Hits & Takes
John Lothian & JLN Staff
The Washington Post has good coverage of the Pandora Papers. Here is a FAQ about the world of secret money. Here are key findings from the Pandora Papers investigation by the Washington Post. See more about this huge cache of information about “the flows of money, property and other assets concealed in the offshore financial system.”
Here are the highlights of the CME’s September volume report:
Overall ADV increased 14%, Interest Rate ADV increased 53%, including: Record quarterly SOFR futures ADV of 124,000, an increase of 183%, Eurodollar futures ADV rose 67% YoY
Ultra 10-Year U.S. Treasury Note futures ADV grew 62%, Treasury futures ADV rose 36%
Bitcoin futures ADV of 24,236, an increase of 170%, Options ADV increased 45%, Interest Rate options increased 87%, Energy options rose 26%, Equity Index options grew 21%, Foreign Exchange options increased 15%.
SEC: Chair Gary Gensler will give witness during the U.S. House Committee on Financial Services’ virtual hearing entitled, “Oversight of the Securities and Exchange Commission: Putting Investors and Market Integrity First.” — SEC
SEC: Commissioner Allison Herren Lee will provide remarks during an interview Wednesday at the 2021 Market Structure Conference hosted by the Security Traders Association. The one-on-one interview – led by Mina Nguyen of Jane Street – will focus on investor protection topics as: conflicts of interests and the demands for information on ESG. — SEC
Don’t forget to submit your recommendations for NFA “Executive Representative and Board and Nominating Committee Members” whose terms will expire at the board’s 2022 regular annual meeting. The deadline is October 13. — NFA
Here is a timely event given what is going on in energy and power in the UK and Europe right now. Energy Trading Week is an in-person event on October 5th and 6th in Chelsea Stadium in London. Find out more HERE.
Former ISDA CEO Bob Pickel has joined the advisory board of ten12, a new fintech solution focused on difficult to price securities. Ten12 was founded by Tom Price. Not the Tom Price I know and worked for, though. — LinkedIn
Congratulations to Wall Streets Rides Far on a successful event and kudos to Forefront Communications on their outstanding work to promote the event.
Fleur Sohtz, the chief marketing officer at Team8 and chief revenue office at Noogata, recently completed a 29-mile swim around Manhattan. She was also formerly head of marketing at Markit. As part of her swim aftermath, she wrote a summary about it and advice for startups titled “Just Keep Swimming: 5 Tips for Startups.” — team8
ABN AMRO Clearing in Chicago is looking for a “Head of Global Execution Services.” — LinkedIn
This time Prague Stock Exchange is celebrating its 150 year anniversary. — LinkedIn
Cboe Global Markets’ “European Equities team has updated its playbook which is designed to improve the resiliency of markets to venue outages.” Developed in collaboration with Aquis Exchange, they provide specific recommendations for all stakeholders to adopt to improve resiliency, primarily through industry-led changes. Read the paper here.
Also, in Chicago, Cboe is building a new trading floor. They posted a video to LinkedIn of the construction of the floor and what it will look like. — LinkedIn
Watch an interview with American Financial Exchange (AFX) Chairman and CEO Dr. Richard L. Sandor by China’s The Paper Show. — The Paper Show
The BET index (Bucharest Exchange Trading) was the first and main index of the Bucharest Stock Exchange / Bursa de Valori Bucuresti (BVB). It recently celebrated 24 years since its launch. From 1,000 points in 1997, BET has surpassed its historic high of 12,000 points this year. — LinkedIn
Hong Kong Exchanges and Clearing Limited (HKEX) received The Community Chest of Hong Kong’s Benefactor of the Year and Partner in Charity Awards in recognition of their dedication to community engagement. — LinkedIn
The inaugural event of the new Ronald H. Filler Institute for Financial Services Law at New York Law School will be on Monday, October 18 from 4-6 pm ET. The program features four of the top U.S. financial regulators as speakers, and Ron Filleris one of the moderators. — NYLS
We had no new donations to the JLN MarketsWiki Education GoFundMe campaign over the weekend.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
PanXchange announced late Friday that it added enhancements to its physical hemp trading platform with the addition of trading for hemp hurd in the form of micronized hurd, quarter-inch and three-quarter-inch segments. The products are used in animal bedding, plastics and building materials, including hempcrete and insulation. The exchange also reintroduced basis trading on its platform, a function it had disabled some years ago. More details are here.~SC
The Spread: Higher Bond Yields, Energy Fuel Continued Market Volatility at Quarter End; John’s Take Looks at Recent CFTC Action; Why VVIX Matters
– Stock market volatility continues to chug higher; Energy prices are hot;
– John’s Take walks us through the CFTC’s filing against 14 crypto options businesses;
– A timely look at the VVIX, the volatility of volatility with Russell Rhoads in the Term of the Week.
Pandora Papers reveal secret offshore financial system for global elites; Trove of secret files details opaque financial universe where global elite shield riches from taxes, probes and accountability
Greg Miller, Debbie Cenziper and Peter Whoriskey – Washington Post
A massive trove of private financial records shared with The Washington Post exposes vast reaches of the secretive offshore system used to hide billions of dollars from tax authorities, creditors, criminal investigators and — in 14 cases involving current country leaders — citizens around the world.
***** Pulling the layers back on the onion that is the secret offshore financial system.~JJL
This Is How the Trillion Dollar Coin Could End Debt Ceiling Fights for Good; It’s not a joke
Joe Weisenthal and Tracy Alloway – Bloomberg
Joe Weisenthal and Tracy Alloway analyze the weird patterns, the complex issues and the newest market crazes. Join the conversation every Monday and Thursday for interviews with the most interesting minds in finance, economics and markets.
***** I will trade you the World’s Biggest Ball of String for a trillion dollar coin.~JJL
Citadel Securities uses social media to battle online trolls; US group seeks to swat away ‘conspiracy theories’ regarding restricted trading in meme stocks
Philip Stafford – FT
Citadel Securities has used social media to hit back at “internet conspiracies and Twitter mobs” who have accused the US market maker of playing a crucial role in broker Robinhood’s decision to restrict trading in meme stocks.
