Central banks step up fightback against cryptocurrencies

Jun 23, 2021

First Read

$49,706/$300,000 (16.6%)


Hits & Takes
John Lothian & JLN Staff

Would you like to serve the futures industry in the U.S. to preserve the self-regulatory structure? The NFA is seeking committee members and arbitrators. More details are HERE.

Known for his cow-print trading jacket, Scott Shellady is moving to Nashville, Tennessee, and has accepted a position as a TV host with the nation’s largest agricultural cable news network, RFD TV/Rural Media Group. The show is called the Market Day Report and it runs daily from 9 a.m. to 2 p.m. CST. The show airs in 54 million households and is carried by all major cable providers except Xfinity.

The JLN team met in our offices in the CBOT Building Tuesday for the first time since the pandemic hit. Even Nancy Ashburn was in town. It was nice to see everyone in person.

There were the greatest number of people downtown and in the CBOT Building that I have seen recently. It has increased just in the last two weeks. It reminded me of two things. One is that it is nice to accidentally run into people. Two, it reminded me how much I hate the commute downtown.

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. I did interview former CBOT trader Bruce Williams over Zoom and PJ Quaid in our offices in the CBOT Building.

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

Our friends over at Katten Muchin have written a note about a case alleging market manipulation that is proceeding in federal court in New York. The case, which a federal appeals court is allowing to go forward, was brought against Credit Suisse for its hedging activities in the VIX futures during February 2018’s “Volmageddon.” Credit Suisse was an issuer of notes tied inversely to the VIX, and Credit Suisse seemed to think that its prior disclosure of its hedging activities inoculated it from concerns about the effects of its trading on market conditions. The district court agreed with Credit Suisse, the circuit court disagreed and now the case goes forward. Read Katten’s note here. ~Thom Thompson

Chuck Mackie reports from another crypto conference with “Shining a Light on Digital Asset Markets 2021 — Day One” on Medium – “Three takeaways from the latest in a seemingly endless line of crypto events.” You can read his comments here. ~SR

Laura Morrison, Cboe senior VP and global head of listings, on Thursday hosts options trader and educator Jon Najarian, Innovator ETF CEO Bruce Bond, and Innovator VP of research Graham Day for an online chat on the outlook for the second half of 2021 and options strategies to enhance returns. More information is here. ~SC


American Financial Exchange® Launches AMERIBOR® Term Structure Of Interest Rates Based On Overnight AMERIBOR Cash And Futures Prices
The American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing for American banks and financial institutions, announces today the launch of the AMERIBOR® term structure of interest rates based on the overnight unsecured AMERIBOR cash rate and the implied rates from AMERIBOR futures contracts currently listed on the Cboe Futures Exchange (CFE).

*****Building the curve one section at a time.~JJL


The World’s Financial Centers Struggle Back to the Office
Emily Cadman, Steven Arons, Charlotte Ryan, Felix Tam, Faris Mokhtar, Nic Querolo, Sarah Holder, Natalie Wong, Hayley Warren and Sam Dodge – Bloomberg
The journey back to your desk is shaping up to be slow and indirect. Roughly 15 months after locking down to ward off Covid-19, several of the globe’s key financial centers are struggling to get employees back to their offices. Workplace activity in London, New York and San Francisco is still 50% below its normal level, according to mobility data from Google, which tracks the locations of its users. Other evidence from Frankfurt, Singapore and Hong Kong reveals how virus-related restrictions have changed habits and caused new problems.

******We still have a long way to go.~JJL


AFME appoints Goldman Sachs sales head as first female chair; New chair takes over from Michael Cole-Fontayn who has been chair of trade group AFME for the last six years.
Annabel Smith – The Trade
The Association of Financial Markets in Europe (AFME) has appointed the head of global sales strats and structuring at Goldman Sachs as its first female chair.

***** Progress is being made.~JJL


TT® Score: The Perfect Marriage of Augmented Analytics and Big Data Visualizations
Jay Biondo – TT
“Some people call this artificial intelligence, but the reality is this technology will enhance us. So instead of artificial intelligence, I think we’ll augment our intelligence.”
Ginni Rometty, former CEO of IBM
This quote from Ginni Rometty perfectly captures what we have been aiming to accomplish with TT Score since we started working on it several years ago. We are not applying machine-learning technology to trade surveillance in order to automate compliance officers out of their jobs.

