Hits & Takes
John Lothian & JLN Staff
When it rains it pours. Today we have some JLN original content and a contribution from an FIA Innovator’s Pavillion participant talking about their business. We also have an Open Outcry Traders History Project video.
We have an interview I did with CFTC Commissioner Christy Goldsmith Romero about her statement criticizing the “neither admit nor deny” practice when financial regulation violators are paying big fines. In September she introduced something called the HEAT test for violators.
We also have a piece written by Murali Kanakasabai of the Exponential Exchange titled “A New Solution For Hedging Used Vehicle Price Exposure Amid Increasing Volatility.”
Lastly, we have an entry into the Open Outcry Traders History Project with an interview with John Vaile. John is a longtime friend and was actually a brokerage customer of mine at one time. I met John when I was a driver for Tom Cashman and John would occasionally drive with us from Williams Bay, Wisconsin into Chicago and back. Later, when I was at the Price Futures Group, John became a customer. He has a great story of giving up a good paying job at Morgan Stanley to start a financial futures brokerage operation at Geldermann on an eat-what-you-kill basis. He has also gone on to do some important work with a Chicago charity.
Hong Kong Exchanges and Clearing Limited (HKEX) published a video on LinkedIn celebrating the fact that “HKEX’s HSI and HSCEI Options on Futures (#OOFs) hit a major #milestone on 7 November with open interest surpassing *1 million* contracts for the first time, translating to a notional value of US$44 billion.”
Debby Planer has joined FIA Tech in the newly created role of vice president, head of connectivity.
Jennifer Hughes has been promoted to U.S. markets editor at the Financial Times.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
A New Solution for Hedging Used Vehicle Price Exposure Amid Increasing Volatility
by Murali Kanakasabai
If you’re an entity that owns a large automotive fleet – a car rental agency or the finance arm of an automaker with a sizable lease portfolio – today’s skyrocketing used car prices have likely pushed your portfolio’s value into the stratosphere.
But what seems like unadulterated good news actually represents a potentially precarious moment for your fleet – and your company. That’s because fleet owners who purchase vehicles for daily rental or to lease them out are essentially making a bet on the future wholesale price of that vehicle at the end of its use.
John Vaile Saw the Potential of Financial Futures and Helped Make Them A Success
John Vaile had an aunt who invested in the stock market who bought Vaile some stock when he was 10 years old and that experience caused him to want to be a stockbroker. As a result, Vaile became a student of the market.
CFTC Commissioner Seeks Public Accountability for Wall Street by Applying HEAT
CFTC Commissioner Christy Goldsmith Romero issued a statement in September on a “Proposal for Heightened Enforcement Accountability and Transparency in Settlements.” She proposed a HEAT test to require more defendants to admit wrongdoing in settlements.
John Lothian News wanted to know more about Goldsmith Romero’s thoughts on the matter and the origins of the HEAT test, so we interviewed her over Zoom from her CFTC offices.
Here’s How Wall Street’s Valuing the Record $1.9 Billion Powerball Jackpot; Applying expected value to lottery tickets.
Tracy Alloway – Bloomberg
Monday’s Powerball jackpot is a stunning $1.9 billion. That’s a record payout, and one that could yield as much as $929.1 million for a single winner taking the lump sum option. Those opting for annual payments would get something like $63.3 million every year for three decades. And while the chances of winning are truly minuscule, the temptation to crunch probabilities and potential returns is too great for Wall Street to resist. To value this type of investment, analysts reach for a concept known as expected value, which attempts to gauge the future value of an investment – in this case a single $2 Powerball ticket.
****** At this point, I am not sure I could outlive the annual payments, so I would go for the present value. That way I could see all the good I could do with the money while I am still around.~JJL
The Five Habits of Highly Successful Companies; As public scrutiny and criticism intensifies, a new history of businesses sheds valuable light on the do’s and don’ts of responsible behavior.
Adrian Wooldridge – Bloomberg
Every few decades, society has an allergic reaction to corporations. This happened in the 1890s, when companies were demonized as blood-sucking octopuses. It happened in the 1930s, when they were denounced as threats to the common good. It is happening again today.
***** I get the idea Elon Musk should have read this before he bought Twitter.~JJL
Evelyn De Rothschild, London Head of Banking Dynasty, Dies at 91; Helped unite his family’s British and French finance arms; Friend of Margaret Thatcher, financial adviser to the queen
Laurence Arnold – Bloomberg
Evelyn de Rothschild, who helped unite the British and French arms of his family’s famous banking group and counted Queen Elizabeth II among those who sought his financial advice, has died. He was 91. He died “peacefully at home,” the UK’s Press Association reported, citing a statement from his family.
***** A long life for the head of a longstanding banking family.~JJL
Monday’s Top Three
Our top story Monday was the Financial Times’ US Supreme Court considers restraining regulators’ power, about two cases involving the Federal Trade Commission and the SEC. Second was Bloomberg’s Billions in Capital Calls Threaten to Wreak Havoc on Global Stocks, Bonds. Third was Twitter Now Asks Some Fired Workers to Please Come Back, from Bloomberg.
27,071 pages; 241,634 edits
Bitcoin and FTT Prices Drop After FTX-Binance Tussle
Caitlin Ostroff – The Wall Street Journal
A spat between two of the richest people in digital currencies spilled over into crypto markets Tuesday, sending bitcoin lower and hammering the value of another closely watched token. The dispute pits Sam Bankman-Fried, founder of trading firm Alameda Research and crypto exchange FTX against rival crypto tycoon Changpeng Zhao, founder of Binance, the world’s largest exchange. Mr. Zhao this week signaled skepticism about the stability of a digital coin called FTT, which is a key asset produced by Mr. Bankman-Fried’s FTX. Mr. Zhao said last weekend it was poised to sell a chunk of the token in the coming months for “risk management” purposes.
Tensions Between Crypto Giants FTX, Binance Spill Into Public View; Spat between Sam Bankman-Fried of FTX and Changpeng Zhao of Binance erupts on Twitter
Alexander Osipovich, Caitlin Ostroff and Vicky Ge Huang – The Wall Street Journal
Tensions between two of the richest men in cryptocurrencies erupted into open warfare on Twitter over the weekend, transfixing much of the digital-currency world. On one side is Sam Bankman-Fried, the founder of crypto trading firm Alameda Research and FTX, a crypto exchange that has been growing in size and recognition the past two years. On the other side is Changpeng Zhao, the founder of Binance, the largest crypto exchange by volume.
Face-Off Between Crypto Billionaires Is the Market’s Biggest Near-Term Risk
Joe Light – Barron’s
The crypto market this year has already climbed out of one panic-inducing spiral. Now it’s inching toward a redux. The latest concerns boil down to a spat between the leaders of FTX and Binance- the two largest crypto exchanges by volume-and fears that negative headlines about one of FTX’s sister companies could lead to a wave of withdrawals and instability both at FTX and in the crypto market as a whole. The dispute had its genesis last week. On Wednesday, news site CoinDesk published a report, citing an internal financial document, that a large portion of the balance sheet of crypto market maker Alameda Research consisted of a digital token called FTT, which is issued by FTX and gives users discounts on trading fees.
FTX’s founder dismisses balance sheet concerns as ‘false rumors’
Hannah Lang and Elizabeth Howcroft – Reuters
Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, sought to reassure crypto investors on Monday after a rival exchange, Binance, said it would liquidate its holdings of FTX’s native token. Binance’s CEO, Changpeng Zhao, said in a series of tweets on Sunday that his firm would sell its holdings of the FTX token “due to recent revelations that have come to light.” Zhao did not specify which revelations he was referring to or how much of the token Binance held.
U.S. lays claim to $1 billion in stolen Silk Road Bitcoin
Luc Cohen – Reuters
The United States is seeking the forfeiture of more than $1 billion in Bitcoin stolen from the Silk Road online marketplace, federal prosecutors in Manhattan said on Monday. In the second largest seizure in U.S. Department of Justice history, Internal Revenue Service (IRS) agents obtained the 50,000 Bitcoin during a November 2021 search of the defendant James Zhong’s home in Gainesville, Georgia.
Credit Suisse Spinoff Asks If World Needs a New Investment Bank; First Boston invented modern M&A and minted leaders like Larry Fink and Joe Perella. But what will it be once it’s separated from Credit Suisse?
Sonali Basak and Steven Arons – Bloomberg
Credit Suisse Group AG is turning back the clock. In a bid to save itself from a series of scandals and financial troubles, the Zurich-based bank is dismantling the financial behemoth it assembled at great cost over five decades and returning to its origins as banker to the world’s ultra-wealthy. But the decision to spin off First Boston, the American investment bank it acquired in 1990, is giving off an even stronger what’s-old-is-new vibe.
