Banks turn to AI as regulators press for Libor exit; US Treasury refuses to extend some of Fed’s crisis-fighting tools

Nov 20, 2020

First Read

$15,961/$300,000 (5.3%)
Julie Armstrong


Hits & Takes
JLN Staff

John Lothian News and John Lothian Productions have produced a short video to encourage people to wear masks, wash their hands, stay 6 feet apart and to stop COVID-19 so we can all get together again soon.

The U.S. Center for Disease Control is pleading with people to stay home for Thanksgiving.

Julie Armstrong is the latest donor to the JLN MarketsWiki Education GoFundMe campaign. Julie is the chief commercial officer at Cosaic. One of her former roles was as executive director, global head of market technology services at the [[CME Group]]. She is a spectacular presenter and fintech spokesperson.

JLN interviewed Andy Busch about the results of the recent election. We are publishing that video now, but here it is on Vimeo.

JPX has launched the JPX ESG Knowledge Hub, a platform where listed companies can access a variety of ESG investment and sustainable finance-related information in one place, building on the Practical Handbook for ESG Disclosure which JPX and TSE published in March 2020.

Reminder: the LaSalle Street Trading Tech Awards fundraising event to support the Scouts in the Pathway to Adventure Council of the Boy Scouts of America is on December 3.

US mortgage rates have fallen to record levels for the 13th straight year, Bloomberg reported.

Bloomberg is reporting that “America’s Biggest Oil Storage Hub Is Filling to the Brim Again.” Get ready for negative oil prices again, potentially.

My hair coloring tonic does not run down my face because I don’t use hair coloring, unlike former New York Mayor Rudy Giuliani.

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL


Nasdaq Chief Economist Phil Mackintosh’s latest article is called “Post-Election Market Trends 2020” and covers the Biden trade, the vaccine trade, and what’s going on with volatility. You can read it here.~SR

The Operating Committees of the Securities Information Processors (“SIPs”) today announced the addition of a new member to the Advisory Committee: Steve Miele, Chief Strategy Officer of LeveL ATS.~SR

Mark Yusko, founder and CEO of Morgan Creek Capital Management, said on CNBC’s “Fast Money” that he believes the bitcoin surge is due to the Fed devaluing the dollar. I’m a little skeptical of anyone who tries to pin a singular cause for any kind of activity in the bitcoin markets – whatever goes down, it’s usually due to a combination of factors rather than a single big one.~MR

Not a ton of options news this week – I guess now that the election is over and the VIX is back in the 20s, the markets are back to wait-and-see mode.~MR

The OCC cleared 28.3 percent more contracts than their YTD daily average Wednesday.~MR



Artificial intelligence is reshaping finance; Barclays tie-up with Amazon in Germany shows how the technology is upending the sector
Gillian Tett – FT
Last week Barclays’ credit card business struck a deal with Amazon to offer seamless customised shopping and payment services in Germany. The announcement drew little attention amid the US election, pandemic pain — and the cancellation of Ant Financial’s putative $37bn initial public offering. But investors and regulators should pay attention. That is not because of what the deal shows about German shopping habits, Amazon’s voracious expansion or Barclays strategy, per se.

*****We need any kind of intelligence we can get these days.~JJL


PanXchange Powers Through Pandemic with Award-Winning CEO Julie Lerner; Let’s Talk Hemp
Before Denver’s population boom several years ago, Julie Lerner, CEO and Founder of PanXchange, the leading benchmark price provider in the US Hemp Industry and other physical commodities, already had her eyes set on living near the majestic peaks of the Rocky Mountains.

*****Julie Lerner is rad!!~JJL


Japan Faces Worst Wild Bear Attacks in Five Years During Virus; A mix of factors, from coronavirus lockdowns to a bad year for acorns, drive bears to seek food where humans live
Erica Yokoyama – Bloomberg
On the morning of October 23, a 56-year-old employee at West Japan Railway Co. was inspecting trains when he encountered an Asian black bear just outside the Tsuruga station in Japan’s northwestern Fukui prefecture. He escaped with just a scratch, but about 10 minutes later, the same bear fractured the leg of another worker at a nearby construction site.

*****In Chicago we don’t know anything about dangerous bears.~JJL


Thursday’s Top Three
Our top story Thursday was Newsweek’s Trump Can Still Win In Armageddon Scenario for Markets, JP Morgan Warns. Second was Business Insider’s Bill Gates says in-person meetings aren’t the ‘gold standard’ anymore and that 50% of business travel will go away even after pandemic. Third was the bio page of McLean County Clerk Kathy Michael, who John wrote about in Thursday’s Hits & Takes.


Coin of the Week: Bitcoin (BTC)
Bitcoin surpassed a market price of $18,000 for the first time since 2017. The reason for this is unclear; some argue that growing public and institutional interest in bitcoin has created a bull market, while others attribute it to bitcoin whales.


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Lead Stories

Banks turn to AI as regulators press for Libor exit; Financial institutions are under pressure to move faster on their switch from the scandal-hit benchmark
Jane Croft – FT
Frequently described as the world’s most important number because it underpins trillions of dollars of transactions, the London interbank offered rate (Libor) has persisted until now despite a scandal that caused lasting reputational damage to the entire financial system.

US Treasury refuses to extend some of Fed’s crisis-fighting tools; Steven Mnuchin orders several lending facilities to close over objections of central bank
James Politi and Colby Smith – FT
The US Treasury has decided not to extend several emergency lending facilities set up by the Federal Reserve at the start of the coronavirus pandemic, prompting a rare expression of disappointment from the central bank, which warned that the economy remained “strained and vulnerable”.

Goldman Partner With Taste for Speed Says Market Has Hit Limits; Elizabeth Martin talks about why engineers outnumber salesmen in electronic equities trading.
Viren Vaghela – Bloomberg
Elizabeth Martin is betting on engineers to automate trading but not necessarily to make things faster. Goldman Sachs Group Inc.’s global co-head of futures and equities electronic trading says that the ‘Flash Boys’ era of the past decade has ceded some ground to customizing trading for clients.

