Hits & Takes
John Lothian & JLN Staff
Monday is Labor Day in the U.S. and we will not be publishing an edition of JLN then. We will resume on Tuesday. Have a peaceful long weekend and reflect on our world and how you can help make it better. We all need to work harder to be loving, respectful of each other and do our best to solve some of the many problems we currently face collectively.
Wall Street had its worst performing day in months yesterday. See here and stories below.
CME Group Chief Operating Officer Julie Holzrichter has an essay on LinkedIn titled “Balancing Challenges & Opportunities: Reflecting on Leading Through Crisis with WBC.”
PWC is holding a webinar on “How should asset managers be thinking about the upcoming LIBOR transition” on Tue, Sep 15, 2020 at 1:00 PM EDT (12:00 PM CDT). Sign up HERE.
From NFA: Due to maintenance, NFA’s website and the following systems may be intermittently unavailable for a brief period of time between the hours of 8:00 a.m. and 12:00 p.m. CT on Saturday, September 5, 2020: Online Registration System (ORS), BASIC Data Entry, BASIC, NFA Rulebook, News & Notices, Security Futures Products Training, Online Payments, Online Arbitration Claims, Arbitrator Profile, Arbitrator Training, Employment Application and Profile System, and all Electronic Filings Systems including EasyFile, Exemptions, Questionnaire, and Disclosure Documents. We apologize for any inconvenience.
The Wall Street Journal reported that the Hilton Hotel in Times Square in New York City is closing. The hotel “will lay off 200 workers, the latest sign that New York City’s hospitality industry is struggling to survive during the coronavirus pandemic.”
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Intercontinental Exchange announced Thursday that its CFO, Scott Hill, and Ellie Mae COO Joe Tyrrell will present at the Barclays Global Financial Services Conference on Tuesday, September 15 at 11:15 am ET. The presentation will be available live and in replay via webcast and can be accessed in the investor relations and media section of ICE’s website here.~SR
From the OCC: Thursday’s market activity resulted in a new record of 7,111,658 trades cleared at OCC, and the fourth highest contract volume day of 45,884,033 cleared contracts.~SR
Social-equity applicants for Illinois’ new adult-use cannabis dispensing licenses were notified Thursday if they made the next round. The Illinois Department of Financial and Professional Regulation confirmed that 75 licenses will be awarded in a lottery held by IDFPR in late September. The state agency said every applicant that advanced received a perfect score in an independent evaluation of their application and also was a social equity applicant. The list is here.~SC
Change to Margin Parameter for Customer Option Value Aggregation
Effective with the end-of-day settlement cycle for Monday, September 14, 2020, CME Clearing will switch from 90% customer net option value aggregation to 100% (full net treatment) option value aggregation, for the determination of performance bond requirements for customer-segregated (CSEG) positions in the base guarantee fund.
*****This appears to be a reversal of the treatment of net option value (“NOV”) at the clearinghouse. Back on May 22, the CME announced they planned on changing the treatment of NOV from a gross basis across all customer accounts at an FCM to net across each customer. This would result in the CME being able to see on an account basis where the option risk is at the brokerage firm. According to an FCM executive, this would have greatly increased the amount of money the FCMs had to put up at the CME clearinghouse and reduced their profitability. From the exchange perspective, they would have greater transparency into where issues were at firms. The FCMs protested the May 22 memo, which caused the CME to freeze the NOV level at a 10% haircut. The May 22 memo had this moving from 10% to 100% by the end of June. Now, the 10% haircut seems to have been removed. If you have some insights to share on this move from the CME, on or off the record, I am glad to hear from you.~JJL
Trump: Americans Who Died in War Are ‘Losers’ and ‘Suckers’; The president has repeatedly disparaged the intelligence of service members, and asked that wounded veterans be kept out of military parades, multiple sources tell The Atlantic.
Jeffrey Goldberg – The Atlantic
When President Donald Trump canceled a visit to the Aisne-Marne American Cemetery near Paris in 2018, he blamed rain for the last-minute decision, saying that “the helicopter couldn’t fly” and that the Secret Service wouldn’t drive him there. Neither claim was true.
****President Trump has denied saying Americans who died in war are “losers” and “suckers,” but the Associated Press has confirmed The Atlantic’s story.~JJL
‘The United States is in crisis’: Report tracks thousands of summer protests, most nonviolent
Tim Craig – Washington Post
About 93 percent of the racial-justice protests that swept the United States this summer remained peaceful and nondestructive, according to a report released Thursday, with the violence and property damage that has dominated political discourse constituting only a minute portion of the thousands of demonstrations that followed the killing of George Floyd in May.
*****There is a statistic for you. Ninety-three percent of protests this summer have been peaceful. We are peaceful people, not violent people. The protest I participated in this summer was peaceful.~JJL
CryptoMarketsWiki Coin of the Week: YFI
YFI, short for yEarn.finance token, garnered attention when the price of this latest DeFI wunderkind shot past bitcoin’s historic high price of just under $20,000 to trade at more than $38,000 last weekend, less than two months since it was launched. The token is the governance token for the y.finance ecosystem, which so far consists of a decentralized trading platform and an automated market maker. The token not only conveys governance rights but also provides a share of the potential earnings borrowing and lending operations conducted on the yEarn.finance blockchain.
Thursday’s Top Three
Our top story Thursday was HBO’s new sex cult doc has big lessons for investors, from Fortune. Hmmm. The “doc” refers to HBO’s new documentary series “The Vow” about NXIVM, the supposed ‘executive success program’ that was actually a multi-level marketing scheme. Readers stared at their screens long enough to make the Wall Street Journal’s How to Stop Eye Strain When You Relentlessly Stare at Screens our number two story. Third was If 60/40 Keeps Working, Democracy Has Failed, Paul McCulley Says, from Bloomberg.
186,980,586 pages viewed; 24,422 pages; 225,947 edits
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America in Crisis: A Closer Look at a Deeply Polarized Nation; Mapping how income inequality, partisanship, health disparities, the recession, racism, and climate change are affecting the country.
Dorothy Gambrell and Amanda Kolson Hurley – Bloomberg Businessweek
It’s 2020, and everything is broken. The novel coronavirus is ravaging the globe—especially the U.S., where more than 180,000 lives have already been lost. The U.S. economy has cratered, and unemployment has soared. The killing of George Floyd, an unarmed Black man, by a Minneapolis police officer in May set off the largest wave of American protests since the 1960s. Clashes between protesters and right-wing groups have since led to deaths in Kenosha, Wis., and Portland, Ore.