Binance CEO Declines Alameda’s Bid to Buy His Company’s FTX Tokens
Andrew Throuvalas – Decrypt
Binance CEO Changpeng Zhao (CZ) isn’t interested in selling his company’s FTX Tokens in an OTC deal with Alameda. “I think we will stay in the free market,” he said on Twitter on Monday while responding to a question about Alameda’s potential involvement. Alameda CEO Caroline Elison publicly offered to purchase all of the FTT Binance intends to offload for $22 a piece on Sunday, to limit the liquidation’s impact on the market.
FTX Token Plummets as Market Fears Possible Alameda Contagion
Sam Reynolds – CoinDesk
Fears over another meltdown similar to the crypto fund Three Arrows Capital’s troubles earlier this year – but this time tied to billionaire Sam Bankman-Fried’s FTX exchange and his trading firm, Alameda Research – gripped digital-asset markets Tuesday morning Asia time, driving prices for token FTT down nearly 20%. Data from CoinGlass shows that there continues to be building short bets on FTT as open interest in the crypto-derivatives market has surged 8% during the last hour to a total of $215 million.
Solana Falls and Speculation Centers on Links to Sam Bankman-Fried’s FTX, Alameda
Jocelyn Yang – CoinDesk
Solana’s SOL token was one of the biggest losers in digital-asset markets on Monday, and crypto analysts speculated there might be a connection to the recent drama surrounding Sam Bankman-Fried’s FTX exchange and his trading firm, Alameda Research. One theory is that Alameda might try to dump its SOL tokens in a bid to raise fresh liquidity.
Sam Bankman-Fried’s FTX token falls more than 20% amid Binance feud
Dylan Butts – Forkast
Crypto exchange FTX’s native token, FTT, fell more than 20% in afternoon trading in Asia amid reports rival exchange Binance is selling off its holdings of the token. FTT fell more than 23% percent over 24 hours to trade at around US$17, according to data from CoinMarketCap, with most of the plunge happening in Asia afternoon trading.
Hong Kong takes on Singapore for Asia’s crypto crown; City seeks to attract retail investors by shifting towards clear rules
Hudson Lockett, Chan Ho-him and William Langley and Mercedes Ruehl – Financial Times
Hong Kong has kicked off a contest to become Asia’s crypto capital as investors and executives warn that rival Singapore may be squandering its head start with its pivot to stricter regulation. The sudden shift in Hong Kong last week towards clear rules for retail investors to trade digital assets follows years of ambiguity from regulators. That made some companies reluctant to build up a greater presence in the city, and capitalise on demand from mainland China, where crypto trading is outlawed.
Feds Seize Over $1 Billion in Crypto Originally Stolen from Dark Web Drug Marketplace Silk Road
Kyle Barr – Gizmodo
The largest amount of illicit funds ever recovered by federal law enforcement came in the form of bitcoin on a disconnected drive stuffed at the bottom of one Georgia man’s linen closet. Federal prosecutors announced Monday they had recovered $1.074 billion in bitcoin kept hidden by a Georgia man for just under a decade. The man in question, James Zhong from Gainesville, Georgia, allegedly pulled off a massive heist from the dark web drug marketplace Silk Road back in 2012 but kept the over 50,000 bitcoin in the most awkward place imaginable, on a small computer in a “popcorn tin” under some blankets in his bathroom closet safe. At the time the feds seized the crypto in 2021, it was worth close to $3.36 billion.
Justice Department Announces Seizure of Bitcoin Once Valued at $3.36 Billion; A Georgia man pleaded guilty last week to stealing the cryptocurrency from Silk Road in 2012
Corinne Ramey – The Wall Street Journal
The Justice Department said Monday it had seized cryptocurrency once valued at $3.36 billion from a Georgia man who pleaded guilty to stealing bitcoin from the Silk Road online marketplace. The cryptocurrency seizure, which took place in November 2021 and hadn’t been publicly announced, is the second largest in Justice Department history. The government is seeking the forfeiture of the seized bitcoin, which has declined significantly in value since the seizure and is now worth about $1 billion. The department earlier this year said it had seized $3.6 billion of digital currency stolen during the 2016 hack of the Bitfinex cryptocurrency exchange.
Investors Withdraw Millions From FTX as Binance Begins Liquidating FTT Token
Andrew Asmakov – Decrypt
Crypto exchange FTX is under the industry’s microscope again. Hot on the heels of Binance CEO Changpeng “CZ” Zhao declaring that Binance is liquidating its stash of FTX’s native exchange token FTT, mass withdrawals from FTX have accelerated, with weekly stablecoin outflows from FTX reaching a whopping $451 million, according to Nansen data.
China Banks Are Now Valued Like US Peers at Depths of 2008 Crash
Pessimism about China’s banking sector has reached an unprecedented level, even approaching the depths where US lenders traded during the 2008 financial crisis. The four biggest lenders, including Industrial & Commercial Bank of China Ltd., are priced at near record low valuations of about 0.4 of their book value in Hong Kong after a sector index weakened to an 11-year low. That depressed level roughly matches where investors priced JPMorgan Chase & Co. and Bank of America Corp. among others during the depths of the 2008 crash.
TikTok Should Be Banned in US, FCC Member Carr Says
Todd Shields – Bloomberg
Brendan Carr, a Republican member of Federal Communications Commission, said Chinese social media giant TikTok should be banned in the US. Carr, speaking on Bloomberg TV on Monday, cited the possibility of data flows to China that could compromise national security. The FCC lacks jurisdiction over the matter and Carr, whose party lacks control of the commission, couldn’t do much to prevent the company from operating in the US.
Feds Score $3 Billion Crypto Seizure From Silk Road Scammer; Property developer charged for stealing Bitcoin from Silk Road; James Zhong arrested, pleaded guilty to wire fraud on Nov. 4
Ava Benny-Morrison – Bloomberg
Manhattan prosecutors say they seized almost $3.4 billion in Bitcoin from a property developer who scammed the dark web marketplace Silk Road over a decade ago. In what’s now the second-largest crypto seizure for the Department of Justice, investigators discovered more than 50,000 Bitcoin in the home of Georgia resident James Zhong in a raid carried out in November 2021. Zhong, a 32-year-old computer science graduate, was arrested and pleaded guilty to wire fraud last week.
Willem Kooyker, Dominant Force in Global Commodities, Dies at 80; Ran what was once the world’s largest commodities fund; Avid Dutch football fan who gave generously to arts, education
Joe Deaux and Mark Burton – Bloomberg
Willem “Wim” Kooyker, the secretive commodity trader who dominated markets like zinc in the 1980s, capitalized on China’s unprecedented supercycle through the 2000s and ran what was once the world’s largest commodities fund, has died. He was 80. He died on Nov. 3 in New York City after a sudden illness, according to a death notice in the New York Times.
Global Money Laundering Watchdog Says Crypto Monitoring Regime Is Unchanged
Sandali Handagama – CoinDesk
The Financial Action Task Force said it has not changed the way it monitors digital assets after Al Jazeera reported that the intergovernmental organization for tacking money laundering and financing of terrorism is getting ready to “conduct annual checks to ensure countries are enforcing anti-money laundering and terrorist financing rules on crypto providers.”
US and EU argue over claims of gas crisis profiteering; European energy groups are real winners from yawning transatlantic price gap, says Washington
Tom Wilson and Justin Jacobs – Financial Times
European energy groups have been the real winners in the transatlantic trade in liquefied natural gas, the US government has said, pushing back against criticism that North American producers were profiteering as Europe scrambles to replace Russian gas. A chasm between US and European gas prices has delivered bumper profits for companies buying American gas and selling it into Europe this year.
The Black Sea grain initiative must address the suffering of seafarers; Action is needed to evacuate the hundreds stuck on their ships since the start of the conflict
Guy Platten – Financial Times
The world breathed a sigh of relief when Russia reversed its recent decision to suspend its involvement in the Black Sea grain initiative. But it was a reminder of just how delicate the situation still is, and how quickly people’s lives can be impacted by a change in policy. As we approach 120 days of the grain corridor being in place, there are still questions which need to be answered about its future. One of the most urgent is how it can support the rescue of hundreds of people who have become de facto prisoners of war in Ukrainian ports.
‘We were completely exposed’: Russian conscripts say hundreds killed in attack
Pjotr Sauer – The Guardian
Hours after Aleksei Agafonov arrived in the Luhansk region on 1 November as part of a battalion of new conscripts, his unit were handed shovels and ordered to dig trenches throughout the night. Their digging, which they took turns to do because of the lack of available shovels, was abruptly interrupted in the early hours of the next day as Ukrainian artillery lit up the sky and shells started raining down on Agafonov and his unit. “A Ukrainian drone first flew over us, and after that their artillery started to pound us for hours and hours, nonstop,” Agafonov, who survived the shelling, told the Guardian in a phone interview on Monday.
