Can the Fed Fix the Treasury Market by Tweaking Repo?

Aug 2, 2021

First Read

$51,906/$300,000 (17.3%)


Hits & Takes
John Lothian & JLN Staff

On Friday we posted the video from the 2021 World of Opportunity virtual event held on July 21 and the extra videos we shared with the registrants. We also broke out each of the presentations from the event into their own videos, one of Small Exchange CEO Donnie Roberts and the other of Get Real VR partner Ed Haravon. The extra videos are an interview with Cboe Global Markets CEO Ed Tilly, a presentation by OCC’s Andre Buckles and an interview of NFA’s Robin Wood by NFA communications specialist Joseph McCarthy.

Bloomberg reports there is a new COVID-19 outbreak epicenter in the U.S., which is Florida. Florida reported 21,683 new cases Friday, breaking the previous single day record for the entire pandemic for the state. The previous record was 19,100 in early January. There is a very strong correlation between the number of idiotic things said by a state’s governor and the number of cases, and Florida has seen a flood of such statements. — BloombergNY Post

The New York Times has some alarming news about the coronavirus and deer, reporting, “A third of the white-tailed deer tested in four states during a federal study had been exposed to the coronavirus, in yet another indication of the unpredictable nature of the disease. The percentage was highest in Michigan, where 60 percent of the animals tested positive.” — NY Times

The law firm of Jones Day has a post on its website titled “The Long Arm of the CFTC: What Stakeholders in the MENA Region Should Know.” The post says, “A MENA-based non-U.S. person trading derivatives such as futures and options on certain exchanges in the UAE, or internationally, may be liable for breaches of the CEA and CFTC regulations, even if that non-U.S. person has no direct link to the United States. This may also be true with “over-the-counter” transactions in swaps or physical commodities that are conducted with a U.S. person or that otherwise have a connection to the United States.” — Jones Day

Robinhood’s IPO was considered disappointing because the shares of the stock did not rocket higher on the first day, but rather declined by 8.37%. However, the net worth of Vlad Tenev and Baiju Bhatt, the Robinhood Markets Inc. co-founders, after the IPO was put at $2.2 billion and $2.5 billion respectively. I am very willing to be disappointed like that. — Bloomberg

Deputy Director of Americas Fixed Income Funding & Finance at Eurex Matt Scharpf and his band the “Bad Dads” had a couple of gigs in the Geneva Lake, Wisconsin area over the weekend, including in CQG SVP Pat Kenny’s hometown of Fontana and Williams Bay, where my family has a home. Scharpf and the Bad Dads played at Chuck’s Lakeside Inn in Fontana, where Pat Kenny was a bartender with CME Group Executive Chairman and CEO Terry Duffy back when I was 18 years old. Kenny is now the village president of Fontana.

Scharpf played on Sunday afternoon with just his former college roommate, whom he has been playing with since their freshman year at Dayton University. They played their guitars and sang at the Williams Bay lakeside restaurant Pier 290, which is part of the Gage Marine family of companies that also runs the tour boats on the lake. Incidentally, the tour boat company is run by my cousin, Jack Lothian.

Scharpf and Lou Leone played at Pier 290 for two hours straight without a break, but did take time to dedicate a song (“Peggy Sue” by Buddy Holly) to my wife Cheryl in honor of her birthday yesterday. They gave a thoroughly enjoyable performance. Scharpf is an incredible guitar player and singer who has 550 songs in his repertoire. Scharpf participated in our 2017 World of Opportunity series with a very popular presentation titled “Trading with a Creative Mind” on how music and the markets are alike.

An interesting fact about Williams Bay from Wikipedia: under the notable residents section, of the eight people who are listed six are astronomers who worked at Yerkes Observatory of the University of Chicago, including Edwin Hubble for whom the Hubble Telescope is named. The other two are Dara Hobbs, an operatic soprano whose brother I once coached in Little League in Williams Bay, and my uncle, Thomas Lothian, II, who was a college professor and member of the state legislature.

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



Charles Farra – The Path to Electronic Trading Has Many Steps and Flights

For Charles Farra, there were many steps on the path to electronic trading that saw him start as a runner for Cargill Investor Services in 1981 and work his way up in the organization. He would serve the firm in Chicago, London and Tokyo during a time when new products and big markets led to incredible growth in the futures industry.

Watch the video »


The Complete 2021 MarketsWiki Education World of Opportunity Virtual Event & Additional Videos

The 2021 JLN MarketsWiki Education World of Opportunity was held on July 21 as a virtual event and featured an interview with Small Exchange CEO Donnie Roberts and an interview of and presentation from Get Real VR partner Ed Haravon.

Watch the video »


The Spread – July 30, 2021

Earnings season in full bloom; Options lead year-to-date derivatives volume; Robinhood’s IPO; John gets real with Get Real VR: Conflicting factors underpin volatility; Cboe cleared for fall European competition; and the Cboe Options Institute’s Kevin Davitt talks about vega in this week’s “Term of the Week.”

Watch the video »


Sponsored Content
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Priceless? Even Olympic Medals Can Be Had for the Right Price; Some former Olympians have resorted to selling their medals because of financial hardships or to raise money for charity.
Neil Vigdor – NY TImes
A silver medal in shooting from the 1900 Olympics in Paris recently sold for a mere $1,283. Then there was a bronze medal from the 1956 Winter Games in Cortina d’Ampezzo, Italy, that fetched $3,750.

***** It is the experience, not the medal that is valuable in participating and excelling at the Olympics.~JJL


Your Odds of Going Back to the Office Are Dropping by the Day; Apple, Google, Lyft, the New York Times, Twitter. The list of companies delaying office reopenings is growing.
Noah Lanard – Mother Jones
Some good news if you’re an office worker who can’t stand your boss, commuting, or both: Your odds of returning to the office in the coming weeks are falling. Labor Day was supposed to be the big switch back to in-person work after 17 months of Zoom. Now, with the Delta variant surging across the country, many of America’s biggest corporations are pushing back their returns dates again—in some cases indefinitely.

****** This looks like a losing trade more and more.~JJL


A Wall Street Dressing Down: Always. Be. Casual; As workers return to the financial district, longstanding dress codes have been relaxed. Right now, almost anything goes. Even jeans.
Lananh Nguyen and Melodie Jeng – NY Times
The suits are returning to the office. In chinos. And sneakers. And ballet flats. As Wall Street workers trickle back into their Manhattan offices this summer, they are noticeable for their casual attire. Men are reporting for duty in polo shirts. Women have stepped down from the high heels once considered de rigueur. Ties are nowhere to be found. Even the Lululemon logo has been spotted.

****** Can I wear shorts? Probably not yet.~JJL


Friday’s Top Three
Our top story Friday was also the top story Thursday, Wall Street legend Richard Dennis conducted an intellectual experiment that turned 23 novice investors into overnight millionaires. Here are the 6 trading rules and philosophies that his ‘turtle traders’ live by, from Business Insider. Second was US benchmark reform panel endorses forward-looking rate to replace Libor, from the Financial Times. Third was What Happens When a Brokerage Firm Doesn’t Have Enough Capital To Cover Trades? from Yahoo Finance.