****** The perfect marriage involves the balance of the right number of fights and of making up.~JJL


Tuesday’s Top Three
Our top story Tuesday was The Financial Times’s Ex-Deutsche Bank trader sentenced to prison in ‘spoofing’ case, about former London-based metals trader James Vorley. Second was, for the fourth time in the top three, U.S. financial executive dies by suicide as firm faces fraud claims, from Reuters via Yahoo. Third was ‘I regret any harm:’ Short seller compensates target in rare move, from Reuters, in which a small Texas investor who caused shares of a REIT to drop 39 percent in one day agreed to pay the company restitution to settle a lawsuit against him.


MarketsWiki Stats
26,419 pages; 233,859 edits
MarketsWiki Statistics


Lead Stories

Central banks step up fightback against cryptocurrencies; Battle for control of global monetary system escalates as BIS warns against private innovation
Eva Szalay – FT
Central banks have launched a fightback against cryptocurrencies just weeks after the global banking regulator called for tougher rules for holding digital assets, in a sign that the battle for control of the monetary system is escalating.

The SPAC Man Method: Inside the Billionaire Rush for Riches; As insiders have raced to push businesses into the public’s hands, they’ve employed a range of maneuvers to boost their fortunes.
Heather Perlberg – Bloomberg
Ok, here’s the play: slip information to stock analysts, let whispers spread through the market — and watch the money grow. Even for Howard Lutnick, a Wall Street billionaire known for sharp elbows, a move like that might sound close to the line. But there was Lutnick, dialing into a videoconference, suggesting that very idea. Relax, Lutnick told potential investors. Rules are rules, he assured the listeners — but you can be very smart about them.

AFME Appoints Thalia Chryssikou As New Chair Of The Board ?
The Association for Financial Markets in Europe (AFME) has today announced that, Thalia Chryssikou, Head of Global Sales Strats & Structuring at Goldman Sachs, has been appointed as Chair of the Board. She takes over from Michael Cole-Fontayn who has been a member of the AFME Board since 2011 and served as Chair between September 2015 and June 2021.

Brexit Five Years After Referendum Shows No Gain, Just Pain; Strong gains in GDP are belied by deteriorating productivity, eroding global trade and a weakened currency.
Matthew A. Winkler – Bloomberg
It’s been five years since U.K. citizens voted to exit the European Union and almost 200 days since they belatedly departed. The decision looks to be working in the U.K.’s favor – at least on the surface.

London Looks Past Brexit to Eclipse Rivals in Emerging Markets
Selcuk Gokoluk and Aine Quinn – Bloomberg
Bond listings hit $124 billion in 2020, up sevenfold from 2016; City grabs bigger share in surging volumes of Asian currencies
Britain’s decision to break from the European Union five years ago set off alarms that London would lose its pre-eminence as a global financial center. In the world of emerging markets, it appears to have been quite the opposite. Far from triggering an exodus of business to rival hubs such as Paris and Frankfurt, the Brexit process has coincided with an increase in the buying and selling of currencies and bonds from developing economies through the U.K. capital. Since Britain voted to leave the EU in June 2016, trading in the Chinese yuan, Indian rupee and Russian ruble has ballooned, according to Bank of England data. And it’s a similar story when it comes to sales and listings of emerging-market debt.

‘Money is being thrown’ at them but millennials don’t want to be bankers; For those who want to stay in finance, non-bank financial institutions, growth equity firms and other, smaller financial-services businesses have become better options.
Anjani Trivedi – Bloomberg
News of young talent fleeing investment banks, employers scrambling to lure them back, and all the memes of overworked analysts might make it seem like woke millennials aren’t willing to burn the midnight oil. Post-pandemic life has been an opportunity for introspection. Gone are the days when a long, lucrative career in finance — and all the social capital that comes with it — seemed appealing.

Downward spiral in liquidity is leading to more market shocks; Sudden droughts exacerbate rising episodes of stress for investors
Rishabh Bhandari – FT
Broad market liquidity — the ease with which investors can buy or sell a security without affecting its price — has been in a downward spiral for more than 10 years.

Being a leader at BlackRock; Head of EMEA equity trading at BlackRock, Paul Battams, sits down with Hayley McDowell to discuss evolving market structure trends and his top priorities as a buy-side trading leader at the world’s largest asset manager.
Hayley McDowell – The Trade
As head of EMEA equity trading at the world’s largest asset manager, no two days are the same for Paul Battams. Despite managing the team of 14 traders at BlackRock that cover equities and equity derivatives across the region, Battams still executes frequently and remains connected and plugged into the market each day.