Ukraine seizes control of five ‘strategic’ companies from oligarchs; Assets taken over by state as part of ‘wartime effort’ include oil producer Ukrnafta
Roman Olearchyk – Financial Times
Ukraine’s president Volodymyr Zelenskyy on Monday said Kyiv had transferred five strategic enterprises to state control from previous oligarch ownership as part of the country’s wartime effort. The Ukrainian government seized ownership of top national oil producer Ukrnafta and Ukrntatnafta, the country’s largest refinery that halted operations after being hit by Russian missile strikes in the first months of Moscow’s full-scale invasion Ukraine. Both companies were controlled by Igor Kolomoisky, an oligarch who backed Zelenskyy’s presidential bid in 2019 and who is now facing probes into the insolvency of PrivatBank, another of his previous businesses.
Ukraine receives air defence systems as Russia continues air strikes; Nasams and Aspide units arrive from US and Spain as missile and drone attacks target electricity infrastructure
Roman Olearchyk, Felicia Schwartz and John Paul Rathbone – Financial Times
Ukraine has received its first Nasams air defence systems from the US and Aspide units from Spain, as Russia continues its missile and drone strikes on electricity infrastructure that have triggered blackouts nationwide. “Nasams and Aspide air defence systems arrived in Ukraine!” Oleksiy Reznikov, Ukraine’s defence minister, said in a tweet on Monday. “These weapons will significantly strengthen Ukraine’s army and will make our skies safer.” He added: “We will continue to shoot down the enemy targets attacking us. Thank you to our partners: Norway, Spain and the US.”
Russia’s war on Ukraine latest news: Russians ‘prepare for street fighting’
Ukraine accused Russia of looting empty homes in the southern city of Kherson and occupying them with troops in civilian clothes to prepare for street fighting in what both sides predict will be one of the war’s most important battles. White House national security adviser Jake Sullivan has been engaged in confidential talks with senior Russian officials aimed at lowering the risk of a broader war over Ukraine, a source familiar with the conversations said.
Russia’s Trade With Europe Is Drying Up, Shifting to China
Freight volumes through some of Russia’s largest ports have cratered as a result of the European Union’s economic sanctions against Moscow. This year, the port of St. Petersburg – Russia’s primary gateway for trade with Europe – experienced an 85% drop in container throughput versus the previous year, according to Vincent Stamer, a researcher at the Kiel Institute for the World Economy.
Ukraine Latest: Zelenskiy Likely to Join G-20 Online
Ukrainian President Volodymyr Zelenskiy will take part in next week’s Group of 20 nations summit in Bali “in some kind of format,” most likely online, the Suspilne TV website reported, citing his spokesman Serhiy Nykyforov. Zelenskiy said he may expand an intervention into the economy after authorities used special wartime powers to seize control of five companies, all of which have ties to some of the country’s most powerful oligarchs. Ukraine’s power grid operator limited power supplies to consumers in seven regions and the capital Kyiv, said Volodymyr Kudrytskyi, CEO of grid operator NPC Ukrenergo.
Russia Sends Oil Thousands of Miles Through Arctic Circle Again; Sanctions make route more appealing to Moscow: Kpler analyst; Climate, shipping capacity, crude volume limit route’s utility
Elina Anya Ganatra and Julian Lee – Bloomberg
Russia sent its second-ever crude oil shipment east through the Arctic Circle toward China, a route that could one day give the country a faster way to buyers in Asia.
‘One long day in hell’: Ukrainian PoWs recall desperate fight for Mariupol; Exchanged prisoners recount key battle and detail how Russia treats captives
Christopher Miller – Financial Times
Captain Valentina Strutynska feared the worst when she was taken from her cell after five months in Russian captivity. It was only when her handcuffs and blindfold were removed much later and the shouts of “Glory to Ukraine!” rang out that she realised she was home.
Exchanges, OTC and Clearing
UBS native digital bond launched on SIX Digital Exchange and SIX Swiss Exchange; Three-year bond will leverage new operational link between CSDs of the two exchanges.
Richard Schwartz – The Trade
UBS today issued a CHF375 million three-year native digital bond with 2.33% coupon and a maturity in 2025. The bond was issued on the DLT-based CSD of SIX Digital Exchange and can also be held conventionally at SIX SIS.
EGX Holding, Agricultural Bank Of Egypt And Libra Capital Group Sign Agreement Establishing A Carbon Certificates Trading Company
The Egyptian Exchange Holding Company for Capital Markets Development signed an agreement with the Agricultural Bank of Egypt and Libra Capital Company to establish a company specialized in issuance of carbon certificates, and environmental products.
Hearing Before The Disciplinary Committee Of Bourse De Montréal Inc. Citigroup Global Markets Inc.
The Disciplinary Committee of Bourse de Montréal Inc. (the “Bourse”) will hold a hearing on December 14, 2022 at 9:30 a.m. by videoconference, in order to decide on the acceptance of a settlement agreement negotiated between the staff of the Regulatory Division of the Bourse and Citigroup Global Markets Inc. (“CGMI”), in connection with a disciplinary complaint filed against CGMI.
GSE to incorporate ESG reporting in listing rules
Elizabeth Nyaadu – Graphic Online
The Ghana Stock Exchange (GSE) will from 2023 incorporate Environmental, Social, and Governance (ESG) guidelines into its listing rules and requirements, outgoing Managing Dircector, Ekow Afedzie has said. He said the exchange was in the process of reviewing its listing requirements and one of the things being considered was the incorporation of ESG guidelines into the rules.
REGIS-TR and Nfq announce partnership
REGIS-TR adds Nfq to their partnership programme as it continues to expand with many of the leading brands in the European regulatory reporting space. The partnership will leverage Nfq’s versatile offering to support clients’ in reporting and monitoring all captured activity and keeping market participants informed of regulatory changes.
DTCC Appoints Nashira Spencer Chief Security Officer; Veteran Security Leader and Technologist Will Have Responsibility for Managing DTCC’s Global Security Operations
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the appointment of Nashira Spencer as Chief Security Officer (CSO), effective November 7, 2022. In this role, Spencer will be responsible for managing DTCC’s enterprise-wide global information security, physical security, employee safety, and crisis/incident management functions, ensuring a comprehensive and holistic approach to risk management and resilience across the organization. Spencer will report to Tim Cuddihy, DTCC’s Group Chief Risk Officer.
JPX Monthly Headlines – October 2022
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users.
Every month, we showcase the highlights of these efforts in short and concise summaries just for you.
TMX Group Announces Acquisition of Wall Street Horizon; TMX Datalinx extends global reach with leading corporate event data offering
TMX Group Limited announced today it has agreed to acquire Boston-based Wall Street Horizon, Inc. (WSH), a leading provider of global corporate event data.
Elon Musk Considers Putting All of Twitter Behind Paywall in Latest Genius Idea
Matt Novak – Gizmodo
Elon Musk is considering a change to Twitter that would put all of the site’s content behind a paywall, according to a new report from tech journalist Casey Newton at Platformer. The news comes in the wake of some bizarre decisions by Musk after he took control of the social media company late last month-a marriage Musk tried to back out of, but was forced to consummate to the tune of $44 billion.
Twitter’s Big Debt Bills Add Urgency to Musk’s Turnaround Plans; Cutting spending could make it harder to raise the revenue needed to cover $1.2 billion in annual interest payments.
Kurt Wagner – Bloomberg
Elon Musk has wasted no time in transforming Twitter Inc. since buying the company for $44 billion on Oct. 27. He’s fired most of the senior executive team, including the chief executive officer and the chief financial officer; fired about half the staff over email; has told people at the company he’ll repeal its work-from-anywhere policy, forcing employees back to the office after years of remote work; and proposed changes to try to pull in significantly more revenue from the company’s fledgling subscription service.
Elon Musk Says Twitter Will Permanently Ban Users Who Impersonate Others; The platform’s new owner announced the policy after Kathy Griffin and other celebrities sent tweets under his name
Alyssa Lukpat – The Wall Street Journal
Elon Musk is cracking down on people who impersonate others on Twitter, tightening policies and banning celebrities including Kathy Griffin who had posed as him. The move is one of the first by Mr. Musk, a self-described free-speech absolutist, to tighten Twitter Inc.’s free-speech policies. He said Sunday that impersonating accounts will be permanently suspended unless they are specified as parody. “No exceptions,” Mr. Musk wrote in a tweet.
Inside Europe’s new fortress: Euronext’s continental data centre and trading floor; Annabel Smith takes a peek inside Euronext’s newly migrated data centre in Bergamo and dives into what the move means for market structure post-Brexit.
Annabel Smith – The Trade
Settled amongst terracotta tiled rooves on the backdrop of rolling mountains, Euronext’s new data centre stands out as a starkly modern geometrically shaped warehouse surrounded by a guarded perimeter. It emanates importance.