*****This Labor Day weekend, take some time and read this article and ponder the state of affairs we are in. Then consider how you can help effect change for the better.~JJL
Cyber Attacks Are Seen Pushing Up Risk Premiums for Stocks
Abhishek Vishnoi – Bloomberg
Funds adjust positions on cyber riskiness, research says; Standard deviation gain in cyber risk raises risk premium 3.4%
U.S. equity investors are demanding higher risk premiums to compensate for rising cyber threats as the coronavirus pandemic pushes more businesses to move online. That’s according to researchers at Michigan State University who found that funds adjust their positions according to the “cyber riskiness” of holdings, especially when data breaches are high. Hackers prefer larger and more visible companies with big customer bases and data sets, especially in industries including retail, services and finance, their research shows.
Bezos, Musk Lead Tech Wealth Retreat as $44 Billion Evaporates
Devon Pendleton – Bloomberg
Amazon’s Bezos leads the way with $9 billion hit to fortune; Even with rout, 500 richest have added $830 billion this year
A banner streak of wealth gains came to an end Thursday for the world’s richest technology billionaires. The industry’s 10 wealthiest people had $44 billion erased from their collective net worths as U.S. equities tumbled the most in almost three months over investor concerns about frothy valuations.
Nasdaq Plunge Is Victory Lap for a Stable of Stock Naysayers
Katherine Greifeld – Bloomberg
Sky-high valuations, volatility cited as reasons for pullback; Tech-heavy gauge fell most since March as high-flyers dropped
Whatever else it signifies, and it may not be much, considering what happened the last time stocks did this, Thursday’s plunge in equities was vindication for bearish strategists whose voices had been getting louder.
Germany’s BaFin Has Run Out of Wirecard Excuses; The launch of a parliamentary inquiry into the fintech darling’s collapse is a chance for real regulatory reform.
Lionel Laurent – Bloomberg
After every financial scandal, the natural question that gets asked is: Where were the regulators? The answer, usually, is asleep at the wheel — or MIA altogether. When the U.S. Securities and Exchange Commission opened a formal probe into Enron in 2001, the energy-trading giant had already lost 83% of its market value and was weeks from declaring bankruptcy. More recently, a string of money-laundering scandals in Europe has shown watchdogs missed warning signs for years.
IHS Markit And BondCliQ Collaborate On Pricing Data
IHS Markit has partnered with BondCliQ to embed US corporate bond pricing content and interactive functionality within thinkFolio, our leading multi-asset investment management platform. The collaboration will provide click-to-view, consolidated, pre-trade, institutional quote data from 34 dealers, and post-trade, normalized, analytics-enriched TRACE data directly within thinkFolio’s modular screens.
Hedge-Fund Founder Arrested Over Neiman Marcus Bankruptcy; Marble Ridge founder Dan Kamensky has been charged with fraud, extortion and obstruction of justice in connection with alleged bid rigging in retailer’s bankruptcy case
Andrew Scurria and Soma Biswas – WSJ
U.S. prosecutors charged a hedge-fund manager with fraud for suppressing a rival bid for a prized piece of bankrupt retailer Neiman Marcus Group Ltd., then trying to cover up the misconduct when it came to light. Dan Kamensky, the founder of Marble Ridge Capital LP, was arrested Thursday and charged by federal prosecutors in New York with securities fraud, wire fraud, extortion and obstruction of justice in connection with his efforts to acquire shares in Neiman’s MyTheresa e-commerce business.
The Economy Is Limping, but Wall Street Is Booming; Panicky investors, pandemic-hit companies turned to banks in the first half, driving fees to an eight-year high
Liz Hoffman – WSJ
Investment-banking and trading revenues hit an eight-year high in the first half of 2020, a counterintuitive boom that shows the heavy hand of the Federal Reserve and a growing gulf between financial markets and the real economy.
Market re-rating of tech sector will bring volatility; As well as Apple and Tesla, Nvidia, Zoom, Salesforce and others have all boomed
Richard Waters – FT
A feature of the stock market for much of this year has been the search for a new valuation level for those parts of the tech sector whose fortunes have been transformed by the coronavirus crisis. But in the dog days of August, things really got out of hand.
London’s Housing Market Lures Hong Kongers Seeking Safe Haven
Poppie Platt – Bloomberg
Realtors in the U.K. capital are seeing a surge of interest; Eased immigration rules are fueling an increase in inquiries
Wealthy Hong Kong residents seeking to escape the city’s political upheaval are flocking to London, offering a potential lift to the capital’s ailing luxury housing market. Realtors are seeing a surge in interest from Hong Kong, driven by falling prices, favorable exchange rates and Prime Minister Boris Johnson’s easing of immigration rules for many residents of the former British colony. The number of Hong Kong clients registering with upmarket real estate agency Chestertons is up nearly 80% this year compared with 2019, while inquiries at Black Brick Property Solutions and Beauchamp Estates are up by about a fifth.
I Study Corporate Welfare. Even I Was Shocked by This Cronyism; A privately owned entity created by the Export-Import Bank allows its customers to also be its owners.
Veronique de Rugy – NY Times
Right under the nose of a president who promised to drain the swamp, one of the government’s shadiest handouts to large banks and big companies looks like it will be renewed for another 25 years. It will not get adequate oversight and congressional review. All it will take is the approval of two out of three U.S. Export-Import Bank directors, who are political appointees.
White House economic adviser Larry Kudlow opens up about battle with addiction
Tamar Lapin – NY Post
White House economic adviser Larry Kudlow opened up about his battle with alcohol and drug addiction during an event hosted by first lady Melania Trump on Thursday.
ISDA Re-elects 12 Board Members
ISDA today announced the re-election of 12 directors during its virtual 35th Annual General Meeting (AGM) board election.
Brazil reaches four million cases of coronavirus amid hopes that infections are starting to slow; Thursday’s rise of 43,773 cases brings total to 4.04million, with 124,000 deaths; Medical specialists have urged caution despite hopes Brazil has reached peak; Experts say cases have been falling in hard-hit Sao Paulo and Rio de Janeiro
Tim Stickings for Daily Mail
Brazil became the second country to reach four million cases of coronavirus last night amid hopes that infections are starting to slow. The latest rise of 43,773 cases brought the total to 4.04million, while another 834 fatalities took the death toll to more than 124,000.