Goldman Sachs begins trading on JPMorgan repurchase blockchain network
Business Times
Goldman Sachs Group has joined the blockchain-based network created by JPMorgan Chase & Co for repurchase agreements that use smart contracts and a digitized version of the US dollar.


Israel faces Covid surge as virus circulates even among vaccinated
Campbell MacDiarmid – The Telegraph
Israel has recommended vaccinating teenagers following several coronavirus outbreaks clustered around schools, with even fully vaccinated people contracting the virus as authorities blame the more infectious delta variant

Wall Street giant Morgan Stanley to bar unvaccinated staff
Wall Street giant Morgan Stanley’s staff and clients will be barred from entering its New York offices if they are not fully vaccinated against Covid. Unvaccinated employees will need to work remotely, according to a person familiar with the matter.

The Pandemic’s End Is as Messy as the Start; China has delivered 1 billion vaccine doses and Europe is opening up, but Covid-19’s long tail is still swinging brutally into swathes of the world.
Clara Ferreira Marques. – Bloomberg
China has now delivered more than 1 billion vaccine doses, hitting that Covid-19 milestone the same weekend that Brazil passed one of its own: more than 500,000 deaths. Daily case numbers remain worryingly high, and those hospitalized and dying include larger numbers of young people. India, meanwhile, is at risk of a third wave of infections sooner than predicted, after a devastating second.

Nine Months After Lockdowns, U.S. Births Plummeted by 8%
Alexandre Tanzi – Bloomberg
December numbers are early evidence of impact from Covid-19; For 2020, the decline is largest since 1973, CDC data show
Nine months after the declaration of a national emergency due to the emergence of the Covid-19 pandemic, U.S. births fell by 8% in a month. The December drop marked an acceleration in declines in the second part of the year. For the full year, the number of babies born in the country fell 4% to about 3.6 million, the largest decline since 1973, according to a Wednesday report from the Centers for Disease Control and Prevention.

Covid Delta strain risks spreading ‘like wildfire’ among unvaccinated in US; More contagious variant accounts for more than a third of new cases, raising fears of another surge
Nikou Asgari in New York and John Burn-Murdoch – FT
The Delta variant of coronavirus that has swept across Europe is now gaining ground in the US, posing a particular threat to unvaccinated people and risking a surge in cases.

Covid Surge in Africa Raises Fears of a Calamity Like India’s; The pandemic is worsening in Africa as more contagious variants spread, vaccinations lag and hospitals in some places are pushed beyond their limits.
Abdi Latif Dahir – NY Times
Before Kenya’s president and other leaders arrived in late May to mark a major public holiday, health officials in Kisumu on Lake Victoria saw disaster brewing. Coronavirus infections were spiking, hospital isolation units were filling up and the highly contagious Delta variant had been found in Kenya for the first time — in Kisumu County.

Exchanges, OTC and Clearing

MarketAxess expands protocols for portfolio trading to streamline workflows; Multi-directional and multi-currency lists will be supported for portfolio trading at MarketAxess as protocol continues to grow in fixed income.
Hayley McDowell – The Trade
Fixed income platform provider MarketAxess has added new functionality to its portfolio trading solution to streamline workflow for clients executing single, list and portfolio trades.

Tradeweb $190 million acquisition of Nasdaq fixed income platform to close on 25 June; Nasdaq and Tradeweb confirmed in February that they had entered into a definitive agreement for Tradeweb to purchase Nasdaq’s fixed income business.
Annabel Smith – The Trade
Tradeweb has confirmed that its $190 million acquisition of Nasdaq’s fixed income electronic trading platform will close on 25 June. The fixed income platform provider said regulatory approvals had been received after it agreed the $190 million cash deal with US exchange group Nasdaq in February.

Nasdaq Announces Expected Closing Date for Sale of U.S. Fixed Income Business to Tradeweb Markets
Nasdaq, Inc. (Nasdaq: NDAQ) announced today that all required regulatory and self-regulatory approvals have been obtained for the previously announced sale of its U.S. fixed income business, Nasdaq Fixed Income (NFI), to Tradeweb Markets Inc. (Nasdaq: TW), a leading global operator of electronic marketplaces for rates, credit, equities and money markets.

Administrative and Harmonization Amendments to the Certain Energy Futures and Option Contracts to Codify Subject to Rule 589. (“Special Price Fluctuation Limits”)
CME Group
Effective Sunday, July 11, 2021 for trade date Monday, July 12, 2021, and pending all relevant CFTC regulatory review periods, New York Mercantile Exchange, Inc. (“NYMEX” or “Exchange”) will amend certain energy futures and option contracts (the “Contracts”) as noted in the table below.