Baton Systems names former BNY Mellon and BlackRock alumnus as director of EMEA Sales; New director brings considerable experience to Baton Systems, having previously served at FIS Global, BNY Mellon and BlackRock.
Wesley Bray – The Trade
Baton Systems has appointed Alistair Griffiths as its new director of EMEA sales. Griffiths joins from FIS Global, where he served as senior sales executive of post-trade solutions, responsible for sales in the UK, Channel Islands and the Netherlands.
Archax Closes $28.5m Series A Raise; Completes round in preparation for launch and to scale
Archax, the FCA regulated digital asset exchange, brokerage and custodian based in London, has today announced closing its Series A raise of $28.5m. The round included abrdn, as lead strategic investor, alongside others, including Bitrock Capital, Blockchain Coinvestors, CE Innovation Capital, Keiretsu Capital, Lingfeng Capital, Mathrix AG, SGH Capital and The Tezos Foundation.
Ethereum Co-Founder Di Iorio Unveils New Project to Bring Blockchain Computers to a Wider Audience
Frederick Munawa – CoinDesk
Anthony Di Iorio, the co-founder of Ethereum, Decentral and Jaxx Liberty, unveiled a project he says he’s envisioned, designed and built over the span of a decade. The project, dubbed Andiami, blends game theory with cutting-edge hardware to bring blockchain computers to a wider audience.
Coming Clean: Why Cybersecurity Transparency Is A Strength, Not A Weakness
Howard Taylor – Forbes
Earlier this year, the Securities and Exchange Commission (SEC) published new proposals, which, if implemented, will transform the way U.S. businesses talk to their investors about cybersecurity incidents. But don’t be put off by the official-sounding title of the proposals-Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure-because what the SEC has come up with is as sweeping as it’s overdue.
C-Suite People of Enterprises are Emphasising Cybersecurity and Here is Proof
Market Trends – Analytics Insight
The C-suite now frequently discusses cybersecurity in boardroom discussions. IT and business leaders have historically had difficulty cooperating on cyber risk management, but this disagreement seems to be worse than ever right now. According to a study, over 90% of IT decision-makers think their organisation would be willing to forego cybersecurity in favour of other objectives.
NY Is First to Require CLE on Cybersecurity, Privacy
Golriz Chrostowski – Bloomberg
New York-barred attorneys were notified last week that they’ll be required to complete one CLE credit hour of cybersecurity, privacy, and data protection training as part of their biennial learning requirement beginning July 1, 2023. As the first jurisdiction to implement this specific requirement, New York is sending a strong reminder that lawyers have a duty of technical competence. As technology advances, so does the risk of data breaches. And attorneys-who have professional, ethical, and often contractual obligations to safeguard client information-must be aware of these risks.
Binance’s CZ and FTX’s Sam Bankman-Fried Trade Barbs Over Twitter; FTX hit by withdrawals after Zhao says to sell FTT holdings; Zhao and Bankman-Fried have been trading barbs over Twitter
Philip Lagerkranser, Emily Nicolle, and Sidhartha Shukla – Bloomberg
Simmering tensions between the crypto industry’s two richest executives are spilling over into the already battered digital-asset market. On Sunday, Zhao “CZ” Changpeng, the billionaire chief executive of Binance Holdings Ltd. took to Twitter to announce plans to sell Binance’s roughly $530 million holding of FTT, the native token of Sam Bankman-Fried’s FTX. Binance and FTX run the world’s largest and seventh-largest crypto exchanges.
Kim Kardashian Poised to Beat Investor Suit Over Crypto Hype
Peter Blumberg – Bloomberg
Kim Kardashian and Floyd Mayweather Jr. won a tentative court ruling dismissing a lawsuit accusing the celebrities of scamming investors in a cryptocurrency called EthereumMax. Investors claimed in a January complaint they paid “inflated prices” for blockchain-based digital assets because the reality television star and ex-boxing champion hyped the EMAX tokens. Former Boston Celtic Paul Pierce was also named as a defendant in the proposed class-action suit.
Get Ready for the ‘Scourge’: Inside Vitalik Buterin’s Updated Ethereum Plans
Kate Irwin – Decrypt
The scourge is coming. Ethereum Co-Founder Vitalik Buterin published a technical infographic Friday sharing the updated roadmap for planned upgrades to the network. It includes an addition to the verge-a new milestone for the merge-and the creation of a new stage called the scourge, to name a few.
Money Crypto Versus Tech Crypto
Bill Hughes – CoinDesk
Our internal and external debates regarding regulation would improve if we thought of crypto as two ecosystems rather than one. There is a basic dichotomy that has a big effect on the policy debate, explains where we are with regulation today and will define how we move forward. But we never talk about it. That should change.
Line launches NFT marketplace on its platform DOSI
Kate Park – TechCrunch
Japanese messaging app Line’s non-fungible token (NFT) unit LineNext said Tuesday that it has launched a consumer-to-consumer (C2C) marketplace on the NFT platform DOSI. The C2C trading service allows users to buy and sell NFTs globally.The announcement comes nearly a year after Line said it plans to launch an NFT service in 2022 to provide a marketplace for companies and individuals to trade NFTs.
Crypto Exchange Coinbase Germany Ordered by Regulator to Tackle “Organizational Deficiencies”
Sandali Handagama – CoinDesk
Germany’s financial watchdog ordered cryptocurrency exchange Coinbase’s local unit to ensure it has effective risk management and internal controls in place after uncovering “organizational deficiencies” during an audit of the firm’s financial statements, according to a statement published Tuesday.
Bitcoin Miner Iris Energy Faces Default Claim on $103M of Equipment Loans
Eliza Gkritsi – CoinDesk
Bitcoin mining firm Iris Energy (IREN) is facing claims from its lender alleging that it has defaulted on $103 million of equipment loans held by two special-purpose vehicles (SPV), the company said on Monday. The reason for the notice of default, which the lender sent to the miner on Nov. 4, is the company failed to engage in “good faith restructuring discussions” for the debt in question, according to a Monday filing with the U.S. Securities and Exchange Commission. Because Iris failed to engage in such discussions, the lender is claiming it defaulted on payments originally scheduled for Oct. 25, the Monday filing said. As such, the filing continued, the lender looks to trigger an acceleration clause, meaning it is demanding immediate payment of the entire principal and accrued interest. Iris said it “disagrees” with the allegations made by the lender in the Nov. 4 notice.
Crypto Exchange FTX’s Token Tumbles Below $22 Barrier Amid Spat
Joanna Ossinger – Bloomberg
Cryptocurrency exchange FTX’s token has fallen below a level suggested by an affiliate as an offer price, after an increase in withdrawals that was triggered when competitor Binance Holdings Ltd. announced plans to sell all its token. On Sunday, Changpeng Zhao, CEO of top crypto exchange Binance, announced plans to sell the bourse’s roughly $530 million holding of FTT, the native token of Sam Bankman-Fried’s FTX. Caroline Ellison, the CEO of Bankman-Fried’s trading house Alameda Research, later offered to buy all of Binance’s FTT tokens at $22.
OpenSea Launches First Royalty Enforcement Tool Amid NFT Marketplace Drama
Eli Tan – CoinDesk
Non-fungible token (NFT) marketplace OpenSea joined the ongoing NFT royalty debate this weekend with a blog post announcing its first royalty enforcement tool. The goal of the tool is to make creator fees, also known as royalties, enforceable on-chain, and will apply to new collections listed on the platform starting Nov. 8.
Buy an NFT, Get Maine Lobster Shipped to Your Door
Andrew Hayward – Decrypt
NFTs aren’t all about cartoon Apes, artwork, and sports collectibles. Tokenized assets can have real-world benefits too, with use cases including membership passes, event ticketing, and more. And this holiday season, we’ll see one of those models in action-with a seafood twist. OneOf-an NFT startup known for music, sports, and brand-centric collectibles-announced today that it has partnered with online seafood delivery service Get Maine Lobster to create an NFT-based membership club. And yes, joining the club entitles paying members to receive deliveries of fresh seafood direct from Maine, including lobster.
Why NFT Artists Shouldn’t Expect ‘Royalties’
Daniel Kuhn – CoinDesk
After months of silence, the largest non-fungible token exchange, OpenSea, announced it is taking the middle road on “royalties” paid to NFT creators. The move will likely reshape an ongoing debate as to whether these digital assets should automatically pay out “creator fees” when resold (which benefits artists) or nix that standard entirely (which is better for traders).
Tim Tebow: College Sports NFT Platform CAMPUS is ‘All About Honoring the Players’
CAMPUS, a college sports NFT platform backed by Solana and co-founded by Heisman Trophy winner and first-round NFL draft pick Tim Tebow, is leading an NFT integration for Nissan’s Heisman House ad campaign. Tebow shares insights into the project, breaking down how the proceeds of the NFT sales will be paid out to student athletes. “It is all about honoring the players,” Tebow said. “It is a players-first-driven model.”