*****Ken Griffin updated his status on Facebook to p*ssed!~JJL
Friday’s Top Three
Our top story Friday was The Surge in Natural Gas Prices Is Equal to a $190 Oil Shock, from Bloomberg. Second was Lou Malnati’s sold to investment firm Meritage, from Crain’s Chicago Business. Third was the announcement of the webinar Crypto for FCM customer accounts hosted by the FIA Operations Americas Division on October 20.
26,624 pages; 235,942 edits
Behind the Crypto Broker Accused of Enabling Ransomware Hackers
Kartikay Mehrotra and Olga Kharif – Bloomberg
Suex is first digital currency exchange sanctioned by U.S.; Platforms can allow cyber gangs to launder illicit proceeds
A cryptocurrency broker that the Biden administration considers a key cog in the recent ransomware epidemic is legally registered in the Czech Republic but doesn’t appear to have an office there. It may be operating out of Moscow’s tallest skyscraper despite its not being listed at the address. It earned the distinction last month of being the first crypto exchange to be blacklisted by the U.S. as governments try to stem further attacks. And while it denies any part in the recent spate of cyber crimes, experts say it’s a prime example of a shadowy corner of the industry that has allowed hackers to thrive by giving them the means to launder millions of dollars in illicit digital proceeds through “nested” middlemen that tap larger exchanges to process transaction
Why Brexit Britain Is Isolated, Vulnerable and Running on Fumes; After leaving the European Union, the U.K. is emerging from the pandemic without enough workers and facing a winter tougher than any since the 1970s.
Joe Mayes, Lizzy Burden, and Isis Almeida – Bloomberg
Lines of cars snake from gasoline stations. Fights break out among angry motorists trying to get fuel. Grocery staples are out of stock on store shelves. A charity warns that doubling heating bills will force a million households to rely on extra blankets to stay warm.
City of London Faces Brexit Talent Drain, says JPMorgan EMEA CEO
Ruth David and Stefania Spezzati – Bloomberg
Some markets have fragmented after Brexit, Raghavan says; Activity is moving to the U.S. as well as mainland Europe
London is losing talent as financial markets fragment following Brexit, according to one the most prominent bankers at JPMorgan Chase & Co. “The talent pool in the city has started to dwindle as more professionals relocate to Europe and elsewhere,” Vis Raghavan, chief executive officer for Europe, the Middle East and Africa at JPMorgan, said in an interview in London. “This fragmentation does not bode well, especially for the financial industry.”
Here’s the latest stock-market trading issue involving a Fed official
Steve Goldstein – MarketWatch
Another day, another trading scandal? This time the focus is on Vice Chair Richard Clarida. Citing financial disclosure forms, Bloomberg News reported he shifted funds from a Pimco bond fund into two stock-market funds — a day ahead of a statement from Chair Jerome Powell about possible policy action as the pandemic worsened. Clarida’s trades were worth between $1 million and $5 million.
Brexit Regulatory Uncertainty Cited as Top Risk by U.K. Bankers
Tom Metcalf – Bloomberg
Regulatory changes viewed as biggest threat to finance; Most bankers see sustainability as a top priority, survey says
Nine months after the end of the transition period, Brexit remains the biggest challenge facing Britain’s bankers. Almost two-thirds of financiers say regulatory change is a significant risk to their business, as uncertainty around the U.K. regime weighs on the industry, according to a Lloyds Banking Group Plc survey of 111 executives in June and July. That compares to about half of respondents identifying cybercrime as a worry and 34% pointing to pandemic-related issues.
Banks Start Dropping Clients to Dodge Costs Tied to ESG Risk
Frances Schwartzkopff – Bloomberg
EBA says it’s now seeing clear signs of deleveraging by banks; Banks that don’t cut their climate risk face capital add-on
European banks are beginning to drop clients that pose a climate risk rather than face the possibility of higher capital requirements, according to the watchdog overseeing the development. Banks are raising prices, denying loan requests, “de-selecting industries and in some cases clients,” said Jacob Gyntelberg, director of the economic and risk analysis department at the European Banking Authority.
Credit Suisse’s Zurich Offices Raided in Greensill Probe
Corinne Gretler and Marion Halftermeyer – Bloomberg
Search comes on heels of complaint by Switzerland’s Seco; Bank says its cooperating, raid wasn’t targeting Credit Suisse
Police searched Credit Suisse Group AG’s Zurich offices last week and confiscated documents related to Greensill Capital, complicating the Swiss bank’s efforts to move past a scandal that forced it to freeze a $10 billion group of funds.
Europe Faces ‘Perfect Storm’ in Energy Market, Says JPMorgan EMEA CEO
Ruth David and Stefania Spezzati – Bloomberg
JPMorgan Chase & Co.’s top executive in Europe says the energy market is facing a “perfect storm,” and there’s no “certainty on when oil and gas prices will recover.”
‘Fat finger’ $24m charge exposes fragility in crypto market; Erroneous fee is refunded, in proof to DeFi proponents of shared community values
Philip Stafford – FT
A small crypto asset trading platform called DeversiFi received a shock last week when it erroneously paid out a $24m fee. A glitch in some little-tested software code left the London-based exchange wearing the charge when a user made an unremarkable $100,000 deposit. On the blockchain, transactions are instantaneous, irreversible and anonymous. Market participants have no recourse to a deposit scheme or regulator to try to recoup funds. This incident highlights the vulnerabilities that implies.
Fed Prepares to Launch Review of Possible Central Bank Digital Currency; Officials will release a paper and solicit public comment, but are unlikely to decide soon on government-backed cryptocurrency
Andrew Ackerman – WSJ
The Federal Reserve plans as early as this week to launch a review of the potential benefits and risks of issuing a U.S. digital currency, as central banks around the world experiment with the potential new form of money. Fed officials are divided on the matter, making it unlikely they will decide any time soon on whether to create a digital dollar. Unlike private cryptocurrencies like bitcoin, a Fed version would be issued by and backed by the U.S. central bank, a government entity, as are U.S. paper dollar bills and coins.