Amendments to CME, CBOT, NYMEX and COMEX Rule 589. (“Special Price Fluctuation Limits”), the Special Price Fluctuation Limits and Daily Limits Table and Application of Dynamic Price Fluctuation Limits to Short-Term Interest Rate, Certain Foreign Exchange (FX) Futures Contracts and Certain Metals Futures Contracts
CME Group
Pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”) and Commodity Exchange, Inc. (“COMEX”) (collectively, the “Exchanges”) shall amend CME, CBOT NYMEX/COMEX Rule 589. (“Special Price Fluctuation Limits”) and the related Special Price Fluctuation Limits and Price Limits table (the “Table”) (collectively, the “Rule Amendments”) to apply dynamic price fluctuation limits to certain CME foreign exchange (“FX”) futures and all NYMEX and COMEX metals futures contracts (effective on trade date Monday, July 12, 2021) and certain CME and CBOT short term interest rate (“STIRs”) futures contracts (effective on trade date July 26, 2021) as noted in the tables below.

Amendments to the E-mini Nasdaq Biotechnology Index Futures Contract
CME Group
Effective Sunday, August 15, 2021 for trade date Monday, August 16, 2021, and pending all relevant Commodity Futures Trading Commission (“CFTC”) regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will amend the E-mini Nasdaq Biotechnology Index Futures contract (the “Contract”) (Rulebook Chapter 360; CME Globex Code: BIO; CME ClearPort Code: BQ; BTIC Code: BIT) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission of clearing via CME ClearPort as more specifically described below.

New Product Summary: Initial Listing of the Low Sulphur Gasoil (10mt) Financial Futures Contract
CME Group
Initial Listing of the Low Sulphur Gasoil (10mt) Financial Futures Contract.

Tehran Stock Exchange Elected For FEAS Board
The Federation of Euro-Asian Stock Exchanges (FEAS) announces the 32nd Annual General Assembly meeting. The Federation of Euro-Asian Stock Exchanges (FEAS) announces the 32nd Annual General Assembly meeting. Because of the Covid-19 pandemic, the event is organized in Online Format. The one-day online event has gathered together the executives of the stock exchanges and depositories of the members of the federation from more than 20 countries.

Nasdaq Dubai Welcomes The Dual-Listing Of 3iQ’s ‘The Bitcoin Fund’, The First Listed Digital Asset-Based Fund In MENA
The Fund, from Canada’s largest digital asset manager, enables investors to trade its units within a highly regulated and transparent exchange environment;Investors can transfer units of the Fund from the Toronto Stock Exchange to Nasdaq Dubai; Listing reinforces Dubai’s position as a driving force for capital market transformation
3iQ Corp., Canada’s largest digital asset investment fund manager with more than C$2.5 billion in assets under management, today officially listed The Bitcoin Fund, (Trading Symbol: QBTC), on Nasdaq Dubai, the region’s international exchange. The regulated Bitcoin-based exchange traded product is the Middle East and North Africa’s (MENA) first listed digital asset-based fund. The listing of the fund, which leverages Dubai’s world-class regulatory environment that supports new economy business and investment growth, reinforces the city’s position as a driving force for capital market transformation.


Even the Swiss Are Shifting to Cashless Payments
Catherine Bosley – Bloomberg
Cashless forms of payments are making inroads even in the country famous for its 1,000-franc ($1,087) banknote. In Switzerland, the proportion of payments made with cash has dropped “significantly” in recent years, according to a central bank study published on Wednesday.

Rising demand for one-stop-shop trading systems sparks vendor consolidation; ION’s acquisition of DASH and Broadway, TS Imagine’s merger, and Broadridge’s acquisition of Itiviti all took place in the last seven months as the market continued to consolidate.
Annabel Smith – The Trade
Increased demand from the buy-side for one-stop shop trading systems has seen a wave of mergers and acquisitions among technology providers in the last 12 months.

Egypt eyes surge in fintech investment after new laws
Patrick Werr – Reuters
New legislation and regulatory changes in Egypt are set to unleash a surge in new fintech investments and change the way the country’s largely unbanked citizens do business, industry players say.