How the Midterms Could Add to the ESG Backlash
Lauren Foster – Barron’s
It’s been a bruising year for ESG investing. Not only have ESG funds underperformed the broader market, but the investing strategy has found itself at the center of a flurry of high profile attacks from conservative politicians and others railing against “woke capitalism.” Now comes yet another test: next week’s midterm elections. ESG investing-the acronym stands for environmental, social, and governance-has not historically been a hot political topic. But that’s changed in recent years as more Republican politicians have seized on the strategy as part of the larger culture wars and found it a motivating issue for their base.
Six State Races to Watch That Will Help Define US Energy Transition; Gubernatorial, regulator races have broad climate implications; US needs boost from state, local policies to fight emissions
Angel Adegbesan and Mark Chediak – Bloomberg
Months after the Biden Administration passed sweeping climate legislation, the battle to determine how quickly the US transitions away from fossil fuels hinges in part on local and state-level ballots. In some races, voters are choosing between gubernatorial candidates with opposing ideas on climate change, while others will pick state regulators who will decide whether to adopt more renewable energy sources. The implications will stretch beyond the US.
Opinion: A Republican Congress wouldn’t reduce inflation. It would be a disaster for most Americans.
Laura Tyson and Teresa Ghilarducci – MarketWatch
Inflation now tops the list of concerns for many voters in the United States. But if they use this week’s midterm election to protest inflation, they could tip control of Congress to the Republican Party, with disastrous consequences for their own living standards and American democracy. Whatever happens with inflation over the next year, it will have very little to do with Congress. What matters is the Federal Reserve’s monetary policy and global developments-such as the war in Ukraine-that affect commodity prices and supply chains. Gasoline prices may be a major source of inflationary pain for voters, but neither the president nor Congress can do much to reduce them in the short term.
Gaming Out Market Reactions to the US Midterm Elections; Split control in Washington usually keeps the status quo intact, and reduces the volatility brought by political uncertainty.
John Authers – Bloomberg
It’s the day Americans (and people in much of the rest of the world) have been waiting for. The US midterm elections wrap up today. At this late stage there’s little point in speculating on the outcome. It’s possible that we might have a cliffhanger that drags on for days or months before it’s clear who has control of the House of Representatives and the Senate. That said, if the result is the widely anticipated “red wave” victory for the Republicans, Americans should know the outcome before going to bed on Tuesday. There is no telling when we’ll get the final results, but hopefully investors will get a fairly accurate picture on who their leaders will be by the end of Tuesday as they try to make sense of their portfolios.
US Quietly Asks Banks to Keep Some Ties With Russia, Even as Congress Balks; Treasury, State prod JPMorgan, Citi to bank some Russian firms; Congress lambasted banks for continuing to do work in country
Hannah Levitt and Jennifer Surane – Bloomberg
JPMorgan Chase & Co. CEO Jamie Dimon was in the hot seat. Deep into a seven-hour congressional hearing on Sept. 21, Representative Brad Sherman, a Democrat from California, pressed Dimon on whether his bank would sever ties with Russian companies including energy giant Gazprom PJSC. Banks like Dimon’s, Sherman argued, were exploiting a sanctions loophole to keep doing business in Russia despite its invasion of Ukraine.
Hungary Threatens to Block EU Joint Funds for Ukraine Aid
Zoltan Simon – Bloomberg
Hungary won’t back European Union efforts to aid Ukraine with jointly raised funds, Foreign Minister Peter Szijjarto said, a stance that comes as Budapest fights with the bloc to access recovery funds held up by a rule-of-law dispute.
Japan Defended Yen Just Once in September, Spending $19 Billion
Toru Fujioka and Yoshiaki Nohara – Bloomberg
Japan’s finance ministry stepped in to counter a rapid weakening of the yen just once in September, before escalating its support of the currency to an unprecedented degree last month. The Ministry of Finance spent 2.84 trillion yen ($19 billion) in its first intervention to prop up the yen since 1998 on Sept. 22, according to the daily intervention data for the quarter ending September released by the ministry Tuesday. That was the day the Bank of Japan’s dovish stance added further momentum to yen’s slide.
Why Japan Is Gearing Up for Possible War With China; The threat of Chinese aggression is producing a quiet revolution in Tokyo’s statecraft – and officials are pushing the nation to get ready for a fight.
Hal Brands – Bloomberg
If China were to attack Taiwan, it wouldn’t just have to face a hostile superpower. It would also likely have to confront its longstanding regional rival, Japan. For centuries, Japan and China have vied for hegemony in East Asia; at times, they have threatened each other’s survival. Today, as I found from three days of meetings with Japanese officials and analysts in Tokyo, the threat of Chinese aggression is producing a quiet revolution in Japanese statecraft – and pushing the nation to get ready for a fight.
LBRY loss against SEC threatens to make ether a security, crypto boosters fear
Chris Matthews – MarketWatch
A federal judge ruled Monday that video-hosting platform LBRY Inc. illegally sold its native token to U.S. investors, in a win for the Securities and Exchange Commission that could pave the way for other, more popular digital assets to be labeled securities and regulated similarly to stocks and bonds.
SEC Charges Trade Coin Club Founder, Promoters in $295 Million Bitcoin Fraud; The regulator alleges the club was a crypto Ponzi scheme that raised bitcoins from investors around the world
Mengqi Sun – The Wall Street Journal
The Securities and Exchange Commission filed charges against the founder and three U.S. promoters of Trade Coin Club, alleging the crypto-trading membership club operated as a Ponzi scheme that raised 82,000 bitcoins, valued at $295 million in 2018, from investors around the world. The charges against four individuals, filed on Thursday in federal court in Seattle, allege that Trade Coin Club, created and controlled by Douver Torres Braga, was a multilevel marketing program operated between 2016 and 2018 that promised profits from a crypto-asset trading bot.
Insurance Broker Arthur J. Gallagher Subpoenaed by Justice Department’s Foreign Bribery Unit; The company says prosecutors are seeking information related to its insurance business in Ecuador
Dylan Tokar – The Wall Street Journal
Arthur J. Gallagher & Co. said it received a subpoena from the Justice Department’s foreign bribery unit, making it the latest company to become ensnared in a sprawling investigation into corruption at state-owned companies in Ecuador. The Rolling Meadows, Ill.-based insurance brokerage disclosed the subpoena in a quarterly financial report this week. The information request, which the company said it received in its third quarter, was from the Justice Department’s Foreign Corrupt Practices Act unit, Arthur J. Gallagher said.
SEC Announces Departure of Chief of Staff Prashant Yerramalli and Appointment of Amanda Fischer to the Role
The Securities and Exchange Commission today announced that Chief of Staff Prashant Yerramalli will leave the agency, effective Dec. 31, 2022. Amanda Fischer, currently Senior Counselor to Chair Gary Gensler, will be appointed Chief of Staff, effective upon Mr. Yerramalli’s departure.
Keith E. Cassidy and Natasha Vij Greiner Appointed Deputy Directors of Division of Examinations
The Securities and Exchange Commission today named Keith E. Cassidy and Natasha Vij Greiner as Deputy Directors of the Division of Examinations.
“Our examinations function plays an essential role as the eyes and ears on the ground for the Commission,” said SEC Chair Gary Gensler. “Keith and Natasha have proven to be strong leaders with deep experience and will be invaluable as Deputy Directors in the Division.”
SEC Granted Summary Judgment Against New Hampshire Issuer of Crypto Asset Securities for Registration Violations
On November 7, 2022, Judge Peter Barbadoro of the United States District Court for the District of New Hampshire granted the SEC’s motion for summary judgment against LBRY, Inc., a New Hampshire software company that issued crypto asset securities called “LBRY Credits” or “LBC.” The Court held that LBRY offered and sold LBC as a security in violation of the registration provisions of the federal securities laws, and that LBRY did not have a defense that it lacked fair notice of the application of those laws to its offer and sale.
Former Courtenay House director pleads guilty to conducting $180 million Ponzi scheme
Tony Iervasi, of Tweed Heads, NSW, has pleaded guilty in the Downing Centre Local Court to five criminal charges regarding the operation of a Ponzi scheme when he was director of Courtenay House Pty Ltd (in liquidation) and Courtenay House Capital Trading Group Pty Ltd (in liquidation).
Directions and requirements placed on Samweb for providing misleading information to consumers
On 21 June 2022 the FCA issued a First Supervisory Notice which gave directions and imposed requirements on Samweb (UK) Limited due to concerns about the way the firm conducts its business. On 21 September 2022, the FCA issued a Second Supervisory Notice.
