April Jobs Report to Show Record Unemployment From Coronavirus

May 8, 2020

First Read

CBD Demand High, Fewer CBD-Hemp Acres Expected in Key States in 2020
Thom Thompson – John Lothian News

Hemp can be a confusing, jargon-heavy topic. Please see the “Background” section below for a description of the hemp industry that we hope will help with terminology. This report focuses on CBD-rich hemp, the production of which dominates U.S. output of industrial hemp.

As part of our evolving coverage of all aspects of the cannabis business, John Lothian News is passing on information and insights about industrial hemp to our readers on a monthly basis. Our partner in this endeavor, PanXchange, last year launched an electronic market for businesses all along the CBD-oriented hemp supply chain. Their monthly newsletter provides ample interesting data as well as analysis for, chiefly, CBD-oriented hemp markets.

CBD-hemp prices

CBD-based products have established a strong foothold in the alternative therapeutics niche of the consumer market. The COVID-19 outbreak, whose widespread shutdown orders obliterated much of the storefront demand for CBD products, has prompted a surge in online purchases. Some observers seem to believe that COVID-19 has led to a secular increase in demand for CBD due to its alleged calming and soporific qualities.

To read the rest of this article, go here.


Hits & Takes
By JLN Staff

We are almost at 50 percent filled for our Bachelier Options Model panel set for Thursday, May 14 at 3:30 PM Chicago time. The profile of the attendees to date is: high level executives in risk management functions at exchanges, brokerages, clearinghouses and technology firms. Send an email to me at johnlothian@johnlothian.com if you would like to attend.

We had the prep call for the Bachelier panel yesterday and it looks like a good 30 minutes of content. We will also have up to 15 minutes available for questions from the audience.

Myriam Herrera at Pathway to Adventure Council of Boy Scouts of America has reported that firms who have offered Trading Tech merit badge workshops have largely agreed to offer virtual merit badge workshops this summer. If you are interested in supporting this program, now is a great time to step up. I am glad to talk to you about how to become a merit badge counselor and hold an online class.~JJL


Nasdaq’s Phil Mackintosh had a column yesterday titled “NMS II: An Odd Solution for the Odd Lot Problem” on a proposal that involves splitting the old National Best Bid and Offer (NBBO) into two new kinds of BBO. He explains why he doesn’t think that fix solves all the problems it means to address. Read it here. ~SR


JLN checks in with Supercritical on banking relief and a scramble for new canna licenses

In the latest JLN update on the legal cannabis marketplace, Thom Thompson interviews Sparky Rose and Kerry Jordan, principals of the consultancy Supercritical, about possible legislative relief for cannabis banking as well as the impact of added Illinois licenses for craft growers and infusers.

Listen to the podcast »


Flash Crash — the trading savant who crashed the US stock market; Liam Vaughan’s account of maths prodigy Navinder Sarao is a cautionary tale on modern finance
Katie Martin – FT
It is hard to imagine a person more poorly suited to his environment, more destined for disaster, than Navinder Singh Sarao. Five years ago the mathematics prodigy turned trader, cheeky schoolboy turned supposed master criminal, contrived to have himself hunted down by the FBI for crashing the US stock market — all from a computer in his bedroom at his parents’ home under a flight path in drab London suburbia.

***** Sarao did not cause the stock market crash. You can save your money on this one.~JJL



Buffett’s Annual Charity Auction Is Postponed During Pandemic
Katherine Chiglinsky – Bloomberg
Warren Buffett’s annual charity auction will be delayed because of the pandemic. The auction, which normally takes place in May or June, will be held later this year, according to an emailed statement Thursday from Glide, the San Francisco charity that benefits from the fundraiser. The event has raised nearly $35 million over 20 years.

*****A zoom meeting just does not have the same cachet as a lunch.~JJL


CryptoMarketsWiki Coin of the Week: Zcash (ZEC)
According to a study by the Electric Coin Company (ECC), the operator of Zcash, and conducted by RAND Europe, criminals on the darkweb who use cryptocurrency prefer bitcoin over Zcash, despite Zcash’s superior privacy features. Zcash has long been rumored to be the favorite of criminals for its ease of transacting privately; according to the recent study, however, the significantly larger number of bitcoin (BTC) transactions on the bitcoin blockchain enable criminals to “obfuscate money laundering in bitcoin.”



Thursday’s Top Three
Our top story Thursday was Ken Griffin’s Shutdown Playbook Kept Him on Top of Markets from Bloomberg. Second was the FIA’s FAQs on negative pricing in exchange-traded futures and options. Third was the Amazon.com page for Margaret Wiermanski’s new novel “Silent Partners,” a financial who-done-it set in the Chicago derivatives business, which John recommended in the newsletter.


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Lead Stories

April Jobs Report to Show Record Unemployment From Coronavirus; The jobless rate could approach the peak of 25% that economists estimate was hit during the Great Depression
Sarah Chaney and Eric Morath – WSJ
The unemployment rate likely rose in April to a record as employers shed millions of jobs, evidence of the economic destruction wrought by the coronavirus pandemic. Economists surveyed by The Wall Street Journal forecast the April unemployment rate climbed to 16% from 4.4% in March, which would be the highest jobless rate for records tracing back to 1948. They also expect the economy lost nearly 22 million jobs from business closures and other disruptions triggered by the coronavirus pandemic. By comparison, the steepest monthly loss on record back to 1939 was 1.96 million jobs in 1945, at the end of World War II.