A $7 Billion Fintech Super App Eyes 12-Fold Growth, IPO by 2025
Sohee Kim – Bloomberg
Viva Republica Inc., operator of South Korea’s largest fintech startup Toss, raised more than $400 million at a $7.4 billion value, to help the super app grow sales 12-fold by 2025 as it heads for a potential initial public offering.
The Seoul-based startup raised $410 million, with more than half coming from foreign investors including Alkeon Capital Management and Altos Ventures, founder and Chief Executive Officer Lee Seung-gun said in an interview. State-run Korea Development Bank pumped 100 billion won into the round. It’s considering another fundraising in the first half of 2022 that will be its largest ever and the last before the startup seeks an IPO within the next five years.

In its first funding in 7 years, profitable fintech Lower raises $100M Series A led by Accel
Mary Ann Azevedo – TechCrunch
Lower, an Ohio-based home finance platform, announced today it has raised $100 million in a Series A funding round led by Accel.
This round is notable for a number of reasons. First off, it’s a large Series A even by today’s standards. The financing also marks the previously bootstrapped Lower’s first external round of funding in its seven-year history. Lower is also something that is kind of rare these days in the startup world: profitable. Silicon Valley-based Accel has a history of backing profitable, bootstrapped companies, having also led large Series A rounds for the likes of 1Password, Atlassian, Qualtrics, Webflow, Tenable and Galileo (which went on to be acquired by SoFi).

The battle forming in the European fintech scene
Lucinda Shen – Fortune
It’s no secret: Venture capitalists have grown bullish about Europe.
In the first quarter of the year, startups in the region raised about $21.4 billion, up 130% compared to the amount raised in the same period a year prior, according to data from Crunchbase. For comparison, funding to startups globally grew 94% in the same time frame.


Addressing the cybersecurity skills gap through neurodiversity
Cat Contillo – TechCrunch
Addressing the skills gap and strengthening your own security team means bringing in different minds and perspectives — and that starts with embracing neurodiversity. To even have a chance at closing the cybersecurity skills gap, we need people with a variety of different abilities and thought processes. But did you know that there’s an untapped potential in individuals who are neurodivergent?

US Cyber Command leads competition in effort to strengthen nation’s cybersecurity
Maggie Miller – TheHill
Cyber professionals from the U.S. and multiple other countries are in the midst of an annual competition led by U.S. Cyber Command meant to enhance the nation’s cybersecurity in wake of months of devastating attacks.
The annual Cyber Flag competition this year brought together 430 cyber professionals on 17 teams representing U.S. Cyber Command and other Defense Department agencies, the House of Representatives, the National Guard, and the U.S. Postal Service. It also incorporates teams from the United Kingdom and Canada.

SEC Brings Charges for Cybersecurity Disclosure Failures
BakerHostetler – JDSupra
On June 14, 2021, the U.S. Securities and Exchange Commission (SEC or Commission) settled charges against an issuer for disclosure controls and procedures violations relating to a cybersecurity vulnerability that exposed sensitive customer information. The charges, stemming from a violation of Rule 13a-15(a) of the Securities Exchange Act of 1934, resulted in a $487,616 penalty for the issuer.

Ohio needs to take decisive action on cybersecurity — with or without federal funding: Editorial
Ohio Gov. Mike DeWine was right to send his homeland security adviser to Washington to ask Congress for cybersecurity funds.
But that is just a start.
Ohio cannot afford to wait for a federal subsidy. DeWine’s administration needs to take aggressive action on its own.

The Cybersecurity 202: The NSA wants to collaborate with industry in a major institutional shift
Joseph Marks – The Washington Post
The National Security Agency, which once did its work almost entirely in the shadows, is evolving into a far more public institution that’s eager to cooperate with parts of the private sector.
The most visible symbol of that shift is a cybersecurity collaboration center that opened in January and is custom-designed for agency officials to host industry cybersecurity pros and hash out responses to major hacking challenges.

Deep Learning Is Our Best Hope for Cybersecurity, Deep Instinct Says
Alex Woodie – Datanami
Thanks to the exponential growth of malware, traditional heuristics-based detection regimes have been overwhelmed, leaving computers at risk. Machine learning approaches can help, but the bottleneck presented by the feature engineering step is a potential dealbreaker. The best path forward at this point is deep learning, says the CEO of Deep Instinct, which claims to have taken an early lead in the emerging field.
Ten years ago, the cybersecurity industry faced a dilemma. The volume of malware was exploding, with tens of thousands of new types discovered every day. Traditional antivirus products, which were evolving from rudimentary signature-based methods to slightly more advanced heuristics-based approaches, were struggling to keep up.