MarketsWiki Stats
26,498 pages; 234,932 edits
MarketsWiki Statistics


Lead Stories

Can the Fed Fix the Treasury Market by Tweaking Repo?
Liz McCormick – Bloomberg
The $21.7 trillion Treasuries market is the bedrock of the global financial system. It’s not good when bedrock shivers, let alone shakes! But bouts of Treasuries turmoil have been happening more frequently and at times triggering large-scale interventions from the U.S. Federal Reserve. Pandemic-sparked volatility in March 2020 caused liquidity in the world’s biggest bond market to plunge, pushing the Fed to pour in more than $100 billion a day through debt purchases. More than a year later, the Fed announced the creation of what’s known as a standing repo facility, a step meant to head off future turmoil. A few hours earlier, a panel of former top global policy makers had called for the creation of such a facility, along with other measures to shore up the Treasuries market.

The Stay-at-Home Recovery Could Outlast the Pandemic; Business activity after “Freedom Day” in the U.K. has been underwhelming. It raises big questions about how the pandemic has reshaped society.
Lionel Laurent and Marcus Ashworth – Bloomberg
The U.K.’s “Freedom Day” has been declared a damp squib by taxi firm Addison Lee, and it’s hard to disagree. Even with hospitalizations and deaths low — and cases falling — mobility is plateauing and below pre-pandemic levels in some areas. Brits are exercising their freedom to mingle selectively. We are a long way from the celebratory orgies reported by historians after the Black Death. The economic implications will matter for all governments trying to work out where society goes after Covid.

How Return-to-Office Policies Are Shifting With U.S. Virus Surge
Kara Wetzel – Bloomberg
A resurgence in Covid-19 cases has spurred U.S. employers to backtrack on return-to-office plans and institute vaccination requirements for on-site workers. Here’s what major companies have said about their latest policies:

Lack of Progress in Treating Covid Causes Worry for Unvaccinated
Nic Querolo and Carey Goldberg – Bloomberg
Advances to treatment stalled in last year despite early gains; Plateau risks more deaths among unvaccinated U.S. population
A stall in treatment advances for Covid-19 has raised concern among medical experts about unvaccinated people, who still make up half the country, and their likelihood of surviving the coming wave of delta cases.

As Delta Variant Rages, More Workers Are on Edge About Return to the Office; New face-mask and vaccination mandates leave many frustrated, uncertain regarding next steps
Ray A. Smith and Patrick Thomas – WSJ
Pieter Wingelaar was looking forward to going back to work in his company’s office in Detroit later this month, after more than a year of working remotely. With Covid-19 cases rising again because of the highly transmissible Delta variant and no requirement at his job for employees to be vaccinated, the financial-industry phone-sales officer said he is less sure about returning. “I don’t feel that comfortable about it,” said the 40-year-old, who is fully vaccinated and doesn’t have any pre-existing conditions.

Robinhood IPO: why believers failed to deliver the ‘moonshot’; Fear of regulatory intervention has put off retail traders and institutional investors alike
Madison Darbyshire and Eric Platt and Miles Kruppa – FT
Robinhood built its business on helping millions of American investors lift stocks “to the moon”, a phrase adopted by those seeking to drive up share prices of favoured “meme-stocks”. But as the US brokerage sold its own shares to the public for the first time on Thursday, the favour was not returned as many ignored the call to buy and some even relished the slide in its shares.

Robinhood Duo Ride Trading Frenzy to Billionaire Riches
Anders Melin – Bloomberg
Vlad Tenev, Baiju Bhatt helped usher in era of no-fee trading; Tenev worth $2.2 billion after IPO, Bhatt is at $2.5 billion
Vlad Tenev and Baiju Bhatt, the Robinhood Markets Inc. co-founders who drew a generation of young people into investing on their phones, are officially billionaires. Robinhood’s stock closed at $34.82 Thursday in its first day of trading in New York, down 8.4% from its initial public offering price of $38. That put the net worth of Tenev, the company’s chief executive officer, at $2.2 billion, according to the Bloomberg Billionaires Index. Bhatt, who shared the CEO duties until last year, is worth $2.5 billion.

SEC Rules for Workplace Data Would Be Good for Investors; U.S. regulators are considering better standards for disclosures about workers. America can’t afford to wait.
Paul Dickinson and Meredith Sumpter – Bloomberg
The U.S. has been underinvesting in workers for decades, so it’s good news that the Securities and Exchange Commission is considering new rules requiring companies to disclose diversity, pay levels and staff turnover. Investors are increasingly demanding such information as they take a broader view of what determines corporate success.

Goldman Sachs boosts junior pay after burnout complaints; First-year analysts to start on $110,000 a year amid pandemic-driven M&A boom
Stephen Morris and Tabby Kinder – FT
Goldman Sachs has become the last of the big investment banks to raise salaries for junior staff in response to complaints about burnout from new recruits caught in a dealmaking boom during the pandemic.

Square to acquire Afterpay for $29bn as ‘buy now, pay later’ booms; Jack Dorsey’s deal in fast-growing fintech sector is largest in Australia’s history
Dave Lee and Jamie Smyth – FT
Payments company Square has reached a deal to acquire Australian “buy now, pay later” provider Afterpay in a $29bn all-stock transaction that would be the largest takeover in Australian history.

Fintechs Need to Be Regulated More Like Banks, Says Report From Global Regulator Group; BIS paper says big financial technology firms may need to be considered systemically important, a designation currently reserved for big banks and insurers
Julie Steinberg – WSJ
Calls are growing louder to impose more stringent regulation on technology giants that spill over into financial services. A paper published by the Bank for International Settlements, a consortium of central banks and financial regulators, said tech companies that play a critical role in payments and other areas should be subject to stricter regulatory scrutiny that considers issues beyond traditional market risks.

Payments App Square to Acquire Australian Company Afterpay; The deal, for $29 billion, would introduce Afterpay’s “buy now, pay later” service to U.S. consumers and the small businesses that process their credit card transactions on Square.
Lauren Hirsch – NY Times
Two financial technology giants that are taking on the traditional banking industry are joining forces to build their alternative to credit cards. Square said on Sunday that it planned to acquire the Australian “buy now, pay later” company Afterpay in an all-stock deal that values Afterpay at about $29 billion.

China Seeks More Communication With U.S. on Overseas IPOs
Bloomberg News
SEC requires additional risk disclosures for Chinese issuers; China, U.S. regulators are boosting oversight of Chinese IPOs
China’s securities regulator called for talks with its American counterpart after the U.S. Securities and Exchange Commission increased disclosure requirements for initial public offerings of Chinese companies amid nearly a $1 trillion share selloff last week.

SEC to Set New Disclosure Requirements for Chinese Company IPOs; New disclosures focus on structure of Chinese shell companies, uncertainty around Chinese government actions
Paul Kiernan – WSJ
The Securities and Exchange Commission will increase scrutiny of Chinese companies that aim to sell shares in the U.S. following new restrictions from China’s government on companies that raise capital offshore.

Fed Chairman Powell’s Approach to Regulation Has Drawn Criticism From Some Democrats; Sens. Warren and Brown are among those who say Fed weakened post-2008 rulebook for banks
Andrew Ackerman – WSJ
President Biden’s looming decision about who should be the next Federal Reserve chairman is prompting reviews of the current chief’s record on bank regulation and how strict the postcrisis rulebook should be for Wall Street.