Cash Havens With $4.8 Trillion Fret Unthinkable Negative Returns
Maria Elena Vizcaino, Alex Harris, and Emily Barrett – Bloomberg
Money-market fund managers get creative to preserve returns; Low Treasury yields are ‘cost of owning cash’: Goldthwait
Money-market mutual funds, the ultimate havens for investors looking to preserve capital, once again are trying to maneuver in a zero interest-rate environment. The problem this time? They’re sitting on twice as much cash.

StanChart and HSBC face losses on loans to rice trader; Phoenix Commodities seeks debt restructuring after racking up $450m of currency hedge losses
Robert Smith, Neil Hume and Cynthia O’Murchu – FT
Standard Chartered and HSBC are facing losses of millions of dollars in loans to one of the world’s largest rice traders, in the latest of a string of high-profile blow-ups and scandals to hit the commodity trading industry. Phoenix Commodities, a Dubai-based company that specialises in agricultural products, is looking to restructure its debt after racking up $450m of losses on currency hedges that went haywire during violent market swings in February and March.

BOE Extends Deadlines in Crackdown on Scandal-Hit Libor Rate
William Shaw – Bloomberg
Changes to collateral arrangements in lending to banks delayed; Move highlights stubborn dependency on tainted benchmark
The Bank of England has delayed plans to encourage banks to abandon the London interbank offered rate, as efforts to phase out the discredited benchmark falter. Moves by the BOE to use its lending operations to promote replacements will be now be put back to April 2021, from October this year. The measures involve increasing so-called haircuts applied to banks using Libor-linked collateral to borrow, in an effort to make alternatives more appealing.

It’s JPMorgan vs. Citi as Wall Street Splits on Market Direction
Joanna Ossinger – Bloomberg
Wall Street’s biggest firms are divided on where markets are heading to next. While most risk assets are well off their mid-March lows, when uncertainty about the global impact of the coronavirus outbreak was at its peak, there is little consensus on what is to follow. At the core of the debate is the long-term effectiveness of the massive stimulus from central banks and governments.

Singapore Police Raid Oil Trader After HSBC Allegations
Andrea Tan, Alfred Cang, and Joyce Koh – Bloomberg
Singapore’s police force raided the office of oil trader ZenRock Commodities Trading Pte Ltd. following allegations made by HSBC Holdings Plc that the company was involved with a number of “dishonest” transactions, according to people with knowledge of the matter. The raid followed a hearing in Singapore’s High Court on Friday concerning HSBC’s application that ZenRock be placed under judicial management, the people said, asking not to be identified because they’re not authorized to speak publicly.

Turkey bans FX trades with UBS, Citi and BNP as lira hits record low; Ankara’s banking regulator acts after currency slides below level reached in 2018 crisis
Laura Pitel and Adam Samson – FT
Turkey has frozen a trio of major international banks out of its currency market as it stepped up efforts to stop a wave of selling that sent the lira tumbling to a record low on Thursday.

India to Take on Offshore Currency Markets Amid Virus Tumult
Subhadip Sircar – Bloomberg
India INX, NSE IFSC to launch forex-settled rupee derivatives; Contracts may take time to become popular, analysts say
India is taking its first baby steps to tackle a growing offshore market for its currency. Two exchanges — India International Exchange (IFSC) Ltd. and NSE IFSC Ltd. — will on Friday begin trading foreign-exchange settled rupee derivatives, part of a push to bring the market back home.

Two New Directors Join ISDA Board
The International Swaps and Derivatives Association, Inc. (ISDA) today announced that two new directors have joined its Board of Directors.
The new directors are:Tina Hasenpusch, Managing Director, Global Head of Clearing House Operations, CME Group. aihei Okabe, Managing Director, Head of Derivatives Trading, Mizuho Securities Co., Ltd. “We are very fortunate to have two such highly experienced, senior market professionals join the ISDA Board. As we deal with and absorb the lessons from the coronavirus outbreak, Tina and Okabe-san’s input and insight will be extremely valuable in helping to ensure the derivatives market continues to be safe and efficient,” said Eric Litvack, ISDA’s Chairman.

Trumid sees electronic bond trading volumes surge 500%; Electronic corporate bond trading jumped at Trumid in April, with the firm’s anonymous all-to-all protocol proving useful to traders seeking liquidity.
Hayley McDowell – The Trade
Trumid has said total volume on its electronic corporate bond trading platform surged 500% in April, after setting new trade volume records every month so far this year.

The Pandemic Has Made Sudden Heroes of the Tech Companies—For Now; Shelter-in-place orders have made us more enamored of the very same tech platforms we love to hate. But consumers’ ambivalence will return.
Laura Forman -WSJ
Technology companies: villains or heroes? Oppressive or empowering? The hazards of technology have vexed consumers even as they’ve enjoyed its warm embrace. But the pandemic has tilted the balance, at least for now. Shelter-in-place orders have, to varying degrees, kept the world inside. These mandatory shut-ins appear to have made us more enamored of the very same tech platforms users very recently loved to hate.

Economic Fallout From Coronavirus Puts Euro to the Test; The euro is weakening against the dollar this year as discord between countries hobbles the region’s response to historic recession
Caitlin Ostroff – WSJ
Europe’s response to the economic turmoil brought about by the global coronavirus shutdown is rekindling debate about the European Union’s financial unity. The euro has dropped 3.5% this year to $1.08, near its lowest level against the U.S. dollar since May 2017. The currency could lose another 5% by year-end, according to forecasts from Bank of America. That marks a sharp turnaround for a currency that posted its calmest year on record in 2019, when it slid 1.8%.