Crypto is ‘rat poison’, a third of mainstream investment firms tell JPM
Only 10% of institutional investment firms surveyed by JPMorgan trade cryptocurrencies, with nearly half labelling the emerging asset class as “rat poison” or predicting it would be a temporary fad.

World’s Top Bitcoin Mining-Rig Maker Halts Sales as Clients Flee
Zheping Huang – Bloomberg
Bitmain takes step to help prop up second-hand prices; Cost of a top-tier rig plunged by about 75% since April
Bitmain Technologies Ltd. has suspended sales of machines for spot delivery globally, aiming to prop up local prices after crypto miners fleeing Beijing’s crackdown dumped used mining rigs on the market.

The First Question on Coinbase’s Earnings Call Should Have Been a Huge Red Flag
Joe Weisenthal – Bloomberg
The coins continue to plunge today, with Bitcoin trading near its May 23 flash crash lows. Of course, it’s easy in retrospect to go back over the last few months and point out all of the seemingly obvious signs of froth. Too many to list.

China’s Crypto Crackdown Expected to Push Mining Overseas
Joanna Ossinger – Bloomberg
U.S., Canada, Sweden seen to be alternative destinations; Less than 50% of mining in China by year end: Weiskopf
China’s crackdown on the cryptocurrency industry is expected to spur miners to uproot their operations and head abroad. The exodus is seen occurring as China reins in crypto mining, trading and other services. Binance Holdings Ltd., which is the world’s biggest crypto exchange and also runs a major mining pool, is one of those noticing the difference.

Mideast Joins Bitcoin Craze With First Dubai Crypto Listing
Farah Elbahrawy – Bloomberg
The Bitcoin Fund listed on the Nasdaq Dubai exchange Wednesday, the first of its kind to trade in the Middle East as cryptocurrencies grab attention globally. The stock closed at $38.30, up 10% for the day, according to prices on Nasdaq Dubai’s website.

South Korea seizes crypto assets from wealthy tax dodgers; TV host and doctor among those hit as country boosts crackdown on digital currencies
Edward White – FT
A television host and a doctor are among thousands of wealthy South Koreans whose cryptocurrency holdings have been seized in a tax sting as a crackdown intensifies in one of the world’s most active markets for trading digital assets.

State Street plans crypto ETF back-office ‘land grab’; Asset manager believes it is inevitable the SEC will eventually give funds a green light
Jackie Noblett – FT
Administering back-office services for cryptocurrency ETFs will play a big part in State Street’s attempt to generate significant new business from asset managers’ and institutions’ ardour for digital assets and blockchain, executives said last week.

Crypto Bans Will Not Stop Wider Adoption
Sean Stein Smith – Forbes
Whether or not crypto is banned, or forbidden to be used in certain jurisdictions will only have a very limited impact on the continued expansion of the space.

Bitcoin drop below $30,000 sparks fears of another crypto winter
MacKenzie Sigalos – CNBC
Bitcoin’s brief drop below the symbolic price threshold of $30,000 on Tuesday has reignited talk of a crypto winter. It doesn’t help that cryptocurrencies like dogecoin, XRP and others saw sharp drops in the last 24 hours.
But experts tell CNBC that bitcoin’s fundamentals are good, and the market conditions in 2021 are very different than the last big crypto crash in 2018.

No End to Whiplash in Meme Stocks, Crypto and More
Erin Griffith – NY Times
All year, amateur investors, propelled by a social media frenzy and a bit of boredom, have poured money into risky forms of investments like meme stocks, SPACs and Bitcoin.
With the pandemic easing in the United States and the country reopening, many market watchers expected the investment world to return to something resembling normalcy.

Gen Z investing in cryptocurrency BTC, ETH and meme stocks AMC, GME
Taylor Locke – CNBC
The next generation of investors are super online ?— instead of traditional investments, many Gen Z and young millennial investors, from teens to those in their early 20s, are bullish on cryptocurrency and the technology that surrounds it.
This includes digital coins and blockchains, like bitcoin and ethereum; meme coins, like dogecoin; NFTs, or nonfungible tokens; and DeFi, or decentralized finance.

The battle forming in the European fintech scene
Lucinda Shen – Fortune
It’s no secret: Venture capitalists have grown bullish about Europe.
In the first quarter of the year, startups in the region raised about $21.4 billion, up 130% compared to the amount raised in the same period a year prior, according to data from Crunchbase. For comparison, funding to startups globally grew 94% in the same time frame.