Biden Says He Has Picked Nominee to Lead Treasury Department; President-elect moves ahead on transition efforts, meets with bipartisan group of governors
Sabrina Siddiqui and Ken Thomas – WSJ
President-elect Joe Biden said Thursday he had chosen a nominee to lead the Treasury Department who he thinks will be accepted by both the liberal and moderate wings of the Democratic Party.

U.S. financial groups, wary of crackdown, feel out Biden transition team
Michelle Price, Pete Schroeder – Reuters
Financial lobbyists, kept at arm’s length by Joe Biden’s campaign, have begun engaging with the Democratic president-elect’s transition team on issues including economic stimulus, pandemic aid programs, and appointees, according to more than a dozen executives at banks and financial lobby groups.

Nasdaq to Buy Anti-Financial Crime Firm Verafin for $2.75 Billion; The acquisition would be Nasdaq’s latest effort to diversify away from its core exchange business into technology
Alexander Osipovich – WSJ
Nasdaq Inc. NDAQ 1.65% will buy Verafin, a software company that uses artificial intelligence to help banks detect money laundering and fraud, for $2.75 billion, the companies said Thursday. If completed, the Verafin acquisition would be New York-based Nasdaq’s largest deal in more than a decade and its latest effort to diversify away from its core exchange business into technology. The deal is expected to close early next year, subject to regulatory approval and other conditions.

Tyson Suspends Managers After Lawsuit Claims They Bet on Covid-19 Infections; Meat giant faces wrongful death suit from family of deceased Iowa plant worker
Jacob Bunge – WSJ
Tyson Foods Inc. TSN -1.75% said it suspended managers at an Iowa pork plant following allegations that some wagered on the number of workers who would become infected with Covid-19, as the pandemic roiled the meat industry last spring.

Gen Z Trading Prodigy Wins Over Wall Street Backers for Startup; Yoyo Chang turned a hunch born in an English high school cafeteria into a payments app supported by serious, well-heeled investors.
Edward Robinson – Bloomberg
When Yoyo Chang first told his parents that he wanted to start his own technology venture, they were alarmed: This was not part of the plan. Paul and Pauline Chang had emigrated to the U.K. from Taiwan in 2003 so their son could learn English and eventually pursue an international business career, preferably at a global investment bank. Sure enough, Chang excelled in school. He also fell in love with the stock market at the age of 13, raking in £250,000 ($326,650) in trading profits for his family by the time he went to college in 2018.

G-20 Must Begin the Next Chapter in Multilateralism; The cure for pandemic-ravaged economies lies in a commitment to debt-relief and spending.
Nic Dawes – Bloomberg
For all of its branding as “the premier forum for international economic cooperation,” let’s recall that the Group of 20 was born under a bad sign. The heads of state first met in the maw of the 2008 financial crisis, in the dying days of the Bush administration. Now, as they limp toward a low-expectation summit in the twilight of the Trump era, under the presidency of a Saudi Arabia struggling to launder its global reputation, the stars look just as bad.

The next fight is over the new normal; From ‘humanised pets’ to ‘amenitised offices’, there are competing visions for post-pandemic work
Tom Braithwaite – FT
This year Covid deniers have battled lockdown zealots, with most of us trapped in between. The next argument is over what the world will look like after the pandemic. Microsoft founder Bill Gates, who has committed time and money to map a way out of the crisis, is convinced that business will be conducted differently on the other side. He predicted this week that more than 50 per cent of pre-Covid business travel and more than 30 per cent of days in the office would not return.

After Covid, ‘Normal’ Could Be Profoundly Different; Even when lockdowns are a thing of the past, we’ll be spreading out in the suburbs and ordering in. The economy may never be the same.
Justin Lahart – WSJ
With this month’s announcements of two highly effective Covid-19 vaccines, enough Americans should be inoculated over next spring and summer for normal life to begin to resume. It won’t be quite the same as before, though: Our behavior will have changed, with profound effects on the economy.

Majority of buy-side have no plans to meet brokers face-to-face in near future; Results of the Virtu Financial annual survey suggests it may be a while before buy-side arrange in-office meetings with brokers.
Hayley McDowell – The Trade
Over 70% of buy-siders globally have said they do not expect to meet with brokers in person anytime soon due to the ongoing pandemic, a survey from Virtu Financial has revealed.

Black Bankers Fight Efforts to Keep Executives Off Biden’s Team
Robert Schmidt – Bloomberg
Liberals hard line on corporate ties unreasonable, groups say; African American group also mobilizing against lobbyist ban
Black financial executives are mobilizing against progressive Democrats’ demand that President-elect Joe Biden’s administration exclude anyone with corporate ties, as they look to ensure that people of color can secure top jobs in the new government.

Deutsche Bank Sees More Insolvencies, Less Provisions Next Year
Steven Arons and Nicholas Comfort – Bloomberg
CEO Christian Sewing says risk provisions to peak this year; Sees defaults rising as government programs draw to an end
Deutsche Bank AG Chief Executive Officer Christian Sewing said the lender sees lower credit provisions next year even as corporate insolvencies rise, signaling it expects the worst of the pandemic-induced economic uncertainty to be over.

Trading Book Capital – Virtual Event, November 19, 2020, Opening Remarks, Scott O’Malia, CEO, ISDA
Hello everyone, and welcome to this Trading Book Capital virtual event. Thank you to all of our speakers and to our event sponsor, Ernst & Young.

SEC Overhauls Certain Disclosure Requirements for Companies; The regulator approved additional changes to Regulation S-K ahead of Chairman Jay Clayton’s departure
Mark Maurer – WSJ
The U.S. Securities and Exchange Commission on Thursday voted to remove certain disclosure requirements for companies, one of the last rule changes to pass under departing Chairman Jay Clayton.