UK regulators delay two-thirds of new measures in response to Covid-19; Rules concerning Brexit preparations prioritised over tougher environmental standards
Matthew Vincent in London – FT
UK financial regulators have disclosed that two-thirds of their planned initiatives for the next year have been delayed by coronavirus, with Brexit preparations and bank capital rules taking priority over tougher environmental standards.

The Pandemic Is Transforming the Wealth Management Industry, UBS Says
Alfred Liu – Bloomberg
Virus is making investors more cautious, APAC co-head says; UBS says one third of Hong Kong staff still working from home
The Covid-19 pandemic has sparked dramatic changes to the wealth management industry, making clients more cautious, more digitally savvy and more interested in sustainable investments, according to a UBS Group AG executive in Hong Kong. “The whole pandemic has transformed the business and also the way we operate,” said Amy Lo, co-head of Asia Pacific wealth for the Swiss bank. “The world has become more digital, less global and more local.”

Big banks worry small lenders could derail Libor switch; As UK regulator reiterates 2021 warning, dealers say Covid-19 is forcing smaller lenders to divert resources James Ryder – Risk.net
Smaller banks are being forced to put their Libor transition preparations on hold amid a coronavirus-induced resource crunch, larger dealers are warning – throwing into jeopardy regulators’ plans to have the whole market migrate to new risk-free reference rates from the end of next year. While larger banks have dedicated tr

The True Cost Of Commodity ETFs
Seeking Alpha
Most commodity ETFs own contracts for future delivery, not the physical commodity itself. Future contracts expire every month or so and funds then have to trade into new contracts. This introduces unique costs for commodity ETFs and this post explains how they work.


Coronavirus Came From Bats, Can Infect Cats, Ferrets, WHO Says
Janice Kew and John Lauerman – Bloomberg
More research needed on how virus moved from animals to humans; Virus is food-related but not food-borne, WHO scientist says
A World Health Organization scientist said Covid-19 comes from bats and can spread among cats amid an international debate about the virus’s origin. The novel coronavirus comes from a group of viruses that originate or spread in bats, and it’s still unclear what animal may have transmitted the disease to humans, Peter Ben Embarek, a WHO expert in animal diseases that jump to humans, said Friday in a briefing with reporters.

Fear factor threatens stocks’ Covid-19 fightback; China’s example suggests that life will not snap back to normal, strategists say
Philip Georgiadis and Robin Wigglesworth – FT
Wall Street economists are warning that public fears of coronavirus could undermine efforts to reopen economies, leaving the stock market’s powerful recovery vulnerable.

Will the Coronavirus Forever Alter the College Experience?
The answer so far appears to be no. But some online education tools are likely to stick around.
Jon Marcus – NY Times
This article is part of our latest Learning special report, which focuses on the challenges of online education during the coronavirus outbreak. A professor at Loyola University New Orleans taught his first virtual class from his courtyard, wearing a bathrobe and sipping from a glass of wine. Faculty at Lafayette College, in Easton, Penn., trained in making document cameras at home using cardboard and rubber bands.

White House Rattled by a Military Aide’s Positive Coronavirus Test; President Trump said he and Vice President Mike Pence, as well as the White House staff, would now be tested on a daily basis.
Michael Crowley and Michael D. Shear – WSJ
President Trump said on Thursday that the White House staff would be tested every day for the coronavirus after a military aide who has had contact with him was found to have the virus.

After Recovery From the Coronavirus, Most People Carry Antibodies; A new study adds to evidence of immunity among those who have already been exposed to the pathogen.
Apoorva Mandavilli – WSJ
A new study offers a glimmer of hope in the grim fight against the coronavirus: Nearly everyone who has had the disease — regardless of age, sex or severity of illness — makes antibodies to the virus.

China Study Finds 5% to 15% of Covid-19 Cases Are Reactivated
Bloomberg News
Among recovered Chinese Covid-19 patients, about 5% to 15% may have tested positive again, a Chinese study found. The rate of reactivation in China varied among different places, with some regions showing less than 1% of such cases among recovered patients, Wang Guiqiang, director of department of infection at the Peking University First Hospital. Wang disclosed the figures during a press conference held by China’s National Health Commission on Thursday.

Hunt for Vaccine Is the World’s New Space Race
Anthony Halpin – Bloomberg
The battle to defeat the coronavirus is becoming a struggle for supremacy that recalls the Cold War contest to dominate space. Just as the Soviet Union jolted U.S. self-confidence by sending the first man into orbit in 1961, American pride would suffer a similar blow if China wins the race to develop a vaccine against the virus, Marc Champion writes.

Mumbai Invokes an 1897 Law to Draft Doctors in Its Virus Fight
Upmanyu Trivedi and Dhwani Pandya – Bloomberg
City officials have sounded off 75,000 private sector doctors; City yet to see its virus-peak as fresh cases keep coming in
One of India’s largest cities is invoking a colonial era law to draft thousands of doctors to work in its hospitals, fueling concern that the medical system is becoming overwhelmed by virus cases despite the country’s weeks-long lockdown.

Covid-19 Is Affecting Emissions on a Planetary Scale
Josh Petri – Bloomberg
The ongoing Covid-19 pandemic is an event of such scale that it can be measured in the planetary metrics of climate change. As many as 2.6 billion metric tons of carbon dioxide emissions—about 8% of what was the estimated total for the year—will never see the light of day, according to estimates by the International Energy Agency. Pick any world-shaking event from the 20th century—none has produced a bigger drop in man-made pollution.

A Pandemic That Cleared Skies and Halted Cities Isn’t Slowing Global Warming
Laura Millan Lombrana and Hayley Warren – Bloomberg
In some ways, the dire lockdowns undertaken to stop Covid-19 have fast-forwarded us into an unlikely future—one with almost impossibly bold climate action taken all at once, no matter the cost. Just months ago it would have been thought impossible to close polluting factories virtually overnight and slash emissions from travel by keeping billions at home. Now we know that clear skies and silent streets can come about with shocking speed.

