Hits & Takes
John Lothian & JLN Staff
Today’s lead story from Bloomberg titled “Bad News, London and New York: Finance Hubs Are Becoming Obsolete” and the second story from Crain’s Chicago Business titled “ComEd turning former CME trading pit into power facility” are well timed. Add in JLN closing its office in the CBOT Building a few days ago to the mix. Location is becoming something we can do in person, virtually in person and soon enough more regularly in virtual reality. Covid gave us a shove, but this was already happening because of the many trends in electronic trading and communications. JLN’s team would communicate via Slack in our offices, even when seated less than 20 feet from each other.
The 1998 addition to the CBOT Building, the former Arboretum trading floor, was meant to be a power facility or telecommunications hub to house the electronic trading needs of the exchange. It was already both because of the needs of the exchange, with multiple lines of power and telephone and data coming into the eastern addition to the CBOT building, and it was designed with the 1993 New York World Trade Center bombing in mind. I once complained to one of the designers that they were focusing on protecting the infrastructure, but not the most important asset, the people.
STAC postponed their 96th Annual Mid-Winter meeting due to a variety of uncontrollable factors and are targeting to reschedule the conference for late Q1/early Q2.
Also, the Grammys are likely to be postponed, Billboard Magazine reported.
The Federal Bar Association’s Chicago chapter is running a free virtual webinar titled “Sherlock Holmes and the Art of Evidence” on Wednesday, January 12, 2022 from 12:00 PM – 1:00 PM CST. The speaker is Stephen Chahn Lee, a litigation partner at Benesch, Friedlander, Coplan & Aronoff LLP. JLN’s friend Cliff Histed described his friend and former co-worker Lee and the webinar this way: “Long before the Federal Rules of Evidence even existed, the Sherlock Holmes’ stories offered great practical advice for lawyers and real-life investigators who had to figure out the facts and make their cases. This session will draw upon Sherlock Holmes’ stories and will be led by former prosecutor Stephen Lee, who has written articles about Sherlock Holmes and investigative techniques.” More details and registration are available HERE.
Right before New Year’s, Gary DeWaal made his final two columns of the year for Katten and just made his quota. Kidding. Here they are. The first is Deja Vu Again Justified?: CFTC Fines Respondents for Wash Sales Less Than Two Weeks After COMEX Fines and Suspends Two Principals for Same Offense and the second is SEC Delivers Coal Under the Christmas Trees of NYSE Arca and Cboe BZX in the Form of Rejections to List Bitcoin ETFs.
The Japan Financial Services Agency has launched an official LinkedIn page.
Not sure how to greet your friends or colleagues because of Covid? Handshake, hug, fist bump? How about a wristband to give you a clue? The New York Times has the details.
Japan is going to save the day in the French fry shortage in New York, it appears from a story in Bloomberg titled “Japan Has Big Plans For Chips; The U.S. and China are spending billions on chip manufacturing, but don’t forget about Japan.” Oh, different kind of chips! How I long for a trip to London and some fish and chips.
The quote I used yesterday about the U.S. doing the right thing when all other alternatives have been exhausted, paraphrasing a quote I attributed to Winston Churchill, is one that is actually attributed to Abba Eban, an Israeli politician and diplomat. However, somehow over time Churchill was cited using it, and it was compatible with Churchill’s sentiments, a historian said. Hat tip to Chip Dempsey for catching my error.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
London’s Fintech Boom Opens the Door for Dirty Money; Among the more than 200 electronic money institutions licensed in the U.K. are ones with executives or shareholders tied to alleged financial wrongdoing.
Donal Griffin – Bloomberg
A 10-minute walk from the Bank of England, on the eastern edge of the City of London, lies a gateway to a new shadow world of money. Here on Dukes Place is the office of Moorwand Ltd., one of a fast-growing breed of upstarts that bill themselves as alternatives to old-fashioned banks when moving money around the world. Each day in the U.K. alone, an estimated 1.4 billion pounds ($1.9 billion) courses through loosely regulated digital payments businesses like Moorwand. Though only a small fraction of Britain’s financial flows, it’s a system critics warn is opening a door for dirty money.
****** I am not sure of the point of the headline. Have the writers not been paying attention?~JJL
Nuclear weapons: Russia, China, Britain, US and France say no one can win a nuclear war; China, Russia, the UK, the United States and France have agreed that a further spread of nuclear arms and a nuclear war should be avoided.
The Sydney Morning Herald
According to a joint statement released on Tuesday morning (AEDT), the five countries – the permanent members of the United Nations Security Council – said they considered it their primary responsibility to avoid war between the nuclear states and to reduce strategic risks, while aiming to work to create an atmosphere of security. “We declare there could be no winners in a nuclear war, it should never be started,” the Russian-language version of the statement read.
**** It feels like they were in a meeting and felt they had to tell the world that there was at least one thing they could agree on and they came up with this. I’m glad they agree on this but didn’t we figure this out 50 years ago? ~JB
Matt Damon’s cryptocurrency advert has got everyone cringing
Jeff Parsons – Metro
Who is most likely to persuade you to invest in cryptocurrency? Is it a friend or relative? A trusted financial advisor? Or is it Matt Damon? If the third option is the answer, then you’re in luck. The Oscar-winning actor has just appeared in a US advert for a cryptocurrency platform. And it’s bad.
****** Jason Bourne getting some bad press for his crypto-shilling.~JJL
BlackBerry Ends Service on Its Once-Ubiquitous Mobile Devices; Android-powered devices carrying the BlackBerry name won’t be affected. For some, it’s a farewell to an era when BlackBerries dominated airport lounges and the West Wing.
Neil Vigdor – NY Times
To legions of executives, journalists and politicians — even the leader of the free world — they were once-indispensable devices for staying connected when ordinary cellphones wouldn’t suffice. Anything else was for amateurs. The devices, with the quirky-sounding name BlackBerry and the QWERTY keyboard that conditioned many people to type with their thumbs, were more ubiquitous than iPhones during the late 2000s.