Math Knowledge Is Another Casualty of the Pandemic; Low-income students are learning less, according to online teacher Zearn.
Peter Coy – Bloomberg
Shalinee Sharma can track the impact of Covid-19 on students’ math achievement on a daily basis by checking the website of Zearn, the nonprofit company of which she is chief executive and co-founder. Students go to Zearn to take math lessons and to earn badges, which they get for a perfect score on a unit quiz. Early in the pandemic she and her staff noticed that high-income students were using Zearn more than ever, but the low-income students that Zearn is most concerned about were dropping off. The gap seemed to narrow at the start of this school year, but lately it has widened again.

‘Scary’ Winter of Lockdowns Cools Market Elation Over Vaccines
Gregor Stuart Hunter – Bloomberg
Social distancing being stepped up in U.S., Europe and Asia; Yet strategists see stocks, Treasury yields rising in 2021
The escalating pandemic is chipping away at the burst of vaccine optimism that propelled global stocks to a record. Social distancing is being stepped up in the U.S., Europe and Asia, darkening the outlook for the global recovery and underlining the importance of policy support. Against that backdrop, a public spat between the Trump administration and the Federal Reserve over emergency lending facilities unnerved investors Friday, prompting a slide in U.S. stock futures.

The extra mile: how Covid-19 transformed exercise; While gyms have closed and many activities have been curtailed, lockdowns are also inspiring a fitness revolution
Laura Noonan – FT
On a bright Sunday in mid-October, I ran 26.2 miles around New York City on my own. After eight months without training plans, group runs or shorter races, I was so convinced I wouldn’t finish my virtual marathon that I told almost no one I was attempting it.

Pfizer to Seek Authorization of Covid-19 Vaccine Friday; It is unclear how long it will take the FDA to issue decision; timing of application suggests shot is on track for distribution in December
Jared S. Hopkins – Bloomberg
Pfizer Inc. PFE -0.36% said it plans to ask U.S. health regulators on Friday to permit use of its Covid-19 vaccine, a milepost in months of frantic efforts to find a medicine that could beat back a rampaging pandemic.

U.S. Infections Set Another Daily Record
The U.S. logged 187,833 new cases Thursday as it reported record hospitalizations for the 10th day in a row. There were 80,698 people hospitalized with the disease, crossing the 80,000 mark for the first time.

This Is How the Outbreak Is Resurging Across New York City; The positive test rates have gone up in the city in the last month, leading to what many experts say is a second wave.
Joseph Goldstein – NY Times
At first, New York officials tracked the resurgence of the coronavirus to a few neighborhoods in the city with large populations of Orthodox Jewish residents.

A Global Covid Vaccine Heist; India and South Africa want the WTO to vitiate private U.S. patents.
The Editorial Board – WSJ
Breakthroughs on vaccines and new treatments are finally offering the world a path to end the Covid-19 pandemic. They’re a tribute to private U.S. corporate innovation, but now developing countries led by India and South Africa are making a damaging bid to waive patent protections for these life-saving advances.

Pizza Worker’s Lie to Contact Tracers Prompted One of World’s Toughest Lockdowns
Ed Johnson – Bloomberg
South Australia will lift its lockdown early and immediately allow outdoor exercise after fears authorities were dealing with an extremely infectious strain of the virus proved unfounded.

Exchanges, OTC and Clearing

Euronext shareholders unanimously vote in favour of Borsa Italiana deal; More than 99.9% of shareholder votes cast at the Euronext general meeting were in favour of its proposed takeover of LSEG’s Borsa Italiana.
Annabel Smith – The Trade
Shareholders from European exchange group Euronext have unanimously voted in favour of its Borsa Italiana acquisition from the London Stock Exchange Group (LSEG).

Euronext Extraordinary General Meeting results
Euronext, the leading pan-European market infrastructure, announced that today, during an extraordinary general meeting, its shareholders voted in favour of all items on the agenda, including the contemplated acquisition of the Borsa Italiana Group[1], with approval from more than 99.99% of the votes cast.

NYSE sales head departs for role at HFT Jump Trading; Paul Kenyon will join the business development team at Jump Trading next month after almost five years with NYSE.
Hayley McDowell – The Trade
The head of sales and relationship management at the New York Stock Exchange (NYSE) has departed to take on a new role with high-frequency trading firm Jump Trading, The TRADE understands.

JPX launches JPX ESG Knowledge Hub
Japan Exchange Group, Inc. (JPX) has today launched the JPX ESG Knowledge Hub as part of its website. The JPX ESG Knowledge Hub is a platform where listed companies can access a variety of ESG investment and sustainable finance-related information in one place, building on the Practical Handbook for ESG Disclosure which JPX and TSE published in March 2020. Companies can find in-depth, hands-on and up-to-date information and guidance on ESG disclosure provided by a variety of related parties including institutional investors, regulators, the Japanese government, and other listed companies. Contents as of the launch date are as below.

ICE Benchmark Administration to consult on ceasing publication of Libor;  The ICE benchmark administrator will consult on intentions to stop publication of all GBP, EUR, CHF, and JPY Libor settings after December next year.
Annabel Smith – The Trade
ICE Benchmark Administration (IBA) has unveiled plans to consult on its intention to cease publication of a majority of Libor interest rates after 31 December 2021.

Eurex MSCI: Robust roll activity picking up in Asian underlying MSCI futures;Over 450K contracts traded on Eurex past week
Robust start to roll activity in Asian underlying futures – EM Asia (ZTW); Japan (FMI); Taiwan (FPO)

Trading EURO STOXX 50 Dividend and Total Return Futures in uncertain times
As investors sought to hedge income returns amid widespread cuts in company payouts trading in listed derivatives tied to index dividends in the Eurozone reached records this year – to this conclusion comes a current Qontigo blog post.

Personnel: Kristina Jeromin is leaving Deutsche Börse AG
Deutsche Börse Group
Kristina Jeromin (37), Head of Group Sustainability & ESG Regulation, is leaving Deutsche Börse AG at the end of the year at her own request and by mutual agreement to take on a new and exciting task.