Trump-Touted Malaria Drug Fails in Covid-19 Study
Michelle Fay Cortez – Bloomberg
A malaria drug that was touted by U.S. President Donald Trump and widely used as a potential treatment for patients with Covid-19 failed to help those with infections stay off ventilators or live longer, according to a study published in the New England Journal of Medicine.

People cannot just be ordered back to work and to spend; It seems foolish to imagine the UK will swiftly return to life as it was before Covid-19
Martin Wolf – FT
The UK government is planning how, and how quickly, to end the lockdown. This necessitates a complex and interlocking set of decisions taken under huge uncertainty. In making them, the government must realise it has a poor record of managing Covid-19 so far. It has to do much better.

A Secret Algorithm Is Deciding Who Will Die in America; Decisions on reopening should involve public data and debate.
Cathy O’Neil – Bloomberg
I have written extensively on the dangers that arise when authorities rely on inscrutable algorithms to make important decisions, bypassing public conversations. All too often, their statistically careless models end up costing lives and livelihoods.

Covid-19 Mainly Kills Old People. So Do Most Other Diseases; Dismissing coronavirus as something that only endangers those who were going to die soon anyway doesn’t make a lot of statistical sense.
Justin Fox – Bloomberg
Covid-19 is hard on the elderly, with those 65 and older accounting for 80% of the U.S. deaths from the disease for which the Centers for Disease Control and Prevention has released demographic data. But this is true of most illnesses: In 2018, 78% of all U.S. deaths from internal causes (that is, excluding accidents, murders, overdoses and the like) were among those 65 and older.

How Risky Is Reopening? Depends Where You Live; Colorado and Indiana are among the states taking the biggest chances.
Mark Gongloff – Bloomberg
Are You Sure You Want to Reopen That State?
How worried should you be about your state reopening for business while a pandemic still rages? If you live in Colorado, Indiana, Iowa, Kansas or Nebraska, then the answer might be “very.” If you’re anywhere else, then the answer may be only slightly less than “very.”

Exchanges, OTC and Clearing

CME trading floor coronavirus reopen is ‘complicated’; The coronavirus fallout is threatening the existence of exchange trading floors
Suzanne O’Halloran – FOX Business
U.S. exchanges with floors of traders elbow-to-elbow were not created with pandemics in mind which is creating challenges for the reopenings of these institutions which closed weeks ago as the coronavirus ripped through the nation.

TMX Group Equity Financing Statistics – April 2020
TMX Group today announced its financing activity on Toronto Stock Exchange and TSX Venture Exchange for April 2020.

Member Position Reporting – Change to Parallel Run Commencement Date
London Metal Exchange
1. Taking account of the operational difficulties Members may be facing due to the
COVID-19 outbreak, The London Metal Exchange (the “LME”) is revising:

Euronext announces volumes for April 2020
Euronext, the leading pan-European exchange in the Eurozone, today announced trading volumes for April 2020.

Re-appointment of Chairman
The Board of Directors (“Board”) of Hong Kong Exchanges and Clearing Limited (“HKEX”) today resolved to re-appoint Mrs Laura May-Lung Cha (“Mrs Cha”) as the Chairman of the Board (“Chairman”) for a term to be coterminous with her directorship.

HKEX chief Charles Li to step down in 2021; Charles Li will not seek re-election as chief executive in October 2021 after leading the exchange since January 2010.
Hayley McDowell – The Trade
The long-standing chief executive of Hong Kong Exchanges & Clearing (HKEX) is set to step down from his position by October 2021, after 12 years leading the exchange group.

US exchanges ordered to submit new governance plans for consolidated tape; Equity exchanges in the US have been told to submit new plans for control over the controversial consolidated tape.
Hayley McDowell – The Trade
The US financial regulator has moved forward with plans to overhaul control over the equity consolidated tape, ordering exchanges to submit new plans for governance of the crucial market data.

Hong Kong’s Bourse Co-Head of IPO Vetting Lin Shi Resigns
Kiuyan Wong – Bloomberg
Hong Kong Exchanges & Clearing Ltd.’s co-head of initial public offering vetting, Lin Shi, resigned, according to an internal memo. Shi resigned to “pursue other career interests,” according to the memo, which was confirmed by an exchange spokesperson.

Nadex Launches USD/MXN Binary Contracts
Pursuant to Section 5c(c)(1) of the Commodity Exchange Act, as amended (“Act”), and section §40.2(a) of the regulations promulgated by the Commodity Futures Trading Commission (the “Commission”) under the Act (the “Regulations”), North American Derivatives Exchange, Inc. (“Nadex”, the “Exchange”) submitted to the Commission on May 6, 2020 its intent to list new USD/MXN Binary Contracts. The Nadex USD/MXN Binary Contracts will be based on the underlying Spot USD/MXN currency market, and will be offered with Weekly, Daily, and 2-hour Intraday durations, and will initially be tradable between the hours of 8:00am ET and 3:00pm ET.

NMS II: An Odd Solution for the Odd Lot Problem
Phil Mackintosh – Nasdaq
As we recently discussed, the SEC has a number of significant rule change proposals on the slate right now. One of those proposals involves splitting the old National Best Bid and Offer (NBBO) into two new kinds of BBO. That’s not as simple as it sounds, nor does it completely fix many problems.


