and ignored it until the last minute. But now I am trapped at home. So I opened the envelope, went online to complete the survey — and then felt a twinge of moral satisfaction, not just because I had ticked a job off my “to do” list, but for two bigger reasons as well.

Pandemic Response Fells First European Government in Kosovo
Misha Savic, Jasmina Kuzmanovic, and Gordana Filipovic – Bloomberg
Kosovo lawmakers vote out premier in no-confidence motion; Premier’s ouster shows split of support among western partners
Kosovo lawmakers voted to remove Prime Minister Albin Kurti, becoming the first nation in Europe to vote out a government over the way it handled the coronavirus outbreak.

Virus Hands World Leaders Sweeping Powers They May Never Give Up
Iain Marlow – Bloomberg
Civil liberties rolled back as governments impose tough steps; AI, facial recognition are enabling clampdown on populations
Last week, the mayor of Ecuador’s largest city ordered the international airport’s runway blocked to prevent a KLM airliner from landing to pick up Dutch tourists stranded by the coronavirus.

Millions of Self-Employed British Workers Are Promised Help
Joe Mayes and Alex Morales – Bloomberg
Chancellor expected to announce assistance after criticism; 5 million Britons are self-employed, don’t get virus wage help
Millions of Britons who work for themselves will be promised a rescue package as the coronavirus pandemic threatens their incomes.

US Senate approves $2tn stimulus deal to fight coronavirus fallout; Bipartisan vote expands jobless benefits and will now move to House of Representatives
James Politi and Lauren Fedor – FT
The US Senate has approved fiscal stimulus legislation worth $2tn to prop up the American economy during the coronavirus pandemic, in a bipartisan vote after a week of tense negotiations between the Trump administration and Congress.


ESMA delays extension of tick size regime to SIs due to coronavirus; European regulators have been told not to prioritise supervision of the changes to systematic internalisers amid the coronavirus pandemic.
Hayley McDowell – The Trade
New rules in Europe that will see systematic internaliser (SI) trading venues fall under the tick size regime have officially been delayed, as the EU markets watchdog urges regulators to focus on handling the ongoing coronavirus pandemic.

FCA sizes up alt data for insider trading, irking funds; UK regulator examines new data sources’ potential to confer unfair market advantage
Luke Clancy – Risk.net
Investors are sounding the alarm on the Financial Conduct Authority’s move to expose unfair advantages from alternative datasets it says could constitute insider trading.

ESMA clarifies position on SFTR backloading
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a revised version of its 19 March Public Statement on coordinated supervisory actions on the application of Securities Finance Transactions Regulation (SFTR).

ESMA issues guidance on accounting implications of COVID-19
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has issued a Public Statement on some accounting implications of the economic support and relief measures adopted by EU Member States in response to the COVID-19 outbreak.

State “Shelter-in-Place” and “Stay-at-Home” Orders
In response to the COVID-19 pandemic, a growing number of states and localities have issued workplace restrictions as part of their efforts to prevent the spread of the disease. These “shelter-in-place” or “stay-at-home” orders vary in scope and duration, but generally require businesses not considered “essential” to close their physical offices and continue their operations remotely.

Statement of Policy: Delaying annual company accounts during the coronavirus crisis
Companies and their auditors currently face unprecedented challenges in preparing audited financial information as a result of the coronavirus pandemic. In response to the current situation, the FCA, FRC and PRA are today announcing a series of actions to ensure information continues to flow to investors and support the continued functioning of the UK’s capital markets.

Joint statement by the FCA, FRC and PRA
The coronavirus (Covid-19) pandemic is an unprecedented situation but it is important to recognise that, while the reduction in activity associated with coronavirus could be sharp and large, it is likely to rebound sharply when social distancing measures are lifted. In addition, in the intervening period, while activity is disrupted, substantial and substantive government and central bank measures have been put in place in the UK and internationally to support businesses and households. These measures, which have been evolving rapidly and could evolve further, are expected to remain in place throughout the period of disruption.