As permanent economic damage piles up, the Covid Crisis is looking more like the Great Recession; How permanent job losses threaten to transform temporary covid closures into a lasting recession
Andrew Van Dam – Washington Post
Long-term unemployment helped define the Great Recession. Countless networks, relationships and skills that bound employee to employer were ripped apart in the global financial crisis. It took about eight years for the unemployment rate to recover from that brutal dislocation.
U.S. Chief of Vaccines Thinks One Is Unlikely by Election Day; That message ran counter to the optimistic assertions in recent days from the White House.
President Trump’s vaccine chief sees a ‘very, very low chance’ of a vaccine by Election Day.
Moncef Slaoui, the chief adviser for the White House vaccine program, said on Thursday that it was “extremely unlikely but not impossible” that a vaccine could be available by the end of October.
Why the Coronavirus More Often Strikes Children of Color; Children in minority communities are much more likely to become infected and severely ill. Many have parents who are frontline workers, experts say.
Roni Caryn Rabin – NY TImes
One of the notable features of the new coronavirus, evident early in the pandemic, was that it largely spared children. Some become severely ill, but deaths have been few, compared to adults. But people of color have been disproportionately affected by Covid-19, the illness caused by the coronavirus, and recent studies have renewed concern about the susceptibility of children in these communities.
Americans complied with coronavirus lockdowns, helping to curb pandemic, new CDC study finds
Alexander Nazaryan – Yahoo News
Virtually everywhere across the United States, people followed directives this spring to stay home to avoid contracting — or spreading — the coronavirus, a new study from the Centers for Disease Control and Prevention found, in contrast to media accounts of noisy demonstrations in favor of “opening up” locked-down states.
Covid-19 Pandemic Ravages World’s Largest Developing Economies;From India to Mexico, countries are hit by worst economic declines since World War II
Kejal Vyas and Vibhuti Agarwal – WSJ
From India to Mexico and Brazil, the world’s biggest developing countries are witnessing some of the steepest economic contractions on record, throwing tens of millions out of work and turning back the clock on gains against poverty. Developing nations haven’t felt this kind of pain since the Great Depression. India’s economy shrank by nearly a quarter, 23.9%, during the April to June period compared with a year earlier, its worst performance since quarterly figures began in 1996. Peru’s economy contracted by 32% during that same period from a year earlier, Mexico’s by 18.9%, Brazil’s by 11% and Turkey’s by 9.5%.
Covid-19 Positivity Rate Might Not Mean What You Think It Does; Measure is important for tracking virus’s spread and helping guide policy, but country lacks data standardization
Jo Craven McGinty – WSJ
The decision to impose school and business closures, travel restrictions and stay-at-home orders to contain Covid-19 is often based on the percentage of tests for the coronavirus that come back positive. But in the U.S., there are no standards for how states report the figure; it’s sometimes calculated using duplicative or irrelevant data; and the meaning of the result is often misconstrued.
The best (and worst) Covid posters; Designers have created clear messages to change public behaviour during the pandemic
Deborah Banjo – FT
“Keep ’em clean” reads a playful poster by graphic artist Sebastian Pren. It shows a cartoonish pair of hands floating among an abundance of soap bubbles, and its message is clear. It was part of the Stay Sane, Stay Safe project, an open call for designers to submit posters, free for users to download, during the pandemic.
UK splits emerge over Covid-19 quarantine lists; Scotland and Wales add Portugal and other countries, but England makes no changes
Jim Pickard and Sarah Neville – FT
Boris Johnson’s government refused to add Portugal and Greece to its coronavirus quarantine list on Thursday, highlighting divisions between England and other UK nations over the restrictions for travellers returning from high-risk countries.
Philippines in Talks With Pfizer, Sinovac for Covid-19 Vaccines
Claire Jiao – Bloomberg
The Philippines will meet with representatives of Pfizer Inc. and the Russian Embassy on Friday as it seeks to source Covid-19 vaccines to combat Southeast Asia’s worst outbreak.
Drugs That Fight Diabetes and Obesity May Treat Covid-19
James Paton – Bloomberg
Overweight, diabetic people known to risk severe Covid illness; Doctors are searching for new therapies to curb the pandemic
Novo Nordisk A/S, the Danish drugmaker, is exploring whether a new class of medicines that helps people lose weight and control diabetes also has potential in fighting Covid-19.
Exchanges, OTC and Clearing
Intercontinental Exchange Completes Acquisition of Ellie Mae from Thoma Bravo
ICE Press Release
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, today announced that it has received regulatory approval and fully completed its $11 billion acquisition of Ellie Mae from leading private equity firm Thoma Bravo.
Eurex adds anonymous negotiation and respondent ranking tool to RFQ platform; The new functionalities will be added to Eurex Exchange’s integrated off-book request for quotes (RFQ) platform, EnLight.
Annabel Smith – The Trade
Eurex Exchange has bolstered its off-book request for quote (RFQ) platform, EnLight, and provided clients the ability to negotiate anonymously and with a new tool that ranks respondents.
TNS expands Euronext deal with equities market data; The extended connection with Euronext will offer TNS clients low-latency access to the exchange group’s equities market data feed.
Annabel Smith – The Trade
Transaction Network Services (TNS) has expanded its connection with Euronext to include access to the exchange’s equities market data feed for clients. The market data and connectivity provider said the extended connection will provide its clients low-latency access to the pan-European exchange group’s equities market data through its TNSXpress Layer 1 solution.
AdUx S.A. lists on Euronext Amsterdam
Today, Euronext congratulates AdUx S.A., the French specialist in digital advertising and user experience, on its secondary listing on Euronext’s regulated market in Amsterdam (ticker code: ADUX).
Euronext announces volumes for August 2020
Euronext, the leading pan-European market infrastructure, today announced trading volumes for August 2020.