Bloomberg accelerates launch of Data License Plus amid remote working; Given the coronavirus pandemic and shift to working from home, Bloomberg has brought forward the launch of its data platform.
Kiays Khalil – The Trade
Bloomberg has fast-tracked the launch of its new data management service, Data License Plus (DL+), which looks to aggregate client data into a single dataset. In a statement, Bloomberg said that given the shift to working from home amid the global coronavirus pandemic it will bring the launch forward to offer clients access to Bloomberg Data License content from anywhere in the world.

‘Structurally Mismatched’: Javier Saade On The Crisis, Fintech And Small Business
Dane Stangler – Forbes
Three weeks ago, the Bipartisan Policy Center (BPC) hosted a discussion about small business. One of the participants was Javier Saade, who served as Associate Administrator, Chief of Investment and Innovation at the Small Business Administration (SBA) under President Obama. Saade boasts a long and varied resume that includes experience as an entrepreneur, investor, operating executive, and strategic advisor. In addition to sitting on several boards, he is a partner at Fenway Summer, a fintech-focused VC firm.

Fintech startup Phos used this pitch deck to fundraise $1 million
Martin Coulter – Business Insider
The CEO of Phos, a UK fintech startup that turns Android phones into payment terminals, managed to pin down $1 million in venture capital in Bulgaria – just as a state of emergency was declared.
Founded in 2018, Phos has offices in London and Bulgaria, and was backed by New Vision 3, an early-stage venture capital firm, alongside a string of unnamed angel investors.

Council Post: Beyond Credit Scores: How Fintech Companies Are Leveraging Tech To See A Bigger Picture
Jeffrey Glass – Forbes
In February, just before the spread of COVID-19 overtook the headlines, news broke about a change in FICO credit scores that could effectively lower scores for many — specifically for those with a history of falling behind on payments. The newest update weighs personal loan data more heavily than before, due to the tremendous uptick (42%) of personal loans in the past five years.

Fintech revenues to hit $500bn by 2030
The global fintech industry is at an inflection point, with revenues set to grow from $150 billion in 2018 to $500 billion in 2030, according to research from UBS.

Quantile completes record interest rate compression runs in April; Co-founder and chief executive at Quantile said record compression runs in April were seen as market volatility settled from March.
Hayley McDowell – The Trade
Interest rate compression and initial margin optimisation specialist Quantile has set three new records on its services in April, following a surge in compression activity as market volatility settled last month.


Paul Tudor Jones Buys Bitcoin as a Hedge Against Inflation
Erik Schatzker – Bloomberg
Becomes one of first big-name investors to embrace crypto; Macro investor sees Bitcoin as hedge against inflation
Macro investor Paul Tudor Jones is buying Bitcoin as a hedge against the inflation he sees coming from central bank money-printing, telling clients it reminds him of the role gold played in the 1970s. “The best profit-maximizing strategy is to own the fastest horse,” Jones, the founder and chief executive officer of Tudor Investment Corp., said in a market outlook note he entitled ‘The Great Monetary Inflation.’ “If I am forced to forecast, my bet is it will be Bitcoin.”

Teen Hacker and Crew of ‘Evil Geniuses’ Accused of $24 Million Crypto Theft
Bob Van Voris – Bloomberg
An adviser to blockchain companies is claiming a 15-year-old and his crew of “evil computer geniuses” stole $24 million in cryptocurrency from him by hacking into his phone. Michael Terpin sued Ellis Pinsky in New York Thursday, accusing the teenager of masterminding a “sophisticated cybercrime spree” that targeted him in 2018. Terpin is the founder and chief executive officer of Transform Group, a San Juan, Puerto Rico-based company that advises blockchain businesses on public relations and communications.

The Men Who Stare at Charts
Ben Munster – Coindesk
Charts tracking the price of bitcoin dominate six buzzing monitors in the third floor office of a rotting, centuries-old tower block in the heart of Kiev. A pattern emerges among the shifting forms and shapes, and Brian – a 33-year-old trader who asks we use only his first name – reacts swiftly, punching his extemporaneous analysis into a chatbox on the messenger app Telegram.

Ripple co-founder Jed McCaleb has sold over $175 million worth of XRP since early 2016
Yogita Khatri – The Block
Ripple co-founder Jed McCaleb has sold over $175 million worth of XRP since early 2016, according to research by The Block. In terms of XRP units, McCaleb has offloaded over 819 million XRPs, per the research. McCaleb was awarded 9 billion XRPs for co-founding OpenCoin, which later became Ripple.

Coinstar Plans Massive Expansion of Coinme Bitcoin ATMs as Usage Spikes 40%
Danny Nelson – Coindesk
Coinstar, the coin counting kiosk maker hosting 3,500 Coinme bitcoin ATMs, is looking to double its bitcoin-capable supermarket locations. The doubling would happen “within a year,” President of Product Michael Jack told CoinDesk. He said Coinme bitcoin ATM growth “both on a per location and overall basis, has been very strong.” The company already has plans to roll out new machines, though he did not specify how soon this would happen.

A new startup called Yield is trying to bring fixed-rate borrowing and lending to Ethereum
Mike Orcutt – The Block
In traditional finance, a zero-coupon bond is a debt instrument that trades at a discount to its face value, only paying its holder at maturity. This means that you can buy it at one price, and if you hold it until it expires, you are guaranteed the opportunity to redeem it at a higher one. The same thing is needed in Ethereum’s borrowing and lending scene, argues Allan Niemerg, CEO of Yield, a startup that’s developing a protocol for the issuance of tokenized zero-coupon bonds.