Crypto Boom, Retail Investors Fuel Rise in Over-the-Counter Stock Trading; Trading volume has already surpassed last year’s total in the market that is home to crypto trusts, cannabis sellers and many international stocks
Alexander Osipovich – WSJ
A quirky corner of the U.S. stock market home to cannabis sellers, cryptocurrency trusts and other speculative investments is seeing record levels of activity. Trading volume in over-the-counter stocks, which aren’t listed on exchanges, has surpassed $548 billion so far this year. That is already more than the total volume for all 2020, according to OTC Markets Group, the company that operates the main marketplace for such securities.
Emerging market ‘cryptoization’ threatens financial stability – IMF
Tom Wilson – Reuters
The advent of digital currencies in emerging markets could spark “cryptoization” of local economies, potentially undermining exchange and capital controls and upsetting financial stability, the International Monetary Fund said on Friday.
Israelis face losing vaccine passport without Covid boosters; More than million could be barred from restaurants and cinemas for not getting third jab
Mehul Srivastava – FT
Israel will strip more than a million citizens of their vaccine passports on Sunday, becoming the first country to regulate booster shots as evidence of fully immunised status.
To Prevent the Next Pandemic, Scientists Seek One Vaccine for Many Coronaviruses; A pan-coronavirus vaccine could protect people against Covid-19 variants as well as the next pandemic virus
Betsy McKay – WSJ
Kayvon Modjarrad is out to win the war against this pandemic—and the next one. An emerging-infectious-diseases researcher with the U.S. Army, Dr. Modjarrad is pursuing a vaccine to protect against a range of coronaviruses that cause disease in humans—including Covid-19 variants that might elude today’s vaccines.
Is It Flu or Covid-19? It’s Harder to Tell the Symptoms Apart This Year; Runny nose? Fever? Fatigue? Here’s what doctors want you to know about how to tell the difference between illnesses as we head into flu season.
Alina Dizik – WSJ
Doctors expect the flu season to be rough this year, and with it comes another challenge: Figuring out whether your symptoms point to the flu, Covid-19 or something else. Many symptoms of flu and Covid-19 are similar. Fever, fatigue and achiness can occur with both. The often-milder symptoms of a Covid-19 breakthrough infection in vaccinated people—sometimes including a runny nose or sneezing—can make it even harder to distinguish between the two illnesses, or from a cold or allergies.
New Zealand to End ‘Zero Covid-19’ Strategy; Prime Minister Jacinda Ardern says the government is aiming to ‘actively control the virus’ as it prepares to ease restrictions
Stephen Wright – WSJ
New Zealand is ending its effort to keep Covid-19 out of the remote South Pacific country as the economic costs mount and after its latest lockdown failed to halt the spread of the virus.
Fauci says Americans should get vaccinated even if Merck’s Covid pill cuts deaths.
Reed Abelson – NY Times
As the nation’s death toll climbed above 700,000 in October, Dr. Anthony S. Fauci, an adviser on the pandemic to President Biden, emphasized the need for the 70 million Americans who are eligible for a vaccine to get immunized during interviews on Sunday morning talk shows.
French average of new COVID-19 cases drops below 5,000 for first time since mid-July
The French seven-day average of new COVID-19 cases dropped below 5,000 again for the first time since July 13, health ministry data released on Friday showed.
Australia reports 2,357 new COVID-19 cases as vaccination push continues
Lidia Kelly and Stefica Nicol Bikes – Reuters
Australia reported 2,357 new cases of the Delta coronavirus variant on Saturday, as the push to vaccinate the country’s population continues in order to end lockdowns and allow for the reopening of international borders.
Exchanges, OTC and Clearing
CME Group Reports Q3 and September 2021 Monthly Market Statistics
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its Q3 and September 2021 market statistics, showing average daily volume (ADV) increased 14 percent to 17.8 million contracts during the third quarter, and was up 11 percent at 18.8 million contracts during the month of September. Market statistics are available in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
Safeguarding a legacy: the Refinitiv deal; Following the London Stock Exchange Group’s blockbuster acquisition of Refinitiv earlier this year, Annabel Smith takes a look at what the deal means for the future of the exchange operator.
Annabel Smith – The Trade
Completed in January 2021 after almost 18 months of deliberations, the London Stock Exchange Group’s (LSEG) acquisition of data and analytics giant Refinitiv for $27 billion is a deal set to transform the exchange and the wider market. With its extensive data businesses across asset classes, Refinitiv gives LSEG a global reach and a multi-asset offering with newfound access to FX markets for the first time in its history. Research from consultancy Burton Taylor in 2019 when the takeover was confirmed predicted the deal would re-value the $2.8 billion exchange to roughly $8.4 billion, nearly 68% bigger than its closest rival, US exchange group ICE, at the time.
Deutsche Börse’s DB1 Ventures acquires stake in WeMatch as part of Series B funding round; Other investors from the funding round include Augmentum Fintech, Illuminate Financial and JP Morgan.
Wesley Bray – The Trade
Deutsche Börse’s DB1 Ventures has acquired a minority stake in front-office focused FinTech company WeMatch as part of their $19.5 million Series B equity funding round. WeMatch is a company that focusses on trading workflows for the wholesale derivatives industry. nThe FinTech replaces voice broking by developing web-based solutions that automate matching, negotiation and lifecycle management for instruments including securities borrowing and lending, total return swaps, interest rate derivatives, and equity derivatives.
Deutsche Börse’s DB1 Ventures leads the Series B funding round in WeMatch
WeMatch is a fintech company focussing on trading workflows for the wholesale derivatives industry; DB1 Ventures, the corporate venture capital arm of Deutsche Börse, leads the Series B funding round; Other investors include Augmentum Fintech PLC, Illuminate Financial and existing shareholder J.P. Morgan
As part of their USD 19.5 million Series B equity funding round, DB1 Ventures has acquired a minority stake in WeMatch, a fintech company digitizing the wholesale derivatives industry. The deal closed on 30 September 2021. Other investors in the funding round included Augmentum Fintech PLC, Illuminate Financial and existing shareholder J.P. Morgan.