Amendment of the GTC to the Connection Agreement and GTC to the Provider Connection Agreement: Increase of limits for owned and/or used 10Gbit/s ETI connections
To allow its customers further growth but also to have enough network capacity to serve new customers, Eurex Exchange has decided to take the following actions:
STOXX® Europe 600 Travel & Leisure Index Futures: Withdrawal of availability for trading for U.S. Participants
As of 5 October 2020, tradability of STOXX® Europe 600 Travel & Leisure Index Futures (Eurex product code: FSTV) will be withdrawn for U.S. Eurex Participants and U.S. investors. Background of this measure is that the index will transition from a non-narrow-based security index to a narrow-based security index.
ASX Monthly Activity Report – August 2020
Straits Times Index (STI) quarterly review – September 2020; No changes to the constituents of the STI
FTSE Russell announces that there will be no changes to the constituents of the Straits Times Index (STI), following the September 2020 quarterly review.
TMX Group Consolidated Trading Statistics – August 2020
TMX Group Limited today announced August 2020 trading statistics for its marketplaces – Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange and Montréal Exchange.
Nasdaq Launches Mini Futures on OMXS30 to Increase Access to Benchmark Index Trading; New OMXS30-based mini futures offer liquid and accessible contracts to the most traded benchmark index in the Nordic region
Nasdaq (Nasdaq: NDAQ) today announced that Mini OMXS30 Futures, providing higher accessibility to the listed futures market for all investors, are available for trading starting today. The contracts are based on OMXS30, Nasdaq’s leading European index containing the 30 most actively traded stocks on Nasdaq Stockholm, including companies such as Volvo, Investor, Ericsson and AstraZeneca.
Nasdaq August 2020 Volumes
Nasdaq (Nasdaq: NDAQ) today reported monthly volumes for August 2020, on its investor relations website. A data sheet showing the monthly volumes and quarterly capture rates can be found at: http://ir.nasdaq.com/financials/volume-statistics
Effective on trade date Monday, September 21, 2020, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice will supersede CME Group Market Regulation Advisory Notice RA2004-5R from July 2, 2020. It is being issued to amend Section 6. of this Advisory Notice based on the adoption of revised standards for meeting the block trade minimum threshold in:
Nodal Exchange Achieves New Records In Environmental Futures In August
Nodal Exchange grew its environmental futures open interest 132% from the prior year, ending August with a record 76,933 contracts of open interest. Nodal Exchange also achieved record market share of open interest in environmental futures contracts with 8.6% market share at the end of August 2020 which is up from 4.7% the prior year. Nodal Exchange also set a new market share record in August 2020 for environmental futures traded volume with 9.3% (up from 3.6% a year ago).
Bardin Hill Investment Partners implements SS&C Eze OMS for fixed income trading; The SS&C Technologies Eze OMS and Geneva systems is being used by Bardin Hill Investment Partners to manage its fixed income strategies and fund accounting.
Annabel Smith – The Trade
Credit manager Bardin Hill Investment Partners has implemented the order management system (OMS) from SS&C Technologies’ Eze Software to bolster its fixed income strategies.
IHS Markit pairs with BondCliQ to extend thinkFolio bond pricing data; The partnership will see IHS Markit thinkFolio users gain institutional US corporate bond quote, and post-trade TRACE data, from BondCliQ.
Annabel Smith – The Trade
IHS Markit has partnered with fixed income market data provider BondCliQ to embed US corporate bond pricing data with its investment management platform, thinkFolio.
Meet Australia’s Youngest Female Fintech Entrepreneur
On this episode of “Bloomberg Equality,” Olivia Molesworth, managing director and founder of Australia’s Bromleigh Capital, explains why she’s backing small Australian businesses with ethical financing. In her mid-20s, Molesworth is the youngest female Fintech entrepreneur running a financing company in the country. She speaks with Bloomberg’s Haidi Stround-Watts and Sophie Kamaruddin.
All fintech companies will use blockchain within 10 years: Aussie government report
Joshua Mapperson – Cointelegraph
The Australian government’s Senate Select Committee on Financial Technology and Regulatory Technology has released a draft report citing blockchain technology more than 50 times.
The report is in response to Australia’s first recession in 30 years as a result of COVID-19, which was confirmed in the June quarter’s negative growth announced on September 2.
Start-up founded by ex-Goldman trader becomes first fintech to complete takeover of a national bank
Hugh Son – CNBC
A tiny start-up led by a former Goldman Sachs trader has become the first fintech firm to complete the acquisition of a nationally-regulated U.S. bank, CNBC has learned.
Jiko, a 23-person company co-founded by Stephane Lintner, has closed a deal to purchase Mid Central National Bank, a 63-year old retail bank based in Minnesota, according to people with knowledge of the transaction. The start-up secured approval for the move from the Office of the Comptroller of the Currency and the Federal Reserve Bank of San Francisco, these people said.
Another Swedish experiment in fintech is a Rorschach test; Sweden’s coronavirus stance has divided global opinion. Klarna is doing the same
Tom Braithwaite – FT
European tech is having a tough time, utterly eclipsed by the US and China. Even fintech, the one area where the region had some bragging rights, is faltering. Monzo’s auditors think it might not survive. Revolut has reported falling revenues. N26 has retreated from the UK. Wirecard has imploded in spectacular fashion.
The Party’s Over for Money-Losing Fintechs as Funding Tap Shuts
Theo Golden – Bloomberg
Europe’s fintech upstarts have added millions of users and billions of deposits in their venture-capital fueled boom the past few years. And now the fight to one day turn a profit is becoming a battle for survival. Monzo and Revolut, two of the industry’s leaders, said losses more than doubled and tripled respectively last fiscal year. Monzo said that while it had enough capital for at least the next 12 months, its ability to continue to operate as a “going concern” had been thrown into question in a more challenging fundraising environment. N26 shut its U.K. business this year.
If Bitcoin Crashes Below $10,000 It’s All Over—Here’s Why
Billy Bambrough – Forbes
Bitcoin has declined sharply this week, losing over 5% in under 24 hours and causing traders to nervously eye the psychological $10,000 per bitcoin level.
The bitcoin price lost $1,000 in a matter of hours, falling under $11,000 per bitcoin on Thursday morning with the U.S. stock market posting its biggest sell-off since June by the close of play as stocks retreated from all-time highs, led lower by tech giants.