Bitcoin Tops $10,000 First Time Since February, Before Halving
Joanna Ossinger and Eric Lam – Bloomberg
The world’s biggest cryptocurrency briefly rallied back above $10,000 ahead of a technical event seen by some as a catalyst for longer-term price gains. Bitcoin rose as much as 2.7% to a high of $10,070 on Friday in Asia trading, briefly taking it into five figures for the first time since Feb. 24, and was holding at $9,929 at 7:40 a.m. in New York. That’s before the cryptocurrency’s upcoming halving, when the rewards miners receive for processing transactions will be cut in half as soon as next week, an intentional feature of Bitcoin designed to control inflation.

One of Bitcoin’s Earliest Miners Is Dedicating $66M in Crypto to a Fund of Funds
Wolfie Zhao – Coindesk
Bixin, one of the earliest bitcoin miner operators and wallet startups, is dedicating 6600 bitcoin, worth $66 million, to a new fund of funds. The company announced the fund of funds with its proprietary capital on Friday and said it aims to invest in global quantitative trading funds whose strategies are based on arbitrage, bitcoin futures contracts and trend analysis.

Vitalik Buterin: How Ethereum will help heal the world
Greg Thomson – Decrypt
Speaking at the Ethereal Summit, Vitalik Buterin discussed cryptocurrency’s role in a post-coronavirus world. The crypto pioneer suggested Ethereum could be the glue that holds a fractured global society together. But he pointed out the difference between the current crisis, and the one that spurred the creation of Bitcoin in 2008.

Vietnam’s HDBank Taps Blockchain Network to Streamline Bank Credit for Corporates
Sebastian Sinclair – Coindesk
HDBank has signed up to a blockchain network from Contour with the aim of bringing trade finance into the digital realm. The Vietnam-based bank is the latest financial institution to join Contour’s network with a view to streamlining the issuance of letters of credit with the use of a blockchain and smart contracts, local media reported on Tuesday.

Binance Allows Traders to Post Ads on Its P2P Exchange
Arnab Shome – Finance Magnates
Binance announced on Friday that it is now allowing crypto traders to put up advertisements on its peer-to-peer exchange platform. This, according to the exchange, will promote freedom for crypto trading by offering an option for users to set up their own trades.

California Bill Proposes to Exempt a Few Cryptos from Securities Law
Arnab Shome – Finance Magnates
A lawmaker in California has introduced a bill, proposing an exemption of a narrow set of digital currencies from the state’s corporate security categorization. Introduced in the California Assembly on Tuesday, the bill was moved as an amendment to legislation first submitted by Majority Leader Ian Calderon (D-57) in February.

Why Your Crypto Exchange Tax Documents Might Not Be Accurate
David Kemmerer- Forbes
The tax documents you receive at the end of the year from your cryptocurrency exchange can be extremely misleading. Cryptocurrency investors need to report their capital gains and losses as well as any crypto earned as income to stay compliant with tax reporting requirements — here in the U.S. and in most countries around the world. Because cryptocurrency exchanges can’t report on the transactions that occur outside their exchange, their tax reports won’t be accurate if you use any exchanges, wallets or other crypto services outside the one sending you those documents.

Welcome Asiff Hirji: Coinbase’s New President & Chief Operating Officer
Brian Armstrong – Medium
Today we’re thrilled to announce that Asiff Hirji is joining Coinbase as our President & Chief Operating Officer. Asiff joins us from one of our venture capital partners, Andreessen Horowitz, where he focused on accelerating growth at a number of portfolio companies. We are incredibly excited to have him join Coinbase full time to help us on our mission towards creating an open financial system.


Trump’s Bid to Stand Above the Law; Next week, the Supreme Court will hear lawyers argue the president’s claim that he has absolute immunity while in office.
Claire O. Finkelstein and Richard W. Painter – NY Times
The Supreme Court of the United States.Credit…Christopher Lee for The New York Times
On Tuesday, the U.S. Supreme Court is scheduled to hear one of the most consequential cases ever considered on executive privilege. Trump v. Vance concerns a subpoena issued by the Manhattan district attorney to President Trump’s accountants demanding the release of tax returns and other financial documents to a grand jury.

Trump’s Going All In on a Vaccine. He May Still Get Beaten by China; The nation that can immunize first stands to gain not just economic advantage, but validation of its place in the world.
Marc Champion – Bloomberg
When the Soviet Union put the first man into space in 1961, the shock to America’s self-confidence was electric. If China should be first to produce a successful vaccine against the coronavirus, U.S. prestige is likely to suffer a similar blow.

Trump Trade Bailout Overpaid Farmers, Favored Cotton, Study Says
Mike Dorning – Bloomberg
Cotton grower payouts 33 times estimated trade war losses; Findings come as Trump administration prepares virus aid plan
The Trump administration’s $28 billion trade bailout largely overpaid farmers for their losses, with southern cotton farmers receiving the most outsized gains, according to researchers at Kansas State University.


ASIC establishes a national expert group on young people and money
This week, the Organisation for Economic Co-operation and Development (OECD) released the 2018 Programme for International Student Assessment (PISA) financial literacy results.

ASIC defers commencement of mortgage broker reforms and design and distribution obligations
ASIC today announced it will defer the commencement date of the mortgage broker best interest duty and remuneration reforms and the design and distribution obligations for six months from their original commencement dates, given the significant impact of COVID-19 on the Australian economy, especially on the financial system and consumers.

CFTC Files Charges in $20 Million International Binary Options and Digital Asset Fraud Scheme
The Commodity Futures Trading Commission today announced the filing of a multi-million dollar fraud action in the U.S. District Court for the Southern District of Florida, charging three individuals and three companies with fraudulently soliciting tens of millions of customers and prospective customers to open and fund off-exchange binary options and digital asset trading accounts. These accounts traded foreign exchange currency pairs, metals, and digital assets through websites operated by unregistered binary options and digital asset brokers.