FCA’s expectations on financial resilience for FCA solo-regulated firms
We want to see firms to continue operating in this challenging period, and, where we can, we intend to provide flexibility to regulated firms to ensure this. Capital and liquidity buffers are there to be used in times of stress. Firms who have been set buffers can use them to support the continuation of the firm’s activities.

Investing and Trading

Tesla to reopen New York plant ‘as soon as humanly possible’ to make ventilators: Musk
Tesla Inc will reopen its New York factory “as soon as humanly possible” to manufacture ventilators for coronavirus patients, Chief Executive Officer Elon Musk said on Twitter on Wednesday.

World’s Rich ‘Desperate’ for Gold With Metal in Short Supply
Benjamin Stupples – Bloomberg
Switzerland’s refining industry largely shut due to pandemic; Shortages of South Africa’s Krugerrand, Canada’s Maple Leaf
Ludwig Karl is stuck at home, worried about his elderly relatives. All the while his business is booming. He’s a board member of Swiss Gold Safe Ltd., an operator of high-security vaults in the Alps that’s storing growing sums of precious metals for wealthy foreigners as the Covid-19 pandemic worsens. The company usually helps customers buy gold, but governments have closed scores of businesses amid the crisis, making it increasingly difficult for people to get their hands on the physical product.

Distressed Debt Balloons to Almost $1 Trillion, Nears 2008 Peak
Katherine Doherty – Bloomberg
Oil & gas sector leads with $161 billion of distressed debt; Investment-grade issuers such as Ford trade at deep discount
The amount of distressed debt in the U.S. has quadrupled in less than a week to nearly $1 trillion, reaching levels not seen since 2008 as the collapse of oil prices and fallout from the coronavirus shutters entire industries across the globe.

How Coronavirus Has Upended Economics in Just a Few Weeks
Ben Holland and Enda Curran – Bloomberg
Big tilt toward government spending will be tough to unwind; In the post-virus world, MMT and debt monetisation loom large
In the heat of a global crisis more sudden and severe than anything in living memory, economic orthodoxies are getting tossed aside at a furious pace. Some of them may be gone for good.

Oil Market Shows Fear That U.S. Is Running Out of Storage Space
Jacqueline Davalos, Catherine Ngai, and Alex Longley – Bloomberg
Vitol sees demand down as much as 20 million barrels a day; WTI futures advance 2% on Wednesday in third day of gains
The U.S. oil market is displaying worries that stockpiles are going to run out of storage space, with futures being whipsawed as a growing glut counters economic stimulus measures.

The Gold Market Is Being Tested Like Never Before
Jack Farchy, Elena Mazneva, and Mark Burton – Bloomberg
From South Africa’s ultra-deep mine shafts to vaults underneath London, from metals traders in New York skyscrapers to main-street sellers of coins: the global gold market is being tested like never before. The cracks are starting to show.

Historic Gold Squeeze Shows Signs of Easing as Investors Exit
Ranjeetha Pakiam – Bloomberg
Some short sellers appeared to exit the market for now; Prices were steadying ahead of U.S. jobless claims data
Fears over the historic squeeze in the gold market showed signs of easing after some short sellers appeared to exit and investors rolled forward contracts. The bullion market was thrown into turmoil this week as logistical disruptions caused by the coronavirus pandemic led to a divergence of prices in the U.S. and London and curbed supply. An issue was whether there would be enough gold in New York to deliver against futures contracts traded on the Comex.

ECB Says It Started Bond Buying Under Emergency Program
Paul Gordon – Bloomberg
The European Central Bank said it started buying bonds under its 750 billion euro ($821 billion) emergency plan to combat the coronavirus outbreak on Thursday.