California Man Pleads Guilty in $722 Million Crypto Fraud Plot
Olga Kharif and Bob Van Voris – Blooomberg
A California man pleaded guilty to a cryptocurrency mining fraud of at least $722 million that prosecutors said amounted to a “high-tech Ponzi scheme.” Joseph Frank Abel, of Camarillo, admitted he conspired to offer and sell unregistered securities and subscribed to a false tax return as part of the BitClub Network, the U.S. said in a statement Thursday.
How programmable digital assets may change monetary policy
Manmohan Singh, author of “Collateral and Financial Plumbing – FT
Monetary policy in the United States, until the early 1980s, was simple and conducted exclusively within the traditional banking system. Then, slowly, it began to seep into securities markets via rehypothecation and other uses of collateral. These methods gradually surpassed in importance the fractional reserving of dollar deposits in the traditional banking system.
Yield farming satire MEME turns into multi-million dollar crypto project
Samuel Haig – Cointelegraph
Degenerator, or MEME, an obscure project that began life as an airdrop to Telegram users, has managed to garner a $3 million market cap and is seeking to carve a niche for itself as a non-fungible token (NFT) farming protocol.
MEME emerged from a joke posted by ConsenSys’ DeFi product lead Jordan Lyall, who created a joke advertisement ‘The Degenerator’ — a fictitious tool for creating ponzinomics-inspired yield farming tokens.
Revealed: How North Korean hackers launder stolen crypto
Felipe Erazo – Cointelegraph
British multinational security company BAE Systems and the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, have published a report revealing how cybercriminals launder cryptocurrency.
According to the study Follow the Money money laundering cases via crypto are still relatively small compared to the huge volumes of cash laundered through traditional methods like wire transfers.
Latin America sends a ton of crypto to Asia, and vice versa
Felipe Erazo – Cointelegraph
New York-based blockchain analytics firm Chainalysis has published new research highlighting there have been up to 200,000 crypto transactions in the past year, worth more than $1 billion between Latin America and Asia.
The study Latin America Mitigates Economic Turbulence with Cryptocurrency, analyzed crypto trends in Latin America between July 2019, and June 2020, and shows that banking access issues and the need for remittances are driving unique patterns of cryptocurrency usage, especially in crossborder commercial-related transactions.
BitMEX to List Futures for New Crypto Coins for First Time in Over 2 Years
Zack Voell – Coindesk
BitMEX said early Friday morning it plans to introduce futures markets for two cryptocurrencies, the first new coins to appear on the exchange in over two years.
Trump orders review to strip ‘anarchistic’ cities like New York of federal funding, report says; Cities targeted by Mr Trump include New York City, Portland, Seattle and Washington DC
Graig Graziosi – The Independent
Donald Trump said he will order the federal government to begin the process to defund New York City, Washington, DC, Seattle and Portland, which he has deemed “lawless” by allowing protests and cutting police budgets.
Biden says Trump ‘legitimises the dark side of human nature’ in Kenosha speech; In phone call, former vice president said Jacob Blake ‘talked about how nothing was going to defeat him, how whether he walked again or not he was not going to give up’
Alex Woodward – The Independent
Joe Biden said Donald Trump’s remarks following racist violence in Charlottesville in 2017 had legitimised “the dark side of human nature” as the nation reels from police killings of black Americans and weeks of unrest.
Trump said U.S. soldiers injured and killed in war were ‘losers,’ magazine reports
Colby Itkowitz, Alex Horton and Carol D. Leonnig – Washington Post
President Trump called U.S. soldiers injured or killed in war “losers,” questioned the country’s reverence for them and expressed confusion over why anyone would choose to serve, according to a new report that the White House has called “patently false.”
Republicans are done trying to solve the pandemic and the economic crisis
Paul Waldman – Washington Post
It isn’t a surprise that at their convention, President Trump and Republicans wanted to put the best face possible on our current economic crisis, painting it as all but behind us as we quickly get back to the paradise of prosperity they supposedly brought us before. What’s much stranger is that they actually seem to believe it.
Trump’s own officials just confirmed that Russia is amplifying his lies
Greg Sargent – Washington Post
Russia has sought to “amplify” concerns over the integrity of U.S. elections by promoting allegations that mail-in voting will lead to widespread fraud, according to an intelligence bulletin obtained by ABC News, again echoing a frequent and unfounded complaint raised by President Donald Trump.
The Conspiracist in Chief Will Save Us All; Republicans have a QAnon problem, which means the rest of America does too.
Jamelle Bouie – NY Times
Conspiratorial thinking is an elemental part of American political life, one that stretches back to before the founding of the United States. “The conviction on part of the Revolutionary leaders that they were faced with a deliberate conspiracy to destroy the balance of the constitution and eliminate their freedom had deep and widespread roots — roots elaborately embedded in Anglo-American political culture,” the historian Bernard Bailyn wrote in his 1968 book, “The Ideological Origins of the American Revolution.” (Bailyn died this summer at age 97.)
The Fed’s quest for higher inflation looks doomed without Congress; Chair Powell wants prices to pick up, but needs support in the form of fiscal stimulus
Colby Smith – FT
In the week since the Federal Reserve announced that it would tolerate periods of higher inflation, top officials past and present at the US central bank have tried to fill in the sketch laid out by its chair, Jay Powell.
Russian troll farm makes US comeback; Internet Research Agency said to be behind leftwing website was also active during 2016 election
Max Seddon and Hannah Murphy – FT
After the FBI tipped off Facebook that the obscure leftwing website Peace Data was a clandestine front for Russia this week, the site’s anonymous administrators responded the only way a troll knows how: by brazenly posting through the scandal.
Trump Push for TikTok Fee Confounds Washington Security Experts
David McLaughlin and Naomi Nix – Bloomberg
Laws don’t give Trump authority to seek commission on sale; President likens government’s cut of any sale to ‘key money’
President Donald Trump insists that any sale of the TikTok video app include a cut for the federal government, yet that demand has baffled policy experts and lawyers who say such a payment would stretch his authority under U.S. law. The fee has emerged as an unusual sideshow in the administration’s effort to pressure China’s ByteDance Ltd. to sell TikTok’s U.S. operations to an American owner over national security concerns. Since calling for the sale last month, Trump has repeatedly said he would like the U.S. to be “well compensated” from the transaction.
Remembering David Graeber, a Force Behind Occupy Wall Street; He was an anthropologist, an anarchist, and a provocative polemicist.