***** I guess I can throw away my Blackberry holster now.~JJL
Customer Service at the IRS Is So Bad, Even Tax Pros Are Fed Up; As tax season approaches, the agency is short-staffed, underfunded, and so overwhelmed with calls that even a phone number for VIPs is a bust.
David Hood, Allyson Verspirille, Kaustuv Basu – Bloomberg
Tax preparer Jan Roberg rang what she calls the “bat phone”: a dedicated customer service line at the Internal Revenue Service that’s supposed to connect professionals like her to a human right away. She was put on hold, as she figured she would be. So she went to the Burger King next to her office to pick up lunch. She was still on hold when she got back. “Even five years ago, I would get through right away,” says Roberg, of St. Louis. Now it typically takes more than an hour.
****** I am still awaiting my refunds from 2019 and 2020 from the IRS totaling about $16K. I am a patient man. They are an incredibly underfunded and overwhelmed organization at present.~JJL
Monday’s Top Three
Our most-read story Monday was, once again, The New York Times’ What’s the Best Book of the Past 125 Years? We Asked Readers to Decide, its third time at the top. It’s interesting that the top three books were all books people tend to read before they are 18 years old – there’s a fondness for what we read in our youth, it seems. Second was This new exchange lets investors vote yes or no on major events to hedge their portfolios from CNBC, about a new exchange called Kalshi that “aims to make it easier to hedge against major business and political events.” Possible “bets include ‘will a recession start by the second quarter of 2022’ and ‘will income taxes on the highest income bracket increase by the end of 2021.'” Third was Bloomberg’s Billionaires Are Embracing Crypto in Case Money ‘Goes to Hell’, in which Thomas Peterffy says, “It’s prudent to have 2% to 3% of one’s personal wealth in cryptocurrencies,” but also says, “I think it can go to zero, and I think it can go to a million dollars…I have no idea.”
26,681 pages; 236,648 edits
Bad News, London and New York: Finance Hubs Are Becoming Obsolete; The need for people to gather in the same place to swap information and securities is fast disappearing.
Paul J. Davies – Bloomberg
Stand on the steps of The Royal Exchange in the heart of the City of London and you can picture the churn of people 200 years ago or more in what was becoming the world’s preeminent financial hub. Stock jobbers, traders and financiers would stream between its great limestone columns with the Bank of England to one side and all surrounded by offices of bankers or trading houses and alleyways to the ever-busy coffee shops. The exchange was where transactions happened, but the coffee shops played an equally important role in the lifeblood of markets as information centers. People hung out there for refreshment and gossip but also all the details of supply and demand. “[T]he coffee men vied with each other in maintaining the supply of a wide variety of domestic and foreign newspapers, news-sheets, journals and bulletins, customs entry forms, auction notices, price-current lists, etc,” according to David Kynaston’s “City of London: The History.” 2
ComEd turning former CME trading pit into power facility; The exchange operator has sold its longtime trading floor building in the Loop as it leaves most open-outcry trading activity behind.
Danny Ecker – Crain’s Chicago Business
The Loop building that housed CME Group’s historic trading floor until COVID-19 shut it down in 2020 is about to get a new use: generating more power for downtown. Commonwealth Edison paid $39.5 million in November for the 288,000-square-foot building at 333 S. LaSalle St., according to Cook County property records. The utility giant, which bought the five-story structure from the Chicago-based derivatives exchange, plans to to turn it into a new electrical substation slated to open in 2026, a ComEd spokesman said in a statement.
ICE Announces Launch of Its Fixed Income Quotation Transparency Service; ICE solution can help customers meet requirements under recent SEC Rule 15c2-11 amendments
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced the launch of its leading-edge service that is designed to enable broker-dealers to meet the new requirements resulting from recent amendments to SEC Rule 15c2-11. The ICE solution helps broker-dealers obtain and review issuer information about fixed income securities before publishing or submitting a quotation in a quotation medium in accordance with the newly-updated rule and conditional relief provided in the SEC Staff’s December 16 No-Action Letter.
HKEX Names Chief People Officer
Hong Kong Exchanges and Clearing Limited (HKEX) is today (Tuesday) pleased to announce the appointment of Ms Kerry Rooks as HKEX Chief People Officer. Ms Rooks will be responsible for the Human Resources function across HKEX Group, leading a team of HR professionals in Hong Kong, Mainland China and internationally, helping to ensure that HKEX continues to have the best talent and talent management programmes, supporting the long-term development of the Group. Ms Rooks joins HKEX on 10 January 2022, and will report to HKEX Chief Executive Officer, Nicolas Aguzin. Ms Rooks will also become a member of the Group’s Management Committee.
Subtle Word Choice in China IPO Rules Revives Hope for Hong Kong
Debate over whether listings there subject to data scrutiny; IPO dealmakers remain confused over regulatory scope
A subtle word choice in China’s revamped rules for overseas listings is stoking speculation that authorities may make it easier for companies to list in Hong Kong than in other offshore financial hubs. China’s top internet regulator published final regulations Tuesday requiring all companies with more than a million users seeking “foreign” listings to undergo a rigorous data security review starting Feb. 15. That’s a notable change from a related November notice, when the same watchdog mentioned Hong Kong listings specifically as requiring scrutiny if they involved matters of national security, and also employed the term “overseas” — often used to describe Hong Kong, a semi-autonomous Chinese city.
Philippine Stock Exchange Cancels Trading Amid System Glitch
Ian C Sayson – Bloomberg
The Philippine Stock Exchange canceled trading on Tuesday following a system glitch, according to exchange president Ramon Monzon. “We are sorry about this unfortunate incident and we are exerting all efforts to resolve the problem,” Monzon said in a statement. The bourse had to suspend trading after 43 brokers were unable to connect to its system, Monzon said earlier in a text message to Bloomberg News. It was not clear when trading would resume.
Wacker Drive tower valued at $1 billion in deal; Howard Hughes’ agreement to sell its controlling stake in the new Bank of America Tower illustrates investor appetite for new and high-quality office properties despite eroding demand during the pandemic.