NYSE Options: Penny Interval Program Adds October 2021
Effective October 4, 2021, the following issues will be added to the permanent Penny Interval Program (the “Program”) pursuant to that Program (as described below):
Robinhood Markets, Inc. (Ticker: HOOD)
Sphere 3d Corp. (Ticker: ANY)
Vinco Ventures, Inc. (Ticker: BBIG)
London Stock Exchange Group plc: Investor Education Event
London Stock Exchange Group
London Stock Exchange Group (LSEG) today hosts a second Investor Education Event, following the initial event earlier this year on 2 July. Today’s event will focus on two businesses within the Group’s Data & Analytics division that were not featured previously, Investment Solutions and Wealth Solutions, and the FX trading business within the Group’s Capital Markets division.
The Spanish stock exchange opens the trading session Ringing the Bell for Financial Literacy
The Ring the Bell for Financial Literacy initiative is promoted by IOSCO and WFE and takes place in more than 50 stock exchanges around the world; BME channels its commitment to financial education through Instituto BME, which has provided financial training to more than 126,000 students since its creation
Today’s trading session, on October 4th , Financial Literacy Day, started in the Spanish stock exchange with a commemorative Ring the Bell to celebrate it. The event is part of the Ring the Bell for Financial Literacy initiative, which is promoted by IOSCO and WFE. More than 50 stock exchanges around the world have rung the bell to highlight the importance of Financial Education. BME thus joins the Financial Literacy Day and the “Finanzas para Todos” (Finance for All) programme, an initiative promoted since 2008 by the Spanish stock market supervisor, CNMV, and the Bank of Spain.
Wolfspeed Completes Listing Transfer to the New York Stock Exchange
Intercontinental Exchange, Inc.
The New York Stock Exchange, part of Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, announced that Wolfspeed (NYSE: WOLF), a leader in Silicon Carbide technology and production, has completed its listing transfer and will begin trading today as an NYSE-listed company.
Four Vietnam-focused STOXX Indices Licensed to Korea Investment & Securities
Qontigo has licensed four Vietnam-focused indices to Korea Investment & Securities as underlyings for Exchange Traded Notes. The indices include: iSTOXX Vietnam Futures Roll KR, iSTOXX Vietnam Futures Roll Daily Short KR, iSTOXX Vietnam Futures Roll Daily Leverage 2 KR and iSTOXX Vietnam Futures Roll Daily Short 2 KR.
Heading in the right direction: Singapore’s drive for financial resilience
When did SGX start looking into financial literacy?
We started SGX Academy back in 2008 as a platform to drive financial literacy and address a growing need to empower the retail communities to make important and educated financial decisions. Back then, financial literacy was a fledging initiative amongst exchanges and, today, we remain one of the few exchanges in Asia that has dedicated investor-education and professional training programmes.
FIA announces 10 startups selected for 2021 Innovators Pavilion
FIA today announced the 10 startups that have been chosen to exhibit in the 2021 Innovators Pavilion, FIA’s annual showcase for fintech startups relevant to derivatives trading and clearing. The Pavilion takes place during FIA’s Futures and Options Expo, which brings together traders, brokers and other market professionals from a wide range of firms in the derivatives industry. The conference will be held in-person in Chicago, Nov. 2-4, 2021.
Monzo withdraws US banking licence application; Regulatory roadblock deals blow to UK fintech’s global ambitions
Nicholas Megaw and Stephen Morris – FT
Monzo has withdrawn its application for a US banking licence after it was told by regulators it was unlikely to be approved, in a blow to the British fintech company’s international expansion plans.
Quantum computer company IonQ makes Wall Street debut; First company of its type to be publicly listed raises $635m after Spac merger
Richard Waters – FT
The first quantum computer company to pull off a stock market listing made its debut on Wall Street on Friday, marking a milestone for a technology that until recently was thought to be many years from practical use.
Massive data leak exposes hidden wealth of world leaders; Report by media consortium outlines how the wealthy use tax havens to move and store money
Kiran Stacey in Washington – FT
The hidden wealth of hundreds of rich and powerful people around the world has been exposed in one of the biggest leaks of financial information. The financial transactions of dozens of world leaders, from King Abdullah of Jordan to former UK prime minister Tony Blair, were detailed in the disclosures, which showed how the wealthiest people in the world use offshore tax havens to store and move their money
Bank of England-backed cyber security war game opens to more companies; Large banks to small groups are participating in resilience test
Laura Noonan – FT
A Bank of England-backed initiative to test the UK financial sector’s cyber defences is opening up to financial services companies of all types and sizes on Monday in the broadest exercise of its type.
Microsoft is slowly but surely laying the groundwork to make security its secret weapon in the cloud wars with Amazon
Dave Gershgorn – Business Insider
Microsoft’s hiring of Charlie Bell has made waves through the cloud industry, as the longtime Amazon Web Services executive unexpectedly joined his now-former employer’s fiercest competitor. Bell is expected to lead a newly-formed engineering organization at Microsoft, focused on security, compliance, identity and management.
Pandora Papers: Newly revealed docs expose tax havens for rich and famous
Jorge Fitz-Gibbon and Jennifer Gould – NY Post
A massive trove of newly released confidential records exposes lucrative tax havens for some of the world’s most rich and powerful figures, from Jordan’s king to former British Prime Minister Tony Blair and spicy pop singer Shakira — and even an underground art dealer whose collections have been displayed at The Met.
Cybersecurity experts notice rising trend in hospital cyberattacks
Russ McQuaid – Fox 59 Indianapolis
Johnson Memorial Health in Franklin announced that its computer system has been disabled by a cyberattack.