Robinhood Sold IPO Shares to More Than 300,000 of Its Customers; Buyers represented about 1.3% of the online brokerage’s 22.5 million funded accounts
Marie Beaudette – WSJ
Hundreds of thousands of Robinhood Markets Inc.’s HOOD 0.95% customers bought shares in the trading app’s rocky initial public offering earlier this week. In a post on its app, Robinhood said 301,573 users participated in the IPO, which raised about $2 billion and valued the company at $32 billion. That represents about 1.3% of the company’s 22.5 million funded accounts as of June 30.


Pfizer, Moderna Increase EU Vaccine Pricing in Latest Deals: FT
Megan Durisin – Bloomberg
Pfizer Inc. and Moderna Inc. have increased the prices of their Covid-19 vaccines in the latest supply contracts with the European Union, the Financial Times reported.

FDA Under Pressure to Grant Full Approval to Covid-19 Vaccines; Some schools, hospitals and employers are hesitant to mandate vaccines while shots are still only authorized for emergency use
Felicia Schwartz – WSJ
The U.S. Food and Drug Administration is under pressure to swiftly grant full approval to Covid-19 shots, as vaccine mandates take on new urgency for schools, hospitals and employers amid surging cases from the rapidly spreading Delta variant.

How Local Media Spreads Misinformation From Vaccine Skeptics; Facebook and other social media have been under scrutiny for vaccine misinformation, but local outlets have also sometimes been active.
Sheera Frenkel and Tiffany Hsu – NY Times
The Freedom’s Phoenix, a local news site in Phoenix, and The Atlanta Business Journal, a news site in Atlanta, both published the same article about coronavirus vaccines in March.

World Economy Caps Extraordinary Return From Covid-19 Collapse; Rich countries have roared back from the depths of last year’s contraction, but poor countries lag
Tom Fairless, Stella Yifan Xie and Aaisha Dadi Patel – WSJ
The world economy likely returned to its pre-pandemic size in the spring, according to economists, marking an extraordinary comeback from the deepest global downturn in decades. But new variants of Covid-19 are casting a cloud over the global expansion, disrupting manufacturing powerhouses in Asia, leaving some Western consumers on edge and driving a wedge between rich and poor countries.

Unvaccinated Covid-19 patients are filling up hospitals, putting the care of others at risk, doctors say
Holly Yan and Aya Elamroussi – CNN
Hospitals are surging with unvaccinated patients infected with the Delta variant — which could affect car accident victims and other non-Covid-19 patients who need hospital care, doctors say. “None of these patients thought they would get the virus, but the Delta variant has proven to be so highly contagious that even the young and the healthy, including pregnant patients, are now starting to fill up our hospitals,” said Dr. Neil Finkler, chief clinical officer for AdventHealth Central Florida.

Australia tightens COVID curbs as Brisbane extends lockdown, army patrols Sydney
Renju Jose, Colin Packham – Reuters
Brisbane lockdown extended until Sunday, was due to end Aug 3;New South Wales records 207 COVID-19 cases in past 24 hours; Army patrols Sydney to enforce stay-at-home restrictions
Australia’s Queensland state on Monday extended a COVID-19 lockdown in Brisbane, while soldiers began patrolling Sydney to enforce stay-at-home rules as Australia struggles to stop the highly contagious Delta variant of the coronavirus spreading.

To Fight Vaccine Lies, Authorities Recruit an ‘Influencer Army’; The White House has teamed up with TikTok stars, while some states are paying “local micro influencers” for pro-vaccine campaigns.
Taylor Lorenz – NY Times
Zeiler, 17, a TikTok creator with over 10 million followers, received an email in June from Village Marketing, an influencer marketing agency. It said it was reaching out on behalf of another party: the White House.

How to stay safe as coronavirus cases from the delta variant are on the rise; Why the CDC recommends that even vaccinated people wear masks in indoor public spaces in some places
Kim Bellware – Washington Post
The United States is at an unprecedented juncture of the pandemic, where just under half the population is fully vaccinated, health and safety restrictions are looser than they have been in 18 months, and cases of new coronavirus infections are rising after months of decline. “The pandemic is not over, and delta changes the calculus,” Joel Wertheim, an associate professor in the Division of Infectious Diseases and Global Public Health at the University of California at San Diego, told The Washington Post.

When will the summer coronavirus surge peak? It will get worse before it gets better, experts predict.
Ben Guarino and Dan Diamond – Washington Post
The newly resurgent coronavirus could spark 140,000 to 300,000 cases a day in the United States come August, fueled by the highly transmissible delta variant and the widespread resumption of normal activities, disease trackers predict.

Fauci Says Shots Work Despite Cases Among Fully Vaccinated
Ian Fisher – Bloomberg
But Biden’s Covid adviser says U.S. outbreak will get ‘worse’; A return to lockdowns unlikely despite surge in cases: Fauci
Anthony Fauci, the U.S.’s top infectious-disease doctor, said Covid-19 vaccines work extremely well and that a return to the lockdowns of 2020 is unlikely despite reports of recent outbreaks among fully vaccinated people.

The Covid-19 Outbreak Has a New Epicenter in the U.S.
Ian Fisher – Bloomberg
State now accounts for one in five new case in the U.S.; Disney among Florida businesses to reinstate mask requirements
Florida reported 21,683 new cases on Friday, breaking a daily record for the entire pandemic, according to data from the U.S. Centers for Disease Control and Prevention. The state’s previous one-day record was more than 19,100 in early January, according to CDC data. As the highly infectious delta variant has spread around the U.S., new infections in Florida have skyrocketed over the last month, from a low near 1,000 new daily cases last month.

In Provincetown, Covid Hits 14 Friends in Show of Delta’s Might
Carey Goldberg and Nic Querolo – Bloomberg
Investigators trace hundreds like them for clues about variant; Key question: How often do vaccinated people infect others
Danny Barefoot and 23 friends traveled to Provincetown, Massachusetts, to dine, hit the beach and party, secure in the knowledge they were all fully vaccinated. Fourteen left as potential vectors.

Disney and Walmart mandate vaccines for employees
Moira Ritter – CNN Business
Disney and Walmart, two of America’s largest employers, announced Friday that they are requiring employees be vaccinated.

More than 200 staff members at 2 San Francisco hospitals have tested positive, most in breakthrough Delta infections.
Eduardo Medina – NY Times
At least 233 staff members at two major San Francisco hospitals, most of them fully vaccinated, tested positive for the coronavirus this month, and most, according to a hospital official, involved the highly contagious Delta variant.

Cornell and Yale Bring Back Masks for Indoor Spaces as Delta Upends Plans
Janet Lorin and Carly Wanna – Bloomberg
Brown University to resume mandated Covid-19 testing; Duke will return to requiring masks in all school buildings
Yale and Cornell are reinstating requirements that all individuals wear masks in most indoor campus spaces, joining other colleges in efforts to combat the fast-spreading delta variant.