Coronavirus shutdowns cause glitches in gold market; This week saw a record gap between physical prices in London and futures in New York
Henry Sanderson – FT
Supply chain shutdowns caused by coronavirus have led to unprecedented disruptions in the gold market, as traders fear they cannot get hold of enough bullion to settle futures contracts traded in New York.


The Fed Asks for BlackRock’s Help in an Echo of 2008; BlackRock will advise the Federal Reserve on the purchase of billions of dollars in bonds and securities. The terms of the agreement were not disclosed.
Matthew Goldstein – NY Times
The Federal Reserve has turned again to BlackRock. The nation’s central bank said it tapped BlackRock, the world’s largest asset manager, to help oversee the Fed’s efforts to stabilize the bond market amid the economic turmoil caused by the coronavirus pandemic.

Banks ask for flexibility as sponsors eye falling valuations
Kristen Haunss, Aaron Weinman – Reuters
Private equity firms sitting on a stockpile of cash are eyeing companies that have dived in value as the coronavirus pandemic causes a sell-off across financial markets. Standing in sponsors’ way could be the flexibility some banks are demanding, concerned about lending into an economy on the cusp of a recession.

Morgan Stanley online platform for wealthy clients down
Morgan Stanley said in a recorded message on Wednesday that its online trading platform and website tools for wealth management clients were down.

Bill Ackman makes $2.6bn in credit market rout; Pershing Square founder who warned ‘hell is coming’ has cashed in bearish bet and piled into stocks
Ortenca Aliaj – FT
Billionaire investor Bill Ackman has cashed in $2.6bn from bets that companies would struggle to pay their debts, less than a week after warning the American people that “hell is coming” as a result of coronavirus.

A $16 Billion Bond Manager Says It’s Too Late to Hedge Risk
Leo Laikola – Bloomberg
If you didn’t already start hedging against the risk of a deep sell-off in credit markets last month, don’t bother now. Ville Talasmaki, who helps manage about $16 billion of credit investments for Finnish financial group Sampo Oyj, says the warning signs had been plain for a while.

Banks Said to Offer $1.3 Billion of Risky Loans to Unwind Swaps
Lisa Lee and Sally Bakewell – Bloomberg
Citi and Truist each conducted loan auctions on Tuesday; Loan prices plunged below 80 cents to more than 10-year lows
Citigroup Inc. and Truist Financial Corp. are among banks that have been selling off hundreds of millions of leveraged loans to help unwind swap trades tied to the debt, according to people familiar with the matter.

JPMorgan’s Equity Derivatives Haul Soars to $1.5 Billion
Michelle F Davis, Donal Griffin, and Max Abelson – bloomberg
Unit’s traders keep showing up to field intense market swings; Despite advice, some have been working closely in recent days
Revenue is swelling in a key part of JPMorgan Chase & Co.’s trading division as its teams stay engaged through violent price swings that have prompted some market players to pull back.

HSBC Warns Credit Losses to Rise Despite BOE Virus Leeway
Harry Wilson – Bloomberg
Bank updates investors on risks to business from COVID-19; Value of Bank of Communications stake could be hit by pandemic
HSBC Holdings Plc warned it still expects to book higher credit losses on the back of the pandemic even after the Bank of England gave lenders leeway to deal with unpaid loans.

HSBC Warns Credit Losses to Rise Despite BOE Virus Leeway
Harry Wilson – Bloomberg
Bank updates investors on risks to business from COVID-19; Value of Bank of Communications stake could be hit by pandemic
HSBC Holdings Plc warned it still expects to book higher credit losses on the back of the pandemic even after the Bank of England gave lenders leeway to deal with unpaid loans.

Ackman Has Big Win on Bearish Market Bet; Pershing Square laid out $27 million a month ago to hedge its portfolio against a steep market drop, notching it a 7.9% gain this month
Corrie Driebusch – Bloomberg
William Ackman just scored big on a bearish bet that enabled him to sidestep steep market losses. About a month ago, Mr. Ackman laid out $27 million to protect his portfolio against a precipitous drop he anticipated in U.S. markets as a result of the coronavirus outbreak. Those so-called hedges came in the form of credit protection on global investment-grade and high-yield bond indexes that becomes more valuable as the likelihood of corporate defaults rises.