SFC reprimands and fines Swiss-Asia Asset Management (HK) Limited $3 million for regulatory breaches
Securities & Futures Commission of Hong Kong
The Securities and Futures Commission (SFC) has reprimanded and fined Swiss-Asia Asset Management (HK) Limited (Swiss-Asia) $3 million for internal control failings and regulatory breaches in relation to the monitoring of trading activities in discretionary accounts and record keeping (Notes 1 to 6).
Investing and Trading
Goldman Lowers S&P 500 Earnings Estimates Until 2024
Goldman Sachs Group Inc. says margins contraction in the third-quarter signals more pain ahead as it cut earnings estimates for the S&P 500 Index for each year until 2024. Dani Burger reports on Bloomberg Television.
Short-ARKK Fund Celebrates First Birthday Up 110% Since Launch; SARK is among best-performing ETF launches over the past year; Aggressive Fed hikes have dragged down high-flying tech stocks
Katherine Greifeld – Bloomberg
Trying to time the market paid out big time for investors betting against Cathie Wood’s flagship fund this year. The $361 million AXS Short Innovation Daily ETF (ticker SARK), which uses swap contracts to track the inverse performance of Wood’s main fund, has soared more than 111% since launching one year ago. That’s the second best performance among the nearly 450 ETFs that launched over the past year, Bloomberg data show.
US accounting industry split on taking private equity cash; BDO, Grant Thornton and Marcum among firms to have explored deals as new capital fuels M&A boom
Stephen Foley – Financial Times
Several of America’s largest accounting firms have explored the possibility of taking private equity cash in recent months, as money from buyout funds adds fuel to a mergers and acquisitions boom across the industry. BDO and Grant Thornton are among those to have considered a deal with private equity, and while neither immediately decided to pursue an investment, bankers and executives expect a number of smaller firms will do so, and use the cash to swoop on rivals. Private equity has been drawn to the fragmented US accounting industry for its relatively stable cash flows and consolidation prospects, but selling some or all of the business to the so-called barbarians at the gate has split a sector dominated by traditional partnerships.
Zurich launches eXchange to foster insurance collaboration
Zurich Insurance Group (Zurich) has launched Zurich eXchange, a next-generation global API marketplace to enable more efficient collaboration.
Analysis-Nagging U.S. Treasury liquidity problems raise Fed balance sheet predicament
Gertrude Chavez-Dreyfuss – Reuters
The U.S. Federal Reserve’s ongoing balance sheet drawdown has exacerbated low liquidity and high volatility in the $20-trillion U.S. Treasury debt market, raising questions on whether the Fed needs to re-think this strategy. Intended to drain stimulus pumped into the economy during the COVID-19 pandemic, the Fed’s quantitative tightening (QT), as it is commonly referred to, has been running for the last five months. The Fed’s balance sheet though remains at a lofty $8.7 trillion, down modestly from a peak of nearly $9 trillion.
‘My adviser has gone dark.’ My account has $500K in it, and I can’t get a hold of my adviser right now. What’s my move?
Alisa Wolfson – MarketWatch
Question: My business has a SIMPLE IRA (Savings Incentive Match Plan for Employees) for employees who want to participate after one year. Our problem is that the adviser we had has gone dark, and we haven’t been able to connect with him for over a year. The company also has two advisers, but they offices are not local. I prefer to deal in person. Would I be better off looking at a financial center at a bank or a brokerage house? The account is approximately $500K. I want a fiduciary. What are my options? (Looking for a new financial adviser too? This tool can help match you with an adviser who might meet your needs.)
Traders Clamor for Middle East Oil Amid Russia Uncertainty
Sharon Cho and Sherry Su – Bloomberg
Many of the world’s oil refineries are rushing to try and guarantee supplies of Middle East crude for next year, fearful of what’s to become of Russia’s giant export program. In under a month, almost all companies in the European Union will be barred from purchasing seaborne cargoes from Russia — an attempt by the 27-nation bloc to punish the Kremlin for the invasion of Ukraine.
Wall Street’s Alchemists Turbocharged Wild Swings in Treasuries; Placid financial markets fueled surge in low-volatility wagers; Scramble to hedge exposures is exacerbating rates swings
Justina Lee and Liz McCormick – Bloomberg
Over the last decade, as rock-bottom interest rates depressed returns on fixed-income assets, the alchemists of Wall Street came up with a solution for investors who needed fatter yields: a whole series of complex products that spun extra basis points out of comatose markets. Now, amid the worst bond rout in at least five decades, firms have been scrambling to hedge their positions, piling into derivatives that benefit from higher volatility as they seek to limit the damage.
Japan Likely Sold Treasuries to Show FX Firepower, Analysts Say
Toru Fujioka – Bloomberg
Japan likely sold some of its Treasury holdings to fund its yen interventions, in a bid to show speculators it has more immediate firepower than they may have expected, according to analysts. The country’s holdings of foreign securities dropped by $43.9 billion in October to $941.3 billion, according to a finance ministry report Tuesday. A simple comparison shows that’s close to the $42.9 billion Japan spent last month supporting the embattled yen.
Environmental, Social and Corporate Governance
GreenWeather & Science: Exclusive Satellite Images Show Near Real-Time Methane Emissions; During COP27 we’re posting high-resolution images of a methane clouds to highlight how common – and damaging – releases of the potent greenhouse gas are.
Aaron Clark – Bloomberg
All through COP27, Bloomberg Green will exclusively publish new satellite images of methane releases around the world, in collaboration with emissions monitoring firm GHGSat Inc. Scientists say reducing the emissions of methane, which has 84 times the warming power of carbon dioxide during its first two decades in the atmosphere, is one of the fastest and cheapest ways to cool the planet.
The Tiny Insurance Company Standing Between Taxpayers and a Costly Coal Industry Bailout; Indemnity backs two-thirds of West Virginia’s coal bonds. The concentration worries just about everybody.
Leslie Kaufman and Will Wade – Bloomberg
In a quiet commercial strip in an upscale suburb of Nashville, there’s a single-story brick building housing a company that may determine whether another billion-dollar taxpayer bailout of the coal industry is needed. It is the main office of Indemnity National Insurance Co., a specialty insurer whose health underpins the financing for the cleanup of almost one-fifth of the US coal mining industry.
ISSB announces new Partnership Framework, CDP to incorporate ISSB climate standard into its disclosure platform
ISSB (International Sustainability Standards Board)
At the finance day of 27th United Nations Conference of the Parties (COP27), ISSB Chair Emmanuel Faber will introduce the ISSB’s new Partnership Framework with more than 20 partner organisations. In addition, CDP and the ISSB have announced that CDP will incorporate the IFRS S2 ‘Climate-related Disclosures’ requirements into its global environmental disclosure platform.
COP27 Latest: African Leaders Say They Need Cash Not Cheap Loans
Antony Sguazzin, John Ainger, Salma El Wardany, and David Malingha – Bloomberg
South Africa’s President Cyril Ramaphosa said more climate funding needs to come in the form of grants and concessional loans, to avoid the continent ramping up debt. Ramaphosa called on multilateral development banks to change their approach to climate finance, saying support is out of reach for most of the world’s population. The institutions are “risk averse” and their funding offers “carry onerous costs,” he said at the COP27 conference in Egypt.
New York Voters to Decide on $4.2 Billion of Bonds to Fight Climate Change; Measure to help coastal communities seen winning approval; Green debt of widely held issuer could spur ESG muni investing
Marvis Gutierrez – Bloomberg
New Yorkers on Tuesday will vote on whether to help their neighbors most affected by climate change by approving a measure that would also boost ESG investing in the $4 trillion municipal bond market. On the state ballot is a $4.2 billion environmental bond, the largest borrowing referendum in the nation this Election Day and if it were to pass would be one of the biggest for environmental, social and governance purposes since California approved a $7.5 billion plan for water-related projects eight years ago. Voters in New York historically have backed such ballot measures, and a recent poll showed this one is likely to pass.
What Happens After Warming Hits 1.5C? A Guide to Climate Overshoot; COP27 climate talks come as the odds of fulfilling the Paris Agreement dwindle. But that doesn’t mean 1.5 degrees Celsius is an impossible future.
Eric Roston – Bloomberg
The diplomats and world leaders now gathered in Egypt for the annual United Nations climate summit are tasked, in some sense, with holding the global average temperature below 1.5 degrees Celsius of warming. That’s one of the key objectives around which the 2015 Paris Agreement was formed, and so it has become a shorthand for the success of every subsequent climate summit. Talks in Glasgow last year at COP26 ended with the conference leader saying the limit of 1.5C is “alive but its pulse is weak.”
More Governments Are Turning Against the Rush to Mine the Deep Sea; At least 10 countries that are members of an international body regulating ocean mining want to pause the practice because of a lack of scientific data on its environmental impact.