Some vaccinated Americans have lost their patience with those refusing the shot as Covid-19 cases surge and mandates return
Christina Maxouris – CNN
John McCullough got a chilling look into the horrors of coronavirus while he worked as a contact tracer for a health department in Alexandria, Virginia. So he did his part to keep himself and his community safe: mostly stayed home, wore his mask and had only a close group of people he interacted with.

Where Eviction Risk Is High, Covid Vaccination Rates Are Low; An analysis of nine U.S. cities finds that areas with the lowest vaccination rates are more vulnerable to housing loss, amplifying fears about the risk of lifting the federal eviction ban.
Kriston Capps, Marie Patino, and Jeremy Diamond – Bloomberg
With the end of the federal eviction moratorium at hand in the U.S., researchers fear that a rush of evictions will hit unvaccinated communities hard, potentially exacerbating a new pandemic wave. That fear is supported by new research, which finds that neighborhoods with high numbers of eviction filings have the lowest vaccination rates.

Kenya Approves J&J, Pfizer Covid-19 Vaccines as Cases Surge
David Herbling – Bloomberg
Kenya approved the emergency use of Johnson & Johnson and Pfizer Inc. Covid-19 vaccines, said Fred Siyoi, chief executive officer of the Pharmacy and Poisons Board.

China hunts down Delta variant as Covid outbreak spreads to 14 provinces; Authorities say infection arrived in Nanjing on Russian aircraft but went undetected for 10 days
Christian Shepherd – FT
Chinese authorities are rushing to trace and control the country’s first widespread appearance of the Delta variant as its worst coronavirus outbreak in more than a year spreads to at least 14 provinces.

Exchanges, OTC and Clearing

Nasdaq Acquires Minority Stake in LeveL ATS
Nasdaq (Nasdaq: NDAQ) and LeveL ATS today announced Nasdaq has acquired a significant minority stake in LeveL ATS, a leading, independently operated US Equity Dark Pool trading venue. Through this investment, Nasdaq joins owners including Bank of America, Citi, and Fidelity. The terms of the transaction were not disclosed.

Cboe Global Markets Issues Notification on Spot Volatility Indices
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced that the company recently discovered instances where the spot Cboe Volatility Index® (VIX® Index) calculation differs from the calculation described in the VIX White Paper, which details the formula used for deriving values related to the VIX.

Exchange operator Cboe tops profit view, grows footprint
John Mccrank, Niket Nishant – Reuters
Cboe Global Markets Inc on Friday reported second-quarter earnings above Wall Street expectations, helped by both transactional and non-transactional revenues from the exchanges it operates around the globe, ahead of more overseas expansion.

Euronext CEO says interest in the equity market is going to persist
Stéphane Boujnah, Chairman and CEO of Euronext, discusses the firm’s second-quarter results.

Appointment of Independent Directors and Establishment of Nomination/Remuneration Committees by TSE-Listed Companies
Tokyo Stock Exchange, Inc. has published “Appointment of Independent Directors and Establishment of Nomination/Remuneration Committees by TSE-Listed Companies”, based on corporate governance reports submitted by listed companies as of July 14, 2021.

Trading Overview in July 2021
Japan Exchange Group released Trading Overview in July 2021.
Cash Equity Market – In July 2021, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.4422 trillion; In July 2021, the daily average trading value for the ETF market was JPY 228.9 billion.
Derivatives Market – In July 2021, total derivatives trading volume was 26,189,990 contracts; In July 2021, total derivatives trading value was JPY 198 trillion.

Monthly Trading Value via RFQ Platform “CONNECTOR” in the ETF Market Surpasses 20 Billion Yen
Tokyo Stock Exchange, Inc. (TSE) launched the RFQ (Request For Quote) platform, CONNECTOR, in February of this year with the aim of improving liquidity in the ETF market. On June 28, we announced that the trading value via CONNEQTOR surpassed 10 billion yen in the first five months after the service was launched, and we would like to announce that the use of the service has continued to expand significantly since then, and the trading value in July was approximately 27 billion yen in a single month, surpassing 20 billion yen in a single month.

Status of Acquisition of Own Shares
(Acquisition of Own Shares based on Provisions of the Articles of Incorporation Pursuant to Article 459, Paragraph 1 of the Companies Act) Japan Exchange Group, Inc. hereby announces the status of matters regarding acquisition of own shares pursuant to the provisions of its Articles of Incorporation and Article 459, Paragraph 1 of the Companies Act, which was resolved at its Board of Directors meeting held on April 28, 2021, as follows.

Aquis Exchange achieves record market share
Aquis Exchange PLC
Aquis Exchange PLC (AQX.L), the exchange services group, is pleased to announce that its core Aquis Exchange division (the secondary market multilateral trading facility/”MTF” businesses for European, UK and Swiss large caps) achieved a monthly market share of pan-European trading of 6.2% in July 2021, a new record for the business.

Aquis Exchange sees record pan-European large-cap market share; The Aquis Exchange MTF venue for UK and Swiss large caps achieved a record 6.2% monthly market share in pan-European trading in July.
Wesley Bray – The Trade
Aquis Exchange’s UK and France-based trading venues covering European, UK and Swiss large-cap stocks achieved a record 6.2% monthly market share in pan-European trading in July.

Euronext licenses the CAC40 ESG to Amundi
Euronext today announced that it has licensed its CAC40 ESG[1] index to Amundi, Europe’s largest asset management company, to launch an Exchange Traded Fund (ETF) that will be tracking the CAC40 ESG.

Eurex Exchange Readiness Newsflash | Updates August 2021
With this Newsflash, we would like to draw your attention to the upcoming publications, events and necessary actions for the ongoing initiatives: Amendments to the Connection Agreement, GTC to the Connection Agreement, Provider Connection Agreement and to Price List to the Connection Agreement, Provider Connection Agreement and STPIP/QTPIP Connection Agreement; Fixed Income ETD product scope extension; Tradability of EURO STOXX® Banks Index Total Return Futures and additional MSCI Futures for Participants in the U.S.;

Cash market sales statistics for July
Deutsche Börse
A trading volume of EUR 143 billion was achieved on Deutsche Börse’s cash markets in July (previous year: EUR 147.1 billion). Of this, Xetra accounted for 115.7 billion euros (previous year: 118.4 billion euros), bringing the average daily Xetra turnover to 5.3 billion euros (previous year: 5.1 billion euros). Turnover on the Frankfurt Stock Exchange was EUR 3.8 billion (previous year: EUR 4.9 billion) and on the Tradegate Exchange EUR 23.5 billion (previous year: EUR 23.7 billion).

Expansion of Trading at Settlement (“TAS”) Block Trade Eligibility for Copper Futures
CME Group

SGX welcomes the listing of Lion-OCBC Securities China Leaders ETF
Singapore Exchange (SGX) today welcomed the listing of Lion-OCBC Securities China Leaders ETF with assets under management (AuM) of S$83 million, providing investors with growth opportunities offered by leading companies in China, the world’s second largest economy.


Tech Startup Financing Hits Records as Giant Funds Dwarf Venture Capitalists; Hedge, mutual and pension funds are investing heavily, leading to higher valuations and more leverage for company founders
Heather Somerville – WSJ
Big money-management firms expanded their dominance in Silicon Valley last quarter, crowding out venture capitalists in a once-niche business and putting 2021 on pace to nearly double last year’s record in startup financing.