Singapore Sees Biggest Daily Jump in Coronavirus Cases
Colin Keatinge and Philip Heijmans – Bloomberg
Singapore reported its biggest daily jump in new cases of Covid-19 infection with 73 new confirmed cases. As of 12 p.m. local time on March 25, the health ministry confirmed and verified an additional 38 imported and 35 local cases of the infection, taking the overall total of cases to 631, according to a statement. The imported cases had travel history to Europe, North America, ASEAN and other parts of Asia; all except one were returning residents and Long Term Pass holders.

Are ‘Coronabonds’ the Solution to Europe’s Debt Woes?: QuickTake
John Ainger – Bloomberg
Europe is facing an economic crisis, the result of a pathogen that’s unleashed a global pandemic. That’s led to a renewed push for a never-before-tried financial tool — now aptly renamed “coronabonds.” While politically divisive, these pooled debt securities could help overcome one of the biggest hurdles faced by the European Union: how to promote financial integration and risk-sharing across the continent.

Virus Puts Risk of Russian Wheat-Export Curbs Back in Focus
Anatoly Medetsky – Bloomberg
Russian domestic prices and exports have climbed recently; Analysts say government wheat-export curbs are possible
As the coronavirus pandemic disrupts food supply chains around the world, the wheat market is turning its attention back to potential export restrictions in Russia.

Tokyo at risk of ‘explosive spike’ in coronavirus cases; Residents of city strip supermarket shelves bare after record one-day rise in cases
Leo Lewis and Kana Inagaki – FT
Panic buying has left many of Tokyo’s store shelves empty after a record rise in new coronavirus cases prompted the city’s governor to ask residents to stay at home this weekend.

Irish Unemployment Set to Hit 30-Year High Amid Virus Recession
Peter Flanagan – Bloomberg
Ireland’s GDP may drop 7% in 2020 as economy partly shuts down; Unemployment on track to rise to 18% from below 5% pre-crisis
Irish unemployment may surge to the highest level since the 1980s, as the coronavirus takes an unprecedented toll on the economy. The jobless rate could rise 18% in the second quarter, the government-backed ESRI think-tank said on Thursday, should current restrictions remain in place for 12 weeks as planned. About 350,000 people would lose their jobs, the think tank said, with unemployment jumping from below 5%.

Even a Saudi-Russia Truce Would Be Too Late to Save OPEC+ Legacy
Grant Smith – Bloomberg
G-20 call Thursday will try to forge amnesty in oil-price war; Goldman Sachs sees inventories piling up by 20 million b/d
Even if Riyadh and Moscow ended their fight for oil-market share now, everything they achieved together over three years of OPEC+ would still go up in smoke.

Norway’s $945 Billion Wealth Fund Set to Buy Stocks Due to Rout
Mikael Holter – Bloomberg
Norway’s $945 billion sovereign wealth fund is set to buy equities after the market rout decimated its stock holdings. The fund’s equity portfolio has dropped 23% so far this year, meaning it accounts for slightly more than 65% of total investments, far below the 70% target in its mandate.

Virus renews fears over strength of Italy’s banks; ‘Doom loop’ linking sector and wider economy hangs over country
David Crow – FT
Italy’s emergence as the centre of the coronavirus outbreak in Europe has prompted a familiar question: is its banking sector strong enough to withstand the economic shock?

Nicolai Tangen tapped to lead Norway’s $930bn oil fund; Hedge fund manager to take the reins from longtime chief Yngve Slyngstad
Richard Milne – FT
The next chief executive of Norway’s $930bn oil fund will be the little-known Norwegian hedge fund manager Nicolai Tangen.