U.S. Department Of The Treasury Financial Stability Oversight Council Update
On Thursday, May 14, Secretary Steven T. Mnuchin will preside over an executive meeting of the Financial Stability Oversight Council (Council) via telephone. The preliminary agenda includes an update from the Council’s Task Force on Nonbank Mortgage Liquidity and an update on market developments related to COVID-19.*

SEC Investor Advisory Committee to Meet Virtually on May 21
The Securities and Exchange Commission’s Investor Advisory Committee will hold a public meeting on May 21, 2020 by remote means. The meeting will begin at 10 a.m. ET, is open to the public via live webcast, and will be archived on the committee’s website for later viewing.

Investing and Trading

Too much cash is chasing too few desirable assets;With no productive use of liquidity, money is going into market speculation driving recovery in asset prices
John Dizard – FT
Portfolio managers and asset allocators in the post-Covid-19, post-crash, post-central bank intervention moment have a problem deciding what to do with their money.

Covid-19 shows why ESG matters; Barclays’ big climate vote; UK impact investors’ legal hurdle; your questions answered; Your guide to the investment and business revolution you can’t afford to ignore
Gillian Tett, Billy Nauman, Andrew Edgecliffe-Johnson, Kristen Talman and Eileen Rodriguez – FT
Welcome to a new, fresher look. We’ve brought in a restyled header, a lighter background and some design changes to make the newsletter more user-friendly. With clearer section titles, better spacing, and a few other new features, we hope you find it easier to read and scroll. And more enjoyable.

Why the cost of protecting directors from lawsuits has soared; Tesla’s decision to buy liability cover from Elon Musk instead of a traditional insurer comes after premiums shot up
Sujeet Indap – FT
When Tesla revealed last week that Elon Musk had stepped in to provide personal liability insurance for the company’s directors, after it balked at paying the soaring premiums demanded by traditional insurers, many other US companies would have wished they had a billionaire founder who could do the same.

Treasury market sends bearish signals as stocks rise; Two- and five-year yields hit record lows as futures investors anticipate negative rates
Colby Smith and Eric Platt – FT
US bond markets sent bearish signals in stark contrast with rising equity prices as yields on two- and five-year Treasuries fell to their lowest levels ever and futures investors priced in the possibility of negative rates.

Brace for Devastating News on Jobs
NY Times
The April U.S. jobs report, released at 8:30 a.m. Eastern today, will be the first edition of the closely watched survey to fully reflect the effects of pandemic lockdowns. Unlike the weekly jobless claim figures that have recently made headlines, these monthly numbers are based on surveys of both households and businesses, making them more comprehensive.

The buoyant oil traders; Not everyone in the oil industry is licking their wounds
The Economist
Timing is everything. When the late Marc Rich, an infamous commodities trader, set out to prise open the Fort Knox world of oil trading in the early 1970s, he had little more to help him than family money, the proceeds from the sale of a colleague’s car, and an address book full of contacts. But something momentous was happening. In the Middle East oil nationalism was stirring. Members of the Organisation of the Petroleum Exporting Countries were tearing up a post-war system in which Western oil companies, the so-called Seven Sisters, fixed the price of crude. An Arab oil embargo had pushed prices up to record levels. It was an ideal time for a renegade trader to go behind the backs of blue-chip producers, ship oil around the world on behalf of despots and sell it at market prices. With the motto “To make money out of other people’s money”, Rich created a business that was reliant on bank loans, secretive and controversial (he was indicted in 1983 for tax evasion and trading with Iran). It was also fabulously profitable.

Mining Company Alleges Diamond Trader Stashed Money in New York Real Estate; Brazil’s Vale is trying to collect part of a $2 billion arbitration award against a company tied to Beny Steinmetz
Konrad Putzier – WSJ
A Brazilian mining company is turning to a U.S. court to obtain information related to its allegations that an Israeli diamond trader made undisclosed investments in New York City real estate.

The great potato giveaway: U.S. farmers hand out spuds to avoid food waste
David Ryder, Christopher Walljasper – Reuters
When Tina Yates pulled her truck up to a mall in western Washington state on Thursday, workers waved her past hundreds of cars waiting to pick up free russet potatoes.


Michael Hintze’s hedge fund hit hard by credit bets; Billionaire CQS trader hurt by exposure to default-ridden energy sector
Laurence Fletcher, Joe Rennison, Ortenca Aliaj, Robert Smith and Miles Kruppa – FT
A hedge fund run by billionaire trader Michael Hintze has suffered a second large fall in as many months, leaving it down roughly 50 per cent in what is shaping up to be its worst ever run of performance.

Franklin Templeton tussles with India regulator after freezing funds; US asset manager apologises following comments by company’s president over debt rules
Benjamin Parkin – FT
Franklin Templeton has become embroiled in a spat with India’s markets regulator in the latest twist in a fiasco that has trapped $3bn of investors’ money.

Louis Bacon’s Moore Capital makes big gains after going it alone; Billionaire investor hits winning bets in global macro after closing to external money
Laurence Fletcher – FT
Billionaire investor Louis Bacon’s Moore Capital is enjoying some of its best performance in years, barely six months after announcing it would return money to outside investors and strike out alone.