Notice of Summary Action
CME Group
MEMBER FIRM: Marex Spectron International Limited
Unless otherwise agreed to by the principal counterparties to the block trade, the seller, or, in the case of a brokered transaction, the broker handling the block trade, must ensure that each block trade is reported to the Exchange within the time period and in the manner specified by the Exchange. The report must include the contract, contract month, price, quantity of the transaction, the respective clearing members, the time of execution, and, for options, strike price, put or call and expiration month. The Exchange shall promptly publish such information separately from the reports of transactions in the regular market.
PENALTY: On November 3, 2020, pursuant to Rule 512, a fine in the amount of $2,000 was assessed against Marex Spectron International Limited for its violation of NYMEX Rule 526, and NYMEX Rule 526.F

Notice of Summary Action
CME Group
CBT RULES: CBT Rule 807. Open Long Positions During Delivery Month
At such times and in such manner as shall be prescribed by the Manual, clearing members shall submit a complete and accurate record of dates of all open purchases for use in making deliveries. Clearing members shall be fully responsible for inventories submitted to the Clearing House. This rule shall not apply to trading in options contracts.
PENALTY: On October 16, 2020, pursuant to Rule 512, a fine in the amount of $1,500 was assessed against Macquarie Futures USA LLC for its violations of Rule 807.

Performance Bond Requirements: Agriculture, Energy, Equity, and Interest Rate Margins – CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Performance Bond Requirements: Energy, Interest Rates, Agriculture – Effective November 20, 2020
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.

Product Modification Summary: Amendments to WCS Houston (Argus) vs. WTI Calendar Month Futures and WCS Houston (Argus) vs. WTI Trade Month Futures Final Settlement CME Group
Effective Sunday, November 22, 2020 for trade date Monday, November 23, 2020, please be advised that the New York Mercantile Exchange, Inc. (NYMEX) will amend the final settlement date for the products listed below on CME Globex and available for submission for clearing on CME ClearPort.

New Product Summary: Initial Listing of the Cobalt Metal (Fastmarkets) Futures Contract – Effective: December 14, 2020
CME Group

December 2020 Delivery Date Memo
CME Group
Listed are the relevant delivery dates for the December 2020 contracts for the Chicago Mercantile Exchange Inc. (“CME”), Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”), Commodity Exchange Inc. (“COMEX”) and the Dubai Mercantile Exchange Limited (“DME”).

IMPORTANT: Correction Regarding Strike Price Formats and Large Trader Submissions – Effective: November 23, 2020
CME Group
Please be reminded that effective this coming Monday, November 23, 2020, CME will list strikes at 6.25 basis point (0.0625 index point) intervals in Three-Month Eurodollar (ED) and Three-Month SOFR (SR3) options.

Reduction of Block Trade Minimum Quantity Threshold Levels for the Russell 1000 Index and E-mini S&P 500 ESG Index Futures Contracts
CME Group
Effective Sunday, December 6, 2020 for trade date Monday, December 7, 2020, and pending all relevant regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will reduce the block trade minimum quantity threshold levels of the Russell 1000 Index and E-mini S&P 500 ESG Index futures contracts as noted the table below.

SGX seeks public comment on default management process
Singapore Exchange (SGX) is consulting the market on the process to manage outstanding securities transactions should a clearing member be in default. The proposal will align the Central Depository (CDP) default management practices with global default management practices, and improve the efficiency and speed with which defaults may be resolved. This in turn will better protect the financial system from contagion risks due to the default of a clearing member.

CONNEQTOR started accepting application for the production
Tokyo Stock Exchange, Inc. (TSE) has been developing RFQ (Request for Quote) functions and CONNEQTOR with the aim of improving the liquidity of ETFs. We are pleased to announce that applications for the production use of CONNEQTOR have been accepted as of today.

LuxSE Takes First Important Steps Into Indian Market
Against the backdrop of the official meeting between Prime Minister of Luxembourg Xavier Bettel and Prime Minister of India Narendra Modi today, the Luxembourg Stock Exchange (LuxSE) announced the signing of two Memoranda of Understanding with Indian counterparts.


Genesis and Symphony partner to accelerate digitisation and connectivity for the global financial markets community
Genesis, the Low-Code Application Platform (LCAP) and Symphony Communication Services, LLC (hereafter Symphony) are pleased to announce their strategic partnership to provide the financial markets community with interoperable technology and applications, built and deployed both securely and at speed. The partnership will help to transform financial markets collaboration by pairing Genesis Low-Code Application Platform to drive digitisation with Symphony’s collaboration platform which securely and compliantly connects people, organisations and financial markets.

Barchart and OTC Global Holdings Announce Commodity Data Partnership
Barchart, a leading provider of market data and technology services to the financial, media, and commodity industries, has announced a new partnership with OTC Global Holdings, the world’s largest independent institutional broker of commodities, to deliver commodity forward curve data from their EOXLive market data platform.

Wirecard Ex-CEO Faces Lawmaker Reprisal Over Testimony Snub
Birgit Jennen and Anna Edwards – Bloomberg
Marks Braun will have to testify again, Greens lawmaker says; Former CEO refused to go beyond brief statement at hearing
Wirecard AG’s former chief executive officer is set to be called back to testify to a parliamentary investigative committee and could face legal retribution over his refusal to answer lawmakers’ questions.

How the private equity industry stole a march in European payments; The rise of the Italian group Nexi reveals how buyout firms seized an opportunity dropped by many banks
Kaye Wiggins and Silvia Sciorilli Borrelli – FT
Just over a decade ago, processing electronic payments was largely regarded as a dull back-office function, including by the banks that did it.

Liquidnet expands data science team with three new hires and NLP head; Steven Nichols has been promoted to head of NLP and unstructured data at Liquidnet, as three new data scientists also join the trading network.
Annabel Smith – The Trade
Institutional trading network and dark pool operator Liquidnet has appointed a new head of natural language processing (NLP) and hired three data scientists as part of plans to expand its data science division.