Danny Ecker – Crain’s Chicago Business
A New York investment firm is buying a controlling interest in the 55-story tower at 110 N. Wacker Drive in a deal that values the skyscraper at around $1 billion, one of the biggest transactions on record for a Chicago office building. Oak Hill Advisors has an agreement to purchase the stake in the property from Dallas-based Howard Hughes, according to sources familiar with the deal. Howard Hughes and Chicago-based Riverside Investment & Development co-developed the 1.5 million-square-foot building, which opened in 2020 with Bank of America as its anchor tenant and is now more than 85% leased.
NYC Offices Empty Again Just as Demand, Rents Begin to Recover
Natalie Wong – Bloomberg
Manhattan’s office market has seen a rebound in demand, but the surge in Covid-19’s omicron variant could delay further progress. Leasing jumped to 9.3 million square feet (864,000 square meters) in the fourth quarter, the most in two years and up 21% from the previous quarter, according to a report Monday by Savills Research. Much of the demand was driven by new agreements, a sign that tenants are committing to long-term plans for offices in the future, the brokerage said.
AT&T and Verizon Agree to New Delay of 5G Rollout; Telecom companies reverse course a day after rebuffing delay request by U.S. officials
Andrew Tangel, Drew FitzGerald – WSJ
AT&T Inc. T 3.37% and Verizon Communications Inc. VZ 0.92% said they agreed to delay their rollout of a new 5G service for two weeks, reversing course after previously declining a request by U.S. transportation officials. AT&T said late Monday that the company had voluntarily agreed to an additional two-week delay, at the request of the U.S. Transportation Secretary Pete Buttigieg. Verizon VZ 0.92% also said it had agreed to a two-week delay that would ensure the new service would go live in January.
China’s Anti-Graft Crackdown Has Ensnared Over 20 Finance Officials So Far
China launched national anti-graft crackdown in late 2021; Xi tightened grip in preparation for party congress this year
China’s anti-graft crackdown has so far brought down more than 20 financial officials as authorities step up scrutiny over the nation’s $54 trillion financial system at a time of growing turmoil in the property market. At least 24 officials had been probed or penalized since Oct. 12 when China launched a national anti-corruption inspection focused on financial institutions and regulators, according to a Bloomberg News tally based on announcements from the Central Commission for Discipline Inspection.
Snow Paralyzes Roads Near D.C. in Latest Challenge for Travelers
Andras Gergely – Bloomberg
One of the East Coast’s main thoroughfares was completely blocked near Washington, D.C. overnight, with thousands of cars and trucks at a standstill for more than 11 hours, marking the latest headache in a difficult holiday travel season.
Changes to LIBOR as of end-2021; Publication of 24 LIBOR settings has ended, and the 6 most widely used sterling and Japanese yen settings will be published using a changed methodology from today.
The LIBOR settings that have ended are:
all euro and Swiss franc LIBOR settings; the overnight / spot next, 1-week, 2-month and 12-month sterling and Japanese yen LIBOR settings; the 1-week and 2-month US dollar LIBOR settings
The 1, 3 and 6 month sterling and Japanese yen LIBOR settings are Article 23A benchmarks, meaning they are now permanently unrepresentative of the underlying market they seek to measure. This is because the panel of banks, which used to provide submissions to create these rates, has now ended.
U.S. Sets New World Daily Record of 1 Million Cases
Jinshan Hong – Bloomberg
More than 1 million people in the U.S. were diagnosed with Covid-19 on Monday as a tsunami of omicron swamps every aspect of daily American life. The highly mutated variant drove U.S. cases to a record, the most — by a large margin — that any country has ever reported. Monday’s number is almost double the previous record of about 590,000 set just four days ago in the U.S., which itself was a doubling from the prior week.
U.S. Covid-Test Positives Suggest Case Numbers Are Undercounted
Jonathan Levin – Bloomberg
The U.S. is reporting record Covid-19 infections, but the true tally may be significantly higher. Average daily cases reached about 405,000 in the past week, about 60% higher than the previous U.S. peak in January 2021, according to Johns Hopkins University data. But the numbers of tests reported by states are still running below their 2021 highs.
How Safe Is Flying With the Omicron Variant Surging?
Naomi Kresge and Charlotte Ryan – Bloomberg
How safe is it to fly in the age of Covid-19? The question has been the subject of debate for almost two years. The airline industry has argued that the risk to passengers is very low; independent researchers have tended to say that it’s not high, while stipulating that it’s impossible to assess with real accuracy. Whatever the odds of getting infected by the coronavirus on a plane, they’ve grown worse with the spread of the omicron variant.
Coronavirus has provided a wake-up call for workers; The pandemic has shifted mindsets if not yet the actual balance of power
The editorial board – FT
It is often harder to identify tipping points while they are happening than after the fact. But that has not stopped people from questioning whether a lasting shift in the labour market is under way. After 40 years in which capital has had the whip hand over labour, is worker power on the rise?
Exchanges, OTC and Clearing
OCC Clears Record-Setting 9.93 Billion Total Contracts in 2021
Securities lending average daily loan value hits record $147.7 billion; highest December on record for U.S. listed options
OCC via Businesswire
OCC, the world’s largest equity derivatives clearing organization, announced today that it set new annual cleared contract volume records for the U.S. exchange-listed options industry. In 2021, OCC cleared 9.93 billion total contracts (options and futures) and 9.87 billion options contracts. These numbers surpass the previous records, set in 2020, of 7.52 billion total contracts and 7.47 billion options contracts. Compared to 2020, OCC had a 32.0 percent increase in total contracts cleared and a 32.2 percent increase in options contracts cleared.