The health care system of Johnson County maintains that it can continue to meet patient needs without access to computer records, most services are unaffected and anyone with a scheduled appointment should arrive a few minutes early to compensate for the impact of the breach.
JMH staff and its security contractors have spent the weekend trying to determine the extent of the intrusion and how to bring the system back up.
“It’s part of a trend we’ve seen building over the last couple years even before the pandemic,” said Scott Shackelford, Chairman of the IU Cybersecurity Risk Management Program.
Bombshell ‘Pandora Papers’ Shed Light On Global Elite’s Financial Secrets; Hundreds of world leaders, politicians, celebrities and religious leaders have been using offshore accounts to shield assets collectively worth trillions of dollars.
Michael Liedtke and Jonathan Mattise – Huffington Post
A new report sheds light on how world leaders, powerful politicians, billionaires and others have used offshore accounts to shield assets collectively worth trillions of dollars over the past quarter-century. The report by the International Consortium of Investigative Journalists brought promises of tax reform and demands for resignations and investigations, as well as explanations and denials from those targeted.
Treasury Is Pushing to Impose Bank-Like Rules on Stablecoins
Jesse Hamilton – Bloomberg
U.S. is aiming to issue report on tokens by month’s end; Regulators led by Treasury to suggest special bank charters
A U.S. effort to regulate stablecoins favors policing them like lenders, which could jeopardize the future of tokens from firms that refuse to seek federal banking licenses.
Coinbase Says Customers Were Hit Earlier With Phishing Attack
Olga Kharif – Bloomberg
Large-scale attack took place in April and May, exchange says; Systems to prevent future attacks have been implemented
Coinbase Global Inc. said customers of the biggest U.S. cryptocurrency exchange were targeted by a large-scale email phishing attack earlier this year, with criminals able to steal funds from accounts of more than 6,000 users.
Crypto clash? Grayscale’s CEO says SEC’s Gensler ‘shortsighted’ in backing a bitcoin futures ETF
Mark DeCambre – MarketWatch
For the next four weeks, we will highlight the most timely news in the crypto and blockchain industry, from developments in digital-asset companies, exchanges, funds and ventures, as well as important sector research and data. And of course, we’ll keep you up to speed on price performance in all the major crypto.
Central Banks Want to Issue Digital Coins But There’s a Major Trade-Off; CBDCs have the potential to disrupt the world of money as we know it and lots of people are trying to figure out how to preserve the status quo.
Paul J. Davies – Bloomberg
From the Federal Reserve to Bhutan’s Royal Monetary Authority in the Himalayas, central banks are working on digital currency studies or projects. There are several reasons for this. Most importantly, private cryptocurrencies and so-called stablecoins are rapidly becoming popular rivals to traditional money; Central bank digital currencies (CBDCs) would not only keep governments in the game but could help make payments and monetary policy more efficient and direct.
Bitcoin Launch Sparks Wave of Crypto Speculation in El Salvador
Michael D McDonald – Bloomberg
Salvadorans use government app to day trade on their phones; Many large businesses and some smaller ones now accept Bitcoin
Bitcoin has unleashed a wave of speculation in El Salvador since its adoption as legal tender last month.
Uber drivers, waiters and store owners are day-trading the cryptocurrency on their phones, buying dips and selling rallies with a government app that comes pre-loaded with $30 worth of Bitcoin.
El Salvador has started mining bitcoin with volcanos
Tim Copeland – The Block
El Salvadore has minuted some bitcoin using geothermal energy, according to its president;The set up is still being tested and installed but some bitcoin is already trickling in.
El Salvador has officially started using volcanos to mine bitcoin, according to its president Nayib Bukele. So far, it has mined 0.0059 BTC, worth $260. “We’re still testing and installing, but this is officially the first Bitcoin mining from the volcanode,” tweeted Bukele, providing a breakdown of the mining rewards so far.
Hackers stole cryptocurrencies from at least 6,000 Coinbase customers; Attackers exploited flaw in two-factor authentication system to access accounts
Siddharth Venkataramakrishnan – FT
Hackers stole cryptocurrencies from at least 6,000 customers of the Nasdaq-listed digital asset exchange Coinbase by exploiting a flaw in its two-factor authentication system. The news, first reported by Bleeping Computer, comes just a week after the company had to drop its plans to launch a new lending product following the threat of legal action from US securities regulators.
Financial Advisers Pitch Bitcoin to Investors to Offset Portfolio Losses; New managed crypto accounts take advantage of a tax-loss harvesting loophole
Michael Wursthorn – WSJ
Some financial advisers have a new sales pitch for investors: You win when bitcoin goes up, and you can win when it goes down. The wealth-management industry is starting to make the case that cryptocurrencies have a place alongside stocks and bonds in investment portfolios, even retirement accounts. A number of personal money managers are offering products that let investors buy their own stashes of bitcoin, ether and other digital currencies through their brokerage accounts.
Emerging market ‘cryptoization’ threatens financial stability – IMF
Tom Wilson – Reuters
The advent of digital currencies in emerging markets could spark “cryptoization” of local economies, potentially undermining exchange and capital controls and upsetting financial stability, the International Monetary Fund said on Friday.
Zero Hash Raises $35 Million in Series C Funding Led by Point72 Ventures; Zero Hash raises funds from Steven Cohen’s Point72 Ventures as well NYCA Partners, DriveWealth, and leading FinTech angel investors
Zero Hash, a leading digital assets infrastructure company that provides the turnkey solution for platforms to buy, sell, receive, send, earn and reward digital assets, today announced $35 million in new Series C funding. The investment round was led by Point72 Ventures alongside NYCA Partners, DriveWealth, and others. Several notable angel investors also participated in the round including Immad Akhund (Founder & CEO of Mercury), Kalpesh Kapadia (Founder & CEO of Deserve), Ethan Bloch (CEO and Founder of Digit), and Jason Gardner (Founder & CEO of Marqeta).
The future of India and Web 3.0
Kristin Boggiano – Crosstower
The crypto industry could add $184 billion dollars of economic value to India by 2030, says a report published by the National Association of Software and Services Companies (NASSCOM) in India. I think that number is low.