Drake Bennett – Bloomberg
David Graeber, who died of undisclosed causes on Wednesday at the age of 59, was a prominent anthropologist who taught at the London School of Economics—and famously, an anarchist—but he disliked being referred to as “the anarchist anthropologist,” as he inevitably was. Most people, he thought, misunderstood what anarchism meant. Even those who didn’t associate it with running street battles and wanton crimes against property dismissed it as farcically utopian. “Most people don’t think anarchism is a bad idea, they think it’s insane,” he told me. “Yeah, sure it would be great not to have prisons and police and hierarchical structures of authority, but everybody would just start killing each other. That wouldn’t work, right?”
Trump Made a Promise to Save Coal in 2016. He Couldn’t Keep It; Despite the campaign vow, 2020 coal production is expected to be down 31%. The bleak coal outlook could cost the president support in the Nov. 3 election.
Ari Natter, Will Wade – Bloomberg
President Donald Trump spent more than $1 billion in taxpayer funds, rolled back environmental rules and tried to stop power plant closings to fulfill a vow he made to West Virginia coal miners in the 2016 campaign.
Regulatory Technology (RegTech) Market Is Expected to Grow at a CAGR of 25.6% by 2025 | Bearingpoint, Accuity, MetricStream, Broadridge, Traiana, NICE Actimize, Acin; Global Regulatory Technology (RegTech) Market Size, Status and Forecast 2020-2025
The Regulatory Technology (RegTech) market report is the most important research for who looks for complete information on the Regulatory Technology (RegTech) market. The report covers all information on the global and regional markets including historic and future trends for market demand, size, trading, supply, competitors, and prices as well as global predominant vendor’s information. The forecast market information, SWOT analysis, Regulatory Technology (RegTech) market scenario, and feasibility study are the vital aspects analyzed in this report.
ESMA finds no material evidence of harmful impact of MiFID II unbundling; The European regulatory watchdog has seemingly countered claims that unbundling has harmed research coverage and quality.
Annabel Smith – The Trade
There is no material evidence of harmful effects from the MiFID II unbundling rules for research payments, the European Securities and Markets Authority (ESMA) has stated.
Thirteen sued for £178m over alleged fraud at London Capital & Finance; Executives alleged to have spent investors’ cash on horses, helicopter and private members’ club
Tabby Kinder – FT
Thirteen people including a former UK energy minister are being sued for £178m in connection with an alleged fraud at London Capital & Finance, where investors’ cash is said to have been used to buy horses, a helicopter and lifetime memberships to Annabel’s, the Mayfair private members’ club.
ESMA starts recruitment for Executive Director
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today a vacancy notice to fill the position of Executive Director of the Authority.
ESMA confirms Securitisation Regulation requirements entry into force on 23 September 2020
rities and Markets Authority (ESMA), the EU’s securities markets regulator, confirms that the different elements of the new regime under the Securitisation Regulation (SR) will come into force on 23 September 2020.
FINRA Sanctions Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC More Than $2 Million for Supervisory Violations Related to Variable Annuity Switches; Firms to Pay $1.4 Million in Restitution to Approximately 100 Affected Customers
FINRA announced today that Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC (Wells Fargo) have agreed to pay more than $1.4 million in restitution, plus interest, to approximately 100 customers and fines totaling $675,000 for failing to supervise recommendations that customers switch from variable annuities to investment company products.
SEC Charges Fund Manager for Fraud in Securities Offering in Neiman Marcus Bankruptcy
The Securities and Exchange Commission today charged Daniel Kamensky, co-chair of the unsecured creditors committee in the Neiman Marcus Group Ltd. LLC Chapter 11 bankruptcy proceedings, with abusing his position on the committee to attempt to benefit a New York-based management firm that he founded and where he served as Managing Partner and Portfolio Manager.
CFTC Charges 10 Commodity Trading Advisors for Failing to Maintain NFA Memberships
The Commodity Futures Trading Commission today announced the filing of charges against 10 commodity trading advisors (CTAs) for failing to obtain and maintain membership in a registered futures association (RFA) as required by CFTC regulations. Compliance with this provision necessarily requires all registered CTAs to maintain membership in the National Futures Association (NFA), which is the only RFA currently registered with the CFTC.
Investing and Trading
Risk Creeps Into Municipal Bond Market, Yet Prices Stay High; Rock-bottom yields leaves risk-averse investors with few options
Heather Gillers – WSJ
Add the municipal market to the long list of American institutions reshaped by Covid-19. The pandemic is threatening the creditworthiness of many municipal securities long seen as safe investments—bonds for higher education, health care, tourism and travel.
Private investors left in the dark by online AGMs; Virtual meetings make it easier for companies to ignore shareholder questioning, research finds
Madison Darbyshire – FT
Private investors seeking to question company strategy at annual general meetings are increasingly being ignored as AGMs have moved online, research has found.
How much of the US tech edge is patent nonsense? A socially questionable and expensive legal system appears to be shackling the value of true innovation
John Dizard – FT
Any global investor, or would-be innovator, might gaze across at the ice wall of patent knowledge surrounding US tech companies and conclude it cannot be breached. It seems that if any group creates a way around the existing engineering methods, they will only be torn to pieces by aggressive US lawyers.
This is nuts, when does Tomra crash?
Jamie Powell – FT
By the close of play on Wednesday evening the shares of Tomra Systems, a EUR5.7bn Norwegian recycling and optical sorting company, hovered just below its all-time-high at 403 krone.
‘Downbeat’ US executives dump most stock in a month since 2015; Record-breaking equity rally encourages company executives to cash in
Richard Henderson – FT
US executives sold $6.7bn of stock in their own companies last month, cashing in on a record-breaking market rally with the biggest burst of selling in five years. The dollar value of sales by 1,042 chief executives, chief financial officers and company directors in August topped any month since November 2015, according to figures compiled for the Financial Times by Smart Insider, a data provider. The number of executives selling was the highest since August 2018.
Wall Street has never seen a company like Palantir; Controversial and heavily lossmaking, the consultant and maker of surveillance software is going public
Richard Waters – FT
Part software company, part consultancy, with a controversial dependence on US government and military work, Palantir only has 125 customers and remains heavily lossmaking after 17 years in business.