CME Group Reports 2021 Annual, Q4 and Monthly Market Statistics
Overall ADV reached a record 19.6 million contracts in 2021, up 3% for the year and up 26% for both Q4 and the month of December; Interest Rate futures and options ADV up 15% for the year, 56% in Q4, and 41% in December
SOFR contracts saw triple-digit gains
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its full-year, Q4 and December 2021 market statistics, showing it reached a record average daily volume (ADV) of 19.6 million contracts during the year, an increase of 3% over 2020. ADV increased 26% in both the fourth quarter and the month of December, to 20.5 million contracts and 18 million contracts, respectively. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
Deutsche Börse publishes annual cash market statistics for 2021; 1.9 trillion EUR Turnover on the Xetra, Börse Frankfurt and Tradegate Exchange trading venues / An overview of the most heavily traded stocks
The shares of SAP, Lufthansa, Flatex Degiro and Cliq Digital were the most traded papers in the German indices DAX, MDAX, SDAX and Scale All Share last year. Deutsche Börse announced this today with the publication of its cash market trading statistics for 2021. In total, the order book turnover of 1.9 trillion. EUR achieved. In 2020 it was 2.1 trillion. EUR. The share with the largest trading volume on Xetra 2021 was SAP with EUR 66.2 billion, followed by Volkswagen with EUR 64.5 billion and Daimler with EUR 61.2 billion. Lufthansa was ahead in the MDAX share index with EUR 17.3 billion, while Flatex Degiro led the SDAX with EUR 3.1 billion. The most traded share in the Scale SME segment was Cliq Digital at EUR 417.2 million.
NYSE ARCA – Updated Limit Up Limit Down Tier 1 ETP List
NYSE Arca, in coordination with other listing exchanges, has updated the list of Exchange Traded Products eligible for Tier 1 of the Limit Up Limit Down program. The updated list of ETPs, effective January 3, 2022, as well as the additions and deletions from the current Tier 1 list, can be found here.
Boerse Stuttgart Generates 2021 Turnover Of Around EUR 107 Billion – Exchange-Traded Products Generate Record Turnover // High Trading Volume In Equities And Securitised Derivatives
Based on the order book statistics, turnover from all trading activities at Boerse Stuttgart amounted to around EUR 107 billion in 2021 – only 4 percent less than in the extremely high-turnover year 2020. Trading in equities generated turnover of over EUR 28,5 billion in 2021. This was just slightly more than 2 percent short of the previous year’s record turnover. German equities contributed around EUR 13,8 billion to this total and international equities over EUR 14,7 billion. The most frequently traded German shares in 2021 were Daimler, TUI and Volkswagen. Turning to international shares, BioNTech, SunHydrogen and CureVac were the most frequently traded.
Nasdaq Nordic And Baltic Markets: Annual Trading Statistics 2021
Nasdaq Nordic today publishes annual trade statistics for the Nordic1 and Baltic2 markets. Below follows a summary of the trade statistics for full year 2021: The share trading increased by 7.1 % to a daily average of 3.987bn EUR, compared to 3.723bn EUR in 2020. The average number of trades per business day increased by 5.8 % to 901,009 as compared to 851,810 in 2020. Derivatives trading decreased by 7.7 % to a daily average of 348,199 contracts, compared with 377,424 contracts in 2020.
Record Year For Agricultural Futures At Matba Rofex: 60 Million Tons Traded
Matba Rofex closed 2021 with an annual volume record, exceeding 60 million tons, 13% above the previous year. With 60,083,328 tons traded throughout 2021, Matba Rofex ends a record year, marked by initiatives that sought to offer useful tools for the sector, such as the Family of Continuous Grain Indices (soy, corn and wheat) or the presentation of the Agrotoken Grain Indices.
Borsa Istanbul: Uptick Rule Will Be Applied In The Session Dated 4 January 2022 In The Equity Market
It has been decided that the up-tick rule in short selling transactions to be valid for one day during the session dated 04/01/2022. Please click for the related Announcement.
Shenzhen Stock Exchange Holds The 2021 IT Symposium, Embarking On A New Journey Of Digital And Intelligent Technology Empowerment
From December 28 to 29, to implement the decisions and plans of the CPC Central Committee on the development of the digital economy and the requirements of the 14th Five-year Plan, Shenzhen Stock Exchange (“SZSE”) held the 2021 IT Symposium themed by “Harnessing Technology · Embarking on a New Journey of Digital and Intelligent Technology Empowerment” in the combined form of “online + offline” conferencing. The conference aims to promote the top-level design of the digital development of the industry, deepen technological communication and cooperation in the industry, and enhance the digital and intelligent technology application capabilities of the industry.
Wrap-up article: the changing face of liquidity after COVID; Panellists in a Eurex webcast explore the new liquidity provision architecture after the pandemic, the changing dynamic between the buy-side and independent market making firms and examine which participants will make up the new market eco-structure. Carmella Haswell reports.
What was your experience during the pandemic and what lessons did you learn regarding liquidity formation?
Robert Miller: From an equity perspective, we’re well enabled to adapt our execution strategy due to the quality of data and the speed of turnaround to get that information back to the desk. Despite fill sizes reducing on the equities side, they reduced significantly less with the electronic liquidity providers (ELPs) compared to other venues we interacted with. From a fixed income perspective, we saw our traditional providers take risk off and reduce balance sheet capacity, which created an opportunity for other alternative liquidity providers to step in.
Farmer sentiment rises on strengthening current financial position
The Purdue University/CME Group Ag Economy Barometer rose for only the second time since May, up 9 points to a reading of 125 in December. The Index of Current Conditions and the Index of Future Expectations also rose this month with a stronger current conditions index primarily responsible for the barometer’s rise. The December’s Index of Current Conditions rose 18 points to a reading of 146, while the Index of Future Expectations rose 4 points to a reading of 114. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between December 8-14, 2021.
SGX to report 1H FY2022 results on 4 February 2022
Singapore Exchange (SGX) is reporting its half year (1H) results for Financial Year 2022 (FY2022) after the market closes on 4 February 2022.
Japan Has Big Plans For Chips; The U.S. and China are spending billions on chip manufacturing, but don’t forget about Japan.
Vlad Savov – Bloomberg
Japan and the chip race
My adopted home of Japan is gearing up to supercharge its semiconductor industry. In the wake of giant expenditures by the U.S. and China, Japan is aiming to triple its domestic chip revenue by 2030—and recently dedicated $6.8 billion to the cause. It’s an ambitious undertaking—and there’s reason to think it’s going to work.