U.K. Poised to Ease Travel Curbs as Airlines Step Up Demands
Tim Ross – Bloomberg
Green list of safe destinations will stay small, officials say; Hancock says point of vaccines is to allow rules to be eased
Boris Johnson’s government is preparing to allow Britons who have been fully vaccinated against coronavirus to travel to more than 150 countries without the need to quarantine on their return to England later this summer.


SEC Charges ICO Issuer and CEO With Fraud and Unregistered Securities Offering
The Securities and Exchange Commission today announced settled charges against Loci Inc. and its CEO John Wise for making materially false and misleading statements in connection with an unregistered offer and sale of digital asset securities.

Can the SEC Make ESG Rules that are Sustainable?
Commissioner Elad L. Roisman – SEC
Thank you Gary [LaBranche] and the National Investor Relations Institute for inviting me to speak at your 2021 Virtual Conference. Of course, I will clarify up front that the views I express are my own and do not necessarily reflect those of the Commission.

CFTC Staff Issues Advisory to Swap Dealers Regarding the Use of Internal Models in Calculating Minimum Capital Requirements
The Commodity Futures Trading Commission’s Market Participants Division (MPD) today issued an advisory to swap dealers clarifying the use of internal models in calculating minimum capital requirements.

NFA seeking committee members and arbitrators
As the industrywide, self-regulatory organization for the U.S. derivatives industry, NFA strives to safeguard the integrity of the derivatives markets, protect investors and ensure Members meet their regulatory responsibilities.

Investing and Trading

Bubble Expert Jeremy Grantham Addresses ‘Epic’ Equities Euphoria
Kriti Gupta – Bloomberg
Investors are seeing the ‘finale to an 11-year bull market’; Evidence is clear but psychologically difficult to process
It’s been just over a year since the last stock market crash, and investors are wondering if another one is on the way. With economic momentum slowing as the effects of fiscal stimulus wear off, it’s no surprise that equities seem to be fading, too. Meanwhile, labor shortages and stretched supply chains remain lingering issues, while inflation is starting to be passed on to consumers. It seems like this should be a risk-off environment. But retail traders appear to be the only investors having a good time. Does that mean we’re in a bubble and due for a pop?

Where the World’s Richest 1% Are Gaining Wealth the Fastest
Benjamin Stupples and Marion Halftermeyer – Bloomberg
Rate cuts fueled wealth gains at top, Credit Suisse reports; World’s 500 richest added $1.8 trillion to net worth in 2020
The share of the wealth held by the richest 1% in nations including the U.S., China, Brazil and India jumped in the fallout from the pandemic, fueled by efforts to curb the effects of the virus, according to Credit Suisse Group AG. Brazil’s rich boosted their share by 2.7% last year to make up almost 50% of the nation’s wealth, the most of 10 countries cited in the Swiss bank’s Global Wealth Report released Tuesday.

No, the U.S. Isn’t Being Overrun by Zombie Companies; New data from Goldman Sachs suggests that the amount of debt issued by undead companies in the junk-bond market actually fell in 2020.
Tracy Alloway – Bloomberg
The zombies are coming! So say numerous reports arguing that the Federal Reserve’s unprecedented monetary stimulus has unleashed a wave of cheap money that’s resulted in an army of undead corporate entities. Companies that should have expired in the Covid-induced economic crisis have instead been able to reanimate and survive by borrowing billions in cheap money from undiscerning investors. In doing so, the suggestion is that they’re sucking credit away from ‘good’ businesses and sapping productivity from the economy overall.

How ‘dark arts’ and dirty tricks turned investors against Toshiba; Friday’s AGM could see the whole board dismissed as anger over collusion between big business and government mounts
Leo Lewis and Kana Inagaki – FT
Japan had just declared itself in a state of national pandemic emergency, and Toshiba’s head of communications called an urgent meeting with two senior government officials to discuss a looming crisis. But coronavirus was not the issue. Was it legally possible, asked Masayasu Toyohara on April 11 2020, to “eliminate or control undesirable organisations and institutions?”.

House prices climb to record levels in US and Europe; US existing home prices jumped 23.6% year-on-year in May to an average of $350,300
Martin Arnold and Colby Smith and Matthew Rocco – FT
House prices have set records in the US and parts of Europe as vast fiscal and monetary stimulus help residential property markets to continue shrugging off the impact of the coronavirus pandemic.