Todd Woody – Bloomberg
As world leaders gather at the United Nations climate summit in Egypt this week, another international meeting is underway in Jamaica to decide the fate of the planet’s oceans. The UN-affiliated International Seabed Authority is convening in Kingston to fast-track regulations that could allow the mining of fragile and biodiverse deep sea ecosystems for valuable metals as soon as 2024. But as the ISA Council, the organization’s policymaking body, concluded its first week of meetings on Friday, a growing number of countries were calling for a halt to the rush to enact mining regulations by July 2023, a deadline established last year.
Why do we have no rights?’: Phnom Penh lake community make a last stand against developers; Cambodian capital has lost more than half its lakes to a housing boom – but a group of women are risking jail to fight against land grabs and evictions
Fiona Kelliher and Mech Dara – The Guardian
The lake where Prak Sophea lives on the outskirts of Phnom Penh is unrecognisable from when she built her stilted shack more than 20 years ago. Back then, she could barely see the other side of the lake. Now, signs of rapid development are everywhere as bulldozers haul freshly dug earth from the shoreline and signs advertise new boreys, or gated communities.
Baltic Nation Seeks to Become LNG Hub in Pivot Away From Russia; Latvia eyes own LNG terminal to complement storage capability; New law prohibits importing Russian natural gas or LNG
Sergio Chapa, Anna Shiryaevskaya, and Aaron Eglitis – Bloomberg
The Baltic coast looks set to get another liquefied natural gas terminal as Latvia steps up efforts to become a regional trading hub for the super-chilled fuel. Only one LNG import terminal currently serves the Baltic states — the Klaipeda facility in Lithuania — while another is set to start up this winter in Finland, where flows from Russia were cut in May. But as the region pivots away from Russian supplies amid the Kremlin’s war in Ukraine, more terminals are needed.
‘Shalennial’ US gas salesman wants to kill global coal; EQT chief executive Toby Rice claims his fuel helps Europe and the climate, but critics see a ‘false reality’
Derek Brower – Financial Times
From a converted karate dojo above a Pittsburgh liquor store, Toby Rice, a self-described “shalennial” who runs one of America’s biggest energy companies, has a plan to fix global warming and soothe European anxieties over fuel supplies. It involves lots more hydrocarbons – specifically, liquefied natural gas, the supercooled fuel that US companies have been sending in record volumes across the Atlantic as Europe tries to break Vladimir Putin’s energy chokehold. The world needs more American fossil fuels, according to Rice. “Unleash US LNG,” reads the phrase on caps and shirts he hands to visitors stopping by the dojo. He contends doing so would enable American gas to kill off foreign coal and slash global emissions.
Maersk warns oil groups are holding back clean energy transition; Shipping company says more affordable green fuel must be offered by suppliers
Oliver Telling and Barney Jopson – Financial Times
The oil industry is holding back a clean energy transition in global supply chains, the head of decarbonisation at AP Moeller-Maersk has warned, as he called for the shipping group’s suppliers to offer more affordable green fuel. Morten Bo Christiansen said Maersk risked not having the green methanol supplies it needs to fuel zero carbon ships, as the Danish group signed an agreement with the Spanish government to explore clean energy production in the country. “Today, we buy our fuel from the oil companies. But they have not offered us any green methanol at a price point we can accept,” he told the Financial Times.
Alternative credit managers launch ESG integrated disclosure tool; Standardised template to drive enhanced transparency and accountability
A group of leading alternative asset managers and industry bodies in the private and broadly syndicated credit markets have today announced the launch of the ESG Integrated Disclosure Project (ESG IDP) template. The ESG IDP template will enhance transparency and consistency for both private companies and credit investors by providing a standard format for ESG-related disclosures. The template offers private companies a baseline from which to develop their ESG reporting capacity. For investors, the ESG IDP template enhances their ability to identify industry-specific ESG risks in their credit portfolios and compare meaningful data across alternative asset managers more consistently.
Paltry Emerging Market Investment Flows Point to Climate Catastrophe; Unless emerging markets start drawing considerably more cash to put toward clean energy, the world has little chance of limiting temperatures to 1.5C
Alastair Marsh – Bloomberg
Investment in clean energy in emerging markets is less than a tenth of what’s required to keep the world on course to limit global warming to 1.5C, according to a new report from BloombergNEF. While developing economies account for almost half of global greenhouse gas emissions and over a third of energy-related emissions, the volume of capital invested in moving these countries to lower-carbon sources of energy “is insufficient given the size of the climate challenge,” BNEF said in a report published on Tuesday.
UK Provides $109 Million Climate Funding for Nigerian Farmers; Financing targets 4 million farmers to increase sustainability; Comes as country experiences worst flooding in a decade
Ruth Olurounbi – Bloomberg
The UK government will provide new funding to help Nigerian farmers adapt to the impact of climate change while improving productivity in Africa’s most populous country.
Kerry Pitches Carbon Credits to Boost Green Spending in Poor Nations; Proposal to be outlined Wednesday at COP27 Summit in Egypt; Initiative aims to drive climate finance in developing nations
Jennifer A Dlouhy – Bloomberg
US climate envoy John Kerry is set to announce Wednesday a new carbon credit program to help developing countries transition to clean energy, despite growing doubts over the integrity and effectiveness of existing voluntary offset initiatives. Kerry will outline a framework for the program, which will involve the US and other partners, at the COP27 climate summit in Egypt’s Sharm el-Sheikh.
UN urges Mark Carney-led climate initiative to meet higher standards; Financial institutions cannot claim to be net zero while investing in fossil fuels, says report
Camilla Hodgson – Financial Times
Former Bank of England governor Mark Carney’s coalition of more than 500 financial institutions that have signed up to net zero is named as among the private sector climate initiatives that must maintain tighter standards, in a UN report with guidelines to stop corporate greenwashing.
Dispatches from Cold War in cryptoland; An iron curtain has descended across the blockchain
Bryce Elder – Financial Times
In war, whichever side may call itself the victor, there are no winners. All are losers. The story so far: FTT is the house token of FTX, a crypto exchange superpower, meaning it’s a sort of Disney dollar for Sam Bankman-Fried’s empire. Binance, the other crypto exchange superpower, said on Sunday that it was going to sell a lot of FTT tokens because of “revelations”.
China’s Long Lockdowns Struggle to Contain Growing Outbreaks; Xinjiang cases swell despite extended restrictions for cities; National Covid infections rise to highest in over six months
Linda Lew – Bloomberg
Some of China’s most persistent virus hotspots have been locked down for weeks, and in some cases months, showing the limitations of the country’s contentious Covid Zero policy. Xinjiang reported the fourth-highest number of new cases nationally for Monday, according to data compiled by Bloomberg, despite some cities in the region in China’s northwest locked down for 90 days. Inner Mongolia, which was sealed off in early October, saw cases jump to almost 1,800 from 1,033 a day earlier, while Henan province’s infections more than doubled in a day to 747.
Josh Younger on the Origin Story of the Shadow Banking System; It started at a time not too different than today.
Tracy Alloway and Joe Weisenthal – Bloomberg
There are a bunch of historical analogies that people like to reach for in order to describe some of the economic trends we’re seeing today. There’s obviously the period of high inflation in the 1970s and early 1980s, or the disruptions caused by the Spanish Flu pandemic around 1918. But there’s also a single year — 1953 — which not only contains some eerie similarities to today’s economic environment, but also ended up having far-reaching consequences that reverberate all the way to 2022.
Hedge Funds Slash Risky Bets Ahead of Midterms, CPI Data; Pace of degrossing in line with year’s worst: JPMorgan data; ‘I’m not willing to take headline risk:’ Reidy at First Growth
Lu Wang and Melissa Karsh – Bloomberg
Big speculators, a year along in a frantic campaign of risk reduction, are getting even more cautious ahead of a duo of potential make-or-break market events this week: midterm elections and the government’s inflation report. Hedge funds that make both bullish and bearish equity wagers just unwound bets at a rate that was in line with the fastest this year, according to data compiled by JPMorgan Chase & Co.’s prime broker using a 20-day rolling window. The process, known as degrossing, also played out among Morgan Stanley’s fund clients, though the pace slowed at the start of last week. Still, at 178%, the group’s gross leverage, a rough measure of long and short positioning among clients, sat in the 6th percentile of a five-year range.
Ex-Credit Suisse Trader’s Hedge Fund Wins Brazil Election Trade; Norte fund tops all peers with 17% gain since campaign started; Bets on Sabesp, low-income homebuilders helped boost returns
Vinicius Andrade – Bloomberg
An equity-focused hedge fund launched by a Credit Suisse Group AG veteran around the height of the coronavirus pandemic emerged as the winner from Brazil’s election swings. The Norte Long Bias fund, a 1.3 billion-real ($257 million) fund managed by Sao Paulo-based Norte Asset Management, had a 17% return after fees from the start of the campaign on Aug. 16 through Oct. 31, the day after Luiz Inacio Lula da Silva defeated Jair Bolsonaro in the presidential vote. That jump put it ahead of all its 205 peers, according to data compiled by Bloomberg.