YieldStreet Investors Are Learning the Meaning of High Risk; Alternative investments for the masses are not always a good thing.
Claire Boston – Bloomberg
The online investment platform YieldStreet came on the scene in 2015 with a bold proposition: It would allow individual investors to make the kind of unusual, potentially high-yielding investments normally reserved for institutions and the very rich. These alternative assets include pieces of investments in real estate, art, and even ships. Although the company caters only to accredited investors—those who earn more than $200,000 annually or have a net worth of at least $1 million—that’s a bar many affluent professionals can clear. Investors have plowed around $1 billion into deals through YieldStreet.

Commerzbank Hires McKinsey in Sign Deeper Change Is in Store
Steven Arons – Bloomberg
Business model reviewed as bank prepares new cost goals; CEO Zielke is under pressure after previous targets fell flat
Commerzbank AG hired consultancy McKinsey & Co. to review its business model in a sign that a planned update of cost-cutting targets this summer may turn into a more comprehensive restructuring.

Barclays Shareholders Vote to Support U.K. Bank’s Climate Plan
Alastair Marsh – Bloomberg
Barclays Plc shareholders overwhelmingly supported the proposal to cut its net greenhouse gas emissions to zero and voted against a potentially more stringent alternative plan put forward by some of its investors.

JPMorgan Chase to staff: still no timeline to return to offices -memo
JPMorgan Chase & Co told staff on Thursday that it still does not have a set timeline to return staff to working at offices, according to an internal email seen by Reuters.


Argentina plans to set $45 oil price in push to save Vaca Muerta; Executive decree set to prop up prices in hopes of saving domestic shale industry
Benedict Mander – FT
Argentina was poised to fix local oil prices at $45 a barrel on Thursday, almost 30 per cent higher than Brent crude prices, in an attempt to rescue one of the government’s great hopes for the country’s economic recovery — its giant Vaca Muerta shale field.

Bakken pain reflects long road back for US shale; North Dakota’s oil sector has ‘never been through a downturn like this’
Derek Brower – FT
North Dakota led America’s unconventional oil revolution more than a decade ago. Now its Bakken shale field is leading the big retreat. Oil output in the state, home to the Bakken’s most productive parts, has fallen by more than a third this year — a bigger drop than many individual Opec producers pledged in their historic supply-cutting deal in April — to less than 1m barrels a day, according to one industry estimate.

German ECB Ruling May Threaten Euro Survival, Schaeuble Says
Alexander Weber – Bloomberg
The critical ruling by Germany’s constitutional court over the European Central Bank’s bond-buying program poses a threat to the future of the common currency, according to Wolfgang Schaeuble, the country’s former finance minister.

Credit Funds in India See Large Outflows on Franklin Shock
Nupur Acharya – Bloomberg
Indian credit risk funds suffered large redemptions in April after Franklin Templeton’s shock decision to wind up $4.1 billion of such plans triggered fresh turbulence in the nation’s debt market.

Sweden to Claw Back Crisis Aid From Firms Enriching Owners
Rafaela Lindeberg and Charles Daly – Bloomberg
Sweden’s government has had enough of companies flouting its guidance, and now plans to claw back state support given to firms that paid dividends to investors. “We will demand repayment,” Gunilla Nordlof, director-general of the Stockholm-based Agency for Economic and Regional Growth, said on Thursday. Justice Minister Morgan Johansson said it was “indecent” of firms to continue enriching shareholders while drawing on state assistance.

Saudi Shift From Price War Has Asia Oil Buyers Stewing Over Rise
Bloomberg News
Aramco unexpectedly raised June prices for most grades to Asia; Some buyers may consider reducing their nominations: traders
Saudi Arabia’s boost to prices of most of its oil is signaling an end to a destructive price war, but it’s left Asian buyers less than impressed.


Scotland’s Sturgeon Rebuffs Boris Johnson’s Plans to Ease Lockdown
Alastair Reed – Bloomberg
First Minister warns relaxation would be “very, very risky”; Lockdown could continue in Scotland even if England lifts it
Scotland’s first minister, Nicola Sturgeon, said she won’t be pressured into lifting the coronavirus lockdown as U.K Prime Minister Boris Johnson prepares to ease some of the restrictions.

Saving the planet the Brexit way
Jim Brunsden and Mehreen Khan – FT
Britain will leave the EU’s single market at the end of its post-Brexit transition period, but will it exit the bloc’s carbon market too? On paper, future co-operation on emissions trading looks like one of the few areas in the EU-UK future-relationship talks where both sides’ starting positions are in relative harmony. Or at least not totally out of tune. Both the UK and EU foresee a future where each side has a carbon-pricing system (in the EU’s case, its Emissions Trading System) and they make an attempt to link them up. Britain was also a key backer of the EU market mechanism when it was set up in 2005.


A Guide for First-Time Pet Owners During the Pandemic; How to care for your new cat or dog during and after lockdown.
Michele C. Hollow – NY Times
With everyone home, many people are becoming first-time pet owners during the coronavirus pandemic. Adoption and foster rates are up all over the country. The ASPCA has seen a nearly 70 percent increase in animals going into foster care through the organization’s New York City and Los Angeles foster programs, compared with the same period in 2019. Best Friends Animal Society has also seen a surge in the number of fosters and adoptions nationwide, because sheltering in place has allowed people the time to tend to a new cat or dog.

How this crisis will take us all back to the 1970s; Robert Shrimsley on why he’s braced for a return to the most dismal of decades
Robert Shrimsley – FT
The past few years have seen an upsurge in nostalgia for the 1970s. Well, the good news for all those who enjoy a wallow in the dismal decade is that we are about to experience it all over again. As the UK prepares to take its first steps out of lockdown into the dreary world of social distancing and minimal contact, we are able to relive all the worst parts of that time.

John Lothian Newsletter

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