Zoom reaches $85 million settlement over user privacy, ‘Zoombombing’
Jonathan Stempel – Reuters
Zoom Video Communications Inc agreed to pay $85 million and bolster its security practices to settle a lawsuit claiming it violated users’ privacy rights by sharing personal data with Facebook, Google and LinkedIn, and letting hackers disrupt Zoom meetings in a practice called Zoombombing.

FinTech needs to be regulated like banks, reports from a group of global regulators say
Texas News Today
There is growing demand for stricter regulations on technology giants that spill over into financial services.
According to a paper published by the Bank for International Settlements, a consortium of central banks and financial regulators, tech companies that play a key role in payments and other areas have more stringent regulations that look beyond traditional market risk. Must be scrutinized.

Square to buy Australia fintech Afterpay amid ‘buy now, pay later’ trend
Kate Rooney – CNBC
Square plans to buy Australian fintech company Afterpay as it looks to expand further into the booming installment loan market.
Jack Dorsey’s payments company announced the $29 billion, all-stock deal on Sunday evening. The price tag marks a roughly 30% premium to Afterpay’s last closing price.

MOVES-Credit Suisse poaches HSBC’s fintech banker to revamp FIG franchise – memo
Pamela Barbaglia – Reuters
Credit Suisse has hired HSBC banker Orazio Tarda to bolster its financial services coverage and beef up its senior ranks after a swathe of departures, investigations and divisional reshuffles.
Italian-born Tarda will become the Swiss lender’s global co-head of fintech, according to a memo seen by Reuters, after leading HSBC’s fintech franchise since 2018 in a career spanning 16 years at the bank.

Former MarketAxess operations chief appointed CEO of DLT bond issuance platform; The former COO at MarketAxess and CEO at bond data provider Algomi has joined Nivaura as CEO.
Hayley McDowell – The Trade
A bond issuance platform that deploys blockchain technology has appointed the former chief operating officer at MarketAxess as its new CEO. Scott Eaton takes on the role as chief executive at Nivaura after most recently leading pre-trade bond analytics specialist Algomi as CEO until it was acquired by interdealer broker BGC Partners last year.

JP Morgan Asset Management equities trading technology chief departs for Barclays; Equities trading technology chief at JP Morgan Asset Management has joined Barclays Wealth Management as chief information officer.
Hayley McDowell – The Trade
A managing director who was responsible for equities trading technology globally at JP Morgan Asset Management has departed for a senior role at Barclays. Kenneth McLeish confirmed in a post on social media that he has joined Barclays Wealth Management as chief information officer after six years with JP Morgan’s asset management division.


SolarWinds Hack Reached 27 U.S. Attorneys’ Offices, Justice Says
Bill Allison – Bloomberg
Cyberattack breached email accounts from May to December 2020; Hackers compromised 80% of accounts in New York districts
Hackers behind the SolarWinds cyberattack gained access to employee email accounts in 27 U.S. Attorneys’ offices, the Justice Department said Friday. The attack compromised Microsoft 365 accounts of at least 80% of the department’s employees working in offices located in the Eastern, Northern, Southern and Western Districts of New York. Also affected to a lesser degree were employees in U.S. Attorneys’ offices in 14 other states, including California, Florida, Maryland, Texas and Virginia, as well as the District of Columbia.

You Anon; Reconsidering pseudonymity and what it means to “be yourself” online.
John Herrman – NY Times
In early July, when England’s soccer team lost the European Championship final to Italy on its home turf, the crushing defeat was followed by a torrent of racist abuse on social media directed at the team’s Black players. The messages — part of an ongoing pattern of social media bigotry — were condemned by politicians, platforms, teammates and fans.

US, UK and Australia Issue Joint Cyber ??Security Advisory
Daniel Kuhn – Illinois News Today
Cyber ??Security and Infrastructure Security Agency (CISA), Australian Cyber ??Security Center (ACSC), UK National Cyber ??Security Center (NCSC), and Federal Bureau of Investigation (FBI) Joint Cyber ??Security Advisory Today, we focus on the top Common Vulnerabilities and Exposures (CVE) that were routinely exploited by cyber actors in 2020 and the vulnerabilities that have been widely exploited so far in 2021. Public and private sector organizations around the world. Organizations are encouraged to apply the available patches for the 30 vulnerabilities listed in the Joint Cybersecurity Advisory and implement a centralized patch management system.

The Cybersecurity 202: The government’s facing a severe shortage of cyber workers when it needs them the most
Joseph Marks and Aaron Schaffer – The Washington Post
The government is struggling to hire cybersecurity workers at the same time it is facing an unprecedented slate of hacking threats. The dearth of cyber workers is making it harder to protect government data from being stolen by adversaries and diminishing its ability to help improve cybersecurity in industries vital to national and economic security. It also worsens the dangers posed by the government’s notoriously outdated technology systems.

Cyber Daily: Amazon Hit With Record EU Privacy Fine | VC Investor Data Stolen
The Washington Post
Luxembourg’s $887 million penalty against Amazon over privacy violations signals that the European Union’s regulators are taking a more aggressive stance on enforcement, The Wall Street Journal reports.

Hackers dump Electronic Arts data stolen after blackmail failure
Dev Kundaliya – Computing
The hackers who stole a wealth of data from game publishing giant Electronic Arts (EA) last month have dumped their haul on an underground forum, after failing to extort the firm. The criminals released the data on 26th July, according to The Record, and it’s now being widely distributed on torrent sites. The Record’s analysis of the leaked files found they did indeed contain the source code of for FIFA 21, as had initially been claimed when the hack was announced.


Fed’s Brainard: Can’t wrap head around not having U.S. central bank digital currency
Ann Saphir – Reuters
Federal Reserve Governor Lael Brainard on Friday laid out a range of reasons for “urgency” around the issue of developing a U.S. central bank digital currency, including the fact that other countries such as China are moving ahead with their own.

MicroStrategy Bitcoin Bet Is a Win And a Loss at the Same Time
Bailey Lipschultz and Tom Contiliano – Bloomberg
Company’s nominal Bitcoin gains reach nearly $1.4 billion; Earnings showed $689.6 million loss related to the token
MicroStrategy Inc.’s big, and growing, bet on Bitcoin has the company sitting on massive paper gains despite having to write off millions in accounting charges related to the token.

‘Green Bitcoin Mining’: The Big Profits In Clean Crypto
Chris Helman – Forbes
Bitcoin is infamous for wasting enough electricity to add 40 million tons of carbon dioxide to the atmosphere a year — but now, a growing cadre of U.S. miners are developing green, and lucrative, new strategies worth a fortune all their own.

German Crypto Law Allowing Special Funds to Hold Digital Assets Takes Effect Today
Steve Muchoki – Coinspeaker
A new law that allows institutional investors in Germany to tap crypto assets is set to take effect as of Monday, August 2, 2021. Almost half a trillion dollars is expected to be channeled into the crypto industry. Notably, over 4,000 German institutional investors with over $2.1 trillion can put up to 20% of their funds into the crypto market from Monday onwards thanks to a new law.