It’s Better to Be First on Digital Currencies, ECB Study Finds
Carolynn Look – Bloomberg
For central banks contemplating issuing a digital currency, there could be advantages to getting it done soon, according to a European Central Bank study. A country without a digital currency would lose some control over its monetary policy by being forced to react more strongly to spillovers from shocks in nations that do have such an instrument, researchers Massimo Minesso Ferrari, Arnaud Mehl, and Livio Stracca found.

The elusive promise of Bitcoin; Cryptocurrency has failed to provide investors with stability and protection
The editorial board – FT
Bitcoin promises to be digital gold: safe, valuable and rare. That could explain much of the cryptocurrency’s rally over the past year. Like the yellow-coloured metal, the price of bitcoin is supposed to surge as investors take fright at the possibility of inflation from central banks printing money or, for some, the potential collapse of society in the face of the coronavirus pandemic and civil disturbance following the US election. In those circumstances the two scarce assets are supposed to retain their value while others’ disappears.

Is PayPal driving the bitcoin spike? PayPal’s entry into the bitcoin market on October 21 coincides with the recent bitcoin mega rally and some believe the two could be connected.
Izabella Kaminska – FT
Bitcoin’s price has been mooning in the wake of the US election, so much so it is nearing the record highs it set back in December 2017, at pixel time trading above $18,000:

Roblox sells $1.2bn of virtual currency as it heads for IPO; Prospectus reveals rapid growth of pre-teen gaming platform during Covid-19 pandemic
Siddharth Venkataramakrishnan and Miles Kruppa – FT
Roblox, the video game platform loved by preteens, earned close to $1.2bn from selling virtual currency to its users in the first nine months of the year as gaming surged under Covid-19 lockdowns.

Poker Players Are Enhancing Winnings by Cashing Out in Bitcoin
Olga Kharif – Bloomberg
As Bitcoin continues to surge, successful online gamblers are turning into even bigger winners by requesting the cryptocurrency while cashing out from some poker websites. Winning Poker Network, which operates sites including, has had to buy millions of dollars worth of Bitcoin a day from so-called over-the-counter trading desks in recent weeks to meet demand of exiting players, according to Chief Executive Phil Nagy.

Chinese Crypto Mogul Emerges After Probe That Forced OKEx Halt
Joanna Ossinger and Zheping Huang – Bloomberg
The founder of one of the world’s largest Bitcoin exchanges broke a month-long silence to proclaim his innocence Friday, making his first comments since a Chinese police probe forced OKEx to briefly suspend withdrawals of all cryptocurrency assets. Xu Mingxing posted on a private social media feed he had been cooperating with an investigation into an equity merger his blockchain company OK Group completed years ago. The founder, who also goes by Star, said the investee was the target of a “complicated” legal case, without elaborating. Shares in listed affiliate OKG Technology Holdings Ltd. soared as much as 23% Friday in Hong Kong.

(Video) I Don’t Think the Halving Had a Meaningful Effect on Bitcoin: Nic Carter
Bloomberg TV
Bitcoin is seizing the spotlight from gold as a hedge against risks such as further dollar weakness or a pick-up in inflation. The cryptocurrency’s approximately 150% jump in 2020 puts the digital coin’s price relative to gold at the highest in almost three years. Nic Carter, founding partner at Castle Island Ventures, speaks with Bloomberg’s Caroline Hyde, Romaine Bostick and Joe Weisenthal on “What’d You Miss?”.

SEC Grants Digital Avatar Firm IMVU Permission to Sell Crypto Tokens
Nikhilesh De – Coindesk
The U.S. Securities and Exchange Commission (SEC) has granted another crypto firm permission to sell its native cryptocurrency. The SEC published a “no-action letter” on Thursday (dated Nov. 17) to IMVU, a digital avatar company, allowing the firm to sell its VCOIN digital tokens to users, albeit with strict restrictions on how these tokens can be sold.
The securities regulator has granted just a handful of other such letters, including to Turnkey Jets and Pocketful of Quarters, making the latest action somewhat notable despite the token’s relative obscurity. In a first, the SEC is allowing IMVU to sell tokens designed to be converted back to fiat by users. (In its previous rulings, the SEC said users could not buy, sell or trade either Quarters or Turnkey tokens.)

How Cryptocurrency Miners Helped Nvidia Earn More Than Expected
Max A. Cherney – Barron’s
Nvidia has a complicated relationship with cryptocurrency miners. They buy lots and lots of chips—so many that gamers, who the cards were designed for, have had trouble finding them.
When the company reported earnings late Wednesday, its numbers were far better than expected, in large part because of its videogame segment. As in the past, Nvidia’s (ticker: NVDA) new line of RTX 3000 cards has been popular among cryptocurrency miners interested in Ethereum.

Crypto’s largest options traders are taking advantage of a new market anonymity tool
Frank Chaparro – The Block
Cryptocurrency options traders are moving into the proverbial shadows thanks to startup trade messaging platform Paradigm. Launched in 2019, Paradigm has offered a platform for traders to trade in large size bilaterally and then settle those trades onto crypto options venues like CME Group and Deribit. The firm’s most recent platform update, dubbed Multi-dealer RFQ and Anonymous Trading, allows those participants to now trade with several counter-parties at once — and anonymously, to boot. “The upgrade will reduce time spent to make a multi-dealer trade from minutes to seconds and make liquidity for large and multi-leg orders instant and ‘on-demand,'” said CEO Anand Gomes.

ETH price crosses $500, Ethereum hashrate reaches a new all-time high
Yogita Khatri – The Block
On the back of a bitcoin (BTC) rally, the price of ether (ETH) is also surging. ETH has crossed the $500 mark today, for the first time since July 18, 2018. The world’s second-largest cryptocurrency is currently trading at around $501 on Coinbase, according to tracker TradingView. Ethereum’s mining hashrate, or the network’s computing power, also reached a new all-time high yesterday. It crossed 256 terahash per second (TH/S) in terms of a seven-day moving average (7DMA), according to data tracked by The Block.