No, This Isn’t a Repeat of the Dotcom Crash. Yet; For one thing, the bubble this time is in the monopoly profits of the leading tech companies, rather than their valuations.
John Authers – Bloomberg
A Change in the Script
So that made a change. In absolute terms, a lot of money was lost Thursday as U.S. stocks had their biggest sell-off since June. For the most spectacular example, Apple Inc., still the world’s first and only $2 trillion company, has lost $219 billion in market cap in the two trading days since the close Tuesday. For context, that is roughly the value of Merck & Co. or Intel Corp., and is much bigger than the total current market cap of Exxon Mobil Corp., for long the world’s largest company.
Skeptic’s Roadmap Pinpoints Five Risks to Europe’s Market Rally
John Ainger and Nikos Chrysoloras – Bloombreg
Key threats to euro optimism include Brexit, U.S. vote outcome; EU recovery fund isn’t a done deal as second virus wave looms
The bout of investor exuberance over the European Union’s economic prospects that followed July’s landmark recovery fund deal may prove as brief as Belgian summers. The euro surged above $1.20 this week for the first time in over two years, spurred on by the EU paving the way for unprecedented integration in the region through its 750 billion euro ($888 billion) jointly-financed recovery plan.
Megacap Tech Stocks Drive Nasdaq to Biggest Tumble Since March
Sarah Ponczek – Bloomberg
Nasdaq 100 declines 5.2%, with Apple and Tesla hammered; Warning signs mounted throughout the week after historic run
The megacap tech shares that drove stocks to record after record plunged Thursday as bearish investors reclaimed the upper hand on U.S. equity markets, at least for a day. The Nasdaq 100 sank 5.2% and posted its biggest rout since March. Apple Inc., Tesla Inc. and Amazon.com Inc., among the biggest contributors to the historic five-month rally, lost at least 4.6%. The index had gained in 11 of 13 sessions to notch records almost daily, defying strategists who warned that valuations had become too stretched.
Louis Dreyfus in Talks to Sell Stake to Abu Dhabi’s ADQ
Andy Hoffman, Dinesh Nair, and Nicolas Parasie – Bloomberg
Storied family crop trader needs cash to pay down loans; Abu Dhabi seeks more food security amid pandemic concerns
Louis Dreyfus Co., the storied agricultural trader controlled by billionaire Margarita Louis-Dreyfus, is in talks to sell a stake in the firm to Abu Dhabi sovereign wealth fund ADQ, according to people familiar with the matter. A successful deal would give the trading house an injection of much-needed cash as its controlling shareholder seeks funds to pay down loans, but also open it to ownership outside the Louis-Dreyfus family for the first time in its 169-year history.
Tech Selloff Seen as Removal of Froth Rather Than a Warning Sign
Joanna Ossinger – Bloomberg
Thursday’s megacap tech selloff is likely just some froth coming off a hot market rather than a portent of a larger pullback to come. That’s the view of most market participants after the tech-heavy Nasdaq 100 suffered a 5.2% decline, its worst since March. Profit taking after a good run, seems to be the consensus explanation. Robust purchases of downside hedges, the possibility for positive news on the U.S. labor market and the potential for longer-term earnings growth, all suggest technology shares can remain supported.
Environmental, Social and Corporate Governance
Trump’s ESG Plan, Shunned by Fidelity, Spawns U.S.-Europe Divide
It’s become a hackneyed truism in the age of Covid-19 that global problems need coordinated global solutions. When it comes to combating climate change, the U.S. appears to be setting out alone.
The Trump administration has proposed a rule change that would make it more difficult for fund managers to incorporate environmental, social and governance factors when making investment decisions. At the same time, European policy makers have made the greening of the region’s economy its top ambition and have placed unprecedented demands on the investing industry to contribute to that goal.
ESG bond funds held back by fear of criticising US, research suggests
Steve Johnson – Financial Times
Fund managers’ unwillingness to criticise western governments, particularly that of the US, is holding back the development of “sustainable” government bond funds, research suggests.
While corporate bonds can be scored using a similar ESG scoring system to that used for equities, “there are still question marks over how to best evaluate government debt, where there is a fine line between making an objective ESG assessment and straying into political territory”, said Kenneth Lamont, research analyst for passive strategies at Morningstar.
ESG Index Funds Reached $250 Billion in Q2
Ben Hernandez – ETF Trends
Needless to say, environmental, social and governance (ESG) investing has been one of the few bright spots in 2020. Even during a challenging second quarter for the capital markets, ESG index funds reached $250 billion in assets.
Per a CNBC report, “the number of sustainability-focused index funds, and their assets, have doubled over the past three years, according to a report from Morningstar released Wednesday. The financial research firm said that as of the end of the second quarter 2020, there were 534 index funds focused on sustainability, overseeing a combined $250 billion. In the U.S., which has lagged Europe in ESG investing, assets in sustainable index funds have quadrupled in the last three years and now represent 20% of the total.”
China Banks Plan $29 Billion in Bond Sales to Replenish Capital
ICBC, Bocom, Guangfa among banks planning bond sales; Perpetual, Tier-2 bond sales may reach 1 trillion yuan
Chinese banks are planning near record bond sales this month to replenish capital levels weakened by a surge in cheap loans to struggling businesses and sliding earnings. Industrial & Commercial Bank of China Ltd., the world’s largest lender, and three domestic competitors plan to sell a combined 195 billion yuan ($28.5 billion) of perpetual or tier-2 capital bonds in September, said people working on the plans who asked not to be named discussing internal matters. Their issuance alone would amount to the second highest monthly sales ever in China, according to data compiled by Bloomberg.
Billionaire Tepper Takes Heat for Laying Off Panthers Staff
Brandon Kochkodin and Jack Pitcher – Bloomberg
NFL owner says ‘not good’ for workers to sit idle for a year; Some NFL teams have cut employees, while others holding off
Billionaire David Tepper is on the defensive about his sports organization’s decision to lay off workers during the pandemic. Tepper Sports and Entertainment, the holding company that includes the hedge fund titan’s stakes in the Carolina Panthers football team and Charlotte FC soccer team, has furloughed or laid off about 30 employees since May.