Crypto Investors Get Ready for More Taxes — but Clearer Rules
Ben Steverman, Claire Ballentine, and Donald Moore – Bloomberg
Sure, you might have to actually pay U.S. taxes on those crypto trades. But at least it will be easier to figure out how much you owe. A new push by Congress to require crypto brokers to report transactions to the Internal Revenue Service could create some unwelcome tax bills but could clarify rules for traders and users of Bitcoin and other digital tokens, potentially strengthening the system in the long run, people in the industry say.

Bitmain Co-Founder Turns His Second Crypto Venture Into Unicorn
Zheping Huang – Bloomberg
Matrixport, the crypto-finance venture led by Bitmain Technologies Ltd.’s billionaire founder Wu Jihan, has raised fresh capital from investors including DST Global and Tiger Global, ramping up its pre-money valuation to $1 billion in two years since its inception.
The Series C funding round was led by DST Global, C Ventures and K3 Ventures with other participants including Qiming Venture Partners and existing backers like IDG Capital and Dragonfly Capital, the firm said in a statement Monday. The Singapore-based startup has raised over $100 million in the round with a second tranche to come, Chief Executive Officer Ge Yuesheng said in an interview.

Crypto Exchanges Face New Reporting Requirements And Stiff Penalties Under Senate Infrastructure Bill
Guinevere Moore – Forbes
The Senate released 2,702 pages of the latest version of the bi-partisan infrastructure bill early Sunday evening. Notably absent is funding for increased IRS enforcement, but notably included is increased information reporting for cryptocurrency exchanges, or “brokers” of cryptocurrency transactions. Increased information reporting necessarily includes increased information reporting penalties. And these particular information reporting penalties are incredibly stiff.

NFTs Could Go Even More Mainstream With Shopify’s Latest Move
Selina Xu – Bloomberg
Platform to offer direct sales through individual storefronts; Merchants will have more responsibility in process: Nansen
Nonfungible tokens have shot to popularity in the past year. Shopify Inc.’s move to facilitate sales might bring them even further into the mainstream.


Ex-Wife’s Property, Utah Ranch: How Wealthy Secure High Bails
Breanna Bradham, Devon Pendleton, and Claire Ballentine – Bloomberg
Pair of nine-figure bails shows how wealthy stay out of prison; Pretrial releases show justice system disparity, experts say
In less than a week, Trump ally Tom Barrack was freed for $250 million and Nikola Corp. founder Trevor Milton was released for $100 million — two of the highest U.S. bail amounts in recent years. The bail amounts highlight a little understood part of the criminal justice system, where deals are often made behind closed doors, and what critics say is a system that traps the poor.

Infrastructure Deal Puts Cryptocurrencies in Washington’s Cross Hairs; A provision in the Senate legislation would give the I.R.S. more power to scrutinize a largely unregulated corner of finance.
Alan Rappeport – NY Times
In a hunt for funds to help pay for the Senate’s bipartisan infrastructure package, lawmakers have turned to the cryptocurrency industry as a potential source of tax revenue and are proposing tougher scrutiny of digital transactions.

Brexit’s Feared Diplomatic Crises Have Begun; Parting ways with the EU has left Boris Johnson’s government facing foreign-policy setbacks in Gibraltar, the Channel and Ireland.
Max Hastings – Bloomberg
Among the arguments that persuaded British people like me to oppose Brexit was that it would create a raft of new diplomatic headaches the U.K. does not need, in exchange for an anemic sort of new “freedom.”

A New Age of Anger Awaits India and Brazil; As in South Africa, the pandemic is exposing years of social division, rising inequality and incompetent governance.
Pankaj Mishra – Bloomberg
Two decades ago, a Goldman Sachs executive coined the label BRICs to describe four big emerging nations: Brazil, Russia, India and China. Rapid growth and expansion of the ranks of the wealthy in these countries vindicated the faith of investors. Their leaders started to hold annual summit meetings and even established their own development bank. They invited South Africa to become a member in 2011, conveniently completing the catchy acronym.

With Time Ticking Down, Hope Is Waning for a Climate Deal; After two mostly unsuccessful meetings of the world’s largest economies, only three months remain to reach agreement on key issues.
Bloomberg News
When India failed to show up at climate talks in London last week, the meeting’s British hosts took it as a snub. It was also a stark reminder of how hard it’s going to be for diplomats to pull the global climate back from the brink of disaster, with less than three months to go before the next round of high-stakes negotiations.


Mark Branson starts in the office of the new BaFin President – and wants to push ahead with the modernization of German financial supervision
As of today, Germany’s financial supervisory authority has a new boss: Mark Branson (52) takes over the office of President of the Federal Financial Supervisory Authority, BaFin , and chooses Bonn as his official seat. He is now officially the successor to Felix Hufeld (60).

China securities watchdog seeks closer cooperation with U.S.
China’s securities regulator said on Sunday it will seek closer cooperation with its U.S. counterpart and will support overseas listings, after U.S. regulators tightened disclosure for Chinese companies and voiced concern about Beijing’s regulatory actions.

ASIC bans Gold Coast financial advisers for five years
ASIC has banned Gold Coast-based advisers, Trent Allan and Fabrizio Urrutia, from providing any financial services for five years. ASIC found that Mr Allan and Mr Urrutia had not complied with financial services laws and ASIC has reason to believe that they are not adequately trained or competent to provide financial services.

ASIC cancels financial services licence of Jyoti Rahman
ASIC has cancelled the Australian financial services (AFS) licence of Victorian-based financial services licensee Jyoti Rahman (AFSL number 488 976). The AFS licence was cancelled because the licensee is no longer providing financial services.

Court finds RI Advice liable for failing to supervise financial adviser following ASIC investigation
The Federal Court found RI Advice Group Pty Ltd (RI Advice) failed to take reasonable steps to ensure that its former financial adviser, John Doyle, provided appropriate advice to clients, acted in the clients’ best interests and put the clients’ interests ahead of his own.

SEC Charges Real Estate CEO With Defrauding Investors
The Securities and Exchange Commission today announced securities fraud charges against recidivist Michael Shustek, the CEO of several Las Vegas real estate investment trusts (REITs), and his wholly owned investment advisory firm, Vestin Mortgage LLC.

Statement on Investor Protection Related to Recent Developments in China
Chair Gary Gensler – SEC
Recently, the government of the People’s Republic of China provided new guidance to and placed restrictions on China-based companies raising capital offshore, including through associated offshore shell companies. These developments include government-led cybersecurity reviews of certain companies raising capital through offshore entities.

Statement on FINRA Rule Regarding High-Risk Firms
Commissioner Allison Herren Lee, Commission Caroline A. Crenshaw – SEC
Today, the Commission approved FINRA’s proposed rule change to, among other things, impose additional obligations on FINRA member firms with a significant history of misconduct, as well as those firms that employ individual brokers with such histories (collectively “high risk firms”).[1] We appreciate FINRA’s attention to these high risk firms because they raise important investor protection concerns. We were pleased to see FINRA’s commitment to working with state securities regulators to share information regarding these firms.[2] We are also pleased that FINRA’s Board recently approved a plan for a separate filing to disclose the identities of high risk firms to the public, which it expects to file promptly.[3] A firm’s high-risk status is important information and will help investors make informed choices about the firms they select. We intend to monitor this important investor protection issue and will evaluate whether additional steps may be needed to address recidivist firms and brokers.