Morgan Stanley’s Wilson Says Broader Layoffs Would Be Bull Sign for Stocks; ‘Reality is there are too many’ tech companies now, he says; ‘US equities are nearing the bottom of the bear market’
Isabelle Lee and Jonathan Ferro – Bloomberg
Morgan Stanley’s Michael Wilson says companies will need to aggressively bring down expenses before he becomes more optimistic on US equities. “When that layoff cycle picks up in earnest that will actually be one of the keys for us to get bullish because that means the bleeding will stop on the operating leverage,” the top-rated strategist told Bloomberg TV on Monday. Major technology companies have announced about 100,000 jobs cut this year, according to Layoffs.fyi, as companies attempt to control ballooning expenses.
UBS chief risk officer quits to become professional photographer; Christian Bluhm has been in role since 2016, during which time bank has avoided major scandals suffered by Credit Suisse
Abby Wallace and Owen Walker – Financial Times
UBS’s chief risk officer Christian Bluhm has resigned from the Swiss bank to become a full-time professional photographer. The unusual career change, announced on Tuesday, will lead to Bluhm opening a studio and gallery in Zurich’s historic centre, a short distance from UBS’s headquarters, as he swaps capital ratios for aspect ratios.
Carlyle blames market volatility as fundraising slows to $6bn; US private equity group also cites competition for funds as it searches for new chief executive
Antoine Gara – Financial Times
Carlyle Group has suffered a sharp slowdown in fundraising and a decline in assets under management as the private equity group searches for a new chief executive after the abrupt departure of Kewsong Lee in August. The $6bn in new investor commitments received in the third quarter was less than the $10bn it raised in the second quarter, New York- and Washington-based Carlyle said on Tuesday.
UBS Asset Management’s global head of trading joins Plato board; New board member brings more than 25 years’ experience to Plato Partnership, having previously served at Bridgewater Associates, Mellon Capital Management, Dresdner Kleinwort, Credit Suisse and WR Hambrecht and Co.
Wesley Bray – The Trade
Plato Partnership has added UBS Asset Management’s Lynn Challenger to its board of directors. Challenger holds over 25 years’ experience in capital markets, multi-asset trading, technology, best execution and investment operations.
Deutsche Bank alumnus joins AustralianSuper as senior equity dealer; New dealer brings over two decades worth of experience in equity focused roles to AustralianSuper, having previously served at Liberum and Deutsche Bank.
Wesley Bray – The Trade
Melbourne-based superannuation fund, AustralianSuper, has appointed Nina Marsh as a senior equity dealer. Marsh joins the firm from Liberum, where she spent the last 14 years, most recently as an equity sales trader.
China’s COVID epicentre shifts to Guangzhou, more lockdowns loom
Ryan Woo – Reuters
New coronavirus cases surged in Guangzhou and other Chinese cities, official data showed on Tuesday, with the global manufacturing hub becoming China’s latest COVID1-9 epicentre and testing the city’s ability to avoid a Shanghai-style lockdown. Nationwide, new locally transmitted infections climbed to 7,475 on Nov. 7, according to China’s health authority, up from 5,496 the day before and the highest since May 1. Guangzhou accounted for nearly a third of the new infections.
Big Tobacco Heralds a Healthier World While Fighting Its Arrival; The industry continues to fight efforts to restrict certain products, like spending heavily to urge California voters to overturn a law banning tobacco flavors.
Julie Creswell and Matt Richtel – The New York Times
For decades, public health advocates chipped away at the influence of Big Tobacco with measures aimed at discouraging cigarette use. But the bitter legal and political battles were just a prelude to the unfolding climactic clash that could determine the fate of smoking and whether these companies adapt or falter.
Covid Patients Coming Off Ventilators Can Take Weeks to Regain Consciousness; A new paper suggests that the combination of the virus and anesthesia plunges the brain into a prolonged state of quiet – like a freshwater turtle in winter.
Carl Zimmer – The New York Times
In March 2020, New York City’s hospitals filled up with patients desperately ill with Covid-19. In many cases, when their fluid-filled lungs could no longer give them oxygen, doctors sedated them and put them on ventilators. The patients who recovered were taken off the machines and anesthesia. Within a day or so, their doctors expected them to wake up. But that’s when the phone of Dr. Nicholas Schiff, a neurologist at Weill Cornell Medicine, started lighting up.
Hong Kong Foreign Worker Arrivals Plummet as Covid Rules Drag On; Number of foreign worker visas approved falls by two-thirds; City makes attracting talent one of its top priorities
Shirley Zhao – Bloomberg
The number of visas granted to overseas workers in Hong Kong fell by about two-thirds during the Covid-19 pandemic, as stringent travel curbs severed the finance hub’s connection with the rest of the world. Some 13,800 general employment visas were approved in 2021, compared to more than 41,000 two years earlier, according to statistics from the city’s Immigration Department.
CEO of Australia’s Top Pension ‘Terrified’ of Global Cash Grabs
Amy Bainbridge – Bloomberg
The head of AustralianSuper Pty, the country’s biggest pension fund, warned against governments looking to tap trillions of dollars of retirement savings as economic crises mount. “I’m terrified governments around the world will say ‘we’ve got an economic trauma, tap the money’,” Chief Executive Officer Paul Schroder told the AFR Super & Wealth Summit in Sydney on Tuesday. “It’s easy politics, horrible financial thinking, terrible for society.”
Europe’s Energy Crunch Will Trigger Years of Shortages and Blackouts; To replace Russian gas, Europe is buying up fuel that used to go to developing countries.
Stephen Stapczynski, Anna Shiryaevskaya, and Faseeh Mangi – Bloomberg
Bills will be high, but Europe will survive the winter: It’s bought enough oil and gas to get through the heating seasons. Much deeper costs will be borne by the world’s poorest countries, which have been shut out of the natural gas market by Europe’s suddenly ravenous demand. It’s left emerging market countries unable to meet today’s needs or tomorrow’s, and the most likely consequences – factory shutdowns, more frequent and longer-lasting power shortages, the foment of social unrest – could stretch into the next decade.
How Qatar Is Handling a Year’s Worth of Boozing in Four Weeks; When even alcohol advertising is illegal, how do you prepare a country for the booziest event in its history?
Simone Foxman – Bloomberg
The King of Beers is taking over Qatar. The signs started appearing early this year: At the Qatar Distribution Company – the only alcohol retailer in the conservative Muslim country – a massive poster with Budweiser branding featuring Lionel Messi was plastered across the entrance. Then more of Doha’s bars and restaurants started offering Budweiser on tap, a new choice in a city of Heineken draughts.
California Fire Season to Get Snuffed Out as Pacific Storm Nears; Chill brings curtain down on least destructive season in years.
Brian K Sullivan – Bloomberg
Torrential rain and snow will fall over California in the coming days, raising the prospect the state will experience something that’s become elusive in recent years: an early end to wildfire season. The storms sweeping off the Pacific Ocean will dump up to 10 inches of rain in the San Bernardino Mountains of Southern California and upwards to 5 feet (1.5 meters) of snow in the Sierra Nevadas up north. Forecasters say it will thoroughly soak tinder-dry grasses and shrubs that have given rise to so many out-of-control blazes amid the region’s historic drought.
Mississippi River Barge Prices Plunged Over the Last Week; Some good news supply chain news
Joe Weisenthal – Bloomberg
Thanks to a mix of improving weather conditions and general seasonality, the price to move grain down the Mississippi River has fallen by about a third during the last week. For the last several months, a severe drought in the Midwest has lowered the water levels on the Mississippi River to their worst depth since the 1980s, which had the effect of constraining the flow of barges carrying grains and other goods. As discussed on a recent episode of the Odd Lots podcast, this had caused the spot price of barge transport to explode roughly 10 times above normal levels.
Tyson Foods CFO Arrested After Authorities Say He Fell Asleep in Wrong House; John R. Tyson, great-grandson of firm’s founder, arrested over the weekend, local law-enforcement officials say
Patrick Thomas – The Wall Street Journal
John R. Tyson, Tyson Foods Inc.’s chief financial officer and son of the meat giant’s chairman, was arrested over the weekend after authorities said he fell asleep in the wrong house. Mr. Tyson, 32 years old, was found asleep in a woman’s bed at her home in Fayetteville, Ark., on Sunday morning, according to a preliminary arrest report filed by the Fayetteville Police Department. He was arrested for criminal trespass and public intoxication, according to the report, and booked at the Washington County Detention Center. He was released Sunday evening.