Fed vice chair traded into stocks on eve of Powell pandemic statement: Bloomberg
U.S. Federal Reserve Vice Chair Richard Clarida traded between $1 million and $5 million out of a bond fund into stock funds one day before Chair Jerome Powell issued a statement indicating potential policy action due to the worsening of the COVID-19 pandemic, Bloomberg News reported on Friday.
Boris Johnson Plans Fossil Fuel-Free U.K. Power Grid by 2035
Jess Shankleman – Bloomberg
Nation seeks more renewables and nuclear amid energy crisis; The plan will make Britain less dependent on imports: Johnson
The U.K. will produce electricity only from renewable and nuclear sources by 2035 under plans set out by Prime Minister Boris Johnson’s government.
Suzuki Takes Japan Finance Reins as Election, Stimulus Loom
Yuko Takeo – Bloomberg
Shunichi Suzuki replaces brother-in-law Aso in Kishida cabinet; Suzuki to be tasked with putting a stimulus package together
Former Olympics Minister Shunichi Suzuki on Monday became Japan’s first new finance minister in nearly nine years, replacing Taro Aso as the ruling party reboots its cabinet in the run-up to a general election.
Japan’s Kishida Appointed Premier, Set to Call Oct. 31 Election
Isabel Reynolds – Bloomberg
New prime minister to unveil his cabinet weeks ahead of poll; Kishida will seek to bolster flagging support for his party
Japan’s Fumio Kishida was appointed prime minister by parliament Monday, and is set to reveal a new cabinet lineup as he seeks to revive support for his ruling party ahead of a general election that could likely come this month.
Anger over delays to body meant to scrutinise UK post-Brexit trade deals; Independent trade and agriculture commission still not put on statutory footing despite fears on standards
Peter Foster – FT
The UK government is facing fresh accusations from MPs that it is failing to follow through fully on its promise to set up an independent commission to scrutinise post-Brexit trade deals. The complaints came as it transpired there will be a further delay to the trade and agriculture commission being put on a statutory footing, despite the government moving to sign trade deals with Australia and New Zealand.
It is time to lop off the dead hand of the Treasury; Politicians should consider radical alternatives to managing an unpleasant normality
Martin Wolf – FT
“Low-tax Conservatism has been dumped, but the Treasury’s fiscal conservatism is alive and well.” This, suggests the Resolution Foundation, is what is happening with UK fiscal policy. This is right. The Treasury is the most powerful government department. With Rishi Sunak as chancellor, it also has a politically effective spokesman. One cannot be surprised it is winning. But one must not be entirely pleased either.
Europe’s energy crisis threatens to reignite disputes within the bloc; Finance ministers look at how to alleviate price surge ahead of ‘gruelling winter’
Valentina Pop – FT
Nothing says October like autumn foliage, pumpkin spice latte and — to EU aficionados — decamping in Luxembourg for the ministerial councils this month. With the energy price crisis having contributed to worsening inflation data, we’ll explore how the issue is likely to dominate the eurogroup today — and several other ministers’ meetings taking place at the Kirchberg Conference Centre.
Russian Billionaire Oleg Tinkov to Pay $500 Million for U.S. Tax Fraud
Malathi Nayak – Bloomberg
Bank founder, 53, pleads guilty to filing false tax return; Sentencing set for Oct. 29 in Oakland, California, court
TCS Group’s billionaire founder Oleg Tinkov agreed to pay more than $500 million and pleaded guilty in a 2013 U.S. fraud case that accused him of concealing assets to evade paying taxes, the Justice Department said.
German regulator files criminal complaint against Northern Data staff; BaFin acts after Frankfurt-listed IT company misses 2020 guidance by large margin
Olaf Storbeck – FT
Germany’s financial regulator has filed a criminal complaint against senior staff at Northern Data, accusing it of potential market manipulation. BaFin’s move on Friday came a day after the Frankfurt-listed IT company, which operates racks of high-powered servers and provides services to Bitcoin miners, published financial results for 2020.
Swiss Police Raid Credit Suisse as Part of Greensill Investigation; Credit Suisse said it is cooperating with authorities in the case, which it says isn’t directed against the bank
Margot Patrick – WSJ
Swiss police raided Credit Suisse CS 0.41% Group AG offices last week, the bank said, as part of an investigation into collapsed finance firm Greensill Capital. Greensill’s failure in March hammered the Swiss bank. Credit Suisse ran $10 billion in investment funds that financed Greensill’s supply-chain finance lending programs. Credit Suisse has recovered around $7 billion of the $10 billion invested in Credit Suisse-Greensill funds so far.
Justice Department Firms Up Criminal Division Leadership Ranks; Kenneth Polite Jr., who was confirmed by the Senate to serve as assistant attorney general in July, has moved to fill several key leadership positions within the criminal division
Dylan Tokar – WSJ
The U.S. Justice Department on Friday took steps to solidify the leadership ranks of its criminal division and fraud section under an assistant attorney general selected by President Biden, promoting several career prosecutors to serve in key positions overseeing the agency’s investigation of complex white-collar crimes.
Monday question: Should a regulatory fine be enough in the regulator’s approach?
The Trade Blog
In recent years we have seen major regulatory and market changes in over-the-counter trade reporting. These changes are reflected in regulators’ approach, trade repositories’ offerings, and reporting solution providers. Regulators have either updated the existing regulations or approved new ones, while some trade repositories have closed their offerings leaving firms to migrate to other trade repositories, and solution providers have merged. All these changes have impacted the trade reporting ecosystem and – perhaps most significantly – the firms who are involved in the trade reporting process.
SEC Charges Webcast Host for Role in Market Manipulation Scheme
The Securities and Exchange Commission yesterday announced charges against Mark Melnick, the host of a stock trading webcast, for spreading more than 100 false rumors about public companies in order to generate illicit profits. The SEC previously charged Barton Ross for his role in this scheme.