ESMA publishes latest edition of its newsletter
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its latest edition of the Newsletter “Spotlight on Markets”.

Investing and Trading

HOOD gets a B Minus
Joshua M Brown – The Reformed Broker
You can say whatever you want about the lack of a pop. But in the end, their employees and investors are now liquid to monetize some of their shares at an incredibly high valuation, their users were able to participate in the deal – in size – and, fairly importantly, they managed to raise over $2 billion, which is still real money.

Heavyweight Companies Enjoy Outsize Rewards as Economy Rebounds; Corporate titans during the Covid-19 pandemic have extended their lead over smaller rivals
Tom Fairless – WSJ
Big companies raced ahead during the Covid-19 pandemic, leveraging the changes driven by the deepest business disruption in decades to grab a larger slice of the economic pie. Now, as the rich world bounces back from the shock, the heavyweights are extending that lead, spending more on investments and acquisitions, snapping up talent, employing big data and leveraging new technologies.

Fed’s Kashkari Warns Delta Variant Could Slow Jobs Recovery
Alister Bull – Bloomberg
Minneapolis Fed president interviewed on ‘Face the Nation’; Says U.S. labor market still in a ‘deep hole’ due to Covid-19
Minneapolis Fed President Neel Kashkari said the spread of the delta variant of Covid-19 could keep some Americans from looking for work, potentially harming the U.S. recovery.

The Week in Business: Robinhood Fizzled as Silicon Valley Sizzled
Sarah Kessler – NY Times
Robinhood Goes Public Without a Bang
Robinhood’s highly anticipated public offering fizzled on Thursday. Shares in the stock-trading start-up opened at $38, but ended the day down 8.4 percent. The decline reflected investors’ skepticism of Robinhood’s grand mission of upending Wall Street. As part of that mission to democratize investing, Robinhood offered as many as a third of its initial shares to its customers through its app. That could have reduced a first-day trading “pop,” which is typically driven by retail investors who were shut out of an initial public offering. Robinhood ended Thursday with a value of around $29 billion — still not bad for an eight-year-old company.

Treasury Traders Eye Supply-Demand Risks With Yields Near Lows
Alex Harris – Bloomberg
Fed moving toward taper, while Treasury likely to cut supply; Upcoming week includes quarterly refunding and U.S. jobs data
The timing of major upcoming shifts in Treasury supply and demand will be crucial in determining if the recent downward trend in yields continues or finally reverses.

Morton Salt lays off 40% of employees at its Chicago headquarters under new investment firm owner
Robert Channick – Chicago Tribune
Morton Salt, the 173-year-old Chicago company recently purchased by a California investment firm, laid off 120 employees at its downtown headquarters this week, slashing its office staff by 40%. The downsizing decision follows Morton Salt’s $3.2 billion sale in April to Stone Canyon Industries, a global industrial holding company that has quickly established itself through acquisitions as the largest salt producer in the world.

Why bond funds may be riskier than they seem; Research claims many portfolios are misreported by managers to game rating system
Robin Wigglesworth – FT
Would a rose by any other name smell as sweet? It is a question many bond investors should be asking themselves and the managers of their money.

Allianz Shares Sink on DOJ Investigation Into Structured Alpha Funds; Funds managed by Allianz took heavy losses when hedges meant to protect against market falls didn’t perform during March 2020 panic
Julie Steinberg and Mauro Orru – WSJ
Allianz SE shares sank after the German financial giant said the Justice Department is investigating its hedge funds that caused investors significant losses during the pandemic-related market downturn early last year.

Environmental, Social and Corporate Governance

Coal Projects in Asia Face Dwindling Financing as Climate Pressure Mounts; Banks pull back funds for new coal plants, a move that could accelerate world’s transition toward cleaner fuels—but China and India plans loom
Phred Dvorak, Sha Hua and Frances Yoon – WSJ
Banks are cutting off funding for new coal-fueled power plants in poorer Asian countries, a move that could hasten the shift toward cleaner energy sources in some of the fastest-growing parts of the world.

Baked barnacles, scorched cherries: the disastrous impact of heatwaves on plants and animals; More than a billion sea creatures across the Pacific north-west perished in this year’s heatwave. And it’s just a taste of what’s to come
Gabrielle Canon – The Guardian
When forecasts foreshadowed the Pacific north-west’s devastating heatwave at the end of June, marine biologist Christopher Harley was alarmed and intrigued.

The secrets of the Alps’ strange red snow; Growing patches of coloured snow in the French Alps could be a sign of the impact climate change is having in the mountains.
Dhananjay Khadilkar – BBC
It is a shocking, garish sight to come across on a peaceful mountainside. Hike high enough in the French alps during the late spring and early summer, and there is a good chance that you will come across some rather strange patches of snow among the grey limestone and stunted clumps of vegetation. This snow isn’t white – it’s blood red.

Towns Trying to Ban Natural Gas Face Resistance in Their Push for All-Electric Homes; Massachusetts is at the center of a battle over phasing out gas for cooking and heating
Katherine Blunt – WSJ
Massachusetts is emerging as a key battleground in the U.S. fight over whether to phase out natural gas for home cooking and heating, with fears of unknown costs and unfamiliar technologies fueling much of the opposition to going all-electric.

Behind the Rise of U.S. Solar Power, a Mountain of Chinese Coal; Reliance on coal-fired electricity to produce solar panels raises concerns in the West
Matthew Dalton – WSJ
Solar panel installations are surging in the U.S. and Europe as Western countries seek to cut their reliance on fossil fuels. But the West faces a conundrum as it installs panels on small rooftops and in sprawling desert arrays: Most of them are produced with energy from carbon-dioxide-belching, coal-burning plants in China.

Fossil fuel groups step up lobbying of SEC to dilute climate reporting rules; Oil and gas industry stiffens resistance to tougher new environmental regime
Patrick Temple-West and Myles McCormick – FT
The oil and gas industry is stepping up lobbying efforts to dilute looming rules that mandate climate change disclosures, in a sign of the fierce corporate resistance to a tougher new US environmental regime.

‘Greenflation’ threatens to derail climate change action; Fossil fuels will be needed in the green transition but vital supplies are being squeezed
Ruchir Sharma – FT
The world faces a growing paradox in the campaign to contain climate change. The harder it pushes the transition to a greener economy, the more expensive the campaign becomes, and the less likely it is to achieve the aim of limiting the worst effects of global warming.

UK pension funds warn diversity will count when choosing asset managers; Group with investments of £1tn says gender and ethnic mix of workforce will be factored in when awarding contracts
Attracta Mooney – FT
Asset managers have been put on notice to tackle the lack of diversity in their workforce or risk losing clients by a group of UK pension funds and investment consultants that collectively oversee more than £1tn in assets.

Utilities Eye Mini Nuclear Reactors as Climate Concerns Grow; Despite the enticement of carbon-free power, critics say small modular reactors have the same safety and cost challenges of big nukes
Elena Shao – WSJ
U.S. utilities are looking to miniature nuclear reactors, as they seek a steady energy source that can help reduce the carbon emissions linked to climate change. While power companies have stopped building big nuclear reactors because of cost overruns and construction delays, not all utilities are giving up on nuclear power.