No End to Whiplash in Meme Stocks, Crypto and More; With the pandemic starting to ease in the United States, many had expected a year of wild investments to slow. It hasn’t. Yet.
Erin Griffith – NY Times
All year, amateur investors, propelled by a social media frenzy and a bit of boredom, have poured money into risky forms of investments like meme stocks, SPACs and Bitcoin. With the pandemic easing in the United States and the country reopening, many market watchers expected the investment world to return to something resembling normalcy.

Your Steak Is More Expensive, but Cattle Ranchers Are Missing Out; Demand for beef is spiking as people dine out and grill, but the profits aren’t being evenly distributed. Ranchers blame the big meatpacking companies.
Julie Creswell – NY Times
At Harris’ in San Francisco — a quintessential American steakhouse with dark wood, cozy leather booths and dry martinis — the price of the popular eight-ounce filet mignon with two sides recently increased $2 to $56.

Environmental, Social and Corporate Governance

How to Separate Real ESG Funds From the Not-So-Real; This is now a question for the U.S. Securities and Exchange Commission, as the regulatory watchdog wanders into a thicket of inconsistent standards.
Tim Quinson – Bloomberg
Worldwide, there are more than 600 exchange-traded funds that claim to follow the principles of environmental, social and governance investing—in one way or another. But how many of them really do?

New climate reporting rules to be extended by UK financial regulator; Most London listed companies and asset managers to be included by FCA in response to investor pressure
Kate Beioley and Camilla Hodgson – FT
The UK financial regulator has outlined plans to extend climate reporting requirements to most UK listed companies as well as domestic asset managers, in an attempt to meet growing investor demand for disclosure.

Amazon and Other Tech Giants Race to Buy Up Renewable Energy;
As technology companies reshape the market, they face pressure to demonstrate that their investments are reducing overall emissions
Sam Schechner – WSJ
The race to secure electricity deals for power-hungry data centers has tech companies reshaping the renewable-energy market and grappling with a new challenge: how to ensure their investments actually reduce emissions.


Private Equity Faces Off Hedge Fund Shorts in Bid for U.K. Plc
Nishant Kumar and Benjamin Robertson – Bloomberg
Takeover bid for Morrison supermarket chain prompted rally; Short sellers betting against grocer raced to stem the damage
Hedge funds saw a consumer company set to struggle as the U.K. emerges from the pandemic and grapples with the aftermath of Brexit. A private equity giant saw a buying opportunity. Wm Morrison Supermarkets Plc was among the country’s most-shorted stocks before a buyout offer from Clayton Dubilier & Rice sent the shares up by the most in three decades. It’s served as a warning for those making bearish bets as cash-rich private equity companies have been spotting bargains across Britain.

Ireland to Sell Part of $807 Million Bank of Ireland Stake
Morwenna Coniam and Peter Flanagan – Bloomberg
The Irish government has a 13.9% holding in the lender; Finance bailout needed about $76 billion of taxpayer funds
The Irish government plans to sell part of its 676 million euro ($807 million) stake in Bank of Ireland Group Plc. over the next six months or so, the latest stage in its bid to recoup the bank bailout that almost bankrupted the nation.


Flood Risk Replaces Drought as Rains Fill Taiwan Reservoirs
Raymond Wu and Cindy Wang – Bloomberg
Government eases curbs on water use for second time in June; Recent drought disrupted power supply, driven up food costs
Taiwan will ease water restrictions in several areas as heavy downpours bring relief from the worst drought on record, with officials now turning their attention to preventing floods as annual “Plum rains” fill up reservoirs.

Australia’s pension titans set to storm private capital markets; Funds are bypassing private equity firms to place big bets on companies directly
Robin Wigglesworth and Josephine Cumbo – FT
Super-sized Australian pension funds that collectively control more than $2tn are expanding their in-house investment teams to join up with or even bypass private equity firms to place big bets on companies directly.


Blackstone’s Schwarzman makes bid for gold with Olympic largesse; Private equity titan is top donor to US track and field hopefuls living ‘hand to mouth’
Sara Germano – FT
Brittney Reese, an Olympic gold and silver medallist in the women’s long jump, is hoping to make her fourth US team this week when she competes for a spot on the American delegation to Tokyo.

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Here’s why your food prices keep going up

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First Read $53,406/$300,000 (17.8%) ++++ Hits & Takes John Lothian & JLN Staff The SEC has surpassed $1 billion in awards for its whistleblower program with the latest awards totalling $114 million, including an award of $110 million to a single whistleblower....

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