Countdown Starts on Chinese Company Delistings After Long U.S.-China Audit Fight; The three-year countdown will accelerate a decoupling of the world’s two largest economies
Dawn Lim and Jing Yang -WSJ
U.S. securities regulators have started a countdown that will force many Chinese companies to leave American stock exchanges, after a long impasse between Washington and Beijing over access to the companies’ audit records.
Investing and Trading
It’s Not the 1970s Again, at Least in Markets; With companies and households swimming in cash, overheating is a bigger danger than stagflation.
John Authers – Bloomberg
Lead Us Not Into Stagflation
What are we afraid of? The implication of the last few weeks, with the rally in the dollar as investors looked for shelter, is that there is reason to worry about both stagnation and inflation — the dreaded “stagflation.” There are parts of the world that are trying to stage 1970s comeback tours; think of the U.K., where headlines about an “autumn” or “winter of discontent” have been resuscitated, borrowing the label from the notorious wave of strikes in early 1979. This doesn’t necessarily mean that people buying the dollar expect anything on the scale of the 1970s. But even if these fears are rational, is a combination of stagnation and inflation really likely?
Investors suffer 60/40 blues as investment mainstay takes a hit; Portfolios with a mix of stocks and bonds have suffered their worst losses since the pandemic
Michael Mackenzie and Eric Platt – FT
An important relationship between equities and government bonds broke down during September and inflicted the largest losses for diversified investment portfolios since the pandemic market rout of last year.
European gas market faces more strain after Western Sahara dispute flares; Algeria plans to shut down pipeline that passes through Morocco to Spain
John Dizard – FT
Sitting in a snug European home, one can sip organic tea in the evening and watch dystopian American politics play out on television.
Bull Markets Usually Don’t End With a Bang; The implication: Stock investors shouldn’t try to pick a specific time when it makes sense to get out of the market
Mark Hulbert – WSJ
Unlike bear-market bottoms, which tend to be short and violent, bull-market tops in the stock market tend to occur gradually over time, as first one sector or investment style hits its peak and turns down, and then another.
When Investors Mention ‘Decoupling,’ What Do They Mean? The Wall Street term had one definition for decades, while now it has another
Simon Constable – WSJ
Over the past year, investors have seen the term “decoupling” often. However, it is likely to confuse people because it had one definition for decades, while now it has another. The two meanings are related, but they aren’t the same.
Should Investors Create Their Own Target-Date Fund? Do-it-yourself investors, especially younger ones, can save money by re-creating their own target-date fund, a professor finds
Derek Horstmeyer – WSJ
Target-date retirement funds are often found in company 401(k)s, IRAs and other investment vehicles. But many investors in such funds wonder if they couldn’t get similar or better returns by putting together replica versions, without the fees.
Mortgage Payments Are Getting More and More Unaffordable; Record growth in home prices is erasing savings typically delivered by low interest rates
Orla McCaffrey – WSJ
House prices are rising at a record pace but incomes aren’t keeping up, which is making home ownership less and less affordable. The median American household would need 32.1% of its income to cover mortgage payments on a median-priced home, according to the Federal Reserve Bank of Atlanta. That is the most since November 2008, when the same outlays would eat up 34.2% of income.
Big Hasn’t Been the Best for Fund Investors; Winners’ Circle: The top mutual-fund managers for the past 12 months have had one thing in common—they thought small
Suzanne McGee – WSJ
There are few certainties in the post-pandemic world, whether talking about the virus itself or the kind of business models that will benefit from the transformations it has triggered.
How to revive Britain’s stockmarket; London’s once high-flying bourse has spent the past decade tumbling back to earth
Ask Britons what actually goes on in the City of London and you’ll be met with a blank stare. Trading the yen and the yuan, structuring derivatives and providing the world’s financial plumbing are all money-spinners, but they barely register in the public imagination. The exception is the stockmarket. Daily news bulletins report trading on the ftse 100 index of leading London shares. Booms and busts are charted by its gyrations. The London Stock Exchange (lse) is the stamping-ground of giant multinationals, where city-slickers and corporate fat-cats thrash out huge deals to buy and sell the world’s companies.
Pensions Warm to Stock Funds Modeled to Mirror Private-Equity Returns; A Danish pension manager recently invested $100 million in a fund that tracks a stock index designed to emulate private-equity returns
Luis Garcia – WSJ
Some pension managers are interested in investment strategies that seek to reproduce the performance of private-equity funds through a portfolio of public securities, as they look for less costly ways to match the returns associated with alternative assets.
Environmental, Social and Corporate Governance
Nuclear Giant EDF Urges Overhaul of EU Rules to Reach Net Zero
Francois De Beaupuy – Bloomberg
EO says current carbon-pricing system is too volatile; EU finance ministers to discuss remedies for high power costs
The chief executive officer of nuclear power giant Electricite de France SA said the European Union must overhaul its energy market to encourage long-term investments in order to achieve the goal of becoming carbon neutral in 2050.
Schroders sustainability investment director departs for Capital Group ESG role; New ESG investment director for Europe and Asia will be responsible for informing the market on Capital Group’s approach to ESG and its investment philosophy.
Annabel Smith – The Trade
The former investment director for global sustainability at buy-side giant Schroders has left the investment manager to join Capital Group as its ESG investment director for Europe and Asia.
JPMorgan’s Texas Muni Work Becomes Latest Culture War Fallout
Amanda Albright and Danielle Moran – Bloomberg
The largest U.S. bank says it’s being shut out of underwriting municipal-bond deals in Texas after the state enacted a law banning government work with banks that limit business with the firearms industry.
Wall Street needs to be clearer on succession stakes; Uncertainty at the top of two of the biggest banks in the world is not a good look
William Cohan – FT
The most important decision a chief executive can make is choosing a successor. So why, then, do so many top executives botch it? As part of the research for my forthcoming book about the rise and fall of GE, I spent many hours with Jack Welch, the company’s legendary chief executive, before he died in March 2020.