India to Spend $22.5 Billion to Help Poor Survive Coronavirus Shutdown; Measures include free staple grains for about 800 million families over the next three months
Rajesh Roy and Eric Bellman
India’s government Thursday unveiled $22.5 billion in spending to help the country’s poor survive the nationwide shutdown to slow the spread of the coronavirus.


Boris Johnson and his donkeys stumble on, led by lions they try to lead
John Crace – The Guardian
We were still a long way short of John Bercow’s last prime minister’s questions hurrah. That clocked in at a mind-numbing 70 minutes. But with parliament due to go into early recess that evening and with no guarantee of a date for its return, Speaker Lindsay Hoyle chose to effectively run two separate half-hour PMQs consecutively.

As outbreak blows up finances, a limit to EU solidarity
Lorne Cook and David Mchugh – Associated Press
The European Union is taking unprecedented action to help member countries endure the massive economic shock of the virus outbreak, but some nations are resisting the idea of shared borrowing to cover the heavy costs – suggesting that even during this crisis there are limits to solidarity in a bloc that is trying to reaffirm itself after Brexit.

We simply don’t know what kind of Britain will awake from all this
Martin Kettle – The Guardian
If there is one thing everyone living through the Covid-19 emergency agrees, it is that it is unprecedented. Everyone is surely right about that. But what follows in politics, economics and social behaviour from that recognition? There is no agreement there. There are resemblances with wartime, of course, but Britain never went into almost total lockdown in wartime. There are echoes of past pestilences too, but these afflictions did not bring normal life to such a totalising standstill.

Plan to cut the number of MPs axed over ‘Brexit workload’
BBC News
Plans to cut the number of MPs from 650 to 600 have been dropped by the government, citing “a greater workload” following Brexit. David Cameron had proposed the idea in 2012, when he was prime minister, in a bid to reduce the cost of politics. Under the changes, 50 constituencies would have been wiped from the electoral map including Labour leader Jeremy Corbyn’s Islington North seat.


Millennials Want To Make It Clear That They’re Not The Ones On Spring Break
Elyse Wanshel – HuffPost
OK, boomers — it’s time to set your rage on a new generation…at least when it comes to spring break. Last week, many were outraged when news broke that college students were flooding beaches for their vacations from college classes, ignoring CDC guidelines about social distancing put in place because of the ongoing coronavirus pandemic. A few media outlets who wrote about the issue and political figures who discussed the story on social media incorrectly blamed good ol’ millennials for being, well, entitled millennials. According to the Pew Research Center, millennials were born between 1981 and 1996, making them 24 to 39 years old in 2020. Anyone born in 1997 and beyond (making them 23 and younger) is considered part of Generation Z.

Therapist Julia Samuel on how to manage anxiety and grief during coronavirus; Exercise, treats and keeping plans short-term all have a role to play – as does swearing
Emma Jacobs – FT
It is peaceful sitting inside the duck-egg-blue walls of a room at the top of a mansion block in west London. Outside, beyond the pink blossom trees and bright spring day, a pandemic rages, financial markets are in meltdown and workers are losing their jobs.

Summer Camps in Northeast Scramble to Deal With Coronavirus Fallout; Camps aim to figure out if they can open, how the safety rules might change and whether parents will send their children
Leslie Brody – WSJ
With parents and children cooped up in self-isolation in the New York City area, many are dreaming of summer camp to take a break from each other. But whether camps can open is unclear.

NCAA Is Open to Granting an Additional Year of Eligibility to Spring Athletes; Athletes in baseball, softball, lacrosse and tennis would effectively get a mulligan for the 2020 season but winter sport athletes likely won’t get another year
Laine Higgins – WSJ
The NCAA’s move to cancel all athletics for the remainder of the academic year will reverberate through college athletics long past graduation this spring. For athletes whose seasons were curtailed or canceled, the biggest question is: do they deserve the chance to play another season?

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Wildfires rage in Canada’s oil hub

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