Political divisions put Fed’s pandemic emergency measures in doubt; Investors fret as trillions of dollars of potential support to markets is due to expire
Colby Smith and James Politi – FT
The future of the Federal Reserve’s emergency lending facilities is in doubt as a result of divisions in Washington, sparking concern among investors that their lapse could rekindle financial market volatility just as the economic recovery is losing steam.

Trump Legal Team Claims Broad Conspiracy to Manipulate Election; President-elect Joe Biden dismisses unsupported claims by Rudy Giuliani and others as ‘outrageous’
Deanna Paul and Rebecca Davis O’Brien – WSJ
President Trump’s legal team, facing setbacks in court and a rapidly closing window as states move toward certifying Joe Biden’s Electoral College victory, laid out sprawling and unsupported allegations of a conspiracy between Democratic officials and foreign governments to steal the presidential election.

Trump’s Attempts to Overturn the Election Are Unparalleled in U.S. History; The president’s push to prevent states from certifying electors and get legislators to override voters’ will eclipses even the bitter 1876 election as an audacious use of brute political force.
David E. Sanger – WSJ
President Trump’s attempts to overturn the 2020 election are unprecedented in American history and an even more audacious use of brute political force to gain the White House than when Congress gave Rutherford B. Hayes the presidency during Reconstruction.

Republicans Supporting Trump, Remember: Lies Have a Long Half-Life; The president’s actions are disgraceful and damaging to our democracy.
The Editorial Board – NY Times
“I WON THE ELECTION!” President Trump lied on Twitter on Sunday — as he has done over and over again since Joe Biden was declared the winner this month. Voters gave Mr. Biden the highest margin of victory in a two-person race against a sitting president since Franklin D. Roosevelt in 1932. He is on track to win 306 electoral votes and to win the popular vote by around seven million ballots.

David Perdue profited from a Navy contractor’s stock while overseeing the Naval fleet.
Stephanie Saul – NY Times
Senator David Perdue, one of two Republican senators from Georgia facing runoff elections in January, began making large and ultimately profitable purchases of shares in a Navy contractor in 2018 just before taking over as chair of a Senate subcommittee overseeing the Navy fleet. The disclosure, first reported Wednesday by The Daily Beast, comes as both Mr. Perdue and Georgia’s other senator, Kelly Loeffler, have been under fire for their stock trades.

Trump undercuts American democracy as he clings to power
Stephen Collinson – CNN
President Donald Trump is trying to steal a free and fair election that he lost by a wide margin to President-elect Joe Biden by tearing at the most basic principle of American democracy: He’s trying to throw out hundreds of thousands of votes.

A Bogus Dispute Is Doing Real Damage; Conspiracy theories are damaging the country today and will hurt Republicans tomorrow.
Peggy Noonan – WSJ
No hard evidence of widespread fraud, no success in the courts or prospect of it. You can have a theory that a bad thing was done, but only facts will establish it. You need to do more than what Rudy Giuliani did at his news conference Thursday, which was throw out huge, barely comprehensible allegations and call people “crooks.” You need to do more than Sidney Powell, who, at the same news conference, charged that “communist money” is behind an international conspiracy to rig the U.S. election. There was drama, hyperbole, perhaps madness. But the wilder the charges, the more insubstantial the case appeared.

Explainer: Can Trump override the popular vote?
Tom Hals – Reuters
President Donald Trump’s latest strategy for attacking the legitimacy of the U.S. election appears to be focusing on a bold power play of persuading Republican state lawmakers to overturn the vote in states won by his Democratic challenger Joe Biden.


AML Platforms ‘Are Just Not Working’—Is Human Error or Tech the Culprit? Technologies meant to detect and stop financial crime may add more headaches than they relieve. Others say that the best tech can’t overcome how bankers use these tools. The AML dilemma likely falls somewhere in the middle.
Rebecca Natale – Waters Technology
Despite the introduction of machine learning, natural language processing, and the burgeoning field of regtech tools to help firms fight financial crime, banks are still falling victim to—and perpetuating—money laundering, a de facto economy in its own right that amounts to an estimated $800 billion to $2 trillion globally, according to statistics by the United Nations’ Office on Drugs and Crime.

ASIC places stop order on Skyring Fixed Income Fund advertisements
ASIC has placed a stop order on advertisements for the Skyring Fixed Income Fund (the fund). The responsible entity of the fund is Skyring Funds Management Limited (Skyring).

ESMA Consults on Supervisory Fees for Data Reporting Service Providers
The European Securities and Markets Authority, the EU’s securities markets regulator, today launches a public consultation on supervisory fees for data reporting services providers (DRSPs) to be supervised by ESMA starting in 2022.

ESMA Consults on Derogation Criteria For Data Reporting Service Providers
The European Securities and Markets Authority, the EU’s securities markets regulator, today launches a public consultation on criteria to identify Authorised Reporting Mechanisms (ARMs) and Approved Publications Arrangements (APAs) subject to authorisation and supervision by a competent authority of a EU Member States from January 2022.

SEC Adopts Amendments to Modernize and Enhance Management’s Discussion and Analysis and other Financial Disclosures
The Securities and Exchange Commission today announced that it has voted to adopt amendments that will modernize, simplify and enhance certain financial disclosure requirements in Regulation S-K. The amendments are intended to enhance the focus of financial disclosures on material information for the benefit of investors, while simplifying compliance efforts for registrants.

SEC Awards Whistleblower Over $900,000
The Securities and Exchange Commission today announced an award of over $900,000 to a whistleblower who identified securities law violations occurring overseas. The whistleblower’s timely and important information resulted in a significant expansion of an ongoing investigation.