India Digital Loan Sharks Face Crackdown as Complaints Mount
Malavika Kaur Makol – Bloomberg
Digital lending exploded across India during the pandemic; Government officials have flagged hundreds of illegal apps
When V. Rajapandian was pushed out of his job at a heat treatment plant in India, the reason had nothing to do with performance or falling revenue. Instead, his boss offered a peculiar explanation: After Rajapandian defaulted on a loan from a mobile app, recovery agents demanded the plant pay on his behalf.
Investors Buy Up Metaverse Real Estate in Virtual Land Boom; Investment firms are pouring millions of dollars into metaverse real estate
Real-estate transactions in the metaverse are reaching record highs. We spoke with companies investing in digital real estate to understand the economic model, and why investors are spending millions on virtual property. Photo: Republic Realm
Quantum advantage is the next goal in the race for a new computer age; Companies are jostling to be the first to find a practical application for quantum computers
Richard Waters – FT
The race is on to find the first practical use for quantum computing. It is likely to pale in comparison to the ultimate potential of the technology: to power a computer that can take on any problem at blistering speed. But many in the field believe a less ambitious milestone will be reached within two years, triggering a rush to be the first to bring it into the mainstream.
China Passes New Cybersecurity, Algorithm Rules
Yifan Wang – Dow Jones
China has passed two new rules regulating technology companies’ overseas activities and use of algorithms, marking the latest step by Beijing to rein in the country’s massive internet sector. The country’s top internet watchdog, the Cyberspace Administration of China, said Tuesday that it and several other authorities passed a revised version of the Cybersecurity Review Measure that will subject digital-platform operators with more than 1 million users to a cybersecurity review if they plan to list overseas.
Tech stocks drag China, HK stocks lower on Beijing’s new cybersecurity rules
China and Hong Kong stocks fell on Tuesday morning, dragged down by technology shares, as Beijing’s new cybersecurity rules damp sentiment, despite a rebound in property plays.
Cybersecurity threats to watch for in 2022: Expert
Thomas Hum – Yahoo Finance
With more people working remotely than ever before, cybersecurity has never been more important for both individuals and businesses. According to ESET Chief Cyber Threat Officer Tony Anscombe, there are several key threats to look out for in 2022.
How to Get a Cybersecurity Job at PayPal, According to Senior Director
Rachel DuRose and Asia Martin – Business Insider
When people think about the cybersecurity industry, they probably picture a man in a dark hoodie sitting in front of a computer, says Renana Friedlich, senior director of security operations at PayPal.
Friedlich wants to put a new face on the profession, and it starts with recognizing the true breadth of the field.
Opportunity not fear: Reframing cybersecurity to build a safer net for all
Dr. Melanie Garson – TechCrunch
Throughout 2021, global news seemed to ricochet between the rapid spread of new iterations of COVID-19 and cyber criminality — both becoming increasingly creative and disruptive as they mutate in a battle for survival; both interlinked as cybercriminals profit from rapid digitalization forced by COVID-19 lockdowns. In a recent interview, a prominent cybersecurity executive pointed out that alongside birth, death and taxes, the only other guarantee in our current lives is the exponential growth of digital threats.
Going Back to Basics to Fix Our Broken Approach to Cybersecurity
David Ratner – CPO Magazine
Cybersecurity has garnered plenty of mainstream attention lately—but for all the wrong reasons. The past year has been marked by a seemingly unending stream of major companies and organizations coming forward to admit they were the victim of a data breach or malware attack. When cybersecurity measures are working well, the end users are never even aware of them. So when ransomware suddenly becomes a household term, you know something is seriously broken with our approach to cybersecurity.
How Cybersecurity Can Keep Up With Waves Of Innovation
Jeff Williams – Forbes
There has been a cycle across the history of computing, a cycle that has repeated itself multiple times. Engineers and IT architects innovate, and the result is a new technology. They build out a platform, and its adoption reaches critical mass. Not long after that, what was recently a new, cutting-edge technology is used almost universally by enterprises. With infrastructure, this cycle has occurred over the years with mainframes, then with desktops, physical servers and virtual servers. For applications, we went from mainframes to on-premises servers and then the web.
Bitcoin at the Bank: Mainstream Lenders Dabble in Crypto Outside the U.S.; Large banks in Australia and Spain are offering customers cryptocurrency assets for the first time
Patricia Kowsmann – WSJ
Mainstream banks outside the U.S. are sampling cryptocurrencies, offering customers ways to invest and store bitcoin and other digital assets. Banco Bilbao Vizcaya Argentaria SA BBVA 1.36% —Spain’s second-largest lender by assets, with operations in Latin America and Turkey—allows customers to hold, buy and sell bitcoin and ether through a digital account. Australia’s largest bank, Commonwealth Bank of Australia, has also launched a pilot program to offer similar services.
Crypto and NFTs could face UK regulation crackdown in 2022 due to fears young people risk losing money; MPs and campaigners are pushing ministers and regulatory agencies to take a tougher stance on the promotion of crypto assets
Hugo Gye – INews.com
Ministers are weighing up a regulatory crackdown on digital investment crazes such as cryptocurrencies and non-fungible tokens (NFTs) in 2022 amid growing warnings they could prove dangerous for vulnerable young people.
Almost all NFTs are owned by just 32,000 people; In the past year, the crypto craze has expanded into an inescapable hellscape.
Lewis White – Stealth Optional
In the past year, the crypto craze has expanded into an inescapable hellscape. The technology is all over social media; even game companies like Square Enix and Ubisoft are almost trying to incorporate NFTs into their games. However, much like the cryptocurrency that is used to purchase NFTs, the cryptoart is a remarkably small market. Additionally, that tiny market already has its own top percent that owns the majority of assets.
Near Hits All-Time High as Layer-1 Blockchain Competition Heats Up; Near Protocol’s native token has soared to a new all-time high above $17 amid bullish competition between various layer-1 networks.
Andrew Asmakov – Decrypt.co
The price of NEAR, the native token of Near Protocol, has skyrocketed and hit a new high of $17.28 on Tuesday. The token has slightly backtracked since. Still, the token is up 15.3% in the past 24 hours, trading at $16.84 by press time, per CoinGecko.