HSBC’s Profit Jumps as Pandemic Provisions Recede; Global lender says it will resume paying dividends
Smon Clark and Quentin Webb – WSJ
HSBC Holdings PLC’s net profit rose in the second quarter as the London-based lender reduced provisions for bad loans caused by the economic fallout from the coronavirus pandemic. The banking giant, which is sharpening its focus on lucrative Asian markets, unveiled a forecast-beating quarterly profit of $3.4 billion and said it would resume paying dividends—a key focus for many investors in the sector.

HSBC profits surge to $5.1bn as global economic gloom lifts; Bank to pay interim dividend and cancel $300m in bad loan provisions
Stephen Morris and Tabby Kinder – FT
HSBC became the latest European bank to resume dividends and cut the amount it set aside to cover coronavirus pandemic-related loan losses, helping drive an almost fivefold rise in second-quarter earnings as the global economic outlook brightened.

Fired Executive Says Deutsche Bank’s DWS Overstated Sustainable-Investing Efforts; Asset management arm painted a rosier-than-reality picture to investors on ESG, according to Desiree Fixler and documents. DWS says her office didn’t gain expected traction.
Patricia Kowsmann and Ken Brown – WSJ
Deutsche Bank AG’s DB -3.02% asset management arm, DWS Group, DWS 1.16% tells investors that environmental, social and governance concerns are at the heart of everything it does and that its ESG standards are above the industry average.

Vanguard customer claims investment giant delayed his trade in newly listed SPAC; This Vanguard customer couldn’t trade a newly-listed SPAC, an echo of customer complaints from Robinhood app users this past January.
Erin Arvedlund – The Philadelphia Inquirer
Gary Spillane holds more than $1 million in his family’s assets at Vanguard. His is one of many high-net-worth brokerage accounts at the Malvern-based investment giant. But on Monday, July 19, Spillane logged on to sell 3,000 shares of a newly listed company, Evolv Technologies Holding, the first day it began trading.

Citigroup CFO Sees No Impact From China’s Regulatory Crackdown
Jennifer Surane – Bloomberg
Citigroup Inc.’s chief financial officer said China’s recent moves to crack down on companies isn’t likely to harm the bank’s business across the Asia-Pacific region.

Goldman Bets on City Bounceback With Paris Real Estate Deal
Jack Sidders – Bloomberg
Its asset management unit has agreed to buy a Parisian block; Rue Saint-Honoré in located in one of the toniest districts
Goldman Sachs Group Inc. is betting that prime retail and office space in Europe’s top capitals still has a bright future. The firm’s asset management unit has agreed to acquire a block in the French capital that it plans to transform into an upscale store, with office space above, according to Tavis Cannell, who is co-head of EMEA real estate. It’s the latest in a series of real estate bets the bank is making on the future of cities as the world begins its gradual recovery from the coronavirus pandemic.

Credit Suisse Bet So Much on Archegos for So Little; The hedge fund debacle that cost the bank $5.5 billion exposed a singularly lackadaisical and reckless culture.
Timothy L. O’Brien and Chris Hughes – Bloomberg
A recurring theme in the gripping and extraordinarily detailed report about Credit Suisse Group AG’s $5.5 billion loss at the hands of Archegos Capital Management is how easily it could have been avoided.

Goldman Sachs Raises Junior Banker Pay, Aligning With Rivals
Mary Biekert – Bloomberg
Goldman Sachs Group Inc. raised pay for its junior investment bankers, among the last of the big Wall Street banks to do so following a presentation by the lender’s own analysts revealing their crushing workloads.

Hedge funds enter private equity turf with deals for unlisted companies; Buying into private companies seen as way to bypass overcrowded IPOs
Laurence Fletcher – FT
Hedge funds are looking to buy into unlisted companies, betting that an area of the markets that has wrongfooted the industry in the past can now provide them with the kind of lucrative gains enjoyed by private equity rivals.

Why some wealth managers hate wealth; UBS is the biggest beneficiary of wealth inequality but also one of its loudest critics
Patrick Jenkins – FT
“How can we [ . . .] fight increased inequality?” railed Ralph Hamers in a recent interview. To be clear, Hamers is not the boss of Unicef, or Oxfam or the Social Mobility Foundation. He is chief executive of Swiss bank UBS, one of the biggest beneficiaries of the widening wealth gap.

Allianz warns of potential financial hit from ‘Structured Alpha’ legal battle; Share fall wipes EUR7bn off value as DoJ launches probe into investment decisions that triggered lawsuits
Olaf Storbeck – FT
Allianz is warning that an escalating legal dispute over actions taken by some of its investment funds in the US during the early days of the pandemic last year may result in a painful financial hit.


Lack of Foreign Workers Has Seasonal Businesses Scrambling; Even with a visa cap increased, the pandemic’s disruption has left a dearth of landscapers, crabbers and restaurant help.
Patricia Cohen and Sydney Ember – NY Times
Tyler Holt summed up the problem his Utah landscaping business faces every year. “People who want to be in the job force want stability — if they want to work, they work full time,” he said. “Locally there’s just no workers who want to do anything seasonal.”

Why Some Hong Kongers Are Leaving But Big Money Isn’t
Enda Curran and Chris Anstey – Bloomberg
China has effectively crushed Hong Kong’s pro-democracy movement over the past year, calling into question the civil liberties and rule of law that helped make the city an international financial hub. Yet even as the U.S. government warns businesses about the risks — and many activists and others in the former British colony seek to emigrate — signs of an investor exodus are harder to find. For many global businesses Hong Kong is still the main gateway to the lucrative mainland market. How long this divergence between business and politics can continue is an open question.

Chile Workers at World’s Biggest Copper Mine Vote to Strike; Union says BHP’s offer contained no performance-linked compensation or bonuses for keeping La Escondida operating during Covid-19 pandemic
Jeffrey T. Lewis and Rhiannon Hoyle – WSJ
The union representing workers at Chile’s La Escondida copper mine said its members voted to reject the most recent contract offer from the mine’s owner and go on strike, potentially risking disruptions to the supply of a key metal as the world’s economy continues to recover from the impact of the coronavirus pandemic.

Bacon may disappear in California as pig rules take effect
Scott McFretridge – AP
Thanks to a reworked menu and long hours, Jeannie Kim managed to keep her San Francisco restaurant alive during the coronavirus pandemic. That makes it all the more frustrating that she fears her breakfast-focused diner could be ruined within months by new rules that could make one of her top menu items — bacon — hard to get in California.

China tech crackdown claims ETF victims; Thematic funds with narrow focus on affected sectors feel the burn
Emma Boyde – FT
Beijing’s regulatory crackdown on some of its biggest companies in technology and education has delivered a bruising blow to highly specialised China-focused exchange traded funds.


The Future Will Be Weirder Than We Think; Developments in the next few decades could change humanity for the next few millennia.
Tyler Cowen – WSJ
How weird is the future going to be? Just a little bit — or plain flat-out radically unthinkably weird? And is this future 1,000 years from now — or 100? The notion that the future will be weirder than we think, and come sooner, is a possibility raised by Holden Karnofsky, the co-chief executive officer of Open Philanthropy. It’s an intriguing and provocative idea.

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