CFTC Staff Extends Temporary Swap Data Reporting Relief for Certain International Swap Dealers and Major Swap Participants
The Commodity Futures Trading Commission’s Division of Market Oversight (DMO) today issued a staff letter extending no-action relief to certain CFTC-registered swap dealers (SDs) and major swap participants (MSPs).

NFA’s Exemptions System updated for persons seeking registration relief pursuant to CFTC Regulation 4.13
CFTC Regulation 4.13(b) requires a person seeking an exemption from registration under Regulation 4.13 to file electronically a notice of the exemption with NFA through its Exemptions System.

Treasury, Bank of England and FCA convene working group to facilitate investment in productive finance; The Treasury, the Bank of England (Bank) and the FCA will be convening an industry working group to facilitate investment in productive finance.
Investment in productive finance refers to investment that expands productive capacity, furthers sustainable growth and can make an important contribution to the real economy. Examples of this include plant and equipment (which can help businesses achieve scale), research and development (which improves the knowledge economy), technologies (for example, green technology), infrastructure and unlisted equities related to these sectors.

Investing and Trading

Oil Giant Aramco’s Strong Stock Is a Mirage; This week’s bond sale shows that global investors remain less enthusiastic about the stock than patriotic local shareholders
Rochelle Toplensky – WSJ
The best-performing big oil stock this year is one roundly rejected by global investors: Saudi Aramco. Most of the credit belongs to its shareholders rather than its management. It has been one of the worst years for oil and gas producers in recent history: A price war, a pandemic-induced plunge in energy demand and a green shift that raises awkward questions about the sector’s future profitability. Shares of the big U.S. oil producers are down almost a half in 2020 and their European peers about a quarter. That makes Saudi Aramco, whose stock is roughly flat, a star performer.

Environmental, Social and Corporate Governance

Young People Most Likely to Doubt Women’s Leadership Capability
Lucy Meakin – Bloomberg
Young people are the least likely age group to believe that women are as capable at leadership as men, according to a survey that suggests the push for gender equality is struggling. Just 72% of 18-34 year olds in Group of Seven nations consider both sexes equally suitable in top positions, the poll by Kantar and the Women Political Leaders group shows. That’s compared to 76% of 55-65 year olds. Men were more likely to hold sexist views at every age level.

Why investors like socially responsible companies
Matthew Heimer – Fortune
When the COVID pandemic emerged as a global crisis in February and March, many investors stampeded for the exits and sold off their stocks. But one group kept buying: Investors in funds that specialize in ESG investing, which pick companies based on their records on the environment, social responsibility, and corporate governance. The panelists on the Fortune Investor Roundtable see that trend not just as a good thing, but as something that could lead to permanent, meaningful changes in how companies operate in the world. At our annual meeting, they talked about hidden “green” companies, the importance of treating employees, and the growing gender diversity in the corner office.

Four Encouraging Signs As Businesses Wake Up To Importance Of Tackling Climate Change
IESE Business School – Forbes
The calls for ethical behavior by business organizations have grown louder over the past year of the pandemic and social unrest. Yet, as a recent multidisciplinary conference on corporate purpose made clear, responding to these needs by practicing good business is anything but simple. But there is a simple reason for ethical behavior, and that is that businesses should be committed to fixing rather than compounding the problems facing the world.


Nomura Plans Permanent Flexible Work for New York, London Staff
Lulu Yilun Chen and Viren Vaghela – Bloomberg
Company is considering shifting to a 50% work-from-home model; Says move would provide ‘right mix’ of work-life balance
Nomura Holdings Inc. plans to introduce flexible work on a permanent basis for its overseas staff, the latest global financial firm to consider such a move as the pandemic reshapes office life.

Mizuho to Cut Singapore Office Space on Work-From-Home Success
Faris Mokhtar – Bloomberg
Complements plans to trim space in New York and London; Joins Citigroup in paring its workplace in Singapore
Mizuho Financial Group Inc. is set to trim its Singapore office space, as the Japanese bank looks to revamp the workplace in global financial centers in the wake of the pandemic.

WorldQuant enjoying banner year despite $200m vaccine shake-up hit; Quant fund is up nearly 20 per cent in an otherwise bleak year for computer-led funds
Robin Wigglesworth and Laurence Fletcher – FT
The algorithmic hedge fund WorldQuant is enjoying one of its best years of returns, despite taking a hit of as much as $200m in last week’s stock market tumult.

Market turmoil shows need for more hedge fund scrutiny; Ructions in March put spotlight back on role of non-bank institutions in trading
Antonio Weiss – FT
Once again hedge funds are facing increased scrutiny for their role in a crisis moment in financial markets. This time, regulators need to take more action. The Financial Stability Board, which gathers the world’s leading financial regulators and finance ministries, this week released a comprehensive review of the turmoil that gripped financial markets in March.

Investors in limbo after Hargreaves platform glitches; Clients angry at company’s response after technical failures left many overdrawn
Madison Darbyshire – FT
Investors who found their trades wrongly duplicated on the Hargreaves Lansdown platform could be waiting up to two weeks for their accounts to be put right. The UK’s largest investment platform suffered multiple technical failures including duplicated trades on November 9, after customers traded at record levels as they looked to cash in on the announcement of a Covid-19 vaccine.

Perella Weinberg set to go public via Spac; Boutique investment bank shuns traditional IPO in favour of $1bn blank-cheque company merger
James Fontanella-Khan, Ortenca Aliaj and Sujeet Indap – FT
Boutique investment bank Perella Weinberg Partners is in talks to take its advisory business public via a special purpose acquisition vehicle in a deal valuing the division at $1bn, said people briefed about the matter.


Only the Best London Offices Thrive in an Emerging Covid Divide
Jack Sidders – Bloomberg
Rents and sale prices are rising for capital’s top buildings; Older offices see rents decline as companies dump excess space
The best new office buildings in London are commanding near record rents and prices during the pandemic; everything else, not so much. The divide is unfolding as the slump in economic activity damps development, helping the most prestigious buildings achieve high rents and lure yield-hungry investors. At the same time, companies are dumping space they no longer need with workers still cocooned at home, which is weighing on values for anything but fresh buildings that boast top green credentials and first-class amenities.