NFT project takes prime Hong Kong ad spot in Central as crypto firms test residents’ appetite for blockchain assets;
Projects like Delirious Mind Travelers and Degenerate Ape Academy are spending big money in a bet on the future of NFTs in Asia’s financial hub; NFT investment minted many new millionaires in 2021, but some investors have also raised the alarm about scams that leave buyers with little recourse
Josh Ye – South China Morning Post
At the heart of Hong Kong’s business district, the latest big advertisements are not about asset management, stocks or diamonds – they are for non-fungible tokens (NFTs) of digital avatars in the form of koalas and apes.
Nigel Green, CEO deVere Group: Three More Countries To Adopt Bitcoin As Legal Tender In 2022?
Bitcoin will be adopted as legal tender in three more countries in 2022, predicts the CEO of a game-changing global financial giant. The ultra-bullish prediction from Nigel Green of deVere Group, one of the world’s largest independent financial advisory, asset management and fintech organizations, doubles down on one made on Sunday by the President of El Salvador. To his 3.2 million followers, Nayib Bukele tweeted a series of predictions about Bitcoin, including “2 more countries will adopt it as legal tender.” Amongst the others were that the cryptocurrency will hit $100,000 this year.
Will Bitcoin Hit $100,000 in 2022? We Asked the Experts
Joanna Ossinger – Bloomberg
Nexo’s Trenchev says Bitcoin could hit six figures by June; Halley sees ‘financial-market group-think stupidity’ at work
After a hawkish turn by the Federal Reserve took some steam out of cryptocurrencies at year-end while largely sparing other risk assets, central bank policy is taking a key role in the debate about the outlook for tokens in 2022. To what extent will Jerome Powell’s Fed tighten policy to stem inflation? The answer to that question will help determine whether Bitcoin follows its 60% gain in 2021 with another banner year, some analysts say.
Estonia Moves to Reassure Crypto Sector as New Rules Weighed
Ott Tammik and Aaron Eglitis – Bloomberg
Estonia has moved to calm investor fears about tougher rules on cryptocurrency, a sector which has been a target of regulatory scrutiny for the Baltic nation since at least 2019. The country is considering new rules that would enforce due diligence, audits and higher levels of capital for crypto firms ahead of a review of its money laundering policies this quarter. The proposed rules still need parliamentary approval.
Lack of competition in U.S. meat industry amounts to ‘exploitation,’ says Biden
Leah Douglas – Reuters
The United States will issue new rules and $1 billion in funding this year to support independent meat processors and ranchers as part of a plan to address a lack of “meaningful competition” in the meat sector, President Joe Biden said on Monday. The initiative comes amid rising concerns that a handful of big beef, pork and poultry companies have too much control over the American meat market, allowing them to dictate wholesale and retail pricing to profit at the expense of their suppliers and consumers.
Biden Promotes Plan Aimed at Tackling Meat Prices, President met virtually with farmers and ranchers as his administration looks for ways to ease inflation
Patrick Thomas, Catherine Lucey – WSJ
The Biden administration on Monday outlined tighter regulations for U.S. meatpackers, accusing the industry of inflating Americans’ food bills, as meat companies say they are experiencing persistent supply chain problems and labor shortages as the economy recovers from the pandemic.
Biden likely to announce Raskin as Fed’s vice chair pick this week – Axios
U.S. President Joe Biden could pick former Federal Reserve Governor Sarah Bloom Raskin as his choice for vice chair of supervision at the central bank, Axios reported on Monday, saying an announcement is expected as soon as this week. Raskin, who served in the Treasury Department in the Obama administration, could bring a tougher regulatory profile to the country’s most powerful bank oversight role, a position recently vacated by Randal Quarles, a Donald Trump appointee.
White House Likely to Nominate Philip Jefferson for Fed Seat
Katia Dmitrieva and Jennifer Jacobs – Bloomberg
Jefferson has twice previously worked at the Federal Reserve; Since Fed’s founding, only three governors have been Black
The White House is likely to nominate economist Philip Jefferson for a seat on the Federal Reserve’s board of governors, according to people familiar with the matter, an appointment that would make him just the fourth Black man to hold the position in the central bank’s more than 100-year history.
A 1980s Blueprint on How to Be a Leader; A new film shows how Harold Washington, Chicago’s first Black mayor, stood up to a majority-white city council and pushed through infrastructure improvements for all.
Brentin Mock – Bloomberg
Stepping into office after winning a tough race, he knew that getting his agenda passed would be difficult due to stiff opposition in the legislative branch. He eventually won lawmakers over with a massive infrastructure package that he figured correctly would be difficult to vote against since it benefitted his opponents’ own constituents.
Europe Sleepwalked Into an Energy Crisis That Could Last Years; With its natural gas stockpiles running dangerously low, the European Union is at the mercy of two wily forces—Putin and the weather.
Isis Almeida, Ewa Krukowska, Anna Shiryaevskya – Bloomberg
The retired salt caverns, aquifers, and fuel depots that hold Europe’s stockpiles of natural gas have never been so empty at this point in winter. Just four months after Amos Hochstein, the U.S. envoy for energy security, said Europe wasn’t doing enough to prepare for the dark and cold season ahead, the continent is grappling with a supply crunch that’s caused benchmark gas prices to more than quadruple from last year’s levels, squeezing businesses and households. The crisis has left the European Union at the mercy of the weather and Russian President Vladimir Putin’s wiles, both notoriously difficult to predict.
CFTC Orders Event-Based Binary Options Markets Operator to Pay $1.4 Million Penalty
The Commodity Futures Trading Commission today entered an order filing and simultaneously settling charges against Delaware-registered Blockratize, Inc. d/b/a Polymarket, based in New York City, for offering off-exchange event-based binary options contracts and failure to obtain designation as a designated contract market (DCM) or registration as a swap execution facility (SEF).
IOSCO Report Provides New Global-Level Data On Global Investment Funds Industry
The Board of the International Organization of Securities Commissions (IOSCO) today published its Investment Funds Statistics Report, which provides new insights into the global investment funds industry and the potential systemic risks this industry may pose to the international financial system. Since 2010, IOSCO has undertaken a biennial data collection exercise in the form of the IOSCO Hedge Funds Survey. However, the scope of this latest report goes beyond hedge funds to include, for the first time, an analysis of the opened-ended and closed-ended funds industries. It is based on a comprehensive collection of supervisory data from IOSCO members.