Hedge Funds’ Beloved NYC School Ditches In-Class Learning in ’20
Amanda L Gordon – Bloomberg
Success Academy will go fully remote through at least December; The move is a dramatic shift from its hybrid learning plan
Success Academy, the largest charter-school network in New York City, has abandoned its plan to bring students back into the classroom and opted to go fully remote through at least December, the network told families and staff Thursday. Uncertain building readiness and evolving regulations influenced the decision, which affects roughly 20,000 students. A decision about 2021 will come closer to December, spokeswoman Ann Powell said.
China’s yuan could become the world’s third largest reserve currency in 10 years, Morgan Stanley predicts
Evelyn Cheng – CNBC
Increased foreign investment into Chinese markets could boost the usage of the yuan, pushing it to become the third largest reserve currency in the world — behind only the U.S. dollar and the euro, Morgan Stanley analysts predicted in a report distributed Friday.
China Allows for Stronger Yuan as Xi Turns Focus to Home
Beijing is allowing faster gains in the yuan as it seeks to cheapen imports and bolster weak consumer spending. That’s one theory touted by DBS Bank Ltd. and Mizuho Bank Ltd., who say a stronger yuan is ideal for Beijing at a time when Chinese Pre
Remote working could breathe new life into neglected seaside towns across the UK; The hope is that, unshackled from city centre offices, workers – especially those with young families – will choose to live in smaller, more scenic towns, writes Colin Drury
Since as long as I can remember, I’ve loved the British seaside. I was first taken to Clacton when I was just a couple of months old. There’s cine footage somewhere of me in my nana’s arms on the beach, my grandfather in the background wrestling with a windbreak, my nana’s expression identifiably that of someone who has lived to see the advent of the Spanish package holiday and is wondering why she’s not on one.
What You Can No Longer Say in Hong Kong; A new law takes aim at dissent, creating a challenge to free expression. We documented the changing nature of speech.
Jin Wu and Elaine Yu – NY Times
A sweeping national security law passed on June 30 instantly altered the lives and liberties of Hong Kong’s residents, criminalizing words and images that just hours earlier had been legally protected free speech.
New Zealand Suspends Live Cattle Exports After Ship Capsized Off Japan; Animal rights activists said the move did not go far enough. A second man plucked from the sea later died, and the carcasses of dozens of cows were spotted in the water.
Mike Ives, Isabella Kwai and Makiko Inoue – ENY Times
New Zealand has suspended the export of live cattle after a ship that left its shores with 43 crew members and nearly 6,000 cows capsized off Japan this week, raising fresh questions about the safety and ethics of transporting livestock by sea.
Malaysia Drops Goldman Sachs Criminal Charges Over 1MDB; The Wall Street bank in July agreed to pay Malaysia $2.5 billion and guaranteed the recovery of $1.4 billion in assets allegedly stolen from the government investment fund
Chester Tay – WSJ
Malaysia has dropped criminal charges against units of Goldman Sachs Group Inc. over the bank’s role in the alleged theft of billions of dollars from a government investment fund, a key step under the terms of a recent $3.9 billion settlement.
Gold Imports Rebound in India
Shruti Srivastava and Swansy Afonso – Bloomberg
Inbound purchases by India more than doubled in August; Country is set to enter peak demand season in coming months
India’s gold imports more than doubled last month ahead of the start of key festivals in the world’s second-biggest bullion consumer. Inbound shipments climbed to 35.5 tons in August from 14.8 tons a year earlier, according to a person familiar with the data, who asked not to be identified as the information isn’t public. Imports were also higher than July’s 25.5 tons. Finance Ministry spokesman Rajesh Malhotra didn’t immediately respond to a call to his mobile phone.
A new City cause for Gina Miller; Brexit opponent is campaigning for a better system for complaining about regulators
Matthew Vincent – FT
With Brexit getting done — at least as far as the UK government is concerned — that vocal opponent of exiting the EU, Gina Miller, is now trying to prevent other economic harms. As well as campaigning to have crowdfunding platforms police their misuse by criminals, she is also seeking a better system for complaining about City regulators. This week, Miller joined a Zoom-call symposium aimed at preventing a change to the complaints procedure that would cap compensation for watchdog errors at £10,000.
Home Office unclear on returning asylum seekers to EU post-Brexit; Officials do not know what rules will be even as number of migrants making Channel crossing rises
Robert Wright – FT
Home Office officials admitted on Thursday they did not know whether the UK would still be able to return asylum-seekers to EU countries where they had previously lived or sought asylum after Britain’s Brexit transition period expires at the end of the year. The officials’ remarks, made to MPs on the home affairs committee, come as the number of migrants making the hazardous crossing of the Channel in small boats from France has risen sharply this summer. Unofficial estimates show 400 migrants made the crossing on September 2 — a record for a single day.
Industry warns of Brexit border chaos; UK logistics groups call for meeting with Gove and Sunak as concerns rise over preparations
Peter Foster – FT
The UK’s leading customs and logistics associations have demanded an “urgent” meeting with chancellor Rishi Sunak and Cabinet Office minister Michael Gove after warning that Brexit border preparations are inadequate and risk causing “severe” disruption to supply chains next year.
Tories Defend Brexit Border Plans as Industry Warns of Chaos
Joe Mayes and Alex Morales – Bloomberg
Transport Secretary Shapps says supply chains will hold up; Freight industry has warned of ‘critical gaps’ in preparations
Boris Johnson’s government said it will be able to avoid border chaos when the U.K. completes its split from the European Union despite stark warnings from industry over its lack of readiness. A government memo, first reported by Bloomberg News on Thursday, warned there are “critical gaps” in its Brexit plans, while logistics experts have highlighted the threat of chaos at ports and shortages of key products if a critical IT system isn’t finished in time.
To Build Emotional Strength, Expand Your Brain; The quest to understand something new is a key factor to building the resilience necessary to weather setbacks and navigate life’s volatility.
Kerry Hannon – NY Times
Eight years ago, while working as an assistant Cuyahoga County prosecutor in Cleveland, Gayle Williams-Byers was in the throes of a serial killer case when she decided to take horseback-riding lessons.
Amazon Drivers Are Hanging Smartphones in Trees to Get More Work
Spencer Soper – Bloomberg
A strange phenomenon has emerged near Amazon.com Inc. delivery stations and Whole Foods stores in the Chicago suburbs: smartphones dangling from trees. Contract delivery drivers are putting them there to get a jump on rivals seeking orders, according to people familiar with the matter.