Ex-Elliott sovereign debt supremo gears up for final battle in India; After leading US hedge fund’s 15-year fight against Argentina, Jay Newman is now taking on New Delhi
Laurence Fletcher – FT
The man who extracted $2.4bn from Argentina is now coming after India. Jay Newman led US hedge fund Elliott Management’s 15-year battle to force the Argentine government to pay out on its defaulted debt. The campaign, which came good in 2016 when the country agreed to settle the claims of “holdout” creditors, is seen as one of the greatest hedge fund trades.
Deutsche Bank dropped risky clients after Epstein scandal; German lender’s top compliance executive says good controls can be ‘painful’ for business
Olaf Storbeck – FT
Deutsche Bank severed relationships with “a very small number” of wealthy clients with criminal records after the arrest of disgraced financier Jeffrey Epstein. When Germany’s largest bank accepted Epstein as a client in 2013, he was already a convicted sex offender. Deutsche agreed last year to pay $150m for compliance failures that included its dealings with the money manager, who died by suicide in prison in 2019.
Florida miner’s lawsuit accuses JPMorgan of manipulating silver prices
A Florida-based silver miner has filed a damages claim against JPMorgan, accusing the bank of manipulating the silver market to push prices so low the company’s mine had to close.
U.K.’s Fuel Crisis Has at Least a Week to Run as Army Steps In
Alaric Nightingale – Bloomberg
The U.K.’s fuel crisis will still take at least a week to rectify, the main retailers’ group said, as the army set to work on delivering gasoline and diesel to filling stations.
Share Trading Suspended as Debt Test Looms: Evergrande Update
David Watkins – Bloomberg
Evergrande, property unit shares halted in Hong Kong; Note said to be guaranteed by Evergrande matured Sunday
Shares in China Evergrande Group and its property management unit were suspended from trading Monday, as a fresh debt test loomed for the developer underscoring broader risks that have left credit markets on edge.
UK professional services firms hit by labour shortages; Accounting, consulting and law firms engaged in an intense fight for top talent
Daniel Thomas, Kate Beioley and Michael O’Dwyer – FT
Professional services firms in the UK have warned of growing “white-collar” labour shortages as businesses fight it out for top talent amid the economic recovery from the coronavirus crisis. Some City of London firms have even started to turn away work due to a lack of staff, according to business leaders.
Monte dei Paschi’s slow approach to altar reveals EU banking flaws; Politics still stymies the consolidation of European banking fiefdoms
Jonathan Guthrie – FT
The likelihood of an outcome declines as preconditions multiply. That applies forcefully to European banking mergers. UniCredit is a handy lens through which to examine the problem. The conclusions help explain why international investors justifiably prefer US banks.
The bull case for investing in China; Long-term investors know patience may be rewarded with strong gains
Jeffrey Kleintop – FT
For many investors, recent regulatory actions by China have been unnerving. It has sparked fears that the country has made a sudden and risky policy shift that is anti-business and anti-investor.
Buy British: UK pig farmers urge retailers to shun cheaper EU pork
Britain’s National Pig Association urged the country’s retailers to continue buying local pork and not cheaper EU products on Friday, warning that many producers would go bust if they were not properly supported.
Dismantle ‘ring-fencing’ rules to safeguard competitiveness, say Britain’s banks
Huw Jones – Reuters
Britain should consider dismantling the mandatory ring fencing of capital for retail banking introduced in the aftermath of the global financial crisis or risk harming post-Brexit competitiveness, a banking lobby group said on Friday.
Explainer: Global energy shortage or a coincidence of regional crises?
British gasoline stations running dry, surging power costs in the European Union ahead of winter, forced restrictions on energy use in China and rising oil, natural gas and coal prices.
Bill Gross Found in Contempt of Court, Gets Suspended Jail Time
Joe Schneider – Bloomberg
Gross, wife violated order not to harass neighbor with music; Gross says trial was ‘travesty of justice,’ calls judge biased
Bill and Amy Gross were found guilty of contempt of court for flouting a judge’s order not to annoy their California neighbor with loud music. The couple was sentenced to 5 days in jail, which was suspended because of Covid-19.
LinkedIn: how the professional networking site got personal; Newly blurred boundaries between work and home life create a trend for honest posts
Emma Jacobs – FT
Jonathan Frostick was not expecting his social media post to go viral while he was in hospital recovering from a heart attack — but it happened nonetheless. Five months ago, the British financial services manager wrote a LinkedIn post from the cardiac ward. When he felt the pain in his chest, his first thought was: “F*** I needed to meet with my manager tomorrow, this isn’t convenient.” Later, he resolved to change his working life, including no longer “spending all day on Zoom” but instead “more time with my family”.
Burned Out? Maybe You Should Care Less About Your Job
Boundaries gone, meetings multiplying, many say work has taken over their lives during the pandemic. Here’s how to gain perspective and take back control.
Rachel Feintzeig – WSJ
When Jonathan Frostick realized he was having a heart attack in April—sitting at his desk on a Sunday, prepping for the workweek—he thought about his wife and his will. He also thought: “I needed to meet with my manager tomorrow, this isn’t convenient,” prefacing the comment with an expletive. The 45-year-old financial-services worker survived, and changed his life. The non-negotiables on his calendar now are thrice-weekly swims and dropping his youngest son off at nursery school. In his (fewer) hours on the job, he says he’s calm, decisive, above the fray. When he has too much on his plate, he leaves the work for another day. He insists on 30-minute meetings that stay on point.
Damian Lewis Discusses the Future of ‘Billions’; In an interview, the actor talked about his character’s big twist and what it means for the Showtime series and his career.
Jeremy Egner – NY Times
One of TV’s last great antiheroes departed Sunday night on Showtime’s “Billions.” Bobby Axelrod, the proudly venal hedge-fund titan played by Damian Lewis, flew off into the sunset in the Season 5 finale, slipping the grasp of the law and his chief nemesis, Chuck Rhoades (Paul Giamatti), one last time on his way to a less punitive future in Switzerland.