Event-Betting Platform Polymarket to Pay $1.4 Million U.S. Fine
Benjamin Bain – Bloomberg
Regulator alleged firm had offered illegal wagers using crypto; Polymarket also to ‘wind down’ offerings that violated rules
Polymarket, an online platform for betting on politics, economic indicators and other real-world events, will pay $1.4 million to settle U.S. regulators’ allegations it offered illegal trading and must “wind down” contracts people use to wager. The firm, whose popularity surged during the pandemic, has been running an unregistered platform that lets people bet on the outcome of events since around June 2020, the Commodity Futures Trading Commission said in a statement Monday. Polymarket didn’t admit or deny wrongdoing in the settlement.
New EU Rules Spark Fight Over What Is ‘Green’ Energy; Proposal to include some natural gas and nuclear power investments as relatively climate-friendly draws harsh response in Germany
Laurence Norman – WSJ
The European Union has proposed treating nuclear energy and natural-gas investments as similar to renewables over coming years in pursuit of a carbon-neutral economy, but the approach faces criticism from some of the bloc’s governments. The draft recommendation, which needs approval from EU governments and the European Parliament, underlines the political controversy already stirred up by environmental policies in Europe, despite broad public support for action to prevent climate change.
Swedbank ex-chief charged over Baltic money-laundering scandal; Birgitte Bonnesen accused of downplaying problems at lender’s Estonian operation
Richard Milne – FT
The former chief executive of Swedbank has been charged with fraud and market manipulation, becoming the highest-ranking Swedish banker to be drawn into a sprawling money-laundering scandal in the Baltics. Birgitte Bonnesen had repeatedly spread misleading information suggesting Swedbank did not have any money-laundering problems in its Estonian operations, Thomas Langrot, chief prosecutor at Sweden’s Economic Crime Authority, said on Tuesday.
BaFin imposes administrative fine on Deutsche Bank; Authority claims temporary breach of controls on index data.
Richard Schwartz – The Trade
The week between Christmas and New Year saw BaFin, Germany’s federal financial supervisory authority, impose an administrative fine of almost EUR9 million on Deutsche Bank for a breach of the European Benchmarks Regulation (BMR). As a supervised contributor of data used in the determination of the Euro Interbank Offered Rate (Euribor), BaFin says Deutsche Bank at times did not have effective preventative systems, controls and policies in place within the meaning of Article 16 of BMR, which covers governance and control requirements for supervised contributors.
ESMA requests market feedback on the use of blockchain for trading and settlement; The move comes as part of a wider pilot regime for market infrastructures based on distributed ledger technology (DLT).
Laurie McAughtry – The Trade
The EU regulator has published a call for evidence requesting stakeholder input on the use of DLT within trading and settlement. The request, published on 4 January 2022, is part of the European Securities and Markets Authority’s (ESMA) DLT Pilot Regime looking at how MiFIR reporting requirements might need to be updated in order to accommodate “tokenised” securities that are handled on blockchain platforms.
ESMA launches call for evidence on distributed ledger technology
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a call for evidence on distributed ledger technology (DLT). The call for evidence seeks input from stakeholders on the use of DLT for trading and settlement and on the need for amending the regulatory technical standards (RTS) on regulatory reporting and transparency requirements.
Final Statements for Broker-Dealers, Investment Adviser Firms, Agents and Investment Adviser Representatives, and Branches
FINRA’s Renewal Program supports the collection and disbursement of fees related to the renewal of broker-dealer (BD) and investment adviser (IA) registrations, exempt reporting and notice filings with participating self-regulatory organizations (SRO) and jurisdictions. During this program, FINRA announces renewal fees owed by BD and IA firms via Preliminary Statements issued in November. FINRA publishes Final Statements in January to confirm or reconcile the actual renewal fees BD and IA firms owe after Jan. 1, 2022.
Investing and Trading
JPMorgan Strategists Say Global Stock Market Party Far From Over
Nikos Chrysoloras – Bloomberg
Everything is falling into place for further gains in global stocks this year, according to JPMorgan Chase & Co strategists. “Stay bullish — positive catalysts are not exhausted,” strategists led by Mislav Matejka wrote in a note to clients on Tuesday. Downside risks — including a hawkish turn by central banks, a slowdown in China’s economy, or more significant coronavirus restrictions — will either fail to materialize or are already priced in to stocks, they said. The positive outlook comes as benchmark indexes in both the U.S. and Europe trade at record highs, following last year’s ferocious rally on the back of unprecedented fiscal stimulus and a solid rebound from the pandemic-induced slump.
Why demand for Fed’s repo facility is still surging, to $1.6 trillion into 2022; There’s likely $3.5 trillion in excess liquidity in the system, according to Barclays
Joy Wiltermuth – MarketWatch
Demand for the Federal Reserve’s popular reverse repurchase program (RPP) climbed to $1.58 trillion on Monday, signaling continued high demand for the overnight facility as 2022 kicks off. Wall Street has been regularly parking more than $1 trillion overnight in the Fed facility since early August, with demand hitting a peak thus far of about $1.76 trillion in late December.
What Investors Learned From the Elizabeth Holmes Trial: ‘Zero’; Lure of hot market overshadows risks despite lesson of Theranos
Ellen Huet – Bloomberg
It took a jury seven full days to conclude that Theranos Inc. founder Elizabeth Holmes was guilty of four counts of fraud after a three-month trial. The startup world had been watching in suspense, but it was largely for the spectacle of it all — not because anyone thought the verdict would significantly change behavior in venture capital fundraising.