Night-Time Raiders Are Destroying $100,000 Soy Bags in Argentina
Jonathan Gilbert – Bloomberg
Companies are now pioneering bag alarms to fend off intruders; Vandalism spike raises tensions between government and farmers
Two-hundred-feet long, several-feet high and packed tight with freshly harvested soybeans, silobags that dot the Argentine Pampas this time of year are worth a hefty sum — almost $100,000 a piece at today’s prices. So when vandals began sneaking onto farms in the dead of the night and taking knives to the bags, exposing the contents to moisture and rendering them worthless, it got farmers’ attention. These sorts of incidents date back years, they say, but never at a clip like this. The attacks have come in rapid-fire succession in recent months, bringing the total for the year to over 150, according to industry groups.

Philippines Sees Surge in Financial Scams During Pandemic
Ditas B Lopez – Bloomberg
Suspicious transactions reports received by the Philippines’ anti-money laundering body rose 57% in January to August from a year ago amid the wide use of digital platforms during the pandemic, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said on Friday.

Why China could snarl global debt relief; A new common framework for restructuring looks great, but there are complications
John Dizard – FT
Over the past three months, the world of sovereign debt restructuring has Zoom-called and document-shuffled its way to a new “common framework” for debt restructuring beyond the temporary global relief offered during the Covid-19 pandemic. While, sadly, travel and meeting restrictions did not allow for the customary seasonal partying among the sovereign debt tribes, they did exchange the traditional fulsome self-congratulations, if only electronically.

U.S. Businesses in China More Optimistic With Biden Presidency; American companies hopeful bilateral relations stabilize, with some still concerned about employees’ health and safety in China
Liza Lin – WSJ
U.S. companies are more optimistic about doing business in China under President-elect Joe Biden, believing that bilateral relations will be more stable than in the last four years, a postelection survey by a Shanghai-based business chamber showed.

Hong Kong Police Probe Campus Protest for Security Crimes
Iain Marlow – Bloomberg
Powerful unit investigates graduation demonstration Thursday; Growing concerns about curbs on freedom of expression in city
Hong Kong police are investigating a campus protest over suspected violations of a security law imposed by China’s central government, fueling growing concerns about curbs on freedom of expression in the Asian financial center.


EU Warns U.K. Hasn’t Compromised Enough for Brexit Deal
Ian Wishart and Nikos Chrysoloras – Bloomberg
Envoys told time is running out and talks may go into December; But, in the negotiating room, signs of progress are emerging
The European Union warned that the U.K. hasn’t moved sufficiently to overcome the main obstacles to a post-Brexit trade deal as three of the bloc’s leaders called for contingency plans to be stepped up in case there is no agreement.

Prospect of Brexit stokes fires of Scottish independence; Even if a UK-EU deal can be agreed, the severing of ties with Brussels is persuading unionists to switch sides
Henry Mance – FT
“You see these quiz programmes on TV — all these English people, they don’t know basic things about Scotland!” Mike Paszowski started voting for the pro-independence Scottish National party three decades ago, shortly after the coal mine where he worked as an electrician was closed by Margaret Thatcher. He sees the British royal family as scroungers.

Brexit: What You Need to Know About the U.K.’s Prospective Deal With the EU
Stephen Fidler – WSJ
Brexit is shorthand for Britain’s exit from the European Union, which took place on Jan. 31 following a referendum in June 2016. The EU is left with 27 countries and a combined population of almost 450 million people that share a set of rules and laws covering the economy, trade and legal and security cooperation. The bloc grew out of a grouping of six countries that sought economic cooperation in the years after World War II. Britain joined the bloc in 1973, along with Ireland and Denmark.

Brexit deal close to being finalised, EU ambassadors told
Daniel Boffey – The Guardian
A trade and security agreement with Britain is close to being finalised but the risk remains of an accidental no-deal Brexit in six weeks, with gaps on the contentious issues only “slowly shrinking”, EU ambassadors have been told. With Michel Barnier in self-isolation after an EU negotiator tested positive for coronavirus, the talks will be conducted almost entirely online over the next few days. The European commission’s most senior official, Ilze Juhansone, told representatives of the 27 member states in Brussels that the majority of the 11 key negotiation issues now had “joint legal texts with fewer and fewer outstanding points”.

Brexit trade negotiations suspended because of COVID-19 case
Raf Casert and Jill Lawless – Associated Press
As if the Brexit trade negotiations were not tortuous enough, the coronavirus added a twist at a crucial stage on Thursday when top-level talks had to be suspended because an EU negotiator tested positive for COVID-19. It added uncertainty to the negotiations as a deadline looms ever closer and both sides are still divided on three key issues. EU chief negotiator Michel Barnier said that together with his U.K. counterpart, David Frost, “we have decided to suspend the negotiations at our level for a short period.” Talks among lower-ranking officials will continue in the meantime. And once the top negotiators can resume meeting face-to-face, the talks should be back in London.


BuzzFeed to Acquire HuffPost in Stock Deal With Verizon Media; New-media companies have been exploring mergers as they try to jump-start growth
Benjamin Mullin and Keach Hagey – WSJ
BuzzFeed Inc. has agreed to acquire Verizon Media’s HuffPost in a stock deal, the companies said Thursday, uniting two of the larger players in digital media as companies across the sector search for ways to jump-start growth. The acquisition is part of a larger deal between BuzzFeed and Verizon Media, a unit of Verizon Communications Inc. VZ -0.18% Under the pact, the companies will syndicate content on each other’s platforms and look to jointly explore advertising opportunities. Verizon Media will get a minority stake in BuzzFeed as a result of the tie-up, the companies said.

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Past JLN Newsletters

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