Fed Weighs Proposals for Eventual Reduction in Bond Holdings; Shrinking the central bank’s $8.76 trillion asset portfolio offers another tool to tighten policy at a time of high inflation
Nick Timiraos – WSJ
Feserve officials are beginning to map out how and when they could shrink their $8.76 trillion portfolio of Treasury and mortgage securities, which more than doubled amid efforts to stabilize the economy over the past two years. At their policy meeting last month, officials agreed to wind down their bond-purchase stimulus program more quickly amid growing concerns about high inflation, setting it on track to end in March. Officials began discussing at that meeting what should happen to the bondholdings after that point, and some are pushing to start shrinking them sooner and faster than they did after an earlier asset-purchase program.
Environmental, Social and Corporate Governance
Private Equity Lines Up for Coal ‘Bonanza’ Left by Public Miners
James Attwood – Bloomberg
Private equity firms are lining up to take on the dirty — and highly profitable — assets being divested by publicly traded commodity producers as the world grapples to decarbonize.
A Widening Web of Undersea Cables Connects Britain to Green Energy; Linking one nation’s power grid with another’s is considered essential as more electricity is generated from solar and wind.
Stanley Reed – NY Times
Britain’s economic and political ties to Europe may be fraying, but a growing web of undersea electrical cables binds the nation’s vital power system and its clean energy aspirations to the continent.
U.S. LNG Exports Top Rivals for First Time on Shale Revolution
Stephen Stapczynski – Bloomberg
American output beat Qatar, Australia in December: ship data; Sabine Pass, Freeport facilities ramped up deliveries
The U.S. was the world’s biggest exporter of liquefied natural gas last month for the first time ever, as projects ramped up production and deliveries surged to energy-starved Europe. Output from American facilities edged above Qatar in December due largely to a jump in exports from the Sabine Pass and Freeport facilities, according to ship-tracking data compiled by Bloomberg. Cheniere Energy Inc. said last month that it achieved its first cargo from a new production unit at its Sabine Pass plant.
Chris Rokos and Partners Were Paid $1.2 Billion Before Hedge Fund Slid
Nishant Kumar – Bloomberg
More than half of the payout went to billionaire Rokos himself; The compensation followed a 44% gain for the fund in 2020
Billionaire Chris Rokos and his partners paid themselves 914 million pounds ($1.2 billion) just before their investors suffered a record year of losses. Roughly 509.4 million pounds of that total went to Rokos himself for the year ending March 2021, the most since he started trading for his hedge fund firm, a filing with U.K.’s Companies House shows. A spokesman for Rokos Capital Management declined to comment.
Bridgewater Names Bar Dea, Bertolini CEOs as McCormick Quits
Erik Schatzker and Katherine Burton – Bloomberg
Bridgewater Associates named Nir Bar Dea and Mark Bertolini co-chief executive officers of the world’s biggest hedge fund, opening a new chapter at the storied firm as David McCormick steps down to pursue a career in politics.
Goldman to Double Israel Staff and Act as Bridge to Wealth Funds
Daniel Avis – Bloomberg
Goldman Sachs Group Inc. is coming off its best year ever in Israel. But the hiring spree it’s planning is both a rebuilding effort and a growth push. After emerging as the top adviser on Israeli initial public offerings in the U.S. in 2021, the Wall Street firm plans to double its local staff to around 30 by adding five people to the investment banking division and expanding its asset management and private wealth teams in Tel Aviv.
Hedge funds struggle to lure new money as performance lags; Sharp gains for US tech stocks and choppy markets lead to ‘huge dispersion’ among managers
Laurence Fletcher – FT
Big rallies in US tech behemoths and a series of painful market jolts have disrupted many hedge funds’ attempts to lure back investors who have deserted the sector in recent years.
Single-Day $10 Billion Profit Erases Turkish Central Bank Losses
Cagan Koc – Bloomberg
Turkey’s central bank posted an extraordinary daily profit of around $10 billion on the final day of 2021, sparking questions on what caused this overnight boon that will trickle down to the nation’s Treasury.
China’s quant funds become victims of their own success
Samuel Shen and Selena Li – Reuters
China’s algorithm-driven quant funds boomed in 2021 as investors sought alternatives to a languid stock market, but the final months of the year saw some “flash boys” bogged down by heavy volatility and their sheer size.
OPEC and Russia will discuss oil output, amid concerns about lagging production.
Stanley Reed – NY Times
Officials from OPEC, Russia and other oil producers are expected to agree to continue their program of gradual monthly output increases when they meet by teleconference on Tuesday, but there are growing doubts about whether they can deliver on the additional barrels.
Evergrande Gets a New Reason to Worry; Amid tightening regulatory scrutiny, the debt-laden property developer has been asked to tear down 39 buildings on the Chinese tropical island of Hainan
Jacky Wong – WSJ
Embattled Chinese property developer Evergrande EGRNF -3.97% isn’t starting the year in a festive mood. The company said Tuesday that it had received an order from a local government to tear down 39 buildings on the Chinese tropical island of Hainan. Evergrande hasn’t disclosed why the Danzhou government ordered the demolition. Local media reported that the construction was approved illegally. Evergrande said the order won’t affect the rest of the development, on which it has spent 81 billion yuan, the equivalent of $12.8 billion, for more than 60,000 apartments.
What the Pandemic’s ‘Open Streets’ Really Revealed; Covid-inspired traffic restrictions and street changes have swept scores of U.S. cities since the start of the pandemic. But not all communities have welcomed them.
Stephan Schmidt – Bloomberg
During the early phase of the Covid-19 crisis, scores of U.S. cities experimented with closing off streets to cars to create more public space. These initiatives went by many names — cities called them slow, open, or shared streets, among other terms — and covered a range of activities. In addition to full vehicle bans, cities created emergency sidewalk and bike lane extensions, allowed restaurants to carve out dedicated outdoor dining spaces and food loading/pick-up zones in former parking spaces, and lifted parking restrictions and fees on other areas.
Saudi Superyacht Dispute Pits Credit Suisse Against Gulf Prince
Ellen Milligan – Bloomberg
Bank says Saudi royal owes $42 million for luxury cruiser; Prince’s spokesperson didn’t respond to requests for comment
Credit Suisse Group AG is pursuing a Saudi prince in court, alleging he failed to repay the bank around $78 million in interest and loans he took out to refinance his 82-meter (269-foot) superyacht and mansion property in England.